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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Actual cash collections may differ from amounts shown on the table due to early customer buyouts, trade-ins or refinancings. In addition, EMC may
sell its notes receivable and underlying equipment associated with its sales-type leases to third parties.
H. Property, Plant and Equipment
Property, plant and equipment consists of (table in thousands):
December 31,
2002
December 31,
2001
Furniture and fixtures $ 142,669 $ 146,369
Equipment 1,669,535 1,888,361
Buildings and improvements 828,569 683,515
Land 103,939 93,159
Construction in progress 162,570 328,172
2,907,282 3,139,576
Accumulated depreciation (1,282,886) (1,312,245)
$ 1,624,396 $ 1,827,331
Construction in progress and land owned at December 31, 2002 include $95.3 million and $4.0 million, respectively, of facilities under construction
that EMC is holding for future use. Depreciation expense was $495.3 million, $462.2 million and $354.9 million in 2002, 2001 and 2000, respectively.
I. Accrued Expenses
Accrued expenses consist of (table in thousands):
December 31,
2002
December 31,
2001
Salaries and benefits $ 297,386 $ 310,214
Product warranties 104,258 118,347
Restructuring (See Note C) 224,253 233,153
Other 322,460 362,497
$ 948,357 $ 1,024,211
Product Warranties
Systems sales include a standard product warranty. At the time of the sale, EMC accrues for systems' warranty costs. Upon expiration of the initial
warranty, EMC may sell maintenance contracts to its customers. Revenue from these maintenance contracts is deferred and recognized ratably over the
service period. The initial systems' warranty accrual is based upon EMC's historical experience and specific identification of systems' requirements. The
amounts charged and accrued against the warranty reserve are as follows (table in thousands):
Year Ended December 31,
2002 2001 2000
Balance, beginning of the year $118,347 $107,266 $ 60,165
Current year accrual 50,275 83,927 109,375
Amounts charged to the accrual (64,364) (72,846) (62,274)
Balance, end of the year $104,258 $118,347 $107,266
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