EMC 2009 Annual Report Download - page 69

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
As of December 31, 2009, the aggregate outstanding principal amount under all loans was $121.7 million. These loans are junior to Quantum's current
senior debt and senior to all other indebtedness. These notes are included in "other assets, net" in the consolidated balance sheet.
We maintain an allowance for doubtful accounts for the estimated probable losses on uncollected notes receivable. That allowance is part of our
allowance for bad debts (See Note A).
J. Property, Plant and Equipment
Property, plant and equipment consist of (table in thousands):
December 31,
2009
December 31,
2008
Furniture and fixtures $ 229,006 $ 224,736
Equipment 3,447,209 3,387,498
Buildings and improvements 1,427,656 1,280,580
Land 122,260 115,873
Building construction in progress 91,501 95,219
5,317,632 5,103,906
Accumulated depreciation (3,093,286) (2,880,899)
$ 2,224,346 $ 2,223,007
Depreciation expense was $565.5 million, $561.1 million and $530.3 million in 2009, 2008 and 2007, respectively.
K. Accrued Expenses
Accrued expenses consist of (table in thousands):
December 31,
2009
December 31,
2008
Salaries and benefits $ 742,748 $ 712,237
Standard product warranties 271,594 269,218
Restructuring (See Note Q) 105,760 224,702
Other 824,108 695,727
$ 1,944,210 $ 1,901,884
Product Warranties
Systems sales include a standard product warranty. At the time of the sale, we accrue for systems' warranty costs. The initial systems' warranty accrual
is based upon our historical experience, expected future costs and specific identification of systems' requirements. Upon expiration of the initial warranty, we
may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is included in deferred revenue and
recognized ratably over the service period. The following represents the activity in our warranty accrual for our standard product warranty (table in
thousands):
Year Ended December 31,
2009 2008 2007
Balance, beginning of the year $ 269,218 $ 263,561 $ 242,744
Provision 145,517 160,556 151,367
Amounts charged to the accrual (143,141) (154,899) (130,550)
Balance, end of the year $ 271,594 $ 269,218 $ 263,561
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