Motorola 2012 Annual Report Download - page 99

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91
During 2011, approximately 1,300 employees, of which 800 were direct employees and 500 were indirect employees,
were separated from the Company. The $58 million used in 2011 reflects cash payments to these separated employees. The
remaining accrual of $30 million was included in Accrued liabilities in the Company’s consolidated balance sheet at
December 31, 2011.
2010 Charges
During 2010, the Company continued to implement various productivity improvement plans aimed at achieving long-
term, sustainable profitability by driving efficiencies and reducing operating costs. Both of the Company’s segments were
impacted by these plans. The employees affected were located in all geographic regions.
The Company recorded net reorganization of business charges of $73 million, including $19 million of charges in Costs
of sales and $54 million of charges under Other charges in the Company’s consolidated statements of operations. Included in
the aggregate $73 million are charges of $73 million for employee separation costs and $16 million for exit costs, partially
offset by $16 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by segment:
Year ended December 31, 2010
Government $57
Enterprise 16
$73
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs and
employee separation costs from January 1, 2010 to December 31, 2010:
2010
Accruals at
January 1
Additional
Charges Adjustments
Amount
Used
Accruals at
December 31
Exit costs $ 16 $ 16 $ (3)$ (12)$ 17
Employee separation costs 31 73 (13)(41)50
$ 47 $ 89 $ (16)$ (53)$ 67
Exit Costs
At January 1, 2010, the Company had an accrual of $16 million for exit costs attributable to lease terminations. The 2010
additional charges of $16 million were primarily related to the exit of leased facilities and contractual termination costs. The
adjustments of $3 million reflect reversals of accruals no longer needed. The $12 million used in 2010 reflected cash payments.
The remaining accrual of $17 million, which was included in Accrued liabilities in the Company’s consolidated balance sheets
at December 31, 2010, represented future cash payments, primarily for lease termination obligations.
Employee Separation Costs
At January 1, 2010, the Company had an accrual of $31 million for employee separation costs, representing the severance
costs for approximately 1,400 employees. The additional 2010 charges of $73 million were severance costs for approximately
an additional 1,600 employees, of which 800 were direct employees and 800 were indirect employees. The adjustments of $13
million reflect accruals no longer required.
During 2010, approximately 1,000 employees, of which 700 were direct employees and 300 were indirect employees,
were separated from the Company. The $41 million used in 2010 reflected cash payments to these separated employees. The
remaining accrual of $50 million was included in Accrued liabilities in the Company’s consolidated balance sheet at
December 31, 2010.
14. Intangible Assets and Goodwill
The Company accounts for acquisitions using purchase accounting with the results of operations for each acquiree
included in the Company’s consolidated financial statements for the period subsequent to the date of acquisition. The pro forma
effects of the acquisitions completed in 2012, 2011, and 2010 were not significant individually or in the aggregate. The
Company did not have any significant acquisitions during the years ended December 31, 2012, 2011 and 2010.