Xerox to Report $183 Million Litigation Charge in First-Quarter
Press release from the issuing company
STAMFORD, Conn.--April 21, 2003-- Xerox Corporation said today that it expects to include a litigation charge of 25 cents per share in its first-quarter results. The company also noted that its operational performance in the quarter exceeded expectations, excluding this item.
The after-tax litigation charge of $183 million refers to the Berger v. Retirement Income Guarantee Plan litigation, a case brought against the company's primary U.S. pension plan for salaried employees. RIGP is appealing a ruling made in September 2002 by the United States District Court for the Southern District of Illinois. External counsel and RIGP continue to believe that the appeal has merit and that the district court's judgment should be overturned. However, following the oral argument of the plan's appeal to the Seventh Circuit Court of Appeals on April 9, Xerox reassessed the level of probability for a favorable outcome. Under accounting standards, this reassessment requires the company to take a charge for the value of the judgment.
If the district court ruling is upheld on appeal, any final judgment would be paid from RIGP assets. Should the company need to make a cash contribution to compensate for any potential shortfall in the plan related to this litigation, it would not be required to begin doing so until 2005.
Xerox is scheduled to release first-quarter earnings at 7am ET on Wednesday, April 23.
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