Employee Termination, Asset Impairment and Other Charges

The Company recorded the following charges related to employee terminations benefits, asset impairment and other charges:



	Three Months Ended				Nine Months Ended
	March 31, 2017		April 1, 2016		March 31, 2017			April 1, 2016
	(in millions)
Employee termination and other charges:
Restructuring Plan 2016	$	6	$	64	$	52		$	64
Closure of Foreign Manufacturing Facility	3		24		9			24
Business Realignment	26		22		69			94
Total employee termination and other charges	35		110		130			182
Stock-based compensation accelerations and adjustments
Restructuring Plan 2016	—		—		(1		)	—
Business Realignment	4		6		10			9
Total stock-based compensation accelerations and adjustments	4		6		9			9
Asset impairment:
Closure of Foreign Manufacturing Facility	—		24		13			24
Business Realignment	—		—		—			8
Total asset impairment	—		24		13			32
Total employee termination and other charges, stock-based compensation adjustments and asset impairments	$	39	$	140	$	152		$	223

Restructuring Plan 2016

In 2016, the Company initiated a set of actions relating to the restructuring plan associated with the integration of substantial portions of its HGST and WD subsidiaries (“Restructuring Plan 2016”). Restructuring Plan 2016 consists of asset and footprint reduction, product road map consolidation and organization rationalization. In addition to the amounts recognized under Restructuring Plan 2016 for employee termination, asset impairments and other charges, as presented above, the Company recognized $7 million and $37 million during the three and nine months ended March 31, 2017, respectively, of accelerated depreciation on facility assets in cost of revenue and operating expense.

The following table presents an analysis of the components of the activity against the reserve during the nine months ended March 31, 2017:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at July 1, 2016	$	26		$	—		$	26
Charges	12			40			52
Cash payments	(31		)	(37		)	(68		)
Non-cash items and other	—			(1		)	(1		)
Accrual balance at March 31, 2017	$	7		$	2		$	9

Closure of Foreign Manufacturing Facility

In January 2016, the Company announced the closing of its head component front end wafer manufacturing facility in Odawara, Japan, in order to reduce manufacturing costs. As of December 30, 2016, the Company substantially completed all activities related to the closure of the facility. The following table presents an analysis of the components of the activity against the reserve during the nine months ended March 31, 2017:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at July 1, 2016	$	14		$	—		$	14
Charges	2			7			9
Cash payments	(15		)	(10		)	(25		)
Non-cash items and other	(1		)	3			2
Accrual balance at March 31, 2017	$	—		$	—		$	—

Business Realignment

The Company periodically incurs charges as part of the integration process of recent acquisitions and to realign its operations with anticipated market demand. The following table presents an analysis of the components of the activity against the reserve during the nine months ended March 31, 2017:



	Employee Termination Benefits			Contract Termination and Other			Total
	(in millions)
Accrual balance at July 1, 2016	$	11		$	3		$	14
Charges	65			4			69
Cash payments	(62		)	(2		)	(64		)
Non-cash items and other	6			—			6
Accrual balance at March 31, 2017	$	20		$	5		$	25