Note 16. Employee Termination Benefits and Other Charges

The Company incurred $138 million and $80 million of charges in 2013 and 2012, respectively, to realign its operations with anticipated market demand. These charges were classified as operating expenses and included within employee termination benefits and other charges in the consolidated statements of income. The following table summarizes the charges in 2013 (in millions):


	Employee Termination Benefits			Impairment of Assets			Contract and Other Termination Costs			Total
Accrual at June 29, 2012	$	—		$	—		$	16		$	16
Charges		109			14			15			138
Cash payments		(66	)		—			(17	)		(83	)
Non-cash charges		(6	)		(14	)		(5	)		(25	)

Accrual at June 28, 2013	$	37		$	—		$	9		$	46

The employee termination benefits relate to headcount reductions at various worldwide locations, including the Company’s voluntary separation program (the “Program”) for the U.S.-based employees of its WD subsidiary, which was announced on January 23, 2013. The remaining liabilities are expected to be primarily relieved and the Program is expected to be substantially completed by the first quarter of fiscal 2014.

During 2012, the Company recorded $56 million of asset impairment charges, $16 million of contract termination and other exit costs and $8 million of employee termination benefits.