Restructuring and Other Exit Costs

3 Months Ended

Sep. 27, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Other Exit Costs

Note E — Restructuring and Other Exit Costs

We record charges for restructuring and other exit activities related to sales or terminations of product lines, closures or relocations of business activities, changes in management structure and fundamental reorganizations that affect the nature and focus of operations. Such charges include termination benefits, contract termination costs and costs to consolidate facilities or relocate employees. We record these charges at their fair value when incurred. In cases where employees are required to render service until they are terminated in order to receive the termination benefits and will be retained beyond the minimum retention period, we record the expense ratably over the future service period. These charges are included as a component of the “Engineering, selling and administrative expenses” line item in our Condensed Consolidated Statement of Income (Unaudited).

L3Harris Merger-Related Restructuring Costs

During the quarter ended September 27, 2019, we recorded $111 million of restructuring charges for workforce reductions (including severance and other employee-related exit costs) in connection with the L3Harris Merger. At September 27, 2019, we had recorded liabilities of $74 million associated with these restructuring actions, of which substantially all will be paid in the next twelve months. At this time, we are unable to reasonably estimate the total amount of cost expected to be incurred in connection with L3Harris Merger-related restructuring activities because we are still formulating plans for facility consolidations. We will disclose the total amount of cost expected to be incurred in connection with L3Harris Merger-related activities in future filings once the amount can be reasonably estimated.

Previous Restructuring and Other Exit Costs

Prior to the L3Harris Merger, we had liabilities of $16 million for lease obligations associated with exited facilities with remaining terms of four years or less, of which $13 million remained outstanding at September 27, 2019.

The following table summarizes our restructuring and other exit activities during the quarter ended September 27, 2019:

	Employee severance-related costs			Facilities consolidation and other exit costs			Total
	(In millions)
Balance at June 28, 2019	$	—		$	16		$	16
Additional provisions	111			—			111
Payments	(37		)	(3		)	(40		)
Balance at September 27, 2019	$	74		$	13		$	87