Reorganization of Businesses

2013 Charges

During the three months ended September 28, 2013, the Company accepted voluntary applications to its severance plan from a defined subset of employees within the United States. Applicants will receive termination benefits based on formulas from the Company’s pre-existing Involuntary Severance Plan; however, termination benefits, which are normally capped at six months of salary, were capped at a full year’s salary.

During the three months ended September 28, 2013, the Company recorded net reorganization of business charges of $32 million, including $24 million of charges in Other charges, and $8 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $32 million were charges of $31 million for employee separation costs and $1 million of charges for exit costs. Of the total employee separation costs recognized during the quarter, $21 million relates to approximately 130 voluntary applicants.

During the nine months ended September 28, 2013, the Company recorded net reorganization of business charges of $71 million including $55 million of charges in Other charges, and $16 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $71 million were charges of $77 million for employee separation costs and $1 million for exit costs, partially offset by $7 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



September 28, 2013	Three Months Ended		Nine Months Ended
Government	$	20	$	45
Enterprise	12		26
	$	32	$	71

The following table displays a rollforward of the reorganization of businesses accruals established for lease exit costs and employee separation costs from January 1, 2013 to September 28, 2013:



	January 1, 2013		Additional Charges		Adjustments			Amount Used			September 28, 2013
Exit costs	$	4	$	1	$	—		$	(1	)	$	4
Employee separation costs	31		77		(7		)	(44		)	57
	$	35	$	78	$	(7	)	$	(45	)	$	61

Exit Costs

At January 1, 2013, the Company had an accrual of $4 million for exit costs attributable to lease terminations. During the nine months ended September 28, 2013, there were $1 million of additional charges and $1 million of cash payments related to the exit of leased facilities. The remaining accrual of $4 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at September 28, 2013, primarily represents future cash payments for lease termination obligations that are expected to be paid over a number of years.

Employee Separation Costs

At January 1, 2013, the Company had an accrual of $31 million for employee separation costs, representing the severance costs for: (i) severed employees who began receiving payments in 2012 and (ii) approximately 300 employees who began receiving payments in 2013. The 2013 additional charges of $77 million represent severance costs for approximately 1,000 additional employees, of which 500 were indirect employees and 500 were direct employees. The adjustment of $7 million reflects reversals of accruals no longer needed. The $44 million used reflects cash payments. The remaining accrual of $57 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at September 28, 2013, is expected to be paid, primarily within one year to approximately 700 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2012 Charges

During the three months ended September 29, 2012, the Company recorded net reorganization of business charges of $13 million, including $10 million of charges in Other charges, and $3 million of charges in Costs of sales in the Company's condensed consolidated statements of operations. The $13 million of charges relate solely to employee separation costs.

During the nine months ended September 29, 2012, the Company recorded net reorganization of business charges of $36 million, including $30 million of charges in Other charges and $6 million of charges in Costs of sales in the Company's condensed consolidated statements of operations. Included in the aggregate $36 million were charges of $43 million related to the separation of approximately 700 indirect employees, and $1 million for building impairment charges, partially offset by $8 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



September 29, 2012	Three Months Ended		Nine Months Ended
Government	$	8	$	24
Enterprise	5		12
	$	13	$	36