Reorganization of Businesses

2014 Charges

During the three months ended June 28, 2014, the Company recorded net reorganization of business charges of $28 million including $25 million of charges in Other charges, and $3 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. The $28 million of charges were all related to employee separation costs.

During the six months ended June 28, 2014, the Company recorded net reorganization of business charges of $38 million including $34 million of charges in Other charges, and $4 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $38 million were charges of $34 million for employee separation costs and $4 million for exit costs.

The following table displays the net charges incurred by segment:



June 28, 2014	Three Months Ended		Six Months Ended
Products	$	18	$	24
Services	10		14
	$	28	$	38

The following table displays a rollforward of the reorganization of businesses accruals established for lease exit costs and employee separation costs, including those related to discontinued operations which will be maintained by the Company after the sale of the Enterprise business, from January 1, 2014 to June 28, 2014:



	January 1, 2014		Additional Charges		Adjustments			Amount Used			June 28, 2014
Exit costs	$	6	$	6	$	—		$	(5	)	$	7
Employee separation costs	103		47		(2		)	(70		)	78
	$	109	$	53	$	(2	)	$	(75	)	$	85

Exit Costs

At January 1, 2014, the Company had an accrual of $6 million for exit costs attributable to lease terminations. During the six months ended June 28, 2014, there were $6 million of additional charges and $5 million of cash payments related to the exit of leased facilities. The remaining accrual of $7 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at June 28, 2014, 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, 2014, the Company had an accrual of $103 million for employee separation costs. The 2014 additional charges of $47 million represent severance costs for approximately 600 employees, all of which were indirect employees. The adjustment of $2 million reflects reversals of accruals no longer needed. The $70 million used reflects cash payments, including $25 million related to employees of discontinued operations. The remaining accrual of $78 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at June 28, 2014, is expected to be paid, primarily within one year, to approximately 750 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2013 Charges

During the three months ended June 29, 2013, the Company recorded net reorganization of business charges of $18 million, including $13 million of charges in Other charges and $5 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the aggregate $18 million were charges of $19 million related to employee separation costs, partially offset by $1 million of reversals for accruals no longer needed.

During the six months ended June 29, 2013, the Company recorded net reorganization of business charges of $25 million, including $20 million of charges in Other charges and $5 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the aggregate $25 million were charges of $29 million related to employee separation costs, partially offset by $4 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



June 29, 2013	Three Months Ended		Six Months Ended
Products	$	12	$	17
Services	6		8
	$	18	$	25