Reorganization of Business

2016 Charges

During the three months ended July 2, 2016, the Company recorded net reorganization of business charges of $44 million including $36 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 $44 million were charges of: (i) $22 million of charges related to employee separation costs, (ii) $17 million for a building impairment, and (iii) $5 million for exit costs.

During the six months ended July 2, 2016, the Company recorded net reorganization of business charges of $67 million including $42 million of charges in Other charges and $25 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $67 million were charges of: (i) $46 million for employee separation costs, (ii) $20 million for impairments, including $17 million for a building impairment and $3 million for the impairment of the corporate aircraft, and (iii) $5 million for exit costs, partially offset by $4 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



July 2, 2016	Three Months Ended		Six Months Ended
Products	$	33	$	54
Services	11		13
	$	44	$	67

The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2016 to July 2, 2016:



	January 1, 2016		Additional Charges		Adjustments			Amount Used			July 2, 2016
Exit costs	$	9	$	5	$	—		$	(3	)	$	11
Employee separation costs	51		46		(4		)	(39		)	54
	$	60	$	51	$	(4	)	$	(42	)	$	65

Exit Costs

At January 1, 2016, the Company had $9 million of accruals for exit costs. During the six months ended July 2, 2016, there were $5 million additional charges and $3 million of cash payments related to the exit of leased facilities. The remaining accrual of $11 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 2, 2016, primarily represents future cash payments for lease obligations that are expected to be paid over a number of years.

Employee Separation Costs

At January 1, 2016, the Company had an accrual of $51 million for employee separation costs. The 2016 additional charges of $46 million represent severance costs for approximately 300 employees. The adjustment of $4 million reflects reversals for accruals no longer needed. The $39 million used reflects cash payments to severed employees. The remaining accrual of $54 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 2, 2016, is expected to be paid, primarily within one year, to approximately 400 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2015 Charges

During the three months ended July 4, 2015, the Company recorded net reorganization of business charges of $16 million, including $13 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 $16 million of charges were all related to employee separation costs.

During the six months ended July 4, 2015, the Company recorded net reorganization of business charges of $30 million, including $26 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 aggregate $30 million were charges of $26 million related to employee separation costs and $4 million related to exit costs.

The following table displays the net charges incurred by segment:



July 4, 2015	Three Months Ended		Six Months Ended
Products	$	12	$	22
Services	4		8
	$	16	$	30