Reorganization of Business

2017 Charges

During the three months ended July 1, 2017, the Company recorded net reorganization of business charges of $3 million including $1 million of charges in Other charges and $2 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $3 million were charges of $8 million related to employee separation costs, partially offset by $5 million of reversals for accruals no longer needed.

During the six months ended July 1, 2017, the Company recorded net reorganization of business charges of $22 million including $16 million of charges in Other charges and $6 million of charges in Cost of sales in the Company's condensed consolidated statements of operations. Included in the $22 million were charges of $23 million for employee separation costs and $4 million for exit costs, partially offset by $5 million of reversals for accruals no longer needed.

The following table displays the net charges incurred by segment:



July 1, 2017	Three Months Ended		Six Months Ended
Products	$	3	$	16
Services	—		6
	$	3	$	22

The following table displays a rollforward of the reorganization of business accruals established for lease exit costs and employee separation costs from January 1, 2017 to July 1, 2017:



	January 1, 2017		Additional Charges		Adjustments			Amount Used			July 1, 2017
Exit costs	$	7	$	4	$	—		$	(1	)	$	10
Employee separation costs	95		23		(5		)	(55		)	58
	$	102	$	27	$	(5	)	$	(56	)	$	68

Exit Costs

At January 1, 2017, the Company had $7 million of accruals for exit costs. During the six months ended July 1, 2017, there were $4 million of additional charges and $1 million of cash payments related to the exit of leased facilities. The remaining accrual of $10 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 1, 2017, 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, 2017, the Company had an accrual of $95 million for employee separation costs. The 2017 additional charges of $23 million represent severance costs for approximately 300 employees. The adjustment of $5 million reflects reversals for accruals no longer needed. The $55 million used reflects cash payments to severed employees. The remaining accrual of $58 million, which is included in Accrued liabilities in the Company’s condensed consolidated balance sheets at July 1, 2017, is expected to be paid, primarily within one year, to approximately 500 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

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 related to 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