Restructuring Charges and Asset Impairments

3 Months Ended

Jan. 26, 2014

Restructuring and Related Activities [Abstract]

Restructuring Charges and Asset Impairments

From time to time, Applied initiates restructuring activities to appropriately align its cost structure relative to prevailing economic and industry conditions and associated customer demand as well as in connection with certain acquisitions. Costs associated with restructuring actions can include termination benefits and related charges, in addition to facility closure, contract termination and other related activities.

The following table summarizes major components of the restructuring and asset impairment charges during the three months ended January 26, 2014 and January 27, 2013:



	Three Months Ended
	January 26, 2014		January 27, 2013

	(In millions)
2012 Global Restructuring Plan
Severance and other employee-related costs	$	7	$	4
2012 EES Restructuring Plan
Asset impairments	—		3
Others
Severance and other employee-related costs	—		2
	$	7	$	9

Restructuring and asset impairment charges were recorded as follows:



	Three Months Ended
	January 26, 2014		January 27, 2013

	(In millions)
Silicon Systems Group	$	—	$	1
Applied Global Services	—		1
Energy and Environmental Solutions	—		3
Corporate Unallocated	7		4
Total	$	7	$	9

2012 Global Restructuring Plan

On October 3, 2012, Applied announced a restructuring plan (the 2012 Global Restructuring Plan) to realign its global workforce and enhance its ability to invest for growth. Under this plan, Applied implemented a voluntary retirement program and other workforce reduction actions. The voluntary retirement program was available to certain U.S. employees who met minimum age and length of service requirements, as well as other business-specific criteria. Applied implemented other workforce reduction actions globally across multiple business segments and functions, the extent of which depended on the number of employees who participated in the voluntary retirement program and other considerations. A total of approximately 1,300 positions were affected under this plan.

During the three months ended January 26, 2014 and January 27, 2013, Applied recognized $7 million and $4 million, respectively, of employee-related costs in connection with the 2012 Global Restructuring Plan. These costs were not allocated to the segments. As of January 26, 2014, principal activities related to this plan were complete. Total costs incurred in implementing this plan were $152 million.

Restructuring Reserves

Changes in restructuring reserves during the three months ended January 26, 2014 were as follows:



	2012 Global Restructuring Plan			2012 EES Restructuring Plan					Others
	Severance and Other Employee-Related Costs			Severance and Other Employee-Related Costs			Contract Cancellation and Other Costs		Severance and Other Employee-Related Costs			Contract Cancellation and Other Costs		Total

	(In millions)
Balance, October 27, 2013	$	26		$	5		$	5	$	2		$	1	$	39
Provision for restructuring reserves	7			—			—		—			—		7
Consumption of reserves	(15		)	(1		)	—		(1		)	—		(17		)
Reclassification of restructuring reserves	—			(1		)	—		—			—		(1		)
Balance, January 26, 2014	$	18		3			5		$	1		$	1	$	28

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details