In the second quarter of 2018, we announced a hardware transformation initiative to streamline our manufacturing operations that will help us reduce our exposure to variable hardware demand as well as increase global utilization rates and optimize our supply chain network. As a part of this initiative, we plan to reduce the number of manufacturing plants and move the manufacturing operations at those plants to other existing NCR facilities and current third party suppliers.

As a result of the restructuring plan, the Company recorded a total charge of $2 million and $24 million in the three months ended June 30, 2019 and June 30, 2018, respectively, and $4 million and $24 million in the six months ended June 30, 2019 and June 30, 2018, respectively. The restructuring program was substantially completed as of June 30, 2019.

The following table summarizes the total charges related to the restructuring plan for the three and six months ended June 30, 2019:



In millions	For the three months ended June 30, 2019			For the six months ended June 30, 2019
Severance and other employee related costs	$	—		$	1
Inventory related charges	7			7
Asset related charges	(6		)	(6		)
Other exit costs	1			2
Total charge	$	2		$	4

Severance and other employee related costs The Company recorded zero and $1 million of employee related costs in the three and six months ended June 30, 2019, respectively, in accordance with ASC 420, Exit or Disposal Cost Obligations. There were no discrete charges in accordance with ASC 712, Employers’ Accounting for Postemployment Benefits recorded in the three and six months ended June 30, 2019.

Inventory related charges The Company recorded $7 million of inventory related charges for rationalizing its product portfolio and writing down inventory to be sold to third party suppliers to the lower of cost or net realizable value in the three and six months ended June 30, 2019. These costs were included within cost of products in the Condensed Consolidated Statement of Operations.

Asset related charges The Company recorded a $6 million gain on the sale of the two plant locations in the three and six months ended June 30, 2019.

Other exit costs The Company recorded $1 million and $2 million in the three and six months ended June 30, 2019 for costs primarily related to moving inventory as well as clean-up costs from the plant locations that were closed. These costs were included within cost of products and selling, general, and administrative expenses in the Condensed Consolidated Statement of Operations.

The following table summarizes the total charges related to the restructuring plan for the three and six months ended June 30, 2018:



In millions	For the three months ended June 30, 2018		For the six months ended June 30, 2018
Severance and other employee related costs	$	5	$	5
Inventory related charges	17		17
Other exit costs	2		2
Total charge	$	24	$	24

Severance and other employee related costs The Company recorded $3 million of employee related costs in accordance with ASC 712, Employers’ Accounting for Postemployment Benefits, when the severance liability was determined to be probable and reasonably estimable in the three and six months ended June 30, 2018. The Company recorded $2 million of employee related costs in accordance with ASC 420, Exit or Disposal Cost Obligations in the three and six months ended June 30, 2018. These costs were included within cost of products in the Condensed Consolidated Statement of Operations.

Inventory related charges The Company recorded $17 million of inventory related charges for rationalizing its product portfolio and writing down inventory to be sold to third party suppliers to the lower of cost or net realizable value in the three and six months ended June 30, 2018. These costs were included within cost of products in the Condensed Consolidated Statement of Operations.

Other exit costs The Company recorded $2 million for costs primarily related to moving inventory and fixed assets from the plant locations that will be closed in the three and six months ended June 30, 2018. These costs were included within cost of products and selling, general, and administrative expenses in the Condensed Consolidated Statement of Operations.

The results by segment, as disclosed in Note 3. Segment Information and Concentrations, exclude the impact of these costs, which is consistent with the manner by which management assesses the performance and evaluates the results of each segment. The following table summarizes the costs recorded in accordance with ASC 420, Exit or Disposal Cost Obligations, and ASC 712, Employers’ Accounting for Postemployment Benefits, and the remaining liabilities as of June 30, 2019, which are included in the Condensed Consolidated Balance Sheet in Other Current Liabilities.



In millions	June 30, 2019
Employee Severance and Other Exit Costs
Beginning balance as of January 1	$	2
Cost recognized during the period	3
Utilization	(5		)
Ending balance as of June 30	$	—