Restructuring, Separation, and Transition

3 Months Ended

Jul. 03, 2015

Restructuring Costs [Abstract]

Restructuring, Separation, and Transition

Restructuring, Separation, and Transition

Our restructuring, separation, and transition costs and liabilities consist primarily of severance, facilities, separation, transition and other related costs. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. Facilities costs generally include rent expense and lease termination costs, less estimated sublease income. Separation and other related costs include advisory, consulting and other costs incurred in connection with the separation of our information management business. Transition and other related costs consist of consulting charges associated with the implementation of new Enterprise Resource Planning systems. Restructuring, separation, and transition costs are managed at the corporate level and are not allocated to our reportable segments. See Note 6 of these Condensed Consolidated Financial Statements for information regarding the reconciliation of total segment operating income to total consolidated operating income.

Restructuring plans

Fiscal 2014 Plan

We initiated a restructuring plan in the fourth quarter of fiscal 2013 to reduce management and redundant personnel resulting in headcount reductions across the Company. As of July 3, 2015, the related costs for severance and benefits are substantially complete; however, we may experience immaterial adjustments to existing accruals in subsequent periods.

Fiscal 2015 Plan

In fiscal 2015, we announced plans to separate our security and information management businesses into standalone companies. In order to separate the business, we initiated a restructuring plan to properly align personnel and expect to incur associated severance and facilities costs. We also expect to incur separation costs in the form of advisory, consulting and disentanglement expenses. These actions are expected to be substantially completed by the end of the third quarter of fiscal 2016. We expect to incur total severance and facilities costs between $165 million and $195 million. We expect to incur separation costs between $170 million and $190 million, excluding tax implications and potential advisor fees payable upon separation. Total restructuring and separation costs are expected to be between $335 million and $385 million. As of July 3, 2015, liabilities for excess facility obligations at several locations around the world are expected to be paid throughout the respective lease terms as we continue to occupy these facilities, the longest of which extends through fiscal 2019.

Restructuring, separation, and transition summary

	April 3, 2015		Costs, Net of Adjustments		Cash Payments			July 3, 2015		Cumulative Incurred to Date
	(Dollars in millions)
Fiscal 2014 Plan total	$	4	$	—	$	(2	)	$	2	$	238
Fiscal 2015 Plan
Severance costs	59		21		(36		)	44		123
Separation costs	17		63		(40		)	40		144
Other exit and disposal costs	6		1		(1		)	6		8
Fiscal 2015 Plan total	$	82	$	85	$	(77	)	$	90	$	275
Restructuring and separation plans total	$	86	$	85	$	(79	)	$	92
Transition and other related costs			39
Total restructuring, separation, and transition costs			$	124

As of July 3, 2015, the restructuring and separation liabilities are included in accounts payable, other current liabilities and other long-term obligations in our Condensed Consolidated Balance Sheets.