Restructuring, Transition and Other Costs

3 Months Ended

Jun. 30, 2017

Restructuring and Related Activities [Abstract]

Restructuring, Transition and Other Costs

Our restructuring, transition and other costs and liabilities consist primarily of severance, facilities, transition and other related costs. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. Included in other exit and disposal costs are advisory fees incurred in connection with restructuring events and consulting and disentanglement costs to prune selected lines of business that do not fit either our growth, margin or strategic objectives. Facilities costs, which are also included in other exit and disposal costs, generally include rent expense and lease termination costs, less estimated sublease income. Transition costs primarily consist of consulting charges associated with the implementation of new enterprise resource planning systems and costs to automate business processes. Restructuring, transition and other costs are managed at the corporate level and are not allocated to our reportable segments. See Note 2 for information regarding the reconciliation of total segment operating income to total consolidated operating income (loss).

Fiscal 2017 Plan

We initiated a restructuring plan in the first quarter of fiscal 2017 to reduce complexity by means of long-term structural improvements (the “Fiscal 2017 Plan”). We expect to reduce headcount and close certain facilities in connection with the restructuring plan. We expect total costs incurred in connection with the Fiscal 2017 Plan to range between $430 million and $480 million, of which approximately $185 million to $195 million is expected to be for severance and termination benefits and $205 million to $230 million is expected to be for other exit and disposal costs primarily consisting of contract termination and relocation costs and advisory fees. The remainder is expected to be in the form of asset write-offs. These actions are expected to be completed in fiscal 2018. As of June 30, 2017, liabilities for excess facility obligations at several locations around the world are expected to be paid throughout the respective lease terms, the longest of which extends through fiscal 2022. Additionally, we expect continuing significant transition costs associated with the implementation of a new enterprise resource planning system and costs to automate business processes.

Restructuring, transition and other costs summary

For the three months ended June 30, 2017 we incurred the following restructuring, transition and other costs:



(In millions)	June 30, 2017
Severance and termination costs	$	27
Other exit and disposal costs	32
Asset write-offs	1
Transition costs	28
Total restructuring, transition and other	$	88

Restructuring liabilities summary

As of June 30, 2017 and March 31, 2017, the restructuring liabilities are included in accounts payable, other current liabilities and other long-term obligations in our Condensed Consolidated Balance Sheets.



(In millions)	Balance as of March 31, 2017		Costs, Net of Adjustments		Cash Payments			Non-Cash Charges			Balance as of June 30, 2017		Cumulative Incurred to Date for FY17 Plan
Severance and termination costs	$	20	$	27	$	(32	)	$	—		$	15	$	103
Other exit and disposal costs	26		32		(20		)	(7		)	31		111
Asset write-offs	—		1		—			(1		)	—		24
Total	$	46	$	60	$	(52	)	$	(8	)	$	46	$	238