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85
2014 Charges
During 2014, the Company recorded net reorganization of business charges of $73 million, including $9 million of charges
in Costs of sales and $64 million of charges under Other charges in the Company’s consolidated statements of operations.
Included in the aggregate $73 million are charges of (i) $67 million for employee separation costs, and (ii) $7 million of charges
for exit costs, partially offset by $1 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by segment:
Year ended December 31 2014
Products $48
Services 25
$73
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs and
employee separation costs, including those related to discontinued operations which were maintained by the Company after the
sale of the Enterprise business, from January 1, 2014 to December 31, 2014:
Accruals at
January 1
Additional
Charges Adjustments
Amount
Used
Accruals at
December 31
Exit costs $6$7$—$(13)$—
Employee separation costs 103 93 (4) (135) 57
$ 109 $ 100 $ (4) $ (148) $ 57
Exit Costs
At January 1, 2014, the Company had an accrual of $6 million for exit costs attributable to lease terminations. There were
$7 million of additional charges in 2014. The $13 million used in 2014 reflects cash payments. There was no remaining accrual
as of December 31, 2014.
Employee Separation Costs
At January 1, 2014, the Company had an accrual of $103 million for employee separation costs. The additional 2014
charges of $93 million represent severance costs for approximately an additional 1,200 employees, of which 300 were direct
employees and 900 were indirect employees. The adjustments of $4 million reflect reversals of accruals no longer needed. The
$135 million used in 2014 reflects cash payments to these separated employees, including $50 million related to employees of
the Enterprise business and included in cash flow from discontinued operations. The remaining accrual of $57 million was
included in Accrued liabilities in the Company’s consolidated balance sheet at December 31, 2014.
2013 Charges
The Company recorded net reorganization of business charges of $86 million, including $16 million of charges in Costs of
sales and $70 million of charges in Other charges in the Company’s consolidated statements of operations. Included in the
aggregate $86 million are charges of (i) $94 million for employee separation costs and (ii) $2 million of charges for exit costs,
partially offset by $10 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by segment:
Year ended December 31 2013
Products $57
Services 29
$86
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs and
employee separation costs, including those related to discontinued operations which were maintained by the Company after the
sale of the Enterprise business, from January 1, 2013 to December 31, 2013:
Accruals at
January 1
Additional
Charges Adjustments
Amount
Used
Accruals at
December 31
Exit costs $4$3$—$(1)$6
Employee separation costs 31 146 (16) (58) 103
$ 35 $ 149 $ (16) $ (59) $ 109