Restructuring Programs

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

We engage in restructuring actions, including Project Own It, as well as other transformation efforts in order to reduce our cost structure and realign it to the changing nature of our business. As part of our efforts to reduce costs, our restructuring actions may also include the off-shoring or outsourcing of certain operations, services and other functions, as well as reducing our real estate footprint.

Restructuring costs include employee severance and related costs, other contractual termination costs and asset impairments that may result from employee reductions, migration of facilities from higher-cost to lower-cost countries, and the consolidation of facilities within countries. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan (on-going benefit arrangements), we recognize employee severance and related costs when they are both probable and reasonably estimable. In the event employees are required to perform future service beyond their minimum retention period, we record severance charges ratably over the remaining service period of those employees. Severance payments made under a one-time benefit arrangement are recorded upon communication to the affected employees. Contractual termination costs, including facility exit costs, are generally recognized when it has been determined that a liability has been incurred. Restructuring activities may include the disposal or abandonment of assets, including leased right-of-use assets, that require an acceleration of depreciation or an impairment charge reflecting the excess of an asset's book value over fair value or other recoveries.

The recognition of restructuring costs requires that we make certain judgments and estimates regarding the nature, timing and amount of costs associated with the planned initiative. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the remaining accrued balances to ensure they are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.

A summary of our restructuring program activity for the three years ended December 31, 2020, 2019 and 2018 is as follows:


	Severance and Related Costs		Other Contractual Termination Costs(2)		Asset Impairments(3)(4)		Total
Balance at December 31, 2017	$	108	$	1	$	—	$	109
Restructuring provision	175		14		—		189
Reversals of prior charges	(33)		—		—		(33)
Net Current Period Charges(1)	142		14		—		156
Charges against reserve and currency	(156)		(14)		—		(170)
Balance at December 31, 2018	$	94	$	1	$	—	$	95
Restructuring provision	81		19		61		161
Reversals of prior charges	(24)		(5)		(5)		(34)
Net Current Period Charges(1)	57		14		56		127
Charges against reserve and currency	(85)		(11)		(56)		(152)
Balance at December 31, 2019	$	66	$	4	$	—	$	70
Restructuring provision	107		3		6		116
Reversals of prior charges	(21)		(2)		(6)		(29)
Net Current Period Charges(1)	86		1		—		87


Charges against reserve and currency	(74)		(1)		—		(75)
Balance at December 31, 2020	$	78	$	4	$	—	$	82

_____________

(1)Represents net amount recognized within the Consolidated Statements of Income for the years shown for restructuring and asset impairment charges.

(2)Primarily includes additional costs incurred upon the exit from our facilities including decommissioning costs and associated contractual termination costs.

(3)Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the provision.

(4)Amounts primarily relate to the exit and abandonment of leased and owned facilities. For the year ended December 31, 2020 and 2019, the charge includes the accelerated write-off of $4 and $39, respectively, for leased right-of-use assets and $2 and $22, respectively, for owned assets and are net of any potential sublease income or other recovery amounts.

The following table summarizes the reconciliation to the Consolidated Statements of Cash Flows:


	Year Ended December 31,
	2020		2019		2018
Charges against reserve and currency	$	(75)	$	(152)	$	(170)
Asset impairments	—		56		—
Effects of foreign currency and other non-cash items	(6)		3		1
Restructuring Cash Payments	$	(81)	$	(93)	$	(169)

In connection with our restructuring programs, we also incurred certain related costs as follows:


	Year Ended December 31,
	2020		2019
Retention related severance/bonuses(1)	$	4	$	39
Contractual severance costs(2)	(2)		43
Consulting and other costs(3)	4		20
	$	6	$	102

_____________

(1)Includes retention related severance and bonuses for employees expected to continue working beyond their minimum retention period before termination.

(2)2019 costs include approximately $38 for estimated severance and other related costs we were contractually required to pay in connection with employees transferred (approximately 2,200) as part of the shared service arrangement entered into with HCL Technologies.

(3)Represents professional support services associated with our business transformation initiatives.

Cash payments for restructuring related costs were approximately $26 and $65 in 2020 and 2019, respectively, while the reserve was $21 and $37 at December 31, 2020 and 2019, respectively. The balance at December 31, 2020 is expected to be paid over the next twelve months.