Restructuring Costs

9 Months Ended

Dec. 28, 2012

The Company recorded $26 million and $111 million of restructuring costs for the third quarter and nine months ended December 28, 2012, respectively, as described below.

Fiscal 2013 Plan

In September 2012, the Company initiated additional restructuring actions (the Fiscal 2013 Plan) across its business segments. The objectives of the Fiscal 2013 Plan are to (i) further increase the use of lower cost off-shore resources, and (ii) reduce headcount in order to align resources to support business needs, including the assessment of management span of control and layers. Actions under the Fiscal 2013 Plan commenced in September 2012 and management expects that further actions will be taken during the remainder of fiscal 2013 which could result in additional charges.

Total restructuring costs for the Fiscal 2013 Plan recorded during the third quarter and first nine months of fiscal 2013 were $25 million and $78 million, respectively, including pension benefit augmentations of $1 million and $6 million, respectively, that are due to certain employees in accordance with legal or contractual obligations, which will be paid out over several years as part of normal pension distributions.

The composition of the restructuring liability for the Fiscal 2013 Plan as of December 28, 2012 is as follows:



(Amounts in millions)	Restructuring liability as of March 30, 2012		Costs expensed in fiscal 2013		Less: costs not affecting restructuring liability ⁽¹⁾			Cash paid			Other⁽³⁾		Restructuring liability as of December 28, 2012
Workforce reductions	$	—	$	72	$	(6	)	$	(6	)	$	1	$	61
Other⁽²⁾	$	—	$	6	$	—		$	—		$	—	$	6
	$	—	$	78	$	(6	)	$	(6	)	$	1	$	67


⁽¹⁾	Charges primarily consist of pension benefit augmentations and are recorded as a pension liability.


⁽²⁾	Other direct costs associated with the restructuring program.


⁽³⁾	Foreign currency translation adjustments.

Fiscal 2012 Plan

In March 2012, the Company initiated restructuring actions (the Fiscal 2012 Plan) primarily impacting its MSS segment. The objectives of the Fiscal 2012 Plan were to (i) align the Company's workforce across various geographies with business needs, (ii) increase use of lower cost off-shore resources, and (iii) optimize utilization of facilities. Actions under the Fiscal 2012 Plan commenced in March 2012 and are expected to be carried out through fiscal 2013 which could result in additional charges.

The net restructuring costs for the Fiscal 2012 Plan accrued during the third quarter and the first nine months of fiscal 2013 were $1 million and $33 million, respectively, and consist of costs associated with employee terminations. The net restructuring costs for nine months include pension benefit augmentations of $1 million that are due to certain employees in accordance with legal or contractual obligations, which will be paid out over several years as part of normal pension distributions.

The composition of the restructuring liability for the Fiscal 2012 Plan as of December 28, 2012 is as follows:



(Amounts in millions)	Restructuring liability as of March 30, 2012		Costs expensed in fiscal 2013		Less: costs not affecting restructuring liability ⁽¹⁾			Cash paid			Other ⁽²⁾			Restructuring liability as of December 28, 2012
Workforce reductions	$	110	$	33	$	(3	)	$	(104	)	$	(2	)	$	34
Facilities costs	9		—		—			(4		)	—			5
Total	$	119	$	33	$	(3	)	$	(108	)	$	(2	)	$	39

⁽¹⁾ Charges primarily consist of $1 million of pension benefit augmentation, which is recorded as a pension liability, and $1 million of additional vacation accrual.

⁽²⁾ Foreign currency translation adjustments.

The composition of restructuring expenses, for the quarter and first nine months of fiscal 2013, by segment is as follows:



	Quarter Ended December 28, 2012
(Amounts in millions)	Fiscal 2013 Plan		Fiscal 2012 Plan			Total
NPS	$	2	$	—		$	2
MSS	10		(2		)	8
BSS	5		3			8
Corporate	$	8	$	—		$	8
Total	$	25	$	1		$	26



	Nine Months Ended December 28 2012
(Amounts in millions)	Fiscal 2013 Plan		Fiscal 2012 Plan		Total
NPS	$	3	$	—	$	3
MSS	56		12		68
BSS	11		21		32
Corporate	$	8	$	—	$	8
Total	$	78	$	33	$	111

Of the total $106 million restructuring liability as of December 28, 2012, $103 million is included in accrued expenses and other current liabilities and $3 million is included in other long-term liabilities.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details