Costs Associated with Exit and Restructuring Activities

In the first quarter 2017, the Company’s executive leadership approved an initiative to continue the company’s efforts to increase operational efficiency (the “Productivity Plan”). The Company expects the Productivity Plan to build upon the exit and restructuring initiatives specific to the Acquisition of the Enterprise business (“Enterprise”) from Motorola Solutions, Inc. in October 2014 and further defined in the Company’s Form 10-K, (the “Acquisition Plan”) that the Company previously announced and began implementing during the first quarter 2015. Expected actions under the Productivity Plan could impact either reportable segment and may include actions related to organizational design changes, process improvements, and automation. Implementation of actions identified through the Productivity Plan is expected to be substantially complete by the end of our 2018 fiscal year with the first full year of financial benefits realized in 2019. The Company has not finalized its estimate of one-time implementation costs, exit and restructuring charges, or expected benefits that may result from these efforts and will provide updates on these items in future periodic filings.

Total exit and restructuring charges of $4 million life-to-date specific to the Productivity Plan have been recorded through April 1, 2017: $3 million in the Legacy Zebra segment and $1 million in the Enterprise segment related to severance, related benefits, and other expenses.

Total exit and restructuring charges of $65 million life-to-date specific to the Acquisition Plan, including the sale of the Company’s WLAN business, have been recorded through April 1, 2017: $15 million in the Legacy Zebra segment and $50 million in the Enterprise segment related to severance, related benefits, and other expenses. There were no charges related to the Acquisition Plan for the quarter ended April 1, 2017. The Company expects to complete the actions of the Acquisition Plan by December 31, 2017. Total remaining charges associated with this plan are expected to be in the range of $5 million to $7 million.

During the period ended April 1, 2017, the Company incurred exit and restructuring costs as follows (in millions):



	Cumulative costs incurred through December 31, 2016		Costs incurred for the three months ended April 1, 2017		Cumulative costs incurred through April 1, 2017
Severance, related benefits and, other expenses	$	54	$	4	$	58
Obligations for future non-cancellable lease payments	11		—		11
Total	$	65	$	4	$	69

Total exit and restructuring charges for the quarter ended April 1, 2017 were $3 million and $1 million for the Legacy Zebra and Enterprise segments, respectively.

A rollforward of the exit and restructuring accruals is as follows (in millions):



	Three Months Ended
	April 1, 2017			April 2, 2016
Balance at the beginning of the period	$	10		$	15
Charged to earnings	4			5
Cash paid	(3		)	(7		)
Balance at the end of the period	$	11		$	13

Liabilities related to exit and restructuring activities are included in the following accounts in the consolidated balance sheets (in millions):



	April 1, 2017		December 31, 2016
Accrued liabilities	$	8	$	7
Other long-term liabilities	3		3
Total liabilities related to exit and restructuring activities	$	11	$	10

Settlement of the specified long-term balance will be completed by October 2023 due to the remaining obligation of non-cancellable lease payments associated with the exited facilities.