Restructuring, Separation, And Transition | 6 Months Ended |
Oct. 03, 2014 |
Restructuring and Related Activities [Abstract] | ' |
Restructuring And Transition | ' |
Restructuring, Separation, and Transition |
Our restructuring, separation, and transition costs and liabilities consist primarily of severance, facilities, separation, transition and other related costs. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. Facilities costs generally include rent expense and lease termination costs, less estimated sublease income. Separation and other related costs will include advisory, consulting and other costs incurred in connection with the separation of our information management business. Transition and other related costs consist of consulting charges associated with the implementation of a new Enterprise Resource Planning system, and costs related to the outsourcing of certain back office functions. Restructuring, separation, and transition costs are managed at the corporate level and are not allocated to our reportable segments. See Note 8 of these Condensed Consolidated Financial Statements for information regarding the reconciliation of total segment operating income to total consolidated operating income. |
Restructuring plans |
Fiscal 2014 Plan |
We initiated a restructuring plan in the fourth quarter of fiscal 2013 to reduce management and redundant personnel resulting in headcount reductions across the Company. As of October 3, 2014, total costs related to this plan incurred since inception were $238 million, primarily related to severance and related employee benefits. The costs for severance and benefits are substantially complete, however we expect to incur immaterial adjustments to existing reserves in subsequent periods. |
Fiscal 2015 Plan |
Our Board of Directors has approved the strategic decision to separate our business into two independent publicly-traded companies: one focused on security and one focused on information management. We expect to complete this transaction by the end of December 2015, subject to market, regulatory and certain other conditions. In order to separate the business, we initiated a restructuring plan to properly align personnel and expect to incur associated severance and facilities costs. We also expect to incur separation costs in the form of advisory, consulting and disentanglement expenses. These actions are expected to be completed in fiscal 2016. In connection with this plan, through October 3, 2014, we incurred charges of $17 million consisting of $8 million related to severance costs, and $9 million in separation costs. As of November 3, 2014, we expect to incur total severance and facilities costs between $100 million and $120 million, approximately half of which is expected to be incurred in fiscal 2015. We expect to incur separation costs between $80 million and $100 million, excluding any potential tax implications outside the U.S and potential advisor fees payable upon separation. Total restructuring and separation costs are expected to be between $180 million and $220 million. |
Other exit and disposal costs |
Our other exit and disposal costs consist primarily of costs associated with closing or consolidating certain facilities. Largely as a result of business acquisitions, management may make a plan to exit certain facilities either at the time of acquisition or after the acquisition in conjunction with our efforts to integrate and streamline our operations. As of October 3, 2014, liabilities for these excess facility obligations at several locations around the world are expected to be paid throughout the respective lease terms as we continue to occupy these facilities, the longest of which extends through fiscal 2016. |
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Restructuring, separation, and transition summary |
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| March 28, 2014 | | Costs, Net of | | Cash Payments | | October 3, 2014 | | Cumulative |
Adjustments (1) | Incurred to Date |
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| (Dollars in millions) |
Restructuring and separation liabilities: | | | | | | | | | |
Fiscal 2014 Plan | | | | | | | | | |
Severance costs | $ | 38 | | | $ | 16 | | | $ | (42 | ) | | $ | 12 | | | $ | 235 | |
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Other exit and disposal costs | — | | | — | | | — | | | — | | | $ | 3 | |
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Fiscal 2014 Plan Total | $ | 38 | | | $ | 16 | | | $ | (42 | ) | | $ | 12 | | | $ | 238 | |
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Fiscal 2015 Plan | | | | | | | | | |
Severance costs | — | | | 8 | | | — | | | 8 | | | $ | 8 | |
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Separation costs | — | | | 9 | | | (9 | ) | | — | | | $ | 9 | |
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Other exit and disposal costs | — | | | — | | | — | | | — | | | — | |
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Fiscal 2015 Plan Total | $ | — | | | $ | 17 | | | $ | (9 | ) | | $ | 8 | | | $ | 17 | |
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Total restructuring and separation liabilities | $ | 38 | | | $ | 33 | | | $ | (51 | ) | | $ | 20 | | | |
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Transition and other related costs | | | 17 | | | | | | | |
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Total restructuring, separation, and transition costs | | | $ | 50 | | | | | | | |
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Balance Sheet: | | | | | | | | | |
Other current liabilities | $ | 37 | | | | | | | $ | 19 | | | |
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Other long-term obligations | 1 | | | | | | | 1 | | | |
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Total restructuring liabilities | $ | 38 | | | | | | | $ | 20 | | | |
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(1) Adjustments primarily relate to foreign currency exchange rate fluctuations. |