Quarterly report pursuant to Section 13 or 15(d)

Restructuring and Other Special Charges (Notes)

v2.4.1.9
Restructuring and Other Special Charges (Notes)
 3 Months Ended
Mar. 28, 2015
Restructuring and Related Activities [Abstract]  
Restructuring and Other Special Charges
Restructuring and Other Special Charges, Net
2014 Restructuring Plan
In October 2014, the Company implemented a restructuring plan designed to improve operating efficiencies. The plan involved a reduction of global headcount by approximately 6% and an alignment of its real estate footprint with its reduced headcount. In the first quarter of 2015, the Company recorded a $12 million restructuring charge, which consisted of $5 million for severance and related benefits and $7 million for facilities related costs. The Company expects the plan to be largely completed by the end of the third quarter of 2015.
The following table provides a summary of the restructuring activities in the first quarter of 2015 and the related liabilities recorded in Accrued and other current liabilities and Other long-term liabilities on the Company’s condensed consolidated balance sheets as of March 28, 2015:
 
Severance
and related
benefits
 
Other exit
related
costs
 
Total
 
(In millions)
Balance as of December 27, 2014
$
26

 
$
13

 
$
39

Charges
5

 
7

 
12

Cash payments
(14
)
 
(1
)
 
(15
)
Non-cash charges
—

 
(3
)
 
(3
)
Balance as of March 28, 2015
$
17

 
$
16

 
$
33


Dense Server Systems Business Exit
As a part of the Company's strategy to simplify and sharpen its investment focus, the Company decided to exit the dense server systems business, formerly SeaMicro, in the first quarter of 2015. As a result of the Company’s decision to exit this business, the Company recorded a charge of $75 million in Restructuring and other special charges, net on the Company’s condensed consolidated statements of operations in the first quarter of 2015. This charge consisted of an impairment charge of $62 million related to the acquired intangible assets. The Company concluded that the carrying value of the acquired intangible assets associated with its dense server systems business was fully impaired as the Company has no current plans to utilize the related freedom fabric technology in any of its future products nor does it have any plans at this time to monetize the associated intellectual property. In addition, the exit charge consisted of a $6 million non-cash charge related to asset impairments, $4 million of severance and related benefits and $3 million for contract or program termination costs. The Company expects to complete this exit activity within 12 months.