Strategic Realignment Plan (Notes)
|9 Months Ended|
Jun. 26, 2016
|Strategic Realignment Plan [Abstract]|
|Strategic Realignment Plan||
Strategic Realignment Plan
On July 22, 2015, the Company announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth as the Company works to create sustainable long-term value for stockholders. As part of this, among other actions, the Company is implementing a cost reduction plan, which includes a series of targeted reductions across the Company’s businesses, particularly in QCT, and a reduction to its annual share-based compensation grants. The Company expects these cost reduction initiatives to be substantially implemented by the end of fiscal 2016. During the nine months ended June 26, 2016, the Company recorded restructuring charges of $105 million, including consulting costs of $60 million and severance costs of $41 million, restructuring-related charges of $53 million, which primarily consisted of asset impairments, and a $48 million gain on the sale of the Company’s business that provided augmented reality applications, since such sale was executed in connection with the Strategic Realignment Plan, all of which were included in other income (Note 2) in reconciling items (Note 8). Restructuring activities were initiated in the fourth quarter of fiscal 2015, and a total of $300 million in net restructuring and restructuring-related charges were incurred through the third quarter of fiscal 2016. In connection with this plan, the Company expects to incur additional restructuring and restructuring-related charges of approximately $25 million to $100 million, which primarily consist of severance and consulting costs. The remaining costs are expected to be incurred in fiscal 2016 and 2017, and the majority are expected to be settled in cash.
The restructuring accrual, a portion of which is included in payroll and other benefits related liabilities with the remainder included in other current liabilities, is expected to be substantially paid within the next 12 months. Changes in the restructuring accrual during the nine months ended June 26, 2016 were as follows (in millions):
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef