Restructuring Charges

Cost Synergies Initiative

The cost synergies initiative is the Company's restructuring program primarily related to the integration of Covidien. This initiative contributes to the approximately $850 million in cost synergies expected to be achieved as a result of the integration of the Covidien acquisition through fiscal year 2018, including administrative office optimization, manufacturing and supply chain infrastructure, certain program cancellations, and reduction of general and administrative redundancies. Restructuring charges are primarily related to employee termination costs and costs related to manufacturing and facility closures and affect all reportable segments. Cash outlays for the cost synergies initiative restructuring program are scheduled to be substantially complete by the end of fiscal year 2019.

A summary of the restructuring accrual, recorded within other accrued expenses and other liabilities in the consolidated balance sheets, and related activity is presented below:



(in millions)	Employee Termination Costs			Other Costs			Total
April 28, 2017	$	261		$	30		$	291
Charges	12			7			19
Cash payments	(38		)	(10		)	(48		)
Accrual adjustments	(6		)	1			(5		)
July 28, 2017	$	229		$	28		$	257

For the three months ended July 28, 2017, the Company recognized $19 million in charges, which were partially offset by accrual adjustments of $5 million. Accrual adjustments relate to certain employees identified for termination finding other positions within the Company, cancellations of employee terminations, and employee termination costs being less than initially estimated. For the three months ended July 28, 2017, charges included $5 million recognized within cost of products sold and $1 million recognized within selling, general and administrative expense.

For the three months ended July 29, 2016, the Company recognized $111 million in charges, which were partially offset by accrual adjustments of $7 million. Accrual adjustments primarily relate to certain employees identified for termination finding other positions within the Company. For the three months ended July 29, 2016, charges included $10 million recognized within cost of products sold.