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Restructuring and Other Exit Costs | 6 Months Ended
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Jul. 03, 2020
Restructuring and Related Activities [Abstract] |
Restructuring and Other Exit Costs | Note E — Restructuring and Other Exit Costs We record charges for restructuring and other exit activities related to sales or terminations of product lines, closures or relocations of business activities, changes in management structure and fundamental reorganizations that affect the nature and focus of operations. Such charges include termination benefits, contract termination costs and costs to consolidate facilities or relocate employees. We record these charges at their fair value when incurred. In cases where employees are required to render service until they are terminated in order to receive the termination benefits and will be retained beyond the minimum retention period, we record the expense ratably over the future service period. These charges are included as a component of the “Engineering, selling and administrative expenses” line item in our Condensed Consolidated Statement of Income (Unaudited). L3Harris Merger-Related Restructuring Costs During the quarter and two quarters ended July 3, 2020, we recorded $7 million of restructuring charges in connection with the L3Harris Merger. At July 3, 2020, we had liabilities of $30 million associated with these and previous L3Harris Merger-related restructuring actions, of which substantially all will be paid in the next twelve months. COVID-19-Related Restructuring Costs During the quarter and two quarters ended July 3, 2020, we recorded $11 million and $14 million, respectively, of restructuring charges, including workforce reductions and other exit costs within our Aviation Systems segment associated with the COVID-19-related downturn in our Commercial Aviation Solutions sector and its impact on global air traffic and customer operations. During the quarter and two quarters ended July 3, 2020, we also recorded $1 million of restructuring charges for workforce reductions in our Communication Systems segment associated with the COVID-19 impact to local and state government customers of our Public Safety sector. At July 3, 2020, we had liabilities of $12 million associated with COVID-19-related restructuring actions, of which substantially all will be paid in the next twelve months. Other Restructuring and Exit Costs Prior to the L3Harris Merger, we had liabilities for lease obligations associated with exited facilities with remaining terms of three years or less, of which $6 million remained outstanding at July 3, 2020. Our liabilities for restructuring and other exit costs are included in the “Other accrued items” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet (Unaudited). Changes to our liabilities for restructuring and other exit costs during the two quarters ended July 3, 2020 were as follows:
| Employee severance-related costs |  |  |  |  |  | Facilities consolidation and other exit costs |  | Total
| (In millions) |  |  |  |  |  |  |  |
Balance at January 3, 2020 | $ | 58 |  |  |  |  |  |  | $ | 7 |  |  | $ | 65 |
Additional provisions | 22 |  |  |  |  |  |  | — |  |  | 22 |
Payments | (38) |  |  |  |  |  |  | (1) |  |  | (39) |
Total changes | (16) |  |  |  |  |  |  | (1) |  |  | (17) |
Balance at July 3, 2020 | $ | 42 |  |  |  |  |  |  | $ | 6 |  |  | $ | 48 |

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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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