7. INFUSION PUMP AND BUSINESS OPTIMIZATION CHARGES

Infusion pump charges

In the first quarter of 2016, the company refined its estimates for remediation activities related to the SIGMA SPECTRUM infusion pump recall and decreased the reserve by $12 million. In addition, the company recorded utilization of the SIGMA SPECTRUM reserve of $14 million. The balance as of March 31, 2016 was $14 million for the SIGMA SPECTRUM infusion pump recall. Refer to the 2015 Annual Report for further information about the Company’s infusion pump recall activities.

Business optimization charges

The Company records charges from its business optimization initiatives primarily related to optimizing the company’s overall cost structure on a global basis, as the company streamlines its international operations, rationalizes its manufacturing facilities, enhances its general and administrative infrastructure and realigns certain R&D activities. The restructuring charges primarily include employee termination costs, costs associated with the company’s business optimization programs including consulting and other fees, in addition to Gambro integration costs.

During the first quarters of 2016 and 2015, the company recorded the following charges related to business optimization programs.


	Three months ended
	March 31,
(in millions)	2016		2015
Restructuring charges, net		$ 4		$ (1	)
Costs to implement business optimization programs		11		18
Total business optimization charges		$15		$17

During the first quarters of 2016 and 2015, the company recorded the following restructuring charges.


	Three months ended
	March 31, 2016
(in millions)	COGS		SGA			R&D			Total
Employee termination costs		$13		$ 1			$ 1			$15
Reserve adjustments		(1)		(8	)		(2	)		(11	)
Total restructuring charges		$12		$(7	)		$(1	)		$ 4


	Three months ended
	March 31, 2015
(in millions)	COGS			SGA			Total
Employee termination costs		$ 1			$11			$12
Asset related costs		3			1			4
Asset impairment		2			—			2
Reserve adjustments		(13	)		(6	)		(19	)
Total restructuring charges		$ (7	)		$ 6			$ (1	)

The following table summarizes cash activity in the reserves related to the company’s business optimization initiatives.


(in millions)
Reserves as of December 31, 2015	$	116
Charges		15
Reserve adjustments		(11	)
Utilization		(22	)
CTA		13
Reserves as of March 31, 2016	$	111

The reserves are expected to be substantially utilized by the end of 2016.