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Impairment, Restructuring Charges and Other Related Closure Costs | 12 Months Ended
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Dec. 31, 2015
Restructuring and Related Activities [Abstract] |
Impairment, Restructuring Charges and Other Related Closure Costs |
| 18. |  | IMPAIRMENT, RESTRUCTURING CHARGES AND OTHER RELATED CLOSURE COSTS
Impairment, restructuring charges and other related closure costs incurred in 2015, 2014 and 2013 are summarized as follows:
Year ended December 31, 2015 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
$600-650 million net opex plan |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | (2 | )
Manufacturing consolidation |  |  | — |  |  |  | (1 | ) |  |  | (10 | ) |  |  | (11 | )
EPS restructuring plan |  |  | — |  |  |  | (36 | ) |  |  | — |  |  |  | (36 | )
Long-lived asset impairment charge(16) |  |  |  |  |  |  | — |  |  |  | — |  |  |  | (16 | )
Total |  |  | (16 | ) |  |  | (37 | ) |  |  | (12 | ) |  |  | (65 | )
Year ended December 31, 2014 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
$600-650 million net opex plan |  |  | — |  |  |  | (17 | ) |  |  | (7 | ) |  |  | (24 | )
Manufacturing consolidation |  |  | — |  |  |  | (8 | ) |  |  | (4 | ) |  |  | (12 | )
EPS restructuring plan |  |  | — |  |  |  | (16 | ) |  |  | (14 | ) |  |  | (30 | )
Long-lived asset impairment charge |  |  | (24 | ) |  |  | — |  |  |  | — |  |  |  | (24 | )
Total |  |  | (24 | ) |  |  | (41 | ) |  |  | (25 | ) |  |  | (90 | )
Year ended December 31, 2013 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
ST-Ericsson restructuring plans |  |  | — |  |  |  | (6 | ) |  |  | (3 | ) |  |  | (9 | )
ST-Ericsson exit |  |  | (17 | ) |  |  | (69 | ) |  |  | — |  |  |  | (86 | )
Digital restructuring plan |  |  | (2 | ) |  |  | (1 | ) |  |  | (2 | ) |  |  | (5 | )
$600-650 million net opex plan |  |  | — |  |  |  | (88 | ) |  |  | — |  |  |  | (88 | )
Manufacturing consolidation |  |  | (29 | ) |  |  | (8 | ) |  |  | — |  |  |  | (37 | )
Goodwill and other intangible impairment charge |  |  | (56 | ) |  |  | — |  |  |  | — |  |  |  | (56 | )
Assets held for sale impairment |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | (5 | )
Other restructuring initiatives |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | (6 | )
Total |  |  | (109 | ) |  |  | (178 | ) |  |  | (5 | ) |  |  | (292 | )
Impairment charges In 2015, the Company recorded impairment charges of $16 million, of which $13 million following the annual impairment test performed in the third quarter, as detailed in Note 8, and $3 million for other acquired intangible assets for which there was no alternative future use. In 2014, the Company recorded impairment charges of $24 million, of which $23 million on Digital Convergence Group dedicated intangible assets and $1 million on other intangible assets, as detailed in Note 8. In 2013, the Company recorded impairment charges of $109 million comprised primarily of:
| • |  | $56 million impairment of Digital Convergence Group goodwill ($38 million) and dedicated intangible assets ($18 million);
| • |  | $29 million on certain long-lived assets as part of the Company’s manufacturing consolidation;
| • |  | $17 million impairment primarily related to long-lived assets as part of the exit of ST-Ericsson; and
| • |  | $5 million impairment charge on Veredus assets classified as Assets held for sale, as of December 31, 2013.
Restructuring charges and other related closure costs The Company was engaged in 2015 in three major restructuring plans, the $600-650 million net opex plan, the Manufacturing consolidation plan and the EPS restructuring plan which are described hereafter. Further to the announcement on December 10, 2012 to reduce the Company’s net operating expenses comprised of combined selling, general and administrative and research and development expenses, net of R&D grants, to the level of $600 million to $650 million on a quarterly basis by the beginning of 2014, the Company committed restructuring actions in 2013 (the “$600-650 million net opex plan”). In July 2013, the Company announced that it would wind down certain 6-inch manufacturing lines, close its back-end plant in Longgang and consolidate back-end activities in China to Shenzhen (the “Manufacturing consolidation plan”). In the third quarter of 2014, the Company committed to a plan affecting around 450 employees worldwide and targeting savings in the EPS segment (the “EPS restructuring plan”). In 2015, the Company incurred restructuring charges and other related closure costs for $49 million corresponding to:
| • |  | $2 million for the $600-650 million net opex plan corresponding to a change in estimates on a contract termination provision;
| • |  | $11 million for the Manufacturing consolidation plan corresponding to $1 million for employee termination benefits and $10 million corresponding to a grant clawback pursuant to the closure of operations in Longgang, China;
| • |  | $36 million for the EPS restructuring plan, net of adjustments for unused provision, corresponding primarily to employee voluntary termination benefits and including termination fees in connection with the exit from the IBM technology alliance and contract termination costs.
In 2014, the Company incurred restructuring charges and other related closure costs for $66 million corresponding to:
| • |  | $24 million for the $600-650 million net opex plan corresponding to employee termination benefits, primarily in Europe, and contract termination costs;
| • |  | $12 million for the Manufacturing consolidation plan corresponding to $8 million for employee termination benefits and $4 million of closure costs;
| • |  | $30 million for the EPS restructuring plan relating to employee and contract termination costs
In 2013, the Company incurred restructuring charges and other related closure costs for $183 million corresponding to:
| • |  | $88 million for the $600-650 million net opex plan corresponding to employee termination benefits;
| • |  | $69 million recorded before ST-Ericsson deconsolidation for the ST-Ericsson exit, primarily related to employee termination benefits, net of an adjustment of $31 million mainly resulting from a significant reduction of estimated restructured employees in Sweden, as part of the exit of ST-Ericsson;
| • |  | $9 million recorded before ST-Ericsson deconsolidation for the ST-Ericsson restructuring plans, primarily related to employee termination benefits;
| • |  | $8 million for the Manufacturing consolidation plan corresponding to employee termination benefits; and
| • |  | $9 million for other restructuring plans.
Changes to the restructuring provisions recorded on the consolidated balance sheets from December 31, 2013 to December 31, 2015 are summarized as follows:
|  | $600-650 million net opex plan |  |  | Digital restructuring plan |  |  | Manufacturing consolidation |  |  | EPS restructuring plan |  |  | Other restructuring initiatives |  |  | Total |
Provision as at December 31, 2013 |  |  | 46 |  |  |  | 6 |  |  |  | 10 |  |  |  | — |  |  |  | 14 |  |  |  | 76 |
Charges incurred in 2014 |  |  | 25 |  |  |  | — |  |  |  | 12 |  |  |  | 31 |  |  |  | — |  |  |  | 68 |
Adjustments for unused provisions |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (2 | )
Amounts paid |  |  | (58 | ) |  |  | (6 | ) |  |  | (17 | ) |  |  | (2 | ) |  |  | (3 | ) |  |  | (86 | )
Advances not refunded upon contract termination |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | (13 | )
Currency translation effect |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
Provision as at December 31, 2014 |  |  | 11 |  |  |  | — |  |  |  | 5 |  |  |  | 15 |  |  |  | 11 |  |  |  | 42 |
Charges incurred in 2015 |  |  | 2 |  |  |  | — |  |  |  | 11 |  |  |  | 43 |  |  |  | — |  |  |  | 56 |
Adjustments for unused provisions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | (7 | )
Amounts paid |  |  | (5 | ) |  |  | — |  |  |  | (5 | ) |  |  | (33 | ) |  |  | (2 | ) |  |  | (45 | )
Receivables not collected upon contract termination |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | (4 | )
Longgang deconsolidation |  |  | — |  |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | — |  |  |  | (6 | )
Currency translation effect |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 | )
Provision as at December 31, 2015 |  |  | 6 |  |  |  | — |  |  |  | 1 |  |  |  | 18 |  |  |  | 9 |  |  |  | 34 |
An amount of $26 million is expected to be paid within twelve months, as detailed in Note 12. The $600-650 million net opex plan resulted in a total charge of $114 million. The plan was substantially completed in 2014. The Digital restructuring plan resulted in a total charge of $16 million, excluding impairments. The plan was completed in 2013. The Manufacturing consolidation plan resulted in a total charge of $31 million, excluding impairments. The plan was completed in 2015. The EPS restructuring plan, which was expected to result in pre-tax charges in the range of $65 million and $70 million, resulted in a total charge of $66 million. The plan was substantially completed in 2015. In 2015, total amounts paid for restructuring and related closure costs amounted to $45 million. The total actual costs that the Company will incur may differ from these estimates based on the timing required to complete the restructuring plan, the number of people involved, the final agreed termination benefits and the costs associated with the transfer of equipment, products and processes.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 + Details
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