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Restructuring | 6 Months Ended
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Jun. 28, 2020
Restructuring and Related Activities [Abstract] |
Restructuring | RESTRUCTURING The Company announced plans to implement a series of actions across its Global Supply Chain that are intended to focus resources and increase investments in the critical capabilities, technologies and solutions necessary to manufacture and supply its product portfolio, enhance agility and drive growth. The Global Supply Chain actions will include expanding the use of strategic collaborations and bolstering initiatives to reduce complexity, improve cost-competitiveness, enhance capabilities and optimize the Supply Chain network. For additional details on the global supply chain restructuring strategic collaborations see Note 10 to the Consolidated Financial Statements. In the fiscal second quarter of 2020, the Company recorded a pre-tax charge of $115 million, which is included on the following lines of the Consolidated Statement of Earnings, $61 million in restructuring, $22 million in cost of products sold and $32 million in other (income) expense. In the first fiscal six months of 2020, the Company recorded a pre-tax charge of $233 million, which is included on the following lines of the Consolidated Statement of Earnings, $119 million in restructuring, $37 million in cost of products sold and $77 million in other (income) expense.Total project costs of approximately $1.1 billion have been recorded since the restructuring was announced. See the following table for additional details on the restructuring program. In total, the Company expects the Global Supply Chain actions to generate approximately $0.6 billion to $0.8 billion in annual pre-tax cost savings that will be substantially delivered by 2022. The Company expects to record pre-tax restructuring charges of approximately $1.9 billion to $2.3 billion, over the 4 to 5 year period of this activity. These costs are associated with network optimizations, exit costs and accelerated depreciation and amortization. The following table summarizes the severance related reserves and the associated restructuring expenses through the first fiscal six months of 2020:
(Dollars in Millions) | Severance | Asset Write-offs | Other(2) |  | Total
Reserve balance, December 29, 2019 | $ | 164 |  | — |  | 16 |  |  | 180 |
Current year activity: |  |  |  |  |
Charges | — |  | 27 |  | 206 |  |  | 233 |
Cash payments | (12) |  | — |  | (197) |  |  | (209) |
Settled non cash | — |  | (27) |  | (17) |  | (3) | (44) |
Reserve balance, June 28, 2020(1) | $ | 152 |  | — |  | 8 |  |  | 160 |
(1) Cash outlays for severance are expected to be substantially paid out over the next 2 years in accordance with the Company's plans and local laws. (2) Other includes project expense such as salaries for employees supporting these initiatives and consulting expenses. (3) Relates to pension related actuarial losses associated with the transfer of employees to Jabil Inc. as part of the strategic collaboration. The Company continuously reevaluates its severance reserves related to restructuring and the timing of payments due to the planned release of associates regarding several longer-term projects. The Company believes that the existing severance reserves are sufficient to cover the Global Supply Chain plans given the period over which the actions will take place. The Company will continue to assess and make adjustments as necessary if additional amounts become probable and estimable.

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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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