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2014-2018 Restructuring Program | 9 Months Ended
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Sep. 30, 2016
2014-2018 Restructuring Program | Note 6. 2014-2018 Restructuring Program On May 6, 2014, our Board of Directors approved a $3.5 billion restructuring program, comprised of approximately $2.5 billion in cash costs and $1 billion in non-cash costs (the “2014-2018 Restructuring Program”), and up to $2.2 billion of capital expenditures. On August 31, 2016, our Board of Directors approved a reallocation within the program of $600 million of previously approved capital expenditures to be spent on restructuring program cash costs, resulting in $3.1 billion of cash costs to be expensed and up to $1.6 billion of capital expenditures. There was no change to the total $5.7 billion of total program costs and no change to the total $4.7 billion of cash outlays. The primary objective of the 2014-2018 Restructuring Program is to reduce our operating cost structure in both our supply chain and overhead costs. The program is intended primarily to cover severance as well as asset disposals and other manufacturing-related one-time costs. Since inception, we have incurred total restructuring and related implementation charges of $2.1 billion related to the 2014-2018 Restructuring Program. We have incurred the majority of the program’s charges through the third quarter of 2016 and we expect to complete the program by year-end 2018. Restructuring Costs: We recorded restructuring charges of $187 million in the three months and $480 million in the nine months ended September 30, 2016 and $146 million in the three months and $442 million in the nine months ended September 30, 2015 within asset impairment and exit costs. The activity for the 2014-2018 Restructuring Program liability for the nine months ended September 30, 2016 was:
|  | Severance |  |  |  |  |  |  |
|  | and related |  |  | Asset |  |  |  |
|  | costs |  |  | Write-downs |  |  | Total |
|  | (in millions) |
Liability balance, January 1, 2016 |  | $ | 395 |  |  | $ | – |  |  | $ | 395 |
Charges |  |  | 246 |  |  |  | 234 |  |  |  | 480 |
Cash spent |  |  | (249 | ) |  |  | – |  |  |  | (249 | )
Non-cash settlements / adjustments |  |  | (10 | ) |  |  | (234 | ) |  |  | (244 | )
Currency |  |  | 7 |  |  |  | – |  |  |  | 7 |
Liability balance, September 30, 2016 |  | $ | 389 |  |  | $ | – |  |  | $ | 389 |
We spent $89 million in the three months and $249 million in the nine months ended September 30, 2016 and $51 million in the three months and $156 million in the nine months ended September 30, 2015 in cash severance and related costs. We also recognized non-cash pension settlement losses (See Note 9, Benefit Plans), non-cash asset write-downs (including accelerated depreciation and asset impairments) and other non-cash adjustments of $120 million in the three months and $244 million in the nine months ended September 30, 2016 and $56 million in the three months and $196 million in the nine months ended September 30, 2015. At September 30, 2016, $302 million of our net restructuring liability was recorded within other current liabilities and $87 million was recorded within other long-term liabilities. Implementation Costs: Implementation costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. We believe the disclosure of implementation costs provides readers of our financial statements with more information on the total costs of our 2014-2018 Restructuring Program. Implementation costs primarily relate to reorganizing our operations and facilities in connection with our supply chain reinvention program and other identified productivity and cost saving initiatives. The costs include incremental expenses related to the closure of facilities, costs to terminate certain contracts and the simplification of our information systems. Within our continuing results of operations, we recorded implementation costs of $114 million in the three months and $286 million in the nine months ended September 30, 2016 and $75 million in the three months and $185 million in the nine months ended September 30, 2015. We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses. Restructuring and Implementation Costs in Operating Income: During the three and nine months ended September 30, 2016 and 2015 and since inception of the 2014-2018 Restructuring Program, we recorded restructuring and implementation costs within operating income as follows:
|  | Latin |  |  | Asia |  |  |  |  |  |  |  |  | North |  |  |  |  |  |  |
| America |  |  | Pacific |  |  | EEMEA |  |  | Europe |  |  | America (1) |  |  | Corporate (2) |  |  | Total |
|  |  |  |  |  |  |  |  |  |  | (in millions) |  |  |  |  |  |  |  |  |  |
For the Three Months Ended September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring Costs |  | $ | 27 |  |  | $ | 10 |  |  | $ | 6 |  |  | $ | 69 |  |  | $ | 75 |  |  | $ | – |  |  | $ | 187 |
Implementation Costs |  |  | 15 |  |  |  | 7 |  |  |  | 2 |  |  |  | 45 |  |  |  | 30 |  |  |  | 15 |  |  |  | 114 |
Total |  | $ | 42 |  |  | $ | 17 |  |  | $ | 8 |  |  | $ | 114 |  |  | $ | 105 |  |  | $ | 15 |  |  | $ | 301 |
For the Nine Months Ended September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring Costs |  | $ | 71 |  |  | $ | 51 |  |  | $ | 37 |  |  | $ | 172 |  |  | $ | 144 |  |  | $ | 5 |  |  | $ | 480 |
Implementation Costs |  |  | 34 |  |  |  | 18 |  |  |  | 13 |  |  |  | 74 |  |  |  | 101 |  |  |  | 46 |  |  |  | 286 |
Total |  | $ | 105 |  |  | $ | 69 |  |  | $ | 50 |  |  | $ | 246 |  |  | $ | 245 |  |  | $ | 51 |  |  | $ | 766 |
For the Three Months Ended September 30, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring Costs |  | $ | 30 |  |  | $ | 33 |  |  | $ | 7 |  |  | $ | 35 |  |  | $ | 39 |  |  | $ | 2 |  |  | $ | 146 |
Implementation Costs |  |  | 6 |  |  |  | 3 |  |  |  | 1 |  |  |  | 19 |  |  |  | 19 |  |  |  | 27 |  |  |  | 75 |
Total |  | $ | 36 |  |  | $ | 36 |  |  | $ | 8 |  |  | $ | 54 |  |  | $ | 58 |  |  | $ | 29 |  |  | $ | 221 |
For the Nine Months Ended September 30, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring Costs |  | $ | 79 |  |  | $ | 78 |  |  | $ | 21 |  |  | $ | 190 |  |  | $ | 70 |  |  | $ | 4 |  |  | $ | 442 |
Implementation Costs |  |  | 27 |  |  |  | 12 |  |  |  | 7 |  |  |  | 47 |  |  |  | 40 |  |  |  | 52 |  |  |  | 185 |
Total |  | $ | 106 |  |  | $ | 90 |  |  | $ | 28 |  |  | $ | 237 |  |  | $ | 110 |  |  | $ | 56 |  |  | $ | 627 |
Total Project 2014-2016 (3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring Costs |  | $ | 297 |  |  | $ | 199 |  |  | $ | 120 |  |  | $ | 491 |  |  | $ | 313 |  |  | $ | 45 |  |  | $ | 1,465 |
Implementation Costs |  |  | 89 |  |  |  | 47 |  |  |  | 28 |  |  |  | 184 |  |  |  | 177 |  |  |  | 159 |  |  |  | 684 |
Total |  | $ | 386 |  |  | $ | 246 |  |  | $ | 148 |  |  | $ | 675 |  |  | $ | 490 |  |  | $ | 204 |  |  | $ | 2,149 |
| (1) | During the nine months ended September 30, 2016, our North America region implementation costs included incremental costs that we incurred related to re-negotiating collective bargaining agreements that expired at the end of February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. We expect to incur additional costs related to these activities in the fourth quarter of 2016.
| (2) | Includes adjustment for rounding.
| (3) | Includes all charges recorded since program inception on May 6, 2014 through September 30, 2016.

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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 + Details
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