Note 7. 2014-2018 Restructuring Program

On May 6, 2014, our Board of Directors approved a $3.5 billion restructuring program and up to $2.2 billion of capital expenditures. On August 31, 2016, our Board of Directors approved a $600 million reallocation between restructuring program cash costs and capital expenditures so that now the $5.7 billion program consists of approximately $4.1 billion of restructuring program costs ($3.1 billion cash costs and $1 billion non-cash costs) and up to $1.6 billion of capital expenditures. 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 $3.4 billion related to the 2014-2018 Restructuring Program. We expect to incur the full $4.1 billion of program charges by year-end 2018.

Restructuring Costs:

We recorded restructuring charges of $52 million in the three months ended March 31, 2018 and $157 million in the three months ended March 31, 2017 within asset impairment and exit costs. The 2014-2018 Restructuring Program liability activity for the three months ended March 31, 2018 was:



	Severance and related costs			Asset Write-downs			Total
	(in millions)
Liability balance, January 1, 2018	$	464		$	—		$	464
Charges	28			24			52
Cash spent	(79		)	—			(79		)
Non-cash settlements/adjustments	(1		)	(24		)	(25		)
Currency	4			—			4
Liability balance, March 31, 2018	$	416		$	—		$	416

We spent $79 million in the three months ended March 31, 2018 and $84 million in the three months ended March 31, 2017 in cash severance and related costs. We also recognized non-cash asset write-downs (including accelerated depreciation and asset impairments) and other non-cash adjustments totaling $25 million in the three months ended March 31, 2018 and $72 million in the three months ended March 31, 2017. At March 31, 2018, $372 million of our net restructuring liability was recorded within other current liabilities and $44 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 $62 million in the three months ended March 31, 2018 and $54 million in the three months ended March 31, 2017. 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 months ended March 31, 2018 and March 31, 2017, and since inception of the 2014-2018 Restructuring Program, we recorded restructuring and implementation costs within operating income by segment as follows:



	Latin America		AMEA		Europe		North America ⁽¹⁾		Corporate ⁽²⁾			Total
	(in millions)
For the Three Months Ended March 31, 2018
Restructuring Costs	$	24	$	6	$	7	$	12	$	3		$	52
Implementation Costs	15		12		16		17		2			62
Total	$	39	$	18	$	23	$	29	$	5		$	114
For the Three Months Ended March 31, 2017
Restructuring Costs	$	24	$	27	$	69	$	38	$	(1	)	$	157
Implementation Costs	9		8		12		13		12			54
Total	$	33	$	35	$	81	$	51	$	11		$	211
Total Project 2014-2018 ⁽³⁾
Restructuring Costs	$	454	$	454	$	851	$	460	$	67		$	2,286
Implementation Costs	167		141		288		270		223			1,089
Total	$	621	$	595	$	1,139	$	730	$	290		$	3,375


(1)	During 2018 and 2017, our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business.


(2)	Includes adjustment for rounding.


(3)	Includes all charges recorded since program inception on May 6, 2014 through March 31, 2018.