Restructuring Program

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Note 8. Restructuring Program

On May 6, 2014, our Board of Directors approved a $3.5 billion 2014-2018 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 the $5.7 billion program consisted of approximately $4.1 billion of restructuring program costs ($3.1 billion cash costs and $1.0 billion non-cash costs) and up to $1.6 billion of capital expenditures. On September 6, 2018, our Board of Directors approved an extension of the restructuring program through 2022, an increase of $1.3 billion in the program charges and an increase of $700 million in capital expenditures. The total $7.7 billion program now consists of $5.4 billion of program charges ($4.1 billion of cash costs and $1.3 billion of non-cash costs) and total capital expenditures of $2.3 billion to be incurred over the life of the program. The current restructuring program, as increased and extended by these actions, is now called the Simplify to Grow Program.

The primary objective of the Simplify to Grow Program is to reduce our operating cost structure in both our supply chain and overhead costs. The program covers severance as well as asset disposals and other manufacturing and procurement-related one-time costs. Since inception, we have incurred total restructuring and related implementation charges of $4.7 billion related to the Simplify to Grow Program. We expect to incur the remainder of the program charges by year-end 2022.

Restructuring Costs:

The Simplify to Grow Program liability activity for the years ended December 31, 2020 and 2019 was:


	Severance and related costs		Asset Write-downs and Other (1)		Total
	(in millions)
Liability Balance, January 1, 2019	$	373	$	—	$	373
Charges	125		51		176
Cash spent	(162)		—		(162)
Non-cash settlements/adjustments	(31)		(51)		(82)
Currency	(4)		—		(4)
Liability Balance, December 31, 2019	$	301	$	—	$	301
Charges	168		(12)		156
Cash spent	(169)		—		(169)
Non-cash settlements/adjustments	(6)		12		6
Currency	10		—		10
Liability Balance, December 31, 2020	$	304	$	—	$	304

(1) Includes gains as a result of assets sold which are included in the restructuring program

•We recorded restructuring charges of $156 million in 2020, $176 million in 2019 and $316 million in 2018 within asset impairment and exit costs and benefit plan non-service income.

•We spent $169 million in 2020 and $162 million in 2019 in cash severance and related costs.

•In 2020, we recognized a gain on sale of assets included in the restructuring program, partially offset by non-cash asset write-downs (including accelerated depreciation and asset impairments), non-cash pension settlement losses (See Note 11, Benefit Plans) and other non-cash adjustments totaling $6 million. In 2019, we recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), non-cash pension settlement losses and other non-cash adjustments totaling $82 million.

•At December 31, 2020, $260 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 Simplify to Grow 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 $207 million in 2020, $272 million in 2019 and $315 million in 2018. 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 2020, 2019 and 2018, and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:


	Latin America		AMEA		Europe		North America		Corporate		Total
	(in millions)
For the Year Ended December 31, 2020
Restructuring Costs	$	30	$	23	$	67	$	23	$	13	$	156
Implementation Costs	18		23		63		72		31		207
Total	$	48	$	46	$	130	$	95	$	44	$	363
For the Year Ended December 31, 2019
Restructuring Costs	$	24	$	18	$	105	$	16	$	13	$	176
Implementation Costs	50		38		103		52		29		272
Total	$	74	$	56	$	208	$	68	$	42	$	448
For the Year Ended December 31, 2018
Restructuring Costs	$	63	$	69	$	132	$	32	$	20	$	316
Implementation Costs	67		39		73		79		57		315
Total	$	130	$	108	$	205	$	111	$	77	$	631
Total Project (Inception to Date)
Restructuring Costs	$	547	$	558	$	1,143	$	492	$	142	$	2,882
Implementation Costs	287		229		511		456		338		1,821
Total	$	834	$	787	$	1,654	$	948	$	480	$	4,703