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Restructuring Program

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring Program

Note 7. 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 charges ($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. On October 21, 2021, our Board of Directors approved an extension of the restructuring program through 2023. 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 implementation charges of $5.2 billion related to the Simplify to Grow Program. We expect to incur the remainder of the program charges by year-end 2023.

Restructuring Costs

The Simplify to Grow Program liability activity for the three months ended March 31, 2023 was:

			Severance and related costs						Asset Write-downs and Other (1)						Total
			(in millions)
Liability balance, January 1, 2023			$	164					$	—					$	164
Charges (2)			29						1						30
Cash spent (3)			(18)						—						(18)
Non-cash settlements/adjustments (4)			—						(1)						(1)
Currency			2						—						2
Liability balance, March 31, 2023 (5)			$	177					$	—					$	177

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

(2)We recorded restructuring charges of $30 million in the first quarter of 2023 and $11 million in the first quarter of 2022 within asset impairment and exit costs and benefit plan non-service income.

(3)We spent $18 million in the first quarter of 2023 and $17 million in the first quarter of 2022 in cash severance and related costs.

(4)We recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), and other non-cash adjustments, including any gains on sale of restructuring program assets, which totaled a charge of $1 million in the first quarter of 2023 and a charge of $2 million in the first quarter of 2022.

(5)At March 31, 2023, $135 million of our net restructuring liability was recorded within other current liabilities and $42 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 $5 million in

the first quarter of 2023 and $20 million in the first quarter of 2022. We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses.

Restructuring and Implementation Costs

During the three months ended March 31, 2023 and March 31, 2022, 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 Three Months Ended March 31, 2023
Restructuring Costs			$	—					$	1					$	30					$	(1)					$	—					$	30
Implementation Costs			—						—						—						—						5						5
Total			$	—					$	1					$	30					$	(1)					$	5					$	35
For the Three Months Ended March 31, 2022
Restructuring Costs			$	(1)					$	2					$	2					$	8					$	—					$	11
Implementation Costs			1						1						5						7						6						20
Total			$	—					$	3					$	7					$	15					$	6					$	31
Total Project (Inception to Date)
Restructuring Costs			$	548					$	555					$	1,193					$	656					$	150					$	3,102
Implementation Costs			303						245						569						590						373						2,080
Total			$	851					$	800					$	1,762					$	1,246					$	523					$	5,182

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- References

No definition available.

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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/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 5.P.4(e))
-URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI https://asc.fasb.org/topic&trid=2175745

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869

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