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BUSINESS OPTIMIZATION CHARGES | 6 Months Ended
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Jun. 30, 2020
Restructuring and Related Activities [Abstract] |
BUSINESS OPTIMIZATION CHARGES | BUSINESS OPTIMIZATION CHARGES In recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency. These efforts include restructuring the organization, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions. From the commencement of our business optimization activities in the second half of 2015 through June 30, 2020, we have incurred cumulative pre-tax costs of $1.0 billion related to these actions. The costs consisted primarily of employee termination costs, implementation costs, asset impairments and accelerated depreciation. We currently expect to incur additional pre-tax costs of approximately $15 million through the completion of the initiatives that are currently underway. These costs will primarily include employee termination costs, implementation costs, and accelerated depreciation. We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we may incur additional restructuring charges and costs to implement business optimization programs in future periods. During the three and six months ended June 30, 2020 and 2019, we recorded the following charges related to business optimization programs.
| Three months ended June 30, |  |  | Six months ended June 30, |
(in millions) | 2020 | 2019 |  | 2020 | 2019
Restructuring charges | $ | 7 |  | $ | 52 |  |  | $ | 32 |  | $ | 77 |
Costs to implement business optimization programs | 6 |  | 12 |  |  | 13 |  | 22 |
Accelerated depreciation | — |  | 1 |  |  | — |  | 4 |
Total business optimization charges | $ | 13 |  | $ | 65 |  |  | $ | 45 |  | $ | 103 |
For segment reporting purposes, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the three and six months ended June 30, 2020 and 2019, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. The costs were generally included within cost of sales, SG&A expense and R&D expense. For the three and six months ended June 30, 2020 and 2019, respectively, we recognized accelerated depreciation, primarily associated with facilities to be closed. The costs were recorded within cost of sales and SG&A expense. During the three and six months ended June 30, 2020 and 2019, we recorded the following restructuring charges.
| Three months ended June 30, 2020 |  |  |
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 3 |  | $ | 3 |  | $ | (3) |  | $ | 3 |
Contract termination and other costs | 2 |  | — |  | — |  | 2 |
Asset impairments | 2 |  | — |  | — |  | 2 |
Total restructuring charges | $ | 7 |  | $ | 3 |  | $ | (3) |  | $ | 7 |
| Three months ended June 30, 2019 |  |  |
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 6 |  | $ | 26 |  | $ | 17 |  | $ | 49 |
Contract termination costs | 1 |  | — |  | — |  | 1 |
Asset impairments | 1 |  | — |  | 1 |  | 2 |
Total restructuring charges | $ | 8 |  | $ | 26 |  | $ | 18 |  | $ | 52 |
| Six months ended June 30, 2020 |  |  |
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 5 |  | $ | 19 |  | $ | (2) |  | $ | 22 |
Contract termination and other costs | 2 |  | — |  | — |  | 2 |
Asset impairments | 8 |  | — |  | — |  | 8 |
Total restructuring charges | $ | 15 |  | $ | 19 |  | $ | (2) |  | $ | 32 |
| Six months ended June 30, 2019 |  |  |
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 6 |  | $ | 25 |  | $ | 26 |  | $ | 57 |
Contract termination costs | 8 |  | — |  | — |  | 8 |
Asset impairments | 10 |  | 1 |  | 1 |  | 12 |
Total restructuring charges | $ | 24 |  | $ | 26 |  | $ | 27 |  | $ | 77 |
In conjunction with our business optimization initiatives, we sold property that resulted in a gain of $17 million. This benefit is reflected within other operating income, net in our condensed consolidated statement of income for the six months ended June 30, 2020 The following table summarizes activity in the liability related to our restructuring initiatives.
(in millions) |
Liability balance as of December 31, 2019 | $ | 92 |
Charges | 29 |
Payments | (41) |
Reserve adjustments | (5) |
Currency translation | 1 |
Liability balance as of June 30, 2020 | $ | 76 |
Substantially all of our restructuring liabilities as of June 30, 2020 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2021.

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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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