Restructuring Charges and Cost Savings Initiatives

2015 Initiatives

On January 29, 2015, we announced plans to implement a new enterprise design focused mainly on product categories. Under the new structure, which we fully implemented at the beginning of 2016, our businesses are organized in the following divisions: Americas Simple Meals and Beverages, Global Biscuits and Snacks, and Campbell Fresh.

In support of the new structure, we designed and implemented a new Integrated Global Services organization to deliver shared services across the company. We also streamlined our organizational structure. We are pursuing other initiatives to reduce costs and increase effectiveness, such as adopting zero-based budgeting over time.

As part of these initiatives, we commenced a voluntary employee separation program available to certain U.S.-based salaried employees nearing retirement who met age, length-of-service and business unit/function criteria. A total of 471 employees elected the program. The electing employees remained with us through at least July 31, 2015, with some remaining beyond July 31. We also implemented an initiative to reduce overhead across the organization by eliminating approximately 275 positions. In the first quarter of 2017, we recorded a restructuring charge of $1 related to these initiatives. In 2016, we recorded a restructuring charge of $35 related to these initiatives. Of the amounts recorded in 2016, $21 was recorded in the first quarter. In 2015, we recorded a restructuring charge of $102 related to these initiatives.

In the first quarter of 2017, we also incurred charges of $8 in Administrative expenses related to the implementation of the new organizational structure and cost savings initiatives. In 2016 and 2015, we incurred charges of $47 and $22, respectively, recorded in Administrative expenses related to these initiatives. Of the amounts recorded in 2016, $15 was recorded in the first quarter.

In the first quarter of 2017, the aggregate after-tax impact of restructuring charges, implementation costs and other related costs recorded was $6, or $.02 per share. In the first quarter of 2016, the aggregate after-tax impact of restructuring charges, implementation costs and other related costs recorded was $23, or $.07 per share. The aggregate after-tax impact of restructuring charges, implementation costs and other related costs recorded in 2016 and 2015 was $52, or $.17 per share, and $78, or $.25 per share, respectively. A summary of the pre-tax costs associated with the 2015 initiatives is as follows:



	Recognized as of October 30, 2016
Severance pay and benefits	$	129
Implementation costs and other related costs	86
Total	$	215

The total estimated pre-tax costs for the 2015 initiatives are approximately $250 to $300. We expect to incur these costs through 2018.

We expect the costs to consist of approximately $135 to $145 in severance pay and benefits, and approximately $115 to $155 in implementation costs and other related costs.We expect the total pre-tax costs related to the 2015 initiatives will be associated with segments as follows: Americas Simple Meals and Beverages - approximately 30%; Global Biscuits and Snacks - approximately 32%; Campbell Fresh - approximately 3%; and Corporate - approximately 35%.

A summary of the restructuring activity and related reserves associated with the 2015 initiatives at October 30, 2016, is as follows:



	Severance Pay and Benefits			Implementation Costs and Other Related Costs⁽³⁾	Total Charges
Accrued balance at July 31, 2016⁽¹⁾	$	73
2017 charges	1			8	$	9
2017 cash payments	(14		)
Accrued balance at October 30, 2016⁽²⁾	$	60

_______________________________________


⁽¹⁾	Includes $17 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.


⁽²⁾	Includes $9 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.


⁽³⁾	Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. The costs are included in Administrative expenses in the Consolidated Statements of Earnings.

Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs associated with segments is as follows:



	October 30, 2016
	Three Months Ended		Costs Incurred to Date
Americas Simple Meals and Beverages	$	—	$	71
Global Biscuits and Snacks	3		69
Campbell Fresh	—		2
Corporate	6		73
Total	$	9	$	215