Restructuring

9 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

Restructuring and related expenses, net were $50 million and $9 million during the three months ended March 31, 2023 and 2022, respectively, and $53 million and $27 million in the nine months ended March 31, 2023 and 2022, respectively. The net expenses related to restructuring activities have been presented on the unaudited condensed consolidated statements of income as restructuring and other related activities, net. The Company's restructuring activities in the three and nine months ended March 31, 2023 primarily comprised of restructuring activities related to the 2023 Restructuring Plan (as defined below). The Company's restructuring activities in the three and nine months ended March 31, 2022 included expenses related to the Company's 2019 plan from the integration of the acquired Bemis operations, which was substantially completed at the end of fiscal year 2022.

2023 Restructuring Plan

On February 7, 2023, the Company announced that it will allocate approximately $110 million to $130 million of the sale proceeds from the Russian business to various cost saving initiatives to partly help offsetting divested earnings from the Russian business (the "2023 Restructuring Plan" or the "Plan"). Under this Plan, the Company has initiated in the third quarter of fiscal year 2023 projects with an expected cost of approximately $95 million, of which $42 million relates to employee-related expenses, $20 million to fixed asset related expenses, $23 million to other restructuring expenses, and $10 million to restructuring related expenses. Of the total Plan cost initiated in the third quarter of fiscal year 2023, approximately $50 million is expected to result in net cash expenditures. The Plan includes both the Flexibles and Rigid Packaging reportable segments and is expected to be substantially completed by the end of fiscal year 2024.

As of March 31, 2023, as part of this Plan, the Company has incurred $37 million in employee-related expenses, $1 million in fixed asset related expenses, $2 million in other restructuring, and $2 million in restructuring related expenses, with $36 million incurred in the Flexibles reportable segment and $6 million incurred in the Rigid Packaging reportable segment. To date, the Plan has resulted in approximately $7 million in cash outflows. The Company continues to evaluate different options to partly offset divested earnings from the Russian business across its global footprint and expects to disclose the total Plan cost at the end of fiscal year 2023.

Restructuring related expenses are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. The Company believes the disclosure of restructuring related costs provides more information on the total cost of the 2023 Restructuring Plan. The restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics, train new employees on relocated equipment, and other startup costs.

Other Restructuring Plans

The Company has entered into other individually immaterial restructuring plans ("Other Restructuring Plans"). The Company's other restructuring charges are primarily employee costs.

An analysis of the Company's restructuring plan liability is as follows:


($ in millions)	Employee Costs		Fixed Asset Related Costs		Other Costs		Total Restructuring Costs
Liability balance as of June 30, 2022	$	97	$	3	$	18	$	118
Net charges to earnings (1)	37		4		8		49

Cash paid	(25)		(1)		(14)		(40)
Non-cash and other	—		(3)		—		(3)
Foreign currency translation	3		—		1		4
Liability balance as of March 31, 2023	$	112	$	3	$	13	$	128

(1)Excludes $4 million of restructuring related expenses incurred in the nine months ended March 31, 2023.

The table above includes liabilities arising from the 2023 Restructuring Plan and Other Restructuring Plans.

The Company expects the majority of the liability for employee, fixed assets related, and other costs as of March 31, 2023 to be paid within the next twelve months. The accruals related to restructuring activities have been recorded on the unaudited condensed consolidated balance sheets under other current liabilities and other non-current liabilities.