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Restructuring and Related Implementation Charges
 12 Months Ended
Dec. 31, 2020
Restructuring and Related Activities [Abstract]  
Restructuring and Related Implementation Charges Restructuring and Related Implementation Charges
 
The Company’s restructuring program (the “Global Growth and Efficiency Program”), which commenced in the fourth quarter of 2012, concluded on December 31, 2019. Initiatives under the Global Growth and Efficiency Program fit within the program’s three focus areas of expanding commercial hubs, extending shared business services and streamlining global functions and optimizing the global supply chain and facilities. Substantially all initiatives under the Global Growth and Efficiency Program had been implemented as of December 31, 2019.

In the third quarter of 2020, the Company adjusted the accrual balances related to certain projects approved prior to the conclusion of the Global Growth and Efficiency Program to reflect its revised estimate of remaining liabilities. This adjustment resulted in a reduction of $16 ($13 aftertax), of which $3 was recorded in Selling, general and administrative expenses and $13 was recorded in Other (income) expense, net. During the year ended December 31, 2020, the Company also made cash payments of $53 related to projects approved prior to the conclusion of the Global Growth and Efficiency Program, and the remaining accrual balance at December 31, 2020 was $31. No new restructuring projects were approved for implementation during the year ended December 31, 2020.

For the years ended December 31, 2019 and 2018, restructuring and related implementation charges are reflected in the Consolidated Statements of Income as follows:  
20192018
Cost of sales$8 $31 
Selling, general and administrative expenses60 33 
Other (income) expense, net57 88 
Non-service related postretirement costs7 9 
Total Global Growth and Efficiency Program charges, pretax$132 $161 
Total Global Growth and Efficiency Program charges, aftertax$102 $125 

Restructuring and related implementation charges in the preceding table and the adjustment recorded in the third quarter of 2020 were recorded in the Corporate segment as these initiatives were predominantly centrally directed and controlled and were not included in internal measures of segment operating performance.

Total charges incurred for the Global Growth and Efficiency Program related to initiatives undertaken by the following reportable operating segments:
Total Program
20192018Charges
North America4 %18 %17 %
Latin America12 %10 %5 %
Europe4 %(2)%19 %
Asia Pacific6 %13 %4 %
Africa/Eurasia(1)%5 %5 %
Hill’s Pet Nutrition
2 %19 %8 %
Corporate73 %37 %42 %
Total100 %100 %100 %
Over the course of the Global Growth and Efficiency Program, the Company incurred total pretax charges of $1,854 ($1,380 aftertax) in connection with the implementation of various projects as follows:
Total Program Charges
as of December 31, 2019
Employee-Related Costs$706 
Incremental Depreciation128 
Asset Impairments58 
Other962 
Total$1,854 

Over the course of the Global Growth and Efficiency Program, the majority of the costs incurred related to the following projects: the implementation of the Company’s overall hubbing strategy; the consolidation of facilities; the extension of shared business services and streamlining of global functions; the closing of the Morristown, New Jersey personal care facility; the simplification and streamlining of the Company’s research and development capabilities and oral care supply chain, both in Europe; redesigning the European commercial organization; restructuring how the Company will provide future retirement benefits to substantially all of the U.S.-based employees participating in the Company’s defined benefit retirement plan by shifting them to the Company’s defined contribution plan; and the implementation of a Corporate efficiencies program.

The following table summarizes the activity for the restructuring and related implementation charges for the years ended December 31, 2019 and 2018 and the related accruals:

 
Employee-Related
Costs 
Incremental
Depreciation
Asset
Impairments
Other
Total
Balance at December 31, 2017$127 $— $— $107 $234 
Charges53 2 16 90 161 
Cash payments(107)— — (60)(167)
Charges against assets(9)(2)(16)— (27)
Foreign exchange(4)— — — (4)
Other— — — 5 5 
Balance at December 31, 2018$60 $— $— $142 $202 
Charges25 36 6 65 132 
Cash payments(55)— — (58)(113)
Charges against assets(7)(36)(6)(27)(76)
Foreign exchange3 — — — 3 
Other— — — (48)(48)
Balance at December 31, 2019$26 $— $— $74 $100 

Employee-Related Costs primarily included severance and other termination benefits and were calculated based on long-standing benefit practices, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also included pension and other retiree benefit enhancements amounting to $7 and $9 for the years ended December 31, 2019 and 2018, respectively, which are reflected as Charges against assets within Employee-Related Costs in the preceding table as the corresponding balance sheet amounts are reflected as a reduction of pension assets or an increase in pension and other retiree benefit liabilities. See Note 10, Retirement Plans and Other Retiree Benefits for additional information.
Incremental Depreciation was recorded to reflect changes in useful lives and estimated residual values for long-lived assets that will be taken out of service prior to the end of their normal service period. Asset Impairments were recorded to write down inventories and assets held for sale or disposal to their fair value based on amounts expected to be realized. Charges against assets within Asset Impairments are net of cash proceeds pertaining to the sale of certain assets.

Other charges consisted primarily of charges resulting directly from exit activities and the implementation of new strategies as a result of the Global Growth and Efficiency Program. These charges for the years ended December 31, 2019 and 2018 included third-party incremental costs related to the development and implementation of new business and strategic initiatives of $32 and $42, respectively, and contract termination costs and charges resulting directly from exit activities of $5 and $48, respectively. These charges were expensed as incurred. Also included in Other charges for the year ended December 31, 2019 were other exit costs of $28 related to the consolidation of facilities.

Other decreases to the restructuring accruals reflect the reclassification of restructuring accruals to lease assets as a result of the Company’s adoption of ASU No. 2018-10, “Codification Improvement to Topic 842, Leases,” on January 1, 2019.