Costs Associated with Rationalization Programs

In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to reduce excess and high-cost manufacturing capacity and to reduce associate headcount.

The following table presents the roll-forward of the liability balance between periods:



(In millions)	Associate-related Costs			Other Costs			Total
Balance at December 31, 2011	$	166		$	18		$	184
2012 charges	142			36			178
Incurred, Net of Foreign Currency Translation of $3 million and $0 million, respectively	(77		)	(30		)	(107		)
Reversed to the Statement of Operations	(2		)	(1		)	(3		)
Balance at December 31, 2012	$	229		$	23		$	252
2013 charges	58			17			75
Incurred, Net of Foreign Currency Translation of $7 million and $0 million, respectively	(42		)	(31		)	(73		)
Reversed to the Statement of Operations	(13		)	(4		)	(17		)
Balance at December 31, 2013	$	232		$	5		$	237
2014 charges (1)	76			52			128
Incurred, Net of Foreign Currency Translation of $(18) million and $0 million, respectively (2)	(186		)	(49		)	(235		)
Reversed to the Statement of Operations	(5		)	(6		)	(11		)
Balance at December 31, 2014	$	117		$	2		$	119

(1) Charges in 2014 of $128 million excludes $22 million of pension curtailment gains recorded in Rationalizations in the Statement of Operations.

(2) Incurred in 2014 of $235 million excludes $20 million of rationalization payments for labor claims relating to a previously closed facility in Greece. Refer to Note 4.

Significant rationalization actions initiated in 2014 consisted primarily of manufacturing headcount reductions related to Europe, Middle East and Africa's ("EMEA") plans to improve operating efficiency. In addition, EMEA, Latin America and Asia Pacific also initiated plans to reduce SAG.

The accrual balance of $119 million at December 31, 2014 is expected to be substantially utilized within the next 12 months and includes $84 million related to the plan to exit the farm tire business in EMEA and the closure of one of our manufacturing facilities in Amiens, France.

The net rationalization charges included in Income before Income Taxes are as follows:



(In millions)	2014			2013		2012
Current Year Plans
Associate Severance and Other Related Costs	$	22		$	42	$	125
Other Exit and Non-Cancelable Lease Costs	1			3		16
Current Year Plans - Net Charges	$	23		$	45	$	141

Prior Year Plans
Associate Severance and Other Related Costs	$	49		$	3	$	15
Pension Curtailment Gain	(22		)	—		—
Other Exit and Non-Cancelable Lease Costs	45			10		19
Prior Year Plans - Net Charges	72			13		34
Total Net Charges	$	95		$	58	$	175

Asset Write-off and Accelerated Depreciation Charges	$	7		$	23	$	20

Substantially all of the new charges for the year ended December 31, 2014 related to future cash outflows. Net prior year plan charges for the year ended December 31, 2014 of $72 million include charges of $74 million for associate severance and idle plant costs, partially offset by a pension curtailment gain of $22 million, related to the closure of one of our manufacturing facilities in Amiens, France.

Approximately 300 associates will be released under plans initiated in 2014, of which approximately 200 associates have been released as of December 31, 2014. In 2014, approximately 1,500 associates were released under plans initiated in prior years, primarily related to the plan to exit the farm tire business in EMEA and the closure of one of our manufacturing facilities in Amiens, France. In total, approximately 200 associates remain to be released under rationalization plans. At December 31, 2014, approximately 720 former associates of the closed Amiens, France manufacturing facility have asserted wrongful termination or other claims against us. Refer to Note 18.

Asset write-off and accelerated depreciation charges of $7 million in 2014 related to property and equipment in one of our manufacturing facilities in the U.K and property and equipment in one of our manufacturing facilities in Amiens, France. Accelerated depreciation charges for all periods were recorded in CGS.

Rationalization activities initiated in 2013 consisted primarily of manufacturing headcount reductions related to EMEA's plans to improve efficiency and reduce manufacturing capacity in certain Western European countries. In addition, Asia Pacific also initiated plans primarily relating to SAG headcount reductions and the closure of retail facilities in Australia and New Zealand. Other rationalization actions in 2013 related to plans to reduce manufacturing and SAG expenses through headcount reductions in all of our strategic business units.

Asset write-off and accelerated depreciation charges of $23 million in 2013 related to property and equipment in one of our manufacturing facilities in Amiens, France.

Rationalization activities initiated in 2012 consisted primarily of charges of $74 million related to EMEA's plan to exit the farm tire business and the closure of one of our manufacturing facilities in Amiens, France. In addition, Asia Pacific initiated plans relating to the closure of several retail facilities in Australia and New Zealand. Other rationalization actions in 2012 related to plans to reduce manufacturing and SAG expenses through headcount reductions in all of our strategic business units.

Asset write-off and accelerated depreciation charges of $20 million in 2012 related to property and equipment in our Dalian, China manufacturing facility, which ceased production in the third quarter of 2012.