COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS

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

The following table shows the roll-forward of our liability between periods:



				Other Exit and
(In millions)	Associate-			Non-cancelable
	Related Costs			Lease Costs			Total
Balance at December 31, 2016	$	214		$	5		$	219
2017 Charges	45			13			58
Incurred, including net Foreign Currency Translation of $15 million and $0 million, respectively	(27		)	(13		)	(40		)
Reversed to the Statements of Operations	(2		)	—			(2		)
Balance at June 30, 2017	$	230		$	5		$	235

Rationalization actions accrued at June 30, 2017 include $128 million related to the closure of our tire manufacturing facility in Philippsburg, Germany. The closure is in furtherance of our strategy to capture the growing demand for premium, large-rim diameter tires in part by reducing excess capacity in declining, less profitable segments of the tire market. The closure will result in approximately 890 job reductions. Approximately $120 million of the accrued charges related to the closure are expected to be paid during the second half of 2017 with the remainder paid in 2018.

The remainder of the accrual balance at June 30, 2017 is expected to be substantially utilized within the next 12 months and includes $36 million related to manufacturing headcount reductions in certain countries in Europe, Middle East and Africa ("EMEA"), $18 million related to a SAG headcount reduction plan in certain countries in EMEA, and $17 million related to a separate global plan to reduce SAG headcount.

The following table shows net rationalization charges included in Income before Income Taxes:



	Three Months Ended					Six Months Ended
(In millions)	June 30,					June 30,
	2017		2016			2017		2016
Current Year Plans
Associate Severance and Other Related Costs	$	2	$	43		$	25	$	43
Other Exit and Non-Cancelable Lease Costs	1		—			1		—
Current Year Plans - Net Charges	$	3	$	43		$	26	$	43

Prior Year Plans
Associate Severance and Other Related Costs	$	17	$	6		$	17	$	10
Benefit Plan Curtailment Loss (Gain)	—		(1		)	—		(1		)
Other Exit and Non-Cancelable Lease Costs	7		—			13		7
Prior Year Plans - Net Charges	24		5			30		16
Total Net Charges	$	27	$	48		$	56	$	59

Asset Write-off and Accelerated Depreciation Charges	$	21	$	5		$	29	$	7

Substantially all of the new charges for the three and six months ended June 30, 2017 and 2016 related to future cash outflows. Net current year plan charges for the three and six months ended June 30, 2017 include charges of $2 million and $19 million, respectively, related to SAG headcount reductions in certain countries in EMEA and $1 million and $7 million, respectively, related to a plan to improve operating efficiency in EMEA. Net current year plan charges for the three and six months ended June 30, 2016 primarily related to manufacturing headcount reductions in EMEA to improve operating efficiency. In addition, we initiated a plan to reduce SAG headcount globally.

Net prior year plan charges for the three and six months ended June 30, 2017 include $18 million and $20 million, respectively, related to the closure of our tire manufacturing facility in Philippsburg, Germany, and charges of $2 million and $5 million, respectively, related to the closure of our Wolverhampton, U.K. mixing and retreading facility and the plan to transfer consumer tire production from our manufacturing facility in Wittlich, Germany to other manufacturing facilities in EMEA. Net prior year plan charges for the three and six months ended June 30, 2016 include charges of $3 million and $9 million, respectively, for associate severance and idle plant costs related to the closure of one of our manufacturing facilities in Amiens, France.

Net charges for the three and six months ended June 30, 2017 included reversals of $1 million and $2 million, respectively, for actions no longer needed for their originally intended purposes. Ongoing rationalization plans had approximately $595 million in charges incurred prior to 2017 and approximately $80 million is expected to be incurred in future periods.

Approximately 300 associates will be released under new plans initiated in 2017, of which approximately 50 were released through June 30, 2017. In the first six months of 2017, approximately 200 associates were released under plans initiated in prior years. In July 2017, in connection with the closure of our tire manufacturing facility in Philippsburg, Germany, approximately 600 associates were released, and approximately 1,100 associates remain to be released under all ongoing rationalization plans.

Approximately 850 former associates of the closed Amiens, France manufacturing facility have asserted wrongful termination or other claims against us. Refer to Note to the Consolidated Financial Statements No. 11, Commitments and Contingent Liabilities, in this Form 10-Q.

Accelerated depreciation charges for the three and six months ended June 30, 2017 primarily related to the closure of our tire manufacturing facility in Philippsburg, Germany. Accelerated depreciation charges for the three and six months ended June 30, 2016 primarily related to the closure of our Wolverhampton, U.K. mixing and retreading facility. Asset write-off and accelerated depreciation charges for all periods were recorded in CGS.