The Company views its restructuring and cost reduction activities as part of its operating principles to provide greater visibility in achieving its long-term profit growth targets. Initiatives undertaken are currently expected to recover cash implementation costs within a 3 to 5-year period of completion. Upon completion (or as each major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced depreciation.

As of the end of 2019, the Company has completed implementation of all Project K initiatives. Total project charges, after-tax cash costs and annual savings delivered by Project K were in line with expectations.

Since inception, Project K has reduced the Company’s cost structure, and provided enduring benefits, including an optimized supply chain infrastructure, an efficient global business services model, a global focus on categories, increased agility from a more efficient organization design, and improved effectiveness in go-to-market models. These benefits have strengthen existing businesses in core markets, increased growth in developing and emerging markets, and driven an increased level of value-added innovation.

The total program resulted in pre-tax charges, of approximately $1.6 billion, with after-tax cash costs, including incremental capital expenditures, of approximately $1.2 billion. Total project charges consist of asset-related costs of approximately $500 million which consists primarily of asset impairments, accelerated depreciation and other exit-related costs; employee-related costs of approximately $400 million which includes severance, pension and other termination benefits; and other costs of approximately $700 million which consists primarily of charges related to the design and implementation of global business capabilities and a more efficient go-to-market model.

Total pre-tax charges related to Project K impacted reportable segments as follows: North America (approximately 65%), Europe (approximately 21%), Latin America (approximately 4%), AMEA (approximately 6%), and Corporate (approximately 4%).

Since the inception of Project K, the Company recognized charges of $1,574 million that have been attributed to the program. The charges were comprised of $6 million being recorded as a reduction of revenue, $928 million being recorded in COGS, $807 million recorded in SGA and $(167) million recorded in OIE.

During 2019, the Company announced a reorganization plan for the European reportable segment designed to simplify the organization, increase organizational efficiency, and enhance key processes. The overall project is expected to be substantially completed by the end of fiscal year 2020.

The project is expected to result in cumulative pretax net charges of approximately $40 million, including certain non-cash credits. Cash costs are expected to be approximately $50 million. The total expected charges will include

severance and other termination benefits and charges related to relocation, third party legal and consulting fees, and contract termination costs.

The Company recorded total net charges of $38 million related to this initiative during 2019, with $43 million recorded in SG&A expense and $(5) million recorded in OIE.

Also during 2019, the Company announced a reorganization plan which primarily impacts the North America reportable segment. The reorganization plan is designed to simplify the organization that supports the remaining North America reportable segment after the divestiture and related transition. The overall project is expected to be substantially completed by the end of fiscal year 2020.

The overall project is expected to result in cumulative pretax charges of approximately $30 million. Cash costs are expected to approximate the pretax charges. Total expected charges will include severance and other termination benefits and charges related to third party consulting fees.

During 2019, the Company recorded $113 million of charges associated with all restructuring programs. The charges were comprised of $35 million expense being recorded in Cost of Goods Sold (COGS), a $83 million expense recorded in Selling, General, Administrative (SG&A), and $(5) million recorded in Other (Income) Expense, net (OIE).

The Company recorded $143 million of costs in 2018 associated with all restructuring programs. The charges were comprised of $99 million being recorded in COGS, $74 million recorded SG&A and $(30) million recorded in OIE.

The Company recorded $263 million of costs in 2017 associated with all restructuring programs. The charges were comprised of $115 million expense being recorded in COGS, a $296 million expense recorded in SGA expense, and a $(148) million gain recorded in OIE.

The tables below provide the details for the charges incurred during 2019, 2018 and 2017 and program costs to date for all programs currently active as of December 28, 2019.



										Program costs to date
(millions)	2019			2018			2017			December 28, 2019
Employee related costs	$	49		$	63		$	177		$	646
Pension curtailment (gain) loss, net	(5		)	(30		)	(148		)	(172		)
Asset related costs	21			16			77			306
Asset impairment	—			14			—			169
Other costs	48			80			157			684
Total	$	113		$	143		$	263		$	1,633

										Program costs to date
(millions)	2019			2018			2017			December 28, 2019
North America	$	50		$	107		$	345		$	1,072
Europe	47			3			40			380
Latin America	15			15			9			57
AMEA	3			11			11			101
Corporate	(2		)	7			(142		)	23
Total	$	113		$	143		$	263		$	1,633

Employee related costs consisted of severance and pension charges. Pension curtailment (gain) loss consists of curtailment gains or losses that resulted from project initiatives. Asset impairments were recorded for fixed assets that were determined to be impaired and were written down to their estimated fair value. See Note 14 for more information. Asset related costs consist primarily of accelerated depreciation. Other costs incurred consist primarily of lease termination costs as well as third-party incremental costs related to the development and implementation of global business capabilities and a more efficient go-to-market model.

At December 28, 2019 total project reserves were $62 million, related to severance payments and other costs of which a substantial portion will be paid in 2020. The following table provides details for exit cost reserves.



(millions)	Employee Related Costs			Curtailment Gain Loss, net			Asset Impairment			Asset Related Costs			Other Costs			Total
Liability as of December 30, 2017	$	97		$	—		$	—		$	—		$	63		$	160
2018 restructuring charges	63			(30		)	14			16			80			143
Cash payments	(67		)	—			—			(9		)	(133		)	(209		)
Non-cash charges and other	—			30			(14		)	(6		)	—			10
Liability as of December 29, 2018	$	93		$	—		$	—		$	1		$	10		$	104
2019 restructuring charges	49			(5		)	—			21			48			113
Cash payments	(81		)	—			—			(10		)	(57		)	(148		)
Non-cash charges and other	—			5			—			(12		)	—			(7		)
Liability as of December 28, 2019	$	61		$	—		$	—		$	—		$	1		$	62