Restructuring and Employee Severance

3 Months Ended

Sep. 30, 2013

The following table summarizes restructuring and employee severance costs relating to our restructuring activities:



	Three Months Ended September 30
(in millions)	2013 (3)		2012
Employee-related costs (1)	$	4	$	5
Facility exit and other costs (2)	7		—
Total restructuring and employee severance	$	11	$	5


(1)	Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods.


(2)	Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services.


(3)	Includes $1 million of employee-related costs and $5 million of facility exit and other costs related to the restructuring within our Medical segment described further below.

On January 30, 2013, we announced a restructuring plan within our Medical segment. Under this restructuring plan, among other things, we are moving production of procedure kits from our facility in Waukegan, Illinois to other facilities and selling property and consolidating office space in Waukegan, Illinois.

At this time, we estimate the total costs associated with this restructuring plan to be approximately $79 million on a pre-tax basis, of which $51 million was recognized in fiscal 2013 and $6 million was recognized during the three months ended September 30, 2013. Of the estimated $22 million remaining costs to be recognized through the end of fiscal 2014, approximately $8 million will be facility exit and other costs and $14 million will be an expected loss on disposal of the property in Waukegan, Illinois described above. We have evaluated this property and have determined that at September 30, 2013 it does not meet the criteria for classification as held for sale.

The following table summarizes activity related to liabilities associated with restructuring and employee severance:



(in millions)	Employee- Related Costs			Facility Exit and Other Costs			Total
Balance at June 30, 2013	$	55		$	2		$	57
Additions	7			—			7
Payments and other adjustments	(15		)	(1		)	(16		)
Balance at September 30, 2013	$	47		$	1		$	48

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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