Restructuring and Employee Severance

9 Months Ended

Mar. 31, 2014

The following tables summarize restructuring and employee severance costs related to our restructuring activities:



	Three Months Ended March 31
(in millions)	2014		2013
Employee-related costs (1)	$	2	$	29
Facility exit and other costs (2)	3		4
Total restructuring and employee severance	$	5	$	33



	Nine Months Ended March 31
(in millions)	2014		2013
Employee-related costs (1)	$	10	$	34
Facility exit and other costs (2)	15		5
Total restructuring and employee severance	$	25	$	39


(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.

On January 30, 2013, we announced a restructuring plan within our Medical segment. Under this restructuring plan, among other things, we have moved production of procedure kits from our facility in Waukegan, Illinois to other facilities, and we are selling property and consolidating office space in Waukegan, Illinois. We recognized restructuring costs of $1 million and $13 million related to this restructuring plan during the three and nine months ended March 31, 2014, respectively, which primarily consisted of facility exit and other costs. We recognized restructuring costs of $29 million related to this restructuring plan during both the three and nine months ended March 31, 2013, which consisted of both employee-related costs and facility exit and other costs.

We currently estimate the total costs associated with this restructuring plan to be approximately $77 million on a pre-tax basis, of which $51 million was recognized in fiscal 2013 and $21 million was recognized during the nine months ended March 31, 2014, including the loss to write down the property in Waukegan, Illinois as discussed in Note 4. The estimated $5 million remaining costs to be recognized primarily through the end of fiscal 2014 consist of facility exit and other costs.

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	17			1			18
Payments and other adjustments	(42		)	(2		)	(44		)
Balance at March 31, 2014	$	30		$	1		$	31

- 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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