Business Restructuring

The Company records restructuring liabilities that represent charges incurred in connection with consolidations of certain operations, including operations from acquisitions, as well as headcount reduction programs. These charges consist primarily of severance costs and asset write-downs.

In December 2016, PPG’s Board of Directors approved a business restructuring program which includes actions necessary to reduce its global cost structure. The program is focused on certain regions and end-use markets where business conditions are the weakest, as well as reductions in production capacity and various global functional and administrative costs. A pre-tax restructuring charge of $197 million was recorded in December 2016, of which approximately $140 million represents employee severance and other cash costs and nearly $60 million is related to the write-down of certain assets held for sale and other non-cash costs. In addition to the aforementioned pre-tax charge and cash costs, approximately $15 million of incremental restructuring-related cash costs are expected during 2017 for certain items that are required to be expensed on an as-incurred basis. The restructuring actions will result in the net reduction of approximately 1,700 positions, with substantially all actions to be completed in the first quarter of 2018. The actions have anticipated annual savings of approximately $125 million once fully implemented. The company expects to achieve $40 million to $50 million in savings in 2017 with the remainder of the projected annual savings to be substantially realized by year-end 2018.

The following table summarizes the 2016 restructuring charges and the reserve activity since inception and through the year ended December 31, 2016:



($ in millions, except no. of employees)	Severance and Other Costs			Asset Write-offs			Total Reserve			Employees Impacted
Performance Coatings	$	77		$	45		$	122		1,069
Industrial Coatings	52			14			66			804
Glass	2			—			2			153
Corporate	7			—			7			85
Total 2016 restructuring charge	$	138		$	59		$	197		2,111
Activity to date	(6		)	(59		)	(65		)	(40	)
December 31, 2016	$	132		$	—		$	132		2,071

In April 2015, the Company approved a business restructuring plan which includes actions necessary to achieve cost synergies related to recent acquisitions. In addition, the program aimed to further align employee levels and production capacity in certain businesses and regions with current product demand, as well as reductions in various global administrative functions. A pre-tax restructuring charge of $140 million was recorded in April 2015, of which about 85% represents employee severance and other cash costs. The restructuring actions impacted approximately 1,800 employees and were substantially complete as of December 31, 2016.

The following table summarizes the 2015 restructuring charges and the reserve activity since inception and through the year ended December 31, 2016:



($ in millions, except no. of employees)	Severance and Other Costs			Asset Write-offs			Total Reserve			Employees Impacted
Performance Coatings	$	71		$	6		$	77		1,259
Industrial Coatings	42			13			55			534
Glass	4			—			4			33
Corporate	4			—			4			27
Total 2015 restructuring charge	$	121		$	19		$	140		1,853
2015 Activity	(32		)	(19		)	(51		)	(1,047	)
Foreign currency impact	(2		)	—			(2		)	—
December 31, 2015	$	87		$	—		$	87		806
2016 Activity	(85		)	—			(85		)	(806	)
Foreign currency impact	(2		)	—			(2		)	—
December 31, 2016	$	—		$	—		$	—		—