8. Restructuring Program

The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization. Before-tax costs incurred under the ongoing program have generally ranged from $250 to $500 million annually. In February 2012, the Company announced a productivity and cost savings plan to reduce costs in the areas of supply chain, research and development, marketing and overheads. The program was designed to accelerate cost reductions by streamlining management decision making, manufacturing and other work processes in order to help fund the Company's growth strategy. The Company expects to incur approximately $3.5 billion in before-tax restructuring costs over a four year period (from fiscal 2012 through fiscal 2015), including costs incurred as part of this plan and the ongoing plan. The Company expects to incur more than half of the costs under this plan by the end of fiscal 2013, with the remainder incurred in fiscal years 2014 and 2015.

The restructuring activities are being executed across the Company's centralized organization as well as across virtually all of its MDO and GBU organizations. The announced restructuring activities include a plan for a net reduction in non-manufacturing overhead personnel of approximately 5,700 by the end of fiscal 2013. This is being done via the elimination of duplicate work, simplification through the use of technology, and the optimization of the various functional organizations, the number of business units and of the Company's global footprint. In addition, the plan includes integration of newly acquired companies, optimization of the supply chain and other manufacturing processes.

Costs incurred under the plan consist primarily of costs to separate employees and asset-related costs to exit facilities. The Company is also incurring other types of costs outlined below as a direct result of the plan. For the three months ended September 30, 2012, the Company incurred charges of $354 million. Approximately $236 million of these charges were recorded in selling, general and administrative expense. The remainder is included in cost of products sold. Since the inception of the program, the Company has incurred charges of $1.4 billion. Approximately $785 million of these charges were related to separations, $399 million were related to assets, and $222 million were related to other restructuring-type costs.

The following table presents restructuring activity for the three months ended September 30, 2012:



			For the Three Months Ended September 30, 2012
Amounts in millions	Accrual Balance June 30, 2012		Charges		Cash Spent		Charges Against Assets		Reserve Balance September 30, 2012
Separations	$	316	$	290	$	171	$	—	$	435
Asset-Related Costs	—		21		—		21		—
Other Costs	27		43		39		—		31
Total	$	343	$	354	$	210	$	21	$	466

Separation Costs

Employee separation charges for the three months ended September 30, 2012 relate to severance packages for approximately

1,800 employees, of which approximately 1,690 are non-manufacturing overhead personnel. These separations occurred primarily in North America and Western Europe. The packages are predominantly voluntary, and the amounts are calculated based on salary levels and past service. Severance costs related to voluntary separations are generally charged to earnings when the employee accepts the offer. Since its inception, the program has incurred separation charges related to approximately 5,100 employees, of which approximately 3,940 are non-manufacturing overhead personnel.

Asset-Related Costs

Asset-related costs consist of both asset write-downs and accelerated depreciation. Asset write-downs relate to the establishment of a new fair value basis for assets held-for-sale or disposal. These assets were written down to the lower of their current carrying basis or amounts expected to be realized upon disposal, less minor disposal costs. Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal service period. These shortened-lived assets relate primarily to manufacturing consolidations and technology standardization. The asset-related charges will not have a significant impact on future depreciation charges.

Other Costs

Other restructuring-type charges are incurred as a direct result of the productivity and cost savings plan. Such charges primarily include employee relocation related to separations and office consolidations, termination of contracts related to supply chain redesign and the cost to change internal systems and processes to support the underlying organizational changes.

Consistent with our historical policies for ongoing restructuring-type activities, the restructuring program charges will be funded by and included within Corporate for both management and segment reporting. Accordingly, 100% of the charges under the program are included within the Corporate reportable segment. However, for informative purposes, the following table summarizes the total restructuring costs related to our reportable segments.



Amounts in millions	Three Months Ended September 30, 2012
Beauty	$	66
Grooming	19
Health Care	12
Fabric & Home Care	31
Baby Care and Family Care	25
Corporate⁽¹⁾	201
Total Company	$	354

⁽¹⁾ Corporate includes costs related to allocated overheads, including charges related to our MDO, GBS and Corporate Functions activities