9. 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 and November 2012, the Company made announcements regarding an incremental restructuring program as part of a productivity and cost savings plan to reduce costs in the areas of supply chain, research and development, marketing and overheads. The productivity and cost savings plan 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 in excess of $3.5 billion in before-tax restructuring costs over a five year period (from fiscal 2012 through fiscal 2016), including costs incurred as part of the ongoing and incremental restructuring program. The Company expects to incur approximately 50% of the costs under this plan by the end of fiscal 2013, with the remainder incurred in fiscal years 2014 through 2016.

The restructuring program is being executed across the Company's centralized organization as well as across virtually all of its Market Development Organizations (MDO) and Global Business Units (GBU). The restructuring program plans included an initial net reduction in non-manufacturing overhead personnel of approximately 5,700 by the end of fiscal 2013, which the company surpassed during the quarter ended March 31, 2013. The restructuring program includes plans for a further non-manufacturing overhead personnel reduction of approximately 2% - 4% annually from fiscal 2014 through fiscal 2016. 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 the Company's global footprint. In addition, the plan includes integration of newly acquired companies and the optimization of the supply chain and other manufacturing processes.

Restructuring costs incurred consist primarily of costs to separate employees and asset-related costs to exit facilities. The Company is also incurring other types of costs as outlined below. For the three-and nine-month periods ended March 31, 2013, the Company incurred charges of $180 million and $772 million, respectively. For the three-and nine-month periods ended March 31, 2013, approximately $110 million and $510 million of these charges were recorded in selling, general and administrative expense, respectively. The remainder is included in cost of products sold. Since the inception of this restructuring program, the Company has incurred charges of $1.8 billion. Approximately $1 billion of these charges were related to separations, $448 million were asset-related, and $358 million were related to other restructuring-type costs.

The following table presents restructuring activity for the nine months ended March 31, 2013:



							For the Nine Months Ended March 31, 2013
Amounts in millions	Accrual Balance June 30, 2012		Charges Previously Reported (Six Months Ended December 31, 2012)		Charges for the Three Months Ended March 31, 2013		Cash Spent		Charges Against Assets		Accrual Balance March 31, 2013
Separations	$	316	$	423	$	100	$	519	$	—	$	320
Asset-Related Costs	—		42		28				70		—
Other Costs	27		127		52		190				16
Total	$	343	$	592	$	180	$	709	$	70	$	336

Separation Costs

Employee separation charges for the three-and nine-month periods ended March 31, 2013, relate to severance packages for approximately 690 employees and 3,140 employees, respectively. Separations related to non-manufacturing overhead personnel were approximately 170 and 2,220 for the three and nine months ended March 31, 2013, respectively; these separations occurred primarily in North America and Western Europe. Severance costs related to voluntary separations are generally charged to earnings when the employee accepts the offer. Since its inception, the restructuring program has incurred separation charges related to approximately 6,440 employees, of which approximately 4,470 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 restructuring program. 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 are 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 March 31		Nine Months Ended March 31
Beauty	$	17	$	106
Grooming	10		46
Health Care	27		45
Fabric & Home Care	30		100
Baby Care and Family Care	22		65
Corporate⁽¹⁾	74		410
Total Company	$	180	$	772

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