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 annually. In fiscal 2012, the Company initiated 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 approximately $5.5 billion in before-tax restructuring costs over a six year period (from fiscal 2012 through fiscal 2017), including costs incurred as part of the ongoing and incremental restructuring program. The program includes a non-manufacturing overhead enrollment reduction target of approximately 25% - 30% by the end of fiscal 2017.

Through March 31, 2017, the Company reduced non-manufacturing enrollment by approximately 26%. The reductions are enabled by the elimination of duplicate work, simplification through the use of technology and optimization of various functional and business organizations 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, asset-related costs to exit facilities and other costs. Through fiscal 2016, the Company incurred charges of approximately $4.9 billion. Approximately $2.3 billion of these charges were related to separations, $1.4 billion were asset-related costs and $1.2 billion were related to other restructuring-type costs.

For the three and nine month periods ended March 31, 2017, the Company incurred total restructuring charges of approximately $157 and $505, respectively. For the three and nine month periods ended March 31, 2017, $25 and $72 of these charges were recorded in SG&A, respectively. For the three and nine month periods ended March 31, 2017, $132 and $409 of these charges were recorded in Cost of products sold, respectively. The remainder of the charges were included in discontinued operations. The following table presents restructuring activity for the nine months ended March 31, 2017:



							Nine Months Ended March 31, 2017
	Accrual Balance June 30, 2016		Charges Previously Reported (Six Months Ended December 31, 2016)		Charges for the Three Months Ended March 31, 2017		Cash Spent ⁽¹⁾			Charges Against Assets			Accrual Balance March 31, 2017
Separations	$	243	$	96	$	43	$	(182	)	$	—		$	200
Asset-related costs	—		206		80		—			(286		)	—
Other costs	72		46		34		(104		)	—			48
Total	$	315	$	348	$	157	$	(286	)	$	(286	)	$	248


⁽¹⁾	Includes liabilities transferred to Coty related to our Beauty Brands divestiture.

Separation Costs

Employee separation charges for the three and nine month periods ended March 31, 2017 relate to severance packages for approximately 480 and 1,520 employees, respectively. Separations related to non-manufacturing employees were approximately 70 and 260 employees for the three and nine month periods ended March 31, 2017, respectively. The packages are predominantly voluntary and the amounts are calculated based on salary levels and past service periods. 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 18,590 employees, of which approximately 9,800 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 assets relate primarily to manufacturing consolidations and technology standardizations. 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, all 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:



	Three Months Ended March 31, 2017		Nine Months Ended March 31, 2017
Beauty	$	23	$	63
Grooming	14		31
Health Care	1		9
Fabric & Home Care	26		103
Baby, Feminine & Family Care	41		141
Corporate ⁽¹⁾	52		158
Total Company	$	157	$	505


⁽¹⁾	Corporate includes costs related to allocated overheads, including charges related to our Sales and Market Operations, Global Business Services and Corporate Functions activities, and costs related to discontinued operations from our Beauty Brands businesses.