Restructuring Program

6 Months Ended

Dec. 31, 2024

Restructuring and Related Activities [Abstract]

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. Consistent with our historical policies for restructuring-type activities, the restructuring program charges will be funded by and included within Corporate for management and segment reporting.

In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina and recorded approximately $0.8 billion after tax of incremental charges, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss). The total incremental restructuring charges incurred under the program beginning in the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $1.2 billion after tax.

For the three months ended December 31, 2024, the Company incurred total before tax charges of $47 including $28 in Costs of products sold, $25 in SG&A and $(5) in Other non-operating income/(expense). For the six months ended December 31, 2024, the Company incurred charges of $933 including $69 in Costs of products sold, $79 in SG&A and $785 in Other non-operating income/(expense).

The following table presents restructuring activity for the six months ended December 31, 2024:


	Separation Costs		Asset-Related Costs		Other Costs		Total
RESERVE JUNE 30, 2024	$	133	$	—	$	32	$	166
Costs incurred for the three months ended September 30, 2024	16		30		839		886
Costs incurred for the three months ended December 31, 2024	25		9		14		47
Costs incurred for the six months ended December 31, 2024	41		39		853		933

Costs paid/settled for the six months ended December 31, 2024	(58)		(39)		(823)		(921)
RESERVE DECEMBER 31, 2024	$	115	$	—	$	62	$	178

Separation Costs

Employee separation costs relate to severance packages that are primarily voluntary and the amounts calculated are based on salary levels and past service periods.

Asset-Related Costs

Asset-related costs consist of both asset write-downs and accelerated depreciation for manufacturing consolidations. Asset write-downs relate to the establishment of a new fair value basis for assets held-for-sale or for disposal. These assets are 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.

Other Costs

Other restructuring-type charges are incurred as a direct result of the restructuring plan. Such charges include accumulated foreign currency translation losses, asset removal and termination of contracts.