Restructuring

During the second half of 2014, we initiated a restructuring plan to invest in continuing innovation and the launch of our new pipeline molecules, while improving our cost structure. As part of the plan, we are closing our facilities in Washington State and Colorado and reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at other locations.

We continue to estimate that $935 million to $1,035 million of pre-tax charges will be incurred in connection with our restructuring plan, including: (i) separation and other headcount-related costs of $535 million to $585 million with respect to staff reductions, and (ii) asset-related charges of $400 million to $450 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. A total of $478 million of separation and other headcount-related costs and $235 million of asset-related charges were incurred through June 30, 2015.

During the three and six months ended June 30, 2015, we incurred $63 million and $155 million, respectively, of restructuring costs. We expect that most of the remaining estimated costs, as discussed above, will be incurred during the remainder of 2015 to support our ongoing transformation and process improvement efforts.

The following tables summarize recorded charges related to the restructuring plan by type of activity and the locations recognized within the Condensed Consolidated Statements of Income (in millions):



	Three months ended June 30, 2015
	Separation costs		Asset impairments		Accelerated depreciation		Other		Total
Cost of sales	$	—	$	—	$	13	$	2	$	15
Research and development	—		—		7		11		18
Selling, general and administrative	—		—		5		15		20
Other	7		—		—		3		10
Total	$	7	$	—	$	25	$	31	$	63



	Six months ended June 30, 2015
	Separation costs		Asset impairments		Accelerated depreciation		Other		Total
Cost of sales	$	—	$	—	$	26	$	3	$	29
Research and development	—		—		21		14		35
Selling, general and administrative	—		—		6		18		24
Other	55		—		—		12		67
Total	$	55	$	—	$	53	$	47	$	155

Asset impairment and accelerated depreciation charges were recognized in connection with our decision to exit Boulder and Longmont, Colorado, Bothell and Seattle, Washington and the consolidation of facilities in Thousand Oaks, California. The decision to close these manufacturing and research and development (R&D) facilities was based principally on optimizing the utilization of our sites in the United States, which includes an expansion of our presence in the key U.S. biotechnology hubs of South San Francisco, California and Cambridge, Massachusetts.

The following table summarizes the charges (excluding non-cash items) and payments related to the restructuring plan (in millions):



	During the six months ended June 30, 2015
	Separation costs			Other			Total
Restructuring liabilities as of December 31, 2014	$	221		$	23		$	244
Expense	56			39			95
Payments	(145		)	(35		)	(180		)
Restructuring liabilities as of June 30, 2015	$	132		$	27		$	159