RESTRUCTURING PROGRAM

3 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

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 2017, the Company announced specific elements of a multi-year productivity and cost savings plan to further reduce costs in the areas of supply chain, certain marketing activities and overhead expenses. During fiscal years 2018 and 2019, the Company expects to incur approximately $1.2 billion in before-tax restructuring costs under the plan. This program is expected to result in meaningful incremental non-manufacturing enrollment reductions, along with further 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. For the three month period ended September 30, 2017, the Company incurred total restructuring charges of approximately $157. Approximately $39 of these charges were recorded in SG&A and $118 of these charges were recorded in Cost of products sold. The following table presents restructuring activity for the three months ended September 30, 2017:

			Three Months Ended September 30, 2017
	Accrual Balance June 30, 2017		Charges		Cash Spent			Charges Against Assets			Accrual Balance September 30, 2017
Separations	$	228	$	46	$	(34	)	$	—		$	240
Asset-related costs	—		86		—			(86		)	—
Other costs	49		25		(21		)	—			53
Total	$	277	$	157	$	(55	)	$	(86	)	$	293

Separation Costs

Employee separation charges for the three month period ended September 30, 2017 relate to severance packages for approximately 480 employees. These severance packages included approximately 140 non-manufacturing employees. The packages were predominantly voluntary and the amounts were 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.

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 asset removal and termination of contracts related to supply chain optimization.

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 September 30, 2017
Beauty	$	20
Grooming	6
Health Care	4
Fabric & Home Care	30
Baby, Feminine & Family Care	51
Corporate (1)	46
Total Company	$	157

⁽¹⁾ 

Corporate includes costs related to allocated overheads, including charges related to our Sales and Market Operations, Global Business Services and Corporate Functions activities.