NOTE F – RESTRUCTURING-RELATED ACTIVITIES

2016 Restructuring Plan

On June 6, 2016, our Board of Directors approved and we committed to a restructuring initiative (the 2016 Restructuring Plan). The 2016 Restructuring Plan is intended to develop global commercialization, technology and manufacturing capabilities in key growth markets and build on our Plant Network Optimization (PNO) strategy, which is intended to simplify our manufacturing plant structure by transferring certain production lines among facilities and expanding operational efficiencies in support of our operating income margin goals. Key activities under the 2016 Restructuring Plan include strengthening global infrastructure through evolving global real estate assets and workplaces, developing global commercial and technical competencies, enhancing manufacturing and distribution expertise in certain regions and continuing implementation of our PNO strategy. These activities were initiated in the second quarter of 2016. The majority of the costs associated with this Plan are expected to be incurred by the end of 2018. We revised the original estimate for the costs and savings associated with the program in the first quarter of 2018, as approved by the Board of Directors.

The following table provides a summary of our estimates of costs associated with the 2016 Restructuring Plan by major type of cost:



Type of cost	Total Estimated Amount Expected to be Incurred
Restructuring charges:
Termination benefits	$80 million to $90 million
Other (1)	$25 million to $50 million
Restructuring-related expenses:
Other (2)	$170 million to $185 million
	$275 million to $325 million


(1)	Consists primarily of consulting fees and costs associated with contract cancellations.


(2)	Comprised of other costs directly related to the 2016 Restructuring Plan, including program management, accelerated depreciation, fixed asset write-offs and costs to transfer product lines among facilities.

Approximately $250 million to $300 million of these charges are estimated to result in cash outlays.

The following presents these costs (credits) by major type and line item within our accompanying unaudited condensed consolidated statements of operations (in millions):



Three Months Ended September 30, 2018	Termination Benefits		Transfer Costs		Other			Total
Restructuring charges (credits)	$	6	$	—	$	(3	)	$	3
Restructuring-related expenses:
Cost of products sold	—		10		—			10
Selling, general and administrative expenses	—		—		2			2
	—		10		2			12
	$	6	$	10	$	(1	)	$	15



Three Months Ended September 30, 2017	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges (credits)	$	11	$	—	$	1	$	12
Restructuring-related expenses:
Cost of products sold	—		11		—		11
Selling, general and administrative expenses	—		—		3		3
	—		11		3		14
	$	11	$	11	$	4	$	26



Nine Months Ended September 30, 2018	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges (credits)	$	21	$	—	$	—	$	20
Restructuring-related expenses:
Cost of products sold	—		33		—		33
Selling, general and administrative expenses	—		—		5		5
	—		33		5		38
	$	21	$	33	$	5	$	58



Nine Months Ended September 30, 2017	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges (credits)	$	14	$	—	$	3	$	17
Restructuring-related expenses:
Cost of products sold	—		35		—		35
Selling, general and administrative expenses	—		—		9		9
	—		35		9		44
	$	14	$	35	$	12	$	61

The following table presents cumulative restructuring and restructuring-related charges as of September 30, 2018, by major type:



(in millions)
Termination benefits	$	69
Other (1)	15
Total restructuring charges	84
Transfer costs	93
Other (2)	21
Restructuring-related expenses	114
	$	199


(1)	Consists primarily of consulting fees and costs associated with contract cancellations.


(2)	Comprised of other costs directly related to our Restructuring Plan, including program management, accelerated depreciation, fixed asset write-offs and costs to transfer product lines among facilities.

Cash payments were made using cash generated from operations and are comprised of the following:



(in millions)
Nine Months Ended September 30, 2018
Termination benefits	$	26
Transfer costs	33
Other	16
	$	76

Program to Date
Termination benefits	$	53
Transfer costs	92
Other	26
	$	172

Our restructuring liability is primarily comprised of accruals for termination benefits. The following is a rollforward of the termination benefit liability, which is reported as a component of Accrued expenses included in our accompanying unaudited condensed consolidated balance sheets:



(in millions)
Accrued as of December 31, 2017	$	22
Charges (credits)	21
Cash payments	(26		)
Accrued as of September 30, 2018	$	17