NOTE G – RESTRUCTURING-RELATED ACTIVITIES

2019 Restructuring Plan

On November 15, 2018, the Board of Directors approved, and we committed to a new global restructuring program (the 2019 Restructuring Plan). The 2019 Restructuring Plan is intended to support our effort to improve operating performance and meet anticipated market demands by ensuring that we are appropriately structured and resourced to deliver sustainable value to patients and customers. Key activities under the 2019 Restructuring Plan include supply chain network optimization intended to maximize our global manufacturing and distribution network capacity and building functional capabilities that support business growth. These activities are expected to be initiated in 2019, with the majority of activity expected to be complete by the end of 2021.

The following table provides a summary of our estimates of total pre-tax charges associated with the 2019 Restructuring Plan by major type of cost:



Type of Cost	Total Estimated Amount Expected to be Incurred
Restructuring charges:
Termination benefits	$75 million to $100 million
Other (1)	$25 million to $50 million
Restructuring-related expenses:
Other (2)	$100 million to $150 million
	$200 million to $300 million


(1)	Consists primarily of consultant fees and costs associated with contractual cancellations.


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

Approximately $180 million to $280 million of these charges are expected to result in cash outlays.

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, 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 expand 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 and the majority of the costs associated with this Plan were completed 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 total pre-tax charges 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 the restructuring and restructuring-related charges (credits) by major type and line item within our accompanying consolidated statements of operations (in millions):



Year Ended December 31, 2018	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges	$	32	$	—	$	4	$	36
Restructuring-related expenses:
Cost of products sold	—		47		—		47
Selling, general and administrative expenses	—		—		12		12
	—		47		12		59
	$	32	$	47	$	16	$	96



Year Ended December 31, 2017	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges	$	25	$	—	$	12	$	37
Restructuring-related expenses:
Cost of products sold	—		45		—		45
Selling, general and administrative expenses	—		—		13		13
	—		45		13		58
	$	25	$	45	$	25	$	95



Year Ended December 31, 2016	Termination Benefits		Transfer Costs		Other		Total
Restructuring charges	$	19	$	—	$	9	$	28
Restructuring-related expenses:
Cost of products sold	—		34		—		34
Selling, general and administrative expenses	—		—		16		16
	—		34		16		50
	$	19	$	34	$	25	$	78

Expenses in 2016 include costs associated with the 2016 Restructuring Plan and expenses associated with other substantially completed plans.

The following table presents cumulative restructuring and restructuring-related charges incurred as of December 31, 2018, related to our 2016 Restructuring Plan by major type:



(in millions)	2016 Restructuring Plan
Termination benefits	$	81
Other (1)	20
Total restructuring charges	100
Transfer costs	107
Other (2)	28
Restructuring-related charges	136
	$	236


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


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

Cash payments associated with our 2016 Restructuring Plan were made using cash generated from operations and are comprised of the following:



(in millions)	2016 Restructuring Plan
Year Ended December 31, 2018
Termination benefits	$	32
Transfer costs	47
Other	20
	$	100