Proctor and Gamble 2014 Annual Report Download - page 59

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The Procter & Gamble Company 57
Amounts in millions of dollars except per share amounts or as otherwise specified.
Separations
Asset-
Related
Costs Other Total
RESERVE
JUNE 30, 2012 $ 316 $ — $ 27 $ 343
Charges 595 109 252 956
Cash spent (615) — (252) (867)
Charges against
assets — (109) — (109)
RESERVE
JUNE 30, 2013 296 — 27 323
Charges 378 179 249 806
Cash spent (321) — (248) (569)
Charges against
assets — (179) — (179)
RESERVE
JUNE 30, 2014 353 — 28 381
Separation Costs
Employee separation charges for the years ended June 30,
2014 and 2013 relate to severance packages for
approximately 2,730 and 3,450 employees, respectively. For
the years ended June 30, 2014 and 2013, these severance
packages include approximately 1,640 and 2,390 non-
manufacturing employees, respectively. These separations
are primarily in North America and Western Europe. The
packages are predominantly voluntary and the amounts are
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. Since its inception, the restructuring program has
incurred separation charges related to approximately 9,480
employees, of which approximately 6,280 are non-
manufacturing overhead personnel.
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
standardization. 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 employee relocation related to separations and office
consolidations, termination of contracts related to supply
chain redesign and the cost to change internal systems and
processes to support the underlying organizational changes.
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
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:
Years Ended June 30 2014 2013
Beauty $ 83 $ 132
Grooming 20 50
Health Care 10 14
Fabric Care and Home Care 121 140
Baby, Feminine and Family Care 155 129
Corporate (1) 417 491
Total Company 806 956
(1) Corporate includes costs related to allocated overheads,
including charges related to our SMO, Global Business Services
and Corporate Functions activities and costs related to
discontinued operations from our divested Pet Care business.