BUSINESS OPTIMIZATION CHARGES

3 Months Ended

Mar. 31, 2026

Restructuring and Related Activities [Abstract]

We are continuing to undertake actions to transform our cost structure and enhance operational efficiency. In recent years, these efforts have included restructuring the organization into verticalized segments, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions, some of which are still ongoing. We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $2 million through the completion of certain initiatives that are currently underway. We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies that arose as a result of the sale of our Kidney Care business, and we expect to incur additional restructuring charges and costs in future periods to implement business optimization programs. For segment reporting, business optimization charges are unallocated expenses.

During the three months ended March 31, 2026 and 2025, we recorded the following charges related to business optimization programs.


	Three Months Ended March 31,
(in millions)	2026		2025
Restructuring charges	$	61	$	44
Costs to implement business optimization programs1	7		1

Total business optimization charges	$	68	$	45

1Costs to implement business optimization programs for the three months ended March 31, 2026 and 2025, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. These costs were primarily included within cost of sales and SG&A expense.

During the three months ended March 31, 2026 and 2025, we recorded the following restructuring charges.


	Three months ended March 31, 2026
(in millions)	COGS		SG&A		R&D		Total
Employee termination costs	$	10	$	35	$	13	$	58
Contract termination and other costs	1		—		1		2
Asset write offs	—		1		—		1
Total restructuring charges	$	11	$	36	$	14	$	61


	Three months ended March 31, 2025
(in millions)	COGS		SG&A		R&D		Total
Employee termination costs	$	12	$	13	$	1	$	26

Asset write offs	1		17		—		18
Total restructuring charges	$	13	$	30	$	1	$	44

For the three months ended March 31, 2026 and 2025, $58 million and $25 million, respectively, of the restructuring charges reflected in the table above, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment.

The following table summarizes activity in the liability related to our restructuring initiatives.


(in millions)
Liability balance as of December 31, 2025	$	133
Charges	60
Payments	(48)
Reserve adjustments	—
Currency translation	(1)
Liability balance as of March 31, 2026	$	144

Substantially all of our restructuring liabilities as of March 31, 2026 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2026.