Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

6. Restructuring Charges and Other Costs Associated with Acquisitions, Cost-Reduction and Productivity Initiatives

In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems. In connection with our acquisition activity, we typically incur costs and charges associated with executing the transactions, integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the consolidated company, which may include charges related to employees, assets and activities that will not continue in the consolidated company. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as information technology, shared services and corporate operations.

The components of costs incurred in connection with restructuring initiatives, acquisitions and cost-reduction/productivity initiatives are as follows:


	Three Months Ended
	March 31,
(MILLIONS OF DOLLARS)	2020		2019
Restructuring charges and certain acquisition-related costs:

Integration costs^(a)	$	6	$	1
Restructuring charges^(b):
Employee termination costs	3		4



Total Restructuring charges and certain acquisition-related costs	$	9	$	5

^(a) Integration costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs.

^(b) The restructuring charges for the three months ended March 31, 2020 primarily relate to CEO transition-related costs which are associated with Manufacturing/research/corporate.

The restructuring charges for the three months ended March 31, 2019 primarily relate to the acquisition of Abaxis which are associated with Manufacturing/research/corporate.



(MILLIONS OF DOLLARS)	Accrual^(a)
Balance, December 31, 2019^(b)	$	45
Provision	3

Utilization and other^(c)	(7)

Balance, March 31, 2020^(b)	$	41

^(a) Changes in our restructuring accrual represents employee termination costs.

^(b)At March 31, 2020, and December 31, 2019, included in Accrued expenses ($19 million and $23 million, respectively) and Other noncurrent liabilities ($22 million and $22 million, respectively).