Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures

6. Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures

In connection with our cost-reduction/productivity initiatives, we typically incur restructuring charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs associated with executing the transactions. Acquisition activity may also include integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the company, which may include charges related to employees, assets and activities that will not continue in the company. Divestiture activity may also include costs to separate the divested operations, which may include expenditures for consulting and the disintegration of systems and processes, transfer costs, and restructuring charges which may include charges related to employees, assets and activities that will not continue in the company's ongoing operations. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as business technology, shared services and corporate operations.

The components of costs incurred in connection with restructuring initiatives, acquisitions and divestitures are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2024		2023		2024		2023
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs	$	—	$	3	$	1	$	7
Divestiture-related costs(a)	7		—		11		—
Restructuring charges, net(b):
Employee termination costs, net	(2)		8		39		33
Asset impairment charges	—		1		—		1
Exit costs	—		4		—		4
Total Restructuring charges and certain acquisition and divestiture-related costs	$	5	$	16	$	51	$	45

(a)    Divestiture-related costs consisted of costs related to the planned sale of our medicated feed additive product portfolio, certain water soluble products and related assets.

(b) The restructuring charges for the nine months ended September 30, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.

The restructuring charges for the three and nine months ended September 30, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.

The change in our restructuring accrual is as follows:

(MILLIONS OF DOLLARS)	Accrual
Balance, December 31, 2023(a)	$	35
Provision	46
Reserve adjustment	(7)
Utilization and other(b)	(28)
Balance, September 30, 2024(a)	$	46

(a)     At September 30, 2024 and December 31, 2023, included in Accrued expenses ($44 million and $26 million, respectively) and Other noncurrent liabilities ($2 million and $9 million, respectively).

(b)     Includes adjustments for foreign currency translation.