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

12 Months Ended

Dec. 31, 2024

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 and Divestitures

In connection with our cost-reduction/productivity initiatives, we typically incur restructuring costs and charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs and charges 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, divestitures and cost-reduction/productivity initiatives are as follows:

	Year Ended December 31,
(MILLIONS OF DOLLARS)	2024		2023		2022
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs(a)	$	1	$	7	$	5
Divestiture-related costs(b)	16		—		—
Restructuring charges(c)(d):
Employee termination costs	36		41		3
Asset impairment charges	—		1		2
Exit costs	—		4		1
Total Restructuring charges and certain acquisition and divestiture-related costs	$	53	$	53	$	11

(a)    Acquisition-related 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 as well as transaction costs that represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.

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

(c)    The restructuring charges for the year ended December 31, 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 year ended December 31, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.

    The restructuring charges for the year ended December 31, 2022 primarily relates to employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets, as well as asset impairment charges primarily related to the consolidation of manufacturing sites in China.

(d)    The restructuring charges are associated with the following:

•For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.

•For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million and International of $21 million.

•For the year ended December 31, 2022, Manufacturing/research/corporate of $2 million and International of $4 million.

The components of, and changes in, our restructuring accruals are as follows:

	Employee		Asset
	Termination		Impairment		Exit
(MILLIONS OF DOLLARS)	Costs		Charges		Costs		Accrual
Balance, December 31, 2021	$	23	$	—	$	2	$	25
Provision	3		2		1		6
Non-cash activity	—		(2)		—		(2)
Utilization and other(a)	(12)		—		(2)		(14)
Balance, December 31, 2022	$	14	$	—	$	1	$	15
Provision	41		1		4		46
Non-cash activity	—		(1)		—		(1)
Utilization and other(a)	(23)		—		(2)		(25)
Balance, December 31, 2023(b)	$	32	$	—	$	3	$	35
Provision	43		—		—		43
Reserve adjustment	(7)		—		—		(7)
Utilization and other(a)	(42)		—		(1)		(43)
Balance, December 31, 2024(b)(c)	$	26	$	—	$	2	$	28

(a)    Includes adjustments for foreign currency translation.

(b)    At December 31, 2024 and 2023, included in Accrued Expenses ($26 million) and Other noncurrent liabilities ($2 million and $9 million, respectively).

(c)    Includes contractual obligations of $28 million, of which payments are expected to be approximately $26 million in 2025 and $2 million thereafter.