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Asset Impairment, Restructuring and Other Special Charges (Tables)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Total Charges Related to Asset Impairment, Restructuring and Other Special Charges

Components of asset impairment, restructuring and other special charges are as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Restructuring charges:
Severance and other costs ⁽¹⁾	$	0.6	$	(1.3)	$	1.0	$	(0.8)
Facility exit costs	0.1		—		0.7		—

Acquisition related charges:
Transaction and integration costs ⁽²⁾	111.1		33.1		187.4		53.5

Non-cash and other items:
Asset impairment ^{(3) (4)}	3.5		—		3.5		4.0
Asset write-down⁽⁵⁾	1.0		—		2.3		—
Gain on sale of fixed assets ⁽⁶⁾	—		—		(3.8)		—
Settlements and other ⁽⁷⁾	3.1		—		3.1		—

Total expense	$	119.4	$	31.8	$	194.2	$	56.7

⁽¹⁾For the three and six months ended June 30, 2020, these charges primarily related to the announced 2019 program to streamline operations in Speke, England as well as the remaining costs to close the Larchwood, Iowa facility.

⁽²⁾Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services. Integration costs represent internal and external incremental costs directly related to integrating acquired businesses, including the pending acquisition of Bayer's animal health business (e.g., expenditures for consulting, system and process integration, and product transfers), as well as stand-up costs related to the implementation of new systems, programs, and processes due to the Separation from Lilly.

⁽³⁾Asset impairment charges for the three and six months ended June 30, 2020 related to the impairment of an in-process research and development asset resulting from a reassessment of geographic viability.

⁽⁴⁾Asset impairment charges for the six months ended June 30, 2019 related to an adjustment to fair value of intangible assets that were subject to product rationalization.

⁽⁵⁾Asset write-down expenses for the three and six months ended June 30, 2020 resulted from adjustments recorded to write assets classified as held and used down to their current fair value. These charges primarily related to fixed assets in Wusi, China in connection with the announced 2019 program to streamline operations.

⁽⁶⁾Represents a gain on the disposal from the sale of an R&D facility in Prince Edward Island, Canada, which was written down during the three months ended September 30, 2019 as part of the announced 2019 program to streamline operations.

⁽⁷⁾Charge primarily relates to a non-recurring litigation settlement for a matter that originated prior to the Separation.

Summary of Activity in Reserves

The following table summarizes the activity in our reserves established in connection with restructuring activities:


	Facility exit costs		Severance		Total
Balance at December 31, 2018	$	9.3	$	35.1	$	44.4
Charges	—		2.5		2.5
Reserve adjustments	—		(3.3)		(3.3)
Cash paid	(1.7)		(13.8)		(15.5)
Balance at June 30, 2019	$	7.6	$	20.5	$	28.1

Balance at December 31, 2019	$	5.4	$	15.5	$	20.9
Charges	0.7		1.7		2.4
Reserve adjustments	—		(0.7)		(0.7)
Cash paid	(1.2)		(12.6)		(13.8)
Balance at June 30, 2020	$	4.9	$	3.9	$	8.8