PRODUCTIVITY IMPROVEMENT AND RESTRUCTURING INITIATIVES

During 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in its Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee severance and related charges. Substantially all restructuring activities related to this discontinued product line were completed in 2017.

In addition to the molecular diagnostic product line discontinuation noted above, during 2017 the Company recorded pretax productivity improvement and restructuring related charges of $83 million, for a total of $159 million of pretax productivity improvement and restructuring related charges in 2017. Substantially all the activities initiated in 2017 were completed by December 31, 2017 resulting in $78 million of employee severance and related charges, $81 million of facility exit and other related charges (including noncash charges for the impairment of certain technology-related intangibles as well as related inventory and property, plant and equipment with no further use). The Company expects substantially all cash payments associated with remaining termination benefits will be paid during 2018. During 2016, the Company recorded pretax productivity improvement and restructuring related charges totaling $152 million. Substantially all of the planned activities related to the 2016 plans were completed by December 31, 2016 resulting in approximately $111 million of employee severance and related charges and $30 million of facility exit and other related charges and $11 million related to an impairment of a trade name within the Dental segment. During 2015, the Company recorded pretax productivity improvement and restructuring related charges totaling $98 million. Substantially all of the planned activities related to the 2015 plans were completed by December 31, 2015 resulting in approximately $81 million of employee severance and related charges and $17 million of facility exit and other related charges.

Excluding the discontinuation of the molecular diagnostic product line, the nature of the Company’s productivity improvement and restructuring related activities initiated in 2017, 2016 and 2015 were broadly consistent throughout the Company’s reportable segments and focused on improvements in operational efficiency through targeted workforce reductions and facility consolidations and closures. These costs were incurred to position the Company to provide superior products and services to its customers in a cost efficient manner, and taking into consideration broad economic considerations.

In conjunction with the closing of facilities, certain inventory was written off as unusable in future operating locations. This inventory consisted primarily of component parts and raw materials, which were either redundant to inventory at the facilities being merged or were not economically feasible to relocate since the inventory was purchased to operate on equipment and tooling which was not being relocated. In addition, asset impairment charges have been recorded to reduce the carrying amounts of the long-lived assets that will be sold or disposed of to their estimated fair values. Charges for the asset impairment reduce the carrying amount of the long-lived assets to their estimated salvage value in connection with the decision to dispose of such assets.

Productivity improvement and restructuring related charges, including those relate to the discontinuation of the molecular diagnostics product line, recorded for the years ended December 31 by segment were as follows ($ in millions):



	2017		2016		2015
Life Sciences	$	25.4	$	40.5	$	27.5
Diagnostics	85.4		62.2		33.6
Dental	35.8		34.3		25.3
Environmental & Applied Solutions	12.5		15.4		11.1
Total	$	159.1	$	152.4	$	97.5

The table below summarizes the Company’s accrual balance and utilization by type of productivity improvement and restructuring costs associated with the 2017 and 2016 actions ($ in millions):



	Employee Severance and Related			Facility Exit and Related			Total
Balance, January 1, 2016	$	65.6		$	13.9		$	79.5
Costs incurred	111.0			41.4			152.4
Paid/settled	(131.3		)	(43.5		)	(174.8		)
Balance, December 31, 2016	45.3			11.8			57.1
Costs incurred	77.7			81.4			159.1
Paid/settled	(74.0		)	(75.9		)	(149.9		)
Balance, December 31, 2017	$	49.0		$	17.3		$	66.3

The productivity improvement and restructuring related charges incurred during 2017 include cash charges of $103 million and $56 million of noncash charges. The productivity improvement and restructuring related charges incurred during 2016 and 2015 include cash charges of $140 million and $94 million and $12 million and $4 million of noncash charges, respectively. These charges are reflected in the following captions in the accompanying Consolidated Statements of Earnings ($ in millions):



	2017		2016		2015
Cost of sales	$	38.0	$	25.4	$	31.9
Selling, general and administrative expenses	121.1		127.0		65.6
Total	$	159.1	$	152.4	$	97.5