Exit and Realignment Costs

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Exit and Realignment Costs

Note 4—Exit and Realignment Costs

We incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain facilities, information technology (IT) strategic initiatives and other strategic actions. These charges also include costs associated with our Operating Model Realignment Program, which include professional fees, severance and other costs to streamline functions and processes. These amounts are excluded from our segments’ operating income.

During the three months ended September 30, 2024 and 2023, exit and realignment charges, net of $28.9 million and $30.2 million included $27.1 million and $27.8 million in charges under our Operating Model Realignment Program and IT strategic initiatives. During the nine months ended September 30, 2024 and 2023, exit and realignment charges, net included $90.2 million and $70.6 million in charges under our Operating Model Realignment Program and IT strategic initiatives. Exit and realignment charges, net for the nine months ended September 30, 2024 also included a gain of $7.4 million associated with the sale of our corporate headquarters. During the nine months ended September 30, 2024 and 2023, exit and realignment charges, net were $85.5 million and $74.8 million. We may incur material future costs relating to certain exit and realignment actions, which remain underway and we are not able to reasonably estimate.

The following table summarizes the activity related to exit and realignment cost accruals, which are classified as other current liabilities in our consolidated balance sheets, through September 30, 2024 and 2023:

	Total
Accrued exit and realignment costs, December 31, 2023	$	20,047
Provision for exit and realignment activities:
Severance		184
Professional fees		25,625
IT strategic initiatives - related costs		1,241
Other		1,252
Cash payments		(11,728)
Accrued exit and realignment costs, March 31, 2024		36,621
Provision for exit and realignment activities:
Severance		(205)
Professional fees		19,182
IT strategic initiatives - related costs		4,809
Other		3,606
Cash payments		(33,908)
Accrued exit and realignment costs, June 30, 2024		30,105
Provision for exit and realignment activities:
Severance		1,770
Professional fees		15,013
IT strategic initiatives - related costs		4,476
Vendor contract and lease termination costs		2,728
Other		3,481
Cash payments		(28,450)
Accrued exit and realignment costs, September 30, 2024	$	29,123
Accrued exit and realignment costs, December 31, 2022	$	969
Provision for exit and realignment activities:
Severance		4,127
Professional fees		9,012
IT strategic initiatives - related costs		123
Vendor contract and lease termination costs		1,824
Other		588
Cash payments		(5,546)
Accrued exit and realignment costs, March 31, 2023		11,097
Provision for exit and realignment activities:
Severance		505
Professional fees		22,953
IT strategic initiatives - related costs		3,374
Vendor contract and lease termination costs		1,707
Other		424
Cash payments		(20,196)
Accrued exit and realignment costs, June 30, 2023		19,864
Provision for exit and realignment activities:
Severance		2,361
Professional fees		16,800
IT strategic initiatives - related costs		3,256
Vendor contract and lease termination costs		4,300
Other		2,164
Cash payments		(26,311)
Accrued exit and realignment costs, September 30, 2023	$	22,434

In addition to the exit and realignment accruals in the preceding table and the $7.4 million gain associated with the sale of our corporate headquarters, we also incurred $1.4 million and $9.8 million of costs that were expensed as incurred for the three and nine months ended September 30, 2024, which were primarily related to accelerated depreciation of certain assets held in our Products & Healthcare Services segment. We incurred $1.3 million of costs that were expensed as incurred for the three and nine months ended September 30, 2023, which primarily related to charges associated with a lease termination.