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

9 Months Ended

Sep. 29, 2024

Restructuring and Related Activities [Abstract]

Schedule of Acquisitions and Cost-Reduction/Productivity Initiatives

The following summarizes costs and credits for acquisitions and cost-reduction/productivity initiatives:
	Three Months Ended				Nine Months Ended
(MILLIONS)	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
Restructuring charges/(credits):
Employee terminations	$	25	$	16	$	1,009	$	77
Asset impairments	111		40		177		45
Exit costs	82		15		145		44
Restructuring charges/(credits)(a)	217		71		1,331		165
Transaction costs(b)	—		5		5		14
Integration/pre-integration costs and other(c)	96		78		333		198
Restructuring charges and certain acquisition-related costs	313		155		1,669		377
Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net	2		—		7		(7)
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of operations as follows(d):
Cost of sales	6		5		11		27
Selling, informational and administrative expenses	2		—		5		—
Total additional depreciation––asset restructuring	8		5		16		28
Implementation costs recorded in our condensed consolidated statements of operations as follows(e):
Cost of sales	30		16		95		43
Selling, informational and administrative expenses	13		71		77		196
Research and development expenses	33		29		66		59
Total implementation costs	75		116		238		298
Total costs associated with acquisitions and cost-reduction/productivity initiatives	$	398	$	276	$	1,930	$	696

(a)Primarily represents cost-reduction initiatives. Amounts associated with our Biopharma segment: charges of $141 million for the three months ended September 29, 2024 (primarily including charges for our Realigning our Cost Base Program) and charges of $1.2 billion for the nine months ended September 29, 2024 (including charges of $1.3 billion for our Manufacturing Optimization Program and credits of $69 million for our Realigning our Cost Base Program). Amounts associated with our Biopharma segment for the three and nine months ended October 1, 2023 were not material.

(b)Represents external costs for banking, legal, accounting and other similar services.

(c)Represents external, incremental costs directly related to integrating acquired businesses, and in 2023 our then-proposed acquisition of Seagen, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs. In the nine months ended October 1, 2023, integration/pre-integration costs and other were mostly related to our acquisitions of Biohaven and Global Blood Therapeutics, Inc. and our then-proposed acquisition of Seagen.

(d)Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(e)Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

Schedule of Components and Changes in Restructuring Accruals

The following summarizes the components and changes in restructuring accruals:
(MILLIONS)	Employee Termination Costs		Asset Impairment Charges		Exit Costs		Accrual
Balance, December 31, 2023(a)	$	1,978	$	—	$	11	$	1,988
Provision/(credit)	1,009		177		145		1,331
Utilization and other(b)	(867)		(177)		(144)		(1,187)
Balance, September 29, 2024(c)	$	2,120	$	—	$	12	$	2,132

(a)Included in Other current liabilities ($1.3 billion) and Other noncurrent liabilities ($663 million).

(b)Other activity includes adjustments for foreign currency translation that are not material to our condensed consolidated financial statements.

(c)Included in Other current liabilities ($1.1 billion) and Other noncurrent liabilities ($1.1 billion).