
Note 13.	Restructuring and Other Costs (Income), Net

Restructuring and other costs, net, in the first nine months of 2018 included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S. and Europe; third-party transaction/integration costs related to the acquisitions of Patheon and Gatan; sales of inventories revalued at the date of acquisition; and gains from the favorable results of litigation. In the first nine months of 2018, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of November 2, 2018, the company has identified restructuring actions that will result in additional charges of approximately $95 million, primarily in 2018 and 2019, which will be recorded when specified criteria are met, such as communication of benefit arrangements and abandonment of leased facilities.

Third Quarter of 2018

During the third quarter of 2018, the company recorded net restructuring and other income by segment as follows:



(In millions)	Cost of Revenues (Credits) Charges, Net			Selling, General and Administrative (Credits) Charges, Net			Restructuring and Other (Income) Costs, Net			Total

Life Sciences Solutions	$	—		$	(2	)	$	(47	)	$	(49	)
Analytical Instruments	—			4			18			22
Specialty Diagnostics	—			—			1			1
Laboratory Products and Services	(1		)	5			1			5
Corporate	—			(11		)	—			(11		)

	$	(1	)	$	(4	)	$	(27	)	$	(32	)

The principal components of net restructuring and other costs by segment are as follows:

Life Sciences Solutions

In the third quarter of 2018, the Life Sciences Solutions segment recorded $49 million of net restructuring and other income, principally for a gain on the resolution of litigation, partially offset by cash restructuring charges for employee severance and other costs associated with facility consolidations in the U.S.

Analytical Instruments

In the third quarter of 2018, the Analytical Instruments segment recorded $22 million of net restructuring and other charges. The segment recorded $4 million of charges to selling, general, and administrative expenses for third-party transaction costs related to the acquisition of Gatan. The segment also recorded $18 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

Laboratory Products and Services

In the third quarter of 2018, the Laboratory Products and Services segment recorded $5 million of net restructuring and other charges, principally charges to selling, general, and administrative expenses for third-party transaction/integration costs related to the acquisition of Patheon.

Corporate

In the third quarter of 2018, the company recorded $11 million of net restructuring and other income from favorable results of product liability litigation.

First Nine Months of 2018

During the first nine months of 2018, the company recorded net restructuring and other costs by segment as follows:



(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs, Net			Total

Life Sciences Solutions	$	—	$	(2	)	$	(24	)	$	(26	)
Analytical Instruments	2		3			39			44
Specialty Diagnostics	—		—			5			5
Laboratory Products and Services	5		16			14			35
Corporate	—		(10		)	1			(9		)

	$	7	$	7		$	35		$	49

The principal components of net restructuring and other costs by segment are as follows:

Life Sciences Solutions

In the first nine months of 2018, the Life Sciences Solutions segment recorded $26 million of net restructuring and other income, principally for a gain on the resolution of litigation, partially offset by charges for severance other costs associated with facility consolidations in the U.S.

Analytical Instruments

In the first nine months of 2018, the Analytical Instruments segment recorded $44 million of net restructuring and other charges. The segment recorded net charges to cost of revenues of $2 million for the sales of inventory revalued at the date of acquisition; $3 million of net charges to selling, general, and administrative expense, principally third-party transaction costs related to the acquisition of Gatan; and $39 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe, as well as abandoned facilities costs associated with the remediation and closure of a manufacturing facility in the U.S.

Specialty Diagnostics

In the first nine months of 2018, the Specialty Diagnostics segment recorded $5 million of net restructuring and other charges for severance and other costs associated with facility consolidations in the U.S. and Europe.

Laboratory Products and Services

In the first nine months of 2018, the Laboratory Products and Services segment recorded $35 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $5 million for the sales of inventory revalued at the date of acquisition, as well as $16 million of charges to selling, general, and administrative expenses for third-party transaction/integration costs related to the acquisition of Patheon. The segment also recorded $14 million of restructuring and other costs, primarily for employee severance, as well as hurricane response costs.

Corporate

In the first nine months of 2018, the company recorded $9 million of net restructuring and other income, principally income from favorable results of product liability litigation, partially offset by charges for severance at its corporate operations.

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs, net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.



(In millions)	Severance			Abandonment of Excess Facilities			Other (a)			Total

Balance at December 31, 2017	$	30		$	40		$	6		$	76
Costs incurred in 2018 (c)	47			29			13			89
Reserves reversed (b)	(7		)	(6		)	(1		)	(14		)
Payments	(29		)	(20		)	(13		)	(62		)
Currency translation	(1		)	—			—			(1		)

Balance at September 29, 2018	$	40		$	43		$	5		$	88


(a)	Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.


(b)	Represents reductions in cost of plans.


(c)	Excludes $40 million of income, net, primarily associated with litigation-related matters, hurricane response costs, and non-cash compensation due at an acquired business.

The company expects to pay accrued restructuring costs as follows: severance, employee-retention obligations and other costs, primarily through 2019; and abandoned-facility payments, over lease terms expiring through 2027.