Restructuring and Other Costs (Income), Net

9 Months Ended

Sep. 26, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Other Costs, Net [Text Block]

Note 12.    Restructuring and Other Costs (Income), Net

In the first nine months of 2020 the company recorded transaction/integration costs (including reimbursement thereof) related to recent/terminated acquisitions, continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, and, to a lesser extent, impairment of acquired technology in development and non-cash charges for writedowns of fixed assets to estimated disposal value in connection with the consolidation of commercial production operations in the U.S. In the first nine months of 2020, severance actions associated with facility consolidations and cost reduction measures affected less than 1% of the company’s workforce.

As of October 30, 2020, the company has identified restructuring actions that will result in additional charges of approximately $45 million, primarily in 2020 and 2021, and expects to identify additional actions during 2020 which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

During the third quarter of 2020, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses		Restructuring and Other Costs, Net		Total
Life Sciences Solutions	$	—	$	(8)	$	10	$	2
Analytical Instruments	—		—		3		3
Specialty Diagnostics	—		(50)		2		(48)
Laboratory Products and Services	1		—		1		2
Corporate	—		3		1		4
	$	1	$	(55)	$	17	$	(37)

During the first nine months of 2020, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses		Restructuring and Other Costs, Net		Total
Life Sciences Solutions	$	—	$	(8)	$	11	$	3
Analytical Instruments	—		—		22		22
Specialty Diagnostics	—		(4)		8		4
Laboratory Products and Services	5		2		20		27
Corporate	—		3		6		9
	$	5	$	(7)	$	67	$	65

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

Life Sciences Solutions

In the first nine months of 2020, the Life Sciences Solutions segment recorded $3 million of net restructuring and other charges. The segment recorded $11 million of restructuring and other costs, net, primarily charges for impairment of acquired technology in development. The segment also recorded $8 million of credits to selling, general, and administrative expense for changes in estimates of contingent acquisition consideration.

Analytical Instruments

In the first nine months of 2020, the Analytical Instruments segment recorded $22 million of net restructuring and other charges, primarily for employee severance associated with headcount reductions in Europe, China, and the U.S., and, to a lesser extent, abandoned facility costs.

Specialty Diagnostics

In the first nine months of 2020, the Specialty Diagnostics segment recorded $4 million of net restructuring and other charges, principally charges for third-party transaction costs (including reimbursement thereof) for a terminated acquisition.

Laboratory Products and Services

In the first nine months of 2020, the Laboratory Products and Services segment recorded $27 million of net restructuring and other charges, primarily for employee severance at businesses streamlining operations and for writedowns of fixed assets to estimated disposal value in connection with the consolidation of commercial production operations in the U.S.

Corporate

In the first nine months of 2020, the company recorded $9 million of net restructuring and other costs for severance at its corporate operations and, to a lesser extent, charges to selling, general, and administrative expense for product liability litigation.

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

(In millions)	Total (a)
Balance at December 31, 2019	$	34
Net restructuring charges incurred in 2020 (b)	43
Payments	(46)
Currency translation	1
Balance at September 26, 2020	$	32

(a)The movements in the restructuring liability principally consist of severance and other costs such as 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)Excludes $24 million of charges for impairment of acquired technology in development, fixed asset writedowns and costs associated with environmental remediation at abandoned / previously owned facilities.

The company expects to pay accrued restructuring costs primarily through 2021.