XML 38 R14.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Restructuring | 12 Months Ended
--- | ---
Dec. 31, 2018
Restructuring and Related Activities [Abstract] |
Restructuring | Restructuring In 2010 and 2013, the Company commenced actions under global restructuring programs designed to streamline its cost structure. The actions under these programs include the elimination of positions in sales, administrative and headquarters organizations, as well as the sale or closure of certain manufacturing and research and development sites and the consolidation of office facilities. The Company also continues to reduce its global real estate footprint and improve the efficiency of its manufacturing and supply network. The Company recorded total pretax costs of $658 million in 2018, $927 million in 2017 and $1.1 billion in 2016 related to restructuring program activities. Since inception of the programs through December 31, 2018, Merck has recorded total pretax accumulated costs of approximately $14.1 billion and eliminated approximately 45,510 positions comprised of employee separations, as well as the elimination of contractors and vacant positions. The Company estimates that approximately two-thirds of the cumulative pretax costs are cash outlays, primarily related to employee separation expense. Approximately one-third of the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. The Company has substantially completed the actions under these programs. For segment reporting, restructuring charges are unallocated expenses. The following table summarizes the charges related to restructuring program activities by type of cost:
| Separation Costs |  | Accelerated Depreciation |  | Other |  | Total
Year Ended December 31, 2018 |  |  |  |  |  |  |
Cost of sales | $ | — |  |  | $ | 10 |  |  | $ | 11 |  |  | $ | 21 |
Selling, general and administrative | — |  |  | 2 |  |  | 1 |  |  | 3 |
Research and development | — |  |  | (13 | ) |  | 15 |  |  | 2 |
Restructuring costs | 473 |  |  | — |  |  | 159 |  |  | 632 |
| $ | 473 |  |  | $ | (1 | ) |  | $ | 186 |  |  | $ | 658 |
Year Ended December 31, 2017 |  |  |  |  |  |  |
Cost of sales | $ | — |  |  | $ | 52 |  |  | $ | 86 |  |  | $ | 138 |
Selling, general and administrative | — |  |  | 2 |  |  | — |  |  | 2 |
Research and development | — |  |  | 6 |  |  | 5 |  |  | 11 |
Restructuring costs | 552 |  |  | — |  |  | 224 |  |  | 776 |
| $ | 552 |  |  | $ | 60 |  |  | $ | 315 |  |  | $ | 927 |
Year Ended December 31, 2016 |  |  |  |  |  |  |
Cost of sales | $ | — |  |  | $ | 77 |  |  | $ | 104 |  |  | $ | 181 |
Selling, general and administrative | — |  |  | 8 |  |  | 87 |  |  | 95 |
Research and development | — |  |  | 142 |  |  | — |  |  | 142 |
Restructuring costs | 216 |  |  | — |  |  | 435 |  |  | 651 |
| $ | 216 |  |  | $ | 227 |  |  | $ | 626 |  |  | $ | 1,069 |
Separation costs are associated with actual headcount reductions, as well as those headcount reductions which were probable and could be reasonably estimated. Positions eliminated under restructuring program activities were approximately 2,160 in 2018, 2,450 in 2017 and 2,625 in 2016. Accelerated depreciation costs primarily relate to manufacturing, research and administrative facilities and equipment to be sold or closed as part of the programs. Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions. All the sites have and will continue to operate up through the respective closure dates and, since future undiscounted cash flows were sufficient to recover the respective book values, Merck is recording accelerated depreciation over the revised useful life of the site assets. Anticipated site closure dates, particularly related to manufacturing locations, have been and may continue to be adjusted to reflect changes resulting from regulatory or other factors. Other activity in 2018, 2017 and 2016 includes $141 million, $267 million and $409 million, respectively, of asset abandonment, shut-down and other related costs. Additionally, other activity includes certain employee-related costs associated with pension and other postretirement benefit plans (see Note 14) and share-based compensation. Other activity also reflects net pretax losses resulting from sales of facilities and related assets of $151 million in 2016. The following table summarizes the charges and spending relating to restructuring program activities:
| Separation Costs |  | Accelerated Depreciation |  | Other |  | Total
Restructuring reserves January 1, 2017 | $ | 395 |  |  | $ | — |  |  | $ | 146 |  |  | $ | 541 |
Expenses | 552 |  |  | 60 |  |  | 315 |  |  | 927 |
(Payments) receipts, net | (328 | ) |  | — |  |  | (394 | ) |  | (722 | )
Non-cash activity | — |  |  | (60 | ) |  | 61 |  |  | 1 |
Restructuring reserves December 31, 2017 | 619 |  |  | — |  |  | 128 |  |  | 747 |
Expenses | 473 |  |  | (1 | ) |  | 186 |  |  | 658 |
(Payments) receipts, net | (649 | ) |  | — |  |  | (238 | ) |  | (887 | )
Non-cash activity | — |  |  | 1 |  |  | 15 |  |  | 16 |
Restructuring reserves December 31, 2018 (1) | $ | 443 |  |  | $ | — |  |  | $ | 91 |  |  | $ | 534 |
(1) | The remaining cash outlays are expected to be substantially completed by the end of 2020.

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration