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Restructuring

9 Months Ended

Oct. 01, 2023

Restructuring and Related Activities [Abstract]

Restructuring

RESTRUCTURING

In fiscal 2023, the Company commenced restructuring actions within its Innovative Medicine and MedTech segments. The amounts and details of the current year programs are included below.

In fiscal 2023, the Company completed a prioritization of its research and development (R&D) investment within its Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within certain therapeutic areas. The R&D program exits are primarily in infectious diseases and vaccines including the discontinuation of its respiratory syncytial virus (RSV) adult vaccine program, hepatitis and HIV development. Pre-tax Restructuring expenses of $149 million in the fiscal third quarter and $424 million in the fiscal nine months included the termination of partnered and non-partnered development program costs and asset impairments. The estimated costs of these total activities is between $500 - $600 million and is expected to be completed in fiscal year 2024.

In the third quarter of 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense of $235 million in the fiscal third quarter and nine months primarily included inventory and instrument charges related to market and product exits. The estimated costs of the total program are between $700 million - $800 million and is expected to be completed by the end of fiscal year 2025.

The following table summarizes the restructuring expenses for 2023:

(Pre-tax Dollars in Millions)						Fiscal Third Quarter Ended						Fiscal Nine Months Ended
Innovative Medicine Segment (1)						$	149					424
MedTech Segment (2)						235						235
Total Programs						$	384					659

(1) Included in Restructuring on the Consolidated Statement of Earnings

(2) Included $9 million in the Restructuring and $226 million in Cost of products sold on the Consolidated Statement of Earnings

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- 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.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482017/420-10-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482017/420-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 420
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
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