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Restructuring Related Activities | 12 Months Ended
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Dec. 31, 2019
Restructuring and Related Activities [Abstract] |
Restructuring and Related Activities Disclosure [Text Block] | NOTE G – RESTRUCTURING-RELATED ACTIVITIES 2019 Restructuring Plan On November 15, 2018, the Board of Directors approved, and we committed to a new global restructuring program (the 2019 Restructuring Plan). The 2019 Restructuring Plan is intended to support our effort to improve operating performance and meet anticipated market demands by ensuring that we are appropriately structured and resourced to deliver sustainable value to patients and customers. Key activities under the 2019 Restructuring Plan include supply chain network optimization intended to maximize our global manufacturing and distribution network capacity and building functional capabilities that support business growth. These activities were initiated in 2019, with the majority of activity expected to be complete by the end of 2021. The following table provides a summary of our estimates of total pre-tax charges associated with the 2019 Restructuring Plan by major type of cost:
Type of Cost | Total Estimated Amount Expected to be Incurred
Restructuring charges: |  |  |
Termination benefits |  | $75 | million | to | $100 million
Other (1) |  | $25 | million | to | $50 million
Restructuring-related expenses: |  |  |
Other (2) |  | $100 | million | to | $150 million
|  | $200 | million | to | $300 million
(1) | Consists primarily of consulting fees and costs associated with contractual cancellations.
(2) | Comprised of other costs directly related to the restructuring program, including program management, accelerated depreciation, fixed asset write-offs, and costs to transfer product lines among facilities.
Approximately $180 million to $280 million of these charges are expected to result in cash outlays. 2016 Restructuring Plan On June 6, 2016, our Board of Directors approved, and we committed to a restructuring initiative (the 2016 Restructuring Plan). The 2016 Restructuring Plan was intended to develop global commercialization, technology and manufacturing capabilities in key growth markets, build on our Plant Network Optimization (PNO) strategy which is intended to simplify our manufacturing plant structure by transferring certain production lines among facilities and expand operational efficiencies in support of our operating income margin goals. Key activities under the 2016 Restructuring Plan included strengthening global infrastructure through evolving global real estate assets and workplaces, developing global commercial and technical competencies, enhancing manufacturing and distribution expertise in certain regions and continuing implementation of our PNO strategy. These activities were initiated in the second quarter of 2016 and substantially completed in 2019. The following table provides a summary of total pre-tax charges associated with the 2016 Restructuring Plan by major type of cost:
Type of cost | Total Amount Incurred
Restructuring charges: |
Termination benefits | $ | 86 | million
Other (1) | 21 | million
Restructuring-related expenses: |
Other (2) | 164 | million
| $ | 271 | million
(1) | Consists primarily of consulting fees and costs associated with contract cancellations.
(2) | Comprised of other costs directly related to the 2016 Restructuring Plan, including program management, accelerated depreciation, fixed asset write-offs and costs to transfer product lines among facilities.
Approximately $255 million of these charges are expected to result in cash outlays; the majority of which were completed as of December 31, 2019. The following presents the restructuring and restructuring-related charges (credits) by major type and line item within our accompanying consolidated statements of operations (in millions):
Year Ended December 31, 2019 | Termination Benefits |  | Transfer Costs |  | Other |  | Total
Restructuring charges | $ | 38 |  |  | $ | — |  |  | $ | — |  |  | $ | 38 |
Restructuring-related expenses: |  |  |  |  |  |  |
Cost of products sold | — |  |  | 32 |  |  | — |  |  | 32 |
Selling, general and administrative expenses | — |  |  | — |  |  | 13 |  |  | 13 |
| — |  |  | 32 |  |  | 13 |  |  | 44 |
| $ | 38 |  |  | $ | 32 |  |  | $ | 13 |  |  | $ | 82 |
Year Ended December 31, 2018 | Termination Benefits |  | Transfer Costs |  | Other |  | Total
Restructuring charges | $ | 32 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 36 |
Restructuring-related expenses: |  |  |  |  |  |  |
Cost of products sold | — |  |  | 47 |  |  | — |  |  | 47 |
Selling, general and administrative expenses | — |  |  | — |  |  | 12 |  |  | 12 |
| — |  |  | 47 |  |  | 12 |  |  | 59 |
| $ | 32 |  |  | $ | 47 |  |  | $ | 16 |  |  | $ | 96 |
Year Ended December 31, 2017 | Termination Benefits |  | Transfer Costs |  | Other |  | Total
Restructuring charges | $ | 25 |  |  | $ | — |  |  | $ | 12 |  |  | $ | 37 |
Restructuring-related expenses: |  |  |  |  |  |  |
Cost of products sold | — |  |  | 45 |  |  | — |  |  | 45 |
Selling, general and administrative expenses | — |  |  | — |  |  | 13 |  |  | 13 |
| — |  |  | 45 |  |  | 13 |  |  | 58 |
| $ | 25 |  |  | $ | 45 |  |  | $ | 25 |  |  | $ | 95 |
The following table presents cumulative restructuring and restructuring-related charges incurred as of December 31, 2019, related to our Restructuring Plans by major type:
(in millions) | 2016 Restructuring Plan |  | 2019 Restructuring Plan |  | Total
Termination benefits | $ | 86 |  |  | $ | 30 |  |  | $ | 115 |
Other (1) | 21 |  |  | 2 |  |  | 23 |
Total restructuring charges | 106 |  |  | 32 |  |  | 138 |
Transfer costs | 126 |  |  | 13 |  |  | 139 |
Other (2) | 39 |  |  | 2 |  |  | 41 |
Restructuring-related charges | 164 |  |  | 15 |  |  | 180 |
| $ | 271 |  |  | $ | 47 |  |  | $ | 318 |
(1) | Consists primarily of consulting fees and costs associated with contract cancellations.
(2) | Comprised of other costs directly related to our Restructuring Plans, including program management, accelerated depreciation, and fixed asset write-offs.
Cash payments associated with our Restructuring Plans were made using cash generated from operations and are comprised of the following:
(in millions) | 2016 Restructuring Plan |  | 2019 Restructuring Plan |  | Total
Year Ended December 31, 2019 |  |  |  |  |
Termination benefits | $ | 13 |  |  | $ | 6 |  |  | $ | 18 |
Transfer costs | 18 |  |  | 13 |  |  | 32 |
Other | 10 |  |  | 4 |  |  | 14 |
| $ | 41 |  |  | $ | 23 |  |  | $ | 64 |

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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. + 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
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