XML 40 R23.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2018
Restructuring and Related Activities [Abstract] |
Schedule of Components of Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives |
The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS OF DOLLARS) |  | September 30, 2018 |  |  | October 1, 2017 |  |  | September 30, 2018 |  |  | October 1, 2017 |
Restructuring (credits)/charges: |  |  |  |  |  |  |  |  |  |  |  |
Employee terminations |  | $ | (24 | ) |  | $ | (55 | ) |  | $ | (53 | ) |  | $ | (113 | )
Asset impairments(a) |  | 12 |  |  | 101 |  |  | 8 |  |  | 126 |
Exit costs |  | 14 |  |  | 10 |  |  | 14 |  |  | 16 |
Restructuring charges/(credits)(b) |  | 1 |  |  | 56 |  |  | (32 | ) |  | 28 |
Transaction costs(c) |  | 1 |  |  | (14 | ) |  | 1 |  |  | 4 |
Integration costs(d) |  | 82 |  |  | 73 |  |  | 202 |  |  | 235 |
Restructuring charges and certain acquisition-related costs |  | 85 |  |  | 114 |  |  | 172 |  |  | 267 |
Net periodic benefit costs recorded in Other (income)/deductions––net(e) |  | 41 |  |  | 35 |  |  | 103 |  |  | 110 |
Additional depreciation––asset restructuring, virtually all of which is recorded in Cost of sales(f) |  | 12 |  |  | 39 |  |  | 43 |  |  | 74 |
Implementation costs recorded in our condensed consolidated statements of income as follows(g): |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  | 21 |  |  | 26 |  |  | 57 |  |  | 77 |
Selling, informational and administrative expenses |  | 17 |  |  | 22 |  |  | 51 |  |  | 46 |
Research and development expenses |  | 9 |  |  | 9 |  |  | 22 |  |  | 26 |
Total implementation costs |  | 48 |  |  | 57 |  |  | 130 |  |  | 150 |
Total costs associated with acquisitions and cost-reduction/productivity initiatives |  | $ | 186 |  |  | $ | 245 |  |  | $ | 447 |  |  | $ | 601 |
(a) | The asset impairment charges for the three and nine months ended October 1, 2017 are largely associated with our acquisitions of Hospira and Medivation.
(b) | In the third quarter of 2018, restructuring charges are primarily due to accruals for exit costs and asset write downs related to our acquisition of Hospira, partially offset by the reversal of previously recorded accruals for employee termination costs. In the first nine months of 2018, restructuring credits are mostly related to the reversal of previously recorded accruals for employee termination costs. In the three and nine months ended October 1, 2017, restructuring charges were mainly associated with our acquisitions of Hospira and Medivation, partially offset by credits associated with cost-reduction and productivity initiatives not associated with acquisitions that mostly related to the reversal of previously recorded accruals for employee termination costs. Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.
The restructuring activities for 2018 are associated with the following:
• | For the third quarter of 2018, IH ($13 million credit); EH ($7 million charge); manufacturing operations ($1 million charge); WRD/GPD ($3 million charge); and Corporate ($3 million charge).
• | For the first nine months of 2018, IH ($25 million credit); EH ($5 million credit); WRD/GPD ($1 million charge); manufacturing operations ($16 million charge); and Corporate ($19 million credit).
The restructuring activities for 2017 are associated with the following:
• | For the third quarter of 2017, IH ($1 million charge); EH ($1 million charge); WRD/GPD ($2 million charge); manufacturing operations ($40 million charge); and Corporate ($12 million charge).
• | For the first nine months of 2017, IH ($1 million credit); EH ($11 million credit); WRD/GPD ($24 million credit); manufacturing operations ($48 million charge); and Corporate ($15 million charge).
(c) | Transaction costs represent external costs for banking, legal, accounting and other similar services, which in the third quarter of 2017 reflect the reversal of an accrual related to the acquisition of Medivation. Transaction costs for the first nine months of 2017 were directly related to our acquisitions of Hospira, Anacor and Medivation.
(d) | Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. In the third quarter and first nine months of 2018, integration costs were primarily related to our acquisition of Hospira. In the third quarter and first nine months of 2017, integration costs primarily relate to our acquisitions of Hospira and Medivation. The first nine months of 2017 also include a net gain of $12 million related to the settlement of the Hospira U.S. qualified defined benefit pension plan (see Note 10).
(e) | In the three and nine months ended September 30, 2018, primarily represents the net pension curtailments and settlements included in Other (income)/deductions––net upon the adoption of a new accounting standard in the first quarter of 2018. In the three and nine months ended October 1, 2017, primarily represents the net pension curtailments and settlements, partially offset by net periodic benefit credits, excluding service costs, related to our acquisition of Hospira, both of which were reclassified to Other (income)/deductions––net as a result of the retrospective adoption of a new accounting standard in the first quarter of 2018. These credits included a net settlement gain, partially offset by accelerated amortization of actuarial losses and prior service costs upon the settlement of the remaining obligation associated with the Hospira U.S. qualified defined benefit pension plan. For additional information, see Note 1B and Note 10.
(f) | Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(g) | Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
Schedule of Components of and Changes in Restructuring Accruals |
The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS) |  | Employee Termination Costs |  |  | Asset Impairment Charges |  |  | Exit Costs |  |  | Accrual |
Balance, December 31, 2017(a) |  | $ | 1,039 |  |  | $ | — |  |  | $ | 66 |  |  | $ | 1,105 |
Provision/(Credit) |  | (53 | ) |  | 8 |  |  | 14 |  |  | (32 | )
Utilization and other(b) |  | (235 | ) |  | (8 | ) |  | (34 | ) |  | (277 | )
Balance, September 30, 2018(c) |  | $ | 750 |  |  | $ | — |  |  | $ | 46 |  |  | $ | 796 |
(a) | Included in Other current liabilities ($643 million) and Other noncurrent liabilities ($462 million).
(b) | Includes adjustments for foreign currency translation.
(c) | Included in Other current liabilities ($397 million) and Other noncurrent liabilities ($399 million).

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 Tabular disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140864-122747 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 + Details
Name: | us-gaap_ScheduleOfRestructuringAndRelatedCostsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of an entity's restructuring reserve that occurred during the period associated with the exit from or disposal of business activities or restructurings for each major type of cost. This element may also include a description of any reversal and other adjustment made during the period to the amount of an accrued liability for restructuring activities. This element may be used to encapsulate the roll forward presentations of an entity's restructuring reserve by type of cost and in total, and explanation of changes that occurred in the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(b)(2)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 + Details
Name: | us-gaap_ScheduleOfRestructuringReserveByTypeOfCostTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration