XML 46 R27.htm IDEA: XBRL DOCUMENT
v3.20.2

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables) | 6 Months Ended
--- | ---
Jun. 28, 2020
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 |  | Six Months Ended
(MILLIONS OF DOLLARS) |  | June 28, 2020 |  |  | June 30, 2019 |  |  | June 28, 2020 |  |  | June 30, 2019 |
Restructuring charges/(credits): |  |  |  |  |  |  |  |  |  |  |  |
Employee terminations |  | $ | 346 |  |  | $ | (166 | ) |  | $ | 371 |  |  | $ | (167 | )
Asset impairments |  | (8 | ) |  | (9 | ) |  | 23 |  |  | — |
Exit costs |  | 1 |  |  | 31 |  |  | 1 |  |  | 34 |
Restructuring charges(a) |  | 340 |  |  | (144 | ) |  | 396 |  |  | (134 | )
Transaction costs(b) |  | 11 |  |  | — |  |  | 14 |  |  | — |
Integration costs and other(c) |  | 11 |  |  | 29 |  |  | 21 |  |  | 64 |
Restructuring charges and certain acquisition-related costs |  | 362 |  |  | (115 | ) |  | 431 |  |  | (69 | )
Net periodic benefit costs recorded in Other (income)/deductions––net |  | 5 |  |  | 4 |  |  | 29 |  |  | 10 |
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(d): |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  | 4 |  |  | 7 |  |  | 10 |  |  | 15 |
Selling, informational and administrative expenses |  | — |  |  | 1 |  |  | — |  |  | 2 |
Research and development expenses |  | 2 |  |  | 2 |  |  | (3 | ) |  | 5 |
Total additional depreciation––asset restructuring |  | 6 |  |  | 10 |  |  | 6 |  |  | 23 |
Implementation costs recorded in our condensed consolidated statements of income as follows(e): |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales |  | 11 |  |  | 17 |  |  | 21 |  |  | 31 |
Selling, informational and administrative expenses |  | 63 |  |  | 16 |  |  | 78 |  |  | 25 |
Research and development expenses |  | 1 |  |  | 9 |  |  | 1 |  |  | 13 |
Total implementation costs |  | 75 |  |  | 42 |  |  | 99 |  |  | 69 |
Total costs associated with acquisitions and cost-reduction/productivity initiatives |  | $ | 449 |  |  | $ | (59 | ) |  | $ | 566 |  |  | $ | 32 |
(a) | In the second quarter and first six months of 2020, restructuring charges mainly represent employee termination costs associated with our Transforming to a More Focused Company cost reduction program. In the second quarter and first six months of 2019, restructuring credits mostly represent the reversal of certain accruals related to our acquisition of Wyeth upon the effective favorable settlement of an IRS audit for multiple tax years. See Notes to Consolidated Financial Statements––Note 5D. Tax Matters: Tax Contingencies in our 2019 Financial Report.
The restructuring activities for 2020 are associated with the following:
• | For the second quarter of 2020, Biopharma ($12 million credit); Upjohn ($1 million credit); and Other ($352 million charge).
• | For the first six months of 2020, Biopharma ($9 million credit); Upjohn ($12 million charge); and Other ($393 million charge).
The restructuring activities for 2019 are associated with the following:
• | For the second quarter of 2019, Biopharma ($62 million credit); Upjohn ($9 million credit); and Other ($74 million credit).
• | For the first six months of 2019, Biopharma ($48 million credit); Upjohn ($22 million credit); and Other ($63 million credit).
Restructuring costs identified as Other are for restructuring activities associated with corporate enabling functions, WRDM, GPD and other manufacturing and commercial operations, as applicable. For the second quarter and first six months of 2020, restructuring costs identified as Other primarily relate to corporate enabling functions.
(b) | Transaction costs represent external costs for banking, legal, accounting and other similar services.
(c) | Integration costs and other represent external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs. In the second quarter and first six months of 2020, integration costs and other were mostly related to our acquisition of Array. In the second quarter and first six months of 2019, integration costs and other were primarily related to our acquisition of Hospira.
(d) | Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(e) 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, 2019(a) |  | $ | 887 |  |  | $ | — |  |  | $ | 46 |  |  | $ | 933 |
Provision |  | 371 |  |  | 23 |  |  | 1 |  |  | 396 |
Utilization and other(b) |  | (341 | ) |  | (23 | ) |  | (14 | ) |  | (378 | )
Balance, June 28, 2020(c) |  | $ | 918 |  |  | $ | — |  |  | $ | 34 |  |  | $ | 951 |
(a) | Included in Other current liabilities ($714 million) and Other noncurrent liabilities ($219 million).
(b) | Includes adjustments for foreign currency translation.
(c) Included in Other current liabilities ($625 million) and Other noncurrent liabilities ($326 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