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Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables) | 9 Months Ended
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Oct. 02, 2022
Restructuring and Related Activities [Abstract] |
Schedule of Acquisitions and Cost-Reduction/Productivity Initiatives |
The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS) |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021
Restructuring charges/(credits): |  |  |  |  |  |  |  |
Employee terminations |  | $ | 158 |  |  | $ | 630 |  |  | $ | 293 |  |  | $ | 649 |
Asset impairments |  | 17 |  |  | 10 |  |  | 44 |  |  | 7 |
Exit costs/(credits) |  | 2 |  |  | 3 |  |  | 31 |  |  | — |
Restructuring charges/(credits)(a) |  | 177 |  |  | 643 |  |  | 368 |  |  | 656 |
Transaction costs(b) |  | — |  |  | — |  |  | 42 |  |  | — |
Integration costs and other(c) |  | 22 |  |  | 3 |  |  | 170 |  |  | 11 |
Restructuring charges and certain acquisition-related costs |  | 199 |  |  | 646 |  |  | 580 |  |  | 667 |
Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net |  | — |  |  | (63) |  |  | (5) |  |  | (51) |
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(d): |  |  |  |  |  |  |  |
Cost of sales |  | 7 |  |  | 19 |  |  | 22 |  |  | 53 |
Selling, informational and administrative expenses |  | 1 |  |  | 8 |  |  | 1 |  |  | 23 |
Total additional depreciation––asset restructuring |  | 7 |  |  | 27 |  |  | 22 |  |  | 76 |
Implementation costs recorded in our condensed consolidated statements of income as follows(e): |  |  |  |  |  |  |  |
Cost of sales |  | 14 |  |  | 8 |  |  | 40 |  |  | 29 |
Selling, informational and administrative expenses |  | 136 |  |  | 142 |  |  | 344 |  |  | 287 |
Research and development expenses |  | — |  |  | — |  |  | — |  |  | 1 |
Total implementation costs |  | 150 |  |  | 151 |  |  | 384 |  |  | 316 |
Total costs associated with acquisitions and cost-reduction/productivity initiatives |  | $ | 357 |  |  | $ | 760 |  |  | $ | 982 |  |  | $ | 1,008 |
(a)Primarily represents cost reduction initiatives. Restructuring charges/(credits) associated with Biopharma: charges of $62 million and $108 million for the three and nine months ended October 2, 2022, respectively, and charges of $616 million and $617 million for the three and nine months ended October 3, 2021, respectively. (b)Represents external costs for banking, legal, accounting and other similar services. (c)Represents 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 three and nine months ended October 2, 2022, integration costs and other were mostly related to our acquisition of Arena, including $138 million in payments to Arena employees in the first quarter of 2022 for the fair value of previously unvested long-term incentive awards. See Note 2A. (d)Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions. (e)Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
Schedule of Components and Changes in Restructuring Accruals |
The following summarizes the components and changes in restructuring accruals:
(MILLIONS) |  | Employee Termination Costs |  | Asset Impairment Charges |  | Exit Costs |  | Accrual
Balance, December 31, 2021(a) |  | $ | 1,014 |  |  | $ | — |  |  | $ | 57 |  |  | $ | 1,071 |
Provision |  | 293 |  |  | 44 |  |  | 31 |  |  | 368 |
Utilization and other(b) |  | (447) |  |  | (44) |  |  | (80) |  |  | (572) |
Balance, October 2, 2022(c) |  | $ | 859 |  |  | $ | — |  |  | $ | 8 |  |  | $ | 867 |
(a)Included in Other current liabilities ($816 million) and Other noncurrent liabilities ($255 million). (b)Includes adjustments for foreign currency translation. (c)Included in Other current liabilities ($758 million) and Other noncurrent liabilities ($110 million).

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- 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 https://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 https://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 https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 + Details
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- 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 https://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 https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 + Details
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