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BUSINESS OPTIMIZATION CHARGES | 9 Months Ended
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Sep. 30, 2021
Restructuring and Related Activities [Abstract] |
BUSINESS OPTIMIZATION CHARGES | BUSINESS OPTIMIZATION CHARGES In recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency. These efforts include restructuring the organization, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions. From the commencement of our business optimization activities in the second half of 2015 through September 30, 2021, we have incurred cumulative pre-tax costs of $1.2 billion related to these actions. The costs consisted primarily of employee termination costs, implementation costs, contract termination costs, asset impairments and accelerated depreciation. We currently expect to incur additional pre-tax costs of approximately $35 million through the completion of the initiatives that are currently underway, primarily related to implementation costs. We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we may incur additional restructuring charges and costs to implement business optimization programs in future periods. During the three and nine months ended September 30, 2021 and 2020, we recorded the following charges related to business optimization programs.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2021 | 2020 |  | 2021 | 2020
Restructuring charges | $ | 32 |  | $ | 26 |  |  | $ | 67 |  | $ | 58 |
Costs to implement business optimization programs | 4 |  | 6 |  |  | 14 |  | 19 |
Total business optimization charges | $ | 36 |  | $ | 32 |  |  | $ | 81 |  | $ | 77 |
For segment reporting purposes, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the three and nine months ended September 30, 2021 and 2020, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. These costs were primarily included within cost of sales and SG&A expense. During the three and nine months ended September 30, 2021 and 2020, we recorded the following restructuring charges.
| Three months ended September 30, 2021
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 11 |  | $ | 8 |  | $ | — |  | $ | 19 |
Contract termination and other costs | — |  | 2 |  | — |  | 2 |
Asset impairments | 11 |  | — |  | — |  | 11 |
Total restructuring charges | $ | 22 |  | $ | 10 |  | $ | — |  | $ | 32 |
| Three months ended September 30, 2020
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 4 |  | $ | 15 |  | $ | 1 |  | $ | 20 |
Contract termination and other costs | 1 |  | 3 |  | — |  | 4 |
Asset impairments | — |  | 2 |  | — |  | 2 |
Total restructuring charges | $ | 5 |  | $ | 20 |  | $ | 1 |  | $ | 26 |
| Nine months ended September 30, 2021
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 35 |  | $ | 14 |  | $ | — |  | $ | 49 |
Contract termination and other costs | — |  | 2 |  | — |  | 2 |
Asset impairments | 16 |  | — |  | — |  | 16 |
Total restructuring charges | $ | 51 |  | $ | 16 |  | $ | — |  | $ | 67 |
| Nine months ended September 30, 2020
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 9 |  | $ | 34 |  | $ | (1) |  | $ | 42 |
Contract termination and other costs | 3 |  | 3 |  | — |  | 6 |
Asset impairments | 8 |  | 2 |  | — |  | 10 |
Total restructuring charges | $ | 20 |  | $ | 39 |  | $ | (1) |  | $ | 58 |
In conjunction with our business optimization initiatives in the first quarter of 2020, we sold property that resulted in a gain of $17 million. This gain is reflected within other operating expense (income), net in our condensed consolidated statement of income for the nine months ended September 30, 2020. The following table summarizes activity in the liability related to our restructuring initiatives.
(in millions) |
Liability balance as of December 31, 2020 | $ | 113 |
Charges | 54 |
Payments | (62) |
Reserve adjustments | (3) |
Currency translation | (6) |
Liability balance as of September 30, 2021 | $ | 96 |
Substantially all of our restructuring liabilities as of September 30, 2021 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2022.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -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 + Details
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