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BUSINESS OPTIMIZATION CHARGES | 12 Months Ended
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Dec. 31, 2024
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. We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $4 million through the completion of initiatives that are currently underway. We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies expected to arise as a result of the sale of our Kidney Care business, and to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods. For segment reporting, business optimization charges are unallocated expenses. We recorded the following charges related to business optimization programs in 2024, 2023 and 2022:
years ended December 31 (in millions) | 2024 | 2023 | 2022
Restructuring charges | $ | 146 |  | $ | 141 |  | $ | 144 |
Costs to implement business optimization programs 1 | 16 |  | 33 |  | 49 |
Total business optimization charges | $ | 162 |  | $ | 174 |  | $ | 193 |
1 Costs to implement business optimization programs for the years ended December 31, 2024, 2023 and 2022, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. The costs were primarily included within cost of sales and SG&A expenses. The costs of restructuring actions consisted primarily of employee termination costs, contract termination costs and asset impairments. During the years ended December 31, 2024, 2023 and 2022, we recorded the following restructuring charges:
| 2024
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 20 |  | $ | 48 |  | $ | 30 |  | $ | 98 |
Contract termination and other costs | 3 |  | 6 |  | — |  | 9 |
Asset impairments | 39 |  | — |  | — |  | 39 |
Total restructuring charges | $ | 62 |  | $ | 54 |  | $ | 30 |  | $ | 146 |
| 2023
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 20 |  | $ | 91 |  | $ | 10 |  | $ | 121 |
Contract termination and other costs | (1) |  | 3 |  | — |  | 2 |
Asset impairments | 11 |  | 7 |  | — |  | 18 |
Total restructuring charges | $ | 30 |  | $ | 101 |  | $ | 10 |  | $ | 141 |
| 2022
(in millions) | COGS | SG&A | R&D | Total
Employee termination costs | $ | 15 |  | $ | 94 |  | $ | 3 |  | $ | 112 |
Contract termination and other costs | — |  | 22 |  | — |  | 22 |
Asset impairments | — |  | 10 |  | — |  | 10 |
Total restructuring charges | $ | 15 |  | $ | 126 |  | $ | 3 |  | $ | 144 |
For the year ended December 31, 2024, $45 million of the restructuring charges reflected above, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment. For the year ended December 31, 2024, $46 million of the restructuring charges reflected in the table above were related to business optimization initiatives within our Healthcare Systems & Technologies segment. These charges included $21 million of long-lived asset impairment charges, $9 million of other asset write-downs related to inventory and $2 million of employee termination costs related to our decision to discontinue a product line. Additionally, these charges included $14 million of employee termination costs related to other business optimization initiatives within this segment. For the year ended December 31, 2023, $81 million of the restructuring charges reflected above, consisting of employee termination costs, were related to the implementation of our new operating model intended to streamline our operations. For the year ended December 31, 2022, $85 million restructuring charges reflected in the table above were related to integration activities for the Hillrom acquisition, consisting of $55 million of employee termination costs, $22 million of contract terminations and other costs and $8 million of asset impairments. The following table summarizes activity in the liability related to our restructuring initiatives.
(in millions) |
Liability balance as of December 31, 2021 | $ | 75 |
Charges | 152 |
Payments | (118) |
Reserve adjustments | (18) |
Currency translation | (5) |
Liability balance as of December 31, 2022 | 86 |
Charges | 146 |
Payments | (101) |
Reserve adjustments | (23) |
Currency translation | (13) |
Liability balance as of December 31, 2023 | 95 |
Charges | 116 |
Payments | (80) |
Reserve adjustments | (9) |
Currency translation | — |
Liability balance as of December 31, 2024 | $ | 122 |
Reserve adjustments primarily relate to employee termination cost reserves established in prior periods. Substantially all of our restructuring liabilities as of December 31, 2024 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 2024.

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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 -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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