RESTRUCTURING

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities Disclosure [Text Block]

RESTRUCTURING

A restructuring and integration plan is being implemented as an initiative to realize $2.5 billion of expected cost synergies resulting from cost savings and avoidance from the Celgene acquisition. The synergies are expected to be realized in Cost of products sold (10%), Marketing, selling and administrative expenses (55%) and Research and development expenses (35%). The majority of charges are expected to be incurred through 2022, and range between $2.8 billion to $3.0 billion. These costs consist of integration planning and execution expenses, employee termination benefit costs and accelerated stock-based compensation, contract termination costs and other shutdown costs associated with site exits. Cash outlays in connection with these actions are expected to be approximately $2.5 billion. Employee workforce reductions were approximately 125 in 2019.

The following tables summarize the charges and activity related to the Celgene acquisition:



Dollars in Millions	Year Ended December 31, 2019
Provision for restructuring	$	256
Integration expenses	415
Asset impairments	3
Total charges	$	674



Dollars in Millions	Year Ended December 31, 2019
Research and development	$	3
Other (income)/expense, net	671
Total charges	$	674



Dollars in Millions	Year Ended December 31, 2019
Liability at January 1	$	—
Provision for restructuring^(a)	111
Payments	(34		)
Liability at December 31	$	77


(a)	Excludes $145 million of accelerated stock-based compensation.

In October 2016, a restructuring plan was announced to evolve and streamline BMS's operating model. The majority of charges are expected to be incurred through 2020, range between $1.5 billion to $2.0 billion, and consist of employee termination benefit costs, contract termination costs, accelerated depreciation and impairment charges and other costs associated with manufacturing and R&D site exits. Cash outlays in connection with these actions are expected to be approximately 40% to 50% of the total charges. Charges of approximately $1.4 billion have been recognized for these actions since the announcement. Employee workforce reductions were approximately 100 in 2019, 900 in 2018 and 1,900 in 2017.

The following tables summarize the charges and activity related to the Company transformation:



	Year Ended December 31,
Dollars in Millions	2019		2018		2017
Employee termination costs	$	17	$	87	$	267
Other termination costs	28		44		26
Provision for restructuring	45		131		293
Accelerated depreciation	133		113		289
Asset impairments	127		16		241
Other shutdown costs	—		8		3
Total charges	$	305	$	268	$	826



	Year Ended December 31,
Dollars in Millions	2019		2018		2017
Cost of products sold	$	180	$	57	$	149
Marketing, selling and administrative	1		1		1
Research and development	79		79		383
Other (income)/expense, net	45		131		293
Total charges	$	305	$	268	$	826



	Year Ended December 31,
Dollars in Millions	2019			2018			2017
Liability at December 31	$	99		$	186		$	114
Cease-use liability reclassification	(3		)	—			—
Liability at January 1	96			186			114
Charges	49			148			319
Change in estimates	(4		)	(17		)	(26		)
Provision for restructuring	45			131			293
Foreign currency translation and other	(1		)	1			18
Payments	(117		)	(219		)	(239		)
Liability at December 31	$	23		$	99		$	186