RESTRUCTURING

9 Months Ended

Sep. 30, 2022

Restructuring Charges [Abstract]

Restructuring

RESTRUCTURING

Celgene Acquisition Plan

In 2019, a restructuring and integration plan was implemented as an initiative to realize sustainable run rate synergies resulting from cost savings and avoidance from the Celgene acquisition that are currently expected to be approximately $3.0 billion. The synergies are expected to be realized in Cost of products sold (5%), Marketing, selling and administrative expenses (65%) and Research and development expenses (30%). Charges of approximately $3.5 billion are expected to be incurred including cash outlays of approximately $3.1 billion. Cumulative charges of approximately $3.0 billion have been recognized to date including 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. The remaining charges are primarily related to IT system integration which are expected to be incurred through 2024. Employee workforce reductions were approximately 150 and 320 for the nine months ended September 30, 2022 and 2021, respectively.

Other Restructuring

Restructuring and integration plans were initiated to realize expected cost synergies resulting from cost savings and avoidance from the Turning Point acquisition on August 17, 2022, and the MyoKardia acquisition in 2020. Charges of approximately $250 million are expected to be incurred through the end of 2023, and consist of integration planning and execution expenses, employee termination benefit costs and other costs. Cumulative charges of $151 million have been recognized for these actions to date.

The following provides the charges related to restructuring initiatives by type of cost:

	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2022		2021		2022		2021
Celgene Acquisition Plan	$	102	$	153	$	375	$	526
Other Restructuring	29		18		34		74
Total charges	$	131	$	171	$	409	$	600
Employee termination costs	$	16	$	24	$	57	$	143
Other termination costs	1		3		3		7
Provision for restructuring	17		27		60		150
Integration expenses	114		141		343		434
Accelerated depreciation	—		—		6		—
Asset impairments	—		—		—		24
Other shutdown costs, net	—		3		—		(8)
Total charges	$	131	$	171	$	409	$	600
Cost of products sold	$	—	$	—	$	—	$	24
Marketing, selling and administrative	—		1		6		1
Other (income)/expense, net	131		170		403		575
Total charges	$	131	$	171	$	409	$	600

The following summarizes the charges and spending related to restructuring plan activities:

	Nine Months Ended September 30,
Dollars in Millions	2022		2021
Beginning balance	$	101	$	148
Provision for restructuring(a)	60		138
Foreign currency translation and other	(10)		(4)
Payments	(106)		(170)
Ending Balance	$	45	$	112

(a)    Includes a reduction of the liability resulting from changes in estimates of $6 million and $17 million for the nine months ended September 30, 2022 and 2021, respectively. Excludes $12 million for the nine months ended September 30, 2021 of accelerated stock-based compensation relating to the Celgene Acquisition Plan.