Restructuring Plans
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6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2013
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Restructuring Plans | |||||||||||||||||||||
Restructuring Plans | Note 6 Restructuring Plans
In the second quarter of 2013, the company approved plans to restructure certain commercial operations in conjunction with the loss and expected loss of exclusivity of certain products. In 2013 and prior years, AbbVie management approved plans to realign its worldwide manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.
Restructuring charges were $55 million and $64 million for the three and six months ended June 30, 2013, respectively, and were primarily recorded within SG&A in the condensed consolidated statements of earnings, with the remainder recorded within research and development and cost of products sold. Included in the charges were cash costs of $51 million and $60 million for the three and six months ended June 30, 2013, respectively, which mainly related to employee severance and contractual obligations.
For the three and six months ended June 30, 2012, AbbVie incurred restructuring charges of $13 million and $30 million, primarily related to accelerated depreciation and product transfer costs.
The following summarizes the cash activity in the restructuring reserves for the six months ended June 30, 2013.
Included in payments and other adjustments for the six months ended June 30, 2013 was a $23 million reversal in the first quarter of a previously recorded restructuring reserve due to the company’s re-evaluation of a prior year decision to exit a manufacturing facility. |