Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables)

12 Months Ended

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The components of, and changes in, our restructuring accruals are as follows:

	Employee			Asset
	Termination			Impairment			Exit
(MILLIONS OF DOLLARS)	Costs			Charges			Costs			Accrual
Balance, December 31, 2013	$	15		$	—		$	6		$	21
Provision/(benefit)	16			—			1			17
Utilization and other(a)	(13		)	—			(6		)	(19		)
Balance, December 31, 2014	18			—			1			19
Provision/(benefit)	262			39			—			301
Utilization and other(a)	(59		)	—			—			(59		)
Non-cash activity	—			(39		)	—			(39		)
Balance, December 31, 2015(b)	221			—			1			222
Provision/(benefit)	(2		)	—			4			2
Utilization and other(a)	(129		)	—			(5		)	(134		)
Balance, December 31, 2016(b)	$	90		$	—		$	—		$	90

^(a)  Includes adjustments for foreign currency translation.

^(b)  At December 31, 2016 and 2015, included in Accrued Expenses ($61 million and $162 million, respectively) and Other noncurrent liabilities ($29 million and $60 million, respectively).

The components of costs incurred in connection with restructuring initiatives, acquisitions and cost-reduction/productivity initiatives are as follows:

	Year Ended December 31,
(MILLIONS OF DOLLARS)	2016			2015		2014
Restructuring charges and certain acquisition-related costs:
Integration costs(a)	$	3		$	10	$	8
Transaction costs(b)	—			9		—
Restructuring charges/(benefits)(c):
Employee termination costs/(benefits)	(2		)	262		16
Asset impairment charges	—			39		—
Exit costs	4			—		1
Total Restructuring charges and certain acquisition-related costs	$	5		$	320	$	25

^(a)  Integration costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs.

^(b)  Transaction costs represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.

^(c)  The restructuring charges/(benefits) for the years ended December 31, 2016 and 2015, primarily relate to our operational efficiency initiative and supply network strategy.

The restructuring charges for the year ended December 31, 2014, are primarily related to:

•employee termination costs in Europe and in our global manufacturing operations ($18 million);

•a reversal of a previously established reserve as a result of a change in estimate of employee termination costs ($2 million benefit); and

•exit costs related to the exiting of a certain leased manufacturing facility ($1 million).

The restructuring charges/(benefits) are associated with the following:

•For the year ended December 31, 2016 – U.S. ($1 million), International ($13 million benefit) and Manufacturing/research/corporate ($14 million)

•For the year ended December 31, 2015 – U.S. ($31 million), International ($132 million) and Manufacturing/research/corporate ($138 million)

•For the year ended December 31, 2014 – International ($12 million) and Manufacturing/research/corporate ($5 million).

Charges/(benefits) related to these 2015 initiatives are as follows:

	Year Ended December 31,
(MILLIONS OF DOLLARS)	2016			2015
Operational efficiency initiative:
Employee termination costs	$	(8	)	$	253
Asset impairment	—			38
Exit costs	5			—
Total restructuring charges/(benefits) for the operational efficiency initiative	(3		)	291
Supply network strategy:
Employee termination costs	6			9
Asset impairment charges	—			1
Total restructuring charges for the supply network strategy	6			10
Total restructuring charges/(benefits) related to the operational efficiency initiative and supply network strategy	3			301
Other operational efficiency initiative charges:
Cost of sales:
Inventory write-offs	5			13
Selling, general and administrative expenses:
Accelerated depreciation	1			—
Consulting fees	14			40
Research and development expenses:
Accelerated depreciation	—			2
Other (income)/deductions:
Net gain on sale of assets(a)	(26		)	—
Total other operational efficiency initiative charges	(6		)	55
Other supply network strategy charges:
Cost of sales:
Accelerated depreciation	6			1
Consulting fees	6			16
Inventory write-offs	1			—
Total other supply network strategy charges	13			17
Total costs associated with the operational efficiency initiative and supply network strategy	$	10		$	373

^(a)  For the year ended December 31, 2016, represents the net gain on the sale of certain manufacturing sites and products, partially offset by the loss on the sale of our share of our Taiwan joint venture, as part of our operational efficiency initiative.