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

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

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

6. Restructuring Charges and Other Costs Associated with Acquisitions, Cost-Reduction and Productivity
Initiatives

In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems. In connection with our acquisition activity, we typically incur costs and charges associated with executing the transactions, integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the consolidated company, which may include charges related to employees, assets and activities that will not continue in the consolidated company. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as business technology, shared services and corporate operations.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2023		2022		2023		2022
Restructuring charges and certain acquisition-related costs:
Integration costs(a)	$	1	$	1	$	3	$	4
Transaction costs(b)	2		—		4		—
Restructuring charges(c):
Employee termination costs	8		2		33		2
Asset impairment charges	1		2		1		2
Exit costs	4		1		4		1
Total Restructuring charges and certain acquisition-related costs	$	16	$	6	$	45	$	9

(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 includes expenditures for banking, legal, accounting and other similar services.

(c)    The restructuring charges for the three and nine months ended September 30, 2023 primarily consisted of employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.

The restructuring charges for the three and nine months ended September 30, 2022, represent employee termination and exit costs associated with cost-reduction and productivity initiatives in certain international markets, as well as asset impairment charges primarily related to the consolidation of manufacturing sites in China.

(MILLIONS OF DOLLARS)	Accrual
Balance, December 31, 2022(a)	$	15
Provision	38
Non-cash activity	(1)
Utilization and other(b)	(18)
Balance, September 30, 2023(a)	$	34

(a)     At September 30, 2023 and December 31, 2022, included in Accrued expenses ($25 million and $5 million, respectively) and Other noncurrent liabilities ($9 million and $10 million, respectively).

(b)     Includes adjustments for foreign currency translation.