Restructuring Charges

9 Months Ended

Sep. 30, 2023

RESTRUCTURING CHARGES

We periodically take action to reduce redundant expenses and improve operating efficiencies. Restructuring activity includes severance, lease exit costs, asset impairments, and related consulting fees. The following reflects our restructuring activity (in millions):


	Three Months Ended
	September 30, 2023
	Supply Chain Reinvention		HRA Pharma Integration		Other Initiatives		Total
Beginning balance	$	—	$	9.6	$	3.8	$	13.4
Additional charges	13.5		0.5		1.5		15.5
Payments	(2.3)		(4.0)		(2.8)		(9.0)
Non-cash adjustments	(11.2)		(0.1)		(0.4)		(11.7)

Ending balance	$	—	$	6.0	$	2.2	$	8.2


	Three Months Ended
	October 1, 2022
	Supply Chain Reinvention		Other Initiatives		Total
Beginning balance	$	7.6	$	5.9	$	13.5
Additional charges	11.4		7.7		19.1
Payments	(10.0)		(2.9)		(12.9)
Non-cash adjustments	—		(0.4)		(0.4)

Ending balance	$	9.0	$	10.3	$	19.3


	Nine Months Ended
	September 30, 2023
	Supply Chain Reinvention		HRA Pharma Integration		Other Initiatives		Total
Beginning balance	$	2.2	$	13.3	$	4.3	$	19.8
Additional charges	17.4		2.7		5.6		25.7
Payments	(8.4)		(10.1)		(7.8)		(26.3)
Non-cash adjustments	(11.2)		0.1		0.1		(11.0)
Ending balance	$	—	$	6.0	$	2.2	$	8.2


	Nine Months Ended
	October 1, 2022
	Supply Chain Reinvention		Other Initiatives		Total
Beginning balance	$	—	$	6.9	$	6.9
Additional charges	22.3		9.9		32.2
Payments	(13.3)		(5.7)		(19.0)
Non-cash adjustments	—		(0.8)		(0.8)
Ending balance	$	9.0	$	10.3	$	19.3

The charges incurred during the three and nine months ended September 30, 2023 and October 1, 2022 were primarily associated with actions taken on our multi-year supply chain restructuring program initiative started in 2022, and HRA Pharma integration activities associated with employee separation, continuity and other benefit-related costs. Supply chain restructuring charges in the three months ended September 30, 2023 included an asset impairment of $11.2 million and other restructuring charges of $2.3 million. We have incurred $15.2 million of cumulative restructuring expense to date related to HRA Pharma integration. We expect that most of the HRA Pharma restructuring expenses will be incurred by the end of 2023.

Of the amount recorded during the three and nine months ended September 30, 2023, $12.5 million and $19.2 million, respectively, was related to our CSCI segment, due primarily to supply chain restructuring (including the $11.2 million asset impairment) and HRA Pharma integration initiatives, and $2.3 million and $4.6 million related to our CSCA segment, also due primarily to supply chain restructuring initiatives. Of the amount recorded during the three and nine months ended October 1, 2022, $6.4 million and $8.1 million, respectively, was related to our CSCI segment, $6.8 million and $6.9 million was related to our CSCA segment, and $5.8 million and $17.2 million was related to our Unallocated segment. For all segments, amounts were due primarily to supply chain restructuring.

There were no other material restructuring programs for the periods presented. All charges are recorded in Restructuring expense on the Condensed Consolidated Statements of Operations. The remaining $8.2 million liability for employee severance benefits and consulting fees is expected to be mostly paid within the next year.