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

6 Months Ended

Jul. 03, 2022

Restructuring and Related Activities [Abstract]

Schedule of Acquisitions and Cost-Reduction/Productivity Initiatives

The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:
	Three Months Ended				Six Months Ended
(MILLIONS)	July 3, 2022		July 4, 2021		July 3, 2022		July 4, 2021
Restructuring charges/(credits):
Employee terminations	$	110	$	(4)	$	135	$	19
Asset impairments	20		2		28		(3)
Exit costs/(credits)	18		(3)		29		(3)
Restructuring charges/(credits)(a)	147		(5)		191		12
Transaction costs(b)	36		—		42		—
Integration costs and other(c)	6		4		148		8
Restructuring charges and certain acquisition-related costs	189		(1)		381		21
Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net	—		4		(6)		12
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(d):
Cost of sales	7		27		15		34
Selling, informational and administrative expenses	—		16		—		16
Total additional depreciation––asset restructuring	7		43		15		49
Implementation costs recorded in our condensed consolidated statements of income as follows(e):
Cost of sales	15		10		27		21
Selling, informational and administrative expenses	134		80		208		144
Total implementation costs	149		90		235		166
Total costs associated with acquisitions and cost-reduction/productivity initiatives	$	345	$	137	$	625	$	248

(a)Primarily represents cost reduction initiatives. Restructuring charges/(credits) associated with Biopharma: charges of $50 million and $46 million for the three and six months ended July 3, 2022, respectively, and credits of $4 million and charges of $1 million for the three and six months ended July 4, 2021, respectively.

(b)Represents external costs for banking, legal, accounting and other similar services.

(c)Represents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs. In the three and six months ended July 3, 2022, integration costs and other were mostly related to our acquisition of Arena, including $138 million in payments to Arena employees in the first quarter of 2022 for the fair value of previously unvested long-term incentive awards. See Note 2A.

(d)Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(e)Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

Schedule of Components and Changes in Restructuring Accruals

The following summarizes the components and changes in restructuring accruals:
(MILLIONS)	Employee Termination Costs		Asset Impairment Charges		Exit Costs		Accrual
Balance, December 31, 2021(a)	$	1,014	$	—	$	57	$	1,071
Provision	135		28		29		191
Utilization and other(b)	(244)		(28)		(78)		(349)
Balance, July 3, 2022(c)	$	904	$	—	$	8	$	913

(a)Included in Other current liabilities ($816 million) and Other noncurrent liabilities ($255 million).

(b)Includes adjustments for foreign currency translation.

(c)Included in Other current liabilities ($794 million) and Other noncurrent liabilities ($119 million).