RESTRUCTURING, INTEGRATION AND OTHER COSTS

In connection with the Salix Acquisition, the B&L Acquisition, as well as other acquisitions, the Company has implemented cost-rationalization and integration initiatives to capture operating synergies and generate cost savings across the Company. These measures included:


•	workforce reductions across the Company and other organizational changes;


•	closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities;


•	leveraging research and development spend; and/or


•	procurement savings.

Salix Acquisition-Related Cost-Rationalization and Integration Initiatives

The Company estimates that it will incur total costs of approximately $300 million in connection with the cost-rationalization and integration initiatives relating to the Salix Acquisition, which the Company expects to substantially complete by mid-2016. Since the acquisition date, total costs of $217 million have been incurred through December 31, 2015, including (i) $110 million of integration expenses, (ii) $92 million of restructuring expenses, and (iii) $15 million of acquisition-related costs. The estimate of total costs to be incurred primarily includes: employee termination costs payable to approximately 475 employees of the Company and Salix who have been or will be terminated as a result of the Salix Acquisition; potential IPR&D termination costs related to the transfer to other parties of product-development programs that do not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs.

Salix Restructuring Costs

The following table summarizes the major components of the restructuring costs incurred in connection with the Salix Acquisition since the acquisition date through December 31, 2015:



	Severance and Related Benefits			Contract Termination, Facility Closure and Other Costs			Total
Balance, January 1, 2015	$	—		$	—		$	—
Costs incurred and/or charged to expense	90.6			0.9			91.5
Cash payments	(57.8		)	(0.3		)	(58.1		)
Non-cash adjustments	2.2			—			2.2
Balance, December 31, 2015	$	35.0		$	0.6		$	35.6

Salix Integration Costs

As mentioned above, the Company has incurred $110 million of integration costs related to the Salix Acquisition since the acquisition date, which related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $100 million related to Salix integration costs since the acquisition date.

B&L Acquisition-Related Cost-Rationalization and Integration Initiatives

The Company had estimated that it would incur total costs of approximately $600 million (excluding charges of $53 million described under the table below) in connection with the cost-rationalization and integration initiatives relating to the B&L Acquisition, which were substantially completed by the end of 2014. However, restructuring and integration costs of $9 million, in the aggregate, were incurred in 2015. Since the acquisition date, total costs of $578 million (including $52 million related to cost-rationalization measures at a contact lens manufacturing plant in Waterford, Ireland, as described below) were incurred through December 31, 2015, including (i) $308 million of restructuring expenses, (ii) $257 million of integration expenses, and (iii) $13 million of acquisition-related costs. The Company does not expect to incur any additional costs beyond 2015. The estimate of total costs incurred primarily included: employee termination costs payable to approximately 3,000 employees of the Company and B&L who have been or will be terminated as a result of the B&L Acquisition; IPR&D termination costs related to the transfer to other parties of product-development programs that did not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs.

B&L Restructuring Costs

The following table summarizes the major components of the restructuring costs incurred in connection with the B&L Acquisition since the acquisition date through December 31, 2015:



	Employee Termination Costs						Contract Termination, Facility Closure and Other Costs
	Severance and Related Benefits			Share-Based Compensation⁽¹⁾			Contract Termination, Facility Closure and Other Costs			Total
Balance, January 1, 2013	$	—		$	—		$	—		$	—
Costs incurred and charged to expense	155.7			52.8			25.6			234.1
Cash payments	(77.8		)	(52.8		)	(7.8		)	(138.4		)
Non-cash adjustments	11.4			—			(6.8		)	4.6
Balance, December 31, 2013	$	89.3		$	—		$	11.0		$	100.3
Costs incurred and charged to expense	46.0			—			23.7			69.7
Cash payments	(110.7		)	—			(24.9		)	(135.6		)
Non-cash adjustments	(5.7		)	—			(5.4		)	(11.1		)
Balance, December 31, 2014	$	18.9		$	—		$	4.4		$	23.3
Costs incurred and charged to expense	2.9			—			2.2			5.1
Cash payments	(17.9		)	—			(2.8		)	(20.7		)
Non-cash adjustments	(1.6		)	—			(0.9		)	(2.5		)
Balance, December 31, 2015	$	2.3		$	—		$	2.9		$	5.2

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(1)	Relates to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition. These charges were reclassified in 2014 to Other expense (income) to conform to the current year presentation.

B&L Integration Costs

As mentioned above, the Company has incurred $257 million of integration costs related to the B&L Acquisition since the acquisition date. In the years ended December 31, 2015, 2014 and 2013, the Company incurred $8 million, $133 million and $116 million, respectively, of integration costs related to the B&L Acquisition, which related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $11 million, $144 million and $102 million related to B&L integration costs for the years ended December 31, 2015, 2014 and 2013, respectively.

In addition to the restructuring and integration costs described above, the Company has recognized $52 million of restructuring costs related to a contact lens manufacturing plant in Waterford, Ireland (the plant was acquired as part of the B&L Acquisition) since the acquisition date (substantially all of which were recognized in the second quarter of 2014). These costs related to employee termination costs with respect to cost-rationalization measures. A reduction of $4 million was recognized in the second quarter of 2015 based on revised estimates. The Company made payments of $22 million and $24 million with respect to this initiative for the years ended December 31, 2015 and 2014, respectively.

Other Restructuring and Integration-Related Costs (Excluding Salix and B&L)

In the year ended December 31, 2015, in addition to the restructuring and integration costs associated with the Salix Acquisition and the B&L Acquisition described above, the Company incurred an additional $151 million of other restructuring, integration-related and other costs. These costs included (i) $95 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $48 million of severance costs, (iii) $7 million of facility closure costs, and (iv) $1 million of other costs. These costs primarily related to integration and restructuring costs for the acquisition of certain assets of Dendreon and other smaller acquisitions. The Company made payments of $125 million during the year ended December 31, 2015 (in addition to the payments related to the Salix Acquisition and the B&L Acquisition described above).

In the year ended December 31, 2014, in addition to the restructuring and integration costs associated with the B&L Acquisition described above, the Company incurred an additional $123 million of other restructuring, integration-related and other costs. These costs included (i) $79 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $25 million of severance costs, (iii) $12 million of facility closure costs, and (iv) $7 million of other costs. These costs primarily related to (i) integration and restructuring costs for the Solta Medical acquisition and other smaller acquisitions and (ii) intellectual property migration and the global consolidation of the Company’s manufacturing facilities. The Company made payments of $117 million during the year ended December 31, 2014 (in addition to the payments related to the B&L Acquisition described above).

In the year ended December 31, 2013, in addition to the restructuring and integration costs associated with the B&L Acquisition described above, the Company incurred an additional $165 million of other restructuring, integration-related and other costs. These costs included (i) $74 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $43 million of facility closure costs, (iii) $35 million of severance costs, and (iv) $13 million of other costs, including non-personnel manufacturing integration costs. These costs primarily related to (i) integration and restructuring costs for other smaller acquisitions, (ii) intellectual property migration and the global consolidation of the Company’s manufacturing facilities, and (iii) systems integration initiatives. The Company made payments of $177 million during the year ended December 31, 2013 (in addition to the payments related to the B&L Acquisition described above).

As described in Note 23, restructuring costs are not recorded in the Company’s reportable segments.