RESTRUCTURING, INTEGRATION AND SEPARATION COSTS

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING, INTEGRATION AND SEPARATION COSTS

RESTRUCTURING, INTEGRATION AND SEPARATION COSTS

Restructuring and integration costs

The Company evaluates opportunities to improve its operating results and implements cost savings programs to streamline its operations and eliminate redundant processes and expenses. Restructuring and integration costs are expenses associated with the implementation of these cost savings programs and include expenses associated with: (i) reducing headcount, (ii) eliminating real estate costs associated with unused or under-utilized facilities and (iii) implementing contribution margin improvement and other cost reduction initiatives. The liability associated with restructuring and integration costs as of March 31, 2021 was $18 million.

During the three months ended March 31, 2021, the Company incurred $3 million of restructuring and integration costs. These costs included: (i) $2 million of facility closure costs and (ii) $1 million of severance costs. The Company made payments of $5 million for the three months ended March 31, 2021.

During the three months ended March 31, 2020, the Company incurred $4 million of restructuring and integration costs. These costs included: (i) $3 million of facility closure costs and (ii) $1 million of severance costs. The Company made payments of $4 million for the three months ended March 31, 2020.

Separation costs and Separation-related costs

The Company has incurred, and will incur, costs associated with activities to effectuate the Separation. These activities include: (i) separating the eye-health business from the remainder of the Company and (ii) registering the eye-health business as an independent publicly traded entity. Separation costs are incremental costs directly related to the Separation and include, but are not limited to: (i) legal, audit and advisory fees, (ii) employee hiring, relocation and travel costs and (iii) costs associated with establishing a new board of directors and audit committee. Included in Restructuring, integration and separation costs for the three months ended March 31, 2021 and 2020 are Separation costs of $9 million and $0, respectively.

The Company has also incurred, and will incur, Separation-related costs which are incremental costs indirectly related to the Separation. Separation-related costs include, but are not limited to: (i) IT infrastructure and software licensing costs, (ii) rebranding costs and (iii) costs associated with facility relocation and/or modification. Included in Selling, general and administrative expenses for the three months ended March 31, 2021 and 2020 are Separation-related costs of $20 million and $0, respectively.

The Company continues to make progress toward internal objectives necessary for the Separation and the extent and timing of future charges for these costs cannot be reasonably estimated at this time and could be material.