Restructuring and Related Expenses

12 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

In the first quarter 2019, we initiated corporate restructuring activities to re-align our international commercial organization through re-prioritization of certain geographical markets and to implement operational excellence through strategic reallocation of resources.

In the first quarter 2017, we initiated a company-wide restructuring designed to help position the Company for sustainable, long-term growth that we believe will further allow us to fulfill our mission of serving patients and families with rare diseases. In September 2017, we committed to an operational plan to re-align the global organization with its refocused corporate strategy. The re-alignment included the relocation of the Company's headquarters to Boston, Massachusetts and a reduction of the Company's global workforce. The restructuring was designed to result in cost

savings by focusing the development portfolio, simplifying business structures and process across the Company's global operations, and closing multiple Alexion sites.

The following table summarizes the total expenses recorded related to the restructuring activities by type of activity and the locations recognized within the consolidated statements of operations:



	December 31, 2019								December 31, 2018										December 31, 2017
	Employee Separation Costs		Asset-Related Charges		Other		Total		Employee Separation Costs		Asset-Related Charges		Other			Total			Employee Separation Costs		Asset-Related Charges		Other		Total
Cost of sales	$	—	$	—	$	—	$	—	$	—	$	5.8	$	—		$	5.8		$	—	$	152.1	$	—	$	152.1
Research and development	—		—		—		—		—		0.1		—			0.1			—		16.3		—		16.3
Selling, general and administrative	—		—		—		—		—		19.4		—			19.4			—		10.9		—		10.9
Restructuring expenses	8.4		—		3.6		12.0		4.6		—		20.9			25.5			87.3		—		17.3		104.6
Other income and (expense)	—		—		—		—		—		—		(0.1		)	(0.1		)	—		—		2.6		2.6
	$	8.4	$	—	$	3.6	$	12.0	$	4.6	$	25.3	$	20.8		$	50.7		$	87.3	$	179.3	$	19.9	$	286.5

Employee separation costs are associated with headcount reductions, as well as corporate employees not relocating to the Company's headquarters in 2018.

Asset-related charges consist of accelerated depreciation costs and asset impairment charges. Accelerated depreciation costs primarily relates to site closures, including ARIMF (which was sold to a third-party in 2018). Accelerated depreciation costs represent the difference between the depreciation expense recognized over the revised useful life of the asset, based upon the anticipated date the site closure, and the depreciation expense as determined using the useful life prior to the restructuring activities. Asset impairment charges primarily related to manufacturing assets that will no longer be utilized due to the 2017 restructuring activities.

Other costs consist of contract termination expenses, relocation costs, and other costs incurred as a direct result of an exit plan.

The following table presents a reconciliation of the restructuring reserve recorded within accounts payable and accrued expenses on the Company's consolidated balance sheets for the years ended December 31, 2019 and 2018:



	December 31, 2019											December 31, 2018
	Employee Separation Costs			Asset-Related Charges		Other			Total			Employee Separation Costs			Asset-Related Charges			Other			Total
Liability, beginning of year	$	4.2		$	—	$	—		$	4.2		$	53.8		$	—		$	4.4		$	58.2
Charges	14.2			—		3.0			17.2			5.8			25.3			21.1			52.2
Settlements	(9.3		)	—		(0.1		)	(9.4		)	(54.2		)	—			(25.2		)	(79.4		)
Adjustments to previous estimates	(5.8		)	—		0.6			(5.2		)	(1.2		)	—			(0.3		)	(1.5		)
Non Cash Activity	—			—		—			—			—			(25.3		)	—			(25.3		)
Liability, end of year	$	3.3		$	—	$	3.5		$	6.8		$	4.2		$	—		$	—		$	4.2

The restructuring reserve of $6.8 and $4.2 is recorded in accounts payable and accrued expenses on the Company's consolidated balance sheet as of December 31, 2019 and 2018, respectively. The accrued amounts are expected to be paid in the next twelve months. We estimate incurring an immaterial amount of additional restructuring expenses relating to the first quarter 2019 action.