
Note 14.	Restructuring and Other Costs, Net

Restructuring and other costs in the first three months of 2016 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S., Europe and Asia; third-party acquisition transaction costs associated with the acquisition of Affymetrix; and synergy costs related to acquisitions including severance and abandoned facility costs. These charges were partially offset by gains on settlement of litigation and gains on sales of real estate. In the first three months of 2016, severance actions associated with facility consolidations and cost reduction measures affected less than 1% of the company’s workforce.

As of May 6, 2016, the company has identified restructuring actions that will result in additional charges of approximately $45 million, primarily in 2016 which will be recorded when specified criteria are met, such as abandonment of leased facilities.

First Three Months of 2016

During the first three months of 2016, the company recorded net restructuring and other costs by segment as follows:



(In millions)	Cost of Revenues		Selling, General and Administrative Expenses		Restructuring and Other Costs, Net		Total

Life Sciences Solutions	$	4.4	$	26.5	$	28.8	$	59.7
Analytical Instruments	—		—		19.1		19.1
Specialty Diagnostics	—		—		0.4		0.4
Laboratory Products and Services	6.2		0.4		2.0		8.6
Corporate	—		2.0		0.3		2.3

	$	10.6	$	28.9	$	50.6	$	90.1

The components of net restructuring and other costs by segment are as follows:

Life Sciences Solutions

In the first three months of 2016, the Life Sciences Solutions segment recorded $59.7 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $4.4 million to conform the accounting policies of Affymetrix with the company's accounting policies. The segment also recorded $26.5 million of charges to selling, general and administrative expenses, including $23.6 million of third-party transaction costs related to the acquisition of Affymetrix, and $3.0 million for accelerated depreciation at facilities closing due to real estate consolidation. In addition, the segment recorded $28.8 million of restructuring and other costs, net, consisting of $41.4 million of cash costs partially offset by $12.0 million of gain on the settlement of a pre-acquisition litigation-related matter and $0.6 million of other non-cash income, net. The cash costs primarily related to acquisition synergies and included $24.7 million of severance and related costs, as well as $16.7 million of abandoned facilities costs primarily related to the consolidation of facilities in the U.S.

Analytical Instruments

In the first three months of 2016, the Analytical Instruments segment recorded $19.1 million of net restructuring and other charges, including $21.8 million of cash costs primarily associated with abandoned facilities, including remediation and other closure costs of a manufacturing facility in the U.S. The cash costs were partially offset by $2.7 million of gains on the sale of real estate.

Specialty Diagnostics

In the first three months of 2016, the Specialty Diagnostics segment recorded $0.4 million of net restructuring and other charges, including cash costs of $1.1 million primarily for severance and other costs associated with headcount reductions and facility consolidations, substantially offset by non-cash gains.

Laboratory Products and Services

In the first three months of 2016, the Laboratory Products and Services segment recorded $8.6 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $6.2 million for sales of inventories revalued at the date of acquisition, as well as $0.4 million of charges to selling, general and administrative expenses for accelerated depreciation at facilities closing due to real estate consolidation. In addition, the segment recorded $2.8 million of cash restructuring costs, primarily for employee severance and other costs associated with headcount reductions. The segment also recorded $1.3 million of gain on the settlement of litigation, offset in part by other non-cash charges.

Corporate

In the first three months of 2016, the company recorded $2.3 million of restructuring and other costs, including $2.0 million of selling, general, and administrative charges, associated with accelerated depreciation on information systems to be abandoned due to acquisition synergies, and $0.3 million of cash restructuring costs for severance at its corporate operations.

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs, net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.



(In millions)	Severance			Abandonment of Excess Facilities			Other (a)			Total

Balance at December 31, 2015	$	15.2		$	13.1		$	3.0		$	31.3
Costs incurred in 2016 (c)	29.7			35.1			3.0			67.8
Reserves reversed (b)	(0.3		)	(0.1		)	—			(0.4		)
Payments	(11.0		)	(7.6		)	(3.1		)	(21.7		)
Currency translation	0.2			—			—			0.2

Balance at April 2, 2016	$	33.8		$	40.5		$	2.9		$	77.2


(a)	Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.


(b)	Represents reductions in cost of plans.


(c)	Excludes $16.8 million of income, net, primarily associated with litigation-related matters and sales of real estate.

The company expects to pay accrued restructuring costs as follows: severance, employee-retention obligations and other costs, primarily through 2016; and abandoned-facility payments, over lease terms expiring through 2027.