
Note 13.	Restructuring and Other Costs, Net

Restructuring and other costs in the first six months of 2017 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; costs to achieve synergies related to acquisitions, including severance and abandoned facility costs; third-party acquisition transaction and integration costs primarily associated with the acquisition of FEI and the pending acquisition of Patheon; charges for changes in estimates of acquisition contingent consideration; sales of inventories revalued at the date of acquisition; and net charges for litigation matters. In the first six months of 2017, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of August 4, 2017, the company has identified restructuring actions that will result in additional charges of approximately $80 million, primarily in 2017 and 2018, which will be recorded when specified criteria are met, such as communication of benefit arrangements and abandonment of leased facilities.

Second Quarter of 2017

During the second quarter of 2017, 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	$	0.4	$	0.5	$	15.7	$	16.6
Analytical Instruments	—		1.0		0.4		1.4
Specialty Diagnostics	—		—		1.7		1.7
Laboratory Products and Services	0.3		5.3		3.3		8.9
Corporate	—		—		1.4		1.4

	$	0.7	$	6.8	$	22.5	$	30.0

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

Life Sciences Solutions

In the second quarter of 2017, the Life Sciences Solutions segment recorded $17 million of net restructuring and other charges, principally cash restructuring costs primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

Analytical Instruments

In the second quarter of 2017, the Analytical Instruments segment recorded $1 million of net restructuring and other charges, principally selling, general, and administrative expenses for third party acquisition transaction costs.

Specialty Diagnostics

In the second quarter of 2017, the Specialty Diagnostics segment recorded $2 million of net restructuring and other charges, all of which were cash costs, primarily for employee severance and other costs associated with headcount reductions in the U.S. and Europe.

Laboratory Products and Services

In the second quarter of 2017, the Laboratory Products and Services segment recorded $9 million of net restructuring and other charges. The segment recorded $5 million of charges to selling, general, and administrative expenses, principally for third party transaction costs related to the pending acquisition of Patheon (Note 2). The segment also recorded $3 million of cash restructuring costs, primarily for employee severance and other costs associated with facility consolidations in Europe.

Corporate

In the second quarter of 2017, the company recorded $1 million of net restructuring and other charges, principally charges for the settlement of a retirement plan.

First Six Months of 2017

During the first six months of 2017, 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	$	0.7	$	28.3	$	31.0	$	60.0
Analytical Instruments	30.6		4.6		6.8		42.0
Specialty Diagnostics	—		—		3.0		3.0
Laboratory Products and Services	0.3		5.4		3.8		9.5
Corporate	—		—		1.4		1.4

	$	31.6	$	38.3	$	46.0	$	115.9

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

Life Sciences Solutions

In the first six months of 2017, the Life Sciences Solutions segment recorded $60 million of net restructuring and other charges. The segment recorded $28 million of charges to selling, general and administrative expenses, principally for changes in estimates of acquisition contingent consideration. In addition, the segment recorded $31 million of restructuring and other costs, including $17 million of severance and related costs primarily to achieve acquisition synergies, $12 million of abandoned facilities costs principally for the consolidation of facilities in the U.S, and $2 million of charges for litigation-related matters at acquired businesses.

Analytical Instruments

In the first six months of 2017, the Analytical Instruments segment recorded $42 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $31 million for the sales of inventory revalued at the date of acquisition; $5 million of charges to selling, general, and administrative expense for third-party transaction costs related to recent acquisitions; and $7 million of restructuring and other costs, primarily for severance and other costs to achieve acquisition synergies.

Specialty Diagnostics

In the first six months of 2017, the Specialty Diagnostics segment recorded $3 million of net restructuring and other charges, all of which were cash costs, primarily for employee severance and other costs associated with headcount reductions in the U.S. and Europe.

Laboratory Products and Services

In the first six months of 2017, the Laboratory Products and Services segment recorded $10 million of net restructuring and other charges. The segment recorded $5 million of charges to selling, general, and administrative expenses, principally for third party transaction costs related to the pending acquisition of Patheon. The segment also recorded $4 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in Europe.

Corporate

In the first six months of 2017, the company recorded $1 million of net restructuring and other charges, principally charges for the settlement of a retirement plan.

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, 2016	$	38.2		$	31.9		$	2.2		$	72.3
Costs incurred in 2017 (c)	28.2			9.6			5.8			43.6
Reserves reversed (b)	(3.4		)	—			(0.8		)	(4.2		)
Payments	(34.3		)	(8.3		)	(5.3		)	(47.9		)
Currency translation	0.6			0.1			0.7			1.4

Balance at July 1, 2017	$	29.3		$	33.3		$	2.6		$	65.2


(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 $7 million of charges, net, primarily associated with litigation-related matters and the settlement of retirement plans.

The company expects to pay accrued restructuring costs as follows: severance, employee-retention obligations and other costs, primarily through 2017; and abandoned-facility payments, over lease terms expiring through 2027.