
Note 13.	Restructuring and Other Costs, Net

Restructuring and other costs in the first nine 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 acquisitions of FEI and Patheon; sales of inventories revalued at the date of acquisition; charges to conform the accounting policies of Patheon to the company's accounting policies; charges for changes in estimates of acquisition contingent consideration; and net charges for litigation matters. In the first nine months of 2017, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of November 3, 2017, the company has identified restructuring actions that will result in additional charges of approximately $85 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.

Third Quarter of 2017

During the third 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	$	0.2		$	6.4	$	7.0
Analytical Instruments	—		1.5			5.9		7.4
Specialty Diagnostics	0.6		—			15.5		16.1
Laboratory Products and Services	44.1		42.7			20.5		107.3
Corporate	—		(8.0		)	0.8		(7.2		)

	$	45.1	$	36.4		$	49.1	$	130.6

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

Life Sciences Solutions

In the third quarter of 2017, the Life Sciences Solutions segment recorded $7 million of net restructuring and other charges, principally cash restructuring costs for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

Analytical Instruments

In the third quarter of 2017, the Analytical Instruments segment recorded $7 million of net restructuring and other charges, principally cash restructuring costs for employee severance and other costs to achieve acquisition synergies in Europe. The segment recorded $2 million of selling, general, and administrative expenses for third-party transaction and integration costs related to recent acquisitions.

Specialty Diagnostics

In the third quarter of 2017, the Specialty Diagnostics segment recorded $16 million of net restructuring and other charges, primarily charges for litigation-related matters.

Laboratory Products and Services

In the third quarter of 2017, the Laboratory Products and Services segment recorded $107 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $44 million, including $27 million to conform the accounting policies of Patheon to the company's accounting policies, $15 million for sales of inventory revalued at the date of acquisition, and $2 million for accelerated depreciation at facilities closing due to real estate consolidation. The segment recorded $43 million of charges to selling, general, and administrative expenses, including $37 million for third party acquisition transaction costs, as well as $6 million to confirm the accounting policies of Patheon to the company's accounting policies. The segment also recorded $21 million of restructuring and other costs, net, primarily for employee severance and compensation due at Patheon on the date of acquisition.

Corporate

In the third quarter of 2017, the company recorded $7 million of net restructuring and other income principally $8 million of income within selling, general, and administrative expenses for favorable results of product liability litigation. The company also recorded $1 million of cash restructuring costs for severance at its corporate operations.

First Nine Months of 2017

During the first nine 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	$	1.1	$	28.5		$	37.4	$	67.0
Analytical Instruments	30.6		6.1			12.7		49.4
Specialty Diagnostics	0.6		—			18.5		19.1
Laboratory Products and Services	44.4		48.1			24.3		116.8
Corporate	—		(8.0		)	2.2		(5.8		)

	$	76.7	$	74.7		$	95.1	$	246.5

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

Life Sciences Solutions

In the first nine months of 2017, the Life Sciences Solutions segment recorded $67 million of net restructuring and other charges. The segment recorded $29 million of charges to selling, general and administrative expenses, principally for changes in estimates of acquisition contingent consideration. In addition, the segment recorded $37 million of restructuring and other costs, including $20 million of severance and related costs primarily to achieve acquisition synergies, $16 million of abandoned facilities costs principally for the consolidation of facilities in the U.S, and $2 million of net charges for litigation-related matters at acquired businesses.

Analytical Instruments

In the first nine months of 2017, the Analytical Instruments segment recorded $49 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; $6 million of charges to selling, general, and administrative expense for third-party transaction and integration costs related to recent acquisitions; and $13 million of restructuring and other costs, primarily for severance and other costs to achieve acquisition synergies.

Specialty Diagnostics

In the first nine months of 2017, the Specialty Diagnostics segment recorded $19 million of net restructuring and other charges, principally charges for litigation-related matters, and, to a lesser extent, cash costs for employee severance and other costs associated with headcount reductions in the U.S. and Europe.

Laboratory Products and Services

In the first nine months of 2017, the Laboratory Products and Services segment recorded $117 million of net restructuring and other charges. The segment recorded charges to cost of revenues of $44 million, including $27 million to conform the accounting policies of Patheon to the company's accounting policies, $15 million for sales of inventory revalued at the date of acquisition, and $2 million for accelerated depreciation at facilities closing due to real estate consolidation. The segment also recorded $48 million of charges to selling, general, and administrative expenses, including $42 million for third-party acquisition transaction costs, as well as $6 million to conform the accounting policies of Patheon to the company's accounting policies. The segment also recorded $24 million of restructuring and other costs, primarily for employee severance and compensation due at Patheon on the date of acquisition.

Corporate

In the first nine months of 2017, the company recorded $6 million of net restructuring and other income, principally $8 million of income for favorable results of product liability litigation, partially offset by charges for the settlement of a retirement plan and 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, 2016	$	38.2		$	31.9		$	2.2		$	72.3
Costs incurred in 2017 (c)	49.3			15.8			9.3			74.4
Reserves reversed (b)	(8.4		)	(0.2		)	(0.3		)	(8.9		)
Payments	(48.0		)	(13.6		)	(9.3		)	(70.9		)
Currency translation	0.9			0.1			0.7			1.7

Balance at September 30, 2017	$	32.0		$	34.0		$	2.6		$	68.6


(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 $30 million of charges, net, primarily associated with litigation-related matters, non-cash compensation due at an acquired business, 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.