
Note 14.	Restructuring and Other Costs, Net

Restructuring and other costs, net, in the first three months of 2019 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. and Europe; third-party transaction/integration costs related to recently announced acquisitions and divestiture; and sales of inventories revalued at the date of acquisition. In the first three months of 2019, severance actions associated with facility consolidations and cost reduction measures affected less than 1% of the company’s workforce.

As of May 3, 2019, the company has identified restructuring actions that will result in additional charges of approximately $65 million, primarily in 2019 and 2020, and expects to identify additional actions during 2019 which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

First Three Months of 2019

During the first three months of 2019, 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	$	6	$	—	$	3	$	9
Analytical Instruments	—		6		4		10
Specialty Diagnostics	—		4		1		5
Laboratory Products and Services	—		1		2		3
Corporate	—		—		1		1

	$	6	$	11	$	11	$	28

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

Life Sciences Solutions

In the first three months of 2019, the Life Sciences Solutions segment recorded $9 million of net restructuring and other costs, principally charges to cost of revenues of $6 million for the sales of inventory revalued at the date of acquisition. The segment also recorded $3 million of charges for severance and other costs associated with facility consolidations in the U.S. and Europe.

Analytical Instruments

In the first three months of 2019, the Analytical Instruments segment recorded $10 million of net restructuring and other charges, including $6 million of charges to selling, general, and administrative expense for third-party transaction costs related to the pending acquisition of Gatan. The segment also recorded $4 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

Specialty Diagnostics

In the first three months of 2019, the Specialty Diagnostics segment recorded $5 million of net restructuring and other charges, principally $4 million of charges to selling, general, and administrative expense for third-party transaction costs in connection with the planned sale of the Anatomical Pathology business. The segment also recorded $1 million of charges for severance and other costs associated with facility consolidations in the U.S. and Europe.

Laboratory Products and Services

In the first three months of 2019, the Laboratory Products and Services segment recorded $3 million of net restructuring and other charges. The segment recorded $1 million of charges to selling, general, and administrative expense for third-party transaction costs related to the acquisition of Brammer Bio. The segment also recorded $2 million of restructuring and other costs, primarily for employee severance.

Corporate

In the first three months of 2019, the company recorded $1 million of net restructuring and other 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, 2018	$	34		$	42		$	4		$	80
Cumulative effect of accounting change (b)	—			(28		)	—			(28		)
Costs incurred in 2019	8			—			3			11
Reserves reversed (c)	(1		)	—			—			(1		)
Payments	(7		)	(4		)	(3		)	(14		)

Balance at March 30, 2019	$	34		$	10		$	4		$	48


(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)	Impact of adopting new lease accounting guidance on January 1, 2019.


(c)	Represents reductions in cost of plans.

The company expects to pay accrued restructuring costs primarily through 2019.