Restructuring and Other Costs (Income), Net

3 Months Ended

Mar. 28, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Other Costs, Net [Text Block]

Note 12. Restructuring and Other Costs, Net

Restructuring and other costs, net, in the first three months of 2020 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, and, to a lesser extent, transaction/integration costs related to recent and pending acquisitions. In the first three months of 2020, severance actions associated with facility consolidations and cost reduction measures affected less than 0.5% of the company’s workforce.

As of May 1, 2020, the company has identified restructuring actions that will result in additional charges of approximately $65 million, primarily in 2020, and expects to identify additional actions during 2020 which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

During the first three months of 2020, 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
Analytical Instruments	—		—		14		14
Specialty Diagnostics	—		4		2		6
Laboratory Products and Services	2		2		18		22
Corporate	—		—		3		3
	$	2	$	6	$	38	$	46

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

Analytical Instruments

In the first three months of 2020, the Analytical Instruments segment recorded $14 million of net restructuring and other charges, primarily for employee severance associated with headcount reductions in the U.S. and Europe, and, to a lesser extent, abandoned facility costs.

Specialty Diagnostics

In the first three months of 2020, the Specialty Diagnostics segment recorded $6 million of net restructuring and other charges, primarily $4 million of charges to selling, general, and administrative expense for third-party transaction/acquisition-related costs. The segment also recorded $2 million of cash restructuring charges for severance and other costs associated with headcount reductions in Europe and the U.S.

Laboratory Products and Services

In the first three months of 2020, the Laboratory Products and Services segment recorded $22 million of net restructuring and other charges. The segment recorded $2 million of charges to cost of revenues to conform the accounting policies of a recently acquired business with the company’s accounting policies and $2 million of charges to selling, general, and administrative expense for third-party integration costs in connection with this acquisition. The segment recorded $18 million of restructuring and other costs, including $10 million of cash charges for employee severance at businesses streamlining operations. The segment also recorded $8 million of non-cash charges for writedowns of fixed assets to estimated disposal value in connection with the consolidation of commercial production operations in the U.S.

Corporate

In the first three months of 2020, the company recorded $3 million of net restructuring and other costs for severance at its corporate operations, and, to a lesser extent, abandoned facility costs.

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, 2019	18		$	10	$	6	$	34
Costs incurred in 2020 (c)	23		4		3		30
Reserves reversed (b)	(1)		—		—		(1)
Payments	(10)		(3)		(2)		(15)
Balance at March 28, 2020	$	30	$	11	$	7	$	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)Represents reductions in cost of plans.

(c)Excludes $9 million of charges for fixed asset writedowns and costs associated with environmental remediation at an abandoned facility.

The company expects to pay accrued restructuring costs primarily through 2020.