AbbVie 2014 Annual Report Download - page 80
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13NOV201221352027
Note 8 Restructuring Plans
.....................................................................................................................................................................................................................................................................................................................................................
In 2014 and prior years, AbbVie management approved plans to realign its worldwide manufacturing
operations and selected domestic and international commercial and R&D operations in order to reduce
costs in conjunction with the loss and expected loss of exclusivity of certain products. Restructuring charges
recorded in 2014 were $23 million and were primarily recorded in cost of products sold in the consolidated
statements of earnings with the remainder recorded in SG&A. Included in the charges were cash costs of
$16 million which primarily related to employee severance and contractual obligations.
In 2013, AbbVie management approved plans to restructure certain commercial operations in
conjunction with the loss and expected loss of exclusivity of certain products. Restructuring charges
recorded in 2013 were $83 million and were primarily recorded in SG&A and cost of products sold in the
consolidated statements of earnings with the remainder recorded in R&D. Included in the charges were
cash costs of $76 million which mainly related to employee severance and contractual obligations.
In 2012, AbbVie management approved plans to realign its worldwide manufacturing operations and
selected domestic and international commercial and R&D operations in order to reduce costs. In 2012,
AbbVie incurred restructuring charges of approximately $191 million for employee severance and
contractual obligations, primarily related to the exit from an R&D facility with $183 million recorded within
R&D and $8 million within SG&A expenses in the consolidated statements of earnings.
The following summarizes the cash activity in the restructuring reserve for the years ended
December 31, 2014 and 2013:
(in millions)
Accrued balance at December 31, 2011 $ 149
2012 restructuring charges 191
Payments and other adjustments (107)
Accrued balance at December 31, 2012 233
2013 restructuring charges 76
Payments and other adjustments (118)
Accrued balance at December 31, 2013 191
2014 restructuring charges 16
Payments and other adjustments (85)
Accrued balance at December 31, 2014 $ 122
Payments and other adjustments for 2013 included a $23 million reversal of a previously recorded
restructuring reserve due to the company’s re-evaluation of a prior year decision to exit a manufacturing
facility. In 2012, AbbVie recorded additional restructuring charges of $69 million, primarily for accelerated
depreciation.
74 2014 Form 10-K