The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives: | ||||||||||||
Year Ended December 31, | ||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | |||||||||
Restructuring charges(a): | ||||||||||||
Employee terminations | $ | 805 | $ | 953 | $ | 1,741 | ||||||
Asset impairments | 165 | 325 | 255 | |||||||||
Exit costs | 68 | 150 | 122 | |||||||||
Total restructuring charges | 1,038 | 1,428 | 2,118 | |||||||||
Transaction costs(b) | — | 1 | 30 | |||||||||
Integration costs(c) | 144 | 381 | 693 | |||||||||
Restructuring charges and certain acquisition-related costs | 1,182 | 1,810 | 2,841 | |||||||||
Additional depreciation––asset restructuring recorded in our consolidated statements of income as follows(d): | ||||||||||||
Cost of sales | 178 | 257 | 550 | |||||||||
Selling, informational and administrative expenses | 19 | 20 | 72 | |||||||||
Research and development expenses | 94 | 296 | 606 | |||||||||
Total additional depreciation––asset restructuring | 291 | 573 | 1,228 | |||||||||
Implementation costs recorded in our consolidated statements of income as follows(e): | ||||||||||||
Cost of sales | 53 | 31 | 250 | |||||||||
Selling, informational and administrative expenses | 145 | 130 | 25 | |||||||||
Research and development expenses | 33 | 231 | 71 | |||||||||
Total implementation costs | 231 | 392 | 346 | |||||||||
Total costs associated with acquisitions and cost-reduction/productivity initiatives | $ | 1,704 | $ | 2,775 | $ | 4,415 | ||||||
(a) | From the beginning of our cost-reduction/productivity initiatives in 2005 through December 31, 2013, Employee terminations represent the expected reduction of the workforce by approximately 65,100 employees, mainly in manufacturing, sales and research, of which approximately 56,500 employees have been terminated as of December 31, 2013. In 2013, substantially all employee termination costs represent additional costs with respect to approximately 2,900 employees. |
• | Primary Care operating segment ($255 million), Specialty Care and Oncology operating segment ($138 million), Established Products and Emerging Markets operating segment ($98 million), Consumer Healthcare operating segment ($5 million), research and development operations ($13 million), manufacturing operations ($356 million) and Corporate ($173 million). |
• | Primary Care operating segment ($295 million), Specialty Care and Oncology operating segment ($174 million), Established Products and Emerging Markets operating segment ($125 million), Consumer Healthcare operating segment ($46 million), research and development operations ($6 million income), manufacturing operations ($281 million) and Corporate ($513 million). |
• | Primary Care operating segment ($593 million), Specialty Care and Oncology operating segment ($220 million), Established Products and Emerging Markets operating segment ($110 million), Consumer Healthcare operating segment ($8 million), research and development operations ($490 million), manufacturing operations ($277 million) and Corporate ($420 million). |
(b) | Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services. |
(c) | Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. |
(d) | Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions. |
(e) | Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives. |