We are continuing to undertake actions to transform our cost structure and enhance operational efficiency. In recent years, these efforts have included restructuring the organization into verticalized segments, optimizing the manufacturing footprint, research and development (R&D) operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions, some of which are still ongoing. We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, that are not material to our condensed consolidated financial statements, through the completion of certain initiatives that are currently underway. We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies that arose as a result of the sale of our Kidney Care business, and we expect to incur additional restructuring charges and costs in future periods to implement business optimization programs. For segment reporting, business optimization charges are unallocated expenses.


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2026		2025		2026		2025
Restructuring charges	$	2	$	14	$	63	$	58
Costs to implement business optimization programs1	5		3		12		4

Total business optimization charges	$	7	$	17	$	75	$	62

1Costs to implement business optimization programs for the three and six months ended June 30, 2026 and 2025, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. These costs were primarily included within cost of sales and SG&A expense.

During the three and six months ended June 30, 2026 and 2025, we recorded the following restructuring charges.


	Three months ended June 30, 2026
(in millions)	COGS		SG&A		R&D		Total
Employee termination costs	$	1	$	(1)	$	—	$	—
Contract termination and other costs	1		—		1		2

Total restructuring charges	$	2	$	(1)	$	1	$	2



	Six months ended June 30, 2026
(in millions)	COGS		SG&A		R&D		Total
Employee termination costs	$	11	$	34	$	13	$	58
Contract termination and other costs	2		—		2		4
Asset write offs	—		1		—		1
Total restructuring charges	$	13	$	35	$	15	$	63



	Six months ended June 30, 2025
(in millions)	COGS		SG&A		R&D		Total
Employee termination costs	$	11	$	19	$	1	$	31
Contract termination and other costs	2		2		—		4
Asset write offs	4		19		—		23
Total restructuring charges	$	17	$	40	$	1	$	58

For the six months ended June 30, 2026, $58 million, and for the three and six months ended June 30, 2025, $6 million and $31 million, respectively, of the restructuring charges reflected in the table above, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care business.

The following table summarizes activity in the liability related to our restructuring initiatives.


(in millions)
Liability balance as of December 31, 2025	$	133
Charges	69
Payments	(96)
Reserve adjustments	(7)
Currency translation	(1)
Liability balance as of June 30, 2026	$	98

Substantially all of our restructuring liabilities as of June 30, 2026 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2027.