XML 29 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

Restructuring and Other Costs | 9 Months Ended
--- | ---
Sep. 30, 2020
Restructuring and Related Activities [Abstract] |
Restructuring and Other Costs [Text Block] | Restructuring Costs Restructuring costs are generally expensed as incurred. All U.S. government unallowable restructuring costs related to the Raytheon Merger are recorded within Corporate expenses and other unallocated items, as these costs are not included in management’s evaluation of the segments’ performance, and as a result, there are no unallowable restructuring costs at the RIS and RMD segments. During the quarter and nine months ended September 30, 2020, we recorded net pre-tax restructuring costs totaling $250 million and $685 million, respectively, for new and ongoing restructuring actions. We recorded charges in the segments as follows:
(dollars in millions) | Quarter Ended September 30, 2020 |  | Nine Months Ended September 30, 2020
Pratt & Whitney | $ | 68 |  |  | $ | 175 |
Collins Aerospace Systems | 138 |  |  | 295 |
Corporate expenses and other unallocated items | 44 |  |  | 215 |
Total | $ | 250 |  |  | $ | 685 |
Restructuring charges incurred during the quarter and nine months ended September 30, 2020 primarily relate to actions initiated during 2020 and 2019, and were recorded as follows:
(dollars in millions) | Quarter Ended September 30, 2020 |  | Nine Months Ended September 30, 2020
Cost of sales | $ | 142 |  |  | $ | 330 |
Selling, general and administrative | 103 |  |  | 350 |
Restructuring costs recorded within operating expenses | 245 |  |  | 680 |
Non-service pension (income) expense | 5 |  |  | 5 |
Total | $ | 250 |  |  | $ | 685 |
2020 Actions. During the quarter ended September 30, 2020, we recorded net pre-tax restructuring costs of $240 million, comprised of $139 million in Cost of sales, $96 million in Selling, general and administrative expenses and $5 million in Non-service pension expenses. During the nine months ended September 30, 2020, we recorded net pre-tax restructuring costs of $686 million, comprised of $339 million in Cost of sales, $342 million in Selling, general and administrative expenses and $5 million in Non-service pension expenses. The 2020 actions primarily relate severance and restructuring actions at Pratt & Whitney and Collins Aerospace in response to the anticipated impact on our operating results related to the current economic environment primarily caused by the COVID-19 pandemic, the Raytheon Merger, and ongoing cost reduction efforts including workforce reductions and the consolidation of field and manufacturing operations. The following table summarizes the accrual balance and utilization for the 2020 restructuring actions for the quarter and nine months ended September 30, 2020:
(dollars in millions) | Severance |  | Facility Exit and Other Costs |  | Total
Quarter Ended September 30, 2020 |  |  |  |  |
Restructuring accruals at June 30, 2020 | $ | 395 |  |  | $ | — |  |  | $ | 395 |
Net pre-tax restructuring costs | 232 |  |  | 8 |  |  | 240 |
Utilization, foreign exchange and other costs | (166) |  |  | (8) |  |  | (174) |
Balance at September 30, 2020 | $ | 461 |  |  | $ | — |  |  | $ | 461 |
Nine Months Ended September 30, 2020 |  |  |  |  |
Restructuring accruals at December 31, 2019 | $ | — |  |  | $ | — |  |  | $ | — |
Net pre-tax restructuring costs | 677 |  |  | 9 |  |  | 686 |
Utilization, foreign exchange and other costs | (216) |  |  | (9) |  |  | (225) |
Balance at September 30, 2020 | $ | 461 |  |  | $ | — |  |  | $ | 461 |
The following table summarizes expected, incurred and remaining costs for the 2020 restructuring actions by segment:
(dollars in millions) | Expected Costs |  | Costs Incurred Quarter Ended March 31, 2020 |  | Costs Incurred Quarter Ended June 30, 2020 |  | Costs Incurred Quarter Ended September 30, 2020 |  | Remaining Costs at September 30, 2020
Pratt & Whitney | $ | 198 |  |  | $ | — |  |  | $ | (130) |  |  | $ | (68) |  |  | $ | — |
Collins Aerospace Systems | 309 |  |  | (1) |  |  | (146) |  |  | (128) |  |  | 34 |
Corporate expenses and other unallocated items | 213 |  |  | (1) |  |  | (168) |  |  | (44) |  |  | — |
Total | $ | 720 |  |  | $ | (2) |  |  | $ | (444) |  |  | $ | (240) |  |  | $ | 34 |
We are targeting to complete the majority of the remaining workforce and facility related cost reduction actions during 2020 and 2021. 2019 Actions. During the quarter ended September 30, 2020, we recorded $9 million of net pre-tax restructuring costs for restructuring actions initiated in 2019 comprised of $7 million in Selling, general and administrative expenses and $2 million in Cost of sales. During the nine months ended September 30, 2020, we recorded net pre-tax restructuring costs totaling $5 million for restructuring actions initiated in 2019, including expense of $10 million in Selling, general and administrative expenses, partially offset by a reversal of $5 million in Cost of sales. The 2019 actions relate to ongoing cost reduction efforts, including workforce reductions, consolidation of field and manufacturing operations, and costs to exit legacy programs. The following table summarizes the accrual balances and utilization for the 2019 restructuring actions for the quarter and nine months ended September 30, 2020:
(dollars in millions) | Severance |  | Facility Exit, and Other Costs |  | Total
Quarter Ended September 30, 2020 |  |  |  |  |
Restructuring accruals at June 30, 2020 | $ | 17 |  |  | $ | 10 |  |  | $ | 27 |
Net pre-tax restructuring costs | 9 |  |  | — |  |  | 9 |
Utilization, foreign exchange and other costs | (10) |  |  | — |  |  | (10) |
Balance at September 30, 2020 | $ | 16 |  |  | $ | 10 |  |  | $ | 26 |
Nine Months Ended September 30, 2020 |  |  |  |  |
Restructuring accruals at December 31, 2019 | $ | 47 |  |  | $ | 11 |  |  | $ | 58 |
Net pre-tax restructuring costs | 3 |  |  | 2 |  |  | 5 |
Utilization, foreign exchange and other costs | (34) |  |  | (3) |  |  | (37) |
Balance at September 30, 2020 | $ | 16 |  |  | $ | 10 |  |  | $ | 26 |
The following table summarizes expected, incurred and remaining costs for the 2019 restructuring actions by segment:
(dollars in millions) | Expected Costs |  | Costs Incurred in 2019 |  | Costs Incurred Quarter Ended March 31, 2020 |  | Costs Incurred Quarter Ended June 30, 2020 |  | Costs Incurred Quarter Ended September 30, 2020 |  | Remaining Costs at September 30, 2020
Pratt & Whitney | $ | 121 |  |  | $ | (133) |  |  | $ | — |  |  | $ | 12 |  |  | $ | — |  |  | $ | — |
Collins Aerospace Systems | 106 |  |  | (27) |  |  | (5) |  |  | (3) |  |  | (9) |  |  | 62 |
Corporate expenses and other unallocated items | 2 |  |  | (2) |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 229 |  |  | $ | (162) |  |  | $ | (5) |  |  | $ | 9 |  |  | $ | (9) |  |  | $ | 62 |
2018 and Prior Actions. During the quarter and nine months ended September 30, 2020, we had net pre-tax restructuring costs of $1 million and a reversal of $6 million, respectively, for restructuring actions initiated in 2018 and prior. As of September 30, 2020, we have approximately $51 million of accrual balances remaining related to 2018 and prior actions.

X
- References No definition available. + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration