XML 98 R17.htm IDEA: XBRL DOCUMENT v3.20.1
Significant Restructuring Costs
 6 Months Ended
Mar. 31, 2020
Restructuring Charges [Abstract]  
Significant Restructuring and Impairment Costs
Significant Restructuring and Impairment Costs

To better align its resources with its growth strategies and reduce the cost structure of its global operations in certain underlying markets, the Company commits to restructuring plans as necessary.

In the first quarter of fiscal 2020, the Company committed to a significant restructuring plan ("2020 Plan") and recorded $111 million of restructuring and impairment costs in the consolidated statements of income. This was the total amount incurred to date. The restructuring actions related primarily to cost reduction initiatives. The costs consist primarily of workforce reductions, plant closures and asset impairments. Of the restructuring and impairment costs recorded, $87 million related to the Global Products segment, $10 million related to the Building Solutions Asia Pacific segment, $8 million related to the Building Solutions North America segment and $6 million related to the Building Solutions EMEA/LA segment. The restructuring actions are expected to be substantially complete in fiscal 2020.

The following table summarizes the changes in the Company’s 2020 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):

 
Employee Severance and Termination Benefits
 
Long-Lived Asset Impairments
 
Other
 
Total
 
 
 
 
 
 
 
 
Original reserve
$
54

 
$
54

 
$
3

 
$
111

Utilized—cash
(8
)
 
—

 
—

 
(8
)
Utilized—noncash
—

 
(54
)
 
—

 
(54
)
Balance at December 31, 2019
$
46

 
$
—

 
$
3

 
$
49

Utilized—cash
(24
)
 
—

 
(1
)
 
(25
)
Balance at March 31, 2020
$
22

 
$
—

 
$
2

 
$
24



In the second quarter of fiscal 2020, the Company recorded $62 million of restructuring and impairment costs in the consolidated statements of income for indefinite-lived intangible asset impairments. Refer to Note 8, "Goodwill and Other Intangible Assets," of the notes to consolidated financial statements for further information regarding the indefinite-lived intangibles impairments.

In fiscal 2018, the Company committed to a significant restructuring plan ("2018 Plan") and recorded $255 million of restructuring and impairment costs for continuing operations in the consolidated statements of income. This was the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related to cost reduction initiatives in the Company’s Building Technologies & Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures and asset impairments. Of the restructuring and impairment costs recorded, $113 million related to the Global Products segment, $56 million related to the Building Solutions EMEA/LA segment, $50 million related to Corporate, $20 million related to the Building Solutions North America segment and $16 million related to the Building Solutions Asia Pacific segment. The restructuring actions are expected to be substantially complete in 2020.

Additionally, the Company recorded $8 million of restructuring and impairment costs related to Power Solutions in fiscal 2018. This is reported within discontinued operations.

The following table summarizes the changes in the Company’s 2018 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):
 
Employee Severance and Termination Benefits
 
Long-Lived Asset Impairments
 
Other
 
Currency
Translation
 
Total
 
 
 
 
 
 
 
 
 
 
Original reserve
$
209

 
$
42

 
$
12

 
$
—

 
$
263

Utilized—cash
(45
)
 
—

 
(2
)
 
—

 
(47
)
Utilized—noncash
—

 
(42
)
 
—

 
—

 
(42
)
Balance at September 30, 2018
$
164

 
$
—

 
$
10

 
$
—

 
$
174

Utilized—cash
(61
)
 
—

 
(6
)
 
—

 
(67
)
Utilized—noncash
—

 
—

 
—

 
(1
)
 
(1
)
Transfer to liabilities held for sale
(4
)
 
—

 
—

 
—

 
(4
)
Balance at September 30, 2019
$
99

 
$
—

 
$
4

 
$
(1
)
 
$
102

Utilized—cash
(21
)
 
—

 
—

 
—

 
(21
)
Utilized—noncash
—

 
—

 
—

 
1

 
1

Adoption of ASC 8421
—

 
—

 
(4
)
 
—

 
(4
)
Balance at March 31, 2020
$
78


$
—


$
—


$
—


$
78


1Represents liability for facility closings recorded as an offset to right-of-use asset upon adoption of ASC 842.

In fiscal 2017, the Company committed to a significant restructuring plan ("2017 Plan") and recorded $347 million of restructuring and impairment costs for continuing operations in the consolidated statements of income. This was the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related to cost reduction initiatives in the Company’s Building Technologies & Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures and asset impairments. Of the restructuring and impairment costs recorded, $166 million related to Corporate, $74 million related to the Building Solutions EMEA/LA segment, $59 million related to the Building Solutions North America segment, $32 million related to the Global Products segment and $16 million related to the Building Solutions Asia Pacific segment. The restructuring actions are expected to be substantially complete in fiscal 2020.

Additionally, the Company recorded $20 million of restructuring and impairment costs related to Power Solutions in fiscal 2017. This is reported within discontinued operations.

The following table summarizes the changes in the Company’s 2017 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):

 
Employee Severance and Termination Benefits
 
Long-Lived Asset Impairments
 
Other
 
Currency
Translation
 
Total
 
 
 
 
 
 
 
 
 
 
Original reserve
$
276


$
77


$
14


$
—


$
367

Utilized—cash
(75
)
 
—

 
—

 
—

 
(75
)
Utilized—noncash
—

 
(77
)
 
(1
)
 
—

 
(78
)
Adjustment to restructuring reserves
25

 
—

 
—

 
—

 
25

Balance at September 30, 2017
$
226

 
$
—

 
$
13


$
—

 
$
239

Utilized—cash
(152
)
 
—

 
(6
)
 
—

 
(158
)
Utilized—noncash
—

 
—

 
—

 
(1
)
 
(1
)
Balance at September 30, 2018
$
74

 
$
—

 
$
7

 
$
(1
)
 
$
80

Utilized—cash
(11
)
 
—

 
(2
)
 
—

 
(13
)
Utilized—noncash
—

 
—

 
—

 
(3
)
 
(3
)
Transfer to liabilities held for sale
(3
)
 
—

 
—

 
—

 
(3
)
Balance at September 30, 2019
$
60

 
$
—

 
$
5

 
$
(4
)
 
$
61

Utilized—cash
(25
)
 
—

 
—

 
—

 
(25
)
Adoption of ASC 8421
—

 
—

 
(5
)
 
—

 
(5
)
Balance at March 31, 2020
$
35


$
—


$
—


$
(4
)

$
31


1Represents liability for facility closings recorded as an offset to right-of-use asset upon adoption of ASC 842.

The Company's fiscal 2020, 2018 and 2017 restructuring plans included workforce reductions of approximately 11,200 employees (9,000 for the Building Technologies & Solutions business and 2,200 for Corporate). Restructuring charges associated with employee severance and termination benefits are paid over the severance period granted to each employee or on a lump sum basis in accordance with individual severance agreements. As of March 31, 2020, approximately 9,600 of the employees have been separated from the Company pursuant to the restructuring plans. In addition, the restructuring plans included nine plant closures in the Building Technologies & Solutions business. As of March 31, 2020, eight of the nine plants have been closed.

Company management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering and purchasing operations, as well as the overall global footprint for all its businesses.