Significant Restructuring and Impairment Costs

12 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

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. Restructuring plans generally result in charges for workforce reductions, plant closures, asset impairments and other related costs which are reported as restructuring and impairment costs in the Company’s consolidated statements of income. The other related costs consist primarily of consulting costs incurred as a direct result of the restructuring initiatives. The Company expects the restructuring actions to reduce cost of sales and SG&A due to reduced employee-related costs, depreciation and amortization expense.

In fiscal 2021, the Company committed to a significant multi-year restructuring plan ("2021 Plan") which is expected to be completed during fiscal 2023. The Company originally expected to incur $385 million of restructuring costs across all segments and at Corporate through fiscal 2023. The Company has incurred and exceeded these costs during fiscal 2022 due to certain restructuring actions and expenses planned for fiscal 2023 being accelerated into fiscal 2022. In total, the Company recorded $424 million of restructuring and impairment costs related to the 2021 Plan, which is the total amount expected to be incurred for this restructuring plan.

The following table summarizes restructuring and impairment costs related to the 2021 Plan (in millions):


	Year Ended September 30, 2022		Inception to September 30, 2022

Building Solutions North America	$	41	$	111
Building Solutions EMEA/LA	33		62
Building Solutions Asia Pacific	21		49
Global Products	75		166
Corporate	12		36
Total	$	182	$	424

The following table summarizes the changes in the Company’s 2021 Plan reserve, included primarily within other current liabilities in the consolidated statements of financial position (in millions):


	Employee Severance and Termination Benefits		Long-Lived Asset Impairments (1)		Other		Total

Original reserve	$	68	$	98	$	76	$	242
Utilized—cash	(28)		—		(51)		(79)
Utilized—noncash	—		(98)		—		(98)

Balance at September 30, 2021	40		—		25		65
Additional restructuring costs	116		17		49		182
Utilized—cash	(81)		—		(66)		(147)
Utilized—noncash	—		(17)		—		(17)
Currency translation	(1)		—		—		(1)
Balance at September 30, 2022	$	74	$	—	$	8	$	82

(1) Of the $98 million of long-lived asset impairment charges in fiscal 2021, $50 million related to the Global Products segment, $33 million related to the Building Solutions North America segment, $6 million related to Corporate assets, $5 million related to the Building Solutions EMEA/LA segment and $4 million related to the Building Solutions Asia Pacific segment. Of the $17 million of long-lived asset impairment charges in fiscal 2022, $6 million related to the Building Solutions Asia Pacific segment, $5 million related to Corporate assets, $3 million related to the Global Products segment, $2 million related to the Building Solutions EMEA/LA segment and $1 million related to the Building Solutions North America segment.

The 2021 Plan included workforce reductions of approximately 6,200 employees. 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 September 30, 2022, approximately 4,000 of the employees have been separated from the Company pursuant to the restructuring plans.

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.