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RESTRUCTURING COSTS

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING COSTS

RESTRUCTURING COSTS

During the quarters ended March 31, 2020 and 2019, we recorded net pre-tax restructuring costs totaling $5 million and $33 million, respectively, for new and ongoing restructuring actions in our segments as follows:

			For the Quarters Ended March 31,
(dollars in millions)			2020						2019
HVAC			$	2					$	17
Refrigeration			—						3
Fire & Security			3						13
Total restructuring costs			$	5					$	33

Restructuring charges incurred during the quarters ended March 31, 2020 and 2019 primarily relate to actions initiated during 2020 and 2019, and are recorded as follows:

			For the Quarters Ended March 31,
(dollars in millions)			2020						2019
Cost of sales			$	1					$	5
Selling, general and administrative			4						28
Total restructuring costs			$	5					$	33

2020 Actions. During the quarter ended March 31, 2020, we recorded net pre-tax restructuring costs of $2 million for restructuring actions initiated in 2020, consisting of $1 million in Cost of sales and $1 million in Selling, general and administrative. The 2020 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations. We are targeting to complete the majority of the remaining actions in 2021.

The following table summarizes the accrual balance and utilization for the 2020 restructuring actions:

(dollars in millions)			Severance						Facility Exit, Lease Termination and Other Costs						Total
Restructuring accruals as of January 1, 2020			$	—					$	—					$	—
Net pre-tax restructuring costs			2						—						2
Utilization, foreign exchange and other costs			—						—						—
Balance as of March 31, 2020			$	2					$	—					$	2

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																		Remaining Costs at March 31, 2020
HVAC			$	3					$	(1)																	$	2
Refrigeration			—						—																		—
Fire & Security			1						(1)																		—
Eliminations and other			—						—																		—
Total			$	4					$	(2)																	$	2

2019 Actions. During the quarters ended March 31, 2020 and 2019, we recorded net pre-tax restructuring costs totaling $3 million and $25 million, respectively, for restructuring actions initiated in 2019, consisting of $0 million and $2 million in Cost of products and Cost of services sold and $3 million and $23 million in Selling, general and administrative, respectively. The 2019 actions relate to ongoing cost reduction efforts, including workforce reductions and consolidation of field operations. The following table summarizes the accrual balances and utilization for the 2019 restructuring actions:

(dollars in millions)			Severance						Facility Exit, Lease Termination and Other Costs						Total
Restructuring accruals as of January 1, 2020			$	43					$	1					$	44
Net pre-tax restructuring costs			3						—						3
Utilization, foreign exchange and other costs			(14)						(1)						(15)
Balance as of March 31, 2020			$	32					$	—					$	32

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																		Remaining Costs at March 31, 2020
HVAC			$	53					$	(51)					$	(1)																	$	1
Refrigeration			16						(14)						—																		2
Fire & Security			49						(43)						(2)																		4
Eliminations and other			2						(2)						—																		—
Total			$	120					$	(110)					$	(3)																	$	7

2018 and Prior Actions. During the quarters ended March 31, 2020 and 2019, we recorded net pre-tax restructuring costs totaling $0 million and $8 million, respectively, for restructuring actions initiated in 2018 and prior. As of March 31, 2020 and 2019, we had approximately $13 million and $47 million, respectively, of accrual balances remaining related to 2018 and prior actions.

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- References

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- 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

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