Restructuring Charges

3 Months Ended

Mar. 31, 2018

Restructuring and Related Activities [Abstract]

From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position ourselves based on the economic environment and customer demand. During the three months ended March 31, 2018, we recognized restructuring charges of $10 million. We incurred these charges primarily as a continuation of our efforts to reposition our European and North American businesses to optimize our cost structure and improve our operational efficiency and effectiveness. The charges included the reduction of headcount and consolidation of facilities within our Measurement & Control Solutions and Water Infrastructure segments, as well as headcount reductions within our Applied Water segment.

During the three months ended March 31, 2017, we recognized restructuring charges of $7 million. We incurred these charges primarily in an effort to reposition our European and North American businesses to optimize our cost structure and improve our operational efficiency and effectiveness. The charges included the reduction of headcount and consolidation of facilities within our Applied Water and Water Infrastructure segments, as well as Corporate headcount reductions.

The following table presents the components of restructuring expense and asset impairment charges.



	Three Months Ended
	March 31,
(in millions)	2018		2017
By component:
Severance and other charges	$	9	$	8
Lease related charges	1		—
Reversal of restructuring accruals	—		(1		)
Total restructuring charges	$	10	$	7
Asset impairment	—		5
Total restructuring and asset impairment charges	$	10	$	12

By segment:
Water Infrastructure	$	3	$	2
Applied Water	1		8
Measurement & Control Solutions	6		2
Corporate and other	—		—

The following table displays a rollforward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within accrued and other current liabilities, for the three months ended March 31, 2018 and 2017.



(in millions)	2018			2017
Restructuring accruals - January 1	$	7		$	15
Restructuring charges	10			7
Cash payments	(5		)	(8		)
Foreign currency and other	—			—
Restructuring accruals - March 31	$	12		$	14

By segment:
Water Infrastructure	$	1		$	1
Applied Water	1			7
Measurement & Control Solutions	6			4
Regional selling locations (a)	3			2
Corporate and other	1			—


(a)	Regional selling locations consist primarily of selling and marketing organizations that incurred restructuring expense which was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments.

The following is a rollforward for the three months ended March 31, 2018 and 2017 of employee position eliminations associated with restructuring activities.



	2018		2017
Planned reductions - January 1	47		188
Additional planned reductions	102		28
Actual reductions and reversals	(45	)	(133	)
Planned reductions - March 31	104		83

The following table presents expected restructuring spend:



(in millions)	Water Infrastructure		Applied Water		Measurement & Control Solutions		Corporate		Total
Actions Commenced in 2018:
Total expected costs	$	5	$	1	$	8	$	—	$	14
Costs incurred during Q1 2018	2		1		5		—		8
Total expected costs remaining	$	3	$	—	$	3	$	—	$	6

Actions Commenced in 2017:
Total expected costs	$	20	$	12	$	2	$	—	$	34
Costs incurred during 2017	5		4		2		—		11
Costs incurred during Q1 2018	1		—		—		—		1
Total expected costs remaining	$	14	$	8	$	—	$	—	$	22

Actions Commenced in 2016:
Total expected costs	$	13	$	14	$	11	$	2	$	40
Costs incurred during 2016	11		10		6		2		29
Costs incurred during 2017	2		4		3		—		9
Costs incurred during Q1 2018	—		—		1		—		1
Total expected costs remaining	$	—	$	—	$	1	$	—	$	1

The Water Infrastructure, Applied Water, and Measurement & Control Solutions actions commenced in 2018 consist primarily of severance charges and are expected to continue through the end of 2018. The Water Infrastructure, Applied Water, and Measurement & Control Solutions actions commenced in 2017 consist primarily of severance charges and are expected to continue through the end of 2018. The Measurement & Control Solution actions commenced in 2016 are expected to continue through the end of 2018.

Asset Impairment Charges

During the first quarter of 2017 we determined that certain assets within our Applied Water segment, including a tradename, were impaired. Accordingly we recognized an impairment charge of $5 million. Refer to Note 10, "Goodwill and Other Intangible Assets," for additional information.