Restructuring Costs

During the six months ended June 30, 2013, we recorded net pre-tax restructuring costs totaling $240 million for new and ongoing restructuring actions as follows:



(Dollars in millions)
Otis	$	49
UTC Climate, Controls & Security	38
Pratt & Whitney	100
UTC Aerospace Systems	41
Sikorsky	14
Restructuring costs recorded within continuing operations	242
Restructuring costs recorded within discontinued operations	(2		)
Total	$	240

The net costs included $101 million recorded in cost of sales, $140 million in selling, general and administrative expenses, $1 million in other income, net, and ($2) million in discontinued operations. As described below, these costs primarily relate to actions initiated during 2013 and 2012.

2013 Actions. During the six months ended June 30, 2013, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations. We recorded net pre-tax restructuring costs totaling $202 million, including $68 million in cost of sales and $134 million in selling, general and administrative expenses.

We expect the actions initiated in the six months ended June 30, 2013 to result in net workforce reductions of approximately 2,400 hourly and salaried employees, the exiting of approximately 400 thousand net square feet of facilities and the disposal of assets associated with exited facilities. As of June 30, 2013, we have completed net workforce reductions of approximately 700 employees. We are targeting the majority of the remaining workforce and all facility related cost reduction actions for completion during 2013 and 2014. No specific plans for significant other actions have been finalized at this time.

The following table summarizes the accrual balances and utilization by cost type for the 2013 restructuring actions:



(Dollars in millions)	Severance			Asset Write-Downs			Facility Exit, Lease Termination and Other Costs		Total
Restructuring accruals at March 31, 2013	$	13		$	—		$	—	$	13
Net pre-tax restructuring costs	163			12			7		182
Utilization and foreign exchange	(23		)	(12		)	—		(35		)
Balance at June 30, 2013	$	153		$	—		$	7	$	160

The following table summarizes expected, incurred and remaining costs for the 2013 restructuring actions by type:



(Dollars in millions)	Severance			Asset Write-Downs			Facility Exit, Lease Termination and Other Costs			Total
Expected costs	$	215		$	12		$	33		$	260
Costs incurred - quarter ended March 31, 2013	(19		)	—			(1		)	(20		)
Costs incurred - quarter ended June 30, 2013	(163		)	(12		)	(7		)	(182		)
Balance at June 30, 2013	$	33		$	—		$	25		$	58

The following table summarizes expected, incurred and remaining costs for the 2013 restructuring actions by segment:



(Dollars in millions)	Expected Costs		Costs incurred Quarter ended March 31, 2013			Costs incurred Quarter ended June 30, 2013			Remaining Costs at June 30, 2013
Otis	$	53	$	(6	)	$	(35	)	$	12
UTC Climate, Controls & Security	51		(8		)	(18		)	25
Pratt & Whitney	111		(6		)	(93		)	12
UTC Aerospace Systems	37		—			(28		)	9
Sikorsky	8		—			(8		)	—
Total	$	260	$	(20	)	$	(182	)	$	58

2012 Actions. During the six months ended June 30, 2013, we recorded net pre-tax restructuring costs totaling $38 million for restructuring actions initiated in 2012, including $31 million in cost of sales, $6 million in selling, general and administrative expenses, and $1 million in other income, net. The 2012 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations.

As of June 30, 2013, we have completed net workforce reductions of approximately 5,900 employees of an expected 7,100 employees, and have exited approximately 1.4 million net square feet of facilities of an expected 3 million net square feet. We are targeting the majority of the remaining workforce and facility related cost reduction actions for completion during 2013 and 2014.

The following table summarizes the accrual balances and utilization by cost type for the 2012 restructuring actions:



(Dollars in millions)	Severance			Asset Write-Downs		Facility Exit, Lease Termination and Other Costs			Total
Restructuring accruals at March 31, 2013	$	201		$	—	$	51		$	252
Net pre-tax restructuring costs	(1		)	—		10			9
Utilization and foreign exchange	(58		)	—		(14		)	(72		)
Balance at June 30, 2013	$	142		$	—	$	47		$	189

The following table summarizes expected, incurred and remaining costs for the 2012 restructuring actions by type:



(Dollars in millions)	Severance			Asset Write-Downs			Facility Exit, Lease Termination and Other Costs			Total
Expected costs	$	480		$	15		$	162		$	657
Costs incurred through December 31, 2012	(452		)	(14		)	(110		)	(576		)
Costs incurred - quarter ended March 31, 2013	(18		)	(1		)	(10		)	(29		)
Costs incurred - quarter ended June 30, 2013	1			—			(10		)	(9		)
Balance at June 30, 2013	$	11		$	—		$	32		$	43

The following table summarizes expected, incurred and remaining costs for the 2012 restructuring actions by segment:



(Dollars in millions)	Expected Costs		Costs incurred through December 31, 2012			Costs incurred Quarter ended March 31, 2013			Costs incurred Quarter ended June 30, 2013			Remaining Costs at June 30, 2013
Otis	$	154	$	(146	)	$	(1	)	$	(2	)	$	5
UTC Climate, Controls & Security	153		(123		)	(14		)	(1		)	15
Pratt & Whitney	99		(94		)	(1		)	—			4
UTC Aerospace Systems	152		(121		)	(8		)	(5		)	18
Sikorsky	54		(47		)	(5		)	(1		)	1
Eliminations and other	19		(19		)	—			—			—
Discontinued operations	26		(26		)	—			—			—
Total	$	657	$	(576	)	$	(29	)	$	(9	)	$	43

2011 Actions. As of June 30, 2013, we have approximately $17 million of accrual balances remaining related to 2011 actions.