RESTRUCTURING CHARGES AND ASSET IMPAIRMENTS, NET

The Company’s restructuring activities are undertaken as necessary to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company’s businesses and to relocate manufacturing operations to best cost manufacturing locations.

The Company's restructuring charges consist primarily of employee costs (principally severance and/or termination benefits), facility closure and other costs, curtailment losses (gains) related to reductions of pension and retiree medical benefit obligations as a result of headcount reductions, and asset impairments related to restructuring activities.



	Three Months Ended June 30,
	2016
	Powertrain			Motorparts			Corporate		Total
Severance and other charges, net	$	(2	)	$	(4	)	$	—	$	(6	)
Asset impairments related to restructuring activities	—			—			—		—
Total restructuring charges	(2		)	(4		)	—		(6		)

Other asset impairments	—			—			—		—
Total restructuring charges and asset impairments	$	(2	)	$	(4	)	$	—	$	(6	)


	2015
	Powertrain			Motorparts			Corporate		Total
Severance and other charges, net	$	(2	)	$	(25	)	$	—	$	(27	)
Asset impairments related to restructuring activities	—			(1		)	—		(1		)
Total restructuring charges	(2		)	(26		)	—		(28		)

Other asset impairments	(2		)	—			—		(2		)
Total restructuring charges and asset impairments	$	(4	)	$	(26	)	$	—	$	(30	)


	Six Months Ended June 30,
	2016
	Powertrain			Motorparts			Corporate		Total
Severance and other charges, net	$	(14	)	$	(7	)	$	—	$	(21	)
Asset impairments related to restructuring activities	—			—			—		—
Total restructuring charges	(14		)	(7		)	—		(21		)

Impairment of assets held for sale	—			(3		)	—		(3		)
Total restructuring charges and asset impairments	$	(14	)	$	(10	)	$	—	$	(24	)

	2015
	Powertrain			Motorparts			Corporate		Total
Severance and other charges, net	$	(8	)	$	(31	)	$	—	$	(39	)
Asset impairments related to restructuring activities	—			(1		)	—		(1		)
Total restructuring charges	(8		)	(32		)	—		(40		)

Other asset impairments	(2		)	(1		)	—		(3		)
Total restructuring charges and asset impairments	$	(10	)	$	(33	)	$	—	$	(43	)

Estimates of restructuring charges are based on information available at the time such charges are recorded. In certain countries where the Company operates, statutory requirements include involuntary termination benefits that extend several years into the future. Accordingly, severance payments continue well past the date of termination at many international locations. Thus, restructuring programs appear to be ongoing when, in fact, terminations and other activities have been substantially completed.

Restructuring opportunities include potential plant closures and employee headcount reductions in various countries that require consultation with various parties including, but not limited to, unions/works councils, local governments, and/or customers. The consultation process can take a significant amount of time and affect the final outcome and timing. The Company's policy is to record a provision for qualifying restructuring costs in accordance with the applicable accounting guidance when the outcome of such consultations becomes probable.

Management expects to finance its restructuring programs through cash generated from its ongoing operations or through cash available under its existing credit facility, subject to the terms of applicable covenants. Management does not expect that the execution of these programs will have an adverse effect on its liquidity position.

The following table provides a quarterly summary of the Company’s restructuring liabilities and related activity as of and for the six months ended June 30, 2016 and 2015 by reporting segment:



	Powertrain			Motorparts			Total Reporting Segment			Corporate		Total Company
Balance at December 31, 2015	$	33		$	47		$	80		$	—	$	80
Provisions	12			3			15			—		15
Payments	(5		)	(6		)	(11		)	—		(11		)
Foreign Currency	1			1			2			—		2
Balance at March 31, 2016	41			45			86			—		86
Provisions	2			4			6			—		6
Payments	(7		)	(6		)	(13		)	—		(13		)
Foreign Currency	(1		)	(1		)	(2		)	—		(2		)
Balance at June 30, 2016	$	35		$	42		$	77		$	—	$	77



	Powertrain			Motorparts			Total Reporting Segment			Corporate			Total Company
Balance at December 31, 2014	$	36		$	16		$	52		$	1		$	53
Provisions	6			6			12			—			12
Payments	(10		)	(5		)	(15		)	(1		)	(16		)
Acquisitions	2			—			2			—			2
Foreign Currency	(3		)	(1		)	(4		)	—			(4		)
Balance at March 31, 2015	31			16			47			—			47
Provisions	6			25			31			—			31
Reversals	(4		)	—			(4		)	—			(4		)
Payments	(16		)	(6		)	(22		)	—			(22		)
Balance at June 30, 2015	$	17		$	35		$	52		$	—		$	52

The following table provides a quarterly summary of the Company’s restructuring liabilities and related activity for each type of exit cost as of and for the three and six months ended June 30, 2016 and 2015. As the table indicates, facility closure costs are typically paid within the quarter of incurrence.



	Employee Costs			Facility Closure and Other Costs			Total
Balance at December 31, 2015	$	79		$	1		$	80
Provisions	13			2			15
Payments	(9		)	(2		)	(11		)
Foreign Currency	2			—			2
Balance at March 31, 2016	85			1			86
Provisions	5			1			6
Payments	(12		)	(1		)	(13		)
Foreign Currency	(2		)	—			(2		)
Balance at June 30, 2016	$	76		$	1		$	77



	Employee Costs			Facility Closure and Other Costs			Total
Balance at December 31, 2014	$	51		$	2		$	53
Provisions	10			2			12
Payments	(13		)	(3		)	(16		)
Acquisitions	2			—			2
Foreign Currency	(4		)	—			(4		)
Balance at March 31, 2015	46			1			47
Provisions	29			2			31
Reversals	(4		)	—			(4		)
Payments	(20		)	(2		)	(22		)
Balance at June 30, 2015	$	51		$	1		$	52

Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated. The Company did not change its estimate of any previously recorded liabilities during the three and six months ended June 30, 2016.

Restructuring charges and asset impairments for the three months ended June 30, 2016 were comprised of $2 million related to the Powertrain segment and $4 million related to the Motorparts segment. The charges include severance related costs of $2 million in EMEA for the Powertrain segment. For the Motorparts segment, the charges include severance related costs of $2 million in EMEA and $1 million North America, and $1 million of facility closure and other costs in North America.

Restructuring charges and asset impairments for the six months ended June 30, 2016 were comprised of $14 million related to the Powertrain segment and $10 million related to the Motorparts segment. The charges include severance related costs of $9 million in EMEA, $3 million in North America, and $1 million in ROW for the Powertrain segment. In addition, there was $1 million in facility closure and other costs in ROW for the Powertrain segment. For the Motorparts segment, the charges include severance related costs of $3 million in North America, and $2 million in EMEA, and facility closure and other costs of $2 million in North America. In addition, there was $3 million in asset impairments in EMEA for the Motorparts segment.

Restructuring expenses for the six months ended June 30, 2016 are aimed at optimizing the Company's cost structure. We expect to complete these programs in 2017 and incur additional restructuring and other charges of approximately $1 million. For programs previously initiated in prior periods, we expect to complete these programs in 2018 and incur additional restructuring and other charges of approximately $4 million.

See Note 6, Assets Held for Sale and Discontinued Operations, for further details related to the $3 million impairment loss on assets held for sale in the six months ended June 30, 2016.