Restructuring Charges

During the three and nine months ended September 30, 2015, we recognized restructuring charges of $1 million and $5 million, respectively. 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 elimination of headcount and consolidation of facilities within our Water Infrastructure segment.

During the three and nine months ended September 30, 2014, we recognized restructuring charges of less than $1 million and $18 million, respectively, within both our Water Infrastructure and Applied Water segments for the same aforementioned purposes for which we incurred the 2015 charges.

The following table presents the components of restructuring expense for the three and nine months ended September 30, 2015 and 2014.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2015		2014		2015			2014
By component:
Severance and other charges	$	1	$	—	$	6		$	18
Reversal of restructuring accruals	—		—		(1		)	—
Total restructuring charges	$	1	$	—	$	5		$	18

By segment:
Water Infrastructure	$	1	$	—	$	5		$	12
Applied Water	—		—		—			6

The following table displays a rollforward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within accrued and other current liabilities, as of September 30, 2015 and 2014.



(in millions)	2015			2014
Restructuring accruals - January 1	$	12		$	13
Restructuring charges	5			18
Cash payments	(11		)	(20		)
Foreign currency and other	(1		)	—
Restructuring accruals - September 30	$	5		$	11

By segment:
Water Infrastructure	$	2		$	6
Applied Water	—			2
Regional selling locations (a)	3			3


(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 nine months ended September 30, 2015 and 2014 of employee position eliminations associated with restructuring activities.



	2015		2014
Planned reductions - January 1	133		51
Additional planned reductions	87		233
Actual reductions	(120	)	(206	)
Planned reductions - September 30	100		78

Total expected costs associated with actions that commenced during the nine months ended September 30, 2015 are approximately $6 million and are all within Water Infrastructure. These costs primarily consist of severance charges. Related to these actions, we incurred $1 million and $4 million for Water Infrastructure during the three and nine months ended September 30, 2015, respectively. We currently expect activity related to these actions to continue through the second quarter of 2016.

Total expected costs associated with actions that commenced during 2014 are approximately $19 million for Water Infrastructure. Approximately $18 million of the expected cost was incurred in 2014, no additional costs were incurred during the three months ended September 30, 2015, and $1 million was incurred during the nine months ended September 30, 2015. The Water Infrastructure actions commenced in 2014 are substantially complete. Total expected costs associated with actions that commenced during 2014 are approximately $6 million for Applied Water. Approximately $6 million of the expected cost was incurred in 2014, substantially all of the costs associated with these actions have been incurred.