Restructuring Charges

3 Months Ended

Mar. 31, 2019

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, 2019, we recognized restructuring charges of $8 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.

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.

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



	Three Months Ended
	March 31,
(in millions)	2019		2018
By component:
Severance and other charges	$	7	$	9
Lease related charges	1		1
Total restructuring charges	$	8	$	10
Asset impairment	3		—
Total restructuring and asset impairment charges	$	11	$	10

By segment:
Water Infrastructure	$	4	$	3
Applied Water	—		1
Measurement & Control Solutions	7		6

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, 2019 and 2018:



(in millions)	2019			2018
Restructuring accruals - January 1	$	5		$	7
Restructuring charges	8			10
Cash payments	(4		)	(5		)
Restructuring accruals - March 31	$	9		$	12

By segment:
Water Infrastructure	$	2		$	1
Applied Water	—			1
Measurement & Control Solutions	4			6
Regional selling locations (a)	3			3
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, 2019 and 2018 of employee position eliminations associated with restructuring activities:



	2019		2018
Planned reductions - January 1	69		47
Additional planned reductions	158		102
Actual reductions and reversals	(134	)	(45	)
Planned reductions - March 31	93		104

The following table presents expected restructuring spend for actions commenced as of March 31, 2019:



(in millions)	Water Infrastructure		Applied Water		Measurement & Control Solutions		Corporate		Total
Actions Commenced in 2019:
Total expected costs	$	5	$	—	$	6	$	—	$	11
Costs incurred during Q1 2019	3		—		3		—		6
Total expected costs remaining	$	2	$	—	$	3	$	—	$	5

Actions Commenced in 2018:
Total expected costs	$	9	$	1	$	7	$	—	$	17
Costs incurred during 2018	7		1		7		—		15
Costs incurred during Q1 2019	1		—		—		—		1
Total expected costs remaining	$	1	$	—	$	—	$	—	$	1

Actions Commenced in 2017:
Total expected costs	$	16	$	8	$	4	$	—	$	28
Costs incurred during 2017	5		4		2		—		11
Costs incurred during 2018	2		1		1		—		4
Costs incurred during Q1 2019	—		—		1		—		1
Total expected costs remaining	$	9	$	3	$	—	$	—	$	12

The Water Infrastructure, Applied Water, and Measurement & Control Solutions actions commenced in 2019 consist primarily of severance charges and are expected to continue through the end of 2019. 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 third quarter of 2019. 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 fourth quarter of 2020.

Asset Impairment

During the first quarter of 2019 we determined that certain assets within our Measurement and Control Solutions segment, including a customer relationship, were impaired. Accordingly we recognized an impairment charge of $3 million. Refer to Note 10, "Goodwill and Other Intangible Assets," for additional information.