Restructuring Charges

9 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring and Asset Impairment Charges

Restructuring

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 and nine months ended September 30, 2019, we recognized restructuring charges of $26 million and $48 million, respectively. 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 and nine months ended September 30, 2018, we recognized restructuring charges of $4 million and $19 million, respectively. 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				Nine Months Ended
	September 30,				September 30,
(in millions)	2019		2018		2019		2018
By component:
Severance and other charges	$	26	$	4	$	46	$	18
Lease related charges	—		—		1		1
Other restructuring charges	—		—		1		—
Total restructuring charges	$	26	$	4	$	48	$	19
Asset impairment	7		—		10		—
Total restructuring and asset impairment charges	$	33	$	4	$	58	$	19
By segment:
Water Infrastructure	$	6	$	2	$	17	$	8
Applied Water	2		1		4		2
Measurement & Control Solutions	25		1		37		9

The following table displays a roll-forward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within accrued and other current liabilities, for the nine months ended September 30, 2019 and 2018:

(in millions)	2019			2018
Restructuring accruals - January 1	$	5		$	7
Restructuring charges	48			19
Cash payments	(21		)	(18		)
Foreign currency and other	(2		)	(1		)
Restructuring accruals - September 30	$	30		$	7
By segment:
Water Infrastructure	$	1		$	1
Applied Water	1			1
Measurement & Control Solutions	21			3
Regional selling locations (a)	7			2
Corporate and other	—			—

(a) Regional selling locations consist primarily of selling and marketing organizations and related support services 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 roll-forward for the nine months ended September 30, 2019 and 2018 of employee position eliminations associated with restructuring activities:

	2019		2018
Planned reductions - January 1	69		47
Additional planned reductions	621		176
Actual reductions and reversals	(465	)	(135	)
Planned reductions - September 30	225		88

The following table presents expected restructuring spend for actions commenced as of September 30, 2019:

(in millions)	Water Infrastructure		Applied Water		Measurement & Control Solutions		Corporate		Total
Actions Commenced in 2019:
Total expected costs	$	18	$	5	$	27	$	—	$	50
Costs incurred during Q1 2019	3		—		3		—		6
Costs incurred during Q2 2019	7		2		5		—		14
Costs incurred during Q3 2019	6		2		18		—		26
Total expected costs remaining	$	2	$	1	$	1	$	—	$	4
Actions Commenced in 2018:
Total expected costs	$	8	$	1	$	7	$	—	$	16
Costs incurred during 2018	7		1		7		—		15
Costs incurred during Q1 2019	1		—		—		—		1
Costs incurred during Q2 2019	—		—		—		—		—
Costs incurred during Q3 2019	—		—		—		—		—
Total expected costs remaining	$	—	$	—	$	—	$	—	$	—
Actions Commenced in 2017:
Total expected costs	$	12	$	7	$	4	$	—	$	23
Costs incurred during 2017	5		4		2		—		11
Costs incurred during 2018	2		1		1		—		4
Costs incurred during Q1 2019	—		—		1		—		1
Costs incurred during Q2 2019	—		—		—		—		—
Costs incurred during Q3 2019	—		—		—		—		—
Total expected costs remaining	$	5	$	2	$	—	$	—	$	7

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 complete. 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 third quarter of 2019 we determined that certain assets within our Measurement & Control Solutions segment, including customer relationships, internally developed software, proprietary technology, and plant property & equipment, were impaired. Accordingly we recognized an impairment charge of $7 million. Refer to Note 10, "Goodwill and Other Intangible Assets," for additional information.

During the first quarter of 2019 we determined that certain assets within our Measurement & 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.