Restructuring Charges

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

In the first quarter of 2014, we announced a cost reduction plan (“the Plan”), which includes a worldwide workforce reduction and other cost reduction measures. In connection with the Plan, we recognized restructuring charges of $154 million and $283 million in the three and nine months ended September 30, 2014, respectively.

In the three and nine months ended September 30, 2014, our restructuring charges include one-time termination (severance) benefits of $21 million and $119 million, respectively, asset impairment charges of $117 million and $138 million, respectively, and other restructuring charges of $16 million and $26 million, respectively. Other restructuring charges include contract termination costs, relocation and other associated costs.

The impairments recognized in the third quarter primarily pertain to operations in our MENA region, where geopolitical issues and recent disruptions in North Africa, primarily Libya, resulted in the decisions in the third quarter to exit product lines in selected markets. The Plan activities resulted in $93 million of cash payments during the nine months ended September 30, 2014.

As of September 30, 2014, we completed our planned headcount reductions and closures of underperforming operating locations. The following tables present the components of the restructuring charges by segment.



	Three Months Ended September 30, 2014
(Dollars in millions)	North America		MENA/Asia Pacific		Europe/SSA/Russia		Latin America		Corporate and Research and Development		Total
Severance, asset impairment and other restructuring charges	$	15	$	116	$	10	$	13	$	—	$	154



	Nine Months Ended September 30, 2014
(Dollars in millions)	North America		MENA/Asia Pacific		Europe/SSA/Russia		Latin America		Corporate and Research and Development		Total
Severance, asset impairment and other restructuring charges	$	44	$	135	$	37	$	37	$	30	$	283

Total severance, asset impairment and other restructuring charges for the nine months ended September 30, 2014 of $283 million includes $138 million in asset impairments and $145 million of severance and other restructuring charges.

The severance and other restructuring charges gave rise to certain liabilities, the components of which are summarized below, and largely relate to the severance accrued as part of the Plan that will be paid pursuant to the respective arrangements and statutory requirements.



	At September 30, 2014
(Dollars in millions)	North America		MENA/Asia Pacific		Europe/SSA/Russia		Latin America		Corporate and Research and Development		Total
Severance and other restructuring liability	$	1	$	16	$	16	$	—	$	13	$	46

The following table presents the restructuring accrual activity for the nine months ended September 30, 2014.



			Nine Months Ended September 30, 2014
(Dollars in millions)	Accrued Balance at December 31, 2013		Charges		Cash Payments			Other			Accrued Balance at September 30, 2014
Severance charges	$	—	$	119	$	(81	)	$	(6	)	$	32
Other restructuring charges	—		26		(12		)	—			14
Severance and other restructuring liability	$	—	$	145	$	(93	)	$	(6	)	$	46

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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