Rationalization Of Operations

3 Months Ended

Dec. 31, 2012

Rationalization of operations expense reflects costs associated with the Company’s efforts to continually improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Details of the change in the liability for rationalization during the three months ended December 31, 2012 follow (in millions):



	Sept 30, 2012		Expense	Paid/Utilized	Dec 31, 2012
Severance and benefits	$	23	7	8	22
Lease and other contract terminations	5		—	1	4
Vacant facility and other shutdown costs	3		2	2	3
Start-up and moving costs	1		7	7	1
Total	$	32	16	18	30

Rationalization of operations expense by segment is summarized below (in millions):



	Three Months Ended December 31,
	2011		2012
Process Management	$	5	3
Industrial Automation	4		5
Network Power	10		4
Climate Technologies	2		1
Commercial & Residential Solutions	2		3
Total	$	23	16

The Company expects to incur full year 2013 rationalization expense of approximately $70 million to $80 million. This includes the $16 million incurred to date, as well as costs to complete actions initiated before the end of the first quarter and actions anticipated to be approved and initiated during the remainder of the year. Severance and benefits costs are associated with forcecount reduction, mainly for Industrial Automation in Asia and North America and Network Power in Asia. Start-up and moving costs to redeploy assets to best cost locations and expand geographically to directly serve local markets were incurred in all segments.

- 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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