SIGNIFICANT RESTRUCTURING AND IMPAIRMENT COSTS

To better align its resources with its growth strategies and reduce the cost structure of its global operations to address the softness in certain underlying markets, the Company commits to restructuring plans as necessary.

In fiscal 2016, the Company committed to a significant restructuring plan (2016 Plan) and recorded $535 million of restructuring and impairment costs in the consolidated statements of income, of which $229 million was recorded in the second quarter, $102 million was recorded in the third quarter and $204 million was recorded in the fourth quarter of fiscal 2016. This is the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related to cost reduction initiatives in the Company’s Automotive Experience, Building Efficiency and Power Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures, asset impairments, change-in-control payments and immaterial changes in estimates to prior year plans. Of the restructuring and impairment costs recorded, $284 million related to the Automotive Experience Seating segment, $115 million related to Corporate, $66 million related to the Power Solutions segment, $26 million related to the Building Efficiency Asia segment, $17 million related to the Automotive Experience Interiors segment, $16 million related to the Building Efficiency Rest of World segment, $9 million related to the Building Efficiency Products North America segment, and $2 million related to the Building Efficiency Systems and Service North America segment. The restructuring actions are expected to be substantially complete in fiscal 2017.

The following table summarizes the changes in the Company’s 2016 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):



	Employee Severance and Termination Benefits			Long-Lived Asset Impairments			Other			Currency Translation		Total

Original Reserve	$	308		$	190		$	37		$	—	$	535
Utilized—cash	(29		)	—			—			—		(29		)
Utilized—noncash	—			(190		)	(8		)	1		(197		)
Balance at September 30, 2016	$	279		$	—		$	29		$	1	$	309

In fiscal 2015, the Company committed to a significant restructuring plan (2015 Plan) and recorded $397 million of restructuring and impairment costs in the consolidated statements of income. This is the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related to cost reduction initiatives in the Company’s Automotive Experience, Building Efficiency and Power Solutions businesses and at Corporate. The costs consist primarily of workforce reductions, plant closures and asset impairments. Of the restructuring and impairment costs recorded, $182 million related to the Automotive Experience Seating segment, $166 million related to Corporate, $13 million related to the Building Efficiency Rest of World segment, $11 million related to the Power Solutions segment, $11 million related to the Building Efficiency Asia segment, $11 million related to the Building Efficiency Products North America segment, and $3 million related to the Building Efficiency Systems and Service North America segment. The restructuring actions are expected to be substantially complete in 2016.

The following table summarizes the changes in the Company’s 2015 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):



	Employee Severance and Termination Benefits			Long-Lived Asset Impairments			Other			Total

Original Reserve	$	191		$	183		$	23		$	397
Utilized—noncash	—			(183		)	—			(183		)
Balance at September 30, 2015	$	191		$	—		$	23		$	214
Utilized—cash	(74		)	—			(23		)	(97		)
Balance at September 30, 2016	$	117		$	—		$	—		$	117

In fiscal 2014, the Company committed to a significant restructuring plan (2014 Plan) and recorded $324 million of restructuring and impairment costs in the consolidated statements of income. This is the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related primarily to cost reduction initiatives in the Company’s Automotive Experience, Building Efficiency and Power Solutions businesses and included workforce reductions, plant closures, and asset and goodwill impairments. Of the restructuring and impairment costs recorded, $130 million related to the Automotive Experience Interiors segment, $119 million related to the Building Efficiency Rest of World segment, $29 million related to the Automotive Experience Seating segment, $16 million related to the Power Solutions segment, $12 million related to the Building Efficiency Systems and Service North America segment, $7 million related to the Building Efficiency Products North America segment, $7 million related to Corporate and $4 million related to the Building Efficiency Asia segment. The restructuring actions are expected to be substantially complete in 2016.

Additionally, the Company recorded $53 million of restructuring and impairment costs within discontinued operations related to the Automotive Experience Electronics business in fiscal 2014.

The following table summarizes the changes in the Company’s 2014 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):



	Employee Severance and Termination Benefits			Long-Lived Asset Impairments			Goodwill Impairment			Other			Currency Translation			Total

Original Reserve	$	191		$	134		$	47		$	5		$	—		$	377
Utilized—cash	(8		)	—			—			—			—			(8		)
Utilized—noncash	—			(134		)	(47		)	—			(6		)	(187		)
Balance at September 30, 2014	$	183		$	—		$	—		$	5		$	(6	)	$	182
Utilized—cash	(65		)	—			—			(5		)	—			(70		)
Utilized—noncash	—			—			—			—			(13		)	(13		)
Balance at September 30, 2015	$	118		$	—		$	—		$	—		$	(19	)	$	99
Utilized—cash	(74		)	—			—			—			—			(74		)
Utilized—noncash	—			—			—			—			(2		)	(2		)
Balance at September 30, 2016	$	44		$	—		$	—		$	—		$	(21	)	$	23

In fiscal 2013, the Company committed to a significant restructuring plan (2013 Plan) and recorded $903 million of restructuring and impairment costs in the consolidated statements of income. This is the total amount incurred to date and the total amount expected to be incurred for this restructuring plan. The restructuring actions related to cost reduction initiatives in the Company’s Automotive Experience, Building Efficiency and Power Solutions businesses and included workforce reductions, plant closures, and asset and goodwill impairments. Of the restructuring and impairment costs recorded, $560 million related to the Automotive Experience Interiors segment, $152 million related to the Automotive Experience Seating segment, $70 million related to the Building Efficiency Rest of World segment, $36 million related to the Power Solutions segment, $35 million related to the Building Efficiency Systems and Service North America segment, $28 million related to the Building Efficiency Products North America segment, $17 million related to Corporate and $5 million related to the Building Efficiency Asia segment. The restructuring actions are expected to be substantially complete in 2016.

Additionally, the Company recorded $82 million of restructuring costs within discontinued operations, of which $54 million related to the GWS business and $28 million related to the Automotive Experience Electronics business in fiscal 2013.

The following table summarizes the changes in the Company’s 2013 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):



	Employee Severance and Termination Benefits			Long-Lived Asset Impairments			Goodwill Impairment			Other			Currency Translation			Total

Original Reserve	$	392		$	156		$	430		$	7		$	—		$	985
Utilized—cash	(26		)	—			—			—			—			(26		)
Utilized—noncash	—			(156		)	(430		)	(4		)	4			(586		)
Transfer to liabilities held for sale	(31		)	—			—			—			—			(31		)
Balance at September 30, 2013	$	335		$	—		$	—		$	3		$	4		$	342
Utilized—cash	(144		)	—			—			(3		)	—			(147		)
Utilized—noncash	—			—			—			—			(11		)	(11		)
Transfer from liabilities held for sale	31			—			—			—			—			31
Transfer to liabilities held for sale	(24		)	—			—			—			—			(24		)
Balance at September 30, 2014	$	198		$	—		$	—		$	—		$	(7	)	$	191
Utilized—cash	(113		)	—			—			—			—			(113		)
Utilized—noncash	—			—			—			—			(10		)	(10		)
Balance at September 30, 2015	$	85		$	—		$	—		$	—		$	(17	)	$	68
Utilized—cash	(43		)	—			—			—			—			(43		)
Utilized—noncash	—			—			—			—			(1		)	(1		)
Balance at September 30, 2016	$	42		$	—		$	—		$	—		$	(18	)	$	24

The $31 million of transfers from liabilities held for sale represent restructuring reserves that were included in liabilities held for sale in the consolidated statements of financial position at September 30, 2013, but were excluded from liabilities held for sale at September 30, 2014 based on transaction negotiations. See Note 3, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding the Company's assets and liabilities held for sale.

The Company's fiscal 2016, 2015, 2014 and 2013 restructuring plans included workforce reductions of approximately 18,400 employees (11,200 for the Automotive Experience business, 6,200 for the Building Efficiency business, 900 for the Power Solutions business and 100 for Corporate). Restructuring charges associated with employee severance and termination benefits are paid over the severance period granted to each employee or on a lump sum basis in accordance with individual severance agreements. As of September 30, 2016, approximately 11,800 of the employees have been separated from the Company pursuant to the restructuring plans. In addition, the restructuring plans included twenty-nine plant closures (twenty-two for Automotive Experience and seven for Building Efficiency). As of September 30, 2016, twelve of the twenty-nine plants have been closed.

Refer to Note 16, "Impairment of Long-Lived Assets," of the notes to consolidated financial statements for further information regarding the long-lived asset impairment charges recorded as part of the restructuring actions.

Refer to Note 6, "Goodwill and Other Intangible Assets," of the notes to consolidated financial statements for further information regarding the goodwill impairment charges recorded.

Company management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in low cost countries in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering and purchasing operations, as well as the overall global footprint for all its businesses. Because of the importance of new vehicle sales by major automotive manufacturers to operations, the Company is affected by the general business conditions in this industry. Future adverse developments in the automotive industry could impact the Company’s liquidity position, lead to impairment charges and/or require additional restructuring of its operations.