Restructurings and Impairments

Restructuring charges are recorded based on restructuring plans that have been committed to by management and are, in part, based upon management's best estimates of future events. Changes to the estimates may require future adjustments to the restructuring liabilities.

Restructuring Liability

The following tables summarize the activity in the restructuring liability, which includes amounts related to discontinued operations and excludes pension and other postretirement contractual termination benefits:



(in millions)	Balance at October 31, 2016		Additions		Payments			Adjustments		Balance at January 31, 2017
Employee termination charges	$	5	$	6	$	(2	)	$	—	$	9
Lease vacancy	1		—		—			—		1
Other	1		—		—			—		1
Restructuring liability	$	7	$	6	$	(2	)	$	—	$	11



(in millions)	Balance at October 31, 2015		Additions		Payments			Adjustments			Balance at January 31, 2016
Employee termination charges	$	62	$	4	$	(22	)	$	(2	)	$	42
Lease vacancy	5		—		(3		)	—			2
Other	1		—		—			—			1
Restructuring liability	$	68	$	4	$	(25	)	$	(2	)	$	45

North American Manufacturing Restructuring Activities

We continue to focus on our core Truck and Parts businesses and evaluate our portfolio of assets to validate their strategic and financial fit. This allows us to close or divest non-strategic businesses, and identify opportunities to restructure our business and rationalize our Manufacturing operations in an effort to optimize our cost structure. For those areas that fall outside our strategic businesses, we are evaluating alternatives which could result in additional restructuring and other related charges in the future, including but not limited to: (i) impairments, (ii) costs for employee and contractor termination and other related benefits, and (iii) charges for pension and other postretirement contractual benefits and curtailments. These charges could be significant.

Chatham restructuring activities

In the third quarter of 2011, we committed to close our Chatham, Ontario heavy truck plant, which had been idled since June 2009. At that time, we recognized curtailment and contractual termination charges related to postretirement plans. Based on a ruling regarding pension benefits received from the Financial Services Tribunal in Ontario, Canada, in the third quarter of 2014, we recognized additional charges of $14 million related to the 2011 closure of the Chatham, Ontario plant. Unsuccessful efforts to appeal the ruling in the Ontario court system ended in December 2015. On April 25, 2016, we filed a qualified partial wind-up report for approval by the Financial Services Commission of Ontario ("FSCO"). On January 12, 2017, FSCO issued its approval of the partial wind-up report. On February 27, 2017, we finalized the resolution of statutory severance pay for former employees related to the closure of our Chatham, Ontario plant, resulting in a charge of $6 million. The charge is reported within Restructuring charges in our Consolidated Statements of Operations. Potential charges in future periods could range from $0 million to $45 million, primarily related to pension and postretirement costs, which are subject to governmental approval, employee negotiation, acceptance rates and the resolution of disputes related thereto. See Note 7, Postretirement benefits for further discussion.

Asset Impairments

In the three months ended January 31, 2017, we concluded that we had triggering events related to certain operating leases. As a result, a charge of $2 million was recorded in our Truck segment.

In the first quarter of 2016, we concluded that a triggering event occurred in connection with the potential sale of Pure Power Technologies, LLC ("PPT"), a components business focused on air and fuel systems, requiring the impairment of certain assets in our Truck segment. As a result, a charge of approximately $2 million was recognized in the first quarter of 2016. The charge is reported within Asset impairment charges in our Consolidated Statements of Operations. In February 2016, we completed the sale of PPT.