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 excludes pension and other postretirement contractual termination benefits:



(in millions)	Balance at October 31, 2016		Additions		Payments			Adjustments			Balance at April 30, 2017
Employee termination charges	$	5	$	8	$	(3	)	$	(1	)	$	9
Lease vacancy	1		—		(1		)	—			—
Other	1		—		—			—			1
Restructuring liability	$	7	$	8	$	(4	)	$	(1	)	$	10



(in millions)	Balance at October 31, 2015		Additions		Payments			Adjustments		Balance at April 30, 2016
Employee termination charges	$	62	$	6	$	(49	)	$	—	$	19
Lease vacancy	5		—		(3		)	—		2
Other	1		—		—			—		1
Restructuring liability	$	68	$	6	$	(52	)	$	—	$	22

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 in the first quarter of 2017. The charge is reported within Restructuring charges in our Consolidated Statements of Operations. Once the wind-up is complete, severance has been paid, and pension elections have been made by participants, there may be adjustments made to pension and post-retirement accruals which could be material. See Note 7, Postretirement benefits for further discussion.

Asset Impairments

In the six months ended April 30, 2017, we concluded that we had triggering events related to certain assets under operating leases. As a result, charges of $7 million were recorded in our Truck segment.

In the six months ended April 30, 2016, we concluded that we had a triggering event 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. As a result, charges of $3 million were recorded in our Truck segment. In February 2016, we completed the sale of PPT. In the six months ended April 30, 2016, we also concluded that we had a triggering event related to certain long-lived assets. As a result, charges of $2 million were recorded in our Truck segment.

These charges were recorded in Asset impairment charges in our Consolidated Statements of Operations.

See Note 9, Fair Value Measurements, for information on the valuation of impaired operating leases and other assets.