Restructuring Accruals

9 Months Ended

Sep. 30, 2024

Restructuring Accruals

Restructuring Accruals

6. Restructuring Accruals

Selected information related to the restructuring accruals for the three months ended September 30, 2024 and 2023 is as follows:

		Fit to Win program						Other Restructuring
	Employee		Asset		Other		Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Costs		Impairment		Exit Costs		Restructuring
Balance at July 1, 2024	$	—	$	—	$	—	$	15	$	—	$	9	$	24
Charges		33		43		4		1				2		83
Write-down of assets to net realizable value				(43)										(43)
Net cash paid, principally severance and related benefits		(1)						(4)				(4)		(9)
Other, including foreign exchange translation		(3)						(1)				(3)		(7)
Balance at September 30, 2024	$	29	$	—	$	4	$	11	$	—	$	4	$	48

		Other Restructuring
	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at July 1, 2023	$	11	$	—	$	6	$	17
Charges		28		43		7		78
Write-down of assets to net realizable value				(43)				(43)
Net cash paid, principally severance and related benefits		(11)						(11)
Other, including foreign exchange translation		(3)				(1)		(4)
Balance at September 30, 2023	$	25	$	—	$	12	$	37

Selected information related to the restructuring accruals for the nine months ended September 30, 2024 and 2023 is as follows:

		Fit to Win program						Other Restructuring
	Employee		Asset		Other		Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2024	$	—	$	—	$	—	$	27	$	—	$	12	$	39
Charges		33		43		4		1				2		83
Write-down of assets to net realizable value				(43)										(43)
Net cash paid, principally severance and related benefits		(1)						(16)				(7)		(24)
Other, including foreign exchange translation		(3)						(1)				(3)		(7)
Balance at September 30, 2024	$	29	$	—	$	4	$	11	$	—	$	4	$	48

		Other Restructuring
	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2023	$	17	$	—	$	10	$	27
Charges		28		43		7		78
Write-down of assets to net realizable value				(43)				(43)
Net cash paid, principally severance and related benefits		(17)				(4)		(21)
Other, including foreign exchange translation		(3)				(1)		(4)
Balance at September 30, 2023	$	25	$	—	$	12	$	37

When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the ongoing operations of the business. Information related to major programs is presented separately, while minor initiatives are presented on a combined basis.

As of September 30, 2024, the Company’s only major restructuring program was the Fit to Win initiative which is expected to reduce redundant production capacity and begin to optimize the network, as well as streamline other cost areas, such as selling, general and administrative expenses.  Details regarding charges, payments and other changes to the Fit to Win restructuring accruals are presented in the table above. This major restructuring program is expected to last at least through 2025 and management does not yet have an estimate for the total restructuring charges expected to be incurred with this program, however, the total charges are expected to be material. As of September 30, 2023, no major restructuring programs were in effect.

For the three and nine months ended September 30, 2024, the Company recorded restructuring and other charges of approximately $83 million to Other expense, net ($81 million) and Equity earnings ($2 million) on the Condensed Consolidated Results of Operations, of which $80 million related to the Fit to Win program. These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs in the Americas segment ($72 million) and Retained corporate costs and other ($11 million). As of September 30, 2024, the Company has incurred cumulative charges of $80 million related to the Fit to Win program. Additional restructuring charges are expected in future quarters. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the three and nine months ended September 30, 2023, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $78 million.  These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs in the Americas ($77 million) and Europe ($1 million) segments.  These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. For the three and nine months ended September 30, 2023, these charges were recorded to Other income (expense), net on the Condensed Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

The Company’s decisions to curtail selected production capacity have resulted in write-downs of certain long-lived assets to the extent their carrying value exceeded fair value or fair value less cost to sell. The Company classified the assumptions used to determine the fair value of the impaired assets in the period that the measurement was taken as Level 3 (third-party appraisals, where applicable) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded during both of the nine months ended September 30, 2024 and 2023, the remaining carrying value of the impaired assets was approximately $0.