Restructuring Costs

During the three months ended March 31, 2013, we recorded net pre-tax restructuring costs totaling $50 million for new and ongoing restructuring actions as follows:



(Dollars in millions)
Otis	$	10
UTC Climate, Controls & Security	22
Pratt & Whitney	7
UTC Aerospace Systems	8
Sikorsky	5
Restructuring costs recorded within continuing operations	52
Restructuring costs recorded within discontinued operations	(2		)
Total	$	50

The net costs included $27 million recorded in cost of sales, $25 million in selling, general and administrative expenses, and ($2) million in discontinued operations. As described below, these costs primarily relate to actions initiated during 2013 and 2012.

2013 Actions. During the three months ended March 31, 2013, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations. We recorded net pre-tax restructuring costs totaling $20 million, including $6 million in cost of sales and $14 million in selling, general and administrative expenses.

We expect the actions initiated in the three months ended March 31, 2013 to result in net workforce reductions of approximately 300 hourly and salaried employees, the exiting of approximately 200,000 net square feet of facilities and the disposal of assets associated with exited facilities. As of March 31, 2013, we have completed net workforce reductions of approximately 150 employees. We are targeting the majority of the remaining workforce and all facility related cost reduction actions for completion during 2013 and 2014. No specific plans for significant other actions have been finalized at this time.

The following table summarizes the accrual balances and utilization by cost type for the 2013 restructuring actions:



(Dollars in millions)	Severance			Asset Write-Downs		Facility Exit, Lease Termination and Other Costs			Total
Net pre-tax restructuring costs	$	19		$	—	$	1		$	20
Utilization and foreign exchange	(6		)	—		(1		)	(7		)
Balance at March 31, 2013	$	13		$	—	$	—		$	13

The following table summarizes expected, incurred and remaining costs for the 2013 restructuring actions by type:



(Dollars in millions)	Severance			Asset Write-Downs		Facility Exit, Lease Termination and Other Costs			Total
Expected costs	$	32		$	—	$	6		$	38
Costs incurred - quarter ended March 31, 2013	(19		)	—		(1		)	(20		)
Balance at March 31, 2013	$	13		$	—	$	5		$	18

The following table summarizes expected, incurred and remaining costs for the 2013 restructuring actions by segment:



(Dollars in millions)	Expected Costs		Costs incurred Quarter ended March 31, 2013			Remaining Costs at March 31, 2013
Otis	$	11	$	(6	)	$	5
UTC Climate, Controls & Security	18		(8		)	10
Pratt & Whitney	9		(6		)	3
Total	$	38	$	(20	)	$	18

2012 Actions. During the three months ended March 31, 2013, we recorded net pre-tax restructuring costs totaling $29 million for restructuring actions initiated in 2012, including $20 million in cost of sales and $9 million in selling, general and administrative expenses. The 2012 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations.

As of March 31, 2013, we have completed net workforce reductions of approximately 5,500 employees of an expected 7,100 employees, and have exited approximately 1.4 million net square feet of facilities of an expected 2.7 million net square feet. We are targeting the majority of the remaining workforce and facility related cost reduction actions for completion during 2013 and 2014.

The following table summarizes the accrual balances and utilization by cost type for the 2012 restructuring actions:



(Dollars in millions)	Severance			Asset Write-Downs			Facility Exit, Lease Termination and Other Costs			Total
Restructuring accruals at December 31, 2012	$	289		$	—		$	50		$	339
Net pre-tax restructuring costs	18			1			10			29
Utilization and foreign exchange	(106		)	(1		)	(9		)	(116		)
Balance at March 31, 2013	$	201		$	—		$	51		$	252

The following table summarizes expected, incurred and remaining costs for the 2012 restructuring actions by type:



(Dollars in millions)	Severance			Asset Write-Downs			Facility Exit, Lease Termination and Other Costs			Total
Expected costs	$	492		$	15		$	172		$	679
Costs incurred through December 31, 2012	(452		)	(14		)	(110		)	(576		)
Costs incurred - quarter ended March 31, 2013	(18		)	(1		)	(10		)	(29		)
Balance at March 31, 2013	$	22		$	—		$	52		$	74

The following table summarizes expected, incurred and remaining costs for the 2012 restructuring actions by segment:



(Dollars in millions)	Expected Costs		Costs incurred through December 31, 2012			Costs incurred Quarter ended March 31, 2013			Remaining Costs at March 31, 2013
Otis	$	156	$	(146	)	$	(1	)	$	9
UTC Climate, Controls & Security	168		(123		)	(14		)	31
Pratt & Whitney	100		(94		)	(1		)	5
UTC Aerospace Systems	156		(121		)	(8		)	27
Sikorsky	54		(47		)	(5		)	2
Eliminations and other	19		(19		)	—			—
Discontinued operations	26		(26		)	—			—
Total	$	679	$	(576	)	$	(29	)	$	74

2011 Actions. As of March 31, 2013, we have approximately $26 million of accrual balances remaining related to 2011 actions.