Restructuring and Other Costs

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Other Costs [Text Block]

Restructuring Costs

During the quarter ended March 31, 2016, we recorded net pre-tax restructuring costs totaling $62 million for new and ongoing restructuring actions. We recorded charges in the segments as follows:

(Dollars in millions)
Otis	$	15
UTC Climate, Controls & Security	28
Pratt & Whitney	5
UTC Aerospace Systems	13
Eliminations and other	1
Total	$	62

Restructuring charges incurred during the quarter ended March 31, 2016 primarily relate to actions initiated during 2016 and 2015, and were recorded as follows:

(Dollars in millions)
Cost of sales	$	31
Selling, general and administrative	31
Total	$	62

2016 Actions. During the quarter ended March 31, 2016, we recorded net pre-tax restructuring costs totaling $28 million, including $13 million in cost of sales, and $15 million in selling, general and administrative expenses. The 2016 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations.

We are targeting the majority of the remaining workforce and all facility related cost reduction actions for completion during 2016 and 2017. No specific plans for significant other actions have been finalized at this time. All costs incurred during the quarter ended March 31, 2016 relate to severance. The following table summarizes the accrual balance and utilization for the 2016 restructuring actions:

(Dollars in millions)	Total
Net pre-tax restructuring costs	$	28
Utilization and foreign exchange	(3		)
Balance at March 31, 2016	$	25

The following table summarizes expected, incurred and remaining costs for the 2016 restructuring actions by segment:

(Dollars in millions)	Expected Costs		Costs Incurred Quarter Ended March 31, 2016			Remaining Costs at March 31, 2016
Otis	$	14	$	(10	)	$	4
UTC Climate, Controls & Security	21		(13		)	8
UTC Aerospace Systems	73		(5		)	68
Total	$	108	$	(28	)	$	80

2015 Actions. During the quarter ended March 31, 2016, we recorded net pre-tax restructuring costs totaling $29 million for restructuring actions initiated in 2015, including $15 million in cost of sales and $14 million in selling, general and administrative expenses. The 2015 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations. The following table summarizes the accrual balances and utilization by cost type for the 2015 restructuring actions:

(Dollars in millions)	Severance			Facility Exit, Lease Termination and Other Costs			Total
Restructuring accruals at January 1, 2016	$	183		$	23		$	206
Net pre-tax restructuring costs	21			8			29
Utilization and foreign exchange	(63		)	(8		)	(71		)
Balance at March 31, 2016	$	141		$	23		$	164

The following table summarizes expected, incurred and remaining costs for the 2015 restructuring actions by segment:

(Dollars in millions)	Expected Costs		Costs Incurred in 2015			Costs Incurred Quarter Ended March 31, 2016			Remaining Costs at March 31,  2016
Otis	$	54	$	(35	)	$	(5	)	$	14
UTC Climate, Controls & Security	207		(83		)	(14		)	110
Pratt & Whitney	100		(82		)	(1		)	17
UTC Aerospace Systems	144		(105		)	(8		)	31
Eliminations and other	22		(21		)	(1		)	—
Total	$	527	$	(326	)	$	(29	)	$	172

2014 and Prior Actions. As of March 31, 2016, we have approximately $83 million of accrual balances remaining related to 2014 actions.