Restructuring and Other Charges

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

Over the past several years, we have adopted plans to restructure portions of our operations. These plans were approved by our Board of Directors and were designed to reduce operational and administrative overhead costs throughout the business. In 2012, we incurred $13 million in restructuring and related costs, primarily related to headcount reductions in South America and non-cash asset write downs of $4 million in Europe, of which $10 million was recorded in cost of sales and $3 million was recorded in SG&A. In the first quarter of 2013, we incurred $4 million in restructuring and related costs, primarily related to European cost reduction efforts and the costs to exit the distribution of aftermarket exhaust products in Australia, of which $3 million was recorded in cost of sales and $1 million was recorded in SG&A. During the first quarter of 2012, we incurred $1 million in restructuring and related costs.

Amounts related to activities that are part of our restructuring reserves are as follows:



	December 31, 2012 Restructuring Reserve		2013 Expenses		2013 Cash Payments			March 31, 2013 Restructuring Reserve
	(Millions)
Employee Severance and Termination Benefits		$—		$4		($4	)		$—

Under the terms of our amended and restated senior credit agreement that took effect on March 22, 2012, we are allowed to exclude $80 million of cash charges and expenses, before taxes, related to cost reduction initiatives incurred after March 22, 2012 from the calculation of the financial covenant ratios required under our senior credit facility. As of March 31, 2013, we have excluded $17 million in cumulative allowable charges relating to restructuring initiatives against the $80 million available under the terms of the senior credit facility.

On January 31, 2013, we announced our plan to reduce structural costs in Europe which includes the closing of the Vittaryd facility in Sweden that we announced in September 2012 and a $7 million charge recorded in the fourth quarter of 2012 related to the impairment of certain assets in the European ride performance business. $2 million of the total of $4 million we incurred in restructuring and related costs in the first quarter of 2013 related to this initiative. In 2012, we recorded non-cash charges of $4 million related to the closing of the Vittaryd facility.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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