Restructuring Costs

9 Months Ended

Sep. 30, 2022

Restructuring costs

Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable.

Restructuring costs for the three and nine months ended September 30, 2022 and 2021 were as follows:



(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Employee separations 1	$	39	$	17	$	62	$	79
Contract terminations 1	1		1		1		1
Long-lived asset impairments 1	(4)		8		1		12

Other 2	13		9		26		32
Total restructuring costs	$	49	$	35	$	90	$	124


1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, equipment relocation, inventory write-downs and project management, all of which are primarily included in Cost of goods sold.

For both the nine months ended September 30, 2022 and 2021, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2022 and 2021, all restructuring costs are excluded from segment profit.

The following table summarizes the 2022 and 2021 employee separation activity:



(Millions of dollars)	Nine Months Ended September 30
	2022		2021
Liability balance, beginning of period	$	61	$	164
Increase in liability (separation charges)	62		79
Reduction in liability (payments)	(63)		(159)
Liability balance, end of period	$	60	$	84

Most of the liability balance at September 30, 2022 is expected to be paid in 2022 and 2023.