Restructuring

12 Months Ended

Sep. 30, 2020

Restructuring

Restructuring

NOTE 17—RESTRUCTURING

In the fourth quarter of fiscal 2020, we announced our NextCUBIC transformation to restructure the way we work and operate as a business. Part of this initiative included establishing a Transformation Office and appointing a Chief Transformation Officer to identify, vet, plan and implement improvement initiatives across Cubic. Coinciding with this initiative, we also announced the combination of CGD and CMS into CMPS. This combination will help us optimize customer access and presence, leverage key enablers across the combined businesses and realize untapped cross-segment technical synergies to capture organizational efficiencies. The significant portion of the costs associated with these restructuring activities are related to consultants that we have engaged in connection with these efforts, and such costs are recognized by our corporate entity. Other restructuring charges related to headcount reductions initiated to optimize our cost positions. Our NextCUBIC transformation initiatives will continue through fiscal 2021, and our consulting fees that will be incurred in the future are generally contingent upon the achievement of future cost savings and increased profitability. The total expected restructuring costs related to these initiatives cannot currently be estimated.

In fiscal 2019, we initiated projects to restructure and modify our supply chain strategy, functional responsibilities, methods, capabilities, processes and rationalize suppliers with the goal of reducing ongoing costs and increasing the efficiencies of our worldwide procurement organization. The majority of the costs associated with these restructuring activities are related to consultants that we have engaged in connection with these efforts, and such costs have been recognized by our corporate entity. The total costs of this restructuring project have been incurred and these efforts have been materially completed as of the third quarter of fiscal 2020.

In fiscal 2019 and 2020 we incurred additional restructuring charges, consisting primarily of employee severance costs related to headcount reductions initiated to optimize certain cost positions. The total costs of each of these restructuring plans initiated thus far are not expected to be significantly greater than the charges incurred to date.

Our fiscal 2018 restructuring activities related primarily to expenses incurred by our corporate entity to establish a North American shared services center.

Restructuring charges incurred by our business segments were as follows (in millions):

	Years Ended September 30,
	2020		2019		2018
Restructuring costs:
Cubic Transportation Systems	$	2.0	$	3.2	$	0.4
Cubic Mission Solutions		2.3		—		0.2
Cubic Global Defense Systems		3.0		3.3		1.3
Unallocated corporate expenses		9.3		8.9		3.1
Total restructuring costs	$	16.6	$	15.4	$	5.0

The following table presents a rollforward of our restructuring liability as of September 30, 2020, which is included within accrued compensation and other current liabilities within our consolidated balance sheet, (in millions):

	Restructuring Liability		Restructuring Liability
	Employee Separation and Other		Consulting Costs
Balance as of October 1, 2018	$	0.6	$	0.3
Accrued costs		7.5		7.9
Cash payments		(6.1)		(7.4)
Balance as of September 30, 2019	$	2.0	$	0.8
Accrued costs		13.5		3.1
Cash payments		(10.3)		(3.1)
Balance as of September 30, 2020	$	5.2	$	0.8

Certain restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when incurred.