Restructuring of Operations

Our restructuring activities primarily include rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including costs associated with lease continuation obligations and certain operating costs of facilities that we are in the process of closing.

During the third quarter of 2013, we approved additional headcount reduction programs, primarily attributable to our Commercial Vehicle operation in Argentina. Including costs associated with this action and with other previously announced initiatives, restructuring expense during the third quarter of 2013 was $8, including $3 of severance and related benefits costs and $5 of exit costs.

During the first and second quarters of 2013, we implemented certain headcount reduction initiatives, primarily in our Light Vehicle and Commercial Vehicle businesses in Argentina and Australia. New customer programs and other developments in our North American Light Vehicle business and a decision by our European Off-Highway business to in-source the manufacturing of certain parts resulted in the reversal of previously accrued severance obligations. During the first nine months of 2013, restructuring expense was $14, net of the aforementioned reversals, and was attributable to the cost of newly implemented and previously announced initiatives. Including an additional $1 associated with discontinued operations, the total cost represents $6 of severance and related benefits costs and $9 of exit costs.

During the third quarter of 2012, we implemented certain cost reduction programs, including a headcount reduction program at certain of our South American manufacturing operations and the realignment of our North American regional operations. Total restructuring expense in the third quarter of 2012 to recognize these costs as well as costs associated with previously announced initiatives was $6. Including an additional $1 of costs associated with discontinued operations, the total cost represented $4 of severance and related benefits costs and $3 of exit costs.

During the first and second quarters of 2012, we implemented and recognized the costs of specific headcount reduction initiatives, primarily associated with certain of our South American operations. Additionally, we exited our Kalamazoo, Michigan facility and recognized the fair value of the associated lease continuation obligation. During the first nine months of 2012, restructuring expense to recognize the costs of these actions as well as costs associated with other previously announced initiatives was $30. Including an additional $3 associated with discontinued operations, the total cost represented $15 of severance and related benefits costs and $18 of exit costs.

Restructuring charges and related payments and adjustments —



	Employee Termination Benefits			Exit Costs			Total
Balance at June 30, 2013, including noncurrent portion	$	14		$	11		$	25
Activity during the period:
Charges to restructuring	4			6			10
Adjustments of accruals	(1		)	(1		)	(2		)
Cash payments	(5		)	(4		)	(9		)
Balance at September 30, 2013, including noncurrent portion	$	12		$	12		$	24

Balance at December 31, 2012, including noncurrent portion	$	27		$	13		$	40
Activity during the period:
Charges to restructuring	14			9			23
Adjustments of accruals	(8		)	(1		)	(9		)
Discontinued operations charges				1			1
Cash payments	(21		)	(10		)	(31		)
Balance at September 30, 2013, including noncurrent portion	$	12		$	12		$	24

At September 30, 2013, the accrued employee termination benefits relate to the reduction of approximately 300 employees to be completed over the next three years. The exit costs relate primarily to lease continuation obligations. We estimate cash expenditures to approximate $7 in the fourth quarter of 2013 and $17 thereafter.

Cost to complete — The following table provides project-to-date and estimated future expenses for completion of our pending restructuring initiatives.



	Expense Recognized							Future Cost to Complete
	Prior to 2013		2013			Total to Date		Future Cost to Complete
LVD	$	18	$	5		$	23	$	6
Power Technologies	9					9		2
Commercial Vehicle	19		9			28		8
Off-Highway	8		(2		)	6		1
Corporate			2			2
Discontinued operations	4		1			5		4
Total	$	58	$	15		$	73	$	21

The future cost to complete includes estimated separation costs, primarily those associated with one-time benefit programs, and exit costs, including lease continuation costs, equipment transfers and other costs which are required to be recognized as closures are finalized or as incurred during the closure.