Note 5. 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. We classify the incremental depreciation associated with a planned closure as accelerated depreciation/

impairment and also include this cost in restructuring expense.

During 2012, we implemented certain cost reduction programs, including headcount reduction initiatives at several of our manufacturing operations in all regions, the most significant of which impacted the LVD and Commercial Vehicle businesses in South America and Europe. Included in these actions is the planned closure of one of our LVD manufacturing facilities. Additionally, we exited our Commercial Vehicle facility in Kalamazoo, Michigan in June 2012 and recognized the fair value of the associated lease continuation obligation. Total restructuring expense in 2012 to recognize the costs of these actions as well as costs associated with other previously announced initiatives, including $3 of costs associated with discontinued operations, was $50 and included $27 of severance and related benefit costs, $21 of exit costs and $2 of accelerated depreciation/impairment cost.

During 2011, we reached an agreement with the lessor to settle the lease associated with our LVD facility in Yennora, Australia. Under the terms of the agreement, we recognized $20 of lease termination costs. Additionally, we approved the realignment of several manufacturing operations, including the planned closures of our LVD manufacturing facility in Marion, Indiana, our Power Technologies manufacturing facility in Milwaukee, Wisconsin and our Structural Products manufacturing facility in Longview, Texas. We also implemented other work force reduction initiatives at certain manufacturing facilities, primarily in our LVD and Commercial Vehicle businesses in South America, and in certain corporate and functional areas, primarily in North America and Europe. Costs associated with these actions and with previously announced initiatives, including $5 of costs associated with discontinued operations, were $87 and included $35 of severance and related benefit costs, $45 of exit costs and $2 of accelerated depreciation/impairment cost and $5 associated with pension settlement costs related to the previously announced closure of certain of our Canadian operations (see Note 11).

During 2010, we announced our plans to consolidate our Heavy Vehicle operations and close the Kalamazoo, Michigan and Statesville, North Carolina facilities. Certain costs associated with this consolidation had been accrued in 2009. We also approved certain business realignment and headcount reduction initiatives, primarily in our European and Venezuelan operations. Costs associated with these actions and with previously announced initiatives, net of a credit of $1 associated with discontinued operations, totaled $73 and included $42 of severance and related benefit costs, $22 of exit costs and $9 of accelerated depreciation/impairment costs.

Restructuring charges and related payments and adjustments —

	Employee			Accelerated
	Termination			Depreciation/			Exit
	Benefits			Impairment			Costs			Total
Balance at December 31, 2009	$	26		$	-		$	3		$	29
Activity during the period:
Charges to restructuring		51			11			24			86
Adjustments of accruals		(10	)					(2	)		(12	)
Discontinued operations charges		1			(2	)					(1	)
Non-cash write-off					(9	)					(9	)
Cash payments		(46	)					(21	)		(67	)
Currency impact		2									2
Balance at December 31, 2010		24						4			28
Activity during the period:
Charges to restructuring		39			2			45			86
Adjustments of accruals		(4	)								(4	)
Discontinued operations charges		5									5
Non-cash write-off					(2	)					(2	)
Pension settlements		(5	)								(5	)
Cash payments		(30	)					(47	)		(77	)
Currency impact		1						1			2
Balance at December 31, 2011		30						3			33
Activity during the period:
Charges to restructuring		31						20			51
Adjustments of accruals		(4	)								(4	)
Discontinued operations charges					2			1			3
Non-cash write-off					(2	)					(2	)
Cash payments		(30	)					(11	)		(41	)
Balance at December 31, 2012, including noncurrent portion	$	27		$	-		$	13		$	40

At December 31, 2012, the accrued employee termination benefits relate to the reduction of approximately 800 employees to be completed over the next two years. The exit costs relate primarily to lease continuation obligations. We estimate cash expenditures to approximate $23 in 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 for our business segments.

	Expense Recognized						Future
	Prior to				Total		Cost to
	2012		2012		to Date		Complete
LVD	$	23	$	10	$	33	$	10
Power Technologies		12		4		16		2
Commercial Vehicle		22		25		47		8
Off-Highway		8		5		13		1
Corporate		6		3		9
Discontinued operations		2		3		5		4
Total	$	73	$	50	$	123	$	25

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.