Business Restructuring and Cost Reduction Actions

6 Months Ended

Mar. 31, 2015

Business Restructuring and Cost Reduction Actions [Abstract]

Business Restructuring and Cost Reduction Actions

4.BUSINESS RESTRUCTURING AND COST REDUCTION ACTIONS

The charges we record for business restructuring and cost reduction actions have been excluded from segment operating income and are reflected on the consolidated income statements as “Business Restructuring and Cost Reduction Actions.”

Business Realignment and Reorganization

On 18 September 2014, we announced plans to reorganize the Company, including realignment of our businesses in new reporting segments and other organizational changes, effective as of 1 October 2014. Refer to Note 18, Business Segment Information, for additional details. As a result of this reorganization, we will incur ongoing severance and other charges.

For the three and six months ended 31 March 2015, we recognized an expense of $55.4 ($38.2 after-tax, or $.18 per share) and $87.8 ($59.9 after-tax, or $.27 per share), respectively. During the first six months of fiscal year 2015, the reorganization has resulted in the elimination of approximately 1,100 positions. The 2015 charges related to the segments as follows: $13.8 in Industrial Gases – Americas, $29.5 in Industrial Gases – EMEA, $7.5 in Industrial Gases – Asia, $3.1 in Industrial Gases – Global, $10.6 in Materials Technologies, and $23.3 in Corporate and other.

During the fourth quarter of 2014, an expense of $12.7 ($8.2 after-tax, or $.04 per share) was incurred relating to the elimination of approximately 50 positions. The 2014 charge related to the segments as follows: $2.9 in Industrial Gases – Americas, $3.1 in Industrial Gases – EMEA, $1.5 in Industrial Gases – Asia, $1.5 in Industrial Gases – Global, $1.6 in Materials Technologies, and $2.1 in Corporate and other.

The following table summarizes the carrying amount of the accrual for the business realignment and reorganization
at 31 March 2015:
	Severance and
	Other Benefits
2014 Charge	$	12.7
Cash expenditures		(2.2)
30 September 2014	$	10.5
2015 Charge		87.8
Amount reflected in pension liability		(8.8)
Cash expenditures		(57.4)
Currency translation adjustment		(1.1)
31 March 2015	$	31.0

2013 Plan

During the fourth quarter of 2013, we recorded an expense of $231.6 ($157.9 after-tax, or $.74 per share) reflecting actions to better align our cost structure with current market conditions. The asset and contract actions primarily impacted the Electronics Materials business due to continued weakness in the photovoltaic (PV) and light-emitting diode (LED) markets. The severance and other contractual benefits primarily impacted our Industrial Gases businesses and corporate functions in response to weaker than expected business conditions in Europe and Asia, reorganization of our operations and functional areas, and previously announced senior executive changes.

The following table summarizes the carrying amount of the accrual for the 2013 Plan at 31 March 2015:
	Severance and		Asset		Contract
	Other Benefits		Actions		Actions/Other		Total
2013 Charge	$	71.9	$	100.4	$	59.3	$	231.6
Amount reflected in pension liability		(6.9)		-		-		(6.9)
Noncash expenses		-		(100.4)		-		(100.4)
Cash expenditures		(3.0)		-		(58.5)		(61.5)
Currency translation adjustment		.4		-		-		.4
30 September 2013	$	62.4	$	-	$	.8	$	63.2
Cash expenditures		(51.7)		-		(.8)		(52.5)
Currency translation adjustment		(.6)		-		-		(.6)
30 September 2014	$	10.1	$	-	$	-	$	10.1
Cash expenditures		(9.8)		-		-		(9.8)
Currency translation adjustment		(.3)		-		-		(.3)
31 March 2015	$	-	$	-	$	-	$	-