Significant Restructuring Costs

9 Months Ended

Jun. 30, 2022

Significant Restructuring and Impairment Costs

To better align its resources with its growth strategies and reduce the cost structure of its global operations in certain underlying markets, the Company commits to various restructuring plans as necessary. Restructuring plans generally result in charges for workforce reductions, plant closures, asset impairments and other related costs which are reported as restructuring and impairment costs in the Company’s consolidated statements of income. The other related costs consist primarily of consulting costs incurred as a direct result of the restructuring initiatives. The Company expects the restructuring actions to reduce cost of sales and SG&A due to reduced employee-related costs, depreciation and amortization expense.

In fiscal 2021, the Company committed to a significant multi-year restructuring plan ("2021 Plan") which is expected to be completed during fiscal 2023. The Company originally expected to incur $385 million of restructuring costs across all segments and at Corporate through fiscal 2023. The Company expects it will incur these costs by the end of fiscal 2022 due to certain restructuring actions and expenses planned for fiscal 2023 being accelerated into fiscal 2022. During the three

and nine months ended June 30, 2022, the Company recorded $59 million and $135 million of restructuring and impairment costs related to the 2021 Plan in the consolidated statements of income.

The following table summarizes restructuring and impairment costs related to the 2021 Plan (in millions):


	Nine Months Ended June 30, 2022		Inception to June 30, 2022

Building Solutions North America	$	30	$	100
Building Solutions EMEA/LA	32		61
Building Solutions Asia Pacific	15		43
Global Products	47		138
Corporate	11		35
Total	$	135	$	377

The following table summarizes the changes in the Company’s 2021 Plan reserve, included within other current liabilities in the consolidated statements of financial position (in millions):


	Employee Severance and Termination Benefits		Long-Lived Asset Impairments		Other		Total

Original reserve	$	68	$	98	$	76	$	242
Utilized—cash	(28)		—		(51)		(79)
Utilized—noncash	—		(98)		—		(98)

Balance at September 30, 2021	40		—		25		65
Additional restructuring costs	89		11		35		135
Utilized—cash	(56)		—		(42)		(98)

Utilized—noncash	—		(11)		—		(11)
Currency translation	(1)		—		—		(1)
Balance at June 30, 2022	$	72	$	—	$	18	$	90

The 2021 Plan includes workforce reductions of approximately 5,500 employees. Restructuring charges associated with employee severance and termination benefits are paid over the severance period granted to each employee or on a lump sum basis in accordance with individual severance agreements. As of June 30, 2022, approximately 3,300 of the employees have been separated from the Company pursuant to the 2021 Plan.

Company management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering and purchasing operations, as well as the overall global footprint for all its businesses.