Reclassified as Liabilities held for sale

[Table of Contents](#i329aa562213e420593df15cade55885b_7)             NOTE 12: RESTRUCTURING COSTSThe Company incurs costs associated with restructuring initiatives intended to improve operating performance, profitability and working capital levels. Actions associated with these initiatives may include improving productivity, workforce reductions and the consolidation of facilities.   
The Company recorded net pre-tax restructuring costs for new and ongoing restructuring initiatives as follows:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  Three Months Ended September 30, |  | Nine Months Ended September 30, |
| (In millions) | 2022 |  | 2021 |  | 2022 |  | 2021 |
| HVAC | $ | 2  |  |  | $ | 7  |  |  | $ | 8  |  |  | $ | 18  |  |
| Refrigeration | 3  |  |  | 2  |  |  | 9  |  |  | 7  |  |
| Fire & Security | 1  |  |  | 3  |  |  | 10  |  |  | 23  |  |
| Total Segment | 6  |  |  | 12  |  |  | 27  |  |  | 48  |  |
| General corporate expenses | —  |  |  | 1  |  |  | 2  |  |  | 4  |  |
| Total restructuring costs | $ | 6  |  |  | $ | 13  |  |  | $ | 29  |  |  | $ | 52  |  |
|  |  |  |  |  |  |  |  |
| Cost of sales | $ | 1  |  |  | $ | 7  |  |  | $ | 8  |  |  | $ | 18  |  |
| Selling, general and administrative | 5  |  |  | 6  |  |  | 21  |  |  | 34  |  |
|  |  |  |  |  |  |  |  |
| Total restructuring costs | $ | 6  |  |  | $ | 13  |  |  | $ | 29  |  |  | $ | 52  |  |

  
The following table summarizes the reserve and charges relating to the restructuring reserve, included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Nine Months Ended September 30, |
| (In millions) |  | 2022 |  | 2021 |
| Balance as of January 1, |  | $ | 54  |  |  | $ | 49  |  |
| Net pre-tax restructuring costs |  | 29  |  |  | 52  |  |
| Utilization, foreign exchange and other |  | (50) |  |  | (54) |  |
| Reclassified as Liabilities held for sale (1) |  | —  |  |  | (14) |  |
| Balance as of September 30, |  | $ | 33  |  |  | $ | 33  |  |

(1) See Note 16 - Divestitures for additional information.  
During the nine months ended September 30, 2022 and 2021, charges associated with restructuring initiatives related to cost reduction efforts. Amounts recognized primarily related to severance due to workforce reductions and exit costs due to the consolidation of field operations. As of September 30, 2022, the Company had $33 million accrued for costs associated with its announced restructuring initiatives, all of which is expected to be paid within one year.  
19
