UNITED TECHNOLOGIES CORP /DE/ | 2013 | FY | 3


RESTRUCTURING COSTS
During 2013, we recorded net pre-tax restructuring costs totaling $479 million for new and ongoing restructuring actions. We recorded charges in the segments as follows:
(dollars in millions)
  
Otis
$
88

UTC Climate, Controls & Security
97

Pratt & Whitney
154

UTC Aerospace Systems
92

Sikorsky
50

Eliminations and other

Restructuring costs recorded within continuing operations
481

Restructuring costs recorded within discontinued operations
(2
)
Total
$
479


Restructuring charges incurred in 2013 primarily relate to actions initiated during 2013 and 2012, and were recorded as follows:
(dollars in millions)
  
Cost of sales
$
215

Selling, general and administrative
265

Other income, net
1

Restructuring costs recorded within continuing operations
481

Restructuring costs recorded within discontinued operations
(2
)
Total
$
479


2013 Actions. During 2013, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions and consolidation of manufacturing operations. We recorded net pre-tax restructuring costs totaling $421 million for restructuring actions initiated in 2013, consisting of $164 million in cost of sales and $257 million in selling, general and administrative expenses.
We are targeting to complete in 2014 the majority of the remaining workforce and all facility related cost reduction actions initiated in 2013. No specific plans for significant other actions have been finalized at this time. The following table summarizes the accrual balances and utilization by cost type for the 2013 restructuring actions:
(dollars in millions)
Severance
 
Asset Write-Downs
 
Facility Exit, Lease Termination & Other Costs
 
Total
Net pre-tax restructuring costs
$
381

 
$
15

 
$
25

 
$
421

Utilization and foreign exchange
(185
)
 
(15
)
 
(6
)
 
(206
)
Balance at December 31, 2013
$
196

 
$

 
$
19

 
$
215


The following table summarizes expected, incurred and remaining costs for the 2013 restructuring actions by segment:
(dollars in millions)
Expected Costs
 
Cost Incurred During 2013
 
Remaining Costs at December 31, 2013
Otis
$
75

 
$
(69
)
 
$
6

UTC Climate, Controls & Security
124

 
(89
)
 
35

Pratt & Whitney
158

 
(154
)
 
4

UTC Aerospace Systems
85

 
(71
)
 
14

Sikorsky
38

 
(38
)
 

Eliminations and other

 

 

Discontinued operations

 

 

Total
$
480

 
$
(421
)
 
$
59


2012 Actions. During 2013, we recorded net pre-tax restructuring costs totaling $60 million for restructuring actions initiated in 2012, consisting of $46 million in cost of sales, $13 million in selling, general and administrative expenses, and $1 million in other income, net. The 2012 actions relate to ongoing cost reduction efforts, including workforce reductions and the consolidation of field operations.
The following table summarizes the restructuring accrual balances and utilization by cost type for the 2012 programs:
(dollars in millions)
Severance
 
Asset
Write-
Downs
 
Facility Exit,
Lease
Termination
and Other
Costs
 
Total
Restructuring accruals at January 1, 2013
$
289

 
$

 
$
50

 
$
339

Net pre-tax restructuring costs
14

 
1

 
45

 
60

Utilization and foreign exchange
(218
)
 
(1
)
 
(47
)
 
(266
)
Balance at December 31, 2013
$
85

 
$

 
$
48

 
$
133


The following table summarizes expected, incurred and remaining costs for the 2012 programs by segment:
(dollars in millions)
Expected
Costs
 
Costs
Incurred
During
2012
 
Costs
Incurred
During
2013
 
Remaining
Costs at
December 31,
2013
Otis
$
156

 
$
(146
)
 
$
(9
)
 
$
1

UTC Climate, Controls & Security
147

 
(123
)
 
(18
)
 
6

Pratt & Whitney
94

 
(94
)
 

 

UTC Aerospace Systems
157

 
(121
)
 
(21
)
 
15

Sikorsky
62

 
(47
)
 
(12
)
 
3

Eliminations and other
19

 
(19
)
 

 

Discontinued operations
26

 
(26
)
 

 

Total
$
661

 
$
(576
)
 
$
(60
)
 
$
25

2011 Actions. During 2013, we recorded net pre-tax restructuring costs totaling $(2) million for restructuring actions initiated in 2011. As of December 31, 2013, there are no remaining costs to complete the 2011 actions.

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