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Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

v2.4.0.6
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
3 Months Ended
Mar. 31, 2012
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Ìý
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

ÌýÌýÌýÌýÌýÌýÌýÌýAs of MarchÌý31, 2012 and DecemberÌý31, 2011, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

Ìý
Ìý Workforce
reductions(1)
Ìý Demolition and
decommissioning
Ìý Non-cancelable
lease costs
Ìý Other
restructuring
costs
Ìý Total(2) Ìý

Accrued liabilities as of JanuaryÌý1, 2012

Ìý $ 73 Ìý $ â€� Ìý $ 11 Ìý $ 8 Ìý $ 92 Ìý

2012 charges for 2007 and prior initiatives

Ìý Ìý 2 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 2 Ìý

2012 charges for 2009 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý Ìý 1 Ìý

2012 charges for 2011 initiatives

Ìý Ìý 1 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 2 Ìý Ìý 3 Ìý

2012 charges for 2012 initiatives

Ìý Ìý 5 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 5 Ìý

Reversal of reserves no longer required

Ìý Ìý (12 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (12 )

2012 payments for 2007 and prior initiatives

Ìý Ìý (1 ) Ìý â€� Ìý Ìý â€� Ìý Ìý (1 ) Ìý (2 )

2012 payments for 2009 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (1 ) Ìý (1 ) Ìý (2 )

2012 payments for 2010 initiatives

Ìý Ìý (2 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (2 )

2012 payments for 2011 initiatives

Ìý Ìý (7 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (7 )

Net activity of discontinued operations

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (1 ) Ìý (1 )

Foreign currency effect on liability balance

Ìý Ìý 3 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 3 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Accrued liabilities as of MarchÌý31, 2012

Ìý $ 62 Ìý $ â€� Ìý $ 10 Ìý $ 8 Ìý $ 80 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

(1)
The total workforce reduction reserves of $62Ìýmillion relate to the termination of 719 positions, of which 678 positions had not been terminated as of MarchÌý31, 2012.
(2)
Accrued liabilities by initiatives were as follows (dollars in millions):

Ìý
Ìý MarchÌý31, 2012 Ìý DecemberÌý31, 2011 Ìý

2007 initiatives and prior

Ìý $ 2 Ìý $ 2 Ìý

2009 initiatives

Ìý Ìý 8 Ìý Ìý 11 Ìý

2010 initiatives

Ìý Ìý 10 Ìý Ìý 16 Ìý

2011 initiatives

Ìý Ìý 55 Ìý Ìý 63 Ìý

2012 initiatives

Ìý Ìý 5 Ìý Ìý â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

Total

Ìý $ 80 Ìý $ 92 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýDetails with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

Ìý
Ìý Polyurethanes Ìý Performance
Products
Ìý Advanced
Materials
Ìý Textile
Effects
Ìý Pigments Ìý Discontinued
Operations
Ìý Corporate
and Other
Ìý Total Ìý

Accrued liabilities as of JanuaryÌý1, 2012

Ìý $ â€� Ìý $ 1 Ìý $ 12 Ìý $ 69 Ìý $ 3 Ìý $ 6 Ìý $ 1 Ìý $ 92 Ìý

2012 charges for 2007 and prior initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 2 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 2 Ìý

2012 charges for 2009 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý

2012 charges for 2011 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý Ìý 2 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 3 Ìý

2012 charges for 2012 initiatives

Ìý Ìý 5 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 5 Ìý

Reversal of reserves no longer required

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (12 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (12 )

2012 payments for 2007 and prior initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (2 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (2 )

2012 payments for 2009 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (2 ) Ìý â€� Ìý Ìý â€� Ìý Ìý (2 )

2012 payments for 2010 initiatives

Ìý Ìý â€� Ìý Ìý (1 ) Ìý â€� Ìý Ìý (1 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (2 )

2012 payments for 2011 initiatives

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (5 ) Ìý (2 ) Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (7 )

Net activity of discontinued operations

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý (1 ) Ìý â€� Ìý Ìý (1 )

Foreign currency effect on liability balance

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 3 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 3 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Accrued liabilities as of MarchÌý31, 2012

Ìý $ 5 Ìý $ â€� Ìý $ 8 Ìý $ 59 Ìý $ 2 Ìý $ 5 Ìý $ 1 Ìý $ 80 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Current portion of restructuring reserves

Ìý $ 5 Ìý $ â€� Ìý $ 7 Ìý $ 59 Ìý $ 2 Ìý $ 5 Ìý $ 1 Ìý $ 79 Ìý

Long-term portion of restructuring reserve

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý

Estimated additional future charges for current restructuring projects

Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Estimated additional charges within one year

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 1 Ìý Ìý 11 Ìý Ìý 4 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 16 Ìý

Estimated additional charges beyond one year

Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 10 Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý â€� Ìý Ìý 10 Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýDetails with respect to cash and non-cash restructuring charges for the periods ended MarchÌý31, 2012 and 2011 by initiative are provided below (dollars in millions):

Ìý
Ìý Three months
ended
MarchÌý31, 2012
Ìý

Cash charges:

Ìý Ìý Ìý Ìý

2012 charges for 2007 and prior initiatives

Ìý $ 2 Ìý

2012 charges for 2009 initiatives

Ìý Ìý 1 Ìý

2012 charges for 2011 initiatives

Ìý Ìý 3 Ìý

2012 charges for 2012 initiatives

Ìý Ìý 5 Ìý

Reversal of reserves no longer required

Ìý Ìý (12 )

Non-cash charges

Ìý Ìý 1 Ìý
Ìý Ìý Ìý Ìý

Total 2012 restructuring, impairment and plant closing costs

Ìý $ â€� Ìý
Ìý Ìý Ìý Ìý

Ìý

Ìý
Ìý Three months
ended
MarchÌý31, 2011
Ìý

Cash charges:

Ìý Ìý Ìý Ìý

2011 charges for 2007 and prior initiatives

Ìý $ 2 Ìý

2011 charges for 2009 initiatives

Ìý Ìý 1 Ìý

2011 charges for 2010 initiatives

Ìý Ìý 1 Ìý

2011 charges for 2011 initiatives

Ìý Ìý 5 Ìý

Reversal of reserves no longer required

Ìý Ìý (2 )
Ìý Ìý Ìý Ìý

Total 2011 restructuring, impairment and plant closing costs

Ìý $ 7 Ìý
Ìý Ìý Ìý Ìý

2012 RESTRUCTURING ACTIVITIES

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the three months ended MarchÌý31, 2012, our Polyurethanes segment recorded charges of $5Ìýmillion primarily related to cost reduction programs.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the three months ended MarchÌý31, 2012, our Advanced Materials segment recorded charges of $1Ìýmillion and expects to incur additional charges of $1Ìýmillion through DecemberÌý31, 2012 primarily related to the reorganization of our global business structure and the relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas.

ÌýÌýÌýÌýÌýÌýÌýÌýOn SeptemberÌý27, 2011, we announced plans to implement a significant restructuring of our Textile Effects segment, including the closure of our production facilities and business support offices in Basel, Switzerland, as part of an ongoing strategic program aimed at improving the Textile Effects segment's long-term global competitiveness. In connection with this plan, during the first quarter of 2012, we recorded a charge of $1Ìýmillion primarily for workforce reductions. We expect to incur additional restructuring and plant closing charges of approximately $21Ìýmillion through DecemberÌý31, 2013. In addition, during the three months ended MarchÌý31, 2012, our Textile Effects segment recorded charges of $3Ìýmillion primarily related to the closure of our St.ÌýFons, France facility and a global transfer pricing initiative. Also during the three months ended MarchÌý31, 2012, we reversed $12Ìýmillion of reserves that were no longer required for workforce reductions at our production facility in Langweid, Germany, the consolidation of manufacturing activities and processes at our site in Basel, Switzerland and closure of our production facilities in Basel, Switzerland.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the three months ended MarchÌý31, 2012, our Pigments segment recorded charges of $1 million related to the closure of our Grimsby, U.K. plant. We expect to incur additional charges of $4 million through DecemberÌý31, 2012, primarily related to the closure of our Grimsby, U.K. plant and workforce reductions at Scarlino, Italy.