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):
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|
|
|
|
|
|
|
|
|
|
|
|
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 |
$ |
� |
Ìý |
$ |
11 |
Ìý |
$ |
8 |
Ìý |
$ |
92 |
Ìý |
2012 charges for 2007 and prior initiatives
|
Ìý |
Ìý |
2 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
2 |
Ìý |
2012 charges for 2009 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
1 |
Ìý |
2012 charges for 2011 initiatives
|
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
2 |
Ìý |
Ìý |
3 |
Ìý |
2012 charges for 2012 initiatives
|
Ìý |
Ìý |
5 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
5 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
(12 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(12 |
) |
2012 payments for 2007 and prior initiatives
|
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(2 |
) |
2012 payments for 2009 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(1 |
) |
Ìý |
(2 |
) |
2012 payments for 2010 initiatives
|
Ìý |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
2012 payments for 2011 initiatives
|
Ìý |
Ìý |
(7 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(7 |
) |
Net activity of discontinued operations
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(1 |
) |
Foreign currency effect on liability balance
|
Ìý |
Ìý |
3 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
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 |
$ |
� |
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):
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|
|
|
|
|
|
|
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 |
� |
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):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
$ |
� |
Ìý |
$ |
1 |
Ìý |
$ |
12 |
Ìý |
$ |
69 |
Ìý |
$ |
3 |
Ìý |
$ |
6 |
Ìý |
$ |
1 |
Ìý |
$ |
92 |
Ìý |
2012 charges for 2007 and prior initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
2 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
2 |
Ìý |
2012 charges for 2009 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
2012 charges for 2011 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
2 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
3 |
Ìý |
2012 charges for 2012 initiatives
|
Ìý |
Ìý |
5 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
5 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(12 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(12 |
) |
2012 payments for 2007 and prior initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
2012 payments for 2009 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
2012 payments for 2010 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
2012 payments for 2011 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(5 |
) |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(7 |
) |
Net activity of discontinued operations
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Foreign currency effect on liability balance
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
3 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
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 |
$ |
� |
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 |
$ |
� |
Ìý |
$ |
7 |
Ìý |
$ |
59 |
Ìý |
$ |
2 |
Ìý |
$ |
5 |
Ìý |
$ |
1 |
Ìý |
$ |
79 |
Ìý |
Long-term portion of restructuring reserve
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
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 |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
11 |
Ìý |
Ìý |
4 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
16 |
Ìý |
Estimated additional charges beyond one year
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
10 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
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 |
$ |
� |
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.
|