6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
ÌýÌýÌýÌýÌýÌýÌýÌýAs of JuneÌý30, 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 |
$ |
� |
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 |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
3 |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2010 initiatives
|
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
2012 charges for 2011 initiatives
|
Ìý |
Ìý |
2 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
2 |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2012 initiatives
|
Ìý |
Ìý |
5 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
6 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
(12 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(13 |
) |
2012 payments for 2007 and prior initiatives
|
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(1 |
) |
Ìý |
(3 |
) |
2012 payments for 2009 initiatives
|
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Ìý |
(3 |
) |
2012 payments for 2010 initiatives
|
Ìý |
Ìý |
(3 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(3 |
) |
2012 payments for 2011 initiatives
|
Ìý |
Ìý |
(13 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(3 |
) |
Ìý |
(16 |
) |
2012 payments for 2012 initiatives
|
Ìý |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Net activity of discontinued operations
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
1 |
Ìý |
Foreign currency effect on liability balance
|
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Accrued liabilities as of JuneÌý30, 2012
|
Ìý |
$ |
51 |
Ìý |
$ |
� |
Ìý |
$ |
10 |
Ìý |
$ |
8 |
Ìý |
$ |
69 |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
-
(1)
- The total workforce reduction reserves of $51Ìýmillion relate to the termination of 565 positions, of which 516 positions had not been terminated as of JuneÌý30, 2012.
-
(2)
- Accrued liabilities by initiatives were as follows (dollars in millions):
|
|
|
|
|
|
|
|
Ìý
|
Ìý |
JuneÌý30,
2012 |
Ìý |
DecemberÌý31,
2011 |
Ìý |
2007 initiatives and prior
|
Ìý |
$ |
1 |
Ìý |
$ |
2 |
Ìý |
2009 initiatives
|
Ìý |
Ìý |
9 |
Ìý |
Ìý |
11 |
Ìý |
2010 initiatives
|
Ìý |
Ìý |
10 |
Ìý |
Ìý |
16 |
Ìý |
2011 initiatives
|
Ìý |
Ìý |
45 |
Ìý |
Ìý |
63 |
Ìý |
2012 initiatives
|
Ìý |
Ìý |
4 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Total
|
Ìý |
$ |
69 |
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 |
$ |
� |
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 |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
3 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2010 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
1 |
Ìý |
2012 charges for 2011 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
3 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2012 initiatives
|
Ìý |
Ìý |
5 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
6 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(13 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(13 |
) |
2012 payments for 2007 and prior initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(3 |
) |
2012 payments for 2009 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(3 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(3 |
) |
2012 payments for 2010 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
(3 |
) |
2012 payments for 2011 initiatives
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(11 |
) |
Ìý |
(5 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(16 |
) |
2012 payments for 2012 initiatives
|
Ìý |
Ìý |
(2 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(2 |
) |
Net activity of discontinued operations
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Foreign currency effect on liability balance
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
(1 |
) |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Accrued liabilities as of JuneÌý30, 2012
|
Ìý |
$ |
3 |
Ìý |
$ |
� |
Ìý |
$ |
3 |
Ìý |
$ |
53 |
Ìý |
$ |
2 |
Ìý |
$ |
7 |
Ìý |
$ |
1 |
Ìý |
$ |
69 |
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 |
$ |
3 |
Ìý |
$ |
� |
Ìý |
$ |
2 |
Ìý |
$ |
28 |
Ìý |
$ |
2 |
Ìý |
$ |
7 |
Ìý |
$ |
1 |
Ìý |
$ |
43 |
Ìý |
Long-term portion of restructuring reserve
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
25 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
26 |
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 |
35 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
12 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
47 |
Ìý |
Estimated additional charges beyond one year
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
7 |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
� |
Ìý |
Ìý |
7 |
Ìý |
ÌýÌýÌýÌýÌýÌýÌýÌýDetails with respect to cash and non-cash restructuring charges for the three and six months ended JuneÌý30, 2012 and 2011 by initiative are provided below (dollars in millions):
|
|
|
|
|
|
|
|
Ìý
|
Ìý |
Three months
ended
JuneÌý30, 2012 |
Ìý |
Six months
ended
JuneÌý30, 2012 |
Ìý |
Cash charges:
|
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
2012 charges for 2007 and prior initiatives
|
Ìý |
$ |
� |
Ìý |
$ |
2 |
Ìý |
2012 charges for 2009 initiatives
|
Ìý |
Ìý |
3 |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2010 initiatives
|
Ìý |
Ìý |
1 |
Ìý |
Ìý |
1 |
Ìý |
2012 charges for 2011 initiatives
|
Ìý |
Ìý |
1 |
Ìý |
Ìý |
4 |
Ìý |
2012 charges for 2012 initiatives
|
Ìý |
Ìý |
1 |
Ìý |
Ìý |
6 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
(1 |
) |
Ìý |
(13 |
) |
Non-cash charges
|
Ìý |
Ìý |
� |
Ìý |
Ìý |
1 |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Total 2012 restructuring, impairment and plant closing costs
|
Ìý |
$ |
5 |
Ìý |
$ |
5 |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý
|
|
|
|
|
|
|
|
Ìý
|
Ìý |
Three months
ended
JuneÌý30, 2011 |
Ìý |
Six months
ended
JuneÌý30, 2011 |
Ìý |
Cash charges:
|
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
2011 charges for 2006 and prior initiatives
|
Ìý |
$ |
� |
Ìý |
$ |
2 |
Ìý |
2011 charges for 2009 initiatives
|
Ìý |
Ìý |
2 |
Ìý |
Ìý |
3 |
Ìý |
2011 charges for 2010 initiatives
|
Ìý |
Ìý |
2 |
Ìý |
Ìý |
3 |
Ìý |
2011 charges for 2011 initiatives
|
Ìý |
Ìý |
6 |
Ìý |
Ìý |
11 |
Ìý |
Reversal of reserves no longer required
|
Ìý |
Ìý |
(1 |
) |
Ìý |
(3 |
) |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Total 2011 restructuring, impairment and plant closing costs
|
Ìý |
$ |
9 |
Ìý |
$ |
16 |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
2012 RESTRUCTURING ACTIVITIES
ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2012, our Polyurethanes segment recorded charges of $5Ìýmillion primarily related to fixed cost reduction programs.
ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2012, our Advanced Materials segment recorded charges of $3Ìýmillion 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 six months ended JuneÌý30, 2012, we recorded restructuring charges of $3Ìýmillion and a $1Ìýmillion noncash charge for asset impairments. We expect to incur additional restructuring and plant closing charges, excluding site exit costs, of approximately $19Ìýmillion through DecemberÌý31, 2014. In addition, during the six months ended JuneÌý30, 2012, our Textile Effects segment recorded charges of $2Ìýmillion primarily related to the closure of our St.ÌýFons, France facility and a global transfer pricing initiative. Also during the six months ended JuneÌý30, 2012, we reversed $13Ìýmillion of reserves that were primarily related to workforce reductions that were no longer required 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 six months ended JuneÌý30, 2012, our Pigments segment recorded charges of $3Ìýmillion related to the closure of our Grimsby, U.K. plant.
|