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6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
As of June 30, 2011 and December 31, 2010, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):
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Workforce reductions(1) |
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Demolition and decommissioning |
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Noncancelable lease costs |
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Other restructuring costs |
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Total(2) |
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Accrued liabilities as of January 1, 2011
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$ |
36 |
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$ |
1 |
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$ |
1 |
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$ |
11 |
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$ |
49 |
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2011 charges for 2006 and prior initiatives
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1 |
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1 |
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2 |
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2011 charges for 2009 initiatives
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1 |
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2 |
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3 |
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2011 charges for 2010 initiatives
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2 |
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1 |
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3 |
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2011 charges for 2011 initiatives
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11 |
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11 |
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Reversal of reserves no longer required
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(3 |
) |
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(3 |
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2011 payments for 2006 and prior initiatives
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(1 |
) |
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(1 |
) |
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2011 payments for 2008 initiatives
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(1 |
) |
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(1 |
) |
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2011 payments for 2009 initiatives
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(2 |
) |
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(3 |
) |
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(5 |
) |
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2011 payments for 2010 initiatives
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(9 |
) |
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(2 |
) |
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(1 |
) |
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(12 |
) |
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2011 payments for 2011 initiatives
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(1 |
) |
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(1 |
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Net activity of discontinued operations
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(1 |
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(1 |
) |
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Foreign currency effect on liability balance
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3 |
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(1 |
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2 |
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| |
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Accrued liabilities as of June 30, 2011
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$ |
36 |
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$ |
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$ |
1 |
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$ |
9 |
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$ |
46 |
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| |
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- (1)
- The total workforce reduction reserves of $36 million relate to the termination of 255 positions, of which 218 positions had not been terminated as of June 30, 2011.
- (2)
- Accrued liabilities by initiatives were as follows (dollars in millions):
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June 30,
2011 |
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December 31,
2010 |
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2006 initiatives and prior
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$ |
5 |
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$ |
4 |
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2008 initiatives
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1 |
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2009 initiatives
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17 |
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20 |
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2010 initiatives
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14 |
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24 |
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2011 initiatives
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10 |
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| |
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Total
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$ |
46 |
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$ |
49 |
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| |
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Details 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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Polyurethanes |
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Performance
Products |
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Advanced
Materials |
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Textile
Effects |
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Pigments |
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Discontinued
Operations |
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Corporate
and Other |
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Total |
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Accrued liabilities as of January 1, 2011
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$ |
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$ |
1 |
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$ |
2 |
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$ |
25 |
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$ |
8 |
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$ |
8 |
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$ |
5 |
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$ |
49 |
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2011 charges for 2006 and prior initiatives
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1 |
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1 |
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2 |
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2011 charges for 2009 initiatives
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3 |
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3 |
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2011 charges for 2010 initiatives
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2 |
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1 |
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3 |
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2011 charges for 2011 initiatives
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3 |
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5 |
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3 |
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11 |
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Reversal of reserves no longer required
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(3 |
) |
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(3 |
) |
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2011 payments for 2006 and prior initiatives
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(1 |
) |
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(1 |
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2011 payments for 2008 initiatives
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(1 |
) |
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(1 |
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2011 payments for 2009 initiatives
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(5 |
) |
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(5 |
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2011 payments for 2010 initiatives
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(8 |
) |
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(4 |
) |
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(12 |
) |
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2011 payments for 2011 initiatives
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(1 |
) |
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(1 |
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Net activity of discontinued operations
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(1 |
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(1 |
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Foreign currency effect on liability balance
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3 |
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(1 |
) |
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2 |
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Accrued liabilities as of June 30, 2011
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$ |
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$ |
1 |
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$ |
5 |
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$ |
23 |
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$ |
8 |
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$ |
7 |
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$ |
2 |
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$ |
46 |
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Current portion of restructuring reserves
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$ |
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$ |
1 |
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$ |
4 |
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$ |
23 |
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$ |
8 |
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$ |
7 |
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$ |
2 |
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$ |
45 |
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Long-term portion of restructuring reserve
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1 |
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1 |
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Estimated additional future charges for current restructuring projects
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Estimated additional charges within one year
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5 |
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5 |
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Estimated additional charges beyond one year
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Details with respect to cash and noncash restructuring charges by initiative are provided below (dollars in millions):
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Three Months Ended
June 30, 2011 |
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Six Months Ended
June 30, 2011 |
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Cash charges:
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| |
2011 charges for 2006 and prior initiatives
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$ |
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$ |
2 |
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| |
2011 charges for 2009 initiatives
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2 |
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3 |
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| |
2011 charges for 2010 initiatives
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2 |
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|
3 |
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| |
2011 charges for 2011 initiatives
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6 |
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11 |
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Reversal of reserves no longer required
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(1 |
) |
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(3 |
) |
| |
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Total 2011 Restructuring, Impairment and Plant Closing Costs
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$ |
9 |
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$ |
16 |
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Three Months Ended
June 30, 2010 |
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Six Months Ended
June 30, 2010 |
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Cash charges:
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2010 charges for 2005 initiatives
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$ |
1 |
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$ |
1 |
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| |
2010 charges for 2009 initiatives
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3 |
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5 |
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2010 charges for 2010 initiatives
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16 |
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|
20 |
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Reversal of reserves no longer required
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(3 |
) |
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(6 |
) |
| |
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Total 2010 Restructuring, Impairment and Plant Closing Costs
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$ |
17 |
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$ |
20 |
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During the six months ended June 30, 2011, our Advanced Materials segment recorded charges of $3 million primarily related to the reorganization of our global structure and relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas.
During the six months ended June 30, 2011, our Textile Effects segment recorded charges of $8 million of which $5 million related to simplification of the commercial organization and optimization of our distribution network, $2 million related to nonworkforce reductions incurred for the consolidation of our Switzerland manufacturing facilities, and $1 million related to the consolidation of our North Carolina sites. We reversed charges of $3 million which were no longer required for workforce reductions at our production facility in Langweid, Germany and the consolidation of manufacturing activities and processes at our site in Basel, Switzerland.
During the six months ended June 30, 2011, our Pigments segment recorded charges of $7 million of which $3 million related to the closure of our Grimsby, U.K. plant and $3 million related to workforce reductions at our Umbogintwini, South Africa plant. We expect to incur additional charges of $5 million through December 31, 2012, primarily related to the closure of our Grimsby, U.K. plant.
During the six months ended June 30, 2011, we recorded charges of $1 million in Corporate and other primarily related to workforce reductions in connection with a reorganization and regional consolidation of our transactional accounting activities.
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