Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

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RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
 3 Months Ended
Mar. 31, 2014
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS  
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

        As of March 31, 2014 and December 31, 2013, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

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

Accrued liabilities as of January 1, 2014

   $ 52   $ —   $ 60   $ 1   $ 113  

2014 charges for 2013 and prior initiatives

     33     2     4     2     41  

Reversal of reserves no longer required

     (4 )   —     —     —     (4 )

2014 payments for 2013 and prior initiatives

     (17 )   (2 )   (3 )   (2 )   (24 )
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of March 31, 2014

   $ 64   $ —   $ 61   $ 1   $ 126  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                       
(1)
The workforce reduction reserves relate to the termination of 483 positions, of which 415 positions had not been terminated as of March 31, 2014.

(2)
Accrued liabilities by initiatives were as follows (dollars in millions):

 
   March 31,
2014		   December 31,
2013		  

2012 and prior initiatives

   $ 83   $ 95  

2013 initiatives

     43     18  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 126   $ 113  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

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

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

Accrued liabilities as of January 1, 2014

   $ 9   $ 10   $ 12   $ 68   $ 2   $ 3   $ 9   $ 113  

2014 charges for 2013 and prior initiatives

     —     23     7     6     3     —     2     41  

Reversal of reserves no longer required

     —     —     (3 )   —     —     —     (1 )   (4 )

2014 payments for 2013 and prior initiatives

     (1 )   (1 )   (9 )   (10 )   (1 )   —     (2 )   (24 )

Foreign currency effect on liability balance

     —     —     —     1     (1 )   —     —     —  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of March 31, 2014

   $ 8   $ 32   $ 7   $ 65   $ 3   $ 3   $ 8   $ 126  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

Current portion of restructuring reserves

   $ 3   $ 32   $ 7   $ 12   $ 3   $ 3   $ 8   $ 68  

Long-term portion of restructuring reserves

     5     —     —     53     —     —     —     58  

        Details with respect to cash and noncash restructuring charges for the three months ended March 31, 2014 and 2013 by initiative are provided below (dollars in millions):

 
   Three months
ended
March 31, 2014		  

Cash charges:

        

2014 charges for 2013 and prior initiatives

   $ 41  

Pension related charges

     1  

Reversal of reserves no longer required

     (4 )

Non-cash charges

     1  
       
​ ​ ​ ​ ​

Total 2014 Restructuring, Impairment and Plant Closing Costs

   $ 39  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       


 

 
   Three months
ended
March 31, 2013		  

Cash charges:

        

2013 charges for 2012 and prior initiatives

   $ 44  

2013 charges for 2013 initiatives

     2  

Pension related charges

     4  

Reversal of reserves no longer required

     (7 )

Non-cash charges

     1  
       
​ ​ ​ ​ ​

Total 2013 Restructuring, Impairment and Plant Closing Costs

   $ 44  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       

2014 RESTRUCTURING ACTIVITIES

        During 2013, our Performance Products segment initiated a restructuring program to refocus our surfactants business in Europe. During the three months ended March 31, 2014, we recorded charges of $23 million primarily related to workforce reductions and a charge of $1 million for the impairment of long-lived assets relating to the announced agreement to purchase our Lavera, France manufacturing facility by Wilmar Europe Holdings B.V..

        During the three months ended March 31, 2014, our Advanced Materials segment recorded charges of $7 million primarily related to workforce reductions related to our global transformational change program designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and improve its long-term global competitiveness. Our Advanced Materials segment also reversed charges of $3 million related to this initiative.

        On September 27, 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 three months ended March 31, 2014, our Textile Effects segment recorded charges of $2 million for long-term contract termination costs and $2 million for decommissioning associated with this initiative. Additionally, we recorded charges of $2 million for long-term contract termination costs for other initiatives.

        During the three months ended March 31, 2014, our Pigments segment recorded charges of $3 million primarily related to the workforce reductions at our Huelva, Spain facility.

2013 RESTRUCTURING ACTIVITIES

        During the three months ended March 31, 2013, our Polyurethanes segment reversed charges of $4 million related to workforce reductions in association with our program to reduce annualized fixed costs by approximately $75 million. Our Polyurethanes segment also recorded pension-related settlement charges of $5 million related to this program.

        During the three months ended March 31, 2013, our Advanced Materials segment recorded charges of $23 million primarily related to workforce reductions related to our global transformational change program designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and improve its long-term global competitiveness. Our Advanced Materials segment also reversed charges of $2 million related to this initiative.

        On September 27, 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 three months ended March 2013, our Textile Effects segment recorded charges of $16 million for long-term contract termination costs, $4 million for decommissioning and $1 million for other restructuring and reversed charges of $1 million related to workforce reductions associated with this initiative.