Registration of securities issued in business combination transactions

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

v2.4.0.8
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
 3 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2013
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.

11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

        As of December 31, 2013, 2012 and 2011, accrued restructuring, impairment and plant closing costs by type of cost and initiative consisted of the following (dollars in millions):

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

Accrued liabilities as of January 1, 2011

   $ 36   $ 1   $ 7   $ 5   $ 49  

2011 charges for 2010 and prior initiatives

     4     2     10     7     23  

2011 charges for 2011 initiatives

     87     —     1     1     89  

Reversal of reserves no longer required

     (5 )   —     —     —     (5 )

2011 payments for 2010 and prior initiatives

     (26 )   (3 )   (1 )   (8 )   (38 )

2011 payments for 2011 initiatives

     (13 )   —     —     (1 )   (14 )

Net activity of discontinued operations

     —     —     —     (2 )   (2 )

Foreign currency effect on liability balance

     (10 )   —     —     —     (10 )
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2011

     73     —     17     2     92  

2012 charges for 2011 and prior initiatives

     9     5     —     10     24  

2012 charges for 2012 initiatives

     64     —     —     5     69  

Reversal of reserves no longer required

     (15 )   —     —     (1 )   (16 )

2012 payments for 2011 and prior initiatives

     (31 )   (6 )   (2 )   (11 )   (50 )

2012 payments for 2012 initiatives

     (12 )   —     —     (6 )   (18 )

Foreign currency effect on liability balance

     2     1     —     1     4  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2012

     90     —     15     —     105  

2013 charges for 2012 and prior initiatives

     32     16     53     20     121  

2013 charges for 2013 initiatives

     28     —     —     8     36  

Reversal of reserves no longer required

     (22 )   —     (4 )   —     (26 )

2013 payments for 2012 and prior initiatives

     (66 )   (16 )   (3 )   (19 )   (104 )

2013 payments for 2013 initiatives

     (10 )   —     —     (8 )   (18 )

Net activity of discontinued operations

     —     —     (3 )   —     (3 )

Foreign currency effect on liability balance

     —     —     2     —     2  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2013

   $ 52   $ —   $ 60   $ 1   $ 113  
                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                       
(1)
The total workforce reduction reserves of $52 million relate to the termination of 403 positions, of which 324 positions had not been terminated as of December 31, 2013.

(2)
Accrued liabilities remaining at December 31, 2013 and 2012 by year of initiatives were as follows (dollars in millions):

 
   December 31,  
 
   2013   2012  

2011 initiatives and prior

   $ 74   $ 52  

2012 initiatives

     21     53  

2013 initiatives

     18     —  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 113   $ 105  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

        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, 2011

   $ —   $ 1   $ 2   $ 25   $ 8   $ 8   $ 5   $ 49  

2011 charges for 2010 and prior initiatives

     —     —     —     14     7     —     2     23  

2011 charges for 2011 initiatives

     —     —     21     65     3     —     —     89  

Reversal of reserves no longer required

     —     —     (1 )   (4 )   —     —     —     (5 )

2011 payments for 2010 and prior initiatives

     —     —     (1 )   (18 )   (13 )   —     (6 )   (38 )

2011 payments for 2011 initiatives

     —     —     (7 )   (5 )   (2 )   —     —     (14 )

Net activity of discontinued operations

     —     —     —     —     —     (2 )   —     (2 )

Foreign currency effect on liability balance

     —     —     (2 )   (8 )   —     —     —     (10 )
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2011

     —     1     12     69     3     6     1     92  

2012 charges for 2011 and prior initiatives

     —     1     4     14     4     —     1     24  

2012 charges for 2012 initiatives

     38     —     30     —     —     —     1     69  

Reversal of reserves no longer required

     —     —     —     (16 )   —     —     —     (16 )

2012 payments for 2011 and prior initiatives

     —     (2 )   (15 )   (27 )   (5 )   —     (1 )   (50 )

2012 payments for 2012 initiatives

     (12 )   —     (6 )   —     —     —     —     (18 )

Foreign currency effect on liability balance

     1     —     2     2     (1 )   —     —     4  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2012

     27     —     27     42     1     6     2     105  

2013 charges for 2012 and prior initiatives

     5     —     38     73     4     —     1     121  

2013 charges for 2013 initiatives

     —     18     —     1     —     —     17     36  

Reversal of reserves no longer required

     (9 )   —     (8 )   (9 )   —     —     —     (26 )

2013 payments for 2012 and prior initiatives

     (14 )   —     (45 )   (41 )   (3 )   —     (1 )   (104 )

2013 payments for 2013 initiatives

     —     (7 )   —     —     (1 )   —     (10 )   (18 )

Net activity of discontinued operations

     —     —     —     —     —     (3 )   —     (3 )

Foreign currency effect on liability balance

     —     (1 )   —     2     1     —     —     2  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Accrued liabilities as of December 31, 2013

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

Current portion of restructuring reserves

   $ 4   $ 10   $ 12   $ 15   $ 2   $ 3   $ 9   $ 55  

Long-term portion of restructuring reserve

     5     —     —     53     —     —     —     58  

        Details with respect to cash and noncash restructuring charges for the years ended December 31, 2013, 2012 and 2011 by initiative are provided below (dollars in millions):

Cash charges:

        

2013 charges for 2012 and prior initiatives

   $ 121  

2013 charges for 2013 initiatives

     36  

Reversal of reserves no longer required

     (26 )

Pension-related charges

     7  

Non-cash charges

     13  
       
​ ​ ​ ​ ​

Total 2013 Restructuring, Impairment and Plant Closing Costs

   $ 151  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       

Cash charges:

        

2012 charges for 2011 and prior initiatives

   $ 24  

2012 charges for 2012 initiatives

     69  

Reversal of reserves no longer required

     (16 )

Non-cash charges

     15  
       
​ ​ ​ ​ ​

Total 2012 Restructuring, Impairment and Plant Closing Costs

   $ 92  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       

Cash charges:

        

2011 charges for 2010 and prior initiatives

   $ 23  

2011 charges for 2011 initiatives

     89  

Reversal of reserves no longer required

     (5 )

Non-cash charges

     60  
       
​ ​ ​ ​ ​

Total 2011 Restructuring, Impairment and Plant Closing Costs

   $ 167  
       
​ ​ ​ ​ ​

2013 RESTRUCTURING ACTIVITIES

        During 2012, our Polyurethanes segment began implementing a restructuring program to reduce annualized fixed costs. As of December 31, 2013, our Polyurethanes segment restructuring reserve consisted of $9 million related to this program. In connection with this program, we recorded charges of $5 million and reversed charges of $9 million during 2013 primarily for workforce reductions. Our Polyurethanes segment also recorded pension-related charges of $6 million during 2013 related to this program.

        During 2013, our Performance Products segment implemented a restructuring program to refocus our surfactants business in Europe. As of December 31, 2013, our Performance Products segment restructuring reserve consisted of $10 million related to this program. In connection with this program, we recorded charges of $13 million during 2013 primarily related to workforce reductions. Additionally, we recorded charges of $5 million during 2013 primarily related to workforce reductions in our Australian operation.

        During the fourth quarter of 2012, our Advanced Materials segment began implementing a global transformational change program, subject to consultation with relevant employee representatives, designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and improve its long-term global competitiveness. As of December 31, 2013, our Advanced Materials segment restructuring reserve consisted of $12 million primarily related to this program. During 2013, we recorded charges of $38 million and noncash charges of $4 million and reversed charges of $8 million.

        During 2011, our Textile Effects segment began implementing a significant restructuring program, 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 segment's long-term global competitiveness. In connection with this program, during 2013, our Textile Effects segment recorded charges of $53 million for the early termination of long-term fixed cost contracts, $16 million for decommissioning, $3 million for other restructuring and $1 million for workforce reductions and reversed charges of $5 million related to workforce reductions, as well as recorded a $9 million noncash charge for a pension settlement loss. In addition, during 2013, we reversed charges of $4 million that were no longer required for long term fixed costs contracts in relation to our consolidation of manufacturing activities and processes at our site in Basel, Switzerland.

        As of December 31, 2013, our Pigments segment restructuring reserve consisted of $2 million primarily related to workforce reductions at our Scarlino, Italy plant. During 2013, our Pigments segment recorded charges of $4 million primarily related to the closure of our Grimsby, U.K. plant.

        As of December 31, 2013, our Corporate and other segment restructuring reserve consisted of $9 million primarily related to a reorganization of our global information technology organization and a reorganization and regional consolidation of our purchasing activities. During 2013, we recorded charges of $18 million in Corporate and other primarily related to these initiatives. Our Corporate and other segment also recorded pension-related charges of $1 million during 2013 related to our initiatives.

2012 RESTRUCTURING ACTIVITIES

        During 2012, our Polyurethanes segment implemented a restructuring program to reduce annualized fixed costs. In connection with this program, we recorded restructuring expenses of $38 million during 2012 primarily for workforce reductions. As of December 31, 2012, our Polyurethanes segment restructuring reserve consisted of $27 million related to this program.

        During the fourth quarter of 2012, our Advanced Materials segment began implementing a global transformational change program, subject to consultation with relevant employee representatives, designed to improve the segment's manufacturing efficiencies, enhance commercial excellence and ensure its long-term global competitiveness. As of December 31, 2012, our Advanced Materials segment restructuring reserve consisted of $27 million primarily related to this program. During 2012, we recorded charges of $38 million of which $28 million related to our global transformational change program, $3 million related to the reorganization of our global structure and relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas and $3 million related primarily to a redesign of our planning process focused on inventory reduction. Our Advanced Materials segment also recorded noncash charges of $4 million related to pension settlements.

        During 2011, our Textile Effects segment began implementing a significant restructuring program, 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 segment's long-term global competitiveness. In connection with this plan, during 2012, we recorded cash charges of $1 million for workforce reductions, $9 million for decommissioning and other restructuring expenses, and noncash charges of $11 million primarily for pension settlements. In addition, during 2012, our Textile Effects segment recorded charges of $4 million of which $2 million related to the closure of our St. Fons, France facility and $2 million related to a global transfer pricing initiative. We reversed charges of $16 million which were no longer required for workforce reductions at our production facility in Langweid, Germany, the simplification of the commercial organization and optimization of our distribution network, the consolidation of manufacturing activities and processes at our site in Basel, Switzerland and the closure of our production facilities in Basel, Switzerland.

        As of December 31, 2012, our Pigments segment restructuring reserve consisted of $1 million primarily related to workforce reductions at our Scarlino, Italy plant. During 2012, our Pigments segment recorded charges of $4 million related to the closure of our Grimsby, U.K. plant.

        As of December 31, 2012, our Corporate and other segment restructuring reserve consisted of $2 million primarily related to a reorganization and regional consolidation of our purchasing activities. During 2012, we recorded charges of $2 million in Corporate and other primarily related to workforce reductions in connection with this project.

2011 RESTRUCTURING ACTIVITIES

        As of December 31, 2011, our Advanced Materials segment restructuring reserve consisted of $12 million related to workforce reductions in connection with a reorganization of its global structure and relocation of its divisional headquarters from Basel, Switzerland to The Woodlands, Texas. During 2011, our Advanced Materials segment recorded net charges of $20 million primarily related this activity.

        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 2011, we recorded a charge of $62 million for workforce reduction, a pension curtailment gain of $38 million and a charge of $53 million for the impairment of long-lived assets at our Basel, Switzerland manufacturing facility. For purposes of calculating the impairment charge, the fair value of the Basel, Switzerland manufacturing facility was based on the discounted cash flows of that facility. As of December 31, 2011, our Textile Effects segment restructuring reserve consisted of $69 million, of which $2 million related to opening balance sheet liabilities from the Textile Effects Acquisition, $2 million related to workforce reductions at our production facility in Langweid, Germany, $2 million related to the simplification of the commercial organization and optimization of our distribution network, $15 million related to the consolidation of manufacturing activities and processes at our site in Basel, Switzerland, $47 million related to the closure of our production facilities and business support offices in Basel, Switzerland and $1 million related to the consolidation of our North Carolina sites.

        In addition, during 2011, our Textile Effects segment recorded charges of $22 million, of which $5 million related to simplification of our commercial organization and optimization of our distribution network, $12 million related to non-workforce reductions incurred for the consolidation of our Switzerland manufacturing facilities, and $4 million related to the consolidation of our North Carolina sites. We reversed charges of $4 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.

        As of December 31, 2011, our Pigments segment restructuring reserve consisted of $3 million primarily related to workforce reductions at our Huelva, Spain and Scarlino, Italy plants. During 2011, our Pigments segment recorded charges of $10 million, of which $7 million related to the closure of our Grimsby, U.K. plant and $3 million related to workforce reductions at our Umbogintwini, South Africa plant.

        As of December 31, 2011, our Corporate and other segment restructuring reserve consisted of $1 million primarily related to a reorganization and regional consolidation of our transactional accounting activities. During 2011, we recorded charges of $2 million in Corporate and other primarily related to workforce reductions in connection with this project.