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BUSINESS REALIGNMENT ACTIVITIES
 12 Months Ended
Dec. 31, 2024
Restructuring and Related Activities [Abstract]  
BUSINESS REALIGNMENT ACTIVITIES BUSINESS REALIGNMENT ACTIVITIES
We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies.
Advancing Agility & Automation Initiative
On February 2, 2024, the Board of Directors of the Company approved a multi-year productivity initiative (“Advancing Agility & Automation Initiative” or “AAA Initiative”) to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings.
The Company estimates that the AAA Initiative will result in total pre-tax costs of $200,000 to $250,000 from inception through 2026. This estimate primarily includes program office execution and third-party costs supporting the design and implementation of the new organizational structure of $100,000 to $120,000, as well as implementation and technology capability costs of $55,000 to $70,000. Additionally, we expect to incur employee severance and related separation benefits of $45,000 to $60,000 as we facilitate workforce reductions and reallocate resources to further drive the Company’s strategic priorities. The cash portion of the total cost is estimated to be $175,000 to $225,000. At the conclusion of the program in 2026, ongoing annual savings are expected to be approximately $300,000.
Since inception through December 31, 2024, we recognized total costs associated with the AAA Initiative of $117,536. These charges predominantly included employee severance and related separation benefits related to workforce reductions and third-party costs supporting the design and implementation of the new organizational structure, as well as technology capability costs. The costs and related benefits of the AAA Initiative predominantly relates to the North America Confectionery segment and Corporate. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs.
2020 International Optimization Program
In the fourth quarter of 2020, we commenced a program (“International Optimization Program”) to streamline resources and investments in select international markets, including the optimization of our China operating model that will improve our operational efficiency and provide for a strong, sustainable and simplified base going forward.
The International Optimization Program was originally expected to total pre-tax costs of $50,000 to $75,000, with cash costs in the range of $40,000 to $65,000, primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities. The costs and related benefits of the International Optimization Program relate to the International segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs. This program was completed in 2023.
For the years ended December 31, 2023 and 2022, we recognized total costs associated with the International Optimization Program of $3,440 and $4,417, respectively. These charges predominantly included third-party charges in support of our initiative to transform our China operating model, as well as severance and employee benefit costs. Since inception, we have incurred pre-tax charges to execute the program totaling $53,799.
Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows:
For the years ended December 31,202420232022
Cost of sales$12,168 $527 $3 
Selling, marketing and administrative expense76,333 2,472 2,425 
Business realignment costs29,035 441 1,989 
Costs associated with business realignment activities$117,536 $3,440 $4,417 
Costs recorded by program in 2024, 2023 and 2022 related to these activities were as follows:
For the years ended December 31,202420232022
Advancing Agility & Automation Initiative:
Severance and employee benefit costs$29,035 $— $— 
Other program costs88,501 — — 
International Optimization Program:
Severance and employee benefit costs$— $441 $2,001 
Other program costs— 2,999 2,416 
Total$117,536 $3,440 $4,417 
The following table presents the liability activity for costs qualifying as exit and disposal costs for the year ended December 31, 2024:
Total
Liability balance at December 31, 2023 (1)
$— 
2024 business realignment charges (2)
29,035 
Cash payments(18,618)
Liability balance at December 31, 2024 (1)
$10,417 
(1)The liability balances reflected above are reported within accrued liabilities and other long-term liabilities.
(2)The costs reflected in the liability roll-forward represent employee-related charges.