XML 26 R15.htm IDEA: XBRL DOCUMENT

Restructuring and Impairment Charges

6 Months Ended

Jun. 30, 2019

Restructuring and Impairment Charges

5. Restructuring and Impairment Charges

For the three and six months ended June 30, 2019, the Company recorded $9 million and $13 million of pre-tax restructuring charges, respectively. During 2018, the Company introduced its Cost Smart program, designed to improve

profitability, further streamline its global business and deliver increased value to shareholders through anticipated savings in cost of sales, including freight, and SG&A. For the three and six months ended June 30, 2019, the Company recorded $6 million and $9 million, respectively, of other costs, including professional services, and employee-related severance in the North America and South America segments as part of its Cost Smart SG&A program. This included $1 million and $2 million of other costs associated with the Finance Transformation initiative in Latin America for the three and six months ended June 30, 2019, respectively. The Company expects to incur less than $1 million in other costs during the remainder of 2019 related to this Finance Transformation initiative. Additionally, for the three and six months ended June 30, 2019, the Company recorded $3 million and $4 million, respectively, of other costs, including professional services, as part of the Cost Smart cost of sales program, including $1 million and $2 million, respectively, in relation to the prior year cessation of wet-milling at the Stockton, California plant. The Company does not expect to incur additional costs during the remainder of 2019 to complete this project.

For the three and six months ended June 30, 2018, the Company recorded $8 million and $11 million of pre-tax restructuring charges, respectively, consisting of $6 million of employee-related severance costs in relation to its Cost Smart SG&A program in its South America and North America segments. The Company also recorded other costs related to the Finance Transformation initiative of $2 million and $4 million for the three and six months ended June 30, 2018, respectively. In addition, there were other restructuring costs related to the leaf extraction process in Brazil of $1 million for the six months ended June 30, 2018.

A summary of the Company’s employee-related severance accrual as of June 30, 2019 is as follows (in millions):



Balance in severance accrual as of December 31, 2018	$	10
Cost Smart cost of sales and SG&A		5
Payments made to terminated employees		(9)
Balance in severance accrual as of June 30, 2019	$	6

Of the $6 million severance accrual as of June 30, 2019, $5 million is expected to be paid in the next 12 months.