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Restructuring and Impairment Charges | 9 Months Ended
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Sep. 30, 2021
Restructuring and Impairment Charges |
Restructuring and Impairment Charges | ​ 5. Restructuring and Impairment Charges ​ For the three and nine months ended September 30, 2021, the Company recorded $12 million of net pre-tax restructuring and impairment income and $362 million of pre-tax restructuring and impairment charges, respectively. During the three months ended September 30, 2021, the Company recorded a $20 million adjustment to its estimated final impairment of the net assets contributed to the Arcor joint venture as described in Note 3 of the Notes to the Condensed Consolidated Financial Statements and below, based upon the final transaction terms, working capital, and foreign exchange impacts. This adjustment was partially offset by pre-tax restructuring charges of $8 million primarily related to the Company’s Cost Smart program. For the nine months ended September 30, 2021, the Company recorded total impairment charges of $340 million related to the net assets contributed to the Arcor joint venture, and pre-tax restructuring charges of $22 million primarily related to the Company’s Cost Smart program. ​ For the three months and nine months ended September 30, 2020, the Company recorded $16 million and $41 million of pre-tax restructuring and impairment charges, respectively. For the three months ended September 30, 2020, these charges included pre-tax restructuring charges of $6 million primarily related to the Company’s Cost Smart program and an other-than-temporary impairment of $10 million on its equity method investment in Verdient Foods Inc. For the nine months ended September 30, 2020, the Company recorded pre-tax restructuring charges of $31 million primarily related to its Cost Smart program and an other-than-temporary impairment of $10 million on its equity method investment in Verdient Foods Inc. ​ Impairment Charges ​ On February 12, 2021, the Company signed an agreement with an affiliate of Grupo Arcor, an Argentine food company, to establish Ingrear Holding S.A., a joint venture to combine and operate five manufacturing facilities in Argentina to sell value-added ingredients to customers in the food, beverage, pharmaceutical and other industries in Argentina, Chile and Uruguay. On August 2, 2021, the Company and Grupo Arcor completed all closing conditions to finalize the transaction and formally establish the Arcor joint venture. The Arcor joint venture is managed by a jointly appointed team of executives. ​ At the announcement of the agreement, during the three months ended March 31, 2021, the Company recorded the assets and liabilities expected to be contributed as held for sale. The Company recorded an impairment of $360 million based upon the estimated fair value of the assets and liabilities classified as held for sale. Upon completion of the transaction, the Company disposed of the assets and liabilities from its Argentina, Chile and Uruguay operations, that were previously accounted for as held for sale, and transferred them to the Arcor joint venture in exchange for an equity share in the venture. The Company has accounted for its share of the venture as an equity method investment, as discussed in Note 3 of the Notes to the Condensed Consolidated Financial Statements. Upon disposal, the Company valued the assets and liabilities transferred at fair value. This resulted in a $20 million favorable adjustment to the estimated impairment charge. The favorable adjustment was recorded during the three months ended September 30, 2021. The total net impairment charge was $340 million for the nine months ended September 30, 2021, of which $311 million was related to the write-off of the cumulative translation losses associated with the contributed net assets and $29 million was related to the write-down to fair value of the contributed net assets to fair value. The Company recorded the impairment within Restructuring/impairment charges and related adjustments in the Condensed Consolidated Statements of Income during the nine months ended September 30, 2021. ​ Restructuring Charges ​ For the three months ended September 30, 2021, the Company recorded $8 million of pre-tax restructuring related charges, consisting of $4 million of employee-related and other costs, including professional services, associated with its Cost Smart selling, general, and administrative expense (“SG&A”) program and $3 million of restructuring related charges primarily in North America as a part of its Cost Smart Cost of sales program. The Company also recorded $1 million of restructuring charges related to disposition of the assets contributed to the Arcor joint venture transaction described above. ​ For the nine months ended September 30, 2021, the Company recorded $22 million of pre-tax restructuring related charges, consisting of $13 million of employee-related and other costs, including professional services, associated with its Cost Smart SG&A program and $11 million of restructuring related charges as part of its Cost Smart Cost of sales program, primarily in North America. The Cost Smart Cost of sales program charges were partly offset by a $5 million gain on the sale of the Stockton, California land and building during the period. The Company also recorded $3 million of restructuring charges related to disposition of the assets contributed to the Arcor joint venture transaction described above. ​ For the three and nine months ended September 30, 2020, the Company recorded a total of $6 million and $31 million of pre-tax restructuring related charges, respectively. For the three and nine months ended September 30, 2020, the Company recorded $2 million and $17 million of pre-tax restructuring charges for its Cost Smart Cost of sales program, respectively. During the three months ended September 30, 2020, the Company recorded $1 million of other restructuring costs related to the closure of the Lane Cove, Australia manufacturing facility and $1 million of other costs related to the closure of the Stockton, California manufacturing facility. During the nine months ended September 30, 2020, the Company recorded $10 million of restructuring charges related to the closure of the Lane Cove, Australia manufacturing facility, $6 million related to the closure of the Stockton, California manufacturing facility and $1 million of other restructuring costs. The Lane Cove, Australia facility restructuring costs consisted of $6 million of asset write-offs, $3 million of other costs, and $1 million of accelerated depreciation. The Stockton, California facility restructuring costs consisted of $4 million of accelerated depreciation, $1 million of employee-related severance, and $1 million of other costs. ​ Additionally, the Company recorded pre-tax restructuring charges of $4 million and $14 million during the three and nine months ended September 30, 2020, respectively, for its Cost Smart SG&A program. During the three months ended September 30, 2020, the Company recorded $4 million of pre-tax restructuring charges, consisting primarily of other costs, including professional services, in North America. During the nine months ended September 30, 2020, the Company recorded pre-tax restructuring costs of $14 million primarily in North America, consisting of $12 million of other costs, including professional services, and $2 million of employee-related severance. ​ A summary of the Company’s employee-related severance accrual as of September 30, 2021 is as follows (in millions): ​
​ | ​ | ​ | ​ | ​
Balance in severance accrual as of December 31, 2020 |  | $ | 12 | ​
Joint venture related | ​ | ​ | 1 | ​
Cost Smart Cost of sales and SG&A | ​ | ​ | 1 | ​
Payments made to terminated employees | ​ | ​ | (10) | ​
Balance in severance accrual as of September 30, 2021 |  | $ | 4 | ​
​ The entire $4 million severance accrual as of September 30, 2021 is expected to be paid in the next 12 months. ​ During the year ended December 31, 2020, the Company identified property, plant and equipment assets within the Stockton, California and Lane Cove, Australia locations that met the held for sale criteria totaling $8 million. During the nine months ended September 30, 2021, the Company sold the Stockton, California land and building for $11 million, resulting in a gain of $5 million. The remaining assets held for sale totaled $2 million as of September 30, 2021. The assets held for sale are reported within Other assets on the Condensed Consolidated Balance Sheets.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI http://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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