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Restructuring and Impairment Charges
 3 Months Ended
Mar. 31, 2022
Restructuring and Impairment Charges  
Restructuring and Impairment Charges

5. Restructuring and Impairment Charges

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For the first quarter of 2022, Ingredion recorded $2 million of pre-tax restructuring charges. For the first quarter of 2021, we recorded a total of $370 million of pre-tax restructuring and impairment charges, consisting of $360 million of pre-tax impairment charges and $10 million of pre-tax restructuring charges.

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Restructuring Charges

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For the first quarter of 2022, we recorded $2 million of pre-tax net restructuring related charges, which included $1 million of costs as part of our Cost Smart Cost of sales program and $1 million of costs associated with our Cost Smart selling, general and administrative expense (“SG&A”) program.

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For the first quarter of 2021, we recorded a total of $10 million pre-tax restructuring related charges. Of these charges, $5 million were related to our Cost Smart SG&A program, which were primarily for employee-related severance costs recorded in our North America and EMEA segments, professional services costs in our North America segment and other costs. We also recorded $3 million of pre-tax restructuring charges for our Cost Smart Cost of sales program, which were primarily for inventory and mechanical stores write-offs and other costs associated with the closure of our Lane Cove, Australia production facility and closures of North America facilities and product lines including our Berwick, Pennsylvania manufacturing facility and the cessation of ethanol production at our Cedar Rapids, Iowa facility.

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A summary of Ingredion’s severance accrual at March 31, 2022, which we expect to fully pay in 2022, is as follows ($ in millions):

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Balance in severance accrual as of December 31, 2021

    

$

3

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Payments made to terminated employees

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(1)

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Balance in severance accrual as of March 31, 2022

 

$

2

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Impairment Charges

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At the announcement of our agreement to invest in the Arcor joint venture during the first quarter of 2021, we reclassified assets and liabilities we expected to contribute to the joint venture as held for sale in Other assets in the Condensed Consolidated Balance Sheets and we recorded an impairment charge of $360 million based on our preliminary estimates of their fair value. Of the $360 million impairment charge for the net assets contributed to the Arcor joint venture during the first quarter of 2021, $311 million was related to the write-off of the cumulative translation losses associated with the contributed net assets and $49 million was related to the write-down of the contributed net assets.