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Restructuring Activities | 9 Months Ended
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Sep. 30, 2013
Restructuring Activities | (9) Restructuring Activities 2013 Earnings Quality Improvement Program (EQIP) In May 2013, we announced the commencement of EQIP, which is an initiative to deliver meaningful cost savings and network optimization. The costs associated with this plan consist primarily of (i) a reduction in headcount (expected to be approximately 400-500 employees) and other costs associated with divisional realignment and connected profitability improvement programs, including severance and termination benefits for employees, expected to be approximately $90 million to $95 million, (ii) costs and capital expenditures associated with incremental supply chain network optimization projects, including facility relocation and closures, expected to be approximately $85 million to $95 million, and (iii) other costs associated with the plan, currently estimated to be approximately $5 million to $10 million. As a result, we currently estimate that we will incur total costs of approximately $180 million to $200 million in connection with implementation of this plan, including capital expenditures of approximately $55 million to $70 million. The above amounts include anticipated cash payments of $65 million in 2013. These amounts are preliminary estimates based on the information currently available to management. The plan is expected to be completed by the end of 2015. The associated costs and related restructuring charges for EQIP in the three and nine months ended September 30, 2013 are included in the table below:
|  | Three Months Ended September 30, 2013 |  |  | Nine Months Ended September 30, 2013 |
Associated costs |  | $ | 4.8 |  |  | $ | 6.7 |
Restructuring charges |  |  | 48.0 |  |  |  | 64.7 |
Total |  | $ | 52.8 |  |  | $ | 71.4 |
The associated costs included in the table above primarily consist of consulting and rebranding costs incurred in connection with the rebranding of the Company and its divisions, which were included in selling, general and administrative expenses on the condensed consolidated statements of operations for the three and nine months ended September 30, 2013. The restructuring charges included in the table above primarily consist of termination and benefit costs. The restructuring accrual, spending and other activity for the nine months ended September 30, 2013 and the accrual balance remaining at September 30, 2013 related to this program were as follows:
EQIP restructuring accrual at December 31, 2012 |  | $ | — |
Accrual and accrual adjustments |  |  | 64.7 |
Cash payments during 2013 |  |  | (7.1 | )
Effect of changes in foreign currency exchange rates |  |  | 0.5 |
EQIP restructuring accrual at September 30, 2013 |  | $ | 58.1 |
Cash payments including associated costs were $14 million in the nine months ended September 30, 2013. We expect to pay $42 million of the accrual balance remaining at September 30, 2013 within the next twelve months. This amount is included in accrued restructuring costs on the condensed consolidated balance sheet at September 30, 2013. The majority of the remaining accrual of $16 million is expected to be paid in 2014 and 2015 with minimal amounts to be paid out in 2016. This amount is included in other liabilities on our condensed consolidated balance sheet at September 30, 2013. 2011-2014 Integration and Optimization Program (IOP) In December 2011, we initiated a restructuring program associated with the integration of Diversey’s business following our acquisition of Diversey on October 3, 2011. The program primarily consists of (i) reduction in headcount, (ii) consolidation of facilities, (iii) supply chain network optimization, and (iv) certain other capital expenditures. This program is expected to be completed by the end of 2014. The associated costs and related restructuring charges for IOP in the three and nine months ended September 30, 2013 and 2012 are included in the table below:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Associated costs |  | $ | 3.6 |  |  | $ | 2.9 |  |  | $ | 12.1 |  |  | $ | 10.3 |
Restructuring charges |  |  | 0.2 |  |  |  | 37.5 |  |  |  | (4.8 | ) |  |  | 110.6 |
Total |  | $ | 3.8 |  |  | $ | 40.4 |  |  | $ | 7.3 |  |  | $ | 120.9 |
The associated costs in the table above primarily consist of consulting fees included in selling, general and administrative expenses on the condensed consolidated statements of operations for the three and nine months ended September 30, 2013. The associated costs for the nine months ended September 30, 2012 include asset impairment charges of $5 million related to a facility closure in the U.S., included in cost of sales in our Food Care segment. The restructuring charges included in the table above primarily consist of termination and benefits costs, including cash-settled stock appreciation rights that were previously issued to Diversey employees as a portion of the total consideration for the acquisition of Diversey of $0.2 million and $1 million for the three and nine months ended September 30, 2013. This compares to a nominal amount for the three months ended September 30, 2012 and $8 million for the nine months ended September 30, 2012. See Note 15, “Stockholders’ Equity,” for further details of these awards. These charges were included in restructuring and other charges on our condensed consolidated statements of operations. The restructuring accrual, spending and other activity for the nine months ended September 30, 2013 and the accrual balance remaining at September 30, 2013 related to this program were as follows:
IOP restructuring accrual at December 31, 2012 |  | $ | 88.2 |
Revision to accrual |  |  | (8.7 | )
Additional accrual |  |  | 3.9 |
Cash payments during 2013 |  |  | (46.0 | )
Effect of changes in foreign currency exchange rates |  |  | (1.4 | )
IOP restructuring accrual at September 30, 2013 |  | $ | 36.0 |
Cumulative cash payments including associated costs made in connection with this program through September 30, 2013 were $190 million. We expect to pay $33 million of the accrual balance remaining at September 30, 2013 within the next twelve months. This amount is included in accrued restructuring costs on the condensed consolidated balance sheet at September 30, 2013. The majority of the remaining accrual of $3 million is expected to be paid in 2014 with minimal amounts to be paid out in 2015. This amount is included in other liabilities on our condensed consolidated balance sheet at September 30, 2013.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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