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Restructuring and Relocation Activities | 3 Months Ended
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Mar. 31, 2015
Restructuring And Related Activities [Abstract] |
Restructuring and Relocation Activities | Note 9 Restructuring and Relocation Activities The following table details our restructuring activities:
| Three Months Ended March 31, |
| 2015 |  |  | 2014 |
(In millions) | IOP |  |  | EQIP |  |  | Fusion |  |  | Total |  |  | IOP |  |  | EQIP |  |  | Total |
Other associated costs | $ | 1.9 |  |  | $ | 3.0 |  |  | $ | 3.0 |  |  | $ | 7.9 |  |  | $ | 1.4 |  |  | $ | 2.7 |  |  | $ | 4.1 |
Restructuring charges |  | (0.3 | ) |  |  | (6.9 | ) |  |  | 19.9 |  |  |  | 12.7 |  |  |  | 1.3 |  |  |  | 4.8 |  |  |  | 6.1 |
Total | $ | 1.6 |  |  | $ | (3.9 | ) |  | $ | 22.9 |  |  | $ | 20.6 |  |  | $ | 2.7 |  |  | $ | 7.5 |  |  | $ | 10.2 |
Fusion On December 18, 2014, the Board of Directors of the Company approved a new restructuring plan (the “Fusion Program” or the “Plan”), which consists of a portfolio of restructuring projects across all of our divisions as part of our transformation of Sealed Air Corporation into a knowledge-based company, including reduction in headcount and consolidation and relocation of certain facilities and offices. The Company currently estimates that it will incur aggregate costs of approximately $395 million to $405 million in connection with the implementation of this Plan which compares to previously reported estimates of $275 million to $285 million. The increase represents our recent decision to build and own the Campus in Charlotte, North Carolina, rather than lease. The cost of the Charlotte campus is estimated to be approximately $120 million. The net cash cost of the Plan is now expected to be in the range of $330 million to $340 million. The costs associated with the Plan, the majority of which are expected to be incurred between 2015 and 2017, will primarily consist of (i) a reduction in headcount through reorganization and integration, including severance and termination benefits for employees, expected to be approximately $115 million to $120 million, and (ii) other costs associated with the Plan, primarily relating to the building costs of the Charlotte campus, rationalization, consolidation and relocation of certain portions of our global supply chain and other facilities and offices, expected to be approximately $280 million to $285 million. Included in the total cash costs, the Company anticipates approximately $175 million to $185 million of capital expenditures related to the Plan, including the building of the Charlotte campus, of which the majority is expected to be incurred between 2015 and 2016. The other associated costs included in the table above primarily consist of consulting and other costs incurred in connection with the project relocation efforts, which were included in selling, general and administrative expenses on the consolidated statements of operations for the year ended December 31, 2014. The restructuring charges included in the table above primarily consist of termination and benefit costs. On July 23, 2014, we announced that we will be establishing a new global headquarters in Charlotte, North Carolina. We will relocate the headquarters for our divisions, research and development facilities, and corporate offices. Within the next three years, we anticipate approximately 1,300 jobs will be relocated to Charlotte from our former corporate headquarters in Elmwood Park, New Jersey; and facilities in Saddle Brook, New Jersey; Danbury, Connecticut; Racine, Wisconsin; and, Duncan and Greenville, South Carolina. We will also relocate a small number of jobs from other locations. On August 31, 2014, in connection with our relocation efforts, we signed an agreement for purchase and sale relating to our facility located in Racine, Wisconsin. As of December 31, 2014, the building and certain related assets met the criteria of assets held for sale classification. Accordingly, we reclassified $26 million from property, plant and equipment to assets held for sale as of December 31, 2014. The sale closed in January 2015. In addition, we leased back the building until December 2015 but have the option to exit the lease earlier. The final sales price was $30 million, of which net proceeds of $24 million were received as part of the closing along with a $6 million unsecured promissory note to be paid once we exit the facility. We recorded a pre-tax gain on the sale of approximately $3 million in January 2015. The restructuring accrual, spending and other activity for the three months ended March 31, 2015 and the accrual balance remaining at March 31, 2015 related to this program were as follows (in millions):
Fusion restructuring accrual at December 31, 2014 |  | $ | 5.5 |
Accrual and accrual adjustments |  |  | 19.9 |
Cash payments during 2015 |  |  | (1.1 | )
Effect of changes in foreign currency exchange rates |  |  | (0.4 | )
Fusion restructuring accrual at March 31, 2015 |  | $ | 23.9 |
The accrual and accrual adjustments includes a reclassification adjustment of $13 million to transfer two projects from the EQIP Program to the Fusion Program in order to better match the projects to the program synergies. There is no net impact to the financial statements resulting from the reclassification adjustment. Cumulative cash payments made in connection with this program, including associated costs through March 31, 2015, were $7 million. We expect to pay $22 million of the accrual balance remaining at March 31, 2015 within the next twelve months. This amount is included in accrued restructuring costs on the condensed consolidated balance sheet at March 31, 2015. The majority of the remaining accrual of $2 million is expected to be paid in 2016. This amount is included in other non-current liabilities on our condensed consolidated balance sheet at March 31, 2015. There were no capital expenditures in the three months ended March 31, 2015. 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, which is expected to be approximately 750-900 employees and other costs associated with divisional realignment and connected profitability improvement programs, including severance and termination benefits for employees, expected to be approximately $105 million to $120 million, and (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 $90 million. We currently estimate that we will incur total costs of approximately $190 million to $210 million in connection with implementation of this plan, including capital expenditures of approximately $50 million to $55 million. The plan is expected to be substantially completed by the end of 2016. The other 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 months ended March 31, 2015. The restructuring charges included in the table above primarily consist of termination and benefit costs. The restructuring accrual, spending and other activity for the three months ended March 31, 2015 and the accrual balance remaining at March 31, 2015 related to this program were as follows (in millions):
EQIP restructuring accrual at December 31, 2014 |  | $ | 41.9 |
Accrual and accrual adjustments |  |  | (6.9 | )
Cash payments during 2015 |  |  | (9.3 | )
Effect of changes in foreign currency exchange rates |  |  | (2.9 | )
EQIP restructuring accrual at March 31, 2015 |  | $ | 22.8 |
The accrual and accrual adjustments includes a reclassification adjustment of $13 million to transfer two projects from the EQIP Program to the Fusion Program in order to better match the projects to the program synergies. There is no net impact to the financial statements resulting from the reclassification adjustment. Cumulative cash payments made in connection with this program, including associated costs through March 31, 2015, were $125 million. We expect to pay all of the $23 million accrual balance remaining at March 31, 2015 within the next twelve months. This amount is included in accrued restructuring costs on the condensed consolidated balance sheet at March 31, 2015. Capital expenditures related to this program were $2 million in the three months ended March 31, 2015 and $3 million in the three months ended March 31, 2014. Capital expenditures primarily relate to supply chain network optimization. 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 was substantially completed as of the end of 2014. The other associated costs in the table above primarily consist of consulting fees included in selling, general and administrative expenses on the condensed consolidated statement of operations. The restructuring accrual, spending and other activity for the three months ended March 31, 2015 and the accrual balance remaining at March 31, 2015 related to this program were as follows (in millions):
IOP restructuring accrual at December 31, 2014 |  | $ | 13.1 |
Accrual and accrual adjustments |  |  | (0.3 | )
Cash payments during 2015 |  |  | (3.7 | )
Effect of changes in foreign currency exchange rates |  |  | (0.8 | )
IOP restructuring accrual at March 31, 2015 |  | $ | 8.3 |
Cumulative cash payments made in connection with this program, including associated costs through March 31, 2015, were $225 million. We expect to pay all of the $8 million accrual balance as of March 31, 2015 within the next twelve months. This amount is included in accrued restructuring costs on the condensed consolidated balance sheet at March 31, 2015. Capital expenditures related to this program were less than $1 million in the three months ended March 31, 2015 and March 31, 2014. Capital expenditures mainly relate to facilities and supply chain network optimization.

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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 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: 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 + Details
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