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Restructuring Activities | 9 Months Ended
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Sep. 30, 2023
Restructuring and Related Activities [Abstract] |
Restructuring Activities | Restructuring Activities In December 2018, the Board of Directors approved our Reinvent SEE business transformation, including the related restructuring program (“Program”), which concluded as of the end of calendar year 2022. For the three and nine months ended September 30, 2023, restructuring charges and other associated costs related to the Program were not material. On August 7, 2023, the Board of Directors approved a new 3-year cost take-out to grow restructuring program (the “CTO2Grow Program”) as part of Reinvent SEE 2.0. The total cash cost of this program is estimated to be in the range of $140 to $160 million. For the three and nine months ended September 30, 2023, the Company incurred cash expense including $15.3 million of costs associated with contract terminations, $11.0 million of Restructuring charges and nominal other associated costs for the CTO2Grow Program. For the three and nine months ended September 30, 2023, the Company incurred non-cash expense of approximately $34.3 million of other associated costs primarily related to the impairment of property and equipment and inventory obsolescence charges associated with the Kevothermal and plant-based rollstock business closures for the CTO2Grow Program. CTO2Grow Program restructuring spend is estimated to be incurred as follows:
|  | Total Restructuring Program Range |  | Less Program to Date |  | Remaining Restructuring
(In millions) |  | Low |  | High |  |  |  | Low |  | High
Costs of reduction in headcount as a result of reorganization |  | $ | 90 |  |  | $ | 95 |  |  | $ | (11) |  |  | $ | 79 |  |  | $ | 84 |
Other associated costs |  | 20 |  |  | 25 |  |  | — |  |  | 20 |  |  | 25 |
Contract terminations |  | 25 |  |  | 30 |  |  | (15) |  |  | 10 |  |  | 15 |
Total cash expense |  | 135 |  |  | 150 |  |  | (26) |  |  | 109 |  |  | 124 |
Capital expenditures |  | 5 |  |  | 10 |  |  | — |  |  | 5 |  |  | 10 |
Total estimated cash cost(1) |  | $ | 140 |  |  | $ | 160 |  |  | $ | (26) |  |  | $ | 114 |  |  | $ | 134 |
Total estimated non-cash expense(2) |  | $ | 34 |  |  | $ | 34 |  |  | $ | (34) |  |  | $ | — |  |  | $ | — |
Total estimated expense(3) |  | $ | 169 |  |  | $ | 184 |  |  | $ | (60) |  |  | $ | 109 |  |  | $ | 124 |
(1)Total estimated cash cost excludes the impact of proceeds expected from the sale of property and equipment and foreign currency impact. (2)Reflects actual expenses that have been incurred. Ranges associated with future non-cash expenses related to the CTO2Grow Program are difficult to estimate and are not available without unreasonable efforts, as these typically relate to exit and disposal activities. (3)Total estimated expense excludes capital expenditures. The Company also has a restructuring program related to acquisitions. We recorded $0.7 million of income and $0.3 million of expense within Restructuring charges, respectively, during the three and nine months ended September 30, 2023. See Note 5, "Acquisitions," for additional information related to our 2023 Liquibox acquisition. The following table details our aggregate restructuring activities as reflected in the Condensed Consolidated Statements of Operations.
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Other associated costs |  | $ | 34.6 |  |  | $ | 1.6 |  |  | $ | 34.5 |  |  | $ | 8.5 |
Contract terminations |  | 15.3 |  |  | — |  |  | 15.3 |  |  | — |
Restructuring charges |  | 9.8 |  |  | 0.6 |  |  | 9.2 |  |  | 4.6 |
Total charges |  | $ | 59.7 |  |  | $ | 2.2 |  |  | $ | 59.0 |  |  | $ | 13.1 |
Capital expenditures |  | $ | — |  |  | $ | 3.3 |  |  | $ | — |  |  | $ | 9.1 |
The aggregate restructuring accrual, spending and other activity for the nine months ended September 30, 2023 and the accrual balance remaining at September 30, 2023 was as follows:
(In millions) |
Restructuring accrual at December 31, 2022 | $ | 14.7 |
Headcount accrual and accrual adjustments | 9.2 |
Contract termination accrual and adjustments | 11.2 |
Cash payments during 2023 | (12.5) |
Effect of changes in foreign currency exchange rates | (0.2) |
Restructuring accrual at September 30, 2023(1) | $ | 22.4 |
(1)Excludes $4.0 million of remaining lease obligations on terminated contracts included in Current portion of operating lease liabilities and Long-term operating lease liabilities, less current portion on our Condensed Consolidated Balance Sheets. We expect to pay $22.4 million of the accrual balance remaining at September 30, 2023 within the next twelve months. This amount is included in Accrued restructuring costs on the Condensed Consolidated Balance Sheets at September 30, 2023. The CTO2Grow Program was approved by our Board of Directors as a consolidated program benefiting both Food and Protective, and accordingly the expected program spend by reporting segment is not available. However, of the total restructuring accrual of $22.4 million as of September 30, 2023, $17.9 million was attributable to Food and $4.5 million was attributable to Protective. Business Closures In July 2023, the Board of Directors approved a plan to cease operating the Kevothermal temperature assurance business, which resulted in the closure of both the Albuquerque, New Mexico and Hereford, United Kingdom facilities. The decision to cease operations of the Kevothermal business, which is reported in our Protective segment, was triggered by lower volumes and declining financial performance. In September 2023, the Board of Directors approved a plan to cease operating the plant-based rollstock business and line located in Simpsonville, South Carolina. The decision to cease operations for the plant-based rollstock business, which is reported in our Food segment, was triggered by lower demand for our product due to competitive alternatives in the market. We expect to cease full manufacturing operations by February 2024. For the three and nine months ended September 30, 2023, we recorded $51.3 million of closure charges associated with Kevothermal and the plant-based rollstock business, including $25.8 million of impairment related to property and equipment, $15.3 million of contract terminations, $7.7 million of inventory obsolescence charges and $2.5 million of severance and other closure related costs. The closure charges, excluding the severance related costs, are reflected within (Loss) Gain on disposal of businesses and property and equipment, net on the Condensed Consolidated Statements of Operations. The severance related charges are reflected in Restructuring charges on the Condensed Consolidated Statements of Operations. Of the $51.3 million of closure charges, $34.3 million are non-cash. We expect the majority of the cash charges to be paid in 2024.

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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 -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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