Restructuring and Asset Impairment

6 Months Ended

Jul. 04, 2021

Restructuring and Related Activities [Abstract]

Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking the most cost-effective means and structure to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company's operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring activities.

Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:



	Three Months Ended				Six Months Ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Restructuring and restructuring-related asset impairment (income)/charges	$	(1,853)	$	22,885	$	844	$	35,484
Other asset impairments	408		—		4,557		—
Restructuring/Asset Impairment (Income)/Charges	$	(1,445)	$	22,885	$	5,401	$	35,484

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:



	Three Months Ended				Six Months Ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Severance and Termination Benefits	$	2,438	$	15,159	$	3,866	$	25,259
Asset Impairment / Disposal of Assets	(5,621)		6,073		(6,485)		8,759
Other Costs	1,330		1,653		3,463		1,466
Restructuring and restructuring-related asset impairment (income)/charges	$	(1,853)	$	22,885	$	844	$	35,484

The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:



	Three Months Ended				Six Months Ended
	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Consumer Packaging	$	173	$	2,007	$	1,258	$	4,209
Industrial Paper Packaging	(4,372)		17,689		(2,939)		23,199
All Other	2,355		2,606		2,520		5,965
Corporate	(9)		583		5		2,111
Restructuring and restructuring-related asset impairment (income)/charges	$	(1,853)	$	22,885	$	844	$	35,484

Restructuring and asset impairment charges are included in “Restructuring/Asset impairment (income)/charges” in the Company's Condensed Consolidated Statements of Income.

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:


	Severance and Termination Benefits		Asset Impairment/ Disposal of Assets		Other Costs		Total
Accrual Activity
Liability at December 31, 2020	$	15,955	$	—	$	511	$	16,466
2021 charges	3,866		(6,485)		3,463		844

Cash receipts/(payments)	(11,160)		10,279		(3,720)		(4,601)
Asset write downs/disposals	—		(3,794)		353		(3,441)
Foreign currency translation	(265)		—		1		(264)
Liability at July 4, 2021	$	8,396	$	—	$	608	$	9,004

"Severance and Termination Benefits" during the first six months of 2021 includes the cost of severance for approximately 450 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts.

"Asset Impairment/Disposal of Assets" during the first six months of 2021 consists primarily of gains from the sale of real estate in the Industrial Paper Packaging segment, and gains from the sale of other assets impaired in the prior year as a result of consolidations in the Company's plastics foods operations, partially offset by restructuring-related asset impairment charges in the Company's temperature-assured packaging business.

“Other Costs” during the first six months of 2021 consists primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance, net of incentive forfeitures.

The Company expects to pay the majority of the remaining restructuring reserves by the end of 2021 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $2,000 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2021. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.

Other Asset Impairments

The Company recognized other asset impairment charges totaling $408 and $4,557 in the three and six months ended July 4, 2021, respectively. The year-to-date charges consist of fixed asset impairments totaling $2,158 in the Company's plastics foods operations, part of the Consumer Packaging segment, and $2,399 in the temperature-assured packaging business, part of the All Other group of businesses. The assets were impaired as the value of their projected undiscounted cash flows was determined to no longer be sufficient to recover their carrying value.

These asset impairment charges are included in “Restructuring/Asset impairment (income)/charges” in the Company’s Condensed Consolidated Statements of Income.