Rationalization Charges

9 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

We continually evaluate cost reduction opportunities across each of our businesses, including rationalizations of our existing facilities through plant closings and downsizings. We use a disciplined approach to identify opportunities that generate attractive cash returns. Rationalization charges by business segment were as follows:



	Three Months Ended				Nine Months Ended
	Sept. 30, 2019		Sept. 30, 2018		Sept. 30, 2019		Sept. 30, 2018
	(Dollars in thousands)
Metal containers	$	3,035	$	72	$	42,280	$	812
Closures	72		111		5,979		150
Plastic containers	88		105		335		521
	$	3,195	$	288	$	48,594	$	1,483

In June 2019, we announced a footprint optimization plan for our metal container business, which includes the closing of our metal container manufacturing facilities in Mt. Vernon, Missouri and Waupun, Wisconsin anticipated to occur in the fourth quarter of 2019. These plant closings, in conjunction with the prior ratification of a new labor agreement at our Menomonee Falls, Wisconsin metal container manufacturing facility that provided for the withdrawal for that facility from the Central States, Southeast and Southwest Areas Pension Plan, or the Central States Pension Plan, will result in our complete withdrawal from the Central States Pension Plan. We estimate net rationalization charges for this plan of $3.7 million for the plant closings and $56.4 million for the withdrawal from the Central States Pension Plan. We recorded total rationalization charges for this plan of $40.7 million in the first nine months of 2019 largely to recognize the present value of the estimated withdrawal liability related to the Central States Pension Plan. Remaining expenses and cash expenditures for the plant closings are not expected to be significant. Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $1.0 million per year and be recognized annually for the next twenty years, and remaining cash expenditures related to the withdrawal from the Central States Pension Plan are expected to be approximately $2.8 million annually for the next twenty years, beginning in 2020.

Rationalization charges in the first nine months of 2019 for the closures business were primarily related to the announced shutdown in the first quarter of 2019 of the Torello, Spain metal closures manufacturing facility.

Activity in reserves for our rationalization plans were as follows:



	Employee Severance and Benefits			Plant Exit Costs			Non-Cash Asset Write-Down			Total
	(Dollars in thousands)
Balance at December 31, 2018	$	130		$	1,482		$	—		$	1,612
Charged to expense	42,556			808			5,230			48,594
Utilized and currency translation	(2,543		)	(1,241		)	(5,230		)	(9,014		)
Balance at September 30, 2019	$	40,143		$	1,049		$	—		$	41,192

Rationalization reserves as of September 30, 2019 were recorded in our Condensed Consolidated Balance Sheets as accrued liabilities of $5.3 million and other liabilities of $35.9 million. Exclusive of the footprint optimization plan for our metal container business and withdrawal from the Central States Pension Plan discussed above, remaining expenses for our rationalization plans of $2.4 million are expected primarily through 2019 and remaining cash expenditures for our rationalization plans of $5.0 million are expected through 2023.