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Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | 12 Months Ended
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Dec. 31, 2016
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities |
Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities | 8. Restructuring Accruals, Asset Impairments and Other Costs Related to Closed Facilities The Company continually reviews its manufacturing footprint and operating cost structure and may decide to close operations or reduce headcount to gain efficiencies, integrate acquired operations, reduce future expenses and other market factors. The Company incurs costs associated with these actions including employee severance and benefits, other exit costs such as those related to contract terminations, and asset impairment charges. The Company also may incur other costs related to closed facilities including environmental remediation, clean up, dismantling and preparation for sale or other disposition. The Company accounts for restructuring and other costs under applicable provisions of generally accepted accounting principles. Charges for employee severance and related benefits are generally accrued based on contractual arrangements with employees or their representatives. Other exit costs are accrued based on the estimated cost to settle related contractual arrangements. Estimated environmental remediation costs are accrued when specific claims have been received or are probable of being received. The Company’s decisions to curtail selected production capacity have resulted in write downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell. The Company classified the significant assumptions used to determine the fair value of the impaired assets as Level 3 in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. When a decision is made to take these actions, the Company manages and accounts for them programmatically apart from the on-going operations of the business. Information related to major programs (as in the case of the European Asset Optimization and Asia Pacific Restructuring programs below) are presented separately. Minor initiatives are presented on a combined basis as Other Restructuring Actions. These restructuring initiatives taken by the Company are not related to the European Asset Optimization program or the Asia Pacific restructuring plan. When charges related to major programs are completed, remaining accrual balances are classified with Other Restructuring Actions. European Asset Optimization In 2011, the Company initiated the European Asset Optimization program to increase the efficiency and capability of its European operations and to better align its European manufacturing footprint with market and customer needs. This program involved making additional investments in certain facilities and addressing assets with higher cost structures. As part of this program, the Company recorded charges of $0, $0, and $1 million for the years ended 2016, 2015 and 2014, respectively for employee costs, write-down of assets, and environmental remediation related to decisions to close furnaces and manufacturing facilities in Europe. The Company recorded total cumulative charges of $127 million and does not expect to execute any further actions under this program. Asia Pacific Restructuring Since 2011, the Company has implemented a restructuring plan in its Asia Pacific segment, primarily related to aligning its supply base with lower demand in the region. As part of this plan, the Company recorded charges of $4 million, $5 million and $73 million for the years ended 2016, 2015 and 2014, respectively, for employee costs, write-down of assets, and pension charges related to furnace closures and additional restructuring activities. The Company recorded total cumulative charges of $224 million and does not expect to execute any further actions under this program. Other Restructuring Actions In 2016, the Company recorded charges of $94 million for other restructuring actions. These charges primarily represented employee costs, write-down of assets, and other exit costs of $64 million for plant closures in Latin America, Europe, and North America and $30 million related to other restructuring actions. The Company took certain other restructuring actions and recorded charges in 2015 of $58 million. These charges primarily related to employee costs, write-down of assets and other exit costs totaling $14 million for a plant closure and furnace closure in Latin America, $38 million for a plant closure in North America and $6 million for other restructuring actions. In 2014, the Company took certain other restructuring actions and recorded charges of $2 million for employee costs related to global headcount reduction initiatives. The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2015 through December 31, 2015:
|  | European |  |  |  |  | Other |  |  |  |
|  | Asset |  | Asia Pacific |  | Restructuring |  | Total |
|  | Optimization |  | Restructuring |  | Actions |  | Restructuring |
Balance at January 1, 2015 |  | $ | 12 |  | $ | 12 |  | $ | 36 |  | $ | 60 |
Charges |  |  |  |  |  | 5 |  |  | 58 |  |  | 63 |
Write-down of assets to net realizable value |  |  |  |  |  | (4) |  |  | (27) |  |  | (31) |
Net cash paid, principally severance and related benefits |  |  | (5) |  |  | (5) |  |  | (28) |  |  | (38) |
Other, including foreign exchange translation |  |  | (4) |  |  | (1) |  |  | (6) |  |  | (11) |
Balance at December 31, 2015 |  | $ | 3 |  | $ | 7 |  | $ | 33 |  | $ | 43 |
The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2016 through December 31, 2016:
|  |  |  | Other |  |  |  |
|  | Asia Pacific |  | Restructuring |  | Total |
|  | Restructuring |  | Actions |  | Restructuring |
Balance at January 1, 2016 |  | $ | 7 |  | $ | 36 |  | $ | 43 |
Charges |  |  | 4 |  |  | 94 |  |  | 98 |
Write-down of assets to net realizable value |  |  |  |  |  | (28) |  |  | (28) |
Net cash paid, principally severance and related benefits |  |  | (3) |  |  | (21) |  |  | (24) |
Other, including foreign exchange translation |  |  | (1) |  |  | (3) |  |  | (4) |
Balance at December 31, 2016 |  | $ | 7 |  | $ | 78 |  | $ | 85 |
The restructuring accrual balance represents the Company’s estimates of the remaining future cash amounts to be paid related to the actions noted above. As of December 31, 2016, the Company’s estimates include approximately $67 million for employee benefits costs, $16 million for environmental remediation costs, and $2 million for other exit costs.

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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 2 -Subparagraph (SAB Topic 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: 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 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 + Details
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