Plant shutdowns, asset impairments, restructurings and other charges are shown in the net sales and operating profit by segment table in Note 9, and unless otherwise noted below, are also included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income.

Plant shutdowns, asset impairments, restructurings and other charges in the first quarter of 2016 include:

•

Pretax charges of $1.1 million associated with the consolidation of domestic PE Films’ manufacturing facilities, which includes severance and other employee-related costs of $0.3 million, asset impairments of $0.2 million, accelerated depreciation of $0.1 million (included in “Cost of goods sold” in the consolidated statements of income) and other facility consolidation-related expenses of $0.5 million ($0.4 million is included in “Cost of goods sold” in the consolidated statements of income);


•	Pretax charges of $0.4 million associated with a non-recurring business development project (included in “Selling, general and administrative expense” in the consolidated statement of income and “Corporate expenses, net” in the statement of net sales and operating profit by segment);


•	Pretax charges of $8,000 for severance and other employee-related costs associated with restructurings in PE Films; and


•	Pretax charges of $7,000 associated with the shutdown of the aluminum extrusions manufacturing facility in Kentland, Indiana.

Plant shutdowns, asset impairments, restructurings and other charges in the first quarter of 2015 include:


•	Pretax adjustment of $0.1 million to reverse previously accrued severance and other employee-related costs associated with restructurings in PE Films.


•	Pretax charges of $15,000 associated with the shutdown of the aluminum extrusions manufacturing facility in Kentland, Indiana.

Results in the first quarter 2016 include an unrealized gain on the Company’s investment in kaleo, Inc (“kaléo”), which is accounted for under the fair value method (included in “Other income (expense), net” in the consolidated statements of income), of $0.8 million ($0.6 million after taxes) (none in 2015). See Note 6 for additional information on investments.

A reconciliation of the beginning and ending balances of accrued expenses associated with “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income for the three months ended March 31, 2016 is as follows:



(In Thousands)	Severance			Asset Impairments			Other (a)			Total
Balance at January 1, 2016	$	1,462		$	—		$	405		$	1,867
Changes in 2016:
Charges	294			256			592			1,142
Cash spent	(482		)	—			(619		)	(1,101		)
Charges against assets	—			(256		)	—			(256		)
Balance at March 31, 2016	$	1,274		$	—		$	378		$	1,652
(a) Other includes other facility consolidation-related costs associated with the consolidation of North American PE Films manufacturing facilities and other shutdown-related costs associated with the shutdown of the Company’s aluminum extrusions manufacturing facility in Kentland, Indiana.

On July 7, 2015, the Company announced its intention to consolidate its domestic production for PE Films by restructuring the operations in its manufacturing facility in Lake Zurich, Illinois. Efforts to transition domestic production from the Lake Zurich manufacturing facility will require various machinery upgrades and equipment transfers to its other manufacturing facilities. Given PE Films’ focus on maintaining product quality and customer satisfaction, the Company anticipates that these activities will be completed in the middle of 2017. Total pre-tax cash expenditures associated with restructuring the Lake Zurich manufacturing facility are expected to be approximately $16-17 million over this period, and once complete, annual pre-tax cash cost savings are expected to be approximately $5-6 million.

The Company expects to recognize costs associated with the exit and disposal activities of approximately $5-6 million over the project period. Exit and disposal costs include severance charges and other employee-related expenses arising from the termination of employees of approximately $2-3 million and equipment transfers and other facility consolidation-related costs of approximately $2 million. During the same period of time, operating expenses will include the acceleration of approximately $3 million of non-cash depreciation expense for certain machinery and equipment at the Lake Zurich manufacturing facility. Total expenses associated with the North American facility consolidation project were $1.1 million in the first quarter of 2016 ($0.7 million included in “Asset impairments and costs associated with exit and disposal activities” and $0.4 million included in “Cost of goods sold” in the consolidated statement of income). Total expenses since the inception of the project were $3.3 million.

Total estimated cash expenditures of $16-17 million over the project period include the following:


•	Cash outlays associated with previously discussed exit and disposal expenses of approximately $5 million;


•	Capital expenditures associated with equipment upgrades at other PE Films manufacturing facilities in the U.S. of approximately $11 million;


•	Cash incentives of approximately $1 million in connection with meeting safety and quality standards while production ramps down at the Lake Zurich manufacturing facility; and


•	Additional operating expenses of approximately $1 million associated with customer product qualifications on upgraded and transferred production lines.

Cash expenditures for the North American facility consolidation project were $2.2 million in the first quarter of 2016, which includes $1.7 million for capital expenditures. Total cash expenditures since the inception of the project were $5.3 million, which includes $4.2 million for capital expenditures.