Facility Consolidation and Other Costs

2011 Program

During the fourth quarter of 2011, the Company initiated a facility consolidation and other costs program (“2011 Program”) to improve efficiencies and reduce fixed costs. As a part of this program, the Company announced the planned closure of five facilities. As of September 30, 2012, manufacturing operations had ceased at four of these manufacturing facilities. Most of the production from these five facilities is being transferred to other facilities. In the second quarter of 2012, management revised the total estimated 2011 Program costs to approximately $86 million, related to an increase in employee-related costs in the Flexible Packaging segment. The total estimated 2011 Program costs include $32 million in employee costs, $33 million in fixed asset accelerated depreciation and write-downs, and $21 million in other facility consolidation costs. These amounts exclude any potential gain to be recognized on the sale of property. Expenses in the third quarter of 2012 were $9.4 million, primarily consisting of accelerated depreciation and equipment relocation. The estimated 2011 Program costs by reportable segment follow:



(in millions)	Flexible Packaging		Pressure Sensitive		Corporate		Total Facility Consolidation and Other Costs
2011 net expense accrued	$	34.9	$	2.8	$	0.7	$	38.4
2012 year-to-date net expense accrued	26.2		—		0.1		26.3
Expense incurred through September 30, 2012	61.1		2.8		0.8		64.7
Estimated future expense	21.3		—		—		21.3
Total estimated costs	$	82.4	$	2.8	$	0.8	$	86.0

An analysis of the 2011 Program accruals follows:



(in millions)	Employee Costs			Fixed Asset Related			Other Costs			Total Facility Consolidation and Other Costs
Reserve balance at December 31, 2011	$	23.1		$	—		$	0.2		$	23.3
Net expense accrued	5.0			14.2			7.1			26.3
Utilization (cash payments or otherwise settled)	(13.3		)	(14.2		)	(7.3		)	(34.8		)
Translation adjustments and other	1.2			—			—			1.2
Reserve balance at September 30, 2012	$	16.0		$	—		$	—		$	16.0

2012 Program

During the second quarter of 2012, the Company expanded its facility consolidation and other costs program (“2012 Program”) to further improve efficiencies and reduce costs within its Flexible Packaging segment. As a part of this program, the Company announced the planned closure of an additional four production locations, including three facilities outside of the United States, and the relocation of the majority of the production to other facilities. The total estimated 2012 Program costs of approximately $55 million include $23 million in employee-related costs, $17 million in fixed asset accelerated depreciation and write-downs, and $15 million in other facility consolidation costs. The amounts exclude any potential gain to be recognized on the sale of property. Expenses in the third quarter of 2012 were $12.0 million, primarily consisting of accelerated depreciation. The estimated 2012 Program costs by the Flexible Packaging reportable segment follow:



(in millions)	Flexible Packaging
Expense incurred through September 30, 2012	$	23.1
Estimated future expense	32.3
Total estimated costs	$	55.4

An analysis of the 2012 Program accruals follows:



(in millions)	Employee Costs			Fixed Asset Related			Other Costs			Total Facility Consolidation and Other Costs
Net expense accrued	$	12.5		$	8.3		$	2.3		$	23.1
Utilization (cash payments or otherwise settled)	(2.1		)	(8.3		)	(2.3		)	(12.7		)
Translation adjustments and other	0.3			—			—			0.3
Reserve balance at September 30, 2012	$	10.7		$	—		$	—		$	10.7

Plant closings associated with each of the facility consolidation programs are expected to be completed in early 2013. Included in employee-related costs is a partial withdrawal liability provision which represents the Company’s best estimate for the cost to exit a multiemployer plan related to a facility that is scheduled to cease operations at year-end. Cash payments for these programs in the three and nine months ended September 30, 2012 totaled $11.2 million and $23.7 million respectively. Cash payments for the balance of 2012 are expected to be approximately $24 million, with the balance of $43 million to be paid in 2013. These amounts exclude any potential cash proceeds to be received on the sale of property. The costs related to facility consolidation activities have been recorded on the consolidated statement of income as facility consolidation and other costs. The accruals related to facility consolidation activities have been recorded on the consolidated balance sheet as other current liabilities.