EXIT ACTIVITIES

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

EXIT ACTIVITIES

EXIT ACTIVITIES

2024

During the second quarter of 2024, the Company decided to close multiple packaging facilities by the end of 2024. Production from these facilities will be consolidated into our existing packaging network. Current Assets within the Condensed Consolidated Balance Sheet also includes $11 million relating to multiple packaging facilities, which met the held for sale criteria as of June 30, 2024. The costs associated with these exit activities are included in the table below for the three and six months ended June 30, 2024.

2023

During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities have been consolidated into our existing packaging network. The costs associated with these exit activities are included in the table below for the three and six months ended June 30, 2024 and 2023.

On February 7, 2023, the Company announced its plan to invest approximately $1 billion in a new recycled paperboard manufacturing facility in Waco, Texas. In conjunction with this project, the Company announced the closure of three smaller recycled paperboard manufacturing facilities to manage capacity while lowering costs. The costs associated with these exit activities are included in the table below for the three and six months ended June 30, 2024 and 2023.

In the second quarter of 2023, the Company announced its decision to accelerate the closure of one of these three recycled paperboard manufacturing facilities that is in Tama, Iowa and closed the facility in the second quarter of 2023. The costs associated with this closure are included in the table below for the three and six months ended June 30, 2023.

During the six months ended June 30, 2024 and 2023, the Company recorded $37 million and $49 million of exit costs, respectively, associated with these restructurings. Other costs associated with the start-up of the new recycled paperboard machine are recorded in the period in which they are incurred.

The following table summarizes the costs incurred during the three and six months ended June 30, 2024 and 2023 related to these restructurings:

		Three Months Ended June 30,				Six Months Ended June 30,
In millions	Location in Statement of Operations	2024		2023		2024		2023
Severance Costs and Other(a)	Business Combinations, Exit Activities and Other Special Items, Net	$	5	$	4	$	7	$	12
Asset Write-Offs and Start-Up Costs(b)	Business Combinations, Exit Activities and Other Special Items, Net	8		2		15		5
Accelerated Depreciation	Cost of Sales	3		30		15		32
Total		$	16	$	36	$	37	$	49

(a) Costs incurred include activities for post-employment benefits, retention bonuses, incentives and professional services (see “Note 1 - Business Combinations, Exit Activities and Other Special Items, Net”).

(b) Costs incurred include non-cash write-offs for items such as machinery, supplies and inventory.

The following table summarizes the balance of accrued expenses related to restructuring:

In millions	Total
Balance at December 31, 2023	$	21
Costs Incurred	7
Payments	(2)
Balance at June 30, 2024	$	26

Due to the expected closures of the additional two recycled paperboard manufacturing facilities, the Company incurred charges within the Paperboard Manufacturing reportable segment for post-employment benefits, retention bonuses and incentives of $17 million, and accelerated depreciation and inventory and asset write-offs of $8 million from announcement date through June 30, 2024. The Company expects to incur total charges associated with these exit activities for post-employment benefits, retention bonuses and incentives in the range of $20 million to $25 million and for accelerated depreciation and inventory and asset write-offs in the range of $15 million to $20 million through 2026.

Due to the expected closures of the packaging facilities and other exit activities, the Company incurred charges within the Americas Paperboard Packaging and Europe Paperboard Packaging reportable segments for post-employment benefits, retention bonuses and incentives of $11 million from announcement date through June 30, 2024. The Company also incurred charges within the Americas Paperboard Packaging reportable segment for accelerated depreciation and inventory and asset write-offs of $22 million from announcement date through June 30, 2024. The Company expects to incur total charges associated with these exit activities for post-employment benefits, retention bonuses and incentives in the range of $10 million to $15 million and for accelerated depreciation and inventory and asset write-offs in the range of $20 million to $25 million through 2024.

Additionally, the Company has incurred start-up charges within the Paperboard Manufacturing reportable segment for the new recycled paperboard manufacturing facility in Waco of $7 million from announcement date through June 30, 2024. The Company expects to incur total start-up charges of approximately $25 million to $30 million for the new recycled paperboard manufacturing facility through 2026.