RESTRUCTURING CHARGES

On March 21, 2016, we announced that we had made the decision to close a combined total of 433,000 tons of chlor alkali capacity across three separate locations. Associated with this action, we have permanently closed our Henderson, NV chlor alkali plant with 153,000 tons of capacity and have reconfigured the site to manufacture bleach and distribute caustic soda and hydrochloric acid. Also, the capacity of our Niagara Falls, NY chlor alkali plant has been reduced from 300,000 tons to 240,000 tons and the chlor alkali capacity at our Freeport, TX facility was reduced by 220,000 tons. This 220,000 ton reduction was entirely from diaphragm cell capacity. For the year ended December 31, 2016, we recorded pretax restructuring charges of $111.3 million for the write-off of equipment and facility costs, lease and other contract termination costs, employee severance and related benefit costs, employee relocation costs and facility exit costs related to these actions. We expect to incur additional restructuring charges through 2020 of approximately $33 million related to these capacity reductions. This estimate of additional restructuring charges does not include any additional charges related to a contract termination that is currently in dispute. The other party to the contract has filed a demand for arbitration alleging, among other things, that Olin breached the related agreement and claimed damages in excess of the amount Olin believes it is obligated for under the contract. Any additional losses related to this contract dispute are not currently estimable because of unresolved questions of fact and law but, if resolved unfavorably to Olin, they could have a material effect on our financial results.

On December 12, 2014, we announced that we had made the decision to permanently close the portion of the Becancour, Canada chlor alkali facility that has been shut down since late June 2014. This action reduced the facility’s chlor alkali capacity by 185,000 tons. Subsequent to the shut down, the plant predominantly focuses on bleach and hydrochloric acid, which are value-added products, as well as caustic soda. In the fourth quarter of 2014, we recorded pretax restructuring charges of $10.0 million for the write-off of equipment and facility costs, employee severance and related benefit costs and lease and other contract termination costs related to these actions. For the years ended December 31, 2016 and 2015, we recorded pretax restructuring charges of $0.8 million and $2.0 million, respectively, for the write-off of equipment and facility costs, lease and other contract termination costs and facility exit costs. We expect to incur additional restructuring charges through 2018 of approximately $7 million related to the shut down of this portion of the facility.

On December 9, 2010, our board of directors approved a plan to eliminate our use of mercury in the manufacture of chlor alkali products. Under the plan, the 260,000 tons of mercury cell capacity at our Charleston, TN facility was converted to 200,000 tons of membrane capacity capable of producing both potassium hydroxide and caustic soda. The board of directors also approved plans to reconfigure our Augusta, GA facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site. The completion of these projects eliminated our chlor alkali production using mercury cell technology. For the year ended December 31, 2014, we recorded pretax restructuring charges of $3.8 million for employee severance and related benefit costs, employee relocation costs, facility exit costs, write-off of equipment and facility costs and lease and other contract termination costs related to these actions.

On November 3, 2010, we announced that we made the decision to relocate the Winchester centerfire pistol and rifle ammunition manufacturing operations from East Alton, IL to Oxford, MS. Consistent with this decision in 2010, we initiated an estimated $110 million five-year project, which includes approximately $80 million of capital spending. The capital spending was partially financed by $31 million of grants provided by the State of Mississippi and local governments. During 2016, the final rifle ammunition production equipment relocation was completed. For the years ended December 31, 2016, 2015 and 2014, we recorded pretax restructuring charges of $0.8 million, $0.7 million and $1.9 million, respectively, for employee severance and related benefit costs, employee relocation costs and facility exit costs related to these actions.

The following table summarizes the 2016, 2015 and 2014 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of December 31, 2016:



	Employee severance and job related benefits			Lease and other contract termination costs			Employee relocation costs			Facility exit costs			Write-off of equipment and facility			Total
	($ in millions)
Balance January 1, 2014	$	10.2		$	—		$	—		$	—		$	—		$	10.2
2014 restructuring charges	4.5			4.5			0.5			2.9			3.3			15.7
Amounts utilized	(3.5		)	—			(0.5		)	(2.9		)	(3.3		)	(10.2		)
Balance at December 31, 2014	11.2			4.5			—			—			—			15.7
2015 restructuring charges	—			0.7			0.6			0.9			0.5			2.7
Amounts utilized	(6.0		)	(2.9		)	(0.6		)	(0.9		)	(0.5		)	(10.9		)
Currency translation adjustments	(0.6		)	(0.2		)	—			—			—			(0.8		)
Balance at December 31, 2015	4.6			2.1			—			—			—			6.7
2016 restructuring charges	5.1			13.6			2.1			15.5			76.6			112.9
Amounts utilized	(6.3		)	(8.2		)	(2.1		)	(13.7		)	(76.6		)	(106.9		)
Balance at December 31, 2016	$	3.4		$	7.5		$	—		$	1.8		$	—		$	12.7

The following table summarizes the cumulative restructuring charges of these 2016, 2014 and 2010 restructuring actions by major component through December 31, 2016:



	Chlor Alkali Products and Vinyls						Winchester		Total
	Becancour		Capacity Reductions		Mercury		Winchester		Total
	($ in millions)
Write-off of equipment and facility	$	3.5	$	76.6	$	17.8	$	—	$	97.9
Employee severance and job related benefits	2.7		5.1		5.6		13.1		26.5
Facility exit costs	1.3		14.7		15.6		2.3		33.9
Pension and other postretirement benefits curtailment	—		—		—		4.1		4.1
Employee relocation costs	—		1.4		0.9		6.0		8.3
Lease and other contract termination costs	5.3		13.5		0.7		—		19.5
Total cumulative restructuring charges	$	12.8	$	111.3	$	40.6	$	25.5	$	190.2

As of December 31, 2016, we have incurred cash expenditures of $67.6 million and non-cash charges of $109.1 million related to these restructuring actions. The remaining balance of $12.7 million is expected to be paid out through 2020.