RESTRUCTURING CHARGES

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

NOTE 2. RESTRUCTURING CHARGES

On December 11, 2019, we announced that we had made the decision to permanently close a chlor alkali plant with a capacity of 230,000 tons and our vinylidene chloride (VDC) production facility, both in Freeport, TX.  The VDC facility was closed during fourth quarter 2020. The related chlor alkali plant closure is expected to be completed in second quarter 2021.  For the three and nine months ended September 30, 2020, we recorded pretax restructuring charges of $0.3 million and $0.8 million, respectively, for facility exit costs related to these actions. We expect to incur additional restructuring charges through 2024 of approximately $50 million related to these actions.

On December 10, 2018, we announced that we had made the decision to permanently close the ammunition assembly operations at our Winchester facility in Geelong, Australia. Subsequent to the facility’s closure, product for customers in the region will be sourced from Winchester manufacturing facilities located in the United States. For the three and nine months ended September 30, 2019, we recorded pretax restructuring charges of $0.1 million and $0.4 million, respectively, for facility exit costs and lease and other contract termination costs related to this action. For the nine months ended September 30, 2019, we recorded additional pretax restructuring charges of $1.4 million for employee severance and related benefit costs related to our Winchester operations.

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 three months ended September 30, 2020 and 2019, we recorded pretax restructuring charges of $1.0 million and $4.8 million, respectively, for facility exit costs, employee severance and related benefit costs and lease and other contract termination costs related to these actions. For the nine months ended September 30, 2020 and 2019, we recorded pretax restructuring charges of $3.9 million and $10.9 million, respectively, for facility exit costs, employee severance and related benefit costs and lease and other contract termination costs related to these actions. We expect to incur additional restructuring charges through 2021 of approximately $4 million related to these capacity reductions.

The following table summarizes the 2020 and 2019 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2020 and 2019:

	Employee severance and related benefit costs			Lease and other contract termination costs			Facility exit costs			Total
	($ in millions)
Balance at January 1, 2019	$	1.5		$	6.0		$	0.7		$	8.2
Restructuring charges:
First quarter	1.4			0.1			2.5			4.0
Second quarter	0.4			0.2			3.2			3.8
Third quarter	0.3			0.1			4.5			4.9
Amounts utilized	(3.4		)	(1.5		)	(10.8		)	(15.7		)
Balance at September 30, 2019	$	0.2		$	4.9		$	0.1		$	5.2
Balance at January 1, 2020	$	—		$	3.1		$	—		$	3.1
Restructuring charges:
First quarter	0.1			0.1			1.5			1.7
Second quarter	—			—			1.7			1.7
Third quarter	—			0.3			1.0			1.3
Amounts utilized	(0.1		)	(1.0		)	(4.2		)	(5.3		)
Balance at September 30, 2020	$	—		$	2.5		$	—		$	2.5

The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through September 30, 2020:

	Chlor Alkali Products and Vinyls				Winchester		Total
	Freeport		Capacity Reductions
	($ in millions)
Write-off of equipment and facility	$	58.9	$	78.1	$	2.6	$	139.6
Employee severance and related benefit costs	—		6.7		2.7		9.4
Facility exit costs	0.8		51.6		0.2		52.6
Employee relocation costs	—		1.7		—		1.7
Lease and other contract termination costs	—		41.3		0.4		41.7
Total cumulative restructuring charges	$	59.7	$	179.4	$	5.9	$	245.0

As of September 30, 2020, we have incurred cash expenditures of $102.9 million and non-cash charges of $139.6 million related to these restructuring actions. The remaining balance of $2.5 million is expected to be paid out through 2021.