RESTRUCTURING CHARGES

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

NOTE 4. 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 VDC production facility, both in Freeport, TX. The VDC facility was closed during the fourth quarter of 2020. The related chlor alkali plant closure is expected to be completed in the second quarter of 2021. For the year ended December 31, 2020, we recorded pretax restructuring charges of $3.8 million for facility exit costs and employee severance and related benefit costs related to these actions. For the year ended December 31, 2019, we recorded pretax restructuring charges of $58.9 million for non-cash impairment of equipment and facilities related to these actions. We expect to incur additional restructuring charges through 2025 of approximately $45 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, products for customers in the region are sourced from Winchester manufacturing facilities located in the United States. For the years ended December 31, 2019 and 2018, we recorded pretax restructuring charges of $0.4 million and $4.1 million, respectively for the write-off of equipment and facility costs, employee severance and related benefit costs, lease and other contract termination costs and facility exit costs related to this action. For the year ended December 31, 2019, we also 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 years ended December 31, 2020, 2019 and 2018, we recorded pretax restructuring charges of $5.2 million, $15.8 million and $15.7 million, respectively, for the lease and other contract termination costs, employee severance and related benefit costs and facility exit costs related to these actions. We expect to incur additional restructuring charges through 2021 of approximately $2 million related to these capacity reductions.

For the year ended December 31, 2018, we recorded pretax restructuring charges of $2.1 million for lease and other contract termination costs and facility exit costs related to our permanent reduction in capacity at our Becancour, Canada chlor alkali facility in 2014.

The following table summarizes the 2020, 2019 and 2018 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of December 31, 2020, 2019 and 2018:


	Employee severance and related benefit costs		Lease and other contract termination costs		Facility exit costs		Write-off of equipment and facility		Total
	($ in millions)
Balance at January 1, 2018	$	1.8	$	3.3	$	—	$	—	$	5.1
Restructuring charges	1.7		5.6		12.0		2.6		21.9
Amounts utilized	(2.0)		(2.9)		(11.3)		(2.6)		(18.8)
Balance at December 31, 2018	1.5		6.0		0.7		—		8.2
Restructuring charges	2.1		0.9		14.6		58.9		76.5
Amounts utilized	(3.6)		(3.8)		(15.3)		(58.9)		(81.6)
Balance at December 31, 2019	—		3.1		—		—		3.1
Restructuring charges	2.2		1.4		5.4		—		9.0
Amounts utilized	(0.4)		(2.8)		(5.4)		—		(8.6)
Balance at December 31, 2020	$	1.8	$	1.7	$	—	$	—	$	3.5

The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through December 31, 2020:


	Chlor Alkali Products and Vinyls								Total
	Becancour		Capacity Reductions		Freeport		Winchester
	($ in millions)
Write-off of equipment and facility	$	3.5	$	78.1	$	58.9	$	2.6	$	143.1
Employee severance and related benefit costs	2.7		6.7		2.1		2.7		14.2
Facility exit costs	5.9		52.0		1.7		0.2		59.8
Employee relocation costs	—		1.7		—		—		1.7
Lease and other contract termination costs	6.1		42.2		—		0.4		48.7
Total cumulative restructuring charges	$	18.2	$	180.7	$	62.7	$	5.9	$	267.5

As of December 31, 2020, we have incurred cash expenditures of $120.5 million and non-cash charges of $143.5 million related to these restructuring actions. The remaining balance of $3.5 million is expected to be paid out through 2022.

Subsequent Event

On January 18, 2021, we announced we had made the decision to permanently close our trichloroethylene and anhydrous hydrogen chloride liquefaction facilities in Freeport, TX, before the end of 2021. We expect to incur restructuring charges through 2023 of approximately $23 million related to these actions, approximately $2 million of which is expected to be incurred in 2021. These restructuring costs are expected to consist of $21 million of facility exit costs and $2 million of contract termination costs.