RESTRUCTURING CHARGES

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

NOTE 3. RESTRUCTURING CHARGES

Olin committed to a productivity initiative to align the organization with our new operating model and improve efficiencies (collectively, Productivity Plan). These actions and related activities were completed during the second quarter of 2021. For the three and nine months ended September 30, 2021, we recorded pretax restructuring charges of $0.2 million and $10.3 million for employee severance and related benefit costs related to these actions. We do not expect to incur additional restructuring charges related to these actions.

On March 15, 2021, we announced that we had made the decision to permanently close approximately 50% of our diaphragm-grade chlor alkali capacity, representing 200,000 tons, at our McIntosh, AL facility. The closure was completed in the first quarter of 2021. On October 21, 2021, we announced that we had made a decision to permanently cease operations of the remaining 50% of our diaphragm-grade chlor alkali capacity, representing an additional 200,000 tons, at our McIntosh, AL facility (collectively, McIntosh Plan). The closure was completed during third quarter of 2022. For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $5.5 million and $0.4 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action. For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $7.1 million and $5.2 million, respectively, for write-off of equipment and facility costs, lease and other contract termination costs and for facility exit costs related to this action. We expect to incur additional restructuring charges through 2026 of approximately $30 million related to these actions.

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 (collectively, Freeport 2021 Plan), which were completed in the fourth quarter of 2021. For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $0.4 million and $1.6 million, respectively, for facility exit costs related to these actions. For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $1.9 million and $5.7 million, respectively, for facility exit costs related to these actions. We expect to incur additional restructuring charges through 2024 of approximately $20 million related to these actions.

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 (collectively, Freeport 2019 Plan). The VDC facility and related chlor alkali plant were closed during the fourth quarter of 2020 and second quarter of 2021, respectively. For the three months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $1.7 million and $1.0 million, respectively, for facility exit costs related to these actions. For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $4.9 million and $2.2 million, respectively, for facility exit costs related to these actions. We expect to incur additional restructuring charges through 2025 of approximately $30 million related to these actions.

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 (collectively, Chlor Alkali 2016 Plan). 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, 2021, we recorded pretax restructuring charges of $0.4 million for facility exit costs and lease and other contract termination costs related to these actions. For the nine months ended September 30, 2022 and 2021, we recorded pretax restructuring charges of $0.4 million and $1.1 million, respectively, for facility exit costs and lease and other contract termination costs related to these actions. We do not expect to incur additional restructuring charges related to these capacity reductions.

The following table summarizes the 2022 and 2021 activities by major component of these restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2022 and 2021:


	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, 2021	$	1.8	$	1.7	$	—	$	—	$	3.5
Restructuring charges:
First quarter	—		4.6		2.3		—		6.9
Second quarter	10.1		0.5		3.4		—		14.0
Third quarter	0.2		0.5		2.9		—		3.6
Amounts utilized	(3.5)		(1.3)		(8.6)		—		(13.4)
Balance at September 30, 2021	$	8.6	$	6.0	$	—	$	—	$	14.6
Balance at January 1, 2022	$	6.9	$	5.4	$	—	$	—	$	12.3
Restructuring charges:
First quarter	—		0.1		2.6		0.4		3.1
Second quarter	—		0.2		3.1		0.3		3.6
Third quarter	—		—		4.9		2.7		7.6
Amounts utilized	(4.3)		(1.3)		(10.6)		(3.4)		(19.6)
Balance at September 30, 2022	$	2.6	$	4.4	$	—	$	—	$	7.0

The following table summarizes the cumulative restructuring charges of these restructuring actions by major component through September 30, 2022:


	Chlor Alkali Products and Vinyls								Corporate/other		Total
	McIntosh Plan		Freeport 2021 Plan		Freeport 2019 Plan		Chlor Alkali 2016 Plan		Productivity Plan
	($ in millions)
Write-off of equipment and facility	$	2.7	$	—	$	58.9	$	78.1	$	—	$	139.7
Employee severance and related benefit costs	—		—		2.1		6.7		10.3		19.1
Facility exit costs	3.6		8.4		10.5		53.2		—		75.7
Employee relocation costs	—		—		—		1.7		—		1.7
Lease and other contract termination costs	6.4		—		—		43.0		—		49.4
Total cumulative restructuring charges	$	12.7	$	8.4	$	71.5	$	182.7	$	10.3	$	285.6

As of September 30, 2022, we have incurred cash expenditures of $137.1 million and non-cash charges of $141.5 million related to these restructuring actions. The remaining balance of $7.0 million is expected to be paid out through 2028.