NOTE 3. RATIONALIZATION CHARGES

2012 RATIONALIZATION PLANS

In the third quarter of 2012, we announced a plan to exit our Kingsburg, California metal container manufacturing facility. Our plan included the termination of approximately 50 employees and other related plant exit costs. The total estimated costs for the rationalization of this facility of $2.7 million consist of $1.7 million for employee severance and benefits, $0.3 million for plant exit costs and $0.7 million for the non-cash write-down in carrying value of assets. We recognized a total of $2.5 million of costs in 2012, which consisted of $1.7 million of employee severance and benefits, $0.1 million of plant exit costs and $0.7 million for the non-cash write-down in carrying value of assets. We made cash payments of $0.6 million in 2012. Remaining expenses and cash expenditures of $0.2 million and $1.4 million, respectively, are expected in 2013. The plant has ceased operations.

In the first quarter of 2012, we announced a plan to exit our Breinigsville (Allentown), Pennsylvania plastic container manufacturing facility. Our plan included the termination of approximately 32 employees and other related plant exit costs. The total estimated costs for the rationalization of this facility of $2.7 million consist of $0.2 million for employee severance and benefits, $1.6 million for plant exit costs and $0.9 million for the non-cash write-down in carrying value of assets. We recognized a total of $2.5 million of costs in 2012, which consisted of $0.2 million of employee severance and benefits, $1.4 million of plant exit costs and $0.9 million for the non-cash write-down in carrying value of assets. We made cash payments of $1.3 million in 2012. Remaining expenses and cash expenditures of $0.2 million and $0.5 million, respectively, are expected in 2013. The plant has ceased operations.

In the first quarter of 2012, we announced plans to reduce costs in the European manufacturing facilities and U.S. administrative office of our closures business through the termination of approximately 49 employees, with total estimated costs of $2.2 million for employee severance and benefits. We recognized a total of $2.2 million of costs and made cash payments of $1.0 million in 2012. Remaining cash expenditures of $1.2 million are expected in 2013 and thereafter.

Activity in reserves for our 2012 rationalization plans is summarized as follows:


	Employee Severance and Benefits			Plant Exit Costs			Non-Cash Asset Write-Down			Total
	(Dollars in thousands)
Established in 2012	$	4,070		$	1,494		$	1,640		$	7,204
Utilized in 2012		(1,686	)		(1,237	)		(1,640	)		(4,563	)

Balance at December 31, 2012	$	2,384		$	257		$	—		$	2,641

2011 RATIONALIZATION PLANS

In the fourth quarter of 2011, we announced plans to consolidate various administrative positions in the U.S. and Canadian corporate offices of our plastic container business and in our corporate office through the termination of approximately 54 employees, with total estimated costs of $2.3 million for employee severance and benefits. We recognized $0.4 million and $1.9 million of costs in 2012 and 2011, respectively, and made cash payments of $1.9 million and $0.2 million in 2012 and 2011, respectively. Remaining cash expenditures of $0.2 million are expected in 2013.

2010 RATIONALIZATION PLANS

In February 2010, we announced a plan to exit our Port Clinton, Ohio plastic container manufacturing facility. Our plan included the termination of approximately 150 employees and other related plant exit costs. The total estimated costs for the rationalization of this facility of $5.1 million consist of $1.5 million for employee severance and benefits, $1.8 million for plant exit costs and $1.8 million for the non-cash write-down in carrying value of assets. We recognized a total of $1.7 million of costs in 2011, which consisted of $0.1 million of employee severance and benefits, $1.3 million of plant exit costs and $0.3 million for the non-cash write-down in carrying value of assets. We recognized a total of $3.4 million of costs in 2010, which consisted of $1.4 million of employee severance and benefits, $0.5 million of plant exit costs and $1.5 million for the non-cash write-down in carrying value of assets. Cash payments of $1.7 million and $1.6 million were paid in 2011 and 2010, respectively. The plant has ceased operations, and all cash for this plan has been expended.

In November 2010, we announced to employees plans to reduce costs in our closures manufacturing facility in Germany. Our plan included the termination of approximately 75 employees, with total estimated costs of $11.5 million for employee severance and benefits consisting of $11.9 million of cash costs net of a $0.4 million non-cash retirement benefit curtailment gain. We recognized $0.6 million, $1.8 million and $9.1 million of these costs in 2012, 2011 and 2010, respectively, and made cash payments of $2.3 million, $9.3 million and $0.3 million in 2012, 2011 and 2010, respectively. Remaining cash expenditures of $0.5 million are expected in 2013.

In November 2010, we announced to employees plans to consolidate various administrative positions in the U.S. and Canadian corporate offices of our plastic container business through the termination of approximately 30 employees, with total estimated costs of $2.0 million for employee severance and benefits. We recognized $0.2 million and $1.8 million of these costs in 2011 and 2010, respectively, and made cash payments of $1.7 million and $0.3 million in 2011 and 2010, respectively.

In November 2010, we announced to employees a plan to exit one of our Woodstock, Illinois plastic container manufacturing facilities. Our plan included the termination of approximately 50 employees, the consolidation of certain operations into existing facilities and the elimination of the remaining operations and the exit of the facility. The total estimated costs for the rationalization of this facility of $12.1 million consist of $7.1 million for the non-cash write-down in carrying value of assets, $4.2 million for plant exit costs and $0.8 million for employee severance and benefits. We recognized a total of $0.5 million of costs in 2012, which consisted of $0.4 million of plant exit costs and $0.1 million for the non-cash write-down in carrying value of assets. We recognized a total of $0.7 million of costs in 2011, which consisted of $0.4 million of employee severance and benefits and $0.3 million for the non-cash write down in carrying value of assets. We recognized a total of $7.1 million of costs in 2010, which consisted of $6.8 million for the non-cash write-down in carrying value of assets and $0.3 million of employee severance and benefits. Cash (receipts) payments of $(0.5) million, $0.3 million and $0.1 million were (received) paid in 2012, 2011 and 2010, respectively. Remaining expenses and cash expenditures of $3.8 million and $5.1 million, respectively, are expected primarily in 2013 and thereafter. The plant has ceased operations.

Activity in reserves for our 2010 rationalization plans is summarized as follows:


	Employee Severance and Benefits			Non-Cash Retirement Benefit Curtailment			Plant Exit Costs			Non-Cash Asset Write-Down			Total
	(Dollars in thousands)
Established in 2010	$	12,641		$	—		$	542		$	8,256		$	21,439
Utilized in 2010		(1,812	)		—			(542	)		(8,256	)		(10,610	)

Balance at December 31, 2010		10,829			—			—			—			10,829
Established in 2011		2,973			(449	)		1,267			613			4,404
Utilized in 2011		(11,622	)		449			(1,267	)		(613	)		(13,053	)
Currency translation		447			—			—			—			447

Balance at December 31, 2011		2,627			—			—			—			2,627
Established in 2012		597			—			430			40			1,067
Utilized in 2012		(2,713	)		—			908			(40	)		(1,845	)

Balance at December 31, 2012	$	511		$	—		$	1,338		$	—		$	1,849

The non-cash asset write-downs totaling $8.9 million related to our 2010 rationalization plans were the result of comparing the carrying value of certain production related equipment to their fair value using estimated future discounted cash flows, a Level 3 fair value measurement (as defined in Note 9).

SUMMARY

Rationalization charges for the years ended December 31 are summarized as follows:


	2012		2011		2010
	(Dollars in thousands)
2012 rationalization plans	$	7,204	$	—	$	—
2011 rationalization plans		389		1,925		—
2010 rationalization plans		1,067		4,404		21,439
2009 and prior years’ rationalization plans		—		1,388		775

	$	8,660	$	7,717	$	22,214

Rationalization reserves as of December 31, 2012 and 2011 were included in our Consolidated Balance Sheets as accrued liabilities of $4.7 million and $4.6 million, respectively.