Asset Impairment Charges and Facility Closing and Reorganization Costs (Tables)

3 Months Ended

Mar. 31, 2017

Restructuring and Related Activities [Abstract]

Costs associated with approved plans within our ongoing network optimization strategies are summarized as follows:



	Three Months Ended March 31
	2017		2016
	(In thousands)
Closure of facilities, net(1)	$	3,486	$	1,166
Organizational Effectiveness(2)	5,800		—
Facility closing and reorganization costs, net	$	9,286	$	1,166

(1)

Reflects charges, net of gains on the sales of assets, associated with closed facilities that were incurred in 2017 and 2016. These charges are primarily related to facility closures in Orem, Utah; New Orleans, Louisiana; Rochester, Indiana; Riverside, California; Delta, Colorado; Denver, Colorado; Dallas, Texas; Waco, Texas; Springfield, Virginia; Buena Park, California; Evart, Michigan; Bangor, Maine; Shreveport, Louisiana; Mendon, Massachusetts; and Sheboygan, Wisconsin, as well as other approved closures. We have incurred net charges to date of $77.3 million related to these facility closures through March 31, 2017. We expect to incur additional charges related to these facility closures of approximately $3.8 million related to contract termination, shutdown and other costs. As we continue the evaluation of our supply chain and distribution network, it is likely that we will close additional facilities in the future.

(2)

During the first quarter of 2017, we implemented an organizational structure change within our commercial organization to better align our internal and external selling capabilities with our strategic plan. This initiative resulted in a headcount reduction in our internal selling organization, and the charges in the first quarter of 2017 are primarily comprised of severance benefits and other employee-related costs associated with this initiative. While we expect to implement similar initiatives across other functions in the coming months, those individual plans have not been finalized and approved; therefore, future costs are not yet estimable.

Facility Closing and Reorganization Costs

Activity with respect to facility closing and reorganization costs during the three months ended March 31, 2017 is summarized below and includes items expensed as incurred:



	Accrued Charges at December 31, 2016		Charges and Adjustments		Payments			Accrued Charges at March 31, 2017
	(In thousands)
Cash charges:
Workforce reduction costs	$	3,610	$	5,688	$	(428	)	$	8,870
Shutdown costs	—		1,593		(1,593		)	—
Lease obligations after shutdown	3,932		69		(397		)	3,604
Other	—		47		(47		)	—
Subtotal	$	7,542	7,397		$	(2,465	)	$	12,474
Other charges:
Write-down of assets(1)			1,816
Loss on sale of related assets			67
Other, net			6
Subtotal			1,889
Total			$	9,286

(1)

The write-down of assets relates primarily to owned buildings, land and equipment of those facilities identified for closure. The assets were tested for recoverability at the time the decision to close the facilities was more likely than not to occur. Over time, refinements to our estimates used in testing for recoverability may result in additional asset write-downs. The write-down of assets can include accelerated depreciation recorded for those facilities identified for closure. Our methodology for testing the recoverability of the assets is consistent with the methodology described in the “Asset Impairment Charges” section above.