Facility Consolidation and Other Costs

2011 Program

During the fourth quarter of 2011, the Company initiated a facility consolidation and other costs program (“2011 Program”) to improve efficiencies and reduce fixed costs. As a part of this program, the Company announced the closure of five facilities. As of September 30, 2013, manufacturing operations had ceased at all of these manufacturing facilities. Most of the production from these five facilities has been transferred to other facilities. The total 2011 Program costs are approximately $100 million including $38 million in employee costs, $35 million in fixed asset accelerated depreciation and write-downs, and $27 million in other facility consolidation costs. These amounts exclude any potential gain to be recognized on the sale of property or reductions in pension withdrawal liabilities upon settlement. Expenses in the third quarter of 2013 were $6.0 million, primarily consisting of an increase in a multi-employer pension plan withdrawal liability and equipment relocation. The 2011 Program costs by reportable segment follow:



(in millions)	U.S. Packaging		Global Packaging		Pressure Sensitive Materials		Corporate		Total Facility Consolidation and Other Costs
2011 net expense accrued	$	26.3	$	8.6	$	2.7	$	0.8	$	38.4
2012 net expense accrued	29.4		5.0		—		—		34.4
2013 year-to-date net expense accrued	27.3		—		—		—		27.3
Expense incurred through September 30, 2013	$	83.0	$	13.6	$	2.7	$	0.8	$	100.1

An analysis of the 2011 Program accruals follows:



(in millions)	Employee Costs			Fixed Asset Related			Other Costs			Total Facility Consolidation and Other Costs
Reserve balance at December 31, 2012	$	14.6		$	—		$	—		$	14.6
Net expense accrued	6.1			6.7			14.5			27.3
Utilization (cash payments or otherwise settled)	(8.4		)	(6.7		)	(14.6		)	(29.7		)
Translation adjustments and other	(0.2		)	—			0.1			(0.1		)
Reserve balance at September 30, 2013	$	12.1		$	—		$	—		$	12.1

2012 Program

During the second quarter of 2012, the Company expanded its facility consolidation and other costs program (“2012 Program”) to further improve efficiencies and reduce costs within its U.S. and Global Packaging segments. As a part of this program, the Company announced the closure of an additional four production locations, including three facilities outside of the United States, and the relocation of the majority of the production to other facilities. As of September 30, 2013, manufacturing operations had ceased at all of these manufacturing facilities. The total 2012 Program costs are approximately $53 million including $23 million in employee-related costs, $16 million in fixed asset accelerated depreciation and write-downs, and $14 million in other facility consolidation costs. Expenses in the third quarter of 2013 were $9.8 million primarily consisting of an increase in a multi-employer pension plan withdrawal liability and asset write-offs.

The 2012 Program costs by reportable segment follow:



(in millions)	U.S. Packaging		Global Packaging			Total Facility Consolidation and Other Costs
2012 net expense accrued	$	12.7	$	21.6		$	34.3
2013 year-to-date net expense accrued	19.1		(0.4		)	18.7
Expense incurred through September 30, 2013	$	31.8	$	21.2		$	53.0

An analysis of the 2012 Program accruals follows:



(in millions)	Employee Costs			Fixed Asset Related			Other Costs			Total Facility Consolidation and Other Costs
Reserve balance at December 31, 2012	$	10.0		$	—		$	0.1		$	10.1
Net expense accrued	7.7			1.5			9.5			18.7
Utilization (cash payments or otherwise settled)	(5.9		)	(1.5		)	(9.6		)	(17.0		)
Reserve balance at September 30, 2013	$	11.8		$	—		$	—		$	11.8

Cash payments for these facility consolidation programs in the nine months ended September 30, 2013 and 2012 totaled $32.7 million and $23.7 million, respectively. Cash payments in 2013 are net of proceeds of $6.9 million received for the sale of property and equipment. Cash payments for the balance of 2013 are expected to be approximately $23 million. These amounts exclude any potential cash proceeds to be received on the sale of property. The costs related to facility consolidation activities have been recorded on the consolidated statement of income as facility consolidation and other costs. Included in employee-related costs is a multi-employer pension plan withdrawal liability provision, which represents the Company’s best estimate for the cost to exit the plan. The accruals related to facility consolidation activities have been recorded on the consolidated balance sheet as other current liabilities.