Employee Separation and Restructuring Costs

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Employee Separation and Restructuring Costs

Note 4 — EMPLOYEE SEPARATION AND RESTRUCTURING COSTS

In the second half of 2015, PolyOne determined it would close two manufacturing facilities within the Designed Structures and Solutions segment and take other corporate actions to reduce administrative costs. These actions were taken as a result of Designed Structures and Solutions' declining results and near-term outlook. During the three and six months ended June 30, 2016, we recognized $1.7 million and $6.8 million, respectively, primarily related to severance and asset-related charges, including fixed asset and inventory write offs, associated with these actions. Total costs for these actions to-date has been $23.9 million, which includes $8.3 million of severance costs, $13.1 million of asset-related charges, including accelerated depreciation of $9.0 million, and $2.5 million of other ongoing costs associated with exiting these plants and transferring equipment. We anticipate the remaining accelerated depreciation charges and ongoing costs of $3.3 million to be incurred in the third quarter of 2016.

During 2016, in addition to the actions noted above, we recognized $2.2 million and $2.8 million of restructuring costs for the three and six months ended June 30, 2016, respectively, that were primarily related to restructuring actions taken at other North American locations.

In 2013, PolyOne determined it would close seven former Spartech Corporation (Spartech) manufacturing facilities and one administrative office and relocate operations to other PolyOne facilities. The closure of these manufacturing facilities was part of the Company’s efforts to improve service, on time delivery and quality as we align assets with our customers' needs.

There were no charges related to the Spartech actions during the six months ended June 30, 2016 as these actions were complete as of December 31, 2015. We recognized $5.7 million and $15.0 million related to these actions during the three and six months ended June 30, 2015, respectively.

During the three months ended June 30, 2016, we recognized total employee separation and restructuring charges of $4.8 million, of which $1.9 million was recognized within Cost of goods sold and $2.9 million within Selling and administrative expenses. During the three months ended June 30, 2015, we recognized total employee separation and restructuring charges of $7.5 million, of which $5.3 million was recognized within Cost of goods sold and $2.2 million within Selling and administrative expenses.

During the six months ended June 30, 2016, we recognized total employee separation and restructuring charges of $11.9 million, of which $4.6 million was recognized within Cost of goods sold and $7.3 million within Selling and administrative expenses. During the six months ended June 30, 2015, we recognized total employee separation and restructuring charges of $18.1 million, which included $13.2 million recognized within Cost of goods sold and $4.9 million recognized within Selling and administrative expenses.