Special Charges

6 Months Ended

Jun. 30, 2011

5. Special Charges

Facility Closures

In December 2008, we announced that our Syracuse China manufacturing facility and our Mira Loma, California distribution center would be shut down in early to mid-2009 in order to reduce costs. The Syracuse China facility was closed on April 9, 2009 and the Mira Loma distribution center was closed on May 31, 2009. See Form 10-K for the year ended December 31, 2010 for further discussion.

We incurred no additional charges for the three months ended June 30, 2011. We incurred charges of approximately $0.1 million in the six months ended June 30, 2011 related to other costs net of building site clean-up adjustments in connection with the sale of the property in Syracuse, New York in March 2011. This amount was included in special charges on the Condensed Consolidated Statement of Operations in the Other Operations segment as detailed in the table below.

We incurred additional charges of approximately $0.2 million and $0.5 million in the three months and six months ended June 30, 2010 related to these planned closures. Special charges of $0.2 million and $0.4 million were primarily related to employee termination and building site clean up costs in the three months and six months ended June 30, 2010, respectively. These amounts were included in special charges on the Condensed Consolidated Statement of Operations in the Glass Operations and Other Operations segment as detailed in the table below.

Other income on the Condensed Consolidated Statement of Operations included a charge of $0.1 million for the first six months of 2010 for the change in fair value of ineffective natural gas hedges related to our Syracuse China operation. This amount was included in the Other Operations segment.

The following table summarizes the facility closure charges in the second quarter of 2011 and 2010:


	Three months ended June 30, 2011						Three months ended June 30, 2010
	Glass		Other				Glass		Other
(dollars in thousands)	Operations		Operations		Total		Operations		Operations		Total
Building site clean-up & fixed asset write-down	$	—	$	—	$	—	$	—	$	156	$	156

Included in special charges		—		—		—		—		156		156

Total pretax charge	$	—	$	—	$	—	$	—	$	156	$	156

The following table summarizes the facility closure charges in the first six months of 2011 and 2010:


	Six months ended June 30, 2011								Six months ended June 30, 2010
	Glass		Other						Glass		Other
(dollars in thousands)	Operations		Operations			Total			Operations		Operations			Total
Employee termination cost & other	$	—	$	167		$	167		$	29	$	76		$	105
Building site clean-up & fixed asset write-down		—		(116	)		(116	)		—		283			283

Included in special charges		—		51			51			29		359			388
Ineffectiveness of natural gas hedge		—		—			—			—		(130	)		(130	)

Included in other (expense) income		—		—			—			—		(130	)		(130	)

Total pretax charge	$	—	$	51		$	51		$	29	$	489		$	518

The following reflects the balance sheet activity related to the facility closure charge for the period ended June 30, 2011:


	Balances		Total			Cash			Inventory &					Balances at
	at December 31,		Charge to			(payments)			Fixed asset		Non-cash			June 30,
(dollars in thousands)	2010		Earnings			receipts			Write Downs		Utilization			2011
Building site clean-up & fixed asset write-down	$	151	$	(116	)	$	(5	)	$	21	$	(51	)	$	—
Employee termination cost & other		301		167			(314	)		—		(154	)		—

Total	$	452	$	51		$	(319	)	$	21	$	(205	)	$	—

The activities related to our closure of the Syracuse China manufacturing facility and our Mira Loma, California distribution center are complete. The following reflects the total cumulative expenses to date (incurred from the fourth quarter of 2008 through the Balance Sheet date) related to the facility closure activity:


	Glass		Other		Charges
(dollars in thousands)	Operations		Operations		To Date
Inventory write-down	$	192	$	10,541	$	10,733
Pension & postretirement welfare		—		4,448		4,448
Fixed asset depreciation		—		966		966

Included in cost of sales		192		15,955		16,147
Employee termination cost & other		548		6,149		6,697
Building site clean-up & fixed asset write-down		177		10,418		10,595

Included in special charges		725		16,567		17,292
Ineffectiveness of natural gas hedge		—		745		745

Included in other (income) expense		—		745		745

Total pretax charge to date	$	917	$	33,267	$	34,184

Fixed Asset and Inventory Write-down

In August 2010, we wrote down decorating assets in our Shreveport, Louisiana facility as a result of our decision to outsource our U.S. decorating business. See Form 10-K for the year ended December 31, 2010 for further discussion.

During the three months and six months ended June 30, 2011, we recorded a $0.1 million income adjustment to special charges in the Glass Operations segment.

The following reflects the balance sheet activity related to the fixed asset and inventory write-down charge as of June 30, 2011:


	Reserve											Reserve
	Balances at		Total			Cash			Inventory &			Balances at
	December 31,		Charge to			(payments)			Fixed asset			June 30,
(Dollars in thousands)	2010		Earnings			receipts			Write Downs			2011
Building site clean-up & fixed asset write-down	$	316	$	(57	)	$	(13	)	$	(44	)	$	202

Total	$	316	$	(57	)	$	(13	)	$	(44	)	$	202

The ending balance of $0.2 million at June 30, 2011 was included in accrued special charges on the Condensed Consolidated Balance Sheets; we expect this to result in cash payments during the remainder of 2011.

During the second quarter of 2010, we wrote down certain after-processing equipment within our Glass Operations segment. The non-cash charge of $2.7 million was included in cost of sales on the Condensed Consolidated Statement of Operations. During the second quarter of 2011, we received a $1.0 million credit from the supplier of this equipment. This was recorded in selling, general and administrative expense and other income on the Condensed Consolidated Statements of Operations.

Summary of Total Special Charges

The following table summarizes the special charges mentioned above and their classifications in the Condensed Consolidated Statements of Operations:


	Three months ended June 30,					Six months ended June 30,
(dollars in thousands)	2011			2010		2011			2010
Cost of sales	$	43		$	2,687	$	43		$	2,687
Selling general & administrative		(805	)		—		(805	)		—
Special charges (income)		(100	)		156		(49	)		388
Other (income) expense		(216	)		—		(216	)		130

Total (income) expense	$	(1,078	)	$	2,843	$	(1,027	)	$	3,205