Restructuring and Asset Impairment

6 Months Ended

Jun. 28, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Asset Impairment

Restructuring and Asset Impairment

Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking the most cost-effective means and structure to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company's operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring activities.

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:

	Three Months Ended				Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
Severance and Termination Benefits	$	15,159	$	5,199	$	25,259	$	11,499
Asset Impairment / Disposal of Assets	6,073		5,652		8,759		7,284
Other Costs	1,653		2,504		1,466		5,244
Total Restructuring/Asset Impairment Charges	$	22,885	$	13,355	$	35,484	$	24,027

The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:

	Three Months Ended				Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
Consumer Packaging	$	3,250	$	10,487	$	5,612	$	17,742
Display and Packaging	668		511		3,548		886
Paper and Industrial Converted Products	17,689		1,600		23,045		2,474
Protective Solutions	695		561		1,168		1,003
Corporate	583		196		2,111		1,922
Total Restructuring/Asset Impairment Charges	$	22,885	$	13,355	$	35,484	$	24,027

Restructuring and asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company's Condensed Consolidated Statements of Income.

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:

	Severance and Termination Benefits		Asset Impairment/ Disposal of Assets		Other Costs		Total
Accrual Activity
Liability at December 31, 2019	$	10,765	$	—	$	592	$	11,357
2020 charges	25,259		8,759		1,466		35,484
Cash receipts/(payments)	(17,431)		722		(2,305)		(19,014)
Asset write downs/disposals	—		(9,481)		1,143		(8,338)
Foreign currency translation	(89)				(5)		(94)
Liability at June 28, 2020	$	18,504	$	—	$	891	$	19,395

"Severance and Termination Benefits" during the first six months of 2020 includes the cost of severance provided to employees terminated as a result of the operational closures in the Paper and Industrial Converted Products segment including a paper mill in Canada, a paper machine in the United States, and two tube and core plants in the United States, and the closure in the Consumer Packaging segment of a graphic design operation in the United Kingdom. In addition, the charges include the cost of severance for approximately 150 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts.

"Asset Impairment/Disposal of Assets" consists primarily of impairment charges of $5,726 resulting from the closure of a paper mill in Canada, and $2,300 resulting from the closure of a paper machine in Hartsville, South Carolina. Additionally, the Company received net cash proceeds of $722 primarily from the sale of a previously closed retail security plant facility in Spartanburg, South Carolina. This facility had a net book value of $490.

“Other Costs” consist primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance, net of incentive forfeitures.

The Company expects to pay the majority of the remaining restructuring reserves by the end of 2020 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $2,700 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2020. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.