Restructuring And Impairment Charges

6 Months Ended

Jun. 30, 2011

Restructuring And Impairment Charges

Restructuring And Impairment Charges

8. Restructuring and Impairment Charges

For the six months ended June 30, 2011, we incurred net restructuring charges of $56,000. The restructuring charges consisted primarily of a change in estimate related to previously accrued lease termination costs and employee separation benefits. For the six months ended June 30, 2010, we incurred a net restructuring charge of $648,000. The charges were $271,000 for exit and disposal costs associated with the closing of vision centers and $377,000 for contract termination costs. Contract termination costs resulted primarily from the closure of one of our licensed operations and the termination of the related license agreement. Other exit and disposal costs incurred in 2010 were primarily expenses related to the closures of facilities and the relocation of various medical equipment.

At June 30, 2011 and December 31 2010, we included short-term restructuring reserves of $1.3 million and $1.6 million, respectively, in "Accrued liabilities and other" in the Condensed Consolidated Balance Sheets. Long-term restructuring reserves were $1.6 million and $2.1 million at June 30, 2011 and December 31, 2010, respectively, and were included in "Long-term rent obligations and other." The decline in restructuring reserves related to payments during the six month period. The fair value measurements in all periods utilized market prices of similar assets in determining fair value, which is a Level 3 input under U.S. GAAP.

The following table summarizes the restructuring reserve for the three and six months ended June 30, 2011 (in thousands):

	Employee Separation Costs			Contract Termination Costs			Total
Balance at December 31, 2010	$	107		$	3,641		$	3,748
Liabilities recognized		20			36			56
Utilized		(127	)		(427	)		(554	)
Balance at March 31, 2011		—			3,250			3,250
Liabilities recognized		—			—			—
Utilized		—			(329	)		(329	)
Balance as of June 30, 2011	$	—		$	2,921		$	2,921

In the second quarter of 2011 and for the six months then ended, we incurred no impairment charges. In the second quarter of 2010 and for the six months then ended, we recorded an impairment charge to reduce the carrying amount of long-lived assets by $87,000 for one vision center. This impairment charge reflects our decision to close the vision center. We assess the impairment of property and equipment whenever events or circumstances indicate that the carrying value might not be recoverable. We write down to fair value, which is generally determined from estimated discounted cash flows for assets held for use, recorded values of property and equipment that we do not expect to recover through undiscounted future net cash flows. The use of discounted cash flows represents a Level 3 fair value input under U. S. GAAP.