Restructuring and Other Expense

Restructuring expenses generally include severance and related charges, lease termination costs and other costs related to restructuring programs. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. Generally, these charges are reflected in the period in which the Board approves the associated actions, the actions are probable and the amounts are estimable which may occur prior to the communication to the affected employee(s). This estimate takes into account all information available as of the date the financial statements are issued. Severance amounts, for which affected employees were required to render service in order to receive benefits at their termination dates, are measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods.

2012 Global Process Improvement Restructuring Program

On October 22, 2012, the Board of Directors approved our GPI Program in order to realign our business structure and reduce operating expenses in excess of 25 percent over time. This restructuring program addressed product line rationalization and infrastructure and included a planned reduction in our global workforce. The majority of these actions were implemented during 2013. As of December 31, 2013 we have reduced operating expenses by approximately 30 percent, not considering the incremental operating expense from the acquisition of Nexsan, and we have reduced our global workforce by over 20 percent under the GPI Program.

Other Prior Programs Substantially Complete

We have two additional programs, as described further below, that were initiated in prior years and are now substantially complete.

The 2011 Corporate Program was initiated during the first quarter of 2011 to rationalize certain product lines, increase efficiency and gain greater focus in support of our go-forward strategy. Major components of the program included charges associated with certain benefit plans, improvements to our global sourcing and distribution network, costs associated with further rationalization of our product lines and evolution of our skill sets to align with our announced strategy. At December 31, 2012, we had approximately $15 million of authorized spending amounts remaining related to this program. At December 31, 2012, this remaining authorization was transferred and added to the GPI Program and any future charges, as well as the remaining spend relating to the 2011 Corporate Program, will be accounted for under the 2012 GPI Program.

The 2011 Manufacturing Redesign Restructuring Program (2011 Manufacturing Program) was initiated during the first quarter of 2011 to rationalize certain product lines and discontinue tape coating operations at our Weatherford, Oklahoma facility and subsequently close the facility.

The components of our restructuring and other expense and other certain expenses included in our Consolidated Statements of Operations were as follows:



	Years Ended December 31,
	2013			2012			2011
	(In millions)
Restructuring
Severance and related	$	2.1		$	16.9		$	7.0
Lease termination costs	0.7			0.6			3.3
Other	2.4			2.2			1.1
Total restructuring	$	5.2		$	19.7		$	11.4
Other
Settlement of UK pension plan (Note 9)	10.6			—			—
Gain on sale of fixed assets held for sale	(9.8		)	(0.7		)	—
Acquisition and integration related costs	2.8			3.7			2.6
Pension settlement/curtailment (Note 9)	2.1			2.4			2.5
Contingent consideration fair value adjustment (Note 4)	(0.6		)	(8.6		)	—
Intangible asset abandonment (Note 6)	—			1.9			—
Asset disposals	—			—			7.0
Other	1.0			2.7			(2.0		)
Total	$	11.3		$	21.1		$	21.5

Total restructuring charges of $5.2 million recorded for the year ended December 31, 2013 were all related to the GPI Program.

For the year ended December 31, 2012, we recorded restructuring charges of $14.9 million, primarily related to severance, under the GPI Program. Also during 2012, we recorded restructuring charges of $4.2 million under the 2011 Corporate Program primarily related to severance and $0.6 million of other restructuring charges under the 2011 Manufacturing Program.

For the year ended December 31, 2011, we recorded restructuring charges of $10.2 million, primarily related to severance and lease termination costs under the 2011 Corporate Program. Also during 2011, we recorded restructuring charges of $0.3 million for lease termination and modification costs and $0.9 million of site clean-up costs under the 2011 Manufacturing Program.

In addition to the restructuring charges recorded in restructuring and other, we recorded inventory write-offs of $2.7 million, $2.3 million and $9.1 million related to the planned rationalization of certain product lines as part of our restructuring programs, for the years ended December 31, 2013, 2012 and 2011, respectively, which are included in cost of goods sold in our Consolidated Statements of Operations.

Since the inception of the GPI Program, we have recorded a total of $17.6 million of severance and related expenses, $5.0 million of inventory write-offs, $0.8 million of lease termination and modification costs, and $3.3 million of other charges.

Since the inception of the 2011 Corporate Program, we have recorded a total of $13.4 million of severance and related expenses, $3.5 million of lease termination and modification costs, $1.6 million of inventory write-offs, $0.3 million related to a pension curtailment charge and $0.9 million of other charges.

Activity related to the 2012 GPI Program accruals was as follows:



	Severance and Related			Lease Termination Costs			Other			Total
	(In millions)
Accrued balance at December 31, 2011	$	—		$	—		$	—		$	—
Charges	13.9			0.1			0.9			14.9
Usage	(0.1		)	—			(0.1		)	(0.2		)
Currency impacts	—			—			—			—
Accrued balance at December 31, 2012	$	13.8		$	0.1		$	0.8		$	14.7
Transfer from 2011 Corporate Program	1.6			0.4			0.2			2.2
Charges	3.7			0.7			2.4			6.8
Usage	(16.9		)	(0.7		)	(2.5		)	(20.1		)
Currency impacts	—			(0.1		)	(0.1		)	(0.2		)
Accrued balance at December 31, 2013	$	2.2		$	0.4		$	0.8		$	3.4

During the year ended December 31, 2013, severance expense of $1.6 million related to employees directly associated with the XtremeMac and Memorex consumer electronics businesses was recorded in discontinued operations. See Note 4 - Acquisitions and Divestitures for more information on our discontinued operations.

Other

Certain amounts recorded in Other are discussed elsewhere in our Notes to Consolidated Financial Statements. See note references in table above.

Our Camarillo, California manufacturing facility ceased operations on December 31, 2008 and the facility, comprised of a building and property, was classified as held for sale. During 2011, in an effort to increase the salability of the property, we demolished the building which resulted in a $7.0 million loss on disposal during the period. On October 7, 2011 we entered into an agreement to sell the land for $10.5 million, contingent upon the change of certain zoning requirements for the land as well as other standard conditions. The land related to the facility continued to meet the criteria for held for sale accounting and, therefore, was classified in other current assets on our Consolidated Balance Sheet as of December 31, 2012 at a book value of $0.2 million. The sale was completed in December 2013, and the related gain of $9.8 million was recorded in restructuring and other expense during the fourth quarter.