RESTRUCTURING AND OTHER EXPENSES

Restructuring and other expenses include expenses resulting from the execution of our strategic assessment and related restructuring plans, consisting primarily of employee severance and other benefit-related costs, third-party consulting costs, facility-related costs, and certain other costs. It also includes other transitional costs such as training, redundant salaries, and retention bonuses for certain critical personnel.

In the fourth quarter of 2010, the Company commenced a strategic assessment of its business and operations ("Restructuring Phase I"). This assessment focused on expanding revenue opportunities and lowering corporate overhead, including workforce and benefit reductions and facility rationalization. In addition to addressing corporate overhead, the strategic assessment examined the Company's market strengths and opportunities and compared the Company's position to that of its competitors. As a result of the assessment, the Company focused its growth on investments in the Infusion and Home Health Services segments and elected to pursue offers for its traditional and specialty pharmacy mail operations and community pharmacy stores. Accordingly, the Company consummated the Pharmacy Services Asset Sale relating to its traditional and specialty pharmacy mail operations and community retail pharmacy stores. During the three months ended June 30, 2012, as a result of the divestiture process, the Company's management team commenced an assessment of the Company's continuing operations in order to align its corporate structure with its remaining operations ("Restructuring Phase II").

The Company anticipates that additional restructuring will occur and thus significant additional charges such as the write down of certain long−lived assets, employee severance, other restructuring type charges, temporary redundant expenses, potential cash bonus payments and potential accelerated payments or termination costs for certain of its contractual obligations, could impact the Company's future Consolidated Financial Statements.

Restructuring Phase I

As a result of Restructuring Phase I, the Company incurred restructuring expenses of approximately $0.3 million related to third-party consulting expenses during the six months ended June 30, 2012. The Company did not incur any significant restructuring expenses related to Phase I during the six months ended June 30, 2013, though some amounts previously accrued were adjusted.

Since inception of Restructuring Phase I, the Company has incurred approximately $10.2 million in total Phase I expenses, consisting of $4.4 million of third-party consulting costs, $4.2 million of employee severance and other benefit-related costs related to workforce reductions, and $1.6 million of facility-related costs.

The restructuring costs are included in restructuring and other expenses in the Unaudited Consolidated Statements of Operations and as part of the calculation of Segment Adjusted EBITDA, as defined in Note 11. As of June 30, 2013, there are restructuring accruals of $0.8 million related to Phase I included in accrued expenses and other current liabilities and other non-current liabilities on the Unaudited Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits		Consulting Costs			Facility-Related Costs			Total
Balance as of December 31, 2012	$	163	$	20		$	841		$	1,024
Expenses	—		(20		)	31			11
Cash payments	—		—			(223		)	(223		)
Balance as of June 30, 2013	$	163	$	—		$	649		$	812

Restructuring Phase II

As a result of Restructuring Phase II, the Company incurred restructuring expenses of approximately $0.2 million during the three and six months ended June 30, 2012. During the three months and six months ended June 30, 2013, the Company incurred restructuring expenses of $0.2 million and $0.7 million, respectively. Restructuring expenses for the six months ended June 30, 2013 included approximately $0.5 million of employee severance and other benefit-related costs related to workforce reductions and $0.2 million in other costs.

Since inception of Phase II of restructuring, the Company has incurred approximately $2.6 million in total expenses, consisting of $1.6 million of employee severance and other benefit-related costs related to workforce reductions, $0.3 million in third party consulting costs and $0.7 million of other costs.

The restructuring costs are included in restructuring and other expenses on the Unaudited Consolidated Statements of Operations and as part of the calculation of Segment Adjusted EBITDA, as defined in Note 11. As of June 30, 2013, there are restructuring accruals of $0.4 million related to Phase II included in accrued expenses and other current liabilities and other non-current liabilities on the Unaudited Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits			Consulting Costs			Other Costs			Total
Balance as of December 31, 2012	$	559		$	145		$	—		$	704
Expenses	490			19			160			669
Cash payments	(712		)	(145		)	(160		)	(1,017		)
Balance as of June 30, 2013	$	337		$	19		$	—		$	356

Other expenses include training and transitional costs, redundant salaries, certain fees associated with the Pharmacy Services Asset Sale and the Company's equity in the net loss of its unconsolidated affiliate. Other expenses totaled $1.2 million and $0.8 million for the three months ended June 30, 2013 and 2012 and $2.1 million and $0.9 million for the six months ended June 30, 2013 and 2012, respectively.