INVIGORATE PROGRAM
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Dec. 31, 2012
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVIGORATE PROGRAM | INVIGORATE PROGRAM During the first quarter of 2012, the Company committed to a course of action related to a multi-year program called Invigorate which is designed to reduce its cost structure. The Invigorate program is intended to address continued reimbursement pressures and labor and benefit cost increases, free up additional resources to invest in science, innovation and other growth initiatives, and enable the Company to improve operating profitability and quality. In connection with this program, the Company also launched a voluntary retirement program to certain eligible employees. The Invigorate program is currently expected to be principally completed by the end of 2014. In October 2012, the Company launched a major management restructuring aimed at driving operational excellence and restoring growth. The key element of this organizational change is to eliminate the complexity associated with the Company's prior structure, including reducing management layers, so that the Company can better focus on customers and speed decision-making. The new organization is designed to align around future growth opportunities, improve execution and leverage company-wide infrastructure to maximize value and efficiency. The majority of the organizational changes began on January 1, 2013. In connection with these changes the Company expects to eliminate three management layers, and approximately 400 to 600 management positions, by the end of 2013. The following table provides a summary of the Company's pre-tax restructuring and integration charges associated with Invigorate for the year ended December 31, 2012:
Of the total employee separation costs noted above, $44.5 million represent costs incurred under the Company's voluntary retirement program for the year ended December 31, 2012. Of the total $72.9 million in restructuring and integration charges incurred during the year ended December 31, 2012, $47.2 million and $25.7 million was recorded in cost of services and selling, general and administrative expenses, respectively. These charges were primarily recorded in the Company's Diagnostics Information Services ("DIS') business. The following table summarizes the activity of the restructuring liability as of December 31, 2012:
In addition to the restructuring and integration charges noted above, the Company incurred approximately $33.1 million of which $28.5 million principally represent professional fees incurred in connection with further restructuring and integration of the Company's business for the year ended December 31, 2012; with the remainder representing costs related to the integration of recently acquired companies with the Company's operations. |