Restructuring and Other Items

Restructuring and other items consisted of:



	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions)	2012			2011			2012			2011
Restructuring and related charges (reversals):
Severance and post-employment benefits	$	(1.1	)	$	(0.3	)	$	(1.3	)	$	1.5
Impairments and asset write-offs	2.0			0.3			2.4			1.0
Other restructuring charges	0.2			1.0			0.7			1.8
Total restructuring and related charges	1.1			1.0			1.8			4.3

Impairment charge	—			—			3.4			—
Development income	(0.4		)	—			(4.2		)	—
Acquisition-related contingencies	0.5			0.3			0.9			(0.4		)
Special separation benefits	—			—			—			2.1
Foreign exchange and other	1.0			0.6			0.6			0.8
Total restructuring and other items	$	2.2		$	1.9		$	2.5		$	6.8

Restructuring and Related Charges

Total restructuring and related charges incurred during the three and nine months ended September 30, 2012 and 2011 were associated with the restructuring plan announced in December 2010 (the "2010 plan"). These charges consisted of costs associated with the 2011 closure of a plant in the United States, the reduction of operations at a manufacturing facility in England and the elimination of certain operational and administrative functions at other locations.

During the third quarter of 2012, we finalized an agreement concerning future manufacturing and supply requirements at our manufacturing facility in England, which triggered an impairment review of the related assets. Our review concluded that the estimated fair value of these assets no longer exceeded their carrying value and therefore, an impairment charge of $1.5 million was recorded. We estimated the fair value of the assets using an income approach based on discounted cash flows. Offsetting the costs incurred in the third quarter of 2012 were reductions to certain obligations under the 2010 plan, including a reduction of $1.7 million following the cancellation of the restructuring initiative at one of our plants in Europe as a result of increased customer demand for products and related efficiency improvements at that plant. We currently expect to incur additional charges related to the 2010 plan of approximately $0.2 million during the fourth quarter of 2012, after which no additional charges are expected to occur.

The following table presents activity related to our restructuring obligations during the nine months ended September 30, 2012:



($ in millions)	Severance and benefits			Other Costs			Total
Balance, December 31, 2011	$	6.2		$	0.6		$	6.8
Charges (reversals), net	(1.3		)	3.1			1.8
Cash payments	(1.7		)	(1.2		)	(2.9		)
Non-cash adjustments	0.5			(2.4		)	(1.9		)
Balance, September 30, 2012	$	3.7		$	0.1		$	3.8

Other Items

During the second quarter of 2012, as a result of continuing delays and lower-than-expected demand, we updated the sales projections related to one of our product lines in our Pharmaceutical Delivery Systems segment (“Delivery Systems”). The revised projections triggered an impairment review of the associated assets. Our review concluded that the estimated fair value of the product no longer exceeded the carrying value of the related assembly equipment and intangible asset and, therefore, an impairment charge of $3.4 million was recorded. We estimated the fair value of the asset group using an income approach based on discounted cash flows.

Development income recorded in the three and nine months ended September 30, 2012 was attributable to services provided to, and the reimbursement of certain costs from, a Delivery Systems’ customer.

The liability for contingent consideration related to our 2010 acquisition of technology used in our SmartDose™ electronic patch injector system (“SmartDose contingent consideration”) increased by $0.5 million and $0.9 million during the three and nine months ended September 30, 2012, respectively, due to fair value adjustments.

During the three and nine months ended September 30, 2011, we increased the SmartDose contingent consideration by $0.2 million and $0.3 million, respectively, due to fair value adjustments. In addition, during the nine months ended September 30, 2011, we reduced the contingent consideration liability related to the July 2009 acquisition of the éris™ safety syringe system (“éris contingent consideration”) by $0.8 million, which resulted in a zero liability balance at September 30, 2011.

During the nine months ended September 30, 2011, we incurred $2.1 million in special separation benefits related to the retirement of our former President and Chief Operating Officer. These costs consisted primarily of stock-based compensation expense. The respective equity compensation arrangements were amended to allow certain of his awards to continue to vest over the original vesting period instead of being forfeited upon separation, resulting in a revaluation of the awards and acceleration of expense.