Restructuring and Other Items

Restructuring and other items consisted of:



($ in millions)	2012			2011			2010
Restructuring and related charges (reversals):
Severance and post-employment benefits	$	(1.2	)	$	2.3		$	10.5
Impairments and asset write-offs	2.4			—			5.2
Other restructuring charges	0.9			3.0			0.2
Total restructuring and related charges	2.1			5.3			15.9

Impairment charge	3.4			—			—
Development income	(6.5		)	—			—
Acquisition-related contingencies	1.2			(0.2		)	(1.8		)
Special separation benefits	—			2.9			—
Foreign exchange and other	1.1			1.5			1.7
Total restructuring and other items	$	1.3		$	9.5		$	15.8

Restructuring and Related Charges

Total restructuring and related charges incurred during 2012 and 2011 were associated with 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. Offsetting the costs incurred during 2012 were reductions to certain previously-recorded 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.

In addition, during 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. We incurred a total of $21.9 million in restructuring and related charges, as part of the 2010 plan. We do not expect to incur any future charges related to the 2010 plan, and the remaining restructuring obligations at December 31, 2012 will be reduced to zero as payments are made.

During 2010, we incurred charges of $14.5 million under the 2010 plan, consisting of $10.1 million in severance and post-employment benefits and $4.4 million in asset impairment charges. We also incurred $1.4 million in restructuring and related charges in connection with the 2009 restructuring program, including $0.4 million in employee severance and post-employment benefits, $0.8 million in asset disposal charges and $0.2 million in other exit costs.

The following table presents activity related to our restructuring obligations:



($ in millions)	Severance and benefits			Other Costs			Total
Balance, December 31, 2010	$	10.2		$	—		$	10.2
Charges	2.3			3.0			5.3
Cash payments	(6.3		)	(2.6		)	(8.9		)
Non-cash adjustments	—			0.2			0.2
Balance, December 31, 2011	$	6.2		$	0.6		$	6.8
Charges (reversals), net	(1.2		)	3.3			2.1
Cash payments	(2.6		)	(1.4		)	(4.0		)
Non-cash adjustments	0.4			(2.5		)	(2.1		)
Balance, December 31, 2012	$	2.8		$	—		$	2.8

During 2011, as a result of the closure of a plant in Montgomery, Pennsylvania, we recorded a $0.2 million net curtailment gain related to our U.S. qualified and postretirement medical plans.

Other Items

During 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 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 during 2012 was primarily attributable to services provided to, and the reimbursement of certain research and development costs from, a Delivery Systems’ customer.

The SmartDose contingent consideration increased by $1.2 million and $0.5 million during 2012 and 2011, respectively, due to fair value adjustments. During 2011 and 2010, we reduced the éris contingent consideration by $0.8 million and $1.8 million, respectively, which resulted in a zero liability balance at December 31, 2011. This reduction reflects our assessment that none of the contractual operating targets will be achieved over the earnout period, which ends in 2014.

During 2011, we incurred $2.9 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 and a settlement loss related to one of our non-qualified defined benefit pension plans. 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.