Restructuring and Other Items

Restructuring and other items consisted of:



	Three Months Ended September 30,						Nine Months Ended September 30,
($ in millions)	2013			2012			2013			2012
Restructuring and related charges (reversals):
Severance and post-employment benefits	$	—		$	(1.1	)	$	—		$	(1.3	)
Impairments and asset write-offs	—			2.0			—			2.4
Other restructuring charges	—			0.2			—			0.7
Total restructuring and related charges	—			1.1			—			1.8
Impairment charge	—			—			—			3.4
Development income	(0.4		)	(0.4		)	(1.2		)	(4.2		)
Acquisition-related contingencies	0.3			0.5			0.5			0.9
Foreign exchange and other	0.2			1.0			0.2			0.6
Total restructuring and other items	$	0.1		$	2.2		$	(0.5	)	$	2.5

Restructuring and Related Charges

Total restructuring and related charges incurred during the three and nine months ended September 30, 2012 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 the 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 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.

We have not incurred any restructuring and related charges during 2013, and we do not expect to incur any future charges related to the 2010 plan.

The following table presents activity related to our restructuring obligations:



($ in millions)	Severance and benefits
Balance, December 31, 2012	$	2.8
Cash payments	(2.7		)
Balance, September 30, 2013	$	0.1

We expect all payments to be completed by the end of 2013.

Other Items

During the three and nine months ended September 30, 2013, we recorded development income of $0.4 million and $1.2 million, respectively, within the Pharmaceutical Delivery Systems segment ("Delivery Systems"). Included in these amounts was $0.4 million and $0.7 million, respectively, of income related to a nonrefundable payment of $20.0 million received from a customer in June 2013 in return for the exclusive use of our SmartDose™ electronic patch injector system ("SmartDose") within a specific therapeutic area. Unearned income related to this payment of $1.5 million and $17.8 million was included within other current liabilities and other long-term liabilities, respectively, at September 30, 2013. The unearned income is being recognized as development income on a straight-line basis over the remaining term of the agreement, which is thirteen years. The agreement does not include a future minimum purchase commitment from the customer. During the three and nine months ended September 30, 2012, we recorded development income of $0.4 million and $4.2 million, respectively, within Delivery Systems attributable to services and the reimbursement of certain costs.

The liability for contingent consideration related to our 2010 acquisition of technology used in SmartDose (“SmartDose contingent consideration”) increased by $0.3 million and $0.5 million during the three and nine months ended September 30, 2013, respectively, due to the time value of money and adjustments related to changes in sales projections. During the three and nine months ended September 30, 2012, the fair value of the SmartDose contingent consideration increased by $0.5 million and $0.9 million, respectively, due to the same factors described above.

In addition, 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 line 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 during the second quarter of 2012. We estimated the fair value of the asset group using an income approach based on discounted cash flows.