Cost Savings Initiatives and Other Restructuring Costs, Acquisition and Integration Activities and Legal Settlements

The Company recorded net charges relating to restructuring, acquisition and integration activities, and legal settlements of $0.1 million and $5.4 million for the first quarter of 2013 and 2012, respectively, which were recorded in selling, general and administrative expenses in the Company’s consolidated statements of comprehensive income.

Cost Savings Initiatives and Other Restructuring Costs

During the first quarter of 2012, the Company continued a comprehensive review of its branch structure, support infrastructure and other significant expenditures in order to reduce its ongoing operating costs given the challenging rate environment facing the Company. As a result of this effort, the Company closed or divested 46 home health branches and completed significant reductions in staffing levels in regional, area and corporate support functions. In connection with these activities, the Company recorded charges of $0.8 million in the first quarter of 2012 related to severance costs, facility lease and other costs.

Acquisition and Integration Activities

The Company recorded charges of $0.1 million for the first three months of 2013 related to acquisition and integration activities associated with the Company's acquisitions of North Mississippi Hospice and Family HomeCare, Inc. in 2012. During the first quarter of 2012, the Company recorded a credit of $0.4 million relating to acquisition and integration activities, primarily associated with favorable lease settlements associated with Odyssey HealthCare, Inc.

Legal Settlements

During the first quarter of 2012, the Company recorded legal settlements of $5.0 million related to certain of the wage and hour litigation and paid approximately $26 million in settlement with the United States regarding Odyssey's provision of continuous care services prior to the Company's acquisition of Odyssey in August 2010.

The costs incurred and cash expenditures associated with these activities by component were as follows (in thousands):



	Cost Savings and Other Restructuring			Acquisition & Integration			Legal Settlements			Total
Balance at December 31, 2011	$	8,671		$	3,708		$	26,000		$	38,379
Charge in first quarter 2012	842			(409		)	4,958			5,391
Cash expenditures	(3,527		)	(755		)	(25,958		)	(30,240		)
Non-cash expenditures	19			(216		)	—			(197		)
Ending balance at March 31, 2012	$	6,005		$	2,328		$	5,000		$	13,333

Balance at December 31, 2012	$	1,685		$	1,011		$	—		$	2,696
Charge in first quarter 2013	47			94			—			141
Cash expenditures	(1,104		)	(322		)	—			(1,426		)
Ending balance at March 31, 2013	$	628		$	783		$	—		$	1,411

The balance of unpaid charges relating to cost savings initiatives and other restructuring costs, acquisition and integration activities and legal settlements approximated $1.4 million at March 31, 2013 and $2.7 million at December 31, 2012, which were included in other accrued expenses in the Company’s consolidated balance sheets.