Restructuring and Repositioning Expenses

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Expenses and Repositioning Expenses

Restructuring and Repositioning Expenses

Restructuring Expenses

GCP's Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, GCP takes additional restructuring actions, including involuntary terminations that are not part of a major program. GCP accounts for these costs, which are reflected in restructuring expense in its Consolidated Statements of Operations, in the period that the related liabilities are incurred. Restructuring expenses are excluded from segment operating income.

For the second quarter of 2016, GCP incurred $0.1 million ($0.1 million in SCC) of restructuring expenses, compared with $3.3 million ($1.7 million in SCC, $1.4 million in SBM and $0.2 million in Darex) for the prior-year quarter. GCP incurred $1.0 million ($0.5 million in SCC and $0.5 million in SBM) of restructuring expenses for the six months ended June 30, 2016, compared with $7.6 million ($4.4 million in SCC, $2.3 million in SBM and $0.9 million Darex) for the six months ended June 30, 2015.

GCP had restructuring liabilities of $1.5 million and $1.4 million as of June 30, 2016 and December 31, 2015, respectively related to severance actions taken during the periods. GCP expects to pay substantially all costs related to its current restructuring programs by December 31, 2016.

Restructuring Liability (In millions)	Total
Balance, December 31, 2015	$	1.4
Accruals for severance	1.0
Payments	(2.4		)
Impact of foreign currency and other	1.5
Balance, June 30, 2016	$	1.5

Repositioning Expenses

Post-Separation, GCP has incurred expenses related to its transition to a stand-alone public company. The Company expects to incur these repositioning expenses, ranging from $13.0 million to $15.0 million, within 12 months of the Separation. Repositioning expenses primarily relate to the following:

• accounting, tax, legal and other professional costs pertaining to the Separation and establishment as a stand-alone public company;

• costs relating to information technology systems and marketing expense for repackaging and re-branding;

• employee-related costs that would not be incurred absent the Separation primarily relating to compensation, benefits, retention bonuses related to new or transitioning employees; and

• recruitment and relocation costs associated with hiring and relocating employees.

Due to the scope and complexity of these activities, the range of estimated repositioning expenses could increase or decrease and the timing of incurrence could change.

For the three and six months ended June 30, 2016, GCP incurred repositioning expenses as follows:

(In millions)	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Professional fees	$	2.1	$	4.2
Software and IT implementation fees	1.7		1.7
Employee-related costs	0.9		3.1
Total	$	4.7	$	9.0

GCP accounts for these costs, which are reflected in repositioning expense in the accompanying Consolidated Statements of Operations, in the period incurred. Substantially all of these costs have been or are expected to be settled in cash. Total cash payments for the six months ended June 30, 2016 were $10.1 million for professional fees and employee-related costs, $4.2 million for capital expenditures and $6.8 million for taxes.