NOTE 5—CHARGES FOR RESTRUCTURING

As a result of challenging market conditions in Dole’s fresh fruit operations, Dole committed to a restructuring plan during the third quarter of 2010 in its fresh fruit segment in Europe, Latin America and Asia (“2010 plan”). These restructuring efforts are designed to reduce costs by realigning fruit supply with expected demand. As part of these initiatives, Dole restructured certain farming operations in Latin America and Asia, reorganized its European operations and rationalized vessel charters.

During the third quarter of 2011, Dole committed to further restructure its fresh fruit operations in Europe and Latin America, as well as restructure the fresh vegetables operations in Asia (“2011 plan”). As part of this plan, Dole consolidated certain operations in Europe to reduce overhead, restructured farming operations in Latin America, and further rationalized vessel charters. In addition, Dole ended certain unprofitable contractual arrangements in Asia.

As a result of these various initiatives, Dole expects to realize cash savings in its financial results. These savings are expected to result from lower production costs including lower labor costs on our farms and in our ports, enhanced farm productivity, lower distribution costs resulting from more efficient utilization of our shipping fleet, the termination of unprofitable contractual arrangements, and lower selling and general and administrative costs as a result of streamlining Dole’s organization in Europe.

2010 Restructuring Plan

Dole incurred restructuring costs of $0.2 million and $0.9 million during the quarter and three quarters ended October 6, 2012, related to the 2010 plan. Dole has incurred cumulative restructuring costs of $42.2 million since the third quarter of 2010 for this plan. Of these costs, $20.8 million were paid or will be paid in cash, with the remaining amounts related to the non-cash write-down of long-lived assets and deferred crop-growing costs of $13.4 million as well as pension-related settlement charges of $8 million. Severance charges relating to employee terminations involved approximately 3,580 employees.

Dole expects to incur additional restructuring charges of approximately $0.4 million during the fourth quarter of fiscal 2012 related to the 2010 plan. These additional charges will primarily consist of contract termination costs.

The following table summarizes restructuring charges related to the 2010 plan:


	Charges Incurred in Three Quarters 2011		Charges Incurred in Three Quarters 2012		Cumulative Charges Incurred		Additional Charges to be Incurred		Total Charges
	(In thousands)
Severance and other employee-related costs	$	1,146	$	174	$	8,792	$	—	$	8,792
Contract termination and other costs		7,385		92		12,008		381		12,389
Pension-related settlement charges		863		—		7,982		—		7,982
Asset write-downs		2,733		586		8,097		—		8,097

Subtotal		12,127		852		36,879		381		37,260
Inventory write-downs recorded in costs of products sold		5,294		—		5,294		—		5,294

	$	17,421	$	852	$	42,173	$	381	$	42,554

A rollforward of activity for Dole’s restructuring liabilities related to the 2010 plan, for the year ended January 1, 2011 through October 6, 2012, which are classified in accrued liabilities in the accompanying condensed consolidated balance sheets, is summarized as follows:


	Severance and Other Employee- Related Costs			Contract Termination and Other Costs			Total Costs
	(In thousands)
Balance as of January 1, 2011	$	2,092		$	3,555		$	5,647
Charges / (adjustments) incurred		1,950			7,459			9,409
Cash payments		(3,136	)		(7,299	)		(10,435	)
Non-cash		(821	)		—			(821	)

Balance as of December 31, 2011		85			3,715			3,800
Charges / (adjustments) incurred		174			92			266
Cash payments		(259	)		(866	)		(1,125	)
Non-cash		—			—			—

Balance as of October 6, 2012	$	—		$	2,941		$	2,941

2011 Restructuring Plan

Dole incurred restructuring costs of $0.6 million and $2.2 million during the quarter and three quarters ended October 6, 2012, related to the 2011 plan. Dole has incurred cumulative restructuring costs of $12.4 million since the third quarter of 2011 for this plan. Of these costs, $8.7 million were paid or will be paid in cash, with the remaining amounts related to the non-cash write-down of long-lived assets of $3.6 million as well as pension-related settlement charges of $0.1 million. Severance charges relating to employee terminations involved approximately 475 employees.

Dole expects to incur additional restructuring charges of approximately $1.4 million during the fourth quarter of fiscal 2012 related to the 2011 plan. These additional charges will primarily consist of employee severance and contract termination costs. Approximately 60 additional employees are expected to be impacted by these initiatives.

The following table summarizes restructuring charges related to the 2011 plan:


	Charges/ (Adjustments) Incurred in Three Quarters 2011		Charges/ (Adjustments) Incurred in Three Quarters 2012			Cumulative Charges Incurred		Additional Charges to be Incurred		Total Charges
	(In thousands)
Severance and other employee-related costs	$	184	$	(29	)	$	413	$	1,184	$	1,597
Contract termination and other costs		1,005		2,018			8,312		203		8,515
Pension-related settlement charges		—		—			86		—		86
Asset write-downs		3,263		191			3,601		—		3,601

	$	4,452	$	2,180		$	12,412	$	1,387	$	13,799

A rollforward of activity for Dole’s restructuring liabilities related to the 2011 plan, for the year ended January 1, 2011 through October 6, 2012, which are classified in accrued liabilities in the accompanying condensed consolidated balance sheets, is summarized as follows:


	Severance and Other Employee- Related Costs			Contract Termination and Other Costs			Total Costs
	(In thousands)
Balance as of January 1, 2011	$	—		$	—		$	—
Charges / (adjustments) incurred		442			6,294			6,736
Cash payments		(248	)		(1,913	)		(2,161	)
Non-cash		—			(146	)		(146	)

Balance as of December 31, 2011		194			4,235			4,429
Charges / (adjustments) incurred		(29	)		2,017			1,988
Cash payments		(165	)		(5,073	)		(5,238	)
Non-cash		—			(11	)		(11	)

Balance as of October 6, 2012	$	—		$	1,168		$	1,168