Costs Associated with Exit and Restructuring Activities

Costs associated with exit and restructuring activities are recorded in the Condensed Consolidated Statement of Earnings as follows: restructuring related charges are recorded as a component of Cost of Goods Sold, and restructuring and impairment charges are reported on a separate line and included in Operating Earnings.

Total restructuring, impairment and restructuring related charges were as follows:



	Three Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	152
Restructuring and impairment charges	1,969		2,373
Total restructuring, impairment, and restructuring-related charges	$	1,969	$	2,525



	Nine Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	444
Restructuring and impairment charges	2,175		5,229
Total restructuring, impairment, and restructuring-related charges	$	2,175	$	5,673

In June 2016, CTS announced plans to restructure operations by phasing out production at the Elkhart facility by mid-2018 and transitioning it into a research and development center supporting CTS' global operations ("June 2016 Plan"). Additional organizational changes will also occur in various other locations. The cost of the plan is expected to be approximately $16,000 including severance and other one-time benefit arrangements. We have recorded $2,175 of termination and other one-time benefit charges impacting approximately 230 employees as of September 30, 2016. Additional costs related to line movements, asset impairment and equipment charges, and other costs will be expensed as incurred. The total restructuring liability related to the June 2016 Plan was $1,569 at September 30, 2016.

The following table displays the planned restructuring and impairment charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through September 30, 2016:



		Actual costs
		incurred through
June 2016 Plan	Planned Costs	September 30, 2016
Workforce reduction	3,075	2,175
Equipment relocation	7,925	—
Asset impairment charge	3,700	—
Other charges	1,300	—
Restructuring and impairment charges	16,000	2,175

Total restructuring and impairment charges for the June 2016 Plan were as follows:



	Three Months Ended
	September 30, 2016	September 27, 2015
Restructuring and impairment charges	1,969	—



	Nine Months Ended
	September 30, 2016	September 27, 2015
Restructuring and impairment charges	2,175	—

Not included in restructuring and impairment charges, but directly attributable to the June 2016 Plan, is an increase in tax expense of $2,316 relating to increases in valuation allowances on deferred tax assets for state net operating losses and tax credits and the revaluation of U.S. deferred taxes as a result of a change in our expected future tax rate as discussed in Note 16.

In April 2014, CTS announced plans to restructure its operations and consolidate its Canadian operations into other existing CTS facilities as part of CTS’ overall plan to simplify its business model and rationalize its global footprint (“April 2014 Plan”).

During the second quarter of 2015, CTS management revised the April 2014 Plan. The revision added $4,250 in planned costs. Additional administrative and legal costs were expected to account for $1,300 of the additional restructuring and impairment charges. The remaining $2,950 in restructuring related charges are for additional costs related to equipment relocation, training, travel and shipping.

These restructuring actions, which were completed during 2015, impacted approximately 120 positions.

The following table displays the planned restructuring and restructuring-related charges associated with the April 2014 Plan, as well as a summary of the actual costs incurred through September 30, 2016:



			Actual costs
			incurred through
April 2014 Plan	Planned Costs		September 30, 2016
Inventory write-down	$	850	$	—
Equipment relocation	1,800		444
Other charges	1,400		113
Restructuring-related charges, included in cost of goods sold	$	4,050	$	557

Workforce reduction	$	4,200	$	4,423
Other charges, including pension termination costs	1,700		3,413
Restructuring and impairment charges	$	5,900	$	7,836

Total restructuring, impairment and restructuring related charges	$	9,950	$	8,393

Total restructuring, impairment and restructuring related charges under the April 2014 Plan were as follows:



	Three Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	152
Restructuring and impairment charges	—		2,025
Total restructuring, impairment, and restructuring related charges	$	—	$	2,177



	Nine Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	369
Restructuring and impairment charges	—		3,902
Total restructuring, impairment, and restructuring-related charges	$	—	$	4,271

Total restructuring liability related to the April 2014 Plan was $436 at September 30, 2016.

In June 2013, CTS announced a restructuring plan to simplify CTS’ global footprint by consolidating manufacturing facilities into existing locations (“June 2013 Plan”). The June 2013 Plan included the consolidation of operations from the U.K. manufacturing facility into the Czech Republic facility, the Carol Stream, Illinois manufacturing facility into the Juarez, Mexico facility and discontinuing manufacturing at the Singapore facility. Certain corporate functions were consolidated or eliminated as a result of the June 2013 Plan. These restructuring actions were completed in 2015 and resulted in the reduction of approximately 350 positions.

During the fourth quarter of 2014, CTS management revised the June 2013 Plan. The revision added $4,000 in planned costs. Settlement of the U.K. pension plan was expected to account for $2,000 of the added cost. The remaining $2,000 in restructuring and impairment charges were for severance costs and resulted in the reduction of approximately 130 additional positions throughout CTS businesses. The above actions were completed in 2015.

The following table displays the planned restructuring and restructuring-related charges associated with the June 2013 Plan and a summary of the actual costs incurred through September 30, 2016:



			Actual
	Planned		incurred through
June 2013 Plan	Costs		September 30, 2016
Inventory write-down	$	800	$	1,143
Equipment relocation	900		1,792
Other charges	100		702
Restructuring-related charges, included in cost of goods sold	$	1,800	$	3,637

Workforce reduction	$	10,150	$	9,615
Asset impairment charge	3,000		4,139
Other charges, including pension termination costs	7,650		10,205
Restructuring and impairment charges	$	20,800	$	23,959

Total restructuring and restructuring-related charges	$	22,600	$	27,596

Under the June 2013 Plan, total restructuring, impairment and restructuring related charges incurred were as follows:



	Three Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	—
Restructuring and impairment charges	—		348
Total restructuring, impairment, and restructuring-related charges	$	—	$	348



	Nine Months Ended
	September 30, 2016		September 27, 2015
Restructuring-related charges	$	—	$	75
Restructuring and impairment charges	—		1,327
Total restructuring, impairment, and restructuring-related charges	$	—	$	1,402

No remaining liability is recorded for the June 2013 Plan as of September 30, 2016.

The following table displays the restructuring liability activity for all plans for the period ended September 30, 2016:



Combined Plans
Restructuring liability at January 1, 2016	$	826
Restructuring and restructuring-related charges, excluding asset impairments and write-offs	2,175
Cost paid	(1,026		)
Other activity (1)	$	30
Restructuring liability at September 30, 2016	$	2,005

(1) Other activity includes asset impairments, write-offs of property, plant and equipment, the effects of currency translation and other charges that do not flow through restructuring expense.