10.	Restructuring

In March of this year, the Company announced a restructuring plan (2014 Restructuring Plan) related to eliminating underperforming operations, consolidating manufacturing facilities and improving efficiencies within the Company. The Company anticipates that the 2014 Restructuring Plan will impact several facilities and will generate cost savings estimated to be approximately $30 million per year, with incremental savings expected to be achieved over the next few years and the full benefit expected to be achieved after 2015. The Company also anticipates that the 2014 Restructuring Plan will include a reduction in headcount by approximately 300 employees, primarily direct and indirect manufacturing labor, and pre-tax charges of approximately $120 million to $130 million. In connection with the 2014 Restructuring Plan, less than 10 employees were terminated as of June 30, 2014 and limited savings were recognized by June 30, 2014.

The Company determined that certain long-lived assets, including land, buildings and certain pieces of equipment associated with the identified underperforming operations were impaired. As a result, the Company has reduced the carrying amounts of these assets to approximately $28.1 million, their aggregate respective fair values, which were determined based on independent market valuations for these assets.

For the three and six months ended June 30, 2014, the Company recorded restructuring and other costs of $13.0 million ($10.7 million after-tax) and $65.7 million ($48.2 million after-tax). The Company determined that was the appropriate amount of restructuring and other costs to record in each period in accordance with GAAP and based on an internal review of the affected facilities and consultation with legal and other advisors. Included within the restructuring and other costs, the Company incurred $2.2 million and $3.1 million, respectively, related to the 2014 proxy contest during the three and six months ended June 30, 2014. These costs are included in Other costs in the table below and mainly relate to proxy solicitation, public relations, technical consulting and legal services.

Detail of the restructuring and other costs recorded in selling and administrative expenses in the Corporate & Other segment during the three- and six-month periods ended June 30, 2014 are as follows:

	Three Months Ended,		Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2014
Employee separation	$	1,256	$	13,578
Long-lived asset impairment		9,212		47,872
Intangibles impairment		-		1,049
Gain on asset sales		-		(602	)
Other costs ⁽¹⁾		2,511		3,804

Total	$	12,979	$	65,701

(1)

Other costs include decommissioning costs, professional services, personnel moving costs, other related costs and 2014 proxy contest costs.

The Company expects to incur approximately $30 million to $35 million of additional restructuring costs by the end of December 2014 and $25 million to $30 million of additional restructuring costs by the end of 2016, consisting primarily of employee separations, asset impairments, and other restructuring related costs.

For the three and six months ended June 30, 2013, the Company recorded restructuring costs of $6.6 million ($4.7 million after-tax) and $19.4 million ($14.1 million after-tax), respectively, related to the 2013 restructuring program to relocate the Flavors & Fragrances Group headquarters to Chicago, as well as a profit improvement plan across all segments of the Company. Detail of the restructuring expenses recorded in Corporate & Other segment is as follows:

Three months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	2,428	$	-	$	2,428
Long-lived asset impairment		880		-		880
Write-down of inventory		-		277		277
Other costs⁽¹⁾		3,057		-		3,057

Total	$	6,365	$	277	$	6,642

Six months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	11,340	$	-	$	11,340
Long-lived asset impairment		3,406		-		3,406
Write-down of inventory		-		872		872
Other costs⁽¹⁾		3,797		-		3,797

Total	$	18,543	$	872	$	19,415

⁽¹⁾

Other costs include decommissioning, professional services, personnel (other than employee separations) and moving related costs.

The Company evaluates performance based on operating income of each segment before restructuring costs. The restructuring and other costs are recorded in the Corporate & Other segment. The following table summarizes the restructuring and other costs by segment that the costs relate to for the three and six months ended June 30, 2014 and 2013:

	Three Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	9,068	$	5,951
Color		1,411		600
Corporate & Other		2,500		91

Total	$	12,979	$	6,642

	Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	54,051	$	14,490
Color		7,950		4,310
Corporate & Other		3,700		615

Total	$	65,701	$	19,415

The following table summarizes the accrual for the restructuring and other charges for the six-month period ended June 30, 2014:

	Employee			Asset Related
(In thousands)	Separations			and Other			Total
Balance as of December 31, 2013	$	4,562		$	1,588		$	6,150
Restructuring and other costs		13,578			52,123			65,701
Gain on sale of assets		-			602			602
Cash spent		(2,831	)		(1,808	)		(4,639	)
Reduction of assets		-			(48,921	)		(48,921	)
Translation adjustment		(87	)		-			(87	)

Balance as of June 30, 2014	$	15,222		$	3,584		$	18,806