Corporate Relocation Plan

On February 5, 2015, the Company announced a plan (the “Corporate Relocation Plan”) to close its Torrance, California facility and relocate its corporate headquarters, product development lab, and manufacturing and distribution operations from Torrance, California to a new facility housing these operations currently under construction in Northlake, Texas (the “New Facility”). Approximately 350 positions were impacted as a result of the Torrance Facility closure. The Company’s decision resulted from a comprehensive review of alternatives designed to make the Company more competitive and better positioned to capitalize on growth opportunities.

Based on current assumptions and subject to continued implementation of the Corporate Relocation Plan, the Company estimates that it will incur approximately $31 million in cash costs in connection with the exit of the Torrance Facility consisting of $18 million in employee retention and separation benefits, $5 million in facility-related costs and $8 million in other related costs. Expenses related to the Corporate Relocation Plan in the three months ended September 30, 2016 consisted of $0.4 million in employee retention and separation benefits, $2.2 million in facility-related costs including lease of temporary office space, costs associated with the move of the Company's headquarters and the relocation of certain distribution operations and $0.4 million in other related costs including travel, legal, consulting and other professional services. Facility-related costs also included $0.8 million in non-cash depreciation expense associated with the Torrance production facility resulting from the consolidation of coffee production operations with the Houston and Portland production facilities.

The following table sets forth the activity in liabilities associated with the Corporate Relocation Plan for the three months ended September 30, 2016:



(In thousands)	Balances, June 30, 2016		Additions		Payments		Non-Cash Settled		Adjustments		Balances, September 30, 2016
Employee-related costs(1)	$	2,342	$	400	$	1,146	$	—	$	—	$	1,596
Facility-related costs(2)	—		2,194		579		757		—		858
Other(3)	200		436		636		—		—		—
Total(2)	$	2,542	$	3,030	$	2,361	$	757	$	—	$	2,454
Current portion	$	2,542									$	2,454
Non-current portion	$	—									$	—
Total	$	2,542									$	2,454

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(1) Included in “Accrued payroll expenses” on the Company's consolidated balance sheets.

(2) Non-cash settled facility-related costs represent depreciation expense associated with the Torrance production facility resulting from the consolidation of coffee production operations with the Houston and Portland production facilities and included in "Property, plant and equipment, net" on the Company's consolidated balance sheets.

(3) Included in “Accounts payable” on the Company's consolidated balance sheets.

Since adoption of the Corporate Relocation Plan through September 30, 2016, the Company has recognized a total of $28.0 million of the estimated $31 million in aggregate cash costs including $16.6 million in employee retention and separation benefits, $4.5 million in facility-related costs related to the temporary office space, costs associated with the move of the Company's headquarters, relocation of the Company’s Torrance operations and certain distribution operations and $6.8 million in other related costs. The remainder is expected to be recognized in the second and third quarters of fiscal 2017. The Company also recognized from inception through September 30, 2016 $2.0 million in non-cash depreciation expense associated with the Torrance production facility. The Company may incur certain pension-related costs in connection with the Corporate Relocation Plan.

The following table sets forth the activity in liabilities associated with the Corporate Relocation Plan from the time of adoption of the Corporate Relocation Plan through the three months ended September 30, 2016:



(In thousands)	Balances, June 30, 2014		Additions		Payments		Non-Cash Settled		Adjustments		Balances, September 30, 2016
Employee-related costs(1)	$	—	$	16,643	$	15,047	$	—	$	—	$	1,596
Facility-related costs(2)	—		6,535		3,664		2,013		—		858
Other(3)	—		6,817		6,817		—		—		—
Total(2)	$	—	$	29,995	$	25,528	$	2,013	$	—	$	2,454

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(1) Included in “Accrued payroll expenses” on the Company's consolidated balance sheets.

(3) Included in “Accounts payable” on the Company's consolidated balance sheets.