Consolidation Program and Restructuring Charge

3 Months Ended

Jun. 30, 2013

Consolidation Program and Restructuring Charge [Abstract]

Consolidation Program and Restructuring Charge

(9) Consolidation Program and Restructuring Charge

In the fourth quarter of 2012 the Company announced a multi-year cost savings initiative. This initiative includes workforce reductions, facility consolidations, process improvements and other cost savings. Through June 30, 2013, the Company has incurred pre-tax restructuring charges of $67,433. Of these charges, $36,045 was recorded during the fourth quarter of 2012 and $31,388 was recorded during the first half of 2013, of which $28,926 and $2,462 were recorded in the first and second quarters of 2013, respectively.

During the fourth quarter of 2012, charges included severance costs of $34,888 related to the planned reduction of approximately 560 employees and $1,157 of facility costs related to the commencement of this program. Charges for the first half of 2013 totaled $31,388 and were comprised of $24,238 in severance costs, $5,421 in non-cash pension charges, and $1,729 in costs associated with exiting a contractual obligation.  Severance costs recognized during the first half of 2013 primarily related to a voluntary retirement program for certain eligible employees in the United States. Non-cash pension charges included $2,959 which resulted from a curtailment charge related to the Company's U.S. pension plans during the first quarter of 2013 and $2,462 of partial settlement charges as a result of the amount of lump sum pension distributions to date during 2013, primarily related to restructuring activities. Costs associated with exiting a contractual obligation were paid during the quarter ended March 31, 2013. The total 2013 charge of $31,388 was recorded in the consolidated statements of operations as follows:  $8,493 – cost of sales; $3,515 – product development; and $19,380 – selling, distribution and administration.  

The following is a summary of the severance and other personnel charges related to the Company's cost savings initiative included in accrued liabilities as of June 30, 2013:

Balance at December 30, 2012	$	34,888
2013 Charges		24,238
Payments		(16,145	)
Balance at June 30, 2013	$	42,981

The six months ended July 1, 2012 also included severance charges of $11,130 associated with certain business functions.  These charges were recognized in the consolidated statement of operations as follows: $2,764 – cost of sales; $2,479 – product development; and $5,887 – selling, distribution and administration.  

See Note 11 for information by segment.