
	SPECIAL CHARGES

In the fourth quarter 2013, we announced a reorganization in parts of the Europe, Middle East and Africa (EMEA) region to further improve EMEA’s profitability and process standardization while supporting its competitiveness and long-term growth. These actions include the closure of our current sales and distribution operations in The Netherlands, with the transition to a third-party distributor model to continue to sell the Silvo brand, as well as actions intended to streamline selling, general and administrative activities throughout EMEA, including the centralization of shared service activity across the region into Poland. As we announced in the fourth quarter of 2013, we expect to record a total of approximately $27 million of cash and non-cash charges related to this reorganization.

In the fourth quarter of 2013, we recorded $25.0 million of special charges related to this reorganization. During the third quarter of 2014, we recorded an additional $1.0 million of special charges related to this reorganization, consisting of employee severance of $0.5 million and other cash exit costs of $0.5 million. We expect to record the remaining special charges and to complete the actions by 2015. We expect cash expenditures to implement these actions to approximate $19 million, with the bulk of the spending occurring in 2014 and early 2015, and to realize related annual cost savings of approximately $10 million by 2015. Of the $25.0 million of special charges recognized in 2013, $15.9 million related to employee severance, $6.4 million to asset write-downs, and $2.7 million to other exit costs. The $6.4 million asset write-down in 2013 related to an impairment charge for the reduction in the value of our Silvo brand name in The Netherlands.

Of the $25.0 million of special charges recorded in 2013, $22.2 million have been recorded in the consumer business segment and $2.8 million have been recorded in the industrial business segment. The $1.0 million of special charges recognized in the third quarter of 2014 related to the EMEA reorganization have been recorded in the consumer business segment.

The following table outlines the major components of accrual balances relating to the special charges associated with the EMEA reorganization as of November 30, 2013 and August 31, 2014 (in millions):



	Employee severance			Other exit costs			Total
Balance as of November 30, 2013	$	15.9		$	2.7		$	18.6
Special charges	0.5			0.5			1.0
Amounts utilized	(6.1		)	(1.7		)	(7.8		)
Balance as of August 31, 2014	$	10.3		$	1.5		$	11.8

Also during the third quarter of 2014, we recorded special charges in the amount of $1.3 million, principally related to employee severance, to realign certain manufacturing operations in the U.S. industrial business. We expect that this action will be completed by 2015 and, upon completion, generate annual savings of approximately $2.3 million.