Restructuring and Integration Costs

2014 Sauflon Integration Plan

During the fiscal fourth quarter of 2014, in connection with the Sauflon acquisition, our CooperVision business unit initiated restructuring and integration activities to optimize operational synergies of the combined companies. These activities include workforce reductions, consolidation of duplicative facilities and product rationalization. We estimate that the total restructuring costs under this plan will be $125.0 million. These costs include approximately $103.0 million associated with assets, including product rationalization and related equipment disposals and accelerated depreciation, about $20.0 million associated with employee termination costs, and about $2.0 million associated with facility lease termination costs. We are substantially complete with activities related to operating expenses, and we expect to incur costs related to the manufacturing activities through the end of fiscal 2016.

In the three and nine month periods ended July 31, 2016, we recorded in cost of sales $8.7 million and $23.5 million of expense, respectively, arising from production-related asset disposals and accelerated depreciation on equipment primarily related to our hydrogel lenses, based on our review of products, materials and manufacturing processes of Sauflon. We recorded in cost of sales, employee termination costs of $0.4 million and $0.9 million in the three and nine month periods ended July 31, 2016, respectively. We recorded $0.1 million of employee termination costs and $0.2 million for lease termination costs in selling, general and administrative expense in the nine months ended July 31, 2016. We also recorded in research and development expense $0.1 million of employee termination costs in the nine months ended July 31, 2016. In addition, CooperVision incurred $10.0 million of integration costs included in operating expenses in the nine months ended July 31, 2016. CooperVision did not incur integration costs in the fiscal third quarter of 2016.

In the three and nine month periods ended July 31, 2015, we recorded in cost of sales $12.4 million and $26.2 million of expense, respectively, arising from production-related asset disposals and accelerated depreciation on equipment primarily related to our hydrogel lenses, based on our review of products, materials and manufacturing processes of Sauflon. In the three months ended July 31, 2015, we recorded in cost of sales $0.3 million of employee termination costs. In the three and nine months ended July 31, 2015, we reduced the accrued employee termination costs in selling, general and administrative expense by $2.3 million and $6.7 million, respectively, based on estimates of the expected costs and the results of voluntary terminations; and we recorded $0.3 million of expense for lease termination costs. In the three and nine months ended July 31, 2015, we recorded in research and development expense $0.2 million and $0.5 million of employee termination costs, respectively. In addition, CooperVision incurred $10.7 million and $24.7 million of integration costs in the three and nine months ended July 31, 2015, respectively, included in operating expenses.

A summary of the cumulative total restructuring costs by major component recognized to date as of July 31, 2016, is as follows:



(In millions)	Employee-related			Facilities-related		Product Rationalization		Total
Amounts incurred in:
Year ended October 31, 2014	$	20.3		$	0.5	$	15.3	$	36.1
Year ended October 31, 2015	(2.5		)	0.4		57.7		55.6
Nine months ended July 31, 2016	1.1			0.2		23.5		24.8
Cumulative amounts incurred as of July 31, 2016	$	18.9		$	1.1	$	96.5	$	116.5

The following table summarizes the restructuring activities by major component for the fiscal year ended October 31, 2015 and the nine months ended July 31, 2016:



(In millions)	Employee-related			Facilities-related			Product Rationalization			Total

Balance at October 31, 2014	$	19.9		$	0.5		$	—		$	20.4
(Reductions) additions during fiscal 2015	(2.5		)	0.4			57.7			55.6
Payments during the fiscal year	(9.0		)	(0.4		)	—			(9.4		)
Non-cash adjustments (a) (b)	0.2			(0.2		)	(57.7		)	(57.7		)
Balance at October 31, 2015	8.6			0.3			—			8.9
Additions during the nine months ended July 31, 2016	1.1			0.2			23.5			24.8
Payments during the nine months ended July 31, 2016	(4.9		)	(0.2		)	—			(5.1		)
Non-cash adjustments (a) (b)	(0.5		)	—			(23.5		)	(24.0		)
Balance at July 31, 2016	$	4.3		$	0.3		$	—		$	4.6

(a) Non-cash adjustments for employee-related and facilities-related costs represent currency translation adjustment.

(b) Non-cash adjustments for product rationalization represent equipment disposals, inventory write-offs and accelerated depreciation.