RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:

3 Months Ended

Jun. 30, 2011

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:

9.             RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES:

The Company records costs associated with employee terminations and other exit activity in accordance with applicable accounting standards when those costs become probable and are reasonably estimable.  The following table summarizes the restructuring activity for the three months ended June 30, 2011 (dollars in thousands):

	Associate-related reserves			Ongoing contract costs			Total
Balance at March 31, 2011	$	5,562		$	9,542		$	15,104
Payments	(4,284		)	(282		)	(4,566		)
Charges and adjustments	299			19			318
Balance at June 30, 2011	$	1,577		$	9,279		$	10,856

The above balances are included in accrued expense on the consolidated balance sheet.

Restructuring Plans

In fiscal 2011, the Company recorded $4.4 million in restructuring charges and adjustments included in gains, losses and other items in the consolidated statement of operations.  The expense included severance and other associate-related charges of $3.4 million, offset by adjustments to previous restructuring plans of $1.7 million, and executive leadership transition charges of $2.7 million.

The associate-related charges of $3.4 million resulted from the termination of associates in the United States, Australia, and Europe.  Of the $3.4 million accrued, $1.5 million remained accrued at June 30, 2011. These amounts are expected to be paid out during fiscal 2012.

The transition charges of $2.7 million resulted from the transition agreement between the Company and its Chief Executive Officer upon his resignation in March 2011.  According to the agreement, one lump sum payment equal to two times the Officer’s annual salary and bonus opportunity was to be paid by the Company.  The entire amount of $2.7 million was accrued at March 31, 2011 and was paid in full in April 2011.

As part of restructuring plans in fiscal 2008 and 2009, the Company recorded a total of $22.2 million in lease accruals included in gains, losses and other items in the consolidated statement of operations.  The lease accruals were evaluated under the accounting standards which govern exit costs.  These accounting standards require the Company to make an accrual for the liability for lease costs that will continue to be incurred without economic benefit to the Company upon the date that the Company ceases using the leased property.  On or before the date of the restructuring plan, the Company ceased using certain leased office facilities.  The Company attempts to sublease those facilities to the extent possible.  The Company established a liability for the fair value of the remaining lease payments, partially offset by the estimated sublease payments to be received over the course of those leases.  The fair value of these liabilities is based on a net present value model using a credit-adjusted risk-free rate.  These liabilities will be paid out over the remainder of the leased properties’ terms, of which the longest continues through November 2021.  Actual sublease terms may differ from the estimates originally made by the Company.  Any future changes in the estimates or in the actual sublease income could require future adjustments to the liability for these leases, which would impact net income in the period the adjustment is recorded.  The remaining amount accrued at June 30, 2011 is $9.3 million.