Restructuring and Other Special Charges

9 Months Ended

Dec. 31, 2011

RESTRUCTURING AND OTHER SPECIAL CHARGES

The following table presents the components of restructuring and other special charges:



	Three Months Ended		Nine Months Ended
(In thousands)	December 31, 2011		December 31, 2011
Restructuring costs	$	748	$	14,078
Other related costs	1,683		1,683
Asset impairment charge (Note 18)	—		2,500
Total restructuring and other special charges	$	2,431	$	18,261

In May 2011, the Company announced the alignment of its twelve regional distribution companies into four new divisions, and the consolidation of its regional company accounting and certain administrative functions into four newly created Business Support Centers ("BSCs"). Each of the Company’s twelve regional distribution companies operated (prior to conversion to SAP) or operates its own accounting and administrative functions. Enabled by the Company’s conversion to a single information platform across all of its regional companies as part of the SAP implementation, the restructuring will allow Airgas to more effectively utilize its resources across regional company boundaries and form an operating structure that will help Airgas leverage the full benefits of its new SAP platform.

As a result of the realignment, the Company recorded a $13.3 million restructuring charge for severance benefits under the Airgas, Inc. Severance Pay Plan during the three months ended June 30, 2011. The charge related to the announced workforce reduction of regional company support functions. The Company expects to pay severance benefits to affected employees through fiscal 2013. During the three months ended December 31, 2011, the Company recorded an additional $0.7 million in restructuring costs, primarily related to exit costs for the early termination of a lease obligation. For the nine months ended December 31, 2011, total restructuring costs of $14.1 million were recorded.

The activity in the accrued liability balances associated with the restructuring plan was as follows for the nine months ended December 31, 2011:



(In thousands)	Severance Costs			Facility Exit and Other Costs			Total
Balance at March 31, 2011	$	—		$	—		$	—
Restructuring charges	13,330			748			14,078
Cash payments and other adjustments	(4		)	(137		)	(141		)
Balance at December 31, 2011	$	13,326		$	611		$	13,937

Of the $13.9 million in accrued restructuring costs at December 31, 2011, $10.3 million was included in accrued expenses and other current liabilities and $3.6 million was included in other non-current liabilities on the Company’s Consolidated Balance Sheets. The restructuring costs were not allocated to the Company’s business segments (see Note 14).

For the three months ended December 31, 2011, the Company also incurred $1.7 million of other costs related to the divisional realignment. These costs primarily related to transition staffing for the BSCs and legal costs associated with the realignment.

For the year ending March 31, 2012 (which is expected to be the most significant expense year related to the restructuring plan), the Company expects to incur total restructuring and other related costs of approximately $21 million, of which $15.8 million was recorded during the nine months ended December 31, 2011, primarily for estimated severance benefits. The remaining costs expected to be recorded during the year ending March 31, 2012 are for transition staffing, legal, relocation and other costs. The realignment is expected to be completed in fiscal 2013, during which year the Company expects to incur additional costs, primarily related to transition staffing, legal, relocation and other costs.

The Company also recorded a special charge of $2.5 million related to a fixed asset impairment during the three months ended September 30, 2011 - see Note 18 for further information.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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