11. Restructuring and Other

During the three and six months ended June 30, 2013 and 2012, cost reduction actions were taken to lower our quarterly operating expense run rate as we analyzed our cost structure. We announced restructuring plans to better align our costs with revenue levels and to re-align our cost structure following our business acquisitions. These charges primarily relate to cost reduction actions taken during the first quarter of 2013 to lower our quarterly operating expense run rate in the Fiery operating segment, targeted reductions in the Industrial Inkjet operating segment, and the integration of Productivity Software head count with acquired entities. Restructuring and other consists primarily of restructuring, severance, retention, facility downsizing and relocation, and acquisition integration expenses. Our restructuring and other plans are accounted for in accordance with ASC 420, Exit or Disposal Cost Obligations, ASC 712, Compensation – Non-Retirement Postemployment Benefits, and ASC 820.

We recorded restructuring and other charges of $1.2 and $3.1 million for the three and six months ended June 30, 2013, respectively, and $1.2 and $2.3 million for the three and six months ended June 30, 2012, respectively, primarily consisting of restructuring, severance, retention, and charges to downsize or relocate our facilities. Restructuring and severance charges of $0.4 and $1.4 million related to head count reductions of 28 and 62 for the three and six months ended June 30, 2013, respectively, and $0.3 and $1.1 million related to head count reductions of 16 and 44 for the three and six months ended June 30, 2012, respectively. Severance costs include severance payments, related employee benefits, and outplacement or relocation costs. Integration expenses of $0.5 and $1.1 million were incurred during the three and six months ended June 30, 2013, respectively, primarily related to the Metrics, Cretaprint, OPS, and Technique acquisitions, and $0.7 and $0.8 million was incurred during the three and six months ended June 30, 2012, respectively, primarily related to the Metrics, Cretaprint, and Prism Group Holdings Limited (“Prism”) acquisitions.

Retention expenses of $0.2 and $0.5 million were recognized during the three and six months ended June 30, 2013 and 2012, respectively, associated with the Cretaprint acquisition. Facilities restructuring costs of $0.1 and $0.2 million were incurred during the three and six months ended June 30, 2013, respectively, primarily related to the relocation of our corporate headquarters, Japan, Belgium, and certain manufacturing facilities.

Restructuring and other reserve activities for the six months ended June 30, 2013 and 2012 are summarized as follows (in thousands):


	Six months ended June 30,
	2013			2012
Reserve balance at January 1,	$	1,670		$	1,870
Restructuring charges		1,084			785
Other charges		2,053			1,465
Non-cash acquisition-related retention costs		(465	)		(456	)
Cash payments		(3,006	)		(2,152	)

Reserve balance at June 30,	$	1,336		$	1,512