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RESTRUCTURING

6 Months Ended

Jun. 30, 2011

3. RESTRUCTURING

CIMA restructuring

On January 15, 2008, we announced a restructuring plan under which we intend to (i) transition manufacturing activities at our CIMA LABS INC. (“CIMA”) facility in Eden Prairie, Minnesota, to our expanded manufacturing facility in Salt Lake City, Utah, and (ii) consolidate at CIMA’s Brooklyn Park, Minnesota, facility certain drug delivery research and development activities performed in Salt Lake City. The phased transition of manufacturing activities and the closure of the Eden Prairie facility are expected to be completed in 2012. The consolidation of drug delivery research and development activities at Brooklyn Park was completed in 2008. The plan is intended to increase efficiencies in manufacturing and research and development activities, reduce our cost structure and enhance competitiveness.

As a result of this plan, we will incur certain costs associated with exit or disposal activities. As part of the plan, we estimate that approximately 65 jobs will be eliminated in total, with approximately 175 net jobs eliminated at CIMA and approximately 110 net jobs added in Salt Lake City.

The total estimated pre-tax costs of the plan are as follows:

Severance costs		$14-16 million
Manufacturing and personnel transfer costs		$12–14 million
Total		$26-30 million

The estimated pre-tax costs of the plan are being recognized between 2008 and 2012 and are included in the United States segment. Through June 30, 2011, we have incurred a total of $22.0 million related to the restructuring plan.

In September 2010, we sold the Eden Prairie facility and certain associated equipment for proceeds of $4.7 million. Pursuant to the sales agreement, we are leasing the Eden Prairie facility and certain associated equipment from the buyer through December 31, 2012 with aggregate remaining lease payments totaling $1.5 million. Through June 30, 2011, we have incurred a total of $21.8 million in pre-tax, non-cash accelerated depreciation of plant and equipment related to the restructuring. We will continue to incur non-cash accelerated depreciation of equipment not associated with the sale through the completion of the restructuring project.

Total charges and payments related to the restructuring plan recognized in the consolidated statement of operations and included in the United States segment are as follows:

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Restructuring reserves, beginning of period	$	10,339		$	7,354		$	9,968		$	7,083
Severance costs	250			450			719			977
Manufacturing and personnel transfer costs	1,564			571			1,991			788
Payments	(535		)	(161		)	(1,060		)	(634		)
Restructuring reserves, end of period	$	11,618		$	8,214		$	11,618		$	8,214

- 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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