Restructuring

In July 2014, the Company announced a comprehensive restructuring program. The restructuring program, which builds on the Company's previously launched productivity and asset optimization plans, is focused on the closure of certain underperforming assets as well as the consolidation and realignment of other facilities. The Company is also implementing initiatives to reduce selling, general and administrative ("SG&A") expenses globally. During the first half of 2015, the Company continued with incremental restructuring actions including SG&A cost reductions and further asset optimization plans in North America and Europe. Costs incurred as part of the restructuring program related to the Company's Asia Pacific Operations are not included below as the costs associated with these exit or disposal activities are included within the results of discontinued operations. Total expected and aggregate restructuring costs related to the Asia Pacific Operations are $15 million and $14.8 million as of July 3, 2015, respectively. There are no restructuring costs related to the continuing operations of the Africa/Asia Pacific segment as of July 3, 2015.

As part of the restructuring program, in the second quarter of 2015, the Company completed the disposal of a subsidiary in Spain for cash consideration of $1.8 million. The pre-tax loss on the sale from the disposition in the quarter ended July 3, 2015 was $11.6 million. This sale does not represent a strategic shift; therefore, the results are not presented as discontinued operations. This loss is included as asset-related restructuring costs in the Europe segment in the three and six months ended July 3, 2015 and is recognized in the SG&A expenses caption in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company expects to incur approximately $210 million of pre-tax restructuring charges. The total expected costs are $25 million in the North America segment, $145 million in the Europe segment and $40 million in the Latin America segment. As of July 3, 2015, aggregate costs incurred are $14.4 million in the North America segment, $137.1 million in the Europe segment, and $34.7 million in the Latin America segment. For the three and six months ended July 3, 2015, the Company incurred charges of $19.2 million and $35.1 million, respectively. For the three and six months ended July 3, 2015, costs incurred were $3.7 million and $7.6 million in the North America segment, $12.4 million and $21.5 million in the Europe segment, and $3.1 million and $6.0 million in the Latin America segment, respectively. For the three and six months ended July 3, 2015, approximately $2.4 million and $11.5 million of these charges were recorded in cost of sales and $16.8 million and $23.6 million of these charges were recorded as SG&A expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), respectively. Restructuring costs incurred consist primarily of employee separation costs and asset-related costs to exit or realign facilities. The Company is also incurring other costs as outlined below.

Changes in the restructuring reserve and activity for the six months ended July 3, 2015 are below (in millions):



	Employee Separation Costs			Asset-Related Costs			Other Costs			Total
Total expected restructuring charges	$	65.0		$	120.0		$	25.0		$	210.0
Balance, December 31, 2014	$	32.4		$	—		$	1.0		$	33.4
Net provisions	12.2			14.0			8.9			35.1
Net benefits charged against the assets	(2.7		)	(14.0		)	(3.9		)	(20.6		)
Payments	(13.5		)	—			(4.0		)	(17.5		)
Foreign currency translation	(2.6		)	—			(0.1		)	(2.7		)
Balance, July 3, 2015	$	25.8		$	—		$	1.9		$	27.7
Total aggregate costs to date	$	50.5		$	118.2		$	17.5		$	186.2
Remaining expected restructuring charges	$	14.5		$	1.8		$	7.5		$	23.8

Employee Separation Costs

The Company recorded employee separation costs of $2.7 million and $12.2 million for the three and six months ended July 3, 2015, consisting of $2.7 million and $6.4 million in North America, $(0.2) million and $4.8 million in Europe, and $0.2 million and $1.0 million in Latin America, respectively.

Employee separation costs include severance, retention bonuses and pension costs. As of July 3, 2015, employee separation costs included severance charges for approximately 1,140 employees; approximately 900 of these employees were classified as manufacturing employees and approximately 240 of these employees were classified as non-manufacturing employees. The charges relate to involuntary separations based on current salary levels and past service periods and are either considered one-time employee termination benefits in accordance with ASC 420 - Exit or Disposal Cost Obligations or charges for contractual termination benefits under ASC 712 - Compensation - Nonretirement Postemployment Benefits.

Asset-Related Costs

The Company recorded asset-related costs of $12.8 million and $14.0 million in the three and six months ended July 3, 2015, respectively. The Company recorded long-lived asset impairment charges of $11.4 million and $10.8 million in Europe, and $1.4 million and $3.2 million in Latin America for the three and six months ended July 3, 2015, respectively.

Asset-related costs consist of both asset write-downs and the loss on the sale of a subsidiary in Spain as noted above. Asset write-downs relate to the establishment of a new fair value basis for assets to be classified as held-for-sale or to be disposed of, as well as asset impairment charges for asset groups to be held-and-used in locations which are being restructured and it has been determined the undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than their carrying value. Management will continue to evaluate the recoverability of the carrying amount of its long-lived assets as the restructuring program is executed.

To determine the fair value, a current appraisal of each impaired asset groups' machinery and equipment and real property, as applicable, was performed utilizing standard valuation approaches, which incorporate Level 3 inputs. The Company assesses impairment at the asset group level which represents the lowest level for which identifiable cash flows can be determined independent of other groups of assets and liabilities. The asset groups at the Company are primarily each manufacturing unit, unless the cash flows of the manufacturing unit are not independent due to shared production, distribution and sale of the finished product. The Company considered the expected net cash flows to be generated by the use of each asset group, as well as the expected cash proceeds from the disposition of the assets, if any, to determine fair value. The impairment charges were recorded in the Cost of sales caption in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company notes the plan to abandon a long-lived asset before the end of its previously estimated useful life is a change in accounting estimate per ASC 250 - Accounting Changes and Error Corrections. The annual depreciation impact from the asset write-downs and changes in estimated useful lives is immaterial.

Other Costs

The Company recorded other restructuring-type charges of $3.7 million and $8.9 million for the three and six months ended July 3, 2015, respectively. The other restructuring-type charges were $1.0 million and $1.2 million in North America, $1.2 million and $5.9 million in Europe, and $1.5 million and $1.8 million in Latin America, respectively.

Other restructuring-type charges are incurred as a direct result of the restructuring program. Such charges primarily include working capital write-downs not associated with normal operations, equipment relocation, termination of contracts and other costs.