RESTRUCTURING CHARGES

Integration Program

In January 2014, the Company announced that it was implementing actions to integrate Colomer’s operations into the Company’s business, as well as additional restructuring actions identified to reduce costs across the Company’s businesses (all such actions, together, the “Integration Program”).

The Company expects to recognize total restructuring charges, capital expenditures and related non-restructuring costs under the Integration Program of approximately $50 million in the aggregate over the periods described below.

The Integration Program is designed to deliver cost reductions throughout the combined organization by generating synergies and operating efficiencies within the Company’s global supply chain and consolidating offices and back office support, and other actions designed to reduce SG&A expenses. Certain actions that are part of the Integration Program are subject to consultations with employees, works councils or unions and governmental authorities. The Company expects to substantially complete the Integration Program by the end of 2015.

The approximately $50 million of total expected non-restructuring costs, capital expenditures and restructuring charges under the Integration Program referred to above consist of the following:


1.	$5.9 million and $12.5 million and of non-restructuring integration costs recognized during 2014 and 2013, respectively. Such costs have been reflected within acquisition and integration costs in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income and are related to combining Colomer’s operations into the Company’s business;


2.	Expected integration-related capital expenditures of approximately $7 million, $4.4 million of which has been paid during 2014 with the remaining balance expected to be paid in 2015; and


3.	Expected total restructuring and related charges of approximately $25 million, $20.1 million of which was recognized during 2014 with the remaining charges expected to be recognized in 2015. A summary of the restructuring and related charges for the Integration Program incurred through 2014 and those expected to be incurred in 2015, are as follows:



	Restructuring Charges and Other, Net
	Employee Severance and Other Personnel Benefits		Other		Total Restructuring Charges		Inventory Write-offs and Other Manufacturing-Related Costs (a)		Other Charges (b)		Total Restructuring and Related Charges
Charges incurred through December 31, 2014	$	17.3	$	1.6	$	18.9	$	0.6	$	0.6	$	20.1
Total expected charges	$	18.0	$	3.0	$	21.0	$	2.0	$	2.0	$	25.0


^(a)	Inventory write-offs and other manufacturing-related costs are recorded within cost of sales within the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.


^(b)	Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.

Of the $20.1 million of restructuring and related charges recognized in connection with the Integration Program in 2014, $10.2 million related to the Consumer segment and $9.9 million related to the Professional segment.

The Company expects that cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately $24 million, of which $9.6 million was paid during 2014, and the majority of the remaining balance of $14.4 million is expected to be paid in 2015.

December 2013 Program

In December 2013, the Company announced restructuring actions that included exiting its business operations in China, as well as implementing other immaterial restructuring actions outside the U.S., which are expected to generate other operating efficiencies (the "December 2013 Program"). These restructuring actions resulted in the Company eliminating approximately 1,100 positions in 2014, primarily in China, which included eliminating in the first quarter of 2014 approximately 940 beauty advisors retained indirectly through a third-party agency. The charges incurred for the December 2013 Program relate entirely to the Consumer segment.

A summary of the restructuring and related charges incurred during 2014 in connection with the December 2013 Program are as follows:



	Restructuring Charges and Other, Net
	Employee Severance and Other Personnel Benefits			Other			Total Restructuring Charges			Allowances and Returns			Inventory Write-offs			Other Charges		Total Restructuring and Related Charges
Charges incurred through December 31, 2013	$	9.1		$	0.5		$	9.6		$	7.4		$	4.0		$	0.4	$	21.4
Adjustments recorded for the year ended December 31, 2014 ^(a)	(0.5		)	(0.2		)	(0.7		)	(0.9		)	(0.9		)	—		(2.5		)
Cumulative charges incurred through December 31, 2014	$	8.6		$	0.3		$	8.9		$	6.5		$	3.1		$	0.4	$	18.9
Total expected charges	$	8.6		$	0.3		$	8.9		$	6.5		$	3.1		$	0.4	$	18.9

^(a)

Of the $2.5 million adjustment for 2014 related to the December 2013 Program, $2.3 million relates to the Company's exit of its business operations in China which were recorded within income (loss) from discontinued operations, net of taxes. See Note 4, "Discontinued Operations," for further discussion. The remaining $0.2 million of such adjustment was recorded in restructuring charges and other, net within income from continuing operations, net of taxes.

The Company expects net cash payments related to the December 2013 Program to total approximately $17 million, of which $15.5 million was paid during 2014, $0.1 million was paid in 2013, and the remaining balance of $1.4 million is expected to be paid in 2015.

September 2012 Program

In September 2012, the Company announced a restructuring (the “September 2012 Program”), which primarily involved the Company exiting its owned manufacturing facility in France and its leased manufacturing facility in Maryland; rightsizing its organizations in France and Italy; and realigning its operations in Latin America and Canada. The charges incurred related to the September 2012 Program relate entirely to the Consumer segment.

Cumulative charges of $27.2 million were recognized in connection with the September 2012 program, $24.1 million of which was recorded during 2012 and $3.1 million was recorded in 2013. Total net cash payments of $25.1 million were paid in connection with the September 2012 Program, $4.0 million of which was paid during 2014, $17.3 million was paid in 2013 and $3.8 million was paid in 2012.

Other Immaterial Actions

In 2014, the Company recorded net charges totaling $2.7 million of restructuring and related charges, for other immaterial restructuring actions within both the Consumer and Professional segments, due to $5.3 million of charges primarily related to employee-related costs, partially offset by a $2.6 million gain related to the sale of property, plant and equipment.

Restructuring Reserve

The related liability balance and activity for each of the Company's restructuring programs as summarized above is presented as follows:



									Utilized, Net
	Balance Beginning of Year		(Income) Expense, Net			Foreign Currency Translation			Cash			Non-cash			Balance End of Year
2014
Integration Program:
Employee severance and other personnel benefits	$	—	$	17.3		$	(0.1	)	$	(7.6	)	$	—		$	9.6
Other	—		1.6			—			(1.2		)	(0.3		)	0.1
December 2013 Program:
Employee severance and other personnel benefits	9.0		(0.5		)	(0.2		)	(7.3		)	0.2			1.2
Other	0.5		(0.2		)	—			(0.3		)	—			—
September 2012 Program:
Employee severance and other personnel benefits	2.7		—			(0.1		)	(2.5		)	0.1			0.2
Other	1.5		—			—			(1.5		)	—			—
2014 Other immaterial actions:
Employee severance and other personnel benefits	—		5.0			(0.1		)	(2.0		)	—			2.9
Other	—		0.2			—			(0.2		)	—			—
Total restructuring reserve	$	13.7	$	23.4		$	(0.5	)	$	(22.6	)	$	—		$	14.0

Gain on sale of property, plant and equipment for 2014 other immaterial actions			(2.6		)
Portion of restructuring benefits recorded within income (loss) from discontinued operations ^(a)			0.5
Total restructuring charges and other, net, from continuing operations			$	21.3

2013
December 2013 Program:
Employee severance and other personnel benefits	$	—	$	9.1		$	—		$	(0.1	)	$	—		$	9.0
Other	—		0.5			—			—			—			0.5
September 2012 Program:
Employee severance and other personnel benefits	18.0		2.9			(0.1		)	(18.1		)	—			2.7
Other	0.9		2.3			—			(1.7		)	—			1.5
Lease exit	0.3		—			—			(0.3		)	—			—
Total restructuring reserve	$	19.2	14.8			$	(0.1	)	$	(20.2	)	$	—		$	13.7

Gain on sale of France facility			(2.5		)
Portion of restructuring charges recorded within (loss) income from discontinued operations ^(a)			(8.8		)
Total restructuring charges and other, net from continuing operations			$	3.5

^(a) Refer to Note 4, "Discontinued Operations" for additional information regarding the Company's exit of its business operations in China.

As of December 31, 2014, $13.7 million of the restructuring reserve balance was included within accrued expenses and other and $0.3 million was included within other long-term liabilities in the Company's Consolidated Balance Sheet. As of December 31, 2013, the entire restructuring reserve balance was included within accrued expenses and other in the Company's Consolidated Balance Sheet.