Restructuring Charges and Other Exit-Related Costs

In the fourth quarter of fiscal 2012, the Company undertook a number of restructuring initiatives designed to extract greater synergies from the significant acquisitions and technology investments made in recent years, achieve further integration between MRB and APB, and realign the Company’s organization to support its future growth and decrease operating expenses by streamlining functions and reducing organizational layers (the “Q4'12 Plan”).

In the first quarter of fiscal 2014, the Company announced and began implementing additional restructuring initiatives to further reduce its annual operating expenses through headcount reductions, productivity improvements, procurement savings and other operational efficiencies (the “Q1'14 Plan”). The Company expects to incur restructuring charges of $6 million in connection with these initiatives, with substantially all of the charges incurred by the end of fiscal 2014.

The Company incurred restructuring charges associated with the Q4'12 Plan and Q1'14 Plan of $6 million, $8 million and $5 million in fiscal 2014, 2013 and 2012, respectively. The remaining charges are expected to be incurred by the end of fiscal 2017. The vast majority of the restructuring charges require the Company to make cash payments.

In addition to the restructuring charges recorded in connection with these initiatives, the Company incurred other exit-related costs of $1 million, consisting of asset impairments related to site closures.

Restructuring charges and other exit-related costs were comprised of the following (in thousands):



	Year Ended August 31,
	2014							2013						2012
	Q4’12 Plan			Q1’14 Plan		Total Charges		Q4’12 Plan		Q1’14 Plan		Total Charges		Q4’12 Plan		Q1’14 Plan		Total Charges
Restructuring charges:
Severance costs	$	(44	)	$	4,651	$	4,607	$	2,443	$	—	$	2,443	$	2,741	$	—	$	2,741
Contract termination costs	675			709		1,384		3,229		—		3,229		440		—		440
Other restructuring costs	—			410		410		2,234		—		2,234		1,831		—		1,831
Total restructuring charges	631			5,770		6,401		7,906		—		7,906		5,012		—		5,012
Other exit-related costs:
Asset impairments	—			566		566		—		—		—		—		—		—
Total exit-related costs	—			566		566		—		—		—		—		—		—
Total restructuring charges and exit-related costs	$	631		$	6,336	$	6,967	$	7,906	$	—	$	7,906	$	5,012	$	—	$	5,012



	Total Charges
	Q4’12 Plan		Q1’14 Plan		Total
Total restructuring charges to date	$	13,549	$	5,770	$	19,319
Total expected restructuring charges	$	13,600	$	6,150	$	19,750

The following illustrates the reconciliation of the restructuring liability by major type of costs for the years ended August 31, 2014 and 2013 (in thousands):



	Q4’12 Plan
	Balance 8/31/2012		Charges		Payments and Other			Balance 8/31/2013		Charges			Payments and Other			Balance 8/31/2014
Severance costs	$	2,477	$	2,443	$	(4,642	)	$	278	$	(44	)	$	(234	)	$	—
Contract termination costs	414		3,229		(616		)	3,027		675			(2,713		)	989
Other restructuring costs	64		2,234		(2,298		)	—		—			—			—
Total	$	2,955	$	7,906	$	(7,556	)	$	3,305	$	631		$	(2,947	)	$	989



	Q1’14 Plan
	Balance 8/31/2013		Charges		Payments and Other			Balance 8/31/2014
Severance costs	$	—	$	4,651	$	(3,982	)	$	669
Contract termination costs	—		709		(209		)	500
Other restructuring costs	—		410		(410		)	—
Total	$	—	$	5,770	$	(4,601	)	$	1,169



	Total Charges to Date		Total Expected Charges
Severance costs	$	9,791	$	9,800
Contract termination costs	5,053		5,400
Other restructuring costs	4,475		4,550
Total	$	19,319	$	19,750

Restructuring charges and other exit-related costs by reporting segment were as follows (in thousands):



	Fiscal 2012 Charges		Fiscal 2013 Charges		Fiscal 2014 Charges		Total Charges to Date		Total Expected Charges
Restructuring charges:
Metals Recycling Business	$	1,660	$	2,748	$	4,271	$	8,679	$	9,050
Auto Parts Business	233		239		1,057		1,529		1,550
Unallocated (Corporate)	3,119		4,919		1,073		9,111		9,150
Total restructuring charges	5,012		7,906		6,401		19,319		19,750
Other exit-related costs:
Metals Recycling Business	—		—		566		566
Total exit-related costs	—		—		566		566
Total restructuring charges and other exit-related costs	$	5,012	$	7,906	$	6,967	$	19,885

The Company does not allocate restructuring charges and other exit-related costs to the segments' operating results because management does not include this information in its measurement of the performance of the operating segments.