Restructuring Charges and Other Exit-Related Costs

The Company has implemented a number of restructuring initiatives designed to reduce operating expenses and improve profitability and to achieve further integration and synergistic cost efficiencies in its operating platform. The charges incurred by the Company related to these restructuring initiatives pertain to four separate plans: the plans announced in the fourth quarter of fiscal 2012 (the “Q4’12 Plan”), the “Q1’14 Plan,” the “Q1’15 Plan” and the "Q2'15 Plan."

The Q4'12 Plan was designed to achieve further integration between the Company's existing businesses and realign the Company’s organization to support its future growth and decrease operating expenses by streamlining functions and reducing organizational layers.

The Q1'14 Plan was designed to reduce the Company's annual operating expenses through headcount reductions, productivity improvements, procurement savings and other operational efficiencies.

The Q1'15 Plan included additional productivity initiatives to improve profitability through a combination of revenue drivers and cost reduction initiatives.

At the end of the second quarter of fiscal 2015, the Company initiated additional restructuring and exit-related initiatives by undertaking strategic actions consisting of idling underutilized metals recycling assets and initiating the closure of seven auto parts stores to more closely align the Company's business to the prevalent market conditions. The Company expanded these initiatives in April 2015 by announcing measures aimed at further reducing the Company's annual operating expenses, primarily selling, general and administrative expenses, at Corporate and AMR through headcount reductions, reducing organizational layers, consolidating shared service functions and other non-headcount measures. Collectively, these initiatives are referred to as the Q2'15 Plan.

The Company incurred restructuring charges of $11 million, $6 million and $8 million in fiscal 2015, 2014 and 2013, respectively. The remaining charges relating to these initiatives are expected to be substantially incurred by the end of fiscal 2017. The significant 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 $7 million and $1 million in fiscal 2015 and 2014, respectively, consisting of asset impairments and accelerated depreciation due to shortened useful lives in connection with site closures.

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



	Year Ended August 31,
	2015									2014							2013
	Q1’14 Plan			Q1’15 Plan		Q2’15 Plan		Total Charges		Q4’12 Plan			Q1’14 Plan		Total Charges		Q4’12 Plan		Total Charges
Restructuring charges:
Severance costs	$	(37	)	$	428	$	5,330	$	5,721	$	(44	)	$	4,651	$	4,607	$	2,443	$	2,443
Contract termination costs	377			—		1,245		1,622		675			709		1,384		3,229		3,229
Other restructuring costs	—			1,223		2,048		3,271		—			410		410		2,234		2,234
Total restructuring charges	340			1,651		8,623		10,614		631			5,770		6,401		7,906		7,906
Other exit-related costs:
Asset impairments and accelerated depreciation	—			—		6,502		6,502		—			566		566		—		—
Total other exit-related costs	—			—		6,502		6,502		—			566		566		—		—
Total restructuring charges and other exit-related costs	$	340		$	1,651	$	15,125	$	17,116	$	631		$	6,336	$	6,967	$	7,906	$	7,906

Restructuring charges and other exit-related costs included in continuing operations								$	13,008						$	6,830			$	7,906
Restructuring charges and other exit-related costs included in discontinued operations								$	4,108						$	137			$	—



	Total Charges
	Q4’12 Plan		Q1’14 Plan		Q1’15 Plan		Q2’15 Plan		Total
Total restructuring charges to date	$	13,549	$	6,110	$	1,651	$	8,623	$	29,933
Total expected restructuring charges	$	13,549	$	6,110	$	1,651	$	10,500	$	31,810

The following illustrates the reconciliation of the restructuring liability by major type of costs for the years ended August 31, 2015 and 2014 (in thousands):



	Q2’15 Plan
	Balance 8/31/2014		Charges		Payments and Other			Balance 8/31/2015
Severance costs	$	—	$	5,330	$	(4,104	)	$	1,226
Contract termination costs	—		1,245		75			1,320
Other restructuring costs	—		2,048		(2,048		)	—
Total	$	—	$	8,623	$	(6,077	)	$	2,546



	All Other Plans
	Balance 8/31/2013		Charges		Payments and Other			Balance 8/31/2014		Charges		Payments and Other			Balance 8/31/2015
Severance costs	$	278	$	4,607	$	(4,216	)	$	669	$	391	$	(1,060	)	$	—
Contract termination costs	3,027		1,384		(2,922		)	1,489		377		(1,504		)	362
Other restructuring costs	—		410		(410		)	—		1,223		(1,223		)	—
Total	$	3,305	$	6,401	$	(7,548	)	$	2,158	$	1,991	$	(3,787	)	$	362

Due to the immateriality of the activity and liability balances for each of the Q4'12 Plan, Q1'14 Plan and Q1'15 Plan, the reconciliation of the restructuring liability for these plans is provided in aggregate.



	Total Charges to Date		Total Expected Charges
Severance costs	$	15,512	$	17,000
Contract termination costs	6,675		6,810
Other restructuring costs	7,746		8,000
Total	$	29,933	$	31,810

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



	Fiscal 2015 Charges		Fiscal 2014 Charges		Fiscal 2013 Charges		Total Charges to Date		Total Expected Charges
Restructuring charges:
Auto and Metals Recycling	$	6,944	$	5,191	$	2,987	$	17,016	$	18,300
Unallocated (Corporate)	2,228		1,073		4,919		11,339		11,860
Discontinued operations	1,442		137		—		1,578		1,650
Total restructuring charges	10,614		6,401		7,906		29,933		31,810
Other exit-related costs:
Auto and Metals Recycling	3,836		566		—		4,402
Discontinued operations	2,666		—		—		2,666
Total exit-related costs	6,502		566		—		7,068
Total restructuring charges and other exit-related costs	$	17,116	$	6,967	$	7,906	$	37,001

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.