On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation.

As part of the One Shire reorganization, the Company undertook a review of all of its pipeline programs and identified those projects that fit with the Company's new strategic direction and have an acceptable likelihood of success. Shire's pre-clinical investments are now primarily focused on Rare Diseases, meaning that the majority of other pre-clinical projects have been discontinued. Several clinical programs have also been discontinued. The impact of the prioritization and rationalization of the Company's development portfolio means many of the R&D programs previously run from Basingstoke, UK have ceased. Taken together with the overall streamlining of the R&D organization, this has resulted in a significant number of R&D roles in Basingstoke being eliminated and some positions being re-located. A small number of functional roles that support R&D in Basingstoke have also been affected.

In addition the Company has also relocated its international commercial hub from Nyon, Switzerland to Zug, Switzerland. All Nyon-based employees have been impacted by the One Shire transition and the move to Zug. Shire is now in the new Zug office and is providing employees with a reasonable period of time to manage their relocations.

In the three and six months to June 30, 2014 the Company incurred reorganization costs totaling $45.8 million and $95.2 million respectively, relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $159.8 million have been incurred since May 2013. The One Shire reorganization is expected to be substantially completed by the end of 2014. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $55 million will be expensed as incurred during 2014.

The liability for reorganization costs arising from the One Shire business reorganization at June 30, 2014 is as follows:



	Opening liability	Amount		Closing liability at
	at January 1,	charged to re-		June 30,
	2014	organization	Paid/Utilized	2014
	$'M	$'M	$'M	$'M
	___________	____________	___________	___________

Involuntary termination benefits	15.3	83.7	(92.9)	6.1
Other reorganization costs	9.5	11.5	(20.2)	0.8
	___________	___________	___________	___________
	24.8	95.2	(113.1)	6.9
	___________	___________	___________	___________

At June 30, 2014 the closing reorganization cost liability was recorded within accounts payable and accrued expenses ($6.9 million).