Restructuring and Asset Impairment Charges

During the quarter ended March 31, 2015, the Company announced the first phase of a global restructuring plan focusing on efficiency and cost improvements. The Company reviewed origin and corporate operations and initiatives were implemented to increase operational efficiency and effectiveness. As a result total charges of $8,612 were incurred in connection with the reduction in the global workforce. These initiatives will continue to occur as the Company restructures certain operations not meeting strategic business objectives and performance metrics in future periods. At March 31, 2015, the costs of these future initiatives are not estimable. As a result of constructing a new U.S. cut rag facility with state of the art machinery and equipment, the Company recorded a $500 asset impairment charge for certain machinery and equipment at the previous facility during the year ended March 31, 2015.

In prior fiscal years, the Company implemented several strategic initiatives in response to shifts in supply and demand balances and changing business models of its customers. These initiatives were substantially complete at March 31, 2014. The Company continued to focus on improving factory efficiencies and other core components of its business. As part of this focus, the Company agreed to a joint processing venture in one of its foreign locations during the three months ended June 30, 2013. As a result, the Company recorded pretax charges of $2,745 in connection with the reduction in workforce including the effect on the Company's defined benefit pension plans of $1,261 during the year ended March 31, 2014. Asset impairment charges of $756 were recorded for certain processing equipment in connection with the new venture as of March 31, 2014. As the Company continued to respond to changes in its business, additional employee separation charges of $791 and asset impairment charges of $819 were incurred during the year ended March 31, 2014.

The following table summarizes the restructuring actions as of March 31, 2015, 2014 and 2013:



	Years Ended March 31,
Restructuring and Asset Impairment Charges	2015			2014			2013
Employee separation and other cash charges:
Beginning balance	$	397		$	668		$	1,960
Period Charges:
Employee separation charges (recoveries)	8,612			2,275			(55		)
Other cash charges	6			—			—
Total employee separation and other cash charges (recoveries)	8,618			2,275			(55		)
Payments through March 31	(928		)	(2,546		)	(1,237		)
Ending balance March 31	$	8,087		$	397		$	668
Asset impairment and other non-cash charges	500			2,836			—
Total restructuring and asset impairment charges (recoveries)	$	9,118		$	5,111		$	(55	)

The following table summarizes cash payments for employee separation and other cash charges (recoveries) for the years ended March 31, 2015, 2014 and 2013.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Alliance One International, Inc. and Subsidiaries

(in thousands)

Note 4 – Restructuring and Asset Impairment Charges (continued)



	Year Ending March 31,										Total
Cash Payments by Year	2015			2014			2013				Payments
Employee separation and other cash charges (recoveries)	$	8,618		$	2,275		$	(55	)
Adjustments to employee separation and other cash charges	—			—			186			*
Cash paid 2013	—			—			—				$	—
Cash paid 2014	—			(2,064		)	—				$	(2,064	)
Cash paid 2015	(531		)	(211		)	(186		)		$	(928	)
Adjustment	—			—			55
Balances at March 31, 2015	$	8,087		$	—		$	—

* Beginning balance for the year ended March 31, 2013.

The following table summarizes the employee separation and other cash charges recorded in the Company’s South America, Value Added Services and Other Regions segments as of March 31, 2015, 2014 and 2013:



	Years Ended March 31,
Employee Separation and Other Cash Charges	2015			2014			2013
Beginning balance:	$	397		$	668		$	1,960
South America	—			—			183
Value added services	—			—			—
Other regions	397			668			1,777
Period charges:	$	8,618		$	2,275		$	(55	)
South America	2,328			433			(143		)
Value added services	—			—			—
Other regions	6,290			1,842			88
Payments through March 31:	$	(928	)	$	(2,546	)	$	(1,237	)
South America	(411		)	(433		)	(40		)
Value added services	—			—			—
Other regions	(517		)	(2,113		)	(1,197		)
Ending balance March 31:	$	8,087		$	397		$	668
South America	1,917			—			—
Value added services	—			—			—
Other regions	6,170			397			668

Non-cash charges related to Value Added Services were $500 during the year ended March 31, 2015. Non-cash charges related to the Other Regions segment were $2,836 during the year ended March 31, 2014. There were no non-cash charges for the year ended March 31, 2013.