Note 4 — Restructuring and other impairment charges

The amounts recognized in restructuring and other impairment charges for the twelve months ended December 31, 2013, 2012 and 2011 consisted of the following:

	2013		2012			2011
	(Dollars in thousands)
LMA restructuring program	$	12,152	$	2,515		$	—
2013 restructuring charges		10,230		—			—
2012 restructuring charges		4,229		2,459			—
2011 restructuring program		770		—			3,047
2007 Arrow integration program		230		(1,937	)		461
In-process research and development impairment		7,381		—			—
Long-lived asset impairment		3,460		—			—
Investments in affiliates impairment		—		—			2,497
Restructuring and other impairment charges	$	38,452	$	3,037		$	6,005

LMA Restructuring Program

In connection with the acquisition of LMA in 2012, the Company formulated a plan related to the integration of LMA and the Company’s businesses. The integration plan focuses on the closure of LMA corporate functions and the consolidation of manufacturing, sales, marketing, and distribution functions in North America, Europe and Asia.

The charges associated with this restructuring program that are included in restructuring and other impairment charges for the twelve months ended December 31, 2013 and 2012 were as follows:

	2013		2012
	(Dollars in thousands)
Termination benefits	$	3,282	$	2,229
Facility closure costs		788		—
Contract termination costs		7,906		274
Other restructuring costs		176		12
	$	12,152	$	2,515

A reconciliation of the changes in accrued liabilities associated with the LMA restructuring program from the inception of the program through December 31, 2013 is set forth in the following table:

	Termination benefits			Facility Closure Costs			Contract Termination Costs			Other Restructuring Costs			Total
	(Dollars in thousands)
Balance at December 31, 2011	$	—		$	—		$	—		$	—		$	—
Subsequent accruals		2,229			—			274			12			2,515
Cash payments		(488	)		—			—			—			(488	)
Foreign currency translation		3			—			3			—			6
Balance at December 31, 2012		1,744			—			277			12			2,033
Subsequent accruals		3,282			788			7,906			176			12,152
Cash payments		(4,461	)		(362	)		(4,560	)		(164	)		(9,547	)
Foreign currency translation		(13	)		1			63			(8	)		43
Balance at December 31, 2013	$	552		$	427		$	3,686		$	16		$	4,681

Aside from nominal facility closure costs anticipated in 2014, the Company does not expect to incur additional costs associated with this program. The Company expects to complete this project in 2014.

2013 Restructuring Charges

In 2013, the Company initiated programs to consolidate certain administrative and manufacturing facilities in North America and warehouse facilities in Europe and terminate certain European distributor agreements in an effort to reduce costs. The Company estimates that it will incur an aggregate of up to approximately $11 million in restructuring and other impairment charges over the term of this restructuring program. Of this amount, $5 million relates to employee termination costs, $3 million relates to termination of certain distributor agreements and $3 million relates to facility closures costs and other actions. The charges associated with this restructuring program that are included in restructuring and other impairment charges for the twelve months ending December 31, 2013 were as follows:

	2013
	(Dollars in thousands)
Termination benefits	$	4,787
Contract termination costs		3,326
Other restructuring costs		2,117
	$	10,230

As of December 31, 2013, the Company has a reserve of $4.2 million in connection with these projects. The Company expects to complete this program in 2015.

2012 Restructuring Charges

In 2012, the Company identified opportunities to improve its supply chain strategy by consolidating its three North American warehouses into one centralized warehouse, lower costs and improve operating efficiencies through the termination of certain distributor agreements in Europe, the closure of certain North American facilities and workforce reductions. The charges associated with this restructuring program that are included in restructuring and other impairment charges for the twelve months ending December 31, 2013 and 2012 were as follows:

	2013		2012
	(Dollars in thousands)
Termination benefits	$	2,993	$	1,681
Facility closure costs		935		—
Contract termination costs		296		758
Other restructuring costs		5		20
	$	4,229	$	2,459

The Company expects to complete the projects over a one year period and does not anticipate incurring additional costs associated with this program.

2011 Restructuring Program

In 2011, the Company initiated a restructuring program at three facilities to consolidate operations and reduce costs. In connection with this program, the Company recorded contract termination costs of approximately $2.6 million associated with a lease termination, as the Company had vacated 50% of the premises during 2011. In addition, the Company recorded approximately $0.4 million for employee termination benefits in connection with workforce consolidations. In the fourth quarter 2013, the Company recorded an additional $0.8 million in contract termination costs and has completely exited the leased facility. This program was completed in 2013.

2007 Arrow Integration Program

In connection with the Company’s acquisition of Arrow International, Inc. (“Arrow”), the Company implemented a program in 2007 to integrate Arrow’s businesses into the Company’s other businesses. The aspects of this program that affected Teleflex employees and facilities (such aspects being referred to as the “2007 Arrow integration program”) were charged to earnings and classified as restructuring and impairment charges.

The charges associated with the 2007 Arrow integration program that were included in restructuring and other impairment charges for the years ended December 31, 2013, 2012, and 2011 were $0.2 million, $(1.9) million and $0.5 million, respectively. The net credit recorded during the year ended December 31, 2012 was primarily the result of the reversal of contract termination costs related to a settlement of a dispute involving the termination of a European distributor agreement that was established in connection with the acquisition of Arrow. This program was completed in 2013.

Impairment Charges

The Company incurred the following asset impairment charges during 2013, 2012 and 2011. These asset impairments were measured at fair value using significant unobservable inputs that are categorized as Level 3 under the fair value hierarchy, which is described in Note 10 to the consolidated financial statements.

·	During the fourth quarter 2013, the Company recorded a $2.9 million IPR&D charge upon the decision to abandon a research and development project associated with the Company’s vascular business.

·	During the third quarter 2013, the Company recorded $3.5 million in impairment charges related to assets held for sale that had a carrying value in excess of their appraised fair value.

During the first quarter 2013, the Company recorded a $4.5 million IPR&D charge pertaining to a research and development project associated with the Axiom acquisition because technological feasibility had not yet been achieved and the Company determined that the subject technology had no future alternative use.

During 2011, the Company recognized impairment charges of $2.5 million related to the decline in value of its investments in affiliates that are considered to be other than temporary. In making this determination, the Company considered multiple factors, including its intent and ability to hold investments, operating losses of investees that demonstrate an inability to recover the carrying value of the investments, the investee’s liquidity and cash position and market acceptance of the investee’s products and services.