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Restructuring and Asset Impairments
12 Months Ended
Dec. 31, 2012
Restructuring and Asset Impairments

3. Restructuring and Asset Impairments

Restructuring

During the fourth quarter of 2012, the company committed to a plan (the “2012 Restructuring Plan”) to improve its overall cost structure and enhance operational effectiveness. The company expects the 2012 Restructuring Plan to result in the elimination of certain positions and other terminations worldwide. In connection with this plan, the company recorded employee separation costs under the company’s existing severance programs and other costs related to one-time termination benefits of $19.2 million ($13.0 million after tax). Substantially all of these costs are expected to be cash expenditures. At December 31, 2012, the remaining liability related to the 2012 Restructuring Plan was $17.8 million, which reflects cash payments of $1.4 million. The company expects activities under this plan to be substantially complete by the end of 2013.

During the second half of 2011, the company initiated certain restructuring actions, which included the realignment of certain sales functions in the United States. In connection with these actions, the company recorded employee separation costs under the company’s existing severance programs of $12.0 million ($8.1 million after tax). Substantially all of these costs were cash expenditures paid by the end of 2012. In addition, $1.8 million and $1.6 million of these restructuring costs were reversed in the years ended December 31, 2012 and 2011, respectively.

In December 2010, the company committed to a restructuring plan (the “2010 Restructuring Plan”), which included the realignment of certain manufacturing, sales and marketing, and administrative functions. In connection with this plan, the company recorded employee separation costs under the company’s existing severance programs and other costs related to one-time employee termination benefits of $16.7 million ($11.4 million after tax). Substantially all of these costs were cash expenditures paid during 2011. In addition, $2.6 million of these restructuring costs were reversed in 2011.

Asset Impairments

During 2012, the company recorded asset impairment charges totaling $22.2 million ($13.8 million after tax). These charges consisted of a write-down of $13.2 million ($8.0 million after tax) related to certain core technologies associated with a non-strategic product in the company’s vascular product group, and impairments of $9.0 million ($5.8 million after tax) of assets not related to operations. These asset impairment charges were measured at fair value using significant unobservable inputs that are categorized as Level 3 under the fair value hierarchy, which is described further in Note 6 of the notes to consolidated financial statements. The charges were recorded to other (income) expense, net.