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Restructuring and Other Charges, Net | 6 Months Ended
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Jun. 28, 2015
Restructuring and Other Charges, Net |
Restructuring and Other Charges, Net | 5.Restructuring and Other Charges, Net The Company’s Board of Directors approves all major restructuring programs that may involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the individual employees are notified or the liability is incurred. These costs are included in restructuring and other charges in the Company’s consolidated statements of operations. A summary of the pre-tax cost by restructuring program is as follows:
|  | Second Quarter Ended |  | Six Months Ended |
|  | June 28, 2015 |  | June 29, 2014 |  | June 28, 2015 |  | June 29, 2014 |
|  | (in millions) |
Restructuring costs: |  |  |  |  |  |  |  |  |
2015 Actions |  | $ | 4.0 |  | $ | — |  | $ | 5.3 |  | $ | — |
2013 Actions |  | — |  | 2.1 |  | 0.5 |  | 2.5 |
Other Actions |  | 0.7 |  | 0.5 |  | 0.9 |  | 4.3 |
Total restructuring and other charges, net |  | $ | 4.7 |  | $ | 2.6 |  | $ | 6.7 |  | $ | 6.8 |
The Company recorded pre-tax restructuring and other charges, net in its business segments as follows:
|  | Second Quarter Ended |  | Six Months Ended |
|  | June 28, 2015 |  | June 29, 2014 |  | June 28, 2015 |  | June 29, 2014 |
|  | (in millions) |
Americas |  | $ | 0.7 |  | $ | 0.4 |  | $ | 2.0 |  | $ | 2.3 |
EMEA |  | 0.7 |  | 2.2 |  | 1.5 |  | 3.7 |
Asia-Pacific |  | 3.3 |  | — |  | 3.3 |  | — |
Corporate |  | — |  | — |  | (0.1 | ) | 0.8 |
Total |  | $ | 4.7 |  | $ | 2.6 |  | $ | 6.7 |  | $ | 6.8 |
2015 Actions On February 17, 2015, the Board of Directors of the Company approved the initial phase of a restructuring program relating to the transformation of the Company’s Americas and Asia-Pacific businesses, which primarily involves product line rationalization efforts relating to non-core products. The Company expects to ultimately eliminate between $175 million to $200 million of the combined Americas and Asia-Pacific net sales primarily within the Company’s do-it-yourself (DIY) distribution channel (the “program”). On July 29, 2015, the Company entered into a definitive agreement with Sioux Chief Mfg. Co., Inc. (“Sioux Chief”) to sell the Company’s fittings, brass & tubular and vinyl tubing product lines and associated assets in the Americas. The Company estimates that the total pre-tax program cost will approximate the mid-point of the $27 million to $50 million range previously disclosed in the first quarter of 2015. The total non-cash charges for this program are expected to be $17 million to $25 million, and the net after-tax charge is expected to be $22 million to $40 million. As of June 28, 2015, the assets associated with the product lines in the Americas have been classified as ‘Held for Sale’ as all of the required criteria had been met. Refer to Note 6 Assets Held for Sale for further discussion. During the second quarter ended June 28, 2015, the Company recorded a $3.7 million pre-tax restructuring charge and liability relating to severance costs in the Americas and Asia-Pacific, $0.3 million pre-tax restructuring charge relating to accelerated depreciation and amortization of long-lived assets in the Americas and other transformation and deployment costs in SG&A of $1.9 million. During the first quarter ended March 29, 2015, the Company recorded a $1.3 million pre-tax restructuring charge and liability relating to facility site clean-up costs at one of the affected locations in the Americas and other transformation and deployment costs in SG&A of $1.5 million. During the fourth quarter and year ended December 31, 2014, the Company recorded a $15.2 million pre-tax charge relating to the program, consisting of goodwill impairment of $12.9 million, an indefinite-lived intangible asset impairment of $0.5 million, and other transformation and deployment costs of $1.8 million recorded in SG&A. The goodwill impairment charge was based on a quantitative assessment of the Asia-Pacific reporting unit goodwill performed as a result of it being more likely than not that the Asia-Pacific reporting unit’s third party and intersegment net sales would be significantly reduced as a result of the program. The total pre-tax program costs incurred to date are $23.9 million, including restructuring costs of $5.3 million, goodwill and intangible asset impairments of $13.4 million and other transformation and deployment costs of $5.2 million. The other transformation and deployment costs include consulting fees and other associated costs. The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the Company’s initial phase of the Americas and Asia-Pacific 2015 transformation program by type:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Facility exit and other |  | Total |
|  | (in millions) |
Expected costs |  | $ | 5.4 |  | $ | 0.4 |  | $ | 1.7 |  | $ | 3.5 |  | $ | 11.0 |
Costs incurred—first quarter 2015 |  | — |  | — |  | — |  | (1.3 | ) | (1.3 | )
Costs incurred—second quarter 2015 |  | (3.7 | ) | — |  | (0.3 | ) | — |  | (4.0 | )
Remaining costs at June 28, 2015 |  | $ | 1.7 |  | $ | 0.4 |  | $ | 1.4 |  | $ | 2.2 |  | $ | 5.7 |
The following table summarizes total incurred, incurred to date and expected pre-tax restructuring costs by business segment for the Company’s initial phase of the Americas and Asia-Pacific 2015 transformation program:
|  | Second Quarter Ended |  | Six Months Ended |  |  |  |  |
|  | June 28, 2015 |  | June 28, 2015 |  | Incurred to Date |  | Total Expected Costs |
|  | (in millions) |
Asia-Pacific |  | $ | 3.3 |  | $ | 3.3 |  | $ | 3.3 |  | $ | 5.4 |
Americas |  | 0.7 |  | 2.0 |  | 2.0 |  | 5.6 |
Total restructuring costs |  | $ | 4.0 |  | $ | 5.3 |  | $ | 5.3 |  | $ | 11.0 |
Details of the restructuring reserve activity for the Company’s initial phase of the Americas and Asia-Pacific 2015 transformation program for the six months ended June 28, 2015 are as follows:
|  | Severance |  | Asset write-downs |  | Facility exit and other |  | Total |
|  | (in millions) |
Balance at December 31, 2014 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Net pre-tax restructuring charges |  | — |  | — |  | 1.3 |  | 1.3 |
Utilization and foreign currency impact |  | — |  | — |  | — |  | — |
Balance at March 29, 2015 |  | $ | — |  | $ | — |  | $ | 1.3 |  | $ | 1.3 |
Net pre-tax restructuring charges |  | 3.7 |  | 0.3 |  | — |  | 4.0 |
Utilization and foreign currency impact |  | — |  | (0.3 | ) | — |  | (0.3 | )
Balance at June 28, 2015 |  | $ | 3.7 |  | $ | — |  | $ | 1.3 |  | $ | 5.0 |
2013 Actions On July 30, 2013, the Board of Directors authorized a restructuring program with respect to the Company’s EMEA segment to reduce its European manufacturing footprint, improve organizational and operational efficiency and better align costs with expected revenues in response to changing market conditions. Total pre-tax costs for the program were $8.4 million and were incurred from the third quarter of 2013 to the first quarter of 2015. The total charges for this program included costs for severance benefits, relocation, site clean-up, professional fees and certain asset write-downs. The total net after-tax charge for the restructuring program was approximately $5.9 million. The net after-tax charges incurred in the first six months of 2015 and 2014 were $0.4 million and $1.7 million, respectively. Other Actions The Company also periodically initiates other actions which are not part of a major program. In the fourth quarter of 2014, management initiated certain restructuring actions and strategic initiatives with respect to the Company’s EMEA segment in response to the ongoing economic challenges in Europe and additional product rationalization. The restructuring actions primarily include expected severance benefits and limited costs relating to asset write offs, professional fees and relocation. The total pre-tax charge for these restructuring initiatives is expected to be approximately $9.9 million, of which approximately $7.7 million were incurred as of June 28, 2015 for the program to date. The remaining expected costs relate to severance, asset write-offs and relocation costs and are expected to be completed by the end of the fourth quarter of fiscal 2016. The restructuring reserve for these actions as of June 28, 2015 relates to the severance recorded in the prior year. The following table summarizes total expected, incurred and remaining pre-tax restructuring costs for the EMEA 2014 restructuring actions:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Facility exit and other |  | Total |
|  | (in millions) |
Expected costs |  | $ | 8.8 |  | $ | 0.2 |  | $ | 0.8 |  | $ | 0.1 |  | $ | 9.9 |
Costs incurred—2014 |  | (6.9 | ) | — |  | — |  | — |  | (6.9 | )
Costs incurred—first quarter 2015 |  | — |  | (0.2 | ) | (0.1 | ) | — |  | (0.3 | )
Costs incurred—second quarter 2015 |  | (0.5 | ) | — |  | — |  | — |  | (0.5 | )
Remaining costs at June 28, 2015 |  | $ | 1.4 |  | $ | — |  | $ | 0.7 |  | $ | 0.1 |  | $ | 2.2 |
Details of the Company’s EMEA 2014 restructuring reserve activity for the six months ended June 28, 2015 are as follows:
|  | Severance |  | Legal and consultancy |  | Asset write-downs |  | Total |
|  | (in millions) |
Balance at December 31, 2014 |  | $ | 6.9 |  | $ | — |  | $ | — |  | $ | 6.9 |
Net pre-tax restructuring charges |  | — |  | 0.2 |  | 0.1 |  | 0.3 |
Utilization and foreign currency impact |  | (0.8 | ) | (0.2 | ) | (0.1 | ) | (1.1 | )
Balance at March 29, 2015 |  | $ | 6.1 |  | $ | — |  | $ | — |  | $ | 6.1 |
Net pre-tax restructuring charges |  | 0.5 |  | — |  | — |  | 0.5 |
Utilization and foreign currency impact |  | (0.2 | ) | — |  | — |  | (0.2 | )
Balance at June 28, 2015 |  | $ | 6.4 |  | $ | — |  | $ | — |  | $ | 6.4 |
In 2014, the Company initiated restructuring activities in the Americas and Corporate to reduce costs through reductions-in-force. Total pre-tax restructuring expense of $2.7 million was incurred in the first quarter of 2014 relating to these initiatives and the related restructuring reserves have been fully utilized.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 + Details
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