CHARGES ASSOCIATED WITH RESTRUCTURING ACTIVITIES

6 Months Ended

Dec. 31, 2015

CHARGES ASSOCIATED WITH RESTRUCTURING ACTIVITIES

CHARGES ASSOCIATED WITH RESTRUCTURING ACTIVITIES

NOTE 4 – CHARGES  ASSOCIATED WITH RESTRUCTURING ACTIVITIES

In October 2015, officers authorized by the Company’s Board of Directors approved plans to transform and modernize the Company’s global technology infrastructure (“GTI”) to fundamentally change the way it delivers information technology services internally (such initiative, the “GTI Restructuring”).  As part of the GTI Restructuring, the Company is transitioning its GTI from Company-owned assets to a primarily vendor-owned model where it will pay for services as they are used.  This model, with a different third-party provider, is expected to provide an enhanced scalable platform to better support current and future requirements, help the Company achieve key strategic opportunities and improve the Company’s agility and flexibility to respond to the demands of the business by leveraging more advanced technologies.  This transition is expected to result in operational efficiencies and reduce the Company’s information technology service and infrastructure costs in the future.  The Company anticipates the GTI Restructuring will result in related restructuring and other charges of approximately $40 million to $50 million, consisting of non-cash asset write-offs, as well as employee-related and other implementation costs, which will be funded by cash from operations.  The Company expects the implementation of the GTI Restructuring, and the related charges, will continue through calendar year 2016.

The following table presents GTI Restructuring charges and the related activities under this initiative to date:

(In millions)	Employee- Related Costs		Asset Write-offs			Contract Terminations			Total
Charges	$	2.6	$	13.4		$	0.5		$	16.5
Cash payments	—		—			(0.3		)	(0.3		)
Non-cash asset write-offs	—		(13.4		)	—			(13.4		)
Accrued GTI Restructuring balance at December 31, 2015	$	2.6	$	—		$	0.2		$	2.8

Accrued GTI Restructuring charges at December 31, 2015 are expected to result in cash expenditures funded from cash provided by operations in fiscal 2016.

Other charges in connection with the implementation of this initiative were $2.0 million for the three and six months ended December 31, 2015 and primarily relate to consulting services.  These charges are included in Restructuring and other charges in the accompanying consolidated statements of earnings.