RESTRUCTURING AND OTHER EXPENSES

Restructuring and other expenses included expenses resulting from the execution of our strategic assessment and related restructuring plans, consisting primarily of employee severance and other benefit-related costs, third-party consulting costs, facility-related costs, and certain other costs. It also included other transitional costs such as training, redundant salaries, and retention bonuses for certain critical personnel.

In the fourth quarter of 2010, the Company commenced a strategic assessment of its business and operations ("Restructuring Phase I"). This assessment focused on expanding revenue opportunities and lowering corporate overhead, including workforce and benefit reductions and facility rationalization. In addition to addressing corporate overhead, the strategic assessment examined the Company's market strengths and opportunities and compared the Company's position to that of its competitors. As a result of the assessment, the Company focused its growth on investments in the Infusion and Home Health Services segments and elected to pursue offers for its traditional and specialty pharmacy mail operations and community pharmacy stores. Accordingly, the Company consummated the Pharmacy Services Asset Sale relating to its traditional and specialty pharmacy mail operations and community retail pharmacy stores. During the three months ended June 30, 2012, as a result of the divestiture process, the Company's management team commenced an assessment of the Company's continuing operations in order to align its corporate structure with its remaining operations ("Restructuring Phase II").

The Company anticipates that additional restructuring will occur and thus significant additional charges such as the write down of certain long−lived assets, employee severance, other restructuring type charges, temporary redundant expenses, potential cash bonus payments and potential accelerated payments or termination costs for certain of its contractual obligations, could impact the Company's future Consolidated Financial Statements.

Restructuring Phase I

As a result of Restructuring Phase I, the Company incurred restructuring expenses of approximately $0.3 million during the three months ended March 31, 2012. The Company did not incur restructuring expense related to Phase I during the three months ended March 31, 2013, though some amounts previously accrued were adjusted. Restructuring expenses during the three months ended March 31, 2012 consisted of approximately $0.3 million of third-party consulting costs.

Since inception of Restructuring Phase I, the Company has incurred approximately $10.0 million in total Phase I expenses, consisting of $4.4 million of third-party consulting costs, $4.2 million of employee severance and other benefit-related costs related to workforce reductions, and $1.4 million of facility-related costs.

The restructuring costs are included in restructuring and other expenses on the Unaudited Consolidated Statements of Operations and as part of the calculation of Segment Adjusted EBITDA, as defined in Note 11. As of March 31, 2013, there are restructuring accruals of $0.9 million related to Phase I included in accrued expenses and other current liabilities and other non-current liabilities on the Unaudited Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits		Consulting Costs			Facility-Related Costs			Total
Liability balance as of December 31, 2012	$	163	$	20		$	841		$	1,024
Expenses	—		(20		)	(98		)	(118		)
Cash payments	—		—			(31		)	(31		)
Liability balance as of March 31, 2013	$	163	$	—		$	712		$	875

Restructuring Phase II

As a result of Restructuring Phase II, the Company incurred restructuring expenses of approximately $0.5 million during the three months ended March 31, 2013. The Company did not incur restructuring expense related to Phase II during the three months ended March 31, 2012. Restructuring expenses for the three months ended March 31, 2013 included approximately $0.4 million of employee severance and other benefit-related costs related to workforce reductions and $0.1 million in other costs.

Since inception of Phase II of restructuring, the Company has incurred approximately $2.4 million in total expenses, consisting of $1.5 million of employee severance and other benefit-related costs related to workforce reductions, $0.3 million in third party consulting costs and $0.6 million of other costs.

The restructuring costs are included in restructuring and other expenses on the Unaudited Consolidated Statements of Operations and as part of the calculation of Segment Adjusted EBITDA, as defined in Note 11. As of March 31, 2013, there are restructuring accruals of $0.7 million related to Phase II included in accrued expenses and other current liabilities and other non-current liabilities on the Unaudited Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits			Consulting Costs			Other Costs			Total
Liability balance as of December 31, 2012	$	559		$	145		$	—		$	704
Expenses	382			19			73			474
Cash payments	(296		)	(145		)	(73		)	(514		)
Liability balance as of March 31, 2013	$	645		$	19		$	—		$	664

Other transitional costs totaled $0.9 million and $0.1 million for the three months ended March 31, 2013 and March 31, 2012, respectively.