RESTRUCTURING AND OTHER EXPENSES

Restructuring and other expenses include 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 includes other transitional costs such as training, redundant salaries prior to defined separation dates, and retention bonuses for certain critical personnel.

In 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 retail 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.

In 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 we may incur 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, which impact the Company's future Consolidated Financial Statements.

Restructuring Phase I

As a result of the execution of the strategic assessment and related restructuring plan, the Company incurred restructuring expenses of approximately $(0.1) million, $0.2 million and $6.4 million during the years ended December 31, 2013, 2012 and 2011, respectively. The Company did not incur any significant restructuring expenses related to Restructuring Phase I during 2013, though some amounts previously accrued were adjusted. Restructuring expenses during the year ended December 31, 2012 consisted of approximately $0.3 million of third-party consulting costs offset by $0.1 million of facility-related expense adjustments. Restructuring expenses during the year ended December 31, 2011 consisted of approximately $2.9 million of third-party consulting costs and $1.9 million of severance and other benefit-related costs related to workforce reductions, and $1.6 million of facility-related costs.

Since inception of the strategic assessment and related restructuring plan, the Company has incurred approximately $10.1 million in total expenses, including $4.3 million of third-party consulting costs, $4.1 million of employee severance and other benefit-related costs related to workforce reductions, and $1.7 million of facility-related costs. A large part of the third-party consulting costs and other costs were associated with the analysis of our assets and their long-term strategic value relative to other assets in which we could invest. The assessment process culminated in the Pharmacy Services Asset Sale (see Note 5--Discontinued Operations).

The restructuring costs are included in restructuring and other expenses on the Consolidated Statements of Operations. As of December 31, 2013, there are restructuring accruals of $0.5 million related to Phase I included in accrued expenses and other current liabilities and other non-current liabilities on the Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits			Consulting Costs			Facility-Related Costs			Other Costs		Total
Balance as of December 31, 2011	$	2,109		$	50		$	1,289		$	—	$	3,448
Expenses	6			270			(61		)	—		215
Cash payments	(1,952		)	(300		)	(387		)	—		(2,639		)
Balance as of December 31, 2012	$	163		$	20		$	841		$	—	$	1,024
Expenses	(163		)	(20		)	118			—		(65		)
Cash payments	—			—			(438		)	—		(438		)
Balance as of December 31, 2013	$	—		$	—		$	521		$	—	$	521

Restructuring Phase II

As a result of Restructuring Phase II, the Company incurred restructuring expenses of approximately $3.4 million and $1.9 million during the years ended December 31, 2013 and 2012. The Company did not incur restructuring expense related to Phase II during 2011. Restructuring expenses during the year ended December 31, 2013 consisted of approximately $1.5 million of employee severance and other benefit related costs associated with workforce reductions, $1.6 million of third-party consulting costs and $0.4 million in other costs. Restructuring expenses during the year ended December 31, 2012 consisted of approximately $1.1 million of employee severance and other benefit related costs associated with workforce reductions, $0.3 million of third-party consulting costs, and $0.5 million in other costs.

The restructuring costs are included in restructuring and other expenses on the Consolidated Statements of Operations. As of December 31, 2013, there are restructuring accruals of $2.5 million related to Phase II included on the Consolidated Balance Sheets. The restructuring accrual activity consisted of the following (in thousands):



	Employee Severance and Other Benefits			Consulting Costs			Facility-Related Costs		Other Costs			Total
Balance as of December 31, 2011	$	—		$	—		$	—	$	—		$	—
Expenses	1,125			262			—		541			1,928
Cash payments	(566		)	(117		)	—		(541		)	(1,224		)
Balance as of December 31, 2012	$	559		$	145		$	—	$	—		$	704
Expenses	1,496			1,561			—		378			3,435
Cash payments	(1,159		)	(155		)	—		(344		)	(1,658		)
Balance as of December 31, 2013	$	896		$	1,551		$	—	$	34		$	2,481

Other transitional costs included in restructuring and other expenses on the Consolidated Statements of Operations totaled $4.4 million, $3.0 million, and $1.5 million in the years ended December 31, 2013, 2012 and 2011, respectively. During the year ended December 31, 2012 they also include $0.8 million for certain state sales taxes associated with prior year sales.