Restructuring Charges and Special Items

12 Months Ended

Sep. 30, 2011

Restructuring Charges and Special Items [Abstract]

14. Restructuring Charges and Special Items

During 2011, we paid substantially all of the $9.9 million accrual balance remaining as of September 30, 2010. The amount of accrual adjustments and non-cash activity was insignificant.

During 2010, we recorded accrual adjustments of $8.1 million primarily related to severance accruals as employee attrition differed from our original estimates. We recorded the adjustments as a $5.0 million benefit to selling, general and administrative expenses and a $3.1 million benefit to cost of sales.

During 2009, we recorded restructuring charges of $60.4 million ($41.8 million after tax, or $0.29 per diluted share) related to actions designed to better align our cost structure with then-current economic conditions. The majority of the charges related to severance benefits recognized pursuant to our severance policy and local statutory requirements. In the Consolidated Statement of Operations for the year ended September 30, 2009, we recorded $21.0 million of the restructuring charges in cost of sales, and we recorded $39.4 million in selling, general and administrative expenses.

During 2008, we recorded special items of $50.7 million ($34.0 million after tax, or $0.23 per diluted share) related to restructuring actions designed to better align resources with growth opportunities and to reduce costs as a result of current and anticipated market conditions. This charge was partially offset by the reversal of $4.0 million ($3.6 million after tax, or $0.02 per diluted share) of severance accruals established as part of our 2007 restructuring actions, as employee attrition differed from our original estimates. The 2008 restructuring actions included workforce reductions aimed at streamlining administrative functions, realigning selling resources to the highest anticipated growth opportunities and consolidating business units. The majority of the charges related to severance benefits recognized pursuant to our severance policy and local statutory requirements. In the Consolidated Statement of Operations for the year ended September 30, 2008, we recorded $4.1 million of the special items in cost of sales, while $46.6 million was recorded in selling, general and administrative expenses.

During 2007, we recorded special items of $43.5 million ($27.7 million after tax, or $0.17 per diluted share) related to various restructuring actions designed to execute on our cost productivity initiatives and to advance our globalization strategy. Actions included workforce reductions, realignment of administrative functions, and rationalization and consolidation of global operations. In the Consolidated Statement of Operations for the year ended September 30, 2007, $21.8 million of the special items was recorded in cost of sales, while $21.7 million was recorded in selling, general and administrative expenses.

The following tables set forth a summary of restructuring activities during 2010 (in millions):


									Non-Cash
	September 30,								Activity			September 30,
	2009					Accrual			and			2010
Actions	Accrual		Payments			Adjustments			Currency			Accrual

2007 – Manufacturing Globalization Employee severance benefits	$	9.1	$	(3.5	)	$	(3.1	)	$	(0.4	)	$	2.1
2008 – Reduce Cost Structure for Anticipated Market Conditions
Employee severance benefits		5.0		(3.5	)		(0.6	)		0.1			1.0
2009 – Reduce Cost Structure for Global Recession
Employee severance benefits		35.7		(23.1	)		(4.4	)		(1.4	)		6.8
Asset impairments		8.8		—			—			(8.8	)		—
Lease exit costs		2.2		(2.0	)		—			(0.2	)		—


Total	$	60.8	$	(32.1	)	$	(8.1	)	$	(10.7	)	$	9.9