NOTE 14: RESTRUCTURING

In fiscal year 2008, we initiated a comprehensive series of restructuring activities which are now complete. These restructuring initiatives included plant closures, reductions to research and development and selling and administrative expenses, manufacturing consolidation and relocation, and our exit from non-strategic product lines in certain geographies. We rationalized our manufacturing capacity and reduced our overall global headcount to lower our costs in light of the challenging global economic conditions. Pre-tax restructuring charges for these initiatives were $98 and $1,494 for the three and six-month periods ended April 29, 2011, respectively.

During the second quarter of 2011, we initiated restructuring actions in our Coatings segment, primarily in our wood product line, which will further rationalize our manufacturing capacity and reduce our overall global headcount. These restructuring activities during the second quarter of 2011 resulted in pre-tax charges of $1,364 or $0.01 per share after tax. Additionally, we have announced restructuring actions related to improving the profitability of our Australian paints acquisition, Wattyl. Specific actions are expected to include facility consolidations in manufacturing and distribution, store rationalization and other related costs. We expect the cost of these activities to be $0.30 to $0.35 per share after tax over the next 12 to 18 months.

Our total restructuring activities for the three and six-month periods ended April 29, 2011 resulted in pre-tax charges of $1,462 and $2,858, respectively, or $0.02 per share after tax in each period. In comparison, total restructuring activities for the three and six-month periods ended April 30, 2010 resulted in pre-tax charges of $261 and $4,262, respectively, or $0.02 per share after tax in each period.

The total resulting expenses included severance and employee benefits, asset impairments, professional services and site clean-up. We plan to pay the majority of the current restructuring liabilities in fiscal year 2011.


The following restructuring and impairment charges by segment were recorded in the 2011 and 2010 periods:
Six Month Period Ending April 29, 2011	Liability Beginning Balance 10/29/2010		Expense		Activity			Liability Ending Balance 4/29/2011
Coatings
Severance and employee benefits	$	1,139	$	1,112	$	(1,499	)	$	752
Asset Impairments		—		252		(252	)		—
Exit costs (consulting/site clean-up)		2,034		1,094		(1,533	)		1,595
Total Coatings		3,173		2,458		(3,284	)		2,347
Paints
Severance and employee benefits		19		—		(18	)		1
Exit costs (consulting/site clean-up)		2,763		400		(1,689	)		1,474
Total Paints		2,782		400		(1,707	)		1,475
Total	$	5,955	$	2,858	$	(4,991	)	$	3,822



Six Month Period Ending April 30, 2010	Liability Beginning Balance 10/30/2009		Expense		Activity			Liability Ending Balance 4/30/2010
Coatings
Severance and employee benefits	$	1,694	$	62	$	(1,029	)	$	727
Asset impairments		—		2,500		(2,500	)		—
Exit costs (consulting/site clean-up)		1,012		33		5			1,050
Contract term costs (leases)		—		38		(38	)		—
Total Coatings		2,706		2,633		(3,562	)		1,777
Paints
Severance and employee benefits		827		314		(1,104	)		37
Asset impairments		—		240		(240	)		—
Exit costs (consulting/site clean-up)		2,556		850		(912	)		2,494
Total Paints		3,383		1,404		(2,256	)		2,531
All Other
Severance and employee benefits		55		—		(55	)		—
Asset impairments		—		114		(114	)		—
Exit costs (consulting/site clean-up)		—		111		(111	)		—
Total All Other		55		225		(280	)		—
Total	$	6,144	$	4,262	$	(6,098	)	$	4,308

The ending liability balance at April 29, 2011 and at April 30, 2010 is included in other accrued liabilities on our Condensed Consolidated Balance Sheet. The restructuring reserve balances presented are considered adequate to cover committed restructuring actions. The restructuring expenses recorded are included in the Condensed Consolidated Statement of Income. For the three-month period ended April 29, 2011, $529 was charged to Cost of Sales and $933 was charged to Selling, General and Administrative (SG&A) expenses. For the six-month period ended April 29, 2011, $1,925 was charged to Cost of Sales and $933 was charged to SG&A. For the three-month period ended April 30, 2010, $261 was charged to Cost of Sales. For the six-month period ended April 30, 2010, $4,262 was charged to Cost of Sales.