NOTE 14: RESTRUCTURING

During the 2011 fiscal year, 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. We also initiated restructuring actions to improve the profitability of our Australian acquisition in the Paints segment, Wattyl, which include facility consolidations in manufacturing and distribution, store rationalization and other related costs. These restructuring activities for the three and nine-month periods ended July 29, 2011 resulted in pre-tax charges of $14,333 or $0.10 per share after tax and $15,696 or $0.12 per share after tax, respectively. These activities will span fiscal years 2011 and 2012, and we expect the total cost to be $0.30 to $0.35 per share after tax.

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, General 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 $1,346 or $0.01 per share after tax for the nine-month period ended July 29, 2011.

Our total restructuring activities for the three and nine-month periods ended July 29, 2011 resulted in pre-tax charges of $14,184 or $0.10 per share after tax and $17,042 or $0.12 per share after tax, respectively. In comparison, total restructuring activities for the three and nine-month periods ended July 30, 2010 resulted in pre-tax charges of $5,805 or $0.04 per share after tax and $10,067 or $0.06 per share after tax, respectively.

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 within the next 12 months.

The following restructuring and impairment charges by segment were recorded in the 2011 and 2010 periods:


Nine Month Period Ending July 29, 2011	Liability Beginning Balance 10/29/2010		Expense		Activity			Liability Ending Balance 7/29/2011
Coatings
Severance and employee benefits	$	1,139	$	5,676	$	(2,806	)	$	4,009
Asset impairments		—		2,998		(2,998	)		—
Exit costs (consulting/site clean-up)		2,034		2,030		(1,253	)		2,811
Total Coatings		3,173		10,704		(7,057	)		6,820
Paints
Severance and employee benefits		19		3,972		(670	)		3,321
Asset impairments		—		1,750		(1,750	)		—
Exit costs (consulting/site clean-up)		2,763		272		(2,603	)		432
Total Paints		2,782		5,994		(5,023	)		3,753
All Other
Severance and employee benefits		—		233		(233	)		—
Exit costs (consulting/site clean-up)		—		111		(111	)		—
Total All Other		—		344		(344	)		—
Total	$	5,955	$	17,042	$	(12,424	)	$	10,573



Nine Month Period Ending July 30, 2010	Liability Beginning Balance 10/30/2009		Net ¹ Expense			Activity			Liability Ending Balance 7/30/2010
Coatings
Severance and employee benefits	$	1,694	$	1,735		$	(1,214	)	$	2,215
Asset impairments		—		5,710			(5,710	)		—
Exit costs (consulting/site clean-up)		1,012		897			(87	)		1,822
Contract term costs (leases)		—		92			(92	)		—
Total Coatings		2,706		8,434			(7,103	)		4,037
Paints
Severance and employee benefits		827		314			(1,122	)		19
Asset impairments		—		(139	)		139			—
Exit costs (consulting/site clean-up)		2,556		1,233			(900	)		2,889
Total Paints		3,383		1,408			(1,883	)		2,908
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	$	10,067		$	(9,266	)	$	6,945


	¹	The net expense column includes year-to-date changes in estimates of $988 for the Paints segment, which reduced Cost of Sales and Selling, General and Administrative expenses by $379 and $609, respectively.

The liability ending balance at July 29, 2011 and at July 30, 2010 is included in other accrued liabilities on our Condensed Consolidated Balance Sheets. The restructuring reserve balances presented are considered adequate to cover committed restructuring actions. The restructuring expenses recorded are included in the Condensed Consolidated Statements of Income. For the three-month period ended July 29, 2011, $12,224 was charged to Cost of Sales and $1,960 was charged to Selling, General and Administrative (SG&A) expense. For the nine-month period ended July 29, 2011, $14,149 was charged to Cost of Sales and $2,893 was charged to SG&A expense. For the three-month period ended July 30, 2010, $6,368 was charged to Cost of Sales and $563 was credited to SG&A expense. For the nine-month period ended July 30, 2010, $10,630 was charged to Cost of Sales and $563 was credited to SG&A expense.