NOTE 18 – RESTRUCTURING

Fiscal year 2013 restructuring initiatives included the following: (i) actions in the Paints segment to consolidate manufacturing and distribution operations following the acquisition of Ace Hardware Corporation's paint manufacturing business, ongoing profit improvement plans in Australia, and other actions in Asia, (ii) actions in our Coatings segment to consolidate manufacturing operations in Europe following the acquisition of the Inver Group, and other actions to rationalize manufacturing operations and lower operating expenses, and (iii) overall initiatives to improve our global cost structure, including non-manufacturing headcount reductions. These restructuring activities resulted in pre-tax charges of $36,433 in fiscal year 2013. Included in fiscal year 2013 restructuring charges is $6,664 in non-cash pre-tax asset impairment charges. Subsequent to the end of the fiscal year and prior to filing this report, we incurred approximately $12,000 in pre-tax restructuring charges related to the continuation of these actions. See Note 2 in Notes to Consolidated Financial Statements for further information on our Inver Group acquisition.

In fiscal year 2012, we exited the gelcoat products market and consolidated a manufacturing facility in our Paints segment. Our gelcoat product line was categorized in Other and Administrative. During fiscal year 2012, we also completed restructuring initiatives announced in 2011, including certain actions in our Coatings and Paints segments. In our Coatings segment, we rationalized our manufacturing capacity and reduced our overall global headcount, primarily in our wood product line. In our Paints segment, we completed the first phase of actions to improve the profitability of Australia operations, which included facility consolidations in manufacturing and distribution, store rationalization and the reduction of other related costs. These restructuring activities were completed in 2012 and resulted in pre-tax charges of $25,845 and $33,093 in fiscal years 2012 and 2011, respectively.

In fiscal year 2008, we initiated a comprehensive series of restructuring activities that were completed in fiscal year 2011. 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. Restructuring charges for these initiatives were $1,346 pre-tax in fiscal year 2011.

The total resulting expenses recognized in fiscal year 2013, 2012, and 2011 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 twelve months.

The following restructuring charges by segment were recorded in 2013, 2012 and 2011:


For the Year Ended October 25, 2013		Liability							Liability
		Beginning							Ending
		Balance							Balance
		10/26/2012		Expense		Activity			10/25/2013
Coatings
Severance and employee benefits	$	2,234	$	17,772	$	(1,107	)	$	18,899
Asset impairments		—		1,565		(1,565	)		—
Exit costs (consulting/site clean-up)		390		155		(426	)		119
Total Coatings		2,624		19,492		(3,098	)		19,018
Paints
Severance and employee benefits		2,104		9,470		(5,456	)		6,118
Asset impairments		—		5,038		(5,038	)		—
Exit costs (consulting/site clean-up)		3,984		445		(2,233	)		2,196
Total Paints		6,088		14,953		(12,727	)		8,314
Other and Administrative
Severance and employee benefits		297		1,779		(285	)		1,791
Asset impairments		—		61		(61	)		—
Exit costs (consulting/site clean-up)		—		148		(148	)		—
Total Other and Administrative		297		1,988		(494	)		1,791
Total	$	9,009	$	36,433	$	(16,319	)	$	29,123


For the Year Ended October 26, 2012		Liability							Liability
		Beginning							Ending
		Balance							Balance
		10/28/2011		Expense		Activity			10/26/2012
Coatings
Severance and employee benefits	$	3,884	$	545	$	(2,195	)	$	2,234
Asset impairments		—		658		(658	)		—
Exit costs (consulting/site clean-up)		2,802		215		(2,627	)		390
Total Coatings		6,686		1,418		(5,480	)		2,624
Paints
Severance and employee benefits		2,915		5,544		(6,355	)		2,104
Asset impairments		—		7,447		(7,447	)		—
Exit costs (consulting/site clean-up)		408		5,401		(1,825	)		3,984
Total Paints		3,323		18,392		(15,627	)		6,088
Other and Administrative
Severance and employee benefits		437		1,551		(1,691	)		297
Asset impairments		—		3,616		(3,616	)		—
Exit costs (consulting/site clean-up)		—		868		(868	)		—
Total Other and Administrative		437		6,035		(6,175	)		297
Total	$	10,446	$	25,845	$	(27,282	)	$	9,009


For the Year Ended October 28, 2011		Liability							Liability
		Beginning							Ending
		Balance							Balance
		10/29/2010		Expense		Activity			10/28/2011
Coatings
Severance and employee benefits	$	1,139	$	10,044	$	(7,299	)	$	3,884
Asset impairments		—		5,644		(5,644	)		—
Exit costs (consulting/site clean-up)		2,034		5,252		(4,484	)		2,802
Total Coatings		3,173		20,940		(17,427	)		6,686
Paints
Severance and employee benefits		19		7,945		(5,049	)		2,915
Asset impairments		—		4,169		(4,169	)		—
Exit costs (consulting/site clean-up)		2,763		899		(3,254	)		408
Total Paints		2,782		13,013		(12,472	)		3,323
Other and Administrative
Severance and employee benefits		—		486		(49	)		437
Total Other and Administrative		—		486		(49	)		437
Total	$	5,955	$	34,439	$	(29,948	)	$	10,446

The ending liability balance at October 25, 2013, October 26, 2012, and October 28, 2011 is included in other accrued liabilities on our Consolidated Balance Sheets. For 2013, $21,916 was charged to cost of sales, $5,524 was recorded to research and development (R&D) expenses and $8,993 was charged to selling, general and administrative (SG&A) expenses. For 2012, $16,199 was charged to cost of sales, $243 was recorded to R&D expenses and $9,403 was charged to SG&A expenses. For 2011, $25,563 was charged to cost of sales, $862 was recorded to R&D expenses and $8,014 was charged to SG&A expenses. The restructuring reserve balances presented are considered adequate to cover committed restructuring actions. The restructuring expenses recorded are included in the Consolidated Statements of Operations.