NOTE 5 - RESTRUCTURING AND RELATED CHARGES

PET Rightsizing Initiative – During the second quarter of the year ended September 30, 2017, the Company implemented a rightsizing initiative within Spectrum’s PET segment to streamline certain operations and reduce operating costs. The initiative includes headcount reductions and the rightsizing of certain facilities. Total costs associated with this initiative are expected to be approximately $16 million, of which $15.3 million has been incurred to date. The balance is anticipated to be incurred through September 30, 2018.

HHI Distribution Center Consolidation – During the second quarter of the year ended September 30, 2017, the Company implemented an initiative within Spectrum’s HHI segment to consolidate certain operations and reduce operating costs. The initiative includes headcount reductions and the exit of certain facilities. Total costs associated with the initiative are expected to be approximately $77 million, of which $67.8 million has been incurred to date. The balance is anticipated to be incurred through September 30, 2018.

GAC Business Rationalization Initiatives – During the third quarter of the year ended September 30, 2016, the Company implemented a series of initiatives within Spectrum’s GAC segment to consolidate certain operations and reduce operating costs. These initiatives included headcount reductions and the exit of certain facilities. Total costs associated with these initiatives are expected to be approximately $48 million, of which $43.1 million has been incurred to date. The balance is anticipated to be incurred through September 30, 2018.

Other Restructuring Activities – The Company is entering or may enter into small, less significant initiatives and restructuring activities to reduce costs and improve margins throughout the organization. Individually these activities are not substantial, and occur over a shorter time period (less than 12 months).

The following summarizes restructuring and related charges for the three and nine month periods ended June 30, 2018 and 2017:


	Three Month Periods Ended				Nine Month Periods Ended
(in millions)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
HHI distribution center consolidation	$	11.6	$	9.0	$	40.4	$	9.1
GAC business rationalization initiative		6.3		12.8		13.5		19.8
PET rightsizing initiative		3.1		2.2		7.1		2.8
Other restructuring activities		4.4		(2.8)		8.0		(0.4)
Total restructuring and related charges	$	25.4	$	21.2	$	69.0	$	31.3
Reported as:
Cost of goods sold	$	4.9	$	11.2	$	9.9	$	16.4
Operating expense		20.5		10.0		59.1		14.9

The following is a summary of restructuring and related charges for the three and nine month periods ended June 30, 2018 and 2017 and cumulative costs for current restructuring initiatives as of June 30, 2018, by cost type:


	Termination		Other
(in millions)	Benefits		Costs		Total
For the three month period ended June 30, 2018	$	1.6	$	23.8	$	25.4
For the three month period ended June 30, 2017		2.4		18.8		21.2
For the nine month period ended June 30, 2018		6.8		62.2		69.0
For the nine month period ended June 30, 2017		4.5		26.8		31.3
Cumulative costs through June 30, 2018		17.8		116.8		134.6
Future costs to be incurred		0.4		16.0		16.4

Termination costs consist of involuntary employee termination benefits and severance pursuant to a one-time benefit arrangement recognized as part of a restructuring initiative. Other costs consist of non-termination type costs related to restructuring initiatives such as incremental costs to consolidate or close facilities, relocate employees, cost to retrain employees to use newly deployed assets or systems, lease termination costs, and redundant or incremental transitional operating costs and customer fines and penalties during transition, among others.

The following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type for the nine month periods ended June 30, 2018.


	Termination		Other
(in millions)	Benefits		Costs		Total
Accrual balance at September 30, 2017	$	7.2	$	9.8	$	17.0
Provisions		4.4		2.6		7.0
Cash expenditures		(7.8)		(8.2)		(16.0)
Non-cash items		—		—		—
Accrual balance at June 30, 2018	$	3.8	$	4.2	$	8.0

The following summarizes restructuring and related charges by segment for the three and nine month periods ended June 30, 2018 and 2017, cumulative costs incurred through June 30, 2018, and future expected costs to be incurred by Spectrum’s segments of continuing operations:


(in millions)	HHI		PET		H&G		GAC		Corporate		Total
For the three month period ended June 30, 2018	$	12.0	$	3.7	$	0.1	$	7.6	$	2.0	$	25.4
For the three month period ended June 30, 2017		6.2		2.0		—		12.8		0.2		21.2
For the nine month period ended June 30, 2018		40.8		8.1		0.3		14.7		5.1		69.0
For the nine month period ended June 30, 2017		7.7		3.7		—		19.8		0.1		31.3
Cumulative costs through June 30, 2018		68.2		16.3		0.3		44.3		5.5		134.6
Future costs to be incurred		10.1		0.5		—		4.5		1.3		16.4