Restructuring Expense

Restructuring expense included in the Company’s statements of operations are the result of its long-term strategy to reduce production costs and improve long-term competitiveness. Restructuring and impairments expense consists principally of severance costs related to reductions in work force and of facility costs and impairments of assets principally related to closing facilities and/or the relocation of production to another facility. Impairment amounts for assets held for sale reflect estimated selling prices less costs to sell and are considered to be a Level 2 within the fair value hierarchy. Facility costs are principally comprised of costs to relocate assets to the Company’s other facilities, operating lease termination costs and other associated costs.

During 2014, the Company incurred restructuring expenses of $18.1 million. These charges were related to $4.0 million in headcount reductions, $4.5 million of charges related to the closure of the Heidenheim rolls facility, $4.8 million in impairment charges and severance and other charges due to the closing of the Joao Pessoa, Brazil clothing facility, a $1.6 million charge in Italy to terminate a sales agency contract, $1.5 million in severance charges relating to the closure of the Argentina press felt facility, $1.2 million of charges relating to the closed France rolls facility, including costs related moving certain assets to China and other locations in Europe, $0.2 million of costs associated with liquidating the Vietnam facility, and $1.2 million in severance and facility charges relating to the Spain closure. These costs were partially offset by a gain of $0.9 million recorded in connection with the sale of the Spain and France facilities in the third and fourth quarters of 2014.

During 2013, the Company recorded restructuring and impairment expenses of approximately $14.8 million, of which $8.2 million, $5.6 million and $1.0 million were in the machine clothing, rolls and corporate segments. These included charges relating to the reduction of base costs via previously announced headcount reductions, the closure of two machine clothing facilities in Spain and Argentina and the closure of three rolls facilities in Germany, France and U.S. $8.8 million of the 2013 charges relate to plant closures announced in previous years. Of this amount, $4.6 million are increases in 2012 severance estimates and $4.2 million are 2013 period costs. $6.0 million of the 2013 charges relate to the 2013 announced closure of a Rolls facility located in Germany and ongoing headcount reduction initiatives.

During 2012, the Company incurred $25,708 in restructuring expenses, of which $21,251, $4,295 and $162 were in the machine clothing, rolls and corporate segments, respectively. This amount includes costs incurred as a result of (1) the reduction of selling costs in Europe via termination of sales agency agreements, resulting in $3,601 of restructuring costs; (2) the closure of machine clothing production operation in Argentina, resulting in $2,176 of restructuring costs; (3) the closure of roll covering plant in France, resulting in $3,717 restructuring costs; (4) the reduction of base costs via headcount reductions primarily in Europe, resulting in $7,952 of restructuring costs, and (5) the planned closure of machine clothing plant in Spain, resulting in restructuring costs of $8,262. Included in these costs were non-cash impairment charges of $2,479 recorded in 2012 as a result of closing the Argentina, France and Spain facilities.

In the fourth quarter of 2014, The Company sold the France and Spain facilities for $2.1 million and $1.1 million, respectively. Their carrying values at the time of sale were $1.8 million and $0.2 million, and the Company recorded a gain on these sales of $0.9 million, which was an offfset to restructuring expense on the Company's Consolidated Statement of Operations.

The Company expects to continue to review its business to determine if additional actions will be taken to further improve its cost structure. Restructuring expenses of approximately $10.0 million are estimated during 2015, primarily related to the continuation of streamlining the operating structure and improving long-term competitiveness of the Company. Actual restructuring costs for 2015 may substantially differ from estimates at this time, depending on actual operating results in 2015 and the timing of the restructuring activities.

The table below sets forth the significant components and activity in the restructuring program during the years ended December 31, 2014, 2013 and 2012:



2014	Balance at December 31, 2013		Charges (1)		Currency Effects			Cash Payments			Balance at December 31, 2014 (2)
Severance	$	6,466	$	13,095	$	(786	)	$	(13,895	)	$	4,880
Facility costs and other	1,468		5,638		(333		)	(5,955		)	818
Total	$	7,934	$	18,733	$	(1,119	)	$	(19,850	)	$	5,698

(1) Amount excludes $263 related to impairment charges and $(854) related to the gain on sale of certain asset sales.

(2) Amount included in Accrued Expenses on the Consolidated Balance Sheets at December 31, 2014 and 2013.



2013	Balance at December 31, 2012		Charges (1)		Currency Effects		Cash Payments			Balance at December 31, 2013
Severance	$	15,577	$	10,574	$	57	$	(19,742	)	$	6,466
Facility costs and other	335		3,583		133		(2,583		)	1,468
Total	$	15,912	$	14,157	$	190	$	(22,325	)	$	7,934

(1) Amount excludes $687 related to impairment charges.



2012	Balance at December 31, 2011		Charges (1)		Currency Effects			Cash Payments			Balance at December 31, 2012
Severance	$	800	$	18,050	$	172		$	(3,445	)	$	15,577
Facility costs and other	452		5,179		(110		)	(5,186		)	335
Total	$	1,252	$	23,229	$	62		$	(8,631	)	$	15,912

(1) Amount excludes $2,479 related to impairment charges.