Cost Reduction Plan

6 Months Ended

Mar. 31, 2012

4. COST REDUCTION PLAN

During the second quarter ended 31 March 2012, we initiated a cost reduction plan. The results from continuing operations includes a charge of $86.8 ($60.6 after-tax, or $.28 per share) for this plan. This charge represents the ongoing actions we are taking to improve our cost structure, particularly in Europe. It includes removing the stranded costs resulting from our decision to exit the Homecare business, the reorganization of the Merchant business and the actions we are taking to right-size our European business cost structure in light of the challenging economic outlook.

This charge includes $80.8 for severance and other costs associated with the elimination of approximately 600 positions from our workforce. The remainder of the charge, $6.0, is related to the write-down of certain assets. For additional information regarding these assets, see Note 10, Fair Value Measurements. The planned actions are expected to be completed within the next twelve months.

The charge for the cost reduction plan is excluded from segment operating profit. The table below displays how this charge relates to the businesses at the segment level:


	Severance and Other Benefits			Asset Impairments			Total
Merchant Gases		$	71.3		$	6.0		$	77.3
Tonnage Gases			3.8			—			3.8
Electronics and Performance Materials			5.7			—			5.7
Total 2012 Charge		$	80.8		$	6.0		$	86.8

The following table summarizes the carrying amount of the accrual for the cost reduction plan at 31 March 2012:


	Severance and Other Benefits				Asset Impairments				Total
2012 Charge		$	80.8			$	6.0			$	86.8
Noncash expenses			(.4	)			(6.0	)			(6.4	)
Amount reflected in pension liability			(6.8	)			—				(6.8	)
Cash expenditures			(7.8	)			—				(7.8	)
Currency translation adjustment			.6				—				.6
Accrued balance		$	66.4			$	—			$	66.4

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details