RESTRUCTURING

On an ongoing basis, we review the global economy, the healthcare industry, and the markets in which we compete. From these reviews we identify opportunities to improve efficiencies, enhance commercial capabilities, better align our resources and offer customers better comprehensive solutions. In order to realize these opportunities, we undertake restructuring and other initiatives to transform our business.

On May 1, 2013, we announced that our Board of Directors approved a plan to pursue identified Value Creation and Capture ("VCC") opportunities. These include: (i) investment in product line extensions, next generation products and growth platforms; (ii) enhancement of commercial execution capabilities by implementing go-to-market and other strategies to enable global profitable revenue growth; and (iii) transformation of the manufacturing network to best support these commercial strategies while optimizing expense levels. Collectively, these are opportunities to position us for optimal growth and increased competitiveness.

Our manufacturing network transformation plan, part of our larger VCC activities previously announced, includes (i) discontinuing manufacturing activities at our Braintree, Massachusetts, Ascoli-Piceno, Italy and Bothwell, Scotland facilities, (ii) creating a technology center of excellence for product development, (iii) expanding of our current facility in Tijuana, Mexico, (iv) engaging Sanmina Corporation as a contract manufacturer to produce certain medical equipment, and (v) building a new manufacturing facility in Malaysia closer to our customers in Asia.

We estimate we will incur approximately $74.0 million of restructuring and restructuring related expense and spend approximately $58.0 million on these initiatives in fiscal 2015. We estimate we will spend an additional $10 to $15 million to complete these initiatives through fiscal 2017.

The following summarizes the restructuring activity for the three months ended June 28, 2014 and June 29, 2013:



	Three Months Ended June 28, 2014
(In thousands)		Restructuring Accrual Balance at March 29, 2014		Restructuring Costs Incurred		Less Payments			Less Non-Cash Adjustments			Restructuring Accrual Balance at June 28, 2014
Severance and other employee costs		$	22,908	$	9,542	$	(7,133	)	$	—		$	25,317
Other costs		728		5,167		(5,493		)	—			402
Accelerated depreciation		—		260		—			(260		)	—
Asset write-down		—		96		—			(96		)	—
Total		$	23,636	$	15,065	$	(12,626	)	$	(356	)	$	25,719



	Three Months Ended June 29, 2013
(in thousands)		Restructuring Accrual Balance at March 30, 2013		Restructuring Costs Incurred		Less Payments			Less Non-Cash Adjustments			Restructuring Accrual Balance at June 29, 2013
Severance and other employee costs		$	3,089	$	20,039	$	(1,969	)	$	—		$	21,159
Other costs		173		3,103		(1,490		)	—			1,786
Asset write-down		—		327		—			(327		)	—
		$	3,262	$	23,469	$	(3,459	)	$	(327	)	$	22,945

We deployed significant financial resources for these activities. Many of the activities necessary to complete the VCC initiatives include severance and other costs which qualify as restructuring expenses under ASC 420, Exit or Disposal Cost Obligations. We incurred $15.1 million in severance, asset write-offs and other restructuring charges during the quarter ended June 28, 2014. In addition, we also incurred $7.9 million of costs that do not constitute restructuring under ASC 420, which we refer to as "Transformation Costs". These costs consist primarily of expenditures directly related to our transformation activities including program management, product line transfer teams, infrastructure related costs, accelerated depreciation and asset disposals.

The table below presents transformation and restructuring costs recorded in cost of goods sold, research and development, selling, general and administrative expenses and interest and other expense in our statements of income and comprehensive income for the periods presented. The majority of expenses recorded as Transformation Costs in the prior year relate to the integration of the whole blood acquisition. Transformation Costs in the current year are associated with our VCC initiatives.



Transformation costs	Three Months Ended
(in thousands)	June 28, 2014		June 29, 2013
Integration and other costs	7,678		9,180
Accelerated depreciation	250		843
Total	$	7,928	$	10,023



Restructuring costs	Three Months Ended
(in thousands)	June 28, 2014		June 29, 2013
Severance and other employee costs	$	9,542	$	20,039
Other costs	5,167		2,849
Accelerated depreciation	260		254
Asset disposal	96		327
Total	$	15,065	$	23,469

Total restructuring and transformation	$	22,993	$	33,492