2. SPECIAL (GAINS) AND CHARGES

Special (gains) and charges reported on the Consolidated Statement of Income include the following:



	First Quarter Ended
	March 31
(millions)	2018		2017
Cost of sales
Acquisition and integration costs		-		1.5

Special (gains) and charges
Restructuring activities		0.3		(0.3)
Acquisition and integration costs		0.5		6.3
Other		25.2		0.2
Subtotal		26.0		6.2

Total special (gains) and charges		$26.0		$7.7

For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with the Company’s internal management reporting.

Restructuring activities

During the second quarter of 2017, the Company commenced restructuring and other cost-saving actions in order to streamline operations. These actions include a reduction of the Company’s global workforce by approximately 570 positions, as well as asset disposals and lease terminations. Actions were substantially completed in 2017. The Company also has restructuring plans that commenced prior to 2015. Net restructuring charges were $0.3 million ($0.3 million after tax) and net restructuring gains were $0.3 million ($0.2 million after tax) in the first quarter of 2018 and 2017, respectively. The restructuring liability balance for all plans was $34.0 million and $41.5 million as of March 31, 2018 and December 31, 2017, respectively. The reduction in liability was driven primarily by severance and other cash payments. The majority of pretax charges represent net cash expenditures which are expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities. Cash payments during 2018 related to restructuring plans were $7.9 million.

Restructuring activities have been included as a component of special (gains) and charges on the Consolidated Statement of Income. Restructuring liabilities have been classified as a component of both other current and other noncurrent liabilities on the Consolidated Balance Sheet.

Acquisition and integration related costs

Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $0.5 million ($0.3 million after tax) and $6.3 million ($4.2 million after tax) in the first quarter of 2018 and 2017, respectively. Charges are related to acquisition costs, advisory and legal fees, and integration charges for acquisitions. Acquisition and integration costs reported in product and equipment cost of sales on the Consolidated Statement of Income in the first quarter of 2017 relate to recognition of fair value step-up in the Anios inventory.

Further information related to the Company’s acquisitions is included in Note 3.

Other

During the first quarter of 2018, the Company recorded other special charges of $25.2 million, which primarily consisted of a $25.0 million ($18.9 million after tax) commitment to the Ecolab Foundation in response to the new U.S. tax law. Other charges were minimal in both the first quarter of 2018 and 2017.