Restructuring and Integration Costs

2014 Sauflon Integration Plan

During the fiscal fourth quarter of 2014, in connection with the Sauflon acquisition, our CooperVision business unit initiated restructuring and integration activities to optimize operational synergies of the combined companies. These activities include workforce reductions, consolidation of duplicative facilities and product rationalization. We estimate that the total restructuring costs under this plan will be $74.0 million. These costs include about $48.0 million associated with assets, including product rationalization and related equipment disposals and accelerated depreciation, and about $26.0 million associated with employee termination costs and facility lease termination costs. We expect these activities to be completed by our fiscal first quarter of 2016.

In the fiscal first quarter of 2015, we recorded restructuring charges of $8.7 million for product rationalization, including production-related asset disposals and accelerated depreciation on equipment, primarily related to our hydrogel lenses, based on our review of products, materials and manufacturing processes of Sauflon; and $0.1 million for employee termination costs. The product rationalization charges were recorded in cost of sales and the employee termination costs were recorded in research and development expense. In addition, Coopervision incurred $5.9 million of integration costs recorded in selling, general and administrative expense.

In fiscal 2014, we recorded restructuring charges of $20.3 million for employee termination costs; $15.3 million for product rationalization, including inventory write-offs and production-related asset disposals, primarily related to our Avaira Toric contact lenses, based on our review of products, materials and manufacturing processes of Sauflon; and $0.5 million of lease termination costs for facility closures. In addition, CooperVision incurred $2.8 million of integration costs recorded in selling, general and administrative expense.

Of the employee termination costs, $19.7 million were recorded in selling, general and administrative expense and $0.6 million in research and development expense. The product rationalization costs were recorded in cost of sales. The lease termination costs and other related costs were recorded in selling, general and administrative expense.

The following table summarizes the restructuring activities by major component for the fiscal year ended October 31, 2014 and the three months ended January 31, 2015:



(In millions)	Employee-related			Facilities-related		Product Rationalization			Total

Additions during fiscal 2014	$	20.3		$	0.5	$	15.3		$	36.1
Payments during the fiscal year	(0.4		)	—		—			(0.4		)
Non-cash adjustments (b)	—			—		(15.3		)	(15.3		)
Balance at October 31, 2014	19.9			0.5		—			20.4
Additions during the three months ended January 31, 2015	0.1			—		8.7			8.8
Payments during the three months ended January 31, 2015	(0.3		)	—		—			(0.3		)
Non-cash adjustments (a) (b)	(1.4		)	—		(8.7		)	(10.1		)
Balance as of January 31, 2015	$	18.3		$	0.5	$	—		$	18.8

(a) Non-cash adjustments represent the currency translation adjustment for employee-related costs.

(b) Non-cash adjustments for product rationalization represent equipment disposals, inventory write-offs and accelerated depreciation.