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 $112.0 million. As of our fiscal first quarter of 2016, we are substantially complete with activities related to operating expenses, and we expect to incur costs related to the manufacturing activities through the end of fiscal 2016.

These costs include approximately $89.0 million associated with assets, including product rationalization and related equipment disposals and accelerated depreciation, about $19.0 million associated with employee termination costs and about $4.0 million associated with facility lease termination costs.

In the fiscal first quarter of 2016, we recorded in cost of sales $10.5 million of expense, arising from 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 we reduced in cost of sales, the accrued employee termination costs by $0.2 million. In the fiscal first quarter of 2016, we recorded in selling, general and administrative expense $0.1 million, of employee termination costs and $0.3 million of expense for lease termination costs. We also recorded in research and development expense $0.1 million of employee termination costs. In addition, CooperVision incurred $7.9 million of integration costs in the fiscal first quarter of 2016, included in operating expenses.

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 included in operating expenses.

A summary of the cumulative total restructuring costs by major component recognized to date as of January 31, 2016, is as follows:



(In millions)	Employee-related			Facilities-related		Product Rationalization		Total
Amounts incurred in:
Year ended October 31, 2014	$	20.3		$	0.5	$	15.3	$	36.1
Year ended October 31, 2015	(2.5		)	0.4		57.7		55.6
Three months ended January 31, 2016	—			0.3		10.5		10.8
Cumulative amounts incurred as of January 31, 2016	$	17.8		$	1.2	$	83.5	$	102.5

The following table summarizes the restructuring activities by major component for the fiscal year ended October 31, 2015 and the three months ended January 31, 2016:



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

Balance at October 31, 2014	$	19.9		$	0.5		$	—		$	20.4
(Reductions) additions during fiscal 2015	(2.5		)	0.4			57.7			55.6
Payments during the fiscal year	(9.0		)	(0.4		)	—			(9.4		)
Non-cash adjustments (a) (b)	0.2			(0.2		)	(57.7		)	(57.7		)
Balance as of October 31, 2015	8.6			0.3			—			8.9
Additions during three months ended January 31, 2016	—			0.3			10.5			10.8
Payments during the three months ended January 31, 2016	(3.0		)	(0.1		)	—			(3.1		)
Non-cash adjustments (a) (b)	(0.2		)	—			(10.5		)	(10.7		)
Balance as of January 31, 2016	$	5.4		$	0.5		$	—		$	5.9

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

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