Restructuring Actions

6 Months Ended

Jun. 30, 2011

NOTE 11. RESTRUCTURING ACTIONS

During the third quarter of 2010, management made several significant decisions to address our cost structure. Given the materiality to our financial statements and impact to our operations, we decided to classify charges related to these actions as restructuring charges. We recorded $2.4 million and $7.3 million of restructuring charges related to those actions in the second quarter and first six months of 2011, respectively.

The following table summarizes these charges:


	Three
	Months			Six Months
	Ended			Ended
	June 30,			June 30,
Action Title	2011			2011			Segment
Floor Products Europe	$	2.2		$	5.3		Resilient Flooring

Beaver Falls plant		(0.3	)		1.3		Building Products

North America SG&A		0.5			0.9		Unallocated Corporate, Resilient Flooring, Building Products

Other initiatives		—			(0.2	)


Total	$	2.4		$	7.3

Floor Products Europe: We announced in the third quarter of 2010 that we intend to focus our European flooring strategy on products and regions where we believe we can be a market leader, and we will streamline our product range and sales organization accordingly. During the fourth quarter of 2010, we withdrew from the residential market, and as a result, we sold our Teesside, UK, manufacturing facility. In addition, we ceased production at our heterogeneous vinyl flooring plant in Holmsund, Sweden during the second quarter of 2011.

In addition to the restructuring costs of $2.2 million for the second quarter and $5.3 million for the first six months of 2011 reflected in the above table, we also recorded $2.7 million in the second quarter and $4.8 million in the first six months of 2011 of other related costs in cost of goods sold ($2.4 million in the second quarter and $4.1 million in the first six months) and SG&A expense ($0.3 million in the second quarter and $0.7 million in the first six months) in the first six months of 2011. These costs are primarily related to inventory obsolescence, accelerated depreciation and plant closure costs.

Through June 30, 2011 we have incurred expense of $26.9 million related to this initiative. In total, we expect to incur expenses of approximately $30 million for these actions through 2011. The remaining expenses primarily will include severance benefits and asset write-downs.

Beaver Falls Plant: In the third quarter of 2010, we announced that the Beaver Falls, Pennsylvania, plant was scheduled to close in 2011. Production at the facility ended March 31, 2011, and production requirements have been transitioned to other facilities. The decision to close the plant was driven by the location and layout of the plant, technology limitations and the continued limited demand for the products we made at the plant.

In addition to the restructuring credits of $0.3 million in the second quarter and costs of $1.3 million in the first six months of 2011 reflected in the table above, we also recorded $1.8 million in the second quarter and $6.5 million in the first six months of 2011 of accelerated depreciation and $2.8 million of closure-related costs in cost of goods sold in the second quarter and first six months of 2011.

Through June 30, 2011 we have incurred expense of $22.9 million related to this initiative. In total, we expect to incur expenses of up to $25 million for this action through 2011. The remaining costs are primarily associated with on-going activities related to the closure of the facility.

North America SG&A: We are committed to augmenting margin expansion through the aggressive adoption of LEAN practices and projects to standardize, simplify or eliminate SG&A activities. As a result, in the third quarter of 2010, we began to restructure our North American SG&A operations. The first six months of 2011 restructuring expense related to this initiative was recorded in the Unallocated Corporate ($0.6 million), Resilient Flooring ($0.2 million) and Building Products ($0.1 million) segments.

Through June 30, 2011 we have incurred restructuring expense of $6.7 million related to this initiative. In total, we expect to incur restructuring expenses of up to $8 million through 2011 as we further streamline SG&A functions.

The following table summarizes activity in the restructuring accruals.


	Severance and Related Costs
	Floor						North
	Products			Beaver Falls			America			Other
	Europe			Plant			SG&A			Initiatives			Total
December 31, 2010	$	6.1		$	1.9		$	4.7		$	1.8		$	14.5
Net charges/(reversals)		5.3			1.3			0.9			(0.2	)		7.3
Cash payments		(5.2	)		(2.2	)		(5.0	)		(1.6	)		(14.0	)
Other		0.7			—			—			—			0.7

June 30, 2011	$	6.9		$	1.0		$	0.6		$	—		$	8.5

The amounts in "Other" are related to the effects of foreign currency translation.

Most of the accrual balance as of June 30, 2011 is expected to be paid during 2011.

- 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.

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