Business realignment charges

9 Months Ended

Mar. 31, 2012

Business realignment charges

7. Business realignment charges

To structure its businesses in light of current and anticipated customer demand, the Company incurred business realignment charges in fiscal 2012 and fiscal 2011.

Business realignment charges by business segment are as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2012		2011		2012		2011
Industrial	$	3,133	$	5,310	$	10,031	$	9,747
Aerospace								320
Climate & Industrial Controls		192				340

Work force reductions by business segment are as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2012		2011		2012		2011
Industrial		152		149		356		357
Aerospace								22
Climate & Industrial Controls		8				12

The charges primarily consist of severance costs related to plant closures as well as general work force reductions implemented by various operating units throughout the world. The business realignment charges for the three and nine months ended March 31, 2012 also included charges related to enhanced retirement benefits. The Company believes the realignment actions will positively impact future results of operations but will not have a material effect on liquidity and sources and uses of capital. The charges are presented primarily in the Cost of sales caption in the Consolidated Statement of Income for the three and nine months ended March 31, 2012 and March 31, 2011. As of March 31, 2012, approximately $7 million in severance payments have been made relating to charges incurred during fiscal 2012, with the majority of the remaining payments expected to be made by June 30, 2012. All required severance payments have been made relating to charges incurred in fiscal 2011. Additional charges to be recognized in future periods related to the realignment actions described above are not expected to be material.