7.	Restructuring and Other Charges

Restructuring charges

The following is a summary of restructuring charges for the three and nine months ended September 30, 2013 and 2012 (in millions):


	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Workforce restructurings and other	$	11.2	$	1.0	$	12.0	$	3.7

During the third quarter of 2013, the Company approved an organizational restructuring plan to improve efficiency and effectiveness across the organization. This plan included the elimination of certain sales, marketing, operations and other positions within the Company’s three operating segments and corporate function. The Company accrued future employee-related costs of $9.5 million in the third quarter of 2013 and expects to incur additional employee-related costs of approximately $2 million related to the plan. No amounts related to the restructuring plan were paid during the quarter. The Company expects that substantially all amounts will be paid by the end of the first quarter of 2014, although benefit payments to certain employees will extend over a period of time up to one year from the termination date. As described in Note 17, Segment Information, restructuring charges are not included in the measure of segment profitability.

In 2012, restructuring charges relate to organizational streamlining initiatives, which primarily relate to the relocation of certain U.S. finance and human resource shared services from our Deerfield, Illinois headquarters to Kentucky.

We presently expect future charges of approximately $3 million to complete the integration of the Pinnacle assets, which we expect to complete in the first half of 2014. Actual restructuring charges may vary from this estimate depending on the timing and extent of the initiatives we implement.

The change in the balance of the restructuring liability for the nine months ended September 30, 2013 is as follows (in millions):


	Workforce Restructurings and Other			Contract Termination Costs			Total
Balance at December 31, 2012	$	3.6		$	2.7		$	6.3
Provision		12.0			—			12.0
Cash payments		(3.5	)		(0.3	)		(3.8	)
Foreign currency and other		0.3			(0.3	)		—

Balance at September 30, 2013	$	12.4		$	2.1		$	14.5

We expect the remaining liability related to workforce restructurings to be paid predominantly in 2014 and the remaining liability related to contract (lease) termination costs to be paid by June 2017 over the respective lease terms.

Other charges (credits)

Our pre-tax operating income for the three and nine months ended September 30, 2013 and 2012 was impacted by the following additional items (in millions):


	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Acquisition and integration-related (gains) charges ^(a)(b)	$	(11.1	)	$	1.8		$	(10.3	)	$	17.1
Other charges included in Costs of goods sold ^(c)		0.1			—			0.1			0.2
Other charges (credits) included in Selling, general and administrative expense ^(c)		2.9			(0.2	)		6.9			0.6

	$	(8.1	)	$	1.6		$	(3.3	)	$	17.9

(a)

In 2013, the gain (included in “Selling, general, and administrative expense”) primarily relates to a $12.2 million decrease in the fair value of estimated contingent consideration for our Skinnygirl ready-to-serve cocktail business based on revised estimated sales levels, which was partially offset by accelerated depreciation expense (included in “Cost of goods sold”) incurred in connection with integrating the Pinnacle business into our operations.

(b)

In 2012, the charges relate to the acquisition and integration of the Pinnacle business and Cooley business. The charges in the three months ended September 30, 2012 primarily consist of expenses incurred in connection with integrating these businesses into the Company’s existing operational structure (e.g., accelerated depreciation, employee retention, information technology systems integration costs and other organizational streamlining expenses). The charges in the nine months ended September 30, 2012 impacting “Selling, general, and administrative expense” consist of: transaction-related expenses of $5 million, contract termination expenses of $10 million and integration related expenses of $1 million. Contract termination fees are primarily based on actual settlement agreements, but where a settlement agreement has not been reached, we recorded an estimated liability.

(c)

Other charges for 2013 represent legal, forensic accounting and other third party expenses related to our India investigation, as well as asset write-offs of $1.1 million related to the repositioning of that business. Other credits in the three months ended September 30, 2012 primarily consist of accruals which were deemed to be no longer necessary. Other charges in the nine months ended September 30, 2012 primarily relate to organizational streamlining activities.