RESTRUCTURING AND OTHER SPECIAL CHARGES (BENEFITS), NET

The following table presents the components of restructuring and other special charges (benefits), net:



	Three Months Ended					Nine Months Ended
	December 31,					December 31,
(In thousands)	2012			2011		2012			2011
Restructuring costs (benefits), net	$	(3,332	)	$	748	$	(2,535	)	$	14,078
Other related costs	1,603			1,683		7,232			1,683
Asset impairment charges	—			—		1,729			2,500
Total restructuring and other special charges (benefits), net	$	(1,729	)	$	2,431	$	6,426		$	18,261

Restructuring Costs (Benefits), Net

In May 2011, the Company announced the alignment of its twelve regional distribution companies into four new divisions, and the consolidation of its regional company accounting and certain administrative functions into four newly created Business Support Centers (“BSCs”). Additionally, the Company initiated a related change in its legal entity structure on January 1, 2012 whereby the majority of Airgas’ distribution businesses have merged or will merge into a single limited liability company (“LLC”) of which Airgas, Inc. is the sole member. Each of the Company’s twelve regional distribution companies operated (prior to conversion to SAP) or operates its own accounting and administrative functions. Enabled by the Company’s conversion to a single information platform across all of its regional companies as part of the SAP implementation, the restructuring will allow Airgas to more effectively utilize its resources across regional company boundaries and to form an operating structure that will help Airgas leverage the full benefits of its new SAP platform. As a result of the realignment plan, the Company recorded a restructuring charge of $13.3 million during the three months ended June 30, 2011 for severance benefits expected to be paid under the Airgas, Inc. Severance Pay Plan to employees whose jobs were eliminated as a result of the realignment.

During the three and nine months ended December 31, 2012, the Company recorded $3.3 million and $2.5 million, respectively, in net restructuring benefits. During the three months ended December 31, 2012, the Company re-evaluated its remaining severance liability related to the divisional realignment and, as a result of this analysis, reduced its severance liability by $3.7 million. The reduction in the severance liability was driven by fewer than expected individuals meeting the requirements to receive severance benefits. This reduction was due to both the retention of employees through relocation or acceptance of new positions, as well as former associates who chose not to remain with the Company through their designated separation dates. Offsetting the benefit from the reduction to the severance liability were additional restructuring costs of $0.4 million and $1.2 million for the three and nine months ended December 31, 2012, respectively, primarily related to relocation and other costs.

During the three and nine months ended December 31, 2011, the Company recorded $0.7 million and $14.1 million, respectively, in restructuring costs. The majority of the costs for the nine-month period ended December 31, 2011 related to the $13.3 million severance restructuring charge recorded during the three months ended June 30, 2011.

The activity in the accrued liability balances associated with the restructuring plan was as follows for the nine months ended December 31, 2012:



(In thousands)	Severance Costs			Facility Exit and Other Costs			Total
Balance at March 31, 2012	$	13,138		$	990		$	14,128
Restructuring charges	—			1,165			1,165
Cash payments	(3,120		)	(1,831		)	(4,951		)
Other adjustments	(3,700		)	—			(3,700		)
Balance at December 31, 2012	$	6,318		$	324		$	6,642

Of the $6.6 million in accrued restructuring costs at December 31, 2012, $4.8 million was included in accrued expenses and other current liabilities and $1.8 million was included in other non-current liabilities on the Company’s Consolidated Balance Sheet. The restructuring costs were not allocated to the Company’s business segments (see Note 13).

Other Related Costs

For the three and nine months ended December 31, 2012, the Company also incurred $1.6 million and $7.2 million, respectively, of other costs related to the divisional realignment and LLC restructuring. These costs primarily related to transition staffing for the BSCs, legal costs and other expenses associated with the Company’s organizational and legal entity changes. For both the three and nine months ended December 31, 2011, the Company incurred $1.7 million of other restructuring related costs, primarily related to transition staffing for the BSCs and legal costs associated with the realignment.

The divisional realignment is expected to be completed by the end of fiscal 2013, with the final regional distribution company’s implementation of SAP, integration into the divisional structure and merger into the LLC anticipated during the three months ending March 31, 2013. However, the payout of severance benefits under the plan is expected to continue through fiscal 2014 based on the payment of benefits over time (rather than in a lump sum), extended benefits earned by a number of associates through the Airgas, Inc. Severance Pay Plan and payments to associates at other distribution businesses yet to convert to SAP and/or merge into the LLC. For the three months ending March 31, 2013, the Company expects to incur additional restructuring and other related costs, primarily related to transition staffing, legal and relocation costs, of approximately $2 million.

Asset Impairment Charges

The Company recorded special charges of $1.7 million and $2.5 million related to asset impairments during the nine months ended December 31, 2012 and 2011, respectively – see Notes 4 and 8 for further information.