Restructuring Charges

2013 Restructuring

During the third quarter of fiscal year 2013, our management approved, committed to and initiated plans to restructure and improve efficiencies in our operations as a result of the sale of the Apama product line and the divestitures completed during the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013. We reduced our global workforce primarily within the administrative and sales organizations. This workforce reduction was conducted across all geographies and also resulted in the closing of certain facilities.

Restructuring expenses primarily relate to employee costs, including severance, health benefits, outplacement services and transition divestiture arrangements, but excluding stock-based compensation. Facilities costs include fees to terminate lease agreements and costs for unused space, net of sublease assumptions. Other costs include costs to terminate automobile leases of employees included in the workforce reduction, asset impairment charges for assets no longer deployed as part of cost reduction strategies, costs for unused software licenses as part of the workforce reduction and other costs directly associated with the restructuring actions taken.

As part of the 2013 restructuring, for the three and nine months ended August 31, 2013, we incurred expenses totaling $6.1 million, of which $0.4 million represents excess facilities and other costs and $5.7 million represents employee severance and related benefits. The expenses are recorded as restructuring expenses in the condensed consolidated statements of income, with the exception of $0.4 million included in income (loss) from discontinued operations for the three and nine months ended August 31, 2013. We expect to incur additional costs with respect to the 2013 restructuring through the remainder of fiscal year 2013. The total cost of the 2013 restructuring is expected to be approximately $1.3 million for excess facilities and other costs and approximately $6.5 million for employee severance and related benefits. The estimated costs not yet recorded in the condensed consolidated statement of income relate to excess facilities costs, net of sublease assumptions, and employee severance-related costs.

A summary of activity for the 2013 restructuring action is as follows (in thousands):



	Excess Facilities and Other Costs			Employee Severance and Related Benefits			Total
Balance, December 1, 2012	$	—		$	—		$	—
Costs incurred	388			5,716			6,104
Cash disbursements	(20		)	(1,020		)	(1,040		)
Asset impairment	—			—			—
Translation adjustments and other	—			14			14
Balance, August 31, 2013	$	368		$	4,710		$	5,078

Cash disbursements for expenses incurred to date under the 2013 restructuring are expected to be made through the first quarter of fiscal year 2014. The restructuring reserve of $5.1 million is included in other accrued liabilities on the condensed consolidated balance sheet at August 31, 2013.

2012 Restructuring

In the second quarter of fiscal year 2012, our management approved, committed to and initiated certain operational restructuring initiatives to reduce annual costs, including the simplification of our organizational structure and the consolidation of facilities. In addition, as part of the Plan, we have divested the product lines not considered core to our business. Our restructuring actions include both our cost reduction efforts and qualifying costs associated with our divestitures.

As part of the 2012 restructuring, for the nine months ended August 31, 2013, we incurred expenses totaling $4.0 million, of which $1.2 million represents excess facilities and other costs and $2.8 million represents employee severance and related benefits. The expenses are recorded as restructuring expenses in the condensed consolidated statements of income, with the exception of $0.6 million included in income (loss) from discontinued operations for the nine months ended August 31, 2013. Cumulative expenses of the 2012 restructuring through the first nine months of fiscal year 2013 are $23.1 million, of which $3.9 million represents excess facilities and other costs and $19.2 million represents employee severance and related benefits. We do not expect to incur additional material costs with respect to the 2012 restructuring.

A summary of activity for the 2012 restructuring action during the nine months ended August 31, 2013, is as follows (in thousands):



	Excess Facilities and Other Costs			Employee Severance and Related Benefits			Total
Balance, December 1, 2012	$	603		$	6,429		$	7,032
Costs incurred	1,213			2,844			4,057
Cash disbursements	(668		)	(8,544		)	(9,212		)
Asset impairment	(111		)	—			(111		)
Translation adjustments and other	(5		)	27			22
Balance, August 31, 2013	$	1,032		$	756		$	1,788

Cash disbursements under the 2012 restructuring are expected to be made through fiscal year 2016. The short-term portion of the restructuring reserve of $1.6 million is included in other accrued liabilities and the long-term portion of $0.2 million is included in other noncurrent liabilities on the condensed consolidated balance sheet at August 31, 2013.