Note 3—Restructuring and Asset Impairments

The Company implements restructuring programs from time to time that are designed to improve operating effectiveness and lower costs. When the Company implements these programs, it incurs various charges, including severance, contract termination and asset impairments, and other employment related costs. In 2007, the Company implemented one such program, which involved the realignment of the management of our Canadian and U.S. businesses to a North American basis, rationalization of our product offerings, elimination of underperforming assets, an increased focus on high potential accounts, and the closure of several plants and warehouses in North America that resulted in lease contract termination losses and a partial reduction in our workforce (the "North American Plan"). The Company also implemented a plan in 2009 (the "2009 Restructuring Plan") that resulted in a further reduction of our workforce.

During 2011, the Company had no restructuring activity. During 2010, the Company made $5.4 million of cash payments related to the North American Plan. These cash payments included $3.0 million related to the settlement of one of its lease obligations, which resulted in a gain of $0.4 million. In addition, the Company recorded a $0.1 million gain related to other non-cash charges for the North American Plan during 2010. In 2009, we recorded restructuring and asset impairments of $5.1 million, which included $3.6 million for asset impairments primarily related to customer relationships and severance costs of $1.5 million related to the organizational restructuring and headcount reductions associated with the 2009 Restructuring Plan.

The following table summarizes restructuring, asset impairment and intangible asset impairment charges (gains) for the years ended December 31, 2011, January 1, 2011 and January 2, 2010:


	For the Years Ended
(in millions of U.S. dollars)	December 31, 2011		January 1, 2011			January 2, 2010
Restructuring	$	—	$	(0.5	)	$	1.5
Asset impairments		0.6		—			3.6
Intangible asset impairments		1.4		—			—

	$	2.0	$	(0.5	)	$	5.1

As of December 31, 2011, no amounts are owed under our restructuring plans.

The following table is a summary of our restructuring liabilities as of January 1, 2011, along with charges (gains) to costs and expenses and cash payments:

North American Plan:

(in millions of U.S. dollars)

Balance at
January 2,
2010

Charge
to Costs and
Expenses

Payments made
during the year

Balance at
January 1,
2011

Lease contract termination loss

5.8

(0.4

)

(5.4

)

—

5.8

(0.4

)

(5.4

)

—

The following table is a summary of our restructuring liabilities as of January 2, 2010, along with charges to costs and expenses and cash payments:

(in millions of U.S. dollars)

Balance at
December 27,
2008

Charge
to Costs and
Expenses

Payments made
during the year

Balance at
January 2,
2010

Lease contract termination loss

9.6

—

(3.8

)

5.8

9.6

—

(3.8

)

5.8

2009 Restructuring Plan:

(in millions of U.S. dollars)

Balance at
December 27,
2008

Charge (Gain)
to Costs and
Expenses

Payments made
during the year

Balance at
January 2,
2010

Severance and termination benefits

—

1.5

(1.5

)

—

1.5

(1.5

)

—

In 2009, $3.0 million (December 27, 2008—$5.8 million) of the lease contract termination loss liability was recorded as other long-term liabilities and $2.8 million of lease contract termination loss liability (December 27, 2008—$3.8 million) was classified as accounts payable and accrued liabilities.

Year ended December 31, 2011

The following table summarizes our asset impairment charges and intangible asset impairment charges on a reporting segment basis for the year ended December 31, 2011. We did not record any restructuring charges in 2011.

(in millions of U.S. dollars)

North America

Mexico

Total

Asset impairments

—

0.6

Intangible asset impairments

1.4

—

1.4

0.6

2.0

Asset impairments—In 2011, we recorded an asset impairment charge of $1.4 million related primarily to customer relationships. Also in 2011, we recorded a $0.6 million impairment of long-lived assets related to a production plant in Mexico that ceased operations.

Year ended January 1, 2011

The following table summarizes our restructuring gain on a reporting segment basis for the year ended January 1, 2011.


(in millions of U.S. dollars)	North America			Total
Restructuring (gain)	$	(0.5	)	$	(0.5	)

	$	(0.5	)	$	(0.5	)

Restructuring—In 2010, we recorded pre-tax restructuring gains totaling $0.5 million primarily in connection with a gain on a lease contract termination.

Year ended January 2, 2010

The following table summarizes restructuring and asset impairment charges on a reporting segment basis for the year ended January 2, 2010.


(in millions of U.S. dollars)	North America		Total
Restructuring	$	1.5	$	1.5
Asset impairments		3.6		3.6

	$	5.1	$	5.1

Restructuring—In 2009, we recorded pre-tax restructuring charges totaling $1.5 million in connection with severance costs relating to headcount reductions associated with the 2009 Restructuring Plan.

Asset impairments—In 2009, we recorded an asset impairment charge of $3.6 million related primarily to customer relationships. In accordance with ASC 360, it was determined that our customer relationship intangible asset no longer had future cash flows due to the loss of a specific customer. As a result, the customer relationship was determined to have a nil carrying value.