6. RESTRUCTURING OF OPERATIONS

In accordance with our accounting policy, restructuring costs are included in our corporate unallocated operating results for segment reporting purposes, which is consistent with management's view of its businesses.

Aggregate pre-tax restructuring charges (credits) included in the consolidated statements of income were recorded by line item as follows:


	Three months ended March 31,
	2012		2011
Manufacturing cost of sales	$	1.2	$	(0.1	)
Selling and technical services		1.6		0.0
Research and process development		0.4		(0.4	)
Administrative and general		0.1		(0.2	)

Total	$	3.3	$	(0.7	)

Details of our 2012 restructuring initiatives are as follows:

In the first quarter of 2012, we reviewed the efficiency of our manufacturing plants in our Coatings Resins segment following reviews of their operating performance. Based on these reviews, we identified opportunities to improve operating efficiency and launched restructuring initiatives that resulted in restructuring charges of $3.5 related to the severance of 23 positions. The remaining reserve of $3.5 as of March 31, 2012 related to the accrual is expected to be paid by the end of 2012.

Details of our 2011 restructuring initiatives are as follows:

In July 2011, we approved plans to discontinue production at our leased powder polyester resins facility in Suzano, Brazil. These plans resulted in a restructuring charge of $9.4 in 2011, of which $1.7 related to the severance of 27 positions, $4.0 related to asset write-offs, and $3.7 related to decommissioning activities and lease termination costs, all of which related to our Coating Resins segment. The plant has ceased operations and decommissioning is expected to be completed in the second quarter of 2012. We are also pursuing a sale of the manufacturing assets located at the facility.

In April 2011, we approved plans to realign the supporting structure of our Coating Resins segment to meet the current business needs. This plan was developed in response to continued commoditization of certain product lines as well as a lack of recovery in certain end markets, and was an outcome of our overall review regarding the cash versus the growth classification of product lines within the segment. These actions resulted in a restructuring charge of $10.3 in 2011 related to severance for the elimination of 80 positions in the segment's commercial, technical and administrative functions, primarily in Europe.

In the first quarter of 2012, we recorded net favorable adjustments of $0.1 related to these initiatives. The remaining reserve of $3.2 at March 31, 2012 for the above initiatives is expected to be paid through the end of 2012.

Details of our 2010 restructuring initiatives are as follows:

In the fourth quarter of 2010, we initiated restructuring actions in our Coating Resins segment at our San Fernando, Spain facility after reaching agreement for the transfer of the site to the local municipality in exchange for monetary consideration. These actions resulted in a restructuring charge of $6.6 related to the severance of 38 positions, offset by credits of $3.6 primarily related to the reversal of asset retirement obligations. During 2011, we recorded an additional restructuring charge of $1.1 related to these actions.

In September 2010, we approved plans to consolidate manufacturing activities at one of our European sites included in our Coating Resins segment. These plans resulted in a restructuring charge of $4.0 in 2010, of which $1.5 related to the severance of nine positions, and $2.5 related to the write-down of certain manufacturing assets. During 2011, we recorded an additional restructuring charge of $0.2 related to these plans.

In May 2010, we approved plans to exit the production of certain phosphorus derivative products at our Mt. Pleasant, Tennessee facility. These plans resulted in a restructuring charge of $5.5 in 2010, of which $0.4 related to the severance of 10 positions, $1.7 related to asset write-offs, and $3.4 related to decommissioning activities, all of which related to our In-Process Separation segment. During 2011, we recorded an additional restructuring charge of $1.1 related to these plans.

The remaining reserve of $2.3 at March 31, 2012 for our 2010 restructuring initiatives is expected to be paid through the end of 2012.

Details of our 2009 restructuring initiatives are as follows:

In 2009, we initiated restructuring actions across all segments and corporate functions. These actions were taken in response to the downturn in the global economy, which especially impacted the automotive, construction and general industrial markets that we serve, and led to a significant reduction in our sales and operating profitability. The following summarizes the details of the restructuring initiatives launched in 2009, which resulted in $91.9 of restructuring charges for the year ended December 31, 2009.

In 2009, we launched restructuring initiatives at several of our In-Process Separation, Additive Technologies, and Coating Resins manufacturing locations, which resulted in restructuring charges totaling $71.2 of which $41.2 was associated with severance and other employee benefits and $30.0 was associated with asset write-downs and accelerated depreciation. The manufacturing locations impacted by these initiatives included:

•

Closure of our manufacturing facility in La Llagosta, Spain and transfer of the manufacturing of most of the liquid coating resins products produced at the site to our facility in Werndorf, Austria.

•

Transfer of the manufacturing of our powder coating resins product line from Drogenbos, Belgium to our manufacturing facility in Bassano, Italy and the consolidation or elimination of supply chain, sales, marketing and administrative functions at the site.

•

Transfer of the manufacturing of certain liquid coating resins products from our Hamburg, Germany site to our facility in Werndorf, Austria and the consolidation or elimination of certain manufacturing, supply chain, and administrative functions at the site.

•

Conversion of our manufacturing facility in Antofagasta, Chile into a blending and distribution facility to support the Mining business and elimination of manufacturing functions at the site.

•

Closure of our manufacturing facility in Bogota, Colombia.

The above manufacturing restructuring initiatives included the elimination of 374 positions. During 2010 we recorded a net favorable adjustment of $0.9.

We launched restructuring initiatives across our Engineered Materials segment in response to inventory destocking by parts manufacturers that supply large commercial aircraft manufacturers as well as a sharper than expected decline in business and regional jet production rates. These initiatives resulted in $3.6 of restructuring expenses for severance and employee benefits related to the elimination of 230 positions; during 2010 we recorded a net favorable adjustment of $0.5.

We launched several initiatives throughout 2009 in our In-Process Separation, Additive Technologies, and Coating Resins segments and corporate functions across sales, marketing, manufacturing, supply chain, research and development, and administrative functions, including our initiative to establish a shared services center. These initiatives resulted in $17.1 of charges related to severance and employee benefits associated with the elimination of 388 positions; during 2010 we recorded net favorable adjustments of $2.4.

During 2011, we recorded net favorable adjustments of $0.5 related to our 2009 restructuring initiatives. For the three months ended March 31, 2012, we recorded net favorable adjustments of $0.1. All of the aforementioned initiatives were substantially complete.

The remaining reserve at March 31, 2012 of $0.7 relating to 2009 restructuring initiatives is expected to be paid through 2014.


Restructuring Initiatives:	2009			2010			2011			2012		Total
Balance December 31, 2010	$	10.7		$	8.7			0.0			0.0	$	19.4

2011 charges (credits)		(0.5	)		2.4			19.7			0.0		21.6
Non-cash items		0.0			0.0			(3.8	)(2)		0.0		(3.8	)
Cash payments		(9.1	)(1)		(8.3	)		(10.4	)		0.0		(27.8	)
Currency translation adjustments		0.2			0.1			(1.4	)		0.0		(1.1	)

Balance December 31, 2011	$	1.3		$	2.9		$	4.1		$	0.0	$	8.3

First quarter charges (credits)		(0.1	)		0.0			(0.1	)		3.5		3.3
Non-cash items		0.0			0.0			0.0			0.0		0.0
Cash payments		(0.5	)		(0.7	)		(0.9	)		0.0		(2.1	)
Currency translation adjustments		0.0			0.1			0.1			0.0		0.2

Balance March 31, 2012	$	0.7		$	2.3		$	3.2		$	3.5	$	9.7

(1)	Includes a $5.4 payment to an insurance company to transfer a long term severance liability.

(2)	Includes a $4.0 charge for the write-off of plant assets at our manufacturing facility in Brazil; offset by reversals of certain asset retirement obligations.