5.	Special Charges

During the second quarter of 2017, the Company’s NATG segment incurred special charges in continuing operations and discontinued operations of approximately $0.2 million and $3.5 million, respectively. These charges related to approximately $0.2 million of charges for updating our future lease cash flows expectations related to previously exited retail stores, which are recorded in continuing operations, and $3.2 million recorded within discontinued operations related to the distribution center and NATG corporate headquarters and $0.3 million related to ongoing restitution proceedings against certain former NATG executives. Total NATG segment special charges recorded within continuing operations and discontinued operations for six months ended June 30, 2017 totaled $4.3 million. These charges include $3.7 million for updating our future lease cash flows expectations and $0.6 million related to the ongoing restitution proceedings against certain former NATG executives. All of the previously mentioned NATG charges will require the use of cash.

The Company incurred additional costs related to the sale of the SARL businesses, in the second quarter of 2017, which are included within discontinued operations, totaling $0.9 million. These included $0.3 million of severance and other personnel costs, $0.3 million of accelerated depreciation charges and $0.3 million of additional legal, professional and other costs. For the six months ended June 30, 2017, the Company recorded $24.2 million of costs, all of which were recorded within discontinued operations, and were primarily related to the loss recorded on the sale of the SARL Businesses. Charges related to the sale included $14.4 million in write offs of cumulative translation adjustments, $8.2 million of net asset write offs, $1.0 million in legal, professional and other costs, $0.3 million of severance and other personnel costs and $0.3 million of accelerated depreciation charges. Of these charges approximately $1.3 million require the use of cash.

The Company expects that total additional charges related to the sale of the SARL Businesses after this quarter will be between $1.0 million and $2.0 million, which will be presented in discontinued operations. Additional charges may be incurred in the discontinued SARL Businesses related to certain post closing working capital tests as well as to certain remaining vendor guarantees, provided by the Company, which have a remaining balance as of June 30, 2017 of approximately $0.6 million. These guarantees were revoked by the Company at closing, but remained effective through closing and through a subsequent notice period. Other charges may arise related to statutory tax indemnities given at closing. The Company maintains complete indemnification from the Purchaser related to the vendor guarantees and Purchaser has pledged certain collateral to assure payment.

The Company expects that total additional charges related to the sale of the NATG business after this quarter will be between $1.0 million and $2.0 million which will be presented in discontinued operations. Additional costs may be incurred in NATG for outstanding leased facilities as they are settled or sublet (see Note 1) and any changes in estimates related to the collection of remaining accounts receivable. Most of these anticipated costs will require the use of cash.

The following table details the associated liabilities related to the ETG segment’s severance and other costs recorded within discontinued operations during the second quarter of 2017, the NATG segment’s lease liabilities and other costs and other restructuring charges that remain for the sale of Germany in the prior year that is included in continuing operations (in millions):

	ETG-Severance and other costs			ETG – Lease liabilities and other costs		NATG – Lease liabilities and other exit costs			Total
Balance January 1, 2017	$	0		$	1.2	$	19.3		$	20.5
Charged to expense		0.3			-		3.7			4.0
Paid or otherwise settled		(0.2	)		-		(3.6	)		(3.8	)
Balance June 30, 2017	$	0.1		$	1.2	$	19.4		$	20.7