NOTE 4. 2014 PERFORMANCE IMPROVEMENT PLAN AND OTHER RESTRUCTURING

The 2014 Performance Improvement Plan, approved by the Board of Directors on June 23, 2014, includes the exiting of certain unprofitable retail doors and fragrance license agreements, changes in customer, distribution and supply chain relationships, the discontinuation of certain products, the elimination of approximately 175 employee positions globally, and the closing of the Company's Puerto Rico affiliate. The Company currently estimates that the 2014 Performance Improvement Plan will result in pre-tax charges beginning in the fourth fiscal quarter of 2014 and through fiscal 2015 of $65 million to $72 million.

The estimated pre-tax charges for the 2014 Performance Improvement Plan consist of:

(i)	approximately $17 million to $20 million of exit and contract termination costs related to the closing of the Company's Puerto Rico affiliate, the exiting of unprofitable doors and changes in customer, distribution and supply chain relationships;
(ii)	approximately $11 million to $12 million for employee severance and other related one-time costs (including those related to the closing of the Company's Puerto Rico affiliate); and
(iii)	approximately $37 million to $40 million related to asset impairments, including approximately $17 million to $18 million associated with intangible asset and inventory impairments and exit costs caused by the expiration, non- renewal or wind-down of fragrance license agreements, and $20 million to $22 million associated with discontinuations of certain products, including $7.5 million related to certain Elizabeth Arden branded skincare and color products developed prior to the Elizabeth Arden brand repositioning.

During the three months ended September 30, 2014, we incurred approximately $6.1 million of pre-tax charges in connection with the 2014 Performance Improvement Plan and since inception we have incurred approximately $62.0 million of pre-tax charges in connection with the 2014 Performance Improvement Plan. The pre-tax charges for the three months ended September 30, 2014 and since inception consisted of the following:

*Since Inception:*
				Cost of		Selling,
				Goods		General and
(Amounts in thousands)		Net Sales		Sold		Administrative		Total
Returns and markdowns ⁽¹⁾	$	12,143	$		$		$	12,143
Inventory write-downs ⁽²⁾				30,223				30,223
Asset impairments and related charges⁽³⁾						9,735		9,735
Severance and other employee-related costs⁽⁴⁾						7,189		7,189
Other⁽⁵⁾						2,694		2,694
Total	$	12,143	$	30,223	$	19,618	$	61,984


*Three Months Ended September 30, 2014:*
			Cost of			Selling,
			Goods			General and
(Amounts in thousands)		Net Sales	Sold			Administrative		Total
Returns and markdowns	$	2,679	$		$		$	2,679
Inventory write-downs				38				38
Asset impairments and related charges						61		61
Severance and other employee-related costs						1,151		1,151
Other						2,163		2,163
Total	$	2,679	$	38	$	3,375	$	6,092

(1)	Related to the closing of the Companys Puerto Rico affiliate, exiting of unprofitable doors, changes in customer relationships and non-renewal and expiration of certain fragrance license agreements.
(2)	Related to the expiration, non-renewal and wind-down of fragrance license agreements and discontinuation of certain products.
(3)	Related primarily to the non-renewal and expiration of fragrance license agreements.
(4)	Severance and other employee-related costs associated with reduction in global headcount positions.
(5)	Consists primarily of transition expenses and vendor contract termination costs.

As of September 30, 2014, the related liability balance and activity for costs associated with the 2014 Performance Improvement Plan are as follows:


		Severance and
		Other Employee-
(Amounts in thousands)		Related Costs			Other				Total
Accruals⁽¹⁾	$	6,038		$		531		$		6,569
Cash payments-Fourth Quarter Fiscal 2014		(611	)							(611	)
Liability balance at June 30, 2014		5,427				531				5,958
Accruals⁽¹⁾		1,151				2,163				3,314
Cash payments-First Quarter Fiscal 2015		(4,643	)			(2,694	)			(7,337	)
Liability balance at September 30, 2014 ⁽²⁾	$	1,935		$				$		1,935

(1)	Included in selling, general and administrative expenses in the Company's consolidated statements of operations.
(2)	The Company expects to pay the balance of these liabilities during fiscal 2015.

All of the expenses discussed above, as described in Note 17, have not been attributed to any of the Company's reportable segments and are included in unallocated corporate expenses.