Gates continues to undertake various restructuring and other strategic initiatives to drive increased productivity in all aspects of our operations. These actions include efforts to consolidate our manufacturing and distribution footprint, scale operations to current demand levels, streamline our selling, general and administrative (“SG&A”) back-office functions and relocate certain operations to lower cost locations.

Overall costs associated with our restructuring and other strategic initiatives have been recognized in the condensed consolidated statements as set forth below. Expenses incurred in relation to certain of these actions qualify as restructuring expenses under U.S. GAAP.


	Three months ended				Six months ended
(dollars in millions)	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Restructuring expenses:
—Severance expense (income)	$	0.1	$	0.3	$	(0.5)	$	4.4
—Non-severance labor and benefit expenses	0.1		0.5		0.1		0.8
—Consulting expenses	0.5		0.4		1.5		0.9
—Other net restructuring expenses	0.9		1.0		1.7		1.6








Total restructuring expenses	$	1.6	$	2.2	$	2.8	$	7.7

Expenses related to other strategic initiatives:
—Severance expenses included in cost of sales	—		—		—		0.5
—Severance expenses included in SG&A	—		0.3		0.1		0.9

Total expenses related to other strategic initiatives	$	—	$	0.3	$	0.1	$	1.4

Restructuring and other strategic initiatives during the three and six months ended June 29, 2024 included $0.8 million and $1.6 million, respectively, of costs related to the relocation of certain production activities in Mexico. Other restructuring costs incurred during the three and six months ended June 29, 2024 included legal and consulting expenses, and costs associated with prior period facility closures or relocations in several countries.

Restructuring and other strategic initiatives during the three and six months ended July 1, 2023 related primarily to severance and other non-labor costs related to relocating certain production activities in China, Mexico and Europe. During the three months ended July 1, 2023, we also incurred additional labor and severance costs of $0.5 million, related to relocation and integration of certain support functions into our regional shared service center in Europe.

As indicated above, restructuring expenses, as defined under U.S. GAAP, form a subset of our total expenses related to restructuring and other strategic initiatives. These expenses include the impairment of inventory, which is recognized in cost of sales. Analyzed by segment, our restructuring expenses were as follows:


	Three months ended				Six months ended
(dollars in millions)	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Power Transmission	$	0.5	$	1.0	$	0.8	$	5.7
Fluid Power	1.1		1.2		2.0		2.0
Continuing operations	$	1.6	$	2.2	$	2.8	$	7.7

The following summarizes the reserve for restructuring expenses for the six months ended June 29, 2024 and July 1, 2023, respectively:


	Six months ended
(dollars in millions)	June 29, 2024		July 1, 2023
Balance as of the beginning of the period	$	5.1	$	7.5
Utilized during the period	(5.4)		(8.3)
Charge for the period	3.5		8.1
Released during the period	(0.7)		(0.4)
Foreign currency translation	(0.1)		0.1
Balance as of the end of the period	$	2.4	$	7.0

Restructuring reserves, which are expected to be utilized during 2024 and 2025, are included in the condensed consolidated balance sheet within the accrued expenses and other current liabilities line.