This portion of the reorganization plan will result in additional annual savings of $6 million bringing the total reorganization plan savings to $20 million annually.
Also included in reorganization charges is a $8.3 million charge in the Americas, of which $6.9 million relates to the US. Roughly half of these costs are severance costs associated with business realignment and half relate to office rents as a result of utilizing less office space in some markets and office consolidation in other markets.
Also included in reported earnings in the US is the non-recurring legal charge of $10 million primarily related to the settlement of an alleged class action lawsuit regarding our vacation pay policies in Illinois.
While we deny any liability in this matter, we concluded a settlement was in our best interest given the cost of ongoing litigation.Our earnings before non-recurring items of $0.76 per share was favorably impacted $0.04 as a result of a lower than planned income tax rate due to ta benefits from internal reorganizations. Our effective tax rate on earnings before non-recurring items was 45.1% compared to a forecast of 48%. Earnings were also favorably impacted by $0.01 as a result of a lower share count due to share repurchases in the quarter. I'll discuss this in more detail later in the call. Finally, our earnings were unfavorably impacted $0.03 more than expected from exchange rates as a total negative impact was $0.07 per share compared to a forecast of $0.04 per share. The gross profit margin in the quarter came in at 16.6% which is short of expectations and below prior year by 40 basis points. The shortfall from expectations is attributed to lower recruitment revenues and a lower temporary recruitment gross margin in some European countries. Read the rest of this transcript for free on seekingalpha.com