Avon 2003 Annual Report Download - page 69

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Special charges by business segment were as follows:
North Latin Corporate
America* U.S. America Europe and Other Total
Facility rationalizations** $16.8 $14.3 $17.7 $13.2 $ — $62.0
Workforce reduction programs .9 9.7 6.4 2.1 14.0 33.1
Other — 2.1 — — .2 2.3
Total accrued charges $17.7(1) $26.1(2) $24.1(3) $15.3(4) $14.2(5) $97.4
Number of employee terminations 362 460 2,007 533 125 3,487
** Excludes amounts related to the U.S.
** Includes accrued severance and related costs associated with facility rationalizations.
(1) The majority of the special charge within the North America segment related to a plan to outsource jewelry manufacturing through third party vendors, resulting in the closure of a jewelry
manufacturing facility in Puerto Rico.
(2) The special charge within the U.S. segment primarily related to the closure of a manufacturing facility in Suffern, New York. Production was moved to an existing facility in Springdale,
Ohio and to one or more third party manufacturers. To a lesser extent, the special charge also included workforce reduction programs within the marketing and supply chain functions
as well as the closure of four express centers (distribution centers where customers pick up products).
(3) The majority of the special charge within the Latin America segment related to the closure of a manufacturing and distribution facility in Mexico City, Mexico. The project also
included a construction plan to expand an existing facility in Celaya, Mexico, and the movement of the manufacturing and distribution functions on a staged basis to the newly con-
structed site. To a lesser extent, the special charge also included workforce reduction programs in Brazil (primarily in the supply chain function) and in Argentina and Mexico (across
numerous functional areas).
(4) The special charge within Europe primarily related to the closure of a manufacturing facility in the United Kingdom, with most of the production moving to an existing facility in Poland.
(5) The Corporate and other special charge was the result of workforce reduction programs which spanned much of the organization, including the legal, human resources, information
technology, communications, finance, marketing and research and development departments.
Special charges by category of expenditures were as follows:
Accrued Accrued Facility
Severance Cost Asset Special Contract Rationalization
and Related of Sales Impairment Termination Termination and Other
Costs Charge Charge Benefits Costs Costs Total
Facility rationalizations $42.9 $2.5 $5.1 $ 5.0 $2.2 $4.3 $62.0
Workforce reduction programs 26.9 — — 6.2 — — 33.1
Other — — .3 — 1.3 .7 2.3
Total accrued charges $69.8 $2.5 $5.4 $11.2 $3.5 $5.0 $97.4
Notes to Consolidated Financial Statements
notes to statements
88