Avon 2005 Annual Report Download - page 45

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2005฀ANNUAL฀REPORT฀฀65
The liability balances for these charges were as follows:
Employee
Related Asset Inventory AFCT Contract
Costs Write-offs Write-offs Write-offs Termination Total
2005 Charges $30.4 $ 1.4 $ 8.4 $11.4 $ – $ 51.6
Cash payments (.5) – – – – (.5)
Non-cash write-offs (.7) (1.4) (8.4) (11.4) – (21.9)
Foreign exchange – – – – – –
Ending Balance $29.2 $ – $ – $ – $ – $ 29.2
Total charges incurred to date $30.4 $ 1.4 $ 8.4 $11.4 $ – $ 51.6
Total expected charges $32.7 $ 1.8 $ 8.4 $11.4 $1.1 $ 55.4
Non-cash write-offs associated with employee-related costs are the result of settlement or curtailment charges for pension plans due to the
initiatives implemented.
The charges by reportable business segment were as follows:
North Latin Asia
America America Europe Pacific Corporate Total
Current quarter charges: $ 6.9 $ 3.5 $ 12.7 $ 22.4 $ 6.1 $ 51.6
Costs recorded to date: 6.9 3.5 12.7 22.4 6.1 51.6
Total expected costs: 6.9 3.5 15.5 23.4 6.1 55.4
In addition to the charges included in the table above, we will
incur other costs to implement such as accelerated deprecia-
tion and consulting and other professional services. As noted
previously, we expect to incur $300.0 to $500.0 to implement all
restructuring initiatives, including other costs to implement these
initiatives, over the next several years. The amounts shown in
the table above relate to initiatives that have been approved and
recorded in the financial statements to date as the costs are prob-
able and estimable.
Special Charges – Fourth Quarter 2001
In 2001, we recorded Special charges of $97.4 pretax primarily
associated with facility rationalizations and workforce reduc-
tion programs related to implementation of certain Business
Transformation initiatives. While project plans associated with
these initiatives did not change, we experienced favorable adjust-
ments to our original cost estimates and, as a result, reversed
pretax amounts totaling $2.5 and $2.1 in 2004 and 2003, respec-
tively, in the marketing, distribution and administrative line in the
Consolidated Statements of Income. The favorable adjustments
primarily related to certain employees pursuing reassignments in
other Avon locations, lower severance costs resulting from higher
than anticipated lump-sum distributions (associates who elected
lump-sum distributions did not receive benefits during the sever-
ance period) and favorable contract termination negotiations.
There was no remaining liability at December 31, 2005.