Avon 2009 Annual Report Download - page 40

PART II
to implement, net of adjustments, of $524.3 through December
31, 2009, ($20.1 in 2009, $60.6 in 2008, $158.3 in 2007,
$228.8 in 2006 and $56.5 in 2005) for actions associated with
our restructuring initiatives under the 2005 Restructuring Pro-
gram, primarily for employee-related costs, including severance,
pension and other termination benefits, and professional service
fees related to these initiatives.
The costs to implement restructuring initiatives during 2005
through 2009 are associated with specific actions, including:
•organization realignment and downsizing in each region and
global through aprocess called “delayering,” taking out layers
to bring senior management closer to operations;
•the phased outsourcing of certain services, including certain
finance, information technology, human resource and
customer service processes, and the move of certain services
from markets to lower cost shared service centers;
•the restructure of certain international direct-selling
operations;
•the realignment of certain distribution and manufacturing
operations, including the realignment of certain of our North
America and Latin America distribution operations;
•the automation of certain distribution processes;
•the exit of certain unprofitable operations and product lines;
and
•the reorganization of certain functions, primarily sales-related
organizations.
Actions implemented under these restructuring initiatives
resulted in savings of approximately $300 in 2009, as compared
to savings of approximately $270 in 2008. We expect to achieve
annualized savings of approximately $430 once all initiatives are
fully implemented by 2011-2012. We expect the savings to
reach approximately $350 in 2010.
2009 Restructuring Program
In February 2009, we announced anew restructuring program
under our multi-year turnaround plan. The restructuring initiatives
under the 2009 Restructuring Program focus on restructuring
our global supply chain operations, realigning certain local business
support functions to amore regional basis to drive increased
efficiencies, and streamlining transaction-related services, includ-
ing selective outsourcing. We expect to record total restructuring
charges and other costs to implement these restructuring initia-
tives in the range of $300 to $400 before taxes under the 2009
Restructuring Program. We have recorded total costs to implement,
net of adjustments, of $151.3 through December 31, 2009, for
actions associated with our restructuring initiatives under the
2009 Restructuring Program, primarily for employee-related
costs, including severance, pension and other termination bene-
fits, and professional service fees related to these initiatives.
Actions implemented under these restructuring initiatives resulted
in savings of approximately $15 in 2009. We are targeting
annualized savings under the 2009 Restructuring Program of
approximately $200 upon full implementation by 2012-2013.
We expect the savings to reach approximately $75 in 2010.
See Note 14, Restructuring Initiatives, on pages F-29 through
F-33 of our 2009 Annual Report.
New Accounting Standards
Information relating to new accounting standards is included in
Note 2, New Accounting Standards, of our consolidated financial
statements contained in this 2009 Annual Report.