Avon 2009 Annual Report Download - page 94

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restructuring Charges –2007
During 2007 and January 2008, exit and disposal activities that
are apart of our 2005 Restructuring Program were approved.
Specific actions for this phase of our multi-year restructuring
plan included:
•the reorganization of certain functions, primarily sales-related
organizations;
•the restructure of certain international direct-selling operations;
•the realignment of certain of our distribution and manufacturing
operations, including the realignment of certain of our Latin
America distribution operations;
•automation of certain distribution processes; and
•outsourcing of certain finance, customer service, and
information technology processes.
The outsourcing of some information technology processes and
the realignment of some Latin America distribution operations
are expected to be completed by the end of 2011. All other
actions described above were completed by the end of 2009.
During 2007, we recorded total costs to implement in 2007 of
$158.3 associated with our 2005 Restructuring Program, and the
costs consisted of the following:
•charges of $118.0 for employee-related costs, including
severance, pension and other termination benefits;
•favorable adjustments of $8.0, primarily relating to certain
employees pursuing reassignments to other positions and
higher than expected turnover (employees leaving prior to
termination); and
•other costs to implement of $48.3 forprofessional service fees
associated with our initiativestooutsource certain human
resource, finance, customer service, and information technology
processes and accelerated depreciation associated with our
initiatives to realign certain distribution operations and close
certainmanufacturing operations.
Of the total costs to implement, $157.3 was recorded in selling,
general and administrative expenses and $1.0 was recorded in
cost of sales in 2007.
Approximately 95% of these charges are expected to result in
future cash expenditures, with amajority of the cash payments
made during 2009.
Restructuring Charges –2008
During 2008, we recorded total costs to implement $60.6
associated with previously approved initiatives that are part of
our 2005 Restructuring Program, and the costs consisted of the
following:
•net charges of $19.1 primarily for employee-related costs,
including severance and pension benefits;
•implementation costs of $30.5 for professional service fees,
primarily associated with our initiatives to outsource certain
finance and human resource processes; and
•accelerated depreciation of $11.0 associated with our initiatives
to realign some distribution operations and close some
manufacturing operations.
Of the total costs to implement, $57.5 was recorded in selling,
general and administrative expenses and $3.1 was recorded in
cost of sales for 2008.
Restructuring Charges –2009
During 2009, we recorded total costs to implement of $20.1
associated with previously approved initiatives that are part of
our 2005 Restructuring Program, and the costs consisted of
the following:
•net charges of $4.7 primarily for employee-related costs,
including severance and pension benefits;
•implementation costs of $9.6 for professional service fees,
primarily associated with our initiatives to outsource certain
finance processes and realign certain distribution operations;
and
•accelerated depreciation of $5.8 associated with our initiatives
to realign some distribution operations.
Of the total costs to implement, $19.8 was recorded in selling,
general and administrative expenses and $.3 was recorded in
cost of sales for 2009.