Avon 2010 Annual Report Download - page 102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the restructuring charges incurred to date, net of adjustments, under our 2005 Restructuring Program, along
with the charges expected to be incurred under the plan:
Employee-
Related
Costs
Asset
Write-offs
Inventory
Write-offs
Currency
Translation
Adjustment
Write-offs
Contract
Terminations/
Other Total
Charges incurred to date $332.6 $10.8 $7.2 $11.6 $8.5 $370.7
Charges to be incurred on approved initiatives 1.9 – – – – 1.9
Total expected charges on approved initiatives $334.5 $10.8 $7.2 $11.6 $8.5 $372.6
The charges, net of adjustments, of initiatives approved to date under the 2005 Restructuring Program by reportable business segment were
as follows:
Latin
America
North
America
Central &
Eastern
Europe
Western
Europe,
Middle East
& Africa
Asia
Pacific China Corporate Total
2005 $ 3.5 $ 6.9 $ 1.0 $ 11.7 $18.2 $ 4.2 $ 6.1 $ 51.6
2006 34.6 61.8 6.9 45.1 12.1 2.1 29.5 192.1
2007 14.9 7.0 4.7 65.1 3.6 1.3 12.7 109.3
2008 1.9 (1.1) 1.7 19.0 (0.7) – (3.0) 17.8
2009 1.4 (.1) (.7) (4.4) 11.6 (.2) (2.9) 4.7
2010 2.1 (.1) (.1) (3.9) (1.3) (1.0) (.5) (4.8)
Charges recorded to date $58.4 $74.4 $13.5 $132.6 $43.5 $ 6.4 $41.9 $370.7
Charges to be incurred on approved initiatives 1.9 – – – – – – 1.9
Total expected charges on approved initiatives $60.3 $74.4 $13.5 $132.6 $43.5 $ 6.4 $41.9 $372.6
As noted previously, we expect to record total costs to implement of approximately $519 before taxes for all restructuring initiatives under
the 2005 Restructuring Program, including restructuring charges and other costs to implement. The amounts shown in the tables above as
charges recorded to date relate to initiatives that have been approved and recorded in the financial statements as the costs are probable and
estimable. The amounts shown in the tables above as total expected charges on approved initiatives represent charges recorded to date plus
charges yet to be recorded for approved initiatives as the relevant accounting criteria for recording an expense have not yet been met. In
addition to the charges included in the tables above, we will incur other costs to implement restructuring initiatives such as consulting, other
professional services, and accelerated depreciation.
2009 Restructuring Program
In February 2009, we announced a new restructuring program (the “2009 Restructuring Program”) which targets increasing levels of
efficiency and organizational effectiveness across our global operations. We have approved and announced all of the initiatives that are part
of our 2009 Restructuring Program. The 2009 Restructuring Program initiatives include:
• restructuring our global supply chain operations;
• realigning certain local business support functions to a more regional basis to drive increased efficiencies; and
• streamlining transaction-related services, including selective outsourcing.
We expect to record total restructuring charges and other costs to implement restructuring initiatives in the range of $300 to $310 before
taxes under the 2009 Restructuring Program, with actions to be completed by 2012-2013. Through December 31, 2010, we have
recorded total costs to implement, net of adjustments, of $228.3 ($77.5 in 2010, and $150.8 in 2009) for actions associated with our
restructuring initiatives.