Avon 2013 Annual Report Download - page 117

Non-cash write-offs associated with employee-related costs are the result of settlements, curtailments and special termination benefits for
pension and postretirement benefits plans due to the initiatives implemented.
The following table presents the restructuring charges incurred to-date, net of adjustments, under our $400M Cost Savings Initiative, along
with the estimated charges expected to be incurred on approved initiatives under the plan:
Employee-
Related
Costs
Inventory/
Asset
Write-offs
Currency
Translation
Adjustment
Write-offs
Contract
Terminations/
Other Total
Charges incurred to date $95.6 $ .7 $ (3.5) $ 6.7 $ 99.5
Estimated charges to be incurred on approved initiatives 2.2 – 6.0 7.7 15.9
Total expected charges on approved initiatives $97.8 $ .7 $ 2.5 $14.4 $115.4
The charges, net of adjustments, of initiatives under the $400M Cost Savings Initiative by reportable business segment were as follows:
Latin
America
Europe,
Middle East
& Africa
North
America
Asia
Pacific Corporate Total
2012 $12.9 $ 1.1 $18.0 $12.9 $ 3.6 $ 48.5
2013 11.1 15.6 5.3 1.3 17.7 51.0
Charges incurred to date 24.0 16.7 23.3 14.2 21.3 99.5
Estimated charges to be incurred on approved initiatives 1.9 12.1 – .4 1.5 15.9
Total expected charges on approved initiatives $25.9 $28.8 $23.3 $14.6 $22.8 $115.4
As noted previously, for the initiatives approved to-date, we expect to record total costs to implement restructuring in the range of $140 to
$150 before taxes under the $400M Cost Savings Initiative. 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 have incurred and will incur other costs to implement restructuring initiatives such as other professional services and
accelerated depreciation.
Additional Restructuring Charges 2012
In an effort to improve operating performance, we identified certain actions in 2012 that we believe will enhance our operating model,
reduce costs and improve efficiencies. In addition, we have relocated our corporate headquarters in New York City.
Restructuring Charges – 2013
As a result of the analysis and the actions taken, during 2013, we recorded total costs to implement of $5.0 in selling, general and
administrative expenses in the Consolidated Statements of Income, primarily consisting of contract termination costs of $6.1 associated with
the relocation of our corporate headquarters, partially offset by other immaterial adjustments to the reserve for employee-related costs.
Restructuring Charges – 2012
During 2012, we recorded total costs to implement of $73.9 associated with previously approved initiatives, and the costs consisted of the
following:
• net charge of $53.4 primarily for employee-related costs, including severance and pension benefits;
• contract termination costs of $12.0 associated with the relocation of our corporate headquarters;
A V O N 2013 F-47