Avon 2015 Annual Report Download - page 129

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The majority of cash payments, if applicable, associated with these charges were made in 2015 and the remaining are expected to be made
during 2016.
Restructuring Charges – 2014
During 2014, we recorded total costs to implement of $83.9 related to the $400M Cost Savings Initiative, in selling, general and
administrative expenses, in the Consolidated Statements of Operations. The costs consisted of the following:
• net charge of $57.9 primarily for employee-related costs, including severance benefits;
• accelerated depreciation of $12.2 associated with the closure and rationalization of certain facilities and other assets;
• contract termination and other charges of $6.3, primarily related to the costs associated with the closure of the France market and the exit
of the Service Model Transformation (“SMT”) facility;
• implementation costs of $3.8 primarily related to professional service fees; and
• charge of $3.7 primarily related to the accumulated foreign currency translation adjustments associated with the closure of the France market.
Restructuring Charges – 2013
During 2013, we recorded total costs to implement of $52.6 related to the $400M Cost Savings Initiative, and the costs consisted of the
following:
• net charge of $45.3 primarily for employee-related costs, including severance and pension benefits;
• contract termination and other charges of $4.6, primarily related to the costs associated with our exit from the Republic of Ireland market;
• accelerated depreciation of $3.4 associated with the closure and rationalization of certain facilities;
• net benefit of $3.5 due to accumulated foreign currency translation adjustments in the second quarter of 2013 primarily associated with
our exit from the Vietnam market;
• implementation costs of $3.5 for professional service fees; and
• net benefit of $.7 due to inventory adjustments in the first and second quarters of 2013.
Of the total costs to implement, $53.3 was recorded in selling, general and administrative expenses and a net benefit of $.7 was recorded in
cost of sales, in the Consolidated Statements of Operations.
The liability balance for the $400M Cost Savings Initiative as of December 31, 2015 is as follows:
Employee-
Related
Costs
Inventory/
Asset
Write-offs
Foreign
Currency
Translation
Adjustment
Write-offs
Contract
Terminations/
Other Total
Balance at December 31, 2012 $ 19.0 $ – $ – $ 1.7 $ 20.7
2013 Charges 45.5 .1 (3.5) 5.1 47.2
Adjustments (.2) (.8) – (.5) (1.5)
Cash payments (40.5) – – (4.8) (45.3)
Non-cash write-offs 2.0 .7 3.5 – 6.2
Foreign exchange .1 – – .1 .2
Balance at December 31, 2013 $ 25.9 $ – $ – $ 1.6 $ 27.5
2014 Charges 64.2 – 3.7 7.4 75.3
Adjustments (6.3) – – (1.1) (7.4)
Cash payments (44.8) – – (6.9) (51.7)
Non-cash write-offs .2 – (3.7) – (3.5)
Foreign exchange (2.1) – – (.1) (2.2)
Balance at December 31, 2014 $ 37.1 $ – $ – $ .9 $ 38.0
2015 Charges .6 – (.4) .3 .5
Adjustments (5.0) – – (.1) (5.1)
Cash payments (25.8) – – (.6) (26.4)
Non-cash write-offs .4 – .4 – .8
Foreign exchange (1.5) – – (.1) (1.6)
Balance at December 31, 2015 $ 5.8 $ – $ – $ .4 $ 6.2
A V O N 2015 F-47
7553_fin.pdf 119