Black & Decker 2011 Annual Report Download - page 97

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85
O. RESTRUCTURING AND ASSET IMPAIRMENTS
At December 31, 2011 restructuring reserves totaled $84.1 million. A summary of the restructuring reserve activity from January 1,
2011 to December 31, 2011 is as follows (in millions):
1/1/11
Acquisitions
Net
Additions
Usage
Currency
12/31/11
2011 Actions
Severance and related costs………………………
$ — $ 5.7 $ 67.0
$ (17.4) $ (1.3) $ 54.0
Asset impairments………………………………..
— — 0.2
(0.2) —
—
Facility closure…………………………………...
— — 2.7
(2.7) —
—
Other……………………………………………...
— — 1.6
(1.5) —
0.1
Subtotal 2011 actions……………...………
— 5.7 71.5
(21.8) (1.3) 54.1
Pre-2011 Actions
Severance and related costs………………………
97.8 — (5.7) (65.5) 1.8
28.4
Facility closure…………………………………...
2.3 — 3.9
(5.0) —
1.2
Other……………………………………………...
1.1 — 1.3
(2.0) —
0.4
Subtotal Pre-2011 actions………………….
101.2 — (0.5) (72.5) 1.8
30.0
Total……………………………………………...
$ 101.2 $ 5.7 $ 71.0
$ (94.3) $ 0.5
$ 84.1
2011 Actions: During 2011, the Company recognized $68.6 million of restructuring charges associated with the Merger, Niscayah,
and other acquisitions, relating to activities initiated in the current year. Of those charges, $64.3 million relates to severance charges
associated with the reduction of 1,425 employees, $2.5 million relates to facility closure costs, $0.2 million relates to asset
impairments, and $1.6 million represents other charges.
As a result of the Niscayah acquisition, the Company has assumed $5.7 million of restructuring reserves recorded by Niscayah prior to
the acquisition as part of legacy cost reduction initiatives in 2010.
In addition, the Company continued to initiate cost reduction actions in 2011 that were not associated with the Merger or other
acquisitions, resulting in severance and related charges of $2.7 million pertaining to the reduction of 83 employees, and facility
closure costs of $0.2 million.
Of the $71.5 million recognized for 2011 actions, $21.8 million has been utilized to date, with $54.1 million of reserves remaining as
of December 31, 2011. The Company expects the vast majority to be utilized in 2012.
Pre-2011 Actions: For the year ended January 1, 2011 the Company initiated restructuring activities associated with the Merger and
acquisition of Stanley Solutions de Sécurité (“SSDS”). Charges recognized in 2011 associated with these prior year initiatives
amounted to $7.2 million, offset by $7.7 million of releases of reserves related to residual liabilities, which included $0.5 million of
reserve releases not associated with the Merger and other acquisitions.
As of January 1, 2011, the reserve balance related to these pre-2011 actions totaled $101.2 million. Utilization of the reserve balance
related to pre-2011 actions was $72.5 million in 2011. The vast majority of the remaining reserve balance of $30.0 million is expected
to be utilized in 2012.
Segments: The $71.0 million of charges recognized in 2011 includes $31.0 million pertaining to CDIY; $30.1 million pertaining to
Security; and $9.9 million pertaining to Industrial.
P. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
The Company classifies its business into three reportable segments, which also represent its operating segments: Construction & Do It
Yourself (“CDIY”), Security, and Industrial.
The CDIY segment is comprised of the professional power tool and accessories businesses, the consumer power tool business and the
hand tools, fasteners & storage business. The professional power tool and accessories business sells professional grade corded and
cordless electric power tools and equipment including drills, impact wrenches and drivers, grinders, saws, routers and sanders. The
consumer power tool business sells corded and cordless power tools, lawn and garden products and home products. The hand tools,
fasteners & storage business sells measuring and leveling tools, planes, hammers, demolition tools, knives, saws and chisels.
Fastening products include pneumatic tools and fasteners including nail guns, nails, staplers and staples. Storage products include tool
boxes, sawhorses and storage units.