Energizer 2000 Annual Report Download - page 32

ENERGIZER 2000 ANNUAL REPORT
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The 1999 restructuring plan provided for the termination of
approximately 170 production and administrative employees and
the closure of one plant in Asia. This plant closure was precipitated
by the financial problems in the Asian market, which resulted
in contractions in battery markets in this area. Substantially all
actions associated with these charges were completed as of
September 30, 2000.
The remaining $2.5 represents additional net provisions related
to prior years’ restructuring plans. Additional termination benefits
of $5.5 related to the 1997 restructuring plan primarily represent
enhanced severance related to a European plant closing. Additional
provisions for other cash costs of $1.8 were recorded for fixed asset
disposition costs for previously held for use assets related to the
1997 restructuring plan that were idled and held for disposal. Other
non-cash charges of $2.1 relate to inventory write-offs, which were
more than offset by a reclassification of $4.5 from other comprehen-
sive income to net income of cumulative translation adjustment for a
subsidiary sold in connection with the 1997 plan. Also recorded in
1999 were asset proceeds greater than anticipated of $5.4 related to
1994, 1995 and 1997 restructuring plans.
During 1998, Energizer recorded net after-tax provisions for restruc-
turing of $12.8, or $21.3 on a pre-tax basis, of which $.3 represents
inventory write-downs and is classified as cost of products sold in
the Consolidated Statement of Earnings. Of the net pre-tax charge,
$36.5 related to 1998 restructuring plans, including a voluntary
early retirement option offered to most U.S. Energizer employees
meeting certain age and service requirements and European
business operations restructuring, primarily a reorganization
of European sales forces and related employee reductions.
The total 1998 pre-tax charge of $36.5 consisted of termination
benefits of $29.3, which provided for the termination or early
retirement of approximately 420 sales and administrative employees,
other cash costs of $4.6, fixed asset impairments of $1.1 and a
non-cash investment write-off of $1.5. The other cash costs of $4.6
consisted of demolition costs of $1.5 and environmental exit costs
of $.8, both relating to assets held for disposal, lease termination
costs of $1.6 and other exit costs of $.7. Except for disposition of
certain assets held for disposal, substantially all actions associated
with the 1998 charges were complete as of September 30, 2000.
In addition, net reversals of $15.2, that related to prior years’
restructuring plans, were recorded in 1998, comprised of $3.7
of additional charges offset by $18.9 of reversals of prior years’
charges. The additional charges primarily related to asset disposi-
tion costs of $2.6 for previously held for use assets that were idled
and held for disposal. The reversals included $9.4 of greater than
anticipated proceeds from asset sales related to the 1994, 1995
and 1996 restructuring plans. In addition, $8.5 of termination
benefits recorded in 1997 were reversed in 1998 due primarily
to the modification of a European plant closing plan, driven by
the changing business environment in Europe. The modifications
resulted in the termination of approximately 200 fewer employees
than originally anticipated.
As of September 30, 2000, except for the disposition of certain
assets held for disposal, substantially all activities associated with
1994 through 1997 restructuring plans are complete. The remaining
accrual related to these plans was $2.1 at September 30, 2000 and
primarily represents asset disposition costs. The carrying value of
assets held for disposal under all restructuring plans was $6.7 at
September 30, 2000.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (Dollars in millions except per share data)