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or Disposal Activities, as appropriate. Employee termination benefit charges include severance, medical and
other benefits and are included in Restructuring and other, net on the Consolidated Statements of Earnings.
The following table presents a rollforward of the liability incurred for employee termination benefits in
connection with the 2007 Restructuring Plan. The liability is included in Accrued liabilities on the
Company’s Consolidated Statements of Financial Position.
Employee
Termination
Benefits
Balance at January 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —
Costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.7
Payments & other
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.6)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.1
(1)
Other consists of pension related items that will be settled through the Company’s pension plans.
For the year ended December 31, 2007, the Company incurred restructuring-related charges of
$6.5 million in its Business segment, $13.9 million in its Consumer segment and $10.4 million in All
other. The Company expects to incur charges related to the 2007 Restructuring Plan of approximately
$14 million in its Business segment, approximately $19 million in its Consumer segment and approximately
$22 million in All other.
The Company also incurred and expects to continue to incur additional charges related to the execution of
its 2007 Restructuring Plan (referred to as “2007 project costs”). These 2007 project costs are incremental
to the Company’s normal operating charges and are expensed as incurred. The 2007 project costs include
such items as compensation costs for overlap staffing, travel expenses, consulting costs and training
costs. The Company expects to incur total pre-tax 2007 project costs of approximately $35 million resulting
in a total of $90 million of expected pre-tax restructuring-related charges and 2007 project costs in
connection with the 2007 Restructuring Plan. Expected cash payments for the restructuring-related
charges and 2007 project costs are approximately $75 million.
For the year ended December 31, 2007, the Company incurred charges, including 2007 project costs, of
$34.2 million for the 2007 Restructuring Plan as follows:
Restructuring-
related
Charges (Note 3)
2007
Project Costs Total
Accelerated depreciation charges/project costs . . . . . . . . . . $ 5.1 $0.8 $ 5.9
Employee termination benefit charges/project costs . . . . . . 25.7 2.6 28.3
Total restructuring-related charges/project costs . . . . . . . . . $30.8 $3.4 $34.2
For the year ended December 31, 2007, the Company incurred restructuring-related charges and 2007
project costs of $6.4 million in its Business segment, $14.9 million in its Consumer segment and
$12.9 million in All other. The Company expects to incur total restructuring-related charges and 2007
project costs of $24 million in its Business segment, $29 million in its Consumer segment and $37 million in
All other.
Of the total pre-tax restructuring-related charges and 2007 project costs of approximately $90 million,
approximately $15 million will impact cost of revenue and $75 million will impact operating expense. The
2007 Restructuring Plan (including related projects) is expected to save approximately $40 million in 2008
with approximately 50% benefiting cost of revenue and 50% benefiting operating expense. Annual savings
beginning in 2009 are expected to approximate $60 million.
The Company expects to incur the additional $56 million of pre-tax restructuring-related charges and 2007
project costs during 2008 with approximately $18 million expected in the first quarter of 2008.
42