North Face 2002 Annual Report Download - page 58

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76
Activity in the 2000 restructuring accrual is summarized as follows:
Lease and
Facilities Exit Other Asset Contract
In thousands Severance Costs Write-downs Termination Total
Total restructuring costs $ 21,487 $ 20,369 $ 59,746 $14,963 $116,565
Noncash charges:
Inventories – – (22,392) – (22,392)
Goodwill – – (23,819) – (23,819)
Other – (19,000) (13,535) – (32,535)
Cash payments (1,753) (8) – (154) (1,915)
Balance December 30, 2000 19,734 1,361 – 14,809 35,904
Cash payments (15,517) (912) – (3,450) (19,879)
Reduction of accrual (2,573) – – (4,495) (7,068)
Balance December 29, 2001 1,644 449 – 6,864 8,957
Cash payments (1,594) (282) – (3,397) (5,273)
Reduction of accrual (50) (167) – (1,031) (1,248)
Balance January 4, 2003 $– $ – $ – $ 2,436 $ 2,436
The restructuring liability reduction of $1.2 million in 2002 relates primarily to favorable settlements of leases
and other contracts. Also in 2002, there were $3.3 million of reductions in noncash allowances due to better than
planned realization on discontinued product lines. The restructuring liability reductions of $7.1 million in 2001 relates
primarily to a favorable settlement of a contract. Also in 2001, there were $3.9 million of reductions in noncash
allowances due to lower losses on assets related to the integration of the domestic intimate apparel business units.
Actions related to the Strategic Repositioning Program and the 2000 restructuring are proceeding as planned.
The remaining Strategic Repositioning Program and 2000 restructuring accruals are expected to be adequate to
cover the remaining costs. Severance and other cash payments will be made through 2003.
Net restructuring costs were recorded as follows:
In thousands 2002 2001 2000
Cost of products sold $17,848 $ 63,743 $ 53,645
Marketing, administrative and general expenses 8,494 46,712 36,089
Other operating expense, net –3,963 26,831
$26,342 $114,418 $116,565
Note P – Income Taxes
The provision for income taxes is computed based on the following amounts of income from continuing operations
before income taxes and cumulative effect of change in accounting policies:
In thousands 2002 2001 2000
Domestic $439,744 $322,375 $425,238
Foreign 121,984 47,010 2,080
$561,728 $369,385 $427,318