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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
63
14. Restructuring Charges and Asset Impairments
2009 Program
In 2009, we announced that we were undertaking a series of strategic transformation initiatives designed to transform and enhance the
way we operate as a global company (the 2009 Program). The program aims to enhance our responsiveness to changing market
conditions and create improved processes and systems to further enable us to invest in future growth in areas such as our global
customer interactions and product development processes. Total pre-tax costs for this program costs were approximately $385
million. At the end of 2011, the 2009 Program is substantially completed and we do not anticipate any further significant charges
under this program. Most of the costs were cash-related charges. The majority of the remaining restructuring payments are expected
to be paid over the next 12 – 24 months. Due to certain international labor laws and long-term lease agreements, some payments will
extend beyond 24 months. We expect that cash flows from operations will be sufficient to fund these payments.
During 2011, we recorded pre-tax restructuring charges and asset impairments associated with this program of $138 million, which
included $103 million for employee severance and benefits costs, an $8 million pension and retiree medical curtailment charge, asset
impairments of $13 million and other exit costs of $13 million. Additional asset impairment charges of $17 million for the
impairment of certain intangible assets unrelated to this program were also recorded during 2011 (See Note 6).
Activity in the reserves for the restructuring actions taken in connection with the 2009 Program and asset impairments for the years
ended December 31, 2011 and 2010 is as follows:
Severance and
benefits costs
Pension and
Retiree
Medical Asset
impairments Other exit
costs Total
Balance at January 1, 2010 $ 45,895 $ - $ - $ 6,807 $ 52,702
Expenses 115,557 23,620 14,515 38,233 191,925
Gain on sale of facility - - (8,897) - (8,897)
Cash (payments) receipts (73,283) - 8,897 (38,253) (102,639)
Non-cash charges - (23,620) (14,515) - (38,135)
Balance at December 31, 2010 88,169 - - 6,787 94,956
Expenses 103,303 8,178 30,030 13,320 154,831
Gain on sale of facility - - (601) - (601)
Cash (payments) receipts (84,899) - 601 (19,286) (103,584)
Non-cash charges - (8,178) (30,030) - (38,208)
Balance at December 31, 2011 $ 106,573 $ - $ - $ 821 $ 107,394