Black & Decker 2010 Annual Report Download - page 119

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O. RESTRUCTURING AND ASSET IMPAIRMENTS
At January 1, 2011, restructuring reserves totaled $101.2 million. A summary of the restructuring reserve
activity from January 2, 2010 to January 1, 2011 is as follows (in millions):
1/2/10 Acquisitions
Net
Additions Usage Currency 1/1/11
2010 Actions
Severance and related
costs ................ $— $— $205.8 $(124.6) $0.5 $81.7
Asset impairments ........ — — 24.0 (24.0) — —
Facility closure .......... — — 2.7 (1.1) — 1.6
Other ................. — — 7.0 (6.0) 0.1 1.1
Subtotal 2010 actions .... — — 239.5 (155.7) 0.6 84.4
Pre-2010 Actions
Severance and related
costs ................ 44.3 3.5 (0.9) (27.1) (3.7) 16.1
Asset impairments ........ — — — — — —
Facility closure .......... 1.9 — 3.9 (5.1) — 0.7
Other ................. 0.2 — 0.1 (0.3) — —
Subtotal Pre-2010
actions ............. 46.4 3.5 3.1 (32.5) (3.7) 16.8
Total.................. $46.4 $3.5 $242.6 $(188.2) $(3.1) $101.2
2010 Actions: During 2010, the Company recognized $224.3 million of restructuring charges and asset
impairments associated with the Black & Decker merger and acquisition of SSDS. Of those charges,
$194.4 million relates to severance charges associated with the reduction of 3,000 employees, $20.2 million
relates to asset impairments, $2.7 million relates to facility closure costs, and $7.0 million represents other
charges.
In addition, the Company continued to initiate cost reduction actions in 2010 that were not associated with the
Black & Decker merger and SSDS acquisition, resulting in severance and related charges of $11.4 million
pertaining to the reduction of approximately 300 employees, and asset impairment charges of $3.8 million.
Of the $239.5 million recognized for these 2010 actions, $155.7 million has been utilized to date, with
$84.4 million of reserves remaining as of January 1, 2011, the majority of which are expected to be utilized in
2011. Usage includes $15.0 million the majority of which ultimately will entail cash payment in a future
period as it relates to a defined benefit plan for severed Black & Decker executives which is classified in
Post-Retirement Benefits on the Consolidated Balance Sheet.
Pre-2010 Actions: During 2009 and 2008 the Company initiated cost reduction actions in various businesses
in response to sales volume declines associated with the economic recession. Charges recognized in 2010
associated with these initiatives amounted to $3.1 million.
As of January 2, 2010, the reserve balance related to these pre-2010 actions totaled $46.4 million. As a result
of the Merger and the acquisition of SSDS, the Company has assumed $3.5 million of restructuring reserves
recorded by those companies prior to the Merger and acquisition.
Utilization of the reserve balance related to Pre-2010 actions, including usage of those reserves acquired as
part of the Merger, was $32.5 million in 2010. The remaining reserve balance of $16.8 million is expected to
be utilized predominantly in 2011.
Segments: The $242.6 million of charges recognized in 2010 includes: $126.4 million pertaining to the CDIY
segment; $64.2 million pertaining to the Security segment; $12.2 million pertaining to the Industrial segment;
and $39.8 million pertaining to non-operating entities.
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