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Newell Rubbermaid Inc. 2007 Annual Report
55
During 2006, the Company received a better indication of the value of assets being disposed of in the Other (Home & Family) segment and also made
changes to a disposal group of assets in the former Cleaning & Organization segment. These assets were previously written down to estimated net realizable
value during the fourth quarter of 2005 as part of Project Acceleration. As a result, the Company reversed $4.8 million of restructuring costs in 2006 due to
a combination of higher proceeds and changes made to a disposal group of assets.
Project Acceleration commenced in December 2005 and resulted in non-cash facility restructuring costs in 2005, aggregated by reportable business
segment, as follows (in millions):
Segment Provision
Cleaning, Organization & Décor $29.3
Office Products 8.6
Tools & Hardware 6.8
Other (Home & Family) 6.6
$51.3
Pre-Project Acceleration Restructuring Activities
The Company announced a restructuring plan (the “2001 Plan”) in 2001. The specific objectives of the 2001 Plan were to streamline the Company’s
supply chain to become the best-cost global provider throughout the Company’s portfolio by reducing worldwide headcount and consolidating duplicative
manufacturing facilities. Under the 2001 Plan, the Company exited 84 facilities, of which 31 pertain to discontinued operations, and reduced headcount by
approximately 12,000. The Company recorded $461.7 million in restructuring costs under the 2001 Plan, including $179.2 million for discontinued operations.
Restructuring provisions were determined based on estimates prepared at the time the specific restructuring actions were approved by management, and
also include amounts recognized as incurred. In 2005, the Company reduced its restructuring reserve by approximately $5.7 million, primarily as a result
of higher proceeds received from the sale of property, plant and equipment and favorable negotiations on exited contracts. Approximately $1.0 million of
pre-Acceleration restructuring reserves remain as of December 31, 2007. While the accounting charges associated with the 2001 Plan were completed in
the second quarter of 2004, the Company continued to selectively approve individual restructuring plans. The following table shows the restructuring costs,
net of reversals, recognized under the terms of the 2001 Plan and for the selective restructuring actions prior to Project Acceleration for the year ended
December 31, 2005, excluding restructuring costs related to discontinued operations (in millions):
2005
Facility and other exit costs $ 7.9
Employee severance and termination benefits 11.1
Exited contractual commitments and other 2.3
Restructuring costs $21.3
Cash paid for restructuring activities, including Pre-Project Acceleration and Project Acceleration restructuring activities, was $53.1 million,
$26.1 million and $34.3 million for 2007, 2006 and 2005, respectively.