Graco 2009 Annual Report Download - page 54

Newell Rubbermaid Inc. 2009 Annual Report
52
FOOTNOTE 4
RESTRUCTURING COSTS
In the third quarter of 2005, the Company announced a global initiative referred to as Project Acceleration aimed at strengthening and transforming the
Company’s portfolio. Project Acceleration was designed to reduce manufacturing overhead, better align the Company’s distribution and transportation
processes to achieve logistical excellence, and reorganize the Company’s overall business structure to align with the Company’s core organizing concept,
the global business unit, to achieve best total cost. In July 2008, the Company expanded Project Acceleration so that, in addition to the Plan’s original
objectives, it provides for divesting, downsizing or exiting certain product categories to create a more focused and more profitable platform for growth
by eliminating selected low-margin, commodity-like, mostly resin-intensive product categories and reduce the Company’s exposure to volatile commodity
markets, particularly resin.
In total through December 31, 2009, the Company has recorded $420.9 million of costs related to Project Acceleration, of which $172.4 million related
to facility and other exit costs, $187.4 million related to employee severance, termination benefits and employee relocation costs, and $61.1 million related
to exited contractual commitments and other restructuring costs.
The table below summarizes the restructuring costs recognized for Project Acceleration restructuring activities for continuing operations for the years
ended December 31, (in millions):
2009 2008 2007
Facility and other exit costs $ 32.4 $ 46.1 $27.7
Employee severance, termination benefits and relocation costs 48.8 57.5 36.4
Exited contractual commitments and other 18.8 13.6 21.9
$100.0 $117.2(1) $86.0
(1) During 2008, the Company recorded $3.1 million of restructuring charges relating to its 2001 Restructuring Plan, which is not included in the table above but is included in total restructuring costs for the
year ended December 31, 2008.
Restructuring provisions were determined based on estimates prepared at the time the restructuring actions were approved by management, are periodically
updated for changes and also include amounts recognized as incurred. Costs incurred include cash payments and the impairment of assets associated with
vacated facilities. Impairments included in restructuring charges totaled $32.4 million, $46.1 million and $27.7 million for the years ended December 31, 2009,
2008 and 2007, respectively. The impaired assets include vacated land and buildings, land and buildings for which a plan exists to vacate and dispose of the
facility, and machinery and equipment to be sold or otherwise disposed of prior to the end of its original estimated useful life. The impairments primarily result
from the consolidation of manufacturing activities as well as the increased use of sourcing partners.
A summary of the Company’s accrued restructuring reserves for continuing operations as of and for the years ended December 31, 2009 and 2008,
respectively, is as follows (in millions):
December 31, December 31,
2008 Costs 2009
Balance Provision Incurred Balance
Facility exit costs, including impairments $ — $ 32.4 $ (32.4) $ —
Employee severance and termination benefits 30.7 48.8 (56.2) 23.3
Exited contractual commitments and other 20.3 18.8 (27.3) 11.8
$51.0 $100.0 $(115.9) $35.1
December 31, December 31,
2007 Costs 2008
Balance Provision Incurred Balance
Facility exit costs, including impairments $ — $ 46.1 $ (46.1) $ —
Employee severance and termination benefits 22.5 57.5 (49.3) 30.7
Exited contractual commitments and other 16.2 13.6 (9.5) 20.3
$38.7 $117.2 $(104.9) $51.0