Staples 2013 Annual Report Download - page 144

STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
C-13
The restructuring charges related to the 2013 Plan are presented within Restructuring charges in the Company's
consolidated statements of income. The table below shows how the $78.3 million of restructuring charges would have been
allocated if the Company had recorded the expenses within the functional departments of the restructured activities (in thousands):
Fiscal Year Ended
February 1, 2014
Cost of goods sold and occupancy costs $ 7,680
Selling, general and administrative 70,610
Total $ 78,290
In 2012, the Company initiated a strategic plan (the “2012 Plan”) aimed at accelerating growth, particularly in the
Company's online businesses. Elements of the 2012 Plan included more fully integrating the Company's retail and online offerings,
restructuring its International Operations segment and improving the productivity of its stores in North America. Pursuant to the
2012 Plan, the Company took the following actions:
closed 46 retail stores in Europe and accelerated the closure of 15 retail stores in the United States;
closed and consolidated certain sub-scale delivery businesses in Europe;
announced its commitment to pursue the sale of PSD;
reorganized certain general and administrative functions in Europe; and
rebranded its business in Australia from the Corporate Express tradename to the Staples tradename (see Note C -
Goodwill and Long-Lived Assets).
As a result of the actions taken under the 2012 Plan, during 2012 the Company recorded pre-tax restructuring charges of
$207.0 million related to continuing operations. Of these amounts, approximately $177 million related to the Company's
International Operations segment and $30 million related to the North American Stores & Online segment. The Company does
not expect to incur material costs in future periods in connection with the 2012 Plan. The actions required under the 2012 Plan
were substantially complete by the end of fiscal 2013.
The table below shows a reconciliation of the beginning and ending liability balances related to each major type of cost
incurred under the 2012 plan (in thousands):
2012 Plan
Contractual
Obligation
Employee
Related Other Total
Accrued restructuring balance as of February 2, 2013 $ 102,561 $ 68,259 $ 6,445 $ 177,265
Cash payments (74,001)(41,597)(6,086)(121,684)
Adjustments 1,754 (12,313) — (10,559)
Foreign currency translations (1,633)(562)(180)(2,375)
Accrued restructuring balance as of February 1, 2014 $ 28,681 $ 13,787 $ 179 $ 42,647
The Company expects that payments related to employee related liabilities associated with the 2012 Plan will be
substantially completed by the middle of fiscal 2014. The Company anticipates payments related to facility lease obligations will
be complete by fiscal year 2024.
In the third quarter of 2013, the Company recorded a net $10.6 million adjustment to reduce the liabilities associated
with the 2012 Plan. The adjustment included a $12.3 million reduction of the liability for employee-related costs, partly offset
by a $1.8 million increase in the liability related to contractual obligations. These adjustments stemmed from changes in facts
and circumstances during 2013. In addition, the Company recorded a $3.6 million adjustment related to other costs associated
with the 2012 Plan.
For the restructuring liabilities associated with the 2012 Plan, $10.4 million of the contractual obligations are included
in Other long-term obligations and the remaining balances are included within Accrued expenses and other current liabilities in
the Company's consolidated balance sheet as of February 1, 2014. As of February 2, 2013, $30.5 million of the contractual
obligations and all of the employee-related and other obligations were included within Accrued expenses and other current liabilities,
and $72.0 million of the contractual obligations were included in Other long-term obligations.