Staples 2015 Annual Report Download - page 131

APPENDIX C
STAPLES C-14
STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
The restructuring charges related to the 2014 Plan are
presented within Restructuring charges in the Company’s
consolidated statement of income. The table below shows
how the restructuring charges would have been allocated if
the Company had recorded the expenses within the functional
departments of the restructured activities (in millions):
Fiscal Year Ended
January 30, 2016 January 31, 2015
Cost of goods sold and occupancy costs $70 $123
Selling, general and administrative 88 48
Total $158 $171
2013 Restructuring Plan
In 2013 the Company initiated a restructuring plan to streamline
its operations and general and administrative functions (the
“2013 Plan”). Pursuant to the 2013 Plan, certain distributed
general and administrative functions are being centralized and
certain operational resources are being consolidated. As a
result of this plan, the Company recorded pre-tax restructuring
charges of $78 million in 2013, including $75 million for
employee severance costs and $3 million for other associated
costs. Of these amounts, $63 million related to the Company’s
International Operations segment and $15 million related to
the Company’s corporate headquarters and North American
operations. The Company expects to substantially complete
the actions required under the 2013 Plan by the first half of
fiscal 2016.
During 2015 the Company recorded an adjustment to reduce
the restructuring liability associated with the 2013 Plan by
$8 million. The adjustment primarily stems from certain
changes made to the scope of the plan in 2015, as well as
changes in estimates related to certain benefits. The Company
does not expect to incur material costs in future periods related
to the 2013 Plan.
The table below shows a reconciliation of the beginning and ending liability balances associated with the 2013 Plan (in millions):
2013 Plan
Employee Related Other Total
Accrued restructuring balance as of February 1, 2014 $63 $2 $65
Cash payments (24) (1) (25)
Adjustments 5 (1) 4
Foreign currency translations (8) — (8)
Accrued restructuring balance as of January 31, 2015 $36 $— $36
Cash payments (16) — (16)
Adjustments (8) — (8)
Foreign currency translations (1) — (1)
Accrued restructuring balance as of January 30, 2016 $11 $— $11
Of the restructuring liabilities associated with the 2013 Plan,
$8 million is included within Accrued expenses and other
current liabilities and $3 million is included within Other
long-term obligations in the consolidated balance sheet as
of January 30, 2016. The Company expects that the payments
related to these liabilities will be substantially completed by the
end of fiscal year 2016.
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 million of restructuring charges would have
been allocated if the Company had recorded the expenses
within the functional departments of the restructured activities
(in millions):
Fiscal Year Ended
February 1, 2014
Cost of goods sold and occupancy costs $7
Selling, general and administrative 71
Total $78