Avon 2013 Annual Report Download - page 118

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
• implementation costs of $5.8 for professional service fees; and
• accelerated depreciation of $2.7 associated with the relocation of our corporate headquarters.
Total costs to implement were recorded in selling, general and administrative expenses in the Consolidated Statements of Income for the
year ended December 31, 2013.
The liability balance for these various restructuring initiatives as of December 31, 2013 is as follows:
Employee-
Related
Costs
Contract
Terminations/
Other Total
2012 Charges $ 53.4 $12.0 $ 65.4
Cash payments (33.9) (.2) (34.1)
Non-cash write-offs (1.6) – (1.6)
Foreign exchange (.3) – (.3)
Balance at December 31, 2012 $ 17.6 $11.8 $ 29.4
2013 Charges .8 6.1 6.9
Adjustments (1.9) – (1.9)
Cash payments (14.4) (5.6) (20.0)
Foreign exchange (.1) – (.1)
Balance at December 31, 2013 $ 2.0 $12.3 $ 14.3
Non-cash write-offs associated with employee-related costs are the result of settlements, curtailments and special termination benefits for
pension and postretirement benefits plans due to the initiatives implemented.
The actions associated with these various restructuring initiatives are substantially complete.
2005 and 2009 Restructuring Programs
We launched restructuring programs in 2005 and 2009 (collectively, the “2005 and 2009 Restructuring Programs”) with initiatives designed
to enhance our organizational effectiveness, implement a global manufacturing strategy and additional supply chain efficiencies in
distribution, restructure our global supply chain operations, realign certain local business support functions to a more regional base, and
streamline transactional and other services.
Restructuring Charges – 2013
During 2013, we recorded net benefits as a result of adjustments to the reserve of $7.5 primarily in selling, general and administrative
expenses, associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs. The net benefit
primarily consisted of a net gain of $4.9 due to the sale of a facility in the U.S., as well as adjustments the reserve for employee-related
costs.
Restructuring Charges – 2012
During 2012, we recorded total costs to implement of $.1 associated with previously approved initiatives that are part of our 2005 and 2009
Restructuring Programs, and the costs consisted of the following:
• net benefit of $12.1 as a result of adjustments to the reserve, partially offset by employee-related costs;
• implementation costs of $8.9 for professional service fees, primarily associated with our initiatives to outsource certain finance processes
and realign certain distribution operations;
• accelerated depreciation of $4.7 associated with our initiatives to realign certain distribution operations and close certain manufacturing
operations; and
• a net gain of $1.4 due to the sale of machinery and equipment in Germany.
Of the total cost to implement, a net benefit of $3.0 was recorded in selling, general and administrative expenses and total costs to
implement of $3.1 were recorded in cost of sales, in the Consolidated Statements of Income.