Restructuring Activities

3 Months Ended

Mar. 31, 2012

Restructuring Activities [Abstract]

Restructuring Activities

(9) Restructuring Activities

2011-2014 Integration and Optimization Program

In December, 2011, we initiated a restructuring program associated with the integration of Diversey’s business following our acquisition of Diversey on October 3, 2011. The program primarily consists of (i) reduction in headcount, (ii) consolidation of facilities, and (iii) consolidation and streamlining of certain customer and vendor contracts and relationships. This program is expected to be completed by the end of 2014.

The associated costs and related restructuring charges for this program in the three months ended March 31, 2012 are included in the table below.

	Three Months Ended March  31, 2012		Cumulative as of March 31, 2012
Associated costs	$	5.8	$	5.8
Restructuring charges		47.3		100.2
Total	$	53.1	$	106.0

The associated costs included in the table above include asset impairments of $5 million, which were included in cost of sales on the condensed consolidated statements of operations and in our Food Packaging segment. The asset impairments relate to a planned facility closure in the U.S., which is considered an asset held for sale and is included in other current assets on our condensed consolidated balance sheet as of March 31, 2012.

The restructuring charges included in the table above primarily consisted of termination and benefits costs, including $7 million of cash-settled stock appreciation rights that were previously issued to Diversey employees as a portion of the total consideration for the acquisition of Diversey. See Note 15, “Stockholders’ Equity,” for further details of these awards. These charges were included in restructuring and other charges on the condensed consolidated statements of operations.

The restructuring accrual, spending and other activity for the three months ended March 31, 2012 and the accrual balance remaining at March 31, 2012 were as follows:

Restructuring accrual at December 31, 2011	$	24.3
Additional accrual for termination benefits		46.9
Cash payments during 2012		(26.2	)
Effect of changes in foreign currency exchange rates		0.4
Restructuring accrual at March 31, 2012	$	45.4

Cumulative cash payments made in connection with this program through March 31, 2012 were $55 million. We expect to pay $34 million of the accrual balance remaining at March 31, 2012 within the next twelve months. This amount is included in other current liabilities on the condensed consolidated balance sheet at March 31, 2012. The remaining accrual of $11 million is expected to be paid after March 31, 2013 and is included in other liabilities on the condensed consolidated balance sheet at March 31, 2012.

European Principal Company (“EPC”)

In May 2011, before the acquisition of Diversey, Diversey approved, subject to successful works council consultations, plans to reorganize its European operations to function under a centralized management and supply chain model. We completed the reorganization on May 3, 2012 and the EPC, based in the Netherlands, is now centrally managing Diversey’s European operations. Diversey’s European subsidiaries are executing sales and distribution locally, and local production companies are acting as toll manufacturers on behalf of the EPC.

As part of the planning for this reorganization, in the first quarter of 2012, we recognized associated costs of $5 million, which are included in marketing, administrative and development expenses in the condensed consolidated statements of operations, and a nominal amount for restructuring charges for termination benefits.