RESTRUCTURING INITIATIVES

2005 Restructuring Program

In November 2005, we announced a multi-year turnaround plan to restore sustainable growth. As part of our turnaround plan, we launched a restructuring program in late 2005 (the “2005 Restructuring Program”). The 2005 Restructuring Program initiatives include:


•	enhancement of organizational effectiveness, including efforts to flatten the organization and bring senior management closer to consumers through a substantial organization downsizing;


•	implementation of a global manufacturing strategy through facilities realignment;


•	implementation of additional supply chain efficiencies in distribution; and


•	streamlining of transactional and other services through outsourcing and moves to lower-cost countries.

We have approved and announced all of the initiatives that are part of our 2005 Restructuring Program. We expect to record total restructuring charges and other costs to implement restructuring initiatives of approximately $510 before taxes. We have recorded total costs to implement, net of adjustments, of $515.7 ($2.0 in the first nine months of 2011, $3.2 in 2010, $20.1 in 2009, $59.3 in 2008, $157.5 in 2007, $217.1 in 2006, and $56.5 in 2005) for actions associated with our restructuring initiatives. We will incur other costs to implement restructuring initiatives such as other professional services and accelerated depreciation. These future costs are expected to be more than offset by gains on the sales of properties exited due to restructuring initiatives.

Restructuring Charges – First, Second, and Third Quarters of 2011

During the three and nine months ended September 30, 2011, we recorded total costs to implement of $0.5 and $2.0, respectively, associated with previously approved initiatives that are part of our 2005 Restructuring Program, and the costs consisted of the following:


•	net charge of $0.3 and $0.3, respectively, primarily for employee-related costs offset by adjustments to the reserve;


•	implementation costs of $0.0 and $1.1, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and


•	accelerated depreciation of $0.2 and $0.6, respectively, associated with our initiatives to realign certain distribution operations.

Total costs to implement were recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2011.

Restructuring Charges – First, Second, and Third Quarters of 2010

During the three and nine months ended September 30, 2010, we recorded total costs to implement of $0.9 and $2.4, respectively, associated with previously approved initiatives that are part of our 2005 Restructuring Program, and the costs consisted of the following:


•	net benefits of $0.7 and $3.8, respectively, primarily for adjustments to the reserves for employee-related costs;


•	implementation costs of $1.6 and $4.9, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and


•	accelerated depreciation of $0.1 and $1.3, respectively, associated with our initiatives to realign certain distribution operations.

Of the total costs to implement, $0.8 and $2.3, respectively, were recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2010, and $0.1 and $0.1, respectively, were recorded in cost of sales for the three and nine months ended September 30, 2010.

The liability balances for the initiatives under the 2005 Restructuring Program are shown below:



	Employee- Related Costs			Inventory Write-offs			Contract Terminations/ Other			Total
Balance December 31, 2010	$	20.6		$	(0.2	)	$	0.1		$	20.5
2011 Charges	1.5			—			—			1.5
Adjustments	(1.2		)	—			—			(1.2		)
Cash payments	(4.8		)	—			(0.1		)	(4.9		)
Foreign exchange	(0.7		)	—			—			(0.7		)
Balance September 30, 2011	$	15.4		$	(0.2	)	$	—		$	15.2

The following table presents the restructuring charges incurred to date, net of adjustments, under our 2005 Restructuring Program, along with the charges expected to be incurred under the plan:



	Employee- Related Costs		Asset Write-offs		Inventory Write-offs		Currency Translation Adjustment Write-offs		Contract Terminations/ Other		Total
Charges incurred to date	$	332.8	$	10.8	$	7.2	$	11.6	$	8.6	$	371.0
Charges to be incurred on approved initiatives	1.3		—		—		—		—		1.3
Total expected charges	$	334.1	$	10.8	$	7.2	$	11.6	$	8.6	$	372.3

The charges, net of adjustments, of initiatives under the 2005 Restructuring Program by reportable business segment were as follows:



	Latin America			North America			Central & Eastern Europe			Western Europe, Middle East & Africa			Asia Pacific			Corporate			Total
2005	$	3.5		$	6.9		$	1.0		$	11.7		$	22.4		$	6.1		$	51.6
2006	34.6			61.8			6.9			45.1			14.2			29.5			192.1
2007	14.9			7.0			4.7			65.1			4.9			12.7			109.3
2008	1.9			(1.1		)	1.7			19.0			(0.7		)	(3.0		)	17.8
2009	1.4			(0.1		)	(0.7		)	(4.4		)	11.4			(2.9		)	4.7
2010	2.1			(0.1		)	(0.1		)	(3.9		)	(2.3		)	(0.5		)	(4.8		)
First Quarter 2011	(0.6		)	(0.3		)	—			—			—			—			(0.9		)
Second Quarter 2011	0.7			0.4			—			0.1			—			(0.3		)	0.9
Third Quarter 2011	0.4			—			(0.1		)	—			—			—			0.3
Charges recorded to date	58.9			74.5			13.4			132.7			49.9			41.6			371.0
Charges to be incurred on approved initiatives	1.3			—			—			—			—			—			1.3
Total expected charges	$	60.2		$	74.5		$	13.4		$	132.7		$	49.9		$	41.6		$	372.3

As noted previously, we expect to record total costs to implement of approximately $510 before taxes for all restructuring initiatives under the 2005 Restructuring Program, including restructuring charges and other costs to implement. The amounts shown in the tables above as charges recorded to date relate to initiatives that have been approved and recorded in the financial statements as the costs are probable and estimable. The amounts shown in the tables above as total expected charges represent charges recorded to date plus charges yet to be recorded for approved initiatives as the relevant accounting criteria for recording an expense have not yet been met. In addition to the charges included in the tables above, we will incur other costs to implement restructuring initiatives such as other professional services and accelerated depreciation. These future costs are expected to be more than offset by gains on the sales of properties exited due to restructuring initiatives.

2009 Restructuring Program

In February 2009, we announced a new restructuring program (the “2009 Restructuring Program”) which targets increasing levels of efficiency and organizational effectiveness across the Company’s global operations. The 2009 Restructuring Program initiatives include:


•	restructuring the Company’s global supply chain operations;


•	realigning certain local business support functions to a more regional basis to drive increased efficiencies; and


•	streamlining transaction related services, including selective outsourcing; and reorganizing certain other functions.

We have approved and announced all of the initiatives that are part of our 2009 Restructuring Program. We expect to record total restructuring charges and other costs to implement restructuring initiatives in the range of $300 to $310 before taxes over the next several years, with implementation to be completed by 2012-2013. We have recorded total costs to implement, net of adjustments, of $257.6 ($29.3 in the first nine months of 2011, $77.5 in 2010, and $150.8 in 2009), for actions associated with our restructuring initiatives.

Restructuring Charges – First, Second, and Third Quarters of 2011

During the three and nine months ended September 30, 2011, we recorded total costs to implement of $4.1 and $29.3, respectively, associated with previously approved initiatives that are part of our 2009 Restructuring Program, and the costs consisted of the following:


•	net benefits of $4.9 for the three-month period related to adjustments to the reserves for employee-related costs, including severance, and a net charge of $3.5 for the nine-month period related to contract termination costs, offset by adjustments to the reserves for employee-related costs, including severance;


•	implementation costs of $5.5 and $22.6, respectively, for professional service fees, primarily associated with our initiatives to realign certain support functions to a more regional basis and realignment of certain manufacturing facilities; and


•	accelerated depreciation of $3.5 and $8.7, respectively, associated with our initiatives to realign some distribution operations and close some manufacturing operations, offset by a gain of $5.5 in the first quarter of 2011 due to the sale of land and a building in Germany.

Of the total costs to implement, $0.6 and $21.1, respectively, were recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2011, and $3.5 and $8.2, respectively, were recorded in cost of sales for the three and nine months ended September 30, 2011.

Restructuring Charges – First, Second, and Third Quarters of 2010

During the three and nine months ended September 30, 2010, we recorded total costs to implement of $6.1 and $20.2, respectively, associated with previously approved initiatives that are part of our 2009 Restructuring Program, and the costs consisted of the following:


•	net benefit of $0.5 and charge $0.5, respectively, primarily for adjustments to the reserves for employee-related costs;


•	implementation costs of $4.4 and $12.2, respectively, for professional service fees, primarily associated with our initiatives to realign certain support functions to a more regional basis and realignment of certain manufacturing facilities; and


•	accelerated depreciation of $2.2 and $7.5, respectively, associated with our initiatives to realign some distribution operations and close some manufacturing operations.

Of the total costs to implement, $3.9 and $13.3, respectively, were recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2010, and $2.2 and $6.9, respectively, were recorded in cost of sales for the three and nine months ended September 30, 2010.

The liability balances for the initiatives under the 2009 Restructuring Program are shown below:



	Employee- Related Costs			Contract Terminations/ Other			Total
Balance December 31, 2010	$	115.3		$	0.1		$	115.4
2011 Charges	3.0			12.8			15.8
Adjustments	(12.3		)	—			(12.3		)
Cash payments	(27.1		)	(12.6		)	(39.7		)
Foreign exchange	0.9			—			0.9
Balance September 30, 2011	$	79.8		$	0.3		$	80.1

The following table presents the restructuring charges incurred to date, net of adjustments, under our 2009 Restructuring Program, along with the charges expected to be incurred under the plan:



	Employee- Related Costs		Contract Terminations		Total
Charges incurred to date	$	160.8	$	14.4	$	175.2
Charges to be incurred on approved initiatives	1.7		0.8		2.5
Total expected charges	$	162.5	$	15.2	$	177.7

The charges of initiatives approved to date under the 2009 Restructuring Program by reportable business segment were as follows:



	Latin America			North America			Central & Eastern Europe		Western Europe, Middle East & Africa			Asia Pacific			Corporate			Total
2009	17.8			26.8			25.8		31.8			8.5			14.9			$	125.6
2010	11.5			17.9			0.4		2.8			2.0			11.5			46.1
First Quarter 2011	(2.2		)	5.6			0.2		1.0			(0.5		)	6.4			10.5
Second Quarter 2011	(0.1		)	(0.3		)	0.2		1.2			(0.1		)	(3.0		)	(2.1		)
Third Quarter 2011	(2.6		)	(0.4		)	0.4		(0.2		)	—			(2.1		)	$	(4.9	)
Charges recorded to date	24.4			49.6			27.0		36.6			9.9			27.7			$	175.2
Charges to be incurred on approved initiatives	0.2			(0.6		)	1.7		1.3			(0.1		)	—			2.5
Total expected charges on approved initiatives	$	24.6		$	49.0		$	28.7	$	37.9		$	9.8		$	27.7		$	177.7

As noted previously, we expect to record total costs to implement in the range of $300 to $310 million before taxes for all restructuring initiatives under the 2009 Restructuring Program, including restructuring charges and other costs to implement. The amounts shown in the table above as charges recorded to date relate to initiatives that have been approved and recorded in the financial statements as the costs are probable and estimable. The amounts shown in the table above as total expected charges on approved initiatives represents charges recorded to date plus charges yet to be recorded for approved initiatives as the relevant accounting criteria for recording an expense have not yet been met. In addition to the charges included in the table above, we will incur other costs to implement restructuring initiatives such as consulting, other professional services, and accelerated depreciation.