Restructuring Initiatives

2005 and 2009 Restructuring Programs

We launched restructuring programs in late 2005 (the “2005 Restructuring Program”) and in February 2009 (the "2009 Restructuring Program"). The 2005 and 2009 Restructuring Programs 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;


•	restructuring our global supply chain operations;


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


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

We have approved and announced all of the initiatives that are part of our 2005 and 2009 Restructuring Programs. We expect to record total restructuring charges and other costs to implement restructuring initiatives of approximately $510 before taxes under the 2005 Restructuring Program. Through December 31, 2011, we have recorded total costs to implement, net of adjustments, of $526.0 ($12.3 in 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 under the 2005 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 under the 2009 Restructuring Program, with actions to be completed by 2012-2013. 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. Through December 31, 2011, we have recorded total costs to implement, net of adjustments, of $256.0 ($27.7 in 2011, $77.5 in 2010, and $150.8 in 2009) for actions associated with our restructuring initiatives under the 2009 Restructuring Program.

Restructuring Charges – 2009

During 2009, we recorded total costs to implement of $170.9 associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs, and the costs consisted of the following:


•	net charge of $130.3 primarily for employee-related costs, including severance and pension benefits;


•	implementation costs of $28.4 for professional service fees, primarily associated with our initiatives to outsource certain finance processes, realign certain distribution operations, realign certain support functions to a more regional basis and realignment of certain manufacturing facilities; and


•	accelerated depreciation of $12.2 associated with our initiatives to realign certain distribution operations and close certain manufacturing operations.

Of the total costs to implement, $164.2 was recorded in selling, general and administrative expenses and $6.7 was recorded in cost of sales for 2009.

Restructuring Charges – 2010

During 2010, we recorded total costs to implement of $80.7 associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs, and the costs consisted of the following:


•	net charge of $41.3 primarily for employee-related costs, including severance and pension benefits;


•	implementation costs of $27.7 for professional service fees, primarily associated with our initiatives to outsource certain finance processes, realign certain distribution operations, realign certain support functions to a more regional basis and realignment of certain manufacturing facilities; and


•	accelerated depreciation of $11.7 associated with our initiatives to realign certain distribution operations and close certain manufacturing operations.

Of the total costs to implement, $71.2 was recorded in selling, general and administrative expenses and $9.5 was recorded in cost of sales for 2010.

Restructuring Charges – 2011

During 2011, we recorded total costs to implement of $40.0 associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs, and the costs consisted of the following:


•	net charge of $3.4 primarily for employee-related costs, including severance and pension benefits;


•	implementation costs of $27.2 for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations, realign certain support functions to a more regional basis and realignment of certain manufacturing facilities; and


•	accelerated depreciation of $14.6 associated with our initiatives to realign certain distribution operations and close certain manufacturing operations, offset by a net gain of $5.2 primarily due to the sale of land and a building in Germany.

Of the total costs to implement, $28.8 was recorded in selling, general and administrative expenses and $11.2 was recorded in cost of sales for 2011. Most of these costs to implement are expected to result in future cash expenditure, with a majority of the cash payments to be made in 2012.

The liability balances for the initiatives under the 2005 and 2009 Restructuring Programs are shown below:



	Employee- Related Costs			Inventory Write-offs			Contract Terminations/ Other			Total
Balance December 31, 2008	$	93.6		$	—		$	.3		$	93.9
2009 Charges	143.0			—			—			143.0
Adjustments	(12.5		)	(.2		)	—			(12.7		)
Cash payments	(59.5		)	—			(.2		)	(59.7		)
Non-cash write-offs	(17.9		)	—			—			(17.9		)
Foreign exchange	2.4			—			—			2.4
Balance December 31, 2009	$	149.1		$	(.2	)	$	.1		$	149.0
2010 Charges	63.0			—			1.6			64.6
Adjustments	(23.3		)	—			—			(23.3		)
Cash payments	(47.7		)	—			(1.5		)	(49.2		)
Non-cash write-offs	(1.7		)	—			—			(1.7		)
Foreign exchange	(3.5		)	—			—			(3.5		)
Balance December 31, 2010	$	135.9		$	(.2	)	$	.2		$	135.9
2011 Charges	13.4			—			12.2			25.6
Adjustments	(21.3		)	—			(.9		)	(22.2		)
Cash payments	(52.1		)	—			(12.0		)	(64.1		)
Non-cash write-offs	.3			—			—			.3
Foreign exchange	(1.6		)	—			—			(1.6		)
Balance December 31, 2011	$	74.6		$	(.2	)	$	(.5	)	$	73.9

Non-cash write-offs associated with employee-related costs are the result of settlement, curtailment and special termination benefit charges for pension plans and postretirement due to the initiatives implemented. Inventory write-offs relate to exited businesses.

The following table presents the restructuring charges incurred to date, net of adjustments, under our 2005 and 2009 Restructuring Programs, 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	$	494.8	$	10.8	$	7.2	$	11.6	$	21.4	$	545.8
Charges to be incurred on approved initiatives	6.9		—		—		—		.6		7.5
Total expected charges on approved initiatives	$	501.7	$	10.8	$	7.2	$	11.6	$	22.0	$	553.3

The charges, net of adjustments, of initiatives approved to date under the 2005 and 2009 Restructuring Programs 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			(.7		)	(3.0		)	17.8
2009	19.2		26.7			25.1		27.4			19.9			12.0			130.3
2010	13.6		17.8			.3		(1.1		)	(.3		)	11.0			41.3
2011	2.1		(1.1		)	1.0		.9			(.3		)	.8			3.4
Charges recorded to date	$	89.8	$	118.0		$	40.7	$	168.1		$	60.1		$	69.1		$	545.8
Charges to be incurred on approved initiatives	4.4		—			1.9		1.3			(.1		)	—			7.5
Total expected charges on approved initiatives	$	94.2	$	118.0		$	42.6	$	169.4		$	60.0		$	69.1		$	553.3

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 and in the range of $300 to $310 before taxes for all restructuring initiatives under the 2009 Restructuring Program, in each case 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 on approved initiatives 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.