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 organizational 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 base 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 believe that we have substantially realized the anticipated savings associated with our 2005 Restructuring Program, and we are on track to achieving our anticipated savings associated with our 2009 Restructuring Program. The savings achieved from these Restructuring Programs have been offset by investments in Representative Value Proposition and advertising. Since 2005, we have recorded total costs to implement restructuring initiatives of $526.6 for actions associated with the 2005 Restructuring Program, but we expect our total costs when fully implemented to be approximately $520 when considering historical and future costs along with expected gains from sales of properties. With regards to the 2009 Restructuring Program, we have recorded total costs to implement restructuring initiatives of $259.9 since 2009 and expect total costs to implement to reach approximately $270.

Restructuring Charges – First and Second Quarter of 2012

During the three and six months ended June 30, 2012, we recorded a net benefit of $1.0 and total costs to implement of $4.5, respectively, associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs, and the costs consisted of the following:


•	net benefits of $4.7 and $5.8, respectively, as a result of adjustments to the reserve, partially offset by employee-related costs;


•	implementation costs of $2.9 and $7.3, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and


•	accelerated depreciation of $.8 and $3.0, respectively, associated with our initiatives to realign certain distribution operations.

For the three months ended June 30, 2012, a net benefit of $1.7 was recorded in selling, general, and administrative expenses and total costs to implement of $.7 were recorded in cost of sales. For the six months ended June 30, 2012, total costs to implement of $1.1 were recorded in selling, general, and administrative expenses and $3.4 were recorded in cost of sales.

Restructuring Charges – First and Second Quarter 2011

During the three and six months ended June 30, 2011, we recorded total costs to implement of $12.0 and $26.7, respectively, 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 $1.2 and charge of $8.4, respectively, primarily for adjustments to the reserves for employee-related costs;


•	implementation costs of $9.2 and $18.2, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and


•	accelerated depreciation of $4.0 and $5.6 respectively, associated with our initiatives to realign certain distribution operations, offset by a gain of $5.5 due to the sale of land and building in Germany in the first quarter 2011.

Of the total costs to implement, $8.5 and $22.0 was recorded in selling, general and administrative expenses, respectively; and $3.5 and $4.7 was recorded in cost of sales, respectively, for the three and six months ended June 30, 2011.

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



	Employee- Related Costs			Other			Total
Balance December 31, 2011	$	74.6		$	(.7	)	$	73.9
2012 Charges	1.5			—			1.5
Adjustments	(7.3		)	—			(7.3		)
Cash payments	(25.6		)	—			(25.6		)
Non-cash write-offs	1.0			—			1.0
Foreign exchange	(1.4		)	—			(1.4		)
Balance at June 30, 2012	$	42.8		$	(.7	)	$	42.1

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	$	489.0	$	10.8	$	7.2	$	11.6	$	21.4	$	540.0
Charges to be incurred on approved initiatives	1.2		—		—		—		.3		1.5
Total expected charges on approved initiatives	$	490.2	$	10.8	$	7.2	$	11.6	$	21.7	$	541.5

The charges, net of adjustments, of initiatives under the 2005 and 2009 Restructuring Programs by reportable business segment were as follows:



	Latin America			North America			Europe, Middle East & Africa			Asia Pacific			Corporate			Total
2005	$	3.5		$	6.9		$	12.7		$	22.4		$	6.1		$	51.6
2006	34.6			61.8			52.0			14.2			29.5			192.1
2007	14.9			7.0			69.8			4.9			12.7			109.3
2008	1.9			(1.1		)	20.7			(.7		)	(3.0		)	17.8
2009	19.2			26.7			52.5			19.9			12.0			130.3
2010	13.6			17.8			(.8		)	(.3		)	11.0			41.3
2011	2.1			(1.1		)	1.9			(.3		)	.8			3.4
First Quarter 2012	.1			(.9		)	(.3		)	(.1		)	.1			(1.1		)
Second Quarter 2012	$	(3.6	)	$	(.8	)	$	(.3	)	$	.2		$	(.2	)	$	(4.7	)
Charges recorded to date	$	86.3		$	116.3		$	208.2		$	60.2		$	69.0		$	540.0
Charges to be incurred on approved initiatives	—			.3			1.4			(.2		)	—			1.5
Total expected charges on approved initiatives	$	86.3		$	116.6		$	209.6		$	60.0		$	69.0		$	541.5

As noted previously, we expect to record total costs to implement of approximately $520 before taxes for all restructuring initiatives under the 2005 Restructuring Program and approximately $270 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.

Additional Restructuring Charges

In an effort to improve operating performance, we identified certain actions in 2012 that we believe will enhance our operating model, reduce costs, and improve efficiencies. In addition, management approved the relocation of our corporate headquarters in New York City. As a result of the analysis and the actions taken, during the three and six months ended June 30, 2012, we recorded total costs to implement these various restructuring initiatives of $39.2 and $61.0, respectively, associated with approved initiatives, and the costs consisted of the following:


•	net charges of $37.2 and $56.0, respectively, primarily for employee-related costs;


•	implementation costs of $.9 and $3.9, respectively, for professional service fees; and


•	accelerated depreciation of $1.1 and $1.1, respectively, associated with the relocation of our corporate headquarters.

As a result of the decision to relocate our corporate headquarters, we expect to incur a charge in the range of $10 - $20, dependent on estimates of sublease income, in the second half of 2012 when the relocation is complete.

Total costs to implement were recorded in selling, general and administrative expenses for the three and six months ended June 30, 2012. Cash payments associated with these charges are expected to be made during 2012 and 2013.

The liability balance for these as of June 30, 2012 is as follows:



	Employee- Related Costs
2012 Charges	$	56.0
Cash payments	(10.9		)
Foreign Exchange	(.4		)
Balance at June 30, 2012	$	44.7

The charges under the additional restructuring initiatives by reportable business segment were as follows:



	Latin America		North America		Europe, Middle East & Africa		Asia Pacific		Corporate		Total
First Quarter 2012	$	4.6	$	.8	$	3.1	$	.7	$	9.6	$	18.8
Second Quarter 2012	10.7		3.9		7.5		4.0		11.1		37.2
Charges recorded to date	$	15.3	$	4.7	$	10.6	$	4.7	$	20.7	$	56.0