Restructuring and Related Charges

9 Months Ended

Jul. 03, 2011

Restructuring and Related Charges [Abstract]

(18) Restructuring and Related Charges

The Company reports restructuring and related charges associated with manufacturing and related initiatives of Spectrum Brands in “Cost of goods sold.” Restructuring and related charges reflected in “Cost of goods sold” include, but are not limited to, termination, compensation and related costs associated with manufacturing employees, asset impairments relating to manufacturing initiatives, and other costs directly related to the restructuring or integration initiatives implemented. The Company reports restructuring and related charges relating to administrative functions of Spectrum Brands in “Selling, general and administrative expenses”, which include, but are not limited to, initiatives impacting sales, marketing, distribution, or other non-manufacturing related functions. Restructuring and related charges reflected in “Selling, general and administrative expenses” include, but are not limited to, termination and related costs, and any asset impairments relating to the functional areas described above, and other costs directly related to the initiatives implemented.

In 2009, Spectrum Brands implemented a series of initiatives to reduce operating costs as well as evaluate Spectrum Brands’ opportunities to improve its capital structure (the “Global Cost Reduction Initiatives”). In 2008, Spectrum Brands implemented an initiative within certain of its operations in China to reduce operating costs and rationalize Spectrum Brands’ manufacturing structure. These initiatives included the plan to exit Spectrum Brands’ Ningbo, China battery manufacturing facility (the “Ningbo Exit Plan”). In 2007, Spectrum Brands began managing its business in three vertically integrated, product-focused lines of business (the “Global Realignment Initiative”). In 2007, Spectrum Brands implemented an initiative in Latin America to reduce operating costs (the “Latin American Initiatives”). In 2006, Spectrum Brands implemented a series of initiatives within certain of its European operations to reduce operating costs and rationalize Spectrum Brands’ manufacturing structure (the “European Initiatives”).

The following table summarizes restructuring and related charges incurred by initiative for the three and nine month periods ended July 3, 2011 and July 4, 2010 and where those charges are classified in the accompanying Condensed Consolidated Statements of Operations:

Restructuring and Related Charges


									Charges		Expected		Total
									Since		Future		Projected		Expected Completion
	Three Months				Nine Months				Inception		Charges		Costs		Date
Initiative:	2011		2010		2011		2010
Global Cost Reduction	$	6,462	$	2,553	$	14,569	$	13,942	$	53,411	$	11,481	$	64,892	March 31, 2014
Ningbo Exit Plan		119		193		219		1,526		29,597		—		29,597	Substantially Complete
Global Realignment		485		2,098		2,990		1,115		91,577		750		92,327	June 30, 2013
European		—		—		—		—		26,965		—		26,965	Substantially Complete
Latin American		—		—		—		79		11,447		—		11,447	Complete

	$	7,066	$	4,844	$	17,778	$	16,662	$	212,997	$	12,231	$	225,228


Classification:
Cost of goods sold	$	2,285	$	1,890	$	4,932	$	5,530
Selling, general and administrative		4,781		2,954		12,846		11,132

	$	7,066	$	4,844	$	17,778	$	16,662

The following table summarizes the remaining accrual balance associated with the initiatives and the activity during the nine month period ended July 3, 2011:

Remaining Accrual Balance


	Accrual Balance at				Cash						Accrual Balance		Expensed as
	September 30, 2010		Provisions		Expenditures			Non-Cash Items			at July 3, 2011		Incurred^(A)
Global Cost Reduction
Termination benefits	$	6,447	$	5,795	$	(5,021	)	$	183		$	7,404	$	686
Other costs		4,005		492		(2,486	)		570			2,581		7,596

		10,452		6,287		(7,507	)		753			9,985		8,282

Ningbo Exit Plan
Termination benefits		—		—		—			—			—		—
Other costs		491		24		(143	)		(372	)		—		195

		491		24		(143	)		(372	)		—		195

Global Realignment
Termination benefits		8,721		1,207		(7,096	)		(676	)		2,156		—
Other costs		2,281		93		(619	)		498			2,253		1,690

		11,002		1,300		(7,715	)		(178	)		4,409		1,690

European
Termination benefits		1,801		—		(455	)		115			1,461		—
Other costs		47		—		(39	)		(8	)		—		—

		1,848		—		(494	)		107			1,461		—

Latin American
Termination benefits		—		—		—			—			—		—
Other costs		—		—		—			—			—		—


	$	23,793	$	7,611	$	(15,859	)	$	310		$	15,855	$	10,167


(A)		Consists of amounts not impacting the accrual for restructuring and related charges.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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