Restructuring

2013 Restructuring

In November 2012, the Company's Board of Directors authorized an enterprise-wide restructuring plan and delegated authority to the Company's management to determine the final actions with respect to this plan.

As previously disclosed, the primary objectives of the 2013 Restructuring included reduction in workforce, consolidation of G&A functional support across the organization, reduced overhead spending, creation of a center-led purchasing function, and rationalization and streamlining of the Household Products operations facilities, product portfolio and marketing organization.

In January 2014, the Company's Board of Directors authorized an expansion of scope of the previously announced 2013 restructuring project and delegated authority to the Company's management to determine the final actions with respect to the plan. As a result of the expanded scope of the Company's restructuring efforts, incremental costs will be incurred to successfully execute the program. It is estimated that fiscal 2014 restructuring costs will be in the range of $100 to $130, including the costs related to the expanded project scope an increase of $30 to $40 versus original estimates. Total project restructuring costs are estimated to increase from the original outlook of $250 to approximately $350.

For the quarter ended December 31, 2013 and 2012, the Company recorded pre-tax expense of $24.4 and $49.0, respectively for charges related to the 2013 restructuring plan including:


•	Accelerated depreciation charges of $4.4 and $4.1 for the quarter ended December 31, 2013 and 2012, respectively, and non-cash asset impairment charges of $19.3 for the quarter ended December 31, 2012, related primarily to plant closures,


•	Severance and related benefit costs of $5.9 and $13.6 for the quarter ended December 31, 2013 and 2012, respectively, associated with staffing reductions that have been identified to date, and


•	Consulting, program management and other charges associated with the restructuring of $14.1 and $12.0 for the quarter ended December 31, 2013 and 2012, respectively.

The 2013 restructuring costs are reported on a separate line in the Consolidated Statements of Earnings and Comprehensive Income (Condensed). In addition, pre-tax costs of $2.3 for the quarter ended December 31, 2013 associated with certain information technology enablement activities related to the Company's restructuring initiatives were included in SG&A on the Consolidated Statement of Earnings and Comprehensive Income (Condensed). These information technology costs are considered part of the total project costs incurred for the restructuring initiative.

The Company does not include the 2013 restructuring costs in the results of its reportable segments. The estimated pre-tax impact of allocating such charges to segment results would have been as follows:


•	Accelerated depreciation charges of approximately $4.4 for the quarter ended December 31, 2013, would be fully allocated to our Household Products segment. Non-cash asset impairment charges of $19.3 and accelerated depreciation charges of approximately $4.1 for the quarter ended December 31, 2012, would be fully allocated to our Household Products segment.

•

Severance and related benefit costs of approximately $6 for the quarter ended December 31, 2013 would be allocated as follows: Personal Care of approximately $2; and Household Products of approximately $4.0. Severance and related benefit costs of approximately $14 for the quarter ended December 31, 2012 would be allocated as follows: Personal Care of approximately $2; Household Products of approximately$11; and Corporate of approximately $1. As certain headcount provides services to both segments, charges for severance and related benefits for such headcount requires an allocation.

•

Consulting, program management and other exit costs of approximately $14 for the quarter ended December 31, 2013 would be allocated as follows: Personal Care of approximately $4; and Household Products of approximately $10. Consulting, program management and other exit costs of approximately $12 for the quarter ended December 31, 2012 would be allocated as follows: Personal Care of approximately $3; Household Products of approximately $8; and Corporate of approximately $1.

Total project-to-date costs associated with the 2013 restructuring project are approximately $185, of which, approximately $50 relates to non-cash asset impairment and accelerated depreciation charges, approximately $55 relates to severance and related benefit costs, and approximately $80 relates to consulting, program management and other exit costs. Consulting, program management and other exit costs are inclusive of approximately $8 in certain information technology enablement costs (included in SG&A) and approximately $6 in obsolescence charges related to the exit of certain non-core product lines (included in Cost of products sold), both of which are considered part of the overall restructuring project.

A summary of the remaining estimated costs for the 2013 restructuring plan is as follows. These amounts are inclusive of the expanded scope initiatives described above. Total, as well as category ranges, are estimates.


•	Approximately $15-$30 related to plant closure and accelerated depreciation charges,


•	Approximately $35-$45 related to severance and related benefit costs,


•	Approximately $35-$45 related to consulting and program management, and


•	Approximately $30-$40 related to other restructuring related costs.

Costs remaining associated with certain information technology enablement activities related to our restructuring initiatives are approximately $10-$15. In addition, the Company expects to incur incremental capital expenditures of $20-$30 over the next 9 months, related primarily to information technology enablement of certain restructuring initiatives.

The following table summarizes the 2013 restructuring activity for the first three months of fiscal 2014.



					Utilized
	October 1, 2013		Charge to Income		Cash			Non-Cash			December 31, 2013
Severance & Termination Related Costs	$	16.3	$	5.9	$	(10.7	)	$	—		$	11.5
Asset Impairment/Accelerated Depreciation	—		4.4		—			(4.4		)	—
Other Related Costs	4.3		14.1		(6.9		)	—			11.5
Total	$	20.6	$	24.4	$	(17.6	)	$	(4.4	)	$	23.0