Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Significant Accounting Policies

2. Significant Accounting Policies

Special Items — We recognize expenses resulting directly from our business combinations, employee termination benefits, certain contract terminations, consulting and professional fees and asset impairment charges connected with global restructuring and operational excellence initiatives, and other items as “Special items” in our condensed consolidated statement of earnings. “Special items” included (in millions):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012			2011
Impairment/loss on disposal of assets	$	0.3		$	0.3	$	0.7		$	3.2
Consulting and professional fees		25.6			3.2		63.1			11.6
Employee severance and retention		1.8			1.1		6.2			20.9
Dedicated project personnel		3.9			0.7		10.5			1.6
Distributor acquisitions		—			0.5		0.4			1.6
Certain litigation matters		3.3			—		13.2			0.1
Contract terminations		2.0			1.8		4.6			4.5
Contingent consideration adjustments		(2.0	)		—		(2.8	)		—
Accelerated software amortization		1.5			—		3.0			—
Other		0.5			0.4		2.2			3.5
Special items	$	36.9		$	8.0	$	101.1		$	47.0

In the first nine months of 2012, we announced our plans to outsource our Warsaw, Indiana distribution center to a third party service provider at a national transportation hub, among other organizational changes. We also have plans to close operations at two of our smaller manufacturing facilities. Approximately 300 positions were or will be affected by these actions.

In the first nine months of 2011, we terminated employees as part of a reduction of management layers, expansion of management spans of control, and changes in our organizational structure. Approximately 500 employees from across the globe were affected by these actions.

As a result of these actions, we incurred expenses related to severance benefits, share-based compensation acceleration and other employee termination-related costs. The vast majority of these termination benefits were provided in accordance with our existing policies or local government regulations and are considered ongoing benefits. These costs were accrued when they became probable and estimable and were recorded as part of other current liabilities. The majority of these costs have been paid or will be paid in the year they were accrued.

In the second quarter of 2012, we approved a plan to replace certain software. As a result, the estimated economic useful life of the existing software was decreased to represent the period of time expected to implement replacement software. As a result, the amortization from the shortened life of this software is substantially higher than the previous amortization being recognized. We have recognized the incremental amortization caused by the shorter life in “Special items”.

Recent Accounting Pronouncements — In 2011, the Financial Accounting Standards Board issued an accounting standard update (ASU) requiring companies to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and of comprehensive income. This requirement became effective for us January 1, 2012. The ASU changes the presentation, but not the accounting requirements, of other comprehensive income and therefore had no effect on our financial position, results of operations or cash flows.

There are no other recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows.