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Restructuring
12 Months Ended
Dec. 31, 2020
Restructuring And Related Activities [Abstract]  
Restructuring

4.

Restructuring

In December 2019, our Board of Directors approved, and we initiated, a new global restructuring program (the “2019 Restructuring Plan”) with an objective of reducing costs to allow us to further invest in higher priority growth opportunities.  The 2019 Restructuring Plan is expected to result in total pre-tax restructuring charges of approximately $350 million to $400 million and reduce gross annual pre-tax operating expenses by approximately $200 million to $300 million by the end of 2023 as program benefits are realized.  The pre-tax restructuring charges consist of employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as consulting fees, project management and relocation costs.  The restructuring charges incurred in the year ended December 31, 2020 primarily related to employee termination benefits, distributor contract terminations, consulting and project management.  The restructuring charges incurred in the year ended December 31, 2019, primarily related to employee termination benefits, consulting and project management.  The following table summarizes the liabilities recognized related to the 2019 Restructuring Plan (in millions):

 

 

 

Employee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Termination

 

 

Contract

 

 

 

 

 

 

 

 

 

 

 

Benefits

 

 

Terminations

 

 

Other

 

 

Total

 

Balance, December 31, 2018

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Additions

 

 

23.2

 

 

 

-

 

 

 

13.1

 

 

 

36.3

 

Cash payments

 

 

-

 

 

 

-

 

 

 

(9.0

)

 

 

(9.0

)

Balance, December 31, 2019

 

 

23.2

 

 

 

-

 

 

 

4.1

 

 

 

27.3

 

Additions

 

55.3

 

 

 

15.8

 

 

 

37.1

 

 

 

108.2

 

Cash payments

 

 

(41.2

)

 

 

(4.9

)

 

 

(26.1

)

 

 

(72.2

)

Foreign currency exchange rate changes

 

 

1.4

 

 

 

-

 

 

 

-

 

 

 

1.4

 

Balance, December 31, 2020

 

$

38.7

 

 

$

10.9

 

 

$

15.1

 

 

$

64.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred since the start of the 2019 Restructuring Plan

 

$

78.5

 

 

$

15.8

 

 

$

50.2

 

 

$

144.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense estimated to be recognized for the 2019 Restructuring Plan

 

$

200.0

 

 

$

25.0

 

 

$

150.0

 

 

$

375.0

 

 

For the expense estimated to be recognized for the 2019 Restructuring Plan, we have disclosed the midpoint in our estimated range of expenses.  We do not include restructuring charges in the operating profit of our reportable segments. 

In our consolidated statement of earnings, we report restructuring charges in our “Restructuring and other cost reduction initiatives” financial statement line item.  We report the expenses for other cost reduction initiatives with restructuring expenses because these activities also have the goal of reducing costs across the organization.  However, since the cost reduction initiative expenses are not considered restructuring, they have been excluded from the amounts presented in this note.