Change

Note 3 Incidentals


Incidental gains and losses included in operating income

 

 

 

In € millions

 

 

 

2008

2009

 

 

 

Restructuring costs

(275)

(353)

Costs of pensions and other post-retirement benefits

(38)

58

Results on acquisitions and divestments

(23)

48

Results related to major legal, antitrust and environmental cases

(32)

(38)

Other incidental results

(5)

18

Transformation costs

(190)

(14)

Fair value adjustments of acquired inventories

(54)

Impairment of ICI intangibles

(1,275)

 

 

 

Total

(1,892)

(281)

Apart from restructuring costs, incidental items in 2009 primarily related to a fine imposed by the European Commission. Incidental gains were realized from changing conditions in certain pension plans (€58 million) and the divestment of PTA Pakistan (€23 million).

In 2008, we recorded a goodwill impairment of €1,275 million after tax, covering the value of ICI intangibles related to the Decorative Paints and National Starch businesses. In addition, we incurred transformation costs, which included the closure of the London-based ICI headquarters (€59 million) and an impairment loss of €65 million for the Decorative Paints businesses which were sold due to the commitment packages agreed with European and Canadian authorities. In addition, transformation costs included costs of external advisors related to the ICI acquisition and costs to establish our new corporate identity. Other incidental charges in 2008 came from the fair value step-up for inventories acquired from ICI (€54 million, non-cash) and additional costs for the settlement of a claim related to post-retirement healthcare benefits for retired employees in the Netherlands. Furthermore, we incurred a charge of €29 million due to foreign currency results on a provision in the UK. The mandatory divestment of the Decorative Paints businesses in Canada, the UK, Ireland and Belgium resulted in a loss of €23 million.

Restructuring costs

 

 

 

In € millions

 

 

 

2008

2009

 

 

 

Decorative Paints

(189)

(158)

Performance Coatings

(20)

(55)

Specialty Chemicals

(29)

(103)

Other

(37)

(37)

 

 

 

Total

(275)

(353)

Major restructuring projects in Decorative Paints during 2009 related to supply chain and integration projects in Europe, Canada and Latin America and to closing stores in the US. In Performance Coatings, we incurred costs for headcount reduction programs in all businesses, the most significant being in Industrial Activities and Car Refinishes. In Specialty Chemicals, we announced the closure of four sites including the Skoghall site in Sweden and the Mo I Rana site in Norway. We announced a 20 percent reduction of staff working at our headquarters and shared service center in the Netherlands and recognized a provision of €11 million.

Incidentals per cost category

 

 

 

In € millions

 

 

 

2008

2009

 

 

 

Cost of sales

(376)

(146)

Selling expenses

(53)

(94)

Impairment of ICI intangibles

(1,275)

Research and development expenses

(15)

(19)

General and administrative expenses

(68)

(64)

Other operating income/(expenses)

(105)

42

 

 

 

Total

(1,892)

(281)

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