Sara Lee 2009 Annual Report Download - page 63

2009 Actions During 2009, the corporation approved certain
actions related to exit, disposal, transformation and Accelerate
activities and recognized net charges of $162 related to these
actions. Each of these activities is to be completed within a
12-month period after being approved and include the following:
•Implemented a plan to terminate 1,197 employees and provide
them with severance benefits in accordance with benefit plans pre-
viously communicated to the affected employee group or with local
employment laws. The specific location of these employees and the
status of the terminations are summarized in a table contained in
this note.
•Recognized costs related to the implementation of common
information systems across the organization in order to improve
operational efficiencies. These costs primarily relate to the
amortization of certain capitalized software costs.
•Recognized costs associated with the transition of business
support services to an outside third party vendor as part of a
business process outsourcing initiative.
2008 Actions During 2008, the corporation approved certain
actions related to exit, disposal and transformation activities and
recognized net charges of $89 related to these actions. Each of
these actions was to be completed within a 12-month period after
being approved. During 2009, certain of these actions were com-
pleted for amounts that differed from those originally estimated.
A description of these activities includes the following:
•Implemented a plan to terminate 525 employees and provide
them with severance benefits in accordance with benefit plans
previously communicated to the affected employee group or with
local employment laws. The specific location of these employees is
summarized in a table contained in this note. Of the 525 targeted
employees, 7 have not yet been terminated. These actions are
expected to be completed by the first half of 2010.
Sara Lee Corporation and Subsidiaries 61
North International
North American North Household
American Fresh American International International and
Number of employees Retail Bakery Foodservice Beverage Bakery Body Care Corporate Total
United States 513060–––311506
Europe – – – 266 272 74 – 612
Africa –––1–––1
Asia –––13–5–18
Australia –––15321–48
South America –––9–3–12
5 130 60 304 304 83 311 1,197
As of June 27, 2009
Actions completed 1 – 4 60 168 32 33 298
Actions remaining 4 130 56 244 136 51 278 899
5 130 60 304 304 83 311 1,197
The following table summarizes the net charges taken for the
exit, disposal and transformation/Accelerate activities approved
during 2009 and the related status as of June 27, 2009. The
accrued amounts remaining represent those cash expenditures
necessary to satisfy remaining obligations. The majority of the
cash payments to satisfy the accrued costs are expected to be
paid in the next year. Approximately $67 of additional charges
are expected to be recognized for these actions within a 12-month
period. The composition of these charges and the remaining
accruals are summarized below.
Employee Transfor-
Termination mation
and Other Costs – IT
Benefits and Other Total
Exit and disposal costs
recognized during 2009 $119 $«43 $162
Non-cash charges – (23) (23)
Cash payments (24) (14) (38)
Accrued costs as of June 27, 2009 $÷95 $÷«6 $101
The following table summarizes the employee terminations
by location and business segment.
•Incurred costs to exit certain leased space, including the exit
of a North American R&D facility.
•Recognized net gains associated with the disposal of several
asset groupings, the largest of which was a $3 gain related to the
disposition of a North American Foodservice manufacturing facility.
Total proceeds from these disposals were $9.
•Recognized costs related to the implementation of common
information systems across the organization in order to improve
operational efficiencies. These primarily relate to costs associated
with assessing current systems, the evaluation of system alterna-
tives, and process re-engineering costs, as well as the amortization
of certain capitalized software.