Sara Lee 2010 Annual Report Download - page 69

•Recognized a $20 million net loss associated with the disposition
of certain bakery manufacturing facilities in Spain.
The following table summarizes the net charges taken for the
exit, disposal and Accelerate activities approved during 2010 and the
related status as of July 3, 2010. 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 12 months. The composition
of these charges and the remaining accruals are summarized below.
Approximately $30 million to $50 million of additional charges are
expected to be recognized within the next twelve month period.
Employee Asset and
Termination Accelerate Non- Business
and Other Costs – IT cancellable Disposition
In millions Benefits and Other Leases Actions Total
Exit, disposal and
other costs recognized
during 2010 $«59 $«24 $«15 $«20 $118
Charges recognized in
discontinued operations 9–9–18
Cash payments (22) (21) (11) – (54)
Non-cash charges (1) – – – (1)
Foreign exchange impacts (5) – – – (5)
Asset and business
disposition losses – – – (20) (20)
Accrued costs as of
July 3, 2010 $«40 $÷«3 $«13 $÷«– $÷56
2009 Actions During 2009, the corporation approved certain
actions related to exit, disposal, transformation and Accelerate
activities and recognized net charges of $125 million related to
these actions. Each of these activities is to be completed within a
12-month period and include the following:
•Implemented a plan to terminate 969 employees primarily
related to the European beverage and bakery operations and the
fresh bakery operations and corporate office group in North America
and provide them with severance benefits in accordance with benefit
plans previously communicated to the affected employee group or
with local employment laws. Of the 969 targeted employees, 46
employees have not yet been terminated, but are expected to be
terminated within the next six months.
•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 amorti -
zation 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.
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 July 3, 2010. 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. The corporation does not anticipate any additional material
future charges related to the 2009 actions. The composition of
these charges and the remaining accruals are summarized below.
Employee Transfor-
Termination mation
and Other Costs – IT
In millions Benefits and Other Total
Exit, disposal and other costs
recognized during 2009 $106 $«19 $125
Charges recognized in
discontinued operations 13 3 16
Non-cash charges – (2) (2)
Cash payments (24) (14) (38)
Accrued costs as of June 27, 2009 95 6 101
Non-cash charges (3) – (3)
Cash payments (56) (2) (58)
Change in estimate (12) (1) (13)
Foreign exchange impacts (2) – (2)
Accrued costs as of July 3, 2010 $÷22 $÷«3 $÷25
2008 Actions During 2008, the corporation approved certain
actions related to exit, disposal and transformation activities and
recognized net charges of $65 million related to these actions.
Each of these actions was to be completed within a 12-month
period. A description of these activities includes the following:
•Implemented a plan to terminate 525 employees primarily
related to the North American retail and foodservice operations and
provide them with severance benefits in accordance with benefit plans
previously communicated to the affected employee group or with
local employment laws.
•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 million gain related to the
disposition of a North American Foodservice manufacturing facility.
•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.
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