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NOTES TO FINANCIAL STATEMENTS
The following table summarizes the net charges taken for the exit,
disposal and Project Accelerate activities approved during 2010
and the related status as of July 2, 2011. 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 corporation does not anticipate any additional material future
charges related to the 2010 actions. The composition of these
charges and the remaining accruals are summarized below.
Employee Asset and
Termination IT and Non- Business
and Other Other cancellable Disposition
In millions Benefits Costs Leases Actions Total
Exit, disposal and
other costs recognized
during 2010 $«59 $«24 $«15 $«20 $118
Charges recognized in
discontinued operations 969–24
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 9 13 – 62
Cash payments (24) (9) (5) – (38)
Change in estimate (4)–––(4)
Change in estimate recognized
in discontinued operations (1)–––(1)
Non-cash charges (5)–2–(3)
Foreign exchange impacts 3–––3
Asset and business
disposition losses –––––
Accrued costs as of
July 2, 2011 $÷«9 $÷«– $«10 $÷«– $÷19
2009 Actions During 2009, the corporation approved certain
actions related to exit, disposal, transformation and Project
Accelerate activities and recognized net charges of $120 million
related to these actions. Each of these activities is to be com-
pleted within a 12-month period and include the following:
• Implemented a plan to terminate approximately 1,000 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.
The following table summarizes the net charges taken for the
exit, disposal, Project Accelerate and spin-off activities approved
during 2011 and the related status as of July 2, 2011. 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. Approximately $30 million to $40 million of additional
charges are expected to be recognized within the next twelve month
period related to the 2011 actions. The corporation expects to
incur total charges of approximately $425 million in 2012 related
to these restructuring actions as well as additional restructuring
and other actions associated with cost reduction efforts related to
the spin-off. See the Business Overview section of the Financial
Review for additional information.
Non-
Employee cancellable
Termination IT and Leases/
and Other Other Contractual
In millions Benefits Costs Obligations Total
Exit, disposal and
other costs recognized
during 2011 $104 $«58 $9 $«171
Charges recognized in
discontinued operations 59 38 – 97
Cash payments (40) (72) – (112)
Non-cash charges 2––2
Foreign exchange impacts 4––4
Accrued costs as of
July 2, 2011 $129 $«24 $9 $«162
2010 Actions During 2010, the corporation approved certain
actions related to exit, disposal, and Project Accelerate activities
and recognized charges of $118 million related to these actions.
Each of these activities is to be completed within a 12-month
period after being approved and include the following:
• Recognized a charge to implement a plan to terminate
approximately 1,100 employees, primarily related to European
beverage, European bakery and North American foodservice opera-
tions, 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 1,100 targeted employ-
ees, approximately 70 employees have not yet been terminated,
but are expected to be terminated within the next 12 months.
• Recognized costs associated with the transition of services
to an outside third party vendor as part of a business process
outsourcing initiative.
• Recognized a $20 million net loss associated with the
disposition of certain bakery manufacturing facilities in Spain.