Plant Closures and Assets Held for Sale

6 Months Ended

Jun. 26, 2011

PLANT CLOSURES [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

PLANT CLOSURES AND ASSETS HELD FOR SALE

On May 6, 2010, our Board of Directors committed to a plan designed to further optimize our manufacturing footprint. Pursuant to the plan, we closed our manufacturing facility in Springfield, Missouri in March 2011 and our manufacturing facility in North Andover, Massachusetts in May 2011, and we intend to close our manufacturing facility in Owings Mills, Maryland in the third quarter of 2011. We expect to incur costs over the life of the plan in the range of $119 to $124 million, of which approximately $27 to $29 million (identified in the table below as severance and equipment relocation and related costs) will require cash expenditures. Approximately $3.4 million of severance has been paid through June 26, 2011, including $2.9 million during the twenty-six weeks ended June 26, 2011. Approximately $16.6 million of equipment relocation and related costs, which are expensed as incurred, have been paid to date, including $11.2 million during the twenty-six weeks ended June 26, 2011.

The total expected costs also include a future charge attributable to lease payments for our North Andover facility that we will remain obligated to make in periods after we exit the facility, asset impairment charges, and accelerated depreciation for certain property, plant and equipment that will not be used after the facilities are closed. The following table summarizes the estimated range of total plan costs and those incurred (expensed) to date (in millions):

	Estimated range				Incurred (expensed)
	As of				Year ended		Twenty-six weeks ended		Life to date
	June 26, 2011				December 26, 2010		June 26, 2011		June 26, 2011
Severance	$	7	$	7	$	7	$	—	$	7
Equipment relocation and related costs	20		22		5		11		16
Pension plan curtailment loss	2		2		2		—		2
Accrual of remaining lease payments	4		6		—		—		—
Asset impairment	29		29		17		12		29
Accelerated depreciation	57		58		40		17		57
Total costs	$	119	$	124	$	71	$	40	$	111

Equipment relocation and related costs and accelerated depreciation are included in cost of goods sold on our accompanying consolidated statement of operations. As of June 26, 2011, accrued severance of approximately $4 million is included in other current liabilities in our Consolidated Balance Sheet.

In May 2011, we entered into an agreement to sell our Owings Mills, Maryland manufacturing facility for $15.0 million and to lease back the property for a period of seven months from the closing date. The closing, which is expected to occur during the third quarter of 2011, is subject to satisfactory completion of due diligence by the purchaser and other customary conditions.

We classify assets as held for sale when they meet the criteria set forth in FASB ASC Topic 360, Property, Plant, and Equipment. Based on the execution of the purchase and sale agreement during our second fiscal quarter, this facility met the criteria and we reclassified this property from held and used to held for sale. Accordingly, we recorded an impairment of approximately $12.3 million to adjust the carrying value of this property to fair value less estimated costs to sell during the thirteen weeks ended June 26, 2011.