Restructuring Charges

9 Months Ended

Apr. 29, 2012

On June 28, 2011, the company announced a series of initiatives to improve supply chain efficiency and reduce overhead costs across the organization to help fund plans to drive the growth of the business. The company also announced its intent to exit the Russian market. Details of the initiatives include:

•

In Australia, the company will invest in a new system to automate packing operations at its biscuit plant in Virginia. This investment will occur through the second quarter of 2013 and will result in the elimination of approximately 190 positions. Further, the company improved asset utilization in the U.S. by shifting production of ready-to-serve soups from Paris, Texas, to other facilities in 2012. In addition, the manufacturing facility in Marshall, Michigan, was closed in 2011, and manufacturing of Campbell’s Soup at Hand microwavable products was consolidated at the Maxton, North Carolina, plant in 2012.

•

The company streamlined its salaried workforce by approximately 510 positions around the world, including approximately 130 positions at its world headquarters in Camden, New Jersey. These actions were substantially completed in 2011. As part of this initiative, the company outsourced a larger portion of its U.S. retail merchandising activities to its current retail sales agent, Acosta Sales and Marketing, and eliminated approximately 190 positions. The company expects that this action will enhance merchandising effectiveness and coverage for its U.S. customers.


•	In connection with exiting the Russian market, the company has eliminated approximately 50 positions. The exit process commenced in 2011 and was substantially completed in 2012.

In the third quarter of 2012, the company recorded a restructuring charge of $4 ($3 after tax or $.01 per share) related to these initiatives, resulting in a year-to-date charge of $9 ($6 after tax or $.02 per share). In the fourth quarter of 2011, the company recorded a restructuring charge of $63 ($41 after tax or $.12 per share). A summary of the pre-tax charges and remaining costs associated with the initiatives is as follows:



	Total Program		Recognized as of April 29, 2012			Remaining Costs to be Recognized
Severance pay and benefits	$	43	$	(41	)	$	2
Asset impairment/accelerated depreciation	23		(23		)	—
Other exit costs	9		(8		)	1
Total	$	75	$	(72	)	$	3

Of the aggregate $75 of pre-tax costs, the company expects approximately $50 will be cash expenditures, the majority of which will be spent in 2012. In addition, the company expects to invest approximately $40 in capital expenditures in connection with the actions. The initiatives are expected to be completed by the end of 2013.

A summary of the restructuring activity and related reserves associated with these initiatives at April 29, 2012 is as follows:



			Nine Months Ended April 29, 2012
	Accrued Balance at				Cash			Foreign Currency Translation			Accrued Balance at
	July 31, 2011		Charges		Payments			Adjustment			April 29, 2012
Severance pay and benefits	$	35	$	4	$	(20	)	$	(1	)	$	18
Other exit costs	4		2		(3		)	—			3
	$	39	6		$	(23	)	$	(1	)	$	21
Asset impairment/accelerated depreciation			1
Other non-cash exit costs			2
Total charges			$	9

A summary of restructuring charges incurred to date associated with each segment is as follows:



	U.S. Simple Meals		Global Baking and Snacking		International Simple Meals and Beverages		U.S. Beverages		North America Foodservice		Corporate		Total
Severance pay and benefits	$	10	$	13	$	12	$	3	$	1	$	2	$	41
Asset impairment/accelerated depreciation	20		—		3		—		—		—		23
Other exit costs	1		—		3		—		—		4		8
	$	31	$	13	$	18	$	3	$	1	$	6	$	72

The company expects to incur additional pre-tax costs of approximately $3 by segment as follows: U.S. Simple Meals $1 and Global Baking and Snacking $2. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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