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Restructuring Charges
3 Months Ended
Oct. 28, 2012
Restructuring Charges [Abstract]  
Restructuring Charges
Restructuring Charges
2013 Initiatives
On September 27, 2012, the company announced several initiatives to improve its U.S. supply chain cost structure and increase asset utilization across its U.S. thermal plant network. The company expects to eliminate approximately 727 positions in connection with the initiatives, which include the following:
The company will close its thermal plant in Sacramento, California, which produces soups, sauces and beverages. The closure will result in the elimination of approximately 700 full-time positions and will be completed in phases, with plans to cease operations in July 2013. The company plans to shift the majority of Sacramento's soup, sauce and beverage production to its thermal plants in Maxton, North Carolina; Napoleon, Ohio; and Paris, Texas.
The company will also close its spice plant in South Plainfield, New Jersey, which will result in the elimination of 27 positions. The company will consolidate spice production at its Milwaukee, Wisconsin, plant in 2013.
In the first quarter of 2013, the company recorded a restructuring charge of $22 related to these initiatives. In addition, approximately $21 of costs related to these initiatives were recorded in Cost of products sold, primarily representing accelerated depreciation and other exit costs. The aggregate after-tax impact of restructuring charges and related costs was $27, or $.09 per share. A summary of the pre-tax costs and remaining costs associated with the initiatives is as follows:
 
Total
Program
 
Recognized
as of
October 28, 2012
 
Remaining
Costs to be
Recognized
Severance pay and benefits
$
25

 
$
(20
)
 
$
5

Accelerated depreciation
75

 
(21
)
 
54

Other exit costs
15

 
(2
)
 
13

Total
$
115

 
$
(43
)
 
$
72


Of the aggregate $115 of pre-tax costs, the company expects approximately $38 will be cash expenditures. In addition, the company expects to invest approximately $27 in capital expenditures, primarily to relocate and refurbish a beverage filling and packaging line.
A summary of the restructuring activity and related reserves associated with these initiatives at October 28, 2012 is as follows:
 
 
 
 
Three Months Ended
 
 
 
 
 
October 28, 2012
 
 
 
Accrued
Balance at
 
 
 
Cash
 
Accrued
Balance at
 
 
July 29, 2012
 
Charges
 
Payments
 
October 28, 2012
Severance pay and benefits
 
$

 
$
20

 
$

 
$
20

Other exit costs
 

 

 

 

 
 
$

 
20

 
$

 
$
20

Accelerated depreciation
 
 
 
21

 
 
 
 
Other non-cash exit costs
 
 
 
2

 
 
 
 
Total charges
 
 
 
$
43

 
 
 
 

A summary of restructuring charges incurred to date associated with segments is as follows:
 
U.S.
Simple
Meals
 
U.S.
Beverages
 
Total
Severance pay and benefits
$
15

 
$
5

 
$
20

Accelerated depreciation
16

 
5

 
21

Other exit costs
1

 
1

 
2

 
$
32

 
$
11

 
$
43


The company expects to incur additional pre-tax costs of approximately $72 by segment as follows: U.S. Simple Meals $54 and U.S. Beverages $18. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.
2011 Initiatives
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 is investing 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.
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 2012, the company recorded a restructuring charge of $10 ($6 after tax or $.02 per share). Of the amount recorded in 2012, $2 ($1 after tax) was recorded in the first quarter. In the fourth quarter of 2011, the company recorded $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
October 28, 2012
 
Remaining
Costs to be
Recognized
Severance pay and benefits
$
43

 
$
(41
)
 
$
2

Asset impairment/accelerated depreciation
23

 
(23
)
 

Other exit costs
9

 
(9
)
 

Total
$
75

 
$
(73
)
 
$
2


Of the aggregate $75 of pre-tax costs, approximately $50 represents cash expenditures, the majority of which was spent in 2012. In addition, the company expects to invest approximately $40 in capital expenditures in connection with the actions, of which approximately $21 has been invested as of October 28, 2012. 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 October 28, 2012 is as follows:
 
 
 
 
Three Months Ended
 
 
 
 
 
 
October 28, 2012
 
 
 
 
Accrued
Balance at
 
 
 
Cash
 
Foreign  Currency
Translation
 
Accrued
Balance at
 
 
July 29, 2012
 
Charges
 
Payments
 
Adjustment
 
October 28, 2012
Severance pay and benefits
 
$
14

 
$

 
$
(3
)
 
$

 
$
11

Other exit costs
 
2

 

 

 

 
2

 
 
$
16

 

 
$
(3
)
 
$

 
$
13



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
 
Bolthouse and Foodservice
 
Corporate
 
Total
Severance pay and benefits
$
10

 
$
13

 
$
12

 
$
3

 
$
1

 
$
2

 
$
41

Asset impairment/accelerated depreciation
20

 

 
3

 

 

 

 
23

Other exit costs
2

 

 
3

 

 

 
4

 
9

 
$
32

 
$
13

 
$
18

 
$
3

 
$
1

 
$
6

 
$
73


The company expects to incur additional pre-tax costs of approximately $2 in the Global Baking and Snacking segment. Segment operating results do not include restructuring charges as segment performance is evaluated excluding such charges.