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Restructuring Charges and Cost Savings Initiatives
3 Months Ended
Nov. 01, 2015
Restructuring Charges [Abstract]  
Restructuring Charges
Restructuring Charges and Cost Savings Initiatives
2015 Initiatives
On January 29, 2015, we announced plans to implement a new enterprise design focused mainly on product categories. Under the new design, which we fully implemented at the beginning of 2016, our businesses are organized in the following divisions: Americas Simple Meals and Beverages, Global Biscuits and Snacks, and Campbell Fresh.
In support of the new enterprise design, we designed and implemented a new Integrated Global Services (IGS) organization to deliver shared services across the company. IGS, which became effective at the beginning of 2016, is expected to reduce costs while increasing our efficiency and effectiveness. We are also pursuing other initiatives to reduce costs and increase effectiveness, such as streamlining our organizational structure and adopting zero-based budgeting over time.
As part of these initiatives, we commenced a voluntary employee separation program available to certain U.S.-based salaried employees nearing retirement who met age, length-of-service and business unit/function criteria. A total of 471 employees elected the program. The electing employees remained with us through July 31, 2015, with some remaining beyond July 31. We also implemented an initiative to reduce overhead across the organization by eliminating approximately 230 positions. In the first quarter of 2016, we recorded a restructuring charge of $21. In 2015, we recorded a restructuring charge of $102 related to these initiatives.
In the first quarter of 2016, we also incurred charges of $15 recorded in Administrative expenses related to the implementation of the new organizational structure and cost savings initiatives. In 2015,we incurred charges of $22 recorded in Administrative expenses related to the these initiatives.
The aggregate after-tax impact of restructuring charges, implementation costs and other related costs recorded in the first quarter of 2016 was $23, or $.07 per share. The aggregate after-tax impact of restructuring charges and implementation and other costs recorded in 2015 was $78, or $.25 per share. A summary of the pre-tax costs associated with the 2015 initiatives is as follows:
 
Recognized
as of
November 1, 2015
Severance pay and benefits
$
115

Implementation costs and other related costs
45

Total
$
160


The total estimated pre-tax costs for the 2015 initiatives are approximately $250 to $325. We expect to incur these costs through 2018.
We expect the costs to consist of approximately $150 to $165 in severance pay and benefits, and approximately $100 to $160 in implementation costs and other related costs.We expect the total pre-tax costs related to the 2015 initiatives will be associated with segments as follows: Americas Simple Meals and Beverages - approximately 32%; Global Biscuits and Snacks - approximately 31%; Campbell Fresh - approximately 3%; and Corporate - approximately 34%.
A summary of the restructuring activity and related reserves associated with the 2015 initiatives at November 1, 2015, is as follows:
 
Severance Pay and Benefits
 
Other Restructuring Costs
 
Implementation Costs and Other Related Costs(3)
 
Total Charges
Accrued balance at August 2, 2015(1)
$
85

 
$
8

 
 
 
 
2016 charges
21

 

 
15

 
$
36

2016 cash payments
(9
)
 
(8
)
 
 
 
 
Accrued balance at November 1, 2015(2)
$
97

 
$

 
 
 
 
______________________________________
(1) 
Includes $45 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
(2) 
Includes $39 of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet.
(3)  
Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. The costs are included in Administrative expenses in the Consolidated Statements of Earnings.
Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs incurred to date associated with segments is as follows:
 
Americas Simple Meals and Beverages
 
Global Biscuits and Snacks
 
Campbell Fresh
 
Corporate
 
Total
Severance pay and benefits
$
57

 
$
53

 
$
1

 
$
4

 
$
115

Implementation costs and other related costs
7

 
5

 

 
33

 
45

 
$
64

 
$
58

 
$
1

 
$
37

 
$
160