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Exit or Disposal Activities
6 Months Ended
Jun. 29, 2013
Exit or Disposal Activities [Abstract]  
Exit or Disposal Activities [Text Block]

Note 3 Exit or disposal activities

The Company views its continued spending on cost-reduction activities as part of its ongoing operating principles to provide greater visibility in achieving its long-term profit growth targets. Initiatives undertaken are expected to recover cash implementation costs within a five-year period of completion. Upon completion (or as each major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced depreciation.

Costs summary

During the quarter ended June 29, 2013, the Company recorded $1 million of exit costs related to two ongoing programs which the Company expects will result in COGS and SGA expense savings. The costs included $1 million of other cash costs including relocation of assets and employees in the U.S. Morning Foods reportable segment. During the year-to-date period ended June 29, 2013, the Company recorded $10 million of costs associated with exit or disposal activities. The costs included $4 million for severance, $4 million for asset write-offs and $2 million for other cash costs including relocation of assets and employees. The costs impacted reportable segments, as follows (in millions): U.S. Morning Foods $3; U.S. Snacks $1; and Asia Pacific $6. During the quarter and year-to-date periods ended June 30, 2012, the Company recorded $4 million of costs associated with exit or disposal activities. The costs included $2 million for severance in the U.S. Snacks reportable segment, $1 million of severance in the U.S. Morning Foods reportable segment and $1 million of asset write-offs in the European reportable segment. At June 29, 2013, there were no exit cost reserves for severance. Based on forecasted exchange rates, the Company currently expects to incur an additional $4 million in exit costs for these programs in 2013.

For programs that are active as of June 29, 2013, total program costs incurred to date were $30 million and include $7 million for severance, $2 million for other cash costs including relocation of assets and employees, and $21 million for asset write-offs. The costs impacted reportable segments as follows (in millions): Asia Pacific $23; U.S. Morning Foods $4; and U.S. Snacks $3.

Refer to the footnotes within the Company's 2012 Annual Report on Form 10-K for further information on these initiatives.