Exit and Disposal Costs

9 Months Ended

Sep. 30, 2013

Restructuring And Related Activities [Abstract]

3. Exit and Disposal Costs

The following table provides the components and changes in the Corporation’s restructuring accruals:


	E&P			Corporate and Other			Downstream Businesses			Total
	(In millions)
Employee Severance
Balance at January 1, 2013	$	—		$	—		$	—		$	—
Provision		86			27			122			235	(a)
Payments		(25	)		(1	)		(4	)		(30	)

Balance at September 30, 2013		61			26			118			205


Facility and Other Exit Costs
Balance at January 1, 2013		—			—			—			—
Provision		9	(b)		—			48	(c)		57
Payments		(9	)		—			(35	)		(44	)

Balance at September 30, 2013		—			—			13			13


Total restructuring accruals at September 30, 2013	$	61		$	26		$	131		$	218

(a)

Of the total employee severance charges for the nine months ended September 30, 2013, $45 million was included in Operating costs and expenses, $16 million in Exploration expenses, $52 million in General and administrative expenses and $122 million in Income from discontinued operations. Total employee severance charges for the three months ended September 30, 2013 were $44 million, of which $1 million was included in Operating costs and expenses, $1 million in Exploration expenses, $9 million in General and administrative expenses and $33 million in Income from discontinued operations.

(b)

Included in General and administrative expenses.

(c)

Included in Income from discontinued operations.

The employee severance charges primarily resulted from the asset sales program announced in March 2013, which was initiated to continue the Corporation’s transformation to a more focused pure play E&P company. The severance charges were based on probable amounts incurred under ongoing severance arrangements or other statutory requirements, plus amounts earned through September 30, 2013 under enhanced benefit arrangements. The enhanced benefits are recognized ratably over the estimated service period required for the employee to earn the benefit upon termination. The Corporation expects to recognize approximately $80 million of pre-tax enhanced benefits expense over the estimated remaining service period beyond September 30, 2013, of which $10 million relates to E&P, $25 million to Corporate and Other and $45 million to the downstream businesses. The Corporation’s estimate of employee severance costs could change due to a number of factors, including the number of employees that work through the requisite service date and the timing of when each divestiture occurs.

The facility and other exit costs relate to the shutdown of Port Reading refining operations and contract termination and other costs resulting from the Corporation’s exit from Russian operations. Beyond the amounts accrued at September 30, 2013, the Corporation expects to record costs totaling approximately $25 million pre-tax to complete the idling of the Port Reading refinery equipment, as such costs may not be recognized until incurred. In addition, the Corporation also expects to incur pre-tax charges totaling approximately $35 million associated with the cessation of use of certain leased office space in the fourth quarter of 2013.

- 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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