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Exit or Disposal Activities
3 Months Ended
Mar. 30, 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 March 30, 2013, the Company recorded $9 million of exit costs related to two ongoing programs which we expect will result in COGS and SGA expense savings. The costs included $4 million for severance, $4 million of asset write-offs and $1 million of other cash costs including relocation of assets and employees. The costs impacted reportable segments, as follows (in millions): U.S. Morning Foods $2; U.S. Snacks $1; and Asia Pacific $6. During the quarter ended March 31, 2012, the Company recorded less than $1 million of costs associated with exit or disposal activities. At March 30, 2013, exit cost reserves were $1 million, related to severance payments which will be made during 2013. 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 March 30, 2013, total program costs incurred to date were $29 million and include $7 million for severance, $1 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 $3; 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.