SEVERANCE AND FACILITY CLOSURE COSTS

12 Months Ended

Dec. 29, 2012

NOTE B – SEVERANCE AND FACILITY CLOSURE COSTS

In recent years, the Company has taken actions to adapt to changing and increasingly competitive conditions in the markets in which the Company serves. These actions include closing stores and distribution centers, consolidating functional activities, disposing of businesses and assets, and taking actions to improve process efficiencies.

Severance and facility closure accruals associated with exit and restructuring-related activities are as follows:


(In millions)	Beginning Balance		Charges Incurred		Cash Payments			Non-cash Settlements and Accretion		Currency and Other Adjustments		Ending Balance
2012
Termination benefits	$	12	$	26	$	(33	)	$	—	$	1	$	6
Lease, contract obligations and, other costs		95		21		(48	)		8		1		77

Total	$	107	$	47	$	(81	)	$	8	$	2	$	83

2011
Termination benefits	$	4	$	25	$	(17	)	$	—	$	—	$	12
Lease, contract obligations and, other costs		113		26		(59	)		12		3		95

Total	$	117	$	51	$	(76	)	$	12	$	3	$	107

The charges incurred are presented in the following captions of the Consolidated Statements of Operations.


(In millions)	2012		2011		2010
Cost of goods sold and occupancy costs	$	—	$	1	$	—
Operating and selling expenses		21		25		14
General and administrative expenses		26		25		22

The charges incurred are recognized in Divisions as presented below.


(In millions)	2012		2011		2010
North American Retail Division	$	3	$	14	$	2
North America Business Solutions Division		5		5		1
International Division		38		29		23
Corporate level		1		3		10

Severance costs usually require cash payment within one year of expense recognition. Facility closure costs usually require cash payments over the related lease contract period or until the lease is terminated. The Company maintains accruals for facilities closed that are considered part of operating activities. Accrual for facilities closed for 2012 and 2011 totaled $10 million and $14 million, respectively. Closure costs and accretion totaled $4 million and $1 million in 2012 and 2011, respectively. Cash payments of $8 million and $7 were made in 2012 and 2011, respectively.

- 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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