Annual report pursuant to Section 13 and 15(d)

Restructuring

v2.4.0.6
Restructuring
 12 Months Ended
Dec. 29, 2012
Restructuring and Related Activities [Abstract]  
Restructuring
Restructuring
2012 Restructuring Plan
In the fourth quarter of 2012, the Company implemented a restructuring plan designed to improve the Company’s cost structure and to strengthen its competitiveness in core growth areas. The plan primarily involves a workforce reduction of approximately 14% as well as asset impairments and facility consolidations. The Company recorded restructuring expense in the fourth quarter of 2012 of approximately $90 million. Substantially all of the restructuring expense is related to severance. Of the total restructuring expense, approximately $46 million related to cash payments in the fourth fiscal quarter of 2012, with the remaining $41 million related to anticipated cash payments in 2013. The non-cash portion of the restructuring expense included approximately $4 million of asset impairments.
2011 Restructuring Plan
In the fourth quarter of 2011, the Company initiated a restructuring plan to strengthen its competitive positioning, implement a more competitive cost structure and conduct a workforce rebalancing to better address faster growing market segments. The plan included a reduction of the Company's global workforce by 13% and contract and program terminations. The Company recorded a $100 million restructuring charge in the fourth quarter of 2011, which consisted of $54 million for severance and costs related to the continuation of certain employee benefits, $45 million for contract or program termination costs and $1 million for asset impairments. In 2012, the Company recorded an additional $8 million for severance and costs related to the continuation of certain employee benefits. The plan was substantially completed as of the end of the first quarter of 2012.
The following table provides a summary of the restructuring activities during 2012 and 2011 and the related liabilities recorded in “Other current liabilities” on the Company’s consolidated balance sheets remaining as of December 29, 2012:
 
Severance
and related
benefits
 
Other exit
related
costs
 
Total
 
(In millions)
Balance at December 25, 2010
$
—

 
$
—

 
$
—

Charges
54

 
46

 
100

Cash payments
(32
)
 
—

 
(32
)
Non-cash charges
—

 
(1
)
 
(1
)
Balance at December 31, 2011
22

 
45

 
67

Charges
95

 
5

 
100

Cash payments
(76
)
 
(29
)
 
(105
)
Non-cash charges
—

 
(4
)
 
(4
)
Balance at December 29, 2012
$
41

 
$
17

 
$
58


2008 Restructuring Plan
In the fourth quarter of 2008, the Company initiated a restructuring plan to reduce its cost structure, which was substantially completed in 2009. In the fourth quarter of 2011, the Company reversed approximately $2 million of costs associated with the 2008 restructuring plan because the actual restoration costs for vacated facilities were lower than previously estimated. In 2010, the Company reversed approximately $4 million of costs associated with the 2008 restructuring plan because severance and costs related to the continuation of certain employee benefits were lower than previously estimated.

The following table provides a summary of each major type of cost associated with the 2012, 2011 and 2008 restructuring plans through December 29, 2012:
 
2012
 
2011
 
2010
 
(In millions)
Severance and benefits
$
95

 
$
54

 
$
(4
)
Contract or program terminations
—

 
45

 
—

Asset impairments
4

 
1

 
—

Facility consolidations and closures
1

 
(2
)
 
—

Total
$
100

 
$
98

 
$
(4
)