Restructuring and Employee Severance
The following table summarizes restructuring and employee severance costs relating to our restructuring activities:
|
| | | | | | | | | | | |
(in millions) | 2013 (3) | | 2012 | | 2011 |
Employee-related costs (1) | $ | 59 |
| | $ | 20 |
| | $ | 7 |
|
Facility exit and other costs (2) | 12 |
| | 1 |
| | 8 |
|
Total | $ | 71 |
| | $ | 21 |
| | $ | 15 |
|
| |
(1) | Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. |
| |
(2) | Facility exit and other costs primarily consist of lease termination costs, accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring our delivery of information technology infrastructure services. |
| |
(3) | Includes $30 million of employee-related costs and $10 million of facility exit and other costs related to the restructuring within our Medical segment described further below. |
On January 30, 2013, we announced a restructuring plan within our Medical segment. Under this restructuring plan, we are moving production of procedure kits from our facility in Waukegan, Illinois to other facilities and selling property and consolidating office space in Waukegan, Illinois. In addition, we have reorganized our Medical segment and plan to sell our sterilization processes in El Paso, Texas.
At this time, we estimate the total costs associated with this restructuring plan to be approximately $79 million on a pre-tax basis, of which $51 million was recognized during fiscal 2013, including the employee-related costs and facility exit and other costs discussed above, as well as the gamma sterilization assets write-down as discussed in Note 4. Of the estimated $28 million remaining costs to be recognized through the end of fiscal 2014, we estimate that approximately $3 million will be employee-related costs; $11 million will be facility exit and other costs; and $14 million will be an expected loss on disposal of the property in Waukegan, Illinois described above. We have evaluated this property and have determined that at June 30, 2013 it does not meet the criteria for classification as held for sale.
We recognized $11 million of employee-related costs related to a restructuring plan within our Nuclear Pharmacy Services division during the fourth quarter of fiscal 2013.
The following table summarizes activity related to liabilities associated with restructuring and employee severance:
|
| | | | | | | | | | | |
(in millions) | Employee- Related Costs | | Facility Exit and Other Costs | | Total |
Balance at June 30, 2010 | $ | 9 |
| | $ | 7 |
| | $ | 16 |
|
Additions | 7 |
| | 8 |
| | 15 |
|
Payments and other adjustments | (10 | ) | | (11 | ) | | (21 | ) |
Balance at June 30, 2011 | $ | 6 |
| | $ | 4 |
| | $ | 10 |
|
Additions | 22 |
| | 1 |
| | 23 |
|
Payments and other adjustments | (12 | ) | | (3 | ) | | (15 | ) |
Balance at June 30, 2012 | $ | 16 |
| | $ | 2 |
| | $ | 18 |
|
Additions | 63 |
| | 2 |
| | 65 |
|
Payments and other adjustments | (24 | ) | | (2 | ) | | (26 | ) |
Balance at June 30, 2013 | $ | 55 |
| | $ | 2 |
| | $ | 57 |
|
