Note 4 — Restructuring Charges
On March 14, 2012, RAI announced that it and its subsidiaries, RJR Tobacco and RAI Services Company, referred to as RAISC, had completed a business analysis designed to identify resources to reinvest in their businesses. As a result of this initiative, the total U.S. workforce of RAI and its subsidiaries will decline by a net of approximately 10% upon the completion of the restructuring by the end of 2015.
Under existing severance plans, $111 million of severance, benefits and related costs and $38 million of pension-related benefits comprised a restructuring charge of $149 million during the first quarter of 2012. Of this charge, $138 million was recorded in the RJR Tobacco segment. As of December 31, 2013, $92 million had been utilized. Accordingly, in the consolidated balance sheet as of December 31, 2013, $19 million was included in other current liabilities and $38 million was included in other noncurrent liabilities.
The components of the restructuring charge accrued and utilized were as follows:
Employee Severance and Benefits |
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Original accrual |
$ | 149 | ||
Utilized in 2012 |
(78 | ) | ||
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Balance as of December 31, 2012 |
71 | |||
Utilized in 2013 |
(14 | ) | ||
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|
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Balance as of December 31, 2013 |
$ | 57 | ||
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