XML 147 R26.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Impairment, Restructuring Charges and Other Related Closure Costs | 12 Months Ended
--- | ---
Dec. 31, 2013
Restructuring And Related Activities [Abstract] |
Impairment, Restructuring Charges and Other Related Closure Costs |
18. | IMPAIRMENT, RESTRUCTURING CHARGES AND OTHER RELATED CLOSURE COSTS
Impairment, restructuring charges and other related closure costs incurred in 2013, 2012, and 2011 are summarized as follows:
Year ended December 31, 2013 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
ST-Ericsson restructuring plans |  |  | — |  |  |  | (6 | ) |  |  | (3 | ) |  |  | (9 | )
ST-Ericsson exit |  |  | (17 | ) |  |  | (69 | ) |  |  | — |  |  |  | (86 | )
Digital restructuring plan |  |  | (2 | ) |  |  | (1 | ) |  |  | (2 | ) |  |  | (5 | )
$600-650 million net opex plan |  |  | — |  |  |  | (88 | ) |  |  | — |  |  |  | (88 | )
Manufacturing consolidation |  |  | (29 | ) |  |  | (8 | ) |  |  | — |  |  |  | (37 | )
Annual impairment test |  |  | (56 | ) |  |  | — |  |  |  | — |  |  |  | (56 | )
Assets held for sale impairment |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | (5 | )
Other restructuring initiatives |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | (6 | )
Total |  |  | (109 | ) |  |  | (178 | ) |  |  | (5 | ) |  |  | (292 | )
Year ended December 31, 2012 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
Manufacturing restructuring plan |  |  | (21 | ) |  |  | — |  |  |  | (2 | ) |  |  | (23 | )
ST-Ericsson restructuring plan |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | )
ST-Ericsson cost savings plan |  |  | — |  |  |  | (10 | ) |  |  | (10 | ) |  |  | (20 | )
ST-Ericsson April 2012 restructuring plan |  |  | (2 | ) |  |  | (60 | ) |  |  | (4 | ) |  |  | (66 | )
ST-Ericsson exit |  |  | (544 | ) |  |  | — |  |  |  | — |  |  |  | (544 | )
Digital restructuring plan |  |  | (7 | ) |  |  | (13 | ) |  |  | — |  |  |  | (20 | )
Annual impairment test |  |  | (694 | ) |  |  | — |  |  |  | — |  |  |  | (694 | )
Other restructuring initiatives |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | (8 | )
Total |  |  | (1,268 | ) |  |  | (84 | ) |  |  | (24 | ) |  |  | (1,376 | )
Year ended December 31, 2011 |  | Impairment |  |  | Restructuring charges |  |  | Other related closure costs |  |  | Total impairment, restructuring charges and other related closure costs |
Manufacturing restructuring plan |  |  | (3 | ) |  |  | (13 | ) |  |  | (21 | ) |  |  | (37 | )
ST-Ericsson restructuring plan |  |  | (1 | ) |  |  | (3 | ) |  |  | (3 | ) |  |  | (7 | )
ST-Ericsson cost savings plan |  |  | — |  |  |  | (26 | ) |  |  | — |  |  |  | (26 | )
Other restructuring initiatives |  |  | — |  |  |  | (1 | ) |  |  | (4 | ) |  |  | (5 | )
Total |  |  | (4 | ) |  |  | (43 | ) |  |  | (28 | ) |  |  | (75 | )
Impairment charges In 2013, the Company recorded impairment charges of $109 million corresponding primarily to:
| • |  | $56 million, as part of the annual impairment test performed during the third quarter, on Digital Convergence Group goodwill ($38 million) and dedicated intangible assets ($18 million);
| • |  | $29 million on certain long-lived assets as part of the Company’s manufacturing consolidation;
| • |  | $17 million impairment primarily related to long-lived assets as part of the exit of ST-Ericsson; and
| • |  | $5 million impairment charge on Veredus assets classified as Assets held for sale, as of December 31, 2013.
In 2012, the Company recorded impairment charges of $1,268 million corresponding to:
| • |  | $1,234 million on Wireless goodwill and other intangible assets of which $690 million impairment on Wireless goodwill as part of the annual impairment test performed during the third quarter and $544 million impairment on Wireless goodwill and other intangible assets recorded in December following the Company’s decision to exit ST-Ericsson. The $1,234 million amount is composed of an impairment charge of $922 million on Wireless goodwill, $261 million impairment on Wireless customer relationships, $45 million impairment on Wireless capitalized software and $6 million impairment on acquired technology;
| • |  | $21 million impairment on the Carrollton (Texas) building and facilities;
| • |  | $7 million impairment charges on intangibles for which no alternative future use was identified within the Company, as part of the Digital restructuring plan;
| • |  | $4 million impairment on certain intangibles as part of the annual impairment test; and
| • |  | $2 million impairment charges primarily related to long-lived assets with no alternative future use within the Company.
In 2011, the Company recorded impairment charges of $4 million primarily related to long-lived assets for which no alternative future use was identified within the Company. Restructuring charges and other related closure costs The Company is currently engaged in three major restructuring plans, the Manufacturing consolidation plan, the $600-650 million net opex plan and the Digital restructuring plan which are described hereafter. In July 2013, the Company announced that it will wind down certain 6-inch manufacturing lines and consolidate back-end activities in China to Shenzhen (the “Manufacturing consolidation plan”). Further to the announcement on December 10, 2012 to reduce the Company’s net operating expenses comprised of combined selling, general and administrative and research and development expenses, net of R&D grants, to the level of $600 million to $650 million on a quarterly basis by the beginning of 2014, the Company committed restructuring actions in 2013 (the “$600-650 million net opex plan”). In October 2012, the Company announced a savings plan (the “Digital restructuring plan”), impacting primarily the Digital Convergence Group product line, designed to achieve $150 million in annual savings upon completion by the end of 2013. In 2013, the Company incurred restructuring charges and other related closure costs for $183 million corresponding to:
| • |  | $88 million for the $600-650 million net opex plan corresponding to employee termination benefits;
| • |  | $69 million recorded before ST-Ericsson deconsolidation for the ST-Ericsson exit, primarily related to employee termination benefits, net of an adjustment of $31 million mainly resulting from a significant reduction of estimated restructured employees in Sweden, as part of the exit of ST-Ericsson;
| • |  | $9 million recorded before ST-Ericsson deconsolidation for the ST-Ericsson restructuring plans, primarily related to employee termination benefits;
| • |  | $8 million for the Manufacturing consolidation plan corresponding to employee termination benefits; and
| • |  | $9 million for other restructuring plans.
In 2012, the Company incurred restructuring charges and other related closure costs for $108 million corresponding to:
| • |  | $64 million for the ST-Ericsson April 2012 restructuring plan composed of $60 million employee termination benefits and $4 million other closure costs mainly related to lease contract terminations pursuant to the closure of certain locations;
| • |  | $20 million for the ST-Ericsson cost savings plan primarily related to employee termination benefits and lease contract termination costs recorded at cease-use date pursuant to the closure of certain locations;
| • |  | $13 million for the Digital restructuring plan primarily related to employee termination benefits; and
| • |  | $11 million for other restructuring plans.
In 2011, the Company incurred restructuring charges and other related closures costs for $71 million corresponding to:
| • |  | $34 million for the manufacturing restructuring plan, corresponding primarily to lease contract termination costs recorded at cease-use date and one-time termination benefits to be paid to employees who rendered services until the complete closure of the Carrollton (Texas) and Phoenix (Arizona) fabs. This plan was substantially finalized in the second quarter of 2011;
| • |  | $26 million for the ST-Ericsson cost savings plan, consisting mainly in ongoing termination benefits accrued for involuntary leaves and benefits paid within voluntary leave arrangements;
| • |  | $6 million for the ST-Ericsson restructuring plan composed of $3 million employee termination benefits and $3 million lease contract termination costs and other closure costs pursuant to the closure of certain locations; and
| • |  | $5 million restructuring charges and other related closure costs related to other committed restructuring initiatives.
Changes to the restructuring provisions recorded on the consolidated balance sheets from December 31, 2011 to December 31, 2013 are summarized as follows:
|  | ST-Ericsson exit |  |  | ST-Ericsson restructuring plans |  |  | $600-650 million net opex plan |  |  | Digital restructuring plan |  |  | Manufacturing Restructuring plan |  |  | Manufacturing consolidation |  |  | Other restructuring initiatives |  |  | Total |
Provision as at December 31, 2011 |  |  | — |  |  |  | 36 |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 13 |  |  |  | 53 |
Charges incurred in 2012 |  |  | 8 |  |  |  | 96 |  |  |  | — |  |  |  | 13 |  |  |  | 2 |  |  |  | — |  |  |  | 3 |  |  |  | 122 |
Adjustments for unused provisions |  |  | — |  |  |  | (11 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3 | ) |  |  | (14 | )
Amounts paid |  |  | — |  |  |  | (65 | ) |  |  | — |  |  |  | (1 | ) |  |  | (3 | ) |  |  | — |  |  |  | (4 | ) |  |  | (73 | )
Currency translation effect |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
Provision as at December 31, 2012 |  |  | 8 |  |  |  | 59 |  |  |  | — |  |  |  | 12 |  |  |  | 3 |  |  |  | — |  |  |  | 9 |  |  |  | 91 |
Charges incurred in 2013 |  |  | 100 |  |  |  | 12 |  |  |  | 88 |  |  |  | 3 |  |  |  | — |  |  |  | 8 |  |  |  | 6 |  |  |  | 217 |
Adjustments for unused provisions |  |  | (31 | ) |  |  | (3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (34 | )
Amounts paid |  |  | (30 | ) |  |  | (56 | ) |  |  | (44 | ) |  |  | (9 | ) |  |  | (1 | ) |  |  | — |  |  |  | (7 | ) |  |  | (147 | )
Currency translation effect |  |  | (1 | ) |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
ST-Ericsson break-up and deconsolidation |  |  | (46 | ) |  |  | (12 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | (52 | )
Provision as at December 31, 2013 |  |  | — |  |  |  | — |  |  |  | 46 |  |  |  | 6 |  |  |  | 2 |  |  |  | 8 |  |  |  | 14 |  |  |  | 76 |
An amount of $65 million is expected to be paid within twelve months, as detailed in Note 12. The manufacturing restructuring plan, which was expected to result in pre-tax charges in the range of $270 to $300 million, resulted in a total charge of $313 million. This plan is now completed. The Digital restructuring plan is expected to result in a total pre-tax charge of $25 million to $30 million, of which $16 million have been incurred as of December 31, 2013. The plan is substantially completed in 2013. The $600-650 million net opex plan resulted in an $88 million charge incurred as of December 31, 2013. The plan is currently expected to be completed in 2014. The Manufacturing consolidation plan resulted in an $8 million charge incurred as of December 31, 2013. The plan is expected to be completed in 2015. Upon the ST-Ericsson deconsolidation as of September 1, 2013, all the ST-Ericsson restructuring plans have been deconsolidated by the Company. In 2013, total amounts paid for restructuring and related closure costs amounted to $147 million. The total actual costs that the Company will incur may differ from these estimates based on the timing required to complete the restructuring plan, the number of people involved, the final agreed termination benefits and the costs associated with the transfer of equipment, products and processes.

X
- Details
Name: | us-gaap_RestructuringAndRelatedActivitiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
Name: | us-gaap_RestructuringAndRelatedActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration