| 4. | Exit and Disposal Costs |
The following table provides the components of and changes in the Corporation’s restructuring accruals:
| Exploration and Production |
Retail Marketing and Other |
Corporate | Discontinued Operations |
Total | ||||||||||||||||
| (In millions) | ||||||||||||||||||||
|
Employee Severance |
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Balance at January 1, 2013 |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Provision (a) |
75 | 40 | 29 | 108 | 252 | (b) | ||||||||||||||
|
Payments |
(43 | ) | — | (3 | ) | (35 | ) | (81 | ) | |||||||||||
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Balance at December 31, 2013 |
32 | 40 | 26 | 73 | 171 | |||||||||||||||
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Facility and Other Exit Costs |
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Balance at January 1, 2013 |
— | — | — | — | — | |||||||||||||||
|
Provision |
62 | (c) | 28 | (d) | 17 | (e) | 113 | (f) | 220 | |||||||||||
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Payments |
(9 | ) | (24 | ) | — | (69 | ) | (102 | ) | |||||||||||
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Balance at December 31, 2013 |
53 | 4 | 17 | 44 | 118 | |||||||||||||||
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Total restructuring accruals at December 31, 2013 |
$ | 85 | $ | 44 | $ | 43 | $ | 117 | $ | 289 | ||||||||||
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| (a) |
Amounts are before the reversal of approximately $33 million of share-based compensation expense related to grants that are expected to be forfeited. |
| (b) |
Of the total employee severance charges for 2013, $22 million was included in Operating costs and expenses, $19 million in Exploration expenses, $40 million in Marketing expenses, $63 million in General and administrative expenses and $108 million in Income from discontinued operations. |
| (c) |
Included $37 million in General and administrative expenses, $16 million in Depreciation, depletion and amortization, $1 million in Operating costs and expenses and $8 million in Other, net. |
| (d) |
Included in Marketing expenses. |
| (e) |
Included in General and administrative expenses. |
| (f) |
Included in Income from discontinued operations. |
The employee severance charges primarily resulted from the Corporation’s divestiture program announced in March 2013, which was initiated to continue its transformation to a more focused pure play E&P company. The severance charges were based on probable amounts incurred under ongoing severance arrangements or other statutory requirements, plus amounts earned through December 31, 2013 under enhanced benefit arrangements. The expense associated with the enhanced benefits is recognized ratably over the estimated service period required for the employee to earn the benefit upon termination.
The Corporation expects to incur additional enhanced benefit charges of approximately $30 million beyond the amounts accrued at December 31, 2013, of which $5 million relates to E&P, $10 million to Retail Marketing and Other, $10 million to Corporate and $5 million to discontinued operations. The Corporation’s estimate of employee severance costs could change due to a number of factors, including the number of employees that work through the requisite service date and the timing of when each remaining divestiture occurs.
The facility and other exit costs relate to the shutdown of Port Reading refining operations, charges associated with the cessation of use of certain leased office space, contract termination costs and professional fees associated with the divestitures.