how do i read this sql code

hello,

I think i'm having a brain cramp. but the exec @failing   stored proc   ..output  
followed by if @failing > 0


 is throwing me off here.  Can someone explain how to "read" the code .    
Is the output stATEMENT rEPLACING THE @FAILING WITH THE return code being st in the stored proc if it errors out?



         set @LocalProcedure = 'up_XL_zUpdateStgSiteToSite'
      exec @Failed = JabilDBImport.dbo.up_zUpdateImportJobEvent
         @ImportJobID = @ImportJobID,
         @Event = 'Update Site',
         @StartDTS = @CreateUpdateDTS,
         @AddMessage = 'Started',
         @Status = 'Processing...',
         @EndDTS = null
      exec @Failed = up_XL_zGetDataSourceID @ImportJobID, @DataSourceID OUTPUT
      if @Failed <> 0
        begin
          -- ams 7/9/02 c1/a2
          --RAISERROR('up_zUpdateStgSiteToSite',18,1)
          set @ErrorMessage = @LocalProcedure + ' - Error calling up_XL_zGetDataSourceID'
          RAISERROR(@ErrorMessage,18,1)
          return 1
        end