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Restructuring Charges and Cost Savings Initiatives | 9 Months Ended
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Apr. 30, 2023
Restructuring Charges [Abstract] |
Restructuring Charges | Restructuring Charges and Cost Savings Initiatives Multi-year Cost Savings Initiatives and Snyder's-Lance Cost Transformation Program and Integration Continuing Operations Beginning in fiscal 2015, we implemented initiatives to reduce costs and to streamline our organizational structure. Over the years, we expanded these initiatives by continuing to optimize our supply chain and manufacturing networks, as well as our information technology infrastructure. On March 26, 2018, we completed the acquisition of Snyder's-Lance. Prior to the acquisition, Snyder's-Lance launched a cost transformation program following a comprehensive review of its operations with the goal of significantly improving its financial performance. We continued to implement this program and identified opportunities for additional cost synergies as we integrated Snyder's-Lance. In 2022, we expanded these initiatives as we continue to pursue cost savings by further optimizing our supply chain and manufacturing network and through effective cost management. In the second quarter of 2023, we announced plans to consolidate our Snacks offices in Charlotte, North Carolina, and Norwalk, Connecticut, into our headquarters in Camden, New Jersey. Cost estimates for these expanded initiatives, as well as timing for certain activities, are continuing to be developed. A summary of the pre-tax charges recognized in the Consolidated Statements of Earnings related to these initiatives is as follows:
| Three Months Ended |  | Nine Months Ended |  |
(Millions) | April 30, 2023 |  | May 1, 2022 |  | April 30, 2023 |  | May 1, 2022 |  | Recognized as of April 30, 2023
Restructuring charges | $ | 6 |  |  | $ | — |  |  | $ | 15 |  |  | $ | — |  |  | $ | 279 |
Administrative expenses | 13 |  |  | 5 |  |  | 21 |  |  | 10 |  |  | 380 |
Cost of products sold | 12 |  |  | 1 |  |  | 12 |  |  | 5 |  |  | 96 |
Marketing and selling expenses | — |  |  | — |  |  | — |  |  | — |  |  | 14 |
Research and development expenses | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 6 |
Total pre-tax charges | $ | 33 |  |  | $ | 6 |  |  | $ | 50 |  |  | $ | 15 |  |  | $ | 775 |
A summary of the pre-tax costs associated with the initiatives is as follows:
(Millions) | Recognized as of April 30, 2023
Severance pay and benefits | $ | 239 |
Asset impairment/accelerated depreciation | 99 |
Implementation costs and other related costs | 437 |
Total | $ | 775 |
The total estimated pre-tax costs for actions that have been identified are approximately $880 million to $900 million and we expect to incur the costs through 2025. These estimates will be updated as the expanded initiatives are developed. We expect the costs for actions that have been identified to date to consist of the following: approximately $245 million to $250 million in severance pay and benefits; approximately $140 million in asset impairment and accelerated depreciation; and approximately $495 million to $510 million in implementation costs and other related costs. We expect these pre-tax costs to be associated with our segments as follows: Meals & Beverages - approximately 32%; Snacks - approximately 43%; and Corporate - approximately 25%. Of the aggregate $880 million to $900 million of pre-tax costs identified to date, we expect approximately $700 million to $720 million will be cash expenditures. In addition, we expect to invest approximately $620 million in capital expenditures through 2025, of which we invested $455 million as of April 30, 2023. The capital expenditures primarily relate to optimization of production within our Meals & Beverages manufacturing network, a U.S. warehouse optimization project, improvement of quality, safety and cost structure across the Snyder’s-Lance manufacturing network, optimization of information technology infrastructure and applications, implementation of our existing SAP enterprise-resource planning system for Snyder's-Lance, enhancements to our headquarters in Camden, New Jersey, and optimization of the Snyder’s-Lance warehouse and distribution network. A summary of the restructuring activity and related reserves at April 30, 2023, is as follows:
(Millions) |  | Severance Pay and Benefits |  |  |  |  |  | Implementation Costs and Other Related Costs(2) |  | Asset Impairment/Accelerated Depreciation |  | Other Non-Cash Exit Costs(3) |  | Total Charges
Accrued balance at July 31, 2022 |  | $ | 7 |  |  |  |  |  |  |  |  |  |  |  |  |
2023 charges |  | 12 |  |  |  |  |  |  | 18 |  |  | 17 |  |  | 3 |  |  | $ | 50 |
2023 cash payments |  | (6) |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued balance at April 30, 2023(1) |  | $ | 13 |  |  |  |  |  |  |  |  |  |  |  |  |
__________________________________ (1)Includes $7 million of severance pay and benefits recorded in Other liabilities in the Consolidated Balance Sheet. (2)Includes other costs recognized as incurred that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. The costs are included in Administrative expenses, Cost of products sold and Research and development expenses in the Consolidated Statements of Earnings. (3)Includes non-cash costs that are not reflected in the restructuring reserve in the Consolidated Balance Sheet. Segment operating results do not include restructuring charges, implementation costs and other related costs because we evaluate segment performance excluding such charges. A summary of the pre-tax costs associated with segments is as follows:
| April 30, 2023
(Millions) | Three Months Ended |  | Nine Months Ended |  | Costs Incurred to Date
Meals & Beverages | $ | 19 |  |  | $ | 19 |  |  | $ | 244 |
Snacks | 9 |  |  | 19 |  |  | 340 |
Corporate | 5 |  |  | 12 |  |  | 191 |
Total | $ | 33 |  |  | $ | 50 |  |  | $ | 775 |

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- 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/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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