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RESTRUCTURING ACTIVITIES | 9 Months Ended
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Feb. 26, 2017
Restructuring and Related Activities [Abstract] |
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES Supply Chain and Administrative Efficiency Plan We previously announced a plan for the integration and restructuring of the operations of Ralcorp Holdings, Inc. (“Ralcorp”), optimization of the entire Company’s supply chain network, manufacturing assets, and dry distribution and mixing centers, and improvement of selling, general and administrative effectiveness and efficiencies, which we refer to as the Supply Chain and Administrative Efficiency Plan (the “SCAE Plan”). The SCAE Plan also includes plans announced in the second quarter of fiscal 2016 to realize efficiency benefits through a combination of reductions in selling, general and administrative expenses and enhancements to trade spend processes and tools. Although the divestiture of the Private Brands business was completed in the third quarter of fiscal 2016, resulting in the sale of substantially all the Ralcorp operations, we will continue to implement the SCAE Plan, including work related to optimizing our supply chain network, the pursuit of cost reductions through our selling, general and administrative functions, enhancements to trade spend processes and tools, and productivity improvements. Although we remain unable to make good faith estimates relating to the entire SCAE Plan, we are reporting on actions initiated through the end of the third quarter of fiscal 2017, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. As of February 26, 2017, our Board of Directors has approved the incurrence of up to $880.5 million of expenses in connection with the SCAE Plan, including expenses allocated for the Private Brands and Lamb Weston operations. We have incurred or expect to incur approximately $442.6 million of charges ($299.9 million of cash charges and $142.7 million of non-cash charges) for actions identified to date under the SCAE Plan related to our continuing operations. In the third quarter and first three quarters of fiscal 2017, we recognized charges of $13.7 million and $47.6 million, respectively, in relation to the SCAE Plan related to our continuing operations. In the third quarter and first three quarters of fiscal 2016 we recognized charges of $109.1 million and $259.5 million, respectively, in relation to the SCAE Plan related to our continuing operations. We expect to incur costs related to the SCAE Plan over a multi-year period. We anticipate that we will recognize the following pre-tax expenses in association with the SCAE Plan related to our continuing operations (amounts include charges recognized from plan inception through the first three quarters of fiscal 2017):
| Grocery & Snacks |  | Refrigerated & Frozen |  | International |  | Foodservice |  | Corporate |  | Total
Multi-employer pension costs | $ | 31.7 |  |  | $ | 1.5 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33.2 |
Accelerated depreciation | 36.6 |  |  | 18.6 |  |  | — |  |  | — |  |  | 1.2 |  |  | 56.4 |
Other cost of goods sold | 5.5 |  |  | 2.1 |  |  | — |  |  | — |  |  | — |  |  | 7.6 |
Total cost of goods sold | 73.8 |  |  | 22.2 |  |  | — |  |  | — |  |  | 1.2 |  |  | 97.2 |
Severance and related costs, net | 22.3 |  |  | 10.3 |  |  | 2.4 |  |  | 7.9 |  |  | 103.8 |  |  | 146.7 |
Fixed asset impairment (net of gains on disposal) | 8.7 |  |  | 6.8 |  |  | — |  |  | — |  |  | 4.1 |  |  | 19.6 |
Accelerated depreciation | — |  |  | — |  |  | — |  |  | — |  |  | 4.1 |  |  | 4.1 |
Contract/lease cancellation expenses | 0.9 |  |  | 0.6 |  |  | — |  |  | — |  |  | 72.3 |  |  | 73.8 |
Consulting/professional fees | 0.6 |  |  | 0.4 |  |  | 0.1 |  |  | — |  |  | 53.0 |  |  | 54.1 |
Other selling, general and administrative expenses | 13.6 |  |  | 3.5 |  |  | — |  |  | — |  |  | 30.0 |  |  | 47.1 |
Total selling, general and administrative expenses | 46.1 |  |  | 21.6 |  |  | 2.5 |  |  | 7.9 |  |  | 267.3 |  |  | 345.4 |
Consolidated total | $ | 119.9 |  |  | $ | 43.8 |  |  | $ | 2.5 |  |  | $ | 7.9 |  |  | $ | 268.5 |  |  | $ | 442.6 |
During the third quarter of fiscal 2017, we recognized the following pre-tax expenses for the SCAE Plan related to our continuing operations:
| Grocery & Snacks |  | Refrigerated & Frozen |  | International |  |  | Corporate |  | Total
Multi-employer pension costs | $ | 2.0 |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  | $ | 2.0 |
Accelerated depreciation | 2.3 |  |  | — |  |  | — |  |  |  | — |  |  | 2.3 |
Other cost of goods sold | 0.4 |  |  | — |  |  | — |  |  |  | — |  |  | 0.4 |
Total cost of goods sold | 4.7 |  |  | — |  |  | — |  |  |  | — |  |  | 4.7 |
Severance and related costs, net | 0.6 |  |  | — |  |  | (0.3 | ) |  |  | 3.7 |  |  | 4.0 |
Fixed asset impairment (net of gains on disposal) | 1.8 |  |  | (1.4 | ) |  | — |  |  |  | 0.2 |  |  | 0.6 |
Accelerated depreciation | — |  |  | — |  |  | — |  |  |  | 0.3 |  |  | 0.3 |
Contract/lease cancellation expenses | — |  |  | 0.1 |  |  | — |  |  |  | 1.1 |  |  | 1.2 |
Other selling, general and administrative expenses | 2.0 |  |  | 0.2 |  |  | — |  |  |  | 0.7 |  |  | 2.9 |
Total selling, general and administrative expenses | 4.4 |  |  | (1.1 | ) |  | (0.3 | ) |  |  | 6.0 |  |  | 9.0 |
Consolidated total | $ | 9.1 |  |  | $ | (1.1 | ) |  | $ | (0.3 | ) |  |  | $ | 6.0 |  |  | $ | 13.7 |
Included in the above table are $10.3 million of charges that have resulted or will result in cash outflows and $3.4 million in non-cash charges. During the first three quarters of fiscal 2017, we recognized the following pre-tax expenses for the SCAE Plan related to our continuing operations:
| Grocery & Snacks |  | Refrigerated & Frozen |  | International |  | Foodservice |  | Corporate |  | Total
Multi-employer pension costs | $ | 2.0 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2.0 |
Accelerated depreciation | 6.0 |  |  | 1.2 |  |  | — |  |  | — |  |  | — |  |  | 7.2 |
Other cost of goods sold | 2.3 |  |  | 0.2 |  |  | — |  |  | — |  |  | — |  |  | 2.5 |
Total cost of goods sold | 10.3 |  |  | 1.4 |  |  | — |  |  | — |  |  | — |  |  | 11.7 |
Severance and related costs, net | 1.2 |  |  | (0.2 | ) |  | 0.2 |  |  | 1.8 |  |  | 5.8 |  |  | 8.8 |
Fixed asset impairment (net of gains on disposal) | (0.3 | ) |  | 3.2 |  |  | — |  |  | — |  |  | 3.1 |  |  | 6.0 |
Accelerated depreciation | — |  |  | — |  |  | — |  |  | — |  |  | 0.8 |  |  | 0.8 |
Contract/lease cancellation expenses | — |  |  | 0.1 |  |  | 0.1 |  |  | — |  |  | 8.5 |  |  | 8.7 |
Consulting/professional fees | — |  |  | — |  |  | — |  |  | — |  |  | 0.3 |  |  | 0.3 |
Other selling, general and administrative expenses | 4.2 |  |  | 1.6 |  |  | — |  |  | — |  |  | 5.5 |  |  | 11.3 |
Total selling, general and administrative expenses | 5.1 |  |  | 4.7 |  |  | 0.3 |  |  | 1.8 |  |  | 24.0 |  |  | 35.9 |
Consolidated total | $ | 15.4 |  |  | $ | 6.1 |  |  | $ | 0.3 |  |  | $ | 1.8 |  |  | $ | 24.0 |  |  | $ | 47.6 |
Included in the above table are $31.2 million of charges that have resulted or will result in cash outflows and $16.4 million in non-cash charges. We recognized the following cumulative (plan inception to February 26, 2017) pre-tax expenses related to the SCAE Plan related to our continuing operations in our Condensed Consolidated Statements of Operations:
| Grocery & Snacks |  | Refrigerated & Frozen |  | International |  | Foodservice |  | Corporate |  | Total
Multi-employer pension costs | $ | 31.8 |  |  | $ | 1.5 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 33.3 |
Accelerated depreciation | 27.4 |  |  | 18.6 |  |  | — |  |  | — |  |  | 1.2 |  |  | 47.2 |
Other cost of goods sold | 4.2 |  |  | 2.1 |  |  | — |  |  | — |  |  | — |  |  | 6.3 |
Total cost of goods sold | 63.4 |  |  | 22.2 |  |  | — |  |  | — |  |  | 1.2 |  |  | 86.8 |
Severance and related costs, net | 21.8 |  |  | 10.3 |  |  | 2.4 |  |  | 7.9 |  |  | 102.2 |  |  | 144.6 |
Fixed asset impairment (net of gains on disposal) | 6.9 |  |  | 6.8 |  |  | — |  |  | — |  |  | 3.9 |  |  | 17.6 |
Accelerated depreciation | — |  |  | — |  |  | — |  |  | — |  |  | 2.1 |  |  | 2.1 |
Contract/lease cancellation expenses | 0.8 |  |  | 0.6 |  |  | 0.1 |  |  | — |  |  | 70.2 |  |  | 71.7 |
Consulting/professional fees | 0.6 |  |  | 0.4 |  |  | 0.1 |  |  | — |  |  | 51.1 |  |  | 52.2 |
Other selling, general and administrative expenses | 9.6 |  |  | 3.2 |  |  | — |  |  | — |  |  | 18.5 |  |  | 31.3 |
Total selling, general and administrative expenses | 39.7 |  |  | 21.3 |  |  | 2.6 |  |  | 7.9 |  |  | 248.0 |  |  | 319.5 |
Consolidated total | $ | 103.1 |  |  | $ | 43.5 |  |  | $ | 2.6 |  |  | $ | 7.9 |  |  | $ | 249.2 |  |  | $ | 406.3 |
Included in the above table are $277.9 million of charges that have resulted or will result in cash outflows and $128.4 million in non-cash charges. Not included in the above table are $130.2 million of pre-tax expenses ($84.5 million of cash charges and $45.7 million of non-cash charges) related to the Private Brands operations, which we sold in the third quarter of fiscal 2016, and $2.1 million of pre-tax expenses (all resulting in cash charges) related to Lamb Weston. Liabilities recorded for the SCAE Plan related to our continuing operations and changes therein for the first three quarters of fiscal 2017 were as follows:
| Balance at May 29, 2016 |  | Costs Incurred and Charged to Expense |  | Costs Paid or Otherwise Settled |  | Changes in Estimates |  | Balance at February 26, 2017
Multi-employer pension costs | $ | 40.7 |  |  | $ | — |  |  | $ | (10.9 | ) |  | $ | 2.0 |  |  | $ | 31.8 |
Severance | 47.2 |  |  | 10.6 |  |  | (38.2 | ) |  | (1.8 | ) |  | 17.8 |
Consulting | 4.7 |  |  | 0.3 |  |  | (4.6 | ) |  | (0.2 | ) |  | 0.2 |
Contract termination | 6.3 |  |  | 11.4 |  |  | (4.9 | ) |  | (0.2 | ) |  | 12.6 |
Other costs | 0.5 |  |  | 12.0 |  |  | (10.6 | ) |  | — |  |  | 1.9 |
Total | $ | 99.4 |  |  | $ | 34.3 |  |  | $ | (69.2 | ) |  | $ | (0.2 | ) |  | $ | 64.3 |

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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/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 2: 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 3: 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
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