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RESTRUCTURING ACTIVITIES | 3 Months Ended
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Aug. 29, 2021
Restructuring And Related Activities [Abstract] |
RESTRUCTURING ACTIVITIES | 3. RESTRUCTURING ACTIVITIES Pinnacle Integration Restructuring Plan In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods, Inc. ("Pinnacle"), which we acquired in October 2018 (the "Pinnacle Integration Restructuring Plan"), for the purpose of achieving significant cost synergies between the companies, as a result of which we expect to incur material charges for exit and disposal activities under U.S. GAAP. We expect to incur approximately $357.0 million of charges ($283.2 million of cash charges and $73.8 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. The Board and/or our senior management have authorized incurrence of these charges. In the first quarter of fiscal 2022 and 2021, we recognized charges of $7.3 million and $8.6 million, respectively, in connection with the Pinnacle Integration Restructuring Plan. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a multi-year period. We anticipate that we will recognize the following pre-tax expenses in association with the Pinnacle Integration Restructuring Plan (amounts include charges recognized from plan inception through the first quarter of fiscal 2022):
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | International |  |  | Corporate |  |  | Total |
Accelerated depreciation |  | $ | 7.6 |  |  | $ | 4.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 12.2 |
Other cost of goods sold |  |  | 3.8 |  |  |  | 7.1 |  |  |  | 0.7 |  |  |  | — |  |  |  | 11.6 |
Total cost of goods sold |  |  | 11.4 |  |  |  | 11.7 |  |  |  | 0.7 |  |  |  | — |  |  |  | 23.8 |
Severance and related costs |  |  | — |  |  |  | 3.5 |  |  |  | 1.5 |  |  |  | 112.2 |  |  |  | 117.2 |
Asset impairment (net of gains on disposal) |  |  | 30.3 |  |  |  | 4.0 |  |  |  | — |  |  |  | 2.6 |  |  |  | 36.9 |
Accelerated depreciation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7.4 |  |  |  | 7.4 |
Contract/lease termination |  |  | 7.7 |  |  |  | 8.2 |  |  |  | 0.8 |  |  |  | 16.1 |  |  |  | 32.8 |
Consulting/professional fees |  |  | 1.0 |  |  |  | — |  |  |  | 0.8 |  |  |  | 105.7 |  |  |  | 107.5 |
Other selling, general and administrative expenses |  |  | 5.9 |  |  |  | 4.5 |  |  |  | 0.3 |  |  |  | 20.7 |  |  |  | 31.4 |
Total selling, general and administrative expenses |  |  | 44.9 |  |  |  | 20.2 |  |  |  | 3.4 |  |  |  | 264.7 |  |  |  | 333.2 |
Consolidated total |  | $ | 56.3 |  |  | $ | 31.9 |  |  | $ | 4.1 |  |  | $ | 264.7 |  |  | $ | 357.0 |
During the first quarter of fiscal 2022, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | Corporate |  |  | Total |
Other cost of goods sold |  | $ | — |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 0.1 |
Total cost of goods sold |  |  | — |  |  |  | 0.1 |  |  |  | — |  |  |  | 0.1 |
Severance and related costs |  |  | — |  |  |  | — |  |  |  | (0.2 | ) |  |  | (0.2 | )
Contract/lease termination |  |  | — |  |  |  | — |  |  |  | 0.2 |  |  |  | 0.2 |
Consulting/professional fees |  |  | 0.1 |  |  |  | — |  |  |  | 5.7 |  |  |  | 5.8 |
Other selling, general and administrative expenses |  |  | 0.1 |  |  |  | 0.8 |  |  |  | 0.5 |  |  |  | 1.4 |
Total selling, general and administrative expenses |  |  | 0.2 |  |  |  | 0.8 |  |  |  | 6.2 |  |  |  | 7.2 |
Consolidated total |  | $ | 0.2 |  |  | $ | 0.9 |  |  | $ | 6.2 |  |  | $ | 7.3 |
All of these charges have resulted or will result in cash outflows. We recognized the following cumulative (plan inception to August 29, 2021) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our Condensed Consolidated Statement of Earnings:
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | International |  |  | Corporate |  |  | Total |
Accelerated depreciation |  | $ | 0.6 |  |  | $ | 4.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 5.2 |
Other cost of goods sold |  |  | 2.3 |  |  |  | 3.0 |  |  |  | 0.7 |  |  |  | — |  |  |  | 6.0 |
Total cost of goods sold |  |  | 2.9 |  |  |  | 7.6 |  |  |  | 0.7 |  |  |  | — |  |  |  | 11.2 |
Severance and related costs |  |  | — |  |  |  | 3.4 |  |  |  | 1.5 |  |  |  | 112.2 |  |  |  | 117.1 |
Asset impairment (net of gains on disposal) |  |  | 0.3 |  |  |  | 4.0 |  |  |  | — |  |  |  | 2.6 |  |  |  | 6.9 |
Accelerated depreciation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7.4 |  |  |  | 7.4 |
Contract/lease termination |  |  | 1.8 |  |  |  | — |  |  |  | 0.8 |  |  |  | 16.1 |  |  |  | 18.7 |
Consulting/professional fees |  |  | 0.8 |  |  |  | — |  |  |  | 0.8 |  |  |  | 95.2 |  |  |  | 96.8 |
Other selling, general and administrative expenses |  |  | 2.9 |  |  |  | 1.9 |  |  |  | 0.3 |  |  |  | 17.8 |  |  |  | 22.9 |
Total selling, general and administrative expenses |  |  | 5.8 |  |  |  | 9.3 |  |  |  | 3.4 |  |  |  | 251.3 |  |  |  | 269.8 |
Consolidated total |  | $ | 8.7 |  |  | $ | 16.9 |  |  | $ | 4.1 |  |  | $ | 251.3 |  |  | $ | 281.0 |
Included in the above results are $248.2 million of charges that have resulted or will result in cash outflows and $32.8 million in non-cash charges. Liabilities recorded for the Pinnacle Integration Restructuring Plan and changes therein for the first quarter of fiscal 2022 were as follows:
|  | Balance at May 30, 2021 |  |  | Costs Incurred and Charged to Expense |  |  | Costs Paid or Otherwise Settled |  |  | Changes in Estimates |  |  | Balance at August 29, 2021 |
Severance and related costs |  | $ | 5.1 |  |  | $ | — |  |  | $ | (0.9 | ) |  | $ | (0.2 | ) |  | $ | 4.0 |
Contract/lease termination |  |  | — |  |  |  | 0.2 |  |  |  | (0.2 | ) |  |  | — |  |  |  | — |
Consulting/professional fees |  |  | 3.9 |  |  |  | 5.8 |  |  |  | (5.3 | ) |  |  | — |  |  |  | 4.4 |
Other costs |  |  | — |  |  |  | 1.5 |  |  |  | (1.5 | ) |  |  | — |  |  |  | — |
Total |  | $ | 9.0 |  |  | $ | 7.5 |  |  | $ | (7.9 | ) |  | $ | (0.2 | ) |  | $ | 8.4 |
Conagra Restructuring Plan In fiscal 2019, senior management initiated a restructuring plan (the "Conagra Restructuring Plan") for costs incurred in connection with actions taken to improve selling, general and administrative ("SG&A") expense effectiveness and efficiencies and to optimize our supply chain network. Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of the first quarter of fiscal 2022, 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 August 29, 2021, we have approved the incurrence of $172.6 million ($45.8 million of cash charges and $126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan. We have incurred or expect to incur $144.7 million of charges ($36.0 million of cash charges and $108.7 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan. In the first quarter of fiscal 2022 and 2021, we recognized charges of $8.5 million and $17.3 million, respectively, in connection with the Conagra Restructuring Plan. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period. We anticipate that we will recognize the following pre-tax expenses in association with the Conagra Restructuring Plan (amounts include charges recognized from plan inception through the first quarter of fiscal 2022):
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | International |  |  | Foodservice |  |  | Corporate |  |  | Total |
Accelerated depreciation |  | $ | 34.7 |  |  | $ | 39.1 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 73.8 |
Other cost of goods sold |  |  | 8.9 |  |  |  | 1.3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10.2 |
Total cost of goods sold |  |  | 43.6 |  |  |  | 40.4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 84.0 |
Severance and related costs |  |  | 12.6 |  |  |  | 1.1 |  |  |  | 1.1 |  |  |  | 0.3 |  |  |  | 2.6 |  |  |  | 17.7 |
Asset impairment (net of gains on disposal) |  |  | 26.9 |  |  |  | 0.3 |  |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | 27.3 |
Contract/lease termination |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.2 |  |  |  | 0.3 |
Consulting/professional fees |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.9 |  |  |  | 0.9 |
Other selling, general and administrative expenses |  |  | 11.1 |  |  |  | 2.6 |  |  |  | — |  |  |  | — |  |  |  | 0.2 |  |  |  | 13.9 |
Total selling, general and administrative expenses |  |  | 50.7 |  |  |  | 4.0 |  |  |  | 1.2 |  |  |  | 0.3 |  |  |  | 3.9 |  |  |  | 60.1 |
Total |  | $ | 94.3 |  |  | $ | 44.4 |  |  | $ | 1.2 |  |  | $ | 0.3 |  |  | $ | 3.9 |  |  | $ | 144.1 |
Pension and postretirement non-service income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.6 |
Consolidated total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 144.7 |
During the first quarter of fiscal 2022, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | Foodservice |  |  | Corporate |  |  | Total |
Accelerated depreciation |  | $ | 1.0 |  |  | $ | 5.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 6.3 |
Total cost of goods sold |  |  | 1.0 |  |  |  | 5.3 |  |  |  | — |  |  |  | — |  |  |  | 6.3 |
Severance and related costs |  |  | 1.7 |  |  |  | (1.2 | ) |  |  | 0.3 |  |  |  | 0.2 |  |  |  | 1.0 |
Asset impairment (net of gains on disposal) |  |  | (0.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.2 | )
Other selling, general and administrative expenses |  |  | 1.4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1.4 |
Total selling, general and administrative expenses |  |  | 2.9 |  |  |  | (1.2 | ) |  |  | 0.3 |  |  |  | 0.2 |  |  |  | 2.2 |
Total |  | $ | 3.9 |  |  | $ | 4.1 |  |  | $ | 0.3 |  |  | $ | 0.2 |  |  | $ | 8.5 |
Included in the above results are $2.4 million in charges that have resulted or will result in cash outflows and $6.1 million in non-cash charges. We recognized the following cumulative (plan inception to August 29, 2021) pre-tax expenses for the Conagra Restructuring Plan in our Condensed Consolidated Statement of Earnings:
|  | Grocery & Snacks |  |  | Refrigerated & Frozen |  |  | International |  |  | Foodservice |  |  | Corporate |  |  | Total |
Accelerated depreciation |  | $ | 33.0 |  |  | $ | 32.0 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 65.0 |
Other cost of goods sold |  |  | 4.8 |  |  |  | 0.2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5.0 |
Total cost of goods sold |  |  | 37.8 |  |  |  | 32.2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70.0 |
Severance and related costs |  |  | 12.1 |  |  |  | 0.6 |  |  |  | 1.1 |  |  |  | 0.3 |  |  |  | 2.3 |  |  |  | 16.4 |
Asset impairment (net of gains on disposal) |  |  | 26.9 |  |  |  | 0.3 |  |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | 27.3 |
Contract/lease termination |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 0.1 |  |  |  | 0.1 |
Other selling, general and administrative expenses |  |  | 6.4 |  |  |  | 0.3 |  |  |  | — |  |  |  | — |  |  |  | 0.2 |  |  |  | 6.9 |
Total selling, general and administrative expenses |  |  | 45.4 |  |  |  | 1.2 |  |  |  | 1.2 |  |  |  | 0.3 |  |  |  | 2.6 |  |  |  | 50.7 |
Total |  | $ | 83.2 |  |  | $ | 33.4 |  |  | $ | 1.2 |  |  | $ | 0.3 |  |  | $ | 2.6 |  |  | $ | 120.7 |
Pension and postretirement non-service income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.6 |
Consolidated total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 121.3 |
Included in the above results are $26.5 million of charges that have resulted or will result in cash outflows and $94.8 million in non-cash charges. Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first quarter of fiscal 2022 were as follows:
|  | Balance at May 30, 2021 |  |  | Costs Incurred and Charged to Expense |  |  | Costs Paid or Otherwise Settled |  |  | Changes in Estimates |  |  | Balance at August 29, 2021 |
Severance and related costs |  | $ | 9.7 |  |  | $ | 2.3 |  |  | $ | (0.7 | ) |  | $ | (1.3 | ) |  | $ | 10.0 |
Other costs |  |  | — |  |  |  | 1.4 |  |  |  | (1.4 | ) |  |  | — |  |  |  | — |
Total |  | $ | 9.7 |  |  | $ | 3.7 |  |  | $ | (2.1 | ) |  | $ | (1.3 | ) |  | $ | 10.0 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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