RESTRUCTURING ACTIVITIES

Supply Chain and Administrative Efficiency Plan

We continue to execute a plan for the integration of Ralcorp and related restructuring activities and during fiscal 2014, our Board of Directors approved an expansion of the scope of the plan to include steps to optimize the entire organization’s supply chain network and improve selling, general and administrative effectiveness and efficiencies, referred to as the Supply Chain and Administrative Efficiency Plan (the “SCAE Plan”). This plan was previously referred to as the Ralcorp Related Restructuring Plan. As a part of this SCAE Plan, we expect to take actions to, among other things, continue the ongoing integration and restructuring of the operations of Ralcorp, optimize manufacturing assets, optimize the Company’s dry distribution and mixing centers, and improve operational effectiveness and reduce overall costs in the Company’s administrative areas. This reporting addresses the estimated amounts or range of amounts for each major type of cost expected to be incurred, and the charges that have or will result in cash outflows. In connection with the SCAE Plan, we expect to incur approximately $325.0 million of charges, which includes $245.4 million of cash charges and $79.6 million of non-cash charges.

We anticipate that we will recognize the following pre-tax expenses association with the SCAE Plan (amounts include charges recognized in fiscal 2014 and 2013):



	Consumer Foods		Corporate		Commercial		Private Brands		Total
Multi-employer pension costs	$	—	$	11.2	$	—	$	—	$	11.2
Other cost of goods sold	4.6		—		—		4.3		8.9
Total cost of goods sold	4.6		11.2		—		4.3		20.1
Severance and related costs	17.6		98.6		4.8		9.7		130.7
Accelerated depreciation	53.9		2.8		—		16.7		73.4
Fixed asset impairment / Loss on disposal	0.3		—		—		3.9		4.2
Other selling, general and administrative expenses	18.4		29.4		—		48.8		96.6
Total selling, general and administrative expenses	90.2		130.8		4.8		79.1		304.9
Consolidated total	$	94.8	$	142.0	$	4.8	$	83.4	$	325.0

During fiscal 2014, we recognized the following pre-tax expenses for the SCAE Plan:



	Consumer Foods		Corporate		Commercial		Private Brands		Total
Other cost of goods sold	$	0.8	$	—	$	—	$	0.6	$	1.4
Total cost of goods sold	0.8		—		—		0.6		1.4
Severance and related costs	12.7		25.4		4.8		8.9		51.8
Accelerated depreciation	2.4		0.6		—		15.1		18.1
Fixed asset impairment / Loss on disposal	0.3		—		—		3.9		4.2
Other selling, general and administrative expenses	—		3.2		—		5.0		8.2
Total selling, general and administrative expenses	15.4		29.2		4.8		32.9		82.3
Consolidated total	$	16.2	$	29.2	$	4.8	$	33.5	$	83.7

Included in the above results are $60.5 million of charges that have resulted or will result in cash outflows and $23.2 million in non-cash charges.

We recognized the following cumulative (plan inception to May 25, 2014) pre-tax expenses related to the SCAE Plan in our Consolidated Statement of Earnings:



	Consumer Foods		Corporate		Commercial		Private Brands		Total
Multi-employer pension costs	$	—	$	11.2	$	—	$	—	$	11.2
Other cost of goods sold	0.8		—		—		0.6		1.4
Total cost of goods sold	0.8		11.2		—		0.6		12.6
Severance and related costs	12.7		42.6		4.8		8.9		69.0
Accelerated depreciation	2.4		0.6		—		15.1		18.1
Fixed asset impairment / Loss on disposal	0.3		—		—		3.9		4.2
Other selling, general and administrative expenses	—		3.2		—		5.0		8.2
Total selling, general and administrative expenses	15.4		46.4		4.8		32.9		99.5
Consolidated total	$	16.2	$	57.6	$	4.8	$	33.5	$	112.1

Liabilities recorded for the SCAE Plan and changes therein for fiscal 2014 were as follows:



	Balance at May 26, 2013		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates		Balance at May 25, 2014
Multi-employer pension costs	$	11.2	$	—	$	—		$	—	$	11.2
Severance and related costs	17.2		51.8		(22.1		)	—		46.9
Other costs	—		8.7		(2.7		)	—		6.0
Total	$	28.4	$	60.5	$	(24.8	)	$	—	$	64.1

Acquisition-related Restructuring Costs

During fiscal 2012, we started incurring costs in connection with actions taken to attain synergies when integrating businesses acquired prior to the third quarter of fiscal 2013. These costs, collectively referred to as "acquisition-related restructuring costs", include severance and other costs associated with consolidating facilities and administrative functions. In connection with the acquisition-related restructuring costs, we expect to incur charges of $23.8 million, $15.9 million of which are charges that have resulted or will result in cash outflows and $7.9 million of which are non-cash charges. At the end of fiscal 2014, the acquisition-related restructuring costs were substantially complete.

During fiscal 2014, we recognized the following pre-tax expenses for acquisition-related restructuring costs, primarily representing impairment of equipment, all within our Consumer Foods segment:



	Total
Asset impairment	$	3.8
Other, net	5.6
Total selling, general and administrative expenses	9.4
Consolidated total	$	9.4

We recognized the following cumulative (plan inception to May 25, 2014) pre-tax acquisition-related exit costs in our Consolidated Statement of Earnings:



	Consumer Foods		Corporate		Total
Severance and related costs	$	9.0	$	—	$	9.0
Asset impairment	5.4		2.5		7.9
Other, net	6.5		—		6.5
Total selling, general and administrative expenses	20.9		2.5		23.4
Consolidated total	$	20.9	$	2.5	$	23.4

Included in the above results are $15.5 million of charges that have resulted in cash outflows and $7.9 million of non-cash charges.

Administrative Efficiency Restructuring Plan

In August 2011, we made a decision to reorganize our Consumer Foods sales function and certain other administrative functions within our Commercial Foods and Corporate reporting segments. These actions, collectively referred to as the "Administrative Efficiency Plan", were intended to improve the efficiency and effectiveness of the affected sales and administrative functions. In connection with the Administrative Efficiency Plan, we have incurred pre-tax cash and non-cash charges of $18.7 million, primarily for severance and costs of employee relocation. At the end of fiscal 2013, the Administrative Efficiency Plan was substantially complete.

We recognized the following pre-tax expenses associated with the Administrative Efficiency Plan in the fiscal 2012 to 2013 timeframe:



	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.5	$	1.5
Severance and related costs	7.1		—		2.2		9.3
Other, net	6.7		1.0		0.2		7.9
Total selling, general and administrative expenses	13.8		1.0		3.9		18.7
Consolidated total	$	13.8	$	1.0	$	3.9	$	18.7

Included in the above results are $16.8 million of charges that have resulted in cash outflows and $1.9 million of non-cash charges.

Network Optimization Plan

During the third quarter of fiscal 2011, our Board of Directors approved a plan designed to optimize our manufacturing and distribution networks. We refer to this plan as the "Network Optimization Plan". The Network Optimization Plan consists of projects that involve, among other things, the exit of certain manufacturing facilities, the disposal of underutilized manufacturing assets, and actions designed to optimize our distribution network. At the end of fiscal 2013, the Network Optimization Plan was substantially complete.

In connection with the Network Optimization Plan, we have incurred pre-tax cash and non-cash charges of $76.7 million. We have recognized expenses associated with the Network Optimization Plan, including but not limited to, impairments of property, plant and equipment, accelerated depreciation, severance and related costs, and plan implementation costs (e.g., consulting and employee relocation). We recognized the following pre-tax expenses associated with the Network Optimization Plan in the fiscal 2011 to fiscal 2013 timeframe:



	Consumer Foods			Commercial Foods		Corporate		Total
Accelerated depreciation	$	22.5		$	—	$	—	$	22.5
Inventory write-offs and related costs	7.5			0.4		—		7.9
Total cost of goods sold	30.0			0.4		—		30.4
Asset impairment	15.3			14.0		—		29.3
Net gains on sale of property, plant and equipment	(1.6		)	—		—		(1.6		)
Severance and related costs	7.7			0.1		—		7.8
Other, net	8.5			1.5		0.8		10.8
Total selling, general and administrative expenses	29.9			15.6		0.8		46.3
Consolidated total	$	59.9		$	16.0	$	0.8	$	76.7

Included in the above results are $17.9 million of charges that have resulted in cash outflows and $58.8 million of non-cash charges.

2010 Restructuring Plan

During fiscal 2010, our Board of Directors approved a plan related to the long-term production of our meat snack products. The plan provided for the closure of our meat snacks production facility in Garner, North Carolina, and the movement of production to our existing facility in Troy, Ohio.

Also in fiscal 2010, we made a decision to consolidate certain administrative functions from Edina, Minnesota to Naperville, Illinois. We completed the transition of these functions in fiscal 2011. This plan, together with the plan to move production of our meat snacks from Garner, North Carolina to Troy, Ohio, is collectively referred to as the 2010 restructuring plan ("2010 plan").

In connection with the 2010 plan, we incurred pre-tax cash and non-cash charges of $67.3 million cumulatively since inception, of which $2.6 million was recognized in fiscal 2012. By the end of fiscal 2012, the 2010 plan was complete.

Ralcorp Pre-acquisition Restructuring Plans

At the time of its acquisition, Ralcorp had certain initiatives underway designed to optimize its manufacturing and distribution networks. We refer to these actions and the related costs as "Ralcorp Pre-acquisition Restructuring Plans". These plans consisted of projects that involved, among other things, the exit of certain manufacturing facilities. In connection with the Ralcorp Pre-acquisition Restructuring Plans, we have incurred $3.7 million of charges that resulted in cash outflows of $1.9 million and non-cash charges of $1.8 million. In fiscal 2014, we recognized charges of $2.4 million. In fiscal 2013, we recognized charges of $1.3 million. At the end of fiscal 2014, the Pre-acquisition Restructuring Plans costs was substantially complete.