Restructuring Activities

12 Months Ended

May 29, 2011

Restructuring Activities [Abstract]

RESTRUCTURING ACTIVITIES

6.  RESTRUCTURING ACTIVITIES

Network Optimization Plan

During the third quarter of fiscal 2011, our Board of Directors approved a plan recommended by executive management designed to optimize our manufacturing and distribution networks. The 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. The plan is expected to be implemented by the end of fiscal 2013 and is intended to improve the efficiency of our manufacturing operations and reduce costs. This plan is referred to as the Network Optimization Plan, which we previously referred to as the 2011 plan.

In connection with the Network Optimization Plan, we expect to incur pre-tax cash and non-cash charges for asset impairments, accelerated depreciation, severance, relocation, and site closure costs of $54.9 million. We have recognized, and/or expect to recognize, 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, employee relocation, etc.). We anticipate that we will recognize the following pre-tax expenses associated with the Network Optimization Plan in the fiscal 2011 to 2013 timeframe (amounts include charges recognized in fiscal 2011):

	Consumer		Commercial
	Foods		Foods		Total
Accelerated depreciation	$	12.5	$	—	$	12.5
Inventory write-offs and related costs		3.2		0.3		3.5
Total cost of goods sold		15.7		0.3		16.0
Asset impairment		8.6		10.4		19.0
Severance and related costs		7.6		0.1		7.7
Other, net		9.2		3.0		12.2
Total selling, general and administrative expenses		25.4		13.5		38.9
Consolidated total	$	41.1	$	13.8	$	54.9

Included in the above estimates are $22.3 million of charges which have resulted or will result in cash outflows and $32.6 million of non-cash charges.

During fiscal 2011, we recognized the following pre-tax charges in our consolidated statement of earnings for the Network Optimization Plan:

	Consumer		Commercial
	Foods		Foods		Total
Accelerated depreciation	$	5.0	$	—	$	5.0
Inventory write-offs and related costs		0.2		0.3		0.5
Total cost of goods sold		5.2		0.3		5.5
Asset impairment		8.6		10.4		19.0
Severance and related costs		5.2		0.1		5.3
Other, net		0.7		0.1		0.8
Total selling, general and administrative expenses		14.5		10.6		25.1
Consolidated total	$	19.7	$	10.9	$	30.6

Liabilities recorded for the various initiatives and changes therein for fiscal 2011 under the Network Optimization Plan were as follows:

	Balance at		Costs Incurred							Balance at
	May 30,		and Charged		Costs Paid			Changes in		May 29,
	2010		to Expense		or Otherwise Settled			Estimates		2011
Severance and related costs	$	—	$	5.3	$	(0.5	)	$	—	$	4.8
Plan implementation costs		—		0.8		(0.8	)		—		—
Total	$	—	$	6.1	$	(1.3	)	$	—	$	4.8

2010 Restructuring Plan

During the fourth quarter of fiscal 2010, our Board of Directors approved a plan recommended by executive management related to the long-term production of our meat snack products. The plan provides 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. Since the Garner accident, the Troy facility has been producing a portion of our meat snack products. By the end of fiscal 2011, with the plan substantially implemented, the facility has become our primary meat snacks production facility.

Also in the fourth quarter of 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 expect to incur pre-tax cash and non-cash charges for asset impairments, accelerated depreciation, severance, relocation, and site closure costs of $68.0 million, of which $25.7 million was recognized in fiscal 2011 and $39.2 million was recognized in fiscal 2010. We have recognized expenses associated with the 2010 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, employee relocation, etc.). We anticipate that we will recognize the following pre-tax expenses associated with the 2010 plan in the fiscal 2010 to 2012 timeframe (amounts include charges recognized in fiscal 2010 and 2011):

	Consumer
	Foods		Corporate		Total
Accelerated depreciation	$	19.0	$	—	$	19.0
Inventory write-offs		0.7		—		0.7
Total cost of goods sold		19.7		—		19.7
Asset impairment		16.5		—		16.5
Severance and related costs		17.0		—		17.0
Other, net		11.2		3.6		14.8
Total selling, general and administrative expenses		44.7		3.6		48.3
Consolidated total	$	64.4	$	3.6	$	68.0

Included in the above estimates are $29.7 million of charges which have resulted or will result in cash outflows and $38.3 million of non-cash charges.

During fiscal 2011, we recognized the following pre-tax charges in our consolidated statement of earnings for the 2010 plan:

	Consumer
	Foods		Corporate		Total
Accelerated depreciation	$	15.6	$	—	$	15.6
Inventory write-offs		0.7		—		0.7
Total cost of goods sold		16.3		—		16.3
Severance and related costs		2.8		—		2.8
Other, net		6.5		0.1		6.6
Total selling, general and administrative expenses		9.3		0.1		9.4
Consolidated total	$	25.6	$	0.1	$	25.7

We recognized the following cumulative (plan inception to May 29, 2011) pre-tax charges related to the 2010 plan in our consolidated statement of earnings:

	Consumer
	Foods		Corporate		Total
Accelerated depreciation	$	19.0	$	—	$	19.0
Inventory write-offs		0.7		—		0.7
Total cost of goods sold		19.7		—		19.7
Asset Impairment		16.5		—		16.5
Severance and related costs		17.0		—		17.0
Other, net		8.1		3.6		11.7
Total selling, general and administrative expenses		41.6		3.6		45.2
Consolidated total	$	61.3	$	3.6	$	64.9

Liabilities recorded for the various initiatives and changes therein for fiscal 2011 under the 2010 plan were as follows:

	Balance at		Costs Incurred		Costs Paid						Balance at
	May 30,		and Charged		or Otherwise			Changes in			May 29,
	2010		to Expense		Settled			Estimates			2011
Severance and related costs	$	14.2	$	2.8	$	(11.1	)	$	(0.7	)	$	5.2
Plan implementation costs		1.0		5.3		(5.4	)		0.1			1.0
Other costs		3.5		0.1		(0.9	)		—			2.7
Total	$	18.7	$	8.2	$	(17.4	)	$	(0.6	)	$	8.9