Restructuring

9 Months Ended

Feb. 26, 2012

Restructuring [Abstract]

RESTRUCTURING

11. RESTRUCTURING

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,” are intended to improve the efficiency and effectiveness of the affected sales and administrative functions. In connection with the Administrative Efficiency Plan, we expect to incur approximately $18.5 million of charges, primarily for severance and costs of employee relocation. In the third quarter and first three quarters of fiscal 2012, we recognized charges of approximately $1.6 million and $15.0 million, respectively, in relation to the Administrative Efficiency Plan.

We anticipate that we will recognize the following pre-tax expenses associated with the Administrative Efficiency Plan in the fiscal 2012 to 2013 timeframe (amounts include charges recognized in the first three quarters of fiscal 2012):

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.4	$	1.4
Severance and related costs		6.5		—		2.3		8.8
Other, net		6.9		1.3		0.1		8.3
Total selling, general and administrative expenses		13.4		1.3		3.8		18.5
Consolidated total	$	13.4	$	1.3	$	3.8	$	18.5

Included in the above estimates are $17.1 million of charges that have resulted or will result in cash outflows and $1.4 million of non-cash charges.

During the third quarter of fiscal 2012, we recognized the following pre-tax expenses associated with the Administrative Efficiency Plan:

	Consumer Foods		Commercial Foods		Corporate			Total
Accelerated depreciation	$	—	$	—	$	0.3		$	0.3
Severance and related costs (recoveries)		0.4		—		(0.3	)		0.1
Other, net		0.9		0.2		0.1			1.2
Total selling, general and administrative expenses		1.3		0.2		0.1			1.6
Consolidated total	$	1.3	$	0.2	$	0.1		$	1.6

During the first three quarters of fiscal 2012, we recognized the following pre-tax expenses associated with the Administrative Efficiency Plan:

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	0.9	$	0.9
Severance and related costs		5.7		—		2.3		8.0
Other, net		5.2		0.8		0.1		6.1
Total selling, general and administrative expenses		10.9		0.8		3.3		15.0
Consolidated total	$	10.9	$	0.8	$	3.3	$	15.0

Liabilities recorded for the various initiatives and changes therein for the third quarter of fiscal 2012 under the Administrative Efficiency Plan were as follows:

	Balance at November 27, 2011		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at February 26, 2012
Severance and related costs	$	5.1	$	0.4	$	(2.0	)	$	(0.3	)	$	3.2
Plan implementation costs		0.1		1.1		(0.4	)		—			0.8
Total	$	5.2	$	1.5	$	(2.4	)	$	(0.3	)	$	4.0

Network Optimization Plan

During the third quarter of fiscal 2011, our Board of Directors approved a plan recommended by management 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. The Network Optimization 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.

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 $74.7 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 and employee relocation). 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 and in the first three quarters of fiscal 2012):

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	19.6	$	—	$	19.6
Inventory write-offs and related costs		9.5		0.4		9.9
Total cost of goods sold		29.1		0.4		29.5
Asset impairment		12.7		14.0		26.7
Severance and related costs		7.6		0.1		7.7
Other, net		9.3		1.5		10.8
Total selling, general and administrative expenses		29.6		15.6		45.2
Consolidated total	$	58.7	$	16.0	$	74.7

Included in the above estimates are $22.9 million of charges that have resulted or will result in cash outflows and $51.8 million of non-cash charges.

During the third quarter of fiscal 2012, we recognized the following pre-tax expenses associated with the Network Optimization Plan:

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	2.9	$	—	$	2.9
Inventory write-offs and related costs		1.9		0.1		2.0
Total cost of goods sold		4.8		0.1		4.9
Asset impairment		—		0.1		0.1
Severance and related costs		0.3		—		0.3
Other, net		1.3		—		1.3
Total selling, general and administrative expenses		1.6		0.1		1.7
Consolidated total	$	6.4	$	0.2	$	6.6

During the first three quarters of fiscal 2012, we recognized the following pre-tax expenses associated with the Network Optimization Plan:

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	10.5	$	—	$	10.5
Inventory write-offs and related costs		5.2		0.1		5.3
Total cost of goods sold		15.7		0.1		15.8
Asset impairment		4.1		3.6		7.7
Severance and related costs		2.0		—		2.0
Other, net		3.9		1.4		5.3
Total selling, general and administrative expenses		10.0		5.0		15.0
Consolidated total	$	25.7	$	5.1	$	30.8

We recognized the following cumulative (plan inception to February 26, 2012) pre-tax expenses related to the Network Optimization Plan:

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	15.5	$	—	$	15.5
Inventory write-offs and related costs		5.4		0.4		5.8
Total cost of goods sold		20.9		0.4		21.3
Asset impairment		12.7		14.0		26.7
Severance and related costs		7.2		0.1		7.3
Other, net		4.6		1.5		6.1
Total selling, general and administrative expenses		24.5		15.6		40.1
Consolidated total	$	45.4	$	16.0	$	61.4

Liabilities recorded for the various initiatives and changes therein for the third quarter of fiscal 2012 under the Network Optimization Plan were as follows:

	Balance at November 27, 2011		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates		Balance at February 26, 2012
Severance and related costs	$	5.9	$	—	$	(0.5	)	$	0.1	$	5.5
Plan implementation costs		0.6		1.5		(1.7	)		—		0.4
Total	$	6.5	$	1.5	$	(2.2	)	$	0.1	$	5.9

2010 Restructuring Plan

During the fourth quarter of fiscal 2010, our Board of Directors approved a plan recommended by management 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 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 plan”.

At the end of the first half of fiscal 2012, the implementation of the 2010 plan was substantially complete.

In connection with the 2010 plan, we incurred pre-tax cash and non-cash expenses for asset impairments, accelerated depreciation, severance, relocation, and site closure costs of $67.5 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 and employee relocation). We recognized the following cumulative (plan inception to February 26, 2012) pre-tax expenses related to the 2010 plan:

	Consumer Foods		Corporate		Total
Accelerated depreciation	$	19.1	$	—	$	19.1
Inventory write-offs		0.7		—		0.7
Total cost of goods sold		19.8		—		19.8
Asset impairment		17.5		—		17.5
Severance and related costs		16.8		—		16.8
Other, net		9.8		3.6		13.4
Total selling, general and administrative expenses		44.1		3.6		47.7
Consolidated total	$	63.9	$	3.6	$	67.5

Included in the above expenses are $28.3 million of expenses that have resulted in cash outflows and $39.2 million of non-cash expenses.

During the third quarter and first three quarters of fiscal 2012, we recognized $0.2 million and $2.5 million of pre-tax expenses, respectively, for the 2010 plan.