Restructuring Activities

12 Months Ended

May 27, 2012

Restructuring Activities [Abstract]

RESTRUCTURING ACTIVITIES

6.  RESTRUCTURING ACTIVITIES

Acquisition-related restructuring

We anticipate incurring costs in connection with actions we take to attain synergies when integrating recently acquired businesses. These costs, collectively referred to as “acquisition-related exit costs”, include severance and other costs associated with consolidating facilities and administrative functions. In connection with the acquisition-related exit costs, we expect to incur pre-tax cash and non-cash charges for asset impairments, accelerated depreciation, severance, relocation, and site closure costs of $18.4 million. We anticipate that we will recognize the following pre-tax cash and non-cash acquisition-related exit costs, all within our Consumer Foods reporting segment, during fiscal 2012 to 2014 (amounts include charges recognized in fiscal 2012):

	Total
Accelerated depreciation	$	8.5
Total cost of goods sold		8.5
Severance and related costs		9.9
Total selling, general and administrative expenses		9.9
Consolidated total	$	18.4

Included in the above estimates are $9.9 million of charges which have resulted or will result in cash outflows and $8.5 million of non-cash charges.

During fiscal 2012, we recognized the following pre-tax charges in our consolidated statement of earnings, all within our Consumer Foods reporting segment, for acquisition-related exit costs:

	Total
Accelerated depreciation	$	0.2
Total cost of goods sold		0.2
Severance and related costs		4.3
Total selling, general and administrative expenses		4.3
Consolidated total	$	4.5

Liabilities recorded for acquisition-related exit costs and changes therein for fiscal 2012 were as follows:

	Balance at May  29, 2011		Costs Incurred and Charged to Expense		Balance at May  27, 2012
Severance and related costs	$	—	$	4.3	$	4.3
Total	$	—	$	4.3	$	4.3

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 $18.8 million of charges, primarily for severance and costs of employee relocation. 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 fiscal 2012):

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.5	$	1.5
Severance and related costs		6.5		—		2.3		8.8
Other, net		7.0		1.3		0.2		8.5
Total selling, general and administrative expenses		13.5		1.3		4.0		18.8
Consolidated total	$	13.5	$	1.3	$	4.0	$	18.8

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Included in the above estimates are $17.3 million of charges that have resulted or will result in cash outflows and $1.5 million of non-cash charges.

During fiscal 2012, we recognized the following pre-tax charges in our consolidated statement of earnings for the Administrative Efficiency Plan:

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.1	$	1.1
Severance and related costs		6.2		—		2.2		8.4
Other, net		6.0		1.0		0.2		7.2
Total selling, general and administrative expenses		12.2		1.0		3.5		16.7
Consolidated total	$	12.2	$	1.0	$	3.5	$	16.7

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

	Balance at May  29, 2011		Costs Incurred and Charged to Expense		Costs Paid or  Otherwise Settled			Changes  in Estimates			Balance at May  27, 2012
Severance and related costs	$	—	$	9.2	$	(6.3	)	$	(0.8	)	$	2.1
Plan implementation costs		—		7.1		(6.8	)		—			0.3
Total	$	—	$	16.3	$	(13.1	)	$	(0.8	)	$	2.4

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 2014 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 of $83.2 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 2014 timeframe (amounts include charges recognized in fiscal 2011 and 2012):

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	22.4	$	—	$	22.4
Inventory write-offs and related costs		11.2		0.4		11.6
Total cost of goods sold		33.6		0.4		34.0
Asset impairment		13.3		14.0		27.3
Severance and related costs		9.7		0.1		9.8
Other, net		10.6		1.5		12.1
Total selling, general and administrative expenses		33.6		15.6		49.2
Consolidated total	$	67.2	$	16.0	$	83.2

Included in the above estimates are $26.0 million of charges which have resulted or will result in cash outflows and $57.2 million of non-cash charges.

During fiscal 2012, we recognized the following pre-tax charges in our consolidated statement of earnings for the Network Optimization Plan:

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	15.5	$	—	$	15.5
Inventory write-offs and related costs		6.7		0.1		6.8
Total cost of goods sold		22.2		0.1		22.3
Asset impairment		4.7		3.5		8.2
Severance and related costs		4.6		—		4.6
Other, net		5.2		1.5		6.7
Total selling, general and administrative expenses		14.5		5.0		19.5
Consolidated total	$	36.7	$	5.1	$	41.8

We recognized the following cumulative (plan inception to May 27, 2012) pre-tax charges related to the Network Optimization Plan in our consolidated statement of earnings:

	Consumer Foods		Commercial Foods		Total
Accelerated depreciation	$	20.5	$	—	$	20.5
Inventory write-offs and related costs		6.9		0.4		7.3
Total cost of goods sold		27.4		0.4		27.8
Asset impairment		13.3		14.0		27.3
Severance and related costs		9.5		0.1		9.6
Other, net		6.2		1.5		7.7
Total selling, general and administrative expenses		29.0		15.6		44.6
Consolidated total	$	56.4	$	16.0	$	72.4

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

	Balance at May  29, 2011		Costs Incurred and  Charged to Expense		Costs Paid or  Otherwise Settled			Changes  in Estimates		Balance at May  27, 2012
Severance and related costs	$	4.8	$	3.8	$	(2.2	)	$	0.6	$	7.0
Plan implementation costs		—		7.5		(6.7	)		—		0.8
Total	$	4.8	$	11.3	$	(8.9	)	$	0.6	$	7.8

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 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. Since the Garner accident, the Troy facility has been producing a portion of our meat snack products. By the end of fiscal 2011, the plan was substantially implemented and the facility had 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”).

At the end 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 charges of $67.5 million, of which $2.6 million was recognized in fiscal 2012, $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 recognized the following pre-tax expenses associated with the 2010 plan in the fiscal 2010 to 2012 timeframe (plan inception to May 27, 2012):

	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 results are $28.3 million of charges which have resulted in cash outflows and $39.2 million of non-cash charges.