RESTRUCTURING

6 Months Ended

Nov. 25, 2012

RESTRUCTURING

9. RESTRUCTURING

Acquisition-related restructuring

We are incurring costs in connection with actions taken 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 severance, relocation, and other site closure costs of $10.5 million. We anticipate that we will recognize the following acquisition-related exit costs, all within our Consumer Foods reporting segment, in selling, general and administrative expenses during fiscal 2012 to 2014 (amounts include charges recognized in fiscal 2012 and the first half of fiscal 2013):

	Total
Severance and related costs	$	9.9
Other, net		0.6
Total selling, general and administrative expenses		10.5
Consolidated total	$	10.5

Included in the above estimates are $10.2 million of charges that have resulted or will result in cash outflows and $0.3 million of non-cash charges.

During the second quarter of fiscal 2013, we recognized the following pre-tax expenses, all within our Consumer Foods reporting segment, for acquisition-related exit costs:

	Total
Severance and related costs	$	2.1
Other, net		0.1
Total selling, general and administrative expenses		2.2
Consolidated total	$	2.2

During the first half of fiscal 2013, we recognized the following pre-tax expenses, all within our Consumer Foods reporting segment, for acquisition-related exit costs:

	Total
Other	$	(0.2	)
Total cost of goods sold		(0.2	)
Severance and related costs		3.6
Other, net		0.6
Total selling, general and administrative expenses		4.2
Consolidated total	$	4.0

We recognized the following cumulative (plan inception to November 25, 2012) pre-tax acquisition-related exit costs in our consolidated statement of earnings, all within our Consumer Foods reporting segment:

	Total
Severance and related costs	$	7.9
Other, net		0.6
Total selling, general and administrative expenses		8.5
Consolidated total	$	8.5

Liabilities recorded for acquisition-related exit costs and changes therein for the first half of fiscal 2013 were as follows:

	Balance at May  27, 2012		Costs Incurred and Charged to Expense		Costs Paid or  Otherwise Settled			Changes  in Estimates		Balance at November 25, 2012
Severance and related costs	$	4.3	$	4.0	$	(3.7	)	$	—	$	4.6
Total	$	4.3	$	4.0	$	(3.7	)	$	—	$	4.6

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 $19.2 million of pre-tax cash and non-cash 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 2014 timeframe (amounts include charges recognized in fiscal 2012 and the first half of fiscal 2013):

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.5	$	1.5
Severance and related costs		7.2		—		2.2		9.4
Other, net		7.0		1.1		0.2		8.3
Total selling, general and administrative expenses		14.2		1.1		3.9		19.2
Consolidated total	$	14.2	$	1.1	$	3.9	$	19.2

Included in the above estimates are $17.3 million of charges that have resulted or will result in cash outflows and $1.9 million of non-cash charges.

During the second quarter of fiscal 2013, we recognized the following pre-tax expenses associated with the Administrative Efficiency Plan:

	Consumer Foods		Corporate		Total
Accelerated depreciation	$	—	$	0.1	$	0.1
Severance and related costs		0.3		0.1		0.4
Other, net		0.4		—		0.4
Total selling, general and administrative expenses		0.7		0.2		0.9
Consolidated total	$	0.7	$	0.2	$	0.9

During the first half of fiscal 2013, we recognized the following pre-tax expenses associated with the Administrative Efficiency Plan:

	Consumer Foods		Corporate		Total
Accelerated depreciation	$	—	$	0.2	$	0.2
Severance and related costs		0.9		—		0.9
Other, net		0.4		—		0.4
Total selling, general and administrative expenses		1.3		0.2		1.5
Consolidated total	$	1.3	$	0.2	$	1.5

We recognized the following cumulative (plan inception to November 25, 2012) pre-tax charges related to the Administrative Efficiency Plan in our consolidated statement of earnings:

	Consumer Foods		Commercial Foods		Corporate		Total
Accelerated depreciation	$	—	$	—	$	1.3	$	1.3
Severance and related costs		7.1		—		2.2		9.3
Other, net		6.3		1.0		0.3		7.6
Total selling, general and administrative expenses		13.4		1.0		3.8		18.2
Consolidated total	$	13.4	$	1.0	$	3.8	$	18.2

Liabilities recorded for the various initiatives and changes therein for the first half of fiscal 2013 under the Administrative Efficiency Plan were as follows:

	Balance at May 27, 2012		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at November 25, 2012
Severance and related costs	$	2.1	$	1.0	$	(2.0	)	$	(0.1	)	$	1.0
Plan implementation costs		0.3		0.1		(0.4	)		—			—
Total	$	2.4	$	1.1	$	(2.4	)	$	(0.1	)	$	1.0

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. The Network Optimization 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.

In connection with the Network Optimization Plan, we expect to incur pre-tax cash and non-cash charges of $81.4 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 fiscal 2014 timeframe (amounts include charges recognized in fiscal 2011, 2012, and the first half of fiscal 2013):

	Consumer Foods			Commercial Foods		Corporate		Total
Accelerated depreciation	$	22.6		$	—	$	—	$	22.6
Inventory write-offs and related costs		9.4			0.4		—		9.8
Total cost of goods sold		32.0			0.4		—		32.4
Asset impairment		13.7			14.0		—		27.7
Gain on sale of property, plant and equipment		(1.0	)		—		—		(1.0	)
Severance and related costs		9.9			0.1		—		10.0
Other, net		10.0			1.5		0.8		12.3
Total selling, general and administrative expenses		32.6			15.6		0.8		49.0
Consolidated total	$	64.6		$	16.0	$	0.8	$	81.4

Included in the above estimates are $25.4 million of charges that have resulted or will result in cash outflows and $56.0 million of non-cash charges.

During the second quarter of fiscal 2013, we recognized the following pre-tax expenses, all within our Consumer Foods reporting segment, associated with the Network Optimization Plan:

	Total
Accelerated depreciation	$	0.4
Inventory write-offs and related costs		0.1
Total cost of goods sold		0.5
Gain on sale of property, plant and equipment		(0.4	)
Severance and related costs		0.2
Other, net		0.4
Total selling, general and administrative expenses		0.2
Consolidated total	$	0.7

During the first half of fiscal 2013, we recognized the following pre-tax expenses associated with the Network Optimization Plan:

	Consumer Foods			Corporate		Total
Accelerated depreciation	$	2.0		$	—	$	2.0
Inventory write-offs and related costs		0.1			—		0.1
Total cost of goods sold		2.1			—		2.1
Gain on sale of property, plant and equipment		(1.0	)		—		(1.0	)
Asset impairment		0.3			—		0.3
Severance and related costs		0.2			—		0.2
Other, net		2.1			0.8		2.9
Total selling, general and administrative expenses		1.6			0.8		2.4
Consolidated total	$	3.7		$	0.8	$	4.5

We recognized the following cumulative (plan inception to November 25, 2012) pre-tax expenses related to the Network Optimization Plan:

	Consumer Foods			Commercial Foods		Corporate		Total
Accelerated depreciation	$	22.5		$	—	$	—	$	22.5
Inventory write-offs and related costs		7.0			0.4		—		7.4
Total cost of goods sold		29.5			0.4		—		29.9
Asset impairment		13.6			14.0		—		27.6
Gain on sale of property, plant and equipment		(1.0	)		—		—		(1.0	)
Severance and related costs		9.7			0.1		—		9.8
Other, net		8.3			1.5		0.8		10.6
Total selling, general and administrative expenses		30.6			15.6		0.8		47.0
Consolidated total	$	60.1		$	16.0	$	0.8	$	76.9

Liabilities recorded for the various initiatives and changes therein for the second quarter of fiscal 2013 under the Network Optimization Plan were as follows:

	Balance at May 27, 2012		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at November 25, 2012
Severance and related costs	$	7.0	$	0.8	$	(3.8	)	$	(0.9	)	$	3.1
Plan implementation costs		0.8		2.2		(2.9	)		—			0.1
Total	$	7.8	$	3.0	$	(6.7	)	$	(0.9	)	$	3.2

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. By the end of fiscal 2012, the 2010 plan was complete.