Note 2 - Restructuring Activities

12 Months Ended

May 29, 2022

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

2. RESTRUCTURING ACTIVITIES

Pinnacle Integration Restructuring Plan

In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods, Inc. ("Pinnacle") (such plan the "Pinnacle Integration Restructuring Plan"), for the purpose of achieving significant cost synergies between the companies, as a result of which we expect to incur material charges for exit and disposal activities under U.S. GAAP. We expect to incur approximately $346.9 million ($284.3 million of cash charges and $62.6 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. The Board and/or our senior management have authorized incurrence of these charges. We recognized charges of $19.6 million, $31.7 million, and $73.8 million in connection with the Pinnacle Integration Restructuring Plan in fiscal 2022, 2021, and 2020, respectively. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the Pinnacle Integration Restructuring Plan (amounts include charges recognized from plan inception through the end of fiscal 2022):

	Grocery & Snacks		Refrigerated & Frozen			International		Corporate		Total
Accelerated depreciation	$	5.4	$	4.6		$	—	$	—	$	10.0
Other cost of goods sold		3.7		5.7			0.7		—		10.1
Total cost of goods sold		9.1		10.3			0.7		—		20.1
Severance and related costs		1.4		4.3			1.5		112.2		119.4
Asset impairment (net of gains on disposal)		27.8		(1.7	)		—		2.5		28.6
Accelerated depreciation		—		—			—		7.4		7.4
Contract/lease termination		6.5		3.7			0.8		15.1		26.1
Consulting/professional fees		1.0		—			0.8		111.7		113.5
Other selling, general and administrative expenses		5.8		4.8			0.3		20.9		31.8
Total selling, general and administrative expenses		42.5		11.1			3.4		269.8		326.8
Consolidated total	$	51.6	$	21.4		$	4.1	$	269.8	$	346.9

During fiscal 2022, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:

	Grocery & Snacks		Refrigerated & Frozen			Corporate			Total
Other cost of goods sold	$	—	$	1.7		$	—		$	1.7
Total cost of goods sold		—		1.7			—			1.7
Severance and related costs		—		1.0			(0.2	)		0.8
Asset impairment (net of gains on disposal)		—		(5.7	)		(0.1	)		(5.8	)
Contract/lease termination		—		0.2			(0.8	)		(0.6	)
Consulting/professional fees		0.2		—			19.1			19.3
Other selling, general and administrative expenses		0.1		1.6			2.5			4.2
Total selling, general and administrative expenses		0.3		(2.9	)		20.5			17.9
Consolidated total	$	0.3	$	(1.2	)	$	20.5		$	19.6

Included in the above results are $24.0 million of charges that have resulted or will result in cash outflows and a non-cash net benefit of $4.4 million.

We recognized the following cumulative (plan inception to May 29, 2022) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our Consolidated Statements of Earnings:

	Grocery & Snacks		Refrigerated & Frozen			International		Corporate		Total
Accelerated depreciation	$	0.6	$	4.6		$	—	$	—	$	5.2
Other cost of goods sold		2.3		4.6			0.7		—		7.6
Total cost of goods sold		2.9		9.2			0.7		—		12.8
Severance and related costs		—		4.4			1.5		112.2		118.1
Asset impairment (net of gains on disposal)		0.3		(1.7	)		—		2.5		1.1
Accelerated depreciation		—		—			—		7.4		7.4
Contract/lease termination		1.8		0.2			0.8		15.1		17.9
Consulting/professional fees		0.9		—			0.8		108.6		110.3
Other selling, general and administrative expenses		2.9		2.7			0.3		19.8		25.7
Total selling, general and administrative expenses		5.9		5.6			3.4		265.6		280.5
Consolidated total	$	8.8	$	14.8		$	4.1	$	265.6	$	293.3

Included in the above results are $264.9 million of charges that have resulted or will result in cash outflows and $28.4 million in non-cash charges.

Liabilities recorded for the Pinnacle Integration Restructuring Plan and changes therein for fiscal 2022 were as follows:

			Costs
	Balance at		Incurred		Costs Paid						Balance at
	May 30,		and Charged		or Otherwise			Changes in			May 29,
	2021		to Expense		Settled			Estimates			2022
Severance and related costs	$	5.1	$	0.3	$	(5.6	)	$	0.5		$	0.3
Contract/lease termination		—		—		0.6			(0.6	)		—
Consulting/professional fees		3.9		19.3		(18.6	)		—			4.6
Other costs		—		4.5		(4.5	)		—			—
Total	$	9.0	$	24.1	$	(28.1	)	$	(0.1	)	$	4.9

Conagra Restructuring Plan

In fiscal 2019, senior management initiated a restructuring plan for costs incurred in connection with actions taken to improve SG&A expense effectiveness and efficiencies and to optimize our supply chain network (the "Conagra Restructuring Plan"). Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2022, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. As of May 29, 2022, we had approved the incurrence of $180.6 million ($53.8 million of cash charges and $126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan. We have incurred or expect to incur $148.4 million of charges ($46.4 million of cash charges and $102.0 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan. We recognized charges of $29.4 million, $46.2 million, and $64.4 million in connection with the Conagra Restructuring Plan in fiscal 2022, 2021, and 2020, respectively. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the Conagra Restructuring Plan (amounts include charges recognized from plan inception through the end of fiscal 2022):

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation	$	33.2	$	39.6	$	—	$	—	$	—	$	72.8
Other cost of goods sold		8.7		2.3		—		—		—		11.0
Total cost of goods sold		41.9		41.9		—		—		—		83.8
Severance and related costs		11.6		1.2		1.3		0.3		4.7		19.1
Asset impairment (net of gains on disposal)		21.9		0.8		0.1		—		—		22.8
Contract/lease termination		0.4		—		—		—		0.1		0.5
Consulting/professional fees		—		—		—		—		5.6		5.6
Other selling, general and administrative expenses		12.8		2.6		—		—		0.6		16.0
Total selling, general and administrative expenses		46.7		4.6		1.4		0.3		11.0		64.0
Total	$	88.6	$	46.5	$	1.4	$	0.3	$	11.0	$	147.8
Pension and postretirement non-service income												0.6
Consolidated total											$	148.4

During fiscal 2022, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

	Grocery & Snacks			Refrigerated & Frozen			International		Foodservice		Corporate		Total
Accelerated depreciation	$	1.2		$	12.9		$	—	$	—	$	—	$	14.1
Other cost of goods sold		3.9			2.1			—		—		—		6.0
Total cost of goods sold		5.1			15.0			—		—		—		20.1
Severance and related costs		1.2			(0.6	)		0.2		0.3		2.3		3.4
Asset impairment (net of gains on disposal)		(5.2	)		0.5			—		—		—		(4.7	)
Contract/lease termination		0.4			—			—		—		—		0.4
Consulting/professional fees		—			—			—		—		1.7		1.7
Other selling, general and administrative expenses		7.6			0.8			—		—		0.1		8.5
Total selling, general and administrative expenses		4.0			0.7			0.2		0.3		4.1		9.3
Total	$	9.1		$	15.7		$	0.2	$	0.3	$	4.1	$	29.4

Included in the above results are $16.0 million of charges that have resulted or will result in cash outflows and $13.4 million in non-cash charges.

We recognized the following cumulative (plan inception to May 29, 2022) pre-tax expenses for the Conagra Restructuring Plan in our Consolidated Statements of Earnings:

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation	$	33.2	$	39.6	$	—	$	—	$	—	$	72.8
Other cost of goods sold		8.7		2.3		—		—		—		11.0
Total cost of goods sold		41.9		41.9		—		—		—		83.8
Severance and related costs		11.6		1.2		1.3		0.3		4.4		18.8
Asset impairment (net of gains on disposal)		21.9		0.8		0.1		—		—		22.8
Contract/lease termination		0.4		—		—		—		0.1		0.5
Consulting/professional fees		—		—		—		—		1.7		1.7
Other selling, general and administrative expenses		12.6		1.1		—		—		0.3		14.0
Total selling, general and administrative expenses		46.5		3.1		1.4		0.3		6.5		57.8
Total	$	88.4	$	45.0	$	1.4	$	0.3	$	6.5	$	141.6
Pension and postretirement non-service income												0.6
Consolidated total											$	142.2

Included in the above results are $40.1 million of charges that have resulted or will result in cash outflows and $102.1 million in non-cash charges.

Liabilities recorded for the Conagra Restructuring Plan and changes therein for fiscal 2022 were as follows:

			Costs
	Balance at		Incurred		Costs Paid						Balance at
	May 30,		and Charged		or Otherwise			Changes in			May 29,
	2021		to Expense		Settled			Estimates			2022
Severance and related costs	$	9.7	$	5.0	$	(9.9	)	$	(1.6	)	$	3.2
Contract/lease termination		—		0.4		(0.4	)		—			—
Consulting/professional fees		—		1.7		—			—			1.7
Other costs		—		10.5		(10.3	)		—			0.2
Total	$	9.7	$	17.6	$	(20.6	)	$	(1.6	)	$	5.1