RESTRUCTURING ACTIVITIES

Supply Chain and Administrative Efficiency Plan

We previously announced a plan for the integration and restructuring of the operations of Ralcorp Holdings, Inc. ("Ralcorp"), optimization of the entire Company's supply chain network, manufacturing assets, and dry distribution and mixing centers, and improvement of selling, general and administrative effectiveness and efficiencies, which we refer to as the Supply Chain and Administrative Efficiency Plan (the "SCAE Plan"). Although the divestiture of the Private Brands business was completed in the third quarter of fiscal 2016, we will continue to implement portions of the SCAE Plan, including work related to optimizing our supply chain network and pursue cost reductions through our selling, general and administrative functions and productivity improvements. The SCAE Plan also includes plans announced in the second quarter of fiscal 2016 to realize efficiency benefits through a combination of reductions in selling, general and administrative expenses and enhancements to trade spend processes and tools.

Although we remain unable to make good faith estimates relating to the entire SCAE Plan, we are reporting on actions initiated through the end of the first quarter of fiscal 2017, 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 August 28, 2016, our Board of Directors has approved the incurrence of up to $739.0 million of expenses in connection with the SCAE Plan, including expenses allocated for the Private Brands operations. We have incurred or expect to incur approximately $431.4 million of charges ($300.4 million of cash charges and $131.0 million of non-cash charges) for actions identified to date under the SCAE Plan related to our continuing operations. In the first quarter of fiscal 2017 and 2016, we recognized charges of $14.1 million and $17.4 million, respectively, in relation to the SCAE Plan related to our continuing operations. We expect to incur costs related to the SCAE Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the SCAE Plan related to our continuing operations (amounts include charges recognized from plan inception through the first quarter of fiscal 2017):



	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Commercial		Corporate		Total
Multi-employer pension costs	$	29.8	$	1.5	$	—	$	—	$	—	$	—	$	31.3
Accelerated depreciation	31.6		19.0		—		—		—		1.2		51.8
Other cost of goods sold	5.6		2.6		—		—		—		—		8.2
Total cost of goods sold	67.0		23.1		—		—		—		1.2		91.3
Severance and related costs, net	21.9		12.1		4.2		6.1		2.1		97.7		144.1
Fixed asset impairment (Net of gains on disposal)	7.3		6.2		—		—		—		0.8		14.3
Accelerated depreciation	—		0.1		—		—		—		1.5		1.6
Contract/Lease cancellation expenses (recoveries)	0.8		0.5		—		—		—		61.8		63.1
Consulting/Professional fees	0.6		0.4		0.1		—		—		57.5		58.6
Other selling, general and administrative expenses	11.8		3.8		—		—		—		42.8		58.4
Total selling, general and administrative expenses	42.4		23.1		4.3		6.1		2.1		262.1		340.1
Consolidated total	$	109.4	$	46.2	$	4.3	$	6.1	$	2.1	$	263.3	$	431.4

During the first quarter of fiscal 2017, we recognized the following pre-tax expenses for the SCAE Plan related to our continuing operations:



	Grocery & Snacks			Refrigerated & Frozen		International		Foodservice		Commercial		Corporate			Total
Accelerated depreciation	$	1.8		$	1.2	$	—	$	—	$	—	$	—		$	3.0
Other cost of goods sold	2.0			0.2		—		—		—		—			2.2
Total cost of goods sold	3.8			1.4		—		—		—		—			5.2
Severance and related costs, net	(0.2		)	—		0.2		1.8		—		—			1.8
Fixed asset impairment (Net of gains on disposal)	0.6			2.6		—		—		—		—			3.2
Accelerated depreciation	—			—		—		—		—		0.2			0.2
Contract/Lease cancellation expenses (recoveries)	—			—		—		—		—		(1.5		)	(1.5		)
Consulting/Professional fees	—			—		—		—		—		0.1			0.1
Other selling, general and administrative expenses	0.7			1.0		—		—		—		3.4			5.1
Total selling, general and administrative expenses	1.1			3.6		0.2		1.8		—		2.2			8.9
Consolidated total	$	4.9		$	5.0	$	0.2	$	1.8	$	—	$	2.2		$	14.1

Included in the above table are $5.5 million of charges that have resulted or will result in cash outflows and $8.6 million in non-cash charges.

We recognized the following cumulative (plan inception to August 28, 2016) pre-tax expenses related to the SCAE Plan related to our continuing operations in our Condensed Consolidated Statements of Operations:



	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Commercial		Corporate		Total
Multi-employer pension costs	$	29.8	$	1.5	$	—	$	—	$	—	$	—	$	31.3
Accelerated depreciation	23.2		18.6		—		—		—		1.2		43.0
Other cost of goods sold	3.9		2.1		—		—		—		—		6.0
Total cost of goods sold	56.9		22.2		—		—		—		1.2		80.3
Severance and related costs, net	20.4		10.5		4.2		6.1		2.1		96.4		139.7
Fixed asset impairment (Net of gains on disposal)	7.8		6.2		—		—		—		0.8		14.8
Accelerated depreciation	—		—		—		—		—		1.5		1.5
Contract/Lease cancellation expenses	0.8		0.5		—		—		—		60.2		61.5
Consulting/Professional fees	0.6		0.4		0.1		—		—		50.9		52.0
Other selling, general and administrative expenses	6.1		2.6		—		—		—		16.4		25.1
Total selling, general and administrative expenses	35.7		20.2		4.3		6.1		2.1		226.2		294.6
Consolidated total	$	92.6	$	42.4	$	4.3	$	6.1	$	2.1	$	227.4	$	374.9

Included in the above table are $254.3 million of charges that have resulted or will result in cash outflows and $120.6 million in non-cash charges. Not included in the above table are $130.2 million of pre-tax expenses ($84.5 million of cash charges and $45.7 million of non-cash charges) related to the Private Brands operations which we sold in the third quarter of fiscal 2016.

Liabilities recorded for the SCAE Plan related to our continuing operations and changes therein for the first quarters of fiscal 2017 were as follows:



	Balance at May 29, 2016		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at August 28, 2016
Multi-employer pension costs	$	40.7	$	—	$	(10.9	)	$	—		$	29.8
Severance	47.2		3.6		(18.3		)	(1.8		)	30.7
Consulting	4.7		0.1		(4.8		)	—			—
Contract termination	6.3		—		(0.4		)	(1.5		)	4.4
Other costs	0.5		5.2		(3.7		)	—			2.0
Total	$	99.4	$	8.9	$	(38.1	)	$	(3.3	)	$	66.9