RESTRUCTURING ACTIVITIES

Supply Chain and Administrative Efficiency Plan

In May 2013, we announced the Supply Chain and Administrative Efficiency Plan (the "SCAE Plan"), our plan to integrate and restructure the operations of our Private Brands business, improve selling, general and administrative ("SG&A") effectiveness and efficiencies, and optimize our supply chain network, manufacturing assets, dry distribution centers, and mixing centers. In the second quarter of fiscal 2016, we announced plans to realize efficiency benefits by reducing SG&A expenses and enhancing trade spend processes and tools, which plans were included as part of the SCAE Plan. Although we divested the Private Brands business, we have continued to implement the SCAE Plan, including by working to optimize our supply chain network, pursue cost reductions through our SG&A functions, enhance trade spend processes and tools, and improve productivity.

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 2018, 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 27, 2017, our Board of Directors has approved the incurrence of up to $900.9 million of expenses in connection with the SCAE Plan, including expenses allocated for the Private Brands and Lamb Weston operations. We have incurred or expect to incur approximately $450.1 million of charges ($303.3 million of cash charges and $146.8 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 2018 and 2017, we recognized charges of $11.4 million and $14.1 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 2018):



	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Pension costs	$	32.9	$	1.5	$	—	$	—	$	—	$	34.4
Accelerated depreciation	33.7		18.6		—		—		1.2		53.5
Other cost of goods sold	9.2		2.1		—		—		—		11.3
Total cost of goods sold	75.8		22.2		—		—		1.2		99.2
Severance and related costs, net	26.9		10.3		2.5		7.9		102.1		149.7
Fixed asset impairment (net of gains on disposal)	7.4		6.9		—		—		11.2		25.5
Accelerated depreciation	—		—		—		—		4.4		4.4
Contract/lease cancellation expenses	0.8		0.6		0.6		—		72.6		74.6
Consulting/professional fees	0.9		0.4		0.1		—		52.7		54.1
Other selling, general and administrative expenses	15.0		3.2		—		—		24.4		42.6
Total selling, general and administrative expenses	51.0		21.4		3.2		7.9		267.4		350.9
Consolidated total	$	126.8	$	43.6	$	3.2	$	7.9	$	268.6	$	450.1

During the first quarter of fiscal 2018, we recognized the following pre-tax expenses for the SCAE Plan related to our continuing operations:



	Grocery & Snacks		Corporate		Total
Accelerated depreciation	$	1.2	$	—	$	1.2
Other cost of goods sold	1.1		—		1.1
Total cost of goods sold	2.3		—		2.3
Severance and related costs, net	2.0		—		2.0
Fixed asset impairment (net of gains on disposal)	0.1		4.4		4.5
Accelerated depreciation	—		0.6		0.6
Consulting/professional fees	—		0.2		0.2
Other selling, general and administrative expenses	1.8		—		1.8
Total selling, general and administrative expenses	3.9		5.2		9.1
Consolidated total	$	6.2	$	5.2	$	11.4

Included in the above table are $4.8 million of charges that have resulted or will result in cash outflows and $6.6 million in non-cash charges.

We recognized the following cumulative (plan inception to August 27, 2017) pre-tax expenses related to the SCAE Plan related to our continuing operations in our Condensed Consolidated Statements of Earnings:



	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Pension costs	$	32.9	$	1.5	$	—	$	—	$	—	$	34.4
Accelerated depreciation	32.2		18.6		—		—		1.2		52.0
Other cost of goods sold	6.1		2.1		—		—		—		8.2
Total cost of goods sold	71.2		22.2		—		—		1.2		94.6
Severance and related costs, net	25.9		10.3		2.5		7.9		101.5		148.1
Fixed asset impairment (net of gains on disposal)	7.4		6.9		—		—		11.2		25.5
Accelerated depreciation	—		—		—		—		3.2		3.2
Contract/lease cancellation expenses	0.8		0.6		0.6		—		71.3		73.3
Consulting/professional fees	0.9		0.4		0.1		—		51.4		52.8
Other selling, general and administrative expenses	13.0		3.2		—		—		20.0		36.2
Total selling, general and administrative expenses	48.0		21.4		3.2		7.9		258.6		339.1
Consolidated total	$	119.2	$	43.6	$	3.2	$	7.9	$	259.8	$	433.7

Included in the above results are $290.3 million of charges that have resulted or will result in cash outflows and $143.4 million in non-cash charges. Not included in the above results 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, and $2.1 million of pre-tax expenses (all resulting in cash charges) related to Lamb Weston.

Liabilities recorded for the SCAE Plan related to our continuing operations and changes therein for the first quarter of fiscal 2018 were as follows:



	Balance at May 28, 2017		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at August 27, 2017
Pension costs	$	31.8	$	—	$	—		$	—		$	31.8
Severance and related costs	13.8		2.3		(4.4		)	(0.3		)	11.4
Consulting/professional fees	0.6		0.2		(0.6		)	—			0.2
Contract/lease cancellation	11.6		—		(1.7		)	—			9.9
Other costs	1.9		2.7		(3.2		)	—			1.4
Total	$	59.7	$	5.2	$	(9.9	)	$	(0.3	)	$	54.7