PORK RESTRUCTURING

12 Months Ended

May 01, 2011

Notes to Consolidated Financial Statements [Abstract]

NOTE 4: PORK RESTRUCTURING

In February 2009 (fiscal 2009), we announced a plan to consolidate and streamline the corporate structure and manufacturing operations of our Pork segment (the Restructuring Plan). This restructuring was intended to make us more competitive by improving operating efficiencies and increasing plant utilization. The Restructuring Plan included the following primary initiatives:


▪	the closing of the following six plants, with the transfer of production to more efficient facilities:


▪	The Smithfield Packing Company, Incorporated’s (Smithfield Packing) Smithfield South plant in Smithfield, Virginia;


▪	Smithfield Packing’s Plant City, Florida plant;


▪	Smithfield Packing’s Elon, North Carolina plant;


▪	John Morrell & Co’s (John Morrell) Great Bend, Kansas plant;


▪	Farmland Foods, Inc.’s (Farmland Foods) New Riegel, Ohio plant; and


▪	Armour-Eckrich’s Hastings, Nebraska plant;


▪	a reduction in the number of operating companies in the Pork segment from seven to three;


▪	the merger of the fresh pork sales forces of the John Morrell and Farmland Foods business units; and


▪	the consolidation of the international sales organizations of our U.S. operating companies into one group that is responsible for exports.

We completed the Restructuring Plan in the first half of fiscal 2011 with cumulative pre-tax restructuring and impairment charges of approximately $105.5 million. We recorded $17.3 million of these charges in fiscal 2010 and $88.2 million in fiscal 2009. Of these amounts, $4.7 million and $5.9 million were recorded in selling, general and administrative expenses in fiscal 2010 and fiscal 2009, respectively, with the remainder recorded in cost of sales. Total impairment charges were $74.7 million, including $0.5 million in fiscal 2010 and $74.2 million in fiscal 2009. Other restructuring charges consisted of employee severance and related benefits, plant consolidation expenses and plant wind-down expenses. There were no material charges incurred in fiscal 2011. All charges were recorded in the Pork segment.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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