Special Project Costs

12 Months Ended

Apr. 30, 2024

Restructuring and Related Activities [Abstract]

Note 4: Special Project Costs

Special project costs consist primarily of employee-related costs and other transition and termination costs related to certain divestiture, acquisition, integration, and restructuring activities. Employee-related costs include severance, retention bonuses, and relocation costs. Severance costs are generally recognized when deemed probable and estimable, retention bonuses are recognized over the estimated future service period of the impacted employees, and relocation costs are expensed as incurred. Other transition and termination costs include fixed asset-related charges, contract and lease termination costs, professional fees, and other miscellaneous expenditures associated with divestiture, acquisition, integration, and restructuring activities. With the exception of accelerated depreciation, these costs are expensed as incurred. These special project costs are reported in cost of products sold, other special project costs, other debt costs, and other income (expense) - net in the Statements of Consolidated Income and are not allocated to segment profit. The obligation related to employee separation costs is included in other current liabilities in the Consolidated Balance Sheets.

Divestiture Costs: Total divestiture costs related to the divested Sahale Snacks and Canada condiment businesses are anticipated to be approximately $6.0, consisting primarily of employee-related and lease termination costs, all of which are expected to be cash charges with the majority recognized in 2024 and the remainder to be recognized during the first half of 2025. We incurred $3.9 of employee-related costs and $1.6 of other transition and termination costs related to lease termination costs during 2024. The obligation related to severance and retention bonuses was $2.5 at April 30, 2024, and is expected to be settled during the first half of 2025.

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of the divestiture of certain pet food brands. We anticipate incurring approximately $11.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026, with over half of the costs expected to be recognized in 2025. For additional information, see Note 3: Divestitures.

Integration Costs: Total integration costs related to the acquisition of Hostess Brands are anticipated to be approximately $210.0 and include transaction costs, employee-related costs, and other transition and termination charges. The majority of the integration costs are expected to be cash charges with most recognized during 2024. The remainder are expected to be incurred by the end of 2026 and are expected to be split between employee-related costs and other transition and termination costs.

The following table summarizes our integration costs incurred related to the acquisition of Hostess Brands.


	2024
Transaction costs	$	99.0
Employee-related costs	33.4
Other transition and termination costs	15.0
Total integration costs	$	147.4

Noncash charges of $3.2 were incurred through April 30, 2024, which primarily consisted of accelerated depreciation. Transaction costs primarily reflect equity compensation pay-outs, legal fees, and fees related to the Bridge Loan that provided committed financing for the acquisition of Hostess Brands. Other transition and termination costs primarily consisted of contract termination charges, accelerated depreciation, and consulting fees. The obligation related to severance and retention bonuses was $28.0 at April 30, 2024. For additional information, see Note 2: Acquisition.

Restructuring Costs: A restructuring program was approved by the Board during 2021, associated with opportunities identified to reduce our overall cost structure, optimize our organizational design, and support our portfolio reshape. The program was further expanded in 2022 to include the costs associated with the divestitures of the private label dry pet food and natural beverage and grains businesses, as well as closure of certain production facilities. The restructuring activities were considered complete as of April 30, 2023. The costs incurred associated with these restructuring activities included other transition and termination costs related to our cost reduction and margin management initiatives, inclusive of accelerated depreciation, as well as employee-related costs. For additional information related to the divestitures, see Note 3: Divestitures.

During 2022, we completed the transition of liquid coffee production to JDE Peet’s, and expanded the restructuring program to include certain costs associated with the divestitures of the private label dry pet food and natural beverage and grains businesses, as well as the closure of our Ripon, Wisconsin production facility to further optimize operations for our U.S. Retail Frozen Handheld and Spreads business. We completed the closure of the Ripon facility during 2023.

The following table summarizes our restructuring costs incurred related to the restructuring program.


	2023		2022		Total Costs Incurred to Date at April 30, 2023
Employee-related costs	$	3.5	$	6.3	$	27.1
Other transition and termination costs	7.6		22.2		36.6
Total restructuring costs	$	11.1	$	28.5	$	63.7

The obligation related to severance costs and retention bonuses was $1.6 at April 30, 2023, and was fully satisfied during the first quarter of 2024. Cumulative noncash charges incurred through April 30, 2023, to date were $33.2, and included $10.2 and $18.6 incurred during 2023 and 2022 respectively, which primarily consisted of accelerated depreciation.