PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables)

9 Months Ended

Feb. 26, 2017

PENSION AND OTHER POST-RETIREMENT BENEFITS

Schedule of components of net periodic benefit cost for our pension and postretirement benefit plans

For the period after the Separation Date, the components of net periodic benefit cost for our pension and postretirement benefit plans were as follows (dollars in millions):

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	February 26, 2017				February 26, 2017
			Postretirement				Postretirement
	Pension Plan		Plans		Pension Plan		Plans
Service cost	$	2.0	$	—	$	2.4	$	—
Interest cost		0.1		—		0.1		—
Expected return on plan assets		—		—		—		—
Net amortization of unrecognized amounts		—		—		—		—
Prior service cost		—		—		—		—
Actuarial loss		—		—		—		—
Net periodic benefit cost	$	2.1	$	—	$	2.5	$	—

Schedule of Pension costs incurred included in the Condensed Combined and Consolidated statements of earnings

9.   PENSION AND OTHER POST-RETIREMENT BENEFITS

In connection with the Separation, the pension liabilities related to Lamb Weston participants in the Conagra salaried employee pension plan and the vested benefits attributable to Lamb Weston hourly employee plan participants were retained by Conagra. Pension liabilities that transferred to Lamb Weston on the Separation Date were nonqualified pension benefits and Lamb Weston hourly participants’ unvested benefits of $7.4 million. The liabilities were transferred to a new defined benefit pension plan for certain hourly employees that continue to accrue benefits. Qualifying employees continue to receive postretirement benefits that include certain medical and dental benefits. 

For the period after the Separation Date, the components of net periodic benefit cost for our pension and postretirement benefit plans were as follows (dollars in millions):

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	February 26, 2017				February 26, 2017
			Postretirement				Postretirement
	Pension Plan		Plans		Pension Plan		Plans
Service cost	$	2.0	$	—	$	2.4	$	—
Interest cost		0.1		—		0.1		—
Expected return on plan assets		—		—		—		—
Net amortization of unrecognized amounts		—		—		—		—
Prior service cost		—		—		—		—
Actuarial loss		—		—		—		—
Net periodic benefit cost	$	2.1	$	—	$	2.5	$	—

We will make pension plan contributions sufficient to fund our actuarially determined requirements, generally equal to the minimum amounts required by the Employee Retirement Income Security Act. We are required to make $0.2 million of required minimum qualified contributions during the remainder of fiscal 2017. 

Prior to Separation

Prior to the Separation Date, Conagra offered plans that were shared amongst its businesses, including Lamb Weston. The participation of Lamb Weston employees in Conagra’s plans is reflected in these financial statements as though Lamb Weston participated in a multiemployer plan with Conagra. A proportionate share of the service cost associated with these plans is reflected in the Condensed Combined and Consolidated Financial Statements up to the Separation Date. Additionally, the remaining cost elements (e.g. interest) are included in the allocations of indirect costs (see Note 3, Related Party Transactions).

Pension Cost Financial Statement Presentation

Allocated pension costs (benefits) incurred by Conagra prior to November 9, 2016 and pension costs recognized after the Separation Date are included in the Condensed Combined and Consolidated Statements of Earnings as follows (dollars in millions):

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	February 26,		February 28,		February 26,		February 28,
	2017		2016		2017		2016
Cost of sales (a)	$	2.1	$	3.0	$	7.5	$	9.0
Selling, general and administrative expenses (a)		—		(1.4)		(5.5)		(4.2)
Total	$	2.1	$	1.6	$	2.0	$	4.8

(a) Pension, service and interest costs are allocated to operations as reflected in cost of sales above. As part of our carved out financial statements, expected returns on pension assets were not allocated to operations and were reflected in “Selling, general and administrative expenses” in the Condensed Combined and Consolidated Statements of Earnings. At Separation, no pension assets were transferred to Lamb Weston.