STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Aug. 27, 2017

Schedule of weighted average Black-Scholes assumptions for stock options


Expected volatility (%) (a)			23.27
Dividend yield (%)			1.71
Risk-free interest rate (%)			1.51
Expected life of stock option (years)			4.4

Because our equity shares have been traded for a relatively short period of time, we based our expected volatility assumptions on the volatility of related industry stocks.

The Schedule of stock option activity


			Weighted-		Weighted-
			Average		Average		Aggregate
			Exercise		Remaining		Intrinsic
			Price		Contractual		Value (a)
	Shares		(per share)		Term (Years)		(in millions)
Outstanding at May 28, 2017		720,827		25.90
Granted		56,497		43.82
Exercised		(33,345)		18.53
Forfeited/cancelled		—		—
Outstanding at August 27, 2017		743,979	$	27.59		7.5	$	13.0

Exercisable at August 27, 2017		397,795	$	21.96		6.2	$	9.2

(a)

The aggregate intrinsic values represent the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of our fiscal 2018 first quarter, or August 25, 2017, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at the end of the quarter. The amount changes based on the fair market value of our stock.

The schedule of RSU and Performance Share activity


	Stock-Settled				Cash-Settled				Performance Shares
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
			Grant-				Grant-				Grant-
			Date Fair				Date Fair				Date Fair
	Shares		Value		Shares		Value		Shares		Value
Outstanding at May 28, 2017		489,604	$	26.92		462,612	$	25.33		57,690	$	25.84
Granted (a)		250,283		43.83		—		—		171		45.99
Performance condition adjustment (b)		—		—		—		—		(818)		19.70
Vested (c)		(113,738)		20.60		(168,233)		19.69		(15,228)		19.70
Forfeited/expired/cancelled		—		—		(2,370)		27.03		—		—
Outstanding at August 27, 2017		626,149	$	34.83		292,009	$	28.56		41,815	$	28.28

(a)

Granted represents new grants and dividend equivalents accrued.

(b)

Amount represents additional Performance Shares earned during the thirteen weeks ended August 27, 2017 based on the performance condition adjustment.

(c)

The aggregate fair value of awards that vested during the thirteen weeks ended August 27, 2017 was $13.0 million, which represents the market value of our common stock on the date that the RSUs and Performance Shares vested. The number of RSUs and Performance Shares vested includes shares of common stock that we withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. RSUs that are expected to vest are net of estimated future forfeitures.

Schedule of compensation expenses for stock-based awards recognized, net of forfeitures

Condensed Combined and Consolidated Statements of Earnings, net of forfeitures, was as follows (dollars in millions):


	Thirteen Weeks Ended
	August 27,		August 28,
	2017		2016
Stock options	$	0.6	$	0.1
Stock-settled RSUs		1.9		0.8
Cash-settled RSUs (a)		0.9		1.5
Performance shares		0.1		0.3
Total compensation expense		3.5		2.7
Income tax benefit (b)		(1.3)		(1.0)
Total compensation expense, net of tax benefit	$	2.2	$	1.7

(a)

All cash-settled RSUs are marked-to-market and presented within “Accrued liabilities” and “Other noncurrent liabilities” in our Condensed Consolidated Balance Sheets.

(b)

Income tax benefit represents the marginal tax rate.

Schedule of total unrecognized compensation expense, net of estimated forfeitures, related to stock-based payments

Based on estimates at August 27, 2017, total unrecognized compensation expense related to share-based payments was as follows (dollars in millions):


			Remaining
			Weighted
	Unrecognized		Average
	Compensation		Recognition
	Expense		Period (in years)
Stock options	$	1.1		1.6
Stock-settled RSUs		16.1		2.5
Cash-settled RSUs		5.7		1.6
Performance shares		0.8		1.4
Total unrecognized stock-based compensation expense	$	23.7		2.2