RESTRUCTURING INITIATIVES

9 Months Ended

Feb. 28, 2016

Restructuring Initiatives [Abstract]

(3) Restructuring Initiatives

We are currently pursuing several multi-year restructuring initiatives designed to increase our efficiency and focus our business behind our key growth strategies. Charges related to these activities were as follows:

	Quarter Ended											Quarter Ended
	Feb. 28, 2016											Feb. 22, 2015
In Millions		Severance		Asset Write-offs		Accelerated Depreciation		Other		Total		Severance		Asset Write-offs		Pension Related		Accelerated Depreciation		Other		Total
Project Compass	$	(0.9)	$	-	$	-	$	0.1	$	(0.8)	$	-	$	-	$	-	$	-	$	-	$	-
Project Century		7.4		10.4		17.0		9.1		43.9		22.3		8.8		15.6		21.6		1.6		69.9
Project Catalyst		(8.9)		-		-		-		(8.9)		(24.4)		11.1		6.6		-		8.0		1.3
Total	$	(2.4)	$	10.4	$	17.0	$	9.2	$	34.2	$	(2.1)	$	19.9	$	22.2	$	21.6	$	9.6	$	71.2

	Nine-Month Period Ended													Nine-Month Period Ended
	Feb. 28, 2016													Feb. 22, 2015
In Millions		Severance		Asset Write-offs		Pension Related		Accelerated Depreciation		Other		Total				Severance		Asset Write-offs		Pension Related		Accelerated Depreciation		Other		Total
Project Compass	$	46.2	$	-	$	(0.2)	$	-	$	6.8	$	52.8		$		-	$	-	$	-	$	-	$	-	$	-
Project Century		35.5		22.9		19.1		59.6		18.0		155.1				44.0		41.4		31.2		34.2		8.0		158.8
Project Catalyst		(8.7)		-		-		-		-		(8.7)				120.6		11.1		6.6		-		8.0		146.3
Combination of certain operational facilities		-		-		-		-		-		-				13.0		0.7		-		-		0.2		13.9
Charges associated with restructuring actions previously announced		-		-		-		-		-		-				(0.6)		-		-		-		-		(0.6)
Total	$	73.0	$	22.9	$	18.9	$	59.6	$	24.8	$	199.2		$		177.0	$	53.2	$	37.8	$	34.2	$	16.2	$	318.4

In the first quarter of fiscal 2016, we approved Project Compass, a restructuring plan designed to enable our International segment to accelerate long-term growth through increased organizational effectiveness and reduced administrative expense. In connection with this project, we expect to eliminate approximately 725 to 775 positions. We expect to incur approximately $62 to $65 million of net expenses relating to this action of which approximately $61 million will be cash. We recorded $52.8 million of restructuring charges in the nine-month period ended February 28, 2016, relating to this action. We expect this action to be completed by the end of fiscal 2017.

Project Century (Century) began in fiscal 2015 as a review of our North American manufacturing and distribution network to streamline operations and identify potential capacity reductions. In the second quarter of fiscal 2016, we broadened the scope of Project Century to identify opportunities to streamline our supply chain outside of North America. As part of the expanded project, we notified employees and their representatives of our decision to close manufacturing facilities in our International segment supply chain located in Berwick, United Kingdom and East Tamaki, New Zealand. These actions will affect approximately 285 positions. We expect to incur total restructuring charges of approximately $47 to $52 million relating to these actions, of which approximately $22 million will be cash. We recorded $17.9 million of restructuring charges in the third quarter of fiscal 2016 and $18.3 million in the nine-month period ended February 28, 2016, relating to these actions. We expect these actions to be completed by the end of fiscal 2017.

As part of Century, in the first quarter of fiscal 2016, we notified the union member employees and union representatives at our West Chicago, Illinois facility of our decision to close this cereal and dry dinner manufacturing plant in our U.S. Retail segment supply chain. This action will affect approximately 500 positions, and we expect to incur approximately $114 million of net expenses relating to this action, of which approximately $57 million will be cash. We recorded $8.2 million of restructuring charges in the third quarter of fiscal 2016 and $72.2 million in the nine-month period ended February 28, 2016, relating to this action. We expect this action to be completed by the end of fiscal 2019.

As part of Century, in the first quarter of fiscal 2016, we notified the employees at our snacks manufacturing facility in Joplin, Missouri of our decision to close this plant in our U.S. Retail segment supply chain. This action affected approximately 120 positions, and we expect to incur approximately $8 million of net expenses relating to this action, of which less than $1 million will be cash. We recorded $0.6 million of restructuring charges in the third quarter of fiscal 2016 and $8.4 million in the nine-month period ended February 28, 2016, relating to this action. We expect this action to be completed by the end of fiscal 2016.

As part of Century, in the third quarter of fiscal 2015, we approved a restructuring plan to reduce our refrigerated dough capacity and exit our Midland, Ontario, Canada and New Albany, Indiana facilities, which support our U.S. Retail, International, and Convenience Stores and Foodservice supply chains. The Midland action will affect approximately 100 positions, and we expect to incur approximately $23 million of net expenses relating to this action, of which approximately $15 million will be cash. We recorded $1.3 million of restructuring charges in the nine-month period ended February 28, 2016, relating to this action. We recorded $5.7 million of restructuring charges in the third quarter of fiscal 2015 relating to this action. The New Albany action will affect approximately 400 positions, and we expect to incur approximately $84 million of net expenses relating to this action of which approximately $42 million will be cash. We recorded $7.5 million of restructuring charges in the third quarter of fiscal 2016 and $13.0 million in the nine-month period ended February 28, 2016, relating to this action. We recorded $47.4 million of restructuring charges in the third quarter of fiscal 2015 relating to this action. We expect these actions to be completed by the end of fiscal 2018.

As part of Century, in the second quarter of fiscal 2015, we approved a restructuring plan to consolidate yogurt manufacturing capacity and exit our Methuen, Massachusetts facility in our U.S. Retail segment and Convenience Stores and Foodservice segment supply chains. This action affected approximately 250 positions. We expect to incur approximately $64 million of net expenses relating to this action of which approximately $13 million will be cash. We recorded $13.8 million of restructuring charges in the nine-month period ended February 28, 2016, relating to this action. We recorded $9.2 million of restructuring charges in the third quarter of fiscal 2015 and $34.9 million in the nine-month period ended February 22, 2015. We expect this action to be completed by the end of fiscal 2016.

As part of Century, in the second quarter of fiscal 2015, we approved a restructuring plan to eliminate excess cereal and dry mix capacity and exit our Lodi, California facility in our U.S. Retail supply chain. This action affected approximately 430 positions. We expect to incur approximately $85 million of net expenses relating to this action of which approximately $20 million will be cash. We recorded $9.4 million of restructuring charges in the third quarter of fiscal 2016 and $26.4 million in the nine-month period ended February 28, 2016, relating to this action. We recorded $8.7 million of restructuring charges in the third quarter of fiscal 2015 and $53.5 million in the nine-month period ended February 22, 2015, relating to this action. We expect this action to be completed by the end of fiscal 2016.

In addition, we recorded restructuring charges of $1.7 million in the third quarter and nine-month period ended February 28, 2016, relating to other Century actions previously announced. We recorded $17.3 million in the nine-month period ended February 22, 2015, relating to other Century actions previously announced.

During the second quarter of fiscal 2015, we approved Project Catalyst, a restructuring plan to increase organizational effectiveness and reduce overhead expense. In connection with this project, we eliminated approximately 750 positions primarily in the United States. We incurred approximately $140 million of net expenses relating to these actions of which approximately $103 million will be cash. In the third quarter of fiscal 2016, we reduced the estimate of charges related to this action by $8.9 million. We recorded $1.3 million of restructuring charges in the third quarter of fiscal 2015 and $146.3 million in the nine-month period ended February 22, 2015, relating to this action. These actions were largely completed in fiscal 2015.

During the first quarter of fiscal 2015, we approved a plan to combine certain Yoplait and General Mills operational facilities within our International segment to increase efficiencies and reduce costs. This action will affect approximately 240 positions. We expect to incur approximately $15 million of net expenses relating to this action of which approximately $12 million will be cash. We recorded $13.9 million of restructuring charges in the nine-month period ended February 22, 2015, relating to this action. We expect this action to be completed in fiscal 2017.

During the nine-month period ended February 28, 2016, we paid $116.2 million in cash relating to restructuring initiatives.

In addition to restructuring charges, we expect to incur approximately $111 million of additional project-related costs, which will be recorded in cost of sales, all of which will be cash. We recorded project-related costs in cost of sales of $10.1 million in the third quarter of fiscal 2016 and $39.4 million in the nine-month period ended February 28, 2016.

Restructuring charges and project-related costs are recorded in our Consolidated Statements of Earnings as follows:

		Quarter Ended				Nine-MonthPeriod Ended
In Millions		Feb. 28, 2016		Feb. 22, 2015		Feb. 28, 2016		Feb. 22, 2015
Cost of sales	$	17.3	$	21.9	$	60.9	$	40.5
Restructuring, impairment, and other exit costs		16.9		49.3		138.3		277.9
Total restructuring charges		34.2		71.2		199.2		318.4
Project-related costs classified in cost of sales	$	10.1	$	2.8	$	39.4	$	3.5

The roll forward of our restructuring and other exit cost reserves, included in other current liabilities, is as follows:

In Millions		Severance		Contract Termination		OtherExit Costs		Total
Reserve balance as of May 31, 2015	$	118.6	$	0.6	$	1.6	$	120.8
Fiscal 2016 charges, including foreign currency translation		69.1		1.5		4.3		74.9
Utilized in fiscal 2016		(91.9)		(0.7)		(4.5)		(97.1)
Reserve balance as of Feb. 28, 2016	$	95.8	$	1.4	$	1.4	$	98.6

The charges recognized in the roll forward of our reserves for restructuring and other exit costs do not include items charged directly to expense (e.g., asset impairment charges, the gain or loss on the sale of restructured assets, and the write-off of spare parts) and other periodic exit costs recognized as incurred, as those items are not reflected in our restructuring and other exit cost reserves on our Consolidated Balance Sheets.