RESTRUCTURING INITIATIVES

9 Months Ended

Feb. 25, 2018

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. 25, 2018											Feb. 26, 2017
In Millions		Severance		Asset Write-offs		Accelerated Depreciation		Other		Total		Severance		Asset Write-offs		Accelerated Depreciation		Other		Total
Global reorganization	$	-	$	-	$	-	$	-	$	-	$	67.4	$	-	$	-	$	5.7	$	73.1
Closure of Melbourne, Australia plant		-		-		0.1		3.0		3.1		-		-		5.6		0.1		5.7
Restructuring of certain international product lines		-		-		-		-		-		0.6		1.6		-		0.1		2.3
Closure of Vineland, New Jersey plant		-		-		-		0.2		0.2		-		0.4		7.1		0.2		7.7
Project Compass		-		-		-		-		-		(1.4)		-		-		-		(1.4)
Project Century		-		0.7		-		2.9		3.6		0.2		1.7		3.4		1.8		7.1
Combination of certain operational facilities		0.7		-		-		-		0.7		(0.5)		-		-		-		(0.5)
Total	$	0.7	$	0.7	$	0.1	$	6.1	$	7.6	$	66.3	$	3.7	$	16.1	$	7.9	$	94.0

	Nine-Month Period Ended										Nine-Month Period Ended
	Feb. 25, 2018										Feb. 26, 2017
In Millions		Severance		Asset Write-offs		Accelerated Depreciation		Other		Total		Severance		Asset Write-offs		Accelerated Depreciation		Other		Total
Global reorganization	$	0.6	$	0.6	$	-	$	0.2	$	1.4	$	67.4	$	-	$	-	$	5.7	$	73.1
Closure of Melbourne, Australia plant		0.6		-		2.2		5.2		8.0		11.3		-		6.3		0.1		17.7
Restructuring of certain international product lines		-		-		-		-		-		7.0		37.4		(0.3)		1.5		45.6
Closure of Vineland, New Jersey plant		(2.2)		8.9		10.6		(5.0)		12.3		12.3		5.4		16.1		1.8		35.6
Project Compass		(0.2)		-		-		-		(0.2)		(1.4)		-		0.2		0.8		(0.4)
Project Century		0.1		6.4		-		(1.4)		5.1		0.7		9.8		18.0		8.7		37.2
Combination of certain operational facilities		0.7		-		-		-		0.7		(0.5)		-		-		-		(0.5)
Total	$	(0.4)	$	15.9	$	12.8	$	(1.0)	$	27.3	$	96.8	$	52.6	$	40.3	$	18.6	$	208.3

In the third quarter of fiscal 2017, we approved restructuring actions designed to better align our organizational structure with our strategic initiatives. This action will affect approximately 600 positions and we expect to incur approximately $76 million of net expenses relating to these actions, all of which will be cash. We have recorded $1.4 million of restructuring charges in the nine-month period ended February 25, 2018 relating to these actions. We recorded $73.1 million of restructuring charges in the third quarter of fiscal 2017. We expect these actions to be completed by the end of fiscal 2018.

In the second quarter of fiscal 2017, we notified the employees and their representatives of our decision to close our pasta manufacturing facility in Melbourne, Australia in our Europe & Australia segment to improve our margin structure. This action will affect approximately 350 positions, and we expect to incur approximately $34 million of net expenses relating to this action, of which approximately $3 million will be cash. We recorded $3.1 million of restructuring charges in the third quarter of fiscal 2018 and $8.0 million in the nine-month period ended February 25, 2018 relating to this action. We recorded $5.7 million of restructuring charges in the third quarter of fiscal 2017 and $17.7 million in the nine-month period ended February 26, 2017. We expect this action to be completed by the end of fiscal 2019.

In the first quarter of fiscal 2017, we announced a plan to restructure certain product lines in our Asia & Latin America segment. To eliminate excess capacity, we closed our snacks manufacturing facility in Marília, Brazil and ceased production operations for meals and snacks at our facility in São Bernardo do Campo, Brazil. We also ceased production of certain underperforming snack products at our facility in Nanjing, China. These and other actions affected approximately 420 positions in our Brazilian operations and approximately 440 positions in our greater China operations. We expect to incur approximately $42 million of net expenses related to these actions, of which approximately $6 million will be cash. There have been no restructuring charges in fiscal 2018 relating to these actions. We recorded $2.3 million of restructuring charges in the third quarter of fiscal 2017 and $45.6 million in the nine-month period ended February 26, 2017. We expect these actions to be completed by the end of fiscal 2019.

In the first quarter of fiscal 2017, we approved a plan to close our Vineland, New Jersey facility to eliminate excess soup capacity in our North America Retail segment. This action affected 380 positions, and we expect to incur approximately $54 million of net expenses relating to this action, of which approximately $11 million will be cash. We recorded $0.2 million of restructuring charges in the third quarter of fiscal 2018 and $12.3 million in the nine-month period ended February 25, 2018. We recorded $7.7 million of restructuring charges in the third quarter of fiscal 2017 and $35.6 million in the nine-month period ended February 26, 2017. We expect this action to be completed by the end of fiscal 2018.

During the nine-month period ended February 25, 2018, we paid $39.6 million in cash relating to restructuring initiatives and $67.1 million in the nine-month period ended February 26, 2017.

In addition to restructuring charges, we recorded $3 million of project-related costs in cost of sales in the third quarter of fiscal 2018 and $8.4 million in the nine-month period ended February 25, 2018. We paid $8.0 million in cash in the nine-month period ended February 25, 2018 for project-related costs and $40.2 million in the nine-month period ended February 26, 2017.

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

		Quarter Ended				Nine-Month Period Ended
In Millions		Feb. 25, 2018		Feb. 26, 2017		Feb. 25, 2018		Feb. 26, 2017
Cost of sales	$	0.1	$	16.4	$	13.0	$	42.8
Restructuring, impairment, and other exit costs		7.5		77.6		14.3		165.5
Total restructuring charges		7.6		94.0		27.3		208.3
Project-related costs classified in cost of sales	$	3.0	$	11.5	$	8.4	$	36.4

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 28, 2017	$	81.8	$	0.7	$	2.5	$	85.0
Fiscal 2018 charges, including foreign currency translation		(1.8)		0.2		(1.1)		(2.7)
Utilized in fiscal 2018		(43.0)		(0.8)		(0.9)		(44.7)
Reserve balance as of Feb. 25, 2018	$	37.0	$	0.1	$	0.5	$	37.6

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, accelerated depreciation, 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.