RESTRUCTURING, IMPAIRMENT, AND OTHER EXIT COSTS

9 Months Ended

Feb. 24, 2019

Restructuring, Impairment, and Other Exit Costs [Abstract]

Restructuring, Impairment, and Other Exit Costs

(3) Restructuring, Impairment, and Other Exit Costs

		Quarter Ended				Nine-Month Period Ended
In Millions		Feb. 24, 2019		Feb. 25, 2018		Feb. 24, 2019		Feb. 25, 2018
Asset impairments	$	1.2	$	-	$	207.0	$	-
Targeted actions in global supply chain		58.8		-		58.8		-
Charges associated with restructuring actions previously announced		(0.2)		7.6		2.2		27.3
Total restructuring and impairment costs		59.8		7.6		268.0		27.3

In the third quarter of fiscal 2019, we approved restructuring actions to drive efficiencies in targeted areas of our global supply chain.  In our North American Retail segment, we approved actions at certain facilities to consolidate production and optimize our labor and manufacturing platforms. In connection with these actions we will exit our Carson, California yogurt manufacturing facility.  We expect to incur approximately $105 million of restructuring charges related to these actions, including $13 million of severance expense and $92 million of other costs, primarily asset write-offs. We also expect to incur approximately $2 million of project-related costs. We recorded $9.3 million of severance and $37.3 million of other costs in the third quarter of fiscal 2019. Additionally, we approved targeted systems and process optimization actions in our Europe & Australia segment and expect to incur approximately $20 million of restructuring charges, including $12 million of severance expense and $8 million of other costs. We recorded $11.8 million of severance and $0.4 million of other costs in the third quarter of fiscal 2019.

Certain of these global supply chain actions are subject to union negotiations and works counsel consultations, where required.  We expect to spend approximately $30 million of cash related to these actions and spent $0.3 million in the third quarter of fiscal 2019.  We expect these actions to be completed by the end of fiscal 2022. 

We paid $0.3 million in cash in the nine-month period ended February 24, 2019, for project-related costs compared to $8.0 million in the same period of fiscal 2018.

In the second quarter of fiscal 2019, we recorded $192.6 million of charges related to the impairment of our Progresso, Food Should Taste Good, and Mountain High brand intangible assets in restructuring, impairment, and other exit costs. Please see Note 4 for additional information.

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

		Quarter Ended				Nine-Month Period Ended
In Millions		Feb. 24, 2019		Feb. 25, 2018		Feb. 24, 2019		Feb. 25, 2018
Restructuring, impairment, and other exit costs	$	59.7	$	7.5	$	267.7	$	14.3
Cost of sales		0.1		0.1		0.3		13.0
Total restructuring and impairment charges		59.8		7.6		268.0		27.3
Project-related costs classified in cost of sales	$	0.1	$	3.0	$	1.3	$	8.4

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 27, 2018	$	66.0	$	0.1	$	0.7	$	66.8
Fiscal 2019 charges, including foreign currency translation		11.4		1.2		2.1		14.7
Utilized in fiscal 2019		(31.2)		(1.3)		(1.9)		(34.4)
Reserve balance as of Feb. 24, 2019	$	46.2	$	-	$	0.9	$	47.1

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 are recognized as incurred, as those items are not reflected in our restructuring and other exit cost reserves on our Consolidated Balance Sheets.