Restructuring, Impairment, and Other Exit Costs

9 Months Ended

Feb. 27, 2022

Restructuring, Impairment, and Other Exit Costs [Abstract]

Restructuring, Impairment, and Other Exit Costs

(3) Restructuring, Impairment, and Other Exit Costs

Restructuring charges were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
International manufacturing and logistics operations	$	1.7	$	-	$	14.3	$	-
Charges (recoveries) associated with restructuring actions previously announced		7.6		11.7		(6.4)		13.6
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

In the third quarter of fiscal 2022, we did not undertake any new restructuring actions. We recorded $1.7 million of restructuring charges in the third quarter of fiscal 2022 and $14.3 million of restructuring charges in the nine-month period ended February 27, 2022, related to the restructuring actions in the International segment to drive efficiencies in manufacturing and logistics operations approved in the second quarter of fiscal 2022. We recorded $7.6 million of restructuring charges in the third quarter of fiscal 2022 and a $6.4 million net recovery of restructuring charges in the nine-month period ended February 27, 2022, related to restructuring actions

previously announced. We recorded $11.7 million of restructuring charges in the third quarter of fiscal 2021 and $13.6 million of restructuring charges in the nine-month period ended February 28, 2021, related to restructuring actions previously announced. The charges associated with restructuring actions previously announced primarily related to actions designed to better align our organizational structure and resources with strategic initiatives and drive efficiencies in manufacturing and logistics operations. We expect these actions to be completed by the end of fiscal 2024. Certain actions are subject to union negotiations and works counsel consultations, where required.

In the third quarter of fiscal 2022, we decreased the estimate of expected restructuring charges that we expect to incur related to actions designed to better align our organizational structure and resources with strategic initiatives to approximately $150 million to $160 million, of which approximately $120 million to $130 million will be cash. These charges are expected to consist primarily of severance and other benefits costs and other charges, including consulting and professional fees, contract termination costs, and fixed asset write-offs.

We paid net $70.4 million of cash in the nine-month period ended February 27, 2022, related to restructuring actions previously announced. We paid net $7.9 million of cash in the same period of fiscal 2021.

Restructuring charges are recorded in our Consolidated Statements of Earnings as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Restructuring, impairment, and other exit costs	$	7.1	$	11.0	$	5.1	$	11.9
Cost of sales		2.2		0.7		2.8		1.7
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

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

In Millions	Total
Reserve balance as of May 30, 2021	$	148.8
Fiscal 2022 charges, including foreign currency translation		1.4
Utilized in fiscal 2022		(61.4)
Reserve balance as of Feb. 27, 2022	$	88.8

The reserve balance primarily consists of expected severance payments associated with restructuring actions.

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.