Restructuring, Impairment, And Other Exit Costs

12 Months Ended

May 28, 2023

Restructuring, Impairment, And Other Exit Costs [Abstract]

Restructuring, Impairment, And Other Exit Costs

NOTE 4. RESTRUCTURING, IMPAIRMENT, AND OTHER EXIT COSTS 

We view our restructuring activities as actions that help us meet our long-term growth targets and are evaluated against internal rate of

return and net present value targets. Each restructuring action normally takes one to two years to complete. At completion (or as each

major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced depreciation.

These activities result in various restructuring costs, including asset write-offs, exit charges including severance, contract termination

fees, and decommissioning and other costs. Accelerated depreciation associated with restructured assets, as used in the context of our

disclosures regarding restructuring activity, refers to the increase in depreciation expense caused by shortening the useful life or

updating the salvage value of depreciable fixed assets to coincide with the end of production under an approved restructuring plan.

Any impairment of the asset is recognized immediately in the period the plan is approved.

Restructuring charges recorded in fiscal 2023 were as follows:

Expense, in Millions

Global supply chain actions

$

36.2

Network optimization actions

6.4

Charges associated with restructuring actions previously announced

18.4

Total restructuring charges

$

61.0

In fiscal 2023, we approved restructuring actions to enhance the efficiency of our global supply chain structure. We expect to incur

approximately $

52

 million of restructuring charges and project-related costs related to these actions, of which approximately $

35

million will be cash. These charges are expected to consist of approximately $

26

 million of severance and $

26

 million of other costs,

primarily $

8

 million of asset impairment and $

11

 million of other asset write-offs. We recognized $

25.8

 million of severance and

$

10.4

 million of other costs in fiscal 2023. We expect these actions to be completed by the end of fiscal 2025.

In fiscal 2023, we approved restructuring actions in our International segment to optimize our Häagen-Dazs shops network. We expect

to incur approximately $

10

 million of restructuring charges and project-related costs related to these actions, of which approximately

$

9

 million will be cash. These charges are expected to consist of approximately $

6

 million of severance and $

4

 million of other costs.

We recognized $

5.6

 million of severance and $

0.8

 million of other costs in fiscal 2023. 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.

We paid net $

36.6

 million of cash related to restructuring actions in fiscal 2023. We paid net $

93.9

 million of cash in fiscal 2022.

Restructuring charges recorded in fiscal 2022 were as follows:

Fiscal Year

In Millions

2023

2022

2021

Restructuring, impairment, and other exit costs (recoveries)

$

56.2

$

(26.5)

$

170.4

Cost of sales

4.8

3.3

2.3

Total restructuring and impairment charges (recoveries)

61.0

(23.2)

172.7

Project-related costs classified in cost of sales

$

2.4

$

-

$

-

Expense, in Millions

International manufacturing and logistics operations

$

15.0

Net recoveries associated with restructuring actions previously announced

(38.2)

Total net restructuring recoveries

$

(23.2)

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

In Millions

Severance

Other Exit

Costs

Total

Reserve balance as of May 31, 2020

$

17.8

$

-

$

17.8

Fiscal 2021 charges, including foreign currency translation

142.3

1.6

143.9

Utilized in fiscal 2021

(12.8)

(0.1)

(12.9)

Reserve balance as of May 30, 2021

147.3

1.5

148.8

Fiscal 2022 charges, including foreign currency translation

2.2

1.2

3.4

Reserve adjustment

(34.0)

-

(34.0)

Utilized in fiscal 2022

(80.1)

(1.3)

(81.4)

Reserve balance as of May 29, 2022

35.4

1.4

36.8

Fiscal 2023 charges, including foreign currency translation

41.6

0.1

41.7

Utilized in fiscal 2023

(29.4)

(1.4)

(30.8)

Reserve balance as of May 28, 2023

$

47.6

$

0.1

$

47.7

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.

Restructuring charges recorded in fiscal 2021 were as follows:

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

Expense, in Millions

Global organizational structure and resource alignment

$

157.3

International route-to-market and supply chain optimization

13.0

Charges associated with restructuring actions previously announced

2.4

Total restructuring charges

$

172.7