| Restructuring, Transformation, Impairment, and Other Exit Costs |
NOTE 4. RESTRUCTURING, TRANSFORMATION, IMPAIRMENT, AND OTHER EXIT COSTS INTANGIBLE ASSET IMPAIRMENTS In fiscal 2024, we recorded a $ 117.1 million non-cash goodwill impairment charge related to our Latin America reporting unit. Please see Note 6 for additional information. In fiscal 2024, we recorded $ 103.1 million of non-cash impairment charges related to our , , and EPIC intangible assets. Please see Note 6 for additional information. RESTRUCTURING AND TRANSFORMATION INITIATIVES We view our restructuring and transformation 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 project 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 and transformation 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 project plan. Any impairment of the asset is recognized immediately in the period the plan is approved. Restructuring and transformation charges recorded in fiscal 2025 were as follows: In Millions Global transformation initiative $ 70.1 Charges associated with restructuring actions previously announced 17.4 Total restructuring and transformation charges $ 87.5 In fiscal 2025, we approved a multi-year global transformation initiative to drive increased productivity by enhancing end-to-end business processes, enabled by targeted organizational actions. We expect to incur approximately $ 130 million of transformation charges related to these actions, of which approximately $ 120 million will be cash. These charges are expected to consist primarily of severance and other benefit costs, as well as other charges, including consulting and professional fees. We recognized $ 68.7 severance and other benefit costs and $ 1.4 million of other costs in fiscal 2025 related to these actions. We expect these actions to be completed by the end of fiscal 2028. In fiscal 2025, we increased the estimate of restructuring charges that we expect to incur related to our previously announced actions in the International segment to optimize our Häagen-Dazs shops network. As a result, we expect to incur approximately $ 24 incremental restructuring charges related to these actions, of which, approximately $ 12 million will be cash. These incremental charges are expected to consist of approximately $ 9 million of asset write-offs, $ 7 million of severance, and $ 8 We expect to incur total restructuring charges of approximately $ 32 million, of which approximately $ 18 million will be cash related to these actions. We expect these actions to be completed by the end of fiscal 2026. Certain actions are subject to union negotiations and works counsel consultations, where required. 13.2 million of cash related to restructuring and transformation actions in fiscal 2025. We paid net $ 35.5 in fiscal 2024. Restructuring charges recorded in fiscal 2024 were as follows: Fiscal Year In Millions 2025 2024 2023 Restructuring, transformation, impairment, and other exit costs $ 78.3 $ 241.4 $ 56.2 Cost of sales 9.2 17.6 4.8 Total restructuring, transformation, and impairment charges 87.5 259.0 61.0 Restructuring initiative project-related costs classified in cost of sales $ 0.5 $ 2.0 $ 2.4 In Millions Commercial strategy actions $ 18.6 Charges associated with restructuring actions previously announced 20.2 Total restructuring charges $ 38.8 The roll forward of our restructuring, transformation, 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 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 Fiscal 2024 charges, including foreign currency translation - 0.1 0.1 Utilized in fiscal 2024 (32.8) (0.2) (33.0) Reserve balance as of May 26, 2024 14.8 - 14.8 Fiscal 2025 charges, including foreign currency translation 70.1 - 70.1 Utilized in fiscal 2025 (7.8) - (7.8) Reserve balance as of May 25, 2025 $ 77.1 $ - $ 77.1 The charges recognized in the roll forward of our reserves for restructuring, transformation, 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, transformation, and other exit cost reserves on our Consolidated Balance Sheets. Restructuring charges recorded in fiscal 2023 were as follows: Restructuring, transformation, and impairment charges and restructuring initiative project-related costs are classified in our Consolidated Statements of Earnings as follows: 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 |