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Restructuring and Related Charges | 6 Months Ended
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Apr. 01, 2023
Restructuring and Related Activities [Abstract] |
Restructuring and Related Charges | RESTRUCTURING AND RELATED CHARGES 2022 Program In the fourth quarter of fiscal 2022, the Company approved a restructuring program (the “2022 Program”), which is expected to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies. In conjunction with the 2022 Program, the Company is bringing together all its corporate team members from the Chicago, Downers Grove and Dakota Dunes area corporate locations to its world headquarters in Springdale, Arkansas, through a phased relocation which commenced in early calendar year 2023. We anticipate the 2022 Program and associated expenses will be substantially complete in our fiscal 2025. The following table reflects the total pretax anticipated expenses associated with the 2022 Program (in millions):
| Beef | Pork | Chicken | Prepared Foods | International/Other | Total |
Severance costs | $ | 20 |  | $ | 7 |  | $ | 5 |  | $ | 48 |  | $ | 10 |  | $ | 90 |  |
Relocation and related costs | 38 |  | 15 |  | 2 |  | 61 |  | 1 |  | 117 |  |
Accelerated depreciation | 6 |  | 2 |  | — |  | 12 |  | — |  | 20 |  |
Contract and lease terminations | — |  | — |  | — |  | 31 |  | — |  | 31 |  |
Professional and other fees | 3 |  | — |  | 1 |  | 7 |  | 2 |  | 13 |  |
Total 2022 Program | $ | 67 |  | $ | 24 |  | $ | 8 |  | $ | 159 |  | $ | 13 |  | $ | 271 |  |
Restructuring costs include severance expenses, and related charges include costs directly associated with the 2022 Program such as relocation, contract and lease terminations, professional fees and accelerated depreciation resulting from the closure of facilities. We anticipate that $48 million and $223 million of the total pretax anticipated expense will be recorded in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the table above are $241 million of charges that have resulted or will result in cash outflows and $30 million in non-cash charges. The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the second quarter of fiscal 2023 by reportable segment (in millions):
| Beef | Pork | Chicken | Prepared Foods | International/Other | Total |
Severance costs | $ | — |  | $ | — |  | $ | (1) |  | $ | 2 |  | $ | 1 |  | $ | 2 |  |
Relocation and related costs | 6 |  | 1 |  | 1 |  | 5 |  | — |  | 13 |  |
Accelerated depreciation | 1 |  | 1 |  | — |  | 2 |  | — |  | 4 |  |
Contract and lease terminations | — |  | — |  | — |  | — |  | — |  | — |  |
Professional and other fees | 1 |  | — |  | — |  | 2 |  | — |  | 3 |  |
Total | $ | 8 |  | $ | 2 |  | $ | — |  | $ | 11 |  | $ | 1 |  | $ | 22 |  |
For the second quarter of fiscal 2023, we recorded restructuring and related charges of $26 million in Selling, General and Administrative and a reduction of $4 million in Cost of Sales in our Consolidated Condensed Statements of Income. Included in the above results are $18 million of charges that have resulted or will result in cash outflows and $4 million in non-cash charges. The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first six months of fiscal 2023 by reportable segment (in millions):
| Beef | Pork | Chicken | Prepared Foods | International/Other | Total |
Severance costs | $ | 2 |  | $ | 1 |  | $ | (1) |  | $ | 6 |  | $ | 6 |  | $ | 14 |  |
Relocation and related costs | 7 |  | 2 |  | 2 |  | 6 |  | — |  | 17 |  |
Accelerated depreciation | 3 |  | 1 |  | — |  | 6 |  | — |  | 10 |  |
Contract and lease terminations | — |  | — |  | — |  | (2) |  | — |  | (2) |  |
Professional and other fees | 1 |  | — |  | — |  | 3 |  | — |  | 4 |  |
Total | $ | 13 |  | $ | 4 |  | $ | 1 |  | $ | 19 |  | $ | 6 |  | $ | 43 |  |
For the first six months of fiscal 2023, we recorded restructuring and related charges of $4 million and $39 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $35 million of charges that have resulted or will result in cash outflows and $8 million in non-cash charges. The following table reflects the pretax 2022 Program charges to date by reportable segment (in millions):
| Beef | Pork | Chicken | Prepared Foods | International/Other | Total |
Severance costs | $ | 18 |  | $ | 6 |  | $ | 5 |  | $ | 42 |  | $ | 9 |  | $ | 80 |  |
Relocation and related costs | 7 |  | 2 |  | 2 |  | 6 |  | — |  | 17 |  |
Accelerated depreciation | 3 |  | 1 |  | — |  | 6 |  | — |  | 10 |  |
Contract and lease terminations | — |  | — |  | — |  | (2) |  | — |  | (2) |  |
Professional and other fees | 1 |  | — |  | — |  | 3 |  | — |  | 4 |  |
Total | $ | 29 |  | $ | 9 |  | $ | 7 |  | $ | 55 |  | $ | 9 |  | $ | 109 |  |
As of the second quarter of fiscal 2023, we recorded restructuring and related charges to date of $22 million and $87 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $101 million of charges to date that have resulted or will result in cash outflows and $8 million in non-cash charges to date. The following table reflects our liability related to the 2022 Program, which was recognized in other current liabilities in our Consolidated Condensed Balance sheet as of April 1, 2023 (in millions):
| Balance at October 1, 2022 | Restructuring Expense | Payments | Changes in Estimates | Balance at April 1, 2023 |
Severance costs | $ | 66 |  | $ | 18 |  | $ | 7 |  | $ | (4) |  | $ | 73 |  |
Relocation and related costs | — |  | 17 |  | 13 |  | — |  | 4 |  |
Professional and other fees | — |  | 4 |  | 1 |  | — |  | 3 |  |
Total | $ | 66 |  | $ | 39 |  | $ | 21 |  | $ | (4) |  | $ | 80 |  |
As the Company continues to evaluate its business strategies and long-term growth targets, additional restructuring activities may occur. Plant Closures In the second quarter of fiscal 2023, in order to further optimize our network to reach full capacity in our facilities, management approved and communicated the planned closure of two of the Company's Chicken facilities in Glen Allen, Virginia and Van Buren, Arkansas. As a result, we recorded $92 million in closure charges, primarily related to grower contract terminations, accelerated depreciation, and severance, retention and related costs. The facilities are expected to cease operations in the third quarter of fiscal 2023. The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI https://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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