Restructuring and Related Charges

3 Months Ended

Dec. 30, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND RELATED CHARGES

2022 Program

The Company approved a restructuring program in fiscal 2022 (the “2022 Program”) to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies. 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	$	25	$	8	$	24	$	54	$	19	$	130
Relocation and related costs	23		7		4		22		1		57
Accelerated depreciation	5		2		—		12		—		19
Contract and lease terminations	—		—		—		24		—		24
Professional and other fees	2		1		—		3		2		8
Total 2022 Program	$	55	$	18	$	28	$	115	$	22	$	238

Restructuring costs include severance expenses and related charges 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 $53 million and $185 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 $216 million of charges that have resulted or will result in cash outflows and $22 million in non-cash charges.

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first quarter of fiscal 2024 by reportable segment (in millions):



	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	1	$	1	$	4	$	2	$	—	$	8
Relocation and related costs	3		—		—		3		—		6
Accelerated depreciation	—		—		—		—		—		—
Contract and lease terminations	—		—		—		16		—		16
Professional and other fees	—		—		—		—		—		—
Total	$	4	$	1	$	4	$	21	$	—	$	30

For the first quarter of fiscal 2024, we recorded restructuring and related charges of $3 million and $27 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $20 million of charges that have resulted or will result in cash outflows and $10 million in non-cash charges.

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first quarter of fiscal 2023 by reportable segment (in millions):


	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	2	$	1	$	—	$	4	$	5	$	12
Relocation and related costs	1		1		1		1		—		4
Accelerated depreciation	2		—		—		4		—		6
Contract and lease terminations	—		—		—		(2)		—		(2)
Professional and other fees	—		—		—		1		—		1
Total	$	5	$	2	$	1	$	8	$	5	$	21

For the first quarter of fiscal 2023, we recorded restructuring and related charges associated with the 2022 Program of $8 million and $13 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $17 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 2022 Program charges to date by reportable segment (in millions):



	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	25	$	8	$	24	$	54	$	18	$	129
Relocation and related costs	21		6		2		19		—		48
Accelerated depreciation	5		2		—		12		—		19
Contract and lease terminations	—		—		—		18		—		18
Professional and other fees	2		1		—		3		—		6
Total	$	53	$	17	$	26	$	106	$	18	$	220

Through the first quarter of fiscal 2024, we recorded restructuring and related charges to date of $50 million and $170 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $194 million of charges to date that have resulted or will result in cash outflows and $26 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 December 30, 2023 (in millions):



	Balance at September 30, 2023		Restructuring Expense		Payments		Changes in Estimates		Balance at December 30, 2023
Severance costs	$	58	$	10	$	(20)	$	(2)	$	46
Relocation and related costs	5		6		(5)		—		6
Contract and lease termination	—		6		(6)		—		—
Professional and other fees	2		—		—		—		2
Total	$	65	$	22	$	(31)	$	(2)	$	54

As the Company continues to evaluate its business strategies and long-term growth targets, additional restructuring activities may occur.

Plant Closures

During fiscal 2023, as part of a strategic review of assets, the Company approved the closure of six Chicken segment processing facilities located in Glen Allen, Virginia; Van Buren, Arkansas; Corydon, Indiana; Dexter, Missouri; Noel, Missouri; and North Little Rock, Arkansas, to optimize asset utilization. As of December 30, 2023, we have shifted production to other facilities and ceased operations at our Glen Allen, Van Buren, Dexter, Noel and North Little Rock facilities, and expect to shift production and cease operations at Corydon during the third quarter of fiscal 2024. Additionally, during the first quarter of fiscal 2024, the Company approved the closure of two case ready value-added plants in our Beef segment located in Columbia, South Carolina and Jacksonville, Florida, to optimize asset utilization. We shifted production to other facilities and ceased operations at both plants during the first quarter of fiscal 2024.

As a result of the plant closures, we recorded $75 million of charges in the first quarter of fiscal 2024, primarily related to accelerated depreciation, severance, retention and related costs. The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and included $6 million of charges that have resulted or will result in cash outflows and $69 million in non-cash charges. We did not incur plant closure charges in the first quarter of fiscal 2023.

The following table reflects our liability related to plant closures as of December 30, 2023 (in millions):


	Balance at September 30, 2023		Plant Closure Charges		Payments		Balance at December 30, 2023
Contract termination	$	151	$	5	$	(29)	$	127
Severance and retention	14		1		(5)		10
Total	$	165	$	6	$	(34)	$	137

We continue to strategically evaluate optimization of such items as network capacity, manufacturing efficiencies and business technology. If we have a significant change in strategies, outlook, or a manner in which we plan to use these assets, we may experience future charges.