Restructuring and Related Charges

3 Months Ended

Dec. 28, 2024

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND RELATED CHARGES

Network Optimization Plan

In the first quarter of fiscal 2025, the Company initiated a network optimization plan to optimize our global operations. We are reporting on actions approved through the end of the first quarter of fiscal 2025, including the estimated amounts for each major category of costs, as we are currently unable to make an estimate of the cost of the entire network optimization plan. As of December 28, 2024, we expect to incur $93 million of charges related to actions approved to date, which include an estimated $39 million of cash charges and $54 million of non-cash charges. We recognized charges of $73 million in the first quarter of fiscal 2025, which primarily included the closure of two facilities in the Prepared Foods segment, a non-harvesting facility closure in the Beef segment and asset write-offs in the Chicken segment and International/Other. These charges included $29 million that have resulted or will result in cash outflows and $44 million of non-cash. We expect to incur costs related to the network optimization plan over a multi-year period.

The following table reflects pretax expenses related to the network optimization plan in the first quarter of fiscal 2025 (in millions):


	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Cost of Sales:
Severance and related costs	$	5	$	—	$	2	$	2	$	—	$	9
Accelerated depreciation	23		—		—		—		—		23
Asset write-offs	3		—		7		23		5		38
Other	1		—		—		—		—		1
Total Cost of Sales	$	32	$	—	$	9	$	25	$	5	$	71

Selling, General and Administrative:
Severance and related costs	—		—		2		—		—		2

Total Selling, General and Administrative	$	—	$	—	$	2	$	—	$	—	$	2

Total	$	32	$	—	$	11	$	25	$	5	$	73

As of December 28, 2024 there was $36 million of network optimization plan liability.

Plant Closures and Disposals

During the first quarter of fiscal 2024, to optimize asset utilization, the Company approved the closure of two case ready value-added plants in our Beef segment located in Columbia, South Carolina and Jacksonville, Florida. 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 and disposals, 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. Included in the results for the first three months of fiscal 2024 are $6 million of charges that have resulted or will result in cash outflows and $69 million of non-cash charges.

The following table reflects our liability related to plant closures as of December 28, 2024 (in millions):


	Balance at September 28, 2024		Plant Closure Charges		Payments		Balance at December 28, 2024
Contract termination	$	98	$	—	$	(8)	$	90
Severance and retention	5		—		(3)		2
Total	$	103	$	—	$	(11)	$	92

During the first quarter of fiscal 2024, we experienced a fire at a production facility in the Netherlands which is included in International/Other for segment presentation, and subsequently approved the sale of the facility. For the first quarter of fiscal 2024, these charges totaled $26 million, primarily related to property, plant and equipment impairments, inventory write-offs and clean-up costs. The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and, for the first three months of fiscal 2024, included $2 million of charges that resulted in cash outflows and $24 million of non-cash charges.

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.