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Restructuring and Related Charges | 6 Months Ended
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Mar. 29, 2025
Restructuring and Related Activities [Abstract] |
Restructuring and Related Charges | 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 and logistics network. We are reporting on actions approved through the end of the second 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. We expect to incur costs related to the network optimization plan over a multi-year period. In the second quarter of fiscal 2025, the Company approved additional actions which increased the estimated charges related to actions approved through March 29, 2025, by $23 million, which were all recognized in the second quarter of fiscal 2025 and included asset write-offs and severance and related costs in the Chicken segment and International/Other. We recognized charges of $43 million and $116 million in the second quarter and first six months of fiscal 2025, respectively, related to the network optimization plan, 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. All estimated charges related to actions approved through March 29, 2025 have been recognized and included $47 million that have resulted or will result in cash outflows and $69 million of non-cash charges for the first six months of fiscal 2025. We expect to incur additional charges in the future as additional actions are approved. The following table reflects pretax expenses related to the network optimization plan in the first six months of fiscal 2025 (in millions):
| Beef | Pork | Chicken | Prepared Foods | International/Other | Total
Cost of Sales: |  |  |  |  |  |
Severance and related costs | $ | 6 |  | $ | — |  | $ | 7 |  | $ | 2 |  | $ | 2 |  | $ | 17 |
Accelerated depreciation | 38 |  | — |  | 1 |  | — |  | — |  | 39 |
Asset write-offs | 3 |  | — |  | 22 |  | 23 |  | 9 |  | 57 |
Other | 1 |  | — |  | — |  | — |  | — |  | 1 |
Total Cost of Sales | $ | 48 |  | $ | — |  | $ | 30 |  | $ | 25 |  | $ | 11 |  | $ | 114 |
Selling, General and Administrative: |  |  |  |  |  |
Severance and related costs | — |  | — |  | 2 |  | — |  | — |  | 2 |
Total Selling, General and Administrative | $ | — |  | $ | — |  | $ | 2 |  | $ | — |  | $ | — |  | $ | 2 |
Total | $ | 48 |  | $ | — |  | $ | 32 |  | $ | 25 |  | $ | 11 |  | $ | 116 |
As of March 29, 2025, there was $39 million of network optimization plan liability, net of $3 million of payments during fiscal 2025. In April 2025, following a strategic review of our domestic logistics and storage network, the Company approved a plan to execute various long-term cold storage service agreements and the sale of multiple Tyson-owned and operated distribution centers (the "Facilities"). The approval of this plan will result in the respective assets being classified as held for sale in the third quarter of fiscal 2025 with anticipated closings to occur during the second half of fiscal 2025. The carrying value of the Facilities' property, plant and equipment as of March 29, 2025 approximated $200 million. Total proceeds from the sales are estimated to be approximately $250 million to $300 million. As a part of these agreements, we will leaseback the Facilities for various periods ranging from approximately one to three years. Additionally, we anticipate entering into long-term cold storage service agreements associated with several fully automated cold storage facilities. We expect this will reduce network complexity, streamline inventory flow, simplify processes and reduce operating expenses. We do not currently anticipate any material disposal costs. Any resulting net gain or loss will primarily impact our Chicken and Prepared Foods segments as the Facilities predominately support the operations of those segments. Plant Closures and Disposals During fiscal 2023, the Company approved the closure of six Chicken segment processing facilities and during the first half of fiscal 2024, approved the closure of two case ready value-added plants in our Beef segment and a processing facility in our Pork segment to optimize asset utilization. We shifted production to other facilities and ceased operations at these Chicken facilities throughout fiscal 2023 and the first quarter of fiscal 2024, shifted production and ceased operations at our Columbia and Jacksonville facilities during the first quarter of fiscal 2024 and shifted production and ceased operations at our Perry facility during the third quarter of fiscal 2024. As a result of the plant closures and disposals, we recorded $23 million of additional charges in the second quarter and first six months of fiscal 2025 related to contract termination costs, which will result in cash outflows, and $39 million and $114 million of charges in the second quarter and first six months of fiscal 2024, respectively, 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 six months of fiscal 2024 are $2 million of charges that have resulted or will result in cash outflows and $112 million of non-cash charges. The following table reflects our liability related to plant closures as of March 29, 2025 (in millions):
| Balance at September 28, 2024 | Plant Closure Charges | Payments | Balance at March 29, 2025
Contract termination | $ | 98 |  | $ | 23 |  | $ | (13) |  | $ | 108 |
Severance and retention | 5 |  | — |  | (4) |  | 1 |
Total | $ | 103 |  | $ | 23 |  | $ | (17) |  | $ | 109 |
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 second quarter and first six months of fiscal 2024, these charges totaled $54 million and $80 million, respectively, primarily related to property, plant and equipment impairments, severance costs, inventory write-offs and clean-up costs, partially offset by insurance proceeds. The net charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and, for the first six months of fiscal 2024, included $32 million of charges that have resulted or will result in cash outflows and $53 million of non-cash charges, offset by $5 million of insurance proceeds. 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.

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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 -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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