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Restructuring | 12 Months Ended
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Dec. 29, 2024
Restructuring and Related Activities [Abstract] |
Restructuring | RESTRUCTURING In May 2022, we announced a decision to close our Vernon, California processing facility, exit farm operations in Arizona and California and reduce our sow herd in Utah. The decision to permanently close our Vernon facility was based on increasingly difficult business conditions in California, where high taxes, high utility costs and a challenging regulatory environment negatively impact our ability to operate efficiently and profitably. In December 2023, we made a decision to terminate a number of third-party hog grower contracts and close several company-owned nursery farms in Utah as a result of the Vernon facility closure in early fiscal year 2023. Additionally, we have taken a number of actions to further restructure and optimize the size of our hog production operations, including: •In May 2023, we made a decision to cease operations on a number of sow farms in Missouri. The decision was driven by persistent livestock disease issues, underperforming operations and shifting industry supply and demand dynamics. •In fiscal years 2023 and 2024, we terminated certain agreements with underperforming contract farmers and closed certain farms in the eastern U.S. •On December 27, 2024, we became a member of a North Carolina-based company, Murphy Family Farms, by contributing $3 million in cash in exchange for a 25% minority interest. We additionally sold approximately 150,000 sows and related inventories located on company-owned and contract farms in North Carolina to Murphy Family Farms and recorded a gain of $6 million on the sale. Subsequent to the end of our fiscal year 2024, on December 30, 2024, we sold the commercial hog inventories associated with such sows to Murphy Family Farms. Murphy Family Farms is now a hog supplier to us and will supply approximately 3.2 million hogs annually. We will supply animal feed and other supplies and provide certain support services to Murphy Family Farms. •On February 24, 2025, we became a member of a North Carolina-based company, VisionAg Hog Production, LLC (“VisionAg”), by contributing $450,000 in cash in exchange for a 9% minority interest. We additionally sold approximately 28,000 sows and the associated commercial hog inventories located on certain company-owned and contract farms in North Carolina to VisionAg. VisionAg is now a hog supplier to us and will supply approximately 600,000 hogs annually. In addition, we will supply animal feed and provide certain support services to VisionAg. As a result of these decisions, we incurred various exit costs and disposal charges, which have been recorded in cost of sales in our consolidated statements of income. The following table details the charges by major type of cost.
| Fiscal Year |  | Cumulative |  |
| 2024 |  | 2023 |  | 2022 |  |
| (in millions)
Accelerated depreciation (1) | $ | 3 |  |  | $ | 85 |  |  | $ | 83 |  |  | $ | 171 |  |  |
Contract termination costs | 9 |  |  | 42 |  |  | 6 |  |  | 57 |  |  |
Employee termination benefits | 1 |  |  | 3 |  |  | 28 |  |  | 32 |  |  |
Loss on asset disposals (2) | 4 |  |  | 2 |  |  | 3 |  |  | 9 |  |  |
Other exit costs | 15 |  |  | 64 |  |  | 31 |  |  | 110 |  |  |
Total | $ | 31 |  |  | $ | 195 |  |  | $ | 151 |  |  | $ | 377 |  |  |
________________ (1)Accelerated depreciation includes $11 million and $20 million for AROs in fiscal years 2023 and 2022, respectively, which were recorded in connection with the decisions to close certain Company-owned farms in accordance with our general permit for concentrated animal feeding operations in the State of Utah. (2)On November 26, 2024, we sold certain hog farms in Missouri for $32 million. The transaction resulted in a loss of $4 million. The following table reconciles the beginning and ending liability balances associated with these restructuring activities.
| Balance, January 1, 2023 |  | Additions |  | Payments |  | Balance, December 31, 2023 |  | Additions |  | Payments |  | Balance, December 29, 2024
| (in millions)
Contract termination costs | $ | 5 |  |  | $ | 42 |  |  | $ | (5) |  |  | $ | 42 |  |  | $ | 13 |  |  | $ | (54) |  |  | $ | — |
Employee termination benefits | 27 |  |  | 3 |  |  | (28) |  |  | 2 |  |  | 2 |  |  | (4) |  |  | — |
Other exit costs | — |  |  | 64 |  |  | (56) |  |  | 8 |  |  | 5 |  |  | (12) |  |  | — |
Total | $ | 33 |  |  | $ | 108 |  |  | $ | (89) |  |  | $ | 52 |  |  | $ | 19 |  |  | $ | (70) |  |  | $ | 1 |
Certain of these actions impacted our biogas joint ventures for which we recognized additional costs and losses not included in the table above: •In the fourth quarter of fiscal year 2023, we incurred $14 million in costs associated with biogas assets owned by our joint venture, Monarch, in connection with the farms in Missouri that were closed in fiscal year 2023. These costs were recognized in (income) loss from equity method investments in the consolidated statement of income. •Additionally, in the fourth quarter of fiscal year 2023, certain biogas assets owned by our joint venture, Align RNG, LLC (“Align”), were impaired as a result of our decision in December 2023 to terminate hog grower contracts and close farms in Utah. As a result, we recognized our share of the impairment totaling $35 million in (income) loss from equity method investments in the consolidated income statement. Also, following the restructuring activities outlined above, we sold certain properties and recognized gains, which were not included in the table above: •In the second quarter of fiscal year 2023, we sold our Vernon, California facility for $205 million and recognized a gain of $86 million in operating gains in the consolidated statement of income. •On December 17, 2024, we sold our hog production assets in Utah, excluding the live animals, for $58 million. The transaction resulted in a gain of $32 million, which was recognized in operating gains in the consolidated statement of income in the fourth quarter of fiscal year 2024. As part of the agreement, we leased back certain farm and feed properties that we continue to operate. The lease can be cancelled during each annual term and is therefore considered short term.

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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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