3 unchanged sentences
(In millions, except per share data)
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Sales $ 12,933 $ 10,460
25 unchanged sentences
(In millions)
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Net Income $ 1,126 $ 472
12 unchanged sentences
(In millions, except share and per share data)
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Current Assets:
26 unchanged sentences
Accumulated other comprehensive gain (loss) ( 172 ) ( 172 )
−Removed: Treasury stock, at cost – 83 million shares at July 3, 2021 and October 3, 2020 ( 4,128 ) ( 4,145 )
+Added: Treasury stock, at cost – 85 million shares at January 1, 2022 and 83 million shares at October 2, 2021 ( 4,394 ) ( 4,138 )
Total Tyson Shareholders’ Equity 18,403 17,723
6 unchanged sentences
(In millions)
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Shares Amount Shares Amount Shares Amount Shares Amount
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
+Added: Shares Amount Shares Amount
Class A Common Stock:
5 unchanged sentences
Stock-based compensation ( 15 ) ( 22 )
−Removed: Other ( 5 ) — ( 5 ) —
Balance at end of period 4,471 4,411
17 unchanged sentences
Net income attributable to noncontrolling interests 5 5
−Removed: Other ( 11 ) 1 ( 10 ) ( 5 )
+Added: Distributions to noncontrolling interest — ( 2 )
Total Equity Attributable to Noncontrolling Interests $ 139 $ 143
4 unchanged sentences
(In millions)
−Removed: Nine Months Ended
−Removed: July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Cash Flows From Operating Activities:
9 unchanged sentences
Proceeds from sale of marketable securities 7 15
−Removed: Proceeds from sale of business — 29
−Removed: Acquisition of equity investments ( 44 ) ( 183 )
Other, net ( 51 ) 29
3 unchanged sentences
Payments on debt ( 43 ) ( 29 )
−Removed: Borrowings on revolving credit facility — 1,210
−Removed: Payments on revolving credit facility — ( 1,280 )
−Removed: Proceeds from issuance of commercial paper — 14,318
−Removed: Repayments of commercial paper — ( 15,317 )
Purchases of Tyson Class A common stock ( 348 ) ( 17 )
17 unchanged sentences
Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations of the United States Securities and Exchange Commission (the “SEC”).
−Removed: Although we believe the disclosures contained herein are adequate to make the information presented not misleading, these consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 3, 2020, as amended by Amendment No.
−Removed: 1 on Form 10-K/A filed with the SEC on February 11, 2021 (the “10-K/A”).
+Added: Although we believe the disclosures contained herein are adequate to make the information presented not misleading, these consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021.
Preparation of consolidated condensed financial statements requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
−Removed: We believe the accompanying consolidated condensed financial statements contain all adjustments, which are of a normal recurring nature, necessary to state fairly our financial position as of July 3, 2021, and the results of operations for the three and nine months ended July 3, 2021, and June 27, 2020.
+Added: We believe the accompanying consolidated condensed financial statements contain all adjustments, which are of a normal recurring nature, necessary to state fairly our financial position as of January 1, 2022, and the results of operations for the three months ended January 1, 2022, and January 2, 2021.
Results of operations and cash flows for the periods presented are not necessarily indicative of results to be expected for the full year.
9 unchanged sentences
Consequently, this may subject us to future risk of material goodwill, intangible and long-lived asset impairments, increased reserves for uncollectible accounts, and adjustments for inventory and market volatility for items subject to fair value measurements such as derivatives and investments.
−Removed: Revision of Previously Issued Unaudited Consolidated Condensed Financial Statements
−Removed: As previously disclosed in the 10-K/A, during the first quarter of fiscal 2021, the Company discovered information that led to an internal investigation relating to one of its cattle suppliers and determined that this supplier made misrepresentations regarding the number of cattle the supplier purchased on behalf of the Company’s Beef segment.
−Removed: Based upon its investigation, the Company determined that the misappropriation of Company funds by the supplier caused the Company to overstate live cattle inventory for fiscal years and interim periods from 2017 through 2020.
−Removed: The resulting loss to the Company and related inventory misstatement was isolated to the Beef segment and was attributable solely to this cattle supplier.
−Removed: Although the Company evaluated the materiality of the misstatements and concluded that the misstatements did not have a material impact on the previously issued annual or interim financial statements, the Company revised its previously issued 2020, 2019 and 2018 annual financial statements to correct for such misstatements as set forth in the 10-K/A.
−Removed: In connection with the filing of this Quarterly Report on Form 10-Q, the Company has revised the accompanying consolidated condensed interim financial statements as of and for the three and nine months ended June 27, 2020 to correct for the impact of the misstatements.
−Removed: The applicable notes to the accompanying financials have also been corrected to reflect the impact of the revisions of the previously filed consolidated condensed interim financial statements.
−Removed: The following tables represent revisions to our consolidated condensed financial information for the periods ended June 27, 2020:
−Removed: Third Quarter in millions, except per share data
−Removed: Three months ended June 27, 2020 Nine months ended June 27, 2020
−Removed: As originally reported Adjustments As revised As originally reported Adjustments As revised
−Removed: Consolidated Statements of Income:
−Removed: Selling, General and Administrative $ 538 $ 2 $ 540 $ 1,672 $ 56 $ 1,728
−Removed: Operating Income 775 ( 2 ) $ 773 2,102 ( 56 ) 2,046
−Removed: Income before Income Taxes 667 ( 2 ) $ 665 1,883 ( 56 ) 1,827
−Removed: Income Tax Expense (Benefit) 140 ( 1 ) $ 139 428 ( 15 ) 413
−Removed: Net Income 527 ( 1 ) $ 526 1,455 ( 41 ) 1,414
−Removed: Net Income Attributable to Tyson 527 ( 1 ) $ 526 1,448 ( 41 ) 1,407
−Removed: Net Income Per Share Attributable to Tyson
−Removed: Class A Basic $ 1.48 $ — $ 1.48 $ 4.07 $ ( 0.11 ) $ 3.96
−Removed: Class B Basic $ 1.33 $ — $ 1.33 $ 3.65 $ ( 0.10 ) $ 3.55
−Removed: Diluted $ 1.44 $ — $ 1.44 $ 3.96 $ ( 0.11 ) $ 3.85
−Removed: Consolidated Statements of Comprehensive Income:
−Removed: Net Income $ 527 $ ( 1 ) $ 526 $ 1,455 $ ( 41 ) $ 1,414
−Removed: Comprehensive Income 540 ( 1 ) 539 1,355 ( 41 ) 1,314
−Removed: Comprehensive Income Attributable to Tyson 540 ( 1 ) 539 1,348 ( 41 ) 1,307
−Removed: As of June 27, 2020
−Removed: As originally reported Adjustments As revised
−Removed: Consolidated Balance Sheet:
−Removed: Inventories $ 3,915 $ ( 235 ) $ 3,680
−Removed: Total Current Assets 7,699 ( 235 ) 7,464
−Removed: Total Assets 34,558 ( 235 ) 34,323
−Removed: Deferred Income Taxes 2,370 ( 62 ) 2,308
−Removed: Retained Earnings (a)
−Removed: 14,769 ( 173 ) 14,596
−Removed: Total Tyson Shareholders' Equity 14,858 ( 173 ) 14,685
−Removed: Total Shareholders' Equity 15,004 ( 173 ) 14,831
−Removed: Total Liabilities and Shareholders' Equity 34,558 ( 235 ) 34,323
−Removed: Nine months ended June 27, 2020
−Removed: As originally reported Adjustments As revised
−Removed: Consolidated Statement of Cash Flows:
−Removed: Net Income $ 1,455 $ ( 41 ) $ 1,414
−Removed: Deferred income taxes 27 ( 15 ) 12
−Removed: Net changes in operating assets and liabilities 357 56 413
−Removed: (a) The adjustment to retained earnings includes an impact of $ 132 million related to misstatements that originated prior to fiscal 2020.
+Added: There have been no material changes to the summary of certain accounting estimates and the description of the estimates and the levels of subjectivity and judgment they require found in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021.
Recently Issued Accounting Pronouncements
−Removed: In August 2020, the Financial Accounting Standards Board (“FASB”) issued guidance that simplifies the accounting for debt with conversion options, revises the criteria for applying the derivative scope exception for contracts in an entity’s own equity, and improves the consistency for the calculation of earnings per share.
−Removed: The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2021, our fiscal 2023.
−Removed: Early adoption is permitted for annual periods and interim periods within those annual periods beginning after December 15, 2020, our fiscal 2022.
−Removed: We are currently evaluating the impact this guidance will have on our consolidated financial statements.
−Removed: In March 2020, the FASB issued guidance providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued.
+Added: In March 2020, the Financial Accounting Standards Board ("FASB") issued guidance providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued.
The optional guidance, which became effective on March 12, 2020 and can be applied through December 31, 2022, has not impacted our consolidated financial statements.
The Company has various contracts that reference LIBOR and is assessing how this standard may be applied to specific contract modifications through December 31, 2022.
−Removed: In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and clarifies other general principles by adding certain requirements to Topic 740.
−Removed: The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2020, our fiscal 2022.
−Removed: Early adoption is permitted for periods for which financial statements have not yet been issued , beginning our fiscal 2020.
−Removed: An entity that elects to early ad opt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period.
−Removed: The application of the guidance requires various transition methods depending on the specific amendment.
−Removed: We are currently evaluating the impact this guidance will have on our consolidated financial statements.
Changes in Accounting Principles
−Removed: In June 2016, the FASB issued guidance that provides more decision-useful information about the expected credit losses on financial instruments and changes the loss impairment methodology.
+Added: In August 2020, the FASB issued guidance that simplifies the accounting for debt with conversion options, revises the criteria for applying the derivative scope exception for contracts in an entity’s own equity, and improves the consistency for the calculation of earnings per share.
The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2021, our fiscal 2023.
−Removed: For available-for-sale debt securities previously impaired, the amendments should be applied prospectively;
−Removed: otherwise, the modified-retrospective transition method should be applied.
−Removed: We adopted this guidance in the first quarter of fiscal 2021 using the modified retrospective transition method.
−Removed: Prior periods were not adjusted and, based on our implementation assessment, no cumulative-effect adjustment was made to the opening balance of retained earnings.
−Removed: The adoption of this standard did not have a material impact on our consolidated financial statements.
−Removed: For further description of our policy for available-for-sale debt securities, refer to Note 12:
−Removed: Fair Value Measurements.
+Added: Early adoption is permitted for annual periods and interim periods within those annual periods beginning after December 15, 2020, our fiscal 2022.
+Added: We elected to early adopt this guidance beginning in the first quarter of fiscal 2022, and it did not have an impact on our consolidated financial statements.
+Added: In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and clarifies other general principles by adding certain requirements to Topic 740.
+Added: The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2020, our fiscal 2022.
+Added: We adopted this guidance in the first quarter of fiscal 2022, and it did not have an impact on our consolidated financial statements.
ACQUISITIONS AND DISPOSITIONS
1 unchanged sentence
We are accounting for the investment under the equity method.
−Removed: In the second quarter of fiscal 2021, we initiated a plan to sell our pet treats business, which is included in our Prepared Foods segment.
−Removed: In the third quarter of fiscal 2021, we entered into a definitive agreement to sell the business for $ 1.2 billion in cash, subject to certain adjustments.
−Removed: The business had a net carrying value of approximately $ 411 million as of July 3, 2021, which included approximately $ 44 million of working capital consisting of inventory, accounts receivable and accounts payable, $ 17 million of property, plant and equipment and $ 350 million of goodwill.
+Added: We completed the sale of our pet treats business, which was included in our Prepared Foods segment, on July 6, 2021 for $ 1.2 billion, subject to certain adjustments.
+Added: As a result of the sale, we recorded a pretax gain of $ 784 million, or post tax gain of $ 510 million, which was reflected in Cost of Sales in our Consolidated Statement of Income in the fourth quarter of fiscal 2021.
+Added: The business had a net carrying value of approximately $ 411 million, which included $ 44 million of working capital consisting of inventory, accounts receivable and accounts payable, $ 17 million of property, plant and equipment and $ 350 million of goodwill.
The goodwill is not deductible for tax purposes.
−Removed: We have reclassified the assets and liabilities held for sale related to this business to Other current assets and Other current liabilities in our Consolidated Condensed Balance Sheet as of July 3, 2021.
−Removed: The transaction closed on July 6, 2021 and we anticipate recognizing a gain from the sale of this business in the fourth quarter of fiscal 2021.
The Company concluded the business was not a significant disposal and did not represent a strategic shift, and therefore was not classified as a discontinued operation for any of the periods presented.
1 unchanged sentence
Cost includes purchased raw materials, live purchase costs, growout costs (primarily feed, livestock grower pay and catch and haul costs), labor and manufacturing, and production overhead, which are related to the purchase and production of inventories.
−Removed: At July 3, 2021, the cost of inventories was determined by either the first-in, first-out (“FIFO”) method or the weighted-average method, which is consistent with the methods used at October 3, 2020.
+Added: At January 1, 2022, the cost of inventories was determined by either the first-in, first-out (“FIFO”) method or the weighted-average method, which is consistent with the methods used at October 2, 2021.
The following table reflects the major components of inventory (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Processed products $ 2,411 $ 2,426
4 unchanged sentences
The major categories of property, plant and equipment and accumulated depreciation are as follows (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Land $ 218 $ 210
6 unchanged sentences
Net Property, Plant and Equipment $ 8,012 $ 7,837
−Removed: RESTRUCTURING AND RELATED CHARGES
−Removed: In the first quarter of fiscal 2020, the Company approved a restructuring program (the “2020 Program”), which is expected to contribute to the Company’s overall strategy of financial fitness through the elimination of overhead and consolidation of certain enterprise functions.
−Removed: We recognized $ 60 million of cumulative pretax charges in fiscal 2020 associated with the 2020 Program consisting of severance and employee related costs.
−Removed: As part of the 2020 Program, we are eliminating positions across several areas and job levels, with eliminated positions originating from the corporate offices in Springdale, Arkansas, and Chicago, Illinois, as well as certain production facility and supply chain administrative positions.
−Removed: The majority of the positions have already been or are expected to be eliminated by the end of fiscal 2021.
−Removed: We do not anticipate future costs of the 2020 Program to be significant.
−Removed: For the three and nine months ended July 3, 2021, we did not incur restructuring and related charges.
−Removed: For the three months ended June 27, 2020, we did not incur significant restructuring and related charges.
−Removed: For the nine months ended June 27, 2020, we recognized restructuring and related charges of $ 54 million, primarily consisting of severance and employee related costs and technology related costs, of which $ 5 million was recorded in Cost of Sales and $ 49 million was recorded in Selling, General and Administrative in our Consolidated Condensed Statements of Income.
−Removed: Our restructuring liability was $ 8 million at July 3, 2021 and $ 37 million at October 3, 2020.
−Removed: The change in the restructuring liability was due to reductions of $ 29 million, primarily consisting of payments, during the nine months ended July 3, 2021.
OTHER CURRENT LIABILITIES
Other current liabilities are as follows (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Accrued salaries, wages and benefits $ 664 $ 897
3 unchanged sentences
Total other current liabilities $ 2,829 $ 3,033
−Removed: (a) As of July 3, 2021, $ 184 million of funds held in an escrow account for litigation settlements was included as restricted cash within Other current assets in the Consolidated Condensed Balance Sheets.
−Removed: As of October 3, 2020, no restricted cash was included within Other current assets in the Consolidated Condensed Balance Sheets.
+Added: (a) $ 169 million and $ 127 million of funds held in an escrow account for litigation settlements were included as restricted cash within Other current assets in the Consolidated Condensed Balance Sheets as of January 1, 2022 and October 2, 2021, respectively.
The major components of debt are as follows (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Revolving credit facility $ — $ —
1 unchanged sentence
Senior notes:
−Removed: 2.25% Notes due August 2021 500 500
4.50% Senior notes due June 2022 1,000 1,000
11 unchanged sentences
Discount on senior notes ( 41 ) ( 42 )
−Removed: Term loan facility due March 2022 — 1,500
−Removed: Term loan facility due March 2023 (0.90% at 7/3/2021) 500 —
Other 225 212
4 unchanged sentences
Revolving Credit Facility and Letters of Credit
−Removed: We have a $ 1.75 billion revolving credit facility that supports short-term funding needs and serves as a backstop to our short-term promissory notes program (“commercial paper program”).
−Removed: The facility will mature and the commitments thereunder will terminate in March 2023.
−Removed: At July 3, 2021, amounts available for borrowing under this facility totaled $ 1.75 billion and we had no borrowings and no outstanding letters of credit issued under this facility.
−Removed: At July 3, 2021, we had $ 100 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.
−Removed: Our letters of credit are issued primarily in support of leasing and workers’ compensation insurance programs and other legal obligations.
+Added: In September 2021, we amended our existing credit facility which, among other things, increased our line of credit from $ 1.75 billion to $ 2.25 billion with the option to establish incremental commitment increases of up to $ 500 million if certain conditions are met.
+Added: The revolving credit facility supports short-term funding needs and serves as a backstop to our commercial paper program.
+Added: The facility will mature and the commitments thereunder will terminate in September 2026 with options for two one-year extensions.
+Added: At January 1, 2022, amounts available for borrowing under this facility totaled $ 2.25 billion and we had no borrowings and no outstanding letters of credit issued under this facility.
+Added: At January 1, 2022, we had $ 94 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.
+Added: Our letters of credit are issued primarily in support of workers’ compensation insurance programs and other legal obligations.
In the future, if any of our subsidiaries shall guarantee any of our material indebtedness, such subsidiary shall be required to guarantee the indebtedness, obligations and liabilities under this facility.
Commercial Paper Program
−Removed: We have a commercial paper program under which we may issue unsecured short-term promissory notes up to an aggregate maximum principal amount of $ 1 billion.
−Removed: As of July 3, 2021, we had no commercial paper outstanding .
+Added: We have a commercial paper program under which we may issue unsecured short-term promissory notes.
+Added: In December 2021, we amended our existing commercial paper program, which increased our maximum borrowing capacity to $ 1.5 billion.
+Added: As of January 1, 2022, we had no commercial paper outstanding .
Our ability to access commercial paper in the future may be limited or its costs increased.
−Removed: On March 27, 2020, we executed a $ 1.5 billion term loan facility to refinance our commercial paper, repay outstanding balances under our revolving credit facility and for general liquidity purposes.
−Removed: In February 2021, we repaid $ 750 million of the $ 1.5 billion outstanding.
−Removed: On March 22, 2021, we executed a new $ 500 million term loan facility due March 2023.
−Removed: The Company used the proceeds of the new term loan, together with $ 250 million in cash on hand, to repay in full the remaining $ 750 million outstanding under the Company's existing $ 1.5 billion term loan facility due March 2022.
−Removed: The new term loan facility expires on March 22, 2023.
−Removed: Additionally, the term loan facility contains covenants that are similar to those contained in the revolving credit facility.
−Removed: August 2021 Notes
−Removed: On July 23, 2021, subsequent to the end of our third quarter of fiscal 2021, we redeemed all of our 2.25% Senior Notes due August 2021 using cash on hand at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest as of the redemption date.
−Removed: At July 3, 2021, the outstanding principal amount was $ 500 million.
Debt Covenants
−Removed: Our revolving credit and term loan facilities contain affirmative and negative covenants that, among other things, may limit or restrict our ability to:
+Added: Our revolving credit facility contains affirmative and negative covenants that, among other things, may limit or restrict our ability to:
create liens and encumbrances;
5 unchanged sentences
and enter into hedging transactions, in each case, subject to certain qualifications and exceptions.
−Removed: In addition, we are required to maintain minimum interest expense coverage and maximum debt-to-capitalization ratios.
+Added: In addition, we are required to maintain a minimum interest expense coverage ratio.
Our senior notes also contain affirmative and negative covenants that, among other things, may limit or restrict our ability to:
2 unchanged sentences
and engage in certain consolidations, mergers and sales of assets.
−Removed: We were in compliance with all debt covenants at July 3, 2021.
+Added: We were in compliance with all debt covenants at January 1, 2022.
Share Repurchases
−Removed: As of July 3, 2021, 18.9 million shares remained available for repurchase under our share repurchase program.
+Added: As of January 1, 2022, 15.3 million shares remained available for repurchase under our share repurchase program.
The share repurchase program has no fixed or scheduled termination date and the timing and extent to which we repurchase shares will depend upon, among other things, our working capital needs, markets, industry conditions, liquidity targets, limitations under our debt obligations and regulatory requirements.
1 unchanged sentence
A summary of share repurchases of our Class A stock is as follows (in millions):
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Shares Dollars Shares Dollars Shares Dollars Shares Dollars
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
+Added: Shares Dollars Shares Dollars
Shares repurchased:
2 unchanged sentences
Total share repurchases 4.2 $ 348 0.3 $ 17
−Removed: Our effective tax rate was 22.1 % and 20.9 % for the third quarter of fiscal 2021 and 2020, respectively and 22.9 % and 22.6 % for the first nine months of fiscal 2021 and 2020, respectively.
−Removed: The effective tax rates for the third quarter and first nine months of fiscal 2021 and 2020 were increased by state taxes and decreased by various tax benefits.
−Removed: Unrecognized tax benefits were $ 171 million and $ 165 million at July 3, 2021 and October 3, 2020, respectively.
+Added: Our effective tax rate was 20.2 % and 23.4 % for the first quarter of fiscal 2022 and 2021, respectively.
+Added: The effective tax rate for the first quarter of fiscal 2022 includes the impact of state taxes, offset by a $ 36 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the first quarter, and various other tax benefits.
+Added: The effective tax rate for the first quarter of fiscal 2021 was higher than the federal statutory tax rate primarily due to state taxes, partially offset by various tax benefits.
+Added: Unrecognized tax benefits were $ 152 million at January 1, 2022 and October 2, 2021.
We do not expect material changes to our unrecognized tax benefits during the next twelve months.
+Added: In December 2021, we received an assessment from the Mexican tax authorities related to the 2015 sale of our direct and indirect equity interests in subsidiaries which held our Mexico operations.
+Added: The assessment totaled approximately $ 380 million ( 7.8 billion Mexican pesos), which includes tax, inflation adjustment, interest and penalties.
+Added: We believe the assertions made in the assessment letter have no merit and will defend our positions through the Mexican administrative appeal process and litigation, if necessary.
+Added: Based on our analysis of this assessment in accordance with FASB guidance related to unrecognized tax benefits, we have not recorded a liability related to the issue.
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share data):
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Net income $ 1,126 $ 472
21 unchanged sentences
Class B $ 0.428 $ 0.423
−Removed: Approximately 2 million and 4 million of our stock-based compensation shares were antidilutive for the three and nine months ended July 3, 2021.
−Removed: Approximately 4 million and 3 million of our stock-based compensation shares were antidilutive for the three and nine months ended June 27, 2020, respectively.
+Added: Approximately 2 million and 6 million of our stock-based compensation shares were antidilutive for the three months ended January 1, 2022 and January 2, 2021, respectively.
These shares were not included in the diluted earnings per share calculation.
12 unchanged sentences
Additionally, our derivative contracts are mostly short-term in duration and we generally do not make use of credit-risk-related contingent features.
−Removed: No significant concentrations of credit risk related to our derivative financial instruments existed at July 3, 2021.
+Added: No significant concentrations of credit risk related to our derivative financial instruments existed at January 1, 2022.
We had the following net aggregated outstanding notional amounts related to our derivative financial instruments:
−Removed: in millions, except soybean meal tons Metric July 3, 2021 October 3, 2020
+Added: in millions, except soybean meal tons Metric January 1, 2022 October 2, 2021
Corn Bushels 58 37
11 unchanged sentences
For the derivative instruments we designate and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.
−Removed: As of July 3, 2021, we had $ 15 million of realized losses related to treasury rate locks in connection with the issuance of the 2026, 2029 and 2048 Notes, which will be reclassified to earnings over the lives of these notes.
−Removed: During the nine months ended July 3, 2021 and June 27, 2020, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.
−Removed: The following table sets forth the pretax impact of cash flow hedge and derivative instruments recognized in Other Comprehensive Income (in millions):
−Removed: Gain (Loss) Recognized in OCI
−Removed: On Derivatives Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Cash flow hedge – derivatives designated as hedging instruments:
−Removed: Commodity contracts $ — $ ( 7 ) $ — $ ( 18 )
−Removed: Interest rate hedges — ( 1 ) — ( 2 )
−Removed: Total $ — $ ( 8 ) $ — $ ( 20 )
+Added: As of January 1, 2022, we had $ 15 million of realized losses related to treasury rate locks in connection with the issuance of the 2026, 2029 and 2048 Notes, which will be reclassified to earnings over the lives of these notes.
+Added: During the three months ended January 1, 2022 and January 2, 2021, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.
+Added: For the three months ended January 1, 2022 and January 2, 2021, we had no gains or losses recognized in OCI on derivatives designated as cash flow hedges.
Fair Value Hedges
3 unchanged sentences
We include the gain or loss on the hedged items (e.g., livestock purchase firm commitments) in the same line item, Cost of Sales, as the offsetting gain or loss on the related livestock forward position.
−Removed: Ineffectiveness related to fair value hedges was not significant for the three and nine months ended July 3, 2021, and June 27, 2020.
−Removed: The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of July 3, 2021 and October 3, 2020 (in millions):
−Removed: Consolidated Condensed Balance Sheets Classification July 3, 2021 October 3, 2020
+Added: Ineffectiveness related to fair value hedges was not significant for the three months ended January 1, 2022, and January 2, 2021.
+Added: The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of January 1, 2022 and October 2, 2021 (in millions):
+Added: Consolidated Condensed Balance Sheets Classification January 1, 2022 October 2, 2021
Inventory $ 12 $ ( 6 )
6 unchanged sentences
Consolidated Condensed
−Removed: Statements of Income Classification Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Statements of Income Classification Three Months Ended
+Added: January 1, 2022 January 2, 2021
Cost of Sales $ 10,918 $ 9,283
2 unchanged sentences
The following table sets forth the pretax impact of the cash flow, fair value and undesignated derivative instruments in the Consolidated Condensed Statements of Income (in millions):
−Removed: Consolidated Condensed
−Removed: Statements of Income Classification Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Consolidated Condensed Statements of Income Classification Three Months Ended
+Added: January 1, 2022 January 2, 2021
Cost of Sales Gain (Loss) on cash flow hedges reclassified from OCI to Earnings:
29 unchanged sentences
The following tables set forth by level within the fair value hierarchy our financial assets and liabilities accounted for at fair value on a recurring basis according to the valuation techniques we used to determine their fair values (in millions):
−Removed: July 3, 2021 Level 1 Level 2 Level 3 Netting (a) Total
+Added: January 1, 2022 Level 1 Level 2 Level 3 Netting (a) Total
Other Current Assets:
4 unchanged sentences
Available-for-sale securities — 62 46 — 108
−Removed: Non-current — 59 49 — 108
Deferred compensation assets 12 414 — — 426
12 unchanged sentences
Available-for-sale securities — 61 48 — 109
−Removed: Non-current — 55 53 — 108
Deferred compensation assets 14 397 — — 411
6 unchanged sentences
(a) Our derivative assets and liabilities are presented in our Consolidated Condensed Balance Sheets on a net basis when a legally enforceable master netting arrangement exists between the counterparty to a derivative contract and us.
−Removed: Additionally, at July 3, 2021, and October 3, 2020, we had $ 17 million and $ 16 million, respectively, of net cash collateral with various counterparties where master netting arrangements exist and held no cash collateral.
+Added: Additionally, at January 1, 2022, and October 2, 2021, we had $ 23 million and $ 56 million, respectively, of net cash collateral with various counterparties where master netting arrangements exist and held no cash collateral.
The following table provides a reconciliation between the beginning and ending balance of marketable debt securities measured at fair value on a recurring basis in the table above that used significant unobservable inputs (Level 3) (in millions):
−Removed: Nine Months Ended
−Removed: July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Balance at beginning of year $ 48 $ 53
5 unchanged sentences
Balance at end of period $ 46 $ 51
−Removed: Total gains (losses) for the nine month period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at end of period $ — $ —
+Added: Total gains (losses) for the three month period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at end of period
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
14 unchanged sentences
The following table sets forth our available-for-sale securities' amortized cost basis, fair value and unrealized gain (loss) by significant investment category (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Cost Basis Fair
13 unchanged sentences
We consider many factors in determining whether a loss is credit-related, including the financial condition and near-term prospects of the issuer, borrower repayment characteristics for asset-backed securities, and our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery.
−Removed: We recognized no direct write-offs or allowances for credit losses in earnings for the three and nine months ended July 3, 2021, and June 27, 2020.
+Added: We recognized no direct write-offs or allowances for credit losses in earnings for the three months ended January 1, 2022, and January 2, 2021.
Deferred Compensation Assets
8 unchanged sentences
In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis.
−Removed: Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.
−Removed: We did not have any significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the nine months ended July 3, 2021, and June 27, 2020.
+Added: Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges and, with respect to our equity investments without readily determinable fair values, recorded by applying the measurement alternative for which such investments are recorded at cost and adjusted for an observable price change in an orderly transaction for an identical or similar investment of the same issuer.
+Added: In the three months ended January 1, 2022, we recognized a gain of $ 30 million in Other, net in the Consolidated Condensed Statements of Income, based upon an observable price change.
+Added: Equity investments without readily determinable fair values are measured using Level 3 inputs and are included in Other Assets in the Consolidated Condensed Balance Sheets.
+Added: We did not have any significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the three months ended January 2, 2021.
Other Financial Instruments
1 unchanged sentence
Fair value and carrying value for our debt are as follows (in millions):
−Removed: July 3, 2021 October 3, 2020
+Added: January 1, 2022 October 2, 2021
Fair Value Carrying Value Fair Value Carrying Value
Total debt $ 10,862 $ 9,364 $ 10,810 $ 9,348
−Removed: PENSIONS AND OTHER POSTRETIREMENT BENEFIT PLANS
−Removed: The components of the net periodic cost for the pension and postretirement benefit plans for the three and nine months ended July 3, 2021 and June 27, 2020 are as follows (in millions):
−Removed: Pension Plans
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Service cost $ — $ — $ — $ —
−Removed: Interest cost 2 2 5 19
−Removed: Expected return on plan assets — — — ( 15 )
−Removed: Amortization of:
−Removed: Net actuarial loss 1 1 3 3
−Removed: Prior service cost 1 1 1 1
−Removed: Settlement (gain) loss — ( 6 ) — ( 112 )
−Removed: Net periodic cost (credit) $ 4 $ ( 2 ) $ 9 $ ( 104 )
−Removed: Postretirement Benefit Plans
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Interest cost $ — $ 1 $ — $ 1
−Removed: Amortization of prior service cost (credit) — — ( 1 ) ( 1 )
−Removed: Net periodic cost (credit) $ — $ 1 $ ( 1 ) $ —
−Removed: Net periodic benefit cost, excluding the service cost component, was recorded in the Consolidated Condensed Statements of Income in Other, net.
−Removed: During the second quarter of fiscal 2020, we recognized a one-time gain of $ 110 million related to the termination of two qualified pension plans and one multi-employer pension plan and recorded the amount in the Consolidated Condensed Statements of Income in Other, net.
−Removed: During the third quarter of fiscal 2020, we recognized an additional pretax gain of $ 6 million related to the termination of these pension plans and recorded the amount in the Consolidated Condensed Statements of Income in Other, net.
−Removed: The settlements of the two qualified plans through purchased annuities did not require any significant contributions.
−Removed: The plans have no remaining benefit obligation.
OTHER COMPREHENSIVE INCOME (LOSS)
The before and after-tax changes in the components of other comprehensive income (loss) are as follows (in millions):
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
−Removed: Before Tax Tax After Tax Before Tax Tax After Tax Before Tax Tax After Tax Before Tax Tax After Tax
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
+Added: Before Tax Tax After Tax Before Tax Tax After Tax
Derivatives accounted for as cash flow hedges:
−Removed: (Gain) loss reclassified to interest expense $ — $ — $ — $ 1 $ — $ 1 $ 1 $ — $ 1 $ 3 $ ( 1 ) $ 2
(Gain) loss reclassified to cost of sales $ — $ — $ — $ 1 $ — $ 1
Unrealized gain (loss) ( 1 ) — ( 1 ) — — —
−Removed: Unrealized gain (loss) — — — 1 — 1 ( 1 ) — ( 1 ) 1 — 1
Currency translation:
2 unchanged sentences
Unrealized gain (loss) 2 — 2 1 — 1
−Removed: Pension settlement reclassified to other (income) expense — — — — — — — — — ( 58 ) 15 ( 43 )
Total other comprehensive income (loss) $ — $ — $ — $ 77 $ — $ 77
22 unchanged sentences
Information on segments and a reconciliation to income before income taxes are as follows (in millions):
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Beef $ 5,002 $ 3,987
5 unchanged sentences
Total sales $ 12,933 $ 10,460
−Removed: Three Months Ended Nine Months Ended
−Removed: July 3, 2021 June 27, 2020 July 3, 2021 June 27, 2020
+Added: Three Months Ended
+Added: January 1, 2022 January 2, 2021
Operating income (loss):
−Removed: $ 1,120 $ 649 $ 2,093 $ 1,114
−Removed: Pork 67 107 250 391
−Removed: ( 279 ) ( 120 ) ( 489 ) 36
Prepared Foods 186 266
−Removed: International/Other (c)
+Added: International/Other 9 11
Total operating income 1,455 705
1 unchanged sentence
Income before income taxes $ 1,410 $ 616
−Removed: (a) Beef segment results for the nine months ended July 3, 2021 included a $ 55 million gain from the recovery of cattle inventory from a cattle supplier that misappropriated Company funds as compared to results for the three and nine months ended June 27, 2020, which included a $ 2 million loss and $ 56 million loss, respectively, as further described in Note 1:
−Removed: Accounting Policies.
−Removed: (b) Chicken segment results for the three and nine months ended July 3, 2021 included charges of $ 306 million and $ 626 million, respectively, related to the recognition of legal contingency accruals, of which $ 225 million and $ 545 million, respectively, was recorded as a reduction to Sales pursuant to FASB guidance related to accounting for revenue from contracts with customers and $ 81 million was recorded as an increase to Cost of Sales in the three and nine months ended July 3, 2021.
−Removed: (c) International/Other results included a $ 4 million loss and a $ 23 million loss related to the relocation of a production facility in China for the three and nine months ended July 3, 2021, respectively.
+Added: (a) Beef segment results for the three months ended January 2, 2021 included a $ 55 million gain from the recovery of cattle inventory from a cattle supplier that misappropriated Company funds.
+Added: (b) Chicken segment results for the three months ended January 1, 2022 included $ 23 million of insurance proceeds, net of costs incurred, recognized in Cost of Sales.
+Added: Additionally, Chicken segment results for the three months ended January 2, 2021 included a $ 320 million charge related to the recognition of a legal contingency accrual.
+Added: The accrual was recorded as a reduction to Sales pursuant to FASB guidance related to accounting for revenue from contracts with customers.
The following tables further disaggregate our sales to customers by major distribution channels (in millions):
−Removed: Three months ended July 3, 2021
−Removed: Foodservice (b)
−Removed: International (c)
−Removed: Industrial and Other (d)
−Removed: Intersegment Total
−Removed: Beef $ 2,365 $ 1,264 $ 704 $ 491 $ 130 $ 4,954
−Removed: Pork 500 141 324 419 331 1,715
−Removed: Chicken 1,500 1,492 197 270 17 3,476
−Removed: Prepared Foods 1,359 877 37 50 — 2,323
−Removed: International/Other — — 488 — — 488
−Removed: Intersegment — — — — ( 478 ) ( 478 )
−Removed: Total $ 5,724 $ 3,774 $ 1,750 $ 1,230 $ — $ 12,478
−Removed: Three months ended June 27, 2020
−Removed: Foodservice (b)
−Removed: International (c)
−Removed: Industrial and Other (d)
−Removed: Intersegment Total
−Removed: Beef $ 2,192 $ 650 $ 444 $ 279 $ 88 $ 3,653
−Removed: Pork 408 85 214 215 193 1,115
−Removed: Chicken 1,481 1,046 151 420 14 3,112
−Removed: Prepared Foods 1,322 651 24 38 — 2,035
−Removed: International/Other — — 402 — — 402
−Removed: Intersegment — — — — ( 295 ) ( 295 )
−Removed: Total $ 5,403 $ 2,432 $ 1,235 $ 952 $ — $ 10,022
−Removed: Nine months ended July 3, 2021
+Added: Three months ended January 1, 2022
Foodservice (b)
9 unchanged sentences
Total $ 5,654 $ 3,861 $ 1,977 $ 1,441 $ — $ 12,933
−Removed: Nine months ended June 27, 2020
+Added: Three months ended January 2, 2021
Foodservice (b)
13 unchanged sentences
(d) Includes sales to industrial food processing companies that further process our product to sell to end consumers and any remaining sales not included in the Retail, Foodservice or International categories.
−Removed: For the three and nine months ended July 3, 2021, the Chicken segment included a $ 225 million and $ 545 million reduction in Other, respectively, due to the recognition of legal contingency accruals.
+Added: For the three months ended January 2, 2021, the Chicken segment included a $ 320 million reduction in Other due to the recognition of a legal contingency accrual.
COMMITMENTS AND CONTINGENCIES
We guarantee obligations of certain outside third parties, consisting primarily of grower loans, which are substantially collateralized by the underlying assets.
−Removed: The remaining terms of the underlying obligations cover periods up to 10 years, and the maximum potential amount of future payments as of July 3, 2021, was no t significant.
+Added: The remaining terms of the underlying obligations cover periods up to 10 years, and the maximum potential amount of future payments as of January 1, 2022, was no t significant.
The likelihood of material payments under these guarantees is not considered probable.
−Removed: At July 3, 2021 and October 3, 2020, no significant liabilities for guarantees were recorded.
+Added: At January 1, 2022 and October 2, 2021, no significant liabilities for guarantees were recorded.
We have cash flow assistance programs in which certain livestock suppliers participate.
3 unchanged sentences
Our maximum commitment associated with these programs is limited to the fair value of each participating livestock supplier’s net tangible assets.
−Removed: The potential maximum commitment as of July 3, 2021 was approximately $ 315 million.
−Removed: The total receivables under these programs were $ 9 million and $ 29 million at July 3, 2021 and October 3, 2020, respectively.
+Added: The potential maximum commitment as of January 1, 2022 was approximately $ 293 million.
+Added: The total receivables under these programs were $ 5 million at January 1, 2022 and October 2, 2021.
These receivables are included, net of allowance for uncollectible amounts, in Accounts Receivable in our Consolidated Condensed Balance Sheets.
Even though these programs are limited to the net tangible assets of the participating livestock suppliers, we also manage a portion of our credit risk associated with these programs by obtaining security interests in livestock suppliers’ assets.
−Removed: After analyzing residual credit risks and general market conditions, we have no allowance for these programs’ estimated uncollectible receivables at July 3, 2021, and October 3, 2020.
+Added: After analyzing residual credit risks and general market conditions, we have no allowance for these programs’ estimated uncollectible receivables at January 1, 2022, and October 2, 2021.
When constructing new facilities or making major enhancements to existing facilities, we will occasionally enter into incentive agreements with local government agencies in order to reduce certain state and local tax expenditures.
Certain arrangements may require cash to be deposited into a fund to cover future expenditures.
−Removed: These funds are generally considered restricted cash, which is reported in the Consolidated Condensed Balance Sheets in Other Assets, and totaled $ 11 million and $ 46 million at July 3, 2021 and October 3, 2020, respectively.
+Added: These funds are generally considered restricted cash, which is reported in the Consolidated Condensed Balance Sheets in Other Assets, and totaled $ 3 million at January 1, 2022 and October 2, 2021.
Additionally, under certain agreements, we transfer the related assets to various local government entities and receive Industrial Revenue Bonds.
1 unchanged sentence
The Industrial Revenue Bonds and the associated obligations for the leases of the facilities offset, and the underlying assets remain in property, plant and equipment.
−Removed: At July 3, 2021, the total amount under these types of arrangements totaled $ 609 million.
+Added: At January 1, 2022, the total amount under these types of arrangements totaled $ 717 million.
Contingencies
−Removed: In the normal course of business, we are involved in various claims and legal proceedings.
−Removed: Each quarter, we assess the likelihood of adverse judgments or outcomes to those matters, as well as ranges of probable losses, to the extent losses are reasonably estimable.
−Removed: We record accruals in the Company's Consolidated Financial Statements for matters to the extent that we conclude a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable.
−Removed: Additionally, for matters in which losses are reasonably possible, no reasonable estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because, among other reasons:
−Removed: (i) the proceedings are in preliminary stages;
−Removed: (ii) specific damages have not been sought;
−Removed: (iii) damage claims are unsupported and/or unreasonable;
−Removed: (iv) there is uncertainty as to the outcome of pending appeals or motions;
−Removed: (v) there are significant factual issues to be resolved;
−Removed: or (vi) novel legal issues or unsettled legal theories are being asserted.
−Removed: In our opinion, we have made appropriate and adequate accruals for these matters.
−Removed: Regardless of the manner of resolution, frequently the most significant changes in the status of a matter occur over a short time period, often following a lengthy period of little substantive activity.
+Added: In the normal course of business, we are involved in various claims, lawsuits, investigations and legal proceedings, including those specifically identified below.
+Added: Each quarter, we determine whether to accrue for loss contingencies based on our assessment of whether the potential loss is probable, reasonably possible or remote and to the extent a loss is probable, whether it is reasonably estimable.
+Added: We record accruals in the Company's Consolidated Financial Statements for matters that we conclude are probable and the financial impact is reasonably estimable.
+Added: Regardless of the manner of resolution, frequently the most significant changes in the status of a matter may occur over a short time period, often following a lengthy period of little substantive activity.
While these accruals reflect the Company’s best estimate of the probable loss for those matters as of the dates of those accruals, the recorded amounts may differ materially from the actual amount of the losses for those matters.
−Removed: Listed below are certain claims made against the Company and/or our subsidiaries for which the potential exposure is considered material to the Company’s Consolidated Financial Statements.
−Removed: We believe we have substantial defenses to the claims made and intend to vigorously defend these matters.
−Removed: On September 2, 2016, Maplevale Farms, Inc., acting on its own behalf and on behalf of a putative class of direct purchasers of poultry products, filed a class action complaint against us and certain of our poultry subsidiaries, as well as several other poultry processing companies, in the Northern District of Illinois.
−Removed: Subsequent to the filing of this initial complaint, additional lawsuits making similar claims on behalf of putative classes of direct and indirect purchasers were filed in the United States District Court for the Northern District of Illinois.
−Removed: The court consolidated the complaints, for pre-trial purposes, into actions on behalf of three different putative classes:
−Removed: direct purchasers, indirect purchasers/consumers and commercial/institutional indirect purchasers.
−Removed: The consolidated actions are styled In re Broiler Chicken Antitrust Litigation (the “Broiler Antitrust Civil Litigation”).
−Removed: Since the original filing, certain putative class members have opted out of the matter and are proceeding with individual direct actions making similar claims, and others may do so in the future.
−Removed: All opt out complaints have been filed in, or transferred to, the Northern District of Illinois and are proceeding on a coordinated pre-trial basis with the consolidated actions.
−Removed: The operative complaints, which have been amended throughout the litigation, allege, among other things, that beginning in January 2008 the defendants conspired and combined to fix, raise, maintain, and stabilize the price of broiler chickens in violation of United States antitrust laws.
−Removed: The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.
+Added: Listed below are certain claims made against the Company for which the magnitude of the potential exposure could be material to the Company’s Consolidated Financial Statements.
+Added: There were no significant changes to our loss contingency accruals reflected in the Company's Condensed Consolidated Statement of Income for the three months ended January 1, 2022.
+Added: Broiler Antitrust Civil Litigation
+Added: Beginning in September 2016, a series of purported federal class action lawsuits styled In re Broiler Chicken Antitrust Litigation (the “Broiler Antitrust Civil Litigation”) were filed in the United States District Court for the Northern District of Illinois against us and certain of our poultry subsidiaries, as well as several other poultry processing companies.
+Added: The operative complaints, which have been amended throughout the litigation, contain allegations that, among other things, assert that beginning in January 2008, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of broiler chickens in violation of United States antitrust laws.
The plaintiffs also allege that defendants “manipulated and artificially inflated a widely used Broiler price index, the Georgia Dock.” The plaintiffs further allege that the defendants concealed this conduct from the plaintiffs and the members of the putative classes.
The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative classes.
−Removed: The parties have briefed the issue of class certification, and if necessary, trial is expected to occur in calendar 2023 after rulings on class certification and summary judgment motions.
−Removed: On April 26, 2019, the plaintiffs notified us that the U.S.
−Removed: Department of Justice (“DOJ”) Antitrust Division issued a grand jury subpoena to them requesting discovery produced by all parties in the civil case.
−Removed: On June 21, 2019, the DOJ filed a motion to intervene and sought a limited stay of discovery in the civil action, which the court granted in part.
−Removed: Subsequently, we received a grand jury subpoena from the DOJ seeking additional documents and information related to the chicken industry.
−Removed: On June 2, 2020 a grand jury for the District of Colorado returned an indictment charging four individual executives employed by two other poultry processing companies with conspiracy to engage in bid-rigging in violation of federal antitrust laws.
−Removed: On June 10, 2020, we announced that we uncovered information in connection with the grand jury subpoena that we had previously self-reported to the DOJ and have been fully cooperating with the DOJ as part of our application for leniency under the DOJ's Corporate Leniency Program.
−Removed: Subsequently, the DOJ has announced additional indictments, bringing charges against additional individuals, as well as poultry processing companies, and alleging a conspiracy to fix prices and rig bids for broiler chicken products from at least 2012 until at least early 2019.
−Removed: Plaintiffs in the civil action filed complaints or motions that expressly referenced the conduct in the DOJ’s indictments and argued that bid-rigging conduct was encompassed by prior complaints.
−Removed: On September 22, 2020, the court ruled that bid-rigging claims would be consolidated into the existing action but bifurcated from the original supply reduction and Georgia Dock claims.
−Removed: The original claims will proceed on their current schedule and the bid-rigging claims, including any related discovery, are stayed until the supply reduction and Georgia Dock claims are resolved.
−Removed: On January 19, 2021, we announced that we had reached agreement to settle all class claims related to the Broiler Antitrust Civil Litigation.
+Added: In addition, the complaints on behalf of the putative classes of indirect purchasers include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.
+Added: Since the original filing, certain putative class members have opted out of the matter and are proceeding with individual direct actions making similar claims, and others may do so in the future.
+Added: On January 19, 2021, we announced that we had reached agreement to settle certain class claims related to the Broiler Antitrust Civil Litigation.
Settlement terms were reached with the putative Direct Purchaser Plaintiff Class, the putative Commercial and Institutional Indirect Purchaser Plaintiff Class and the putative End-User Plaintiff Class (collectively, the “Classes”).
Under the terms of the settlements, we have agreed to pay the Classes an aggregate amount of $ 221.5 million in settlement of all outstanding claims brought by the Classes.
−Removed: On February 23, 2021 and March 22, 2021, the Court granted preliminary approval of the settlements with the putative Direct Purchaser Plaintiff Class and the putative End-User Plaintiff Class, respectively.
−Removed: On June 29, 2021, the Court granted final approval to the settlement with the Direct Purchaser Plaintiff Class.
−Removed: The settlement with the putative Commercial and Institutional Indirect Purchaser Plaintiff Class remains subject to court approval.
+Added: On February 23, 2021, March 22, 2021 and October 15, 2021, the Court granted preliminary approval of the settlements with the putative Direct Purchaser Plaintiff Class, the putative End-User Plaintiff Class and the putative Commercial and Institutional Indirect Purchaser Plaintiff Class, respectively.
+Added: On June 29, 2021 and December 20, 2021, the Court granted final approval to the settlements with the Direct Purchaser Plaintiff Class and the End-User Plaintiff Class, respectively.
+Added: The settlement with the putative Commercial and Institutional Indirect Purchaser Plaintiff Class remains subject to final court approval.
The foregoing settlements do not settle claims made by plaintiffs who opt out of the Classes in the Broiler Antitrust Civil Litigation.
−Removed: In the first quarter of fiscal 2021, the Company recorded an aggregate legal contingency accrual of $ 320 million for the above-referenced settlements and to resolve the remaining claims brought by opt-out plaintiffs.
−Removed: For the third quarter of fiscal 2021, the Company accrued an additional $ 225 million for the estimated costs to resolve the remaining claims brought by opt-out plaintiffs, bringing the total recorded legal contingency accrual for claims related to this matter to $ 545 million, which amount includes our existing settlements.
−Removed: This amount reflects an adjustment to our estimate of the probable losses with respect to claims in the Broiler Antitrust Civil Litigation and bid-rigging claims of potentially affected parties identified by the DOJ in the indictments noted above.
We are currently pursuing settlement discussions with the remaining opt-out plaintiffs with respect to the remaining claims.
−Removed: While we do not admit any liability as part of the settlements, we believe that the settlements were in the best interests of the Company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation.
−Removed: On September 1, 2020, the Office of the Attorney General of the State of New Mexico filed a complaint against us and certain of our poultry subsidiaries, as well as several other poultry processing companies and Agri Stats, Inc., an information services provider (“Agri Stats”), in Santa Fe County, New Mexico.
−Removed: The complaint alleges violations of New Mexico’s antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to manipulate the Georgia Dock, exchange information and reduce the supply of broiler chickens.
−Removed: On February 1, 2021, we and our poultry subsidiaries, as well as the majority of the other defendants, filed answers to this complaint.
−Removed: We are currently waiting for discovery to commence.
−Removed: On February 22, 2021, the Office of the Attorney General of the State of Alaska filed a complaint against us and certain of our poultry subsidiaries, as well as several other poultry processing companies and Agri Stats, in Anchorage, Alaska.
−Removed: The complaint alleges violations of Alaska’s antitrust, consumer protection, and unjust enrichment laws based on allegations of conspiracies to manipulate the Georgia Dock, exchange information and reduce the supply of broiler chickens.
−Removed: On March 1, 2017, we received a civil investigative demand (“CID”) from the Office of the Attorney General, Department of Legal Affairs, of the State of Florida.
−Removed: The Florida CID requests information primarily related to possible anticompetitive conduct in connection with the Georgia Dock.
−Removed: We have been cooperating with the Florida Attorney General’s office.
−Removed: In July 2019, the Attorney General issued a subpoena to the In re Broiler Chicken Antitrust Litigation plaintiffs requesting all information provided to the DOJ.
−Removed: On August 18, 2019, we were advised that the In re Broiler Chicken Antitrust Litigation plaintiffs had received a CID from the Louisiana Department of Justice Office of the Attorney General Public Protection Division.
−Removed: The Louisiana CID requests all deposition transcripts related to the In re Broiler Chicken Antitrust Litigation .
−Removed: In February and May of 2021, we received CIDs from the Office of the Attorney General of the State of Louisiana.
−Removed: This Louisiana CID requests information primarily related to possible anticompetitive conduct or violations of state consumer protection laws in connection with the broiler chicken market.
−Removed: We have been cooperating with the Louisiana Attorney General’s office.
−Removed: On August 6, 2020, we received a CID from the Office of the Attorney General of the State of Washington.
−Removed: The Washington CID requests information primarily related to possible anticompetitive conduct or violations of state consumer protection laws in connection with the broiler chicken market.
−Removed: We have been cooperating with the Washington Attorney General’s office.
−Removed: On January 27, 2017, Haff Poultry, Inc., Craig Watts, Johnny Upchurch, Jonathan Walters and Brad Carr, acting on behalf of themselves and a putative class of broiler chicken farmers, filed a class action complaint against us and certain of our poultry subsidiaries, as well as several other vertically-integrated poultry processing companies, in the United States District Court for the Eastern District of Oklahoma.
−Removed: On March 27, 2017, a second class action complaint making similar claims on behalf of a similarly defined putative class was filed in the United States District Court for the Eastern District of Oklahoma.
−Removed: Plaintiffs in the two cases sought to have the matters consolidated, and, on July 10, 2017, filed a consolidated amended complaint styled In re Broiler Chicken Grower Litigation .
+Added: While we do not admit any liability as part of the settlements, we believe that the settlements were in the best interests of the Company and its shareholders to avoid the uncertainty, risk, expense and distraction of protracted litigation.
+Added: Government Investigations
+Added: Department of Justice (“DOJ”) Antitrust Division .
+Added: On June 21, 2019, the DOJ filed a motion to intervene and sought a limited stay of discovery in the Broiler Antitrust Civil Litigation, which the court granted in part.
+Added: Subsequently, we received a grand jury subpoena from the DOJ seeking additional documents and information related to the chicken industry.
+Added: On June 2, 2020 a grand jury for the District of Colorado returned an indictment charging four individual executives employed by two other poultry processing companies with conspiracy to engage in bid-rigging in violation of federal antitrust laws.
+Added: On June 10, 2020, we announced that we uncovered information in connection with the grand jury subpoena that we had previously self-reported to the DOJ and have been fully cooperating with the DOJ as part of our application for leniency under the DOJ's Corporate Leniency Program.
+Added: Subsequently, the DOJ has announced indictments against additional individuals, as well as other poultry processing companies, and alleging a conspiracy to fix prices and rig bids for broiler chicken products from at least 2012 until at least early 2019.
+Added: In August 2021, the Company was granted conditional leniency by the DOJ for the matters we self-reported, which means that provided the Company continues to fully cooperate with the DOJ, neither the Company nor any of our cooperating employees will face prosecution or criminal fines or penalties.
+Added: We continue to fully cooperate with the DOJ in connection with the ongoing federal antitrust investigation.
+Added: State Matters .
+Added: The Offices of the Attorney General in New Mexico, Alaska and Washington have filed complaints against us and certain of our poultry subsidiaries, as well as several other poultry processing companies and Agri Stats, Inc., an information services provider (“Agri Stats”).
+Added: The complaints are based on allegations similar to those asserted in the Broiler Antitrust Civil Litigation and allege violations of state antitrust, unfair trade practice, and unjust enrichment laws.
+Added: The Company has not recorded any liability for the foregoing matters as it does not believe a loss is probable or reasonably estimable at this time because the proceedings are in preliminary stages.
+Added: In addition, we are cooperating with various state governmental agencies and officials, including the Offices of the Attorney General for Florida and Louisiana, investigating or otherwise seeking information, testimony and/or documents, regarding the conduct alleged in the Broiler Antitrust Civil Litigation and related matters.
+Added: Broiler Chicken Grower Litigation
+Added: On January 27, 2017 and March 26, 2017, putative class action complaints were filed against us and certain of our poultry subsidiaries, as well as several other vertically integrated poultry processing companies, in the United States District Court for the Eastern District of Oklahoma styled In re Broiler Chicken Grower Litigation .
The plaintiffs allege, among other things, that the defendants colluded not to compete for broiler raising services “with the purpose and effect of fixing, maintaining, and/or stabilizing grower compensation below competitive levels.” The plaintiffs also allege that the defendants “agreed to share detailed data on [g]rower compensation with one another, with the purpose and effect of artificially depressing [g]rower compensation below competitive levels.” The plaintiffs contend these alleged acts constitute violations of the Sherman Antitrust Act and Section 202 of the Grain Inspection, Packers and Stockyards Act of 1921.
The plaintiffs are seeking treble damages, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative class.
−Removed: We and the other defendants filed a motion to dismiss on September 8, 2017, and that motion was denied on January 6, 2020.
Additional named plaintiffs filed similar class action complaints in federal district courts in North Carolina, Colorado, Kansas and California.
−Removed: On October 6, 2020, the named plaintiffs in the Oklahoma action filed a motion with the United States Judicial Panel on Multidistrict Litigation (the “JPML”) to transfer and consolidate all actions in the Eastern District of Oklahoma.
−Removed: On December 15, 2020, the JPML granted the plaintiffs’ motion and consolidated all actions in the Eastern District of Oklahoma.
−Removed: In June 2021, we reached an agreement to settle with the putative class of broiler chicken farmers all claims raised in this consolidated action for $ 21 million.
−Removed: The settlement is subject to court approval.
−Removed: On June 18, 2018, a group of plaintiffs acting on their own behalf and on behalf of a putative class of all persons and entities who indirectly purchased pork filed a class action complaint against us and certain of our pork subsidiaries, as well as several other pork processing companies, in the United States District Court for the District of Minnesota.
−Removed: Subsequent to the filing of the initial complaint, additional lawsuits making similar claims on behalf of putative classes of direct and indirect purchasers were also filed in the same court.
−Removed: The court consolidated the complaints, for pre-trial purposes, into actions on behalf of three different putative classes:
−Removed: direct purchasers, indirect purchasers/consumers and commercial/institutional indirect purchasers.
−Removed: The consolidated actions are styled In re Pork Antitrust Litigation .
−Removed: Since the original filing, putative class members have filed individual direct actions making similar claims, and others may do so in the future.
−Removed: The complaints allege, among other things, that beginning in January 2009 the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products in violation of United States antitrust laws.
+Added: All actions were subsequently consolidated in the Eastern District of Oklahoma.
+Added: In June 2021, we reached an agreement to settle with the putative class of broiler chicken farmers all claims raised in this consolidated action on terms not material to the Company for which the Company recorded an accrual in its Consolidated Financial Statements as of October 2, 2021.
+Added: On August 23, 2021, the Court granted preliminary approval of the settlement, and a final fairness hearing is scheduled for February 18, 2022.
+Added: Pork Antitrust Litigation
+Added: Beginning June 18, 2018, a series of putative class action complaints were filed against us and certain of our pork subsidiaries, as well as several other pork processing companies, in the United States District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the "Pork Antitrust Civil Litigation").
+Added: The plaintiffs allege, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products in violation of federal antitrust laws.
The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.
The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative classes.
−Removed: On August 8, 2019, this matter was dismissed without prejudice.
−Removed: The plaintiffs filed amended complaints on November 6, 2019, in which the plaintiffs again have alleged that the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products in violation of state and federal antitrust, consumer protection, and unjust enrichment common laws, and the plaintiffs again are seeking treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative classes.
−Removed: The Commonwealth of Puerto Rico, on behalf of its citizens, has also initiated a civil lawsuit against us, certain of our subsidiaries, and several other pork processing companies alleging activities in violation of the Puerto Rican antitrust laws.
−Removed: This lawsuit was transferred to the District of Minnesota and an amended complaint was filed on December 6, 2019.
−Removed: We moved to dismiss the amended complaints, and on October 16, 2020, the court granted the motion with respect to certain state law claims but denied the motion with respect to the plaintiffs’ federal antitrust claims.
−Removed: The parties are now conducting discovery.
−Removed: On June 29, 2021, the Office of the Attorney General of the State of New Mexico filed a complaint against us and certain of our pork subsidiaries, as well as several other pork processing companies and Agri Stats, in Santa Fe County, New Mexico.
−Removed: The complaint alleges violations of New Mexico's antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to exchange information and manipulate the supply of pork.
−Removed: On April 23, 2019, a group of plaintiffs, acting on behalf of themselves and on behalf of a putative class of all persons and entities who directly sold to the named defendants any fed cattle for slaughter and all persons who transacted in live cattle futures and/or options traded on the Chicago Mercantile Exchange or another U.S.
−Removed: exchange, filed a class action complaint against us and our beef and pork subsidiary, Tyson Fresh Meats, Inc., as well as other beef packer defendants, in the United States District Court for the Northern District of Illinois.
+Added: Since the original filing, certain putative class members have opted out of the matter and are proceeding with individual direct actions making similar claims, and others may do so in the future.
+Added: The Company has not recorded any liability for this matter as of January 1, 2022 as it does not believe a loss is probable or reasonably estimable because the Company believes that it has valid and meritorious defenses against the allegations and because the classes have not yet been defined or certified by the court.
+Added: The Offices of the Attorney General in New Mexico and Alaska have filed complaints against us and certain of our pork subsidiaries, as well as several other pork processing companies and Agri Stats.
+Added: The complaints are based on allegations similar to those asserted in the Pork Antitrust Civil Litigation and allege violations of state antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to exchange information and manipulate the supply of pork.
+Added: The Company has not recorded any liability for the foregoing matters as it does not believe a loss is probable or reasonably estimable at this time because the proceedings are in preliminary stages.
+Added: Beef Antitrust Litigation
+Added: On April 23, 2019, a putative class action complaint was filed against us and our beef and pork subsidiary, Tyson Fresh Meats, Inc., as well as other beef packer defendants, in the United States District Court for the Northern District of Illinois.
The plaintiffs allege that the defendants engaged in a conspiracy from January 2015 to the present to reduce fed cattle prices in violation of federal antitrust laws, the Grain Inspection, Packers and Stockyards Act of 1921, and the Commodities Exchange Act by periodically reducing their slaughter volumes so as to reduce demand for fed cattle, curtailing their purchases and slaughters of cash-purchased cattle during those same periods, coordinating their procurement practices for fed cattle settled on a cash basis, importing foreign cattle at a loss so as to reduce domestic demand, and closing and idling plants.
1 unchanged sentence
The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest, as well as declaratory and injunctive relief.
−Removed: This complaint was subsequently voluntarily dismissed and re-filed in the United States District Court for the District of Minnesota.
−Removed: Other similar lawsuits were filed by ranchers in other district courts.
−Removed: All actions seeking relief by ranchers and futures traders have now been transferred to the United States District Court for the District of Minnesota action and are consolidated for pre-trial proceedings as In Re Cattle Antitrust Litigation .
−Removed: Following the filing of defendants’ motion to dismiss this matter, the plaintiffs filed a second amended complaint on October 4, 2019.
−Removed: We moved to dismiss the second amended complaint, which the court granted on September 28, 2020.
−Removed: On December 28, 2020, the plaintiffs filed an amended complaint.
−Removed: On February 18, 2021, we filed a motion to dismiss the plaintiffs’ amended complaints.
−Removed: On April 26, 2019, a group of plaintiffs, acting on behalf of themselves and on behalf of a putative class of indirect purchasers of beef for personal use filed a class action complaint against us, other beef packers, and Agri Stats in the United States District Court for the District of Minnesota.
+Added: Other similar lawsuits were filed by cattle ranchers in other district courts which were then transferred to the United States District Court for the District of Minnesota and consolidated and styled as In Re Cattle Antitrust Litigation .
+Added: On February 18, 2021, we moved to dismiss the amended complaints, and on September 23, 2021, the court granted the motion with respect to certain state law claims but denied the motion with respect to the plaintiffs’ federal antitrust claims.
+Added: The Company has not recorded any liability for this matter as of January 1, 2022 as it does not believe a loss is probable or reasonably estimable at this time because the Company believes that it has valid and meritorious defenses against the allegations and because the classes have not yet been defined or certified by the court.
+Added: On April 26, 2019, a putative class of indirect purchasers filed a class action complaint against us, other beef packers, and Agri Stats in the United States District Court for the District of Minnesota.
The plaintiffs allege that the packer defendants conspired to reduce slaughter capacity by closing or idling plants, limiting their purchases of cash cattle, coordinating their procurement of cash cattle, and reducing their slaughter numbers so as to reduce beef output, all in order to artificially raise prices of beef.
The plaintiffs seek, among other things, damages under state antitrust and consumer protection statutes and the common law of approximately 30 states, as well as injunctive relief.
−Removed: The plaintiffs filed a first amended complaint in which the claims against Agri Stats were dismissed and subsequently filed a second amended complaint on November 22, 2019.
−Removed: We moved to dismiss the second amended complaint.
The indirect consumer purchaser litigation is styled Peterson v.
JBS USA Food Company Holdings, et al.
−Removed: Additional complaints have been filed on behalf of a putative class of direct purchasers of beef alleging violations of Section 1 of the Sherman Act based on an alleged conspiracy to artificially fix, raise, and stabilize the wholesale price for beef, as well as on behalf of a putative class of commercial and institutional indirect purchasers of beef alleging violations of Section 1 of the Sherman Act, various state antitrust laws and unjust enrichment based on an alleged conspiracy to artificially inflate the price for beef.
+Added: Additional complaints have been filed on behalf of a putative class of direct purchasers of beef containing allegations of violations of Section 1 of the Sherman Act based on an alleged conspiracy to artificially fix, raise, and stabilize the wholesale price for beef, as well as on behalf of a putative class of commercial and institutional indirect purchasers of beef containing allegations of violations of Section 1 of the Sherman Act, various state antitrust laws and unjust enrichment based on an alleged conspiracy to artificially inflate the price for beef.
On September 28, 2020, the court granted our motion to dismiss the complaint.
On December 28, 2020, the plaintiffs filed amended complaints.
−Removed: On February 18, 2021, we filed a motion to dismiss the plaintiffs’ amended complaints.
−Removed: On August 30, 2019, Judy Jien, Kieo Jibidi and Elaisa Clement, acting on their own behalf and a putative class of non-supervisory production and maintenance employees at chicken processing plants in the continental United States, filed a class action complaint against us and certain of our subsidiaries, as well as several other poultry processing companies, in the United States District Court for the District of Maryland.
−Removed: An additional complaint making similar allegations was also filed by Emily Earnest.
+Added: On February 18, 2021, we moved to dismiss the amended complaints, and on September 23, 2021, the court granted the motion with respect to certain state law claims but denied the motion with respect to the plaintiffs’ federal antitrust claims.
+Added: Since the original filing, certain putative class members have opted out of the matter and are proceeding with individual direct actions making similar claims, and others may do so in the future.
+Added: The Company has not recorded any liability for this matter as it does not believe a loss is probable or reasonably estimable at this time because the Company believes that it has valid and meritorious defenses against the allegations and because the classes have not yet been defined or certified by the court.
+Added: On May 22, 2020, December 23, 2020 and October 29, 2021, we received civil investigative demands ("CIDs") from DOJ's Antitrust Division.
+Added: The CIDs request information related to the fed cattle and beef packing markets.
+Added: We have been cooperating with the DOJ’s Antitrust Division with respect to the CIDs.
+Added: The Offices of the Attorney General for multiple states are participating in the investigation and coordinating with the DOJ.
+Added: Wage Rate Litigation
+Added: On August 30, 2019, a putative class of non-supervisory production and maintenance employees at chicken processing plants in the continental United States filed class action complaints against us and certain of our subsidiaries, as well as several other poultry processing companies, in the United States District Court for the District of Maryland.
The plaintiffs allege that the defendants directly and through a wage survey and benchmarking service exchanged information regarding labor rates in an effort to depress and fix the rates of wages for non-supervisory production and maintenance workers in violation of federal antitrust laws.
The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest, as well as declaratory and injunctive relief.
−Removed: The court consolidated the Jien and Earnest cases for coordinated pretrial proceedings.
−Removed: Following the consolidation, two additional lawsuits were filed by individuals making similar allegations, and others may do so in the future.
−Removed: The plaintiffs filed an amended consolidated complaint containing additional allegations concerning turkey processing plants and named additional defendants.
+Added: Additional lawsuits making similar allegations were consolidated including an amended consolidated complaint containing additional allegations concerning turkey processing plants naming additional defendants.
We moved to dismiss the amended consolidated complaint.
−Removed: On September 16, 2020, the court dismissed claims against Tyson and certain other defendants without prejudice because the complaint improperly grouped together corporate subsidiaries.
+Added: On September 16, 2020, the court dismissed claims against us and certain other defendants without prejudice because the complaint improperly grouped together corporate subsidiaries.
The court otherwise denied the defendants’ motions to dismiss and sustained claims based on alleged conspiracies to fix wages and exchange information against five other defendants.
−Removed: The court granted the plaintiffs leave to file an amended complaint to address the impermissible group pleading.
−Removed: On October 16, 2020, the plaintiffs filed a second amended complaint reasserting their claims.
−Removed: On December 18, 2020, defendants moved to dismiss certain claims in the second amended complaint.
−Removed: On March 10, 2021, the court denied the defendants’ motion.
−Removed: On April 7, 2021, we and the other defendants answered the second amended complaint.
−Removed: For the third quarter of fiscal 2021, the Company recorded an accrual for estimated probable losses that it expects to incur for this matter in the Company’s Consolidated Financial Statements.
+Added: The parties are now conducting discovery.
+Added: In the third quarter of fiscal 2021, the Company recorded an accrual for the estimated probable losses that it expects to incur for this matter in the Company’s Consolidated Financial Statements.
+Added: Other Matters
Our subsidiary, The Hillshire Brands Company (formerly named Sara Lee Corporation), is a party to a consolidation of cases filed by individual complainants with the Republic of the Philippines, Department of Labor and Employment and the National Labor Relations Commission (“NLRC”) from 1998 through July 1999.
2 unchanged sentences
The complaint alleges, among other things, that the respondents engaged in unfair labor practices in connection with the termination of manufacturing operations in the Philippines in 1995 by Aris Philippines, Inc., a former subsidiary of The Hillshire Brands Company.
−Removed: In late 2004, a labor arbiter ruled against the respondents and awarded the complainants PHP 3,453,664,710 (approximately U.S.
−Removed: $ 70 million) in damages and fees.
−Removed: The respondents appealed the labor arbiter's ruling, and it was subsequently set aside by the NLRC in December 2006.
−Removed: Subsequent to the NLRC’s decision, the parties filed numerous appeals, motions for reconsideration and petitions for review, certain of which remained outstanding for several years.
−Removed: While various of those appeals, motions and/or petitions were pending, The Hillshire Brands Company, on June 23, 2014, without admitting liability, filed a settlement motion requesting that the Supreme Court of the Philippines order dismissal with prejudice of all claims against it and certain other respondents in exchange for payments allocated by the court among the complainants in an amount not to exceed PHP 342,287,800 (approximately U.S.
−Removed: $ 7 million).
−Removed: Based in part on its finding that the consideration to be paid to the complainants as part of such settlement was insufficient, the Supreme Court of the Philippines denied the respondents’ settlement motion and all motions for reconsideration thereof.
−Removed: The Supreme Court of the Philippines also set aside as premature the NLRC’s December 2006 ruling.
−Removed: As a result, the cases were remanded back before the NLRC to rule on the merits of the case.
−Removed: On December 15, 2016, we learned that the NLRC rendered its decision on November 29, 2016, regarding the respondents’ appeals regarding the labor arbiter’s 2004 ruling in favor of the complainants.
−Removed: The NLRC increased the award for 4,922 of the total 5,984 complainants to PHP 14,858,495,937 (approximately U.S.
−Removed: $ 301 million).
−Removed: However, the NLRC approved a prior settlement reached with the group comprising approximately 18 % of the class of 5,984 complainants, pursuant to which The Hillshire Brands Company agreed to pay each settling complainant PHP 68,000 (approximately U.S.
−Removed: The settlement payment was made on December 21, 2016, to the NLRC, which is responsible for distributing the funds to each settling complainant.
−Removed: On December 27, 2016, the respondents filed motions for reconsideration with the NLRC asking that the award be set aside.
−Removed: The NLRC denied respondents' motions for reconsideration in a resolution received on May 5, 2017 and entered a judgment on the award on July 24, 2017.
−Removed: Each of Aris Philippines, Inc., Sara Lee Corporation and Sara Lee Philippines, Inc.
−Removed: appealed this award and sought an injunction to preclude enforcement of the award to the Philippines Court of Appeals.
−Removed: On November 23, 2017, the Court of Appeals granted a writ of preliminary injunction that precluded execution of the NLRC award during the pendency of the appeal.
+Added: In late 2004, a labor arbiter ruled against the respondents and awarded the complainants approximately $ 68 million in damages and fees.
+Added: From 2004 through 2014, the parties filed numerous appeals, motions for reconsideration and petitions for review, certain of which remained outstanding for several years.
+Added: On December 15, 2016, we learned that the NLRC rendered its decision on November 29, 2016, regarding the respondents’ appeals from the labor arbiter’s 2004 ruling in favor of the complainants.
+Added: The NLRC increased the award for 4,922 of the total 5,984 complainants to approximately $ 292 million.
+Added: However, the NLRC approved a prior settlement reached with the group comprising approximately 18 % of the class of 5,984 complainants, pursuant to which The Hillshire Brands Company agreed to pay each settling complainant approximately $ 1,300 .
+Added: The parties filed numerous appeals, motions for reconsideration and petitions for review related to the NLRC award and settlement payment.
The Court of Appeals subsequently vacated the NLRC’s award on April 12, 2018.
−Removed: Complainants have filed motions for reconsideration with the Court of Appeals.
−Removed: On November 14, 2018, the Court of Appeals denied claimants’ motions for reconsideration and granted defendants’ motion to release and discharge the preliminary injunction bond.
−Removed: Claimants have since filed petitions for writ of certiorari with the Supreme Court of the Philippines.
−Removed: The Supreme Court has accepted the case for review.
−Removed: We continue to maintain an accrual for this matter.
+Added: Complainants have filed motions for reconsideration with the Court of Appeals which were denied.
+Added: Claimants have since filed petitions for writ of certiorari with the Supreme Court of the Philippines, which has accepted.
+Added: The Company continues to maintain an accrual for estimated probable losses for this matter in the Company’s Consolidated Financial Statements.
Various claims have been asserted against the Company, its subsidiaries, and its officers and agents by, and on behalf of, team members who claim to have contracted COVID-19 in our facilities.
+Added: The Company has not recorded any liability for these matters as it does not believe a loss is probable or reasonably estimable at this time because it believes the allegations in the claims are without merit.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.