What changed in this filing

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Item 1. Financial Statements

2023-02-06 compared with 2022-08-08 · 200 added, 173 removed, 604 unchanged (38% of the section changed)

3 unchanged sentences

(In millions, except per share data)

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Sales $ 13,260 $ 12,933

25 unchanged sentences

(In millions)

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Net Income $ 320 $ 1,126

12 unchanged sentences

(In millions, except share and per share data)

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Current Assets:

26 unchanged sentences

Accumulated other comprehensive gain (loss) ( 215 ) ( 297 )

Treasury stock, at cost – 88 million shares at July 2, 2022 and 83 million shares at October 2, 2021 ( 4,679 ) ( 4,138 )

Treasury stock, at cost – 92 million shares at December 31, 2022 and 88 million shares at October 1, 2022 ( 4,944 ) ( 4,683 )

Total Tyson Shareholders’ Equity 19,635 19,702

6 unchanged sentences

(In millions)

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Shares Amount Shares Amount Shares Amount Shares Amount

Three Months Ended

December 31, 2022 January 1, 2022

Shares Amount Shares Amount

Class A Common Stock:

13 unchanged sentences

Balance at beginning of period ( 297 ) ( 172 )

Other comprehensive income (loss) ( 111 ) 25 ( 83 ) 54

Other comprehensive income 82 —

Balance at end of period ( 215 ) ( 172 )

8 unchanged sentences

Net income attributable to noncontrolling interests 4 5

Distributions to noncontrolling interest ( 1 ) ( 6 ) ( 1 ) ( 8 )

Other ( 10 ) ( 5 ) ( 8 ) ( 2 )

Business combinations 28 —

Currency translation and other 11 3

Total Equity Attributable to Noncontrolling Interests $ 152 $ 139

4 unchanged sentences

(In millions)

Nine Months Ended

July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Cash Flows From Operating Activities:

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Proceeds from sale of marketable securities 7 7

Acquisition, net of cash acquired ( 39 ) —

Acquisition of equity investments ( 36 ) ( 45 )

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Actual results could differ from those estimates.

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 2, 2022 and the results of operations for the three and nine months ended July 2, 2022 and July 3, 2021.

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 December 31, 2022 and the results of operations for the three months ended December 31, 2022 and January 1, 2022.

Results of operations and cash flows for the periods presented are not necessarily indicative of results to be expected for the full year.

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All significant intercompany accounts and transactions have been eliminated in consolidation.

Goodwill is initially recorded at fair value and not amortized, but is reviewed for impairment at least annually or more frequently if impairment indicators arise.

Our goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary.

If it is determined, based on qualitative factors, the fair value of the reporting unit may be more likely than not less than carrying amount, or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required.

The quantitative test is to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill.

If the carrying amount of the reporting unit exceeds the fair value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of goodwill.

During fiscal 2022, we determined that all of our material reporting units’ estimated fair value exceeded their carrying value by more than 20 %, other than one of our Chicken segment reporting units and two of our International reporting units with goodwill totaling $ 0.6 billion and $ 0.2 billion, respectively, at October 1, 2022.

Conditions existed as of the end our first quarter that required an interim assessment of goodwill for two of our International reporting units which had goodwill totaling $ 0.2 billion at December 31, 2022.

Based on the interim assessment, we determined no impairment was necessary as the fair value of the reporting units exceeded their carrying value.

Some of the inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, market EBITDA comparables and credit ratings.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a material change could occur.

If our actual results are not consistent with our estimates and assumptions used to calculate fair value, it could result in additional material impairments of our goodwill.

Use of Estimates

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Actual results could differ from those estimates.

Risks and Uncertainties

We have considered the impact of the global novel coronavirus pandemic (“COVID-19” or “pandemic”) on our consolidated condensed financial statements.

In addition to the COVID-19 impacts already experienced, there likely will be future impacts, the extent of which is uncertain and largely subject to whether the severity worsens or duration lengthens.

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.

There have been no material changes to the summary of certain accounting estimates, 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.

During the first quarter of fiscal 2023, we revised estimates and recorded adjustments of approximately $ 30 million primarily to reduce certain employee compensation accruals recorded as of October 1, 2022.

Recently Issued Accounting Pronouncements

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.

In September 2022, the Financial Accounting Standards Board (the "FASB") issued guidance that requires additional disclosures for supplier finance programs to allow users to better understand the nature, activity and potential magnitude of the programs.

The guidance, except for a requirement for rollforward information, is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2022, our fiscal 2024.

Disclosure of rollforward information is effective for fiscal years after December 15, 2023, our fiscal 2025.

Early adoption is permitted and the retrospective transition method should be applied for all amendments except rollforward information, which should be applied prospectively.

We are currently evaluating the impact this guidance will have on our consolidated financial statements.

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.

The optional guidance, which became effective on March 12, 2020 and was set to end on December 31, 2022, was extended by new guidance issued by the FASB on December 21, 2022 to apply through December 31, 2024.

The temporary accounting relief provided in the optional guidance 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, 2024.

Changes in Accounting Principles

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.

Early adoption is permitted for annual periods and interim periods within those annual periods beginning after December 15, 2020, our fiscal 2022.

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.

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.

The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2020, our fiscal 2022.

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

In the fourth quarter of fiscal 2022, we entered into an agreement with Saudi Arabia-based Tanmiah Food Company, through which we will acquire a 60 % equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products, and a 15 % equity stake in Agricultural Development Company, a fully integrated poultry company, for a total purchase price of approximately $ 70 million.

The transaction is subject to customary adjustments and government approval and is expected to close in calendar year 2022.

In the third quarter of fiscal 2021, we acquired a 49 % minority interest in a Malaysian producer of feed and poultry products for $ 44 million in addition to future contingent payments of up to approximately $ 65 million.

We are accounting for the investment under the equity method.

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.

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.

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 was not deductible for tax purposes.

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.

In the first quarter of fiscal 2023, we completed the acquisition of a 60 % equity stake in Supreme Foods Processing Company ("SFPC"), a producer and distributor of value-added and cooked chicken and beef products, and a 15 % equity stake in Agricultural Development Company ("ADC"), a fully integrated poultry company, for a total purchase price of approximately $ 75 million, net of cash acquired.

Both SFPC and ADC were subsidiaries of Tanmiah Food Company.

The results of SFPC, subsequent to the acquisition closing, are included in International/Other for segment presentation.

SFPC's results from the date of acquisition through December 31, 2022 were insignificant to our Consolidated Condensed Statements of Income.

We are accounting for the investment in ADC under the equity method.

Processed products, livestock and supplies and other are valued at the lower of cost or net realizable value.

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.

At July 2, 2022, the cost of inventories was determined by either the first-in, first-out method or the weighted-average method, which is consistent with the methods used at October 2, 2021.

At December 31, 2022, the cost of inventories was determined by either the first-in, first-out method or the weighted-average method, which is consistent with the methods used at October 1, 2022.

The following table reflects the major components of inventory (in millions):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Processed products $ 3,160 $ 3,188

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The major categories of property, plant and equipment and accumulated depreciation are as follows (in millions):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Land $ 218 $ 214

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Other current liabilities are as follows (in millions):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Accrued salaries, wages and benefits $ 665 $ 995

Taxes payable 302 277

Accrued current legal contingencies (a) 203 567

Accrued current legal contingencies 194 215

Other 933 884

Total other current liabilities $ 2,094 $ 2,371

(a) $ 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 Sheet as of October 2, 2021 and no funds were held in the escrow account as of July 2, 2022.

RESTRUCTURING AND RELATED CHARGES

In the fourth quarter of fiscal 2022, the Company approved a restructuring program (the “2022 Program”), which is expected to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies.

In conjunction with the 2022 Program, the Company plans to bring together all its corporate team members from the Chicago, Downers Grove and Dakota Dunes area corporate locations to its world headquarters in Springdale, Arkansas, through a phased relocation commencing in early calendar year 2023.

We anticipate the 2022 Program and associated expenses will be substantially complete in our fiscal 2025.

The following table reflects the total pretax anticipated expenses associated with the 2022 Program (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 23 $ 8 $ 7 $ 51 $ 12 $ 101

Relocation and related costs 35 15 1 57 1 109

Accelerated depreciation 6 2 — 12 — 20

Contract and lease terminations — — — 31 — 31

Professional and other fees 4 1 — 7 1 13

Total 2022 Program $ 68 $ 26 $ 8 $ 158 $ 14 $ 274

Restructuring costs include severance expenses, and related charges include costs directly associated with the 2022 Program such as relocation, contract and lease terminations, professional fees and accelerated depreciation resulting from the closure of facilities.

We anticipate that $ 56 million and $ 218 million of the total pretax anticipated expense will be recorded in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the table above are $ 256 million of charges that have resulted or will result in cash outflows and $ 18 million in non-cash charges.

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

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 2 $ 1 $ — $ 4 $ 5 $ 12

Relocation and related costs 1 1 1 1 — 4

Accelerated depreciation 2 — — 4 — 6

Contract and lease terminations — — — ( 2 ) — ( 2 )

Professional and other fees — — — 1 — 1

Total $ 5 $ 2 $ 1 $ 8 $ 5 $ 21

For the first quarter of fiscal 2023, we recorded restructuring and related charges associated with the 2022 Program of $ 8 million and $ 13 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the above results are $ 17 million of charges that have resulted or will result in cash outflows and $ 4 million in non-cash charges.

The following table reflects the pretax 2022 Program charges to date by reportable segment (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 18 $ 6 $ 6 $ 40 $ 8 $ 78

Relocation and related costs 1 1 1 1 — 4

Accelerated depreciation 2 — — 4 — 6

Contract and lease terminations — — — ( 2 ) — ( 2 )

Professional and other fees — — — 1 — 1

Total $ 21 $ 7 $ 7 $ 44 $ 8 $ 87

As of the first quarter of fiscal 2023, we recorded restructuring and related charges to date associated with the 2022 Program of $ 26 million and $ 61 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the above results are $ 83 million of charges to date that have resulted or will result in cash outflows and $ 4 million in non-cash charges to date.

The following table reflects our liability related to the 2022 Program, which was recognized in other current liabilities in our Consolidated Condensed Balance sheet as of December 31, 2022 (in millions):

Balance at October 1, 2022 Restructuring Expense Payments Changes in Estimates Balance at

December 31, 2022

Severance costs $ 66 $ 12 $ 5 $ — $ 73

Relocation and related costs — 4 2 — 2

Professional and other fees — 1 1 — —

Total $ 66 $ 17 $ 8 $ — $ 75

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

The major components of debt are as follows (in millions):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Revolving credit facility $ — $ —

1 unchanged sentence

Senior notes:

4.50% Senior notes due June 2022 — 1,000

3.90% Senior notes due September 2023 400 400

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Revolving Credit Facility and Letters of Credit

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.

The revolving credit facility supports short-term funding needs and serves as a backstop to our commercial paper program.

We have a $ 2.25 billion revolving credit facility that supports short-term funding needs and serves as a backstop to our commercial paper program.

The facility will mature and the commitments thereunder will terminate in September 2026 with options for two one-year extensions.

At July 2, 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.

At July 2, 2022, we had $ 101 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.

At December 31, 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.

At December 31, 2022 we had $ 103 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.

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.

In November 2022, we entered into an amendment to change the reference rate from the London interbank offered rate (commonly referred to as LIBOR) to a rate based on the secured overnight financing rate (commonly referred to as SOFR).

Commercial Paper Program

We have a commercial paper program under which we may issue unsecured short-term promissory notes.

In December 2021, we amended our existing commercial paper program, which increased our maximum borrowing capacity to $ 1.5 billion.

As of July 2, 2022, we had no commercial paper outstanding .

We have a commercial paper program under which we may issue unsecured short-term promissory notes up to an aggregate maximum principal amount of $ 1.5 billion.

As of December 31, 2022, we had no commercial paper outstanding .

Our ability to access commercial paper in the future may be limited or its costs increased.

June 2022 Notes

On March 15, 2022, we redeemed the $ 1 billion outstanding balance of the Senior Notes due June 2022 using cash on hand.

Debt Covenants

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and engage in certain consolidations, mergers and sales of assets.

We were in compliance with all debt covenants at July 2, 2022.

We were in compliance with all debt covenants at December 31, 2022.

Share Repurchases

As of July 2, 2022, 12.0 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.

As of December 31, 2022, 7.3 million shares remained available for repurchase under the Company's share repurchase program.

The 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.

In addition to the share repurchase program, we purchase shares on the open market to fund certain obligations under our equity compensation plans.

A summary of share repurchases of our Class A stock is as follows (in millions):

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Shares Dollars Shares Dollars Shares Dollars Shares Dollars

Three Months Ended

December 31, 2022 January 1, 2022

Shares Dollars Shares Dollars

Shares repurchased:

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Total share repurchases 4.9 $ 313 4.2 $ 348

Our effective tax rate was 23.6 % and 22.1 % for the third quarter of fiscal 2022 and 2021, respectively and 22.1 % and 22.9 % for the first nine months of fiscal 2022 and 2021, respectively.

The effective tax rates for the third quarter and first nine months of fiscal 2022 and 2021 were higher than the federal statutory tax rate primarily due to state taxes, partially offset by various tax benefits.

The effective tax rate for the first nine months of fiscal 2022 also includes a $ 36 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the first quarter.

Unrecognized tax benefits were $ 160 million and $ 152 million at July 2, 2022 and October 2, 2021, respectively.

We do not expect material changes to our unrecognized tax benefits during the next twelve months.

Our effective tax rate was 26.1 % and 20.2 % for the first quarter of fiscal 2023 and 2022, respectively.

The effective tax rate for the first quarter of fiscal 2023 was higher than the federal statutory tax rate primarily due to state taxes.

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 of fiscal 2022, and various other tax benefits.

Unrecognized tax benefits were $ 154 million and $ 152 million at December 31, 2022 and October 1, 2022, respectively.

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.

At that time, the assessment totaled approximately $ 380 million ( 7.8 billion Mexican pesos), which includes tax, inflation adjustment, interest and penalties.

The assessment totals approximately $ 411 million ( 8.3 billion Mexican pesos), which includes tax, inflation adjustment, interest and penalties.

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.

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The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share data):

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Net income $ 320 $ 1,126

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Class B $ 0.450 $ 0.428

Approximately 2 million of our stock-based compensation shares were antidilutive for the three and nine months ended July 2, 2022.

Approximately 2 million and 4 million of our stock-based compensation shares were antidilutive for the three and nine months ended July 3, 2021, respectively.

Approximately 4 million and 2 million of our stock-based compensation shares were antidilutive for the three months ended December 31, 2022 and January 1, 2022, respectively.

These shares were not included in the diluted earnings per share calculation.

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Additionally, our derivative contracts are mostly short-term in duration and we generally do not make use of credit-risk-related contingent features.

No significant concentrations of credit risk related to our derivative financial instruments existed at July 2, 2022.

No significant concentrations of credit risk existed at December 31, 2022.

We had the following net aggregated outstanding notional amounts related to our derivative financial instruments:

in millions, except soybean meal tons Metric July 2, 2022 October 2, 2021

in millions, except soybean meal tons Metric December 31, 2022 October 1, 2022

Corn Bushels 61 44

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Cash Flow Hedges

Derivative instruments are designated as hedges against changes in the amount of future cash flows related to procurement of certain commodities utilized in our production processes as well as interest rates related to our variable rate debt.

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.

As of July 2, 2022, we had $ 14 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.

During the nine months ended July 2, 2022 and July 3, 2021, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.

For the nine months ended July 2, 2022 and July 3, 2021, we had no gains or losses recognized in OCI on derivatives designated as cash flow hedges.

Gains and losses representing hedge ineffectiveness are recognized in earnings in the current period.

Ineffectiveness related to our cash flow hedges was not significant for the three months ended December 31, 2022, and January 1, 2022.

As of December 31, 2022, we had $ 13 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.

During the three months ended December 31, 2022 and January 1, 2022, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.

For the three months ended December 31, 2022 and January 1, 2022, we had no gains or losses recognized in OCI on derivatives designated as cash flow hedges.

Fair Value Hedges

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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.

Ineffectiveness related to fair value hedges was not significant for the three and nine months ended July 2, 2022, and July 3, 2021.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of July 2, 2022 and October 2, 2021 (in millions):

Consolidated Condensed Balance Sheets Classification July 2, 2022 October 2, 2021

Ineffectiveness related to fair value hedges was not significant for the three months ended December 31, 2022, and January 1, 2022.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of December 31, 2022 and October 1, 2022 (in millions):

Consolidated Condensed Balance Sheets Classification December 31, 2022 October 1, 2022

Inventory $ 7 $ ( 12 )

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The following table sets forth the total amounts of each income and expense line item presented in the Consolidated Condensed Statements of Income in which the effects of hedges are recorded (in millions):

Consolidated Condensed Statements of Income Classification Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Consolidated Condensed Statements of Income Classification Three Months Ended

December 31, 2022 January 1, 2022

Cost of Sales $ 12,292 $ 10,918

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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):

Consolidated Condensed Statements of Income Classification Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Consolidated Condensed Statements of Income Classification Three Months Ended

December 31, 2022 January 1, 2022

Cost of Sales Gain (Loss) on cash flow hedges reclassified from OCI to Earnings:

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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):

July 2, 2022 Level 1 Level 2 Level 3 Netting (a) Total

December 31, 2022 Level 1 Level 2 Level 3 Netting (a) Total

Other Current Assets:

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Undesignated — 110 — ( 38 ) 72

Available-for-sale securities (current) — 2 — — 2

Other Assets:

Available-for-sale securities — 65 38 — 103

Available-for-sale securities (non-current) — 67 33 — 100

Deferred compensation assets 29 357 — — 386

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Undesignated — 154 — ( 58 ) 96

Available-for-sale securities (current) — 1 — — 1

Other Assets:

Available-for-sale securities — 61 48 — 109

Available-for-sale securities (non-current) — 65 35 — 100

Deferred compensation assets 38 327 — — 365

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(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.

Additionally, at July 2, 2022, and October 2, 2021, we had $ 60 million and $ 56 million, respectively, of net cash collateral with various counterparties where master netting arrangements exist and held no cash collateral.

Additionally, at December 31, 2022, and October 1, 2022, we had $ 30 million and $ 10 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):

Nine Months Ended

July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Balance at beginning of year $ 35 $ 48

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Balance at end of period $ 33 $ 46

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

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:

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Our investments in marketable debt securities are classified as available-for-sale and are reported at fair value based on pricing models and quoted market prices adjusted for credit and non-performance risk.

Short-term investments with maturities of less than 12 months are included in Other current assets in the Consolidated Condensed Balance Sheets and primarily include certificates of deposit and commercial paper.

Short-term investments with maturities of less than 12 months are included in Other current assets in the Consolidated Condensed Balance Sheets.

All other marketable debt securities are included in Other Assets in the Consolidated Condensed Balance Sheets and have maturities generally less than 47 years.

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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):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Cost Basis Fair

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Losses on debt securities where we do not have the intent, or would not more than likely be required to sell the security prior to recovery, would be further evaluated to determine whether the loss is credit or non-credit related.

Credit-related losses would be recorded through an allowance for credit losses in earnings and non-credit related losses in OCI.

Credit-related losses would be recorded through an allowance for credit losses through earnings and non-credit related losses through OCI.

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.

We recognized no direct write-offs or allowances for credit losses in earnings for the three and nine months ended July 2, 2022, and July 3, 2021.

We recognized no direct write-offs or allowances for credit losses in earnings for the three months ended December 31, 2022, and January 1, 2022.

Deferred Compensation Assets

We maintain non-qualified deferred compensation plans for certain executives and other highly compensated employees.

Investments are maintained within a trust and include money market funds, mutual funds and life insurance policies.

We maintain non-qualified deferred compensation plans for certain executives and other highly compensated team members.

Investments are generally maintained within a trust and include money market funds, mutual funds and life insurance policies.

The cash surrender value of the life insurance policies is invested primarily in mutual funds.

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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.

In the nine months ended July 2, 2022, we recognized gains of $ 37 million in Other, net in the Consolidated Condensed Statements of Income, based upon observable price changes.

In the three months ended January 1, 2022, we recognized gains of $ 30 million in Other, net in the Consolidated Condensed Statements of Income, based upon observable price changes.

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.

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.

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 December 31, 2022.

Other Financial Instruments

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Fair value and carrying value for our debt are as follows (in millions):

July 2, 2022 October 2, 2021

December 31, 2022 October 1, 2022

Fair Value Carrying Value Fair Value Carrying Value

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The before and after-tax changes in the components of other comprehensive income (loss) are as follows (in millions):

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Before Tax Tax After Tax Before Tax Tax After Tax Before Tax Tax After Tax Before Tax Tax After Tax

Three Months Ended

December 31, 2022 January 1, 2022

Before Tax Tax After Tax Before Tax Tax After Tax

Derivatives accounted for as cash flow hedges:

(Gain) loss reclassified to interest expense $ 1 $ — $ 1 $ — $ — $ —

(Gain) loss reclassified to cost of sales — — — — — — — — — 1 — 1

Unrealized gain (loss) — — — ( 1 ) — ( 1 )

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International/Other primarily includes our foreign operations in Australia, China, Malaysia, Mexico, the Netherlands, South Korea and Thailand, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Beef includes our operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal cuts and case-ready products.

Products are marketed domestically to consumer products and food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets.

This segment also includes sales from allied products such as hides and variety meats, as well as logistics operations to move products through the supply chain.

Beef includes our operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products.

Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets.

This segment also includes sales from specialty products such as hides and variety meats, as well as logistics operations to move products through the supply chain.

Pork includes our operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products.

This segment also includes our live swine group, related allied product processing activities and logistics operations to move products through the supply chain.

Chicken includes our domestic operations related to raising and processing live chickens into, and purchasing raw materials for, fresh, frozen and value-added chicken products, as well as sales from allied products.

Our value-added chicken products primarily include breaded chicken strips, nuggets, patties, tenders, wings and other ready-to-fix or fully cooked chicken parts.

Products are marketed domestically to consumer products and food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.

This segment also includes our live swine group, related specialty product processing activities and logistics operations to move products through the supply chain.

Chicken includes our domestic operations related to raising and processing live chickens into, and purchasing raw materials for fresh, frozen and value-added chicken products, as well as sales from specialty products.

Our value-added chicken products primarily include breaded chicken strips, nuggets, patties and other ready-to-fix or fully cooked chicken parts.

Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.

This segment also includes logistics operations to move products through our domestic supply chain and the global operations of our chicken breeding stock subsidiary.

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Products primarily include ready-to-eat sandwiches, sandwich components such as flame-grilled hamburgers and Philly steaks, pepperoni, bacon, breakfast sausage, turkey, lunchmeat, hot dogs, flour and corn tortilla products, appetizers, snacks, prepared meals, ethnic foods, side dishes, meat dishes, breadsticks and processed meats.

Products are marketed domestically to consumer products and food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.

Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.

We allocate expenses related to corporate activities to the segments, except for third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC, which are included in International/Other.

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Information on segments and a reconciliation to income before income taxes are as follows (in millions):

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Beef $ 4,723 $ 5,002

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Total Sales $ 13,260 $ 12,933

Three Months Ended Nine Months Ended

July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Three Months Ended

December 31, 2022 January 1, 2022

Operating Income (Loss):

$ 533 $ 1,120 $ 2,127 $ 2,093

Pork ( 21 ) 164

277 ( 279 ) 615 ( 489 )

Prepared Foods 258 186

International/Other (c)

International/Other ( 5 ) 9

Total Operating Income 467 1,455

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Income before Income Taxes $ 434 $ 1,410

(a) Beef segment results for the three and nine months ended July 2, 2022 included $ 27 million recognized in Cost of Sales of insurance proceeds related to a fire at one of our production facilities in the fourth quarter of fiscal 2019.

Additionally, 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.

In the fourth quarter of fiscal 2022, a bankruptcy court approved a settlement that awards the Company approximately $ 65 million in additional recoveries.

We will recognize these additional recoveries in the period they become realizable or realized, which we anticipate will be in the fourth quarter of fiscal 2022.

(b) Chicken segment results for the three and nine months ended July 2, 2022 included insurance proceeds, net of costs incurred, of $ 8 million and $ 26 million, respectively, recognized in Cost of Sales related to a fire at one of our production facilities in the fourth quarter of fiscal 2021.

Additionally, 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.

(c) International/Other results for the three and nine months ended July 3, 2021 included a $ 4 million loss and $ 23 million loss, respectively, related to the relocation of a production facility in China.

(a) Beef segment results for the three months ended December 31, 2022 included $ 42 million of insurance proceeds, net of costs incurred, recognized in Cost of Sales.

(b) Chicken segment results for the three months ended December 31, 2022 included $ 7 million of costs related to a fire at one of our production facilities, net of insurance proceeds, recognized in Cost of Sales.

Additionally, 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, related to a fire at our production facility in the fourth quarter of fiscal 2021.

The following tables further disaggregate our sales to customers by major distribution channels (in millions):

Three months ended July 2, 2022

Foodservice (b)

International (c)

Industrial and Other (d)

Intersegment Total

Beef $ 2,130 $ 1,255 $ 828 $ 611 $ 135 $ 4,959

Pork 466 133 313 405 302 1,619

Chicken 1,889 1,607 294 515 61 4,366

Prepared Foods 1,412 944 52 39 — 2,447

International/Other — — 602 — — 602

Intersegment — — — — ( 498 ) ( 498 )

Total $ 5,897 $ 3,939 $ 2,089 $ 1,570 $ — $ 13,495

Three months ended July 3, 2021

Foodservice (b)

International (c)

Industrial and Other (d)

Intersegment Total

Beef $ 2,365 $ 1,264 $ 704 $ 491 $ 130 $ 4,954

Pork 500 141 324 419 331 1,715

Chicken 1,500 1,492 197 270 17 3,476

Prepared Foods 1,359 877 37 50 — 2,323

International/Other — — 488 — — 488

Intersegment — — — — ( 478 ) ( 478 )

Total $ 5,724 $ 3,774 $ 1,750 $ 1,230 $ — $ 12,478

Nine months ended July 2, 2022

Three months ended December 31, 2022

Foodservice (b)

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Total $ 5,978 $ 3,790 $ 1,943 $ 1,549 $ — $ 13,260

Nine months ended July 3, 2021

Three months ended January 1, 2022

Foodservice (b)

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(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.

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.

COMMITMENTS AND CONTINGENCIES

We guarantee obligations of certain outside third parties, consisting primarily of grower loans, which are substantially collateralized by the underlying assets.

The remaining terms of the underlying obligations cover periods up to 9 years, and the maximum potential amount of future payments as of July 2, 2022 was no t significant.

The remaining terms of the underlying obligations cover periods up to 8 years, and the maximum potential amount of future payments as of December 31, 2022, was not significant.

The likelihood of material payments under these guarantees is not considered probable.

At July 2, 2022 and October 2, 2021, no significant liabilities for guarantees were recorded.

At December 31, 2022 and October 1, 2022, no significant liabilities for guarantees were recorded.

We have cash flow assistance programs in which certain livestock suppliers participate.

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Our maximum commitment associated with these programs is limited to the fair value of each participating livestock supplier’s net tangible assets.

The potential maximum commitment as of July 2, 2022 was approximately $ 295 million.

The total receivables under these programs were $ 6 million and $ 5 million at July 2, 2022 and October 2, 2021, respectively.

The potential maximum commitment as of December 31, 2022 was approximately $ 290 million.

The total receivables under these programs were $ 7 million and $ 6 million at December 31, 2022 and October 1, 2022, respectively.

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.

After analyzing residual credit risks and general market conditions, we have no allowance for these programs’ estimated uncollectible receivables at July 2, 2022, and October 2, 2021.

After analyzing residual credit risks and general market conditions, we had no allowance for these programs’ estimated uncollectible receivables at December 31, 2022, and January 1, 2022.

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.

These funds are generally considered restricted cash, which is reported in the Consolidated Condensed Balance Sheets in Other Assets.

We had no deposits at July 2, 2022 and $ 3 million of deposits at October 2, 2021.

We had no deposits at December 31, 2022 and October 1, 2022.

Additionally, under certain agreements, we transfer the related assets to various local government entities and receive Industrial Revenue Bonds.

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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.

At July 2, 2022, the total amount under these types of arrangements totaled $ 709 million.

At December 31, 2022, the total amount under these types of arrangements totaled $ 797 million.

Contingencies

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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.

There were no significant changes to our loss contingency accruals reflected in the Company’s Consolidated Condensed Statements of Income for the three and nine months ended July 2, 2022.

There were no significant changes to our loss contingency accruals reflected in the Company’s Consolidated Condensed Statements of Income for the three months ended December 31, 2022 and January 1, 2022.

Broiler Antitrust Civil Litigation

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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.

During the first quarter of fiscal 2023 and the full fiscal 2022, the Company reduced its total recorded legal contingency accrual by $ 11 million and $ 179 million, respectively, for amounts it had paid in connection with settlements related to this matter.

Accordingly, at December 31, 2022 and October 1, 2022 , the legal contingency accrual for claims related to this matter was $ 111 million and $ 122 million, respectively.

Government Investigations

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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.

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.

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 cooperating with the DOJ as part of our application for leniency under the DOJ’s Corporate Leniency Program.

Subsequently, the DOJ has announced indictments against additional individuals, as well as other poultry processing companies, alleging a conspiracy to fix prices and rig bids for broiler chicken products from at least 2012 until at least early 2019.

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.

We continue to fully cooperate with the DOJ in connection with the ongoing federal antitrust investigation.

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 cooperate with the DOJ, neither the Company nor any of our cooperating employees will face prosecution or criminal fines or penalties.

We continue to cooperate with the DOJ in connection with the ongoing federal antitrust investigation.

State Matters .

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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.

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.

In addition, we are fully 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.

In October 2022, we reached an agreement to settle all claims with the Washington Attorney General for $ 10.5 million for which the Company recorded an accrual in its Consolidated Financial Statements as of October 1, 2022, and on October 24, 2022, the Court entered the related consent decree resolving all claims in this matter between us and the Washington Attorney General.

The Company paid the settlement during the first quarter of fiscal 2023.

While we do not admit any liability as part of the settlement, we believe that the settlement was in the best interests of the Company and its shareholders to avoid the uncertainty, risk, expense and distraction of protracted litigation.

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.

Broiler Chicken Grower Litigation

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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.

The Court granted preliminary approval of the settlement on August 23, 2021 and final approval on February 18, 2022.

The Court granted preliminary approval of the settlement on August 23, 2021 and final approval on February 18, 2022, and the Company paid the settlement during fiscal 2022.

The DOJ’s Antitrust Division has opened a civil investigation into grower contracts and performance-based compensation.

We are cooperating with the investigation.

Pork Antitrust Litigation

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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.

On October 31, 2022, a class action complaint was filed on behalf of putative classes of indirect cattle producers against us, Tyson Fresh Meats, and other beef packer defendants in the United States District Court for the District of Kansas.

The plaintiffs allege that the defendants engaged in a conspiracy in violation of Section 1 of the Sherman Act, the Packers and Stockyards Act of 1921 and various state unfair competition and consumer protection laws from January 2015 to the present to reduce the price of cows, cattle, calves, steers or heifers 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.

The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest under state antitrust and consumer protection statutes and the common law of approximately 33 states, as well as declaratory and injunctive relief.

The indirect producer litigation is styled Sprecht et.

Tyson, Inc., et al .

A notice of potential tag-along has been filed with the Judicial Panel on Multi-District Litigation to transfer and consolidate the case with In re Cattle and Beef Antitrust Litigation , MDL No.

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.

On May 22, 2020, December 23, 2020 and October 29, 2021, we received civil investigative demands (“CIDs”) from the DOJ’s Civil Antitrust Division.

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The court denied the motion to dismiss on July 19, 2022.

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.

The DOJ’s Antitrust Division has opened a civil investigation into poultry human resources.

We will fully cooperate with the investigation.

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 Condensed Financial Statements.

There was no change to the accrual in fiscal 2022 or the first quarter of fiscal 2023.

The DOJ’s Antitrust Division has opened a civil investigation into human resources at several poultry companies.

We are cooperating with the investigation.

On November 11, 2022, a putative class of employees at beef-processing and pork-processing plants in the continental United States filed a class action complaint against us and certain of our subsidiaries, as well as several other beef-processing and pork-processing companies, in the United States District Court for the District of Colorado.

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 employees 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.

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 case remains at the pleading stage and the classes have not yet been defined or certified by the court.

Other Matters

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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.

What changed 10-Q

Item 1. Financial Statements