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Item 5. Other Information

2023-08-10 compared with 2023-05-08 · 20 added, 57 removed, 18 unchanged (81% of the section changed)

Other Information

Because this Quarterly Report on Form 10-Q is being filed within four business days from the date of a reportable event, we have elected to make the following disclosure in this Quarterly Report on Form 10-Q instead of in a Current Report on Form 8-K under Items 1.01 and 2.03.

Entry into a Material Definitive Agreement.

BofA Term Loan Agreement

On May 3, 2023, Tyson Foods, Inc.

(the “Company”) entered into a Term Loan Agreement with the lenders from time to time party thereto, Bank of America, N.A., as the administrative agent, and BofA Securities, Inc., as lead arranger (the “BofA Term Loan Agreement”).

In connection with the BofA Term Loan Agreement, the Company obtained a $1 billion term loan facility which the Company may draw at any time during the ten business days following the effective date of the BofA Term Loan Agreement (the “BofA Term Loan Facility').

Interest on borrowings under the BofA Term Loan Agreement will accrue and be payable, at the Company’s option, at an annual rate equal to (a) Term SOFR (as defined in the BofA Term Loan Agreement) plus the applicable margin, as described below, or (b) the Alternate Base Rate (as defined in the BofA Term Loan Agreement) plus the applicable margin, as described below.

The BofA Term Loan Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as Term SOFR (as defined in the BofA Term Loan Agreement) ceases to be available as a benchmark for establishing the interest rate on borrowings.

The BofA Term Loan Facility matures three years following the date of the initial borrowing under the BofA Term Loan Facility.

The applicable margin will correspond to the Company’s corporate credit rating from S&P or Moody’s, as applicable, as calculated in accordance with the terms of the BofA Term Loan Agreement.

The covenants under the BofA Term Loan Agreement include negative covenants limiting or restricting our ability to:

create liens and encumbrances;

merge, dissolve, liquidate or consolidate;

make acquisitions and investments;

dispose of or transfer assets;

change the nature of our business;

engage in certain transactions with affiliates;

and enter into hedging transactions, in each case, subject to certain qualifications and exceptions.

In addition, the BofA Term Loan Agreement requires the Company to maintain a minimum interest expense coverage ratio (Consolidated EBITDA to Consolidated Cash Interest Expense, each as defined in the BofA Term Loan Agreement) of at least 3.50 to 1.0 as of the end of each fiscal quarter (in each case, calculated on a trailing four fiscal quarter basis).

The BofA Term Loan Agreement contains customary events of default, including non-payment of obligations under other debt facilities, violation of affirmative or negative covenants, material inaccuracy of representations, non-payment of other material debt, bankruptcy or insolvency, ERISA and certain judgment defaults, change of control and failure of any guarantee to remain in full force and effect.

The Company may use the proceeds of borrowings under the BofA Term Loan Agreement to finance general working capital needs and for other general corporate purposes, including in connection with any acquisition.

The Company entered into the BofA Term Loan Agreement, in part, to finance the repayment of near-term commercial paper and senior note indebtedness.

Certain of the lenders party to the BofA Term Loan Agreement, the administrative agent and each of their affiliates engage in transactions with, and perform services for, the Company and its affiliates in the ordinary course of business and have engaged, and may in the future engage, in other commercial banking transactions and underwriting, investment banking, financial advisory and other financial services transactions with the Company and its affiliates.

The foregoing description of the BofA Term Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the BofA Term Loan Agreement, a copy of which is filed herewith as Exhibit 10.3 and incorporated by reference herein.

CoBank Term Loan Agreement

On May 3, 2023, the Company also entered into a Term Loan Agreement with the lenders from time to time party thereto, CoBank, ACB, as the administrative agent, and CoBank, ACB, as the sole lead arranger (the “CoBank Term Loan Agreement”).

The CoBank Term Loan Agreement provides for a $750 million delayed-draw term loan facility which the Company may draw in one or more borrowings at any time during the six months following the effective date of the CoBank Term Loan Agreement (the “CoBank Term Loan Facility”).

Interest on borrowings under the CoBank Term Loan Facility will accrue and be payable, at the Company’s option, at an annual rate equal to (a) the Adjusted Term SOFR Rate (as defined in the CoBank Term Loan Agreement) plus the applicable margin, (b) the Alternate Base Rate (as defined in the CoBank Term Loan Agreement) plus the applicable margin, as described below, (c) the Adjusted Daily Simple SOFR Rate (as defined in the CoBank Term Loan Agreement) plus the applicable margin, as described below, or (d) the Quoted Rate (as defined in the CoBank Term Loan Agreement).

The CoBank Term Loan Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as Term SOFR (as defined in the CoBank Term Loan Agreement) ceases to be available as a benchmark for establishing the interest rate on borrowings.

The CoBank Term Loan Facility matures five years from May 3, 2023, the date of closing.

The applicable margin will correspond to the Company’s corporate credit rating from S&P or Moody’s, as applicable, as calculated in accordance with the terms of the CoBank Term Loan Agreement.

The covenants under the CoBank Term Loan Agreement include negative covenants limiting or restricting our ability to:

create liens and encumbrances;

merge, dissolve, liquidate or consolidate;

make acquisitions and investments;

dispose of or transfer assets;

change the nature of our business;

engage in certain transactions with affiliates;

and enter into hedging transactions, in each case, subject to certain qualifications and exceptions.

In addition, the CoBank Term Loan Agreement requires the Company to maintain a minimum interest expense coverage ratio (Consolidated EBITDA to Consolidated Cash Interest Expense, each as defined in the CoBank Term Loan Agreement) of at least 3.50 to 1.0 as of the end of each fiscal quarter (in each case, calculated on a trailing four fiscal quarter basis).

The CoBank Term Loan Agreement contains customary events of default, including non-payment of obligations under other debt facilities, violation of affirmative or negative covenants, material inaccuracy of representations, non-payment of other material debt, bankruptcy or insolvency, ERISA and certain judgment defaults, change of control and failure of any guarantee to remain in full force and effect.

The Company may use the proceeds of borrowings under the CoBank Term Loan Agreement to refinance existing indebtedness of the Company and its subsidiaries, including indebtedness outstanding under the Company’s commercial paper program, and for other general corporate purposes, including in connection with any acquisition.

The Company entered into the CoBank Term Loan Agreement, in part, to finance the repayment of near-term commercial paper and senior note indebtedness.

The foregoing description of the CoBank Term Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the CoBank Term Loan Agreement, a copy of which is filed herewith as Exhibit 10.4 and incorporate by reference herein.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information described above under “Entry into a Material Definitive Agreement” is incorporated herein by reference.

Director and Officer Trading Arrangements

None of the Company's directors or executive officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's quarter ended July 1, 2023.

Because this Quarterly Report on Form 10-Q is being filed within four business days from the date of the reportable event below, we have elected to make the following disclosure in this Quarterly Report on Form 10-Q instead of in a Current Report on Form 8-K under Item 2.05.

Costs Associated with Exit or Disposal Activities

Facility Closures

In August 2023, after a strategic review of assets within its Chicken business, we authorized the closure of four chicken processing facilities located in Corydon, Indiana;

Dexter, Missouri;

Noel, Missouri;

and North Little Rock, Arkansas (collectively, the “Facilities”) (the “Facility Closures”).

The Company expects to maintain capacity within its Chicken business to serve its customers’ needs by optimizing the Company’s network asset utilization.

The Company expects to cease operations at the Facilities in the first two fiscal quarters of fiscal 2024.

Production will be consolidated into more efficient processing facilities.

Customers and consumers are not expected to be impacted.

The Company communicated this decision to affected employees on August 7, 2023.

Tyson estimates it will incur pre-tax costs of $300 million to $400 million in connection with the Facility Closures through the planned closure dates, primarily related to contract terminations, impairments, accelerated depreciation, severance and retention.

The estimate of the charges and expenditures that the Company expects to incur in connection with the Facility Closures, and the timing thereof, is subject to a number of assumptions, including local law requirements, and actual amount may differ materially from this estimate.

In addition, the Company may incur other charges and expenditures not currently contemplated due to unanticipated events that may occur, including in connection with this decision to permanently cease operations at the Facilities.

The Exhibit Index below contains a list of exhibits filed or furnished with this Form 10-Q.

Exhibit Description

** Offer letter between Tyson Foods, Inc.

and Wes Morris

** Offer letter between Tyson Foods, Inc.

and Brady Stewart

10.3 ** Term Loan Agreement, dated May 3, 2023, among Tyson Foods, Inc., the lenders party thereto, Bank of America, N.A.

as administrative agent, and BofA Securities Inc.

as lead arranger.

10.4 ** Term Loan Agreement, dated May 3, 2023, among Tyson Foods, Inc., the lenders party thereto, CoBank ACB, as administrative agent, and CoBank FCB, as sole lead arranger.

31.1 ** Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 The following information from our Quarterly Report on Form 10-Q for the quarter ended April 1, 2023 , formatted in iXBRL (inline eXtensible Business Reporting Language):

101 The following information from our Quarterly Report on Form 10-Q for the quarter ended July 1, 2023 , formatted in iXBRL (inline eXtensible Business Reporting Language):

(i) Consolidated Condensed Statements of Income, (ii) Consolidated Condensed Statements of Comprehensive Income, (iii) Consolidated Condensed Balance Sheets, (iv) Consolidated Condensed Statements of Shareholders' Equity, (v) Consolidated Condensed Statements of Cash Flows, and (vi) the Notes to Consolidated Condensed Financial Statements.

5 unchanged sentences

TYSON FOODS, INC.

May 8, 2023 /s/ John R.

August 10, 2023 /s/ John R.

Executive Vice President and Chief Financial Officer

May 8, 2023 /s/ Phillip W.

August 10, 2023 /s/ Phillip W.

Vice President, Controller and Chief Accounting Officer

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 5. Other Information