What changed in this filing

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Item 1. Financial Statements

2024-02-05 compared with 2023-08-10 · 197 added, 235 removed, 661 unchanged (40% of the section changed)

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(In millions, except per share data)

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

December 30, 2023 December 31, 2022

Sales $ 13,319 $ 13,260

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Selling, General and Administrative 592 501

Goodwill Impairment 448 — 448 —

Operating Income (Loss) ( 350 ) 1,033 68 3,644

Operating Income 231 467

Other (Income) Expense:

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Total Other (Income) Expense 70 33

Income (Loss) before Income Taxes ( 426 ) 986 ( 122 ) 3,483

Income before Income Taxes 161 434

Income Tax Expense 47 114

Net Income (Loss) ( 435 ) 753 ( 206 ) 2,712

Net Income (Loss) Attributable to Noncontrolling Interests ( 18 ) 3 ( 8 ) 12

Net Income (Loss) Attributable to Tyson $ ( 417 ) $ 750 $ ( 198 ) $ 2,700

Weighted Average Shares Outstanding:

Class A Basic 284 289 285 291

Class B Basic 70 70 70 70

Diluted 354 362 355 364

Net Income (Loss) Per Share Attributable to Tyson:

Net Income 114 320

Net Income Attributable to Noncontrolling Interests 7 4

Net Income Attributable to Tyson $ 107 $ 316

Net Income Per Share Attributable to Tyson:

Class A Basic $ 0.31 $ 0.91

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(In millions)

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Net Income (Loss) $ ( 435 ) $ 753 $ ( 206 ) $ 2,712

Three Months Ended

December 30, 2023 December 31, 2022

Net Income $ 114 $ 320

Other Comprehensive Income (Loss), Net of Taxes:

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Total Other Comprehensive Income (Loss), Net of Taxes 63 82

Comprehensive Income (Loss) ( 470 ) 642 ( 138 ) 2,629

Comprehensive Income (Loss) Attributable to Noncontrolling Interests ( 18 ) 3 ( 8 ) 12

Comprehensive Income (Loss) Attributable to Tyson $ ( 452 ) $ 639 $ ( 130 ) $ 2,617

Comprehensive Income 177 402

Comprehensive Income Attributable to Noncontrolling Interests 15 4

Comprehensive Income Attributable to Tyson $ 162 $ 398

See accompanying Notes to Consolidated Condensed Financial Statements.

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(In millions, except share and per share data)

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Current Assets:

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Accumulated other comprehensive gain (loss) ( 205 ) ( 260 )

Treasury stock, at cost – 92 million shares at July 1, 2023 and 88 million shares at October 1, 2022 ( 4,958 ) ( 4,683 )

Treasury stock, at cost – 91 million shares at December 30, 2023 and 92 million shares at September 30, 2023 ( 4,909 ) ( 4,972 )

Total Tyson Shareholders’ Equity 18,150 18,133

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(In millions)

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Shares Amount Shares Amount Shares Amount Shares Amount

Three Months Ended

December 30, 2023 December 31, 2022

Shares Amount Shares Amount

Class A Common Stock:

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Balance at beginning of period 18,760 20,084

Net income (loss) attributable to Tyson ( 417 ) 750 ( 198 ) 2,700

Net income attributable to Tyson 107 316

Dividends ( 174 ) ( 175 )

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Balance at beginning of period ( 260 ) ( 297 )

Other comprehensive income (loss) ( 35 ) ( 111 ) 68 ( 83 )

Other comprehensive income 55 82

Balance at end of period ( 205 ) ( 215 )

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Balance at beginning of period $ 122 $ 109

Net income (loss) attributable to noncontrolling interests ( 18 ) 3 ( 8 ) 12

Distributions to noncontrolling interest ( 2 ) ( 1 ) ( 2 ) ( 1 )

Net income attributable to noncontrolling interests 7 4

Business combinations 1 28

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(In millions)

Nine Months Ended

July 1, 2023 July 2, 2022

Three Months Ended

December 30, 2023 December 31, 2022

Cash Flows From Operating Activities:

Net income (loss) $ ( 206 ) $ 2,712

Net income $ 114 $ 320

Depreciation and amortization 373 303

Deferred income taxes ( 14 ) 8

Impairment of goodwill 448 —

Other, net 129 68

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Other, net 3 —

Cash Provided by (Used for) Financing Activities 101 ( 2,128 )

Cash Used for Financing Activities ( 26 ) ( 482 )

Effect of Exchange Rate Changes on Cash 15 12

Decrease in Cash and Cash Equivalents and Restricted Cash ( 332 ) ( 1,581 )

Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash 911 ( 377 )

Cash and Cash Equivalents and Restricted Cash at Beginning of Year 573 1,031

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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”).

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 1, 2022.

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.

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 1, 2023 and the results of operations for the three and nine months ended July 1, 2023 and July 2, 2022.

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 30, 2023 and the results of operations for the three months ended December 30, 2023 and December 31, 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 and Intangible Assets

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 the 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.

If it is determined, based on qualitative factors, the fair value of the reporting unit may be more likely than not less than the carrying amount, or if significant changes to macroeconomic 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, as of October 1, 2022.

Conditions existed as of the end of our first quarter of fiscal 2023 that required an interim assessment of goodwill for two of our International reporting units which had goodwill totaling $ 0.2 billion as of December 31, 2022;

we determined no impairment was necessary as the fair value of the reporting units exceeded their carrying value.

Our qualitative assessment for the second quarter of fiscal 2023 did not indicate that it was more likely than not the fair value of any of our reporting units may be impaired, and as such, no quantitative goodwill test was deemed necessary at that time.

During the third quarter of fiscal 2023, we experienced lower than previously anticipated operating results and changing market fundamentals, as well as a drop in our market capitalization to below our book value.

Consequently, based on our qualitative assessment, we determined the fair values of our reporting units were more likely than not less than the carrying amount and proceeded to perform a quantitative assessment for all our reporting units.

Based on this assessment, we determined that all of our material reporting units’ estimated fair value exceeded their carrying value 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 the time of our third quarter assessment.

For these reporting units, we recorded a $ 448 million goodwill impairment charge of which $ 210 million and $ 238 million was recognized in our Chicken segment and International/Other, respectively.

Following the third quarter of fiscal 2023 quantitative assessment, the following reporting units’ estimated fair value exceeded their carrying value by less than 20 %:

our Chicken segment reporting units, our Beef reporting unit and our Pork reporting unit with goodwill totaling $ 3.1 billion, $ 0.7 billion and $ 0.4 billion, respectively, at July 1, 2023.

Our qualitative assessment for the first quarter of fiscal 2024 did not indicate that it was more likely than not the fair value of any of our reporting units or indefinite lived intangibles was less than the carrying amount, and as such, no quantitative test was deemed necessary.

We consider reporting units and indefinite lived intangibles that have 20 % or less excess fair value over carrying amount to have a heightened risk of impairment.

The following reporting units and indefinite lived intangibles were considered at heightened risk of impairment as of the date of the most recent estimated fair value determination, which was in the fourth quarter of fiscal 2023:

our Chicken segment reporting units, our Beef reporting unit and our Pork reporting unit with goodwill totaling $ 3.1 billion, $ 0.3 billion and $ 0.4 billion, respectively, and two Prepared Foods brands with carrying values of $ 0.5 billion and $ 0.3 billion.

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.

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Actual results could differ from those estimates.

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.

During 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.

New Regulation

On November 28, 2023, the United States Department of Agriculture published the Transparency in Poultry Grower Contracting and Tournaments rule that amended section 202(a) of the Packers and Stockyards Act to introduce new disclosure requirements that live poultry dealers must furnish to contract broiler growers.

The rule is effective February 12, 2024, and directs live poultry dealers to amend broiler grower contracts to reflect certain new requirements.

We are still evaluating the impact the new requirements will have on our consolidated financial statements.

Recently Issued Accounting Pronouncements

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.

In December 2023, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The guidance is effective for annual reporting periods beginning after December 15, 2024, our fiscal 2026 and will be applied prospectively.

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

In November 2023, the FASB issued authoritative guidance to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses.

The guidance is effective for annual reporting periods beginning after December 15, 2023, our fiscal 2025, and interim reporting periods within fiscal years beginning after December 15, 2024, our fiscal 2026.

Amendments will be applied retrospectively to all prior periods presented in the financial statements.

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

In March 2023, the FASB issued authoritative guidance intended to address issues related to arrangements between entities under common control such as terms and conditions an entity should consider for determining whether a lease exists and the classification and accounting for that lease as well as accounting for leasehold improvements associated with leases between entities under common control.

The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2023, our fiscal 2025 and can be applied using either the prospective or retrospective approach.

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

In September 2022, 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.

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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 November 2021, the FASB issued guidance requiring additional disclosures for transactions with a government that are accounted for by analogizing to a government grant or contribution accounting model to increase transparency of government assistance.

The additional disclosures will include information on the type and nature of the government assistance and the accounting and financial effect of the assistance to our financial statements.

This guidance is effective for annual reporting periods beginning after December 15, 2021, our fiscal 2023 and can be applied using either the prospective or retrospective approach.

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.

We elected to early adopt the initial disclosure requirement for the fiscal year ended September 30, 2023, and it did not have a material impact on our consolidated financial statements.

ACQUISITIONS AND DISPOSITIONS

On May 22, 2023, we acquired Williams Sausage Company for $ 223 million, net of cash acquired, subject to certain adjustments, as part of our growth strategy to increase our capacity and product portfolio.

Its results, subsequent to the acquisition closing, are included in Prepared Foods for segment presentation.

In the third quarter of fiscal 2023, we acquired Williams Sausage Company for $ 223 million, net of cash acquired, subject to certain adjustments, as part of our growth strategy to increase our capacity and product portfolio.

Its results, subsequent to the acquisition closing, are included in our Prepared Foods segment and through December 30, 2023, were insignificant to our Consolidated Condensed Statements of Income.

Certain estimated values for the acquisition, including goodwill, intangible assets, property, plant and equipment, other liabilities, and deferred taxes are not yet finalized and are subject to revision as additional information becomes available and more detailed analyses are completed.

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Intangible Assets include brands and trademarks and customer relationships which will be amortized over a life of 20 and 12 years, respectively.

A portion of the goodwill is deductible for U.S.

$ 46 million of the goodwill is deductible for U.S.

income tax purposes.

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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 July 1, 2023 were insignificant to our Consolidated Condensed Statements of Income.

The results of SFPC, subsequent to the acquisition closing, are included in International/Other for segment presentation and through December 30, 2023 were insignificant to our Consolidated Condensed Statements of Income.

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

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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 1, 2023, 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.

Inventories are presented net of lower of cost or net realizable value adjustments of $ 137 million and $ 60 million as of July 1, 2023 and October 1, 2022, respectively.

At December 30, 2023, 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 September 30, 2023.

Inventories are presented net of lower of cost or net realizable value adjustments of $ 186 million and $ 145 million as of December 30, 2023 and September 30, 2023, respectively.

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

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Processed products $ 2,745 $ 2,847

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

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Land $ 224 $ 219

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Other current liabilities are as follows (in millions):

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Accrued salaries, wages and benefits $ 741 $ 672

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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 is bringing 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 which commenced in early calendar year 2023.

In the third quarter of fiscal 2023, the Company approved an extension to the program related to removing additional redundancies in corporate overhead.

Additionally, we revised the total 2022 Program anticipated expenses down $ 39 million due to revised estimates related to relocation, lease terminations, professional and other fees, based on actual experience, which were partially offset by increased severance costs associated with the third quarter program extension.

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

The Company approved a restructuring program in fiscal 2022 (the “2022 Program”) to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies.

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

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Total 2022 Program $ 55 $ 18 $ 28 $ 115 $ 22 $ 238

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.

Restructuring costs include severance expenses and related charges 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 $ 53 million and $ 185 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 $ 216 million of charges that have resulted or will result in cash outflows and $ 22 million in non-cash charges.

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

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first quarter of fiscal 2024 by reportable segment (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

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Total $ 4 $ 1 $ 4 $ 21 $ — $ 30

For the third quarter of fiscal 2023, we recorded restructuring and related charges of $ 19 million and $ 31 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

For the first quarter of fiscal 2024, we recorded restructuring and related charges of $ 3 million and $ 27 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the above results are $ 20 million of charges that have resulted or will result in cash outflows and $ 10 million in non-cash charges.

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

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

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

For the first nine months of fiscal 2023, we recorded restructuring and related charges of $ 23 million and $ 70 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

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.

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Total $ 53 $ 17 $ 26 $ 106 $ 18 $ 220

As of the third quarter of fiscal 2023, we recorded restructuring and related charges to date of $ 41 million and $ 118 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Through the first quarter of fiscal 2024, we recorded restructuring and related charges to date of $ 50 million and $ 170 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the above results are $ 194 million of charges to date that have resulted or will result in cash outflows and $ 26 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 July 1, 2023 (in millions):

Balance at October 1, 2022 Restructuring Expense Payments Changes in Estimates Balance at July 1, 2023

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 30, 2023 (in millions):

Balance at September 30, 2023 Restructuring Expense Payments Changes in Estimates Balance at December 30, 2023

Severance costs $ 58 $ 10 $ ( 20 ) $ ( 2 ) $ 46

Relocation and related costs 5 6 ( 5 ) — 6

Contract and lease termination — 6 ( 6 ) — —

Professional and other fees 2 — — — 2

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Plant Closures

In the second quarter of fiscal 2023, after a strategic review of assets within its Chicken segment, the Company approved the closure of two of the Company's Chicken facilities in Glen Allen, Virginia and Van Buren, Arkansas, to optimize network asset utilization.

As a result, we recorded $ 15 million and $ 107 million in closure charges, primarily related to grower contract terminations, accelerated depreciation, severance, retention and related costs for the three and nine months ended July 1, 2023, respectively.

We shifted production to other facilities and ceased operations at the impacted locations in the third quarter of fiscal 2023.

The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales.

Our plant closure liability was $ 72 million at July 1, 2023 and we had no plant closure liability at October 1, 2022.

In August 2023, as part of the ongoing strategic review, the Company approved the closure of four Chicken segment processing facilities, located in Corydon, Indiana;

During fiscal 2023, as part of a strategic review of assets, the Company approved the closure of six Chicken segment processing facilities located in Glen Allen, Virginia;

Van Buren, Arkansas;

Corydon, Indiana;

Dexter, Missouri;

Noel, Missouri;

and North Little Rock, Arkansas, to further optimize network asset utilization.

We expect to shift production to other facilities and cease operations at the impacted locations in our first two quarters of fiscal 2024.

We continue to evaluate the financial statement impact of the closures for charges related to contract terminations, impairments, accelerated depreciation, severance and retention.

Based on our preliminary analysis, we currently estimate total charges of $ 300 million to $ 400 million which we expect to be recorded beginning in the fourth quarter of fiscal 2023 through the planned closure dates.

and North Little Rock, Arkansas, to optimize asset utilization.

As of December 30, 2023, we have shifted production to other facilities and ceased operations at our Glen Allen, Van Buren, Dexter, Noel and North Little Rock facilities, and expect to shift production and cease operations at Corydon during the third quarter of fiscal 2024.

Additionally, during the first quarter of fiscal 2024, the Company approved the closure of two case ready value-added plants in our Beef segment located in Columbia, South Carolina and Jacksonville, Florida, to optimize asset utilization.

We shifted production to other facilities and ceased operations at both plants during the first quarter of fiscal 2024.

As a result of the plant closures, we recorded $ 75 million of charges in the first quarter of fiscal 2024, primarily related to accelerated depreciation, severance, retention and related costs.

The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and included $ 6 million of charges that have resulted or will result in cash outflows and $ 69 million in non-cash charges.

We did not incur plant closure charges in the first quarter of fiscal 2023.

The following table reflects our liability related to plant closures as of December 30, 2023 (in millions):

Balance at September 30, 2023 Plant Closure Charges Payments Balance at December 30, 2023

Contract termination $ 151 $ 5 $ ( 29 ) $ 127

Severance and retention 14 1 ( 5 ) 10

Total $ 165 $ 6 $ ( 34 ) $ 137

We continue to strategically evaluate optimization of such items as network capacity, manufacturing efficiencies and business technology.

If we have a significant change in strategies, outlook, or a manner in which we plan to use these assets, we may be exposed to future impairments.

If we have a significant change in strategies, outlook, or a manner in which we plan to use these assets, we may experience future charges.

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

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Revolving credit facility $ — $ —

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Senior notes:

3.90% Senior notes due September 2023 400 400

3.95% Notes due August 2024 1,250 1,250

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Discount on senior notes ( 36 ) ( 36 )

Term loan facility due May 2026 (6.32% at July 1, 2023) 1,000 —

Term loan facility due May 2028 — —

Term loan facility due May 2026 (6.71% at December 30, 2023) 1,000 1,000

Term loan facility due May 2028 (7.19% at December 30, 2023) 750 —

Other 177 164

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

At July 1, 2023, amounts available for borrowing under this facility totaled $ 2.25 billion and we had no outstanding borrowings and no outstanding letters of credit issued under this facility.

At July 1, 2023 we had $ 97 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.

At December 30, 2023, amounts available for borrowing under this facility totaled $ 2.25 billion and we had no outstanding borrowings and no outstanding letters of credit issued under this facility.

At December 30, 2023 we had $ 97 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 up to an aggregate maximum principal amount of $ 1.5 billion.

As of July 1, 2023, we had no commercial paper outstanding .

As of December 30, 2023, we had no commercial paper outstanding .

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

Term Loan Facilities

In the third quarter of fiscal 2023, we executed two new term loan facilities totaling $ 1.75 billion to refinance our short-term promissory notes ("commercial paper program") and for general corporate purposes.

The first term loan facility totaling $ 1.0 billion matures on May 3, 2026 and we borrowed the full $ 1.0 billion available under this loan facility and used it to repay $ 610 million of outstanding commercial paper obligations.

The second term loan facility totaling $ 750 million matures on May 3, 2028 and at July 1, 2023, we had no outstanding borrowings under this facility.

Both term loans may be prepaid under certain conditions.

The interest rate on both term loan facilities will be equal to SOFR plus a predetermined borrowing spread determined by our credit rating.

Additionally, the term loan facilities contain covenants that are similar to those contained in the revolving credit facility.

We have a $ 1.0 billion term loan facility that matures in May 2026 and a $ 750 million term loan facility that matures in May 2028.

In the first quarter of fiscal 2024, we borrowed the full $ 750 million available under the loan facility that matures in May 2028 and used it to repay $ 592 million of outstanding commercial paper obligations.

Both term loans may be prepaid under certain conditions and contain covenants that are similar to those contained in the revolving credit facility.

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 1, 2023.

We were in compliance with all debt covenants at December 30, 2023.

Share Repurchases

As of July 1, 2023, 7.3 million shares remained available for repurchase under the Company's share repurchase program.

As of December 30, 2023, 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.

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

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Shares Dollars Shares Dollars Shares Dollars Shares Dollars

Three Months Ended

December 30, 2023 December 31, 2022

Shares Dollars Shares Dollars

Shares repurchased:

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Total share repurchases 0.3 $ 13 4.9 $ 313

Our effective tax rate was ( 1.8 )% on pretax loss for the third quarter of fiscal 2023, 23.6 % on pretax income for the third quarter of fiscal 2022, ( 67.9 )% on pretax loss for the first nine months of fiscal 2023 and 22.1 % on pretax income for the first nine months of fiscal 2022.

The percentage impacts of items on the effective tax rate were greater in fiscal 2023 due to the level of pretax income (loss) in fiscal 2023 compared to fiscal 2022.

The effective tax rates for the third quarter and first nine months of fiscal 2023 include the impacts of a $ 448 million non-deductible goodwill impairment.

In all periods presented, the effective tax rates include the impacts of state tax expense and various tax benefits;

however, tax benefits increase the effective tax rate in a period of pretax loss and decrease the effective tax rate in a period of pretax income.

Additionally, the effective tax rate for the first nine months of fiscal 2022 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 of fiscal 2022.

Unrecognized tax benefits were $ 156 million and $ 152 million at July 1, 2023 and October 1, 2022, respectively.

Our effective tax rate was 29.4 % and 26.1 % for the first quarter of fiscal 2024 and 2023, respectively.

The effective tax rate for the first quarter of fiscal 2024 is higher than the federal statutory tax rate primarily due to state taxes and net unfavorable permanent book-to-tax differences, partially offset by various tax benefits.

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

Unrecognized tax benefits were $ 133 million and $ 131 million at December 30, 2023 and September 30, 2023, 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.

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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 (LOSS) PER SHARE

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

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Net income (loss) $ ( 435 ) $ 753 $ ( 206 ) $ 2,712

Net income (loss) attributable to noncontrolling interests ( 18 ) 3 ( 8 ) 12

Net income (loss) attributable to Tyson ( 417 ) 750 ( 198 ) 2,700

EARNINGS PER SHARE

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

Three Months Ended

December 30, 2023 December 31, 2022

Net income $ 114 $ 320

Net income attributable to noncontrolling interests 7 4

Net income attributable to Tyson 107 316

Less dividends declared:

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Class A weighted average shares 284 286

Class B weighted average shares, and shares under the if-converted method for diluted earnings per share 70 70 70 70

Class B weighted average shares 70 70

Denominator for diluted earnings per share:

Class A weighted average shares 284 286

Class B weighted average shares under the if-converted method for diluted earnings per share 70 70

Effect of dilutive securities:

Stock options, restricted stock and performance units 1 2

Denominator for diluted earnings (loss) per share – adjusted weighted average shares and assumed conversions 354 362 355 364

Net income (loss) per share attributable to Tyson:

Denominator for diluted earnings per share – weighted average shares and assumed conversions 355 358

Net income per share attributable to Tyson:

Class A basic $ 0.31 $ 0.91

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Class B $ 0.450 $ 0.450

Approximately 9 million of our stock-based compensation shares were antidilutive for the three and nine months ended July 1, 2023.

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

Approximately 7 million and 4 million of our stock-based compensation shares were antidilutive for the three months ended December 30, 2023 and December 31, 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 existed at July 1, 2023.

No significant concentrations of credit risk existed at December 30, 2023.

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

in millions, except soybean meal tons Metric July 1, 2023 October 1, 2022

in millions, except soybean meal tons Metric December 30, 2023 September 30, 2023

Corn Bushels 103 65

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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 and nine months ended July 1, 2023, and July 2, 2022.

As of July 1, 2023, 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 nine months ended July 1, 2023 and July 2, 2022, 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 1, 2023 and July 2, 2022, we had no gains or losses recognized in OCI on derivatives designated as cash flow hedges.

Ineffectiveness related to our cash flow hedges was not significant for the three months ended December 30, 2023, and December 31, 2022.

As of December 30, 2023, we had $ 12 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 30, 2023 and December 31, 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 30, 2023 and December 31, 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 1, 2023, and July 2, 2022.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of July 1, 2023 and October 1, 2022 (in millions):

Consolidated Condensed Balance Sheets Classification July 1, 2023 October 1, 2022

Ineffectiveness related to fair value hedges was not significant for the three months ended December 30, 2023, and December 31, 2022.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of December 30, 2023 and September 30, 2023 (in millions):

Consolidated Condensed Balance Sheets Classification December 30, 2023 September 30, 2023

Inventory $ ( 23 ) $ 16

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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 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Consolidated Condensed Statements of Income Classification Three Months Ended

December 30, 2023 December 31, 2022

Cost of Sales $ 12,496 $ 12,292

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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 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

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

Commodity contracts $ — $ — $ — $ —

Gain (Loss) on fair value hedges:

Consolidated Condensed Statements of Income Classification Three Months Ended

December 30, 2023 December 31, 2022

Cost of Sales Gain (Loss) on fair value hedges:

Commodity contracts (a) $ ( 1 ) $ ( 3 )

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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 1, 2023 Level 1 Level 2 Level 3 Netting (a) Total

December 30, 2023 Level 1 Level 2 Level 3 Netting (a) Total

Other Current Assets:

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Total liabilities $ — $ 87 $ — $ ( 76 ) $ 11

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

September 30, 2023 Level 1 Level 2 Level 3 Netting (a) Total

Other Current Assets:

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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 1, 2023, and October 1, 2022, we had $ 101 million and $ 10 million, respectively, of net cash collateral with various counterparties where master netting arrangements exist and held no cash collateral.

Additionally, at December 30, 2023, and September 30, 2023, we had $ 32 million and $ 113 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 1, 2023 July 2, 2022

Three Months Ended

December 30, 2023 December 31, 2022

Balance at beginning of year $ 30 $ 35

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Balance at end of period $ 30 $ 33

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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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 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Cost Basis Fair

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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 1, 2023, and July 2, 2022.

We recognized no direct write-offs or allowances for credit losses in earnings for the three months ended December 30, 2023, and December 31, 2022.

Deferred Compensation Assets

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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 third quarter of fiscal 2023, we recorded goodwill impairment charges of $ 210 million and $ 238 million in our Chicken segment and International/Other, respectively.

We estimated the fair value of our reporting units utilizing various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public company method), which incorporated significant unobservable Level 3 inputs.

We did not have any other significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the nine months ended July 1, 2023.

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.

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 three months ended December 30, 2023 and December 31, 2022.

Other Financial Instruments

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

July 1, 2023 October 1, 2022

December 30, 2023 September 30, 2023

Fair Value Carrying Value Fair Value Carrying Value

Total debt $ 9,293 $ 9,678 $ 8,693 $ 9,506

OTHER COMPREHENSIVE INCOME (LOSS)

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 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

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

OTHER COMPREHENSIVE INCOME

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

Three Months Ended

December 30, 2023 December 31, 2022

Before Tax Tax After Tax Before Tax Tax After Tax

Derivatives accounted for as cash flow hedges:

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Currency translation:

Translation adjustment ( 35 ) — ( 35 ) ( 115 ) 3 ( 112 ) 64 — 64 ( 88 ) 3 ( 85 )

Translation adjustment (a)

59 ( 1 ) 58 81 — 81

Postretirement benefits:

Unrealized gain (loss) 4 ( 1 ) 3 — — —

Total other comprehensive income (loss) $ ( 35 ) $ — $ ( 35 ) $ ( 114 ) $ 3 $ ( 111 ) $ 68 $ — $ 68 $ ( 86 ) $ 3 $ ( 83 )

Total other comprehensive income $ 65 $ ( 2 ) $ 63 $ 82 $ — $ 82

(a) Before and after tax translation adjustment for the three months ended December 30, 2023 included $ 8 million of Comprehensive Income Attributable to Noncontrolling Interests

SEGMENT REPORTING

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We measure segment profit as operating income (loss).

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.

International/Other primarily includes our foreign operations in Australia, China, Malaysia, Mexico, the Netherlands, South Korea, Thailand and the Kingdom of Saudi Arabia, 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 meat cuts and case-ready products.

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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.

Intersegment transactions, which were at market prices, are included in the segment sales in the table below.

Intersegment sales transactions, which were at market prices, are included in the segment sales in the table below.

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

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

December 30, 2023 December 31, 2022

Beef $ 5,023 $ 4,723

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Total Sales $ 13,319 $ 13,260

Three Months Ended Nine Months Ended

July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

December 30, 2023 December 31, 2022

Operating Income (Loss):

$ ( 206 ) $ 166

Pork ( 74 ) 25 ( 128 ) 248

( 314 ) 277 ( 503 ) 615

Prepared Foods 243 258

International/Other (c)

( 234 ) 12 ( 238 ) 19

Total Operating Income (Loss) ( 350 ) 1,033 68 3,644

International/Other (d)

Total Operating Income 231 467

Total Other (Income) Expense 70 33

Income (Loss) before Income Taxes $ ( 426 ) $ 986 $ ( 122 ) $ 3,483

(a) Beef segment results for the nine months ended July 1, 2023 included $ 42 million of insurance proceeds, net of costs incurred, recognized in Cost of Sales.

Additionally, 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.

(b) Chicken segment results for the three and nine months ended July 1, 2023 included insurance proceeds, net of costs incurred, of $ 22 million and $ 15 million, respectively, recognized in Cost of Sales, and costs related to plant closures of $ 15 million and $ 107 million, respectively, recognized in Cost of Sales.

Chicken segment results for the three and nine months ended July 1, 2023 included charges of $ 38 million related to the recognition of a legal contingency accrual, recognized as a reduction to Sales pursuant to FASB guidance related to accounting for revenue from contracts with customers, and $ 210 million of goodwill impairment.

Additionally, 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.

(c) International/Other results for the three and nine months ended July 1, 2023 included $ 238 million of goodwill impairment.

Income before Income Taxes $ 161 $ 434

(a) Beef segment results for the three months ended December 30, 2023 included $ 40 million of costs related to plant closures and a $ 45 million legal contingency accrual, recognized in Cost of Sales.

Additionally, 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) Pork segment results for the three months ended December 30, 2023 included a $ 28 million legal contingency accrual, recognized in Cost of Sales.

(c) Chicken segment results for the three months ended December 30, 2023 included insurance proceeds, net of costs incurred, of $ 24 million and costs related to plant closures of $ 35 million, recognized in Cost of Sales.

Additionally, 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.

(d) International/Other results for the three months ended December 30, 2023 included $ 26 million of costs incurred due to a production facility fire in Europe, net of insurance proceeds, recognized in Cost of Sales.

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

Three months ended July 1, 2023

Foodservice (b)

International (c)

Industrial and Other (d)

Intersegment Total

Beef $ 2,313 $ 1,257 $ 671 $ 575 $ 140 $ 4,956

Pork 394 125 294 305 206 1,324

Chicken 1,823 1,636 264 467 22 4,212

Prepared Foods 1,396 898 55 34 — 2,383

International/Other — — 633 — — 633

Intersegment — — — — ( 368 ) ( 368 )

Total $ 5,926 $ 3,916 $ 1,917 $ 1,381 $ — $ 13,140

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

Nine months ended July 1, 2023

Three months ended December 30, 2023

Foodservice (b)

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Total $ 6,081 $ 4,000 $ 1,843 $ 1,395 $ — $ 13,319

Nine months ended July 2, 2022

Three months ended December 31, 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 third quarter and nine months of fiscal 2023, the Chicken segment included a $ 38 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.

The remaining terms of the underlying obligations cover periods up to 8 years, and the maximum potential amount of future payments as of July 1, 2023, was not 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 30, 2023, was not significant.

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

At July 1, 2023 and October 1, 2022, no significant liabilities for guarantees were recorded.

At December 30, 2023 and September 30, 2023, 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 1, 2023 was approximately $ 280 million.

The total receivables under these programs were $ 20 million and $ 6 million at July 1, 2023 and October 1, 2022, respectively.

The potential maximum commitment as of December 30, 2023 was approximately $ 290 million.

The total receivables under these programs were $ 17 million and $ 12 million at December 30, 2023 and September 30, 2023, 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 had a $ 6 million allowance for these programs’ estimated uncollectible receivables at July 1, 2023, and no allowance at October 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.

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 1, 2023 and October 1, 2022.

We had no deposits at December 30, 2023 and September 30, 2023.

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 1, 2023, the total amount under these types of arrangements totaled $ 797 million.

At December 30, 2023, the total amount under these types of arrangements totaled $ 802 million.

Contingencies

5 unchanged sentences

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 other significant changes to the loss contingency accruals described below reflected in the Company’s Consolidated Condensed Statements of Income for the three months and nine months ended July 1, 2023.

Broiler Antitrust Civil Litigation

5 unchanged sentences

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.

The first trial in this matter, which will involve claims brought by the Direct Purchaser Plaintiff Class and certain direct-action plaintiffs, is scheduled to begin on September 12, 2023.

On June 30, 2023, the court granted, in part, and denied, in part, summary judgment motions the Company had filed and joined, narrowing the scope of the claims the Company is facing in this first trial.

The first trial in this matter, which involved claims brought by the Direct Purchaser Plaintiff Class and certain direct-action plaintiffs, began on September 12, 2023 and concluded with a jury verdict in favor of the defendant on October 25, 2023.

The second and third trials in this matter, which involve claims brought by the Commercial and Institutional Indirect Purchaser Class and the End-User Consumer Plaintiff Class, are scheduled to begin in March 2024 and September 2024, respectively.

The Company did not participate in the first trial, and will not participate in the second and third trials, as it had settled all of the claims brought by the respective plaintiffs in these trials.

On January 19, 2021, we announced that we had reached agreements 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 agreed to pay the Classes an aggregate amount of $ 221.5 million in settlement of all outstanding claims brought by the Classes.

Under the terms of the settlements, we agreed to pay the Classes an aggregate amount of $ 221.5 million in settlement of all outstanding claims brought by

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.

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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 three months and nine months ended July 1, 2023, the Company recorded an additional $ 38 million charge related to this matter.

Additionally, during the first nine months of fiscal 2023 and fiscal 2022, the Company reduced its total recorded legal contingency accrual by $ 11 million and $ 197 million, respectively, for amounts it had paid in connection with settlements related to this matter.

Accordingly, at July 1, 2023 and October 1, 2022, the legal contingency accrual for claims related to this matter was $ 149 million and $ 122 million, respectively.

As of December 30, 2023 and September 30, 2023, the legal contingency accrual for claims related to this matter was $ 159 million and $ 174 million, respectively.

Government Investigations

11 unchanged sentences

We are cooperating with various state governmental agencies and officials, including the Offices of the Attorneys 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.

The Company has not recorded any liability in connection with these matters as it does not believe a loss is probable or reasonably estimable at this time in respect of the claims by the New Mexico and Alaska Attorneys General and the investigations by the Florida and Louisiana Attorneys General.

While the Company believes it has meritorious defenses to the claims that have been made, we are exploring whether it is possible to resolve them in such a way that will serve the best interests of the Company and its shareholders and avoid the uncertainty, risk, expense and distraction of protracted litigation.

The Company recorded an accrual in the fourth quarter of fiscal 2023 for the estimated probable losses that it expects to incur for this matter.

Broiler Chicken Grower Litigation

Following the settlement of our previously disclosed In re Broiler Chicken Grower Litigation during fiscal 2022, in October 2022, the DOJ’s Antitrust Division opened a civil investigation into broiler chicken grower contracts and alleged non-competitive practices involving performance-based compensation sharing for the purpose of stabilizing compensation below competitive levels.

In October 2022, the DOJ’s Antitrust Division opened a civil investigation into broiler chicken grower contracts and alleged non-competitive practices involving performance-based compensation sharing for the purpose of stabilizing compensation below competitive levels.

We continue to cooperate with the investigation.

8 unchanged sentences

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.

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.

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.

Beef Antitrust Litigation

1 unchanged sentence

(“Tyson Fresh Meats”), 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.

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.

In addition, the plaintiffs also allege the defendants colluded to manipulate live cattle futures and options traded on the Chicago Mercantile Exchange.

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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.

The indirect producer litigation is styled Specht et.

Tyson, Inc., et al .

In November 2022, the case was transferred and consolidated with In re Cattle and Beef Antitrust Litigation , MDL No.

On February 3, 2023, we moved to dismiss the complaint, and the court granted the motion on August 17, 2023 but later permitted the plaintiffs to amend their complaint.

On November 21, 2023, we moved to dismiss the amend complaint, and that motion remains pending.

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.

21 unchanged sentences

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 nine months of fiscal 2023.

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

3 unchanged sentences

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.

On February 17, 2023, we moved to dismiss the complaint, and on September 27, 2023, the court denied our motion.

On December 22, 2023, after a mediation between the parties, the Company and the putative class plaintiffs reached an in-principle agreement to settle.

While we believe we have valid and meritorious defenses against the allegations, we believe that the proposed settlement is in the best interests of the Company and its shareholders to avoid the uncertainty, risk, expense and distraction of protracted litigation.

Under the terms of the proposed settlement, the Company agreed to pay the putative class an aggregate amount of $ 72.5 million.

The settlement agreement remains subject to court approval.

If the court grants final approval to the settlement, it will completely resolve all claims made against the Company in this matter.

In the first quarter of fiscal 2024, the Company recorded an accrual for the $ 72.5 million proposed settlement.

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