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Item 1. Financial Statements

2025-02-03 compared with 2024-08-05 · 231 added, 356 removed, 601 unchanged (49% of the section changed)

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(In millions, except per share data)

Three Months Ended Nine Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

December 28, 2024 December 30, 2023

Sales $ 13,623 $ 13,319

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Selling, General and Administrative 515 592

Goodwill Impairment — 448 — 448

Operating Income (Loss) 341 ( 350 ) 884 68

Operating Income 580 231

Other (Income) Expense:

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Total Other (Income) Expense 102 70

Income (Loss) before Income Taxes 253 ( 426 ) 617 ( 122 )

Income before Income Taxes 478 161

Income Tax Expense 112 47

Net Income (Loss) 196 ( 435 ) 458 ( 206 )

Net Income (Loss) Attributable to Noncontrolling Interests 5 ( 18 ) 15 ( 8 )

Net Income (Loss) Attributable to Tyson $ 191 $ ( 417 ) $ 443 $ ( 198 )

Net Income (Loss) Per Share Attributable to Tyson:

Net Income 366 114

Net Income Attributable to Noncontrolling Interests 7 7

Net Income Attributable to Tyson $ 359 $ 107

Net Income Per Share Attributable to Tyson:

Class A Basic $ 1.03 $ 0.31

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(In millions)

Three Months Ended Nine Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Net Income (Loss) $ 196 $ ( 435 ) $ 458 $ ( 206 )

Three Months Ended

December 28, 2024 December 30, 2023

Net Income $ 366 $ 114

Other Comprehensive Income (Loss), Net of Taxes:

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Total Other Comprehensive Income (Loss), Net of Taxes ( 104 ) 63

Comprehensive Income (Loss) 152 ( 470 ) 423 ( 138 )

Comprehensive Income (Loss) Attributable to Noncontrolling Interests 4 ( 18 ) 15 ( 8 )

Comprehensive Income (Loss) Attributable to Tyson $ 148 $ ( 452 ) $ 408 $ ( 130 )

Comprehensive Income 262 177

Comprehensive Income Attributable to Noncontrolling Interests — 15

Comprehensive Income Attributable to Tyson $ 262 $ 162

See accompanying Notes to Consolidated Condensed Financial Statements.

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(In millions, except share and per share data)

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

Current Assets:

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Accumulated other comprehensive gain (loss) ( 281 ) ( 184 )

Treasury stock, at cost – 91 million shares at June 29, 2024 and 92 million shares at September 30, 2023 ( 4,939 ) ( 4,972 )

Treasury stock, at cost – 91 million shares at December 28, 2024 and 92 million shares at September 28, 2024 ( 4,925 ) ( 4,941 )

Total Tyson Shareholders’ Equity 18,503 18,390

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(In millions)

Three Months Ended Nine Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Shares Amount Shares Amount Shares Amount Shares Amount

Three Months Ended

December 28, 2024 December 30, 2023

Shares Amount Shares Amount

Class A Common Stock:

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Balance at beginning of period 18,873 18,760

Net Income (Loss) Attributable to Tyson 191 ( 417 ) 443 ( 198 )

Net Income Attributable to Tyson 359 107

Dividends ( 178 ) ( 174 )

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Balance at beginning of period ( 184 ) ( 260 )

Other comprehensive income (loss) ( 43 ) ( 35 ) ( 35 ) 68

Other comprehensive income (loss) attributable to Tyson ( 97 ) 55

Balance at end of period ( 281 ) ( 205 )

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Balance at beginning of period $ 124 $ 122

Net income (loss) attributable to noncontrolling interests 5 ( 18 ) 15 ( 8 )

Distributions to noncontrolling interest ( 11 ) ( 2 ) ( 11 ) ( 2 )

Net income attributable to noncontrolling interests 7 7

Business combinations — 1

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(In millions)

Nine Months Ended

June 29, 2024 July 1, 2023

Three Months Ended

December 28, 2024 December 30, 2023

Cash Flows From Operating Activities:

Net income (loss) $ 458 $ ( 206 )

Net income $ 366 $ 114

Depreciation and amortization 348 373

Deferred income taxes ( 2 ) ( 14 )

Impairment of goodwill — 448

Other, net 78 129

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Proceeds from sale of marketable securities 16 6

Acquisition, net of cash acquired — ( 262 )

Acquisition of equity investments ( 2 ) ( 26 )

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Other, net — 3

Cash Provided by Financing Activities 883 101

Cash Used for Financing Activities ( 195 ) ( 26 )

Effect of Exchange Rate Changes on Cash ( 28 ) 15

Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash 1,996 ( 332 )

Increase in Cash and Cash Equivalents and Restricted Cash 575 911

Cash and Cash Equivalents and Restricted Cash at Beginning of Year 1,717 573

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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 June 29, 2024 and the results of operations for the three and nine months ended June 29, 2024 and July 1, 2023.

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 28, 2024 and the results of operations for the three months ended December 28, 2024 and December 30, 2023.

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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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 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.

Our qualitative assessment for the first three quarters 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.

Goodwill and indefinite life intangible assets are initially recorded at fair value and not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise.

Our goodwill and indefinite life intangible assets are evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative test is necessary.

If it is determined, based on qualitative factors, the fair value of the reporting unit or indefinite life intangible asset may more likely than not be less than the carrying amount, or if significant changes to macro-economic factors have occurred that could materially impact fair value, a quantitative 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 or indefinite life intangible asset with its carrying amount.

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

Our qualitative assessment for the first quarter of fiscal 2025 did not indicate that it was more likely than not the fair value of any of our reporting units or indefinite life intangible assets was less than the carrying amount, and as such, no quantitative test was deemed necessary.

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

The following reporting units and indefinite life intangible asset 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 2024:

our Chicken segment reporting units and our Beef reporting unit with goodwill totaling $ 3.0 billion and $ 0.3 billion, respectively, and one Prepared Foods brand with a carrying value of $ 0.5 billion.

Some of the inherent estimates and assumptions used in determining fair value of the reporting units and indefinite life intangible assets 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.

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

Use of Estimates

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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.

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 was effective February 12, 2024, and directed live poultry dealers to amend broiler grower contracts to reflect certain new requirements.

In compliance with the rule, we offered amendments to all our broiler growers which encompassed the new requirements, including but not limited to minimum number of flock placements and stocking density.

As the amendments to certain contracts created fixed minimum payments associated with embedded leases, we have recognized as of June 29, 2024 a $ 72 million right-of-use asset and corresponding lease liability.

These are reflected in the Consolidated Condensed Balance Sheets within Other Assets, Other current liabilities and Other Liabilities.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued authoritative guidance to disclose certain additional expense information including, among other items, purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each Consolidated Statement of Income expense caption.

The guidance is effective for annual reporting periods beginning after December 15, 2026, our fiscal 2028, and interim reporting periods within fiscal years beginning after December 15, 2027, our fiscal 2029.

Amendments can be applied using either the prospective or the retrospective approach.

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

In March 2024, the SEC issued a final rule that will require registrants to provide certain climate-related information in their registration statements and annual reports.

The rule is effective for annual reporting periods beginning in 2025, our fiscal 2026, and will be applied prospectively.

However, the SEC has issued a stay on the final rule due to legal challenges, and the effective date has been delayed indefinitely.

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

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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

In the third quarter of fiscal 2023, we acquired Williams Sausage Company for $ 220 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 June 29, 2024 were insignificant to our Consolidated Condensed Statements of Income.

The purchase price allocation included $ 15 million of net working capital, including $ 3 million of cash acquired, $ 67 million of Property, Plant and Equipment, $ 107 million of Goodwill, $ 65 million of Intangible Assets, and $ 31 million of Deferred Income Taxes.

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

$ 50 million of the goodwill is deductible for U.S.

income tax purposes.

The acquisition of Williams Sausage Company was accounted for using the acquisition method of accounting.

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 $ 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 and through June 29, 2024 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 June 29, 2024, 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 $ 139 million and $ 145 million as of June 29, 2024 and September 30, 2023, respectively.

At December 28, 2024, 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 28, 2024.

Inventories are presented net of lower of cost or net realizable value adjustments of $ 112 million and $ 115 million as of December 28, 2024 and September 28, 2024, respectively.

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

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

Processed products $ 2,775 $ 2,897

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

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

Land $ 217 $ 220

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Other current liabilities are as follows (in millions):

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

Accrued salaries, wages and benefits $ 654 $ 912

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RESTRUCTURING AND RELATED CHARGES

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):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 25 $ 7 $ 22 $ 53 $ 18 $ 125

Relocation and related costs 22 7 3 21 — 53

Accelerated depreciation 5 2 — 12 — 19

Contract and lease terminations — — — 21 — 21

Professional and other fees 2 1 — 4 — 7

Total 2022 Program $ 54 $ 17 $ 25 $ 111 $ 18 $ 225

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 $ 48 million and $ 177 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 $ 199 million of charges that have resulted or will result in cash outflows and $ 26 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 2024 by reportable segment (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 1 $ — $ 2 $ 1 $ — $ 4

Relocation and related costs 3 1 — 4 — 8

Accelerated depreciation — — — — — —

Contract and lease terminations — — — 19 — 19

Professional and other fees — — — — — —

Total $ 4 $ 1 $ 2 $ 24 $ — $ 31

For the first nine months of fiscal 2024, we recorded restructuring and related charges of $ 31 million in Selling, General and Administrative in our Consolidated Condensed Statements of Income.

Included in the above results are $ 21 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 third quarter of fiscal 2023 by reportable segment (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 4 $ 1 $ 10 $ 4 $ 9 $ 28

Relocation and related costs 7 3 — 6 — 16

Accelerated depreciation 1 — — 3 — 4

Contract and lease terminations — — — 1 — 1

Professional and other fees 1 — — — — 1

Total $ 13 $ 4 $ 10 $ 14 $ 9 $ 50

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.

There were no charges for the third quarter of fiscal 2024.

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):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 6 $ 2 $ 9 $ 10 $ 15 $ 42

Relocation and related costs 14 5 2 12 — 33

Accelerated depreciation 4 1 — 9 — 14

Contract and lease terminations — — — ( 1 ) — ( 1 )

Professional and other fees 2 — — 3 — 5

Total $ 26 $ 8 $ 11 $ 33 $ 15 $ 93

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.

Included in the above results are $ 80 million of charges that have resulted or will result in cash outflows and $ 13 million in non-cash charges.

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

Network Optimization Plan

In the first quarter of fiscal 2025, the Company initiated a network optimization plan to optimize our global operations.

We are reporting on actions approved through the end of the first quarter of fiscal 2025, including the estimated amounts for each major category of costs, as we are currently unable to make an estimate of the cost of the entire network optimization plan.

As of December 28, 2024, we expect to incur $ 93 million of charges related to actions approved to date, which include an estimated $ 39 million of cash charges and $ 54 million of non-cash charges.

We recognized charges of $ 73 million in the first quarter of fiscal 2025, which primarily included the closure of two facilities in the Prepared Foods segment, a non-harvesting facility closure in the Beef segment and asset write-offs in the Chicken segment and International/Other.

These charges included $ 29 million that have resulted or will result in cash outflows and $ 44 million of non-cash.

We expect to incur costs related to the network optimization plan over a multi-year period.

The following table reflects pretax expenses related to the network optimization plan in the first quarter of fiscal 2025 (in millions):

Beef Pork Chicken Prepared Foods International/Other Total

Severance costs $ 25 $ 7 $ 22 $ 53 $ 18 $ 125

Relocation and related costs 21 7 2 20 — 50

Cost of Sales:

Severance and related costs $ 5 $ — $ 2 $ 2 $ — $ 9

Accelerated depreciation 23 — — — — 23

Contract and lease terminations — — — 21 — 21

Professional and other fees 2 1 — 3 — 6

Total $ 53 $ 17 $ 24 $ 109 $ 18 $ 221

Through the third quarter of fiscal 2024, we recorded restructuring and related charges to date of $ 47 million and $ 174 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income.

Included in the above results are $ 195 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 June 29, 2024 (in millions):

Balance at September 30, 2023 Restructuring Expense Payments Changes in Estimates Balance at June 29, 2024

Severance costs $ 58 $ 6 $ ( 51 ) $ ( 2 ) $ 11

Relocation and related costs 5 8 ( 11 ) — 2

Contract and lease termination — 9 ( 9 ) — —

Professional and other fees 2 — — ( 1 ) 1

Asset write-offs 3 — 7 23 5 38

Other 1 — — — — 1

Total Cost of Sales $ 32 $ — $ 9 $ 25 $ 5 $ 71

Selling, General and Administrative:

Severance and related costs — — 2 — — 2

Total Selling, General and Administrative $ — $ — $ 2 $ — $ — $ 2

Total $ 32 $ — $ 11 $ 25 $ 5 $ 73

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

Plant Closures

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 optimize asset utilization.

As of the second quarter of fiscal 2024, we shifted production to other facilities and ceased operations at all six facilities.

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 and during the second quarter of fiscal 2024 approved the closure of a Pork segment processing facility in Perry, Iowa to optimize asset utilization.

We shifted production to other facilities and ceased operations at our Columbia and Jacksonville facilities during the first quarter of fiscal 2024, and shifted production and ceased operations at our Perry facility during the third quarter of fiscal 2024.

As a result of the plant closures, we recorded $ 41 million and $ 155 million of charges in the third quarter and first nine months of fiscal 2024, respectively, and $ 15 million and $ 107 million of charges in the third quarter and first nine months of fiscal 2023, primarily related to grower contract terminations, accelerated depreciation, severance, retention and related costs.

As of December 28, 2024 there was $ 36 million of network optimization plan liability.

Plant Closures and Disposals

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

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 and disposals, 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.

Included in the results for the first nine months of fiscal 2024 are $ 12 million of charges that have resulted or will result in cash outflows and $ 143 million in non-cash charges.

Included in the results for the first nine months of fiscal 2023 are $ 83 million of charges that have resulted or will result in cash outflows and $ 24 million of non-cash charges.

The following table reflects our liability related to plant closures as of June 29, 2024 (in millions):

Balance at September 30, 2023 Plant Closure Charges Payments Balance at June 29, 2024

Included in the results for the first three months of fiscal 2024 are $ 6 million of charges that have resulted or will result in cash outflows and $ 69 million of non-cash charges.

The following table reflects our liability related to plant closures as of December 28, 2024 (in millions):

Balance at September 28, 2024 Plant Closure Charges Payments Balance at December 28, 2024

Contract termination $ 98 $ — $ ( 8 ) $ 90

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Total $ 103 $ — $ ( 11 ) $ 92

During the first quarter of fiscal 2024, we experienced a fire at a production facility in the Netherlands which is included in International/Other for segment presentation.

Subsequent to the first quarter of fiscal 2024, we recognized additional charges due to our decision to sell the facility.

For the third quarter and first nine months of fiscal 2024, these charges totaled $ 3 million and $ 83 million, respectively, primarily related to property, plant and equipment impairments, severance costs, inventory write-offs and clean-up costs, partially offset by insurance proceeds.

The net charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and, for the first nine months of fiscal 2024, included $ 30 million of charges that have resulted or will result in cash outflows and $ 58 million of non-cash charges, offset by $ 5 million of insurance proceeds.

During the first quarter of fiscal 2024, we experienced a fire at a production facility in the Netherlands which is included in International/Other for segment presentation, and subsequently approved the sale of the facility.

For the first quarter of fiscal 2024, these charges totaled $ 26 million, primarily related to property, plant and equipment impairments, inventory write-offs and clean-up costs.

The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and, for the first three months of fiscal 2024, included $ 2 million of charges that resulted in cash outflows and $ 24 million of non-cash charges.

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

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

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

Revolving credit facility $ — $ —

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Senior notes:

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

4.00% Notes due March 2026 (“2026 Notes”) 800 800

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Discount on senior notes ( 36 ) ( 36 )

Term loan facility due May 2026 (6.49% at June 29, 2024) 750 1,000

Term loan facility due May 2028 (7.18% at June 29, 2024) 750 —

Term loan facility due May 2026 (5.72% at December 28, 2024) 750 750

Term loan facility due May 2028 (6.30% at December 28, 2024) 750 750

Finance Leases 144 126

Other 168 168

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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 June 29, 2024, 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 June 29, 2024 we had $ 87 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon.

At December 28, 2024, 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 28, 2024 we had $ 86 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.

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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 June 29, 2024, we had no commercial paper outstanding .

As of December 28, 2024, we had no commercial paper outstanding .

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

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In March 2024, we issued senior unsecured notes with an aggregate principal amount of $ 1.5 billion, consisting of $ 600 million due March 2029 ("5.40% 2029 Notes") and $ 900 million due March 2034 ("5.70% 2034 Notes").

A portion of the net proceeds from the issuances were used to repay $ 250 million of the amount outstanding under our term loan facility due May 2026 and we expect to use the remainder of the proceeds to retire the August 2024 notes.

A portion of the net proceeds from the issuances were used to repay $ 250 million of the amount outstanding under our term loan facility due May 2026, and we used the remainder of the proceeds to retire the August 2024 notes.

Interest payments on the 5.40% 2029 Notes and 5.70% 2034 Notes are due semi-annually on March 15 and September 15, beginning September 15, 2024.

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

On January 29, 2025, subsequent to the end of our first quarter of fiscal 2025, we repaid the $ 750 million term loan that matures in May 2026 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 June 29, 2024.

We were in compliance with all debt covenants at December 28, 2024.

Share Repurchases

As of June 29, 2024, 7.3 million shares remained available for repurchase under the Company's share repurchase program.

As of December 28, 2024, 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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Shares Dollars Shares Dollars Shares Dollars Shares Dollars

Three Months Ended

December 28, 2024 December 30, 2023

Shares Dollars Shares Dollars

Shares repurchased:

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Total share repurchases 0.3 $ 15 0.3 $ 13

Our effective tax rate was 22.9 % on pretax income for the third quarter of fiscal 2024, ( 1.8 )% on pretax loss for the third quarter of fiscal 2023, 25.9 % on pretax income for the first nine months of fiscal 2024 and ( 67.9 )% on pretax loss for the first nine months of fiscal 2023.

The effective tax rates for the third quarter and first nine months of fiscal 2024 are higher than the federal statutory tax rate due to the impact of foreign losses for which a tax benefit cannot be recognized, offset by a $ 9 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the third quarter of fiscal 2024.

In all periods presented, the effective tax rates were increased due to state taxes and include the impact of 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.

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

Unrecognized tax benefits were $ 136 million and $ 131 million at June 29, 2024 and September 30, 2023, respectively.

Our effective tax rate was 23.5 % and 29.4 % for the first quarter of fiscal 2025 and 2024, respectively.

The effective tax rates for the first quarter of fiscal 2025 and 2024 are 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.

Additionally, the effective tax rate for the first quarter of fiscal 2025 was decreased by the release of a $ 9 million valuation allowance on losses related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

The release of the valuation allowance was due to newly enacted tax legislation in the Netherlands.

Unrecognized tax benefits were $ 154 million and $ 151 million at December 28, 2024 and September 28, 2024, 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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Net income (loss) $ 196 $ ( 435 ) $ 458 $ ( 206 )

Net income (loss) attributable to noncontrolling interests 5 ( 18 ) 15 ( 8 )

Net income (loss) attributable to Tyson 191 ( 417 ) 443 ( 198 )

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 28, 2024 December 30, 2023

Net income $ 366 $ 114

Net income attributable to noncontrolling interests 7 7

Net income attributable to Tyson 359 107

Less dividends declared:

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Class A weighted average shares 285 284

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

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 2 1

Denominator for diluted earnings (loss) per share – weighted average shares and assumed conversions (a)

356 284 355 285

Net income (loss) per share attributable to Tyson:

Denominator for diluted earnings per share – weighted average shares and assumed conversions 357 355

Net income per share attributable to Tyson:

Class A basic $ 1.03 $ 0.31

Class B basic $ 0.93 $ 0.28

$ 0.54 $ ( 1.18 ) $ 1.25 $ ( 0.56 )

Diluted $ 1.01 $ 0.30

Dividends Declared Per Share:

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Class B $ 0.459 $ 0.450

(a) For the three and nine months ended July 1, 2023, as the Company was in a net loss position, the impact of the Class B shares under the if-converted method is antidilutive and therefore we have not assumed conversion.

As a result, the Class B weighted average shares, dividends declared and undistributed losses were excluded for the purposes of calculating Net Income (Loss) Per Share Attributable to Tyson on a diluted basis.

Accordingly, the Company adjusted the presentation for the three and nine months ended July 1, 2023 to remove the 70 million Class B weighted average shares, which did not change diluted net loss per share attributable to Tyson.

Approximately 5 million and 7 million of our stock-based compensation shares were antidilutive for the three and nine months ended June 29, 2024, respectively.

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

Approximately 5 million and 7 million of our stock-based compensation shares were antidilutive for the three months ended December 28, 2024 and December 30, 2023, 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 June 29, 2024.

No significant concentrations of credit risk existed at December 28, 2024.

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

in millions, except soybean meal tons Metric June 29, 2024 September 30, 2023

in millions, except soybean meal tons Metric December 28, 2024 September 28, 2024

Corn Bushels 87 29

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For the derivative instruments we designate and qualify as a cash flow hedge, 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.

Based on market prices as of June 29, 2024, we have net pretax losses of $ 16 million for our commodity contracts, which are expected to be reclassified into earnings within the next twelve months.

Based on market prices as of December 28, 2024, we have net pretax losses of $ 5 million for our commodity contracts, which are expected to be reclassified into earnings within the next twelve months.

Additionally, we have $ 10 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 June 29, 2024 and July 1, 2023, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.

During the three months ended December 28, 2024 and December 30, 2023, we did not reclassify significant pretax gains or losses into earnings as a result of the discontinuance of cash flow hedges.

The following table sets forth the pretax impact of cash flow hedge derivative instruments recognized in Other Comprehensive Income (in millions):

Three Months Ended Nine Months Ended

Gain (Loss) Recognized in OCI on Derivatives June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

Gain (Loss) Recognized in OCI on Derivatives December 28, 2024 December 30, 2023

Cash flow hedge - derivatives designated as hedging instruments:

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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 June 29, 2024, and July 1, 2023.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of June 29, 2024 and September 30, 2023 (in millions):

Consolidated Condensed Balance Sheets Classification June 29, 2024 September 30, 2023

Ineffectiveness related to fair value hedges was not significant for the three months ended December 28, 2024, and December 30, 2023.

The following table sets forth the carrying amount of fair value hedge (assets) liabilities as of December 28, 2024 and September 28, 2024 (in millions):

Consolidated Condensed Balance Sheets Classification December 28, 2024 September 28, 2024

Inventory $ 16 $ ( 3 )

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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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Consolidated Condensed Statements of Income Classification Three Months Ended

December 28, 2024 December 30, 2023

Cost of Sales $ 12,528 $ 12,496

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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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

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

Commodity contracts (a) $ 2 $ ( 5 ) $ 5 $ ( 6 )

Gain (Loss) on cash flow hedges reclassified from OCI to earnings:

Consolidated Condensed Statements of Income Classification Three Months Ended

December 28, 2024 December 30, 2023

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

Commodity contracts $ ( 11 ) $ —

Gain (Loss) on fair value hedges:

Commodity contracts (a) ( 4 ) ( 1 )

Gain (Loss) on derivatives not designated as hedging instruments:

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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):

June 29, 2024 Level 1 Level 2 Level 3 Netting (a) Total

December 28, 2024 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 June 29, 2024, and September 30, 2023, we had $ 39 million and $ 113 million, respectively, of net cash collateral with various counterparties where master netting arrangements exist and held no cash collateral.

Additionally, at December 28, 2024, and September 28, 2024, we had $ 55 million and $ 54 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

June 29, 2024 July 1, 2023

Three Months Ended

December 28, 2024 December 30, 2023

Balance at beginning of year $ 28 $ 30

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Balance at end of period $ 25 $ 30

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):

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

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 nine months ended June 29, 2024, and July 1, 2023.

We recognized no direct write-offs or allowances for credit losses in earnings for the three months ended December 28, 2024, and December 30, 2023.

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.

During the nine months ended June 29, 2024, we recorded a fixed asset impairment charge of $ 28 million in Cost of Sales in the Consolidated Condensed Statements of Income as a result of our decision to sell our Netherlands facility.

The charge was derived using Level 3 inputs and was driven by management's estimate of the potential proceeds from the disposal of the assets.

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 June 29, 2024.

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 had $ 247 million and $ 3 million of assets held for sale recorded within Other current assets in the Consolidated Condensed Balance Sheets at June 29, 2024 and September 30, 2023, respectively, primarily consisting of property, plant and equipment and goodwill.

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 28, 2024 and December 30, 2023.

Other Financial Instruments

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

June 29, 2024 September 30, 2023

December 28, 2024 September 28, 2024

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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

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

Three Months Ended

December 28, 2024 December 30, 2023

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 11 ( 3 ) 8 — — —

Unrealized gain (loss) ( 8 ) 2 ( 6 ) — — —

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( 112 ) 4 ( 108 ) 59 ( 1 ) 58

Translation loss reclassified to cost of sales 3 — 3 — — —

Postretirement benefits:

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Total other comprehensive income (loss) $ ( 107 ) $ 3 $ ( 104 ) $ 65 $ ( 2 ) $ 63

(a) Before and after tax translation adjustment for the three months ended June 29, 2024 included $( 1 ) million of Comprehensive Income (Loss) Attributable to Noncontrolling Interests.

There was no Comprehensive Income (Loss) Attributable to Noncontrolling Interests included in before and after tax translation adjustment for the nine months ended June 29, 2024.

(a) Before and after tax translation adjustment for the three months ended December 28, 2024 and December 30, 2023 included $( 7 ) million and $ 8 million of Comprehensive Income (Loss) Attributable to Noncontrolling Interests, respectively.

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, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

International/Other primarily includes our foreign operations in China, Malaysia, Mexico, 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.

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.

This segment also includes sales from specialty products such as hides, rendered products 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.

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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.

Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, convenience stores, 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 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 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

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

December 28, 2024 December 30, 2023

Beef $ 5,335 $ 5,023

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Total Sales $ 13,623 $ 13,319

Three Months Ended Nine Months Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

December 28, 2024 December 30, 2023

Operating Income (Loss):

$ ( 64 ) $ ( 206 )

( 62 ) ( 74 ) ( 24 ) ( 128 )

244 ( 314 ) 579 ( 503 )

Prepared Foods 203 206 676 705

International/Other (d)

25 ( 234 ) ( 37 ) ( 238 )

Prepared Foods (d)

International/Other (e)

Total Operating Income (Loss) 580 231

Total Other (Income) Expense 102 70

Income (Loss) before Income Taxes $ 253 $ ( 426 ) $ 617 $ ( 122 )

(a) Beef segment results for the nine months ended June 29, 2024 included a $ 45 million legal contingency accrual and $ 41 million of costs related to plant closures recognized in Cost of Sales.

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.

(b) Pork segment results for the three and nine months ended June 29, 2024 included $ 39 million and $ 73 million, respectively, of costs related to plant closures, recognized in Cost of Sales.

Additionally, Pork segment results for the three and nine months ended June 29, 2024 included $ 45 million and $ 73 million, respectively, related to the recognition of legal contingency accruals, of which the amount recognized in the third quarter of fiscal 2024 was a reduction to Sales and the remainder was recognized in Cost of Sales.

(c) Chicken segment results for the three and nine months ended June 29, 2024 included $ 2 million and $ 41 million, respectively, of costs related to plant closures and $ 5 million of production facility fire costs incurred, net of insurance proceeds, and $ 19 million of insurance proceeds, net of costs incurred, respectively, recognized in Cost of Sales.

Chicken segment results for the three and nine months ended June 29, 2024 included a $ 56 million legal contingency accrual, recognized in Costs of Sales.

Chicken segment results for the three and nine months ended July 1, 2023 included production facility fire 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 a charge of $ 38 million related to the recognition of a legal contingency accrual, recognized as a reduction to Sales, and $ 210 million of goodwill impairment.

(d) International/Other results for the three and nine months ended June 29, 2024 included $ 3 million and $ 83 million, respectively, of costs, net of insurance proceeds, related to a fire at our production facility in the Netherlands and subsequent decision to sell, recognized in Cost of Sales.

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

Income before Income Taxes $ 478 $ 161

(a) Beef segment results for the three months ended December 28, 2024 included $ 32 million in network optimization plan charges, recognized in Cost of Sales.

Additionally, Beef segment results for the three months ended December 30, 2023 included $ 40 million of costs related to plant closures and disposals and a $ 45 million legal contingency accrual, 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 28, 2024 included $ 6 million of brand discontinuation charges, recognized in Selling, General and Administrative.

Additionally, Chicken segment results for the three months ended December 28, 2024 included network optimization plan charges of $ 9 million and $ 2 million, recognized in Cost of Sales and Selling, General and Administrative, respectively.

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 and disposals of $ 35 million, recognized in Cost of Sales.

(d) Prepared Foods segment results for the three months ended December 28, 2024 included $ 25 million in network optimization plan charges, recognized in Cost of Sales.

Prepared Foods segment results for the three months ended December 30, 2023 included restructuring and related charges of $ 1 million and $ 20 million, recognized in Cost of Sales and Selling, General and Administrative, respectively.

(e) International/Other results for the three months ended December 28, 2024 included $ 5 million in network optimization plan charges, recognized in Cost of Sales.

International/Other results for the three months ended December 30, 2023 included $ 26 million of costs related to a fire at our production facility in the Netherlands and subsequent decision to sell, recognized in Cost of Sales.

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

Three months ended June 29, 2024

Foodservice (b)

International (c)

Industrial and Other (d)

Total External Customers Intersegment Total

Beef $ 2,566 $ 1,318 $ 707 $ 541 $ 5,132 $ 109 $ 5,241

Pork 464 141 322 228 1,155 307 1,462

Chicken 1,720 1,567 256 509 4,052 24 4,076

Prepared Foods 1,434 876 58 64 2,432 — 2,432

International/Other — — 582 — 582 — 582

Intersegment — — — — — ( 440 ) ( 440 )

Total $ 6,184 $ 3,902 $ 1,925 $ 1,342 $ 13,353 $ — $ 13,353

Three months ended July 1, 2023

Foodservice (b)

International (c)

Industrial and Other (d)

Total External Customers Intersegment Total

Beef $ 2,313 $ 1,257 $ 671 $ 575 $ 4,816 $ 140 $ 4,956

Pork 394 125 294 305 1,118 206 1,324

Chicken 1,823 1,636 264 467 4,190 22 4,212

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

International/Other — — 633 — 633 — 633

Intersegment — — — — — ( 368 ) ( 368 )

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

Nine months ended June 29, 2024

Three months ended December 28, 2024

Foodservice (b)

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Total $ 6,340 $ 4,038 $ 1,896 $ 1,349 $ 13,623 $ — $ 13,623

Nine months ended July 1, 2023

Three months ended December 30, 2023

Foodservice (b)

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(d) Includes external 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 June 29, 2024 , the Pork segment included a $ 45 million reduction in Other due to the recognition of a legal contingency accrual.

For the three and nine months ended July 1, 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 June 29, 2024, was not significant.

The remaining terms of the underlying obligations cover periods up to 7 years, and the maximum potential amount of future payments as of December 28, 2024, was not significant.

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

At June 29, 2024 and September 30, 2023, no significant liabilities for guarantees were recorded.

At December 28, 2024 and September 28, 2024, 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 June 29, 2024 was approximately $ 280 million.

The total receivables under these programs were $ 14 million and $ 12 million at June 29, 2024 and September 30, 2023, respectively.

The potential maximum commitment as of December 28, 2024 was approximately $ 235 million.

The total receivables under these programs were $ 12 million and $ 14 million at December 28, 2024 and September 28, 2024, respectively.

These receivables are included, net of allowance for uncollectible amounts, in Accounts Receivable in our Consolidated Condensed Balance Sheets.

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

We had no deposits at June 29, 2024 and September 30, 2023.

We had no deposits at December 28, 2024 and September 28, 2024.

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 June 29, 2024, the total amount under these types of arrangements totaled $ 802 million.

At December 28, 2024, the total amount under these types of arrangements totaled $ 852 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.

Broiler Antitrust Civil Litigation

Beginning in September 2016, a series of putative federal class action lawsuits styled In re Broiler Chicken Antitrust Litigation (the “Broiler Antitrust Civil Litigation”) were filed in the United States District Court for the Northern District of Illinois against us and certain of our poultry subsidiaries, as well as several other poultry processing companies.

The operative complaints, which have been amended throughout the litigation, contain allegations that, among other things, assert that beginning in January 2008, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of broiler chickens in violation of United States antitrust laws.

The plaintiffs also allege that the defendants “manipulated and artificially inflated a widely used Broiler price index, the Georgia Dock.” The plaintiffs further allege that the defendants concealed this conduct from the plaintiffs and the members of the putative classes.

The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative classes.

In addition, the complaints on behalf of the putative classes of indirect purchasers include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.

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 attempt to do so in the future.

Broiler Antitrust Civil Litigation and Related Matters

("Agri Stats"), an information service provider.

As described below, the Company reached agreements to settle all outstanding claims brought against it by the putative classes, and the Court has granted final approval to these settlements.

Certain putative class members chose to opt out of the classes and pursue individual claims against the Company and other defendants in the United States District Court for the Northern District of Illinois.

The operative complaints allege that beginning in January 2008, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of broiler chickens and that the defendants manipulated and artificially inflated the Georgia Dock price index.

The plaintiffs further allege that the defendants concealed this conduct from the plaintiffs and the members of the putative classes.

The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees under the United States antitrust laws and various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.

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 Company did not participate in the first trial because it had previously settled all of the claims brought by the plaintiffs that participated in that trial.

The second scheduled trial in this matter, which was to involve claims brought by the Commercial and Institutional Indirect Purchaser Class, was scheduled to begin in March 2024, but it was cancelled because all claims brought by the Commercial and Institutional Indirect Purchaser Class were resolved before trial.

The third scheduled trial in this matter, which will involve claims brought by the End-User Consumer Plaintiff Class, is currently scheduled to begin in September 2024.

The Company will not participate in this trial because it has already settled all of the claims brought by the End-User Consumer Plaintiff Class.

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

Both of these trials were cancelled because all claims brought by these classes were resolved before trial.

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 Consumer 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.

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.

On June 29, 2021, December 20, 2021 and April 18, 2022, the Court granted final approval to the settlements with the Direct Purchaser Plaintiff Class, the End-User Plaintiff Class and the Commercial and Institutional Indirect Purchaser Plaintiff Class, respectively.

The foregoing settlements do not settle claims made by plaintiffs who opt out of the Classes in the Broiler Antitrust Civil Litigation.

The foregoing settlements do not settle claims made by plaintiffs who have opted out of the Classes in the Broiler Antitrust Civil Litigation.

We are currently pursuing settlement discussions with the remaining opt-out plaintiffs with respect to the remaining claims.

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Subsequently, we received a grand jury subpoena from the DOJ seeking additional documents and information related to the chicken industry.

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 a conspiracy to engage in bid-rigging in violation of federal antitrust laws.

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

Subsequently, the DOJ 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.

None of these indictments remain pending.

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 .

The Offices of the Attorneys General in New Mexico and Alaska have filed complaints against us and certain of our poultry subsidiaries, as well as several other poultry processing companies and Agri Stats, Inc., an information services provider (“Agri Stats”).

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.

State Attorney General Matters .

The Offices of the Attorneys General in Washington, New Mexico and Alaska have filed complaints against us and certain of our poultry subsidiaries, as well as several other poultry processing companies and Agri Stats based on allegations similar to those asserted in the Broiler Antitrust Civil Litigation.

These complaints alleged violations of state antitrust, unfair trade practice, and unjust enrichment laws.

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.

In October 2022, we reached an agreement to settle all claims with the Washington Attorney General, and the court entered a consent decree on October 24, 2022.

On February 16, 2024, the Company and the State of Alaska filed a stipulation and proposed consent decree reflecting a settlement of the claims against the Company asserted by the Office of the Attorney General of Alaska.

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While the Company believes it has meritorious defenses to the claims that have been made, we believe that these settlements are in the best interests of the Company and its shareholders to 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.

As of June 29, 2024 and September 30, 2023, the legal contingency accrual for claims related to the Broiler Antitrust Civil Litigation matters described above was $ 92 million and $ 184 million, respectively.

The decrease in the accrual is due to payments made during the first nine months of fiscal 2024.

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimabl e at this time.

Broiler Chicken Grower Investigation

During the three months ended December 28, 2024 and December 30, 2023 the Company did not record any contingency accruals for claims related to these matters.

Additionally, during the first quarter of fiscal 2025 and 2024, the Company reduced its total recorded legal contingency accrual by $ 21 million and $ 15 million, respectively, for amounts it had paid related to these matters.

At December 28, 2024 and September 28, 2024, the legal contingency accrual for claims related to the Broiler Antitrust Civil Litigation matters described above was $ 65 million and $ 86 million, respectively.

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimable at this time.

Broiler Chicken Grower Litigation and Investigation

On January 27, 2017 and March 26, 2017, putative class action complaints were filed against us and certain of our poultry subsidiaries, as well as several other vertically integrated poultry processing companies, in the United States District Court for the Eastern District of Oklahoma styled In re Broiler Chicken Grower Litigation .

The plaintiffs allege, among other things, that the defendants colluded not to compete for broiler raising services “with the purpose and effect of fixing, maintaining, and/or stabilizing grower compensation below competitive levels.” The plaintiffs also allege that the defendants “agreed to share detailed data on [g]rower compensation with one another, with the purpose and effect of artificially depressing [g]rower compensation below competitive levels.” The plaintiffs contend these alleged acts constitute violations of the Sherman Antitrust Act and Section 202 of the Grain Inspection, Packers and Stockyards Act of 1921.

The plaintiffs are seeking treble damages, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative class.

Additional named plaintiffs filed similar class action complaints in federal district courts in North Carolina, Colorado, Kansas and California.

All actions were subsequently consolidated in the Eastern District of Oklahoma.

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.

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.

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.

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The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees on behalf of the putative classes.

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.

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 try to do so in the future.

The Offices of the Attorney General in New Mexico and Alaska have filed complaints against us and certain of our pork subsidiaries, as well as several other pork processing companies and Agri Stats.

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.

On October 18, 2024, we reached a settlement with the State of Alaska to resolve all claims made against the Company for an immaterial amount.

The court approved the settlement on January 7, 2025.

While the Company believes it has meritorious defenses to the claims that have been made, we believe that this settlement is in the best interests of the Company and its shareholders to avoid the uncertainty, risk, expense and distraction of protracted litigation.

In the third quarter of fiscal 2024, we filed and joined motions for summary judgment that, if successful, would dispose of all claims against us brought by all the plaintiffs in the Pork Antitrust Civil Litigation.

While we believe we have strong summary judgment arguments, as well as other valid and meritorious defenses to the claims that have been made in the Pork Antitrust Civil Litigation and the related Attorney General matters, we are exploring the possibility of entering into settlements as a way to avoid the uncertainty, risk, expense and distraction of protracted litigation.

We recorded a legal contingency accrual of $ 45 million in the third quarter of fiscal 2024 as a loss is now probable.

Beef Antitrust Litigation

On April 23, 2019, a putative class action complaint was filed against us and our beef and pork subsidiary, Tyson Fresh Meats, Inc.

(“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.

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

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.

Other similar lawsuits were filed by cattle ranchers in other district courts which were then transferred to the United States District Court for the District of Minnesota and consolidated and styled as In Re Cattle Antitrust Litigation .

On February 18, 2021, we moved to dismiss the amended complaints, and on September 14, 2021, the court granted the motion with respect to certain state law claims but denied the motion with respect to the plaintiffs’ federal antitrust claims.

The Company has not recorded any liability for this matter as it does not believe a loss is probable, nor does it believe that a range of possible loss, if any, is 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 April 26, 2019, a putative class of indirect purchasers filed a class action complaint against us, other beef packers, and Agri Stats in the United States District Court for the District of Minnesota.

The plaintiffs allege that the packer defendants conspired to reduce slaughter capacity by closing or idling plants, limiting their purchases of cash cattle, coordinating their procurement of cash cattle, and reducing their slaughter numbers so as to reduce beef output, all in order to artificially raise prices of beef.

The plaintiffs seek, among other things, damages under state antitrust and consumer protection statutes and the common law of approximately 30 states, as well as injunctive relief.

The indirect consumer purchaser litigation is styled Peterson v.

JBS USA Food Company Holdings, et al .

Additional complaints have been filed on behalf of a putative class of direct purchasers of beef containing allegations of violations of Section 1 of the Sherman Act based on an alleged conspiracy to artificially fix, raise, and stabilize the wholesale price for beef, as well as on behalf of a putative class of commercial and institutional indirect purchasers of beef containing allegations of violations of Section 1 of the Sherman Act, various state antitrust laws and unjust enrichment based on an alleged conspiracy to artificially inflate the price for beef.

On February 18, 2021, we moved to dismiss the plaintiffs’ amended complaints, and on September 14, 2021, the court granted the motion with respect to certain state law claims but denied the motion with respect to the plaintiffs’ federal antitrust claims.

At December 28, 2024 and September 28, 2024, the legal contingency accrual for claims related to the Pork Antitrust Civil Litigation matter described above was $ 45 million .

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimable at this time.

Beef Antitrust Litigation and Related Matters

Beginning on April 23, 2019, a series of class action complaints were filed against us and our beef and pork subsidiary, Tyson Fresh Meats, Inc.

(“Tyson Fresh Meats”), as well as other beef packer defendants, in various federal district courts, including the United States District Court for Northern Illinois, the United States District Court for the District of Minnesota, and the United States District Court for the District of Kansas, by putative classes of direct purchasers, cattle ranchers, indirect purchasers, and indirect cattle producers.

The putative classes in these cases allege that the defendants engaged in one or more conspiracies beginning in roughly January 2015 with the aim of reducing fed cattle prices, manipulating the price of live cattle futures and options traded on the Chicago Mercantile Exchange, artificially increasing the cost of beef, and reducing the price of cows, cattle, calves, steers or heifers.

The putative classes allege that this conduct violated federal antitrust laws, the Grain Inspection, Packers and Stockyards Act of 1921, the Commodities Exchange Act, and various state unfair competition, consumer protection, and unjust enrichment laws.

Their complaints seek, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest, as well as declaratory and injunctive relief.

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.

These cases have been transferred to the United States District Court for the District of Minnesota for pretrial purposes.

The matter is currently in the fact discovery phase, and the putative classes filed motions for class certification on September 25, 2024.

The Company has not recorded any liability for these foregoing matters as it does not believe a loss is probable, nor does it believe that a range of possible loss, if any, is 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 February 18, 2022, a putative class action was commenced against us, Tyson Fresh Meats, and other beef packer defendants in the Supreme Court of British Columbia styled Bui v.

Cargill, Incorporated et al.

The plaintiff alleges that the defendants conspired to fix, maintain, increase, or control the price of beef, as well as to fix, maintain, control, prevent, or lessen the production or supply of beef by agreeing to reduce the number of cattle slaughtered, reduce slaughter capacity, refrain from increasing slaughter and beef processing capacity, limit purchases of cattle on the cash market, and coordinate purchases of and bids for cattle to lower the supply of fed cattle.

The plaintiff advances causes of action under the Competition Act, civil conspiracy, unjust enrichment, and the Civil Code of Québec.

The plaintiff seeks to certify a class comprised of all persons or entities in Canada who directly or indirectly purchased beef in Canada, either for resale or for their own consumption between January 1, 2015, and the present and seeks declarations regarding the alleged conspiracy, general damages, aggravated, exemplary, and punitive damages, injunctive relief, costs, and interest.

The putative class is comprised of direct and indirect beef purchasers in Canada between January 1, 2015 and the present, and alleges that the defendants conspired to fix, maintain, increase, or control the price of beef, as well as to fix, maintain, control, prevent, or lessen the production or supply of beef.

The complaint alleges a violation of the Competition Act, civil conspiracy, unjust enrichment, and a violation of the Civil Code of Québec.

It seeks declarations regarding the alleged conspiracy, general damages, aggravated, exemplary, and punitive damages, injunctive relief, costs, and interest.

On March 24, 2022, a putative class action was commenced against the same defendants in the Superior Court of Québec styled De Bellefeuille v.

Cargill, Incorporated et al.

The plaintiff is making substantially the same allegations as those made in the British Columbia action.

On behalf of the putative class of persons who purchased beef in Québec since January 1, 2015, the plaintiff is seeking compensatory damages, costs of investigation and interest.

The Company has not recorded any liability for the foregoing matters as it does not believe a loss is probable, nor does it believe that a range of possible loss, if any, is 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 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 amended complaint, and the court granted the motion on May 28, 2024.

The plaintiffs have indicated that they will seek to amend the complaint again.

Cargill, Incorporated et al, raising substantially similar allegations and seeking compensatory damages, costs of investigation and interest.

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 Company has not recorded any liability for this matter as it does not believe a loss is probable, nor does it believe that a range of possible loss, if any, is reasonably estimable at this time.

We received a subpoena dated April 21, 2022 from the New York Attorney General’s Bureau of Consumer Frauds & Protection seeking information regarding our sales, prices and production costs of beef, pork and chicken products.

After we had made an initial production of information, we were unable to agree with the New York Attorney General's office on the appropriate scope of the subpoena.

Following initial litigation on the scope of the subpoena, we produced documents responsive to the subpoena.

Wage Rate Litigation

Wage Rate Litigation and Related Matters

On August 30, 2019, a putative class of non-supervisory production and maintenance employees at chicken processing plants in the continental United States filed class action complaints against us and certain of our subsidiaries, as well as several other poultry processing companies, in the United States District Court for the District of Maryland.

The plaintiffs allege that the defendants directly and through a wage survey and benchmarking service exchanged information regarding labor rates in an effort to depress and fix the rates of wages for non-supervisory production and maintenance workers in violation of federal antitrust laws.

The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest, as well as declaratory and injunctive relief.

Additional lawsuits making similar allegations were consolidated including an amended consolidated complaint containing additional allegations concerning turkey processing plants naming additional defendants.

We moved to dismiss the amended consolidated complaint.

On September 16, 2020, the court dismissed claims against us and certain other defendants without prejudice because the complaint improperly grouped together corporate subsidiaries.

The court otherwise denied the defendants’ motions to dismiss and sustained claims based on alleged conspiracies to fix wages and exchange information against five other defendants.

The plaintiffs filed a second amended consolidated complaint on November 2, 2020.

We moved to dismiss the complaint on December 18, 2020 based on a lack of standing to assert claims on behalf of the purported class.

The court denied the motion to dismiss on March 10, 2021.

On February 16, 2022, the plaintiffs filed a third amended consolidated complaint naming additional poultry processors as defendants and expanding the scope of the claims to include employees at hatcheries and feed mills.

We moved to dismiss the claims related to hatchery and feed mill employees.

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

On May 10, 2024 and June 3, 2024, the Company participated in mediation with the putative class plaintiffs.

Following the mediation, on June 14, 2024, the Company reached an agreement in principle with the putative class plaintiffs to settle all claims in the case for an aggregate amount of $ 115.5 million.

As a result, we recorded an increase to our legal contingency accrual of $ 56 million in the third quarter of fiscal 2024.

This agreement in principle remains subject to court approval.

At December 28, 2024 and September 28, 2024, the legal contingency accrual for claims related to the Poultry wage rate litigation matter described above was $ 116 million.

This settlement 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.

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.

As of June 29, 2024 and September 30, 2023, the legal contingency accrual for claims related to this matter was $ 116 million and $ 60 million, respectively.

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimable at this time.

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

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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.

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.

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 which remains accrued as of June 29, 2024 .

Under the terms of the settlement, the Company agreed to pay the putative class an aggregate amount of $ 72.5 million to completely resolve all claims made against the Company in this matter.

The court approved the settlement on January 15, 2025.

During the first quarter of fiscal 2024, the Company recorded an accrual for the $ 72.5 million settlement which remained accrued as of December 28, 2024 and September 28, 2024 .

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimable at this time.

Other Matters

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The parties filed numerous appeals, motions for reconsideration and petitions for review related to the NLRC award and settlement payment.

The Court of Appeals subsequently vacated the NLRC’s award on April 12, 2018.

Complainants have filed motions for reconsideration with the Court of Appeals which were denied.

Claimants have since filed petitions for writ of certiorari with the Supreme Court of the Philippines, which has been accepted.

The Court of Appeals of the Philippines subsequently vacated the NLRC’s award on April 12, 2018.

Complainants filed motions for reconsideration with the Court of Appeals which were denied.

Claimants have since filed petitions for writ of certiorari with the Supreme Court of the Philippines, which have been accepted.

The Company continues to maintain an accrual in an immaterial amount for estimated probable losses for this matter in the Company’s Consolidated Financial Statements.

The Company does not believe that a range of possible loss, if any, in excess of the recorded accrual is reasonably estimable at this time.

The Company does not believe that a range of possible loss, if any, in excess of the

recorded accrual is reasonably estimable at this time.

Various claims have been asserted against the Company, its subsidiaries, and its officers and agents by, and on behalf of, team members who claim to have contracted COVID-19 in our facilities.

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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