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Item 7. Management’s Discussion and Analysis

2025-11-10 compared with 2024-11-12 · 167 added, 168 removed, 510 unchanged (40% of the section changed)

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Our objective is to also provide discussion of events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides understanding of our financial condition, cash flows and results of operations.

Refer to the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2022 for additional information related to fiscal 2022.

Refer to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for additional information related to fiscal 2023.

DESCRIPTION OF THE COMPANY

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We Feed the World Like Family™ and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®.

Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, sustainably, and affordably, now and for future generations.

Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, and affordably, now and for future generations.

We operate in four reportable segments:

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We measure segment profit as operating income (loss).

International/Other primarily includes our foreign operations in Australia, 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.

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.

For further description of the business, refer to Part I, Item 1, Business.

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The Company’s accounting cycle resulted in a 52-week year for fiscal 2025, 2024 and 2023.

Sales increased $0.4 billion to $53.3 billion in fiscal 2024, largely due to higher average sales prices in our Beef segment.

We reported operating income of $1,409 million in fiscal 2024 as compared to an operating loss of $395 million in fiscal 2023, as we experienced higher operating income in all our segments other than the Beef segment.

During fiscal 2024, we incurred higher performance-based compensation costs of $378 million driven by improved consolidated results.

Due to the nature of our performance-based compensation plans, our segments were primarily impacted based on their relative number of eligible team members, and thus, our Chicken and Prepared Foods segments incurred a greater proportion of the total costs.

Additionally, in fiscal 2024, our operating income was impacted by $182 million of plant closure and disposal charges, $174 million in legal contingency accruals, $86 million of costs related to a production facility fire in the Netherlands and the subsequent decision to sell the facility, $31 million of restructuring and related charges and $8 million of brand discontinuation costs, partially offset by the benefit of $70 million of insurance proceeds, net of costs incurred, related to fires at our production facilities.

In fiscal 2023, our results were impacted by $781 million of goodwill impairment charges, $322 million of plant closure and disposal charges, $156 million of legal contingency accruals, $124 million of restructuring and related charges, $17 million of product line discontinuation charges, and benefited from $53 million of insurance proceeds, net of costs incurred, related to fires at our production facilities and $19 million related to the relocation of a production facility in China.

Sales grew 2.1%, or $1.1 billion to $54.4 billion in fiscal 2025, largely due to higher average sales prices in our Beef, Pork and Prepared Foods segments, partially offset by $653 million of increased legal contingency accruals which reduced sales.

We reported operating income of $1,098 million in fiscal 2025 as compared to an operating income of $1,409 million in fiscal 2024, as we experienced lower operating income in our Beef and Pork segments, partially offset by higher operating income in our Chicken and Prepared Foods segments and International/Other.

In fiscal 2025, our operating income was impacted by $738 million of legal contingency accruals, $343 million of goodwill and intangible impairments, $45 million of restructuring and related charges, $41 million of charges related to a product recall and $23 million related to brand and product line discontinuations.

In fiscal 2024, our results were impacted by $182 million of plant closure and disposal charges, $174 million of legal contingency accruals and $31 million of restructuring and related charges.

Market Environment

According to the USDA, domestic protein production (beef, pork, chicken and turkey) increased slightly in fiscal 2024 compared to fiscal 2023.

The Beef segment experienced limited supply of market-ready cattle and increased live cattle costs.

According to the most recently published USDA data, domestic protein production (beef, pork, chicken and turkey) decreased slightly in fiscal 2025 compared to fiscal 2024.

The Beef segment continues to experience limited supply of market-ready cattle as well as increased cattle costs.

Additionally, uncertainty exists regarding the timing of the anticipated cattle herd rebuilding.

The Pork segment experienced sufficient supply and reduced hog costs.

The Chicken segment experienced reduced feed ingredient costs.

The Prepared Foods segment experienced reduced raw material costs primarily due to lower meat costs.

Additionally, the conflicts between Ukraine and Russia, in addition to the Middle East, are ongoing and there are many risks and uncertainties in relation to the conflicts that are outside of our control.

As of September 28, 2024, the impact of these conflicts have not had a material direct impact on our financial performance.

If these conflicts escalate further, impact additional regions or countries, or have additional economic sanctions imposed, it could have a material impact on our business operations and financial performance.

The Pork segment experienced sufficient supply of market-ready hogs and increased hog costs.

The Chicken segment experienced reduced feed ingredient costs, but costs began to stabilize in the back half of fiscal 2025.

The Prepared Foods segment is currently experiencing increased raw material costs primarily due to higher meat costs.

We are subject to changes in import and export policies, including trade restrictions, new or increased tariffs or quotas, and customs restrictions through our international sales and operations.

Our exports account for less than 10% of our business, primarily composed of chicken leg quarters and paws, boxed beef and variety meats of all proteins.

As a result of the recent changes in trade policies and tariffs both domestically and internationally, we may experience some sales disruptions and other impacts associated with tariffs.

There is uncertainty regarding the impact the current changes will have on the price and demand of our products in the affected countries, commodity pricing and other general economic conditions, and uncertainty in future changes that may have a material impact.

Our total operating margin was 2.0% in fiscal 2025.

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and scale in international markets by delivering profitable value-added food offerings in high growth categories.

During fiscal 2025, the Company initiated a network optimization plan to optimize our global operations and logistics network.

We anticipate recognizing total pretax charges of $86 million related to actions approved through September 27, 2025, which include $99 million that have resulted or will result in cash outflows and $94 million of non-cash charges, partially offset by $107 million gain recognized from the sale of storage facilities.

Additionally, we received $252 million in proceeds associated with the sale of storage facilities during fiscal 2025.

We expect to incur costs related to the network optimization plan over a multi-year period and anticipate additional charges in the future as further actions are approved.

In fiscal 2025, we recognized charges of $45 million related to the network optimization plan, which included a gain of $107 million from the sale of storage facilities.

The charges primarily included the closure of two facilities in the Prepared Foods segment, a non-harvesting facility closure in the Beef segment, asset write-offs in the Chicken and Prepared Foods segments and International/Other as well as severance and related costs and contract and lease termination costs.

For additional description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 7:

Restructuring and Related Charges.

SUMMARY OF RESULTS

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Sales growth 2.1 % 0.8 %

• Sales Volume – Volumes were essentially flat and resulted in a decrease of $10 million as decreased sales volume in our Beef, Pork and Prepared Foods segments were offset by increased sales volume in our Chicken segment.

• Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $1,795 million, driven by increased pricing in our Beef, Pork and Prepared Foods segments, while pricing in our Chicken segment was relatively flat.

◦ The above changes in average sales price exclude the impacts of $698 million and $45 million reductions of Sales from the recognition of legal contingency accruals in fiscal 2025 and 2024, respectively.

• Sales Volume – Volumes were essentially flat and resulted in an increase of $19 million as increased sales volume in our Beef, Pork and Prepared Foods segments were mostly offset by decreased sales volume in our Chicken segment.

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◦ The above changes in average sales price exclude the impacts of $45 million and $156 million reductions of Sales from the recognition of legal contingency accruals in fiscal 2024 and 2023, respectively.

• Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $507 million, driven by increased volumes in our Chicken segment, partially offset by decreased volumes in our Beef segment due to the reduced domestic availability of live cattle and our Pork segment as a result of balancing our supply with customer demand.

• Average Sales Price – Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $752 million, driven by reduced pricing in our Pork and Chicken segments, partially offset by higher average sales prices in our Beef and Prepared Foods segments.

◦ The above change in average sales price for fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals.

Cost of Sales in millions

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Cost of sales as a percentage of sales 93.5 % 93.2 %

• Cost of sales increased $1,197 million.

Lower sales volume decreased cost of sales by $10 million while higher input cost per pound increased cost of sales by $1,207 million.

• The $1,207 million impact of higher input cost per pound was impacted by:

• Increase in cattle costs of approximately $1,840 million in our Beef segment.

• Increase in raw material and other input costs of approximately $345 million in our Prepared Foods segment.

• Increase in hog costs of approximately $295 million in our Pork segment.

• Increase of $43 million related to restructuring and related charges.

• Decrease of approximately $340 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease of $89 million related to lower legal contingency accruals in our Beef, Pork and Chicken segments partially offset by an increase in International/Other.

• Decrease of $165 million in plant closure and disposal charges.

• Decrease in freight and transportation costs of approximately $110 million.

• Decrease of $34 million in facility fire related costs, net of insurance proceeds, in our Chicken segment and International/Other.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes in addition to savings from our productivity program.

• The $10 million impact of decreased sales volume was primarily driven by decreased volumes in our Beef, Pork and Prepared Foods segments.

• Cost of sales decreased $568 million.

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• Decrease in freight and transportation costs of approximately $310 million.

• Decrease of $140 million due to plant closures and disposals.

• Decrease of $140 million due to plant closure and disposal charges.

• Decrease in hog costs of approximately $135 million in our Pork segment.

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• The $18 million impact of increased sales volume was primarily driven by increased volumes in our Beef, Pork and Prepared Foods segments.

• Cost of sales increased $3,636 million.

Higher sales volume increased cost of sales by $444 million while higher input cost per pound increased cost of sales by $3,192 million.

• The $3,192 million impact of higher input cost per pound was impacted by:

• Increase in live cattle costs of approximately $2,135 million in our Beef segment.

• Increase due to net derivative losses of $117 million in fiscal 2023, compared to net derivative gains of $225 million in fiscal 2022 due to our risk management activities.

These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein.

• Increase of $322 million due to costs associated with plant closures and disposals.

• Increase of $238 million related to inventory lower of cost or net realizable value adjustments.

• Increase of approximately $36 million in our Chicken segment related to net increases in feed ingredients costs and growout expenses, partially offset by reduced outside meat purchases.

• Increase of approximately $24 million in our Chicken segment due to $11 million of insurance proceeds, net of costs incurred, in fiscal 2023 compared to $35 million of insurance proceeds, net of costs incurred, in fiscal 2022 related to the fire at our production facility in fiscal 2021.

• Decrease in live hog costs of approximately $295 million in our Pork segment.

• Decrease in freight and transportation costs of approximately $175 million.

• Decrease in raw material and other input costs of approximately $45 million in our Prepared Foods segment.

• Remaining increase in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes as well as the impact of the inflationary environment on our labor and other input costs, partially offset by savings from our productivity program.

• The $444 million impact of increased sales volume was primarily driven by increased volumes in our Chicken segment.

Selling, General and Administrative in millions

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• Decrease of $97 million in selling, general and administrative was primarily driven by:

• Decrease of $43 million in professional fees.

• Decrease of $35 million in marketing, advertising and promotion expenses.

• Decrease of $29 million in restructuring and related costs.

• Decrease of $25 million in team member costs.

• Increase of $30 million in technology costs.

• Decrease of $27 million in selling, general and administrative was primarily driven by:

• Decrease of $71 million in marketing, advertising and promotion expenses.

• Decrease of $64 million in restructuring and related costs.

• Decrease of $28 million in corporate facilities and assets costs.

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• Increase of $155 million in team member costs including $205 million in performance-based compensation partially offset by a decrease of $50 million in all other team member costs.

• Increase of $8 million in brand discontinuation costs.

• Decrease of $13 million in selling, general and administrative was primarily driven by:

• Decrease of $171 million in employee costs primarily from incentive-based compensation.

• Decrease of $26 million in professional fees.

• Increase of $71 million from a gain recognized in the fiscal year ended October 1, 2022 from recoveries related to a cattle suppliers misappropriation of Company funds.

• Increase of $57 million in marketing, advertising and promotion expenses.

• Increase of $47 million in restructuring and related costs.

• Increase of $8 million in brand and product line discontinuations.

Goodwill Impairment in millions

Goodwill Impairment $ 343 $ —

• We recorded $781 million in goodwill impairment charges in fiscal 2023.

• We recorded a $343 million impairment charge in the Beef segment in fiscal 2025.

Interest (Income) Expense in millions

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Interest expense 449 481

• The increase in interest income for fiscal 2024 was primarily due to higher cash and cash equivalents held and increased interest rates.

• The increase in interest expense for fiscal 2024 was primarily due to interest expense related to our term loan facilities and the recently issued 5.40% 2029 Notes and 5.70% 2034 Notes.

• The decrease in interest income for fiscal 2025 was primarily due to average lower cash and cash equivalents held.

• The decrease in interest expense for fiscal 2025 was primarily due to lower interest expense related to the repayment of the term loan due May 2026 in fiscal 2025 and the repayment of the August 2024 senior notes in fiscal 2024, partially offset by increased interest expense from the issuance of 5.40% 2029 Notes and 5.70% 2034 Notes and decreased capitalized interest expense related to lower capital expenditures.

Other (Income) Expense, net in millions

$ (47) $ (75)

2025 – Included $64 million of joint venture earnings and $18 million of production facilities fire insurance proceeds, partially offset by $28 million of impairments of equity investments and $3 million of foreign exchange losses.

2024 – Included $34 million of production facilities fire insurance proceeds, $15 million gain on sale of an equity method investment, $15 million of joint venture earnings and $11 million of foreign exchange gains.

2023 – Included $22 million of production facilities fire insurance proceeds, $17 million of foreign exchange gains and $12 million of joint venture earnings.

Effective Tax Rate

The percentage impacts on the effective tax rate were greater in fiscal 2023 due to the level of pretax (loss) in fiscal 2023 compared to fiscal 2024.

Additionally, the impact of tax benefits decreased the effective tax rate on pretax income in fiscal 2024 and increased the effective tax rate in fiscal 2023 due to the pretax loss.

2024 – The effective tax rate is higher than the statutory rate due to state taxes and the impact of $63 million of non-deductible goodwill associated with the sale of our Vienna, Georgia facility.

2023 – The effective tax rate is lower than the statutory rate due to a $781 million non-deductible goodwill impairment, partially offset by income tax credits and a $26 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in fiscal 2023.

34.1 % 24.8 %

• The increase in effective tax rate for fiscal 2025 was primarily due to a non-deductible goodwill impairment in fiscal 2025.

Net Income (Loss) Attributable to Tyson in millions, except per share data

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2025 – Included the following items:

• $182 million pretax, or ($0.41) per diluted share, of charges related to plant closures and disposals.

• $174 million pretax, or ($0.38) per diluted share, related to the recognition of legal contingency accruals.

• $86 million pretax, or ($0.21) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

• $738 million pretax, or ($1.58) per diluted share, of legal contingency accruals.

• $343 million pretax, or ($0.96) per diluted share, related to a goodwill impairment (non-tax deductible).

• $45 million pretax, or ($0.11) per diluted share, of restructuring and related charges.

• $8 million pretax, or ($0.02) per diluted share, of brand discontinuation charges.

• $104 million pretax, or $0.23 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $41 million pretax, or ($0.09) per diluted share, related to a charge from a product recall.

• $28 million pretax, or ($0.08) per diluted share, related to impairment of equity investments.

• $23 million pretax, or ($0.05) per diluted share, related to brand and product line discontinuations.

• $17 million pretax, or ($0.04) per diluted share, of plant closure and disposal charges.

• $36 million pretax, or $0.12 per diluted share, of facility fire related insurance proceeds.

2024 – Included the following items:

• $757 million pretax, or ($2.13) per diluted share, of goodwill impairment charges (non-tax deductible) net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests.

• $322 million pretax, or ($0.67) per diluted share, of charges related to plant closures and disposals.

• $156 million pretax, or ($0.33) per diluted share, related to the recognition of legal contingency accruals.

• $182 million pretax, or ($0.41) per diluted share, of plant closure and disposal charges.

• $174 million pretax, or ($0.38) per diluted share, of legal contingency accruals.

• $18 million pretax, or ($0.02) per diluted share, of facility fire related insurance proceeds, net of costs.

• $31 million pretax, or ($0.06) per diluted share, of restructuring and related charges.

• $75 million pretax, or $0.16 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $26 million post tax, or $0.07 per diluted share, from remeasurement of net deferred tax liabilities at lower enacted state tax rates.

• $17 million pretax, or ($0.04) per diluted share, of product line discontinuation charges.

• $16 million pretax, or $0.03 per diluted share, related to the relocation of a production facility in China net of $3 million associated with Net Income (Loss) Attributable to Noncontrolling Interests.

• $8 million pretax, or ($0.02) per diluted share, related to brand and product line discontinuations.

SEGMENT RESULTS

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Beef, Pork, Chicken, and Prepared Foods.

Additional information regarding the geographic areas of our foreign operations is set forth in Part II, Item 8, Notes to Consolidated Financial Statements, Note 17:

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Total $ 54,441 $ 53,309 $ 52,881 $ 1,098 $ 1,409 $ (395)

(a) Beef segment results for fiscal 2024 included a $45 million legal contingency accrual and $41 million of costs related to plant closures and disposals.

Beef segment results for fiscal 2023 included a $333 million goodwill impairment, $42 million of insurance proceeds, net of costs incurred and $33 million of restructuring and related costs.

Beef segment results for fiscal 2022 included $27 million of insurance proceeds, net of costs incurred and $16 million of restructuring and related costs.

(b) Pork segment results for fiscal 2024 included $108 million of costs related to plant closures and disposals and $73 million of legal contingency accruals.

(c) Chicken segment results for fiscal 2024 included a $56 million legal contingency accrual, $33 million of costs related to plant closures and disposals and $70 million of insurance proceeds, net of costs incurred.

Chicken segment results for fiscal 2023 included $322 million of costs related to plant closures and disposals, a $210 million goodwill impairment, $156 million of legal contingency accruals, $16 million of restructuring and related costs and $11 million of insurance proceeds, net of costs incurred.

Chicken results for fiscal 2022 included $35 million of insurance proceeds, net of costs incurred.

(d) Prepared Foods segment results for fiscal 2024 included $24 million of restructuring and related costs.

Prepared Foods segment results for fiscal 2023 include $49 million of restructuring and related costs and $17 million of product line discontinuation charges.

Prepared Foods segment results for fiscal 2022 included $36 million of restructuring and related costs.

(e) International/Other results for fiscal 2024 included $86 million of costs, net of insurance proceeds, related to a fire at our production facility in the Netherlands and subsequent decision to sell.

International/Other results for fiscal 2023 included a $238 million goodwill impairment.

(a) Beef segment results for fiscal 2025 included $343 million of goodwill and intangible impairments, $318 million of legal contingency accruals and $48 million of restructuring and related charges.

Beef segment results for fiscal 2024 included a $45 million legal contingency accrual and $41 million of plant closure and disposal charges.

Beef segment results for fiscal 2023 included $333 million of goodwill and intangible impairments, $42 million of facility fire related insurance proceeds and $33 million of restructuring and related charges.

(b) Pork segment results for fiscal 2025 included $380 million of legal contingency accruals.

Pork segment results for fiscal 2024 included $108 million of plant closure and disposal charges and $73 million of legal contingency accruals.

(c) Chicken segment results for fiscal 2025 included $23 million related to brand and product line discontinuations, $23 million of plant closure and disposal charges and $9 million of restructuring and related charges.

Chicken segment results for fiscal 2024 included a $56 million legal contingency accrual, $33 million of plant closure and disposal charges and $70 million of facility fire related insurance proceeds.

Chicken segment results for fiscal 2023 included $322 million of plant closure and disposal charges, $210 million of goodwill and intangible impairments, $156 million of legal contingency accruals, $16 million of restructuring and related charges and $11 million of facility fire related insurance proceeds.

(d) Prepared Foods segment results for fiscal 2025 included $41 million of charges related to a product recall and a net benefit of $26 million related to restructuring and related charges, which included a gain from the sale of storage facilities net of other plan charges.

Prepared Foods segment results for fiscal 2024 included $24 million of restructuring and related charges.

Prepared Foods segment results for fiscal 2023 included $49 million of restructuring and related charges and $17 million of brand and product line discontinuations.

(e) International/Other results for fiscal 2025 included a $40 million legal contingency charge related to the 2015 sale of our Mexico operation, $18 million of facility fire related insurance proceeds and $14 million of restructuring and related charges.

International/Other results for fiscal 2024 included $86 million of facility fire related costs.

International/Other results for fiscal 2023 included a $238 million goodwill and intangible impairments.

Beef Segment Results in millions

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Operating Margin (5.2) % (1.9) % (0.5) %

• Sales Volume – Sales volume decreased as lower head harvested were offset by higher average carcass weights.

• Average Sales Price – Average sales price increased due to increased input costs and strong demand.

The change in average sales price for fiscal 2025 excludes a $318 million reduction of Sales from the recognition of legal contingency accruals.

• Operating Income (Loss) – Operating loss increased in fiscal 2025 due to compressed Beef margins, goodwill and intangible impairments, legal contingency accruals and increased restructuring and related charges, partially offset by improved operational execution and lapping the impacts of plant closure and disposal charges recorded in fiscal 2024.

• Sales Volume – Sales volume increased primarily due to higher average carcass weights.

• Average Sales Price – Average sales price increased due to increased input costs and increased demand.

• Operating Income (Loss) – Operating income decreased primarily due to compressed beef margins, the recognition of a legal contingency accrual and plant closures and disposal charges in fiscal 2024, and insurance proceeds in fiscal 2023 related to a fire at a production facility in 2019, partially offset by a goodwill impairment charge recorded in fiscal 2023.

• Sales Volume – Sales volume decreased due to lower availability of live cattle.

• Average Sales Price – Average sales price increased slightly due to price increases associated with reduced live cattle supply and increased input costs, partially offset by reduced export demand and softening demand.

• Operating Income (Loss) – Operating income decreased due to unfavorable market conditions, including higher fed cattle costs.

Additionally, operating income in fiscal 2023 was impacted by a goodwill impairment charge and benefited from increased insurance proceeds related to a fire at a production facility in fiscal 2019, partially offset by increased restructuring and related charges.

• Operating Income (Loss) – Operating income decreased primarily due to compressed beef margins, the recognition of legal contingency accruals and plant closure and disposal charges in fiscal 2024, and recognition of facility fire related insurance proceeds in fiscal 2023 related to a fire at a production facility in 2019, partially offset by goodwill and intangible impairments recorded in fiscal 2023.

Pork Segment Results in millions

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Operating Margin (3.4) % (0.7) % (2.4) %

• Sales Volume – Sales volume decreased due to production decreases associated with a plant closure in 2024 which were partially offset by production increases at other facilities and higher average carcass weights.

• Average Sales Price – Average sales price increased due to increased input costs and strong demand for our pork products.

The change in average sales price excludes a $380 million and $45 million reduction of Sales from the recognition of legal contingency accruals recorded in fiscal 2025 and 2024, respectively.

• Operating Income (Loss) – Operating loss increased due to compressed pork margins and the recognition of legal contingency accruals, partially offset by lower operating costs, improved results in our live hog operations and lapping the impacts of plant closure and disposal charges and restructuring and related charges recorded in fiscal 2024.

• Sales Volume – Sales volume increased due to improved market conditions and increased domestic availability of market-ready hogs.

• Average Sales Price – Average sales price decreased driven by lower pricing on drop credit items.

The change in average sales price excludes the impact of a $45 million reduction of Sales from the recognition of a legal contingency accrual in fiscal 2024.

• Operating Income (Loss) – Operating income increased primarily due to higher pork margins, improved results in our live hog operations and lapping the impacts of a production facility fire in the third quarter of fiscal 2023, partially offset by the recognition of legal contingency accruals and plant closures and disposal costs in fiscal 2024.

• Sales Volume – Sales volume decreased as a result of balancing our supply with customer demand.

• Average Sales Price – Average sales price decreased due to reduced global demand.

• Operating Income (Loss) – Operating income decreased due to compressed pork margins, increased operating costs as a result of the inflationary market environment, losses incurred in our live hog operations and impacts from a production facility fire in the third quarter of fiscal 2023.

The change in average sales price excludes the impact of a $45 million reduction of Sales from the recognition of legal contingency accruals in fiscal 2024.

• Operating Income (Loss) – Operating income increased primarily due to higher pork margins, improved results in our live hog operations and lapping the impacts of facility fire related costs in the third quarter of fiscal 2023, partially offset by the recognition of legal contingency accruals and plant closure and disposal costs in fiscal 2024.

Chicken Segment Results in millions

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Operating Margin 8.5 % 6.0 % (4.5) %

• Sales Volume – Sales volume increased primarily due to increased domestic production.

• Average Sales Price – Average sales price remained relatively flat as the impact of lower input costs was offset by strong demand.

• Operating Income (Loss) – Operating income increased primarily due to improved operational execution, improved volumes and $340 million of net decreases in feed ingredient costs which was partially offset by increased marketing, advertising and promotion expenses.

Operating income was also impacted by reduced legal contingency accruals partially offset by increased costs related to brand and product line discontinuations, restructuring and related charges and lapping of facility fire related insurance proceeds recognized in fiscal 2024 associated with a production facility fire in the fourth quarter of fiscal 2021.

• Sales Volume – Sales volume decreased primarily due to reduced domestic production.

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The change in average sales price excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals in fiscal 2023.

• Operating Income (Loss) – Operating income increased primarily due to improved operational efficiencies, a goodwill impairment charge recorded in fiscal 2023, lower plant closures and disposal charges, reduced legal contingency accruals, decreased freight costs and an increase in insurance proceeds, net of costs incurred associated with a production facility fire in the fourth quarter of fiscal 2021.

• Operating Income (Loss) – Operating income increased primarily due to improved operational efficiencies, goodwill and intangible impairments recorded in fiscal 2023, lower plant closure and disposal charges, reduced legal contingency accruals, decreased freight costs and an increase in facility fire related insurance proceeds, net of costs associated with a production facility fire in the fourth quarter of fiscal 2021.

Additionally, we experienced $895 million of lower feed ingredient costs in fiscal 2024 which was partially offset by associated decreases in average sales price.

• Sales Volume – Sales volume increased primarily due to improved domestic production and the sell-through of inventory, partially offset by strategic initiative mix impacts.

• Average Sales Price – Average sales price decreased due to the challenging market conditions.

The change in average sales price for the fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals.

• Operating Income (Loss) – Operating income decreased primarily due to the impacts of inflationary market conditions as well as operational impacts associated with strategic decisions in the first half of fiscal 2023.

Operating income in fiscal 2023 was impacted by $300 million of higher feed ingredient costs and $80 million of net derivative losses as compared to $195 million of net derivative gains in fiscal 2022.

Operating income in fiscal 2023 was impacted by plant closures and disposal charges, goodwill impairment charges, legal contingency accruals and restructuring and related charges, offset by insurance proceeds, net of costs incurred associated with a production facility fire in fiscal 2021.

Prepared Foods Segment Results in millions

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Operating Margin 9.0 % 8.9 % 8.4 %

• Sales Volume – Sales volume decreased due to a challenging consumer environment and the impact from a product recall.

• Average Sales Price – Average sales price increased primarily due to the pass through of increased raw material costs.

• Operating Income – Operating income increased primarily due to higher average sales price, improved operational execution and lower selling, general and administrative costs, partially offset by increased raw material costs and charges related to a product recall.

Additionally, fiscal 2025 benefited from net gains recognized from restructuring and related charges, which included a gain from the sale of storage facilities.

• Sales Volume – Sales volume increased primarily due to the acquisition of Williams Sausage Company in the third quarter of 2023.

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• Operating Income – Operating income increased primarily due to lower raw materials costs, freight costs, marketing, advertising and promotion expenses and restructuring and related charges.

• Sales Volume – Sales volume increased slightly as increased retail volumes were partially offset by a reduction in foodservice volumes.

• Average Sales Price – Average sales price increased due to the effects of revenue management in an inflationary cost environment and favorable product mix.

• Operating Income – Operating income increased in fiscal 2023 primarily due to higher average sales prices and a $45 million reduction in raw material costs, partially offset by increased marketing, advertising and promotion spend.

Operating income in fiscal 2023 was impacted by $17 million of product line discontinuation charges and $49 million of restructuring and related charges.

International/Other Results in millions

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Operating Income (Loss) 107 (37) 144 (218) 181

• Sales – Sales decreased due to lower average sales price.

• Operating Income (Loss) – Operating income increased primarily due to improved performance, insurance proceeds and lapping the charges related to a production facility fire in the first quarter of fiscal 2024, partially offset by the recognition of a legal accrual related to the 2015 sale of our Mexico operation.

• Sales – Sales decreased due to lower average sales price and the impact of the production facility fire in the Netherlands partially offset by increased volumes in the other regions.

• Operating Income (Loss) – Operating income increased primarily due to a goodwill impairment charge recorded in fiscal 2023, partially offset by the impacts of a production facility fire in the first quarter of fiscal 2024 and the subsequent decision to sell the facility.

• Sales – Sales increased due to volume growth and pricing actions to offset the high inflationary cost environment, which was partially offset by foreign exchange rate movements.

• Operating Income (Loss) – Operating income (loss) decreased due to a $238 million goodwill impairment.

LIQUIDITY AND CAPITAL RESOURCES

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Cash Flows from Operating Activities in millions

Net income (loss) $ 822 $ (649)

Non-cash items in net income (loss) 1,544 2,214

Net income $ 507 $ 822

Non-cash items in net income 1,754 1,544

Net changes in operating assets and liabilities:

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Increase (decrease) in accounts payable 184 (205)

Increase (decrease) in income taxes payable/receivable 89 108

Increase in income taxes payable/receivable 7 89

Net changes in other operating assets and liabilities 273 128

Net cash provided by operating activities $ 2,155 $ 2,590

• Non-cash items in net income (loss) primarily included depreciation and amortization of $1,400 million and $1,339 million in fiscal 2024 and fiscal 2023, respectively, and a $781 million goodwill impairment in fiscal 2023.

• Cash provided by operating activities for fiscal 2024 was $2.6 billion, an increase of $838 million compared to fiscal 2023, due to $801 million of higher earnings, net of non-cash items, and a $37 million increase in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• An increase of $407 million due to an increase of $128 million in the net changes in other operating assets and liabilities in fiscal 2024, compared to a decrease of $279 million in fiscal 2023, primarily driven by an increase in performance-based compensation.

• Non-cash items in net income primarily included depreciation and amortization of $1,361 million and $1,400 million in fiscal 2025 and fiscal 2024, respectively, and a $343 million goodwill impairment in fiscal 2025.

• Cash provided by operating activities for fiscal 2025 was $2.2 billion, a decrease of $435 million compared to fiscal 2024, due to $105 million of lower earnings, net of non-cash items, and a $330 million decrease in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• A decrease of $602 million due to an increase in inventory of $449 million in fiscal 2025, compared to a decrease of $153 million in fiscal 2024, primarily due to increased average cost of inventory and higher volume of livestock.

• A decrease of $180 million due to an increase in accounts receivable of $121 million in fiscal 2025, compared to a decrease of $59 million in fiscal 2024 as days sales outstanding increased more during fiscal 2025 than fiscal 2024 driven largely by increased average sales prices.

• Partially offset by:

• A decrease of $252 million due to a decrease in accounts payable of $205 million during fiscal 2024, compared to an increase of $47 million in fiscal 2023, primarily due to lower input costs and decrease in days payables outstanding.

• A decrease of $77 million due to a decrease in accounts receivable of $59 million of fiscal 2024, compared to a decrease of $136 million in fiscal 2023.

The reduced decline in accounts receivable was primarily due to the decreased level of sales in the last few weeks of each year end partially offset by a net decrease in days sales outstanding.

• An increase of $389 million due to an increase in accounts payable of $184 million during fiscal 2025, compared to a decrease of $205 million in fiscal 2024, primarily due to higher input costs and increase in days payables outstanding.

• An increase of $145 million due to an increase of $273 million in the net changes in other operating assets and liabilities in fiscal 2025, compared to an increase of $128 million in fiscal 2024, primarily driven by an increase in legal accruals net of payments offset by an increase in fiscal 2024 performance-based compensation.

Cash Flows from Investing Activities in millions

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Proceeds from sale of business — 174

Acquisitions, net of cash acquired — (262)

Proceeds from sale of storage facilities 252 —

Acquisition of equity investments (11) (29)

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Net cash used for investing activities $ (665) $ (888)

• Additions to property, plant and equipment included spending for production growth, safety and animal well-being, new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities.

• Additions to property, plant and equipment included spending for production growth, safety, animal well-being, new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities.

• Approximately $520 million will be necessary to complete buildings and equipment under construction at September 27, 2025.

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• Proceeds from sale of business related to the sale of our Vienna, Georgia facility in fiscal 2024.

• Acquisitions, net of cash acquired for fiscal 2023 included $223 million, net of cash acquired, for our acquisition of Williams Sausage Company and $39 million for the 60% equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products.

• Acquisition of equity investments for fiscal 2023 primarily included:

the purchase of minority interest in a global insect-based ingredients company;

the purchase of a minority interest in a fully integrated poultry company in the Middle East that produces broiler chickens and operates hatcheries and feed mills;

and deferred payments related to prior year equity method investment.

• Proceeds from sale of storage facilities related to the sale of multiple Tyson-owned and operated cold storage facilities in fiscal 2025.

• Other, net for fiscal 2025 primarily included insurance proceeds related to fires at our production facilities and proceeds from disposition of assets.

Other, net for fiscal 2024 primarily included proceeds from disposition of corporate assets, proceeds on the sale of an equity method investment and insurance proceeds related to fires at our production facilities.

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Other, net (18) (45)

Net cash provided by (used for) financing activities $ (581) $ 88

Net cash used for financing activities $ (1,977) $ (581)

• During fiscal 2024, proceeds from issuance of debt included $750 million of proceeds from the term loan facility due May 2028, $600 million of proceeds from the 5.40% 2029 Notes, and $900 million from the 5.70% 2034 Notes.

During fiscal 2023, proceeds from issuance of debt included $1 billion of proceeds from the issuance of a term loan facility due May 2026.

• Payments on debt included:

• 2025 – In fiscal 2025, we fully repaid the $750 million term loan due May 2026 and $310 million of the term loan due May 2028 using cash on hand.

• 2024 – In March 2024, we issued senior unsecured notes with an aggregate principal amount of $1.5 billion.

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 $1,250 million notes due August 2024.

• 2023 – In September 2023, we extinguished the $400 million outstanding balance of our senior notes due September 2023.

• Purchases of Tyson Class A common stock included:

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Short-term investments —

Revolving credit facility September 2026 $ 2,250 $ — $ — 2,250

Revolving credit facility April 2030 $ 2,500 $ — $ — 2,500

Commercial paper —

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We had no borrowings under the revolving credit facility during fiscal 2025.

Under the terms of the facility, we have the option to establish incremental commitment increases of up to $500 million if certain conditions are met.

• We expect net interest expense will approximate $380 million for fiscal 2025.

• In April 2025, we terminated our previous revolving credit facility with a maturity date of September 2026 and entered into a new $2.5 billion revolving credit facility.

The new revolving credit facility will mature, and the commitments thereunder will terminate, in April 2030 with options for two one-year extensions.

Under the terms of this revolving credit facility, we have the option to establish incremental commitment increases of up to an aggregate amount of $500 million if certain conditions are met.

The covenants and other terms of the new facility are generally consistent with those of the terminated facility.

• We expect net interest expense will approximate $395 million for the 53 weeks of fiscal 2026.

• Our ratio of short-term assets to short-term liabilities (“current ratio”) was 1.6 to 1 and 2.0 to 1 at September 27, 2025, and September 28, 2024, respectively.

The increase in fiscal 2024 was primarily due to increased cash and cash equivalents and decreased current debt.

The decrease in fiscal 2025 was primarily due to lower cash and cash equivalents and increased current debt.

• At September 27, 2025, $725 million of our cash was held in the international accounts of our foreign subsidiaries.

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Our commercial paper program provides a low-cost source of borrowing to fund general corporate purposes including working capital requirements.

The maximum borrowing capacity under the commercial paper program is $1.5 billion.

The maximum borrowing capacity under the commercial paper program is $1.75 billion, which increased in April 2025 in conjunction with the execution of the new revolving credit facility.

The maturities of the notes may vary, but may not exceed 397 days from the date of issuance.

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Refer to Other Key Financial Measures below for an explanation and reconciliation to comparable Generally Accepted Accounting Principles (“GAAP”) measures.

The decrease in this ratio at September 28, 2024 is due to an increase in EBITDA of $1,896 million and decrease in net debt of $858 million.

The increase in this ratio at September 27, 2025 is due to a decrease in EBITDA of $377 million partially offset by a decrease in net debt of $459 million.

Credit Ratings

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Revolving Credit Facility

S&P's applicable rating is “BBB.” Moody's applicable rating is “Baa2.” The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate”) and letter of credit fees and borrowings (“All-in Borrowing Spread”) that corresponds to the applicable ratings levels from S&P and Moody's.

Ratings Level (Moody's/S&P) Facility Fee Rate All-in Borrowing Spread

The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate”) and letter of credit fees and borrowings (“Borrowing Spread”) that corresponds to the applicable ratings levels from S&P and Moody's.

S&P's applicable rating is “BBB.” Moody's applicable rating is “Baa2.”

Ratings Level (Moody's/S&P) Facility Fee Rate Borrowing Spread

A3/A- or above 0.090 % 0.785 %

A3/A- 0.090 % 1.000 %

Baal/BBB+ 0.100 % 0.900 %

Baa2/BBB (current level) 0.110 % 1.015 %

Baa3/BBB or lower 0.175 % 1.375 %

Baa3/BBB- 0.150 % 1.100 %

Ba1/BB+ or lower 0.200 % 1.175 %

In the event the ratings fall within different levels, the applicable rate will be based upon the higher of the two Levels or, if there is more than a one-notch split between the two Levels, then the Applicable Rate will be based upon the Level that is one Level below the higher Level.

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For certain grain purchase commitments with a fixed quantity provision, we have assumed the future obligations under the commitment based on available commodity futures prices as published in observable active markets as of September 27, 2025.

Additionally, the purchase obligations amount includes purchase commitments associated with long-term cold storage service agreements entered into as part of the sale of multiple Tyson-owned and operated storage facilities during fiscal 2025.

We have excluded future purchase commitments for contracts that do not meet these criteria.

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Pensions and Other Postretirement Benefits.

In addition to the amounts shown above in the table, we have unrecognized tax benefits of $137 million and related interest and penalties of $59 million at September 28, 2024, recorded in Other long-term liabilities.

The potential maximum contractual obligation associated with our cash flow assistance programs at September 28, 2024, based on the estimated fair values of the livestock supplier’s net tangible assets on that date, aggregated to approximately $280 million.

After analyzing residual credit risks and general market conditions, we have recorded a $14 million allowance for these programs' estimated credit losses at September 28, 2024.

In addition to the amounts shown above in the table, we have unrecognized tax benefits of $153 million and related interest and penalties of $73 million at September 27, 2025, recorded in Other Liabilities and Other current liabilities.

Our maximum commitment associated with our cash flow assistance programs is limited to the fair value of each participating livestock supplier's net tangible assets.

The potential maximum obligation as of September 27, 2025 was approximately $240 million and we did not have significant net receivables outstanding under these programs.

OTHER KEY FINANCIAL MEASURES

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As set forth in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 20:

Commitments and Contingencies, we recognized $174 million and $156 million of charges in fiscal 2024 and 2023, respectively, from legal accruals related to our broiler antitrust civil litigation, broiler chicken grower litigation, pork antitrust litigation and wage rate litigation based on our assessment of the likelihood and amount of probable losses.

Commitments and Contingencies, we recognized $698 million and $174 million of charges in fiscal 2025 and 2024, respectively, from legal accruals related to our broiler antitrust civil litigation, broiler chicken grower litigation, pork antitrust litigation, beef antitrust litigation and wage rate litigation based on our assessment of the likelihood and amount of probable losses.

We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our contingent liabilities.

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The projected benefit obligation was $176 million at the end of fiscal 2025.

Unrecognized actuarial loss was $3 million at the end of fiscal 2024.

Unrecognized actuarial gain was $2 million at the end of fiscal 2025.

We currently expect net periodic benefit cost associated with our pension plans to be approximately $7 million in fiscal 2026.

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Impairment of goodwill and indefinite life intangible assets

Goodwill and indefinite life intangible assets are evaluated for impairment annually or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or indefinite life intangible asset is less than its carrying amount.

We have elected to make the first day of the fourth quarter the annual impairment assessment date for goodwill and indefinite life intangible assets.

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We evaluate goodwill 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 more likely than not be less than its carrying amount or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required.

The quantitative test compares the fair value of a reporting unit with its carrying amount.

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

The quantitative test compares the fair value of a reporting unit with its carrying value.

Additionally, we can elect to forgo the qualitative assessment and perform the quantitative test.

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Generally, we utilize operating margin assumptions based on future expectations, macro-economic trends, operating margins historically realized in the reporting units’ industries and industry marketplace valuation multiples.

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

Our fiscal 2024 and fiscal 2022 goodwill impairment analyses did not result in impairment charges.

During fiscal 2023, we experienced lower than previously anticipated operating results and changing market fundamentals, as well as a drop in our market capitalization to below book value and an increase in long-term treasury rates which caused a net 50 basis point increase in the discount rates used in estimating the fair value of the reporting units.

Based on quantitative assessments, we recognized $781 million of goodwill impairment charges including $333 million to partially impair the goodwill of the Beef reporting unit, $238 million to fully impair the goodwill of two of our International/Other reporting units and $210 million to partially impair the goodwill of a Chicken segment reporting unit.

Following the fiscal 2023 assessments, our Beef, Pork and two Chicken segment reporting units, with total goodwill of approximately $3.8 billion, were at heightened risk of impairment.

We performed our annual impairment assessment as of the first day of our fourth quarter of fiscal 2024 and determined it was necessary to perform quantitative assessments for our Beef, Pork, and two Chicken segment reporting units, as all of these reporting units were at heightened risk of impairment following the fiscal 2023 assessments.

In addition, due to lower than previously anticipated operating results and increased interest rates, we determined it was necessary to perform a quantitative assessment for one of our International/Other reporting units, which had goodwill of $0.2 billion at September 28, 2024.

Based on our assessments, we determined that all of these reporting units’ estimated fair values exceeded their carrying values, and thus, did not result in any additional goodwill impairments.

Following the annual fiscal 2024 assessment, our Beef and two Chicken segment reporting units, with total goodwill of approximately $3.3 billion, were at heightened risk of impairment.

Our Beef segment reporting unit had goodwill of $0.3 billion at September 28, 2024.

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

During fiscal 2023, we experienced lower than anticipated operating results and changing market fundamentals, as well as a drop in our market capitalization to below book value and an increase in long-term treasury rates which caused a net 50 basis point increase in the discount rates used in estimating the fair value of the reporting units.

Based on quantitative assessments in fiscal 2023, we recognized $781 million of goodwill impairment charges including $333 million to partially impair the goodwill of the Beef reporting unit, $238 million to fully impair the goodwill of two of our International/Other reporting units and $210 million to partially impair the goodwill of a Chicken segment reporting unit.

Our fiscal 2024 goodwill impairment analysis did not result in impairment charges.

Following the annual fiscal 2024 assessment, our Beef and two Chicken segment reporting units, with a total goodwill of approximately $3.3 billion in fiscal 2024, were at heightened risk of impairment.

During the third quarter of fiscal 2025, our Beef reporting unit experienced lower than anticipated supply of market-ready cattle and an increased carrying value primarily associated with higher cattle costs.

Additionally, our forecasts indicated the timing of the recovery of market-ready cattle associated with the anticipated cattle herd rebuilding would be longer than previously estimated.

Consequently, we determined the fair value of our Beef reporting unit was more likely than not less than the carrying amount and proceeded to perform a quantitative assessment.

Based on this quantitative assessment, we determined the fair value of our Beef reporting unit had decreased to below its carrying value.

Accordingly, we recognized a $343 million impairment during the third quarter of fiscal 2025 to fully impair its remaining goodwill.

We performed our annual impairment assessment as of the first day of our fourth quarter of fiscal 2025 and determined it was necessary to perform a quantitative assessment for one of our International/Other reporting units, which had goodwill of $0.2 billion at September 27, 2025, as it had lower than previously anticipated operating results.

Based on this assessment, we determined that the International/Other reporting unit's estimated fair value exceeded its carrying value, and thus, did not recognize a goodwill impairment.

In estimating its fair value, we generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.

The current year results are not indicative of future market participant expectations in an exit transaction primarily due to challenging market conditions associated with lower cattle supplies which impacts we expect to be mostly temporary in nature.

An increase of approximately 25-50 basis points in the discount rate or reduced estimated long-term operating margins to below 2.0%-3.0% (breakeven), with all other assumptions unchanged, would have caused the carrying value of this reporting unit to exceed its fair value, which may have resulted in an additional material goodwill impairment loss.

Our Chicken segment reporting units had goodwill of $3.0 billion at September 28, 2024.

We generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.

To pass the impairment quantitative test, projected long-term operating margins, utilizing the discounted cash flow method, had to average approximately 4.0%-5.0% (breakeven).

Operating margins for fiscal 2024 exceeded the breakeven amounts.

Additionally, a hypothetical increase in the discount rate of approximately 75-125 basis points at September 28, 2024, with all other assumptions unchanged, would have caused the carrying values of the Chicken segment's reporting units to approximate its fair value, which may have resulted in a material goodwill impairment loss.

Our remaining reporting units, Prepared Foods, Pork and International/Other, had goodwill of $6.5 billion at September 28, 2024, and were not considered at heightened risk of impairment following the fiscal 2024 annual assessment.

A hypothetical increase in the discount rate of approximately 125-150 basis points as of the date of its most recent estimated fair value determination, which was in the third quarter of fiscal 2023, with all other assumptions unchanged, would have caused the carrying value of the Prepared Foods reporting unit, with goodwill of $5.9 billion at September 28, 2024, to approximate its fair value.

Discount rates utilized in the discounted cash flow method would have remained unchanged from the third quarter of fiscal 2023 assessment to our annual fiscal 2024 assessment date.

The current year results are not indicative of future market participant expectations in an exit transaction primarily due to the impact of macroeconomic factors which we expect to be mostly temporary in nature.

As of the date of the assessment, we estimate discount rates utilized in the discounted cash flow method would have to increase by more than approximately 125 basis points, with all other assumptions unchanged, before the carrying value of the International/Other reporting units would exceed their fair value.

Following the annual fiscal 2025 assessment, this reporting unit was at heightened risk of impairment.

We performed a qualitative assessment for the remaining reporting units in our Chicken, Prepared Foods and Pork segments, which had goodwill of $9.3 billion at September 27, 2025, and determined none of them were at heightened risk of impairment following the fiscal 2025 annual assessment.

As of the latest fair value assessments, we estimate discount rates utilized in the discounted cash flow method would have to increase by more than approximately 75 basis points, with all other assumptions unchanged, before the carrying value of any of the Chicken, Prepared Foods and Pork reporting units would exceed their fair value.

The fair value of our indefinite life intangible assets is calculated principally using multi-period excess earnings and relief-from-royalty valuation approaches, which uses significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy, and is believed to reflect market participant views which would exist in an exit transaction.

Under these valuation approaches, we are required to make estimates and assumptions about sales growth, operating margins, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data.

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

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

Our fiscal 2025, 2024 and 2023 indefinite life intangible assets impairment analyses did not result in an impairment charge.

All of our indefinite life intangible assets' estimated fair values exceeded their carrying values by more than 20% at the date of the most recent estimated fair value determination, which was in the annual assessment as of the beginning of the fourth quarter of fiscal 2024, other than one of our Prepared Foods brands with a carrying value of $0.5 billion at September 28, 2024.

A hypothetical increase in the discount rate of approximately 75-125 basis points as of the date of the most recent estimated fair value, with all other assumptions unchanged, would have caused the carrying value to approximate its fair value.

We generally assumed operating margins and growth rates in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.

Operating margins for fiscal 2024 exceeded the breakeven.

All of our indefinite life intangible assets' estimated fair values exceeded their carrying values by more than 20% at the date of the most recent estimated fair value determination.

We performed our annual impairment assessment as of the first day of our fourth quarter of fiscal 2025 and determined it was necessary to perform quantitative assessments for two of our Prepared Foods brands with carrying values of $0.5 billion and $0.3 billion at September 27, 2025.

For these two brands, we estimate the discount rate would need to increase over 150 basis points as of the date of the most recent estimated fair value, with all other assumptions unchanged, to cause the carrying value to approximate its fair value.

We generally assumed growth rates in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.

Had we assumed future growth rates consistent with those realized in fiscal 2025, we would have failed the impairment quantitative test, which may have resulted in material impairment losses.

The current year growth rate is not indicative of future market participant expectations in an exit transaction primarily due to the impacts of rapid inflationary pressures and volatile market conditions which impacts we expect to be mostly temporary in nature.

We do not currently consider any of our other indefinite life intangible assets, which had aggregate carrying value of $3.6 billion at September 28, 2024, to be at heightened risk of impairment.

We do not currently consider any of our indefinite life intangible assets, which had an aggregate value of $4.1 billion at September 27, 2025, to be at heightened risk of impairment.

Effect if Actual Results Differ From Assumptions

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Our impairment analysis contains inherent estimates and assumptions, many of which are outside the control of management including interest rates, cost of capital, tax rates, market EBITDA comparables and credit ratings, which could positively or negatively impact the anticipated future economic and operating conditions.

The assumptions and estimates used in determining fair value require considerable judgement and are sensitive to changes in underlying assumptions.

The assumptions and estimates used in determining fair value require considerable judgment and are sensitive to changes in underlying assumptions.

These assumptions can change in future periods as a result of overall economic conditions, including the impacts of inflationary pressures, increased interest and discount rates, global supply chain constraints and decreased market capitalization, amongst others.

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We continuously evaluate the changing macro-economic conditions including inflationary pressures, rising interest rates, demand outlook and export markets, and the Company's market capitalization.

Our reporting units with heightened risk of future impairments with $3.3 billion carrying value at September 28, 2024, as well as the brand with $0.5 billion carrying value, as described above, all had less than 20% of excess fair value above carrying value as of the date of the most recent estimated fair value determination with our Beef reporting unit having less than 10% excess fair value above carrying value.

Consequently, their estimated fair values, especially our Beef reporting unit, remain highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins.

Discount rates decreased by approximately 50 basis points from the date of our annual impairment assessment to September 28, 2024.

Although the remaining reporting units and indefinite life intangible assets had more than 20% excess fair value over carrying amount as of the date of the most recent estimated fair value determination, they are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

Although all our reporting units and indefinite life intangible assets had more than 20% excess fair value over carrying value as of the most recent assessment, other than one reporting unit with goodwill of $0.2 billion as of September 27, 2025, they remain susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

Impairment of long-lived assets and definite life intangibles

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The impairment is the excess of the carrying value over the fair value of the asset.

We recorded charges related to long-lived assets of $131 million, $101 million and $34 million, in fiscal 2024, 2023 and 2022, respectively.

We recorded charges related to impairments, disposals and write-offs of long-lived assets of $126 million, $131 million and $101 million, in fiscal 2025, 2024 and 2023, respectively.

Judgments and Uncertainties

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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-K

Item 7. Management’s Discussion and Analysis