Tyson Foods (TSN) 10-K risk factor changes: FY2021 vs FY2020

The COVID-19 pandemic has negatively [removed: affected, and is expected to continue to negatively affect,] [added: affected] many parts of our business and [removed: operations and has had and continues to have a negative impact on economic activity globally.][added: operations.]

We have experienced, and may experience in the future, slowdowns and temporary idling of certain of our production facilities due to a number of [added: COVID-19 related] factors, including implementing additional safety measures, testing of our team members, team member absenteeism, and governmental orders.

During fiscal [removed: 2020,] [added: 2021,] we experienced slowdowns [removed: and temporary idling of] [added: at our] production facilities.

[removed: While the] [added: The] idling and slowdowns impacted our results of [removed: operations,] [added: operations for fiscal 2021, and] additional or prolonged idling of facilities or an extended period of operating at a reduced capacity or more significant reductions in our operations at our facilities could have a material adverse impact on our ability to operate our business and on our results of operations.

We have experienced, and expect to continue to experience, an increase in operating costs in connection with higher costs associated with ensuring the continued health and safety of team members including [removed: by checking team members’ temperatures,] [added: regular temperature checks,] providing additional personal protective [removed: equipment,] [added: equipment and] deep cleaning [removed: facilities, and encouraging sick team members to stay home by providing enhanced team member benefits.][added: facilities.]

During fiscal [removed: 2020,] [added: 2021,] we incurred direct incremental expenses related to COVID-19 totaling approximately [removed: $540] [added: $335] million, which primarily included team member costs associated with worker [removed: availability and production facility downtime,] [added: health] and [added: availability, including] direct costs for personal [removed: protective] [added: protection] equipment, production facility sanitization, COVID-19 [removed: testing,] [added: testing and vaccinations,] donations, product downgrades, rendered [removed: product,] [added: product and certain] professional [removed: fees] [added: fees, partially offset by The Coronavirus Aid, Relief] and [removed: thank you bonuses to frontline team members.][added: Economic Security Act (the “CARES Act”) credits.]

There can be no assurance that the health and safety measures we have taken (which include adding temperature and symptom screening stations for employees prior to entering our [removed: facilities and] [added: facilities,] increasing physical distancing of our [removed: employees)] [added: employees and requiring the vaccination of team members)] will eradicate the risks associated with working in a critical infrastructure industry, including but not limited to, infection of our employees or the temporary closure of a [removed: facility, which could, in turn, have an adverse impact on our reputation, business, results of operations and financial condition.][added: facility.]

We have also experienced, and expect to continue to experience, disruption and volatility in our supply chain, which has resulted, and may continue to result, in increased costs for certain raw [removed: materials.][added: materials, packaging materials and transportation costs.]

The spread of COVID-19 has also disrupted and may continue to disrupt logistics necessary to import, [removed: export,] [added: export] and deliver products to us and our customers.

Ports and other channels of entry have been closed or [removed: were] operating at only a portion of [removed: capacity, as workers have been prohibited or otherwise unable to report to work,] [added: capacity] and means of transporting products within regions or countries may be limited for the same reason.

Other supply chain risks associated with the COVID-19 pandemic include but are not limited to shutdowns or reduced operations at our suppliers’ facilities, the continued inability of some of our contract producers to manage their livestock, supply chain disruptions for feed grains, changes in consumer orders due to shifting consumer patterns, changes in livestock and protein market prices, and additional disruptions in logistics or the distribution chain for our [removed: products.][added: products ,the occurrence of any of which may result in a reduction in our fill rates to our customers.]

Governmental authorities at the federal, state and local levels may increase or impose new or stricter social distancing directives, stay-at-home restrictions, travel bans, quarantines, workforce and workplace restrictions or other measures related to [removed: COVID-19.][added: COVID-19 variants and resurgences, including any variants such as the Delta variant.]

[removed: | • |] [added: -] additional increase in input cost may not be adequately captured through pricing; [removed: |]

[removed: | • |] [added: -] an increase in consumer demand in our retail channel, such as grocery stores, club [removed: stores,] [added: stores] and value stores, which has and may continue to strain our supply chain; [removed: |]

[removed: | • |] [added: -] an increase in working capital needs and/or an increase in trade accounts receivable write-offs (and associated reserves) as a result of increased financial pressures on our suppliers or customers who are not able to pay in a timely manner or at all; [removed: |]

[removed: | • |] [added: -] adverse changes to the global economy may subject us to risk of material intangible and long-lived asset impairments, adjustments for inventory and market volatility for items subject to fair value measurements such as derivatives and investments; [removed: |]

[removed: | • |] [added: -] an inability to effectively implement our marketing and advertising activities to reflect changing consumer shopping habits due to, among other things, reduced in-person shopping and travel restrictions; [removed: |]

[removed: | • |] [added: -] a shift in consumer spending as a result of an economic downturn, which could result in consumers moving to private label or lower price products; [removed: |][added: and]

[removed: The integration] [added: The implementation] of [removed: recent acquisitions] [added: the financial excellence programs] may be more difficult, [removed: costly] [added: costly,] or time consuming than expected, and the [removed: acquisitions] [added: financial excellence programs] may not result in any or all of the anticipated [removed: benefits, including cost synergies.][added: benefits.]

The success of [removed: recent acquisitions,] [added: the financial excellence programs, or future financial excellence programs,] including the realization of the anticipated benefits, will depend in part on our ability to successfully [removed: integrate] [added: implement] the [removed: businesses] [added: programs] in an efficient and effective manner.

We may not realize any or all of the anticipated benefits of our financial [removed: fitness program,] [added: excellence programs,] which may prove to be more difficult, costly, or time consuming than expected.

If we are unable to implement the financial [removed: fitness] [added: excellence] programs smoothly or successfully, or we otherwise do not capture the anticipated savings, our business, results of operations and financial condition for future periods could be negatively impacted.

The financial [removed: fitness] [added: excellence] programs may become a distraction for our organization and may disrupt our ongoing business operations; cause deterioration in team member morale; disrupt or weaken the internal control structures of the affected business operations; and result in negative publicity which could affect our corporate reputation.

If we are unable to successfully manage the negative consequences of the financial [removed: fitness] [added: excellence] programs, our business, results of operations and financial condition for future periods could be adversely affected.

In fiscal [removed: 2020,] [added: 2021,] we sold products to customers in approximately [removed: 145] [added: 140] countries.

Our sales to customers in foreign countries for fiscal [removed: 2020] [added: 2021] totaled [removed: $6.0] [added: $7.0] billion of which [removed: $4.0] [added: $4.9] billion related to export sales from the United States.

In addition, we had approximately [removed: $1,287] [added: $1,369] million of long-lived assets located in foreign locations, primarily Brazil, China, the European [removed: Union and] [added: Union,] New [removed: Zealand,] [added: Zealand and Thailand,] at the end of fiscal [removed: 2020.][added: 2021.]

[removed: | • |] [added: - the ongoing impact of COVID-19, including any resurgence and variants such as the Delta variant, on the global economy and on consumer demand worldwide;] imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the importation of beef, pork, [removed: poultry,] [added: poultry] and prepared foods products, in addition to import or export licensing requirements imposed by various foreign countries; [removed: |]

[removed: | • |] [added: -] closing of borders by foreign countries to the import of beef, [removed: pork,] [added: pork] and poultry products due to animal disease or other perceived health or safety issues; [removed: |]

[removed: | • |] [added: -] impact of currency exchange rate fluctuations between the United States dollar and foreign currencies, particularly the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Japanese yen, the Thai baht, the Malaysian ringgit and the Mexican peso; [removed: |]

[removed: | • |] [added: -] political and economic conditions; [removed: |]

[removed: | • |] [added: -] difficulties and costs to comply with, and enforcement of remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including, without limitation, the United States Foreign Corrupt Practices Act and economic and trade sanctions enforced by the United States Department of the Treasury’s Office of Foreign Assets Control; [removed: |]

[removed: | • |] [added: -] different regulatory structures and unexpected changes in regulatory environments; [removed: |]

[removed: | • |] [added: -] tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and incremental taxes upon repatriation; [removed: |]

[removed: | • |] [added: -] potentially negative consequences from changes in tax laws; and [removed: |]

[removed: | • |] [added: -] distribution costs, disruptions in shipping or reduced availability of freight transportation. [removed: |]

[removed: We are increasingly dependent on information technology, and our] [added: Our] business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyber-attacks, other cyber incidents or security breaches or if our information technology systems are otherwise disrupted.

Information technology is an important part of our business operations and we [removed: increasingly] rely on information technology systems to manage business data and increase efficiencies in our production and distribution facilities and inventory management processes.

Like other companies, our information technology systems may be vulnerable to a variety of disruptions, including but not limited to the process of upgrading or replacing software, databases or components thereof, [added: user errors,] natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyber-attacks, hackers, unauthorized access attempts and other security issues.

In addition, [removed: if] we [removed: are unable to prevent security breaches, we] may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our business partners, customers, consumers or suppliers.

The extent that the COVID-19 pandemic continues to impact general economic conditions and our business, operations and results of operations will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak and additional variants, its severity, the actions to contain the virus or treat its impact, including the distribution and efficacy of vaccines and the speed of critical mass adoption of available vaccines, and how quickly and to what extent normal economic and operating conditions can resume.

Further, there can be no assurance that we will not incur additional direct incremental expenses related to COVID-19 going forward, and that such amounts will not be material or have a material impact on our business, cash flows or results of operations.

As a result of the COVID-19 pandemic, each of our segments experienced a shift in demand from foodservice to retail during 2020.

While each of our segments has subsequently experienced varying levels of foodservice recovery and the return of volumes during fiscal 2021, the long-term impact of COVID-19 remains uncertain and will depend on a number of future developments which are uncertain and cannot be predicted at this time.

- litigation.

Beginning in fiscal 2022, we are launching a new productivity program, which is designed to drive a better, faster and more agile organization that is supported by a culture of continuous improvement and faster decision making.

In addition, such incidents could result in unauthorized or accidental disclosure of material confidential information or regulated individual personal data.

Although we have in the past experienced, and may in the future face, cyber attacks, other cyber incidents or security breaches, we have not experienced anything significant in the current year.

Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.

We have recently experienced increased labor shortages at some of our production facilities and other locations.

While we have historically experienced some level of ordinary course turnover of employees, the COVID-19 pandemic and resulting actions and impacts have exacerbated labor shortages and increased turnover.

A number of factors have had and may continue to have adverse effects on the labor force available to us, including reduced employment pools, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices and immigration.

Labor shortages and increased turnover rates within our team members have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees and could negatively affect our ability to efficiently operate our production facilities or otherwise operate at full capacity.

An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.

In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members.

Certain of our competitors may also negotiate more favorable contract terms that could provide them with competitive advantages and affect our supply.

Climate change and legal or regulatory responses may have a long-term adverse impact on our business and results of operations.

Global average temperatures are gradually increasing due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere, which may contribute to significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters.

Decreased agricultural productivity in certain regions of the world as a result of changing weather patterns may limit the availability or increase the cost of key agricultural commodities and natural resources, as well as raw materials such as beef, pork, poultry, corn, soybean meal and other feed ingredients, which are important sources of ingredients for our products, and could impact the food security of communities around the world.

Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products.

Increasing concern over climate change also may adversely impact demand for our products due to changes in consumer preferences and result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.

Increased energy or compliance costs and expenses due to increased legal or regulatory requirements could be prohibitively costly and may cause disruptions in, or an increase in the costs associated with, the running of our production facilities.

Furthermore, compliance with any such legal or regulatory requirements may require us to make significant changes to our business operations and strategy, which will likely incur substantial time, attention and costs.

Even if we make changes to align ourselves with such legal or regulatory requirements, we may still be subject to significant fines if such laws and regulations are interpreted and applied in a manner inconsistent with our practices.

The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.

Finally, from time to time we establish and publicly announce goals and commitments to reduce our carbon footprint.

If we fail to achieve or improperly report on our progress toward achieving our carbon emissions reduction goals and commitments, the resulting negative publicity could adversely affect consumer preference for our products.

In response to the COVID-19 pandemic, various jurisdictions have attempted to implement or have implemented measures designed to contain the spread of the virus, including travel restrictions, stay-at-home or shelter-in-place orders and shutdowns of non-essential businesses.

Certain regions in the United States are currently experiencing a resurgence in the COVID-19 pandemic, which may result in the continuation or expansion of such measures.

These actions and the broader economic impact of the COVID-19 pandemic have had, and are expected to continue to have, an adverse effect on our business, results of operations and financial condition.

The extent of future impacts of the COVID-19 pandemic on general economic conditions and on our business, operations and results of operations remains uncertain.

We expect to continue to incur significantly increased operating costs related to worker health and safety measures, which have had, and will likely continue to have, a negative impact on our results of operations and financial condition.

As a result of the COVID-19 pandemic, we have experienced, and continue to experience, a significant shift in demand for our products from foodservice to retail channels, as schools and in-dining restaurants have closed across the United States and other countries.

These shifts in demand and other impacts from COVID-19 have adversely impacted our business, as volume increases in our retail channels have not fully offset the losses in foodservice channels.

We have experienced, and we expect to continue to experience, temporary idling of facilities or reduction of certain of our production capacity that service the foodservice channel in connection with this change in demand.

A prolonged shutdown of schools and in-dining restaurants could have an adverse effect on our business and results of operations.

Many large school districts throughout the United States are holding classes remotely and may continue to hold classes remotely.

If school districts within our foodservice channels continue to hold classes remotely, we anticipate we will experience a continued shift away from our foodservice channels, which would have an adverse impact on our business and results of operations.

| | |

| --- | --- |

| • | continued commodity cost volatility, which may add volatility to our costs and expenses; |

| • | a decrease in demand resulting from restrictions on public gatherings and interactions that limit the opportunity for our customers and consumers to purchase and consume our products; |

| • | a need to preserve liquidity, which could result in a reduction or suspension of our quarterly dividend or delays in implementing or an inability to implement our strategic planning initiatives; |

| • | an inability to access our preferred sources of liquidity, including commercial paper and investment grade credit markets, which could negatively impact our liquidity and financial condition; |

| • | a credit rating downgrade of our corporate debt and an increase in the cost or the difficulty to obtain debt or equity financing, or to refinance our debt in the future, could affect our financial condition or our ability to fund operations or future investment opportunities; |

| • | litigation; and |

| • | a continued decrease in demand at restaurants or other away from home dining, which adversely affects our foodservice business. |

We may not be able to accomplish this integration process smoothly or successfully.

The necessity of coordinating geographically separated organizations, systems and facilities and addressing possible differences in business backgrounds, corporate cultures and management philosophies may increase the difficulties of integration.

Failure to effectively integrate the businesses could adversely impact the expected benefits of the acquisitions, including cost synergies arising from supply chain efficiencies, merchandising activities and overlapping general and administrative functions.

The integration of large businesses is complex and requires us to devote significant management attention and incur substantial costs to integrate these businesses and Tyson’s business practices, policies, cultures and operations.

This diversion of our management’s attention from day-to-day business operations and the execution and pursuit of strategic plans and initiatives could result in performance shortfalls, which could adversely impact the combined company’s business, operations and financial results.

The integration process could also result in the loss of key team members, which could adversely impact the combined company’s future financial results.

Furthermore, during the integration planning process, we may encounter additional challenges and difficulties, including those related to, without limitation, managing a larger combined company; streamlining supply chains, consolidating corporate and administrative infrastructures and eliminating overlapping operations; retaining our existing vendors and customers; unanticipated issues in integrating information technology, communications and other systems; language and translation difficulties; and unforeseen and unexpected liabilities related to recent acquisitions.

Delays encountered in the integration could adversely impact the business, financial condition and operations of the combined company.

We continue to evaluate our estimates of synergies to be realized from recent acquisitions and refine them.

Our actual cost savings could differ materially from our current estimates.

Actual cost savings, the costs required to realize the cost savings and the source of the cost savings could differ materially from our estimates, and we cannot assure you that we will achieve the full amount of cost savings on the schedule anticipated or at all or that these cost savings programs will not have other adverse effects on our business.

In light of these uncertainties, you should not place undue reliance on our estimated cost savings.

Finally, we may not be able to achieve the targeted operating or long-term strategic benefits of the recent acquisitions in a timely manner or at all or could incur higher transition costs than anticipated.

An inability to realize the full extent of, or any of, the anticipated benefits of the acquisitions, as well as any delays encountered in the integration process, could have an adverse effect on our business, results of operations and financial condition.

In the fourth quarter of fiscal 2017, our Board of Directors approved a multi-year restructuring program (the “2017 Program”), which is expected to contribute to the Company’s overall strategy of financial fitness through increased operational effectiveness and overhead reduction.

In the fourth quarter of fiscal 2020, the Company extended the 2020 Program as it identified additional opportunities to eliminate overhead by optimizing organizational structures and other activities.

The success of the financial fitness programs, including the realization of the anticipated benefits, will depend in part on our ability to successfully implement the program in an efficient and effective manner.

The implementation of the financial fitness programs may be more difficult, costly, or time consuming than expected, and the financial fitness programs may not result in any or all of the anticipated benefits.

We may experience difficulties in implementing an enterprise resource planning system over the next few years.

We are engaged in a multi-year implementation of an enterprise resource planning (“ERP”) system.

[removed: COVID-19][added: COVID-19]

We continue to monitor and respond to the evolving nature of [added: the] COVID-19 [added: pandemic] and its impact to our global business.

[removed: We formed an] [added: In addition to our ongoing] internal COVID-19 task force [added: formed] for the primary purposes of maintaining the health and safety of our team members, ensuring our ability to operate our processing facilities and maintaining the liquidity of our [removed: business.][added: business, we have expanded our medical team with the addition of a Chief Medical Officer during fiscal 2021.]

These challenges increased our operating costs [removed: and negatively impacted our sales volumes for the back half of] [added: during] fiscal 2020 and [removed: are anticipated to continue into] fiscal 2021.

The [removed: ultimate] [added: long-term] impact of COVID-19 remains uncertain and will depend on future developments, including the duration and spread of the [removed: pandemic] [added: pandemic, COVID-19 variants] and [added: resurgences, and] related actions taken by federal, state and local government officials to prevent and manage disease spread, all of which are uncertain and cannot be predicted.

[removed: Fiscal year][added: Fiscal year]

Our accounting cycle resulted in a [removed: 53-week] [added: 52-week] year for [added: both] fiscal [removed: 2020] [added: 2021] and [added: 2019 and] a [removed: 52-week] [added: 53-week] year for fiscal [removed: 2019 and 2018.][added: 2020.]

[removed: General][added: General]

Sales grew [removed: 2%] [added: 9%] in fiscal [removed: 2020] [added: 2021] over fiscal [removed: 2019] [added: 2020] to [removed: $43.2] [added: $47.0] billion, primarily due to [removed: the impact of the additional week and] increased average sales prices in [added: each of our segments, partially offset by] the [removed: Beef, Pork and Prepared Foods segments.][added: impact of an additional week in fiscal 2020.]

Fiscal [removed: 2020] [added: 2021] operating income increased compared to fiscal [removed: 2019,] [added: 2020,] as strong Beef [removed: and Pork segment] results [added: and the gain on the sale of our pet treats business] were partially offset by a decline in operating income in the Chicken and [removed: Prepared Foods] [added: Pork] segments.

These COVID-19 direct incremental expenses [added: in fiscal 2020 and fiscal 2021] primarily included team member costs associated with worker health and availability and production facility downtime, including direct costs for personal protection equipment, production facility sanitization, COVID-19 [removed: testing,] [added: testing and vaccinations,] donations, product downgrades, rendered product, certain professional fees and $114 million of thank you bonuses to frontline team [removed: members,] [added: members in fiscal 2020,] which was partially offset by the CARES Act credits.

[removed: Market Environment][added: Market Environment]

According to the USDA, domestic protein production (beef, pork, chicken and turkey) [removed: increased approximately 2%] [added: was relatively flat] in fiscal [removed: 2020] [added: 2021] compared to fiscal [removed: 2019.][added: 2020.]

We continue to monitor [removed: recent] trade and tariff activity as well as COVID-19 and its potential impacts to exports and input costs across all of our segments.

Additionally, all segments experienced increased operating costs in fiscal [removed: 2020.][added: 2021.]

[removed: Margins –] Our total operating margin was [removed: 7.2%] [added: 9.3%] in fiscal [removed: 2020.][added: 2021.]

[removed: | • |] [added: -] Prepared Foods – [removed: 8.7% |][added: 16.4%]

[removed: Strategy][added: Strategy]

| in millions, except per share data | | | | | | | | [added: | | | | | | | | | |]

| | [added: | | 2021 | | | | | |] 2020 | | | | [added: | |] 2019 | | |

| Net income attributable to Tyson | [added: | |] $ | [removed: 2,140] [added: 3,047] | | | [added: | |] $ | [removed: 2,022] [added: 2,061] | | [added: | | | | | |]

| Net income attributable to Tyson - per diluted share | [removed: 5.86] | | [added: 8.34] | | [removed: 5.52] | | | [added: | 5.64 | | | | | | | | |]

[removed: | • |] [added: -] $75 million pretax, or ($0.16) per diluted share, of restructuring and related charges. [removed: |]

[removed: | • |] [added: -] $65 million pretax, or $0.14 per diluted share, related to the additional week in fiscal 2020. [removed: |]

[removed: | • |] [added: -] $116 million pretax, or $0.24 per diluted share, due to gain from pension plan terminations. [removed: |]

[removed: 2019] [added: 2021] – Included the following items:

[removed: | • | $31] [added: - $27] million pretax, or ($0.06) per diluted share, [added: related to the relocation] of [removed: Beef] [added: a] production facility [removed: fire costs. |][added: in China.]

| Sales | [added: | |] in millions | | | | | | | | | | | [added: | | | |]

[removed: | | 2020 | | | | 2019 | | | | 2018 | | |][added: 2020 vs. 2019 –]

| Sales | [added: | |] $ | [removed: 43,185] [added: 47,049] | | | [added: | |] $ | [removed: 42,405] [added: 43,185] | | | [added: | |] $ | [removed: 40,052] [added: 42,405] | |

| Change in sales volume | [removed: 0.7] | | [added: (2.8) | |] % | | [removed: 8.8] | | [added: 0.7 | |] % | | | | | [added: | |]

| Change in average sales price | [removed: 1.1] | | [added: 13.0 | |] % | | [removed: (3.0] | | [removed: )%] [added: 1.1] | | [added: %] | | | [added: | | | |]

| Sales growth | [removed: 1.8] | | [added: 8.9 | |] % | | [removed: 5.9] | | [added: 1.8 | |] % | | | | | [added: | |]

[removed: 2020 vs. 2019] [added: 2020 vs. 2019] –

[removed: | • | Sales] [added: - Sales] Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $278 million primarily due to incremental volumes from business acquisitions as well as the impact of an additional week in fiscal 2020, partially offset by decreased volumes in each of our segments in fiscal 2020 due to lower production throughput associated with the impact of COVID-19. [removed: |]

[removed: | • | Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $502 million.] The increase in average sales price was primarily attributable to favorable product mix related to robust demand in the retail channel across all of our segments and beef and pork demand remaining strong amid supply disruptions related to COVID-19, partially offset by approximately $45 million of incremental discounted sales in the Prepared Foods segment. [removed: |]

[removed: 2019 vs. 2018] [added: 2020 vs. 2019] –

[removed: | • | The above amounts include] [added: This included] a net increase of [removed: $2,209] [added: $667] million [added: primarily] related to the impact of results from acquisitions and divestitures. [removed: |]

| Cost of Sales | [added: | |] in millions | | | | | | | | | | [added: | | | | | | | |]

| | [removed: 2020] | | [added: 2021] | | [added: | | | | 2020 | | |] 2019 | | | [removed: 2018] | | | [added: | | |]

OBJECTIVE

The following discussion provides an analysis of the Company’s financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K.

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.

Each of our segments experienced a shift in demand from foodservice to retail during 2020 and have seen varying levels of foodservice recovery and the return of volumes during fiscal 2021.

Additionally, we continue to assess the potential of more permanent impacts to our businesses.

Team Members

The health and safety of our team members is our top priority.

To protect our team members, we implement safety measures recommended by the Centers for Disease Control and Prevention (“CDC”) and the Occupational Safety and Health Administration (“OSHA”) in our facilities and coordinate with other health officials as appropriate.

In addition to hiring a Chief Medical Officer, we have added 200 nurse and administrative support staff positions and developed an “always-on” testing strategy rooted in contact tracing.

In August 2021, we announced all domestic team members were required to be fully vaccinated by November 1, 2021.

Customers and Production

Our most significant impacts from COVID-19 relate to channel shifts and lower production.

We are committed to doing our best to ensure the continuity of our business and the availability of our products to customers.

Our production capabilities, including our large scale and geographic proximities, allow us to adapt some of our facilities to the changing demand.

In addition, our production facilities experienced varying levels of production impacts, including reduced volumes, due to the implementation of additional worker health precautions and worker absenteeism.

Supply Chain

Our supply chain has stayed largely intact as we have built contingency plans for redundant supply for our production facilities as well as our external suppliers.

We have been able to leverage our extensive distribution network and large private transportation fleet to help mitigate the impacts of COVID-19.

We have experienced and expect to continue to experience volatility in commodity inputs, which has impacted our input costs, in part due to impacts caused by COVID-19.

Since we also export globally, container availability and port capacities have been among the challenges in meeting the global demand for our products.

Insurance and CARES Act

Although we maintain insurance policies for various risks, we do not believe most COVID-19 impacts will be covered by our policies.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), among other things, includes provisions relating to refundable payroll tax credits, deferral of the employer portion of social security payments, and a number of income tax provisions.

The provisions related to income tax will not have a significant impact on our financial statements.

Overall Financial Condition

We continue to proactively manage the Company and its operations through the pandemic.

The major challenge we face is the availability of team members to operate our production facilities due to our production facilities experiencing varying levels of absenteeism and due to labor shortages associated with the economic impact of the pandemic.

We will continue to operate our production facilities with team member health and safety as a top priority.

However, we cannot predict the ultimate impact that COVID-19 will have on our short- and long-term demand at this time, as it will depend on, among other things, the severity and duration of the COVID-19 pandemic.

We generated $3.8 billion of operating cash flows during fiscal 2021.

At October 2, 2021, we had $4.8 billion of liquidity, which included availability under our revolving credit facility and $2.5 billion of cash and cash equivalents.

We have $1.1 billion of current debt.

Combined with the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business, make capital expenditures, pay dividends and address other needs including our ability to meet maturing debt obligations.

In fiscal 2021, our results were impacted by $626 million of charges related to legal contingency accruals, $27 million of charges related to the relocation of a production facility in China, $17 million of production facilities fire costs, net of insurance proceeds and a $784 million gain on the sale of our pet treats business.

During fiscal 2021, we incurred direct incremental expenses related to COVID-19 totaling approximately $335 million, which were recorded in Cost of Sales in our Consolidated Statements of Income.

The Beef segment experienced strong global demand and ample supply of market-ready cattle.

The Pork segment experienced strong demand and lower hog supplies.

The Chicken segment experienced strong demand relative to supply.

The Prepared Foods segment experienced growth, but faced increased costs partially due to the impact of an inflationary environment and challenging labor and supply conditions during fiscal 2021.

Margins

As a result, we have experienced lower levels of productivity and higher costs of production.

This will likely continue in the short term until the effects of COVID-19 diminish.

Each of our segments has also experienced a shift in demand from foodservice to retail during 2020; however, the volume increases in retail have not been sufficient to offset the decreases in foodservice.

These current trends, including the combination of operational challenges and volume impacts, will likely continue into fiscal 2021 and have a negative impact on overall earnings.

| | |

| --- | --- |

| • | Team Members – The health and safety of our team members is our top priority. To protect our team members, we have implemented and will continue to implement safety measures recommended by the Centers for Disease Control and Prevention ("CDC") and the Occupational Safety and Health Administration ("OSHA") in our facilities and coordinate with other health officials as appropriate, including, but not limited to, checking the temperature of team members as they enter company facilities, restricting visitor access, increasing efforts to deep clean and sanitize facilities, requiring the use of protective face coverings and making protective face coverings and other protective equipment available to team members and encouraging team members who feel sick to stay at home through relaxed attendance policies and enhanced benefits. We implemented additional ways to promote social distancing in our production facilities by creating additional breakroom space and allowing extra time between shifts to reduce interaction of team members, as well as erecting dividers between workstations or increasing the space between workers on the production floor. For office-based team members, we have encouraged team members capable of working from home to do so, and are prioritizing team member safety as we begin to reintegrate into our offices over time. We paid $1,000 bonuses to approximately 106,000 domestic frontline team members who support the Company’s operations during the pandemic. Additionally, we experienced positive COVID-19 cases and worker absenteeism throughout our production network during the back half of fiscal 2020, which led to some temporary idling of production facilities. We are currently compensating our team members for sick time and COVID-19 related idling or shift cancellations. |

| • | Customers and Production – Our most significant impacts from COVID-19 relate to channel shifts and lower production. We are committed to doing our best to ensure the continuity of our business and the availability of our products to customers. We have seen a shift in demand from our foodservice to our retail sales channels as schools and in-dining restaurants remain closed or continue to operate at reduced capacity across the country. Our production capabilities, including our large scale and geographic proximities, allow us to adapt some of our facilities to the changing demand by shifting certain amounts of production from foodservice to retail. Not all of our facilities can be adapted and as a result we experienced a net negative impact to our volumes. In addition, our production facilities experienced varying levels of production impacts, including reduced volumes, due to the implementation of additional worker health precautions, worker absenteeism and temporary COVID-19 related idling at some of our production facilities. Additionally, we temporarily idled certain facilities, shifts, and/ or lines that service the foodservice channel as we balanced the shifting demand between foodservice and retail sales channels. On April 28, 2020, the President issued an Executive Order stating the importance of the continued operation of meat and poultry processing facilities and directing the Secretary of Agriculture to issue rules and orders to ensure the continued supply of meat and poultry, consistent with the guidance for the operations of meat and poultry processing facilities jointly issued by the CDC and OSHA. This order provides clarity on what standards should apply at our meat and poultry processing facilities and we anticipate continuing to work with the United States Department of Agriculture ("USDA") and other government officials in our efforts to ensure that we are able to operate our facilities safely. |

| • | Supply Chain – Our supply chain has stayed largely intact as we have built contingency plans for redundant supply for our production facilities as well as our external suppliers. We have been able to leverage our extensive distribution network and large private transportation fleet to help mitigate the impacts of COVID-19. We have experienced and expect to continue to experience volatility in commodity inputs, which has impacted our input costs, in part due to impacts caused by COVID-19. Production facility downtime in the back half of fiscal 2020 impacted all our segments' supply chains. Our Prepared Foods segment depends on adequate supplies of raw materials necessary for its production. High levels of industry pork facility idling during the back half of fiscal 2020 impacted the availability of certain raw materials which temporarily limited production capability and increased formulation costs of various Prepared Foods products. Additionally, our Chicken segment had to divert some of its live production to rendering and suboptimal product mixes, while our Beef and Pork segments had to delay deliveries of live cattle and hogs and also dealt with the impact of heavier harvest weights. Since we also export globally, container availability and port capacities have been among the challenges in meeting the global demand for our products. |

| • | Insurance and CARES Act – Although we maintain insurance policies for various risks, we do not believe most COVID-19 impacts will be covered by our policies. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferral of the employer portion of social security payments, and a number of income tax provisions. The provisions related to income tax will not have a significant impact on our financial statements. We began implementing the deferral of the employer portion of social security payments in the back half of the fiscal year, which had a favorable impact on liquidity. This resulted in the deferral of approximately $185 million of payroll taxes in fiscal 2020. We recognized a benefit of approximately $30 million related to the refundable payroll tax credit provision. |

| • | Liquidity – We generated approximately $3.9 billion of operating cash flows during fiscal 2020. At October 3, 2020, we had $3.2 billion of liquidity, which included availability under our revolving credit facility and $1,420 million of cash and cash equivalents. We have $548 million of current debt. Combined with the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business, make capital expenditures, pay dividends and address other needs including our ability to meet maturing debt obligations. However, we will continue to monitor the impact of COVID-19 on our liquidity and, if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times. This may include temporarily suspending share repurchases, suspending or reducing dividend payments or other cash preservation actions as necessary. |

| • | Overall Financial Condition – We continue to proactively manage the Company and its operations through the pandemic. The major challenge we face is the availability of team members to operate our production facilities as our production facilities are experiencing varying levels of absenteeism. We will continue to operate our production facilities with team member health and safety as a top priority. The COVID-19-related slowdowns and temporary idling drive higher labor and production costs, which we expect to continue until the return of more normal conditions. However, some of the higher labor and other costs may become more permanent in nature. We also experienced COVID-19-related demand shifts away from foodservice and into retail, and we responded to the demand shifts by adjusting parts of our production capacity accordingly. Despite adjusting parts of our operational footprint, higher retail volumes did not fully offset the reduced volumes in foodservice. Additionally, the price and mix of these volume shifts resulted in lower margin realization for portions of the year in our Prepared Foods and Chicken segments. Further, idling of pork facilities could have downstream impacts on the availability of raw material for parts of our Prepared Foods business, which could subsequently impact its ability to produce at normal levels. Consequently, the challenges created by absenteeism and our proactive, temporary idling of production facilities due to COVID-19, adversely affects our operating costs and reduces what would otherwise be a stronger margin environment. However, we cannot predict the ultimate impact that COVID-19 will have on our short- and long-term demand at this time, as it will depend on, among other things, the severity and duration of the COVID-19 pandemic. Our liquidity is expected to be adequate to continue to run our operations and meet our obligations as they become due. |

In fiscal 2019, our results were impacted by a $41 million impairment associated with the planned divestiture of a business, $41 million of restructuring and related charges, $37 million related to Keystone Foods purchase accounting and acquisition related costs and $31 million of costs associated with a fire at one of our beef production facilities.

The Beef and Pork segments experienced strong demand but had lower production throughput associated with the impacts of COVID-19 and also experienced lower livestock costs.

The Chicken segment experienced volatile market conditions associated with increased domestic availability of supply and lower production throughput associated with COVID-19.

The Prepared Foods segment continued to experience growth in the retail channel but faced increased raw material costs and lower production throughput associated with COVID-19.

| • | Beef – 10.7% |

| • | Pork – 11.0% |

| • | Chicken – 0.9% |

We intend to achieve our strategy as we: grow our business through differentiated capabilities; deliver ongoing financial fitness through continuous improvement; and sustain our company and our world for future generations.

| • | During fiscal 2019, we acquired two businesses for a total of approximately $2.5 billion, net of cash acquired. These businesses included the Thai and European operations, which consist of vertically integrated chicken and further-processing operations, and Keystone Foods, a major supplier to the growing global foodservice industry. They were acquired in furtherance of our growth strategy and expansion of our value-added protein capabilities in domestic and global markets. For further description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 3: Acquisitions and Dispositions. |

| • | In the first quarter of fiscal 2020, the Company approved a restructuring program (the "2020 Program"), which is expected to contribute to the Company’s overall strategy of financial fitness through the elimination of overhead and consolidation of certain enterprise functions. In the fourth quarter of fiscal 2020, the Company extended the 2020 Program as it identified additional opportunities to eliminate overhead by optimizing organizational structures and other activities. As a result of this restructuring program, we expect to realize savings of approximately $140 million and $160 million in fiscal 2021 and fiscal 2022, respectively. We have recognized $60 million of cumulative pretax charges in fiscal 2020 associated with the 2020 Program consisting of severance and employee related costs. As part of the 2020 Program, we are eliminating positions across several areas and job levels, with eliminated positions originating from the corporate offices in Springdale, Arkansas and Chicago, Illinois, as well as certain production facility and supply chain administrative positions. The majority of the positions have already been or are expected to be eliminated by the end of fiscal 2021. For further description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 7: Restructuring and Related Charges. |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| • | $37 million pretax, or ($0.08) per diluted share, of Keystone Foods purchase accounting and acquisition related costs, which included an $11 million purchase accounting adjustment for the amortization of the fair value step-up of inventory and $26 million of acquisition related costs. |

| • | $41 million pretax, or ($0.08) per diluted share, of restructuring and related charges. |

| • | $55 million pretax, or $0.11 per diluted share, from gain on sale of an investment. |

| • | $105 million post tax, or $0.29 per diluted share, from recognition of previously unrecognized tax benefit. |

| • | $41 million pretax, or ($0.09) per diluted share, from an impairment associated with the planned divestiture of a business. |

| • | $15 million pretax, or ($0.03) per diluted share, due to a pension plan termination charge. |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| • | Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $3,539 million primarily driven by incremental volumes from business acquisitions which impacted the Chicken segment and International/Other, partially offset by business divestitures in fiscal 2018 in our Prepared Foods segment. |

| • | Average Sales Price – Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $1,186 million. The Chicken segment had a decrease in average sales price as a result of decreased pricing associated with product mix changes from fiscal 2018 acquisitions, partially offset by an increase in average sales price in the Beef and Prepared Foods segments attributable to strong demand and sales in the Beef segment and a more favorable product mix and higher raw material costs in our Prepared Foods segment. |

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| • | Cost of sales increased $418 million. This included a net increase of $667 million primarily related to the impact of results from acquisitions and divestitures. |

| • | Cost of sales increased $2,427 million. This included a net increase of $2,120 million primarily related to the impact of results from acquisitions and divestitures. |

| • | Increase due to $31 million of incremental costs associated with a fire at one of our Beef production facilities. |

| • | Decrease due to one-time cash bonus to front line team members of $108 million in fiscal 2018. |

[removed: Commodities Risk:] We purchase certain commodities, such as grains and livestock in the course of normal operations.

The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of October [removed: 3, 2020] [added: 2, 2021] and [removed: September 28, 2019,] [added: October 3, 2020,] on the fair value of open positions.

| Effect of 10% change in fair value | [added: | |] in millions | | | | | | | [added: | |]

| Livestock: | | | | | | | | [added: | | | |]

| Live Cattle | [added: | |] $ | [removed: 24] [added: 42] | | | [added: | |] $ | [removed: 19] [added: 24] | |

| Lean Hogs | [removed: 19] | | [added: 38] | | [removed: 17] | | | [added: | 19 | | |]

| Grain: | | | | | | | | [added: | | | |]

| Corn | [removed: 23] | | [added: 24] | | [removed: 39] | | | [added: | 23 | | |]

| Soybean Meal | [removed: 28] | | [added: 26] | | [removed: 31] | | | [added: | 28 | | |]

[removed: Interest Rate Risk:] At October [removed: 3, 2020,] [added: 2, 2021,] we had variable rate debt of [removed: $1,521] [added: $11] million with a weighted average interest rate of [removed: 1.8%.][added: 3.0%.]

A hypothetical 10% increase in interest rates effective at October [added: 2, 2021, and October] 3, 2020, [removed: and September 28, 2019,] would have a minimal effect on interest expense.

At October [removed: 3, 2020,] [added: 2, 2021,] we had fixed-rate debt of [removed: $9,818] [added: $9,337] million with a weighted average interest rate of [removed: 4.42%.][added: 4.49%.]

A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately [removed: $108] [added: $154] million at October [removed: 3, 2020,] [added: 2, 2021,] and [removed: $184] [added: $108] million at [removed: September 28, 2019.][added: October 3, 2020.]

[removed: Foreign Currency Risk:] We have foreign exchange exposure from fluctuations in foreign currency exchange rates primarily as a result of certain receivable and payable balances.

A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a [removed: $54] [added: $13] million and [removed: $15] [added: $54] million impact on pretax income at October [removed: 3, 2020] [added: 2, 2021] and [removed: September 28, 2019,] [added: October 3, 2020,] respectively.

[removed: Concentrations of Credit Risk:] Our financial instruments exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.

At October [removed: 3, 2020] [added: 2, 2021] and [removed: September 28, 2019, 16.5%] [added: October 3, 2020, 16.3%] and [removed: 16.2%,] [added: 16.5%,] respectively, of our net accounts receivable balance was due from Walmart Inc. No other single customer or customer group represented 10% or greater of net accounts receivable.

COMMODITIES RISK

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2021 | | | | | | 2020 | | |

INTEREST RATE RISK

FOREIGN CURRENCY RISK

CONCENTRATIONS OF CREDIT RISK

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | 2020 | | | | 2019 | | |

Headquartered in Springdale, Arkansas, the Company had approximately [removed: 139,000] [added: 137,000] employees [removed: ("team members")] [added: (“team members”)] on October [removed: 3, 2020.][added: 2, 2021.]

Through our Core Values, Tyson Foods is a company of people engaged in the production of food, seeking to pursue trust and integrity, and committed to creating value for our shareholders, our customers, our team [removed: members,] [added: members] and our communities.

We strive to be honorable and operate with integrity, be faith-friendly and inclusive, serve as stewards of the resources entrusted to [removed: us,] [added: us] and provide a safe work environment.

Some of the key factors influencing our business are customer demand for our products; the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace; accessibility of international markets; market prices for our products; the cost and availability of live cattle and hogs, raw materials and feed ingredients; [added: availability of team members to operate our production facilities;] and operating efficiencies of our facilities.

Tyson New [removed: Ventures] [added: Ventures,] LLC is used to broaden our exposure to innovative, new forms of protein and ways of sustainably producing food to complement the Company's continuing investments in innovation in our core Beef, Pork, Chicken and Prepared Foods businesses.

[removed: Beef:] 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.

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

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

[removed: Prepared Foods:] Prepared Foods includes our operations related to manufacturing and marketing frozen and refrigerated food products and logistics operations to move products through the supply chain.

[removed: Beef:] The primary raw materials used in our beef operations are live cattle.

[removed: Pork:] The primary raw materials used in our pork operations are live hogs.

[removed: Chicken:] The primary raw materials used in our domestic chicken operations are corn and soybean meal used as feed and live chickens raised primarily by independent contract farmers.

Pullets are [added: raised to 20 weeks of age,] sent to breeder houses, and the resulting eggs are sent to our hatcheries.

In fiscal [removed: 2020,] [added: 2021,] corn, soybean meal and other feed ingredients were major production costs, representing roughly [removed: 53%] [added: 59%] of our cost of growing a live chicken domestically.

[removed: Prepared Foods:] The primary raw materials used in our prepared foods operations are [removed: commodity based] [added: commodity-based] raw materials, including beef, pork, chicken, turkey, flour, vegetables, cheese, eggs, seasonings and other cooking ingredients.

Walmart Inc. accounted for [removed: 18.7%] [added: 18.3%] of our fiscal [removed: 2020] [added: 2021] consolidated sales.

No other single customer or customer group represented more than 10% of fiscal [removed: 2020] [added: 2021] consolidated sales.

[removed: | • |] [added: -] identifying target markets for value-added products; [removed: |]

[removed: | • |] [added: -] concentrating production, sales and marketing efforts to appeal to and enhance demand from those markets; and [removed: |]

[removed: | • |] [added: -] utilizing our national distribution systems and customer support services. [removed: |]

We sold products in approximately [removed: 145] [added: 140] countries in fiscal [removed: 2020.][added: 2021.]

[removed: | • |] [added: -] Cobb-Vantress, a chicken breeding stock subsidiary, has business interests in Argentina, Brazil, China, Colombia, the Dominican Republic, India, the Netherlands, New Zealand, Peru, the Philippines, Spain, Turkey, and the United Kingdom. [removed: |]

[removed: | • |] [added: -] Tyson Asia-Pacific, consists of vertically-integrated chicken production operations in Thailand, [added: multi-protein] further-processing operations in [removed: Malaysia and] [added: Malaysia,] a beef production operation in [removed: Australia. |][added: Australia, and joint venture interests in two non-consolidated poultry businesses in Malaysia.]

[removed: | • |] [added: -] Tyson China-Korea, with locations in China and South Korea, consists of vertically-integrated chicken production [removed: and] [added: operations, multi-protein] further-processing operations, and a joint venture interest in a non-consolidated chicken processing business. [removed: |]

[removed: | • |] [added: -] Tyson Europe, sells chicken products throughout [added: the United Kingdom and] Europe produced from our other global operations and co-packer arrangements, and has a chicken further processing operation in the Netherlands. [removed: |]

[removed: | • |] [added: -] Vibra Agroindustrial S.A., a joint venture in Brazil in which we have a minority interest, is a vertically-integrated chicken processing business. [removed: |]

[removed: | • |] [added: -] Godrej Tyson Foods, a joint venture in India in which we have a minority interest, is primarily a chicken processing business. [removed: |]

[removed: | • |] [added: -] Tyson Mexico Trading Company, a Mexican subsidiary, sells chicken products primarily from our U.S. operations and co-packer arrangements. [removed: |]

With regards to our [added: domestic] food products we have two primary research and development locations, our Discovery Center in Springdale, Arkansas, and an Innovation Center located in Downers Grove, Illinois.

Additionally, [removed: in fiscal 2020,] we [removed: opened the Tyson] [added: have a] Manufacturing Automation Center [added: in Springdale, Arkansas, designed] to grow the development of new manufacturing solutions and to enhance team member training on new technology.

Congress, the United States Environmental Protection [removed: Agency and] [added: Agency,] some states [added: and non-U.S. governments] continue to consider various options to control greenhouse gas emissions.

[removed: Due] [added: Although we have not incurred significant costs or capital expenditures, due] to continuing uncertainty surrounding this [removed: issue,] [added: issue] it is premature to speculate on the specific nature of impacts that imposition of greenhouse gas emission controls would have on us and whether such impacts would have a material adverse effect.

In addition to our own internal Food Safety and Quality Assurance oversight and review, our beef, pork, chicken, and prepared foods products are subject to [removed: inspection prior to distribution,] [added: inspection,] primarily by the USDA and the United States Food and Drug Administration [removed: ("FDA").][added: (“FDA”).]

As of October [removed: 3, 2020,] [added: 2, 2021,] we employed approximately [removed: 139,000] [added: 137,000] team members.

Approximately 120,000 team members were employed in the United States, of [removed: which] [added: whom] approximately 114,000 were employed at production facilities, and approximately [removed: 19,000] [added: 17,000] team members were employed in [removed: foreign] [added: other] countries, primarily in Thailand and China.

Approximately [removed: 31,000] [added: 33,000] team members in the United States were subject to collective bargaining agreements with various labor unions, with approximately [removed: 37%] [added: 8%] of those team members at locations either under negotiation for contract renewal or included under agreements expiring in fiscal [removed: 2021.][added: 2022.]

Approximately 5,000 team members in [removed: foreign] [added: other] countries were subject to collective bargaining agreements.

[removed: Health and Safety:] We maintain a safety culture grounded on the premise of eliminating workplace incidents, risks and hazards.

We [removed: have] created and implemented processes to help eliminate safety events by reducing their frequency and severity.

We also review and monitor our [added: safety] performance closely.

Beef

Pork

Chicken

Prepared Foods

Beef

Pork

Chicken

Prepared Foods

Tyson China also sells beef, pork, and prepared foods products imported from Tyson production facilities in the United States and other global operations.

Further, we have research and development capabilities located in several international locations where we operate.

Environmental Regulation

Food Safety

Greenhouse Gas Emissions

Tyson closely monitors developments in this area, and voluntarily sets goals to reduce greenhouse gas emissions in accordance with the Science Based Targets initiative (SBTi) criteria.

We continue to evaluate the plans and associated costs of achieving our greenhouse gas emission reduction goals.

Sustainability

We have aligned our business priorities with our sustainability strategy by empowering people, conserving natural resources and innovating smart, responsible agriculture.

We strive to empower people by being a transparent people-first business that values inclusion and equal opportunity, investing in communities, fighting hunger and empowering our team.

We aim to conserve natural resources by conserving water, reducing greenhouse gas emissions, minimizing manufacturing and food waste and designing and using packaging that is reusable, recyclable or compostable.

Additionally, we undertake efforts to innovate smart, responsible agriculture by cultivating a food system that prioritizes sustainable agriculture in our global supply chain through land stewardship, animal welfare, education, transparency and traceability.

We have also partnered with World Resources Institute to assess water risk and develop a water stewardship strategy, completed construction of Tyson Foods Center for Sustainable Broiler Research, announced our global forest protection standard following deforestation risk assessment and achieved a 7.7% reduction in water use against a 2015 baseline year.

Additionally, we established sustainability governance and oversight through the Governance and Nominating Committee of our Board of Directors.

This Committee advises the Board on matters relating to corporate responsibility and sustainability, including environmental, social and governance matters affecting the Company.

It also oversees the Company’s key programs and oversees and reviews, at least annually, the Company’s integration of sustainability principles into our business strategy and decision making.

HUMAN CAPITAL MANAGEMENT

Health and Safety

To protect our team members, their families and our communities, we require our team members in the U.S. to be fully vaccinated against COVID-19.

We also expanded our medical team with the addition of a Chief Medical Officer position and created over 200 nurse and administrative support staff positions to assist our efforts to protect frontline team members during the COVID-19 pandemic while also enhancing our culture of health, safety and wellness.

In addition, we partnered with third-party experts to assist in our efforts to educate our U.S. team members about COVID-19 vaccines, provide our U.S. team members, their families and members of their household access to COVID-19 vaccines and case assessment of team members and their families affected by the pandemic.

Diversity, Equity and Inclusion

In fiscal 2021, we appointed our first Chief Equity, Inclusion and Diversity Officer and established a company-wide Diversity, Equity and Inclusion Council.

In fiscal 2021, we reorganized our Business Resource Groups (or “BRGs”) and added three new BRGs: African Ancestry Alliance, Asians & Allies and LatinX.

In fiscal 2021, to support organizations working to combat racial hate crimes and protect the civil and human rights of Asian American and Pacific Islanders, we committed to awarding a series of grants to several national non-profit organizations, including Asian Americans Advancing Justice, Asian Americans Advancing Justice–Chicago and the National Association of Asian American Professionals.

Consistent with our commitment to diversity, we implemented a goal to have at least 80% of our candidate slates for domestic team member positions at the director level and above be diverse.

In fiscal 2021, we exceeded our goal, with approximately 92% of our candidate slates for such domestic positions diverse as of October 2, 2021.

In addition, as of October 2, 2021, approximately 31% of our domestic team members in management roles identified as women and approximately 30% identified as ethnically diverse.

Talent and Development

Consistent with this focus, in fiscal 2021, we conducted our first-ever worldwide engagement survey that included frontline team members for the purpose of evaluating our internal performance and how we compared to other companies in various areas.

To complement Upward Academy, we have also launched Upward Pathways, a frontline career development program that helps team members further hone professional skills and creates opportunities for our team members to advance to higher-paying, more senior-level positions within the Company through job skills training and workforce certifications at no cost.

| | |

| --- | --- |

Our corporate governance documents are available in print, free of charge to any shareholder who requests them.

Refer to the description of [removed: certain legal proceedings pending against us] [added: the Broiler Antitrust Civil Litigation, the Wage Rate Litigation and the Broiler Chicken Grower Litigation] under [added: the heading “Commitments and Contingencies” in] Part II, Item 8, Notes to Consolidated Financial Statements, Note 21: Commitments and Contingencies, which discussion is incorporated herein by reference.

On June 6, 2019, our poultry rendering facility in Hanceville, Alabama, [removed: recently] acquired from American Proteins, Inc. in 2018, experienced a release of partially treated wastewater that reached a nearby river and resulted in a fish kill.

On December 19, 2019, [removed: Olean Wholesale Grocery Cooperative, Inc. and John Gross and Company, Inc., acting on behalf of themselves and] a putative class of [removed: all persons and entities who purchased turkey directly from a defendant or alleged co-conspirator during the class period of January 1, 2010 to January 1, 2017,] [added: direct purchasers] filed a class action against us, [added: other] turkey suppliers, and Agri Stats, Inc. in the United States District Court for the Northern District of Illinois.

On April 13, 2020, [removed: Sandee's Catering filed] a similar complaint [added: was filed] in the United States District Court for the Northern District of Illinois on behalf of [removed: itself and] a putative class of [removed: all commercial and institutional] indirect purchasers of turkey [removed: that purchased directly from a defendant or alleged co-conspirator during the class period of January 1, 2010 to January 1, 2017,] alleging claims based on the Sherman Act and various state law causes of action.

[removed: Other Matters:] As of October [removed: 3, 2020,] [added: 2, 2021,] we had approximately [removed: 139,000] [added: 137,000] team members and, at any time, have various employment practices matters outstanding.

In the aggregate, these matters are [removed: significant] [added: important] to the Company, and we devote [removed: significant] [added: considerable] resources to managing employment issues.

On August 13, 2021, the court approved a settlement of all claims with the State of Alabama related to this action on terms not material to the Company.

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

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.

In April 2021, we reached agreement to settle all claims with the putative direct purchaser class for $4.625 million and with the putative commercial and institutional indirect purchaser class for $1.75 million.

On May 25, 2021, the Court granted preliminary approval of the settlement with the putative direct purchaser class, and the final fairness hearing is scheduled for January 6, 2022.

On July 26, 2021, the court granted preliminary approval of the settlement with the putative commercial and institutional indirect purchaser class, and the final approval hearing is expected to be held in early 2022.

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

Other Matters

Listed below are certain additional legal proceedings involving the Company and/or its subsidiaries.

On November 30, 2018, we completed the acquisition of Keystone Foods from Marfrig.

At the time of closing, Keystone Foods subsidiary McKey Korea, LLC (“McKey Korea”) and three of its managers were under criminal indictment and being prosecuted in the Seoul Central District Court for The Republic of Korea.

That prosecution stems from alleged violations of the Livestock Products Sanitary Control Act with respect to the method of testing for Enterohemorrhagic E.

Coli employed by McKey Korea for beef patties produced in 2016 and 2017 at McKey’s Sejong City facility.

The indictment also includes charges alleging the unlawful refreezing of thawed product for storage.

All defendants have pled not guilty and deny all allegations.

The trial concluded in October 2020.

McKey Korea faces a potential criminal fine of $100,000.

We have certain indemnification rights against Marfrig related to this matter.

On January 27, 2017, Haff Poultry, Inc., Craig Watts, Johnny Upchurch, Jonathan Walters and Brad Carr, acting on behalf of themselves and a putative class of broiler chicken farmers, filed a class action complaint 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.

On March 27, 2017, a second class action complaint making similar claims on behalf of a similarly defined putative class was filed in the United States District Court for the Eastern District of Oklahoma.

Plaintiffs in the two cases sought to have the matters consolidated, and, on July 10, 2017, filed a consolidated amended complaint 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.

We and the other defendants filed a motion to dismiss on September 8, 2017, and that motion was denied on January 6, 2020.

The parties are now conducting discovery in the Oklahoma action.

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

On October 6, 2020, the named plaintiffs in the Oklahoma action filed a motion with the United States Judicial Panel on Multidistrict Litigation to transfer and consolidate all actions in the Eastern District of Oklahoma.

We moved to dismiss the complaints, and on October 19, 2020, the court partially denied the motion.

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | [added: | | | | | |]

| | [added: | |] For the fiscal year ended | [added: | |] October [removed: 3, 2020] [added: 2, 2021] | | [added: | | | |]

| ☐ | [added: | |] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | | [added: | | | | | |]

| | [added: | |] For the transition period from to | | | [added: | | | | | |]

[removed: ][added: ]

| | [added: | |] Delaware | | | [added: | | | | | |] 71-0225165 | | | | [added: | | | | | | | |]

| | [added: | |] (State or other jurisdiction of incorporation or organization) | | | [added: | | | | | |] (I.R.S. Employer Identification No.) | | | | [added: | | | | | | | |]

| | [added: | |] 2200 West Don Tyson Parkway, | | | | | | | [added: | | | | | | | | | | | | | |]

| | [added: | |] Springdale, | [added: | |] Arkansas | | [added: | | | |] 72762-6999 | | | | [added: | | | | | | | |]

| | [added: | |] (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | | | | [added: | | | | | | | |]

| | [added: | |] (479) | | [added: | | | |] 290-4000 | | | | | [added: | | | | | | | | | |]

| (Registrant’s telephone number, including area code) | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Title of Each Class | | | [added: | | | | | |] Trading Symbol | [added: | |] Name of Each Exchange on Which Registered | [added: | |]

| Class A Common Stock | [added: | |] Par Value | [added: | |] $0.10 | [added: | |] TSN | [added: | |] New York Stock Exchange | [added: | |]

| Large Accelerated Filer | | [added: | | | |] ☒ | | [added: | | | |] Accelerated Filer | | [added: | | | |] ☐ | [added: | |]

| Non-Accelerated Filer | | [added: | | | |] ☐ | | [added: | | | |] Smaller Reporting Company | | [added: | | | |] ☐ | [added: | |]

| | | | | [added: | | | | | | | |] Emerging Growth Company | | [added: | | | |] ☐ | [added: | |]

On [removed: March 28, 2020,] [added: April 3, 2021,] the aggregate market value of the registrant’s Class A Common Stock, $0.10 par value ("Class A stock"), and Class B Common Stock, $0.10 par value ("Class B stock"), held by non-affiliates of the registrant was [removed: $16,867,056,474] [added: $21,593,988,086] and [removed: $606,699,] [added: $775,279,] respectively.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of October [removed: 31, 2020.][added: 30, 2021.]

| Class | | [added: | | | |] Outstanding Shares | [added: | |]

| Class A Common Stock, $0.10 Par Value ("Class A stock") | | [removed: 294,125,924] | [added: | | | 294,770,832 | | |]

| Class B Common Stock, $0.10 Par Value ("Class B stock") | | [added: | | | |] 70,010,355 | [added: | |]

Portions of the registrant’s definitive Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held February [removed: 11, 2021,] [added: 10, 2022,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

| TABLE OF CONTENTS | | | [added: | | | | | |]

| | | [added: | | | |] PAGE | [added: | |]

| Item 1. | [removed: [Business](#s70A3288F248957449990F324E9EEA96D)] | [removed: [3](#s70A3288F248957449990F324E9EEA96D)] | [added: [Business](#ia2336518dd464ee3ac72696b3d6a377a_13) | | | [2](#ia2336518dd464ee3ac72696b3d6a377a_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s54C6B1EEA95B5AD8BFE797CEF3377134)] [added: Factors](#ia2336518dd464ee3ac72696b3d6a377a_16)] | [removed: [8](#s54C6B1EEA95B5AD8BFE797CEF3377134)] | [added: | [8](#ia2336518dd464ee3ac72696b3d6a377a_16) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s1A6752128D325E4485D8FCF6DA4EAA98)] [added: Comments](#ia2336518dd464ee3ac72696b3d6a377a_19)] | [removed: [19](#s1A6752128D325E4485D8FCF6DA4EAA98)] | [added: | [19](#ia2336518dd464ee3ac72696b3d6a377a_19) | | |]

| Item 2. | [removed: [Properties](#s92A6966265525A269B8CD96C62480739)] | [removed: [19](#s92A6966265525A269B8CD96C62480739)] | [added: [Properties](#ia2336518dd464ee3ac72696b3d6a377a_22) | | | [19](#ia2336518dd464ee3ac72696b3d6a377a_22) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s831DFD24CE8C5954AEBD094C3ACC24A9)] [added: Proceedings](#ia2336518dd464ee3ac72696b3d6a377a_25)] | [removed: [20](#s831DFD24CE8C5954AEBD094C3ACC24A9)] | [added: | [20](#ia2336518dd464ee3ac72696b3d6a377a_25) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#sCD0B13623AE850C99E9B69CD6AB28DB8)] [added: Disclosures](#ia2336518dd464ee3ac72696b3d6a377a_28)] | [removed: [21](#sCD0B13623AE850C99E9B69CD6AB28DB8)] | [added: | [20](#ia2336518dd464ee3ac72696b3d6a377a_28) | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sB514019AC5F6557AA781261D0EF7116A)] [added: Securities](#ia2336518dd464ee3ac72696b3d6a377a_37)] | [removed: [23](#sB514019AC5F6557AA781261D0EF7116A)] | [added: | [22](#ia2336518dd464ee3ac72696b3d6a377a_37) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#sB8A66AC93FDB5EA7B632EBE78B930CAC)] [added: Data](#ia2336518dd464ee3ac72696b3d6a377a_4947802327236)] | [removed: [25](#sB8A66AC93FDB5EA7B632EBE78B930CAC)] | [added: | [23](#ia2336518dd464ee3ac72696b3d6a377a_4947802327236) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sC283F724F6E85AC7B6F60C2B5B47593E)] [added: Operations](#ia2336518dd464ee3ac72696b3d6a377a_43)] | [removed: [27](#sC283F724F6E85AC7B6F60C2B5B47593E)] | [added: | [24](#ia2336518dd464ee3ac72696b3d6a377a_43) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s9B1D0F23359A5E4CA25575C424CD01D0)] [added: Risk](#ia2336518dd464ee3ac72696b3d6a377a_73)] | [removed: [45](#s9B1D0F23359A5E4CA25575C424CD01D0)] | [added: | [41](#ia2336518dd464ee3ac72696b3d6a377a_73) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sF52F798B45B15AC18776517C633D5E40)] [added: Data](#ia2336518dd464ee3ac72696b3d6a377a_76)] | [removed: [47](#sF52F798B45B15AC18776517C633D5E40)] | [added: | [43](#ia2336518dd464ee3ac72696b3d6a377a_76) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#sAE35131995EE530DA85BA7AF5E998E01)] [added: Disclosure](#ia2336518dd464ee3ac72696b3d6a377a_208)] | [removed: [90](#sAE35131995EE530DA85BA7AF5E998E01)] | [added: | [83](#ia2336518dd464ee3ac72696b3d6a377a_208) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s54B8C0C1CB99575280392A54D15B99CC)] [added: Procedures](#ia2336518dd464ee3ac72696b3d6a377a_211)] | [removed: [91](#s54B8C0C1CB99575280392A54D15B99CC)] | [added: | [83](#ia2336518dd464ee3ac72696b3d6a377a_211) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s36A6B51A26E155D6AC97619A2C9038C5)] [added: Information](#ia2336518dd464ee3ac72696b3d6a377a_214)] | [removed: [91](#s36A6B51A26E155D6AC97619A2C9038C5)] | [added: | [84](#ia2336518dd464ee3ac72696b3d6a377a_214) | | |]

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [PART I](#ia2336518dd464ee3ac72696b3d6a377a_10) | | | | | | | | |

| | | | | | | | | |

| [PART II](#ia2336518dd464ee3ac72696b3d6a377a_34) | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| [PART IV](#ia2336518dd464ee3ac72696b3d6a377a_235) | | | | | | | | |

| | | | |

| --- | --- | --- | --- |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | |

| --- | --- | --- |

| [PART I](#s69E29989EEA052A78DB97BFE63CDF403) | | |

| [PART II](#s141E50D1BA3354D88DACC61A0FCBDCBB) | | |

| [PART IV](#s3586896C1BC9565B83486956F3C65557) | | |

The following table summarizes our domestic production properties as of October [removed: 3, 2020:][added: 2, 2021:]

| | [added: | |] Number of Facilities(1) | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| | [added: | |] Owned | | | [added: | | |] Leased | | | [added: | | |] Total | | | [added: | | |] Capacity(2) | | [added: | | | |] Average Capacity Utilization | | [added: |]

| Beef Segment Production Facilities | [removed: 12] | | [added: 14] | [added: | | | | |] — | | | [removed: 12] | | | [added: 14 | | | | | |] 155,000 head | | [removed: 77] | [added: | | | 78 | |] % |

| Pork Segment Production Facilities | [added: | |] 7 | | | [added: | | |] — | | | [added: | | |] 7 | | | [removed: 461,000] [added: | | | 469,000] head | | [removed: 90] | [added: | | | 88 | |] % |

| Chicken Segment Operation Facilities | [removed: 177] | | [added: 178] | [added: | | | | |] 8 | | | [removed: 185] | | | [removed: 45] [added: 186 | | | | | | 47] million head | | [removed: 84] | [added: | | | 79 | |] % |

| Prepared Foods [added: Segment] Operation Facilities | [removed: 35] | | [added: 34] | [added: | | | | |] — | | | [removed: 35] | | | [removed: 74] [added: 34 | | | | | | 73] million pounds | | [removed: 81] | [added: | | | 79 | |] % |

[removed: | (1) | Certain facilities produce products that are reported in multiple segments.] For presentation purposes, facilities are reflected in the segment that had the majority of the facility’s production. [removed: Additionally, livestock grower farms are excluded. |]

[removed: | (2) | Capacity] [added: (2)Capacity] per week is based on the following: Beef and Pork (six day week) and Chicken and Prepared Foods (five day week). [removed: Average capacity utilization is based on capacity available throughout the year. |]

[removed: Beef:] Beef facilities include various phases of harvesting live cattle and fabricating beef products and specialty products.

The Beef segment includes [removed: three] [added: five] case-ready operations that share facilities with the Pork segment.

[removed: Pork:] Pork facilities include various phases of harvesting live hogs and fabricating pork products and specialty products.

The Pork segment includes [removed: three] [added: five] case-ready operations that share facilities with and are included in the Beef segment in the table above.

[removed: Chicken:] Our vertically-integrated Chicken operations facilities include processing facilities, rendering facilities, blending mills, feed mills, grain elevators and broiler hatcheries.

[removed: Prepared Foods:] Our Prepared Foods segment includes processing facilities and a vertically-integrated turkey operation.

The Prepared Foods segment includes [removed: two] [added: one] processing [removed: facilities] [added: facility] that [removed: share facilities] [added: is shared] with and [removed: are] [added: is] included in the Chicken segment in the table above.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1)Certain facilities produce products that are reported in multiple segments.

Additionally, livestock grower farms are excluded.

Average capacity utilization is based on capacity available throughout the year.

Beef

Pork

Chicken

Prepared Foods

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | |

| --- | --- |

The name, title, age (as of October [removed: 3, 2020)] [added: 2, 2021)] and calendar year of initial election to executive office of our executive officers are listed below:

| Name | | [added: | | | |] Title | | [added: | | | |] Age | | [added: | | | |] Year Elected Executive Officer | [added: | |]

| John H. Tyson | | [added: | | | |] Chairman of the Board of Directors | | [removed: 67] | | [added: | | 68 | | | | | |] 2011 | [added: | |]

| [removed: Dean Banks] [added: Johanna Söderström] | | [added: | | | | Executive Vice] President and Chief [removed: Executive] [added: People] Officer | | [removed: 47] | | [added: | | 50 | | | | | |] 2020 | [added: | |]

| Stewart Glendinning | | [added: | | | |] Executive Vice President and Chief Financial Officer | | [removed: 55] | | [added: | | 56 | | | | | |] 2017 | [added: | |]

| Donnie King | | [removed: Group] [added: | | | |] President [removed: Poultry] [added: and Chief Executive Officer] | | [removed: 58] | | [added: | | 59 | | | | | |] 2019 | [added: | |]

| Chris Langholz | | [added: | | | | Group] President International | | [removed: 57] | | [added: | | 58 | | | | | |] 2020 | [added: | |]

| Noelle O'Mara | | [added: | | | |] Group President Prepared Foods | | [removed: 41] | | [added: | | 42 | | | | | |] 2019 | [added: | |]

| Scott [removed: Rouse] [added: Spradley] | | [added: | | | |] Executive Vice President and Chief [removed: Customer] [added: Technology and Automation] Officer | | [removed: 57] | | [added: | | 56 | | | | | |] 2017 | [added: | |]

[removed: |] Johanna Söderström [removed: | |] [added: was appointed] Executive Vice President and Chief [added: People Officer in October 2021 after serving as Executive Vice President and Chief] Human Resources Officer [removed: | | 49 | | 2020 |][added: since July 2020.]

[removed: |] Scott Spradley [removed: | |] [added: was appointed] Executive Vice President and Chief Technology [added: and Automation] Officer [removed: | | 55 | | 2017 |][added: in October 2021 after serving as Executive Vice President and Chief Technology Officer since 2017.]

| [removed: Stephen Stouffer] [added: Shane Miller] | | [added: | | | |] Group President Fresh Meats | | [removed: 60] | | [removed: 2013] | [added: | 52 | | | | | | 2021 | | |]

| Phillip Thomas | | [added: | | | |] Vice President, Controller and Chief Accounting Officer | | [removed: 45] | | [added: | | 46 | | | | | |] 2020 | [added: | |]

| John R. Tyson | | [added: | | | | Executive Vice President, Strategy and] Chief Sustainability Officer | | [removed: 30] | | [added: | | 31 | | | | | |] 2019 | [added: | |]

Donnie King was appointed [removed: Group President, Poultry] [added: President and Chief Executive Officer] in [removed: September 2020] [added: June 2021] after serving as [removed: Group President, International and] Chief [removed: Administration] [added: Operating] Officer since February [removed: 2019] [added: 2021] and [removed: as] Group [removed: President, International] [added: President Poultry] since [removed: January 2019.][added: September 2020.]

Chris Langholz was appointed [added: Group] President, International in [added: October 2021 after serving as President, International since] February 2020.

Noelle O'Mara was appointed Group President, Prepared Foods in August [removed: 2019,] [added: 2019] after serving as Chief Marketing Officer since April 2019, having previously served as General Manager and Senior Vice President, Tyson Brands Deli and Innovation since 2018, Senior Vice President and General Manager Jimmy Dean Brands since 2017 and Vice President, Emerging Brands Innovation since joining the company in 2016.

Amy Tu was appointed Executive Vice President and [added: Chief Legal Officer and Secretary, Global Governance and Corporate Affairs in October 2021 after serving as Executive Vice President,] General Counsel [removed: in] [added: and Secretary since November 2020 and Executive Vice President and General Counsel since] December 2017.

Tyson was appointed [added: Executive Vice President, Strategy and] Chief Sustainability Officer in [removed: September 2019,] [added: October 2021] after serving as [added: Chief Sustainability Officer since September 2019, and] Director, Office of the Chief Executive Officer since May 2019.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| David Bray | | | | | | Group President Poultry | | | | | | 52 | | | | | | 2021 | | |

| Jason Nichol | | | | | | Chief Customer Officer | | | | | | 49 | | | | | | 2021 | | |

| Amy Tu | | | | | | Executive Vice President, Chief Legal Officer and Secretary, Global Governance and Corporate Affairs | | | | | | 54 | | | | | | 2017 | | |

David Bray was appointed Group President Poultry in June 2021 after serving as Senior Vice President, Retail Poultry and Case Ready Meats since August 2020 and as Senior Vice President, Grocery from April 2017 to July 2020.

Mr. Bray previously served as Vice President, Grocery Sales from September 2014 to April 2017 and as Vice President, Consumer Product Customer Development from March 2011 to September 2014.

Mr. Bray was employed at Kraft Foods Group prior to joining the Company.

Mr. King served as Group President, International and Chief Administration Officer from February 2019 to September 2020 in addition to the role of Group President, International from January 2019 to February 2020.

Shane Miller was appointed Group President, Fresh Meats in February 2021 after serving as Chief Operating Officer, Fresh Meats since October 2020.

Mr. Miller previously served as Senior Vice President and General Manager, Beef Enterprise from January 2019 to October 2020, Senior Vice President, General Manager, Value Added & Case Ready from February 2018 to January 2019, Senior Vice President, Pork from July 2015 to February 2018 and Senior Vice President, Pork Margin Management from May 2013 to July 2015.

Mr. Miller has held numerous other management and leadership roles since joining the Company in 2002.

Jason Nichol was appointed Chief Customer Officer in February 2021 after serving as Senior Vice President, Walmart since March 2016 and as Vice President, Walmart from his initial employment by the Company in April 2015 to February 2016.

Mr. Nichol was employed by Nabisco, Cott Beverages and Scotts Miracle-Gro prior to joining the Company.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Noel White | | Executive Vice Chairman of the Board of Directors | | 62 | | 2009 |

| Doug Ramsey | | President Global McDonald's Business | | 51 | | 2017 |

| Amy Tu | | Executive Vice President and General Counsel | | 53 | | 2017 |

| Justin Whitmore | | Executive Vice President Alternative Proteins | | 38 | | 2017 |

Noel White was appointed to Executive Vice Chairman of the Board of Directors effective October 3, 2020, after serving as President and Chief Executive Officer since 2018, serving as Group President, Fresh Meats and International and Chief Operations Officer, each in 2017, President, Poultry since 2013, and Senior Group Vice President, Fresh Meats since 2009.

Mr. White was initially employed by IBP, inc. ("IBP") in 1983.

IBP was acquired by the Company in 2001.

Dean Banks was appointed President and Chief Executive Officer, effective as of October 3, 2020.

Mr. Banks has served as President of the Company since December 20, 2019.

Prior to joining the Company as President, Mr. Banks was a Project Lead and on the Leadership Team at X (formerly Google \[x\]), an Alphabet Inc. company, prior to which he was a managing partner and interim CEO at SEED Ventures since 2015.

He has also previously served in leadership and consulting roles with IntraCelluar Technologies, now Vergent Bioscience, where he remains a board member; Cleveland Clinic Innovations and the Ohio Orthopedic Commercialization Center; OrthoHelix (acquired by Tornier, Inc.); Connective Orthopaedics; Highland Capital Partners, Cytyc Corporation (acquired by Hologic), and Ethicon Endo-Surgery, a Johnson & Johnson company.

Doug Ramsey was appointed Group President, Global McDonald's Business in January 2019, after serving as Group President, Poultry since 2017.

Mr. Ramsey previously served as Senior Vice President, Big Bird/Fowl since 2014, and Senior Vice President and GM Value-Added since 2011.

Mr. Ramsey was initially employed by the Company in 1992.

Scott Rouse was appointed Executive Vice President and Chief Customer Officer in 2014, after serving as Senior Vice President, Customer Development since 2006.

Mr. Rouse was initially employed by the Company in 2004.

Johanna Söderström was appointed Executive Vice President and Chief Human Resources Officer in July 2020.

Scott Spradley was appointed Executive Vice President and Chief Technology Officer in 2017.

Stephen R.

Stouffer was appointed Group President, Fresh Meats in October 2018, after serving as President, Fresh Meats since 2013, and Senior Vice President, Beef Margin Management since 2012.

Mr. Stouffer was initially employed by IBP in 1982.

He is also a lecturer at the Sam M.

Walton School of Business at the University of Arkansas.

Justin Whitmore was appointed Executive Vice President, Alternative Proteins in February 2019, after serving as our Chief Sustainability Officer since his initial employment with the Company in May 2017, where he also served as Executive Vice President, Continuous Improvement since 2018, after serving as Executive Vice President, Corporate Strategy since December 2017, and Senior Vice President Corporate Strategy since August 2017.

Prior to joining the Company, Mr Whitmore was employed by McKinsey & Company since 2014.

As of October [removed: 31, 2020,] [added: 30, 2021,] there were approximately [removed: 22,000] [added: 23,000] holders of record of our Class A stock and six holders of record of our Class B stock.

In fiscal [removed: 2020,] [added: 2021,] the annual dividend rate for Class A stock was [removed: $1.68] [added: $1.78] per share and the annual dividend rate for Class B stock was [removed: $1.51] [added: $1.60] per share.

Effective November [removed: 13, 2020,] [added: 12, 2021,] the Board of Directors increased the quarterly dividend previously declared on August [removed: 6, 2020,] [added: 12, 2021,] to [removed: $0.445] [added: $0.46] per share on our Class A common stock and [removed: $0.4005] [added: $0.414] per share on our Class B common stock.

The increased quarterly dividend is payable on December 15, [removed: 2020,] [added: 2021,] to shareholders of record at the close of business on December 1, [removed: 2020.][added: 2021.]

The Board also declared a quarterly dividend of [removed: $0.445] [added: $0.46] per share on our Class A common stock and [removed: $0.4005] [added: $0.414] per share on our Class B common stock, payable on March 15, [removed: 2021,] [added: 2022,] to shareholders of record at the close of business on March 1, [removed: 2021.][added: 2022.]

We anticipate the remaining quarterly dividends in fiscal [removed: 2021] [added: 2022] will be [removed: $0.445] [added: $0.46] and [removed: $0.4005] [added: $0.414] per share of our Class A and Class B stock, respectively.

This results in an annual dividend rate in fiscal [removed: 2021] [added: 2022] of [removed: $1.78] [added: $1.84] for Class A shares and [removed: $1.602] [added: $1.656] for Class B shares, or a [removed: 6%] [added: 3%] increase compared to the fiscal [removed: 2020] [added: 2021] annual dividend rate.

| Period | [added: | |] Total Number of Shares Purchased [added: (2)] | | | [removed: Average Price Paid per] [added: | | | Average Price Paid per] Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) | | | [added: | | |] Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) | | [added: |]

[removed: | (1) | On] [added: (1)On] February 7, 2003, [removed: we announced] our Board of Directors approved a program to repurchase up to 25 million shares of Class A common stock from time to time in open market or privately negotiated transactions. [removed: On May 3, 2012, our Board of Directors approved an increase of 35 million shares, on January 30, 2014, our Board of Directors approved an increase of 25 million shares and, on February 4, 2016, our Board of Directors approved an increase of 50 million shares under the program. The program has no fixed or scheduled termination date. |]

[removed: | (2) | We] [added: (2)We] purchased [removed: 123,980] [added: 215,951] shares during the period that were not made pursuant to our previously announced stock repurchase [removed: program,] [added: program] but were purchased to fund certain Company obligations under our equity compensation plans. [removed: These transactions included 121,048 shares purchased in open market transactions and 2,932 shares withheld to cover required tax withholdings on the vesting of restricted stock. |]

[removed: | (3) | Shares] [added: (3)Shares] purchased during the period pursuant to our previously announced stock repurchase program. [removed: |]

[removed: ][added: ]

| | [added: | | | | | | | |] Fiscal Years Ended | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

The total cumulative return on investment (change in the year-end stock price plus reinvested dividends), which is based on the stock price or composite index at the end of fiscal [removed: 2015,] [added: 2016,] is presented for each of the periods for the Company, the S&P 500 Index and our peer group.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Jul. 4, 2021 to Jul. 31, 2021 | | | 49,469 | | | | | | $ | 72.62 | | — | | | | | | 18,851,028 | | |

| Aug. 1, 2021 to Sept. 4, 2021 | | | 135,762 | | | | | | 78.42 | | | — | | | | | | 18,851,028 | | |

| Sept. 5, 2021 to Oct. 2, 2021 | | | 30,720 | | | | | | 76.43 | | | — | | | | | | 18,851,028 | | |

| Total | | | 215,951 | | | | | | $ | 76.81 | | — | | | | | | 18,851,028 | | |

On May 3, 2012, our Board of Directors approved an increase of 35 million shares, on January 30, 2014, our Board of Directors approved an increase of 25 million shares and on February 4, 2016, our Board of Directors approved an increase of 50 million shares under the program.

The program has no fixed or scheduled termination date.

These transactions included 209,579 shares purchased in open market transactions and 6,372 shares withheld to cover required tax withholdings on the vesting of restricted stock.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | 10/1/16 | | | | | | 9/30/17 | | | | | | 9/29/18 | | | | | | 9/28/19 | | | | | | 10/3/20 | | | | | | 10/2/21 | | |

| Tyson Foods, Inc. | | | | | | | | | $ | 100.00 | | | | | $ | 95.76 | | | | | $ | 82.30 | | | | | $ | 120.34 | | | | | $ | 85.83 | | | | | $ | 116.14 | |

| S&P 500 Index | | | | | | | | | 100.00 | | | | | | 118.62 | | | | | | 139.85 | | | | | | 144.25 | | | | | | 166.22 | | | | | | 219.48 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Peer Group | | | | | | | | | 100.00 | | | | | | 99.69 | | | | | | 101.00 | | | | | | 118.35 | | | | | | 121.64 | | | | | | 136.07 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Jun. 28, 2020 to July 25, 2020 | 36,636 | | | $ | 59.14 | | — | | | 18,851,028 | |

| Jul. 26, 2020 to Aug. 29, 2020 | 56,130 | | | 62.75 | | | — | | | 18,851,028 | |

| Aug. 30, 2020 to Oct. 3, 2020 | 31,214 | | | 62.78 | | | — | | | 18,851,028 | |

| Total | 123,980 | | (2) | $ | 61.69 | | — | | | 18,851,028 | |

| | |

| --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 10/3/15 | | | | 10/1/16 | | | | 9/30/17 | | | | 9/29/18 | | | | 9/28/19 | | | | 10/3/20 | | |

| Tyson Foods, Inc. | $ | 100.00 | | | $ | 169.83 | | | $ | 162.63 | | | $ | 139.76 | | | $ | 204.38 | | | $ | 145.76 | |

| S&P 500 Index | 100.00 | | | | 115.43 | | | | 136.92 | | | | 161.43 | | | | 166.51 | | | | 191.87 | | |

| Peer Group | 100.00 | | | | 113.16 | | | | 112.81 | | | | 114.29 | | | | 133.93 | | | | 137.65 | | |

Not applicable.

FIVE-YEAR FINANCIAL SUMMARY

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| in millions, except per share, percentage and ratio data | | | | | | | | | | | | | | | | | | | |

| | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

| Summary of Operations | | | | | | | | | | | | | | | | | | | |

| Sales | $ | 43,185 | | | $ | 42,405 | | | $ | 40,052 | | | $ | 38,260 | | | $ | 36,881 | |

| Operating income | 3,114 | | | | 2,827 | | | | 3,032 | | | | 2,921 | | | | 2,805 | | |

| Net interest expense | 475 | | | | 451 | | | | 343 | | | | 272 | | | | 243 | | |

| Net income | 2,150 | | | | 2,035 | | | | 3,027 | | | | 1,778 | | | | 1,772 | | |

| Net income attributable to Tyson | 2,140 | | | | 2,022 | | | | 3,024 | | | | 1,774 | | | | 1,768 | | |

| Diluted net income per share attributable to Tyson: | | | | | | | | | | | | | | | | | | | |

| Net income | 5.86 | | | | 5.52 | | | | 8.19 | | | | 4.79 | | | | 4.53 | | |

| Dividends declared per share: | | | | | | | | | | | | | | | | | | | |

| Class A | 1.725 | | | | 1.575 | | | | 1.275 | | | | 0.975 | | | | 0.650 | | |

| Class B | 1.553 | | | | 1.418 | | | | 1.148 | | | | 0.878 | | | | 0.585 | | |

| Balance Sheet Data | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | $ | 1,420 | | | $ | 484 | | | $ | 270 | | | $ | 318 | | | $ | 349 | |

| Total assets | 34,741 | | | | 33,097 | | | | 29,109 | | | | 28,066 | | | | 22,373 | | |

| Total gross debt | 11,339 | | | | 11,932 | | | | 9,873 | | | | 10,203 | | | | 6,279 | | |

| Shareholders’ equity | 15,597 | | | | 14,226 | | | | 12,811 | | | | 10,559 | | | | 9,624 | | |

| Other Key Financial Measures | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | $ | 1,192 | | | $ | 1,098 | | | $ | 943 | | | $ | 761 | | | $ | 705 | |

| Capital expenditures | 1,199 | | | | 1,259 | | | | 1,200 | | | | 1,069 | | | | 695 | | |

| EBITDA | 4,423 | | | | 3,968 | | | | 4,021 | | | | 3,648 | | | | 3,538 | | |

| Return on invested capital | 12.2 | | % | | 11.8 | | % | | 14.1 | | % | | 16.2 | | % | | 17.9 | | % |

| Effective tax rate | 22.4 | | % | | 16.3 | | % | | (10.3 | | )% | | 32.3 | | % | | 31.8 | | % |

| Total debt to capitalization | 42.1 | | % | | 45.6 | | % | | 43.5 | | % | | 49.1 | | % | | 39.5 | | % |

| Book value per share | $ | 42.83 | | | $ | 38.95 | | | $ | 35.09 | | | $ | 28.72 | | | $ | 25.67 | |

Notes to Five-Year Financial Summary

| | |

| --- | --- |

| a. | Fiscal 2020 net income included $116 million pretax gain from pension plan terminations, $75 million pretax restructuring and related charges and $65 million pretax income related to our accounting cycle resulting in a 53-week year in fiscal 2020. Additionally, in fiscal 2020, we adopted new guidance for leasing arrangements using the optional transition method, where prior periods were not restated. For further description, refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 2: Changes in Accounting Principles. |

| b. | Fiscal 2019 net income included $105 million post tax income related to the recognition of previously unrecognized tax benefit, $55 million pretax gain on sale of an investment, $37 million pretax Keystone Foods purchase accounting and acquisition related costs, $41 million pretax impairment charge related to the planned divestiture of a business, $31 million pretax Beef production facility fire costs, $15 million pretax pension plan termination charge and $41 million pretax restructuring and related charges. Additionally, in fiscal 2019, we adopted accounting guidance related to net periodic pension and postretirement benefits. Accordingly, we retrospectively reduced prior periods operating income. |

| c. | Fiscal 2018 net income included $1,003 million post-tax recognition of tax benefit from remeasurement of net deferred tax liabilities at lower enacted tax rates, $109 million pretax one-time cash bonus to our hourly frontline team members, $68 million pretax impairment charge net of a realized gain related to the divestiture of non-protein businesses and $59 million pretax restructuring and related charges. |

| d. | Fiscal 2017 net income included $103 million pretax expense of AdvancePierre purchase accounting and acquisition related costs, pretax impairment charges of $52 million related to our San Diego Prepared Foods operation, $45 million related to the expected sale of a non-protein business and pretax restructuring and related charges of $150 million. |

| e. | Fiscal 2016 net income included $53 million post tax related to the recognition of previously unrecognized tax benefits and audit settlements. In fiscal 2016, we adopted new accounting guidance, retrospectively, requiring classification of debt issuance costs as a reduction of the carrying value of the debt. In doing so, $29 million of deferred issuance costs were reclassified from Other Assets to Long-Term Debt in our Consolidated Balance Sheets for fiscal 2016. This change is reflected above in total assets, total debt, total debt to capitalization and return on invested capital ratios. |

| f. | Return on invested capital is calculated by dividing operating income by the sum of the average of beginning and ending total debt and shareholders’ equity less cash and cash equivalents. |

| g. | For the total debt to capitalization calculation, capitalization is defined as total debt plus total shareholders’ equity. |

| h. | Book value per share is calculated by dividing shareholders’ equity by the sum of Class A and B shares outstanding and for fiscal 2016, the remaining minimum shares that were to be issued from our tangible equity units each period. |

| | [added: | |] Three years ended October [removed: 3, 2020] [added: 2, 2021] | | | | | | | | | | | [added: | | | |]

| | [added: | |] in millions, except per share data | | | | | | | | | | | [added: | | | |]

| | [removed: 2020] | | [added: 2021] | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | [added: | | | 2019 | | |]

| Sales | [added: | |] $ | [removed: 43,185] [added: 47,049] | | | [added: | |] $ | [removed: 42,405] [added: 43,185] | | | [added: | |] $ | [removed: 40,052] [added: 42,405] | |

| Cost of Sales | [removed: 37,801] | | [added: 40,523] | | [removed: 37,383] | | | | [removed: 34,956] [added: 37,801] | | | [added: | | | 37,383 | | |]

| Gross Profit | [removed: 5,384] | | [added: 6,526] | | [removed: 5,022] | | | | [removed: 5,096] [added: 5,384] | | | [added: | | | 5,022 | | |]

| Selling, General and Administrative | [removed: 2,270] | | [added: 2,130] | | [removed: 2,195] | | | | [removed: 2,064] [added: 2,376] | | | [added: | | | 2,252 | | |]

| Other (Income) Expense: | | | | | | | | | | | | [added: | | | | | |]

| Interest income | [removed: (10] | | [removed: )] [added: (8)] | | [removed: (11] | | [removed: )] | | [removed: (7] [added: (10)] | | [removed: )] | [added: | | | (11) | | |]

| Interest expense | [removed: 485] | | [added: 428] | | [removed: 462] | | | | [removed: 350] [added: 485] | | | [added: | | | 462 | | |]

| Other, net | [removed: (131] | | [removed: )] [added: (65)] | | [removed: (55] | | [removed: )] | | [removed: (56] [added: (131)] | | [removed: )] | [added: | | | (55) | | |]

| Total Other (Income) Expense | [removed: 344] | | [added: 355] | | [removed: 396] | | | | [removed: 287] [added: 344] | | | [added: | | | 396 | | |]

| Income before Income Taxes | [removed: 2,770] | | | | [removed: 2,431] | | | | [removed: 2,745] | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,041 | | |]

| Less: Net Income Attributable to Noncontrolling Interests | [removed: 10] | | [added: 13] | | [removed: 13] | | | | [removed: 3] [added: 10] | | | [added: | | | 13 | | |]

| Net Income [added: Per Share] Attributable to [removed: Tyson] [added: Tyson:] | [removed: $] | [removed: 2,140] | | | [removed: $] | [removed: 2,022] | | | [removed: $] | [removed: 3,024] | | [added: | | | | | |]

| Weighted Average Shares Outstanding: | | | | | | | | | | | | [added: | | | | | |]

| Class A Basic | [added: | |] 293 | | | | [added: | |] 293 | | | | [removed: 295] | | [added: 293] | [added: | |]

| Class B Basic | [added: | |] 70 | | | | [added: | |] 70 | | | | [added: | |] 70 | | |

| Diluted | [added: | |] 365 | | | | [removed: 366] | | [added: 365] | | [removed: 369] | | | [added: | 366 | | |]

| Net Income Per Share Attributable to Tyson: | | | | | | | | | | | | [added: | | | | | |]

| | [added: | |] in millions | | | | | | | | | | | [added: | | | |]

| Other Comprehensive Income (Loss), Net of Taxes: | | | | | | | | | | | | [added: | | | | | |]

| Derivatives accounted for as cash flow hedges | [removed: 9] | | [added: 2] | | [removed: (15] | | [removed: )] | | [removed: (7] [added: 9] | | [removed: )] | [added: | | | (15) | | |]

| Investments | [removed: 1] | | [added: (1)] | | [removed: 2] | | | | [removed: (1] [added: 1] | | [removed: )] | [added: | | | 2 | | |]

| Currency translation | [removed: (29] | | [removed: )] [added: 17] | | [removed: (23] | | [removed: )] | | [removed: (29] [added: (29)] | | [removed: )] | [added: | | | (23) | | |]

| Postretirement benefits | [removed: (43] | | [removed: )] [added: (11)] | | [removed: (66] | | [removed: )] | | [removed: (7] [added: (43)] | | [removed: )] | [added: | | | (66) | | |]

| Total Other Comprehensive Income (Loss), Net of Taxes | [removed: (62] | | [removed: )] [added: 7] | | [removed: (102] | | [removed: )] | | [removed: (44] [added: (62)] | | [removed: )] | [added: | | | (102) | | |]

| Less: Comprehensive Income Attributable to Noncontrolling Interests | [removed: 10] | | [added: 13] | | [removed: 13] | | | | [removed: 3] [added: 10] | | | [added: | | | 13 | | |]

| Comprehensive Income Attributable to Tyson | [added: | |] $ | [removed: 2,078] [added: 3,054] | | | [added: | |] $ | [removed: 1,920] [added: 1,999] | | | [added: | |] $ | [removed: 2,980] [added: 1,878] | |

| [added: | | | | | |] October [added: 2, 2021 | | | | | | | | | | | | October] 3, [removed: 2020, and] [added: 2020 | | | | | | | | | | | |] September 28, 2019 | | | | | | | | [added: |]

| in millions, except share and per share data | | | | | | | | [added: | | | |]

| | [added: | | 2021 | | | | | |] 2020 | | | | [added: | |] 2019 | | |

| Assets | | | | | | | | [added: | | | |]

| Current Assets: | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 1,420] [added: 2,507] | | | [added: | |] $ | [removed: 484] [added: 1,420] | |

| Accounts receivable, net | [removed: 1,952] | | [added: 2,400] | | [removed: 2,173] | | | [added: | 1,952 | | |]

| Other current assets | [removed: 367] | | [added: 533] | | [removed: 404] | | | [added: | 367 | | |]

| Total Current Assets | [removed: 7,883] | | [added: 9,822] | | [removed: 7,169] | | | [added: | 7,598 | | |]

| Net Property, Plant and Equipment | [removed: 7,596] | | [added: 7,837] | | [removed: 7,282] | | | [added: | 7,596 | | |]

| Goodwill | [removed: 10,899] | | [added: 10,549] | | [removed: 10,844] | | | [added: | 10,899 | | |]

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Operating Income | | | 4,396 | | | | | | 3,008 | | | | | | 2,770 | | |

| Income Tax Expense | | | 981 | | | | | | 593 | | | | | | 381 | | |

| Net Income | | | 3,060 | | | | | | 2,071 | | | | | | 1,993 | | |

| Class A Basic | | | $ | 8.57 | | | | | $ | 5.79 | | | | | $ | 5.56 | |

| Class B Basic | | | $ | 7.70 | | | | | $ | 5.21 | | | | | $ | 4.99 | |

| Diluted | | | $ | 8.34 | | | | | $ | 5.64 | | | | | $ | 5.40 | |

See accompanying Notes to Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net Income | | | $ | 3,060 | | | | | $ | 2,071 | | | | | $ | 1,993 | |

| Comprehensive Income | | | 3,067 | | | | | | 2,009 | | | | | | 1,891 | | |

See accompanying Notes to Consolidated Financial Statements.

| October 2, 2021, and October 3, 2020 | | | | | | | | | | | |

| Inventories | | | 4,382 | | | | | | 3,859 | | |

| Total Assets | | | $ | 36,309 | | | | | $ | 34,456 | |

See accompanying Notes to Consolidated Financial Statements.

| | | | Three years ended October 2, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at beginning of year | | | | | | | | | 15,100 | | | | | | | | | | | | 13,655 | | | | | | | | | | | | 12,239 | | |

| Total Shareholders’ Equity | | | | | | | | | $ | 17,854 | | | | | | | | | | | $ | 15,386 | | | | | | | | | | | $ | 14,094 | |

See accompanying Notes to Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Three years ended October 2, 2021 | | | | | | | | | | | | | | |

| | | | in millions | | | | | | | | | | | | | | |

| Net income | | | $ | 3,060 | | | | | $ | 2,071 | | | | | $ | 1,993 | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

See accompanying Notes to Consolidated Financial Statements.

Description of Business

Consolidation

Fiscal Year

Cash and Cash Equivalents

| Operating Income | 3,114 | | | | 2,827 | | | | 3,032 | | |

| Income Tax Expense (Benefit) | 620 | | | | 396 | | | | (282 | | ) |

| Net Income | 2,150 | | | | 2,035 | | | | 3,027 | | |

| Class A Basic | $ | 6.02 | | | $ | 5.67 | | | $ | 8.44 | |

| Class B Basic | $ | 5.41 | | | $ | 5.10 | | | $ | 7.59 | |

| Diluted | $ | 5.86 | | | $ | 5.52 | | | $ | 8.19 | |

See accompanying notes.

| Net Income | $ | 2,150 | | | $ | 2,035 | | | $ | 3,027 | |

| Comprehensive Income | 2,088 | | | | 1,933 | | | | 2,983 | | |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Inventories | 4,144 | | | | 4,108 | | |

| Total Assets | $ | 34,741 | | | $ | 33,097 | |

| Balance at beginning of year | | | | 13,787 | | | | | | | 12,329 | | | | | | | 9,776 | | |

| Balance at end of year | | | | 15,311 | | | | | | | 13,787 | | | | | | | 12,329 | | |

| Reclass to Retained Earnings (1) | | | | — | | | | | | | — | | | | | | | 13 | | |

| Total Shareholders’ Equity | | | | $ | 15,597 | | | | | | $ | 14,226 | | | | | | $ | 12,811 | |

(1) Reclass from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("Tax Act"), following adoption of the applicable new accounting standard for the fiscal year ended September 29, 2018.

| Purchases of Tyson Class A common stock | (207 | | ) | | (252 | | ) | | (427 | | ) |

| Livestock | 1,262 | | | | 1,150 | | |

| Total inventory | $ | 4,144 | | | $ | 4,108 | |

Recognition, measurement and presentation of expenses and cash flows arising from a lease will depend on classification as a finance or operating lease.

| Other | 987 | | | | 865 | | |

Early adoption is permitted for periods for which financial statements have not yet been issued, beginning our fiscal 2020.

An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period.

The application of the guidance requires various transition methods depending on the specific amendment.

In August 2017, the FASB issued guidance that eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded from the assessment.

Some of the modifications included the ineffectiveness of derivative gain/loss in highly effective cash flow hedges to be recorded in Other Comprehensive Income, alignment of the recognition and presentation of the effects related to the hedging instrument and hedged item in the financial statements, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect of hedging on financial statement lines for components excluded from the assessment.

The amendment also simplified the application of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting.

The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020.

In February 2016, the FASB issued guidance that created new accounting and reporting guidelines for leasing arrangements.

The guidance requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months.

The guidance also requires qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases.

We adopted this guidance in the first quarter of fiscal 2020 using the optional transition method that allows for a cumulative-effect adjustment in the period of adoption with no restatement of prior periods.

We have elected the package of practical expedients available under the transition guidance which allows us to not reassess prior conclusions related to lease classifications, existing contracts containing leases, and initial direct costs, as well as the practical expedient that allows the continued historical treatment of land easements.

We did not elect the practical expedient for the use of hindsight in evaluating the expected lease term of existing leases.

The adoption resulted in the recording of operating lease assets and operating lease liabilities of $549 million and $546 million, respectively, as of September 29, 2019, with no changes to our finance leases.

The difference between the additional lease assets and lease liabilities, represents existing deferred rent and prepaid lease balances that were reclassified on the balance sheet.

The adoption did not have a material impact on our Consolidated Statements of Income or our Consolidated Statements of Cash Flows.

| | | | | |

An evaluation was performed, under the supervision and with the participation of management, including the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) [added: and 15d-15(e)] under the Securities Exchange Act of 1934, as amended (the "1934 Act")).

Based on that evaluation, the CEO and CFO concluded that, as of October [removed: 3, 2020,] [added: 2, 2021,] our disclosure controls and procedures were effective.

[removed: In the quarter ended October 3, 2020, there have been] [added: There were] no changes in the Company’s internal control over financial reporting [added: (as defined in Rules 13a-15(f) and 15d-15(f) under the 1934 Act) during the quarter ended October 2, 2021] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) [added: and 15d-15(f)] of the 1934 Act.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of October [removed: 3, 2020.][added: 2, 2021.]

Based on this evaluation under the framework in *Internal Control - Integrated Framework* (2013) issued by COSO, management concluded the Company’s internal control over financial reporting was effective as of October [removed: 3, 2020.][added: 2, 2021.]

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, who has audited the fiscal [removed: 2020] [added: 2021] financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of the Company’s internal control over financial reporting as of October [removed: 3, 2020] [added: 2, 2021] as stated in its report which appears in Part II, Item 8 of this Annual Report on Form 10-K.

Remediation of Previously Reported Material Weakness in Internal Control Over Financial Reporting