Tyson Foods 10-Q 2022-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2022

or

☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

001-14704

(Commission File Number)

______________________________________________

TYSON FOODS, INC.

(Exact name of registrant as specified in its charter)

______________________________________________

			Delaware									71-0225165
			(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
			2200 West Don Tyson Parkway,
			Springdale,			Arkansas						72762-6999
			(Address of Principal Executive Offices)									(Zip Code)
						(479)			290-4000
(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class									Trading Symbol			Name of Each Exchange on Which Registered
Class A Common Stock			Par Value			$0.10			TSN			New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer						☒						Accelerated Filer						☐
Non-Accelerated Filer						☐						Smaller Reporting Company						☐
												Emerging Growth Company						☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of December 31, 2022.

Class						Outstanding Shares
Class A Common Stock, $0.10 Par Value (Class A stock)						285,615,602
Class B Common Stock, $0.10 Par Value (Class B stock)						70,010,355

Class B stock is not listed for trading on any exchange or market system. However, Class B stock is convertible into Class A stock on a share-for-share basis.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

						PAGE
Item 1.			Financial Statements
			Consolidated Condensed Statements of Income for the Three Months Ended December 31, 2022 and January 1, 2022			1
			Consolidated Condensed Statements of Comprehensive Income for the Three Months Ended December 31, 2022 and January 1, 2022			2
			Consolidated Condensed Balance Sheets as of December 31, 2022, and October 1, 2022			3
			Consolidated Condensed Statements of Shareholders’ Equity for the Three Months Ended December 31, 2022 and January 1, 2022			4
			Consolidated Condensed Statements of Cash Flows for the Three Months Ended December 31, 2022 and January 1, 2022			5
			Notes to Consolidated Condensed Financial Statements			6
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			34
Item 4.			Controls and Procedures			36

PART II. OTHER INFORMATION

Item 1.			Legal Proceedings			37
Item 1A.			Risk Factors			37
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 3.			Defaults Upon Senior Securities			38
Item 4.			Mine Safety Disclosures			38
Item 5.			Other Information			38
Item 6.			Exhibits			39
SIGNATURES						40

PART I. FINANCIAL INFORMATION

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

			Three Months Ended
			December 31, 2022						January 1, 2022
Sales			$	13,260					$	12,933
Cost of Sales			12,292						10,918
Gross Profit			968						2,015
Selling, General and Administrative			501						560
Operating Income			467						1,455
Other (Income) Expense:
Interest income			(9)						(3)
Interest expense			84						100
Other, net			(42)						(52)
Total Other (Income) Expense			33						45
Income before Income Taxes			434						1,410
Income Tax Expense			114						284
Net Income			320						1,126
Less: Net Income Attributable to Noncontrolling Interests			4						5
Net Income Attributable to Tyson			$	316					$	1,121
Weighted Average Shares Outstanding:
Class A Basic			286						292
Class B Basic			70						70
Diluted			358						365
Net Income Per Share Attributable to Tyson:
Class A Basic			$	0.91					$	3.16
Class B Basic			$	0.81					$	2.84
Diluted			$	0.88					$	3.07

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

			Three Months Ended
			December 31, 2022						January 1, 2022
Net Income			$	320					$	1,126
Other Comprehensive Income (Loss), Net of Taxes:
Derivatives accounted for as cash flow hedges			1						—
Investments			—						(1)
Currency translation			81						(1)
Postretirement benefits			—						2
Total Other Comprehensive Income (Loss), Net of Taxes			82						—
Comprehensive Income			402						1,126
Less: Comprehensive Income Attributable to Noncontrolling Interests			4						5
Comprehensive Income Attributable to Tyson			$	398					$	1,121

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions, except share and per share data)

(Unaudited)

			December 31, 2022						October 1, 2022
Assets
Current Assets:
Cash and cash equivalents			$	654					$	1,031
Accounts receivable, net			2,295						2,577
Inventories			5,596						5,514
Other current assets			408						508
Total Current Assets			8,953						9,630
Net Property, Plant and Equipment			9,120						8,685
Goodwill			10,550						10,513
Intangible Assets, net			6,213						6,252
Other Assets			1,842						1,741
Total Assets			$	36,678					$	36,821
Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt			$	490					$	459
Accounts payable			2,530						2,483
Other current liabilities			2,094						2,371
Total Current Liabilities			5,114						5,313
Long-Term Debt			7,859						7,862
Deferred Income Taxes			2,473						2,458
Other Liabilities			1,445						1,377
Commitments and Contingencies (Note 15)
Shareholders’ Equity:
Common stock ($0.10 par value):
Class A-authorized 900 million shares, issued 378 million shares			38						38
Convertible Class B-authorized 900 million shares, issued 70 million shares			7						7
Capital in excess of par value			4,524						4,553
Retained earnings			20,225						20,084
Accumulated other comprehensive gain (loss)			(215)						(297)
Treasury stock, at cost – 92 million shares at December 31, 2022 and 88 million shares at October 1, 2022			(4,944)						(4,683)
Total Tyson Shareholders’ Equity			19,635						19,702
Noncontrolling Interests			152						109
Total Shareholders’ Equity			19,787						19,811
Total Liabilities and Shareholders’ Equity			$	36,678					$	36,821

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions)

(Unaudited)

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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 condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and within the Company’s Annual Report on Form 10-K filed for the fiscal year ended October 1, 2022. 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.

RESULTS OF OPERATIONS

Description of the Company

We are one of the world’s largest food companies and a recognized leader in protein. Founded in 1935 by John W. Tyson and grown under four generations of family leadership, the Company has a broad portfolio of products and brands like Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, Aidells®, ibp® and State Fair®. 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; availability of team members to operate our production facilities; and operating efficiencies of our facilities.

We operate in four reportable segments: Beef, Pork, Chicken, and Prepared Foods. We measure segment profit as operating income (loss). International/Other primarily includes our foreign operations in Australia, China, Malaysia, Mexico, the Netherlands, South Korea and Thailand, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Overview

General

Sales grew 3% in the first quarter of fiscal 2023 largely due to higher average sales prices and sales growth in our Chicken and Prepared Foods segments. The higher average sales prices were primarily due to the current inflationary environment and recovery of rapidly rising costs, such as labor, freight and transportation, livestock, feed ingredients and other input costs. Operating income of $467 million for the first quarter of fiscal 2023 was down 68% as we experienced lower operating income in our Beef, Pork and Chicken segments, partially offset by improved operating income in our Prepared Foods segment. In the first quarter of fiscal 2023, our operating income was impacted by $21 million of restructuring and related charges and benefited from $35 million of insurance proceeds related to fires at our production facilities, net of costs incurred. In the first quarter of fiscal 2022, our results were impacted by $23 million of insurance proceeds, net of costs, related to a fire at one of our Chicken segment production facilities.

Market Environment

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) was relatively flat in the first quarter of fiscal 2023 compared to the same period in fiscal 2022. All segments experienced inflation in operating costs, especially in labor, freight and transportation and certain materials, and we expect these trends to continue through fiscal 2023, though at a lower rate than experienced in fiscal 2022. Additionally, grain and feed ingredient costs have increased substantially, which impacts all of our segments. We pursue recovery of these increased costs through pricing. The Federal Reserve recently increased interest rates, and it is anticipated that interest rates will continue to rise in the near term. Our direct exposure to rising interest rates is somewhat tempered given our strong liquidity position in addition to our current debt structure in which nearly all of our borrowings have fixed interest rates. At December 31, 2022, we had $2.9 billion of liquidity and our current debt was $490 million. Should we need to issue additional debt or borrow under our existing revolving credit facility, we may be exposed to higher interest rates than our current outstanding borrowings. The Beef segment experienced sufficient supply of market-ready cattle and increased live cattle costs. The Pork segment experienced sufficient supply, despite herd health challenges in the industry, and increased live hog costs. The Chicken segment experienced increased feed ingredient and other input costs, in addition to excess domestic supply as a result of challenging export market conditions associated with avian influenza. The Prepared Foods segment experienced increased costs largely due to the impacts of an inflationary environment. Additionally, the conflict between Ukraine and Russia has led to economic sanctions against Russia and certain regions of Ukraine and Belarus. As of December 31, 2022, the impact of this conflict has not had a material direct impact on our financial performance. However, the conflict is still ongoing and there are many risks and uncertainties in relation to the conflict that are outside of our control. If the conflict escalates further or if additional countries join the conflict and additional economic sanctions are imposed, it could have a material impact on our business operations and financial performance.

COVID-19

We continue to proactively monitor and respond to the evolving nature of the COVID-19 pandemic and its impact to our global business. Our ongoing COVID-19 task force was 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 business. We have experienced and continue to experience multiple challenges related to the pandemic. The most significant challenge we face is the availability of team members to operate our production facilities as our production facilities continue to experience varying levels of absenteeism. The health and safety of our team members remains our top priority, and we continue to provide a variety of health and safety resources and services to team members and their family members. Additionally, we have experienced some challenges in our supply chain such as volatility of inputs, availability of shipping containers and port congestion. These challenges impacted our operating costs, but generally, we experienced lower direct incremental costs associated with COVID-19 in the first quarter of fiscal 2023 as compared to previous fiscal years. The long-term impacts of COVID-19 remain uncertain and will depend on future developments, including the duration and spread of the pandemic, COVID-19 variants and resurgences, and related actions taken by federal, state and local government officials to prevent and manage disease spread, and effectively distribute and administer vaccinations, all of which contain some level of uncertainty and cannot be easily predicted.

Margins

Our total operating margin was 3.5% in the first quarter of fiscal 2023. Operating margins by segment were as follows:

• Beef – 3.5%

• Pork – (1.4)%

• Chicken – 1.6%

• Prepared Foods – 10.2%

Strategy

Our strategy is to sustainably feed the world with the fastest growing protein brands. We intend to achieve our strategy as we: grow our business by delivering superior value to consumers and customers; deliver fuel for growth and returns through commercial, operational and financial excellence; and sustain our Company and our world for future generations.

Beginning in fiscal 2022, we launched 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. The execution of this program is supported by a program management office that ensures delivery of key project milestones and reports on savings achievements connected with the three pillars of the program. The first pillar is operational and functional excellence, which includes functional efficiency efforts in Finance, HR and Procurement focused on applying best practices to reduce costs. The second pillar is the use of new digital solutions like artificial intelligence and predictive analytics to drive efficiency in operations, supply chain planning, logistics and warehousing. The third pillar is automation, which will leverage automation and robotics technologies to automate difficult and higher turnover positions. We expect the productivity savings to be recognized in each of our reportable segments as they benefit from the achievements connected with the three pillars of the program. At this time, we do not anticipate costs associated with this program to be material and capital expenditures associated with automation and other activities are included in our capital expenditure expectations. We were targeting $1 billion in productivity savings by the end of fiscal 2024 relative to a fiscal 2021 cost baseline. We realized more than $700 million of productivity savings in fiscal 2022, which partially offset the impacts of inflationary market conditions, and we believe we will exceed our $1 billion target in fiscal 2023.

In the fourth quarter of fiscal 2022, the Company approved a restructuring program, the 2022 Program, which is expected to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies. In conjunction with the 2022 Program, the Company plans to bring together all its corporate team members from the Chicago, Downers Grove and Dakota Dunes area corporate locations to its world headquarters in Springdale, Arkansas, through a phased relocation commencing in early calendar year 2023. We recognized $21 million of pretax charges in the three months ended December 31, 2022 associated with the 2022 Program consisting of severance related costs, relocation and related costs, accelerated depreciation, contract and lease termination and professional and other fees. The Company currently anticipates the 2022 Program will result in cumulative pretax charges of approximately $274 million. The following tables set forth the pretax impact of restructuring and related charges in the Consolidated Condensed Statements of Income and the pretax impact by our reportable segments. For further description refer to Part I, Item 1, Notes to the Consolidated Condensed Financial Statements, Note 6: Restructuring and Related Charges (in millions).

			Three months ended
			December 31, 2022
Cost of Sales			$	8
Selling, General and Administrative			13
Total Restructuring and related charges, pretax			$	21

			Three months ended			2022 Program charges to date			Total estimated
			December 31, 2022			December 31, 2022			2022 Program charges
Beef			$	5		$	21		$	68
Pork			2			7			26
Chicken			1			7			8
Prepared Foods			8			44			158
International/Other			5			8			14
Total Restructuring and related charges, pretax			$	21		$	87		$	274

Summary of Results

Sales

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Sales			$	13,260					$	12,933
Change in sales volume			0.8		%
Change in average sales price			1.7		%
Sales growth			2.5		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales Volume** – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $105 million, driven by increased volumes in our Beef, Chicken and Prepared Foods segments partially offset by decreased volumes in our Pork segment as a result of balancing our supply with customer demand during a period of margin compression.

• Average Sales Price** – Sales were positively impacted by higher average sales prices in our Pork, Chicken and Prepared Foods segments, partially offset by lower average sales prices in our Beef segment, which accounted for an increase of $222 million. The increase in average sales price was primarily due to the current inflationary environment and recovery of rapidly rising costs.

Cost of Sales

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Cost of sales			$	12,292					$	10,918
Gross profit			968						2,015
Cost of sales as a percentage of sales			92.7		%				84.4		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Cost of sales increased $1,374 million. Higher sales volume increased cost of sales $89 million while higher input cost per pound increased cost of sales $1,285 million.

• The $1,285 million impact of higher input cost per pound was impacted by:

• Increase in live cattle costs of approximately $530 million in our Beef segment.

• Increase of approximately $175 million in our Chicken segment related to net increases in feed ingredient costs, growout expenses, partially offset by reduced outside meat purchases.

• Increase due to net derivative gains of $12 million in the first quarter of fiscal 2023, compared to net derivative gains of $78 million in the first quarter of fiscal 2022 due to our risk management activities. These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein.

• Increase in live hog costs of approximately $55 million in our Pork segment.

• Increase in raw material and other input costs of approximately $50 million in our Prepared Foods segment.

• Increase of $30 million in our Chicken segment due to $7 million of costs incurred, net of insurance proceeds, for the first quarter of fiscal 2023 compared to $23 million of insurance proceeds, net of costs incurred, in the first quarter of fiscal 2022 related to a fire at our production facility in the fourth quarter of fiscal 2021.

• Increase of $25 million related to inventory lower of cost or net realizable value adjustments.

• Increase in freight and transportation costs of approximately $25 million.

• Decrease of approximately $42 million in our Beef segment from insurance proceeds related to the fire at our production facility in the fourth quarter of fiscal 2019.

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

• The $89 million impact of increased sales volume was primarily driven by increased volumes in our Beef, Chicken and Prepared Foods segments.

Selling, General and Administrative

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Selling, general and administrative expense			$	501					$	560
As a percentage of sales			3.8		%				4.3		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Decrease of $59 million in selling, general and administrative was primarily driven by:

• Decrease of $56 million in employee costs primarily from incentive-based compensation.

• Decrease of $27 million in technology related costs.

• Decrease of $18 million in professional fees.

• Increase of $13 million in marketing, advertising and promotion expenses.

• Increase of $13 million in restructuring and related costs.

• Increase of $12 million in donations.

Interest Expense

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
			$	84					$	100

First quarter – Fiscal 2023 vs Fiscal 2022

• Interest expense primarily included interest expense related to our senior notes, in addition to commitment fees incurred on our revolving credit facility. The decrease in interest expense for the three months ended December 31, 2022 was primarily due to the redemption of senior notes in fiscal 2022.

Other (Income) Expense, net

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
			$	(42)					$	(52)

First quarter – Fiscal 2023

• Included $15 million of joint venture earnings and $25 million of foreign exchange gains in the first quarter of fiscal 2023.

First quarter – Fiscal 2022

• Included $22 million of production facilities fire insurance proceeds and a $30 million gain on an equity investment due to an observable price change.

Effective Tax Rate

			Three Months Ended
			December 31, 2022						January 1, 2022
			26.1		%				20.2		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Our effective income tax rate was 26.1% for the first quarter of fiscal 2023 compared to 20.2% for the same period of fiscal 2022. The effective tax rates for the first quarter of fiscal 2023 and 2022 were increased by state taxes. The effective tax rate for the first quarter of fiscal 2022 also included a $36 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the first quarter of fiscal 2022, and various other tax benefits.

Net Income Attributable to Tyson

in millions, except per share data			Three Months Ended
			December 31, 2022						January 1, 2022
Net income attributable to Tyson			$	316					$	1,121
Net income attributable to Tyson – per diluted share			0.88						3.07

First quarter – Fiscal 2023 – Net income attributable to Tyson included the following items:

• $35 million pretax, or $0.07 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $21 million pretax, or ($0.04) per diluted share, of restructuring and related charges.

First quarter – Fiscal 2022 – Net income attributable to Tyson included the following items:

• $45 million pretax, or $0.10 per diluted share, of production facilities fire insurance proceeds net of costs incurred.

• $36 million post tax, or $0.10 per diluted share, from remeasurement of net deferred tax liabilities at lower enacted state tax rates.

Segment Results

We operate in four segments: Beef, Pork, Chicken, and Prepared Foods. The following table is a summary of sales and operating income (loss), which is how we measure segment profit.

in millions			Sales
			Three Months Ended
			December 31, 2022						January 1, 2022
Beef			$	4,723					$	5,002
Pork			1,529						1,626
Chicken			4,263						3,890
Prepared Foods			2,538						2,333
International/Other			612						550
Intersegment sales			(405)						(468)
Total			$	13,260					$	12,933

in millions			Operating Income (Loss)
			Three Months Ended
			December 31, 2022						January 1, 2022
Beef			$	166					$	956
Pork			(21)						164
Chicken			69						140
Prepared Foods			258						186
International/Other			(5)						9
Total			$	467					$	1,455

Beef Segment Results

in millions			Three Months Ended
			December 31, 2022						January 1, 2022						Change
Sales			$	4,723					$	5,002					$	(279)
Sales volume change															2.9		%
Average sales price change															(8.5)		%
Operating income			$	166					$	956					$	(790)
Operating margin			3.5		%				19.1		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales Volume** - Sales volume increased driven by sufficient supply of live cattle and improved operational performance.

• Average Sales Price** - Average sales price decreased due to reduced export demand and softening domestic demand associated with increased supply of competing proteins in the market.

• Operating Income** - Operating income decreased as margins compressed from historically high levels, paired with continued increased operating costs as a result of the inflationary market environment. Additionally, operating income benefited from $42 million of insurance proceeds related to a fire at a production facility in the fourth quarter of fiscal 2019.

Pork Segment Results

in millions			Three Months Ended
			December 31, 2022						January 1, 2022						Change
Sales			$	1,529					$	1,626					$	(97)
Sales volume change															(7.4)		%
Average sales price change															1.4		%
Operating income (loss)			$	(21)					$	164					$	(185)
Operating margin			(1.4)		%				10.1		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales Volume** - Sales volume decreased as a result of balancing our supply with customer demand during a period of margin compression.

• Average Sales Price** - Average sales price increased primarily due to a shift to higher value specialty products.

• Operating Income (Loss)** - Operating income decreased due to compressed pork margins and increased operating costs as a result of the inflationary market environment. Additionally, volatile market conditions resulted in net derivative losses of $20 million in the first quarter of fiscal 2023 and net derivative gains of $15 million in the first quarter of fiscal 2022, which excludes the impacts of related physical purchase transactions.

Chicken Segment Results

in millions			Three Months Ended
			December 31, 2022						January 1, 2022						Change
Sales			$	4,263					$	3,890					$	373
Sales volume change															2.5		%
Average sales price change															7.1		%
Operating income			$	69					$	140					$	(71)
Operating margin			1.6		%				3.6		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales Volume** - Sales volume increased primarily due to improved domestic production partially offset by inventory growth and strategic initiative mix impacts.

• Average Sales Price** - Average sales price increased primarily due to the effects of pricing initiatives in an inflationary cost environment, partially offset by challenging export market conditions due to the impacts of avian influenza.

• Operating Income** - Operating income decreased primarily due to the impacts of inflationary market conditions including increased supply chain and labor costs. Operating income was impacted by $225 million of higher feed ingredient costs, coupled with $20 million of net derivative gains as compared to $60 million of net derivative gains in the first quarter of fiscal 2022. Additionally, operating income was impacted by a $30 million reduction in insurance proceeds, net of costs incurred related to a fire at a production facility compared to the first quarter of fiscal 2022.

Prepared Foods Segment Results

in millions			Three Months Ended
			December 31, 2022						January 1, 2022						Change
Sales			$	2,538					$	2,333					$	205
Sales volume change															1.2		%
Average sales price change															7.6		%
Operating income			$	258					$	186					$	72
Operating margin			10.2		%				8.0		%

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales Volume** – Sales volume increased due to increased retail demand and improved operational performance.

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

• Operating Income** – Operating income increased due to higher average sales prices and increased sales volumes, partially offset by the impacts of inflationary market conditions, including $50 million of increased raw materials and other input costs in addition to increased supply chain and labor costs.

International/Other Results

in millions			Three Months Ended
			December 31, 2022						January 1, 2022						Change
Sales			$	612					$	550					$	62
Operating income (loss)			(5)						9						(14)

First quarter – Fiscal 2023 vs Fiscal 2022

• Sales** – Sales increased due to volume growth and improved pricing.

• Operating Income (Loss)** – Operating income decreased primarily due to the continued impacts of COVID-19 in China and the impacts of global inflationary market conditions.

LIQUIDITY AND CAPITAL RESOURCES

Our cash needs for working capital, capital expenditures, growth opportunities, repurchases of senior notes, repayment of maturing debt, the payment of dividends and share repurchases are expected to be met with current cash on hand, cash flows provided by operating activities or short-term borrowings. Based on our current expectations, we believe our liquidity and capital resources will be sufficient to operate our business. However, we may take advantage of opportunities to generate additional liquidity or refinance existing debt through capital market transactions. The amount, nature and timing of any capital market transactions will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and overall market conditions.

Cash Flows from Operating Activities

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Net income			$	320					$	1,126
Non-cash items in net income:
Depreciation and amortization			303						300
Deferred income taxes			8						77
Other, net			68						11
Net changes in operating assets and liabilities			63						(82)
Net cash provided by operating activities			$	762					$	1,432

• The decrease in net cash provided by operating activities was due to lower earnings as a result of operations, offset by decreases in legal and annual incentive payments and an increase in insurance proceeds received.

• In fiscal 2023, we anticipate a net cash outflow related to changes in our operating assets and liabilities as we grow our business in addition to inflationary market conditions.

Cash Flows from Investing Activities

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Additions to property, plant and equipment			$	(589)					$	(408)
Acquisition, net of cash acquired			(39)						—
Acquisition of equity investments			(36)						(45)
Other, net			(5)						(6)
Net cash used for investing activities			$	(669)					$	(459)

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

• Capital spending for fiscal 2023 is expected to approximate $2.5 billion and includes spending for capacity expansion and utilization, automation to alleviate labor challenges and brand and product innovations.

• Acquisition, net of cash acquired for the first three months ended December 31, 2022 included our 60% equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products.

Cash Flows from Financing Activities

in millions			Three Months Ended
			December 31, 2022						January 1, 2022
Proceeds from issuance of debt			$	54					$	26
Payments on debt			(58)						(43)
Purchases of Tyson Class A common stock			(313)						(348)
Dividends			(169)						(164)
Stock options exercised			4						46
Other, net			—						(1)
Net cash used for financing activities			$	(482)					$	(484)

• Purchases of Tyson Class A stock included:

• $300 million of cash paid for shares repurchased pursuant to our share repurchase program during the three months ended December 31, 2022 and January 1, 2022.

• $13 million and $48 million of shares repurchased to fund certain obligations under our equity compensation programs during the three months ended December 31, 2022 and January 1, 2022, respectively.

• Dividends paid during the three months ended December 31, 2022 reflected a 4% increase to our fiscal 2022 quarterly dividend rate.

Liquidity

in millions
			Commitments Expiration Date						Facility Amount						Outstanding Letters of Credit (no draw downs)						Amount Borrowed						Amount Available at December 31, 2022
Cash and cash equivalents																											$	654
Short-term investments																											2
Revolving credit facility			September 2026						$	2,250					$	—					$	—					2,250
Commercial paper																											—
Total liquidity																											$	2,906

• Liquidity includes cash and cash equivalents, short-term investments and availability under our revolving credit facility, less the outstanding commercial paper balance.

• At December 31, 2022, we had current debt of $490 million, which we intend to pay with cash generated from our operating activities and other existing or new liquidity sources.

• The revolving credit facility supports our short-term funding needs and also serves to backstop our commercial paper program. We had no borrowings under the revolving credit facility during the three months ended December 31, 2022. Under the terms of the facility, we have the option to establish incremental commitment increases of up to $500 million if certain conditions are met.

• In the second quarter of fiscal 2023 through the date of this filing, we increased our commercial paper balance by $355 million for operational purposes.

• We expect net interest expense to approximate $330 million for fiscal 2023.

• Our current ratio was 1.8 to 1 at December 31, 2022 and October 1, 2022.

• At December 31, 2022, approximately $465 million of our cash was held in the accounts of our foreign subsidiaries. Generally, we do not rely on the foreign cash as a source of funds to support our ongoing domestic liquidity needs. We manage our worldwide cash requirements by reviewing available funds among our foreign subsidiaries and the cost effectiveness with which those funds can be accessed. We intend to repatriate excess cash (net of applicable withholding taxes) not subject to regulatory requirements and to indefinitely reinvest outside of the United States the remainder of cash held by foreign subsidiaries. We do not expect the regulatory restrictions or taxes on repatriation to have a material effect on our overall liquidity, financial condition or the results of operations for the foreseeable future.

Capital Resources

Credit Facility

Cash flows from operating activities and cash on hand are our primary sources of liquidity for funding debt service, capital expenditures, dividends and share repurchases. We also have a revolving credit facility, with a committed capacity of $2.25 billion, to provide additional liquidity for working capital needs and to backstop our commercial paper program.

At December 31, 2022, amounts available for borrowing under our revolving credit facility totaled $2.25 billion. Our revolving credit facility is funded by a syndicate of 20 banks, with commitments ranging from $35 million to $175 million per bank.

Commercial Paper Program

Our commercial paper program provides a low-cost source of borrowing to fund general corporate purposes including working capital requirements. The maximum borrowing capacity under the commercial paper program is $1.5 billion. The maturities of the notes may vary, but may not exceed 397 days from the date of issuance. As of December 31, 2022, we had no commercial paper outstanding under this program. Our ability to access commercial paper in the future may be limited or its costs increased.

Capitalization

To monitor our credit ratings and our capacity for long-term financing, we consider various qualitative and quantitative factors. We monitor the ratio of our net debt to EBITDA as support for our long-term financing decisions. At December 31, 2022, and October 1, 2022, the ratio of our net debt to EBITDA was 1.6x and 1.3x, respectively. Refer to Part I, Item 3, EBITDA Reconciliations, for an explanation and reconciliation to comparable Generally Accepted Accounting Principles (“GAAP”) measures.

Credit Ratings

Revolving Credit Facility

Standard & Poor’s Rating Services’, a Standard & Poor’s Financial Services LLC business (“S&P”), applicable rating is “BBB+”. Moody’s Investor Service, Inc.’s (“Moody’s”) applicable rating is “Baa2”. The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate”) and letter of credit fees and borrowings (“All-in Borrowing Spread”) that corresponds to the applicable ratings levels from S&P and Moody’s.

Ratings Level (Moody’s/S&P)			Facility Fee Rate			All-in Borrowing Spread
A2/A or above			0.070		%	0.875		%
A3/A-			0.090		%	1.000		%
Baal/BBB+ (current level)			0.100		%	1.125		%
Baa2/BBB			0.125		%	1.250		%
Baa3/BBB- or lower			0.175		%	1.375		%

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

Debt Covenants

Our revolving credit facility contains affirmative and negative covenants that, among other things, may limit or restrict our ability to: create liens and encumbrances; incur debt; merge, dissolve, liquidate or consolidate; make acquisitions and investments; dispose of or transfer assets; change the nature of our business; engage in certain transactions with affiliates; and enter into hedging transactions, in each case, subject to certain qualifications and exceptions. In addition, we are required to maintain a minimum interest expense coverage ratio.

Our senior notes also contain affirmative and negative covenants that, among other things, may limit or restrict our ability to: create liens; engage in certain sale/leaseback transactions; and engage in certain consolidations, mergers and sales of assets.

We were in compliance with all debt covenants at December 31, 2022, and we expect that we will maintain compliance.

RECENTLY ISSUED/ADOPTED ACCOUNTING PRONOUNCEMENTS

Refer to the discussion of recently issued/adopted accounting pronouncements under Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 1: Accounting Policies.

CRITICAL ACCOUNTING ESTIMATES

We consider accounting policies related to: contingent liabilities; revenue recognition; accrued self-insurance; defined benefit pension plans; impairment of long-lived assets and definite life intangibles; impairment of goodwill and indefinite life intangible assets; business combinations; and income taxes to be critical accounting estimates. These policies are summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022. Refer to Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 1: Accounting Policies, for updates to our significant accounting policies during the three months ended December 31, 2022. These critical accounting policies require us to make estimates and assumptions that affect the amounts reported in the consolidated condensed financial statements and accompanying notes.

As further described in the impairment of goodwill and indefinite life intangible assets critical accounting estimate included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, we assess goodwill and indefinite life assets for impairment at least annually as of the first day the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Conditions existed as of the end our first quarter that required an interim assessment of goodwill for two of our International reporting units which had goodwill totaling $0.2 billion at December 31, 2022. The interim assessment was deemed necessary due to higher discount rates used in estimating the fair value of the reporting units as well as lower than anticipated operating results during the first quarter of fiscal 2023. Based on the interim assessment, we determined no impairment was necessary as the fair value of the reporting units exceeded their carrying value. Had we assumed future operating margins consistent with those realized in the first quarter of the current fiscal year, both reporting units would have failed the quantitative step of the interim impairment test, which may have resulted in a goodwill impairment loss. The goodwill for these reporting units originated from acquisitions in fiscal 2019 and fiscal 2018, and we are still integrating them and investing in our international and global business strategy, in addition to managing through the temporary impacts of COVID-19. The reporting units' projected long-term operating margins included in the interim impairment test had to exceed an average of 4% to achieve breakeven results in the analysis. A hypothetical increase in the discount rates of approximately 50 basis points, with all other assumptions unchanged, at December 31, 2022, would have caused the carrying values of these reporting units to approximate their fair values.

Our impairment analysis contains inherent estimates and assumptions, many of which are outside the control of management including interest rates, cost of capital, tax rates, market EBITDA comparables and credit ratings, which could positively or negatively impact the anticipated future economic and operating conditions. The assumptions and estimates used in determining fair value require considerable judgement and are sensitive to changes in underlying assumptions. These assumptions can change in future periods as a result of overall economic conditions, including the impacts of inflationary pressures, increased interest and discount rates and global supply chain constraints, amongst others. As a result, there can be no assurance that estimates and assumptions made for the purpose of assessing impairments will prove to be an accurate prediction of the future. Potential circumstances that could have a negative effect on the fair value of our reporting units include, but are not limited to, lower than forecasted growth rates or operating margins and changes in discount rates. A reduction in the estimated fair value of the reporting units could trigger an impairment in the future. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of our goodwill and indefinite lived assets.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain information in this report constitutes forward-looking statements. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2023, other future economic circumstances, industry conditions in domestic and international markets, our performance and financial results (e.g., debt levels, return on invested capital, value-added product growth, capital expenditures, tax rates, access to foreign markets and dividend policy). Words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “forecast,” “target,” “outlook,” “may,” “should,” “could,” and similar expressions, as well as statements written in the future tense, identify forward-looking statements. These forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results and experiences to differ materially from anticipated results and expectations expressed in such forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which are expressly qualified in their entirety by this cautionary statement and speak only as of the date made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following: (i) the COVID-19 pandemic and associated responses thereto have had an adverse impact on our business and operations, and the extent that the COVID-19 pandemic continues to impact us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the COVID-19 related impacts on the market, including production delays, labor shortages and increases in costs and inflation; (ii) the effectiveness of our financial excellence programs; (iii) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (iv) cyberattacks, other cyber incidents, security breaches or other disruptions of our information technology systems; (v) risks associated with our failure to consummate favorable acquisition transactions or integrate certain acquisitions’ operations; (vi) the Tyson Limited Partnership’s ability to exercise significant control over the Company; (vii) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (viii) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins; (ix) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to conduct our operations; (x) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xi) effectiveness of advertising and marketing programs; (xii) significant marketing plan changes by large customers or loss of one or more large customers; (xiii) our ability to leverage brand value propositions; (xiv) changes in availability and relative costs of labor and contract farmers and our ability to maintain good relationships with team members, labor unions, contract farmers and independent producers providing us livestock, including as a result of our plan to relocate certain corporate team members to our world headquarters in Springdale, Arkansas; (xv) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (xvi) the effect of climate change and any legal or regulatory response thereto; (xvii) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws; (xviii) adverse results from litigation; (xix) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xx) impairment in the carrying value of our goodwill or indefinite life intangible assets; (xxi) our participation in a multiemployer pension plan; (xxii) volatility in capital markets or interest rates; (xxiii) risks associated with our commodity purchasing activities; (xxiv) the effect of, or changes in, general economic conditions; (xxv) impacts on our operations caused by factors and forces beyond our control, such as natural disasters, fire, bioterrorism, pandemics, armed conflicts or extreme weather; (xxvi) failure to maximize or assert our intellectual property rights; (xxvii) effects related to changes in tax rates, valuation of deferred tax assets and liabilities, or tax laws and their interpretation; and (xxviii) those factors discussed within Item 1, Item 1A and Item 7 of our Annual Report on Form 10-K for the year ended October 1, 2022 and our other periodic filings with the SEC.

Market risk relating to our operations results primarily from changes in commodity prices, interest rates and foreign exchange rates, as well as credit risk concentrations. To address certain of these risks, we enter into various derivative transactions as described below. If a derivative instrument is accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change in fair value is recognized immediately.

Further, we hold certain positions, primarily in grain and livestock futures that either do not meet the criteria for hedge accounting or are not designated as hedges. With the exception of normal purchases and normal sales that are expected to result in physical delivery, we record these positions at fair value, and the unrealized gains and losses are reported in earnings at each reporting date.

The sensitivity analyses presented below are the measures of potential changes in fair value resulting from hypothetical changes in market prices related to commodities. Sensitivity analyses do not consider the actions we may take to mitigate our exposure to changes, nor do they consider the effects such hypothetical adverse changes may have on overall economic activity. Actual changes in market prices may differ from hypothetical changes.

Commodities Risk

We purchase certain commodities, such as grains and livestock, during normal operations. As part of our commodity risk management activities, we use derivative financial instruments, primarily forwards and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity. However, as the commodities underlying our derivative financial instruments can experience significant price fluctuations, any requirement to mark-to-market the positions that have not been designated or do not qualify as hedges could result in volatility in our results of operations. Contract terms of a hedge instrument closely mirror those of the hedged item providing a high degree of risk reduction and correlation. Contracts designated and highly effective at meeting this risk reduction and correlation criteria are recorded using hedge accounting. We generally do not hedge anticipated transactions beyond 18 months. The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of December 31, 2022, and October 1, 2022, on the fair value of open positions. The fair value of such positions is a summation of the fair values calculated for each commodity by valuing each net position at quoted forward and option prices. The market risk exposure analysis included both derivatives designated as hedge instruments and derivatives not designated as hedge instruments.

Effect of 10% change in fair value									in millions
			December 31, 2022						October 1, 2022
Livestock:
Live Cattle			$	20					$	14
Lean Hogs			33						30
Grain:
Corn			32						40
Soybean Meal			21						25

Interest Rate Risk

At December 31, 2022, we had variable rate debt of $46 million with a weighted average interest rate of 6.1%. A hypothetical 10% increase in interest rates effective at December 31, 2022, and October 1, 2022, would not have a significant effect on variable interest expense.

Additionally, changes in interest rates impact the fair value of our fixed-rate debt. At December 31, 2022, we had fixed-rate debt of $8,303 million with a weighted average interest rate of 4.5%. Market risk for fixed-rate debt is estimated as the potential increase in fair value, resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% change in interest rates would have changed the fair value of our fixed-rate debt by approximately $218 million at December 31, 2022 and $215 million at October 1, 2022. The fair values of our debt were estimated based on quoted market prices and/or published interest rates.

We are subject to interest rate risk associated with our pension and post-retirement benefit obligations. Changes in interest rates impact the liabilities associated with these benefit plans as well as the amount of income or expense recognized for these plans. Declines in the value of the plan assets could diminish the funded status of the pension plans and potentially increase the requirements to make cash contributions to these plans. See Part II, Item 8, Notes to Consolidated Financial Statements, Note 15: Pensions and Other Postretirement Benefits in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, for additional information.

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. The primary currencies we have exposure to are the Australian dollar, the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Malaysian ringgit, the Mexican peso, and the Thai baht. We periodically enter into foreign exchange forward and option contracts to hedge some portion of our foreign currency exposure. A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a $16 million and $25 million impact on pretax income at December 31, 2022, and October 1, 2022 respectively.

Concentration of Credit Risk

Refer to our market risk disclosures set forth in our Annual Report filed on Form 10-K for the fiscal year ended October 1, 2022, for a detailed discussion of quantitative and qualitative disclosures about concentration of credit risks.

EBITDA Non-GAAP Reconciliations

A reconciliation of net income to EBITDA is as follows (in millions, except ratio data):

			Three Months Ended												Fiscal Year Ended						Twelve Months Ended
			December 31, 2022						January 1, 2022						October 1, 2022						December 31, 2022
Net income			$	320					$	1,126					$	3,249					$	2,443
Less: Interest income			(9)						(3)						(17)						(23)
Add: Interest expense			84						100						365						349
Add: Income tax expense			114						284						900						730
Add: Depreciation			243						236						945						952
Add: Amortization (a)			58						62						246						242
EBITDA			$	810					$	1,805					$	5,688					$	4,693
Total gross debt															$	8,321					$	8,349
Less: Cash and cash equivalents															(1,031)						(654)
Less: Short-term investments															(1)						(2)
Total net debt															$	7,289					$	7,693
Ratio Calculations:
Gross debt/EBITDA															1.5x						1.8x
Net debt/EBITDA															1.3x						1.6x

(a) Excludes the amortization of debt issuance and debt discount expense of $2 million for the three months ended December 31, 2022 and January 1, 2022 and $11 million for the fiscal year ended October 1, 2022 and December 31, 2022 as it is included in interest expense.

EBITDA represents net income, net of interest, income tax expense, depreciation and amortization. Net debt to EBITDA represents the ratio of our debt, net of cash and short-term investments, to EBITDA. EBITDA and net debt to EBITDA are presented as supplemental financial measurements in the evaluation of our business. We believe the presentation of these financial measures helps investors to assess our operating performance from period to period, including our ability to generate earnings sufficient to service our debt, and enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies; however, the measurements of EBITDA and net debt to EBITDA may not be comparable to those of other companies, which limits their usefulness as comparative measures. EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with GAAP and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity. EBITDA is a useful tool for assessing, but is not a reliable indicator of, our ability to generate cash to service our debt obligations because certain of the items added to net income to determine EBITDA involve outlays of cash. As a result, actual cash available to service our debt obligations will be different from EBITDA. Investors should rely primarily on our GAAP results, and use non-GAAP financial measures only supplementally, in making investment decisions.

Evaluation of Disclosure Controls and Procedures

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) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “1934 Act”)). Based on that evaluation, the CEO and CFO have concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the 1934 Act) during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

**Item 1.**Legal Proceedings

Refer to the description of the Broiler Antitrust Civil Litigation, the Broiler Chicken Grower Litigation, the Pork Antitrust Litigation, the Beef Antitrust Litigation and the Wage Rate Litigation under the heading “Commitments and Contingencies” in Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 15: Commitments and Contingencies, which discussion is incorporated herein by reference. Other than as set forth below and in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, there are no additional updates to the legal proceedings involving the Company and/or its subsidiaries.

On July 8, 2022, Barber Foods, LLC (“Barber Foods”), an indirect wholly owned subsidiary of the Company, received correspondence from the Environmental Protection Agency (“EPA”) extending an opportunity to confer and negotiate a Consent Agreement and Final Order (“CAFO”) for each of two Barber Foods frozen poultry storage facilities located in Portland, Maine (the “Maine Facilities”). Included in the correspondence was a proposed CAFO for each facility. Each proposed CAFO alleges violations of the Clean Air Act resulting from EPA compliance inspections conducted in June 2019 at the Maine Facilities. The alleged violations include the failure to comply with process safety information requirements, failure to comply with mechanical integrity requirements and failure to adequately identify, evaluate, and control hazards. The proposed CAFOs set forth a proposed aggregate civil penalty of $541,243 for the alleged violations at the Maine Facilities. Barber Foods is currently in negotiations with the EPA with respect to the matter.

On June 19, 2005, the Attorney General and the Secretary of the Environment of the State of Oklahoma filed a complaint in the United States District Court for the Northern District of Oklahoma against Tyson Foods, Inc., three subsidiaries and six other poultry integrators. The complaint, which was subsequently amended, asserts a number of state and federal causes of action including, but not limited to, counts under the Comprehensive Environmental Response, Compensation, and Liability Act, Resource Conservation and Recovery Act, and state-law public nuisance theories. Oklahoma alleges that the defendants and certain contract growers who were not joined in the lawsuit polluted the surface waters, groundwater and associated drinking water supplies of the Illinois River Watershed through the land application of poultry litter. Oklahoma’s claims were narrowed through various rulings issued before and during trial and its claims for natural resource damages were dismissed by the district court in a ruling issued on July 22, 2009, which was subsequently affirmed on appeal by the Tenth Circuit Court of Appeals. A non-jury trial of the remaining claims including Oklahoma’s request for injunctive relief began on September 24, 2009. Closing arguments were held on February 11, 2010. On January 18, 2023, the district court entered Findings of Fact and Conclusions of Law in favor of the State of Oklahoma and directed the parties to confer in attempt to reach an agreement on appropriate remedies by March 17, 2023.

Other Matters

As of October 1, 2022, we had approximately 142,000 team members and, at any time, have various employment practices matters outstanding. In the aggregate, these matters are important to the Company, and we devote considerable resources to managing employment issues. Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial amounts) arising out of the conduct of our business. While the ultimate results of these matters cannot be determined, they are not expected to have a material adverse effect on our consolidated results of operations or financial position.

Our business is subject to a variety of risks and uncertainties. These risks are described in this Quarterly Report on Form 10-Q and elsewhere in our other filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 1, 2022. The risks identified in such reports have not changed in any material respect.

**Item 2.**Unregistered Sales of Equity Securities and Use of Proceeds

The table below provides information regarding our purchases of Class A stock during the three months ended December 31, 2022.

Period			Total Number of Shares Purchased (2)						Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)						Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
October 2, 2022 to October 29, 2022			32,042						$	65.79		—						11,957,990
October 30, 2022 to December 3, 2022			1,942,276						66.23			1,795,735						10,162,255
December 4, 2022 to December 31, 2022			2,886,042						63.30			2,860,855						7,301,400
Total			4,860,360						$	64.49		4,656,590						7,301,400

(1)On February 7, 2003, we announced that our Board of Directors had approved a program to repurchase up to 25 million shares of outstanding Class A common stock from time to time in open market or privately negotiated transactions. On May 3, 2012, our Board of Directors approved an additional 35 million shares, on January 30, 2014, our Board of Directors approved an additional 25 million shares and on February 4, 2016, our Board of Directors approved an additional 50 million shares, in each case, authorized for repurchase under our share repurchase program. The program has no fixed or scheduled termination date.

(2)We purchased 203,770 shares during the three months ended December 31, 2022 that were not made pursuant to our previously announced stock repurchase program but were purchased to fund certain Company obligations under our equity compensation plans. These transactions included 78,903 shares purchased in open market transactions and 124,867 shares withheld to cover required tax withholdings related to the vesting of restricted stock. Shares withheld to cover required tax withholdings related to the vesting of restricted stock do not reduce our total share repurchase authority.

(3)We purchased 4.7 million shares during the three months ended December 31, 2022 pursuant to our previously announced stock repurchase program.

Item 3. Defaults Upon Senior Securities

None.

**Item 4.**Mine Safety Disclosures

Not Applicable.

On February 1, 2023, the Compensation and Leadership Development Committee of our Board of Directors approved and adopted certain amendments to the Company’s Executive Severance Plan, as amended and restated effective February 15, 2020 (the “Executive Severance Plan”), effective October 1, 2023. The material changes in this amendment include changing performance-based payouts under the provisions of the Company’s Annual Incentive Plan such that when a covered officer’s Date of Termination (as defined in the Executive Severance Plan) occurs in the first, second or third quarters of the Company’s fiscal year, the performance-based payout will be based on actual performance for such fiscal year (rather than target performance for such fiscal year) and such amount will be determined following the disclosure of performance results and any adjustments, and clarifying additional circumstances under which severance pay and benefits may be canceled or refunded back to the Company. The other material terms and conditions in the Executive Severance Plan remain substantially unchanged and in full force and effect.

The foregoing summary of the amendments to the Executive Severance Plan does not purport to be complete and is qualified in its entirety by reference to the full text of amended Executive Severance Plan, which is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q.

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

Exhibit No.						Exhibit Description
10.1			* **			Release Agreement dated as of January 17, 2023 between Tyson Foods, Inc. and Scott Spradley.
10.2			* **			Executive Severance Plan, as amended and restated effective October 1, 2023.
10.3			* **			Form of Stock Options (Contracted) - Stock Incentive Award Agreement pursuant to which stock option awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.4			* **			Form of Stock Options (5+1) - Stock Incentive Award Agreement pursuant to which stock option awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.5			* **			Form of Stock Options (Director/Non-Contract) - Stock Incentive Award Agreement pursuant to which stock option awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.6			* **			Form of Stock Options (CEO & Other CT) - Stock Incentive Award Agreement pursuant to which stock option awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.7			* **			Form of Restricted Stock (Contracted) - Stock Incentive Award Agreement pursuant to which restricted share awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.8			* **			Form of Restricted Stock (Director/Non-Contract) - Stock Incentive Award Agreement pursuant to which restricted share awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.9			* **			Form of Restricted Stock (5+1) - Stock Incentive Award Agreement pursuant to which restricted share awards are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.10			* **			Form of Performance Shares - Operating Income - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.11			* **			Form of Performance Shares - Operating Income (5+1) - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.12			* **			Form of Performance Shares - Total Shareholder Return - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.13			* **			Form of Performance Shares - Total Shareholder Return (5+1) - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.14			* **			Form of Performance Shares - Return on Invested Capital - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
10.15			* **			Form of Performance Shares - Return on Invested Capital (5+1) - Stock Incentive Award Agreement pursuant to which performance shares are granted under the Tyson Foods, Inc. Stock Incentive Plan effective November 18, 2022.
31.1			**			Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			**			Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			***			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			***			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following information from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2022, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Consolidated Condensed Statements of Income, (ii) Consolidated Condensed Statements of Comprehensive Income, (iii) Consolidated Condensed Balance Sheets, (iv) Consolidated Condensed Statements of Shareholders' Equity, (v) Consolidated Condensed Statements of Cash Flows, and (vi) the Notes to Consolidated Condensed Financial Statements.
104						Cover Page Interactive Data File formatted in iXBRL.
			*			Indicates a management contract or compensatory plan or arrangement.
			**			Filed herewith
			***			Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						TYSON FOODS, INC.
Date: February 6, 2023									/s/ John R. Tyson
									John R. Tyson
									Executive Vice President and Chief Financial Officer
Date: February 6, 2023									/s/ Phillip W. Thomas
									Phillip W. Thomas
									Vice President, Controller and Chief Accounting Officer