Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 September 30, 2023. 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 including 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, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Overview

General

Sales increased in the third quarter and in the first nine months of fiscal 2024 driven by increased sales in our Beef, Pork and Prepared Foods segments, partially offset by decreased sales in our Chicken segment. We recorded operating income of $341 million for the third quarter of fiscal 2024 as compared to an operating loss of $350 million in the third quarter of fiscal 2023 primarily driven by higher operating income in our Chicken segment and International/Other, partially offset by lower operating income in our Beef segment. During the third quarter and first nine months of fiscal 2024, we incurred higher performance-based compensation costs of $89 million and $308 million, respectively, driven by improved consolidated results. Due to the nature of our performance-based compensation plans, our segments were primarily impacted based on their relative number of eligible team members, and thus, our Chicken and Prepared Foods segments incurred a greater proportion of the total costs.

Additionally, in the third quarter of fiscal 2024, our operating income was impacted by $101 million in legal contingency accruals and $41 million in plant closure charges. In the third quarter of fiscal 2023, our operating income was impacted by $448 million of goodwill impairment charges, $50 million of restructuring and related charges, $15 million in plant closures charges, a $38 million legal contingency accrual, and benefited from $22 million of insurance proceeds, net of costs incurred associated with a production facility fire. We recorded operating income of $884 million for the first nine months of fiscal 2024 as compared to operating income of $68 million for the first nine months of fiscal 2023 primarily driven by higher operating income in our Chicken and Pork segments and International/Other, partially offset by lower operating income in our Beef segment. In the first nine months of fiscal 2024, our operating income was impacted by $174 million in legal contingency accruals, $155 million of plant closure charges, $83 million of costs related to a production facility fire in the Netherlands and the subsequent decision to sell the facility and $31 million of restructuring and related charges, partially offset by the benefit of $19 million of insurance proceeds, net of costs incurred related to facility fires. In the nine months ended July 1, 2023, our operating income was impacted by $448 million of goodwill impairment charges, $107 million in plant closures charges, $93 million of restructuring and related charges, and a $38 million legal contingency accrual and benefited from $57 million of insurance proceeds net of costs, related to facility fires.

Market Environment

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) increased slightly in the third quarter of fiscal 2024 as compared to the same period in fiscal 2023. The Beef segment experienced limited supply of market-ready cattle in the third quarter of fiscal 2024 as well as increased cattle costs. Additionally, uncertainty exists regarding the timing of the anticipated cattle herd rebuilding. The Pork segment experienced sufficient supply and increased hog costs. The Chicken segment experienced reduced feed ingredient costs. The Prepared Foods segment is currently experiencing increased raw material costs primarily due to higher meat costs. Additionally, the conflict between Ukraine and Russia has led to economic sanctions against Russia and certain regions of Ukraine and Belarus. However, the conflict is still ongoing and there are many risks and uncertainties in relation to the conflict that are outside of our control. Furthermore, during fiscal 2024, the ongoing conflict in the Middle East escalated and created economic and political uncertainty within the region. As of June 29, 2024, the impact of these conflicts have not had a material direct impact on our financial performance. If these conflicts escalate further, impact additional regions or countries, or have additional economic sanctions imposed, it could have a material impact on our business operations and financial performance.

The Federal Reserve has increased interest rates, and may continue to increase interest rates or maintain elevated interest rates in the near term. Our direct exposure to elevated interest rates is somewhat tempered given our strong liquidity position in addition to our current debt structure in which most of our borrowings have fixed interest rates. At June 29, 2024, we had $4.8 billion of liquidity and our current debt was $1.3 billion, which we intend to repay with the remaining proceeds from our $1.5 billion of senior notes issued in March 2024. 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.

Margins

Our total operating margin was 2.6% in the third quarter of fiscal 2024. Operating margins by segment were as follows:

• Beef – (1.3)%

• Pork – (4.2)%

• Chicken – 6.0%

• Prepared Foods – 8.3%

Strategy

We are a world-class food company and recognized leader in protein. Our strategy is to deliver margins in the core protein business by driving efficiencies and valuing-up offerings to better serve consumers; grow branded portfolio by innovating new occasions, categories and channels; and scale in international markets by delivering profitable value-added food offerings in high growth categories.

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. We recognized $50 million of pretax charges in the three months ended July 1, 2023, and $31 million and $93 million of pretax charges in the nine months ended June 29, 2024 and July 1, 2023, respectively, 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 $225 million. As the Company continues to evaluate its business strategies and long-term growth targets, additional restructuring activities may occur. 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						Nine Months Ended
			June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Cost of Sales			$	—		$	19		$	—		$	23
Selling, General and Administrative			—			31			31			70
Total Restructuring and related charges, pretax			$	—		$	50		$	31		$	93

			Three Months Ended						Nine Months Ended															2022 Program charges to date						Total estimated
			June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023												June 29, 2024						2022 Program charges
Beef			$	—		$	13		$	4		$	26											$	53					$	54
Pork			—			4			1			8												17						17
Chicken			—			10			2			11												24						25
Prepared Foods			—			14			24			33												109						111
International/Other			—			9			—			15												18						18
Total Restructuring and related charges, pretax			$	—		$	50		$	31		$	93											$	221					$	225

Summary of Results

Sales

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Sales			$	13,353					$	13,140					$	39,744					$	39,533
Change in sales volume			1.1		%										(0.1)		%
Change in average sales price			0.6		%										0.7		%
Sales growth			1.6		%										0.5		%

Third quarter – Fiscal 2024 vs Fiscal 2023

• Sales Volume** – Sales were positively impacted by an increase in sales volume, which accounted for a $142 million increase in sales driven by increased sales volume in our Beef, Pork and Prepared Foods segments, partially offset by decreased sales volume in our Chicken segment.

• Average Sales Price** – Sales were positively impacted by higher average sales prices, which accounted for an increase of $78 million, driven by increased pricing in our Beef and Pork segments, partially offset by lower average sales prices in our Chicken segment.

◦The above changes in average sales price exclude a $45 million and $38 million reduction of Sales from the recognition of legal contingency accruals in the third quarter of fiscal 2024 and 2023, respectively.

Nine months – Fiscal 2024 vs Fiscal 2023

• Sales Volume** – Sales were negatively impacted by a decrease in sales volume, which accounted for a $53 million decrease in sales driven by decreased sales volume in our Chicken segment, partially offset by increased sales volume in our Beef, Pork and Prepared Foods segments.

• Average Sales Price** – Sales were positively impacted by higher average sales prices, which accounted for an increase of $271 million, driven by increased pricing in our Beef and Pork segments, partially offset by lower average sales prices in our Chicken and Prepared Foods segments.

◦The above changes in average sales price exclude a $45 million and $38 million reduction of Sales from the recognition of legal contingency accruals for the nine months ended June 29, 2024 and July 1, 2023, respectively.

Cost of Sales

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Cost of sales			$	12,475					$	12,463					$	37,177					$	37,361
Gross profit			878						677						2,567						2,172
Cost of sales as a percentage of sales			93.4		%				94.8		%				93.5		%				94.5		%

Third quarter – Fiscal 2024 vs Fiscal 2023

• Cost of sales increased $12 million. Higher sales volume increased cost of sales by $133 million while lower input cost per pound decreased cost of sales by $121 million.

• The $121 million impact of lower input cost per pound was impacted by:

• Decrease of approximately $305 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease due to net derivative gains of $6 million in the third quarter of fiscal 2024, compared to net derivative losses of $89 million in the third quarter of fiscal 2023 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.

• Decrease in freight and transportation costs of approximately $60 million.

• Decrease of $19 million in restructuring and related costs.

• Increase in cattle costs of approximately $240 million in our Beef segment.

• Increase in hog costs of approximately $110 million in our Pork segment.

• Increase of $56 million related to the recognition of a legal contingency accrual in our Chicken segment.

• Increase in performance-based compensation costs of $27 million.

• Increase in raw material and other input costs of approximately $35 million in our Prepared Foods segment.

• Increase of $27 million in our Chicken segment from insurance proceeds, net of costs, related to a production facility fire in the fourth quarter of fiscal 2021.

• Increase of $26 million due to costs associated with plant closures.

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

Nine months – Fiscal 2024 vs Fiscal 2023

• Cost of sales decreased $184 million. Lower sales volume decreased cost of sales by $51 million while lower input cost per pound decreased cost of sales by $133 million.

• The $133 million impact of lower input cost per pound was impacted by:

• Decrease of approximately $665 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease in freight and transportation costs of approximately $230 million.

• Decrease in hog costs of approximately $70 million in our Pork segment.

• Decrease due to net derivative losses of $45 million in the first nine months of fiscal 2024, compared to net derivative losses of $98 million in the first nine months of fiscal 2023 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.

• Decrease in raw material and other input costs of approximately $40 million in our Prepared Foods segment.

• Decrease of $23 million in restructuring and related costs.

• Increase in cattle costs of approximately $1,140 million in our Beef segment.

• Increase in performance-based compensation costs of $140 million.

• Increase of $129 million related to the recognition of legal contingency accruals in our Beef, Pork and Chicken segments.

• Increase of $83 million in International/Other from costs related to a production facility fire in the Netherlands and subsequent decision to sell the facility.

• Increase of $48 million due to costs associated with plant closures.

• Increase of $42 million in our Beef segment from insurance proceeds received in the first quarter of fiscal 2023 related to the fire at our production facility in the fourth quarter of fiscal 2019.

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

Selling, General and Administrative

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Selling, general and administrative expense			$	537					$	579					$	1,683					$	1,656
As a percentage of sales			4.0		%				4.4		%				4.2		%				4.2		%

Third quarter – Fiscal 2024 vs Fiscal 2023

• Decrease of $42 million in selling, general and administrative was primarily driven by:

• Decrease of $45 million in marketing, advertising and promotion expenses.

• Decrease of $31 million in restructuring and related costs.

• Decrease of $7 million in rent expense.

• Increase of $51 million in team member costs including $62 million in performance-based compensation partially offset by a decrease of $11 million in all other team member costs.

Nine months – Fiscal 2024 vs Fiscal 2023

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

• Increase of $125 million in team member costs including $168 million in performance-based compensation partially offset by a decrease of $43 million in all other team member costs.

• Decrease of $53 million in marketing, advertising and promotion expenses.

• Decrease of $39 million in restructuring and related costs.

Goodwill Impairment

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Goodwill Impairment			$	—					$	448					$	—					$	448

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• We recorded a $448 million goodwill impairment charge in the third quarter of fiscal 2023.

Interest (Income) Expense

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Interest income			$	(36)					$	(6)					$	(60)					$	(22)
Interest expense			135						89						351						262

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• The increase in interest income for the three and nine months ended June 29, 2024 was primarily due to higher cash and cash equivalents held and increased interest rates.

• The increase in interest expense for the three and nine months ended June 29, 2024 was primarily due to interest expense related to our recently issued 5.40% 2029 Notes and 5.70% 2034 Notes and interest expense on the balance of our term loan facilities.

Other (Income) Expense, net

in millions			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Total other (income) expense, net			$	(11)					$	(7)					$	(24)					$	(50)

Third quarter and nine months – Fiscal 2024

• Included $19 million and $22 million of joint venture earnings in the third quarter and the first nine months of fiscal 2024, respectively, offset by $9 million and $4 million of foreign exchange losses in the third quarter and the first nine months of fiscal 2024, respectively. Additionally, included $14 million of income related to an amendment of a postretirement benefit plan in the first nine months of fiscal 2024.

Third quarter and nine months– Fiscal 2023

• Included $22 million of production facilities fire insurance proceeds offset by $7 million of foreign exchange losses in the third quarter of fiscal 2023. Included $22 million of foreign exchange gains and $16 million of joint venture earnings in the first nine months of fiscal 2023.

Effective Tax Rate

			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
			22.9		%				(1.8)		%				25.9		%				(67.9)		%

Third quarter – Fiscal 2024 vs Fiscal 2023

• The third quarter of fiscal 2024 was impacted by increased foreign losses, offset by a $9 million benefit related to the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the third quarter.

• In both periods, the effective tax rates were impacted by state taxes and various tax benefits; however, tax benefits increase the effective tax rate in a period of pretax loss and decrease the effective tax rate in a period of pretax income.

• The fiscal 2023 third quarter effective tax rate was impacted by a $448 million non-deductible goodwill impairment.

Nine months – Fiscal 2024 vs Fiscal 2023

• The first nine months of fiscal 2024 was impacted by increased foreign losses, partially offset by a $9 million benefit related to the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the third quarter.

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

• In both periods, the effective tax rates were impacted by state taxes and various tax benefits; however, tax benefits increase the effective tax rate in a period of pretax loss and decrease the effective tax rate in a period of pretax income.

• The effective tax rate for the first nine months of fiscal 2023 was impacted by a $448 million non-deductible goodwill impairment.

Net Income (Loss) Attributable to Tyson

in millions, except per share data			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Net income (loss) attributable to Tyson			$	191					$	(417)					$	443					$	(198)
Net income (loss) attributable to Tyson – per diluted share			0.54						(1.18)						1.25						(0.56)

Third quarter – Fiscal 2024 – Net income (loss) attributable to Tyson included the following items:

• $101 million pretax, or ($0.22) per diluted share, related to the recognition of legal contingency accruals.

• $41 million pretax, or ($0.09) per diluted share, of charges related to plant closures.

• $5 million pretax, or ($0.01) per diluted share, of production facilities fire costs incurred, net of insurance proceeds.

• $3 million pretax, or ($0.01) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

Nine months – Fiscal 2024 – Net income (loss) attributable to Tyson included the following items:

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

• $155 million pretax, or ($0.31) per diluted share, of charges related to plant closures.

• $83 million pretax, or ($0.23) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

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

• $22 million pretax, or $0.05 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

Third quarter – Fiscal 2023 – Net income (loss) attributable to Tyson included the following items:

• $44 million pretax, or $0.10 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $424 million pretax, or ($1.20) per diluted share, of goodwill impairment charges (non-tax deductible) net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests.

• $50 million pretax, or ($0.11) per diluted share, of restructuring and related charges.

• $38 million pretax, or ($0.08) per diluted share, related to the recognition of a legal contingency accrual.

• $15 million pretax, or ($0.04) per diluted share, of charges related to plant closures.

Nine months – Fiscal 2023 – Net income (loss) attributable to Tyson included the following items:

• $79 million pretax, or $0.17 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $424 million pretax, or ($1.20) per diluted share, of goodwill impairment charges (non-tax deductible) net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests.

• $107 million pretax, or ($0.22) per diluted share, of charges related to plant closures.

• $93 million pretax, or ($0.20) per diluted share, of restructuring and related charges.

• $38 million pretax, or ($0.08) per diluted share, related to the recognition of a legal contingency accrual.

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												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Beef			$	5,241					$	4,956					$	15,218					$	14,296
Pork			1,462						1,324						4,465						4,274
Chicken			4,076						4,212						12,174						12,905
Prepared Foods			2,432						2,383						7,379						7,343
International/Other			582						633						1,744						1,879
Intersegment sales			(440)						(368)						(1,236)						(1,164)
Total			$	13,353					$	13,140					$	39,744					$	39,533

in millions			Operating Income (Loss)
			Three Months Ended												Nine Months Ended
			June 29, 2024						July 1, 2023						June 29, 2024						July 1, 2023
Beef(a)			$	(69)					$	66					$	(310)					$	232
Pork(b)			(62)						(74)						(24)						(128)
Chicken(c)			244						(314)						579						(503)
Prepared Foods			203						206						676						705
International/Other(d)			25						(234)						(37)						(238)
Total			$	341					$	(350)					$	884					$	68

(a) Beef segment results for the nine months ended June 29, 2024 included a $45 million legal contingency accrual and $41 million of costs related to plant closures. Beef segment results for the nine months ended July 1, 2023 included $42 million of insurance proceeds, net of costs incurred.

(b) Pork segment results for the three and nine months ended June 29, 2024 included $39 million and $73 million, respectively, of costs related to plant closures. Additionally, Pork segment results for the three and nine months ended June 29, 2024 included $45 million and $73 million, respectively, related to the recognition of legal contingency accruals.

(c) Chicken segment results for the three and nine months ended June 29, 2024 included $2 million and $41 million, respectively, of costs related to plant closures and $5 million of production facility fire costs incurred, net of insurance proceeds, and $19 million of insurance proceeds, net of costs incurred, respectively. Chicken segment results for the three and nine months ended June 29, 2024 also included a $56 million legal contingency accrual. Chicken segment results for the three and nine months ended July 1, 2023 included production facility fire insurance proceeds, net of costs incurred, of $22 million and $15 million, respectively, and costs related to plant closures of $15 million and $107 million, respectively. Chicken segment results for the three and nine months ended July 1, 2023 also included a charge of $38 million related to the recognition of a legal contingency accrual, and $210 million of goodwill impairment.

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

Beef Segment Results

in millions			Three Months Ended																		Nine Months Ended
			June 29, 2024						July 1, 2023						Change						June 29, 2024						July 1, 2023						Change
Sales			$	5,241					$	4,956					$	285					$	15,218					$	14,296					$	922
Sales volume change															4.4		%																0.9		%
Average sales price change															1.4		%																5.5		%
Operating income (loss)			$	(69)					$	66					$	(135)					$	(310)					$	232					$	(542)
Operating margin			(1.3)		%				1.3		%										(2.0)		%				1.6		%

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• Sales Volume - Sales volume increased in the third quarter and the first nine months of fiscal 2024 primarily due to higher average carcass weights.

• Average Sales Price** - Average sales price increased in the third quarter due to increased demand, and in the first nine months of fiscal 2024 due to increased input costs and increased demand.

• Operating Income (Loss)** - Operating income decreased in the third quarter of fiscal 2024 primarily due to compressed beef margins. Operating income decreased in the first nine months of fiscal 2024 primarily due to compressed beef margins, recognition of a legal contingency accrual and plant closure costs in fiscal 2024, and insurance proceeds in fiscal 2023 related to a fire at a production facility in 2019.

Pork Segment Results

in millions			Three Months Ended																		Nine Months Ended
			June 29, 2024						July 1, 2023						Change						June 29, 2024						July 1, 2023						Change
Sales			$	1,462					$	1,324					$	138					$	4,465					$	4,274					$	191
Sales volume change															1.2		%																4.0		%
Average sales price change															12.6		%																1.5		%
Operating income (loss)			$	(62)					$	(74)					$	12					$	(24)					$	(128)					$	104
Operating margin			(4.2)		%				(5.6)		%										(0.5)		%				(3.0)		%

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• Sales Volume** - Sales volume increased in the third quarter and the first nine months of fiscal 2024 due to improved market conditions and increased domestic availability of market-ready hogs.

• Average Sales Price** - Average sales price increased in the third quarter and the first nine months of fiscal 2024 due to improved demand. The change in average sales price excludes a $45 million reduction of Sales from the recognition of a legal contingency accrual recorded in the third quarter of fiscal 2024.

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

Chicken Segment Results

in millions			Three Months Ended																		Nine Months Ended
			June 29, 2024						July 1, 2023						Change						June 29, 2024						July 1, 2023						Change
Sales			$	4,076					$	4,212					$	(136)					$	12,174					$	12,905					$	(731)
Sales volume change															(0.4)		%																(2.7)		%
Average sales price change															(3.7)		%																(3.2)		%
Operating income (loss)			$	244					$	(314)					$	558					$	579					$	(503)					$	1,082
Operating margin			6.0		%				(7.5)		%										4.8		%				(3.9)		%

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• Sales Volume** - Sales volume decreased in the third quarter and first nine months of fiscal 2024 primarily due to reduced domestic production.

• Average Sales Price** - Average sales price decreased in the third quarter and the first nine months of fiscal 2024 due to the impact of lower input costs. The change in average sales price excludes a $38 million reduction of Sales from the recognition of a legal contingency accrual recorded in the third quarter of fiscal 2023.

• Operating Income (Loss)** - Operating income increased in the third quarter of fiscal 2024 primarily due to improved operational efficiencies, a goodwill impairment charge recorded in fiscal 2023 and $63 million of reduced net derivative losses, partially offset by lower average sales price and reduced insurance proceeds, net of costs incurred associated with a production facility fire in the fourth quarter of fiscal 2021. Operating income increased in the first nine months of fiscal 2024 primarily due to improved operational efficiencies, a goodwill impairment charge incurred in fiscal 2023 and lower plant closure charges, partially offset by lower average sales price. Additionally, we experienced lower feed ingredient costs of $305 million and $665 million in the third quarter and the first nine months of fiscal 2024, respectively.

Prepared Foods Segment Results

in millions			Three Months Ended																		Nine Months Ended
			June 29, 2024						July 1, 2023						Change						June 29, 2024						July 1, 2023						Change
Sales			$	2,432					$	2,383					$	49					$	7,379					$	7,343					$	36
Sales volume change															2.0		%																1.7		%
Average sales price change															0.1		%																(1.2)		%
Operating income			$	203					$	206					$	(3)					$	676					$	705					$	(29)
Operating margin			8.3		%				8.6		%										9.2		%				9.6		%

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• Sales Volume** – Sales volume increase in the third quarter of fiscal 2024 was primarily from the foodservice channel offset by reduced sales from the retail channel. Sales volume increased for the first nine months of fiscal 2024 due to the acquisition of Williams Sausage Company in the third quarter of 2023 and increased sales in the foodservice channel.

• Average Sales Price** – Average sales price was relatively flat in the third quarter and decreased in the first nine months of fiscal 2024 primarily due to sales mix.

• Operating Income** – Operating income decreased slightly in the third quarter as increased raw material costs were largely offset by reduced marketing, advertising and promotional spend. Operating income decreased for the first nine months of fiscal 2024 partially due to lower average sales price which was largely offset by reduced raw materials costs in the first half of the year.

International/Other Results

in millions			Three Months Ended																		Nine Months Ended
			June 29, 2024						July 1, 2023						Change						June 29, 2024						July 1, 2023						Change
Sales			$	582					$	633					$	(51)					$	1,744					$	1,879					$	(135)
Operating income (loss)			25						(234)						259						(37)						(238)						201

Third quarter and nine months – Fiscal 2024 vs Fiscal 2023

• Sales** – Sales decreased in the third quarter and the first nine months of fiscal 2024 due to lower average sales price and the impact of the production facility fire in the Netherlands partially offset by increased volumes in the other regions.

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

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			Nine Months Ended
			June 29, 2024						July 1, 2023
Net income (loss)			$	458					$	(206)
Non-cash items in net income			1,250						1,537
Net changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			73						176
(Increase) decrease in inventories			249						138
Increase (decrease) in accounts payable			(252)						(107)
Increase (decrease) in income taxes payable/receivable			(20)						145
Net changes in other operating assets and liabilities			215						(254)
Net cash provided by operating activities			$	1,973					$	1,429

• Non-cash items in net income primarily included depreciation and amortization of $1,082 million and $943 million for the nine months ended June 29, 2024 and July 1, 2023, respectively, and a $448 million goodwill impairment for the nine months ended July 1, 2023.

• Cash provided by operating activities for the first nine months of fiscal 2024 was $2.0 billion, an increase of $544 million compared to the first nine months of fiscal 2023, due to $377 million of higher earnings, net of non-cash items, and a $167 million increase in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• An increase of $469 million due to an increase of $215 million in the net changes in other operating assets and liabilities in the first nine months of fiscal 2024, compared to a decrease of $254 million in fiscal 2023, primarily driven by performance-based compensation.

• An increase of $111 million due to a decrease in inventory of $249 million in the first nine months of fiscal 2024, compared to a decrease of $138 million in the first nine months of fiscal 2023, primarily driven by decreased average cost of inventory and lower volume of livestock.

• Partially offset by:

• A decrease of $165 million due to a decrease in income taxes payable/receivable of $20 million during the first nine months of fiscal 2024, compared to an increase of $145 million in the first nine months of fiscal 2023 due to an increase in taxable income and a tax refund received in the first nine months of fiscal 2023 related to fiscal 2022.

• A decrease of $145 million due to a decrease in accounts payable of $252 million during the first nine months of fiscal 2024, compared to a decrease of $107 million in the first nine months of fiscal 2023, primarily due to lower input costs and decrease in days payables outstanding.

• A decrease of $103 million due to a decrease in accounts receivable of $73 million in the first nine months of fiscal 2024, compared to a decrease of $176 million in the first nine months of fiscal 2023. The reduced decline in accounts receivable was primarily due to level of sales in the last few weeks of each quarter end.

Cash Flows from Investing Activities

in millions			Nine Months Ended
			June 29, 2024						July 1, 2023
Additions to property, plant and equipment			$	(884)					$	(1,564)
Proceeds from sale of (purchases of) marketable securities, net			(2)						(1)
Acquisition, net of cash acquired			—						(262)
Acquisition of equity investments			(28)						(50)
Other, net			60						5
Net cash used for investing activities			$	(854)					$	(1,872)

• 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.

• We expect capital expenditures between $1.2 billion and $1.3 billion for fiscal 2024. Capital expenditures include investments in profit improvement projects as well as projects for maintenance and repair. This includes completion of capacity expansion projects as well as new equipment, automation technology and processes for product innovation.

• Acquisition, net of cash acquired for the nine months ended July 1, 2023 included $223 million, net of cash acquired, for the acquisition of Williams Sausage Company and $39 million for the 60% equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products.

Cash Flows from Financing Activities

in millions			Nine Months Ended
			June 29, 2024						July 1, 2023
Proceeds from issuance of debt			$	2,391					$	1,117
Payments on debt			(347)						(175)
Proceeds from issuance of commercial paper			1,649						7,015
Repayments of commercial paper			(2,240)						(7,015)
Purchases of Tyson Class A common stock			(44)						(343)
Dividends			(513)						(503)
Stock options exercised			9						10
Other, net			(22)						(5)
Net cash provided by financing activities			$	883					$	101

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

• Payments on debt during the nine months ended June 29, 2024 included a payment of $250 million on our term loan facility due May 2026.

• Purchases of Tyson Class A stock included:

• $300 million of cash paid for shares repurchased pursuant to our share repurchase program during the nine months ended July 1, 2023.

• $44 million and $43 million of shares repurchased to fund certain obligations under our equity compensation programs during the nine months ended June 29, 2024 and July 1, 2023, respectively.

• Dividends paid during the nine months ended June 29, 2024 reflected a 2% increase to our fiscal 2023 quarterly dividend rate.

Liquidity

in millions
			Commitments Expiration Date						Facility Amount						Outstanding Letters of Credit (no draw downs)						Amount Borrowed						Amount Available at June 29, 2024
Cash and cash equivalents																											$	2,569
Short-term investments																											13
Revolving credit facility			September 2026						$	2,250					—						—						2,250
Commercial paper																											—
Total liquidity																											$	4,832

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

• At June 29, 2024, we had current debt of $1,320 million, which we intend to pay with our existing cash balance, 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 nine months ended June 29, 2024. Under the terms of the facility, we have the option to establish incremental commitment increases of up to $500 million if certain conditions are met.

• We expect net interest expense to approximate $395 million for fiscal 2024.

• Our current ratio was 1.8 to 1 at June 29, 2024 and 1.3 to 1 at September 30, 2023. The increase in fiscal 2024 is primarily due to increased cash and cash equivalents and decreased current debt.

• At June 29, 2024, approximately $683 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 June 29, 2024, 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 June 29, 2024, 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.

Credit Ratings

Term Loan Facility due May 2028

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 commitment fee on any unused borrowing capacity and the borrowing spread on the outstanding principal balance of our term loan facility due May 2028 that corresponds to the applicable ratings levels from S&P and Moody’s.

Ratings Level (Moody’s/S&P)			Commitment Fee			Borrowing Spread
Baal/BBB+ or above			0.100		%	1.625		%
Baa2/BBB (current level)			0.125		%	1.750		%
Baa3/BBB- or lower			0.175		%	1.875		%

Revolving Credit Facility

S&P applicable rating is “BBB” and 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+			0.100		%	1.125		%
Baa2/BBB (current level)			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 and term loan facilities contain 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 June 29, 2024, 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 September 30, 2023. 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 nine months ended June 29, 2024. 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.

Our qualitative assessment for the first three quarters of fiscal 2024 did not indicate that it was more likely than not the fair value of any of our reporting units or indefinite lived intangibles was less than the carrying amount, and as such, no quantitative test was deemed necessary. We consider reporting units and indefinite lived intangibles that have 20% or less excess fair value over carrying amount to have a heightened risk of impairment. The following reporting units and indefinite lived intangibles were considered at heightened risk of impairment as of the date of the most recent estimated fair value determination, which was in the fourth quarter of fiscal 2023: our Chicken segment reporting units, our Beef reporting unit and our Pork reporting unit with goodwill totaling $3.1 billion, $0.3 billion and $0.4 billion, respectively, and two Prepared Foods brands with carrying values of $0.5 billion and $0.3 billion.

We continuously evaluate the changing macroeconomic conditions including inflationary pressures, rising interest rates, demand outlook and export markets as well as the Company's market capitalization. Our reporting units with heightened risk of future impairments with $3.8 billion carrying value, as well as a brand with $0.5 billion carrying value, all had less than 10% of excess fair value above carrying value as of the date of the most recent estimated fair value determination. Consequently, their estimated fair values remain highly sensitive to future discount rate increases, changing macroeconomic conditions and achievement of projected long-term operating margins. Although our remaining reporting units and indefinite life intangible assets generally had more than 20% excess fair value over carrying amount as of the date of the most recent estimated fair value determination, they are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

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. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2024, 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). 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 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) global pandemics have had, and may in the future have, an adverse impact on our business and operations; (ii) the effectiveness of restructuring or financial excellence programs; (iii) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (iv) cyber attacks, 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 relocation of 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 September 30, 2023 and our other periodic filings with the SEC.