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 28, 2024. 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 a world-class food company and recognized leader in protein. Founded in 1935 by John W. Tyson, it has grown under four generations of family leadership. The Company is unified by this purpose: Tyson Foods. We Feed the World Like FamilyTM and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®. Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, sustainably, and affordably, now and for future generations. 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 China, Malaysia, Mexico, South Korea, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Overview

General

Sales were relatively flat in the second quarter and increased 1.2%, or $306 million, in the first six months of fiscal 2025, driven by increased sales in our Beef and Chicken segments, partially offset by decreased sales in our Pork and Prepared Foods segments. Sales were negatively impacted in the second quarter and the first six months by 2.6% and 1.3%, respectively, from the recognition of $343 million of legal contingency accruals. Operating income of $100 million for the second quarter of fiscal 2025 was down 68% as compared to the second quarter of fiscal 2024, as we experienced lower operating income in our Beef and Pork segments, partially offset by higher operating income in our Chicken and Prepared Foods segments and International/Other.

Additionally, in the second quarter of fiscal 2025, our operating income was impacted by $343 million of legal contingency accruals, $43 million in network optimization plan charges, $23 million of plant closures and disposal charges and $6 million in brand discontinuation charges. In the second quarter of fiscal 2024, our operating income was impacted by $54 million of costs related to a production facility fire in the Netherlands and our subsequent decision to sell the facility and $39 million of plant closures and disposal charges.

Operating income of $680 million for the first six months of fiscal 2025 was up 25% compared to the first six months of fiscal 2024 as we experienced higher operating income in our Chicken segment and International/Other, partially offset by lower operating income for our Beef, Pork and Prepared Foods segments. In the first six months of fiscal 2025, our operating income was impacted by $343 million of legal contingency accruals, $116 million in network optimization plan charges, $23 million of plant closures and disposal charges and $12 million in brand discontinuation charges. In the first six months ended March 30, 2024, our operating income was impacted by $114 million of plant closures and disposal charges, $80 million of costs related to a production facility fire in the Netherlands and our subsequent decision to sell the facility, $73 million in legal contingency accruals and $31 million of restructuring and related charges, partially offset by the benefit of $24 million of insurance proceeds, net of costs incurred related to facility fires.

Market Environment

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) was flat in the second quarter of fiscal 2025 as compared to the same period in fiscal 2024. The Beef segment continues to experience limited supply of market-ready cattle as well as increased cattle costs. Additionally, uncertainty exists regarding the timing of the anticipated cattle herd rebuilding. The Pork segment experienced sufficient supply of market-ready hogs 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.

We are subject to changes in import and export policies, including trade restrictions, new or increased tariffs or quotas, and customs restrictions through our international sales and operations. Our exports account for less than 10% of our business, primarily composed of chicken leg quarters and paws, boxed beef and variety meats of all proteins. As a result of the recent changes in trade policies and tariffs both domestically and internationally, we may experience some sales disruptions and other impacts associated with tariffs. There is uncertainty regarding the impact the current changes will have on the price and demand of our products in the affected countries, commodity pricing and other general economic conditions, and uncertainty in future changes that may have a material impact. We will continue to analyze the impact of supply chain and tariff impacts in the upcoming months.

Margins

Our total operating margin was 0.8% in the second quarter of fiscal 2025. Operating margins by segment were as follows:

• Beef – (5.0)%

• Pork – (15.7)%

• Chicken – 6.3%

• Prepared Foods – 10.2%

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 first quarter of fiscal 2025, the Company initiated a network optimization plan to optimize our global operations and logistics network. We expect to incur costs related to the network optimization plan over a multi-year period. We recognized charges of $43 million and $116 million in the second quarter and first six months of fiscal 2025, respectively, related to the network optimization plan, which primarily included the closure of two facilities in the Prepared Foods segment, a non-harvesting facility closure in the Beef segment and asset write-offs in the Chicken segment and International/Other. All estimated charges related to actions approved through March 29, 2025 have been recognized and included $47 million that have resulted or will result in cash outflows and $69 million of non-cash for the first six months of fiscal 2025. We expect to incur additional charges in the future as additional actions are approved. In April 2025, following a strategic review of our domestic logistics and storage network, the Company approved a plan to execute various long-term cold storage service agreements and the sale of multiple Tyson-owned and operated distribution centers. For further description refer to Part I, Item I, Notes to the Consolidated Condensed Financial Statements, Note 5: Restructuring and Related Charges.

Summary of Results

Sales

in millions			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Sales			$	13,074					$	13,072					$	26,697					$	26,391
Change in sales volume			—		%										0.8		%
Change in average sales price			2.6		%										1.7		%
Sales growth			—		%										1.2		%

Second quarter – Fiscal 2025 vs Fiscal 2024

• Sales Volume** – Volumes were essentially flat, accounting for a $3 million decrease in sales as increased sales volume in our Chicken segment was offset by decreased 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 $348 million, driven by increased pricing in our Beef, Pork and Prepared Foods segments, partially offset by lower average sales prices in our Chicken segment.

◦The above changes in average sales price exclude a $343 million reduction of Sales for the recognition of legal contingency accruals recorded in the second quarter of fiscal 2025.

Six months – Fiscal 2025 vs Fiscal 2024

• Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for a $205 million increase in sales driven by increased sales volume in our Beef and Chicken segments, partially offset by decreased sales volume in our Pork and Prepared Foods segments.

• Average Sales Price** – Sales were positively impacted by higher average sales prices, which accounted for an increase of $444 million, driven by increased pricing in our Beef, Pork and Prepared Foods segments, partially offset by lower average sales prices in our Chicken segment.

◦The above changes in average sales price exclude a $343 million reduction of Sales from the recognition of legal contingency accruals recorded in the second quarter of fiscal 2025.

Cost of Sales

in millions			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Cost of sales			$	12,474					$	12,206					$	25,002					$	24,702
Gross profit			600						866						1,695						1,689
Cost of sales as a percentage of sales			95.4		%				93.4		%				93.7		%				93.6		%

Second quarter – Fiscal 2025 vs Fiscal 2024

• Cost of sales increased $268 million. Lower sales volume decreased cost of sales $3 million while higher input cost per pound increased cost of sales by $271 million.

• The $271 million impact of higher input cost per pound was impacted by:

• Increase in cattle costs of approximately $470 million in our Beef segment.

• Increase in hog costs of approximately $100 million in our Pork segment.

• Increase in raw material and other input costs of approximately $80 million in our Prepared Foods segment.

• Increase of $43 million related to network optimization plan charges.

• Decrease of approximately $110 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease of $54 million in International/Other from costs recognized in fiscal 2024 related to a production facility fire in the Netherlands and the subsequent decision to sell the facility.

• Decrease in freight and transportation costs of approximately $30 million.

• Decrease due to net derivative losses of $24 million in the second quarter of fiscal 2025, compared to net derivative losses of $46 million in the second quarter of fiscal 2024 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 of $16 million due to lower plant closures and disposal charges.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes and lower operating costs.

Six months – Fiscal 2025 vs Fiscal 2024

• Cost of sales increased $300 million. Higher sales volume increased cost of sales by $192 million while higher input cost per pound increased cost of sales by $108 million.

• The $108 million impact of higher input cost per pound was impacted by:

• Increase in cattle costs of approximately $510 million in our Beef segment.

• Increase in hog costs of approximately $160 million in our Pork segment.

• Increase in raw material and other input costs of approximately $160 million in our Prepared Foods segment.

• Increase of $114 million related to network optimization plan charges.

• Increase of $24 million in our Chicken segment from reduced insurance proceeds, net of costs, related to a production facility fire in the fourth quarter of fiscal 2021.

• Decrease of approximately $265 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease of $91 million due to lower plant closures and disposal charges.

• Decrease of $80 million in International/Other from costs recognized in fiscal 2024 related to a production facility fire in the Netherlands and the subsequent decision to sell the facility.

• Decrease of $73 million related to the recognition of legal contingency accruals in our Beef and Pork segments in fiscal 2024.

• Decrease in freight and transportation costs of approximately $70 million.

• Decrease due to net derivative losses of $31 million in the first six months of fiscal 2025, compared to net derivative losses of $51 million in the first six months of fiscal 2024 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.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes and lower operating costs.

Selling, General and Administrative

in millions			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Selling, general and administrative expense			$	500					$	554					$	1,015					$	1,146
As a percentage of sales			3.8		%				4.2		%				3.8		%				4.3		%

Second quarter – Fiscal 2025 vs Fiscal 2024

• Decrease of $54 million in selling, general and administrative was primarily driven by:

• Decrease of $18 million in marketing, advertising and promotion expenses.

• Decrease of $17 million in employee costs primarily from performance-based compensation.

• Decrease of $17 million in professional fees.

Six months – Fiscal 2025 vs Fiscal 2024

• Decrease of $131 million in selling, general and administrative was primarily driven by:

• Decrease of $41 million in marketing, advertising and promotion expenses.

• Decrease of $35 million in employee costs primarily from performance-based compensation.

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

• Decrease of $22 million in professional fees.

Interest (Income) Expense

in millions			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Interest income			$	(17)					$	(14)					$	(42)					$	(24)
Interest expense			110						111						230						216

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• The increase in interest income for the second quarter and six months ended March 29, 2025 was primarily due to higher cash and cash equivalents held during the quarter.

• The increase in interest expense for the six months ended March 29, 2025 was primarily due to interest expense related to our 5.40% 2029 Notes and 5.70% 2034 Notes, partially offset by lower interest expense related to the repayment of the term loan due May 2026 in the second quarter of fiscal 2025 and the repayment of the August 2024 senior notes in the fourth quarter of fiscal 2024.

Other (Income) Expense, net

in millions			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Total other (income) expense, net			$	(23)					$	12					$	(16)					$	(13)

Second quarter and six months – Fiscal 2025

• Included $15 million of joint venture earnings and $6 million of foreign exchange gains in the second quarter of fiscal 2025. Included $27 million of joint venture earnings and $7 million of production facilities fire insurance proceeds, partially offset by $18 million of foreign exchange losses in the first six months of fiscal 2025.

Second quarter and six months – Fiscal 2024

• Included $15 million of foreign exchange losses in the second quarter of fiscal 2024. Included $10 million of income related to an amendment of a postretirement benefit plan in the first six months of fiscal 2024.

Effective Tax Rate

			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
			51.0		%				26.9		%				25.1		%				28.0		%

Second quarter – Fiscal 2025 vs Fiscal 2024

• The percentage impacts of items on the effective tax rate were greater in the second quarter of fiscal 2025 due to the level of pretax income in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024.

• The second quarter of fiscal 2025 was increased by the impact of net unfavorable permanent book-to-tax differences and changes in unrecognized tax benefits.

• The second quarter of fiscal 2024 was impacted by increased foreign losses for which a tax benefit cannot be recognized.

Six months – Fiscal 2025 vs Fiscal 2024

• The effective tax rate for the first six months of fiscal 2025 was increased by changes in unrecognized tax benefits and decreased by the release of a $9 million valuation allowance on certain losses in the Netherlands due to tax legislation enacted in the first quarter of fiscal 2025.

• Increased foreign losses in fiscal 2024 resulted in a higher effective tax rate compared to fiscal 2025.

Net Income Attributable to Tyson

in millions, except per share data			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Net income attributable to Tyson			$	7					$	145					$	366					$	252
Net income attributable to Tyson – per diluted share			0.02						0.41						1.03						0.71

Second quarter – Fiscal 2025 – Net income attributable to Tyson included the following items:

• $343 million pretax, or ($0.73) per diluted share, related to the recognition of legal contingency accruals.

• $43 million pretax, or ($0.10) per diluted share, related to network optimization plan charges.

• $23 million pretax, or ($0.05) per diluted share, of plant closures and disposal charges.

• $6 million pretax, or ($0.02) per diluted share, of brand discontinuation charges.

Six months – Fiscal 2025 – Net income attributable to Tyson included the following items:

• $343 million pretax, or ($0.73) per diluted share, related to the recognition of legal contingency accruals.

• $116 million pretax, or ($0.26) per diluted share, related to network optimization plan charges.

• $23 million pretax, or ($0.05) per diluted share, of plant closures and disposal charges.

• $12 million pretax, or ($0.03) per diluted share, of brand discontinuation charges.

• $7 million pretax, or $0.01 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $9 million post tax, or $0.03 per diluted share, of benefit due to newly enacted tax legislation that resulted in the release of a valuation allowance on losses related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

Second quarter – Fiscal 2024 – Net income attributable to Tyson included the following items:

• $54 million pretax, or ($0.15) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

• $39 million pretax, or ($0.06) per diluted share, of plant closures and disposal charges.

Six months – Fiscal 2024 – Net income attributable to Tyson included the following items:

• $114 million pretax, or ($0.22) per diluted share, of plant closures and disposal charges.

• $80 million pretax, or ($0.22) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

• $73 million pretax, or ($0.16) per diluted share, related to the recognition of a legal contingency accrual.

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

• $27 million pretax, or $0.06 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

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												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Beef			$	5,196					$	4,954					$	10,531					$	9,977
Pork			1,244						1,486						2,861						3,003
Chicken			4,141						4,065						8,206						8,098
Prepared Foods			2,396						2,404						4,869						4,947
International/Other			566						580						1,150						1,162
Intersegment sales			(469)						(417)						(920)						(796)
Total			$	13,074					$	13,072					$	26,697					$	26,391

in millions			Operating Income (Loss)
			Three Months Ended												Six Months Ended
			March 29, 2025						March 30, 2024						March 29, 2025						March 30, 2024
Beef(a)			$	(258)					$	(35)					$	(322)					$	(241)
Pork(b)			(195)						(1)						(136)						38
Chicken(c)			262						158						613						335
Prepared Foods(d)			244						230						453						473
International/Other(e)			47						(40)						72						(62)
Total			$	100					$	312					$	680					$	543

(a) Beef segment results for the three and six months ended March 29, 2025 included $16 million and $48 million, respectively, of network optimization plan charges and a $93 million legal contingency accrual. Beef segment results for the six months ended March 30, 2024 included a $45 million legal contingency accrual and $41 million of plant closures and disposal charges.

(b) Pork segment results for the three and six months ended March 29, 2025 included a $250 million legal contingency accrual. Pork segment results for the three and six months ended March 30, 2024 included $34 million of plant closures and disposal charges. Pork segment results for the six months ended March 30, 2024 included a $28 million legal contingency accrual.

(c) Chicken segment results for the three and six months ended March 29, 2025 included $21 million and $32 million, respectively, of network optimization plan charges, $6 million and $12 million, respectively, of brand discontinuation charges and $23 million of plant closures and disposal charges. Chicken segment results for the six months ended March 30, 2024 included $39 million of plant closures and disposal charges and $24 million of insurance proceeds, net of costs incurred.

(d) Prepared Foods segment results for the six months ended March 29, 2025 included $25 million of network optimization plan charges. Prepared Foods segment results for the six months ended March 30, 2024 included $24 million of restructuring and related charges.

(e) International/Other results for the three and six months ended March 29, 2025 included $6 million and $11 million, respectively, of network optimization plan charges. International/Other results for the three and six months ended March 30, 2024 included $54 million and $80 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																		Six Months Ended
			March 29, 2025						March 30, 2024						Change						March 29, 2025						March 30, 2024						Change
Sales			$	5,196					$	4,954					$	242					$	10,531					$	9,977					$	554
Sales volume change															(1.4)		%																2.0		%
Average sales price change															8.2		%																4.5		%
Operating income (loss)			$	(258)					$	(35)					$	(223)					$	(322)					$	(241)					$	(81)
Operating margin			(5.0)		%				(0.7)		%										(3.1)		%				(2.4)		%

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• Sales Volume - Sales volume decreased in the second quarter of fiscal 2025 primarily due to lower head harvested, partially offset by higher average carcass weights. Sales volume for the first six months increased primarily due to higher average carcass weights.

• Average Sales Price** - Average sales price increased in the second quarter and first six months of fiscal 2025 primarily due to increased input costs and strong demand. The change in average sales price excludes a $93 million reduction of Sales from the recognition of a legal contingency accrual recorded in the second quarter of fiscal 2025.

• Operating Income (Loss)** - Operating income decreased in the second quarter and first six months of fiscal 2025 as Beef margins remained compressed, partially offset by improved operational execution. Additionally, operating income for the second quarter and first six months of fiscal 2025 was impacted by the recognition of legal contingency accruals and network optimization plan charges.

Pork Segment Results

in millions			Three Months Ended																		Six Months Ended
			March 29, 2025						March 30, 2024						Change						March 29, 2025						March 30, 2024						Change
Sales			$	1,244					$	1,486					$	(242)					$	2,861					$	3,003					$	(142)
Sales volume change															(3.8)		%																(2.1)		%
Average sales price change															4.3		%																5.7		%
Operating income (loss)			$	(195)					$	(1)					$	(194)					$	(136)					$	38					$	(174)
Operating margin			(15.7)		%				(0.1)		%										(4.8)		%				1.3		%

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• Sales Volume** - Sales volume decreased in the second quarter and first six months of fiscal 2025 due to production decreases associated with a plant closure in 2024 which were partly offset by production increases at other facilities and higher average carcass weights.

• Average Sales Price** - Average sales price increased in the second quarter and first six months of fiscal 2025 as demand for our pork products remained strong. The change in average sales price excludes a $250 million reduction of Sales from the recognition of a legal contingency accrual recorded in the second quarter of fiscal 2025.

• Operating Income (Loss)** - Operating income (loss) decreased in the second quarter and first six months of fiscal 2025 due to compressed pork margins and the recognition of a legal contingency accrual in the second quarter of fiscal 2025, partially offset by lower operating costs, improved results in our live hog operations and lapping the impacts of plant closures and disposals recorded in the second quarter of fiscal 2024.

Chicken Segment Results

in millions			Three Months Ended																		Six Months Ended
			March 29, 2025						March 30, 2024						Change						March 29, 2025						March 30, 2024						Change
Sales			$	4,141					$	4,065					$	76					$	8,206					$	8,098					$	108
Sales volume change															3.0		%																2.2		%
Average sales price change															(1.1)		%																(0.9)		%
Operating income			$	262					$	158					$	104					$	613					$	335					$	278
Operating margin			6.3		%				3.9		%										7.5		%				4.1		%

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• Sales Volume** - Sales volume increased in the second quarter and first six months of fiscal 2025 primarily due to increased domestic production, partially offset by inventory growth.

• Average Sales Price** - Average sales price decreased in the second quarter and first six months of fiscal 2025 primarily due to the impact of lower input costs.

• Operating Income** - Operating income increased in the second quarter and first six months of fiscal 2025 driven by operational execution, improved volumes and $110 million and $265 million of net decreases in feed ingredient costs, respectively, which was partially offset by associated decreases in average sales price. Additionally, operating income in the second quarter was impacted by charges related to prior plant closures and disposals as well as network optimization plan charges. Operating income in the first six months of fiscal 2025 was impacted by reduced insurance proceeds, net of costs and network optimization plan charges, partially offset by lower plant closures and disposal charges.

Prepared Foods Segment Results

in millions			Three Months Ended																		Six Months Ended
			March 29, 2025						March 30, 2024						Change						March 29, 2025						March 30, 2024						Change
Sales			$	2,396					$	2,404					$	(8)					$	4,869					$	4,947					$	(78)
Sales volume change															(2.6)		%																(2.9)		%
Average sales price change															2.3		%																1.3		%
Operating income			$	244					$	230					$	14					$	453					$	473					$	(20)
Operating margin			10.2		%				9.6		%										9.3		%				9.6		%

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• Sales Volume** – Sales volume decreased in the second quarter and first six months of fiscal 2025 due to a challenging consumer environment.

• Average Sales Price** – Average sales price increased in the second quarter and first six months of 2025 primarily due to the pass through of increased raw material costs.

• Operating Income** – Operating income increased in the second quarter of 2025 primarily due to higher average sales price and lower selling, general and administrative costs and improved operational execution, partly offset by increased raw material costs. Operating income decreased in the first six months of fiscal 2025 primarily due to increased raw material costs and network optimization plan charges, partially offset by higher average sales price and lower freight costs, selling, general and administrative costs, restructuring and related charges and improved operational execution.

International/Other Results

in millions			Three Months Ended																		Six Months Ended
			March 29, 2025						March 30, 2024						Change						March 29, 2025						March 30, 2024						Change
Sales			$	566					$	580					$	(14)					$	1,150					$	1,162					$	(12)
Operating income (loss)			47						(40)						87						72						(62)						134

Second quarter and six months – Fiscal 2025 vs Fiscal 2024

• Sales** – Sales for the second quarter and first six months of fiscal 2025 were relatively flat.

• Operating Income (Loss)** – Operating income increased in the second quarter and first six months of fiscal 2025 primarily due to improved performance and lapping the impacts of a production facility fire in the first quarter of fiscal 2024 and the subsequent decision to sell the facility, partly offset by network optimization charges.

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			Six Months Ended
			March 29, 2025						March 30, 2024
Net income			$	380					$	262
Non-cash items in net income			805						843
Net changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			28						116
(Increase) decrease in inventories			(229)						272
Increase (decrease) in accounts payable			(3)						(325)
Increase (decrease) in income taxes payable/receivable			(41)						57
Net changes in other operating assets and liabilities			(94)						(48)
Net cash provided by operating activities			$	846					$	1,177

• Non-cash items in net income primarily included depreciation and amortization of $700 million and $722 million for the six months ended March 29, 2025 and March 30, 2024, respectively.

• Cash provided by operating activities for the first six months of fiscal 2025 was $846 million, a decrease of $331 million compared to the first six months of fiscal 2024, as the $80 million of higher earnings, net of non-cash items, was more than offset by a $411 million decrease in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• A decrease of $501 million due to an increase in inventory of $229 million in the first six months of fiscal 2025, compared to a decrease of $272 million in the first six months of fiscal 2024, primarily due to increased average cost of inventory and higher volume of livestock.

• A decrease of $98 million due to a decrease in income taxes payable/receivable of $41 million in the first six months of fiscal 2025, compared to an increase of $57 million in the first six months of fiscal 2024, primarily driven by an increase in tax payments as a result of higher taxable income associated with payments made in fiscal 2025 compared to fiscal 2024.

• Partially offset by:

• An increase of $322 million due to a decrease in accounts payable of $3 million during the first six months of fiscal 2025, compared to a decrease of $325 million in the first six months of fiscal 2024, primarily due to a reduction in accounts payable in fiscal 2024 associated with lower input costs.

Cash Flows from Investing Activities

in millions			Six Months Ended
			March 29, 2025						March 30, 2024
Additions to property, plant and equipment			$	(464)					$	(621)
Proceeds from sale of (purchases of) marketable securities, net			(3)						(1)
Acquisition of equity investments			(2)						(26)
Other, net			55						27
Net cash used for investing activities			$	(414)					$	(621)

• 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 billion and $1.2 billion for fiscal 2025. 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.

Cash Flows from Financing Activities

in millions			Six Months Ended
			March 29, 2025						March 30, 2024
Proceeds from issuance of debt			$	31					$	2,327
Payments on debt			(816)						(308)
Proceeds from issuance of commercial paper			—						1,649
Repayments of commercial paper			—						(2,240)
Purchases of Tyson Class A common stock			(16)						(31)
Dividends			(349)						(342)
Stock options exercised			19						8
Other, net			(1)						(12)
Net cash (used for) provided by financing activities			$	(1,132)					$	1,051

• During the first six 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 six months ended March 29, 2025 and March 30, 2024 included payments of $750 million and $250 million, respectively, on our term loan due May 2026.

• Dividends paid during the six months ended March 29, 2025 reflected a 2% increase to our fiscal 2024 quarterly dividend rate.

Liquidity

in millions
			Commitments Expiration Date						Facility Amount						Outstanding Letters of Credit (no draw downs)						Amount Borrowed						Amount Available at March 29, 2025
Cash and cash equivalents																											$	992
Short-term investments																											—
Revolving credit facility			September 2026						$	2,250					—						—						2,250
Commercial paper																											—
Total liquidity																											$	3,242

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

• At March 29, 2025, we had current debt of $896 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 six months ended March 29, 2025.

• On April 15, 2025, subsequent to the end of our second quarter of fiscal 2025, we terminated our existing revolving credit facility and entered into a new $2.5 billion revolving credit facility. The new revolving credit facility will mature, and the commitments thereunder will terminate, in April 2030 with options for two one-year extensions. Under the terms of this revolving credit facility, we have the option to establish incremental commitment increases of up to an aggregate amount of $500 million if certain conditions are met. The covenants and other terms of the new facility are generally consistent with those of the terminated facility.

• We expect net interest expense to approximate $375 million for fiscal 2025.

• Our current ratio was 1.7 to 1 at March 29, 2025 and 2.0 to 1 at September 28, 2024. The decrease in fiscal 2025 is primarily due to decreased cash and cash equivalents and increased current debt.

• At March 29, 2025, $646 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 March 29, 2025, 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 March 29, 2025, we had no commercial paper outstanding under this program.

In April 2025, subsequent to the end of our second quarter of fiscal 2025, we increased the aggregate maximum principal amount to $1.75 billion in conjunction with the execution of the new revolving credit facility. 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

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

Ratings Level (Moody’s/S&P)			Facility Fee Rate			Borrowing Spread
A3/A- or above			0.090		%	0.785		%
Baal/BBB+			0.100		%	0.900		%
Baa2/BBB (current level)			0.110		%	1.015		%
Baa3/BBB-			0.150		%	1.100		%
Ba1/BB+ or lower			0.200		%	1.175		%

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 March 29, 2025, 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 28, 2024. 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 six months ended March 29, 2025. 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 September 28, 2024, we assess goodwill and indefinite life assets for impairment at least annually as of the first day of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our qualitative assessment for the first and second quarters of fiscal 2025 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 2024: our Beef and Chicken segment reporting units, with total goodwill of approximately $0.3 billion and $3.0 billion, respectively, and one Prepared Foods brand with a carrying value of $0.5 billion.

We continuously evaluate the changing macro-economic 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 $3.3 billion carrying value, as well as a brand with $0.5 billion carrying value, all had less than 20% of excess fair value above carrying value as of the date of the most recent estimated fair value determination with our Beef reporting unit having less than 10% of excess fair value above carrying value. Consequently, their estimated fair values, especially our Beef reporting unit, remain highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins. 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 2025, 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 28, 2024 and our other periodic filings with the SEC.