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What changed in Tyson Foods's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Tyson Foods's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+315 added−389 removedSource: 10-K (2024-11-12) vs 10-K (2023-11-13)

Top changes in Tyson Foods's 2024 10-K

315 paragraphs added · 389 removed · 263 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are reimagining our people and community impact by enabling workers to succeed while supporting the growth of our communities. We aim to drive product responsibility from farm to table by delivering value to consumers with high-quality, sustainable, nutritious protein through our leading portfolio of products.
Biggest changeWe aim to drive product responsibility from farm to table by delivering value to consumers with high-quality, nutritious protein through our leading portfolio of products. We are working toward sustaining natural resources by driving practices in our own operations and supply chains to build a robust food system that supports current and future generations.
Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.
Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, convenience stores, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets.
Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets. RAW MATERIALS AND SOURCES OF SUPPLY Beef The primary raw materials used in our beef operations are live cattle.
Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, convenience stores, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets. RAW MATERIALS AND SOURCES OF SUPPLY Beef The primary raw materials used in our beef operations are live cattle.
We build the Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, Aidells®, ibp® and State Fair® brands while supporting strong regional and emerging brands primarily through distinctive brand and product advertising, promotion and public relations efforts focused toward key consumer targets with specific needs.
We build the Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp® brands while supporting strong regional and emerging brands primarily through distinctive brand and product advertising, promotion and public relations efforts focused toward key consumer targets with specific needs.
We have the following foreign operations: • Cobb-Vantress, a chicken breeding stock subsidiary, has business interests in Argentina, Brazil, China, Colombia, the Dominican Republic, India, the Netherlands, New Zealand, Peru, the Philippines, Spain, Turkey, and the United Kingdom. • Tyson Asia-Pacific consists of vertically-integrated chicken production operations in Thailand, multi-protein further-processing operations in Malaysia, a beef production operation in Australia, a producer and distributor of value-added and cooked chicken and beef products in the Kingdom of Saudi Arabia, and joint venture interests in two non-consolidated poultry businesses in Malaysia and one in the Kingdom of Saudi Arabia. • Tyson China-Korea, with locations in China and South Korea, consists of vertically-integrated chicken production operations, multi-protein further-processing operations, and a joint venture interest in a non-consolidated chicken processing business.
We have the following foreign operations: • Cobb-Vantress, a chicken breeding stock subsidiary, has business interests in Argentina, Brazil, China, the Dominican Republic, India, the Netherlands, New Zealand, Peru, the Philippines, Spain, Turkey, and the United Kingdom. • Tyson Asia-Pacific consists of vertically-integrated chicken production operations in Thailand, multi-protein further-processing operations in Malaysia, a beef production operation in Australia, a producer and distributor of value-added and cooked chicken and beef products in the Kingdom of Saudi Arabia, and joint venture interests in two non-consolidated poultry businesses in Malaysia and one in the Kingdom of Saudi Arabia. • Tyson China-Korea, with locations in China and South Korea, consists of vertically-integrated chicken production operations, multi-protein further-processing operations, and a joint venture interest in a non-consolidated chicken processing business.
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 8 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 our 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 plan to relocate certain corporate team members to our world headquarters in Springdale, Arkansas; (xv) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (xvi) the effect of climate change and any legal or regulatory response thereto; (xvii) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws; (xviii) adverse results from litigation; (xix) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xx) impairment in the carrying value of our goodwill or indefinite life intangible assets; (xxi) our participation in a multiemployer pension plan; (xxii) volatility in capital markets or interest rates; (xxiii) risks associated with our commodity purchasing activities; (xxiv) the effect of, or changes in, general economic conditions; (xxv) impacts on our operations caused by factors and forces beyond our control, such as natural disasters, fire, bioterrorism, pandemics, armed conflicts or extreme weather; (xxvi) failure to maximize or assert our intellectual property rights; (xxvii) effects related to changes in tax rates, valuation of deferred tax assets and liabilities, or tax laws and their interpretation; and (xxviii) those factors listed under Item 1A.
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 8 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 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; (xv) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (xvi) 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; (xvii) the effect of climate change and any legal or regulatory response thereto; (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 listed under Item 1A.
This segment also includes sales from specialty products such as hides and variety meats, as well as logistics operations to move products through the supply chain. 3 Pork Pork includes our operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products.
This segment also includes sales from specialty products such as hides, rendered products and variety meats, as well as logistics operations to move products through the supply chain. 3 Pork Pork includes our operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products.
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).
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).
Sales to Walmart Inc. were included in all of our segments. Any extended discontinuance of sales to this customer could, if not replaced, have a material impact on our operations. No other single customer or customer group represented more than 10% of fiscal 2023 consolidated sales.
Sales to Walmart Inc. were included in all of our segments. Any extended discontinuance of sales to this customer could, if not replaced, have a material impact on our operations. No other single customer or customer group represented more than 10% of fiscal 2024 consolidated sales.
Consistent with this focus, we conducted our fourth OneTyson engagement survey, that included corporate and frontline team members for the purpose of evaluating our team member experience, internal performance and how we compared to other companies in multiple areas.
Consistent with this focus, we conducted our fifth OneTyson engagement survey, that included corporate and frontline team members for the purpose of evaluating our team member experience, internal performance and how we compared to other companies in multiple areas.
Tyson China also sells beef, pork, and chicken products imported from Tyson production facilities in the United States and other global operations. • Tyson Europe sells chicken products throughout the United Kingdom and Europe produced from our other global operations and co-packer arrangements and has a chicken further processing operation in the Netherlands. • Vibra Agroindustrial S.A., a joint venture in Brazil in which we have a minority interest, is a vertically-integrated chicken processing business. • Holding Agro Industrial S.A., a joint venture in Argentina and Uruguay in which we have a minority interest, is a vertically-integrated chicken processing business. • Godrej Tyson Foods, a joint venture in India in which we have a minority interest, is primarily a chicken processing business. • Tyson Mexico Trading Company, a Mexican subsidiary, sells chicken and prepared foods products primarily from our U.S. operations and co-packer arrangements.
Tyson China also sells beef, pork, and chicken products imported from Tyson production facilities in the United States and other global operations. • Tyson Europe sells chicken products throughout the United Kingdom and Europe produced from our other global operations and co-packer arrangements. • Vibra Agroindustrial S.A., a joint venture in Brazil in which we have a minority interest, is a vertically-integrated chicken processing business. • Holding Agro Industrial S.A., a joint venture in Argentina and Uruguay in which we have a minority interest, is a vertically-integrated chicken processing business. • Tyson Mexico Trading Company, a Mexican subsidiary, sells chicken and prepared foods products primarily from our U.S. operations and co-packer arrangements.
In fiscal 2023, corn, soybean meal and other feed ingredients were major production costs, representing roughly 61% of our cost of growing a live chicken domestically. In addition to feed ingredients to grow the chickens, we use cooking ingredients, packaging materials and cryogenic agents.
In fiscal 2024, corn, soybean meal and other feed ingredients were major production costs, representing roughly 56% of our cost of growing a live chicken domestically. In addition to feed ingredients to grow the chickens, we use cooking ingredients, packaging materials and cryogenic agents.
Our integrated operations consist of breeding stock, contract farmers, feed production, processing, further-processing, marketing and transportation of chicken and related specialty products, including animal and pet food ingredients. Through our wholly-owned subsidiary, Cobb-Vantress, we are one of the leading poultry breeding stock suppliers in the world.
We operate a fully vertically-integrated chicken production process. Our integrated operations consist of breeding stock, contract farmers, feed production, processing, further-processing, marketing and transportation of chicken and related specialty products, including animal and pet food ingredients. Through our wholly-owned subsidiary, Cobb-Vantress, we are one of the leading poultry breeding stock suppliers in the world.
Our vertically-integrated chicken process begins with the grandparent breeder flocks and ends with broilers for processing. Breeder flocks (i.e., grandparents) are raised to maturity in grandparent growing and laying farms where fertile eggs are produced. Fertile eggs are incubated at the grandparent hatchery and produce pullets (i.e., parents).
Our vertically-integrated chicken process begins with breeding our pedigree and great grandparent stock out to produce the grandparent breeder flocks and ends with broilers for processing. Breeder flocks (i.e., grandparents) are raised to maturity in grandparent growing and laying farms where fertile eggs are produced. Fertile eggs are incubated at the grandparent hatchery and produce pullets (i.e., parents).
Talent and Development Our talent strategy and philosophy “Grow With Us” is focused on attracting the best talent, recognizing and rewarding performance, while continually developing, engaging and retaining our team members.
Talent and Development Our talent strategy and philosophy is focused on attracting the best talent, recognizing and rewarding performance, while continually developing, engaging and retaining our team members.
Approximately 33,000 team members in the United States were subject to collective bargaining agreements with various labor unions, with approximately 13% of those team members at locations either under negotiation for contract renewal or included under agreements expiring in fiscal 2024. The remaining agreements expire over the next several years.
Approximately 30,000 team members in the United States were subject to collective bargaining agreements with various labor unions, with approximately 20% of those team members at locations either under negotiation for contract renewal or included under agreements expiring in fiscal 2025. The remaining agreements expire over the next several years.
It also oversees the Company’s key programs and oversees and reviews, at least annually, the Company’s integration of sustainability principles into our business strategy and decision-making. 6 HUMAN CAPITAL MANAGEMENT Employees and Labor Relations As of September 30, 2023, we employed approximately 139,000 team members globally.
It also oversees and reviews, at least annually, the Company’s integration of sustainability principles into our business strategy and decision-making. 6 HUMAN CAPITAL MANAGEMENT Employees and Labor Relations As of September 28, 2024, we employed approximately 138,000 team members globally.
ENVIRONMENTAL REGULATION AND FOOD SAFETY Environmental Regulation Our facilities for processing beef, pork, chicken, turkey and prepared foods, milling feed and housing live chickens and swine are subject to a variety of international, federal, state and local environmental laws and regulations, which include provisions relating to all environmental media - air, land and water, and generally provide for protection of the environment.
ENVIRONMENTAL REGULATION AND FOOD SAFETY Environmental Regulation Our facilities for processing beef, pork, chicken, turkey and prepared foods, milling feed and housing live chickens and swine are subject to many international, federal, state and local environmental laws and regulations, including provisions relating to all environmental media - air, land and water, and generally provide for environmental protection.
In addition to our own internal Food Safety and Quality Assurance oversight and review, our beef, pork, chicken, and prepared foods products are subject to inspection, primarily by the USDA and the United States Food and Drug Administration (“FDA”).
In addition to our own internal Food Safety and Quality Assurance oversight and review, our beef, pork, chicken, and prepared foods products are subject to inspection, primarily by the USDA and the FDA.
Additionally, sales to the military and a portion of sales to international markets are made through independent brokers and trading companies. As part of our commitment to innovation and growth, we have a subsidiary focused on investing in companies developing breakthrough technologies, business models and products to sustainably feed a growing world population.
Additionally, sales to the military and a portion of sales to international markets are made through independent brokers and trading companies. As part of our commitment to innovation and growth, we have a subsidiary focused on investing in companies developing breakthrough technologies, business models and products that have the potential to transform the food industry.
SEASONAL DEMAND Demand for beef, chicken, pork and certain prepared foods products, such as hot dogs and smoked sausage, generally increases during the spring and summer months and generally decreases during the winter months.
SEASONAL DEMAND Demand for beef, chicken, pork and certain prepared foods products, such as hot dogs and smoked sausage, generally increases during the spring and summer months and other key holiday periods and is generally softer during the winter months.
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.
FINANCIAL INFORMATION OF SEGMENTS 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, South Korea, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.
As an expansion of our wellbeing culture and efforts to boost the overall health and wellness of our workforce, we continue to operate health clinics near our production facilities, giving team members and their families easier access to high-quality healthcare. Diversity, Equity and Inclusion (DE&I) We believe that diversity, equity and inclusion (“DE&I”) is our strength.
As an expansion of our wellbeing culture and efforts to boost the overall health and wellness of our workforce, we continue to operate health clinics near our production facilities, giving team members and their families easier access to high-quality healthcare.
In addition, through our Upward Academy Onsite Program, we offer English as a second language, high-school equivalency, citizenship, financial literacy and digital literacy training to all team members. As of September 30, 2023, the onsite program was operating at 58 Company locations.
In addition, through our Upward Academy Onsite Program, we offer English as a second language, high-school equivalency, citizenship, financial literacy and digital literacy training to all team members . As of September 28, 2024, the onsite program was operating at 57 Company locations. All team members can also access Upward Academy online, a frontline career development program.
To expand access to Upward Academy to all team members, we have also launched Upward Academy online, a frontline career development program. This program helps team members further hone professional skills and creates opportunities for our team members to advance to higher-paying, more senior-level positions within the Company through college degrees, job skills training and workforce certifications at no cost.
This program helps team members further hone professional skills and creates opportunities for our team members to advance to higher-paying, more senior-level positions within the Company through college degrees, job skills training and workforce certifications at no cost.
Other prepared foods products, such as prepared meals, meat dishes, appetizers, bacon, and breakfast sausage, generally experience increased demand during the winter months, primarily due to the holiday season, while demand generally decreases during the spring and summer months. CUSTOMERS Walmart Inc. accounted for 18.6% of our fiscal 2023 consolidated sales.
Other prepared foods products, such as prepared meals, meat dishes, appetizers, bacon, and breakfast sausage, generally experience increased demand during the winter months, and also key holiday seasons, while demand generally is softer during the spring and summer months. CUSTOMERS Walmart Inc. accounted for approximately 18.4% of our fiscal 2024 consolidated sales.
FOREIGN OPERATIONS We sold products in approximately 140 countries and regions in fiscal 2023. Major sales markets include Australia, Canada, Central America, Chile, China, the European Union, the United Kingdom, Japan, Mexico, Malaysia, the Middle East, Singapore, South Korea, Taiwan and Thailand.
Major sales markets include Australia, Canada, Central America, Chile, China, the European Union, the United Kingdom, Japan, Mexico, Malaysia, the Middle East, Singapore, South Korea, Taiwan and Thailand.
Approximately 120,000 team members were employed in the United States, of whom approximately 114,000 were employed at non-corporate sites such as production facilities, warehouses, truck shops, hatcheries and feed mills. Approximately 19,000 team members were employed in other countries, primarily in Thailand and China.
Approximately 120,000 team members were employed in the United States, of whom approximately 114,000 were employed at non-corporate sites such as production facilities, warehouses, truck shops, hatcheries and feed mills. Approximately 18,000 team members were employed in other countries, primarily in Thailand and China. For fiscal 2024, our domestic workforce experienced a relatively flat retention rate from fiscal 2023.
This Committee advises the Board on matters relating to corporate responsibility and sustainability, including environmental, social and governance matters affecting the Company.
Additionally, we established sustainability governance and oversight through the Governance and Nominating Committee of our Board of Directors. This Committee advises the Board on matters relating to corporate responsibility and sustainability, including environmental, social and governance matters affecting the Company.
ITEM 1. BUSINESS GENERAL Tyson Foods, Inc. and its subsidiaries (collectively, the “Company,” “we,” “us,” “our,” “Tyson Foods” or “Tyson”) (NYSE: TSN) is one of the world’s largest food companies and a recognized leader in protein. Founded in 1935 by John W.
ITEM 1. BUSINESS GENERAL Tyson Foods, Inc. and its subsidiaries (collectively, the “Company,” “we,” “us,” “our,” “Tyson Foods” or “Tyson”) (NYSE: TSN) is 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.
Sustainability Through our Formula to Feed the Future, we aim to bring together a diverse set of expertise and the scalable resources needed to reimagine our people and community impact, drive product responsibility from farm to table, and work toward sustaining natural resources and achieving net-zero greenhouse gas emissions.
Sustainability Through our Formula to Feed the Future, we aim to bring together a diverse set of expertise to reimagine our people and community impact, drive product responsibility from farm to table, and work toward sustaining natural resources. We are reimagining our people and community impact by enabling workers to succeed while supporting the growth of our communities.
Tyson New Ventures, LLC is used to broaden our exposure to innovative, new forms of protein and ways of sustainably producing food to complement the Company’s continuing investments in innovation in our core Beef, Pork, Chicken and Prepared Foods businesses. FINANCIAL INFORMATION OF SEGMENTS We operate in four reportable segments: Beef, Pork, Chicken and Prepared Foods.
Tyson New Ventures, LLC is used to broaden our exposure to innovative, new forms of protein and ways of improving animal welfare, water management, and packaging and land stewardship initiatives to complement the Company’s continuing investments in innovation in our core Beef, Pork, Chicken and Prepared Foods businesses.
MARKETING AND DISTRIBUTION Our principal marketing objective is to be the preferred provider of beef, pork, chicken and prepared foods products for our customers and consumers.
We strive to grow and develop the different capabilities and skills that we need for the future, while maintaining a robust pipeline of talent throughout the organization. MARKETING AND DISTRIBUTION Our principal marketing objective is to be the preferred provider of beef, pork, chicken and prepared foods products for our customers and consumers.
We created and implemented processes to help identify and eliminate safety events by reducing their frequency and severity. We also review and monitor our safety performance closely. Our goal is to reduce Occupational Safety and Health Administration (“OSHA”) recordable incidents year over year. During fiscal 2023, our recordable incident rate declined 1% compared to fiscal 2022.
Our goal is to reduce Occupational Safety and Health Administration (“OSHA”) recordable incidents year over year. During fiscal 2024, our recordable incident rate declined 1% compared to fiscal 2023.
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®.
We Feed the World Like Family™ and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®. Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, sustainably, and affordably, now and for future generations.
Although we have not incurred significant costs or capital expenditures, due to continuing uncertainty surrounding this issue, it is premature to speculate on the specific nature of impacts that imposition of greenhouse gas emission controls would have on us and whether such impacts would have a material adverse effect.
Although we have not incurred significant costs or capital expenditures specific to greenhouse gas emission compliance, these requirements are continually evolving and increasing. As the exact impact of new or additional greenhouse gas emission controls and requirements remains in flux, it cannot be determined whether such impacts would have a material adverse effect.
Past efforts indicate customer demand can be increased and sustained through application of our marketing strategy, as supported by our distribution systems. The principal competitive elements are price, product safety and quality, brand identification, innovation, breadth and depth of product offerings, availability of products, customer service and credit terms.
Past efforts indicate customer demand can be increased and sustained through application of our marketing strategy, consumer insights, strong analytic analysis to optimize efforts and supported by our distribution systems.
Tyson closely monitors developments in this area and strives to mitigate risks related to greenhouse gas emissions through sustainability initiatives. For example, we have voluntarily sets goals to reduce greenhouse gas emissions in accordance with the Science Based Targets initiative (SBTi) criteria, including our ambition to reach net-zero greenhouse gas emissions by 2050.
Tyson closely monitors developments in this area and strives to mitigate risks related to greenhouse gas emissions through environmental compliance and climate-related initiatives. For example, we collect and monitor greenhouse gas emissions data, which can be used to inform greenhouse gas emission reduction and removal interventions in our operations and supply chain.
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The Company’s purpose is to raise the world’s expectations for how much good food can do by winning with our team members, winning with customers and consumers and winning with execution. Headquartered in Springdale, Arkansas, the Company had approximately 139,000 employees (“team members”) on September 30, 2023.
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Headquartered in Springdale, Arkansas, the Company had approximately 138,000 employees (“team members”) on September 28, 2024. Through its Core Values, Tyson Foods strives to operate with integrity, create value for its shareholders, customers, communities and team members, be faith-friendly and inclusive, provide a safe work environment and serve as a steward of the animals, land and environment entrusted to it.
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Through our Core Values, Tyson Foods is a company of people engaged in the production of food, seeking to pursue trust and integrity, and committed to creating value for our shareholders, our customers, our team members and our communities.
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The principal competitive elements are advertising, consumer and trade promotions, price, product safety and quality, brand identification, innovation, breadth and depth of product offerings, availability of products, customer service and credit terms. FOREIGN OPERATIONS We sold products in approximately 140 countries and regions in fiscal 2024.
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We strive to be honorable and operate with integrity, be faith-friendly and inclusive, serve as stewards of the resources entrusted to us and provide a safe work environment.
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We continue to evaluate our climate-related goals and initiatives, including corresponding costs, evolving legal landscapes, stakeholder expectations, and customer and consumer understanding of climate action.
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We operate a fully vertically-integrated chicken production process with the majority of our production in recent years certified as no antibiotics ever (sometimes referred to as "NAE"); however, during fiscal 2023, we began transitioning the majority of our production to no antibiotics important to human medicine (sometimes referred to as "NAIHM").
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In an effort to ensure our team members are highly engaged and prepared for success at Tyson Foods, we emphasize comprehensive training programs. Newly hired team members participate in an orientation program that spans 14-16 hours. Team members within our production facilities also receive an average of 80 hours on-the-job training.
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We continue to evaluate the plans and associated costs of achieving our greenhouse gas emission reduction goals.
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Additionally, all team members receive comprehensive annual compliance training, covering essential topics such as team member safety, food safety, and other vital areas. We created and implemented processes to help identify and eliminate safety events by reducing their frequency and severity. We also review and monitor our safety performance closely.
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Additionally, we are working toward sustaining natural resources and achieving net zero by driving practices in our own operations and supply chains to more sustainably produce protein for a growing population within planetary boundaries. We were selected as a potential grant recipient in fiscal 2022 under the USDA's Partnerships for Climate-Smart Commodities grant program.
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Team Member Engagement, Inclusion, and Belonging We firmly believe innovation thrives when teams come together, bringing a multitude of perspectives to propel progress and growth. Our workforce consists of approximately 39% women and approximately 70% minority groups.
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With the help of the USDA grant, we plan to execute a five-year program that incentivizes farmer and rancher adoption of agricultural practices that have the potential to increase carbon sequestration and work to reduce greenhouse gas emissions in our supply chain and beyond.
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We believe that our diverse experiences make us strong, and we strive to create an inclusive workforce in which every team member contributes to our collective success. At Tyson Foods, our commitment to our team is rooted in our desire to create working environments that enable team members to succeed while supporting the growth of our communities.
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We have also partnered with World Resources Institute to assess water risk and develop a water stewardship strategy, completed construction of Tyson Foods Center for Sustainable Broiler Research, and announced our global forest protection standard following deforestation risk assessment. Additionally, we established sustainability governance and oversight through the Governance and Nominating Committee of our Board of Directors.
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We maintain policies, practices and strong governance that are designed to enable team member success across our organization. Our Team Member Promise underscores our commitment to providing a work environment free from all forms of discrimination and harassment. All new team members receive training on this policy during onboarding, and all team members are required to take this training annually.
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For fiscal 2023, our domestic workforce experienced a 2% decrease in retention rate from fiscal 2022 primarily driven by macro trends associated with a challenging labor environment.
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We also maintain an Equal Opportunity Employer statement that details our commitment to equal opportunity in all aspects of employment. The Company has eight employee-led business resource groups that support our team members.
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To keep our team members safe, we focus on ensuring that all team members receive appropriate training and equipment. For example, every production facility team member completes at least 13 hours of compliance, safety and food safety training per year, and new hourly employees receive 120 hours of classroom and on-the-job orientation.
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Our Company is diverse and consists of team members with a variety of experiences, backgrounds, beliefs and lifestyles. Our workforce consists of approximately 39% women and over 60% minority groups.
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We strive to continue cultivating a culture and vision that supports DE&I in every aspect of our business, from recruiting to individual development and team member engagement, with the objective of promoting and retaining talent. We also believe that having engaged team members with a sense of belonging is paramount to our continued success.
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The Company has eight employee-led business resource groups that support our team members and assist with efforts to build a culture of inclusion to ensure that everyone feels respected and valued. Some of our functional teams have also engaged formal DE&I councils to inform special projects and initiatives and many production facilities routinely host local diversity committees.
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We have a goal to be the most sought after company within our markets and peer groups. We strive to grow and develop the different capabilities and skills that we need for the future, while maintaining a robust pipeline of talent throughout the organization.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, we are subject to various risks and uncertainties relating to international sales and operations, including: • closing of borders by foreign countries to the import of beef, pork and poultry products due to animal disease or other perceived health or safety issues; • impact of currency exchange rate fluctuations between the United States dollar and foreign currencies, particularly the Australian dollar, the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Malaysian ringgit, the Mexican peso, and the Thai baht; • political and economic conditions, including the ongoing conflicts between Ukraine and Russia, as well as political tension and conflict in the Middle East and elsewhere; • difficulties and costs to comply with, and enforcement of remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including, without limitation, the United States Foreign Corrupt Practices Act and economic and trade sanctions enforced by the United States Department of the Treasury’s Office of Foreign Assets Control; • different regulatory structures and unexpected changes in regulatory environments; • tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and incremental taxes upon repatriation; • potentially negative consequences from changes in tax laws; • distribution costs, disruptions in shipping or reduced availability of freight transportation; and • the impact of COVID-19 pandemic, including any resurgence and new or existing variants, on the global economy and on consumer demand worldwide; imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the importation of beef, pork, poultry and prepared foods products, in addition to import or export licensing requirements imposed by various foreign countries.
Biggest changeWe are subject to various risks and uncertainties relating to international sales and operations, including: closing of borders by foreign countries to the import of beef, pork and poultry products due to animal disease or other perceived health or safety issues; the impact of currency exchange rate fluctuations between the United States dollar and foreign currencies, particularly the Australian dollar, the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Malaysian ringgit, the Mexican peso, and the Thai baht; political and economic conditions, including ongoing conflicts and political tensions; and difficulties and costs of complying with different legal, tax and regulatory requirements impacting exports and other international activities.
In the event any significant failure of our systems requires us to upgrade or set up new systems, oversight and implementation of the new system and training personnel could be costly, there may be further disruptions from potential instability in the new system, and there may be heightened cybersecurity risks in connection with the migration of data to the new system.
In the event any significant failure of our systems requires us to upgrade or set up new systems, the oversight and implementation of the new system and training of personnel could be costly, there may be further disruptions from potential instability in the new system, and there may be heightened cybersecurity risks in connection with the migration of data to the new system.
Legal claims or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations, including those contained in Item 3, Legal Proceedings and Part II, Item 8, Notes to Consolidated Financial Statements, Note 20: Commitments and Contingencies in this Annual Report on Form 10-K, could subject us to civil and criminal penalties, including debarment from governmental contracts that could materially and adversely affect our product sales, reputation, financial condition and results of operations.
Legal claims or regulatory enforcement actions arising out of our failure or alleged failure to comply with applicable laws and regulations, including those contained in Item 3, Legal Proceedings and Part II, Item 8, Notes to Consolidated Financial Statements, Note 20: Commitments and Contingencies in this Annual Report on Form 10-K, could subject us to civil and criminal penalties, including debarment from governmental contracts, that could adversely affect our product sales, reputation, financial condition and results of operations.
Our failure to perfect or successfully assert our intellectual property rights could make us less competitive and could have an adverse effect on our business, operating results and financial condition. 19 We may incur additional tax expense or become subject to additional tax liabilities. We are subject to taxes in the United States and numerous foreign jurisdictions.
Our failure to perfect or successfully assert our intellectual property rights could make us less competitive and could have an adverse effect on our business, operating results and financial condition. We may incur additional tax expense or become subject to additional tax liabilities. We are subject to taxes in the United States and numerous foreign jurisdictions.
From time to time in response to these competitive pressures or to maintain market share, we may need to reduce the prices for some of our products or increase or reallocate spending on marketing, advertising and promotions and new product innovation. Such pressures also may restrict our ability to increase prices in response to raw material and other cost increases.
From time to time, in response to competitive pressures or to maintain market share, we may need to reduce the prices for some of our products or increase or reallocate spending on marketing, advertising and promotions and new product innovation. Such pressures also may restrict our ability to increase prices in response to raw material and other cost increases.
Our indebtedness, including borrowings under our revolving credit and term loan facilities and commercial paper program, may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expenditures and possible acquisitions, joint ventures or other significant initiatives.
Our indebtedness, including any borrowings under our revolving credit and term loan facilities and commercial paper program, may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expenditures and possible acquisitions, joint ventures or other significant initiatives.
If we do not maintain or extend our brand image, then our product sales, financial condition and results of operations could be materially and adversely affected. The loss of one or more of our largest customers could negatively impact our business.
If we do not maintain or extend our brand image, then our product sales, financial condition and results of operations could be materially and adversely affected. 12 The loss of one or more of our largest customers could negatively impact our business.
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. 17 An impairment in the carrying value of our goodwill or indefinite life intangible assets could negatively impact our consolidated results of operations and net worth.
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. 15 An impairment in the carrying value of our goodwill or indefinite life intangible assets could negatively impact our consolidated results of operations and net worth.
A widespread product recall could result in significant losses due to the costs of a recall, the destruction of product inventory and lost sales due to the unavailability of product for a period of time.
A widespread product recall could result in significant financial losses due to the costs of a recall, the destruction of product inventory and lost sales due to the unavailability of product for a period of time.
In fiscal 2023, we sold products to customers in approximately 140 countries. Major sales markets include Australia, Canada, Central America, Chile, China, the European Union, the United Kingdom, Japan, Mexico, Malaysia, the Middle East, Singapore, South Korea, Taiwan and Thailand.
In fiscal 2024, we sold products to customers in approximately 140 countries. Major sales markets include Australia, Canada, Central America, Chile, China, the European Union, the United Kingdom, Japan, Mexico, Malaysia, the Middle East, Singapore, South Korea, Taiwan and Thailand.
An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows. We depend on the availability of, and good relations with, our team members and their labor unions.
An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have an adverse impact on our operations, results of operations, liquidity or cash flows. We depend on the availability of, and good relations with, our team members and their labor unions.
Some of our commercial contracts with our customers have uncapped indemnification clauses or no limitation of liability provisions, so any of these occurrences could cause us to pay significant amounts in penalties and spend significant resources, which could have a material adverse effect on our financial results.
Some of our commercial contracts with our customers have uncapped indemnification clauses or no limitation of liability provisions, so any of these occurrences could cause us to pay significant amounts in penalties and spend significant resources, which could have an adverse effect on our financial results.
There can be no assurance that our current disclosures and targets, and the methodologies that we currently use to support our disclosures and progress towards our targets, will satisfy any new regulations and legal requirements in the U.S. and abroad, and the costs of aligning our current disclosures and goals to any new legal requirements may be significant.
There can be no assurance that our current disclosures and targets, and the methodologies that we currently use to support our disclosures and progress towards our targets, will satisfy any new or evolving regulations and legal requirements in the U.S. and abroad, and the costs of aligning our current disclosures to any new legal requirements may be significant.
We have in the past experienced, and may in the future face, cyber attacks, other cyber incidents or security breaches, and there can be no assurance that we will always be able to sufficiently mitigate the impacts to our business and operations.
We have in the past experienced, and may in the future face, cyber attacks, other cyber incidents, disruptions or security breaches, and there can be no assurance that we will always be able to sufficiently mitigate the impact to our business and operations.
Corn, soybean meal and other feed ingredients, for instance, represented roughly 61% of our cost of growing a live chicken in fiscal 2023. Production and pricing of these commodities are determined by constantly changing market forces of supply and demand over which we have limited or no control.
Corn, soybean meal and other feed ingredients, for instance, represented roughly 56% of our cost of growing a live chicken in fiscal 2024. Production and pricing of these commodities are determined by constantly changing market forces of supply and demand over which we have limited or no control.
Our business could suffer significant setbacks in sales and operating income if our customers’ plans and/or markets change significantly or if we lost one or more of our largest customers, including, for example, Walmart Inc., which accounted for 18.6% of our sales in fiscal 2023.
Our business could suffer significant setbacks in sales and operating income if our customers’ plans and/or markets change significantly or if we lost one or more of our largest customers, including, for example, Walmart Inc., which accounted for 18.4% of our sales in fiscal 2024.
However, outbreaks of disease and other events, which may be beyond our control, either in our own livestock or livestock owned by independent producers who sell livestock to us, could significantly affect demand for our products, consumer perceptions of certain protein products, the availability of livestock for purchase by us and our ability to conduct our operations.
However, outbreaks of disease and other events, which may be beyond our control, either in our own livestock and poultry, or livestock and poultry owned by independent producers who supply us, could significantly affect demand for our products, consumer perceptions of certain food products, the availability of livestock and poultry for purchase by us and our ability to conduct our operations.
Any reduction in prices as a result of competitive pressures, or any failure to increase prices to offset cost increases, could harm our profit margins. If we reduce prices but we cannot increase sales volumes to offset the price changes, then our financial condition and results of operations will suffer.
Any reduction in prices as a result of competitive pressures, or any failure to increase prices to offset cost increases, could harm our profit margins. If we reduce prices but we cannot increase sales volumes to offset the price changes, then our financial condition and results of operations could be adversely affected.
We have approximately 139,000 team members, approximately 39,000 of whom are covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability and relative costs of labor and maintaining good relations with team members and the labor unions.
We have approximately 138,000 team members, approximately 36,000 of whom are covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability and relative costs of labor and maintaining good relations with team members and the labor unions.
Alternatively, if we do not reduce our prices and our competitors seek advantage through pricing or promotional changes, our revenues and market share could be adversely affected. Outbreaks of livestock diseases can adversely impact our ability to conduct our operations and the supply and demand for our products.
Alternatively, if we do not reduce our prices and our competitors seek advantage through pricing or promotional changes, our revenues and market share could also be adversely affected. 11 Disease outbreaks can adversely impact our ability to conduct our operations and the supply and demand for our products.
In addition, our operations, or those of independent contract poultry producers and producers who provide the live animals to our production operations, may become more limited in their ability to procure, deliver, or produce our food products because of labor shortages.
In addition, our operations, or those of producers who provide live animals to our production operations, may become more limited in their ability to procure, deliver, or produce our food products because of labor shortages.
Supply of and demand for our products can be adversely impacted by outbreaks of livestock diseases, including African swine fever (“ASF”), Bovine Spongiform Encephalopathy, Foot and Mouth Disease and Highly Pathogenic Avian Influenza (“HPAI”), which can have a significant impact on our financial results.
Supply of and demand for our products can be adversely impacted by disease outbreaks impacting animals, animal products, and livestock, such as African swine fever (“ASF”), Bovine Spongiform Encephalopathy, Foot and Mouth Disease, and Highly Pathogenic Avian Influenza (“HPAI”), which can have a significant impact on our financial results.
Our consolidated indebtedness level could adversely affect our business because: • it may limit or impair our ability to obtain financing in the future; • our credit ratings (or any decrease to our credit ratings) could restrict or impede our ability to access capital markets at desired interest rates and increase our borrowing costs; • it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business opportunities that may arise; • a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes; and • it may restrict our ability to pay dividends.
Our consolidated indebtedness level could adversely affect our business because it may limit or impair our ability to obtain financing in the future; our credit ratings (or any decrease to our credit ratings) could restrict or impede our ability to access capital markets at desired interest rates and increase our borrowing costs; a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes; and it may restrict our ability to pay dividends.
Natural disasters, fire, bioterrorism, pandemic or extreme weather, including droughts, floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, decrease in availability of water, damage to our production and processing facilities or disruption of transportation channels or unfavorably impact the demand for, or our consumers’ ability to purchase our products, among other things.
Natural disasters, fire, pandemic or extreme weather, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, decrease in availability of water, damage to our production and processing facilities or disruption of transportation channels or unfavorably impact the demand for, or our consumers’ ability to purchase our products, among other things.
While these contracts reduce our exposure to changes in prices for commodity products, the use of such instruments may ultimately limit our ability to benefit from favorable commodity prices. 18 GENERAL RISK FACTORS Deterioration of economic conditions, including recession, financial instability or inflation, could negatively impact our business.
While these contracts reduce our exposure to changes in prices for commodity products, the use of such instruments may ultimately limit our ability to benefit from favorable commodity prices. GENERAL RISK FACTORS Deterioration of economic conditions could negatively impact our business.
Any such downtime could have significant impacts on our ability to continue our business operations, including our ability to operate our facilities, manage and track inventory, manage and track incoming new orders and statuses of existing orders, and to continue to comply with regulatory, legal and tax requirements.
Any such downtime could have significant impacts on our ability to continue our business operations, including our ability to operate our facilities, manage and track inventory, and manage and track incoming new orders and statuses of existing orders.
We have a number of iconic brands with significant value. Maintaining and continually enhancing the value of these brands is critical to the success of our business. Brand value is based in large part on consumer perceptions. Success in promoting and enhancing brand value depends in large part on our ability to provide high-quality products.
Maintaining and continually enhancing the value of these brands is critical to the success of our business. Brand value is based in large part on consumer perceptions. Success in promoting and enhancing brand value depends in large part on our ability to provide high-quality products.
Our sales to customers in foreign countries for fiscal 2023 totaled $7.9 billion, of which $5.1 billion related to export sales from the United States. In addition, we had approximately $1.4 billion of long-lived assets located in foreign locations, primarily Brazil, China, the European Union, New Zealand and Thailand, at the end of fiscal 2023.
Our sales to customers in foreign countries for fiscal 2024 totaled $7.8 billion, of which $5.2 billion related to export sales from the United States. In addition, we had approximately $1.4 billion of long-lived assets located in foreign locations, primarily Brazil, China, the European Union, Malaysia, the Middle East and Thailand, at the end of fiscal 2024.
As of September 30, 2023, Tyson Limited Partnership (the “TLP”) owns 99.985% of the outstanding shares of the Company’s Class B Common Stock, $0.10 par value (“Class B stock”), and the TLP and members of the Tyson family own, in the aggregate, 2.44% of the outstanding shares of the Company’s Class A Common Stock, $0.10 par value (“Class A stock”), giving them, collectively, control of approximately 71.74% of the total voting power of the Company’s outstanding voting stock.
As of September 28, 2024, Tyson Limited Partnership (the “TLP”) owns 99.987% of the outstanding shares of the Company’s Class B Common Stock, $0.10 par value (“Class B stock”), and the TLP and members of the Tyson family own, in the aggregate, 2.43% of the outstanding shares of the Company’s Class A Common Stock, $0.10 par value (“Class A stock”), giving them, collectively, control of approximately 71.70% of the total voting power of the Company’s outstanding voting stock.
John Tyson, Chairman of the Board of Directors, controls 44.445% of the general partner percentage interests, and Ms. Barbara Tyson, a director of the Company, controls 11.115% of the general partner percentage interests (the remaining general partnership interests are held by the Donald J. Tyson Revocable Trust (44.44%)).
As of September 28, 2024, through a series of trusts, Mr. John Tyson, Chairman of the Board of Directors, controls 44.445% of the general partner percentage interests, and Ms. Barbara Tyson, a director of the Company, controls 11.115% of the general partner percentage interests (the remaining general partnership interests are held by the Donald J. Tyson Revocable Trust (44.44%)).
If we are unable to attract, hire or retain key team members or a highly skilled and diverse global workforce, it could have a negative impact on our business, financial condition or results of operations.
If we are unable to attract, hire or retain key team members or a highly skilled and experienced global workforce, it could have a negative impact on our business, financial condition or results of operations. Our continued growth requires us to attract, hire, retain and develop key team members and maintain a highly skilled and experienced global workforce.
At September 30, 2023, the funded status of our defined benefit pension plans was an underfunded position of $149 million, as compared to an underfunded position of $159 million at the end of fiscal 2022.
At September 28, 2024, the funded status of our defined benefit pension plans was an underfunded position of $158 million, as compared to an underfunded position of $149 million at the end of fiscal 2023.
Similar risks exist with respect to the third-party vendors that we rely upon for aspects of our information technology support services and administrative functions, including health and benefit plan administration and certain finance and accounting functions, and systems managed, hosted, provided and/or used by third parties and their vendors.
Similar risks exist with respect to the third-party vendors that we rely upon for aspects of our information technology support services and administrative functions, including health and benefit plan administration and certain finance and accounting functions, and systems managed, hosted, provided and/or used by third parties and their vendors. We have not experienced any significant cyber-related events in fiscal 2024.
These types of events and the resulting analyses could result in impairment charges in the future, which could be substantial. At September 30, 2023, we had $14.0 billion of goodwill and indefinite life intangible assets, which represented approximately 38.5% of total assets. Participation in a Multiemployer Pension Plan could adversely affect our business.
These types of events and the resulting analyses could result in impairment charges in the future, which could be substantial. At September 28, 2024, we had $13.9 billion of goodwill and indefinite life intangible assets, which represented approximately 37% of total assets. Participation in a Multiemployer Pension Plan could adversely affect our business.
Such a product recall also could result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our products, which could have a material adverse effect on our business results and the value of our brands.
Such a product recall also could result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our products, which could have an adverse effect on our business results and the value of our brands. The Company is required to comply with stringent environmental laws and regulations.
There is a risk that we will not be able to obtain and perfect our own or, where appropriate, license intellectual property rights necessary to support new product introductions. We cannot be sure that these rights, if obtained, will not be invalidated, circumvented or challenged in the future.
We cannot be sure that these intellectual property rights will be maximized or that they can be successfully asserted. There is a risk that we will not be able to obtain and perfect our own or, where appropriate, license intellectual property rights necessary to support new product introductions.
Certain of our competitors may also negotiate more favorable contract terms that could provide them with competitive advantages and affect our supply. 15 LEGAL & REGULATORY RISK FACTORS If our products become contaminated, we may be subject to product liability claims and product recalls, which could adversely affect our financial results and damage our reputation.
Certain of our competitors may also negotiate more favorable contract terms that could provide them with competitive advantages and affect our supply. LEGAL & REGULATORY RISK FACTORS Product liability claims could adversely affect our business operations and financial results, or damage our reputation.
If we are unable to successfully manage the negative consequences of the financial excellence programs, our business, results of operations and financial condition for future periods could be adversely affected. 10 We are subject to risks associated with our international activities, which could negatively affect our sales to customers in foreign locations, as well as our operations and assets in such locations.
If we are unable to implement the financial excellence programs smoothly or successfully, or we otherwise do not capture the anticipated savings, our business, results of operations and financial condition for future periods could be negatively impacted. 9 We are subject to risks associated with our international activities, which could negatively affect our sales to customers in foreign locations, as well as our operations and assets in such locations.
We may not be able to complete desired or proposed divestitures on terms favorable to us. Gains or losses on the sales of, or lost operating income from, those businesses may affect our profitability and margins. Moreover, we may incur asset impairment charges related to divestitures that reduce our profitability. Our divestiture activities may present financial, managerial and operational risks.
Gains or losses on the sales of, or lost operating income from, those businesses may affect our profitability and margins. Moreover, we may incur asset impairment charges related to divestitures that reduce our profitability. Our divestiture activities may present financial, managerial and operational risks, which could adversely affect our product sales, financial condition and results of operations.
While we use derivative financial instruments, primarily futures and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity, we do not fully hedge against changes in commodities prices.
Conversely, decreases in our commodity and other input costs may create pressure on us to decrease our prices. While we use derivative financial instruments, primarily futures and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity, we do not fully hedge against changes in commodity prices.
In recent years, ASF has impacted hog herds in China, Asia, Europe, and the Caribbean, and if an outbreak of ASF were to occur in the United States, the Company’s supply of hogs and pork could be materially impacted. HPAI was detected within the United States in 2022 and additional new cases have been recently confirmed in certain states.
In recent years, ASF has impacted hog herds in China, Asia, Europe, and the Caribbean, and if an outbreak of ASF were to occur in the United States, the Company’s supply of hogs and pork could be materially impacted.
Even an inadvertent shipment of contaminated products may be a violation of law and may lead to increased risk of exposure to product liability claims, increased scrutiny and penalties, including injunctive relief and plant closings, by federal and state regulatory agencies, and adverse publicity, which could exacerbate the associated negative consumer reaction.
Any potentially contaminated products or allegation of contaminated products could result in an increased risk of exposure to product liability claims, regulatory scrutiny, and assessment of penalties, including injunctive relief and plant closings, by federal and state regulatory agencies, and adverse publicity, which could exacerbate the associated negative consumer reaction.
Our results of operations and financial condition, as well as the selling prices for our products, are dependent upon the cost and supply of commodities and raw materials such as beef, pork, poultry, corn, soybean meal, packaging materials and energy and, to a lesser extent, cheese, fruit, seasoning blends, flour, corn syrup, corn oils, butter and sugar.
Our results of operations and financial condition, as well as the selling prices for our products, are dependent upon the cost and supply of commodities and raw materials such as beef, pork, poultry, corn, soybean meal and vegetable oils.
Disruptions in global credit and other financial markets and deterioration of economic conditions could, among other things: • make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future; • cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any amendment of, or waivers under, our credit agreements to the extent we may seek them in the future; • impair the financial condition of some of our customers and suppliers, thereby increasing customer bad debts or non-performance by suppliers; • negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash flows; • decrease the value of our investments in equity and debt securities, including our marketable debt securities, company-owned life insurance and pension and other postretirement plan assets; • negatively impact our commodity purchasing activities if we are required to record losses related to derivative financial instruments; or • impair the financial viability of our insurers.
Any such changes could adversely affect the demand for our products, the financial condition of customers and suppliers, the cost and availability of raw materials, the cost and availability of financing for our operations, debt or investments, thereby negatively affecting our financial results. 16 Disruptions in global credit and other financial markets and deterioration of economic conditions could, among other things, make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future; impair the financial condition of some of our customers and suppliers, thereby increasing customer bad debts or non-performance by suppliers; negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash flows; decrease the value of our investments in equity and debt securities; or negatively impact our commodity purchasing activities if we are required to record losses related to derivative financial instruments.
The food industry in general is subject to changing consumer trends, demands and preferences. Trends within the food industry change often, and failure to identify and react to changes in these trends could lead to, among other things, reduced demand and price reductions for our brands and products.
Trends within the food industry change often, and failure to identify and react to changes in these trends could lead to, among other things, reduced demand and price reductions for our brands and products. We strive to respond to consumer preferences and social expectations, but we may not be successful in our efforts.
While we also benefit from certain indemnification obligations from our customers, such protections may not adequately cover all claims brought against us or cover only a portion of such claim. In addition, we may be required to recall some of our products if they spoil, become contaminated, are tampered with or are mislabeled.
While we may benefit from indemnification obligations from certain of our customers, such protections may not adequately cover all claims brought against us or cover only a portion of such claims. In addition, we may be required to recall some of our products in response to a regulatory action, customer concern, or alleged contamination.
Moreover, the outbreak of livestock diseases, particularly in our Chicken segment, could have a significant effect on the livestock we own by requiring us to, among other things, destroy any affected livestock. Furthermore, an outbreak of disease could result in governmental restrictions on the import and export of our products to or from our suppliers, facilities or customers.
Moreover, the outbreak of diseases impacting animals, animal products, and livestock, particularly in our Chicken segment, could have a significant effect on the livestock and poultry we own by requiring us to, among other things, destroy any affected animals.
Our business relies on the health and wellbeing of our employees who run the day-to-day operations of the Company. Global pandemics, or localized epidemics, have had and may in the future have a significant adverse impact on our business and operations.
Our business relies on the health and well-being of our employees who run the day-to-day operations of the Company. Global pandemics, or localized epidemics, have had and may in the future have an adverse impact on our business and operations. During the COVID-19 pandemic, many parts of our business and operations were negatively affected.
Loss of or failure to obtain necessary permits and registrations could delay or prevent us from meeting current product demand, introducing new products, building new facilities or acquiring new businesses and could adversely affect operating results. FINANCIAL RISK FACTORS Our level of indebtedness and the terms of our indebtedness could negatively impact our business and liquidity position.
Loss of or failure to obtain necessary permits and registrations could delay or prevent us from meeting current product demand, introducing new products, building new facilities or acquiring new businesses and could adversely affect operating results. Climate change may have a long-term adverse impact on our business.
Legal claims, class action lawsuits, other regulatory enforcement actions, or failure to comply with applicable legal standards or requirements could affect our product sales, reputation and profitability. We operate in a highly regulated environment with constantly evolving legal and regulatory frameworks. Consequently, we are subject to heightened risk of legal claims or other regulatory enforcement actions.
We operate in a highly regulated environment with constantly evolving legal and regulatory frameworks. Consequently, we are subject to heightened risk of legal claims or other regulatory enforcement actions.
Like other companies, our information technology systems may be vulnerable to a variety of disruptions, including but not limited to the process of upgrading or replacing software, databases or components thereof, user errors, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyber attacks, hackers, unauthorized access attempts and other security issues.
Our information technology systems may be vulnerable to disruption, including as a result of upgrading, replacing or integrating software and databases, user errors, natural disasters, telecommunications failures, computer viruses, cyber attacks, disruptions of software-as-a-service and cloud hosting providers, unauthorized access attempts and other security issues.
Compliance with these laws and regulations, and the ability to comply with any modifications to these laws and regulations, is material to our business. New matters or sites may be identified in the future that will require additional investigation, assessment, or expenditures.
Compliance with these laws and regulations, and the ability to comply with any future changes to these laws and regulations or with new laws and regulations that may be enacted, is material to our business.
We strive to respond to consumer preferences and social expectations, but we may not be successful in our efforts. 13 We could be adversely affected if consumers lose confidence in the safety and quality of certain food products or ingredients, or the food safety system generally.
We could be adversely affected if consumers lose confidence in the safety and quality of certain food products or ingredients, or the food safety system generally.
A prolonged period of reduced consumer spending could have an adverse effect on our business and our results of operations. Extreme factors or forces beyond our control could negatively impact our business. Our ability to make, move and sell products is critical to our success.
Extreme factors or forces beyond our control could negatively impact our business. Our ability to make, move and sell products is critical to our success.
We may not be able to address these risks and successfully develop these acquired companies or businesses into profitable units. If we are unable to do this, such expansion could adversely affect our financial results. Additionally, from time to time, we may divest businesses that do not meet our strategic objectives or do not meet our growth or profitability targets.
If we are unable to do this, such expansion could adversely affect our financial results. 10 Additionally, from time to time, we may divest businesses that do not align with our strategic objectives or that do not meet our growth or profitability targets. We may not be able to complete desired or proposed divestitures on terms favorable to us.
In addition, our introduction of new products or product extensions may generate litigation or other legal proceedings against us by competitors claiming infringement of their intellectual property or other rights, which could negatively impact our results of operations. We also seek to maintain and extend the image of our brands through marketing investments, including advertising, consumer promotions and trade spend.
In addition, our introduction of new products or product extensions may generate litigation or other legal proceedings against us by competitors claiming infringement of their intellectual property or other rights, which could negatively impact our results of operations. We have a number of iconic brands with significant value.
In addition, some of our facilities have been in operation for many years and, over time, we and other prior operators of these facilities may have generated and disposed of wastes that now may be considered hazardous.
Some of our facilities have been in operation for many years, and, over time, we and other prior operators of these facilities may have incurred environmental liabilities, such as costs related to the disposal of wastes that are now deemed hazardous.
The success of the financial excellence programs, or future financial excellence programs, including the realization of the anticipated benefits, will depend in part on our ability to successfully implement the programs in an efficient and effective manner.
We may not realize any or all of the anticipated benefits of our financial excellence programs, which may prove to be more difficult, costly or time consuming than expected. The success of the financial excellence programs, or future financial excellence programs will depend in part on our ability to successfully implement the programs in an efficient and effective manner.
New or more stringent domestic and international government regulations could impose material costs on us and could adversely affect our business. Our operations are subject to extensive federal, state and foreign laws and regulations by authorities that oversee food safety standards and processing, packaging, storage, distribution, advertising, labeling and export of our products.
Our operations are subject to extensive federal, state and foreign laws and regulations by authorities that oversee raw material inputs, relationships or interactions with growers, farmers, and ranchers, food safety standards, and processing, packaging, storage, distribution, advertising, labeling, and export of our products.
In addition, we may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our business partners, customers, consumers or suppliers. Finally, the disclosure of non-public information through external media channels could lead to the loss of intellectual property or damage our reputation and brand image.
In addition, such incidents could result in unauthorized or accidental disclosure of material confidential information or personally identifiable information. We may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our business partners, customers, consumers or suppliers.
The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations. 16 Finally, we currently provide certain climate-related disclosures, and from time to time, we establish and publicly announce goals and commitments to reduce our carbon footprint.
The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and the results of operations.
We have not experienced any significant cyber-related events in the current fiscal year. We may not be able to successfully consummate favorable strategic acquisitions or divestitures or successfully integrate acquired businesses. We periodically evaluate potential acquisitions, joint ventures and other initiatives, and may seek to expand our business through the acquisition of companies, processing plants, technologies, products and services.
We may not be able to successfully consummate favorable strategic acquisitions or divestitures or successfully integrate acquired businesses. We periodically evaluate potential acquisitions, joint ventures and other initiatives, and may seek to expand our business through such activities.
The Company’s objective continues to be to offset commodity price increases with pricing actions over time. However, we may not always be able to increase our product prices enough to sufficiently offset increased raw material costs due to consumer price sensitivity or the pricing postures of our competitors.
However, we may not always be able to increase our product prices enough to sufficiently offset increased raw material costs due to consumer price sensitivity or the pricing postures of our competitors. In addition, if we increase prices to offset higher costs, we could experience lower demand for our products and sales volumes.
If we do not attract and maintain contracts with farmers or maintain marketing and purchasing relationships with independent producers, our production operations could be negatively affected.
A majority of our cattle and hogs are purchased from independent producers who sell livestock to us under marketing contracts or on the open market. If we do not attract and maintain contracts with farmers or maintain marketing and purchasing relationships with independent producers, our production operations could be negatively affected.
Furthermore, compliance with any such legal or regulatory requirements may require us to make significant changes to our business operations and strategy, which will likely incur substantial time, attention and costs.
Furthermore, compliance with any such legal or regulatory requirements may require us to make significant changes to our business operations and strategy, which will likely incur substantial time, attention, and costs. Finally, we currently provide certain climate-related disclosures. These disclosures may be based on evolving standards, controls, and internal processes, or connect to assumptions that are subject to change.
Efforts are taken to control disease risks by adherence to good production practices and extensive precautionary biosecurity measures designed to ensure the health of livestock.
In 2024, HPAI was detected in the United States in dairy cattle, wild birds, mammals, and farm workers directly exposed to infected dairy or poultry. Efforts are taken to control disease risks by adherence to good production practices and extensive precautionary biosecurity measures designed to ensure the health of livestock and poultry.
Decreased agricultural productivity in certain regions of the world caused by changing weather patterns has limited and may continue to limit the availability, or may increase the cost, of key agricultural commodities and natural resource ingredients and manufacturing inputs, as well as raw materials such as beef, pork, poultry, corn, soybean meal and other feed ingredients.
Climate change and rising global temperatures may contribute to changing weather patterns, elongated drought periods, heavier or more frequent storms and wildfires, and increased frequency and severity of natural disasters, and may limit the availability, or increase the cost, of key agricultural commodities and natural resource ingredients and manufacturing inputs, as well as raw materials such as beef, pork, poultry, corn, soybean meal and other feed ingredients.
Alternative retail channels, such as convenience stores, dollar stores, drug stores, club stores and Internet-based retailers have increased their market share. 14 This trend towards alternative channels is expected to continue in the future. If we are not successful in expanding sales in alternative retail channels, our business or financial results may be adversely impacted.
This trend towards alternative channels is expected to continue in the future. If we are not successful in expanding sales in alternative retail channels, our business or financial results may be adversely impacted. Many of our customers have consolidated in recent years, and consolidation is expected to continue throughout the United States and in other major markets.
We have implemented and continue to evaluate security initiatives and disaster recovery plans to mitigate our exposure to these risks, but these measures may not be adequate.
We have implemented and continue to evaluate cyber-security initiatives and business continuity and disaster recovery plans to mitigate our exposure to these risks, but these measures may not be adequate, as attempted cyber attacks or breaches become more sophisticated. In addition, new technologies, such as artificial intelligence, may present new technological risks or vulnerabilities.
This concentration of ownership may also delay or prevent a change in control otherwise favored by our other stockholders and could depress our stock price.
This concentration of ownership may also delay or prevent a change in control otherwise favored by our other stockholders and could depress our stock price. Additionally, as a result of the TLP’s significant ownership of our outstanding voting stock, we are eligible for “controlled company” exemptions from certain corporate governance requirements of the New York Stock Exchange.
Additionally, as a result of the TLP’s significant ownership of our outstanding voting stock, we are eligible for “controlled company” exemptions from certain corporate governance requirements of the New York Stock Exchange. 12 INDUSTRY RISK FACTORS Fluctuations in commodity prices and in the availability of raw materials, especially feed grains, live cattle, live swine and other inputs could negatively impact our earnings.
INDUSTRY RISK FACTORS Fluctuations in commodity prices and in the availability of raw materials, especially feed grains, live cattle, live swine and other inputs could negatively impact our earnings.
This could also result in negative publicity that may have an adverse effect on our ability to market our products successfully and on our financial results. Changes in consumer preference and failure to maintain favorable consumer perception of our brands and products could negatively impact our business.
Furthermore, an outbreak of disease could result in governmental restrictions on the import and export of our products to or from our suppliers, facilities or customers. This could also result in negative publicity that may have an adverse effect on our ability to market our products successfully, and on our financial results.
Information technology is an important part of our business operations, and we rely on information technology systems to manage business data and increase efficiencies in our production and distribution facilities and inventory management processes. We also use information technology to process financial information and results of operations for internal reporting purposes and to comply with regulatory, legal and tax requirements.
Information technology is key to our business operations, and we rely on information technology systems to, among other things, manage business data, increase efficiencies in our production and distribution facilities, manage sales and inventory, process financial information, and communicate with our facilities, personnel, customers and suppliers.
Our retail customers typically do not enter into written contracts, and if they do sign contracts, they generally are limited in scope and duration. There can be no assurance that significant customers will continue to purchase our products in the same mix or quantities or on the same terms as in the past.
There can be no assurance that significant customers will continue to purchase our products in the same mix or quantities or on the same terms as in the past. Alternative retail channels, such as convenience stores, dollar stores, drug stores, club stores and Internet-based retailers have increased their market share.
This in turn could lead to increased food insecurity in communities around the world. Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products.
Increased frequency or severity of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products, and could adversely affect operating results. In addition, climate change may require us to make additional unplanned capital expenditures.
We depend on contract farmers and independent producers to supply us with livestock. We contract primarily with independent contract farmers to raise the live chickens and turkeys processed in our poultry operations. A majority of our cattle and hogs are purchased from independent producers who sell livestock to us under marketing contracts or on the open market.
In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members. 13 We depend on contract farmers and independent producers to supply us with livestock. We contract primarily with independent contract farmers to raise the live chickens and turkeys processed in our poultry operations.
Competition could cause us to lose talented team members, and unplanned turnover could deplete our institutional knowledge and result in increased costs due to increased competition for team members. In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members.
We compete to attract and hire highly skilled team members and our own team members are highly sought after by our competitors and other companies. Competition could cause us to lose talented team members, and unplanned turnover could deplete our institutional knowledge and result in increased costs due to increased competition for team members.
Our products may be subject to contamination by foreign materials or disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella and E. coli. These organisms and pathogens are found generally in the environment and there is a risk that one or more, as a result of food processing, could be present in our products.
We face a risk of product liability claims from potential contamination of our products by foreign materials, disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella, and E. coli, or exposure to chemicals of concern from packaging or environmental exposure.
Therefore, we may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other security-related incidents or vulnerabilities. 11 Any significant failure of our systems, including failures that prevent our systems from functioning as intended or our failure to timely identify or appropriately respond to cyber attacks or other cyber incidents, could cause transaction errors, processing inefficiencies, loss of customers and sales, have negative consequences on our team members and our business partners, have a negative impact on our operations or business reputation and expose us to liability, litigation and regulatory enforcement actions.
Any failure of our information technology systems could cause transaction errors, processing inefficiencies, loss of customers and sales, have negative consequences on our team members, business partners, and operations, and may expose us to liability, litigation and regulatory enforcement actions.
If a taxing authority disagrees with the positions we have taken, we could face additional tax liability, including interest and penalties, which could adversely affect our financial results. In December 2021, we received an assessment from the Mexican tax authorities related to the 2015 sale of our direct and indirect equity interests in subsidiaries which held our Mexico operations.
If a taxing authority disagrees with the positions we have taken, we could face additional tax liability, including interest and penalties, which could adversely affect our financial results. For more information, refer to Part II, Item 8. Notes to the Consolidated Financial Statements, Note 10: Income Tax. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also have animal nutrition operations, which are associated with the Chicken rendering facilities or within various Chicken processing facilities. The blending mills, feed mills, grain elevators and broiler hatcheries have sufficient capacity to meet the needs of the chicken growout operations.
Biggest changeChicken Our vertically-integrated Chicken operations facilities include processing facilities, rendering facilities, blending mills, feed mills, grain elevators and broiler hatcheries. The Chicken processing facilities include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing. We also have animal nutrition operations, which are associated with the Chicken rendering facilities or within various Chicken processing facilities.
We own and lease domestic distribution and cold storage facilities that support the supply chains of all our segment operations and are not specifically dedicated to individual segments. 20 Our International/Other foreign production operations in Asia-Pacific and China-Korea include one beef facility, 21 chicken processing facilities, three feed mills and one broiler hatchery.
We own and lease domestic distribution and cold storage facilities that support the supply chains of all our segment operations and are not specifically dedicated to individual segments. Our International/Other foreign production operations in Asia-Pacific and China-Korea include one beef facility, 21 chicken processing facilities, three feed mills and one broiler hatchery.
PROPERTIES The following table summarizes our domestic properties as of September 30, 2023: Number of Facilities (1) Owned Leased Total Capacity (2) Beef Segment Facilities 14 — 14 155,000 head Pork Segment Facilities 7 — 7 471,000 head Chicken Segment Facilities 176 7 183 45 million head Prepared Foods Segment Facilities 36 — 36 71 million pounds (1) Certain facilities produce products that are reported in multiple segments.
PROPERTIES The following table summarizes our domestic properties as of September 28, 2024: Number of Facilities (1) Owned Leased Total Capacity (2) Beef Segment Facilities 12 — 12 155,000 head Pork Segment Facilities 6 — 6 421,000 head Chicken Segment Facilities 163 6 169 42 million head Prepared Foods Segment Facilities 37 — 37 74 million pounds (1) Certain facilities produce products that are reported in multiple segments.
Utilization of capacity varies by facility based on the type of products assigned and the level of demand for those products. Beef Beef facilities include various phases of harvesting live cattle and fabricating beef products and specialty products. We also have various facilities which have rendering operations along with tanneries and hide treatment operations.
Utilization of capacity varies by facility based on the type of products assigned and the level of demand for those products. Beef Beef facilities include various phases of harvesting live cattle and fabricating beef products and specialty products. The Beef segment includes four case-ready operations that share facilities with the Pork segment.
We also consider the efficiencies of our operations and may from time to time consider changing the number or type of facilities we operate to align with our capacity needs.
We regularly engage in construction and other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities. We also consider the efficiencies of our operations and may from time to time consider changing the number or type of facilities we operate to align with our capacity needs. 19
The processing facilities include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing. We also have a foreign production operation in Europe which includes a chicken further-processing facility. We believe our present facilities are generally adequate and suitable, have sufficient capacity and are appropriately utilized for our current purposes.
The processing facilities include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing. We believe our present facilities are generally adequate and suitable, have sufficient capacity and are appropriately utilized for our current purposes. Fluctuations in inventories, production and utilization may occur based upon seasonal or other changes in demand for our products.
The Chicken segment includes one processing facility that shares a facility with and is included in the Prepared Foods segment in the table above.
The blending mills, feed mills, grain elevators and broiler hatcheries have sufficient capacity to meet the needs of the chicken growout operations. The Chicken segment includes one processing facility that shares a facility with and is included in the Prepared Foods segment in the table above.
As described in Part II, Item 8, Notes to Consolidated Financial Statements, Note 7: Restructuring and Related Charges, we announced the closures of six Chicken segment facilities of which two have closed as of September 30, 2023 and four are expected to close in the first half of fiscal 2024.
The Pork segment includes four case-ready operations that share facilities with and are included in the Beef segment in the table above. As described in Part II, Item 8, Notes to Consolidated Financial Statements, Note 7: Restructuring and Related Charges, we closed one Pork segment facility during fiscal 2024.
The Beef segment includes five case-ready operations that share facilities with the Pork segment. One of the beef facilities contains a tallow refinery. Pork Pork facilities include various phases of harvesting live hogs and fabricating pork products and specialty products.
One of the beef facilities contains a tallow refinery. As described in Part II, Item 8, Notes to Consolidated Financial Statements, Note 7: Restructuring and Related Charges, we closed two Beef segment facilities during fiscal 2024. Pork Pork facilities include various phases of harvesting live hogs and fabricating pork products and specialty products.
Removed
The Pork segment includes five case-ready operations that share facilities with and are included in the Beef segment in the table above. Chicken Our vertically-integrated Chicken operations facilities include processing facilities, rendering facilities, blending mills, feed mills, grain elevators and broiler hatcheries. The Chicken processing facilities include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing.
Added
As described in Part II, Item 8, Notes to Consolidated Financial Statements, Note 7: Restructuring and Related Charges, we sold or closed a total of five Chicken segment locations which included certain feed mills and hatcheries supporting those processing facilities during fiscal 2024. Prepared Foods Our Prepared Foods segment includes processing facilities and a vertically-integrated turkey operation.
Removed
Prepared Foods Our Prepared Foods segment includes processing facilities and a vertically-integrated turkey operation.
Removed
Fluctuations in inventories, production and utilization may occur based upon seasonal or other changes in demand for our products. We regularly engage in construction and other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOther Matters As of September 30, 2023, we had approximately 139,000 te am members and, at any time, have various employment practices matters outstanding. In the aggregate, these matters are important to the Company, and we devote considerable resources to managing employment issues.
Biggest changeIn the aggregate, these matters are important to the Company, and we devote considerable resources to managing employment issues. Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial amounts) arising out of the conduct of our business.
On March 17, 2023, the parties received a 90-day extension from the district court and continued to confer on appropriate remedies. On June 12, 2023, the Court ordered the parties to mediation. The parties attended an in-person mediation on October 12, 2023, but were unable to reach a resolution. Defendants subsequently filed a post-trial motion to dismiss, which remains pending.
On March 17, 2023, the parties received a 90-day extension from the district court and continued to confer on appropriate remedies. On June 12, 2023, the Court ordered the parties to mediation. The parties attended an in-person mediation on October 12, 2023, but were unable to reach a resolution.
Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial amounts) arising out of the conduct of our business. While the ultimate results of these matters cannot be determined, they are not expected to have a material adverse effect on our consolidated results of operations or financial position.
While the ultimate results of these matters cannot be determined, they are not expected to have a material adverse effect on our consolidated results of operations or financial position.
Added
Defendants subsequently filed a post-trial motion to dismiss, which the court denied on June 26, 2024. An evidentiary hearing is scheduled for December 2024. Other Matters As of September 28, 2024, we had approximately 138,000 team members and, at any time, have various employment practices matters outstanding.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeTyson Chairman of the Board of Directors 70 2011 Adam Deckinger General Counsel and Secretary 47 2023 Melanie Boulden Group President, Prepared Foods and Chief Growth Officer 51 2023 Donnie King President and Chief Executive Officer 61 2019 Wes Morris Group President, Poultry 58 2023 Jason Nichol Chief Customer Officer 51 2021 Johanna Söderström Executive Vice President and Chief People Officer 52 2020 Brady Stewart Group President, Beef, Pork and Chief Supply Chain Officer 44 2023 Phillip Thomas Vice President, Controller and Chief Accounting Officer 48 2020 Amy Tu President, International 56 2017 John R.
Biggest changeTyson Chairman of the Board of Directors 71 2011 Lori Bondar Senior Vice President and Chief Accounting Officer 63 2023 Melanie Boulden Chief Growth Officer 52 2023 Curt Calaway Chief Financial Officer 51 2024 Devin Cole President, International & Global McDonald's 54 2024 Adam Deckinger General Counsel and Secretary 48 2023 Jacqueline Hanson Chief People Officer 55 2024 Donnie King President and Chief Executive Officer 62 2019 Wes Morris Group President, Poultry 59 2023 Kyle Narron Group President, Prepared Foods 44 2024 Brady Stewart Group President, Beef, Pork and Chief Supply Chain Officer 45 2023 John R.
Tyson has been an observer at the Company’s board of directors’ meetings since 2014. He was employed by J.P. Morgan and as a private equity and venture capital investor prior to joining the Company. PART II
Mr. Tyson has been an observer at the Company’s board of directors’ meetings since 2014. He was employed by J.P. Morgan and as a private equity and venture capital investor prior to joining the Company. PART II
Tyson Executive Vice President and Chief Financial Officer 33 2019 John H. Tyson has served as Chairman of the Board of Directors since 1998 and was previously Chief Executive Officer of the Company from 2000 until 2006. Mr. Tyson was initially employed by the Company in 1973.
Tyson Executive Vice President 34 2019 John H. Tyson has served as Chairman of the Board of Directors since 1998 and was previously Chief Executive Officer of the Company from 2000 until 2006. Mr. Tyson was initially employed by the Company in 1973.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 21 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Each of our executive officers serve one-year terms from the date of their election, or until their successors are appointed and qualified. Chairman of the Board of Directors John Tyson is the father of Chief Financial Officer John R. Tyson and nephew of Director Barbara A. Tyson.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Each of our executive officers serve one-year terms from the date of their election, or until their successors are appointed and qualified. Chairman of the Board of Directors John H. Tyson is the father of John R. Tyson and nephew of Director Barbara A. Tyson.
No other family relationships exist among these officers. The name, title, age (as of September 30, 2023) and calendar year of initial election to executive office of our executive officers are listed below: Name Title Age Year Elected Executive Officer John H.
No other family relationships exist among these officers. The name, title, age (as of September 28, 2024) and calendar year of initial election to executive office of our executive officers are listed below: Name Title Age Year Elected Executive Officer John H.
Tyson was appointed Executive Vice President and Chief Financial Officer in October 2022 after serving as Executive Vice President, Strategy and Chief Sustainability Officer since October 2021, as Chief Sustainability Officer from September 2019 to October 2021, and as Director, Office of the Chief Executive Officer since his initial employment with the Company in May 2019. Mr.
He was previously Executive Vice President and Chief Financial Officer of the Company from October 2022 to June 2024, after serving as Executive Vice President, Strategy and Chief Sustainability Officer since October 2021, as Chief Sustainability Officer from September 2019 to October 2021, and as Director, Office of the Chief Executive Officer since his initial employment with the Company in May 2019.
Deckinger was employed by The Boeing Company prior to joining the Company. Melanie Boulden was appointed Group President, Prepared Foods in September 2023 after serving as Chief Growth Officer since her initial employment with the Company in February 2023. Prior to joining the Company, Ms.
Bondar was employed by Avery Dennison Corporation from 2008 to 2023 prior to joining the Company. 20 Melanie Boulden was appointed Chief Growth Officer since her initial employment with the Company in February 2023. She has also served as Group President, Prepared Foods from September 2023 to September 2024. Prior to joining the Company, Ms.
Boulden was employed by The Coca-Cola Company from 2019 to 2022, Reebok International from 2018 to 2019, and Crayola and Kraft Foods prior to that. Donnie King was appointed President and Chief Executive Officer in June 2021 after serving as Chief Operating Officer since February 2021 and Group President Poultry since September 2020. Mr.
Hanson was employed by John Deere prior to joining the Company. Donnie King was appointed President and Chief Executive Officer in June 2021 after serving as Chief Operating Officer since February 2021 and Group President Poultry since September 2020. Mr.
Adam Deckinger was appointed as General Counsel and Secretary in January 2023 after serving as Senior Vice President and Head of Law and Compliance since November 2022. Prior to that role, Mr. Deckinger served as Vice President and Associate General Counsel since his initial employment with the Company in April 2018. Mr.
Cole was employed by George’s Inc. from 2016 to 2023 and Keystone Foods from 2015 to 2016 before returning to the Company. Adam Deckinger was appointed as General Counsel and Secretary in January 2023 after serving as Senior Vice President and Head of Law and Compliance since November 2022. Prior to that role, Mr.
Johanna Söderström was appointed Executive Vice President and Chief People Officer in October 2021 after serving as Executive Vice President and Chief Human Resources Officer since her initial employment with the Company in July 2020. Ms. Söderström was employed by Dow Chemical Company prior to joining the Company.
Deckinger served as Vice President and Associate General Counsel since his initial employment with the Company in April 2018. Mr. Deckinger was employed by The Boeing Company prior to joining the Company. Jacqueline Hanson was appointed Chief People Officer in January 2024 after serving as Human Resources Senior Vice President for Poultry, Cobb, McDonald’s and International since August 2022. Ms.
Tu served as Executive Vice President and Chief Legal Officer and Secretary from October 2021 to January 2023, as Executive Vice President, General Counsel and Secretary from November 2020 to October 2021 and as Executive Vice President and General Counsel since her initial employment with the Company in December 2017. Ms.
Lori Bondar was appointed Senior Vice President and Chief Accounting Officer in December 2023, after serving as Senior Vice President, Finance and Accounting since her initial employment with the Company in September 2023. Ms.
Removed
Jason Nichol was appointed Chief Customer Officer in February 2021 after serving as Senior Vice President, Walmart since March 2016 and as Vice President, Walmart since his initial employment with the Company in April 2015. Mr. Nichol was employed by Nabisco, Cott Beverages and Scotts Miracle-Gro prior to joining the Company.
Added
Boulden was employed by The Coca-Cola Company from 2019 to 2022, Reebok International from 2018 to 2019, and Crayola and Kraft Foods prior to that.
Removed
Phillip Thomas was appointed Vice President, Controller and Chief Accounting Officer in July 2020 after serving as Vice President and Assistant Controller since March 2014, prior to which he served as Senior Director Financial Reporting since his initial employment with the Company in July 2008. Amy Tu was appointed President, International in October 2022. Ms.
Added
Curt Calaway was appointed Chief Financial Officer in August 2024, after serving as interim Chief Financial Officer from June 2024 to August 2024, as Chief Financial Officer for the Company's Prepared Foods business segment from May 2024 to August 2024, and as Senior Vice President and Treasurer from April 2022 to May 2024 and from December 2018 to May 2021.
Removed
Tu also held the role of Chief Administrative Officer from October 2022 to August 2023. Prior to that role, Ms.
Added
Between May 2021 and April 2022, he served as Senior Vice President, Finance and Corporate Development and has also held various leadership roles including Controller, Chief Accounting Officer and Vice President of Audit and Compliance. Mr. Calaway was initially employed by the Company in 2006.
Removed
Tu was employed by The Boeing Company prior to joining the Company. 22 John R.
Added
Devin Cole was appointed as President, International & Global McDonald’s in July 2024 after serving as President, Global McDonald’s since March 2024. He was also employed at the Company from 1995 to 2014, serving in various roles including as a Group Vice President and as Chief Commercial Officer. Mr.
Added
Kyle Narron was appointed Group President, Prepared Foods in October 2024, after serving as Senior Vice President of Pork and Prepared Foods from February 2023 to September 2024. Prior to joining the Company, Mr. Narron was employed by Smithfield Foods and Summit Logistics Group. John R. Tyson is an Executive Vice President of the Company.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePERFORMANCE GRAPH The following graph shows a five-year comparison of cumulative total returns for our Class A stock, the Standard & Poor’s (“S&P”) 500 Index, our old peer group and our new peer group of companies described below. 23 Fiscal Years Ended 9/29/18 9/28/19 10/3/20 10/2/21 10/1/22 9/30/23 Tyson Foods, Inc. $ 100.00 $ 146.23 $ 104.29 $ 141.12 $ 121.45 $ 96.20 S&P 500 Index 100.00 103.72 119.51 157.80 131.85 160.31 Old Peer Group 100.00 115.97 119.31 131.90 146.85 152.76 New Peer Group 100.00 129.98 143.64 159.24 158.38 186.28 The total cumulative return on investment (change in the year-end stock price plus reinvested dividends), which is based on the stock price or composite index at the end of fiscal 2018, is presented for each of the periods for the Company, the S&P 500 Index and our old and new peer groups.
Biggest changeFiscal Years Ended 9/28/19 10/3/20 10/2/21 10/1/22 9/30/23 9/28/24 Tyson Foods, Inc. $ 100.00 $ 71.30 $ 96.50 $ 83.02 $ 65.73 $ 80.54 S&P 500 Index 100.00 115.25 152.19 127.18 154.68 210.00 Fiscal 2023 (Peer Group) 100.00 111.01 125.39 124.62 148.13 188.77 Fiscal 2024 (S&P 500 Consumer Staples Index) 100.00 111.70 126.14 124.21 134.09 174.20 The total cumulative return on investment (change in the year-end stock price plus reinvested dividends), which is based on the stock price or composite index at the end of fiscal 2019, is presented for each of the periods for the Company, the S&P 500 Index, our fiscal 2023 peer group and the S&P 500 Consumer Staples Index.
The information in this “Performance Graph” section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934. ITEM 6. SELECTED FINANCIAL DATA Not applicable. 24
The information in this “Performance Graph” section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934. 23 ITEM 6. SELECTED FINANCIAL DATA Not applicable.
We anticipate the remaining quarterly dividends in fiscal 2024 will be $0.49 and $0.441 per share of our Class A and Class B stock, respectively. This results in an annual dividend rate in fiscal 2024 of $1.96 for Class A shares and $1.764 for Class B shares, or a 2% increase compared to the fiscal 2023 annual dividend rate.
We anticipate the remaining quarterly dividends in fiscal 2025 will be $0.50 and $0.45 per share of our Class A and Class B stock, respectively. This results in an annual dividend rate in fiscal 2025 of $2.00 for Class A shares and $1.80 for Class B shares, or a 2% increase compared to the fiscal 2024 annual dividend rate.
The graph compares the performance of the Company’s Class A common stock with that of the S&P 500 Index and our old and new peer groups, with the return of each company in the peer groups weighted on market capitalization.
The graph compares the performance of the Company’s Class A common stock with that of the S&P 500 Index, our fiscal 2023 peer group, with the return of each company in the peer group weighted on market capitalization, and the S&P 500 Consumer Staples Index.
Effective November 10, 2023, the Board of Directors increased the quarterly dividend previously declared on August 10, 2023, to $0.49 per share on our Class A common stock and $0.441 per share on our Class B common stock.
Effective November 8, 2024, the Board of Directors increased the quarterly dividend previously declared on August 8, 2024, to $0.50 per share on our Class A common stock and $0.45 per share on our Class B common stock.
The Board also declared a quarterly dividend of $0.49 per share on our Class A common stock and $0.441 per share on our Class B common stock, payable on March 15, 2024, to shareholders of record at the close of business on March 1, 2024.
The Board also declared a quarterly dividend of $0.50 per share on our Class A common stock and $0.45 per share on our Class B common stock, payable on March 14, 2025, to shareholders of record at the close of business on February 28, 2025.
The increased quarterly dividend is payable on December 15, 2023, to shareholders of record at the close of business on December 1, 2023.
The increased quarterly dividend is payable on December 13, 2024, to shareholders of record at the close of business on November 29, 2024.
Holders of Class B stock are entitled to 10 votes per share and holders of Class A stock are entitled to one vote per share on matters submitted to shareholders for approval. As of October 28, 2023, there were approximately 25,000 holders of record of our Class A stock and six holders of record of our Class B stock.
Holders of Class B stock are entitled to 10 votes per share and holders of Class A stock are entitled to one vote per share on matters submitted to shareholders for approval.
Period Total Number of Shares Purchased (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) Jul. 2, 2023 to Jul. 29, 2023 73,856 $ 52.72 — 7,301,400 Jul. 30, 2023 to Sept. 2, 2023 86,157 54.69 — 7,301,400 Sept. 3, 2023 to Sept. 30, 2023 33,416 52.57 — 7,301,400 Total 193,429 $ 53.57 — 7,301,400 (1) On February 7, 2003, our Board of Directors approved a program to repurchase up to 25 million shares of Class A common stock from time to time in open market or privately negotiated transactions.
Period Total Number of Shares Purchased (2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) Jun. 30, 2024 to Jul. 27, 2024 3,165 $ 58.26 — 7,301,400 Jul. 28, 2024 to Aug. 31, 2024 9,538 62.36 — 7,301,400 Sept. 1, 2024 to Sept. 28, 2024 88,487 47.63 — 7,301,400 Total 101,190 $ 49.35 — 7,301,400 (1) On February 7, 2003, our Board of Directors approved a program to repurchase up to 25 million shares of Class A common stock from time to time in open market or privately negotiated transactions.
Our new peer group includes: Albertsons Companies, Archer Daniels Midland Co., Bunge Ltd., Caterpillar Inc., Coca-Cola Co., Deere & Co., J.B. Hunt Transport Services, Kraft Heinz Co., Mondelez International, Inc., PepsiCo Inc., Performance Food Group, Sysco Corp., United Natural Foods, U.S. Foods Holding, Proctor & Gamble and Walmart Inc.
Hunt Transport Services, Kraft Heinz Co., Mondelez International, Inc., PepsiCo Inc., Performance Food Group, Sysco Corp., United Natural Foods, U.S. Foods Holding, Proctor & Gamble and Walmart Inc.
(2) We purchased 193,429 shares during the period that were not made pursuant to our previously announced stock repurchase program but were purchased to fund certain Company obligations under our equity compensation plans. These transactions included 165,441 shares purchased in open market transactions and 27,988 shares withheld to cover required tax withholdings on the vesting of restricted stock.
(2) We purchased 101,190 shares during the period that were not made pursuant to our previously announced stock repurchase program but were purchased to fund certain Company obligations under our equity compensation plans.
DIVIDENDS Cash dividends cannot be paid to holders of Class B stock unless they are simultaneously paid to holders of Class A stock. The per share amount of the cash dividend paid to holders of Class B stock cannot exceed 90% of the cash dividend simultaneously paid to holders of Class A stock.
The per share amount of the cash dividend paid to holders of Class B stock cannot exceed 90% of the cash dividend simultaneously paid to holders of Class A stock. In fiscal 2024, the annual dividend rate for Class A stock was $1.96 per share and the annual dividend rate for Class B stock was $1.764 per share.
The stock price performance of the Company’s Class A common stock shown in the above graph is not necessarily indicative of future stock price performance. During fiscal 2023, we changed our peer group to include geographically relevant peers in addition to those operating in the manufacturing, food and CPG industries.
The stock price performance of the Company’s Class A common stock shown in the above graph is not necessarily indicative of future stock price performance. For fiscal 2024, we selected the S&P 500 Consumer Staples Index for the comparison of total cumulative return on investment.
Removed
In fiscal 2023, the annual dividend rate for Class A stock was $1.92 per share and the annual dividend rate for Class B stock was $1.728 per share.
Added
As of October 26, 2024, there were approximately 25,000 holders of record of our Class A stock and six holders of record of our Class B stock. 21 DIVIDENDS Cash dividends cannot be paid to holders of Class B stock unless they are simultaneously paid to holders of Class A stock.
Removed
(3) Shares purchased during the period pursuant to our previously announced stock repurchase program.
Added
(3) Shares purchased during the period pursuant to our previously announced stock repurchase program. 22 PERFORMANCE GRAPH The following graph shows a five-year comparison of cumulative total returns for our Class A stock, the Standard & Poor’s (“S&P”) 500 Index, our fiscal 2023 peer group and the S&P 500 Consumer Staples Index described below.
Removed
The complete list of our old peer group includes: Archer-Daniels-Midland Company, Bunge Limited, Campbell Soup Company, ConAgra Foods, Inc., General Mills, Inc., Hormel Foods Corp., Kellogg Co., Kraft Heinz Company, Mondelez International Inc., PepsiCo, Inc., Pilgrim’s Pride Corporation, The Coca-Cola Company, The Hershey Company and The J.M. Smucker Company.
Added
The S&P 500 Consumer Staples Index was selected as it includes a larger sample of companies within or adjacent to our industry. For fiscal 2023, our peer group included: Albertsons Companies, Archer Daniels Midland Co., Bunge Ltd., Caterpillar Inc., Coca-Cola Co., Deere & Co., J.B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

97 edited+21 added−52 removed87 unchanged
Biggest changeNet Income (Loss) Attributable to Tyson in millions, except per share data 2023 2022 Net income (loss) attributable to Tyson $ (648) $ 3,238 Net income (loss) attributable to Tyson - per diluted share (1.87) 8.92 2023 – Included the following items: • $757 million pretax, or ($2.13) per diluted share, of goodwill impairment charges (non-tax deductible) net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. • $322 million pretax, or ($0.67) per diluted share, of charges related to plant closures. • $156 million pretax, or ($0.33) per diluted share, related to the recognition of legal contingency accruals. • $124 million pretax, or ($0.26) per diluted share, of restructuring and related charges. 29 • $75 million pretax, or $0.16 per diluted share, of production facilities fire insurance proceeds, net of costs incurred. • $26 million post tax, or $0.07 per diluted share, from remeasurement of net deferred tax liabilities at lower enacted state tax rates. • $17 million pretax, or ($0.04) per diluted share, of product line discontinuation charges. • $16 million pretax, or $0.03 per diluted share, related to the relocation of a production facility in China net of $3 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. 2022 – Included the following items: • $114 million pretax, or $0.23 per diluted share, of production facilities fire insurance proceeds, net of costs incurred. • $66 million pretax, or ($0.14) per diluted share, of restructuring and related charges. • $36 million post tax, or $0.10 per diluted share, from remeasurement of net deferred tax liabilities at lower enacted state tax rates.
Biggest changeAdditionally, the impact of tax benefits decreased the effective tax rate on pretax income in fiscal 2024 and increased the effective tax rate in fiscal 2023 due to the pretax loss. 2024 – The effective tax rate is higher than the statutory rate due to state taxes and the impact of $63 million of non-deductible goodwill associated with the sale of our Vienna, Georgia facility. 2023 – The effective tax rate is lower than the statutory rate due to a $781 million non-deductible goodwill impairment, partially offset by income tax credits and a $26 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in fiscal 2023. 27 Net Income (Loss) Attributable to Tyson in millions, except per share data 2024 2023 Net income (loss) attributable to Tyson $ 800 $ (648) Net income (loss) attributable to Tyson - per diluted share 2.25 (1.87) 2024 – Included the following items: • $182 million pretax, or ($0.41) per diluted share, of charges related to plant closures and disposals. • $174 million pretax, or ($0.38) per diluted share, related to the recognition of legal contingency accruals. • $86 million pretax, or ($0.21) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility. • $31 million pretax, or ($0.06) per diluted share, of restructuring and related charges. • $8 million pretax, or ($0.02) per diluted share, of brand discontinuation charges. • $104 million pretax, or $0.23 per diluted share, of production facilities fire insurance proceeds, net of costs incurred. 2023 – Included the following items: • $757 million pretax, or ($2.13) per diluted share, of goodwill impairment charges (non-tax deductible) net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. • $322 million pretax, or ($0.67) per diluted share, of charges related to plant closures and disposals. • $156 million pretax, or ($0.33) per diluted share, related to the recognition of legal contingency accruals. • $124 million pretax, or ($0.26) per diluted share, of restructuring and related charges. • $75 million pretax, or $0.16 per diluted share, of production facilities fire insurance proceeds, net of costs incurred. • $26 million post tax, or $0.07 per diluted share, from remeasurement of net deferred tax liabilities at lower enacted state tax rates. • $17 million pretax, or ($0.04) per diluted share, of product line discontinuation charges. • $16 million pretax, or $0.03 per diluted share, related to the relocation of a production facility in China net of $3 million associated with Net Income (Loss) Attributable to Noncontrolling Interests.
Higher sales volume increased cost of sales $444 million while higher input cost per pound increased cost of sales $3,192 million. • The $3,192 million impact of higher input cost per pound was impacted by: • Increase in live cattle costs of approximately $2,135 million in our Beef segment. • Increase due to net derivative losses of $117 million in fiscal 2023, compared to net derivative gains of $225 million in fiscal 2022 due to our risk management activities.
Higher sales volume increased cost of sales by $444 million while higher input cost per pound increased cost of sales by $3,192 million. • The $3,192 million impact of higher input cost per pound was impacted by: • Increase in live cattle costs of approximately $2,135 million in our Beef segment. • Increase due to net derivative losses of $117 million in fiscal 2023, compared to net derivative gains of $225 million in fiscal 2022 due to our risk management activities.
The change in average sales price for the fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals. • Operating Income (Loss) – Operating income decreased in fiscal 2023 primarily due to the impacts of inflationary market conditions as well as operational impacts associated with strategic decisions in the first half of fiscal 2023.
The change in average sales price for the fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals. • Operating Income (Loss) – Operating income decreased primarily due to the impacts of inflationary market conditions as well as operational impacts associated with strategic decisions in the first half of fiscal 2023.
Ratings Level (S&P/Moody’s) Facility Fee Rate All-in Borrowing Spread A2/A or above 0.700 % 0.875 % A3/A- 0.090 % 1.000 % Baal/BBB+ (current level) 0.100 % 1.125 % Baa2/BBB 0.125 % 1.250 % Baa3/BBB or lower 0.175 % 1.375 % In the event the ratings fall within different levels, the applicable rate will be based upon the higher of the two Levels or, if there is more than a one-notch split between the two Levels, then the Applicable Rate will be based upon the Level that is one Level below the higher Level.
Ratings Level (Moody's/S&P) Facility Fee Rate All-in Borrowing Spread A2/A or above 0.700 % 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 ratings fall within different levels, the applicable rate will be based upon the higher of the two Levels or, if there is more than a one-notch split between the two Levels, then the Applicable Rate will be based upon the Level that is one Level below the higher Level.
SEGMENT RESULTS We operate in four reportable segments: Beef, Pork, Chicken, and Prepared Foods. 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.
SEGMENT RESULTS We operate in four reportable segments: Beef, Pork, Chicken, and Prepared Foods. International/Other primarily includes our foreign operations in Australia, China, Malaysia, Mexico, South Korea, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.
Although the 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.
Although the remaining reporting units and indefinite life intangible assets had more than 20% excess fair value over carrying amount as of the date of the most recent estimated fair value determination, they are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.
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. For further description of the business, refer to Part I, Item 1, Business.
International/Other primarily includes our foreign operations in Australia, China, Malaysia, Mexico, South Korea, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC. For further description of the business, refer to Part I, Item 1, Business.
Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may be considered to have indefinite useful lives. 44 Effect if Actual Results Differ From Assumptions While management believes those expectations and assumptions are reasonable, they are inherently uncertain.
Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may be considered to have indefinite useful lives. Effect if Actual Results Differ From Assumptions While management believes those expectations and assumptions are reasonable, they are inherently uncertain.
Upon performing the quantitative test, if the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. 41 Judgments and Uncertainties We estimate the fair value of our reporting units considering the use of various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public company method), which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
Upon performing the quantitative test, if the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. 39 Judgments and Uncertainties We estimate the fair value of our reporting units considering the use of various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public company method), which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors, including minimum funding requirements. As a result, the actual funding in fiscal 2024 may be different from the estimate. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements material to our financial position or results of operations.
The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors, including minimum funding requirements. As a result, the actual funding in fiscal 2025 may be different from the estimate. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements material to our financial position or results of operations.
These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein. • Increase of $322 million due to costs associated with plant closures. • Increase of $238 million related to inventory lower of cost or net realizable value adjustments. • Increase of approximately $36 million in our Chicken segment related to net increases in feed ingredients costs and growout expenses, partially offset by reduced outside meat purchases. • Increase of approximately $24 million in our Chicken segment due to $11 million of insurance proceeds, net of costs incurred, in fiscal 2023 compared to $35 million of insurance proceeds, net of costs incurred, in fiscal 2022 related to the fire at our production facility in fiscal 2021. • Decrease in live hog costs of approximately $295 million in our Pork segment. • Decrease in freight and transportation costs of approximately $175 million. • Decrease in raw material and other input costs of approximately $45 million in our Prepared Foods segment. 27 • Remaining increase in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes as well as the impact of the inflationary environment on our labor and other input costs, partially offset by savings from our productivity program. • The $444 million impact of increased sales volume was primarily driven by increased volumes in our Chicken segment. 2022 vs. 2021 – • Cost of sales increased $6,091 million.
These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein. • Increase of $322 million due to costs associated with plant closures and disposals. • Increase of $238 million related to inventory lower of cost or net realizable value adjustments. • Increase of approximately $36 million in our Chicken segment related to net increases in feed ingredients costs and growout expenses, partially offset by reduced outside meat purchases. • Increase of approximately $24 million in our Chicken segment due to $11 million of insurance proceeds, net of costs incurred, in fiscal 2023 compared to $35 million of insurance proceeds, net of costs incurred, in fiscal 2022 related to the fire at our production facility in fiscal 2021. • Decrease in live hog costs of approximately $295 million in our Pork segment. • Decrease in freight and transportation costs of approximately $175 million. • Decrease in raw material and other input costs of approximately $45 million in our Prepared Foods segment. • Remaining increase in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes as well as the impact of the inflationary environment on our labor and other input costs, partially offset by savings from our productivity program. • The $444 million impact of increased sales volume was primarily driven by increased volumes in our Chicken segment.
We also have employee benefit obligations consisting of pensions and other postretirement benefits of $193 million that are excluded from the table above. A discussion of the Company's pension and postretirement plans, including funding matters, is included in Part II, Item 8, Notes to Consolidated Financial Statements, Note 15: Pensions and Other Postretirement Benefits.
We also have employee benefit obligations consisting of pensions and other postretirement benefits of $180 million that are excluded from the table above. A discussion of the Company's pension and postretirement plans, including funding matters, is included in Part II, Item 8, Notes to Consolidated Financial Statements, Note 15: Pensions and Other Postretirement Benefits.
(7) Other long-term liabilities primarily consist of deferred compensation, deferred income, self-insurance and asset retirement obligations. We are unable to reliably estimate the amount and timing of the remaining payments beyond fiscal 2023; therefore, we have only included the total liability in the table above.
(7) Other long-term liabilities primarily consist of deferred compensation, deferred income, self-insurance and asset retirement obligations. We are unable to reliably estimate the amount and timing of the remaining payments beyond fiscal 2024; therefore, we have only included the total liability in the table above.
We performed our annual impairment assessment as of the first day of our fourth quarter of fiscal 2023 and determined it was necessary to perform quantitative assessments for our Beef, Pork and two Chicken segment reporting units, as all of these reporting units were at heightened risk of impairment following the third quarter assessment.
We performed our annual impairment assessment as of the first day of our fourth quarter of fiscal 2024 and determined it was necessary to perform quantitative assessments for our Beef, Pork, and two Chicken segment reporting units, as all of these reporting units were at heightened risk of impairment following the fiscal 2023 assessments.
RECENTLY ISSUED/ADOPTED ACCOUNTING PRONOUNCEMENTS Refer to the discussion under Part II, Item 8, Notes to Consolidated Financial Statements, Note 1: Business and Summary of Significant Accounting Policies and Note 2: Changes in Accounting Principles. 38 CRITICAL ACCOUNTING ESTIMATES The preparation of consolidated financial statements requires us to make estimates and assumptions.
RECENTLY ISSUED/ADOPTED ACCOUNTING PRONOUNCEMENTS Refer to the discussion under Part II, Item 8, Notes to Consolidated Financial Statements, Note 1: Business and Summary of Significant Accounting Policies and Note 2: Changes in Accounting Principles. 36 CRITICAL ACCOUNTING ESTIMATES The preparation of consolidated financial statements requires us to make estimates and assumptions.
Our policy is to maintain an accrual at the actuarial estimated median. 39 Judgments and Uncertainties Our self-insurance liability contains uncertainties due to assumptions required and judgments used. Costs to settle our obligations, including legal and healthcare costs, could increase or decrease causing estimates of our self-insurance liability to change.
Our policy is to maintain an accrual at the actuarial estimated median. 37 Judgments and Uncertainties Our self-insurance liability contains uncertainties due to assumptions required and judgments used. Costs to settle our obligations, including legal and healthcare costs, could increase or decrease causing estimates of our self-insurance liability to change.
The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors, including minimum funding requirements. 40 Judgments and Uncertainties Our defined benefit pension plans contain uncertainties due to assumptions required and judgments used.
The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors, including minimum funding requirements. 38 Judgments and Uncertainties Our defined benefit pension plans contain uncertainties due to assumptions required and judgments used.
Effect if Actual Results Differ From Assumptions We have not made material changes in the accounting methodology used to evaluate impairment of goodwill and intangible assets during the last three years.
Effect if Actual Results Differ From Assumptions We have not made material changes in the accounting methodology used to evaluate impairment of goodwill and indefinite life intangible assets during the last three years.
Purchase orders are not included in the table, as a purchase order is an authorization to purchase and is cancellable. Contracts for goods or services that contain termination clauses without penalty have also been excluded. (6) Amounts include estimated amounts to complete buildings and equipment under construction as of September 30, 2023.
Purchase orders are not included in the table, as a purchase order is an authorization to purchase and is cancellable. Contracts for goods or services that contain termination clauses without penalty have also been excluded. (6) Amounts include estimated amounts to complete buildings and equipment under construction as of September 28, 2024.
However, if actual results are not consistent with our estimates or assumptions, they are accumulated and amortized over future periods and, therefore generally affect the net periodic benefit cost in future periods. A 1% change in the discount rate at September 30, 2023, would not have a significant impact on the projected benefit obligation or net periodic benefit cost.
However, if actual results are not consistent with our estimates or assumptions, they are accumulated and amortized over future periods and, therefore generally affect the net periodic benefit cost in future periods. A 1% change in the discount rate at September 28, 2024, would not have a significant impact on the projected benefit obligation or net periodic benefit cost.
For certain grain purchase commitments with a fixed quantity provision, we have assumed the future obligations under the commitment based on available commodity futures prices as published in observable active markets as of September 30, 2023. We have excluded future purchase commitments for contracts that do not meet these criteria.
For certain grain purchase commitments with a fixed quantity provision, we have assumed the future obligations under the commitment based on available commodity futures prices as published in observable active markets as of September 28, 2024. We have excluded future purchase commitments for contracts that do not meet these criteria.
As set forth in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 20: Commitments and Contingencies, we recognized $156 million and $626 million of charges in fiscal 2023 and 2021, respectively, from legal accruals related to our broiler antitrust civil litigation, broiler chicken grower litigation, and wage rate litigation based on our assessment of the likelihood and amount of probable losses.
As set forth in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 20: Commitments and Contingencies, we recognized $174 million and $156 million of charges in fiscal 2024 and 2023, respectively, from legal accruals related to our broiler antitrust civil litigation, broiler chicken grower litigation, pork antitrust litigation and wage rate litigation based on our assessment of the likelihood and amount of probable losses.
A 10% change in the actuarial estimate at September 30, 2023, would not have a significant impact on our liability. Income taxes Description We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income.
A 10% change in the actuarial estimate at September 28, 2024, would not have a significant impact on our liability. Income taxes Description We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income.
A 1% change in the return on plan assets at September 30, 2023, would not have a significant impact on net periodic benefit cost. The sensitivities reflect the impact of changing one assumption at a time with the remaining assumptions held constant.
A 1% change in the return on plan assets at September 28, 2024, would not have a significant impact on net periodic benefit cost. The sensitivities reflect the impact of changing one assumption at a time with the remaining assumptions held constant.
Any increase in the discount rate or reduced estimated long-term operating margins to below 2.0%-3.0% (breakeven), with all other assumptions unchanged, would have caused the carrying value of this reporting unit to exceed its fair value, which may have resulted in an additional material goodwill impairment loss.
An increase of approximately 25-50 basis points in the discount rate or reduced estimated long-term operating margins to below 2.0%-3.0% (breakeven), with all other assumptions unchanged, would have caused the carrying value of this reporting unit to exceed its fair value, which may have resulted in an additional material goodwill impairment loss.
EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with generally accepted accounting principles (“GAAP”) and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity.
EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with GAAP and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity.
In fiscal 2023, our operating income was impacted by $781 million of goodwill impairment charges, $322 million of plant closure charges, $156 million of legal contingency accruals, $124 million of restructuring and related charges, $17 million of product line discontinuation charges, and benefited by $53 million of insurance proceeds, net of costs incurred, related to fires at our production facilities and $19 million related to the relocation of a production facility in China.
In fiscal 2023, our results were impacted by $781 million of goodwill impairment charges, $322 million of plant closure and disposal charges, $156 million of legal contingency accruals, $124 million of restructuring and related charges, $17 million of product line discontinuation charges, and benefited from $53 million of insurance proceeds, net of costs incurred, related to fires at our production facilities and $19 million related to the relocation of a production facility in China.
The current year results are not indicative of future market participant expectations in an exit transaction primarily due to the impacts of rapid inflationary pressures and volatile market conditions which impacts we expect to be mostly temporary in nature.
The current year growth rate is not indicative of future market participant expectations in an exit transaction primarily due to the impacts of rapid inflationary pressures and volatile market conditions which impacts we expect to be mostly temporary in nature.
(2) Interest payments include interest on all outstanding debt. Payments are estimated for variable rate and variable term debt based on effective interest rates at September 30, 2023, and expected payment dates.
(2) Interest payments include interest on all outstanding debt. Payments are estimated for variable rate and variable term debt based on effective interest rates at September 28, 2024, and expected payment dates.
We currently expect net periodic benefit cost associated with our pension plans to be approximately $7 million in fiscal 2024. We expect to contribute approximately $15 million of cash to our pension plans in fiscal 2024.
We currently expect net periodic benefit cost associated with our pension plans to be approximately $7 million in fiscal 2025. We expect to contribute approximately $14 million of cash to our pension plans in fiscal 2025.
A hypothetical increase in the discount rate of approximately 125-150 basis points as of the date of its most recent estimated fair value determination, with all other assumptions unchanged, would have caused the carrying value of the Prepared Foods reporting unit, with goodwill of $5.9 billion at September 30, 2023, to approximate its fair value.
A hypothetical increase in the discount rate of approximately 125-150 basis points as of the date of its most recent estimated fair value determination, which was in the third quarter of fiscal 2023, with all other assumptions unchanged, would have caused the carrying value of the Prepared Foods reporting unit, with goodwill of $5.9 billion at September 28, 2024, to approximate its fair value.
We do not currently consider any of our other indefinite life intangible assets, which had aggregate carrying value of $3.3 billion at September 30, 2023, to be at heightened risk of impairment.
We do not currently consider any of our other indefinite life intangible assets, which had aggregate carrying value of $3.6 billion at September 28, 2024, to be at heightened risk of impairment.
Under the terms of the facility, we have the option to establish incremental commitment increases of up to $500 million if certain conditions are met. • We expect net interest expense will approximate $400 million for fiscal 2024. • Our ratio of short-term assets to short-term liabilities (“current ratio”) was 1.3 to 1 and 1.8 to 1 at September 30, 2023, and October 1, 2022, respectively.
Under the terms of the facility, we have the option to establish incremental commitment increases of up to $500 million if certain conditions are met. • We expect net interest expense will approximate $380 million for fiscal 2025. • Our ratio of short-term assets to short-term liabilities (“current ratio”) was 2.0 to 1 and 1.3 to 1 at September 28, 2024, and September 30, 2023, respectively.
The potential maximum contractual obligation associated with our cash flow assistance programs at September 30, 2023, based on the estimated fair values of the livestock supplier’s net tangible assets on that date, aggregated to approximately $295 million.
The potential maximum contractual obligation associated with our cash flow assistance programs at September 28, 2024, based on the estimated fair values of the livestock supplier’s net tangible assets on that date, aggregated to approximately $280 million.
Additionally, a hypothetical increase in the discount rate of approximately 25-50 basis points at September 30, 2023, with all other assumptions unchanged, would have caused the carrying values of the Chicken segment's reporting units to approximate its fair value, which may have resulted in a material goodwill impairment loss.
Additionally, a hypothetical increase in the discount rate of approximately 75-125 basis points at September 28, 2024, with all other assumptions unchanged, would have caused the carrying values of the Chicken segment's reporting units to approximate its fair value, which may have resulted in a material goodwill impairment loss.
Additionally, operating income in fiscal 2023 was impacted by a $333 million goodwill impairment charge and benefited from $42 million of insurance proceeds related to a fire at a production facility in fiscal 2019, partially offset by $33 million of restructuring and related charges.
Additionally, operating income in fiscal 2023 was impacted by a goodwill impairment charge and benefited from increased insurance proceeds related to a fire at a production facility in fiscal 2019, partially offset by increased restructuring and related charges.
Had we assumed future operating margins and growth rates consistent with those realized in fiscal 2023, we would have failed the impairment quantitative test, which may have resulted in material impairment losses.
Had we assumed future growth rates consistent with those realized in fiscal 2024, we would have failed the impairment quantitative test, which may have resulted in material impairment losses.
We generally assumed operating margins and growth rates in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.
We generally assumed operating margins and growth rates in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction. Operating margins for fiscal 2024 exceeded the breakeven.
We recorded charges related to long-lived assets of $101 million, $34 million and $60 million, in fiscal 2023, 2022 and 2021, respectively.
We recorded charges related to long-lived assets of $131 million, $101 million and $34 million, in fiscal 2024, 2023 and 2022, respectively.
After analyzing residual credit risks and general market conditions, we have recorded an $8 million allowance for these programs' estimated credit losses at September 30, 2023. 37 OTHER KEY FINANCIAL MEASURES The following are other key financial measures used by the Company for the purposes of assessing performance and highlighting operational trends as well as our ability to generate earnings sufficient to service our debt: in millions, except ratio data 2023 2022 2021 Net income (loss) $ (649) $ 3,249 $ 3,060 Less: Interest income (30) (17) (8) Add: Interest expense 355 365 428 Add/(Less): Income tax expense (benefit) (29) 900 981 Add: Depreciation 1,100 945 934 Add: Amortization (a) 229 246 261 EBITDA $ 976 $ 5,688 $ 5,656 Total gross debt $ 9,506 $ 8,321 $ 9,348 Less: Cash and cash equivalents (573) (1,031) (2,507) Less: Short-term investments (15) (1) — Total net debt $ 8,918 $ 7,289 $ 6,841 Ratio Calculations: Gross debt/EBITDA 9.7x 1.5x 1.7x Net debt/EBITDA 9.1x 1.3x 1.2x Return on invested capital (b) (1.4 %) 13.4 % 13.3 % Total debt to capitalization (c) 34.2 % 29.6 % 34.4 % Book value per share (d) $ 51.37 $ 55.04 $ 48.95 (a) Excludes the amortization of debt issuance and debt discount expense of $10 million, $11 million, $19 million for fiscal 2023, 2022 and 2021, respectively, as it is included in Interest expense.
After analyzing residual credit risks and general market conditions, we have recorded a $14 million allowance for these programs' estimated credit losses at September 28, 2024. 35 OTHER KEY FINANCIAL MEASURES The following are other key financial measures used by the Company for the purposes of assessing performance and highlighting operational trends as well as our ability to generate earnings sufficient to service our debt: in millions, except ratio data 2024 2023 2022 Net income (loss) $ 822 $ (649) $ 3,249 Less: Interest income (89) (30) (17) Add: Interest expense 481 355 365 Add/(Less): Income tax expense (benefit) 270 (29) 900 Add: Depreciation 1,159 1,100 945 Add: Amortization (a) 229 229 246 EBITDA $ 2,872 $ 976 $ 5,688 Total gross debt 9,787 9,506 8,321 Less: Cash and cash equivalents (1,717) (573) (1,031) Less: Short-term investments (10) (15) (1) Total net debt $ 8,060 $ 8,918 $ 7,289 Ratio Calculations: Gross debt/EBITDA 3.4x 9.7x 1.5x Net debt/EBITDA 2.8x 9.1x 1.3x Return on invested capital (b) 3.9% (1.4%) 13.4% Total debt to capitalization (c) 34.6% 34.2% 29.6% Book value per share (d) $ 52.03 $ 51.37 $ 55.04 (a) Excludes the amortization of debt issuance and debt discount expense of $12 million, $10 million, $11 million for fiscal 2024, 2023 and 2022, respectively, as it is included in Interest expense.
The decrease in fiscal 2023 was primarily due to decreased cash and cash equivalents and increased current debt. 34 • At September 30, 2023, $539 million of our cash was held in the international 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.
The increase in fiscal 2024 was primarily due to increased cash and cash equivalents and decreased current debt. • At September 28, 2024, $708 million of our cash was held in the international 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.
The funded status of the plans is an underfunded position of $149 million at the end of fiscal 2023 as compared to an underfunded position of $159 million at the end of fiscal 2022. We contributed $13 million in fiscal 2023 and expect to contribute approximately $15 million of cash to our pension plans in fiscal 2024.
The funded status of the plans is an underfunded position of $158 million at the end of fiscal 2024 as compared to an underfunded position of $149 million at the end of fiscal 2023. We contributed $14 million in fiscal 2024 and expect to contribute approximately $14 million of cash to our pension plans in fiscal 2025.
Consequently, their estimated fair values remain highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins. Discount rates increased by approximately 50 basis points from the date of our annual impairment assessment to September 30, 2023.
Consequently, their estimated fair values, especially our Beef reporting unit, remain highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins. Discount rates decreased by approximately 50 basis points from the date of our annual impairment assessment to September 28, 2024.
We were in compliance with all debt covenants at September 30, 2023 and expect that we will maintain compliance.
We were in compliance with all debt covenants at September 28, 2024 and expect that we will maintain compliance.
For the brand with a carrying value $0.5 billion, a hypothetical increase in the discount rate of approximately 50 basis points as of the date of the most recent estimated fair value, with all other assumptions unchanged, would have caused the carrying value to approximate its fair value.
A hypothetical increase in the discount rate of approximately 75-125 basis points as of the date of the most recent estimated fair value, with all other assumptions unchanged, would have caused the carrying value to approximate its fair value.
Our Pork segment reporting unit had goodwill at September 30, 2023 of $0.4 billion. We generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.
Our Chicken segment reporting units had goodwill of $3.0 billion at September 28, 2024. We generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.
In addition to the amounts shown above in the table, we have unrecognized tax benefits of $117 million and related interest and penalties of $50 million at September 30, 2023, recorded in Other long-term liabilities.
In addition to the amounts shown above in the table, we have unrecognized tax benefits of $137 million and related interest and penalties of $59 million at September 28, 2024, recorded in Other long-term liabilities.
To pass the impairment quantitative tests, projected long-term operating margins, utilizing the discounted cash flow method, had to average approximately 4.0%-5.0% (breakeven).
To pass the impairment quantitative test, projected long-term operating margins, utilizing the discounted cash flow method, had to average approximately 4.0%-5.0% (breakeven). Operating margins for fiscal 2024 exceeded the breakeven amounts.
Our reporting units with heightened risk of future impairments with $3.8 billion carrying value at September 30, 2023, as well as the brand with $0.5 billion carrying value, as described above, all have less than 10% of excess fair value above carrying value as of the date of the most recent estimated fair value determination.
Our reporting units with heightened risk of future impairments with $3.3 billion carrying value at September 28, 2024, as well as the brand with $0.5 billion carrying value, as described above, all had less than 20% of excess fair value above carrying value as of the date of the most recent estimated fair value determination with our Beef reporting unit having less than 10% excess fair value above carrying value.
Effective Tax Rate 2023 2022 4.3 % 21.7 % The percentage impacts on the effective tax rate were greater in fiscal 2023 due to the level of pretax income (loss) in fiscal 2023 compared to fiscal 2022.
Effective Tax Rate 2024 2023 24.8 % 4.3 % The percentage impacts on the effective tax rate were greater in fiscal 2023 due to the level of pretax (loss) in fiscal 2023 compared to fiscal 2024.
All of our indefinite life intangible assets estimated fair values exceeded their carrying values by more than 20% at the date of the most recent estimated fair value determination, which was in the annual assessment as of the beginning of the fourth quarter of fiscal 2023, other than two of our Prepared Foods brands with carrying values of $0.5 billion and $0.3 billion at September 30, 2023.
Our fiscal 2024, 2023 and 2022 indefinite life intangible assets impairment analyses did not result in an impairment charge. 40 All of our indefinite life intangible assets' estimated fair values exceeded their carrying values by more than 20% at the date of the most recent estimated fair value determination, which was in the annual assessment as of the beginning of the fourth quarter of fiscal 2024, other than one of our Prepared Foods brands with a carrying value of $0.5 billion at September 28, 2024.
Ratings Level (Moody’s/S&P) Borrowing Spread A2/A or above 0.875 % A3/A- 1.000 % Baal/BBB+ (current level) 1.125 % Baa2/BBB 1.250 % Baa3/BBB- or lower 1.375 % 35 Revolving Credit Facility S&P's applicable rating is “BBB+.” Moody's applicable rating is “Baa2.” The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate”) and letter of credit fees and borrowings (“All-in Borrowing Spread”) that corresponds to the applicable ratings levels from S&P and Moody's.
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. 33 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's applicable rating is “BBB.” Moody's applicable rating is “Baa2.” The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate”) and letter of credit fees and borrowings (“All-in Borrowing Spread”) that corresponds to the applicable ratings levels from S&P and Moody's.
Prepared Foods Segment Results in millions 2023 2022 Change 2023 vs. 2022 2021 Change 2021 vs. 2020 Sales $ 9,845 $ 9,689 $ 156 $ 8,853 $ 836 Sales Volume Change 0.3 % (4.1) % Average Sales Price Change 1.3 % 13.5 % Operating Income $ 823 $ 746 $ 77 $ 1,456 $ (710) Operating Margin 8.4 % 7.7 % 16.4 % 2023 vs. 2022 – • Sales Volume – Sales volume increased slightly for fiscal 2023 as increased retail volumes were partially offset by a reduction in foodservice volumes. • Average Sales Price – Average sales price increased due to the effects of revenue management in an inflationary cost environment and favorable product mix. • Operating Income – Operating income increased in fiscal 2023 driven by higher average sales prices and a $45 million reduction in raw material costs, partially offset by increased marketing, advertising and promotion spend.
Prepared Foods Segment Results in millions 2024 2023 Change 2024 vs. 2023 2022 Change 2023 vs. 2022 Sales $ 9,851 $ 9,845 $ 6 $ 9,689 $ 156 Sales Volume Change 0.9 % 0.3 % Average Sales Price Change (0.8) % 1.3 % Operating Income $ 879 $ 823 $ 56 $ 746 $ 77 Operating Margin 8.9 % 8.4 % 7.7 % 2024 vs. 2023 – • Sales Volume – Sales volume increased primarily due to the acquisition of Williams Sausage Company in the third quarter of 2023. • Average Sales Price – Average sales price decreased primarily due to sales mix. • Operating Income – Operating income increased primarily due to lower raw materials costs, freight costs, marketing, advertising and promotion expenses and restructuring and related charges. 2023 vs. 2022 – • Sales Volume – Sales volume increased slightly as increased retail volumes were partially offset by a reduction in foodservice volumes. • Average Sales Price – Average sales price increased due to the effects of revenue management in an inflationary cost environment and favorable product mix. 30 • Operating Income – Operating income increased in fiscal 2023 primarily due to higher average sales prices and a $45 million reduction in raw material costs, partially offset by increased marketing, advertising and promotion spend.
This includes completion of capacity expansion projects as well as new equipment, automation technology and processes for product innovation. • Acquisitions, net of cash for fiscal 2023 included $223 million, net of cash acquired, for our acquisition of Williams Sausage Company and $39 million for the 60% equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products. • Acquisition of equity investments for fiscal 2023 primarily included: the purchase of minority interest in a global insect-based ingredients company; the purchase of a minority interest in a fully integrated poultry company in the Middle East that produces broiler chickens and operates hatcheries and feed mills; and deferred payments related to prior year equity method investment. • Acquisition of equity investments for fiscal 2022 included the purchase of a minority interest in a South American-based fully integrated poultry company. • Other, net for fiscal 2023 primarily included insurance proceeds received related to fires at our production facilities.
Capital expenditures include investments in profit improvement projects as well as projects for maintenance and repair. • Proceeds from sale of business related to the sale of our Vienna, Georgia facility in fiscal 2024. • Acquisitions, net of cash acquired for fiscal 2023 included $223 million, net of cash acquired, for our acquisition of Williams Sausage Company and $39 million for the 60% equity stake in Supreme Foods Processing Company, a producer and distributor of value-added and cooked chicken and beef products. • Acquisition of equity investments for fiscal 2023 primarily included: the purchase of minority interest in a global insect-based ingredients company; the purchase of a minority interest in a fully integrated poultry company in the Middle East that produces broiler chickens and operates hatcheries and feed mills; and deferred payments related to prior year equity method investment. • Other, net for fiscal 2024 primarily included proceeds from disposition of corporate assets, proceeds on the sale of an equity method investment and insurance proceeds related to fires at our production facilities.
For these reporting units, we recognized a $448 million goodwill impairment charge including $210 million to partially impair the goodwill of a Chicken segment reporting unit and $238 million to fully impair the goodwill of two of our International/Other reporting units.
Based on quantitative assessments, we recognized $781 million of goodwill impairment charges including $333 million to partially impair the goodwill of the Beef reporting unit, $238 million to fully impair the goodwill of two of our International/Other reporting units and $210 million to partially impair the goodwill of a Chicken segment reporting unit.
Net periodic benefit cost for the defined benefit pension plans was $6 million in fiscal 2023. The projected benefit obligation was $176 million at the end of fiscal 2023. Unrecognized actuarial gain was $13 million at the end of fiscal 2023.
Net periodic benefit cost for the defined benefit pension plans was $8 million in fiscal 2024. The projected benefit obligation was $188 million at the end of fiscal 2024. Unrecognized actuarial loss was $3 million at the end of fiscal 2024.
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 approximately $81 million in our Chicken segment related to the recognition of legal contingency accruals in fiscal 2021. • Decrease of approximately $58 million in our Chicken segment related to insurance proceeds, net of costs incurred, related to the fire at our production facility in the fourth quarter of fiscal 2021. • Decrease of approximately $27 million in our Beef segment related to insurance proceeds related to the fire at our production facility in the fourth quarter of fiscal 2019. • Remaining increase in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes, the impact of the inflationary environment on our labor and other input costs and restructuring and related charges, partially offset by savings from our productivity program. • The $104 million impact of lower sales volume was primarily driven by decreased volumes in our Pork and Prepared Foods segments.
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 $59 million in our Chicken segment from insurance proceeds, net of costs, related to a production facility fire in the fourth quarter of fiscal 2021. • Decrease of $29 million in restructuring and related costs. • Increase in cattle costs of approximately $1,315 million in our Beef segment. • Increase in performance-based compensation costs of $173 million. • Increase of $129 million related to the recognition of legal contingency accruals in our Beef, Pork and Chicken segments. • Increase of $86 million in International/Other from costs related to a production facility fire in the Netherlands and subsequent decision to sell the facility. • 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. • The $18 million impact of increased sales volume was primarily driven by increased volumes in our Beef, Pork and Prepared Foods segments. 2023 vs. 2022 – • Cost of sales increased $3,636 million.
In estimating its fair value, we generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.
Our Beef segment reporting unit had goodwill of $0.3 billion at September 28, 2024. In estimating its fair value, we generally assumed operating margins in future years would normalize over time as we believe this is consistent with market participant views in an exit transaction.
Refer to the Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2021 for additional information related to fiscal 2021. 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.
Refer to the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2022 for additional information related to fiscal 2022. 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.
Judgments and Uncertainties Our impairment analysis contains uncertainties due to judgment in assumptions, including useful lives and intended use of assets, observable market valuations, forecasted sales growth, operating margins, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data that reflects the risk inherent in future cash flows to determine fair value.
Judgments and Uncertainties Our impairment analysis contains uncertainties due to judgment in assumptions, including useful lives and intended use of assets, observable market valuations, forecasted sales growth, operating margins, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data that reflects the risk inherent in future cash flows to determine fair value. 41 Effect if Actual Results Differ From Assumptions We have not made any material changes in the accounting methodology used to evaluate the impairment of long-lived assets or definite life intangibles during the last three fiscal years.
Cash Flows from Investing Activities in millions 2023 2022 Additions to property, plant and equipment $ (1,939) $ (1,887) (Purchases of)/Proceeds from marketable securities, net (2) (1) Acquisitions, net of cash acquired (262) — Acquisition of equity investments (115) (177) Other, net 19 130 Net cash used for investing activities $ (2,299) $ (1,935) • 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. • Approximately $1.3 billion will be necessary to complete buildings and equipment under construction at September 30, 2023. • We expect capital expenditures between $1 billion and $1.5 billion for fiscal 2024.
The reduced decline in accounts receivable was primarily due to the decreased level of sales in the last few weeks of each year end partially offset by a net decrease in days sales outstanding. 31 Cash Flows from Investing Activities in millions 2024 2023 Additions to property, plant and equipment $ (1,132) $ (1,939) (Purchases of)/Proceeds from marketable securities, net (3) (2) Proceeds from sale of business 174 — Acquisitions, net of cash acquired — (262) Acquisition of equity investments (29) (115) Other, net 102 19 Net cash used for investing activities $ (888) $ (2,299) • 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. • Approximately $625 million will be necessary to complete buildings and equipment under construction at September 28, 2024. • We expect capital expenditures between $1.0 billion and $1.2 billion for fiscal 2025.
OVERVIEW Fiscal year We utilize a 52- or 53-week accounting period ending on the Saturday closest to September 30. The Company’s accounting cycle resulted in a 52-week year for fiscal 2023, 2022 and 2021.
OVERVIEW Fiscal year We utilize a 52- or 53-week accounting period ending on the Saturday closest to September 30. The Company’s accounting cycle resulted in a 52-week year for fiscal 2024, 2023 and 2022. General Sales increased $0.4 billion to $53.3 billion in fiscal 2024, largely due to higher average sales prices in our Beef segment.
Cost of Sales in millions 2023 2022 2021 Cost of sales $ 50,250 $ 46,614 $ 40,523 Gross profit 2,631 6,668 Cost of sales as a percentage of sales 95.0 % 87.5 % 2023 vs. 2022 – • Cost of sales increased $3,636 million.
Cost of Sales in millions 2024 2023 2022 Cost of sales $ 49,682 $ 50,250 $ 46,614 Gross profit 3,627 2,631 Cost of sales as a percentage of sales 93.2 % 95.0 % 2024 vs. 2023 – • Cost of sales decreased $568 million.
Selling, General and Administrative in millions 2023 2022 2021 Selling, general and administrative $ 2,245 $ 2,258 $ 2,130 As a percentage of sales 4.2 % 4.2 % 2023 vs. 2022 – • Decrease of $13 million in selling, general and administrative was primarily driven by: • Decrease of $171 million in employee costs primarily from incentive-based compensation. • Decrease of $26 million in professional fees. • Increase of $71 million from a gain recognized in the fiscal year ended October 1, 2022 from recoveries related to a cattle suppliers misappropriation of Company funds. • Increase of $57 million in marketing, advertising and promotion expenses. • Increase of $47 million in restructuring and related costs. 2022 vs. 2021 – • Increase of $128 million in selling, general and administrative was primarily driven by: • Increase of $48 million in restructuring and related costs. • Increase of $47 million in marketing, advertising and promotion expenses. • Increase of $38 million in technology related costs. • Increase of $34 million in employee costs. • Increase of $24 million in donations. 28 • Increase of $15 million in travel and entertainment costs. • Decrease of $33 million in commission and brokerage fees. • Decrease of $27 million in depreciation and amortization. • Decrease of $16 million from the change in the impact of a cattle supplier’s misappropriation of Company funds, resulting from a $71 million gain related to the recovery of cattle inventory in the fiscal year ended October 1, 2022 as compared to a $55 million gain recognized in the fiscal year ended October 2, 2021.
Selling, General and Administrative in millions 2024 2023 2022 Selling, general and administrative $ 2,218 $ 2,245 $ 2,258 As a percentage of sales 4.2 % 4.2 % 2024 vs. 2023 – • Decrease of $27 million in selling, general and administrative was primarily driven by: • Decrease of $71 million in marketing, advertising and promotion expenses. • Decrease of $64 million in restructuring and related costs. • Decrease of $28 million in corporate facilities and assets costs. 26 • Decrease of $18 million in donations. • Increase of $155 million in team member costs including $205 million in performance-based compensation partially offset by a decrease of $50 million in all other team member costs. • Increase of $8 million in brand discontinuation costs. 2023 vs. 2022 – • Decrease of $13 million in selling, general and administrative was primarily driven by: • Decrease of $171 million in employee costs primarily from incentive-based compensation. • Decrease of $26 million in professional fees. • Increase of $71 million from a gain recognized in the fiscal year ended October 1, 2022 from recoveries related to a cattle suppliers misappropriation of Company funds. • Increase of $57 million in marketing, advertising and promotion expenses. • Increase of $47 million in restructuring and related costs.
However, during the fourth quarter of fiscal 2023, we experienced an increase in long-term treasury rates which caused a net 50 basis point increase in the discount rates used in estimating the fair value of the reporting units.
During fiscal 2023, we experienced lower than previously anticipated operating results and changing market fundamentals, as well as a drop in our market capitalization to below book value and an increase in long-term treasury rates which caused a net 50 basis point increase in the discount rates used in estimating the fair value of the reporting units.
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.
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. Additionally, we have $1.75 billion in committed term loan facilities of which $1.0 billion was drawn upon as of September 30, 2023.
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 September 28, 2024, amounts available for borrowing under our revolving credit facility totaled $2.25 billion.
A reduction in the estimated fair value of the reporting units and indefinite life intangible assets could trigger an impairment in the future.
A reduction in the estimated fair value of the reporting units and indefinite life intangible assets could trigger an impairment in the future. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of our goodwill and indefinite life intangible assets.
Chicken Segment Results in millions 2023 2022 Change 2023 vs. 2022 2021 Change 2022 vs. 2021 Sales $ 17,060 $ 16,961 $ 99 $ 13,733 $ 3,228 Sales Volume Change 3.4 % 0.7 % Average Sales Price Change (1.9) % 18.1 % Operating Income (Loss) $ (770) $ 955 $ (1,725) $ (625) $ 1,580 Operating Margin (4.5) % 5.6 % (4.6) % 2023 vs. 2022 – • Sales Volume – Sales volume increased primarily due to improved domestic production and the sell-through of inventory, partially offset by strategic initiative mix impacts. • Average Sales Price – Average sales price decreased due to the challenging market conditions.
Chicken Segment Results in millions 2024 2023 Change 2024 vs. 2023 2022 Change 2023 vs. 2022 Sales $ 16,425 $ 17,060 $ (635) $ 16,961 $ 99 Sales Volume Change (2.2) % 3.4 % Average Sales Price Change (2.4) % (1.9) % Operating Income (Loss) $ 988 $ (770) $ 1,758 $ 955 $ (1,725) Operating Margin 6.0 % (4.5) % 5.6 % 2024 vs. 2023 – • Sales Volume – Sales volume decreased primarily due to reduced domestic production. • Average Sales Price – Average sales price decreased due to the impact of lower input costs.
For further description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 7: Restructuring and Related Charges (in millions). 2023 2022 Cost of Sales $ 29 $ 18 Selling, General and Administrative 95 48 Total Restructuring and related charges, pretax $ 124 $ 66 2022 charges 2023 charges Estimated future charges Total estimated 2022 Program charges Beef $ 16 $ 33 $ 3 $ 52 Pork 5 11 1 17 Chicken 6 16 2 24 Prepared Foods 36 49 24 109 International/Other 3 15 4 22 Total Restructuring and related charges, pretax $ 66 $ 124 $ 34 $ 224 26 SUMMARY OF RESULTS Sales in millions 2023 2022 2021 Sales $ 52,881 $ 53,282 $ 47,049 Change in sales volume 1.0 % (0.3) % Change in average sales price (1.5) % 12.3 % Sales growth (0.8) % 13.2 % 2023 vs. 2022 – • Sales Volume – Sales were positively impacted by a increase in sales volume, which accounted for an increase of $507 million, driven by increased volumes in our Chicken segment partially offset by decreased volumes in our Beef segment due to the reduced domestic availability of live cattle and our Pork segment as a result of balancing our supply with customer demand. • Average Sales Price – Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $752 million, driven by reduced pricing in our Pork and Chicken segments, partially offset by higher average sales prices in our Beef and Prepared Foods segments. • The above change in average sales price for fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals. 2022 vs. 2021 – • Sales Volume – Sales were negatively impacted by a decrease in sales volume, which accounted for a decrease of $121 million, driven by decreased volumes in our Pork and Prepared Foods segments and impacts associated with the challenging labor environment and continued supply chain constraints, partially offset by an increase in sales volume in our Chicken segment. • Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $5,809 million.
SUMMARY OF RESULTS Sales in millions 2024 2023 2022 Sales $ 53,309 $ 52,881 $ 53,282 Change in sales volume — % 1.0 % Change in average sales price 0.6 % (1.5) % Sales growth 0.8 % (0.8) % 2024 vs. 2023 – • Sales Volume – Volumes were essentially flat and resulted in an increase of $19 million as increased sales volume in our Beef, Pork and Prepared Foods segments were mostly offset by decreased sales volume in our Chicken segment. • Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $298 million, driven by increased pricing in our Beef segment. ◦ The above changes in average sales price exclude the impacts of $45 million and $156 million reductions of Sales from the recognition of legal contingency accruals in fiscal 2024 and 2023, respectively. 2023 vs. 2022 – • Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $507 million, driven by increased volumes in our Chicken segment, partially offset by decreased volumes in our Beef segment due to the reduced domestic availability of live cattle and our Pork segment as a result of balancing our supply with customer demand. • Average Sales Price – Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $752 million, driven by reduced pricing in our Pork and Chicken segments, partially offset by higher average sales prices in our Beef and Prepared Foods segments. ◦ The above change in average sales price for fiscal 2023 excludes the impact of a $156 million reduction of Sales from the recognition of legal contingency accruals.
Other (Income) Expense, net in millions 2023 2022 $ (42) $ (87) 2023 – Included $22 million of production facilities fire insurance proceeds, $17 million of foreign exchange gains and $12 million of joint venture earnings. 2022 – Included $58 million of foreign exchange losses, $52 million of production facilities fires insurance proceeds, $45 million of joint venture earnings and $37 million of gains on equity investments due to observable price changes in fiscal 2022.
Other (Income) Expense, net in millions 2024 2023 $ (75) $ (42) 2024 – Included $34 million of production facilities fire insurance proceeds, $15 million gain on sale of an equity method investment, $15 million of joint venture earnings and $11 million of foreign exchange gains. 2023 – Included $22 million of production facilities fire insurance proceeds, $17 million of foreign exchange gains and $12 million of joint venture earnings.
Based on this assessment, we determined that our Beef, Pork and two Chicken reporting units’ estimated fair values exceeded their carrying value, and thus, it did not result in any additional goodwill impairments.
Based on our assessments, we determined that all of these reporting units’ estimated fair values exceeded their carrying values, and thus, did not result in any additional goodwill impairments. Following the annual fiscal 2024 assessment, our Beef and two Chicken segment reporting units, with total goodwill of approximately $3.3 billion, were at heightened risk of impairment.
Accordingly, we recognized a $333 million goodwill impairment charge to partially impair its goodwill. Following the September 30, 2023 assessment, our Beef, Pork and two Chicken segment reporting units, with total goodwill of approximately $3.8 billion, are at heightened risk of impairment. Our Beef segment reporting unit had goodwill of $0.3 billion at September 30, 2023, after the impairment.
Following the fiscal 2023 assessments, our Beef, Pork and two Chicken segment reporting units, with total goodwill of approximately $3.8 billion, were at heightened risk of impairment.
See Part II, Item 8, Notes to Consolidated Financial Statements, Note 20: Commitments and Contingencies for further discussion. 36 CONTRACTUAL OBLIGATIONS The following table summarizes our contractual obligations as of September 30, 2023 (in millions): Payments Due by Period 2024 2025-2026 2027-2028 2029 and thereafter Total Debt principal payments (1) $ 1,899 $ 1,844 $ 1,387 $ 4,452 $ 9,582 Interest payments (2) 416 696 481 2,800 4,393 Guarantees (3) 12 34 15 24 85 Operating lease obligations (4) 171 221 100 99 591 Purchase obligations (5) 424 444 129 149 1,146 Capital expenditures (6) 1,067 248 — — 1,315 Other long-term liabilities (7) — — — — 842 Total contractual commitments $ 3,989 $ 3,487 $ 2,112 $ 7,524 $ 17,954 (1) In the event of a default on payment, acceleration of the principal payments could occur.
See Part II, Item 8, Notes to Consolidated Financial Statements, Note 20: Commitments and Contingencies for further discussion. 34 CONTRACTUAL OBLIGATIONS The following table summarizes our contractual obligations as of September 28, 2024 (in millions): Payments Due by Period 2025 2026-2027 2028-2029 2030 and thereafter Total Debt principal payments (1) $ 75 $ 2,975 $ 2,404 $ 4,415 $ 9,869 Interest payments (2) 489 854 608 2,847 4,798 Guarantees (3) 24 16 26 17 83 Operating lease obligations (4) 197 266 157 187 807 Purchase obligations (5) 368 401 179 247 1,195 Capital expenditures (6) 625 — — — 625 Other long-term liabilities (7) — — — — 904 Total contractual commitments $ 1,778 $ 4,512 $ 3,374 $ 7,713 $ 18,281 (1) In the event of a default on payment, acceleration of the principal payments could occur.
Furthermore, the conflict in the Middle East escalated in October 2023 creating economic and political uncertainty within the region. If these conflicts escalate further, impact additional regions or countries, or additional economic sanctions are imposed, it could have a material impact on our business operations and 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. 24 Margins Our total operating margin was 2.6% in fiscal 2024.
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.
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.
We incurred an operating loss of $395 million in fiscal 2023 as compared to operating income of $4,410 million fiscal 2022, as we experienced lower operating income in all our segments other than the Prepared Foods segment.
We reported operating income of $1,409 million in fiscal 2024 as compared to an operating loss of $395 million in fiscal 2023, as we experienced higher operating income in all our segments other than the Beef segment. During fiscal 2024, we incurred higher performance-based compensation costs of $378 million driven by improved consolidated results.
Pork Segment Results in millions 2023 2022 Change 2023 vs. 2022 2021 Change 2022 vs. 2021 Sales $ 5,768 $ 6,414 $ (646) $ 6,277 $ 137 Sales Volume Change (2.2) % (1.9) % Average Sales Price Change (7.9) % 4.1 % Operating Income (Loss) $ (139) $ 193 $ (332) $ 328 $ (135) Operating Margin (2.4) % 3.0 % 5.2 % 2023 vs. 2022 – • Sales Volume – Sales volume decreased as a result of balancing our supply with customer demand. • Average Sales Price – Average sales price decreased due to reduced global demand. • Operating Income (Loss) – Operating income decreased due to compressed pork margins, increased operating costs as a result of the inflationary market environment, losses incurred in our live hog operations and impacts from a production facility fire in the third quarter of fiscal 2023. 2022 vs. 2021 – • Sales Volume – Sales volume decreased due to reduced domestic availability of live hogs. • Average Sales Price – Average sales price increased as input costs such as live hogs, labor, freight and transportation costs increased, partially offset by unfavorable mix associated with labor shortages. • Operating Income – Operating income decreased due to periods of compressed pork margins and increased operating costs as a result of the inflationary market environment.
The change in average sales price excludes the impact of a $45 million reduction of Sales from the recognition of a legal contingency accrual in fiscal 2024. • Operating Income (Loss) – Operating income increased primarily due to higher pork margins, improved results in our live hog operations and lapping the impacts of a production facility fire in the third quarter of fiscal 2023, partially offset by the recognition of legal contingency accruals and plant closures and disposal costs in fiscal 2024. 2023 vs. 2022 – • Sales Volume – Sales volume decreased as a result of balancing our supply with customer demand. • Average Sales Price – Average sales price decreased due to reduced global demand. 29 • Operating Income (Loss) – Operating income decreased due to compressed pork margins, increased operating costs as a result of the inflationary market environment, losses incurred in our live hog operations and impacts from a production facility fire in the third quarter of fiscal 2023.
Our fiscal 2023, 2022, and 2021 indefinite life intangible assets impairment analyses did not result in an impairment charge.
Our fiscal 2024 and fiscal 2022 goodwill impairment analyses did not result in impairment charges.
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®. We operate in four reportable segments: Beef, Pork, Chicken and Prepared Foods. We measure segment profit as operating income (loss).
The Company is unified by this purpose: Tyson Foods. We Feed the World Like Family™ and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 10% increase in interest rates effective at September 30, 2023, and October 1, 2022, would not have a significant effect on variable interest expense. Additionally, changes in interest rates impact the fair value of our fixed-rate debt. At September 30, 2023, we had fixed-rate debt of $7,898 million with a weighted average interest rate of 4.5%.
Biggest changeA hypothetical 10% increase in interest rates effective at September 28, 2024 would increase annualized interest expense by approximately $10 million. Additionally, changes in interest rates impact the fair value of our fixed-rate debt. At September 28, 2024, we had fixed-rate debt of $8,255 million with a weighted average interest rate of 4.8%.
Actual changes in market prices may differ from hypothetical changes. COMMODITIES RISK We purchase certain commodities, such as grains and livestock, during normal operations. As part of our commodity risk management activities, we use derivative financial instruments, primarily forwards and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity.
Actual changes in market prices may differ from hypothetical changes. 42 COMMODITIES RISK We purchase certain commodities, such as grains and livestock, during normal operations. As part of our commodity risk management activities, we use derivative financial instruments, primarily forwards and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity.
The fair values of our debt were estimated based on quoted market prices and/or published interest rates. 45 We are subject to interest rate risk associated with our pension and post-retirement benefit obligations. Changes in interest rates impact the liabilities associated with these benefit plans as well as the amount of income or expense recognized for these plans.
The fair values of our debt were estimated based on quoted market prices and/or published interest rates. We are subject to interest rate risk associated with our pension and post-retirement benefit obligations. Changes in interest rates impact the liabilities associated with these benefit plans as well as the amount of income or expense recognized for these plans.
A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a $17 million and $25 million impact on pretax income at September 30, 2023 and October 1, 2022, respectively. CONCENTRATIONS OF CREDIT RISK Our financial instruments exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.
A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a $25 million and $17 million impact on pretax income at September 28, 2024 and September 30, 2023, respectively. CONCENTRATIONS OF CREDIT RISK Our financial instruments exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.
Market risk for fixed-rate debt is estimated as the potential increase in fair value, resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% change in interest rates would have changed the fair value of our fixed-rate debt by approximately $215 million at September 30, 2023 and October 1, 2022.
Market risk for fixed-rate debt is estimated as the potential increase in fair value, resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% change in interest rates would have changed the fair value of our fixed-rate debt by approximately $230 million at September 28, 2024 and $215 million at September 30, 2023.
The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of September 30, 2023 and October 1, 2022, on the fair value of open positions.
The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of September 28, 2024 and September 30, 2023, on the fair value of open positions.
At September 30, 2023 and October 1, 2022, 15.9% and 16.4%, respectively, of our net accounts receivable balance was due from Walmart Inc. No other single customer or customer group represented 10% or greater of net accounts receivable. 46
At September 28, 2024 and September 30, 2023, 15.5% and 15.9%, respectively, of our net accounts receivable balance was due from Walmart Inc. No other single customer or customer group represented 10% or greater of net accounts receivable. 43
Effect of 10% change in fair value in millions 2023 2022 Livestock: Live Cattle $ 68 $ 14 Lean Hogs 10 30 Grain: Corn 23 40 Soybean Meal 22 25 INTEREST RATE RISK At September 30, 2023, we had variable rate debt of $1,608 million with a weighted average interest rate of 6.2%.
Effect of 10% change in fair value in millions 2024 2023 Livestock: Live Cattle $ 11 $ 68 Lean Hogs 24 10 Grain: Corn 11 23 Soybean Meal 16 22 INTEREST RATE RISK At September 28, 2024, we had variable rate debt of $1,532 million with a weighted average interest rate of 6.7%.
The ineffective portion of an instrument’s change in fair value is recognized immediately. Further, we hold certain positions, primarily in grain and livestock futures that either do not meet the criteria for hedge accounting or are not designated as hedges.
Further, we hold certain positions, primarily in grain and livestock futures that either do not meet the criteria for hedge accounting or are not designated as hedges.

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