UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended April 1, 2023

or

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

For the transition period from              to            

001-14704

(Commission File Number)

______________________________________________

TYSON FOODS, INC.

(Exact name of registrant as specified in its charter)

______________________________________________

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

Not applicable

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

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

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

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of April 1, 2023.

Class	Outstanding Shares
Class A Common Stock, $0.10 Par Value (Class A stock)	285,600,336
Class B Common Stock, $0.10 Par Value (Class B stock)	70,010,355

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

TABLE OF CONTENTS

		PAGE
Item 1.	Financial Statements
	Consolidated Condensed Statements of Income for the Three and Six Months Ended April 1, 2023, and April 2, 2022	1
	Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended April 1, 2023, and April 2, 2022	2
	Consolidated Condensed Balance Sheets as of April 1, 2023, and October 1, 2022	3
	Consolidated Condensed Statements of Shareholders’ Equity for the Three and Six Months Ended April 1, 2023, and April 2, 2022	4
	Consolidated Condensed Statements of Cash Flows for the Six Months Ended April 1, 2023, and April 2, 2022	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	39

Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	43
SIGNATURES		44

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

	Three Months Ended				Six Months Ended
	April 1, 2023		April 2, 2022		April 1, 2023		April 2, 2022
Sales	$	13,133	$	13,117	$	26,393	$	26,050
Cost of Sales	12,606		11,382		24,898		22,300
Gross Profit	527		1,735		1,495		3,750
Selling, General and Administrative	576		579		1,077		1,139
Operating Income (Loss)	(49)		1,156		418		2,611
Other (Income) Expense:
Interest income	(7)		(3)		(16)		(6)
Interest expense	89		97		173		197
Other, net	(1)		(25)		(43)		(77)
Total Other (Income) Expense	81		69		114		114
Income (Loss) before Income Taxes	(130)		1,087		304		2,497
Income Tax Expense (Benefit)	(39)		254		75		538
Net Income (Loss)	(91)		833		229		1,959
Less: Net Income (Loss) Attributable to Noncontrolling Interests	6		4		10		9
Net Income (Loss) Attributable to Tyson	$	(97)	$	829	$	219	$	1,950
Weighted Average Shares Outstanding:
Class A Basic	284		291		285		291
Class B Basic	70		70		70		70
Diluted	354		364		356		364
Net Income (Loss) Per Share Attributable to Tyson:
Class A Basic	$	(0.28)	$	2.34	$	0.63	$	5.50
Class B Basic	$	(0.25)	$	2.11	$	0.56	$	4.95
Diluted	$	(0.28)	$	2.28	$	0.61	$	5.35

See accompanying Notes to Consolidated Condensed Financial Statements.

1

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended				Six Months Ended
	April 1, 2023		April 2, 2022		April 1, 2023		April 2, 2022
Net Income (Loss)	$	(91)	$	833	$	229	$	1,959
Other Comprehensive Income (Loss), Net of Taxes:
Derivatives accounted for as cash flow hedges	—		1		1		1
Investments	2		(3)		2		(4)
Currency translation	18		28		99		27
Postretirement benefits	1		2		1		4
Total Other Comprehensive Income (Loss), Net of Taxes	21		28		103		28
Comprehensive Income (Loss)	(70)		861		332		1,987
Less: Comprehensive Income Attributable to Noncontrolling Interests	6		4		10		9
Comprehensive Income (Loss) Attributable to Tyson	$	(76)	$	857	$	322	$	1,978

See accompanying Notes to Consolidated Condensed Financial Statements.

2

TYSON FOODS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions, except share and per share data)

(Unaudited)

	April 1, 2023		October 1, 2022
Assets
Current Assets:
Cash and cash equivalents	$	543	$	1,031
Accounts receivable, net	2,433		2,577
Inventories	5,504		5,514
Other current assets	412		508
Total Current Assets	8,892		9,630
Net Property, Plant and Equipment	9,351		8,685
Goodwill	10,550		10,513
Intangible Assets, net	6,157		6,252
Other Assets	1,846		1,741
Total Assets	$	36,796	$	36,821
Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt	$	1,065	$	459
Accounts payable	2,387		2,483
Other current liabilities	1,894		2,371
Total Current Liabilities	5,346		5,313
Long-Term Debt	7,865		7,862
Deferred Income Taxes	2,438		2,458
Other Liabilities	1,589		1,377
Commitments and Contingencies (Note 15)
Shareholders’ Equity:
Common stock ($0.10 par value):
Class A-authorized 900 million shares, issued 378 million shares	38		38
Convertible Class B-authorized 900 million shares, issued 70 million shares	7		7
Capital in excess of par value	4,541		4,553
Retained earnings	19,962		20,084
Accumulated other comprehensive gain (loss)	(194)		(297)
Treasury stock, at cost – 92 million shares at April 1, 2023 and 88 million shares at October 1, 2022	(4,955)		(4,683)
Total Tyson Shareholders’ Equity	19,399		19,702
Noncontrolling Interests	159		109
Total Shareholders’ Equity	19,558		19,811
Total Liabilities and Shareholders’ Equity	$	36,796	$	36,821

See accompanying Notes to Consolidated Condensed Financial Statements.

3

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions)

(Unaudited)

	Three Months Ended						Six Months Ended
	April 1, 2023			April 2, 2022			April 1, 2023			April 2, 2022
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Class A Common Stock:
Balance at beginning and end of period	378	$	38	378	$	38	378	$	38	378	$	38
Class B Common Stock:
Balance at beginning and end of period	70	7		70	7		70	7		70	7
Capital in Excess of Par Value:
Balance at beginning of period		4,524			4,471			4,553			4,486
Stock-based compensation and Other		17			39			(12)			24
Balance at end of period		4,541			4,510			4,541			4,510
Retained Earnings:
Balance at beginning of period		20,225			18,453			20,084			17,502
Net income (loss) attributable to Tyson		(97)			829			219			1,950
Dividends		(166)			(163)			(341)			(333)
Balance at end of period		19,962			19,119			19,962			19,119
Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period		(215)			(172)			(297)			(172)
Other comprehensive income		21			28			103			28
Balance at end of period		(194)			(144)			(194)			(144)
Treasury Stock:
Balance at beginning of period	92	(4,944)		85	(4,394)		88	(4,683)		83	(4,138)
Purchase of Class A common stock	—	(19)		2	(175)		5	(332)		6	(523)
Stock-based compensation	—	8		(1)	53		(1)	60		(3)	145
Balance at end of period	92	(4,955)		86	(4,516)		92	(4,955)		86	(4,516)
Total Shareholders’ Equity Attributable to Tyson		$	19,399		$	19,014		$	19,399		$	19,014
Equity Attributable to Noncontrolling Interests:
Balance at beginning of period		$	152		$	139		$	109		$	131
Net income attributable to noncontrolling interests		6			4			10			9
Business combinations		—			—			28			—
Currency translation and other		1			(1)			12			2
Total Equity Attributable to Noncontrolling Interests		$	159		$	142		$	159		$	142
Total Shareholders’ Equity		$	19,558		$	19,156		$	19,558		$	19,156

See accompanying Notes to Consolidated Condensed Financial Statements.

4

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended
	April 1, 2023		April 2, 2022
Cash Flows From Operating Activities:
Net income	$	229	$	1,959
Depreciation and amortization	620		595
Deferred income taxes	(29)		98
Other, net	191		27
Net changes in operating assets and liabilities	(242)		(1,455)
Cash Provided by Operating Activities	769		1,224
Cash Flows From Investing Activities:
Additions to property, plant and equipment	(1,097)		(847)
Purchases of marketable securities	(15)		(18)
Proceeds from sale of marketable securities	14		18
Acquisition, net of cash acquired	(39)		—
Acquisition of equity investments	(37)		(96)
Other, net	(2)		58
Cash Used for Investing Activities	(1,176)		(885)
Cash Flows From Financing Activities:
Proceeds from issuance of debt	88		47
Payments on debt	(121)		(1,088)
Proceeds from issuance of commercial paper	4,773		—
Repayments of commercial paper	(4,182)		—
Purchases of Tyson Class A common stock	(332)		(511)
Dividends	(336)		(328)
Stock options exercised	8		113
Other, net	1		—
Cash Used for Financing Activities	(101)		(1,767)
Effect of Exchange Rate Changes on Cash	20		6
Decrease in Cash and Cash Equivalents and Restricted Cash	(488)		(1,422)
Cash and Cash Equivalents and Restricted Cash at Beginning of Year	1,031		2,637
Cash and Cash Equivalents and Restricted Cash at End of Period	543		1,215
Less: Restricted Cash at End of Period	—		64
Cash and Cash Equivalents at End of Period	$	543	$	1,151

See accompanying Notes to Consolidated Condensed Financial Statements.

5

TYSON FOODS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: ACCOUNTING POLICIES

Basis of Presentation

The consolidated condensed financial statements are unaudited and have been prepared by Tyson Foods, Inc. (“Tyson,” “the Company,” “we,” “us” or “our”). Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Although we believe the disclosures contained herein are adequate to make the information presented not misleading, these consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022. Preparation of consolidated condensed financial statements requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

We believe the accompanying consolidated condensed financial statements contain all adjustments, which are of a normal recurring nature necessary to state fairly our financial position as of April 1, 2023 and the results of operations for the three and six months ended April 1, 2023 and April 2, 2022. Results of operations and cash flows for the periods presented are not necessarily indicative of results to be expected for the full year.

Consolidation

The consolidated condensed financial statements include the accounts of all wholly-owned subsidiaries, as well as majority-owned subsidiaries over which we exercise control and, when applicable, entities for which we have a controlling financial interest or variable interest entities for which we are the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Goodwill

Goodwill is initially recorded at fair value and not amortized, but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Our goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, the fair value of the reporting unit may be more likely than not less than the carrying amount, or if significant changes to macro-economic factors related to the reporting unit have occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. The quantitative test is to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of goodwill. During fiscal 2022, we determined that all of our material reporting units’ estimated fair value exceeded their carrying value by more than 20%, other than one of our Chicken segment reporting units and two of our International reporting units with goodwill totaling $0.6 billion and $0.2 billion, respectively, at October 1, 2022. Conditions existed as of the end our first quarter that required an interim assessment of goodwill for two of our International reporting units which had goodwill totaling $0.2 billion at December 31, 2022; we determined no impairment was necessary as the fair value of the reporting units exceeded their carrying value. Our qualitative assessment for the second quarter did not indicate that it was more likely than not the fair value of any of our reporting units may be impaired, and as such, no quantitative goodwill test was deemed necessary.

Some of the inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates, market EBITDA comparables and credit ratings. While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, it could result in additional material impairments of our goodwill.

Use of Estimates

The consolidated condensed financial statements are prepared in conformity with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the amounts reported in the consolidated condensed financial statements and accompanying notes. Actual results could differ from those estimates. During the first quarter of fiscal 2023, we revised estimates and recorded adjustments of approximately $30 million primarily to reduce certain employee compensation accruals recorded as of October 1, 2022.

6

Recently Issued Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (the "FASB") issued guidance that requires additional disclosures for supplier finance programs to allow users to better understand the nature, activity and potential magnitude of the programs. The guidance, except for a requirement for rollforward information, is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2022, our fiscal 2024. Disclosure of rollforward information is effective for fiscal years beginning after December 15, 2023, our fiscal 2025. Early adoption is permitted and the retrospective transition method should be applied for all amendments except rollforward information, which should be applied prospectively. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

In March 2020, the FASB issued guidance providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The optional guidance, which became effective on March 12, 2020 and was set to end on December 31, 2022, was extended by new guidance issued by the FASB on December 21, 2022 to apply through December 31, 2024. The temporary accounting relief provided in the optional guidance has not impacted our consolidated financial statements. The Company has various contracts that reference LIBOR and is assessing how this standard may be applied to specific contract modifications through December 31, 2024.

NOTE 2: ACQUISITIONS AND DISPOSITIONS

In the second quarter of fiscal 2023, the Company announced it had reached a definitive agreement to acquire Williams Sausage Company, which we anticipate upon closing will be included in the Prepared Foods segment. The transaction, which is expected to close in the back half of fiscal 2023, is subject to certain customary closing conditions. There can be no assurance that the acquisition will close at such time.

In the first quarter of fiscal 2023, we completed the acquisition of a 60% equity stake in Supreme Foods Processing Company ("SFPC"), a producer and distributor of value-added and cooked chicken and beef products, and a 15% equity stake in Agricultural Development Company ("ADC"), a fully integrated poultry company, for a total purchase price of approximately $75 million, net of cash acquired. Both SFPC and ADC were subsidiaries of Tanmiah Food Company. The results of SFPC, subsequent to the acquisition closing, are included in International/Other for segment presentation. SFPC's results from the date of acquisition through April 1, 2023 were insignificant to our Consolidated Condensed Statements of Income. We are accounting for the investment in ADC under the equity method.

NOTE 3: INVENTORIES

Processed products, livestock and supplies and other are valued at the lower of cost or net realizable value. Cost includes purchased raw materials, live purchase costs, growout costs (primarily feed, livestock grower pay and catch and haul costs), labor and manufacturing and production overhead, which are related to the purchase and production of inventories. At April 1, 2023, the cost of inventories was determined by either the first-in, first-out method or the weighted-average method, which is consistent with the methods used at October 1, 2022. Inventories are presented net of lower of cost or net realizable value adjustments of $145 million and $60 million at April 1, 2023 and October 1, 2022, respectively.

The following table reflects the major components of inventory (in millions):

	April 1, 2023		October 1, 2022
Processed products	$	3,024	$	3,188
Livestock	1,546		1,454
Supplies and other	934		872
Total inventory	$	5,504	$	5,514

7

NOTE 4: PROPERTY, PLANT AND EQUIPMENT

The major categories of property, plant and equipment and accumulated depreciation are as follows (in millions): 

	April 1, 2023		October 1, 2022
Land	$	218	$	214
Buildings and leasehold improvements	5,961		5,742
Machinery and equipment	10,186		9,960
Land improvements and other	529		516
Buildings and equipment under construction	2,069		1,461
	18,963		17,893
Less accumulated depreciation	9,612		9,208
Net Property, Plant and Equipment	$	9,351	$	8,685

NOTE 5: OTHER CURRENT LIABILITIES

Other current liabilities are as follows (in millions):

	April 1, 2023		October 1, 2022
Accrued salaries, wages and benefits	$	680	$	995
Taxes payable	146		277
Accrued current legal contingencies	194		215
Other	874		884
Total other current liabilities	$	1,894	$	2,371

NOTE 6: RESTRUCTURING AND RELATED CHARGES

2022 Program

In the fourth quarter of fiscal 2022, the Company approved a restructuring program (the “2022 Program”), which is expected to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies. In conjunction with the 2022 Program, the Company is bringing together all its corporate team members from the Chicago, Downers Grove and Dakota Dunes area corporate locations to its world headquarters in Springdale, Arkansas, through a phased relocation which commenced in early calendar year 2023. We anticipate the 2022 Program and associated expenses will be substantially complete in our fiscal 2025. The following table reflects the total pretax anticipated expenses associated with the 2022 Program (in millions):

	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	20	$	7	$	5	$	48	$	10	$	90
Relocation and related costs	38		15		2		61		1		117
Accelerated depreciation	6		2		—		12		—		20
Contract and lease terminations	—		—		—		31		—		31
Professional and other fees	3		—		1		7		2		13
Total 2022 Program	$	67	$	24	$	8	$	159	$	13	$	271

Restructuring costs include severance expenses, and related charges include costs directly associated with the 2022 Program such as relocation, contract and lease terminations, professional fees and accelerated depreciation resulting from the closure of facilities. We anticipate that $48 million and $223 million of the total pretax anticipated expense will be recorded in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the table above are $241 million of charges that have resulted or will result in cash outflows and $30 million in non-cash charges.

8

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the second quarter of fiscal 2023 by reportable segment (in millions):

	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	—	$	—	$	(1)	$	2	$	1	$	2
Relocation and related costs	6		1		1		5		—		13
Accelerated depreciation	1		1		—		2		—		4
Contract and lease terminations	—		—		—		—		—		—
Professional and other fees	1		—		—		2		—		3
Total	$	8	$	2	$	—	$	11	$	1	$	22

For the second quarter of fiscal 2023, we recorded restructuring and related charges of $26 million in Selling, General and Administrative and a reduction of $4 million in Cost of Sales in our Consolidated Condensed Statements of Income. Included in the above results are $18 million of charges that have resulted or will result in cash outflows and $4 million in non-cash charges.

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first six months of fiscal 2023 by reportable segment (in millions):

	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	2	$	1	$	(1)	$	6	$	6	$	14
Relocation and related costs	7		2		2		6		—		17
Accelerated depreciation	3		1		—		6		—		10
Contract and lease terminations	—		—		—		(2)		—		(2)
Professional and other fees	1		—		—		3