TSN 10-K & 10-Q changes, risk factors and insider trading

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. 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,intelligence and quantum computing, may present new technological risks or vulnerabilities. We may not be able to anticipate or react to new types of cyber attacks or vulnerabilities and we may face delays in our detection or remediation of security breaches and other security-related incidents or vulnerabilities.

As of September 28,27, 2024,2025, 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%2.56% 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%71.94% of the total voting power of the Company’s outstanding voting stock. As of September 28,27, 2024,2025, 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%)). As a result of these holdings, positions and directorships, the partners in the TLP have the ability to exert substantial influence or actual control over our management and affairs and over substantially all matters requiring action by our stockholders, including amendments to our restated certificate of incorporation and by-laws, the election and removal of directors, any proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactions. 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 forfor, and have elected to rely on, “controlled company” exemptions from certain corporate governance requirements of the New York Stock Exchange.

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”), and New World screwworm, which can have a significant impact on our financial results. 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. In 2024, HPAI washas been 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. 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. 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. 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.

We are subject to taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining our provision for income taxes. Our total income tax expense could be affected by changes in tax rates in various jurisdictions, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation. We are also subject to the examination of our tax returns and other tax matters by the Internal Revenue Service and other tax authorities. There can be no assurance as to the outcome of these examinations. 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.Taxes.

The following discussion provides an analysis of the Company’s financial condition, cash flows and results of operations from management’s perspective and should be read in conjunction with the consolidated financial statements and notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. Our objective is to also provide discussion of events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides understanding of our financial condition, cash flows and results of operations. Refer to the Company's Annual Report on Form 10-K for the fiscal year ended OctoberSeptember 1,30, 20222023 for additional information related to fiscal 2022.2023.

We are a world-class food company and recognized leader in protein. Founded in 1935 by John W. Tyson, it has grown under four generations of family leadership. The Company is unified by this purpose: Tyson Foods. We Feed the World Like 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.

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. For further description of the business, refer to Part I, Item 1, Business.

According to the USDA,most recently published USDA data, domestic protein production (beef, pork, chicken and turkey) increaseddecreased slightly in fiscal 20242025 compared to fiscal 2023.2024. The Beef segment experiencedcontinues to experience limited supply of market-ready cattle andas well as increased live cattle costs. Additionally, uncertainty exists regarding the timing of the anticipated cattle herd rebuilding. The Pork segment experienced sufficient supply of market-ready hogs and reducedincreased hog costs. The Chicken segment experienced reduced feed ingredient costs.costs, but costs began to stabilize in the back half of fiscal 2025. The Prepared Foods segment experiencedis reducedcurrently experiencing increased raw material costs primarily due to lowerhigher meat costs. Additionally, the conflicts between Ukraine and Russia, in addition to the Middle East, are ongoing and there are many risks and uncertainties in relation to the conflicts that are outside of our control. As of September 28, 2024, the impact of these conflicts have not had a material direct impact on our financial performance. If these conflicts escalate further, impact additional regions or countries, or have additional economic sanctions imposed, it could have a material impact on our business operations and financial performance.

•Decrease of $140 million due to plant closuresclosure and disposals.disposal charges.

•Decrease in live hog costs of approximately $295$29 million in ourrestructuring Porkand segment.related costs.

•Increase of $8 million in brand discontinuationand costs.product line discontinuations.

•We recorded $781a $343 million impairment charge in goodwillthe impairmentBeef chargessegment in fiscal 2023.2025.

•The increasedecrease in interest income for fiscal 20242025 was primarily due to higheraverage lower cash and cash equivalents held and increased interest rates.held.

•The increasedecrease in interest expense for fiscal 20242025 was primarily due to lower interest expense related to ourthe repayment of the term loan facilitiesdue May 2026 in fiscal 2025 and the recentlyrepayment issuedof the August 2024 senior notes in fiscal 2024, partially offset by increased interest expense from the issuance of 5.40% 2029 Notes and 5.70% 2034 Notes.Notes and decreased capitalized interest expense related to lower capital expenditures.

Our President and Chief Executive Officer is the Chief Operating Decision Maker ("CODM") of the Company. Commencing in the first quarter of fiscal 2026, we no longer allocate corporate expenses and amortization to our segments as these items are no longer used by our CODM in assessing the performance of, and allocating resources to, the segments. Segment operating income (loss) is now defined as Operating Income (Loss) less corporate expenses and amortization to account for these changes. Corporate expenses are unallocated general and administrative costs,costs including the costs of corporate functions, that are shared across multiple segments. Amortization includes amortization generated from intangible assetsassets, including brands and trademarks, customer relationships, supply arrangements, patents and intellectual property, land use rights and software. All prior period amounts have been recast to reflect the new presentation of segment operating income (loss).

Sales grewwere 4%,relatively or $579 million,flat in the secondthird quarter of fiscal 2026,2026 drivenas decreased sales in our Beef segment were largely offset by increased sales acrossin all other segments. Operating income of $435$362 million for the secondthird quarter of fiscal 2026 wasincreased up $335$102 million as compared to the secondsame quarterperiod oflast fiscal 2025,year, as we experienced higher segment operating income in our Pork, ChickenBeef and Prepared FoodsPork segments, partially offset by lower segment operating income in our BeefChicken, Prepared Foods and International segments and increased corporate expenses. In the secondthird quarter of fiscal 2026, our operating income was impacted by $46a $98 million legal contingency accrual, $73 million of executive leadership transition charges and $14 million of restructuring and related charges and $16 million of legal contingency accruals.charges. In the secondthird quarter of fiscal 2025, our operating income was impacted by a $343 million goodwill impairment charge, partially offset by $83 million of legalincome contingencyrelated accruals, $43 million ofto restructuring and related charges,activities, $23 millionnet of plantcharges, closureincluding anda disposalgain chargeson andthe $6sale millionof instorage brand and product line discontinuation charges.facilities.

Sales grew 5%,3%, or $1,269$1,253 millionmillion, in the first sixnine months of fiscal 2026, driven by increased sales in all segments. Operating income of $737$1,099 million for the first sixnine months of fiscal 2026 wasincreased up 8%17% compared to the firstsame sixperiod monthslast of fiscal 2025year, as we experienced higher segment operating income in our Pork,Beef, ChickenPork and Prepared FoodsChicken segments, partially offset by lower segment operating income forin our BeefPrepared Foods and International segments and increased corporate expenses. In the first sixnine months of fiscal 2026, our operating income was impacted by $161$269 million of legal contingency accruals, $175 million of restructuring and related charges and $171$73 million of legalexecutive contingencyleadership accruals.transition charges. In the first sixnine months of fiscal 2025, our operating income was impacted by a $343 million goodwill impairment charge, $343 million of legal contingency accruals, $116$33 million of restructuring and related charges, $23$17 million of plant closure and disposal charges and $12 million in brand and product line discontinuation charges and $17 million of plant closures and disposal charges.

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) increased slightly in the secondthird quarter of fiscal 2026 as compared to the same period in fiscal 2025. The Beef segment continues to experience limited supply of market-ready cattle as well as increased cattle costs. Additionally, uncertainty exists regarding the timing of the anticipated cattle herd rebuilding. The Pork segment experienced sufficientadequate supply of market-ready hogs and increaseddecreased hog costs.costs in the third quarter. The Chicken segment experienced reducedmoderating feed ingredient costs. The Prepared Foods segment is currently experiencing increased raw material costs primarily due to higher meat costs. Additionally, the International segment is currently experiencing increased raw material costs.

Geopolitical tensions in the Middle East, including heightened tensions involving Iran,East have increased volatility in global energy and commodity markets, which mayhave affectaffected our cost structure, including transportationtransportation, costs.freight, energy and cooking oil. Although these conditions have not had a material impactadverse effect on our results to date, continued or heightened volatility could result in materialsignificant impacts depending on the duration and severity of these conditions.

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

Our total operating margin was 3.2% infor the secondthird quarter of fiscal 2026.2026 was 2.6%. Segment operating margins were as follows:

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

Commencing in fiscal 2025, the Company initiated a network optimization plan to optimize ourits global operations and logistics network. InDuring the second quarter and first halfnine months of fiscal 2026, the Company increased the estimated pretax charges by $38$155 million and $178 million, respectively, for additional actions approved to date under the network optimization plan. In the first quarter of fiscal 2026, theThis increase in estimated total pretax charges reflects network changes in the Beef segment, including the closure of a harvesting facility and the transition of another facility to a single shift, asthe wellclosure asof a production facility in the Prepared Foods segment and efforts to reduce support costs across all segments and corporate functions. The increaseestimated pretax charges decreased $23 million in the secondthird quarter primarilyof reflectsfiscal 2026, due to an estimated gain on the closuresale of aassets productionexpected facilityto close in the Preparedfourth Foodsquarter segment.related to network changes in the Beef segment approved in the first quarter of fiscal 2026. As a result, we now expect to recognize total pretax net charges of $264$241 million for actions approved through MarchJune 28,27, 2026,2026. whichThese charges include $179$181 million of net charges that have resulted or will result in cash outflows and $192$190 million of non-cash charges, partially offset by a $107 million gain recognized from the sale of storage facilities.facilities and a $23 million estimated gain on the expected sale of assets in the Beef segment. Additionally, we have received $296 million inof proceeds associated withfrom the sale of storage facilities to date. Through the secondthird quarter of fiscal 2026, we have recognized $208$240 million of the expected total pretax charges and estimate $56that the remaining $1 million of net charges will be incurred over future periods, including $35income of $20 million during the remainder of fiscal 2026.2026, consisting of a $23 million estimated gain on the expected sale of assets in the Beef segment, partially offset by $3 million of charges. We expect to incur costs related to the network optimization plan over a multi-year period and anticipate additional charges in the future as further actions are approved. For further descriptiondescription, refer to Part I, Item I,1, Notes to the Consolidated Condensed Financial Statements, Note 5: Restructuring and Related Charges.

•Sales Volume – Sales were negatively impacted by a decrease inlower sales volume, which accounted for a $311 million decrease in salesSales of $392 million, as decreased sales volume in our Beef and International segments was partially offset by increased sales volume in our Pork, Chicken and Prepared Foods segments.

•Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase in Sales of $547$474 million, driven by price increases in all segments.segments except Pork.

•The above change in average sales price excludes a $343$98 million reduction of Sales forfrom the recognition of a legal contingency accruals recordedaccrual in the secondthird quarter of fiscal 2025.2026.

•Sales Volume – Sales were negatively impacted by a decrease inlower sales volume, which accounted for a $354 million decrease in salesSales of $746 million, as decreased sales volume in our Beef and International segments was partially offset by increased sales volume in our Pork, Chicken,Chicken and Prepared Foods segments.

•Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase in Sales of $1,430$1,904 million, driven by price increases in all segments.

•The above change in average sales price excludes a $150$248 million and $343 million reduction of Sales from the recognition of legal contingency accruals forin the sixnine months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively.

•Cost of sales increased $217$204 million. Lower sales volume decreased cost of sales $288$360 millionmillion, while higher input cost per pound increased cost of sales by $505$564 million.

•The $505$564 million impact of higher input cost per pound was impacteddriven by:

•Decrease of approximately $60 million in our Chicken segment related to decreased feed ingredient costs.costs in our Chicken segment.

•Decrease due to net derivative gainslosses of $26$4 million in the first sixnine months of fiscal 2026,2026 compared to net derivative losses of $31$50 million in the first sixnine months of fiscal 20252025, both due to our risk management activities. These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein.

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

•Increase of $27$21 million in selling, general and administrative expenses was primarily driven by:

•IncreaseDecrease of $25$10 million in marketing,amortization, advertisingprimarily from brand and promotionproduct expenses.line discontinuations in the prior year.

•DecreaseIncrease of $12 million in professionalrestructuring fees.and related charges.