TYSON FOODS, INC. [TSN] Filings

10-Q 1 tsn-20240629.htm 10-Q tsn-20240629

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 June 29, 2024


☐			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 June 29, 2024.


Class						Outstanding Shares
Class A Common Stock, $0.10 Par Value (Class A stock)						285,820,693
Class B Common Stock, $0.10 Par Value (Class B stock)						70,009,005

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

PART I. FINANCIAL INFORMATION


		PAGE
Item 1.	Financial Statements

	Consolidated Condensed Statements of Income for the Three and Nine Months Ended June 29 , 2024, and July 1 , 2023	1

	Consolidated Condensed Statements of Comprehensive Income for the Three and Nine Months Ended June 29 , 2024, and July 1, 2023	2

	Consolidated Condensed Balance Sheets as of Ju ne 29 , 2024, and September 30, 2023	3

	Consolidated Condensed Statements of Shareholders’ Equity for the Three and Nine Months Ended June 29, 2024, and July 1, 2023	4

	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended Ju ne 29 , 2024, and July 1, 2023	5

	Notes to Consolidated Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION


Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

SIGNATURES		45

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				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Sales	$	13,353	$	13,140	$	39,744	$	39,533
Cost of Sales	12,475		12,463		37,177		37,361
Gross Profit	878		677		2,567		2,172
Selling, General and Administrative	537		579		1,683		1,656
Goodwill Impairment	—		448		—		448
Operating Income (Loss)	341		(350)		884		68
Other (Income) Expense:
Interest income	(36)		(6)		(60)		(22)
Interest expense	135		89		351		262
Other, net	(11)		(7)		(24)		(50)
Total Other (Income) Expense	88		76		267		190
Income (Loss) before Income Taxes	253		(426)		617		(122)
Income Tax Expense	57		9		159		84
Net Income (Loss)	196		(435)		458		(206)
Less: Net Income (Loss) Attributable to Noncontrolling Interests	5		(18)		15		(8)
Net Income (Loss) Attributable to Tyson	$	191	$	(417)	$	443	$	(198)
Net Income (Loss) Per Share Attributable to Tyson:
Class A Basic	$	0.55	$	(1.18)	$	1.28	$	(0.56)
Class B Basic	$	0.49	$	(1.08)	$	1.14	$	(0.51)
Diluted	$	0.54	$	(1.18)	$	1.25	$	(0.56)

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Net Income (Loss)	$	196	$	(435)	$	458	$	(206)
Other Comprehensive Income (Loss), Net of Taxes:
Derivatives accounted for as cash flow hedges	(12)		—		(11)		1
Investments	—		—		2		2
Currency translation	(32)		(35)		(28)		64
Postretirement benefits	—		—		2		1
Total Other Comprehensive Income (Loss), Net of Taxes	(44)		(35)		(35)		68
Comprehensive Income (Loss)	152		(470)		423		(138)
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interests	4		(18)		15		(8)
Comprehensive Income (Loss) Attributable to Tyson	$	148	$	(452)	$	408	$	(130)

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions, except share and per share data)

(Unaudited)


	June 29, 2024		September 30, 2023
Assets
Current Assets:
Cash and cash equivalents	$	2,569	$	573
Accounts receivable, net	2,389		2,476
Inventories	5,033		5,328
Other current assets	581		345
Total Current Assets	10,572		8,722
Net Property, Plant and Equipment	9,368		9,634
Goodwill	9,801		9,878
Intangible Assets, net	5,928		6,098
Other Assets	2,063		1,919
Total Assets	$	37,732	$	36,251

Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt	$	1,320	$	1,895
Accounts payable	2,291		2,594
Other current liabilities	2,199		2,010
Total Current Liabilities	5,810		6,499
Long-Term Debt	9,701		7,611
Deferred Income Taxes	2,318		2,308
Other Liabilities	1,701		1,578
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	4,578		4,560
Retained earnings	18,687		18,760
Accumulated other comprehensive gain (loss)	(295)		(260)
Treasury stock, at cost – 91 million shares at June 29, 2024 and 92 million shares at September 30, 2023	(4,939)		(4,972)
Total Tyson Shareholders’ Equity	18,076		18,133
Noncontrolling Interests	126		122
Total Shareholders’ Equity	18,202		18,255
Total Liabilities and Shareholders’ Equity	$	37,732	$	36,251

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions)

(Unaudited)


	Three Months Ended						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
	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		4,556			4,541			4,560			4,553





Stock-based compensation and other		22			2			18			(10)

Balance at end of period		4,578			4,543			4,578			4,543

Retained Earnings:
Balance at beginning of period		18,667			19,962			18,760			20,084
Net Income (Loss) Attributable to Tyson		191			(417)			443			(198)
Dividends		(171)			(167)			(516)			(508)
Balance at end of period		18,687			19,378			18,687			19,378

Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period		(252)			(194)			(260)			(297)
Other comprehensive income (loss)		(43)			(35)			(35)			68
Balance at end of period		(295)			(229)			(295)			(229)

Treasury Stock:
Balance at beginning of period	91	(4,927)		92	(4,955)		92	(4,972)		88	(4,683)
Purchase of Class A common stock	—	(13)		—	(11)		—	(44)		5	(343)



Stock-based compensation	—	1		—	8		(1)	77		(1)	68
Balance at end of period	91	(4,939)		92	(4,958)		91	(4,939)		92	(4,958)

Total Shareholders’ Equity Attributable to Tyson		$	18,076		$	18,779		$	18,076		$	18,779

Equity Attributable to Noncontrolling Interests:
Balance at beginning of period		$	134		$	159		$	122		$	109
Net income (loss) attributable to noncontrolling interests		5			(18)			15			(8)
Distributions to noncontrolling interest		(11)			(2)			(11)			(2)
Business combinations		—			—			1			28
Currency translation and other		(2)			(8)			(1)			4
Total Equity Attributable to Noncontrolling Interests		$	126		$	131		$	126		$	131

Total Shareholders’ Equity		$	18,202		$	18,910		$	18,202		$	18,910

See accompanying Notes to Consolidated Condensed Financial Statements.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended
	June 29, 2024		July 1, 2023
Cash Flows From Operating Activities:
Net income (loss)	$	458	$	(206)
Depreciation and amortization	1,082		943
Deferred income taxes	6		(54)
Impairment of goodwill	—		448
Other, net	162		200
Net changes in operating assets and liabilities	265		98
Cash Provided by Operating Activities	1,973		1,429
Cash Flows From Investing Activities:
Additions to property, plant and equipment	(884)		(1,564)
Purchases of marketable securities	(23)		(21)
Proceeds from sale of marketable securities	21		20

Acquisition, net of cash acquired	—		(262)
Acquisition of equity investments	(28)		(50)
Other, net	60		5
Cash Used for Investing Activities	(854)		(1,872)
Cash Flows From Financing Activities:
Proceeds from issuance of debt	2,391		1,117
Payments on debt	(347)		(175)


Proceeds from issuance of commercial paper	1,649		7,015
Repayments of commercial paper	(2,240)		(7,015)
Purchases of Tyson Class A common stock	(44)		(343)
Dividends	(513)		(503)
Stock options exercised	9		10
Other, net	(22)		(5)
Cash Provided by Financing Activities	883		101
Effect of Exchange Rate Changes on Cash	(6)		10
Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash	1,996		(332)
Cash and Cash Equivalents and Restricted Cash at Beginning of Year	573		1,031
Cash and Cash Equivalents and Restricted Cash at End of Period	2,569		699
Less: Restricted Cash at End of Period	—		—
Cash and Cash Equivalents at End of Period	$	2,569	$	699

See accompanying Notes to Consolidated Condensed Financial Statements.

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 September 30, 2023. 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 June 29, 2024 and the results of operations for the three and nine months ended June 29, 2024 and July 1, 2023. 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 and Intangible Assets

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 macroeconomic 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.

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

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.

New Regulation

On November 28, 2023, the United States Department of Agriculture published the Transparency in Poultry Grower Contracting and Tournaments rule that amended section 202(a) of the Packers and Stockyards Act to introduce new disclosure requirements that live poultry dealers must furnish to contract broiler growers. The rule was effective February 12, 2024, and directed live poultry dealers to amend broiler grower contracts to reflect certain new requirements. In compliance with the rule, we offered amendments to all our broiler growers which encompassed the new requirements, including but not limited to minimum number of flock placements and stocking density. As the amendments to certain contracts created fixed minimum payments associated with embedded leases, we have recognized as of June 29, 2024 a $72 million right-of-use asset and corresponding lease liability. These are reflected in the Consolidated Condensed Balance Sheets within Other Assets, Other current liabilities and Other Liabilities.

Recently Issued Accounting Pronouncements

In March 2024, the SEC issued a final rule that will require registrants to provide certain climate-related information in their registration statements and annual reports. The rule is effective for annual reporting periods beginning in 2025, our fiscal 2026, and will be applied prospectively. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

In December 2023, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is effective for annual reporting periods beginning after December 15, 2024, our fiscal 2026 and will be applied prospectively. We are currently evaluating the impact this guidance will have on disclosures in our consolidated financial statements.

In November 2023, the FASB issued authoritative guidance to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The guidance is effective for annual reporting periods beginning after December 15, 2023, our fiscal 2025, and interim reporting periods within fiscal years beginning after December 15, 2024, our fiscal 2026. Amendments will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact this guidance will have on disclosures in our consolidated financial statements.

In March 2023, the FASB issued authoritative guidance intended to address issues related to arrangements between entities under common control such as terms and conditions an entity should consider for determining whether a lease exists and the classification and accounting for that lease as well as accounting for leasehold improvements associated with leases between entities under common control. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2023, our fiscal 2025 and can be applied using either the prospective or retrospective approach. We do not expect the adoption of this guidance will have a material impact on our consolidated financial statements.

In September 2022, 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 elected to early adopt the initial disclosure requirement for the fiscal year ended September 30, 2023, and it did not have a material impact on our consolidated financial statements.

NOTE 2: ACQUISITIONS AND DISPOSITIONS

In the third quarter of fiscal 2023, we acquired Williams Sausage Company for $220 million, net of cash acquired, subject to certain adjustments, as part of our growth strategy to increase our capacity and product portfolio. Its results, subsequent to the acquisition closing, are included in our Prepared Foods segment and through June 29, 2024 were insignificant to our Consolidated Condensed Statements of Income. The purchase price allocation included $15 million of net working capital, including $3 million of cash acquired, $67 million of Property, Plant and Equipment, $107 million of Goodwill, $65 million of Intangible Assets, and $31 million of Deferred Income Taxes. Intangible Assets include brands and trademarks and customer relationships which will be amortized over a life of 20 and 12 years, respectively. $50 million of the goodwill is deductible for U.S. income tax purposes. The acquisition of Williams Sausage Company was accounted for using the acquisition method of accounting.

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 $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 and through June 29, 2024 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 June 29, 2024, 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 September 30, 2023. Inventories are presented net of lower of cost or net realizable value adjustments of $139 million and $145 million as of June 29, 2024 and September 30, 2023, respectively.

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


	June 29, 2024		September 30, 2023
Processed products	$	2,785	$	2,847
Livestock	1,429		1,594
Supplies and other	819		887
Total inventory	$	5,033	$	5,328

NOTE 4: PROPERTY, PLANT AND EQUIPMENT

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


	June 29, 2024		September 30, 2023
Land	$	216	$	219
Buildings and leasehold improvements	6,802		6,460
Machinery and equipment	11,215		10,680
Land improvements and other	585		559
Buildings and equipment under construction	894		1,782
	19,712		19,700
Less accumulated depreciation	10,344		10,066
Net Property, Plant and Equipment	$	9,368	$	9,634

NOTE 5: OTHER CURRENT LIABILITIES

Other current liabilities are as follows (in millions):


	June 29, 2024		September 30, 2023
Accrued salaries, wages and benefits	$	826	$	672



Taxes payable	149		156
Accrued current legal contingencies	351		289
Other	873		893
Total other current liabilities	$	2,199	$	2,010

NOTE 6: RESTRUCTURING AND RELATED CHARGES

2022 Program

The Company approved a restructuring program in fiscal 2022 (the “2022 Program”) to improve business performance, increase collaboration, enhance team member agility, enable faster decision-making and reduce redundancies. 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	$	25	$	7	$	22	$	53	$	18	$	125
Relocation and related costs	22		7		3		21		—		53
Accelerated depreciation	5		2		—		12		—		19
Contract and lease terminations	—		—		—		21		—		21
Professional and other fees	2		1		—		4		—		7
Total 2022 Program	$	54	$	17	$	25	$	111	$	18	$	225

Restructuring costs include severance expenses and related charges 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 $177 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 $199 million of charges that have resulted or will result in cash outflows and $26 million in non-cash charges.

The following table reflects the pretax impact of the 2022 Program’s restructuring and related charges during the first nine months of fiscal 2024 by reportable segment (in millions):


	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	1	$	—	$	2	$	1	$	—	$	4
Relocation and related costs	3		1		—		4		—		8
Accelerated depreciation	—		—		—		—		—		—
Contract and lease terminations	—		—		—		19		—		19
Professional and other fees	—		—		—		—		—		—
Total	$	4	$	1	$	2	$	24	$	—	$	31

For the first nine months of fiscal 2024, we recorded restructuring and related charges of $31 million in Selling, General and Administrative in our Consolidated Condensed Statements of Income. Included in the above results are $21 million of charges that have resulted or will result in cash outflows and $10 million in non-cash charges.

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


	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	4	$	1	$	10	$	4	$	9	$	28
Relocation and related costs	7		3		—		6		—		16
Accelerated depreciation	1		—		—		3		—		4
Contract and lease terminations	—		—		—		1		—		1
Professional and other fees	1		—		—		—		—		1
Total	$	13	$	4	$	10	$	14	$	9	$	50

For the third quarter of fiscal 2023, we recorded restructuring and related charges of $19 million and $31 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. There were no charges for the third quarter of fiscal 2024.

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


	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	6	$	2	$	9	$	10	$	15	$	42
Relocation and related costs	14		5		2		12		—		33
Accelerated depreciation	4		1		—		9		—		14
Contract and lease terminations	—		—		—		(1)		—		(1)
Professional and other fees	2		—		—		3		—		5
Total	$	26	$	8	$	11	$	33	$	15	$	93

For the first nine months of fiscal 2023, we recorded restructuring and related charges of $23 million and $70 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $80 million of charges that have resulted or will result in cash outflows and $13 million in non-cash charges.

The following table reflects the pretax 2022 Program charges to date by reportable segment (in millions):



	Beef		Pork		Chicken		Prepared Foods		International/Other		Total
Severance costs	$	25	$	7	$	22	$	53	$	18	$	125
Relocation and related costs	21		7		2		20		—		50
Accelerated depreciation	5		2		—		12		—		19
Contract and lease terminations	—		—		—		21		—		21
Professional and other fees	2		1		—		3		—		6
Total	$	53	$	17	$	24	$	109	$	18	$	221

Through the third quarter of fiscal 2024, we recorded restructuring and related charges to date of $47 million and $174 million in Cost of Sales and Selling, General and Administrative, respectively, in our Consolidated Condensed Statements of Income. Included in the above results are $195 million of charges to date that have resulted or will result in cash outflows and $26 million in non-cash charges to date.

The following table reflects our liability related to the 2022 Program, which was recognized in Other current liabilities in our Consolidated Condensed Balance Sheet as of June 29, 2024 (in millions):



	Balance at September 30, 2023		Restructuring Expense		Payments		Changes in Estimates		Balance at June 29, 2024
Severance costs	$	58	$	6	$	(51)	$	(2)	$	11
Relocation and related costs	5		8		(11)		—		2
Contract and lease termination	—		9		(9)		—		—
Professional and other fees	2		—		—		(1)		1
Total	$	65	$	23	$	(71)	$	(3)	$	14

As the Company continues to evaluate its business strategies and long-term growth targets, additional restructuring activities may occur.

Plant Closures

During fiscal 2023, as part of a strategic review of assets, the Company approved the closure of six Chicken segment processing facilities located in Glen Allen, Virginia; Van Buren, Arkansas; Corydon, Indiana; Dexter, Missouri; Noel, Missouri; and North Little Rock, Arkansas, to optimize asset utilization. As of the second quarter of fiscal 2024, we shifted production to other facilities and ceased operations at all six facilities. Additionally, during the first quarter of fiscal 2024, the Company approved the closure of two case ready value-added plants in our Beef segment located in Columbia, South Carolina and Jacksonville, Florida and during the second quarter of fiscal 2024 approved the closure of a Pork segment processing facility in Perry, Iowa to optimize asset utilization. We shifted production to other facilities and ceased operations at our Columbia and Jacksonville facilities during the first quarter of fiscal 2024, and shifted production and ceased operations at our Perry facility during the third quarter of fiscal 2024.

As a result of the plant closures, we recorded $41 million and $155 million of charges in the third quarter and first nine months of fiscal 2024, respectively, and $15 million and $107 million of charges in the third quarter and first nine months of fiscal 2023, primarily related to grower contract terminations, accelerated depreciation, severance, retention and related costs. The charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales. Included in the results for the first nine months of fiscal 2024 are $12 million of charges that have resulted or will result in cash outflows and $143 million in non-cash charges. Included in the results for the first nine months of fiscal 2023 are $83 million of charges that have resulted or will result in cash outflows and $24 million of non-cash charges.

The following table reflects our liability related to plant closures as of June 29, 2024 (in millions):


	Balance at September 30, 2023		Plant Closure Charges		Payments		Balance at June 29, 2024
Contract termination	$	151	$	13	$	(64)	$	100
Severance and retention	14		9		(12)		11
Total	$	165	$	22	$	(76)	$	111

During the first quarter of fiscal 2024, we experienced a fire at a production facility in the Netherlands which is included in International/Other for segment presentation. Subsequent to the first quarter of fiscal 2024, we recognized additional charges due to our decision to sell the facility. For the third quarter and first nine months of fiscal 2024, these charges totaled $3 million and $83 million, respectively, primarily related to property, plant and equipment impairments, severance costs, inventory write-offs and clean-up costs, partially offset by insurance proceeds. The net charges are reflected in the Consolidated Condensed Statements of Income in Cost of Sales and, for the first nine months of fiscal 2024, included $30 million of charges that have resulted or will result in cash outflows and $58 million of non-cash charges, offset by $5 million of insurance proceeds.

We continue to strategically evaluate optimization of such items as network capacity, manufacturing efficiencies and business technology. If we have a significant change in strategies, outlook, or a manner in which we plan to use these assets, we may experience future charges.

NOTE 7: DEBT

The major components of debt are as follows (in millions):


	June 29, 2024		September 30, 2023
Revolving credit facility	$	—	$	—
Commercial paper	—		592
Senior notes:



3.95% Notes due August 2024	1,250		1,250
4.00% Notes due March 2026 (“2026 Notes”)	800		800
3.55% Notes due June 2027	1,350		1,350
7.00% Notes due January 2028	18		18
4.35% Notes due March 2029 (“2029 Notes”)	1,000		1,000
5.40% Notes due March 2029 ("5.40% 2029 Notes")	600		—
6.13% Notes due November 2032	158		158
5.70% Notes due March 2034 ("5.70% 2034 Notes")	900		—
4.88% Notes due August 2034	500		500
5.15% Notes due August 2044	500		500
4.55% Notes due June 2047	750		750
5.10% Notes due September 2048 (“2048 Notes”)	1,500		1,500
Discount on senior notes	(37)		(36)
Term loans:
Term loan facility due May 2026 (6.49% at June 29, 2024)	750		1,000
Term loan facility due May 2028 (7.18% at June 29, 2024)	750		—
Other	280		164
Unamortized debt issuance costs	(48)		(40)
Total debt	11,021		9,506
Less current debt	1,320		1,895
Total long-term debt	$	9,701	$	7,611

Revolving Credit Facility and Letters of Credit

We have a $2.25 billion revolving credit facility that supports short-term funding needs and serves as a backstop to our commercial paper program. The facility will mature and the commitments thereunder will terminate in September 2026 with options for two one-year extensions. At June 29, 2024, amounts available for borrowing under this facility totaled $2.25 billion and we had no outstanding borrowings and no outstanding letters of credit issued under this facility. At June 29, 2024 we had $87 million of bilateral letters of credit issued separately from the revolving credit facility, none of which were drawn upon. Our letters of credit are issued primarily in support of workers’ compensation insurance programs and other legal obligations. In the future, if any of our subsidiaries shall guarantee any of our material indebtedness, such subsidiary shall be required to guarantee the indebtedness, obligations and liabilities under this facility.

Commercial Paper Program

We have a commercial paper program under which we may issue unsecured short-term promissory notes up to an aggregate maximum principal amount of $1.5 billion. As of June 29, 2024, we had no commercial paper outstanding. Our ability to access commercial paper in the future may be limited or its costs increased.

5.40% 2029 Notes/5.70% 2034 Notes

In March 2024, we issued senior unsecured notes with an aggregate principal amount of $1.5 billion, consisting of $600 million due March 2029 ("5.40% 2029 Notes") and $900 million due March 2034 ("5.70% 2034 Notes"). A portion of the net proceeds from the issuances were used to repay $250 million of the amount outstanding under our term loan facility due May 2026 and we expect to use the remainder of the proceeds to retire the August 2024 notes. Interest payments on the 5.40% 2029 Notes and 5.70% 2034 Notes are due semi-annually on March 15 and September 15, beginning September 15, 2024. After the original issue discounts of $3 million, we received net proceeds of $1,497 million and incurred debt issuance costs of $14 million related to the issuances.

Term Loan Facilities

We have a $750 million term loan facility that matures in May 2026 and a $750 million term loan facility that matures in May 2028. In the first quarter of fiscal 2024, we borrowed the full $750 million available under the loan facility that matures in May 2028 and used it to repay $592 million of outstanding commercial paper obligations. Both term loans may be prepaid under certain conditions and contain covenants that are similar to those contained in the revolving credit facility.

Debt Covenants

Our revolving credit and term loan facilities contain affirmative and negative covenants that, among other things, may limit or restrict our ability to: create liens and encumbrances; incur debt; merge, dissolve, liquidate or consolidate; make acquisitions and investments; dispose of or transfer assets; change the nature of our business; engage in certain transactions with affiliates; and enter into hedging transactions, in each case, subject to certain qualifications and exceptions. In addition, we are required to maintain a minimum interest expense coverage ratio.

Our senior notes also contain affirmative and negative covenants that, among other things, may limit or restrict our ability to: create liens; engage in certain sale/leaseback transactions; and engage in certain consolidations, mergers and sales of assets.

We were in compliance with all debt covenants at June 29, 2024.

NOTE 8: EQUITY

Share Repurchases

As of June 29, 2024, 7.3 million shares remained available for repurchase under the Company's share repurchase program. The program has no fixed or scheduled termination date, and the timing and extent to which we repurchase shares will depend upon, among other things, our working capital needs, markets, industry conditions, liquidity targets, limitations under our debt obligations and regulatory requirements. In addition to the share repurchase program, we purchase shares on the open market to fund certain obligations under our equity compensation plans. A summary of share repurchases of our Class A stock is as follows (in millions):


	Three Months Ended						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
	Shares	Dollars		Shares	Dollars		Shares	Dollars		Shares	Dollars
Shares repurchased:
Under share repurchase program	—	$	—	—	$	—	—	$	—	4.7	$	300
To fund certain obligations under equity compensation plans	0.2	13		0.2	11		0.8	44		0.7	43
Total share repurchases	0.2	$	13	0.2	$	11	0.8	$	44	5.4	$	343

NOTE 9: INCOME TAXES

Our effective tax rate was 22.9% on pretax income for the third quarter of fiscal 2024, (1.8)% on pretax loss for the third quarter of fiscal 2023, 25.9% on pretax income for the first nine months of fiscal 2024 and (67.9)% on pretax loss for the first nine months of fiscal 2023. The effective tax rates for the third quarter and first nine months of fiscal 2024 are higher than the federal statutory tax rate due to the impact of foreign losses for which a tax benefit cannot be recognized, offset by a $9 million benefit from the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the third quarter of fiscal 2024. In all periods presented, the effective tax rates were increased due to state taxes and include the impact of various tax benefits; however, tax benefits increase the effective tax rate in a period of pretax loss and decrease the effective tax rate in a period of pretax income. The effective tax rates for the third quarter and first nine months of fiscal 2023 include the impact of a $448 million non-deductible goodwill impairment.

Unrecognized tax benefits were $136 million and $131 million at June 29, 2024 and September 30, 2023, respectively.

In December 2021, we received an assessment from the Mexican tax authorities related to the 2015 sale of our direc