Tyson Foods (TSN) 8-KTyson Foods Reports Fourth Quarter and Fiscal 2024 Results

Q4 Fiscal 2024 Supplemental Information November 12, 2024

 

Certain information in this presentation constitutes forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2025, other future economic circumstances, industry conditions in domestic and international markets, our performance and financial results (e.g., debt levels, return on invested capital, value-added product growth, capital expenditures, tax rates, access to foreign markets and dividend policy). These forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results and experiences to differ materially from anticipated results and expectations expressed in such forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which are expressly qualified in their entirety by this cautionary statement and speak only as of the date made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following: (i) global pandemics have had, and may in the future have, an adverse impact on our business and operations; (ii) the effectiveness of restructuring or financial excellence programs; (iii) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (iv) cyber attacks, other cyber incidents, security breaches or other disruptions of our information technology systems; (v) risks associated with our failure to consummate favorable acquisition transactions or integrate certain acquisitions' operations; (vi) the Tyson Limited Partnership’s ability to exercise significant control over the Company; (vii) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (viii) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins; (ix) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to conduct our operations; (x) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xi) effectiveness of advertising and marketing programs; (xii) significant marketing plan changes by large customers or loss of one or more large customers; (xiii) our ability to leverage brand value propositions; (xiv) changes in availability and relative costs of labor and contract farmers and our ability to maintain good relationships with team members, labor unions, contract farmers and independent producers providing us livestock; (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) the other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, including those included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and Quarterly reports on Form 10-Q. This presentation contains the financial measures “EBITDA,” “Adjusted EBITDA,” “Adjusted EPS”, “Adjusted Operating Income”, “Adjusted Operating Margin” and “Free Cash Flow” which are not calculated in accordance with U.S. GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure has been provided in the Appendix. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results. Forward-Looking Statements Non-GAAP Financial Measures

 

Key Messages Operations Strong performance in 4Q24 with AOI more than doubling wraps up impressive YoY improvement for FY24 Financial Strength Significant cash generation with free cash flow more than 2x dividend and substantial reduction of net leverage ratio to 2.6x Guidance for FY25 Solid growth in AOI behind productivity in Prepared Foods and ongoing strength in Chicken Controlling the Controllables Focus on priorities is delivering tangible benefits

 

Prepared Foods • AOI1 performance in line with expectations resulting in best full year since FY18 • Full year volume growth in total outside of retail FY24 Segment Highlights 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. Beef • Spread compression driven by continued tight cattle supply as expected • Meaningful heifer retention yet to unfold Pork • Significant YoY AOI1 increase in FY24 in line with expectations • Herd health and productivity remain strong Chicken • Strong finish drives best full year AOI1 performance since FY17 • Market tailwinds and operational efficiencies driving results

 

FY25 Enterprise Priorities Strengthening our iconic brands to expand reach and introduce innovation for new occasions Investing in big data, analytics, and AI to improve operational decision-making and drive consumer insights and actions Focusing on cash flow by managing capex and working capital Supporting team members to reinforce our culture and drive success Striving for best-in-class operations by gaining efficiencies and eliminating waste, with strong impact in Prepared Foods Team Member Development Customer & Consumer Obsession Data & Digital Delivery Capital Allocation Operational Excellence

 

FY25 Segment Priorities – Prepared Foods Operational Excellence • Enhance throughput and yield; eliminate waste • Reduce SKU complexity • Improve service levels Customer & Consumer Obsession • Advance platform innovations • Expand distribution on top performing SKUs Data & Digital Delivery • Data-driven consumer insights and MAP support to drive growth

 

FY25 Segment Priorities – Chicken Operational Excellence • Continuous improvement in live, plant operations and disciplined S&OP Customer & Consumer Obsession • Focus on long-term, win-win partnerships with customers • Invest in value-added products including the #1 brand in Chicken Capital Allocation • Deploy capital into high ROI areas including fully-cooked portfolio

 

FY25 Segment Priorities – Beef Operational Excellence • Manage yield, mix and efficiency to enhance cost structure • Align cattle procurement to support customer and consumer demand Customer & Consumer Obsession • Continue to invest in value-added capabilities in areas of strong demand • Target category leadership and strengthen customer partnerships Data & Digital Delivery • Scale analytics for agile decision making

 

FY25 Segment Priorities – Pork Operational Excellence • Drive capacity utilization through the network • Continue to optimize yield and mix Customer & Consumer Obsession • Continue to invest in value-added capabilities in areas of strong demand • Target category leadership and strengthen customer partnerships Data & Digital Delivery • Scale data and digital for better decision making

 

$799 $905 $1,000 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. 2 Midpoint refers to the middle of FY25 guidance range for both the segment and total company. Growing Contribution from Prepared Foods & Chicken FY19 – ‘23 Average FY24 ~25% FY25 Midpoint2 ~50% % of Total Company AOI1: ~25% $335 $1,015 $1,100 ~10% > 50% FY19 – ‘23 Average FY24 FY25 Midpoint2 ~228% Prepared Foods (in millions of dollars) Chicken (in millions of dollars)

 

4Q ADJUSTED OPERATING INCOME1 (in millions of dollars) $236 $512 $2 $281 $54 $27 $(88) 4Q23 Chicken Prepared Foods Pork Int'l/Other Beef 4Q24 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. in $m, except EPS (in $ per share) 4Q24 Sales $13,565 AOI1 $512 AOI Margin1 3.8% Adjusted EPS1 $0.92 +1.6% vs PY +117% vs PY +149% vs PY +200bps vs PY Enterprise Sales, AOI and EPS Performance Fourth Quarter FY24 vs Comparable Prior Year Period

 

1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. Sales AOI1 FY24 (in $m) $9,851 $905 vs PY +0.1% +$16 Volume: +0.9% Price: (0.8)% AOI %1: 9.2% YoY: +20 bps Sales AOI1 4Q24 (in $m) $2,472 $205 vs PY (1.2)% +$54 Volume: (1.4)% Price: +0.2% AOI %1: 8.3% YoY: +230 bps Growing Profitability in Prepared Foods 4Q24 & FY24

 

1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. 2 Average Sales Price Change and Adjusted Operating Margin (Non-GAAP) exclude the impact of $118 million and $156 million of legal contingency accruals recognized as a reduction to Sales for 4Q23 and FY23, respectively Sales AOI1,2 FY24 (in $m) $16,425 $1,015 vs PY (3.7)% +$1,092 Volume: (2.2)% Price2: (2.4)% AOI %1,2: 6.2% YoY: +660 bps Sales AOI1,2 4Q24 (in $m) $4,251 $356 vs PY +2.3% +$281 Volume: (0.7)% Price2: +0.2% AOI %1,2: 8.4% YoY: +660 bps Fundamentally Stronger Chicken Business 4Q24 & FY24

 

1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. Sales AOI1 FY24 (in $m) $20,479 $(291) vs PY +6.0% $(524) Volume: +1.6% Price: +4.4% AOI %1: (1.4)% YoY: (260) bps Sales AOI1 4Q24 (in $m) $5,261 $(71) vs PY +4.6% $(88) Volume: +3.7% Price: +0.9% AOI %1: (1.3)% YoY: (160) bps Navigating Industry Challenges in Beef 4Q24 & FY24

 

1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. 2 Average Sales Price Change and Adjusted Operating Margin (Non-GAAP) exclude a $45 million legal contingency accrual recognized as a reduction to Sales for FY24. Sales AOI1,2 FY24 (in $m) $5,903 $142 vs PY +2.3% +$270 Volume: +3.8% Price2: (0.7)% AOI %1,2: 2.4% YoY: +460 bps Sales AOI1 4Q24 (in $m) $1,438 $19 vs PY (3.7)% +$27 Volume: +3.2% Price: (6.9)% AOI %1: 1.3% YoY: +180 bps Strong YOY Improvement in Pork Profitability 4Q24 & FY24

 

589 508 467 375 354 267 263 248 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1.6x 2.4x 3.2x 4.1x 3.9x 3.6x 3.0x 2.6x 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 $(187) $1,458 FY23 FY24 $1,024 $733 FY23 FY24 Dividend Share Repurchase FREE CASH FLOW 1 (in millions of dollars) Leverage Ratio (Net Debt/Adj. LTM EBITDA)1 Capital Expenditures (in millions) Return Cash to Shareholders (in millions) 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. Build Financial Strength Manage our leverage ratio to be at or below our long-term target Invest in our Business Disciplined investments to modernize and expand capacity to support growth Return Cash to Shareholders Committed to returning cash to shareholders through dividends and opportunistic share repurchases Robust Cash Flow and Strengthening Financial Position

 

1 The Company is not able to reconcile its full-year fiscal 2025 projected adjusted results to its fiscal 2025 projected GAAP results because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of the number of future adjustments, such as legal contingency accruals and other significant items which could be significant, the Company is unable to provide a reconciliation for these forward-looking non-GAAP measures without unreasonable effort. Adjusted operating margin should not be considered a substitute for operating margin or any other measures of financial performance reported in accordance with GAAP. Investors should rely primarily on the Company’s GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Prepared Foods AOI1 $0.9 – 1.1B Chicken AOI1 $1.0 – 1.2B Beef AOI1 $(0.4) – (0.2)B Pork AOI1 $0.1 – 0.2B Sales Growth (1)% – Flat Total AOI1 $1.8 – 2.2B Net Interest Expense ~$380M Adjusted Tax Rate1 ~24 – 25% Capital Expenditures $1.0 – 1.2B Free Cash Flow1 > Dividend FY25 Guidance1

 

• Significant improvement in profitability and financial health in FY24 • Consistently delivering on our strategic priorities • Continuing upward momentum with ~10% AOI growth in FY25 at midpoint driven by Prepared Foods and Chicken • One Team. One Tyson.

 

 

Appendix

 

$ millions $236 $512 $3 $27 $209 $37 Q4 2023 AOI Net Volume Impact Sales Price/Mix COGS Price/Mix SG&A Q4 2024 AOI 1 2 4 5 TYSON FOODS, INC. November 12, 2024 21 AOI Bridge by P&L Items Fourth Quarter FY24 vs Comparable Prior Year Period 1 3 1 Represents a non-GAAP financial measure. Non-GAAP financial measures are explained and reconciled to the most directly comparable GAAP financial measure in the Appendix. 2 Represents the net impact of the change in Sales and change in COGS attributable to decreased sales volumes. 3 Excludes the impact of a legal contingency accrual of $118 million in the fourth quarter of fiscal 2023. 4 Excludes the impacts of $27 million of plant closure and disposal charges, $3 million of costs, net of insurance proceeds, related to a production facility fire and subsequent decision to sell the facility in the Netherlands and $51 million of production facility fire proceeds, net of costs incurred in the fourth quarter of fiscal 2024, and $215 million of plant closure and disposal charges, $17 million of product line discontinuation charges, $6 million of restructuring and related charges, $4 million of production facility fire costs, net of insurance proceeds and $19 million of China plant relocation remuneration in the fourth quarter of fiscal 2023. 5 Excludes the impact of $8 million of brand discontinuation charges and $25 million of restructuring and related charges in the fourth quarter of fiscal 2024 and 2023, respectively.

 

Adjusted Operating Income (Loss), Adjusted Income (Loss) before Income Taxes, Adjusted Income Tax Expense (Benefit), Adjusted Net Income (Loss) Attributable to Tyson, Adjusted Operating Margin and Adjusted EPS, EBITDA, Adjusted EBITDA, net debt to EBITDA, net leverage ratio or net debt to Adjusted EBITDA, and Free Cash Flow are presented as supplemental financial measures in the evaluation of our business that are not required by, or presented in accordance with GAAP. The non-GAAP financial measures are tools intended to assist our management and investors in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations on an ongoing basis. These non-GAAP measures should not be a substitute for their comparable GAAP financial measures. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. We believe the presentation of these non-GAAP financial measures helps management and investors to assess our operating performance from period to period, including our ability to generate earnings sufficient to service our debt, enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Our calculation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies and other companies may not define these non-GAAP financial measures in the same way, which may limit their usefulness of comparative measures. Definitions EBITDA is defined as net income (loss) before interest, income taxes (benefits), depreciation and amortization. Net debt to EBITDA (Adjusted EBITDA) represents the ratio of our debt, net of cash, cash equivalents and short-term investments, to EBITDA (and to Adjusted EBITDA). EBITDA, Adjusted EBITDA, net debt to EBITDA and net debt to Adjusted EBITDA are presented as supplemental financial measurements in the evaluation of our business. Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Income (Loss) before Income Taxes, Adjusted Income Tax Expense (Benefit), Adjusted Net Income (Loss) Attributable to Tyson and Adjusted EPS are defined as EBITDA, Operating Income (Loss), Income (Loss) before Income Taxes, Income Tax Expense (Benefit), Net Income (Loss) Attributable to Tyson and diluted earnings per share, respectively, excluding the impacts of any items that management believes do not directly reflect our core operations on an ongoing basis. Free Cash Flow is defined as Cash Provided by Operating Activities minus payments for Property, Plant and Equipment. Non-GAAP Financial Measures TYSON FOODS, INC. November 12, 2024 22

 

Sales Cost of Sales Selling, General and Administrative Goodwill Impairment Operating Income (Loss) Other (Income) Expense Income (Loss) before Income Taxes Income Tax Expense (Benefit) Net Income (Loss) Attributable to Tyson EPS Impact GAAP Results $ 525 $ 475 $ 111 $ 357 $ 1.00 Production facility fire insurance proceeds, net of costs1 - (51) - - (51) (31) (82) (19) (63) (0.18) Plant closures and disposals - 27 - - 27 - 27 (10) 37 0.10 The Netherlands facility2 - 3 - - 3 - 3 11 (8) (0.02) Brand discontinuation - - 8 - 8 - 8 2 6 0.02 Adjusted Non-GAAP Results $ 512 $ 431 $ 95 $ 329 $ 0.92 Sales Cost of Sales Selling, General and Administrative Goodwill Impairment Operating Income (Loss) Other (Income) Expense Income (Loss) before Income Taxes Income Tax Expense (Benefit) Net Income (Loss) Attributable to Tyson EPS Impact GAAP Results $ (463) $ (556) $ (113) $ (450) $ (1.31) Production facilities fire costs, net of insurance proceeds1 - 4 - - 4 - 4 1 3 0.01 Restructuring and related charges - 6 25 - 31 - 31 8 23 0.06 Plant closures and disposals - 215 - - 215 - 215 55 160 0.45 Legal contingency accruals 118 - - - 118 - 118 30 88 0.25 China plant relocation remuneration3 - (19) - - (19) - (19) (5) (11) (0.03) Product line discontinuation - 17 - - 17 - 17 4 13 0.04 Goodwill impairment4 - - - 333 333 - 333 - 333 0.93 Remeasurement of net deferred tax liabilities at lower enacted state tax rates - - - - - - - 26 (26) (0.07) Impact of antidilutive securities5 - - - - - - - - - 0.04 Adjusted Non-GAAP Results $ 236 $ 143 $ 6 $ 133 $ 0.37 Results for the fourth quarter ended September 28, 2024 Results for the fourth quarter ended September 30, 2023 GAAP Results to Non-GAAP Results Reconciliations $ in millions, except per share data (Unaudited) 1 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of fiscal 2019. 2 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 3 The China plant relocation remuneration EPS impact was net of $3 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. 4 Goodwill impairment was non-deductible for income tax purposes and the EPS impact was net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. 5 GAAP EPS, Net Income (Loss) Per Share Attributable to Tyson, excluded the impact of certain antidilutive securities given the Company incurring a net loss for fiscal 2023. Adjusted Non-GAAP EPS is in a net income position, and thus, the impact of the otherwise antidilutive securities under GAAP EPS were added back in the calculation of Adjusted Non-GAAP EPS. TYSON FOODS, INC. November 12, 2024 23

 

GAAP Results to Non-GAAP Results Reconciliations $ in millions, except per share data (Unaudited) Sales Cost of Sales Selling, General and Administrative Goodwill Impairment Operating Income (Loss) Other (Income) Expense Income (Loss) before Income Taxes Income Tax Expense (Benefit) Net Income (Loss) Attributable to Tyson EPS Impact GAAP Results $ 1,409 $ 1,092 $ 270 $ 800 $ 2.25 Production facility fire insurance proceeds, net of costs1 - (70) - - (70) (34) (104) (24) (80) (0.23) Restructuring and related charges - - 31 - 31 - 31 8 23 0.06 Plant closures and disposals - 182 - - 182 - 182 36 146 0.41 Legal contingency accruals 45 129 - - 174 - 174 41 133 0.38 The Netherlands facility2 - 86 - - 86 - 86 11 75 0.21 Brand discontinuation - - 8 - 8 - 8 2 6 0.02 Adjusted Non-GAAP Results $ 1,820 $ 1,469 $ 344 $ 1,103 $ 3.10 Sales Cost of Sales Selling, General and Administrative Goodwill Impairment Operating Income (Loss) Other (Income) Expense Income (Loss) before Income Taxes Income Tax Expense (Benefit) Net Income (Loss) Attributable to Tyson EPS Impact GAAP Results $ (395) $ (678) $ (29) $ (648) $ (1.87) Production facilities fire insurance proceeds, net of costs1 - (53) - - (53) (22) (75) (17) (58) (0.16) Restructuring and related charges - 29 95 - 124 - 124 29 95 0.26 Plant closures and disposals - 322 - - 322 - 322 82 240 0.67 Legal contingency accruals 156 - - - 156 - 156 39 117 0.33 China plant relocation remuneration3 - (19) - - (19) - (19) (5) (11) (0.03) Product line discontinuation - 17 - - 17 - 17 4 13 0.04 Goodwill impairment4 - - - 781 781 - 781 - 757 2.13 Remeasurement of net deferred tax liabilities at lower enacted state tax rates - - - - - - - 26 (26) (0.07) Impact of antidilutive securities5 - - - - - - - - - 0.04 Adjusted Non-GAAP Results $ 933 $ 628 $ 129 $ 479 $ 1.34 Results for the twelve months ended September 28, 2024 Results for the twelve months ended September 30, 2023 1 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of fiscal 2019. 2 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 3 The China plant relocation remuneration EPS impact was net of $3 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. 4 Goodwill impairment was non-deductible for income tax purposes and the EPS impact was net of $24 million associated with Net Income (Loss) Attributable to Noncontrolling Interests. 5 GAAP EPS, Net Income (Loss) Per Share Attributable to Tyson, excluded the impact of certain antidilutive securities given the Company incurring a net loss for fiscal 2023. Adjusted Non-GAAP EPS is in a net income position, and thus, the impact of the otherwise antidilutive securities under GAAP EPS were added back in the calculation of Adjusted Non-GAAP EPS. TYSON FOODS, INC. November 12, 2024 24

 

Beef Pork Chicken Prepared Foods International/ Other Reported operating income (loss) (71)$ (16)$ 409$ 203$ -$ 525$ (Less): Production facility fire insurance proceeds, net of costs1 - - (51) - - (51) Add/(Less): Plant closures and disposals - 35 (8) - - 27 Add: The Netherlands facility2 - - - - 3 3 Add: Brand discontinuation - - 6 2 - 8 Adjusted operating income (loss) (71)$ 19$ 356$ 205$ 3$ 512$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) (323)$ (11)$ (267)$ 118$ 20$ (463)$ Add: Production facilities fire costs, net of insurance proceeds1 - - 4 - - 4 Add: Restructuring and related charges 7 3 5 16 - 31 Add: Plant closures and disposals - - 215 - - 215 Add: Legal contincency accruals - - 118 - - 118 (Less): China plant relocation remuneration - - - - (19) (19) Add: Product line discontinuation - - - 17 - 17 Add: Goodwill impairment 333 - - - - 333 Adjusted operating income (loss) 17$ (8)$ 75$ 151$ 1$ 236$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) (381)$ (40)$ 988$ 879$ (37)$ 1,409$ (Less): Production facility fire insurance proceeds, net of costs1 - - (70) - - (70) Add: Restructuring and releated charges 4 1 2 24 - 31 Add: Plant closures and disposals 41 108 33 - - 182 Add: Legal contingency accruals 45 73 56 - - 174 Add: The Netherlands facility2 - - - - 86 86 Add: Brand discontinuation - - 6 2 - 8 Adjusted operating income (loss) (291)$ 142$ 1,015$ 905$ 49$ 1,820$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) (91)$ (139)$ (770)$ 823$ (218)$ (395)$ (Less): Production facilities fire insurance proceeds, net of costs1 (42) - (11) - - (53) Add: Restructuring and related charges 33 11 16 49 15 124 Add: Plant Closures and disposals - - 322 - - 322 Add: Legal contingency accruals - - 156 - - 156 (Less): China plant remuneration - - - - (19) (19) Add: Product line discontinuation - - - 17 - 17 Add: Goodwill impairment 333 - 210 - 238 781 Adjusted operating income (loss) 233$ (128)$ (77)$ 889$ 16$ 933$ Adjusted Segment Operating Income (Loss)  Adjusted Segment Operating Income (Loss)  (for the twelve months ended September 28, 2024) Adjusted Segment Operating Income (Loss)  (for the twelve months ended September 30, 2023) Adjusted Segment Operating Income (Loss)  (for the fourth quarter ended September 30, 2023) (for the fourth quarter ended September 28, 2024) Total Adjusted Operating Income (Loss) Non-GAAP Reconciliations $ in millions (Unaudited) 1 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of fiscal 2019. 2 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. TYSON FOODS, INC. November 12, 2024 25

 

Beef Pork Chicken Prepared Foods International/ Other Reported operating income (loss) 2,502$ 193$ 955$ 746$ 14$ 4,410$ (Less): Production facility fire insurance proceeds, net of costs (27) - (35) - - (62) Add: Restructuring and related charges 16 5 6 36 3 66 Adjusted operating income (loss) 2,491$ 198$ 926$ 782$ 17$ 4,414$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) 3,240$ 328$ (625)$ 1,456$ (3)$ 4,396$ (Less): Gain on sale of business - - - (784) - (784) Add: Production facilities fire costs, net of insurance proceeds - - 23 - - 23 Add: Legal contingency accruals - - 626 - - 626 Add: China plant relocation charge - - - - 27 27 Adjusted operating income (loss) 3,240$ 328$ 24$ 672$ 24$ 4,288$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) 1,580$ 565$ 122$ 743$ (2)$ 3,008$ Add: Restructuring and releated charges 9 3 33 27 3 75 Add: Production facilities fire costs, net of insurance proceeds 1 - - - - 1 Adjusted operating income (loss) prior to adjustment for additional week 1,590 568 155 770 1 3,084 Add/(Less): Estimated impact of additional week (37) (13) (7) (18) 1 (74) Adjusted operating income (loss) 1,553$ 555$ 148$ 752$ 2$ 3,010$ Beef Pork Chicken Prepared Foods International/ Other Total Reported operating income (loss) 1,050$ 263$ 621$ 843$ (7)$ 2,770$ Add: Restructuring and related charges 1 1 21 18 - 41 Add: Keystone purchase accounting and acquisition related costs - - 13 - 24 37 Add: Production facilities fire costs, net of insurance proceeds 31 - - - - 31 Add: Impairment associated with the planned divestiture of a business - - - 41 - 41 Adjusted operating income (loss) 1,082$ 264$ 655$ 902$ 17$ 2,920$ Beef Pork Chicken Prepared Foods International/ Other Total 5-Year Average 1,720$ 243$ 336$ 799$ 15$ 3,113$ % of Total Company 5-year Average 55% 8% 11% 26% 0% 100% Adjusted Segment Operating Income (Loss)  (5-Year Average of Fiscal Years 2019 - 2023) Adjusted Segment Operating Income (Loss)  Adjusted Segment Operating Income (Loss)  (for the twelve months ended October 3, 2020) Adjusted Segment Operating Income (Loss)  (for the twelve months ended September 28, 2019) Adjusted Segment Operating Income (Loss)  (for the twelve months ended October 2, 2021) (for the twelve months ended October 1, 2022) Total Adjusted Operating Income (Loss) Non-GAAP Reconciliations $ in millions (Unaudited) TYSON FOODS, INC. November 12, 2024 26

 

1 Excludes the amortization of debt issuance and debt discount expense of $12 million and $10 million for the twelve months ended September 28, 2024 and September 30, 2023, respectively, as it is included in interest expense. 2 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of f iscal 2019. 3 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 4 Removal of accelerated depreciation of $127 million related to plant closures and disposals for the twelve months ended September 28, 2024 and $19 million related to restructuring and related charges and $114 million related to plant closures and disposals for the twelve months ended September 30, 2023 as they are already included in depreciation expense. Removal of accelerated amortization of $2 million related to brand discontinuation for the twelve months ended September 28, 2024 as it is already included in amortization expense. September 28, 2024 September 30,2023 Net income (loss) 822$ (649)$ Less: Interest income (89) (30) Add: Interest expense 481 355 Add/(Less): Income tax expense (benefit) 270 (29) Add: Depreciation 1,159 1,100 Add: Amortization1 229 229 EBITDA 2,872$ 976$ Adjustments to EBITDA: Less: Production facilities fire insurance proceeds, net of costs2 (104)$ (75)$ Add: Restructuring and related charges 31 124 Add: Plant closures and disposals 182 322 Add: Legal contingency accruals 174 156 Add: The Netherlands facility3 86 - Add: Brand discontinuation 8 - Add: Goodwill impairment - 781 Less: China plant relocation remuneration - (19) Add: Product line discontinuation - 17 Less: Depreciation and amortization included in EBITDA adjustments4 (129) (133) Total Adjusted EBITDA 3,120$ 2,149$ Total gross debt 9,787$ 9,506$ Less: Cash and cash equivalents (1,717) (573) Less: Short-term investments (10) (15) Total net debt 8,060$ 8,918$ Ratio Calculations: Gross debt/EBITDA 3.4x 9.7x Net debt/EBITDA 2.8x 9.1x Gross debt/Adjusted EBITDA 3.1x 4.4x Net debt/Adjusted EBITDA 2.6x 4.1x Twelve Months Ended EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) TYSON FOODS, INC. November 12, 2024 27

 

1 Excludes the amortization of debt issuance and debt discount expense of $9 million for the nine months ended June 29, 2024, $7 million for the nine months ended July 1, 2023, $10 million for the fiscal year ended September 30, 2023 and $12 million for the twelve months ended June 29, 2024 as it is included in interest expense. 2 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of f iscal 2019. 3 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 4 Removal of accelerated depreciation of $127 million related to plant closures and disposals for the nine months ended June 29, 2024; $14 million related to restructuring and related charges and $24 million related to plant closures and disposals for the nine months ended July 1, 2023; $19 million related to restructuring and related charges and $114 million related to plant closures and disposals for the twelve months ended September 30, 2023; and $5 million related to restructuring and related charges and $217 million related to plant closures and disposals for the twelve months ended June 29, 2024 as they are already included in depreciation expense. Fiscal Year Ended Twelve Months Ended June 29, 2024 July 1, 2023 September 30, 2023 June 29, 2024 Net income (loss) 458$ (206)$ (649)$ 15$ Less: Interest income (60) (22) (30) (68) Add: Interest expense 351 262 355 444 Add/(Less): Income tax expense (benefit) 159 84 (29) 46 Add: Depreciation 902 762 1,100 1,240 Add: Amortization1 171 174 229 226 EBITDA 1,981$ 1,054$ 976$ 1,903$ Adjustments to EBITDA: Less: Production facilities fire insurance proceeds, net of costs2 (22)$ (79)$ (75)$ (18)$ Add: Restructuring and related charges 31 93 124 62 Add: Plant closures 155 107 322 370 Add: Legal contingency accruals 174 38 156 292 Add: The Netherlands facility3 83 - - 83 Add: Goodwill impairment - 448 781 333 Less: China plant relocation remuneration - - (19) (19) Add: Product line discontinuation - - 17 17 Less: Depreciation included in EBITDA adjustments4 (127) (38) (133) (222) Total Adjusted EBITDA 2,275$ 1,623$ 2,149$ 2,801$ Total gross debt $ 9,506 $ 11,021 Less: Cash and cash equivalents (573) (2,569) Less: Short-term investments (15) (13) Total net debt 8,918$ 8,439$ Ratio Calculations: Gross debt/EBITDA 9.7x 5.8x Net debt/EBITDA 9.1x 4.4x Gross debt/Adjusted EBITDA 4.4x 3.9x Net debt/Adjusted EBITDA 4.1x 3.0x Nine Months Ended EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) TYSON FOODS, INC. November 12, 2024 28

 

1 Excludes the amortization of debt issuance and debt discount expense of $5 million for the six months ended March 30, 2024 and April 1, 2023, and $10 million for the fiscal year ended September 30, 2023 and the twelve months ended March 30, 2024 as it is included in interest expense. 2 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of fiscal 2019. 3 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 4 Removal of accelerated depreciation of $92 million related to plant closures and disposals for the six months ended March 30, 2024; $10 million related to restructuring and related charges and $9 million related to plant closures and disposals for the six months ended April 1, 2023; $19 million related to restructuring and related charges and $114 million related to plant closures and disposals for the twelve months ended September 30, 2023; and $9 million related to restructuring and related charges and $197 million related to plant closures and disposals for the twelve months ended March 30, 2024 as they are already included in depreciation expense. Fiscal Year Ended Twelve Months Ended March 30, 2024 April 1, 2023 September 30, 2023 March 30, 2024 Net income (loss) 262$ 229$ (649)$ (616)$ Less: Interest income (24) (16) (30) (38) Add: Interest expense 216 173 355 398 Add/(Less): Income tax expense (benefit) 102 75 (29) (2) Add: Depreciation 602 500 1,100 1,202 Add: Amortization1 115 115 229 229 EBITDA 1,273$ 1,076$ 976$ 1,173$ Adjustments to EBITDA: Less: Production facilities fire insurance proceeds, net of costs2 (27)$ (35)$ (75)$ (67)$ Add: Restructuring and related charges 31 43 124 112 Add: Plant closures 114 92 322 344 Add: Legal contingency accruals 73 - 156 229 Add: Goodwill impairment - - 781 781 Less: China plant relocation remuneration - - (19) (19) Add:The Netherlands facility3 80 - - 80 Add: Product line discontinuation - - 17 17 Less: Depreciation included in EBITDA adjustments4 (92) (19) (133) (206) Total Adjusted EBITDA 1,452$ 1,157$ 2,149$ 2,444$ Total gross debt $ 9,506 $ 10,960 Less: Cash and cash equivalents (573) (2,182) Less: Short-term investments (15) (16) Total net debt 8,918$ 8,762$ Ratio Calculations: Gross debt/EBITDA 9.7x 9.3x Net debt/EBITDA 9.1x 7.5x Gross debt/Adjusted EBITDA 4.4x 4.5x Net debt/Adjusted EBITDA 4.1x 3.6x Six Months Ended EBITDA and Adjusted EBITDA Non-GAAP Reconciliations $ in millions, except per share data (Unaudited) TYSON FOODS, INC. November 12, 2024 29

 

1 Excludes the amortization of debt issuance and debt discount expense of $2 million for the three months ended December 30, 2023 and December 31, 2022, and $10 million for the fiscal year ended September 30, 2023 and the twelve months ended December 30, 2023 as it is included in interest expense.​ 2 Relates to fires at production facilities in Chicken in the fourth quarter of fiscal 2021 and Beef in the fourth quarter of fiscal 2019. 3 Relates to a fire at our production facility in the Netherlands in the first quarter of fiscal 2024 and subsequent decision to sell the facility. 4 Removal of accelerated depreciation of $60 million related to plant closures and disposals for the three months ended December 30, 2023; $6 million related to restructuring and related charges for the three months ended December 31, 2022; $19 million related to restructuring and related charges and $114 million related to plant closures and disposals for the twelve months ended September 30, 2023; and $13 million related to restructur ing and related charges and $174 million related to plant closures and disposals for the twelve months ended December 30, 2023 as they are already included in depreciation expense. Fiscal Year Ended Twelve Months Ended December 30,2023 December 31, 2022 September 30, 2023 December 30,2023 Net income (loss) 114$ 320$ (649)$ (855)$ Less: Interest income (10) (9) (30) (31) Add: Interest expense 105 84 355 376 Add/(Less): Income tax expense (benefit) 47 114 (29) (96) Add: Depreciation 312 243 1,100 1,169 Add: Amortization1 59 58 229 230 EBITDA 627$ 810$ 976$ 793$ Adjustments to EBITDA: Less: Production facilities fire insurance proceeds, net of costs2 (27)$ (35)$ (75)$ (67)$ Add: Restructuring and related charges 30 21 124 133 Add: Plant closures 75 - 322 397 Add: Legal contingency accruals 73 - 156 229 Add: The Netherlands facility3 26 - - 26 Add: Goodwill impairment - - 781 781 Less: China plant relocation remuneration - - (19) (19) Add: Product line discontinuation - - 17 17 Less: Depreciation included in EBITDA adjustments4 (60) (6) (133) (187) Total Adjusted EBITDA 744$ 790$ 2,149$ 2,103$ Total gross debt $ 9,506 $ 9,678 Less: Cash and cash equivalents (573) (1,484) Less: Short-term investments (15) (15) Total net debt 8,918$ 8,179$ Ratio Calculations: Gross debt/EBITDA 9.7x 12.2x Net debt/EBITDA 9.1x 10.3x Gross debt/Adjusted EBITDA 4.4x 4.6x Net debt/Adjusted EBITDA 4.1x 3.9x Three Months Ended EBITDA and Adjusted EBITDA Non-GAAP Reconciliations TYSON FOODS, INC. November 12, 2024 30 $ in millions, except per share data (Unaudited)

 

 

 

 

September 28, 2024 September 30, 2023 Cash Provided by Operating Activities 2,590$ 1,752$ Additions to property, plant and equipment (1,132) (1,939) Free cash flow 1,458$ (187)$ Twelve Months Ended Free Cash Flow Non-GAAP Reconciliation $ in millions (Unaudited) TYSON FOODS, INC. November 12, 2024 34