Tyson has been gracious enough to kick off this conference for the last 19 years. As CEO since 2021, Donnie King has led Tyson out of an unprecedented operating environment, leveraged his four decades of industry experience to manage through a challenging environment across proteins, and once again driven a turnaround in its chicken operations, building on a strong track record of superior performance. Donnie's joined by John R. Tyson, who has been with the company since 2019 and spent the last two and a half years enhancing the leadership team as CFO. Over that time, John has continued to manage Tyson's balance sheet through the lens of financial discipline, opportunistic capital allocation, and cash returns to shareholders against an evolving operating backdrop. Donnie, John, thank you so much for both being here today. Thank you for having me. Morning. Thanks for having us. I guess I wanted to start it off this way. The company has taken a number of actions over the last 12 months or so to improve performance across segments. Can you reflect on those changes that you've made, what those have contributed, and where there are additional actions that you're considering? Sure. Let me start off by saying good morning, everyone, and thanks for having us again. I didn't realize it was 19 years, but so good morning. One of the comments I make is what a difference a year makes. If I think about at least the first half of this year, we are fundamentally a stronger company. And fundamentally is talking about all the fundamentals of the business, controlling the controllables operational excellence. We've done things such as made pretty strategic network moves across our organization. We've closed six poultry plants, two case-ready beef plants, and we announced the closure of one of our more inefficient pork plants. But I would characterize it as back to the basics. And once again, we are seeing the benefits of our diverse portfolio across proteins, channels, categories, and eating occasions. And in this particular case, we're seeing tailwinds from chicken offset headwinds in beef. And if I could step into each one of the business, just really top line, they're all doing better than they did a year ago. And so very proud of that, very proud of the execution from our team. Now, I would also hurry on to tell you that the mindset is continuous improvement, and we're certainly engaged in that. But from a chicken standpoint, we talked about in November that we were going to make some moves, and we were going to make some changes and perform better. And we talked about that in terms of two-thirds of that would come from things like operational execution, it would come from the network optimization, and about a third of that would come from market tailwinds in chicken. We'll update that guidance as we move along. But the way we look at chicken right now, the grains have moderated, still elevated over pre-pandemic levels. Demand for chicken is solid. And as we think about our chicken business going forward, in the last quarter, made $325 million improvement. Very proud of that again, but much, much stronger chicken business. And I'm most excited about the fact that it's driven by execution and action and those type things. So that's the story as it relates to chicken prepared foods. We have three of the top 10 protein brands in food. Our brand health is good. Our share is strong. We're seeing some consumer dynamics. This bifurcated consumer is the way we've described it, where those on the lower end are making, in some cases, a move from branded to private label, and then in some cases, moving from food service into retail. The good news for Tyson is that we have an assortment across the various price points, so we meet the consumer wherever they are. If I go to beef, the progression of the cattle cycle continues. I don't know today when heifer retention will resume. What I can tell you is this: what we're looking for and what we think will be the drivers of that is, one, pasture conditions. And those are much improved from where they have been. That would be one sign. So that'd be a positive indicator. Interest rates are up. So borrowing power is going to be more expensive and tying up more working capital. So ranchers are looking at that, and I'd say that maybe you'd put in a headwind category. Grains have moderated, as I mentioned earlier, would be positive. And so we're closer today to heifer retention than we have been, but I can't predict exactly when that's going to occur in a meaningful way. What I can tell you about our beef business is we continue to value up into things like marinated meats and so forth, and then push those products into our prepared foods. I can tell you that the fundamentals in our beef business are very, very good. They continue to improve, a lot more database decision-making. And so we're excited about once this cycle kind of looks normal again, I'm excited about what we're going to be able to deliver from a beef standpoint. Our pork business is just about driving out inefficiency and waste. And I got to tell you, our pork business is performing better than it has in a long, long time, Tyson. And so very excited about that. have plenty of hogs around us, and demand for pork is very strong. Then we talked a little bit about our international business on our earnings call, and we're starting to see some scale in our international business. I think at the end of our 2023, we were $2.5 billion in sales. And we invested in seven assets over the last two or three years, which drove a lot of capital allocation. And so from that standpoint, we're in a point now where we're valuing up, or we're actually filling up those assets. And so we like our chances. So we're in a better place overall than we were a year ago or two years ago. You talked on the earnings call on the chicken business about all the work that you've done, but still having more work to do. So can you kind of frame where you still see opportunities in that business to continue to improve performance, maybe where performance is now versus where it's been or historical? Any ways to think about that? Sure. And John, you add into this if you'd like. But I'll try to tell you, and it's very simple in terms of the approach that we've had in chicken. Simple works really well for us. So we had essentially three or four priorities going into the year, which are core in my mind to success in chicken. Our live operations, we've had issues with our genetics and with our performance in live and capacity utilization and a number of things like that. We made the decision several months ago to move from a No Antibiotics Ever for the Tyson brand to a No Antibiotics Important to Human Medicine. So we made that switch. We've seen a number of benefits from that, the livability, the performance of the animal in terms of feed conversion. But probably most importantly, and many of you will understand this, is the uniformity of that flock that we get into a plant and how that works through trying to service customers who need different sizes of product and so forth. And so we really like that. So our live performance has really come a long way. And I know industry data talks a lot about hatch and livability and how that kind of has a lid on or muting supply potential. Our supply, our genetics, based on what we see in public data around hatch and livability, we are significantly better than that. And we've not been able to say that in a long time. In terms of our plant operations, it's fundamentals. It's labor, it's yield, it's utilization. And then with a mindset of always valuing up, we've been able to do that. That's been a bit of our legacy as a company through the years. And we're back on track with doing those type things. You may recall in 2023, we had some demand signals that created an oversupply for us. And in Q1, Q2 of 2023, we had to clean that up. And we've done that. But as we have gone through the first half of our fiscal year, we're seeing the benefits of that supply-demand balance that we have. We've been able to service our customers in a much, much better way and at the same time, lowering inventory and working capital and that type thing. And we continue to invest. And behind our Tyson brand in chicken, we are the number one brand in retail, and we are the number one brand in food service. And that's our sweet spot. That's where we want to grow. That's where we choose to play. Anything? I think that was a good summary, Donnie. If I may just add a couple of things just to put some numbers around what we're talking about. Last Monday, we released earnings. We beat expectations and raised guidance. That was driven principally by our chicken business. Donnie's talking about live operations. Based on data that we see, we are beating and better than our competition there, which we see as being good for our business. If we think about from an operational standpoint, we announced last year a bunch of strategic moves, discussed that being well north of $200 million in terms of the year-over-year improvement. I think we've realized that today. The question we get a lot is, "Okay, how much more room do you have to go?" We haven't broken that out yet, but safe to say we feel like there is headroom to continue improving our operations. Why is that relevant? I think the question we get a lot from investors is, "Hey, what more can chicken do?" or "What is going on in the chicken environment that potentially offsets some of what's going on in the beef environment?" I think we see I think we see today the industry trying to supply more birds, but there's been a little bit of a bump in our heads against the ceiling because of some of the hatch and livability issues. So I think we would see that as being constructive for chicken margins. Anyone in this room actually, there's probably people in this room that could guess better than we can about where things are going to go from a grain standpoint. But safe to say, I think consensus projections now would say that the environment continues to get better as each week and month goes on. So I think all in all, we're feeling optimistic about the chicken business. You talked about some of the productivity issues that are certainly constructive for the business. Can you kind of dive into that a little bit more? What's causing that? Is there a path to recovery? It feels like we've been dealing with this now for several years in some shape or form. So how is this different than that or the same as that? And what's the pathway forward? Sure. I think the thing that I guess the punchline is that companies are looking and projecting what forecasted head and weight is going to be. To your point, we have underdelivered on that. Yes, you see today an environment with more placements and a little bit heavier bird weights, but net in terms of overall supply in chicken, it's relatively flat. A number of things from disease to in terms of hatchability, mortality of pullets, mortality of hens, hatchability, and even with some disease livability issues in the meat birds, the broilers. I don't know that anybody has a real answer for that from an industry standpoint. I'll let someone else try to explain that. I can tell you that from a hatchability perspective, we said on the call we were up 260 basis points. And so we're in pretty good shape from a hatch standpoint. Livability, with some of the things that we changed from no antibiotics ever to NAIHM, that protocol, we're seeing greater livability and uniformity, as I've talked about before. But it's just always a combination of things that is lurking in that, partly genetics, partly could be husbandry on the farm. I know that we had to go back and do some really basic things in our live production operations and just get back to the blocking and tackling of the business. And we've been able to do that. And so we like our chances relative to that. We have more room to go, but we have good plans in place to attack that. You talked about your expectations for chicken production this year to come in below the 1% growth that the USDA has been or at the time was projecting. So obviously, a constrained supply environment. Can you talk a little bit more about what you're seeing in terms of demand shifting between proteins or demand across proteins, I guess? You talked a little bit about a bifurcated consumer and prepared. If I rewind a year ago, I think there was an expectation that we were going to see demand shift from beef to chicken that hadn't quite played out at that time. So how does the environment now compare to where we were and maybe where we're going? Maybe I can take that one. A couple of things we've discussed and maybe some just additional observations. We talked a little bit last week about features and retail driving pork and chicken. I think we see that as being supportive for demand in those proteins. Net overall, I think the total protein mix doesn't change over year-to-year. I don't think we're meaning to make any bold assertions around the composition of kind of the protein mix. I think what we do see is as the price gaps start to get wider between these proteins, chicken and pork should stand to benefit. I think we've already started to see that. It should probably continue. Retail features is one area where you can see the kind of activity. Other places that we see it show up is we have a good food service business. We start to project into the summer and in the wintertime, customers planning for next year, what's going to be the composition? What are they putting on their menus to drive volume? And I think we see that as continuing to be positive for chicken and for pork. I know you said that there are others that maybe have a different or clearer lens, so to speak, on the feed cost outlook. But when you've approached the outlook for your business for this year and you think about maybe the next 12 months, I know we're kind of early in the planning season here. How do you approach the guidance from a feed cost perspective? And kind of what are your assumptions about feed costs in terms of becoming more of a tailwind, more of a headwind going forward? I think we try to not get into market calls, but typically cast a projection kind of wherever things are at the point in time where we're talking to the markets or building our outlook. I think it's safe to say that if you were to look through some historical norms and we project where we're going to be from a stocks-to-use standpoint, we project I mean, even though we're still early in the planting season, I think everyone's comfortable and confident about where production is headed this year. So it's possible that we're getting back into those pre-COVID levels or 10 years ago where corn was trading $4 minus as compared to where we were a year ago, above $6. So I think that's probably the consensus opinion. That's kind of how we operate. But I think what I want our investors to take away is that we manage our portfolio from a commercial standpoint in terms of the contracts we have. We try to manage our mix so that we can win no matter if it's high prices or low prices. I think since a year ago, we've made a lot of good moves to get our poultry business in balance specifically. And so we're not betting on the up or down either way, but really focused on what we can do for our customers so that they're able to get chicken at great value for their customers. And maybe just to wrap up on the chicken side, it seems like between the external environment of tight supplies, tight beef, and how that benefits chicken demand, feed cost outlook, your internal dynamics, and the ability to continue to improve that on the chicken side, it feels like there's a pretty good runway here. I think investors generally view the chicken cycle as shorter in duration than obviously some of the others given the life cycles. Does it feel like without asking you to give 2025 guidance or anything like that, does it feel like your chicken business is set up for a sustained run here that has a little bit more durability to it just given the sets of external and internal dynamics? I think the best way we can answer that question today is we raised the outlook for the back half of the year. That implies that we are exiting the year equal to and better or better than the way we started the year. And so I think it would be reasonable to extrapolate that based on what we know today. But I don't think we need to make any assertions about nine months out from now just because we've seen things turn in a short period of time. Even some of the dynamics that we've seen in the first six months of this year may have been easy to look back and say, "Okay, that makes a lot of sense." But I think we had a more cautious outlook when we began the year just because there's a lot of unpredictability in the business. If I could add to that, Andrew, the thing that I'm looking at relative to our chicken business, we've talked about grains moderating and what they do going forward. I mean, everybody here sees all that information, but certainly not pre-COVID levels, but certainly moderated from where it's been. Demand for chicken is solid across our portfolio. And execution is better, and it's been in some time. And as I mentioned earlier, we are fundamentally a much better chicken company. And so very proud of that, what that can do not only for the balance of the year, but as we move into 2025, 2026, and so on. Okay. That makes a lot of sense. If I shift gears to beef, you've talked about some of the uncertainties in the outlook, not seeing herd rebuilding yet, some of the pros and cons. I guess, can you just maybe dig in a little deeper in terms of what it might take to get folks over the hump or get the supply chain over the hump to start to do that and kind of how you think that might play out? Sure. I touched on this earlier, but in terms of what I think what ranchers are looking for, feedlots are looking for is going to be better pasture conditions. That's number one on the list. That is much improved. So that's very positive in terms of sentiment. In terms of grain costs, as I said earlier, as it relates to chicken, and you could put pork in this as well, feed costs continue to moderate. I mean, that's positive. The unknown around well, interest rates are known, and that's a bit of a headwind. But we're much closer. There's a lot of people that would speculate in terms of when to do that. We choose to talk about it in terms of what the data says. And we see nothing that says that heifer retention is taking place in a meaningful way. Roughly 41% of those heifers are going to a processing plant. Historical levels are somewhere around 35%. So there's still some room there. And so that's what we're looking for. That's what we see from that perspective. But cattle supplies are tight, and compression continues in terms of the spread. And I guess in the context of some of the uncertainties that exist in the beef market, can you maybe frame how you think about getting to the high end and the low end of the guidance range for this year? Obviously, pretty divergent back half implications just based on those ranges. So can you talk about some of the sets of circumstances that would drive you to one versus the other? Yeah. I think when we put the guidance together, I mean, we do some pretty in our beef business specifically, we make some assumptions around, "Here's the range of outcomes on cattle prices. Here are the range of outcomes in terms of cutout values and drop values." And you just put that plus minus either way. I think where we've started the year so far puts us right roughly year to date in the middle of that range. And so in a world where you've heard us already say today about how we try to project market calls, I think that's the easiest way for us to explain where we sit with the guidance today. But if you follow Tyson, if you follow the beef industry, it's easier, there's data out there to track what margins are doing for the industry. So we do make investments to try to make more stable the earnings and more resilient in our beef business, invested pretty significantly in our case-ready business. We're always trying to figure out how to value up the drop and do things in kind of the byproducts business. That is kind of a focus, I think, for us. And so we'll see how things play out. But we're going toward a point in time with tighter cattle supplies, and that will continue to influence the beef business. I know that controlling the controllables has been a key focus, certainly for the company. In the beef business specifically, and you talk about trying to add value and various things, I mean, what are some of the internal actions that are available to try to improve or recover some of the margin in what is a challenging operating environment? Sure. I think the answer is largely in your question in that it's labor management, it's yield, it's utilization. The uncertainty that we have around here is the volatility in terms of cattle availability. And for example, based on futures, in Q1, we had a pretty significant headwind in LC and FC. Then Q2, it was a bit of a tailwind. And so it's very fluid in terms of that. But what we do control in terms of our execution and those things that anyone in here in the beef business would understand is that doing the fundamentals well, executing with excellence, that's where the money can be and waste can be removed from your operation. Is it going to offset some of the volatility in beef, in the cattle cycle? Probably not completely. But we are not missing this opportunity to get to be a better beef company, a better company overall, but just execution. And there's things such as, yes, we are valuing up some of the portfolio, and we're looking for every opportunity to do that across our business. But at the same time, we got a consumer that in some cases is moving from muscle meat to grinds. And demand for grinds for us in beef is very strong. And so we like that. We're still taking care of the consumer relative to that. But the volatility around the cattle cycle, we really do not control. But there's a whole lot that we do. And our beef team is waking up every day looking to wring out waste from our business. Maybe along those lines, you've made changes to the footprint in chicken, now in pork as well. Can you maybe compare and contrast why that makes sense versus whether or not you would make a change on the beef side? Are there similarities and differences? I guess, what's the decision set? Yeah. I would say this from a beef standpoint, we're well capitalized in beef. Simply said, our beef locations, processing plants are in places where cattle is available. So we like that. Our beef plants have scale. They're efficient. They're competitive from a cost structure perspective. And if I contrast that with the locations in which we've made some really tough decisions on, I think the common denominators around those locations are this. They were typically small in scale, in some cases a single shift. In many cases, or all cases, they were uncompetitive from a cost perspective. They may have been out of position from a network geographically from that perspective. And then in every case, in order to try to make them competitive, the capital required to do that was onerous in terms of doing that and getting a return on that versus simply doing what we did where we moved those sales and those supply of animals from a less efficient operation to a more efficient operation. We will virtually move 100% of those sales into different locations with a better cost structure, and in many cases with a better mix. So I guess as we wrap up on the beef side, if I go back historically, there was a point at which you raised the long-term kind of margin guidance. I know you're guiding this year on profit dollars, but% margin guidance, do you feel like that is still an achievable or an appropriate kind of long-term margin range? Maybe any puts or takes that would change or not change your view there? So I would say when we've talked about long-term guidance in the past, we talk about a normalized range, so kind of an average over a period of time. I think what we see today is there's a lot of movement in the industry. I think when we project into the future, we'll be trying to understand, "Hey, what's the next herd size rebuild? What does that do for our beef business? And what's going on in terms of how are our assets and our performance?" I think today, we don't mean to make any revisions to or adjustments to what we think a normalized number is. But I would expect in the next as we go through, call it maybe 2024 or 2025, at some point in time, we'll probably relook at or we relook at on a pretty regular basis what we think the long-term outlook is. If we determine we need to make any revisions, we could do that, I'm sure. Okay. Moving to Prepared Foods, I think one of the areas of focus coming out of the most recent earnings call was the dynamics that you called out between 3Q and 4Q. And part of that was specific to Prepared, whether it was investments. You made some comments on demand. Can you kind of frame that dynamic over the back half of the year in terms of how you're thinking about the cadence and the drivers there? So I'm glad you asked this question. We've spent a lot of time on chicken and beef. But when we think about the long-term story here at Tyson, what we're talking about is our Prepared Foods business and parts of our chicken business where we're evolving to a more stable, higher margin value-added part of the portfolio. And I'm hopeful that as we go through the next however many few years, we start to see the power of the investments we've made in our brands and some of our value-added capabilities really come to bear. Your question was about the discussion we had last week. And I think that we did make some comments last week around what's going on from what the consumer's doing. We also talked about the shape of the year. I think what got lost in that commentary was the most important point we wanted to make about not just our Prepared Foods business, but about our entire portfolio because there's so much discussion in the consumer and the food environment today about what's going on with consumer behavior. Our portfolio, we play if consumers are eating at home or at restaurants, no matter where they are in the value chain, we stand to be profitable. And we can make money no matter the consumer backdrop. And I think that that is what got lost at the kind of end of the sentence when we were talking last week about what's going on. So just want to make sure we get to emphasize that. About the shape of the year, I think that's the other important question. So typically, our Prepared Foods business has seen a seasonal trend kind of the first half of the year, Q3, Q4, and stepping down. We got caught up in some commentary last week talking about Q3 could be worse than Q4. I think what I would like our investors to take away is two things. One, it is possible not just for our total business. And the reason driving that is we talked about Prepared Foods a little bit. In that business, we've got just from a timing standpoint, some startup costs in our new bacon plant. We're getting hit by some raw material costs from a timing standpoint. So that could be a little bit counter-seasonal for the back half of the year. But the comment was really been about Total Tyson. The other two things influencing that would be pork seasonality, which our Q3 is always the softest quarter for pork or has been historically. We've talked a lot about chicken already. So we're talking about chicken. If we continue to see the external environment evolve, it's possible that the mix on that could favor a little bit Q4. So that's what we were talking about when we got the question last week. Perfect. If we kind of zoom out on Prepared Foods, how do the operational improvement opportunities compare? I mean, is there similar opportunity as you've executed on in some of the more commodity businesses? You have new leadership of that business as well. Can you talk about how you see some of those opportunities shaping up over the next couple of years? Sure. I'll start off with across all businesses, we have literally looked at everything. We've turned over every rock in every business. Within Prepared Foods, I talked about the fact that we have 3 of the top 10 protein brands in food. And that is true. They're healthy. They're strong. Where we're working today, and we've done some structural changes to put some more emphasis on this in Prepared Foods specifically. But I would say that Prepared is a little bit behind what we've been able to do in chicken and beef and in pork. But based on the moves that we've made, I would see us catching up really quickly, which none of that means that to imply that we're going to be worse than what we have historically been. What I'm describing to you is a new opportunity and a new waste being eliminated from our system all through supply chain in terms of where we manufacture, what is the capacity utilization, the yields, the labors, all those things you would see in a typically commodity-oriented business. We're bringing that into our CPG business, which is our Prepared Foods business. And I like what we're going to be able to do there. We are still relatively early in terms of that. I'm not prepared to tell you what a number is, but we're looking to take all the waste and inefficiency out of our Prepared business. And there is opportunity there. And so we're excited about that. And we're excited about what that implies then for our Prepared Foods business as we move forward. I think in the way that I would just put some numbers to that is our long-term we've talked about long-term outlook or normalized outlook as being low, double-digit return on sales. I think we feel good about that still. That is based on our footprint and the categories that we're in. We haven't delivered on that in the recent years. So as we get to 2025 or start talking about 2025, I think we'll start to provide shape as to what that pathway is to having the sustainable low, double-digit returns. This is not a 2025 guidance comment. You haven't put numbers around productivity or the shape of that. Certainly, over time, is that in and of itself enough to get you back to kind of the long-term guidance? Are there other external or other factors that would need to take place for you to bridge back to that level over maybe a multi-year period? I think, considering over a multi-year period, the path there is a combination of operational efficiencies and supply chain moves as well as opportunities for growth in our existing footprint. Okay. We just have a couple of minutes left. I wanted to talk about capital allocation. You've been managing the balance sheet very tightly in this environment. You've talked about getting the leverage back to your targets. I guess, what is the pathway to getting there? What's the timeline to which you expect the balance sheet to evolve in that way? Yep. So I think a few things to take away when we think about capital allocation in the balance sheet. First, when we talk about priorities, we've been consistent for a long time. We're focused on being in good financial position. For us, that means getting our leverage in shape that will come from getting our operations back in order, which we've seen the year-over-year improvement. We got asked the question last week, "Hey, what's your projected leverage number at the end of fiscal 2024?" I don't think we want to give a number on that specifically. But safe to say we're trending sequentially in the right direction. That's really driven by the performance improvement in the business. And I think the other thing that we said last week is we reaffirmed our confidence that our focus on free cash flow and being sufficient to cover the dividend. I think we've delivered on that. We've managed our working capital to release some cash, especially inventory in our chicken and Prepared business. And we have also moderated the CapEx. We've talked about this a little bit, Andrew, but the question we've got around CapEx is, "Hey, what's the long-term normalized number?" We feel that is around $1.25 billion plus or minus depending on the year. I think if you were to look back historically, we've run just a little bit north of $1 billion has probably been the average. I think the way that we get to that $1.25, again, plus minus is looking at our historical norms, looking at our footprint, what's required from an ongoing maintenance standpoint, and factoring for some inflation and things like that. But I think overall, the story for us is leverage is trending down. We'll be free cash flow positive to cover the dividend. And we've got momentum in our business. Maybe just to wrap up, when you get to a position maybe where you can start to be a little bit more selective on growth capital allocation, you've talked about some of the priorities through the conversation through the different business segments. But I guess what gets you excited kind of in rank order, I guess, of the biggest opportunities in the medium term as we start to have those conversations, which would, I guess, be incremental to the one-year? Yeah. I don't want to rank order it. But, safe to say, and I think our recent track record has demonstrated this. Investing in the most attractive parts of our Prepared Foods business, investing in the value-added parts of our chicken business, and investing in countries where we see great growth opportunity outside the U.S., those are really the priorities. And that's what we've done the last few years. We built new plants in Asia. We built a new bacon facility in Kentucky, new value-added chicken facility in Danville, Virginia. So I think we feel good about the investments that we've made. And I say recent history is probably predictive of where we will continue to invest. Great. We'll go ahead and end it there. Thank you both so much for being with us today. We really appreciate it. Thank you. Thank you. Thank you, everyone. Thanks so much.