TSN » Topics » Overview

This excerpt taken from the TSN 10-Q filed Aug 8, 2007.

Overview

 

Tyson Foods is the world’s largest meat protein company and the second largest food production company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the third quarter of fiscal 2007 were $111 million or $0.31 per diluted share, compared to a loss of $52 million or $0.15 per diluted share in the same period last year. Earnings for the nine months of fiscal 2007 were $236 million or $0.66 per diluted share, compared to a loss of $140 million or $0.41 per diluted share in the same period last year. Operating loss for the nine months of fiscal 2006 include charges of $59 million, or $0.11 per diluted share, related to beef and prepared foods plant closings.

 

Sales and operating income for the nine months of fiscal 2007 increased $929 million and $569 million, respectively, compared to the same period last year, primarily driven by higher average sales prices and improved operating cost efficiencies. Chicken operating results improved despite substantial increases in grain costs, which were partially offset by the Company’s commodity risk management activities related to its grain purchases. The Company’s Beef and Pork operating results also improved, primarily driven by increased average sales prices, prior year plant rationalizations, operating cost efficiencies and yield improvements. Prepared Foods operating results were also positively impacted by increased average sales prices. The Company continued to realize cost savings in the third quarter of fiscal 2007 related to its Cost Management Initiative.

 

This excerpt taken from the TSN 10-Q filed May 9, 2007.

Overview

 

Tyson Foods is the world’s largest meat protein company and the second largest food production company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s operations are conducted in five segments: Chicken, Beef, Pork, Prepared Foods and Other. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the second quarter of fiscal 2007 were $68 million or $0.19 per diluted share, compared to a loss of $127 million or $0.37 per diluted share in the same period last year. Earnings for the six months of fiscal 2007 were $125 million or $0.35 per diluted share, compared to a loss of $88 million or $0.26 per diluted share in the same period last year. Operating loss for the second quarter and six months of fiscal 2006 include charges of $59 million, or $0.11 per diluted share related to beef and prepared foods plant closings.

 

Sales and operating income for the six months of fiscal 2007 increased $354 million and $335 million, respectively, compared to the same period last year, primarily driven by higher average sales prices, increased sales volumes and improved operating efficiencies. Chicken segment operating results improved despite substantial increases in grain costs, which were partially offset by the Company’s commodity risk management activities related to its grain purchases. The Company’s Beef and Pork operating results also improved, primarily driven by improved conversion costs due to prior year plant rationalizations and operating efficiencies. In addition to increased average sales prices, the Prepared Foods operating results were also positively impacted by lower raw material costs and product mix improvements. The Company also continued to realize cost savings in the second quarter of fiscal 2007 related to its Cost Management Initiative.

 

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This excerpt taken from the TSN 10-Q filed Feb 8, 2007.

Overview

 

Tyson Foods is the world’s largest meat protein company and the second largest food production company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s operations are conducted in five segments: Chicken, Beef, Pork, Prepared Foods and Other. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the first quarter of fiscal 2007 were $57 million, or $0.16 per diluted share, compared to $39 million, or $0.11 per diluted share, for the first quarter of fiscal 2006.

 

Operations for the first quarter of fiscal 2007 were positively impacted by improved operating efficiencies and lower live costs in the Company’s Beef and Pork segments and lower raw material costs in the Prepared Foods segment. Additionally, operating income benefited from lower energy costs and higher sales volumes in all protein segments. The Chicken segment was positively impacted by realized and unrealized net gains of $36 million as compared to realized and unrealized net losses of less than $1 million recorded in the same period last year from the Company’s commodity risk management activities related to its grain purchases. The first quarter of fiscal 2007 also includes savings realized from the Company’s Cost Management Initiative implemented in the fourth quarter of fiscal 2006. Additionally, in the first quarter of fiscal 2007, the Company generated strong cash flow which allowed it to reduce its net debt $268 million to $2.96 billion.

 

This excerpt taken from the TSN 10-K filed Dec 13, 2006.

Overview

 

Tyson Foods is the world’s largest meat protein company and the second largest food production company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s operations are conducted in five segments: Chicken, Beef, Pork, Prepared Foods and Other. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

The Company faced very challenging operating conditions in fiscal 2006. Demand pressures caused mainly by outbreaks of avian influenza, primarily in Europe and Asia, Hurricane Katrina and other export market disruptions in the Company’s Chicken and Beef segments, led to an oversupply of proteins worldwide and negatively affected the average sales prices and operating results of each of the Company’s protein segments. Operations also were affected negatively by higher energy costs, and significant operating margin reductions at the Company’s operations in Canada and Mexico.

 

Net loss for fiscal 2006 was $196 million, or $0.58 per diluted share, compared to earnings of $372 million, or $1.04 per diluted share, in fiscal 2005. Pretax loss for fiscal 2006 includes $63 million of costs related to beef, prepared foods and poultry plant closings and $19 million of charges related to the Company’s $200 million cost reduction initiative and other business consolidation efforts. These charges include severance expenses, product rationalization costs and related intangible asset impairment expenses. Additionally, the Company completed a review of its tax account balances, and as a result, recorded a charge in the fourth quarter of fiscal 2006 of approximately $15 million. Also, net loss for fiscal 2006 includes a charge of $5 million, or $0.02 per diluted share, related to the cumulative effect of a change in accounting principle due to the Company’s adoption of Financial Accounting Standards Board (FASB) Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations,” an interpretation of FASB Statement No. 143. Combined, these items increased fiscal 2006 diluted loss per share by $0.21.

 

Pretax earnings for fiscal 2005 include $33 million of costs related to a legal settlement involving the Company’s live swine operations, $14 million of costs for poultry and prepared foods plant closings, $8 million of losses related to Hurricane Katrina, $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. Net income in fiscal 2005 includes a non-recurring income tax net benefit of $15 million. The net benefit includes the reversal of tax reserves, partially offset by an income tax charge related to the repatriation of foreign income. The effective tax rate of the Company was affected further by the federal income tax effect of the Medicare Part D subsidy in fiscal 2005 of $55 million because this amount is not subject to federal income tax. Combined, these items increased fiscal 2005 diluted earnings per share by $0.03.

 

The Company's accounting cycle resulted in a 52-week year for fiscal years 2006 and 2005, and a 53-week year for fiscal 2004.

 

This excerpt taken from the TSN 10-Q filed Aug 10, 2006.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, protein supplies, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

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Net loss for the third quarter of fiscal 2006 was $52 million, or $0.15 per diluted share, compared to earnings of $131 million, or $0.36 per diluted share, for the third quarter of fiscal 2005. Pretax earnings for the third quarter of fiscal 2005 included $33 million of costs related to a legal settlement involving the Company’s live swine operations and $10 million related to poultry plant closings.

 

Net loss for the nine months of fiscal 2006 was $140 million, or $0.41 per diluted share, compared to earnings of $255 million, or $0.71 per diluted share, for the nine months of fiscal 2005. Pretax loss for the nine months of fiscal 2006 included $45 million of costs related to beef plant closings and $14 million related to prepared foods plant closings. Pretax earnings for the nine months of fiscal 2005 included $33 million of costs related to a legal settlement involving the Company’s live swine operations and $15 million of costs related to poultry and prepared foods plant closings, partially offset by $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc.

 

The Company’s Beef, Pork and Prepared Foods segments’ operating results for the third quarter of fiscal 2006 improved $126 million over the second quarter, excluding plant closing charges of $59 million recorded in the second quarter of fiscal 2006. However, as anticipated, the Company continued to face challenging operating conditions in the third quarter of fiscal 2006. The oversupply of proteins, as well as higher energy costs, negatively impacted the operating results of each of the Company’s segments.

 

Chicken and Beef sales volumes increased 7.0% and 6.3%, respectively, as compared to the same quarter last year, however, these improvements were more than offset by lower average sales prices, resulting in decreased sales and operating losses for both segments. The Chicken segment continued to be negatively impacted by low leg quarter pricing and increased grain costs. Domestically, Beef margins improved, but the Company’s Lakeside operation was adversely effected by tighter cattle supplies, operational inefficiencies and the stronger Canadian dollar value against the U.S. dollar.

 

Management’s primary goal during this difficult operating environment is to return the Company to profitability. One of the measures being taken to achieve this goal is to manage and reduce costs. In May 2006, the Company embarked on a plan to reduce costs by approximately $110 million. After reviewing all aspects of the Company’s business, as well as suggestions from team members, approximately $200 million of cost reduction initiatives were identified, exceeding the Company’s original goal. About half of that is expected to be divided equally among consulting and professional fees, sales and marketing. The remaining $100 million is expected to be divided equally between staffing costs and other expenses. Virtually all of the cost reduction initiatives should be in place by the end of the calendar year, with savings beginning principally in fiscal 2007.

 

Although returning the Company to profitability is its primary short-term goal, management also remains focused on the following primary elements of its long-term strategy: creating more value-added products, improving operational efficiencies and expanding internationally.

 

Tax Account Balance Review

In connection with the Company’s renewal of certain leases, it noted differences in deferred tax liabilities related to temporary book to tax basis differences. At this time, the tax effect of the aggregate basis differences related to the leases is an understatement of approximately $22 million.

 

The Company initiated a review process to assess the adequacy of tax liabilities recorded for basis differences and all of its tax account balances, not just those related to its lease agreements. As this process continues, additional information, including additional temporary differences, positive or negative, may be discovered which could materially impact the preliminary differences indicated above. However, management does not believe this will have a material impact on the results of operations for the nine months ended July 1, 2006, or July 2, 2005. Once the review is completed, which is currently expected to be by October 31, 2006, the Company will make a final determination as to what, if any, adjustments should be recorded in the Company’s financial statements and in which period any such adjustments should be recorded.

 

 

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Goodwill

The Company tests goodwill for impairment by reporting unit on an annual basis during the fourth quarter each fiscal year. During the second quarter of fiscal 2006, in accordance with Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets,” the Company reviewed goodwill for impairment related to its Beef reporting unit. The review resulted from the significant adverse changes in the business climate of the Company’s Beef segment.

 

The Company forecasted cash flows to estimate the fair value of the Beef segment reporting unit based on reasonable and supportable assumptions. The forecast reflected improved results from current Beef reporting unit levels, which resulted in the fair value of the Beef reporting unit exceeding the carrying value. Therefore, the goodwill of the Beef reporting unit was not impaired. The improved forecasted results were mainly due to the expectations that beef export restrictions would abate, cattle supplies would increase and the overabundance of chicken and pork in the marketplace would lessen.

 

Although the Beef segment realized an operating loss in the third quarter of fiscal 2006, results improved significantly from the second quarter, therefore the Company did not review goodwill for impairment related to its Beef reporting unit in the third quarter of fiscal 2006, as it believed its second quarter analysis continued to be its best estimate of the value of goodwill and did not believe new impairment indicators were present. The Company will perform its annual testing of goodwill by reporting unit in the fourth quarter of fiscal 2006.

 

SFAS No. 123R

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R). The pronouncement requires companies to measure and recognize compensation expense for all share-based payments to employees, including grants of employee stock options, restricted stock and performance-based shares, in the financial statements based on the fair value at the date of the grant. In the first quarter of fiscal 2006, the Company adopted SFAS No. 123R using the modified prospective method. Under the modified prospective method, compensation cost will be recognized for all share-based payments granted after the adoption of SFAS No. 123R and for all awards granted to employees prior to the adoption date of SFAS No. 123R that remain unvested on the adoption date. Accordingly, no restatements were made to prior periods.

 

Prior to the adoption of SFAS No. 123R, the Company applied Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” in accounting for its employee stock compensation plans. Accordingly, no compensation expense was recognized for its stock option issuances as stock options are issued with an exercise price equal to the closing price at the date of grant. Also, prior to the adoption of SFAS No. 123R, the Company issued restricted stock and recorded the fair value of such awards as deferred compensation amortized over the vesting period.

 

The fair value of each option grant is established on the date of grant using the Black-Scholes option-pricing model for grants awarded prior to October 1, 2005, and a binomial lattice method for grants awarded subsequent to October 1, 2005. The change to the binomial lattice method was made to better reflect the exercise behavior of top management.

 

The Company recognized compensation expense (net of tax) in the third quarter and nine months of fiscal 2006 of $3 million and $7 million, respectively, related to stock options.

 

As of July 1, 2006, the Company had $41 million of total unrecognized compensation cost related to stock option plans that will be recognized over a weighted average period of 2.5 years and $46 million of total unrecognized compensation cost related to restricted stock awards that will be recognized over a weighted-average period of 1.7 years.

 

This excerpt taken from the TSN 10-Q filed May 19, 2006.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the first quarter of fiscal 2006 were $39 million, or $0.11 per diluted share, compared to $48 million, or $0.14 per diluted share, for the first quarter of fiscal 2005. Pretax earnings for the first quarter of fiscal 2005 included $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. and $3 million of costs related to a prepared foods plant closing.

 

Operations for the first quarter of fiscal 2006 benefited from decreased grain costs in the Chicken segment and lower raw material costs in the Prepared Foods segment. Additionally, losses from the Company’s commodity risk management activities related to grain purchases were less than $1 million in the first quarter of fiscal 2006, as compared to losses of $23 million recorded in the same period last year. First quarter fiscal 2006 earnings were negatively impacted by the Company’s Beef segment operating loss, primarily due to difficult industry market conditions both domestically and in Canada, as the higher average sales prices were more than offset by higher live cattle costs and increased freight expense. Additionally, operating income was negatively impacted by higher energy costs in each of the protein segments.

 

This excerpt taken from the TSN 10-Q filed May 11, 2006.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, protein supplies, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Net loss for the second quarter of fiscal 2006 was $(127) million, or $(0.37) per diluted share, compared to earnings of $76 million, or $0.21 per diluted share, for the second quarter of fiscal 2005. Pretax loss for the second quarter of fiscal 2006 included $45 million of costs related to beef plant closings and $14 million related to prepared foods plant closings. Pretax earnings for the second quarter of fiscal 2005 included $2 million related to poultry and prepared foods plant closings.

 

Net loss for the six months of fiscal 2006 was $(88) million, or $(0.26) per diluted share, compared to earnings of $124 million, or $0.35 per diluted share, for the six months of fiscal 2005. Pretax loss for the six months of fiscal 2006 included $45 million of costs related to beef plant closings and $14 million related to prepared foods plant closings. Pretax earnings for the six months of fiscal 2005 included $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. and $5 million of costs related to poultry and prepared foods plant closings.

 

Operations for the second quarter and six months of fiscal 2006 were negatively impacted by an oversupply of all proteins, which resulted in decreased average sales prices. The Beef segment suffered from low capacity utilization and declining boxed beef prices. The difference between high live cattle prices and lower sales prices was further negatively impacted by interruptions in

 

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export markets. Those factors combined to produce significant losses in the Beef segment. In the Chicken segment, unprecedented leg quarter inventories delayed the recovery of export pricing and also put pressure on an overabundant, domestic white meat market, which contributed to historically low breast meat prices. Additionally, operating income was negatively impacted by higher energy costs in each of the protein segments.

 

The Company tests goodwill for impairment by reporting unit on an annual basis during the fourth quarter each fiscal year. During the second quarter of fiscal 2006, in accordance with Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets,” the Company reviewed goodwill for impairment related to its Beef reporting unit. The review resulted from the significant adverse changes in the business climate of the Company’s Beef segment, which resulted in beef operating losses for the second quarter and six months of fiscal 2006.

 

The Company forecasted cash flows to estimate the fair value of the Beef segment reporting unit based on reasonable and supportable assumptions. The forecast reflects improved results from current Beef reporting unit levels, which resulted in the fair value of the Beef reporting unit exceeding the carrying value. Therefore, the goodwill of the Beef reporting unit was not impaired.

The improved forecasted results are mainly due to the expectations that beef export restrictions will abate, cattle supplies will increase and the overabundance of chicken and pork in the marketplace will lessen.

 

This excerpt taken from the TSN 10-Q filed Feb 9, 2006.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork, prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the first quarter of fiscal 2006 were $39 million, or $0.11 per diluted share, compared to $48 million, or $0.14 per diluted share, for the first quarter of fiscal 2005. Pretax earnings for the first quarter of fiscal 2005 included $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. and $3 million of costs related to a prepared foods plant closing.

 

Operations for the first quarter of fiscal 2006 benefited from decreased grain costs in the Chicken segment and lower raw material costs in the Prepared Foods segment. Additionally, losses from the Company’s commodity risk management activities related to grain purchases were less than $1 million in the first quarter of fiscal 2006, as compared to losses of $23 million recorded in the same period last year. First quarter fiscal 2006 earnings were negatively impacted by the Company’s Beef segment operating loss, primarily due to difficult industry market conditions both domestically and in Canada, as the higher average sales prices were more than offset by higher live cattle costs and increased freight expense. Additionally, operating income was negatively impacted by higher energy costs in each of the protein segments.

 

This excerpt taken from the TSN 10-K filed Feb 8, 2006.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork and prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for fiscal 2005 were $372 million, or $1.04 per diluted share, compared to $403 million, or $1.13 per diluted share, in fiscal 2004. Pretax earnings for fiscal 2005 included $33 million of costs related to a legal settlement involving the Company’s live swine operations, $14 million of costs for plant closings, $8 million of losses related to Hurricane Katrina, $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. Additionally, earnings included a non-recurring income tax net benefit of $15 million. The net benefit includes the reversal of tax reserves, partially offset by an income tax charge related to the repatriation of foreign income. The effective tax rate of the Company was further impacted by the federal income tax effect of the Medicare Part D subsidy in fiscal 2005 of $55 million since this amount is not subject to federal income tax. Combined, these items increased fiscal 2005 diluted earnings per share by $0.03. Pretax earnings for fiscal 2004 included $40 million of costs for plant closings, $61 million of BSE-related charges and $46 million of fixed asset write-downs and intangible asset impairments. Combined, these items decreased fiscal 2004 diluted earnings per share by $0.26.

 

Operations for fiscal 2005 benefited from higher average sales prices in the Company’s Chicken, Pork and Prepared Food segments, product mix improvements and decreased grain costs in the Company’s Chicken segment. These benefits were partially offset by losses from the Company’s commodity risk management activities related to grain purchases as compared to prior year gains from commodity risk management activities on grain positions. Operating income was also negatively impacted by higher energy costs, higher live hog prices in the Pork segment and higher raw material costs in the Prepared Foods segment. Additionally, earnings for fiscal 2005 were negatively impacted by the Company’s Beef segment operating loss, primarily due to lower domestic cattle supplies and restrictions on imports of Canadian cattle for most of the year, which resulted in lower production volumes and raised the operating cost per head. Also, the Beef segment’s operating results were negatively impacted by limited access to export markets.

 

In fiscal 2005, the Company continued to generate strong cash flow. This allowed the Company to pay down debt by $367 million, and exceed the Company’s debt-to-capital ratio goal of 40% by reaching 39% at year end. The Company began construction of a third fully dedicated case-ready plant in fiscal 2005. This plant is scheduled to begin operating in fiscal 2006, and once fully operational, it is expected to increase case-ready capacity by one-third. Additionally, in fiscal 2005, the Company continued construction of facilities at its Corporate Center, as well as a variety of other projects that will increase automation and support value-added product growth.

 

The Company's accounting cycle resulted in a 52-week year for fiscal years 2005 and 2003, and a 53-week year for fiscal 2004.

 

This excerpt taken from the TSN 10-K filed Dec 12, 2005.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork and prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for fiscal 2005 were $353 million, or $0.99 per diluted share, compared to $403 million, or $1.13 per diluted share, in fiscal 2004. Pretax earnings for fiscal 2005 included $33 million of costs related to a legal settlement involving the Company’s live swine operations, $14 million of costs for plant closings, $8 million of losses related to Hurricane Katrina, $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. Additionally, earnings included a non-recurring income tax net benefit of $15 million. The net benefit includes the reversal of tax reserves, partially offset by an income tax charge related to the repatriation of foreign income. Combined, these items decreased fiscal 2005 diluted earnings per share by $0.02. Pretax earnings for fiscal 2004 included $40 million of costs for plant closings, $61 million of BSE-related charges and $46 million of fixed asset write-downs and intangible asset impairments. Combined, these items decreased fiscal 2004 diluted earnings per share by $0.26.

 

Operations for fiscal 2005 benefited from higher average sales prices in the Company’s Chicken, Pork and Prepared Food segments, product mix improvements and decreased grain costs in the Company’s Chicken segment. These benefits were partially offset by losses from the Company’s commodity risk management activities related to grain purchases as compared to prior year gains from commodity risk management activities on grain positions. Operating income was also negatively impacted by higher energy costs, higher live hog prices in the Pork segment and higher raw material costs in the Prepared Foods segment. Additionally, earnings for fiscal 2005 were negatively impacted by the Company’s Beef segment operating loss, primarily due to lower domestic cattle supplies and restrictions on imports of Canadian cattle for most of the year, which resulted in lower production volumes and raised the operating cost per head. Also, the Beef segment’s operating results were negatively impacted by limited access to export markets.

 

In fiscal 2005, the Company continued to generate strong cash flow. This allowed the Company to pay down debt by $367 million, and exceed the Company’s debt-to-capital ratio goal of 40% by reaching 39% at year end. The Company began construction of a third fully dedicated case-ready plant in fiscal 2005. This plant is scheduled to begin operating in fiscal 2006, and once fully operational, it is expected to increase case-ready capacity by one-third. Additionally, in fiscal 2005, the Company continued construction of facilities at its Corporate Center, as well as a variety of other projects that will increase automation and support value-added product growth.

 

The Company's accounting cycle resulted in a 52-week year for fiscal years 2005 and 2003, and a 53-week year for fiscal 2004.

 

This excerpt taken from the TSN 10-Q filed Aug 11, 2005.

Overview

 

Tyson Foods is the world’s largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry. Tyson produces, distributes and markets chicken, beef, pork and prepared foods and related allied products. The Company’s primary operations are conducted in four segments: Chicken, Beef, Pork and Prepared Foods. Some of the key factors that influence the Company’s business are customer demand for the Company’s products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company’s chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company’s facilities.

 

Earnings for the third quarter of fiscal 2005 were $131 million, or $0.36 per diluted share, compared to $161 million, or $0.45 per diluted share, for the third quarter of fiscal 2004. Pretax earnings for the third quarter of fiscal 2005 include $33 million of costs related to a legal settlement involving the Company’s live swine operations and $10 million of costs related to poultry plant closings. Earnings for the first nine months of fiscal 2005 were $255 million, or $0.71 per diluted share, compared to $337 million, or $0.94 per diluted share, for the same period last year. Pretax earnings for the nine months of fiscal 2005 include $33 million of costs related to a legal settlement involving the Company’s live swine operations, $15 million of costs related to poultry and prepared foods plant closings, $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. Pretax earnings for the nine months of fiscal 2004 include $61 million of BSE-related charges and $40 million of costs related to prepared foods and poultry plant closings.

 

Operations for the third quarter and nine months of fiscal 2005 benefited from decreased grain costs in the Company’s Chicken segment, which were partially offset by results from the Company’s commodity risk management activities related to grain purchases primarily associated with current period fixed price sales contracts as compared to prior year gains from commodity risk management activities on grain positions not designated as SFAS No. 133 hedges. Chicken segment operating income was also negatively impacted by higher energy costs. The Company’s Prepared Foods segment benefited from higher average sales prices that more than offset the increase in raw material costs. Earnings for the nine months continued to be negatively impacted by the Beef segment’s operating results, primarily due to lower domestic cattle supplies and restrictions on imports of Canadian cattle resulting in lower plant utilization levels. Additionally, third quarter results were negatively impacted by higher live cattle costs. The Company’s Pork segment had a challenging quarter, primarily due to decreased domestic average sales prices and volumes, partially offset by lower average live prices. Sales and operating income in the Beef and Pork segments were also negatively impacted by losses recorded in the third quarter and nine months of fiscal 2005 as compared to gains recorded for the same periods last year related to open mark-to-market future positions from the Company’s commodity risk management activities related to its fixed price forward boxed beef and pork sales.

 

This excerpt taken from the TSN 10-Q filed May 10, 2005.

Overview

Tyson Foods is the world's largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry.  Tyson produces, distributes and markets chicken, beef, pork and prepared foods and related allied products.  The Company's primary operations are conducted in four segments:  Chicken, Beef, Pork and Prepared Foods.  Some of the key factors that influence the Company's business are customer demand for the Company's products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company's chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company's facilities.

Earnings for the second quarter of fiscal 2005 were $76 million, or $0.21 per diluted share, compared to $119 million, or $0.33 per diluted share, for the second quarter of fiscal 2004.  Pretax earnings for the second quarter of fiscal 2005 include $2 million of costs related to poultry and prepared foods plant closings compared to $14 million of costs related to poultry and prepared foods plant closings in the second quarter of fiscal 2004.  Earnings for the first six months of fiscal 2005 were $124 million, or $0.35 per diluted share, compared to $176 million, or $0.49 per diluted share, for the same period last year. Pretax earnings for the six months of fiscal 2005 include $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company's remaining interest in Specialty Brands, Inc. and $5 million of costs related to poultry and prepared foods plant closings.  Pretax earnings for the six months of fiscal 2004 include $61 million of BSE-related charges and $39 million of costs related to prepared foods and poultry plant closings.

Operations for the second quarter and six months of fiscal 2005 benefited from higher average sales prices, product mix improvements and decreased grain costs in the Company's Chicken segment.  Earnings for the second quarter and six months of fiscal 2005 were negatively impacted by the Beef segment's operating loss, primarily due to lower domestic cattle supplies and restrictions on imports of Canadian cattle resulting in lower plant utilization levels.  Operating income was also negatively impacted by higher live prices in the Pork segment, losses in the Chicken segment from the Company's commodity risk management activities related to grain purchases associated with current period fixed price sales contracts as compared to prior year gains from commodity risk management activities on grain positions not designated as SFAS No. 133 hedges and higher energy costs.

This excerpt taken from the TSN 10-Q filed Feb 9, 2005.

Overview

Tyson Foods is the world's largest protein company and the second largest publicly traded food company in the Fortune 500 with one of the most recognized brand names in the food industry.  Tyson produces, distributes and markets chicken, beef, pork and prepared foods and related allied products.  The Company's primary operations are conducted in four segments:  Chicken, Beef, Pork and Prepared Foods.  Some of the key factors that influence the Company's business are customer demand for the Company's products, the ability to maintain and grow relationships with customers and introduce new and innovative products to the marketplace, accessibility of international markets, market prices for the Company's chicken, beef and pork products, the cost of live cattle and hogs, raw materials and grain and operating efficiencies of the Company's facilities.

Earnings for the first quarter of fiscal 2005 were $48 million, or $0.14 per diluted share, compared to $57 million, or $0.16 per diluted share, for the first quarter of fiscal 2004.  The Company continued to generate strong cash flow which enabled it to pay down debt by $292 million reducing its debt-to-capital ratio from 44% to 41%.  Operations for the first quarter of fiscal 2005 benefited from higher average sales prices, increased volumes and product mix improvements in the Company's Chicken segment.  Earnings for the first quarter of fiscal 2005 were negatively impacted by the Beef segment's operating loss primarily due to lower domestic cattle supplies and restrictions on imports of Canadian cattle resulting in higher live cattle costs and lower plant utilization levels.  Additionally, limited access to beef export markets has increased domestic finished product supplies, resulting in lower average sales prices.  Operating income was also negatively impacted by losses in the Chicken segment from the Company's commodity risk management activities related to grain purchases associated with current period fixed price sales contracts, higher energy costs and higher live prices in the Pork segment.  Pretax earnings for the first quarter of fiscal 2005 include $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company's remaining interest in Specialty Brands, Inc. and $3 million of costs related to a prepared foods plant closing.  Pretax earnings for the first quarter of fiscal 2004 include $61 million of BSE-related charges and $25 million of costs related to prepared foods and poultry plant closings.

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