[X]
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended
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September 30, 2017
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[ ]
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from
to
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Delaware
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71-0225165
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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2200 West Don Tyson Parkway, Springdale, Arkansas
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72762-6999
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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(479) 290-4000
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, Par Value $0.10
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Class
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Outstanding Shares
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Class A Common Stock, $0.10 Par Value (Class A stock)
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297,596,071
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Class B Common Stock, $0.10 Par Value (Class B stock)
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70,010,755
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TABLE OF CONTENTS
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PAGE
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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identifying target markets for value-added products;
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•
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concentrating production, sales and marketing efforts to appeal to and enhance demand from those markets; and
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•
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utilizing our national distribution systems and customer support services.
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•
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Cobb-Vantress, a chicken breeding stock subsidiary, has business interests in Argentina, Brazil, China, the Dominican Republic, India, Japan, the Netherlands, New Zealand, the Philippines, Spain, Turkey, the United Kingdom and Venezuela.
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•
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Tyson Rizhao, located in Rizhao, China, is a vertically-integrated chicken production operation.
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Tyson Dalong, a joint venture in China in which we have a majority interest, is a chicken further-processing facility.
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Tyson Nantong, located in Nantong, China, is a vertically-integrated chicken production operation.
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Godrej Tyson Foods, a joint venture in India in which we have a majority interest, is primarily a chicken processing business.
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Tyson Mexico Trading Company, a Mexican subsidiary, sells chicken products primarily through co-packer arrangements.
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imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the importation of beef, pork, poultry, and prepared foods products, in addition to import or export licensing requirements imposed by various foreign countries;
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closing of borders by foreign countries to the import of beef, pork, and poultry products due to animal disease or other perceived health or safety issues;
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impact of currency exchange rate fluctuations between the United States dollar and foreign currencies, particularly the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Japanese yen and the Mexican peso;
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political and economic conditions;
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difficulties and costs to comply with, and enforcement of remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including, without limitation, the United States Foreign Corrupt Practices Act and economic and trade sanctions enforced by the United States Department of the Treasury’s Office of Foreign Assets Control;
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different regulatory structures and unexpected changes in regulatory environments;
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tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and incremental taxes upon repatriation;
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potentially negative consequences from changes in tax laws; and
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distribution costs, disruptions in shipping or reduced availability of freight transportation.
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it may limit or impair our ability to obtain financing in the future;
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our credit ratings (or any decrease to our credit ratings) could restrict or impede our ability to access capital markets at desired interest rates and increase our borrowing costs;
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it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business opportunities that may arise;
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a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes; and
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it may restrict our ability to pay dividends.
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challenges in realizing the anticipated benefits of the transaction;
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difficulty integrating acquired businesses, technologies, operations and personnel with our existing business;
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diversion of management attention in connection with negotiating transactions and integrating the businesses acquired;
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difficulty identifying suitable candidates or consummating a transaction on terms that are favorable to us;
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challenges in retaining the acquired businesses' customers and key employees;
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inability to implement and maintain consistent standards, controls, procedures and information systems;
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exposure to unforeseen or undisclosed liabilities of acquired companies; and
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the availability and terms of additional debt or equity financing for any transaction.
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make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;
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cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any amendment of, or waivers under, our credit agreements to the extent we may seek them in the future;
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impair the financial condition of some of our customers and suppliers, thereby increasing customer bad debts or non-performance by suppliers;
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negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash flows;
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decrease the value of our investments in equity and debt securities, including our marketable debt securities, company-owned life insurance and pension and other postretirement plan assets;
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negatively impact our commodity purchasing activities if we are required to record losses related to derivative financial instruments; or
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•
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impair the financial viability of our insurers.
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Number of Facilities
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Owned
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Leased
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Total
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Beef Segment Production Facilities
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12
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—
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12
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Pork Segment Production Facilities
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9
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—
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9
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Chicken Segment:
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Processing plants
(1)
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47
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1
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48
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Rendering plants
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9
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—
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9
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Blending mills
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2
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—
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2
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Feed mills
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33
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—
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33
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Broiler hatcheries
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59
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3
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62
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Breeder houses
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457
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44
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501
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Broiler farm houses
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50
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—
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50
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Pet treats plant
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1
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—
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1
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Prepared Foods Segment:
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Processing plants
(1)
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38
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4
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42
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Turkey operation facilities
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6
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—
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6
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Distribution Centers
(2)
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12
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2
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14
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Cold Storage Facilities
(2)
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51
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1
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52
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Research and Development Facilities
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1
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1
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2
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Capacity
(3)
per week at
September 30, 2017
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Fiscal 2017
Average Capacity
Utilization
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Beef Production Facilities
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162,000 head
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80
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%
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Pork Production Facilities
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456,000 head
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93
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%
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Chicken Production Facilities
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39 million head
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89
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%
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Prepared Foods Processing Facilities
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88 million pounds
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85
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%
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(1)
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Certain facilities acquired in the AdvancePierre acquisition produce products that are reported in both the Chicken and Prepared Foods segments. For presentation purposes, the acquired facilities are reflected in the segment that had the majority of the facility’s production. As a result, two facilities were added to the Chicken segment and eight facilities were added to the Prepared Foods segment.
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(2)
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Includes a leased Distribution Center and a leased Cold Storage Facility acquired in the AdvancePierre acquisition.
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Name
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Title
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Age
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Year Elected
Executive Officer
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John Tyson
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Chairman of the Board of Directors
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64
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2011
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Curt T. Calaway
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Senior Vice President, Controller and Chief Accounting Officer
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44
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2012
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Sally Grimes
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Group President Prepared Foods
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46
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2014
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Thomas P. Hayes
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President and Chief Executive Officer
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52
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2014
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Dennis Leatherby
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Executive Vice President and Chief Financial Officer
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57
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1994
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Mary Oleksiuk
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Executive Vice President and Chief Human Resources Officer
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55
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2014
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Doug Ramsey
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Group President Poultry
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48
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2017
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Scott Rouse
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Chief Customer Officer
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54
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2017
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Stephen Stouffer
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President Fresh Meats
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57
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2013
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David L. Van Bebber
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Executive Vice President and General Counsel
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61
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2008
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Noel White
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Group President Fresh Meats & International
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59
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2009
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2017
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2016
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High
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Low
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High
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Low
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First Quarter
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$
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75.33
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55.72
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$
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54.42
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$
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42.89
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Second Quarter
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67.14
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61.00
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68.17
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48.52
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Third Quarter
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66.87
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57.20
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70.44
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59.45
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Fourth Quarter
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70.80
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58.36
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77.05
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65.83
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Period
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Total
Number of
Shares
Purchased
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Average
Price Paid
per Share
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Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
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Maximum Number of
Shares that May Yet Be
Purchased Under the Plans
or Programs
(1)
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Jul. 2, 2017 to Jul. 29, 2017
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69,962
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$
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61.36
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—
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27,821,995
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Jul. 30, 2017 to Sept. 2, 2017
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82,328
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64.40
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—
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27,821,995
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Sept. 3, 2017 to Sept. 30, 2017
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42,451
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65.57
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—
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27,821,995
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Total
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194,741
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(2)
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$
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63.56
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—
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(3)
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27,821,995
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(1)
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On February 7, 2003, we announced our Board of Directors approved a program to repurchase up to 25 million shares of Class A common stock from time to time in open market or privately negotiated transactions. On May 3, 2012, our Board of Directors approved an increase of 35 million shares, on January 30, 2014, our Board of Directors approved an increase of 25 million shares and, on February 4, 2016, our Board of Directors approved an increase of 50 million shares under the program. The program has no fixed or scheduled termination date.
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(2)
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We purchased 194,741 shares during the period that were not made pursuant to our previously announced stock repurchase program, but were purchased to fund certain Company obligations under our equity compensation plans. These transactions included 178,162 shares purchased in open market transactions and 16,579 shares withheld to cover required tax withholdings on the vesting of restricted stock.
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(3)
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These shares were purchased during the period pursuant to our previously announced stock repurchase program.
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Fiscal Years Ended
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||||||||||||||||||||||
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9/29/12
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9/28/13
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9/27/14
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10/3/15
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10/1/16
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9/30/17
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Tyson Foods, Inc.
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$
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100.00
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$
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181.00
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$
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240.79
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$
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285.92
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$
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485.58
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$
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465.00
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S&P 500 Index
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100.00
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119.34
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142.89
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154.00
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160.94
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194.44
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Previous Peer Group
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100.00
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121.82
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140.64
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154.48
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174.37
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171.50
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Current Peer Group
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100.00
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115.59
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132.52
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140.88
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160.33
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159.82
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in millions, except per share, percentage and ratio data
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||||||||||||||||||
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2017
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2016
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2015
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2014
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2013
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Summary of Operations
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Sales
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$
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38,260
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$
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36,881
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$
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41,373
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$
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37,580
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$
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34,374
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Operating income
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2,931
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2,833
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2,169
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1,430
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1,375
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Net interest expense
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272
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243
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284
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125
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138
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Income from continuing operations
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1,778
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1,772
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1,224
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856
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848
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Loss from discontinued operation, net of tax
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—
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—
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—
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—
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(70
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)
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|||||
Net income
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1,778
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1,772
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1,224
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856
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|
778
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Net income attributable to Tyson
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1,774
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1,768
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1,220
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864
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778
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Diluted net income per share attributable to Tyson:
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Income from continuing operations
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4.79
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4.53
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2.95
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2.37
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2.31
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Loss from discontinued operation
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—
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—
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—
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—
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(0.19
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)
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|||||
Net income
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4.79
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4.53
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2.95
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2.37
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2.12
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Dividends declared per share:
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||||||||||
Class A
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0.975
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0.650
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0.425
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0.325
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|
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0.310
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|||||
Class B
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0.878
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0.585
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0.383
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0.294
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0.279
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Balance Sheet Data
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||||||||||
Cash and cash equivalents
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$
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318
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|
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$
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349
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|
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$
|
688
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$
|
438
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|
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$
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1,145
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Total assets
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28,066
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|
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22,373
|
|
|
22,969
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|
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23,906
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|
|
12,167
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|||||
Total debt
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10,203
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|
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6,279
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|
|
6,690
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|
|
8,128
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|
|
2,398
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|||||
Shareholders’ equity
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10,559
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|
|
9,624
|
|
|
9,706
|
|
|
8,904
|
|
|
6,233
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|
|||||
Other Key Financial Measures
|
|
|
|
|
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|
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|
||||||||||
Depreciation and amortization
|
$
|
761
|
|
|
$
|
705
|
|
|
$
|
711
|
|
|
$
|
530
|
|
|
$
|
519
|
|
Capital expenditures
|
1,069
|
|
|
695
|
|
|
854
|
|
|
632
|
|
|
558
|
|
|||||
EBITDA
|
3,648
|
|
|
3,538
|
|
|
2,906
|
|
|
1,897
|
|
|
1,818
|
|
|||||
Return on invested capital
|
16.3
|
%
|
|
18.1
|
%
|
|
13.4
|
%
|
|
11.9
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%
|
|
18.5
|
%
|
|||||
Effective tax rate for continuing operations
|
32.3
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%
|
|
31.8
|
%
|
|
36.3
|
%
|
|
31.6
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%
|
|
32.6
|
%
|
|||||
Total debt to capitalization
|
49.1
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%
|
|
39.5
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%
|
|
40.8
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%
|
|
47.7
|
%
|
|
27.8
|
%
|
|||||
Book value per share
|
$
|
28.72
|
|
|
$
|
25.67
|
|
|
$
|
24.25
|
|
|
$
|
21.86
|
|
|
$
|
18.13
|
|
Stock price high
|
75.33
|
|
|
77.05
|
|
|
45.10
|
|
|
44.24
|
|
|
32.40
|
|
|||||
Stock price low
|
55.72
|
|
|
42.89
|
|
|
37.02
|
|
|
27.33
|
|
|
15.93
|
|
a.
|
Fiscal 2017 net income included $103 million pretax expense of AdvancePierre purchase accounting and acquisition related costs, pretax impairment charges of $52 million related to our San Diego Prepared Foods operation and $45 million related to the expected sale of a non-protein business and pretax restructuring and related charges of $150 million.
|
b.
|
Fiscal 2016 net income included $53 million related to the recognition of previously unrecognized tax benefits and audit settlements. In fiscal 2016, we adopted new accounting guidance, retrospectively, requiring classification of debt issuance costs as a reduction of the carrying value of the debt. In doing so, $29 million, $35 million, $50 million and $10 million of deferred issuance costs have been reclassified from Other Assets to Long-Term Debt in our Consolidated Balance Sheets for fiscal 2016, 2015, 2014 and 2013 respectively. This change is reflected above in total assets, total debt, total debt to capitalization and return on invested capital ratios.
|
c.
|
Fiscal 2015 was a 53-week year, while the other years presented were 52-week years. Fiscal 2015 included a $169 million pretax impairment charge related to our China operation, $57 million pretax expense related to merger and integration costs, $59 million pretax impairment charges related to our Prepared Foods network optimization, $12 million pretax charges related to Denison impairment and plant closure costs, $8 million pretax gain related to net insurance proceeds (net of costs) related to a legacy Hillshire Brands plant fire, $21 million pretax gain on the sale of equity securities, $161 million pretax gain on the sale of the Mexico operation, $39 million pretax gain related to the impact of the additional week in fiscal 2015 and $26 million unrecognized tax benefit gain.
|
d.
|
Fiscal 2014 included a $42 million pretax impairment charge and other costs related to the sale of our Brazil operation and Mexico's undistributed earnings tax, $197 million pretax expense related to the Hillshire Brands acquisition, integration and costs associated with our Prepared Foods improvement plan, $40 million pretax expense related to the Hillshire Brands post-closing results, purchase price accounting, and costs related to a legacy Hillshire Brands plant fire, $27 million pretax expense related to the Hillshire Brands acquisition financing incremental interest cost and $52 million unrecognized tax benefit gain.
|
e.
|
Fiscal 2013 included a $19 million currency translation adjustment gain recognized in conjunction with the receipt of proceeds constituting the final resolution of our investment in Canada. Additionally, in fiscal 2013 we determined our Weifang operation (Weifang) was no longer core to the execution of our strategy in China. In July 2013, we completed the sale of Weifang. Non-cash charges related to the impairment of assets in Weifang amounted to $56 million in fiscal 2013.
|
f.
|
Return on invested capital is calculated by dividing operating income by the sum of the average of beginning and ending total debt and shareholders’ equity less cash and cash equivalents.
|
g.
|
For the total debt to capitalization calculation, capitalization is defined as total debt plus total shareholders’ equity.
|
h.
|
Book value per share is calculated by dividing shareholders’ equity by the sum of Class A and B shares outstanding and the remaining minimum shares that were to be issued from our tangible equity units for each period.
|
i.
|
"EBITDA" is a Non-GAAP measure and defined as net income less interest income, plus interest, taxes, depreciation and amortization. A reconciliation of net income to EBITDA immediately follows.
|
in millions, except ratio data
|
|
||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,778
|
|
|
$
|
1,772
|
|
|
1,224
|
|
|
$
|
856
|
|
|
$
|
778
|
|
|
Less: Interest income
|
(7
|
)
|
|
(6
|
)
|
|
(9
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Add: Interest expense
|
279
|
|
|
249
|
|
|
293
|
|
|
132
|
|
|
145
|
|
|||||
Add: Income tax expense (a)
|
850
|
|
|
826
|
|
|
697
|
|
|
396
|
|
|
411
|
|
|||||
Add: Depreciation
|
642
|
|
|
617
|
|
|
609
|
|
|
494
|
|
|
474
|
|
|||||
Add: Amortization (b)
|
106
|
|
|
80
|
|
|
92
|
|
|
26
|
|
|
17
|
|
|||||
EBITDA
|
$
|
3,648
|
|
|
$
|
3,538
|
|
|
$
|
2,906
|
|
|
$
|
1,897
|
|
|
$
|
1,818
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total gross debt
|
$
|
10,203
|
|
|
$
|
6,279
|
|
|
$
|
6,690
|
|
|
$
|
8,128
|
|
|
$
|
2,398
|
|
Less: Cash and cash equivalents
|
(318
|
)
|
|
(349
|
)
|
|
(688
|
)
|
|
(438
|
)
|
|
(1,145
|
)
|
|||||
Less: Short-term investments
|
(3
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Total net debt
|
$
|
9,882
|
|
|
$
|
5,926
|
|
|
$
|
6,000
|
|
|
$
|
7,689
|
|
|
$
|
1,252
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio Calculations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross debt/EBITDA
|
2.8x
|
|
|
1.8x
|
|
|
2.3x
|
|
|
4.3x
|
|
|
1.3x
|
|
|||||
Net debt/EBITDA
|
2.7x
|
|
|
1.7x
|
|
|
2.1x
|
|
|
4.1x
|
|
|
0.7x
|
|
(a)
|
Includes income tax expense of discontinued operation.
|
(b)
|
Excludes the amortization of debt issuance and debt discount expense of
$13 million
,
$8 million
, $10 million, $10 million and $28 million for fiscal 2017, 2016, 2015, 2014 and 2013, respectively, as it is included in Interest expense.
|
•
|
Fiscal year – Our accounting cycle resulted in a 52-week year for both fiscal 2017 and 2016 and a 53-week year for fiscal 2015.
|
•
|
General – Our fiscal 2017 operating income grew 3% compared to fiscal 2016 to a record $2,931 million, which was led by record earnings in our Beef and Pork segments. The Beef segment's operating income improved $530 million and the Pork segment improved $117 million in fiscal 2017 due to favorable market conditions and strong operational execution. Our Chicken segment's lower operating income was impacted by increased operating costs and $56 million of restructuring and related charges. Our Prepared Foods segment's lower operating income was impacted by increased operating costs, impairments of $52 million related to our San Diego Prepared Foods operation and $45 million related to the expected sale of a non-protein business and $82 million of restructuring and related charges. In addition, we incurred an incremental $95 million of compensation and benefit integration expense in fiscal 2017, as we continued to integrate and make investments in our talent, and incurred $85 million of AdvancePierre purchase accounting and acquisition related operating costs. Sales increased 4% in fiscal 2017 over fiscal 2016, primarily due to increased sales volumes and increased beef, pork and chicken prices, as well as the net incremental impact of AdvancePierre's sales of $508 million.
|
•
|
Market Environment – According to the United States Department of Agriculture (USDA), domestic protein production (beef, pork, chicken and turkey) increased approximately 3% in fiscal 2017 compared to fiscal 2016. The Beef segment experienced strong export demand and more favorable domestic market conditions associated with an increase in cattle supply. The Pork segment had favorable market conditions associated with strong demand for our pork products and improved export markets. There was stronger demand for our chicken products and reduced feed ingredient costs of $80 million, which benefited the Chicken segment. Our Prepared Foods segment had improved demand for our retail products but experienced a decline in foodservice and higher input costs of $50 million.
|
•
|
Margins – Our total operating margin was
7.7%
in fiscal
2017
. Operating margins by segment were as follows:
|
•
|
Beef –
5.9%
|
•
|
Pork –
12.3%
|
•
|
Chicken –
9.2%
(included $56 million of restructuring and related charges)
|
•
|
Prepared Foods –
5.9%
(included $52 million impairment related to our San Diego Prepared Foods operation, $45 million impairment related to the expected sale of a non-protein business, $82 million of restructuring and related charges and $34 million of purchase accounting and acquisition related costs from the acquisition of AdvancePierre.)
|
•
|
Hillshire Integration – The impact of the The Hillshire Brands Company ("Hillshire Brands") synergies, along with the profit improvement plan related to our legacy Prepared Foods business, had a positive incremental impact of approximately $90 million in fiscal 2017 above the $258 million captured in fiscal 2016 and $322 million captured in fiscal 2015, for a total of $670 million of synergies realized. The majority of these benefits were realized in the Prepared Foods segment and were partially used to invest in innovation, new product launches and supporting the growth of our brands.
|
•
|
Liquidity – During fiscal
2017
, we generated
$2.6 billion
of operating cash flows. At
September 30, 2017
, we had
$1.0 billion
of liquidity, which included
$318 million
of cash and cash equivalents and the availability under our revolving credit facility after deducting amounts outstanding under our commercial paper program.
|
•
|
Strategy - In fiscal 2017, we announced our strategy to sustainably feed the world with the fastest growing portfolio of protein-packed brands. We intend to accomplish this by growing our portfolio of protein-packed brands and delivering food at scale, which will be enabled by driving profitable growth with and for our customers through differentiated capabilities and creating fuel for reinvestment through a disciplined financial fitness model.
|
•
|
On June 7, 2017, we acquired all of the outstanding stock of AdvancePierre as part of our overall strategy. The purchase price was equal to
$40.25
per share in cash for AdvancePierre's outstanding common stock, or approximately
$3.2 billion
. We funded the acquisition with existing cash on hand, net proceeds from the issuance of new senior notes, as well as borrowings under our commercial paper program and new term loan facility. AdvancePierre’s results from operations subsequent to the acquisition closing are included in the Prepared Foods and Chicken segments. For further description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 3: Acquisition and Dispositions.
|
•
|
On April 24, 2017, we announced our intent to sell three non-protein businesses, Sara Lee® Frozen Bakery, Kettle and Van’s®, which are all included in our Prepared Foods segment, as part of our strategic focus on protein-packed brands. We have reclassified the assets and liabilities related to these businesses to assets and liabilities held for sale in our Consolidated Balance Sheet as of September 30, 2017. In the fourth quarter of 2017, we recorded an impairment charge totaling
$45 million
related to one of these businesses due to a revised estimate of the business’ fair value based on current expected net sales proceeds. The impairment charge was recorded in Cost of Sales in our Consolidated Statement of Income for fiscal 2017, and consisted of goodwill and intangible assets previously classified within assets held for sale. We anticipate we will close the transactions by the end of calendar 2017, or early calendar 2018, and expect to record a net pretax gain as a result of the sale of these businesses. For further description refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 3: Acquisition and Dispositions.
|
•
|
In the fourth quarter of fiscal 2017, our Board of Directors approved a multi-year restructuring program (the “Financial Fitness Program”), which is expected to contribute to the Company’s overall strategy of financial fitness through increased operational effectiveness and overhead reduction. Through a combination of synergies from the integration of AdvancePierre and additional elimination of non-valued added costs, the Financial Fitness Program is estimated to result in cumulative net savings of $200 million in fiscal 2018, $400 million in fiscal 2019 including new savings of $200 million, and $600 million in fiscal 2020 including additional savings of $200 million. Approximately 50-60% of these net savings, which are focused on supply chain, procurement, and overhead improvements, are expected to be realized in the Prepared Foods segment with the majority of the remaining net savings impacting the Chicken segment. Additionally, we estimate that approximately 75% of the net savings will be reflected in Cost of Sales in our Consolidated Statement of Income, with the remaining in Selling, General and Administrative.
|
in millions
|
|
|||
|
|
2017
|
|
|
Cost of Sales
|
|
$
|
35
|
|
Selling, general and administrative expenses
|
|
115
|
|
|
Total restructuring and related charges, pretax
|
|
$
|
150
|
|
|
in millions
|
|
|||||||
|
2017 charges
|
|
Estimated 2018 charges
|
|
Total estimated Financial Fitness Program charges
|
|
|||
Beef
|
$
|
8
|
|
$
|
6
|
|
$
|
14
|
|
Pork
|
3
|
|
2
|
|
5
|
|
|||
Chicken
|
56
|
|
32
|
|
88
|
|
|||
Prepared Foods
|
82
|
|
25
|
|
107
|
|
|||
Other
|
1
|
|
—
|
|
1
|
|
|||
Total restructuring and related charges, pretax
|
$
|
150
|
|
$
|
65
|
|
$
|
215
|
|
|
in millions, except per share data
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income attributable to Tyson
|
$
|
1,774
|
|
|
$
|
1,768
|
|
|
$
|
1,220
|
|
Net income attributable to Tyson - per diluted share
|
4.79
|
|
|
4.53
|
|
|
2.95
|
|
•
|
$103 million pretax, or ($0.18) per diluted share, of AdvancePierre purchase accounting and acquisition related costs, which included a $36 million purchase accounting adjustment for the amortization of the fair value step-up of inventory, $49 million of acquisition related costs and $18 million of acquisition bridge financing fees.
|
•
|
$150 million pretax, or ($0.15) per diluted share, of restructuring and related charges.
|
•
|
$52 million pretax, or ($0.09) per diluted share, impairment charge related to our San Diego Prepared Foods operation.
|
•
|
$45 million pretax, or $0.01 per diluted share, impairment net of tax benefit related to the expected sale of a non-protein business.
|
•
|
$53 million post tax, or $0.14 per diluted share, related to recognition of previously unrecognized tax benefits and audit settlements.
|
•
|
$169 million pretax, or ($0.41) per diluted share, related to an impairment charge in China.
|
•
|
$59 million pretax, or ($0.09) per diluted share, related to Prepared Foods network optimization impairment charges.
|
•
|
$57 million pretax, or ($0.09) per diluted share, related to merger and integration costs.
|
•
|
$12 million pretax, or ($0.02) per diluted share, related to closure and impairment charges related to the ceasing of beef operations at our Denison facility.
|
•
|
$161 million pretax, or $0.24 per diluted share, related to a gain on sale of the Mexico operation.
|
•
|
$39 million pretax, or $0.06 per diluted share, related to the additional week in fiscal 2015.
|
•
|
$26 million post tax, or $0.06 per diluted share, related to recognition of previously unrecognized tax benefits.
|
•
|
$21 million pretax, or $0.03 per diluted share, related to a gain on sale of equity securities.
|
•
|
$8 million pretax, or $0.02 per diluted share, of insurance proceeds (net of costs) related to a legacy Hillshire Brands plant fire.
|
Sales
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Sales
|
$
|
38,260
|
|
|
$
|
36,881
|
|
|
$
|
41,373
|
|
Change in sales volume
|
1.0
|
%
|
|
(4.6
|
)%
|
|
|
||||
Change in average sales price
|
2.7
|
%
|
|
(6.5
|
)%
|
|
|
||||
Sales growth
|
3.7
|
%
|
|
(10.9
|
)%
|
|
|
•
|
Sales Volume
– Sales were positively impacted by an increase in sales volume, which accounted for an increase of $477
|
•
|
Average Sales Price
– Sales were positively impacted by higher average sales prices, which accounted for an increase of $902 million. Each segment had an increase in average sales price with the Pork, Chicken and Prepared Foods segments contributing to the majority of the increase due to strong demand for our pork products, improved mix and higher chicken pricing in our Chicken segment and better product mix in our Prepared Foods segment which was positively impacted by the acquisition of AdvancePierre.
|
•
|
The above amounts include a net increase of $508 million related to the inclusion of AdvancePierre results post
|
•
|
Sales Volume
– Sales were negatively impacted by lower sales volume, which accounted for a decrease of $1.9 billion. Each segment had a decline in sales volume primarily attributed to the additional week in fiscal 2015. The decrease in sales volume was also attributable to the divestitures of the Mexico and Brazil chicken production operations in fiscal 2015. When excluding these impacts along with the divestiture of our Heinold Hog Markets business in the first quarter of fiscal 2015, total company sales volume increased 0.1%.
|
•
|
Average Sales Price
– Sales were negatively impacted by lower average sales prices, which accounted for a decrease of $2.6 billion. Each segment had a decrease in average sales prices largely due to decreased pricing associated with lower beef, pork, and chicken prices, with the largest decrease in the Beef segment.
|
Cost of Sales
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cost of sales
|
$
|
33,177
|
|
|
$
|
32,184
|
|
|
$
|
37,456
|
|
Gross profit
|
5,083
|
|
|
4,697
|
|
|
3,917
|
|
|||
Cost of sales as a percentage of sales
|
86.7
|
%
|
|
87.3
|
%
|
|
90.5
|
%
|
•
|
Cost of sales increased $993 million. Higher input cost per pound increased cost of sales $588 million while higher sales volume increased cost of sales $405 million. These amounts include a net increase of $425 million related to the inclusion of AdvancePierre results post acquisition, which included $36 million from the fair value step-up of inventory as part of purchase accounting.
|
•
|
The $588 million impact of higher input cost per pound was primarily driven by:
|
•
|
Increase of approximately $170 million in our Chicken segment related to increase in freight, growout expenses and outside meat purchases, partially offset by a decrease in feed costs of $80 million.
|
•
|
Increase due to impairment charges of $44 million related to our San Diego Prepared Foods operation and $45 million related to the expected sale of a non-protein business, in addition to an increase of $17 million related to net costs associated with fires at two chicken plants.
|
•
|
Increase in raw material and other input costs of approximately $50 million in our Prepared Foods segment.
|
•
|
Increase in live hog costs of approximately $40 million in our Pork segment.
|
•
|
Increase of $35 million related to restructuring and related charges.
|
•
|
Increase in input cost per pound related to the acquisition of AdvancePierre on June 7, 2017.
|
•
|
Increase due to net realized derivative losses of $79 million for fiscal 2017, compared to net realized derivative gains of $96 million for fiscal 2016 due to our risk management activities. These amounts exclude offsetting impacts
|
•
|
Decrease in live cattle costs of approximately $600 million in our Beef segment.
|
•
|
Remainder of net change is mostly due to increased cost per pound from a mix upgrade in the Chicken segment as we increased sales volume in value-added products as well as increased operating costs, freight, and plant variances across all segments, which also included $71 million of compensation and benefit integration expense.
|
•
|
The $405 million impact of higher sales volume was driven by increases in sales volume in all segments, with the majority of the increase in the Beef and Prepared Foods segment.
|
•
|
Cost of sales decreased by approximately $5.3 billion. Lower input costs per pound decreased cost of sales approximately $3.6 billion and lower sales volume decreased cost of sales approximately $1.7 billion.
|
•
|
The approximate $3.6 billion impact of lower input costs was primarily driven by:
|
•
|
Decrease in live cattle cost of approximately $2.6 billion in our Beef segment.
|
•
|
Decrease in live hog costs of approximately $360 million in our Pork segment.
|
•
|
Decrease in raw material and other input costs of approximately $300 million in our Prepared Foods segment.
|
•
|
Decreases in feed costs of approximately $170 million in our Chicken segment.
|
•
|
Decrease due to net realized derivative gains of $96 million in fiscal 2016, compared to net realized derivative losses of $102 million in fiscal 2015 due to our risk management activities. These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed costs described above. Additionally, cost of sales increased due to net unrealized gains of $11 million in fiscal 2016, compared to net unrealized gains of $80 million in fiscal 2015, primarily due to our Beef, Pork, and Chicken segment commodity risk management activities.
|
•
|
The $1.7 billion impact of lower sales volume was primarily due to the sale of our Mexico chicken production operation in fiscal 2015 along with the additional week in fiscal 2015.
|
Selling, General and Administrative
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Selling, general and administrative
|
$
|
2,152
|
|
|
$
|
1,864
|
|
|
$
|
1,748
|
|
As a percentage of sales
|
5.6
|
%
|
|
5.1
|
%
|
|
4.2
|
%
|
•
|
Increase of $288 million in selling, general and administrative was primarily driven by:
|
•
|
Increase of $124 million related to the AdvancePierre acquisition, which was composed of $49 million in acquisition related costs, $37 million in incremental amortization and $38 million from the inclusion of AdvancePierre results post-acquisition.
|
•
|
Increase of $115 million from restructuring and related charges.
|
•
|
Increase of $53 million in employee costs including $34 million in non-restructuring severance related expenses and $24 million compensation and benefit integration expense, which was partially offset by reduced incentive-based compensation.
|
•
|
Increase of $8 million due to an impairment related to our San Diego Prepared Foods operation.
|
•
|
Remainder of net change was primarily related to professional fees.
|
•
|
Increase of $116 million in selling, general and administrative was primarily driven by:
|
•
|
Increase of $88 million related to marketing, advertising and promotion expense to drive sales growth.
|
•
|
Increase of $71 million of employee costs including payroll and stock-based and incentive-based compensation.
|
•
|
Increase of $11 million related to bad debt expense.
|
•
|
Increase of $17 million in all other primarily related to professional fees, information technology costs and rent.
|
•
|
Decrease of $26 million due to a reduction in amortization and other expense related to our intangible assets.
|
•
|
Decrease of $25 million related to fiscal 2015 sale of our chicken production operations in Brazil and Mexico.
|
•
|
Decrease of $20 million of merger and integration costs.
|
Interest Income
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
|
$
|
(9
|
)
|
Interest Expense
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash interest expense
|
$
|
278
|
|
|
$
|
248
|
|
|
$
|
293
|
|
Non-cash interest expense
|
1
|
|
|
1
|
|
|
—
|
|
|||
Total Interest Expense
|
$
|
279
|
|
|
$
|
249
|
|
|
$
|
293
|
|
•
|
Cash interest expense primarily included interest expense related to the coupon rates for senior notes and term loans and commitment/letter of credit fees incurred on our revolving credit facilities. The increase in cash interest expense in fiscal 2017 was primarily due to debt issued in connection with the AdvancePierre acquisition. The decrease in cash interest expense in fiscal 2016 was primarily due to a reduction of our debt.
|
•
|
Non-cash interest expense primarily included amounts related to the amortization of debt issuance costs and discounts/premiums on note issuances, offset by interest capitalized.
|
Other (Income) Expense, net
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
|
$
|
31
|
|
|
$
|
(8
|
)
|
|
$
|
(36
|
)
|
Effective Tax Rate
|
|
|||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
32.3
|
%
|
|
31.8
|
%
|
|
36.3
|
%
|
•
|
Domestic production activity deduction reduced the rate 3.1%.
|
•
|
State income taxes increased the rate 2.3%.
|
•
|
Domestic production activity deduction reduced the rate 2.6%.
|
•
|
Unrecognized tax benefits activity, mostly related to expiration of statutes of limitations and settlements with taxing authorities, reduced the rate 1.7%.
|
•
|
State income taxes increased the rate 2.7%.
|
•
|
Domestic production activity deduction reduced the rate 3.7%.
|
•
|
Unrecognized tax benefits activity, mostly related to expiration of statutes of limitations, reduced the rate 1.8%.
|
•
|
State income taxes increased the rate 3.1%.
|
•
|
Foreign rate differences and valuation allowances increased the rate 3.8%.
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
Sales
|
|
Operating Income (Loss)
|
||||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Beef
|
$
|
14,823
|
|
|
$
|
14,513
|
|
|
$
|
17,236
|
|
|
$
|
877
|
|
|
$
|
347
|
|
|
$
|
(66
|
)
|
Pork
|
5,238
|
|
|
4,909
|
|
|
5,262
|
|
|
645
|
|
|
528
|
|
|
380
|
|
||||||
Chicken
|
11,409
|
|
|
10,927
|
|
|
11,390
|
|
|
1,053
|
|
|
1,305
|
|
|
1,366
|
|
||||||
Prepared Foods
|
7,853
|
|
|
7,346
|
|
|
7,822
|
|
|
462
|
|
|
734
|
|
|
588
|
|
||||||
Other
|
349
|
|
|
380
|
|
|
879
|
|
|
(106
|
)
|
|
(81
|
)
|
|
(99
|
)
|
||||||
Intersegment Sales
|
(1,412
|
)
|
|
(1,194
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
38,260
|
|
|
$
|
36,881
|
|
|
$
|
41,373
|
|
|
$
|
2,931
|
|
|
$
|
2,833
|
|
|
$
|
2,169
|
|
Beef Segment Results
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
Change 2017 vs. 2016
|
|
|
2015
|
|
|
Change 2016
vs. 2015 |
|
|||||
Sales
|
$
|
14,823
|
|
|
$
|
14,513
|
|
|
$
|
310
|
|
|
$
|
17,236
|
|
|
$
|
(2,723
|
)
|
Sales Volume Change
|
|
|
|
|
1.8
|
%
|
|
|
|
(1.1
|
)%
|
||||||||
Average Sales Price Change
|
|
|
|
|
0.4
|
%
|
|
|
|
(14.9
|
)%
|
||||||||
Operating Income (Loss)
|
$
|
877
|
|
|
$
|
347
|
|
|
$
|
530
|
|
|
$
|
(66
|
)
|
|
$
|
413
|
|
Operating Margin
|
5.9
|
%
|
|
2.4
|
%
|
|
|
|
(0.4
|
)%
|
|
|
•
|
Sales Volume
– Sales volume increased due to improved availability of cattle supply, stronger domestic demand for our beef products and increased exports.
|
•
|
Average Sales Price
–
Average sales price increased as demand for our beef products and strong exports outpaced the increase in live cattle supplies.
|
•
|
Operating Income
– Operating income increased due to more favorable market conditions as we maximized our revenues relative to the decline in live fed cattle costs, partially offset by higher operating costs.
|
•
|
Sales Volume
– Sales volume decreased due to the additional week in fiscal 2015. When excluding the additional week in fiscal 2015, sales volume increased 0.8% due to increased availability of cattle supply and better demand for our beef products despite a reduction in live cattle processing capacity due to the closure of our Denison, Iowa, facility in the fourth quarter of fiscal 2015.
|
•
|
Average Sales Price
–
Average sales price decreased due to higher domestic availability of beef supplies and lower livestock cost.
|
•
|
Operating Income
–
Operating income increased due to more favorable market conditions as we maximized our revenues relative to the decline in live fed cattle cost, in addition to reduced losses from mark-to-market open derivative positions and lower-of-cost-or market inventory adjustments that were incurred in the fourth quarter of fiscal 2015, partially offset by higher operating costs.
|
Pork Segment Results
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
Change 2017 vs. 2016
|
|
|
2015
|
|
|
Change 2016 vs. 2015
|
|
|||||
Sales
|
$
|
5,238
|
|
|
$
|
4,909
|
|
|
$
|
329
|
|
|
$
|
5,262
|
|
|
$
|
(353
|
)
|
Sales Volume Change
|
|
|
|
|
0.6
|
%
|
|
|
|
(2.5
|
)%
|
||||||||
Average Sales Price Change
|
|
|
|
|
6.1
|
%
|
|
|
|
(4.4
|
)%
|
||||||||
Operating Income
|
$
|
645
|
|
|
$
|
528
|
|
|
$
|
117
|
|
|
$
|
380
|
|
|
$
|
148
|
|
Operating Margin
|
12.3
|
%
|
|
10.8
|
%
|
|
|
|
7.2
|
%
|
|
|
•
|
Sales Volume
– Sales volume increased due to strong demand for our pork products and increased exports.
|
•
|
Average Sales Price
–
Average sales price increased as demand for our pork products and strong exports outpaced the increase in live hog supplies.
|
•
|
Operating Income
– Operating income increased as we maximized our revenues relative to the live hog markets, partially attributable to stronger export markets and operational and mix performance, which were partially offset by higher operating costs.
|
•
|
Sales Volume
– Sales volume decreased due to the divestiture of our Heinold Hog Markets business in the first quarter of fiscal 2015 and the additional week in fiscal 2015. Excluding these impacts, sales volume grew 1.2%, driven by better demand for our pork products.
|
•
|
Average Sales Price
–
Average sale price decreased due to increased live hog supplies and lower livestock cost.
|
•
|
Operating Income
– Operating income increased as we maximized our revenues relative to the decline in live hog markets and due to better plant utilization associated with increased volume processed, which were partially offset by higher operating costs, losses incurred in our live hog operation and the additional week in fiscal 2015.
|
Chicken Segment Results
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
Change 2017
vs. 2016
|
|
|
2015
|
|
|
Change 2016
vs. 2015 |
|
|||||
Sales
|
$
|
11,409
|
|
|
$
|
10,927
|
|
|
$
|
482
|
|
|
$
|
11,390
|
|
|
$
|
(463
|
)
|
Sales Volume Change
|
|
|
|
|
1.2
|
%
|
|
|
|
(2.6
|
)%
|
||||||||
Average Sales Price Change
|
|
|
|
|
3.1
|
%
|
|
|
|
(1.5
|
)%
|
||||||||
Operating Income
|
$
|
1,053
|
|
|
$
|
1,305
|
|
|
$
|
(252
|
)
|
|
$
|
1,366
|
|
|
$
|
(61
|
)
|
Operating Margin
|
9.2
|
%
|
|
11.9
|
%
|
|
|
|
12.0
|
%
|
|
|
•
|
Sales Volume
– Sales volume was up due to better demand for our chicken products along with the incremental volume from the AdvancePierre acquisition.
|
•
|
Average Sales Price
–
Average sales price increased due to sales mix changes.
|
•
|
Operating Income
– Operating income for fiscal 2017 was below prior year record results due to higher operating costs, which included increased compensation and benefit integration expense of $41 million, $17 million of incremental net costs attributable to two plant fires, in addition to restructuring and related charges of $56 million, partially offset with lower feed ingredient costs of approximately $80 million.
|
•
|
Sales Volume
– Sales volume decreased primarily due to the additional week in fiscal 2015, in addition to a planned temporary decrease in production in the fourth quarter of fiscal 2016 while we transitioned our mix to sell more value-added and less commodity products along with optimizing our mix and our buy versus grow strategy.
|
•
|
Average Sales Price
– Average sales price decreased as feed costs declined, partially offset by mix changes.
|
•
|
Operating Income
– Operating income was negatively impacted by the additional week in fiscal 2015 along with increases in operating costs and marketing, advertising and promotion expenses, partially offset by lower feed costs of $170 million.
|
Prepared Foods Segment Results
|
|
|
|
|
|
|
in millions
|
|
|||||||||||
|
2017
|
|
|
2016
|
|
|
Change 2017 vs. 2016
|
|
|
2015
|
|
|
Change 2016
vs. 2015
|
|
|||||
Sales
|
$
|
7,853
|
|
|
$
|
7,346
|
|
|
$
|
507
|
|
|
$
|
7,822
|
|
|
$
|
(476
|
)
|
Sales Volume Change
|
|
|
|
|
3.2
|
%
|
|
|
|
(2.8
|
)%
|
||||||||
Average Sales Price Change
|
|
|
|
|
3.6
|
%
|
|
|
|
(3.4
|
)%
|
||||||||
Operating Income
|
$
|
462
|
|
|
$
|
734
|
|
|
$
|
(272
|
)
|
|
$
|
588
|
|
|
$
|
146
|
|
Operating Margin
|
5.9
|
%
|
|
10.0
|
%
|
|
|
|
7.5
|
%
|
|
|
•
|
Sales Volume
– Sales volume increased due to improved demand for our retail products and incremental volumes from the AdvancePierre acquisition, partially offset by declines in foodservice.
|
•
|
Average Sales Price
–
Average sales price increased due to better product mix which was positively impacted by the acquisition of AdvancePierre as well as higher input costs of $50 million.
|
•
|
Operating Income
– Operating income decreased due to impairments of $52 million related to our San Diego operation and of $45 million related to the expected sale of a non-protein business, $30 million of compensation and benefit integration expense, $34 million related to AdvancePierre purchase accounting and acquisition related costs, $82 million of restructuring and related charges, in addition to higher operating costs at some of our facilities.
Additionally, Prepared Foods operating income was positively impacted by $538 million in synergies, of which $97 million was incremental synergies in fiscal 2017 above the $156 million of synergies realized in fiscal 2016 and $285 million realized in fiscal 2015. The positive impact of these synergies to operating income was partially offset with investments in innovation, new product launches and supporting the growth of our brands.
|
•
|
Sales Volume
– Sales volume decreased due to the additional week in fiscal 2015 and lower sales volume in the first six months of fiscal 2016 due to changes in sales mix and the carryover effect of the 2015 turkey avian influenza occurrence into the first half of fiscal 2016.
|
•
|
Average Sales Price
–
Average sales price decreased primarily due to a decline in input costs, partially offset by a change in product mix.
|
•
|
Operating Income
–
Operating income increased due to mix changes as well as lower input costs of approximately $300 million, partially offset with higher marketing, advertising, and promotion spend along with the additional week in fiscal 2015. Additionally, Prepared Foods operating income was positively impacted by $441 million in synergies, of which $156 million was incremental synergies in fiscal 2016 above the $285 million of synergies realized in fiscal 2015. The positive impact of these synergies to operating income was partially offset with heavy investments in innovation, new product launches and supporting the growth of our brands.
|
Other Results
|
|
|
|
|
|
|
in millions
|
|
|||||||||||
|
2017
|
|
|
2016
|
|
|
Change 2017
vs. 2016 |
|
|
2015
|
|
|
Change 2016
vs. 2015
|
|
|||||
Sales
|
$
|
349
|
|
|
$
|
380
|
|
|
$
|
(31
|
)
|
|
$
|
879
|
|
|
$
|
(499
|
)
|
Operating Loss
|
(106
|
)
|
|
(81
|
)
|
|
(25
|
)
|
|
(99
|
)
|
|
18
|
|
•
|
Sales
– Sales decreased due to a decline in average sales price and foreign produced sales volume.
|
•
|
Operating loss
– Operating loss increased primarily from $43 million of AdvancePierre third-party acquisition related costs, partially offset by better performance at our China operation and reduced other merger and integration costs outside of AdvancePierre.
|
•
|
Sales
–
Sales decreased due to the sale of the Mexico and Brazil chicken production operations in fiscal 2015.
|
•
|
Operating loss
– Operating loss improved due to better performance at our China operation and reduced third-party merger and integration costs partially offset by the results of the Mexico chicken production operation sold in fiscal 2015.
|
Cash Flows from Operating Activities
|
|
|
in millions
|
|
|||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income
|
$
|
1,778
|
|
|
$
|
1,772
|
|
|
$
|
1,224
|
|
Non-cash items in net income:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
761
|
|
|
705
|
|
|
711
|
|
|||
Deferred income taxes
|
(39
|
)
|
|
84
|
|
|
38
|
|
|||
Gain on dispositions of businesses
|
—
|
|
|
—
|
|
|
(177
|
)
|
|||
Impairment of assets
|
214
|
|
|
45
|
|
|
285
|
|
|||
Stock-based compensation expense
|
92
|
|
|
81
|
|
|
69
|
|
|||
Other, net
|
(57
|
)
|
|
(34
|
)
|
|
71
|
|
|||
Net changes in operating assets and liabilities
|
(150
|
)
|
|
63
|
|
|
349
|
|
|||
Net cash provided by operating activities
|
$
|
2,599
|
|
|
$
|
2,716
|
|
|
$
|
2,570
|
|
•
|
Gain on dispositions of businesses in fiscal 2015 primarily relates to the sale of the Mexico chicken production operation.
|
•
|
Impairment of assets included the following:
|
•
|
2017 –
Included a $73 million impairment of assets associated with restructuring and related charges, $45 million impairment related to the expected sale of a non-protein business and an impairment of $51 million related to our San Diego Prepared Foods operation. For further description regarding these charges refer to Part II, Item 8, Notes to Consolidated Financial Statements, Note 3: Acquisitions and Dispositions, Note 6: Restructuring and Related Charges and Note 10: Other Income and Charges.
|
•
|
2015 –
Included $59 million of impairment charges related to our Prepared Foods network optimization and $169 million of impairments related to our China operation. For further description regarding these charges refer to Part II, Item 8, Notes to Consolidated Financial Statements, Note 3: Acquisitions and Dispositions and Note 10: Other Income and Charges.
|
•
|
Other, net increase in fiscal 2015 is primarily driven by non-cash pension expense.
|
•
|
Cash flows associated with changes in operating assets and liabilities:
|
•
|
2017 –
Decreased primarily due to higher accounts receivable and inventory, partially offset by increased accounts payable and increased accrued salaries and wages. The higher accounts receivable, inventory and accounts payable balances are primarily attributable to price increases associated with higher input costs and the timing of sales and payments. The increase in accrued salaries and wages is primarily attributable to the restructuring accrual. For further description regarding this accrual refer to Part II, Item 8, Notes to Consolidated Financial Statements, Note 6: Restructuring and Related Charges.
|
•
|
2016 –
Increased primarily due to decreased inventory and accounts receivable balances and increased accrual for incentive compensation, which were partially offset by decreased accounts payable, increased tax receivable and contributions to pension plans. The decreased inventory, accounts receivable and accounts payable balances were largely due to decreased raw material costs and timing of sales and payments.
|
•
|
2015 –
Increased primarily due to the decrease in inventory and accounts receivable balances and an increase in taxes payable, partially offset by the decrease in accounts payable. The decreased inventory, accounts receivable and accounts payable balances were largely due to decreased raw material costs and timing of sales and payments.
|
Cash Flows from Investing Activities
|
|
|
|
in millions
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Additions to property, plant and equipment
|
$
|
(1,069
|
)
|
|
$
|
(695
|
)
|
|
$
|
(854
|
)
|
(Purchases of)/Proceeds from marketable securities, net
|
(18
|
)
|
|
(9
|
)
|
|
14
|
|
|||
Acquisitions, net of cash acquired
|
(3,081
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of businesses
|
—
|
|
|
—
|
|
|
539
|
|
|||
Other, net
|
4
|
|
|
20
|
|
|
31
|
|
|||
Net cash used for investing activities
|
$
|
(4,164
|
)
|
|
$
|
(684
|
)
|
|
$
|
(270
|
)
|
•
|
Additions to property, plant and equipment included spending for production growth, safety and animal well-being, in addition to acquiring new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities.
|
•
|
Capital spending for fiscal 2018 is expected to approximate $1.4 billion and will include spending for production growth, safety, animal well-being, infrastructure replacements and upgrades, and operational improvements that will result in production and labor efficiencies, yield improvements and sales channel flexibility.
|
•
|
Purchases of marketable securities included funding for our deferred compensation plans.
|
•
|
Proceeds from sale of businesses primarily included proceeds, net of cash transferred, from the sale of the Mexico and Brazil operations.
|
•
|
Acquisition, net of cash acquired, in fiscal 2017 related to acquiring AdvancePierre as part of our strategy to sustainably feed the world with the fastest growing portfolio of protein-packed brands. AdvancePierre's results from operations subsequent to the acquisition closing are included in the Prepared Foods and Chicken segments. For further description regarding this transaction refer to Part II, Item 8, Notes to the Consolidated Financial Statements, Note 3: Acquisition and Dispositions.
|
Cash Flows from Financing Activities
|
|
|
|
in millions
|
|
||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Payments on debt
|
$
|
(3,159
|
)
|
|
$
|
(714
|
)
|
|
$
|
(1,995
|
)
|
Proceeds from issuance of long-term debt
|
5,444
|
|
|
1
|
|
|
501
|
|
|||
Borrowings on revolving credit facility
|
1,810
|
|
|
1,065
|
|
|
1,345
|
|
|||
Payments on revolving credit facility
|
(2,110
|
)
|
|
(765
|
)
|
|
(1,345
|
)
|
|||
Proceeds from issuance of commercial paper
|
8,138
|
|
|
—
|
|
|
—
|
|
|||
Repayments of commercial paper
|
(7,360
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of AdvancePierre TRA liability
|
(223
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of Tyson Class A common stock
|
(860
|
)
|
|
(1,944
|
)
|
|
(495
|
)
|
|||
Dividends
|
(319
|
)
|
|
(216
|
)
|
|
(147
|
)
|
|||
Stock options exercised
|
154
|
|
|
128
|
|
|
84
|
|
|||
Other, net
|
15
|
|
|
68
|
|
|
17
|
|
|||
Net cash provided by (used for) financing activities
|
$
|
1,530
|
|
|
$
|
(2,377
|
)
|
|
$
|
(2,035
|
)
|
•
|
Payments on debt included –
|
•
|
2017 – We extinguished $1,146 million of AdvancePierre's debt, which we assumed in the acquisition, and fully retired the
$1,800 million
term loan tranche due June 2020, which was issued as part of the AdvancePierre acquisition financing.
|
•
|
2016 – We fully retired the $638 million outstanding balance of our 6.60% senior notes due April 2016.
|
•
|
2015 – We fully retired the $401 million outstanding balance of the 2.75% senior notes due September 2015 and paid $353 million related to the 5-year tranche A term loan facility and $1,172 million related to the 3-year tranche A term loan facility.
|
•
|
Proceeds from issuance of long-term debt and borrowings/payments on revolving credit facility –
|
•
|
2017 – Proceeds from issuance of long-term debt included a $1,800 million term loan and $2,743 million from senior unsecured notes after original issue discounts of $7 million, to fund the AdvancePierre acquisition. In addition, proceeds from issuance of long-term debt included $899 million of senior unsecured notes after original issue discounts of $1 million that was used to repay amounts outstanding under the term loan tranche due June 2020. We had net payments on our revolving credit facility of $300 million in fiscal 2017, which was used for general corporate purposes.
|
•
|
2016 – We had borrowings of $1,065 million and payments of $765 million on our revolving credit facility for fiscal 2016. We utilized our revolving credit facility to balance our cash position with the retirement of the 2016 Notes and changes in working capital. Additionally, total debt of our foreign subsidiaries was $7 million at October 1, 2016, $6 million of which is classified as long-term in our Consolidated Balance Sheets.
|
•
|
2015 – $500 million from term loans, the full balance of which was used to prepay outstanding borrowings under the 3-year tranche A term loan facility. In addition, we had borrowings and payments on our revolver of $1,345 million for fiscal 2015. We utilized our revolving credit facility to balance our cash position with term loan deleveraging and changes in working capital. Additionally, total debt of our foreign subsidiaries was $10 million at October 3, 2015, all of which is classified as long-term in our Consolidated Balance Sheets.
|
•
|
Proceeds from issuance and repayment of short-term debt in the form of commercial paper –
|
•
|
2017- We had net issuances of $778 million in unsecured short-term promissory notes (commercial paper) pursuant to our commercial paper program. We used the net proceeds from the commercial paper program as partial financing for the AdvancePierre acquisition and for general corporate purposes.
|
•
|
Payments on TRA obligation in the acquisition of AdvancePierre –
|
•
|
2017- AdvancePierre Tax Receivable Agreement (TRA) liability of $223 million was paid to its former shareholders as a result of our assumption of this obligation in the acquisition of AdvancePierre.
|
•
|
Purchases of Tyson Class A common stock include –
|
•
|
$797 million, $1,868 million, and $455 million for shares repurchased pursuant to our share repurchase program in fiscal 2017, 2016 and 2015, respectively.
|
•
|
$63 million, $76 million and $40 million for shares repurchased to fund certain obligations under our equity compensation plans in fiscal 2017, 2016 and 2015, respectively.
|
•
|
We currently do not plan to repurchase shares, other than to fund obligations under equity compensation programs, until we reach our net debt to EBITDA target of around 2x. We currently anticipate reaching this goal by the third quarter of fiscal 2018.
|
•
|
Dividends paid during fiscal 2017 included a 50% increase to our fiscal 2016 quarterly dividend rate.
|
•
|
Other, net increase in fiscal 2016 is primarily driven by tax benefits associated with stock option exercises.
|
Liquidity
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||
|
|
Commitments
Expiration Date
|
|
Facility
Amount
|
|
|
Outstanding Letters of
Credit (no draw downs)
|
|
|
Outstanding Amount
Borrowed
|
|
|
Amount
Available
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
$
|
318
|
|
||||||
Short-term investments
|
|
|
|
|
|
|
|
|
|
3
|
|
|||||||
Revolving credit facility
|
|
May 2022
|
|
$
|
1,500
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
1,492
|
|
|
Commercial Paper
|
|
|
|
|
|
|
|
|
|
(778
|
)
|
|||||||
Total liquidity
|
|
|
|
|
|
|
|
|
|
$
|
1,035
|
|
•
|
Liquidity includes cash and cash equivalents, short-term investments, and availability under our revolving credit facility, less outstanding commercial paper balance.
|
•
|
At September 30, 2017, we had current debt of $906 million, which we intend to repay with cash generated from our operating activities and other liquidity sources.
|
•
|
The revolving credit facility supports our short-term funding needs and letters of credit and also serves to backstop our commercial paper program. The letters of credit issued under this facility are primarily in support of leasing obligations and workers’ compensation insurance programs. Our maximum borrowing under the revolving credit facility during fiscal 2017 was $590 million.
|
•
|
We expect net interest expense will approximate $325 million for fiscal 2018.
|
•
|
At
September 30, 2017
, approximately $308 million of our cash was held in the accounts of our foreign subsidiaries. Generally, we do not rely on the foreign cash as a source of funds to support our ongoing domestic liquidity needs. Rather, we manage our worldwide cash requirements by reviewing available funds among our foreign subsidiaries and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of our foreign subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations. United States income taxes, net of applicable foreign tax credits, have not been provided on undistributed earnings of foreign subsidiaries. Our intention is to reinvest the cash held by foreign subsidiaries permanently or to repatriate the cash only when it is tax efficient to do so.
|
•
|
Our ratio of short-term assets to short-term liabilities ("current ratio") was
1.55
to 1 and
1.77
to 1 at
September 30, 2017
, and
October 1, 2016
, respectively.
|
Ratings Level (S&P/Moody's/Fitch)
|
Tranche B due August 2019 Borrowing Spread
|
|
Tranche B due August 2020 Borrowing Spread
|
|
BBB+/Baa1/BBB+ or higher
|
1.250
|
%
|
0.750
|
%
|
BBB/Baa2/BBB (current level)
|
1.500
|
%
|
0.800
|
%
|
BBB-/Baa3/BBB-
|
1.750
|
%
|
1.125
|
%
|
BB+/Ba1/BB+
|
2.000
|
%
|
1.375
|
%
|
BB/Ba2/BB or lower
|
2.500
|
%
|
1.375
|
%
|
Ratings Level (S&P/Moody's/Fitch)
|
Facility Fee
Rate
|
|
Undrawn Letter of
Credit Fee and
Borrowing Spread
|
|
A-/A3/A- or above
|
0.100
|
%
|
1.000
|
%
|
BBB+/Baa1/BBB+
|
0.125
|
%
|
1.125
|
%
|
BBB/Baa2/BBB (current level)
|
0.150
|
%
|
1.250
|
%
|
BBB-/Baa3/BBB-
|
0.200
|
%
|
1.500
|
%
|
BB+/Ba1/BB+ or lower
|
0.250
|
%
|
1.750
|
%
|
|
|
in millions
|
|
||||||||||||||||
|
Payments Due by Period
|
||||||||||||||||||
|
2018
|
|
|
2019-2020
|
|
|
2021-2022
|
|
|
2023 and thereafter
|
|
|
Total
|
|
|||||
Debt and capital lease obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Principal payments
(1)
|
$
|
906
|
|
|
$
|
3,274
|
|
|
$
|
1,518
|
|
|
$
|
4,552
|
|
|
$
|
10,250
|
|
Interest payments
(2)
|
341
|
|
|
613
|
|
|
492
|
|
|
2,159
|
|
|
3,605
|
|
|||||
Guarantees
(3)
|
22
|
|
|
57
|
|
|
44
|
|
|
15
|
|
|
138
|
|
|||||
Operating lease obligations
(4)
|
137
|
|
|
174
|
|
|
80
|
|
|
73
|
|
|
464
|
|
|||||
Purchase obligations
(5)
|
1,750
|
|
|
646
|
|
|
195
|
|
|
110
|
|
|
2,701
|
|
|||||
Capital expenditures
(6)
|
1,084
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
1,387
|
|
|||||
Other long-term liabilities
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|||||
Total contractual commitments
|
$
|
4,240
|
|
|
$
|
5,067
|
|
|
$
|
2,329
|
|
|
$
|
6,909
|
|
|
$
|
19,126
|
|
(1)
|
In the event of a default on payment, acceleration of the principal payments could occur.
|
(2)
|
Interest payments include interest on all outstanding debt. Payments are estimated for variable rate and variable term debt based on effective interest rates at
September 30, 2017
, and expected payment dates.
|
(3)
|
Amounts include guarantees of debt of outside third parties, which consist of leases and grower loans, all of which are substantially collateralized by the underlying assets, as well as residual value guarantees covering certain operating leases for various types of equipment. The amounts included are the maximum potential amount of future payments.
|
(4)
|
Amounts include minimum lease payments under lease agreements.
|
(5)
|
Amounts include agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The purchase obligations amount included items, such as future purchase commitments for grains, livestock contracts and fixed grower fees, that provide terms that meet the above criteria. For certain grain purchase commitments with a fixed quantity provision, we have assumed the future obligations under the commitment based on available commodity futures prices as published in observable active markets as of
September 30, 2017
. We have excluded future purchase commitments for contracts that do not meet these criteria. Purchase orders are not included in the table, as a purchase order is an authorization to purchase and is cancelable. Contracts for goods or services that contain termination clauses without penalty have also been excluded.
|
(6)
|
Amounts include estimated amounts to complete buildings and equipment under construction as of
September 30, 2017
.
|
(7)
|
Other long-term liabilities primarily consist of deferred compensation, deferred income, self-insurance, and asset retirement obligations. We are unable to reliably estimate the amount of these payments beyond fiscal 2018; therefore, we have only included the total liability in the table above. We also have employee benefit obligations consisting of pensions and other postretirement benefits of $258 million that are excluded from the table above. A discussion of the Company's pension and postretirement plans, including funding matters, is included in Part II, Item 8, Notes to Consolidated Financial Statements, Note 15: Pensions and Other Postretirement Benefits.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From
Assumptions
|
Contingent liabilities
|
|
|
|
|
We are subject to lawsuits, investigations and other claims related to wage and hour/labor, environmental, product, taxing authorities and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses.
A determination of the amount of reserves and disclosures required, if any, for these contingencies is made after considerable analysis of each individual issue. We accrue for contingent liabilities when an assessment of the risk of loss is probable and can be reasonably estimated. We disclose contingent liabilities when the risk of loss is reasonably possible or probable.
|
|
Our contingent liabilities contain uncertainties because the eventual outcome will result from future events, and determination of current reserves requires estimates and judgments related to future changes in facts and circumstances, differing interpretations of the law and assessments of the amount of damages, and the effectiveness of strategies or other factors beyond our control.
|
|
We have not made any material changes in the accounting methodology used to establish our contingent liabilities during the past three fiscal years.
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our contingent liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.
|
|
|
|
|
|
Marketing, advertising and promotion costs
|
|
|
|
|
We promote our products with marketing, advertising, trade promotions, and consumer incentives. These programs include, but are not limited to, coupons, discounts, rebates, volume-based incentives, cooperative advertising, and other programs.
Marketing, advertising, and promotion costs are charged to operations in the period incurred. We accrue costs based on the estimated performance, historical utilization and redemption rates of each program.
Cash consideration given to customers is considered a reduction in the price of our products, thus recorded as a reduction to sales. The remainder of marketing, advertising and promotion costs is recorded as a selling, general and administrative expense.
|
|
Recognition of the costs related to these programs contains uncertainties due to judgment required in estimating the potential performance, utilization and redemption rates of each program.
These estimates are based on many factors, including experience of similar promotional programs.
|
|
We have not made any material changes in the accounting methodology used to establish our marketing, advertising, and promotion accruals during the past three fiscal years.
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our marketing, advertising, and promotion accruals. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.
A 10% change in our marketing, advertising, and promotion accruals at September 30, 2017, would impact pretax earnings by approximately $15 million.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From
Assumptions
|
Accrued self-insurance
|
|
|
|
|
We are self-insured for certain losses related to health and welfare, workers’ compensation, auto liability and general liability claims.
We use an independent third-party actuary to assist in determining our self-insurance liability. We and the actuary consider a number of factors when estimating our self-insurance liability, including claims experience, demographic factors, severity factors and other actuarial assumptions.
We periodically review our estimates and assumptions with our third-party actuary to assist us in determining the adequacy of our self-insurance liability. Our policy is to maintain an accrual within the central to high point of the actuarial range.
|
|
Our self-insurance liability contains uncertainties due to assumptions required and judgment used.
Costs to settle our obligations, including legal and healthcare costs, could increase or decrease causing estimates of our self-insurance liability to change.
Incident rates, including frequency and severity, could increase or decrease causing estimates in our self-insurance liability to change.
|
|
We have not made any material changes in the accounting methodology used to establish our self-insurance liability during the past three fiscal years.
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our self-insurance liability. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.
A 10% increase in the actuarial estimate at September 30, 2017, would result in an increase in the amount we recorded for our self-insurance liability of approximately $27 million. A 10% decrease in the actuarial estimate at September 30, 2017, would result in a decrease in the amount we recorded for our self-insurance liability of approximately $11 million.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From
Assumptions
|
Defined benefit pension plans
|
|
|
|
|
We sponsor nine defined benefit pension plans that provide retirement benefits to certain employees. We also participate in a multi-employer plan that provides defined benefits to certain employees covered by collective bargaining agreements. Such plans are usually administered by a board of trustees composed of the management of the participating companies and labor representatives.
We use independent third-party actuaries to assist us in determining our pension obligations and net periodic benefit cost. We and the actuaries review assumptions that include estimates of the present value of the projected future pension payment to all plan participants, taking into consideration the likelihood of potential future events such as salary increases and demographic experience. We accumulate and amortize the effect of actuarial gains and losses over future periods.
Net periodic benefit cost for the defined benefit pension plans was $28 million in fiscal 2017. The projected benefit obligation was $1,707 million at the end of fiscal 2017. Unrecognized actuarial gain was $44 million at the end of fiscal 2017. We currently expect net periodic benefit cost for fiscal 2018 to be approximately $15 million, excluding the pending settlement as described in Note 15: Pension and Other Postretirement Benefits.
Plan assets are currently comprised of approximately 87% fixed income securities and 9% equity securities. Fixed income securities can include, but are not limited to, direct bond investments and pooled or indirect bond investments. Other investments may include, but are not limited to, international and domestic equities, real estate, commodities and private equity.
We expect to contribute approximately $38 million of cash to our pension plans in fiscal 2018. The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors, including minimum funding requirements.
|
|
Our defined benefit pension plans contain uncertainties due to assumptions required and judgments used.
The key assumptions used in developing the required estimates include such factors as discount rates, expected returns on plan assets, retirement rates, and mortality. These assumptions can have a material impact upon the funded status and the net periodic benefit cost.
The discount rates were determined using a cash flow matching technique whereby the rates of a yield curve, developed from high-quality debt securities, were applied to the benefit obligations to determine the appropriate discount rate. In determining the long-term rate of return on plan assets, we first examined historical rates of return for the various asset classes within the plans. We then determined a long-term projected rate-of-return based on expected returns. Investment, management and other fees paid out of plan assets are factored into the determination of asset return assumptions. Retirement rates are based primarily on actual plan experience, while standard actuarial tables are used to estimate mortality.
It is reasonably likely that changes in external factors will result in changes to the assumptions used to measure pension obligations and net periodic benefit cost in future periods.
The risks of participating in multi-employer plans are different from single-employer plans. The net pension cost of the multi-employer plans is equal to the annual contribution determined in accordance with the provisions of negotiated labor contracts. Assets contributed to such plans are not segregated or otherwise restricted to provide benefits only to our employees. The future cost of these plans is dependent on a number of factors including the funded status of the plans and the ability of the other participating companies to meet ongoing funding obligations.
|
|
We have not made any material changes in the accounting methodology used to establish our pension obligations and net periodic benefit cost during the past three fiscal years.
We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our pension obligations and net periodic benefit cost. However, if actual results are not consistent with our estimates or assumptions, they are accumulated and amortized over future periods and, therefore generally affect the net periodic benefit cost in future periods.
A 1% increase in the discount rate at September 30, 2017, would result in a decrease in the projected benefit obligation and net periodic benefit cost of approximately $187 million and $19 million, respectively. A 1% decrease in the discount rate at September 30, 2017, would result in an increase in the projected benefit obligation and net periodic benefit cost of approximately $229 million and $14 million, respectively.
A 1% change in the return on plan assets at September 30, 2017, would impact the net periodic benefit cost by approximately $15 million.
The sensitivities reflect the impact of changing one assumption at a time with the remaining assumptions held constant. Economic factors and conditions often affect multiple assumptions simultaneously and that the effect of changes in assumptions are not necessarily linear.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ From
Assumptions
|
Income taxes
|
|
|
|
|
We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income.
Federal income tax includes an estimate for taxes on earnings of foreign subsidiaries expected to be taxable upon remittance to the United States, except for earnings considered to be indefinitely invested in the foreign subsidiary.
Deferred income taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse.
Valuation allowances are recorded when it is likely a tax benefit will not be realized for a deferred tax asset.
We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due.
|
|
Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future.
Changes in projected future earnings could affect the recorded valuation allowances in the future.
Our calculations related to income taxes contain uncertainties due to judgment used to calculate tax liabilities in the application of complex tax regulations across the tax jurisdictions where we operate.
Our analysis of unrecognized tax benefits contains uncertainties based on judgment used to apply the more likely than not recognition and measurement thresholds.
|
|
We do not believe there is a reasonable likelihood there will be a material change in the tax related balances or valuation allowances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.
To the extent we prevail in matters for which unrecognized tax benefit liabilities have been established, or are required to pay amounts in excess of our recorded unrecognized tax benefit liabilities, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of our cash and generally result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement would generally be recognized as a reduction in our effective tax rate in the period of resolution.
|
Effect of 10% change in fair value
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
||
Livestock:
|
|
|
|
||||
Live Cattle
|
$
|
23
|
|
|
$
|
5
|
|
Lean Hogs
|
16
|
|
|
7
|
|
||
Grain:
|
|
|
|
||||
Corn
|
17
|
|
|
26
|
|
||
Soy Meal
|
13
|
|
|
8
|
|
|
Three years ended September 30, 2017
|
|
|||||||||
|
in millions, except per share data
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Sales
|
$
|
38,260
|
|
|
$
|
36,881
|
|
|
$
|
41,373
|
|
Cost of Sales
|
33,177
|
|
|
32,184
|
|
|
37,456
|
|
|||
Gross Profit
|
5,083
|
|
|
4,697
|
|
|
3,917
|
|
|||
Selling, General and Administrative
|
2,152
|
|
|
1,864
|
|
|
1,748
|
|
|||
Operating Income
|
2,931
|
|
|
2,833
|
|
|
2,169
|
|
|||
Other (Income) Expense:
|
|
|
|
|
|
||||||
Interest income
|
(7
|
)
|
|
(6
|
)
|
|
(9
|
)
|
|||
Interest expense
|
279
|
|
|
249
|
|
|
293
|
|
|||
Other, net
|
31
|
|
|
(8
|
)
|
|
(36
|
)
|
|||
Total Other (Income) Expense
|
303
|
|
|
235
|
|
|
248
|
|
|||
Income before Income Taxes
|
2,628
|
|
|
2,598
|
|
|
1,921
|
|
|||
Income Tax Expense
|
850
|
|
|
826
|
|
|
697
|
|
|||
Net Income
|
1,778
|
|
|
1,772
|
|
|
1,224
|
|
|||
Less: Net Income Attributable to Noncontrolling Interests
|
4
|
|
|
4
|
|
|
4
|
|
|||
Net Income Attributable to Tyson
|
$
|
1,774
|
|
|
$
|
1,768
|
|
|
$
|
1,220
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
||||||
Class A Basic
|
296
|
|
|
315
|
|
|
335
|
|
|||
Class B Basic
|
70
|
|
|
70
|
|
|
70
|
|
|||
Diluted
|
370
|
|
|
390
|
|
|
413
|
|
|||
Net Income Per Share Attributable to Tyson:
|
|
|
|
|
|
||||||
Class A Basic
|
$
|
4.94
|
|
|
$
|
4.67
|
|
|
$
|
3.06
|
|
Class B Basic
|
$
|
4.45
|
|
|
$
|
4.24
|
|
|
$
|
2.79
|
|
Diluted
|
$
|
4.79
|
|
|
$
|
4.53
|
|
|
$
|
2.95
|
|
Dividends Declared Per Share:
|
|
|
|
|
|
||||||
Class A
|
$
|
0.975
|
|
|
$
|
0.650
|
|
|
$
|
0.425
|
|
Class B
|
$
|
0.878
|
|
|
$
|
0.585
|
|
|
$
|
0.383
|
|
|
Three years ended September 30, 2017
|
|
|||||||||
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net Income
|
$
|
1,778
|
|
|
$
|
1,772
|
|
|
$
|
1,224
|
|
Other Comprehensive Income (Loss), Net of Taxes:
|
|
|
|
|
|
||||||
Derivatives accounted for as cash flow hedges
|
—
|
|
|
(1
|
)
|
|
2
|
|
|||
Investments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Currency translation
|
6
|
|
|
4
|
|
|
36
|
|
|||
Postretirement benefits
|
56
|
|
|
42
|
|
|
20
|
|
|||
Total Other Comprehensive Income (Loss), Net of Taxes
|
61
|
|
|
45
|
|
|
57
|
|
|||
Comprehensive Income
|
1,839
|
|
|
1,817
|
|
|
1,281
|
|
|||
Less: Comprehensive Income Attributable to Noncontrolling Interests
|
4
|
|
|
4
|
|
|
4
|
|
|||
Comprehensive Income Attributable to Tyson
|
$
|
1,835
|
|
|
$
|
1,813
|
|
|
$
|
1,277
|
|
September 30, 2017, and October 1, 2016
|
|
||||||
in millions, except share and per share data
|
|
||||||
|
2017
|
|
|
2016
|
|
||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
318
|
|
|
$
|
349
|
|
Accounts receivable, net
|
1,675
|
|
|
1,542
|
|
||
Inventories
|
3,239
|
|
|
2,732
|
|
||
Other current assets
|
219
|
|
|
265
|
|
||
Assets held for sale
|
807
|
|
|
—
|
|
||
Total Current Assets
|
6,258
|
|
|
4,888
|
|
||
Net Property, Plant and Equipment
|
5,568
|
|
|
5,170
|
|
||
Goodwill
|
9,324
|
|
|
6,669
|
|
||
Intangible Assets, net
|
6,243
|
|
|
5,084
|
|
||
Other Assets
|
673
|
|
|
562
|
|
||
Total Assets
|
$
|
28,066
|
|
|
$
|
22,373
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current debt
|
$
|
906
|
|
|
$
|
79
|
|
Accounts payable
|
1,698
|
|
|
1,511
|
|
||
Other current liabilities
|
1,424
|
|
|
1,172
|
|
||
Liabilities held for sale
|
4
|
|
|
—
|
|
||
Total Current Liabilities
|
4,032
|
|
|
2,762
|
|
||
Long-Term Debt
|
9,297
|
|
|
6,200
|
|
||
Deferred Income Taxes
|
2,979
|
|
|
2,545
|
|
||
Other Liabilities
|
1,199
|
|
|
1,242
|
|
||
Commitments and Contingencies (Note 20)
|
|
|
|
|
|||
Shareholders’ Equity:
|
|
|
|
||||
Common stock ($0.10 par value):
|
|
|
|
||||
Class A-authorized 900 million shares, issued 378 million shares in 2017 and 364 million shares in 2016
|
38
|
|
|
36
|
|
||
Convertible Class B-authorized 900 million shares, issued 70 million shares
|
7
|
|
|
7
|
|
||
Capital in excess of par value
|
4,378
|
|
|
4,355
|
|
||
Retained earnings
|
9,776
|
|
|
8,348
|
|
||
Accumulated other comprehensive gain (loss)
|
16
|
|
|
(45
|
)
|
||
Treasury stock, at cost – 80 million shares in 2017 and 73 million shares in 2016
|
(3,674
|
)
|
|
(3,093
|
)
|
||
Total Tyson Shareholders’ Equity
|
10,541
|
|
|
9,608
|
|
||
Noncontrolling Interests
|
18
|
|
|
16
|
|
||
Total Shareholders’ Equity
|
10,559
|
|
|
9,624
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
28,066
|
|
|
$
|
22,373
|
|
|
|
|
|
|
Three years ended September 30, 2017
|
|
||||||||||||||
|
|
|
|
|
|
|
in millions
|
|
||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|||
Class A Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
364
|
|
|
$
|
36
|
|
|
346
|
|
|
$
|
35
|
|
|
346
|
|
|
$
|
35
|
|
Issuance of Class A common stock
|
14
|
|
|
2
|
|
|
18
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
378
|
|
|
38
|
|
|
364
|
|
|
36
|
|
|
346
|
|
|
35
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Class B Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning and end of year
|
70
|
|
|
7
|
|
|
70
|
|
|
7
|
|
|
70
|
|
|
7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital in Excess of Par Value:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
4,355
|
|
|
|
|
4,307
|
|
|
|
|
4,257
|
|
||||||
Stock-based compensation
|
|
|
23
|
|
|
|
|
48
|
|
|
|
|
50
|
|
||||||
Balance at end of year
|
|
|
4,378
|
|
|
|
|
4,355
|
|
|
|
|
4,307
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retained Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
8,348
|
|
|
|
|
6,813
|
|
|
|
|
5,748
|
|
||||||
Net income attributable to Tyson
|
|
|
1,774
|
|
|
|
|
1,768
|
|
|
|
|
1,220
|
|
||||||
Dividends
|
|
|
(346
|
)
|
|
|
|
(233
|
)
|
|
|
|
(155
|
)
|
||||||
Balance at end of year
|
|
|
9,776
|
|
|
|
|
8,348
|
|
|
|
|
6,813
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
(45
|
)
|
|
|
|
(90
|
)
|
|
|
|
(147
|
)
|
||||||
Other Comprehensive Income (Loss)
|
|
|
61
|
|
|
|
|
45
|
|
|
|
|
57
|
|
||||||
Balance at end of year
|
|
|
16
|
|
|
|
|
(45
|
)
|
|
|
|
(90
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Treasury Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
73
|
|
|
(3,093
|
)
|
|
47
|
|
|
(1,381
|
)
|
|
40
|
|
|
(1,010
|
)
|
|||
Purchase of Class A common stock
|
14
|
|
|
(860
|
)
|
|
32
|
|
|
(1,944
|
)
|
|
12
|
|
|
(495
|
)
|
|||
Stock-based compensation
|
(7
|
)
|
|
279
|
|
|
(6
|
)
|
|
232
|
|
|
(5
|
)
|
|
124
|
|
|||
Balance at end of year
|
80
|
|
|
(3,674
|
)
|
|
73
|
|
|
(3,093
|
)
|
|
47
|
|
|
(1,381
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Shareholders’ Equity Attributable to Tyson
|
|
|
$
|
10,541
|
|
|
|
|
$
|
9,608
|
|
|
|
|
$
|
9,691
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity Attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
$
|
16
|
|
|
|
|
$
|
15
|
|
|
|
|
$
|
14
|
|
|||
Net income attributable to noncontrolling interests
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
4
|
|
||||||
Contributions by noncontrolling interest
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Distributions to noncontrolling interest
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
|
|
|
(1
|
)
|
||||||
Net foreign currency translation adjustment and other
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
||||||
Total Equity Attributable to Noncontrolling Interests
|
|
|
$
|
18
|
|
|
|
|
$
|
16
|
|
|
|
|
$
|
15
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Shareholders’ Equity
|
|
|
$
|
10,559
|
|
|
|
|
$
|
9,624
|
|
|
|
|
$
|
9,706
|
|
|
Three years ended September 30, 2017
|
|
|||||||||
|
in millions
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash Flows From Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,778
|
|
|
$
|
1,772
|
|
|
$
|
1,224
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
642
|
|
|
617
|
|
|
609
|
|
|||
Amortization
|
119
|
|
|
88
|
|
|
102
|
|
|||
Deferred income taxes
|
(39
|
)
|
|
84
|
|
|
38
|
|
|||
Loss on dispositions of businesses
|
—
|
|
|
—
|
|
|
(177
|
)
|
|||
Impairment of assets
|
214
|
|
|
45
|
|
|
285
|
|
|||
Share-based compensation expense
|
92
|
|
|
81
|
|
|
69
|
|
|||
Other, net
|
(57
|
)
|
|
(34
|
)
|
|
71
|
|
|||
(Increase) decrease in accounts receivable
|
(55
|
)
|
|
73
|
|
|
66
|
|
|||
(Increase) decrease in inventories
|
(246
|
)
|
|
148
|
|
|
220
|
|
|||
Increase (decrease) in accounts payable
|
61
|
|
|
(130
|
)
|
|
(162
|
)
|
|||
Increase (decrease) in income taxes payable/receivable
|
55
|
|
|
(19
|
)
|
|
177
|
|
|||
Increase (decrease) in interest payable
|
16
|
|
|
(1
|
)
|
|
(23
|
)
|
|||
Net changes in other operating assets and liabilities
|
19
|
|
|
(8
|
)
|
|
71
|
|
|||
Cash Provided by Operating Activities
|
2,599
|
|
|
2,716
|
|
|
2,570
|
|
|||
Cash Flows From Investing Activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(1,069
|
)
|
|
(695
|
)
|
|
(854
|
)
|
|||
Purchases of marketable securities
|
(79
|
)
|
|
(46
|
)
|
|
(38
|
)
|
|||
Proceeds from sale of marketable securities
|
61
|
|
|
37
|
|
|
52
|
|
|||
Acquisitions, net of cash acquired
|
(3,081
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of businesses
|
—
|
|
|
—
|
|
|
539
|
|
|||
Other, net
|
4
|
|
|
20
|
|
|
31
|
|
|||
Cash Used for Investing Activities
|
(4,164
|
)
|
|
(684
|
)
|
|
(270
|
)
|
|||
Cash Flows From Financing Activities:
|
|
|
|
|
|
||||||
Payments on debt
|
(3,159
|
)
|
|
(714
|
)
|
|
(1,995
|
)
|
|||
Proceeds from issuance of long-term debt
|
5,444
|
|
|
1
|
|
|
501
|
|
|||
Borrowings on revolving credit facility
|
1,810
|
|
|
1,065
|
|
|
1,345
|
|
|||
Payments on revolving credit facility
|
(2,110
|
)
|
|
(765
|
)
|
|
(1,345
|
)
|
|||
Proceeds from issuance of commercial paper
|
8,138
|
|
|
—
|
|
|
—
|
|
|||
Repayments of commercial paper
|
(7,360
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of AdvancePierre TRA liability
|
(223
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of Tyson Class A common stock
|
(860
|
)
|
|
(1,944
|
)
|
|
(495
|
)
|
|||
Dividends
|
(319
|
)
|
|
(216
|
)
|
|
(147
|
)
|
|||
Stock options exercised
|
154
|
|
|
128
|
|
|
84
|
|
|||
Other, net
|
15
|
|
|
68
|
|
|
17
|
|
|||
Cash Provided by (Used for) Financing Activities
|
1,530
|
|
|
(2,377
|
)
|
|
(2,035
|
)
|
|||
Effect of Exchange Rate Change on Cash
|
4
|
|
|
6
|
|
|
(15
|
)
|
|||
Decrease in Cash and Cash Equivalents
|
(31
|
)
|
|
(339
|
)
|
|
250
|
|
|||
Cash and Cash Equivalents at Beginning of Year
|
349
|
|
|
688
|
|
|
438
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
318
|
|
|
$
|
349
|
|
|
$
|
688
|
|
|
|
|
in millions
|
|
|||
|
2017
|
|
|
2016
|
|
||
Processed products
|
$
|
1,947
|
|
|
$
|
1,530
|
|
Livestock
|
874
|
|
|
772
|
|
||
Supplies and other
|
418
|
|
|
430
|
|
||
Total inventory
|
$
|
3,239
|
|
|
$
|
2,732
|
|
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
||
Accrued salaries, wages and benefits
|
$
|
673
|
|
|
$
|
563
|
|
Accrued marketing, advertising and promotion expense
|
146
|
|
|
212
|
|
||
Other
|
605
|
|
|
397
|
|
||
Total other current liabilities
|
$
|
1,424
|
|
|
$
|
1,172
|
|
|
in millions
|
|
||
Cash and cash equivalents
|
|
$
|
126
|
|
Accounts receivable
|
|
80
|
|
|
Inventories
|
|
272
|
|
|
Other current assets
|
|
5
|
|
|
Property, Plant and Equipment
|
|
302
|
|
|
Goodwill
|
|
2,982
|
|
|
Intangible Assets
|
|
1,515
|
|
|
Current debt
|
|
(1,148
|
)
|
|
Accounts payable
|
|
(114
|
)
|
|
Other current liabilities
|
|
(97
|
)
|
|
Tax receivable agreement (TRA) due to former shareholders
|
|
(223
|
)
|
|
Long-Term Debt
|
|
(33
|
)
|
|
Deferred Income Taxes
|
|
(457
|
)
|
|
Other Liabilities
|
|
(3
|
)
|
|
Net assets acquired
|
|
$
|
3,207
|
|
|
|
|
|
|
|
in millions
|
|
|
Intangible Asset Category
|
|
Type
|
|
Life in Years
|
|
Fair Value
|
||
Brands & Trademarks
|
|
Amortizable
|
|
Weighted Average of 15 years
|
|
$
|
390
|
|
Customer Relationships
|
|
Amortizable
|
|
Weighted Average of 15 years
|
|
1,125
|
|
|
Total identifiable intangible assets
|
|
|
|
|
|
$
|
1,515
|
|
|
|
in millions (unaudited)
|
|
|||||
|
|
2017
|
|
|
2016
|
|
||
Pro forma sales
|
|
$
|
39,330
|
|
|
$
|
38,406
|
|
Pro forma net income attributable to Tyson
|
|
1,837
|
|
|
1,686
|
|
||
Pro forma net income per diluted share attributable to Tyson
|
|
$
|
4.97
|
|
|
$
|
4.32
|
|
|
in millions
|
|
|
|
September 30, 2017
|
||
Assets held for sale:
|
|
||
Accounts receivable, net
|
$
|
2
|
|
Inventories
|
109
|
|
|
Net Property, Plant and Equipment
|
192
|
|
|
Other current assets
|
1
|
|
|
Goodwill
|
312
|
|
|
Intangible Assets, net
|
191
|
|
|
Total assets held for sale
|
$
|
807
|
|
Liabilities held for sale:
|
|
||
Accounts payable
|
$
|
1
|
|
Other current liabilities
|
3
|
|
|
Total liabilities held for sale
|
$
|
4
|
|
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
||
Land
|
$
|
138
|
|
|
$
|
126
|
|
Building and leasehold improvements
|
3,878
|
|
|
3,662
|
|
||
Machinery and equipment
|
7,111
|
|
|
6,789
|
|
||
Land improvements and other
|
323
|
|
|
300
|
|
||
Buildings and equipment under construction
|
492
|
|
|
290
|
|
||
|
11,942
|
|
|
11,167
|
|
||
Less accumulated depreciation
|
6,374
|
|
|
5,997
|
|
||
Net property, plant and equipment
|
$
|
5,568
|
|
|
$
|
5,170
|
|
in millions
|
|
||||||||||||||||||||||||||
|
Beef
|
|
|
Pork
|
|
|
Chicken
|
|
|
Prepared
Foods
|
|
|
Other
(a)
|
|
|
Unallocated
|
|
|
Consolidated
|
|
|||||||
Balance at October 3, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Goodwill
|
$
|
1,236
|
|
|
$
|
423
|
|
|
$
|
1,563
|
|
|
$
|
4,005
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
7,284
|
|
Accumulated impairment losses
|
(560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(617
|
)
|
|||||||
|
676
|
|
|
423
|
|
|
1,563
|
|
|
4,005
|
|
|
—
|
|
|
—
|
|
|
6,667
|
|
|||||||
Fiscal 2016 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Currency translation and other
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Balance at October 1, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Goodwill
|
1,236
|
|
|
423
|
|
|
1,565
|
|
|
4,005
|
|
|
57
|
|
|
—
|
|
|
7,286
|
|
|||||||
Accumulated impairment losses
|
(560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(617
|
)
|
|||||||
|
$
|
676
|
|
|
$
|
423
|
|
|
$
|
1,565
|
|
|
$
|
4,005
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fiscal 2017 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,982
|
|
|
2,982
|
|
|||||||
Reclass to assets held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
(327
|
)
|
|
—
|
|
|
—
|
|
|
(327
|
)
|
|||||||
Balance at September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Goodwill
|
1,236
|
|
|
423
|
|
|
1,565
|
|
|
3,678
|
|
|
57
|
|
|
2,982
|
|
|
9,941
|
|
|||||||
Accumulated impairment losses
|
(560
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(617
|
)
|
|||||||
|
$
|
676
|
|
|
$
|
423
|
|
|
$
|
1,565
|
|
|
$
|
3,678
|
|
|
$
|
—
|
|
|
$
|
2,982
|
|
|
$
|
9,324
|
|
in millions
|
|
||||||
|
2017
|
|
|
2016
|
|
||
Amortizable intangible assets:
|
|
|
|
||||
Brands and trademarks
|
$
|
738
|
|
|
$
|
590
|
|
Customer relationships
|
1,639
|
|
|
564
|
|
||
Patents, intellectual property and other
|
114
|
|
|
114
|
|
||
Land use rights
|
9
|
|
|
9
|
|
||
Total gross amortizable intangible assets
|
$
|
2,500
|
|
|
$
|
1,277
|
|
Less accumulated amortization
|
335
|
|
|
271
|
|
||
Total net amortizable intangible assets
|
$
|
2,165
|
|
|
$
|
1,006
|
|
Brands and trademarks not subject to amortization
|
4,078
|
|
|
4,078
|
|
||
Total intangible assets
|
$
|
6,243
|
|
|
$
|
5,084
|
|
in millions
|
|
||
|
2017
|
|
|
Cost of Sales
|
$
|
35
|
|
Selling, General and Administrative expenses
|
115
|
|
|
Total restructuring and related charges, pretax
|
$
|
150
|
|
|
in millions
|
|
|||||||
|
2017 charges
|
|
Estimated 2018 charges
|
|
Total estimated Financial Fitness Program charges
|
|
|||
Beef
|
$
|
8
|
|
$
|
6
|
|
$
|
14
|
|
Pork
|
3
|
|
2
|
|
5
|
|
|||
Chicken
|
56
|
|
32
|
|
88
|
|
|||
Prepared Foods
|
82
|
|
25
|
|
107
|
|
|||
Other
|
1
|
|
—
|
|
1
|
|
|||
Total restructuring and related charges, pretax
|
$
|
150
|
|
$
|
65
|
|
$
|
215
|
|
in millions
|
|
|||||||||||
|
Restructuring charges
|
Payments
|
Other
|
Ending liability
|
||||||||
Severance and employee related costs
|
$
|
51
|
|
$
|
4
|
|
$
|
—
|
|
$
|
47
|
|
Contract termination
|
22
|
|
—
|
|
—
|
|
22
|
|
||||
Total
|
$
|
73
|
|
$
|
4
|
|
$
|
—
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|||||||||
|
|
September 30, 2017
|
|
October 1, 2016
|
|
October 3, 2015
|
|||||||||||||||
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||||
Shares repurchased:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Under share repurchase program
|
|
12.5
|
|
|
$
|
797
|
|
|
30.8
|
|
|
$
|
1,868
|
|
|
11.0
|
|
|
$
|
455
|
|
To fund certain obligations under equity compensation plans
|
|
1.0
|
|
|
63
|
|
|
1.3
|
|
|
76
|
|
|
0.9
|
|
|
40
|
|
|||
Total share repurchases
|
|
13.5
|
|
|
$
|
860
|
|
|
32.1
|
|
|
$
|
1,944
|
|
|
11.9
|
|
|
$
|
495
|
|
|
|
|
in millions, except price per TEU
|
||||||||
|
Equity Component
|
|
Debt Component
|
|
Total
|
||||||
Price per TEU
|
$
|
43.17
|
|
|
$
|
6.83
|
|
|
$
|
50.00
|
|
Gross Proceeds
|
1,295
|
|
|
205
|
|
|
1,500
|
|
|||
Issuance cost
|
(40
|
)
|
|
(6
|
)
|
|
(46
|
)
|
|||
Net proceeds
|
$
|
1,255
|
|
|
$
|
199
|
|
|
$
|
1,454
|
|
|
|
|
|
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Federal
|
$
|
755
|
|
|
$
|
710
|
|
|
$
|
564
|
|
State
|
81
|
|
|
118
|
|
|
89
|
|
|||
Foreign
|
14
|
|
|
(2
|
)
|
|
44
|
|
|||
|
$
|
850
|
|
|
$
|
826
|
|
|
$
|
697
|
|
|
|
|
|
|
|
||||||
Current
|
$
|
889
|
|
|
$
|
742
|
|
|
$
|
659
|
|
Deferred
|
(39
|
)
|
|
84
|
|
|
38
|
|
|||
|
$
|
850
|
|
|
$
|
826
|
|
|
$
|
697
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes
|
2.3
|
|
|
2.7
|
|
|
3.1
|
|
Unrecognized tax benefits, net
|
(0.1
|
)
|
|
(1.7
|
)
|
|
(1.8
|
)
|
Domestic production deduction
|
(3.1
|
)
|
|
(2.6
|
)
|
|
(3.7
|
)
|
Foreign rate differences and valuation allowances
|
0.3
|
|
|
—
|
|
|
3.8
|
|
Other
|
(2.1
|
)
|
|
(1.6
|
)
|
|
(0.1
|
)
|
|
32.3
|
%
|
|
31.8
|
%
|
|
36.3
|
%
|
|
|
|
|
|
|
|
in millions
|
|
|||||||
|
2017
|
|
2016
|
||||||||||||
|
Deferred Tax
|
|
Deferred Tax
|
||||||||||||
|
Assets
|
|
|
Liabilities
|
|
|
Assets
|
|
|
Liabilities
|
|
||||
Property, plant and equipment
|
$
|
—
|
|
|
$
|
900
|
|
|
$
|
—
|
|
|
$
|
857
|
|
Intangible assets
|
—
|
|
|
2,424
|
|
|
—
|
|
|
1,979
|
|
||||
Accrued expenses
|
400
|
|
|
—
|
|
|
400
|
|
|
—
|
|
||||
Net operating loss and other carryforwards
|
97
|
|
|
—
|
|
|
86
|
|
|
—
|
|
||||
Other
|
204
|
|
|
273
|
|
|
140
|
|
|
259
|
|
||||
|
$
|
701
|
|
|
$
|
3,597
|
|
|
$
|
626
|
|
|
$
|
3,095
|
|
Valuation allowance
|
$
|
(75
|
)
|
|
|
|
$
|
(72
|
)
|
|
|
||||
Net deferred tax liability
|
|
|
$
|
2,971
|
|
|
|
|
$
|
2,541
|
|
|
|
|
|
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Balance as of the beginning of the year
|
$
|
305
|
|
|
$
|
306
|
|
|
$
|
272
|
|
Increases related to current year tax positions
|
38
|
|
|
35
|
|
|
78
|
|
|||
Increases related to prior year tax positions
|
5
|
|
|
31
|
|
|
11
|
|
|||
Increase related to AdvancePierre acquisition
|
9
|
|
|
—
|
|
|
—
|
|
|||
Reductions related to prior year tax positions
|
(27
|
)
|
|
(48
|
)
|
|
(18
|
)
|
|||
Reductions related to settlements
|
(4
|
)
|
|
(7
|
)
|
|
—
|
|
|||
Reductions related to expirations of statutes of limitations
|
(10
|
)
|
|
(12
|
)
|
|
(37
|
)
|
|||
Balance as of the end of the year
|
$
|
316
|
|
|
$
|
305
|
|
|
$
|
306
|
|
|
in millions, except per share data
|
|
|||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,778
|
|
|
$
|
1,772
|
|
|
$
|
1,224
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
4
|
|
|
4
|
|
|
4
|
|
|||
Net income attributable to Tyson
|
1,774
|
|
|
1,768
|
|
|
1,220
|
|
|||
Less dividends declared:
|
|
|
|
|
|
||||||
Class A
|
285
|
|
|
192
|
|
|
129
|
|
|||
Class B
|
61
|
|
|
41
|
|
|
26
|
|
|||
Undistributed earnings
|
$
|
1,428
|
|
|
$
|
1,535
|
|
|
$
|
1,065
|
|
|
|
|
|
|
|
||||||
Class A undistributed earnings
|
$
|
1,177
|
|
|
$
|
1,279
|
|
|
$
|
896
|
|
Class B undistributed earnings
|
251
|
|
|
256
|
|
|
169
|
|
|||
Total undistributed earnings
|
$
|
1,428
|
|
|
$
|
1,535
|
|
|
$
|
1,065
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic earnings per share:
|
|
|
|
|
|
||||||
Class A weighted average shares
|
296
|
|
|
315
|
|
|
335
|
|
|||
Class B weighted average shares, and shares under if-converted method for diluted earnings per share
|
70
|
|
|
70
|
|
|
70
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options and restricted stock
|
4
|
|
|
5
|
|
|
5
|
|
|||
Tangible Equity Units
|
—
|
|
|
—
|
|
|
3
|
|
|||
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversions
|
370
|
|
|
390
|
|
|
413
|
|
|||
|
|
|
|
|
|
||||||
Net Income Per Share Attributable to Tyson:
|
|
|
|
|
|
||||||
Class A Basic
|
$
|
4.94
|
|
|
$
|
4.67
|
|
|
$
|
3.06
|
|
Class B Basic
|
$
|
4.45
|
|
|
$
|
4.24
|
|
|
$
|
2.79
|
|
Diluted
|
$
|
4.79
|
|
|
$
|
4.53
|
|
|
$
|
2.95
|
|
|
|
|
|
in millions, except soy meal tons
|
|
|||
|
|
Metric
|
|
September 30, 2017
|
|
|
October 1, 2016
|
|
Corn
|
|
Bushels
|
|
55
|
|
|
50
|
|
Soy Meal
|
|
Tons
|
|
475,200
|
|
|
389,700
|
|
Live Cattle
|
|
Pounds
|
|
211
|
|
|
28
|
|
Lean Hogs
|
|
Pounds
|
|
240
|
|
|
158
|
|
Foreign Currency
|
|
United States dollar
|
|
58
|
|
|
38
|
|
•
|
Cash Flow Hedges – include certain commodity forward and option contracts of forecasted purchases (i.e., grains) and certain foreign exchange forward contracts.
|
•
|
Fair Value Hedges – include certain commodity forward contracts of firm commitments (i.e., livestock).
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
Gain (Loss)
Recognized in OCI
on Derivatives
|
|
|
Consolidated
Statements of Income
Classification
|
|
Gain (Loss)
Reclassified from
OCI to Earnings
|
|
||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
||||||
Cash Flow Hedge – Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity contracts
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
Cost of Sales
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
(7
|
)
|
Foreign exchange contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
Other Income/Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
(7
|
)
|
|
|
in millions
|
|
|||||||||||
|
|
Consolidated
Statements of Income
Classification
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Gain (Loss) on forwards
|
|
Cost of Sales
|
|
$
|
(20
|
)
|
|
$
|
89
|
|
|
$
|
17
|
|
Gain (Loss) on purchase contract
|
|
Cost of Sales
|
|
20
|
|
|
(89
|
)
|
|
(17
|
)
|
|
|
|
|
|
|
in millions
|
|
|||||||
|
|
Consolidated
Statements of Income
Classification
|
|
Gain (Loss)
Recognized
in Earnings
|
|
|||||||||
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Commodity contracts
|
|
Sales
|
|
$
|
111
|
|
|
$
|
(73
|
)
|
|
$
|
(62
|
)
|
Commodity contracts
|
|
Cost of Sales
|
|
(95
|
)
|
|
17
|
|
|
(33
|
)
|
|||
Foreign exchange contracts
|
|
Other Income/Expense
|
|
—
|
|
|
2
|
|
|
(4
|
)
|
|||
Total
|
|
|
|
$
|
16
|
|
|
$
|
(54
|
)
|
|
$
|
(99
|
)
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets in non-active markets;
|
•
|
Inputs other than quoted prices that are observable for the asset or liability; and
|
•
|
Inputs derived principally from or corroborated by other observable market data.
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||
September 30, 2017
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Netting (a)
|
|
|
Total
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Financial Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
9
|
|
Undesignated
|
—
|
|
|
24
|
|
|
—
|
|
|
(3
|
)
|
|
21
|
|
|||||
Available for Sale Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|||||
Non-current
|
—
|
|
|
45
|
|
|
50
|
|
|
—
|
|
|
95
|
|
|||||
Deferred Compensation Assets
|
23
|
|
|
272
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|||||
Total Assets
|
$
|
23
|
|
|
$
|
353
|
|
|
$
|
51
|
|
|
$
|
(4
|
)
|
|
$
|
423
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Financial Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
Undesignated
|
—
|
|
|
21
|
|
|
—
|
|
|
(17
|
)
|
|
4
|
|
|||||
Total Liabilities
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
October 1, 2016
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Netting (a)
|
|
|
Total
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Financial Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
45
|
|
Undesignated
|
—
|
|
|
38
|
|
|
—
|
|
|
(34
|
)
|
|
4
|
|
|||||
Available for Sale Securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|||||
Non-current
|
—
|
|
|
38
|
|
|
55
|
|
|
—
|
|
|
93
|
|
|||||
Deferred Compensation Assets
|
18
|
|
|
236
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|||||
Total Assets
|
$
|
18
|
|
|
$
|
386
|
|
|
$
|
57
|
|
|
$
|
(61
|
)
|
|
$
|
400
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Financial Instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Designated as hedges
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Undesignated
|
—
|
|
|
68
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|||||
Total Liabilities
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
(a)
|
Our derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis when a legally enforceable master netting arrangement exists between the counterparty to a derivative contract and us. At
September 30, 2017
, and
October 1, 2016
, we had
$22 million
and
$8 million
, respectively, of cash collateral posted with various counterparties where master netting arrangements exist and held no cash collateral.
|
|
|
|
in millions
|
|
|||
|
September 30, 2017
|
|
|
October 1, 2016
|
|
||
Balance at beginning of year
|
$
|
57
|
|
|
$
|
61
|
|
Total realized and unrealized gains (losses):
|
|
|
|
||||
Included in earnings
|
—
|
|
|
—
|
|
||
Included in other comprehensive income (loss)
|
(1
|
)
|
|
—
|
|
||
Purchases
|
13
|
|
|
12
|
|
||
Issuances
|
—
|
|
|
—
|
|
||
Settlements
|
(18
|
)
|
|
(16
|
)
|
||
Balance at end of year
|
$
|
51
|
|
|
$
|
57
|
|
Total gains (losses) for the periods included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||||||||||||||||||
|
Amortized
Cost Basis
|
|
|
Fair
Value
|
|
|
Unrealized
Gain/(Loss)
|
|
|
Amortized
Cost Basis
|
|
|
Fair
Value
|
|
|
Unrealized
Gain/(Loss)
|
|
||||||
Available for Sale Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States Treasury and Agency
|
$
|
47
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
—
|
|
Corporate and Asset-Backed
|
51
|
|
|
51
|
|
|
—
|
|
|
56
|
|
|
57
|
|
|
1
|
|
|
|
|
|
|
in millions
|
|
|||||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||||||||||
|
Fair
Value
|
|
|
Carrying
Value
|
|
|
Fair
Value
|
|
|
Carrying
Value
|
|
||||
Total Debt
|
$
|
10,591
|
|
|
$
|
10,203
|
|
|
$
|
6,698
|
|
|
$
|
6,279
|
|
|
Shares Under
Option
|
|
|
Weighted
Average Exercise
Price Per Share
|
|
|
Weighted Average
Remaining
Contractual Life
(in Years)
|
|
Aggregate
Intrinsic Value
(in millions)
|
|
||
Outstanding, October 1, 2016
|
11,191,656
|
|
|
$
|
33.74
|
|
|
|
|
|
||
Exercised
|
(5,172,485
|
)
|
|
31.17
|
|
|
|
|
|
|||
Forfeited or expired
|
(87,361
|
)
|
|
53.18
|
|
|
|
|
|
|||
Granted
|
1,615,708
|
|
|
58.34
|
|
|
|
|
|
|||
Outstanding, September 30, 2017
|
7,547,518
|
|
|
40.54
|
|
|
7.0
|
|
$
|
226
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable, September 30, 2017
|
4,152,777
|
|
|
$
|
32.15
|
|
|
6.0
|
|
$
|
159
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Expected life (in years)
|
5.4
|
|
|
6.4
|
|
|
6.1
|
|
Risk-free interest rate
|
1.8
|
%
|
|
1.6
|
%
|
|
1.6
|
%
|
Expected volatility
|
24.7
|
%
|
|
24.8
|
%
|
|
26.7
|
%
|
Expected dividend yield
|
1.3% - 1.4%
|
|
|
1.2% - 2.6%
|
|
|
1.0
|
%
|
|
Number of Shares
|
|
|
Weighted
Average Grant-
Date Fair Value
Per Share
|
|
|
Weighted Average
Remaining
Contractual Life
(in Years)
|
|
Aggregate
Intrinsic Value
(in millions)
|
|
||
Nonvested, October 1, 2016
|
1,602,866
|
|
|
$
|
43.45
|
|
|
|
|
|
||
Granted
|
734,954
|
|
|
58.96
|
|
|
|
|
|
|||
Dividends
|
25,751
|
|
|
50.64
|
|
|
|
|
|
|||
Vested
|
(506,773
|
)
|
|
37.64
|
|
|
|
|
|
|||
Forfeited
|
(141,698
|
)
|
|
52.02
|
|
|
|
|
|
|||
Nonvested, September 30, 2017
|
1,715,100
|
|
|
$
|
51.21
|
|
|
1.3
|
|
$
|
121
|
|
|
Number of Shares
|
|
|
Weighted
Average Grant-
Date Fair Value
Per Share
|
|
|
Weighted Average
Remaining
Contractual Life
(in Years)
|
|
Aggregate
Intrinsic Value
(in millions)
|
|
||
Nonvested, October 1, 2016
|
2,147,069
|
|
|
$
|
48.15
|
|
|
|
|
|
||
Granted
|
965,687
|
|
|
47.73
|
|
|
|
|
|
|||
Vested
|
(389,797
|
)
|
|
18.62
|
|
|
|
|
|
|||
Forfeited
|
(565,844
|
)
|
|
38.05
|
|
|
|
|
|
|||
Nonvested, September 30, 2017
|
2,157,115
|
|
|
$
|
38.92
|
|
|
1.3
|
|
$
|
152
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
Pension Benefits
|
|
Other Postretirement
|
||||||||||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation at beginning of year
|
$
|
1,554
|
|
|
$
|
1,785
|
|
|
$
|
222
|
|
|
$
|
201
|
|
|
$
|
36
|
|
|
$
|
114
|
|
Service cost
|
2
|
|
|
8
|
|
|
11
|
|
|
6
|
|
|
1
|
|
|
1
|
|
||||||
Interest cost
|
57
|
|
|
65
|
|
|
8
|
|
|
9
|
|
|
1
|
|
|
3
|
|
||||||
Plan amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
||||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Actuarial (gain)/loss
|
(52
|
)
|
|
21
|
|
|
1
|
|
|
16
|
|
|
(1
|
)
|
|
(15
|
)
|
||||||
Benefits paid
|
(84
|
)
|
|
(339
|
)
|
|
(12
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||||
Other
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Benefit obligation at end of year
|
1,477
|
|
|
1,554
|
|
|
230
|
|
|
222
|
|
|
33
|
|
|
36
|
|
||||||
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets at beginning of year
|
1,440
|
|
|
1,576
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
115
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employer contributions
|
41
|
|
|
54
|
|
|
12
|
|
|
10
|
|
|
4
|
|
|
9
|
|
||||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Benefits paid
|
(84
|
)
|
|
(339
|
)
|
|
(12
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||||
Other
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets at end of year
|
1,512
|
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Funded status
|
$
|
35
|
|
|
$
|
(114
|
)
|
|
$
|
(230
|
)
|
|
$
|
(222
|
)
|
|
$
|
(33
|
)
|
|
$
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
Pension Benefits
|
|
Other Postretirement
|
||||||||||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||
Other assets
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current liabilities
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||||
Other liabilities
|
(9
|
)
|
|
(114
|
)
|
|
(219
|
)
|
|
(213
|
)
|
|
(30
|
)
|
|
(32
|
)
|
||||||
Total assets (liabilities)
|
$
|
35
|
|
|
$
|
(114
|
)
|
|
$
|
(230
|
)
|
|
$
|
(222
|
)
|
|
$
|
(33
|
)
|
|
$
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||
|
Pension Benefits
|
|
Other Postretirement
|
||||||||||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||
Accumulated other comprehensive (income)/loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial (gain) loss
|
$
|
(94
|
)
|
|
$
|
17
|
|
|
$
|
50
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prior service (credit) (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
(98
|
)
|
||||||
Total accumulated other comprehensive (income)/loss:
|
$
|
(94
|
)
|
|
$
|
17
|
|
|
$
|
50
|
|
|
$
|
55
|
|
|
$
|
(73
|
)
|
|
$
|
(98
|
)
|
(a)
|
The change in prior service credit is primarily attributed to the plan amendments to the other postretirement benefits as noted within the change in benefit obligation with remainder of the change being immaterial.
|
|
|
|
|
|
in millions
|
|
|||||||||
|
Pension Benefits
|
||||||||||||||
|
Qualified
|
|
Non-Qualified
|
||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Projected benefit obligation
|
$
|
361
|
|
|
$
|
1,550
|
|
|
$
|
230
|
|
|
$
|
222
|
|
Accumulated benefit obligation
|
361
|
|
|
1,550
|
|
|
220
|
|
|
207
|
|
||||
Fair value of plan assets
|
352
|
|
|
1,436
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||||||||
|
Pension Benefits
|
|
Other Postretirement
|
||||||||||||||||||||||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
||||||||||||||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||||||
Service cost
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
5
|
|
Interest cost
|
57
|
|
|
65
|
|
|
78
|
|
|
8
|
|
|
9
|
|
|
8
|
|
|
1
|
|
|
3
|
|
|
7
|
|
|||||||||
Expected return on plan assets
|
(59
|
)
|
|
(65
|
)
|
|
(102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(20
|
)
|
|
(1
|
)
|
|||||||||
Recognized actuarial loss (gain), net
|
1
|
|
|
2
|
|
|
2
|
|
|
6
|
|
|
5
|
|
|
4
|
|
|
(1
|
)
|
|
(15
|
)
|
|
9
|
|
|||||||||
Recognized settlement loss (gain)
|
2
|
|
|
(12
|
)
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||||
Net periodic benefit cost (credit)
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
25
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
(24
|
)
|
|
$
|
(31
|
)
|
|
$
|
18
|
|
|
Pension Benefits
|
|
Other Postretirement
|
|||||||||||||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
|||||||||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Discount rate to determine net periodic benefit cost
|
3.72
|
%
|
|
4.47
|
%
|
|
4.32
|
%
|
|
3.77
|
%
|
|
4.41
|
%
|
|
4.36
|
%
|
|
3.09
|
%
|
|
3.54
|
%
|
|
3.97
|
%
|
Discount rate to determine benefit obligations
|
3.85
|
%
|
|
3.72
|
%
|
|
4.47
|
%
|
|
3.88
|
%
|
|
3.77
|
%
|
|
4.41
|
%
|
|
3.39
|
%
|
|
3.09
|
%
|
|
3.54
|
%
|
Rate of compensation increase
|
n/a
|
|
|
n/a
|
|
|
0.01
|
%
|
|
2.44
|
%
|
|
2.46
|
%
|
|
2.31
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Expected return on plan assets
|
4.21
|
%
|
|
4.15
|
%
|
|
4.61
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
|
|
in millions
|
|
|||
|
One Percentage Point Increase
|
|
One Percentage Point Decrease
|
||||
Effect on postretirement benefit obligation
|
$
|
1
|
|
|
$
|
1
|
|
|
2017
|
|
|
2016
|
|
|
Target Asset
Allocation
|
|
Cash
|
1.1
|
%
|
|
0.9
|
%
|
|
—
|
%
|
Fixed Income Securities
|
87.4
|
|
|
85.4
|
|
|
91.5
|
|
United States Stock Funds
|
3.5
|
|
|
3.7
|
|
|
2.4
|
|
International Stock Funds
|
5.6
|
|
|
6.2
|
|
|
4.0
|
|
Real Estate
|
2.4
|
|
|
3.8
|
|
|
2.1
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
in millions
|
|
|||||||||||||
September 30, 2017
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Cash and cash equivalents
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Insurance contract at contract value (a)
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
||||
Total assets in fair value hierarchy
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
43
|
|
Investments measured at net asset value:
|
|
|
|
|
|
|
|
||||||||
Common collective trusts (b)
|
|
|
|
|
|
|
1,469
|
|
|||||||
Total plan assets
|
|
|
|
|
|
|
$
|
1,512
|
|
|
in millions
|
|
|||||||||||||
October 1, 2016
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Cash and cash equivalents
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
Insurance contract at contract value (a)
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
||||
Total assets in fair value hierarchy
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
41
|
|
Investments measured at net asset value:
|
|
|
|
|
|
|
|
||||||||
Common collective trusts (b)
|
|
|
|
|
|
|
|
|
|
1,399
|
|
||||
Total plan assets
|
|
|
|
|
|
|
|
|
|
$
|
1,440
|
|
(a)
|
We classify insurance contracts as Level 3 as there is limited activity or less observable inputs into valuation models, including current interest rates and estimated prepayment, default and recovery rates on the underlying portfolio or structured investment vehicle. The insurance contracts are valued using the plan’s own assumptions about the assumptions market participants would use in pricing the assets based on the best information available, such as investment manager pricing. Significant changes to assumptions or unobservable inputs in the valuation of our Level 3 instruments would not have a significant impact to our consolidated financial statements.
|
(b)
|
Funds that are measured at fair value using the net asset value (NAV) per share practical expedient have not been categorized in the fair value hierarchy. The amounts presented above are intended to permit reconciliation of the fair value hierarchy to the fair value of total plan assets in order to determine the amounts included in Other Assets and Other Liabilities in the Consolidated Balance Sheets.
|
|
|
|
|
in millions
|
|
|||
|
|
Insurance contract
|
|
|
Total
|
|
||
Balance at October 1, 2016
|
|
$
|
28
|
|
|
$
|
28
|
|
Actual return on plan assets:
|
|
|
|
|
|
|||
Assets still held at reporting date
|
|
—
|
|
|
—
|
|
||
Assets sold during the period
|
|
—
|
|
|
—
|
|
||
Purchases, sales and settlements, net
|
|
—
|
|
|
—
|
|
||
Transfers in and/or out of Level 3
|
|
—
|
|
|
—
|
|
||
Balance at September 30, 2017
|
|
$
|
28
|
|
|
$
|
28
|
|
|
|
|
|
|
in millions
|
|
|||||
|
Pension Benefits
|
|
Other Postretirement
|
||||||||
|
Qualified
|
|
Non-Qualified
|
|
Benefits
|
||||||
2018
|
$
|
82
|
|
|
$
|
11
|
|
|
$
|
3
|
|
2019
|
83
|
|
|
11
|
|
|
3
|
|
|||
2020
|
83
|
|
|
12
|
|
|
3
|
|
|||
2021
|
84
|
|
|
12
|
|
|
3
|
|
|||
2022
|
85
|
|
|
13
|
|
|
3
|
|
|||
2023-2027
|
431
|
|
|
68
|
|
|
13
|
|
|
|
|
PPA Zone Status
|
|
FIP/RP Status
|
Contributions (in millions)
|
|
Surcharge Imposed
|
|
|
||||
Pension Fund Plan Name
|
EIN/Pension Plan Number
|
|
2017
|
|
2016
|
|
Implemented
|
2017
|
2016
|
|
2017
|
|
Expiration Date of Collective Bargaining Agreement
(a)
|
|
Bakery and Confectionery Union and Industry International Pension Fund
|
52-6118572/001
|
|
Red
|
|
Red
|
|
Nov 2012
|
|
$2
|
$1
|
|
10%
|
|
October 2015
|
|
|
|
in millions
|
|
|||
|
2017
|
|
|
2016
|
|
||
Accumulated other comprehensive income (loss), net of taxes:
|
|
|
|
||||
Unrealized net hedging loss
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Unrealized net gain on investments
|
—
|
|
|
1
|
|
||
Currency translation adjustment
|
(53
|
)
|
|
(59
|
)
|
||
Postretirement benefits reserve adjustments
|
71
|
|
|
15
|
|
||
Total accumulated other comprehensive loss
|
$
|
16
|
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
|
|
Before Tax
|
Tax
|
After Tax
|
|
Before Tax
|
Tax
|
After Tax
|
|
Before Tax
|
Tax
|
After Tax
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Derivatives accounted for as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(Gain) loss reclassified to cost of sales
|
|
$
|
4
|
|
$
|
(2
|
)
|
$
|
2
|
|
|
$
|
(1
|
)
|
$
|
1
|
|
$
|
—
|
|
|
$
|
7
|
|
$
|
(3
|
)
|
$
|
4
|
|
Unrealized gain (loss)
|
|
(3
|
)
|
1
|
|
(2
|
)
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(4
|
)
|
2
|
|
(2
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(Gain) loss reclassified to other income/expense
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(21
|
)
|
8
|
|
(13
|
)
|
|||||||||
Unrealized gain (loss)
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
(1
|
)
|
1
|
|
—
|
|
|
21
|
|
(9
|
)
|
12
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Translation loss reclassified to cost of sales (a)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
115
|
|
(8
|
)
|
107
|
|
|||||||||
Translation adjustment
|
|
6
|
|
—
|
|
6
|
|
|
5
|
|
(1
|
)
|
4
|
|
|
(86
|
)
|
15
|
|
(71
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Postretirement benefits
|
|
91
|
|
(35
|
)
|
56
|
|
|
67
|
|
(25
|
)
|
42
|
|
|
32
|
|
(12
|
)
|
20
|
|
|||||||||
Total other comprehensive income (loss)
|
|
$
|
97
|
|
$
|
(36
|
)
|
$
|
61
|
|
|
$
|
69
|
|
$
|
(24
|
)
|
$
|
45
|
|
|
$
|
64
|
|
$
|
(7
|
)
|
$
|
57
|
|
|
in millions
|
|
|||||||||||||||||||||||||
|
Beef
|
|
|
Pork
|
|
|
Chicken
|
|
|
Prepared
Foods
|
|
|
Other
|
|
|
Intersegment
Sales
|
|
|
Consolidated
|
|
|||||||
Fiscal 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales
|
$
|
14,823
|
|
|
$
|
5,238
|
|
|
$
|
11,409
|
|
|
$
|
7,853
|
|
|
$
|
349
|
|
|
$
|
(1,412
|
)
|
|
$
|
38,260
|
|
Operating Income (Loss)
|
877
|
|
|
645
|
|
|
1,053
|
|
|
462
|
|
|
(106
|
)
|
|
|
|
2,931
|
|
||||||||
Total Other (Income) Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
303
|
|
|||||||||||||
Income before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
2,628
|
|
|||||||||||||
Depreciation and amortization
|
92
|
|
|
36
|
|
|
296
|
|
|
315
|
|
|
9
|
|
|
|
|
748
|
|
||||||||
Total Assets
|
2,938
|
|
|
1,132
|
|
|
6,630
|
|
|
13,466
|
|
|
3,900
|
|
|
|
|
28,066
|
|
||||||||
Additions to property, plant and equipment
|
118
|
|
|
101
|
|
|
492
|
|
|
229
|
|
|
129
|
|
|
|
|
1,069
|
|
||||||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales
|
$
|
14,513
|
|
|
$
|
4,909
|
|
|
$
|
10,927
|
|
|
$
|
7,346
|
|
|
$
|
380
|
|
|
$
|
(1,194
|
)
|
|
$
|
36,881
|
|
Operating Income (Loss)
|
347
|
|
|
528
|
|
|
1,305
|
|
|
734
|
|
|
(81
|
)
|
|
|
|
2,833
|
|
||||||||
Total Other (Income) Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|||||||||||||
Income before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
2,598
|
|
|||||||||||||
Depreciation and amortization
|
94
|
|
|
33
|
|
|
274
|
|
|
286
|
|
|
10
|
|
|
|
|
697
|
|
||||||||
Total Assets
|
2,764
|
|
|
1,039
|
|
|
5,836
|
|
|
11,814
|
|
|
920
|
|
|
|
|
22,373
|
|
||||||||
Additions to property, plant and equipment
|
99
|
|
|
68
|
|
|
281
|
|
|
178
|
|
|
69
|
|
|
|
|
695
|
|
||||||||
Fiscal 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales
|
$
|
17,236
|
|
|
$
|
5,262
|
|
|
$
|
11,390
|
|
|
$
|
7,822
|
|
|
$
|
879
|
|
|
$
|
(1,216
|
)
|
|
$
|
41,373
|
|
Operating Income (Loss)
|
(66
|
)
|
|
380
|
|
|
1,366
|
|
|
588
|
|
|
(99
|
)
|
|
|
|
2,169
|
|
||||||||
Total Other (Income) Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
248
|
|
|||||||||||||
Income before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
1,921
|
|
|||||||||||||
Depreciation and amortization
|
97
|
|
|
31
|
|
|
272
|
|
|
280
|
|
|
21
|
|
|
|
|
701
|
|
||||||||
Total Assets
|
3,009
|
|
|
927
|
|
|
5,731
|
|
|
12,006
|
|
|
1,296
|
|
|
|
|
22,969
|
|
||||||||
Additions to property, plant and equipment
|
113
|
|
|
50
|
|
|
405
|
|
|
167
|
|
|
119
|
|
|
|
|
854
|
|
|
|
|
|
|
in millions
|
|
|||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Interest, net of amounts capitalized
|
$
|
249
|
|
|
$
|
242
|
|
|
$
|
308
|
|
Income taxes, net of refunds
|
779
|
|
|
686
|
|
|
437
|
|
|
in millions
|
|
|
2018
|
$
|
137
|
|
2019
|
100
|
|
|
2020
|
74
|
|
|
2021
|
48
|
|
|
2022
|
32
|
|
|
2023 and beyond
|
73
|
|
|
Total
|
$
|
464
|
|
|
in millions
|
|
|
2018
|
$
|
1,750
|
|
2019
|
374
|
|
|
2020
|
272
|
|
|
2021
|
118
|
|
|
2022
|
77
|
|
|
2023 and beyond
|
110
|
|
|
Total
|
$
|
2,701
|
|
•
|
Bouaphakeo (f/k/a Sharp), et al. v. Tyson Foods, Inc., N.D. Iowa, February 6, 2007
- A jury trial was held involving our Storm Lake, Iowa pork plant which resulted in a jury verdict in favor of the plaintiffs for violations of federal and state laws for pre- and post-shift work activities. The trial court also awarded the plaintiffs liquidated damages, resulting in total damages awarded in the amount of
$5,784,758
. The plaintiffs' counsel has also filed an application for attorneys' fees and expenses in the amount of
$2,692,145
. We appealed the jury's verdict and trial court's award to the Eighth Circuit Court of Appeals. The appellate court affirmed the jury verdict and judgment on August 25, 2014, and we filed a petition for rehearing on September 22, 2014, which was denied. We filed a petition for a writ of certiorari with the United States Supreme Court, which was granted on June 8, 2015, and oral arguments before the Supreme Court occurred on November 10, 2015. On March 22, 2016, the Supreme Court affirmed the appellate court’s rulings and remanded to the trial court to allocate the lump sum award among the class participants. On remand, the trial court determined that the lump sum award should be allocated to class participants according to the method prescribed by plaintiffs’ expert at trial. The trial court has yet to enter a judgment. Subsequently, a joint notice advising the court of a global settlement of this case, the
Edwards
matter (described below), and the consolidated
Murray
and
DeVoss
matter (also described below) was filed. The parties agreed to settle all three matters for a total payment of
$12.6 million
, inclusive of wages, penalties, interest, attorneys’ fees and costs, and costs of settlement administration. The trial court held an approval hearing on October 11, 2017 and we are awaiting the court’s decision.
|
•
|
Edwards, et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa, March 20, 2008
- The trial court in this case, which involves our Perry and Waterloo, Iowa pork plants, decertified the state law class and granted other pre-trial motions that resulted in a judgment in our favor with respect to the plaintiffs’ claims. The plaintiffs have filed a motion to modify this judgment. A joint motion for preliminary approval of the collective and class action settlement was filed on July 7, 2017. Please see the above
Bouaphakeo
description for additional details of a global settlement.
|
•
|
Murray, et al. v. Tyson Foods, Inc., C.D. Illinois, January 2, 2008
; and
DeVoss v. Tyson Foods, Inc. d.b.a. Tyson Fresh Meats, C.D. Illinois, March 2, 2011
- These cases involve our Joslin, Illinois beef plant and are in their preliminary stages. A joint notice of settlement and a request to stay the proceedings was filed with and granted by the court on June 28, 2017. Please see the above
Bouaphakeo
description for additional details of a global settlement.
|
•
|
Dozier, Southerland, et al. v. The Hillshire Brands Company, E.D. North Carolina, September 2, 2014
- This case involves our Tarboro, North Carolina prepared foods plant. On March 25, 2016, the parties filed a joint motion for settlement totaling
$425,000
, which includes all of the plaintiffs’ attorneys’ fees and costs. The court preliminarily approved the joint motion for settlement, and the final approval hearing is set for December 5, 2017.
|
|
|
|
|
in millions, except per share data
|
|
|||||||||||
|
|
First
Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
|
|
Fourth
Quarter
|
|
||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
9,182
|
|
|
$
|
9,083
|
|
|
$
|
9,850
|
|
|
$
|
10,145
|
|
Gross profit
|
|
1,483
|
|
|
1,047
|
|
|
1,202
|
|
|
1,351
|
|
||||
Operating income
|
|
982
|
|
|
571
|
|
|
697
|
|
|
681
|
|
||||
Net income
|
|
594
|
|
|
341
|
|
|
448
|
|
|
395
|
|
||||
Net income attributable to Tyson
|
|
593
|
|
|
340
|
|
|
447
|
|
|
394
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to Tyson:
|
|
|
|
|
|
|
|
|
||||||||
Class A Basic
|
|
$
|
1.64
|
|
|
$
|
0.95
|
|
|
$
|
1.24
|
|
|
$
|
1.10
|
|
Class B Basic
|
|
$
|
1.49
|
|
|
$
|
0.86
|
|
|
$
|
1.12
|
|
|
$
|
0.98
|
|
Diluted
|
|
$
|
1.59
|
|
|
$
|
0.92
|
|
|
$
|
1.21
|
|
|
$
|
1.07
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
9,152
|
|
|
$
|
9,170
|
|
|
$
|
9,403
|
|
|
$
|
9,156
|
|
Gross profit
|
|
1,201
|
|
|
1,183
|
|
|
1,224
|
|
|
1,089
|
|
||||
Operating income
|
|
776
|
|
|
704
|
|
|
767
|
|
|
586
|
|
||||
Net income
|
|
461
|
|
|
434
|
|
|
485
|
|
|
392
|
|
||||
Net income attributable to Tyson
|
|
461
|
|
|
432
|
|
|
484
|
|
|
391
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to Tyson:
|
|
|
|
|
|
|
|
|
||||||||
Class A Basic
|
|
$
|
1.18
|
|
|
$
|
1.14
|
|
|
$
|
1.29
|
|
|
$
|
1.06
|
|
Class B Basic
|
|
$
|
1.09
|
|
|
$
|
1.02
|
|
|
$
|
1.17
|
|
|
$
|
0.96
|
|
Diluted
|
|
$
|
1.15
|
|
|
$
|
1.10
|
|
|
$
|
1.25
|
|
|
$
|
1.03
|
|
|
Equity Compensation Plan Information
|
||||||||
|
Number of
Securities to be
issued upon
exercise of
outstanding
options
|
|
|
Weighted
average
exercise price
of outstanding
options
|
|
|
Number of Securities remaining available for
future issuance under
equity compensation plans
(excluding Securities
reflected in the first column (a) (b))
|
|
|
Equity compensation plans approved by security holders
|
7,547,518
|
|
|
$
|
40.54
|
|
|
40,279,989
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
7,547,518
|
|
|
$
|
40.54
|
|
|
40,279,989
|
|
(a)
|
Shares available for future issuance as of September 30, 2017, under the Stock Incentive Plan (18,094,438), the Employee Stock Purchase Plan (14,537,943) and the Retirement Savings Plan (7,647,608)
|
(b)
|
"Securities" and "shares" refer to the Company's Class A common stock.
|
(a)
|
The following documents are filed as a part of this report:
|
|
|
|
|
|
|
|
|
|
|
in millions
|
|
|||||||||
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
|
Balance at
Beginning
of Period
|
|
|
Charged to
Costs and
Expenses
|
|
|
Charged to
Other Accounts
|
|
|
(Deductions)
|
|
|
Balance at End
of Period
|
|
|||||
Allowance for Doubtful Accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
$
|
33
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
34
|
|
2016
|
|
27
|
|
|
10
|
|
|
—
|
|
|
(4
|
)
|
|
33
|
|
|||||
2015
|
|
34
|
|
|
1
|
|
|
—
|
|
|
(8
|
)
|
|
27
|
|
|||||
Inventory Lower of Cost or Market Allowance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
$
|
39
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
3
|
|
2016
|
|
58
|
|
|
70
|
|
|
—
|
|
|
(89
|
)
|
|
39
|
|
|||||
2015
|
|
7
|
|
|
99
|
|
|
—
|
|
|
(48
|
)
|
|
58
|
|
|||||
Valuation Allowance on Deferred Tax Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
$
|
72
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
75
|
|
2016
|
|
68
|
|
|
10
|
|
|
—
|
|
|
(6
|
)
|
|
72
|
|
|||||
2015
|
|
51
|
|
|
21
|
|
|
—
|
|
|
(4
|
)
|
|
68
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
Indenture dated October 2, 1990, between Sara Lee Corporation and Continental Bank, N.A., as Trustee (the “Sara Lee Indenture”) (previously filed as Exhibit 4.1 to Amendment No. 1 to Registration Statement No. 33-33603 on Form S-3 by Sara Lee Corporation, predecessor in interest to The Hillshire Brands Company, filed with the Commission on October 5, 1990, Commission File No. 001-03344, and incorporated herein by reference).
|
|
|
|
4.22
|
|
|
|
|
|
4.23
|
|
|
|
|
|
4.24
|
|
|
|
|
|
4.25
|
|
|
|
|
|
4.26
|
|
|
|
|
|
4.27
|
|
|
|
|
|
4.28
|
|
|
|
|
|
4.29
|
|
|
|
|
|
4.30
|
|
|
|
|
|
4.31
|
|
|
|
|
|
4.32
|
|
|
|
|
|
4.33
|
|
|
|
|
|
4.34
|
|
|
|
|
|
4.35
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
*
|
|
|
|
|
10.8
|
*
|
|
|
|
|
10.9
|
*
|
|
|
|
|
10.10
|
*
|
|
|
|
|
10.11
|
*
|
|
|
|
|
10.12
|
*
|
|
|
|
|
10.13
|
*
|
|
|
|
|
10.14
|
*
|
|
|
|
|
10.15
|
*
|
|
|
|
|
10.16
|
*
|
|
|
|
|
10.17
|
*
|
|
|
|
|
10.18
|
*
|
|
|
|
|
10.19
|
*
|
|
|
|
|
10.20
|
*
|
|
|
|
|
10.21
|
*
|
|
|
|
|
10.22
|
*
|
|
|
|
|
10.23
|
*
|
|
|
|
|
10.24
|
*
|
|
|
|
|
10.25
|
*
|
|
|
|
|
10.26
|
*
|
|
|
|
|
10.27
|
*
|
|
|
|
|
10.28
|
*
|
|
|
|
|
10.29
|
*
|
|
|
|
|
10.30
|
*
|
|
|
|
|
10.31
|
*
|
|
|
|
|
10.32
|
*
|
|
|
|
|
10.33
|
*
|
|
|
|
|
10.34
|
*
|
|
|
|
|
10.35
|
*
|
|
|
|
|
10.36
|
*
|
|
|
|
|
10.37
|
*
|
|
|
|
|
10.38
|
*
|
|
|
|
|
10.39
|
*
|
|
|
|
|
10.40
|
*
|
|
|
|
|
10.41
|
*
|
|
|
|
|
10.42
|
*
|
|
|
|
|
10.43
|
*
|
|
|
|
|
10.44
|
*
|
|
|
|
|
10.45
|
*
|
|
|
|
|
10.46
|
*
|
|
|
|
|
10.47
|
*
|
|
|
|
|
10.48
|
*
|
|
|
|
|
10.49
|
*
|
|
|
|
|
10.50
|
*
|
|
|
|
|
10.51
|
*
|
|
|
|
|
10.52
|
*
|
|
|
|
|
10.53
|
*
|
|
|
|
|
10.54
|
*
|
|
|
|
|
10.55
|
*
|
|
|
|
|
10.56
|
*
|
|
|
|
|
10.57
|
*
|
|
|
|
|
10.58
|
*
|
|
|
|
|
10.59
|
*
|
|
|
|
|
10.60
|
*
|
|
|
|
|
10.61
|
*
|
|
|
|
|
10.62
|
*
|
|
|
|
|
10.63
|
*
|
|
|
|
|
10.64
|
*
|
|
|
|
|
10.65
|
*
|
|
|
|
|
10.66
|
*
|
|
|
|
|
10.67
|
*
|
|
|
|
|
10.68
|
*
|
|
|
|
|
10.69
|
*
|
|
|
|
|
10.70
|
*
|
|
|
|
|
10.71
|
*
|
|
|
|
|
10.72
|
*
|
|
|
|
|
10.73
|
|
|
|
|
|
10.74
|
*
|
|
|
|
|
10.75
|
*
|
|
|
|
|
10.76
|
*
|
|
|
|
|
12.1
|
|
|
|
|
|
14.1
|
|
|
|
|
|
21
|
|
|
|
|
|
23
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
TYSON FOODS, INC.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Dennis Leatherby
|
|
November 13, 2017
|
|
|
Dennis Leatherby
|
|
|
|
|
Executive Vice President and Chief
Financial Officer (Principal Financial Officer)
|
|
|
/s/ Gaurdie E. Banister Jr.
|
|
Director
|
|
November 13, 2017
|
Gaurdie E. Banister Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Mike Beebe
|
|
Director
|
|
November 13, 2017
|
Mike Beebe
|
|
|
|
|
|
|
|
|
|
/s/ Curt T. Calaway
|
|
Senior Vice President, Controller and
|
|
November 13, 2017
|
Curt T. Calaway
|
|
Chief Accounting Officer
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Mikel A. Durham
|
|
Director
|
|
November 13, 2017
|
Mikel A. Durham
|
|
|
|
|
|
|
|
|
|
/s/ Thomas P. Hayes
|
|
President and Chief Executive Officer
|
|
November 13, 2017
|
Thomas P. Hayes
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Dennis Leatherby
|
|
Executive Vice President and Chief Financial Officer
|
|
November 13, 2017
|
Dennis Leatherby
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Kevin M. McNamara
|
|
Director
|
|
November 13, 2017
|
Kevin M. McNamara
|
|
|
|
|
|
|
|
|
|
/s/ Cheryl S. Miller
|
|
Director
|
|
November 13, 2017
|
Cheryl S. Miller
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey K. Schomburger
|
|
Director
|
|
November 13, 2017
|
Jeffrey K. Schomburger
|
|
|
|
|
|
|
|
|
|
/s/ Robert C. Thurber
|
|
Director
|
|
November 13, 2017
|
Robert C. Thurber
|
|
|
|
|
|
|
|
|
|
/s/ Barbara A. Tyson
|
|
Director
|
|
November 13, 2017
|
Barbara A. Tyson
|
|
|
|
|
|
|
|
|
|
/s/ John Tyson
|
|
Chairman of the Board of Directors
|
|
November 13, 2017
|
John Tyson
|
|
|
|
|
(i)
|
Tyson shall make available to you the use of Tyson-owned assets, including entertainment assets, and the use of Tyson aircraft for up to 275 hours annually, in a manner consistent with Tyson’s then-existing policies; provided that your personal use of Tyson-owned assets shall not interfere with Tyson’s business use of such assets. If you do not use all of such aircraft hours in a given year, you may use those unused hours in future years during the Period of Employment. As part of such personal use of Tyson aircraft, you may designate such number of additional passengers on such aircraft as seating permits, and you need not be one of the passengers;
|
(ii)
|
Tyson shall arrange for secure access to Tyson’s computer system from your home office as necessary for you to perform your duties from time to time, and pay all reasonable expenses associated therewith;
|
(iii)
|
Tyson shall provide you with reasonable access to and use of its security personnel consistent with past practice. If you request security services when reasonably warranted for business activity including without limit travel (and more particularly, international travel), Tyson shall arrange for or reimburse you for such reasonable and mutually agreed upon services, up to $50,000 annually;
|
(iv)
|
Tyson shall reimburse you for the annual premium payment on that certain existing $7,500,000 life insurance policy on your life consistent with past practice. If during the Period of Employment you choose to replace the existing policy with a different life insurance policy, Tyson’s obligation to reimburse you for the annual premium will not exceed the amount paid to you for the last year under the existing policy. Tyson has no interest in any such policy nor the proceeds payable under any such policy; and
|
(v)
|
Tyson will reimburse you (and gross-up such reimbursements to cover) any and all income tax liability (including interest and penalties) imposed upon you in connection with the availability or receipt of the services, perquisites and benefits set forth in this Section 2(g) and for and after taking into account any reimbursements received by you under this Section 2(g)(v) all in an amount sufficient so that such services, perquisites, benefits and reimbursements will be received and provided to you without reduction for taxes (i.e. on an after tax basis).
|
(i)
|
any willful and wrongful conduct or omission by you that injures Tyson;
|
(ii)
|
any act by you of intentional misrepresentation or embezzlement, misappropriation or conversion of assets of Tyson;
|
(iii)
|
you are (A) convicted of, (B) confess to, (C) plead no contest to, or (D) become the subject of proceedings that provide a reasonable basis for Tyson to believe that you have been engaged in, a felony; or
|
(iv)
|
your intentional or willful violation of any restrictive covenant provided for under Section 6 of this Agreement.
|
(i)
|
Any accrued but unpaid base salary for services rendered prior to the Termination Date, any accrued but unpaid expenses required to be reimbursed under this Agreement, and any vacation accrued to the Termination Date (collectively “Accrued Compensation”); and
|
(ii)
|
Any benefits accrued through the Termination Date to which you may be entitled pursuant to the plans, policies and arrangements, as determined and paid in accordance with the terms of such plans, policies and arrangements (collectively “Plan Benefits”).
|
(i)
|
Accrued Compensation;
|
(ii)
|
Plan Benefits;
|
(iii)
|
Tyson shall provide you, your spouse, and your eligible dependents with health care coverage (“Post Termination Health Care Coverage”). Tyson may choose to provide the Post Termination Health Care Coverage through either of the following programs: (A) healthcare, hospitalization, medical, long term care, vision, dental, and other similar insurance coverage or benefits under the Tyson Healthcare Continuation Plan or any successor or additional plan maintained by Tyson and at such coverage levels and upon such terms and conditions as shall otherwise be made available to any of the most senior officers of Tyson (including, without limitation, the provision of such coverage at a monthly cost to you that is equal to the monthly premium cost paid by other similarly situated participants); or (B) a Medicare supplemental policy (including, without limitation, a pharmaceutical supplement) at no cost to you. In addition, you and your spouse will continue to participate in Tyson’s Executive Rewards Allowance program. The Post Termination Health Care Coverage will provide you, your spouse, and your eligible dependents with coverage that is substantially similar to the healthcare, hospitalization, medical, long term care, vision, dental and other similar insurance coverage/benefits to you and your spouse received under this Agreement. This coverage will be provided until such time as you and your spouse are deceased and in the case of your eligible dependents, until their eligibility has ceased; and
|
(iv)
|
Upon written notice given to Tyson by you and your legal representative, as applicable, terminate and redeem all outstanding vested and unexercised options to purchase any Tyson stock held by you in exchange for a lump sum payment equal to the aggregate difference between (x) the fair market value of the stock represented by such options as determined as of the close of Tyson’s business on the date of the occurrence of the event giving rise to the application hereof less (y) the strike price for such stock under the applicable options (the “Option Cash Out”), less any required tax withholdings.
|
(i)
|
Accrued Compensation;
|
(ii)
|
Plan Benefits;
|
(iii)
|
Post Termination Health Care Coverage; and
|
(iv)
|
Subject to your execution of the Release (as defined below), Tyson will provide or pay the following:
|
(A)
|
An amount equal to the sum of (x) 24 months of your base salary and (y) two times your annual cash-based target bonus (the “Severance Amount”). The Severance Amount will be paid in a lump sum within thirty (30) days after such termination;
|
(B)
|
You will become fully vested in any of your unvested stock options that are outstanding on the Termination Date, notwithstanding any contrary vesting provisions of the respective stock option award agreement(s), and then be eligible to receive the Option Cash Out;
|
(C)
|
You will become vested in a pro rata portion of any of your unvested restricted stock awards that are outstanding on your Termination Date provided the applicable performance criteria are on track to be satisfied (e.g., on a run rate basis), notwithstanding any contrary provisions of the respective restricted stock award agreement(s) and determined without regard to the passing of any time period from and after the applicable Grant Date provided in the restricted stock award agreement(s). Such pro rata portion shall be equal to the percentage of the total vesting period, measured in days, in which you remained employed by Tyson and/or its affiliates multiplied by the number of shares subject to the award; and
|
(D)
|
You will become entitled to a pro rata portion of any performance share awards that are outstanding on the Termination Date provided the applicable performance criteria are met. The pro rata portion of your award shall equal the percentage of the total performance period, measured in days, in which you remained employed by Tyson multiplied by the percentage of the award that you would have received had you remained employed for the entire performance period. Any award subject to this subsection (D) shall not be paid until such time as it would have otherwise been paid under the terms of the award and will only be paid if the performance criteria are met.
|
(i)
|
Tyson may elect to cancel any and all payments of benefits otherwise due to you, but not yet paid, under this Agreement or otherwise; and
|
(ii)
|
you will refund to Tyson any amounts, plus interest, previously paid by Tyson to you in excess of your Accrued Compensation and Plan Benefits (within the meaning of Section 4).
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
(dollars in millions)
|
|||||||||||||
|
Fiscal Years
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes and equity method investment earnings
|
$
|
2,609
|
|
|
$
|
2,586
|
|
|
$
|
1,908
|
|
|
$
|
1,241
|
|
|
$
|
1,254
|
|
|
Add: Fixed charges
|
353
|
|
|
313
|
|
|
358
|
|
|
194
|
|
|
219
|
|
|
|||||
Add: Amortization of capitalized interest
|
7
|
|
|
7
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
|||||
Less: Capitalized interest
|
(12
|
)
|
|
(7
|
)
|
|
(10
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|
|||||
Total adjusted earnings
|
2,957
|
|
|
2,899
|
|
|
2,261
|
|
|
1,432
|
|
|
1,470
|
|
|
|||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
|
266
|
|
|
241
|
|
|
283
|
|
|
122
|
|
|
116
|
|
|
|||||
Capitalized interest
|
12
|
|
|
7
|
|
|
10
|
|
|
8
|
|
|
8
|
|
|
|||||
Amortization of debt issuance and debt discount expense
|
13
|
|
|
8
|
|
|
10
|
|
|
10
|
|
|
28
|
|
|
|||||
Rentals at computed interest factor
(1)
|
62
|
|
|
57
|
|
|
55
|
|
|
54
|
|
|
67
|
|
|
|||||
Total fixed charges
|
$
|
353
|
|
|
$
|
313
|
|
|
$
|
358
|
|
|
$
|
194
|
|
|
$
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
8.38
|
|
|
9.26
|
|
|
6.32
|
|
|
7.38
|
|
|
6.71
|
|
|
(1)
|
Amounts represent those portions of rent expense (one-third) that are reasonable approximations of interest costs.
|
SUBSIDIARIES
|
PLACE OF INCORPORATION
|
AdvancePierre Foods Holdings, Inc.
|
Delaware
|
AdvancePierre Foods, Inc.
|
Delaware
|
Aidells Sausage Company, Inc.
|
Delaware
|
Allied Specialty Foods, Inc.
|
Pennsylvania
|
Artisan Bread Co., LLC
|
North Carolina
|
Bryan Foods, Inc.
|
Delaware
|
C.V. Holdings, Inc.
|
Philippines
|
CBFA Management Corp.
|
Delaware
|
Central Industries, Inc.
|
Mississippi
|
Cobb (Shanghai) Enterprise Management Consulting Co., Ltd.
|
China
|
Cobb Ana Damizlik Tavukculuk Sanayi Ve Ticaret Limited Sirketi
|
Turkey
|
Cobb Asia (Thailand) Limited
|
Thailand
|
Cobb Europe B.V.
|
Netherlands
|
Cobb Europe Limited
|
United Kingdom
|
Cobb-Heritage, LLC
|
Delaware
|
Cobb-Vantress Brasil, Ltda
|
Brazil
|
Cobb-Vantress New Zealand Limited
|
New Zealand
|
Cobb-Vantress Philippines, Inc.
|
Tanay, Rizal
|
Cobb-Vantress, Inc.
|
Delaware
|
DFG Foods, Inc.
|
Delaware
|
DFG Foods, L.L.C.
|
Oklahoma
|
Egbert LLC
|
Delaware
|
Flavor Corp.
|
Delaware
|
Flavor Holdings, Inc.
|
Delaware
|
Foodbrands America, Inc.
|
Delaware
|
Foodbrands Supply Chain Services, Inc.
|
Delaware
|
Gallo Salame, Inc.
|
California
|
Global Employment Services, Inc.
|
Delaware
|
Godrej Tyson Foods Limited
|
India
|
Golden Island Jerky Company, Inc.
|
California
|
Haimen Tyson Poultry Development Co., Ltd
|
China
|
Healthy Frozen Food, Inc.
|
Delaware
|
Hillshire Brands (Australia) Pty Ltd.
|
Australia
|
Hubei Tongxing Cobb Breeding Company, Ltd.
|
China
|
Hudson Midwest Foods, Inc.
|
Nebraska
|
Hybro Genetics Brasil Ltda
|
Brazil
|
IBP Caribbean, Inc.
|
Cayman Islands
|
IBP Foodservice, L.L.C.
|
Delaware
|
IBP Redevelopment Corporation
|
Missouri
|
International Affiliates & Investment LLC
|
Delaware
|
Jiangsu Tyson Foods Co., Ltd
|
China
|
Madison Foods, Inc.
|
Delaware
|
National Comp Care, Inc.
|
Delaware
|
New Canada Holdings, Inc.
|
Delaware
|
Oaklawn Capital Corporation
|
Delaware
|
Oaklawn Sales, Ltd
|
British Virgin Islands
|
PBX, inc.
|
Delaware
|
Pierre Holdco, Inc.
|
Delaware
|
Rizhao Tyson Foods Co., Ltd
|
China
|
Rizhao Tyson Poultry Co., Ltd
|
China
|
Rural Energy Systems, Inc.
|
Delaware
|
Sara Lee Diversified, LLC
|
Delaware
|
Sara Lee Foods, LLC
|
Delaware
|
Sara Lee Household & Body Care Malawi Ltd.
|
Malawi
|
Sara Lee International LLC
|
Delaware
|
Sara Lee International TM Holdings LLC
|
Delaware
|
Sara Lee Mexicana Holdings Investment, L.L.C.
|
Delaware
|
Sara Lee TM Holdings LLC
|
Delaware
|
Sara Lee Trademark Holdings Australasia LLC
|
Delaware
|
Sara Lee-Kiwi Holdings, LLC
|
Delaware
|
Saramar, L.L.C.
|
Delaware
|
Shandong Tyson-Da Long Food Company Limited
|
China
|
Southern Family Foods, L.L.C.
|
Delaware
|
Southwest Products, LLC
|
Delaware
|
Texas Transfer, Inc.
|
Texas
|
The Bruss Company
|
Illinois
|
The Hillshire Brands Company
|
Maryland
|
The IBP Foods Co.
|
Delaware
|
The Pork Group, Inc.
|
Delaware
|
TyNet Corporation
|
Delaware
|
Tyson (Shanghai) Enterprise Management Consulting Co. Ltd.
|
China
|
Tyson Americas Holding Sárl
|
Luxembourg
|
Tyson Breeders, Inc.
|
Delaware
|
Tyson Chicken, Inc.
|
Delaware
|
Tyson China Holding 2 Limited
|
Hong Kong
|
Tyson China Holding 3 Limited
|
Hong Kong
|
Tyson China Holding Limited
|
Hong Kong
|
Tyson Deli, Inc.
|
Delaware
|
Tyson Europe Holding Company
|
Nova Scotia
|
Tyson Farms, Inc.
|
North Carolina
|
Tyson Foods Canada Inc. (Les Aliments Tyson Canada Inc.)
|
Ontario
|
Tyson Foods East China Development Co., Ltd
|
China
|
Tyson Fresh Meats, Inc.
|
Delaware
|
Tyson Global Holding Sárl
|
Luxembourg
|
Tyson Hog Markets, Inc.
|
Delaware
|
Tyson India Holdings Ltd.
|
Mauritius
|
Tyson International Company, Ltd.
|
Bermuda
|
Tyson International Holding Company
|
Delaware
|
Tyson International Holding Sárl
|
Luxembourg
|
Tyson International Service Center, Inc.
|
Delaware
|
Tyson International Service Center, Inc. Asia
|
Delaware
|
Tyson International Service Center, Inc. Europe
|
Delaware
|
Tyson Mexican Original, Inc.
|
Delaware
|
Tyson Mexico Trading Company S. de R.L. de CV.
|
Mexico
|
Tyson New Ventures, LLC
|
Delaware
|
Tyson of Wisconsin, LLC
|
Delaware
|
Tyson Pet Products, Inc.
|
Delaware
|
Tyson Poultry, Inc.
|
Delaware
|
Tyson Prepared Foods, Inc.
|
Delaware
|
Tyson Processing Services, Inc.
|
Delaware
|
Tyson Refrigerated Processed Meats, Inc.
|
Delaware
|
Tyson Sales and Distribution, Inc.
|
Delaware
|
Tyson Service Center Corp.
|
Delaware
|
Tyson Shared Services, Inc.
|
Delaware
|
Tyson Warehousing Services, LLC
|
Delaware
|
Uninex SA
|
Uruguay
|
Van's International Foods
|
California
|
WBA Analytical Laboratories, Inc.
|
Delaware
|
Wilton Foods, Inc.
|
New York
|
Zemco Industries, Inc.
|
Delaware
|
/s/ Thomas P. Hayes
|
|
Thomas P. Hayes
|
|
President and Chief Executive Officer
|
|
/s/ Dennis Leatherby
|
|
Dennis Leatherby
|
|
Executive Vice President and Chief Financial Officer
|
|
/s/ Thomas P. Hayes
|
|
Thomas P. Hayes
|
|
President and Chief Executive Officer
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November 13, 2017
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/s/ Dennis Leatherby
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Dennis Leatherby
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Executive Vice President and Chief Financial Officer
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November 13, 2017
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