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SUSTAINABILITY REPORT

Our operations are conducted in four segments: Chicken, Beef, Pork, and Prepared Foods. Some of the key factors influencing our business are:

  • Customer demand for our products;
  • The ability to maintain and grow relationships with customers by helping them bring new and innovative products to the marketplace;
  • Accessibility of international markets;
  • Market prices for our products;
  • The cost of live cattle and hogs, raw materials, grain, and feed ingredients; and
  • The operating efficiencies of our facilities.

Over the past three fiscal years, we demonstrated we are becoming a more stable food company by achieving consistent earnings power, averaging nearly $2 annually in adjusted earnings per share. Our accomplishments have been many, even in a sluggish economy with unfavorable market dynamics and staggering input cost increases. Specifically, over the past three years we achieved the following:

  • Produced consecutive record sales with an 8-percent compounded annual growth rate
  • Generated $3.7 billion in operating cash flows while funding $600 million in working capital increases
  • Invested nearly $2 billion back into our company through capital expenditures
  • Paid down debt by $1.1 billion
  • Reduced net debt to capital to 18.4%
  • Reduced net debt to Earnings Before Interest, Taxes, Depreciation and Amortization to .8 times
  • Returned to investment grade debt with all three ratings agencies
  • Improved our liquidity position to more than $2 billion at the end of fiscal 2012
  • Bought back $400 million of our stock, or more than 22 million shares under our stock repurchase program
  • Improved production efficiencies throughout our operations and achieved $715 million in operating efficiencies in our poultry segment alone
  • Developed a cohesive strategy and plan for growth around our multi-protein, multi-channel, multi-national business model
  • Stepped up our international growth efforts, especially in China
  • Diversified export sales so that we are not overly dependent on any one country or region

We are establishing a culture of lean thinking, operational excellence, and continuous improvement. We are a better, safer, and more dependable company. While it is important to see how far we have come, our future is not as a low cost, commodity protein company. Our future is as a growing, solution-providing food company. On a foundation that includes a strong balance sheet and relentless focus on operational fundamentals, our strategy is to:

  • Accelerate growth in domestic value-added poultry and prepared foods in addition to international poultry
  • Innovate products, processes, and analytics
  • Cultivate our Team Members and plan for the future through talent development

We expect to grow our topline sales three to four percent annually. Our value-added sales should grow six to eight percent annually, and sales from international production should grow 12 to 16 percent a year. We want to grow our existing business by being our customers’ go-to supplier by providing quality, service and innovation while advancing in additional sales channels, such as convenience stores, by developing new, value-added products. We also plan to grow our international business aggressively.

Although we will likely face challenging market fundamentals in the years to come, our performance in the past three years indicates we are prepared to manage our business well during times that are less than optimal. Our cash flow should continue to be strong, and combined with our strong balance sheet, we will have several options to deliver value to our shareholders. We will continue repurchasing shares, investing in our business and seeking the right acquisitions to fill gaps and unmet consumer needs.

Sales Results by Segment Table

Want To Know More?
For financial information on Tyson Foods, please visit our Investor Relations website. There you will find financial statements, SEC filings, annual reports, transcripts, presentations to investors, and much more. We encourage you to explore this website for a comprehensive fiscal look at Tyson Foods.

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