—
Q4 FY2018
Supplemental Information
November 13, 2018
Today’s
Speakers
Stewart Glendinning
EVP & CFO
Noel White
President & CEO
Forward-
Looking
Statements
Certain information in this report constitutes forward-looking statements. Such forward-looking statements include, but are
not limited to, current views and estimates of our outlook for fiscal 2019, other future economic circumstances, industry
conditions in domestic and international markets, our performance and financial results (e.g., debt levels, return on invested
capital, value-added product growth, capital expenditures, tax rates, access to foreign markets and dividend policy). These
forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results and
experiences to differ materially from anticipated results and expectations expressed in such forward-looking statements. We
wish to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date
made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future
events or otherwise. Among the factors that may cause actual results and experiences to differ from anticipated results and
expectations expressed in such forward-looking statements are the following: (i) fluctuations in the cost and availability of
inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (ii)
market conditions for finished products, including competition from other global and domestic food processors, supply and
pricing of competing products and alternative proteins and demand for alternative proteins; (iii) outbreak of a livestock
disease (such as avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on
livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to
access certain domestic and foreign markets; (iv) the integration of acquisitions; (v) the effectiveness of our financial fitness
program; (vi) the implementation of an enterprise resource planning system; (vii) access to foreign markets together with
foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (viii) changes in
availability and relative costs of labor and contract growers and our ability to maintain good relationships with employees,
labor unions, contract growers and independent producers providing us livestock; (ix) issues related to food safety, including
costs resulting from product recalls, regulatory compliance and any related claims or litigation; (x) changes in consumer
preference and diets and our ability to identify and react to consumer trends; (xi) effectiveness of advertising and marketing
programs; (xii) our ability to leverage brand value propositions; (xiii) risks associated with leverage, including cost increases
due to rising interest rates or changes in debt ratings or outlook; (xiv) impairment in the carrying value of our goodwill or
indefinite life intangible assets; (xv) compliance with and changes to regulations and laws (both domestic and foreign),
including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and
safety laws; (xvi) adverse results from litigation; (xvii) cyber incidents, security breaches or other disruptions of our
information technology systems; (xviii) our ability to make effective acquisitions or joint ventures and successfully integrate
newly acquired businesses into existing operations; (xix) risks associated with our commodity purchasing activities; (xx) the
effect of, or changes in, general economic conditions; (xxi) significant marketing plan changes by large customers or loss of
one or more large customers; (xxii) impacts on our operations caused by factors and forces beyond our control, such as
natural disasters, fire, bioterrorism, pandemics or extreme weather; (xxiii) failure to maximize or assert our intellectual
property rights; (xxiv) our participation in a multiemployer pension plan; (xxv) the Tyson Limited Partnership’s ability to
exercise significant control over the Company; (xxvi) effects related to changes in tax rates, valuation of deferred tax assets
and liabilities, or tax laws and their interpretation; (xxvii) volatility in capital markets or interest rates; and (xxviii) those factors
listed under Item 1A. “Risk Factors” included in our Annual Report filed on Form 10-K for the period ended September 29,
2018.
4
Our Strategy
—
Sustainably feed the world with
the fastest growing protein brands.
How We Will Achieve Our Strategy
Grow
our businesses
through differentiated
capabilities.
Sustain
our company and
our world for future
generations.
Deliver
ongoing financial fitness
through continuous
improvement.
November 13, 2018
Beef Segment Results
5
Adjusted Operating Income
1
($ in millions)
Dollars ROS%
Q418 $348 8.9%
FY18 $1,044 6.7%
Q418 Sales volume ↑3.4%
Average price ↓0.6%
FY18 Sales volume ↑3.1%
Average price ↑1.2%
FY19 Outlook
Adjusted Operating Margin
1
>6%
1
Represents a non-GAAP financial measure. Adjusted operating income and adjusted operating margin are explained and reconciled to
comparable GAAP measures in the Appendix. A further explanation of providing non-GAAP guidance is included in the appendix.
Tyson Foods, Inc.
November 13, 2018
Pork Segment Results
6
Adjusted Operating Income
1
($ in millions)
Dollars ROS%
Q418 $76 6.7%
FY18 $374 7.7%
Q418 Sales volume ↓2.7%
Average price ↓14.5%
FY18 Sales volume ↓2.1%
Average price ↓4.8%
FY19 Outlook
Adjusted Operating Margin
1
Around 6%
1
Represents a non-GAAP financial measure. Adjusted operating income and adjusted operating margin are explained and reconciled to
comparable GAAP measures in the Appendix. A further explanation of providing non-GAAP guidance is included in the appendix.
Tyson Foods, Inc.
November 13, 2018
Chicken Segment Results
7
Adjusted Operating Income
1
($ in millions)
Dollars ROS%
Q418 $182 5.8%
FY18 $947 7.9%
Q418 Sales volume ↑10.4%
Average price ↓7.0%
FY18 Sales volume ↑4.9% &
Average price ↑0.7%
FY19 Outlook
Adjusted Operating Margin
1
Near 8%
1
Represents a non-GAAP financial measure. Adjusted operating income and adjusted operating margin are explained and reconciled to
comparable GAAP measures in the Appendix. A further explanation of providing non-GAAP guidance is included in the appendix.
Tyson Foods, Inc.
November 13, 2018
Prepared Foods Segment Results
8
Adjusted Operating Income
1
($ in millions)
Dollars ROS%
Q418 $235 11.2%
FY18 $979 11.3%
Q418 Sales volume ↑0.7%
2
Average price ↑0.6%
FY18 Sales volume ↑9.8%
2
Average price ↑6.1%
FY19 Outlook
Adjusted Operating Margin
1
>11%
1
Represents a non-GAAP financial measure. Adjusted operating income and adjusted operating margin are explained and reconciled to
comparable GAAP measures in the Appendix. A further explanation of providing non-GAAP guidance is included in the appendix.
2
Excludes divestitures.
Tyson Foods, Inc.
November 13, 2018
FY18 Highlights
• Record adjusted EPS
1,2
of $6.16, up 16%
from last year
• Record adjusted operating income
1
of
$3.291B
• Adjusted operating margin
1
of 8.2%
• Record operating cash flow of ~$3B, up
14% from last year
• Record Beef and Prepared Foods
operating income
9
($ in millions, except per share data)
Q418 FY18
Sales $9,999 $40,052
Adjusted Operating Income
1
$831 $3,291
Adjusted Operating Margin
1
8.3% 8.2%
Adjusted EPS
1
$1.58 $6.16
Adjusted Operating Income
1
($ in millions)
Q418 FY18
Dollars ROS% Dollars ROS%
Beef $348 8.9% $1,044 6.7%
Pork 76 6.7% 374 7.7%
Chicken 182 5.8% 947 7.9%
Prepared
Foods
235 11.2% 979 11.3%
Other (10) n/a (53) n/a
Total $831 8.3% $3,291 8.2%
1
Represents a non-GAAP financial measure. Adjusted EPS, adjusted operating income and adjusted operating margin are
explained and reconciled to comparable GAAP measures in the Appendix.
2
Includes incremental earnings per share of $0.20 and $0.78 due to tax reform for Q418 and FY18, respectively
Tyson Foods, Inc.
November 13, 2018
FY19 Outlook
1
10
SALES
~$41B
CAP EX
~$1.5B
ADJUSTED EPS
2
$5.75-6.10
1
Does not include expected results for the Other segment.
2
Projected Adjusted EPS as of 11/13/18. Represents a non-GAAP financial measure. Adjusted EPS is explained and reconciled to comparable GAAP measures in the Appendix. A further explanation of providing non-GAAP guidance is included in the Appendix.
ADJUSTED OPERATING MARGIN
BEEF PORK CHICKEN PREPARED FOODS
>6% around 6% near 8% >11%
Tyson Foods, Inc.
11
Our Strategy
—
Sustainably feed the world with
the fastest growing protein brands.
How We Will Achieve Our Strategy
Grow
our businesses
through differentiated
capabilities.
Sustain
our company and
our world for future
generations.
Deliver
ongoing financial fitness
through continuous
improvement.
Tyson Innovation Focus Areas
Flexible Eating Real Food.
More Fresh.
Personalized
Health
Valuing the Extremes Cultural
Currency
Three meals a day is
no longer the norm;
consumers eat smaller
snacks throughout the day
Fresh, whole foods
found in nature are
the gold standard
for consumers
Consumers are looking
for foods that meet
their own nutrition and
health needs
Both ends of the value tier
are growing faster than the
middle; consumers remain
spend-conscious yet also
look for premium experiences
Food is a form of
cultural self expression
and exploration
Shifts in eating, shopping and macro consumer trends inspired five platform innovation focus areas
12 Tyson Foods, Inc. November 13, 2018
2019 Innovation
FY19 Priority Project Launches
There is a strong pipeline of innovation planned in FY19 within each of the five focus areas.
Food Service launch
of Jimmy Dean Delights
®
Egg'wich Sandwich
Tyson
®
Any’tizers
®
Chicken Bites &
Nuggets with Tajin
®
Seasoning
Deli
Grilled
Breast
Pulled Rotisserie
Grab & Go
Food Service
Sous Vide Chicken
Nashville Hot Chicken
Food Service
Chicken
Twists
Tyson Red
Label
®
Wings
Tyson
®
Dinner & Entrée Kits
Any'tizers
®
Family
Value Pack
Deli Pulled Chicken
True Chews
®
Meal
Makers
TM
Dog Treats
Nudges
®
Simply
Sliced Dog Treats
Aidells
®
Whole Blends
TM
Sausage
Sara Lee
®
Premium Meats
Grab & Go Test
Food Service
Pork Belly
Tyson® Any’tizers®
Chicken Chips
Retail & Food Service
13 Tyson Foods, Inc. November 13, 2018
Expansion into handheld forms
for an easy on the go morning
snack or breakfast
Jimmy Dean
®
Handhelds
2019 Innovation Pipeline Highlights - Prepared Foods
Exciting innovation for 2019
Aidells
®
Whole Blends
TM
Sausage
Target flexitarians with a
blend of chicken + plant-
based protein
Expand Hillshire Snacking
platform to more substantial
protein boxes with premium
meats, cheeses and
spreads
Hillshire
®
Snacking Protein Box
Expand Jimmy Dean branded
presence in food service
through the launch of frittata
sandwiches for C-store
Jimmy Dean
®
Food Service Products
Capitalize on hot sandwich
trends through slow
cooked meats that bring
warmth to lunchtime
sandwiches
Hillshire Farm
®
Hot Sandwich Starters
Leverage Hillshire Farm®
brand equity with Tajin,
Mexico’s fastest growing
spice brand
Tajin Platform
Deli Smoked Entrée Meats
Smoked by Hillshire Farm
®
brand - whole muscle, smoked
meats that are ready in minutes
True Chews
®
Meal Makers
TM
Dog Treats
Meal Toppers to add
flavor and variety to
everyday dog food
14 Tyson Foods, Inc. November 13, 2018
2019 Innovation Pipeline Highlights - Chicken
Expansion in protein-packed
snacking with new snackable
forms and bold flavors
Chicken Chips
Partner with Tajin
®
, an
on-trend growth brand,
to bring authenticity and
flavor
Tajin
®
Versatile pulled rotisserie
chicken in an easy 1lb
grab & go bag
Deli Pulled Rotisserie
Shareable, fun and
Instagram-worthy, these
Twists meet the needs of
our foodservice operators
Homestyle and
Pretzel chosen as key
partnership with
leading broadline
distributor
Breaded Chicken Twists
Exciting innovation for 2019
Breast, thigh, and
thigh for pulling.
Cooked Sous Vide Chicken
Operators can serve
consistent, high quality,
juicy No Antibiotics Ever
chicken to their patrons -
every time
Modernize and expand
Slow Cooker kits
Slow Cooker Kits
15 Tyson Foods, Inc. November 13, 2018
November 13, 2018
Dollar Performance Core 9 and Total Tyson
16
Dollar Sales % Change Among Top 10 Branded Food Companies >$5B
Source: IRI Total U.S. Multi-Outlet (x Costco), Dollar Sales, 52 weeks ending 9/30/2018
Includes Total Edible + Pet Food, Tyson = Tyson + Nature Raised Farms + AdvancePierre
TOTAL
CORE 9
TOTAL
F&B
2.7%
2.3%
2.0% 2.0%
1.9%
-0.1%
-0.2%
-0.3%
-0.5%
-1.4%
-1.6%
-2.0%
Tyson Foods, Inc.
November 13, 2018
Volume Performance Core 9 and Total Tyson
17
Volume Sales % Change Among Top 10 Branded Food Companies >$5B
Source: IRI Total U.S. Multi-Outlet (x Costco), Dollar Sales, 52 weeks ending 9/30/2018
Includes Total Edible + Pet Food, Tyson = Tyson + Nature Raised Farms + AdvancePierre
TOTAL
CORE 9
TOTAL
F&B
4.9%
1.5%
0.8%
0.7%
0.5%
0.3%
-0.2%
-0.4%
-0.7%
-2.6%
-5.4%
-8.2%
Tyson Foods, Inc.
November 13, 2018
Foodservice Broadline Volume Performance
18
Volume % Change vs. Prior Year (52 weeks ending August 2018)
Source: NPD SupplyTrack ® data, 52 weeks ending August 2018. Excludes Large Chain and Operator Label data
Focus Six = Chicken Value Added, Breakfast Sausage, Dinner Sausage, Peperoni Pizza Topping, Bacon, Philly Steak
Tyson = Tyson, AdvancePierre and Original Philly
1.4%
3.4%
3.1%
Total Broadline Focus 6 Categories Tyson Focus 6
Tyson Foods, Inc.
Appendix
Q4 FY2018 Non-GAAP Reconciliations
November 13, 2018
2018 2017 2018 2017 2018 2017 2018 2017
Reported net income per share attributable to Tyson 1.47$ 1.07$ 8.19$ 4.79$
Add: One-time cash bonus to frontline employees - - - - 109 - 0.22 -
Add: Restructuring and related charges 14 150 0.03 0.26 59 150 0.12 0.26
Add: Impairments net of realized gains associated with the divestitures of
non-protein businesses (a)
(11) 45 0.08 0.06 68 45 0.34 (0.01)
Add: San Diego Prepared Foods operation impairment - - - - - 52 - 0.09
Add: AdvancePierre purchase accounting and acquisition related costs (b) - 26 - 0.04 - 103 - 0.18
Less: Tax benefit from remeasurement of net deferred tax liabilities at
lower enacted tax rates
- - - - - - (2.71) -
Adjusted net income per share attributable to Tyson 1.58$ 1.43$ 6.16$ 5.31$
Fourth Quarter
Twelve Months Ended
September 29, 2018
Pretax Impact
EPS Impact
Pretax Impact
EPS Impact
20
EPS Reconciliations
In millions, except per share data
(Unaudited)
(a) EPS impact for the twelve months of fiscal 2018 included $101 million of impairments related to the expected sale of a no
n-protein business net of a $33 million realized pretax gain
associated with the sale of non
-protein businesses, which combined on an after-tax basis resulted in a $0.34 impact to EPS. EPS impact for the fourth quarter of fiscal 2018 included a pretax
gain, but a post
-tax loss, associated with sale of a non-protein business. EPS impact for the twelve months ended fiscal 2017 included a tax benefit related to the expected sale of a non-
protein
business of ($0.07) recognized in the third quarter of fiscal 2017.
(b) AdvancePierre purchase accounting and acquisition related costs for the twelve months ended September 30, 2017, included
a $36 million purchase accounting adjustment for the fair
value step
-up of inventory, $49 million of acquisition related costs and $18 million of acquisition bridge financing fees.
Adjusted net income per share attributable to Tyson (Adjusted EPS) is presented as a supplementary measure of our financial p
erformance that is not required by, or presented in accordance
with, GAAP. We use Adjusted EPS as an internal performance measurement and as one criterion for evaluating our performance re
lative to that of our peers. We believe Adjusted EPS is
meaningful to our investors to enhance their understanding of our financial performance and is frequently used by securities
analysts, investors and other interested parties to compare our
performance with the performance of other companies that report Adjusted EPS. Further, we believe that Adjusted EPS is a usef
ul measure because it improves comparability of results of
operations from period to period. Adjusted EPS should not be considered a substitute for net income per share attributable to
Tyson or any other measure of financial performance reported in
accordance with GAAP. Investors should rely primarily on our GAAP results and use non
-GAAP financial measures only supplementally in making investment decisions. Our calculation of
Adjusted EPS may not be comparable to similarly titled measures reported by other companies.
Adjusted EPS guidance is provided on a non
-GAAP basis. The Company is not able to reconcile its full-year fiscal 2019 Adjusted EPS guidance to its full-year fiscal 2019 projected GAAP EPS
guidance because certain information necessary to calculate such measure on a GAAP basis is unavailable or dependent on the t
iming of future events outside of our control. Therefore,
because of the uncertainty and variability of the nature of the amount of future adjustments, which could be significant, the
Company is unable to provide a reconciliation of this measure
without unreasonable effort.
Tyson Foods, Inc.
November 13, 2018
(a) Operating income impact for fiscal 2018 included $101 million of impairments related to the expected sale of a non
-protein business net of $33 million realized pretax gains associated with the sale of non-protein businesses. Operating
income impact for the fourth quarter of fiscal 2018 included a $11 million realized pretax gain associated with the sale of a
non-protein business.
Adjusted operating income is presented as a supplementary measure of our operating performance that is not required by, or pr
esented in accordance with, GAAP. We use adjusted operating income as an internal performance
measurement and as one criterion for evaluating our performance relative to that of our peers. We believe adjusted operating
income is meaningful to our investors to enhance their understanding of our operating performance and is
frequently used by securities analysts, investors and other interested parties to compare our performance with the performanc
e o
f other companies that report adjusted operating income. Further, we believe that adjusted operating income
is a useful measure because it improves comparability of results of operations from period to period. Adjusted operating inco
me should not be considered as a substitute for operating income or any other measure of operating
performance reported in accordance with GAAP. Investors should rely primarily on our GAAP results and use non
-GAAP financial measures only supplementally in making investment decisions. Our calculation of adjusted operating income
may not be comparable to similarly titled measures reported by other companies.
21
Segment Operating Income & Operating Margin Reconciliations
In millions, except
per share data
(Unaudited)
Beef Pork Chicken
Prepared
Foods
Other
Intersegment
Sales
Total
Sales 3,913$ 1,134$ 3,115$ 2,097$ 60$ (320)$ 9,999$
Reported operating income (loss) 347$ 76$ 174$ 241$ (10)$ -$ 828$
Less: Realized gain associated with the divestiture of a
non-protein business (a)
- - - (11) - - (11)
Add: Restructuring and related charges 1 - 8 5 - - 14
Adjusted operating income (loss) 348$ 76$ 182$ 235$ (10)$ -$ 831$
Reported operating margin % 8.9% 6.7% 5.6% 11.5% n/a n/a 8.3%
Adjusted operating margin % 8.9% 6.7% 5.8% 11.2% n/a n/a 8.3%
Beef Pork Chicken
Prepared
Foods
Other
Intersegment
Sales
Total
Sales 15,473$ 4,879$ 12,044$ 8,668$ 305$ (1,317)$ 40,052$
Reported operating income (loss) 1,013$ 361$ 866$ 868$ (53)$ -$ 3,055$
Add: One-time cash bonus to frontline employees 27 12 51 19 - - 109
Add: Restructuring and related charges 4 1 30 24 - - 59
Add: Impairments net of realized gains associated with the
divestitures of non-protein businesses (a)
- - - 68 - - 68
Adjusted operating income (loss) 1,044$ 374$ 947$ 979$ (53)$ -$ 3,291$
Reported operating margin % 6.5% 7.4% 7.2% 10.0% n/a n/a 7.6%
Adjusted operating margin % 6.7% 7.7% 7.9% 11.3% n/a n/a 8.2%
Adjusted Segment Operating Income (Loss)
(for the fourth quarter ended September 29, 2018)
Adjusted Segment Operating Income (Loss)
(for the twelve months ended September 29, 2018)
Tyson Foods, Inc.
