2. Certain information contained in this presentation may constitute forward-looking statements, such as information
relating to expected performance. These forward-looking statements are subject to a number of factors and uncertainties that
could cause actual results and experiences to differ materially from the anticipated results and expectations expressed in such
forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak
only as of the date made.
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) the effect of, or changes in, general economic conditions;
(ii) 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; (iii) 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; (iv) successful rationalization of existing facilities and operating efficiencies of the facilities; (v) risks associated with
our commodity purchasing activities; (vi) access to foreign markets together with foreign economic conditions, including
currency fluctuations, import/export restrictions and foreign politics; (vii) outbreak of a livestock disease (such as avian
influenza or bovine spongiform encephalopathy), 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; (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) significant
marketing plan changes by large customers or loss of one or more large customers; (xii) adverse results from litigation; (xiii)
risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xiv)
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; (xv) our ability to make effective
acquisitions or joint ventures and successfully integrate newly acquired businesses into existing operations; (xvi) effectiveness
of advertising and marketing programs; and (xvii) those factors listed under Item 1A. “Risk Factors” included in our
September 28, 2013, Annual Report filed on Form 10-K.
FORWARD-LOOKING STATEMENTS
2
3. • Tyson Foods has made a turnaround since 2009
• Producing more consistent, stable earnings
• Growth strategy implemented in 2012
– Growing international in-country production
– Growing domestic prepared foods and value-added products
• Measurable growth
– Annual 3 - 4% revenue growth
– At least 10% EPS growth over time
EXECUTIVE SUMMARY
3
4. • Tyson Today
• The Global Marketplace
• Strategic Growth
• Financial Results and Outlook
• Appendix
TODAY’S DISCUSSION
4
7. • Multi-Protein Chicken, Beef, Pork
• Multi-Channel Retail, Food Service, Exports
• Multi-National Brazil, China, India, Mexico, United States
• Broad Product Portfolio
THERE IS VALUE IN DIVERSITY
7
• Value-added Chicken
• Value-added Beef & Pork
• Pepperoni
• Beef & Pork Pizza Toppings
• Pizza Crusts
• Tortillas
• Bread Sticks
• Handheld Foods
• Bacon
• Deli Meats
• Hams
• Franks
• Ethnic Foods
• Soups & Sides
• Sauces
• Appetizers
• Sausage
• Breakfast Items
• Snacks
• Prepared Meals
• Meal Kits
• Fully-cooked Dinner Meats
• Commodity Chicken
• Commodity Beef & Pork
Tyson’s diversity provides a natural hedge against economic cycles
and a foundation for growth.
8. • The Chicken segment is vertically integrated; we manage the production
process from beginning to end.
• The Beef and Pork segments are not vertically integrated; we typically
do not carry feed cost risk. Livestock are purchased from various
producers.
• The Prepared Foods segment comprises a variety of models; raw
materials for these foods come from internal and external sources.
• The International segment includes chicken processing operations in
Brazil, China, India and Mexico.
OUR APPROACH TO BUSINESS
8
Value-added beef and pork items such as pepperoni and bacon are in the Prepared
Foods segment. Value-added chicken items such as nuggets are in the Chicken segment.
10. VALUABLE PRODUCT PORTFOLIO
Tyson offers product innovation, consumer insights and a broad portfolio of foods and brands that
provide solutions for our customers while giving us pricing power beyond commodity protein.
10
Product Categories Tyson
Competitor
A
Competitor
B
Competitor
C
Competitor
D
Competitor
E
Competitor
F
Competitor
G
Competitor
H
Competitor
I
Chicken X X X X X X
Fresh Chicken X X X X X
Value-Added Chicken X X X X X X
Pork (boxed) X X X X X
Sliced Meats/Ham X X X X X
Bacon X X X X
Pre-Cooked Ribs X X X
Pork Sausage X X X X
Portioned Cut X X X X
Beef (boxed) X X X X
Patties X X X X
Cooked X X X
Portioned Cut X X X
Prepared Foods X X X
Pizza Toppings X X
Pizza Crust X
Tortilla/Chips X
Soups/Sauces X X
Culinary Specialties X
Handhelds X X X
11. FOUR-YEAR PERFORMANCE:
AT A GLANCE
• Delivered record sales each year
• Generated $5 billion in operating cash
flows after funding $700 million in
working capital increases
• Invested $2.5 billion back into the
business to fuel continued improvement,
growth and acquisitions
• Paid down over $1 billion in debt and
reduced interest expense
• Returned $1.3 billion to shareholders via
stock repurchases and dividends
• Improved net debt to cap to 17% (Gross
debt to cap = 28%)
• Established investment grade rating
profiles with Moody’s, S&P and Fitch
• Improved liquidity to $2.1 billion at the
end of fiscal 2013
• Achieved $795 million in operating
efficiencies in the chicken segment (more
than $1 billion in total since 2008)
• Averaged over $2 adjusted earnings per
share from continuing operations*
* See Appendix for non-GAAP reconciliations
11
Tyson Foods has achieved an improved level of performance while navigating global
economic challenges, unfavorable market dynamics and often staggering input cost
increases. From FY2010 through FY2013 Tyson:
“The turnaround is over. It’s time to turn it on.”
– Donnie Smith, Tyson Foods President & CEO
12. POSITIONED FOR SUCCESS
• Approximately 115,000
Team Members worldwide
• Second largest food production
company in the Fortune 500
• Worldwide locations:
– 57 Chicken plants
– 13 Beef plants*
– 9 Pork plants*
– 26 Prepared Foods plants**
• Beef and pork plants are near cattle
and hog supplies, which lowers
transportation costs and improves
availability of livestock for processing
• Chicken plants are located in regions
with a climate suitable for poultry
production and access to feed grains
• International operations in Brazil,
China, India and Mexico
12
* Includes three case-ready beef and pork plants
** As of January 2014
• Chicken
• Beef
• Pork
• Prepared Foods
• Case-Ready Beef & Pork
• Animal Nutrition
Where we are in the U.S.**
13. FarmCheck™ Responsible Sourcing
Four Guiding Principles
1. Program
Care enough to check on the farm,
in person
2. Advisory Panel
Be humble enough to seek expert
advice
3. Our Research Program
Be curious enough to find better
ways
4. Our Internal Management Teams
Be committed enough to give it our
full attention
13
14. • Active in the fight against hunger for
more than 15 years
• Donated nearly 100 million pounds
of much needed protein to food
banks.
• Partners with Share Our Strength, Lift
Up America, Feeding America,
National Urban League and the
League of United Latin American
Citizens to raise awareness and help
feed the hungry across the nation.
• Meals That Matter disaster relief
program begun in 2012 to support
our long-standing tradition of feeding
people during times of disaster.
MAKING GREAT FOOD.
MAKING A DIFFERENCE™
14
16. OUR CHALLENGE: FEEDING THE WORLD
WORLD POPULATION GROWTH
75M YEAR
POPULATION
GROWING
ADDING A CITY
THE SIZE OF
PHILADELPHIA
WEEKLY
7B
2013
9B
2050
(UNITED NATIONS)
(CENTER FOR FOOD INTEGRITY)
IT’S ESTIMATED THAT IN 40 YEARS
THE WORLD WILL NEED
100% MORE FOOD
THAN WE PRODUCE TODAY
16
(UNITED NATIONS)
17. • The world’s population is growing;
protein consumption is growing
with it.
• Globally, as people enter the
middle class, they add protein to
their diets.
MARKET OPPORTUNITIES
17
Source: USDA FAS and OECD.
Includes Beef/Veal, Pork, Broilers, and Turkey
• To feed the global demand for
protein, the U.S. is exporting more
of its protein production.
• U.S. protein production is flat to
declining; less protein available to
U.S. consumers resulting in higher
domestic pricing.
Global protein consumption is projected to grow more than 500% from 1960 to 2022.
18. 100
110
120
130
140
150
160
170
180
190
200
230
235
240
245
250
255
260
265
270
275
280
Combined Per Capita Domestic Meat Availability
(Beef, Pork, Chicken, Turkey; Carcass Weight Equivalent)
Cents perPound
Source: USDA actual historical data; 2014 forecast by Robert A. Brown, Inc.; (1) represents beef, pork, chicken and turkey carcass weight equivalent; (2) annual composite average
price is a simple average of monthly USDA wholesale price for beef, pork and poultry; 2014 data as of 4/15/2014.
PROTEIN SUPPLY AND PRICE
18
Per Capita Domestic Protein Availability(1) Annual Composite Average Price(2)
Declines in the amount of protein available on the domestic
market have resulted in higher prices.
Pounds
19. PROTEIN PRODUCTION AND EXPORTS
19
Source: USDA and Robert A. Brown, Inc., May 2014;
2014 is RAB forecast
U.S. production of the combined
three major proteins has been
flat to declining in recent years,
while export demand has
remained strong, leading to less
domestic availability of protein.
Chicken Beef
PorkU.S. Exports as a
% of Production
(Right Scale)
U.S. Production in Million Pounds
(Left Scale)
0%
5%
10%
15%
20%
25%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0%
2%
4%
6%
8%
10%
12%
23,000
23,500
24,000
24,500
25,000
25,500
26,000
26,500
27,000
27,500
0%
5%
10%
15%
20%
25%
-
5,000
10,000
15,000
20,000
25,000
20. CORN FUTURES AND
CHICKEN LIVE COSTS
20
While grain prices have been volatile in recent years, Tyson’s product innovation,
quality and service to customers has helped mitigate feed cost volatility.
Historical monthly chart of continuous prompt corn futures contract, source DTN Prophet X.
Analysis overlay by Tyson Foods, Inc.
Updated January 15, 2014
21. BEEF: MANAGE THE SPREAD
21
DollarsperHead
There is a strong correlation between revenue and the cost of cattle. Tyson historically has
outperformed industry indexes in the spread between revenue per head and cattle costs.
$1,400
$1,450
$1,500
$1,550
$1,600
$1,650
$1,700
$1,750
$1,800
$1,850
$1,900
$1,950
$2,000
$2,050
$2,100
OCTFY12
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCTFY13
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCTFY14
NOV
DEC
JAN
FEB
MAR
APR
USDA TOTAL REVENUE
USDA CATTLE COST
22. PORK: MANAGE THE SPREAD
22
DollarsperHead
There is a strong correlation between revenue and the cost of hogs. Tyson historically has
outperformed industry indexes in the spread between revenue per head and hog costs.
$140
$160
$180
$200
$220
$240
$260
$280
$300
OCTFY12
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCTFY13
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCTFY14
NOV
DEC
JAN
FEB
MAR
APR
USDA TOTAL REVENUE
USDA HOG COST
24. Accelerate
• Grow domestic value-added chicken sales
• Grow prepared foods sales
• Grow international chicken production
Innovate
• Products and services
• Consumer insights
Cultivate
• Talent development to support Tyson’s growth and long-term future
GROWTH STRATEGY
24
Growth will be fueled by adding value, increasing international
production, innovation and Team Members.
25. Achieve
• Grow sales, earnings and shareholder value:
– Grow international in-country production
– Develop innovative, value-added products
– Make strategic acquisitions
• Prepared foods, ethnic foods, value-added chicken
• Small regional players
• International
– Get paid for the value we provide
– Repurchase shares
– Keep operations efficient and costs under control
IT’S ALL ABOUT TAKING ACTION
25
Focus matters.
26. INNOVATION DRIVES NEW PRODUCTS
AND GROWTH
26
Product innovation is at the core of our ability to
retain and grow our customer base.
27. Tyson Foods is bringing our reputation for quality
proteins to the breakfast category
INTRODUCING TYSON® DAY STARTS™
AND WRIGHT® BRAND SAUSAGE
27
28. • Economic trends
• Demographic trends
• Flavor trends
• Category attitude and usage studies
• Consumer insights
• Product testing
• Macro trends
• Consumer panel data
• Consumer segment insights
• In-store/shopping studies
• Concept testing
INSIGHTS FUEL THE INNOVATION
PROCESS
28
Our proven approach to innovation helps us
deliver food solutions to customers and consumers.
• Products
• Flavors
• Targets
• Packages
• Usage Occasions
NEW!
30. INVESTMENT THESIS
• Strong balance sheet provides attractive options for growth:
– Reinvestment through CapEx
– Strategic acquisitions in prepared foods, value-added chicken or international
– Return capital to shareholders through stock repurchases and dividends
• Aggressively increase international in-country production where demand
for protein is growing
• Measurable growth:
– Annual 3 - 4% revenue growth
– At least 10% EPS growth over time
• Become the leading “solution-providing” food company – not only a
commodity protein company:
– Lean-thinking culture focused on operational excellence and continuous improvement
– Superior quality, service and innovation to be the customer’s go-to supplier
– Alternative channels such as convenience stores, dollar stores and drug store chains
30
Tyson strives to be the investment of choice.
31. • Reduced net debt by $3.4 billion from FY01 through FY13
• Decreased net debt to cap from 58% to 17% from FY01 through FY13
• Invested $558 million in FY13 CapEx
• Achieved $1.3 billion in operating cash flow in FY13, fourth consecutive
year above $1 billion
• Liquidity at the end of FY13 was $2.1 billion, well above our goal of
$1.2 billion
• Invested $550 million in FY13 to repurchase 21.1 million shares
• At the beginning of FY14, increased the regular quarterly dividend by
50% to $0.075 per share, following a 25% increase the previous year and
a $0.10 per share special dividend in December 2012
BALANCE SHEET STRENGTH
31
A strong capital structure creates opportunities.
32. SALES BY SEGMENT & DIST. CHANNEL
32
Tyson’s multi-protein approach is supported by multi-channel distribution.
* During the second quarter of fiscal 2014, we began reporting our International operation as a separate segment, which was previously included in our Chicken segment. Our
International segment became a separate reportable segment as a result of changes to our internal financial reporting to align with previously announced executive leadership
changes. The Beef, Pork and Prepared Foods segment results were not impacted by this change. Fiscal 2013 has been reclassified to reflect this change.
*
33. -$1.00
-$0.50
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
$1.90
ADJUSTED EARNINGS PER SHARE*
33
Fiscal Year
* From continuing operations. See Appendix for non-GAAP reconciliations.
$2.22
$1.97
From FY2010 to FY2013, Tyson produced more consistent, stable earnings while absorbing
approximately $1.5 billion in additional feed costs in our Chicken and International segments.
$2.26
“We’re confident we can
deliver at least $2.78 EPS
for fiscal 2014.”
CFO Dennis Leatherby
34. $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$1,565
$1,289
$1,286
$1,375
ADJUSTED OPERATING INCOME*
34
Fiscal Year
inmillions
* From continuing operations. See Appendix for non-GAAP reconciliations.
Tyson averaged nearly $1.4 billion annually in adjusted operating income from 2010 to 2013.
35. Sales Adjusted EPS*
FY 2010 $28.2 Billion $2.22
FY 2011 $32.0 Billion $1.90
FY 2012 $33.1 Billion $1.97
FY 2013 $34.4 Billion $2.26
FY 2014 Expectation ≈ $37 Billion ≥ $2.78
FY 2015 Expectation ≈ +3-4% ≥ 10%
GROWTH EXPECTATIONS
35
* See Appendix for non-GAAP reconciliations
“What got us here won’t get us there.”
– Donnie Smith, Tyson Foods President & CEO
• Expect top-line sales to grow about 3-4% annually
• Sales from value-added products should grow 6-8% annually
• Sales from international production should grow 12-16% annually
• EPS should grow at least 10% annually over time
36. INTERNATIONAL GROWTH BY 2015FYE
36
Tyson’s plans for international growth are focused on poultry production and
further processing in Brazil, China and India, in addition to our long-standing
poultry business in Mexico.
2.7MM
bpw
2MM
bpw
450K
bpw
3MM
bpw
bpw = birds per week
37. Capital expenditures to grow existing businesses:
• Capital maintenance level approximates $250 million a year
• FY14 CapEx plan is $650-700 million
• 20%+ Modified Internal Rate of Return
Acquisitions to advance value-added and international
growth:
• Acquisitions and joint ventures target 20%+ ROIC
Return cash to shareholders:
• Share repurchases
• Dividends
PRIORITIES FOR CASH
37
38. • Be the best-in-class operator in beef, pork and chicken
• Consistently outperform beef and pork industry indexes
• Achieved more than $1 billion in operational efficiencies
in our chicken segment since 2008
CONTINUOUS IMPROVEMENT
38
39. • Tyson Foods is growing into a solution-providing food company:
– Being a commodity protein company is not our goal or our destiny
– Pursuing value-added product development
– Delivering quality, service and innovation enables us to be the
customers’ go-to supplier
– Growth into alternate channels such as convenience stores,
dollar stores and drug store chains offer opportunities
• Strong balance sheet gives Tyson options to grow
– International growth potential
– Small bolt-on or large, strategic acquisitions
• Establishing a culture of lean thinking, operational excellence and
continuous improvement
• Expectations of annual 3-4% revenue growth and at least 10%
EPS growth over time
• Share repurchases and increased dividends
WHY TYSON?
39
42. NON-GAAP RECONCILIATIONS
Adjusted operating income and adjusted net income from continuing operations per share attributable to Tyson (adjusted EPS) are presented as
supplementary financial measurements in the evaluation of our business. We believe the presentations of adjusted operating income and
adjusted EPS help investors assess our financial performance from period to period and enhance understanding of our financial performance.
However, adjusted operating income and adjusted EPS may not be comparable to those of other companies in our industry, which limits the
usefulness as comparative measures. Adjusted operating income and adjusted EPS are not measures required by or calculated in accordance with
GAAP and should not be considered as substitutes for any measures 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.
(in millions, except per share data) 12 Months Ended
September 28, 2013 September 29, 2012 October 1, 2011 October 2, 2010 October 3, 2009
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Reported from Continuing Operations $ 1,375 $ 2.31 $ 1,286 $ 1.68 $ 1,289 $ 1.98 $ 1,574 $ 2.09 $ (215) $ (1.47)
Less:
Gain from currency translation
adjustment — (0.05) — — — — — — — —
Gain from insurance proceeds — — — — — — (38) (0.06) — —
Gain on sale of interest in an equity
method investment — — — — — (0.03) — — — —
Reversal of reserves for foreign
uncertain tax positions — — — — — (0.05) — — — —
Add:
Charges to plant closing — — — — — — — — 15 0.02
Impairment of goodwill — — — — — — 29 0.07 560 1.50
Impairment of equity method
investment — — — — — — — 0.03 — —
Loss related to early extinguishment of
debt — — — 0.29 — — — — — —
Losses related to note repurchases — — — — — — — 0.09 — —
Adjusted from Continuing Operations $ 1,375 $ 2.26 $ 1,286 $ 1.97 $ 1,289 $ 1.90 $ 1,565 $ 2.22 $ 360 $ 0.05
42
43. NON-GAAP RECONCILIATIONS CONTINUED
(in millions, except per share data) 12 Months Ended
September 27, 2008 September 29, 2007 September 30, 2006 October 1, 2005 October 2, 2004
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Operating
Income EPS
Reported from Continuing Operations $ 331 $ 0.24 $ 613 $ 0.75 $ (50) $ (0.58) $ 655 $ 1.04 $ 733 $ 1.13
Less:
Gain on sale of an investment — (0.03) — — — — — — — —
Gain on sales of assets — — (19) (0.03) — — — — — —
Gain on sale of remaining interest in
Specialty Brands, Inc. — — — — — — — (0.01) — —
Income related to vitamin antitrust
litigation — — — — — — (12) (0.02) — —
Tax adjustments — — — — — — — (0.04) — —
Add:
Charges related to BSE — — — — — — — — 61 0.11
Charges related to flood damage 7 0.01 — — — — — — — —
Charges related to plant closings 13 0.02 — — 63 0.11 14 0.02 40 0.07
Cumulative effect of change in accounting
principles — — — — — 0.02 — — — —
Impairment of assets 23 0.04 5 0.01 — — — — 21 0.04
Impairment of intangible assets 10 0.02 7 0.01 3 0.01 — — 25 0.04
Live swine legal settlement — — — — — — 33 0.06 — —
Loss related to Hurricane Katrina — — — — — — 8 0.01 — —
Severance and restructuring charges 23 0.04 — — 9 0.02 — — — —
Tax adjustments — — — — — 0.04 — — — —
Write off of obsolete inventory — — — — 7 0.01 — — — —
Adjusted from Continuing Operations $ 407 $ 0.34 $ 606 $ 0.74 $ 32 $ (0.37) $ 698 $ 1.06 $ 880 $ 1.39
43
