Emerging growth company ¨ |
(d) | Exhibits |
TYSON FOODS, INC. | |||
Date: November 13, 2018 | By: | /s/ Stewart Glendinning | |
Name: | Stewart Glendinning | ||
Title: | Executive Vice President and | ||
Chief Financial Officer |
(in millions, except per share data) | Fourth Quarter | Twelve Months Ended | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Sales | $ | 9,999 | $ | 10,145 | $ | 40,052 | $ | 38,260 | |||||||
Operating Income | 828 | 681 | 3,055 | 2,931 | |||||||||||
Net Income | 537 | 395 | 3,027 | 1,778 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | — | 1 | 3 | 4 | |||||||||||
Net Income Attributable to Tyson | $ | 537 | $ | 394 | $ | 3,024 | $ | 1,774 | |||||||
Net Income Per Share Attributable to Tyson | $ | 1.47 | $ | 1.07 | $ | 8.19 | $ | 4.79 | |||||||
Adjusted¹ Operating Income | $ | 831 | $ | 902 | $ | 3,291 | $ | 3,263 | |||||||
Adjusted¹ Net Income Per Share Attributable to Tyson | $ | 1.58 | $ | 1.43 | $ | 6.16 | $ | 5.31 |
• | Record GAAP EPS of $8.19, up 71% from last year; Record Adjusted EPS of $6.16, up 16% from last year |
• | Record GAAP operating income of $3,055 million; Record Adjusted operating income of $3,291 million |
• | Total Company GAAP operating margin of 7.6%; Adjusted operating margin of 8.2% |
• | Record operating cash flows of approximately $3 billion, up 14% from last year |
• | Record Beef and Prepared Foods operating income |
• | GAAP EPS of $1.47, up 37% from last year; Adjusted EPS of $1.58, up 10% from last year |
• | GAAP operating income of $828 million; Adjusted operating income of $831 million |
• | Total Company GAAP and Adjusted operating margin of 8.3% |
• | Record Beef operating income of $347 million |
• | Lower enacted tax rates positively impacted the fourth quarter and twelve months Adjusted EPS by $0.20 and $0.78, respectively |
• | Adjusted1 EPS guidance of $5.75-$6.10 for fiscal 2019, which is comparable to fiscal 2018 results when excluding the income from businesses held for sale before they were divested. |
Sales | ||||||||||||||||||||
(for the fourth quarter and twelve months ended September 29, 2018, and September 30, 2017) | ||||||||||||||||||||
Fourth Quarter | Twelve Months Ended | |||||||||||||||||||
Volume | Avg. Price | Volume | Avg. Price | |||||||||||||||||
2018 | 2017 | Change | Change | 2018 | 2017 | Change | Change | |||||||||||||
Beef | $ | 3,913 | $ | 3,808 | 3.4 | % | (0.6 | )% | $ | 15,473 | $ | 14,823 | 3.1 | % | 1.2 | % | ||||
Pork | 1,134 | 1,362 | (2.7 | )% | (14.5 | )% | 4,879 | 5,238 | (2.1 | )% | (4.8 | )% | ||||||||
Chicken | 3,115 | 3,035 | 10.4 | % | (7.0 | )% | 12,044 | 11,409 | 4.9 | % | 0.7 | % | ||||||||
Prepared Foods | 2,097 | 2,263 | (7.9 | )% | 0.6 | % | 8,668 | 7,853 | 4.1 | % | 6.1 | % | ||||||||
Other | 60 | 92 | (41.7 | )% | 11.8 | % | 305 | 349 | (18.2 | )% | 6.7 | % | ||||||||
Intersegment Sales | (320 | ) | (415 | ) | n/a | n/a | (1,317 | ) | (1,412 | ) | n/a | n/a | ||||||||
Total | $ | 9,999 | $ | 10,145 | 2.7 | % | (4.1 | )% | $ | 40,052 | $ | 38,260 | 2.5 | % | 2.1 | % |
Operating Income (Loss) | ||||||||||||||||||||
(for the fourth quarter and twelve months ended September 29, 2018, and September 30, 2017) | ||||||||||||||||||||
Fourth Quarter | Twelve Months Ended | |||||||||||||||||||
Operating Margin | Operating Margin | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Beef | $ | 347 | $ | 305 | 8.9 | % | 8.0 | % | $ | 1,013 | $ | 877 | 6.5 | % | 5.9 | % | ||||
Pork | 76 | 121 | 6.7 | % | 8.9 | % | 361 | 645 | 7.4 | % | 12.3 | % | ||||||||
Chicken | 174 | 263 | 5.6 | % | 8.7 | % | 866 | 1,053 | 7.2 | % | 9.2 | % | ||||||||
Prepared Foods | 241 | 11 | 11.5 | % | 0.5 | % | 868 | 462 | 10.0 | % | 5.9 | % | ||||||||
Other | (10 | ) | (19 | ) | n/a | n/a | (53 | ) | (106 | ) | n/a | n/a | ||||||||
Total | $ | 828 | $ | 681 | 8.3 | % | 6.7 | % | $ | 3,055 | $ | 2,931 | 7.6 | % | 7.7 | % |
Adjusted Operating Income (Loss) (Non-GAAP) | ||||||||||||||||||||
(for the fourth quarter and twelve months ended September 29, 2018, and September 30, 2017) | ||||||||||||||||||||
Fourth Quarter | Twelve Months Ended | |||||||||||||||||||
Adjusted Operating Margin (Non-GAAP) | Adjusted Operating Margin (Non-GAAP) | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Beef | $ | 348 | $ | 313 | 8.9 | % | 8.2 | % | $ | 1,044 | $ | 885 | 6.7 | % | 6.0 | % | ||||
Pork | 76 | 124 | 6.7 | % | 9.1 | % | 374 | 648 | 7.7 | % | 12.4 | % | ||||||||
Chicken | 182 | 322 | 5.8 | % | 10.6 | % | 947 | 1,117 | 7.9 | % | 9.8 | % | ||||||||
Prepared Foods | 235 | 152 | 11.2 | % | 6.7 | % | 979 | 675 | 11.3 | % | 8.6 | % | ||||||||
Other | (10 | ) | (9 | ) | n/a | n/a | (53 | ) | (62 | ) | n/a | n/a | ||||||||
Total | $ | 831 | $ | 902 | 8.3 | % | 8.9 | % | $ | 3,291 | $ | 3,263 | 8.2 | % | 8.5 | % |
• | Beef - Sales volume increased due to improved availability of cattle supply, stronger demand for our beef products and increased exports. Average sales price decreased for the fourth quarter of fiscal 2018 associated with increased availability of live cattle supply and lower livestock costs. Average sales price increased for fiscal 2018 as demand for our beef products and strong exports outpaced the increase in live cattle supplies in the first six months of fiscal 2018, partially offset by lower livestock costs in the back half of fiscal 2018. Operating income increased as we continued to maximize our revenues relative to live fed cattle costs, partially offset by increased labor and freight costs and one-time cash bonus to frontline employees of $27 million incurred in the second quarter of fiscal 2018. |
• | Pork - Sales volume decreased as a result of balancing our supply with customer demand during a period of margin compression. The average sales price decrease for fiscal 2018 was associated with lower livestock costs. Operating income decreased from prior year record results due to periods of compressed pork margins caused by excess domestic availability of pork, higher labor and freight costs, and one-time cash bonus to frontline employees of $12 million incurred in the second quarter of fiscal 2018. |
• | Chicken - Sales volume increased primarily due to incremental volume from business acquisitions. Average sales price decreased for the fourth quarter of fiscal 2018 due to sales mix associated with acquisitions and lower export sales prices. Average sales price increased for fiscal 2018 due to sales mix changes and price increases associated with cost inflation, partially offset by reduced average sales prices in the fourth quarter of fiscal 2018. Operating income decreased due to increased labor, freight and growout expenses, in addition to $103 million and $61 million for the twelve months and fourth quarter of fiscal 2018, respectively, of higher feed ingredient costs and net realized and mark-to-market derivative losses as well as $51 million of one-time cash bonus to frontline employees incurred in the second quarter of fiscal 2018. |
• | Prepared Foods - Sales volume increased for fiscal 2018 primarily due to incremental volume from business acquisitions net of business divestitures. Sales volume decreased in the fourth quarter of fiscal 2018 due to business divestitures. Excluding the impact of the business divestitures, sales volumes in the fourth quarter of fiscal 2018 increased by 0.7%. Average sales price increased due to product mix which was positively impacted by business acquisitions and divestitures, partially offset for the fourth quarter of fiscal 2018 by the impact of pass-through sales prices from lower input costs. Operating income increased due to improved mix and net incremental results from business acquisitions, net of divestitures, partially offset by higher input and freight costs and one-time cash bonus to frontline employees of $19 million incurred in the second quarter of fiscal 2018. Additionally, operating income was impacted in fiscal 2018 by $68 million of impairments, net of realized gains, related to the divestiture of non-protein businesses. Operating income for the fourth quarter of fiscal 2017 was impacted by a $45 million impairment related to the expected sale of a non-protein business, $82 million of restructuring and related charges, and $14 million of AdvancePierre purchase accounting and acquisition-related costs. For the twelve months of fiscal 2017, operating income was impacted from $34 million of AdvancePierre purchase accounting and acquisition related costs, $97 million of impairments related to our San Diego Prepared Foods operation and the expected sale of a non-protein business, $30 million of compensation and benefits integration expense and $82 million of restructuring and related charges. |
• | Sales – For fiscal 2019, we expect sales to grow to $41 billion due to volume growth and mix. Most of the sales growth is expected to occur in our Chicken segment, as well as expected growth in our Prepared Foods segment after excluding the impact of the divestitures. |
• | Beef – We expect industry fed cattle supplies to increase approximately 2% in fiscal 2019 as compared to fiscal 2018. We expect ample supplies in regions where we operate our plants. We believe our Beef segment's adjusted operating margin will be above 6% in fiscal 2019. |
• | Pork – We expect industry hog supplies to increase approximately 3% in fiscal 2019 as compared to fiscal 2018. We believe our Pork segment's adjusted operating margin will be around 6% in fiscal 2019. |
• | Chicken – USDA projects an increase in chicken production of approximately 2% in fiscal 2019 as compared to fiscal 2018. We believe our Chicken segment's adjusted operating margin will be near 8% in fiscal 2019. |
• | Prepared Foods – We believe our Prepared Foods segment's adjusted operating margin will exceed 11% in fiscal 2019. |
• | Other – Other includes our foreign operations related to raising and processing live chickens in China, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC. We expect Other adjusted operating loss to decrease in fiscal 2019. |
• | Capital Expenditures – We expect capital expenditures to approximate $1.5 billion for fiscal 2019. Capital expenditures 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. |
• | Net Interest Expense – We expect net interest expense to approximate $350 million for fiscal 2019. |
• | Liquidity – We expect total liquidity, which was approximately $1.4 billion at September 29, 2018, to remain above our minimum liquidity target of $1.0 billion. |
• | Tax Rate – We expect our adjusted effective tax rate to approximate 23.5% in fiscal 2019. |
• | Dividends – Effective November 12, 2018, the Board of Directors increased the quarterly dividend previously declared on August 9, 2018, to $0.375 per share on our Class A common stock and $0.3375 per share on our Class B common stock. The increased quarterly dividend is payable on December 14, 2018, to shareholders of record at the close of business on November 30, 2018. The Board also declared a quarterly dividend of $0.375 per share on our Class A common stock and $0.3375 per share on our Class B common stock, payable on March 15, 2019, to shareholders of record at the close of business on March 1, 2019. We anticipate the remaining quarterly dividends in fiscal 2019 will be $0.375 per share of our Class A and Class B stock, respectively. This results in an annual dividend rate in fiscal 2019 of $1.50 for Class A shares and $1.35 for Class B shares, or a 25% increase compared to the fiscal 2018 annual dividend rate. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | ||||||||||||
Sales | $ | 9,999 | $ | 10,145 | $ | 40,052 | $ | 38,260 | |||||||
Cost of Sales | 8,650 | 8,794 | 34,926 | 33,177 | |||||||||||
Gross Profit | 1,349 | 1,351 | 5,126 | 5,083 | |||||||||||
Selling, General and Administrative | 521 | 670 | 2,071 | 2,152 | |||||||||||
Operating Income | 828 | 681 | 3,055 | 2,931 | |||||||||||
Other (Income) Expense: | |||||||||||||||
Interest income | (1 | ) | (2 | ) | (7 | ) | (7 | ) | |||||||
Interest expense | 87 | 94 | 350 | 279 | |||||||||||
Other, net | (15 | ) | 9 | (33 | ) | 31 | |||||||||
Total Other (Income) Expense | 71 | 101 | 310 | 303 | |||||||||||
Income before Income Taxes | 757 | 580 | 2,745 | 2,628 | |||||||||||
Income Tax Expense (Benefit) | 220 | 185 | (282 | ) | 850 | ||||||||||
Net Income | 537 | 395 | 3,027 | 1,778 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | — | 1 | 3 | 4 | |||||||||||
Net Income Attributable to Tyson | $ | 537 | $ | 394 | $ | 3,024 | $ | 1,774 | |||||||
Weighted Average Shares Outstanding: | |||||||||||||||
Class A Basic | 294 | 296 | 295 | 296 | |||||||||||
Class B Basic | 70 | 70 | 70 | 70 | |||||||||||
Diluted | 367 | 369 | 369 | 370 | |||||||||||
Net Income Per Share Attributable to Tyson: | |||||||||||||||
Class A Basic | $ | 1.50 | $ | 1.10 | $ | 8.44 | $ | 4.94 | |||||||
Class B Basic | $ | 1.35 | $ | 0.98 | $ | 7.59 | $ | 4.45 | |||||||
Diluted | $ | 1.47 | $ | 1.07 | $ | 8.19 | $ | 4.79 | |||||||
Dividends Declared Per Share: | |||||||||||||||
Class A | $ | 0.300 | $ | 0.225 | $ | 1.275 | $ | 0.975 | |||||||
Class B | $ | 0.270 | $ | 0.203 | $ | 1.148 | $ | 0.878 | |||||||
Sales Growth | (1.4 | )% | 4.7 | % | |||||||||||
Margins: (Percent of Sales) | |||||||||||||||
Gross Profit | 13.5 | % | 13.3 | % | 12.8 | % | 13.3 | % | |||||||
Operating Income | 8.3 | % | 6.7 | % | 7.6 | % | 7.7 | % | |||||||
Net Income Attributable to Tyson | 5.4 | % | 3.9 | % | 7.6 | % | 4.6 | % | |||||||
Effective Tax Rate | 29.1 | % | 31.9 | % | (10.3 | )% | 32.3 | % |
September 29, 2018 | September 30, 2017 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 270 | $ | 318 | |||
Accounts receivable, net | 1,723 | 1,675 | |||||
Inventories | 3,513 | 3,239 | |||||
Other current assets | 182 | 219 | |||||
Assets held for sale | — | 807 | |||||
Total Current Assets | 5,688 | 6,258 | |||||
Net Property, Plant and Equipment | 6,169 | 5,568 | |||||
Goodwill | 9,739 | 9,324 | |||||
Intangible Assets, net | 6,759 | 6,243 | |||||
Other Assets | 754 | 673 | |||||
Total Assets | $ | 29,109 | $ | 28,066 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities: | |||||||
Current debt | $ | 1,911 | $ | 906 | |||
Accounts payable | 1,694 | 1,698 | |||||
Other current liabilities | 1,426 | 1,424 | |||||
Liabilities held for sale | — | 4 | |||||
Total Current Liabilities | 5,031 | 4,032 | |||||
Long-Term Debt | 7,962 | 9,297 | |||||
Deferred Income Taxes | 2,107 | 2,979 | |||||
Other Liabilities | 1,198 | 1,199 | |||||
Total Tyson Shareholders’ Equity | 12,803 | 10,541 | |||||
Noncontrolling Interests | 8 | 18 | |||||
Total Shareholders’ Equity | 12,811 | 10,559 | |||||
Total Liabilities and Shareholders’ Equity | $ | 29,109 | $ | 28,066 |
Twelve Months Ended | |||||||
September 29, 2018 | September 30, 2017 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 3,027 | $ | 1,778 | |||
Depreciation and amortization | 943 | 761 | |||||
Deferred income taxes | (865 | ) | (39 | ) | |||
Gain on dispositions of businesses | (42 | ) | |||||
Impairment of assets | 175 | 214 | |||||
Share-based compensation expense | 69 | 92 | |||||
Other, net | (58 | ) | (57 | ) | |||
Net changes in operating assets and liabilities | (286 | ) | (150 | ) | |||
Cash Provided by Operating Activities | 2,963 | 2,599 | |||||
Cash Flows From Investing Activities: | |||||||
Additions to property, plant and equipment | (1,200 | ) | (1,069 | ) | |||
Purchases of marketable securities | (42 | ) | (79 | ) | |||
Proceeds from sale of marketable securities | 37 | 61 | |||||
Acquisitions, net of cash acquired | (1,474 | ) | (3,081 | ) | |||
Proceeds from sale of business | 797 | — | |||||
Other, net | (24 | ) | 4 | ||||
Cash Used for Investing Activities | (1,906 | ) | (4,164 | ) | |||
Cash Flows From Financing Activities: | |||||||
Payments on debt | (1,307 | ) | (3,159 | ) | |||
Proceeds from issuance of long-term debt | 1,148 | 5,444 | |||||
Borrowings on revolving credit facility | 1,755 | 1,810 | |||||
Payments on revolving credit facility | (1,755 | ) | (2,110 | ) | |||
Proceeds from issuance of commercial paper | 21,024 | 8,138 | |||||
Repayments of commercial paper | (21,197 | ) | (7,360 | ) | |||
Payment of AdvancePierre TRA liability | — | (223 | ) | ||||
Purchases of Tyson Class A common stock | (427 | ) | (860 | ) | |||
Dividends | (431 | ) | (319 | ) | |||
Stock options exercised | 102 | 154 | |||||
Other, net | (14 | ) | 15 | ||||
Cash (Used for) Provided by Financing Activities | (1,102 | ) | 1,530 | ||||
Effect of Exchange Rate Changes on Cash | (3 | ) | 4 | ||||
Decrease in Cash and Cash Equivalents | (48 | ) | (31 | ) | |||
Cash and Cash Equivalents at Beginning of Year | 318 | 349 | |||||
Cash and Cash Equivalents at End of Period | $ | 270 | $ | 318 |
Twelve Months Ended | |||||||
September 29, 2018 | September 30, 2017 | ||||||
Net income | $ | 3,027 | $ | 1,778 | |||
Less: Interest income | (7 | ) | (7 | ) | |||
Add: Interest expense | 350 | 279 | |||||
Add: Income tax expense (benefit) | (282 | ) | 850 | ||||
Add: Depreciation | 723 | 642 | |||||
Add: Amortization (a) | 210 | 106 | |||||
EBITDA | $ | 4,021 | $ | 3,648 | |||
Adjustments to EBITDA: | |||||||
Add: One-time cash bonus to frontline employees | $ | 109 | $ | — | |||
Add: AdvancePierre purchase accounting and acquisition related costs (b) | — | 103 | |||||
Add: Impairments net of realized gain associated with the divestiture of non-protein businesses (c) | 68 | 45 | |||||
Add: Restructuring and related charges | 59 | 150 | |||||
Add: San Diego Prepared Foods operation impairment | — | 52 | |||||
Total Adjusted EBITDA | $ | 4,257 | $ | 3,998 | |||
Pro forma Adjustments to EBITDA: | |||||||
Add: AdvancePierre adjusted EBITDA (prior to acquisition) (d) | $ | — | $ | 193 | |||
Total Pro forma adjusted EBITDA | $ | 4,257 | $ | 4,191 | |||
Total gross debt | $ | 9,873 | $ | 10,203 | |||
Less: Cash and cash equivalents | (270 | ) | (318 | ) | |||
Less: Short-term investments | (1 | ) | (3 | ) | |||
Total net debt | $ | 9,602 | $ | 9,882 | |||
Ratio Calculations: | |||||||
Gross debt/EBITDA | 2.5x | 2.8x | |||||
Net debt/EBITDA | 2.4x | 2.7x | |||||
Gross debt/Adjusted EBITDA | 2.3x | 2.6x | |||||
Net debt/Adjusted EBITDA | 2.3x | 2.5x | |||||
Gross debt/Pro forma Adjusted EBITDA | 2.3x | 2.4x | |||||
Net debt/Pro forma Adjusted EBITDA | 2.3x | 2.4x |
(a) | Excluded the amortization of debt issuance and debt discount expense of $10 million and $13 million for the fiscal year ended September 29, 2018, and September 30, 2017, respectively, as it is included in interest expense. |
(b) | AdvancePierre acquisition and integration costs for the fiscal year 2017 included $36 million of purchase accounting adjustments, $49 million acquisition related costs and $18 million of acquisition bridge financing fees. |
(c) | For the fiscal year ended September 30, 2017, included an impairment related to the expected sale of a non-protein business of $45 million. For the fiscal year ended September 29, 2018, included $101 million of impairments, net of realized gains, related to the divestiture of non-protein businesses. |
(d) | Represents AdvancePierre's pre-acquisition Adjusted EBITDA, for the approximate eight months ended prior to the June 7, 2017, closing of the acquisition. This amount was added to our Adjusted EBITDA for the fiscal year ended September 30, 2017, in order for Net debt to Adjusted EBITDA to include a full twelve months of AdvancePierre results on a pro forma basis for the fiscal year |
Fourth Quarter | Twelve Months Ended | ||||||||||||||||||||||||||||||
Pretax Impact | EPS Impact | Pretax Impact | EPS Impact | ||||||||||||||||||||||||||||
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 |
(a) | EPS impact for the twelve months of fiscal 2018 included $101 million of impairments related to the expected sale of a non-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 Operating Income (Loss) | ||||||||||||||||||
(for the fourth quarter ended September 29, 2018) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | Other | Total | |||||||||||||
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 |
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the fourth quarter ended September 30, 2017) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | Other | Total | |||||||||||||
Reported operating income (loss) | $ | 305 | $ | 121 | $ | 263 | $ | 11 | $ | (19 | ) | $ | 681 | |||||
Add: AdvancePierre purchase accounting and acquisition related costs (b) | — | — | 3 | 14 | 9 | 26 | ||||||||||||
Add: Impairment associated with the divestiture of a non-protein business (a) | — | — | — | 45 | — | 45 | ||||||||||||
Add: Restructuring and related charges | 8 | 3 | 56 | 82 | 1 | 150 | ||||||||||||
Adjusted operating income (loss) | $ | 313 | $ | 124 | $ | 322 | $ | 152 | $ | (9 | ) | $ | 902 |
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the twelve months ended September 29, 2018) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | Other | Total | |||||||||||||
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 |
Adjusted Operating Income (Loss) | ||||||||||||||||||
(for the twelve months ended September 30, 2017) | ||||||||||||||||||
Beef | Pork | Chicken | Prepared Foods | Other | Total | |||||||||||||
Reported operating income (loss) | $ | 877 | $ | 645 | $ | 1,053 | $ | 462 | $ | (106 | ) | $ | 2,931 | |||||
Add: AdvancePierre purchase accounting and acquisition related costs (b) | — | — | 8 | 34 | 43 | 85 | ||||||||||||
Add: Restructuring and related charges | 8 | 3 | 56 | 82 | 1 | 150 | ||||||||||||
Add: Impairment associated with the divestiture of a non-protein business (a) | — | — | — | 45 | — | 45 | ||||||||||||
Add: San Diego Prepared Foods operation impairment | — | — | — | 52 | — | 52 | ||||||||||||
Adjusted operating income (loss) | $ | 885 | $ | 648 | $ | 1,117 | $ | 675 | $ | (62 | ) | $ | 3,263 |
(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. Operating income impact for fiscal 2017 and the fourth quarter ended September 30, 2017 included a $45 million impairment related to the expected sale of a non-protein business. |
(b) | AdvancePierre purchase accounting and acquisition related costs impacting operating income for the fourth quarter ended September 30, 2017, included a $12 million purchase accounting adjustment for the fair value step-up of inventory and $14 million of acquisition related costs. AdvancePierre purchase accounting and acquisition related costs impacting operating income for the twelve months ended September 30, 2017, included a $36 million purchase accounting adjustment for the fair value step-up of inventory and $49 million of acquisition related costs. |
Media Contact: Gary Mickelson, 479-290-6111 Investor Contact: Jon Kathol, 479-290-4235 | Source: Tyson Foods, Inc. Category: IR, Newsroom |