Tyson Foods Annual Report 2012

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FY2012 Annual Report · Tyson Foods

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[X]

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended September 29, 2012

[ ]

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

001-14704
(Commission File Number)
______________________________________________

TYSON FOODS, INC.
(Exact name of registrant as specified in its charter)

______________________________________________

Delaware

(State or other jurisdiction of
incorporation or organization)

2200 Don Tyson Parkway, Springdale, Arkansas
(Address of principal executive offices)

Registrant’s telephone number, including area code:

Securities Registered Pursuant to Section 12(b) of the Act:

71-0225165
(I.R.S. Employer Identification No.)

72762-6999
(Zip Code)

(479) 290-4000

Title of Each Class
Class A Common Stock, Par Value $0.10

Name of Each Exchange on Which Registered
New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: Not Applicable
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of
the Exchange Act.

Large accelerated filer [X]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)

Accelerated filer [ ]

Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

On March 31, 2012, the aggregate market value of the registrant’s Class A Common Stock, $0.10 par value (Class A stock), and Class
B Common Stock, $0.10 par value (Class B stock), held by non-affiliates of the registrant was $5,551,806,987 and $340,008,
respectively. Class B stock is not publicly listed for trade on any exchange or market system. However, Class B stock is convertible
into Class A stock on a share-for-share basis, so the market value was calculated based on the market price of Class A stock.

On October 27, 2012, there were 288,751,385 shares of Class A stock and 70,015,755 shares of Class B stock outstanding.

INCORPORATION BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held February 1, 2013,
are incorporated by reference into Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

PART I

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Item 3.

Item 4.

PART II

Item 5.

Item 6.

Item 7.

Properties

Legal Proceedings

Mine Safety Disclosures

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

PART III

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

PART IV

Directors, Executive Officers and Corporate Governance

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

Item 15.

Exhibits, Financial Statement Schedules

PAGE

PART I

ITEM 1. BUSINESS

GENERAL
Founded in 1935, Tyson Foods, Inc. and its subsidiaries (collectively, “Company,” “we,” “us” or “our”) are one of the world’s largest
meat protein companies and the second-largest food production company in the Fortune 500 with one of the most recognized brand
names in the food industry. We produce, distribute and market chicken, beef, pork, prepared foods and related allied products. 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 and introduce 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 operating efficiencies of our facilities.

We operate a fully vertically integrated poultry production process. Our integrated operations consist of breeding stock, contract
growers, feed production, processing, further-processing, marketing and transportation of chicken and related allied products,
including animal and pet food ingredients. Through our wholly-owned subsidiary, Cobb-Vantress, Inc. (Cobb), we are one of the
leading poultry breeding stock suppliers in the world. Investing in breeding stock research and development allows us to breed into
our flocks the characteristics found to be most desirable.

We also process live fed cattle and hogs and fabricate dressed beef and pork carcasses into primal and sub-primal meat cuts, case
ready beef and pork and fully-cooked meats. In addition, we derive value from allied products such as hides and variety meats sold to
further processors and others.

We produce a wide range of fresh, value-added, frozen and refrigerated food products. Our products are marketed and sold primarily
by our sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores, military commissaries, industrial
food processing companies, chain restaurants or their distributors, international export companies and domestic distributors who serve
restaurants, foodservice operations such as plant and school cafeterias, convenience stores, hospitals and other vendors. Additionally,
sales to the military and a portion of sales to international markets are made through independent brokers and trading companies.

We have a 50/50 joint venture with Syntroleum Corporation, called Dynamic Fuels LLC (Dynamic Fuels), which produces renewable
synthetic fuels. Construction of production facilities was completed in late fiscal 2010, and initial production began in October 2010.

FINANCIAL INFORMATION OF SEGMENTS
We operate in four segments: Chicken, Beef, Pork and Prepared Foods. The contribution of each segment to net sales and operating
income (loss), and the identifiable assets attributable to each segment, are set forth in Note 16: Segment Reporting of the Notes to
Consolidated Financial Statements.

DESCRIPTION OF SEGMENTS
Chicken: Chicken operations include breeding and raising chickens, as well as processing live chickens into fresh, frozen and value-
added chicken products and logistics operations to move products through the supply chain. Products are marketed domestically to
food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as
schools, healthcare facilities, the military and other food processors, as well as to international markets. It also includes sales from
allied products and our chicken breeding stock subsidiary.

Beef: Beef operations include processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts
and case-ready products. This segment also includes sales from allied products such as hides and variety meats, as well as logistics
operations to move products through the supply chain. Products are marketed domestically to food retailers, foodservice distributors,
restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and
other food processors, as well as to international markets.

Pork: Pork operations include processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-
ready products. This segment also includes our live swine group, related allied product processing activities and logistics operations to
move products through the supply chain. Products are marketed domestically to food retailers, foodservice distributors, restaurant
operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other
food processors, as well as to international markets.

Prepared Foods: Prepared Foods operations include manufacturing and marketing frozen and refrigerated food products and logistics
operations to move products through the supply chain. Products include pepperoni, bacon, beef and pork pizza toppings, pizza crusts,
flour and corn tortilla products, appetizers, prepared meals, ethnic foods, soups, sauces, side dishes, meat dishes and processed meats.
Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial
foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international
markets.

The results from Dynamic Fuels are included in Other.

RAW MATERIALS AND SOURCES OF SUPPLY
Chicken: The primary raw materials used in our chicken operations are corn and soybean meal used as feed and live chickens raised
primarily by independent contract growers. Our vertically-integrated chicken process begins with the grandparent breeder flocks and
ends with broilers for processing. Breeder flocks (i.e., grandparents) are raised to maturity in grandparent growing and laying farms
where fertile eggs are produced. Fertile eggs are incubated at the grandparent hatchery and produce pullets (i.e., parents). Pullets are
sent to breeder houses, and the resulting eggs are sent to our hatcheries. Once chicks have hatched, they are sent to broiler farms.
There, contract growers care for and raise the chicks according to our standards, with advice from our technical service personnel,
until the broilers reach the desired processing weight. Adult chickens are transported to processing plants where they are slaughtered
and converted into finished products, which are then sent to distribution centers and delivered to customers.

We operate our own feed mills to produce scientifically-formulated feeds. In fiscal 2012, corn, soybean meal and other feed
ingredients were major production costs, representing roughly 69% of our cost of growing a live chicken. In addition to feed
ingredients to grow the chickens, we use cooking ingredients, packaging materials and cryogenic agents. We believe our sources of
supply for these materials are adequate for our present needs, and we do not anticipate any difficulty in acquiring these materials in the
future. While we produce nearly all our inventory of breeder chickens and live broilers, we also purchase live, ice-packed or deboned
chicken to meet production and sales requirements.

Beef: The primary raw materials used in our beef operations are live cattle. We do not have facilities of our own to raise cattle but
employ cattle buyers located throughout cattle producing areas who visit independent feed yards and public auctions and buy live
cattle on the open spot market. These buyers are trained to select high quality animals, and we continually measure their performance.
We also enter into various risk-sharing and procurement arrangements with producers to secure a supply of livestock for our facilities.
We believe the sources of supply of live cattle are adequate for our present needs.

Pork: The primary raw materials used in our pork operations are live hogs. The majority of our live hog supply is obtained through
various procurement relationships with independent producers. We employ buyers who make purchase agreements of various time
durations as well as purchase hogs on a daily basis, generally a few days before the animals are processed. These buyers are trained to
select high quality animals, and we continually measure their performance. We believe the sources of supply of live hogs are adequate
for our present needs. Additionally, we raise a number of weanling swine to sell to independent finishers and supply a minimal amount
of live swine for our own processing needs.

Prepared Foods: The primary raw materials used in our prepared foods operations are commodity based raw materials, including
chicken, beef, pork, corn, flour and vegetables. Some of these raw materials are provided by our other segments, while others may be
purchased from numerous suppliers and manufacturers. We believe the sources of supply of raw materials are adequate for our present
needs.

SEASONAL DEMAND
Demand for chicken and beef products generally increases during the spring and summer months and generally decreases during the
winter months. Pork and prepared foods products generally experience increased demand during the winter months, primarily due to
the holiday season, while demand decreases during the spring and summer months.

CUSTOMERS
Wal-Mart Stores, Inc. accounted for 13.8% of our fiscal 2012 consolidated sales. Sales to Wal-Mart Stores, Inc. were included in the
Chicken, Beef, Pork and Prepared Foods segments. Any extended discontinuance of sales to this customer could, if not replaced, have
a material impact on our operations. No other single customer or customer group represented more than 10% of fiscal 2012
consolidated sales.

COMPETITION
Our food products compete with those of other food producers and processors and certain prepared food manufacturers. Additionally,
our food products compete in markets around the world.

We seek to achieve a leading market position for our products via our principal marketing and competitive strategy, which includes:

•
•
•

identifying target markets for value-added products;
concentrating production, sales and marketing efforts to appeal to and enhance demand from those markets; and
utilizing our national distribution systems and customer support services.

Past efforts indicate customer demand can be increased and sustained through application of our marketing strategy, as supported by
our distribution systems. The principal competitive elements are price, product safety and quality, brand identification, breadth and
depth of product offerings, availability of products, customer service and credit terms.

INTERNATIONAL
We sold products to approximately 130 countries in fiscal 2012. Major sales markets include Brazil, Canada, Central America, China,
the European Union, Japan, Mexico, the Middle East, Russia, South Korea, Taiwan, Ukraine and Vietnam.

We have the following international operations:

• Tyson de Mexico, a Mexican subsidiary, is a vertically-integrated poultry production company;
• Cobb-Vantress, a chicken breeding stock subsidiary, has business interests in Argentina, Brazil, the Dominican Republic,

India, Japan, the Netherlands, Peru, the Philippines, Russia, Spain, Sri Lanka, Turkey, the United Kingdom and Venezuela;

• Tyson do Brazil, a Brazilian subsidiary, is a vertically-integrated poultry production company;
•
Shandong Tyson, a Chinese subsidiary, is a vertically-integrated poultry production company;
• Tyson Dalong, a joint venture in China in which we have a majority interest, is a chicken further processing facility;
•
• Godrej Tyson Foods, a joint venture in India in which we have a majority interest, is a poultry processing business.

Jiangsu-Tyson, a Chinese subsidiary, is a vertically-integrated poultry production company; and

Our Tyson do Brazil, Shandong Tyson and Jiangsu-Tyson subsidiaries are currently in start-up phase. We continue to evaluate growth
opportunities in foreign countries. Additional information regarding export sales, long-lived assets located in foreign countries and
income (loss) from foreign operations is set forth in Note 16: Segment Reporting of the Notes to Consolidated Financial Statements.

RESEARCH AND DEVELOPMENT
We conduct continuous research and development activities to improve product development, to automate manual processes in our
processing plants and growout operations, and to improve chicken breeding stock. Our Discovery Center includes 19 research kitchens
and a USDA-inspected pilot plant. The Discovery Center enables us to bring new market-leading retail and foodservice products to the
customer quickly and efficiently. Research and development costs totaled $43 million, $42 million, and $38 million in fiscal 2012,
2011 and 2010, respectively.

ENVIRONMENTAL REGULATION AND FOOD SAFETY
Our facilities for processing chicken, beef, pork and prepared foods, milling feed and housing live chickens and swine are subject to a
variety of federal, state and local environmental laws and regulations, which include provisions relating to the discharge of materials
into the environment and generally provide for protection of the environment. We believe we are in substantial compliance with such
applicable laws and regulations and are not aware of any violations of such laws and regulations likely to result in material penalties or
material increases in compliance costs. The cost of compliance with such laws and regulations has not had a material adverse effect on
our capital expenditures, earnings or competitive position, and except as described below, is not anticipated to have a material adverse
effect in the future.

Congress and the United States Environmental Protection Agency are considering various options to control greenhouse gas
emissions. It is unclear at this time when or if such options will be finalized, or what the final form may be. Due to the uncertainty
surrounding this issue, it is premature to speculate on the specific nature of impacts that imposition of greenhouse gas emission
controls would have on us, and whether such impacts would have a material adverse effect.

We work to ensure our products meet high standards of food safety and quality. In addition to our own internal Food Safety and
Quality Assurance oversight and review, our chicken, beef, pork and prepared foods products are subject to inspection prior to
distribution, primarily by the United States Department of Agriculture (USDA) and the United States Food and Drug Administration
(FDA). We are also participants in the United States Hazard Analysis Critical Control Point (HACCP) program and are subject to the
Sanitation Standard Operating Procedures and the Public Health Security and Bioterrorism Preparedness and Response Act of 2002.

EMPLOYEES AND LABOR RELATIONS
As of September 29, 2012, we employed approximately 115,000 employees. Approximately 96,000 employees were employed in the
United States and 19,000 employees were in foreign countries, primarily China, Mexico and Brazil. Approximately 29,000 employees
in the United States were subject to collective bargaining agreements with various labor unions, with approximately 19% of those
employees included under agreements expiring in fiscal 2013. The remaining agreements expire over the next several years.
Approximately 8,000 employees in foreign countries were subject to collective bargaining agreements. We believe our overall
relations with our workforce are good.

MARKETING AND DISTRIBUTION
Our principal marketing objective is to be the primary provider of chicken, beef, pork and prepared foods products for our customers
and consumers. As such, we utilize our national distribution system and customer support services to achieve the leading market
position for our products. On an ongoing basis, we identify distinct markets and business opportunities through continuous consumer
and market research. In addition to supporting strong regional brands across multiple protein lines, we build the Tyson brand and
Tyson owned brands primarily through well-defined product-specific advertising and public relations efforts focused toward key
consumer targets with specific needs. These efforts are designed to present key Tyson products as everyday solutions to relevant
consumer problems thereby becoming part of regular eating routines.

We have the ability to produce and ship fresh, frozen and refrigerated products worldwide. Domestically, our distribution system
extends to a broad network of food distributors and is supported by our owned or leased cold storage warehouses, public cold storage
facilities and our transportation system. Our distribution centers accumulate fresh and frozen products so we can fill and consolidate
less-than-truckload orders into full truckloads, thereby decreasing shipping costs while increasing customer service. In addition, we
provide our customers a wide selection of products that do not require large volume orders. Our distribution system enables us to
supply large or small quantities of products to meet customer requirements anywhere in the continental United States. Internationally,
we utilize both rail and truck refrigerated transportation to domestic ports, where consolidations take place to transport to foreign
destinations.

PATENTS AND TRADEMARKS
We have filed a number of patents and trademarks relating to our processes and products that either have been approved or are in the
process of application. Because we do a significant amount of brand name and product line advertising to promote our products, we
consider the protection of our trademarks to be important to our marketing efforts. We also have developed non-public proprietary
information regarding our production processes and other product-related matters. We utilize internal procedures and safeguards to
protect the confidentiality of such information and, where appropriate, seek patent and/or trademark protection for the technology we
utilize.

INDUSTRY PRACTICES
Our agreements with customers are generally short-term, primarily due to the nature of our products, industry practices and
fluctuations in supply, demand and price for such products. In certain instances where we are selling further processed products to
large customers, we may enter into written agreements whereby we will act as the exclusive or preferred supplier to the customer, with
pricing terms that are either fixed or variable.

AVAILABILITY OF SEC FILINGS AND CORPORATE GOVERNANCE DOCUMENTS ON INTERNET WEBSITE
We maintain an internet website for investors at http://ir.tyson.com. On this website, we make available, free of charge, annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to any of those reports, as soon as
reasonably practicable after we electronically file such reports with, or furnish to, the Securities and Exchange Commission. Also
available on the website for investors are the Corporate Governance Principles, Audit Committee charter, Compensation Committee
charter, Governance Committee charter, Nominating Committee charter, Code of Conduct and Whistleblower Policy. Our corporate
governance documents are available in print, free of charge to any shareholder who requests them.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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 2013, 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) 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 (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; (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.”

ITEM 1A. RISK FACTORS
These risks, which should be considered carefully with the information provided elsewhere in this report, could materially adversely
affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

Fluctuations in commodity prices and in the availability of raw materials, especially feed grains, live cattle, live swine and
other inputs could negatively impact our earnings.
Our results of operations and financial condition are dependent upon the cost and supply of raw materials such as feed grains, live
cattle, live swine, energy and ingredients, as well as the selling prices for our products, many of which are determined by constantly
changing market forces of supply and demand over which we have limited or no control. Corn, soybean meal and other feed
ingredients are major production costs for vertically-integrated poultry processors such as us, representing roughly 69% of our cost of
growing a live chicken in fiscal 2012. As a result, fluctuations in prices for these feed ingredients, which include competing demand
for corn and soybean meal for use in the manufacture of renewable energy, can adversely affect our earnings. Production of feed
ingredients is affected by, among other things, weather patterns throughout the world, the global level of supply inventories and
demand for grains and other feed ingredients, as well as agricultural and energy policies of domestic and foreign governments.

We have cattle under contract at feed yards owned by third parties; however, most of the cattle we process are purchased from
independent producers. We have cattle buyers located throughout cattle producing areas who visit feed yards and buy live cattle on the
open spot market. We also enter into various risk-sharing and procurement arrangements with producers who help secure a supply of
livestock for daily start-up operations at our facilities. The majority of our live swine supply is obtained through procurement
arrangements with independent producers. We also employ buyers who purchase hogs on a daily basis, generally a few days before the
animals are required for processing. In addition, we raise live swine and sell feeder pigs to independent producers for feeding to
processing weight and have contract growers feed a minimal amount of company-owned live swine for our own processing needs.
Any decrease in the supply of cattle or swine on the spot market could increase the price of these raw materials and further increase
per head cost of production due to lower capacity utilization, which could adversely affect our financial results.

Market supply and demand and the prices we receive for our products may fluctuate due to competition from other food
producers and processors.
We face competition from other food producers and processors. Some of the factors on which we compete and which may drive
demand for our products include:

•
•
•
•
•
•
•

price;
product safety and quality;
brand identification;
breadth and depth of product offerings;
availability of our products and competing products;
customer service; and
credit terms.

Demand for our products also is affected by competitors’ promotional spending, the effectiveness of our advertising and marketing
programs, and the availability or price of competing proteins.

We attempt to obtain prices for our products that reflect, in part, the price we must pay for the raw materials that go into our products.
If we are not able to obtain higher prices for our products when the price we pay for raw materials increases, we may be unable to
maintain positive margins.

Outbreaks of livestock diseases can adversely impact our ability to conduct our operations and demand for our products.
Demand for our products can be adversely impacted by outbreaks of livestock diseases, which can have a significant impact on our
financial results. Efforts are taken to control disease risks by adherence to good production practices and extensive precautionary
measures designed to ensure the health of livestock. However, outbreaks of disease and other events, which may be beyond our
control, either in our own livestock or cattle and hogs owned by independent producers who sell livestock to us, could significantly
affect demand for our products, consumer perceptions of certain protein products, the availability of livestock for purchase by us and
our ability to conduct our operations. Moreover, the outbreak of livestock diseases, particularly in our Chicken segment, could have a
significant effect on the livestock we own by requiring us to, among other things, destroy any affected livestock. Furthermore, an
outbreak of disease could result in governmental restrictions on the import and export of our products to or from our suppliers,
facilities or customers. This could also result in negative publicity that may have an adverse effect on our ability to market our
products successfully and on our financial results.

We are subject to risks associated with our international activities, which could negatively affect our sales to customers in
foreign countries, as well as our operations and assets in such countries.
In fiscal 2012, we sold products to approximately 130 countries. Major sales markets include Brazil, Canada, Central America, China,
the European Union, Japan, Mexico, the Middle East, Russia, South Korea, Taiwan, Ukraine and Vietnam. Our sales to customers in
foreign countries for fiscal 2012 totaled $5.5 billion, of which $4.0 billion related to export sales from the United States. In addition,
we had approximately $564 million of long-lived assets located in foreign countries, primarily Brazil, China, Mexico and India, at the
end of fiscal 2012.

As a result, we are subject to various risks and uncertainties relating to international sales and operations, including:

•

•
•

imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the
importation of poultry, beef and pork products, in addition to import or export licensing requirements imposed by various
foreign countries;
closing of borders by foreign countries to the import of poultry, beef and pork products due to animal disease or other
perceived health or safety issues;
impact of currency exchange rate fluctuations between the U.S. dollar and foreign currencies, particularly the Brazilian real,
the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, and the Mexican peso;
political and economic conditions;
difficulties and costs associated in complying 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;
different regulatory structures and unexpected changes in regulatory environments;
tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and
incremental taxes upon repatriation;
potentially negative consequences from changes in tax laws; and
distribution costs, disruptions in shipping or reduced availability of freight transportation.

Negative consequences relating to these risks and uncertainties could jeopardize or limit our ability to transact business in one or more
of those markets where we operate or in other developing markets and could adversely affect our financial results.

We depend on the availability of, and good relations with, our employees.
We have approximately 115,000 employees, approximately 37,000 of whom are covered by collective bargaining agreements or are
members of labor unions. Our operations depend on the availability and relative costs of labor and maintaining good relations with
employees and the labor unions. If we fail to maintain good relations with our employees or with the labor unions, we may experience
labor strikes or work stoppages, which could adversely affect our financial results.

We depend on contract growers and independent producers to supply us with livestock.
We contract primarily with independent contract growers to raise the live chickens processed in our poultry operations. A majority of
our cattle and hogs are purchased from independent producers who sell livestock to us under marketing contracts or on the open
market. If we do not attract and maintain contracts with growers or maintain marketing and purchasing relationships with independent
producers, our production operations could be negatively affected.

If our products become contaminated, we may be subject to product liability claims and product recalls.
Our products may be subject to contamination by disease-producing organisms or pathogens, such as Listeria monocytogenes,
Salmonella and E. coli. These organisms and pathogens are found generally in the environment; therefore, there is a risk that one or
more, as a result of food processing, could be present in our products. These organisms and pathogens also can be introduced to our
products as a result of improper handling at the further processing, foodservice or consumer level. These risks may be controlled, but
may not be eliminated, by adherence to good manufacturing practices and finished product testing. We have little, if any, control over
handling procedures once our products have been shipped for distribution. Even an inadvertent shipment of contaminated products
may be a violation of law and may lead to increased risk of exposure to product liability claims, product recalls (which may not
entirely mitigate the risk of product liability claims), increased scrutiny and penalties, including injunctive relief and plant closings, by
federal and state regulatory agencies, and adverse publicity, which could exacerbate the associated negative consumer reaction. Any of
these occurrences may have an adverse effect on our financial results.

Our operations are subject to general risks of litigation.
We are involved on an on-going basis in litigation arising in the ordinary course of business or otherwise. Trends in litigation may
include class actions involving consumers, shareholders, employees or injured persons, and claims relating to commercial, labor,
employment, antitrust, securities or environmental matters. Litigation trends and the outcome of litigation cannot be predicted with
certainty and adverse litigation trends and outcomes could adversely affect our financial results.

Our level of indebtedness and the terms of our indebtedness could negatively impact our business and liquidity position.
Our indebtedness, including borrowings under our revolving credit facility, may increase from time to time for various reasons,
including fluctuations in operating results, working capital needs, capital expenditures and possible acquisitions, joint ventures or
other significant initiatives. Our consolidated indebtedness level could adversely affect our business because:

•
•

•

it may limit or impair our ability to obtain financing in the future;
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;
it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business
opportunities that may arise;
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
it may restrict our ability to pay dividends.

Our revolving credit facility contains affirmative and negative covenants that, among other things, may limit or restrict our ability to:
create liens and encumbrances; incur debt; merge, dissolve, liquidate or consolidate; dispose of or transfer assets; change the nature of
our business; engage in certain transactions with affiliates; and enter into sale/leaseback or hedging transactions, in each case, subject
to certain qualifications and exceptions. In addition, we are required to maintain minimum interest expense coverage and maximum
debt to capitalization ratios.

Our 4.50% Senior notes due June 2022 also contain affirmative and negative covenants that, among other things, may limit or restrict
our ability to: create liens; engage in certain sale/leaseback transactions; and engage in certain consolidations, mergers and sales of
assets.

An impairment in the carrying value of goodwill could negatively impact our consolidated results of operations and net worth.
Goodwill is initially recorded at fair value and is not amortized, but is reviewed for impairment at least annually or more frequently if
impairment indicators are present. In assessing the carrying value of goodwill, we make estimates and assumptions about sales,
operating margins, growth rates and discount rates based on budgets, business plans, economic projections, anticipated future cash
flows and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these
factors. Goodwill valuations have been calculated principally using an income approach based on the present value of future cash
flows of each reporting unit and are believed to reflect market participant views which would exist in an exit transaction. Under the
income approach, we are required to make various judgmental assumptions about appropriate discount rates. Disruptions in global
credit and other financial markets and deterioration of economic conditions, could, among other things, cause us to increase the
discount rate used in the goodwill valuations. We could be required to evaluate the recoverability of goodwill prior to the annual
assessment if we experience disruptions to the business, unexpected significant declines in operating results, divestiture of a
significant component of our business or sustained market capitalization declines. These types of events and the resulting analyses
could result in goodwill impairment charges in the future, which could be substantial. As of September 29, 2012, we had $1.9 billion
of goodwill, which represented approximately 16% of total assets.

Domestic and international government regulations could impose material costs.
Our operations are subject to extensive federal, state and foreign laws and regulations by authorities that oversee food safety standards
and processing, packaging, storage, distribution, advertising, labeling and export of our products. Our facilities for processing chicken,
beef, pork, prepared foods and milling feed and for housing live chickens and swine are subject to a variety of international, federal,
state and local laws relating to the protection of the environment, including provisions relating to the discharge of materials into the
environment, and to the health and safety of our employees. Our domestic chicken, beef and pork processing facilities are participants
in the HACCP program and are subject to the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. In
addition, our products are subject to inspection prior to distribution, primarily by the USDA and the FDA. Also, our livestock
procurement and poultry growout activities are regulated by the Grain Inspection, Packers and Stockyards Administration, which is
part of USDA’s Marketing and Regulatory Programs. Loss of or failure to obtain necessary permits and registrations could delay or
prevent us from meeting current product demand, introducing new products, building new facilities or acquiring new businesses and
could adversely affect operating results. Additionally, we are routinely subject to new or modified laws, regulations and accounting
standards. If we are found to be out of compliance with applicable laws and regulations in these or other areas, we could be subject to
civil remedies, including fines, injunctions, recalls or asset seizures, as well as potential criminal sanctions, any of which could have
an adverse effect on our financial results.

A material acquisition, joint venture or other significant initiative could affect our operations and financial condition.
We periodically evaluate potential acquisitions, joint ventures and other initiatives (collectively, “transactions”), and we may seek to
expand our business through the acquisition of companies, processing plants, technologies, products and services, which could include
material transactions. A material transaction may involve a number of risks, including:

•
•
•
•
•

failure to realize the anticipated benefits of the transaction;
difficulty integrating acquired businesses, technologies, operations and personnel with our existing business;
diversion of management attention in connection with negotiating transactions and integrating the businesses acquired;
exposure to unforeseen or undisclosed liabilities of acquired companies; and
the need to obtain additional debt or equity financing for any transaction.

We may not be able to address these risks and successfully develop these acquired companies or businesses into profitable units. If we
are unable to do this, such expansion could adversely affect our financial results.

Market fluctuations could negatively impact our operating results as we hedge certain transactions.
Our business is exposed to fluctuating market conditions. We use derivative financial instruments to reduce our exposure to various
market risks including changes in commodity prices, interest rates and foreign exchange rates. We hold certain positions, primarily in
grain and livestock futures, that do not qualify as hedges for financial reporting purposes. These positions are marked to fair value, and
the unrealized gains and losses are reported in earnings at each reporting date. Therefore, losses on these contracts will adversely
affect our reported operating results. While these contracts reduce our exposure to changes in prices for commodity products, the use
of such instruments may ultimately limit our ability to benefit from favorable commodity prices.

Deterioration of economic conditions could negatively impact our business.
Our business may be adversely affected by changes in economic conditions, including inflation, interest rates, access to capital
markets, consumer spending rates, energy availability and costs (including fuel surcharges) and the effects of governmental initiatives
to manage economic conditions. Any such changes could adversely affect the demand for our products, or the cost and availability of
our needed raw materials, cooking ingredients and packaging materials, thereby negatively affecting our financial results.

Disruptions in global credit and other financial markets and deterioration of economic conditions, could, among other things:

• make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the

future;
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 agreement to the extent we may seek them in the future;
impair the financial condition of some of our customers and suppliers thereby increasing customer bad debts or non-
performance by suppliers;
negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash
flows;
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;
negatively impact our commodity purchasing activities if we are required to record losses related to derivative financial
instruments; or
impair the financial viability of our insurers.

•

Changes in consumer preference could negatively impact our business.
The food industry in general is subject to changing consumer trends, demands and preferences. Trends within the food industry change
often, and failure to identify and react to changes in these trends could lead to, among other things, reduced demand and price
reductions for our products, and could have an adverse effect on our financial results.

The loss of one or more of our largest customers could negatively impact our business.
Our business could suffer significant setbacks in sales and operating income if our customers’ plans and/or markets change
significantly or if we lost one or more of our largest customers, including, for example, Wal-Mart Stores, Inc., which accounted for
13.8% of our sales in fiscal 2012. Many of our agreements with our customers are short-term, primarily due to the nature of our
products, industry practice and the fluctuation in demand and price for our products.

The consolidation of customers could negatively impact our business.
Our customers, such as supermarkets, warehouse clubs and food distributors, have consolidated in recent years, and consolidation is
expected to continue throughout the United States and in other major markets. These consolidations have produced large, sophisticated
customers with increased buying power who are more capable of operating with reduced inventories, opposing price increases, and
demanding lower pricing, increased promotional programs and specifically tailored products. These customers also may use shelf
space currently used for our products for their own private label products. Because of these trends, our volume growth could slow or
we may need to lower prices or increase promotional spending for our products, any of which would adversely affect our financial
results.

Extreme factors or forces beyond our control could negatively impact our business.
Natural disasters, fire, bioterrorism, pandemic or extreme weather, including droughts, floods, excessive cold or heat, hurricanes or
other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages,
damage to our production and processing facilities or disruption of transportation channels, among other things. Any of these factors,
as well as disruptions in our information systems, could have an adverse effect on our financial results.

Media campaigns related to food production present risks.
Media outlets, including new social media platforms, provide the opportunity for individuals or organizations to publicize
inappropriate or inaccurate stories or perceptions about our Company or the food production industry. Such practices have the ability
to cause damage to our brands, the industry generally, or consumers' perceptions of our Company or the food production industry and
may result in negative publicity and adversely affect our financial results.

Our renewable energy ventures and other initiatives might not be successful.
We have been exploring ways to convert animal fats and other by-products from our operations into value-added products. For
example, our joint venture Dynamic Fuels produces renewable synthetic fuels. We will continue to explore other ways to
commercialize opportunities outside our core business, such as renewable energy and other technologically-advanced platforms. These
initiatives might not be as financially successful as we initially announced or might expect due to factors that include, but are not
limited to, availability of tax credits, competing energy prices, failure to operate at the volumes anticipated, abilities of our joint
venture partners and our limited experience in some of these new areas.

Tyson Limited Partnership can exercise significant control.
As of September 29, 2012, Tyson Limited Partnership (the TLP) owns 99.977% of the outstanding shares of the Company's Class B
Common Stock, $0.10 par value (Class B stock) and the TLP and members of the Tyson family own, in the aggregate, 2.53% of the
outstanding shares of the Company's Class A Common Stock, $0.10 par value (Class A stock), giving them, collectively, control of
approximately 71.52% of the total voting power of the Company's outstanding voting stock. At this time, the TLP does not have a
managing general partner, as such, the management rights of the managing general partner may be exercised by a majority of the
percentage interests of the general partners. As of September 29, 2012, Mr. John Tyson, Chairman of the Board of Directors, has
33.33% of the general partner percentage interests, and Ms. Barbara Tyson, a director of the Company, has 11.115% general partner
percentage interests (the remaining general partnership interests are held by the Tyson Partnership Interest Trust (44.44%) and Harry
C. Erwin, III (11.115%)). As a result of these holdings, positions and directorships, the partners in the TLP have the ability to exert
substantial influence or actual control over our management and affairs and over substantially all matters requiring action by our
stockholders, including amendments to our restated certificate of incorporation and by-laws, the election and removal of directors, any
proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactions. This concentration of
ownership may also delay or prevent a change in control otherwise favored by our other stockholders and could depress our stock
price. Additionally, as a result of the Tyson family’s significant ownership of our outstanding voting stock, we are eligible for
“controlled company” exemptions from certain corporate governance requirements of the New York Stock Exchange.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None

ITEM 2. PROPERTIES
We have production and distribution operations in the following states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas,
Kentucky, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina,
Tennessee, Texas, Virginia, Washington and Wisconsin. We also have sales offices throughout the United States. Additionally, we,
either directly or through our subsidiaries, have sales offices, facilities or participate in joint venture operations in Argentina, Brazil,
Canada, China, the Dominican Republic, Hong Kong, India, Japan, Mexico, the Netherlands, Peru, the Philippines, Russia, South
Korea, Spain, Sri Lanka, Taiwan, Thailand, the United Arab Emirates, the United Kingdom and Venezuela.

Number of Facilities

Owned

Leased

Total

Chicken Segment:

Processing plants

Rendering plants

Blending mills

Feed mills

Broiler hatcheries

Breeder houses

Broiler farm houses

Beef Segment Production Facilities

Pork Segment Production Facilities

Prepared Foods Segment Processing Plants

Distribution Centers

Cold Storage Facilities

Chicken Processing Plants

Beef Production Facilities

593

758

—

760

1,089

—

14
Capacity(1)
per week at
September 29, 2012

47 million head

174,000 head

Pork Production Facilities
Prepared Foods Processing Plants
(1) Capacity based on a five day week for Chicken and Prepared Foods, while Beef and Pork are based on a six day week.

46 million pounds

448,000 head

1,353

1,847

Fiscal 2012
Average Capacity
Utilization

88%

76%

90%

85%

Chicken: Chicken processing plants include various phases of slaughtering, dressing, cutting, packaging, deboning and further-
processing. We also have 16 pet food operations, which are part of the Chicken processing plants. The blending mills, feed mills and
broiler hatcheries have sufficient capacity to meet the needs of the chicken growout operations.

Beef: Beef plants include various phases of slaughtering live cattle and fabricating beef products. Some also treat and tan hides. The
Beef segment includes three case-ready operations that share facilities with the Pork segment. One of the beef facilities contains a
tallow refinery. Carcass facilities reduce live cattle to dressed carcass form. Processing facilities conduct fabricating operations to
produce boxed beef and allied products.

Pork: Pork plants include various phases of slaughtering live hogs and fabricating pork products and allied products. The Pork
segment includes three case-ready operations that share facilities with the Beef segment.

Prepared Foods: Prepared Foods plants process fresh and frozen chicken, beef, pork and other raw materials into pizza toppings,
branded and processed meats, appetizers, prepared meals, ethnic foods, soups, sauces, side dishes, pizza crusts, flour and corn tortilla
products and meat dishes.

Our Dynamic Fuels joint venture produces renewable synthetic fuels. Construction of production facilities was completed in late fiscal
2010, and initial production began in October 2010. Dynamic Fuels operates one plant with designed annual capacity of 75 million
gallons.

We believe our present facilities are generally adequate and suitable for our current purposes; however, seasonal fluctuations in
inventories and production may occur as a reaction to market demands for certain products. We regularly engage in construction and
other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities.
We also consider the efficiencies of our operations and may from time to time consider changing the number or type of plants we
operate to align with our capacity needs.

ITEM 3. LEGAL PROCEEDINGS
Refer to the description of certain legal proceedings pending against us under Part II, Item 8, Notes to Consolidated Financial
Statements, Note 19: Commitments and Contingencies, which discussion is incorporated herein by reference. Listed below are certain
additional legal proceedings involving the Company and/or its subsidiaries.

On October 23, 2001, a putative class action lawsuit styled R. Lynn Thompson, et al. vs. Tyson Foods, Inc. was filed in the District
Court for Mayes County, Oklahoma by three property owners on behalf of all owners of lakefront property on Grand Lake O’ the
Cherokees. Simmons Foods, Inc. and Peterson Farms, Inc. also are defendants. The plaintiffs allege the defendants’ operations
diminished the water quality in the lake thereby interfering with the plaintiffs’ use and enjoyment of their properties. The plaintiffs
sought injunctive relief and an unspecified amount of compensatory damages, punitive damages, attorneys’ fees and costs. While the
District Court certified a class, on October 4, 2005, the Court of Civil Appeals of the State of Oklahoma reversed, holding the
plaintiffs’ claims were not suitable for disposition as a class action. This decision was upheld by the Oklahoma Supreme Court and the
case was remanded to the District Court with instructions that the matter proceed only on behalf of the three named plaintiffs.
Plaintiffs seek injunctive relief, restitution and compensatory and punitive damages in an unspecified amount in excess of $10,000. We
and the other defendants have denied liability and asserted various defenses. The defendants have requested a trial date, but the court
has not yet scheduled the matter for trial.

Since 2003, nine lawsuits have been brought against us and several other poultry companies by approximately 150 plaintiffs in
Washington County, Arkansas Circuit Court (Green v. Tyson Foods, Inc., et al., Bible v. Tyson Foods, Inc., Beal v. Tyson Foods, Inc.,
et al., McWhorter v. Tyson Foods, Inc., et al., McConnell v. Tyson Foods, Inc., et al., Carroll v. Tyson Foods, Inc., et al., Belew v.
Tyson Foods, Inc., et al., Gonzalez v. Tyson Foods, Inc., et al., and Rasco v. Tyson Foods, Inc., et al.) alleging that the land application
of poultry litter caused arsenic and pathogenic mold and fungi contamination of the air, soil and water in and around Prairie Grove,
Arkansas and seeking recovery for several types of personal injuries, including several forms of cancer. On August 2, 2006, the Court
granted summary judgment in favor of Tyson and the other poultry company defendants in the first case to go to trial, which the
plaintiffs appealed, and the trial court stayed the remaining eight lawsuits pending the appeal. On May 8, 2008, the Arkansas Supreme
Court reversed the summary judgment and remanded for a new trial. The remanded trial was held and the jury returned a verdict in our
favor. The plaintiffs appealed this verdict to the Arkansas Supreme Court, which affirmed the verdict and denied the plaintiffs’ petition
for rehearing. The second trial, originally scheduled for October 22, 2012, was canceled and no new trial date has been set.

Other Matters: We currently have approximately 115,000 employees and, at any time, have various employment practices matters
outstanding. In the aggregate, these matters are significant to the Company, and we devote significant resources to managing
employment issues. Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial
amounts) arising out of the conduct of our business. While the ultimate results of these matters cannot be determined, they are not
expected to have a material adverse effect on our consolidated results of operations or financial position.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

EXECUTIVE OFFICERS OF THE COMPANY
Our officers serve one year terms from the date of their election, or until their successors are appointed and qualified. No family
relationships exist among these officers. The name, title, age and year of initial election to executive office of our executive officers
are listed below:

Name
Curt T. Calaway

Title

Senior Vice President, Controller and Chief Accounting Officer

Kenneth J. Kimbro

Senior Vice President, Chief Human Resources Officer

Donnie King

Dennis Leatherby

James V. Lochner

Donnie Smith

John Tyson

Senior Group Vice President, Poultry and Prepared Foods

Executive Vice President and Chief Financial Officer

Chief Operating Officer

President and Chief Executive Officer

Chairman of the Board of Directors

David L. Van Bebber

Executive Vice President and General Counsel

Noel White

Senior Group Vice President, Fresh Meats

Age

Year Elected
Executive Officer

2012

2009

1994

2005

2008

2011

2008

2009

Curt T. Calaway was appointed Senior Vice President, Controller and Chief Accounting Officer in 2012, after serving as Vice
President, Audit and Compliance since 2008, prior to which he served as the Company's Senior Director of Financial Reporting.
Mr. Calaway was initially employed by the Company in 2006.

Kenneth J. Kimbro was appointed Senior Vice President, Chief Human Resources Officer in 2007, after serving as Senior Vice
President, Human Resources since 2001. Mr. Kimbro was initially employed by IBP, inc. in 1995.

Donnie King was appointed Senior Group Vice President, Poultry and Prepared Foods in December 2009, after serving as Group Vice
President, Refrigerated and Deli since 2008, Group Vice President, Operations since 2007, Senior Vice President, Consumer Products
Operations since 2006 and Senior Vice President, Poultry Operations since 2003. Mr. King was initially employed by Valmac
Industries, Inc. in 1982. Valmac Industries, Inc. was acquired by the Company in 1984.

Dennis Leatherby was appointed Executive Vice President and Chief Financial Officer in 2008 after serving as Senior Vice President,
Finance and Treasurer since 1998. He also served as Interim Chief Financial Officer from 2004 to 2006. Mr. Leatherby was initially
employed by the Company in 1990.

James V. Lochner was appointed Chief Operating Officer in November 2009, after serving as Senior Group Vice President, Fresh
Meats since 2007, Senior Group Vice President, Fresh Meats and Margin Optimization since 2006 and Senior Group Vice President,
Margin Optimization, Purchasing and Logistics since 2005. Mr. Lochner was initially employed by IBP, inc. in 1983.

Donnie Smith was appointed President and Chief Executive Officer in November 2009, after serving as Senior Group Vice President,
Poultry and Prepared Foods since January 2009, Group Vice President of Consumer Products since 2008, Group Vice President of
Logistics and Operations Services since 2007, Group Vice President Information Systems, Purchasing and Distribution since 2006 and
Senior Vice President and Chief Information Officer since 2005. Mr. Smith was initially employed by the Company in 1980.

John Tyson has served as Chairman of the Board of Directors since 1998 and was previously Chief Executive Officer of the Company
from 2001 until 2006.

David L. Van Bebber was appointed Executive Vice President and General Counsel in 2008, after serving as Senior Vice President and
Deputy General Counsel since 2004. Mr. Van Bebber was initially employed by Lane Processing in 1982. Lane Processing was
acquired by the Company in 1986.

Noel White was appointed Senior Group Vice President, Fresh Meats in December 2009, after serving as Senior Vice President, Pork
Margin Management since 2007 and Group Vice President, Fresh Meats Operations/Commodity Sales since 2005. Mr. White was
initially employed by IBP, inc. in 1983.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
We have issued and outstanding two classes of capital stock, Class A stock and Class B stock. Holders of Class B stock may convert
such stock into Class A stock on a share-for-share basis. Holders of Class B stock are entitled to 10 votes per share while holders of
Class A stock are entitled to one vote per share on matters submitted to shareholders for approval. As of October 27, 2012, there were
approximately 27,000 holders of record of our Class A stock and 9 holders of record of our Class B stock, excluding holders in the
security position listings held by nominees.

DIVIDENDS
Cash dividends cannot be paid to holders of Class B stock unless they are simultaneously paid to holders of Class A stock. The per
share amount of the cash dividend paid to holders of Class B stock cannot exceed 90% of the cash dividend simultaneously paid to
holders of Class A stock. We have paid uninterrupted quarterly dividends on common stock each year since 1977. In both fiscal 2012
and 2011, the annual dividend rate for Class A stock was $0.16 per share and the annual dividend rate for Class B stock was $0.144
per share. On November 15, 2012, the Board of Directors declared a special dividend of $0.10 per share for Class A stock and $0.09
per share for Class B stock, payable December 14, 2012, to shareholders of record on November 30, 2012. Additionally, the Board of
Directors declared a 25% increase in the quarterly dividend rate for both classes of our stock.

MARKET INFORMATION
Our Class A stock is traded on the New York Stock Exchange under the symbol “TSN.” No public trading market currently exists for
our Class B stock. The high and low closing sales prices of our Class A stock for each quarter of fiscal 2012 and 2011 are represented
in the table below.

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Fiscal 2012
High
20.91
20.37
19.58
18.56

Low
16.68
18.52
17.66
14.17

Fiscal 2011
High
17.74
19.82
19.92
19.24

Low
14.84
16.25
17.12
15.68

ISSUER PURCHASES OF EQUITY SECURITIES
The table below provides information regarding our purchases of Class A stock during the periods indicated.

Period
July 1 to July 28, 2012

July 29 to Sept. 1, 2012

Sept. 2 to Sept. 29, 2012

Total

Total
Number of
Shares
Purchased

77,966

780,249

2,595,492
3,453,707 (2)

Average
Price Paid
per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs

17.38

15.39

15.79

15.73

—

654,000

2,531,038
3,185,038 (3)

Maximum Number of
Shares that May Yet Be
Purchased Under the Plans
or Programs (1)
38,432,722

37,778,722

35,247,684

(1) 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. The program has no fixed or scheduled
termination date. On May 3, 2012, our Board of Directors approved an increase of 35 million shares authorized for repurchase
under this program.

(2) We purchased 268,669 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 191,975 shares purchased in open market transactions and 76,694 shares withheld to cover required tax withholdings on
the vesting of restricted stock.

(3) These shares were purchased during the period pursuant to our previously announced stock repurchase program.

PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total returns for our Class A stock, the Standard & Poor’s (S&P) 500
Index and a group of peer companies described below.

Tyson Foods, Inc.
S&P 500 Index
Peer Group

Years Ending

Base Period
9/29/07
100
100
100

9/27/08
71.82
78.02
101.03

10/3/09
70.93
72.63
91.86

10/2/10
94.58
80.01
108.93

10/1/11
101.90
80.93
120.44

9/29/12
94.86
105.37
135.37

The total cumulative return on investment (change in the year-end stock price plus reinvested dividends), which is based on the stock
price or composite index at the end of fiscal 2007, is presented for each of the periods for the Company, the S&P 500 Index and a peer
group. The peer group includes: Campbell Soup Company, ConAgra Foods, Inc., General Mills, Inc., H.J. Heinz Co., Hershey Foods
Corp., Hormel Foods Corp., Kellogg Co., McCormick & Co., Pilgrim’s Pride Corporation, Sara Lee Corp. (up to June 28, 2012),
Hillshire Brands Co. (beginning on June 28, 2012) and Smithfield Foods, Inc. The graph compares the performance of the Company
with that of the S&P 500 Index and peer group, with the investment weighted on market capitalization.

ITEM 6. SELECTED FINANCIAL DATA

FIVE-YEAR FINANCIAL SUMMARY

Summary of Operations
Sales

Goodwill impairment

Operating income (loss)

Net interest expense

Income (loss) from continuing operations

Loss from discontinued operation

Net income (loss)

Net income (loss) attributable to Tyson

Diluted net income (loss) per share attributable to Tyson:

Income (loss) from continuing operations

Loss from discontinued operation

Net income (loss)

Dividends per share:

Class A

Class B

Balance Sheet Data
Cash and cash equivalents

Total assets

Total debt

Shareholders’ equity
Other Key Financial Measures
Depreciation and amortization

Capital expenditures

Return on invested capital

Effective tax rate

Total debt to capitalization

Book value per share

Closing stock price high

Closing stock price low

in millions, except per share and ratio data

2012

2011

2010

2009

2008

33,278

32,266

28,430

$ 26,704

26,862

—

1,248

344

576

—

576

583

1.58

—

1.58

0.160

0.144

—

1,285

231

733

—

733

750

1.97

—

1.97

0.160

0.144

1,556

333

765

—

765

780

2.06

—

2.06

0.160

0.144

560

(215)

310

(550)

(1)

(551)

(547)

(1.47)

—

(1.47)

0.160

0.144

—

331

206

—

0.24

—

0.24

0.160

0.144

1,071

716

978

1,004

250

11,896

2,432

6,042

11,071

2,182

5,685

10,752

2,536

5,201

10,595

3,477

4,431

10,850

2,804

5,099

499

690

17.1%

37.9%

28.7%

16.84

20.91

14.17

506

643

18.5%

31.8%

27.7%

15.38

19.92

14.84

497

550

22.8%

36.4%

32.8%

13.78

20.40

12.02

513

368

(3.0)%

(1.5)%

44.0 %

11.77

13.88

4.40

493

425

4.4%

44.6%

35.5%

13.51

19.44

12.14

Notes to Five-Year Financial Summary
a. Fiscal 2012 included a $15 million non-cash charge related to the impairment of non-core assets in China and a pretax charge of $167 million related to the early

extinguishment of debt.

b. Fiscal 2011 included an $11 million non-operating gain related to the sale of interest in an equity method investment and a $21 million reduction to income tax

expense related to a reversal of reserves for foreign uncertain tax positions.

c. Fiscal 2010 included $61 million of interest expense related to losses on notes repurchased/redeemed during fiscal 2010, a $29 million non-tax deductible charge

related to a full goodwill impairment related to an immaterial Chicken segment reporting unit and a $12 million non-operating charge related to the partial
impairment of an equity method investment. Additionally, fiscal 2010 included insurance proceeds received of $38 million related to Hurricane Katrina.

d. Fiscal 2009 was a 53-week year, while the other years presented were 52-week years.
e. Fiscal 2009 included a $560 million non-tax deductible charge related to Beef segment goodwill impairment and a $15 million pretax charge related to closing a

prepared foods plant.

f. Fiscal 2008 included $76 million of pretax charges related to: restructuring a beef operation; closing a poultry plant; asset impairments for packaging equipment,
intangible assets, unimproved real property and software; flood damage; and severance charges. Additionally, fiscal 2008 included an $18 million non-operating
gain related to the sale of an investment.

g. Return on invested capital is calculated by dividing operating income (loss) by the sum of the average of beginning and ending total debt and shareholders’ equity

less cash and cash equivalents.

h. For the total debt to capitalization calculation, capitalization is defined as total debt plus total shareholders’ equity.
i.

In March 2009, we completed the sale of the beef processing, cattle feed yard and fertilizer assets of three of our Alberta, Canada subsidiaries (collectively,
Lakeside). Lakeside was reported as a discontinued operation for all periods presented.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

DESCRIPTION OF THE COMPANY
We are one of the world’s largest meat protein companies and the second-largest food production company in the Fortune 500 with
one of the most recognized brand names in the food industry. We produce, distribute and market chicken, beef, pork, prepared foods
and related allied products. 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
and introduce 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 operating efficiencies of our facilities.

OVERVIEW

• General – As a result of improved internal performance, strong exports and favorable domestic chicken market conditions, our
operating results remained strong in fiscal 2012 despite a $2.2 billion increase in input costs. The following are a few of the
key drivers:
• We continued to focus on maximizing our margins through margin management and operational efficiency improvements.

Margin management improvements occurred in the areas of mix, export sales, price optimization and value-added
products initiatives. The operational efficiencies occurred in the areas of yields, cost reduction and labor management.
• Domestic chicken market conditions improved in fiscal 2012 driven by reduced industry supplies. The improved domestic
chicken market conditions were partially offset by operating losses in our foreign start-up businesses. Our Beef segment
experienced periods of reduced demand for beef products, particularly in the first half of fiscal 2012, but was able to
remain profitable as a result of improved balance between beef demand and cattle supply. Our Pork segment remained
within its normalized operating margin range despite periods of unfavorable pricing environments due to periods of
increased domestic availability of pork products. Our Prepared Foods segment experienced favorable mix changes and
lower raw material costs resulting in earnings within its operating margin range.

• Margins – With an operating margin of 3.8% in fiscal 2012, we have achieved operating income exceeding $1.2 billion for

three consecutive years. The following is a summary of operating margins by segment:
• Chicken – 3.8% (or 4.0% excluding $15 million related to the impairment of non-core assets)
• Beef – 1.6%
• Pork – 7.6%
• Prepared Foods – 5.6%

• Debt and Liquidity – During fiscal 2012, we generated $1.2 billion of operating cash flows. Additionally, we issued $1.0
billion of 4.50% senior notes due in 2022 and used the proceeds to retire all of our 10.50% senior notes due in 2014. As a
result of this transaction, we will realize approximately $55 million in annualized interest savings. We also repurchased 12.5
million shares of our stock for $230 million under our share repurchase program in fiscal 2012. At September 29, 2012, we
had $2.0 billion of liquidity, which includes the availability under our credit facility and $1.1 billion of cash and cash
equivalents.

• Our accounting cycle resulted in a 52-week year for fiscal 2012, 2011 and 2010.

Net income attributable to Tyson

Net income attributable to Tyson – per diluted share

in millions, except per share data

2012

583

1.58

2011

750

1.97

2010

780

2.06

2012 – Net income included the following items:
• $15 million non-cash charge, or $0.04 per diluted share, related to the impairment of non-core assets in China; and
• $167 million pretax charge, or $0.29 per diluted share, related to the early extinguishment of debt.
2011 – Net income included the following items:
• $11 million gain, or $0.03 per diluted share, related to a sale of interests in an equity method investment; and
• $21 million reduction to income tax expense, or $0.05 per diluted share, related to a reversal of reserves for foreign uncertain

tax positions.

2010 – Net income included the following items:
• $61 million in pretax charges, or $0.09 per diluted share, related to losses on notes repurchased during fiscal 2010;
• $29 million non-cash, non-tax deductible charge, or $0.07 per diluted share, related to a full goodwill impairment in an

immaterial Chicken segment reporting unit;

• $12 million non-cash, non-tax deductible charge, or $0.03 per diluted share, related to the impairment of an equity method

investment; and

• $38 million pretax gain, or $0.06 per diluted share, from insurance proceeds.

FISCAL 2013 OUTLOOK
Our continued capital investment in our businesses, strong liquidity and reduced interest expense has put us in a strong position as we
begin a challenging fiscal 2013. The drought conditions in the summer of 2012 reduced grain supplies, which will result in higher
input costs as well as increased costs for cattle and hog producers. USDA data indicates in fiscal 2013 overall domestic protein
production (chicken, beef, pork and turkey) is expected to decrease 2% compared to fiscal 2012, which should continue to support
improved pricing. The following is a summary of the fiscal 2013 outlook for each of our segments, as well as an outlook on sales,
capital expenditures, net interest expense, debt and liquidity, share repurchases and dividends:

• Chicken – Current USDA data shows U.S. chicken production will be down slightly in fiscal 2013. Due to the reduced crop
supply, we expect higher grain costs in fiscal 2013 compared to fiscal 2012 of approximately $600 million. However, the
capital investment and significant operational, mix and pricing improvements we have made in our Chicken segment have
better positioned us to adapt to rising grain prices. For fiscal 2013, we anticipate our Chicken segment will remain profitable,
but could be below our normalized range of 5.0%-7.0%.

• Beef – We expect to see a reduction of industry fed cattle supplies of 2-3% in fiscal 2013 as compared to fiscal 2012. Although
we generally expect adequate supplies in regions we operate our plants, there may be periods of imbalance of fed cattle supply
and demand. We anticipate beef exports will remain strong. For fiscal 2013, we believe our Beef segment will remain
profitable, but could be below our normalized range of 2.5%-4.5%.

• Pork – We expect industry hog supplies in fiscal 2013 to be flat compared to fiscal 2012 and pork exports to remain strong.

For fiscal 2013, we believe our Pork segment will be in or above our normalized range of 6.0%-8.0%.

• Prepared Foods – We expect operational improvements and increased pricing to offset increased raw material costs. Because
many of our sales contracts are formula based or shorter-term in nature, we are typically able to offset rising input costs
through increased pricing. For fiscal 2013, we believe our Prepared Foods segment will remain in its normalized range of
4.0%-6.0%.

• Sales – We expect fiscal 2013 sales to increase to approximately $35 billion mostly resulting from price increases related to

decreases in domestic availability of protein and rising raw material costs.

• Capital Expenditures – Our preliminary capital expenditures plan for fiscal 2013 is approximately $550 million. The reduction
in planned capital expenditures from fiscal 2012 is primarily a result of an anticipated rise in working capital needs in fiscal
2013. Once we gain more visibility into our working capital needs, or should forecasted conditions change, we may raise our
capital expenditures target. We will continue to make significant investments in our production facilities for high return
operational efficiencies, other profit improvement projects and development of our foreign operations.

• Net Interest Expense – We expect fiscal 2013 net interest expense will approximate $140 million.
• Debt and Liquidity – We do not have any significant maturities of debt due until October 2013. We may use our available cash
to repurchase notes when available at attractive rates. Total liquidity at September 29, 2012, was $2.0 billion, well above our
goal to maintain liquidity in excess of $1.2 billion.

• Share Repurchases – We expect to continue repurchasing shares under our share repurchase plan. In fiscal 2012, we

repurchased 12.5 million shares for approximately $230 million. As of September 29, 2012, 35.2 million shares remain
authorized for repurchases. The timing and extent to which we repurchase shares will depend upon, among other things, our
working capital needs, market conditions, liquidity targets, our debt obligations and regulatory requirements.

• Dividends – On November 15, 2012, the Board of Directors declared a special dividend of $0.10 per share on our Class A
common stock and $0.09 per share on our Class B common stock. Additionally, the Board increased the quarterly dividend
previously declared on August 3, 2012, to $0.05 per share on our Class A common stock and $0.045 per share on our Class B
common stock. Both the special dividend and the increased quarterly dividend are payable on December 14, 2012, to
shareholders of record at the close of business on November 30, 2012. The Board also declared a quarterly dividend of $0.05
per share on our Class A common stock and $0.045 per share on our Class B common stock, payable on March 31, 2013, to
shareholders of record at the close of business on March 1, 2013.

SUMMARY OF RESULTS

Sales

Sales
Change in sales volume
Change in average sales price
Sales growth

2012

2011

33,278

32,266

(4.3)%
7.7 %
3.1 %

1.7%
11.8%
13.5%

in millions
2010
28,430

2012 vs. 2011 –
• Average Sales Price – The increase in sales was largely due to an increase in average sales prices, which accounted for an

increase of approximately $2.7 billion. All segments, with the exception of the Pork segment, had an increase in average sales
prices largely due to continued tight domestic availability of protein and increased live and raw material costs. These increases
were partially offset by a decrease in average sales price in the Pork segment which was driven down by lower live hog costs.
• Sales Volume – Sales were negatively impacted by a decrease in sales volume, which accounted for a decrease of $1.7 billion.
All segments, with the exception of the Pork segment, had a decrease in sales volume, with the majority of the decrease in the
Beef segment.

2011 vs. 2010 –
• Average Sales Price – The increase in sales was largely due to an increase in average sales prices, which accounted for an
increase of approximately $3.4 billion. While all segments had an increase in average sales prices mostly due to price
increases associated with rising raw material costs, the majority of the increase was driven by the Beef and Pork segments.

• Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for an increase of $484

million. This was primarily due to increases in the Chicken and Pork segments, partially offset by decreases in the Beef and
Prepared Foods segments.

Cost of Sales

Cost of sales
Gross profit
Cost of sales as a percentage of sales

$
$

2012

31,118
2,160
93.5%

$
$

2011

30,067
2,199
93.2%

$
$

in millions
2010

25,916
2,514
91.2%

2012 vs. 2011 –
• Cost of sales increased by approximately $1.0 billion. Higher input cost per pound increased cost of sales by approximately

$2.2 billion, while lower sales volume decreased cost of sales $1.2 billion.
• The $2.2 billion impact of higher input costs per pound was primarily driven by:
Increase in live cattle and hog costs of approximately $1.5 billion.
Increase in grain and feed ingredients of $320 million and increase in other growout operating costs of $50 million in
our Chicken segment.

•
•

• The $1.2 billion impact of lower sales volumes was driven by decreases in our Chicken, Beef and Prepared Foods

segments, partially offset by an increase in sales volume in our Pork segment.

2011 vs. 2010 –
• Cost of sales increased by approximately $4.1 billion. Higher input cost per pound increased cost of sales by approximately

$3.7 billion, while higher sales volume increased cost of sales $445 million.
• The $3.7 billion impact of higher input costs per pound was primarily driven by:
Increase in live cattle and hog costs of approximately $2.4 billion.
Increase in grain and feed ingredients of $675 million and increase in other growout operating costs of $74 million in
our Chicken segment, which were partially offset by approximately $200 million of operational improvements.
Increase in raw material costs of $273 million in our Prepared Foods segment.

•
•

•

• The $0.4 billion impact of higher sales volumes was primarily driven by:

•

Increases in sales volume in our Chicken and Pork segments partially offset by decreases in our Beef and Prepared
Foods segments.
Increase of $145 million of costs of sales associated with Dynamic Fuels, which commenced production activities in
fiscal 2011.

Selling, General and Administrative

Selling, general and administrative
As a percentage of sales

2012
912
2.7%

2011
914
2.8%

in millions
2010
929
3.3%

2011 vs. 2010 –
• Decrease of $13 million related to reduced incentive-based compensation awarded during fiscal 2011.

Goodwill Impairment

2012

— $

2011

— $

2010 – Included the full impairment of an immaterial Chicken segment reporting unit.

Interest Income

2012
12

2011
11

2012/2011/2010 – Interest income remained at the current level primarily due to continued low interest rates.

in millions
2010
29

in millions
2010
14

Interest Expense

Cash interest expense
Loss on early extinguishment of debt
Losses on notes repurchased
Non-cash interest expense
Total Interest Expense

2012
151
167
—
38
356

2011
195
—
7
40
242

in millions
2010
245
—
61
41
347

2012/2011/2010 –
• Cash interest expense included interest expense related to the coupon rates for senior notes and commitment/letter of credit
fees incurred on our revolving credit facilities. The decrease is due primarily to lower average weekly indebtedness of
approximately 9% and 15% in fiscal 2012 and 2011, respectively. Additionally, the decrease in cash interest expense is due to
lower average coupon rates compared to fiscal 2011 and 2010.

• Loss on early extinguishment of debt included the amount paid exceeding the par value of debt, unamortized discount and
unamortized debt issuance costs related to the full extinguishment of the 10.50% Senior Notes due 2014 (2014 Notes).

• Losses on notes repurchased during fiscal 2011 and 2010 included the amount paid exceeding the carrying value of the notes
repurchased, which primarily included the repurchases of the 8.25% Notes due October 2011 (2011 Notes) and the 6.60%
Senior Notes due April 2016 (2016 Notes).

• Non-cash interest expense primarily included interest related to the amortization of debt issuance costs and discounts/

premiums on note issuances. This included debt issuance costs incurred on our revolving credit facility, the 2014 Notes, the
4.50% Senior Notes due 2022 (2022 Notes) issued in June 2012, as well as the accretion of the debt discount on the 3.25%
Convertible Senior Notes due 2013 (2013 Notes), 2014 Notes and 2022 Notes.

Other (Income) Expense, net

2012

(23) $

2011

(20) $

in millions
2010
20

2012 – Included $16 million of equity earnings in joint ventures and $4 million in net foreign currency exchange gains.
2011 – Included $11 million gain related to a sale of interests in an equity method investment.
2010 – Included $12 million charge related to the impairment of an equity method investment.

Effective Tax Rate

2012
37.9%

2011
31.8%

2010
36.4%

The effective tax rate on continuing operations was impacted by a number of items which result in a difference between our effective
tax rate and the U.S. statutory rate of 35%. The table below reflects significant items impacting the rate as indicated.

2012 –
• Domestic production activity deduction reduced the rate 1.9%.
• General business credits reduced the rate 0.8%.
• State income taxes increased the rate 1.6%.
• Foreign rate differences and valuation allowances increased the rate 3.3%.
2011 –
• Domestic production activity deduction reduced the rate 2.3%.
• Net decrease in unrecognized tax benefits reduced the rate 1.7%.
• General business credits reduced the rate 0.9%.
• State income taxes increased the rate 1.6%.
2010 –
• Domestic production activity deduction reduced the rate 2.0%.
• Decrease in unrecognized tax benefits reduced the rate 1.4%.
• Decrease in state valuation allowances reduced the rate 1.0%.
• State income taxes increased the rate 3.4%.

SEGMENT RESULTS
We operate in four segments: Chicken, Beef, Pork and Prepared Foods. The following table is a summary of sales and operating
income (loss), which is how we measure segment income (loss).

Sales

Operating Income (Loss)

2012

2011

2010

2012

2011

2010

in millions

Chicken

Beef

Pork

Prepared Foods

Other

Intersegment Sales

Total

446

218

417

181
(14)
—

164

468

560

117
(24)
—

519

542

381

124
(10)
—

1,248

1,285

1,556

11,591

11,017

10,062

13,755

5,510

3,237

167

(982)

13,549

5,460

3,215

127

(1,102)

33,278

32,266

11,707

4,552

2,999

—
(890)
28,430

Chicken Segment Results

Sales
Sales Volume Change
Average Sales Price Change
Operating Income
Operating Margin

2012

2011

11,591

11,017

446
3.8%

164
1.5%

Change 2012
vs. 2011
574
(3.6)%
9.2 %
282

2010

10,062

519
5.2%

in millions
Change 2011
vs. 2010
955
4.6%
4.7%
(355)

2012 – Operating income included a $15 million non-cash charge related to the impairment of non-core assets in China.
2010 – Operating income included a $38 million gain from insurance proceeds and a $29 million non-cash, non-tax deductible
charge related to a full goodwill impairment of an immaterial Chicken segment reporting unit.

2012 vs. 2011 –
• Sales Volume – The decrease in sales volumes in fiscal 2012 was primarily attributable to the impact of domestic production

cuts we made in late fiscal 2011 and maintained throughout fiscal 2012, in order to balance our supply with forecasted
customer demand. These production cuts reduced our total domestic slaughter pounds by approximately 4% in fiscal 2012, but
were partially offset by increases in international sales volumes and open-market meat purchases.

• Average Sales Price – The increase in average sales prices is primarily due to mix changes and price increases associated with

reduced industry supply and increased input costs.

• Operating Income – The increase in operating income was largely due to the increase in average sales price and operational
improvements, partially offset by reduced sales volumes, increased grain, feed ingredients and other growout costs and losses
incurred in our foreign start-up businesses.
• Grain, Feed Ingredients and Growout Costs – Operating results were negatively impacted in fiscal 2012 by an increase in

grain and feed ingredients costs of $320 million and an increase in other growout operating costs of $50 million.

• Operational Improvements – Operating results were positively impacted by approximately $115 million of operational

improvements, primarily attributed to improvements in yield, mix and processing optimization.

• Start-up Businesses – Our foreign start-up businesses in Brazil and China incurred operating losses of approximately $105

million in fiscal 2012, which included $15 million for the impairment of non-core assets.

• Derivative Activities – Operating results included the following amounts for commodity risk management activities

related to grain and energy purchases. These amounts exclude the impact from related physical purchase transactions,
which impact current and future period operating results.

Income/(Loss) – in millions

2012 $
2011

Decline in operating results $

(25)
41
(66)

2011 vs. 2010 –
• Sales Volume – A 2.1% increase in slaughter pounds that mostly occurred in the first three quarters of fiscal 2011 and a

reduction of volumes in ending inventory in fiscal 2011 as compared to fiscal 2010, primarily drove the 4.6% increase in sales
volume for fiscal 2011.

• Average Sales Price – The increase in average sales prices is primarily due to mix changes and price increases associated with

increased input costs.
• Operating Income –

• Grain, Feed Ingredients and Growout Costs – Operating results were negatively impacted in fiscal 2011 by an increase in

grain and feed ingredients costs of $675 million and an increase in other growout operating costs of $74 million.

• Operational Improvements – Operating results were positively impacted by approximately $200 million of operational
improvements, primarily attributed to improvements in yield, mix and processing optimization. These operational
improvements were partially offset by an increase in operating costs, mostly from cooking ingredients and employee
related costs.

• Derivative Activities – Operating results included the following amounts for commodity risk management activities

related to grain and energy purchases. These amounts exclude the impact from related physical purchase transactions,
which impact current and future period operating results.

Income/(Loss) – in millions

2011 $
2010

Improvement in operating results $

41
(6)
47

Beef Segment Results

Sales

Sales Volume Change

Average Sales Price Change

Operating Income

Operating Margin

2012 vs. 2011 –
• Sales and Operating Income –

2012

2011

Change 2012
vs. 2011

in millions

Change 2011
vs. 2010

2010

13,755

13,549

206

11,707

1,842

(11.3)%

14.4 %

(1.0)%

16.9 %

218

468

(250)

542

(74)

1.6%

3.5%

4.6%

• Average sales price increased due to price increases associated with increased livestock costs. Sales volume decreased due
to a reduction in live cattle processed and outside tallow purchases. Operating income decreased due to higher fed cattle
costs and periods of reduced demand for beef products, which made it difficult to pass along increased input costs, as well
as lower sales volumes and increased employee related operating costs.

• Derivative Activities – Operating results included the following amounts for commodity risk management activities
related to forward futures contracts for live cattle. These amounts exclude the impact from related physical sale and
purchase transactions, which impact current and future period operating results.

Income/(Loss) – in millions

2012 $
2011

Improvement in operating results $

(41)

2011 vs. 2010 –
• Sales and Operating Income –

• Average sales price increased due to price increases associated with increased livestock costs. We have maintained strong
operating income by maximizing our revenues relative to the rising live cattle markets, partially attributable to strong
export sales. This was offset by an increase in operating costs, primarily attributable to employee related costs.
• Derivative Activities – Operating results included the following amounts for commodity risk management activities
related to forward futures contracts for live cattle. These amounts exclude the impact from related physical sale and
purchase transactions, which impact current and future period operating results.

Income/(Loss) – in millions

2011 $
2010

Decline in operating results $

(41)

(15)

(26)

Pork Segment Results

Sales

Sales Volume Change

Average Sales Price Change

Operating Income

Operating Margin

2012 vs. 2011 –
• Sales and Operating Income –

2012

2011

Change 2012
vs. 2011

in millions

Change 2011
vs. 2010

2010

5,510

5,460

4,552

2.4 %

(1.5)%

417

560

(143)

381

7.6%

10.3%

8.4%

908

4.1%

15.2%

179

• Average sales price decreased due to increased domestic availability of pork products, which drove lower live hog costs.

Operating income decreased due to compressed pork margins caused by the excess domestic availability of pork products.
We were able to maintain strong operating margins by maximizing our revenues relative to the live hog markets, partially
due to strong export sales and operational and mix performance.

• Derivative Activities – Operating results included the following amounts for commodity risk management activities
related to forward futures contracts for live hogs. These amounts exclude the impact from related physical sale and
purchase transactions, which impact current and future period operating results.

Income/(Loss) – in millions

2012 $
2011

Improvement in operating results $

(32)

2011 vs. 2010 –
• Sales and Operating Income –

Income/(Loss) – in millions

2011 $
2010

Improvement in operating results $

(32)

(36)

Prepared Foods Segment Results

Sales

Sales Volume Change

Average Sales Price Change

Operating Income

Operating Margin

2012

2011

Change 2012
vs. 2011

3,237

3,215

(0.9)%

1.6 %

181

117

5.6%

3.6%

in millions

Change 2011
vs. 2010

2010

2,999

216

(2.2)%

9.6 %

(7)

124

4.1%

2012 vs. 2011 –
• Sales and Operating Income – Operating margins were positively impacted by lower raw material costs of $75 million and

increased average sales prices, which were partially offset by lower volumes and increased operational costs of approximately
$30 million, largely due to costs related to revamping our lunchmeat business and the start-up of a new pepperoni plant.
Because many of our sales contracts are formula based or shorter-term in nature, we typically offset changing input costs
through pricing. However, there is a lag time for price changes to take effect, which is what we experienced during fiscal 2011.

2011 vs. 2010 –
• Sales and Operating Income – Despite the increase in average sales prices, operating income remained flat, excluding $8

million in insurance proceeds in fiscal 2010 related to flood damage at our Jefferson, Wisconsin plant. The increase in average
sales prices were offset by lower volumes, increased raw material costs of $273 million and increased operational costs of $50
million, primarily attributable to employee related costs and plant variances mostly due to lower volumes.

LIQUIDITY AND CAPITAL RESOURCES
Our cash needs for working capital, capital expenditures, growth opportunities, the repurchases of senior notes and share repurchases
are expected to be met with current cash on hand, cash flows provided by operating activities, or short-term borrowings. Based on our
current expectations, we believe our liquidity and capital resources will be sufficient to operate our business. However, we may take
advantage of opportunities to generate additional liquidity or refinance existing debt through capital market transactions. The amount,
nature and timing of any capital market transactions will depend on: our operating performance and other circumstances; our then-
current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our
current credit arrangements; and overall market conditions.

Cash Flows from Operating Activities

in millions

Net income

Non-cash items in net income:

Depreciation and amortization

Deferred income taxes

Loss on early extinguishment of debt

Impairment of goodwill
Impairment of assets

Other, net

Net changes in working capital

Net cash provided by operating activities

2012

576

2011

733

499

140

167

—

18
(247)
1,187

506

—

49
(346)
1,046

2010

765

497

—

1,432

• Cash flows associated with Loss on early extinguishment of debt included the amount paid exceeding the par value of debt,

unamortized discount and unamortized debt issuance costs related to the full extinguishment of the 2014 Notes.

• Cash flows associated with changes in working capital:

• 2012 – Decreased due to the increase in inventory and accounts receivable balances, partially offset by the increase in

accounts payable. The higher inventory and accounts receivable balances were driven by significant increases in input costs
and price increases associated with the increased input costs.

• 2011 – Decreased due to the increase in inventory and accounts receivable balances, partially offset by the increase in

accounts payable. The higher inventory and accounts receivable balances were driven by significant increases in input costs
and price increases associated with the increased input costs.

• 2010 – Increased due to the increase in accrued salaries, wages and benefits and accounts payable balances, almost entirely
offset by the increase in inventory and accounts receivable balances. The increase in accrued salaries, wages and benefits is
primarily due to the accruals for incentive-based compensation.

Cash Flows from Investing Activities

Additions to property, plant and equipment

Proceeds from sale (purchases) of marketable securities, net

Proceeds from notes receivable

Change in restricted cash to be used for investing activities

Other, net

Net cash used for investing activities

2012
(690) $
(11)
—

—

41
(660) $

2011
(643) $
(80)
51

—

28
(644) $

in millions

2010
(550)
(4)
—

11
(500)

• Additions to property, plant and equipment include acquiring new equipment and upgrading our facilities to maintain

competitive standing and position us for future opportunities. In fiscal 2012 and 2011, our capital spending was primarily for
production efficiencies in our operations and for ongoing development of foreign operations. In fiscal 2010, our capital
spending was primarily related to production efficiencies in our operations, construction of Dynamic Fuels’ facility and
development of our foreign operations.
• Capital spending for fiscal 2013 is expected to approximate $550 million, and includes spending on our operations for
production and labor efficiencies, yield improvements and sales channel flexibility, as well as expansion of our foreign
operations. The reduction in planned capital expenditures from fiscal 2012 is primarily a result of an anticipated rise in
working capital needs in fiscal 2013. Once we gain more visibility into our working capital needs, or should forecasted
conditions change, we may raise our capital expenditures target.

• Purchases of marketable securities included funding for our deferred compensation plans.
• Proceeds from notes receivable totaling $51 million in fiscal 2011 related to the collection of notes receivable received in

conjunction with the sale of a business operation in fiscal 2009.

• Change in restricted cash – In fiscal 2009, Dynamic Fuels received $100 million in proceeds from the sale of Gulf Opportunity
Zone tax-exempt bonds made available by the federal government to the regions affected by Hurricanes Katrina and Rita in
2005. The cash received from these bonds was restricted and could only be used towards the construction of the Dynamic
Fuels’ facility. The Dynamic Fuels' facility was complete in October 2010.

Cash Flows from Financing Activities

Payments on debt

Net proceeds from borrowings

Purchase of redeemable noncontrolling interest

Change in restricted cash to be used for financing activities

Purchases of Tyson Class A common stock

Dividends

Other, net

Net cash used for financing activities

• Payments on debt included –

2012
(993) $
1,116

—

—
(264)
(57)
27
(171) $

2011
(500) $
115
(66)
—
(207)
(59)
59
(658) $

in millions

2010
(1,034)
—

—

140
(48)
(59)
42
(959)

• 2012 – $885 million for the extinguishment of the 2014 Notes and $103 million related to borrowings at our foreign

operations.

• 2011 – $315 million of 2011 Notes; $63 million of 2016 Notes; $2 million of 7.0% Notes due May 2018 (2018 Notes);

and $103 million related to borrowings at our foreign operations.

• 2010 – $524 million of 2011 Notes; $222 million of 2016 Notes; $140 million of 7.95% Notes due February 2010 (using
the restricted cash held in a blocked cash collateral account for the retirement of these notes); $52 million of 2018 Notes;
and $61 million related to the premiums on notes repurchased during the year.

• Net proceeds from borrowings included –

• 2012 – We received net proceeds of $995 million from the issuance of the 2022 Notes. We used the net proceeds towards
the extinguishment of the 2014 Notes, including the payments of accrued interest and related premiums, and general
corporate purposes. Additionally, our foreign operations received proceeds of $115 million from borrowings. Total debt
related to our foreign operations was $102 million at September 29, 2012 ($62 million current, $40 million long-term).

• 2011 – Our foreign operations received proceeds of $106 million from borrowings. Total debt related to our foreign

operations was $98 million at October 1, 2011 ($58 million current, $40 million long-term). Additionally, Dynamic Fuels
received $9 million in proceeds from short term notes in fiscal 2011.

•

In fiscal 2011, the minority interest partner in our 60%-owned Shandong Tyson Xinchang Foods (currently referred to as
Shandong Tyson) joint ventures in China exercised put options requiring us to purchase its entire 40% equity interest. The
transaction closed in fiscal 2011 for cash consideration totaling $66 million.

• Purchases of Tyson Class A common stock include:

•

$230 million and $170 million for shares repurchased pursuant to our share repurchase program in fiscal 2012 and 2011,
respectively; and
$34 million, $37 million and $48 million for shares repurchased to fund certain obligations under our equity
compensation plans in fiscal 2012, 2011 and 2010, respectively.

Liquidity

Cash and cash equivalents
Revolving credit facility
Total liquidity

Commitments
Expiration Date

Facility
Amount

Outstanding Letters of
Credit under Revolving
Credit Facility (no
draw downs)

August 2017

1,000

in millions

Amount
Available
1,071
962
2,033

Amount
Borrowed

$
— $
$

• The revolving credit facility supports our short-term funding needs and letters of credit. The letters of credit issued under this

facility are primarily in support of workers’ compensation insurance programs and derivative activities.

• Our 2013 Notes may be converted to Class A stock early during any fiscal quarter in the event our Class A stock trades at or
above $21.96 for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the
preceding fiscal quarter. In this event, the note holders may require us to pay outstanding principal in cash, which totaled $458
million at September 29, 2012. Any conversion premium would be paid in shares of Class A stock. The conditions for early
conversion were not met in our fourth quarter of fiscal 2012, and thus, the notes may not be converted in our first quarter of
fiscal 2013. On and after July 15, 2013, until the close of business on the second scheduled trading day immediately preceding
the maturity date, which is October 15, 2013, holders may convert their notes at any time, regardless of the foregoing
circumstances. Due to the early conversion option regardless of conversion conditions beginning in July 2013, we have
recorded the 2013 Notes balance of $458 million and remaining discount of $22 million as Current debt in our Consolidated
Balance Sheets at September 29, 2012. Should the holders exercise their early conversion option, we would use current cash
on hand and/or cash flow from operations for principal payments. We presently plan to use current cash on hand and/or cash
flows from operations for payment on the 2013 Notes not converted early upon maturity.

• At September 29, 2012, approximately 29% of our cash is held in the international 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, but 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 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. Our U.S. income taxes, net of applicable foreign tax
credits, have not been provided on undistributed earnings of foreign subsidiaries. Our intention is to reinvest these earnings
permanently or to repatriate the earnings only when it is tax effective to do so.

• Our current ratio was 1.91 to 1 and 2.01 to 1 at September 29, 2012, and October 1, 2011, respectively.

Capital Resources
Credit Facility
Cash flows from operating activities and current cash on hand are our primary sources of liquidity for funding debt service, capital
expenditures, dividends and share repurchases. We also have a revolving credit facility, with a committed maximum capacity of $1.0
billion, to provide additional liquidity for working capital needs, letters of credit and a source of financing for growth opportunities.
As of September 29, 2012, we had outstanding letters of credit totaling $38 million issued under this facility, none of which were
drawn upon, which left $962 million available for borrowing. Our revolving credit facility is funded by a syndicate of 43 banks, with
commitments ranging from $0.3 million to $90 million per bank. The syndicate includes bank holding companies that are required to
be adequately capitalized under federal bank regulatory agency requirements.

Capitalization
To monitor our credit ratings and our capacity for long-term financing, we consider various qualitative and quantitative factors. We
monitor the ratio of our debt to our total capitalization as support for our long-term financing decisions. At September 29, 2012, and
October 1, 2011, the ratio of our debt-to-total capitalization was 28.7% and 27.7%, respectively. For the purpose of this calculation,
debt is defined as the sum of current and long-term debt. Total capitalization is defined as debt plus Total Shareholders’ Equity. Our
ratio of debt to our total capitalization increased in fiscal 2012 primarily resulting from the net increase in our debt balance from
issuing the $1.0 billion 2022 Notes and extinguishing the $810 million 2014 Notes.

Credit Ratings
2016 Notes
On November 13, 2008, Moody’s Investors Service, Inc. (Moody’s) downgraded the credit rating from "Ba1" to "Ba3." This
downgrade increased the interest rate on the 2016 Notes from 7.35% to 7.85%, effective beginning with the six-month interest
payment due April 1, 2009.

On August 19, 2010, Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. (S&P), upgraded
the credit rating from "BB" to "BB+." On September 2, 2010, Moody’s upgraded the credit rating from "Ba3" to "Ba2." These
upgrades decreased the interest rate on the 2016 Notes from 7.85% to 7.35%, effective beginning with the six-month interest payment
due October 1, 2010.

On February 24, 2011, S&P upgraded the credit rating of these notes from "BB+" to "BBB-." On March 29, 2011, Moody’s upgraded
the credit rating of these notes from "Ba2" to "Ba1." These upgrades decreased the interest rate on the 2016 Notes from 7.35% to
6.85%, effective beginning with the six-month interest payment due April 1, 2011.

On June 7, 2012, Moody's upgraded the credit rating of these notes from "Ba1" to "Baa3." This upgrade decreased the interest rate on
the 2016 Notes from 6.85% to 6.60%, effective beginning with the six-month interest payment due October 1, 2012.

A one-notch downgrade by either ratings agency would increase the interest rates on the 2016 Notes by 0.25%.

Revolving Credit Facility
S&P’s corporate credit rating for Tyson Foods, Inc. is "BBB-." Moody’s senior, unsecured, subsidiary guaranteed long-term debt
rating for Tyson Foods, Inc. is "Baa3." Fitch Ratings', a wholly owned subsidiary of Fimalac, S.A. (Fitch), issuer default rating for
Tyson Foods, Inc. is "BBB." The below table outlines the fees paid on the unused portion of the facility (facility fee rate) and letter of
credit fees (undrawn letter of credit fee and borrowing spread) depending on the rating levels of Tyson Foods, Inc. from S&P, Moody's
and Fitch.

Ratings Level (S&P/Moody's/Fitch)

BBB+/Baa1/BBB+ or above

BBB/Baa2/BBB

BBB-/Baa3/BBB- (current level)

BB+/Ba1/BB+

BB/Ba2/BB or lower or unrated

Facility Fee
Rate

0.150%

0.175%

0.225%

0.275%

0.325%

Undrawn Letter of
Credit Fee and
Borrowing Spread
1.125%

1.375%

1.625%

1.875%

2.125%

In the event the rating levels are split, the applicable fees and spread will be based upon the rating level in effect for two of the rating
agencies, or, if all three rating agencies have different rating levels, the applicable fees and spread will be based upon the rating level
that is between the rating levels of the other two rating agencies.

Debt Covenants
Our revolving credit facility contains affirmative and negative covenants that, among other things, may limit or restrict our ability to:
create liens and encumbrances; incur debt; merge, dissolve, liquidate or consolidate; dispose of or transfer assets; change the nature of
our business; engage in certain transactions with affiliates; and enter into sale/leaseback or hedging transactions, in each case, subject
to certain qualifications and exceptions. In addition, we are required to maintain minimum interest expense coverage and maximum
debt to capitalization ratios.

Our 2022 Notes also contain affirmative and negative covenants that, among other things, may limit or restrict our ability to: create
liens; engage in certain sale/leaseback transactions; and engage in certain consolidations, mergers and sales of assets.

We were in compliance with all debt covenants at September 29, 2012.

OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements material to our financial position or results of operations. The off-balance sheet
arrangements we have are guarantees of debt of outside third parties, including a lease and grower loans, and residual value guarantees
covering certain operating leases for various types of equipment. See Note 19: Commitments and Contingencies of the Notes to
Consolidated Financial Statements for further discussion.

CONTRACTUAL OBLIGATIONS
The following table summarizes our contractual obligations as of September 29, 2012:

Debt and capital lease obligations:

Principal payments (1)
Interest payments (2)
Guarantees (3)

Operating lease obligations (4)
Purchase obligations (5)
Capital expenditures (6)
Other long-term liabilities (7)
Total contractual commitments

Payments Due by Period

2013

2014-2015

2016-1017

2018 and
thereafter

Total

in millions

537

122

101

819

400

232

119

109

650

138

—

1,238

2,460

260

—

752

133

328

1,075

433

2,008

589

930

1,701

5,228

(1)

(2)

In the event of a default on payment, acceleration of the principal payments could occur.
Interest payments include interest on all outstanding debt. Payments are estimated for variable rate and variable term debt
based on effective rates at September 29, 2012, and expected payment dates.

(3) Amounts include guarantees of debt of outside third parties, which consist of a lease 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. We have excluded future
purchase commitments for contracts that do not meet these criteria. Purchase orders have not been included in the table, as a
purchase order is an authorization to purchase and may not be considered an enforceable and legally binding contract.
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 29, 2012.
(7) Amounts include items that meet the definition of a purchase obligation and are recorded in the Consolidated Balance Sheets.

In addition to the amounts shown above in the table, we have unrecognized tax benefits of $168 million and related interest and
penalties of $64 million at September 29, 2012, recorded as liabilities. During fiscal 2013, tax audit resolutions could potentially
change these amounts by approximately $20 million because tax positions are sustained on audit.

The maximum contractual obligation associated with our cash flow assistance programs at September 29, 2012, based on the
estimated fair values of the livestock supplier’s net tangible assets on that date, aggregated to approximately $275 million, or
approximately $250 million remaining maximum commitment after netting the cash flow assistance related receivables.

RECENTLY ISSUED/ADOPTED ACCOUNTING PRONOUNCEMENTS
Refer to the discussion under Part II, Item 8, Notes to Consolidated Financial Statements, Note 1: Business and Summary of
Significant Accounting Policies for recently issued accounting pronouncements and Note 2: Changes in Accounting Principles for
recently adopted accounting pronouncements.

CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates. The following is a summary of certain accounting estimates we consider critical.

Description

Judgments and Uncertainties

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.

Recognition of the costs related to these
programs contains uncertainties due to
judgment required in estimating the
potential performance and redemption of
each program.

These estimates are based on many
factors, including experience of similar
promotional programs.

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 are 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.

Marketing and advertising costs
We incur advertising, retailer incentive
and consumer incentive costs to promote
products through marketing programs.
These programs include cooperative
advertising, volume discounts, in-store
display incentives, coupons and other
programs.

Marketing and advertising costs are
charged in the period incurred. We accrue
costs based on the estimated performance,
historical utilization and redemption 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 and
advertising costs is recorded as a selling,
general and administrative expense.

Effect if Actual Results Differ From
Assumptions

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.

We have not made any material changes
in the accounting methodology used to
establish our marketing 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 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 accruals
at September 29, 2012, 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.

Impairment of long-lived assets
Long-lived assets are evaluated for
impairment whenever events or changes
in circumstances indicate the carrying
value may not be recoverable. Examples
include a significant adverse change in the
extent or manner in which we use a long-
lived asset or a change in its physical
condition.

When evaluating long-lived assets for
impairment, we compare the carrying
value of the asset to the asset’s estimated
undiscounted future cash flows. An
impairment is indicated if the estimated
future cash flows are less than the
carrying value of the asset. The
impairment is the excess of the carrying
value over the fair value of the long-lived
asset.

We recorded impairment charges related
to long-lived assets of $25 million, $15
million and $19 million, respectively, in
fiscal 2012, 2011 and 2010.

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 29, 2012, would result in an
increase in the amount we recorded for
our self-insurance liability of
approximately $6 million. A 10% decrease
in the actuarial estimate at September 29,
2012, would result in a decrease in the
amount we recorded for our self-insurance
liability of approximately $23 million.

We have not made any material changes
in the accounting methodology used to
evaluate the impairment of long-lived
assets during the last 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 impairments of long-lived assets.
However, if actual results are not
consistent with our estimates and
assumptions used to calculate estimated
future cash flows, we may be exposed to
impairment losses that could be material.

Our impairment analysis contains
uncertainties due to judgment in
assumptions and estimates surrounding
undiscounted future cash flows of the
long-lived asset, including forecasting
useful lives of assets and selecting the
discount rate that reflects the risk inherent
in future cash flows to determine fair
value.

Our Dynamic Fuels consolidated joint
venture began commercial operations in
October of 2010 and has incurred net
operating losses of $14 million and $24
million in fiscal 2012 and 2011,
respectively. The plant has experienced
mechanical difficulties, pre-treatment
system performance issues and hydrogen
supply disruptions, which have
contributed to plant down time and higher
than expected operational costs. Upgrades
to the feedstock pre-treatment systems and
improvements to the mechanical
reliability of the plant are currently
ongoing. If the plant upgrades and
improvements fail to improve operational
performance, or should industry
economics make the plant uneconomical
to operate, we may be required to assess
the recoverability of Dynamic Fuels' long-
lived assets to determine whether an
impairment exists.

Additionally, we continue to evaluate our
international operations and strategies,
which may expose us to future
impairment losses.

Description

Judgments and Uncertainties

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.

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 remitted to the
United States and be taxable, but not for
earnings considered 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.

Effect if Actual Results Differ From
Assumptions

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.

Impairment of goodwill and other intangible assets

Description: Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative
goodwill test is necessary. If it is determined, based on qualitative factors, the fair value of the reporting unit may be more likely than
not less than carrying amount or if significant changes to macro-economic factors related to the reporting unit have occurred that could
materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, we can elect to forgo the
qualitative assessment and perform the quantitative test.

The quantitative goodwill impairment test is performed using a two-step process. The first step is to identify if a potential impairment
exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit
exceeds its carrying amount, goodwill of the reporting unit is not considered to have a potential impairment and the second step of the
quantitative impairment test is not necessary. However, if the carrying amount of a reporting unit exceeds its fair value, the second
step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any.

The second step compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied fair value of
goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds
the implied fair value, an impairment loss is recognized in an amount equal to that excess.

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination
(i.e., the fair value of the reporting unit is allocated to all the assets and liabilities, including any unrecognized intangible assets, as if
the reporting unit had been acquired in a business combination and the fair value of the reporting unit was determined as the exit price
a market participant would pay for the same business).

For other indefinite life intangible assets, a qualitative assessment can also be performed to determine whether the existence of events
and circumstances indicates it is more likely than not an intangible asset is impaired. Similar to goodwill, we can also elect to forgo
the qualitative test for indefinite life intangible assets and perform the quantitative test. Upon performing the quantitative test, if the
carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We
elected to forgo the qualitative assessments on our indefinite life intangible assets for the fiscal 2012 impairment test.

We have elected to make the first day of the fourth quarter the annual impairment assessment date for goodwill and other indefinite
life intangible assets. However, we could be required to evaluate the recoverability of goodwill and other indefinite life intangible
assets prior to the required annual assessment if, among other things, we experience disruptions to the business, unexpected significant
declines in operating results, divestiture of a significant component of the business or a sustained decline in market capitalization.

Judgments and Uncertainties: We estimate the fair value of our reporting units, generally our operating segments, using various
valuation techniques, with the primary technique being a discounted cash flow analysis, which uses significant unobservable inputs, or
Level 3 inputs, as defined by the fair value hierarchy. A discounted cash flow analysis requires us to make various judgmental
assumptions about sales, operating margins, growth rates and discount rates.

We include assumptions about sales, operating margins and growth rates which consider our budgets, business plans and economic
projections, and are believed to reflect market participant views which would exist in an exit transaction. Assumptions are also made
for varying perpetual growth rates for periods beyond the long-term business plan period. Generally, we utilize normalized operating
margin assumptions based on future expectations and operating margins historically realized in the reporting units' industries. For the
fiscal 2012 impairment test of material reporting units, our Domestic Chicken and Beef reporting units generally utilized operating
margins in future years in excess of the operating margin realized in the most recent year.

Our Domestic Chicken reporting unit had goodwill at September 29, 2012, totaling $900 million or 95% of our Chicken segment's
goodwill. We generally assumed operating margins in future years would return to our normalized range of 5.0% to 7.0%, as we
believe this is consistent with market participant views in an exit transaction. Had we assumed future operating margins consistent
with those realized in the current fiscal year, we would have still passed the first step of the annual impairment test. Valuing the
Domestic Chicken reporting unit utilizing projected operating margins averaging less than 3.3% (breakeven), or a 2.3% increase in the
discount rate used in fiscal 2012, would have caused the carrying value of the Domestic Chicken reporting unit to be in excess of fair
value, which would have required the second step to be performed. Although our Domestic Chicken reporting unit realized operating
margins in fiscal 2012 in excess of the breakeven operating margins required to pass the first step, the Domestic Chicken reporting
unit may be challenged in fiscal 2013 to realize this level of operating margins, due to the expected temporary challenging market
conditions in fiscal 2013.

Our Beef reporting unit, which is our Beef operating segment, had goodwill at September 29, 2012, totaling $563 million. We
generally assumed operating margins in future years would return to our normalized range of 2.5% to 4.5%, as we believe this is
consistent with market participant views in an exit transaction. Had we assumed future operating margins consistent with those
realized in the current fiscal year, we would have still passed the first step of the annual impairment test. Valuing the Beef reporting
unit utilizing projected operating margins averaging less than 1.4% (breakeven), or a 3.6% increase in the discount rate used in fiscal
2012, would have caused the carrying value of the Beef reporting unit to be in excess of fair value, which would have required the
second step to be performed. Although our Beef reporting unit realized operating margins in fiscal 2012 in excess of the breakeven
operating margins required to pass the first step, the Beef reporting unit may be challenged in fiscal 2013 to realize this level of
operating margins, due to the expected temporary challenging market conditions in fiscal 2013.

Other indefinite life intangible asset fair values have been calculated for trademarks using a royalty rate method. Assumptions about
royalty rates are based on the rates at which similar brands and trademarks are licensed in the marketplace.

Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated
future economic and operating conditions.
Effect if Actual Results Differ From Assumptions: We have not made any material changes in the accounting methodology used to
evaluate impairment of goodwill and other intangible assets during the last three years other than the adoption of the new guidance
allowing the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative
impairment test.

The discount rate used in our annual goodwill impairment test decreased to an average of 8.0% in fiscal 2012 from 8.8% in fiscal
2011. There were no significant changes in the other key estimates and assumptions.

During fiscal 2012, 2011 and 2010, all of our material reporting units that underwent a quantitative test passed the first step of the
goodwill impairment analysis and therefore, the second step was not necessary. In fiscal 2010, we recorded a $29 million full
impairment of an immaterial Chicken segment reporting unit's goodwill.

Some of the inherent estimates and assumptions used in determining fair value of the reporting units are outside the control of
management, including interest rates, cost of capital, tax rates and our credit ratings. While we believe we have made reasonable
estimates and assumptions to calculate the fair value of the reporting units and other indefinite life intangible assets, it is possible a
material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, we
may be required to perform the second step, which could result in additional material impairments of our goodwill.

All of our material reporting units' estimated fair value exceeded their carrying value by more than 20% at the date of their most recent
estimated fair value determination. Consequently, we do not currently consider any of our material reporting units at significant risk of
failing the first step of the annual goodwill impairment test.

Our fiscal 2012 other indefinite life intangible asset impairment analysis did not result in a material impairment charge. A hypothetical
20% decrease in the fair value of intangible assets would not result in a material impairment.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk relating to our operations results primarily from changes in commodity prices, interest rates and foreign exchange rates, as
well as credit risk concentrations. To address certain of these risks, we enter into various derivative transactions as described below. If
a derivative instrument is accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument
either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be
recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an
instrument’s change in fair value is recognized immediately. Additionally, we hold certain positions, primarily in grain and livestock
futures that either do not meet the criteria for hedge accounting or are not designated as hedges. With the exception of normal
purchases and normal sales that are expected to result in physical delivery, we record these positions at fair value, and the unrealized
gains and losses are reported in earnings at each reporting date. Changes in market value of derivatives used in our risk management
activities relating to forward sales contracts are recorded in sales. Changes in market value of derivatives used in our risk management
activities surrounding inventories on hand or anticipated purchases of inventories are recorded in cost of sales.

The sensitivity analyses presented below are the measures of potential losses of fair value resulting from hypothetical changes in
market prices related to commodities. Sensitivity analyses do not consider the actions we may take to mitigate our exposure to
changes, nor do they consider the effects such hypothetical adverse changes may have on overall economic activity. Actual changes in
market prices may differ from hypothetical changes.

Commodities Risk: We purchase certain commodities, such as grains and livestock, in the course of normal operations. As part of our
commodity risk management activities, we use derivative financial instruments, primarily futures and options, to reduce the effect of
changing prices and as a mechanism to procure the underlying commodity. However, as the commodities underlying our derivative
financial instruments can experience significant price fluctuations, any requirement to mark-to-market the positions that have not been
designated or do not qualify as hedges could result in volatility in our results of operations. Contract terms of a hedge instrument
closely mirror those of the hedged item providing a high degree of risk reduction and correlation. Contracts designated and highly
effective at meeting this risk reduction and correlation criteria are recorded using hedge accounting. The following table presents a
sensitivity analysis resulting from a hypothetical change of 10% in market prices as of September 29, 2012, and October 1, 2011, on
the fair value of open positions. The fair value of such positions is a summation of the fair values calculated for each commodity by
valuing each net position at quoted futures prices. The market risk exposure analysis includes hedge and non-hedge derivative
financial instruments.

Effect of 10% change in fair value

Livestock:

Cattle

Hogs

Grain

2012

in millions

2011

Interest Rate Risk: At September 29, 2012, we had variable rate debt of $219 million with a weighted average interest rate of 3.9%.
A hypothetical 10% increase in interest rates effective at September 29, 2012, and October 1, 2011, would have a minimal effect on
interest expense.

Additionally, changes in interest rates impact the fair value of our fixed-rate debt. At September 29, 2012, we had fixed-rate debt of
$2.2 billion with a weighted average interest rate of 5.9%. Market risk for fixed-rate debt is estimated as the potential increase in fair
value, resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% decrease in interest rates would have increased
the fair value of our fixed-rate debt by approximately $16 million at September 29, 2012, and $5 million at October 1, 2011. The fair
values of our debt were estimated based on quoted market prices and/or published interest rates.

Foreign Currency Risk: We have foreign exchange exposure from fluctuations in foreign currency exchange rates primarily as a
result of certain receivable and payable balances. The primary currencies we have exposure to are the Brazilian real, the British pound
sterling, the Canadian dollar, the Chinese renminbi, the European euro, and the Mexican peso. We periodically enter into foreign
exchange forward and option contracts to hedge some portion of our foreign currency exposure. A hypothetical 10% change in foreign
exchange rates effective at September 29, 2012, and October 1, 2011, related to the foreign exchange forward and option contracts
would have a $21 million and $18 million impact, respectively, on pretax income. In the future, we may enter into more foreign
exchange forward and option contracts as a result of our international growth strategy.

Concentrations of Credit Risk: Our financial instruments exposed to concentrations of credit risk consist primarily of cash
equivalents and trade receivables. Our cash equivalents are in high quality securities placed with major banks and financial
institutions. Concentrations of credit risk with respect to receivables are limited due to our large number of customers and their
dispersion across geographic areas. We perform periodic credit evaluations of our customers’ financial condition and generally do not
require collateral. At September 29, 2012, and October 1, 2011, 17.1% and 16.5%, respectively, of our net accounts receivable balance
was due from Wal-Mart Stores, Inc. No other single customer or customer group represented greater than 10% of net accounts
receivable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TYSON FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME

Three years ended September 29, 2012

in millions, except per share data

2012

2011

33,278

32,266

2010

28,430

25,916

2,514

929

1,556

(14)
347

353

30,067

2,199

914

—

1,285

(11)
242
(20)
211

1,074

1,203

341

733
(17)
750

303

380

2.04

1.84

1.97

438

765
(15)
780

303

379

2.13

1.91

2.06

31,118

2,160

912

—

1,248

(12)
356
(23)
321

927

351

576
(7)
583

293

370

1.64

1.48

1.58

Sales

Cost of Sales

Gross Profit

Operating Expenses:

Selling, general and administrative

Goodwill impairment

Operating Income

Other (Income) Expense:

Interest income

Interest expense

Other, net

Total Other (Income) Expense

Income before Income Taxes

Income Tax Expense

Net Income

Less: Net Loss Attributable to Noncontrolling Interest

Net Income Attributable to Tyson

Weighted Average Shares Outstanding:

Class A Basic

Class B Basic

Diluted

Net Income per Share Attributable to Tyson:

Class A Basic

Class B Basic

Diluted

See accompanying notes.

TYSON FOODS, INC.
CONSOLIDATED BALANCE SHEETS

September 29, 2012, and October 1, 2011
in millions, except share and per share data

2012

2011

Assets
Current Assets:

Cash and cash equivalents

Accounts receivable, net

Inventories

Other current assets

Total Current Assets

Net Property, Plant and Equipment

Goodwill

Intangible Assets

Other Assets
Total Assets
Liabilities and Shareholders’ Equity
Current Liabilities:

Current debt

Accounts payable

Other current liabilities

Total Current Liabilities

Long-Term Debt

Deferred Income Taxes

Other Liabilities

Commitments and Contingencies (Note 19)

Shareholders’ Equity:

Common stock ($0.10 par value):

Class A-authorized 900 million shares, issued 322 million shares in both 2012 and
2011

Convertible Class B-authorized 900 million shares, issued 70 million shares in both
2012 and 2011

Capital in excess of par value

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost – 33 million shares in 2012, and 22 million shares in 2011

Total Tyson Shareholders’ Equity

Noncontrolling Interest

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

See accompanying notes.

1,071

1,378

2,809

145

5,403

4,022

1,891

129

451
11,896

515

1,372

943

2,830

1,917

558

549

2,278

4,327
(63)
(569)
6,012

6,042

11,896

716

1,321

2,587

156

4,780

3,823

1,892

149

427
11,071

1,264

1,040

2,374

2,112

424

476

2,261

3,801
(79)
(365)
5,657

5,685

11,071

TYSON FOODS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common Stock at beginning and end of year:

Class A
Class B

Capital in Excess of Par Value:
Balance at beginning of year

Stock-based compensation

Balance at end of year

Retained Earnings:

Balance at beginning of year

Net income attributable to Tyson
Dividends
Redeemable noncontrolling interest accretion

Balance at end of year

Accumulated Other Comprehensive Income (Loss), Net of Tax:

Balance at beginning of year

Hedge accounting
Investment accounting
Currency translation adjustments
Net change in postretirement liabilities

Balance at end of year

Treasury Stock:

Balance at beginning of year

Purchase of Tyson Class A common stock
Stock-based compensation

Balance at end of year

Total Shareholders’ Equity Attributable to Tyson

Equity Attributable to Noncontrolling Interests

Balance at beginning of year

Net loss attributable to noncontrolling interests (1)
Contributions by noncontrolling interest

Net foreign currency translation adjustment and other

Total Equity Attributable to Noncontrolling Interests

Total Shareholders’ Equity

Comprehensive Income:

Net income
Other comprehensive income (loss), net of tax

Total Comprehensive Income
Less: Comprehensive Loss attributable to noncontrolling interest

Total Comprehensive Income attributable to Tyson

See accompanying notes.

Three years ended September 29, 2012
in millions

September 29, 2012

Amount

October 1, 2011
Shares

Amount

October 2, 2010
Shares

Amount

322
70

32
7

322
70

32
7

322
70

32
7

2,261
17
2,278

3,801
583
(57)
—
4,327

(79)
17
—
3
(4)
(63)

(365)
(264)
60
(569)

6,012

28
(7)

9
—
30

6,042

576
16
592

(7)

599

22
14
(3)
33

2,243
18
2,261

3,113
750
(59)
(3)
3,801

—
(17)
(8)
(41)
(13)
(79)

(229)
(207)
71
(365)

5,657

35
(13)

8
(2)
28

5,685

733
(79)
654

(13)

667

15
12
(5)
22

2,236
7
2,243

2,399
780
(59)
(7)
3,113

(34)
12
—
27
(5)
—

(242)
(48)
61
(229)

5,166

33
(6)

10
(2)
35

5,201

765
34
799

(6)

805

16
3
(4)
15

(1) Excludes net loss related to redeemable noncontrolling interest of $(4) million and $(9) million, for fiscal 2011 and 2010,

respectively.

TYSON FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Three years ended September 29, 2012

in millions

Cash Flows From Operating Activities:

Net income
Adjustments to reconcile net income to cash provided by operating activities:

2012

2011

576

733

Depreciation
Amortization
Deferred income taxes
Loss on early extinguishment of debt
Impairment of goodwill
Impairment of assets
Other, net
Increase in accounts receivable
Increase in inventories
Increase in accounts payable
Increase (decrease) in income taxes payable/receivable
Increase (decrease) in interest payable
Net change in other current assets and liabilities

Cash Provided by Operating Activities
Cash Flows From Investing Activities:

Additions to property, plant and equipment
Purchases of marketable securities
Proceeds from sale of marketable securities
Proceeds from notes receivable
Change in restricted cash to be used for investing activities
Other, net

Cash Used for Investing Activities
Cash Flows From Financing Activities:

Payments on debt
Net proceeds from borrowings
Purchase of redeemable noncontrolling interest
Change in restricted cash to be used for financing activities
Purchases of Tyson Class A common stock
Dividends
Other, net

Cash Used for Financing Activities
Effect of Exchange Rate Change on Cash
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

See accompanying notes.

443
56
140
167
—
34
18
(69)
(259)
106
8
5
(38)
1,187

(690)
(58)
47
—
—
41
(660)

(993)
1,116
—
—
(264)
(57)
27
(171)
(1)
355
716
1,071

433
73
86
—
—
18
49
(114)
(299)
152
(73)
19
(31)
1,046

(643)
(146)
66
51
—
28
(644)

(500)
115
(66)
—
(207)
(59)
59
(658)
(6)
(262)
978
716

2010

765

416
81
18
—
29
36
76
(79)
(239)
101
(53)
(4)
285
1,432

(550)
(53)
49
—
43
11
(500)

(1,034)
—
—
140
(48)
(59)
42
(959)
1
(26)
1,004
978

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC.

NOTE 1: BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business: Tyson Foods, Inc. (collectively, “Company,” “we,” “us” or “our”), founded in 1935 with world headquarters
in Springdale, Arkansas, is one of the world’s largest meat protein companies and the second-largest food production company in the
Fortune 500. We produce a wide variety of brand name protein-based and prepared food products marketed in the United States and
approximately 130 countries around the world.

Consolidation: The consolidated financial statements include the accounts of all wholly-owned subsidiaries, as well as majority-
owned subsidiaries over which we exercise control and, when applicable, entities for which we have a controlling financial interest or
variable interest entities for which we are the primary beneficiary. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Fiscal Year: We utilize a 52- or 53-week accounting period ending on the Saturday closest to September 30. The Company’s
accounting cycle resulted in a 52-week year for fiscal 2012, 2011 and 2010.

Cash and Cash Equivalents: Cash equivalents consist of investments in short-term, highly liquid securities having original maturities
of three months or less, which are made as part of our cash management activity. The carrying values of these assets approximate their
fair values. We primarily utilize a cash management system with a series of separate accounts consisting of lockbox accounts for
receiving cash, concentration accounts where funds are moved to, and several zero-balance disbursement accounts for funding payroll,
accounts payable, livestock procurement, grower payments, etc. As a result of our cash management system, checks issued, but not
presented to the banks for payment, may result in negative book cash balances. These negative book cash balances are included in
accounts payable and other current liabilities. At September 29, 2012, and October 1, 2011, checks outstanding in excess of related
book cash balances totaled approximately $265 million and $281 million, respectively.

Accounts Receivable: We record accounts receivable at net realizable value. This value includes an appropriate allowance for
estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and charged to the provision for
doubtful accounts. We calculate this allowance based on our history of write-offs, level of past due accounts and relationships with and
economic status of our customers. At September 29, 2012, and October 1, 2011, our allowance for uncollectible accounts was $33
million and $31 million, respectively. We generally do not have collateral for our receivables, but we do periodically evaluate the
credit worthiness of our customers.

Inventories: Processed products, livestock and supplies and other are valued at the lower of cost or market. Cost includes purchased
raw materials, live purchase costs, growout costs (primarily feed, contract grower pay and catch and haul costs), labor and
manufacturing and production overhead, which are related to the purchase and production of inventories.

Processed products:

Weighted-average method – chicken and prepared foods
First-in, first-out method – beef and pork

Livestock – first-in, first-out method

Supplies and other – weighted-average method

Total inventory

2012

754

611

952

492

in millions
2011

715

581

928

363

2,809

2,587

Property, Plant and Equipment: Property, plant and equipment are stated at cost and depreciated on a straight-line method, using
estimated lives for buildings and leasehold improvements of 10 to 33 years, machinery and equipment of three to 12 years and land
improvements and other of three to 20 years. Major repairs and maintenance costs that significantly extend the useful life of the
related assets are capitalized. Normal repairs and maintenance costs are charged to operations.

We review the carrying value of long-lived assets at each balance sheet date if indication of impairment exists. Recoverability is
assessed using undiscounted cash flows based on historical results and current projections of earnings before interest and taxes. We
measure impairment as the excess of carrying cost over the fair value of an asset. The fair value of an asset is measured using
discounted cash flows including market participant assumptions of future operating results and discount rates.

Goodwill and Other Intangible Assets: Goodwill and indefinite life intangible assets are initially recorded at fair value and not
amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise. Our goodwill is
allocated by reporting unit and is evaluated for impairment by first performing a qualitative assessment to determine whether a
quantitative goodwill test is necessary. If it is determined, based on qualitative factors, the fair value of the reporting unit may be more
likely than not less than carrying amount or if significant changes to macro-economic factors related to the reporting unit have
occurred that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, we can elect
to forgo the qualitative assessment and perform the quantitative test.

The first step of the quantitative test is to identify if a potential impairment exists by comparing the fair value of a reporting unit with
its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit
is not considered to have a potential impairment and the second step of the quantitative impairment test is not necessary. However, if
the carrying amount of a reporting unit exceeds its fair value, the second step is performed to determine if goodwill is impaired and to
measure the amount of impairment loss to recognize, if any. The second step compares the implied fair value of goodwill with the
carrying amount of goodwill. If the implied fair value of goodwill exceeds the carrying amount, then goodwill is not considered
impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount
equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a
business combination (i.e., the fair value of the reporting unit is allocated to all the assets and liabilities, including any unrecognized
intangible assets, as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was
determined as the exit price a market participant would pay for the same business). We have elected to make the first day of the fourth
quarter the annual impairment assessment date for goodwill and other indefinite life intangible assets.

We estimate the fair value of our reporting units using a discounted cash flow analysis, which uses significant unobservable inputs, or
Level 3 inputs, as defined by the fair value hierarchy. This analysis requires us to make various judgmental estimates and assumptions
about sales, operating margins, growth rates and discount factors and is believed to reflect market participant views which would exist
in an exit transaction. Generally, we utilize normalized operating margin assumptions based on future expectations and operating
margins historically realized in the reporting units' industries. For the fiscal 2012 impairment test of material reporting units requiring
a quantitative test, both our Domestic Chicken and Beef reporting units, which had goodwill at September 29, 2012, totaling $900
million and $563 million, respectively, utilized operating margins in future years in excess of the operating margins realized in the
most recent year. We assumed operating margins in future years generally would return to our normalized range, as we believe this is
consistent with market participant views in exit transactions. Some of the inherent estimates and assumptions used in determining fair
value of the reporting units are outside the control of management, including interest rates, cost of capital, tax rates and credit ratings.
While we believe we have made reasonable estimates and assumptions to calculate the fair value of the reporting units, it is possible a
material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, we
may be required to perform the second step of the quantitative test in future years, which could result in material impairments of our
goodwill.

During fiscal 2012, 2011 and 2010, all of our material reporting units that underwent the quantitative test passed the first step of the
goodwill impairment analysis and therefore, the second step was not necessary. In fiscal 2010, we recorded a $29 million full
impairment of an immaterial Chicken segment reporting unit's goodwill.

For our other indefinite life intangible assets, a qualitative assessment can also be performed to determine whether the existence of
events and circumstances indicates it is more likely than not an intangible asset is impaired. Similar to goodwill, we can also elect to
forgo the qualitative test for indefinite life intangible assets and perform the quantitative test. Upon performing the quantitative test, if
the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.
The fair value of trademarks is determined using a royalty rate method based on expected revenues by trademark.

Investments: We have investments in joint ventures and other entities. We use the cost method of accounting when our voting
interests are less than 20 percent. We use the equity method of accounting when our voting interests are in excess of 20 percent and we
do not have a controlling interest or a variable interest in which we are the primary beneficiary. Investments in joint ventures and other
entities are reported in the Consolidated Balance Sheets in Other Assets.

We also have investments in marketable debt securities. We have determined all of our marketable debt securities are available-for-
sale investments. These investments are reported at fair value based on quoted market prices as of the balance sheet date, with
unrealized gains and losses, net of tax, recorded in other comprehensive income. The amortized cost of debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity. Such amortization is recorded in interest income. The cost of
securities sold is based on the specific identification method. Realized gains and losses on the sale of debt securities and declines in
value judged to be other than temporary are recorded on a net basis in other income. Interest and dividends on securities classified as
available-for-sale are recorded in interest income.

Variable Interest Entity: We have an investment in a joint venture, Dynamic Fuels LLC (Dynamic Fuels), in which we have a 50%
ownership interest. Dynamic Fuels qualifies as a variable interest entity for which we consolidate as we are the primary beneficiary. At
September 29, 2012, Dynamic Fuels had $177 million of total assets, of which $146 million was net property, plant and equipment,
and $124 million of total liabilities, of which $100 million was long-term debt. At October 1, 2011, Dynamic Fuels had $170 million
of total assets, of which $144 million was net property, plant and equipment, and $116 million of total liabilities, of which $100
million was long-term debt.

Accrued Self Insurance: We use a combination of insurance and self-insurance mechanisms in an effort to mitigate the potential
liabilities for health and welfare, workers’ compensation, auto liability and general liability risks. Liabilities associated with our risks
retained are estimated, in part, by considering claims experience, demographic factors, severity factors and other actuarial
assumptions.

Capital Stock: We have two classes of capital stock, Class A Common Stock, $0.10 par value (Class A stock) and Class B Common
Stock, $0.10 par value (Class B stock). Holders of Class B stock may convert such stock into Class A stock on a share-for-share basis.
Holders of Class B stock are entitled to 10 votes per share, while holders of Class A stock are entitled to one vote per share on matters
submitted to shareholders for approval. As of September 29, 2012, Tyson Limited Partnership (the TLP) owned 99.977% of the
outstanding shares of Class B stock and the TLP and members of the Tyson family owned, in the aggregate, 2.53% of the outstanding
shares of Class A stock, giving them, collectively, control of approximately 71.52% of the total voting power of the outstanding voting
stock. Cash dividends cannot be paid to holders of Class B stock unless they are simultaneously paid to holders of Class A stock. The
per share amount of the cash dividend paid to holders of Class B stock cannot exceed 90% of the cash dividend simultaneously paid to
holders of Class A stock. We pay quarterly cash dividends to Class A and Class B shareholders. We paid Class A dividends per share of
$0.16 and Class B dividends per share of $0.144 in each of fiscal years 2012, 2011 and 2010.

The Class B stock is considered a participating security requiring the use of the two-class method for the computation of basic
earnings per share. The two-class computation method for each period reflects the cash dividends paid for each class of stock, plus the
amount of allocated undistributed earnings (losses) computed using the participation percentage, which reflects the dividend rights of
each class of stock. Basic earnings per share were computed using the two-class method for all periods presented. The shares of Class
B stock are considered to be participating convertible securities since the shares of Class B stock are convertible on a share-for-share
basis into shares of Class A stock. Diluted earnings per share were computed assuming the conversion of the Class B shares into
Class A shares as of the beginning of each period.

On May 11, 2011, we announced our Board of Directors reactivated a share repurchase program, which had no activity since fiscal
2005, to repurchase up to the remaining available 22.5 million shares of Class A common stock under the program. In May 2012, our
Board of Directors approved an increase of 35 million shares authorized for repurchase under our share repurchase program. As of
September 29, 2012, 35.2 million shares remained available for repurchase. The share repurchase program has no fixed or scheduled
termination date and the timing and extent to which we repurchase shares will depend upon, among other things, our working capital
needs, market conditions, liquidity targets, our debt obligations and regulatory requirements. In addition to the share repurchase
program, we purchase shares on the open market to fund certain obligations under our equity compensation plans.

A summary of cumulative share repurchases of our Class A Stock is as follows (in millions):

September 29, 2012

October 1, 2011

October 2, 2010

Dollars

Shares repurchased:

Under share repurchase program

To fund certain obligations under equity compensation plans

Total share repurchases

12.5

1.8

14.3

230

264

9.7

2.0

11.7

170

207

— $ —

3.2

Financial Instruments: We purchase certain commodities, such as grains and livestock in the course of normal operations. As part of
our commodity risk management activities, we use derivative financial instruments, primarily futures and options, to reduce our
exposure to various market risks related to these purchases, as well as to changes in foreign currency exchange rates. Contract terms of
a financial instrument qualifying as a hedge instrument closely mirror those of the hedged item, providing a high degree of risk
reduction and correlation. Contracts designated and highly effective at meeting risk reduction and correlation criteria are recorded
using hedge accounting. If a derivative instrument is accounted for as a hedge, changes in the fair value of the instrument will be offset
either against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other
comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change in fair
value is immediately recognized in earnings as a component of cost of sales. Instruments we hold as part of our risk management
activities that do not meet the criteria for hedge accounting are marked to fair value with unrealized gains or losses reported currently
in earnings. Changes in market value of derivatives used in our risk management activities relating to forward sales contracts are
recorded in sales, while changes surrounding inventories on hand or anticipated purchases of inventories or supplies are recorded in
cost of sales. We generally do not hedge anticipated transactions beyond 18 months.

Revenue Recognition: We recognize revenue when title and risk of loss are transferred to customers, which is generally on delivery
based on terms of sale. Revenue is recognized as the net amount estimated to be received after deducting estimated amounts for
discounts, trade allowances and product terms.

Litigation Reserves: There are a variety of legal proceedings pending or threatened against us. Accruals are recorded when it is
probable a liability has been incurred and the amount of the liability can be reasonably estimated based on current law, progress of
each case, opinions and views of legal counsel and other advisers, our experience in similar matters and intended response to the
litigation. These amounts, which are not discounted and are exclusive of claims against third parties, are adjusted periodically as
assessment efforts progress or additional information becomes available. We expense amounts for administering or litigating claims as
incurred. Accruals for legal proceedings are included in Other current liabilities in the Consolidated Balance Sheets.

Freight Expense: Freight expense associated with products shipped to customers is recognized in cost of sales.

Advertising and Promotion Expenses: Advertising and promotion expenses are charged to operations in the period incurred.
Customer incentive and trade promotion activities are recorded as a reduction to sales based on amounts estimated as being due to
customers, based primarily on historical utilization and redemption rates, while other advertising and promotional activities are
recorded as selling, general and administrative expenses. Advertising and promotion expenses for fiscal 2012, 2011 and 2010 were
$496 million, $552 million and $505 million, respectively.

Research and Development: Research and development costs are expensed as incurred. Research and development costs totaled $43
million, $42 million and $38 million in fiscal 2012, 2011 and 2010, respectively.

Use of Estimates: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in
the United States, which require us to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements:
In June 2011, the Financial Accounting Standards Board (FASB) issued guidance regarding the presentation of comprehensive
income. This guidance is effective for annual periods, and interim periods within those years, beginning after December 15, 2011. We
will adopt this guidance in the first quarter of fiscal 2013. Upon adoption, we will be required to present comprehensive income as
part of our consolidated statements of income, or in a separate financial statement. Currently, we present such information in our notes
to the consolidated financial statements. Other than changing the presentation of comprehensive income, we do not expect the
adoption will have a significant impact on our consolidated financial statements.

In December 2011, the FASB issued guidance enhancing disclosures related to offsetting of certain assets and liabilities. This guidance
is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. We do
not expect the adoption will have a significant impact on our consolidated financial statements.

NOTE 2: CHANGES IN ACCOUNTING PRINCIPLES

In May 2011, the FASB clarified the guidance around fair value measurements and disclosures. This guidance is effective for interim
and annual periods beginning after December 15, 2011. We adopted this guidance in the second quarter of fiscal 2012. The adoption
did not have a significant impact on our consolidated financial statements.

In September 2011, the FASB issued guidance amending the way companies test for goodwill impairment, allowing the option to first
assess qualitative factors to determine whether it is necessary to perform the two-step quantitative impairment test. This guidance is
effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. We adopted the guidance
in connection with our annual goodwill impairment test in the fourth quarter of fiscal 2012. The adoption did not have a significant
impact on our consolidated financial statements.

In July 2012, the FASB issued guidance amending the way companies test for indefinite-lived intangible asset impairment, allowing
the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. This
guidance is effective for interim and annual periods beginning after September 15, 2012, with early adoption permitted. We adopted
the guidance in connection with our annual indefinite-lived intangible assets impairment test in the fourth quarter of fiscal 2012. The
adoption did not have a significant impact on our consolidated financial statements.

NOTE 3: ACQUISITIONS

In August 2009, we completed the establishment of related joint ventures in China referred to as Shandong Tyson Xinchang Foods
(currently referred to as Shandong Tyson). The aggregate purchase price for our 60% equity interest was $21 million, which excludes
$93 million of cash transferred to the joint venture for future capital needs. The purchase price included $29 million allocated to
Intangible Assets and $19 million allocated to Goodwill, as well as the assumption of $76 million of Current and Long-Term Debt. In
May 2011, the minority partner exercised put options requiring us to purchase its entire 40% equity interest. In August 2011, the
transaction closed for $66 million.

In October 2008, we acquired three vertically integrated poultry companies in southern Brazil: Macedo Agroindustrial, Avicola
Itaiopolis and Frangobras. The aggregate purchase price was $67 million. In addition, we had $15 million of contingent purchase price
based on production volumes. The purchase price included $23 million allocated to Goodwill and $19 million allocated to Intangible
Assets. Through fiscal 2012, we have paid $10 million of the contingent purchase price.

NOTE 4: PROPERTY, PLANT AND EQUIPMENT

Major categories of property, plant and equipment and accumulated depreciation at September 29, 2012, and October 1, 2011:

Land
Building and leasehold improvements
Machinery and equipment
Land improvements and other
Buildings and equipment under construction

Less accumulated depreciation
Net property, plant and equipment

2012
101
2,868
5,208
408
298
8,883
4,861
4,022

in millions
2011
95
2,698
4,897
386
446
8,522
4,699
3,823

Approximately $433 million will be required to complete buildings and equipment under construction at September 29, 2012.

NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS

The following table reflects goodwill activity for fiscal 2012 and 2011:

Chicken

Beef

Pork

Foods Consolidated

in millions

Prepared

Balance at October 2, 2010
Goodwill

Accumulated impairment losses

Fiscal 2011 Activity:

Impairment losses

Currency translation and other

Balance at October 1, 2011
Goodwill

Accumulated impairment losses

Fiscal 2012 Activity:

Impairment losses

Currency translation and other
Balance at September 29, 2012
Goodwill

Accumulated impairment losses

979

(29)

950

—

(1)

1,123
(560)
563

—

978

(29)
949

1,123
(560)
563

—

(1)

977

(29)

948

—

1,123
(560)
563

317

—

317

—

317

—
317

—

317

—

317

—

—
63

—

2,482
(589)
1,893

—
(1)

2,481
(589)
1,892

—
(1)

2,480
(589)
1,891

Other intangible assets by type at September 29, 2012, and October 1, 2011:

Gross Carrying Value:

Trademarks
Patents, intellectual property and other
Land use rights

Less Accumulated Amortization
Total Intangible Assets

2012

in millions
2011

56
142
21
90
129

56
143
25
75
149

Beginning with the date benefits are realized, other intangible assets are amortized using the straight-line method over their estimated
period of benefit of three to 30 years. Amortization expense of $16 million, $18 million and $19 million was recognized during fiscal
2012, 2011 and 2010, respectively. We estimate amortization expense on intangible assets for the next five fiscal years subsequent to
September 29, 2012, will be: 2013 - $16 million; 2014 - $15 million; 2015 - $15 million; 2016 - $14 million; 2017 - $12 million.

NOTE 6: OTHER CURRENT LIABILITIES

Other current liabilities at September 29, 2012, and October 1, 2011, include:

Accrued salaries, wages and benefits

Self-insurance reserves
Other
Total other current liabilities

2012

382

274

287

943

in millions

2011

407

298

335

1,040

NOTE 7: DEBT

The major components of debt are as follows (in millions):

Revolving credit facility

Senior notes:

3.25% Convertible senior notes due October 2013 (2013 Notes)

10.50% Senior notes due March 2014 (2014 Notes)

6.60% Senior notes due April 2016 (2016 Notes)

7.00% Notes due May 2018

4.50% Senior notes due June 2022 (2022 Notes)

7.00% Notes due January 2028

Discount on senior notes

GO Zone tax-exempt bonds due October 2033 (0.20% at 9/29/2012)

Other

Total debt

Less current debt

Total long-term debt

2012

— $

2011

—

458

—

638

120

1,000

18
(28)
100

126

2,432

515

1,917

458

810

638

120

—

18
(76)
100

114

2,182

2,112

Annual maturities of debt for the five fiscal years subsequent to September 29, 2012, are: 2013 - $537 million; 2014 - $22 million;
2015 - $13 million; 2016 - $646 million; 2017 - $4 million.

Revolving Credit Facility
In August 2012, we entered into a new $1.0 billion revolving credit facility that supports short-term funding needs and letters of credit,
which replaced our revolving credit facility scheduled to expire in February 2016. The facility will mature and the commitments
thereunder will terminate in August 2017.

After reducing the amount available by outstanding letters of credit issued under this facility, the amount available for borrowing at
September 29, 2012, was $962 million. At September 29, 2012, we had outstanding letters of credit issued under this facility totaling
$38 million, none of which were drawn upon. We had an additional $151 million of bilateral letters of credit issued separately from the
revolving credit facility, none of which were drawn upon. Our letters of credit are issued primarily in support of workers’
compensation insurance programs, derivative activities and Dynamic Fuels’ Gulf Opportunity Zone tax-exempt bonds.

This facility is unsecured. However, if at any time (the Collateral Trigger Date) we shall fail to have (a) a corporate rating from
Moody's Investors Service, Inc. (Moody's) of "Ba1" or better, (b) a corporate rating from Standard & Poor's Ratings Services, a
Standard & Poor's Financial Services LLC business (S&P), of "BB+" or better, or (c) a corporate rating from Fitch Ratings, a wholly
owned subsidiary of Fimalac, S.A. (Fitch), of "BB+" or better, we, any subsidiary that has guaranteed any material indebtedness of the
Company, and substantially all of our other domestic subsidiaries shall be required to secure the obligations under the credit agreement
and related documents with a first-priority perfected security interest in our and such subsidiary's cash, deposit and securities accounts,
accounts receivable and related assets, inventory and proceeds of any of the foregoing (the Collateral Requirement).

If on any date prior to any Collateral Trigger Date we shall have (a) a corporate rating from Moody's of "Baa2" or better, (b) a
corporate rating from S&P of "BBB" or better and (c) a corporate rating from Fitch of "BBB" or better, in each case with stable or
better outlook, then the Collateral Requirement will no longer be effective.

This facility is fully guaranteed by Tyson Fresh Meats, Inc (TFM Parent), our wholly owned subsidiary, until such date TFM Parent is
released from all of its guarantees of other material indebtedness. If in the future any of our other subsidiaries shall guarantee any of
our material indebtedness, such subsidiary shall also be required to guarantee the indebtedness, obligations and liabilities under this
facility.

2013 Notes
In September 2008, we issued $458 million principal amount 3.25% convertible senior unsecured notes due October 15, 2013, with
interest payable semi-annually in arrears on April 15 and October 15. The conversion rate initially is 59.1935 shares of Class A stock
per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $16.89 per share of Class A stock. The 2013
Notes may be converted before the close of business on July 12, 2013, only under the following circumstances:

• during any fiscal quarter after December 27, 2008, if the last reported sale price of our Class A stock for at least 20 trading
days during a period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter is at least
130% of the applicable conversion price on each applicable trading day (which would currently require our shares to trade at
or above $21.96); or

• during the five business days after any 10 consecutive trading days (measurement period) in which the trading price per

$1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last
reported sale price of our Class A stock and the applicable conversion rate on each such day; or

• upon the occurrence of specified corporate events as defined in the supplemental indenture.

On and after July 15, 2013, until the close of business on the second scheduled trading day immediately preceding the maturity date,
holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, we will deliver cash up to
the aggregate principal amount of the 2013 Notes to be converted and shares of our Class A stock in respect of the remainder, if any, of
our conversion obligation in excess of the aggregate principal amount of the 2013 Notes being converted. As of September 29, 2012,
none of the conditions permitting conversion of the 2013 Notes had been satisfied. However, due to the early conversion option
regardless of conversion conditions beginning in July 2013, we have recorded the 2013 Notes balance, net of remaining discount, as
Current debt in our Consolidated Balance Sheets at September 29, 2012.

The 2013 Notes were originally accounted for as a combined instrument because the conversion feature did not meet the requirements
to be accounted for separately as a derivative financial instrument. However, we adopted new accounting guidance in the first quarter
of fiscal 2010 and applied it retrospectively to all periods presented. This new accounting guidance required us to separately account
for the liability and equity conversion features. Upon retrospective adoption, our effective interest rate on the 2013 Notes was
determined to be 8.26%, which resulted in the recognition of a $92 million discount to these notes with the offsetting after tax amount
of $56 million recorded to capital in excess of par value. This discount is being accreted over the five-year term of the convertible
notes at the effective interest rate.

In connection with the issuance of the 2013 Notes, we entered into separate convertible note hedge transactions with respect to our
Class A stock to minimize the potential economic dilution upon conversion of the 2013 Notes. We also entered into separate warrant
transactions. We recorded the purchase of the note hedge transactions as a reduction to capital in excess of par value, net of $36
million pertaining to the related deferred tax asset, and we recorded the proceeds of the warrant transactions as an increase to capital in
excess of par value. Subsequent changes in fair value of these instruments are not recognized in the financial statements as long as the
instruments continue to meet the criteria for equity classification.

We purchased call options in private transactions for $94 million that permit us to acquire up to approximately 27 million shares of our
Class A stock at an initial strike price of $16.89 per share, subject to adjustment. The call options allow us to acquire a number of
shares of our Class A stock initially equal to the number of shares of Class A stock issuable to the holders of the 2013 Notes upon
conversion. These call options will terminate upon the maturity of the 2013 Notes.

We sold warrants in private transactions for total proceeds of $44 million. The warrants permit the purchasers to acquire up to
approximately 27 million shares of our Class A stock at an initial exercise price of $22.31 per share, subject to adjustment. The
warrants are exercisable on various dates from January 2014 through March 2014.

The maximum amount of shares that may be issued to satisfy the conversion of the 2013 Notes is limited to 35.9 million shares.
However, the convertible note hedge and warrant transactions, in effect, increase the initial conversion price of the 2013 Notes from
$16.89 per share to $22.31 per share, thus reducing the potential future economic dilution associated with conversion of the 2013
Notes. If our share price is below $22.31 upon conversion of the 2013 Notes, there is no economic net share impact. Upon conversion,
a 10% increase in our share price above the $22.31 conversion price would result in the issuance of 2.5 million incremental shares.
The 2013 Notes and the warrants could have a dilutive effect on our earnings per share to the extent the price of our Class A stock
during a given measurement period exceeds the respective exercise prices of those instruments. The call options are excluded from the
calculation of diluted earnings per share as their impact is anti-dilutive.

2014 Notes
In March 2009, we issued $810 million of senior unsecured notes, which were scheduled to mature in March 2014. The 2014 Notes
carried a 10.50% interest rate, with interest payments due semi-annually on March 1 and September 1. These were issued at an
original issue discount of $59 million, based on an issue price of 92.756% of face value. The 2014 Notes were fully and
unconditionally guaranteed by substantially all of our domestic subsidiaries.

In June 2012, we commenced a cash tender offer to purchase any and all of the outstanding 2014 Notes. Upon completion of the
tender offer, we repurchased $790 million principal amount of the 2014 Notes. We incurred a loss of $167 million related to the early
extinguishment of the 2014 Notes, which was recorded in Interest expense in the Consolidated Statements of Income for fiscal 2012.

Subsequent to the settlement of the tender offer, we called for redemption the remaining aggregate principal amount of the 2014 Notes
not validly tendered. In July 2012, we redeemed all of the remaining 2014 Notes.

2016 Notes
The 2016 Notes carried an interest rate at issuance of 6.60%, with an interest step up feature dependent on their credit rating. On
August 19, 2010, S&P upgraded the credit rating of these notes from "BB" to "BB+." On September 2, 2010, Moody’s upgraded our
credit rating from "Ba3" to "Ba2." These upgrades decreased the interest rate on the 2016 Notes from 7.85% to 7.35%, effective
beginning with the six-month interest payment due October 1, 2010.

On February 24, 2011, S&P upgraded the credit rating of these notes from "BB+" to "BBB-." On March 29, 2011, Moody’s upgraded
our credit rating from "Ba2" to "Ba1." These upgrades decreased the interest rate on the 2016 Notes from 7.35% to 6.85%, effective
beginning with the six-month interest payment due April 1, 2011.

2022 Notes
In June 2012, we issued $1.0 billion of senior unsecured notes, which will mature in June 2022. The 2022 Notes carry a 4.50% interest
rate, with interest payments due semi-annually on June 15 and December 15. After the original issue discount of $5 million, based on
an issue price of 99.458%, we received net proceeds of $995 million. In addition, we incurred offering expenses of $9 million. We
used the net proceeds towards the repurchase and redemption of the 2014 Notes, including the payments of accrued interest and
related premiums, and general corporate purposes.

GO Zone Tax-Exempt Bonds
In October 2008, Dynamic Fuels received $100 million in proceeds from the sale of Gulf Opportunity Zone tax-exempt bonds made
available by the federal government to the regions affected by Hurricanes Katrina and Rita in 2005. These floating rate bonds are due
October 1, 2033. In November 2008, we entered into an interest rate swap related to these bonds to mitigate our interest rate risk on a
portion of the bonds for five years. We also issued a letter of credit as a guarantee for the entire bond issuance.

We were in compliance with all debt covenants at September 29, 2012.

NOTE 8: INCOME TAXES

Detail of the provision for income taxes from continuing operations consists of the following:

in millions

Federal

State

Foreign

Current

Deferred

2012

310

2011

320

351

211

140

351

—

341

255

341

The reasons for the difference between the statutory federal income tax rate and our effective income tax rate from continuing
operations are as follows:

Federal income tax rate

State income taxes

Unrecognized tax benefits, net

General business credits

Domestic production deduction

Foreign rate differences and valuation allowances

Other

2012
35.0%

1.6

0.6
(0.8)
(1.9)
3.3

0.1

37.9%

2011
35.0%

1.6
(1.7)
(0.9)
(2.3)
0.2
(0.1)
31.8%

2010

374

438

420

438

2010
35.0%

2.4

(1.4)

(0.7)

(2.0)

2.3

0.8

36.4%

During fiscal 2012, foreign tax rates different than the statutory federal rate increased the effective tax rate 2.2%. Tax expense was
also impacted by foreign valuation allowances, which increased tax expense by $11 million, as well as the domestic production
deduction, which decreased tax expense by $17 million.

During fiscal 2011, tax expense was impacted by the domestic production deduction, adjustments to reserves for uncertain tax
positions due to domestic and foreign tax audit activities, and estimated general business credits, which decreased tax expense by $25
million, $19 million and $9 million, respectively.

During fiscal 2010, tax expense was impacted by the domestic production deduction and reductions in unrecognized tax benefits,
which decreased tax expense by $24 million and $16 million, respectively.

Approximately $36 million of loss, $32 million of income and $27 million of loss from continuing operations before income taxes for
fiscal 2012, 2011 and 2010, respectively, were from operations based in countries other than the United States.

We recognize deferred income taxes for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The tax effects of major items recorded as deferred tax assets and liabilities are as follows:

2012

Deferred Tax

in millions

2011

Deferred Tax

Assets

Liabilities

Assets

Liabilities

Property, plant and equipment

— $

542

— $

Suspended taxes from conversion to accrual method

Intangible assets

Inventory

Accrued expenses

Net operating loss and other carryforwards

Insurance reserves

Other

Valuation allowance

Net deferred tax liability

—

193

101

393
(78)

105

—

848

533

—

196

405
(92)

401

113

—

698

385

We record deferred tax amounts in Other current assets and in Deferred Income Taxes on the Consolidated Balance Sheets.

The deferred tax liability for property, plant and equipment increased significantly in fiscal 2012 due primarily to increased capital
expenditures along with bonus depreciation for federal income tax purposes. The deferred tax liability for suspended taxes from
conversion to accrual method represents the 1987 change from the cash to accrual method of accounting and will be recognized by
2027.

At September 29, 2012, our gross state tax net operating loss carryforwards approximated $580 million and expire in fiscal years 2013
through 2032. Gross foreign net operating loss carryforwards approximated $215 million, of which $112 million expire in fiscal years
2013 through 2022, and the remainder has no expiration. We also have tax credit carryforwards of approximately $22 million that
expire in fiscal years 2013 through 2026.

We have accumulated undistributed earnings of foreign subsidiaries aggregating approximately $230 million and $339 million at
September 29, 2012, and October 1, 2011, respectively. These earnings are expected to be indefinitely reinvested outside of the United
States. If those earnings were distributed in the form of dividends or otherwise, we would be subject to federal income taxes (subject
to an adjustment for foreign tax credits), state income taxes and withholding taxes payable to the various foreign countries. It is not
currently practicable to estimate the tax liability that might be payable on the repatriation of these foreign earnings.

The following table summarizes the activity related to our gross unrecognized tax benefits at September 29, 2012, October 1, 2011,
and October 2, 2010:

Balance as of the beginning of the year
Increases related to current year tax positions
Increases related to prior year tax positions
Reductions related to prior year tax positions
Reductions related to settlements
Reductions related to expirations of statute of limitations
Balance as of the end of the year

2012
174
3
5
(10)
(1)
(3)
168

2011
184
4
21
(24)
(9)
(2)
174

in millions
2010
233
4
11
(35)
(25)
(4)
184

The amount of unrecognized tax benefits, if recognized, that would impact our effective tax rate was $154 million and $155 million at
September 29, 2012, and October 1, 2011, respectively. We classify interest and penalties on unrecognized tax benefits as income tax
expense. At September 29, 2012, and October 1, 2011, before tax benefits, we had $64 million and $58 million, respectively, of
accrued interest and penalties on unrecognized tax benefits.

As of September 29, 2012, we are subject to income tax examinations for U.S. federal income taxes for fiscal years 2003 through
2011. We are also subject to income tax examinations by major state and foreign jurisdictions for fiscal years 2001 through 2011.
During fiscal 2013, tax audit resolutions could potentially change our unrecognized tax benefits by approximately $20 million because
tax positions are sustained on audit.

NOTE 9: OTHER INCOME AND CHARGES

During fiscal 2012, we recorded $16 million of equity earnings in joint ventures and $4 million in net foreign currency exchange
gains, which were recorded in the Consolidated Statements of Income in Other, net.

During fiscal 2011, we recorded an $11 million gain related to a sale of interests in an equity method investment. This gain was
recorded in the Consolidated Statements of Income in Other, net.

During fiscal 2010, we recognized $38 million of insurance proceeds received related to losses incurred from Hurricane Katrina in
2005. These proceeds are reflected in the Chicken segment’s Operating Income and included in the Consolidated Statements of
Income in Cost of Sales. Also in fiscal 2010, we recorded a $12 million impairment charge related to an equity method investment.
This charge is included in the Consolidated Statements of Income in Other, net.

NOTE 10: EARNINGS PER SHARE

The earnings and weighted average common shares used in the computation of basic and diluted earnings per share are as follows:

Numerator:

Net income

Less: Net loss attributable to noncontrolling interest

Net income attributable to Tyson

Less Dividends:

Class A ($0.16/share)

Class B ($0.144/share)

Undistributed earnings

Class A undistributed earnings

Class B undistributed earnings

Total undistributed earnings

Denominator:

Denominator for basic earnings per share:

Class A weighted average shares

Class B weighted average shares, and shares under if-converted

method for diluted earnings per share

Effect of dilutive securities:

Stock options and restricted stock

Convertible 2013 Notes

Denominator for diluted earnings per share – adjusted weighted

average shares and assumed conversions

Net Income Per Share Attributable to Tyson:

Class A Basic

Class B Basic

Diluted

in millions, except per share data

2012

2011

2010

576
(7)
583

526

433

526

293

370

733
(17)
750

691

572

119

691

303

380

1.64

1.48

1.58

2.04

1.84

1.97

765
(15)
780

721

597

124

721

303

—

379

2.13

1.91

2.06

Approximately 4 million, 4 million and 5 million in fiscal 2012, 2011 and 2010, respectively, of our stock-based compensation shares
were antidilutive and were not included in the dilutive earnings per share calculation.

We have two classes of capital stock, Class A stock and Class B stock. Cash dividends cannot be paid to holders of Class B stock
unless they are simultaneously paid to holders of Class A stock. The per share amount of cash dividends paid to holders of Class B
stock cannot exceed 90% of the cash dividends paid to holders of Class A stock.

We allocate undistributed earnings based upon a 1 to 0.9 ratio per share to Class A stock and Class B stock, respectively. We allocate
undistributed earnings based on this ratio due to historical dividend patterns, voting control of Class B shareholders and contractual
limitations of dividends to Class B stock.

NOTE 11: DERIVATIVE FINANCIAL INSTRUMENTS

Our business operations give rise to certain market risk exposures mostly due to changes in commodity prices, foreign currency
exchange rates and interest rates. We manage a portion of these risks through the use of derivative financial instruments, primarily
futures and options, to reduce our exposure to commodity price risk, foreign currency risk and interest rate risk. Forward contracts on
various commodities, including grains, livestock and energy, are primarily entered into to manage the price risk associated with
forecasted purchases of these inputs used in our production processes. Foreign exchange forward contracts are entered into to manage
the fluctuations in foreign currency exchange rates, primarily as a result of certain receivable and payable balances. We also
periodically utilize interest rate swaps to manage interest rate risk associated with our variable-rate borrowings.

Our risk management programs are periodically reviewed by our Board of Directors’ Audit Committee. These programs are monitored
by senior management and may be revised as market conditions dictate. Our current risk management programs utilize industry-
standard models that take into account the implicit cost of hedging. Risks associated with our market risks and those created by
derivative instruments and the fair values are strictly monitored, using Value-at-Risk and stress tests. Credit risks associated with our
derivative contracts are not significant as we minimize counterparty concentrations, utilize margin accounts or letters of credit, and
deal with credit-worthy counterparties. Additionally, our derivative contracts are mostly short-term in duration and we generally do
not make use of credit-risk-related contingent features. No significant concentrations of credit risk existed at September 29, 2012.

We recognize all derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets, with the
exception of normal purchases and normal sales expected to result in physical delivery. The accounting for changes in the fair value
(i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging
relationship and the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging
instruments, we designate the hedging instrument based upon the exposure being hedged (i.e., fair value hedge, cash flow hedge, or
hedge of a net investment in a foreign operation). We qualify, or designate, a derivative financial instrument as a hedge when contract
terms closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. If a derivative instrument is
accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against
the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other
comprehensive income (loss) (OCI) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change
in fair value is recognized in earnings immediately. We designate certain forward contracts as follows:

• 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 forecasted purchases (i.e., livestock).
• Net Investment Hedges – include certain foreign currency forward contracts of permanently invested capital in certain foreign

subsidiaries.

Cash flow hedges
Derivative instruments, such as futures and options, are designated as hedges against changes in the amount of future cash flows
related to procurement of certain commodities utilized in our production processes. We do not purchase forward and option
commodity contracts in excess of our physical consumption requirements and generally do not hedge forecasted transactions beyond
18 months. The objective of these hedges is to reduce the variability of cash flows associated with the forecasted purchase of those
commodities. For the derivative instruments we designate and qualify as a cash flow hedge, the effective portion of the gain or loss on
the derivative is reported as a component of OCI and reclassified into earnings in the same period or periods during which the hedged
transaction affects earnings. Gains and losses representing hedge ineffectiveness are recognized in earnings in the current period.
Ineffectiveness related to our cash flow hedges was not significant during fiscal 2012, 2011 and 2010.

We had the following aggregated notional values of outstanding forward and option contracts accounted for as cash flow hedges (in
millions, except soy meal tons):

Commodity:

Corn

Soy Meal

Foreign Currency

Metric

September 29, 2012

October 1, 2011

Bushels

Tons

164,700

United States dollar

82,300

As of September 29, 2012, the net amounts expected to be reclassified into earnings within the next 12 months are pretax gains of $18
million related to grain and pretax losses of $2 million related to foreign currency. During fiscal 2012, 2011 and 2010, we did not
reclassify significant pretax gains/losses into earnings as a result of the discontinuance of cash flow hedges due to the probability the
original forecasted transaction would not occur by the end of the originally specified time period or within the additional period of
time allowed by generally accepted accounting principles.

The following table sets forth the pretax impact of cash flow hedge derivative instruments on the Consolidated Statements of Income
(in millions):

Gain/(Loss)
Recognized in OCI
on Derivatives

Consolidated
Statements of Income
Classification

Gain/(Loss)
Reclassified from
OCI to Earnings

2012

2011

2010

2012

2011

2010

Cash Flow Hedge – Derivatives

designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Total

(8)

(5) $
9

Cost of Sales

Other Income/Expense

(16) $
4
(12) $

—

(6)

(5)

Fair value hedges
We designate certain futures contracts as fair value hedges of firm commitments to purchase livestock for slaughter. Our objective of
these hedges is to minimize the risk of changes in fair value created by fluctuations in commodity prices associated with fixed price
livestock firm commitments. We had the following aggregated notional values of outstanding forward contracts entered into to hedge
forecasted commodity purchases which are accounted for as a fair value hedge (in millions):

Commodity:
Live Cattle
Lean Hogs

Metric

September 29, 2012

October 1, 2011

Pounds
Pounds

232
239

318
601

For these derivative instruments we designate and qualify as a fair value hedge, the gain or loss on the derivative, as well as the
offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in earnings in the same period. We include the
gain or loss on the hedged items (i.e., livestock purchase firm commitments) in the same line item, Cost of Sales, as the offsetting gain
or loss on the related livestock forward position.

Gain/(Loss) on forwards

Gain/(Loss) on purchase contract

Consolidated
Statements of Income
Classification

Cost of Sales

in millions

2012

47
(47)

2011

(78) $
78

2010

(58)

Ineffectiveness related to our fair value hedges was not significant during fiscal 2012, 2011 and 2010.

Foreign net investment hedges
We utilize forward foreign exchange contracts to protect the value of our net investments in certain foreign subsidiaries. For derivative
instruments that are designated and qualify as a hedge of a net investment in a foreign currency, the gain or loss is reported in OCI as
part of the cumulative translation adjustment to the extent it is effective, with the related amounts due to or from counterparties
included in other liabilities or other assets. We utilize the forward-rate method of assessing hedge effectiveness. Any ineffective
portions of net investment hedges are recognized in the Consolidated Statements of Income during the period of change.
Ineffectiveness related to our foreign net investment hedges was not significant during fiscal 2012, 2011 and 2010. At September 29,
2012, and October 1, 2011, we had $27 million and $35 million, respectively, aggregate outstanding notional values related to our
forward foreign currency contracts accounted for as foreign net investment hedges.

The following table sets forth the pretax impact of these derivative instruments on the Consolidated Statements of Income (in
millions):

Gain/(Loss)
Recognized in OCI
on Derivatives

Consolidated
Statements of Income
Classification

Gain/(Loss)
Reclassified from
OCI to Earnings

2012

2011

2010

2012

2011

2010

Net Investment Hedge – Derivatives
designated as hedging instruments:

Foreign exchange contracts

(2) $

(1) Other Income/Expense

$ — $ — $ —

Undesignated positions
In addition to our designated positions, we also hold forward and option contracts for which we do not apply hedge accounting. These
include certain derivative instruments related to commodities price risk, including grains, livestock, energy, foreign currency risk and
interest rate risk. We mark these positions to fair value through earnings at each reporting date. We generally do not enter into
undesignated positions beyond 18 months.

The objective of our undesignated grains, livestock and energy commodity positions is to reduce the variability of cash flows
associated with the forecasted purchase of certain grains, energy and livestock inputs to our production processes. We also enter into
certain forward sales of boxed beef and boxed pork and forward purchases of cattle and hogs at fixed prices. The fixed price sales
contracts lock in the proceeds from a future sale and the fixed cattle and hog purchases lock in the cost. However, the cost of the
livestock and the related boxed beef and boxed pork market prices at the time of the sale or purchase could vary from this fixed price.
As we enter into fixed forward sales of boxed beef and boxed pork and forward purchases of cattle and hogs, we also enter into the
appropriate number of livestock options and futures positions to mitigate a portion of this risk. Changes in market value of the open
livestock options and futures positions are marked to market and reported in earnings at each reporting date, even though the
economic impact of our fixed prices being above or below the market price is only realized at the time of sale or purchase. These
positions generally do not qualify for hedge treatment due to location basis differences between the commodity exchanges and the
actual locations when we purchase the commodities.

We have a foreign currency cash flow hedging program to hedge portions of forecasted transactions denominated in foreign
currencies, primarily with forward and option contracts, to protect against the reduction in value of forecasted foreign currency cash
flows. Our undesignated foreign currency positions generally would qualify for cash flow hedge accounting. However, to reduce
earnings volatility, we normally will not elect hedge accounting treatment when the position provides an offset to the underlying
related transaction that impacts current impacts.

The objective of our undesignated interest rate swap is to manage interest rate risk exposure on a floating-rate bond. Our interest rate
swap agreement effectively modifies our exposure to interest rate risk by converting a portion of the floating-rate bond to a fixed rate
basis for the first five years, thus reducing the impact of the interest-rate changes on future interest expense. This interest rate swap
does not qualify for hedge treatment due to differences in the underlying bond and swap contract interest-rate indices.

We had the following aggregate outstanding notional values related to our undesignated positions (in millions, except soy meal tons):

Commodity:

Corn

Soy Meal

Soy Oil

Live Cattle

Lean Hogs

Foreign Currency

Interest Rate

Metric

September 29, 2012

October 1, 2011

Bushels

Tons

Pounds

United States dollars

Average monthly notional debt $

1,200

108

165

174,600

110

The following table sets forth the pretax impact of the undesignated derivative instruments on the Consolidated Statements of Income
(in millions):

Derivatives not designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Interest rate contracts

Total

Consolidated
Statements of Income
Classification

Gain/(Loss)
Recognized
in Earnings

2012

2011

2010

Sales

Cost of Sales

Other Income/Expense

Interest Expense

(10) $
51

—

20
(2)
(3)
—

(20)

(5)

The following table sets forth the fair value of all derivative instruments outstanding in the Consolidated Balance Sheets (in millions):

Derivative Assets:
Derivatives designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Total derivative assets – designated

Derivatives not designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Total derivative assets – not designated

Total derivative assets
Derivative Liabilities:
Derivatives designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Total derivative liabilities – designated

Derivatives not designated as hedging instruments:

Commodity contracts

Foreign exchange contracts

Interest rate contracts

Total derivative liabilities – not designated

Total derivative liabilities

Fair Value

2012

2011

—

6
1
7

—

105

41
—
41

121

124

165

Our derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and
liabilities, including cash collateral when a legally enforceable master netting arrangement exists between the counterparty to a
derivative contract and us. See Note 12: Fair Value Measurements for a reconciliation to amounts reported in the Consolidated
Balance Sheets in Other current assets and Other current liabilities.

NOTE 12: FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The
fair value hierarchy contains three levels as follows:

Level 1 — Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date.

Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or
indirectly, including:

• 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.

Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management
judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of
market participant assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair
value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level
input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value
measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The following
tables set forth by level within the fair value hierarchy our financial assets and liabilities accounted for at fair value on a recurring
basis according to the valuation techniques we used to determine their fair values (in millions):

September 29, 2012
Assets:

Commodity Derivatives

Foreign Exchange Forward Contracts

Available for Sale Securities:

Debt securities

Equity securities

Deferred Compensation Assets

Total Assets

Liabilities:

Commodity Derivatives

Foreign Exchange Forward Contracts

Interest Rate Swap

Total Liabilities

October 1, 2011
Assets:

Commodity Derivatives

Foreign Exchange Forward Contracts

Available for Sale Securities:

Debt securities

Equity securities

Deferred Compensation Assets

Total Assets

Liabilities:

Commodity Derivatives

Foreign Exchange Forward Contracts

Interest Rate Swap

Total Liabilities

Level 1

Level 2

Level 3

Netting (a)

Total

— $

149

231

—

— $

102

— $

—

— $

105

— $

(40) $
(1)

—

—
(41) $

(100) $
—

—
(100) $

—

113

180

313

—

Level 1

Level 2

Level 3

Netting (a)

Total

— $

—

— $
—

—

— $

—

122

197

162
1

165

— $

—

— $
—

—

— $

(21) $
(2)

—

—
(23) $

(135) $
(1)
—
(136) $

117

150

292

27
—

(a) Our derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets

and liabilities, including cash collateral, when a legally enforceable master netting arrangement exists between the
counterparty to a derivative contract and us. At September 29, 2012, and October 1, 2011, we had posted with various
counterparties $59 million and $113 million, respectively, of cash collateral and held no cash collateral.

The following table provides a reconciliation between the beginning and ending balance of debt securities measured at fair value on a
recurring basis in the table above that used significant unobservable inputs (Level 3) (in millions):

Balance at beginning of year

Total realized and unrealized gains (losses):

Included in earnings
Included in other comprehensive income (loss)

Purchases

Issuances

Settlements

Balance at end of year

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

September 29, 2012

October 1, 2011

—

—
(26)
86

— $

—
(1)
31

—
(20)
83

—

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Derivative Assets and Liabilities: Our derivatives, including commodities, foreign exchange forward contracts and an interest rate
swap, primarily include exchange-traded and over-the-counter contracts which are further described in Note 11: Derivative Financial
Instruments. We record our commodity derivatives at fair value using quoted market prices adjusted for credit and non-performance
risk and internal models that use as their basis readily observable market inputs including current and forward commodity market
prices. Our foreign exchange forward contracts are recorded at fair value based on quoted prices and spot and forward currency prices
adjusted for credit and non-performance risk. Our interest rate swap is recorded at fair value based on quoted LIBOR swap rates
adjusted for credit and non-performance risk. We classify these instruments in Level 2 when quoted market prices can be corroborated
utilizing observable current and forward commodity market prices on active exchanges, observable market transactions of spot
currency rates and forward currency prices or observable benchmark market rates at commonly quoted intervals.

Available for Sale Securities: Our investments in marketable debt securities are classified as available-for-sale and are included in
Other Assets in the Consolidated Balance Sheets. These investments, which are generally long-term in nature with maturities ranging
up to 35 years, are reported at fair value based on pricing models and quoted market prices adjusted for credit and non-performance
risk. We classify our investments in U.S. government and agency debt securities as Level 2 as fair value is generally estimated using
discounted cash flow models that are primarily industry-standard models that consider various assumptions, including time value and
yield curve as well as other readily available relevant economic measures. We classify certain corporate, asset-backed and other debt
securities 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. We also classify
privately held redeemable preferred stock securities as Level 3 as there is limited activity or less observable inputs into valuation
models, including current interest rates and credit worthiness of the underlying private issuer. 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.

Additionally, we have eight million shares of Syntroleum Corporation common stock and 4.25 million warrants, which expire in June
2015, to purchase an equivalent amount of Syntroleum Corporation common stock at an average price of $2.87. We record the shares
and warrants in Other Assets in the Consolidated Balance Sheets at fair value based on quoted market prices. We classify the shares as
Level 1 as the fair value is based on unadjusted quoted prices available in active markets. We classify the warrants as Level 2 as fair
value can be corroborated based on observable market data.

(in millions)

September 29, 2012

October 1, 2011

Amortized
Cost Basis

Fair
Value

Unrealized
Gain/(Loss)

Amortized
Cost Basis

Fair
Value

Unrealized
Gain/(Loss)

Available for Sale Securities:

Debt Securities:

U.S. Treasury and Agency

Corporate and Asset-Backed (a)

Redeemable Preferred Stock

Equity Securities:

Common Stock and Warrants

—

(2)

—

(2)

(a) At September 29, 2012, and October 1, 2011, the amortized cost basis for Corporate and Asset-Backed debt securities had been

reduced by accumulated other than temporary impairments of $2 million and $3 million, respectively.

Unrealized holding gains (losses), net of tax, are excluded from earnings and reported in OCI until the security is settled or sold. On a
quarterly basis, we evaluate whether losses related to our available-for-sale securities are temporary in nature. Losses on equity
securities are recognized in earnings if the decline in value is judged to be other than temporary. If losses related to our debt securities
are determined to be other than temporary, the loss would be recognized in earnings if we intend, or more likely than not will be
required, to sell the security prior to recovery. For debt securities in which we have the intent and ability to hold until maturity, losses
determined to be other than temporary would remain in OCI, other than expected credit losses which are recognized in earnings. We
consider many factors in determining whether a loss is temporary, including the length of time and extent to which the fair value has
been below cost, the financial condition and near-term prospects of the issuer and our ability and intent to hold the investment for a
period of time sufficient to allow for any anticipated recovery. During fiscal 2012, 2011 and 2010, we recognized no other than
temporary impairments in earnings. No other than temporary losses were deferred in OCI as of September 29, 2012, and October 1,
2011.

Deferred Compensation Assets: We maintain non-qualified deferred compensation plans for certain executives and other highly
compensated employees. Investments are maintained within a trust and include money market funds, mutual funds and life insurance
policies. The cash surrender value of the life insurance policies is invested primarily in mutual funds. The investments are recorded at
fair value based on quoted market prices and are included in Other Assets in the Consolidated Balance Sheets. We classify the
investments which have observable market prices in active markets in Level 1 as these are generally publicly-traded mutual funds. The
remaining deferred compensation assets are classified in Level 2, as fair value can be corroborated based on observable market data.
Realized and unrealized gains (losses) on deferred compensation are included in earnings.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a
nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. During fiscal
2010, we recorded a $29 million charge to fully impair an immaterial Chicken segment reporting unit’s goodwill. We utilized a
discounted cash flow analysis that incorporated unobservable Level 3 inputs. We did not have any other significant measurements of
assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

Other Financial Instruments
Fair value of our debt is principally estimated using Level 2 inputs based on quoted prices for those or similar instruments. Fair value
and carrying value for our debt are as follows (in millions):

Total Debt

2,596

2,432

2,334

September 29, 2012

October 1, 2011

Fair
Value

Carrying
Value

Fair
Value

Carrying
Value

2,182

Concentrations of Credit Risk
Our financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts
receivable. Our cash equivalents are in high quality securities placed with major banks and financial institutions. Concentrations of
credit risk with respect to receivables are limited due to the large number of customers and their dispersion across geographic areas.
We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral. At September 29,
2012, and October 1, 2011, 17.1% and 16.5%, respectively, of our net accounts receivable balance was due from Wal-Mart Stores, Inc.
No other single customer or customer group represented greater than 10% of net accounts receivable.

NOTE 13: STOCK-BASED COMPENSATION

We issue shares under our stock-based compensation plans by issuing Class A stock from treasury. The total number of shares
available for future grant under the Tyson Foods, Inc. 2000 Stock Incentive Plan (Incentive Plan) was 10,795,188 at September 29,
2012.

Stock Options
Shareholders approved the Incentive Plan in January 2001. The Incentive Plan is administered by the Compensation Committee of the
Board of Directors (Compensation Committee). The Incentive Plan includes provisions for granting incentive stock options for shares
of Class A stock at a price not less than the fair value at the date of grant. Nonqualified stock options may be granted at a price equal
to, less than or more than the fair value of Class A stock on the date the option is granted. Stock options under the Incentive Plan
generally become exercisable ratably over three years from the date of grant and must be exercised within 10 years from the date of
grant. Our policy is to recognize compensation expense on a straight-line basis over the requisite service period for the entire award.

Outstanding, October 1, 2011

Exercised

Canceled

Granted

Outstanding, September 29, 2012

Shares Under
Option

18,255,221

(2,776,130)

(365,971)

3,954,240

19,067,360

Exercisable, September 29, 2012

10,540,898

Weighted
Average Exercise
Price Per Share

Weighted Average
Remaining
Contractual Life
(in Years)

Aggregate
Intrinsic Value
(in millions)

13.46

12.66

15.25

19.63

14.82

14.00

6.0

4.4

We generally grant stock options once a year; however, we granted stock options twice during fiscal 2010. The weighted average
grant-date fair value of options granted in fiscal 2012, 2011 and 2010 was $6.99, $6.19 and $4.76, respectively. The fair value of each
option grant is established on the date of grant using a binomial lattice method. We use historical volatility for a period of time
comparable to the expected life of the option to determine volatility assumptions. Expected life is calculated based on the contractual
term of each grant and takes into account the historical exercise and termination behavior of participants. Risk-free interest rates are
based on the five-year Treasury bond rate. Assumptions as of the grant date used in the fair value calculation of each year’s grants are
outlined in the following table.

Expected life (in years)

Risk-free interest rate

Expected volatility

Expected dividend yield

2012

6.7

0.9%

36.6%

1.0%

2011

6.7

1.5%

38.8%

1.0%

2010

6.5

1.2%

40.4%

1.3%

We recognized stock-based compensation expense related to stock options, net of income taxes, of $15 million, $12 million and $11
million for fiscal 2012, 2011 and 2010, respectively. The related tax benefit for fiscal 2012, 2011 and 2010 was $10 million, $7 million
and $7 million, respectively. We had 3.4 million, 3.8 million and 2.2 million options vest in fiscal 2012, 2011 and 2010, respectively,
with a grant date fair value of $17 million, $16 million and $13 million, respectively.

In fiscal 2012, 2011 and 2010, we received cash of $34 million, $51 million and $31 million, respectively, for the exercise of stock
options. Shares are issued from treasury for stock option exercises. The related tax benefit realized from stock options exercised
during fiscal 2012, 2011 and 2010, was $7 million, $10 million and $5 million, respectively. The total intrinsic value of options
exercised in fiscal 2012, 2011 and 2010, was $21 million, $26 million and $12 million, respectively. Cash flows resulting from tax
deductions in excess of the compensation cost of those options (excess tax deductions) are classified as financing cash flows. We
realized $3 million, $5 million and $3 million in excess tax deductions during fiscal 2012, 2011 and 2010, respectively. As of
September 29, 2012, we had $27 million of total unrecognized compensation cost related to stock option plans that will be recognized
over a weighted average period of 1.1 years.

Restricted Stock
We issue restricted stock at the market value as of the date of grant, with restrictions expiring over periods through 2015. Unearned
compensation is recognized over the vesting period for the particular grant using a straight-line method.

Nonvested, October 1, 2011

Granted

Dividends

Vested

Forfeited

Number of Shares

2,970,302

639,421

20,587

(1,152,468)

(106,272)

Nonvested, September 29, 2012

2,371,570

Weighted
Average Grant-
Date Fair Value
Per Share

Weighted Average
Remaining
Contractual Life
(in Years)

Aggregate
Intrinsic Value
(in millions)

14.70

17.73

18.79

15.20

16.30

15.29

1.0

As of September 29, 2012, we had $13 million of total unrecognized compensation cost related to restricted stock awards that will be
recognized over a weighted average period of 1.0 year.

We recognized stock-based compensation expense related to restricted stock, net of income taxes, of $7 million, $7 million and $8
million for fiscal 2012, 2011 and 2010, respectively. The related tax benefit for fiscal 2012, 2011 and 2010 was $4 million, $5 million
and $5 million, respectively. We had 1.2 million, 0.9 million and 1.8 million restricted stock awards vest in fiscal 2012, 2011 and
2010, respectively, with a grant date fair value of $17 million, $14 million and $30 million, respectively.

Performance-Based Shares

In July 2003, our Compensation Committee began authorizing us to award performance-based shares of our Class A stock to certain
senior executives. These awards are typically granted on the first business day of our fiscal year. The vesting of the performance-based
shares is generally over three years and each award is subject to the attainment of goals determined by the Compensation Committee
prior to the date of the award. We review progress toward the attainment of goals each quarter during the vesting period. However, the
attainment of goals can be determined only at the end of the vesting period. If the shares vest, the ultimate cost will be equal to the
Class A stock price on the date the shares vest multiplied by the number of shares awarded for all performance grants with other than
market criteria. For grants with market performance criteria, the ultimate expense will be the fair value of the probable shares to vest
regardless if the shares actually vest. Total expense recorded related to performance-based shares was not material for fiscal 2012,
2011 and 2010.

NOTE 14: PENSIONS AND OTHER POSTRETIREMENT BENEFITS

At September 29, 2012, we had four noncontributory defined benefit pension plans consisting of three funded qualified plans and one
unfunded non-qualified plan. All three of our qualified plans are frozen and provide benefits based on a formula using years of service
and a specified benefit rate. Effective January 1, 2004, we implemented a non-qualified defined benefit plan for certain contracted
officers that uses a formula based on years of service and final average salary. We also have other postretirement benefit plans for
which substantially all of our employees may receive benefits if they satisfy applicable eligibility criteria. The postretirement
healthcare plans are contributory with participants’ contributions adjusted when deemed necessary.

We have defined contribution retirement programs for various groups of employees. We recognized expenses of $47 million, $45
million and $48 million in fiscal 2012, 2011 and 2010, respectively.

We use a fiscal year end measurement date for our defined benefit plans and other postretirement plans. We recognize the effect of
actuarial gains and losses into earnings immediately for other postretirement plans rather than amortizing the effect over future
periods.

Other postretirement benefits include postretirement medical costs and life insurance.

Benefit Obligations And Funded Status
The following table provides a reconciliation of the changes in the plans’ benefit obligations, assets and funded status at September 29,
2012, and October 1, 2011:

Pension Benefits

Other Postretirement

Qualified

Non-Qualified

Benefits

2012

2011

2012

2011

2012

2011

in millions

Change in benefit obligation

Benefit obligation at beginning of year

Service cost

Interest cost

Plan participants’ contributions

Actuarial loss

Benefits paid

Benefit obligation at end of year

Change in plan assets

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contributions

Plan participants’ contributions

Benefits paid

Fair value of plan assets at end of year

—

(7)

101

—

(7)

Funded status

(15) $

Amounts recognized in the Consolidated Balance Sheets consist of:

—

3
(6)
99

—

13
(2)
81

—

17
(2)
62

—

25
(9)
64

—

—
(6)
74
(25) $

—
(2)
—
(81) $

—
(2)
—
(62) $

1
(9)
—
(64) $

—

4
(8)
44

—

1
(8)
—
(44)

Pension Benefits

Other Postretirement

in millions

Qualified

Non-Qualified

Benefits

2012

2011

2012

2011

2012

Accrued benefit liability

(15) $

(25) $

(81) $

(62) $

(64) $

Accumulated other comprehensive (income)/loss:

Unrecognized actuarial loss

Unrecognized prior service (cost)/credit

Net amount recognized

—

1
(51) $

2
(43) $

—
(4)
(68) $

2011
(44)

—
(5)
(49)

At September 29, 2012, and October 1, 2011, all pension plans had an accumulated benefit obligation in excess of plan assets. The
accumulated benefit obligation for all qualified pension plans was $101 million and $99 million at September 29, 2012, and
October 1, 2011, respectively. Plans with accumulated benefit obligations in excess of plan assets are as follows:

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets

in millions

Pension Benefits

Qualified

2012
101

101

Non-Qualified

2011
99

2012
81

—

2011
62

—

Net Periodic Benefit Cost
Components of net periodic benefit cost for pension and postretirement benefit plans recognized in the Consolidated Statements of
Income are as follows:

Pension Benefits

Other Postretirement

Qualified

Non-Qualified

Benefits

2012

2011

2010

2012

2011

2010

2012

2011

2010

in millions

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Recognized actuarial loss, net

Net periodic benefit cost

$ — $ — $ — $

(6)

—

(6)

—

5
(6)
—

$ — $

—

—
(1)
24

$ — $

—
(1)
1

—
(1)
—

As of September 29, 2012, the amounts expected to be reclassified into earnings within the next 12 months related to net periodic
benefit cost for the qualified and non-qualified pensions are $3 million and $3 million, respectively.

Assumptions
Weighted average assumptions are as follows:

Pension Benefits

Other Postretirement

Qualified

Non-Qualified

Benefits

2012

2011

2010

2012

2011

2010

2012

2011

2010

Discount rate to determine net

periodic benefit cost

Discount rate to determine

benefit obligations

4.53% 5.06% 6.00% 4.75% 5.50% 6.00% 4.09% 4.50% 5.71%

4.02% 4.53% 5.06% 4.23% 4.75% 5.50% 3.66% 4.09% 4.50%

Rate of compensation increase

N/A

3.50% 3.50% 3.50%

Expected return on plan assets

6.37% 7.79% 7.80%

N/A

To determine the expected return on plan assets assumption, we first examined historical rates of return for the various asset classes.
We then determined a long-term projected rate-of-return based on expected returns over the next five to 10 years.

Our discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at which the benefit
obligations could be effectively settled. These 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.

We have three other postretirement benefit plans which are all healthcare related. Two of these plans, which benefit obligations totaled
$26 million at September 29, 2012, were not impacted by healthcare cost trend rates as they consist of fixed annual payments. The
remaining plan, which benefit obligation was $38 million at September 29, 2012, covers retirees who do not yet qualify for Medicare
and utilized an assumed healthcare cost trend rate of 8%. A one-percentage point change in assumed healthcare cost trend rate would
have an approximate $4 million impact on the postretirement benefit obligation.

Plan Assets
The fair value of plan assets for domestic pension benefit plans was $69 million and $59 million as of September 29, 2012, and
October 1, 2011, respectively. The following table sets forth the actual and target asset allocation for pension plan assets:

Cash

Fixed Income Securities

US Stock Funds

International Stock Funds

Real Estate

Alternatives

Total

2012

1.6%

46.0

23.5

5.0

0.4

2011

1.9%

24.2

41.4

17.7

4.7

10.1

Target Asset
Allocation

2.0%

38.0

22.5

5.0

10.0

100.0%

A foreign subsidiary pension plan had $17 million and $15 million in plan assets at September 29, 2012, and October 1, 2011,
respectively. All of this plan’s assets are held in an insurance contract consistent with its target asset allocation.

The plan trustees have established a set of investment objectives related to the assets of the pension plans and regularly monitor the
performance of the funds and portfolio managers. Objectives for the pension assets are (i) to provide growth of capital and income,
(ii) to achieve a target weighted average annual rate of return competitive with other funds with similar investment objectives and
(iii) to diversify to reduce risk. The investment objectives and target asset allocation were adopted in January 2004 and amended in
August 2012. Alternative investments may include, but are not limited to, hedge funds, private equity funds and fixed income funds.

The following table shows the categories of pension plan assets and the level under which fair values were determined in the fair value
hierarchy, which is described in Note 12: Fair Value Measurements.

September 29, 2012

Level 1

Level 2

Level 3

Total

in millions

Cash and cash equivalents

Fixed Income Securities Bond Fund (a)

Equity Securities:

U.S. stock funds (a)

International stock funds (a)

Global real estate funds (a)

Total equity securities

Other Investments - Alternatives (b)
Total fair value

Insurance Contract (b)

Total plan assets

—

— $

—

— $

—

(a) Valued using quoted market prices in active markets.
(b) Valued using 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.

A reconciliation of the change in the fair value measurement of the defined benefit plans’ consolidated assets using significant
unobservable inputs (Level 3) is as follows (in millions):

Balance at October 1, 2011

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 29, 2012

Alternative funds

Insurance contract

—

—
(6)
—

— $

—

Total

—
(6)
—

We believe there are no significant concentrations of risk within our plan assets as of September 29, 2012.

Contributions
Our policy is to fund at least the minimum contribution required to meet applicable federal employee benefit and local tax laws. In our
sole discretion, we may from time to time fund additional amounts. Expected contributions to pension plans for fiscal 2013 are
approximately $8 million. For fiscal 2012, 2011 and 2010, we funded $8 million, $7 million and $4 million, respectively, to defined
benefit plans.

Estimated Future Benefit Payments
The following benefit payments are expected to be paid:

2013
2014
2015
2016
2017
2018-2022

Pension Benefits

Qualified
7
7
7
6
6
29

Non-Qualified
2
3
3
3
4
24

in millions
Other Postretirement
Benefits
5
5
5
5
5
24

The above benefit payments for other postretirement benefit plans are not expected to be offset by Medicare Part D subsidies in 2013
or thereafter.

2012

in millions

2011

1
(32)
(42)
(63) $

(7)
1
(35)
(38)
(79)

Before Tax

Income Tax

in millions

After Tax

2
(6)
24

(25) $
4
(12)
(42)
(21)
(96) $

27
(6)
35

(5) $
(6)
1

2
(8) $

10
(6)
4

(1) $
(1)
—

1
(1) $

3
(4)
16

(15)
(2)
(8)
(41)
(13)
(79)

27
(5)
34

NOTE 15: COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive loss are as follows:

Accumulated other comprehensive income (loss), net of taxes:

Unrealized net hedging gains (losses)

Unrealized net gain on investments

Currency translation adjustment

Postretirement benefits reserve adjustments

Total accumulated other comprehensive loss

The components of other comprehensive income (loss) are as follows:

Fiscal 2012:

Net hedging loss reclassified to earnings

Net hedging unrealized gain

Currency translation adjustment

Net change in postretirement liabilities

Other comprehensive income (loss) – 2012

Fiscal 2011:

Net hedging gain reclassified to earnings

Net hedging unrealized gain (loss)

Unrealized loss on investments

Currency translation adjustment

Net change in postretirement liabilities

Other comprehensive income (loss) – 2011

Fiscal 2010:

Net hedging loss reclassified to earnings

Net hedging unrealized gain

Currency translation adjustment

Net change in postretirement liabilities
Other comprehensive income (loss) – 2010

NOTE 16: SEGMENT REPORTING

We operate in four segments: Chicken, Beef, Pork and Prepared Foods. We measure segment profit as operating income (loss).

Chicken: Chicken operations include breeding and raising chickens, as well as processing live chickens into fresh, frozen and value-
added chicken products and logistics operations to move products through the supply chain. Products are marketed domestically to
food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as
schools, healthcare facilities, the military and other food processors, as well as to international markets. It also includes sales from
allied products and our chicken breeding stock subsidiary.

The results from Dynamic Fuels are included in Other.

Fiscal year ended September 29, 2012

Sales

Operating Income (Loss)

Total Other (Income) Expense

Income before Income Taxes

Depreciation

Total Assets

Additions to property, plant and equipment
Fiscal year ended October 1, 2011

Sales

Operating Income (Loss)

Total Other (Income) Expense

Income before Income Taxes

Depreciation

Total Assets

Additions to property, plant and equipment
Fiscal year ended October 2, 2010

Sales

Operating Income (Loss)

Total Other (Income) Expense

Income before Income Taxes

Depreciation

Total Assets

Additions to property, plant and equipment

Chicken

Beef

Pork

Prepared
Foods

Intersegment

Other

Sales Consolidated

in millions

$ 11,591

$ 13,755

$ 5,510

$ 3,237

446

218

417

181

167
(14)

(982) $

268

5,902

451

2,634

100

895

960

$ 11,017

$ 13,549

$ 5,460

$ 3,215

164

468

560

117

1,505

127
(24)

(1,102) $

259

5,412

464

2,610

960

943

1,146

$ 10,062

$ 11,707

$ 4,552

$ 2,999

519

542

381

124

— $
(10)

251

5,031

320

2,468

845

940

—

1,468

100

(890) $

28,430

1,556

353

1,203

416

10,752

550

33,278

1,248

321

927

443

11,896

690

32,266

1,285

211

1,074

433

11,071

643

We allocate expenses related to corporate activities to the segments, while the related assets and additions to property, plant and
equipment remain in Other.

The Pork segment had sales of $771 million, $816 million and $718 million for fiscal 2012, 2011 and 2010, respectively, from
transactions with other operating segments. The Beef segment had sales of $211 million, $286 million and $172 million for fiscal
2012, 2011 and 2010, respectively, from transactions with other operating segments.

Our largest customer, Wal-Mart Stores, Inc., accounted for 13.8%, 13.3% and 13.4% of consolidated sales in fiscal 2012, 2011 and
2010, respectively. Sales to Wal-Mart Stores, Inc. were included in the Chicken, Beef, Pork and Prepared Foods segments. Any
extended discontinuance of sales to this customer could, if not replaced, have a material impact on our operations.

The majority of our operations are domiciled in the United States. Approximately 95%, 96% and 96% of sales to external customers
for fiscal 2012, 2011 and 2010, respectively, were sourced from the United States. Approximately $5.9 billion and $5.8 billion,
respectively, of long-lived assets were located in the United States at September 29, 2012, and October 1, 2011. Approximately $564
million and $539 million of long-lived assets were located in foreign countries, primarily Brazil, China, Mexico and India, at
September 29, 2012, and October 1, 2011, respectively.

We sell certain products in foreign markets, primarily Brazil, Canada, Central America, China, the European Union, Japan, Mexico,
the Middle East, Russia, South Korea, Taiwan, Ukraine and Vietnam. Our export sales from the United States totaled $4.0 billion, $4.1
billion and $3.2 billion for fiscal 2012, 2011 and 2010, respectively. Substantially all of our export sales are facilitated through
unaffiliated brokers, marketing associations and foreign sales staffs. Sales of products produced in a country other than the United
States were less than 10% of consolidated sales for each of fiscal 2012, 2011 and 2010.

NOTE 17: SUPPLEMENTAL CASH FLOW INFORMATION

The following table summarizes cash payments for interest and income taxes:

Interest, net of amounts capitalized

Income taxes, net of refunds

NOTE 18: TRANSACTIONS WITH RELATED PARTIES

2012

274

187

2011

174

311

in millions

2010

302

470

We have operating leases for an airplane and two wastewater facilities with John Tyson, Chairman of the Company, certain members
of the Tyson family, the Donald J. Tyson Revocable Trust and the Randal W. Tyson Testamentary Trust. Total payments of $2 million
in each of fiscal 2012, 2011 and 2010, were paid to entities in which these parties had an ownership interest.

NOTE 19: COMMITMENTS AND CONTINGENCIES

Commitments
We lease equipment, properties and certain farms for which total rentals approximated $193 million, $183 million and $188 million,
respectively, in fiscal 2012, 2011 and 2010. Most leases have initial terms up to seven years, some with varying renewal periods. The
most significant obligations assumed under the terms of the leases are the upkeep of the facilities and payments of insurance and
property taxes.

Minimum lease commitments under non-cancelable leases at September 29, 2012, were:

2013

2014

2015

2016

2017

2018 and beyond

Total

in millions

101

328

We guarantee obligations of certain outside third parties, which consists of a lease and grower loans, all of which are substantially
collateralized by the underlying assets. Terms of the underlying debt cover periods up to ten years, and the maximum potential amount
of future payments as of September 29, 2012, was $75 million. We also maintain operating leases for various types of equipment,
some of which contain residual value guarantees for the market value of the underlying leased assets at the end of the term of the
lease. The remaining terms of the lease maturities cover periods over the next seven years. The maximum potential amount of the
residual value guarantees is $58 million, of which $52 million would be recoverable through various recourse provisions and an
additional undeterminable recoverable amount based on the fair value of the underlying leased assets. The likelihood of material
payments under these guarantees is not considered probable. At September 29, 2012, and October 1, 2011, no material liabilities for
guarantees were recorded.

We have cash flow assistance programs in which certain livestock suppliers participate. Under these programs, we pay an amount for
livestock equivalent to a standard cost to grow such livestock during periods of low market sales prices. The amounts of such
payments that are in excess of the market sales price are recorded as receivables and accrue interest. Participating suppliers are
obligated to repay these receivables balances when market sales prices exceed this standard cost, or upon termination of the
agreement. Our maximum obligation associated with these programs is limited to the fair value of each participating livestock
supplier’s net tangible assets. The potential maximum obligation as of September 29, 2012, was approximately $275 million. The total
receivables under these programs were $25 million and $28 million at September 29, 2012, and October 1, 2011, respectively, and are
included, net of allowance for uncollectible amounts, in Accounts Receivable and Other Assets in our Consolidated Balance Sheets.
Even though these programs are limited to the net tangible assets of the participating livestock suppliers, we also manage a portion of
our credit risk associated with these programs by obtaining security interests in livestock suppliers’ assets. After analyzing residual
credit risks and general market conditions, we have recorded an allowance for these programs’ estimated uncollectible receivables of
$10 million at both September 29, 2012, and October 1, 2011.

Additionally, we enter into future purchase commitments for various items, such as grains, livestock contracts and fixed grower fees.
At September 29, 2012, these commitments totaled:

2013

2014

2015

2016

2017

2018 and beyond

Total

in millions

819

1,075

Contingencies
We are involved in various claims and legal proceedings. We routinely assess the likelihood of adverse judgments or outcomes to
those matters, as well as ranges of probable losses, to the extent losses are reasonably estimable. We record accruals for such matters
to the extent that we conclude a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable.
Such accruals are reflected in the Company’s Consolidated Financial Statements. In our opinion, we have made appropriate and
adequate accruals for these matters and believe the probability of a material loss beyond the amounts accrued to be remote; however,
the ultimate liability for these matters is uncertain, and if accruals are not adequate, an adverse outcome could have a material effect
on the consolidated financial condition or results of operations. Listed below are certain claims made against the Company and/or our
subsidiaries for which the potential exposure is considered material to the Company’s Consolidated Financial Statements. We believe
we have substantial defenses to the claims made and intend to vigorously defend these matters.

We have pending against us a lawsuit styled DeAsencio v. Tyson Foods, Inc. (E. Dist. Pennsylvania, August 22, 2000) in which the
plaintiffs allege that we failed to compensate certain poultry plant employees for the time it takes to engage in pre- and post-shift
activities such as changing into and out of protective and sanitary clothing and walking to and from the changing area, work areas and
break areas in violation of the Federal Labor Standards Act (FLSA). They seek back wages, liquidated damages, pre- and post-
judgment interest, and attorneys’ fees. Plaintiffs appealed a jury verdict and final judgment entered in our favor on June 22, 2006. On
September 7, 2007, the U.S. Court of Appeals for the Third Circuit reversed the jury verdict and remanded the case to the District
Court for further proceedings. We sought rehearing en banc, which was denied by the Court of Appeals on October 5, 2007. The
United States Supreme Court denied our petition for a writ of certiorari on June 9, 2008. The new trial date has not been set.

We have pending twelve separate wage and hour actions involving Tyson Fresh Meats Inc.’s plants located in Lexington, Nebraska
(Lopez, et al. v. Tyson Foods, Inc., D. Nebraska, June 30, 2006), Garden City and Emporia, Kansas (Garcia, et al. v. Tyson Foods, Inc.,
Tyson Fresh Meats, Inc., D. Kansas, May 15, 2006), Storm Lake, Iowa (Bouaphakeo (f/k/a Sharp), et al. v. Tyson Foods, Inc., N.D.
Iowa, February 6, 2007), Columbus Junction, Iowa (Guyton (f/k/a Robinson), et al. v. Tyson Foods, Inc., d.b.a Tyson Fresh Meats,
Inc., S.D. Iowa, September 12, 2007), Joslin, Illinois (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), Dakota City, Nebraska (Gomez, et al. v. Tyson Foods, Inc.,
D. Nebraska, January 16, 2008), Madison, Nebraska (Acosta, et al. v Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., D. Nebraska,
February 29, 2008), Perry and Waterloo, Iowa (Edwards, et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa,
March 20, 2008); Council Bluffs, Iowa (Maxwell (f/k/a Salazar), et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa,
April 29, 2008); Logansport, Indiana (Carter, et al. v. Tyson Foods, Inc. and Tyson Fresh Meats, Inc., N.D. Indiana, April 29, 2008);
and Goodlettsville, Tennessee (Abadeer v. Tyson Foods, Inc., and Tyson Fresh Meats, Inc., M.D. Tennessee, February 6, 2009). The
actions allege we failed to pay employees for all hours worked, including overtime compensation for the time it takes to change into
protective work uniforms, safety equipment and other sanitary and protective clothing worn by employees, and for walking to and
from the changing area, work areas and break areas in violation of the FLSA and analogous state laws. The plaintiffs seek back wages,
liquidated damages, pre- and post-judgment interest, attorneys’ fees and costs. Each case is proceeding in its jurisdiction.

• After a trial in the Garcia case, which involved the Garden City, Kansas facility, a jury verdict in favor of the plaintiffs was

entered on March 17, 2011. Exclusive of pre- and post-judgment interest, attorneys’ fees and costs, the jury found violations
of federal and state laws for pre- and post-shift work activities and awarded damages in the amount of $503,011. Plaintiffs’
counsel has filed an application for attorneys’ fees and expenses in the amount of $3,475,422, which we have contested. The
court stayed the filing of a notice of appeal pending its decision on plaintiffs' application for attorneys' fees and expenses.
• A jury trial was held in the Lopez case, which involved the Lexington, NE beef plant, and resulted in a jury verdict in favor
of Tyson. Judgment was entered and the complaint was dismissed with prejudice on May 26, 2011. Plaintiffs filed an appeal
with the Eighth Circuit Court of Appeals on June 16, 2011, and the appellate court affirmed the jury's verdict in favor of
Tyson on September 4, 2012.

• A jury trial was held in the Bouaphakeo case, which involved the Storm Lake, Iowa pork plant and 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. We have
appealed the jury's verdict and trial court's award. The plaintiffs' counsel has also filed an application for attorneys' fees and
expenses in the amount of $2,692,145.

• A jury trial was held in the Guyton case, which involved the Columbus Junction, Iowa pork plant, and resulted in a jury

verdict in favor of Tyson on April 25, 2012. The plaintiffs filed a post-trial motion, which remains pending in the trial court.
• The Maxwell case has been resolved by the parties, and the parties filed a joint motion for approval of the terms of settlement

with the trial court on October 31, 2012, which the trial court has preliminarily approved.

• The Acosta and Gomez cases are scheduled for trials on January 14, 2013, and March 18, 2013, respectively.

We have pending one wage and hour action involving our Tyson Prepared Foods plant located in Jefferson, Wisconsin (Weissman, et
al. v. Tyson Prepared Foods, Inc., Jefferson County (Wisconsin) Circuit Court, October 20, 2010). The plaintiffs allege that employees
should be paid for the time it takes to engage in pre- and post-shift activities such as changing into and out of protective and sanitary
clothing and the associated time it takes to walk to and from their workstations post-donning and pre-doffing of protective and sanitary
clothing. Six named plaintiffs seek to act as state law class representatives on behalf of all current and former employees who were
allegedly not paid for time worked and seek back wages, liquidated damages, pre- and post-judgment interest, and attorneys’ fees and
costs. On May 16, 2011, the plaintiffs filed a motion to certify a state law class of all hourly employees who have worked at the
Jefferson plant from October 20, 2008, to the present. We have filed motions for summary judgment seeking dismissal of the claims,
or, in the alternative, to limit the claims made for non-compensable clothes changing activities. The court granted summary judgment
in favor of Tyson on August 31, 2012, and the plaintiffs filed a notice of appeal on October 5, 2012.

On June 19, 2005, the Attorney General and the Secretary of the Environment of the State of Oklahoma filed a complaint in the U.S.
District Court for the Northern District of Oklahoma against us, three of our subsidiaries and six other poultry integrators. The
complaint, which was subsequently amended, asserts a number of state and federal causes of action including, but not limited to,
counts under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Resource Conservation and
Recovery Act (RCRA), and state-law public nuisance theories. The amended complaint asserts that defendants and certain contract
growers who are not named in the amended complaint polluted the surface waters, groundwater and associated drinking water supplies
of the Illinois River Watershed (IRW) through the land application of poultry litter. Oklahoma asserts that this alleged pollution has
also caused extensive injury to the environment (including soils and sediments) of the IRW and that the defendants have been unjustly
enriched. Oklahoma’s claims cover the entire IRW, which encompasses more than one million acres of land and the natural resources
(including lakes and waterways) contained therein. Oklahoma seeks wide-ranging relief, including injunctive relief, compensatory
damages in excess of $800 million, an unspecified amount in punitive damages and attorneys’ fees. We and the other defendants have
denied liability, asserted various defenses, and filed a third-party complaint that asserts claims against other persons and entities whose
activities may have contributed to the pollution alleged in the amended complaint. The district court has stayed proceedings on the
third party complaint pending resolution of Oklahoma’s claims against the defendants. On October 31, 2008, the defendants filed a
motion to dismiss for failure to join the Cherokee Nation as a required party or, in the alternative, for judgment as a matter of law
based on the plaintiffs’ lack of standing. This motion was granted in part and denied in part on July 22, 2009. In its ruling, the district
court dismissed Oklahoma’s claims for cost recovery and for natural resources damages under CERCLA and for unjust enrichment
under Oklahoma common law. This ruling also narrowed the scope of Oklahoma’s remaining claims by dismissing all damage claims
under its causes of action for Oklahoma common law nuisance, federal common law nuisance, and Oklahoma common law trespass,
leaving only its claims for injunctive relief for trial. On August 18, 2009, the Court granted partial summary judgment in favor of the
defendants on Oklahoma’s claims for violations of the Oklahoma Registered Poultry Feeding Operations Act. Oklahoma later
voluntarily dismissed the remainder of this claim. On September 2, 2009, the Cherokee Nation filed a motion to intervene in the
lawsuit. Its motion to intervene was denied on September 15, 2009, and the Cherokee Nation filed a notice of appeal of that ruling in
the Tenth Circuit Court of Appeals on September 17, 2009. A non-jury trial of the case began on September 24, 2009. At the close of
Oklahoma’s case-in-chief, the Court granted the defendants’ motions to dismiss claims based on RCRA, nuisance per se, and health
risks related to bacteria. The defense rested its case on January 13, 2010, and closing arguments were held on February 11, 2010. On
September 21, 2010, the Court of Appeals affirmed the district court’s denial of the Cherokee Nation’s motion to intervene. On
October 6, 2010, the Cherokee Nation and the State of Oklahoma filed a petition for rehearing or en banc review seeking
reconsideration of this ruling. The Court of Appeals denied this petition. The district court has not yet rendered its decision from the
trial, which ended in February 2010.

On May 8, 2008, a lawsuit was filed against the Company and two of our employees in the District Court of McCurtain County,
Oklahoma styled Armstrong, et al. v. Tyson Foods, Inc., et al. (the Armstrong Case). The lawsuit was brought by a group of 52 poultry
growers who allege that certain of our live production practices in Oklahoma constitute fraudulent inducement, fraud, unjust
enrichment, negligence, gross negligence, unconscionability, violations of the Oklahoma Business Sales Act, Deceptive Trade Practice
violations, violations of the Consumer Protection Act, and conversion, as well as other theories of recovery. The plaintiffs sought
damages in an unspecified amount. On October 30, 2009, 20 additional growers represented by the same attorney filed a lawsuit
against us in the same court asserting the same or similar claims, which is styled Clardy, et al. v. Tyson Foods, Inc., et al. (the Clardy
Case). In both of these cases we have denied all allegations of wrongdoing. In June 2009, the plaintiffs in the Armstrong case
requested an expedited trial date for a smaller group of plaintiffs they claimed were facing imminent financial peril. The Court
ultimately severed a group of 10 plaintiffs from the Armstrong Case, and a trial began on March 15, 2010. On April 1, 2010, the jury
returned a verdict against us and one of our employees, and on April 2, 2010, the Court entered a judgment in the amount of
$8,655,735, which included punitive damages. Subsequent to the trial, the presiding judge disqualified from the cases and the
Oklahoma Supreme Court appointed a new judge to the cases. Following this appointment, the trial court granted our motions for
change of venue and to stay all future trials of plaintiffs in the Armstrong Case and the Clardy Case pending the outcome of our appeal
of the initial Armstrong Case verdict. The trial court took under advisement the sizes of groupings of plaintiffs in future trials in
response to our motion to sever the plaintiffs' claims into individual cases. We appealed the initial Armstrong Case verdict to the
Oklahoma Supreme Court based on numerous irregularities and rulings during the trial, and the Oklahoma Supreme Court reversed
the verdict and remanded the case back to the trial court. At this time, new trial dates in the Armstrong Case have not been scheduled,
nor have trial dates for the Clardy Case.

In late 2010, the United States Environmental Protection Agency (EPA) Region 7 began a Clean Air Act investigation of the Company
related to operation and maintenance of ammonia refrigeration equipment at multiple facilities. The EPA subsequently referred the
matter, which involves allegations of potential non-compliance with the Clean Air Act’s Risk Management Plan requirements at 25
Tyson facilities in Kansas, Missouri, Iowa and Nebraska, to the United States Department of Justice (DOJ). The EPA and DOJ have
indicated they will seek monetary penalties and injunctive relief requiring equipment and infrastructure changes at several facilities.
Currently we are engaged in settlement discussions with the EPA and DOJ.

NOTE 20: QUARTERLY FINANCIAL DATA (UNAUDITED)

2012
Sales
Gross profit
Operating income
Net income
Net income attributable to Tyson
Net income per share attributable to Tyson:

Class A Basic
Class B Basic
Diluted

2011
Sales
Gross profit
Operating income
Net income
Net income attributable to Tyson
Net income per share attributable to Tyson:

Class A Basic
Class B Basic
Diluted

First
Quarter

Second
Quarter

in millions, except per share data
Fourth
Quarter

Third
Quarter

$
$
$

8,329
493
278
156
156

0.43
0.39
0.42

7,615
744
498
294
298

0.81
0.73
0.78

$
$
$

8,268
535
302
166
166

0.47
0.42
0.44

8,000
533
303
156
159

0.43
0.39
0.42

$
$
$

8,308
562
336
73
76

0.21
0.19
0.21

8,247
531
312
188
196

0.53
0.48
0.51

$
$
$

8,373
570
332
181
185

0.53
0.48
0.51

8,404
391
172
95
97

0.27
0.24
0.26

Third quarter fiscal 2012 net income included a $167 million pretax charge related to the early extinguishment of debt. Fourth quarter
fiscal 2012 net income included a $15 million non-cash charge related to the impairment of non-core assets in China.

First quarter fiscal 2011 net income included $11 million gain related to a sale of interests in an equity method investment. Third
quarter fiscal 2011 net income included $21 million reduction to income tax expense related to a reversal of reserves for foreign
uncertain tax positions.

NOTE 21: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

TFM Parent, our wholly-owned subsidiary, has fully and unconditionally guaranteed the 2016 Notes. Additionally, TFM Parent has
fully and unconditionally guaranteed the 2022 Notes until such date TFM Parent has been released of its guarantee of both (i) Tyson's
$1.0 billion revolving credit facility and (ii) the 2016 Notes, at which time TFM Parent's guarantee of the 2022 Notes is permanently
released. The following financial information presents condensed consolidating financial statements, which include Tyson Foods, Inc.
(TFI Parent); TFM Parent; the Non-Guarantor Subsidiaries (Non-Guarantors) on a combined basis; the elimination entries necessary
to consolidate TFI Parent, TFM Parent and the Non-Guarantors; and Tyson Foods, Inc. on a consolidated basis, and is provided as an
alternative to providing separate financial statements for the guarantor. This presentation has been revised from the financial
presentation disclosed in prior periods to reflect changes in the subsidiary guarantees associated with the permanent release of certain
subsidiary guarantors upon the retirement of the 2014 Notes.

Condensed Consolidating Statement of Income for the year ended September 29, 2012

in millions

Sales

Cost of Sales

Gross Profit

Operating Expenses:

Selling, general and administrative

Goodwill impairment

Operating Income

Other (Income) Expense:

Interest expense, net

Other, net

Equity in net earnings of subsidiaries

Total Other (Income) Expense

Income before Income Taxes

Income Tax Expense (Benefit)

Net Income

Less: Net Loss Attributable to Noncontrolling Interest

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

352

18,832

15,375

(1,281) $

(4)

356

—

297

(427)

(377)

674

583

—

18,088

744

14,314

1,061

205

—

539

143

—

(43)

100

439

130

309

—

649

—

412

152

(24)

—

128

284

130

154

(7)

(1,280)

(1)

—

470

(470)

—

(470)

—

Net Income Attributable to Tyson

583

309

161

(470) $

Total

33,278

31,118

2,160

912

—

1,248

344

(23)

—

321

927

351

576

(7)

583

Condensed Consolidating Statement of Income for the year ended October 1, 2011

in millions

Sales

Cost of Sales

Gross Profit

Operating Expenses:

Selling, general and administrative

Goodwill impairment

Operating Income

Other (Income) Expense:

Interest expense, net

Other, net

Equity in net earnings of subsidiaries

Total Other (Income) Expense

Income before Income Taxes

Income Tax Expense (Benefit)

Net Income

Less: Net Loss Attributable to Noncontrolling Interest

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

157

18,636

14,700

(1,227) $

128

—

(26)

(9)

(673)

(708)

784

750

—

17,461

1,175

13,804

896

215

—

960

148

—

(115)

927

272

655

—

647

—

249

109

(11)

—

151

116

(17)

(1,227)

—

788

(788)

—

(788)

—

Net Income Attributable to Tyson

750

655

133

(788) $

Total

32,266

30,067

2,199

914

—

1,285

231

(20)

—

211

1,074

341

733

(17)

750

Condensed Consolidating Statement of Income for the year ended October 2, 2010

in millions

Sales

Cost of Sales

Gross Profit

Operating Expenses:

Selling, general and administrative

Goodwill impairment

Operating Income

Other (Income) Expense:

Interest expense, net

Other, net

Equity in net earnings of subsidiaries

Total Other (Income) Expense

Income before Income Taxes

Income Tax Expense (Benefit)

Net Income

Less: Net Loss Attributable to Noncontrolling Interest

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

454

15,950

13,415

(1,389) $

438

—

345

328

(782)

(429)

774

(6)

780

—

14,867

1,083

12,422

993

199

—

884

(51)

(48)

932

304

628

—

637

327

(6)

—

(3)

330

140

190

(15)

(1,389)

—

833

(833)

—

(833)

—

Net Income Attributable to Tyson

780

628

205

(833) $

Total

28,430

25,916

2,514

929

1,556

333

—

353

1,203

438

765

(15)

780

Condensed Consolidating Balance Sheet as of September 29, 2012

in millions

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

Total

Assets

Current Assets:

Cash and cash equivalents

Accounts receivable, net

Inventories

Other current assets

Total Current Assets

Net Property, Plant and Equipment

Goodwill

Intangible Assets

Other Assets

Investment in Subsidiaries

Total Assets

Liabilities and Shareholders’ Equity

Current Liabilities:

Current debt

Accounts payable

Other current liabilities

Total Current Liabilities

Long-Term Debt

Deferred Income Taxes

Other Liabilities

Total Tyson Shareholders’ Equity

Noncontrolling Interest

Total Shareholders’ Equity

—

139

141

—

1,257

11,849

1,061

— $

499

950

100

1,558

873

881

151

2,005

878

1,859

3,888

3,118

1,010

103

251

—

(184)

—

(1,208)

(13,854)

1,071

1,378

2,809

145

5,403

4,022

1,891

129

451

—

13,278

5,494

8,370

(15,246) $

11,896

439

— $

4,887

5,336

1,774

—

156

6,012

—

6,012

558

144

702

809

135

146

3,702

—

3,702

167

804

766

1,737

486

432

294

5,391

5,421

(91) $

—

(4,854)

(4,945)

(1,152)

(9)

(47)

(9,093)

—

(9,093)

515

1,372

943

2,830

1,917

558

549

6,012

6,042

11,896

Total Liabilities and Shareholders’ Equity

13,278

5,494

8,370

(15,246) $

Condensed Consolidating Balance Sheet as of October 1, 2011

in millions

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

Total

Assets

Current Assets:

Cash and cash equivalents

Accounts receivable, net

Inventories

Other current assets

Total Current Assets

Net Property, Plant and Equipment

Goodwill

Intangible Assets

Other Assets

Investment in Subsidiaries

Total Assets

Liabilities and Shareholders’ Equity

Current Liabilities:

Current debt

Accounts payable

Other current liabilities

Total Current Liabilities

Long-Term Debt

Deferred Income Taxes

Other Liabilities

Total Tyson Shareholders’ Equity

Noncontrolling Interest

Total Shareholders’ Equity

—

2,179

11,396

506

926

1,528

875

881

180

1,923

714

813

1,659

3,269

2,911

1,011

118

260

—

— $

—

(84)

(83)

—

(2,192)

(13,319)

716

1,321

2,587

156

4,780

3,823

1,892

149

427

—

13,678

5,418

7,569

(15,594) $

11,071

5,808

5,818

1,972

—

231

5,657

—

5,657

— $

525

144

669

1,198

120

142

3,289

—

3,289

731

843

1,642

1,005

319

217

4,358

4,386

— $

—

(5,755)

(2,063)

(15)

(114)

(7,647)

—

(7,647)

Total Liabilities and Shareholders’ Equity

13,678

5,418

7,569

(15,594) $

Condensed Consolidating Statement of Cash Flows for the year ended September 29, 2012

Cash Provided by (Used for) Operating Activities

312

438

447

(10) $

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

Cash Flows from Investing Activities:

Additions to property, plant and equipment

(Purchases of)/Proceeds from marketable securities, net

Proceeds from notes receivable

Change in restricted cash to be used for investing activities

Other, net

Cash Provided by (Used for) Investing Activities

Cash Flows from Financing Activities:

Net change in debt

Purchase of redeemable noncontrolling interest

Change in restricted cash to be used for financing activities

Purchases of Tyson Class A common stock

Dividends

Other, net

Net change in intercompany balances

Cash Provided by (Used for) Financing Activities

Effect of Exchange Rate Change on Cash

Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

Cash and Cash Equivalents at End of Period

(1)

—

107

—

(264)

(57)

(124)

(312)

—

(104)

(7)

—

(585)

(4)

—

(106)

(554)

—

(324)

—

(10)

448

455

(1)

347

714

—

1,061

— $

1,071

1,264

1,040

2,374

2,112

424

476

5,657

5,685

11,071

in millions

Total

1,187

(690)

(11)

—

(660)

123

—

(264)

(57)

—

(171)

(1)

355

716

Condensed Consolidating Statement of Cash Flows for the year ended October 1, 2011

Cash Provided by (Used for) Operating Activities

564

471

(20) $

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

Cash Flows from Investing Activities:

Additions to property, plant and equipment

(Purchases of)/Proceeds from marketable securities, net

Proceeds from notes receivable

Change in restricted cash to be used for investing activities

Other, net

Cash Provided by (Used for) Investing Activities

Cash Flows from Financing Activities:

Net change in debt

Purchase of redeemable noncontrolling interest

Change in restricted cash to be used for financing activities

Purchases of Tyson Class A common stock

Dividends

Other, net

Net change in intercompany balances

Cash Provided by (Used for) Financing Activities

Effect of Exchange Rate Change on Cash

Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

Cash and Cash Equivalents at End of Period

(1)

—

(391)

—

(207)

(59)

554

(54)

—

(1)

(107)

(57)

—

(164)

(6)

—

(395)

(401)

—

(1)

(535)

(23)

—

(502)

(66)

—

(20)

(159)

(223)

(6)

(260)

974

714

—

— $

in millions

Total

1,046

(643)

(80)

—

(644)

(385)

(66)

—

(207)

(59)

—

(658)

(6)

(262)

978

716

Condensed Consolidating Statement of Cash Flows for the year ended October 2, 2010

in millions

Cash Provided by (Used for) Operating Activities

386

499

547

— $

TFI
Parent

TFM
Parent

Non-
Guarantors

Eliminations

Cash Flows from Investing Activities:

Additions to property, plant and equipment

(Purchases of)/Proceeds from marketable securities, net

Proceeds from notes receivable

Change in restricted cash to be used for investing activities

Other, net

Cash Provided by (Used for) Investing Activities

Cash Flows from Financing Activities:

Net change in debt

Purchase of redeemable noncontrolling interest

Change in restricted cash to be used for financing activities

Purchases of Tyson Class A common stock

Dividends

Other, net

Net change in intercompany balances

Cash Provided by (Used for) Financing Activities

Effect of Exchange Rate Change on Cash

Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

Cash and Cash Equivalents at End of Period

(85)

—

(1)

(86)

(149)

—

(262)

(411)

—

(462)

(4)

—

(410)

(11)

—

140

—

(307)

(168)

(30)

1,004

—

974

— $

(3)

—

(1)

(4)

(874)

—

(48)

(59)

569

(380)

—

Total

1,432

(550)

(4)

—

(500)

(1,034)

—

140

(48)

(59)

—

(959)

(26)

1,004

978

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Tyson Foods, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders'

equity and cash flows present fairly, in all material respects, the financial position of Tyson Foods, Inc. and its subsidiaries at
September 29, 2012 and October 1, 2011, and the results of their operations and their cash flows for each of the three years in the
period ended September 29, 2012 in conformity with accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a) presents fairly, in all material
respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 29, 2012,
based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement
schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item
9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's
internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal
control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Fayetteville, AR
November 19, 2012

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation was performed, under the supervision and with the participation of management, including the Chief Executive Officer
(CEO) and the Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the 1934 Act)). Based on that
evaluation, management, including the CEO and CFO, has concluded that, as of September 29, 2012, our disclosure controls and
procedures were effective.

Changes in Internal Control Over Financial Reporting
In the quarter ended September 29, 2012, there have been no changes in the Company’s internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule
13a-15(f) of the Securities Exchange Act of 1934. Our internal control over financial reporting was designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or the degree of compliance with
the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 29, 2012. In
making this assessment, we used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control – Integrated Framework.

Based on this evaluation under the framework in Internal Control – Integrated Framework issued by COSO, Management concluded
the Company’s internal control over financial reporting was effective as of September 29, 2012.

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, who has audited the fiscal 2012
financial statements included in this Form 10-K has also audited the Company’s internal control over financial reporting. Their report
appears in Part II, Item 8.

ITEM 9B. OTHER INFORMATION
Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
See information set forth under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance”
in the Company’s definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held February 1, 2013 (the
“Proxy Statement”), which information is incorporated herein by reference. Pursuant to general instruction G(3) of Annual Report on
Form 10-K, certain information concerning our executive officers is included under the caption “Executive Officers of the Company”
in Part I of this Report.

We have a code of ethics as defined in Item 406 of Regulation S-K, which code applies to all of our directors and employees,
including our principal executive officers, principal financial officer, principal accounting officer or controller, and persons performing
similar functions. This code of ethics, titled “Tyson Foods, Inc. Code of Conduct,” is available, free of charge on our website at http://
ir.tyson.com.

ITEM 11. EXECUTIVE COMPENSATION
See the information set forth under the captions “Executive Compensation,” “Director Compensation For Fiscal 2012,”
“Compensation Discussion and Analysis,” “Report of the Compensation Committee,” and “Compensation Committee Interlocks and
Insider Participation” in the Proxy Statement, which information is incorporated herein by reference. However, pursuant to
instructions to Item 407(e)(5) of the Securities and Exchange Commission Regulation S-K, the material appearing under the sub-
heading “Report of the Compensation Committee” shall not be deemed to be “filed” with the Commission, other than as provided in
this Item 11.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
See the information included under the captions “Security Ownership of Certain Beneficial Owners” and “Security Ownership of
Management” in the Proxy Statement, which information is incorporated herein by reference.

Securities Authorized for Issuance Under Equity Compensation Plans
The following information reflects certain information about our equity compensation plans as of September 29, 2012:

Equity Compensation Plan Information

(a)

(b)

(c)

Number of
Securities to be
issued upon
exercise of
outstanding
options

19,067,360

—

19,067,360

Weighted
average
exercise price
of outstanding
options

14.82

—

14.82

Number of Securities
remaining available for
future issuance under
equity compensation plans
(excluding Securities
reflected in column (a))

22,187,165

—

22,187,165

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Total

(a) Outstanding options granted by the Company

(b) Weighted average price of outstanding options

Employee Stock Purchase Plan (3,744,369) and the Retirement Savings Plan (7,647,608)

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
See the information included under the captions “Election of Directors” and “Certain Transactions” in the Proxy Statement, which
information is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
See the information included under the captions “Audit Fees,” “Audit-Related Fees,” “Tax Fees,” “All Other Fees,” and “Audit
Committee Pre-Approval Policy” in the Proxy Statement, which information is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this report:

Consolidated Statements of Income

for the three years ended September 29, 2012

Consolidated Balance Sheets at

September 29, 2012, and October 1, 2011
Consolidated Statements of Shareholders’ Equity
for the three years ended September 29, 2012

Consolidated Statements of Cash Flows

for the three years ended September 29, 2012

Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

Financial Statement Schedule - Schedule II Valuation and Qualifying

Accounts for the three years ended September 29, 2012

All other schedules are omitted because they are neither applicable nor required.

The exhibits filed with this report are listed in the Exhibit Index at the end of Item 15.

EXHIBIT INDEX
Exhibit No.

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

10.1

10.2

Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Annual
Report on Form 10-K for the fiscal year ended October 3, 1998, Commission File No. 001-14704, and
incorporated herein by reference).

Fourth Amended and Restated By-laws of the Company (previously filed as Exhibit 3.2 to the Company’s
Current Report on Form 8-K filed September 28, 2007, Commission File No. 001-14704, and incorporated
herein by reference).

Indenture dated June 1, 1995 between the Company and The Chase Manhattan Bank, N.A., as Trustee (the
“Company Indenture”) (previously filed as Exhibit 4 to Registration Statement on Form S-3, filed with the
Commission on December 18, 1997, Registration No. 333-42525, and incorporated herein by reference).

Form of 7.0% Note due January 15, 2028 issued under the Company Indenture (previously filed as Exhibit 4.2 to
the Company’s Quarterly Report on Form 10-Q for the period ended December 27, 1997, Commission File No.
001-14704, and incorporated herein by reference).

Form of 7.0% Note due May 1, 2018 issued under the Company Indenture (previously filed as Exhibit 4.1 to the
Company’s Quarterly Report on Form 10-Q for the period ended March 28, 1998, Commission File No.
001-14704, and incorporated herein by reference).

Form of 6.60% Senior Notes due April 1, 2016 issued under the Company Indenture (previously filed as Exhibit
4.1 to the Company’s Current Report on Form 8-K filed March 22, 2006, Commission File No. 001-14704, and
incorporated herein by reference).

Supplemental Indenture among the Company, Tyson Fresh Meats, Inc. and JPMorgan Chase Bank, National
Association, dated as of September 18, 2006, supplementing the Company Indenture (previously filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed September 19, 2006, Commission File No. 001-14704,
and incorporated herein by reference).

Supplemental Indenture dated as of September 15, 2008, between the Company and The Bank of New York
Mellon Trust Company, National Association (as successor to JPMorgan Chase Bank, N.A. (formerly The Chase
Manhattan Bank, N.A.)), as Trustee (including the form of 3.25% Convertible Senior Notes due 2013),
supplementing the Company Indenture (previously filed as Exhibit 4.2 to the Company’s Current Report on Form
8-K filed September 15, 2008, Commission File No. 001-14704, and incorporated herein by reference).

Indenture, dated March 9, 2009, among the Company, the Subsidiary Guarantors (as defined therein) and The
Bank of New York Mellon Trust Company, N.A., as Trustee (previously filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed March 10, 2009, Commission File No. 001-14704, and incorporated herein by
reference).

Form of 10.50% Senior Note due 2014 (previously filed as Exhibit 4.2 and included in Exhibit 4.1 to the
Company’s Current Report on Form 8-K filed March 10, 2009, Commission File No. 001-14704, and
incorporated herein by reference).

Supplemental Indenture dated as of June 13, 2012, between the Company and The Bank of New York Mellon
Trust Company, National Association (as successor to JPMorgan Chase Bank, N.A. (formerly The Chase
Manhattan Bank, N.A.)), as Trustee, supplementing the Company Indenture (previously filed as Exhibit 4.1 to
the Company's Current Report on Form 8-K filed June 13, 2012, Commission File No. 001-14704, and
incorporated herein by reference).

Form of 4.50% Senior Note due 2022 (Previously filed as Exhibit 4.2 and included in Exhibit 4.1 to the
Company's Current Report on Form
incorporated herein by reference).

filed June 13, 2012. Commission File No.

and

Amended and Restated Credit Agreement, dated as of March 9, 2009, as amended and restated as of February 23,
2011, among the Company, JPMorgan Chase Bank, N.A., as the Administrative Agent, and certain other lenders
party thereto (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed February
28, 2011, Commission File No. 001-14704, and incorporated herein by reference).

Second Amendment, dated June 4, 2012, to the Amended and Restated Credit Agreement dated as of March 9,
2009, as amended and restated as of February 23, 2011, among the Company, JPMorgan Chase Bank, N.A., as
the Administrative Agent, and certain other lenders party thereto (previously filed as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q filed August 6, 2012, Commission File No. 001-14704, and
incorporated herein).

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

Credit Agreement, dated as of August 9, 2012, among the Company, JPMorgan Chase Bank, N.A., as the
Administrative Agent, and certain other lenders party thereto (previously filed as Exhibit 10.1 to the Company's
Current Report on Form 8-K filed August 13, 2012, Commission File No. 001-14704, and incorporated herein by
reference).

Convertible note hedge transaction confirmation, dated as of September 9, 2008, by and between JPMorgan
Chase Bank, National Association and the Company (previously filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed September 15, 2008, Commission File No. 001-14704, and incorporated herein by
reference).

Warrant transaction confirmation, dated as of September 9, 2008, by and between JPMorgan Chase Bank,
National Association and the Company (previously filed as Exhibit 10.2 to the Company’s Current Report on
Form 8-K filed September 15, 2008, Commission File No. 001-14704, and incorporated herein by reference).

Letter Agreement, dated as of September 9, 2008, by and between JPMorgan Chase Bank, National Association
and the Company (previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed
September 15, 2008, Commission File No. 001-14704, and incorporated herein by reference).

Convertible note hedge transaction confirmation, dated as of September 9, 2008, by and between Merrill Lynch
Financial Markets, Inc. and the Company (previously filed as Exhibit 10.4 to the Company’s Current Report on
Form 8-K filed September 15, 2008, Commission File No. 001-14704, and incorporated herein by reference).

Warrant transaction confirmation, dated as of September 9, 2008, by and between Merrill Lynch Financial
Markets, Inc. and the Company (previously filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K
filed September 15, 2008, Commission File No. 001-14704, and incorporated herein by reference).

Letter Agreement, dated as September 9, 2008, by and between Merrill Lynch Financial Markets, Inc. and the
Company (previously filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed September 15,
2008, Commission File No. 001-14704, and incorporated herein by reference).

Agreement, dated as of October 3, 2010, between the Company and John Tyson (previously filed as Exhibit
10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2010, Commission
File No. 001-14704, and incorporated herein by reference).

Employment Agreement, dated August 27, 2012, by and between the Company and Curt T. Calaway.

Employment Agreement, dated November 14, 2012, by and between the Company and Donald J. Smith.

Employment Agreement, dated November 14, 2012, by and between the Company and James V. Lochner.

Employment Agreement, dated November 14, 2012, by and between the Company and David Van Bebber.

Employment Agreement, dated November 14, 2012, by and between the Company and Dennis Leatherby.

Employment Agreement, dated November 14, 2012, by and between the Company and Kenneth J. Kimbro.

Employment Agreement, dated November 14, 2012, by and between the Company and Donnie D. King.

Employment Agreement, dated November 14, 2012, by and between the Company and Noel W. White.

Indemnity Agreement, dated as of September 28, 2007, between the Company and John Tyson (previously filed
as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 28, 2007, Commission File No.
001-14704, and incorporated herein by reference).

Form of Indemnity Agreement between Tyson Foods, Inc. and its directors and certain executive officers
(previously filed as Exhibit 10(t) to the Company’s Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, Commission File No. 0-3400, and incorporated herein by reference).

Tyson Foods, Inc. Annual Incentive Compensation Plan for Senior Executives adopted February 4, 2005, and
reapproved February 5, 2010 (previously filed as Exhibit 10.34 to the Company’s Annual Report on Form 10-K
for the fiscal year ended October 1, 2005, Commission File No. 001-14704, and incorporated herein by
reference).

Amended and Restated Tyson Foods, Inc. Employee Stock Purchase Plan, effective as of October 1, 2008
(previously filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the fiscal year ended
September 27, 2008, Commission File No. 001-14704, and incorporated herein by reference).

First Amendment to the Tyson Foods, Inc. Employee Stock Purchase Plan, effective December 27, 2009
(previously filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended
October 3, 2009, Commission File No. 001-14704, and incorporated herein by reference).

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

Restated Executive Savings Plan of Tyson Foods, Inc. effective January 1, 2009 (previously filed as Exhibit
10.42 to the Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2008, Commission
File No. 001-14704, and incorporated herein by reference).

First Amendment to Executive Savings Plan of Tyson Foods, Inc. effective January 1, 2009 (previously filed as
Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the fiscal year ended October 3, 2009,
Commission File No. 001-14704, and incorporated herein by reference).

Second Amendment to Executive Savings Plan of Tyson Foods, Inc. effective May 1, 2010 (previously filed as
Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2010,
Commission File No. 001-14704, and incorporated herein by reference).

Third Amendment to the Executive Savings Plan of Tyson Foods, Inc. effective December 21, 2010 (previously
filed as Exhibit 10.27 to the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2011,
Commission File No. 001-14704, and incorporated herein by reference).

Amended and Restated Tyson Foods, Inc. 2000 Stock Incentive Plan effective November 19, 2004, First
Amendment to the Amended and Restated Tyson Foods, Inc. 2000 Stock Incentive Plan effective February 2,
2007, and Second Amendment to the Amended and Restated Tyson Foods, Inc. 2000 Stock Incentive Plan
effective August 13, 2007 (previously filed as Exhibit 10.43 to the Company’s Annual Report on Form 10-K for
the fiscal year ended September 27, 2008, Commission File No. 001-14704, and incorporated herein by
reference).

Third Amendment to the Tyson Foods, Inc. 2000 Stock Incentive Plan effective November 20, 2009 (previously
filed as Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the fiscal year ended October 3, 2009,
Commission File No. 001-14704, and incorporated herein by reference).

Amended and Restated Retirement Income Plan of IBP, inc. effective August 1, 2000, and Amendment to Freeze
the Retirement Income Plan of IBP, inc. effective December 31, 2002 (previously filed as Exhibit 10.46 to the
Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2008, Commission File No.
001-14704, and incorporated herein by reference).

Amended and Restated Tyson Foods, Inc. Supplemental Executive Retirement and Life Insurance Premium Plan
effective March 1, 2007, First Amendment to the Amended and Restated Tyson Foods, Inc. Supplemental
Executive Retirement and Life Insurance Premium Plan effective September 24, 2007, and Second Amendment
to the Amended and Restated Tyson Foods, Inc. Supplemental Executive Retirement and Life Insurance Premium
Plan effective January 1, 2008 (previously filed as Exhibit 10.47 to the Company’s Annual Report on Form 10-K
for the fiscal year ended September 27, 2008, Commission File No. 001-14704, and incorporated herein by
reference).

Third Amendment to the Amended and Restated Tyson Foods, Inc. Supplemental Executive Retirement and Life
Insurance Premium Plan effective November 17, 2011 (previously filed as Exhibit 10.32 to the Company's
Annual Report on Form 10-K for the fiscal year ended October 1, 2011, Commission File No. 001-14704, and
incorporated herein by reference).

Fourth Amendment to the Amended and Restated Tyson Foods, Inc. Supplemental Executive Retirement and Life
Insurance Premium Plan effective November 15, 2012.

Retirement Savings Plan of Tyson Foods, Inc. effective January 1, 2011 (previously filed as Exhibit 10.33 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2011, Commission File No.
001-14704, and incorporated herein by reference).

Form of Restricted Stock Agreement pursuant to which restricted stock awards were granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan prior to July 31, 2009 (previously filed as Exhibit 10.48 to the Company’s
Annual Report on Form 10-K for the fiscal year ended October 2, 2004, Commission File No. 001-14704, and
incorporated herein by reference).

Form of Restricted Stock Agreement pursuant to which restricted stock awards are granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan effective July 31, 2009 (previously filed as Exhibit 10.41 to the
Company’s Annual Report on Form 10-K for the fiscal year ended October 3, 2009, Commission File No.
001-14704, and incorporated herein by reference).

Form of Restricted Stock Agreement pursuant to which restricted stock awards are granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan effective January 1, 2010 (previously filed as Exhibit 10.41 to the
Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2010, Commission File No.
001-14704, and incorporated herein by reference).

Form of Stock Incentive Agreement with key employees and contracted employees at band level 3-9 pursuant to
which restricted stock awards are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective
October 26, 2012.

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

12.1

14.1

Form of Stock Incentive Agreement with the remaining contracted employees pursuant to which restricted stock
awards are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective October 26, 2012.

Form of Stock Option Grant Agreement pursuant to which stock option awards were granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan prior to July 31, 2009 (previously filed as Exhibit 10.49 to the Company’s
Annual Report on Form 10-K for the fiscal year ended October 2, 2004, Commission File No. 001-14704, and
incorporated herein by reference).

Form of Stock Option Grant Agreement pursuant to which stock option awards are granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan effective July 31, 2009 through February 3, 2010 (previously filed as
Exhibit 10.43 to the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2010,
Commission File No. 001-14704, and incorporated herein by reference).

Form of Stock Option Grant Agreement pursuant to which stock option awards are granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan effective February 4, 2010 (previously filed as Exhibit 10.44 to the
Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2010, Commission File No.
001-14704, and incorporated herein by reference).

Form of Stock Option Grant Agreement with non-contracted employees pursuant to which stock option awards
are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective November 29, 2010 (previously filed
as Exhibit 10.40 to the Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2011,
Commission File No. 001-14704, and incorporated herein by reference).

Form of Stock Option Grant Agreement with contracted employees at band level 1-5 pursuant to which stock
option awards are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective November 29, 2010
(previously filed as Exhibit 10.41 to the Company's Annual Report on Form 10-K for the fiscal year ended
October 1, 2011, Commission File No. 001-14704, and incorporated herein by reference).

Form of Stock Option Grant Agreement with key employees and contracted employees at band level 6-9 pursuant
to which stock option awards are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective
November 29, 2010 (previously filed as Exhibit 10.42 to the Company's Annual Report on Form 10-K for the
fiscal year ended October 1, 2011, Commission File No. 001-14704, and incorporated herein by reference).

Form of Stock Option Grant Agreement with non-contracted employees pursuant to which stock option awards
are granted under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective November 28, 2011.

Form of Stock Incentive Agreement pursuant to which stock options are granted to contracted employees under
the Tyson Foods, Inc. 2000 Stock Incentive Plan effective October 26, 2012.

Form of Stock Incentive Agreement pursuant to which stock options are granted to non-contracted employees
under the Tyson Foods, Inc. 2000 Stock Incentive Plan effective October 26, 2012.

Form of Performance Stock Award Agreement pursuant to which performance stock awards are granted under the
Tyson Foods, Inc. 2000 Stock Incentive Plan effective October 4, 2010 (previously filed as Exhibit 10.44 to the
Company's Annual Report on Form 10-K for the fiscal year ended October 1, 2011, Commission File No.
001-14704, and incorporated herein by reference).

Form of Performance Stock Award Agreement pursuant to which performance stock awards are granted under the
Tyson Foods, Inc. 2000 Stock Incentive Plan effective October 3, 2011.

Form of Stock Incentive Agreement pursuant to which performance stock awards are granted under the Tyson
Foods, Inc. 2000 Stock Incentive Plan effective October 26, 2012.

Tyson Foods, Inc. Severance Pay Plan for Contracted Employees, effective October 31, 2012.

Calculation of Ratio of Earnings to Fixed Charges

Code of Conduct of the Company (previously filed as Exhibit 14.1 to the Company's Annual Report on Form 10-
K for the fiscal year ended October 1, 2011, Commission File No. 001-14704, and incorporated herein by
reference).

Subsidiaries of the Company

Consent of PricewaterhouseCoopers, LLP

31.1

31.2

32.1

32.2

101

Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

The following financial information from our Annual Report on Form 10-K for the year ended September 29,
2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii)
Consolidated Balance Sheets, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated
Statements of Cash Flows, (v) the Notes to Consolidated Financial Statements, and (vi) Financial Statement
Schedule.

Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

TYSON FOODS, INC.

By:

/s/ Dennis Leatherby
Dennis Leatherby
Executive Vice President and Chief

Financial Officer

November 19, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons

on behalf of the registrant and in the capacities and on the date indicated.

/s/ Kathleen M. Bader

Kathleen M. Bader

/s/ Guardie E. Banister Jr.

Gaurdie E. Banister Jr.

/s/ Curt T. Calaway

Curt T. Calaway

/s/ Jim Kever

Jim Kever

/s/ Dennis Leatherby

Dennis Leatherby

/s/ Kevin M. McNamara

Kevin M. McNamara

/s/ Brad T. Sauer

Brad T. Sauer

/s/ Donnie Smith

Donnie Smith

/s/ Robert C. Thurber

Robert C. Thurber

/s/ Barbara A. Tyson

Barbara A. Tyson

/s/ John Tyson

John Tyson

/s/ Albert C. Zapanta

Albert C. Zapanta

Director

November 19, 2012

Senior Vice President, Controller and

November 19, 2012

Chief Accounting Officer

Director

November 19, 2012

Executive Vice President and Chief Financial Officer

November 19, 2012

Director

November 19, 2012

President and Chief Executive Officer

November 19, 2012

Director

November 19, 2012

Chairman of the Board of Directors

November 19, 2012

Director

November 19, 2012

FINANCIAL STATEMENT SCHEDULE
TYSON FOODS, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS

Three Years Ended September 29, 2012

Additions

Balance at
Beginning
of Period

Charged to
Costs and
Expenses

Charged to
Other Accounts

(Deductions)

Balance at End
of Period

in millions

—

— $

—

— $

—

— $

—

(5) $
(4)
(1)

(34) $
(8)
(27)

(30) $
(20)
(6)

Allowance for Doubtful

Accounts:

2012

2011

2010

Inventory Lower of Cost or

Market Allowance:

Valuation Allowance on
Deferred Tax Assets:

2012

2011

2010

2012

2011

2010