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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(X)    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2003

        OR

(  )    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

 

For the transition period from _________to________

0-3400
(Commission File Number)


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

Delaware

71-0225165

(State or other jurisdiction
 of incorporation or organization)

(I.R.S. Employer Identification No.)

  2210 West Oaklawn Drive, Springdale, Arkansas

72762-6999

(Address of principal executive offices)

(Zip Code)

                                              (479) 290-4000

                                              (Registrant's telephone number, including area code)
 

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 a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):  Yes [X]  No [  ].

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of  December 27, 2003.

Class Outstanding Shares

Class A Common Stock, $0.10 Par Value

250,944,943

Class B Common Stock, $0.10 Par Value

101,634,548

 

TYSON FOODS, INC.
INDEX

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

PAGE

Consolidated Condensed Statements of Income
for the Three Months Ended
December 27, 2003 and December 28, 2002



3
     

Consolidated Condensed Balance Sheets
December 27, 2003 and September 27, 2003


4
     

Consolidated Condensed Statements of Cash Flows
for the Three Months Ended
December 27, 2003 and December 28, 2002



5
     

Notes to Consolidated Condensed Financial Statements

6
   

Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations

25

Item 3.  Quantitative and Qualitative Disclosure About Market Risks

30

Item 4.  Controls and Procedures

30

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

31

Item 2.  Changes in Securities and Use of Proceeds

32

Item 3.  Defaults Upon Senior Securities

32

Item 4.  Submission of Matters to a Vote of Security Holders

32

Item 5.  Other Information

32

Item 6.  Exhibits and Reports on Form 8-K

32

EXHIBIT INDEX

33

SIGNATURES

34

2

Table of Contents

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

TYSON FOODS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)

 

Three Months Ended

December 27,
2003

 

December 28,
2002

Sales

$

6,505

 

$

5,802

Cost of Sales

6,111

 

5,402

394

 

400

Selling, General and Administrative

208

 

208

Other Charges

25

 

47

 

Operating Income

161

 

145

Other Expense:

 

    Interest

69

 

79

    Other

3

 

5

72

 

84

 

Income Before Income Taxes

89

 

61

Provision for Income Taxes

32

 

22

Net Income

$

57

 

$

39

 

Weighted Average Shares Outstanding:

 

   Basic

345

 

347

  Diluted

356

 

354

Earnings Per Share:

 

   Basic

$

0.17

 

$

0.11

   Diluted

$

0.16

 

$

0.11

 

Cash Dividends Per Share:

 

   Class A

$

0.040

 

$

0.040

   Class B

$

0.036

 

$

0.036

 

 

See accompanying Notes to Consolidated Condensed Financial Statements.

 

 

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Table of Contents

TYSON FOODS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions, except per share data)

(Unaudited)

 

 

December 27,
2003

September 27,
2003

Assets

Current Assets:

    Cash and cash equivalents

$

40 

 

$

25 

    Accounts receivable, net

1,266 

1,280 

    Inventories

1,977 

1,994 

    Other current assets

97 

72 

Total Current Assets

3,380 

3,371 

Net Property, Plant and Equipment

4,051 

4,039 

Goodwill

2,561 

2,652 

Intangible Assets

180 

182 

Other Assets

247 

242 

Total Assets

$

10,419 

 

$

10,486 

 

Liabilities and Shareholders' Equity

Current Liabilities:

    Current debt

$

408 

 

$

490 

    Trade accounts payable

991 

838 

    Other current liabilities

1,024 

1,147 

Total Current Liabilities

2,423 

2,475 

Long-Term Debt

3,082 

3,114 

Deferred Income Taxes

676 

722 

Other Liabilities

225 

221 

Shareholders' Equity:

    Common stock ($0.10 par value):

        Class A-authorized 900 million shares:
          issued 267 million shares at December 27, 2003
          and September 27, 2003

27 

27 

        Class B-authorized 900 million shares:
          issued 102 million shares at December 27, 2003
          and September 27, 2003

10 

10 

    Capital in excess of par value

1,860 

1,861 

    Retained earnings

2,423 

2,380 

    Accumulated other comprehensive loss

- 

(15)

4,320 

4,263 

    Less treasury stock, at cost-
      16 million shares at December 27, 2003
      and September 27, 2003

253 

252 

    Less unamortized deferred compensation

54 

57 

Total Shareholders' Equity

4,013 

3,954 

Total Liabilities and Shareholders' Equity

$

10,419 

 

$

10,486 

See accompanying Notes to Consolidated Condensed Financial Statements.

4

Table of Contents

TYSON FOODS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

Three Months Ended

December 27,
2003

 

December 28,
2002

Cash Flows From Operating Activities:

 

    Net income

$

57 

 

$

39 

    Depreciation and amortization

119 

 

116 

    Plant closing-related charges

22 

 

45 

    Deferred income taxes and other

(65)

 

(31)

    Net changes in working capital

128 

 

(124)

Cash Provided by Operating Activities

261 

 

45 

 

Cash Flows From Investing Activities:

 

    Additions to property, plant and equipment

(124)

 

(100)

    Proceeds from sale of assets

3 

 

7 

    Net change in other assets and liabilities

2 

 

11 

Cash Used for Investing Activities

(119)

 

(82)

 

Cash Flows From Financing Activities:

 

    Net change in debt

(114)

 

86 

    Purchase of treasury shares

(9)

 

(15)

    Dividends and other

(7)

 

(15)

Cash Provided by (Used for) Financing Activities

(130)

 

56 

Effect of Exchange Rate Change on Cash

3 

 

6 

 

Increase in Cash and Cash Equivalents

15 

 

25 

Cash and Cash Equivalents at Beginning of Period

25 

 

51 

Cash and Cash Equivalents at End of Period

$

40 

$

76 

 

 

See accompanying Notes to Consolidated Condensed Financial Statements.

 

 

5

Table of Contents

TYSON FOODS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Note 1:   ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated condensed financial statements have been prepared by Tyson Foods, Inc. (the Company), and are unaudited, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations.  Although the management of the Company believes that the disclosures contained herein are adequate to make the information presented not misleading, these consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K/A for the fiscal year ended September 27, 2003.  The preparation of consolidated condensed financial statements requires management 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.

Management believes the accompanying consolidated condensed financial statements contain all adjustments, including normal recurring accruals, adjustments related to plant closings as disclosed in note 2 and bovine spongiform encephalopathy (BSE) related charges as disclosed in note 3, necessary to present fairly the financial position as of December 27, 2003, and the results of operations and cash flows for the three months ended December 27, 2003 and December 28, 2002.  The results of operations and cash flows for the three months ended December 27, 2003 and December 28, 2002 are not necessarily indicative of the results to be expected for the full year.

STOCK OPTIONS

On December 29, 2002, the Company adopted Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" (SFAS 148).  SFAS 148, which amended FASB Statement No. 123, "Accounting for Stock-Based Compensation," does not require use of the fair value method of accounting for stock-based employee compensation.  The Company applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its employee stock option plans.  Accordingly, no compensation expense was recognized for its stock option plans.  Had compensation cost for the employee stock option plans been determined based on the fair value method of accounting for the Company's stock option plans, the tax-affected impact would be as follows (in millions, except per data):

 

6