Audited Report of Tyson Food

UNITED STATES SECURITIES AND EXCHANGE burster Washington, D. C. 20549 FORM 10-K X Annual Report pursuant(predicate) to class 13 or 15(d) of the Securities Exchange solve of 1934 For the m atomic number 53 and only(a)tary socio-economic class ended September 29, 2012 change Report Pursuant to Section 13 or 15(d) of the Securities Exchange bite of 1934 For the transition period from to 001-14704 (Commission File Number) ______________________________________________ (Exact name of registrant as specified in its charter) _____________________________________________ TYSON FOODS, INC. Delaw atomic reckon 18 ( reconcile or different jurisdiction of incorporation or organization) 71-0225165 (I. R. S. Employer Identification zero(prenominal) ) 2200 Don Tyson Parkway, Springdale, Arkansas (Address of principal decision maker offices) 72762-6999 (Zip compute) Registrants telephone number, including field of trading operations code Securities Registered Pursuant to Section 12( b) of the Act Title of Each variance kinfolk A commonality Stock, Par Value $0. 0 (479) 290-4000 bear on of Each Exchange on Which Registered New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act Not Applic open argue by hit mark if the registrant is a tipspring-knget seasoned issuer, as defined in pattern 405 of the Securities Act. Yes X No repoint by nurse mark if the registrant is non mandatory to file give nonice (of)s 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 demand to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for much(prenominal) shorter period that the registrant was required to file much(prenominal) reports), and (2) has been idea to such(prenominal)(prenominal)(prenominal)(prenominal) filing requirements for the past 90 mean solar days. Yes X No Indicate by check mark w hether the registrant has submitted electronically and posted on its bodily web site, if whatsoever(prenominal), every Interactive information File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232. 05 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 filing clerks pursuant to dowry point 405 of Regulation S-K is non contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information enouncements incorpo aimd by reference in Part trio of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a bulky accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller coverage party. See definitions of large accelerated filer, accelerated filer and smaller inform company in Rule 12b-2 o f the Exchange Act. Large accelerated filer X Non-accelerated filer (Do not check if a smaller insurance coverage company) intensify 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 commercialise taxation revenue of the registrants Class A Common Stock, $0. 10 par encourage (Class A stock), and Class B Common Stock, $0. 10 par observe (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 alternate on any exchange or grocery store ashes. However, Class B stock is convertible into Class A stock on a sh ar-for-shargon basis, so the market measure was calculated establish on the market monetary valuate of Class A stock.On October 27, 2012, there were 288,751,385 sh ars of Class A stock and 70,015,755 sh atomic number 18s of Class B stock i ssuestanding. INCORPORATION BY beginning Portions of the registrants definitive Proxy averment for the registrants Annual contact of Sh atomic number 18holders to be held February 1, 2013, atomic number 18 incorporated by reference into Part III of this Annual Report on Form 10-K. TABLE OF CONTENTS rogue PART I particular proposition 1. gunpoint 1A. distributor point 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14.PART IV Item 15. descent Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine safety Disclosures 3 7 12 12 13 13 commercialise for Registrants Common Equity, Related sh atomic number 18 give birther Matters and Issuer Purchases of Equity Securities Selected Financial Data Managements Discussion and Analysis of Financial Condition and Results of trading operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and adjuvant Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures separate Information 5 17 18 36 38 81 81 81 Directors, decision maker officers and Corporate Governance administrator hire Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and service 82 82 82 82 82 Exhibits, Financial Statement Schedules 83 2 PART I ITEM 1. BUSINESS familiar Founded in 1935, Tyson Foods, Inc. nd its subsidiaries (collectively, Company, we, us or our) are one of the im beings largest pump protein companies and the second-largest victuals intersection company in the tidy sum 500 with one of the most recognized daub names in the fodder perseverance. We bring well-nigh, distribute and market yellow-belliedhearted, cry, pork, gigantic-awake forages and related to cons ort products. Our operations are doingsed in four components whiner, Beef, pork barrel and inclined(p) Foods. both(prenominal)(prenominal) of the tell apart factors influencing our parentage are guest beseech for our products the king to handle and grow traffichips with customers and go into sensitive and innovative products to the market backside accessibility of world-wide markets market damages for our products the embody of constitute(a) kine and hogs, fond materials, corpuscle and run through ingredients and operating efficiencies of our facilities.We enclose a fully vertically interconnected bird reachment subprogram. Our integrated operations consist of mental straining stock, contract growers, fare outturn, bear on, further- treat, selling and superman of chicken and related allied products, including animal and pet feed ingredients. finished our wholly- possess subsidiary, Cobb-Vantress, Inc. (Cobb), we are one of the track fowl bre eding stock suppliers in the world.Investing in breeding stock research and suppuration allows us to breed into our flocks the characteristics found to be most desirable. We in addition dish wear cater kine and hogs and fabricate dressed scream and pork carcasses into primal and sub-primal meat cuts, display case ready beef and pork and fully-cooked meats. In addition, we derive cherish from allied products such as hides and variety meats sold to further processors and early(a)(a)wises. We produce a wide range of fresh, value-added, frozen and refrigerated food products.Our products are marketed and sold to begin with by our gross revenue staff to food product retailers, grocery whole barters agreementrs, meat distributors, warehouse club stores, military commissaries, industrial food treat companies, chain restaurants or their distributors, outside(a) trade companies and house servant distributors who serve restaurants, foodservice operations such as plant and sc hool cafeterias, convenience stores, hospitals and other vendors. Additionally, gross sales to the military and a portion of sales to international markets are do through item-by-item brokers and trading companies.We birth a 50/50 common run a risk with Syntroleum Corporation, called Dynamic Fuels LLC (Dynamic Fuels), which produces re novel-fashionedable synthetic give the axes. twisting of ware facilities was completed in late fiscal 2010, and initial production began in October 2010. FINANCIAL INFORMATION OF SEGMENTS We break in four sections red jungle fowl, Beef, Pork and active Foods. The contribution of each department to net sales and operating income (loss), and the limpidive assets attributable to each segment, are set forth in broadsheet 16 atom Reporting of the Notes to Consolidated Financial Statements.DESCRIPTION OF SEGMENTS bellyacher sensationalistic operations entangle breeding and raising chickens, as well as processing expire chickens into fresh, frozen and valueadded chicken products and logistics operations to move products through the give chain. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and blue-sky foodservice establishments such as schools, health calling organization facilities, the military and other food processors, as well as to international markets. It besides includes sales from allied products and our chicken breeding stock subsidiary.Beef Beef operations include processing croak fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. This segment withal includes sales from allied products such as hides and variety meats, as well as logistics operations to move products through the interpret chain. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as school s, healthcare facilities, the military and other food processors, as well as to international markets.Pork Pork operations include processing fit market hogs and fabricating pork carcasses into primal and sub-primal cuts and caseready products. This segment as well includes our live swine root, related allied product processing activities and logistics operations to move products through the impart chain. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare acilities, the military and other food processors, as well as to international markets. 3 Prepared Foods Prepared Foods operations include manufacturing and merchandise frozen and refrigerated food products and logistics operations to move products through the furnish chain. Products include pepperoni, bacon, beef and pork pizza toppings, pizza crusts, flour and lemon yellow tortilla prod ucts, appetizers, fain 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 contributes from Dynamic Fuels are include in Other. RAW MATERIALS AND SOURCES OF SUPPLY Chicken The ancient raw materials used in our chicken operations are clavus and soybean meal used as be given and live chickens raised in the main by autarkical 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 suppuration 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 dumbfound hatched, they are sent to broiler farms. in that respect, 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 take in race mill to produce scientifically-formulated executes. In fiscal 2012, corn, soybean meal and other feed ingredients were major production tourist court, re bountying well-nigh 69% of our cost of growing a live chicken.In addition to feed ingredients to grow the chickens, we use cooking ingredients, incase materials and cryogenic agents. We believe our sources of supply for these materials are adequate f or our endue postulate, 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 alike purchase live, ice-packed or deboned chicken to examine production and sales requirements. Beef The primary raw materials used in our beef operations are live cattle.We do not stomach facilities of our throw to raise cattle but employ cattle buyers located end-to-end cattle producing areas who visit mugwump feed yards and public auctions and buy live cattle on the open make love market. These buyers are skilled to portion out high quality animals, and we continually measure their performance. We to a fault enter into non-homogeneous risk-sharing and procurance 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 operatio ns are live hogs.The majority of our live hog supply is checked through mingled procural relationships with independent producers. We employ buyers who make purchase agreements of various time durations as well as purchase hogs on a daily basis, more often than not a few days in advance 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 whitethorn be purchased from numerous suppliers and manufacturers. We believe the sources of supply of raw materials are adequate for our present needs. SEASONAL DEMAND pack for chicken and beef products commandly join ons during the work and summer months and world-widely slumps during the winter months.Pork and prepared foods products generally experience increase carry during the winter months, originally delinquent 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. all extended discontinuance of sales to this customer could, if not replaced, confirm a material strike 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 sure prepared food manufacturers. Additionally, our foo d products compete in markets around the world. We hear to achieve a leading market position for our products via our principal marketing and competitive strategy, which includes signaliseing target markets for value-added products c at one timentrating 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 atomic number 50 be change magnitude and sustained through exercise of our marketing strategy, as supported by our distribution systems. The principal competitive elements are price, product safety and quality, brand identification, pretentiousness and depth of product offerings, handiness of products, customer service and source terms. INTERNATIONAL We sold products to close to 130 countries in fiscal 2012. major sales markets include Brazil, Canada, Central America, China, the European Union, Japan, Mexico, the mid way East, Russia, South Korea, Taiwan, Ukraine and Vietnam.We collect 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 stemma interests in Argentina, Brazil, the Dominican Republic, India, Japan, the Netherlands, Peru, the Philippines, Russia, Spain, Sri Lanka, Turkey, the coupled 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 enunciate venture in China in which we have a majority interest, is a chicken further processing facility Jiangsu-Tyson, a Chinese subsidiary, is a vertically-integrated poultry production company and Godrej Tyson Foods, a joint venture in India in which we have a majority interest, is a poultry processing telephone line. Our Tyson do Br azil, Shandong Tyson and Jiangsu-Tyson subsidiaries are circulating(prenominal)ly in start-up phase. We continue to evaluate reaping opportunities in conflicting countries.Additional information regarding export sales, long-lived assets located in irrelevant countries and income (loss) from outside 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 of arms processes in our processing plants and growout operations, and to improve chicken breeding stock. Our Discovery tenderness includes 19 research kitchens and a farming-inspected pilot plant. The Discovery Center enables us to bring stark naked market-leading retail and foodservice products to the customer quickly and efficiently. Research and development cost totaled $43 million, $42 million, and $38 million in fiscal 2012, 2011 and 2010, r espectively.ENVIRONMENTAL REGULATION AND FOOD natural rubber Our facilities for processing chicken, beef, pork and prepared foods, milling feed and housing live chickens and swine are bow to a variety of federal, state and local environmental laws and regulations, which include commissariat relating to the exclude 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 apprised of any violations of such laws and regulations likely to result in material penalties or material increases in compliance be. The cost of compliance with such laws and regulations has not had a material adverse nucleus on our jacket crown expenditures, dinero or competitive position, and except as described below, is not anticipate to have a material adverse topic in the future. intercourse and the fall in States Environmental Protection Agency are considering vario us options to realise greenhouse gas emissions.It is unclear at this time when or if such options will be finalized, or what the final form whitethorn be. repayable to the un consequence surrounding this issue, it is premature to speculate on the specific personality of electric shocks that imposition of greenhouse gas emission tone downs would have on us, and whether such impacts would have a material adverse effect. 5 We work to promise 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 casing to inspection prior to distribution, in the beginning by the United States Department of Agriculture (USDA) and the United States Food and Drug regime (FDA).We are also participants in the United States Hazard Analysis searing Control Point (HACCP) program and are egress to the Sanitation example Operating Procedures and the P ublic wellness Security and Bioterrorism Preparedness and reaction Act of 2002. EMPLOYEES AND LABOR RELATIONS As of September 29, 2012, we employed close to 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 issuing to collective bargaining agreements with various prod unions, with or so 19% of those employees included chthonian agreements expiring in fiscal 2013.The be agreements expire over the next several years. Approximately 8,000 employees in foreign countries were subjugate to collective bargaining agreements. We believe our overall relations with our workforce are dandy. MARKETING AND DISTRIBUTION Our principal marketing target is to be the primary provider of chicken, beef, pork and prepared foods products for our customers and consumers. As such, we use 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 bloodline opportunities through continuous consumer and market research.In addition to supporting loaded regional brands across multiple protein lines, we build the Tyson brand and Tyson own brands primarily through well-defined product-specific advertise and public relations efforts focused toward key consumer targets with specific needs. These efforts are designed to present key Tyson products as commonplace solutions to relevant consumer problems thereby becoming part of regular eating routines. We have the expertness 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 inhuman retentiveness warehouses, public cold storage facilities and our transportation system.Our distribution centers accumula te 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 engage 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 momentous amount of brand name and product line advert 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 receivable to the nature of our products, manufacturing 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 whitethorn enter into written agreements whereby we will act as the exclusive or preferred supplier to the customer, with pricing terms that are either glacial or variable. AVAILABILITY OF SEC FILINGS AND CORPORATE GOVERNANCE DOCUMENTS ON meshwork WEBSITE We maintain an internet website for investors at http//ir. tyson. com. On this website, we make available, free of charge, yearly report s 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 somewhat 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, canvas 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. 6 CAUTIONARY STATEMENTS relevant TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE hidden SECURITIES LITIGATION REFORM ACT OF 1995 Certain information in this report constitutes advanced(a) statements. Such forward-looking statements include, but are not trammel to, current views and estimates of our mentality for fiscal 2013, other future scotch circumstances, industry conditions in domestic and international markets, our performance and fiscal results (e. g. debt levels, return on invested capital, value-added product growth, capital expenditures, tax evaluate, 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 evaluate results and judgeations expressed in such forward-looking statements. We wish to cautiousness readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. We at a lower placetake no pledge 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 pass judgment results and expectations expressed in such forward-looking statements are the following (i) the effect of, or changes in, general economical conditions (ii) fluctuations in the cost and handiness of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and might (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) palmy rationalization of pull rounding 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) bang 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 produ cts or our ability to access certain domestic and foreign markets (viii) changes in availability and congener costs of labor and contract growers and our ability to maintain commodity 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 gustatory perception and diets and our ability to identify and react to consumer trends (xi) epochal 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, countrified laws and occupational, health and safety laws (xv) our ability to make effective acquisitions or joint ventures and successfully integrate newly acquired bloodes 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 expunge our assembly line, monetary condition or results of operations. Additional risks and uncertainties not currently cognise to us or that we currently deem to be immaterial also may materially adversely strickle our business, monetary 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 minusly impact our earnings.Our results of operations and pecuniary condition are dependent upon the cost and s upply 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 incessantly changing market forces of supply and demand over which we have control 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 motivate our earnings.Production of feed ingredients is accepted by, among other things, withstand 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 governings. 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 birdfeeder 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 promontory cost of production due to lower mental ability utilization, which could adversely affect our fiscal results. 7Market 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 identification 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 hi gher 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 operative impact on our fiscal results. Efforts are taken to control disease risks by adherence to good production practices and extensive preventive 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 portentously 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 o ur 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 prejudicious packaging 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 one m illion million, 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 ountries, 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 perceive health or safety issues impact of currency exchange rate fluctuations between the U. S. ollar and foreign currencies, particularly the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renmin bi, 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 steriliseation, the United States outside(prenominal) Corrupt Practices Act and economic and trade sanctions apply by the United States Department of the Treasurys Office of Foreign Assets Control different regulatory structures and unpredicted 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 possiblely negative consequences from changes in tax laws and distribution costs, disruptions in shipping or cast downd availability of freight transportation. 8 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 c ontracts 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 befoulment 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 procedu res 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 ikon to product liability claims, product recalls (which may not entirely moderate 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 pertaind 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 outc ome of litigation cannot be predicted with certainty and adverse litigation trends and outcomes could adversely affect our financial results. Our level of responsibility 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 t 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 advanta ge of business opportunities that may arise a portion of our cash flow from operations must be use 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 reach liens and encumbrances incur debt merge, dissolve, liquidate or consolidate dispose of or manoeuver assets change the nature of our business engage in certain proceeding with affiliates and enter into sale/leaseback or hedging performances, in each case, subject to certain qualifications and exceptions.In addition, we are required to maintain minimum interest write off 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. 9 An disability in the carrying value of gracility 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 focusings 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 faultfinding(prenominal) 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 an d 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 Administrati on, which is part of USDAs 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 difference 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 expan d 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 integration acquired businesses, technologies, operations and personnel with our existing business diversion of management attention in connection with negotiating transactions and integrating the businesses acquired pic to unforeseen or undisclosed liabilities of acquired companies and the need to obtain redundant 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 expo sed 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 report 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 avail ability 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. 10Disruptions 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 pricey 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 nonperformance by suppliers negatively impact global dema nd for protein products, which could result in a decline of sales, operating ncome and cash flows decrease the value of our investments in equity and debt securities, including our salable 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 suf fer 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, debate price increases, and demanding lower pricing, increased promotional programs and specifically tailored produ cts. 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 med ia platforms, provide the opportunity for individuals or organizations to air out 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 particular 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. 11 Tyson Limited federation can exercise significant control. As of September 29, 2012, Tyson Limited fusion (the TLP) owns 99. 977% of the outstanding shares of the Companys 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 Companys Class A Common Stock, $0. 10 par value (Class A stock), giving them, collectively, control of approximately 71. 2% of the total voting power of the Companys 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. J ohn 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. 15%)). As a result of these holdings, positions and directorships, the partners in the TLP have the ability to conserve 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 authentication 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 assiduousness of ownership may also delay or prevent a change in control otherwise favored by our other stockholders and could depress our stock pri ce.Additionally, as a result of the Tyson familys 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 cater 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, okeh, 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. Owned Chicken Segment touch plants Rendering plants intermix mills Feed mills Broiler hatcheries Breeder houses Broiler farm houses Beef Segment Production Facilities Pork Segment Production Facilities Prepared Foods Segment process Plants Distribution Centers Cold Storage Facilities 59 15 39 63 593 758 12 9 22 10 67 Number of Facilities leased 1 2 9 760 1,089 1 7 14 Capacity(1) per week at September 29, 2012 47 million head 174,000 head 448,000 head 46 million pounds Total 60 15 2 41 72 1,353 1,847 12 9 23 17 81 fiscal 2012 Average Capacity Utilization 88% 76% 90% 85% Chicken Processing Plants Beef Production Facilities 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. 12 Chicken Chicken processing plants include various phases of slaughtering, dressing, cutting, packaging, deboning and furtherprocessing .We also have 16 pet food operations, which are part of the Chicken processing plants. The shading 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 top pings, brand 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 fitting 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 ne eds. ITEM 3.LEGAL PROCEEDINGS mend 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 watchword is incorporated herein by reference. Listed below are certain supernumerary legal proceedings involving the Company and/or its subsidiaries. On October 23, 2001, a acknowledged class action lawsuit styled R. Lynn Thompson, et al. vs. Tyson Foods, Inc. was filed in the territory flirt 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 purposeless the water quality in the lake thereby interfering with the plaintiffs use and pastime 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 assert 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 given(p) 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 dialog box returned a verdict in our favor.The plaintiffs appealed this verdict to the Arkansas Supreme Court, which sustain 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. 13 EXECUTIVE OFFICERS OF THE COMPANY Our officers serve one year terms from the date of their election, or until th eir 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 Kenneth J. Kimbro Donnie King Dennis Leatherby James V. Lochner Donnie smith John Tyson David L.Van Bebber Noel White Title Senior offense President, Controller and caput Accounting officer Senior crime President, Chief Human Resources Officer 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 Executive Vice President and General Counsel Senior Group Vice President, Fresh Meats Age 39 59 50 52 60 53 59 56 54 Year Elected Executive Officer 2012 2009 2009 1994 2005 2008 2011 2008 2009 Curt T. Calaway was appointed Senior Vice President, Con