Tyson Foods 2008 Annual Report Download - page 5

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Q: What is the Tyson Discovery Center, and how is it
contributing to the bottom line?
A: The Discovery Center is our state-of-the-art research
and development facility, and it plays a vital role in our
strategy to create innovative and insight-driven food
solutions. It is the place where our team members
develop and test new product ideas and where we
collaborate with our customers to create products,
menu ideas and strategies to build their businesses and
ours. We must be doing something right, because for
the sixth consecutive year, Tyson won the Cannondale
and Cognitio awards. Cannondale identifi es the elite
manufacturers and operators as evaluated by their
trading partners. Cognitio identifi es the manufacturer
that did the best job of bringing new products to
foodservice operators. As for contributing to the
bottom line, since the Discovery Center opened in
March 2007, cumulative sales from new products
were $963 million.
Q: If you have the Discovery Center to grow your
value-added business, what are you doing for your
commodity businesses?
A: Our commodity beef and pork businesses performed
very well in 2008. Pork had its best year ever, with a
7.8% operating margin. Beef has made a tremendous
turnaround. It went from a loss of $254 million in 2006
to a $106 million profi t in 2008. We accomplished
this by keeping costs down as much as possible
and driving ineffi ciencies out of our operations – in
other words, hard work and diligence. We’re making
similar improvements in our chicken business and
have invested capital in several of our plants to make
them more effi cient and fl exible. We’re reducing
the amount of chicken we move between plants for
further processing, and we’re identifying and refi ning
processes to reduce our cost of goods.
Sales
in billions
$24.6
2006 2007 2008
$25.7 $26.9
Tyson achieved record sales in 2008.
Total Debt
in millions
2006 2007 2008
$3,979*
$2,779 $2,896
Debt increased slightly, although
it is still near its lowest level since
the IBP acquisition in 2001.
*Total debt was $3.2 billion in 2006 when adjusted for a $750 million short-term investment held on deposit for payment of Notes due the fi rst day of fi scal 2007.
The beef and pork segments kept
Tyson profi table in 2008 despite a
$118 million loss in the chicken segment.
Operating Income (Loss)
in millions
2006 2007 2008
$(50)
$613
$331
3 2008 Annual Report