Tyson Foods 2009 Annual Report Download - page 12

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The loss of one or more of our largest customers could negatively impact our business.
Our business could suffer significant set backs in sales and operating income if our customers’ plans and/or markets should 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 2009. Many of our agreements with our customers are generally 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.
Our renewable energy ventures and other initiatives might not be as successful as we expect.
We have been exploring ways to commercialize animal fats and other by-products from our operations, as well as the poultry litter of
our contract growers, to generate energy and other value-added products. For example, in fiscal 2007, we announced the formation of
Dynamic Fuels LLC, a joint venture with Syntroleum Corporation. 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 would expect due to factors that include, but are not limited to,
possible discontinuance 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.
Members of the Tyson family can exercise significant control.
Members of the Tyson family beneficially own, in the aggregate, 99.97% of our outstanding shares of Class B Common Stock, $0.10
par value (Class B stock) and 2.36% of our outstanding shares of Class A Common Stock, $0.10 par value (Class A stock), giving
them control of approximately 70% of the total voting power of our outstanding voting stock. In addition, three members of the Tyson
family serve on our Board of Directors. As a result, members of the Tyson family 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 have relied on the “controlled company”
exemption from certain corporate governance requirements of the New York Stock Exchange. Pursuant to these exemptions, our
compensation committee, which is made up of independent directors, does not have sole authority to determine the compensation of
our executive officers, including our chief executive officer.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
We have sales offices and production and distribution operations in the following states: Alabama, Arizona, Arkansas, California,
Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Mississippi, Missouri, Nebraska, New Jersey, New Mexico,
New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington and
Wisconsin. 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, Ireland, Italy, Japan, Mexico, the
Netherlands, Peru, the Philippines, Russia, South Korea, Spain, Sri Lanka, Taiwan, the United Arab Emirates, the United Kingdom
and Venezuela.