Tyson Foods 2009 Annual Report Download - page 25

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25
Beef Segment Results
in millions
2009
2008
Change 2009
vs. 2008
2007
Change 2008
vs. 2007
Sales
$
10,782
$
11,664
$
(882
)
$
11,540
$
124
Sales Volume Change
0.5
%
(4.6
)%
Average Sales Price Change
(8.0
)%
5.9
%
Operating Income (Loss)
$
(346
)
$
106
$
(452
)
$
51
$
55
Operating Margin
(3.2
)%
0.9
%
0.4
%
2009 – Operating loss included a $560 million non-cash charge related to the partial impairment of goodwill.
2008 – Operating income included $35 million of charges related to: plant restructuring, impairments of packaging equipment
and intangible assets, and severance.
2009 vs. 2008 –
●
Sales and Operating Income (Loss) –
●
While our average sales prices have decreased as compared to fiscal 2008, we have still maintained a margin as the
average live costs decreased in line with the drop in our average sales price.
●
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.
2009 – Income
$102 million
2008 – Income
53 million
Improvement in operating results
$49 million
2008 vs. 2007 –
●
Sales and Operating Income – Sales and operating income were impacted positively by higher average sales prices and
improved operational efficiencies, partially offset by decreased sales volume due primarily to closure of the Emporia,
Kansas, slaughter operation. Operating results were also negatively impacted by higher operating costs. Fiscal 2008
operating results include realized and unrealized net gains of $53 million from our commodity risk management activities
related to forward futures contracts for live cattle, excluding the related impact from the physical sale and purchase
transactions, compared to realized and unrealized net losses of $2 million recorded in fiscal 2007. Operating results were
positively impacted by an increase in average sales prices exceeding the increase in average live prices.