Segment Reporting

12 Months Ended

Sep. 28, 2019

SEGMENT REPORTING

We operate in four reportable segments: Beef, Pork, Chicken, and Prepared Foods. We measure segment profit as operating income (loss). International/Other primarily includes our foreign operations in Australia, China, South Korea, Malaysia, Mexico, the Netherlands, Thailand and the United Kingdom, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Beef: Beef includes our operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. 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 export markets. This segment also includes sales from allied products such as hides and variety meats, as well as logistics operations to move products through the supply chain.

Pork: Pork includes our operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products. 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 export markets. This segment also includes our live swine group, related allied product processing activities and logistics operations to move products through the supply chain.

Chicken: Chicken includes our domestic operations related to raising and processing live chickens into, and purchasing raw materials for fresh, frozen and value-added chicken products, as well as sales from allied products. Our value-added chicken products primarily include breaded chicken strips, nuggets, patties and other ready-to-fix or fully cooked chicken parts. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets. This segment also includes logistics operations to move products through our domestic supply chain and the global operations of our chicken breeding stock subsidiary.

Prepared Foods: Prepared Foods includes our operations related to manufacturing and marketing frozen and refrigerated food products and logistics operations to move products through the supply chain. This segment includes brands such as Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, as well as artisanal brands Aidells®, Gallo Salame®, and Golden Island®. Products primarily include ready-to-eat sandwiches, sandwich components such as flame-grilled hamburgers and Philly steaks, pepperoni, bacon, breakfast sausage, turkey, lunchmeat, hot dogs, flour and corn tortilla products, appetizers, snacks, prepared meals, ethnic foods, side dishes, meat dishes, breadsticks and processed meats. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities, the military and other food processors, as well as to international export markets.

We allocate expenses related to corporate activities to the segments, except for third-party merger and integration costs of $36 million, $26 million and $67 million in fiscal 2019, 2018 and 2017, respectively, which are included in International/Other. Assets and additions to property, plant and equipment relating to corporate activities remain in International/Other. In fiscal 2017, we included $3 billion of unallocated goodwill associated with our acquisition of AdvancePierre in International/Other and we completed the allocation of goodwill to our segments in fiscal 2018. Additionally, as of September 28, 2019, we allocated approximately $342 million of goodwill to International/Other as a result of our Keystone Foods and Thai and European operations acquisitions. Refer to Note 5: Goodwill and Intangible Assets for further description.

Information on segments and a reconciliation to income from continuing operations before income taxes are as follows:



	in millions
	Beef		Pork		Chicken		Prepared Foods		International/Other			Intersegment Sales			Consolidated
Fiscal 2019
Sales	$	15,828	$	4,932	$	13,300	$	8,418	$	1,289		$	(1,362	)	$	42,405
Operating Income (Loss)	1,107		263		621		843		(7		)				2,827
Total Other (Income) Expense															396
Income before Income Taxes															2,431
Depreciation and amortization	97		47		513		397		32						1,086
Total Assets	3,137		1,372		10,807		15,138		2,643						33,097
Additions to property, plant and equipment	133		128		637		246		115						1,259
Fiscal 2018
Sales	$	15,473	$	4,879	$	12,044	$	8,668	$	305		$	(1,317	)	$	40,052
Operating Income (Loss)	1,013		361		866		845		(53		)				3,032
Total Other (Income) Expense															287
Income before Income Taxes															2,745
Depreciation and amortization	103		42		368		410		10						933
Total Assets	3,061		1,265		8,794		15,063		926						29,109
Additions to property, plant and equipment	107		150		570		228		145						1,200
Fiscal 2017
Sales	$	14,823	$	5,238	$	11,409	$	7,853	$	349		(1,412		)	$	38,260
Operating Income (Loss)	877		645		1,053		452		(106		)				2,921
Total Other (Income) Expense															293
Income before Income Taxes															2,628
Depreciation and amortization	92		36		296		315		9						748
Total Assets	2,938		1,132		6,630		13,466		3,900						28,066
Additions to property, plant and equipment	118		101		492		229		129						1,069

The Beef segment had sales of $411 million, $420 million and $386 million for fiscal 2019, 2018 and 2017, respectively, from transactions with other operating segments. The Pork segment had sales of $893 million, $817 million and $966 million for fiscal 2019, 2018 and 2017, respectively, from transactions with other operating segments. The Chicken segment had sales of $58 million, $80 million and $60 million for fiscal 2019, 2018 and 2017, respectively, from transactions with other operating segments. The aforementioned sales from intersegment transactions, which were at market prices, were included in the segment sales in the above table.

Our largest customer, Walmart Inc., accounted for 16.9%, 17.3% and 17.3% of consolidated sales in fiscal 2019, 2018 and 2017, respectively. Sales to Walmart Inc. were included in all the segments. Any extended discontinuance of sales to this customer could, if not replaced, have a material impact on our operations.

The majority of our operations are domiciled in the United States. Approximately 96%, 99% and 98% of sales to external customers for fiscal 2019, 2018 and 2017, respectively, were sourced from the United States. Approximately $24.8 billion and $23.2 billion of long-lived assets were located in the United States at September 28, 2019, and September 29, 2018, respectively. Excluding goodwill and intangible assets, long-lived assets located in the United States totaled approximately $7.5 billion and $6.7 billion at September 28, 2019, and September 29, 2018, respectively. Approximately $1,107 million and $212 million of long-lived assets were located in foreign locations, primarily Brazil, China, the European Union, New Zealand and Thailand at September 28, 2019, and September 29, 2018, respectively. Excluding goodwill and intangible assets, long-lived assets in foreign countries totaled approximately $506 million and $201 million at September 28, 2019, and September 29, 2018, respectively.

We sell certain products in foreign markets, primarily Australia, Canada, Central America, China, the European Union, Japan, Mexico, Malaysia, the Middle East, South Korea, Taiwan and Thailand. Our export sales from the United States totaled $4.1 billion, $4.2 billion and $3.9 billion for fiscal 2019, 2018 and 2017, respectively. Substantially all of our export sales are facilitated through unaffiliated brokers, marketing associations and foreign sales staffs. Sales of products produced in a country other than the United States were less than 10% of consolidated sales for each of fiscal 2019, 2018 and 2017.

The following table further disaggregates our sales to customers by major distribution channels:



	in millions
	Twelve months ended September 28, 2019
	Consumer Products^(a)		Foodservice^(b)		International^(c)		Industrial and Other^(d)		Intersegment			Total
Beef	$	7,420	$	4,151	$	2,426	$	1,420	$	411		$	15,828
Pork	1,415		400		890		1,334		893			4,932
Chicken	5,637		5,138		690		1,777		58			13,300
Prepared Foods	4,793		3,270		104		251		—			8,418
International/Other	—		—		1,289		—		—			1,289
Intersegment	—		—		—		—		(1,362		)	(1,362		)
Total	$	19,265	$	12,959	$	5,399	$	4,782	$	—		$	42,405

(a) Includes sales to consumer products and food retailers, such as grocery retailers, warehouse club stores, and internet-based retailers.

(b) Includes sales to foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, convenience stores, healthcare facilities and the military.

(c) Includes sales to international markets related to internationally produced products or export sales of domestically produced products.

(d) Includes sales to industrial food processing companies that further process our product to sell to end consumers and any remaining sales not included in the Consumer Products, Foodservice or International categories.