Tyson Foods (TSN) 8-K Tyson Reports First Quarter

Media Contact: Gary Mickelson, 479-290-6111 EXHIBIT 99.1

Investor Contact: Ruth Ann Wisener, 479-290-4235

TYSON REPORTS FIRST QUARTER

FISCAL 2006 AND RESTATED FISCAL 2005 RESULTS

• Chicken operating income increased 18%, with operating margin of 6.0%

• Prepared Foods operating income increased, with operating margin of 3.5%

• Beef earnings continued to deteriorate

• Restated fiscal 2005 results increased for a $19 million tax benefit, revised diluted EPS now $1.04

• Tyson revises EPS guidance to $0.50 - $0.80

Springdale, Arkansas – January 30, 2006 - Tyson Foods, Inc. (NYSE: TSN), today reported $0.11 diluted earnings per share for the first fiscal quarter ended December 31, 2005, compared to $0.14 diluted earnings per share in the same quarter last year. Sales for the first quarter of fiscal years 2006 and 2005 were both $6.5 billion. Operating income was $114 million compared to $129 million and net income was $39 million compared to $48 million for the same period last year.

Pretax earnings for the first quarter of fiscal 2005 included $12 million received in connection with vitamin antitrust litigation, a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. and $3 million of costs related to a prepared foods plant closing. The combined effect increased diluted earnings per share by $0.03.

John Tyson, chairman and CEO, said, “We entered fiscal 2006 knowing market conditions would be difficult, especially early in the year. During the first quarter our Chicken segment generated solid results and Prepared Foods improved, while Pork struggled and Beef further deteriorated, producing significant operating losses. Recent declines in international demand for chicken coupled with greater than expected domestic supply will dramatically impact the projected performance of our Chicken segment. Lower than projected cattle supplies, along with unanticipated interruptions in export market access, will slow the recovery that we expected for Beef later in the year. The cumulative effect of these factors has caused us to project a net loss for the second quarter and we now expect our fiscal 2006 earnings to range from $0.50 to $0.80 per diluted share. However, we will continue to face these challenges head on and remain focused on managing our business efficiently and executing our long-term strategic plans.”

The Company also today announced it will amend its Annual Report on Form 10-K for the fiscal year ended October 1, 2005, which will be filed in February 2006 and will result in an increase to net income of $19 million or $0.05 per diluted share. The amendment relates to the restatement of the Company’s financial statements for the year ended October 1, 2005, to correct the tax treatment associated with a non-recurring actuarial gain the Company recorded in the fourth quarter of fiscal 2005. The actuarial gain resulted from the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). The Act allows for a possible subsidy to retirement health plan sponsors to help offset the costs of participant prescription drug benefits. In March 2004, the FASB issued Staff Position No. 106-2, “Accounting and Disclosure Requirements Related to the Act.” In the fourth quarter of fiscal 2005, the Company concluded the prescription drug benefits included in its postretirement medical plan were actuarially equivalent to Medicare Part D under the Act. Included in a net actuarial loss of approximately $9 million related to the Company’s post-retirement health plan and in accordance with FASB Staff Position 106-2, the Company decreased its accumulated postretirement obligation and recognized an actuarial gain of approximately $55 million related to the present value of all future subsidies expected to be received for benefits earned. FASB Staff Position 106-2 states that “In the periods in which the subsidy affects the employer’s accounting for the plan, it shall have no effect on any plan-related temporary difference accounted for under FASB Statement 109 because the subsidy is exempt from federal taxation.” However, the Company recorded income tax expense related to the actuarial gain of approximately $19 million, resulting in a $0.05 reduction to diluted earnings per share. Accordingly, this restatement will result in the reporting of a material weakness in internal controls over financial reporting in the Company’s amended 2005 Annual Report on Form 10-K.

Restated earnings for fiscal 2005 were $372 million or $1.04 per diluted share, compared to $403 million, or $1.13 per diluted share, in fiscal 2004. Restated pretax earnings for fiscal 2005 included $33 million of costs related to a legal settlement involving the Company’s live swine operations, $14 million of costs for plant closing, $8 million of losses related to Hurricane Katrina, $12 million received in connection with vitamin antitrust litigation and a gain of $8 million from the sale of the Company’s remaining interest in Specialty Brands, Inc. Additionally, earnings included a non-recurring income tax net benefit of $15 million. That includes the reversal of tax reserves, partially offset by an income tax charge related to the repatriation of foreign income. Also, in fiscal 2005 the Company recognized a tax-exempt actuarial gain of $55 million, for which the Company erroneously recorded income tax expense of $19 million. The Company’s restated fiscal 2005 results reduce the income tax provision accordingly. Combined, these items increased fiscal 2005 restated diluted earnings per share by $0.03.

John Tyson, chairman and CEO, said, “The restatement relates to the tax treatment of a one-time non recurring actuarial gain. Additionally the restatement does not impact the Company’s previously issued revenue, income before taxes, or cash flows from operations; nor were the Company’s segment operating results impacted by the restatement.”

TYSON FOODS, INC.

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January 30, 2006

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Segment Performance Review (in millions)

Sales
(for the first quarter ended December 31, 2005, and January 1, 2005)
	First Quarter
				Avg. Sales
	Sales	Sales	Volume	Price
	2006	2005	Change	Change
Chicken	$2,036	$2,066	0.2%	(1.7)%
Beef	2,918	2,795	0.4%	4.0%
Pork	792	845	1.5%	(7.7)%
Prepared Foods	693	733	(2.4)%	(3.1)%
Other	15	13	n/a	n/a
Total	$6,454	$6,452	0.3%	(0.2)%

Operating Income (Loss)
(for the first quarter ended December 31, 2005, and January 1, 2005)
	First Quarter
			Operating Margin
	2006	2005	2006	2005
Chicken	$123	$104	6.0%	5.0%
Beef	(64)	(16)	(2.2)%	(0.6)%
Pork	11	15	1.4%	1.8%
Prepared Foods	24	12	3.5%	1.6%
Other	20	14	n/a	n/a
Total	$114	$129	1.8%	2.0%

TYSON FOODS, INC.

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January 30, 2006

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Chicken (31.5% of Net Sales, 107.9% of Total Operating Income – 1st Quarter 2006)

• Operating margins improved 1.0% from the first quarter of fiscal 2005, despite lower average sales prices

First quarter fiscal 2006 operating income increased $19 million as compared to the same period last year. Operating income was positively impacted by decreased grain costs of approximately $14 million as compared to the same period last year. Additionally, the impact resulting from the Company’s commodity risk management activities related to grain purchases was less than $1 million in the first quarter of fiscal 2006, as compared to a loss of $23 million recorded in the same period last year. First quarter fiscal 2006 operating income was negatively impacted by decreased margins at the Company’s operations in Mexico and higher energy costs. Chicken segment sales decreased 1.5% in the first quarter of fiscal 2006 as compared to the same period last year. The decrease in sales was due to lower average sales prices.

Beef (45.2% of Net Sales, (56.1)% of Total Operating Income – 1st Quarter 2006)

• Higher average sales prices resulted in increased sales, which were more than offset by reduced margins at the Company’s Canadian operation and increased operating costs and higher live prices

First quarter fiscal 2006 operating income decreased $38 million, excluding $10 million received in the first quarter of fiscal 2005 in connection with vitamin antitrust litigation. The decrease in operating income was due primarily to decreased volumes and margins at the Company’s Lakeside operation in Canada due in part to the labor strike occurring in the first quarter of fiscal 2006. Additionally, operating income was negatively impacted by higher operating costs per head. Beef segment sales increased 4.4% in the first quarter of fiscal 2006 as compared to the same period last year. The increase in sales was due primarily to higher average sales prices of approximately 4.0%. Sales and operating income for the three months ended December 31, 2005 and January 1, 2005, were negatively impacted by $3 million and $14 million, respectively, from net losses related to open mark-to-market futures positions from the Company’s on-going commodity risk management activities related to its fixed forward boxed beef sales.

Pork (12.3% of Net Sales, 9.6% of Total Operating Income – 1st Quarter 2006)

• Lower live costs and increased sales volumes were more than offset by decreased average sales prices and higher per head operating costs

First quarter fiscal 2006 operating income decreased $2 million, excluding $2 million received in the first quarter of fiscal 2005 in connection with vitamin antitrust litigation. Operating income was negatively impacted by decreased average sales prices and higher operating costs per head, partially offset by lower live costs and increased sales volumes. Pork segment sales decreased 6.3% in the first quarter of fiscal 2006 as compared to the same period last year. The decrease in sales was due primarily to lower average sales prices, partially offset by increased sales volumes.

Prepared Foods (10.7% of Net Sales, 21.1% of Total Operating Income – 1st Quarter 2006)

• Operating margin improved, driven by decreased raw material costs

First quarter fiscal 2006 operating income increased $9 million as compared to the same period last year, excluding plant closing related accruals of $3 million recorded in the first quarter of fiscal 2005. The increase in operating income was due primarily to decreased raw material costs and product mix improvements. Prepared Foods segment sales decreased 5.5% in the first quarter of fiscal 2006 as compared to the same period last year. The decrease in sales was due primarily to lower average sales prices and decreased sales volumes, partially due to the rationalization of lower margin product lines.

TYSON FOODS, INC.

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January 30, 2006

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TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

	Three Months Ended
	December 31,			January 1,
	2005			2005
Sales	$	6,454		$	6,452
Cost of Sales		6,106			6,089
		348			363
Selling, General and Administrative		234			231
Other Charges		-			3
Operating Income		114			129
Other (Income) Expenses:
Interest		51			58
Other		3			(5	)
Income before Income Taxes		60			76
Provision for Income Taxes		21			28
Net Income	$	39		$	48
Weighted Average Shares Outstanding:
Class A Basic		243			242
Class B Basic		102			102
Diluted		358			356
Earnings Per Share:
Class A Basic	$	0.12		$	0.14
Class B Basic	$	0.10		$	0.13
Diluted	$	0.11		$	0.14
Cash Dividends Per Share:
Class A	$	0.040		$	0.040
Class B	$	0.036		$	0.036
Sales Growth (Decline)		0.0	%		(0.8	)%
Margins: (Percent of Sales)
Gross Profit		5.4	%		5.6	%
Operating Income		1.8	%		2.0	%
Net Income		0.6	%		0.7	%
Effective Tax Rate		34.9	%		36.6	%

TYSON FOODS, INC.

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January 30, 2006

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TYSON FOODS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions)

	(Unaudited) December 31, 2005		(Unaudited) (Restated) October 1, 2005
Assets
Current Assets:
Cash and cash equivalents	$	30	$	40
Accounts receivable, net		1,254		1,214
Inventories		2,154		2,062
Other current assets		182		169
Total Current Assets		3,620		3,485
Net Property, Plant and Equipment		4,069		4,007
Goodwill		2,502		2,502
Other Assets		508		510
Total Assets	$	10,699	$	10,504
Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt	$	878	$	126
Trade accounts payable		1,155		961
Other current liabilities		1,030		1,070
Total Current Liabilities		3,063		2,157
Long-Term Debt		2,110		2,869
Deferred Income Taxes		647		638
Other Liabilities		168		169
Shareholders’ Equity		4,711		4,671
Total Liabilities and Shareholders’ Equity	$	10,699	$	10,504

TYSON FOODS, INC.

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January 30, 2006

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TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Three Months Ended
	December 31,			January 1,
	2005			2005
Cash Flows From Operating Activities:
Net income	$	39		$	48
Depreciation and amortization		125			126
Plant closing-related charges		-			3
Impairment and write-down of assets		2			-
Deferred income taxes and other		(51	)		(54	)
Net changes in working capital		68			299
Cash Provided by Operating Activities		183			422
Cash Flows From Investing Activities:
Additions to property, plant and equipment		(189	)		(110	)
Proceeds from sale of assets		11			9
Investment in marketable securities		3			5
Net changes in other assets and liabilities		5			5
Cash Used for Investing Activities		(170	)		(91	)
Cash Flows From Financing Activities:
Net change in debt		(7	)		(292	)
Purchases of treasury shares		(12	)		(16	)
Dividends		(14	)		(14	)
Stock options exercised and other		14			(1	)
Cash Used for Financing Activities		(19	)		(323	)
Effect of Exchange Rate Change on Cash		(4	)		-
Increase (Decrease) in Cash and Cash Equivalents		(10	)		8
Cash and Cash Equivalents at Beginning of Period		40			33
Cash and Cash Equivalents at End of Period	$	30		$	41

TYSON FOODS, INC.

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January 30, 2006

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The following statements reflect the changes from the Company’s previously issued financial statements for the fiscal year ending October 1, 2005.

CONSOLIDATED STATEMENT OF INCOME

		For the fiscal year ended October 1, 2005
		in millions, except per share data
		As Originally					(Unaudited)
		Reported		Adjustments			Restated
Sales		$	26,014	$	-		$	26,014
Cost of Sales			24,274					24,274
			1,740		-			1,740
Operating Expenses:
	Selling, general and administrative		928					928
	Other charges		47					47
Operating Income			765		-			765
Other Expense:
	Interest		227					227
	Other		10					10
			237		-			237
Income Before Income Taxes			528		-			528
Provision for Income Taxes			175		(19	)		156
Net Income		$	353	$	19		$	372
Weighted Average Shares Outstanding:
	Class A Basic		243					243
	Class B Basic		102					102
	Diluted		357					357
Earnings Per Share:
	Class A Basic	$	1.05	$	0.06		$	1.11
	Class B Basic	$	0.95	$	0.06		$	1.01
	Diluted	$	0.99	$	0.05		$	1.04

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January 30, 2006

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CONSOLIDATED BALANCE SHEET

				October 1, 2005
				in millions, except per share data
				As Originally					(Unaudited)
				Reported			Adjustments		Restated
Assets
Current Assets:
	Cash and cash equivalents			$	40	$	-		$	40
	Accounts receivable, net				1,214					1,214
	Inventories				2,062					2,062
	Other current assets				169					169
Total Current Assets					3,485		-			3,485
Net Property, Plant and Equipment					4,007					4,007
Goodwill					2,502					2,502
Intangible Assets					142					142
Other Assets					368					368
Total Assets				$	10,504	$	-		$	10,504
Liabilities and Shareholders’ Equity
Current Liabilities:
	Current debt			$	126	$	-		$	126
	Trade accounts payable				961					961
	Other current liabilities				1,070					1,070
Total Current Liabilities					2,157		-			2,157
Long-Term Debt					2,869					2,869
Deferred Income Taxes					657		(19	)		638
Other Liabilities					169					169
Shareholders’ Equity:
	Common stock ($0.10 par value):
		Class A-authorized 900 million shares:
			issued 268 million shares in 2005		27					27
		Class B-authorized 900 million shares:
			issued 102 million shares in 2005		10					10
	Capital in excess of par value				1,867					1,867
	Retained earnings				3,013		19			3,032
	Accumulated other comprehensive income (loss)				28					28
					4,945		19			4,964
	Less treasury stock, at cost-
		15 million shares in 2005			238					238
	Less unamortized deferred compensation				55					55
Total Shareholders’ Equity					4,652		19			4,671
Total Liabilities and Shareholders’ Equity				$	10,504	$	-		$	10,504

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January 30, 2006

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

		For the fiscal year ended October 1, 2005
		in millions
		As Originally					(Unaudited)
		Reported			Adjustments		Restated
Balance – October 2, 2004		$	4,292		$	-	$	4,292
Comprehensive Income:
	Net income		353			19		372
	Other comprehensive income, net of tax of $11 million		40			-		40
Total Comprehensive Income			393			19		412
Purchase of Treasury Shares			(45	)				(45	)
Stock Options Exercised			51					51
Restricted Shares Issued			3					3
Restricted Shares Canceled			(2	)				(2	)
Dividends Paid			(55	)				(55	)
Dividends Accrued			(13	)				(13	)
Amortization of Deferred Compensation			25					25
Other			3					3
Balance – October 1, 2005		$	4,652		$	19	$	4,671

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January 30, 2006

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CONSOLIDATED STATEMENT OF CASH FLOWS

				For the fiscal year ended October 1, 2005
				in millions
				As Originally						(Unaudited)
				Reported			Adjustments			Restated
Cash Flows From Operating Activities:
	Net income			$	353		$	19		$	372
	Adjustments to reconcile net income to cash provided
		by operating activities:
			Depreciation		465						465
			Amortization		36						36
			Plant closing related charges		10						10
			Impairment and write-down of assets		25						25
			Deferred taxes		(74	)		(19	)		(93	)
			Other		(2	)					(2	)
			(Increase) decrease in accounts receivable		24						24
			(Increase) decrease in inventories		13						13
			Increase in trade accounts payable		11						11
			Net change in other current assets and liabilities		138						138
Cash Provided by Operating Activities					999			-			999
Cash Flows From Investing Activities:
	Additions to property, plant and equipment				(571	)					(571	)
	Proceeds from sale of assets				47						47
	Purchases of marketable securities				(543	)					(543	)
	Proceeds from marketable securities				504						504
	Net change in other assets and liabilities				2						2
Cash Used for Investing Activities					(561	)		-			(561	)
Cash Flows From Financing Activities:
	Payments of debt, net				(720	)					(720	)
	Proceeds from borrowings of debt				353						353
	Purchase of treasury shares				(45	)					(45	)
	Dividends				(55	)					(55	)
	Stock options exercised and other				24						24
Cash Used for Financing Activities					(443	)		-			(443	)
Effect of Exchange Rate Change on Cash					12			-			12
Increase in Cash and Cash Equivalents					7			-			7
Cash and Cash Equivalents at Beginning of Year					33						33
Cash and Cash Equivalents at End of Year				$	40		$	-		$	40

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January 30, 2006

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Tyson Foods, Inc., founded in 1935 with headquarters in Springdale, Arkansas, is the world’s largest processor and marketer of chicken, beef and pork and the second-largest food company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products, which are marketed under the “Powered by Tyson™” strategy. Tyson is the recognized market leader in the retail and foodservice markets it serves, providing products and service to customers throughout the United States and more than 80 countries. Tyson has approximately 114,000 Team Members employed at more than 300 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.

A conference call to discuss the Company’s financial results will be held at 9 a.m. Eastern today. To listen live via telephone, call 888-677-1801. A pass code and the leader’s name will be required to join the call. The pass code is Tyson Foods and the leader’s name is Ruth Ann Wisener. International callers dial 773-681-5870. The call also will be webcast live on the Internet at http://ir.tysonfoodsinc.com. Financial information, such as this news release, as well as other supplemental data, including Company distribution channel information, can be accessed from the Company’s web site athttp://ir.tysonfoodsinc.com.A telephone replay will be available until midnight March 1 at 866-463-4104. International callers dial 203-369-1380.

Forward-Looking Statements

The Company and its representatives may from time to time make written or oral forward-looking statements, including forward-looking statements such as statements related to expected earnings and results. These forward-looking statements are subject to a number of factors and uncertainties which could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations, expressed in such forward-looking statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following: (i) fluctuations in the cost and availability of raw materials, such as live cattle, live swine or feed grains; (ii) market conditions for finished products, including the supply and pricing of alternative proteins, and the demand for alternative proteins; (iii) risks associated with effectively evaluating derivatives and hedging activities; (iv) access to foreign markets together with foreign economic conditions, including currency fluctuations and import/export restrictions; (v) outbreak of a livestock disease (such as avian influenza (AI) or bovine spongiform encephalopathy (BSE)) which could have an effect on livestock owned by the Company, the availability of livestock for purchase by the Company, consumer perception of certain protein products or the Company’s ability to access certain markets; (vi) successful rationalization of existing facilities, and the operating efficiencies of the facilities; (vii) changes in the availability and relative costs of labor and contract growers; (viii) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (ix) adverse results from litigation; (x) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xi) changes in regulations and laws (both domestic and foreign), including changes in accounting standards, environmental laws and occupational, health and safety laws; (xii) the ability of the Company to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; (xiii) effectiveness of advertising and marketing programs; (xiv) the effect of, or changes in, general economic conditions; and (xv) the on-going review of the circumstances surrounding the restatement of previously issued financial statements for the year ended October 1, 2005, and the consequences thereof.