Ruth Ann Wisener - IR Dick Bond - President and CEO Dennis Leatherby - CFO

Ken Goldman - JP Morgan Christina McGlone - Deutsche Bank Heather Jones - BB&T Capital Markets Kenneth Zaslow - BMO Capital Markets Robert Moskow - Credit Suisse Timothy Ramey - D. A. Davidson & Co Christine McCracken - Cleveland Research Vincent Andrews - Morgan Stanley Farha Aslam - Stephens Inc. Diane Geissler - Merrill Lynch Christopher Brocklehurst - Barclays Capital Ann Gurkin - Davenport

All participants will be able to listen-only until the question-and-answer portion of today’s conference. (Operator Instructions) Today’s conference is being recorded. I would now like to turn your conference over to Ms. Ruth Ann Wisener.

Thank you. Good morning and thank you for joining us today for Tyson Foods conference call for our 2008 fourth quarter. With me today are Dick Bond, our President and CEO and Dennis Leatherby, our Chief Financial Officer. Before we begin to discuss the operating performance for the quarter, I want to remind everyone that some of the things we talk about today will include forward-looking statements. Those statements are based on our view of the world as we know it today which could change. I encourage you to look at today's press release for discussion of the risks that can affect our business. I will now turn the call over to Dick Bond.

Welcome. 2008 was a difficult year in the protein business, which isn't news to any of you, but I'm proud of much of what we've done in this year and I hope the losses in our chicken business don't overshadow several significant accomplishments. If you were looking at Tyson Foods from the perspective of our business model, what our strategy is and what steps we have taken to execute our strategy, we have been moving the ball forward all year. First this is a multi-protein company which mitigates the impact, when one segment is struggling. 2008 is a prime example of this business model and action. The Chicken segments bad year doesn't outweigh record setting pork margins or remarkable year-over-year turnaround in beef. Second we are moving ahead on our international growth strategy and I have made multiple acquisitions and joint ventures this year. In past up times, we have pulled back from plans to expand especially internationally and it has slowed our progress, not this time. Third we have a strong balance sheet. We issued equity and convertible debt in September to close those international deals. We didn't have to do it, but it allowed us to keep the company on track for long-term growth. Fourth we are moving forward with our renewable products initiatives including the dynamic fuels, renewable diesel plant in the Louisiana. I'll talk about these things in more detail in my segment report, but now I'd like to turn the call over to Dennis, who will go into the specifics on our financial result, as well as our international deals and the stock offering.

Thank you, Dick. As stated in our press release in Q4 '08, we achieved GAAP earnings of $0.13 per share in a very challenging environment. This compares to earnings of $0.09 per share in Q4 '07. Q4 ‘08 results include certain intangible impairments of $0.02 per share. Our effective tax rate from continuation operations for the quarter was 50.1% and usually higher rate is attributable to lower overall pretax earnings and the impact of certain nondeductible expenses. One other item of note in fourth quarter fiscal 2008, we changed our segment reporting to move our logistics operation profits, which are [inter-companied] by nature from the other segment to Beef, Pork, Chicken or Prepared Foods. All prior periods have been restated to reflect this change. We feel this move will make the segment reporting more meaningful as we go forward and please note also that the historical allocation breakdown is roughly 55% chicken, 20% beef, 15% pork and 10% prepared foods. Turning to the fiscal year results for fiscal '08, we achieved GAAP EPS of $0.24 per share compared to $0.75 per share for fiscal '07. This $0.24 includes $0.10 of non-operating images. Sales grew to $26.9 billion just over $1 billion higher than fiscal ‘07. Cash on hand at the end of fiscal ’08 was $250 million. Total debt at year end was approximately $2.9 billion a slight increase from 2007, as we sought capital to fund acquisitions for two exciting and important pillars of our strategy, international and renewable products, more on that in a moment. We ended the year with our debt-to-cap ratio at 36.6% down slightly from the end of fiscal '07. Capital expenditures for '08 were $425 million compared to $285 million for '07. $139 million of this capital was allocated to improve our operations in the Chicken segment and Dick will discuss this further on his segment comments. Diluted weighted shares outstanding for the quarter were around $358 million shares a slight increase over Q4 '07 due mainly to our stock offering late in the quarter. As you know, during September '08, we raised $670 million of net proceeds from our offering after fees and costs. $396 million of the proceeds came from the convertible bond transaction costs associated with the bond hedge more on proceeds. $274 million was netted from the Class A common stock offering and the way we look at it is the pretax rate on the convertibles of 5.5% is pretty cheap capital. The net proceeds were used toward the repayment of our borrowings under the accounts receivable securitization and for other general corporate purposes. Paying down the accounts receivable securitization freed up capital for international acquisitions and future efforts in our renewable products division. In October 2008, we completed the acquisition of three vertically integrated poultry operations in southern Brazil. The purchase price was $80 million and additional $10 to $15 million that’s contingent purchase price based on production volumes payable through fiscal 2010. These transactions include the acquisitions of Macedo, Avicola and Frangobras combined we expect these companies will have sales in the $150 to $175 million range for 2009. Additionally, once the joint venture with Shandong Xinchang receives the necessary government approvals, we expect to spend $110 to $115 million to acquire 60% ownership in that company. We anticipate this will be finalized during fiscal 2009. At desire capacities, we expect our international investments to generate ROICs of 20% or better. I'll discuss post acquisition CapEx in a moment. We hope to complete the sale of Lakeside, our Canadian beef business by the end of fiscal first quarter of 2009 with plans to use the proceeds, as available to pay down debt and for other general corporate purposes. Including working capital of Lakeside initially retained by asset closing as well as consideration received from XL Foods, we expect the following future cash flows based on the year end exchange rate. We expect to receive $55 million at closing approximately $136 million in calendar 2009 and then $49 million in notes receivable plus interest to be paid over two years by XL Foods and $29 million of preferred stocks in XL redeemable over five years. Here are the projections specified information for fiscal '09. Revenues, we expect to be in the range of $28 billion to $29 billion. As a result of the common offering, weighted average shares will be approximately 377 million shares. Net interest expense is expected to be around $225 million. Depreciation and amortization is expected to be around $525 million. Capital spending will go up compared to fiscal '08 and we expect the following ranges. Approximately, $425 million to $450 million will be used to spend for our core business operations. Approximately $100 to $120 million on post acquisition capital spending will be used for Brazilian and Chinese acquisitions, and approximately $75 to $80 million is related to our Dynamic Fuels facility. The cost to construct this facility is estimated to be $138 million, which will be funded by $100 million of Gulf Opportunity tax exempt bonds issued in October of 2008 along with equity contributions made by Tyson and Syntroleum, most of which have already been made. In closing, I would just like to reiterate what Dick said about our company. I feel very confident about the prospects for Tyson Foods. I am really proud of what our Fresh Meats team has done and beef and pork models are really running well and they are optimizing their commodity business models and competing favorably with anyone. I also believe our chicken business is well on its way to doing the same. In short, we have made great progress on our strategies to build the multinational enterprise and we continue developing more opportunities to build value in renewable products area. I believe all those efforts are positioning our company for a strong long-term future. Now I will pass it back to Dick for a review of the segments. Dick Bond We're going to start with the chicken segment. 2008 was an extremely tough year for the chicken business and the fourth quarter was the most difficult. We lost $91 million in the chicken segment in the fourth quarter and $118 million for the year. Volume was up 6% for the quarter and down 4/10 of a percent for the year. Prices were up in average of 5.5% for the quarter and 9% for the year, but that was not enough to keep pace with input costs. We had almost $600 million in additional grain cost in fiscal '08. Total chicken segment inputs were up $900 million over fiscal 2007. Despite the operating environment, we were able to make progress in several areas. To better serve the broad ranging needs of our customers, we placed an organizational focus on increasing the profitability of our small bird model. We also converted some plants to a large bird model. As Dennis said, we spent $139 million in CapEx this fiscal year to improve operating efficiencies in our plants. The CapEx along with profit improvement projects in our sales channel should generate more than $250 million in annualized cash flow improvements. Although higher input cost mass the impact to some extent, we have improved our position relative to the competition as reflected in a number of industry benchmarking studies. We are currently identifying cost savings and revenue enhancing projects for 2009 to further improve our position. As always, we have been carrying out our strategy to create innovative and insight driven food products. Our Food Service group won the [Kennedale] and Cognitio awards for the sixth consecutive year. [Kennedale] identifies the elite manufacturers and operators, as evaluated by their trading partners. Cognitio identifies the manufacturer that did the best job of bringing new products to Food Service operators. I think these awards demonstrate how important joint value creation is to our customers. Parts of the Food Service industry are hurting in this economy, and we believe our R&D, culinary and consumer insight teams are playing a vital role in helping our customers get through these difficult times. They are relying on us and our proprietary resources of our Discovery Center to help them develop products and menu ideas that will drive traffic by offering value to consumers. Not all of the Food Service industry is hurting, however. Although, fewer people are eating away from home, when they do, they don't want to spend as much. As a result, quick service continues to grow. The QSR fast-casual segment represents almost half of our food service business, and 80% of our National Accounts business. These customers have dependent on us to ensure that they have large quantities that they need for National promotions. Customers in all channels have expressed concern to us about the condition of other companies in the chicken industry and their ability to ensure supply. More people are eating at home. However, and the retail and club store industries is seeing growth, although traffic and buying patterns have changed. Shoppers are making fewer trips, but buying more per trip. We help our retail customers with products and strategies to bring people into their stores, while giving consumers value for their money. In October, we unveiled a new line of 100% All Natural Chicken Nuggets, Patties and Tenders that are minimally processed and contain no artificial ingredients, preservatives or fillers. We are supporting this launch with a new advertising spot that was recognized by Nielsen IAG as one of the top ten most recalled new TV ads. This product category represents a value alternative to eating out and we will continue innovating to provide customers and consumers the products they want. As for the outlook for Chicken in early fiscal '09 export markets, credit availability, and the recent strengthening dollar had impacted late quarter pricing significantly. Prices are already in the low 20s to the high teens, although sales recorded in October will keep our average for the quarter in the mid to upper 30s. Sales are difficult to come by right now because of trade disputes not lack of demand. Until renegotiated quotas and other technical issues are resolved, looking [late] quarter sales especially to Russia will be difficult. Also we have several cost plus and fixed price contracts with customers for which we have hedged some grain positions. These positions as well as some corporate long positions could impact first quarter results depending upon where corn and soybean meal, close in December. Some of those positions will be mark-to-market at the end of the quarter and are included in our covenant calculations, but other positions would be factored in. The Beef segment had a great fourth quarter with a 5% operating margin. Looking at the third and fourth quarters combined, we had a 3% margin, which is at the upper end of our normalized range. The important thing to remember about our Beef business is that we've turned it around from a $254 million loss in 2006 to $106 million gain for 2008 that's a remarkable turnaround and we are really proud of that accomplishment. Sales prices were up 13% and 6% for the fourth quarter and the year respectively, while sales volumes were down 7.5% for the quarter and 4.6% for the year. The lower volumes are the result of ceasing slaughter operations at our Emporia, Kansas plant in February. Capacity utilization improved to 83.6% compared to 82.8% in Q4 of last year. In the third quarter, the Beef segment had a negative $75 million impact from a mark-to-market accounting treatment related to forward cattle purchases. At the time, I told you we would offset about half of that loss in fourth quarter. I am pleased to report that we had a $41 million recoup and anticipate regaining the remainder of that balance in the first and second quarters of fiscal '09. The economy has affected consumer beef purchases. People are still eating beef but they are trading down in cuts. Sales are the more expensive, [wither] line cuts are down, while chuck and ground beef sales are up. We expect this trend to continue in 2009. Fast beef exports were very good in the fourth quarter. Sales were up 63% on volume and 68.5% on net sales as compared to Q4 of '07. With the South Korean market open, we have 1,250 containers booked for shipment for the August through November period. For Beef in 2009, we anticipate export disappearance to continue. We think cattle supplies will be down 1% to 2% in fiscal '09, but there should be ample cattle to run our plants efficiently. Given our focus on operations and managing the business, I'm confident in our position going into 2009. The Pork segment had its best July through September period ever with a 7.5% operating margin and its best fiscal year ever with a 7.8% margin. Sales volume was up 2% for the quarter and 6% for the year. The segment benefited significantly from lowered hog prices most of the year, but I don't want to overlook the work our fresh meets team has done to improve pork's performance. They have executed our strategy to optimize our commodity businesses by improving staffing and yield, while keeping costs under control. Capacity utilization improved 2.5% over Q4 of '07 to 85.6% in Q4 of '08. With a Q4 gross margin well above the industry average, I think Tyson Foods currently is running the best most efficient pork business in the country. They are likely to be fewer hogs in 2009, but still above the five year average and an ample supply to produce good operating results. Some export markets are going to be difficult especially with the strengthening dollar. However sow liquidation in the EU and Canada will position the US to be a good source for high quality pork. We probably aren't going to see any more record breaking quarters in 2009, but I think our pork segment will continue to do very well. The prepared food segment sales were up 9% quarter-over-quarter. While fluctuation and prices for pork raw materials, higher wheat, dairy and cooking ingredients, more than offset pricing gains resulting in a $5 million loss for the quarter. We've gained national distribution of our right brand bacon. However, other parts of our refrigerated processed meats business have struggled. We have a team working on this, to get it turned around and I expect to see significant improvements in 2009. Sales of pepperoni pizza toppings, pizza crusts and tortilla soups and sauces remain strong with opportunities for volume growth for the fiscal 2009 year, although high input costs are likely to continue. Turning to international sales, despite some concerns about global credit and trade restrictions in the short-term, we believe underlying demand is still strong in the long term. There is a 30 to 60 day supply in the pipeline, and when it's gone, we believe there will be increased demand for our protein products. Countries import protein because they can't produce enough to feed their own people and that really hasn't changed. We will continue with our strategy to build a multinational company, because international sales and production will be a primary source for Tyson Foods future growth. We have work to do in integrating the multiple acquisitions and joint ventures we made in the past several months. While some of these entities are established and profitable, others are greenfield or newly operational. So we anticipate it will be 2010, before we begin to see the returns from them in the aggregate. In our renewable products group, we have broken ground on the Dynamics Fuels renewable plant. The project is on budget and on schedule to begin production in January 2010. Unfortunately, we have to rethink our strategic alliance with ConocoPhillips. [Conoco] has reduced the tax credit from $1 to $0.50 a gallon, making the project currently unprofitable. I think the government is being shortsighted in favoring ethanol over renewable diesel. I know many people don't like the idea of big oil companies getting tax credits, but they may not realize it is the oil companies that receive the tax credit for blending ethanol into gasoline, not the ethanol producers. I believe the new energy technology should compete on a level playing field and the superior technology whatever that may be, should prevail. In addition to fuel, pet food is a primary focus of our renewable products group. In January, we announced a strategic alliance with Kemin Industries to develop, manufacture, market and sell flavor enhancers known as palatants to the North American pet food market. We assigned a team to this project and are on schedule to start production next month at our River Valley Animal Feed plant in Texarkana. In closing, we are a little bit more than a month into the first quarter, and we have limited visibility into what will happen with both export markets and input costs volatility early in fiscal '09. The second half of the year should be better as predicted lower chicken supplies should improve pricing, beef usually has its strongest performance in the third and fourth quarters, and pork will do well all year. In the short-term, we will handle the difficult market conditions as effectively as possible, and I believe we are in a good position because we have the right strategy, a solid management team, and a strong balance sheet. I don't think there's another protein company better positioned than Tyson Foods for long-term growth. Now I'd like to turn the call back over to Julie and we will take your questions.

Thank you. (Operator Instructions). First question comes from Ken Goldman with JP Morgan. Sir your line is open. Ken Goldman - JP Morgan: Good morning.

Morning Ken Ken Goldman - JP Morgan: A question about pork. You said, even though there is limited visibility that pork will do well all year, there is some evidence out there. I know it's early, that maybe global demand for pork is starting to slip a little bit. Can you talk a little bit about that what you are seeing and maybe if it's true or not true, and where you are seeing some strength continuing?

Well Ken, I would tell you that, again going back first to supply, I think that supply will be very good even though it might be down a little bit. We had record supplies of pork in '08. So while '09 might be down a couple percentage points. I still think there is going to be plenty of pork again to run our plants efficiently. If we think about the export markets, I think China right now is probably an area that has slipped a little bit post the Olympics, but we are still seeing very strong demand in Mexico as a prime example. We are still seeing very strong demand in Asia primarily in Japan and South Korea, and Russia is probably an area where we have still seen reasonably good volume, and who knows what's going happen there in the short-term. But again it goes back to the factor that countries import protein because they need it to feed their people. So, we are very confident that the export markets overall will continue to be strong in fiscal '09 and I just think we are running a very, very solid pork business right now. Ken Goldman - JP Morgan: Okay, and then can you give us some idea of just how bad chicken will be for you in the first fiscal quarter? It's hard for us to get an exact idea, where your hedges are and so forth, but I know, you don’t provide exact guidance, but some conversation a little bit about specificity, I think would help investors.

Well, I won't give you any exact numbers. I'll just talk for the hedges for a minute. The hedges and around the hedge activity will be dependent again on what corn and soybean meal prices are at the end of December. I don't know what they are going to be. Nobody knows what they are going to be and that's a huge factor in terms of mark-to-market end results for chicken in Q1. So somebody can tell me what the answer to that was, I'd be a little bit more able to answer that with some specificity. I will tell you though that Q1 given where legs quarter prices are, breast meat prices are, we are going to lose some significant dollars in Q1. It's really hard for me to give you even a range again because not knowing exactly what inputs are going to be and what is going to happen in terms of, will supplies stay where they are, will supplies stay not where they are. But at this point, six weeks into the quarter, it's not going to be a good quarter. It will be a negative quarter in chicken and most likely a negative quarter overall for our results. Ken Goldman - JP Morgan: Okay. Thanks very much. That's helpful.

Our next question comes from Christina McGlone with Deutsche Bank. Your line is open. Christina McGlone - Deutsche Bank: Good morning.

Good morning, Christina. Christina McGlone - Deutsche Bank: Dick, I guess, my first questions, if you look at current demand dynamics including whatever is going on with the Russia this morning announcing a 300,000 ton quarter cut for next year and the tight credit conditions, do you think we'll just see outright closure of capacity in chicken? I am kind of thinking, why wouldn't we? What are the barriers there and what is the alternative?

Well, Christina, I can't speak for whether we will or as an industry will or won't have any closures. I think we have over the course of the past several years closed four, five facilities; inefficient facilities are going to be something that is going to have to be looked at by everybody. I'm not sure what's going to happen in terms of outright capacity reduction. I do believe that overall supplies of chicken will continue to decline. We did see double digit exits down last week. So, I think supply will continue to probably decline. But it's hard for me to say what might happen in terms of pure out and out capacity reduction. I'm uncomfortable at all trying to speculate on that. Christina McGlone - Deutsche Bank: The 10% reduction in exits that you referenced, is that enough to get the industry back to profitability?

No. I think that depends upon demand. It could be or it might not be depending upon both domestic and export demand. I would guess at this point that it might need to be a little bit more than that. Christina McGlone - Deutsche Bank: Okay. Dennis I just wanted to touch on pension. So, given the equity market performance, what is the expected cash contribution in fiscal 2009 and if any what are the incremental headwinds in terms of pension expense in the P&L?

As far as the pensions go Christina, we have three closed pension funds and our contribution based on the actuarial analysis is only going to be about $1 million for next year. We also have a non-qualified benefit plan that based on the same actuarial analysis would result in another million dollars in pension contributions required from the company. So, it's not too much. Christina McGlone - Deutsche Bank: What about pension expenses, they are big incremental difference?

No. It’s about $6 million. Christina McGlone - Deutsche Bank: Okay. Thank you.

Thanks, Christina.

Our next question comes from Heather Jones with BB&T Capital Markets. Heather Jones - BB&T Capital Markets: Good morning.

Good morning, Heather. Heather Jones - BB&T Capital Markets: I have a quick question on your covenants. As far as your leverage covenant it looks like at the end of the quarter, it was about 3.1 times and I think, it's not supposed to exceed 3.9. But I just wonder, if you could speak given that you are expecting, it seems a pretty challenging quarter for Q1 and Lakeside hasn't closed yet. I was wondering what your view is as far as your comfort level with that covenant at this point at the end of Q1.

Sure. To correct you just a little bit, it's closer to 3.2… Heather Jones - BB&T Capital Markets: Okay.

EBITDA for fiscal '08. In terms of the outlook, the first quarter, it is going to be a little bit tight and so again it depends on these grain positions at the end of the quarter. Heather Jones - BB&T Capital Markets: Did you say that some of those grain positions will be mark-to-market and won't be included in your EBITDA?

That's correct. Yes, the way it works is that anything as a mark-to-market position will be added back to the debt to EBITDA covenant. Heather Jones - BB&T Capital Markets: I mean, how tight are we talking about? Should we be expecting that you need to be in discussions with your lenders for waivers or you don't expect it to be that tight?

We don't have a clear view on that. I will say that we've had a great track record working with our banks. It's a very supportive bank group. They've supported us through a lot and helped us even in this most recent amendment. So, we are very comfortable that we do need to do something whether it be a waiver or amendment that will be, we have it get it done usually. Heather Jones - BB&T Capital Markets: Okay.

Heather we don't believe this is going to be a big problem for us. If that happens, and if it gets tight, which it could, we are very, very confident that our bank group will work with us. That is not an issue as far as we are concerned. Heather Jones - BB&T Capital Markets: What is going on with Lakeside? I think on your Q3 call, you had expected to close during Q4, and now it's been pushed out to Q1. Is this a function of the credit market or is there something else going on there?

No it really isn't a function of the credit market. It is just a function of the time that it is taking to go through the Competition Bureau up in Canada. They have asked kind of for a second request, if you will, for information. It's just taken a little bit longer than what we had thought to process. Still don't believe there's going to be any problem from that standpoint. It has just taken a little bit longer than what we anticipated. Heather Jones - BB&T Capital Markets: Okay. I just have two more quick questions. When you said that the production cuts assuming this double digit holds, do you think that's not enough to get you to profitability or is not enough to get you to normal margins?

I would say probably not enough to get to normalized margins. I think certainly that would get to us a profitable level, but I don't know if it would be necessarily get us to normalized. Heather Jones - BB&T Capital Markets: Okay, and then, my final question, you spoke about export demand and I appreciate the color. But, I was wondering what you've seen specifically in October and early November as far as domestic demand on the food service side, specifically casual dining. Have you seen further deterioration there? Have trends slowed in QSR or just if you could give us some color.

Sure. QSR continues to be extremely good. I would say very good, given the current conditions. The segment that is hurting the most is that mid-scale casual dining, and there I would say that it's been a little bit more discouraging in October, early November than even what it was in the August, September period. But we are working on products and value related products to try and stimulate that demand for that sector that takes a little bit of time, but I think they are all focused on that as well. How can they get their traffic count back up? How can they keep their ticket or their sales ticket price relatively low and we are working as hard as we possibly can to help them in that vein. But you are right. It has been probably a little bit worse than the August, September period. Heather Jones - BB&T Capital Markets: Okay. I appreciate it.

Thank you.

Our next question comes from Ken Zaslow with BMO Capital Markets. Your line is open. Kenneth Zaslow - BMO Capital Markets: Hey, good morning, everyone.

Good morning Ken. Kenneth Zaslow - BMO Capital Markets: On the chicken side, demand has clearly declined both on the export and food service side, and the industry excluding probably you and Sanderson Farms has clearly had a fairly aggressive cut, and my understanding has been that Tyson would begin to cut and maybe go along with the industry once the demand is cutting lower and there's been evidence of industry rationalization. I guess my question is what are you guys doing? Are you guys starting to do that?

Well, Ken, I'll go back and I think what I have always said pretty routinely was that we would match the demand from a customer's perspective with our supply, and I would tell you that I'm still or we are still in that mode. Now granted food service sales are not quite as good, especially in that mid-scale, and casual like we talked about, but QSR is still very good, and retail has really picked up the pace here. So there's been a shift, and we've acknowledged that shift, but overall I would tell you that from a Tyson perspective demand for chicken, domestically, is still pretty good. Kenneth Zaslow - BMO Capital Markets: So you have still no intention of kind of cutting a little bit?

What I'm telling you is that we will continue to evaluate this and we do continue to evaluate it all the time. As of right now, we still believe that demand supply balance for us is still reasonably good. Kenneth Zaslow - BMO Capital Markets: Okay. If I think about on the beef side, I may guess, I am going to have the similar logic here. With the beef export probably coming down, we noted a little bit tighter supply. You guys have made some actions with Emporia. Is there a need for another action either by the industry or by Tyson?

Well, I can tell you there will not be another action by Tyson. We have very, very, efficient plants. We are pleased with our position there. I don't necessarily know that exports, our export business is still solid from a beef standpoint. Japan still isn't where we wanted it to be, but that's because of the 20 month in down process. Like I said, we booked thousand, 250 containers into South Korea. We still see demand being reasonably good from an export perspective, and as I said, I do belief cattle supplies are going to be down, but they are still up about 4/10 of a percent year-over-year in '08. So I don’t think we are going to have a huge shortfall of cattle in order to keep our plants running efficiently to generate reasonable margins for '09. Kenneth Zaslow - BMO Capital Markets: So you did say that, when you say you are confident in your beef positioning, that is an implication that you expect to making money in beef in 2009. Is that fair?

Absolutely. Kenneth Zaslow - BMO Capital Markets: Okay. Great, I appreciate it.

Thanks.

Our next question comes from Robert Moskow with Credit Suisse. Your line is open. Robert Moskow - Credit Suisse: Hi. Thank you.

Good morning, Rob. Robert Moskow - Credit Suisse: Good morning. Can you give me, you have $250 million of cash on your balance sheet now. Is that going to be directed towards acquisition? What should we expect your debt levels to be say six months from now? Then secondly, can you help me separate the currency impact on exports from the tight credit environment presumably the tight credit environment can go away, but our protein is not as good of a relative value as it used to be for these export markets. So do you think that that has the risk of having a more permanent impact on our export ability?

Sure, Robert this is Dennis. I'll handle the first part. As far as the cash goes, the $250 million in cash is being used to invest in our business, and as Dick said earlier we invested $80 million in Brazil and have more spending on the way between CapEx internationally and also in China with Shandong Xinchangn. So it will be certainly invested back in the business. As far as debt goes, debt will go up because of the some of these same investments, but also because this GO Zone financing that we did with dynamic fuels, it's a 50-50 joint venture and because we put the credit support behind it that debt will show up as well. That's $100 million. So it will go up some. Robert Moskow - Credit Suisse: Okay.

Rob, on the export side, I do believe that the credit issues probably will go away. I don't know whether that's two months, four months, six months, but it probably is more of a short-term issue, and I would say for us and our customers, it has been less of an issue maybe than others. I'm not sure about that. I think the fact that the dollar has gotten stronger is certainly something that we are going to have to deal with, but if you think about areas of where protein can come from, and you think about high quality beef and you think about high quality pork, the US is going to be still the low cost producer on the beef and the pork side even with that change. So, I still see that being positive for us. The EU and other parts of the world can't create pork nearly as efficiently as we can. China has to use most, all of its support to feed its own people. So I think even though the currency and the value of the dollar has increased, on the beef and pork side, I still think we'll be the most favored nation if you will to help handle that desire for protein. On the chicken side, we really have to make sure that we stay as competitive as we possibly can with Brazil. I mean that's the other area that we are going to always have to compete with, and while yes, the dollar has gotten stronger. I still believe that because based on the fundamental demand for protein, the fundamental demand for chicken first because it converts feed better than the cattle or the hogs do. There is going to be demand for chicken, that there's going to be enough demand there, once some of these issues in the short-term stabilize for both the US and Brazil to continue to grow from an export perspective. Robert Moskow - Credit Suisse: What is it about our relative ability versus Brazil to make beef and pork sustainably more cost effective? Is it just we have a more professionalized method for slaughter and for raising?

No actually that we produce a totally different product than what Brazil does. Brazil is primarily grass fed. In other words it's not grain fed, or if it is grain fed, it's an extremely short fed grain process. I mean, really the US and Canada and to some degree Australia and New Zealand are the only areas that produce high quality grain fed beef and the Australian dollar has probably had as much strengthening as the US dollar. So from a beef perspective, we still are very competitive on a high quality grain fed product, which is the product that we produce as far as Tyson Foods is concerned. Robert Moskow - Credit Suisse: But internationally do you see increase demand for grass fed beef?

Actually, there has been increase demand, but there has also been increased demand for grain fed. If we can sometime in this next calendar year get Japan back up to a level of months higher than 20 months, either 30 months or all ages of cattle, it will dramatically change our beef exports to Asia as well. So I think there will be a continued need for high quality grain fed beef around the world. Robert Moskow - Credit Suisse: Okay. Thank you.

Our next question comes from Tim Ramey with D. A. Davidson. Your line is open.

Good morning, Tim. Timothy Ramey - D. A. Davidson & Co: Good morning. Dick in the last five or ten minutes, since you were talking to Ken Goldman, the stocks declined about 12%. I'm going to give you chance to rethink the answer you gave Ken. You said that demand was good for chicken, and I think the market just is not real pleased with that answer. Demand will be really good for dollars if you agree to sell them for $0.90 too. I mean you have got to take the point of view that demand is horrible. You are losing huge money. What are we missing here?

Well, I would tell you that as a company we are not building inventory, we are selling product week in and week out. Yes, prices are not where we would want them to be, but I would still contend that on the food service side, not counting casual and on the retail side, we are continuing to see strong demand for chicken. I mean, it is the best converter of feed. People are still eating protein, Tim, and it is a matter of time before this balance, if you will, of supply and price gets back in line. That might take another quarter. It might take another two quarters. But I believe that we are doing and we have done our part in the past. If you say the industry is now down on a hedge slaughtered basis in that 6% to 7%, we took more than that out in the last three or four years. So we've continued to do our part, and I think our plants and the efficiency of what we are doing day in and day out to improve our operations, I believe that the demand is there, and we are staying with the program that we are on. Now, I also said that we would continue to evaluate this on a very, very timely week to week basis, and we will do that. Timothy Ramey - D. A. Davidson & Co: Well Dick, a year ago you talked about price encourage, then when I was out with Donnie Smith four five months ago, you guys talked about well we're not going to be the one to cut. I don't know what kind of stock price is going to take get to change of heart, but let's just face it. This is not good profitability. Demand is not good. Demand, you are giving away dollars for $0.90, and I think we are going to have to take a hard look at that. That's my comment. Thanks.

Our next question comes from Christine McCracken with Cleveland research. Your line is open. Christine McCracken - Cleveland Research: Yes. Good morning.

Good morning Christine. Christine McCracken - Cleveland Research: Just in terms of demand, if you look at kind of flash forward some months and look at the type of pricing you are going to need to get back to profitability in chicken, and then what the produce is on the hog side and what to your guess, are you going to need to get back to kind of better results? You look at the current environment at current pricing and you say that demand is good, but that's at today's price. I guess I'm wondering how you look at demand at the pricing you need to restore profitability say in some months both here in the US and then how it's going to put us in even greater disadvantage in the export markets. How do you look at that scenario?

Well, Christina, I look at that and say that prices right now, if you take leg quarters and what has happened to leg quarters, you go back to six weeks ago and leg quarters were in the high 50s and they had built to that level all year long. Quite frankly, we have got mostly trade disruption, not demand that has caused that significant decline in terms of leg quarter values. It's really hard to say what kind of prices are going to be necessary, because there's so much volatility on the input side, that it's very difficult to determine what prices we are going to have to have, but I still contend that demand for chicken will remain good both domestically and will improve again from an export perspective as we see the continuing need for more protein primarily driven by chicken. You are right. I mean, nobody likes selling prices where they are today. But, ultimately this will not go on. It cannot go on forever. So there will be a time where these prices will materially rise, and that time frame is not years away, it's months away. Whether it's this quarter or next quarter or whether it has to wait till April or May, it is going to happen. One of the advantages that we have is we are a multi-protein company, and I still believe as I've said that our pork business will have a solid performance all next year. Our beef business will be profitable. We have a strong balance sheet, and I think we have solid, solid ideas of what we want to do and how we want to accomplish it. Christine McCracken - Cleveland Research: All right. Just in terms of the export situation, you know, you see now several weeks of disruptions tied to some of these events that you talked about relative to credit specifically with Russia. I think and now you've seen there is kind of disruption with Russia on the leg quarters situation. Inventories are building or have built for weeks now and historically when this has happened in one protein, we have had a huge kind of lag and how long it takes to work through that inventory? I'm wondering, if I'm looking at all three proteins now, not moving specifically into Russia but also I've heard of significant disruption into Mexico, for example, and things slow into some of the Asian countries, it's going to take a long time to work through all this inventory. So, why are you so optimistic on fiscal '09? It just seems very unlikely that we'll be able to move through all that meat in a short period of time and get the pricing back so quickly?

Well, I'm not sure, I can tell you that from an inventory perspective, probably we have seen a little bit of a build on the leg quarter, but that's not necessarily that they are not sold. It's more shipping and other disruption related activities, but we as a company are not building inventories on an overall basis. In other words, we are not building inventories of frozen beef. We are not building inventories of frozen pork. We are not building inventories of frozen prepared foods and other then leg quarters, we're not building any inventory from a chicken perspective. So, yes, maybe there is some building of inventories, but it is not occurring at Tyson Foods. So we have to look at it from the standpoint of how we look at these various markets, what we are being able to do domestically. I totally agree with you. We don't necessarily like the prices that we are selling at today, but I believe all those things are going to improve. As I've said, I mean it's our Q3 and Q4 that we believe will be significantly better. I've never said that we are going to have a great first half of the year that I am optimistic, very optimistic about the back half of the year not necessarily about the first half of the year and especially the first quarter. Christine McCracken - Cleveland Research: All right. I'll leave it there and follow up later. Thanks.

Our next question comes from Vincent Andrews with Morgan Stanley. Your line is open. Vincent Andrews - Morgan Stanley: Hi. Good morning, everyone.

Good morning. Vincent Andrews - Morgan Stanley: Well a lot of my questions has been answered. So, if you can just, Dick you talked about grain costs were up 600 and then total cost in chicken were up 900. Could you help us understand that other 300 and if, how much of that what isn't hedged, how much of that might have improved or should improve in fiscal '09 relative to fiscal '08?

Most of that 300 is made up of other ingredients that are necessary more for the value added side of the chicken. We have breading. We have batters, we have cooking oils and those are the primary things that makeup that additional. We use a lot of soybean oil and a lot of vegetable oil for our frying operations. So those are the types of things that I'm talking about in terms of other ingredients. We also had higher inputs in terms of energy, and those would be the main components of that $300 million. Vincent Andrews - Morgan Stanley: Directionally, should you get some relief on that next year?

Well, if energy prices were to stay where they are now, yes, we would definitely get some relief there, and we have seen declines in a lot of those other commodities. So it really depends upon what happens with the commodity markets. But, yes, there should be some significant savings over '08 if commodities in general were to stay kind of where they are at now. Vincent Andrews - Morgan Stanley: Okay. Then, if I can just ask, as we've all watched breast prices in leg quarter prices come down each week, how much of a surprise has that been? Can you characterize exactly what is causing the decline in breast meat prices and is there kind of a contagion between, now that leg quarters are going down, is that putting incremental pressure on breast meat prices as well?

Not necessarily. I think that the leg quarter pricing has put incremental pressure on the breast meat prices, but the pure fact is that from an industry perspective, there is too much supply from a breast meat perspective. There's no doubt about that. From a leg quarter perspective, I believe this is more driven not again by demand, but by unique trade disputes which are hopefully going to be relatively short lived. Vincent Andrews - Morgan Stanley: Okay, and then just a last question. When I think about, when we think about your volume being up 6% in chicken, just help me understand any sort of fine print in that. Does that mean specifically you grew 6% more chickens in this quarter year-over-year? Was there something about last year's quarter that made the comparison easier or difficult or what have you? How should we think about that number in the face of the current state of the chicken industry?

Our volume, not in terms of head but in terms of pounds was up 6% year-over-year. Part of that is in bird weight because in overall we have increased our bird weight as we have gone to as I said earlier, a few plants in larger bird weight. Plus I will also tell you that in fourth quarter, the conversion and the growing activity because of the weather not being quite as hot as typically in the South, especially during August and September, we actually processed more chicken in that quarter and processed some birds early because of the very good efficiencies and gains that we actually ran a few Saturdays, which in Q4 of '07 we didn't. Vincent Andrews - Morgan Stanley: Okay. I guess lastly, is that the type of volume that we should expect in fiscal '09?

In terms of year-over-year increases? Vincent Andrews - Morgan Stanley: Yes.

No, no. Vincent Andrews - Morgan Stanley: It will be more flat or --

Yes. Should be roughly flat. Vincent Andrews - Morgan Stanley: Thank you very much. I'll pass it on.

Our next question comes from Farha Aslam with Stephens Inc. Your line is open. Farha Aslam - Stephens Inc.: Good morning.

Good morning. Farha Aslam - Stephens Inc.: Hi. Just continuing on the export, could you share with us how current bookings, I know you booked beef into South Korea quite good. Kind of looking forward as you are looking at forward bookings for beef, are you still seeing the same level of demand as you are expressing that's been booked to date and how much is that demand for beef weakened?

I would tell you, I think that we did get a very, very strong pipeline filled out of South Korea. I think probably short-term demand there will probably get just a little bit softer, and we won't see that same level again because of the very, very strong pipeline filled, and we still haven't seen the retail side of South Korea be as aggressive with US beef and we are working with USMEF and our retail partners over there to try and get more US beef reestablished in South Korea. So in all honesty in the short-term, I think we could see a little bit of a pull back from South Korean perspective, but I still believe long-term South Korea will be a very, very strong market for us, once we get through and we get retail totally reestablished in South Korea. Farha Aslam - Stephens Inc.: Over the next three to six months looking at just Tyson's beef business, where do you think exports are going to be year-over-year?

It's a good question. I think probably from a dollars perspective, they'll probably be higher. I think from a volume perspective because we will have South Korea in there where we didn't have South Korea in there last year will be higher on a volume perspective as well. I'm not sure I can give you a number as to what percentage that is in the plan, because I don't know that off the top of my head. Farha Aslam - Stephens Inc.: Okay. Following on to Christine's question about pork exports, Tyson's pork export kind of looking forward in the next three months and the next six months, if you could just kind of give us some color about Tyson's export on that front.

I think our exports will be very strong to Japan. I think we will continue to have strong exports into Mexico. Russia again might be an issue here in the short-term, but by and large I think the majority of our export markets will continue to be good as the EU continues to decline and Canada continues to decline from availability and a sow herd, I still think that US pork will be in demand around the world. Farha Aslam - Stephens Inc.: So, you expect volumes to be up in the next six months for Tyson foods and pork, 3 to 6 months?

We were up hugely in '08 over '07. But, I would not tell you that we're going to be up significantly in '09 compared to '08. I still think we should be up slightly, but I don't think we'll be up like we were up in '08. Farha Aslam - Stephens Inc.: But I'm just trying to get the near term trends, our near terms are you seeing it weakened and softened the amount that's going overseas?

Actually the amount that's being totally exported from a pork perspective, we are not seeing an overall decline at this point. Farha Aslam - Stephens Inc.: Okay. Then, you've discussed the weakness in chicken. Where do you think leg quarters will bottom, and what are the factors that will allow it, that gives you confidence that that's the price that they will bottom in at?

I would tell you we are pretty close to the bottom. Farha Aslam - Stephens Inc.: So you are thinking the mid-teens is bottom?

Well I think mid to high teens is probably the bottom. You get much below that, you might just as well render it. So, yes. I think that is the bottom, and I think as soon as we get a satisfactory resolution in Russia, that will help, and I think hopefully that will be fourth coming. I know there are meetings later this week between USTR, USDA and the Russian government and hopefully the quota in these other trade technical issues will get resolved, and that will start back that process of rebuilding both demand and pricing from a leg quarter perspective. Farha Aslam - Stephens Inc.: So you anticipate leg quarters will start recovering in this January period or do you think it's going to be more the March period?

Probably later, probably later in calendar first quarter would be my guess. Farha Aslam - Stephens Inc.: Okay. Thank you very much.

Our next question comes from Diane Geissler with Merrill Lynch. Your line is open. Diane Geissler - Merrill Lynch: Good morning.

Good morning, Diane. Diane Geissler - Merrill Lynch: Dick could you just tell me how many more quarters of losses in chicken are you comfortable with before you actually do something about your production levels? How many more quarters are you willing to lose money in chicken?

Well, I've told you we would most likely lose money in Q1. If leg quarters don't improve till late March or sometime in the latter part of our fiscal Q2, whether that be late February or March, we could very well have a loss quarter in terms of our second quarter as well in chicken. I don't believe we will have a quarter beyond that. I think our third quarter or the calendar quarter of April through June will be profitable. Diane Geissler - Merrill Lynch: So, even with two potential loss quarters coming up, you still feel that your production level is appropriate?

Diane I said we would continue to look at that week in and week out, and we won't lose sight of that. But I'll still stand with my thought process that we are seeing what we are seeing from a demand and from a customer perspective and we are going to stay in that mode. Diane Geissler - Merrill Lynch: Okay. Well, I guess I struggle with your comments earlier where you say it has to get better, just has to because we can't keep going on as an industry this way. These types of comments and I guess my question is why does it have to get better if the number two chicken player, which has a quarter of the market isn't doing anything to reduce supply.

Well, I mean, I think as we always look at what happens come spring, demand as we get to the grilling season for chicken breast and what have you always improves. Again I think QSR continues to be good. I think you will see QSR continue to promote chicken. As I've said, I think the export markets will get better, once we get through the mid to late winter, and I'm not sure what capacity will either come out or not come out in the chicken industry between now and then. Diane Geissler - Merrill Lynch: Okay. I guess my other question is really about the language in your segment reporting regarding your grain hedging. You've changed some of the language. I'm reading this as boiler plate because it's in all of your new segments with regard to these net gains exclude the impact from related fiscal purchase transactions, which will impact future period operating results. Is there something there that we should sort of change in accounting?

There's no change. Actually I think that language has been in there the last three or four quarters. I don't believe that language is any different. Diane Geissler - Merrill Lynch: Okay. I check your last quarter and it wasn't there. So I just wanted to make sure that I wasn't reading more into that than I should?

No. Diane Geissler - Merrill Lynch: Okay. Thank you.

Thank you.

Our next question comes from Christopher Brocklehurst with Barclays Capital. Your line is open. Christopher Brocklehurst - Barclays Capital: Good morning.

Good morning, Chris. Christopher Brocklehurst - Barclays Capital: Just a quick question on the $160 million of hedging gains in the quarter. Of those, is there a certain portion that's mark-to-market and therefore should be excluded from the calculation for the leverage ratio covenant?

Yes. There would be some. Christopher Brocklehurst - Barclays Capital: Can you…

Chris, I'm not sure how much that is. We can probably follow up and get you a better determinant of that. Christopher Brocklehurst - Barclays Capital: Is it fair to assume that we were supposed to exclude a large enough chunk in that mark-to-market to the point where it would put you over the threshold for the covenant that that would be disclosed in your commentary or in your press release this morning?

Well remember Christina or Heather was asking about where we came in on the covenant and she said 310. I said it's more like 320. So that would factor all of that in Chris. Christopher Brocklehurst - Barclays Capital: So that calculation that includes all of the $161 million of hedging gains in the quarter?

Chris, I'm looking at our press release and don't see where it says 161. I see that we said partially offset by net gains of 78 for the quarter and 127 for the year. So that's year-over-year change. Christopher Brocklehurst - Barclays Capital: When you referred to, so in each of the segments I guess there was $78 million in chicken or this $77 million in beef, I guess the line with operating results would positively impact in the fourth quarter by net gains of $77 million from a commodity risk management activities? Is that separate from hedging?

No. That would be inclusive in there. What we haven’t broke out there specifically, what is mark-to-market would be excluded from the covenants, but I can tell you matter of factly that that number was not that large that the add back is what kept us under the covenant. So we weren't close to getting anywhere near our covenant on our debt to EBITDA covenant. Christopher Brocklehurst - Barclays Capital: Got it. So, excluding mark-to-market you did not reach that threshold?

No.

No were near. Christopher Brocklehurst - Barclays Capital: Okay. Then, as you mentioned it may be tight looking out to 1Q '09. So, I guess I'm curious if you've received explicit assurances from your lenders that if you were to trip that covenant that you would receive leniency or your commentary seems pretty optimistic, but is that just based on having a good relationship in general or is that something that you've received sort of explicit assurances on?

We have not received explicit assurances but it's really based on great historical relationships and also we keep our banks well informed where we are especially our key banks. Christopher Brocklehurst - Barclays Capital: Okay. Then, if I think about just the sort of the events right now transpiring in the industry or that may transpire, if there were to be a fairly significant process or filing for bankruptcy I'm just wondering would that have positive implications for Tyson because it will allow capacity to come out of the industry potentially or would it be more maybe near term negative because it would force liquidation of inventory at fairly cheap prices? I'm just wondering how we should look at the positives or negatives of such an event?

I really don't have any comment one way or the other and it would be wrong for me to have any comment. So I'm going to pass on that question. Christopher Brocklehurst - Barclays Capital: Okay. In chicken, are you right now on a more of a variable margin basis? Are you profitable at least on a variable margin basis, or losing money on that basis as well?

We are profitable in a couple of our divisions not in all of them, but we are close. Christopher Brocklehurst - Barclays Capital: So, is it fair then to assume the more commodity oriented divisions is where the profit, the variable contribution has been squeezed more?

Yes. Christopher Brocklehurst - Barclays Capital: Then I'm thinking just, so it seems like if you are not profitable on a variable contribution margin basis, then the easy decision would be not to produce more of what you are losing money on every time you produce it. So I guess why would you accept losing money on commodity items?

Again that would not necessarily have been true until this very, very rapid decline in leg quarter values, and that's something that is relatively new here in the last couple of three weeks, and Dennis said that overall we were profitable on a variable cost basis, and yes, there is a small portion that might not be, but by eliminating or reducing capacity, you can't just reduce capacity on a commodity basis because that's not how our business works. All of our plants do some level of value added activity as well. Christopher Brocklehurst - Barclays Capital: So, if the net of the value added activity is negative in that sort of scenario where that commodity business is losing money on a variable margin basis, and you expect that the near term, very near term could remain challenged and you are fairly close or at least tight anyway when it comes to the covenant threshold, why continue to produce near term? Given that it's only 6 to 7 week life cycle or 8 to 10 forward looking production management decision?

Again, as I've said, you can't look at a chicken and say this whole chicken is a commodity chicken because as an example we are further processing and doing a lot of work on wings and on tenders, chopped and formed products, so you need a number of parts of this chicken for value added activities, which are more than contributing at a variable cost level. So you really have to look at it in its entirety, and as I've said, we will continue to monitor our production levels based on the demand from our customers. Christopher Brocklehurst - Barclays Capital: Okay. So if Tyson were to cut production, you'd be disadvantaging the cost structure of some of your more value added businesses. So the net of Tyson cutting production would be overall a negative for the segment then?

For our segment, yes. Christopher Brocklehurst - Barclays Capital: For your chicken segment, if you were to cut production the net to profitability would be a negative impact overall?

In the short-term, absolutely. Christopher Brocklehurst - Barclays Capital: Okay. Thank you.

Our last question comes from Ann Gurkin with Davenport. Your line is open. Ann Gurkin - Davenport: Good morning.

Good morning Ann. Ann Gurkin - Davenport: Just wanted to clarify something. Dick I think you talked about you are not seeing an inventory build right now despite the export situation in the chicken segment, but we are hearing that Tyson has been looking for freezer space and so I'm just curious if you can reconcile what we are hearing with your statement this morning.

I do say that because of shipping and disruptions to Russia that we were having a slight build on leg quarters, and I did acknowledge that, but I think that's a short-term issue. I'm not aware of us specifically looking for new or different cold storage or freezer activity, but you might know something that I don't. But I did acknowledge that we have had a slight increase. I would tell you it's all sold. It's just a matter of getting it shipped. A matter of getting our customers to make sure that they give us the dollars before we need to load the vessels. So some of that is more around logistics than it is not having the product sold. Ann Gurkin - Davenport: Okay. Then, if we go back to, I guess when we went through an oversupply of chicken and demand was falling off and I seem to recall that one of the objective was really to keep the capacity open and could keep max market share in place. Are you meeting your objective, you now have three negative quarters in chicken, looking at maybe two more or who knows? Is it really meeting your objective?

I think that we are meeting our objectives in terms of attempting to improve our business both from a value added standpoint and from optimizing our commodity business models. Those two strategies, I think we are making a lot of progress that I'm very proud of. These benchmarking studies that we participate in will show us improving dramatically, and for that reason and that reason alone, we are very pleased with the changes and the progress that we are making in our chicken business. Ann Gurkin - Davenport: Even though you are incurring tremendous losses?

Even though we are incurring losses. That's correct. Ann Gurkin - Davenport: All right. Thank you very much.

We have no further questions.

Well, let me just conclude by saying it's evident that on the chicken side, you all think we should be cutting production. I will tell you, we will continue to monitor that, but I still believe that the improvements that we've put in place and what we are doing to match demand with supply is the right thing for Tyson Foods. I would also tell you that we are a diversified portfolio company in terms of participating in all three of the major proteins and believe that's a very imperative part of our overall company position. We have a strong balance sheet, and we will continue to be a leader in the protein industry and feel very confident about our future. I thank you for participating with us today and look forward to talking to you in the future. Thank you.

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