Item 6. SELECTED FINANCIAL DATA

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Item 6. SELECTED FINANCIAL DATA

FIVE-YEAR FINANCIAL SUMMARY

in millions, except per share, percentage and ratio data
20172016201520142013
Summary of Operations
Sales$38,260$36,881$41,373$37,580$34,374
Operating income2,9312,8332,1691,4301,375
Net interest expense272243284125138
Income from continuing operations1,7781,7721,224856848
Loss from discontinued operation, net of tax————(70)
Net income1,7781,7721,224856778
Net income attributable to Tyson1,7741,7681,220864778
Diluted net income per share attributable to Tyson:
Income from continuing operations4.794.532.952.372.31
Loss from discontinued operation————(0.19)
Net income4.794.532.952.372.12
Dividends declared per share:
Class A0.9750.6500.4250.3250.310
Class B0.8780.5850.3830.2940.279
Balance Sheet Data
Cash and cash equivalents$318$349$688$438$1,145
Total assets28,06622,37322,96923,90612,167
Total debt10,2036,2796,6908,1282,398
Shareholders’ equity10,5599,6249,7068,9046,233
Other Key Financial Measures
Depreciation and amortization$761$705$711$530$519
Capital expenditures1,069695854632558
EBITDA3,6483,5382,9061,8971,818
Return on invested capital16.3%18.1%13.4%11.9%18.5%
Effective tax rate for continuing operations32.3%31.8%36.3%31.6%32.6%
Total debt to capitalization49.1%39.5%40.8%47.7%27.8%
Book value per share$28.72$25.67$24.25$21.86$18.13
Stock price high75.3377.0545.1044.2432.40
Stock price low55.7242.8937.0227.3315.93

Notes to Five-Year Financial Summary

a.Fiscal 2017 net income included $103 million pretax expense of AdvancePierre purchase accounting and acquisition related costs, pretax impairment charges of $52 million related to our San Diego Prepared Foods operation and $45 million related to the expected sale of a non-protein business and pretax restructuring and related charges of $150 million.
b.Fiscal 2016 net income included $53 million related to the recognition of previously unrecognized tax benefits and audit settlements. In fiscal 2016, we adopted new accounting guidance, retrospectively, requiring classification of debt issuance costs as a reduction of the carrying value of the debt. In doing so, $29 million, $35 million, $50 million and $10 million of deferred issuance costs have been reclassified from Other Assets to Long-Term Debt in our Consolidated Balance Sheets for fiscal 2016, 2015, 2014 and 2013 respectively. This change is reflected above in total assets, total debt, total debt to capitalization and return on invested capital ratios.
c.Fiscal 2015 was a 53-week year, while the other years presented were 52-week years. Fiscal 2015 included a $169 million pretax impairment charge related to our China operation, $57 million pretax expense related to merger and integration costs, $59 million pretax impairment charges related to our Prepared Foods network optimization, $12 million pretax charges related to Denison impairment and plant closure costs, $8 million pretax gain related to net insurance proceeds (net of costs) related to a legacy Hillshire Brands plant fire, $21 million pretax gain on the sale of equity securities, $161 million pretax gain on the sale of the Mexico operation, $39 million pretax gain related to the impact of the additional week in fiscal 2015 and $26 million unrecognized tax benefit gain.
d.Fiscal 2014 included a $42 million pretax impairment charge and other costs related to the sale of our Brazil operation and Mexico's undistributed earnings tax, $197 million pretax expense related to the Hillshire Brands acquisition, integration and costs associated with our Prepared Foods improvement plan, $40 million pretax expense related to the Hillshire Brands post-closing results, purchase price accounting, and costs related to a legacy Hillshire Brands plant fire, $27 million pretax expense related to the Hillshire Brands acquisition financing incremental interest cost and $52 million unrecognized tax benefit gain.
e.Fiscal 2013 included a $19 million currency translation adjustment gain recognized in conjunction with the receipt of proceeds constituting the final resolution of our investment in Canada. Additionally, in fiscal 2013 we determined our Weifang operation (Weifang) was no longer core to the execution of our strategy in China. In July 2013, we completed the sale of Weifang. Non-cash charges related to the impairment of assets in Weifang amounted to $56 million in fiscal 2013.
f.Return on invested capital is calculated by dividing operating income by the sum of the average of beginning and ending total debt and shareholders’ equity less cash and cash equivalents.
g.For the total debt to capitalization calculation, capitalization is defined as total debt plus total shareholders’ equity.
h.Book value per share is calculated by dividing shareholders’ equity by the sum of Class A and B shares outstanding and the remaining minimum shares that were to be issued from our tangible equity units for each period.
i."EBITDA" is a Non-GAAP measure and defined as net income less interest income, plus interest, taxes, depreciation and amortization. A reconciliation of net income to EBITDA immediately follows.

EBITDA RECONCILIATIONS

A reconciliation of net income to EBITDA is as follows:

in millions, except ratio data
20172016201520142013
Net income$1,778$1,7721,224$856$778
Less: Interest income(7)(6)(9)(7)(7)
Add: Interest expense279249293132145
Add: Income tax expense (a)850826697396411
Add: Depreciation642617609494474
Add: Amortization (b)10680922617
EBITDA$3,648$3,538$2,906$1,897$1,818
Total gross debt$10,203$6,279$6,690$8,128$2,398
Less: Cash and cash equivalents(318)(349)(688)(438)(1,145)
Less: Short-term investments(3)(4)(2)(1)(1)
Total net debt$9,882$5,926$6,000$7,689$1,252
Ratio Calculations:
Gross debt/EBITDA2.8x1.8x2.3x4.3x1.3x
Net debt/EBITDA2.7x1.7x2.1x4.1x0.7x
(a)Includes income tax expense of discontinued operation.
(b)Excludes the amortization of debt issuance and debt discount expense of $13 million, $8 million, $10 million, $10 million and $28 million for fiscal 2017, 2016, 2015, 2014 and 2013, respectively, as it is included in Interest expense.

EBITDA represents net income, net of interest, income tax and depreciation and amortization. Net debt to EBITDA represents the ratio of our debt, net of cash and short-term investments, to EBITDA. EBITDA and net debt to EBITDA are presented as supplemental financial measurements in the evaluation of our business. We believe the presentation of these financial measures helps investors to assess our operating performance from period to period, including our ability to generate earnings sufficient to service our debt, and enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies; however, the measurements of EBITDA and net debt to EBITDA may not be comparable to those of other companies, which limits their usefulness as comparative measures. EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with generally accepted accounting principles (GAAP) and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity. EBITDA is a useful tool for assessing, but is not a reliable indicator of, our ability to generate cash to service our debt obligations because certain of the items added to net income to determine EBITDA involve outlays of cash. As a result, actual cash available to service our debt obligations will be different from EBITDA. Investors should rely primarily on our GAAP results, and use non-GAAP financial measures only supplementally, in making investment decisions.

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