Tyson Foods 2000 Annual Report Download - page 41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2000 ANNUAL REPORT
On January 20, 2000, McCarty Farms, Inc. (McCarty),
a former subsidiary of the Company which has been merged into the Company, was indicted in the U.S. District Court for the Southern District of Mississippi, Jackson Division, for conspiracy to violate the federal Clean Water Act. The alleged conspiracy arose out of McCarty’s partial ownership of Central Industries, Inc. (Central), which oper- ates a rendering plant in Forest, Miss. On November 3, 2000, Central pled to 25 counts of knowing violations of the Act and one count of conspiracy pursuant to a plea agreement, which resulted in a $14 million fine against Central payable over five years. The conspiracy indictment against McCarty and other Central shareholders was dismissed. A related civil proceeding by the United States arising from the same circumstances, and a state environmental administrative complaint were also fully resolved and dismissed as a part of Central’s Plea Agreement.
The Company’s Sedalia, Mo., facility is currently under
investigation by the U.S. Attorney’s office of the Western District of Missouri for possible violations of environmental laws or regulations. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this investigation can be determined at this time.
On October 17, 2000, a Washington County (Arkansas)
Chancery Court jury awarded the Company approximately $20 million in its lawsuit against ConAgra, Inc. and ConAgra Poultry Company. In its suit, the Company alleged that ConAgra, Inc. and ConAgra Poultry Company violated the Arkansas Trade Secrets Act when they improperly obtained and implemented Tyson’s confidential feed nutrient profile. The court ruled that the Company’s feed nutrient profile is a trade secret under the Arkansas Trade Secrets Act and that ConAgra, Inc. and ConAgra Poultry Company misappropri- ated the feed nutrient profile. The court’s ruling and the award are subject to appeal; therefore, the Company has not recorded this award at September 30, 2000.
NOTE 9: COMMITMENTS The Company leases certain farms and other properties and equipment for which the total rentals thereon approximated $66 million in 2000, $64 million in 1999 and $47 million in 1998. Most farm leases have terms ranging from one to 10 years with various renewal periods. The most signifi- cant obligations assumed under the terms of the leases are the upkeep of the facilities and payments of insurance and property taxes.
Minimum lease commitments under noncancelable leases
at September 30, 2000, total $124 million composed of $54 million for 2001, $34 million for 2002, $18 million for 2003, $9 million for 2004, $5 million for 2005 and $4 million for later years. These future commitments are expected to be offset by future minimum lease payments to be received under subleases of approximately $12 million.
The Company assists certain of its swine and chicken
growers in obtaining financing for growout facilities by providing the growers with extended growout contracts and conditional operation of the facilities should a grower default under their growout or loan agreement. The Company also guarantees debt of outside third parties of $41 million. NOTE 10: LONG-TERM DEBT The Company has an unsecured revolving credit agreement totaling $1 billion that supports the Company’s commercial paper program. This $1 billion facility expires in May 2002. At September 30, 2000, $260 million in commercial paper was outstanding under this facility.
At September 30, 2000, the Company had outstanding
letters of credit totaling approximately $99 million issued primarily in support of workers’ compensation insurance programs, industrial revenue bonds and the leveraged equip- ment loans.
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