Tyson Foods 2000 Annual Report Download - page 42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TYSON FOODS, INC. 2000 ANNUAL REPORT
Under the terms of the leveraged equipment loans, the
Company had restricted cash totaling approximately $49 mil- lion which is included in other assets at September 30, 2000. Under these leveraged loan agreements, the Company entered into interest rate swap agreements to effectively lock in a fixed interest rate for these borrowings.
Annual maturities of long-term debt for the five years
subsequent to September 30, 2000, are: 2001– $123 million; 2002 – $307 million; 2003 – $178 million; 2004 – $29 million and 2005 – $180 million.
The revolving credit agreement and notes contain various
covenants, the more restrictive of which require maintenance of a minimum net worth, current ratio, cash flow coverage of interest and fixed charges and a maximum total debt-to- capitalization ratio. The Company is in compliance with these covenants at fiscal year end.
Industrial revenue bonds are secured by facilities with a
net book value of $64 million at September 30, 2000. The weighted average interest rate on all outstanding short-term borrowing was 6.8% at September 30, 2000, and 5.5% at October 2, 1999.
Long-term debt consists of the following:
in millions
Maturity 2000 1999
Commercial paper (6.7%
effective rate at 9/30/00) 2002 $ 260 $ 291
Debt securities:
6.75% notes 2005 149 150 6.625% notes 2006 149 150 6.39 – 6.41% notes 2001 –50
6% notes 2003 149 148 7% notes 2028 147 146 7% notes 2018 237 236
Institutional notes:
10.61% notes 2001 –53
10.84% notes 2002–2006 50 50
11.375% notes 1999–2002 48
Leveraged equipment loans
(rates ranging from 4.7% to 6.0%) 2005–2008 138 154
Other various 74 79 Total long-term debt $1,357 $1,515
NOTE 11: STOCK OPTIONS AND RESTRICTED STOCK The Company has a nonqualified stock option plan that provides for granting options for shares of Class A stock at a price not less than the fair market value at the date of grant. The options generally become exercisable ratably over three to eight years from the date of grant and must be exer- cised within 10 years of the grant date.
On May 4, 2000, the Company cancelled approximately
4.3 million option shares and granted approximately 1 mil- lion restricted shares of Class A common stock. The restric- tion expires over periods through December 1, 2003. At September 30, 2000, the Company had outstanding 1,146,900 restricted shares of Class A common stock with restrictions expiring over periods through July 1, 2020. The unearned portion of the restricted stock is classified on the Consolidated Balance Sheets as deferred compensation in shareholders’ equity.
A summary of the Company’s stock option activity for
the nonqualified stock option plan is as follows:
Weighted
Shares average exercise
under option price per share
Outstanding, September 27, 1997 8,342,334 $15.99 Exercised (178,467) 14.18 Canceled (313,019) 15.84 Granted 504,700 18.00 Outstanding, October 3, 1998 8,355,548 16.15 Exercised (359,999) 14.23 Canceled (631,717) 16.35 Granted 4,722,500 15.00 Outstanding, October 2, 1999 12,086,332 15.74 Exercised (88,332) 14.23 Canceled (5,199,995) 15.17 Outstanding, September 30, 2000 6,798,005 $16.19
The number of options exercisable was as follows:
September 30, 2000 – 2,926,980; October 2, 1999 – 1,870,893 and October 3, 1998 –1,202,498. The remainder of the options outstanding at September 30, 2000, are exercisable ratably through November 2007. The number of shares available for future grants was 7,568,614 and 2,368,619 at September 30, 2000, and October 2, 1999, respectively.
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