Tyson Foods 2001 Annual Report Download - page 28

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26
MANAGEMENT
’S DISCUSSION AND ANALYSIS
TYSON FOODS, INC. 2001 ANNUAL REPORT
LIQUIDITY AND CAPITAL RESOURCES Cash provided
by operations continues to be the Company’s primary source of
funds to finance operating needs and capital expenditures. In
2001, net cash of $511 million was provided by operating
activities, a decrease of $76 million from 2000. The Company’s
foreseeable cash needs for operations and capital expenditures
are expected to continue to be met through cash flows provided
by operating activities. At September 29, 2001, the Company had
construction projects in progress that will require approximately
$182 million to complete.
CASH PROVIDED BY OPERATING ACTIVITIES
dollars in millions
Total debt at September 29, 2001, was $4.8 billion, an
increase of $3.3 billion from September 30, 2000, due primarily
to funding the IBP acquisition and assumption of IBP debt. The
Company has unsecured revolving credit agreements totaling
$1 billion that support the Company’s commercial paper program.
These $1 billion in facilities consist of $500 million that expires in
September 2002, and $500 million that expires in September
2006. At September 29, 2001, $210 million and $500 million
were outstanding under these facilities. Additional outstanding
debt at September 29, 2001, included $2.3 billion under a
Bridge Facility, $833 million of senior notes originally issued by
Tyson, $623 million of senior notes originally issued by IBP and
subsequently guaranteed by Tyson and other indebtedness of
$292 million.
TOTAL CAPITALIZATION
dollars in billions
Debt Equity
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 a maximum total debt-to-capitalization ratio. The
Company is in compliance with these covenants at fiscal year end.
In August 2001, the Company completed the financing for
the acquisition of IBP by entering into two bridge revolving
credit facilities consisting of a senior unsecured bridge credit
agreement which provided for aggregate borrowings up to
$2.5 billion (the Bridge Facility) and a senior unsecured receiv-
ables bridge credit agreement which provided for aggregate
borrowings up to $350 million (the Receivables Bridge Facility).
The Bridge Facility was to mature in January 2002, and the
Receivables Bridge Facility matured in November 2001. At
September 29, 2001, $2.3 billion was outstanding under the
Bridge Facility with an interest rate of 4.01%. There were no
borrowings under the Receivables Bridge Facility.
Subsequent to September 29, 2001, the Company refinanced
the Bridge Facility through the issuance of $2.25 billion of senior
notes sold in three tranches consisting of $500 million of 6.625%
notes due October 2004, $750 million of 7.25% notes due October
2006 and $1 billion of 8.25% notes due October 2011.
’01
’00
’99
511
547
587
’01
’00
’99
2.2
1.8
1.5
4.8
3.4
3.4
2.1