Tyson Foods 2001 Annual Report Download - page 37

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2001 ANNUAL REPORT
NOTE 1: BUSINESS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Description of Business: Tyson Foods, Inc. (the Company or
Tyson), with its acquisition of IBP, inc. (IBP), is the world’s largest
protein provider. Tyson’s chicken operation, headquartered in
Springdale, Arkansas, is the world’s largest fully integrated
producer, processor and marketer of chicken and chicken-based
convenience foods, with 68,000 team members and 7,000
contract growers in 100 communities. Tyson has chicken opera-
tions in 18 states and 16 countries and exports to more than
75 countries worldwide. Tyson is the recognized market leader
in almost every retail and foodservice market it serves and is a
comprehensive supplier of value-added chicken products through
foodservice, retail grocery stores, club stores and international
distribution channels. Tyson’s Cobb-Vantress subsidiary is a leading
chicken breeding stock supplier. In addition, Tyson is the nation’s
second largest maker of corn and flour tortillas under the Mexican
Original®brand, as well as a leading provider of live swine.
Tyson’s wholly owned subsidiary IBP, headquartered in
Dakota Dunes, South Dakota, is the world’s largest supplier of
premium fresh beef and pork products, with more than 60 pro-
duction sites in North America, joint venture operations in
China, Ireland and Russia and sales offices throughout the
world. IBP generated annual sales of approximately $17 billion
in 2000 and employs approximately 52,000 people.
The new Tyson Foods, Inc. is the world’s largest processor
and marketer of beef, chicken and pork products and produces
a wide variety of brand name, processed food products. Tyson
is the recognized market leader in almost every retail and food-
service market it serves. The Company has approximately
120,000 team members in more than 300 facilities and offices in
32 states and 22 countries worldwide.
Consolidation: The consolidated financial statements include the
accounts of all wholly owned subsidiaries. The consolidated state-
ments of income include IBP’s operating results for the nine
weeks ending September 29, 2001. All significant intercompany
accounts and transactions have been eliminated in consolidation.
Fiscal Year: The Company utilizes a 52- or 53-week accounting
period that ends on the Saturday closest to September 30.
Reclassifications: Certain reclassifications have been made to
prior periods to conform to current presentations.
Cash and Cash Equivalents: Cash equivalents consist of invest-
ments in short-term, highly liquid securities having original
maturities of three months or less, which are made as part of the
Company’s cash management activity. The carrying values of
these assets approximate their fair market values. As a result of
the Company’s cash management system, checks issued, but
not presented to the banks for payment, may create negative
cash balances. Checks outstanding in excess of related cash
balances totaling approximately $265 million at September 29,
2001, and $126 million at September 30, 2000, are included in
trade accounts payable and other current liabilities.
Inventories: Processed products, livestock (excluding breeders)
and supplies and other are valued at the lower of cost (first-in,
first-out) or market. Breeders are stated at cost less amortiza-
tion. Livestock includes live cattle, live chicken and live swine.
Live chicken consists of broilers and breeders.
Total inventory consists of:
in millions
2001 2000
Processed products
$1,095 $460
Livestock
561 366
Supplies and other 255 139
Total inventory $1,911 $965