Tyson Foods 2001 Annual Report Download - page 43

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2001 ANNUAL REPORT
Fair Values of Financial Instruments
in millions
2001 2000
Commodity derivative positions
$(8) $(9)
Interest-rate derivative positions
(6) –
Foreign currency derivative positions
(1) –
Long-term debt $4,740 $1,430
Fair values are based on quoted market prices or published
forward interest rate curves. All other financial instruments
approximate recorded values at September 29, 2001, and
September 30, 2000.
Concentrations of Credit Risk: The Company’s financial instru-
ments that are exposed to concentrations of credit risk consist
primarily of cash equivalents and trade receivables. The Company’s
cash equivalents are in high quality securities placed with major
banks and financial institutions. Concentrations of credit risk
with respect to receivables are limited due to the large number
of customers and their dispersion across geographic areas. The
Company performs periodic credit evaluations of its customers’
financial condition and generally does not require collateral. No
single customer or customer group represents greater than 10%
of total accounts receivable.
NOTE 7: PROPERTY, PLANT AND EQUIPMENT
The major categories of property, plant and equipment and
accumulated depreciation, at cost, are as follows:
in millions
2001 2000
Land
$ 114 $61
Buildings and leasehold
improvements
2,085 1,291
Machinery and equipment
3,218 2,219
Land improvements and other
174 110
Buildings and equipment under
construction 379 103
5,970 3,784
Less accumulated depreciation 1,885 1,643
Net property, plant and equipment $4,085 $2,141
The Company capitalized interest costs of $3 million in 2001,
$2 million in 2000 and $5 million in 1999 as part of the cost of
major asset construction projects. Approximately $182 million
will be required to complete construction projects in progress at
September 29, 2001.
NOTE 8: OTHER CURRENT LIABILITIES
Other current liabilities at September 29, 2001 include:
in millions
2001 2000
Accrued salaries, wages and benefits
$222 $104
Income taxes payable
109 60
Self insurance reserves
221 102
Property and other taxes
63 27
Other 228 62
Total other current liabilities $843 $355
NOTE 9: COMMITMENTS
The Company leases certain farms and other properties and
equipment for which the total rentals thereon approximated
$76 million in 2001, $66 million in 2000 and $64 million in 1999.
Most farm leases have terms ranging from one to 10 years with
various renewal periods. The most significant 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 29, 2001, total $193 million composed of $62 million
for 2002, $42 million for 2003, $28 million for 2004, $19 million for
2005, $15 million for 2006 and $27 million for later years. These
future commitments are expected to be offset by future mini-
mum lease payments to be received under subleases of approx-
imately $9 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 oper-
ation of the facilities should a grower default under their growout
or loan agreement. The Company also guarantees debt of
outside third parties of $69 million.