Tyson Foods 2001 Annual Report Download - page 48

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46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TYSON FOODS, INC. 2001 ANNUAL REPORT
The weighted average fair value of options granted during
2001 was approximately $4.24. The fair value of each option
grant is established on the date of grant using the Black-Scholes
option-pricing model. Assumptions include an expected life of
six years, risk-free interest rate of 4.8%, expected volatility of
35.2% and dividend yield of 1.4% in 2001.
The Company applies Accounting Principles Board Opinion
No. 25 and related interpretations in accounting for its employee
stock option plans. Accordingly, no compensation expense was
recognized for its stock option plans. Had compensation cost for
the employee stock option plans been determined based on the
fair value method of accounting for the Company’s stock option
plans, the tax-effected impact would be as follows:
in millions, except per share data
2001
2000 1999
Net Income
As reported
$88
$ 151 $ 230
Pro forma
85
148 226
Earnings per share
As reported
Basic
0.40
0.67 1.00
Diluted
0.40
0.67 1.00
Pro forma
Basic
0.38
0.66 0.98
Diluted
0.38
0.65 0.98
Pro forma net income reflects only options granted after
fiscal 1995. Additionally, the pro forma disclosures are not likely
to be representative of the effects on reported net income for
future years.
NOTE 12: BENEFIT PLANS
The Company has defined contribution retirement and incentive
benefit programs for various groups of Company personnel.
Company contributions totaled $35 million, $32 million and
$33 million in 2001, 2000 and 1999, respectively.
NOTE 13: TRANSACTIONS
WITH RELATED PARTIES
The Company has operating leases for farms, equipment and
other facilities with the former Senior Chairman of the Board of
Directors of the Company and certain members of his family, as
well as a trust controlled by him, for rentals of $9 million in 2001,
$7 million in 2000 and $7 million in 1999. Other facilities have
been leased from other officers and directors for rentals totaling
$2 million in 2001, $3 million in 2000 and $3 million in 1999.
Certain officers and directors are engaged in chicken and
swine growout operations with the Company whereby these
individuals purchase animals, feed, housing and other items to
raise the animals to market weight. The total value of these
transactions amounted to $10 million in 2001, $11 million in 2000
and $10 million in 1999.
Certain unimproved real property was sold by the Company
in June 2000 to an entity controlled by the daughter and
son-in-law of the former Senior Chairman of the Board for approx-
imately $5 million. The purchase price was in excess of the market
value as determined by a current independent appraisal.
NOTE 14: INCOME TAXES
Detail of the provision for income taxes consists of:
in millions
2001
2000 1999
Federal
$50
$73 $113
State
5
58
Foreign
3
58
$58
$83 $129
Current
$105
$36 $142
Deferred
(47)
47 (13)
$58
$83 $129