Tyson Foods 2003 Annual Report Download - page 44

42 Tyson Foods, Inc.
notes to consolidated financial statements
TYSON FOODS, INC. 2003 ANNUAL REPORT
note 7:
property, plant and equipment
The major categories of property, plant and equipment
and accumulated depreciation at cost, at September 27,
2003, and September 28, 2002, are as follows:
in millions 2003 2002
Land $ 113 $ 111
Buildings and leasehold
improvements 2,293 2,154
Machinery and equipment 3,886 3,419
Land improvements and other 184 185
Buildings and equipment
under construction 177 414
6,653 6,283
Less accumulated depreciation 2,614 2,245
Net property, plant and
equipment $ 4,039 $ 4,038
The Company capitalized interest costs of $3 million in 2003,
$9 million in 2002 and $3 million in 2001 as part of the
cost of major asset construction projects. Approximately
$175 million will be required to complete construction
projects in progress at September 27, 2003.
note 8:
other current liabilities
Other current liabilities at September 27, 2003, and
September 28, 2002, include:
in millions 2003 2002
Accrued salaries, wages
and benefits $ 263 $ 308
Self insurance reserves 243 225
Income taxes payable 244 202
Property and other taxes 52 52
Other 345 297
Total other current liabilities $ 1,147 $1,084
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7note 9:
commitments
The Company leases certain farms and other properties
and equipment for which the total rentals thereon
approximated $104 million in 2003, $105 million in 2002
and $76 million in 2001. Most farm leases have terms
ranging from one to 10 years with varying renewal peri-
ods. 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 non-cancelable
leases at September 27, 2003, total $164 million composed
of $61 million for fiscal 2004, $36 million for fiscal 2005,
$30 million for fiscal 2006, $21 million for fiscal 2007,
$11 million for fiscal 2008 and $5 million for later years.
The Company guarantees debt of outside third parties,
which involve letters of credit, a lease and grower loans,
all of which are substantially collateralized by the underly-
ing assets. Terms of the underlying debt range from one
to 12 years and the maximum potential amount of future
payments as of September 27, 2003, was $68 million.
The Company also maintains operating leases for various
types of equipment, some of which contain residual value
guarantees for the market value for assets at the end of
the term of the lease. The terms of the lease maturities
range from one to six years. The maximum potential
amount of the residual value guarantees is approximately
$104 million, of which approximately $31 million would
be recoverable through various recourse provisions and
an undeterminable recoverable amount based on the
fair market value of the underlying leased assets. The
likelihood of payments under these guarantees is not
considered probable.
The Company enters into various future purchase commit-
ments for finished live cattle and hogs at a market-derived
price. These future purchase commitments include risk
sharing and procurement arrangements with certain
producers that help secure a supply of livestock. The
commitments deliverable in any year are less than the
operating requirements of that year.
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