Tyson Foods 2009 Annual Report Download - page 76

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The fourth quarter of fiscal 2009 was a 14-week period, while the remaining quarters in the above table were 13-week periods.
Second quarter fiscal 2009 operating income included a $15 million charge related to the closing of a prepared foods processed meats
plant. Fourth quarter fiscal 2009 operating loss included a $560 million non-cash charge related to the partial impairment of the Beef
segment’s goodwill.
First quarter fiscal 2008 income from continuing operations before income taxes includes an $18 million non-operating gain related to
sale of an investment and a $6 million severance charge related to the FAST initiative. Second quarter fiscal 2008 income from
continuing operations before income taxes includes $47 million in charges related to restructuring a beef plant operation, closing a
poultry plant, impairment of packaging equipment and software impairments. Third quarter fiscal 2008 loss from continuing
operations before income taxes includes $13 million in charges related to flood damage and impairment of unimproved real property.
Fourth quarter fiscal 2008 income from continuing operations before income taxes includes a $10 million charge related to intangible
asset impairments.
NOTE 22: CAPITAL STRUCTURE
In September 2008, we issued 22.4 million shares of Class A stock as part of a public offering. The shares were offered at $12.75. Net
proceeds, after underwriting discounts and commissions, of approximately $274 million were used toward the repayment of our
borrowings under the accounts receivable securitization facility and for other general corporate purposes. An entity controlled by Don
Tyson purchased three million shares of Class A stock in this offering.
During fiscal 2007, Tyson Limited Partnership converted 15.9 million shares of Class B stock to Class A stock on a one-for-one basis.
NOTE 23: CONTINGENCIES
Listed below are certain claims made against the Company and our subsidiaries. In our opinion, we have made appropriate and
adequate reserves, accruals and disclosures where necessary, and believe the probability of a material loss beyond the amounts
accrued to be remote; however, the ultimate liability for these matters is uncertain, and if accruals and reserves are not adequate, an
adverse outcome could have a material effect on the consolidated financial condition or results of operations. We believe we have
substantial defenses to the claims made and intend to vigorously defend these cases.
In 2000, the Wage and Hour Division of the U.S. Department of Labor (DOL) conducted an industry-wide investigation of poultry
producers, including us, to ascertain compliance with various wage and hour issues. As part of this investigation, the DOL inspected
14 of our processing facilities. On May 9, 2002, the DOL filed a civil complaint styled Elaine L. Chao (now Hilda L. Solis), Secretary
of Labor, United States Department of Labor v. Tyson Foods, Inc. against us in the U.S. District Court for the Northern District of
Alabama. The plaintiffs allege in the complaint that we violated the overtime provisions of the federal Fair Labor Standards Act
("FLSA") at our chicken-processing facility in Blountsville, Alabama. Through discovery and trial, the Secretary of Labor sought to
require us to compensate all hourly chicken processing workers for pre- and post-shift clothes changing, washing and related
activities and for one of two unpaid 30-minute meal periods. The Secretary of Labor sought back wages for all employees at the
Blountsville facility for a period of two years prior to the date of the filing of the complaint and an injunction against future violations
at that facility and all other chicken processing facilities we operate. The District Court granted the Company’s motion for partial
summary judgment in part, ruling that the second meal period is appropriately characterized as non-compensable, and reserved the
remaining issues for trial. A jury trial began on February 2, 2009, and concluded with a mistrial on April 13, 2009, when the jury
failed to reach a unanimous verdict. A second jury trial was held, beginning on August 25, 2009. The jury reached a verdict on
November 4, 2009, and it determined that Blountsville team members performed work for which they were not compensated and
awarded $250,000 in damages for a nine-year period. The jury also determined that the Company’s recordkeeping for hours of work
did not violate the FLSA. The court has ordered the parties to mediation within the next sixty (60) days, and it has also set a February
15, 2010 trial date for the injunctive phase of trial.
Several private lawsuits are pending against us alleging that we failed to compensate poultry plant employees for all hours worked,
including overtime compensation, in violation of the FLSA. These lawsuits include DeAsencio v. Tyson Foods, Inc. (DeAsencio),
filed on August 22, 2000, in the U.S. District Court for the Eastern District of Pennsylvania. This matter involves similar allegations
that employees should be paid for the time it takes to engage in pre- and post-shift activities such as changing into and out of
protective and sanitary clothing, obtaining clothing and walking to and from the changing area, work areas and break areas. They seek
back wages, liquidated damages, pre- and post-judgment interest, and attorneys’ fees. Plaintiffs appealed a jury verdict and final
judgment entered in our favor on June 22, 2006, in the District Court for the Eastern District of Pennsylvania. On September 7, 2007,
the U.S. Court of Appeals for the Third Circuit reversed the jury verdict and remanded the case to the District Court for further
proceedings. We sought rehearing en banc, which was denied by the Court of Appeals on October 5, 2007. The United States
Supreme Court denied our petition for a writ of certiorari on June 9, 2008. The new trial date has not been set.