Tyson Foods 2012 Annual Report Download - page 13

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Chicken: Chicken processing plants include various phases of slaughtering, dressing, cutting, packaging, deboning and further-
processing. We also have 16 pet food operations, which are part of the Chicken processing plants. The blending mills, feed mills and
broiler hatcheries have sufficient capacity to meet the needs of the chicken growout operations.
Beef: Beef plants include various phases of slaughtering live cattle and fabricating beef products. Some also treat and tan hides. The
Beef segment includes three case-ready operations that share facilities with the Pork segment. One of the beef facilities contains a
tallow refinery. Carcass facilities reduce live cattle to dressed carcass form. Processing facilities conduct fabricating operations to
produce boxed beef and allied products.
Pork: Pork plants include various phases of slaughtering live hogs and fabricating pork products and allied products. The Pork
segment includes three case-ready operations that share facilities with the Beef segment.
Prepared Foods: Prepared Foods plants process fresh and frozen chicken, beef, pork and other raw materials into pizza toppings,
branded and processed meats, appetizers, prepared meals, ethnic foods, soups, sauces, side dishes, pizza crusts, flour and corn tortilla
products and meat dishes.
Our Dynamic Fuels joint venture produces renewable synthetic fuels. Construction of production facilities was completed in late fiscal
2010, and initial production began in October 2010. Dynamic Fuels operates one plant with designed annual capacity of 75 million
gallons.
We believe our present facilities are generally adequate and suitable for our current purposes; however, seasonal fluctuations in
inventories and production may occur as a reaction to market demands for certain products. We regularly engage in construction and
other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities.
We also consider the efficiencies of our operations and may from time to time consider changing the number or type of plants we
operate to align with our capacity needs.
ITEM 3. LEGAL PROCEEDINGS
Refer to the description of certain legal proceedings pending against us under Part II, Item 8, Notes to Consolidated Financial
Statements, Note 19: Commitments and Contingencies, which discussion is incorporated herein by reference. Listed below are certain
additional legal proceedings involving the Company and/or its subsidiaries.
On October 23, 2001, a putative class action lawsuit styled R. Lynn Thompson, et al. vs. Tyson Foods, Inc. was filed in the District
Court for Mayes County, Oklahoma by three property owners on behalf of all owners of lakefront property on Grand Lake O’ the
Cherokees. Simmons Foods, Inc. and Peterson Farms, Inc. also are defendants. The plaintiffs allege the defendants’ operations
diminished the water quality in the lake thereby interfering with the plaintiffs’ use and enjoyment of their properties. The plaintiffs
sought injunctive relief and an unspecified amount of compensatory damages, punitive damages, attorneys’ fees and costs. While the
District Court certified a class, on October 4, 2005, the Court of Civil Appeals of the State of Oklahoma reversed, holding the
plaintiffs’ claims were not suitable for disposition as a class action. This decision was upheld by the Oklahoma Supreme Court and the
case was remanded to the District Court with instructions that the matter proceed only on behalf of the three named plaintiffs.
Plaintiffs seek injunctive relief, restitution and compensatory and punitive damages in an unspecified amount in excess of $10,000. We
and the other defendants have denied liability and asserted various defenses. The defendants have requested a trial date, but the court
has not yet scheduled the matter for trial.
Since 2003, nine lawsuits have been brought against us and several other poultry companies by approximately 150 plaintiffs in
Washington County, Arkansas Circuit Court (Green v. Tyson Foods, Inc., et al., Bible v. Tyson Foods, Inc., Beal v. Tyson Foods, Inc.,
et al., McWhorter v. Tyson Foods, Inc., et al., McConnell v. Tyson Foods, Inc., et al., Carroll v. Tyson Foods, Inc., et al., Belew v.
Tyson Foods, Inc., et al., Gonzalez v. Tyson Foods, Inc., et al., and Rasco v. Tyson Foods, Inc., et al.) alleging that the land application
of poultry litter caused arsenic and pathogenic mold and fungi contamination of the air, soil and water in and around Prairie Grove,
Arkansas and seeking recovery for several types of personal injuries, including several forms of cancer. On August 2, 2006, the Court
granted summary judgment in favor of Tyson and the other poultry company defendants in the first case to go to trial, which the
plaintiffs appealed, and the trial court stayed the remaining eight lawsuits pending the appeal. On May 8, 2008, the Arkansas Supreme
Court reversed the summary judgment and remanded for a new trial. The remanded trial was held and the jury returned a verdict in our
favor. The plaintiffs appealed this verdict to the Arkansas Supreme Court, which affirmed the verdict and denied the plaintiffs’ petition
for rehearing. The second trial, originally scheduled for October 22, 2012, was canceled and no new trial date has been set.
Other Matters: We currently have approximately 115,000 employees and, at any time, have various employment practices matters
outstanding. In the aggregate, these matters are significant to the Company, and we devote significant resources to managing
employment issues. Additionally, we are subject to other lawsuits, investigations and claims (some of which involve substantial
amounts) arising out of the conduct of our business. While the ultimate results of these matters cannot be determined, they are not
expected to have a material adverse effect on our consolidated results of operations or financial position.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.