Tyson Foods 2014 Annual Report Download - page 18

Chicken: Chicken processing plants include various phases of slaughtering, dressing, cutting, packaging, deboning and further-processing. We
also have 30 animal nutrition operations, nine of which are associated with the Chicken rendering plants, 20 within various Chicken processing
facilities and one pet treats plant. 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, turkey, 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.
International: International chicken processing plants include various phases of slaughtering, dressing, cutting, packaging, deboning and
further-processing. The feed mills and broiler hatcheries generally have sufficient capacity to meet the needs of the chicken growout
operations.
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
20: 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 June 17, 2014, the Missouri attorney general filed a civil lawsuit against us in the circuit court of Barry County, Missouri, concerning an
incident that occurred in May 2014 in which some feed supplement was discharged from our plant in Monett, Missouri, to the City of Monett’s
wastewater treatment plant allegedly leading to a fish kill in a local stream and odor issues around the plant. That lawsuit alleges six violations
stemming from the incident and seeks penalties against us, compensation for damage to the stream, and reimbursement for the State of
Missouri’s costs in investigating the matter. The U.S. Environmental Protection Agency has also indicated to us that it has begun a criminal
investigation into the incident. If we become subject to criminal charges, we may be subject to a fine and other relief, as well as government
contract suspension and debarment. We are cooperating with the Environmental Protection Agency but cannot predict the outcome of its
investigation at this time. It is also possible that other regulatory agencies may commence investigations and allege additional violations.
Finally, we may be subject to claims from the City of Monett for causing it to violate various municipal regulations and for damages to the
City’s treatment system. We are currently in settlement discussions with the State of Missouri.
On June 19, 2005, the Attorney General and the Secretary of the Environment of the State of Oklahoma filed a complaint in the U.S. District
Court for the Northern District of Oklahoma against Tyson Foods, Inc., three subsidiaries and six other poultry integrators. The complaint,
which was subsequently amended, asserts a number of state and federal causes of action including, but not limited to, counts under
Comprehensive Environmental Response, Compensation, and Liability Act, Resource Conservation and Recovery Act, and state-law public
nuisance theories. Oklahoma alleges that the defendants and certain contract growers who were not joined in the lawsuit polluted the surface
waters, groundwater and associated drinking water supplies of the Illinois River Watershed through the land application of poultry litter.
Oklahoma’s claims were narrowed through various rulings issued before and during trial and its claims for natural resource damages were
dismissed by the district court in a ruling issued on July 22, 2009 which was subsequently affirmed on appeal by the Tenth Circuit Court of
Appeals. A non-jury trial of the remaining claims including Oklahoma’s request for injunctive relief began on September 24, 2009. Closing
arguments were held on February 11, 2010. The district court has not yet rendered its decision from the trial.
Other Matters: We currently have approximately 124,000 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.
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