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3. Restricted
Cash
On March 28, 2003, Cheese and Protein International LLC (“CPI”),
a 96%-owned consolidated subsidiary, amended its lease for property
and equipment relating to its cheese manufacturing and whey processing
plant in Tulare, California. The amendment postponed the measurement
of the fixed charge coverage ratio requirement contained in the
lease until March 2005. The amendment requires Land O’Lakes
to maintain a $20 million cash account (which may be replaced by
a letter of credit at the Company’s option) to support the
lease. The cash account or letter of credit would only be drawn
upon in the event of a CPI default and would reduce amounts otherwise
due under the lease. The requirement would be lifted pending the
achievement of certain financial targets by CPI.
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