XML 136 R10.htm IDEA: XBRL DOCUMENT
v3.3.0.814

Acquisitions and Dispositions | 12 Months Ended
--- | ---
Oct. 03, 2015
Business Combinations [Abstract] |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Acquisitions On August 28, 2014, we acquired all of the outstanding stock of The Hillshire Brands Company ("Hillshire Brands") as part of our strategic expansion initiative. The purchase price was equal to $63.00 per share for Hillshire Brands' outstanding common stock, or $8,081 million. In addition, we paid $163 million in cash for breakage costs incurred by Hillshire Brands related to a previously announced acquisition. We funded the acquisition with existing cash on hand, net proceeds from the issuance of new senior notes, Class A common stock (Class A stock), and tangible equity units as well as borrowings under a new term loan facility (refer to Note 7: Debt and Note 8: Equity). Hillshire Brands' results from operations subsequent to the acquisition closing are included in the Prepared Foods segment. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date. The purchase price was allocated based on information available at the acquisition date. During fiscal 2015, we recorded measurement period adjustments, which reduced goodwill by $14 million, after obtaining additional information regarding, among other things, asset valuations and liabilities assumed. The amount was not considered material and therefore prior periods have not been revised. The purchase price allocation was finalized during the fourth quarter of fiscal 2015.
| in millions |
Cash and cash equivalents |  | $ | 72 |
Accounts receivable |  | 236 |
Inventories |  | 414 |
Other current assets |  | 343 |
Property, Plant and Equipment |  | 1,301 |
Goodwill |  | 4,790 |
Intangible Assets |  | 5,141 |
Other Assets |  | 64 |
Accounts payable |  | (347 | )
Other current liabilities |  | (327 | )
Long-Term Debt |  | (869 | )
Deferred Income Taxes |  | (2,074 | )
Other Liabilities |  | (500 | )
Net asset acquired |  | $ | 8,244 |
The fair value of identifiable intangible assets at the acquisition date is as follows:
|  |  |  |  |  | in millions |
Intangible Asset Category |  | Type |  | Life in Years |  | Fair Value
Brands & trademarks |  | Non-amortizable |  | Indefinite |  | $ | 4,062 |
Brands & trademarks |  | Amortizable |  | 20 years |  | 532 |
Customer relationships |  | Amortizable |  | Weighted average life of 16 years |  | 541 |
Non-compete agreements |  | Amortizable |  | 1 year |  | 6 |
Total identifiable intangible assets |  |  |  |  |  | $ | 5,141 |
As a result of the acquisition, we recognized a total of $4,790 million of goodwill. The purchase price was assigned to assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition, and any excess was allocated to goodwill, as shown in the table above. Goodwill represents the value we expect to achieve through the implementation of operational synergies and growth opportunities primarily in our Prepared Foods segment. We completed the allocation of goodwill to our segments in the fourth quarter of fiscal 2015 using the with-and-without approach of the synergy impact to fair value of our reporting units. The allocation of goodwill to our Chicken, Beef, Pork, and Prepared Foods segments was $658 million, $113 million, $106 million and $3,913 million, respectively. The fair value of this goodwill is not deductible for United States income tax purposes. We used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis, relief-from-royalty and multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, we are required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. The acquisition of Hillshire Brands was accounted for using the acquisition method of accounting, and consequently, the results of operations for Hillshire Brands are reported in our consolidated financial statements from the date of acquisition. The following unaudited pro forma information presents the combined results of operations as if the acquisition of Hillshire Brands had occurred at the beginning of fiscal 2013. Hillshire Brands' pre-acquisition results have been added to our historical results. The pro forma results contained in the table below include adjustments for amortization of acquired intangibles, depreciation expense, interest expense related to the financing and related income taxes. Any potential cost savings or other operational efficiencies that could result from the acquisition are not included in these pro forma results. The 2013 pro forma results include transaction related expenses incurred by Hillshire Brands prior to the acquisition of $168 million, including items such as consultant fees, accelerated stock compensation and other deal costs; transaction related expenses incurred by the Company of $115 million, including fees paid to third parties, financing costs and other deal costs; and $32 million of expense related to the fair value inventory adjustment at the date of acquisition. These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor is it necessarily an indication of future operating results.
| in millions (unaudited) |
| 2014 |  |  | 2013 |
Pro forma sales | $ | 41,311 |  |  | $ | 38,195 |
Pro forma net income from continuing operations attributable to Tyson | 1,047 |  |  | 655 |
Pro forma net income per diluted share from continuing operations attributable to Tyson | $ | 2.50 |  |  | $ | 1.52 |
During fiscal 2014 we acquired a value-added food business as part of our strategic expansion initiative, which is included in our Prepared Foods segment. The aggregate purchase price of the acquisition was $56 million, which included $12 million for Property, Plant and Equipment, $27 million allocated to Intangible Assets and $18 million allocated to Goodwill. During fiscal 2013, we acquired two value-added food businesses as part of our strategic expansion initiative, which are included in our Prepared Foods segment. The aggregate purchase price of the acquisitions was $106 million, which included $50 million for Property, Plant and Equipment, $41 million allocated to Intangible Assets and $12 million allocated to Goodwill. Dispositions In fiscal 2014, we announced our plan to sell our Brazil and Mexico operations, which are included in Other, to JBS SA ("JBS") for $575 million in cash less debt and other adjustments. As a result, we conducted an impairment test and recorded a $39 million impairment charge in the fourth quarter of fiscal 2014 related to our Brazil operation. We completed the sale of the Brazil operation in the first quarter of fiscal 2015 and received net proceeds of $148 million including working capital, net debt adjustments and cash transferred. The sale did not result in a significant gain or loss as the carrying value of the Brazil operation approximated the sales proceeds at the time of sale. We completed the sale of the Mexico operation in the fourth quarter of fiscal 2015 and received net proceeds of approximately $374 million including working capital, net debt adjustments and cash transferred. As a result of the sale, we recorded a pre-tax gain of $161 million, which is reflected in Cost of Sales in our Consolidated Statements of Income. We utilized the net proceeds to retire the 2.75% senior notes due September 2015. The assets and liabilities related to the Brazil and Mexico operations were classified as held for sale on the balance sheet at September 27, 2014. The following table summarizes the net assets and liabilities held for sale:
| in millions |
| 2014 |
Assets held for sale: |
Accounts receivable, net | $ | 74 |
Inventories | 141 |
Other current assets | 72 |
Net property, plant and equipment | 132 |
Goodwill | 16 |
Other assets | 11 |
Total assets held for sale | $ | 446 |
Liabilities held for sale: |
Current debt | $ | 32 |
Accounts payable | 61 |
Other current liabilities | 27 |
Long-term debt | 9 |
Deferred income taxes | 12 |
Total liabilities held for sale | $ | 141 |
In the fourth quarter of fiscal 2015, to better align our overall production capacity with current cattle supplies, we ceased beef operations at our Denison, Iowa plant. As a result, we recorded $12 million in closure and impairment charges during the fourth quarter of fiscal 2015. These charges impact the Beef segment’s operating income and are reflected in Cost of Sales in our Consolidated Statements of Income. In the fourth quarter of fiscal 2015, we recorded $59 million impairment and other related charges associated with a Prepared Foods project designed to optimize the combined Tyson and Hillshire Brands network capacity and to enhance manufacturing efficiencies for the future. As a result of this project, we expect to close our Chicago, Illinois hospitality plant and our Jefferson, Wisconsin plant in the back half of fiscal 2016. These charges are reflected in the Prepared Foods segment’s operating income, of which $49 million is included in the Consolidated Statements of Income in Cost of Sales and $10 million is included in the Consolidated Statements of Income in Selling, General and Administrative. In fiscal 2015, as part of our ongoing efforts to increase efficiencies in our Chicken business, we announced the planned closure of our Buena Vista, Georgia plant. The plant closed in May 2015 and the closure costs did not have a significant impact on the Company's operating results. In fiscal 2014, we recorded impairment charges of $52 million related to the closure of three Prepared Foods plants. The Company’s Cherokee, Iowa plant closed in September 2014 and the Buffalo, New York and Santa Teresa, New Mexico plants each closed in January 2015. Additionally, in April 2014, Hillshire Brands announced that it would discontinue all production at its Florence, Alabama plant. The plant closed in December 2014 and the closure costs did not have a significant impact on the Company's financial results. In fiscal 2014, we sold our 50 percent ownership interest of Dynamic Fuels LLC (Dynamic Fuels) for $30 million cash consideration at closing and up to $35 million in future cash payments contingent on Dynamic Fuels' production volumes over a period of up to 11.5 years. Additionally as part of the terms of the sale, we were released from our guarantee of the $100 million Gulf Opportunity Zone tax-exempt bonds, which were issued in October 2008 to fund a portion of the plant construction costs. Dynamic Fuels previously qualified as a variable interest entity which we consolidated, as we were the primary beneficiary. As a result of the sale, we deconsolidated Dynamic Fuels and recorded a gain of approximately $3 million, which is reflected in Cost of Sales in our Consolidated Statements of Income. We will recognize the future contingent payments in income as the required volumes are produced.

X
- Definition Business Combinations and Disposal Group Operations [Text Block] + References No definition available. + Details
Name: | tsn_BusinessCombinationsandDisposalGroupOperationsTextBlock
Namespace Prefix: | tsn_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration