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Acquisition and Dispositions | 9 Months Ended
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Jul. 01, 2017
Business Combinations [Abstract] |
Acquisition and Dispositions | ACQUISITION AND DISPOSITIONS Acquisition On June 7, 2017, we acquired all of the outstanding common stock of AdvancePierre Foods Holdings, Inc. ("AdvancePierre") as part of our strategy to sustainably feed the world with the fastest growing portfolio of protein-packed brands. The purchase price was equal to $40.25 per share for AdvancePierre's outstanding common stock, or approximately $3.2 billion. We funded the acquisition with existing cash on hand, net proceeds from the issuance of new senior notes and a new term loan facility, as well as borrowings under our commercial paper program (refer to Note 6: Debt). AdvancePierre's results from operations subsequent to the acquisition closing are included in the Prepared Foods and Chicken segments. The following table summarizes the preliminary purchase price allocation and fair values of the assets acquired and liabilities assumed at the acquisition date. Certain estimated values for the acquisition, including goodwill, intangible assets, inventory, property, plant and equipment, and deferred income taxes, are not yet finalized and are subject to revision as additional information becomes available and more detailed analyses are completed.
| in millions |
Cash and cash equivalents |  | $ | 126 |
Accounts receivable |  | 80 |
Inventories |  | 272 |
Other current assets |  | 5 |
Property, Plant and Equipment |  | 306 |
Goodwill |  | 2,922 |
Intangible Assets |  | 1,601 |
Current debt |  | (1,148 | )
Accounts payable |  | (114 | )
Other current liabilities |  | (90 | )
Tax receivable agreement (TRA) due to former shareholders |  | (223 | )
Long-Term Debt |  | (33 | )
Deferred Income Taxes |  | (492 | )
Other Liabilities |  | (5 | )
Net assets acquired |  | $ | 3,207 |
The fair value of identifiable intangible assets is as follows:
|  |  |  |  |  | in millions |
Intangible Asset Category |  | Type |  | Life in Years |  | Fair Value
Brands & Trademarks |  | Amortizable |  | Weighted Average of 15 years |  | $ | 380 |
Customer Relationships |  | Amortizable |  | Weighted Average of 17 years |  | 1,221 |
Total identifiable intangible assets |  |  |  |  |  | $ | 1,601 |
As a result of the acquisition, we preliminarily recognized a total of $2,922 million of goodwill. The purchase price was assigned to assets acquired and liabilities assumed based on their preliminary 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. The allocation of goodwill to our reporting units is pending finalization of the expected synergies and the impact of the synergies to our reporting units. We do not expect the final fair value of goodwill to be deductible for U.S. 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 AdvancePierre was accounted for using the acquisition method of accounting, and consequently, the results of operations for AdvancePierre are reported in our consolidated condensed financial statements from the date of acquisition. AdvancePierre's results from the date of the acquisition through July 1, 2017, were insignificant to our Consolidated Condensed Statements of Income. The following unaudited pro forma information presents the combined results of operations as if the acquisition of AdvancePierre had occurred at the beginning of fiscal 2016. AdvancePierre's 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 nine months ended July 2, 2016, pro forma results include transaction related expenses incurred by AdvancePierre prior to the acquisition of $84 million, including items such as consultant fees, accelerated stock compensation and other deal costs; transaction related expenses incurred by the Company of $53 million, including fees paid to third parties, financing costs and other deal costs; and $36 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) | Three Months Ended |  | Nine Months Ended
| July 1, 2017 |  | July 2, 2016 |  | July 1, 2017 |  | July 2, 2016
Pro forma sales | $ | 10,117 |  |  | $ | 9,769 |  |  | $ | 29,185 |  |  | $ | 28,861 |
Pro forma net income attributable to Tyson | 491 |  |  | 530 |  |  | 1,434 |  |  | 1,313 |
Pro forma net income per diluted share attributable to Tyson | $ | 1.33 |  |  | $ | 1.36 |  |  | $ | 3.87 |  |  | $ | 3.34 |
Dispositions On April 24, 2017, we announced our intent to sell three non-protein businesses as part of our strategic focus on protein-packed brands. These businesses, which are all part of our Prepared Foods segment, include Sara Lee® Frozen Bakery, Kettle and Van’s® and produce items such as frozen desserts, waffles, snack bars, and soups, sauces and sides. The sale is also expected to include the Chef Pierre®, Bistro Collection®, Kettle Collection™, and Van’s® brands, a license to use the Sara Lee® brand in various channels, as well as our Tarboro, North Carolina, Fort Worth, Texas, and Traverse City, Michigan, prepared foods facilities. We anticipate we will close the transactions by the end of calendar 2017 and expect to record a net pretax gain as a result of the sale of these businesses. We have reclassified the assets and liabilities related to these businesses to assets and liabilities held for sale in our consolidated condensed balance sheet as of July 1, 2017. The Company concluded the businesses were not significant disposal groups and did not represent a strategic shift, and therefore were not classified as discontinued operations for any of the periods presented. The following table summarizes the net assets and liabilities held for sale:
| in millions |
| July 1, 2017
Assets held for sale: |
Accounts receivable, net | $ | 3 |
Inventories | 105 |
Net Property, Plant and Equipment | 185 |
Goodwill | 327 |
Intangible Assets | 241 |
Total assets held for sale | $ | 861 |
Liabilities held for sale: |
Accounts payable | $ | 2 |
Other current liabilities | 2 |
Deferred Income Taxes | 19 |
Total liabilities held for sale | $ | 23 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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