Tyson Foods 2011 Annual Report Download - page 48

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48
NOTE 3: ACQUISITIONS AND DISCONTINUED OPERATION
Acquisitions
In August 2009, we completed the establishment of related joint ventures in China referred to as Shandong Tyson Xinchang Foods.
The aggregate purchase price for our 60% equity interest was $21 million, which excludes $93 million of cash transferred to the joint
venture for future capital needs. The purchase price included $29 million allocated to Intangible Assets and $19 million allocated to
Goodwill, as well as the assumption of $76 million of Current and Long-Term Debt.
In May 2011, the minority partner exercised put options requiring us to purchase its entire 40% equity interest. In August 2011, the
transaction closed for $66 million.
In October 2008, we acquired three vertically integrated poultry companies in southern Brazil: Macedo Agroindustrial, Avicola
Itaiopolis and Frangobras. The aggregate purchase price was $67 million. In addition, we had $15 million of contingent purchase price
based on production volumes. The purchase price included $23 million allocated to Goodwill and $19 million allocated to Intangible
Assets. Through fiscal 2011, we have paid $11 million of the contingent purchase price.
Discontinued Operation
On March 13, 2009, we completed the sale of the beef processing, cattle feed yard and fertilizer assets of three of our Alberta, Canada
subsidiaries (collectively, Lakeside), which were part of our Beef segment, and related inventories for total consideration of $145
million, based on exchange rates then in effect. This included (a) cash received at closing of $43 million, (b) $78 million of
collateralized notes receivable from either XL Foods or an affiliated entity to be collected throughout the two years following closing,
and (c) $24 million of XL Foods Preferred Stock to be redeemed over five years.
We recorded a pretax loss on sale of Lakeside of $10 million in fiscal 2009, which included an allocation of beef reporting unit
goodwill of $59 million and cumulative currency translation adjustment gains of $41 million.
The following is a summary of Lakeside’s operating results prior to its disposition (in millions):
2009
Sales
$461
Pretax income from discontinued operation
$20
Loss on sale of discontinued operation
(10)
Income tax expense
11
Loss from discontinued operation
$(1)
NOTE 4: PROPERTY, PLANT AND EQUIPMENT
Major categories of property, plant and equipment and accumulated depreciation at October 1, 2011, and October 2, 2010:
in millions
2011
2010
Land
$95
$97
Building and leasehold improvements
2,698
2,617
Machinery and equipment
4,897
4,694
Land improvements and other
386
232
Buildings and equipment under construction
446
513
8,522
8,153
Less accumulated depreciation
4,699
4,479
Net property, plant and equipment
$3,823
$3,674
Approximately $427 million will be required to complete buildings and equipment under construction at October 1, 2011.