Tyson Foods 2012 Annual Report Download - page 46

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46
NOTE 2: CHANGES IN ACCOUNTING PRINCIPLES
In May 2011, the FASB clarified the guidance around fair value measurements and disclosures. This guidance is effective for interim
and annual periods beginning after December 15, 2011. We adopted this guidance in the second quarter of fiscal 2012. The adoption
did not have a significant impact on our consolidated financial statements.
In September 2011, the FASB issued guidance amending the way companies test for goodwill impairment, allowing the option to first
assess qualitative factors to determine whether it is necessary to perform the two-step quantitative impairment test. This guidance is
effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. We adopted the guidance
in connection with our annual goodwill impairment test in the fourth quarter of fiscal 2012. The adoption did not have a significant
impact on our consolidated financial statements.
In July 2012, the FASB issued guidance amending the way companies test for indefinite-lived intangible asset impairment, allowing
the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. This
guidance is effective for interim and annual periods beginning after September 15, 2012, with early adoption permitted. We adopted
the guidance in connection with our annual indefinite-lived intangible assets impairment test in the fourth quarter of fiscal 2012. The
adoption did not have a significant impact on our consolidated financial statements.
NOTE 3: ACQUISITIONS
In August 2009, we completed the establishment of related joint ventures in China referred to as Shandong Tyson Xinchang Foods
(currently referred to as Shandong Tyson). 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 2012, we have paid $10 million of the contingent purchase price.
NOTE 4: PROPERTY, PLANT AND EQUIPMENT
Major categories of property, plant and equipment and accumulated depreciation at September 29, 2012, and October 1, 2011:
in millions
2012 2011
Land $ 101 $ 95
Building and leasehold improvements 2,868 2,698
Machinery and equipment 5,208 4,897
Land improvements and other 408 386
Buildings and equipment under construction 298 446
8,883 8,522
Less accumulated depreciation 4,861 4,699
Net property, plant and equipment $ 4,022 $ 3,823
Approximately $433 million will be required to complete buildings and equipment under construction at September 29, 2012.