Tyson Foods 2013 Annual Report Download - page 61

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61
in millions
September 28, 2013 September 29, 2012
Amortized
Cost Basis Fair
Value Unrealized
Gain/(Loss) Amortized
Cost Basis Fair
Value Unrealized
Gain/(Loss)
Available for Sale Securities:
Debt Securities:
U.S. Treasury and Agency $ 25 $ 25 $ — $ 26 $ 27 $ 1
Corporate and Asset-Backed (a) 64 65 1 64 66 2
Redeemable Preferred Stock — — — 20 20 —
Equity Securities:
Common Stock and Warrants 9 4 (5) 9 7 (2)
(a) At September 28, 2013, and September 29, 2012, the amortized cost basis for Corporate and Asset-Backed debt securities had
been reduced by accumulated other than temporary impairments of $1 million and $2 million, respectively.
Unrealized holding gains (losses), net of tax, are excluded from earnings and reported in OCI until the security is settled or sold. On a
quarterly basis, we evaluate whether losses related to our available-for-sale securities are temporary in nature. Losses on equity
securities are recognized in earnings if the decline in value is judged to be other than temporary. If losses related to our debt securities
are determined to be other than temporary, the loss would be recognized in earnings if we intend, or more likely than not will be
required, to sell the security prior to recovery. For debt securities in which we have the intent and ability to hold until maturity, losses
determined to be other than temporary would remain in OCI, other than expected credit losses which are recognized in earnings. We
consider many factors in determining whether a loss is temporary, including the length of time and extent to which the fair value has
been below cost, the financial condition and near-term prospects of the issuer and our ability and intent to hold the investment for a
period of time sufficient to allow for any anticipated recovery. During fiscal 2013, 2012 and 2011, we recognized no other than
temporary impairments in earnings. No other than temporary losses were deferred in OCI as of September 28, 2013, and
September 29, 2012.
Deferred Compensation Assets: We maintain non-qualified deferred compensation plans for certain executives and other highly
compensated employees. Investments are maintained within a trust and include money market funds, mutual funds and life insurance
policies. The cash surrender value of the life insurance policies is invested primarily in mutual funds. The investments are recorded at
fair value based on quoted market prices and are included in Other Assets in the Consolidated Balance Sheets. We classify the
investments which have observable market prices in active markets in Level 1 as these are generally publicly-traded mutual funds. The
remaining deferred compensation assets are classified in Level 2, as fair value can be corroborated based on observable market data.
Realized and unrealized gains (losses) on deferred compensation are included in earnings.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a
nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. During fiscal
2013, we recorded a $56 million impairment charge related to our Weifang operation in China. The impairment charge resulted from
the completion of an assessment of our long-term business strategy in China, in which we determined Weifang was no longer core to
the execution of our future business plan. Our valuation of these assets incorporated unobservable Level 3 inputs. We did not have any
other significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.
Other Financial Instruments
Fair value of our debt is principally estimated using Level 2 inputs based on quoted prices for those or similar instruments. Fair value
and carrying value for our debt are as follows:
in millions
September 28, 2013 September 29, 2012
Fair
Value Carrying
Value Fair
Value Carrying
Value
Total Debt $ 2,541 $ 2,408 $ 2,596 $ 2,432