Tyson Foods 2015 Annual Report Download - page 15
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Please find page 15 of the 2015 Tyson Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.EventssubsequenttotheSpin-OffcouldcausetheSpin-Offtobecometaxable.UnderthetermsofthetaxsharingagreementHillshireBrandsenteredintowith
DEMBinconnectionwiththeSpin-Off,DEMBwillgenerallyberequiredtoindemnifyHillshireBrandsfor100%ofanytaxesimposedonDEMBandits
subsidiariesorHillshireBrandsanditssubsidiariesintheeventthattheSpin-Offandcertainrelatedtransactionsweretofailtoqualifyfortax-freetreatmentasa
resultofanacquisitionofDEMB(includingtheacquisitionofDEMBbyJ.A.Benckiser),oractionsoromissions(includingbreachesofcertainrepresentations
andwarrantiesmadeinthetaxsharingagreement)byDEMBoranyofitsaffiliates.However,iftheSpin-Offorcertainrelatedtransactionsweretofailtoqualify
fortax-freetreatmentbecauseofactionsoromissionsbyHillshireBrandsoranyofitsaffiliates,HillshireBrandswouldberesponsibleforallsuchtaxes.In
addition,HillshireBrandswouldberesponsiblefor50%ofanytaxesresultingfromthefailureoftheSpin-Offandcertainrelatedtransactionstoqualifyastax-
free,whichfailureisnotduetoactionsoromissions(includingbreachesofcertainrepresentationsandwarrantiesmadeinthetaxsharingagreement)byHillshire
Brands,DEMBoranyofHillshireBrands’orDEMB'srespectivesubsidiaries.Therecanbenoassurancethatthetaxsharingagreementwillbesufficientto
protectHillshireBrandsagainstanytaxliabilitiesthatmayarise,orthatDEMBwillbeabletofullysatisfyitsindemnificationobligations.HillshireBrands’
inabilitytoenforcetheindemnificationprovisionsofthetaxsharingagreementorobtainindemnificationpaymentsinatimelymannercouldadverselyaffectour
resultsofoperations,cashflowsandfinancialcondition.
Participation in a Multiemployer Pension Plan could adversely affect our business.
Throughourwhollyownedsubsidiary,HillshireBrands,weparticipateina“multiemployer”pensionplanadministeredbyalaborunionrepresentingsomeofits
employees.Wearerequiredtomakeperiodiccontributionstothisplantoallowthemtomeettheirpensionbenefitobligationstotheirparticipants.Ourrequired
contributionstothisfundcouldincreasebecauseofashrinkingcontributionbaseasaresultoftheinsolvencyorwithdrawalofothercompaniesthatcurrently
contributetothisfund,inabilityorfailureofwithdrawingcompaniestopaytheirwithdrawalliability,lowerthanexpectedreturnsonpensionfundassetsorother
fundingdeficiencies.Intheeventthatwewithdrawfromparticipationinthisplan,thenapplicablelawcouldrequireustomakeanadditionallump-sum
contributiontotheplan,andwewouldhavetoreflectthatasanexpenseinourconsolidatedstatementofoperationsandasaliabilityonourconsolidatedbalance
sheet.Ourwithdrawalliabilitywoulddependontheextentoftheplan'sfundingofvestedbenefits.Themultiemployerplaninwhichweparticipateisreportedto
havesignificantunderfundedliabilities.Suchunderfundingcouldincreasethesizeofourpotentialwithdrawalliability.Intheeventawithdrawalorpartial
withdrawalwastooccurwithrespecttothemultiemployerplan,theimpacttoourconsolidatedfinancialstatementscouldbematerial.
Volatility in the capital markets or interest rates could adversely impact our pension costs and the funded status of our pension plans.
WesponsoranumberofdefinedbenefitplansforemployeesintheUnitedStates.Thedifferencebetweenplanobligationsandassets,whichsignifiesthefunded
statusoftheplans,isasignificantfactorindeterminingthenetperiodicbenefitcostsofthepensionplansandourongoingfundingrequirements.AsofOctober3,
2015,thefundedstatusofourdefinedbenefitpensionplanswasanunderfundedpositionof$410million,ascomparedtoanunderfundedpositionof$381
millionattheendoffiscal2014.Changesininterestratesandthemarketvalueofplanassetscanimpactthefundedstatusoftheplansandcausevolatilityinthe
netperiodicbenefitcostandourfuturefundingrequirements.Theexactamountofcashcontributionsmadetopensionplansinanyyearisdependentupona
numberoffactors,includingminimumfundingrequirements.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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