Tyson Foods 2015 Annual Report Download - page 56
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Please find page 56 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.NOTE 3: ACQUISITIONS AND DISPOSITIONS
Acquisitions
OnAugust28,2014,weacquiredalloftheoutstandingstockofTheHillshireBrandsCompany("HillshireBrands")aspartofourstrategicexpansioninitiative.
Thepurchasepricewasequalto$63.00pershareforHillshireBrands'outstandingcommonstock,or$8,081million.Inaddition,wepaid$163millionincashfor
breakagecostsincurredbyHillshireBrandsrelatedtoapreviouslyannouncedacquisition.Wefundedtheacquisitionwithexistingcashonhand,netproceeds
fromtheissuanceofnewseniornotes,ClassAcommonstock(ClassAstock),andtangibleequityunitsaswellasborrowingsunderanewtermloanfacility(refer
toNote7:DebtandNote8:Equity).HillshireBrands'resultsfromoperationssubsequenttotheacquisitionclosingareincludedinthePreparedFoodssegment.
Thefollowingtablesummarizesthefairvaluesoftheassetsacquiredandliabilitiesassumedattheacquisitiondate.Thepurchasepricewasallocatedbasedon
informationavailableattheacquisitiondate.Duringfiscal2015,werecordedmeasurementperiodadjustments,whichreducedgoodwillby$14million,after
obtainingadditionalinformationregarding,amongotherthings,assetvaluationsandliabilitiesassumed.Theamountwasnotconsideredmaterialandtherefore
priorperiodshavenotbeenrevised.Thepurchasepriceallocationwasfinalizedduringthefourthquarteroffiscal2015.
inmillions
Cashandcashequivalents
$ 72
Accountsreceivable
236
Inventories
414
Othercurrentassets
343
Property,PlantandEquipment
1,301
Goodwill
4,790
IntangibleAssets
5,141
OtherAssets
64
Accountspayable
(347)
Othercurrentliabilities
(327)
Long-TermDebt
(869)
DeferredIncomeTaxes
(2,074)
OtherLiabilities
(500)
Netassetacquired
$ 8,244
Thefairvalueofidentifiableintangibleassetsattheacquisitiondateisasfollows:
inmillions
IntangibleAssetCategory
Type
LifeinYears
FairValue
Brands&trademarks
Non-amortizable
Indefinite
$ 4,062
Brands&trademarks
Amortizable
20years
532
Customerrelationships
Amortizable
Weightedaveragelifeof16years
541
Non-competeagreements
Amortizable
1year
6
Totalidentifiableintangibleassets
$ 5,141
Asaresultoftheacquisition,werecognizedatotalof$4,790millionofgoodwill.Thepurchasepricewasassignedtoassetsacquiredandliabilitiesassumedbased
ontheirestimatedfairvaluesasofthedateofacquisition,andanyexcesswasallocatedtogoodwill,asshowninthetableabove.Goodwillrepresentsthevaluewe
expecttoachievethroughtheimplementationofoperationalsynergiesandgrowthopportunitiesprimarilyinourPreparedFoodssegment.Wecompletedthe
allocationofgoodwilltooursegmentsinthefourthquarteroffiscal2015usingthewith-and-withoutapproachofthesynergyimpacttofairvalueofourreporting
units.TheallocationofgoodwilltoourChicken,Beef,Pork,andPreparedFoodssegmentswas$658million,$113million,$106millionand$3,913million,
respectively.ThefairvalueofthisgoodwillisnotdeductibleforUnitedStatesincometaxpurposes.
Weusedvariousvaluationtechniquestodeterminefairvalue,withtheprimarytechniquesbeingdiscountedcashflowanalysis,relief-from-royaltyandmulti-
periodexcessearningsvaluationapproaches,whichusesignificantunobservableinputs,orLevel3inputs,asdefinedbythefairvaluehierarchy.Underthese
valuationapproaches,wearerequiredtomakeestimatesandassumptionsaboutsales,operatingmargins,growthrates,royaltyratesanddiscountratesbasedon
budgets,businessplans,economicprojections,anticipatedfuturecashflowsandmarketplacedata.
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