Tyson Foods 2015 Annual Report Download - page 72
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Please find page 72 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.Unrealizedholdinggains(losses),netoftax,areexcludedfromearningsandreportedinOCIuntilthesecurityissettledorsold.Onaquarterlybasis,weevaluate
whetherlossesrelatedtoouravailable-for-salesecuritiesaretemporaryinnature.Lossesonequitysecuritiesarerecognizedinearningsifthedeclineinvalueis
judgedtobeotherthantemporary.Iflossesrelatedtoourdebtsecuritiesaredeterminedtobeotherthantemporary,thelosswouldberecognizedinearningsifwe
intend,ormorelikelythannotwillberequired,tosellthesecuritypriortorecovery.Fordebtsecuritiesinwhichwehavetheintentandabilitytoholduntil
maturity,lossesdeterminedtobeotherthantemporarywouldremaininOCI,otherthanexpectedcreditlosseswhicharerecognizedinearnings.Weconsider
manyfactorsindeterminingwhetheralossistemporary,includingthelengthoftimeandextenttowhichthefairvaluehasbeenbelowcost,thefinancial
conditionandnear-termprospectsoftheissuerandourabilityandintenttoholdtheinvestmentforaperiodoftimesufficienttoallowforanyanticipated
recovery.Werecognizednootherthantemporaryimpairmentinearningsforfiscal2015,and$6millionofotherthantemporaryimpairmentforfiscal2014,which
wasrecordedintheConsolidatedStatementsofIncomeinOther,net.NootherthantemporarylossesweredeferredinOCIasofOctober3,2015,and
September27,2014.
Deferred Compensation Assets: Wemaintainnon-qualifieddeferredcompensationplansforcertainexecutivesandotherhighlycompensatedemployees.
Investmentsaregenerallymaintainedwithinatrustandincludemoneymarketfunds,mutualfundsandlifeinsurancepolicies.Thecashsurrendervalueofthelife
insurancepoliciesisinvestedprimarilyinmutualfunds.TheinvestmentsarerecordedatfairvaluebasedonquotedmarketpricesandareincludedinOtherAssets
intheConsolidatedBalanceSheets.WeclassifytheinvestmentswhichhaveobservablemarketpricesinactivemarketsinLevel1asthesearegenerallypublicly-
tradedmutualfunds.TheremainingdeferredcompensationassetsareclassifiedinLevel2,asfairvaluecanbecorroboratedbasedonobservablemarketdata.
Realizedandunrealizedgains(losses)ondeferredcompensationareincludedinearnings.
AssetsandLiabilitiesMeasuredatFairValueonaNonrecurringBasis
Inadditiontoassetsandliabilitiesthatarerecordedatfairvalueonarecurringbasis,werecordassetsandliabilitiesatfairvalueonanonrecurringbasis.
Generally,assetsarerecordedatfairvalueonanonrecurringbasisasaresultofimpairmentcharges.
Infiscal2015,tobetteralignouroverallproductioncapacitywithcurrentcattlesupplies,weceasedbeefoperationsatourDenison,Iowaplant.Asaresult,we
recordeda$12millionimpairmentchargeduringthefourthquarteroffiscal2015.ThischargeimpactstheBeefsegment’soperatingincomeandisreflectedin
CostofSalesinourConsolidatedStatementsofIncome.Ourvaluationoftheseassetswasprimarilybasedondiscountedcashflowmodelswhichincluded
unobservableLevel3inputs.
Inthefourthquarteroffiscal2015,werecorded$59millionimpairmentandotherrelatedchargesassociatedwithaPreparedFoodsprojectdesignedtooptimize
thecombinedTysonandHillshireBrandsnetworkcapacityandtoenhancemanufacturingefficienciesforthefuture.ThischargeisreflectedinthePreparedFoods
segment’soperatingincome,ofwhich$49millionisincludedintheConsolidatedStatementsofIncomeinCostofSalesand$10millionisincludedinthe
ConsolidatedStatementsofIncomeinSelling,GeneralandAdministrative.Ourvaluationoftheseassetswasprimarilybasedondiscountedcashflowmodels
whichincludedunobservableLevel3inputs.
FollowingthesaleofourMexicoandBrazilchickenoperationsinfiscal2015,wereviewedourlong-termbusinessstrategyandoutlookfortheremaining
internationalbusinesses,whichincludesourchickenproductionoperationsinChinaandIndia.WeassessedourChineseoperationforapotentialimpairmentinthe
fourthquarteroffiscal2015andasaresultofthisevaluation,werecordeda$169millionchargetoimpairitslong-livedassetstotheirfairvalueandtofully
impairitsgoodwill.TheChinaoperationisincludedinOtherforsegmentreportingandtheimpairmentisincludedinCostofSalesintheConsolidatedStatements
ofIncome.Thisimpairmentwascomprisedof$126millionofproperty,plantandequipment,$23millionofgoodwilland$20millionofotherassets.Weutilized
adiscountedcashflowanalysiswhichincludedunobservableLevel3inputs.
Infiscal2014,werecordeda$52millionimpairmentchargerelatedtotheclosureofthreePreparedFoodsplants,whichisrecordedintheConsolidated
StatementsofIncomeinCostofSalesandinthePreparedFoodssegment.Ourvaluationoftheseassetswasprimarilybasedondiscountedcashflowmodels
whichincludedunobservableLevel3inputs.
Infiscal2014,weannouncedourplantosellourBraziloperation.Asaresult,werecordeda$39millionchargetoimpairitsassetstoitsfairvalueof$144million
.TheimpairmentchargewasrecordedintheConsolidatedStatementsofIncomeinCostofSalesandinOtherforsegmentreporting.Thefairvalueusedto
determinetheimpairmentwasbaseduponthecontractedsalesprice.
OtherFinancialInstruments
FairvalueofourdebtisprincipallyestimatedusingLevel2inputsbasedonquotedpricesforthoseorsimilarinstruments.Fairvalueandcarryingvalueforour
debtareasfollows:
inmillions
October3,2015
September27,2014
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
TotalDebt $ 6,900
$ 6,725
$ 8,347
$ 8,178
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