Tyson Foods 2015 Annual Report Download - page 73
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Please find page 73 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.ConcentrationsofCreditRisk
Ourfinancialinstrumentsexposedtoconcentrationsofcreditriskconsistprimarilyofcashandcashequivalentsandaccountsreceivable.Ourcashequivalentsare
inhighqualitysecuritiesplacedwithmajorbanksandfinancialinstitutions.Concentrationsofcreditriskwithrespecttoreceivablesarelimitedduetothelarge
numberofcustomersandtheirdispersionacrossgeographicareas.Weperformperiodiccreditevaluationsofourcustomers’financialconditionandgenerallydo
notrequirecollateral.AtOctober3,2015,andSeptember27,2014,20.0%and18.6%,respectively,ofournetaccountsreceivablebalancewasduefromWal-
MartStores,Inc.Noothersinglecustomerorcustomergrouprepresentedgreaterthan10%ofnetaccountsreceivable.
NOTE 14: STOCK-BASED COMPENSATION
Weissuesharesunderourstock-basedcompensationplansbyissuingClassAstockfromtreasury.Thetotalnumberofsharesavailableforfuturegrantunderthe
TysonFoods,Inc.2000StockIncentivePlan(IncentivePlan)was24,293,913atOctober3,2015.
StockOptions
ShareholdersapprovedtheIncentivePlaninJanuary2001.TheIncentivePlanisadministeredbytheCompensationandLeadershipDevelopmentCommitteeof
theBoardofDirectors(CompensationCommittee).TheIncentivePlanincludesprovisionsforgrantingincentivestockoptionsforsharesofClassAstockata
pricenotlessthanthefairvalueatthedateofgrant.NonqualifiedstockoptionsmaybegrantedatapriceequaltoormorethanthefairvalueofClassAstockon
thedatetheoptionisgranted.StockoptionsundertheIncentivePlangenerallybecomeexercisableratablyoverthreeyearsfromthedateofgrantandmustbe
exercisedwithin10yearsfromthedateofgrant.Ourpolicyistorecognizecompensationexpenseonastraight-linebasisovertherequisiteserviceperiodforthe
entireaward.
SharesUnder
Option
Weighted
AverageExercise
PricePerShare
WeightedAverage
Remaining
ContractualLife
(inYears)
Aggregate
IntrinsicValue
(inmillions)
Outstanding,September27,2014 13,724,409
$ 21.30
Exercised (3,900,576)
21.47
Forfeitedorexpired (177,491)
37.23
Granted 5,088,723
42.26
Outstanding,October3,2015 14,735,065
28.30
7.1
$ 237
Exercisable,October3,2015 6,789,969
$ 18.73
5.4
$ 174
Wegenerallygrantstockoptionsonceayear.Theweightedaveragegrant-datefairvalueofoptionsgrantedinfiscal2015,2014and2013was$11.51,$10.83
and$6.44,respectively.Thefairvalueofeachoptiongrantisestablishedonthedateofgrantusingabinomiallatticemethod.Weusehistoricalvolatilityfora
periodoftimecomparabletotheexpectedlifeoftheoptiontodeterminevolatilityassumptions.Expectedlifeiscalculatedbasedonthecontractualtermofeach
grantandtakesintoaccountthehistoricalexerciseandterminationbehaviorofparticipants.Risk-freeinterestratesarebasedonthefive-yearTreasurybondrate.
Assumptionsasofthegrantdateusedinthefairvaluecalculationofeachyear’sgrantsareoutlinedinthefollowingtable.
2015
2014
2013
Expectedlife(inyears) 6.1
6.0
6.2
Risk-freeinterestrate 1.6%
1.3%
0.7%
Expectedvolatility 26.7%
36.0%
36.8%
Expecteddividendyield 1.0%
1.0%
1.0%
Werecognizedstock-basedcompensationexpenserelatedtostockoptions,netofincometaxes,of$27million,$20millionand$14millionforfiscal2015,2014
and2013,respectively.Therelatedtaxbenefitforfiscal2015,2014and2013was$17million,$13millionand$9million,respectively.Wehad3.8million,4.8
millionand3.9millionoptionsvestinfiscal2015,2014and2013,respectively,withagrantdatefairvalueof$32million,$30millionand$22million,
respectively.
Infiscal2015,2014and2013,wereceivedcashof$84million,$67millionand$123million,respectively,fortheexerciseofstockoptions.Sharesareissued
fromtreasuryforstockoptionexercises.Therelatedtaxbenefitrealizedfromstockoptionsexercisedduringfiscal2015,2014and2013,was$30million,$33
millionand$35million,respectively.Thetotalintrinsicvalueofoptionsexercisedinfiscal2015,2014and2013,was$79million,$87millionand$90million,
respectively.Cashflowsresultingfromtaxdeductionsinexcessofthecompensationcostofthoseoptions(excesstaxdeductions)areclassifiedasfinancingcash
flows.Werealized$19million,$24millionand$18millionrelatedtoexcesstaxdeductionsduringfiscal2015,2014and2013,respectively.
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