Segment Information

9 Months Ended

Sep. 28, 2019

Segment Information

Segment Information

​

Note 11 – Segment Information

Seaboard has six reportable segments: Pork, CT&M, Marine, Sugar & Alcohol, Power and Turkey, each offering a specific product or service. For details on the respective products or services, see Note 14 to the consolidated financial statements included in Seaboard’s annual report for the year ended December 31, 2018. Below are segment updates from year-end.

In February 2019, the Pork segment entered into an asset purchase agreement to buy an idle ethanol plant in Hugoton, Kansas for approximately $40 million. Seaboard accounted for this transaction as an asset acquisition as no workforce or substantive processes were acquired. The purchase price was allocated to property, plant and equipment based on a relative fair value basis.

In September 2019, Seaboard’s Power segment sold its 29.9% noncontrolling interest in a Dominican Republic electricity generation facility for $23 million cash, net of $1 million in selling expenses and taxes and recorded a $6 million note receivable in other non-current assets in the condensed consolidated balance sheet. There was no gain or loss recognized in the condensed consolidated statements of comprehensive income upon the sale. The Power segment is currently constructing a new floating power barge for use in the Dominican Republic that is anticipated to begin operations in 2021. The total project is expected to exceed $160 million. Seaboard’s Power segment continues to explore strategic alternatives, including the possible sale or relocation of the existing power barge.

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). In August 2019, Seaboard provided approximately $8 million in loans to Butterball that mature on October  30, 2020. Interest accrues on the principal outstanding balance at the prime rate plus 2% per annum and is payable monthly. Notes receivable issued to affiliates are presented in receivables, net or other non-current assets in the condensed consolidated balance sheet depending upon the remaining maturity.

As of September 28, 2019 and December 31, 2018, Butterball had total assets of $1,193 million and $1,072 million, respectively. Butterball’s summarized income statement information was as follows:

	Three Months Ended				Nine Months Ended
		September 28,		September 29,		September 28,		September 29,
(Millions of dollars)		2019		2018		2019		2018
Net sales	$	416	$	399	$	1,062	$	1,046
Operating loss	$	(15)	$	(19)	$	(42)	$	(29)
Net loss	$	(22)	$	(23)	$	(59)	$	(36)

The following tables set forth specific financial information about each segment as reviewed by Seaboard’s management. Operating income (loss) for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income (loss), along with income or loss from affiliates for the Pork, CT&M and Turkey segments, is used as the measure of evaluating segment performance because management does not consider interest, other investment income (loss) and income tax benefit (expense) on a segment basis.

Sales to External Customers:	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(Millions of dollars)	2019		2018		2019		2018
Pork	$	423	$	412	$	1,318	$	1,320
CT&M		913		898		2,744		2,574
Marine		256		259		769		771
Sugar & Alcohol		36		43		91		155
Power		30		34		92		88
All Other		5		5		14		13
Segment/Consolidated Totals	$	1,663	$	1,651	$	5,028	$	4,921

Operating Income (Loss):	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(Millions of dollars)	2019		2018		2019		2018
Pork	$	(22)	$	2	$	(31)	$	111
CT&M		14		21		50		30
Marine		(2)		9		2		9
Sugar & Alcohol		(1)		5		(9)		17
Power		9		7		21		13
All Other		1		1		2		2
Segment Totals		(1)		45		35		182
Corporate		(5)		(8)		(22)		(16)
Consolidated Totals	$	(6)	$	37	$	13	$	166

Income (Loss) from Affiliates:	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(Millions of dollars)	2019		2018		2019		2018
Pork	$	(5)	$	(8)	$	(19)	$	(21)
CT&M		(1)		(4)		(6)		(10)
Marine		1		—		2		1
Sugar & Alcohol		—		1		1		1
Power		1		4		3		7
Turkey		(11)		(11)		(30)		(18)
Segment/Consolidated Totals	$	(15)	$	(18)	$	(49)	$	(40)

Total Assets:	September 28,		December 31,
(Millions of dollars)	2019		2018
Pork	$	1,577	$	1,304
CT&M		1,527		1,423
Marine		535		345
Sugar & Alcohol		143		138
Power		250		203
Turkey		272		295
All Other		11		8
Segment Totals		4,315		3,716
Corporate		1,631		1,591
Consolidated Totals	$	5,946	$	5,307

Investments in and Advances to Affiliates:	September 28,		December 31,
(Millions of dollars)	2019		2018
Pork	$	180	$	192
CT&M		250		255
Marine		32		28
Sugar & Alcohol		5		4
Power		3		30
Turkey		264		295
Segment/Consolidated Totals	$	734	$	804

Administrative services provided by the corporate office are allocated to the individual segments and represent corporate services rendered to and costs incurred for each specific segment, with no allocation to individual segments of general corporate management oversight costs. Corporate assets include short-term investments, other current assets related to deferred compensation plans, fixed assets and other miscellaneous items. Corporate operating losses represent certain operating costs not specifically allocated to individual segments and include costs related to Seaboard’s deferred compensation plans, which are offset by the effect of the mark-to-market adjustments on these investments recorded in other investment income (loss), net.