Equity Method Investments

12 Months Ended

Dec. 31, 2021

Equity Method Investments

Equity Method Investments

Note 6 − Equity Method Investments

Seaboard has several investments in and advances to non-controlled, non-consolidated affiliates that are all accounted for using the equity method of accounting. Financial information from certain foreign affiliates is reported on a one- to three-month lag, depending on the specific entity. By segment, combined condensed financial information of the respective affiliates is included in the tables below.

	Investments in and				Income (Loss)
	Advances to Affiliates				from Affiliates
	December 31,				Years ended December 31,
(Millions of dollars)	2021		2020		2021		2020		2019
Pork	$	142	$	172	$	3	$	(9)	$	(22)
CT&M		224		222		18		(2)		(5)
Marine		33		30		6		2		3
Sugar and Alcohol		4		6		—		1		1
Power		3		3		—		—		3
Turkey		245		265		(20)		(10)		(21)
Segment/Consolidated Totals	$	651	$	698	$	7	$	(18)	$	(41)

The Pork segment has noncontrolling interests in Daily’s Premium Meats, LLC (“Daily’s”) (50%) and Seaboard Triumph Foods, LLC (“STF”) (50%). Daily’s produces and markets raw and pre-cooked bacon. STF operates a pork processing plant. Seaboard’s Pork segment supplies raw materials to both of these facilities for processing and provides marketing services to STF for its pork products. Beginning in 2022, Daily’s and STF will supply feedstock to the renewable diesel operations. In January 2022, the Pork segment sold 50% of its ham-boning operations in Mexico. The Pork segment will continue to sell raw materials for further processing to this affiliate, and earnings from the Mexico operations will be reflected in Income (loss) from affiliates effective in the first quarter of 2022.

Pork Segment		December 31,
(Millions of dollars)		2021		2020		2019
Net sales	$	2,010	$	1,543	$	1,453
Net income (loss)	$	5	$	(18)	$	(43)
Total assets	$	584	$	586	$	639
Total liabilities	$	302	$	245	$	277
Total equity	$	282	$	341	$	362

The CT&M segment has noncontrolling interests in foreign businesses conducting flour, maize and feed milling, baking operations, poultry production and processing, and agricultural commodity trading. As of December 31, 2021, the location and percentage ownership of CT&M’s affiliates were as follows: Botswana (50%), Democratic Republic of Congo (50%), Gambia (50%), Kenya (46.92%-49%), Lesotho (50%), Mauritania (50%), Morocco (11.96%-17.86%), Nigeria (25%-48.33%), Senegal (49%), South Africa (50%), Tanzania (49%), Uganda (49%) and Zambia (49%) in Africa; Colombia (40%-42%), Ecuador (25%-50%), Guyana (50%), and Peru (50%) in South America; Jamaica (50%) and Haiti (23.33%) in the Caribbean; Turkey (25%) in Europe; and Canada (45%) and the U.S. (40%) in North America. As of December 31, 2021, the CT&M segment’s carrying value of certain investments in affiliates was more than its share of the affiliates’ book value by $53 million. The excess is attributable primarily to the valuation of property, plant and equipment and intangible assets. Certain basis adjustments are being amortized to income (loss) from affiliates over the remaining life of the assets. Seaboard’s CT&M segment supplies commodities to the majority of its equity method milling affiliates.

CT&M Segment	December 31,
(Millions of dollars)	2021			2020		2019
Net sales	$	2,766	$	2,482	$	3,129
Net income (loss)	$	47	$	(2)	$	(12)
Total assets	$	1,798	$	1,745	$	1,697
Total liabilities	$	1,199	$	1,185	$	1,075
Total equity	$	599	$	560	$	622

The Marine segment has noncontrolling interests in businesses that primarily own cargo terminal operations in the Caribbean (16.71%- 22.07%). These affiliates provide terminal and stevedoring services to the Marine segment. As of December 31, 2021, the Marine segment’s carrying value of certain investments in affiliates was less than its share of the affiliates’ book value by $33 million. The difference is attributable primarily to the valuation of property, plant and equipment and impairments taken by Seaboard, but not the respective entity. Certain basis adjustments are being amortized to income (loss) from affiliates over the remaining life of the assets.

Marine Segment		December 31,
(Millions of dollars)		2021		2020		2019
Net sales	$	74	$	66	$	70
Net income	$	27	$	8	$	12
Total assets	$	245	$	253	$	269
Total liabilities	$	88	$	98	$	107
Total equity	$	157	$	155	$	162

The Sugar and Alcohol segment has noncontrolling interests in two sugar-related businesses in Argentina (50%).

Sugar and Alcohol Segment	December 31,
(Millions of dollars)	2021			2020		2019
Net sales	$	6	$	7	$	10
Net income	$	—	$	1	$	3
Total assets	$	8	$	14	$	13
Total liabilities	$	1	$	2	$	2
Total equity	$	7	$	12	$	11

The Power segment has noncontrolling interests in two energy-related businesses in the Dominican Republic (45% and 50%). 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.

Power Segment	December 31,
(Millions of dollars)	2021			2020		2019
Net sales	$	1	$	1	$	143
Net income	$	1	$	—	$	10
Total assets	$	12	$	12	$	11
Total liabilities	$	5	$	6	$	4
Total equity	$	7	$	6	$	7

The Turkey segment represents Seaboard’s 50% noncontrolling interest in Butterball. Within total assets, Butterball had trade name intangible assets of $111 million and goodwill of $66 million as of December 31, 2021.

Seaboard holds warrants, which upon exercise for a nominal price, would enable Seaboard to acquire an additional 5% equity interest in Butterball. The warrants qualify for equity treatment under accounting standards and are classified as investments in and advances to affiliates in the consolidated balance sheets. Seaboard can exercise these warrants at any time prior to December 31, 2025, when the warrants expire. Butterball has the right to repurchase the warrants for fair market value. The warrant agreement essentially provides Seaboard with a 52.5% economic interest, as these warrants are in substance an additional equity interest. Therefore, Seaboard records 52.5% of Butterball’s earnings as income (loss) from affiliates in the consolidated statements of comprehensive income. However, all significant corporate governance matters would continue to be shared equally between Seaboard and its partner in Butterball even if the warrants were exercised, unless Seaboard already owned a majority of the voting rights at the time of exercise.

Turkey Segment	December 31,
(Millions of dollars)	2021			2020		2019
Net sales	$	1,792	$	1,675	$	1,612
Operating loss	$	(34)	$	(6)	$	(20)
Net loss	$	(38)	$	(20)	$	(40)
Total assets	$	991	$	993	$	1,038
Total liabilities	$	517	$	481	$	507
Total equity	$	474	$	512	$	531