Segment Information

3 Months Ended

Apr. 02, 2022

Segment Information

Segment Information

Note 8 – Segment Information

Seaboard has six reportable segments: Pork, CT&M, Marine, Sugar and Alcohol, Power and Turkey, each offering a specific product or service. For details on the respective products or services of each segment, see Note 13 to the consolidated financial statements included in Seaboard’s annual report for the year ended December 31, 2021.  

On January 1, 2022, Seaboard’s Pork segment sold a 50% interest in Seaboard de Mexico USA LLC, its ham-boning operations in Mexico, to Triumph Foods, LLC, a partner in the Pork segment’s other joint ventures, for cash proceeds of approximately $9 million, net of cash sold. As a result of this transaction, the subsidiary was deconsolidated and Seaboard’s

Pork segment recognized a $6 million gain on sale of a controlling interest in a subsidiary, classified in Miscellaneous, net. Seaboard’s Pork segment retained a 50% non-controlling interest in Seaboard de Mexico USA LLC, valued at $12 million, that will be accounted for using the equity method of accounting.

The following tables present Seaboard’s sales disaggregated by revenue source and segment:

		Three Months Ended April 2, 2022
(Millions of dollars)		Pork		Commodity Trading & Milling		Marine		Sugar and Alcohol		Power		All Other		Consolidated Totals
Major Products/Services Lines:
Products	$	491	$	1,567	$	—	$	31	$	—	$	4	$	2,093
Transportation		2		—		466		—		—		—		468
Energy		121		—		—		—		18		—		139
Other		6		3		—		—		—		—		9
Segment/Consolidated Totals	$	620	$	1,570	$	466	$	31	$	18	$	4	$	2,709

		Three Months Ended April 3, 2021
(Millions of dollars)		Pork		Commodity Trading & Milling		Marine		Sugar and Alcohol		Power		All Other		Consolidated Totals
Major Products/Services Lines:
Products	$	495	$	1,146	$	—	$	24	$	—	$	3	$	1,668
Transportation		1		—		300		—		—		1		302
Energy		63		—		—		2		13		—		78
Other		6		5		—		—		—		—		11
Segment/Consolidated Totals	$	565	$	1,151	$	300	$	26	$	13	$	4	$	2,059

The following tables present Seaboard’s operating income (loss) and income (loss) from affiliates by segment. 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. 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.

Operating Income (Loss):	Three Months Ended
	April 2,		April 3,
(Millions of dollars)	2022		2021
Pork	$	27	$	61
CT&M		12		16
Marine		113		21
Sugar and Alcohol		2		1
Power		(5)		(2)
All Other		—		1
Segment Totals		149		98
Corporate		(3)		(6)
Consolidated Totals	$	146	$	92

Income (Loss) from Affiliates:	Three Months Ended
	April 2,		April 3,
(Millions of dollars)	2022		2021
Pork	$	—	$	4
CT&M		5		6
Marine		2		1
Sugar and Alcohol		—		—
Power		—		—
Turkey		16		(5)
Segment/Consolidated Totals	$	23	$	6

The following tables present total assets by segment and the investments in and advances to affiliates by segment. Corporate assets primarily include cash and short-term investments, other current assets related to deferred compensation plans, long-term investments and other miscellaneous items. Corporate operating results 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.

Total Assets:	April 2,		December 31,
(Millions of dollars)	2022		2021
Pork	$	2,393	$	2,265
CT&M		2,099		2,054
Marine		854		749
Sugar and Alcohol		150		155
Power		345		359
Turkey		264		245
All Other		7		7
Segment Totals		6,112		5,834
Corporate		1,557		1,669
Consolidated Totals	$	7,669	$	7,503

Investments in and Advances to Affiliates:	April 2,		December 31,
(Millions of dollars)	2022		2021
Pork	$	154	$	142
CT&M		221		224
Marine		33		33
Sugar and Alcohol		4		4
Power		3		3
Turkey		264		245
Segment/Consolidated Totals	$	679	$	651

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of April 2, 2022 and December 31, 2021, Butterball had total assets of $1.1 billion and $1.0 billion, respectively. Butterball’s summarized income statement information was as follows:

		Three Months Ended
		April 2,		April 3,
(Millions of dollars)		2022		2021
Net sales	$	399	$	341
Operating income (loss)	$	13	$	(16)
Net income (loss)	$	30	$	(11)

Since 2010, Seaboard has held warrants, which upon exercise for a nominal price, enable Seaboard to acquire an additional 5% equity interest in Butterball. The warrants qualified for equity treatment under accounting standards and were classified as investments in and advances to affiliates in the consolidated balance sheets. Seaboard could exercise

these warrants at any time prior to December 31, 2025, when the warrants would have expired. Butterball had the right to repurchase the warrants for fair market value. The warrant agreement essentially provided Seaboard with a 52.5% economic interest, as these warrants were in substance an additional equity interest. Therefore, Seaboard has historically recorded 52.5% of Butterball’s earnings as income (loss) from affiliates in the consolidated statements of comprehensive income. On April 19, 2022, Seaboard exercised these warrants for nominal consideration to acquire the additional 5% percent of the issued and outstanding stock units in Butterball, resulting in no impact to the financial statements. All significant corporate governance matters upon exercise are still to be shared equally between Seaboard and its partner in Butterball. Seaboard did not acquire any new consequential rights upon exercise of the warrants.