Segment Information

6 Months Ended

Jul. 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 is accounted for using the equity method of accounting.  

During the second quarter of 2022, Seaboard’s CT&M segment sold a 20% interest in a protein and commodity trading company to the majority owner for cash proceeds of $12 million. After this transaction, Seaboard retains a 20% interest.

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

Net Sales:		Three Months Ended July 2, 2022
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	513	$	1,707	$	—	$	24	$	—	$	4	$	2,248
Transportation		3		—		523		—		—		1		527
Energy		140		—		—		—		47		—		187
Other		7		4		—		—		—		—		11
Segment/Consolidated Totals	$	663	$	1,711	$	523	$	24	$	47	$	5	$	2,973

Net Sales:		Three Months Ended July 3, 2021
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	596	$	1,374	$	—	$	26	$	—	$	4	$	2,000
Transportation		2		—		319		—		—		—		321
Energy		89		—		—		—		11		—		100
Other		6		3		—		—		—		—		9
Segment/Consolidated Totals	$	693	$	1,377	$	319	$	26	$	11	$	4	$	2,430

Net Sales:		Six Months Ended July 2, 2022
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	1,004	$	3,274	$	—	$	55	$	—	$	8	$	4,341
Transportation		5		—		989		—		—		1		995
Energy		261		—		—		—		65		—		326
Other		13		7		—		—		—		—		20
Segment/Consolidated Totals	$	1,283	$	3,281	$	989	$	55	$	65	$	9	$	5,682

Net Sales:		Six Months Ended July 3, 2021
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	1,091	$	2,520	$	—	$	50	$	—	$	7	$	3,668
Transportation		3		—		619		—		—		1		623
Energy		152		—		—		2		24		—		178
Other		12		8		—		—		—		—		20
Segment/Consolidated Totals	$	1,258	$	2,528	$	619	$	52	$	24	$	8	$	4,489

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 to evaluate 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				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
(Millions of dollars)	2022		2021		2022		2021
Pork	$	1	$	129	$	28	$	190
CT&M		30		16		42		32
Marine		155		32		268		53
Sugar and Alcohol		—		(1)		2		—
Power		6		(5)		1		(7)
All Other		1		—		1		1
Segment Totals		193		171		342		269
Corporate		(1)		(6)		(4)		(12)
Consolidated Totals	$	192	$	165	$	338	$	257

Income (Loss) from Affiliates:	Three Months Ended				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
(Millions of dollars)	2022		2021		2022		2021
Pork	$	7	$	(6)	$	7	$	(2)
CT&M		4		4		9		10
Marine		1		1		3		2
Sugar and Alcohol		—		—		—		—
Power		—		—		—		—
Turkey		11		(4)		27		(9)
Segment/Consolidated Totals	$	23	$	(5)	$	46	$	1

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:	July 2,		December 31,
(Millions of dollars)	2022		2021
Pork	$	2,524	$	2,265
CT&M		2,238		2,054
Marine		881		749
Sugar and Alcohol		150		155
Power		368		359
Turkey		275		245
All Other		8		7
Segment Totals		6,444		5,834
Corporate		1,366		1,669
Consolidated Totals	$	7,810	$	7,503

Investments in and Advances to Affiliates:	July 2,		December 31,
(Millions of dollars)	2022		2021
Pork	$	153	$	142
CT&M		208		224
Marine		34		33
Sugar and Alcohol		4		4
Power		3		3
Turkey		275		245
Segment/Consolidated Totals	$	677	$	651

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of July 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				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
(Millions of dollars)	2022		2021		2022		2021
Net sales	$	417	$	371	$	816	$	712
Operating income (loss)	$	27	$	(4)	$	40	$	(20)
Net earnings (loss)	$	21	$	(7)	$	51	$	(18)

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% 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.