NOTE 7: INVESTMENTS

Investments consist of the following:



Equity Investment	Segment	% Owned	May 1, 2011		May 2, 2010
			(in millions)
Campofrío Food Group (CFG)	International	37%	$	445.1	$	417.3
Mexican joint ventures	International	50%	110.2		75.1
Butterball ⁽¹⁾	Other	—	—		99.8
All other equity method investments	Various	Various	27.2		32.8
Total investments			$	582.5	$	625.0

——————————————


(1)	In the third quarter of fiscal 2011, we completed the sale of Butterball. See Note 3—Impairment and Disposal of Long-lived Assets for further discussion.

Equity in (income) loss of affiliates consists of the following:



		Fiscal Years
Equity Investment	Segment	2011			2010			2009
		(in millions)
CFG ⁽¹⁾	International	$	(17.0	)	$	(4.5	)	$	5.6
Mexican joint ventures	International	(29.6		)	(13.2		)	9.8
Butterball ⁽²⁾	Other	(1.3		)	(18.8		)	19.5
Cattleco, LLC (Cattleco) ⁽³⁾	Other	—			—			15.1
All other equity method investments	Various	(2.2		)	(2.1		)	0.1
Equity in (income) loss of affiliates		$	(50.1	)	$	(38.6	)	$	50.1

——————————————


(1)	CFG prepares its financial statements in accordance with International Financial Reporting Standards. Our share of CFG’s results reflects U.S. GAAP adjustments and thus, there may be differences between the amounts we report for CFG and the amounts reported by CFG.


(2)	In the third quarter of fiscal 2011, we completed the sale of Butterball. See Note 3—Impairment and Disposal of Long-lived Assets for further discussion.


(3)	In fiscal 2009, in conjunction with the sale of Smithfield Beef, we formed a 50/50 joint venture with CGC, named Cattleco, to sell the remaining live cattle from Five Rivers that were not sold to JBS. All of the remaining live cattle were sold before the end of fiscal 2009 at market-based prices. See Note 3—Impairment and Disposal of Long-lived Assets for further discussion.

The combined summarized financial information for CFG consists of the following:



	Fiscal Years
	2011		2010		2009
	(in millions)
Income statement information:
Sales	$	2,433.3	$	2,593.8	$	2,627.9
Gross profit	423.0		559.6		537.2
Net income (loss)	46.1		12.9		(10.0		)

			May 1, 2011		May 2, 2010
			(in millions)
Balance sheet information:
Current assets			$	1,025.6	$	882.9
Long-term assets			1,856.1		1,659.1
Current liabilities			874.1		683.1
Long-term liabilities			990.9		1,015.6

CFG

In fiscal 2009, we sold Groupe Smithfield S.L., a 50/50 joint venture, to Campofrío Alimentación, S.A. (Campofrío) in exchange for shares of Campofrío common stock, creating a new merged company known as CFG. The merger created the largest pan-European company in the packaged meats sector and one of the five largest worldwide. The sale of Groupe Smithfield resulted in a pre-tax gain of $56.0 million, which was recorded in other (loss) income in the consolidated statement of income. We valued the shares of Campofrío stock received in connection with the sale of our interest in Groupe Smithfield based on the last quoted market price of the stock on the closing date of the transaction.

As of May 1, 2011, we held 37,811,302 shares of CFG common stock. The stock was valued at €9.22 per share (approximately $13.65 per share) on the close of the last day of trading before the end of fiscal 2011. Beginning in the third quarter of fiscal 2009 and throughout much of fiscal 2011 and fiscal 2010, the carrying amount of our investment in CFG exceeded the market value of the underlying securities. We have analyzed our investment in CFG for impairment and have determined that the fair value of our investment exceeded the carrying amount as of May 1, 2011. We estimate the fair value of our investment based on a variety of information including market multiples for comparable businesses, expectations about future cash flows of CFG, the market price of the underlying securities and a premium applied for our significant noncontrolling interest. The premium is based on the premise that we are the single largest shareholder of CFG, hold positions on CFG's Board of Directors and have significant influence over the strategic and operational decisions made by CFG. Based on our assessment, no impairment existed as of May 1, 2011.

In fiscal 2010, as part of a debt restructuring, CFG redeemed certain of its debt instruments and, as a result, we recorded $10.4 million of charges in equity in (income) loss of affiliates.

Farasia Corporation (Farasia)

In November 2009 (fiscal 2010), we completed the sale of our investment in Farasia, a 50/50 Chinese joint venture formed in 2001, for RMB 97.0 million ($14.2 million at the time of the transaction). We recorded, in selling, general and administrative expenses, a $4.5 million pre-tax gain on the sale of this investmen