Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | SEABOARD CORP /DE/ | |
Entity Central Index Key | 88,121 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,170,550 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Net sales: | ||||
Products (includes sales to affiliates of $293, $261, $822 and $697) | $ 1,135 | $ 1,070 | $ 3,413 | $ 3,230 |
Services (includes sales to affiliates of $0, $0, $3 and $1) | 238 | 237 | 732 | 716 |
Other | 29 | 23 | 78 | 60 |
Total net sales | 1,402 | 1,330 | 4,223 | 4,006 |
Cost of sales and operating expenses: | ||||
Products | 1,028 | 1,006 | 3,106 | 2,977 |
Services | 206 | 198 | 641 | 619 |
Other | 20 | 18 | 61 | 51 |
Total cost of sales and operating expenses | 1,254 | 1,222 | 3,808 | 3,647 |
Gross income | 148 | 108 | 415 | 359 |
Selling, general and administrative expenses | 77 | 66 | 224 | 205 |
Operating income | 71 | 42 | 191 | 154 |
Other income (expense): | ||||
Interest expense | (9) | (7) | (19) | (23) |
Interest income | 2 | 7 | 9 | 11 |
Interest income from affiliates | 6 | 6 | 18 | 18 |
Income (loss) from affiliates | (3) | 21 | (10) | 54 |
Other investment income, net | 54 | 29 | 119 | 42 |
Foreign currency gains, net | 3 | 1 | 12 | 10 |
Miscellaneous, net | 1 | (1) | ||
Total other income, net | 53 | 58 | 129 | 111 |
Earnings before income taxes | 124 | 100 | 320 | 265 |
Income tax expense | (43) | (25) | (96) | (55) |
Net earnings | 81 | 75 | 224 | 210 |
Less: Net income attributable to noncontrolling interests | (1) | |||
Net earnings attributable to Seaboard | $ 81 | $ 75 | $ 224 | $ 209 |
Earnings per common share | $ 69.28 | $ 64.42 | $ 191.63 | $ 178.67 |
Other comprehensive income (loss), net of income tax benefit (expense) of $1, $1, $0 and $9: | ||||
Foreign currency translation adjustment | $ (2) | $ (7) | $ (3) | $ (23) |
Unrealized gain on investments | 1 | 3 | 1 | |
Unrecognized pension cost | 1 | 3 | 2 | |
Other comprehensive income (loss), net of tax | (1) | (6) | 3 | (20) |
Comprehensive income | 80 | 69 | 227 | 190 |
Less: Comprehensive income attributable to noncontrolling interests | (1) | |||
Comprehensive income attributable to Seaboard | $ 80 | $ 69 | $ 227 | $ 189 |
Average number of shares outstanding (in shares) | 1,170,550 | 1,170,550 | 1,170,550 | 1,170,550 |
Dividends declared per common share (in dollars per share) | $ 1.50 | $ 4.50 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Other comprehensive income (loss), income tax benefit (expense) | $ 1 | $ 1 | $ 0 | $ 9 |
Products | ||||
Sales to affiliates | 293 | 261 | 822 | 697 |
Services | ||||
Sales to affiliates | $ 0 | $ 0 | $ 3 | $ 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 61 | $ 77 |
Short-term investments | 1,358 | 1,277 |
Receivables, net | 622 | 627 |
Inventories | 828 | 762 |
Other current assets | 120 | 105 |
Total current assets | 2,989 | 2,848 |
Net property, plant and equipment | 1,064 | 1,006 |
Investments in and advances to affiliates | 846 | 773 |
Notes receivable from affiliates, net | 17 | 26 |
Other non-current assets | 77 | 102 |
Total assets | 4,993 | 4,755 |
Current liabilities: | ||
Notes payable to banks | 97 | 121 |
Current maturities of long-term debt | 50 | 17 |
Accounts payable | 190 | 216 |
Deferred revenue | 140 | 114 |
Other current liabilities | 298 | 317 |
Total current liabilities | 775 | 785 |
Long-term debt, less current maturities | 490 | 499 |
Deferred income taxes | 122 | 77 |
Other liabilities and deferred credits | 210 | 219 |
Total non-current liabilities | 822 | 795 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,170,550 shares | 1 | 1 |
Accumulated other comprehensive loss | (301) | (304) |
Retained earnings | 3,683 | 3,465 |
Total Seaboard stockholders' equity | 3,383 | 3,162 |
Noncontrolling interests | 13 | 13 |
Total equity | 3,396 | 3,175 |
Total liabilities and stockholders' equity | $ 4,993 | $ 4,755 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, Authorized shares | 1,250,000 | 1,250,000 |
Common stock, issued shares | 1,170,550 | 1,170,550 |
Common stock, outstanding shares | 1,170,550 | 1,170,550 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 224 | $ 210 |
Adjustments to reconcile net earnings to cash from operating activities: | ||
Depreciation and amortization | 88 | 74 |
Deferred income taxes | 44 | 34 |
Loss (income) from affiliates | 10 | (54) |
Dividends received from affiliates | 24 | 31 |
Other investment income, net | (119) | (42) |
Other, net | (10) | 13 |
Changes in assets and liabilities, net of acquisition: | ||
Receivables, net of allowance | 14 | 42 |
Inventories | (67) | (14) |
Other current assets | (10) | 7 |
Current liabilities, exclusive of debt | (5) | 26 |
Other, net | 5 | (28) |
Net cash from operating activities | 198 | 299 |
Cash flows from investing activities: | ||
Purchase of short-term investments | (420) | (353) |
Proceeds from the sale of short-term investments | 428 | 461 |
Proceeds from the maturity of short-term investments | 42 | 19 |
Capital expenditures | (118) | (128) |
Proceeds from the sale of fixed assets | 3 | 46 |
Acquisition of businesses | (54) | (214) |
Investments in and advances to affiliates, net | (87) | (55) |
Notes receivable issued to affiliates | (2) | (12) |
Principal payments received on notes receivable from affiliates | 3 | 12 |
Purchase of long-term investments | (9) | (19) |
Other, net | (2) | 8 |
Net cash from investing activities | (216) | (235) |
Cash flows from financing activities: | ||
Notes payable to banks, net | (20) | (2) |
Proceeds from long-term debt | 38 | 2 |
Principal payments of long-term debt | (13) | (1) |
Dividends paid | (6) | |
Net cash from financing activities | (1) | (1) |
Effect of exchange rate change on cash and cash equivalents | 3 | |
Net change in cash and cash equivalents | (16) | 63 |
Cash and cash equivalents at beginning of year | 77 | 50 |
Cash and cash equivalents at end of period | $ 61 | $ 113 |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies and Basis of Presentation | |
Accounting Policies and Basis of Presentation | Note 1 – Accounting Policies and Basis of Presentation The condensed consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries (“Seaboard”). All significant intercompany balances and transactions have been eliminated in consolidation. Seaboard’s investments in non-consolidated affiliates are accounted for by the equity method. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Seaboard for the year ended December 31, 2016, as filed in its annual report on Form 10-K. Seaboard’s first three quarterly periods include approximately 13 weekly periods ending on the Saturday closest to the end of March, June and September. Seaboard’s year-end is December 31. The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. As Seaboard conducts its commodity trading business with third parties, consolidated subsidiaries and non-consolidated affiliates on an interrelated basis, gross margin on non-consolidated affiliates cannot be clearly distinguished without making numerous assumptions primarily with respect to mark-to-market accounting for commodity derivatives. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to allowance for doubtful accounts, valuation of inventories, impairment of long-lived assets, potential write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes and accrued pension liability. Actual results could differ from those estimates. Recently Issued Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance to develop a single, comprehensive revenue recognition model for all contracts with customers. This guidance requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods and services. This guidance supersedes nearly all existing revenue recognition guidance under GAAP. Seaboard will adopt this guidance on January 1, 2018, for all consolidated subsidiaries using the cumulative effect transition method, where any cumulative effect of initially adopting the guidance is recognized at the date of adoption. Based on management’s current assessment, the majority of Seaboard’s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings, although it anticipates expansion of consolidated financial statement disclosures in order to comply with the guidance. In January 2016, the FASB issued guidance that requires entities to measure equity investments, other than those accounted for using the equity method of accounting, at fair value and recognize any changes in fair value in net income if a readily determinable fair value exists. For investments without readily determinable fair values, the cost method of accounting is eliminated. An entity may elect to record these equity investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In February 2016, the FASB issued guidance that a lessee should record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The recognition, measurement, and presentation of expenses and cash flows arising from a financing lease have not significantly changed from the previous guidance. For operating leases, a lessee is required to: (1) recognize a ROU asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. Seaboard will adopt this guidance on January 1, 2019, for all consolidated subsidiaries. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. Seaboard is in the preliminary stages of its assessment of the effect the guidance will have on its existing accounting policies and the consolidated financial statements, but expects there will be an increase in assets and liabilities on the consolidated balance sheets at adoption due to the recording of ROU assets and corresponding lease liabilities, which will likely be material. See Note 10 to the consolidated financial statements included in Seaboard’s annual report for the year ended December 31, 2016, for information about Seaboard’s lease obligations . In March 2017, the FASB issued guidance that will require the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in inventory. The other components of net periodic benefit cost will be presented outside of operating income and will not be capitalizable. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments | |
Investments | Note 2 – Investments The following is a summary of the amortized cost and estimated fair value of short-term investments classified as trading securities held at September 30, 2017 and December 31, 2016. September 30, 2017 December 31, 2016 Amortized Fair Amortized Fair (Millions of dollars) Cost Value Cost Value Domestic equity securities $ 609 $ 716 $ 444 $ 482 Foreign equity securities 265 310 198 199 Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 174 175 437 437 High yield securities 85 86 114 115 Money market funds held in trading accounts 36 36 13 13 Collateralized loan obligations 28 29 25 26 Other trading securities 4 6 5 5 Total trading short-term investments $ 1,201 $ 1,358 $ 1,236 $ 1,277 Seaboard had $110 million of equity securities denominated in foreign currencies at September 30, 2017, with $47 million in euros, $22 million in Japanese yen, $19 million in British pounds, $6 million in Swiss francs and the remaining $16 million in various other currencies. At December 31, 2016, Seaboard had $91 million of equity securities denominated in foreign currencies, with $35 million in euros, $20 million in Japanese yen, $16 million in British pounds, $6 million in Swiss francs and the remaining $14 million in various other currencies. Also, money market funds denominated in various foreign currencies were less than $1 million and $1 million at September 30, 2017 and December 31, 2016, respectively. Unrealized gains related to trading securities still held at the end of the respective reporting period were $54 million and $114 million for the three and nine months ended September 30, 2017, respectively, and $27 million and $41 million for the three and nine months ended October 1, 2016, respectively. In addition to its short-term investments, Seaboard also has trading securities related to Seaboard’s deferred compensation plans classified in other current assets in the condensed consolidated balance sheets. See Note 5 to the condensed consolidated financial statements for information on the types of trading securities held related to the deferred compensation plans. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Inventories | Note 3 – Inventories The following is a summary of inventories at September 30, 2017 and December 31, 2016: September 30, December 31, (Millions of dollars) 2017 2016 At lower of LIFO cost or market: Live hogs and materials $ 296 $ 273 Fresh pork and materials 32 34 328 307 LIFO adjustment (23) (21) Total inventories at lower of LIFO cost or market 305 286 At lower of FIFO cost or market: Grains, oilseeds and other commodities 330 279 Sugar produced and in process 33 30 Other 72 62 Total inventories at lower of FIFO cost or market 435 371 Grain, flour and feed at lower of weighted average cost or market 88 105 Total inventories $ 828 $ 762 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes | |
Income Taxes | Note 4 – Income Taxes Seaboard’s tax returns are regularly audited by federal, state and foreign tax authorities, which may result in material adjustments. Seaboard’s 2013 through 2015 U.S. income tax returns are currently under Internal Revenue Service examination. There have not been any material changes in unrecognized income tax benefits since December 31, 2016. Interest and penalties related to unrecognized tax benefits were not material for the three and nine months ended September 30, 2017. |
Derivatives and Fair Value of F
Derivatives and Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivatives and Fair Value of Financial Instruments | |
Derivatives and Fair Value of Financial Instruments | Note 5 – Derivatives and Fair Value of Financial Instruments GAAP discusses valuation techniques, such as the market approach (prices and other relevant information generated by market conditions involving identical or comparable assets or liabilities), the income approach (techniques to convert future amounts to single present amounts based on market expectations including present value techniques and option-pricing), and the cost approach (amount that would be required to replace the service capacity of an asset, which is often referred to as replacement cost). Seaboard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad levels: Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities that Seaboard has the ability to access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. The following table shows assets and liabilities measured at fair value on a recurring basis as of September 30, 2017, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. Seaboard determines if there are any transfers between levels at the end of a reporting period. There were no transfers between levels that occurred in the first nine months of 2017. The trading securities classified as other current assets below are assets held for Seaboard’s deferred compensation plans. Balance September 30, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 716 $ 716 $ — $ — Foreign equity securities 310 310 — — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 175 173 2 — High yield securities 86 20 66 — Money market funds held in trading accounts 36 36 — — Collateralized loan obligations 29 — 29 — Other trading securities 6 5 1 — Trading securities – other current assets: Domestic equity securities 38 38 — — Foreign equity securities 5 5 — — Fixed income mutual funds 4 4 — — Other 2 2 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 4 — 4 — Total Assets $ 1,414 $ 1,312 $ 102 $ — Liabilities: Derivatives: Commodities (1) $ 2 $ 2 $ — $ — Interest rate swaps 3 — 3 — Total Liabilities $ 5 $ 2 $ 3 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017, the commodity derivatives had a margin account balance of $16 million resulting in a net other current asset in the condensed consolidated balance sheet of $17 million. The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 482 $ 482 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 437 437 — — Foreign equity securities 199 199 — — High yield securities 115 15 100 — Collateralized loan obligations 26 — 26 — Money market funds held in trading accounts 13 13 — — Other trading securities 5 5 — — Trading securities – other current assets: Domestic equity securities 30 30 — — Foreign equity securities 3 3 — — Fixed income mutual funds 3 3 — — Other 4 4 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 1 — 1 — Total Assets $ 1,321 $ 1,194 $ 127 $ — Liabilities: Derivatives: Commodities (1) $ 1 $ 1 $ — $ — Interest rate swaps 4 — 4 — Foreign currencies 4 — 4 — Total Liabilities $ 9 $ 1 $ 8 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2016, the commodity derivatives had a margin account balance of $10 million resulting in a net other current asset in the condensed consolidated balance sheet of $12 million. Financial instruments consisting of cash and cash equivalents, net receivables, notes payable, and accounts payable are carried at cost, which approximates fair value as a result of the short-term nature of the instruments. The amortized cost and estimated fair values of short-term investments at September 30, 2017 and December 31, 2016 are presented in Note 2 to the condensed consolidated financial statements. The fair value of long-term debt is estimated by comparing interest rates for debt with similar terms and maturities. As Seaboard’s long-term debt is variable-rate, its carrying amount approximates fair value. If Seaboard’s long-term debt was measured at fair value in its condensed consolidated balance sheets, it would have been classified as level 2 in the fair value hierarchy. While management believes its derivatives are primarily economic hedges of its firm purchase and sales contracts or anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these types of transactions as hedges for accounting purposes. As the derivatives discussed below are not accounted for as hedges, fluctuations in the related commodity prices, foreign currency exchange rates and interest rates could have a material impact on earnings in any given period. Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. The nature of Seaboard’s market risk exposure has not changed materially since December 31, 2016. Commodity Instruments Seaboard uses various derivative futures and options to manage its risk of price fluctuations for raw materials and other inventories, finished product sales and firm sales commitments. At September 30, 2017, Seaboard had open net derivative contracts to purchase 34 million bushels of grain and 13 million pounds of hogs and open net derivative contracts to sell 55 million pounds of soybean oil and 4 million gallons of heating oil. At December 31, 2016, Seaboard had open net derivative contracts to purchase 22 million bushels of grain and 14 million pounds of hogs and open net derivative contracts to sell 35 million pounds of soybean oil and 4 million gallons of heating oil. Commodity derivatives are recorded at fair value with any changes in fair value being marked-to-market as a component of cost of sales in the condensed consolidated statements of comprehensive income. Foreign Currency Exchange Agreements Seaboard enters into foreign currency exchange agreements to manage the foreign currency exchange rate risk with respect to certain transactions denominated in foreign currencies. Foreign currency exchange agreements that are primarily related to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of cost of sales in the condensed consolidated statements of comprehensive income. Foreign currency exchange agreements that are not related to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of foreign currency gains (losses), net in the condensed consolidated statements of comprehensive income. At September 30, 2017 and December 31, 2016, Seaboard had trading foreign currency exchange agreements to cover a portion of its firm sales and purchase commitments and related trade receivables and payables with net notional amounts of $73 million and $81 million, respectively, primarily related to the South African rand and Canadian dollar. Interest Rate Exchange Agreements During 2010, Seaboard entered into three ten-year interest rate exchange agreements to mitigate the effects of fluctuations in interest rates on variable-rate debt. These agreements involve the exchange of fixed-rate and variable-rate interest payments over the life of the agreements without the exchange of the underlying notional amounts. Seaboard pays a fixed rate and receives a variable rate of interest on the notional amounts. At September 30, 2017 and December 31, 2016, Seaboard had three interest rate exchange agreements outstanding with a total notional value of $75 million. None of Seaboard’s outstanding interest rate exchange agreements qualify as hedges for accounting purposes. Accordingly, the changes in fair value of these agreements are recorded in miscellaneous, net in the condensed consolidated statements of comprehensive income. Counterparty Credit Risk From time to time Seaboard is subject to counterparty credit risk related to its foreign currency exchange agreements and interest rate swaps should the counterparties fail to perform according to the terms of the contracts. As of September 30, 2017, Seaboard had a maximum amount of loss due to credit risk of $4 million with six counterparties related to foreign currency exchange agreements and no counterparty credit risk related to the interest rate swaps. Seaboard does not hold any collateral related to these agreements. The following table provides the amount of gain or (loss) recognized in income for each type of derivative and where it was recognized in the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2017 and October 1, 2016. Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Commodities Cost of sales $ (6) $ (14) $ (5) $ 17 Foreign currencies Cost of sales 2 (12) (3) (25) Foreign currencies Foreign currency gains, net (1) — (2) — Interest rate swaps Miscellaneous, net — 1 — (3) The following table provides the fair value of each type of derivative held as of September 30, 2017 and December 31, 2016 and where each derivative is included in the condensed consolidated balance sheets. Asset Derivatives Liability Derivatives September 30, December 31, September 30, December 31, (Millions of dollars) 2017 2016 2017 2016 Commodities (1) Other current assets $ 3 $ Other current liabilities $ 2 $ Foreign currencies Other current assets 4 Other current liabilities — 4 Interest rate swaps Other current assets — — Other current liabilities 3 (1) Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017 and December 31, 2016, the commodity derivatives had a margin account balance of $16 million and $10 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $17 million and $12 million, respectively. |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefits | |
Employee Benefits | Note 6 – Employee Benefits Effective January 1, 2017, Seaboard merged the assets and liabilities of its two defined benefit pension plans for its domestic salaried and clerical employees. At this time, no contributions are expected to be made to the combined plan in 2017. Seaboard also sponsors non-qualified, unfunded supplemental executive plans, and has certain individual, non-qualified, unfunded supplemental retirement agreements for certain retired employees. Management has no plans to provide funding for these supplemental plans in advance of when the benefits are paid. The net periodic benefit cost for all of these plans was as follows: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Components of net periodic benefit cost: Service cost $ 2 $ 3 $ 6 $ 7 Interest cost 3 2 8 8 Expected return on plan assets (2) (2) (7) (6) Amortization and other 1 1 4 3 Net periodic benefit cost $ 4 $ 4 $ 11 $ 12 |
Notes Payable, Long-term Debt,
Notes Payable, Long-term Debt, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable, Long-term Debt, Commitments and Contingencies | |
Notes Payable, Long-term Debt, Commitments and Contingencies | Note 7 – Notes Payable, Long-term Debt, Commitments and Contingencies Notes Payable Of the $97 million of notes payable outstanding at September 30, 2017, all were related to foreign subsidiaries, with $80 million denominated in South African rand, $15 million denominated in Argentine pesos and $2 million denominated in Zambian kwacha. The weighted average interest rate for outstanding notes payable was 11.56% and 14.88% at September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017, Seaboard had uncommitted credit lines totaling $419 million, of which $369 million related to foreign subsidiaries. As of September 30, 2017, Seaboard’s borrowing capacity under its uncommitted lines was reduced by $97 million drawn under the uncommitted lines and $3 million of letters of credit. The notes payable under the credit lines are unsecured and do not require compensating balances. Also, Seaboard has a $100 million committed credit line secured by certain short-term investments, but there was no outstanding balance as of September 30, 2017. During the third quarter of 2017, Seaboard renewed this credit line for another year until September 28, 2018, with no other changes to the agreement. Long-term Debt The following is a summary of long-term debt: September 30, December 31, (Millions of dollars) 2017 2016 Term Loan due 2022 $ 488 $ 497 Foreign subsidiary obligations due 2018 through 2023 53 20 Total long-term debt at face value 541 517 Current maturities of long-term debt and unamortized discount (51) (18) Long-term debt, less current maturities and unamortized discount $ 490 $ 499 During the third quarter of 2017, Seaboard’s Sugar segment refinanced certain notes payable with a short-term loan denominated in Argentine pesos valued at approximately $32 million as of September 30, 2017. The short-term loan incurs a fixed rate of interest of 23% until its maturity on February 7, 2018. The interest rate on the Term Loan due 2022 was 2.86% and 2.40% at September 30, 2017 and December 31, 2016, respectively. The weighted average interest rate on Seaboard’s foreign subsidiary obligations was 21.18% and 22.39% at September 30, 2017 and December 31, 2016, respectively. Seaboard was in compliance with all restrictive debt covenants relating to these agreements as of September 30, 2017. Contingencies On September 18, 2014, and subsequently in 2015 and 2016, Seaboard received a number of grand jury subpoenas and informal requests for information from the Department of Justice, Asset Forfeiture and Money Laundering Section (“AFMLS”), seeking records related to specified foreign companies and individuals. The companies and individuals as to which the requested records relate were not affiliated with Seaboard, although Seaboard has also received subpoenas and requests for additional information relating to an affiliate of Seaboard. During 2017, Seaboard received grand jury subpoenas requesting documents and information related to money transfers and bank accounts in the Democratic Republic of Congo (“DRC”) and other African countries and requests to interview certain Seaboard employees and to obtain testimony before a grand jury. Seaboard has retained outside counsel and is cooperating with the government’s investigation. It is impossible at this stage either to determine the probability of a favorable or unfavorable outcome or to estimate the amount of potential loss, if any, resulting from the government’s inquiry. On September 19, 2012, the U.S. Immigration and Customs Enforcement (“ICE”) executed three search warrants authorizing the seizure of certain records from Seaboard’s offices in Merriam, Kansas and at the Seaboard Foods LLC (“Seaboard Foods”) employment office and the human resources department in Guymon, Oklahoma. The warrants generally called for the seizure of employment-related files, certain e-mails and other electronic records relating to Medicaid and Medicaid recipients, certain health care providers in the Guymon area, and Seaboard’s health plan and certain personnel issues. The U.S. Attorney’s Office for the Western District of Oklahoma (“USAO”), which has been leading the investigation, previously advised Seaboard that it intended to close its investigation and that no charges would be brought against Seaboard. However, discussions continue with the USAO, ICE and the Oklahoma Attorney General's office regarding the matter, including the possibility of a settlement. No proceedings have been filed or brought as of the date of this report. It is not possible at this time to determine whether a settlement will be reached or whether Seaboard will incur any material fines, penalties or liabilities in connection with this matter. On February 16, 2016, Seaboard Foods received an information request from the U.S. Environmental Protection Agency (“EPA”) seeking information under the Clean Air Act with regard to various ammonia releases at Seaboard Foods’ pork processing plant in Guymon, Oklahoma. Seaboard Foods has been cooperating with the EPA with regard to the investigation. On July 21, 2017, a letter was received from the EPA alleging violations of regulations and indicating an intent to proceed administratively with respect to these violations. The letter included a draft Consent Agreement and Final Order (“Agreement”) which proposed a civil penalty and the requirement that a “Supplemental Environmental Project” (“SEP”) be undertaken. Seaboard believes that the matter will be resolved with the civil penalty and the cost of the SEP being less than $1 million. Seaboard is subject to various administrative and judicial proceedings and other legal matters related to the normal conduct of its business. In the opinion of management, the ultimate resolution of these items is not expected to have a material adverse effect on the condensed consolidated financial statements of Seaboard. Contingent Obligations Certain of the non-consolidated affiliates and third-party contractors who perform services for Seaboard have bank debt supporting their underlying operations. From time to time, Seaboard will provide guarantees of that debt in order to further Seaboard’s business objectives. Seaboard does not issue guarantees of third parties for compensation. As of September 30, 2017, guarantees outstanding to third parties were not material. Seaboard has not accrued a liability for any of the third-party or affiliate guarantees as management considers the likelihood of loss to be remote. See Notes Payable section above for discussion of letters of credit. |
Stockholders' Equity and Accumu
Stockholders' Equity and Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | Note 8 – Stockholders’ Equity and Accumulated Other Comprehensive Loss Seaboard has a share repurchase program in place that was approved by its Board of Directors and is in effect through October 31, 2019. As of September 30, 2017, the authorized amount of repurchases under the share repurchase program remained at $100 million. Seaboard did not repurchase any shares of common stock for the nine months ended September 30, 2017. Under this share repurchase program, Seaboard is authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5‑1 plan authorizing a third party to make such purchases on behalf of Seaboard. All stock repurchased will be made in compliance with applicable legal requirements and funded by cash on hand. The timing of the repurchases and the number of shares repurchased at any given time will depend upon market conditions, compliance with Securities and Exchange Commission regulations, and other factors. The Board of Directors’ stock repurchase authorization does not obligate Seaboard to acquire a specific amount of common stock, and the stock repurchase program may be suspended at any time at Seaboard’s discretion. The changes in the components of other comprehensive income (loss), net of related taxes, are as follows: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Foreign currency translation adjustment $ (2) $ (7) $ (3) $ (23) Unrealized gain on investments — 1 3 1 Unrecognized pension cost (1) 1 — 3 2 Other comprehensive income (loss), net of tax $ (1) $ (6) $ 3 $ (20) (1) This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and was recorded in operating income. See Note 6 to the condensed consolidated financial statements for further discussion. The components of accumulated other comprehensive loss, net of related taxes, are as follows: September 30, December 31, (Millions of dollars) 2017 2016 Cumulative foreign currency translation adjustment $ $ Unrealized gain on investments 6 2 Unrecognized pension cost (49) (52) Total accumulated other comprehensive loss $ (301) $ (304) The foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar segment. At September 30, 2017, the Sugar segment had $72 million in net assets denominated in Argentine pesos, and there were no net assets or liabilities denominated in U.S. dollars. Management cannot predict the volatility in the currency exchange rate. At September 30, 2017 and October 1, 2016, income taxes for the cumulative foreign currency translation adjustment was recorded using a 35% effective tax rate except for $88 million and $87 million, respectively, related to certain subsidiaries for which no tax benefit was recorded. At September 30, 2017 and October 1, 2016, income taxes for all other components of accumulated other comprehensive loss were recorded using a 39% effective tax rate except for unrecognized pension cost of $18 million related to employees at certain subsidiaries for which no tax benefit was recorded. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Segment Information | Note 9 – Segment Information Seaboard has six reportable segments: Pork, Commodity Trading and Milling (“CT&M”), Marine, Sugar, Power and Turkey, each offering a specific product or service. Below are segment updates from year-end. On August 30, 2017, Seaboard’s Pork segment acquired hog inventory and hog farms in the Central U.S. from New Fashion Pork, LLP for total cash consideration of $40 million. This acquisition provides additional sows to further increase Seaboard’s capacity to fulfil its hog supply commitment for processing at the Seaboard Triumph Foods, LLC plant, which began operations in September 2017. The purchase was recorded at fair value in Seaboard’s Pork segment, and the allocation of the purchase price is below. No material intangible assets were identified. (Millions of dollars) Inventories $ 6 Property, plant and equipment 34 Total consideration transferred $ 40 Operating results have been included in Seaboard’s condensed consolidated financial statements from the date of acquisition. There was no material impact to Seaboard’s sales and net earnings as a result of the purchase. Pro forma results of operations are not presented as the effects are not material to Seaboard’s results of operations. During the second quarter of 2017, Seaboard’s CT&M segment invested an additional $7 million in a grain trading and poultry business in Morocco. This investment increased Seaboard’s ownership interest to 19.4% and as a result, Seaboard changed its accounting method from the cost method to equity method effective on the date of the additional investment. This investment is reported on a three-month lag basis, and therefore Seaboard’s first proportionate share of earnings from this investment was recognized in the third quarter of 2017. During the first quarter of 2017, Seaboard’s CT&M segment acquired a pulse and grain elevator in Canada for total cash consideration of $14 million. This business, which complements an existing CT&M business in Canada, is expected to increase pulse trade volumes. The purchase was recorded at fair value with $11 million allocated to property, plant and equipment and $3 million allocated to goodwill. Goodwill represents the assembled workforce, cost savings of buying rather than developing a greenfield operation and the close proximity of this elevator to the producers in the region. The goodwill is deductible for income tax purposes. Operating results have been included in Seaboard’s condensed consolidated financial statements from the date of acquisition. Pro forma results of operations are not presented as the effects are not material to Seaboard’s results of operations. The CT&M segment has a 50% noncontrolling interest in a bakery located in the DRC. Seaboard’s investment balance is zero. As part of its original investment, Seaboard has an interest bearing long-term note receivable from this affiliate that had a principal and interest balance of approximately $17 million, net of reserves, at September 30, 2017, all classified as long-term given uncertainty of the timing of payments in the future. The note receivable is 50% guaranteed by the other shareholder in the entity. In 2016, Seaboard reserved an aggregate of $16 million of the original note balance in bad debt expense within selling, general and administrative expenses in the consolidated statement of comprehensive income. During the third quarter of 2017, Seaboard recorded this entity’s current period loss of $2 million against the note receivable. In September 2017, Seaboard reached an agreement to amend the note to further extend the term and match payments to cash flow estimates. If the future long-term cash flows of this bakery do not improve, more of the recorded value of the note receivable from affiliate could be deemed uncollectible in the future, which could result in a further charge to earnings. The CT&M segment had a 50% noncontrolling interest in Belarina Alimentos S. A. (“ Belarina”), a flour production business in Brazil, which it accounted for using the equity method of accounting prior to October 28, 2016, the date Seaboard obtained 98% of the equity ownership and control of Belarina. Seaboard has included the financial results of Belarina in its consolidated financial statements since the date of acquisition. Seaboard’s advances totaled $14 million during the nine months ended October 1, 2016. Related to these advances, Seaboard recorded income (loss) from affiliate of $2 million and $(10) million for the three and nine months ended October 1, 2016, respectively, and currency translation adjustment losses included in other comprehensive income (loss) of $2 million and $4 million, respectively. Seaboard’s Marine segment includes a 36% investment in a holding company that owns a Caribbean start-up terminal operation. Seaboard accounts for its investment using the equity method. During the first quarter of 2017, the terminal operations encountered the loss of a customer and defaulted on certain third-party debt obligations. In addition, third-party engineering studies identified significant unexpected construction modifications needed for the terminal operation. As a result, Seaboard evaluated its investment in affiliate and receivables for impairment and recorded a $5 million charge on its investment, a $1 million charge on its convertible note receivable and a $3 million allowance on its affiliate receivables in the three month period ended April 1, 2017. For the three and nine months ended September 30, 2017, Seaboard recognized $2 million and $9 million, respectively, in income (loss) from affiliates for its proportionate share of equity losses. The holding company is investigating various strategic alternatives, such as additional capital calls, restructuring of the third-party debt and restructuring of the affiliate equity and receivables, which includes the deferral of all affiliated receivable payments until such future time as cash flow is sufficient to pay all third-party debt. If future long-term cash flows do not improve, there is a possibility that there could be additional charges. In March of 2017, Seaboard’s Power segment was notified by the Ministry of Environment and Natural Resources (the “Ministry”), a division within the Dominican Republic government, that it would not renew the environmental license for Seaboard’s power plant on a barge located in the Ozama River. If the license is not renewed, Seaboard would be required to find a new location by the third quarter of 2018. Seaboard’s management is in discussions with the Ministry and will vigorously defend its rights to continue to operate the barge, which is under a special dispensation from the President of the Dominican Republic, in its current location. It is not possible at this time to determine whether a favorable outcome will be reached or to estimate the charge to earnings if Seaboard has to relocate the barge. The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of September 30, 2017 and December 31, 2016, Butterball had total assets of $1,147 million and $1,154 million, respectively. Butterball’s summarized income statement information is as follows: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Net sales $ 439 $ 450 $ 1,143 $ 1,226 Operating income (loss) $ 9 $ 27 $ (1) $ 116 Net income (loss) $ 1 $ 22 $ (21) $ 94 In the second quarter of 2017, Butterball decided that it would close its Montgomery, Illinois, further processing plant during the third quarter of 2017, resulting in charges primarily related to impaired fixed assets and accrued severance. Seaboard’s proportionate share of these charges, recognized in income (loss) from affiliates, was $11 million in the second quarter of 2017 and $1 million in the third quarter of 2017. 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 and income tax expense on a segment basis. Sales to External Customers: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ 404 $ 371 $ 1,188 $ 1,058 Commodity Trading and Milling 694 673 2,122 2,089 Marine 225 225 691 684 Sugar 50 34 138 103 Power 25 23 72 59 All Other 4 4 12 13 Segment/Consolidated Totals $ 1,402 $ 1,330 $ 4,223 $ 4,006 Operating Income (Loss): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ 57 $ 54 $ 157 $ 133 Commodity Trading and Milling 7 (13) 25 15 Marine 4 9 8 19 Sugar 6 (7) 12 (5) Power 3 4 7 6 All Other — 1 1 2 Segment Totals 77 48 210 170 Corporate (6) (6) (19) (16) Consolidated Totals $ 71 $ 42 $ 191 $ 154 Income (Loss) from Affiliates: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ (4) $ 3 $ (1) $ 10 Commodity Trading and Milling (1) 5 5 (10) Marine (1) — (7) 1 Sugar 1 — 1 1 Power 2 2 3 3 Turkey — 11 (11) 49 Segment/Consolidated Totals $ (3) $ 21 $ (10) $ 54 Total Assets: September 30, December 31, (Millions of dollars) 2017 2016 Pork $ 1,294 $ Commodity Trading and Milling 1,044 Marine 325 Sugar 173 Power 195 Turkey 471 All Other 6 Segment Totals 3,508 Corporate 1,485 Consolidated Totals $ 4,993 $ Investments in and Advances to Affiliates: September 30, December 31, (Millions of dollars) 2017 2016 Pork $ 241 $ 175 Commodity Trading and Milling 236 207 Marine 28 33 Sugar 4 4 Power 34 30 Turkey 303 324 Segment/Consolidated Totals $ 846 $ 773 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. |
Accounting Policies and Basis16
Accounting Policies and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies and Basis of Presentation | |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to allowance for doubtful accounts, valuation of inventories, impairment of long-lived assets, potential write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes and accrued pension liability. Actual results could differ from those estimates. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance to develop a single, comprehensive revenue recognition model for all contracts with customers. This guidance requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods and services. This guidance supersedes nearly all existing revenue recognition guidance under GAAP. Seaboard will adopt this guidance on January 1, 2018, for all consolidated subsidiaries using the cumulative effect transition method, where any cumulative effect of initially adopting the guidance is recognized at the date of adoption. Based on management’s current assessment, the majority of Seaboard’s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings, although it anticipates expansion of consolidated financial statement disclosures in order to comply with the guidance. In January 2016, the FASB issued guidance that requires entities to measure equity investments, other than those accounted for using the equity method of accounting, at fair value and recognize any changes in fair value in net income if a readily determinable fair value exists. For investments without readily determinable fair values, the cost method of accounting is eliminated. An entity may elect to record these equity investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In February 2016, the FASB issued guidance that a lessee should record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The recognition, measurement, and presentation of expenses and cash flows arising from a financing lease have not significantly changed from the previous guidance. For operating leases, a lessee is required to: (1) recognize a ROU asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. Seaboard will adopt this guidance on January 1, 2019, for all consolidated subsidiaries. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. Seaboard is in the preliminary stages of its assessment of the effect the guidance will have on its existing accounting policies and the consolidated financial statements, but expects there will be an increase in assets and liabilities on the consolidated balance sheets at adoption due to the recording of ROU assets and corresponding lease liabilities, which will likely be material. See Note 10 to the consolidated financial statements included in Seaboard’s annual report for the year ended December 31, 2016, for information about Seaboard’s lease obligations . In March 2017, the FASB issued guidance that will require the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in inventory. The other components of net periodic benefit cost will be presented outside of operating income and will not be capitalizable. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments | |
Summary of the amortized cost and estimated fair value of short-term investments classified as trading securities | September 30, 2017 December 31, 2016 Amortized Fair Amortized Fair (Millions of dollars) Cost Value Cost Value Domestic equity securities $ 609 $ 716 $ 444 $ 482 Foreign equity securities 265 310 198 199 Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 174 175 437 437 High yield securities 85 86 114 115 Money market funds held in trading accounts 36 36 13 13 Collateralized loan obligations 28 29 25 26 Other trading securities 4 6 5 5 Total trading short-term investments $ 1,201 $ 1,358 $ 1,236 $ 1,277 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | |
Summary of inventories | September 30, December 31, (Millions of dollars) 2017 2016 At lower of LIFO cost or market: Live hogs and materials $ 296 $ 273 Fresh pork and materials 32 34 328 307 LIFO adjustment (23) (21) Total inventories at lower of LIFO cost or market 305 286 At lower of FIFO cost or market: Grains, oilseeds and other commodities 330 279 Sugar produced and in process 33 30 Other 72 62 Total inventories at lower of FIFO cost or market 435 371 Grain, flour and feed at lower of weighted average cost or market 88 105 Total inventories $ 828 $ 762 |
Derivatives and Fair Value of19
Derivatives and Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivatives and Fair Value of Financial Instruments | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Balance September 30, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 716 $ 716 $ — $ — Foreign equity securities 310 310 — — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 175 173 2 — High yield securities 86 20 66 — Money market funds held in trading accounts 36 36 — — Collateralized loan obligations 29 — 29 — Other trading securities 6 5 1 — Trading securities – other current assets: Domestic equity securities 38 38 — — Foreign equity securities 5 5 — — Fixed income mutual funds 4 4 — — Other 2 2 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 4 — 4 — Total Assets $ 1,414 $ 1,312 $ 102 $ — Liabilities: Derivatives: Commodities (1) $ 2 $ 2 $ — $ — Interest rate swaps 3 — 3 — Total Liabilities $ 5 $ 2 $ 3 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017, the commodity derivatives had a margin account balance of $16 million resulting in a net other current asset in the condensed consolidated balance sheet of $17 million. The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 482 $ 482 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 437 437 — — Foreign equity securities 199 199 — — High yield securities 115 15 100 — Collateralized loan obligations 26 — 26 — Money market funds held in trading accounts 13 13 — — Other trading securities 5 5 — — Trading securities – other current assets: Domestic equity securities 30 30 — — Foreign equity securities 3 3 — — Fixed income mutual funds 3 3 — — Other 4 4 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 1 — 1 — Total Assets $ 1,321 $ 1,194 $ 127 $ — Liabilities: Derivatives: Commodities (1) $ 1 $ 1 $ — $ — Interest rate swaps 4 — 4 — Foreign currencies 4 — 4 — Total Liabilities $ 9 $ 1 $ 8 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2016, the commodity derivatives had a margin account balance of $10 million resulting in a net other current asset in the condensed consolidated balance sheet of $12 million. |
Schedule of gain or (loss) recognized for each type of derivative and its location in the condensed consolidated statements of comprehensive income | Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Commodities Cost of sales $ (6) $ (14) $ (5) $ 17 Foreign currencies Cost of sales 2 (12) (3) (25) Foreign currencies Foreign currency gains, net (1) — (2) — Interest rate swaps Miscellaneous, net — 1 — (3) |
Schedule of fair value of each type of derivative and its location in the condensed consolidated balance sheets | Asset Derivatives Liability Derivatives September 30, December 31, September 30, December 31, (Millions of dollars) 2017 2016 2017 2016 Commodities (1) Other current assets $ 3 $ Other current liabilities $ 2 $ Foreign currencies Other current assets 4 Other current liabilities — 4 Interest rate swaps Other current assets — — Other current liabilities 3 Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017 and December 31, 2016, the commodity derivatives had a margin account balance of $16 million and $10 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $17 million and $12 million, respectively. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefits | |
Schedule of net periodic benefit cost of plans | Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Components of net periodic benefit cost: Service cost $ 2 $ 3 $ 6 $ 7 Interest cost 3 2 8 8 Expected return on plan assets (2) (2) (7) (6) Amortization and other 1 1 4 3 Net periodic benefit cost $ 4 $ 4 $ 11 $ 12 |
Notes Payable, Long-term Debt21
Notes Payable, Long-term Debt, Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable, Long-term Debt, Commitments and Contingencies. | |
Summary of long-term debt | September 30, December 31, (Millions of dollars) 2017 2016 Term Loan due 2022 $ 488 $ 497 Foreign subsidiary obligations due 2018 through 2023 53 20 Total long-term debt at face value 541 517 Current maturities of long-term debt and unamortized discount (51) (18) Long-term debt, less current maturities and unamortized discount $ 490 $ 499 |
Stockholders' Equity and Accu22
Stockholders' Equity and Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |
Schedule of changes in the components of other comprehensive loss, net of related taxes | Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Foreign currency translation adjustment $ (2) $ (7) $ (3) $ (23) Unrealized gain on investments — 1 3 1 Unrecognized pension cost (1) 1 — 3 2 Other comprehensive income (loss), net of tax $ (1) $ (6) $ 3 $ (20) |
Schedule of components of accumulated other comprehensive loss, net of related taxes | September 30, December 31, (Millions of dollars) 2017 2016 Cumulative foreign currency translation adjustment $ $ Unrealized gain on investments 6 2 Unrecognized pension cost (49) (52) Total accumulated other comprehensive loss $ (301) $ (304) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of specific financial information related to sales to external customers | Sales to External Customers: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ 404 $ 371 $ 1,188 $ 1,058 Commodity Trading and Milling 694 673 2,122 2,089 Marine 225 225 691 684 Sugar 50 34 138 103 Power 25 23 72 59 All Other 4 4 12 13 Segment/Consolidated Totals $ 1,402 $ 1,330 $ 4,223 $ 4,006 |
Summary of specific financial information related to operating income (loss) | Operating Income (Loss): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ 57 $ 54 $ 157 $ 133 Commodity Trading and Milling 7 (13) 25 15 Marine 4 9 8 19 Sugar 6 (7) 12 (5) Power 3 4 7 6 All Other — 1 1 2 Segment Totals 77 48 210 170 Corporate (6) (6) (19) (16) Consolidated Totals $ 71 $ 42 $ 191 $ 154 |
Summary of specific financial information related to income (loss) from affiliates | Income (Loss) from Affiliates: Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Pork $ (4) $ 3 $ (1) $ 10 Commodity Trading and Milling (1) 5 5 (10) Marine (1) — (7) 1 Sugar 1 — 1 1 Power 2 2 3 3 Turkey — 11 (11) 49 Segment/Consolidated Totals $ (3) $ 21 $ (10) $ 54 |
Summary of specific financial information related to total assets | Total Assets: September 30, December 31, (Millions of dollars) 2017 2016 Pork $ 1,294 $ Commodity Trading and Milling 1,044 Marine 325 Sugar 173 Power 195 Turkey 471 All Other 6 Segment Totals 3,508 Corporate 1,485 Consolidated Totals $ 4,993 $ |
Summary of specific financial information related to investments in and advances to affiliates | Investments in and Advances to Affiliates: September 30, December 31, (Millions of dollars) 2017 2016 Pork $ 241 $ 175 Commodity Trading and Milling 236 207 Marine 28 33 Sugar 4 4 Power 34 30 Turkey 303 324 Segment/Consolidated Totals $ 846 $ 773 |
Butterball, LLC | |
Summary of specific financial information related to equity method | Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, (Millions of dollars) 2017 2016 2017 2016 Net sales $ 439 $ 450 $ 1,143 $ 1,226 Operating income (loss) $ 9 $ 27 $ (1) $ 116 Net income (loss) $ 1 $ 22 $ (21) $ 94 |
New Fashion Pork, LLP | |
Schedule of allocation of preliminary purchase price | (Millions of dollars) Inventories $ 6 Property, plant and equipment 34 Total consideration transferred $ 40 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Investments | |||||
Unrealized gains (losses) on trading securities | $ 54 | $ 27 | $ 114 | $ 41 | |
Trading securities | |||||
Investments | |||||
Amortized Cost | 1,201 | 1,201 | $ 1,236 | ||
Fair Value | 1,358 | 1,358 | 1,277 | ||
Domestic equity securities | |||||
Investments | |||||
Amortized Cost | 609 | 609 | 444 | ||
Fair Value | 716 | 716 | 482 | ||
Foreign equity securities | |||||
Investments | |||||
Amortized Cost | 265 | 265 | 198 | ||
Fair Value | 310 | 310 | 199 | ||
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | |||||
Investments | |||||
Amortized Cost | 174 | 174 | 437 | ||
Fair Value | 175 | 175 | 437 | ||
High yield securities | |||||
Investments | |||||
Amortized Cost | 85 | 85 | 114 | ||
Fair Value | 86 | 86 | 115 | ||
Money market funds held in trading accounts | |||||
Investments | |||||
Amortized Cost | 36 | 36 | 13 | ||
Fair Value | 36 | 36 | 13 | ||
Collateralized loan obligation | |||||
Investments | |||||
Amortized Cost | 28 | 28 | 25 | ||
Fair Value | 29 | 29 | 26 | ||
Other trading securities | |||||
Investments | |||||
Amortized Cost | 4 | 4 | 5 | ||
Fair Value | 6 | 6 | 5 | ||
Denominated in foreign currencies | Money market funds | |||||
Investments | |||||
Fair Value | 1 | ||||
Denominated in foreign currencies | Money market funds | Maximum | |||||
Investments | |||||
Fair Value | 1 | 1 | |||
Denominated in foreign currencies | Foreign equity securities | |||||
Investments | |||||
Fair Value | 110 | 110 | 91 | ||
Denominated in Euros | Foreign equity securities | |||||
Investments | |||||
Fair Value | 47 | 47 | 35 | ||
Denominated in Japanese Yen | Foreign equity securities | |||||
Investments | |||||
Fair Value | 22 | 22 | 20 | ||
Denominated in British pounds | Foreign equity securities | |||||
Investments | |||||
Fair Value | 19 | 19 | 16 | ||
Denominated in Swiss Franc | Foreign equity securities | |||||
Investments | |||||
Fair Value | 6 | 6 | 6 | ||
Denominated in other foreign currencies | Foreign equity securities | |||||
Investments | |||||
Fair Value | $ 16 | $ 16 | $ 14 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
At lower of LIFO cost or market: | ||
Live hogs and materials | $ 296 | $ 273 |
Fresh pork and materials | 32 | 34 |
Inventories at lower of LIFO cost or market, Gross | 328 | 307 |
LIFO adjustment | (23) | (21) |
Total inventories at lower of LIFO cost or market | 305 | 286 |
At lower of FIFO cost or market: | ||
Grains, oilseeds and other commodities | 330 | 279 |
Sugar produced and in process | 33 | 30 |
Other | 72 | 62 |
Total inventories at lower of FIFO cost or market | 435 | 371 |
Grain, flour and feed at lower of weighted average cost or market | 88 | 105 |
Total inventories | $ 828 | $ 762 |
Derivatives and Fair Value of26
Derivatives and Fair Value of Financial Instruments-Deferred Comp Securities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Assets and liabilities measured at fair value on a recurring basis and also its level within the fair value hierarchy | ||
Transfers that occurred into or out of level 1 | $ 0 | |
Transfers that occurred into or out of level 2 | 0 | |
Transfers that occurred into or out of level 3 | 0 | |
Commodities | ||
Assets: | ||
Margin account | 16 | $ 10 |
Domestic equity securities | ||
Assets: | ||
Trading securities | 716 | 482 |
Foreign equity securities | ||
Assets: | ||
Trading securities | 310 | 199 |
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | ||
Assets: | ||
Trading securities | 175 | 437 |
High yield securities | ||
Assets: | ||
Trading securities | 86 | 115 |
Money market funds held in trading accounts | ||
Assets: | ||
Trading securities | 36 | 13 |
Collateralized loan obligation | ||
Assets: | ||
Trading securities | 29 | 26 |
Other trading securities | ||
Assets: | ||
Trading securities | 6 | 5 |
Recurring basis | Fair Value | ||
Assets: | ||
Total Assets | 1,414 | 1,321 |
Liabilities: | ||
Liabilities | 5 | 9 |
Recurring basis | Fair Value | Commodities | ||
Assets: | ||
Derivatives | 3 | 3 |
Margin account | 16 | 10 |
Liabilities: | ||
Derivatives | 2 | 1 |
Recurring basis | Fair Value | Interest rate swaps | ||
Liabilities: | ||
Derivatives | 3 | 4 |
Recurring basis | Fair Value | Foreign currencies | ||
Assets: | ||
Derivatives | 4 | 1 |
Liabilities: | ||
Derivatives | 4 | |
Recurring basis | Fair Value | Other current assets | Commodities | ||
Assets: | ||
Derivative assets and liabilities, net basis | 17 | 12 |
Recurring basis | Fair Value | Domestic equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 716 | 482 |
Recurring basis | Fair Value | Domestic equity securities | Other current assets | ||
Assets: | ||
Trading securities | 38 | 30 |
Recurring basis | Fair Value | Foreign equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 310 | 199 |
Recurring basis | Fair Value | Foreign equity securities | Other current assets | ||
Assets: | ||
Trading securities | 5 | 3 |
Recurring basis | Fair Value | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 175 | 437 |
Recurring basis | Fair Value | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | 86 | 115 |
Recurring basis | Fair Value | Money market funds held in trading accounts | Short-term investments | ||
Assets: | ||
Trading securities | 36 | 13 |
Recurring basis | Fair Value | Collateralized loan obligation | Short-term investments | ||
Assets: | ||
Trading securities | 29 | 26 |
Recurring basis | Fair Value | Other trading securities | Short-term investments | ||
Assets: | ||
Trading securities | 6 | 5 |
Recurring basis | Fair Value | Fixed income mutual funds | Other current assets | ||
Assets: | ||
Trading securities | 4 | 3 |
Recurring basis | Fair Value | Other | Other current assets | ||
Assets: | ||
Trading securities | 2 | 4 |
Recurring basis | Level 1 | ||
Assets: | ||
Total Assets | 1,312 | 1,194 |
Liabilities: | ||
Liabilities | 2 | 1 |
Recurring basis | Level 1 | Commodities | ||
Assets: | ||
Derivatives | 3 | 3 |
Liabilities: | ||
Derivatives | 2 | 1 |
Recurring basis | Level 1 | Domestic equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 716 | 482 |
Recurring basis | Level 1 | Domestic equity securities | Other current assets | ||
Assets: | ||
Trading securities | 38 | 30 |
Recurring basis | Level 1 | Foreign equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 310 | 199 |
Recurring basis | Level 1 | Foreign equity securities | Other current assets | ||
Assets: | ||
Trading securities | 5 | 3 |
Recurring basis | Level 1 | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 173 | 437 |
Recurring basis | Level 1 | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | 20 | 15 |
Recurring basis | Level 1 | Money market funds held in trading accounts | Short-term investments | ||
Assets: | ||
Trading securities | 36 | 13 |
Recurring basis | Level 1 | Other trading securities | Short-term investments | ||
Assets: | ||
Trading securities | 5 | 5 |
Recurring basis | Level 1 | Fixed income mutual funds | Other current assets | ||
Assets: | ||
Trading securities | 4 | 3 |
Recurring basis | Level 1 | Other | Other current assets | ||
Assets: | ||
Trading securities | 2 | 4 |
Recurring basis | Level 2 | ||
Assets: | ||
Total Assets | 102 | 127 |
Liabilities: | ||
Liabilities | 3 | 8 |
Recurring basis | Level 2 | Interest rate swaps | ||
Liabilities: | ||
Derivatives | 3 | 4 |
Recurring basis | Level 2 | Foreign currencies | ||
Assets: | ||
Derivatives | 4 | 1 |
Liabilities: | ||
Derivatives | 4 | |
Recurring basis | Level 2 | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 2 | |
Recurring basis | Level 2 | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | 66 | 100 |
Recurring basis | Level 2 | Collateralized loan obligation | Short-term investments | ||
Assets: | ||
Trading securities | 29 | $ 26 |
Recurring basis | Level 2 | Other trading securities | Short-term investments | ||
Assets: | ||
Trading securities | $ 1 |
Derivatives and Fair Value of27
Derivatives and Fair Value of Financial Instruments-Derivatives (Details) lb in Millions, gal in Millions, bu in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($)agreementlbgalbu | Dec. 31, 2016USD ($)agreementlbgalbu | Dec. 31, 2010agreement | |
Net commodity purchase contracts | Grain | |||
Derivative commodity instruments | |||
Nonmonetary notional amount | bu | 34 | 22 | |
Net commodity purchase contracts | Hogs | |||
Derivative commodity instruments | |||
Nonmonetary notional amount | lb | 13 | 14 | |
Net commodity sale contracts | Soybean oil | |||
Derivative commodity instruments | |||
Nonmonetary notional amount | lb | 55 | 35 | |
Net commodity sale contracts | Heating oil | |||
Derivative commodity instruments | |||
Nonmonetary notional amount | gal | 4 | 4 | |
Foreign currencies | |||
Derivative commodity instruments | |||
Notional amounts | $ | $ 73 | $ 81 | |
Interest rate swaps | |||
Derivative commodity instruments | |||
Notional amounts | $ | $ 75 | $ 75 | |
Number of derivative agreements | agreement | 3 | 3 | 3 |
Term of derivative contract | 10 years | ||
Number of agreements qualifying as hedges | agreement | 0 |
Derivatives and Fair Value of28
Derivatives and Fair Value of Financial Instruments-Counterparty Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)item | Oct. 01, 2016USD ($) | Sep. 30, 2017USD ($)item | Oct. 01, 2016USD ($) | |
Commodities | Cost of sales | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (6) | $ (14) | $ (5) | $ 17 |
Foreign currencies | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Number of counterparties | item | 6 | 6 | ||
Foreign currencies | Maximum | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Credit risk associated with derivative contracts | $ 4 | |||
Foreign currencies | Cost of sales | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ 2 | (12) | (3) | (25) |
Foreign currencies | Foreign currency gains, net | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (1) | (2) | ||
Interest rate swaps | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Credit risk associated with derivative contracts | $ 0 | |||
Interest rate swaps | Miscellaneous, net | ||||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ 1 | $ (3) |
Derivatives and Fair Value of29
Derivatives and Fair Value of Financial Instruments-Derivatives Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Commodities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Margin account | $ 16 | $ 10 |
Commodities | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | 3 | 3 |
Derivative assets and liabilities, net basis | 17 | 12 |
Commodities | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | 2 | 1 |
Foreign currencies | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | 4 | 1 |
Foreign currencies | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | 4 | |
Interest rate swaps | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | $ 3 | $ 4 |
Employee Benefits (Details)
Employee Benefits (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Oct. 01, 2016USD ($) | Sep. 30, 2017USD ($) | Oct. 01, 2016USD ($) | Jan. 01, 2017plan | |
Components of net periodic benefit cost: | |||||
Service cost | $ 2 | $ 3 | $ 6 | $ 7 | |
Interest cost | 3 | 2 | 8 | 8 | |
Expected return on plan assets | (2) | (2) | (7) | (6) | |
Amortization and other | 1 | 1 | 4 | 3 | |
Net periodic benefit cost | 4 | $ 4 | 11 | $ 12 | |
Defined benefit pension plan | |||||
Target allocation and pension plan asset allocation | |||||
Number of defined benefit plans | plan | 2 | ||||
Contributions expected to be made to defined benefit pension plans | $ 0 | $ 0 |
Notes Payable, Long-term Debt31
Notes Payable, Long-term Debt, Commitments and Contingencies (Details) $ in Millions | Jul. 21, 2017USD ($) | Sep. 30, 2017USD ($)item | Dec. 31, 2016USD ($) | Sep. 19, 2012item |
Debt Instrument | ||||
Notes payable | $ 97 | $ 121 | ||
Total long-term debt at face value | 541 | 517 | ||
Current maturities of long-term debt and unamortized discount | (51) | (18) | ||
Long-term debt, less current maturities and unamortized discount | $ 490 | $ 499 | ||
Contingencies | ||||
Number of search warrants executed authorizing the seizure of certain records from Seaboard's offices in Merriam, Kansas and at the Seaboard Foods employment office and the human resources department in Guymon, Oklahoma. | item | 3 | |||
Number of civil or criminal proceedings or charges filed | item | 0 | |||
Regulatory Action | Maximum | ||||
Contingencies | ||||
Proposed civil penalty | $ 1 | |||
Sugar | ||||
Debt Instrument | ||||
Interest rate (as a percent) | 23.00% | |||
Notes payable to bank | ||||
Debt Instrument | ||||
Notes payable | $ 97 | |||
Weighted average interest rate (as a percent) | 11.56% | 14.88% | ||
Uncommitted bank lines | ||||
Debt Instrument | ||||
Notes payable | $ 97 | |||
Maximum capacity | 419 | |||
Letters of credit outstanding | 3 | |||
Committed bank line | ||||
Debt Instrument | ||||
Maximum capacity | 100 | |||
Outstanding balance | 0 | |||
Term loan due 2022 | ||||
Debt Instrument | ||||
Total long-term debt at face value | $ 488 | $ 497 | ||
Effective interest rate (as a percent) | 2.86% | 2.40% | ||
Foreign subsidiary obligations due 2018 through 2023 | ||||
Debt Instrument | ||||
Total long-term debt at face value | $ 53 | $ 20 | ||
Effective interest rate (as a percent) | 21.18% | 22.39% | ||
Foreign subsidiaries | Uncommitted bank lines | ||||
Debt Instrument | ||||
Maximum capacity | $ 369 | |||
South African Rand | Foreign subsidiaries | Notes payable to bank | ||||
Debt Instrument | ||||
Notes payable | 80 | |||
Argentine pesos | Sugar | ||||
Debt Instrument | ||||
Short-term loan | 32 | |||
Argentine pesos | Foreign subsidiaries | Notes payable to bank | ||||
Debt Instrument | ||||
Notes payable | 15 | |||
Zambian kwacha | Foreign subsidiaries | Notes payable to bank | ||||
Debt Instrument | ||||
Notes payable | $ 2 |
Stockholders' Equity and Accu32
Stockholders' Equity and Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |||||
Stock repurchase programs, authorized amount | $ 100 | $ 100 | |||
Changes in the components of other comprehensive loss (OCL), net of related taxes | |||||
Foreign currency translation adjustment | (2) | $ (7) | (3) | $ (23) | |
Unrealized gain (loss) on investments | 1 | 3 | 1 | ||
Unrecognized pension cost | 1 | 3 | 2 | ||
Other comprehensive income (loss), net of tax | (1) | (6) | 3 | (20) | |
Components of accumulated other comprehensive loss, net of related taxes | |||||
Accumulated other comprehensive loss | (301) | (301) | $ (304) | ||
Argentine pesos | Sugar | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Net assets (liabilities) | 72 | 72 | |||
U.S. dollars | Sugar | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Net assets (liabilities) | 0 | 0 | |||
Certain subsidiaries | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Cumulative foreign currency translation adjustment, net of related taxes | 88 | $ 87 | 88 | 87 | |
Tax benefit recorded on foreign currency translation adjustments | 0 | 0 | |||
Unrecognized pension cost related to employees at certain subsidiaries | 18 | 18 | |||
Tax benefit recorded on unrecognized pension cost | 0 | $ 0 | |||
Foreign currency translation adjustment | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Accumulated other comprehensive loss | (258) | (258) | (254) | ||
Unrealized gain on investments | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Accumulated other comprehensive loss | 6 | 6 | 2 | ||
Unrecognized pension cost | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Accumulated other comprehensive loss | $ (49) | $ (49) | $ (52) | ||
Cumulative foreign currency translation adjustment | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Effective income tax rate (as a percent) | 35.00% | 35.00% | |||
All components of AOCL except cumulative foreign currency translation adjustments | |||||
Components of accumulated other comprehensive loss, net of related taxes | |||||
Effective income tax rate (as a percent) | 39.00% | 39.00% |
Segment Information-Acquisition
Segment Information-Acquisitions (Details) $ in Millions | Aug. 30, 2017USD ($) | Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Sep. 30, 2017USD ($)segment | Oct. 01, 2016USD ($) |
Segment Information | |||||
Number of reportable segments | segment | 6 | ||||
Acquisition of business, cash consideration | $ 54 | $ 214 | |||
Investments in and advances to affiliates, net | $ 87 | $ 55 | |||
New Fashion Pork, LLP | Pork | |||||
Segment Information | |||||
Acquisition of business, cash consideration | $ 40 | ||||
Purchase price allocation | |||||
Inventories | 6 | ||||
Property, plant and equipment | 34 | ||||
Total consideration transferred | $ 40 | ||||
Pulse and grain elevator | Commodity Trading and Milling | |||||
Segment Information | |||||
Acquisition of business, cash consideration | $ 14 | ||||
Purchase price allocation | |||||
Property, plant and equipment | 11 | ||||
Goodwill | $ 3 | ||||
Morocco | Grain trading and poultry business | Commodity Trading and Milling | |||||
Segment Information | |||||
Investments in and advances to affiliates, net | $ 7 | ||||
Percentage of ownership | 19.40% |
Segment Information-DRC (Detail
Segment Information-DRC (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Segment Information | |||||
Notes receivable from affiliates, net | $ 17 | $ 17 | $ 26 | ||
Total investment in affiliate | 846 | 846 | 773 | ||
Income (loss) from affiliates | (3) | $ 21 | (10) | $ 54 | |
Commodity Trading and Milling | |||||
Segment Information | |||||
Total investment in affiliate | 236 | 236 | 207 | ||
Income (loss) from affiliates | $ (1) | $ 5 | $ 5 | $ (10) | |
Bakery business | Commodity Trading and Milling | Democratic Republic of Congo | |||||
Segment Information | |||||
Percentage of ownership interest accounted as equity method investment | 50.00% | 50.00% | |||
Reserve recorded in bad debt expense | $ 16 | ||||
Notes receivable from affiliates, net | $ 17 | $ 17 | |||
Total investment in affiliate | 0 | 0 | |||
Income (loss) from affiliates | $ 2 | $ 2 | |||
Percentage of note receivable guaranteed by the other shareholder | 50.00% | 50.00% |
Segment Information-Flour Produ
Segment Information-Flour Production (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | Oct. 28, 2016 | Oct. 27, 2016 | |
Segment Information | |||||||
Acquisition of business, cash consideration | $ 54 | $ 214 | |||||
Notes receivable from affiliates, net | $ 17 | 17 | $ 26 | ||||
Amount contributed as additional equity to provide additional working capital to equity method investee | 87 | 55 | |||||
Income (loss) from affiliates | (3) | $ 21 | (10) | 54 | |||
Foreign currency translation adjustment | (2) | (7) | (3) | (23) | |||
Total investment in affiliate | 846 | 846 | 773 | ||||
Commodity Trading and Milling | |||||||
Segment Information | |||||||
Income (loss) from affiliates | (1) | 5 | 5 | (10) | |||
Total investment in affiliate | $ 236 | $ 236 | $ 207 | ||||
Belarina | Commodity Trading and Milling | Brazil | |||||||
Segment Information | |||||||
Percentage of ownership interest accounted as equity method investment | 50.00% | ||||||
Voting equity ownership percentage | 98.00% | ||||||
Amount invested under equity method | 14 | ||||||
Income (loss) from affiliates | (2) | 10 | |||||
Foreign currency translation adjustment | $ (2) | $ (4) |
Segment Information - Turkey (D
Segment Information - Turkey (Details) - Turkey - Butterball, LLC - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Jul. 01, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Segment Information | ||||||
Net sales | $ 439 | $ 450 | $ 1,143 | $ 1,226 | ||
Operating income | 9 | 27 | (1) | 116 | ||
Net income | 1 | $ 22 | (21) | $ 94 | ||
Total assets | 1,147 | $ 1,147 | $ 1,154 | |||
Restructuring charge | $ 1 | $ 11 |
Segment Information- Marine (De
Segment Information- Marine (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Apr. 01, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Segment Information | ||||||
Principal payments received on notes receivable from affiliates | $ 3 | $ 12 | ||||
Total investment in affiliate | $ 846 | 846 | $ 773 | |||
Income (loss) from affiliates | (3) | $ 21 | (10) | 54 | ||
Marine | ||||||
Segment Information | ||||||
Total investment in affiliate | 28 | 28 | $ 33 | |||
Income (loss) from affiliates | $ (1) | $ (7) | $ 1 | |||
Holding company owning interest in Caribbean terminal operation | Marine | ||||||
Segment Information | ||||||
Write-down on investment | $ 5 | |||||
Write down on notes receivable from affiliate | 1 | |||||
Write down on receivable from affiliate | $ 3 | |||||
Percentage of ownership interest accounted as equity method investment | 36.00% | 36.00% | ||||
Income (loss) from affiliates | $ 2 | $ 9 |
Segment Information-Information
Segment Information-Information by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Segment Information | |||||
Sales to External Customers: | $ 1,402 | $ 1,330 | $ 4,223 | $ 4,006 | |
Operating Income (Loss): | 71 | 42 | 191 | 154 | |
Income (Loss) from Affiliates: | (3) | 21 | (10) | 54 | |
Total Assets: | 4,993 | 4,993 | $ 4,755 | ||
Investment in and Advances to Affiliates: | 846 | 846 | 773 | ||
Pork | |||||
Segment Information | |||||
Sales to External Customers: | 404 | 371 | 1,188 | 1,058 | |
Operating Income (Loss): | 57 | 54 | 157 | 133 | |
Income (Loss) from Affiliates: | (4) | 3 | (1) | 10 | |
Investment in and Advances to Affiliates: | 241 | 241 | 175 | ||
Commodity Trading and Milling | |||||
Segment Information | |||||
Sales to External Customers: | 694 | 673 | 2,122 | 2,089 | |
Operating Income (Loss): | 7 | (13) | 25 | 15 | |
Income (Loss) from Affiliates: | (1) | 5 | 5 | (10) | |
Investment in and Advances to Affiliates: | 236 | 236 | 207 | ||
Marine | |||||
Segment Information | |||||
Sales to External Customers: | 225 | 225 | 691 | 684 | |
Operating Income (Loss): | 4 | 9 | 8 | 19 | |
Income (Loss) from Affiliates: | (1) | (7) | 1 | ||
Investment in and Advances to Affiliates: | 28 | 28 | 33 | ||
Sugar | |||||
Segment Information | |||||
Sales to External Customers: | 50 | 34 | 138 | 103 | |
Operating Income (Loss): | 6 | (7) | 12 | (5) | |
Income (Loss) from Affiliates: | 1 | 1 | 1 | ||
Investment in and Advances to Affiliates: | 4 | 4 | 4 | ||
Power | |||||
Segment Information | |||||
Sales to External Customers: | 25 | 23 | 72 | 59 | |
Operating Income (Loss): | 3 | 4 | 7 | 6 | |
Income (Loss) from Affiliates: | 2 | 2 | 3 | 3 | |
Investment in and Advances to Affiliates: | 34 | 34 | 30 | ||
Turkey | |||||
Segment Information | |||||
Income (Loss) from Affiliates: | 11 | (11) | 49 | ||
Investment in and Advances to Affiliates: | 303 | 303 | 324 | ||
All Other | |||||
Segment Information | |||||
Sales to External Customers: | 4 | 4 | 12 | 13 | |
Operating Income (Loss): | 1 | 1 | 2 | ||
Segment Totals | |||||
Segment Information | |||||
Operating Income (Loss): | 77 | 48 | 210 | 170 | |
Income (Loss) from Affiliates: | (3) | 21 | (10) | 54 | |
Total Assets: | 3,508 | 3,508 | 3,321 | ||
Segment Totals | Pork | |||||
Segment Information | |||||
Total Assets: | 1,294 | 1,294 | 1,157 | ||
Segment Totals | Commodity Trading and Milling | |||||
Segment Information | |||||
Total Assets: | 1,044 | 1,044 | 989 | ||
Segment Totals | Marine | |||||
Segment Information | |||||
Total Assets: | 325 | 325 | 314 | ||
Segment Totals | Sugar | |||||
Segment Information | |||||
Total Assets: | 173 | 173 | 166 | ||
Segment Totals | Power | |||||
Segment Information | |||||
Total Assets: | 195 | 195 | 196 | ||
Segment Totals | Turkey | |||||
Segment Information | |||||
Total Assets: | 471 | 471 | 493 | ||
Segment Totals | All Other | |||||
Segment Information | |||||
Total Assets: | 6 | 6 | 6 | ||
Corporate Items | |||||
Segment Information | |||||
Operating Income (Loss): | (6) | $ (6) | (19) | $ (16) | |
Total Assets: | $ 1,485 | $ 1,485 | $ 1,434 |