Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 26, 2020 | Oct. 20, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 26, 2020 | |
Entity File Number | 1-3390 | |
Entity Registrant Name | Seaboard Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-2260388 | |
Entity Address, Address Line One | 9000 West 67th Street | |
Entity Address, City or Town | Merriam | |
Entity Address, State or Province | KS | |
Entity Address, Postal Zip Code | 66202 | |
City Area Code | 913 | |
Local Phone Number | 676-8800 | |
Title of 12(b) Security | Common Stock $1.00 Par Value | |
Trading Symbol | SEB | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,160,779 | |
Entity Central Index Key | 0000088121 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Net sales: | ||||
Total net sales | $ 1,645 | $ 1,663 | $ 5,136 | $ 5,028 |
Cost of sales and operating expenses: | ||||
Total cost of sales and operating expenses | 1,527 | 1,589 | 4,792 | 4,768 |
Gross income | 118 | 74 | 344 | 260 |
Selling, general and administrative expenses | 89 | 80 | 241 | 247 |
Operating income (loss) | 29 | (6) | 103 | 13 |
Other income (expense): | ||||
Interest expense | (6) | (9) | (17) | (27) |
Interest income | 6 | 10 | 17 | 25 |
Loss from affiliates | (6) | (15) | (27) | (49) |
Other investment income (loss), net | 56 | 2 | (41) | 152 |
Foreign currency gains (losses), net | (5) | 1 | (21) | 3 |
Miscellaneous, net | 1 | (1) | 3 | (1) |
Total other income (expense), net | 46 | (12) | (86) | 103 |
Earnings (loss) before income taxes | 75 | (18) | 17 | 116 |
Income tax benefit (expense) | 72 | 11 | 1 | (8) |
Net earnings (loss) | 147 | (7) | 18 | 108 |
Less: Net loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net earnings (loss) attributable to Seaboard | $ 147 | $ (7) | $ 18 | $ 108 |
Earnings (loss) per common share | $ 126.17 | $ (6) | $ 15.14 | $ 92.97 |
Average number of shares outstanding (in shares) | 1,160,779 | 1,165,081 | 1,161,792 | 1,166,073 |
Other comprehensive income (loss), net of income tax expense of $2, $0, $3 and $0: | ||||
Foreign currency translation adjustment | $ 5 | $ 2 | $ (11) | $ (9) |
Unrecognized pension cost | 5 | 1 | 7 | 7 |
Other comprehensive income (loss), net of tax | 10 | 3 | (4) | (2) |
Comprehensive income (loss) | 157 | (4) | 14 | 106 |
Less: Comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income (loss) attributable to Seaboard | 157 | (4) | 14 | 106 |
Products | ||||
Net sales: | ||||
Total net sales | 1,362 | 1,359 | 4,333 | 4,117 |
Cost of sales and operating expenses: | ||||
Total cost of sales and operating expenses | 1,294 | 1,329 | 4,090 | 3,981 |
Services | ||||
Net sales: | ||||
Total net sales | 257 | 270 | 746 | 814 |
Cost of sales and operating expenses: | ||||
Total cost of sales and operating expenses | 215 | 239 | 656 | 717 |
Other | ||||
Net sales: | ||||
Total net sales | 26 | 34 | 57 | 97 |
Cost of sales and operating expenses: | ||||
Total cost of sales and operating expenses | $ 18 | $ 21 | $ 46 | $ 70 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Other comprehensive income (loss), income tax expense | $ 2 | $ 0 | $ 3 | $ 0 |
Products | ||||
Sales to affiliates | 226 | 339 | 817 | 1,017 |
Services | ||||
Sales to affiliates | $ 4 | $ 5 | $ 16 | $ 13 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 92 | $ 125 |
Short-term investments | 1,245 | 1,434 |
Receivables, net | 525 | 646 |
Inventories | 1,062 | 1,022 |
Other current assets | 91 | 123 |
Total current assets | 3,015 | 3,350 |
Property, plant and equipment, net | 1,514 | 1,431 |
Operating lease right of use assets, net | 404 | 446 |
Investments in and advances to affiliates | 698 | 735 |
Goodwill | 164 | 164 |
Other non-current assets | 181 | 159 |
Total assets | 5,976 | 6,285 |
Current liabilities: | ||
Lines of credit | 271 | 246 |
Current maturities of long-term debt | 56 | 62 |
Accounts payable | 210 | 368 |
Deferred revenue | 58 | 80 |
Operating lease liabilities | 111 | 104 |
Other current liabilities | 304 | 329 |
Total current liabilities | 1,010 | 1,189 |
Long-term debt, less current maturities | 683 | 730 |
Deferred income taxes | 24 | 76 |
Long-term income tax liability | 62 | 62 |
Long-term operating lease liabilities | 331 | 379 |
Other liabilities | 321 | 295 |
Total non-current liabilities | 1,421 | 1,542 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,160,779 shares in 2020 and 1,164,848 shares in 2019 | 1 | 1 |
Accumulated other comprehensive loss | (444) | (440) |
Retained earnings | 3,978 | 3,983 |
Total Seaboard stockholders' equity | 3,535 | 3,544 |
Noncontrolling interests | 10 | 10 |
Total equity | 3,545 | 3,554 |
Total liabilities and stockholders' equity | $ 5,976 | $ 6,285 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 26, 2020 | Dec. 31, 2019 |
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 | 1,160,779 | 1,164,848 |
Common stock, outstanding shares | 1,160,779 | 1,164,848 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 26, 2020 | Sep. 28, 2019 | |
Cash flows from operating activities: | ||
Net earnings | $ 18 | $ 108 |
Adjustments to reconcile net earnings to cash from operating activities: | ||
Depreciation and amortization | 109 | 103 |
Deferred income taxes | (56) | (9) |
Loss from affiliates | 27 | 49 |
Dividends received from affiliates | 11 | 7 |
Other investment loss (income), net | 41 | (152) |
Other, net | 27 | 7 |
Changes in assets and liabilities: | ||
Receivables, net of allowance | 112 | 15 |
Inventories | (50) | (96) |
Other assets | 3 | 26 |
Accounts payable | (146) | (20) |
Other liabilities, exclusive of debt | (62) | 32 |
Net cash from operating activities | 34 | 70 |
Cash flows from investing activities: | ||
Purchase of short-term investments | (432) | (863) |
Proceeds from the sale of short-term investments | 600 | 762 |
Proceeds from the maturity of short-term investments | 26 | 174 |
Capital expenditures | (160) | (261) |
Proceeds from the sale of non-consolidated affiliate | 24 | |
Investments in and advances to affiliates, net | (8) | (11) |
Purchase of long-term investments | (41) | (14) |
Other, net | 2 | (6) |
Net cash from investing activities | (13) | (195) |
Cash flows from financing activities: | ||
Lines of credit, net | 30 | 63 |
Proceeds from long-term debt | 7 | 36 |
Principal payments of long-term debt | (63) | (20) |
Repurchase of common stock | (13) | (17) |
Dividends paid | (7) | (7) |
Other, net | (7) | (3) |
Net cash from financing activities | (53) | 52 |
Effect of exchange rate changes on cash and cash equivalents | (1) | 0 |
Net change in cash and cash equivalents | (33) | (73) |
Cash and cash equivalents at beginning of year | 125 | 194 |
Cash and cash equivalents at end of period | $ 92 | $ 121 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Common Stock | Accumulated Other Comprehensive Loss | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Noncontrolling Interest | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balances at Dec. 31, 2018 | $ 1 | $ (410) | $ 3,727 | $ 11 | $ 3,329 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Reduction to noncontrolling interests | (1) | (1) | |||||
Comprehensive income (loss): | |||||||
Net earnings | 57 | 57 | |||||
Other comprehensive income (loss), net of tax | 1 | 1 | |||||
Repurchase of common stock | (13) | (13) | |||||
Dividends on common stock | (3) | (3) | |||||
Balances at Mar. 30, 2019 | 1 | (409) | 3,768 | 10 | 3,370 | ||
Balances at Dec. 31, 2018 | 1 | (410) | 3,727 | 11 | 3,329 | ||
Comprehensive income (loss): | |||||||
Net earnings | 108 | ||||||
Other comprehensive income (loss), net of tax | (2) | ||||||
Balances at Sep. 28, 2019 | 1 | (412) | 3,811 | 10 | 3,410 | ||
Balances at Mar. 30, 2019 | 1 | (409) | 3,768 | 10 | 3,370 | ||
Comprehensive income (loss): | |||||||
Net earnings | 58 | 58 | |||||
Other comprehensive income (loss), net of tax | (6) | (6) | |||||
Repurchase of common stock | (1) | (1) | |||||
Dividends on common stock | (2) | (2) | |||||
Balances at Jun. 29, 2019 | 1 | (415) | 3,823 | 10 | 3,419 | ||
Comprehensive income (loss): | |||||||
Net earnings | (7) | (7) | |||||
Other comprehensive income (loss), net of tax | 3 | 3 | |||||
Repurchase of common stock | (3) | (3) | |||||
Dividends on common stock | (2) | (2) | |||||
Balances at Sep. 28, 2019 | 1 | (412) | 3,811 | 10 | 3,410 | ||
Balances at Dec. 31, 2019 | 1 | (440) | $ (3) | 3,983 | 10 | $ (3) | 3,554 |
Comprehensive income (loss): | |||||||
Net earnings | (103) | (103) | |||||
Other comprehensive income (loss), net of tax | 5 | 5 | |||||
Repurchase of common stock | (13) | (13) | |||||
Dividends on common stock | (3) | (3) | |||||
Balances at Mar. 28, 2020 | 1 | (435) | 3,861 | 10 | 3,437 | ||
Balances at Dec. 31, 2019 | 1 | (440) | $ (3) | 3,983 | 10 | $ (3) | 3,554 |
Comprehensive income (loss): | |||||||
Net earnings | 18 | ||||||
Other comprehensive income (loss), net of tax | (4) | ||||||
Balances at Sep. 26, 2020 | 1 | (444) | 3,978 | 10 | 3,545 | ||
Balances at Mar. 28, 2020 | 1 | (435) | 3,861 | 10 | 3,437 | ||
Comprehensive income (loss): | |||||||
Net earnings | (26) | (26) | |||||
Other comprehensive income (loss), net of tax | (19) | (19) | |||||
Dividends on common stock | (2) | (2) | |||||
Balances at Jun. 27, 2020 | 1 | (454) | 3,833 | 10 | 3,390 | ||
Comprehensive income (loss): | |||||||
Net earnings | 147 | 147 | |||||
Other comprehensive income (loss), net of tax | 10 | 10 | |||||
Dividends on common stock | (2) | (2) | |||||
Balances at Sep. 26, 2020 | $ 1 | $ (444) | $ 3,978 | $ 10 | $ 3,545 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | |
Condensed Consolidated Statements of Changes in Equity | ||||||
Dividends on common stock (in dollars per share) | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 | $ 2.25 |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 9 Months Ended |
Sep. 26, 2020 | |
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, 2019 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. Except for new guidance adopted prospectively as discussed below, Seaboard has consistently applied all accounting policies as disclosed in the annual report on Form 10-K to all periods presented in these condensed consolidated financial statements. 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. Items subject to such estimates and assumptions include those related to allowance for credit losses on receivables, valuation of inventories, impairment of long-lived assets, intangibles and goodwill, write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes, lease liabilities and right of use (“ROU”) assets and accrued pension liability. Actual results could differ from those estimates. Supplemental Cash Flow Information The following table includes supplemental cash and non-cash information related to leases. Seaboard reports the amortization of ROU assets and changes in operating lease liabilities in other liabilities, exclusive of debt in the condensed consolidated statements of cash flows. Nine months ended September 26, September 28, (Millions of dollars) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 107 $ 101 Operating cash flows from finance leases 3 1 Financing cash flows from finance leases 5 1 Operating ROU assets obtained in exchange for new operating lease liabilities $ 46 $ 62 Finance ROU assets obtained in exchange for new finance lease liabilities 46 31 Leases Seaboard’s operating lease assets and liabilities are reported separately in the condensed consolidated balance sheets. The classification of Seaboard’s finance leases in the condensed consolidated balance sheets was as follows: September 26, December 31, (Millions of dollars) 2020 2019 Finance lease ROU assets, net Property, plant and equipment, net $ 90 $ 50 Finance lease liabilities Other current liabilities 10 5 Non-current finance lease liabilities Other liabilities 77 40 Accounting Standard Adopted During 2020 On January 1, 2020, Seaboard adopted guidance which requires the use of a new current expected credit loss model in order to determine the allowance for credit losses with respect to accounts receivable and notes receivable, among other financial instruments. This model estimates the lifetime of expected credit loss based on historical experience, current conditions and reasonable supportable forecasts and replaces the existing incurred loss model. As a result of this adoption, Seaboard recorded a cumulative-effect adjustment of $3 million on January 1, 2020 Seaboard used the loss-rate method in developing its allowance for credit losses, which involved identifying pools of assets with similar risk characteristics, reviewing historical losses within the last five years and consideration for any reasonable supportable forecasts of economic indicators. Seaboard endeavors to minimize credit risk by its credit granting policies, relationships established with customers and relatively short billing and collection cycles. Management monitors the credit quality of its different receivable types by frequent customer discussions, following economic and industry trends and specific customer data. Changes in estimates, developing trends and other new information can have a material effect on future evaluations. R ecently Issued Accounting Standard Not Yet Adopted In December 2019, the Financial Accounting Standards Board issued guidance which simplifies the accounting for income taxes by removing certain exceptions to the general principles and improves consistent application of GAAP for other areas by clarifying and amending existing guidance. This guidance is effective for Seaboard on January 1, 2021. Seaboard is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its financial statements and disclosures. |
Investments
Investments | 9 Months Ended |
Sep. 26, 2020 | |
Investments | |
Investments | Note 2 – Investments The following is a summary of the estimated fair value of short-term investments classified as trading securities: September 26, December 31, (Millions of dollars) 2020 2019 Domestic equity securities $ 613 $ 706 Domestic debt securities 391 409 Foreign equity securities 107 189 Foreign debt securities 57 43 High yield securities 55 56 Collateralized loan obligations 16 15 Money market funds held in trading accounts 2 12 Other trading securities 4 4 Total trading short-term investments $ 1,245 $ 1,434 The change in unrealized gains (losses) related to trading securities still held at the end of the respective reporting period was $53 million and $(45) million for the three and nine months ended September 26, 2020, respectively, and $2 million and $124 million for the three and nine months ended September 28, 2019, respectively. As of September 26, 2020 other currencies. Seaboard had $21 million and $13 million of debt securities denominated in euros as of September 26, 2020 and December 31, 2019, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 26, 2020 | |
Inventories | |
Inventories | Note 3 – Inventories The following is a summary of inventories: September 26, December 31, (Millions of dollars) 2020 2019 At lower of last-in, first-out ("LIFO") cost or market: Hogs and materials $ 394 $ 387 Fresh pork and materials 29 46 LIFO adjustment (71) (64) Total inventories at lower of LIFO cost or market 352 369 At lower of first-in, first-out ("FIFO") cost and net realizable value ("NRV"): Grains, oilseeds and other commodities 424 353 Sugar produced and in process 26 17 Other 118 109 Total inventories at lower of FIFO cost and NRV 568 479 Grain, flour and feed at lower of weighted average cost and NRV 142 174 Total inventories $ 1,062 $ 1,022 |
Debt and Commitments and Contin
Debt and Commitments and Contingencies | 9 Months Ended |
Sep. 26, 2020 | |
Debt and Commitments and Contingencies | |
Debt and Commitments and Contingencies | Note 4 – Debt and Commitments and Contingencies The outstanding balances under uncommitted and committed lines of credit were $242 million and $29 million, respectively, as of September 26, 2020. Of the aggregate outstanding balance, $157 million was denominated in foreign currencies with $122 million denominated in the South African rand, $24 million denominated in the Canadian dollar and $11 million denominated in various other currencies. The outstanding balances under uncommitted and committed lines of credit were $246 million and $0 million, respectively, as of December 31, 2019. The weighted average interest rates for outstanding lines of credit were 4.23% and 5.79% as of September 26, 2020 and December 31, 2019, respectively. During the second quarter of 2020, Seaboard entered into an unsecured $250 million short-term committed revolving line of credit agreement with a $100 million accordion option maturing May 20, 2021. Draws bear interest based on LIBOR plus 1.63%. Seaboard incurs unused commitment fees of 0.20% per annum. During September of 2020, Seaboard renewed its $100 million secured committed line of credit with Wells Fargo Bank, National Association through September 30, 2021. Pursuant to the amendment, interest is computed at LIBOR plus 0.75%, and Seaboard incurs an unused commitment fee of 0.15% per annum. Long-term debt includes borrowings under term loans and other contractual obligations for payment, including notes payable. The following is a summary of long-term debt: September 26, December 31, (Millions of dollars) 2020 2019 Term Loan due 2028 $ 688 $ 691 Foreign subsidiary obligations 52 102 Total long-term debt at face value 740 793 Current maturities of long-term debt and unamortized discount and costs (57) (63) Long-term debt, less current maturities and unamortized discount and costs $ 683 $ 730 The interest rate on the Term Loan due 2028 was 1.78% and 3.42% as of September 26, 2020 and December 31, 2019, respectively. The weighted average interest rate on Seaboard’s foreign subsidiary obligations was 3.41% and 3.50% as of September 26, 2020 and December 31, 2019, respectively. Seaboard was in compliance with all restrictive debt covenants as of September 26, 2020. Legal Proceedings On June 28, 2018, Wanda Duryea and eleven other indirect purchasers of pork products, acting on behalf of themselves and a putative class of indirect purchasers of pork products, filed a class action complaint in the U.S. District Court for the District of Minnesota (the “District Court”) against several pork processors, including Seaboard Foods LLC and Agri Stats, Inc., a company described in the complaint as a data sharing service. Subsequent to the filing of this initial complaint, additional class action complaints making similar claims on behalf of putative classes of direct and indirect purchasers were filed in the District Court. The complaints were amended and consolidated for pre-trial purposes, into three consolidated putative class actions brought on behalf of (a) direct purchasers, (b) consumer indirect purchasers and (c) commercial and institutional indirect purchasers. The amended complaints named Seaboard Corporation as an additional defendant. The consolidated actions are styled In re Pork Antitrust Litigation. Subsequent to the original filings, two additional actions making similar claims, including one by the Commonwealth of Puerto Rico, were brought in or transferred to the District Court. The complaints alleged, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork products in violation of U.S. antitrust laws by coordinating their output and limiting production, allegedly facilitated by the exchange of non-public information about prices, capacity, sales volume and demand through Agri Stats, Inc. The complaints on behalf of the putative classes of indirect purchasers also included causes of action under various state laws, including state antitrust laws, unfair competition laws, consumer protection statutes and state common law claims for unjust enrichment. The complaints also alleged that the defendants concealed this conduct from the plaintiffs and the members of the putative classes. The relief sought in the respective complaints includes treble damages, injunctive relief, pre- and post-judgment interest, costs and attorneys’ fees on behalf of the putative classes. On August 8, 2019, the District Court granted defendants’ motion to dismiss the class action cases while giving the plaintiffs leave to amend. The classes and the other two plaintiffs filed amended complaints in November and December 2019. In addition to amending the original claims, the consumer indirect purchasers have asserted a new claim alleging that the exchange of information by defendants through Agri Stats Inc. unreasonably restrained trade. On October 16, 2020, the defendants’ pending motion to dismiss the amended complaints was denied. Seaboard intends to defend these cases vigorously. It is impossible at this stage either to determine the probability of a favorable or unfavorable outcome resulting from these suits, or to reasonably estimate the amount of potential loss or range of potential loss, if any, resulting from the suits. On March 20, 2018, the bankruptcy trustee (the “Trustee”) for Cereoil Uruguay S.A. (“Cereoil”) filed a suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard and Seaboard’s subsidiaries, Seaboard Overseas Limited (“SOL”) and Seaboard Uruguay Holdings Ltd. (“Seaboard Uruguay”). Seaboard has a 45% indirect ownership of Cereoil. The suit seeks an order requiring Seaboard, SOL and Seaboard Uruguay to reimburse Cereoil the amount of $22 million, contending that deliveries of soybeans to SOL pursuant to purchase agreements should be set aside as fraudulent conveyances. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and its two subsidiaries could be ordered to pay the amount of $22 million. Any award in this case would offset against any award in the additional case described below filed by the Trustee on April 27, 2018. On April 27, 2018, the Trustee for Cereoil filed another suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard, SOL, Seaboard Uruguay, all directors of Cereoil, including two individuals employed by Seaboard who served as directors at the behest of Seaboard, and the Chief Financial Officer of Cereoil, an employee of Seaboard who also served at the behest of Seaboard (collectively, the “Cereoil Defendants”). The Trustee contends that the Cereoil Defendants acted with willful misconduct to cause Cereoil’s insolvency, and thus should be ordered to pay all liabilities of Cereoil, net of assets. The bankruptcy filing lists total liabilities of $53 million and assets of $30 million. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and the other Cereoil Defendants could be ordered to pay the amount of the net indebtedness of Cereoil, which based on the bankruptcy schedules would total $23 million. It is possible that the net indebtedness could be higher than this amount if Cereoil’s liabilities are greater than $53 million and/or Cereoil’s assets are worth less than $30 million. In addition, in the event of an adverse ruling, the Bankruptcy Court of First Instance could order payment of the Trustee’s professional fees, interest, and other expenses. Any award in this case would offset against any award in the case described above filed on March 20, 2018. A creditor of Cereoil which has a claim in the bankruptcy proceeding pending in Uruguay of approximately $10 million, plus accrued interest, has threatened to bring legal action in the U.S. against Seaboard alleging on various legal theories that Seaboard is responsible for this same indebtedness. Seaboard will vigorously defend this action should it be brought. On May 15, 2018, the Trustee for Nolston S.A. (“Nolston”) filed a suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard and the other Cereoil Defendants. Seaboard has a 45% indirect ownership of Nolston. The Trustee contends that the Cereoil Defendants acted with willful misconduct to cause Nolston’s insolvency, and thus should be ordered to pay all liabilities of Nolston, net of assets. The bankruptcy filing lists total liabilities of $29 million and assets of $15 million. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and the other Cereoil Defendants could be ordered to pay the amount of the net indebtedness of Nolston, which based on the bankruptcy schedules would total $14 million. It is possible that the net indebtedness could be higher than this amount if Nolston’s liabilities are greater than $29 million and/or Nolston’s assets are worth less than $15 million. In addition, in the event of an adverse ruling, the Bankruptcy Court of First Instance could order payment of the Trustee’s professional fees, interest, and other expenses. 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. Guarantees 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 26, 2020, guarantees outstanding to affiliates and third parties were not material. Seaboard has not accrued a liability for any of the affiliate or third-party guarantees as management considers the likelihood of loss to be remote . |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 26, 2020 | |
Employee Benefits | |
Employee Benefits | Note 5 – Employee Benefits Seaboard has a defined benefit pension plan for certain domestic salaried and clerical employees. At this time, no contributions are expected to be made to the plan in 2020. 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. During the third quarter of 2020, Seaboard made a lump sum $32 million pension distribution, related to the passing of Mr. Steve Bresky. This distribution resulted in recognizing a $9 million pension settlement charge in a non-qualified supplemental executive plan. The net periodic benefit cost for all plans was as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost $ 2 $ 2 $ 7 $ 6 Interest cost 2 3 8 9 Expected return on plan assets (2) (2) (8) (7) Amortization 1 1 5 5 Settlement loss recognized 9 — 11 — Net periodic benefit cost $ 12 $ 4 $ 23 $ 13 In addition to the pension distribution, Seaboard paid $32 million of deferred compensation, related to Mr. Bresky, which decreased deferred compensation plan assets and liabilities recorded in other current assets and liabilities, respectively, on the condensed consolidated balance sheet. |
Derivatives and Fair Value of F
Derivatives and Fair Value of Financial Instruments | 9 Months Ended |
Sep. 26, 2020 | |
Derivatives and Fair Value of Financial Instruments | |
Derivatives and Fair Value of Financial Instruments | Note 6 – Derivatives and Fair Value of Financial Instruments The following tables shows assets and liabilities measured at fair value on a recurring basis as of September 26, 2020 and December 31, 2019, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. The trading securities classified as other current assets below are assets held for Seaboard’s deferred compensation plans. Balance September 26, (Millions of dollars) 2020 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 613 $ 613 $ — $ — Domestic debt securities 391 122 269 — Foreign equity securities 107 107 — — Foreign debt securities 57 — 57 — High yield securities 55 7 48 — Collateralized loan obligations 16 — 16 — Money market funds held in trading accounts 2 2 — — Other trading securities 4 4 — — Trading securities – other current assets: Domestic equity securities 12 12 — — Money market fund held in trading accounts 6 6 — — Foreign equity securities 3 3 — — Fixed income securities 2 2 — — Long-term investment 31 — — 31 Derivatives: Commodities 16 16 — — Foreign currencies 4 — 4 — Total Assets $ 1,319 $ 894 $ 394 $ 31 Liabilities: Contingent consideration $ 15 $ — $ — $ 15 Derivatives: Commodities 15 15 — — Interest rate swaps 1 — 1 — Foreign currencies 4 — 4 — Total Liabilities $ 35 $ 15 $ 5 $ 15 Balance December 31, (Millions of dollars) 2019 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 706 $ 706 $ — $ — Domestic debt securities 409 117 292 — Foreign equity securities 189 189 — — High yield securities 56 10 46 — Foreign debt securities 43 — 43 — Collateralized loan obligations 15 — 15 — Money market funds held in trading accounts 12 12 — — Other trading securities 4 4 — — Trading securities – other current assets: Domestic equity securities 40 40 — — Money market fund held in trading accounts 6 6 — — Foreign equity securities 3 3 — — Fixed income securities 2 2 — — Derivatives: Commodities 6 6 — — Total Assets $ 1,491 $ 1,095 $ 396 $ — Liabilities: Contingent consideration $ 13 $ — $ — $ 13 Derivatives: Commodities 4 4 — — Foreign currencies 3 — 3 — Total Liabilities $ 20 $ 4 $ 3 $ 13 Financial instruments consisting of cash and cash equivalents, net receivables, lines of credit and accounts payable are carried at cost, which approximates fair value as a result of the short-term nature of the instruments. The fair value of short-term investments is measured using multiple levels. Domestic debt securities categorized as level 1 in the fair value hierarchy include debt securities held in mutual funds and ETFs. Domestic debt securities categorized as level 2 include corporate bonds, mortgage-backed securities, asset-backed securities and U.S. Treasuries. High yield securities categorized as level 1 in the fair value hierarchy include high yield securities held in mutual funds and ETFs and level 2 includes corporate bonds and bank loans. During the first quarter of 2020, Seaboard invested $30 million in a financial services company that primarily lends to and invests in debt securities of privately held companies. This long-term investment is classified in “Other non-current assets” on the condensed consolidated balance sheet and is valued at net asset value (“NAV”), adjusted for specific liquidity factors, resulting in level 3 classification. The fair value of Seaboard’s contingent consideration related to a 2018 acquisition was classified as a level 3 in the fair value hierarchy since the calculation is dependent upon projected company specific inputs using a Monte Carlo simulation. Seaboard remeasures the estimated fair value of the contingent consideration liability until settled with adjustments included in net earnings (loss). The increase in the liability during 2020 was related to lower interest rates at the measurement date. While management believes its derivatives are primarily economic hedges, 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, interest rates and equity prices could have a material impact on earnings in any given period. The nature of Seaboard’s market risk exposure has not changed materially since December 31, 2019. 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. As of September 26, 2020, Seaboard had open net derivative contracts to purchase 18 million bushels of grain and open net derivative contracts to sell 72 million pounds of soybean oil. As of December 31, 2019, Seaboard had open net derivative contracts to purchase 17 million bushels of grain and open net derivative contracts to sell 132 million pounds of soybean oil and 12 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. As of September 26, 2020 and December 31, 2019, Seaboard had 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 $55 million and $78 million, respectively, primarily related to the euro and South African rand. From time to time, Seaboard is subject to counterparty credit risk related to its foreign currency exchange agreements should the counterparties fail to perform according to the terms of the contracts. As of September 26, 2020, Seaboard had a maximum aggregate amount of loss due to credit risk of $4 million with three counterparties. Seaboard does not hold any collateral related to these agreements. Interest Rate Swap Agreements Seaboard enters into interest rate swap agreements to manage the interest rate risk with respect to certain variable rate long-term debt. During mid-2020, Seaboard entered into three interest rate exchange agreements with an aggregate notional value of $400 million that mature in mid-2025. Seaboard pays fixed-rate interest payments at a weighted-average interest rate of 0.26% over the life of the agreements and receives variable-rate interest payments based on the one-month LIBOR from the counterparty without the exchange of the underlying notional amounts. Interest rate exchange agreements are recorded at fair value with changes in value marked-to-market as a component of interest expense, net in the condensed consolidated statements of comprehensive income. Equity Futures Contracts Seaboard enters into equity futures contracts to manage the equity price risk with respect to certain short-term investments. Equity futures contracts are recorded at fair value with changes in value marked-to-market as a component of other investment income (loss), net in the condensed consolidated statements of comprehensive income. The notional amounts of these equity futures contracts were $6 million and $0 million as of September 26, 2020 and December 31, 2019, respectively. 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: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Commodities Cost of sales $ 10 $ (17) $ 27 $ (48) Foreign currencies Cost of sales 2 1 15 5 Foreign currencies Foreign currency gains (losses), net (3) — (2) — Equity Other investment income (loss), net (16) — 7 (3) Interest rate swaps Interest expense — — (1) — The following table provides the fair value of each type of derivative held and where each derivative is included in the condensed consolidated balance sheets: Asset Derivatives Liability Derivatives September 26, December 31, September 26, December 31, (Millions of dollars) 2020 2019 2020 2019 Commodities Other current assets $ 16 $ 6 Other current liabilities $ 15 $ 4 Foreign currencies Other current assets 4 — Other current liabilities 4 3 Interest rate swaps Other current assets — — Other current liabilities 1 — Equity Short-term investments — — Short-term investments — — 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 26, 2020 and December 31, 2019, the commodity derivatives had a margin account balance of $18 million and $13 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $19 million and $15 million, respectively. Seaboard’s equity future derivatives are also presented on a net basis, including netting the derivatives within short-term investments. |
Stockholders' Equity and Accumu
Stockholders' Equity and Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 26, 2020 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | Note 7 – Stockholders’ Equity and Accumulated Other Comprehensive Loss Under Seaboard’s 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, 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 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 share repurchase program expires on October 31, 2020, unless extended. As of September 26, 2020, $65 million of common stock remained available for repurchase under this program. Seaboard repurchased 0 shares and 4,069 shares of common stock during the three and nine months ended September 26, 2020, respectively. The changes in the components of other comprehensive income (loss), net of related taxes, are as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Foreign currency translation adjustment $ 5 $ 2 $ (11) $ (9) Unrecognized pension cost (a) 5 1 7 7 Other comprehensive loss, net of tax $ 10 $ 3 $ (4) $ (2) (a) Primarily represents amounts reclassified from accumulated other comprehensive loss to net periodic pension cost representing the amortization of actuarial losses (gains) and other adjustments. The components of accumulated other comprehensive loss, net of related taxes, are as follows: September 26, December 31, (Millions of dollars) 2020 2019 Cumulative foreign currency translation adjustment $ (380) $ (369) Cumulative unrecognized pension cost (64) (71) Total accumulated other comprehensive loss $ (444) $ (440) |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 26, 2020 | |
Revenue Recognition | |
Revenue Recognition | Note 8 – Revenue Recognition Seaboard has multiple segments with diverse revenue streams. The following tables present Seaboard’s sales disaggregated by revenue source and segment: Three Months Ended September 26, 2020 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 391 $ 877 $ — $ 26 $ — $ 3 $ 1,297 Transportation 2 — 244 — — — 246 Energy 65 — — 5 21 — 91 Other 8 3 — — — — 11 Segment/Consolidated Totals $ 466 $ 880 $ 244 $ 31 $ 21 $ 3 $ 1,645 Three Months Ended September 28, 2019 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 381 $ 906 $ — $ 32 $ — $ 5 $ 1,324 Transportation — — 256 — — — 256 Energy 35 — — 4 30 — 69 Other 7 7 — — — — 14 Segment/Consolidated Totals $ 423 $ 913 $ 256 $ 36 $ 30 $ 5 $ 1,663 Nine Months Ended September 26, 2020 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 1,205 $ 2,906 $ — $ 65 $ — $ 12 $ 4,188 Transportation 6 — 705 — — — 711 Energy 145 — — 6 51 — 202 Other 24 11 — — — — 35 Segment/Consolidated Totals $ 1,380 $ 2,917 $ 705 $ 71 $ 51 $ 12 $ 5,136 Nine Months Ended September 28, 2019 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 1,165 $ 2,731 $ — $ 86 $ — $ 13 $ 3,995 Transportation 7 — 769 — — 1 777 Energy 122 — — 5 92 — 219 Other 24 13 — — — — 37 Segment/Consolidated Totals $ 1,318 $ 2,744 $ 769 $ 91 $ 92 $ 14 $ 5,028 Revenue from goods and services transferred to customers at a single point in time account for approximately 85% of Seaboard’s net sales. Substantially all of the sales in Seaboard’s Marine segment are recognized ratably over the transit time for each voyage as Seaboard believes this is a faithful depiction of the performance obligation to its customers. Seaboard’s contracts with its customers are short-term, defined as less than one year. Deferred revenue represents cash payments received in advance of Seaboard’s performance or revenue billed that is unearned. The CT&M segment requires certain customers to pay in advance or upon delivery to avoid collection risk. The Marine segment’s deferred revenue balance primarily relates to the unearned portion of billed revenue when a ship is on the water and has not arrived at the designated port. Deferred revenue balances are reduced when revenue is recognized. The deferred revenue balance as of December 31, 2019 was fully recognized as revenue during the first quarter of 2020. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 26, 2020 | |
Income Taxes | |
Income Taxes | Note 9 – Income Taxes Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusts the provision for discrete tax items recorded in the period. Changes in the forecasted annual income (loss) projections, including changes due to the impacts of the coronavirus disease 2019 (“COVID-19”) pandemic, have resulted in significant adjustments to quarterly income tax expense (benefit). |
Segment Information
Segment Information | 9 Months Ended |
Sep. 26, 2020 | |
Segment Information | |
Segment Information | Note 10 – Segment Information Seaboard has six reportable segments: Pork, CT&M, Marine, Sugar and Alcohol, Power and Turkey, each offering a specific product or service. For details on the respective products or services, see Note 15 to the consolidated financial statements included in Seaboard’s annual report for the year ended December 31, 2019. Below are segment updates from year-end. During the first quarter of 2020, the CT&M segment finalized the purchase price allocation related to the October 2019 acquisition of ContiLatin del Peru S.A. resulting in the recording of $1 million of intangible assets and no The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of September 26, 2020 and December 31, 2019, Butterball had total assets of $1.2 billion and $1.0 billion, respectively. Butterball’s summarized income statement information was as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Net sales $ 407 $ 416 $ 1,052 $ 1,062 Operating loss $ (3) $ (15) $ (34) $ (42) Net loss $ (7) $ (22) $ (47) $ (59) 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 (loss) and income tax benefit (expense) on a segment basis. Net Sales: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ 466 $ 423 $ 1,380 $ 1,318 CT&M 880 913 2,917 2,744 Marine 244 256 705 769 Sugar and Alcohol 31 36 71 91 Power 21 30 51 92 All Other 3 5 12 14 Segment/Consolidated Totals $ 1,645 $ 1,663 $ 5,136 $ 5,028 Operating Income (Loss): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ 4 $ (22) $ 47 $ (31) CT&M 28 14 82 50 Marine 14 (2) (3) 2 Sugar and Alcohol (1) (1) (4) (9) Power 3 9 4 21 All Other — 1 1 2 Segment Totals 48 (1) 127 35 Corporate (19) (5) (24) (22) Consolidated Totals $ 29 $ (6) $ 103 $ 13 Income (Loss) from Affiliates: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ — $ (5) $ (3) $ (19) CT&M (3) (1) (2) (6) Marine 1 1 3 2 Sugar and Alcohol — — — 1 Power — 1 — 3 Turkey (4) (11) (25) (30) Segment/Consolidated Totals $ (6) $ (15) $ (27) $ (49) Total Assets: September 26, December 31, (Millions of dollars) 2020 2019 Pork $ 1,765 $ 1,802 CT&M 1,607 1,621 Marine 504 554 Sugar and Alcohol 147 139 Power 296 283 Turkey 250 275 All Other 5 10 Segment Totals 4,574 4,684 Corporate 1,402 1,601 Consolidated Totals $ 5,976 $ 6,285 Investments in and Advances to Affiliates: September 26, December 31, (Millions of dollars) 2020 2019 Pork $ 178 $ 183 CT&M 230 237 Marine 32 32 Sugar and Alcohol 5 5 Power 3 3 Turkey 250 275 Segment/Consolidated Totals $ 698 $ 735 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 cash and short-term investments, other current assets related to deferred compensation plans, long-term investments and other miscellaneous items. Corporate operating results represent certain operating costs not specifically allocated to individual segments and include costs related to Seaboard’s deferred compensation plans, which are offset by the effect of the marked-to-market adjustments on these investments recorded in other investment income (loss), net. |
Accounting Policies and Basis_2
Accounting Policies and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 26, 2020 | |
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. Items subject to such estimates and assumptions include those related to allowance for credit losses on receivables, valuation of inventories, impairment of long-lived assets, intangibles and goodwill, write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes, lease liabilities and right of use (“ROU”) assets and accrued pension liability. Actual results could differ from those estimates. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table includes supplemental cash and non-cash information related to leases. Seaboard reports the amortization of ROU assets and changes in operating lease liabilities in other liabilities, exclusive of debt in the condensed consolidated statements of cash flows. Nine months ended September 26, September 28, (Millions of dollars) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 107 $ 101 Operating cash flows from finance leases 3 1 Financing cash flows from finance leases 5 1 Operating ROU assets obtained in exchange for new operating lease liabilities $ 46 $ 62 Finance ROU assets obtained in exchange for new finance lease liabilities 46 31 |
Leases | Leases Seaboard’s operating lease assets and liabilities are reported separately in the condensed consolidated balance sheets. The classification of Seaboard’s finance leases in the condensed consolidated balance sheets was as follows: September 26, December 31, (Millions of dollars) 2020 2019 Finance lease ROU assets, net Property, plant and equipment, net $ 90 $ 50 Finance lease liabilities Other current liabilities 10 5 Non-current finance lease liabilities Other liabilities 77 40 |
Recently Adopted and Issued Accounting Standards | Accounting Standard Adopted During 2020 On January 1, 2020, Seaboard adopted guidance which requires the use of a new current expected credit loss model in order to determine the allowance for credit losses with respect to accounts receivable and notes receivable, among other financial instruments. This model estimates the lifetime of expected credit loss based on historical experience, current conditions and reasonable supportable forecasts and replaces the existing incurred loss model. As a result of this adoption, Seaboard recorded a cumulative-effect adjustment of $3 million on January 1, 2020 Seaboard used the loss-rate method in developing its allowance for credit losses, which involved identifying pools of assets with similar risk characteristics, reviewing historical losses within the last five years and consideration for any reasonable supportable forecasts of economic indicators. Seaboard endeavors to minimize credit risk by its credit granting policies, relationships established with customers and relatively short billing and collection cycles. Management monitors the credit quality of its different receivable types by frequent customer discussions, following economic and industry trends and specific customer data. Changes in estimates, developing trends and other new information can have a material effect on future evaluations. R ecently Issued Accounting Standard Not Yet Adopted In December 2019, the Financial Accounting Standards Board issued guidance which simplifies the accounting for income taxes by removing certain exceptions to the general principles and improves consistent application of GAAP for other areas by clarifying and amending existing guidance. This guidance is effective for Seaboard on January 1, 2021. Seaboard is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its financial statements and disclosures. |
Accounting Policies and Basis_3
Accounting Policies and Basis of Presentations (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Accounting Policies and Basis of Presentation | |
Summary of supplemental cash and non-cash information related to leases | Nine months ended September 26, September 28, (Millions of dollars) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 107 $ 101 Operating cash flows from finance leases 3 1 Financing cash flows from finance leases 5 1 Operating ROU assets obtained in exchange for new operating lease liabilities $ 46 $ 62 Finance ROU assets obtained in exchange for new finance lease liabilities 46 31 |
Summary of financial leases in condensed consolidated balance sheets | September 26, December 31, (Millions of dollars) 2020 2019 Finance lease ROU assets, net Property, plant and equipment, net $ 90 $ 50 Finance lease liabilities Other current liabilities 10 5 Non-current finance lease liabilities Other liabilities 77 40 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Investments | |
Summary of the estimated fair value of short-term investments classified as trading securities | September 26, December 31, (Millions of dollars) 2020 2019 Domestic equity securities $ 613 $ 706 Domestic debt securities 391 409 Foreign equity securities 107 189 Foreign debt securities 57 43 High yield securities 55 56 Collateralized loan obligations 16 15 Money market funds held in trading accounts 2 12 Other trading securities 4 4 Total trading short-term investments $ 1,245 $ 1,434 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Inventories | |
Summary of inventories | September 26, December 31, (Millions of dollars) 2020 2019 At lower of last-in, first-out ("LIFO") cost or market: Hogs and materials $ 394 $ 387 Fresh pork and materials 29 46 LIFO adjustment (71) (64) Total inventories at lower of LIFO cost or market 352 369 At lower of first-in, first-out ("FIFO") cost and net realizable value ("NRV"): Grains, oilseeds and other commodities 424 353 Sugar produced and in process 26 17 Other 118 109 Total inventories at lower of FIFO cost and NRV 568 479 Grain, flour and feed at lower of weighted average cost and NRV 142 174 Total inventories $ 1,062 $ 1,022 |
Debt and Commitments and Cont_2
Debt and Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Debt and Commitments and Contingencies | |
Summary of long-term debt | September 26, December 31, (Millions of dollars) 2020 2019 Term Loan due 2028 $ 688 $ 691 Foreign subsidiary obligations 52 102 Total long-term debt at face value 740 793 Current maturities of long-term debt and unamortized discount and costs (57) (63) Long-term debt, less current maturities and unamortized discount and costs $ 683 $ 730 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Employee Benefits | |
Schedule of net periodic benefit cost of plans | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost $ 2 $ 2 $ 7 $ 6 Interest cost 2 3 8 9 Expected return on plan assets (2) (2) (8) (7) Amortization 1 1 5 5 Settlement loss recognized 9 — 11 — Net periodic benefit cost $ 12 $ 4 $ 23 $ 13 |
Derivatives and Fair Value of_2
Derivatives and Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Derivatives and Fair Value of Financial Instruments | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Balance September 26, (Millions of dollars) 2020 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 613 $ 613 $ — $ — Domestic debt securities 391 122 269 — Foreign equity securities 107 107 — — Foreign debt securities 57 — 57 — High yield securities 55 7 48 — Collateralized loan obligations 16 — 16 — Money market funds held in trading accounts 2 2 — — Other trading securities 4 4 — — Trading securities – other current assets: Domestic equity securities 12 12 — — Money market fund held in trading accounts 6 6 — — Foreign equity securities 3 3 — — Fixed income securities 2 2 — — Long-term investment 31 — — 31 Derivatives: Commodities 16 16 — — Foreign currencies 4 — 4 — Total Assets $ 1,319 $ 894 $ 394 $ 31 Liabilities: Contingent consideration $ 15 $ — $ — $ 15 Derivatives: Commodities 15 15 — — Interest rate swaps 1 — 1 — Foreign currencies 4 — 4 — Total Liabilities $ 35 $ 15 $ 5 $ 15 Balance December 31, (Millions of dollars) 2019 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 706 $ 706 $ — $ — Domestic debt securities 409 117 292 — Foreign equity securities 189 189 — — High yield securities 56 10 46 — Foreign debt securities 43 — 43 — Collateralized loan obligations 15 — 15 — Money market funds held in trading accounts 12 12 — — Other trading securities 4 4 — — Trading securities – other current assets: Domestic equity securities 40 40 — — Money market fund held in trading accounts 6 6 — — Foreign equity securities 3 3 — — Fixed income securities 2 2 — — Derivatives: Commodities 6 6 — — Total Assets $ 1,491 $ 1,095 $ 396 $ — Liabilities: Contingent consideration $ 13 $ — $ — $ 13 Derivatives: Commodities 4 4 — — Foreign currencies 3 — 3 — Total Liabilities $ 20 $ 4 $ 3 $ 13 |
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 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Commodities Cost of sales $ 10 $ (17) $ 27 $ (48) Foreign currencies Cost of sales 2 1 15 5 Foreign currencies Foreign currency gains (losses), net (3) — (2) — Equity Other investment income (loss), net (16) — 7 (3) Interest rate swaps Interest expense — — (1) — |
Schedule of fair value of each type of derivative and its location in the condensed consolidated balance sheets | Asset Derivatives Liability Derivatives September 26, December 31, September 26, December 31, (Millions of dollars) 2020 2019 2020 2019 Commodities Other current assets $ 16 $ 6 Other current liabilities $ 15 $ 4 Foreign currencies Other current assets 4 — Other current liabilities 4 3 Interest rate swaps Other current assets — — Other current liabilities 1 — Equity Short-term investments — — Short-term investments — — 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 26, 2020 and December 31, 2019, the commodity derivatives had a margin account balance of $18 million and $13 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $19 million and $15 million, respectively. Seaboard’s equity future derivatives are also presented on a net basis, including netting the derivatives within short-term investments. |
Stockholders' Equity and Accu_2
Stockholders' Equity and Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
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 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Foreign currency translation adjustment $ 5 $ 2 $ (11) $ (9) Unrecognized pension cost (a) 5 1 7 7 Other comprehensive loss, net of tax $ 10 $ 3 $ (4) $ (2) (a) Primarily represents amounts reclassified from accumulated other comprehensive loss to net periodic pension cost representing the amortization of actuarial losses (gains) and other adjustments. |
Schedule of components of accumulated other comprehensive loss, net of related taxes | September 26, December 31, (Millions of dollars) 2020 2019 Cumulative foreign currency translation adjustment $ (380) $ (369) Cumulative unrecognized pension cost (64) (71) Total accumulated other comprehensive loss $ (444) $ (440) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Revenue Recognition | |
Schedule of sales disaggregated by revenue source and segment | Three Months Ended September 26, 2020 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 391 $ 877 $ — $ 26 $ — $ 3 $ 1,297 Transportation 2 — 244 — — — 246 Energy 65 — — 5 21 — 91 Other 8 3 — — — — 11 Segment/Consolidated Totals $ 466 $ 880 $ 244 $ 31 $ 21 $ 3 $ 1,645 Three Months Ended September 28, 2019 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 381 $ 906 $ — $ 32 $ — $ 5 $ 1,324 Transportation — — 256 — — — 256 Energy 35 — — 4 30 — 69 Other 7 7 — — — — 14 Segment/Consolidated Totals $ 423 $ 913 $ 256 $ 36 $ 30 $ 5 $ 1,663 Nine Months Ended September 26, 2020 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 1,205 $ 2,906 $ — $ 65 $ — $ 12 $ 4,188 Transportation 6 — 705 — — — 711 Energy 145 — — 6 51 — 202 Other 24 11 — — — — 35 Segment/Consolidated Totals $ 1,380 $ 2,917 $ 705 $ 71 $ 51 $ 12 $ 5,136 Nine Months Ended September 28, 2019 Sugar and All Consolidated (Millions of dollars) Pork CT&M Marine Alcohol Power Other Totals Major Products/Services Lines: Products $ 1,165 $ 2,731 $ — $ 86 $ — $ 13 $ 3,995 Transportation 7 — 769 — — 1 777 Energy 122 — — 5 92 — 219 Other 24 13 — — — — 37 Segment/Consolidated Totals $ 1,318 $ 2,744 $ 769 $ 91 $ 92 $ 14 $ 5,028 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Summary of specific financial information related to sales | Net Sales: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ 466 $ 423 $ 1,380 $ 1,318 CT&M 880 913 2,917 2,744 Marine 244 256 705 769 Sugar and Alcohol 31 36 71 91 Power 21 30 51 92 All Other 3 5 12 14 Segment/Consolidated Totals $ 1,645 $ 1,663 $ 5,136 $ 5,028 |
Summary of specific financial information related to operating income (loss) | Operating Income (Loss): Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ 4 $ (22) $ 47 $ (31) CT&M 28 14 82 50 Marine 14 (2) (3) 2 Sugar and Alcohol (1) (1) (4) (9) Power 3 9 4 21 All Other — 1 1 2 Segment Totals 48 (1) 127 35 Corporate (19) (5) (24) (22) Consolidated Totals $ 29 $ (6) $ 103 $ 13 |
Summary of specific financial information related to income (loss) from affiliates | Income (Loss) from Affiliates: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Pork $ — $ (5) $ (3) $ (19) CT&M (3) (1) (2) (6) Marine 1 1 3 2 Sugar and Alcohol — — — 1 Power — 1 — 3 Turkey (4) (11) (25) (30) Segment/Consolidated Totals $ (6) $ (15) $ (27) $ (49) |
Summary of specific financial information related to total assets | Total Assets: September 26, December 31, (Millions of dollars) 2020 2019 Pork $ 1,765 $ 1,802 CT&M 1,607 1,621 Marine 504 554 Sugar and Alcohol 147 139 Power 296 283 Turkey 250 275 All Other 5 10 Segment Totals 4,574 4,684 Corporate 1,402 1,601 Consolidated Totals $ 5,976 $ 6,285 |
Summary of specific financial information related to investments in and advances to affiliates | Investments in and Advances to Affiliates: September 26, December 31, (Millions of dollars) 2020 2019 Pork $ 178 $ 183 CT&M 230 237 Marine 32 32 Sugar and Alcohol 5 5 Power 3 3 Turkey 250 275 Segment/Consolidated Totals $ 698 $ 735 |
Butterball | |
Summary of specific financial information related to equity method | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (Millions of dollars) 2020 2019 2020 2019 Net sales $ 407 $ 416 $ 1,052 $ 1,062 Operating loss $ (3) $ (15) $ (34) $ (42) Net loss $ (7) $ (22) $ (47) $ (59) |
Accounting Policies and Basis_4
Accounting Policies and Basis of Presentations (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Information | ||||
Operating cash flows from operating leases | $ 107 | $ 101 | ||
Operating cash flows from finance leases | 3 | 1 | ||
Financing cash flows from finance leases | 5 | 1 | ||
Operating lease assets obtained in exchange for new operating lease liabilities | 46 | 62 | ||
Finance right of use assets obtained in exchange for new finance lease liabilities | $ 46 | $ 31 | ||
Leases | ||||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | |||
Finance lease right of use assets, net | $ 90 | $ 50 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | |||
Finance lease liabilities | $ 10 | 5 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | |||
Non-current finance lease liabilities | $ 77 | 40 | ||
Recently issued accounting standards | ||||
Retained earnings | 3,978 | 3,983 | ||
Allowance for credit losses | $ 29 | $ 28 | ||
ASU 2016-13 | ||||
Recently issued accounting standards | ||||
Retained earnings | $ (3) | |||
Allowance for credit losses | $ 3 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Investments | |||||
Fair Value | $ 1,245 | $ 1,245 | $ 1,434 | ||
Total trading short-term investments | 1,245 | 1,245 | 1,434 | ||
Change in unrealized gains (losses) on trading securities | 53 | $ 2 | (45) | $ 124 | |
Domestic equity securities | |||||
Investments | |||||
Fair Value | 613 | 613 | 706 | ||
Domestic debt securities | |||||
Investments | |||||
Fair Value | 391 | 391 | 409 | ||
Foreign equity securities | |||||
Investments | |||||
Fair Value | 107 | 107 | 189 | ||
Foreign equity securities | Denominated in foreign currencies | |||||
Investments | |||||
Fair Value Equity | 1 | 1 | 62 | ||
Foreign equity securities | Denominated in Canadian dollars | |||||
Investments | |||||
Fair Value Equity | 1 | 1 | |||
Foreign equity securities | Denominated in Euros | |||||
Investments | |||||
Fair Value Equity | 32 | ||||
Foreign equity securities | Denominated in Japanese Yen | |||||
Investments | |||||
Fair Value Equity | 12 | ||||
Foreign equity securities | Denominated in British pounds | |||||
Investments | |||||
Fair Value Equity | 8 | ||||
Foreign equity securities | Denominated in other foreign currencies | |||||
Investments | |||||
Fair Value Equity | 10 | ||||
Foreign debt securities | |||||
Investments | |||||
Fair Value | 57 | 57 | 43 | ||
Foreign debt securities | Denominated in Euros | |||||
Investments | |||||
Fair Value | 21 | 21 | 13 | ||
High yield securities | |||||
Investments | |||||
Fair Value | 55 | 55 | 56 | ||
Money market funds held in trading accounts | |||||
Investments | |||||
Fair Value | 2 | 2 | 12 | ||
Collateralized loan obligations | |||||
Investments | |||||
Fair Value | 16 | 16 | 15 | ||
Other trading securities | |||||
Investments | |||||
Fair Value | $ 4 | $ 4 | $ 4 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
At lower of LIFO cost or market: | ||
Hogs and materials | $ 394 | $ 387 |
Fresh pork and materials | 29 | 46 |
LIFO adjustment | (71) | (64) |
Total inventories at lower of LIFO cost or market | 352 | 369 |
At lower of FIFO cost and net realizable value: | ||
Grains, oilseeds and other commodities | 424 | 353 |
Sugar produced and in process | 26 | 17 |
Other | 118 | 109 |
Total inventories at lower of FIFO cost and NRV | 568 | 479 |
Grain, flour and feed at lower of weighted average cost and NRV | 142 | 174 |
Total inventories | $ 1,062 | $ 1,022 |
Debt and Commitments and Cont_3
Debt and Commitments and Contingencies (Details) $ in Millions | Jun. 28, 2018itemplaintiff | May 15, 2018USD ($) | Apr. 27, 2018USD ($) | Mar. 20, 2018USD ($) | Sep. 26, 2020USD ($) | Jun. 27, 2020USD ($) | Sep. 26, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument | ||||||||
Lines of credit outstanding | $ 271 | $ 271 | $ 246 | |||||
Total long-term debt at face value | 740 | 740 | 793 | |||||
Current maturities of long-term debt and unamortized discount | (57) | (57) | (63) | |||||
Long-term debt, less current maturities | 683 | 683 | 730 | |||||
Current maturities of long-term debt | 56 | 56 | 62 | |||||
Contingencies | ||||||||
Assets | $ 5,976 | $ 5,976 | $ 6,285 | |||||
Pork Product Purchasers | Pending Litigation | ||||||||
Contingencies | ||||||||
Number of plaintiffs | plaintiff | 11 | |||||||
Number of consolidated putative class actions | item | 3 | |||||||
Cereoil | ||||||||
Contingencies | ||||||||
Percentage of ownership | 45.00% | 45.00% | ||||||
Cereoil | Cereoil Bankruptcy Trustee - Case One | Pending Litigation | ||||||||
Contingencies | ||||||||
Damages sought | $ 22 | |||||||
Cereoil | Cereoil Bankruptcy Trustee - Case Two | Pending Litigation | ||||||||
Contingencies | ||||||||
Damages sought | $ 23 | |||||||
Total liabilities | 53 | |||||||
Assets | $ 30 | |||||||
Pending claim in bankruptcy proceeding, included the net indebtedness of Cereoil | $ 10 | |||||||
Nolston | ||||||||
Contingencies | ||||||||
Percentage of ownership | 45.00% | 45.00% | ||||||
Nolston | Nolston Bankruptcy Trustee | Pending Litigation | ||||||||
Contingencies | ||||||||
Damages sought | $ 14 | |||||||
Total liabilities | 29 | |||||||
Assets | $ 15 | |||||||
Committed and uncommitted bank lines | ||||||||
Debt Instrument | ||||||||
Weighted average interest rate (as a percent) | 4.23% | 4.23% | 5.79% | |||||
Committed and uncommitted bank lines | Denominated in foreign currencies | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | $ 157 | $ 157 | ||||||
Committed and uncommitted bank lines | Denominated in South African Rand | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | 122 | 122 | ||||||
Committed and uncommitted bank lines | Denominated in Canadian dollars | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | 24 | 24 | ||||||
Committed and uncommitted bank lines | Denominated in other foreign currencies | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | 11 | 11 | ||||||
Uncommitted bank lines | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | 242 | 242 | $ 246 | |||||
Committed bank lines | ||||||||
Debt Instrument | ||||||||
Lines of credit outstanding | 29 | 29 | 0 | |||||
Term loan due 2028 | ||||||||
Debt Instrument | ||||||||
Total long-term debt at face value | $ 688 | $ 688 | $ 691 | |||||
Effective interest rate (as a percent) | 1.78% | 1.78% | 3.42% | |||||
Committed revolving credit agreement 1 | ||||||||
Debt Instrument | ||||||||
Maximum capacity | $ 250 | |||||||
Additional borrowing capacity | $ 100 | |||||||
Unused commitment fee | 0.20% | |||||||
Committed revolving credit agreement 1 | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate (as a percent) | 1.63% | |||||||
Foreign subsidiary obligations | ||||||||
Debt Instrument | ||||||||
Total long-term debt at face value | $ 52 | $ 52 | $ 102 | |||||
Foreign subsidiary obligations | Weighted Average | ||||||||
Debt Instrument | ||||||||
Effective interest rate (as a percent) | 3.41% | 3.41% | 3.50% | |||||
Wells Fargo | Committed bank lines | ||||||||
Debt Instrument | ||||||||
Maximum capacity | $ 100 | $ 100 | ||||||
Unused commitment fee | 0.15% | |||||||
Wells Fargo | Committed bank lines | LIBOR | ||||||||
Debt Instrument | ||||||||
Basis spread on variable rate (as a percent) | 0.75% |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Target allocation and pension plan asset allocation | ||||
Pension distribution | $ 32 | |||
Pension settlement charge | 9 | $ 11 | ||
Components of net periodic benefit cost: | ||||
Service cost | 2 | $ 2 | 7 | $ 6 |
Interest cost | 2 | 3 | 8 | 9 |
Expected return on plan assets | (2) | (2) | (8) | (7) |
Amortization | 1 | 1 | 5 | 5 |
Settlement loss recognized | 9 | 11 | ||
Net periodic benefit cost | 12 | $ 4 | 23 | $ 13 |
Deferred compensation paid | 32 | |||
Defined benefit pension plan | ||||
Target allocation and pension plan asset allocation | ||||
Contributions expected to be made to defined benefit pension plans | $ 0 | $ 0 |
Derivatives and Fair Value of_3
Derivatives and Fair Value of Financial Instruments-Deferred Comp Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 28, 2020 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Assets: | ||||
Trading securities | $ 1,245 | $ 1,434 | ||
Investments | ||||
Amount invested | 41 | $ 14 | ||
Financial services company | ||||
Investments | ||||
Amount invested | $ 30 | |||
Commodities | ||||
Assets: | ||||
Derivative assets and liabilities, net basis | 19 | 15 | ||
Domestic equity securities | ||||
Assets: | ||||
Trading securities | 613 | 706 | ||
Domestic debt securities | ||||
Assets: | ||||
Trading securities | 391 | 409 | ||
Foreign equity securities | ||||
Assets: | ||||
Trading securities | 107 | 189 | ||
High yield securities | ||||
Assets: | ||||
Trading securities | 55 | 56 | ||
Money market funds held in trading accounts | ||||
Assets: | ||||
Trading securities | 2 | 12 | ||
Collateralized loan obligations | ||||
Assets: | ||||
Trading securities | 16 | 15 | ||
Other trading securities | ||||
Assets: | ||||
Trading securities | 4 | 4 | ||
Recurring basis | Level 1 | ||||
Assets: | ||||
Total assets | 894 | 1,095 | ||
Liabilities: | ||||
Total liabilities | 15 | 4 | ||
Recurring basis | Level 1 | Commodities | ||||
Assets: | ||||
Derivatives | 16 | 6 | ||
Liabilities: | ||||
Derivatives | 15 | 4 | ||
Recurring basis | Level 1 | Domestic equity securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 613 | 706 | ||
Recurring basis | Level 1 | Domestic equity securities | Other current assets | ||||
Assets: | ||||
Trading securities | 12 | 40 | ||
Recurring basis | Level 1 | Domestic debt securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 122 | 117 | ||
Recurring basis | Level 1 | Foreign equity securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 107 | 189 | ||
Recurring basis | Level 1 | Foreign equity securities | Other current assets | ||||
Assets: | ||||
Trading securities | 3 | 3 | ||
Recurring basis | Level 1 | High yield securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 7 | 10 | ||
Recurring basis | Level 1 | Money market funds held in trading accounts | Short-term investments | ||||
Assets: | ||||
Trading securities | 2 | 12 | ||
Recurring basis | Level 1 | Money market funds held in trading accounts | Other current assets | ||||
Assets: | ||||
Trading securities | 6 | 6 | ||
Recurring basis | Level 1 | Other trading securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 4 | 4 | ||
Recurring basis | Level 1 | Fixed income securities | Other current assets | ||||
Assets: | ||||
Trading securities | 2 | 2 | ||
Recurring basis | Level 2 | ||||
Assets: | ||||
Total assets | 394 | 396 | ||
Liabilities: | ||||
Total liabilities | 5 | 3 | ||
Recurring basis | Level 2 | Interest rate swaps | ||||
Liabilities: | ||||
Derivatives | 1 | |||
Recurring basis | Level 2 | Foreign currencies | ||||
Assets: | ||||
Derivatives | 4 | |||
Liabilities: | ||||
Derivatives | 4 | 3 | ||
Recurring basis | Level 2 | Domestic debt securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 269 | 292 | ||
Recurring basis | Level 2 | Foreign debt securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 57 | 43 | ||
Recurring basis | Level 2 | High yield securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 48 | 46 | ||
Recurring basis | Level 2 | Collateralized loan obligations | Short-term investments | ||||
Assets: | ||||
Trading securities | 16 | 15 | ||
Recurring basis | Level 3 | ||||
Assets: | ||||
Total assets | 31 | |||
Liabilities: | ||||
Contingent consideration | 15 | 13 | ||
Total liabilities | 15 | 13 | ||
Recurring basis | Level 3 | Long-term investments | ||||
Assets: | ||||
Long-term equity investment | 31 | |||
Recurring basis | Fair Value | ||||
Assets: | ||||
Total assets | 1,319 | 1,491 | ||
Liabilities: | ||||
Contingent consideration | 15 | 13 | ||
Total liabilities | 35 | 20 | ||
Recurring basis | Fair Value | Commodities | ||||
Assets: | ||||
Derivatives | 16 | 6 | ||
Liabilities: | ||||
Derivatives | 15 | 4 | ||
Recurring basis | Fair Value | Interest rate swaps | ||||
Liabilities: | ||||
Derivatives | 1 | |||
Recurring basis | Fair Value | Foreign currencies | ||||
Assets: | ||||
Derivatives | 4 | |||
Liabilities: | ||||
Derivatives | 4 | 3 | ||
Recurring basis | Fair Value | Long-term investments | ||||
Assets: | ||||
Long-term equity investment | 31 | |||
Recurring basis | Fair Value | Domestic equity securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 613 | 706 | ||
Recurring basis | Fair Value | Domestic equity securities | Other current assets | ||||
Assets: | ||||
Trading securities | 12 | 40 | ||
Recurring basis | Fair Value | Domestic debt securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 391 | 409 | ||
Recurring basis | Fair Value | Foreign equity securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 107 | 189 | ||
Recurring basis | Fair Value | Foreign equity securities | Other current assets | ||||
Assets: | ||||
Trading securities | 3 | 3 | ||
Recurring basis | Fair Value | Foreign debt securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 57 | 43 | ||
Recurring basis | Fair Value | High yield securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 55 | 56 | ||
Recurring basis | Fair Value | Money market funds held in trading accounts | Short-term investments | ||||
Assets: | ||||
Trading securities | 2 | 12 | ||
Recurring basis | Fair Value | Money market funds held in trading accounts | Other current assets | ||||
Assets: | ||||
Trading securities | 6 | 6 | ||
Recurring basis | Fair Value | Collateralized loan obligations | Short-term investments | ||||
Assets: | ||||
Trading securities | 16 | 15 | ||
Recurring basis | Fair Value | Other trading securities | Short-term investments | ||||
Assets: | ||||
Trading securities | 4 | 4 | ||
Recurring basis | Fair Value | Fixed income securities | Other current assets | ||||
Assets: | ||||
Trading securities | $ 2 | $ 2 |
Derivatives and Fair Value of_4
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. 26, 2020USD ($)agreementlbbu | Dec. 31, 2019USD ($)lbbugal | |
Equity future contracts | ||
Derivative commodity instruments | ||
Notional amounts | $ 6 | $ 0 |
Net commodity purchase contracts | Grain | ||
Derivative commodity instruments | ||
Nonmonetary notional amount | bu | 18 | 17 |
Net commodity sale contracts | Soybean oil | ||
Derivative commodity instruments | ||
Nonmonetary notional amount | lb | 72 | 132 |
Net commodity sale contracts | Heating oil | ||
Derivative commodity instruments | ||
Nonmonetary notional amount | gal | 12 | |
Foreign currencies | ||
Derivative commodity instruments | ||
Notional amounts | $ 55 | $ 78 |
Interest rate swaps | ||
Derivative commodity instruments | ||
Notional amounts | $ 400 | |
Number of derivative instruments entered into | agreement | 3 | |
Interest rate swaps | Weighted Average | ||
Derivative commodity instruments | ||
Fixed rate interest | 0.26% |
Derivatives and Fair Value of_5
Derivatives and Fair Value of Financial Instruments-Counterparty Risk (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020USD ($)item | Sep. 28, 2019USD ($) | Sep. 26, 2020USD ($)item | Sep. 28, 2019USD ($) | |
Commodities | Cost of sales | ||||
Derivatives | ||||
Gains (losses) on derivatives | $ 10 | $ (17) | $ 27 | $ (48) |
Foreign currencies | ||||
Derivatives | ||||
Number of counterparties | item | 3 | 3 | ||
Foreign currencies | Maximum | ||||
Derivatives | ||||
Credit risk associated with derivative contracts | $ 4 | |||
Foreign currencies | Cost of sales | ||||
Derivatives | ||||
Gains (losses) on derivatives | $ 2 | $ 1 | 15 | 5 |
Foreign currencies | Foreign currency gains (losses), net | ||||
Derivatives | ||||
Gains (losses) on derivatives | (3) | (2) | ||
Equity | Other investment income (loss), net | ||||
Derivatives | ||||
Gains (losses) on derivatives | $ (16) | 7 | $ (3) | |
Interest rate swaps | Interest expense | ||||
Derivatives | ||||
Gains (losses) on derivatives | $ (1) |
Derivatives and Fair Value of_6
Derivatives and Fair Value of Financial Instruments-Derivatives Fair Value (Details) - USD ($) $ in Millions | Sep. 26, 2020 | Dec. 31, 2019 |
Commodities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Margin account | $ 18 | $ 13 |
Derivative assets and liabilities, net basis | 19 | 15 |
Commodities | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | 16 | 6 |
Commodities | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | 15 | 4 |
Foreign currencies | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | 4 | |
Foreign currencies | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | 4 | $ 3 |
Interest rate swaps | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | $ 1 |
Stockholders' Equity and Accu_3
Stockholders' Equity and Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |||||||||
Remaining authorized repurchase amount | $ 65 | $ 65 | |||||||
Common shares repurchased (in shares) | 0 | 4,069 | |||||||
Changes in the components of other comprehensive loss (OCL), net of related taxes | |||||||||
Foreign currency translation adjustment | $ 5 | $ 2 | $ (11) | $ (9) | |||||
Unrecognized pension cost | 5 | 1 | 7 | 7 | |||||
Other comprehensive income (loss), net of tax | 10 | $ (19) | $ 5 | $ 3 | $ (6) | $ 1 | (4) | $ (2) | |
Components of accumulated other comprehensive loss, net of related taxes | |||||||||
Accumulated other comprehensive loss | (444) | (444) | $ (440) | ||||||
Cumulative unrecognized pension cost | |||||||||
Components of accumulated other comprehensive loss, net of related taxes | |||||||||
Accumulated other comprehensive loss | (64) | (64) | (71) | ||||||
Cumulative foreign currency translation adjustment | |||||||||
Components of accumulated other comprehensive loss, net of related taxes | |||||||||
Accumulated other comprehensive loss | $ (380) | $ (380) | $ (369) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Revenue Recognition | ||||
Net sales | $ 1,645 | $ 1,663 | $ 5,136 | $ 5,028 |
Transferred at point in time | Net sales | ||||
Revenue Recognition | ||||
Concentration risk percentage | 85.00% | 85.00% | 85.00% | 85.00% |
Products | ||||
Revenue Recognition | ||||
Net sales | $ 1,362 | $ 1,359 | $ 4,333 | $ 4,117 |
Other | ||||
Revenue Recognition | ||||
Net sales | 26 | 34 | 57 | 97 |
Pork | ||||
Revenue Recognition | ||||
Net sales | 466 | 423 | 1,380 | 1,318 |
Pork | Products | ||||
Revenue Recognition | ||||
Net sales | 391 | 381 | 1,205 | 1,165 |
Pork | Transportation | ||||
Revenue Recognition | ||||
Net sales | 2 | 6 | 7 | |
Pork | Energy | ||||
Revenue Recognition | ||||
Net sales | 65 | 35 | 145 | 122 |
Pork | Other | ||||
Revenue Recognition | ||||
Net sales | 8 | 7 | 24 | 24 |
CT&M | ||||
Revenue Recognition | ||||
Net sales | 880 | 913 | 2,917 | 2,744 |
CT&M | Products | ||||
Revenue Recognition | ||||
Net sales | 877 | 906 | 2,906 | 2,731 |
CT&M | Other | ||||
Revenue Recognition | ||||
Net sales | 3 | 7 | 11 | 13 |
Marine | ||||
Revenue Recognition | ||||
Net sales | 244 | 256 | 705 | 769 |
Marine | Transportation | ||||
Revenue Recognition | ||||
Net sales | 244 | 256 | 705 | 769 |
Sugar and Alcohol | ||||
Revenue Recognition | ||||
Net sales | 31 | 36 | 71 | 91 |
Sugar and Alcohol | Products | ||||
Revenue Recognition | ||||
Net sales | 26 | 32 | 65 | 86 |
Sugar and Alcohol | Energy | ||||
Revenue Recognition | ||||
Net sales | 5 | 4 | 6 | 5 |
Power | ||||
Revenue Recognition | ||||
Net sales | 21 | 30 | 51 | 92 |
Power | Energy | ||||
Revenue Recognition | ||||
Net sales | 21 | 30 | 51 | 92 |
All Other | ||||
Revenue Recognition | ||||
Net sales | 3 | 5 | 12 | 14 |
All Other | Products | ||||
Revenue Recognition | ||||
Net sales | 3 | 5 | 12 | 13 |
All Other | Transportation | ||||
Revenue Recognition | ||||
Net sales | 1 | |||
Segment Totals | ||||
Revenue Recognition | ||||
Net sales | 1,645 | 1,663 | 5,136 | 5,028 |
Segment Totals | Products | ||||
Revenue Recognition | ||||
Net sales | 1,297 | 1,324 | 4,188 | 3,995 |
Segment Totals | Transportation | ||||
Revenue Recognition | ||||
Net sales | 246 | 256 | 711 | 777 |
Segment Totals | Energy | ||||
Revenue Recognition | ||||
Net sales | 91 | 69 | 202 | 219 |
Segment Totals | Other | ||||
Revenue Recognition | ||||
Net sales | $ 11 | $ 14 | $ 35 | $ 37 |
Segment Information-Acquisition
Segment Information-Acquisitions and Dispositions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 28, 2020USD ($) | Sep. 26, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Segment Information | |||
Number of reportable segments | segment | 6 | ||
Goodwill | $ 164 | $ 164 | |
CLDP | CT&M | |||
Segment Information | |||
Intangible assets | $ 1 | ||
Goodwill | $ 0 |
Segment Information - Turkey (D
Segment Information - Turkey (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Segment Information | |||||||||
Total assets | $ 5,976 | $ 5,976 | $ 6,285 | ||||||
Net income (loss) | 147 | $ (26) | $ (103) | $ (7) | $ 58 | $ 57 | 18 | $ 108 | |
Turkey | Butterball | |||||||||
Segment Information | |||||||||
Total assets | 1,200 | 1,200 | $ 1,000 | ||||||
Net sales | 407 | 416 | 1,052 | 1,062 | |||||
Operating loss | (3) | (15) | (34) | (42) | |||||
Net income (loss) | $ (7) | $ (22) | $ (47) | $ (59) |
Segment Information-Information
Segment Information-Information by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 31, 2019 | |
Segment Information | |||||
Net sales | $ 1,645 | $ 1,663 | $ 5,136 | $ 5,028 | |
Operating Income (Loss) | 29 | (6) | 103 | 13 | |
Income (loss) from affiliates | (6) | (15) | (27) | (49) | |
Total assets | 5,976 | 5,976 | $ 6,285 | ||
Investment in and Advances to Affiliates | 698 | 698 | 735 | ||
Pork | |||||
Segment Information | |||||
Net sales | 466 | 423 | 1,380 | 1,318 | |
Operating Income (Loss) | 4 | (22) | 47 | (31) | |
Income (loss) from affiliates | (5) | (3) | (19) | ||
Investment in and Advances to Affiliates | 178 | 178 | 183 | ||
CT&M | |||||
Segment Information | |||||
Net sales | 880 | 913 | 2,917 | 2,744 | |
Operating Income (Loss) | 28 | 14 | 82 | 50 | |
Income (loss) from affiliates | (3) | (1) | (2) | (6) | |
Investment in and Advances to Affiliates | 230 | 230 | 237 | ||
Marine | |||||
Segment Information | |||||
Net sales | 244 | 256 | 705 | 769 | |
Operating Income (Loss) | 14 | (2) | (3) | 2 | |
Income (loss) from affiliates | 1 | 1 | 3 | 2 | |
Investment in and Advances to Affiliates | 32 | 32 | 32 | ||
Sugar and Alcohol | |||||
Segment Information | |||||
Net sales | 31 | 36 | 71 | 91 | |
Operating Income (Loss) | (1) | (1) | (4) | (9) | |
Income (loss) from affiliates | 1 | ||||
Investment in and Advances to Affiliates | 5 | 5 | 5 | ||
Power | |||||
Segment Information | |||||
Net sales | 21 | 30 | 51 | 92 | |
Operating Income (Loss) | 3 | 9 | 4 | 21 | |
Income (loss) from affiliates | 1 | 3 | |||
Investment in and Advances to Affiliates | 3 | 3 | 3 | ||
Turkey | |||||
Segment Information | |||||
Income (loss) from affiliates | (4) | (11) | (25) | (30) | |
Investment in and Advances to Affiliates | 250 | 250 | 275 | ||
All Other | |||||
Segment Information | |||||
Net sales | 3 | 5 | 12 | 14 | |
Operating Income (Loss) | 1 | 1 | 2 | ||
Segment Totals | |||||
Segment Information | |||||
Net sales | 1,645 | 1,663 | 5,136 | 5,028 | |
Operating Income (Loss) | 48 | (1) | 127 | 35 | |
Income (loss) from affiliates | (6) | (15) | (27) | (49) | |
Total assets | 4,574 | 4,574 | 4,684 | ||
Segment Totals | Pork | |||||
Segment Information | |||||
Total assets | 1,765 | 1,765 | 1,802 | ||
Segment Totals | CT&M | |||||
Segment Information | |||||
Total assets | 1,607 | 1,607 | 1,621 | ||
Segment Totals | Marine | |||||
Segment Information | |||||
Total assets | 504 | 504 | 554 | ||
Segment Totals | Sugar and Alcohol | |||||
Segment Information | |||||
Total assets | 147 | 147 | 139 | ||
Segment Totals | Power | |||||
Segment Information | |||||
Total assets | 296 | 296 | 283 | ||
Segment Totals | Turkey | |||||
Segment Information | |||||
Total assets | 250 | 250 | 275 | ||
Segment Totals | All Other | |||||
Segment Information | |||||
Total assets | 5 | 5 | 10 | ||
Corporate | |||||
Segment Information | |||||
Operating Income (Loss) | (19) | $ (5) | (24) | $ (22) | |
Total assets | $ 1,402 | $ 1,402 | $ 1,601 |