Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jul. 01, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | SEABOARD CORP /DE/ | ||
Entity Central Index Key | 88,121 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,042,059,795 | ||
Entity Common Stock, Shares Outstanding | 1,170,550 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net sales: | |||
Products (includes sales to affiliates of $1,123, $993, and $831) | $ 4,693 | $ 4,334 | $ 4,515 |
Services (includes sales to affiliates of $7, $8, and $4) | 1,009 | 961 | 973 |
Other | 107 | 84 | 106 |
Total net sales | 5,809 | 5,379 | 5,594 |
Cost of sales and operating expenses: | |||
Products | 4,298 | 3,992 | 4,244 |
Services | 879 | 822 | 866 |
Other | 83 | 68 | 88 |
Total cost of sales and operating expenses | 5,260 | 4,882 | 5,198 |
Gross income | 549 | 497 | 396 |
Selling, general and administrative expenses | 317 | 275 | 270 |
Operating income | 232 | 222 | 126 |
Other income (expense): | |||
Interest expense | (29) | (29) | (18) |
Interest income | 15 | 15 | 40 |
Interest income from affiliates | 22 | 24 | 29 |
Income (loss) from affiliates | (7) | 81 | 70 |
Other investment income (loss), net | 177 | 69 | (5) |
Foreign currency gains, net | 14 | 2 | 1 |
Miscellaneous, net | 3 | (2) | |
Total other income, net | 195 | 162 | 115 |
Earnings before income taxes | 427 | 384 | 241 |
Income tax expense | (181) | (70) | (69) |
Net earnings | 246 | 314 | 172 |
Less: Net income (loss) attributable to noncontrolling interests | 1 | (2) | (1) |
Net earnings attributable to Seaboard | $ 247 | $ 312 | $ 171 |
Earnings per common share | $ 211.01 | $ 266.50 | $ 146.44 |
Other comprehensive income (loss), net of income tax benefit (expense) of $3, $12, and $0: | |||
Foreign currency translation adjustment | $ (6) | $ (26) | $ (34) |
Unrealized gain on investments | 5 | 1 | |
Unrecognized pension cost | (4) | (1) | 9 |
Other comprehensive loss, net of tax | (5) | (26) | (25) |
Comprehensive income | 241 | 288 | 147 |
Less: Comprehensive income attributable to noncontrolling interests | 1 | (2) | (1) |
Comprehensive income attributable to Seaboard | $ 242 | $ 286 | $ 146 |
Average number of shares outstanding (in shares) | 1,170,550 | 1,170,550 | 1,170,550 |
Dividends declared per common share (in dollars per share) | $ 6 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other comprehensive income (loss), income tax benefit (expense) | $ 3 | $ 12 | $ 0 |
Products | |||
Sales to affiliates | 1,123 | 993 | 831 |
Services | |||
Sales to affiliates | $ 7 | $ 8 | $ 4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 116 | $ 77 |
Short-term investments | 1,576 | 1,277 |
Receivables: | ||
Trade | 299 | 269 |
Due from affiliates | 113 | 110 |
Notes receivable from affiliate | 7 | 163 |
Other | 92 | 99 |
Total receivables | 511 | 641 |
Allowance for doubtful accounts | (29) | (14) |
Net receivables | 482 | 627 |
Inventories | 780 | 762 |
Prepaid expenses | 94 | 44 |
Other current assets | 80 | 61 |
Total current assets | 3,128 | 2,848 |
Net property, plant and equipment | 1,077 | 1,006 |
Investments in and advances to affiliates | 851 | 773 |
Goodwill | 22 | 19 |
Other non-current assets | 83 | 109 |
Total assets | 5,161 | 4,755 |
Current liabilities: | ||
Notes payable to banks | 162 | 121 |
Current maturities of long-term debt | 53 | 17 |
Accounts payable | 256 | 194 |
Payables due to affiliates | 16 | 22 |
Accrued compensation and benefits | 118 | 118 |
Deferred revenue | 47 | 66 |
Deferred revenue from affiliates | 34 | 48 |
Accrued voyage costs | 35 | 52 |
Accrued commodity inventory | 6 | 35 |
Other current liabilities | 91 | 112 |
Total current liabilities | 818 | 785 |
Long-term debt, less current maturities | 482 | 499 |
Accrued pension liability | 128 | 121 |
Deferred income taxes | 112 | 77 |
Long-term income tax liability | 111 | |
Other liabilities and deferred credits | 102 | 98 |
Total non-current liabilities | 935 | 795 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,170,550 | 1 | 1 |
Accumulated other comprehensive loss | (354) | (304) |
Retained earnings | 3,750 | 3,465 |
Total Seaboard stockholders' equity | 3,397 | 3,162 |
Noncontrolling interests | 11 | 13 |
Total equity | 3,408 | 3,175 |
Total liabilities and stockholders' equity | $ 5,161 | $ 4,755 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, Authorized shares | 1,250,000 | 1,250,000 |
Common stock, issued shares | 1,170,550 | 1,170,550 |
Common stock, outstanding shares | 1,170,550 | 1,170,550 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net earnings (losses) | $ 246 | $ 314 | $ 172 |
Adjustments to reconcile net earnings to cash from operating activities: | |||
Depreciation and amortization | 118 | 102 | 91 |
Deferred income taxes | 39 | 47 | (10) |
Mandatory deemed repatriation tax | 112 | ||
Pay-in-kind interest and accretion on notes receivable from affiliates | (3) | (3) | (17) |
Reserve on notes receivable from affiliate | 16 | ||
Loss (income) from affiliates | 7 | (81) | (70) |
Dividends received from affiliates | 24 | 53 | 69 |
Other investment loss (income), net | (177) | (69) | 5 |
Other, net | (6) | 12 | 5 |
Changes in assets and liabilities, net of acquisition: | |||
Receivables, net of allowance | (12) | 18 | 119 |
Inventories | (21) | 6 | (35) |
Prepaid expenses | (51) | (4) | 3 |
Other current assets | (14) | 12 | (6) |
Current liabilities, exclusive of debt | (25) | 23 | 75 |
Other, net | 8 | (19) | 15 |
Net cash from operating activities | 245 | 427 | 416 |
Cash flows from investing activities: | |||
Purchase of short-term investments | (767) | (691) | (1,320) |
Proceeds from the sale of short-term investments | 606 | 710 | 526 |
Proceeds from the maturity of short-term investments | 59 | 34 | 29 |
Capital expenditures | (173) | (158) | (139) |
Proceeds from the sale of fixed assets | 5 | 47 | 48 |
Acquisition of business | (54) | (219) | |
Investments in and advances to affiliates, net | (87) | (71) | (119) |
Notes receivable issued to affiliates | (2) | (13) | |
Principal payments received on notes receivable from affiliates | 167 | 12 | |
Purchase of long-term investments | (12) | (31) | (28) |
Other, net | (8) | 6 | (1) |
Net cash from investing activities | (266) | (374) | (1,004) |
Cash flows from financing activities: | |||
Notes payable to banks, net | 45 | (25) | 83 |
Proceeds from long-term debt | 38 | 3 | 522 |
Principal payments of long-term debt | (17) | (5) | |
Dividends paid | (7) | ||
Other, net | (1) | ||
Net cash from financing activities | 58 | (27) | 605 |
Effect of exchange rate change on cash and cash equivalents | 2 | 1 | (3) |
Net change in cash and cash equivalents | 39 | 27 | 14 |
Cash and cash equivalents at beginning of year | 77 | 50 | 36 |
Cash and cash equivalents at end of year | $ 116 | $ 77 | $ 50 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interest | Total |
Balances at Dec. 31, 2014 | $ 1 | $ (253) | $ 2,982 | $ 5 | $ 2,735 |
Comprehensive income: | |||||
Net earnings (losses) | 171 | 1 | 172 | ||
Other comprehensive loss, net of tax | (25) | (25) | |||
Balances at Dec. 31, 2015 | 1 | (278) | 3,153 | 6 | 2,882 |
Comprehensive income: | |||||
Net earnings (losses) | 312 | 2 | 314 | ||
Other comprehensive loss, net of tax | (26) | (26) | |||
Addition to noncontrolling interests | 5 | 5 | |||
Balances at Dec. 31, 2016 | 1 | (304) | 3,465 | 13 | 3,175 |
Increase (Decrease) in Stockholders' Equity | |||||
Adoption of accounting guidance | (45) | 45 | |||
Comprehensive income: | |||||
Net earnings (losses) | 247 | (1) | 246 | ||
Other comprehensive loss, net of tax | (5) | (5) | |||
Reduction to noncontrolling interests | (1) | (1) | |||
Dividends on common stock | (7) | (7) | |||
Balances at Dec. 31, 2017 | $ 1 | $ (354) | $ 3,750 | $ 11 | $ 3,408 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note Operations of Seaboard Corporation and its Subsidiaries Seaboard Corporation and its subsidiaries (“Seaboard”) are a diverse global agribusiness and transportation company. In the United States (“U.S.”), Seaboard is primarily engaged in pork production and processing and ocean transportation. Overseas, Seaboard is primarily engaged in commodity merchandising, grain processing, sugar production and electric power generation. Seaboard also has an interest in a turkey operation. Seaboard Flour LLC and SFC Preferred, LLC, entities owned by the chief executive officer and his family, hold approximately 76% of Seaboard’s outstanding common stock. Principles of Consolidation and Investments in Affiliates The consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in non-controlled affiliates where we have significant influence are accounted for by the equity method. Financial information from certain foreign subsidiaries and affiliates is reported on a one- to three-month lag, depending on the specific entity. Short-Term Investments Short-term investments are retained for future use in the business. Investments held by Seaboard that are categorized as trading securities are reported at their estimated fair value with any unrealized gains and losses included in other investment income (loss), net on the consolidated statements of comprehensive income. Purchases and sales are recorded on a settlement date basis. Gains and losses on sale of investments are generally based on the specific identification method. Accounts Receivable Accounts receivable are recorded at the invoiced amount and generally do not bear interest. The Power segment, however, collects interest on certain past due accounts, and the Commodity Trading and Milling (“CT&M”) segment provides extended payment terms for certain customers in certain countries due to local market conditions. The allowance for doubtful accounts is Seaboard’s best estimate of the amount of probable credit losses. For most operating segments, Seaboard uses a specific identification approach to determine, in management’s judgment, the collection value of certain past due accounts based on contractual terms. For the Marine segment, the allowance for doubtful accounts is based on an aging percentage methodology primarily based on historical write-off experience. Seaboard reviews its allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Inventories Seaboard uses the lower of last-in, first-out (“LIFO”) cost or market for determining inventory cost of live hogs, fresh pork product and related materials. Grain, flour and feed inventories at foreign milling operations are valued at the lower of weighted average cost and net realizable value. All other inventories are valued at the lower of first-in, first-out (“FIFO”) cost and net realizable value. Property, Plant and Equipment Property, plant and equipment are carried at cost and are being depreciated on the straight-line method over useful lives, ranging from 3 to 30 years. Property, plant and equipment leases that are deemed to be installment purchase obligations have been capitalized and included in the property, plant and equipment accounts. Routine and planned major maintenance, repairs and minor renewals are expensed as incurred, while major renewals and improvements are capitalized. Impairment of Long-Lived Assets Long-lived assets, primarily property, plant and equipment, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Notes Receivable from Affiliates Seaboard monitors the credit quality of notes receivable from its affiliates by obtaining and reviewing financial information for these affiliates on a monthly basis and by having Seaboard representatives serve on the Board of Directors of these affiliates. If based on current information and events it is probable that Seaboard will be unable to collect all amounts due according to the contractual terms of the notes receivable from affiliates and an amount can be reasonably estimated, Seaboard will write down the notes receivable to estimated realizable value. Goodwill and Other Intangible Assets Goodwill is assessed annually for impairment by each reporting unit at the quarter end closest to the anniversary date of the acquisition, or more frequently if circumstances indicate that impairment is likely. Separable intangible assets with finite lives are amortized over their estimated useful lives. Any one event or a combination of events such as change in the business climate, a negative change in relationships with significant customers and changes to strategic decisions, including decisions to expand made in response to economic or competitive conditions, could require an interim assessment prior to the next required annual assessment. Goodwill is primarily related to the repurchase in 2007 of a noncontrolling interest of Seaboard Foods LLC (“Seaboard Foods”) in the Pork segment for a total of $12 million. Due to acquisitions during 2016 in the Pork segment and CT&M segment, goodwill increased $6 million and $1 million, respectively. Also, the $3 million change in goodwill during 2017 is related to an acquisition in the CT&M segment. Based on the annual assessment conducted by these reporting units during 2017, there were no impairment charges recorded for the year ended December 31, 2017. Accrued Self-Insurance Seaboard is self-insured for certain levels of workers’ compensation, health care coverage, property damage, vehicle, product recall and general liability. The cost of these self-insurance programs is accrued based upon estimated settlements for known and anticipated claims. Changes in estimates to previously recorded reserves are reflected in current operating results. Asset Retirement Obligation Seaboard has recorded long-lived assets and a related liability for the asset retirement obligation costs associated with the closure of the hog lagoons it is legally obligated to close in the future should Seaboard cease operations or plan to close such lagoons voluntarily in accordance with a changed operating plan. Based on detailed assessments and appraisals obtained to estimate the future asset retirement obligation costs, Seaboard recorded the present value of the projected costs in non-current other liabilities on the consolidated balance sheets with the retirement asset depreciated over the economic life of the related asset. The following table shows the changes in the asset retirement obligation during 2017 and 2016: Years ended December 31, (Millions of dollars) 2017 2016 Beginning balance $ 19 $ 18 Accretion expense 2 1 Liability for additional lagoons placed in service 1 — Ending balance $ 22 $ 19 Income Taxes Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Revenue Recognition As a result of a marketing agreement with Triumph Foods, LLC (“Triumph”) and Seaboard Triumph Foods, LLC (“STF”), Seaboard’s sales prices for its pork products included in product revenues are primarily based on a margin sharing arrangement that considers the average sales price and mix of products sold from Seaboard’s, Triumph’s and STF’s hog processing plants. Seaboard earns a fee for marketing the pork products of Triumph and STF, and recognizes this fee as service revenue. Revenues for the CT&M segment are recognized when the commodity is delivered to the customer, collection is reasonably assured and the sales price is fixed or determinable. Revenues for cargo services in the Marine segment are recognized ratably over the transit time for each voyage, with expenses associated with cargo services recognized as incurred. Revenues for all other commercial exchanges are recognized at the time products are shipped or delivered in accordance with shipping terms or services rendered, the customer takes ownership and assumes risk of loss, collection is reasonably assured and the sales price is fixed or determinable. Use of Estimates The preparation of the consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to allowance for doubtful accounts, valuation of inventories, impairment of long-lived assets, potential write down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes and accrued pension liability. Actual results could differ from those estimates. Earnings Per Common Share Earnings per common share are based upon the weighted average shares outstanding during the period. Basic and diluted earnings per share are the same for all periods presented. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, management considers all demand deposits, overnight investments and other investments with original maturities less than three months as cash equivalents. The following table shows the cash paid for interest and income taxes: Years ended December 31, (Millions of dollars) 2017 2016 2015 Interest, net of interest capitalized $ 30 $ 29 $ 17 Income taxes, net of refunds 32 31 60 Supplemental Non-Cash Transactions Seaboard had notes receivable from affiliates that accrued pay-in-kind interest income, primarily from one affiliate. On January 4, 2016, the interest on this note receivable was modified to eliminate future pay-in-kind interest as discussed in Note 4. Non-cash, pay-in-kind interest income and accretion of discount recognized on these notes receivable for the years ended December 31, 2017, 2016 and 2015 was $3 million, $3 million and $17 million, respectively. On October 28, 2016, Seaboard obtained control of Belarina Alimentos S. A., a flour production business in Brazil (“Belarina”). No cash or other consideration was transferred to the other shareholder whose ownership was diluted through revision of the shareholders agreement to restructure the affiliate debt and equity of Belarina. See Note 12 for the purchase price allocation table and other details. Foreign Currency Transactions and Translation Seaboard has operations in several foreign countries, and the currencies of the countries fluctuate in relation to the U.S. dollar. Certain of the major contracts and transactions, however, are denominated in U.S. dollars. In addition, the value of the U.S. dollar fluctuates in relation to the currencies of countries where certain of Seaboard’s foreign subsidiaries and affiliates primarily conduct business. These fluctuations result in exchange gains and losses. The activities of these foreign subsidiaries and affiliates are primarily conducted with U.S. subsidiaries or operate in hyper-inflationary environments. As a result, the financial statements of certain foreign subsidiaries and affiliates are re-measured using the U.S. dollar as the functional currency. Seaboard’s Sugar segment, four consolidated subsidiaries (CT&M segment businesses in Brazil, Canada, Guyana and Zambia) and eleven non-controlled, non-consolidated affiliates (a Marine segment business in Jamaica and CT&M segment businesses in Australia, Botswana, Colombia, Jamaica, Kenya, Lesotho, Morocco, South Africa, Turkey and Zambia) use local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at year-end exchange rates, and income and expenses are translated at average rates. Translation gains and losses are recorded as components of other comprehensive income (loss). For the consolidated subsidiaries and non-consolidated affiliates, U.S. dollar denominated net asset or liability conversions to the local currency are recorded through income. Derivative Instruments and Hedging Activities Seaboard recognizes all derivatives as either assets or liabilities at their fair values. Accounting for changes in the fair value of a derivative depends on its designation and effectiveness. Derivatives qualify for treatment as hedges for accounting purposes when there is a high correlation between the change in fair value of the instrument and the related change in value of the underlying commitment. Additionally, in order to designate a derivative financial instrument as a hedge for accounting purposes, extensive record keeping is required. For derivatives that qualify as hedges for accounting purposes, the change in fair value has no net impact on earnings, to the extent the derivative is considered effective, until the hedged transaction affects earnings. For derivatives that are not designated as hedging instruments for accounting purposes, or for the ineffective portion of a hedging instrument, the change in fair value affects current period net earnings. Seaboard uses derivative instruments to manage various types of market risks, primarily including commodity futures and option contracts, foreign currency exchange agreements, interest rate exchange agreements and equity future contracts. While management believes each of these instruments primarily are entered into in order to effectively manage various market risks, as of December 31, 2017, none of the derivatives were designated and accounted for as hedges, primarily as a result of the extensive record-keeping requirements. From time to time, Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. Recently Issued Accounting Standards Adopted On December 31, 2017, Seaboard early adopted guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The adoption of this new guidance did not have a material impact on Seaboard’s financial position or net earnings. On January 1, 2017, Seaboard adopted guidance to simplify the subsequent measurement of inventory, excluding inventory measured using LIFO or the retail inventory method. Under the new standard, inventory is valued at the lower of cost and net realizable value. The adoption of this new guidance did not have a material impact on Seaboard’s financial position or net earnings. Recently Issued Accounting Standards Not Yet Adopted In March 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that will require the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in inventory. The other components of net periodic benefit cost will be presented outside of operating income and will not be capitalizable. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In February 2016, the FASB issued guidance that a lessee should record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The recognition, measurement, and presentation of expenses and cash flows arising from a financing lease have not significantly changed from the previous guidance. For operating leases, a lessee is required to: (1) recognize a ROU asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. Seaboard will adopt this guidance on January 1, 2019, for all consolidated subsidiaries. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. Seaboard is in the preliminary stages of its assessment of the effect the guidance will have on its existing accounting policies and the consolidated financial statements, but expects there will be an increase in assets and liabilities on the consolidated balance sheets at adoption due to the recording of ROU assets and corresponding lease liabilities, which will likely be material. See Note 10 for information about Seaboard’s lease obligations. In January 2016, the FASB issued guidance that requires entities to measure equity investments, other than those accounted for using the equity method of accounting, at fair value and recognize any changes in fair value in net income if a readily determinable fair value exists. For investments without readily determinable fair values, the cost method of accounting is eliminated. An entity may elect to record these equity investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The new guidance is effective for interim and annual periods beginning after December 15, 2017. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In May 2014, the FASB issued guidance to develop a single, comprehensive revenue recognition model for all contracts with customers. This guidance requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods and services. This guidance supersedes nearly all existing revenue recognition guidance under GAAP. Seaboard will adopt this guidance on January 1, 2018, using the cumulative effect transition method, where any cumulative effect of initially adopting the guidance is recognized at the date of adoption. Based on management’s current assessment, the majority of Seaboard’s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings, although it anticipates expansion of consolidated financial statement disclosures in order to comply with the guidance. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments | |
Investments | Note 2 - Investments The following is a summary of the amortized cost and estimated fair value of short-term investments categorized as trading securities at the end of each year: December 31, 2017 December 31, 2016 Amortized Fair Amortized Fair (Millions of dollars) Cost Value Cost Value Domestic equity securities 619 752 444 482 Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 438 439 437 437 Foreign equity securities 266 319 198 199 Collateralized loan obligations 29 29 25 26 High yield securities 20 21 114 115 Money market funds held in trading accounts 10 10 13 13 Other trading securities 5 6 5 5 Total trading short-term investments $ 1,387 $ 1,576 $ 1,236 $ 1,277 The change in unrealized gains (losses) related to trading securities still held at the end of the respective reporting period was $146 million, $49 million and $(12) million for the years ended December 31, 2017, 2016 and 2015, respectively. Seaboard had $114 million of equity securities denominated in foreign currencies at December 31, 2017, with $48 million in euros, $25 million in Japanese yen, $20 million in the British pound, $6 million in the Swiss franc and the remaining $15 million in various other currencies. Seaboard had $91 million of equity securities denominated in foreign currencies at December 31, 2016, with $35 million in euros, $20 million in Japanese yen, $16 million in the British pound, $6 million in the Swiss franc and the remaining $14 million in various other currencies. Also, money market funds included less than $1 million and $1 million denominated in various foreign currencies at December 31, 2017 and 2016, respectively. Subsequent to year-end, Seaboard sold $314 million of its domestic debt securities to fund an acquisition in January 2018. See Note 12 for further information on this acquisition. In addition to its short-term investments, Seaboard also has trading securities related to Seaboard’s deferred compensation plans classified in other current assets on the consolidated balance sheets. See Note 8 for information on the types of trading securities held related to the deferred compensation plans. See Note 9 for a discussion of assets held in conjunction with investments related to Seaboard’s defined benefit pension plan. Seaboard had $6 million and $28 million of cost method investments classified in other non-current assets on the consolidated balance sheets as of December 31, 2017 and 2016, respectively. During 2017, Seaboard increased its ownership interest in a grain trading and poultry business in Morocco to 19.4%, which resulted in the original $18 million being reclassified as an equity method investment. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Inventories | Note 3 - Inventories The following table is a summary of inventories at the end of each year: December 31, (Millions of dollars) 2017 2016 At lower of LIFO cost or market: Live hogs and materials $ 313 $ 273 Fresh pork and materials 28 34 341 307 LIFO adjustment (31) (21) Total inventories at lower of LIFO cost or market 310 286 At lower of FIFO cost and net realizable value: Grains, oilseeds and other commodities 253 279 Sugar produced and in process 38 30 Other 90 62 Total inventories at lower of FIFO cost and net realizable value 381 371 Grain, flour and feed at lower of weighted average cost and net realizable value 89 105 Total inventories $ 780 $ 762 The use of the LIFO method decreased 2017 net earnings $6 million ($5.40 per common share) and increased 2016 and 2015 net earnings $5 million ($3.92 per common share), and $5 million ($4.39 per common share), respectively. If the FIFO method had been used for certain inventories of the Pork segment, inventories would have been higher $31 million and $21 million as of December 31, 2017 and 2016, respectively. |
Investments in and Advances to
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | Note 4 - Investments in and Advances to Affiliates and Notes Receivable from Affiliates Seaboard has several investments in and advances to non-controlled, non-consolidated affiliates that are all accounted for using the equity method of accounting. Financial information from certain foreign affiliates is reported on a one- to three-month lag, depending on the specific entity. The Turkey segment represents Seaboard’s 50% noncontrolling voting interest in Butterball, LLC (“Butterball”). Butterball is a vertically integrated producer, processor and marketer of branded and non-branded turkey products. As of December 31, 2017, Butterball had intangible assets of $111 million for trade name and $74 million for goodwill. In connection with its initial investment in Butterball in December 2010, Seaboard provided Butterball with a $100 million unsecured subordinated loan (the “subordinated loan”) with a seven-year maturity and interest of 15% per annum, comprised of 5% payable in cash semi-annually, plus 10% pay-in-kind interest, compounded semi-annually, which accumulated and was paid at maturity. Also in connection with providing the subordinated loan, Seaboard received detachable warrants, which upon exercise for a nominal price, would enable Seaboard to acquire an additional 5% equity interest in Butterball. In January 2016, the interest on the subordinated loan was modified to 10% per annum, payable in cash semi-annually and the warrants were also modified, whereby Seaboard can exercise these warrants at any time after December 31, 2018 or prior to December 31, 2025 after which time the warrants expire. Butterball has the right to repurchase the warrants for fair market value. The warrant agreement essentially provides Seaboard with a 52.5% economic interest, as these warrants are in substance an additional equity interest. Therefore, Seaboard records 52.5% of Butterball’s earnings as income from affiliates in the consolidated statements of comprehensive income. However, all significant corporate governance matters would continue to be shared equally between Seaboard and its partner in Butterball even if the warrants were exercised, unless Seaboard already owned a majority of the voting rights at the time of exercise. The warrants qualify for equity treatment under accounting standards. Accordingly, as of December 2010, the warrants were allocated a value of $11 million, classified as investments in and advances to affiliates on the consolidated balance sheets, and the subordinated loan was allocated a discounted value of $89 million, classified as notes receivable from affiliates on the consolidated balance sheets, of the total $100 million subordinated financing discussed above. The discount on the subordinated loan was being accreted monthly in interest income from affiliates through the maturity date of December 6, 2017. In December 2017, Butterball fully repaid the outstanding note receivable balance of $164 million and accrued pay-in-kind interest of $6 million to Seaboard. At December 31, 2016, the recorded balance of this note receivable was $161 million. During 2011, Seaboard provided a term loan of $13 million to Butterball to pay off capital leases for certain fixed assets that originally were financed with third parties. The effective interest rate on this term loan is approximately 12% and originally matured on January 31, 2018. Due to a pending property sale, Seaboard granted a six-month extension on the maturity of this note to July 31, 2018. As of December 31, 2017 and 2016, the balance of the term loan included in notes receivable from affiliates was $4 million and $8 million, respectively. In 2017, Butterball closed its further processing plant in Montgomery, Illinois, resulting in charges primarily related to impaired fixed assets and accrued severance. Seaboard’s proportionate share of these charges, recognized in income (loss) from affiliates, was $18 million in 2017, of which $6 million was during the fourth quarter related to further impaired fixed assets on the pending sale of the plant that occurred in January 2018. Butterball had operating income in 2017, 2016 and 2015 of $15 million, $162 million and $231 million, respectively, and other condensed financial information for each of Seaboard’s years ended was as follows: Turkey Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 1,670 $ 1,813 $ 1,902 Net income (loss) $ (8) $ 139 $ 195 Total assets $ 999 $ 1,154 $ 1,087 Total liabilities $ 400 $ 529 $ 541 Total equity $ 599 $ 625 $ 546 The Pork segment has a 50% noncontrolling interest in Daily’s Premium Meats, LLC (“Daily’s”) and STF. Daily’s produces and markets raw and pre-cooked bacon and ham at its three further processing plants located in Utah, Montana and Missouri. Seaboard, STF and Triumph, the other partner, each supply raw product to Daily’s. STF operates a new pork processing plant in Iowa, which began operations in September 2017. Seaboard and Triumph formed STF in May 2015 with equal ownership of 50%. In connection with the development and operation of the plant, Seaboard contributed $73 million, $51 million and $26 million during 2017, 2016 and 2015, respectively. Also, Seaboard agreed to provide a portion of the hogs to be processed at the plant. The Pork segment currently has a business relationship with Triumph under which Seaboard markets substantially all of the pork products produced at Triumph’s plant in Missouri and STF’s plant in Iowa. In addition to supplying raw materials and providing marketing services to these affiliates, the Pork segment also transferred fixed assets and other costs totaling $14 million in 2017 related to an enterprise resource planning system that is used by Seaboard, Triumph, Daily’s and STF. Combined condensed financial information of these entities for each of Seaboard’s years ended was as follows: Pork Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 441 $ 319 $ 295 Net income (loss) $ (21) $ 22 $ 22 Total assets $ 596 $ 364 $ 247 Total liabilities $ 138 $ 14 $ 17 Total equity $ 458 $ 350 $ 230 The CT&M segment has noncontrolling interests in foreign businesses conducting flour, maize and feed milling, baking operations, poultry production and processing, and agricultural commodity trading businesses. As of December 31, 2017, the location and percentage ownership of CT&M’s affiliates were as follows: Botswana (49%), Democratic Republic of Congo (“DRC”) (50%), Gambia (50%), Kenya (35%-49%), Lesotho (50%), Morocco (17.7%-19.4%), Nigeria (25%-48.33%), South Africa (30%-50%), Tanzania (49%) and Zambia (49%) in Africa, Colombia (40%-42%), Ecuador (25%-50%), Guyana (50%), and Peru (50%) in South America, Jamaica (50%) and Haiti (23.33%) in the Caribbean, Turkey (25%) in Europe, Australia (22.5%-25%), Canada (45%), and United States (35.42%). Seaboard generally is the primary provider of choice for grains, feed and supplies purchased by these non-controlled affiliates. As Seaboard conducts its agricultural commodity trading business with third parties, consolidated subsidiaries and affiliates on an interrelated basis, cost of sales on affiliates cannot be clearly distinguished without making numerous assumptions, primarily with respect to mark-to-market accounting for commodity derivatives. During 2017, the CT&M segment invested an additional $7 million in a grain trading and poultry business in Morocco. This investment increased Seaboard’s ownership interest in that business to 19.4% and, as a result, Seaboard changed its accounting method from the cost method to equity method effective on the date of the additional investment. This investment is reported on a three-month lag basis, and therefore Seaboard’s first proportionate share of earnings from this investment was recognized in the third quarter of 2017. The CT&M segment has a 50% noncontrolling interest in a bakery located in the DRC. Seaboard’s investment balance is zero. As part of its original investment, Seaboard has an interest bearing long-term note receivable from this affiliate that had a principal and interest balance of approximately $15 million and $19 million, net of reserves, at December 31, 2017 and 2016, respectively, all classified as long-term in other non-current assets given uncertainty of the timing of payments in the future. The note receivable is 50% guaranteed by the other shareholder in the entity. Based on continued operating losses and revised cash flow forecasts, Seaboard reserved $16 million in bad debt expense within selling, general and administrative expenses in the consolidated statement of comprehensive income for the year ended December 31, 2016. There was no tax benefit from this transaction. Beginning with the third quarter of 2017, Seaboard recorded this entity’s current period losses of $4 million against the note receivable. In September 2017, Seaboard reached an agreement to amend the note to further extend the term and match payments to cash flow estimates. If the future long-term cash flows of this bakery do not improve, more of the recorded value of the note receivable from affiliate could be deemed uncollectible in the future, which could result in a further charge to earnings. The CT&M segment had a 50% noncontrolling interest in Belarina, a flour production business in Brazil, which it accounted for using the equity method of accounting prior to October 28, 2016, the date Seaboard obtained 98% of the equity ownership and control of Belarina. Seaboard accounted for this transaction as a business combination achieved in stages as discussed further in Note 12 to the consolidated financial statements. As an equity method affiliate, Seaboard had contributed a total of $63 million in investments and advances and a $13 million long-term loan, including investment and advances and pay-in-kind interest accretion totaling $14 million and $29 million for the years ended December 31, 2016 and 2015, respectively. Seaboard recorded total losses from affiliate, which included reserves, of $10 million and $60 million related to this investment in 2016 and 2015, respectively, and currency translation adjustment gains (losses) included in other comprehensive income (loss) of $(4) million and $5 million, respectively. Due to the extent of these losses, Seaboard had previously fully reserved all advances and long-term receivable, and as such, Seaboard’s investment, advances and long-term note receivable were zero as of December 31, 2015. Seaboard also had a gross trade receivable due from Belarina related to sales of grain and supplies of $17 million as of December 31, 2015, net of a reserve of $9 million based on an analysis of collectability and working capital. The net trade receivable balance was effectively settled as the entity is now consolidated. During the first quarter of 2016, the CT&M segment provided a $12 million loan to a Peruvian affiliate. The Peruvian affiliate repaid the loan in the third quarter of 2016. Interest was payable monthly and the principal due on August 31, 2017, with no prepayment penalty. During the fourth quarter of 2015, Seaboard contributed $13 million in cash, a small amount of other assets, certain employees and rights to sell certain agricultural commodities that Seaboard had previously sold through its subsidiary, PS International, LLC, for a 40% noncontrolling interest in a commodity trading business in Atlanta, Georgia. Also in 2015, Seaboard invested $10 million in an oilseed crushing business in the Republic of Turkey for a 25% noncontrolling interest, $8 million in a flour milling business in Botswana for a 49% noncontrolling interest, and $10 million for a 45% noncontrolling interest in a commodity trading and flour milling business in Uruguay. At December 31, 2017, Seaboard’s carrying value of certain of CT&M segment’s investments in affiliates was more than its share of the affiliates’ book value by $49 million. The excess is attributable primarily to the valuation of property, plant and equipment and intangible assets. The amortizable assets are being amortized to income (loss) from affiliates over the remaining life of the assets. Combined condensed financial information of these entities for each of Seaboard’s years ended was as follows: Commodity Trading and Milling Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 2,907 $ 2,871 $ 2,321 Net income (loss) $ 23 $ (6) $ (52) Total assets $ 1,793 $ 1,201 $ 1,265 Total liabilities $ 1,150 $ 734 $ 809 Total equity $ 643 $ 467 $ 456 The Marine segment has a 21% noncontrolling interest in a cargo terminal business in Jamaica and a 36% noncontrolling interest in a holding company that owns a Caribbean start-up terminal operation after investing $7 million of cash and converting an $8 million note receivable to equity during 2016. During 2017, the holding company’s terminal operations encountered the loss of a customer and defaulted on certain third-party debt obligations. In addition, third-party engineering studies identified significant unexpected construction modifications needed for the terminal operation. As a result, Seaboard evaluated its investment in affiliate and receivables for impairment and recorded a $5 million charge on its investment, a $1 million charge on its convertible note receivable and a $3 million allowance on its affiliate receivables. The holding company is investigating various strategic alternatives, such as additional capital calls, restructuring of the third-party debt and restructuring of the affiliate equity and receivables, which includes the deferral of all affiliated receivable payments until such future time as cash flow is sufficient to pay all third-party debt. If future long-term cash flows do not improve, there is a possibility that there could be additional charges. Both investments are reported on a three-month lag. At December 31, 2017, Seaboard’s carrying value of certain of Marine segment’s investments in affiliates was less than its share of the affiliates’ book value by $26 million. The difference is attributable primarily to the valuation of property, plant and equipment and impairments taken by Seaboard, but not the respective entity. Combined condensed financial information of these entities for each of Seaboard’s years ended was as follows: Marine Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 58 $ 47 $ 38 Net income $ 5 $ 7 $ 11 Total assets $ 229 $ 277 $ 148 Total liabilities $ 114 $ 109 $ 30 Total equity $ 115 $ 168 $ 118 The Sugar segment has two noncontrolling interests in sugar-related businesses in Argentina (46% and 50%, respectively). Combined condensed financial information of these entities for each of Seaboard’s years ended was as follows: Sugar Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 10 $ 10 $ 9 Net income $ 2 $ 3 $ 2 Total assets $ 10 $ 10 $ 9 Total liabilities $ 2 $ 2 $ 2 Total equity $ 8 $ 8 $ 7 The Power segment has a 29.9% noncontrolling interest in an electricity generating facility and two smaller energy-related businesses (45% and 50%, respectively), all in the Dominican Republic. During the second quarter of 2015, Seaboard invested an additional $10 million in a business operating a 300 megawatt electricity generating facility in the Dominican Republic that increased Seaboard's ownership interest to 29.9% from less than 20% and changed its method of accounting from a cost method investment to an equity method investment. This change in accounting required Seaboard at the time to present its prior period financial results to reflect the equity method of accounting from the date of the initial investment. Combined condensed financial information of these entities for each of Seaboard’s years ended was as follows: Power Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 105 $ 146 $ 141 Net income $ 23 $ 14 $ 12 Total assets $ 265 $ 261 $ 327 Total liabilities $ 145 $ 175 $ 219 Total equity $ 120 $ 86 $ 108 |
Net Property, Plant and Equipme
Net Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Net Property, Plant and Equipment | |
Net Property, Plant and Equipment | Note 5 - Net Property, Plant and Equipment The following table is a summary of property, plant and equipment at the end of each year: Useful December 31, (Millions of dollars) Lives 2017 2016 Land and improvements - 15 years $ 224 $ 214 Buildings and improvements 30 years 525 486 Machinery and equipment - 20 years 1,253 1,142 Vessels and vehicles - 18 years 136 140 Office furniture and fixtures 5 years 34 32 Construction in progress 56 58 2,228 2,072 Accumulated depreciation and amortization (1,151) (1,066) Net property, plant and equipment $ 1,077 $ 1,006 Seaboard’s capitalized interest on construction in progress projects was $4 million and $4 million for the years ended December 31, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | Note 6 - Income Taxes On December 22, 2017, the President of the U.S. signed into law the Tax Cuts and Job Act (the “2017 Tax Act”). The 2017 Tax Act changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on mandatory deemed repatriated earnings of foreign subsidiaries. The 2017 Tax Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. In December 2017, the Securities and Exchange Commission (“SEC”) issued guidance that permits the use of provisional amounts when the necessary information is not available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. Seaboard has recognized the provisional tax impacts related to mandatory deemed repatriated earnings and the revaluation of deferred tax assets and liabilities in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ, possibly materially, from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions Seaboard has made, additional regulatory guidance that may be issued, and actions Seaboard may take as a result of the 2017 Tax Act. The accounting is expected to be complete during the fourth quarter of 2018 when the 2017 U.S. corporate income tax return is filed. Beginning in 2018, the 2017 Tax Act also imposes two new U.S. tax base erosion provisions, the global intangible low-taxed income (“GILTI”) provision and the base-erosion and anti-abuse tax (“BEAT”) provision. Seaboard will account for the GILTI and BEAT taxes in the period incurred, and therefore has not provided any deferred tax impacts in its consolidated financial statements for the year ended December 31, 2017. Income taxes attributable to continuing operations for the years ended December 31, 2017, 2016 and 2015 differed from the amounts computed by applying the statutory U.S. Federal income tax rate of 35% to earnings before income taxes excluding noncontrolling interests for the following reasons: Years ended December 31, (Millions of dollars) 2017 2016 2015 Computed “expected” tax expense excluding noncontrolling interests $ 150 $ 134 $ 84 Adjustments to tax expense attributable to: Foreign tax differences (22) (14) 22 Tax-exempt income — (15) (11) State income taxes, net of federal benefit 9 5 1 Repatriation tax 112 — — Effect on deferreds of federal rate reduction (47) — — Federal tax credits (18) (31) (16) Domestic manufacturing deduction (2) (5) (8) Other (1) (4) (3) Total income tax expense $ 181 $ 70 $ 69 Certain of Seaboard's foreign operations are subject to no income tax or a tax rate that is lower than the U.S. corporate tax rate. Fluctuation of earnings or losses incurred from certain foreign operations conducting business in these jurisdictions impact the mix of taxable earnings for each fiscal year. Earnings before income taxes consisted of the following: Years ended December 31, (Millions of dollars) 2017 2016 2015 United States $ 273 $ 272 $ 196 Foreign 155 110 44 Total earnings excluding noncontrolling interests 428 382 240 Net loss (income) attributable to noncontrolling interests 1 (2) (1) Total earnings before income taxes $ 427 $ 384 $ 241 The components of total income taxes were as follows: Years ended December 31, (Millions of dollars) 2017 2016 2015 Current: Federal $ 118 $ (1) $ 52 Foreign 19 21 20 State and local 2 7 6 Deferred: Federal 20 36 (14) Foreign 10 4 8 State and local 12 3 (3) Income tax expense 181 70 69 Unrealized changes in other comprehensive loss (3) (12) — Total income taxes $ 178 $ 58 $ 69 At December 31, 2017, Seaboard recorded its estimated tax on mandatory deemed repatriated earnings consisting of $111 million of long-term income tax liability, payable over eight years, and $1 million of income taxes payable. As of December 31, 2017 and 2016, Seaboard had income taxes receivable of $51 million and $48 million, respectively, primarily related to domestic tax jurisdictions, and had income taxes payable of $3 million and $6 million, respectively, primarily related to foreign tax jurisdictions. Components of the net deferred income tax liability at the end of each year were as follows: December 31, (Millions of dollars) 2017 2016 Deferred income tax liabilities: Depreciation $ 92 $ 112 Domestic partnerships 92 69 LIFO 3 10 Cash basis farming adjustment 5 9 Other 17 18 $ 209 $ 218 Deferred income tax assets: Reserves/accruals $ 61 $ 83 Deferred earnings of foreign subsidiaries 24 45 Net operating and capital loss carry-forwards 51 50 Tax credit carry-forwards 14 13 Other 6 8 156 199 Valuation allowance 59 58 Net deferred income tax liability $ 112 $ 77 As of December 31, 2017 and 2016, Seaboard had $18 million and $13 million, respectively, in total unrecognized tax benefits all of which, if recognized, would affect the effective tax rate. Seaboard does not have any material uncertain tax positions in which it is reasonably possible that the total amounts of the unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. The following table is a reconciliation of the beginning and ending amount of unrecognized tax benefits: (Millions of dollars) 2017 2016 Beginning balance at January 1 $ 13 $ 7 Additions for uncertain tax positions of prior years 3 6 Additions for uncertain tax positions of current year 3 2 Lapse of statute of limitations (1) (2) Ending balance at December 31 $ 18 $ 13 Seaboard accrues interest related to unrecognized tax benefits and penalties in income tax expense and had approximately $3 million and $2 million accrued for the payment of interest and penalties at December 31, 2017 and 2016, respectively. Seaboard’s tax returns are regularly audited by federal, state and foreign tax authorities, which may result in material adjustments. Seaboard’s 2013 through 2015 U.S. income tax returns are currently under Internal Revenue Service examination. Tax years prior to 2013 are generally no longer subject to U.S. tax assessment. In Seaboard’s major non-U.S. jurisdictions, including Argentina and the Dominican Republic, tax years are typically subject to examination for three to six years. As of December 31, 2017, Seaboard provisionally provided for U.S. Federal income tax on $1,279 million of undistributed earnings from foreign operations in conjunction with the 2017 Tax Act . Historically, Seaboard has considered substantially all foreign profits as being permanently invested in its foreign operations, including all cash and short-term investments held by foreign subsidiaries. Seaboard intends to continue permanently reinvesting these funds outside the U.S. as current plans do not demonstrate a need to repatriate them to fund Seaboard’s U.S. operations and therefore, Seaboard has not recorded deferred taxes for state or foreign withholding taxes that would result upon repatriation to the U.S. Determination of the tax that might be paid on unremitted earnings if eventually remitted is not practical. If Seaboard decided at a later date to repatriate these permanently reinvested earnings to the U.S., Seaboard would be required to provide for the net tax effects on these amounts. Management believes Seaboard’s future taxable income will be sufficient for full realization of the net deferred tax assets. The valuation allowance relates to the tax benefits from foreign net operating losses and tax credits. Management does not believe these benefits are more likely than not to be realized due to limitations imposed on the utilization of these losses and credits. At December 31, 2017, Seaboard had foreign net operating loss carry-forwards of approximately $160 million, a portion of which expire in varying amounts between 2018 and 2033, while others have indefinite expiration periods. At December 31, 2017, Seaboard had state and foreign tax credit carry-forwards of approximately $16 million, net of valuation allowance, all of which carry-forward indefinitely. Subsequent to December 31, 2017, Seaboard elected to change the tax status of a wholly owned subsidiary from a partnership to a corporation. This change in tax status will result in an estimated $39 million of additional tax expense and additional deferred tax liabilities that Seaboard will recognize in its first quarter 2018 consolidated financial statements. Seaboard has certain investments in various limited partnerships as a limited partner that are expected to enable Seaboard to obtain certain tax credits. The balance of the low income housing investments recognized on the consolidated balance sheets as of December 31, 2017 and 2016 was $7 million and $8 million, respectively. Seaboard uses the proportional amortization method of accounting for all of its qualified affordable housing project investments by amortizing the initial cost of the investment in proportion to the income tax credits received and recognizing as a component of income tax expense. Seaboard also has invested in two limited liability companies that operate refined coal processing plants that generate federal income tax credits based on production levels. Seaboard began investing in the Oklahoma plant in February 2015 and the Nebraska plant in January 2016 for total contributions of $10 million, $14 million and $9 million during 2017, 2016 and 2015, respectively. Seaboard’s funding commitments vary depending on production. See Note 10 for Seaboard’s estimate of its funding commitment for both plants. Additionally, Seaboard invested $10 million during 2016 in two limited liability companies that operate solar energy production facilities that generate investment tax credits. These other alternative investments are accounted for using the equity method of accounting. On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 (the “2015 Tax Act”) was signed into law. The 2015 Tax Act reinstated and made permanent certain expired corporate income tax provisions that impact current and deferred taxes for financial reporting purposes. The annual effects of the provisions in this law on current and deferred tax assets and liabilities for Seaboard were recorded in the fourth quarter of 2015. The impact was a tax benefit of $13 million, or $10.92 per common share, primarily related to certain income tax credits. In addition to this amount was a credit of $17 million, or $14.88 per common share, for the 2015 Federal blender’s credits (extended by the 2015 Tax Act through December 31, 2016) that was recognized as revenues in the fourth quarter of 2015. There was no tax expense on these transactions. Since the 2015 Tax Act extended the provisions through December 31, 2016, revenue was recognized ratably throughout 2016. The Federal blender’s credits were not renewed during 2017 , but in February 2018 were retroactively extended by Congress for 2017. Seaboard will recognize approximately $42 million of Federal blender’s credits as revenue in the first quarter of 2018. |
Notes Payable and Long-Term Deb
Notes Payable and Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable and Long-term Debt | |
Notes Payable and Long-Term Debt | Note 7 - Notes Payable and Long-Term Debt Notes payable under uncommitted credit lines was $162 million and $121 million at December 31, 2017 and 2016, respectively. Of the $162 million outstanding at December 31, 2017, $115 million related to foreign subsidiaries, with $72 million denominated in South African rand, $30 million denominated in Argentine pesos and $5 million denominated in Zambian kwacha. The weighted average interest rate for outstanding notes payable was 10.48% and 14.88% at December 31, 2017 and 2016, respectively. As of December 31, 2017, Seaboard had uncommitted lines of credit totaling $377 million, of which $327 million related to foreign subsidiaries. The notes payable under the credit lines are unsecured and do not require compensating balances. Facility fees on these agreements are not material. Seaboard has a $100 million committed line of credit with Wells Fargo Bank, National Association (“Wells Fargo”) that matures on September 28, 2018. Interest is computed at LIBOR plus 0.50%, and Seaboard incurs an unused commitment fee of 0.09% per annum. This line of credit is secured by certain short-term investments. The line of credit is subject to standard representations and covenants. There was no outstanding balance as of December 31, 2017. At December 31, 2017, Seaboard’s borrowing capacity under its uncommitted and committed lines of credit was reduced by $162 million drawn and $3 million of letters of credit. The following table is a summary of long-term debt at the end of each year: December 31, (Millions of dollars) 2017 2016 Term Loan due 2022 $ 484 $ 497 Foreign subsidiary obligations due 2018 through 2023 52 20 Total long-term debt at face value 536 517 Current maturities of long-term debt and unamortized discount (54) (18) Long-term debt, less current maturities and unamortized discount $ 482 $ 499 Seaboard entered into a Term Loan Credit Agreement dated December 4, 2015 (“Credit Agreement”) with CoBank, ACB, Farm Credit Services of America, PCA, and the lenders party thereto, pursuant to which Seaboard Foods obtained a $500 million unsecured term loan (“Term Loan”). Seaboard received proceeds of $499 million, net of a $1 million discount, which will be amortized to interest expense using the effective interest method. Seaboard has guaranteed all obligations of Seaboard Foods under the Term Loan. The Term Loan provides for quarterly payments of the principal balance pursuant to the amortization schedule included in the Credit Agreement, with the balance due on the maturity date, December 4, 2022. The Term Loan bears interest at fluctuating rates based on various margins over a base rate (defined as the highest of (a) the prime rate, (b) the federal funds effective rate plus 0.50% per annum, or (c) an adjusted LIBOR rate for an interest period of one month on such day plus 1.00% per annum) or LIBOR, at the option of Seaboard Foods. The interest rate was 3.20% and 2.40% at December 31, 2017 and 2016, respectively. The Term Loan requires, among other terms, the maintenance of certain ratios involving a maximum debt to capitalization ratio, which shall not exceed 50% at the end of any fiscal quarter, and minimum tangible net worth, as defined, of not less than $2 billion plus 25% of cumulative consolidated net income. The Term Loan also includes restrictions of certain subsidiaries to grant liens on assets, incur indebtedness over 15% of consolidated tangible net worth, make certain acquisitions, investments and asset dispositions in excess of specified amounts, and limits aggregate dividend payments to $25 million per year under certain circumstances. Seaboard was in compliance with all restrictive debt covenants relating to this agreement as of December 31, 2017. Foreign subsidiary debt is primarily denominated in Argentine pesos, and most interest rates on such obligations are variable. The weighted average interest rate was 21.80% and 22.39% at December 31, 2017 and 2016, respectively. All of the foreign subsidiary debt is guaranteed by Seaboard, except $5 million is secured by property, plant and equipment. During the third quarter of 2017, Seaboard’s Sugar segment refinanced certain notes payable with a short-term loan denominated in Argentine pesos valued at approximately $32 million as of December 31, 2017. The short-term loan incurs a fixed rate of interest of 23% until its maturity on February 7, 2018. The aggregate minimum principal payments required on long-term debt at December 31, 2017 are as follows: $53 million in 2018, $34 million in 2019, $43 million in 2020, $39 million in 2021, $366 million in 2022 and $1 million thereafter. |
Derivatives and Fair Value of F
Derivatives and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives and Fair Value of Financial Instruments | |
Derivatives and Fair Value of Financial Instruments | Note 8 - Derivatives and Fair Value of Financial Instruments Seaboard uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad levels: Level 1: Quoted Prices in Active Markets for Identical Assets or Liabilities - Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities that Seaboard has the ability to access at the measurement date. Level 2 : Significant Other Observable Inputs - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Significant Unobservable Inputs - Unobservable inputs that reflect the reporting entity’s own assumptions. The following tables show assets and liabilities measured at fair value (derivatives exclude margin accounts) on a recurring basis as of December 31, 2017 and 2016, respectively, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. Seaboard determines if there are any transfers between levels at the end of a reporting period. There were no transfers between levels that occurred in 2017 and 2016. The trading securities classified as other current assets below are assets held for Seaboard’s deferred compensation plans. Balance December 31, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 752 $ 752 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 439 438 1 — Foreign equity securities 319 319 — — Collateralized loan obligations 29 — 29 — High yield securities 21 21 — — Money market funds held in trading accounts 10 10 — — Other trading securities 6 6 — — Trading securities – other current assets: Domestic equity securities 35 35 — — Money market funds held in trading accounts 5 5 — — Foreign equity securities 4 4 — — Fixed income securities 2 2 — — Derivatives: Commodities (1) 4 4 — — Foreign currencies 3 — 3 — Total Assets $ 1,629 $ 1,596 $ 33 $ — Liabilities: Derivatives: Commodities (1) $ 6 $ 6 $ — $ — Foreign currencies 6 — 6 — Total Liabilities $ 12 $ 6 $ 6 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2017, the commodity derivatives had a margin account balance of $20 million resulting in a net other current asset on the consolidated balance sheet of $18 million. Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 482 $ 482 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 437 437 — — Foreign equity securities 199 199 — — High yield securities 115 15 100 — Collateralized loan obligations 26 — 26 — Money market funds held in trading accounts 13 13 — — Other trading securities 5 5 — — Trading securities – other current assets: Domestic equity securities 30 30 — — Foreign equity securities 3 3 — — Fixed income mutual funds 3 3 — — Other 4 4 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 1 — 1 — Total Assets $ 1,321 $ 1,194 $ 127 $ — Liabilities: Derivatives: Commodities (1) $ 1 $ 1 $ — $ — Interest rate swaps 4 — 4 — Foreign currencies 4 — 4 — Total Liabilities $ 9 $ 1 $ 8 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2016, the commodity derivatives had a margin account balance of $10 million resulting in a net other current asset on the consolidated balance sheet of $12 million. Financial instruments consisting of cash and cash equivalents, net receivables, notes payable and accounts payable are carried at cost, which approximates fair value, as a result of the short-term nature of the instruments. The fair value of long-term debt is estimated by comparing interest rates for debt with similar terms and maturities. As Seaboard’s long-term debt is variable-rate, its carrying amount approximates fair value. If Seaboard’s long-term debt was measured at fair value on its consolidated balance sheets, it would have been classified as level 2 in the fair value hierarchy. The amortized cost and estimated fair values of short-term investments and long-term debt at December 31, 2017 and 2016, are presented below: December 31, 2017 2016 (Millions of dollars) Amortized Cost Fair Value Amortized Cost Fair Value Short-term investments, trading securities $ 1,387 $ 1,576 $ 1,236 $ 1,277 Long-term debt 535 535 516 516 While management believes its derivatives are primarily economic hedges of its firm purchase and sales contracts or anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these types of transactions as hedges for accounting purposes. Commodity Instruments Seaboard uses various derivative futures and options to manage its risk to price fluctuations for raw materials and other inventories, finished product sales and firm sales commitments. Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. The nature of Seaboard’s market risk exposure has not changed materially since December 31, 2016. Commodity derivatives are recorded at fair value, with any changes in fair value being marked-to-market as a component of cost of sales on the consolidated statements of comprehensive income. Since these derivatives are not accounted for as hedges, fluctuations in the related commodity prices could have a material impact on earnings in any given period. For the years ended December 31, 2017, 2016 and 2015, Seaboard recognized net realized and unrealized gains (losses) of $(9) million, $21 million and $(45) million, respectively, related to commodity contracts, primarily included in cost of sales on the consolidated statements of comprehensive income. At December 31, 2017, Seaboard had open net derivative contracts to purchase 29 million bushels of grain and 1 million pounds of soybean oil and open net derivative contracts to sell 13 million pounds of hogs and 7 million gallons of heating oil. At December 31, 2016, Seaboard had open net derivative contracts to purchase 22 million bushels of grain, 14 million pounds of hogs and open net derivative contracts to sell 35 million pounds of soybean oil and 4 million gallons of heating oil. Foreign Currency Exchange Agreements Seaboard enters into foreign currency exchange agreements to manage the foreign currency exchange rate risk with respect to certain transactions denominated in foreign currencies. Foreign currency exchange agreements that primarily relate to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of cost of sales on the consolidated statements of comprehensive income. Foreign currency exchange agreements that are not related to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of foreign currency gains (losses), net on the consolidated statements of comprehensive income. Since these agreements are not accounted for as hedges, fluctuations in the related foreign currency exchange rates could have a material impact on earnings in any given year. At December 31, 2017 and 2016, Seaboard had foreign currency exchange agreements to cover its firm sales and purchase commitments and related trade receivables and payables, with notional amounts of $20 million and $81 million, respectively, primarily related to the South African rand, euro and Canadian dollar. Interest Rate Exchange Agreements During 2010, Seaboard entered into three ten-year interest rate exchange agreements, which involved the exchange of fixed-rate and variable-rate interest payments over the life of the agreements without the exchange of the underlying notional amounts to mitigate the effects of fluctuations in interest rates on variable-rate debt. Seaboard paid a fixed rate and received a variable rate of interest on the notional amounts of $25 million each. In December 2017, all three agreements were terminated. Payments to unwind these agreements totaled $2 million. At December 31, 2016, Seaboard had three agreements outstanding with a total notional value of $75 million. During 2014 and 2015, Seaboard entered into four, approximately eight-year interest rate exchange agreements with termination dates which coincided with the anticipated delivery dates of dry bulk vessels to be leased. These interest rate exchange agreements involved the exchange of fixed-rate and variable-rate interest payments without the exchange of the underlying notional amounts to mitigate the potential effects of fluctuations in interest rates on the anticipated dry bulk vessel leases. Seaboard paid a fixed rate and received a variable rate of interest on the notional amounts. In 2015, two agreements were terminated and not renewed with the delivery of two bulk vessels. In the first quarter of 2016, the final two agreements with an aggregate notional amount of $44 million were terminated and not renewed with the delivery of the last two bulk vessels. Payments to unwind these agreements totaled $2 million. These interest rate exchange agreements did not qualify as hedges for accounting purposes. Accordingly, the changes in fair value of these agreements were recorded in miscellaneous, net in the consolidated statements of comprehensive income. The following table provides the amount of gain (loss) recognized for each type of derivative and where it was recognized in the consolidated statements of comprehensive income for the year ended December 31, 2017 and 2016: (Millions of dollars) 2017 2016 Commodities Cost of sales $ (9) $ 21 Foreign currencies Cost of sales (7) (27) Foreign currencies Foreign currency (1) 1 Interest rate Miscellaneous, net — (2) The following table provides the fair value of each type of derivative held as of December 31, 2017 and 2016 and where each derivative is included on the consolidated balance sheets: Asset Derivatives Liability Derivatives December 31, December 31, December 31, December 31, (Millions of dollars) 2017 2016 2017 2016 Commodities (1) Other current assets $ 4 $ Other current liabilities $ 6 $ Foreign currencies Other current assets 3 Other current liabilities 6 4 Interest rate Other current assets — — Other current liabilities — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2017 and 2016, the commodity derivatives had a margin account balance of $20 million and $10 million, respectively, resulting in a net other current asset on the consolidated balance sheets of $18 million and $12 million, respectively. Counterparty Credit Risk 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 December 31, 2017, Seaboard had $3 million of credit risk to six counterparties related to its foreign currency exchange agreements. Seaboard does not hold any collateral related to these agreements. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits | |
Employee Benefits | Note 9 - Employee Benefits Effective January 1, 2017, Seaboard merged the assets and liabilities of its two defined benefit pension plans for its domestic salaried and clerical employees resulting in one qualified defined benefit pension plan (the “Plan”) as of December 31, 2017. Employees hired before January 1, 2014 were eligible to participate in the Plan after one year of service upon attaining the age of 21. Benefits are generally based upon the number of years of service and a percentage of final average pay. Seaboard has historically based pension contributions on minimum funding standards to avoid the Pension Benefit Guaranty Corporation (“PBGC”) variable rate premiums established by the Employee Retirement Income Security Act (“ERISA”) of 1974. Seaboard did not make any contributions in 2017 and 2015 and currently does not plan on making any contributions in 2018. During 2016, Seaboard made a deductible contribution of $39 million for the 2015 plan year. Pursuant to Seaboard’s investment policy, assets are invested in the Plan to achieve a diversified target allocation of approximately 50% in domestic equities, 25% in international equities, 20% in fixed income securities and 5% in alternative investments. The investment strategy is periodically reviewed by management for adherence to policy and performance. As described in Note 8 to the consolidated financial statements, Seaboard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following tables show the Plan’s assets measured at estimated fair value as of December 31, 2017 and 2016, respectively, and also the level within the fair value hierarchy used to measure each category of assets: Balance December 31, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Domestic equity securities $ 80 $ 80 $ — $ — Foreign equity securities 53 53 — — Domestic fixed income mutual funds 25 25 — — Money market funds 2 2 — — Foreign fixed income mutual funds 11 11 — — Total Assets $ 171 $ 171 $ — $ — Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Domestic equity securities $ 76 $ 76 $ — $ — Foreign equity securities 35 35 — — Domestic fixed income mutual funds 17 17 — — Real estate mutual fund 8 8 — — Commodity mutual funds 4 4 — — Money market funds 4 4 — — Foreign fixed income mutual funds 2 2 — — Other 5 — 5 — Total Assets $ 151 $ 146 $ 5 $ — Seaboard also sponsors non-qualified, unfunded supplemental executive plans, and has certain individual, non-qualified, unfunded supplemental retirement agreements for certain retired employees. The unamortized prior service cost is being amortized over the average remaining working lifetime of the active participants for these plans. Management has no plans to provide funding for these supplemental executive plans in advance of when the benefits are paid. Assumptions used in determining pension information for all of the above plans were: Years ended December 31, 2017 2016 2015 Weighted average assumptions Discount rate used to determine obligations 2.75 - 3.80 % 2.90 - 4.65 % 3.20 - 4.80 % Discount rate used to determine net periodic benefit cost 2.90 - 4.60 % 3.20 - 4.80 % 2.70 - 4.40 % Expected return on plan assets 6.50 % 6.75 - 7.00 % 6.75 - 7.50 % Long-term rate of increase in compensation levels 4.00 % 4.00 % 4.00 % Management selected the discount rate based on a model-based result where the timing and amount of cash flows approximates the estimated payouts. The expected returns on the Plan’s assets assumption are based on the weighted average of asset class expected returns that are consistent with historical returns. The assumed rate selected was based on model-based results that reflect the Plan’s asset allocation and related long-term projected returns. The measurement date for all plans is December 31. The unrecognized net actuarial losses are generally amortized over the average remaining working lifetime of the active participants for all of these plans. The changes in the Plan’s benefit obligations and fair value of assets for the Plan, supplemental executive plans and retirement agreements and the funded status were as follows: December 31, 2017 2016 (Millions of dollars) Accumulated benefits exceed assets Assets exceed accumulated benefits Accumulated benefits exceed assets Total Reconciliation of benefit obligation: Benefit obligation at beginning of year $ 262 $ 70 $ 179 $ 249 Service cost 9 4 5 9 Interest cost 11 3 8 11 Actuarial losses 29 — 6 6 Plan settlements (9) — — — Benefits paid (3) (4) (9) (13) Other 1 — — — Benefit obligation at end of year $ 300 $ 73 $ 189 $ 262 Reconciliation of fair value of plan assets: Fair value of plan assets at beginning of year $ 151 $ 46 $ 68 $ 114 Actual return on plan assets 25 6 4 10 Employer contributions 10 39 1 40 Plan settlements (9) — — — Benefits paid (6) (4) (9) (13) Fair value of plan assets at end of year $ 171 $ 87 $ 64 $ 151 Funded status $ (129) $ 14 $ (125) $ (111) The net funded status of the Plan was $(29) million and $(15) million at December 31, 2017 and 2016, respectively. The benefit obligation increased primarily due to a decrease in discount rates for all plans and the new lump sum mortality table. The accumulated benefit obligation for the Plan was $171 million and $142 million and for all the other plans was $90 million and $84 million at December 31, 2017 and 2016, respectively. Expected future net benefit payments for all plans during each of the next five years and in aggregate for the five year period beginning with the sixth year are as follows: $12 million, $14 million, $17 million, $13 million, $23 million and $78 million, respectively. The settlements recognized during 2017 were primarily due to three participants who received lump sum payments in aggregate of $8 million that exceeded the service cost plus interest cost for the respective plan. The net periodic cost of benefits of these plans was as follows: Years ended December 31, (Millions of dollars) 2017 2016 2015 Components of net periodic benefit cost: Service cost $ 9 $ 9 $ 10 Interest cost 11 11 10 Expected return on plan assets (10) (8) (8) Amortization and other 5 5 5 Settlement loss recognized 2 — — Agreement termination gain — — (1) Net periodic benefit cost $ 17 $ 17 $ 16 The amounts not reflected in net periodic benefit cost and included in accumulated other comprehensive loss before taxes at December 31, 2017 and 2016 were $78 million and $72 million, respectively. Such amounts primarily represent accumulated losses, net of gain. The amount in accumulated other comprehensive loss expected to be recognized as a component of net periodic benefit cost in 2018 is $5 million. Seaboard participates in a multi-employer pension fund, the United Food and Commercial Workers International Union-Industry Pension Fund, which covers certain union employees under a collective bargaining agreement. This fund’s employer identification number is 51-6055922, and this plan’s number is 001. For the plan year beginning July 1, 2017, this plan’s “zone status” is green and is not subject to a funding improvement plan. Seaboard is required to make contributions to this plan in amounts established under the collective bargaining agreement that expires in July 2019. Contribution expense for this plan was $1 million for each of the years ended December 31, 2017, 2016 and 2015, which represents less than five percent of total contributions to this plan. The applicable portion of the total plan benefits and net assets of this plan is not separately identifiable, although Seaboard has received notice that, under certain circumstances, it could be liable for unfunded vested benefits or other expenses of this jointly administered union plan. Seaboard has not established any liabilities for potential future withdrawal, as such withdrawal from this plan is not probable. Seaboard maintains a defined contribution plan covering most of its domestic salaried and clerical employees. In 2017, 2016 and 2015, Seaboard contributed to this plan an amount equal to 50% of the first 6% of each employee’s contributions to the plan. Employee vesting is based upon years of service, with 20% vested after one year of service and an additional 20% vesting with each additional complete year of service. Contribution expense for this plan was $3 million for the year ended December 31, 2017 and $2 million for each of the years ended December 31, 2016 and 2015. In addition, Seaboard maintains a defined contribution plan covering most of its hourly, non-union employees. Contribution expense for this plan was $1 million for each of the years ended December 31, 2017, 2016 and 2015. Seaboard has a deferred compensation plan that allows certain employees to reduce their compensation in exchange for values in various investments. Seaboard also has an Investment Option Plan that allowed certain employees to reduce their compensation in exchange for an option to acquire interests measured by reference to three investments. However, as a result of U.S. tax legislation passed in 2004, reductions to compensation earned after 2004 are no longer allowed under the Investment Option Plan. The exercise price for each investment option was established based upon the fair market value of the underlying investment on the date of grant. Under both plans, Seaboard contributes 3% of the employees’ reduced compensation. Seaboard’s expense for these two deferred compensation plans, which primarily includes amounts related to the change in fair value of the underlying investment accounts, was $10 million, $4 million and $0 million for the years ended December 31, 2017, 2016 and 2015, respectively. Included in other liabilities at December 31, 2017 and 2016 were $40 million and $36 million, respectively, representing the market value of the payable to the employees upon distribution or exercise for each plan. In conjunction with these plans, Seaboard purchased the specified number of units of the employee-designated investment, plus the applicable option price for the Investment Option Plan. These investments are treated as trading securities and are stated at their fair market values. Accordingly, as of December 31, 2017 and 2016, $46 million and $40 million, respectively, were included in other current assets on the consolidated balance sheets. Investment income related to the mark-to-market of these investments for 2017, 2016 and 2015 totaled $9 million, $4 million and $0 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies On September 18, 2014, and subsequently in 2015 and 2016, Seaboard received a number of grand jury subpoenas and informal requests for information from the Department of Justice, Asset Forfeiture and Money Laundering Section (“AFMLS”), seeking records related to specified foreign companies and individuals. The companies and individuals as to which the requested records relate were not affiliated with Seaboard, although Seaboard has also received subpoenas and requests for additional information relating to an affiliate of Seaboard. During 2017, Seaboard received grand jury subpoenas requesting documents and information related to money transfers and bank accounts in the DRC and other African countries and requests to interview certain Seaboard employees and to obtain testimony before a grand jury. Seaboard has retained outside counsel and is cooperating with the government’s investigation. It is impossible at this stage either to determine the probability of a favorable or unfavorable outcome or to estimate the amount of potential loss, if any, resulting from the government’s inquiry. On September 19, 2012, the U.S. Immigration and Customs Enforcement (“ICE”) executed three search warrants authorizing the seizure of certain records from Seaboard’s offices in Merriam, Kansas and at the Seaboard Foods employment office and the human resources department in Guymon, Oklahoma. The warrants generally called for the seizure of employment-related files, certain e-mails and other electronic records relating to Medicaid and Medicaid recipients, certain health care providers in the Guymon area, and Seaboard’s health plan and certain personnel issues. The U.S. Attorney’s Office for the Western District of Oklahoma (“USAO”), which has been leading the investigation, previously advised Seaboard that it intended to close its investigation and that no charges would be brought against Seaboard. However, discussions continue with the USAO, ICE and the Oklahoma Attorney General's office regarding the matter, including the possibility of a settlement. No proceedings have been filed or brought as of the date of this report. It is not possible at this time to determine whether a settlement will be reached or whether Seaboard will incur any material fines, penalties or liabilities in connection with this matter. On February 16, 2016, Seaboard Foods received an information request from the U.S. Environmental Protection Agency (“EPA”) seeking information under the Clean Air Act with regard to various ammonia releases at Seaboard Foods’ pork processing plant in Guymon, Oklahoma. In December 2017, Seaboard settled this matter, agreeing to pay a civil penalty and to implement a supplemental environmental project, the aggregate amount of both totaling less than $1 million. Seaboard is subject to various administrative and judicial proceedings and other legal matters related to the normal conduct of its business. In the opinion of management, the ultimate resolution of these items is not expected to have a material adverse effect on the consolidated financial statements of Seaboard. Contingent Obligations Certain of the non-consolidated affiliates and third-party contractors who perform services for Seaboard have bank debt supporting their underlying operations. From time to time, Seaboard will provide guarantees of that debt in order to further business objectives. Seaboard does not issue guarantees of third parties for compensation. As of December 31, 2017, guarantees outstanding to third parties were not material. Seaboard has not accrued a liability for any of the third-party or affiliate guarantees as management considers the likelihood of loss to be remote. See Note 7 for discussion of letters of credit. Commitments As of December 31, 2017 Seaboard had various non-cancelable purchase commitments and commitments under other agreements, arrangements and operating leases, as described in the table below: Years ended December 31, (Millions of dollars) 2018 2019 2020 2021 2022 Thereafter Hog procurement contracts $ 81 $ 78 $ 78 $ 81 $ 63 $ 80 Grain and feed ingredients 107 3 — — — — Grain purchase contracts for resale 367 — — — — — Fuel supply contracts 44 — — — — — Equipment purchases and facility improvements 37 — — — — — Other purchase commitments 42 1 — — — — Total firm purchase commitments 678 82 78 81 63 80 Vessel, time and voyage-charters 39 29 26 26 13 33 Contract grower agreements 42 33 29 25 16 44 Other operating lease payments 29 29 26 25 26 151 Investment in affiliates 16 14 14 10 — — Total unrecognized non-cancelable commitments $ 804 $ 187 $ 173 $ 167 $ 118 $ 308 Seaboard has contracted with third parties for the purchase of live hogs to process at its pork processing plant, and has entered into grain and feed ingredient purchase contracts to support its live hog operations. The commitment amounts included in the table are based on projected market prices as of December 31, 2017. During 2017, 2016 and 2015, the Pork segment paid $99 million, $133 million and $171 million, respectively, for live hogs purchased under committed contracts. The CT&M segment enters into grain purchase contracts, primarily to support firm sales commitments. These contracts are valued based on projected commodity prices as of December 31, 2017. The Power segment has a natural gas supply contract for a significant portion of the fuel required for the operation of its dual fuel power generating facility. The commitment has both fixed and variable price components, and the amount included in the table above is partially based on market prices as of December 31, 2017. The Marine segment also has fuel purchase contracts. The Marine and CT&M segments enter into contracts to charter vessels for use in their operations, which include short-term time charters for a few months and long-term commitments ranging from one to eleven years. These segments’ charter hire expenses during 2017, 2016 and 2015 totaled $96 million, $95 million and $99 million, respectively. To support the operations of the Pork segment, Seaboard has contract grower agreements in place with farmers to raise a portion of Seaboard’s hogs according to Seaboard’s specifications under long-term service agreements. In the event the farmer is unable to perform at an acceptable level, Seaboard has the right to terminate the contract. During the years ended 2017, 2016 and 2015, Seaboard paid $37 million, $26 million and $12 million, respectively, under contract grower agreements. Seaboard also leases various facilities and equipment under non-cancelable operating lease agreements including a terminal operations agreement at PortMiami, which runs through 2028. Rental expense for operating leases for all segments amounted to $44 million, $43 million and $42 million in 2017, 2016 and 2015, respectively. Investment in affiliates represents obligations made to equity method investments, primarily for expected funding commitments to two limited liability companies that operate refined coal processing plants. |
Stockholders' Equity and Accumu
Stockholders' Equity and Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | Note 11 - Stockholders’ Equity and Accumulated Other Comprehensive Loss In October 2017, the Board of Directors extended through October 31, 2019 the share repurchase program initially approved in November 2009. As of December 31, 2017, $100 million remained available for repurchases under this program. Seaboard did not repurchase any shares of common stock during 2017, 2016 and 2015. Under this share repurchase program, Seaboard is authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. All stock repurchased will be made in compliance with applicable legal requirements and funded by cash on hand. The timing of the repurchases and the number of shares repurchased at any given time will depend upon market conditions, compliance with SEC 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. Shares repurchased will be retired and resume the status of authorized and unissued shares. In each of the four quarters of 2017, Seaboard declared and paid a quarterly dividend of $1.50 per share on the common stock. In December 2012, Seaboard declared and paid a dividend of $12.00 per share on the common stock. The increased amount of the dividend (which has historically been $0.75 per share on a quarterly basis or $3.00 per share on an annual basis) represented a prepayment of the annual 2013, 2014, 2015 and 2016 dividends ($3.00 per share per year). Seaboard did not declare or pay a dividend in 2016 or 2015. The components of accumulated other comprehensive loss, net of related taxes, for 2015, 2016 and 2017 are as follows: Cumulative Foreign Unrealized Currency Gain Unrecognized Translation on Pension (Millions of dollars) Adjustment Investments Cost Total Balance December 31, 2015 $ (228) $ 1 $ (51) $ (278) Other comprehensive income (loss) before reclassifications (26) 1 (4) (29) Amounts reclassified from accumulated other comprehensive loss to net earnings — — 3 (1) 3 Other comprehensive income (loss), net of tax (26) 1 (1) (26) Balance December 31, 2016 $ (254) $ 2 $ (52) $ (304) Other comprehensive income (loss) before reclassifications (6) 5 (8) (9) Amounts reclassified from accumulated other comprehensive loss to net earnings — — 4 (1) 4 Other comprehensive income (loss), net of tax (6) 5 (4) (5) Amounts reclassified from accumulated other comprehensive loss to retained earnings (37) (2) — (8) (2) (45) Balance December 31, 2017 $ (297) $ 7 $ (64) $ (354) (1) This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and recorded in operating income. See Note 9 for further discussion. (2) This represents the adoption of accounting guidance to reclassify $45 million of tax effects from accumulated other comprehensive loss to retained earnings in the consolidated financial statements for the year ended December 31, 2017. The foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar segment. At December 31, 2017, the Sugar segment had $74 million in net assets denominated in Argentine pesos and less than $1 million in net liabilities denominated in U.S. dollars in Argentina. At December 31, 2016, the Sugar segment had $84 million in net assets denominated in Argentine pesos and $3 million in net liabilities denominated in U.S. dollars in Argentina. Seaboard accounts for its Sugar segment on a one-month lag basis. Income taxes for cumulative foreign currency translation adjustments were recorded using a 21% effective tax rate in the fourth quarter of 2017 and a 35% effective tax rate for all other periods, except for $91 million and $87 million in 2017 and 2016, respectively, related to certain subsidiaries for which no tax benefit was recorded. Income taxes for all other components of accumulated other comprehensive loss were recorded using a 26% effective tax rate in the fourth quarter of 2017 and a 39% effective tax rate for all other periods, except for unrecognized pension cost of $22 million and $20 million in 2017 and 2016, respectively, related to employees at certain subsidiaries for which no tax benefit was recorded. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions | |
Acquisitions | Note 12 - Acquisitions On August 30, 2017, Seaboard’s Pork segment acquired hog inventory and hog farms in the Central U.S. from New Fashion Pork, LLP for total cash consideration of $40 million. This acquisition provides additional sows to further increase Seaboard’s capacity to fulfill its hog supply commitment for processing at the STF processing plant located in Sioux City, Iowa, which began operations in September 2017. See Note 4 for further information on STF. The purchase was recorded at fair value in Seaboard’s Pork segment, and the allocation of the purchase price is below. No material intangible assets were identified. (Millions of dollars) Inventories $ 6 Property, plant and equipment 34 Total consideration transferred $ 40 Operating results have been included in Seaboard’s consolidated financial statements from the date of acquisition. There was no material impact to Seaboard’s sales and net earnings as a result of the purchase. Pro forma results of operations are not presented as the effects are not material to Seaboard’s results of operations. Acquisition costs were less than $1 million. During the first quarter of 2017, Seaboard’s CT&M segment acquired a pulse and grain elevator in Canada for total cash consideration of $14 million. This business, which complements an existing CT&M business in Canada, is expected to increase the trade volumes of pulses, which include commodities of beans, peas and lentils. The purchase was recorded at fair value with $11 million allocated to property, plant and equipment and $3 million allocated to goodwill. Goodwill represents the assembled workforce, cost savings of buying rather than developing a greenfield operation and the close proximity of this elevator to the producers in the region. The goodwill is deductible for income tax purposes. Operating results have been included in Seaboard’s consolidated financial statements from the date of acquisition. Pro forma results of operations are not presented as the effects are not material to Seaboard’s results of operations. Acquisition costs were less than $1 million. On September 1, 2016, Seaboard’s Pork segment acquired certain assets of Texas Farm, LLC for total cash consideration of $59 million. Texas Farm, LLC was a hog growing operation with hog inventory, hog farms and a feed mill located in Texas. The additional hog production allows Seaboard to expand and realign its hog production in other states to supply the Guymon, Oklahoma, pork processing plant and the STF processing plant. The purchase was recorded at fair value in Seaboard’s Pork segment, and the allocation of the purchase price is below. Goodwill is primarily attributable to workforce and the benefits of acquiring an existing operation rather than incurring the costs and time to begin a new hog operation. (Millions of dollars) Inventories $ 16 Property, plant and equipment 42 Goodwill 3 Accounts payable (2) Total consideration transferred $ 59 Operating results have been included in Seaboard’s consolidated financial statements from the date of acquisition. Net sales of $4 million and a $2 million net loss were recognized during 2016. Acquisition costs were less than $1 million. On February 7, 2016, Seaboard’s Pork segment acquired hog inventory, a feed mill, truck washes and certain hog farms in the Central U.S. from Christensen Farms & Feedlots, Inc. and Christensen Farms Midwest, LLC (“Christensen Farms”) for total cash consideration of $148 million. Seaboard had previously agreed to provide a portion of the hogs to be processed at the STF pork processing plant. The purchase was recorded at fair value in Seaboard’s Pork segment, and the allocation of the purchase price is below. Intangible assets include customer relationships that have a weighted-average useful life of 1.6 years. Goodwill represents the farms’ established processes, workforce and close proximity to the Sioux City, Iowa, processing plant. (Millions of dollars) Inventories $ 33 Property, plant and equipment 111 Intangible assets 1 Goodwill 3 Total consideration transferred $ 148 Operating results have been included in Seaboard’s consolidated financial statements from the date of acquisition. Net sales of $119 million and a $5 million net loss were recognized during 2016. Acquisition costs were less than $1 million. During the last half of 2016, Seaboard’s Pork segment acquired additional hog inventory and sow farms through three additional acquisitions for total cash consideration of $12 million. The purchases were recorded at fair value, and $1 million and $11 million were allocated to inventories and property, plant and equipment, respectively. No material intangible assets were identified, and acquisition costs were less than $1 million. With these purchases, Seaboard increased its sow herd to meet the majority of its hog supply commitment for single-shift processing at the STF plant. On October 28, 2016, Seaboard’s CT&M segment increased its ownership percentage from 50% to 98% to obtain control of Belarina Alimentos S. A., a flour production business in Brazil (“Belarina”). No cash or other consideration was transferred to the other shareholder whose ownership was diluted through revision of the shareholders agreement to restructure the affiliate debt and equity of Belarina. Seaboard accounted for the transaction as a business combination achieved in stages and included the financial results of Belarina in its consolidated financial statements since the date of acquisition. See Note 4 for a discussion of the previous equity method of accounting for Belarina. As Belarina is recorded on a three-month lag, there was no impact to Seaboard’s sales and net earnings from Belarina’s operations as a result of the consolidation. Since no consideration was transferred to the other owner, Seaboard substituted the acquisition-date fair value of its 50% pre-existing interest in Belarina and the acquisition-date fair value of its pre-existing affiliate trade and note receivable for the acquisition-date fair value of the consideration transferred to measure goodwill. The following table summarizes the purchase price allocation resulting from this consolidation: (Millions of dollars) Accounts receivable $ 7 Inventories 6 Property, plant and equipment 25 Other assets 4 Goodwill 1 Third-party debt (14) Other liabilities (11) Total business valuation $ 18 Fair value of pre-existing interest $ 18 The valuation of the noncontrolling interest was immaterial. Goodwill primarily represents the assembled workforce. Seaboard recorded a gain of $4 million in bad debt expense within selling, general and administrative expenses on the consolidated statement of comprehensive income, related to recognizing the fair value of its pre-existing affiliate receivables. On January 5, 2018, Seaboard’s CT&M segment completed the acquisition of Borisniak Corp., Societe Les Grands Moulins d’Abidjan , Les Grands Moulins de Dakar, Eurafrique, and Societe Mediterraneenne de Transport, collectively operating as Groupe Mimran (“Mimran”) for a cash purchase price of $375 million, plus an earn-out between zero and $48 million payable between five and eight years following the closing, using the exchange rate in effect at closing . The potential additional payment per the earn-out is based on performance of the business, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a metric, for the first five years after closing of the transaction. Mimran operates three flour mill s and an associated trading business locat ed in Senegal, Ivory Coast and Monaco. This acquisition is expected to increase Seaboard’s flour and feed milling capacity and annual grain trading volume. Due to the timing of the purchase, the initial accounting is not complete. Seaboard is currently in the process of obtaining an initial valuation related to the acquired assets and liabilities. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | Note 13 - Segment Information Seaboard has six reportable segments: Pork, CT&M, Marine, Sugar, Power and Turkey, each offering a specific product or service. Seaboard’s reporting segments are based on information used by Seaboard’s Chief Executive Officer in his capacity as chief operating decision maker to determine allocation of resources and assess performance. Each of the six segments is separately managed, and each was started or acquired independent of the other segments. The Pork segment produces and sells fresh and frozen pork products to further processors, foodservice operators, grocery stores, distributors and retail outlets throughout the U.S., and to foreign markets. This segment also produces biodiesel from pork fat and other animal fat or vegetable oil for sale to third parties. Substantially all of Seaboard’s Pork segment’s hourly employees at its Guymon, Oklahoma, processing plant are covered by a collective bargaining agreement. The CT&M segment is an integrated agricultural commodity trading, processing and logistics operation that internationally markets wheat, corn, soybean meal and other agricultural commodities in bulk to third-party customers and to non-consolidated affiliates. This segment also operates flour, maize and feed mills, baking operations, and poultry production and processing in numerous foreign countries. The Marine segment, based in Miami, Florida, provides cargo shipping services between the U.S., the Caribbean and Central and South America. The Sugar segment produces and processes sugar and alcohol in Argentina, primarily to be marketed locally. The Power segment is an unregulated independent power producer in the Dominican Republic operating a power generating barge. The Turkey segment, accounted for using the equity method, produces and sells branded and non-branded turkeys products. Total assets for the Turkey segment represents Seaboard’s investment in Butterball and primarily a note receivable from this affiliate that was repaid in December 2017. Revenues for the All Other segment are primarily derived from a jalapeño pepper processing operation. Below are significant segment events that impact financial results for the periods covered by this report. During 2017 and 2016, the Pork segment acquired hog growing operations for total cash consideration of $40 million and $219 million, respectively. These hog operations’ results have been included in Seaboard’s consolidated financial statements from the dates of acquisition. See Note 12 for further information on these acquisitions. The Pork segment’s biodiesel plants have historically received Federal blender’s credits for the biodiesel they blend. The 2015 Tax Act signed into law in December 2015, as discussed in Note 6, renewed the Federal blender’s credit, which had previously expired on December 31, 2014, retroactively to January 1, 2015 with an expiration of December 31, 2016. As a result, in the fourth quarter of 2015 the Pork segment recognized as revenue the 2015 Federal blender’s credits of $17 million. The Federal blender’s credits were not renewed in 2017, but in February 2018 Congress retroactively extended the Federal blender’s credits for 2017. Seaboard will recognize approximately $42 million of revenue in the first quarter of 2018. During 2017, the CT&M segment acquired an elevator in Canada for total cash consideration of $14 million. Subsequent to December 31, 2017, the CT&M segment acquired flour milling and associated businesses in Senegal, Ivory Coast and Monaco for $375 million, plus an earn-out between zero and $48 million, using the exchange rate in effect at closing. See Note 12 for further information on these transactions. On October 28, 2016, the CT&M segment obtained control of Belarina, its non-consolidated affiliate with a flour production business in Brazil, and began including its financial results in its consolidated financial statements from the date of acquisition. See Note 12 for further details of the consolidation. In 2016, the CT&M segment reserved $16 million related to a note receivable to an affiliate that operates in the DRC. The CT&M segment historically derived a significant portion of its operating income from wheat sales to another non-consolidated affiliate in the DRC. See Note 4 for further discussion of the affiliates in the DRC. During 2017, the Marine segment recorded a $6 million impairment on an equity method investment and related affiliate receivables. See Note 4 for further discussion of this investment. In March 2017, the Power segment was notified by the Ministry of Environment and Natural Resources (the “Ministry”), a division within the Dominican Republic government, that it would not renew the environmental license for Seaboard’s power plant on a barge located in the Ozama River. If the license is not renewed, Seaboard would be required to find a new location by the third quarter of 2018. Seaboard’s management is in discussions with the Ministry and will vigorously defend its rights to continue to operate the barge, which is under a special dispensation from the President of the Dominican Republic, in its current location. It is not possible at this time to determine whether a favorable outcome will be reached or to estimate the charge to earnings if Seaboard has to relocate the barge. During 2015, the Power segment recorded a receivable and interest income of $31 million for interest recognized on certain outstanding customer receivable balances. This interest income related to amounts determined to be collectible as of December 31, 2015, but previously had been considered uncollectable in prior years. This amount was fully collected by Seaboard in early January 2016. In 2017, the Turkey segment closed its further processing plant in Montgomery, Illinois. Seaboard’s proportionate share of the restructuring charges, recognized in income (loss) from affiliates, was $18 million in 2017. See Note 4 for further discussion. The following tables set forth specific financial information about each segment as reviewed by Seaboard’s management, except for the Turkey segment information previously disclosed in Note 4 to the consolidated financial statements. Operating income for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income, along with income (loss) from affiliates for the Pork, CT&M and Turkey segments, are used as the measures of evaluating segment performance because management does not consider interest, other investment income (loss) and income tax expense on a segment basis. Sales to External Customers: Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 1,609 $ 1,443 $ 1,332 Commodity Trading and Milling 2,945 2,778 3,022 Marine 956 916 940 Sugar 186 147 188 Power 97 79 97 All Other 16 16 15 Segment/Consolidated Totals $ 5,809 $ 5,379 $ 5,594 Operating Income (Loss): Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 188 $ 175 $ 116 Commodity Trading and Milling 25 38 2 Marine 21 33 19 Sugar 21 (12) 2 Power 9 7 7 All Other 2 2 2 Segment Totals 266 243 148 Corporate (34) (21) (22) Consolidated Totals $ 232 $ 222 $ 126 Income (Loss) from Affiliates: Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ (10) $ 11 $ 11 Commodity Trading and Milling 7 (10) (50) Marine (7) 1 2 Sugar 1 2 1 Power 6 4 3 Turkey (4) 73 103 Segment/Consolidated Totals $ (7) $ 81 $ 70 Depreciation and Amortization: Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 69 $ 56 $ 44 Commodity Trading and Milling 10 6 5 Marine 24 26 26 Sugar 7 6 8 Power 8 8 8 Segment Totals 118 102 91 Corporate — — — Consolidated Totals $ 118 $ 102 $ 91 Total Assets: December 31, (Millions of dollars) 2017 2016 Pork $ 1,309 $ 1,157 Commodity Trading and Milling 964 989 Marine 376 314 Sugar 197 166 Power 188 196 Turkey 315 493 All Other 4 6 Segment Totals 3,353 3,321 Corporate 1,808 1,434 Consolidated Totals $ 5,161 $ 4,755 Investments in and Advances to Affiliates: December 31, (Millions of dollars) 2017 2016 Pork $ 231 $ 175 Commodity Trading and Milling 240 207 Marine 28 33 Sugar 4 4 Power 38 30 Turkey 310 324 Segment/Consolidated Totals $ 851 $ 773 Capital Expenditures: Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 100 $ 69 $ 40 Commodity Trading and Milling 15 35 40 Marine 37 19 43 Sugar 20 33 15 Power 1 1 1 Segment Totals 173 157 139 Corporate — 1 — Consolidated Totals $ 173 $ 158 $ 139 Administrative services provided by the corporate office are allocated to the individual segments and represent corporate services rendered to and costs incurred for each specific segment, with no allocation to individual segments of general corporate management oversight costs. Corporate assets include short-term investments, other current assets related to deferred compensation plans, fixed assets, and other miscellaneous items. Corporate operating losses represent certain operating costs not specifically allocated to individual segments and include costs related to Seaboard’s deferred compensation programs, which are offset by the effect of the mark-to-market adjustments on these investments recorded in other investment income (loss), net. Geographic Information Seaboard had sales in South Africa totaling $581 million, $650 million and $646 million for the years ended December 31, 2017, 2016 and 2015, respectively, representing approximately 10%, 12% and 12% of total sales for each respective year. No other individual foreign country accounted for 10% or more of sales to external customers. The following table provides a geographic summary of net sales based on the location of product delivery: Years ended December 31, (Millions of dollars) 2017 2016 2015 Caribbean, Central and South America $ 2,295 $ 1,990 $ 2,112 Africa 1,483 1,572 1,606 United States 1,271 1,161 1,135 Pacific Basin and Far East 393 309 357 Canada/Mexico 238 236 242 Europe 99 40 71 All other 30 71 71 Totals $ 5,809 $ 5,379 $ 5,594 The following table provides a geographic summary of Seaboard’s long-lived assets according to their physical location and primary port for the vessels: December 31, (Millions of dollars) 2017 2016 United States $ 784 $ 713 Dominican Republic 114 122 Argentina 73 67 All other 115 106 Totals $ 1,086 $ 1,008 Management believes its allowance for doubtful accounts is adequate and reduces receivables recorded to their expected net realizable value. At December 31, 2017 and 2016, Seaboard had approximately $242 million and $214 million, respectively, of foreign receivables, excluding receivables due from affiliates, which generally represent more of a collection risk than the domestic receivables, although as of December 31, 2017 no individual material amounts were deemed to have a heightened risk of collectability. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II Valuation and Qualifying Accounts | |
Schedule II Valuation and Qualifying Accounts | Schedule II SEABOARD CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts (In Millions) Balance at Balance at beginning of year Provision (1) Net deductions (2) end of year Allowance for Doubtful Accounts: Year Ended December 31, 2017 $ 14 16 (1) $ 29 Year Ended December 31, 2016 $ 21 (1) (6) $ 14 Year Ended December 31, 2015 $ 12 13 (4) $ 21 (1) During 2017, $12 million of the provision was charged to selling, general and administrative expenses, $2 million to income from affiliates related to reserves on convertible notes and $2 million to cost of sales related to a rebate reserve. (2) Includes write-offs net of recoveries and currency translation adjustments. Balance at Balance at beginning of year Provision (1) Net deductions end of year Allowance for Notes Receivable: Year Ended December 31, 2017 $ 16 — — $ 16 Year Ended December 31, 2016 $ — 16 — $ 16 Balance at Charge (credit) Balance at beginning of year to expense end of year Allowance for Deferred Tax Assets: Year Ended December 31, 2017 $ 58 1 $ 59 Year Ended December 31, 2016 $ 19 39 $ 58 Year Ended December 31, 2015 $ 21 (2) $ 19 Balance at Credit Balance at beginning of year to expense end of year Reserve for LIFO Valuation: Year Ended December 31, 2017 $ 21 10 $ 31 Year Ended December 31, 2016 $ 28 (7) $ 21 Year Ended December 31, 2015 $ 37 (9) $ 28 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Investments in Affiliates | Principles of Consolidation and Investments in Affiliates The consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in non-controlled affiliates where we have significant influence are accounted for by the equity method. Financial information from certain foreign subsidiaries and affiliates is reported on a one- to three-month lag, depending on the specific entity. |
Short-Term Investments | Short-Term Investments Short-term investments are retained for future use in the business. Investments held by Seaboard that are categorized as trading securities are reported at their estimated fair value with any unrealized gains and losses included in other investment income (loss), net on the consolidated statements of comprehensive income. Purchases and sales are recorded on a settlement date basis. Gains and losses on sale of investments are generally based on the specific identification method. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and generally do not bear interest. The Power segment, however, collects interest on certain past due accounts, and the Commodity Trading and Milling (“CT&M”) segment provides extended payment terms for certain customers in certain countries due to local market conditions. The allowance for doubtful accounts is Seaboard’s best estimate of the amount of probable credit losses. For most operating segments, Seaboard uses a specific identification approach to determine, in management’s judgment, the collection value of certain past due accounts based on contractual terms. For the Marine segment, the allowance for doubtful accounts is based on an aging percentage methodology primarily based on historical write-off experience. Seaboard reviews its allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventories | Inventories Seaboard uses the lower of last-in, first-out (“LIFO”) cost or market for determining inventory cost of live hogs, fresh pork product and related materials. Grain, flour and feed inventories at foreign milling operations are valued at the lower of weighted average cost and net realizable value. All other inventories are valued at the lower of first-in, first-out (“FIFO”) cost and net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are carried at cost and are being depreciated on the straight-line method over useful lives, ranging from 3 to 30 years. Property, plant and equipment leases that are deemed to be installment purchase obligations have been capitalized and included in the property, plant and equipment accounts. Routine and planned major maintenance, repairs and minor renewals are expensed as incurred, while major renewals and improvements are capitalized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, primarily property, plant and equipment, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Notes Receivable from Affiliates | Notes Receivable from Affiliates Seaboard monitors the credit quality of notes receivable from its affiliates by obtaining and reviewing financial information for these affiliates on a monthly basis and by having Seaboard representatives serve on the Board of Directors of these affiliates. If based on current information and events it is probable that Seaboard will be unable to collect all amounts due according to the contractual terms of the notes receivable from affiliates and an amount can be reasonably estimated, Seaboard will write down the notes receivable to estimated realizable value. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is assessed annually for impairment by each reporting unit at the quarter end closest to the anniversary date of the acquisition, or more frequently if circumstances indicate that impairment is likely. Separable intangible assets with finite lives are amortized over their estimated useful lives. Any one event or a combination of events such as change in the business climate, a negative change in relationships with significant customers and changes to strategic decisions, including decisions to expand made in response to economic or competitive conditions, could require an interim assessment prior to the next required annual assessment. Goodwill is primarily related to the repurchase in 2007 of a noncontrolling interest of Seaboard Foods LLC (“Seaboard Foods”) in the Pork segment for a total of $12 million. Due to acquisitions during 2016 in the Pork segment and CT&M segment, goodwill increased $6 million and $1 million, respectively. Also, the $3 million change in goodwill during 2017 is related to an acquisition in the CT&M segment. Based on the annual assessment conducted by these reporting units during 2017, there were no impairment charges recorded for the year ended December 31, 2017. |
Accrued Self-Insurance | Accrued Self-Insurance Seaboard is self-insured for certain levels of workers’ compensation, health care coverage, property damage, vehicle, product recall and general liability. The cost of these self-insurance programs is accrued based upon estimated settlements for known and anticipated claims. Changes in estimates to previously recorded reserves are reflected in current operating results. |
Asset Retirement Obligation | Asset Retirement Obligation Seaboard has recorded long-lived assets and a related liability for the asset retirement obligation costs associated with the closure of the hog lagoons it is legally obligated to close in the future should Seaboard cease operations or plan to close such lagoons voluntarily in accordance with a changed operating plan. Based on detailed assessments and appraisals obtained to estimate the future asset retirement obligation costs, Seaboard recorded the present value of the projected costs in non-current other liabilities on the consolidated balance sheets with the retirement asset depreciated over the economic life of the related asset. The following table shows the changes in the asset retirement obligation during 2017 and 2016: Years ended December 31, (Millions of dollars) 2017 2016 Beginning balance $ 19 $ 18 Accretion expense 2 1 Liability for additional lagoons placed in service 1 — Ending balance $ 22 $ 19 |
Income Taxes | Income Taxes Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. |
Revenue Recognition | Revenue Recognition As a result of a marketing agreement with Triumph Foods, LLC (“Triumph”) and Seaboard Triumph Foods, LLC (“STF”), Seaboard’s sales prices for its pork products included in product revenues are primarily based on a margin sharing arrangement that considers the average sales price and mix of products sold from Seaboard’s, Triumph’s and STF’s hog processing plants. Seaboard earns a fee for marketing the pork products of Triumph and STF, and recognizes this fee as service revenue. Revenues for the CT&M segment are recognized when the commodity is delivered to the customer, collection is reasonably assured and the sales price is fixed or determinable. Revenues for cargo services in the Marine segment are recognized ratably over the transit time for each voyage, with expenses associated with cargo services recognized as incurred. Revenues for all other commercial exchanges are recognized at the time products are shipped or delivered in accordance with shipping terms or services rendered, the customer takes ownership and assumes risk of loss, collection is reasonably assured and the sales price is fixed or determinable. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to allowance for doubtful accounts, valuation of inventories, impairment of long-lived assets, potential write down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes and accrued pension liability. Actual results could differ from those estimates. |
Earnings Per Common Share | Earnings Per Common Share Earnings per common share are based upon the weighted average shares outstanding during the period. Basic and diluted earnings per share are the same for all periods presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, management considers all demand deposits, overnight investments and other investments with original maturities less than three months as cash equivalents. The following table shows the cash paid for interest and income taxes: Years ended December 31, (Millions of dollars) 2017 2016 2015 Interest, net of interest capitalized $ 30 $ 29 $ 17 Income taxes, net of refunds 32 31 60 |
Supplemental Non-Cash Transactions | Years ended December 31, (Millions of dollars) 2017 2016 2015 Interest, net of interest capitalized $ 30 $ 29 $ 17 Income taxes, net of refunds 32 31 60 Supplemental Non-Cash Transactions Seaboard had notes receivable from affiliates that accrued pay-in-kind interest income, primarily from one affiliate. On January 4, 2016, the interest on this note receivable was modified to eliminate future pay-in-kind interest as discussed in Note 4. Non-cash, pay-in-kind interest income and accretion of discount recognized on these notes receivable for the years ended December 31, 2017, 2016 and 2015 was $3 million, $3 million and $17 million, respectively. On October 28, 2016, Seaboard obtained control of Belarina Alimentos S. A., a flour production business in Brazil (“Belarina”). No cash or other consideration was transferred to the other shareholder whose ownership was diluted through revision of the shareholders agreement to restructure the affiliate debt and equity of Belarina. See Note 12 for the purchase price allocation table and other details. |
Foreign Currency Transactions and Translation | Foreign Currency Transactions and Translation Seaboard has operations in several foreign countries, and the currencies of the countries fluctuate in relation to the U.S. dollar. Certain of the major contracts and transactions, however, are denominated in U.S. dollars. In addition, the value of the U.S. dollar fluctuates in relation to the currencies of countries where certain of Seaboard’s foreign subsidiaries and affiliates primarily conduct business. These fluctuations result in exchange gains and losses. The activities of these foreign subsidiaries and affiliates are primarily conducted with U.S. subsidiaries or operate in hyper-inflationary environments. As a result, the financial statements of certain foreign subsidiaries and affiliates are re-measured using the U.S. dollar as the functional currency. Seaboard’s Sugar segment, four consolidated subsidiaries (CT&M segment businesses in Brazil, Canada, Guyana and Zambia) and eleven non-controlled, non-consolidated affiliates (a Marine segment business in Jamaica and CT&M segment businesses in Australia, Botswana, Colombia, Jamaica, Kenya, Lesotho, Morocco, South Africa, Turkey and Zambia) use local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at year-end exchange rates, and income and expenses are translated at average rates. Translation gains and losses are recorded as components of other comprehensive income (loss). For the consolidated subsidiaries and non-consolidated affiliates, U.S. dollar denominated net asset or liability conversions to the local currency are recorded through income. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Seaboard recognizes all derivatives as either assets or liabilities at their fair values. Accounting for changes in the fair value of a derivative depends on its designation and effectiveness. Derivatives qualify for treatment as hedges for accounting purposes when there is a high correlation between the change in fair value of the instrument and the related change in value of the underlying commitment. Additionally, in order to designate a derivative financial instrument as a hedge for accounting purposes, extensive record keeping is required. For derivatives that qualify as hedges for accounting purposes, the change in fair value has no net impact on earnings, to the extent the derivative is considered effective, until the hedged transaction affects earnings. For derivatives that are not designated as hedging instruments for accounting purposes, or for the ineffective portion of a hedging instrument, the change in fair value affects current period net earnings. Seaboard uses derivative instruments to manage various types of market risks, primarily including commodity futures and option contracts, foreign currency exchange agreements, interest rate exchange agreements and equity future contracts. While management believes each of these instruments primarily are entered into in order to effectively manage various market risks, as of December 31, 2017, none of the derivatives were designated and accounted for as hedges, primarily as a result of the extensive record-keeping requirements. From time to time, Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Adopted On December 31, 2017, Seaboard early adopted guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The adoption of this new guidance did not have a material impact on Seaboard’s financial position or net earnings. On January 1, 2017, Seaboard adopted guidance to simplify the subsequent measurement of inventory, excluding inventory measured using LIFO or the retail inventory method. Under the new standard, inventory is valued at the lower of cost and net realizable value. The adoption of this new guidance did not have a material impact on Seaboard’s financial position or net earnings. Recently Issued Accounting Standards Not Yet Adopted In March 2017, the Financial Accounting Standards Board (“FASB”) issued guidance that will require the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in inventory. The other components of net periodic benefit cost will be presented outside of operating income and will not be capitalizable. Seaboard will adopt this guidance on January 1, 2018, and believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In February 2016, the FASB issued guidance that a lessee should record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The recognition, measurement, and presentation of expenses and cash flows arising from a financing lease have not significantly changed from the previous guidance. For operating leases, a lessee is required to: (1) recognize a ROU asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. Seaboard will adopt this guidance on January 1, 2019, for all consolidated subsidiaries. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. Seaboard is in the preliminary stages of its assessment of the effect the guidance will have on its existing accounting policies and the consolidated financial statements, but expects there will be an increase in assets and liabilities on the consolidated balance sheets at adoption due to the recording of ROU assets and corresponding lease liabilities, which will likely be material. See Note 10 for information about Seaboard’s lease obligations. In January 2016, the FASB issued guidance that requires entities to measure equity investments, other than those accounted for using the equity method of accounting, at fair value and recognize any changes in fair value in net income if a readily determinable fair value exists. For investments without readily determinable fair values, the cost method of accounting is eliminated. An entity may elect to record these equity investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The new guidance is effective for interim and annual periods beginning after December 15, 2017. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings. In May 2014, the FASB issued guidance to develop a single, comprehensive revenue recognition model for all contracts with customers. This guidance requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods and services. This guidance supersedes nearly all existing revenue recognition guidance under GAAP. Seaboard will adopt this guidance on January 1, 2018, using the cumulative effect transition method, where any cumulative effect of initially adopting the guidance is recognized at the date of adoption. Based on management’s current assessment, the majority of Seaboard’s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. Seaboard believes the adoption of this guidance will not have a material impact on its financial position or net earnings, although it anticipates expansion of consolidated financial statement disclosures in order to comply with the guidance. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of changes in the asset retirement obligation | Years ended December 31, (Millions of dollars) 2017 2016 Beginning balance $ 19 $ 18 Accretion expense 2 1 Liability for additional lagoons placed in service 1 — Ending balance $ 22 $ 19 |
Schedule of amounts paid for interest and income taxes | Years ended December 31, (Millions of dollars) 2017 2016 2015 Interest, net of interest capitalized $ 30 $ 29 $ 17 Income taxes, net of refunds 32 31 60 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments | |
Summary of the amortized cost and estimated fair value of short-term investments classified as trading securities | December 31, 2017 December 31, 2016 Amortized Fair Amortized Fair (Millions of dollars) Cost Value Cost Value Domestic equity securities 619 752 444 482 Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 438 439 437 437 Foreign equity securities 266 319 198 199 Collateralized loan obligations 29 29 25 26 High yield securities 20 21 114 115 Money market funds held in trading accounts 10 10 13 13 Other trading securities 5 6 5 5 Total trading short-term investments $ 1,387 $ 1,576 $ 1,236 $ 1,277 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories | |
Summary of inventories | December 31, (Millions of dollars) 2017 2016 At lower of LIFO cost or market: Live hogs and materials $ 313 $ 273 Fresh pork and materials 28 34 341 307 LIFO adjustment (31) (21) Total inventories at lower of LIFO cost or market 310 286 At lower of FIFO cost and net realizable value: Grains, oilseeds and other commodities 253 279 Sugar produced and in process 38 30 Other 90 62 Total inventories at lower of FIFO cost and net realizable value 381 371 Grain, flour and feed at lower of weighted average cost and net realizable value 89 105 Total inventories $ 780 $ 762 |
Investments in and Advances t26
Investments in and Advances to Affiliates and Notes Receivable from Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Turkey | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Turkey Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 1,670 $ 1,813 $ 1,902 Net income (loss) $ (8) $ 139 $ 195 Total assets $ 999 $ 1,154 $ 1,087 Total liabilities $ 400 $ 529 $ 541 Total equity $ 599 $ 625 $ 546 |
Pork | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Pork Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 441 $ 319 $ 295 Net income (loss) $ (21) $ 22 $ 22 Total assets $ 596 $ 364 $ 247 Total liabilities $ 138 $ 14 $ 17 Total equity $ 458 $ 350 $ 230 |
Commodity Trading and Milling | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Commodity Trading and Milling Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 2,907 $ 2,871 $ 2,321 Net income (loss) $ 23 $ (6) $ (52) Total assets $ 1,793 $ 1,201 $ 1,265 Total liabilities $ 1,150 $ 734 $ 809 Total equity $ 643 $ 467 $ 456 |
Marine | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Marine Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 58 $ 47 $ 38 Net income $ 5 $ 7 $ 11 Total assets $ 229 $ 277 $ 148 Total liabilities $ 114 $ 109 $ 30 Total equity $ 115 $ 168 $ 118 |
Sugar | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Sugar Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 10 $ 10 $ 9 Net income $ 2 $ 3 $ 2 Total assets $ 10 $ 10 $ 9 Total liabilities $ 2 $ 2 $ 2 Total equity $ 8 $ 8 $ 7 |
Power | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |
Schedule of combined condensed financial information of non-controlled, non-consolidated affiliates | Power Segment December 31, (Millions of dollars) 2017 2016 2015 Net sales $ 105 $ 146 $ 141 Net income $ 23 $ 14 $ 12 Total assets $ 265 $ 261 $ 327 Total liabilities $ 145 $ 175 $ 219 Total equity $ 120 $ 86 $ 108 |
Net Property, Plant and Equip27
Net Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Property, Plant and Equipment | |
Summary of property, plant and equipment | Useful December 31, (Millions of dollars) Lives 2017 2016 Land and improvements - 15 years $ 224 $ 214 Buildings and improvements 30 years 525 486 Machinery and equipment - 20 years 1,253 1,142 Vessels and vehicles - 18 years 136 140 Office furniture and fixtures 5 years 34 32 Construction in progress 56 58 2,228 2,072 Accumulated depreciation and amortization (1,151) (1,066) Net property, plant and equipment $ 1,077 $ 1,006 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of reconciliation of computed expected tax expense excluding non-controlling interest to income tax expense (benefit) attributable to continuing operations | Years ended December 31, (Millions of dollars) 2017 2016 2015 Computed “expected” tax expense excluding noncontrolling interests $ 150 $ 134 $ 84 Adjustments to tax expense attributable to: Foreign tax differences (22) (14) 22 Tax-exempt income — (15) (11) State income taxes, net of federal benefit 9 5 1 Repatriation tax 112 — — Effect on deferreds of federal rate reduction (47) — — Federal tax credits (18) (31) (16) Domestic manufacturing deduction (2) (5) (8) Other (1) (4) (3) Total income tax expense $ 181 $ 70 $ 69 |
Schedule of components of earnings before income taxes | Years ended December 31, (Millions of dollars) 2017 2016 2015 United States $ 273 $ 272 $ 196 Foreign 155 110 44 Total earnings excluding noncontrolling interests 428 382 240 Net loss (income) attributable to noncontrolling interests 1 (2) (1) Total earnings before income taxes $ 427 $ 384 $ 241 |
Schedule of components of total income taxes | Years ended December 31, (Millions of dollars) 2017 2016 2015 Current: Federal $ 118 $ (1) $ 52 Foreign 19 21 20 State and local 2 7 6 Deferred: Federal 20 36 (14) Foreign 10 4 8 State and local 12 3 (3) Income tax expense 181 70 69 Unrealized changes in other comprehensive loss (3) (12) — Total income taxes $ 178 $ 58 $ 69 |
Schedule of components of the net deferred income tax liability | December 31, (Millions of dollars) 2017 2016 Deferred income tax liabilities: Depreciation $ 92 $ 112 Domestic partnerships 92 69 LIFO 3 10 Cash basis farming adjustment 5 9 Other 17 18 $ 209 $ 218 Deferred income tax assets: Reserves/accruals $ 61 $ 83 Deferred earnings of foreign subsidiaries 24 45 Net operating and capital loss carry-forwards 51 50 Tax credit carry-forwards 14 13 Other 6 8 156 199 Valuation allowance 59 58 Net deferred income tax liability $ 112 $ 77 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | (Millions of dollars) 2017 2016 Beginning balance at January 1 $ 13 $ 7 Additions for uncertain tax positions of prior years 3 6 Additions for uncertain tax positions of current year 3 2 Lapse of statute of limitations (1) (2) Ending balance at December 31 $ 18 $ 13 |
Notes Payable and Long-term D29
Notes Payable and Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable and Long-term Debt | |
Summary of long-term debt | December 31, (Millions of dollars) 2017 2016 Term Loan due 2022 $ 484 $ 497 Foreign subsidiary obligations due 2018 through 2023 52 20 Total long-term debt at face value 536 517 Current maturities of long-term debt and unamortized discount (54) (18) Long-term debt, less current maturities and unamortized discount $ 482 $ 499 |
Derivatives and Fair Value of30
Derivatives and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivatives and Fair Value of Financial Instruments | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Balance December 31, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 752 $ 752 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 439 438 1 — Foreign equity securities 319 319 — — Collateralized loan obligations 29 — 29 — High yield securities 21 21 — — Money market funds held in trading accounts 10 10 — — Other trading securities 6 6 — — Trading securities – other current assets: Domestic equity securities 35 35 — — Money market funds held in trading accounts 5 5 — — Foreign equity securities 4 4 — — Fixed income securities 2 2 — — Derivatives: Commodities (1) 4 4 — — Foreign currencies 3 — 3 — Total Assets $ 1,629 $ 1,596 $ 33 $ — Liabilities: Derivatives: Commodities (1) $ 6 $ 6 $ — $ — Foreign currencies 6 — 6 — Total Liabilities $ 12 $ 6 $ 6 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2017, the commodity derivatives had a margin account balance of $20 million resulting in a net other current asset on the consolidated balance sheet of $18 million. Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Trading securities – short-term investments: Domestic equity securities $ 482 $ 482 $ — $ — Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries 437 437 — — Foreign equity securities 199 199 — — High yield securities 115 15 100 — Collateralized loan obligations 26 — 26 — Money market funds held in trading accounts 13 13 — — Other trading securities 5 5 — — Trading securities – other current assets: Domestic equity securities 30 30 — — Foreign equity securities 3 3 — — Fixed income mutual funds 3 3 — — Other 4 4 — — Derivatives: Commodities (1) 3 3 — — Foreign currencies 1 — 1 — Total Assets $ 1,321 $ 1,194 $ 127 $ — Liabilities: Derivatives: Commodities (1) $ 1 $ 1 $ — $ — Interest rate swaps 4 — 4 — Foreign currencies 4 — 4 — Total Liabilities $ 9 $ 1 $ 8 $ — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2016, the commodity derivatives had a margin account balance of $10 million resulting in a net other current asset on the consolidated balance sheet of $12 million. |
Schedule of amortized cost and estimated fair values of investments and long term debt | December 31, 2017 2016 (Millions of dollars) Amortized Cost Fair Value Amortized Cost Fair Value Short-term investments, trading securities $ 1,387 $ 1,576 $ 1,236 $ 1,277 Long-term debt 535 535 516 516 |
Schedule of gain or (loss) recognized for each type of derivative and its location in the condensed consolidated statements of comprehensive income | (Millions of dollars) 2017 2016 Commodities Cost of sales $ (9) $ 21 Foreign currencies Cost of sales (7) (27) Foreign currencies Foreign currency (1) 1 Interest rate Miscellaneous, net — (2) |
Schedule of fair value of each type of derivative and its location in the condensed consolidated balance sheets | Asset Derivatives Liability Derivatives December 31, December 31, December 31, December 31, (Millions of dollars) 2017 2016 2017 2016 Commodities (1) Other current assets $ 4 $ Other current liabilities $ 6 $ Foreign currencies Other current assets 3 Other current liabilities 6 4 Interest rate Other current assets — — Other current liabilities — (1) Seaboard’s commodity derivative assets and liabilities are presented in the consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2017 and 2016, the commodity derivatives had a margin account balance of $20 million and $10 million, respectively, resulting in a net other current asset on the consolidated balance sheets of $18 million and $12 million, respectively. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits | |
Schedule of Plans' assets measured at estimated fair value | Balance December 31, (Millions of dollars) 2017 Level 1 Level 2 Level 3 Assets: Domestic equity securities $ 80 $ 80 $ — $ — Foreign equity securities 53 53 — — Domestic fixed income mutual funds 25 25 — — Money market funds 2 2 — — Foreign fixed income mutual funds 11 11 — — Total Assets $ 171 $ 171 $ — $ — Balance December 31, (Millions of dollars) 2016 Level 1 Level 2 Level 3 Assets: Domestic equity securities $ 76 $ 76 $ — $ — Foreign equity securities 35 35 — — Domestic fixed income mutual funds 17 17 — — Real estate mutual fund 8 8 — — Commodity mutual funds 4 4 — — Money market funds 4 4 — — Foreign fixed income mutual funds 2 2 — — Other 5 — 5 — Total Assets $ 151 $ 146 $ 5 $ — |
Schedule of assumptions used in determining pension information for plans | Years ended December 31, 2017 2016 2015 Weighted average assumptions Discount rate used to determine obligations 2.75 - 3.80 % 2.90 - 4.65 % 3.20 - 4.80 % Discount rate used to determine net periodic benefit cost 2.90 - 4.60 % 3.20 - 4.80 % 2.70 - 4.40 % Expected return on plan assets 6.50 % 6.75 - 7.00 % 6.75 - 7.50 % Long-term rate of increase in compensation levels 4.00 % 4.00 % 4.00 % |
Schedule of the funded status | December 31, 2017 2016 (Millions of dollars) Accumulated benefits exceed assets Assets exceed accumulated benefits Accumulated benefits exceed assets Total Reconciliation of benefit obligation: Benefit obligation at beginning of year $ 262 $ 70 $ 179 $ 249 Service cost 9 4 5 9 Interest cost 11 3 8 11 Actuarial losses 29 — 6 6 Plan settlements (9) — — — Benefits paid (3) (4) (9) (13) Other 1 — — — Benefit obligation at end of year $ 300 $ 73 $ 189 $ 262 Reconciliation of fair value of plan assets: Fair value of plan assets at beginning of year $ 151 $ 46 $ 68 $ 114 Actual return on plan assets 25 6 4 10 Employer contributions 10 39 1 40 Plan settlements (9) — — — Benefits paid (6) (4) (9) (13) Fair value of plan assets at end of year $ 171 $ 87 $ 64 $ 151 Funded status $ (129) $ 14 $ (125) $ (111) |
Schedule of net periodic benefit cost of plans | Years ended December 31, (Millions of dollars) 2017 2016 2015 Components of net periodic benefit cost: Service cost $ 9 $ 9 $ 10 Interest cost 11 11 10 Expected return on plan assets (10) (8) (8) Amortization and other 5 5 5 Settlement loss recognized 2 — — Agreement termination gain — — (1) Net periodic benefit cost $ 17 $ 17 $ 16 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of non-cancelable purchase commitments and commitments under other agreements | Years ended December 31, (Millions of dollars) 2018 2019 2020 2021 2022 Thereafter Hog procurement contracts $ 81 $ 78 $ 78 $ 81 $ 63 $ 80 Grain and feed ingredients 107 3 — — — — Grain purchase contracts for resale 367 — — — — — Fuel supply contracts 44 — — — — — Equipment purchases and facility improvements 37 — — — — — Other purchase commitments 42 1 — — — — Total firm purchase commitments 678 82 78 81 63 80 Vessel, time and voyage-charters 39 29 26 26 13 33 Contract grower agreements 42 33 29 25 16 44 Other operating lease payments 29 29 26 25 26 151 Investment in affiliates 16 14 14 10 — — Total unrecognized non-cancelable commitments $ 804 $ 187 $ 173 $ 167 $ 118 $ 308 |
Stockholders' Equity and Accu33
Stockholders' Equity and Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity and Accumulated Other Comprehensive Loss | |
Schedule of components of accumulated other comprehensive loss, net of related taxes | Cumulative Foreign Unrealized Currency Gain Unrecognized Translation on Pension (Millions of dollars) Adjustment Investments Cost Total Balance December 31, 2015 $ (228) $ 1 $ (51) $ (278) Other comprehensive income (loss) before reclassifications (26) 1 (4) (29) Amounts reclassified from accumulated other comprehensive loss to net earnings — — 3 (1) 3 Other comprehensive income (loss), net of tax (26) 1 (1) (26) Balance December 31, 2016 $ (254) $ 2 $ (52) $ (304) Other comprehensive income (loss) before reclassifications (6) 5 (8) (9) Amounts reclassified from accumulated other comprehensive loss to net earnings — — 4 (1) 4 Other comprehensive income (loss), net of tax (6) 5 (4) (5) Amounts reclassified from accumulated other comprehensive loss to retained earnings (37) (2) — (8) (2) (45) Balance December 31, 2017 $ (297) $ 7 $ (64) $ (354) (1) This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and recorded in operating income. See Note 9 for further discussion. (2) This represents the adoption of accounting guidance to reclassify $45 million of tax effects from accumulated other comprehensive loss to retained earnings in the consolidated financial statements for the year ended December 31, 2017. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
New Fashion Pork, LLP | |
Acquisitions | |
Schedule of allocation of purchase price | (Millions of dollars) Inventories $ 6 Property, plant and equipment 34 Total consideration transferred $ 40 |
Texas Farm LLC | |
Acquisitions | |
Schedule of allocation of purchase price | (Millions of dollars) Inventories $ 16 Property, plant and equipment 42 Goodwill 3 Accounts payable (2) Total consideration transferred $ 59 |
Christensen Farms | |
Acquisitions | |
Schedule of allocation of purchase price | (Millions of dollars) Inventories $ 33 Property, plant and equipment 111 Intangible assets 1 Goodwill 3 Total consideration transferred $ 148 |
Belarina | |
Acquisitions | |
Schedule of allocation of purchase price | (Millions of dollars) Accounts receivable $ 7 Inventories 6 Property, plant and equipment 25 Other assets 4 Goodwill 1 Third-party debt (14) Other liabilities (11) Total business valuation $ 18 Fair value of pre-existing interest $ 18 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Summary of specific financial information related to sales to external customers | Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 1,609 $ 1,443 $ 1,332 Commodity Trading and Milling 2,945 2,778 3,022 Marine 956 916 940 Sugar 186 147 188 Power 97 79 97 All Other 16 16 15 Segment/Consolidated Totals $ 5,809 $ 5,379 $ 5,594 |
Summary of specific financial information related to operating income (loss) | Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 188 $ 175 $ 116 Commodity Trading and Milling 25 38 2 Marine 21 33 19 Sugar 21 (12) 2 Power 9 7 7 All Other 2 2 2 Segment Totals 266 243 148 Corporate (34) (21) (22) Consolidated Totals $ 232 $ 222 $ 126 |
Summary of specific financial information related to income (loss) from affiliates | Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ (10) $ 11 $ 11 Commodity Trading and Milling 7 (10) (50) Marine (7) 1 2 Sugar 1 2 1 Power 6 4 3 Turkey (4) 73 103 Segment/Consolidated Totals $ (7) $ 81 $ 70 |
Summary of specific financial information related to depreciation and amortization | Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 69 $ 56 $ 44 Commodity Trading and Milling 10 6 5 Marine 24 26 26 Sugar 7 6 8 Power 8 8 8 Segment Totals 118 102 91 Corporate — — — Consolidated Totals $ 118 $ 102 $ 91 |
Summary of specific financial information related to total assets | December 31, (Millions of dollars) 2017 2016 Pork $ 1,309 $ 1,157 Commodity Trading and Milling 964 989 Marine 376 314 Sugar 197 166 Power 188 196 Turkey 315 493 All Other 4 6 Segment Totals 3,353 3,321 Corporate 1,808 1,434 Consolidated Totals $ 5,161 $ 4,755 |
Summary of specific financial information related to investments in and advances to affiliates | December 31, (Millions of dollars) 2017 2016 Pork $ 231 $ 175 Commodity Trading and Milling 240 207 Marine 28 33 Sugar 4 4 Power 38 30 Turkey 310 324 Segment/Consolidated Totals $ 851 $ 773 |
Summary of specific financial information related to capital expenditures | Years ended December 31, (Millions of dollars) 2017 2016 2015 Pork $ 100 $ 69 $ 40 Commodity Trading and Milling 15 35 40 Marine 37 19 43 Sugar 20 33 15 Power 1 1 1 Segment Totals 173 157 139 Corporate — 1 — Consolidated Totals $ 173 $ 158 $ 139 |
Geographic summary of net sales based on the location of product delivery | Years ended December 31, (Millions of dollars) 2017 2016 2015 Caribbean, Central and South America $ 2,295 $ 1,990 $ 2,112 Africa 1,483 1,572 1,606 United States 1,271 1,161 1,135 Pacific Basin and Far East 393 309 357 Canada/Mexico 238 236 242 Europe 99 40 71 All other 30 71 71 Totals $ 5,809 $ 5,379 $ 5,594 |
Geographic summary of the entity's long-lived assets according to their physical location and primary port for the vessels | December 31, (Millions of dollars) 2017 2016 United States $ 784 $ 713 Dominican Republic 114 122 Argentina 73 67 All other 115 106 Totals $ 1,086 $ 1,008 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) $ in Millions | Oct. 28, 2016USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2007USD ($) |
Operations of Seaboard Corporation and its Subsidiaries | ||||||
Percentage of ownership interest held by Seaboard Flour LLC and SFC Preferred LLC (Parent Companies) | 76.00% | 76.00% | ||||
Goodwill and Other Intangible Assets | ||||||
Goodwill | $ 22 | $ 19 | $ 22 | |||
Impairment charges | 0 | |||||
Changes in the asset retirement obligation | ||||||
Beginning balance | 19 | 18 | 18 | |||
Accretion expense | 2 | 1 | ||||
Liability for additional lagoons placed in service | 1 | |||||
Ending balance | 22 | 19 | $ 18 | $ 22 | ||
Cash and Cash Equivalents | ||||||
Interest | 30 | 29 | 17 | |||
Income taxes (net of refunds) | 32 | 31 | 60 | |||
Supplemental Non-Cash Transactions | ||||||
Non-cash, pay-in-kind interest income and accretion of discount recognized on a note receivable from an affiliate | $ 3 | 3 | $ 17 | |||
Foreign Currency Transactions and Translation | ||||||
Number of consolidated subsidiaries using local currency as their functional currency | item | 4 | |||||
Number of non-controlled, non-consolidated affiliates using local currency as their functional currency | item | 11 | |||||
Minimum | ||||||
Principles of Consolidation and Investments in Affiliates | ||||||
Time lag for reporting financial information | 1 month | |||||
Property, Plant and Equipment | ||||||
Useful Lives | 3 years | |||||
Maximum | ||||||
Principles of Consolidation and Investments in Affiliates | ||||||
Time lag for reporting financial information | 3 months | |||||
Property, Plant and Equipment | ||||||
Useful Lives | 30 years | |||||
Belarina | ||||||
Supplemental Non-Cash Transactions | ||||||
Acquisition of business, cash consideration | $ 0 | |||||
Pork | ||||||
Goodwill and Other Intangible Assets | ||||||
Goodwill | $ 12 | |||||
Increase in goodwill | 6 | |||||
Commodity Trading and Milling | ||||||
Goodwill and Other Intangible Assets | ||||||
Increase in goodwill | $ 3 | $ 1 | ||||
Commodity Trading and Milling | Belarina | ||||||
Principles of Consolidation and Investments in Affiliates | ||||||
Time lag for reporting financial information | 3 months | |||||
Goodwill and Other Intangible Assets | ||||||
Goodwill | $ 1 | |||||
Supplemental Non-Cash Transactions | ||||||
Acquisition of business, cash consideration | $ 0 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Derivatives (Details) | Dec. 31, 2017item |
Designated as hedge | |
Derivative commodity instruments | |
Number of derivative agreements | 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 27, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments | ||||
Change in unrealized gains (losses) on trading securities | $ 146 | $ 49 | $ (12) | |
Amortized Cost | 1,387 | 1,236 | ||
Fair Value | 1,576 | 1,277 | ||
Money market funds | Denominated in other foreign currencies | ||||
Investments | ||||
Fair Value | 1 | |||
Money market funds | Denominated in other foreign currencies | Maximum | ||||
Investments | ||||
Fair Value | 1 | |||
Domestic equity securities | ||||
Investments | ||||
Amortized Cost | 619 | 444 | ||
Fair Value | 752 | 482 | ||
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | ||||
Investments | ||||
Amortized Cost | 438 | 437 | ||
Fair Value | 439 | 437 | ||
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Subsequent Event | ||||
Investments | ||||
Proceeds from sale of securities | $ 314 | |||
Foreign equity securities | ||||
Investments | ||||
Amortized Cost | 266 | 198 | ||
Fair Value | 319 | 199 | ||
Foreign equity securities | Denominated in foreign currencies | ||||
Investments | ||||
Fair Value | 114 | 91 | ||
Foreign equity securities | Denominated in Euros | ||||
Investments | ||||
Fair Value | 48 | 35 | ||
Foreign equity securities | Denominated in Japanese Yen | ||||
Investments | ||||
Fair Value | 25 | 20 | ||
Foreign equity securities | Denominated in British pounds | ||||
Investments | ||||
Fair Value | 20 | 16 | ||
Foreign equity securities | Denominated in Swiss Franc | ||||
Investments | ||||
Fair Value | 6 | 6 | ||
Foreign equity securities | Denominated in other foreign currencies | ||||
Investments | ||||
Fair Value | 15 | 14 | ||
Collateralized loan obligation | ||||
Investments | ||||
Amortized Cost | 29 | 25 | ||
Fair Value | 29 | 26 | ||
High yield securities | ||||
Investments | ||||
Amortized Cost | 20 | 114 | ||
Fair Value | 21 | 115 | ||
Money market funds held in trading accounts | ||||
Investments | ||||
Amortized Cost | 10 | 13 | ||
Fair Value | 10 | 13 | ||
Other trading securities | ||||
Investments | ||||
Amortized Cost | 5 | 5 | ||
Fair Value | $ 6 | 5 | ||
Morocco | Grain trading and poultry business | ||||
Investments | ||||
Percentage of ownership interest accounted for as equity method investment | 19.40% | |||
Amount invested under cost method | $ 18 | |||
Other non-current assets | ||||
Investments | ||||
Cost method investments | $ 6 | $ 28 |
Inventories (Details)
Inventories (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
At lower of LIFO cost or market: | |||
Live hogs and materials | $ 313 | $ 273 | |
Fresh pork and materials | 28 | 34 | |
Inventories at lower of LIFO cost or market, Gross | 341 | 307 | |
LIFO adjustment | (31) | (21) | |
Total inventories at lower of LIFO cost or market | 310 | 286 | |
At lower of FIFO cost and net realizable value: | |||
Grains, oilseeds and other commodities | 253 | 279 | |
Sugar produced and in process | 38 | 30 | |
Other | 90 | 62 | |
Total inventories at lower of FIFO cost and net realizable value | 381 | 371 | |
Grain, flour and feed at lower of weighted average cost and net realizable value | 89 | 105 | |
Total inventories | 780 | 762 | |
LIFO method increase (decrease) in earnings | $ (6) | $ 5 | $ 5 |
LIFO method increase (decrease) in earnings per share (in dollars per share) | $ (5.40) | $ 3.92 | $ 4.39 |
Amount that inventories would have been higher by if the FIFO method had been used | $ 31 | $ 21 |
Investments in and Advances t40
Investments in and Advances to Affiliates and Notes Receivable from Affiliates (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017USD ($)item | Sep. 28, 2013USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2017USD ($)item | Apr. 02, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 04, 2015USD ($)MW | Dec. 31, 2017USD ($)item | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2011USD ($) | Oct. 28, 2016 | Oct. 27, 2016USD ($) | Oct. 01, 2016USD ($) | Jan. 30, 2016 | May 31, 2013 | |
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Pay-in-kind interest and accretion on notes receivable from affiliates | $ 3 | $ 3 | $ 17 | ||||||||||||||
Investments in and advances to affiliates | $ 851 | $ 851 | $ 851 | 851 | 773 | ||||||||||||
Income tax expense | 181 | 70 | 69 | ||||||||||||||
Income (loss) from affiliates | (7) | 81 | 70 | ||||||||||||||
Foreign currency translation adjustment | (6) | (26) | (34) | ||||||||||||||
Receivables due from affiliates | 113 | 113 | 113 | 113 | 110 | ||||||||||||
Pork | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investments in and advances to affiliates | 231 | 231 | 231 | 231 | 175 | ||||||||||||
Income (loss) from affiliates | (10) | 11 | 11 | ||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 441 | 319 | 295 | ||||||||||||||
Net income | (21) | 22 | 22 | ||||||||||||||
Total assets | 596 | 596 | $ 247 | 596 | 596 | 364 | 247 | ||||||||||
Total liabilities | 138 | 138 | 17 | 138 | 138 | 14 | 17 | ||||||||||
Total equity | 458 | 458 | 230 | 458 | 458 | 350 | 230 | ||||||||||
Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investments in and advances to affiliates | 240 | 240 | 240 | 240 | 207 | ||||||||||||
Income (loss) from affiliates | 7 | (10) | (50) | ||||||||||||||
Carrying value of investment in affiliates over (under) entity's share of affiliates' book value | 49 | 49 | 49 | 49 | |||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 2,907 | 2,871 | 2,321 | ||||||||||||||
Net income | 23 | (6) | (52) | ||||||||||||||
Total assets | 1,793 | 1,793 | 1,265 | 1,793 | 1,793 | 1,201 | 1,265 | ||||||||||
Total liabilities | 1,150 | 1,150 | 809 | 1,150 | 1,150 | 734 | 809 | ||||||||||
Total equity | 643 | 643 | 456 | 643 | 643 | 467 | 456 | ||||||||||
Marine | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investments in and advances to affiliates | 28 | 28 | 28 | 28 | 33 | ||||||||||||
Income (loss) from affiliates | (7) | 1 | 2 | ||||||||||||||
Carrying value of investment in affiliates over (under) entity's share of affiliates' book value | (26) | (26) | (26) | (26) | |||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 58 | 47 | 38 | ||||||||||||||
Net income | 5 | 7 | 11 | ||||||||||||||
Total assets | 229 | 229 | 148 | 229 | 229 | 277 | 148 | ||||||||||
Total liabilities | 114 | 114 | 30 | 114 | 114 | 109 | 30 | ||||||||||
Total equity | 115 | 115 | 118 | 115 | $ 115 | 168 | 118 | ||||||||||
Time lag for reporting financial information | 3 months | ||||||||||||||||
Sugar | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investments in and advances to affiliates | 4 | 4 | 4 | $ 4 | 4 | ||||||||||||
Income (loss) from affiliates | 1 | 2 | 1 | ||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 10 | 10 | 9 | ||||||||||||||
Net income | 2 | 3 | 2 | ||||||||||||||
Total assets | 10 | 10 | 9 | 10 | 10 | 10 | 9 | ||||||||||
Total liabilities | 2 | 2 | 2 | 2 | 2 | 2 | 2 | ||||||||||
Total equity | 8 | 8 | 7 | 8 | $ 8 | 8 | 7 | ||||||||||
Time lag for reporting financial information | 1 month | ||||||||||||||||
Turkey | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Operating income | $ 15 | 162 | 231 | ||||||||||||||
Investments in and advances to affiliates | 310 | 310 | 310 | 310 | 324 | ||||||||||||
Income (loss) from affiliates | (4) | 73 | 103 | ||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 1,670 | 1,813 | 1,902 | ||||||||||||||
Net income | (8) | 139 | 195 | ||||||||||||||
Total assets | 999 | 999 | 1,087 | 999 | 999 | 1,154 | 1,087 | ||||||||||
Total liabilities | 400 | 400 | 541 | 400 | 400 | 529 | 541 | ||||||||||
Total equity | 599 | 599 | 546 | 599 | 599 | 625 | 546 | ||||||||||
Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investments in and advances to affiliates | 38 | 38 | 38 | 38 | 30 | ||||||||||||
Income (loss) from affiliates | 6 | 4 | 3 | ||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Net sales | 105 | 146 | 141 | ||||||||||||||
Net income | 23 | 14 | 12 | ||||||||||||||
Total assets | 265 | 265 | 327 | 265 | 265 | 261 | 327 | ||||||||||
Total liabilities | 145 | 145 | 219 | 145 | 145 | 175 | 219 | ||||||||||
Total equity | 120 | $ 120 | 108 | $ 120 | $ 120 | 86 | 108 | ||||||||||
Subordinated loan | Notes receivable | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Paid-in-kind interest | $ 6 | ||||||||||||||||
Minimum | |||||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Time lag for reporting financial information | 1 month | ||||||||||||||||
Maximum | |||||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Time lag for reporting financial information | 3 months | ||||||||||||||||
Morocco | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 19.40% | 19.40% | 19.40% | 19.40% | |||||||||||||
Additional investment or capital contribution | $ 7 | ||||||||||||||||
Combined condensed financial information of the non-controlled, non-consolidated affiliates | |||||||||||||||||
Time lag for reporting financial information | 3 months | ||||||||||||||||
Dominican Republic | Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Number of businesses | item | 2 | ||||||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Botswana | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 49.00% | 49.00% | 49.00% | 49.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Democratic Republic of Congo | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Gambia | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Kenya | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 35.00% | 35.00% | 35.00% | 35.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Kenya | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 49.00% | 49.00% | 49.00% | 49.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Lesotho | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Morocco | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 17.70% | 17.70% | 17.70% | 17.70% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Morocco | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 19.40% | 19.40% | 19.40% | 19.40% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Nigeria | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Nigeria | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 48.33% | 48.33% | 48.33% | 48.33% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | South Africa | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 30.00% | 30.00% | 30.00% | 30.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | South Africa | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Tanzania | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 49.00% | 49.00% | 49.00% | 49.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Zambia | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 49.00% | 49.00% | 49.00% | 49.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Colombia | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 40.00% | 40.00% | 40.00% | 40.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Colombia | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 42.00% | 42.00% | 42.00% | 42.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Ecuador | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Ecuador | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Guyana | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Peru | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Jamaica | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Haiti | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 23.33% | 23.33% | 23.33% | 23.33% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Turkey | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Australia | Minimum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 22.50% | 22.50% | 22.50% | 22.50% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Australia | Maximum | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | Canada | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 45.00% | 45.00% | 45.00% | 45.00% | |||||||||||||
Businesses conducting flour, maize and feed milling and poultry production and processing | United States | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 35.42% | 35.42% | 35.42% | 35.42% | |||||||||||||
Bakery business | Democratic Republic of Congo | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Notes receivable from affiliates, net | $ 15 | $ 15 | $ 15 | $ 15 | 19 | ||||||||||||
Income tax expense | 0 | ||||||||||||||||
Investment in business, advances and long-term note receivable | $ 0 | $ 0 | 0 | $ 0 | |||||||||||||
Income (loss) from affiliates | $ 4 | ||||||||||||||||
Percentage of note receivable guaranteed by the other shareholder | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Bakery business | Democratic Republic of Congo | Commodity Trading and Milling | Notes receivable | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Reserve on receivables from affiliates | 16 | ||||||||||||||||
Cargo terminal business | Jamaica | Marine | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 21.00% | 21.00% | 21.00% | 21.00% | |||||||||||||
Cargo terminal business | Haiti | Marine | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 36.00% | 36.00% | 36.00% | 36.00% | |||||||||||||
Investments in and advances to affiliates | $ 7 | ||||||||||||||||
Asset impairment charges | $ 5 | ||||||||||||||||
Notes receivable from affiliates, net | 8 | ||||||||||||||||
Cargo terminal business | Haiti | Marine | Notes receivable | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Asset impairment charges | 1 | ||||||||||||||||
Cargo terminal business | Haiti | Marine | Affiliate receivables | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Asset impairment charges | $ 3 | ||||||||||||||||
Sugar related businesses | Argentina | Sugar | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Number of businesses | item | 2 | ||||||||||||||||
Sugar related business one | Argentina | Sugar | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 46.00% | 46.00% | 46.00% | 46.00% | |||||||||||||
Sugar related business two | Argentina | Sugar | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Butterball, LLC | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Investee's intangible assets for trade name | $ 111 | $ 111 | $ 111 | $ 111 | |||||||||||||
Investee's intangible assets for goodwill | 74 | 74 | $ 74 | $ 74 | |||||||||||||
Percentage of the Butterball's earnings recorded as income from affiliates in the Consolidated Statements of Comprehensive Income (as a percent) | 52.50% | ||||||||||||||||
Income (loss) from affiliates | $ 6 | $ 18 | |||||||||||||||
Butterball, LLC | Subordinated loan | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Loan provided to affiliate | $ 100 | ||||||||||||||||
Maturity period of unsecured subordinated loan provided | 7 years | ||||||||||||||||
Interest rate on loan provided (as a percent) | 15.00% | 10.00% | |||||||||||||||
Interest rate on loan provided, portion payable in cash (as a percent) | 5.00% | ||||||||||||||||
Interest rate on loan provided, portion pay-in-kind (as a percent) | 10.00% | ||||||||||||||||
Notes receivable from affiliates, net | $ 89 | 161 | |||||||||||||||
Repayment of notes receivable | $ 164 | ||||||||||||||||
Butterball, LLC | Detachable warrants | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Additional equity interest that can be acquired upon exercise of warrants (as a percent) | 5.00% | 5.00% | 5.00% | 5.00% | |||||||||||||
Economic interest (as a percent) | 52.50% | 52.50% | 52.50% | 52.50% | |||||||||||||
Notes receivable from affiliates, net | $ 11 | ||||||||||||||||
Butterball, LLC | Term loan | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Loan provided to affiliate | $ 13 | ||||||||||||||||
Interest rate on loan provided (as a percent) | 12.00% | 12.00% | 12.00% | 12.00% | |||||||||||||
Notes receivable from affiliates, net | $ 4 | $ 4 | $ 4 | $ 4 | 8 | ||||||||||||
Period of extension granted on the maturity of notes receivable from related party | 6 months | ||||||||||||||||
Belarina | Brazil | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Investment in business, advances and long-term note receivable | 0 | ||||||||||||||||
Gross receivable due from affiliate | $ 17 | 17 | |||||||||||||||
Reserve on receivables from affiliates | 9 | ||||||||||||||||
Belarina | Brazil | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | ||||||||||||||||
Voting equity ownership percentage | 98.00% | ||||||||||||||||
Investment in equity and long-term advances | 14 | 29 | |||||||||||||||
Investments in and advances to affiliates | $ 63 | ||||||||||||||||
Income (loss) from affiliates | (10) | (60) | |||||||||||||||
Foreign currency translation adjustment | (4) | $ 5 | |||||||||||||||
Belarina | Brazil | Term loan | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Loan provided to affiliate | $ 13 | ||||||||||||||||
Flour milling business | Botswana | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 49.00% | 49.00% | |||||||||||||||
Amount invested under equity method | $ 8 | ||||||||||||||||
Seaboard Triumph Foods | Pork | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | ||||||||||||||||
Amount invested under equity method | $ 73 | $ 51 | $ 26 | ||||||||||||||
Commodity trading business | Georgia | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 40.00% | 40.00% | |||||||||||||||
Amount invested under equity method | $ 13 | ||||||||||||||||
Oilseed crushing business | Turkey | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 25.00% | 25.00% | |||||||||||||||
Amount invested under equity method | $ 10 | ||||||||||||||||
Commodity trading and flour milling business | Uruguay | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 45.00% | 45.00% | |||||||||||||||
Amount invested under equity method | $ 10 | ||||||||||||||||
Daily's | Pork | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Number of processing units | item | 3 | 3 | 3 | 3 | |||||||||||||
Triumph, Daily's and STF | Pork | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Fixed assets and other costs transferred | $ 14 | ||||||||||||||||
Peruvian affiliate | Commodity Trading and Milling | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Loan provided to affiliate | $ 12 | ||||||||||||||||
Prepayment penalty | $ 0 | ||||||||||||||||
Electricity generating facility | Dominican Republic | Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 29.90% | 29.90% | 29.90% | 29.90% | 29.90% | ||||||||||||
Amount invested under equity method | $ 10 | ||||||||||||||||
Capacity of power facility (in megawatts) | MW | 300 | ||||||||||||||||
Electricity generating facility | Dominican Republic | Maximum | Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership interest accounted as cost method investment | 20.00% | ||||||||||||||||
Energy related business one | Dominican Republic | Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 45.00% | 45.00% | 45.00% | 45.00% | |||||||||||||
Energy related business two | Dominican Republic | Power | |||||||||||||||||
Investments in and Advances to Affiliates and Notes Receivable from Affiliates | |||||||||||||||||
Percentage of ownership | 50.00% | 50.00% | 50.00% | 50.00% |
Net Property, Plant and Equip41
Net Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Property, plant and equipment | |||
Gross property, plant and equipment | $ 2,228 | $ 2,072 | $ 2,228 |
Accumulated depreciation and amortization | (1,151) | (1,066) | (1,151) |
Net property, plant and equipment | $ 1,077 | 1,006 | 1,077 |
Minimum | |||
Property, plant and equipment | |||
Useful Lives | 3 years | ||
Maximum | |||
Property, plant and equipment | |||
Useful Lives | 30 years | ||
Land and improvements | |||
Property, plant and equipment | |||
Gross property, plant and equipment | $ 224 | 214 | $ 224 |
Land and improvements | Minimum | |||
Property, plant and equipment | |||
Useful Lives | 3 years | ||
Land and improvements | Maximum | |||
Property, plant and equipment | |||
Useful Lives | 15 years | ||
Buildings and improvements | |||
Property, plant and equipment | |||
Useful Lives | 30 years | ||
Gross property, plant and equipment | 525 | 486 | $ 525 |
Machinery and equipment | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 1,253 | 1,142 | $ 1,253 |
Machinery and equipment | Minimum | |||
Property, plant and equipment | |||
Useful Lives | 3 years | ||
Machinery and equipment | Maximum | |||
Property, plant and equipment | |||
Useful Lives | 20 years | ||
Vessels and vehicles | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 136 | 140 | $ 136 |
Vessels and vehicles | Minimum | |||
Property, plant and equipment | |||
Useful Lives | 3 years | ||
Vessels and vehicles | Maximum | |||
Property, plant and equipment | |||
Useful Lives | 18 years | ||
Office furniture and fixtures | |||
Property, plant and equipment | |||
Useful Lives | 5 years | ||
Gross property, plant and equipment | 34 | 32 | $ 34 |
Construction in progress | |||
Property, plant and equipment | |||
Gross property, plant and equipment | 56 | 58 | $ 56 |
Capitalized interest | $ 4 | $ 4 |
Income Taxes (Details)
Income Taxes (Details) $ / shares in Units, $ in Millions | Dec. 31, 2018 | Jan. 01, 2018USD ($)item | Feb. 21, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2017USD ($)company | Dec. 31, 2016USD ($)company | Dec. 31, 2015USD ($)$ / shares |
2017 Tax Act | ||||||||
Federal income tax rate (as a percent) | 21.00% | 35.00% | 35.00% | 35.00% | ||||
Long-term income tax liability | $ 111 | |||||||
Term to repay long-term income tax liability | 8 years | |||||||
Income tax liability | 1 | |||||||
Reconciliation of computed expected tax expense excluding non-controlling interest to income tax expense (benefit) attributable to continuing operations | ||||||||
Computed "expected" tax expense excluding non-controlling interest | 150 | $ 134 | $ 84 | |||||
Adjustments to tax expense attributable to: | ||||||||
Foreign tax differences | (22) | (14) | 22 | |||||
Tax-exempt income | (15) | (11) | ||||||
State income taxes, net of federal benefit | 9 | 5 | 1 | |||||
Repatriation tax | 112 | |||||||
Effect of deferreds of federal rate reduction | (47) | |||||||
Federal tax credits | (18) | (31) | (16) | |||||
Domestic manufacturing deduction | (2) | (5) | (8) | |||||
Other | (1) | (4) | (3) | |||||
Income tax expense | 181 | 70 | 69 | |||||
Components of earnings before income taxes | ||||||||
United States | 273 | 272 | 196 | |||||
Foreign | 155 | 110 | 44 | |||||
Total earnings excluding non-controlling interest | 428 | 382 | 240 | |||||
Less: Net income attributable to noncontrolling interest | 1 | (2) | (1) | |||||
Earnings before income taxes | 427 | 384 | 241 | |||||
Current: | ||||||||
Federal | 118 | (1) | 52 | |||||
Foreign | 19 | 21 | 20 | |||||
State and local | 2 | 7 | 6 | |||||
Deferred: | ||||||||
Federal | 20 | 36 | (14) | |||||
Foreign | 10 | 4 | 8 | |||||
State and local | 12 | 3 | (3) | |||||
Income tax expense | 181 | 70 | 69 | |||||
Unrealized changes in other comprehensive loss | (3) | (12) | 0 | |||||
Total income taxes | 178 | 58 | 69 | |||||
Income taxes receivable | 51 | 48 | ||||||
Income taxes payable | 3 | 6 | ||||||
Deferred income tax liabilities: | ||||||||
Depreciation | 92 | 112 | ||||||
Domestic partnerships | 92 | 69 | ||||||
LIFO | 3 | 10 | ||||||
Cash basis farming adjustment | 5 | 9 | ||||||
Other | 17 | 18 | ||||||
Aggregate deferred income tax liabilities | 209 | 218 | ||||||
Deferred income tax assets: | ||||||||
Reserves/accruals | 61 | 83 | ||||||
Deferred earnings of foreign subsidiaries | 24 | 45 | ||||||
Net operating and capital loss carry-forwards | 51 | 50 | ||||||
Tax credit carry-forwards | 14 | 13 | ||||||
Other | 6 | 8 | ||||||
Aggregate deferred income tax assets | 156 | 199 | ||||||
Valuation allowance | 59 | 58 | ||||||
Net deferred income tax liability | 112 | 77 | ||||||
Accrued interest and penalties on uncertain tax positions | 3 | 2 | ||||||
Unrecognized tax benefits, if recognized, would affect the effective tax rate | 18 | 13 | ||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Balance at the beginning of the year | $ 18 | $ 18 | $ 18 | 13 | 7 | |||
Additions for uncertain tax positions of prior years | 3 | 6 | ||||||
Additions for uncertain tax positions of current year | 3 | 2 | ||||||
Lapse of statute of limitations | (1) | (2) | ||||||
Balance at the end of the year | $ 7 | 18 | 13 | 7 | ||||
Undistributed earnings from foreign operations | 1,279 | |||||||
Investments in limited partnerships | 7 | 8 | ||||||
Tax benefit arising due to difference between current and deferred taxes | $ 13 | $ 13 | ||||||
Tax benefit arising due to difference between current and deferred taxes per common share | $ / shares | $ 10.92 | $ 10.92 | ||||||
One-time Federal blender's credits recognized as revenue | $ 17 | |||||||
One-time Federal blender's credits recognized as revenue per common share | $ / shares | $ 14.88 | |||||||
Tax expense on Federal blender's credits recognized as revenue | $ 0 | |||||||
Other commitments | ||||||||
Contribution to long-term investment | $ 12 | 31 | $ 28 | |||||
Minimum | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Number of tax years typically subject to examination for major non-US jurisdictions | 3 years | |||||||
Maximum | ||||||||
2017 Tax Act | ||||||||
Federal income tax rate (as a percent) | 35.00% | |||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Number of tax years typically subject to examination for major non-US jurisdictions | 6 years | |||||||
Subsequent Event | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Additional tax expense due to change in tax status | 39 | |||||||
Additional deferred tax liabilities due to change in tax status | $ 39 | |||||||
Forecast | ||||||||
2017 Tax Act | ||||||||
Number of new U.S. tax base erosion provisions in the 2017 Tax Act | item | 2 | |||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
One-time Federal blender's credits recognized as revenue | $ 42 | |||||||
Refined coal processing plant | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Number of limited liability companies invested in | company | 2 | |||||||
Other commitments | ||||||||
Contribution to long-term investment | $ 10 | $ 14 | $ 9 | |||||
Solar energy production facilities | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Number of limited liability companies invested in | company | 2 | |||||||
Other commitments | ||||||||
Contribution to long-term investment | $ 10 | |||||||
Foreign | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Net operating loss carry-forwards (NOLs) | 160 | |||||||
State | ||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||||||||
Tax credit carry-forwards | $ 16 |
Notes Payable and Long-Term D43
Notes Payable and Long-Term Debt - Notes payable and bank lines (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Notes payable to bank | ||
Notes Payable and Long Term Debt | ||
Notes payable outstanding | $ 162 | $ 121 |
Weighted average interest rate (as a percent) | 10.48% | 14.88% |
Uncommitted and committed bank lines | ||
Notes Payable and Long Term Debt | ||
Letters of credit outstanding | $ 3 | |
Committed bank line | Wells Fargo | ||
Notes Payable and Long Term Debt | ||
Maximum capacity | $ 100 | |
Basis spread on variable rate (as a percent) | 0.50% | |
Unused commitment fee | 0.09% | |
Outstanding balance | $ 0 | |
Uncommitted bank lines | ||
Notes Payable and Long Term Debt | ||
Maximum capacity | 377 | |
Uncommitted bank lines | Foreign subsidiaries | ||
Notes Payable and Long Term Debt | ||
Notes payable outstanding | 115 | |
Maximum capacity | 327 | |
Uncommitted bank lines | Foreign subsidiaries | South African Rand | ||
Notes Payable and Long Term Debt | ||
Notes payable outstanding | 72 | |
Uncommitted bank lines | Foreign subsidiaries | Argentine pesos | ||
Notes Payable and Long Term Debt | ||
Notes payable outstanding | 30 | |
Uncommitted bank lines | Foreign subsidiaries | Zambian kwacha | ||
Notes Payable and Long Term Debt | ||
Notes payable outstanding | $ 5 |
Notes Payable and Long-Term D44
Notes Payable and Long-Term Debt - Summary of long-term debt (Details) - USD ($) $ in Millions | Dec. 04, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes Payable and Long Term Debt | |||
Total long-term debt at face value | $ 536 | $ 517 | |
Current maturities of long-term debt and unamortized discount | (54) | (18) | |
Long-term debt, less current maturities and unamortized discount | 482 | 499 | |
Payments of long-term debt | 17 | 5 | |
Term loan due 2022 | |||
Notes Payable and Long Term Debt | |||
Total long-term debt at face value | $ 484 | $ 497 | |
Face amount | $ 500 | ||
Proceeds from issuance of debt | 499 | ||
Discount | $ 1 | ||
Effective interest rate (as a percent) | 3.20% | 2.40% | |
Adjusted leverage ratio, maximum | 50.00% | ||
Minimum net worth base requirement | $ 2,000 | ||
Percentage of consolidated net income added to net worth base amount | 25.00% | ||
Maximum dividends per year | $ 25 | ||
Sum of subsidiary indebtedness and priority indebtedness as a percentage of consolidated tangible net worth, maximum | 15.00% | ||
Term loan due 2022 | Federal Funds Effective Rate | |||
Notes Payable and Long Term Debt | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
Term loan due 2022 | LIBOR | |||
Notes Payable and Long Term Debt | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Variable rate basis | one month | ||
Foreign subsidiary obligations due 2018 through 2023 | |||
Notes Payable and Long Term Debt | |||
Total long-term debt at face value | $ 52 | $ 20 |
Notes Payable and Long-Term D45
Notes Payable and Long-Term Debt - Maturities and foreign subsidiary obligations (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Maturities of long-term debt | ||
2,018 | $ 53 | |
2,019 | 34 | |
2,020 | 43 | |
2,021 | 39 | |
2,022 | 366 | |
Thereafter | 1 | |
Sugar | ||
Notes Payable and Long Term Debt | ||
Outstanding balance | $ 32 | |
Interest rate (as a percent) | 23.00% | |
Foreign subsidiary obligations due 2018 through 2023 | ||
Notes Payable and Long Term Debt | ||
Weighted average interest rate (as a percent) | 21.80% | 22.39% |
Foreign subsidiary obligations due 2018 through 2023 | Property, Plant and Equipment | ||
Notes Payable and Long Term Debt | ||
Collateral amount | $ 5 |
Derivatives and Fair Value of46
Derivatives and Fair Value of Financial Instruments - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets and liabilities measured at fair value on a recurring basis and also its level within the fair value hierarchy | ||
Transfers that occurred into or out of level 1 | $ 0 | $ 0 |
Transfers that occurred into or out of level 2 | 0 | 0 |
Transfers that occurred into or out of level 3 | 0 | 0 |
Assets: | ||
Trading securities | 1,576 | 1,277 |
Commodities | ||
Assets: | ||
Margin account | 20 | 10 |
Domestic equity securities | ||
Assets: | ||
Trading securities | 752 | 482 |
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | ||
Assets: | ||
Trading securities | 439 | 437 |
Foreign equity securities | ||
Assets: | ||
Trading securities | 319 | 199 |
High yield securities | ||
Assets: | ||
Trading securities | 21 | 115 |
Money market funds held in trading accounts | ||
Assets: | ||
Trading securities | 10 | 13 |
Fair Value | ||
Assets: | ||
Trading securities | 1,576 | 1,277 |
Recurring basis | Fair Value | ||
Assets: | ||
Total Assets | 1,629 | 1,321 |
Liabilities: | ||
Liabilities | 12 | 9 |
Recurring basis | Fair Value | Commodities | ||
Assets: | ||
Derivatives | 4 | 3 |
Margin account | 20 | 10 |
Derivative assets and liabilities, net basis | 18 | 12 |
Liabilities: | ||
Derivatives | 6 | 1 |
Recurring basis | Fair Value | Interest rate swaps | ||
Liabilities: | ||
Derivatives | 4 | |
Recurring basis | Fair Value | Foreign currencies | ||
Assets: | ||
Derivatives | 3 | 1 |
Liabilities: | ||
Derivatives | 6 | 4 |
Recurring basis | Fair Value | Domestic equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 752 | 482 |
Recurring basis | Fair Value | Domestic equity securities | Other current assets | ||
Assets: | ||
Trading securities | 35 | 30 |
Recurring basis | Fair Value | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 439 | 437 |
Recurring basis | Fair Value | Foreign equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 319 | 199 |
Recurring basis | Fair Value | Foreign equity securities | Other current assets | ||
Assets: | ||
Trading securities | 4 | 3 |
Recurring basis | Fair Value | Collateralized loan obligations | Short-term investments | ||
Assets: | ||
Trading securities | 29 | 26 |
Recurring basis | Fair Value | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | 21 | 115 |
Recurring basis | Fair Value | Money market funds held in trading accounts | Short-term investments | ||
Assets: | ||
Trading securities | 10 | 13 |
Recurring basis | Fair Value | Money market funds held in trading accounts | Other current assets | ||
Assets: | ||
Trading securities | 5 | |
Recurring basis | Fair Value | Other trading investments | Short-term investments | ||
Assets: | ||
Trading securities | 6 | 5 |
Recurring basis | Fair Value | Fixed income mutual funds | Other current assets | ||
Assets: | ||
Trading securities | 2 | 3 |
Recurring basis | Fair Value | Other | Other current assets | ||
Assets: | ||
Trading securities | 4 | |
Recurring basis | Level 1 | ||
Assets: | ||
Total Assets | 1,596 | 1,194 |
Liabilities: | ||
Liabilities | 6 | 1 |
Recurring basis | Level 1 | Commodities | ||
Assets: | ||
Derivatives | 4 | 3 |
Liabilities: | ||
Derivatives | 6 | 1 |
Recurring basis | Level 1 | Domestic equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 752 | 482 |
Recurring basis | Level 1 | Domestic equity securities | Other current assets | ||
Assets: | ||
Trading securities | 35 | 30 |
Recurring basis | Level 1 | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 438 | 437 |
Recurring basis | Level 1 | Foreign equity securities | Short-term investments | ||
Assets: | ||
Trading securities | 319 | 199 |
Recurring basis | Level 1 | Foreign equity securities | Other current assets | ||
Assets: | ||
Trading securities | 4 | 3 |
Recurring basis | Level 1 | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | 21 | 15 |
Recurring basis | Level 1 | Money market funds held in trading accounts | Short-term investments | ||
Assets: | ||
Trading securities | 10 | 13 |
Recurring basis | Level 1 | Money market funds held in trading accounts | Other current assets | ||
Assets: | ||
Trading securities | 5 | |
Recurring basis | Level 1 | Other trading investments | Short-term investments | ||
Assets: | ||
Trading securities | 6 | 5 |
Recurring basis | Level 1 | Fixed income mutual funds | Other current assets | ||
Assets: | ||
Trading securities | 2 | 3 |
Recurring basis | Level 1 | Other | Other current assets | ||
Assets: | ||
Trading securities | 4 | |
Recurring basis | Level 2 | ||
Assets: | ||
Total Assets | 33 | 127 |
Liabilities: | ||
Liabilities | 6 | 8 |
Recurring basis | Level 2 | Interest rate swaps | ||
Liabilities: | ||
Derivatives | 4 | |
Recurring basis | Level 2 | Foreign currencies | ||
Assets: | ||
Derivatives | 3 | 1 |
Liabilities: | ||
Derivatives | 6 | 4 |
Recurring basis | Level 2 | Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries | Short-term investments | ||
Assets: | ||
Trading securities | 1 | |
Recurring basis | Level 2 | Collateralized loan obligations | Short-term investments | ||
Assets: | ||
Trading securities | $ 29 | 26 |
Recurring basis | Level 2 | High yield securities | Short-term investments | ||
Assets: | ||
Trading securities | $ 100 |
Derivatives and Fair Value of47
Derivatives and Fair Value of Financial Instruments - Fair Value of Investments and Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of amortized cost and estimated fair values of investments and long term debt | ||
Short-term investments, trading debt securities | $ 1,576 | $ 1,277 |
Amortized Cost | ||
Schedule of amortized cost and estimated fair values of investments and long term debt | ||
Short-term investments, trading debt securities | 1,387 | 1,236 |
Long-term debt | 535 | 516 |
Fair Value | ||
Schedule of amortized cost and estimated fair values of investments and long term debt | ||
Short-term investments, trading debt securities | 1,576 | 1,277 |
Long-term debt | $ 535 | $ 516 |
Derivatives and Fair Value of48
Derivatives and Fair Value of Financial Instruments - Instruments and Agreements (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2017USD ($)itemagreement | Apr. 02, 2016USD ($)agreementitem | Dec. 31, 2017USD ($)itemagreement | Dec. 31, 2016USD ($)itemagreement | Dec. 31, 2015USD ($)agreementitem | Dec. 31, 2010USD ($)agreement | Dec. 31, 2015agreement | |
Commodities | |||||||
Derivative commodity instruments | |||||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ | $ (9) | $ 21 | $ (45) | ||||
Net commodity purchase contracts | Hogs | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 14,000,000 | ||||||
Net commodity purchase contracts | Grain | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 29,000,000 | 29,000,000 | 22,000,000 | ||||
Net commodity purchase contracts | Soybean oil | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 1,000,000 | 1,000,000 | |||||
Net commodity sale contracts | Hogs | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 13,000,000 | 13,000,000 | |||||
Net commodity sale contracts | Heating oil | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 7,000,000 | 7,000,000 | 4,000,000 | ||||
Net commodity sale contracts | Soybean oil | |||||||
Derivative commodity instruments | |||||||
Nonmonetary notional amount | 35,000,000 | ||||||
Foreign currencies | |||||||
Derivative commodity instruments | |||||||
Notional amounts | $ | $ 20 | $ 20 | $ 81 | ||||
Interest rate swaps | |||||||
Derivative commodity instruments | |||||||
Notional amounts | $ | $ 75 | $ 25 | |||||
Number of derivative instruments entered into | agreement | 3 | ||||||
Number of derivative agreements | agreement | 3 | ||||||
Number of derivative agreements terminated | agreement | 3 | 3 | |||||
Term of derivative contract | 10 years | ||||||
Payments to unwind interest rate exchange agreements | $ | $ 2 | ||||||
Eight-year interest rate exchange agreements | |||||||
Derivative commodity instruments | |||||||
Notional amounts | $ | $ 44 | ||||||
Number of derivative instruments entered into | agreement | 4 | ||||||
Number of derivative agreements terminated | agreement | 2 | ||||||
Term of derivative contract | 8 years | ||||||
Number of agreements terminated and not renewed | agreement | 2 | ||||||
Number of bulk vessels delivered | 2 | 2 | |||||
Payments to unwind interest rate exchange agreements | $ | $ 2 |
Derivatives and Fair Value of49
Derivatives and Fair Value of Financial Instruments - Gain (Loss) on Derivatives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commodities | |||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (9) | $ 21 | $ (45) |
Commodities | Cost of sales | |||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives | (9) | 21 | |
Foreign currencies | Cost of sales | |||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives | (7) | (27) | |
Foreign currencies | Foreign currency gains, net | |||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (1) | 1 | |
Interest rate swaps | Miscellaneous, net | |||
Amount of gain or (loss) recognized for each type of derivative and its location in the Consolidated Statements of Comprehensive Income | |||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (2) |
Derivatives and Fair Value of50
Derivatives and Fair Value of Financial Instruments - Fair Value of Derivatives (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Commodities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Margin account | $ 20 | $ 10 |
Commodities | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | 4 | 3 |
Derivative assets and liabilities, net basis | 18 | 12 |
Commodities | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | 6 | 1 |
Foreign currencies | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Credit risk associated with derivative contracts | $ 3 | |
Number of counterparties | item | 6 | |
Foreign currencies | Other current assets | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Asset Derivatives | $ 3 | 1 |
Foreign currencies | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | $ 6 | 4 |
Interest rate swaps | Other current liabilities | ||
Fair value of each type of derivative and its location in the Consolidated Balance Sheets | ||
Liability Derivatives | $ 4 |
Employee Benefits (Details)
Employee Benefits (Details) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)plan | Jan. 01, 2017plan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Target allocation and pension plan asset allocation | |||||||
Contributions made to defined benefit pension plans | $ 10 | $ 40 | |||||
Estimated fair value of plan assets | 151 | 114 | $ 114 | $ 171 | $ 151 | $ 114 | |
Reconciliation of benefit obligation: | |||||||
Benefit obligation at beginning of year | 262 | 249 | |||||
Service cost | 9 | 9 | 10 | ||||
Interest cost | 11 | 11 | 10 | ||||
Actuarial losses | 29 | 6 | |||||
Plan settlements | (9) | ||||||
Benefits paid | (3) | (13) | |||||
Other | 1 | ||||||
Benefit obligation at end of year | 300 | 262 | 249 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 151 | 114 | |||||
Actual return on plan assets | 25 | 10 | |||||
Employer contributions | 10 | 40 | |||||
Plan settlements | (9) | ||||||
Benefits paid | (6) | (13) | |||||
Fair value of plan assets at end of year | 171 | 151 | 114 | ||||
Expected future net benefit payments | |||||||
2,018 | 12 | ||||||
2,019 | 14 | ||||||
2,020 | 17 | ||||||
2,021 | 13 | ||||||
2,022 | 23 | ||||||
2023 - 2027 | 78 | ||||||
Agreement termination gain, before tax | 1 | ||||||
Funded status | (129) | (111) | |||||
Components of net periodic benefit cost: | |||||||
Service cost | 9 | 9 | 10 | ||||
Interest cost | 11 | 11 | 10 | ||||
Expected return on plan assets | (10) | (8) | (8) | ||||
Amortization and other | 5 | 5 | 5 | ||||
Settlement loss recognized | 2 | ||||||
Agreement termination gain | (1) | ||||||
Net periodic benefit cost | 17 | 17 | 16 | ||||
Amounts not reflected in net periodic benefit cost and included in accumulated other comprehensive loss (AOCL) before taxes | |||||||
Total accumulated other comprehensive loss | 78 | 72 | |||||
Amounts in AOCL expected to be recognized as components of net periodic benefit cost in 2018 | |||||||
Amounts in AOCL expected to be recognized as components of net periodic benefit cost in 2018 | $ 5 | ||||||
Contribution expense for multi-employer pension fund, the United Food & Commercial Workers International Union-Industry Pension Fund, which covers certain union employees under a collective bargaining agreement | $ 1 | $ 1 | $ 1 | ||||
Maximum percentage of total contributions to multi-employer pension fund | 5.00% | 5.00% | 5.00% | ||||
Assets exceed accumulated benefits | |||||||
Target allocation and pension plan asset allocation | |||||||
Contributions made to defined benefit pension plans | $ 39 | ||||||
Estimated fair value of plan assets | $ 87 | 46 | $ 46 | 87 | 46 | ||
Reconciliation of benefit obligation: | |||||||
Benefit obligation at beginning of year | 73 | 70 | |||||
Service cost | 4 | ||||||
Interest cost | 3 | ||||||
Benefits paid | (4) | ||||||
Benefit obligation at end of year | 73 | 70 | |||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 87 | 46 | |||||
Actual return on plan assets | 6 | ||||||
Employer contributions | 39 | ||||||
Benefits paid | (4) | ||||||
Fair value of plan assets at end of year | 87 | 46 | |||||
Expected future net benefit payments | |||||||
Funded status | 14 | ||||||
Components of net periodic benefit cost: | |||||||
Service cost | 4 | ||||||
Interest cost | 3 | ||||||
Accumulated benefits exceed assets | |||||||
Target allocation and pension plan asset allocation | |||||||
Contributions made to defined benefit pension plans | 1 | ||||||
Estimated fair value of plan assets | 64 | 68 | 68 | 64 | $ 68 | ||
Reconciliation of benefit obligation: | |||||||
Benefit obligation at beginning of year | 189 | 179 | |||||
Service cost | 5 | ||||||
Interest cost | 8 | ||||||
Actuarial losses | 6 | ||||||
Benefits paid | (9) | ||||||
Benefit obligation at end of year | 189 | 179 | |||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | $ 64 | 68 | |||||
Actual return on plan assets | 4 | ||||||
Employer contributions | 1 | ||||||
Benefits paid | (9) | ||||||
Fair value of plan assets at end of year | 64 | $ 68 | |||||
Expected future net benefit payments | |||||||
Funded status | (125) | ||||||
Components of net periodic benefit cost: | |||||||
Service cost | 5 | ||||||
Interest cost | 8 | ||||||
Defined benefit pension plan | |||||||
Target allocation and pension plan asset allocation | |||||||
Number of defined benefit plans | plan | 1 | 2 | |||||
Requisite service period upon attaining age of 21 to be eligible for participation | 1 year | ||||||
Requisite age of employees to be eligible for participation | 21 years | ||||||
Contributions made to defined benefit pension plans | 39 | ||||||
Estimated fair value of plan assets | $ 151 | $ 151 | $ 171 | 151 | |||
Weighted-average assumptions | |||||||
Expected return on plan assets (as a percent) | 6.50% | ||||||
Long-term rate of increase in compensation levels (as a percent) | 4.00% | 4.00% | 4.00% | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | $ 151 | ||||||
Employer contributions | $ 39 | ||||||
Fair value of plan assets at end of year | $ 171 | 151 | |||||
Expected future net benefit payments | |||||||
Funded status | (29) | (15) | |||||
Accumulated benefit obligation | 171 | 142 | |||||
Number of participants who received lump sum payments | item | 3 | ||||||
Lump sum payments | $ 8 | ||||||
Defined benefit pension plan | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 146 | 146 | 171 | 146 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 146 | ||||||
Fair value of plan assets at end of year | 171 | 146 | |||||
Defined benefit pension plan | Level 2 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 5 | 5 | 5 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 5 | ||||||
Fair value of plan assets at end of year | 5 | ||||||
Defined benefit pension plan | Domestic equity securities | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 76 | 76 | 80 | 76 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 76 | ||||||
Fair value of plan assets at end of year | 80 | 76 | |||||
Defined benefit pension plan | Domestic equity securities | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 76 | 76 | 80 | 76 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 76 | ||||||
Fair value of plan assets at end of year | 80 | 76 | |||||
Defined benefit pension plan | Foreign equity securities | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 35 | 35 | 53 | 35 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 35 | ||||||
Fair value of plan assets at end of year | 53 | 35 | |||||
Defined benefit pension plan | Foreign equity securities | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 35 | 35 | 53 | 35 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 35 | ||||||
Fair value of plan assets at end of year | 53 | 35 | |||||
Defined benefit pension plan | Fixed income | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 17 | 17 | 25 | 17 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 17 | ||||||
Fair value of plan assets at end of year | 25 | 17 | |||||
Defined benefit pension plan | Fixed income | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 17 | 17 | 25 | 17 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 17 | ||||||
Fair value of plan assets at end of year | 25 | 17 | |||||
Defined benefit pension plan | Real estate mutual fund | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 8 | 8 | 8 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 8 | ||||||
Fair value of plan assets at end of year | 8 | ||||||
Defined benefit pension plan | Real estate mutual fund | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 8 | 8 | 8 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 8 | ||||||
Fair value of plan assets at end of year | 8 | ||||||
Defined benefit pension plan | Commodity mutual funds | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 4 | 4 | 4 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 4 | ||||||
Fair value of plan assets at end of year | 4 | ||||||
Defined benefit pension plan | Commodity mutual funds | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 4 | 4 | 4 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 4 | ||||||
Fair value of plan assets at end of year | 4 | ||||||
Defined benefit pension plan | Money market funds | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 4 | 4 | 2 | 4 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 4 | ||||||
Fair value of plan assets at end of year | 2 | 4 | |||||
Defined benefit pension plan | Money market funds | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 4 | 4 | 2 | 4 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 4 | ||||||
Fair value of plan assets at end of year | 2 | 4 | |||||
Defined benefit pension plan | Foreign fixed income mutual funds | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 2 | 2 | 11 | 2 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 2 | ||||||
Fair value of plan assets at end of year | 11 | 2 | |||||
Defined benefit pension plan | Foreign fixed income mutual funds | Level 1 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 2 | 2 | $ 11 | 2 | |||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 2 | ||||||
Fair value of plan assets at end of year | 11 | 2 | |||||
Defined benefit pension plan | Other | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 5 | 5 | 5 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | 5 | ||||||
Fair value of plan assets at end of year | 5 | ||||||
Defined benefit pension plan | Other | Level 2 | |||||||
Target allocation and pension plan asset allocation | |||||||
Estimated fair value of plan assets | 5 | 5 | $ 5 | ||||
Reconciliation of fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | $ 5 | ||||||
Fair value of plan assets at end of year | $ 5 | ||||||
Defined benefit pension plan | Minimum | |||||||
Weighted-average assumptions | |||||||
Discount rate used to determine obligations (as a percent) | 2.75% | 2.90% | 3.20% | ||||
Discount rate used to determine net periodic benefit cost (as a percent) | 2.90% | 3.20% | 2.70% | ||||
Expected return on plan assets (as a percent) | 6.75% | 6.75% | |||||
Defined benefit pension plan | Minimum | Domestic equity securities | |||||||
Target allocation and pension plan asset allocation | |||||||
Target Allocations (as a percent) | 50.00% | ||||||
Defined benefit pension plan | Minimum | Foreign equity securities | |||||||
Target allocation and pension plan asset allocation | |||||||
Target Allocations (as a percent) | 25.00% | ||||||
Defined benefit pension plan | Minimum | Fixed income | |||||||
Target allocation and pension plan asset allocation | |||||||
Target Allocations (as a percent) | 20.00% | ||||||
Defined benefit pension plan | Minimum | Alternative investments | |||||||
Target allocation and pension plan asset allocation | |||||||
Target Allocations (as a percent) | 5.00% | ||||||
Defined benefit pension plan | Maximum | |||||||
Weighted-average assumptions | |||||||
Discount rate used to determine obligations (as a percent) | 3.80% | 4.65% | 4.80% | ||||
Discount rate used to determine net periodic benefit cost (as a percent) | 4.60% | 4.80% | 4.40% | ||||
Expected return on plan assets (as a percent) | 7.00% | 7.50% | |||||
Supplemental executive plans and retirement agreements | |||||||
Expected future net benefit payments | |||||||
Accumulated benefit obligation | $ 90 | $ 84 |
Employee Benefits - Defined Con
Employee Benefits - Defined Contribution Plan (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Deferred compensation plan | |||
Number of investments, which are taken as reference to measure the interest that may be acquired | item | 3 | ||
Employer contribution as percentage of the employees' reduced compensation | 3.00% | ||
Number of deferred compensation plans | item | 2 | ||
Deferred compensation plan expense | $ 10 | $ 4 | $ 0 |
Deferred compensation plan liability included in other liabilities | 40 | 36 | |
Deferred compensation plan assets included in other current assets | 46 | 40 | |
Investment income related to the mark-to-market of investments treated as trading securities | $ 9 | $ 4 | $ 0 |
United States | |||
Defined contribution plans | |||
Employer contribution (as a percent of employee contributions) | 50.00% | 50.00% | 50.00% |
Employer contribution limit per calendar year (as a percent of compensation) | 6.00% | 6.00% | 6.00% |
Vesting percentage after one year of service | 20.00% | 20.00% | 20.00% |
Additional vesting percentage with each additional complete year of service | 20.00% | 20.00% | 20.00% |
Contribution expense | $ 3 | $ 2 | $ 2 |
Defined contribution plan covering hourly, non-union employees | |||
Defined contribution plans | |||
Contribution expense | $ 1 | $ 1 | $ 1 |
Commitments and Contingencies -
Commitments and Contingencies - Numbers of Items (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2017item | Sep. 19, 2012item | |
Contingencies | |||
Number of search warrants executed authorizing the seizure of certain records from Seaboard's offices in Merriam, Kansas and at the Seaboard Foods employment office and the human resources department in Guymon, Oklahoma. | 3 | ||
Number of civil or criminal proceedings or charges filed | 0 | ||
Regulatory Action | Maximum | |||
Contingencies | |||
Settlement | $ | $ 1 |
Commitments and Contingencies54
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)company | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Commitments | |||
2,018 | $ 804 | ||
2,019 | 187 | ||
2,020 | 173 | ||
2,021 | 167 | ||
2,022 | 118 | ||
Thereafter | 308 | ||
Operating Leases | |||
2,018 | 29 | ||
2,019 | 29 | ||
2,020 | 26 | ||
2,021 | 25 | ||
2,022 | 26 | ||
Thereafter | 151 | ||
Rental expense for operating leases | $ 44 | $ 43 | $ 42 |
Refined coal processing plant | |||
Conditional and Unconditional Commitments | |||
Number of limited liability companies invested in | company | 2 | ||
Hog procurement contracts | |||
Commitments | |||
2,018 | $ 81 | ||
2,019 | 78 | ||
2,020 | 78 | ||
2,021 | 81 | ||
2,022 | 63 | ||
Thereafter | 80 | ||
Hog procurement contracts | Pork | |||
Conditional and Unconditional Commitments | |||
Amount paid under the contract | 99 | 133 | 171 |
Grain and feed ingredients | |||
Commitments | |||
2,018 | 107 | ||
2,019 | 3 | ||
Grain purchase contracts for resale | |||
Commitments | |||
2,018 | 367 | ||
Fuel supply contract | |||
Commitments | |||
2,018 | 44 | ||
Equipment purchases and facility improvements | |||
Commitments | |||
2,018 | 37 | ||
Other purchase commitments | |||
Commitments | |||
2,018 | 42 | ||
2,019 | 1 | ||
Total firm purchase commitments | |||
Commitments | |||
2,018 | 678 | ||
2,019 | 82 | ||
2,020 | 78 | ||
2,021 | 81 | ||
2,022 | 63 | ||
Thereafter | 80 | ||
Vessel, time and voyage-charters | |||
Commitments | |||
2,018 | 39 | ||
2,019 | 29 | ||
2,020 | 26 | ||
2,021 | 26 | ||
2,022 | 13 | ||
Thereafter | 33 | ||
Vessel, time and voyage-charters | Marine | |||
Conditional and Unconditional Commitments | |||
Amount paid under the contract | $ 96 | 95 | 99 |
Vessel, time and voyage-charters | Marine | Minimum | |||
Conditional and Unconditional Commitments | |||
Contract period | 1 year | ||
Vessel, time and voyage-charters | Marine | Maximum | |||
Conditional and Unconditional Commitments | |||
Contract period | 11 years | ||
Contract grower finishing agreements | |||
Commitments | |||
2,018 | $ 42 | ||
2,019 | 33 | ||
2,020 | 29 | ||
2,021 | 25 | ||
2,022 | 16 | ||
Thereafter | 44 | ||
Contract grower finishing agreements | Pork | |||
Conditional and Unconditional Commitments | |||
Amount paid under the agreement | 37 | $ 26 | $ 12 |
Investment in affiliates | |||
Commitments | |||
2,018 | 16 | ||
2,019 | 14 | ||
2,020 | 14 | ||
2,021 | $ 10 |
Stockholders' Equity and Accu55
Stockholders' Equity and Accumulated Other Comprehensive Loss (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2018 | Dec. 31, 2012 | Dec. 31, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2012 |
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Balance at beginning of the period | $ (354) | $ (304) | $ (304) | $ (304) | $ (278) | ||||||
Other comprehensive income (loss) before reclassifications | (9) | (29) | |||||||||
Amounts reclassified from accumulated other comprehensive loss to net earnings | 4 | 3 | |||||||||
Other comprehensive income (loss), net of tax | (5) | (26) | $ (25) | ||||||||
Balance at end of the period | $ (354) | (354) | $ (304) | $ (278) | |||||||
Remaining authorized repurchase amount | $ 100 | $ 100 | |||||||||
Common stock dividend declared and paid (in dollars per share) | $ 12 | ||||||||||
Common stock dividend declared (in dollars per share) | $ 1.50 | $ 1.50 | $ 1.50 | $ 1.50 | $ 6 | ||||||
Common stock dividend historical amount on a quarterly basis (in dollars per share) | $ 0.75 | ||||||||||
Common stock dividend historical amount on annual basis (in dollars per share) | 3 | ||||||||||
Portion of dividend serving as prepayment for next succeeding year (in dollars per share) | 3 | ||||||||||
Portion of dividend serving as prepayment for second succeeding year (in dollars per share) | 3 | ||||||||||
Portion of dividend serving as prepayment for third succeeding year (in dollars per share) | 3 | ||||||||||
Portion of dividend serving as prepayment for fourth succeeding year (in dollars per share) | $ 3 | ||||||||||
Income tax rate for foreign currency translation gains and losses (as a percent) | 21.00% | 35.00% | 35.00% | 35.00% | |||||||
Maximum | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Time lag for reporting financial information | 3 months | ||||||||||
Income tax rate for foreign currency translation gains and losses (as a percent) | 35.00% | ||||||||||
Sugar | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Time lag for reporting financial information | 1 month | ||||||||||
Argentine pesos | Sugar | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Net assets (liabilities) | $ 74 | $ 74 | $ 84 | ||||||||
U.S. dollars | Sugar | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Net assets (liabilities) | (3) | ||||||||||
U.S. dollars | Sugar | Maximum | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Net assets (liabilities) | (1) | (1) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Amounts reclassified from accumulated other comprehensive loss to retained earnings | (45) | ||||||||||
Foreign currency translation adjustment | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Balance at beginning of the period | $ (297) | $ (254) | $ (254) | (254) | (228) | ||||||
Other comprehensive income (loss) before reclassifications | (6) | (26) | |||||||||
Amounts reclassified from accumulated other comprehensive loss to retained earnings | (37) | ||||||||||
Other comprehensive income (loss), net of tax | (6) | (26) | |||||||||
Balance at end of the period | $ (297) | (297) | $ (254) | $ (228) | |||||||
Effective income tax rate (as a percent) | 21.00% | 35.00% | 35.00% | ||||||||
Unrealized gain on investments | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Balance at beginning of the period | 7 | 2 | $ 2 | 2 | $ 1 | ||||||
Other comprehensive income (loss) before reclassifications | 5 | 1 | |||||||||
Other comprehensive income (loss), net of tax | 5 | 1 | |||||||||
Balance at end of the period | $ 7 | 7 | 2 | 1 | |||||||
Unrecognized pension cost | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Balance at beginning of the period | $ (64) | $ (52) | $ (52) | (52) | (51) | ||||||
Other comprehensive income (loss) before reclassifications | (8) | (4) | |||||||||
Amounts reclassified from accumulated other comprehensive loss to net earnings | 4 | 3 | |||||||||
Amounts reclassified from accumulated other comprehensive loss to retained earnings | (8) | ||||||||||
Other comprehensive income (loss), net of tax | (4) | (1) | |||||||||
Balance at end of the period | $ (64) | (64) | $ (52) | $ (51) | |||||||
All components of AOCL except cumulative foreign currency translation adjustments | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Effective income tax rate (as a percent) | 26.00% | 39.00% | 39.00% | ||||||||
Certain subsidiaries | |||||||||||
Components of and changes in accumulated other comprehensive loss, net of tax | |||||||||||
Cumulative foreign currency translation adjustment, net of related taxes | $ 91 | 91 | $ 87 | ||||||||
Cumulative foreign currency translation adjustment, taxes | 0 | 0 | |||||||||
Unrecognized pension cost related to employees at certain subsidiaries | $ 22 | $ 22 | $ 20 |
Acquisitions (Details)
Acquisitions (Details) $ / shares in Units, $ in Millions | Jan. 05, 2018USD ($)facility | Aug. 30, 2017USD ($) | Oct. 28, 2016USD ($) | Sep. 01, 2016USD ($) | Feb. 07, 2016USD ($) | Apr. 01, 2017USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Oct. 27, 2016 | Dec. 31, 2007USD ($) |
Acquisitions | ||||||||||||
Goodwill | $ 19 | $ 22 | $ 19 | |||||||||
Net sales | 5,809 | 5,379 | $ 5,594 | |||||||||
Net earnings (losses) | $ 246 | $ 314 | $ 172 | |||||||||
Earnings per common share | $ / shares | $ 211.01 | $ 266.50 | $ 146.44 | |||||||||
Maximum | ||||||||||||
Acquisitions | ||||||||||||
Time lag for reporting financial information | 3 months | |||||||||||
Belarina | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 0 | |||||||||||
Mimran | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 375 | |||||||||||
Earn-out, low end of range | 0 | |||||||||||
Earn-out, high end of range | $ 48 | |||||||||||
Earn-out time period following closing, low end of range | 5 years | |||||||||||
Earn-out time period following closing, high end of range | 8 years | |||||||||||
Time period performance of business is measured to determine earn-out | 5 years | |||||||||||
Number of flour mills operated | facility | 3 | |||||||||||
Pork | ||||||||||||
Acquisitions | ||||||||||||
Goodwill | $ 12 | |||||||||||
Pork | New Fashion Pork, LLP | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 40 | |||||||||||
Inventories | 6 | |||||||||||
Property, plant and equipment | 34 | |||||||||||
Total | 40 | |||||||||||
Pork | New Fashion Pork, LLP | Maximum | ||||||||||||
Acquisitions | ||||||||||||
Acquisition costs | $ 1 | |||||||||||
Pork | Texas Farm LLC | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 59 | |||||||||||
Inventories | 16 | |||||||||||
Property, plant and equipment | 42 | |||||||||||
Goodwill | 3 | |||||||||||
Accounts payable | (2) | |||||||||||
Total | 59 | |||||||||||
Net sales | $ 4 | |||||||||||
Net earnings (losses) | (2) | |||||||||||
Pork | Texas Farm LLC | Maximum | ||||||||||||
Acquisitions | ||||||||||||
Acquisition costs | $ 1 | |||||||||||
Pork | Christensen Farms | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 148 | |||||||||||
Inventories | 33 | |||||||||||
Property, plant and equipment | 111 | |||||||||||
Intangible assets | 1 | |||||||||||
Goodwill | 3 | |||||||||||
Total | 148 | |||||||||||
Net sales | 119 | |||||||||||
Net earnings (losses) | (5) | |||||||||||
Pork | Christensen Farms | Maximum | ||||||||||||
Acquisitions | ||||||||||||
Acquisition costs | $ 1 | |||||||||||
Pork | Christensen Farms | Customer relationships | ||||||||||||
Acquisitions | ||||||||||||
Weighted average useful life (in years) | 1 year 7 months 6 days | |||||||||||
Pork | Additional acquisitions | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 12 | |||||||||||
Number of acquisitions | item | 3 | |||||||||||
Inventories | $ 1 | 1 | ||||||||||
Property, plant and equipment | 11 | $ 11 | ||||||||||
Pork | Additional acquisitions | Maximum | ||||||||||||
Acquisitions | ||||||||||||
Acquisition costs | $ 1 | |||||||||||
Commodity Trading and Milling | Pulse and grain elevator | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 14 | $ 14 | ||||||||||
Property, plant and equipment | 11 | |||||||||||
Goodwill | 3 | |||||||||||
Commodity Trading and Milling | Pulse and grain elevator | Maximum | ||||||||||||
Acquisitions | ||||||||||||
Acquisition costs | $ 1 | |||||||||||
Commodity Trading and Milling | Belarina | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | 0 | |||||||||||
Accounts receivable | 7 | |||||||||||
Inventories | 6 | |||||||||||
Property, plant and equipment | 25 | |||||||||||
Other assets | 4 | |||||||||||
Goodwill | 1 | |||||||||||
Third-party debt | (14) | |||||||||||
Other liabilities | (11) | |||||||||||
Total | 18 | |||||||||||
Fair value of pre-existing interest | 18 | |||||||||||
Net sales | $ 0 | |||||||||||
Percentage of ownership | 50.00% | |||||||||||
Voting equity ownership percentage | 98.00% | |||||||||||
Time lag for reporting financial information | 3 months | |||||||||||
Commodity Trading and Milling | Belarina | Selling, general and administrative expenses | ||||||||||||
Acquisitions | ||||||||||||
Gain related to recognizing the fair value of pre-existing affiliate receivables | $ 4 | |||||||||||
Commodity Trading and Milling | Mimran | ||||||||||||
Acquisitions | ||||||||||||
Acquisition of business, cash consideration | $ 375 | |||||||||||
Earn-out, low end of range | 0 | |||||||||||
Earn-out, high end of range | $ 48 |
Segment Information - Pork Segm
Segment Information - Pork Segment (Details) $ in Millions | Aug. 30, 2017USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) |
Segment Information | |||||
Number of reportable segments | segment | 6 | ||||
One-time Federal blender's credits recognized as revenue | $ 17 | ||||
Forecast | |||||
Segment Information | |||||
One-time Federal blender's credits recognized as revenue | $ 42 | ||||
Pork | |||||
Segment Information | |||||
One-time Federal blender's credits recognized as revenue | $ 17 | ||||
Pork | New Fashion Pork, LLP | |||||
Segment Information | |||||
Acquisition of business, cash consideration | $ 40 | ||||
Pork | Hog growing operations | |||||
Segment Information | |||||
Acquisition of business, cash consideration | $ 40 | $ 219 |
Segment Information - CT&M, Mar
Segment Information - CT&M, Marine and Turkey Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 05, 2018 | |
Mimran | |||
Segment Information | |||
Earn-out, low end of range | $ 0 | ||
Earn-out, high end of range | 48 | ||
Commodity Trading and Milling | Bakery business | Democratic Republic of Congo | Notes receivable | |||
Segment Information | |||
Reserve on receivables from affiliates | $ 16 | ||
Commodity Trading and Milling | Mimran | |||
Segment Information | |||
Earn-out, low end of range | 0 | ||
Earn-out, high end of range | $ 48 | ||
Marine | |||
Segment Information | |||
Write-down on investment | $ 6 | ||
Turkey | |||
Segment Information | |||
Restructuring charges | $ 18 |
Segment Information - Power Seg
Segment Information - Power Segment (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Information | |||
Number of reportable segments | segment | 6 | ||
Interest income recorded for interest recognized on certain customer receivable balances | $ 15 | $ 15 | $ 40 |
Power | Accounts Receivable | |||
Segment Information | |||
Interest income recorded for interest recognized on certain customer receivable balances | $ 31 |
Segment Information - Specific
Segment Information - Specific Financial Information About Each Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Information | |||
Sales to External Customers: | $ 5,809 | $ 5,379 | $ 5,594 |
Operating Income (Loss): | 232 | 222 | 126 |
Income (loss) from affiliates | (7) | 81 | 70 |
Depreciation and amortization | 118 | 102 | 91 |
Total Assets: | 5,161 | 4,755 | |
Investment in and Advances to Affiliates: | 851 | 773 | |
Capital expenditures | 173 | 158 | 139 |
Pork | |||
Segment Information | |||
Sales to External Customers: | 1,609 | 1,443 | 1,332 |
Operating Income (Loss): | 188 | 175 | 116 |
Income (loss) from affiliates | (10) | 11 | 11 |
Depreciation and amortization | 69 | 56 | 44 |
Total Assets: | 1,309 | 1,157 | |
Investment in and Advances to Affiliates: | 231 | 175 | |
Capital expenditures | 100 | 69 | 40 |
Commodity Trading and Milling | |||
Segment Information | |||
Sales to External Customers: | 2,945 | 2,778 | 3,022 |
Operating Income (Loss): | 25 | 38 | 2 |
Income (loss) from affiliates | 7 | (10) | (50) |
Depreciation and amortization | 10 | 6 | 5 |
Total Assets: | 964 | 989 | |
Investment in and Advances to Affiliates: | 240 | 207 | |
Capital expenditures | 15 | 35 | 40 |
Marine | |||
Segment Information | |||
Sales to External Customers: | 956 | 916 | 940 |
Operating Income (Loss): | 21 | 33 | 19 |
Income (loss) from affiliates | (7) | 1 | 2 |
Depreciation and amortization | 24 | 26 | 26 |
Total Assets: | 376 | 314 | |
Investment in and Advances to Affiliates: | 28 | 33 | |
Capital expenditures | 37 | 19 | 43 |
Sugar | |||
Segment Information | |||
Sales to External Customers: | 186 | 147 | 188 |
Operating Income (Loss): | 21 | (12) | 2 |
Income (loss) from affiliates | 1 | 2 | 1 |
Depreciation and amortization | 7 | 6 | 8 |
Total Assets: | 197 | 166 | |
Investment in and Advances to Affiliates: | 4 | 4 | |
Capital expenditures | 20 | 33 | 15 |
Power | |||
Segment Information | |||
Sales to External Customers: | 97 | 79 | 97 |
Operating Income (Loss): | 9 | 7 | 7 |
Income (loss) from affiliates | 6 | 4 | 3 |
Depreciation and amortization | 8 | 8 | 8 |
Total Assets: | 188 | 196 | |
Investment in and Advances to Affiliates: | 38 | 30 | |
Capital expenditures | 1 | 1 | 1 |
Turkey | |||
Segment Information | |||
Income (loss) from affiliates | (4) | 73 | 103 |
Total Assets: | 315 | 493 | |
Investment in and Advances to Affiliates: | 310 | 324 | |
All Other | |||
Segment Information | |||
Sales to External Customers: | 16 | 16 | 15 |
Operating Income (Loss): | 2 | 2 | 2 |
Total Assets: | 4 | 6 | |
Segment Totals | |||
Segment Information | |||
Operating Income (Loss): | 266 | 243 | 148 |
Depreciation and amortization | 118 | 102 | 91 |
Total Assets: | 3,353 | 3,321 | |
Capital expenditures | 173 | 157 | 139 |
Corporate Items | |||
Segment Information | |||
Operating Income (Loss): | (34) | (21) | $ (22) |
Total Assets: | $ 1,808 | 1,434 | |
Capital expenditures | $ 1 |
Segment Information - Geographi
Segment Information - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographic Information | |||
Net sales | $ 5,809 | $ 5,379 | $ 5,594 |
Long-lived assets | 1,086 | 1,008 | |
Caribbean, Central and South America | |||
Geographic Information | |||
Net sales | 2,295 | 1,990 | 2,112 |
Africa | |||
Geographic Information | |||
Net sales | 1,483 | 1,572 | 1,606 |
United States | |||
Geographic Information | |||
Net sales | 1,271 | 1,161 | 1,135 |
Long-lived assets | 784 | 713 | |
Pacific Basin and Far East | |||
Geographic Information | |||
Net sales | 393 | 309 | 357 |
Canada/Mexico | |||
Geographic Information | |||
Net sales | 238 | 236 | 242 |
Europe | |||
Geographic Information | |||
Net sales | 99 | 40 | 71 |
Dominican Republic | |||
Geographic Information | |||
Long-lived assets | 114 | 122 | |
Argentina | |||
Geographic Information | |||
Long-lived assets | 73 | 67 | |
All Other | |||
Geographic Information | |||
Net sales | 30 | 71 | $ 71 |
Long-lived assets | $ 115 | $ 106 |
Segment Information - Geograp62
Segment Information - Geographic Concentration (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk | |||
Sales | $ 5,809 | $ 5,379 | $ 5,594 |
South Africa | |||
Concentration Risk | |||
Sales | $ 581 | $ 650 | $ 646 |
Sales | Geographic concentration | South Africa | |||
Concentration Risk | |||
Concentration risk (as a percent) | 10.00% | 12.00% | 12.00% |
Accounts Receivable | Geographic concentration | Foreign Country | |||
Concentration Risk | |||
Foreign receivables, excluding receivables due from affiliates | $ 242 | $ 214 |
Schedule II Valuation and Qua63
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selling, general and administrative expenses | |||
Movement in valuation and qualifying accounts | |||
Provision / charged (credit) to expense | $ 12 | ||
Income from affiliates | |||
Movement in valuation and qualifying accounts | |||
Provision / charged (credit) to expense | 2 | ||
Cost of sales | |||
Movement in valuation and qualifying accounts | |||
Provision / charged (credit) to expense | 2 | ||
Allowance for Doubtful Accounts: | |||
Movement in valuation and qualifying accounts | |||
Balance at beginning of year | 14 | $ 21 | $ 12 |
Provision / charged (credit) to expense | 16 | (1) | 13 |
Net deductions/ Other | (1) | (6) | (4) |
Balance at end of year | 29 | 14 | 21 |
Allowance for Notes Receivable | |||
Movement in valuation and qualifying accounts | |||
Balance at beginning of year | 16 | ||
Provision / charged (credit) to expense | 16 | ||
Balance at end of year | 16 | 16 | |
Allowance for Deferred Tax Assets: | |||
Movement in valuation and qualifying accounts | |||
Balance at beginning of year | 58 | 19 | 21 |
Provision / charged (credit) to expense | 1 | 39 | (2) |
Balance at end of year | 59 | 58 | 19 |
Reserve for LIFO Valuation: | |||
Movement in valuation and qualifying accounts | |||
Balance at beginning of year | 21 | 28 | 37 |
Net deductions/ Other | 10 | (7) | (9) |
Balance at end of year | $ 31 | $ 21 | $ 28 |