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Segment Information | 3 Months Ended
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Apr. 04, 2015
Segment Information |
Segment Information | Note 9 - Segment Information As of September 27, 2014, Seaboard’s Pork segment sold to Triumph Foods LLC (Triumph) a 50% interest in Daily’s. Daily’s produces and markets raw and pre-cooked bacon, ham and sausage and has two further processing plants located in Salt Lake City, Utah and Missoula, Montana. 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 St. Joseph, Missouri. Through September 27, 2014, Seaboard consolidated the operating results of Daily’s as part of its Pork segment operations. As a result of this transaction, Seaboard deconsolidated Daily’s from its Condensed Consolidated Balance Sheet as of September 27, 2014. Seaboard’s remaining 50% investment in Daily’s is accounted for in the Pork segment by using the equity method of accounting. Both Seaboard and Triumph supply raw product to Daily’s. The Commodity Trading and Milling segment has a 50% non-controlling interest in a bakery located in the Democratic Republic of Congo (DRC) which began start-up operations in the fourth quarter of 2012. As part of its investment in this bakery, Seaboard has an interest bearing long-term note receivable from this bakery the terms of which require periodic principal payments with the first payment due in June 2015 and a final maturity date of December 2020. Repayment of this note is primarily dependent upon this business improving existing operations to generate adequate future cash flows to make scheduled payments when due. The bakery has been incurring operating losses since it began operations as it continues to resolve equipment problems and attempts to gain market share. As a result of the continuing equipment problems, other production challenges and unfavorable local market conditions causing challenges in gaining market share, Seaboard’s management determined achieving improved operating results would take significantly longer than anticipated. As a result, Seaboard’s management determined there was a decline in value considered other than temporary as of December 31, 2014 and thus Seaboard recorded a write-down in the fourth quarter of 2014, which represented the remaining equity investment in this business and suspended the use of the equity method as of December 31, 2014. Seaboard discontinued recognizing interest income on the note receivable during the fourth quarter of 2014. As of April 4, 2015, the recorded balance of this Note Receivable and previous accrued interest from Affiliates was $34,556,000, all classified as long-term given uncertainty of the timing of payments in the future. If the future cash flows of this bakery do not improve, there is a possibility that some of the recorded value of the Note Receivable from Affiliate could be deemed uncollectible in the future, which may result in a material charge to earnings. Including this business, as of April 4, 2015 Seaboard had a total of $56,939,000 of investments in, advances to and notes receivable from all of its affiliates in the DRC, which represents the single largest foreign country risk exposure for Seaboard’s equity method investments. One of the other affiliates in the DRC, to which Seaboard sells wheat, is the only supplier of flour to this bakery. In September 2013, Seaboard invested $17,000,000 in a flour production business in Brazil for a 50% non-controlling equity interest and provided a $13,000,000 long-term loan to this business. Half of the interest on this long-term note receivable from affiliate is paid currently in cash and the other half accrues as pay-in-kind interest. This note receivable matures in September 2020 but can be repaid with Seaboard having the option to convert the note receivable to equity and the other equity holders having the option to match such conversion with a purchase of new shares to avoid dilution. In addition, at the time of Seaboard’s initial investment in this business, plans included potential future equal additional investments by the owners to improve existing operations and expand operations to improve long-term operating results. Seaboard’s share of additional investments totaled $2,502,000 and $3,886,000 in 2015 and 2014, respectively. This business also incurred significant operating losses in 2014 and the first quarter of 2015. Discussions are ongoing between the owners to determine the extent and timing of future additional investments or loans, by either or both parties, for possible expansion plans to improve operating results. As of April 4, 2015 and December 31, 2014, the recorded balance of this Note Receivable from Affiliates was $14,018,000 and $13,849,000, respectively and Seaboard’s equity investment in this business was $1,950,000 and $11,669,000, respectively. As of April 4, 2015 and December 31, 2014, Seaboard also had a receivable due from affiliates of $14,207,000 and $13,969,000, respectively from sales of grain and supplies related to this business. During the first quarter of 2015, Seaboard recorded losses from affiliates of $11,666,000 related to this investment, which included $5,846,000 for its proportionate share of a deferred income tax asset allowance related to 2014 and 2013. In September 2014, Seaboard invested $17,333,000 in a cargo terminal business in Jamaica for a 21% non-controlling interest. This investment is accounted for in the Marine segment using the equity method reported on a three-month lag basis and thus Seaboard’s first proportionate share of earnings was recognized in the first quarter of 2015. The Power segment had been operating a floating power generating facility (72 megawatts) in the Dominican Republic under a short-term lease agreement. On April 1, 2014, Seaboard provided notice to cancel the lease. Seaboard ceased operation of the leased facility on September 3, 2014. The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (Butterball). Butterball had total net sales for the three months ended April 4, 2015 and March 29, 2014 of $397,698,000 and $355,763,000, respectively. Butterball had operating income for the three months ended April 4, 2015 and March 29, 2014 of $42,597,000 and $20,748,000, respectively. As of April 4, 2015 and December 31, 2014, Butterball had total assets of $1,008,592,000 and $1,021,182,000, respectively. In conjunction with Seaboard’s initial investment in Butterball in December 2010, Seaboard has a long-term note receivable from Butterball which had a balance of $145,450,000 as of April 4, 2015. Part of the interest earned on this note is pay-in-kind interest, which accumulates and is paid at maturity in December 2017. The following tables set forth specific financial information about each segment as reviewed by Seaboard’s management. Operating income for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income, along with income or losses from affiliates for the Commodity Trading and Milling segment, is used as the measure of evaluating segment performance because management does not consider interest, other investment income and income tax expense on a segment basis.
Sales to External Customers:
|  | Three Months Ended |
|  | April 4, |  | March 29, |
(Thousands of dollars) |  | 2015 |  | 2014 |
Pork |  | $ | 320,888 |  | $ | 382,090 |
Commodity Trading and Milling |  | 820,588 |  | 789,390 |
Marine |  | 236,660 |  | 200,464 |
Sugar |  | 45,259 |  | 50,356 |
Power |  | 25,131 |  | 53,848 |
All Other |  | 3,832 |  | 3,488 |
Segment/Consolidated Totals |  | $ | 1,452,358 |  | $ | 1,479,636 |
Operating Income (Loss):
|  | Three Months Ended |
|  | April 4, |  | March 29, |
(Thousands of dollars) |  | 2015 |  | 2014 |
Pork |  | $ | 16,396 |  | $ | 60,477 |
Commodity Trading and Milling |  | 4,482 |  | 11,930 |
Marine |  | 6,779 |  | (7,392 | )
Sugar |  | 3,999 |  | 6,761 |
Power |  | 2,634 |  | (1,684 | )
All Other |  | 108 |  | 337 |
Segment Totals |  | 34,398 |  | 70,429 |
Corporate Items |  | (6,559 | ) | (5,226 | )
Consolidated Totals |  | $ | 27,839 |  | $ | 65,203 |
Income (Loss) from Affiliates:
|  | Three Months Ended |
|  | April 4, |  | March 29, |
(Thousands of dollars) |  | 2015 |  | 2014 |
Pork |  | $ | 2,653 |  | $ | - |
Commodity Trading and Milling |  | (9,249 | ) | (35 | )
Marine |  | 653 |  | - |
Sugar |  | 416 |  | 305 |
Turkey |  | 16,754 |  | 6,374 |
Segment/Consolidated Totals |  | $ | 11,227 |  | $ | 6,644 |
Total Assets:
|  | April 4, |  | December 31, |
(Thousands of dollars) |  | 2015 |  | 2014 |
Pork |  | $ | 849,841 |  | $ | 821,172 |
Commodity Trading and Milling |  | 1,005,576 |  | 1,103,461 |
Marine |  | 295,184 |  | 283,276 |
Sugar |  | 185,184 |  | 198,271 |
Power |  | 204,904 |  | 199,256 |
Turkey |  | 407,234 |  | 393,425 |
All Other |  | 5,324 |  | 5,887 |
Segment Totals |  | 2,953,247 |  | 3,004,748 |
Corporate Items |  | 761,417 |  | 672,572 |
Consolidated Totals |  | $ | 3,714,664 |  | $ | 3,677,320 |
Investments in and Advances to Affiliates:
|  | April 4, |  | December 31, |
(Thousands of dollars) |  | 2015 |  | 2014 |
Pork |  | $ | 80,769 |  | $ | 79,832 |
Commodity Trading and Milling |  | 182,914 |  | 178,344 |
Marine |  | 17,729 |  | 17,333 |
Sugar |  | 3,339 |  | 2,994 |
Turkey |  | 254,253 |  | 244,560 |
Segment/Consolidated Totals |  | $ | 539,004 |  | $ | 523,063 |
Administrative services are provided by the corporate office 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, deferred tax amounts 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 investments recorded in Other Investment Income (Loss), Net).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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