SEC Comment Letter for SMITHFIELD FOODS INC (SFD) (CIK 0000091388) (SFD) — Feb 23, 2012
SMITHFIELD FOODS INC (SFD) (CIK 0000091388)
Date: Feb. 23, 2012 · CIK: 0000091388 · Accession: 0000000000-12-009543
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-15321
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE February 23, 2012 Via E-mail Mr. Robert W. Manly, IV Chief Financial Officer Smithfield Foods, Inc. 200 Commerce Street Smithfield, Virginia 23430
Re: Smithfield Foods, Inc. Form 10-K for the fiscal year ended May 1, 2011 Filed June 17, 2011 Form 10-Q for the fiscal quarter ended October 30, 2011 Filed December 9, 2011 File No. 001-15321
Dear Mr. Manly:
We have reviewed your filings and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by confirming that you will revise your document in future filings and providing the requested information. If you do not believe our comments apply to your facts and circumstances please tell us why in your response.
After reviewing the information you provide in response to these comments, we may have additional comments.
Form 10-Q for the Fiscal Quarter Ended October 30, 2011
Financial Statements, page 3
Notes to Consolidated Condensed Financial Statements, page 6 Note 6: Investments, page 12
1. We note your disclosure that because the carrying value of your investment in CFG continued to exceed the market value of th e underlying securities as of October 30, 2011, you analyzed your investment in CFG for impair ment and determined that the fair value exceeded its carrying amount as of October 30, 2011. We further note that due to assumptions included in your analysis which ar e disclosed in Note 6, you determined that no impairment existed as of October 30, 2011. Please explain to us in further detail why
Mr. Robert W. Manly, IV Smithfield Foods, Inc. February 23, 2012 Page 2 you believe that your investment in CFG has not been impaired as of October 30, 2011. Also, in light of the fact that it does no t appear that the market value of the CFG securities has increased significantly through th e current date, please tell us if you have evaluated your investment in CFG for impa irment subsequent to October 30, 2011 and if so, please provide us the results of your impa irment analysis. If you have recorded any impairment loss, please explain to us how that loss was calculated or determined. Form 8-K filed November 7, 2011
Exhibit 99.1
2. We refer to the reconciliation of operating prof it – consolidated to consolidated adjusted EBITDA on page 3. We note that the company has reconciled this measure to operating profit rather than net income, which would be the most comparable US GAAP measure. Please revise to reconcile the non-GAAP m easure “consolidated ad justed EBITDA” to the company’s net income, the most comparab le GAAP measure. Refer to the guidance outlined in Regulation G and Questions 103.02 of the Compliance and Disclosure Interpretations issued by the Division of Corporation Financ e regarding Non-GAAP Financial Measures.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comme nts, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
staff comments or changes to disclosure in re sponse to staff comments do not foreclose the Commission from taking any action w ith respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Mr. Robert W. Manly, IV Smithfield Foods, Inc. February 23, 2012 Page 3 You may contact Heather Clark at 202-551-3624 or Claire Erla nger at 202-551-3301 if you have questions regarding comments on the financial statem ents and related matters. Please contact me at 202-551-3813 with any other questions. Sincerely, /s/ Linda Cvrkel Linda Cvrkel Branch Chief
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
February 23, 2012
Via E-mail
Mr. Robert W. Manly, IV Chief Financial Officer Smithfield Foods, Inc. 200 Commerce Street Smithfield, Virginia 23430
Re: Smithfield Foods, Inc.
Form 10-K for the fiscal year ended May 1, 2011
Filed June 17, 2011 Form 10-Q for the fiscal quarter ended October 30, 2011 Filed December 9, 2011
File No. 001-15321
Dear Mr. Manly:
We have reviewed your filings and have the following comments. In some of our comments,
we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by confirming that you will revise
your document in future filings and providing the requested information. If you do not believe our
comments apply to your facts and circumstances please tell us why in your response.
After reviewing the information you provide in response to these comments, we may have
additional comments.
Form 10-Q for the Fiscal Quarter Ended October 30, 2011
Financial Statements, page 3
Notes to Consolidated Condensed Financial Statements, page 6
Note 6: Investments, page 12
1. We note your disclosure that because the carrying value of your investment in CFG
continued to exceed the market value of th e underlying securities as of October 30, 2011,
you analyzed your investment in CFG for impair ment and determined that the fair value
exceeded its carrying amount as of October 30, 2011. We further note that due to assumptions included in your analysis which ar e disclosed in Note 6, you determined that
no impairment existed as of October 30, 2011. Please explain to us in further detail why
Mr. Robert W. Manly, IV
Smithfield Foods, Inc. February 23, 2012 Page 2
you believe that your investment in CFG has not been impaired as of October 30, 2011.
Also, in light of the fact that it does no t appear that the market value of the CFG
securities has increased significantly through th e current date, please tell us if you have
evaluated your investment in CFG for impa irment subsequent to October 30, 2011 and if
so, please provide us the results of your impa irment analysis. If you have recorded any
impairment loss, please explain to us how that loss was calculated or determined.
Form 8-K filed November 7, 2011
Exhibit 99.1
2. We refer to the reconciliation of operating prof it – consolidated to consolidated adjusted
EBITDA on page 3. We note that the company has reconciled this measure to operating profit rather than net income, which would be the most comparable US GAAP measure.
Please revise to reconcile the non-GAAP m easure “consolidated ad justed EBITDA” to
the company’s net income, the most comparab le GAAP measure. Refer to the guidance
outlined in Regulation G and Questions 103.02 of the Compliance and Disclosure
Interpretations issued by the Division of Corporation Financ e regarding Non-GAAP
Financial Measures.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e. Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made. In connection with responding to our comme nts, please provide, in writing, a statement
from the company acknowledging that: the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
staff comments or changes to disclosure in re sponse to staff comments do not foreclose the
Commission from taking any action w ith respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.
Mr. Robert W. Manly, IV
Smithfield Foods, Inc. February 23, 2012 Page 3
You may contact Heather Clark at 202-551-3624 or Claire Erla nger at 202-551-3301 if you have
questions regarding comments on the financial statem ents and related matters. Please contact me
at 202-551-3813 with any other questions.
Sincerely,
/s/ Linda Cvrkel
Linda Cvrkel Branch Chief