10-Q/A 1 res1st00.txt 2000 1ST QUARTER 10-Q/A FILING UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-3390 Seaboard Corporation (Exact name of registrant as specified in its charter) Delaware 04-2260388 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 9000 W. 67th Street, Shawnee Mission, Kansas 66202 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (913) 676-8800 Not Applicable (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No ___. There were 1,487,520 shares of common stock, $.01 par value per share, outstanding on April 21, 2000. Total pages in filing - 17 pages PART I - FINANCIAL INFORMATION Item 1. Financial Statements SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 31, 2000 and December 31, 1999 (Thousands of dollars) (Unaudited) March 31, December 31, 2000 1999 Assets Current assets: Cash and cash equivalents $ 20,571 $ 11,039 Short-term investments 237,011 91,609 Receivables, net 194,090 171,931 Inventories 196,585 192,847 Deferred income taxes 17,328 15,031 Prepaid expenses and deposits 22,467 20,395 Current assets of discontinued operations - 103,464 Total current assets 688,052 606,316 Investments in and advances to foreign affiliates 35,355 28,449 Net property, plant and equipment 557,312 480,415 Other assets 29,829 30,204 Non-current assets of discontinued operations - 132,407 Total assets $1,310,548 $1,277,791 Liabilities and Stockholders' Equity Current liabilities: Notes payable to banks $ 100,602 $ 221,353 Current maturities of long-term debt 13,508 11,487 Accounts payable 53,340 61,529 Other current liabilities 166,846 103,697 Current liabilities of discontinued operations - 24,013 Total current liabilities 334,296 422,079 Long-term debt, less current maturities 342,365 318,017 Deferred income taxes 53,930 41,948 Other liabilities 34,884 34,924 Non-current liabilities of discontinued operations - 16,824 Total non-current and deferred liabilities 431,179 411,713 Minority interest 565 831 Stockholders' equity: Common stock of $1 par value, Authorized 4,000,000 shares; issued 1,789,599 shares 1,790 1,790 Less 302,079 shares held in treasury (302) (302) 1,488 1,488 Additional capital 13,214 13,214 Accumulated other comprehensive income 480 (201) Retained earnings 529,326 428,667 Total stockholders' equity 544,508 443,168 Total liabilities and stockholders' equity $1,310,548 $1,277,791 See notes to condensed consolidated financial statements. SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Three months ended March 31, 2000 and 1999 (Thousands of dollars except per share amounts) (Unaudited) March 31, March 31, 2000 1999 Net sales $ 361,523 $ 256,936 Cost of sales and operating expenses 316,078 233,325 Gross income 45,445 23,611 Selling, general and administrative expenses 27,410 23,206 Operating income 18,035 405 Other income (expense): Interest income 4,352 1,852 Interest expense (9,286) (8,472) Income (loss) from foreign affiliates (589) 85 Minority interest 266 474 Miscellaneous 4,045 578 Total other income (expense), net (1,212) (5,483) Earnings (loss) from continuing operations before income taxes 16,823 (5,078) Income tax (expense) benefit (6,964) 646 Earnings (loss) from continuing operations 9,859 (4,432) Earnings from discontinued operations, net of income taxes of $2,320 3,820 Gain on disposal of discontinued operations, net of income taxes of $56,560 91,172 - Net earnings (loss) $ 101,031 $ (612) Earnings (loss) per common share from continuing operations $ 6.63 $ (2.98) Earnings per common share from discontinued operations 61.29 2.57 Earnings (loss) per common share $ 67.92 $ (0.41) Dividends declared per common share $ .25 $ .25 Average number of shares outstanding 1,487,520 1,487,520 See notes to condensed consolidated financial statements. SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Three months ended March 31, 2000 and 1999 (Thousands of dollars) (Unaudited) March 31, March 31, 2000 1999 Cash flows from operating activities: Net earnings $ 101,031 $ (612) Adjustments to reconcile net earnings to cash from operating activities: Net earnings from discontinued operations - (3,820) Net gain on disposal of discontinued operations (91,172) - Depreciation and amortization 11,891 10,465 (Income) loss from foreign affiliates 589 (85) Gain from sale of fixed assets (448) (575) Gain from recognition of deferred swap proceeds (2,010) Deferred income taxes 4,494 1,469 Changes in current assets and liabilities (net of businesses acquired and disposed): Receivables, net of allowance (22,159) 2,311 Inventories 8,119 (23,002) Prepaid expenses and deposits (2,072) (7,892) Current liabilities exclusive of debt (13,727) 2,413 Other, net (1,097) (2,309) Net cash from operating activities (6,561) (21,637) Cash flows from investing activities: Purchase of investments (788,879) (99,497) Proceeds from the sale or maturity of investments 644,593 125,286 Capital expenditures (28,349) (11,570) Proceeds from sale of fixed assets 2,700 1,478 Additional investment in a controlled subsidiary - (2,202) Investments in and advances to foreign affiliates (7,495) 94 Acquisition of business (34,134) - Proceeds from disposal of discontinued operations, net of cash expenditures 356,107 - Net cash from investing activities 144,543 13,589 Cash flows from financing activities: Notes payable to bank, net (120,751) 3,632 Principal payments of long-term debt (7,327) (114) Dividends paid (372) (372) Net cash from financing activities (128,450) 3,146 Net cash flows from discontinued operations - 894 Net change in cash and cash equivalents 9,532 (4,008) Cash and cash equivalents at beginning of year 11,039 20,716 Cash and cash equivalents at end of quarter $ 20,571 $ 16,708 See notes to condensed consolidated financial statements. SEABOARD CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 1 - Accounting Policies and Basis of Presentation The consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries (the "Company"). As more fully described in Note 2, the Company sold its Poultry Division effective January 3, 2000. Accordingly, comparative 1999 financial results and notes have been restated to reflect the Poultry Division as a discontinued operation. All significant intercompany balances and transactions have been eliminated in consolidation. The Company's investments in non-controlled affiliates are accounted for by the equity method. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 1999 as filed in its Annual Report on Form 10-K/A. The accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. In August 2000, the Company announced that its management had discovered that assets of its Produce Division had been overstated in prior periods due to accounting errors and irregularities in the Produce Division's books and records. The overstatements related primarily to the crops in production and related materials in Honduras as reported by the Miami headquarters of the Produce Division. After consultation with the Company's independent auditors, management determined to restate the Company's financial statements for each of the prior periods effected. Financial statements and related disclosures contained in this report reflect, where appropriate, changes to conform to these restatements. Net earnings and balance sheet amounts as previously reported and as restated are as follows: (Thousands of dollars) Net Earnings as Net Earnings For the Three Months Ended: Previously Reported as Restated March 31, 2000 $ 101,233 $ 101,031 March 31, 1999 $ (308) $ (612) Total Assets Stockholders' Equity as Previously as as Previously as (Thousands of dollars) Reported Restated Reported Restated March 31, 2000 $1,318,094 $1,310,548 $549,967 $544,508 December 31, 1999 $1,285,326 $1,277,791 $448,425 $443,168 For the three months ended March 31, 2000 and 1999, other comprehensive income adjustments consisted of an immaterial unrealized gain on available-for-sale securities and foreign currency cumulative translation adjustment, net of tax. As more fully described in Note 2, during the first quarter of 2000 the Company sold its Poultry Division and acquired the assets of an existing hog production operation. The following table summarizes the noncash transactions resulting from the Poultry Division sale: Three Months Ended (Thousands of dollars) March 31, 2000 Decrease in net assets of discontinued operation $195,034 Decrease in net working capital (including current income tax liability) 65,145 Increase in deferred income tax liability 4,756 Gain on disposition, net of income taxes 91,172 Proceeds from disposition, net of cash expenditures $356,107 The following table summarizes the noncash transactions resulting from the acquisition of the hog production operation: Three Months Ended (Thousands of dollars) March 31, 2000 Increase in net working capital $ 8,033 Increase in fixed assets 62,797 Increase in long-term debt (33,696) Increase in other liabilities (3,000) Cash paid $ 34,134 Note 2 - Acquisitions and Dispositions of Businesses Effective January 3, 2000, the Company completed the sale of its Poultry Division to ConAgra, Inc. for $375 million, consisting of the assumption of approximately $16 million in indebtedness and the remainder in cash, subject to certain adjustments. The sale resulted in a pre-tax gain of approximately $148 million ($91 million after taxes). This gain is based on certain estimates including a final working capital adjustment and construction costs the Company is required to fund in 2000 to complete certain expansion projects on behalf of the buyer. Any differences between these estimates and their actual settlement will change the gain accordingly. The Company's 1999 financial results have been restated to reflect the Poultry Division as a discontinued operation. The amounts exclude general corporate overhead previously allocated to the Poultry Division for segment reporting purposes. The amounts include interest on debt at the Poultry Division assumed by the buyer and an allocation of the interest on the Company's general credit facilities based on a ratio of the net assets of the discontinued operations to the total net assets of the Company plus existing debt under the Company's general credit facilities. During the first quarter of 2000, the Company purchased the assets of an existing hog production operation for approximately $75 million, consisting of $34 million in cash and the assumption of $34 million in debt, $4 million of currently payable liabilities and $3 million payable over the next four years. The transaction was accounted for using the purchase method and would not have significantly affected net earnings or earnings per share on a pro forma basis. Note 3 - Inventories During 1999 the Company changed its method of accounting for certain inventories of the Pork Division from FIFO to LIFO, retroactive to January 1, 1999. The following is a summary of inventories at March 31, 2000 and December 31, 1999 (in thousands): March 31, December 31, 2000 1999 At lower of LIFO cost or market: Live hogs and related materials $ 93,600 $ 75,662 Dressed pork and related materials 6,027 8,360 99,627 84,022 LIFO allowance 6,572 4,026 Total inventories at lower of LIFO cost or market 106,199 88,048 At lower of FIFO cost or market: Grain, flour and feed 33,057 41,772 Sugar produced and in process 21,232 22,398 Crops in production and related materials 5,842 7,490 Wine and spirits, finished and in process 13,331 12,555 Other 16,924 20,584 Total inventories at lower of FIFO cost or market 90,386 104,799 Total inventories $196,585 $192,847 Low commodity prices during 2000 and 1999 have eliminated the LIFO allowance as overall pork feed costs have decreased below base year levels. This change in LIFO allowance is reflected in earnings as a reduction in cost of sales. Note 4 - Contingencies The Company is a defendant in a pending arbitration proceeding and related litigation in Puerto Rico brought by the owner of a chartered barge and tug which were damaged by fire after delivery of the cargo. Damages of $47.6 million are alleged. The Company recently received a ruling in the arbitration proceeding in its favor which dismisses the principal theory of recovery although the ruling has been appealed. The Company believes that the ruling will be upheld on appeal and it will have no responsibility for the loss. During the first quarter of 2000, the Company resolved to the mutual satisfaction of all parties litigation brought in federal court by a third-party hog supplier claiming breach of agreement, common law fraud and violation of the federal RICO statute and the Company's counterclaims in this litigation. The resolution did not have a material effect on the Company's financial position, results of operations or cash flows. The Company is subject to various other legal proceedings related to the normal conduct of its business. In the opinion of management, none of these actions is expected to result in a judgment having a materially adverse effect on the consolidated financial statements of the Company. Note 5 - Segment Information The following tables set forth specific financial information about each segment as reviewed by the Company's management. Operating income for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income is used as the measure of evaluating segment performance because management does not consider interest and income tax expense on a segment basis. During the fourth quarter of 1999, the Company changed its method of accounting for certain inventories of the Pork segment from FIFO to LIFO, retroactively effective as of January 1, 1999. Quarterly data for 1999 has been restated accordingly. The Sugar and Citrus segment represents Ingenio y Refineria San Martin del Tabacal S.A. (Tabacal), an Argentine company primarily engaged in growing and refining sugarcane and, to a lesser extent, citrus production. The entire Argentine sugar industry is experiencing financial difficulties, with Tabacal and certain large competitors incurring operating losses because Argentine sugar prices are below historical levels. As a result of these recent operating losses for Tabacal, at year-end 1999 the Company evaluated the recoverability of Tabacal's long-lived assets and believes that the value of those assets are presently recoverable. However, any further decline in sugar prices would likely result in the carrying values not being recoverable, which would result in a material charge to earnings for the impairment of these assets. Sales to External Customers: Three Months Ended March 31, (Thousands of dollars) 2000 1999 Pork $ 175,258 $ 120,163 Marine 76,851 70,221 Commodity Trading and Milling 79,850 41,699 Sugar and Citrus 9,759 5,132 Power 6,606 4,948 Wine 2,104 3,360 All Other 11,095 11,413 Segment/Consolidated Totals $ 361,523 $ 256,936 Operating Income Three Months Ended March 31, (Thousands of dollars) 2000 1999 Pork $ 22,510 $ 2,593 Marine (524) 2,355 Commodity Trading and Milling 921 1,338 Sugar and Citrus (2,668) (3,878) Power 1,387 1,265 Wine (1,895) (1,043) All Other (789) (493) Segment Totals 18,942 2,137 Corporate Items (907) (1,732) Consolidated Totals $ 18,035 $ 405 Total Assets March 31, December 31, (Thousands of dollars) 2000 1999 Pork $ 484,934 $ 401,316 Marine 102,580 97,561 Commodity Trading and Milling 150,218 161,477 Sugar and Citrus 165,545 167,972 Power 47,319 21,068 Wine 26,101 29,156 All Other 37,272 38,931 Segment Totals 1,013,969 917,481 Corporate items 296,579 124,439 Discontinued Poultry Operations 235,871 Consolidated Totals $1,310,548 $1,277,791 Administrative services provided by the corporate office are primarily allocated to the individual segments based on the size and nature of their operations. Corporate assets include short-term investments, certain investments in and advances to foreign affiliates, fixed assets, deferred tax amounts and other miscellaneous items. Corporate operating losses represent certain operating costs not specifically allocated to individual segments and, in 1999, general corporate overhead previously allocated to the discontinued Poultry operations as discussed in Note 2. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations As more fully described in Note 1 to the Condensed Consolidated Financial Statements, in August 2000, the Company announced that assets of its Produce Division had been overstated in prior periods and management determined to restate the Company's financial statements for each of the prior periods effected. As more fully described in Note 2 to the Condensed Consolidated Financial Statements, the Company completed the sale of its Poultry Division to ConAgra, Inc. effective January 3, 2000. As a result, the Company's 1999 financial results have been restated to reflect the Poultry Division as a discontinued operation. The discussions and figures below are based on these restated presentations. LIQUIDITY AND CAPITAL RESOURCES March 31, December 31, 2000 1999 Current ratio 2.06:1 1.44:1 Working capital $353.8 $184.2 Cash from operating activities for the three months ended March 31, 2000, increased $15.1 million compared to the same period one year earlier. The increase in cash flows was primarily related to an increase in net earnings from continuing operations, partially offset by changes in components of working capital. Changes in components of working capital are primarily related to the timing of normal transactions for voyage settlements, trade payables and receivables. Within the Commodity Trading and Milling segment there was a lower value of inventory in transit at March 31, 2000 than at December 31, 1999 resulting in decreases in grain inventory and a partially offsetting decrease in deferred revenue balances. At March 31, 1999, there was a higher value of inventory in transit than at December 31, 1998, resulting in an increase in inventory balances and a partially offsetting increase in deferred revenue balances. Cash from investing activities for the three months ended March 31, 2000 increased $131.0 million primarily related to proceeds from the sale of discontinued poultry operations, partially offset by acquisitions, capital expenditures and net purchases of investments. See Note 2 to the Condensed Consolidated Financial Statements for further discussion of the Poultry Division sale and acquisition of the assets of an existing hog production operation. The Company invested $28.3 million in property, plant and equipment for the three months ended March 31, 2000, of which $4.8 million was expended in the Pork segment, $2.5 million in the Sugar and Citrus segment, $19.1 million in the Power segment and $1.9 million in other businesses of the Company. The Company invested $4.8 million primarily for expansion of existing hog production facilities and for improvements to the pork processing plant. The Company plans to invest $5.2 million over the next nine months for general upgrades to the pork processing plant and continued expansion of hog production facilities. The Company invested $2.5 million in the Sugar and Citrus segment primarily for improvements to existing facilities and sugarcane fields. Over the next nine months, the Company anticipates spending $8.5 million for additional improvements. The Company invested $19.1 million in the Power segment primarily for the construction of a 71.2 megawatt barge-mounted power plant to be located in the Dominican Republic. Construction costs are expected to total approximately $50 million. During the first quarter of 2000, the Company purchased a minority interest in a flour and feed mill operation in Kenya for $7.5 million. This transaction is being accounted for using the equity method. In the first quarter of 2000, the Company's one-year revolving credit facilities totaling $153.3 million maturing in the first quarter of 2000 were reduced to $141.0 million and extended for an additional year and the short-term uncommitted credit lines totaling $145.0 million were reduced to $132.5 million. As of March 31, 2000, the Company had $77.6 million outstanding under one-year revolving credit facilities and $23.0 million outstanding under short-term uncommitted credit lines. During the first quarter of 2000, the Company repaid approximately $128.1 million in notes payable and industrial development revenue bonds, primarily with proceeds from the Poultry Division sale. As a result of these repayments, approximately $2.0 million in unamortized proceeds from prior terminations of interest rate agreements related to these notes were recognized as miscellaneous income. In early April 2000, the Company repaid an additional $11.0 million in industrial revenue bonds from the proceeds of the Poultry Division sale. Management intends to continue seeking opportunities for expansion in the industries in which it operates and believes that the Company's liquidity, capital resources and borrowing capabilities are adequate for its current and intended operations. RESULTS OF OPERATIONS Net sales for the three months ended March 31, 2000 increased by $104.6 million compared to the three months ended March 31, 1999. Operating income increased by $17.6 million compared to the same quarter one year ago. Pork Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 175.3 120.2 Operating income $ 22.5 2.6 Net sales for the Pork segment increased $55.1 million in the first quarter of 2000 compared to the first quarter of 1999, as a result of higher pork prices and an increase in sales volume. An excess supply of hogs had depressed pork prices through the first half of 1999. The excess has since declined resulting in improved prices. Sales volume increased as the plant ran extended shifts to take advantage of positive margins. Although management cannot predict pork prices, it is anticipated that market conditions will continue to be favorable during the remainder of 2000. Operating income for the Pork segment increased $19.9 million in the first quarter of 2000 compared to the first quarter of 1999, primarily as a result of improved sales prices and volumes as discussed above. The Company also continues to benefit from low grain prices for Company raised hogs, while the cost of third-party hogs has increased. Management is unable to predict future market prices for these items but anticipates overall margins will remain favorable during the remainder of 2000. Marine Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 76.9 70.2 Operating income $ (0.5) 2.4 Net sales for the Marine segment increased $6.7 million in the first quarter of 2000 compared to the first quarter of 1999. The increase resulted from a significant increase in volume, largely offset by a general decrease in cargo rates. Management believes that weak economic conditions in certain South American markets continue to depress rates, however, volumes have begun to increase. A new shipping law, The Ocean Reform Act of 1998, went into effect in May 1999 and permits shipping companies to enter into unregulated confidential rate agreements with shippers. Management is not able to determine the impact, if any, this new law has had on financial results. Operating income from the Marine segment decreased $2.9 million in the first quarter of 2000 compared to the first quarter of 1999, primarily as a result of the lower cargo rates discussed above and higher fuel costs. Management anticipates that these conditions will improve for the remainder of 2000 compared to 1999. Commodity Trading and Milling Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 79.9 41.7 Operating income $ 0.9 1.3 Net sales for the Commodity Trading and Milling segment increased $38.2 million in the first quarter of 2000 compared to the first quarter of 1999. The increase is primarily a result of increased commodity sales to third-parties and certain foreign affiliates. Operating income for this segment decreased $0.4 million in the first quarter of 2000 compared to the first quarter of 1999, primarily due to losses incurred from the Zambia milling operations partially offset by increases from commodity sales. Sugar and Citrus Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 9.8 5.1 Operating income $ (2.7) (3.9) Net sales for the Sugar and Citrus segment increased $4.7 million in the first quarter of 2000 compared to the first quarter of 1999, primarily as a result of higher sales volumes. Operating income for this segment increased $1.2 million from improved margins and lower operating costs. Although management cannot predict future sugar prices, it is anticipated that sugar prices during the remainder of 2000 will remain at levels that result in operating losses for the Company. As a result of recent operating results for Tabacal, at year-end 1999 the Company evaluated the recoverability of Tabacal's long-lived assets and believes that the value of those assets are presently recoverable. However, any further decline in sugar prices would likely result in the carrying values not being recoverable, which would result in a material charge to earnings for the impairment of these assets. Power Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 6.6 4.9 Operating income $ 1.4 1.3 Net sales for the Power segment increased $1.7 million in the first quarter of 2000 compared to the first quarter of 1999, primarily as a result of higher rates and, to a lesser extent, an increase in demand. Rates have increased as a result of a fuel adjustment clause allowing the Company to pass on higher fuel costs. Operating income for this segment increased $0.1 million due to the increase in demand. Wine Segment Three Months Ended March 31, (Dollars in millions) 2000 1999 Net sales $ 2.1 3.4 Operating income $ (1.9) (1.0) Net sales for the Wine segment decreased $1.3 million in the first quarter of 2000 compared to the first quarter of 1999, primarily as a result of a decrease in sales volumes in certain European markets. Operating income for this segment decreased $0.9 million as a result of the cost of acquiring wine materials on the open market to supplement local grape shortages and increasing reserves for uncollectible advances for raw materials. Although management is not able to predict the amount of operating losses for 2000, it is anticipated that operating losses will continue during 2000. Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses increased $4.2 million to $27.4 million for the first quarter of 2000 compared to the first quarter of 1999. The increase is primarily a result of higher sales volumes in the Pork and Marine segments. As a percentage of revenues, SG&A decreased to 7.6% in the first quarter of 2000 from 9.0% in the first quarter of 1999, primarily due to the increase in revenues in the Commodity Trading and Milling segment without a corresponding increase in SG&A costs. Interest Income Interest income increased $2.5 million in the first quarter of 2000 compared to the first quarter of 1999. The increase reflects an increase in average funds invested and, to a lesser extent, an increase in interest rates. Average funds invested increased primarily from proceeds from the sale of the Poultry Division in January 2000. Interest Expense Interest expense increased $0.8 million in the first quarter of 2000 compared to the first quarter of 1999. The increase is primarily a result of higher short-term borrowing rates. Income (loss) from Foreign Affiliates Income from foreign affiliates decreased $0.7 million for the first quarter of 2000 compared to the first quarter of 1999, primarily from lower earnings at certain milling operations in Africa. Miscellaneous Income Miscellaneous income increased $3.5 million for the first quarter of 2000 compared to the first quarter of 1999. As discussed in Liquidity and Capital Resources above, $2.0 million of this increase resulted from the recognition of unamortized proceeds from prior terminations of interest rate agreements associated with debt repaid during the quarter. The remaining increase is primarily attributable to a sales tax refund in the Pork Division. Income Tax Expense For the three months ended March 31, 1999, the Company incurred a tax benefit resulting from net losses at its domestic entities. For the three months ended March 31, 2000, the Company's tax expense is primarily attributable to net income from domestic entities, primarily the Pork Segment. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to various types of market risks from its day- to-day operations. Primary market risk exposures result from changing interest rates and commodity prices. Changes in interest rates impact the cash required to service variable rate debt. From time to time, the Company uses interest rate swaps to manage risks of increasing interest rates. Changes in commodity prices impact the cost of necessary raw materials as well as the selling prices of finished products. The Company uses corn, wheat, soybean and soybean meal futures and options to manage risks of increasing prices of raw materials. The Company uses hog futures and options to manage risks of fluctuating prices of third party hogs acquired for processing. The Company is also subject to foreign currency exchange rate risk on a short-term note payable denominated in foreign currency. This risk is managed through the use of a foreign currency forward exchange agreement. The Company's market risk exposure related to these items has not changed materially since December 31, 1999. SEABOARD CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION Item 1. Legal Proceedings On March 23, 2000, the Company resolved to the mutual satisfaction of all parties litigation brought in federal court by a third-party hog supplier claiming breach of agreement, common law fraud and violation of the federal RICO statute and the Company's counterclaims in this litigation. The resolution did not have a material effect on the Company's financial position, results of operations or cash flows. Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of stockholders was held on April 24, 2000 in Newton, Massachusetts. Two items were submitted to a vote of stockholders as described in the Company's Proxy Statement dated March 10, 2000. The table below briefly describes the proposals and results of the stockholders' vote. Votes in Votes Favor Against Abstain 1. To elect: H. Harry Bresky 1,441,011.75 0 6,488 Joe E. Rodrigues 1,407,221.75 0 40,278 David A. Adamsen 1,441,771.75 0 5,728 and Thomas J. Shields 1,442,011.75 0 5,488 as directors. 2. To ratify selection of KPMG LLP as independent auditors. 1,441,129.75 1,775 4,595 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K. On January 18, 2000 the Registrant filed a report on Form 8-K, dated January 3, 2000, disclosing the sale of its Poultry businesses. This sale is further described in Note 2 to the Condensed Consolidated Financial Statements. This Form 10-Q/A contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which include statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact. These statements appear in a number of places in this Form 10-Q/A and include statements regarding the intent, belief or current expectations of the Company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the Company's financing plans, (iii) the price of feed stocks and other materials used by the Company, (iv) the cost to purchase third-party hogs for slaughter at the Company's hog processing facility and the sale price for pork products from such operations, (v) the price for the Company's products and services, (vi) the effect of Tabacal and/or the Wine segment on the consolidated financial statements of the Company, or (vii) other trends affecting the Company's financial condition or results of operations. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of various factors. The accompanying information contained in this Form 10-Q/A under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" identifies important factors which could cause such differences. PART II - OTHER INFORMATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: August 28, 2000 Seaboard Corporation by: /s/ Robert L. Steer Robert L. Steer, Vice President-Chief Financial Officer (Authorized officer and principal financial and accounting officer)