-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VFc4q0+HwIzyQFZv6obRpB3qRruKp8vRcpFYrp4ESGIN0WFYTWVSlpnE+L1I9O8/ T0Li0rFFNPxPl/bUJ5wuZQ== 0000088121-03-000005.txt : 20030630 0000088121-03-000005.hdr.sgml : 20030630 20030630172547 ACCESSION NUMBER: 0000088121-03-000005 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEABOARD CORP /DE/ CENTRAL INDEX KEY: 0000088121 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 042260388 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03390 FILM NUMBER: 03765583 BUSINESS ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66202 BUSINESS PHONE: 9136768800 MAIL ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66202 FORMER COMPANY: FORMER CONFORMED NAME: SEABOARD ALLIED MILLING CORP DATE OF NAME CHANGE: 19820328 FORMER COMPANY: FORMER CONFORMED NAME: HATHAWAY BAKERIES INC DATE OF NAME CHANGE: 19710315 10-K/A 1 k10-a.txt 2002 SEABOARD CORPORATION FORM 10K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Amendment No. 1) (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 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 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock American Stock $1.00 Par Value Exchange Securities registered pursuant of Section 12(g) of the Act: None (Title of class) 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Act). Yes X No The aggregate market value of 348,815 shares of voting stock held by nonaffiliates on January 31, 2003 was approximately $86,663,087, based on the closing price of $248.45 per share on June 29, 2002, the end of the registrant's second fiscal quarter. As of February 21, 2003, the number of shares of common stock outstanding was 1,255,053.90. EXPLANATORY STATEMENT This amendment to the Annual Report on Form 10-K/A for the year ended December 31, 2002 is being filed to include the audited financial statements of Fjord Seafood ASA (Fjord) for the year ended December 31, 2002 as required by Rule 3-09 of Regulation S-X. As of December 31, 2002, Seaboard Corporation owned a 20.7% interest in Fjord. In accordance with rule 12b-15 under the Securities and Exchange Act of 1934, as amended, the text of the amended item is set forth in its entirety in the following pages. DOCUMENTS INCORPORATED BY REFERENCE Part I, item 1(b), a part of item 1(c)(1) and the financial information required by item 1(d) and Part II, items 5, 6, 7, 7A and 8 are incorporated by reference to the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b). Part III, a part of item 10 and items 11, 12 and 13 are incorporated by reference to the Registrant's definitive proxy statement filed pursuant to Regulation 14A for the 2003 annual meeting of stockholders (the "2003 Proxy Statement"). This Form 10-K/A and its Exhibits (Form 10-K/A) contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may 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-K/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 ability to obtain adequate financing and liquidity, (iii) the price of feed stocks and other materials used by the Company, (iv) the sale price for pork products from such operations, (v) the price for the Company's products and services, (vi) the demand for power and related spot prices in the Dominican Republic, (vii) the effect of the devaluation of the Argentine peso, (viii) the effect of the changes to the produce division operations on the consolidated financial statements of the Company, (ix) the potential effect of the proposed meat packer ban legislation on the Company's Pork Division, (x) the effect of the national strike in Venezuela on the Company's Marine Division, (xi) the potential effect of the Company's investments in a wine business and salmon and other seafood business on the consolidated financial statements of the Company, (xiii) the potential impact of various environmental actions pending or threatened against the Company, or (xiii) 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-K/A, including without limitation, the information under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations", identifies important factors which could cause such differences. PART IV Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) The following documents are filed as part of this report: **1. Consolidated financial statements. See Index to Consolidated Financial Statements on page F-1. 2. Consolidated financial statement schedules. See Index to Consolidated Financial Statements on page F-1. 3. Exhibits. 3.1 - Registrant's Certificate of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. 3.2 - Registrant's By-laws, as amended. Incorporated by reference to Exhibit 3.2 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001. 4.1 - Note Purchase Agreement dated December 1, 1993 between the Registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the Commission. Incorporated by reference to Exhibit 4.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993. 4.2 - Seaboard Corporation 6.49% Senior Note Due December 1, 2005 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.2 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993. 4.3 - Note Purchase Agreement dated June 1, 1995 between the registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the Commission. Incorporated by reference to Exhibit 4.3 of Registrant's Form 10-Q for the quarter ended September 9, 1995. 4.4 - Seaboard Corporation 7.88% Senior Note Due June 1, 2007 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.4 of Registrant's Form 10-Q for the quarter ended September 9, 1995. 4.5 - Seaboard Corporation Note Agreement dated as of December 1, 1993 ($100,000,000 Senior Notes due December 1, 2005). First Amendment to Note Agreement. Incorporated by reference to Exhibit 4.7 of Registrant's Form 10-Q for the quarter ended March 23, 1996. 4.6 - Seaboard Corporation Note Agreement dated as of June 1, 1995 ($125,000,000 Senior Notes due June 1, 2007). First Amendment to Note Agreement. Incorporated by reference to Exhibit 4.8 of Registrant's Form 10-Q for the quarter ended March 23, 1996. 4.7 - Second Amendment to the Note Purchase Agreements dated as of December 1, 1993 ($100,000,000 Senior Notes due December 1, 2005). Incorporated by reference to Exhibit 4.1 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.8 - Second Amendment to the Note Purchase Agreements dated as of June 1, 1995 ($125,000,000 Senior Notes due June 1, 2007). Incorporated by reference to Exhibit 4.2 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.9 - Seaboard Corporation Note Purchase Agreement dated as of September 30, 2002 between the Registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the Commission. Incorporated by reference to Exhibit 4.3 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.10 - Seaboard Corporation $32,500,000 5.8% Senior Note, Series A, due September 30, 2009 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.4 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.11 - Seaboard Corporation $38,000,000 6.21% Senior Note, Series B, due September 30, 2009 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.5 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.12 - Seaboard Corporation $7,500,000 6.21% Senior Note, Series C, due September 30, 2012 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.6 of Registrant's Form 10-Q for the quarter ended September 28, 2002. 4.13 - Seaboard Corporation $31,000,000 6.92% Senior Note, Series D, due September 30, 2012 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.7 of Registrant's Form 10-Q for the quarter ended September 28, 2002. * 10.1 - Registrant's Executive Retirement Plan dated January 1, 1997. The addenda have been omitted from the filing, but will be provided supplementary upon request of the Commission. Incorporated by reference to Exhibit 10.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997. * 10.2 - Registrant's Supplemental Executive Benefit Plan as Amended and Restated. Incorporated by reference to Exhibit 10.2 of Registrants Form 10-K for fiscal year ended December 31, 2000. * 10.3 - Registrant's Supplemental Executive Retirement Plan for H. Harry Bresky dated March 21, 1995. Incorporated by reference to Exhibit 10.3 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. * 10.4 - Registrant's Executive Deferred Compensation Plan dated January 1, 1999. Incorporated by reference to Exhibit 10.1 of Registrant's Form 10-Q for the quarter ended March 31, 1999. * 10.5 - First Amendment to Registrant's Executive Retirement Plan as Amended and Restated January 1, 1997, dated February 28, 2001, amending Registrant's Executive Retirement Plan dated January 1, 1997 referenced as Exhibit 10.1. Incorporated by reference to Exhibit 10.6 of Registrant's Form 10-K for fiscal year ended December 31, 2000. * 10.6 - Registrant's Investment Option Plan dated December 18, 2000. Incorporated by reference to Exhibit 10.7 of Registrant's Form 10-K for fiscal year ended December 31, 2000. 10.7 - Reorganization Agreement by and between Seaboard Corporation and Seaboard Flour Corporation as of October 18, 2002 incorporated by reference to Exhibit 10.1 of the Form 8-K dated October 18, 2002. 10.8 - Purchase and Sale Agreement dated October 18, 2002 by and between Flour Holdings LLC and Seaboard Flour Corporation with respect to which the "Earnout Payments" thereunder have been assigned to Seaboard Corporation. Incorporated by reference to Exhibit 10.2 of Registrant's Form 10- Q for the quarter ended September 28, 2002. **13 - Sections of Annual Report to security holders incorporated by reference herein. **21 - List of subsidiaries. 99.1 - Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. 99.2 - Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. * Management contract or compensatory plan or arrangement. ** Previously filed with the Form 10-K dated March 4, 2003. (b) Reports on Form 8-K i. Seaboard Corporation filed Form 8-K dated October 8, 2002 announcing completion of a private placement of Senior Notes and its intentions for the use of the proceeds. ii. Seaboard Corporation filed Form 8-K dated October 18, 2002 announcing the repurchase of 232,414.85 shares of common stock from its parent, Seaboard Flour Corporation. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SEABOARD CORPORATION By /s/Robert L. Steer Robert L. Steer, Senior Vice President, Treasurer and Chief Financial Officer (principal financial officer) Date: June 30, 2003 CERTIFICATIONS I, H. H Bresky, certify that: 1.I have reviewed this annual report, as amended, on Form 10-K/A of Seaboard Corporation; 2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a)designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b)evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c)presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 30, 2003 /s/H. H. Bresky H. H. Bresky, Chairman of the Board, President, and Chief Executive Officer CERTIFICATIONS I, Robert L. Steer, certify that: 1.I have reviewed this annual report, as amended, on Form 10-K/A of Seaboard Corporation; 2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a)designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b)evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c)presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6.The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 30, 2003 /s/Robert L. Steer Robert L. Steer, Senior Vice President, Treasurer, and Chief Financial Officer SEABOARD CORPORATION AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedule Financial Statements Stockholders' Annual Report Page Independent Auditors' Report 23 Consolidated Balance Sheets as of December 31, 2002 and December 31, 2001 24 Consolidated Statements of Earnings for the years ended December 31, 2002, December 31, 2001 and December 31, 2000 25 Consolidated Statements of Changes in Equity for the years ended December 31, 2002, December 31, 2001and December 31, 2000 26 Consolidated Statements of Cash Flows for the years ended December 31, 2002, December 31, 2001 and December 31, 2000 27 Notes to Consolidated Financial Statements 28 The foregoing are incorporated by reference. II - Valuation and Qualifying Accounts for the years ended December 31, 2002, 2001 and 2000 F-3 Index to Fjord Seafood ASA Audited Financial Statements Page Report of Independent Auditors F-4 Consolidated Statements of Profit and Loss for the years ended December 31, 2002, December 31, 2001 and December 31, 2000 F-5 Consolidated Balance Sheet as of December 31, 2002 and December 31, 2001 F-6,7 Consolidated Cash Flow Statement for the years ended December 31, 2002, December 31, 2001 and December 31, 2000 F-8 Notes to Consolidated Financial Statements F-9 The audit of the financial statements of Fjord Seafood ASA was conducted in accordance with auditing standards and practices generally accepted in Norway which differ from auditing standards generally accepted in the United States of America. The individual financial statements of all other nonconsolidated foreign affiliates, which would be required if each such foreign affiliate were a Registrant, are omitted because (a) the Registrant's and its other subsidiaries' investments in and advances to such foreign affiliates do not exceed 20% of the total assets as shown by the most recent consolidated balance sheet and (b) the Registrant's and its other subsidiaries' equity in the earnings before income taxes and extraordinary items of the foreign affiliates does not exceed 20% of such income of the Registrant and consolidated subsidiaries compared to the average income for the last five fiscal years. Combined condensed financial information as to assets, liabilities and results of operations have been presented for nonconsolidated foreign affiliates in Note 5 of "Notes to the Consolidated Financial Statements." All other schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related consolidated notes. INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Seaboard Corporation: Under date of February 21, 2003, we reported on the consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of earnings, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2002, as contained in the December 31, 2002 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended December 31, 2002. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement Schedule II as listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Kansas City, Missouri February 24, 2003
Schedule II SEABOARD CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts (In Thousands) Balance at Provision Write-offs net Acquisitions Balance at beginning of year (1) of recoveries andDisposals end of year Year ended December 31, 2002: Allowance for doubtful accounts $ 20,571 62 (4,455) - $ 16,178 Drydock accrual $ 6,052 3,709 (3,368) - $ 6,393 Year ended December 31, 2001: Allowance for doubtful accounts $ 29,801 206 (9,436) - $ 20,571 Drydock accrual $ 5,496 5,356 (4,800) - $ 6,052 Year ended December 31, 2000: Allowance for doubtful accounts $ 29,075 12,276 (8,199) (3,351) $ 29,801 Drydock accrual $ 5,444 4,051 (3,999) - $ 5,496 (1) Allowance for doubtful accounts provisions charged to selling, general and administrative expenses; drydock provisions charged to cost of sales.
KPMG AS Fjordgata 68 Telephone +47 73 80 21 00 N-7010 Trondheim Fax +47 73 80 21 20 www.kpmg.no Enterprise No 937 174 627 MVA To the Annual Shareholders' Meeting of Fjord Seafood ASA AUDITOR'S REPORT FOR 2002 Respective Responsibilities of Directors and Auditors We have audited the annual financial statements of Fjord Seafood ASA as of 31 December 2002, showing a profit of NOK 52 605 688 for the parent company and a loss of NOK 192 278 254 for the group. We have also audited the information in the Directors' report concerning the financial statements, the going concern assumption, and the proposal for the appropriation of the profit. The financial statements comprise the balance sheet, the statements of income and cash flows, the accompanying notes and the group accounts. These financial statements and the Directors' report are the responsibility of the Company's Board of Directors and President. Our responsibility is to express an opinion on these financial statements and other information according to the requirements of the Norwegian Act on Auditing and Auditors. Basis of Opinion We conducted our audit in accordance with the Norwegian Act on Auditing and Auditors and auditing standards and practices generally accepted in Norway. Those standards and practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. To the extent required by law and auditing standards and practices an audit also comprises a review of the management of the Company's financial affairs and its accounting and internal control systems. We believe that our audit provides a reasonable basis for our opinion. Opinion In our opinion, the financial statements have been prepared in accordance with law and regulations and present the financial position of the Company and of the Group as of 31 December 2002, and the results of its operations and its cash flows for the year then ended, in accordance with accounting standards, principles and practices generally accepted in Norway. the Company's management has fulfilled its obligation in respect of registration and documentation of accounting information as required by law and accounting standards, principles and practices generally accepted in Norway. the information in the Directors' reports concerning the financial statements, the going concern assumption, and the proposal for the appropriation of the profit is consistent with the financial statements and comply with the law and regulations. Trondheim, 31 March 2003 KPMG AS /s/ Hallvard Stromme Hallvard Stromme State Authorised Public Accountant Note: This translation of the Norwegian statutory Audit Report has been prepared for information purposes only. Fjord Seafood ASA 2002 Group accounts PROFIT AND LOSS ACCOUNT Amounts in NOK 1 000 Note 2002 2001 2000 Sales revenues 2/4 3 995 553 3 302 533 2 317 850 Other operating revenues 1/17 253 984 62 966 12 857 TOTAL OPERATING REVENUES 4 249 536 3 365 499 2 330 707 Transportation costs, goods sold -324 915 -294 555 -155 466 NET OPERATING REVENUES 3 924 622 3 070 944 2 175 241 Change in inventory -158 154 125 111 149 098 Write-down of inventory 78 652 -158 800 0 Cost of materials -2 400 570 -2 194 260 -1 757 649 Wages, salaries, and other personnel expenses 6/7 -669 665 -520 211 -210 056 Other operating expenses 6/17 -619 718 -356 527 -73 552 OPERATING PROFIT BEFORE DEPRECIATION AND WRITE-DOWNS 155 166 -33 742 283 082 Ordinary depreciation 8 -209 406 -202 016 -79 908 Write-off of fixed assets 6/8 -91 083 -71 580 0 OPERATING PROFIT BEFORE GOODWILL WRITE-OFFS AND WRITE-DOWNS -145 322 -307 338 203 174 Write-off of goodwill/badwill 6/8 -31 199 -42 452 -12 584 Amortization of goodwill/badwill 6/8 25 500 -300 530 0 OPERATING PROFIT (EBIT) -151 021 -650 320 190 590 Share of earnings in associated companies 9 -19 127 -8 799 236 Interest income 7 369 14 775 14 485 Other financial income 58 805 15 603 14 937 Interest expenses -180 965 -210 965 -95 605 Other financial expenses 6 -44 643 -14 820 -13 415 PRE-TAX PROFIT/LOSS -329 582 -854 527 111 227 Tax 13 137 304 111 372 -26 215 PROFIT FOR THE YEAR -192 278 -743 155 85 012 Minority interests 11 -1 936 592 870 Earnings per share (in NOK) 19 -0.63 -7.04 1.49 Earnings per share - diluted (in NOK) 19 -0.63 -7.04 1.49 Fjord Seafood ASA 2002 Group accounts BALANCE SHEET Amounts in NOK 1 000 ASSETS NOTE 2002 2001 2000 Licenses and rights 8 1 288 620 1 542 580 1 288 335 Deferred tax benefit 13 135 789 31 945 5 917 Goodwill 1/6/8 971 694 459 175 615 236 Total intangible fixed assets 2 396 103 2 033 700 1 909 488 Land, buildings and other real property 8 439 100 494 233 322 957 Plant and equipment 8 435 469 570 391 459 311 Ships 8 20 659 31 195 31 231 Fixtures and fittings, furniture, tools, office equipment, etc. 8 30 988 37 581 53 020 Total tangible fixed assets 926 217 1 133 400 866 519 Investments in associated companies 9 65 404 87 870 66 808 Loans to associated companies and FDH joint venture 8 504 3 564 430 Investments in shares and holdings 10 35 661 26 558 16 038 Bonds/debentures and other receivables 28 074 24 976 10 923 Total financial fixed assets 137 643 142 968 94 200 Total fixed assets 3 459 963 3 310 067 2 870 207 Current assets Inventory 5 1 121 864 1 211 159 949 093 Accounts receivable 559 056 487 914 479 456 Other receivables 117 039 174 678 67 782 Total receivables 676 095 662 592 547 238 Bank deposits, cash, and cash equivalents 16 77 222 168 520 60 506 Total current assets 1 875 181 2 042 272 1 556 837 TOTAL ASSETS 5 335 144 5 352 339 4 427 044 Fjord Seafood ASA 2002 Group accounts BALANCE SHEET Amounts in NOK 1 000 EQUITY AND LIABILITIES Note 2002 2001 2000 Equity Share capital 11 427 404 201 642 70 229 Own shares 11 -596 -596 0 Other equity 11 1 682 098 1 484 268 1 197 307 Minority interests 11 452 2 394 1 703 Total equity 2 109 358 1 687 708 1 269 239 Liabilities Deferred tax 13 26 831 74 668 151 233 Other provisions for liabilities 7/9 6 367 23 506 6 352 Total provisions for liabilities 33 198 98 174 157 585 Debt to financial institutions 12/14/16 1 632 638 1 831 580 1 344 757 Other long-term liabilities 8/12/14/16 110 446 125 984 89 088 Total long-term liabilities 1 743 084 1 957 564 1 433 845 Debt to financial institutions 14/15/16 794 333 965 568 1 050 592 Accounts payable 375 013 409 095 328 585 Taxes payable 13 9 295 9 982 14 317 Unpaid public fees and levies 82 942 49 663 50 889 Dividend 0 0 21 069 Other short-term liabilities 187 922 174 585 100 923 Total current liabilities 1 449 505 1 608 894 1 566 375 Total liabilities 3 225 787 3 664 632 3 157 806 TOTAL EQUITY AND LIABILITIES 5 335 144 5 352 339 4 427 044 Fjord Seafood ASA 2002 Group accounts CASH FLOW STATEMENT Amounts in NOK 1 000 NOTE 2002 2001 2000 Pre-tax profit/loss -329 582 -854 527 111 227 Tax paid for the period 13 -7 927 -3 626 -29 202 Gains on demerger 1 -200 044 0 0 Gain/loss on sale of fixed assets 8 -1 540 -4 207 1 934 Write-offs and depreciation of fixed assets 8 310 073 616 578 92 492 Changes in inventory and accounts receivable/payable 4 360 15 506 -152 198 Profit adjustment upon applying equity method 9 19 127 8 799 -236 Change in other current accruals 43 045 -53 385 -24 683 Net cash flow from operations -162 488 -274 862 -666 Proceeds from sale of fixed assets 8 7 182 22 850 15 162 Payment for purchases of fixed assets 8 -122 246 -320 849 -192 443 Payment for Pieters Group acquisition 1 -213 896 0 0 Proceeds from sale of shares/holdings in other companies 6 023 125 321 4 200 Payment for shares/holdings in other companies 10 -31 888 -216 442 -2 031 693 Net cash flow from investment activities -354 825 -389 120 -2 204 774 Received on new debt 31 353 1 044 839 1 406 517 Repayment of debt -80 235 -1 014 527 -279 596 Cash received from gains on hedging 34 398 0 0 Net change in bank overdraft facility -90 000 128 411 398 608 Receipt of equity capital 11 546 158 660 304 765 555 Dividends paid 0 -25 583 -38 278 Sale of own shares 11 0 0 35 700 Purchase of own shares 11 0 -19 320 -28 677 Net cash flow from financing activities 441 674 774 124 2 259 829 Exchange rate fluctuations, cash and cash equivalents -15 659 -2 128 -3 799 Net change in cash and cash equivalents -91 298 108 014 50 590 Cash and cash equivalents as of 1 January 168 520 60 506 9 917 Cash and cash equivalents as of 31 December 77 222 168 520 60 506 Accounting principles The Group accounts, which comprise the profit and loss accounts, balance sheets, cash flow statements, and notes for the parent company and the Group, have been prepared in accordance with the Norwegian Public Limited Liability Companies Act, the Norwegian Accounting Act, and generally accepted accounting principles in Norway as of 31 December 2002. The Group accounts have been prepared based on the fundamental principles governing historical cost accounting, comparability, continued operations, congruence, and caution. Transactions are recorded to accounts at their value at the time of the transaction. Income is entered as it is earned and costs are booked against the related earned income. Applicable accounting principles are presented in detail below. In cases where actual figures are not available at the time of the closing of the accounts, generally accepted accounting principles require management to make the best possible estimates for the profit and loss account and balance sheet. Deviations may occur between estimates and actual figures. For profit and loss items, balance sheet items, and cash flow, historical figures for the three most recent years are presented. Historical figures are not adjusted for subsequent acquisitions or other business changes. A separate note presents reworked, pro forma figures to facilitate comparison. CONSOLIDATION PRINCIPLES Consolidated companies The Group's consolidated accounts comprise the accounts of companies in which the parent company or subsidiaries have a direct or indirect controlling influence. A controlling interest exists if a party directly or indirectly owns more than 50 percent of the voting capital in the controlled entity. Companies under temporary ownership are not consolidated. The Group accounts show the companies' financial position, profit from the year's activity, and cash flow; combined for the Group as a whole. Uniform accounting principles are applied to all companies in the Group. Newly acquired subsidiaries are included from the time a controlling interest is obtained. Divested subsidiaries are included in the consolidated accounts up to the point of divestiture. For phased acquisitions of ownership interests, the value of the assets and liabilities at the time of establishment of the Group relationship, is used as the basis for consolidation. Subsequent purchases of share holdings in existing subsidiaries will not affect the valuation of assets and liabilities, with the exception of added value in the form of goodwill, which is analyzed for each acquisition. Elimination of internal transactions All significant transactions and balances between companies in the Group are eliminated. Elimination of shareholdings in subsidiaries Shareholdings in subsidiaries are eliminated in the Group accounts according to the acquisition method. The difference between the cost price of the net ownership interest and the recorded value of the net assets at the time of acquisition is analyzed and entered for the individual balance sheet items according to their actual value. Any further added value is capitalized as goodwill and amortized in the profit and loss account in accordance with underlying assumptions and expected economic life span. Similarly, any undervalue is recorded as badwill, and recorded to income in accordance with underlying assumptions. Goodwill and badwill are presented together in the balance sheet; postings to the profit and loss account are also presented together. Deferred tax provisions are made for the excess values, except for goodwill and licenses. The nominal tax rate is used when calculating deferred tax. Translation of accounts of foreign subsidiaries Profit and loss transactions in foreign subsidiaries are translated using the average exchange rate for the consolidation period. The balance sheet of a foreign subsidiary is translated at the exchange rate on the balance sheet date. Differences owing to profit and loss transactions being translated at the average exchange rate and balance sheet value translation at the exchange rate on the balance sheet date are booked against equity. The effect of changes in currency exchange rates on the previous year's balance sheet is also booked against equity. Changes in the value of loans in foreign currencies due to currency exchange rate changes are booked against equity if the loans are considered hedging of investments in foreign operations. The Group has entered into a currency swap to hedge investments in foreign operations. Gains or losses on these financial instruments are booked against the Group's equity for that part that relates to the hedging. Gains or losses resulting from the part of the hedging that exceeded investments in foreign operations are booked in the profit and loss account. Group subsidiaries in Chile use the US dollar as their functional currency. Minority interests Minority interests' shares of after-tax profit and shareholders' equity are shown as separate items in the profit and loss account and in the balance sheet. Associated companies Associated companies are defined as companies in which the Group has an ownership interest of 20-50 percent, where the investment is of a long-term, strategic nature, and where the Group can exercise significant influence. Associated companies are consolidated in the Group accounts according to the equity method. The Group's share of profit in an associated company is its proportionate amount of the after-tax profit of the associated company, less any depreciation of the surplus value (due to the cost of the ownership interest exceeding the acquired share of booked equity). In the profit and loss account, the share of profit in associated companies is shown under financial items. In the balance sheet, ownership interests in associated companies are entered under fixed assets. Treatment of joint ventures Joint ventures are defined as entities controlled by the Group and one or more other companies. Joint venture companies are treated according to the gross method in the consolidated accounts. The Group's share of profits in a joint venture is itemized in the profit and loss statement. In the balance sheet, proportionate ownership interests are shown accordingly. In the parent company's accounts, the cost method is used, i.e., the proportionate ownership is recorded at historical cost; profits from joint ventures are not reflected in the parent company's profit and loss account. GENERAL ACCOUNTING PRINCIPLES Valuation principles Valuation of current assets and short-term liabilities is made at the lower/higher of acquisition cost or market value. Market value is defined as estimated future sales price less estimated sales costs. Fixed assets are recorded at acquisition cost. Depreciable fixed assets are depreciated over the economic lifetime of the asset. Upon a change in value not deemed to be temporary, the affected fixed asset is written down to market value. Similar principles apply to liabilities. In accordance with generally accepted accounting principles, there are some exceptions to the general valuation rules. These exceptions are commented on in the respective notes to the accounts. Financial realities, not simply legal formalities, are decisive for applying accounting principles and for the presentation of transactions and positions. Contingent losses Losses that are deemed likely to occur and that are quantifiable are charged to the profit and loss account. Classification principles Assets and liabilities associated with the regular business cycle and items due for payment within one year from the balance sheet date are classified as current assets or short-term liabilities. All other assets are classified as fixed assets. Other liabilities and provisions for long-term liabilities are classified as long-term. ACCOUNTING PRINCIPLES FOR SIGNIFICANT ACCOUNTING ENTRIES Income recognition Income is entered at the time it is earned. Income is normally entered at the time of delivery for sales of goods and services. Operating income is entered less VAT, rebates, bonuses, and other sales costs. Transportation costs associated with sales of fish from fish-farming activities are presented separately; they comprise shipping costs paid by customers. Transportation costs for processing activities are not presented separately, as they are included in the Group's production costs. Cost recognition/matching Costs are grouped and expensed at the same time as the income to which the costs relate. Costs that cannot be directly related to income are expensed as they are incurred. All costs related to restructured and discontinued activities are expensed at the time restructuring or discontinuance is decided upon. Other operating revenues and extraordinary items Other operating revenues represent revenues not flowing from regular Group operations. Items that are not related to regular business activities, that are non-recurring, and that are material, are classified as extraordinary. Intangible assets Intangible assets that are expected to generate future income, such as licenses and goodwill in subsidiaries, are capitalized and depreciated over their economic lifespans. Straight-line depreciation is applied over the asset's economic lifetime. Costs associated with research and development are expensed as incurred. The value of licenses acquired by the company is capitalized. Licenses are treated as fixed assets not subject to depreciation or amortization. Fixed assets Fixed assets are entered in the balance sheet at acquisition cost less accumulated depreciation and write-downs. If the market value of the fixed asset is lower than its book value, and this is due to causes not considered temporary, the asset is written down to its market value. Costs associated with normal maintenance and repair are expensed on a current basis. Costs of major replacements and renewals that substantially extend the economic lifetime of production equipment and plant are capitalized. Business assets that are replaced are expensed. Business assets are considered fixed assets if the useful economic lifetime exceeds three years and the cost price exceeds NOK 15,000. Interest associated with facilities under construction is capitalized as part of the cost price. Business assets leased on terms that largely transfer rights and obligations to the Group (financial leasing) are capitalized as business assets and entered as liabilities under other long-term liabilities. Operating lease expenses are treated as regular leasing costs, and expensed as ordinary operating expenses. Depreciation Ordinary straight-line depreciation is applied over the economic lifetime of the asset, based on the asset's historical cost price. Similar principles are applied to intangible assets. Depreciation is recorded under ordinary operating expenses. Leasing costs are recorded in the balance sheet according to the leasing schedule, and the liability is reduced by the leasing fee paid, after deduction of estimated interest costs. Treatment of subsidiaries in the parent company accounts Subsidiaries are generally defined as companies in which Fjord Seafood ASA has a shareholding exceeding 50 percent, where the investment is of a long- term strategic nature, and where it has a controlling interest. Subsidiaries are treated in the accounts in accordance with the cost method. Shares Other shares are valued at the lower of average acquisition cost or market value. Shares that have suffered a permanent decline in value are written down to market value. Inventory Inventories comprise feed, packaging, roe, juveniles, smolt, fish in the sea, and slaughtered and processed fish. Inventories of goods are valued at the lower of cost price or estimated net sales price. The cost price of processed goods comprises direct material costs, direct personnel expenses, and a percentage of indirect processing costs; the cost price of purchased goods is the actual purchase price. Due to lengthy pro duction times, interest costs are included in the cost price for smolt and fish in the sea. Costs related to natural losses and overproduction are allocated to the saleable biomass. Receivables Receivables are entered at face value less expected losses. Deferred tax and taxation costs Deferred tax is calculated on the basis of temporary differences between accounting and taxation values at the close of the accounting year. Nominal taxation rates are used in the calculations. Positive and negative differences are offset against each other for the same time interval. Deferred tax benefits arise from temporary differences that give rise to future tax deductions. Taxes for the year comprise changes in deferred tax and deferred tax benefits for the year, along with taxes payable for profit and loss account transactions for the tax year, and adjustments for errors in previous years' calculations. Foreign currencies Accounts receivable and debt in foreign currencies are valued at the year- end exchange rate. Accounts receivables associated with sales in foreign currencies in Norway are largely hedged by drawing on foreign currency accounts. Sales in foreign currencies are hedged by drawing on a corresponding amount in a liability account in the same currency. Sales of processed goods in foreign currencies from Denmark are to some extent hedged by forward exchange contracts. When hedged, receivables are valued according to their hedged exchange rates. Whether contracted sales should be hedged is continuously assessed. Forward exchange contracts entered into are treated as hedging future sales, and recorded in the profit and loss account at the time of the transaction. The Group also uses foreign currency exchange rate options as instruments to hedge future sales. The option premium is expensed to coincide with the timing of the contract it is intended to hedge. For other contracts not asso ciated with sales governed by agreements and in which speculation is the intent, unrealized gains and losses are recorded in the profit and loss account and balance sheet on a current basis. Cash flow statement The cash flow statement is prepared in accordance with the indirect method. Cash and cash equivalents comprise cash, bank deposits, and other short- term, liquid placements that can be converted immediately into known cash amounts with minimal exchange risk, and that have due dates under three months from their date of acquisition. Cash flow effects from merged or acquired companies are included as of the time the companies were integrated for accounting purposes. NOTE 1 - CHANGE IN GROUP STRUCTURE 2002 ACCOUNTING YEAR The joint venture Fjord Domstein Holding, which was owned 50/50 by Fjord Seafood ASA and Domstein ASA, was dissolved through a demerger, with accounting effect as of 1 July 2002. Prior to the demerger, Fjord Domstein Holding was the sole owner of the Pieters Group and the Enghav Group. Through the demerger, the Fjord Seafood Group acquired all shares in Pieters NV; Domstein acquired the Enghav Group. Fjord Seafood has treated the aforesaid transactions according to the principles applying to purchase acquisitions: Fjord Seafood has treated the transaction as a divestiture of its investment in Fjord Domstein Holding. The divestiture of its stake in Fjord Domstein Holding resulted in an accounting gain of TNOK 200,544, which has been entered in the profit and loss account. The take-over of Pieters is treated by Fjord Seafood as an acquisition; valuation figures are those used for the 1 July 2002 consolidation of Pieters in the Fjord Seafood Group. Data regarding consolidation of Pieters:
Company Transaction type Payment,in Fjord Group accounts Goodwill recorded Seafood shares or cash consolidation date at acquisition Pieters Holding AS Demerger Shares in Fjord Domstein 1July 2002 TEUR 99 166 Holding, worth TNOK 475 000 TNOK 333 000 demerger debt Goodwill recorded in the 2000 balance sheet at establishment of joint venture, eliminated due to 2002 changes. -TEUR 20 942 Net gain in goodwill in 2002 =TEUR 78 224
2001 ACCOUNTING YEAR In 2001, the following businesses were acquired and consolidated into the Group accounts:
Company Transaction type Payment,in Fjord Group accounts Goodwill recorded Seafood shares or cash consolidation date at acquisition Sogn Marine Farm AS Share purchase (60%) 746 shares in 1 Jan. 2001 0 Fjord Seafood ASA ContiSea LLC Group Share purchase (100%) 14 000 shares in 1 April 2001 TUSD 21 304 Fjord Seafood ASA Minnamurra Limited Group Share purchase (100%) TNOK 126 278 1 April 2001 0 cash settlement Windward Seafood LLC Share purchase (100%) TNOK 12 314 1 July 2001 TUSD 1 306 cash settlement Acquisitions are recorded in the accounts at their market value at the time of the transaction. In cases of acquisitions for which no exact transaction time has been identified, profit for the period between the date of the agreement and the date on which the transaction was completed is recorded to equity in the balance sheet. The joint venture Fjord Domstein Holding acquired the Enghav Group as of 31 December 2001. As part of this transaction, Fjord Seafood made a TNOK 245,359 cash contribution to the FDH joint venture.
NOTE 1 - CHANGE IN GROUP STRUCTURE, CONTINUED 2000 ACCOUNTING YEAR In 2000, the following businesses were acquired and consolidated into the Group accounts:
Company Transaction type Payment, in Fjord Group accounts Goodwill recorded Seafood shares or cash consolidation date at acquisition Eurolaks Group Merger and group 4 842 shares in 1 April 2000 TNOK 5 086 formation Fjord Seafood ASA Saga Lax Seafood AS Share purchase (100%) 1 356 shares in 1 Jan. 2000 TNOK 6 401 Fjord Seafood ASA Broodstock activities Group merger 1 802 shares in 1 April 2000 TNOK 6 887 of Gigante Havbruk Fjord Seafood ASA Sisomar Group Share purchase (100%) TNOK 343 125 1 July 2000 TNOK 33 240 cash settlement Brema Flatfisk AS Share purchase (88%) TNOK 500 1 July 2000 cash settlement Fjord Seafood Chile Share purchase (100%) TNOK 839 749 1 Oct. 2000 TUSD 27 864 (Temar) Group cash settlement Salmoamerica Group Share purchase (100%) TNOK 484 267 1 Oct. 2000 cash settlement
Merger with Domstein's aquaculture division The merger with Domstein's aquaculture division was decided upon in February 2000. For accounting purposes, the merger is treated as a merger of equal parties, as it was impossible to identify an acquiring party. The merged businesses were consolidated in the Group accounts for the entire 2000 accounting year. As payment to Domstein ASA, 18,757,447 Fjord Seafood shares were issued, which corresponded to 40 percent of voting capital. Establishment of the Fjord Domstein Holding joint venture Fjord Seafood ASA and Domstein ASA established the joint venture Fjord Domstein Holding DA for the purpose of acquiring all Pieters Group shares. The joint venture has been consolidated in the Fjord Seafood Group accounts according to the gross method.
Company Transaction type Payment, in Fjord Group accounts Goodwill recorded Seafood shares or cash consolidation date at acquisition Pieters Group Share purchase (50%) TNOK 324 462 1 Nov. 2000 TEUR 22 846 cash settlement
NOTE 2 - PRO FORMA PROFIT AND LOSS ACCOUNT Amounts in NOK 1 000 To present an overview of historical earnings based on the Group's present constellation and size, pro forma profit and loss statements have been prepared for the three most recent years. The pro forma profit and loss figures must be assessed in conjunction with the principles applied in preparing pro forma accounts. Please note that greater uncertainty is associated with pro forma accounts than with historical accounting figures. PRO FORMA PROFIT AND LOSS ACCOUNT 2002 2001 2000 Operating revenues 4 440 358 4 199 667 4 730 517 Operating expenses, excluding write-downs and depreciation of fixed assets -4 466 648 -4 175 196 -4 085 737 Operating profit/loss before write-downs and depreciation -26 290 24 471 644 780 Write-downs -259 129 -302 775 -265 249 Depreciation -65 583 -372 110 0 Operating profit/loss -351 002 -650 414 379 531 Net financial items -185 378 -237 198 -212 696 Pre-tax profit -536 380 -887 613 166 834 Tax 133 515 103 460 -68 573 Profit for the year -402 865 -784 153 98 261 Earnings per share (in NOK) -0.94 -1.83 0.23 Principles applied in preparing the pro forma accounts Figures have been prepared by treating the following transactions as if they were concluded on 1 January 2000: - - Acquisition of the Eurolaks Group - - Acquisition of the Sisomar Group - - Acquisition of the Salmones Tecmar Group - - Acquisition of the Salmoamerica Group - - Acquisition of the ContiSea Group - - Disposal of the joint venture Fjord Domstein Holding - - Acquisition of the Pieters Group The acquisitions are recorded in the accounts at their market value at the time of acquisition in accordance with the principles applying to purchase acquisitions. The historical figures presented as totals have been adjusted for financing costs, changes in deferred tax, amortization of added value, and goodwill recorded at acquisition. The gain recorded upon the divestiture of Fjord Domstein Holding is not included in operating revenue figures. For loan-financed acquisitions, the Group's current interest rate is applied. The acquisitions of the Sisomar and Salmoamerica groups are treated as financed through equity capital. Historical profit and loss figures involving interest rate calculations are made at the current Group interest rate. Tax expenses are calculated using the taxation rates in the appropriate countries. NOTE 3 - COMPANIES CONSOLIDATED IN THE GROUP ACCOUNTS Company Country/business address Ownership Share of voting rights Parent company Fjord Seafood ASA Norway/Bronnoy Subsidiary Brema Flatfisk AS Norway/Bremanger 100.0% 100.0% Fjord Forsoksstasjon Helgeland AS Norway/Alstadhaug 51.1% 51.1% Fjord Seafood Norway AS Norway/Bronnoy 100.0% 100.0% Fjord Seafood Sales AS Norway/Maloy 100.0% 100.0% Pieters Holding AS 1) Norway/Oslo 100.0% 100.0% Sisomar AS Norway/Sorfold 100.0% 100.0% Pieters N.V. 1) Belgium 100.0% 100.0% Pieters Visbedrijf N.V. 1) Belgium 100.0% 100.0% Demaro N.V. 1) Belgium 100.0% 100.0% Domstein CC 1) Belgium 100.0% 100.0% Verberckmoes Visbedrijf N.V. 1) Belgium 100.0% 100.0% Heartland Enterprises Ltd. British Virgin Islands 100.0% 100.0% Salmoamerica Ltd. British Virgin Islands 100.0% 100.0% Cultivadora de Salmones Linao Ltda. Chile 100.0% 100.0% Fjord Seafood Chile S.A. Chile 100.0% 100.0% Salmones Americanos Ltda. Chile 100.0% 100.0% Salmones Tecmar S.A. Chile 100.0% 100.0% Salmones Lican Ltda. Chile 100.0% 100.0% Fjord Seafood Sales Denmark A/S Denmark 100.0% 100.0% Six Holding SA 1) France 100.0% 100.0% Sinafler SCI 1) France 100.0% 100.0% LMB SA 1) France 100.0% 100.0% Appeti Marine SA 1) France 100.0% 100.0% Rolmer SA 1) France 100.0% 100.0% CC SCI 1) France 100.0% 100.0% Belisco Ehf 1) Iceland 100.0% 100.0% Bresken B.V. 1) Netherlands 100.0% 100.0% Gebr Sterk Holding B.V. 1) Netherlands 100.0% 100.0% Gebr Sterk Beheer B.V. 1) Netherlands 100.0% 100.0% Sterk Specials B.V. 1) Netherlands 100.0% 100.0% Gebr Sterk B.V. 1) Netherlands 100.0% 100.0% Diepvries Monninckendam B.V. 1) Netherlands 100.0% 100.0% Ditto B.V. 1) Netherlands 100.0% 100.0% Aquamerica International Holding S.A. Panama 100.0% 100.0% Panamerica International Holding S.A. Panama 100.0% 100.0% Salmoamerica Corp. Panama 100.0% 100.0% Minnamurra Ltd. Scotland 100.0% 100.0% Tobson Fish Farm Company Ltd. Scotland 100.0% 100.0% Western Isles Seafood Company Ltd. Scotland 100.0% 100.0% Sterk UK Ltd. 1) Scotland 100.0% 100.0% Pieters UK Ltd. 1) Scotland 100.0% 100.0% Wisco Processing Ltd. 1) Scotland 100.0% 100.0% Alimer 1) Switzerland 100.0% 100.0% Covedis 1) Switzerland 100.0% 100.0% Atlantic Salmon of Maine LLC USA 100.0% 100.0% Company Country/business address Ownership Share of voting rights Ducktrap River Fish Farm LLC USA 100.0% 100.0% Fjord Seafood USA LLC USA 100.0% 100.0% Island Aquaculture Company LLC USA 100.0% 100.0% Treats Islands Fisheries Inc USA 100.0% 100.0% Windward Seafood LLC USA 100.0% 100.0% 1) Consolidated in the Group as of 1 July 2002, upon Pieters Group acquisition. NOTE 4 - BUSINESS SEGMENT REPORTING Amounts in NOK 1 000 Fjord Seafood is organized into two divisions: Farming and Value-Added Products (VAP). The Farming division comprises the Group's aquaculture activities, and its slaughterhouses and processing activities in the USA and Norway. The VAP division comprises the Pieters Group, which is active in value-added processing and sale of fish products. In 2001 and the first half of 2002, the joint venture, Fjord Domstein Holding, was also part of the VAP business area.
Farming 2002 2001 KEY FIGURES Norway Scotland USA Chile Elimina- Farming Farming tions total total Sales revenues, non-Group customers 1 289 018 1 750 651 938 411 962 0 2 354 668 2 482 697 Sales revenues, Group customers 1 168 321 112 222 1 382 179 241 1 226 131 235 035 206 947 Total sales revenues 2 457 339 113 973 653 320 591 203 1 226 131 2 589 703 2 689 644 Write-offs and depreciation -151 883 -34 014 -26 757 -51 009 0 -263 663 -254 536 Write-offs and amortization of goodwill -35 624 -398 -2 395 -7 934 0 -46 351 -331 533 Other operating expenses -2 480 280 -110 867 -641 920 -593 878 -1 226 131 -2 600 814 -2 766 466 Operating profit/loss -210 448 -31 307 -17 753 -61 618 0 -321 126 -662 892 Assets 1 962 007 179 229 486 373 1 164 240 143 826 3 648 022 4 275 477 Liabilities -1 467 287 -114 706 -328 522 -664 452 -145 226 -2 429 741 -2 777 256 Investments during the year 38 440 3 526 20 357 12 034 74 357 245 068 Number of employees as of 31 Dec. 578 50 279 1 473 2 380 2 564
SALES REVENUES BY CUSTOMER'S LOCATION 2002 2001 Japan 206 970 253 082 China 21 191 71 003 Rest of Asia 145 180 55 857 EU 671 410 1 000 476 Rest of Europe 293 312 317 196 USA 851 328 713 161 Rest of North America 4 927 11 791 South America 102 798 37 058 Russia 24 657 0 Other regions 32 897 23 074 Total Farming sales revenues, non-Group customers 2 354 668 2 482 697 Value Added Products (VAP) In the first half of 2002, the Group owned 50 percent of the joint venture, Fjord Domstein Holding, in which the Pieters Group comprised the bulk of business activities. As of 1 July 2002, the joint venture was dissolved; Fjord Seafood acquired the Pieters Group held by the joint venture, and the Pieters Group became a wholly owned Fjord Seafood subsidiary and was consolidated in the Group accounts as of that date. The presentation below shows how the total figures for the VAP business area are arrived at, and also provides further information about the Pieters Group for the full year, as a basis for evaluating the business area. See Note 1 for further details. KEY FIGURES FDH joint venture Pieters Group VAP total 1Q & 2Q 2002 3Q & 4Q 2002 Eliminations 2002 Sales revenues, non-Group customers 573 016 996 830 0 1 569 847 Sales revenues, Group customers 1 439 6 159 1 764 9 362 Total sales revenues 574 455 1 002 989 1 764 1 579 208 Write-offs and depreciation -11 442 -23 555 0 -34 997 Write-offs and amortization of goodwill -2 264 42 416 11 40 162 Other operating expenses -546 442 -988 866 -1 786 -1 537 094 Operating profit/loss 14 307 32 983 -12 47 279 Assets 1 634 821 1 634 821 Liabilities -1 165 346 -1 165 346 Investments during the year 17 658 45 511 63 169 Number of employees as of 31 Dec. 1 284 1 284
Pieters - 100% 2002 2001 KEY FIGURES Netherlands Switzer- France UK Belgium Others/ Pieters Pieters land elimin. 100% 100%* Sales revenues, non-Group customers 448 640 126 787 274 158 58 348 1 048 435 0 1 956 368 1 675 071 Sales revenues, Group customers 0 0 0 5 799 3 238 0 9 037 7 599 Total sales revenues 448 640 126 787 274 158 64 147 1 051 673 0 1 965 404 1 682 670 Write-offs and depreciation -11 240 -2 032 -4 983 -2 462 -14 156 -9 097 -43 968 -33 744 Write-offs and amortization of goodwill 78 167 -1 126 -199 0 -7 817 -19 430 49 594 -2 211 Other operating expenses -483 645 -119 627 -262 977 -71 642 -975 244 9 141 -1 903 994 -1 556 365 Operating profit/loss 31 922 4 002 5 999 -9 958 54 456 -19 385 67 036 90 350 Assets 150 398 40 645 109 157 44 720 558 638 731 262 1 634 821 899 224 Liabilities -119 729 -20 215 -79 368 -23 538 -344 309 -578 188 -1 165 346 -598 747 Investments during the year 7 463 3 022 18 831 168 39 853 0 69 337 169 084 Number of employees as of 31 Dec. 357 39 310 161 417 0 1 284 1 348 * 2001 figures are historical accounting figures for the Pieters Group. No adjustments have been made to reflect subsequent changes in ownership, associated goodwill, or other changes.
SALES REVENUES BY CUSTOMER'S LOCATION (Pieters 100%) 2002 2001 Japan 1 412 2 852 Rest of Asia 7 643 7 246 EU 1 786 028 1 650 493 Rest of Europe 139 350 6 113 USA 14 866 6 820 Rest of North America 695 381 Russia 3 194 0 Other regions 3 181 1 165 Total Pieters Group sales revenues, non-Group customers 1 956 368 1 675 071 Group figures - by business area 2002 2001 KEY FIGURES Farming VAP Elim./ASA Group Group Sales revenues, non-Group customers 2 354 668 1 569 847 71 038 3 995 553 3 302 533 Sales revenues, Group customers 235 035 9 362 -244 396 0 0 Total sales revenues 2 589 703 1 579 208 -173 359 3 995 553 3 302 533 Write-offs and depreciation -263 663 -34 997 -988 -299 648 -273 596 Write-offs and amortization of goodwill -46 351 40 162 -350 -6 539 -342 982 Other operating expenses -2 600 814 -1 537 094 297 522 -3 840 387 -3 336 275 Operating profit/loss -321 126 47 279 122 825 -151 021 -650 320 Assets 3 648 022 1 634 821 52 302 5 335 145 5 352 339 Liabilities -2 429 741 -1 165 346 376 551 -3 218 536 -3 664 631 Investments during the year 74 357 63 169 -15 279 122 246 2 45 068 Number of employees as of 31 December 2 380 1 284 20 3 684 3 928 GROUP SALES REVENUES BY CUSTOMER'S LOCATION 2002 2001 Farming VAP To FDH joint Group Group venture, not elim. Japan 206 970 824 207 794 253 082 China 21 191 0 21 191 71 002 Rest of Asia 145 180 5 950 151 130 55 857 EU 671 410 1 348 492 2 019 902 1 820 312 Rest of Europe 293 312 199 333 71 038 563 682 317 196 USA 851 328 9 910 861 238 713 161 Rest of North America 4 927 514 5 441 11 791 South America 102 798 0 102 798 37 058 Russia 24 657 1 643 26 299 0 Other regions 32 897 3 181 36 077 23 074 Total Group sales revenues, non-Group customers 2 354 668 1 569 847 71 038 3 995 553 3 302 533 NOTE 4 - BUSINESS SEGMENT REPORTING, CONTINUED GROUP SALES REVENUES BY CUSTOMER'S LOCATION Japan 5.2% China 0.5% Rest of Asia 3.8% EU 50.6% Rest of Europe 14.1% USA 21.6% Rest of North America 0.1% South America 2.6% Russia 0.7% Other regions 0.9% NOTE 5 - INVENTORY Amounts in NOK 1 000 INVENTORY 2002 2001 Raw materials 1) 75 515 47 958 Goods in progress 2) 787 854 883 998 Finished goods 3) 258 494 129 463 Total inventory 1 121 864 1 061 418 Inventory, joint venture 0 149 741 Total inventory, Group balance sheet 1 121 864 1 211 159 Total inventory write-downs 46 068 158 800 1) Includes feed, roe, and packaging. 2) Goods in progress comprise smolt and fish in the sea. 3) The increase is primarily due to the Pieters Group becoming wholly owned in 2002. Pieters was part of the Fjord Domstein Holding joint venture in 2001. CHANGE IN METHOD OF CALCULATING PRODUCTION EXPENSES Activities in Scotland have changed the principles applied in calculating full production costs for fish in the sea. This change resulted in a TNOK 14,121 reduction in the 2002 opening balance. SUPERCHILL IN THE USA The east coast of the United States was hit with Superchill conditions in January and February 2003, when sea temperatures fell below freezing. Superchill conditions led to significant losses of fish for Fjord Seafood and for other aquaculture businesses in the area. Such losses are covered by insurance; the unreimbursed deductible amount for Superchill losses has been recorded in the 2002 accounts. NOTE 6-RESTRUCTURING COSTS AND OTHER NON-RECURRING ITEMS Amounts in NOK 1 000 In 2002, the Group made significant changes to its organization, changes which affected the Farming business area in particular. The changes included closing down production facilities in Chile and Norway, with the associated write-downs of operating assets and goodwill; layoffs and staff cutbacks were made. Also, VAP activities in the UK and the Netherlands were closed. The Group also incurred significant costs associated with its efforts to secure new long-term financing. The demerger of Fjord Domstein Holding resulted in significant accounting gains. RESTRUCTURING/WRITE-DOWNS/NON-RECURRING COSTS 2002 Allocations associated with reorganization of activities in Chile (Farming) -10 519 Other allocations related to personnel expenses -2 566 Total restructuring/non-recurring costs recorded under personnel expenses -13 085 Allocations for costs of eliminating activities in the UK/Netherlands (VAP) -24 402 Restructuring costs and non-recurring costs in Norway -36 730 Other costs -6 284 Total restructuring/non-recurring costs recorded under other operating expenses -67 416 Write-downs of operating assets, Norway (Farming) -43 555 Write-downs of operating assets, Scotland (Farming) -25 000 Write-downs, operating assets, UK/Netherlands (VAP) -8 146 Other write-downs, operating assets -14 382 Total restructuring/non-recurring costs recorded under write-downs of operating assets -91 083 Amortization of goodwill, Norway (Farming) -29 000 Total restructuring/non-recurring costs recorded under amortization of goodwill -29 000 Costs associated with new financing -34 691 Other non-recurring costs, financing -7 306 Total restructuring/non-recurring costs recorded under financing expenses -41 997 Total restructuring and non-recurring costs -242 581 RECORDED TO INCOME Reversal of negative goodwill UK/Netherlands (VAP), recorded under amortization of goodwill/badwill 54 500 Gain on demerger of joint venture, recorded under other operating revenues 200 044 NOTE 7 - PERSONNEL EXPENSES Amounts in NOK 1 000 NUMBER OF EMPLOYEES, AVERAGE 2002 2001 Total number of employees, average 3 824 3 928 At year-end 2002, the Group had 3,684 employees BREAKDOWN OF PERSONNEL EXPENSES 2002 2001 2000 Wages and salaries 477 183 344 042 170 485 Social security contributions 47 373 23 473 10 007 Pension expenses 8 198 3 802 3 165 Other benefits 32 375 17 141 5 507 Personnel expenses 565 129 388 457 189 164 Personnel expenses, FDH joint venture (first six months of 2002) 104 537 131 754 20 893 Total personnel expenses 669 665 520 211 210 056 PENSION PLANS Defined benefit plans The Fjord Seafood Group has an early retirement plan (AFP) that covers the equivalent of 357 full-time employees. The plan is a defined benefit plan which provides employees with the right to defined future pension benefits. Early retirement plans are financed by operations. At year-end 2002, pension liabilities associated with early retirement plans were estimated at and recorded as TNOK 700. Estimates on the percentage of employees who will make use of the plans through voluntary resignation is a key factor in estimating pension liabilities. Estimates vary within units and among regions in Norway. Contribution plans Those employees in Norwegian Group companies whose salaries exceed nine times the Norwegian social security base amount are included in a group annuity plan that offers investment alternatives. Under Norwegian accounting standards for pension obligations, this plan is considered a contribution plan, and the costs related to the plan, are expensed when they occur. At year-end 2002, the plan covered 28 employees. STOCK OPTION PLANS FOR MANAGEMENT AND KEY PERSONNEL The Group has a stock option plan for management and key personnel. The plan runs for three years. Each participant has been assigned a fixed number of shares, of which one third is earned per year. Upon establishment of the option program in 2002, a total of 13,571,302 options were included in the program. The exercise price is NOK 3 per share. Group management options Position Share options Share options pursuant to this plan: assigned earned in 2002 Paul Birger Torgnes President and CEO 700 000 233 333 Sverre Haerem EVP and CFO 525 000 175 000 Oyvind Fylling Jensen EVP and COO Farming 525 000 175 000 Frank Tierenteyn EVP and COO VAP 525 000 0 Charlotte Hartvigsen Lem EVP Communications 525 000 175 000 In addition, the Group has an option plan established in 2000 that included board members and several key employees. The exercise price under this option plan is NOK 52 per share. Board members and management have resigned the right to options under this plan; however it is maintained for other key personnel. The option plan expires in 2003.
REMUNERATION TO BOARD MEMBERS AND MANAGEMENT President and CEO Board of Directors Salaries 1 850 0 Contributions to pension plans 72 0 Other remunerations 0 1 104
President and CEO For the 2002 accounting year, Fjord Seafood's President and CEO had a bonus program with a ceiling of TNOK 400. The bonus is awarded according to profit performance; no bonus has been or will be paid for 2002. If the services of the President and CEO are terminated by the company, he is entitled to receive salary during the termination period, in addition to one year's salary. Payment is conditioned on the President and CEO agreeing to leave his position as of the determined date, and on the President and CEO not filing any claims against the company. If the President and CEO terminates his employment or if the company should merge with one or more companies, he may be entitled to the aforementioned post-separation salary under certain conditions. In addition, the President and CEO is subject to a waiting clause that, if invoked by the company, entitles him to one year's salary. The President and CEO has a loan from the company of TNOK 57. The loan is paid down by TNOK 57 annually; the interest rate is 6% per annum. Satisfactory security has been posted for the loan. Other Group management Members of the Group's management team have individual agreements with the company that regulate salaries, bonuses, payment upon termination of employment, and option plans. All bonus plans are performance dependent; no bonuses were paid or will be paid for 2002. No agreement for payment upon termination of employment entitles beneficiaries to more than two year's salary, above and beyond salary during the termination period. LOANS TO EMPLOYEES Loans to employees totaled TNOK 1,308; loans to employees in the Group's Norwegian companies constituted TNOK 1,065 of this amount. AUDITORS' FEES KPMG KPMG KPMG Other appointed Norway Outside Norway Total auditors Regular auditing services* 4 423 3 335 7 759 2 009 Other services 6 943 1 400 8 343 734 Total fees 11 366 4 735 16 101 2 743 * Regular auditing fees comprise: - - All services that pursuant to law and generally accepted accounting practices are required to be performed by auditors to provide their audit reports to the consolidated Group accounts, the annual accounts, and the accounts of all consolidated subsidiaries. This includes all extra work and consultancy associated with the presentation of the accounts as required by law. - - Signature on trading statement, annual reports for employer's social security contributions; see Auditor's verification of taxes and public fees. - - Agreed-to control actions as requested by company management or by injunction from shareholders' meetings. - - Limited auditing of accounts. - - Services related to certifications or confirmations by the company's auditor as required by law and regulations. - - Services associated with other confirmations or attestations made by the appointed auditor. NOTE 8 - TANGIBLE AND INTANGIBLE FIXED ASSETS Amounts in NOK 1 000
OPERATING ASSETS AND Land, build- Plant and Ships, Fixtures Goodwill Licenses Invest- Total DEPRECIATION ings and equipment rigs, etc. and fit- and ment other real tings, fur- rights grants property niture, etc. Acquisition costs as of 1 January 400 733 672 656 37 887 42 743 605 726 1 582 280 -13 606 3 328 419 Reclassifications -38 986 4 783 -1 916 -3 961 12 295 -5 206 152 -32 839 Additions through mergers 211 745 297 935 0 58 909 749 451 9 876 -8 886 1 319 031 Additions, purchased operating assets 27 693 59 371 1 328 12 280 17 330 3 917 327 122 246 Disposals -4 711 -46 106 -3 448 -9 001 0 0 0 -63 267 Acquisition cost as of 31 December 596 472 988 639 33 851 100 970 1 384 803 1 590 868 -22 013 4 673 590 Accumulated ordinary depreciation as of 1 Jan . -3 587 -136 948 -6 643 -17 876 -47 625 -2 728 5 936 -209 471 Reclassifications 21 203 15 125 524 3 228 -10 432 3 191 0 32 839 Additions through mergers -72 225 -237 692 0 -44 671 -10 586 -6 445 2 174 -369 445 Ordinary depreciation for the year -29 875 -148 045 -6 713 -13 154 -28 935 -2 368 2 192 -226 899 Accumulated depreciation, disposals 1 736 32 474 2 553 6 155 0 0 0 42 919 Accumulated depreciation as of 31 Dec. -82 747 -475 086 -10 279 -66 319 -97 578 -8 350 10 302 -730 057 Accumulated depreciation as of 1 Jan. -2 288 -9 219 -49 -24 -300 530 -60 000 0 -372 110 Depreciation/reversals for the year -38 159 -30 640 0 0 25 500 -22 283 0 -65 583 Accumulated depreciation as of 31 Dec. -40 447 -39 859 -49 -24 -275 030 -82 283 0 -437 693 Foreign currency adjustments -34 178 -38 224 -2 864 -3 639 -40 500 -211 615 489 -330 531 Book value as of 31 December 439 100 435 469 20 659 30 988 971 694 1 288 620 -11 221 3 175 309 Economic lifetime Up to 20 years 3-10 years 7 years 3-10 years 5-20 years Perpetual/ 3-15 years Depreciation schedule Straight-line Straight-line Straight-line Straight-line Straight-line 10 years Straight-line
OF WHICH, LEASING RECORDED Land, build- Plant and Ships, Fixtures Total IN THE BALANCE SHEET ings and equipment rigs, etc. and fit- IS SHOWN BELOW other real tings, fur- property niture, etc. Acquisition costs as of 1 Jan. 0 164 162 675 363 165 200 Reclassifications -335 0 0 0 -335 Additions through mergers 4 988 0 0 0 4 988 Additions, purchased operating assets 82 15 201 152 0 15 436 Disposals 0 -433 0 0 -433 Acquisition cost as of 31 Dec. 4 735 178 931 827 363 184 856 Accumulated ordinary depreciation as of 1 Jan 0 -40 101 -535 -210 -40 846 Additions through mergers -2 153 0 0 0 -2 153 Ordinary depreciation for the year -160 -25 729 -73 -31 -25 994 Accumulated depreciation, disposals 0 33 120 0 0 33 Accumulated depreciation as of 31 Dec. -2 313 -65 797 -608 -241 -68 960 Foreign currency adjustments -55 -6 860 -18 -25 -6 958 Book value as of 31 December 2 367 106 274 201 97 108 938 Economic lifetime Up to 20 years 3-10 years 7 years 3-10 years Depreciation schedule Straight-line Straight-line Straight-line Straight-line
DEPRECIATION FOR THE YEAR RECORDED IN THE ACCOUNTS 2002 2001 Depreciation of operating assets of joint venture 11 442 -18 645 Depreciation of operating assets -197 964 -183 371 Total, ordinary depreciation of operating assets -209 406 -202 016 Amortization of goodwill, joint venture -2 264 -10 098 Amortization of goodwill -45 235 -32 354 Reversal of badwill 16 300 0 Total amortization of goodwill/badwill -31 199 -42 452 Depreciation for the year recorded in Group accounts -240 605 -244 468 ANNUAL LEASING COSTS OF OPERATING ASSETS NOT RECORDED IN THE BALANCE SHEET 2002 Office premises 7 579 Machines, furniture and fittings, equipment, etc. 16 249 Vehicles 1 421 The above-mentioned assets are not recorded in the balance sheet because their leasing agreements do not meet the criteria for classification as financial leasing, in accordance with generally accepted accounting principles. LICENSES The value of the company's acquired licenses is capitalized. Most of the licenses are treated as perpetual; they are not depreciated. Other rights are depreciated over their estimated economic lifetime. Of the Group's book value for licenses, TNOK 188,582 is associated with licenses subject to award in Chile; these licenses had not been formally awarded by year-end. INVESTMENT GRANTS The Group has received investment grants. These grants are conditioned upon the investments for which they were given not being sold before a specified date. The grants are recorded in the balance sheet as other long-term liabilities; they are recorded to income in annual amounts that correspond to the depreciation that applies to the operating assets in question. NOTE 9 - ASSOCIATED COMPANIES Associated companies are companies in which the Group has a significant ownership interest, ranging from 20-50 percent and over which the Group is able to exercise significant influence. Associated companies are recorded in the Group accounts according to the equity method.
COMPANY Bylgja HF NFBP EHF NEW Somna Byrknes DHC, Inc Laks AS Fiskemottak AS FORMAL DETAILS Acquisition date 1 July 2002 1 July 2002 1 May 2001 15 Sept. 2002 1 Jan. 2000 Business address Iceland Iceland Maine, USA Somna Maloy Ownership (in %) 25.0% 25.0% 24.5% 40.0% 37.0% Share of voting rights (in %) 25.0% 25.0% 24.5% 40.0% 37.0% DETAILS RELATED TO ACQUISITION Acquisition cost 1 244 1 400 2 410 Equity recorded in balance sheet at the time of acquisition 112 40 1 400 49 Added/under value -279 -2 599 2 361 Of which: Licenses 2 355 Goodwill 167 3 882 DETAILS RELATED TO THE YEAR'S FIGURES Opening balance as of 1 January 2 712 +/- Foreign currency adjustments of balance sheet items recorded to equity + Additions through mergers/acquisitions 337 -3 290 1 400 - - Disposals by sales Profit items for the year +/- Share of profit for the year 18 479 +/- Share of profit for the year of joint venture (first six months of year) -22 -577 +/- Added/under value recorded in profit and loss account (excl. goodwill) - - Goodwill written off/amortized +/- Dilution effect on profit Total Profit -4 -98 +/- Foreign currency adjustments, profit 1 19 +/- Other adjustments +/- Receipt/payment of equity capital in the period 29 -256 Net value, associated companies 2002 363 -3 625 1 400 2 712 Book value of investments in associated company 363 1 400 2 712 Book value included in other liabilities -3 625
COMPANY Fjord Flatanger Salmones Vest Bronnbat- Asen Total for Marin AS Settefisk AS Llanquihue S.A. Service AS Settefisk AS Gentec S.A. Group FORMAL DETAILS 30 June- 1 Jan.- 1 Jan.- Acquisition date 1 Oct. 2000 1 Oct. 1997 1 Oct. 2000 1 Jan. 2000 1 Oct. 1997 1 Oct. 2000 Business address Leirfjord Asen Puerto Varas Maloy Asen Puerto Varas Ownership (in %) 34.8% 30.1% 25.0% 50.0% 30.3% 22.5% Share of voting rights (in %) 34.8% 30.1% 25.0% 50.0% 30.3% 22.5% DETAILS RELATED TO ACQUISITION Acquisition cost 77 672 3 619 1 125 50 6 042 960 93 522 Equity recorded in balance sheet at the time of acquisition 77 672 968 1 125 49 2 608 960 83 984 Added/under value 2 650 1 3 434 5 569 Of which: Licenses 2 355 Goodwill 668 1 274 4 993 DETAILS RELATED TO THE YEAR'S FIGURES Opening balance as of 1 January 64 697 2 080 5 733 51 6 727 5 431 87 431 +/- Foreign currency adjustments of balance sheet items recorded to equity -1 302 -1 233 -2 535 + Additions through mergers/ acquisitions -2 551 - - Disposals by sales -51 -51 Profit items for the year +/- Share of profit for the year -13 131 -133 -243 557 -2 202 -14 655 +/- Share of profit for the year of joint venture (first six months of year) -599 +/- Added/under value recorded in profit and loss account (excl. goodwill) -48 -2 578 -100 -1 323 -4 049 - - Goodwill written off/ amortized -130 -51 -181 +/- Dilution effect on profit 357 357 Total profit -12 774 -312 -2 821 406 -3 525 -19 127 +/- Foreign currency adjustments, profit 360 142 521 +/- Other adjustments -359 161 -198 +/- Receipt/payment of equity capital in period -1 485 -1 712 Net value, associated companies 2002 50 079 1 768 1 971 7 293 815 61 779 Book value of investments in associated company 50 079 1 768 1 971 0 7 293 815 65 404 Book value included in other liabilities -3 625 Until 1 July 2002, the Group owned 50 percent of the joint venture Fjord Domstein Holding AS. The other controlling owner was Domstein ASA. The joint venture was dissolved effective 1 July 2002, and its holdings distributed to its former owners in the settlement. Fjord Seafood ASA, through the newly established Pieters Holding AS subsidiary, acquired 100 percent of Pieters N.V. and its associated subsidiaries. For more information, see Note on acquisitions, Note 1, and specification of key figures for the Group, Note 4.
NOTE 10 - SHARES AND HOLDINGS IN OTHER COMPANIES Amounts in NOK 1 000 Number of Ownership Acquisition Book value shares (in %) cost Aqua Gen AS 292 668 11.1% 20 391 20 391 Stoknfiskur 10 633 341 10.0% 5 969 5 969 Seloy Sjofarm AS 70 35.0%* 4 614 4 614 Aquarius AS 11 428 3.1% 1 143 1 143 Nova Sea AS 100 1.3% 1 000 1 000 Norway R. Salmon AS 35 2.0% 525 525 Lovund Invest AS 500 9.1% 500 500 Sognefjord Marinefarm AS 404 40.0%* 404 404 Nordkapp Sjofarm 200 3.3% 200 200 Sakorn Invest Nord AS 500 2.1% 200 200 Miljovarme AS 190 19.0% 190 190 Norsal AS 300 2.0% 150 150 Inmobiliaria Archipielago S.A. 20 1.0% 129 129 Other shares 246 246 Total book value, shares and holdings 35 661 35 661 * Fjord Seafood does not have significant influence over these companies, consequently, they are not treated in the Group accounts according to the equity method. NOTE 11 - EQUITY AND SHAREHOLDER INFORMATION
CHANGES IN EQUITY Share capital Own shares Other Fund for Minority Total equity valuation interests differences Equity as of 31 December 2001 201 642 -596 1 489 083 -4 815 2 394 1 687 708 Change in equity for the year: Capital expansions/ mergers 225 762 450 815 676 577 Profit for the year -190 342 -1 936 -192 278 Other items recorded to equity -1 640 -1 640 Tax on items recorded directly to equity 7 323 7 323 Foreign currency adjustments -68 330 -68 330 Minority interests, additions/eliminations 6 -6 Equity as of 31 December 2002 427 404 -596 1 755 245 -73 146 452 2 109 358
OWN SHARES Fjord Seafood acquires its own shares to use them as remuneration at acquisitions and mergers of businesses and to issue to its employees. Acquisitions and disposals of own shares are completed at the stock exchange price of the shares at the time an agreement for acquisition or disposal is entered into. Pursuant to section 5.5 of Norway's accounting act on convertible financial assets, the average acquisition price is used in calculating any accounting gains. Any gains on sale of own shares are included in other paid-in equity. Fjord Seafood ASA did not sell any own shares in 2002. In 2001, Fjord Seafood ASA bought 596,400 own shares in the market at a total price of TNOK 19,320, which is equal to the number of shares held as of 31 December 2002. Own shares are recorded at face value and charged against paid-in equity. Other payments related to the acquisition of own shares are recorded as a deduction in earned equity. NOTE 11 - EQUITY AND SHAREHOLDER INFORMATION, CONTINUED THE TWENTY LARGEST FJORD SEAFOOD ASA No. of shares Ownership Share of SHAREHOLDERS AS OF 31 DECEMBER 2002 held (in %) voting rights Seaboard Corporation 88 398 881 20.7% 20.7% Domstein ASA 53 418 164 12.5% 12.5% Enghav Holding AS* 35 000 000 8.2% 8.2% SND Invest AS 34 551 242 8.1% 8.1% Odin Norge 17 149 563 4.0% 4.0% Continental Enterprises Ltd 15 782 214 3.7% 3.7% Odin Norden 14 350 457 3.4% 3.4% Skagen Vekst 6 303 182 1.5% 1.5% Contigroup Companies, Inc. 5 950 000 1.4% 1.4% Fondsfinans ASA 4 952 693 1.2% 1.2% Sparebankenes Sikringsfond 4 876 417 1.1% 1.1% Nordea Avkastning 4 790 333 1.1% 1.1% DNB Markets, Aksjehandel/Analyse 4 708 505 1.1% 1.1% Vital Forsikring ASA 4 394 867 1.0% 1.0% Torgnes Akva AS 3 598 934 0.8% 0.8% Verdipapirfondet Fondsfinans Aktiv 3 596 929 0.8% 0.8% Verdipapirfondet Fondsfinans Aktiv II 3 583 151 0.8% 0.8% Nordea Vekst 3 449 333 0.8% 0.8% Torgnes Invest AS 3 333 551 0.8% 0.8% Mathisen & Lyng Rederi AS 3 333 333 0.8% 0.8% Total 20 largest shareholders 315 521 749 73.8% 73.8% Total other shareholders 111 882 002 26.2% 26.2% Total number of shares 427 403 751 100.0% 100.0% * Enghav Holding AS is wholly owned by Domstein ASA. SHARES HELD BY DIRECTORS AND KEY PERSONNEL Position No. of shares held Paul Birger Torgnes 1) President and CEO 9 383 623 Rolf Domstein 2) Board Chairman 28 932 Bent Fuglesang Director 5 507 Charles Fribourg 3) Director 21 732 214 Johnny Gjeseth Director 320 Frank Tierenteyn CEO - Pieters 7 400 1) Figure includes shares held by companies or other parties with whom Paul Birger Torgnes can be identified in accordance with law. 2) Shareholding includes shares held by companies and other parties that Rolf Domstein may be identified with in accordance with law. In addition, Rolf Domstein has a significant holding in Domstein ASA, a major Fjord Seafood ASA owner (see details above). Domstein ASA also owns Enghav Holding AS. 3) Shareholding includes shares held by other companies and other parties that Charles Fribourg under law may be identified with. AUTHORIZATION TO ISSUE SHARES Fjord Seafood's shareholders' meeting has authorized the Board to issue up to 100,000,000 new shares in the company; the Board has exercised this authority to issue 26,200,000 new shares. The authorization also allows for the Board to issue shares for contributions in kind, and that the Board issue shares when employees exercise options granted under employee option programs. NOTE 12 - DEBT Amounts in NOK 1 000 LONG-TERM DEBT FROM FINANCE INSTITUTIONS 2002 2001 Currency Average Debt Debt Average Debt Debt interest rate amount in NOK interest rate amount in NOK NOK 9.17% 542 213 542 213 8.04% 380 380 380 380 USD 4.46% 114 266 795 946 7.35% 116 899 1 053 449 EUR 6.07% 33 096 241 303 5.88% 15 513 123 690 GBP 6.98% 4 750 53 176 5.68% 4 750 62 087 Total long-term debt owed to financial institutions 1 632 638 1 619 606 Total long-term loans owed to financial institutions, joint venture 0 211 974 Total long-term debt owed to financial institutions 1 632 638 1 831 580
PAYMENT SCHEDULE, LONG-TERM DEBT 2003 2004 2005 2006 2007 Later Total Payment schedule* 147 030 245 964 238 935 419 944 206 611 374 154 1 632 638 * See details below on restructuring of debt.
DEBT WITH MATURITY EXCEEDING FIVE YEARS 2002 2001 Debt to financial institutions 1 302 966 518 970 Other long-term debt 1 370 89 200 Total debt 1 304 336 608 170 Total long-term debt, joint venture 227 287 Total long-term debt with maturity exceeding five years 1 304 336 835 457 NEW BANK AGREEMENT - RESTRUCTURING OF DEBT Of the total debt as of 31 December 2002, TNOK 1,468,264 is associated with the Group's main bank, Nordea. In February 2003, the Group renegotiated its agreements with Nordea; the total framework for the new agreement is TNOK 2,380,000. The refinancing agreement has allowed the Group to replace major parts of its short-term debt with long-term debt by year-end 2002; however debt as of 31 December 2002 has not been regrouped in the balance sheet. The repayment schedule presented above and the interest rate terms are in accordance with the renegotiated bank agreement. FINANCIAL COVENANTS The majority of the Group's debt is secured by mortgages on its assets. Debt financing covenants also carry some limitations as to investments and acquisitions as well as restrictions on the Group taking on additional debt. In addition, the Group, under specific conditions is subject to requirements for liquidity. Also, there is a requirement for financial ratios associated with net interest-bearing debt in proportion to EBITDA, and equity ratio conditions must be met. NOTE 13 - TAX Amounts in NOK 1 000 TAX FOR THE YEAR IN THE PROFIT AND LOSS ACCOUNT 2002 2001 2000 Norway -769 -7 161 -51 610 Foreign units -11 937 -703 -5 717 Joint venture 0 -14 121 -3 745 Total tax payable -12 706 -21 985 -61 072 Norway 125 171 105 529 30 289 Deferred tax established at merger in Norway 0 0 1 131 Foreign units 22 333 21 914 2 097 Joint venture -4 672 -794 1 143 Total change in deferred tax/tax benefit 142 832 126 649 34 660 Correction of earlier year's tax 7 178 6 708 197 Tax on profit for the year 137 304 111 372 -26 215 TAX PAYABLE IN THE BALANCE SHEET 2002 2001 2000 Tax payable in Norway on profit for the year 0 -7 161 -51 610 Tax payable associated with equity transactions in Norwegian companies 0 6 565 49 790 Total tax payable in Norway 0 -596 -1 820 Tax payable, foreign units -9 295 -725 -12 497 Tax payable, joint venture 0 -8 649 0 Tax payable in balance sheet -9 295 -9 982 -14 317 SPECIFICATION OF BASIS FOR DEFERRED TAX/TAX BENEFIT Tax increasing/reducing temporary differences 2002 2001 2000 Fixed assets 26 827 -73 191 -227 309 Current assets -473 070 -343 895 -468 999 Liabilities 7 852 115 28 099 Pension liabilities 723 723 607 Profit and loss account -626 -354 -3 804 Other differences 85 198 78 408 12 855 Unclaimed refund on dividends/credit deduction carryforward 39 219 3 525 3 141 Tax loss carryforward 761 487 340 804 118 896 Total temporary differences 447 609 6 135 -536 515 Deferred tax in balance sheet -26 831 -74 668 -151 233 Deferred tax benefit in balance sheet 135 789 31 945 5 917 Deferred tax in balance sheet, joint venture 0 -17 116 -6 622 Deferred tax benefit, foreign units, not recorded in balance sheet 23 199 28 793 0 Fjord Seafood treats activities in Chile as taxable in Norway pursuant to section 10-60 of Norway's tax law (on taxation of owners of Norwegian- controlled companies in countries with low taxation rates). Fjord Seafood has appealed the decision of Norwegian tax authorities to not accept this treatment for the 2001 tax returns. The loss for the 2001 accounting year is TNOK 289,950, which gives rise to a tax benefit of TNOK 81,186. Because the tax position is disputed by Norwegian taxation authorities, the tax benefit is not included in the above presentation, nor has it been recorded in the balance sheet. NOTE 13 - TAX, CONTINUED Amounts in NOK 1 000 CARRYFORWARD PERIOD FOR TAX LOSS To year Norway Abroad 2003 0 22 096 2004 0 68 612 2005 0 67 667 2006 0 0 2007 1 614 0 2008 6 224 0 2009 8 646 0 2010 6 764 954 2011 230 363 2 051 2012 316 483 0 2016 0 42 137 2017 0 24 376 No date limit 0 49 160 Total 570 094 277 053 HISTORICAL RISK ADJUSTMENT, PER SHARE* Year RISK amount 1 Jan. 1997 0.00443 1 Jan. 1998 0.00000 1 Jan. 1999 -0.11500 1 Jan. 2000 0.10700 1 Jan. 2001 -0.24601 1 Jan. 2002 0.07621 Total RISK -0.17337 * Historical RISK is calculated using current NOK 1 par-value shares. NOTE 14 - SECURED LIABILITIES AND GUARANTEE LIABILITIES Amounts in NOK 1 000 BOOK VALUE OF DEBT SECURED BY MORTGAGES, GUARANTEES, AND PLEDGES 2002 2001 Debt owed to financial institutions 2 301 725 2 476 057 Leasing debt 92 060 100 053 Total debt secured by pledged assets 2 393 785 2 576 110 Debt secured by pledged assets, joint venture 0 321 091 Total debt secured by pledged assets 2 393 785 2 897 201 Of which, book value of leasing debt 92 060 100 053 Of which, book value of leasing debt, joint venture 0 0 Total book value, leasing debt 92 060 100 053 Debt guarantee commitments 210 341 380 348 Debt guarantee commitments, joint venture 0 45 Total debt guarantee commitments 210 341 380 393 BOOK VALUE OF ASSETS PLEDGED AS SECURITY FOR DEBT 2002 2001 Concessions, licenses, etc. 125 393 163 119 Land, buildings, etc. 335 603 287 399 Ships 18 661 28 788 Fixtures and fittings, machines, office equipment, tools, etc. 290 302 429 103 Inventory 729 588 709 542 Receivables 304 390 192 646 Shares 82 990 53 478 Cash 75 456 0 Total assets pledged as security 1 962 383 1 864 075 Total assets pledged as security, joint venture 0 491 221 Total assets pledged as security for debt 1 962 383 2 355 296 As security for Fjord Seafood's agreement with Nordea, the bank has required security in all assets that may be pledged according to Norwegian law for the Group's activities in Norway, Scotland, and North America. These businesses are jointly and severally liable for all Group debt owed to Nordea. In addition, the activities in Chile and Pieters have debt secured through pledges of their own assets. The parent company also has a guarantee commitment of USD 30 million to its bank associated with a loan extended to the subsidiary Fjord Seafood Chile S.A. NOTE 15 - SHORT-TERM INTEREST-BEARING DEBT Amounts in NOK 1 000 UNUSED DRAWING RIGHTS 2002 2001 Unused part of bank overdraft facility, Fjord Seafood Group 231 705 71 997 Unused part of other drawing rights, Fjord Seafood Group 0 9 803 Unused drawing rights, Fjord Seafood Group 231 705 81 800 Unused drawing rights, joint venture 0 49 748 Total unused drawing rights 231 705 131 548 SHORT-TERM INTEREST-BEARING DEBT TO FINANCIAL INSTITUTIONS 2002 2001 Bank overdraft facility, Group 458 809 472 343 Other short-term liabilities, Group 335 524 384 237 Total short-term interest-bearing liabilities, Fjord Seafood Group 794 333 856 580 Total short-term interest-bearing liabilities, joint venture 0 108 988 Total short-term interest-bearing liabilities 794 333 965 568 Parts of the Group participate in a group account system with Nordea. Drawing rights under this facility amounted to NOK 430 million as of 31 December 2002. As part of refinancing of the Group's debt to Nordea presented in Note 12, this drawing facility was replaced by new long-term financing. Overall, NOK 397 million of short-term liabilities had been refinanced long-term as of February 2003. RESTRICTED FUNDS 2002 2001 Tax withholdings 10 571 7 763 Other restricted funds 0 51 809 Total restricted funds 10 571 59 572 Restricted funds, joint venture 0 283 Total restricted funds 10 571 59 855 NOTE 16 - DETAILS CONCERNING FINANCIAL MARKET RISK Amounts in NOK 1 000 FOREIGN CURRENCY RISK 1. Foreign currency risk associated with sales in foreign currencies The bulk of Fjord Seafood's foreign currency risk is associated with sales in foreign currencies by the Group's Norway-based activities that have significant proportions of their operating revenues in foreign currencies (primarily EUR, USD, and JPY), whereas their operating expenses are primarily in NOK. Their foreign currency risk is covered on a current basis by drawing on foreign currency accounts or by using hedging instruments such as forwards, futures, and options. As of 31 December 2002, the Group had a portfolio of outstanding foreign currency hedging instruments associated with the Group's main currencies at a total contract value of NOK 53 million. Outstanding foreign currency hedging instruments as of 31 December 2002 mostly had maturity dates in the first four months of 2003; no contracts had maturities beyond October 2003. As of 31 December 2003, the portfolio had a negative market value of TNOK 950. 2. Foreign currency risk in the balance sheet To reduce the foreign currency risk of acquired companies outside of Norway, parts of these acquisitions are financed through debt in the same currencies. In addition, external financing of individual subsidiaries are made in local currencies. Accordingly, the Group's net interest-bearing liabilities are as follows:
Net interest-bearing liabilities by currency NOK USD EUR GBP CHF JPY DKK Other Total Bank deposits 10 798 35 137 13 690 10 039 5 013 0 2 545 0 77 222 Short-term liabilities 3 119 534 456 203 792 43 948 0 8 794 0 225 794 333 Long-term liabilities 625 197 798 039 243 542 57 920 0 0 0 0 1 724 698 Group's net interest- bearing liabilities 617 518 1 297 357 433 644 91 829 -5 013 8 794 -2 545 225 2 441 809 Of which, leasing liabilities 82 985 2 093 5 612 1 370 0 0 0 0 92 060
INTEREST RATE RISK As of 31 December 2002, the loan portfolio mainly features installments of up to three months. In addition, financial instruments are used, such as interest rate collars and interest rate swaps. Financial management includes continuously assessing whether to hedge larger parts of the loan portfolio.
The Group has entered into Currency Principal The Group The Group Maturity the following interest rate pays receives swap agreements: NOK 100 000 Fixed 6.23% p.a. 3-month NIBOR October 2003 USD 97 763 Fixed 4.59% - 3-month LIBOR May 2004 - 5.30% p.a. October 2006
The Group has entered into Currency Principal Reference Group's Group's Maturity the following collars: rate max. limit lower limit EUR 2 978 3-month 5.50% 4.54% June 2003 EURIBOR As of 31 December 2002, interest rate hedging contracts had a negative market value of NOK 36.4 million.
NOTE 17 - TRANSACTIONS WITH RELATED PARTIES Sales between related parties All sales of products among Group companies, to/from joint venture and associated companies take place at market terms. Capital expansion of the joint venture, Fjord Domstein Holding AS In January 2002, Fjord Domstein Holding AS carried out a NOK 70 million capital expansion. Fjord Seafood's share of the capital increase was NOK 35 million. Demerger of Fjord Domstein Holding AS Fjord Domstein Holding was dissolved through a demerger. Fjord Seafood received all shares in the newly established company, Pieters Holding AS, as remuneration. As part of the demerger, a NOK 333 million demerger debt to Enghav Holding AS (wholly owned by Domstein ASA) was established. Of this total debt, NOK 203 million was paid to Enghav Holding AS. The rest of the debt, which amounted to NOK 130 million, was converted into Fjord Seafood ASA shares. Cooperation with Domstein Under an agreement with its shareholder Domstein ASA, Fjord Seafood leases premises and purchases administrative services from Domstein ASA for Fjord Seafood's activities at Maloy, Norway. The cooperation agreement may be terminated on one year's notice. The agreement was terminated as of 31 December 2002. Fjord Seafood will continue to make use of the agreement during the notice period. Remuneration to Domstein in the notice period is NOK 5 million. NOTE 18 - PENDING CLAIMS The Group has pending two ongoing lawsuits associated with its United States operations. The outcome of either suit is uncertain; no allocations have been made for possible losses in the case where the Group has been sued. Allocations for legal assistance have been made. The first suit is a civil lawsuit brought by an environmental organization pursuant to the Clean Water Act. The plaintiff claims that fish farming and related activities are illegal, and that the company has operated without the required permits. Among the plaintiff's most important demands are compensation for each day of violations since April 1995 and prohibition against continued unlawful operations. The plaintiff has support in that not all local permits have been in order, although all applications had been submitted within the required deadlines. Hearings on possible punitive actions have been held, but no decision has been issued. A decision is expected by summer 2003. The second suit is associated with the Endangered Species Act; Fjord Seafood, several other private parties, and the state of Maine are plaintiffs. The basis for the lawsuit is that wild Atlantic salmon in the Gulf of Maine has been classified as an endangered species by two national organizations in the United States. Consequently, farmed salmon may be regarded as a threat to wild Atlantic salmon in the region. The parties filing the lawsuit claim that Atlantic salmon is not a species indigenous to the region, and therefore does not qualify for protection under ESA rules and regulations. The plaintiffs also claim that the legislative process for the Endangered Species Act conflicts with several ESA provisions and regulations as to administrative procedures, as well as US constitutional requirements concerning public notice regarding the act and regulatory decisions pursuant to it. A complaint was lodged with US authorities against the Group's activities in Chile, alleging that fish exports to the United States were made at below- cost "dumping" prices. US authorities have completed a verification period featuring three reviews and found no basis for levying punitive customs duties on the Group's exports to the USA. The authorities in the United States were expected to complete their investigations after these three revisions. However, it has been announced that a fourth review will be conducted. Fjord Seafood Chile disputes the foundation for such a fourth round of reviews and has brought the case before the US Court of International Trade. In planning the merger between Fjord Seafood and the aquaculture activities of Cermaq, facilitators were used. The merger was not entered into, and a dispute has arisen as to the settlement payable to facilitators. Fjord Seafood has presented an offer which is under evaluation; agreement is expected to be arrived at shortly. Fjord Seafood has made accounting allocations for the settlement the company is willing to pay. NOTE 19 - EARNINGS PER SHARE Amounts in NOK 1 000 EARNINGS PER SHARE (EPS) IN NOK 2002 2001 2000 Profit for the year after tax 1) -190 342 -0.63 -742 563 -7.04 85 012 1.49 Time-weighted average of shares issued and outstanding 2) 304 076 105 438 56 961 1) After-tax profit for the year is defined for EPS calculations as follows: 2002 2001 Profit for the year (after tax) -190 342 -742 563 - - dividend and other payments for preferred shares 0 0 + allocations to equity 0 0 Profit for the year used in calculating EPS -190 342 -742 563 2) Determination of average number of shares issued: 2002 No. of shares outstanding as of 1 January 201 045 527 Share issue, 5 July 2002 85 759 258 Share issue, 8 August 2002 6 084 706 Payment in shares to Enghav Holding 11 180 556 Preemptive rights issue, 7 October 2002 6 304 Average number of shares outstanding* 304 076 351 Number of shares as of 31 December 2002* 427 403 751 * Own shares are included in the figure for number of shares as of 31 Dec. 2002, but not in calculations of average number of shares. Members of the Group management team are entitled to subscribe to shares in the company. Nevertheless, a diluted per-share profit has not been calculated, because exercising these options would improve earnings per share. EX-99.1 3 ex99-1.txt CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the filing of the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 (the Report) by Seaboard Corporation (the Company), the undersigned, as the Chief Executive Officer of the Company, hereby certifies pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 provided, however, the financial statements of Fjord Seafood ASA were audited in accordance with auditing standards and practices generally accepted in Norway which differ from auditing standards generally accepted in the United States of America; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/H. H. Bresky H. H. Bresky, Chairman of the Board, President and Chief Executive Officer EX-99.2 4 ex99-2.txt CERTIFICATION OF THE CHIEF FINANCIAL OFFICER Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the filing of the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 (the Report) by Seaboard Corporation (the Company), the undersigned, as the Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 provided, however, the financial statements of Fjord Seafood ASA were audited in accordance with auditing standards and practices generally accepted in Norway which differ from auditing standards generally accepted in the United States of America; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/Robert L. Steer Robert L. Steer, Senior Vice President, Treasurer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----