Stockholders' Equity and Accumulated Other Comprehensive Loss

6 Months Ended

Jul. 02, 2011

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 8 — Stockholders’ Equity and Accumulated Other Comprehensive Loss

Components of total comprehensive income, net of related taxes, are summarized as follows:

	Three Months Ended						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
(Thousands of dollars)	2011			2010			2011			2010
Net earnings	$	113,364		$	77,357		$	230,057		$	140,020
Other comprehensive income net of applicable taxes:
Foreign currency translation adjustment	(998		)	(1,649		)	(1,591		)	(3,041		)
Unrealized gain on investments	704			398			803			(702		)
Unrecognized pension cost	730			772			1,071			1,485
Total comprehensive income	$	113,800		$	76,878		$	230,340		$	137,762

The components of and changes in accumulated other comprehensive loss for the six months ended July 2, 2011 are as follows:

	Balance						Balance
	December 31,			Period			July 2,
(Thousands of dollars)	2010			Change			2011
Cumulative foreign currency translation adjustment	$	(81,280	)	$	(1,591	)	$	(82,871	)
Unrealized gain on investments	445			803			1,248
Unrecognized pension cost	(43,072		)	1,071			(42,001		)
Accumulated other comprehensive loss	$	(123,907	)	$	283		$	(123,624	)

The foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar segment.  At July 2, 2011, the Sugar segment had $199,743,000 in net assets denominated in Argentine pesos and $37,670,000 in net liabilities denominated in U.S. dollars.

With the exception of the foreign currency translation adjustment to which a 35 percent federal tax rate is applied, income taxes for components of accumulated other comprehensive loss were recorded using a 39 percent effective tax rate.  In addition, the unrecognized pension cost includes $12,685,000 related to employees at certain subsidiaries for which no tax benefit has been recorded.

On November 6, 2009, the Board of Directors authorized Seaboard to repurchase from time to time prior to October 31, 2011 up to $100,000,000 market value of its Common Stock in open market or privately negotiated purchases which may be above or below the traded market price.  Such purchases may be made by Seaboard or Seaboard may from time to time enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard.  Any such stock repurchase will be funded by cash on hand.  Any shares repurchased will be retired and shall resume the status of authorized and unissued shares.  Any stock repurchases will be made in compliance with applicable legal requirements and the timing of the repurchases and the number of shares to be repurchased at any given time may depend on market conditions, Securities and Exchange Commission regulations and other factors. The Board’s stock repurchase authorization does not obligate Seaboard to acquire a specific amount of common stock and the stock repurchase program may be suspended at any time at Seaboard’s discretion.  For the six months ended July 2, 2011, Seaboard did not repurchase any shares of common stock.  As of July 2, 2011, $70,006,000 remained available for the repurchase of shares under this program.  Also, Seaboard currently does not intend to declare any dividends during 2011 or 2012 as there was a prepayment of the annual 2011 and 2012 dividends in December 2010.