Stockholders' Equity and Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 29, 2019

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 8 – Stockholders’ Equity and Accumulated Other Comprehensive Loss

In October 2017, the Board of Directors extended through October 31, 2019 the share repurchase program. Under this share repurchase program, Seaboard is authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. All stock repurchased will be made in compliance with applicable legal requirements and funded by cash on hand. The timing of the repurchases and the number of shares repurchased will depend upon market conditions, compliance with Securities and Exchange Commission regulations and other factors. The Board of Directors’ 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. As of June 29, 2019, $81 million remained available for repurchase under this program. Seaboard repurchased 3,810 shares of common stock at a total price of $14 million during the six months ended June 29, 2019.

The changes in the components of other comprehensive income (loss), net of related taxes, are as follows:

	Three Months Ended				Six Months Ended
	June 29,		June 30,		June 29,		June 30,
(Millions of dollars)	2019		2018		2019		2018
Foreign currency translation adjustment	$	(9)	$	(17)	$	(11)	$	(27)
Unrecognized pension cost (1)		3		(3)		6		(2)
Other comprehensive loss, net of tax	$	(6)	$	(20)	$	(5)	$	(29)

(1)

This primarily represents the amortization of actuarial losses that were included in net periodic benefit cost. Amounts for the three and six months ended June 30, 2018 included other actuarial adjustments.

The components of accumulated other comprehensive loss, net of related taxes, are as follows:

	June 29,		December 31,
(Millions of dollars)	2019		2018
Cumulative foreign currency translation adjustment	$	(360)	$	(349)
Unrecognized pension cost		(55)		(61)
Total accumulated other comprehensive loss	$	(415)	$	(410)

The cumulative foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar and Alcohol segment. However, effective in the third quarter of 2018, the Sugar and Alcohol segment’s functional currency changed from the Argentine peso to the U.S. dollar due to highly inflationary accounting. For the six months ended June 29, 2019, less than $1 million of income taxes for foreign currency translation was recorded because substantially all of the cumulative foreign currency translation adjustment related to foreign subsidiaries for which no tax benefit was recorded.

As of June 29, 2019 and June 30, 2018, income taxes for the cumulative unrecognized pension cost were recorded using an effective tax rate of 26% except for unrecognized pension cost of $20 million and $22 million, respectively, related to employees at certain subsidiaries for which no tax benefit was recorded.