Stockholders' Equity and Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2019

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 12 - Stockholders’ Equity and Accumulated Other Comprehensive Loss

In October 2019, the Board of Directors extended through October 31, 2020 Seaboard’s 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, from time to time, 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 at any given time will depend upon market conditions, compliance with SEC 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 December 31, 2019, $78 million remained available for repurchases under this program. Seaboard repurchased 4,369 and 1,333 shares of common stock during 2019 and 2018 at a total price of $17 million and $5 million, respectively. Shares repurchased were retired and became authorized and unissued shares. Seaboard did not repurchase any shares of common stock during 2017.

In each of the four quarters of 2019, Seaboard declared and paid a quarterly dividend of $2.25 per share on the common stock. In each of the four quarters of 2018 and 2017, Seaboard declared and paid a quarterly dividend of $1.50 per share on the common stock.

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

	Cumulative
	Foreign		Unrealized
	Currency		Gain			Unrecognized
	Translation		on			Pension
(Millions of dollars)	Adjustment		Investments			Cost			Total
Balance December 31, 2017	$	(297)	$	7		$	(64)		$	(354)
Other comprehensive loss before reclassifications		(52)		—			(1)			(53)
Amounts reclassified from accumulated other comprehensive loss to net loss		—		—			4	(a)		4
Other comprehensive income (loss), net of tax		(52)		—			3			(49)
Amounts reclassified from accumulated other comprehensive loss to retained earnings		—		(7)	(b)		—			(7)
Balance December 31, 2018	$	(349)	$	—		$	(61)		$	(410)
Other comprehensive loss before reclassifications		(20)		—			(14)			(34)
Amounts reclassified from accumulated other comprehensive loss to net earnings		—		—			4	(a)		4
Other comprehensive loss, net of tax		(20)		—			(10)			(30)
Balance December 31, 2019	$	(369)	$	—		$	(71)		$	(440)

^(a)This primarily represents the amortization of actuarial losses that was included in net periodic pension cost and recorded in operating income. See Note 10 for further discussion.

^(b)Effective January 1, 2018, upon adoption of new guidance, all unrealized gains (losses) on investments were included in the consolidated statement of comprehensive income. The AOCI balance as of December 31, 2017, was reclassified to retained earnings on January 1, 2018.

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. 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. See Note 1 for discussion of the functional currency change. During 2019, the foreign currency translation adjustment primarily related to CT&M entities with a functional currency of the West African franc.

Income taxes for the unrecognized pension cost component of accumulated other comprehensive loss was recorded using a 26%effective tax rate in the fourth quarter of 2017 and all of 2018 and 2019 and a 39% effective tax rate for other periods of 2017, except for unrecognized pension cost of $21 million, $23 million and $22 million in 2019, 2018 and 2017, respectively, related to employees at certain subsidiaries for which no tax benefit was recorded.