10-K405 1 SEABOARD CORP. 1994 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1994 OR __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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 incorporation or organization) Identification No.) 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 Exchange $1.00 Par Value 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 (continued) FORM 10-K SEABOARD CORPORATION State the aggregate market value of the voting stock held by non- affiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. $63,173,670 (March 15, 1995). On such date, 332,493 shares were held by non-affiliates, and the stock was sold at $190 per share. (APPLICABLE ONLY TO CORPORATE REGISTRANTS) Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: 1,487,519.75 shares of Common Stock as of March 24, 1995. 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 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 1995 annual meeting of stockholders (the "1995 Proxy Statement"). 2 FORM 10-K SEABOARD CORPORATION PART I Item 1. Business (a) General Development of Business Seaboard Corporation, a Delaware corporation, the successor corporation to a company first incorporated in 1928, and subsidiaries ("Registrant"), is a diversified international agribusiness and transportation company engaged domestically in poultry and pork production and processing, commodity merchandising, baking, flour milling, shipping and produce storage and distribution. Overseas, Registrant engages in fruit, vegetable and shrimp production and processing, flour milling, animal feed production, polypropylene bag manufacturing and electric power production. (b) Financial Information about Industry Segments The information required by Item 1 relating to Industry Segments is hereby incorporated by reference to note 13 of Registrant's Consolidated Financial Statements appearing on pages 44, 45, 46 and 47 of the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. (c) Narrative Description of Business (1) Business Done and Intended to be Done by the Registrant (i) Principal Products and Services Registrant produces and processes poultry in the United States and sells processed chicken and chicken parts, both directly and through commercial distributors, to retail, foodservice and institutional markets, primarily in the eastern half of the United States. Registrant produces and further processes pork. Hog farrowing facilities in Colorado and Oklahoma produce breeding stock and marketable feeder pigs. The feeder pigs are raised to market hogs at Company owned or managed farms for subsequent sale or processing. Pork products are marketed to retail and foodservice customers, primarily in the north-central United States. 3 FORM 10-K SEABOARD CORPORATION Registrant is engaged in Puerto Rico in the milling of flour and the production and distribution of a full line of baked goods. These goods are distributed directly within Puerto Rico and neighboring islands to foodservice and retail outlets. Registrant operates an ocean liner service for containerized cargo between Florida and ports in Central and South America and the Caribbean Basin. Registrant also operates bulk carriers in the Atlantic Basin. Registrant trades commodities, primarily bulk grains and oil seeds, in the Atlantic Basin. Registrant produces and processes fruits, vegetables and shrimp in several countries located in the Caribbean Basin and South America, primarily for export to the U.S. The Registrant transports the majority of these products using its shipping line, and distributes them from its facility in Miami, Florida. Registrant also produces polypropylene bags, operates a power barge, operates flour and animal feed mills, and produces pen- raised salmon. The information required by Item 1 with respect to the amount or percentage of total revenue contributed by any class of similar products or services which account for 10% or more of consolidated revenue in any of the last three fiscal years is hereby incorporated by reference to note 13 of Registrant's Consolidated Financial Statements appearing on pages 44, 45, 46 and 47 of the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to rule 14a-3(b) and attached as Exhibit 13 to this report. (ii) Status of Product or Segment Registrant continues to expand its food production and processing segment by further investing in poultry, hog farrowing and finishing and pork processing facilities. The Registrant is currently constructing integrated hog production and processing facilities in Oklahoma, Texas, Kansas and Colorado. These facilities will include hog farrowing, nursing and finishing buildings, feedmills and a processing plant which will produce fresh and processed pork to be marketed primarily in the Southwest United States and for export. Registrant discontinued fresh pork operations at its plant in Albert Lea, Minnesota as of March 25, 1994. The ongoing operations of the plant consist of producing processed meats. 4 FORM 10-K SEABOARD CORPORATION (iii) Sources and Availability of Raw Materials None of Registrant's businesses utilize material amounts of raw materials that are dependent on purchases from one supplier or a small group of dominant suppliers. (iv) Patents, Trademarks, Licenses, Franchises and Concessions Registrant uses two trademarks; Gold-n-Fresh(R) and Farmstead(R) Fresh for retail sales of poultry products. Registrant uses five trademarks; Farmstead(R), Lakeview(R), Laurel(R), Farmstead(R) Preferred and Oh So Tender(R) in its retail sales of pork. Registrant uses two trademarks, Season Sweet(R), and Chestnut Hill Farms(R) in marketing fresh fruits and vegetables in the United States. Registrant's Puerto Rican Baking business uses three trademarks registered to a third party; Holsum(R), Country Hearth(R) and Olympic Kids(R); under a licensing agreement. Patents, trademarks, franchises, licenses and concessions are not material to any of Registrant's other businesses. (v) Seasonal Business Profitability of the poultry operations is generally higher in the summer months. Produce operations are seasonal, depending on the crop being grown. Generally, crops which are exported to the United States are only in production from November through May. The Registrant's other businesses are not seasonally dependent. (vi) Practices Relating to Working Capital Items There are no unusual industry practices or practices of Registrant relating to working capital items. 5 FORM 10-K SEABOARD CORPORATION (vii) Depending on a Single Customer or Few Customers Registrant does not have sales to any one customer equal to 10% or more of Registrant's consolidated revenues, nor sales to a few customers which, if lost, would have a material adverse effect on any such segment or on Registrant taken as a whole. (viii) Backlog Backlog is not material to Registrant's businesses. (ix) Government Contracts No material portion of Registrant's business involved government contracts. (x) Competitive Conditions Competition in Registrant's food production and processing segment comes from a variety of national and regional producers and is based primarily on product performance, customer service and price. In the January 1995 issue of Broiler Industry, an industry trade publication, the Registrant was ranked as the eighth largest poultry processor in the United States based on average weekly production of ready-to-cook chicken. In the October 1994 issue of Successful Farming, an industry trade publication, the Registrant was ranked as the twelfth largest pork producer in the United States based on sows in production. Registrant's Puerto Rican baking business is the largest bakery in Puerto Rico. Competition, based on price and product performance, comes primarily from imported baked goods in the cookie and donut lines, and from one Puerto Rican sliced bread baker. Registrant's ocean liner service for containerized cargoes faces competition based on price and customer service. Registrant believes it is among the top five ranking ocean liner services for containerized cargoes in the Caribbean Basin. 6 FORM 10-K SEABOARD CORPORATION (xi) Research and Development Activities Registrant does not engage in material research and development activities. (xii) Environmental Compliance Registrant believes that it is in substantial compliance with applicable Federal, state and local provisions relating to environmental protection, and no significant capital expenditures are contemplated in this area. (xiii) Number of Persons Employed by Registrant As of December 31, 1994, Registrant had 10,256 employees, of whom 7,014 were employed in the United States (including Puerto Rico). (d) Financial Information about Foreign and Domestic Operations and Export Sales The financial information required by Item 1 relating to Foreign and Domestic Operation is hereby incorporated by reference to note 13 of Registrant's Consolidated Financial Statements appearing on pages 44, 45, 46 and 47 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this report. Export sales, including sales to nonconsolidated foreign subsidiaries, represent less than 10% of Registrant's consolidated revenue. Registrant did not have a material amount of sales or transfers between geographic areas for the periods reported on herein. Registrant considers its relations with the governments of the countries in which its foreign subsidiaries are located to be satisfactory, but these foreign operations are subject to the normal risks of doing business abroad, including expropriation, confiscation, currency inconvertibility and devaluation, and currency exchange controls. To minimize these risks, Registrant has insured certain investments in and loans to the flour mill and shrimp farm in Ecuador and the flour mill in Zaire to the extent deemed appropriate against certain of these risks with the Overseas Private Investment Corporation, an agency of the United States Government. The Registrant elected to discontinue political risk insurance on the power barge in the Dominican Republic during 1994. 7 FORM 10-K SEABOARD CORPORATION Item 2. Properties The Registrant currently has production and distribution facilities in the following states: Alabama, Colorado, Florida, Georgia, Kansas, Kentucky, Maine, Minnesota, Oklahoma, New Jersey, North Carolina and Texas. Additionally, the Registrant has wholly or partially owned facilities in Chile, Columbia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Guyana, Honduras, Nigeria, Panama, Peru, Puerto Rico, Sierra Leone, Venezuela and Zaire. (1) Food Production and Processing The principal poultry operations of the Registrant consists of five processing plants. These plants are devoted to various phases of slaughtering, dressing, cutting, packing, deboning or further-processing chickens. The total slaughter capacity is approximately 212 million head per year. To support these facilities, the Registrant operates four feed mills, four hatcheries and a network of 725 contract growers that supply pullet, breeder and broiler farms. These facilities are located in Alabama, Georgia, Kentucky and Tennessee. The Registrant's pork operations consist of a plant dedicated to further processing fresh pork into smoked and cooked hams, bacon and other prepared foods. This plant has an annual capacity of approximately 45 million pounds. Currently, a processing plant with a double shift capacity of four million hogs per year is under construction. Single shift operations are expected to begin in the Fall of 1995. Hog production facilities currently consist of a combination of owned and leased farrowing, nursery and finishing units to support 30,200 sows. These facilities are located in Colorado and Oklahoma. The Registrant owns in whole or in part six flour mills with capacity to produce 46,700 cwts of bakery flour and mill feed per day. In addition, Registrant has feed mill capacity of 35 tons per hour to produce formula animal feed. These mills, located in Puerto Rico, Guyana, Ecuador, Sierra Leone, Nigeria and Zaire are owned in fee except for a flour mill in Sierra Leone which is on land which the Government of Sierra Leone has agreed to lease for a remaining term of 19 years, and a Nigerian flour and feed mill with a remaining lease term of 80 years and renewal option of 75 years. The Registrant owns two bakeries in Puerto Rico. The Registrant operates approximately 4,000 acres of shrimp ponds in Honduras and Ecuador. Approximately 2,400 acres are leased for a twenty year term and the rest are owned. (2) Transportation The Registrant owns six 9,000 metric-ton deadweight dry bulk carriers and six containerized ocean cargo vessels with deadweights ranging from 949 to 12,648 metric-tons. In addition, Registrant timecharters, under short-term agreements, twelve additional containerized ocean cargo vessels with deadweights ranging from 2,152 to 12,290 metric-tons. (3) Other Registrant owns a floating power generating facility, capable of producing 40 megawatts of power, located in the Port of Rio Haino in Santo Domingo, Dominican Republic. Management believes that the Registrant's present facilities are generally adequate and suitable for its current purposes. In general, facilities are fully utilized; however, seasonal fluctuations in inventories and production may occur as a reaction to market demands for certain products. Certain foreign flour mills may operate at less than full capacity due to unavailability of foreign exchange to pay for imported raw materials. 8 FORM 10-K SEABOARD CORPORATION Item 3. Legal Proceedings In April 1990, a derivative action was commenced in Delaware Chancery Court by a minority stockholder of the Company against the Company, Seaboard Flour Corporation, and the three then Directors of the Company, including Mr. H. Bresky, alleging breaches of fiduciary duty by the Directors of the Company in connection with three transactions with Seaboard Flour Corporation, and seeking monetary damages and other relief. This action was settled and dismissed during fiscal year 1994. Under the settlement, the Company received $10,800,000 from Seaboard Flour Corporation and the Directors of which $2,026,000 was paid to the plaintiff's counsel. The Company is subject to other legal proceedings related to the normal conduct of its business. In the opinion of management, none of these actions are expected to result in a final judgement having a materially adverse effect on the consolidated financial statements of the Company. Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted during the last quarter of the fiscal year covered by this report to a vote of security holders. Executive Officers of Registrant The following table lists the executive officers and certain significant employees of Registrant. Generally, each executive officer is elected at the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders and holds his office until the next such annual meeting or until his successor is duly chosen and qualified. There are no arrangements or understandings pursuant to which any executive officer was elected. Name (Age) Positions and Offices with Registrant and Affiliates H. Harry Bresky (69) President of Registrant; President and Treasurer of Seaboard Flour Corporation (SFC) Joe E. Rodrigues (58) Executive Vice President, Treasurer and Chief Financial Officer of Registrant Jack S. Miller (66) Vice President - Operations/Administration of Registrant Rick J. Hoffman (40) Vice President of Registrant Steven J. Bresky (41) Vice President of Registrant Jesse H. Bechtold (37) Controller and Assistant Treasurer Mr. H. Harry Bresky has served as President of Registrant since 1967 and as President of SFC since 1987, and as Treasurer of SFC since 1973. Mr. Bresky is the father of Steven J. Bresky. 9 FORM 10-K SEABOARD CORPORATION Mr. Rodrigues has served as Executive Vice President and Treasurer of Registrant since December 1986 and Chief Financial Officer since March 1987. Mr. Miller has served as a Vice President of Registrant since 1971. Mr. Hoffman has served as Vice President of Registrant since April 1989. Mr. Steven J. Bresky has served as Vice President of Registrant since April 1989. Mr. Bechtold became Controller of the Registrant in March of 1992. He has been employed with the Registrant since 1990 and prior to that was employed by KPMG Peat Marwick LLP. 10 FORM 10-K SEABOARD CORPORATION PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The information required by Item 5 is hereby incorporated by reference to "Stockholder Information" and "Quarterly Financial Data" appearing on pages 48 and 25, respectively, of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 6. Selected Financial Data The information required by Item 6 is hereby incorporated by reference to the "Summary of Selected Financial Data" appearing on page 1 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 of this Report. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information required by Item 7 is hereby incorporated by reference to "Management's Discussion and Analysis of Financial Condition and Results of Operation" appearing on pages 20 through 24 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 8. Financial Statements and Supplementary Data The information required by Item 8 is hereby incorporated by reference to Registrant's "Quarterly Financial Data," "Consolidated Statements of Earnings," "Consolidated Statements of Stockholders' Equity," " Consolidated Balance Sheets," "Consolidated Statements of Cash Flows" and "Notes to Consolidated Financial Statements" appearing on pages 28 through 47 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 11 FORM 10-K SEABOARD CORPORATION PART III Item 10. Directors and Executive Officers of Registrant Refer to "Executive Officers of Registrant" in Part 1. Information required by this item relating to directors of Registrant has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 1994, the close of its fiscal year. The information required by this item relating to directors is incorporated by reference to "Item 1" appearing on pages 3 and 4 of the 1995 Proxy Statement. The information required by this item relating to late filings of reports required under Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to the first paragraph on page 3 of the Registrant's 1995 Proxy Statement. Item 11. Executive Compensation This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 1994, the close of its fiscal year. The information required by this item is incorporated by reference to "Executive Compensation and Other Information" and "Retirement Plans" appearing on pages 5, 6 and 7 of the 1995 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 1994, the close of its fiscal year. The information required by this item is incorporated by reference to "Principal Stockholders" appearing on page 2 and "Election of Directors" on pages 3 and 4 of the 1995 Proxy Statement. Item 13. Certain Relationships and Related Transactions This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 1994, the close of its fiscal year. The information required by this item is incorporated by reference to "Compensation Committee Interlocks and Insider Participation" and "Interests of Management and Others in Certain Transactions" appearing on page 9 of the 1995 Proxy Statement. 12 FORM 10-K SEABOARD CORPORATION PART IV Item 14. 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-2. 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, 1992. 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 Registrants'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. *10.1 Registrant's Executive Retirement Plan dated October 18, 1994. Incorporated by reference to Exhibit 10.1 of Registrant's Form 10-Q for the quarter ended September 10, 1994. *10.2 Registrant's Summary of Benefits for Excess 401(k) Contributions (Supplemental Executive Retirement Plan). Incorporated by reference to Exhibit 10.2 of Registrant's Form 10-Q for the quarter ended September 10, 1994. *10.3 Registrant's Supplemental Executive Retirement Plan for H. Harry Bresky dated March 21, 1995. *10.4 Registrant's Supplemental Executive Retirement Plan for Jack S. Miller dated March 21, 1995. *10.5 Employment Agreement for Joe E. Rodrigues dated July 9, 1986 and amended August 10, 1990. 13 - Sections of Annual Report to security holders incorporated by reference herein. 21 - List of subsidiaries. 27 - Financial Data Schedule (included in electronic copy only). 13 FORM 10-K SEABOARD CORPORATION * Management contract or compensatory plan or arrangement. (b) Reports on Form 8-K On November 9, 1994 the Registrant filed a report on Form 8-K disclosing the settlement of a stockholders' derivative action. This settlement is further described in Item 3. Legal Proceedings on page 9 of this filing. (c) Exhibits Exhibits begin on page 16. 14 Form 10-K SEABOARD 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/H. Harry Bresky By /s/J. E. Rodrigues H. Harry Bresky, J. E. Rodigues, President Executive Vice President, (principal executive and Treasurer (principal officer) financial officer) Date: March 30, 1995 Date: March 30, 1995 By /s/Jesse H. Bechtold Jesse H. Bechtold Controller (principal accounting officer) Date: March 30, 1995 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated. /s/H. Harry Bresky /s/J. E. Rodrigues H. Harry Bresky, Director J. E. Rodrigues, Director Date: March 30, 1995 Date: March 30, 1995 /s/David A. Adamsen /s/Thomas J. Shields David A. Adamsen, Director Thomas J. Shields, Director Date: March 30, 1995 Date: March 30, 1995 15 SEABOARD CORPORATION AND SUBSIDIARIES Consolidated Financial Statements and Schedules (Form 10-K) Securities and Exchange Commission For the year ended December 31, 1994 (With Independent Auditors' Report Thereon) SEABOARD CORPORATION AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedules Financial Statements Stockholders' Annual Report Page Independent Auditors' Report 27 Consolidated Balance Sheets as of December 31, 1994 and December 31, 1993 30 Consolidated Statements of Earnings for the years ended December 31, 1994, December 31, 1993 and December 31, 1992 28 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1994, December 31, 1993 and December 31, 1992 29 Consolidated Statements of Cash Flows for the years ended December 31, 1994, December 31, 1993 and December 31, 1992 32 Notes to Consolidated Financial Statements 33 The foregoing are incorporated by reference. The individual financial statements of the minority-owned nonconsolidated foreign subsidiaries which would be required if each such foreign subsidiary were a Registrant are omitted, because (a) the Registrant's and its other subsidiaries' investments in and advances to such foreign subsidiaries do not exceed 20% of the total assets as shown by the most recent consolidated balance sheet; (b) the Registrant's and its other subsidiaries' proportionate share of the total assets (after intercompany eliminations) of such foreign subsidiaries do not exceed 20% of the total assets as shown by the most recent consolidated balance sheet; or (c) the Registrant's and its other subsidiaries' equity in the earnings before income taxes and extraordinary items of the foreign subsidiaries does not exceed 20% of such income of the Registrant and consolidated subsidiaries for the most recent fiscal year. Combined condensed financial information as to assets, liabilities and results of operations have been presented for minority-owned nonconsolidated foreign subsidiaries in note 6 of "Notes to the Consolidated Financial Statements." F-1 SEABOARD CORPORATION AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedules Schedules Page II - Valuation and Qualifying Accounts for the years ended December 31, 1994, 1993 and 1992 F-4 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. F-2 INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Seaboard Corporation: Under date of March 3, 1995, we reported on the consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 1994 and 1993 and the related consolidated statements of earnings, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1994, as contained in the December 31, 1994 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, 1994. In connection with our audits of the aforementioned consolidated financial statements, we also audited the financial statement schedule 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. As discussed in note 1 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", in 1994 and Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," in 1993. KPMG Peat Marwick LLP March 3 , 1995 F-3 Schedule II SEABOARD CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts (In Thousands) Balance at Provision Write-offs net Balance at beginning of year (1) of recoveries end of year Year ended December 31, 1994: Allowance for doubtful accounts $6,556 2,910 270 9,196 Year ended December 31, 1993: Allowance for doubtful accounts $5,653 2,600 1,697 6,556 Year ended December 31, 1992: Allowance for doubtful accounts $4,227 3,763 2,337 5,653 (1) Charged to selling, general and administrative expenses. F-4 EX-10.3 2 SERP - H.HARRY BRESKY EXHIBIT 10.3 H. HARRY BRESKY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN UNDER THE SEABOARD CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ARTICLE I ESTABLISHMENT AND PURPOSE OF PLAN Section 1.01. Plan Establishment. Seaboard Corporation, a Delaware corporation (the "Company"), hereby establishes the H. Harry Bresky Supplemental Executive Retirement Plan (the "Plan"), effective January 1, 1995, pursuant to the Company's Supplemental Executive Retirement Plan. Section 1.02. Purpose. The Plan is intended to constitute an unfunded pension plan of a highly compensated, select management employee for the purpose of providing supplemental retirement benefits to H. Harry Bresky (the "Executive"). ARTICLE II BENEFITS Section 2.01. Retirement Benefits. Beginning with the first day of the month following the Executive's retirement from the Company after attaining age 65, he will be entitled to a benefit of a ten-year certain and continuous life annuity in the amount of $34,174 per month. In the event of the Executive's death during the ten-year certain period, the balance of the payments for such period shall be paid to his beneficiary designated in writing and filed with the Company's Vice President-Finance and, in default thereof, to his estate. If the Executive shall die either while employed by the Company or after his retirement but before the commencement of benefits hereunder, monthly payments in the amount of $34,174 shall be made to the Executive's beneficiary as designated pursuant to the preceding sentence or his estate, as the case may be, for a period of ten years beginning with the first day of the month following the Executive's death. In the event of the Executive's termination of employment other than by reason of his retirement or death, no benefits will be payable hereunder. ARTICLE III ADMINISTRATION, FUNDING AND MISCELLANEOUS Section 3.01. Administration. (a) The Plan will be administered by the Board of Directors of the Company (the "Board") which shall have the sole discretion to interpret the Plan and determine eligibility for benefits hereunder. All decisions of the Board shall be final, conclusive, and binding upon all persons having any interest in the Plan. (b) In the administration of the Plan, the Board may, from time to time, (i) delegate its duties to any individual or committee, (ii) employ agents and delegate to them such duties as it sees fit, and (iii) consult with legal counsel, who may be legal counsel to the Company. Section 3.02. Funding. The Plan shall be unfunded, and all benefit payments provided hereunder shall be paid from the general assets of the Company. The Executive and any of his beneficiaries will be considered to be general unsecured creditors of the Company with respect to benefits under the Plan. The Company may cause the payments to the Executive or his beneficiaries to be made from the assets of an irrevocable grantor trust maintained by the Company and may purchase an insurance policy or policies insuring the life of the Executive or an annuity policy or policies to enable the Company to pay the costs of providing the benefits hereunder. Neither the Executive nor his beneficiaries shall have any rights whatsoever to the assets of the trust or any insurance or annuity policies. The insurance or annuity policies may be owned by the trust, in lieu of the Company, in which case the trust shall be the sole owner and beneficiary of the policy or policies and shall possess and may exercise all incidents of ownership in such policy or policies, except as otherwise provided in the trust. Section 3.03. Claims Procedure. The Executive and any beneficiary of his may apply to the Board for consideration of any claim for benefit under the Plan. If a claim is denied in whole or in part, the Executive or his beneficiary will receive written notification. The notification will include the specific reasons for the denial, with specific reference to the pertinent provisions of the Plan on which the denial was based, a description of any additional material or information needed to perfect the claim and why such material or information is necessary, and an explanation of the claims review procedure. If the Board fails to respond to the claim within ninety (90) days, the claim is treated as denied. Within sixty (60) days after denial, the Executive or his beneficiary may submit a written request for reconsideration of the claim to the Board. Any such request should be accompanied by documents or records in support of the claim. The Executive or his beneficiary may review pertinent documents and submit issues and comments in writing. The Board will review the claim and provide, within sixty (60) days, a written response to the claimant. (This period may be extended an additional sixty (60) days under certain circumstances.) In its response, the Board will give specific reasons for its decision, written in a manner calculated to be understood by the claimant, with specific reference to the pertinent provisions of the Plan on which the decision is based. Section 3.04. Non-Alienation of Participant's Benefits. Except as required by law, no amount payable under this Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether presently or hereafter payable, shall be void. Section 3.05. Employment. Participation in the Plan does not give the Executive any right to be retained in the employ of the Company, and no rights granted under the Plan shall be construed as creating a contract of employment. The right and power of the Company to dismiss or discharge the Executive is expressly reserved. Section 3.06. No Trust Relationship. Nothing contained herein and no actions taken pursuant to the Plan shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company and the Executive. The Company shall not be considered a trustee by reason of the Plan. Section 3.07. Amendment, Modification and Termination. No amendment, modification or termination of the Plan shall be made without the prior written approval of the Executive, other than as may be required by governing law. Section 3.08. Benefits and Burdens. The Plan shall be binding upon and inure to the benefit of the Executive and his beneficiaries and the Company and its successors and assigns. Section 3.09. Governing Law. The provisions of the Plan shall be governed, construed, enforced and administered in accordance with the laws of Kansas and, to the extent applicable, by the Employee Retirement Income Security Act of 1974, as amended, and other applicable federal law. Section 3.10. Headings. The headings have been inserted for convenience only and shall not affect the meaning or interpretation of the Plan. IN WITNESS WHEREOF, the Company has caused the Plan to be executed this ___ day of March, 1995, by its duly authorized officer. SEABOARD CORPORATION By: ___________________________ J. E. Rodrigues Executive Vice President EX-10.4 3 SERP - JACK S. MILLER EXHIBIT 10.4 JACK S. MILLER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN UNDER THE SEABOARD CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ARTICLE I ESTABLISHMENT AND PURPOSE OF PLAN Section 1.01. Plan Establishment. Seaboard Corporation, a Delaware corporation (the "Company"), hereby establishes the Jack S. Miller Supplemental Executive Retirement Plan (the "Plan"), effective January 1, 1995, pursuant to the Company's Supplemental Executive Retirement Plan. Section 1.02. Purpose. The Plan is intended to constitute an unfunded pension plan of a highly compensated, select management employee for the purpose of providing supplemental retirement benefits to Jack S. Miller (the "Executive"). ARTICLE II BENEFITS Section 2.01. Retirement Benefits. Beginning with the first day of the month following the Executive's retirement from the Company after attaining age 65, he will be entitled to a benefit of a ten-year certain and continuous life annuity in the amount of $8,333 per month. In the event of the Executive's death during the ten-year certain period, the balance of the payments for such period shall be paid to his beneficiary designated in writing and filed with the Company's Vice President-Finance and, in default thereof, to his estate. If the Executive shall die either while employed by the Company or after his retirement but before the commencement of benefits hereunder, monthly payments in the amount of $8,333 shall be made to the Executive's beneficiary as designated pursuant to the preceding sentence or his estate, as the case may be, for a period of ten years beginning with the first day of the month following the Executive's death. In the event of the Executive's termination of employment other than by reason of his retirement or death, no benefits will be payable hereunder. ARTICLE III ADMINISTRATION, FUNDING AND MISCELLANEOUS Section 3.01. Administration. (a) The Plan will be administered by the Board of Directors of the Company (the "Board") which shall have the sole discretion to interpret the Plan and determine eligibility for benefits hereunder. All decisions of the Board shall be final, conclusive, and binding upon all persons having any interest in the Plan. (b) In the administration of the Plan, the Board may, from time to time, (i) delegate its duties to any individual or committee, (ii) employ agents and delegate to them such duties as it sees fit, and (iii) consult with legal counsel, who may be legal counsel to the Company. Section 3.02. Funding. The Plan shall be unfunded, and all benefit payments provided hereunder shall be paid from the general assets of the Company. The Executive and any of his beneficiaries will be considered to be general unsecured creditors of the Company with respect to benefits under the Plan. The Company may cause the payments to the Executive or his beneficiaries to be made from the assets of an irrevocable grantor trust maintained by the Company and may purchase an insurance policy or policies insuring the life of the Executive or an annuity policy or policies to enable the Company to pay the costs of providing the benefits hereunder. Neither the Executive nor his beneficiaries shall have any rights whatsoever to the assets of the trust or any insurance or annuity policies. The insurance or annuity policies may be owned by the trust, in lieu of the Company, in which case the trust shall be the sole owner and beneficiary of the policy or policies and shall possess and may exercise all incidents of ownership in such policy or policies, except as otherwise provided in the trust. Section 3.03. Claims Procedure. The Executive and any beneficiary of his may apply to the Board for consideration of any claim for benefit under the Plan. If a claim is denied in whole or in part, the Executive or his beneficiary will receive written notification. The notification will include the specific reasons for the denial, with specific reference to the pertinent provisions of the Plan on which the denial was based, a description of any additional material or information needed to perfect the claim and why such material or information is necessary, and an explanation of the claims review procedure. If the Board fails to respond to the claim within ninety (90) days, the claim is treated as denied. Within sixty (60) days after denial, the Executive or his beneficiary may submit a written request for reconsideration of the claim to the Board. Any such request should be accompanied by documents or records in support of the claim. The Executive or his beneficiary may review pertinent documents and submit issues and comments in writing. The Board will review the claim and provide, within sixty (60) days, a written response to the claimant. (This period may be extended an additional sixty (60) days under certain circumstances.) In its response, the Board will give specific reasons for its decision, written in a manner calculated to be understood by the claimant, with specific reference to the pertinent provisions of the Plan on which the decision is based. Section 3.04. Non-Alienation of Participant's Benefits. Except as required by law, no amount payable under this Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether presently or hereafter payable, shall be void. Section 3.05. Employment. Participation in the Plan does not give the Executive any right to be retained in the employ of the Company, and no rights granted under the Plan shall be construed as creating a contract of employment. The right and power of the Company to dismiss or discharge the Executive is expressly reserved. Section 3.06. No Trust Relationship. Nothing contained herein and no actions taken pursuant to the Plan shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company and the Executive. The Company shall not be considered a trustee by reason of the Plan. Section 3.07. Amendment, Modification and Termination. No amendment, modification or termination of the Plan shall be made without the prior written approval of the Executive, other than as may be required by governing law. Section 3.08. Benefits and Burdens. The Plan shall be binding upon and inure to the benefit of the Executive and his beneficiaries and the Company and its successors and assigns. Section 3.09. Governing Law. The provisions of the Plan shall be governed, construed, enforced and administered in accordance with the laws of Kansas and, to the extent applicable, by the Employee Retirement Income Security Act of 1974, as amended, and other applicable federal law. Section 3.10. Headings. The headings have been inserted for convenience only and shall not affect the meaning or interpretation of the Plan. IN WITNESS WHEREOF, the Company has caused the Plan to be executed this ___ day of March, 1995, by its duly authorized officer. SEABOARD CORPORATION By: ___________________________ J. E. Rodrigues Executive Vice President EX-10.5 4 EMPLOYMENT AGR. - JER EXHIBIT 10.5 EMPLOYMENT AGREEMENT Original July 9, 1986 Amended August 10, 1990 Restated March 29, 1995 Mr. Joe E. Rodrigues 12616 Flint Overland Park, Kansas 66213 Dear Joe: In view of the fact that Seaboard Corporation (the Company) wishes to promote you to the position of Executive Vice President, I am pleased to confirm your employment terms as follows: 01. Your employment with Seaboard Corporation as Executive Vice President is to continue for a period of one year starting January 1, 1987, and ending on (and including) December 31, 1987, and shall be extended from year to year thereafter, subject to termination by either party at the end of the one-year period, or any subsequent date, by giving six (6) months advance written notice. In the event this Agreement should terminate by reason of your death, your wife will be paid applicable death benefits to which she may be entitled under the existing benefit plans of the Company, plus two (2) months salary for each completed year of service at the salary rate in force at the time of your demise. If you should become totally and permanently disabled, you will be paid the applicable disability benefits to which you may be entitled under any existing benefit plans of the Company, plus two (2) months salary for each completed year of service at the salary rate in force at the time when the disability occurs. 02. Your annual base salary shall be the sum of $220,000 per annum, payable in equal semimonthly installments and shall be reviewed every twelve months. 03. You will be eligible as additional incentive compensation, to participate in the Company's Executive Bonus Pool. Such additional incentive compensation shall have no effect upon the base salary to be paid to you hereunder. 04. (Amended August 10, 1990) In addition to any pension benefits to which you may be entitled under any existing pension plans of the company, the Company will provide you with any annuity plan such that, either when you decide to retire or this Agreement is terminated by the Company, you will be paid a supplementary annual pension each year for the remainder of your life equal to 4% of your total earnings during your employment with the Company. For example, if you were to retire now, and assuming that your total earnings up to this date add up to approximately $2 million, your starting annual pension would be 4% of $2 million or $80,000. Furthermore, this supplementary annual pension will be tied to the Consumer Price Index for All Urban Consumers (CPI-U) and revised annually to offset the effects of inflation. 05. Your existing Life Policy with the Aetna Life Insurance Company shall be increased from $50,000 to $200,000. 06. You shall be provided with a Company automobile under arrangements at least equivalent to those currently in effect with respect to other Company Senior Executives. 07. You will be entitled to three weeks annual vacation time with full pay. 08. You are authorized to incur reasonable expenses for promoting the business of the Company. At the end of each month, the Company shall reimburse you for all expenses, including entertainment, travel and miscellaneous other expenses incurred in promoting the business of the Company and in performing your duties. 09. Your duties shall be performed principally at the company's offices in Merriam, Kansas. You will report to the President of the Company. You, as Executive Vice President of the Company, shall have the responsibilities as may be assigned to such office by the Board of Directors, and/or the President of the Company, provided, however, that the responsibilities assigned to such office shall be of a character and dignity appropriate to a senior executive of the Company. During the employment period, you agree to devote substantially all of your normal business time and attention to the affairs of the Company and the promotion of its interests. 10. This Agreement shall be binding upon and inure to the benefit of any successor of the Company and any such successor shall be deemed substituted for the Company under the terms of this Agreement. The term "successor" as used herein shall indicate any person, firm, corporation or other business entity which at any time, by merger, consolidation, purchase or otherwise, acquires all or substantially all the assets or business of the Company. 11. The Company may terminate this Agreement in the event of repeated and demonstrated failure on your part to perform the material duties of your position in a competent manner and your failure to substantially remedy such failure within thirty (30) days of receiving specific written notice of such failure from the Company. Yours sincerely, /s/ H. Harry Bresky H. Harry Bresky President Seaboard Corporation I hereby accept the above terms and conditions. /s/ Joe E. Rodrigues Joe E. Rodrigues Date:Original July 9, 1986 Amended August 10, 1990 Restated March 29, 1995 EX-13 5 1994 ANNUAL REPORT S U M M A R Y O F S E L E C T E D F I N A N C I A L D A T A Seaboard Corporation and Subsidiaries
______________________________________________________________________________________________ (Thousands of dollars except per share amounts) Years ended December 31, ______________________________________________________________________________________________ 1994 1993 1992 1991 1990 ______________________________________________________________________________________________ Net sales $ 983,804 $1,142,144 $1,053,655 $875,874 $557,328 ============================================================================================== Net earnings $ 35,201 $ 35,891 $ 31,075 $ 21,241 $ 30,049 ============================================================================================== Earnings per common share $ 23.67 $ 24.13 $ 20.89 $ 14.28 $ 20.19 ============================================================================================== Total assets $ 675,211 $ 647,332 $ 485,121 $458,045 $422,488 ============================================================================================== Long-term debt $ 177,666 $ 194,506 $ 78,123 $ 77,119 $ 77,697 ============================================================================================== Stockholders' equity $ 346,080 $ 304,356 $ 269,581 $239,250 $218,753 ============================================================================================== Dividends per common share $ 1.00 $ .75 $ .50 $ .50 $ .50 ============================================================================================== Included in Net earnings and Earnings per common share for the year ended December 31, 1993 is the cumulative effect of changing the method of accounting for income taxes. Net earnings was increased by $11,000,000 and earnings per common share increased by $7.40 to reflect this change. Net earnings and earnings per common share for the year ended December 31, 1993 also include the reversal of deferred taxes on undistributed earnings of certain foreign subsidiaries that management believes are permanently invested. Net earnings increased by $9,074,000 and earnings per share increased by $6.10 as a result of this reversal of deferred taxes.
(Graphs omitted from this page, see appendix.) MANAGEMENT'S DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Total capitalization as measured by stockholders' equity, long-term deferred income taxes and long-term liabilities totaled $562.7 million at December 31, 1994, compared with $525.1 million and $390.7 million at December 31, 1993, and December 31, 1992, respectively. Liquidity at December 31, 1994, 1993 and 1992, as measured by both current ratio and working capital, is as follows: ------------------------------------------------------------- Years Ended December 31, 1994 1993 1992 Current ratio 3.31:1 3.29:1 3.22:1 Working capital (in thousands) $259,521 $280,466 $209,811 ------------------------------------------------------------- The Company generated $50.3 million of cash from operating activities in 1994, a decrease of $4.7 million compared to 1993. The change is primarily attributable to increased receivables resulting from higher export and transportation sales which have longer collection terms and lower pork sales which have shorter collection terms. The increased liquidity at December 31, 1993, compared to December 31, 1992, is due to $100 million in cash proceeds received in December 1993, from an issuance of long-term debt that was invested in short-term investments. Cash provided by operating activities increased for the year ended December 31, 1993, compared to 1992 as accounts receivable and inventory for new and expanded businesses reached normal operating levels. Economic incentive grants totaling $8.1 million were used to fund construction in 1994. Use of these funds, contributed by government entities, is limited to construction of a hog-processing facility in Guymon, Oklahoma. For accounting purposes, these grants have been recorded in Other Liabilities and will be amortized over the life of the assets acquired with the funds. The Company expects to receive $3.9 million in additional grant funds in 1995 for construction expenditures. During 1994, the Company borrowed the proceeds of $7.5 million in Industrial Development Revenue Bonds issued by the Optima Municipal Authority. The funds are being used to construct a feed mill for the Company's pork operations. During 1994, net proceeds of $8.8 million were received as a result of the Delaware Chancery Court approving the settlement of a stockholders' derivative action brought in 1990 against the Company and certain subsidiaries, the Parent Company and the directors of the Company at the time. The settlement was accounted for as a capital contribution. Long-term debt of $34.9 million was repaid in 1994. Of this amount, $26.3 million was retired in advance of its scheduled maturity. The Company invested $87.6 million in property, plant and equipment during 1994, of which $62.6 million was expended in the food production and processing segment and $23.1 million in the transportation segment. During 1994, capital expenditures for hog farrowing and finishing facilities, a feed mill and a pork-processing plant located in Guymon, Oklahoma, amounted to $38.5 million. Cumulative capital expenditures on these facilities since 1992 total $65.1 million. The Company expects additional expenditures for facilities and working capital to total approximately $200 million in the next two years, of which approximately $49 million is currently under contract. The Company expects to finance the facilities with additional term loans and cash generated from operations. Capital expenditures of $5.3 million were incurred to complete the expansion of the Company's poultry plant in Mayfield, Kentucky. The expansion cost a total of $12 million over the last two years. Other capital expenditures in the food production and processing segment for 1994 included $18.8 million in general modernization and efficiency upgrades of plant and equipment. (Graphs omitted from margin, see appendix.) In January 1995, the Company acquired a hatchery company for $3.5 million. Capital expenditures in the transportation segment during 1994 totaled $23.1 million. The Company purchased a cargo vessel for $13.9 million for use in the ocean liner service, and other capital expenditures of $9.2 million were for general replacement and upgrades of property and equipment. Subsequent to December 31, 1994, the Company agreed to purchase two containerized cargo vessels to be used in its ocean liner service. The purchase price of $14.5 million will be paid with internal cash sources. Capital expenditures totaled $87.3 million for 1993 of which $51.1 million was expended in the food production and processing segment and $35.3 million in the transportation segment. During 1993, the Company expended $19 million for construction of hog farrowing and finishing facilities, $6.7 million to expand the Company's poultry-processing plant in Mayfield, Kentucky, and $25.4 million in general replacement and upgrades of plant and equipment within the food production and processing segment. Capital expenditures for 1993 in the transportation segment of $29.6 million were for the purchase of two cargo vessels. The expenditures were financed with $20.6 million in bank term loans and $9 million using internal cash sources. Other capital expenditures included $5.7 million for general replacement and upgrade of property and equipment. At December 31, 1994 and 1993, $20.6 million and $16.1 million, respectively, were outstanding under the Company's short-term uncommitted credit lines from banks totaling $122 million. The Company previously disclosed its intent to solicit equity through a private placement offering to finance certain hog-production facilities. Subsequently, the Company decided not to seek the equity. Management intends to continue seeking opportunities for expansion in the industries in which it operates and believes that the Company's liquidity, capital resources and borrowing capabilities are adequate for its current and intended operations. RESULTS OF OPERATIONS Net sales of $983.8 million for the year ended December 31, 1994, decreased by $158.3 million compared to the year ended December 31, 1993. Operating income in 1994 increased by $26.1 million compared to 1993 to total $47.1 million. Net sales increased $88.5 million over 1992 to total $1,142.1 million for the year ended December 31, 1993. Operating income of $21 million in 1993 was $18.5 million less than in 1992. Food Production And Processing Segment Food production and processing segment sales totaled $730.8 million in 1994, a decrease of $209.5 million compared to the year ended December 31, 1993. Net sales of pork products and live hogs declined from $287.8 million in 1993 to $98.3 million in 1994. Most of the decline resulted from discontinuing the unprofitable fresh pork operations at the Company's Minnesota processing plant in March 1994. The ongoing operations of the plant consist of processed meats. Gross income on pork products improved by $10.7 million over 1993's loss of $9.1 million primarily due to the discontinuation of the fresh pork operations. The Company had a negative margin of $3.7 million on its live hog operations in 1994; however, management does not believe this is indicative of future results because these live operations are in an early start-up phase. (Graphs omitted from margin, see appendix.) Net sales of poultry products increased by $37.9 million over 1993 to total $426.1 million in 1994. This increase is due to expanded capacity at the Mayfield, Kentucky plant and to higher sales prices. Gross income on poultry products increased from $33.1 million to $50.7 million in 1994. The higher margins are attributable to expanded processing capacity and lower finished feed costs in the second half of 1994. Finished feed costs, which vary from period to period, represent a significant percentage of total poultry product costs. Net sales from commodity trading activity declined by approximately $26.7 million as a result of lower volume. Sales from a flour mill in Zaire are no longer consolidated. The Company reduced its investment to a minority interest, and it now uses the equity method of accounting. In 1993, sales from the flour mill of $33.1 million were included in the Company's consolidated financial statements. Total operating income in the food production and processing segment increased by $15.3 million, which is principally attributable to the higher margins described above. Net sales totaled $940.4 million for the year ended December 31, 1993, an increase of $76.5 million compared to 1992. Of the increase, $51.4 million resulted from the first full year of operation of a flour mill located in Guanica, Puerto Rico, and the acquisition of a flour mill in Zaire. Net sales from commodity trading activity increased by $15.9 million as a result of increased sales to the Company's nonconsolidated flour mills. Net sales of poultry products totaled $388.2 million for the year ended December 31, 1993. Sales volume of poultry products decreased during 1993 compared to 1992, and was principally attributed to a decline in purchases of fresh poultry from third parties for further processing. The average sales price the Company received for its poultry products increased during 1993, resulting in relatively unchanged net sales compared to 1992. Gross income on poultry products increased in 1993 by $4.5 million to total $33.1 million, primarily as a result of an increase in the Company's average selling price received for poultry products. Net sales of pork products and live hogs totaled $287.8 million during 1993, a decrease of $1 million compared to the year ended December 31, 1992. Sales volume of the Company's pork products decreased by 3% during 1993, compared to the year ended December 31, 1992, as a result of a decline in the number of hogs processed. Gross income on pork products during 1993 decreased by $10.5 million compared to 1992. (Graphs omitted from margin, see appendix.) Throughout 1993, the Company paid, on average, 7% more for live hogs than in 1992, while the sales prices did not increase at the same rate. Of the operating loss reported in 1993, $4.5 million was a reserve established in the fourth quarter to reduce the carrying value of certain equipment used in the fresh pork operations to net realizable value based on estimated net sales proceeds and for other incremental costs of discontinuing the fresh pork operations. In 1993, operating income from food production and processing declined by $12.9 million compared to the year ended December 31, 1992. The decrease in operating income was principally attributed to the operations at the Company's Minnesota pork plant. Operating income at the Company's flour mills increased by $3.4 million compared to 1992. The increase is principally attributed to the first full year of operations of the Company's flour mill located in Puerto Rico, and the acquisition of a flour mill located in Zaire. The increase is also net of a fourth quarter foreign exchange loss reported by the flour mill in Zaire of $2.9 million attributable to government-mandated price controls and monetary reform. Subsequent to December 31, 1993, the controls imposed by the government were lifted. Commodity inventories, including feed grains and livestock, are hedged with forward purchase contracts, futures and options in order to manage exposure against major price fluctuations in the commodity markets. These instruments generally call for the exchange of cash for the commodity at some future date and contain no other embedded features. At December 31, 1994, the Company had contracts for the purchase of 3.7 million bushels of grain and the sale of 24 million pounds of livestock. Unrealized gains and losses on these contracts are deferred and included in inventory. The amount of unrealized losses at December 31, 1994 and 1993, were not material. Commodity contracts did not have a material effect on operating income for the years ended December 31, 1994, 1993 and 1992. Transportation Segment Transportation sales for the year ended December 31, 1994, totaled $225.5 million, an increase of $42.9 million compared to 1993. The increase in net sales resulted from new services to South America and the Carribean Basin and increased volume within existing services in Central America. Operating income for the year ended December 31, 1994, totaled $29.3 million, an increase of $7.8 million compared to 1993. The increase is related to new and expanded services. Transportation sales for the year ended December 31, 1993, totaled $182.5 million, an increase of $12 million compared to 1992. The increase in sales includes new services to Peru and Chile which started in July 1993. Operating income for the year ended December 31, 1993, totaled $21.5 million and remained almost unchanged compared to 1992, primarily as a result of a different cargo mix with lower margins in certain markets serviced by the Company. Other Businesses In 1994, the Company renegotiated its contract with the Dominican government relating to an electric power generating facility located in the Dominican Republic. As a result of the new contract and lower maintenance costs, operating income increased by $3.4 million compared to the year ended December 31, 1993. During 1993, operating income from the Company's electric power production facility decreased by $5.2 million as a result of higher generator maintenance costs and unscheduled repairs. (Graphs omitted from margin, see appendix.) Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $112.3 million for the year ended December 31, 1994, from $104.5 million in 1993 and $93.2 million in 1992. The increase in expenses for the year ended December 31, 1994, is related to additional marketing and administrative support of expanded shipping routes and product lines. In addition, general and administrative costs increased as a result of staffing and expenses relating to pork operations in advance of the opening of the processing plant now being constructed in Guymon, Oklahoma. The increase in 1993 compared to 1992 is principally related to new operations in flour milling and increased expenses related to the expansion of the Company's hog production and processing operations. Other Interest income totaled $9.7 million, $7 million and $7 million for the years ended December 31, 1994, 1993 and 1992, respectively. The increase in 1994 of $2.7 million compared to 1993 is primarily due to an increase in short-term investments resulting from cash proceeds of $100 million from the issuance of long-term debt in December 1993, and higher rates on invested funds. Interest expense totaled $13.1 million for the year ended December 31, 1994, compared to $7 million and $6.6 million for the years ended December 31, 1993 and 1992, respectively. Interest expense increased in 1994 by 85% compared to 1993, largely as a result of the issuance of long-term debt and increased short-term borrowings. A significant portion of the Company's debt has fixed rates of interest, and therefore increasing interest rates did not have a significant effect on interest expense during 1994. The Company entered into interest rate exchange agreements in the management of interest rate risk. These agreements effectively converted specifically identified variable rate debt into fixed-rate debt. These agreements were terminated during 1994 and at December 31, 1994, the Company had unamortized gains of $0.4 million. Amortization of the unrealized gains is reflected as adjustments to interest expense over the remaining terms of the respective underlying debt instruments. Miscellaneous income in 1994 includes a $2.9 million gain from liquidating another interest rate exchange agreement during the second quarter. The Company entered into this interest rate exchange agreement as an anticipatory hedge against interest rate risk associated with anticipated variable rate financing. The anticipated liability to be hedged was not incurred, and the Company currently has no plans to incur any other variable rate debt with similar characteristics. The interest rate exchange agreements resulted in additional interest expense of $0.7 million, $2.3 million and $0.7 million in the years ended December 31, 1994, 1993 and 1992, respectively. The Company has operations in and transactions with customers in a number of foreign countries. The currencies of these countries fluctuate in relation to the U.S. dollar. Most of the Company's major contracts and transactions, however, are denominated in U.S. dollars. The Company had no material foreign currency transaction gains or losses during the years ended December 31, 1994, 1993 and 1992. The activities of foreign subsidiaries are primarily conducted with U.S. affiliates, or they operate in hyperinflationary environments. As a result, the Company translates, for consolidation purposes, using the U.S. dollar as the functional currency. The gains and losses that result from remeasurement are reported in earnings. Foreign currency gains (losses) for the years ended December 31, 1994, 1993 and 1992, were $(0.3) million, $(3.1) million and $0.4 million, respectively. Foreign currency exchange restrictions imposed upon the Company's wholly owned foreign subsidiaries and certain minority-owned foreign subsidiaries do not have a significant effect on the consolidated financial position of the Company. The Company does not believe its businesses have been materially adversely affected by inflation. (Graphs omitted from margin, see appendix.) Q U A R T E R L Y F I N A N C I A L D A T A Seaboard Corporation and Subsidiaries (Unaudited)
____________________________________________________________________________________________________________ (Thousands of dollars 1st 2nd 3rd 4th Total for except per share amounts) Quarter Quarter Quarter Quarter the Year ____________________________________________________________________________________________________________ 1994 Net sales $257,398 215,016 214,952 296,438 983,804 Operating income $ 11,802 15,460 8,608 11,228 47,098 Net earnings $ 7,476 11,144 5,649 10,932 35,201 Earnings per common share $ 5.03 7.49 3.80 7.35 23.67 Dividends per common share $ .25 .25 .25 .25 1.00 Market price range per common share: High $ 203 1/2 191 1/2 187 1/2 184 1/2 Low $ 184 173 168 160 ___________________________________________________________________________________________________________ 1993 Net sales $283,467 258,254 250,197 350,226 1,142,144 Operating income (loss) $ 12,720 6,949 2,853 (1,477) 21,045 Earnings before cumulative effect of change in accounting principle $ 17,205 4,806 1,649 1,231 24,891 Cumulative effect of changing the accounting for income taxes 11,000 -- -- -- 11,000 Net earnings $ 28,205 4,806 1,649 1,231 35,891 Earnings per common share: Earnings before cumulative effect of change in accounting principle $ 11.56 3.23 1.11 .83 16.73 Cumulative effect of changing the accounting for income taxes 7.40 -- -- -- 7.40 Earnings per common share $ 18.96 3.23 1.11 .83 24.13 Dividends per common share $ 0.125 0.125 0.25 0.25 0.75 Market price range per common share: High $ 249 7/8 255 220 196 3/4 Low $ 184 3/4 217 186 175 ____________________________________________________________________________________________________________ The Company's first three quarters of each fiscal year consist of three four-week periods. The fourth quarter has four four-week periods. The cumulative effect of implementing Statement of Financial Accounting Standards (SFAS) No. 109 in the first quarter of 1993, as previously presented, included $9,074,000, or $6.10 per share, resulting from the reversal of deferred taxes on undistributed earnings of certain foreign subsidiaries that management believes are permanently invested. The deferred tax benefit of this reversal has been reclassified as a component of earnings before cumulative effect of change in accounting principle in the current presentation.
RESPONSIBILITY FOR FINANCIAL STATEMENTS The consolidated financial statements appearing in this annual report have been prepared by the Company in conformity with generally accepted accounting principles and necessarily include amounts based upon judgements with due consideration given to materiality. The Company relies on a system of internal accounting controls that is designed to provide reasonable assurance that assets are safeguarded, that transactions are executed in accordance with Company policy and are properly recorded, and that accounting records are adequate for preparation of financial statements and other information. The concept of reasonable assurance is based on recognition that the cost of a control system should not exceed the benefits expected to be derived and that such evaluations require estimates and judgements. The design and effectiveness of the system are monitored by a professional staff of internal auditors. The consolidated financial statements have been audited by the independent accounting firm of KPMG Peat Marwick LLP, whose responsibility is to examine records and transactions and to gain an understanding of the system of internal accounting controls to the extent required by generally accepted auditing standards and render an opinion as to the fair presentation of the consolidated financial statements. The board of directors pursues its review of auditing, internal controls and financial statements through its audit committee, consisting of a majority of directors who are not employed by the Company. In the exercise of its responsibilities, the audit committee meets periodically with management, with the internal auditors and with the independent accountants to review the scope and results of examinations. Both the internal auditors and independent accountants have free access to the committee with or without the presence of management. INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Seaboard Corporation: We have audited the accompanying consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1994. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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 includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Seaboard Corporation and subsidiaries as of December 31, 1994 and 1993 and the results of their operations and their cash flows for each of the years in the three- year period ended December 31, 1994 in conformity with generally accepted accounting principles. As discussed in note 1 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" in 1994 and Statement of Financial Accounting Standards No. 109, "Accounting For Income Taxes," in 1993. KPMG Peat Marwick LLP Kansas City, Missouri March 3, 1995 CONSOLIDATED STATEMENTS OF EARNINGS Seaboard Corporation and Subsidiaries
____________________________________________________________________________________________________ (Thousands of dollars except per share amounts) Years ended December 31, ____________________________________________________________________________________________________ 1994 1993 1992 ____________________________________________________________________________________________________ Net sales $ 983,804 $1,142,144 $1,053,655 Cost of sales and operating expenses 824,411 1,016,647 920,929 ____________________________________________________________________________________________________ Gross income 159,393 125,497 132,726 Selling, general and administrative expenses 112,295 104,452 93,215 ____________________________________________________________________________________________________ Operating income 47,098 21,045 39,511 ____________________________________________________________________________________________________ Income from foreign subsidiaries not consolidated 3,113 2,177 4,132 ____________________________________________________________________________________________________ 50,211 23,222 43,643 ____________________________________________________________________________________________________ Other income (expense): Interest income 9,704 7,037 7,009 Interest expense (13,136) (7,067) (6,580) Miscellaneous 2,352 (529) (494) ____________________________________________________________________________________________________ Total other income (expense), net (1,080) (559) (65) ____________________________________________________________________________________________________ Earnings before income taxes and cumulative effect of a change in accounting principle 49,131 22,663 43,578 Income tax (expense) benefit (13,930) 2,228 (12,503) ____________________________________________________________________________________________________ Earnings before cumulative effect of a change in accounting principle 35,201 24,891 31,075 Cumulative effect of changing the accounting for income taxes -- 11,000 -- ____________________________________________________________________________________________________ Net earnings $ 35,201 $ 35,891 $ 31,075 ==================================================================================================== Earnings per common share: Earnings before cumulative effect of a change in accounting principle $ 23.67 $ 16.73 $ 20.89 Cumulative effect of changing the accounting for income taxes -- 7.40 -- ---------------------------------------------------------------------------------------------------- Earnings per common share $ 23.67 $ 24.13 $ 20.89 ==================================================================================================== See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Seaboard Corporation and Subsidiaries
_____________________________________________________________________________________________________ (Thousands of dollars except per share amounts) _____________________________________________________________________________________________________ Unrealized Loss on Common Treasury Additional Debt Retained Stock Stock Capital Securities Earnings _____________________________________________________________________________________________________ Balances, January 1, 1992 $ 1,790 $ (302) $ 4,440 $ -- $ 233,322 Net earnings -- -- -- -- 31,075 Dividends on common stock -- -- -- -- (744) ($.50 per share) ----------------------------------------------------------------------------------------------------- Balances, December 31, 1992 1,790 (302) 4,440 -- 263,653 Net earnings -- -- -- -- 35,891 Dividends on common stock -- -- -- -- (1,116) ($.75 per share) ----------------------------------------------------------------------------------------------------- Balances, December 31, 1993 1,790 (302) 4,440 -- 298,428 Capital contribution -- -- 8,774 -- -- Unrealized loss on marketable debt securities, net of $466 income tax benefit -- -- -- (764) -- Net earnings -- -- -- -- 35,201 Dividends on common stock ($1.00 per share) -- -- -- -- (1,487) ----------------------------------------------------------------------------------------------------- Balances, December 31, 1994 $ 1,790 $ (302) $13,214 $ (764) $ 332,142 ===================================================================================================== See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS Seaboard Corporation and Subsidiaries
___________________________________________________________________________________________________ (Thousands of dollars) December 31, ___________________________________________________________________________________________________ Assets 1994 1993 ___________________________________________________________________________________________________ Current assets: Cash and cash equivalents $ 4,773 $ 7,110 Short-term investments 174,665 215,902 Receivables: Trade 93,216 85,576 Due from foreign subsidiaries not consolidated 6,575 1,385 Other 14,100 12,309 ___________________________________________________________________________________________________ 113,891 99,270 Allowance for doubtful receivables (9,196) (6,556) ___________________________________________________________________________________________________ Net receivables 104,695 92,714 Inventories 73,243 70,961 Deferred income taxes 6,914 7,671 Prepaid expenses and deposits 7,705 8,374 ___________________________________________________________________________________________________ Total current assets 371,995 402,732 ___________________________________________________________________________________________________ Investments in and advances to foreign subsidiaries not consolidated 30,453 28,520 ___________________________________________________________________________________________________ Net property, plant and equipment 255,071 205,438 ___________________________________________________________________________________________________ Other assets 17,692 10,642 ___________________________________________________________________________________________________ Total Assets $675,211 $647,332 =================================================================================================== See accompanying notes to consolidated financial statements. ___________________________________________________________________________________________________ (Thousands of dollars) December 31, ___________________________________________________________________________________________________ Liabilities and Stockholders' Equity 1994 1993 ___________________________________________________________________________________________________ Current liabilities: Notes payable $20,576 $ 16,055 Current maturities of long-term debt 3,408 9,217 Accounts payable 42,560 44,787 Accrued liabilities 23,976 33,693 Accrued payroll 10,023 9,757 Income taxes payable 11,931 8,757 ___________________________________________________________________________________________________ Total current liabilities 112,474 122,266 ___________________________________________________________________________________________________ Long-term debt, less current maturities 177,666 194,506 ___________________________________________________________________________________________________ Deferred income taxes 18,810 20,440 ___________________________________________________________________________________________________ Other liabilities 20,181 5,764 ___________________________________________________________________________________________________ Stockholders' equity: Common stock of $1 par value. Authorized 4,000,000 shares; issued 1,789,599 shares including 302,079 shares of treasury stock 1,790 1,790 Shares held in treasury, at par value (302) (302) ___________________________________________________________________________________________________ 1,488 1,488 Additional capital 13,214 4,440 Unrealized loss on debt securities, net of $466 income tax benefit (764) -- Retained earnings 332,142 298,428 ___________________________________________________________________________________________________ Total stockholders' equity 346,080 304,356 Commitments and contingent liabilities ___________________________________________________________________________________________________ Total Liabilities and Stockholders' Equity $675,211 $647,332 ===================================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS Seaboard Corporation and Subsidiaries
___________________________________________________________________________________________________________________ (Thousands of dollars) Years ended December 31, ___________________________________________________________________________________________________________________ 1994 1993 1992 ___________________________________________________________________________________________________________________ Cash flows from operating activities: Net earnings $ 35,201 $ 35,891 $ 31,075 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 33,403 34,429 29,601 Equity in earnings of nonconsolidated foreign subsidiaries (3,113) (1,497) (2,530) Deferred income taxes (873) (25,470) (9,877) Other operating activities 1,420 1,192 (1,035) Changes in assets and liabilities (net of businesses acquired): Receivables (11,981) (286) (17,920) Inventories (2,282) (196) (15,368) Prepaid expenses and deposits 669 (695) (552) Liabilities exclusive of debt (2,160) 11,590 13,496 ___________________________________________________________________________________________________________________ Net cash provided by operating activities 50,284 54,958 26,890 ___________________________________________________________________________________________________________________ Cash flows from investing activities: Purchase of investments (814,399) - - Proceeds from the sale of investments 602,580 - - Proceeds from maturity of investments 251,826 - - Net investment in short-term investments - (101,141) (23,886) Capital expenditures (87,583) (87,328) (35,286) Investments and advances to foreign subsidiaries not consolidated 1,180 1,990 885 Proceeds from the sale of equipment 4,547 1,924 2,385 Notes receivable (2,655) (2,874) 44,767 Acquisition of businesses (180) (5,500) (2,650) ------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (44,684) (192,929) (13,785) ___________________________________________________________________________________________________________________ Cash flows from financing activities: Notes payable to banks 4,521 11,357 (664) Proceeds from issuance of long-term debt 12,202 126,500 13,509 Principal payments of long-term debt (34,851) (1,498) (20,995) Deferred grant revenue 8,073 - - Dividends paid (1,487) (1,116) (744) Capital contribution 8,774 - - Bond construction fund (5,169) - - ___________________________________________________________________________________________________________________ Net cash provided by (used in) financing activities (7,937) 135,243 (8,894) ___________________________________________________________________________________________________________________ Net increase (decrease) in cash and cash equivalents (2,337) (2,728) 4,211 Cash and cash equivalents at beginning of year 7,110 9,838 5,627 ___________________________________________________________________________________________________________________ Cash and cash equivalents at end of year $ 4,773 $ 7,110 $ 9,838 =================================================================================================================== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest (net of amounts capitalized) $ 13,415 $ 6,778 $ 6,266 Income taxes $ 14,464 $ 13,058 $ 17,737 =================================================================================================================== See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Seaboard Corporation and Subsidiaries December 31, 1994, 1993 and 1992 Note 1 Summary of Significant Accounting Policies _____________________________________________________________________________ Operations of Seaboard Corporation and its Subsidiaries Seaboard Corporation and its subsidiaries (the Company) is a diversified international agribusiness and transportation company engaged domestically in poultry and pork production and processing, commodity merchandising, baking, flour milling, shipping and produce storage and distribution. Overseas, the Company engages in fruit, vegetable and shrimp production and processing, flour milling, animal feed production, polypropylene bag manufacturing and electric power production. Principles of Consolidation and Investment in Affiliates The consolidated financial statements include the accounts of Seaboard Corporation and its wholly-owned domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company's investments in minority-owned foreign subsidiaries are accounted for by the equity method. Short-Term Investments Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity Securities". In accordance with SFAS No. 115, all short-term investments held by the Company are categorized as Available-for-Sale and are reported at fair value with unrealized gains and losses reported, net of tax, in a separate component of stockholders' equity. The investments at January 1, 1994 included $215,902,000 in debt securities, for which cost approximated fair value and, therefore, the initial impact of adopting this standard was not material. The short-term investments are retained for future use in the business and are temporarily invested in time deposits, commercial paper, tax exempt bonds, corporate bonds and U.S. government obligations. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest income. Inventories The Company uses the lower of last-in, first-out (LIFO) or market for determining cost for poultry and baking product inventories. Live hogs, dressed pork, produce and seafood inventories are valued at the lower of first-in, first-out (FIFO) cost or market. Grain inventories held in milling operations are valued at the lower of FIFO cost or market. Property, Plant and Equipment Property, plant and equipment are carried at cost and are being depreciated generally on the straight-line method over useful lives ranging from 3 to 45 years. Property, plant and equipment leases which are deemed to be installment purchase obligations have been capitalized and included in the property, plant and equipment accounts. Maintenance, repairs and minor renewals are charged to operations while major renewals and betterments are capitalized. Deferred Grant Revenue Included in other liabilities at December 31, 1994 is $8,073,000 of deferred grant revenue. Deferred grant revenue represents economic development funds contributed to the Company by government entities. Use of these funds is limited to construction of a hog processing facility in Guymon, Oklahoma. Deferred grants will be amortized to income over the life of the assets acquired with the funds. Revenue Recognition The Company recognizes revenue on commercial exchanges at the time title to the goods transfers to the buyer. Revenue of the Company's ocean freight service is recognized ratably over the transit time for each voyage. Income Taxes The Company adopted SFAS No. 109 "Accounting for Income Taxes", on January 1, 1993. This Statement required a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The Company has reported the cumulative effect of the change in the method of accounting for income taxes as of the beginning of the 1993 fiscal year in the Consolidated Statement of Earnings. Earnings Per Common Share Earnings per common share are based upon the average shares outstanding during the period. Average shares outstanding were 1,487,520 for each of the three years ended December 31, 1994, 1993 and 1992, respectively. Cash and Cash Equivalents For purposes of the Consolidated Statements of Cash Flows, the Company considers all demand deposits and overnight investments as cash equivalents. Included in accounts payable are outstanding checks in excess of cash balances of $6,788,000 and $12,467,000 at December 31, 1994 and 1993, respectively. Foreign Currency The value of the U.S. dollar fluctuates in relation to the currencies of countries where the Company's foreign subsidiaries conduct business. These fluctuations result in exchange gains and losses. The activities of these foreign subsidiaries are primarily conducted with U.S. affiliates or they operate in hyperinflationary environments. As a result, the Company translates, for consolidation purposes, using the U.S. dollar as the functional currency. The gains and losses that result from remeasurement are reported in earnings. Foreign currency gains (losses) for the years ended December 31, 1994, 1993 and 1992 were $(267,456), $(3,059,000) and $436,000, respectively. Foreign currency exchange restrictions imposed upon the Company's wholly-owned foreign subsidiaries and certain minority-owned foreign subsidiaries do not have a significant effect on the consolidated financial position of the Company. Financial Instruments The Company entered into interest rate exchange agreements in the management of interest rate risk. These agreements effectively converted variable-rate debt into fixed-rate debt. All outstanding agreements were terminated during 1994 and at December 31, 1994 the Company had unamortized gains of $446,000. Amortization of these gains are reflected as adjustments to interest expense over the remaining terms of the respective underlying debt instruments. At December 31, 1993, the notional principal amount of these agreements totaled $50,000,000. During 1994, the Company terminated an interest rate exchange agreement with a notional principal amount of $30,000,000 that was initially considered to be an anticipatory hedge. The anticipated liability to be hedged was not incurred and, accordingly, deferral accounting was discontinued in the second quarter of 1994. Included in miscellaneous income for 1994 is a $2,911,000 gain related to settling this agreement. Commodity Contracts The Company enters into forward purchase contracts, futures and options to manage its exposure to fluctuations in the commodity markets. These contracts generally involve the purchase of feed grains and the sale of livestock. At December 31, 1994, the Company had contracts for 3.7 million bushels of grain and 24 million pounds of livestock. Based upon the correlation of commodity types and contract dates with projected usage, these contracts are accounted for as hedges. Gains and losses on these contracts are included in inventory and are ultimately recognized in income as part of the measurement of the hedged transactions. The amount of deferred losses on commodity contracts at December 31, 1994 and 1993 were not material. Within the Consolidated Statement of Cash Flows, cash flows from hedging contracts are classified in the same category as the cash flows from the hedged items. NOTE 2 Acquisitions _____________________________________________________________________________ In January 1994, the Company acquired an additional 15% of the outstanding common stock of Atlantic Salmon (Maine), Inc., for $180,000, bringing the total investment in the entity to 40%. The Company accounts for this investment using the equity method. In January 1993, the Company acquired for $5,500,000 a 51% interest in Minoterie De Matadi, S.A.R.L., a flour mill located in Matadi, Zaire. The operating results of this majority owned subsidiary were fully consolidated during 1993. Included in miscellaneous expense is $138,000 representing the minority share of the mill's earnings for the year. In December 1993, the Company reduced its investment to a 49% minority interest and began using the equity method of accounting. Subsequent to December 31, 1994, the Company acquired for $3,500,000 all the outstanding common stock of a hatchery company. Through December 31, 1994, the hatchery provided services for the Company's poultry operations. None of these acquisitions would have significantly affected net earnings or earnings per share on a proforma basis. NOTE 3 Transactions with Parent Company ___________________________________________________________________________ Seaboard Flour Corporation (the Parent Company) is the owner of 75.3% of the Company's outstanding common stock. At December 31, 1994 and 1993, the Company has a net receivable balance from the Parent Company of $2,505,000 and $501,000, respectively. Interest on receivables was charged at the prime rate during 1994. Interest charged on receivables and advances in 1993 and 1992 approximated U.S. Treasury Bill rates. For the years ended December 31, 1994, 1993 and 1992 net interest income (expense) amounted to $217,000, $(19,000), and $(122,000) respectively. During 1994 the Delaware Chancery Court approved the settlement of a stockholders' derivative action brought in 1990 against the Company and certain subsidiaries, the Parent Company and the directors of the Company at that time. Under the settlement, the Company received $10,800,000 from the Parent Company and the directors of which $2,026,000 was paid to the plantiff's counsel. The settlement proceeds to the Company of $8,774,000 have been recorded as Contributed Capital in Stockholders' Equity. NOTE 4 Short-Term Investments
_____________________________________________________________________________________________________________ The following is a summary of available-for-sale securities at December 31, 1994: Gross Gross Amortized Unrealized Unrealized Estimated (Thousands of dollars) Cost Holding Gains Holding Losses Fair Value ---------------------------------------------------------------------------------------------- U.S. Treasury securities and obligations of U.S. government agencies $ 41,576 - 592 40,984 Obligations of states and political subdivisions 101,425 - 421 101,004 Other debt securities 32,894 - 217 32,677 ---------------------------------------------------------------------------------------------- Total debt securities $ 175,895 - 1,230 174,665 ====================================================================== Substantially all available-for-sale securities have contractual maturities within two years and are available to meet current operating needs. Included in Other Assets at December 31, 1994 are $5,169,000 of unexpended bond proceeds held in trust that are invested in accordance with the bond issuance agreement. The cost of these investments approximates fair value. At December 31, 1993, short-term investments were recorded at amortized cost, which approximates fair value. The gross realized gains on sales of available-for-sale securities totaled $32,000 and the gross realized losses totaled $404,000 for the year ended December 31, 1994.
NOTE 5 Inventories
______________________________________________________________________________________________________________ A summary of inventories at the end of each year is as follows: December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 ______________________________________________________________________________________________________________ At lower of LIFO cost or market: Live poultry $22,230 $22,545 Dressed poultry 13,344 8,278 Feed and baking ingredients, packaging supplies and other 6,121 7,200 ______________________________________________________________________________________________________________ 41,695 38,023 LIFO allowance (1,390) (3,834) ______________________________________________________________________________________________________________ Total inventories at lower of LIFO cost or market 40,305 34,189 ______________________________________________________________________________________________________________ At lower of FIFO cost or market: Live hogs 10,122 3,037 Grain, flour and feed 7,622 3,170 Crops in production, fertilizers and pesticides 6,132 11,376 Dressed pork 2,523 8,587 Other 6,539 7,467 ______________________________________________________________________________________________________________ Total inventories at lower of FIFO cost or market 32,938 33,637 ______________________________________________________________________________________________________________ Grain at market -- 3,135 ______________________________________________________________________________________________________________ Total inventories $73,243 $70,961 ============================================================================================================== The use of the LIFO method increased net earnings in 1994 by $1,515,000 ($1.02 per share), decreased net earnings in 1993 by $1,806,000 ($1.21 per share) and increased net earnings in 1992 by $384,000 ($.26 per share). The increases in net earnings in 1994 and 1992 were primarily the result of declining purchase prices. If the FIFO method had been used, inventories would have been $1,390,000 and $3,834,000 higher than those reported at December 31, 1994 and 1993, respectively.
NOTE 6 Investments in and Advances to Foreign Subsidiaries Not Consolidated _____________________________________________________________________________ The Company has made investments in and advances to minority-owned foreign flour milling, feed milling, polypropylene bag manufacturing, prefabricated residential and commercial construction and shrimp farming subsidiaries. The subsidiaries are located in Sierra Leone, Nigeria and Zaire in West Africa and Ecuador in South America, and are accounted for by the equity method. Certain of these subsidiaries operate under restrictions imposed by local governments which limit the Company's ability to have significant influence on their operations. These restrictions have resulted in a loss in value of these investments and advances that is other than temporary. The Company suspended the use of the equity method for these investments and recognized the impairment in value by a charge to earnings in years prior to 1992. Sales of grain and supplies to nonconsolidated foreign subsidiaries are included in consolidated net sales for the years ended December 31, 1994, 1993 and 1992, and amounted to $16,255,000, $20,126,000 and $16,765,000, respectively. Combined condensed financial information of the minority-owned nonconsolidated foreign subsidiaries for their fiscal periods ended within each of the Company's years ended are as follows:
December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 1992 ______________________________________________________________________________________________________________ Net sales $102,006 $113,743 $124,819 Net earnings 9,220 7,578 6,875 Total assets 150,313 142,776 118,397 Total liabilities 82,522 84,205 74,566 Total equity $ 67,791 $ 58,571 $ 42,481 ==============================================================================================================
NOTE 7
Property, Plant and Equipment ______________________________________________________________________________________________________________ A summary of property, plant and equipment at the end of each year is as follows: December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 ______________________________________________________________________________________________________________ Land and improvements $ 23,273 $ 13,208 Buildings and improvements 79,222 66,218 Machinery and equipment 197,947 170,241 Transportation equipment 92,969 76,368 Office furniture and fixtures 8,558 6,669 Construction in progress 28,182 22,228 ______________________________________________________________________________________________________________ 430,151 354,932 Accumulated depreciation and amortization (175,080) (149,494) ______________________________________________________________________________________________________________ Net property, plant and equipment $255,071 $205,438 ============================================================================================================== Approximately $335,000, $297,000 and $145,000 of interest costs were capitalized as part of property, plant and equipment in the years ended December 31, 1994, 1993 and 1992, respectively.
NOTE 8 Income Taxes ______________________________________________________________________________ Effective January 1, 1993, the Company adopted SFAS No. 109. The cumulative effect of implementation resulted in an increase to earnings of $11,000,000 or $7.40 per common share. The increase was principally due to tax rate decreases. Prior year financial statements have not been restated. Deferred income taxes for the year ended December 31, 1993 includes $0.6 million due to an increase in corporate tax rates. The cumulative effect of implementing SFAS No. 109 as previously presented included $9,074,000 or $6.10 per share resulting from the reversal of deferred taxes on undistributed earnings of certain foreign subsidiaries that management believes are permanently invested. The deferred tax benefit of this reversal has been reclassified as a component of 1993 income taxes in the current presentation. Total income taxes for the years ended December 31, 1994, 1993 and 1992 differ from the amounts computed by applying the statutory U.S. Federal income tax rate to earnings before income taxes and cumulative effect of a change in accounting principle for the following reasons:
Years ended December 31, ______________________________________________________________________________________________________________ (Thousands of dollars, except percent amounts) 1994 1993 1992 _______________________________________________ __________________ __________________ ____________________ % of % of % of Pretax Pretax Pretax Amount Earnings Amount Earnings Amount Earnings _______________________________________________ ___________________ ___________________ ___________________ Computed tax expense on earnings before income taxes and cumulative effect of a change in accounting principle $17,196 35.0% $ 7,932 35.0% $14,817 34.0% Adjustments to tax expense attributable to: Reversal of previously provided deferred taxes for foreign earnings permanently invested overseas -- -- (9,074) (40.0) -- -- Foreign tax differences (2,527) (5.1) (1,181) (5.2) (500) (1.1) Tax-exempt investment income (845) (1.7) (424) (1.6) (603) (1.4) Utilization of foreign tax credit carryforwards -- -- -- -- (889) (2.0) State income taxes, net of Federal benefit 1,134 2.3 465 1.8 840 1.9 Other (1,028) (2.1) 54 .2 (1,162) (2.7) ________________________________________________ __________________ __________________ ____________________ $13,930 28.4% (2,228) (9.8)% $12,503 28.7% ============================================================================================================== The components of income tax expense for the years ended December 31, 1994, 1993 and 1992 are as follows: Years ended December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 1992 ______________________________________________________________________________________________________________ Current: Federal $12,654 $11,017 $20,297 State and local 1,683 1,225 2,083 Deferred benefit (407) (14,470) (9,877) ______________________________________________________________________________________________________________ $13,930 $(2,228) $12,503 ===============================================================================================================
Components of the net deferred income tax liability at December 31, 1994 and December 31, 1993 are as follows (in thousands): December 31, December 31, 1994 1993 ------------ ----------- Deferred income tax liabilities: Cash basis farming adjustment $19,036 $ 19,036 Deferred earnings of foreign subsidiaries 6,839 2,539 Depreciation 2,297 1,411 Other 3,652 929 ------- ------- 31,824 23,915 ------- ------- Deferred income tax assets: Reserves/accruals 13,349 9,168 Foreign losses 4,171 2,881 Other 5,164 1,978 ------ ------- 22,684 14,027 ------ ------- Valuation allowance 2,756 2,881 ------ ------- Net deferred income tax liability $11,896 $12,769 ====== ======= The valuation allowance required under SFAS 109 represents accumulated losses on certain foreign subsidiaries that will not be recognized without future liquidation or sale of these subsidiaries. At December 31, 1994 and 1993, no provision has been made in the accounts for Federal income taxes which would be payable if the undistributed earnings of certain foreign subsidiaries were distributed to Seaboard Corporation since management has determined that the earnings are permanently invested in these foreign operations. Should such accumulated earnings be distributed, the resulting Federal income taxes would amount to approximately $13,500,000. The sources of deferred income taxes resulting from timing differences in the recognition of revenue and expense for income tax and financial statement purposes for the year ended December 31, 1992 is as follows:
(Thousands of dollars) 1992 ------------------------------------------------------------------------------------------------------------- Undistributed earnings of foreign consolidated subsidiaries, net of Federal income taxes currently payable by the Company $ 1,327 Installment sale (9,451) Accelerated depreciation (310) Other, net (1,443) ______________________________________________________________________________________________________________ $(9,877) ==============================================================================================================
NOTE 9 Notes Payable and Long-Term Debt _____________________________________________________________________________ Notes payable amounting to $20,576,000 and $16,055,000 at December 31, 1994 and 1993, respectively, consisted of obligations due banks within one year. These funds are outstanding under the Company's short-term uncommitted credit lines from banks totaling $122,000,000. Interest rates on the notes payable were 6.6% and 3.65% at December 31, 1994 and 1993, respectively. These notes are unsecured and do not require compensating balances or fees. A summary of long-term debt at the end of each year is as follows:
December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 ______________________________________________________________________________________________________________ Term Loans $133,365 $166,274 Industrial development revenue bonds (IDRB's) 40,000 33,500 Other 7,709 3,949 ______________________________________________________________________________________________________________ 181,074 203,723 Current maturities of long-term debt (3,408) (9,217) ______________________________________________________________________________________________________________ Long-term debt, less current maturities $177,666 $194,506 ==============================================================================================================
In December, 1993, the Company issued $100,000,000 in unsecured Senior Notes to various lenders, the proceeds of which are being used for the construction of hog production and processing facilities and for general corporate purposes. The notes bear interest at 6.49%. Variable rate IDRB's were issued in September 1994, by the Optima Municipal Authority in the amount of $7,500,000. The average interest rate during the period the IDRB's were outstanding amounted to 3.47%. Proceeds from the sale of these bonds are being used for the construction of a feed mill for the Company's pork operations. During 1994, the Company redeemed $1,000,000 of IDRB's previously scheduled to mature in 1997. The average interest rate incurred on IDRB's amounted to 3.00%, 2.52% and $3.10% for the years ended December 31, 1994, 1993 and 1992, respectively. Redemption of the IDRB's is assured under irrevocable bank letters of credit issued by major banks. Although those IDRB's mature in 2004, 2005, 2012, 2017, 2019 and 2023, the bonds are deemed to mature in 1996, 1997, 1998 and 1999, the years in which the bank letters of credit and committed extensions thereto expire. Poultry processing facilities, having a depreciated cost of $30,594,000 at December 31, 1994, secure the bond issues. The terms of the note agreements pursuant to which the Senior Notes and the IDRB's were issued require, among other terms, the maintenance of certain ratios and minimum net worth, the most restrictive of which requires the ratio of Consolidated Funded Debt to Consolidated Shareholders' Equity, as defined, not to exceed .90 to 1, and the maintenance of Consolidated Tangible Net Worth, as defined, of not less than $230,000,000. At December 31, 1994 and 1993, term loans relating to the acquisition of two cargo vessels totaled $17,365,000 and $19,645,000, respectively. These notes bear interest at 1% above the London Interbank Offered Rate and are secured by a first mortgage on the vessels. The average interest rates for the years ended December 31, 1994 and 1993 were 7.44% and 6.47%, respectively. In June, 1993, a term loan of $6,000,000 was obtained as part of the financing for the hog production and processing facilities. This term loan bears interest at 3.0%, payable quarterly. At December 31, 1994 and 1993, $10,000,000 was outstanding under a term loan used for working capital purposes. This term loan bears interest at 1/2% above the London Interbank Offered Rate payable quarterly. The average interest rates for the years ended December 31, 1994, 1993 and 1992 were 4.74%, 3.76% and 4.32%, respectively. Term loans totaling $30,629,000 at December 31, 1993 were repaid in 1994. The average interest rates on these loans for the years ended December 31, 1993 and 1992 were 5.71% and 6.18%, respectively. Annual maturities of long-term debt at December 31, 1994 are as follows: $3,408,000 in 1995, $18,111,000 in 1996, $22,864,000 in 1997, $10,573,000 in 1998, $14,590,000 in 1999 and $111,528,000 thereafter. NOTE 10 Fair Value of Financial Instruments _____________________________________________________________________________ The fair value of the Company's short-term investments is based on quoted market prices at the reporting date for these or similar investments. At December 31, 1994, the fair value of the Company's short-term investments was $174,665,000 with an amortized cost of $175,895,000. At December 31, 1993, the fair value of short-term investments approximated the amortized cost of $215,902,000. The fair value of long-term debt is determined by comparing interest rates for debt with similar terms and maturities. At December 31, 1994 and 1993 the fair value of the Company's long-term debt was $166,382,000 and $202,219,000, respectively, with a carrying value of $181,074,000 and $203,723,000 at December 31, 1994 and 1993, respectively. Other financial instruments consisting of Cash and Cash Equivalents, Net Receivables, Notes Payable, and Accounts Payable are carried at cost, which approximates fair value, as a result of the short-term nature of the instruments. NOTE 11 Employee Benefits _____________________________________________________________________________ The Company maintains defined benefit pension plans for its domestic salaried, clerical and poultry employees. The plans generally provide for normal retirement at age 65 and eligibility for participation after one year's service upon attaining the age of 21. Plan assets are invested in equity securities, fixed income bonds and short-term cash equivalents. The net periodic pension cost of these plans was as follows:
Years ended December 31, ______________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 1992 ______________________________________________________________________________________________________________ Service cost-benefits earned during the period $ 1,532 $ 2,678 $ 2,653 Interest cost on projected benefit obligation 2,132 1,650 1,382 Actual return on assets (667) (1,714) (1,178) Net amortization and deferral (1,281) 540 168 ______________________________________________________________________________________________________________ Net periodic pension cost $ 1,716 $ 3,154 $ 3,025 ==============================================================================================================
Assumptions used in determining pension information were:
Years ended December 31, ______________________________________________________________________________________________________________ 1994 1993 1992 ______________________________________________________________________________________________________________ Expected long-term rate of return on assets 7.50% 8.00% 8.00% Discount rate 8.75% 7.25% 8.00% Long-term rate of increase in compensation levels 5.00% 5.00% 6.00% ______________________________________________________________________________________________________________ The funded status and accrued pension cost at December 31, 1994 and 1993 for all defined benefit plans is shown below: December 31, ________________________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 _______________________________________________________ ______________________________ ______________________________ Actuarial present value of benefit obligations: Vested benefit obligation $25,198 $27,351 Nonvested benefit obligation 1,193 1,927 _______________________________________________________ _______________________________ _____________________________ Accumulated benefit obligation 26,391 29,278 Effects of projected future compensation levels 1,647 1,919 _______________________________________________________ _______________________________ _____________________________ Projected benefit obligation 28,038 31,197 Plan assets at fair value 26,265 25,896 _______________________________________________________ _______________________________ _____________________________ Projected benefit obligation in excess of plan assets 1,773 5,301 Recognized minimum liability - 1,001 Unrecognized net liability at transition (1,710) (1,878) Unrecognized net gain 4,953 772 _______________________________________________________ _______________________________ _____________________________ Accrued pension cost $ 5,016 $ 5,196 ===================================================================================================================
Effective January 1, 1994, the Company replaced existing defined benefit plans for domestic salaried and clerical employees with a single new plan with similar retirement age and eligibility provisions. The benefit formula has been modified from a percentage of career average pay to a reduced percentage final average pay. The future benefits available under the plans as of December 31, 1993 were frozen. The Company has nonqualified unfunded supplemental retirement plans for certain executive employees. Pension expense for these plans was $2,760,000, $216,000 and $171,000 for the years ended December 31, 1994, 1993 and 1992, respectively. Included in Other Liabilities at December 31, 1994 and 1993 is $6,698,000 and $4,337,000, respectively, representing the accrued benefit obligation for these plans. The Company maintains a Thrift Savings Plan covering most of its domestic salaried and clerical employees. The Company contributes to the plan an amount equal to 100% of employee contributions up to a maximum of 3% of employee compensation. Employee vesting is based upon years of service with 20% vested after one year of service and an additional 20% vesting with each additional complete year of service. Contribution expense was $1,051,000, $1,096,000 and $998,000 for the years ended December 31, 1994, 1993 and 1992, respectively. NOTE 12 Commitments and Contingencies The Company leases various ships, facilities and equipment under noncancelable operating lease agreements. Minimum lease commitments under noncancelable leases with initial terms greater than one year at December 31, 1994, were $10,407,000 for 1995, $6,903,000 for 1996, $5,681,000 for 1997, $5,471,000 for 1998, $4,423,000 for 1999 and $5,575,000 thereafter. It is expected that, in the ordinary course of business, leases and time charters will be renewed or replaced. The Company is subject to legal proceedings related to the normal conduct of its business. In the opinion of management, none of these actions is expected to result in a judgment having a materially adverse effect on the consolidated financial statements of the Company. NOTE 13 Segment Information _____________________________________________________________________________ The Company principally operates in two business segments: food production and processing and transportation. Corporate assets include cash, short-term investments, notes receivable, corporate equipment and other miscellaneous assets which are not related to a specific business segment. Business segment information for the years ended December 31, 1994, 1993 and 1992 is as follows:
____________________________________________________________________________________________________________________ (Thousands of dollars) 1994 ____________________________________________________________________________________________________________________ Food Unallocated Production Corporate and Items and Processing Transportation Other Eliminations Total ____________________________________________________________________________________________________________________ Sales to unaffiliated customers $730,825 225,457 27,522 -- 983,804 Intersegment sales -- 6,372 -- (6,372) -- ____________________________________________________________________________________________________________________ Net sales $730,825 231,829 27,522 (6,372) 983,804 ==================================================================================================================== Operating income (loss) $ 20,009 29,340 2,895 (5,146) 47,098 ======================================================================================================= Income from foreign subsidiaries not consolidated 3,113 Interest income 9,704 Interest expense (13,136) Other corporate income 2,352 ____________________________________________________________________________________________________________________ Earnings before income taxes $ 49,131 ==================================================================================================================== Identifiable assets $302,618 101,617 28,580 - 432,815 ======================================================================================================= Corporate assets 242,396 ____________________________________________________________________________________________________________________ Total assets $675,211 ==================================================================================================================== Depreciation and amortization $ 21,075 9,973 1,466 889 33,403 ==================================================================================================================== Capital expenditures (excluding acquisitions) $ 62,607 23,105 635 1,236 87,583 ==================================================================================================================== ____________________________________________________________________________________________________________________ (Thousands of dollars) 1993 ____________________________________________________________________________________________________________________ Food Unallocated Production Corporate and Items and Processing Transportation Other Eliminations Total _____________________________________________________________________________________________________________________ Sales to unaffiliated customers $940,369 182,523 19,252 -- 1,142,144 Intersegment sales -- 8,923 -- (8,923) -- _____________________________________________________________________________________________________________________ Net sales $940,369 191,446 19,252 (8,923) 1,142,144 ===================================================================================================================== Operating income (loss) $ 4,733 21,514 (390) (4,812) 21,045 ======================================================================================================= Income from foreign subsidiaries not consolidated 2,177 Interest income 7,037 Interest expense (7,067) Other corporate expense (529) _____________________________________________________________________________________________________________________ Earnings before income taxes and cumulative effect of a change in accounting principle $ 22,663 ===================================================================================================================== Identifiable assets $273,198 86,597 23,893 - 383,688 ======================================================================================================= Corporate assets 263,644 _____________________________________________________________________________________________________________________ Total assets $647,332 ===================================================================================================================== Depreciation and amortization $ 23,166 9,080 1,450 733 34,429 ===================================================================================================================== Capital expenditures (excluding acquisitions) $ 51,115 35,291 47 875 87,328 ===================================================================================================================== ____________________________________________________________________________________________________________________ (Thousands of dollars) 1992 ____________________________________________________________________________________________________________________ Food Unallocated Production Corporate and Items and Processing Transportation Other Eliminations Total _____________________________________________________________________________________________________________________ Sales to unaffiliated customers $863,873 170,527 19,255 -- 1,053,655 Intersegment sales -- 8,635 -- (8,635) -- _____________________________________________________________________________________________________________________ Net sales $863,873 179,162 19,255 (8,635) 1,053,655 ===================================================================================================================== Operating income (loss) $ 17,602 21,552 4,371 (4,014) 39,511 ======================================================================================================= Income from foreign subsidiaries not consolidated 4,132 Interest income 7,009 Interest expense (6,580) Other corporate expense (494) _____________________________________________________________________________________________________________________ Earnings before income taxes $ 43,578 ===================================================================================================================== Identifiable assets $255,719 51,600 28,895 - 336,214 ======================================================================================================= Corporate assets 148,907 _____________________________________________________________________________________________________________________ Total assets $485,121 ===================================================================================================================== Depreciation and amortization $ 18,574 8,813 1,511 703 29,601 ===================================================================================================================== Capital expenditures (excluding acquisitions) $ 30,423 3,817 115 931 35,286 =====================================================================================================================
The following is a summary of domestic and foreign net sales, operating income and identifiable assets included in the consolidated financial statements:
Years ended December 31, ________________________________________________________________________________________________________________________ (Thousands of dollars) 1994 1993 1992 ________________________________________________________________________________________________________________________ Net sales: Domestic $ 874,080 $ 983,433 $ 962,892 Foreign 109,724 158,711 90,763 ________________________________________________________________________________________________________________________ $ 983,804 $1,142,144 $1,053,655 ======================================================================================================================== Operating income: Domestic $ 38,296 $ 15,959 $ 31,469 Foreign 8,802 5,086 8,042 ________________________________________________________________________________________________________________________ $ 47,098 $ 21,045 $ 39,511 ======================================================================================================================== Identifiable assets: Domestic $ 564,886 $ 536,223 $ 345,927 Foreign 110,325 111,109 139,194 ________________________________________________________________________________________________________________________ $ 675,211 $ 647,332 $ 485,121 ======================================================================================================================== Included in identifiable assets at December 31, 1994 and 1993 are foreign receivables of approximately $18,764,000 and $21,565,000 which represent more of a collection risk than the Company's domestic receivables. The Company believes that its allowance for doubtful receivables is adequate.
APPENDIX SEABOARD CORPORATION AND SUBSIDIARIES
Graph data Years ended December 31, 1990 1991 1992 1993 1994 Summary Of Selected Financial Data: TOTAL ASSETS (THOUSANDS OF DOLLARS) $422,488 458,045 485,121 647,332 675,211 STOCKHOLDERS' EQUITY (THOUSANDS OF DOLLARS) $218,753 239,250 269,581 304,356 346,080 EARNINGS PER COMMON SHARE (DOLLARS) $ 20.19 14,28 20,89 24.13 23.67 Management's Discussion and Analysis of Financial Condition and Results of Operations: TOTAL CAPITALIZATION (THOUSANDS OF DOLLARS) $346,217 357,186 390,676 525,066 562,737 CURRENT RATIO 2.69 :1 2.82 :1 3.22 :1 3.29 :1 3.31 :1 WORKING CAPITAL (THOUSANDS OF DOLLARS) $128,711 183,825 209,811 280,466 259,521 CAPITAL EXPENDITURES (THOUSANDS OF DOLLARS) $ 41,108 20,240 35,286 87,328 87,583 NET SALES (THOUSANDS OF DOLLARS) $557,328 875,874 1,053,655 1,142,144 983,804 NET EARNINGS (THOUSANDS OF DOLLARS) $ 30,049 21,241 31,075 35,891 35,201
EX-21 6 LIST OF SUBSIDIARIES EXHIBIT 21 STATE OR OTHER SUBSIDIARIES NAMES UNDER JURISDICTION OF THE WHICH SUBSIDIARIES OF REGISTRANT DO BUSINESS INCORPORATION A & W Interlining American Interlining Maryland Services Corp. Company Western Coat Pad Company African Camellia Same Liberia Shipping Ltd. African Coffee Same Zaire Company, S.P.R.L. African Commodities Same Zaire Company, PLC African Dahlia Shipping Ltd. Same Liberia African Evergreen Same Liberia Shipping Ltd. African Fern Shipping Ltd. Same Liberia African Gardenia Same Liberia Shipping Ltd. African Hyacinth Same Liberia Shipping Ltd. Agencia Maritima del Same Costa Istmo, S.A. Rica Agencias Generales Same Venezuela Conaven, C.A. Agro Internacional de Same Honduras Honduras, S.A. de C.V. Almacenadora Conaven, Same Venezuela S.A. Atlantic Salmon (Maine), Inc. Same Maine Buttercup Shipping Same Liberia Limited Cape Fear Railways, Same North Inc. Carolina Chestnut Hill Farms, Same Florida Inc. Colina de Almendros Chestnut Hill de Guatemala de Guatemala, Guatemala, S.A. S.A. Chestnut Hill Farms Same Honduras Honduras, S.A. de C.V. Chestnut Hill Farms Same Venezuela de Venezuela, S.A. Consorcio Naviero de Conaven Venezuela Occidente, C.A. Cultivos Marinos, CUMAR Honduras S.A. de C.V. Delta Packaging Same Nigeria Company Ltd. Desarrollo Industrial DIBSA Ecuador Bioacuatico, S.A. Empacadora Litoral, Same Honduras S.A. de C.V. H & O Shipping Same Liberia Limited H.F.P. Engineering Same Nigeria (Nigeria) Limited Harinas de Puerto Same Delaware Rico, Inc. Holsum Bakers of Same Delaware Puerto Rico, Inc. Interamericana de Same Ecuador Tejidos, C.A. Jordan Hatchery, Inc. Same Alabama Life Flour Mill Ltd. Same Nigeria Minoterie De Matadi, Same Zaire S.A.R.L. Molinos Champion, Same Ecuador S.A. Molinos del Ecuador, Same Ecuador C.A. National Milling Same Guyana Company of Guyana, Ltd. Port of Miami Cold Same Florida Storage, Inc. Representaciones Same Guatemala Maritimas y Aereas, S.A. SASCO Engineering Same U.S. Virgin Co./ Islands Seaboard Sales Corporation Sandy Isle Food Same St. Imports, N.V. Maarten, Netherlands, Antilles Sea Cargo, S.A. Same Panama Seaboard Atlantic Same Panama Trading, Inc. Seaboard Bakeries, Same Delaware Inc. Seaboard Export Same Delaware Corporation Seaboard Express Ltd. Same Bermuda Seaboard de Columbia, Same Columbia S.A. Seaboard de Honduras, Same Honduras S.A. de C.V. Seaboard de Peru Same Peru Seaboard Farms of Same Georgia Athens, Inc. Seaboard Farms of Same Tennessee Chattanooga, Inc. Seaboard Farms of Same Georgia Elberton, Inc. Seaboard Farms of Same Kentucky Kentucky, Inc. Seaboard Farms of Same Minnesota Minnesota, Inc. Seaboard Farms, Inc. Same Oklahoma Seaboard Holdings Same British Ltd. Virgin Islands Seaboard Intrepid, Same Bermuda Ltd. Seaboard Marine Ltd. Same Liberia Seaboard (Nigeria) Same Nigeria Limited Seaboard Overseas Same Bahamas Limited S.B.D., Inc. Same Delaware Seaboard Ship Same Florida Management Inc. Seaboard Trading de Same Mexico Mexico, S.A. de C.V. Seaboard West Africa Same Sierra Limited Leone Seadom, S.A. Same Dominican Republic Secuador Limited Same Bermuda Shilton Limited Same Grand Cayman Island Top Feeds Limited Same Nigeria Transcontinental Same Bermuda Capital Corp. (Bermuda) Ltd. Zenith Investments, Same Nigeria Ltd. EX-27 7 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FISCAL 1994 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 YEAR DEC-31-1994 DEC-31-1994 4773 174665 104695 9196 73243 371995 430151 175080 675211 112474 177666 1488 0 0 344592 675211 983804 983804 824411 824411 112295 2910 13136 49131 13930 35201 0 0 0 35201 23.67 23.67