-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WGO+uaTyOQPToTNJUhG4cro8YNrxpO038WvgyxBhCwSHn1ebKlJoMWd1kcHhQqWI rrRaNQZlmYWI3nL4xDnM+Q== 0000088121-96-000013.txt : 19960401 0000088121-96-000013.hdr.sgml : 19960401 ACCESSION NUMBER: 0000088121-96-000013 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEABOARD CORP /DE/ CENTRAL INDEX KEY: 0000088121 STANDARD INDUSTRIAL CLASSIFICATION: POULTRY SLAUGHTERING AND PROCESSING [2015] IRS NUMBER: 042260388 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-03390 FILM NUMBER: 96541922 BUSINESS ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66201 BUSINESS PHONE: 913-676-8939 MAIL ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66202 FORMER COMPANY: FORMER CONFORMED NAME: SEABOARD ALLIED MILLING CORP DATE OF NAME CHANGE: 19820328 FORMER COMPANY: FORMER CONFORMED NAME: HATHAWAY BAKERIES INC DATE OF NAME CHANGE: 19710315 10-K405 1 SEABOARD CORP. 1995 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, 1995 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. $79,975,465 (March 15, 1996). On such date, 332,193 shares were held by non-affiliates, and the stock was sold at $240 3/4 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 18, 1996. 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 1996 annual meeting of stockholders (the "1996 Proxy Statement"). This Form 10K and its Exhibits (Form 10-K) contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact. These statements appear in a number of places in this Form 10-K and include statements regarding the intent, belief or current expectations of the Company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the Company's financing plans, (iii) the Company's competitive position, (iv) the supply and price of feed stocks and other materials used by the Company, (v) the demand and price for the Company's products and services, or (vi) other trends affecting the Company's financial condition or results of operations. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of various factors. The accompanying information contained in this Form 10-K, including without limitation the information under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations", identifies important factors which could cause such differences. 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 which is primarily engaged in domestic poultry and pork production and processing, commodity merchandising, baking, flour milling and shipping. Overseas, the Company primarily engages in shrimp production and processing, flour milling and animal feed production. See Item 1(c) (i) (ii) below for a discussion of developments in specific segments. (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 50, 51 and 52 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, food service and institutional markets, primarily in the eastern half of the United States. Registrant produces hogs and processes pork in the United States and sells fresh pork to domestic and foreign markets. Market hogs produced by Company owned or managed facilities are processed at the Company's processing plant or sold to third parties. 3 FORM 10-K SEABOARD CORPORATION 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 primarily in the Atlantic Basin. 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 food service and retail outlets. Registrant trades commodities, such as bulk grains and oil seeds, primarily in the Eastern Mediterranean and the Atlantic Basin. Registrant produces and processes produce and shrimp in Central and South America, primarily for export to the U.S. and Europe. Registrant also brokers fruits, vegetables and shrimp for independent growers. The majority of these products are transported using the Registrant's shipping line and distribution facility in Miami, Florida. Registrant also produces polypropylene bags, operates power generating facilities, operates flour and animal feed mills, and produces 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 50, 51 and 52 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, and pork production and processing facilities. The Registrant is currently constructing an integrated hog production and processing operation in Oklahoma, Kansas, Texas and Colorado. These facilities will include hog farrowing, nursing and finishing buildings, feed mills and a processing plant. The processing plant, which began operating in December, 1995, will produce fresh and processed pork to be marketed primarily in the Southwest United States and for export. Registrant ceased operations at its Albert Lea, Minnesota pork processing plant in December 1995 when it leased the plant to a third party. 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 and Easy Entrees for retail sales of poultry products. Registrant uses two trademarks, Season Sweet, Chestnut Hill Farms, and Cumars Best in marketing fresh fruits, vegetables and shrimp in the United States. Registrant's Puerto Rican Baking business uses three trademarks registered to a third party; Holsum, Country Hearth and Olympic Kids ; 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. Profits from processed pork are generally higher in the fall 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 1996 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 1995 issue of Successful Farming, an industry trade publication, the Registrant was ranked in the top ten pork producers 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 believes it is among the top five ranking ocean liner services for containerized cargoes in the Caribbean Basin. During the fourth quarter of 1995, competition based on price and consumer service increased significantly in certain markets served by the Registrant. 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, 1995, Registrant had 11,699 employees, of whom 7,809 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 export sales is hereby incorporated by reference to note 13 of Registrant's Consolidated Financial Statements appearing on pages 50, 51 and 52 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. Foreign sales, including sales to non-consolidated 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 its flour mill and shrimp farm in Ecuador and its 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. 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, Oklahoma, Pennsylvania, New Jersey, North Carolina, Tennessee and Texas. Additionally, the Registrant has wholly or partially owned facilities in Chile, Colombia, 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 218 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 construction in Oklahoma of a hog processing plant with a double shift capacity of four million hogs per year was completed in December, 1995. Registrant expects single shift capacity to be reached in the third quarter of 1996. Hog production facilities currently consist of a combination of owned and leased farrowing, nursery and finishing units to support 77,000 sows. Registrant owns two feed mills and is constructing a third which will have combined capacity to produce 840 thousand tons of feed annually to support the hog production. These facilities are located in Oklahoma, Texas, Kansas and Colorado. 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. The flour mills, located in Puerto Rico, Guyana, Ecuador, Sierra Leone, Nigeria and Zaire and the feed mills located in Ecuador, 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 18 years, and a Nigerian flour and feed mill with a remaining lease term of 79 years and renewal option of 75 years. The Registrant owns two bakeries in Puerto Rico. The Registrant operates approximately 3,100 acres of shrimp ponds in Honduras and Ecuador. Approximately 2,400 acres are leased for a nineteen year term and the rest are owned. (2) Transportation Registrant leases a 166,400 square foot warehouse, office space and port terminal land and facilities in Florida which are used in its containerized cargo operations. The Registrant owns six 9,000 metric-ton deadweight dry bulk carriers and seven containerized ocean cargo vessels with deadweights ranging from 949 to 12,648 metric-tons. In addition, Registrant timecharters, under short-term agreements, between twelve and fifteen containerized ocean cargo vessels with deadweights ranging from 2,488 to 9,200 metric-tons. 8 FORM 10-K SEABOARD CORPORATION (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. Registrant manages a second power generating facility capable of producing 17.5 megawatts of power also located in the 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. Item 3. Legal Proceedings The Company is subject to 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 (70) President of Registrant; President and Treasurer of Seaboard Flour Corporation (SFC) Joe E. Rodrigues (59) Executive Vice President, Treasurer and Chief Financial Officer of Registrant Jack S. Miller (67) Vice President - Operations/Administration of Registrant Rick J. Hoffman (41) Vice President of Registrant Steven J. Bresky (42) Vice President of Registrant Jesse H. Bechtold (38) Controller and Assistant Treasurer David M. Becker (34) Assistant Secretary and Manager of Legal Affairs 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. Mr. Becker has served as Assistant Secretary of Registrant since May 1994. He has been employed with the Registrant since 1993 and prior to that was employed by the law firm Stinson Mag and Fizzell PC. 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 "Stock Listing" and "Quarterly Financial Data" appearing on pages 53 and 33, 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 27 through 32 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," "Independent Auditor's Report," "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 33 through 52 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, 1995, 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 1996 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 1996 Proxy Statement. Item 11. Executive Compensation This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 1995, the close of its fiscal year. The information required by this item is incorporated by reference to "Executive Compensation and Other Information," "Retirement Plans" and "Compensation Committee Interlocks and Insider Participation" appearing on pages 5, 6, 7 and 9 of the 1996 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, 1995, 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 1996 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, 1995, 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 1996 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. 4.3 Note Purchase Agreement dated June 1, 1995 between the registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the commission. Incorporated by reference to Exhibit 4.3 of Registrant's Form 10-Q for the quarter ended September 9, 1995. 4.4 Seaboard Corporation 7.88% Senior Note Due June 1, 2007 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.4 of Registrant's Form 10-Q for the quarter ended September 9, 1995. * 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. 13 FORM 10-K SEABOARD CORPORATION * 10.5 Employment Agreement for Joe E. Rodrigues dated July 9, 1986 and amended August 10, 1990. * 10.6 First Amendment to Registrant's Executive Retirement Plan dated December 31, 1995. 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). * Management contract or compensatory plan or arrangement. (b) Reports on Form 8-K No reports on Form 8-K were filed by Registrant during the last quarter of the fiscal year covered by this report. (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. Rodrigues, President Executive Vice President and (principal executive officer) Treasurer (principal financial officer) Date: March 29, 1996 Date: March 29, 1996 By /s/Jesse H. Bechtold Jesse H. Bechtold, Controller (principal accounting officer) Date: March 29, 1996 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 29, 1996 Date: March 29, 1996 /s/David A. Adamsen /s/Thomas J. Shields David A. Adamsen, Director Thomas J. Shields, Director Date: March 29, 1996 Date: March 29, 1996 15 SEABOARD CORPORATION AND SUBSIDIARIES Consolidated Financial Statements and Schedules (Form 10-K) Securities and Exchange Commission For the year ended December 31, 1995 (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 34 Consolidated Balance Sheets as of December 31, 1995 and December 31, 1994 37 Consolidated Statements of Earnings for the years ended December 31, 1995, December 31, 1994 and December 31, 1993 35 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1995, December 31, 1994 and December 31, 1993 36 Consolidated Statements of Cash Flows for the years ended December 31, 1995, December 31, 1994 and December 31, 1993 39 Notes to Consolidated Financial Statements 40 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." (Continued) F-1 SEABOARD CORPORATION AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedule Schedule --------- Page ---- II - Valuation and Qualifying Accounts for the years ended December 31, 1995, 1994 and 1993 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 1, 1996, we reported on the consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 1995 and 1994 and the consolidated statements of earnings, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1995, as contained in the December 31, 1995 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, 1995. 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 1 , 1996 F-3 Schedule II SEABOARD CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts (In Thousands)
Balance at Write-offs Balance beginning Provision net of at end of year (1) recoveries of year ---------- --------- ---------- ------- Year ended December 31, 1995: Allowance for doubtful accounts $9,196 10,554 2,662 17,088 ========== ======== ========== ======== 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 ========== ======== ========== ======== (1) Charged to selling, general and administrative expenses.
EX-13 2 1995 ANNUAL REPORT Summary of Selected Financial Data Seaboard Corporation and Subsidiaries
- ----------------------------------------------------------------------------------------------- (Thousands of dollars except per share amounts) Years ended December 31, - ----------------------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 - ----------------------------------------------------------------------------------------------- Net sales $ 1,173,977 $ 983,804 $ 1,142,144 $ 1,053,655 $ 875,874 =============================================================================================== Net earnings $ 20,202 $ 35,201 $ 35,891 $ 31,075 $ 21,241 =============================================================================================== Earnings per common share $ 13.58 $ 23.67 $ 24.13 $ 20.89 $ 14.28 =============================================================================================== Total assets $ 878,132 $ 675,211 $ 647,332 $ 485,121 $ 458,045 =============================================================================================== Long-term debt $ 297,440 $ 177,666 $ 194,506 $ 78,123 $ 77,119 =============================================================================================== Stockholders' equity $ 365,810 $ 346,080 $ 304,356 $ 269,581 $ 239,250 =============================================================================================== Dividends per common share $ 1.00 $ 1.00 $ .75 $ .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 Common Share increased by $6.10 as a result of this reversal of deferred taxes.
(Graphs omitted from this page, see appendix.) Seaboard Corporation and Subsidiaries Selected Financial Data (Graphs omitted from this page, see appendix.) Management's Discussion and Analysis Liquidity and Capital Resources
- ---------------------------------------------------------------------------- (Dollars in millions) 1995 1994 1993 - ---------------------------------------------------------------------------- Current ratio 2.25:1 3.31:1 3.29:1 Working capital $ 219.0 259.5 280.5 Cash provided by operating activities $ 42.2 50.3 55.0 Capital expenditures $ 229.5 87.6 87.3 Long-term debt $ 297.4 177.7 194.5 Total capitalization* $ 703.4 562.7 525.1 - --------------------------------------------------------------------------- * Total capitalization is defined as stockholders' equity and noncurrent liabilities.
Cash provided by operating activities declined by $8.1 million in 1995 compared to 1994 due to lower earnings and increased inventories and receivables partially offset by increases in accounts payable and accrued liabilities. Inventories of live hogs increased with the population of newly constructed hog production facilities. Inventories of dressed poultry, wheat and soybeans increased due to the timing of export sales. Receivables increased in the transportation segment mostly due to increased sales. Accounts payable increased primarily as a result of higher inventory levels. Accrued liabilities increased due to advance payments on export sales, deferred hedging gains and revenues on incomplete voyages. The decrease in cash from operations of $4.7 million in 1994 compared to 1993 was 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 Company invested $229.5 million in property, plant and equipment during 1995, of which $192.2 million was expended in the food production and processing segment, $34.1 million in the transportation segment and $3.2 million in other areas of the Company's business. During 1995, capital expenditures for hog production facilities, two feed mills and a pork processing plant amounted to $159.7 million. Cumulative capital expenditures on these facilities since 1992 has totaled $223.2 million. The Company expects additional expenditures for hog production facilities to total approximately $68 million in the next two years, of which approximately $25 million is currently under contract. Management anticipates the facilities will be paid for from cash. Capital expenditures of $8.5 million were made to expand poultry processing capacity during 1995. Remaining capital expenditures for the expansion are expected to total $1 million and will be funded with cash. In January 1995, the Company acquired a chicken hatchery company for $3.5 million which previously had supplied day old chicks to one of the Company's poultry processing facilities. Other capital expenditures in the food production and processing segment for 1995 included $24 million in general modernization and efficiency upgrades of plant and equipment. Capital expenditures in the transportation segment during 1995 totaled $34.1 million. The Company purchased two cargo vessels for $14.7 million for use in the ocean liner service, and other capital expenditures of $19.4 million were for general replacement and upgrades of property and equipment. Capital expenditures totaled $87.6 million in property, plant and equipment during 1994, of which $61.9 million was expended in the food production and processing segment and $23.1 million in the transportation segment. During 1994, capital expenditures for hog production facilities, a feed mill and a pork processing plant amounted to $38.5 million. Capital expenditures of $5.3 million were incurred to expand the Company's poultry capacity and $18.1 million in general modernization and efficiency upgrades of plant and equipment. 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. In February 1995, the Company borrowed the proceeds of $3.3 million in Adjustable rate, Seven-Day Demand Revenue Bonds issued by the Guymon Utilities Authority. The funds were used for costs associated with the construction of a pork processing plant. In June 1995, the Company issued $125 million in unsecured Senior Notes to various lenders, the proceeds of which are being used to finance the construction of hog production facilities, a pork processing plant and for general corporate purposes. The notes bear interest at 7.88% and mature in equal installments of $25 million on June 1, 2003, 2004, 2005, 2006 and 2007. In December 1995, the Company borrowed the proceeds of $9.6 million in Adjustable rate Demand Exempt Facility Revenue Bonds issued by the Kansas Development Finance Authority. The funds will be used for certain costs associated with hog production facilities. Long-term debt of $17.4 million was repaid in 1995 in advance of its scheduled maturity. During 1994, the Company borrowed the proceeds of $7.5 million in Adjustable rate, Seven-Day Demand Industrial Development Revenue Bonds issued by the Optima Municipal Authority. The funds were used to construct a feed mill for the Company's pork operations. Economic incentive grants totaling $12 million were used to fund construction projects in 1995 and 1994. Use of these funds, contributed by government entities, was limited to construction of a pork processing facility. For accounting purposes, these grants have been recorded in Other Liabilities and will be amortized over the life of the assets constructed with the funds. During 1994, net proceeds of $8.8 million were received as a result of the settlement of a stockholders' derivative action brought in 1990 against the Company and certain subsidiaries, Seaboard Flour Corporation 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. At December 31, 1995 and 1994, $33.8 million and $20.6 million, respectively, were outstanding under the Company's short-term uncommitted credit lines from banks totaling $122 million. Subsequent to year-end, the Company entered into a $75 million one year revolving credit facility and a five year $50 million revolving credit facility with a group of banks. Certain of the above short-term uncommitted credit lines will no longer be maintained. Utilization of the five-year revolving credit facility is limited by existing debt covenants. 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 $1,174 million for the year ended December 31, 1995, increased by $190.2 million compared to the year ended December 31, 1994. Operating income in 1995 decreased by $15.9 million compared to 1994 to total $31.2 million. Net sales decreased $158.3 million compared to 1993 to total $983.8 million for the year ended December 31, 1994. Operating income of $47.1 million in 1994 increased by $26.1 million compared to 1993. Food Production And Processing Segment
- ----------------------------------------------------------------------------- (Dollars in millions) 1995 1994 1993 - ----------------------------------------------------------------------------- Net sales $ 652.5 638.3 786.3 Operating income $ 10.1 10.7 (2.5) - -----------------------------------------------------------------------------
Net sales of poultry products totaled $458.6 million in 1995 an increase of $32.5 million compared to 1994. The increase was primarily due to higher sales prices attributable to higher demand for export product. Gross income on poultry products increased by $4.4 million compared to 1994 to total $55.1 million. The increase in gross income was primarily related to higher selling prices partially offset by higher finished feed costs. Net sales of live hogs and pork products totaled $91.6 million in 1995 compared to $98.3 million in 1994. The 1994 net sales included the last three months of slaughter operations at the Company's Minnesota plant. After discontinuing the slaughter, the remaining operations at this plant consisted of processing hams and bacon until December 1995 when it was leased to a third party. Live hog sales increased during the current year as the Company's herd grew in anticipation of opening its new processing plant. Slaughter operations began at the new plant in December 1995. The Company expects net sales to increase significantly as the plant's volume increases. The pork operations reported a negative gross income of $3.6 million in 1995 compared to a negative gross income of $2 million in 1994. The decrease is primarily related to higher cost of raw product used in processing hams and bacon. The Company's new processing plant began slaughter operations in December 1995. This plant is in its initial stage of operations. The Company expects First and Second Quarter 1996 results to continue to be adversely effected from the costs associated with start-up of the plant. In the Fourth Quarter, Management decided to implement a plan to replace certain hog breeding stock with an alternate genetic stock. The Company recognized a one-time charge against earnings of $1.4 million to reduce the carrying value of the old genetic stock to its net realizable value. Management expects the changeover to the new genetic stock to be completed in 1996. In 1995, the operating income of the food production and processing segment decreased by $.6 million compared to 1994. The decrease in operating income was primarily related to the higher general and administrative expenses at the Company's pork operations. 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 and 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. 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. 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, however, the increase was partially offset by a $3.7 million negative margin on live hog operations. Total operating income in the food production and processing segment increased by $13.2 million in 1994 compared to 1993 primarily as a result of improved margins. Corn is the most significant component of the feed used in the production of poultry and hogs. During 1995 corn prices increased by more than fifty percent compared to one year ago and that increase has continued into early 1996. The Company implements hedging strategies to manage exposure to fluctuations in these commodity markets; however, prolonged periods of high corn prices will cause an increase in the cost to grow livestock. The Company's ability to recover higher costs through higher sales prices will depend largely upon competitive pressures in poultry and pork product markets. If the Company is not able to recover these higher costs through higher sales prices, the Company's gross income could be negatively affected. A portion of anticipated feed grain requirements and hog inventories are hedged with forward purchase and sale 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, 1995, the Company had net contracts to purchase 5.9 million bushels of grain and sell 57.4 million pounds of hogs. Unrealized gains and losses on these contracts are deferred and included in accrued liabilities. The amount of net unrealized gains at December 31, 1995 was $4.7 million. Net realized gains from commodity contracts reported in operating income for the year ended December 31, 1995 was $1.9 million. Commodity contracts did not have a material effect on operating income for the years ended December 31, 1994 and 1993. Commodity Trading
- ----------------------------------------------------------------------------- (Dollars in millions) 1995 1994 1993 - ----------------------------------------------------------------------------- Net sales $ 208.0 107.4 167.6 Operating income $ 8.5 8.6 6.9 - -----------------------------------------------------------------------------
Net sales from commodity trading activity increased by $100.6 million in 1995 compared to 1994. The increase is primarily related to expanded trading of wheat, soybeans, corn and other grains in foreign markets. Operating income was adversely effected by higher operating expenses. Net sales from commodity trading activity declined by $60.2 million in 1994 compared to 1993. 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. Operating income increased by $1.7 million in 1994 compared to 1993 as a result of improved margins on commodity trading activity. Transportation Segment
- ----------------------------------------------------------------------------- (Dollars in millions) 1995 1994 1993 - ----------------------------------------------------------------------------- Net sales $ 277.1 210.6 169.0 Operating income $ 16.9 29.2 21.9 - -----------------------------------------------------------------------------
Net sales from the containerized cargo operations increased by $66.5 million in 1995 compared to 1994. The increase resulted primarily from new services to South America and the Caribbean Basin and increased volume within existing services in Central America. Net sales from other transportation services were not material. Operating income from the containerized cargo operations decreased by $12.3 million in 1995 compared to 1994. The decrease was primarily related to lower freight rates in 1995 compared to 1994 in certain markets in which the Company operates. Through the Third Quarter of 1995, freight rates on revenue producing units remained comparable to the same period in 1994. In the Fourth Quarter of 1995, rates declined sharply due to competitive pressures. Management cannot predict when rates in these markets will improve and, therefore, the results of operations in future periods could continue to be adversely affected. Operating income was further impacted by costs associated with expanding services, including higher rates on vessels the Company has under charter hire. Net sales from the containerized cargo operations increased by $41.6 million in 1994 compared to 1993. The increase in net sales resulted from new services to South America and the Caribbean Basin and increased volume within existing services in Central America. Operating income for the year ended December 31, 1994, increased by $7.3 million compared to 1993. The increase is related to new and expanded services. Other Operations
- ----------------------------------------------------------------------------- (Dollars in millions) 1995 1994 1993 - ----------------------------------------------------------------------------- Net sales $ 36.4 27.5 19.3 Operating income $ 1.0 2.9 (0.4) - -----------------------------------------------------------------------------
Net sales from electric power generation increased in 1995 compared to 1994. The increase is primarily related to expanded services within the Dominican Republic. Operating income decreased during the year as a result of increasing reserves on certain foreign receivables. 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 in 1994 compared to the year ended December 31, 1993. Selling, General and Administrative Expenses - -------------------------------------------- Selling, general and administrative expenses increased to $139.2 million for the year ended December 31, 1995, from $112.3 million in 1994 and $104.5 million in 1993. The increase in expenses for the year ended December 31, 1995, is primarily related to general and administrative costs associated with the staffing and expenses of the pork operations. Selling expenses increased as the Company increased reserves for potential uncollectible receivables primarily from foreign customers and expenses related to expanded shipping routes and product lines. The increase in expenses for the year ended December 31, 1994, is related to additional marketing in the transportation segment and general and administrative costs incurred as a result of staffing and expenses relating to pork operations in advance of opening its new processing plant. Interest Income - --------------- Interest income totaled $11.5 million, $9.7 million and $7 million for the years ended December 31, 1995, 1994 and 1993, respectively. The increase in 1995 of $1.8 million resulted primarily from investing the proceeds of $125 million of long-term debt issued in June 1995. 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 - ---------------- Interest expense, net of capitalized interest, totaled $15.7 million for the year ended December 31, 1995, compared to $13.1 million and $7.1 million for the years ended December 31, 1994 and 1993, respectively. Interest expense increased during 1995 compared to 1994 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. Interest expense increased in 1994 compared to 1993 as a result of the issuance of long-term debt and increased short-term borrowings. 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. At December 31, 1995, the notional principal amount of these agreements totaled $100 million. Subsequent to December 31, 1995 these agreements were terminated. The resulting loss was not material. The interest rate exchange agreements resulted in additional interest expense of $0.1 million, $0.7 million and $2.3 million in the years ended December 31, 1995, 1994 and 1993, respectively. Other Financial Information - --------------------------- Miscellaneous income in 1994 includes a $2.9 million gain from liquidating an 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. 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, 1995, 1994 and 1993. The Company does not hedge foreign currency risk as it is insignificant. 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 losses for the years ended December 31, 1995, 1994 and 1993, were $0.2 million, $0.3 million and $3.1 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 is subject to various federal and state regulations regarding environmental protection and land use. Among other things, these regulations affect the disposal of livestock waste and corporate farming matters in general. Management believes it is in compliance with all such regulations. Future changes in environmental or corporate farming laws could effect the manner in which the Company operates its business and its cost structure. The Company does not believe its businesses have been materially adversely affected by general inflation. Quarterly Financial Data (Unaudited) Seaboard Corporation and Subsidiaries
- ---------------------------------------------------------------------------- (Thousands of dollars 1st 2nd 3rd 4th Total for except per share amounts) Quarter Quarter Quarter Quarter the Year - ---------------------------------------------------------------------------- 1995 - ---------------------------------------------------------------------------- Net sales $ 235,923 255,402 288,263 394,389 1,173,977 Operating income $ 13,689 9,112 9,496 (1,093) 31,204 Net earnings $ 8,040 6,764 7,080 (1,682) 20,202 Earnings per common share $ 5.40 4.55 4.76 (1.13) 13.58 Dividends per common share $ .25 .25 .25 .25 1.00 Market price range per common share: High $ 230 304 295 270 Low $ 159 233 241 243 3/8 ============================================================================ - ---------------------------------------------------------------------------- 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 ============================================================================ The Company's first three quarters of each fiscal year consist of three four-week periods. The fourth quarter has four four-week periods.
This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact. These statements appear in a number of places in this Report and include statements regarding the intent, belief or current expectations of the Company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the Company's financing plans, (iii) the Company's competitive position, (iv) the supply and price of feed stocks and other materials used by the Company, (v) the demand and price for the Company's products and services, or (vi) other trends affecting the Company's financial condition or results of operations. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of various factors. The accompanying information contained in this report, including without limitation the information under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Letter to Stockholders" identifies important factors which could cause such differences. 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 We have audited the accompanying consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 1995 and 1994, 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, 1995. 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 at December 31, 1995 and 1994 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1995 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 1, 1996 Seaboard Corporation and Subsidiaries Consolidated Statements of Earnings (Thousands of dollars except per share amounts)
Years ended December 31, --------------------------------------- 1995 1994 1993 ------------ ----------- ------------ Net sales $ 1,173,977 $ 983,804 $ 1,142,144 Cost of sales and operating expenses 1,003,604 824,411 1,016,647 ------------ ----------- ------------ Gross income 170,373 159,393 125,497 ------------ ----------- ------------ Selling, general and administrative expenses 139,169 112,295 104,452 ------------ ----------- ------------ Operating income 31,204 47,098 21,045 Income from foreign subsidiaries not consolidated 2,035 3,113 2,177 ------------ ----------- ------------ 33,239 50,211 23,222 ------------ ----------- ------------ Other income (expense): Interest income 11,506 9,704 7,037 Interest expense (15,686) (13,136) (7,067) Miscellaneous (440) 2,352 (529) ------------ ----------- ------------ Total other income (expense), net (4,620) (1,080) (559) ------------ ----------- ------------ Earnings before income taxes and cumulative effect of a change in accounting principle 28,619 49,131 22,663 Income tax (expense) benefit (8,417) (13,930) 2,228 ------------ ----------- ------------ Earnings before cumulative effect of a change in accounting principle 20,202 35,201 24,891 Cumulative effect of changing the accounting for income taxes -- -- 11,000 ------------ ----------- ------------ Net earnings $ 20,202 $ 35,201 $ 35,891 ============ =========== ============ Earnings per common share: Earnings before cumulative effect of a change in accounting principle $ 13.58 $ 23.67 $ 16.73 Cumulative effect of changing the accounting for income taxes -- -- 7.40 ------------ ----------- ------------ Earnings per common share $ 13.58 $ 23.67 $ 24.13 ============ =========== ============ See accompanying notes to consolidated financial statements.
Seaboard Corporation and Subsidiaries Consolidated Statements of Stockholders' Equity (Thousands of dollars except per share amounts) Years ended December 31, 1995, 1994 and 1993
Unrealized Gain (Loss) Common Treasury Additional on Debt Retained Stock Stock Capital Securities Earnings -------- -------- ----------- ---------- --------- Balances, January 1, 1993 $ 1,790 $ (302) $ 4,440 $ - $263,653 Net earnings - - - - 35,891 Dividends on common stock ($.75 per share) - - - - (1,116) ------- -------- ----------- ---------- --------- Balances, December 31, 1993 1,790 (302) 4,440 - 298,428 Capital contribution - - 8,774 - - Net unrealized loss on marketable debt securities, net of income tax benefit of $466 - - - (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 Net unrealized gain on marketable debt securities, net of income tax expense of $616 - - - 1,015 - Net earnings - - - - 20,202 Dividends on common stock ($1.00 per share) - - - - (1,487) -------- -------- ----------- --------- ---------- Balances, December 31, 1995 $ 1,790 $ (302) $ 13,214 $ 251 $350,857 ======== ======== =========== ========= ========== See accompanying notes to consolidated financial statements.
Seaboard Corporation and Subsidiaries Consolidated Balance Sheets (Thousands of dollars)
December 31, ------------------------ 1995 1994 Assets ----------- ----------- Current assets: Cash and cash equivalents $ 5,529 $ 4,773 Short-term investments 135,197 174,665 Receivables: Trade 112,038 93,216 Due from foreign subsidiaries not consolidated 7,317 6,575 Other 15,442 14,100 ----------- ----------- 134,797 113,891 Allowance for doubtful receivables (17,088) (9,196) ----------- ----------- Net receivables 117,709 104,695 Inventories 112,843 73,243 Deferred income taxes 8,231 6,914 Prepaid expenses and deposits 14,251 7,705 ----------- ----------- Total current assets 393,760 371,995 ----------- ----------- Investments in and advances to foreign subsidiaries not consolidated 26,140 30,453 ----------- ----------- Net property, plant and equipment 438,415 255,071 ----------- ----------- Other assets 19,817 17,692 ----------- ----------- Total Assets $ 878,132 $ 675,211 =========== =========== See accompanying notes to consolidated financial statements. (Thousands of dollars) December 31, ------------------------ 1995 1994 ----------- ----------- Liabilities and Stockholders' Equity Current liabilities: Notes payable $ 33,815 $ 20,576 Current maturities of long-term debt 7,011 3,408 Accounts payable 75,749 42,560 Accrued liabilities 44,001 23,976 Accrued payroll 13,416 10,023 Income taxes payable 744 11,931 ----------- ----------- Total current liabilities 174,736 112,474 ----------- ----------- Long-term debt, less current maturities 297,440 177,666 ----------- ----------- Deferred income taxes 14,569 18,810 ----------- ----------- Other liabilities 25,577 20,181 ----------- ----------- 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 13,214 Unrealized gain (loss) on debt securities, net of $150 income tax expense and a $466 income tax benefit in 1995 and 1994, respectively 251 (764) Retained earnings 350,857 332,142 ----------- ----------- Total stockholders' equity 365,810 346,080 Commitments and contingent liabilities ----------- ----------- Total Liabilities and Stockholders' Equity $ 878,132 $ 675,211 =========== ===========
Seaboard Corporation and Subsidiaries Consolidated Statements of Cash Flows (Thousands of dollars)
Years ended December 31, --------------------------------- 1995 1994 1993 --------- ---------- ---------- Cash flows from operating activities: Net earnings $ 20,202 $ 35,201 $ 35,891 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 44,944 33,403 34,429 Equity in earnings of non-consolidated foreign subsidiaries (2,035) (3,113) (1,497) Deferred income taxes (5,558) (873) (25,470) Other operating activities (3,037) 1,420 1,192 Changes in assets and liabilities (net of businesses acquired): Receivables, net of allowance (13,014) (11,981) (286) Inventories (39,600) (2,282) (196) Prepaid expenses and deposits (6,546) 669 (695) Liabilities exclusive of debt 46,889 (2,160) 11,590 --------- ---------- ---------- Net cash provided by operating activities 42,245 50,284 54,958 --------- ---------- ---------- Cash flows from investing activities: Purchase of investments (691,590) (814,399) - Proceeds from the sale of investments 423,358 602,580 - Proceeds from maturity of investments 309,331 251,826 - Net investment in short-term investments - - (101,141) Capital expenditures (229,499) (87,583) (87,328) Investments and advances to foreign subsidiaries not consolidated 6,349 1,180 1,990 Proceeds from the sale of equipment 4,711 4,547 1,924 Notes receivable 1,300 (2,655) (2,874) Acquisition of businesses (3,500) (180) (5,500) --------- ---------- ---------- Net cash used in investing activities (179,540) (44,684) (192,929) --------- ---------- ---------- Cash flows from financing activities: Notes payable to banks 13,239 4,521 11,357 Proceeds from issuance of long-term debt 142,471 12,202 126,500 Principal payments of long-term debt (19,094) (34,851) (1,498) Deferred grant revenue 3,927 8,073 - Dividends paid (1,487) (1,487) (1,116) Capital contribution - 8,774 - Bond construction fund (1,005) (5,169) - --------- ---------- ---------- Net cash provided by (used in) financing activities 138,051 (7,937) 135,243 --------- ---------- ---------- Net increase (decrease) in cash and cash equivalents 756 (2,337) (2,728) Cash and cash equivalents at beginning of year 4,773 7,110 9,838 --------- ---------- ---------- Cash and cash equivalents at end of year $ 5,529 $ 4,773 $ 7,110 ========= ========== ========== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest (net of amounts capitalized) $ 14,598 $ 13,415 $ 6,778 ========= ========== ========== Income taxes $ 25,384 $ 14,464 $ 13,058 ========= ========== ========== See accompanying notes to consolidated financial statements.
Seaboard Corporation and Subsidiaries Notes to Consolidated Financial Statements December 31, 1995, 1994 and 1993 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 which is primarily engaged in domestic poultry and pork production and processing, commodity merchandising, baking, flour milling and shipping. Overseas, the Company primarily engages in shrimp production and processing, flour milling and animal feed 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 - ---------------------- 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. 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. 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, 1995 and 1994 is $12,000,000 and $8,073,000, respectively, 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. Use of Estimates - ---------------- The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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, 1995, 1994 and 1993, 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 $28,117,000 and $6,788,000 at December 31, 1995 and 1994, 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 hyper-inflationary 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 losses for the years ended December 31, 1995, 1994 and 1993 were $226,000, $267,000 and $3,059,000, 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 enters into interest rate exchange agreements which involve the exchange of fixed-rate and variable-rate interest payments over the life of the agreements without the exchange of the underlying notional amounts. The difference to be paid or received is accrued as interest rates change and is recognized as an adjustment of interest expense. These agreements effectively convert variable-rate debt into fixed-rate debt. 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 anticipated purchase of feed grains and the sale of hogs. At December 31, 1995, the Company had net contracts to purchase 5.9 million bushels of grain and to sell 57.4 million pounds of hogs. Based upon the correlation of commodity types and contract dates with projected usage, these contracts are accounted for as hedges. Realized and unrealized gains and losses on commodity contracts designated as hedges are deferred and are ultimately recognized as part of the measurement of the hedged transactions. At December 31, 1995 the net deferred gain on commodity contracts was $4,701,000 and is included in Accrued Liabilities on the Consolidated Balance Sheet. The amount of net deferred losses on commodity contracts at December 31, 1994 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 1995, the Company acquired for $3,500,000 all the outstanding common stock of a hatchery company which previously sold day old chicks to the Company's poultry operations. 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 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. None of these acquisitions, which were accounted for as purchases, 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, 1995 and 1994, the Company had a net receivable balance from the Parent Company of $2,207,000 and $2,505,000, respectively. Interest on receivables was charged at the prime rate during 1995 and 1994. Interest charged on receivables and advances in 1993 approximated U.S. Treasury Bill rates. For the years ended December 31, 1995, 1994 and 1993 net interest income (expense) amounted to $275,000, $217,000, and $(19,000) 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, 1995: Gross Gross Unrealized Unrealized Estimated (Thousands of dollars) Amortized Holding Holding Fair Cost Gains Losses Value - ---------------------------------------------------------------------------- U.S. Treasury securities and obligations of U.S. government agencies $ 48,299 313 - 48,612 Obligations of states and political subdivisions 55,975 - - 55,975 Other debt securities 30,522 88 - 30,610 - ---------------------------------------------------------------------------- Total debt securities $ 134,796 401 - 135,197 ============================================================================
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 Holding Fair Gains Losses 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, 1995 are $6,174,000 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. The gross realized gains on sales of available-for-sale securities totaled $296,000 and $32,000 and the gross realized losses totaled $174,000 and $404,000 for the years ended December 31, 1995 and 1994, respectively.
Note 5 Inventories
- ---------------------------------------------------------------------------- A summary of inventories at the end of each year is as follows: December 31, - ---------------------------------------------------------------------------- (Thousands of dollars) 1995 1994 - ---------------------------------------------------------------------------- At lower of LIFO cost or market: Live poultry $ 26,442 $ 22,230 Dressed poultry 21,219 13,344 Feed and baking ingredients, packaging supplies and other 8,772 6,121 - ---------------------------------------------------------------------------- 56,433 41,695 LIFO allowance (6,965) (1,390) - ---------------------------------------------------------------------------- Total inventories at lower of LIFO cost or market 49,468 40,305 - ---------------------------------------------------------------------------- At lower of FIFO cost or market: Live hogs 28,626 10,122 Grain, flour and feed 19,551 7,622 Crops in production, fertilizers and pesticides 7,639 6,132 Dressed pork 166 2,523 Other 7,393 6,539 - ---------------------------------------------------------------------------- Total inventories at lower of FIFO cost or market 63,375 32,938 - ---------------------------------------------------------------------------- Total inventories $ 112,843 $ 73,243 ============================================================================ The use of the LIFO method decreased net earnings in 1995 by $3,401,000 ($2.29 per share), increased net earnings in 1994 by $1,515,000 ($1.02 per share) and decreased net earnings in 1993 by $1,806,000 ($1.21 per share). The increase in net earnings in 1994 was primarily the result of declining purchase prices. If the FIFO method had been used, inventories would have been $6,965,000 and $1,390,000 higher than those reported at December 31, 1995 and 1994, 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 1993. Sales of grain and supplies to non-consolidated foreign subsidiaries are included in consolidated net sales for the years ended December 31, 1995, 1994 and 1993, and amounted to $29,585,000, $16,255,000 and $20,126,000, respectively. Combined condensed financial information of the minority-owned non-consolidated foreign subsidiaries for their fiscal periods ended within each of the Company's years ended are as follows:
December 31 - ---------------------------------------------------------------------------- (Thousands of dollars) 1995 1994 1993 - ---------------------------------------------------------------------------- Net sales $ 139,209 $ 102,000 $ 113,743 Net earnings 3,776 9,220 7,578 Total assets 160,238 150,313 142,776 Total liabilities 91,208 82,522 84,205 Total equity $ 69,030 $ 67,791 $ 58,571 ============================================================================
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) 1995 1994 - ---------------------------------------------------------------------------- Land and improvements $ 36,799 $ 23,273 Buildings and improvements 127,405 79,222 Machinery and equipment 315,564 197,947 Transportation equipment 112,493 92,969 Office furniture and fixtures 10,547 8,558 Construction in progress 47,594 28,182 - ---------------------------------------------------------------------------- 650,402 430,151 Accumulated depreciation and amortization (211,987) (175,080) - ---------------------------------------------------------------------------- Net property, plant and equipment $ 438,415 $ 255,071 ============================================================================ Approximately $3,414,000, $335,000 and $297,000 of interest costs were capitalized as part of property, plant and equipment in the years ended December 31, 1995, 1994 and 1993, 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. Total income taxes for the years ended December 31, 1995, 1994 and 1993 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) 1995 1994 1993 - ----------------------------------------------------------------------------- % 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 $10,017 35.0% $17,196 35.0% $ 7,932 35.0% 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 (1,066) (3.7) (2,527) (5.1) (1,181) (5.2) Tax-exempt investment income (1,122) (3.9) (845) (1.7) (424) (1.6) State income taxes, net of Federal benefit 475 1.7 1,134 2.3 465 1.8 Other 113 .3 (1,028) (2.1) 54 .2 - ----------------------------------------------------------------------------- $ 8,417 29.4% $13,930 28.4% $(2,228) (9.8)% ============================================================================= The components of income tax expense for the years ended December 31, 1995, 1994 and 1993 are as follows: Years Ended December 31, - ----------------------------------------------------------------------------- (Thousands of dollars) 1995 1994 1993 - ----------------------------------------------------------------------------- Current: Federal $ 13,498 $ 12,654 $ 11,017 State and local 1,094 1,683 1,225 Deferred benefit (6,175) (407) (14,470) - ----------------------------------------------------------------------------- $ 8,417 $ 13,930 $ (2,228) =============================================================================
Components of the net deferred income tax liability at December 31, 1995 and December 31, 1994 are as follows (in thousands): December 31, December 31, 1995 1994 - ----------------------------------------------------------------------------- Deferred income tax liabilities: Cash basis farming adjustment $ 19,036 $ 19,036 Deferred earnings of foreign subsidiaries 4,133 6,839 Depreciation 8,711 2,297 Other 3,182 3,652 - ----------------------------------------------------------------------------- 35,062 31,824 - ----------------------------------------------------------------------------- Deferred income tax assets: Reserves/accruals 22,816 13,349 Foreign losses 4,089 4,171 Other 4,154 5,164 - ----------------------------------------------------------------------------- 31,059 22,684 Valuation allowance 2,335 2,756 - ----------------------------------------------------------------------------- Net deferred income tax liability $ 6,338 $ 11,896 ============================================================================= The valuation allowance required under SFAS No. 109 represents accumulated losses on certain foreign subsidiaries that will not be recognized without future liquidation or sale of these subsidiaries. At December 31, 1995 and 1994, 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 $21,500,000. Note 9 Notes Payable and Long-Term Debt - ----------------------------------------------------------------------------- Notes payable amounting to $33.8 million and $20.6 million at December 31, 1995 and 1994, 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 million. Subsequent to year-end, the Company entered into a $75 million one-year revolving credit facility and a five-year $50 million revolving credit facility with a group of banks. Certain of the short-term uncommitted credit lines will no longer be maintained. Utilization of the five-year revolving credit facility is limited by existing debt covenants. Weighted average interest rates on the notes payable were 6.22% and 6.60% at December 31, 1995 and 1994, 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) 1995 1994 - ----------------------------------------------------------------------------- Private placements: 6.49% senior notes, due 2001 through 2005 $ 100,000 $ 100,000 7.88% senior notes, due 2003 through 2007 125,000 _ Industrial Development Revenue Bonds (IDRB's), floating rates (5.50% - 6.13% at December 31, 1995) due through 2023 52,900 40,000 Bank notes, 6.43% floating, due 1997 10,000 27,365 Term loan, 3%, due 1996 6,000 6,000 Capital lease obligations and other 10,551 7,709 - ----------------------------------------------------------------------------- 304,451 181,074 Current maturities of long-term debt (7,011) (3,408) - ----------------------------------------------------------------------------- Long-term debt, less current maturities $ 297,440 $ 177,666 =============================================================================
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 1998, 1999, 2000 and 2001, the years in which the bank letters of credit and committed extensions thereto expire. Poultry processing facilities, having a depreciated cost of $23,279,000 at December 31, 1995, secure certain 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 $250,000,000. The Company is in compliance with all restrictive debt covenants relating to the Senior Notes and IDRB's as of December 31, 1995. During 1995, the Company entered into interest rate exchange agreements with a bank to limit its exposure to the interest rate volatility of its variable rate debt. The agreements involve transactions with notional amounts of $100,000,000 at December 31, 1995. The agreements have maturity dates of ten years from the date of the initial execution and results in a weighted average fixed interest rate of 6.28% at December 31, 1995 on an equivalent amount of the Company's variable rate debt. The Company monitors the risk of default by the counterparty and does not anticipate nonperformance. The fair values of the interest exchange agreements are obtained from dealer quotes. These values represent the estimated amount the Company would receive or pay to terminate the agreements, taking into consideration current interest rates and the creditworthiness of the counterparty. The Company would have been required to pay an estimated $2,566,000 to terminate the interest rate exchange agreements at December 31, 1995. Subsequent to December 31, 1995, the Company terminated the interest rate exchange agreements. The resulting loss was not material. Annual maturities of long-term debt at December 31, 1995 are as follows: $7,011,000 in 1996, $10,811,000 in 1997, $13,164,000 in 1998, $22,426,000 in 1999, $311,000 in 2000, and $250,728,000 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, 1995 and 1994 the fair value of the Company's short-term investments was $135,197,000 and $174,665,000, respectively, with an amortized cost of $134,796,000 and $175,895,000 at December 31, 1995 and 1994, respectively. The fair value of long-term debt is determined by comparing interest rates for debt with similar terms and maturities. At December 31, 1995 and 1994 the fair value of the Company's long-term debt was $310,499,000 and $166,382,000, respectively, with a carrying value of $304,451,000 and $181,074,000 at December 31, 1995 and 1994, 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) 1995 1994 1993 - ----------------------------------------------------------------------------- Service cost-benefits earned during the period $ 1,303 $ 1,532 $ 2,678 Interest cost on projected benefit obligation 2,233 2,132 1,650 Actual return on assets (3,964) (667) (1,714) Net amortization and deferral 1,916 (1,281) 540 - ---------------------------------------------------------------------------- Net periodic pension cost $ 1,488 $ 1,716 $ 3,154 ============================================================================
Assumptions used in determining pension information were:
Years ended December 31, - ---------------------------------------------------------------------------- 1995 1994 1993 - ---------------------------------------------------------------------------- Expected long-term rate of return on assets 8.50% 7.50% 8.00% Discount rate 7.00% 8.75% 7.25% Long-term rate of increase in compensation levels 4.50% 5.00% 5.00% - ---------------------------------------------------------------------------- The funded status and accrued pension cost at December 31, 1995 and 1994 for all defined benefit plans is shown below: December 31, - ---------------------------------------------------------------------------- (Thousands of dollars) 1995 1994 - ---------------------------------------------------------------------------- Actuarial present value of benefit obligations: Vested benefit obligation $ 27,897 $ 25,198 Nonvested benefit obligation 1,542 1,193 - ---------------------------------------------------------------------------- Accumulated benefit obligation 29,439 26,391 Effects of projected future compensation levels 4,178 1,647 - ---------------------------------------------------------------------------- Projected benefit obligation 33,617 28,038 Plan assets at fair value 25,845 26,265 - ---------------------------------------------------------------------------- Projected benefit obligation in excess of plan assets 7,772 1,773 Recognized minimum liability 1,184 _ Unrecognized net liability at transition (1,542) (1,710) Unrecognized net gain (loss) (587) 4,953 - ---------------------------------------------------------------------------- Accrued pension cost $ 6,827 $ 5,016 - ----------------------------------------------------------------------------
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 Company has non-qualified unfunded supplemental retirement plans for certain executive employees. Pension expense for these plans was $3,073,000, $2,760,000 and $216,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Included in Other Liabilities at December 31, 1995 and 1994 is $9,064,000 and $6,698,000, 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 $1,265,000, $1,051,000 and $1,096,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Note 12 Commitments and Contingencies - ---------------------------------------------------------------------------- The Company leases various ships, facilities and equipment under noncancelable operating lease agreements. Rental expense for the operating leases amounted to $40,521,000, $34,457,000 and $27,582,000 in 1995, 1994 and 1993, respectively. Minimum lease commitments under noncancelable leases with initial terms greater than one year at December 31, 1995, were $30,424,000 for 1996, $22,057,000 for 1997, $16,341,000 for 1998, $6,257,000 for 1999, $5,068,000 for 2000 and $4,890,000 thereafter. It is expected that, in the ordinary course of business, leases will be renewed or replaced. The Company is a defendant in a pending arbitration proceeding in the matter of a chartered barge and tug which were damaged after delivering cargo. No demand for any specific dollar amount has been made, although the plaintiff's insurance company's declaratory judgment action references a claim of $15 million. While the ultimate outcome is not presently determinable, management, after investigation of the facts and discussions with legal counsel, does not believe that the Company has any liability. A lawsuit alleging damages of approximately $12.5 million has been brought by a private individual against the Company's Honduran subsidiary engaging in shrimp production. The individual alleges that a previous owner of the shares of stock of the Company's Honduran subsidiary fraudulently transferred his shares without his knowledge. The Departmental First Court in Honduras has dismissed the case and it is now pending on appeal to the appellate court. Management, after discussion with Honduran legal counsel, does not believe the Company's Honduran subsidiary has any liability. The Company is subject to various other 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 three business segments: food production and processing, commodity trading 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. The Company has reclassified its business segments in 1995 to reflect the increased commodity trading activity during the current year. The amounts presented for 1994 and 1993 have been restated in order to conform with the 1995 presentation. Business segment information for the years ended December 31, 1995, 1994 and 1993 is as follows:
- ------------------------------------------------------------------------------------------------------------------- (Thousands of dollars) 1995 - ------------------------------------------------------------------------------------------------------------------- Food Unallocated Production Corporate and Commodity Items and Processing Trading Transportation Other Eliminations Total - ------------------------------------------------------------------------------------------------------------------- Sales to unaffiliated customers $ 652,537 207,987 277,130 36,323 -- 1,173,977 Intersegment sales -- -- 4,676 -- (4,676) -- - ------------------------------------------------------------------------------------------------------------------- Net sales $ 652,537 207,987 281,806 36,323 (4,676) 1,173,977 =================================================================================================================== Operating income (loss) $ 10,121 8,462 16,936 980 (5,295) 31,204 =================================================================================================== Income from foreign subsidiaries not consolidated 2,035 Interest income 11,506 Interest expense (15,686) Other corporate expense (440) - ------------------------------------------------------------------------------------------------------------------- Earnings before income taxes $ 28,619 =================================================================================================================== Identifiable assets $ 471,120 59,460 120,435 25,153 -- 676,168 =================================================================================================== Corporate assets 201,964 - ------------------------------------------------------------------------------------------------------------------- Total assets $ 878,132 =================================================================================================================== Depreciation and amortization $ 25,746 2,941 13,711 1,521 1,025 44,944 =================================================================================================================== Capital expenditures (excluding acquisitions) $ 192,246 1,228 34,136 965 924 229,499 =================================================================================================================== - ------------------------------------------------------------------------------------------------------------------- (Thousands of dollars) 1994 - ------------------------------------------------------------------------------------------------------------------- Food Unallocated Production Corporate and Commodity Items and Processing Trading Transportation Other Eliminations Total - ------------------------------------------------------------------------------------------------------------------- Sales to unaffiliated customers $ 638,251 107,399 210,632 27,522 -- 983,804 Intersegment sales -- -- 6,372 -- (6,372) -- - ------------------------------------------------------------------------------------------------------------------- Net sales $ 638,251 107,399 217,004 27,522 (6,372) 983,804 =================================================================================================================== Operating income (loss) $ 10,663 8,620 29,195 2,895 (4,275) 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 $ 274,673 42,634 86,928 28,580 -- 432,815 =================================================================================================== Corporate assets 242,396 - ------------------------------------------------------------------------------------------------------------------- Total assets $ 675,211 =================================================================================================================== Depreciation and amortization $ 20,200 2,923 7,925 1,466 889 33,403 =================================================================================================================== Capital expenditures (excluding acquisitions) $ 61,917 688 23,107 635 1,236 87,583 =================================================================================================================== - ------------------------------------------------------------------------------------------------------------------- 1993 - ------------------------------------------------------------------------------------------------------------------- Food Unallocated Production Corporate and Commodity Items and Processing Trading Transportation Other Eliminations Total - ------------------------------------------------------------------------------------------------------------------- Sales to unaffiliated customers $ 786,276 167,581 169,035 19,252 _ 1,142,144 Intersegment sales -- 4,870 8,923 -- (13,793) -- - ------------------------------------------------------------------------------------------------------------------- Net sales $ 786,276 172,451 177,958 19,252 (13,793) 1,142,144 =================================================================================================================== Operating income (loss) $ (2,516) 6,876 21,887 (390) (4,812) 21,045 =================================================================================================== Income from foreign subsidiaries not consolidated 2,177 Interest income 7,037 Interest expense (7,067) Other corporate income (529) - ------------------------------------------------------------------------------------------------------------------- Earnings before income taxes and cumulative effect of a change in accounting principle $ 22,663 =================================================================================================================== Identifiable assets $ 234,411 55,758 69,626 23,893 -- 383,688 =================================================================================================== Corporate assets 263,644 - ------------------------------------------------------------------------------------------------------------------- Total assets $ 647,332 =================================================================================================================== Depreciation and amortization $ 19,960 5,230 7,056 1,450 733 34,429 =================================================================================================================== Capital expenditures (excluding acquisitions) $ 44,422 6,964 35,020 47 875 87,328 ===================================================================================================================
Export sales by geographic area are as follows:
Years ended December 31, - --------------------------------------------------------------------------------- (Thousands of dollars) 1995 1994 1993 - --------------------------------------------------------------------------------- Africa $ 85,915 $ 50,900 $ 67,260 Caribbean and South America 43,394 36,525 31,340 Eastern Mediterranean 57,140 -- -- Other 36,597 17,779 26,059 - --------------------------------------------------------------------------------- Total export sales $ 223,046 $ 105,204 $ 124,659 ================================================================================= At December 31, 1995 and 1994 the Company had approximately $47.1 million and $18.8 million of foreign receivables 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, 1991 1992 1993 1994 1995 - ----------------------------------------------------------------------------------------------------- Summary of Selected Financial Data: TOTAL ASSETS (THOUSANDS OF DOLLARS) $458,045 485,121 647,332 675,211 878,132 STOCKHOLDERS' EQUITY (THOUSANDS OF DOLLARS) $239,250 269,581 304,356 346,080 365,810 EARNINGS BEFORE CUMULATIVE EFFECT OF CHANGING THE ACCOUNTING FOR INCOME TAXES $ 14.28 20.89 16.73 23.67 13.58 CUMULATIVE EFFECT OF CHANGING THE ACCOUNTING FOR INCOME TAXES 7.40 ------------------------------------------------------------ EARNINGS PER COMMON SHARE (DOLLARS) $ 14.28 20.89 24.13 23.67 13.58 Selected Financial Data: CURRENT RATIO 2.82:1 3.22:1 3.29:1 3.31:1 2.25:1 CAPITAL EXPENDITURES (THOUSANDS OF DOLLARS) $ 20,240 35,286 87,328 87,583 229,499 NET SALES (THOUSANDS OF DOLLARS) $875,874 1,053,655 1,142,144 983,804 1,173,977 WORKING CAPITAL (THOUSANDS OF DOLLARS) $183,825 209,811 280,466 259,521 219,024 DEPRECIATION AND AMORTIZATION (THOUSANDS OF DOLLARS) $ 26,082 29,601 34,429 33,403 44,944 NET EARNINGS(THOUSANDS OF DOLLARS) $ 21,241 31,075 35,891 35,201 20,202
EX-21 3 LIST OF SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES NAMES UNDER STATE OR OTHER OF THE WHICH SUBSIDIARIES JURISDICTION REGISTRANT DO BUSINESS OF 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 Company, PLC Same Zaire African Dahlia Shipping Ltd. Same Liberia African Evergreen Shipping Ltd. Same Liberia African Fern Shipping Ltd. Same Liberia African Gardenia Shipping Ltd. Same Liberia African Hyacinth Shipping Ltd. Same Liberia Agencia Maritima del Istmo, S.A. Same Costa Rica Agencias Generales Conaven, C.A. Same Venezuela Agro Internacional de Honduras, S.A. de C.V. Same Honduras Almacenadora Conaven, S.A. Same Venezuela Atlantic Salmon (Maine) Limited Same Maine Liability Company Buttercup Shipping Limited Same Liberia Cape Fear Railways, Inc. Same North Carolina Cayman Freight Shipping Same Cayman Island Services, Ltd. Chestnut Hill Farms, Inc. Same Florida Chestnut Hill Farms Honduras, Same Honduras S.A. de C.V. Chestnut Hill Farms de Venezuela, Same Venezuela S.A. Consorcio Naviero de Conaven Venezuela Occidente, C.A. Continental de Ventas y Mercadeo S.A. Contiventas, S.A. Ecuador Cultivos Marinos, S.A. de C.V. CUMAR Honduras 16 EXHIBIT 21 (continued) Delta Packaging Company Ltd. Same Nigeria Desarrollo Industrial Bioacuatico, S.A. DIBSA Ecuador Empacadora Litoral, S.A. de C.V. Same Honduras Energy System Management, Ltd. Same British Virgin Islands Granjas Porcinas del Ecuador Granporsa Ecuador (Granporsa) S.A. H& O Shipping Limited Same Liberia H.F.P. Engineering (Nigeria) Limited Same Nigeria Harinas de Puerto Rico, Inc. Same Delaware Holsum Bakers of Puerto Rico Same Division of Seaboard Corporation Interamericana de Tejidos, C.A. Same Ecuador Inversiones y Servicios Diversos, Inversa Guatemala S.A. Life Flour Mill Ltd. Same Nigeria Minoterie De Matadi, S.A.R.L. Same Zaire Molinos Champion, S.A. Mochasa Ecuador Molinos del Ecuador, C.A. Molidor Ecuador National Milling Company of Guyana, Ltd. Same Guyana Port of Miami Cold Storage, Inc. Same Florida Representaciones Maritimas y Aereas, S.A. Remarsa Guatemala SASCO Engineering Co./ Same U.S. Virgin Seaboard Sales Corporation Islands Sandy Isle Food Imports, N.V. Same St. Maarten, Netherlands, Antilles Sea Cargo, S.A. Same Panama Seaboard Atlantic Trading, Inc. Same Panama Seaboard Bakeries, Inc. Same Delaware Seaboard Export Corporation Same Delaware 17 EXHIBIT 21 (continued) Seaboard Express Ltd. Same Bermuda Seaboard de Colombia, S.A. Same Colombia Seaboard de Honduras, S.A. de C.V. Same Honduras Seaboard de Peru Same Peru Seaboard Farms of Athens, Inc. Seaboard Farms of Athens, Georgia Inc. Jordan Hatchery Seaboard Farms of Same Tennessee Chattanooga, Inc. Seaboard Farms of Seaboard Farms of Georgia Elberton, Inc. Elberton, Inc. Seaboard Farms of Canton Seaboard Farms of Kentucky, Inc. Same Kentucky Seaboard Farms of Minnesota, Inc. Same Minnesota Seaboard Farms of Orlando, Inc. Same Florida Seaboard Farms, Inc. Same Oklahoma Seaboard Holdings Ltd. Same British Virgin Islands Seaboard Intrepid, Ltd. Same Bermuda Seaboard Marine Bahamas, Ltd. Same Bahamas Seaboard Marine Ltd. Same Liberia Seaboard Marine of Florida, Inc. Same Florida Seaboard (Nigeria) Limited Same Nigeria Seaboard Overseas Limited Same Bahamas S.B.D., Inc. Same Delaware Seaboard Ship Management Inc. Same Florida Seaboard Shipping Services (PTY) Ltd. Same South Africa Seaboard Star Ltd. Same Bermuda Seaboard Trading and Shipping Ltd. Same Minnesota Seaboard Trading de Mexico, Same Mexico S.A. de C.V. Seaboard Transportation Company Same Oklahoma 18 EXHIBIT 21 (continued) Seaboard Voyager Ltd. Same Bermuda Seaboard West Africa Limited Same Sierra Leone Seadom, S.A. Same Dominican Republic Secuador Limited Same Bermuda Shilton Limited Same Grand Cayman Island Top Feeds Limited Same Nigeria Transcontinental Capital Corp. Same Bermuda (Bermuda) Ltd. Zenith Investments, Ltd. Same Nigeria 19 EX-27 4 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FISCAL 1995 ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 5529 135197 117709 17088 112843 393760 650404 211989 878132 174736 297440 0 0 1488 364322 878132 1173977 1173977 1003604 1003604 139169 10554 15686 28619 8417 20202 0 0 0 20202 13.58 13.58
EX-10 5 AMENDMENT TO EXECUTIVE RETIREMENT PLAN EXHIBIT 10.6 FIRST AMENDMENT TO SEABOARD CORPORATION EXECUTIVE RETIREMENT PLAN This First Amendment to Seaboard Corporation Executive Retirement Plan is adopted effective January 1, 1996 (for benefits earned during the calendar year 1995), amending the Seaboard Corporation Executive Retirement Plan (the "Plan") as follows: 1. Section 5.2 Restatement. Section 5.2 of the Plan is hereby amended and restated to read as follows: Section 5.2. Cash Option. In lieu of receiving an annuity contract as provided in Section 5.1 above, Participants shall have the right to elect to receive an amount, in cash, equal to the amount which would have been expended by the Company to purchase an annuity as provided in Section 5.1 above. The Committee shall establish procedures for making such election. Any employee making an election for a cash payment for the first time as provided hereunder shall be required to participate in one of the retirement planning sessions to be offered by the Committee to Participants pursuant to Section 5.5 below. 2. Amendment to Section 5.3. Section 5.3 of the Plan is hereby amended to add the following underlined provisions to such Section: Section 5.3. Income Tax Considerations. In addition to the purchase of the annuity contract for the benefit of Participants pursuant to Section 5.1 above or the payment of cash as provided in Section 5.2 above, the Company shall pay to each Participant (which amount will be withheld and paid to the appropriate taxing authorities) the amount of income taxes (both state and federal) which the Committee estimates the Participant will pay on account of the receipt of such annuity contract or cash (the "Gross-Up"). The determination by the Committee as to the amount of the Gross-Up shall be final and conclusive and the Company shall not have any liability to the Participants, even if the assumptions as to income tax rates are not accurate. 3. New Section 5.5. The Plan is hereby amended to add the following new Section 5.5 to the Plan: Section 5.5. Retirement Planning Session. The Committee shall make available to Participants from time to time, but no less than once every five years, the ability to obtain, free of charge to each Participant, retirement planning and advice from Merrill Lynch or other comparable investment advisory company. 4. Plan Continues in Effect. The Plan shall continue in full force and effect unmodified, except as set forth in this First Amendment. IN WITNESS WHEREOF, the Company has caused this First Amendment to Seaboard Corporation Executive Retirement Plan to be executed as of this 31st day of December, 1995, by its duly authorized agent. SEABOARD CORPORATION By Rick Hoffman Vice President C:\OFFICE\WPWIN\WPDOCS\FIRSTAMD.RET -----END PRIVACY-ENHANCED MESSAGE-----