Stockholders' Equity and Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 29, 2012

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 8 – Stockholders’ Equity and Accumulated Other Comprehensive Loss

The components of and changes in accumulated other comprehensive loss for the nine months ended September 29, 2012 are as follows:

	Balance						Balance
	December 31,			Period			September 29,
(Thousands of dollars)	2011			Change			2012
Cumulative foreign currency translation adjustment	$	(93,669	)	$	(9,164	)	$	(102,833	)
Unrealized gain (loss) on investments	(311		)	2,775			2,464
Unrealized loss on cash flow hedges	-			(91		)	(91		)
Unrecognized pension cost	(62,085		)	4,455			(57,630		)
Accumulated other comprehensive loss	$	(156,065	)	$	(2,025	)	$	(158,090	)

During the second quarter of 2012, a pension settlement loss of $1,796,000 was recorded in the Pork division’s results of operations.  This resulted in $1,796,000 reclassified out of accumulated other comprehensive loss to earnings.  See Note 6 to the Condensed Consolidated Financial Statements for further discussion.

The foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar segment.  At September 29, 2012, the Sugar segment had $211,510,000 in net assets denominated in Argentine pesos and $5,293,000 in net assets denominated in U.S. dollars.

With the exception of the foreign currency translation adjustment to which a 35 percent federal tax rate is applied, income taxes for components of accumulated other comprehensive loss were recorded using a 39 percent effective tax rate.  In addition, the unrecognized pension cost includes $19,496,000 related to employees at certain subsidiaries for which no tax benefit has been recorded.

On October 19, 2012, the Board of Directors extended through October 31, 2015 the share repurchase program initially approved on November 6, 2009. Under this share repurchase program, Seaboard was originally authorized to repurchase from time to time up to $100,000,000 market value of its Common Stock in open market or privately negotiated purchases which may be above or below the traded market price.  As of September 29, 2012, $41,842,000 remained available for repurchases under this program.  During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. The stock repurchase will be funded by cash on hand.  Shares repurchased will be retired and resume the status of authorized and unissued shares.  All stock repurchased will be made in compliance with applicable legal requirements and the timing of the repurchases and the number of shares repurchased at any given time will depend upon market conditions, compliance with Securities and Exchange Commission regulations and other factors.  The Board’s stock repurchase authorization does not obligate Seaboard to acquire a specific amount of common stock and the stock repurchase program may be suspended at any time at Seaboard’s discretion. For the nine months ended September 29, 2012, Seaboard repurchased 9,175 shares of common stock at a total cost of $18,193,000.

There was a prepayment of the annual 2011 and 2012 dividends in December 2010.  Seaboard is currently evaluating whether to declare and prepay a dividend in December 2012 for 2013 or more future years. No assurance can be given as to whether or when any dividend would be declared and paid, or as to the amount of any dividend.