Stockholders' Equity and Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 29, 2014

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 8 – Stockholders’ Equity and Accumulated Other Comprehensive Loss

On November 1, 2013, Seaboard’s Board of Directors authorized an additional $75,000,000 for use in purchasing Seaboard’s Common Stock pursuant to Seaboard’s share repurchase program initially approved in November 2009, and which previously had $100,000,000 of authority. As of March 29, 2014, $80,223,000 remained available for repurchases under this program.  For the three months ended March 29, 2014, Seaboard repurchased 1,667 shares of common stock at a total cost of $4,404,000.  The share repurchase program is in effect through October 31, 2015.  Under this share repurchase program, Seaboard is authorized to repurchase its Common Stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard.  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.

In December 2012, Seaboard declared and paid a dividend of $12.00 per share on the common stock.  The increased amount of the dividend (which has historically been $0.75 per share on a quarterly basis or $3.00 per share on an annual basis) represented a prepayment of the annual 2013, 2014, 2015 and 2016 dividends ($3.00 per share per year).  Seaboard did not declare or pay a dividend in 2013. Seaboard does not currently intend to declare any further dividends for the years 2014-2016.

The components of and changes in accumulated other comprehensive loss, net of tax, for the three months ended March 29, 2014 are as follows:

	Cumulative
	Foreign		Unrealized			Unrealized
	Currency		Gain			Gain (Loss)			Unrecognized
	Translation		on			on Cash Flow			Pension
(Thousands of dollars)	Adjustment		Investments			Hedges			Cost		Total
Balance December 31, 2013	$  (155,413	)	$	481		$	(113	)	$  (26,752	)	$(181,797	)
Other comprehensive income (loss) before reclassifications	(26,775	)	15			361			-		(26,399	)
Amounts reclassified from accumulated other comprehensive loss	-		511		(1)	-			320	(2)	831
Net current-period other comprehensive income (loss)	(26,775	)	526			361			320		(25,568	)
Balance March 29, 2014	$   (182,188	)	$	1,007		$	248		$  (26,432	)	$(207,365	)

(1) This represents realized gains on the sale of available-for-sale securities and was recorded in other investment income, net.

(2) This primarily represents the amortization of actuarial losses that are included in net periodic pension cost and are recorded in operating income.  See Note 6 for further discussion.

The components of and changes in accumulated other comprehensive loss, net of tax, for the three months ended March 30, 2013 are as follows:

	Cumulative
	Foreign		Unrealized			Unrealized
	Currency		Gain (Loss)			Loss on			Unrecognized
	Translation		on			Cash Flow			Pension
(Thousands of dollars)	Adjustment		Investments			Hedges			Cost		Total
Balance December 31, 2012	$  (109,457	)	$	2,232		$	(113	)	$  (64,206	)	$(171,544	)
Other comprehensive income (loss) before reclassifications	(6,122	)	639			-			-		(5,483	)
Amounts reclassified from accumulated other comprehensive loss	-		(210		)(1)	-			1,192	(2)	982
Net current-period other comprehensive income (loss)	(6,122	)	429			-			1,192		(4,501	)
Balance March 30, 2013	$   (115,579	)	$	2,661		$	(113	)	$  (63,014	)	$(176,045	)

(1) This represents realized gains on the sale of available-for-sale securities and are recorded in other investment income, net.

(2) This primarily represents the amortization of actuarial losses that are included in net periodic pension cost and are recorded in operating income.  See Note 6 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 March 29, 2014, the Sugar segment had $123,479,000 in net assets denominated in Argentine pesos and $1,587,000 in net liabilities denominated in U.S. dollars.  Management anticipates that the Argentine peso may continue to weaken against the U.S. dollar and thus it is anticipated that Seaboard could incur additional foreign currency translation adjustment losses in other comprehensive loss during the remainder of 2014.

At March 29, 2014 and March 30, 2013, income taxes for cumulative foreign currency translation adjustments were recorded using a 35% effective tax rate except for $49,411,000 and $4,018,000, respectively, related to certain subsidiaries for which no tax benefit was recorded. At March 29, 2014 and March 30, 2013, income taxes for all other components of accumulated other comprehensive loss were recorded using a 39% effective rate except for unrecognized pension cost of $8,580,000 and $20,737,000, respectively, related to employees at certain subsidiaries for which no tax benefit has been recorded.