Stockholders' Equity and Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2015

Stockholders' Equity and Accumulated Other Comprehensive Loss

Stockholders' Equity and Accumulated Other Comprehensive Loss

Note 11

Stockholders’ Equity and Accumulated Other Comprehensive Loss

In October 2015, the Board of Directors extended through October 31, 2017 the share repurchase program initially approved in November 2009, and increased the authorized amount of repurchases from the $51 million that remained available to $100 million. As of December 31, 2015,  $100 million remained available for repurchases under this program. Seaboard did not repurchase any shares of common stock during 2015. In May 2014, the Board of Directors increased the dollar amount of Seaboard common stock authorized to be repurchased under the share repurchase program by $20 million, and Seaboard commenced a tender offer to repurchase shares. On June 19, 2014, Seaboard completed the tender offer, pursuant to which it repurchased 16,738 shares of common stock at a price per share of $2,950, for a total cost of $49million. Seaboard used cash to repurchase 18,405 and 8,705 shares of common stock at a total price of $53 million and $24million in2014 and 2013,respectively.

Under this share repurchase program, Seaboard is authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. All stock repurchased will be made in compliance with applicable legal requirements and funded by cash on hand. The timing of the repurchases and the number of shares repurchased at any given time will depend upon market conditions, compliance with Securities and Exchange Commission regulations, and other factors. The Board of Directors’ stock repurchase authorization does not obligate Seaboard to acquire a specific amount of common stock, and the stock repurchase program may be suspended at any time at Seaboard’s discretion.Shares repurchased will be retired and resume the status of authorized and unissued shares.

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 2015, 2014 and 2013, and does not currently intend to declare any further dividends for 2016.

The components of accumulated other comprehensive loss, net of related taxes, for 2013,  2014 and 2015 are as follows:

	Cumulative
	Foreign		Unrealized
	Currency		Gain (Loss)		Unrecognized
	Translation		on		Pension
(Millions of dollars)	Adjustment		Investments		Cost			Total
Balance December 31, 2013	$	(155)	$	—	$	(27)		$	(182)
Other comprehensive income (loss) before reclassifications		(39)		1		(35)			(73)
Amounts reclassified from accumulated other comprehensive loss to net earnings		—		—		2	(1)		2
Other comprehensive income (loss), net of tax		(39)		1		(33)			(71)
Balance December 31, 2014	$	(194)	$	1	$	(60)		$	(253)
Other comprehensive income (loss) before reclassifications		(34)		—		5			(29)
Amounts reclassified from accumulated other comprehensive income loss to net earnings		—		—		4	(1)		4
Other comprehensive income (loss), net of tax		(34)		—		9			(25)
Balance December 31, 2015	$	(228)	$	1	$	(51)		$	(278)

(1)  This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and was recorded in operating income. See Note 9 for further discussion.

In 2013, Seaboard recognized a one-time retirement agreement termination gain of $1million, net of tax, in unrecognized pension cost in other comprehensive income. See Note 9 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 December 31, 2015, the Sugar segment had $96 million in net assets denominated in Argentine pesos and $1 million in net assets denominated in U.S. dollars in Argentina. At December 31, 2014, the Sugar segment had $122 million in net assets denominated in Argentine pesos and $1 million in net assets denominated in U.S. dollars in Argentina. Seaboard accounts for its Sugar segment on a one month lag basis. Based on the devaluation of the Argentine peso in December 2015, management anticipates that the Argentine peso will continue to weaken against the U.S. dollar, and thus it is anticipated that Seaboard will incur additional foreign currency translation adjustment losses in other comprehensive loss in 2016. Using the prevailing official exchange rate compared to the net assets denominated in Argentine pesos at January 31, 2016, Seaboard would recognize an additional $16 million of other comprehensive loss, net of related taxes, during the first quarter of 2016. Impacts of further fluctuations in the currency exchange rate will be recorded in future periods.

Income taxes for cumulative foreign currency translation adjustments were recorded using a 35% effective tax rate except for $82million and $56 million in 2015 and 2014, respectively, related to certain subsidiaries for which no tax benefit was recorded. Income taxes for all other components of accumulated other comprehensive loss were recorded using a 39% effective rate except for unrecognized pension cost of $18million and $20million in 2015 and 2014, respectively, related to employees at certain subsidiaries for which no tax benefit was recorded.