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
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(Exact name of registrant as specified in its charter)
Delaware 04-2260388
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9000 W. 67th Street, Shawnee Mission, Kansas 66202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 676-8800
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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
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(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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
<TABLE>
SEABOARD CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In Thousands)
<CAPTION>
Balance at Write-offs Balance
beginning Provision net of at end
of year (1) recoveries of year
---------- --------- ---------- -------
<S> <C> <C> <C> <C>
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.
</TABLE>
<TABLE>
Summary of Selected Financial Data
Seaboard Corporation and Subsidiaries
<CAPTION>
- -----------------------------------------------------------------------------------------------
(Thousands of dollars except per share amounts) Years ended December 31,
- -----------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
===============================================================================================
<FN>
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.
</TABLE>
(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
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
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.
</TABLE>
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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 652.5 638.3 786.3
Operating income $ 10.1 10.7 (2.5)
- -----------------------------------------------------------------------------
</TABLE>
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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 208.0 107.4 167.6
Operating income $ 8.5 8.6 6.9
- -----------------------------------------------------------------------------
</TABLE>
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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 277.1 210.6 169.0
Operating income $ 16.9 29.2 21.9
- -----------------------------------------------------------------------------
</TABLE>
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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 36.4 27.5 19.3
Operating income $ 1.0 2.9 (0.4)
- -----------------------------------------------------------------------------
</TABLE>
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.
<TABLE>
Quarterly Financial Data
(Unaudited)
Seaboard Corporation and Subsidiaries
<CAPTION>
- ----------------------------------------------------------------------------
(Thousands of dollars 1st 2nd 3rd 4th Total for
except per share amounts) Quarter Quarter Quarter Quarter the Year
- ----------------------------------------------------------------------------
1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
============================================================================
<CAPTION>
- ----------------------------------------------------------------------------
1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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.
</TABLE>
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
<TABLE>
Seaboard Corporation and Subsidiaries
Consolidated Statements of Earnings
(Thousands of dollars except per share amounts)
<CAPTION>
Years ended December 31,
---------------------------------------
1995 1994 1993
------------ ----------- ------------
<S> <C> <C> <C>
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
============ =========== ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
Seaboard Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity
(Thousands of dollars except per share amounts)
Years ended December 31, 1995, 1994 and 1993
<CAPTION>
Unrealized
Gain (Loss)
Common Treasury Additional on Debt Retained
Stock Stock Capital Securities Earnings
-------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
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
======== ======== =========== ========= ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
Seaboard Corporation and Subsidiaries
Consolidated Balance Sheets
(Thousands of dollars)
<CAPTION>
December 31,
------------------------
1995 1994
Assets ----------- -----------
<S> <C> <C>
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
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
<CAPTION>
(Thousands of dollars)
December 31,
------------------------
1995 1994
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
<TABLE>
Seaboard Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Thousands of dollars)
<CAPTION>
Years ended December 31,
---------------------------------
1995 1994 1993
--------- ---------- ----------
<S> <C> <C> <C>
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
========= ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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.
<TABLE>
Note 4
Short-Term Investments
<CAPTION>
- ----------------------------------------------------------------------------
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
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
============================================================================
<FN>
</TABLE>
<TABLE>
<CAPTION>
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
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
============================================================================
<FN>
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.
</TABLE>
<TABLE>
Note 5
Inventories
<CAPTION>
- ----------------------------------------------------------------------------
A summary of inventories at the end of each year is as follows:
December 31,
- ----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
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
============================================================================
<FN>
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.
</TABLE>
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:
<TABLE>
<CAPTION>
December 31
- ----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
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
============================================================================
</TABLE>
<TABLE>
Note 7
<CAPTION>
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
- ----------------------------------------------------------------------------
<S> <C> <C>
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
============================================================================
<FN>
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.
</TABLE>
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:
<TABLE>
<CAPTION>
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
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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)%
=============================================================================
<FN>
The components of income tax expense for the years ended December 31, 1995,
1994 and 1993 are as follows:
<CAPTION>
Years Ended December 31,
- -----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
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)
=============================================================================
</TABLE>
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:
<TABLE>
<CAPTION>
December 31,
- -----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994
- -----------------------------------------------------------------------------
<S> <C> <C>
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
=============================================================================
</TABLE>
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:
<TABLE>
<CAPTION>
Years ended December 31,
- -----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
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
============================================================================
</TABLE>
<TABLE>
Assumptions used in determining pension information were:
<CAPTION>
Years ended December 31,
- ----------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
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%
- ----------------------------------------------------------------------------
<FN>
The funded status and accrued pension cost at December 31, 1995 and
1994 for all defined benefit plans is shown below:
<CAPTION>
December 31,
- ----------------------------------------------------------------------------
(Thousands of dollars) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
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
- ----------------------------------------------------------------------------
</TABLE>
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:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
(Thousands of dollars) 1995
- -------------------------------------------------------------------------------------------------------------------
Food Unallocated
Production Corporate
and Commodity Items and
Processing Trading Transportation Other Eliminations Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
===================================================================================================================
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
(Thousands of dollars) 1994
- -------------------------------------------------------------------------------------------------------------------
Food Unallocated
Production Corporate
and Commodity Items and
Processing Trading Transportation Other Eliminations Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
===================================================================================================================
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
1993
- -------------------------------------------------------------------------------------------------------------------
Food Unallocated
Production Corporate
and Commodity Items and
Processing Trading Transportation Other Eliminations Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
===================================================================================================================
</TABLE>
<TABLE>
Export sales by geographic area are as follows:
<CAPTION>
Years ended December 31,
- ---------------------------------------------------------------------------------
(Thousands of dollars) 1995 1994 1993
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
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
=================================================================================
<FN>
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.
</TABLE>
<TABLE>
APPENDIX
SEABOARD CORPORATION AND SUBSIDIARIES
<CAPTION>
Graph data
Years ended December 31,
1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5529
<SECURITIES> 135197
<RECEIVABLES> 117709
<ALLOWANCES> 17088
<INVENTORY> 112843
<CURRENT-ASSETS> 393760
<PP&E> 650404
<DEPRECIATION> 211989
<TOTAL-ASSETS> 878132
<CURRENT-LIABILITIES> 174736
<BONDS> 297440
0
0
<COMMON> 1488
<OTHER-SE> 364322
<TOTAL-LIABILITY-AND-EQUITY> 878132
<SALES> 1173977
<TOTAL-REVENUES> 1173977
<CGS> 1003604
<TOTAL-COSTS> 1003604
<OTHER-EXPENSES> 139169
<LOSS-PROVISION> 10554
<INTEREST-EXPENSE> 15686
<INCOME-PRETAX> 28619
<INCOME-TAX> 8417
<INCOME-CONTINUING> 20202
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20202
<EPS-PRIMARY> 13.58
<EPS-DILUTED> 13.58
</TABLE>
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
