UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
_____________
Commission File Number 1-3390
Seaboard Corporation
(Exact name of registrant as specified in its charter)
Delaware 04-2260388
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9000 W. 67th Street, Shawnee Mission, Kansas 66202
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (913) 676-8800
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report.)
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 ___.
There were 1,487,520 shares of common stock, $.01 par value
per share, outstanding on October 31, 1998.
Total pages in filing - 15 pages
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
(Thousands of dollars)
(Unaudited)
September 30, December 31,
1998 1997
Assets
Current assets:
Cash and cash equivalents $ 12,865 $ 8,552
Short-term investments 117,963 108,744
Receivables, net 177,921 175,640
Inventories 196,807 211,024
Deferred income taxes 11,117 9,730
Prepaid expenses and deposits 18,980 15,545
Total current assets 535,653 529,235
Investments in and advances to foreign affiliates 122,410 93,668
Net property, plant and equipment 470,656 486,373
Other assets 17,182 15,109
Total assets $1,145,901 $1,124,385
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 175,048 $ 157,445
Current maturities of long-term debt 6,883 6,843
Accounts payable 67,009 78,805
Other current liabilities 113,293 117,809
Total current liabilities 362,233 360,902
Long-term debt, less current maturities 306,048 306,666
Deferred income taxes 32,342 27,943
Other liabilities 31,428 29,859
Total non-current and deferred liabilities 369,818 364,468
Stockholders' equity:
Common stock of $1 par value,
Authorized 4,000,000 shares;
issued 1,789,599 shares 1,790 1,790
Less 302,079 shares held in treasury (302) (302)
1,488 1,488
Additional capital 13,214 13,214
Accumulated other comprehensive income 147 10
Retained earnings 399,001 384,303
Total stockholders' equity 413,850 399,015
Total liabilities and stockholders' equity $1,145,901 $1,124,385
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Three months ended September 30, 1998 and 1997
(Thousands of dollars except per share amounts)
(Unaudited)
September 30, September 30,
1998 1997
Net sales $ 438,909 $ 429,610
Cost of sales and operating expenses 382,681 372,123
Gross income 56,228 57,487
Selling, general and administrative expenses 34,721 34,253
Operating income 21,507 23,234
Other income (expense):
Interest income 1,630 1,774
Interest expense (8,485) (8,271)
Loss from foreign affiliates (6,916) (2,246)
Miscellaneous 1,701 287
Total other income (expense), net (12,070) (8,456)
Earnings before income taxes 9,437 14,778
Income tax expense 4,419 4,270
Net earnings $ 5,018 $ 10,508
Earnings per common share $ 3.37 $ 7.06
Dividends declared per common share $ .25 $ .25
Average number of shares outstanding 1,487,520 1,487,520
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Nine months ended September 30, 1998 and 1997
(Thousands of dollars except per share amounts)
(Unaudited)
September 30, September 30,
1998 1997
Net sales $1,340,086 $1,279,156
Cost of sales and operating expenses 1,180,994 1,112,620
Gross income 159,092 166,536
Selling, general and administrative expenses 106,068 102,973
Operating income 53,024 63,563
Other income (expense):
Interest income 5,166 4,468
Interest expense (24,343) (23,172)
Loss from foreign affiliates (12,052) (6,964)
Miscellaneous 3,460 809
Total other income (expense), net (27,769) (24,859)
Earnings before income taxes 25,255 38,704
Income tax expense 9,441 12,355
Net earnings $ 15,814 $ 26,349
Earnings per common share $ 10.63 $ 17.71
Dividends declared per common share $ .75 $ .75
Average number of shares outstanding 1,487,520 1,487,520
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine months ended September 30, 1998 and 1997
(Thousands of dollars)
(Unaudited)
September 30, September 30,
1998 1997
Cash flows from operating activities:
Net earnings $ 15,814 $ 26,349
Adjustments to reconcile net earnings to
cash from operating activities:
Depreciation and amortization 44,543 42,543
Loss from foreign affiliates 12,052 6,964
Deferred income taxes 2,944 4,706
Gain from sale of fixed assets (2,209) (366)
Changes in current assets and liabilities:
Receivables, net of allowance (2,281) (13,673)
Inventories 14,217 (9,907)
Prepaid expenses and deposits (3,435) (5,744)
Current liabilities exclusive of debt (16,312) 38,890
Other, net 1,224 2,808
Net cash from operating activities 66,557 92,570
Cash flows from investing activities:
Purchase of investments (268,518) (189,596)
Proceeds from the sale or maturity of investments 259,504 177,599
Capital expenditures (34,958) (60,839)
Proceeds from sale of fixed assets 8,033 6,322
Investments in and advances to foreign affiliates (40,794) (30,883)
Investment in domestic affiliate (2,500) -
Notes receivable 1,080 78
Net cash from investing activities (78,153) (97,319)
Cash flows from financing activities:
Notes payable to bank, net 17,603 (7,640)
Proceeds from long-term debt - 10,097
Principal payments of long-term debt (578) (734)
Bond construction fund - (1,050)
Dividends paid (1,116) (1,116)
Net cash from financing activities 15,909 (443)
Net change in cash and cash equivalents 4,313 (5,192)
Cash and cash equivalents at beginning of year 8,552 11,467
Cash and cash equivalents at end of quarter $ 12,865 $ 6,275
See notes to condensed consolidated financial statements.
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1 - Accounting Policies and Basis of Presentation
The consolidated financial statements include the accounts of Seaboard
Corporation and its wholly owned domestic and foreign subsidiaries
(the "Company"). All significant intercompany balances and
transactions have been eliminated in consolidation. The Company's
investments in non-controlled affiliates are accounted for by the
equity method. The unaudited consolidated financial statements should
be read in conjunction with the consolidated financial statements of
the Company for the year ended December 31, 1997 as filed in its
Annual Report on Form 10-K.
The accompanying unaudited consolidated financial statements include
all adjustments (consisting only of normal recurring accruals) which,
in the opinion of management, are necessary for a fair presentation of
financial position, results of operations and cash flows. Results of
operations for interim periods are not necessarily indicative of
results to be expected for a full year.
The Company adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" as of January 1, 1998. This
statement establishes requirements for reporting and display of
comprehensive income and its components. For the three and nine
months ended September 30, 1998 and 1997, other comprehensive income
adjustment consisted of an immaterial unrealized gain on available-for-
sale securities, net of tax.
Note 2 - Inventories
The following is a summary of inventories at September 30, 1998 and
December 31, 1997 (in thousands):
September 30, December 31,
1998 1997
At lower of last-in, first-out (LIFO) cost or market:
Live poultry $ 24,989 $ 27,116
Dressed poultry 28,577 32,496
Feed and baking ingredients, packaging
supplies and other 7,204 6,970
60,770 66,582
LIFO allowance 615 (4,744)
Total inventories at lower of LIFO cost or market 61,385 61,838
At lower of first-in, first-out (FIFO) cost or market:
Live hogs 76,101 76,484
Grain, flour and feed 23,794 37,575
Crops in production and related materials 11,024 11,166
Dressed pork 7,793 8,388
Other 16,710 15,573
Total inventories at lower of FIFO cost or market 135,422 149,186
Total inventories $ 196,807 $ 211,024
Significant decreases in commodity prices during 1998 have effectively
eliminated the LIFO reserve as overall poultry feed costs have
decreased below base year levels. This change in LIFO reserve is
reflected in earnings as a reduction in cost of sales.
Note 3 - Contingencies
The Company is a defendant in a pending arbitration proceeding and
related litigation in Puerto Rico brought by the owner of a chartered
barge and tug which were damaged by fire after delivery of the cargo.
Damages of $47.6 million are alleged. The Company is vigorously
defending the action and believes that it has no responsibility for
the loss. The Company also believes that it would have a claim for
indemnity if it were held liable for any loss.
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 4 - Subsequent Event
In October 1998, the Company entered into a letter of intent to sell
its Holsum Bakers business and Harinas flour mill, both located in
Puerto Rico, to a group led by the current president of Holsum Bakers
for $80 million and the assumption of approximately $12 million of
liabilities. The consummation of the proposed transaction is subject
to the satisfaction of a number of conditions; however, the parties
expect the closing to occur sometime during the fourth quarter of
1998. Neither the Holsum nor Harinas operations qualify as
significant segments or major lines of business for segment or
discontinued operations reporting. The Company anticipates recording
a material gain on the sale of these operations. The sale of these
operations is not expected to have a material effect on future
earnings per share. The reduction in future operating income
previously provided by these businesses is expected to be offset by
either lower interest expense if proceeds from the sale are used to
lower outstanding debt, or higher interest income if proceeds are
invested.
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
September 30, December 31,
1998 1997
Current ratio 1.48:1 1.47:1
Working capital $173.4 $168.3
Cash from operating activities for the nine months ended September 30,
1998 was $66.6 million, compared to $92.6 million for the nine months
ended September 30, 1997. The decrease in cash flows was primarily
related to changes in certain noncash working capital items and a
decrease in net income. Changes in individual components of working
capital are primarily related to the timing of normal transactions
including voyage settlements and trade payables and receivables.
Within the commodity trading and milling division there were fewer
voyages in transit at September 30, 1998 compared to December 31, 1997
resulting in a decrease in deferred revenue balances and a partially
offsetting decrease in related grain inventories. In the poultry
division, the sell-off of a previous build-up of poultry leg-quarter
inventory also contributed to the inventory decrease.
The Company invested $30.8 million in property, plant and equipment in
the food production and processing segment for the nine months ended
September 30, 1998.
Capital expenditures in the pork division of $14.6 million were
primarily for improvements to the pork processing plant. For the
remainder of 1998, an additional $1.5 million is expected to be spent
on existing facilities. The Company previously disclosed plans to
construct a second processing plant and increase annual production
from two to four million hogs. In connection with these plans, the
Company is currently making arrangements to increase annual production
to three million hogs. This increase in hog production will be
accomplished through a combination of operating lease arrangements and
third party contract growers. The timing of expanding production from
three to four million hogs, as well as the construction of the second
processing plant, have not been finalized.
Capital expenditures of $13.9 million for the nine months ended
September 30, 1998 were made in the poultry division, primarily for
the completion of expansion projects at the Athens and Elberton,
Georgia, poultry facilities. The Company anticipates spending $4.4
million for the remainder of 1998 primarily to make general upgrades
to its poultry facilities. Management anticipates these expenditures
will be financed by internally generated cash.
Capital expenditures in the transportation segment through September
30, 1998 totaled $2.8 million for general replacement and upgrades of
property and equipment.
During the nine months ended September 30, 1998, the Company made
$37.6 million in advances to and non-voting investments in Ingenio y
Refineria San Martin del Tabacal S.A. (Tabacal) in which the Company
owns a non-controlling interest. The Company currently cannot
estimate the aggregate amount of future advances that may be required.
In the first quarter of 1998, the Company extended committed, one-year
revolving credit facilities totaling $145 million for an additional
year. As of September 30, 1998, the Company had $142.0 million
outstanding under committed, one-year revolving credit facilities
totaling $160.0 million and $33.0 million outstanding under short-term
uncommitted credit lines totaling $100.0 million.
In January 1998, the Company invested $2.5 million for a minority
interest in a new limited liability company in Maine. The new company
acquired the assets of an existing seafood company which processes and
distributes prepackaged smoked seafood and related products. The
investment is being accounted for using the equity method.
In June 1998, the Company, pursuant to a joint venture with two other
partners, completed its acquisition of an interest in a flour mill in
Haiti. The Company made an investment of $3.0 million for a minority
interest in the joint venture, which in turn owns 70% of a Haitian
company which owns the flour mill. In July 1998, the Company
completed the acquisition of a 50% interest in a flour mill in Lesotho
for approximately $5.0 million. These investments are being accounted
for using the equity method.
In October 1998, the Company purchased a controlling interest in a
Bulgarian winery for approximately $15 million. The acquisition will
be accounted for as a consolidated subsidiary and would not have
significantly affected net earnings or earnings per share on a pro
forma basis.
See Note 4 to Condensed Consolidated Financial Statements for
information concerning the planned sale of the Company's Puerto Rican
baking and flour milling operations. The pending sale will generate
available cash for the Company allowing it to reduce short-term
borrowings or increase investments.
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
The segment distribution of the increase (decrease) in net sales and
operating income compared to the prior year are as follows (in
millions):
Net Sales Operating Income
Quarter Year-to-Date Quarter Year-to-Date
Food Production and
Processing Segment $(12.1) $18.4 $ 2.7 $ (8.3)
Commodity Trading and
Milling Segment 25.5 32.2 (2.0) (0.8)
Transportation Segment (3.7) 12.4 (2.8) (1.6)
Other (0.4) (2.1) 0.4 0.2
$ 9.3 $60.9 $ (1.7) $(10.5)
Food Production and Processing Segment
Since late 1997, lower sales prices for most pork products have
resulted from an industry wide increase in production and, to a lesser
extent, pricing pressure from the Asian economic situation. Poultry
prices, however, improved during the current quarter and year-to-date
periods compared with the respective prior year periods. Comparative
third-quarter net sales for the food production and processing segment
decreased $12.1 million primarily as a result of lower pork prices,
partially offset by increased poultry prices and increased pork sales
volumes. Comparative year-to-date net sales increased $18.4 million
primarily as a result of improved poultry prices and increased poultry
and pork sales volumes, partially offset by lower pork prices. For
both the third-quarter and year-to-date comparative periods, poultry
margins improved and pork margins declined. Operating income for the
quarter improved by $2.7 million as improvements in poultry margins
exceeded declines in pork margins. Year-to-date operating income
decreased $8.3 million as declines in pork margins exceeded
improvements in poultry margins. Changes in poultry and pork margins
are more fully described below.
Net sales of poultry products totaled $135.4 and $385.3 million for
the three and nine months ended September 30, 1998, an increase of
$7.0 and $25.6 million compared to the respective periods one year
earlier. For the third-quarter comparative periods, the increase is
primarily the result of improved poultry prices, partially offset by a
decrease in sales volume. Although management cannot predict poultry
prices, it is not anticipated that prices will continue at these
higher levels for the remainder of 1998 and early 1999. Specifically,
the Russian economic situation had a negative effect on prices in
September 1998 for certain export products, especially leg-quarters.
For the year-to-date comparative periods, the increase in net sales is
primarily the result of higher sales volume and, to a lesser extent,
improved prices. Increased sales volume at the Elberton, Georgia,
plant throughout 1998 and selling off a build-up of leg-quarter
inventory in the first quarter of 1998 contributed to the increase in
year-to-date net sales. The addition of a new cooking line at the
Elberton location in late 1997 has increased the Company's capacity to
offer further processed products in place of retail tray-pack
products. Gross income from poultry sales totaled $27.8 and $49.3
million for the three and nine months ended September 30, 1998,
compared to $8.2 and $18.6 million for the respective periods one year
earlier. These increases are primarily the result of significantly
lower finished feed costs, improved sales prices and uninterrupted
operation of the Athens, Georgia, plant. During 1997, the Athens
plant was shut down for one week to convert from retail tray-pack to
food service production.
Net sales for the pork operations totaled $124.5 and $379.5 million
for the three and nine months ended September 30, 1998, a decrease of
$19.9 and $7.3 million compared to the respective periods one year
earlier. These decreases resulted from lower sales prices as
discussed above, despite increases in sales volume. The increases in
sales volume are the result of the hog processing plant operating at
double-shift production during all of 1998. The plant did not employ
a second shift until part way through the second quarter of 1997.
During the third quarter of 1998, the plant reached full capacity on a
double shift basis. Gross income decreased to $(0.1) and $5.3 million
for the three and nine months ended September 30, 1998, compared to
$17.4 and $45.3 million for the respective periods one year earlier.
These decreases are primarily the result of lower prices for finished
pork products without a comparable decrease in the cost of production.
Management anticipates that pork prices will continue to have a
negative effect on financial results during the remainder of 1998 and
early 1999.
In October 1998, Hurricane Mitch caused damage to certain of the
Company's food production and processing businesses in Central
America. Based on preliminary estimates, management anticipates
inventory losses could lower earnings during the fourth quarter of
1998 and early 1999. Substantially all damage to building and
equipment and related business interruption losses will be covered by
insurance.
Commodity Trading and Milling Segment
Commodity Trading and Milling net sales increased to $73.2 and $233.4
million for the three and nine months ended September 30, 1998, from
$47.7 and $201.2 million for the respective periods one year earlier.
These increases are primarily the result of higher volumes of
commodity sales, mainly soybeans, partially offset by lower commodity
prices. Operating income for the three and nine months ended
September 30, 1998, decreased $2.0 and $0.8 million, to $0.7 and $7.5
million, respectively, compared to the same periods one year earlier.
The decreases are primarily the result of increased costs related to
third-quarter shipments delayed in accessing a foreign port, and to a
lesser extent an increase in reserves on accounts receivable. These
decreases are partially offset by increased income from operating
certain mills in foreign countries.
Transportation Segment
Compared with the same periods one year earlier, net sales from
containerized cargo operations decreased $3.7 to $73.0 million for the
three month period, and increased $12.4 to $234.5 million for the nine
month period. Cargo volumes were higher during the first six months
of 1998 compared to 1997 resulting in the increase in year-to-date
sales. However, weakening financial conditions in certain foreign
markets the company serves resulted in lower volumes and rates during
the third quarter of 1998. Management expects the lower volumes and
rates in these markets to continue into the fourth quarter and early
1999. In addition, October 1998 shipping delays caused by Hurricane
Mitch in Central America could also reduce volume and earnings
in the fourth quarter of 1998. The Company is presently
unable to predict if hurricane damage to various customers of the
Company will have any effect on future volume and earnings in
that market. Operating income from containerized cargo
operations decreased to $2.6 and $17.5 million for the three
and nine months ended September 30, 1998, from $5.4 and $19.1
million for the respective periods one year earlier. The decrease
in the three month period is primarily a result of the lower
volumes and rates during that period. The decrease in the nine
month period results primarily from an increase in various general
and administrative costs.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses increased $0.5 and
$3.1 million to $34.7 and $106.1 million for the three and nine months
ended September 30, 1998, compared to the respective periods one year
earlier. As a percentage of revenues, and compared with the same
periods one year earlier, SG&A decreased 0.1% from 8.0% to 7.9% for
both the three and nine month periods. As a percentage of revenue,
increased selling expenses in the poultry division and various general
and administrative costs in the transportation segment are essentially
offset by decreases in the pork division due to increased production.
Other Income and Expense
Interest income increased during the nine months ended September 30,
1998, compared to the respective period one year earlier, primarily
from an increase in average invested funds. Loss from foreign
affiliates is primarily related to Tabacal. Losses at Tabacal
increased during September 1998 as a result of lower sugar prices and
planned operating efficiencies and harvest production levels not being
realized. Based on a continuing deterioration of these factors
subsequent to September 1998, management expects such increased losses
to continue for the remainder of 1998 and early 1999. Increases in
miscellaneous income are primarily the result of gains on the sale of
fixed assets in the transportation division as older, fully
depreciated fleet equipment is replaced in the normal course of
business.
Income Taxes
The effective tax rate increased to 47% and 37% for the three and nine
months ending September 30, 1998, from 29% and 32% for the respective
periods one year earlier. The increase is primarily attributable to
an increase in losses from foreign affiliates.
Other Financial Information
The Company will adopt Statement of Financial Accounting Standards
(SFAS) No. 131, "Disclosures about Segments of an Enterprise and
Related Information" for the year ending December 31, 1998. This
statement requires companies to report certain information about
operating segments in their financial statements and establishes
standards for related disclosures about products and services,
geographic areas and major customers. SFAS 131 defines operating
segments as components of an enterprise about which separate financial
information is available that is evaluated regularly by management in
deciding how to allocate resources and in assessing performance.
Application to interim financial statements in the year of adoption is
not required, however, comparative information for interim periods in
the year of adoption will be reported in the financial statements for
interim periods in fiscal 1999.
During the second quarter of 1998 the Financial Accounting Standards
board issued Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Hedging Activities."
This statement establishes accounting and reporting standards for
derivative instruments and all hedging activities. It requires that
an entity recognize all derivatives as either assets or liabilities at
their fair values. Accounting for changes in the fair value of a
derivative depends on its designation and effectiveness. For
derivatives that qualify as effective hedges, the change in fair value
will have no net impact on earnings until the hedged transaction
affects earnings. For derivatives that are not designated as hedging
instruments, or for the ineffective portion of a hedging instrument,
the change in fair value will affect current period earnings. The
Company will adopt SFAS No. 133 during its first quarter of fiscal
2000. Depending on market interest rates and the types of financial
hedging derivatives in place at the time of adoption, adoption of this
statement could result in significant adjustments to the Company's
balance sheet as financial derivatives are recorded as assets or
liabilities at fair value with corresponding adjustments to Other
Comprehensive Income. The Company does not believe adoption will have
a material impact on the Company's results of operations or cash
flows.
The Company has expanded the scope of its original Year 2000
assessment and is nearing completion of the assessment of its primary
mainframe computer systems, both hardware and software. Resolution of
issues identified within the primary mainframe computer systems,
including all necessary testing, is expected to be completed over the
next several months. The Company is in the early stages of assessing
other computer and electronic information systems throughout its
operations, with the objective of addressing any issues deemed
critical to operations by early 1999. Certain equipment with embedded
chip technology cannot be tested or guaranteed by the manufacturer for
Year 2000 compliance. Consequently, general contingency plans are
being developed for certain locations including lists of spare parts
to have on hand in case of failure. Although not deemed critical to
consolidated operations, computer systems at certain international
locations are being reviewed and upgrades are planned or in process.
The failure to identify or resolve any significant Year 2000 issue in
a timely manner could have a material adverse effect on the Company,
including an interruption in, or a failure of, certain normal business
activities or operations.
The Company is also in the process of communicating with significant
suppliers and customers to determine the extent to which the Company
is vulnerable to failure of those third parties to resolve their own
Year 2000 issues. The Company does not anticipate the cost of Year
2000 compliance by suppliers to be passed on to the Company and has
not been informed of any material risks related to third party Year
2000 compliance. However, the failure of a significant third party
supplier or customer to resolve their own Year 2000 issues in a timely
manner could have a material adverse effect on the Company. For
example, business disruptions resulting from noncompliance by a local
utility (either electric, gas or water) or chartered vessel service
would likely have a material adverse effect on the Company.
Based upon assessments completed to date, the Company believes that
the total costs, including internal costs consisting primarily of
payroll related costs, to resolve Year 2000 issues will not be
material to the Company's consolidated financial position. Not all
assessments are complete at this date and the discovery of a
significant Year 2000 issue unknown at this time could materially
alter this estimate.
SEABOARD CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K. Seaboard Corporation has not filed any
reports on Form 8-K during the quarter ended September 30, 1998.
This Form 10-Q contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, which 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-Q 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 price of
feed stocks and other materials used by the Company, (iv) the price
for the Company's products and services, (v) the cash requirements and
financial results of Tabacal, (vi) the impact of Year 2000 issues, or
(vii) 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-Q under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" identifies important factors which could cause
such differences.
PART II - OTHER INFORMATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DATE: November 12, 1998
Seaboard Corporation
by: /s/ Robert L. Steer
Robert L. Steer, Vice President-Chief
Financial Officer (Authorized officer
and principal financial and accounting
officer)
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THE SCHEDLUE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE THIRD
QUARTER 10-Q FILING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
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<S> <C>
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