UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 3, 2000
Seaboard Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-3390 04-2260388
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
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 or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets
Effective January 3, 2000, the Registrant completed the sale of its
Poultry Division to ConAgra, Inc. for approximately $360 million in
cash, subject to certain adjustments as set forth in the asset
purchase agreement, and the assumption of approximately $16 million in
indebtedness. These operations include four fully integrated
processing facilities and two further processing facilities located in
Georgia, Tennessee and Kentucky. Each processing facility contains a
hatchery, feed mill and processing plant. Consideration was
determined by arms length negotiations.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information:
The following pro forma unaudited condensed consolidated financial
data of Seaboard Corporation (the Company) reflects the pro forma
impact on the Company's financial position and results of operations
of the sale of its Poultry Division. Pro forma condensed consolidated
statements of operations are presented for the nine months ended
September 30, 1999 and the year ended December 31, 1998, reflecting
pro forma adjustments as if the sale was consummated at the beginning
of each of the periods presented. A pro forma condensed consolidated
balance sheet is presented as of September 30, 1999, reflecting pro
forma adjustments as if the sale was consummated on that date.
Certain management assumptions and adjustments are described in the
accompanying notes. The following pro forma financial information is
not necessarily indicative of the actual financial position or results
of operations that would have resulted had the sale been consummated
on the dates assumed, nor is it necessarily indicative of future
operating results.
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statements of Operations
Nine months ended September 30, 1999
(Thousands of dollars except per share amounts)
(Unaudited)
Historical Pro Forma
September 30, Pro Forma September 30,
1999 Adjustments 1999
Net sales $1,241,980 $ (357,294) (1) $ 884,686
Cost of sales and operating expenses 1,114,893 (307,333) (1) 807,560
Gross income 127,087 (49,961) 77,126
Selling, general and
administrative expenses 99,319 (23,376) (1)
2,139 (2) 78,082
Operating income (loss) 27,768 (28,724) (956)
Other income (expense):
Interest income 5,540 7,041 (3) 12,581
Interest expense (27,901) 5,691 (4) (22,210)
Loss from foreign affiliates (474) -- (474)
Minority interest 937 -- 937
Miscellaneous 1,432 (23) (1) 1,409
Total other income (expense), net (20,466) 12,709 (7,757)
Earnings (loss) before income taxes 7,302 (16,015) (8,713)
Income tax expense 7,133 (6,245) (5) 888
Net earnings (loss) $ 169 $ (9,770) $ (9,601)
Earnings (loss) per common share $ .11 $ (6.56) $ (6.45)
Average number of shares outstanding 1,487,520 -- 1,487,520
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statements of Operations
Year ended December 31, 1998
(Thousands of dollars except per share amounts)
(Unaudited)
Historical Pro Forma
December 31, Pro Forma December 31,
1998 Adjustments 1998
Net sales $1,779,869 $ (514,503) (1) $1,265,366
Cost of sales and operating expenses 1,564,536 (450,463) (1) 1,114,073
Gross income 215,333 (64,040) 151,293
Selling, general and
administrative expenses 146,969 (30,759) (1)
3,133 (2) 119,343
Operating income 68,364 (36,414) 31,950
Other income (expense):
Interest income 7,072 8,927 (3) 15,999
Interest expense (32,062) 6,764 (4) (25,298)
Loss from foreign affiliates (17,105) -- (17,105)
Minority interest 54,544 -- 54,544
Miscellaneous 4,449 (541) (1) 3,908
Total other income (expense), net 16,898 15,150 32,048
Earnings before income taxes 85,262 (21,264) 63,998
Income tax expense 32,907 (8,294) (5) 24,613
Net earnings $ 52,355 $ (12,970) $ 39,385
Earnings per common share $ 35.20 $ (8.72) $ 26.48
Average number of shares outstanding 1,487,520 -- 1,487,520
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidated Statements of Operations
Nine months ended September 30, 1999 and
Year ended December 31, 1998
1. Adjustment eliminates from consolidated results the amounts
contributed by the Poultry Division. Adjustments do not reflect the
net gain on the sale of the Poultry Division which is currently
estimated at approximately $87.9 million, after tax on the gain of
approximately $56.2 million. The actual gain on the sale is expected
to be reduced by undetermined losses incurred by the Poultry Division
during December 1999, which effectively represents the period from the
measurement date to the date of sale.
2. Adjustment reflects pro forma amount of general corporate
overhead originally allocated to the Poultry Division for segment
reporting purposes.
3. Adjustment reflects pro forma interest income earned during the
period on $148.5 million of cash proceeds from the sale invested in
short-term investments, consistent with the intended actual
application of proceeds received, excluding repayment of debt
described in 4.ii) and 4.iii) below and transaction related amounts
due for taxes, plant expansion completion and other expenses.
Calculations are based on actual interest rates realized during the
related periods.
4. Adjustment reflects pro forma reduction in interest expense from
debt reductions resulting from the transaction including i) $16.1 of
long-term debt associated with the Poultry Division assumed by the
purchaser, ii) repayment of $18.3 million of long-term debt associated
with the Poultry Division not assumed by the purchaser, and iii)
repayment of $100 million of short-term borrowings, consistent with
the intended actual application of net proceeds received. Pro forma
adjustments based on actual interest rates incurred during the related
periods.
5. Adjustment reflects the pro forma tax effect of the pro forma
adjustments discussed in the notes above at statutory tax rates.
SEABOARD CORPORATION AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1999
(Thousands of dollars)
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
Assets
Current assets:
Cash and cash equivalents $ 28,837 $ -- $ 28,837
Short-term investments 77,891 240,555 (1) 318,446
Receivables, net 185,060 (27,722) (2) 157,338
Inventories 257,476 (78,265) (2) 179,211
Deferred income taxes 15,019 -- 15,019
Prepaid expenses and deposits 19,284 (1,446) (2) 17,838
Total current assets 583,567 133,122 716,689
Investments in and advances to
foreign affiliates 28,821 -- 28,821
Net property, plant and equipment 588,241 (115,694) (2) 472,547
Other assets 31,615 (185) (2) 31,430
Total assets $1,232,244 $ 17,243 $1,249,487
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 204,755 $(100,000) (3) $ 104,755
Current maturities of
long-term debt 11,297 -- 11,297
Accounts payable 65,306 (13,944) (2) 51,362
Other current liabilities 109,458 (11,890) (2)
35,051 (4)
56,969 (5) 189,588
Total current liabilities 390,816 (33,814) 357,002
Long-term debt, less
current maturities 310,222 (16,145) (6)
(18,300) (7) 275,777
Deferred income taxes 44,987 -- 44,987
Other Liabilities 36,406 (969) (2)
(2,635) (8) 32,802
Total non-current and
deferred liabilities 391,615 (38,049) 353,566
Minority interest 1,068 -- 1,068
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 (181) -- (181)
Retained earnings 434,224 89,106 (9) 523,330
Total stockholders' equity 448,745 89,106 537,851
Total liabilities and
stockholders'equity $1,232,244 $ 17,243 $1,249,487
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidated Balance Sheet
September 30, 1999
1. Adjustment reflects pro forma increase in short-term investments
funded by cash proceeds not used to pay down short-term borrowings,
consistent with the intended actual application of cash proceeds after
the closing of the transaction.
2. Adjustment eliminates amounts attributable to the Poultry
Division, net of assets and liabilities to be retained.
3. Adjustment reflects the pro forma repayment of short-term
borrowings with a portion of the cash proceeds received from the
buyer, consistent with intended actual application of cash proceeds
after the closing of the transaction.
4. Pro forma adjustment reflects accrual to complete previously
started plant expansion projects on behalf of the buyer in accordance
with the asset purchase agreement and for other expenses associated
with the sale.
5. Adjustment reflects the pro forma tax liability of i) $56.2
million due on the estimated gain from the sale and ii) $0.8 million
due on the recognition of deferred gains on terminated interest rate
swap agreements as discussed in 8.ii) below, based on statutory tax
rates.
6. Adjustment reflects the elimination of Poultry Division related
long-term debt assumed by the purchaser.
7. Adjustment reflects the repayment of Poultry Division related
long-term debt not assumed by the purchaser.
8. Adjustment reflects the pro forma recognition of deferred gains
on terminated interest rate swap agreements originally associated with
i) Poultry Division related long-term debt eliminated or repaid as
discussed in 6. and 7. above (related gains of $0.6 million), and ii)
short-term borrowings repaid with sale proceeds as discussed in 3.
above (related gains of $2.0 million).
9. Adjustment reflects the pro forma estimated gain of i) $87.9
million, net of tax, realized on the sale, and ii) $1.2 million, net
of tax, on the realization of deferred interest rate swap gains
discussed in 8.ii) above. The actual gain on the sale is expected to
be reduced by undetermined losses incurred by the Poultry Division
during December 1999, which effectively represents the period from
the measurement date to the date of sale.
(c) Exhibits:
2.1 Asset Purchase Agreement by and between Seaboard Corporation
and ConAgra, Inc., dated December 6, 1999.
2.2 Addendum to Asset Purchase Agreement dated December 30,
1999.
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: January 18, 2000
Seaboard Corporation
by: /s/ Robert L. Steer
Robert L. Steer, Vice President-Chief
Financial Officer