S U M M A R Y O F S E L E C T E D F I N A N C I A L D A T A
Seaboard Corporation and Subsidiaries
________________________________________________________________________________
(Thousands of dollars except per share amounts)
________________________________________________________________________________
Years ended December 31, 1993 1992 1991 1990 1989
________________________________________________________________________________
Net sales $1,142,144 $1,053,655 $875,874 $557,328 $518,759
================================================================================
Net earnings $ 35,891 $ 31,075 $ 21,241 $ 30,049 $ 18,678
================================================================================
Earnings per common share $ 24.13 $ 20.89 $ 14.28 $ 20.19 $ 12.56
================================================================================
Total assets $ 647,332 $ 485,121 $458,045 $422,488 $367,801
================================================================================
Long-term debt $ 194,506 $ 78,123 $ 77,119 $ 77,697 $ 63,856
================================================================================
Stockholders' equity $ 304,356 $ 269,581 $239,250 $218,753 $189,448
================================================================================
Dividends per common share $ .75 $ .50 $ .50 $ .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 $20,074 and
Earnings per common share was increased by $13.50 to reflect this change.
(Graphs omitted from this page, see appendix.)
Q U A R T E R L Y F I N A N C I A L D A T A
(Unaudited)
Seaboard Corporation and Subsidiaries
____________________________________________________________________________________________________________
(Thousands of dollars 1st 2nd 3rd 4th Total for
except per share amounts) Quarter Quarter Quarter Quarter the Year
____________________________________________________________________________________________________________
1993
Net sales $283,467 258,254 250,197 350,226 1,142,144
Operating income (loss) 12,720 6,949 2,853 (1,477) 21,045
Earnings before cumulative effect
of change in accounting principle 8,131 4,806 1,649 1,231 15,817
Cumulative effect of changing the
accounting for income taxes 20,074 -- -- -- 20,074
Net earnings 28,205 4,806 1,649 1,231 35,891
Earnings per common share:
Earnings before cumulative effect
of change in accounting principle 5.46 3.23 1.11 .83 10.63
Cumulative effect of changing the
accounting for income taxes 13.50 -- -- -- 13.50
Earnings per common share 18.96 3.23 1.11 .83 24.13
Dividends per common share 0.125 0.125 0.25 0.25 0.75
Market price range per common share:
High $ 249.875 255 220 196.75
Low $ 184.75 217 186 175
____________________________________________________________________________________________________________
1992
Net sales $222,852 241,940 243,038 345,825 1,053,655
Operating income 8,521 6,391 8,840 15,759 39,511
Net earnings 7,529 5,349 5,521 12,676 31,075
Earnings per common share 5.06 3.60 3.71 8.52 20.89
Dividends per common share 0.125 0.125 0.125 0.125 0.50
Market price range per common share:
High $ 133 161 180 187
Low $ 114 135 159.75 158
____________________________________________________________________________________________________________
<FN>
The Company's first three quarters of each fiscal year consist of three four-week periods. The fourth quarter
has four four-week periods.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Seaboard Corporation and Subsidiaries
LIQUIDITY AND CAPITAL RESOURCES
Total capitalization as measured by stockholders' equity,
long-term deferred income taxes and long-term liabilities
totaled $521.0 million at December 31, 1993 compared with
$390.7 million and $357.2 million at December 31, 1992 and
December 31, 1991, respectively. Capitalization at December
31, 1993 increased primarily as a result of the issuance of
long-term debt and earnings before cumulative effect of a
change in accounting principle. The increase in
capitalization from 1991 to 1992 amounting to $33.5 million
was primarily attributable to net earnings of $31.1 million.
Liquidity at December 31, 1993, 1992 and 1991, as measured
by both current ratio and working capital, are as follows:
- -------------------------------------------------------------
Years ended December 31, 1993 1992 1991
Current ratio 3.19:1 3.22:1 2.82:1
Working capital (in thousands) $276,447 $209,811 $183,825
- -------------------------------------------------------------
The increased liquidity is due to $100.0 million in cash
proceeds received in December 1993, from Senior Notes that
have been invested in short-term investments and are
available to the Company for construction expenditures and
general corporate purposes. Cash provided by operating
activities increased for the year ended December 31, 1993
compared to 1992 and 1991 as accounts receivable and
inventory for new and expanded businesses reached normal
operating levels.
The Company invested $87.3 million in property, plant and
equipment during 1993, of which $51.1 million was expended in
the food production and processing segment and $35.3 million
in the transportation segment.
Construction continues on the Company's hog production and
processing project in Northeastern Colorado and the Oklahoma
Panhandle. During 1993, capital expenditures of $19.0
million included hog farrowing and finishing facilities and a
feedmill. Cumulative capital expenditures on the project
since 1992 total $26.6 million. The Company anticipates
remaining expenditures to total $82.9 million for facilities
and working capital. The project will be funded primarily
with term debt.
(Graphs omitted from margin, see appendix.)
Capital expenditures of $6.7 million were made at the
Company's poultry processing plant in Western Kentucky to
expand processing capacity. Remaining capital expenditures
for planned expansion of the poultry processing facility are
expected to total $5.3 million during 1994 and will be funded
with internal cash sources.
Capital expenditures of $2.2 million were made to expand
flour milling capacity in Puerto Rico and were funded
internally. In January 1993, the Company purchased an
interest in a flour mill in Zaire for $5.5 million in cash.
At December 31, 1993, this investment is included in
investments in and advances to foreign subsidiaries not
consolidated.
Other capital expenditures in the food production and
processing segment for 1993 include $23.2 million in general
replacement and upgrades of plant and equipment.
Capital expenditures in the transportation segment of $29.6
million were incurred to purchase two cargo vessels for use
in the Company's ocean liner service. The expenditures were
financed with $20.6 million in bank term loans and $9.0
million using internal cash sources. Other capital
expenditures of $5.7 million in the transportation segment
were for general replacement and upgrades of property and
equipment.
Capital expenditures totaled $35.3 million for 1992. The
Company purchased previously leased food processing equipment
totaling $7.2 million. Expenditures of $15.2 million were
for routine replacement and upgrade of property plant and
equipment within the food production and processing segment.
Expenditures for transportation equipment used in the
Company's ocean liner service totaled $3.2 million.
(Graphs omitted from margin, see appendix.)
In October 1992, the Company purchased a flour mill in
Guanica, Puerto Rico, for $2.7 million in cash. The purchase
price was allocated between property, plant and equipment.
All capital expenditures made during 1992 were internally
funded.
During 1992, the Company borrowed $10.0 million under a
bank term loan that was used for working capital. In
addition, the Company utilized early redemption features of
certain Industrial Revenue Bonds to retire $3.6 million of
long-term debt in December 1992. Due to expectations with
regard to foreign currency and interest rate markets, the
Company reduced its foreign currency borrowings by $5.5
million in 1992.
At December 31, 1993 and 1992, $16.1 million and $4.7
million, respectively, were outstanding under the Company's
short-term uncommitted credit lines from banks totaling
$132.0 million.
The Company is required to implement Financial Accounting
Standards Board (FASB) Standard 115, "Accounting for Certain
Investments in Debt and Equity Securities," prospectively in
the first quarter of 1994. Application of the new rules will
not have a material impact upon the financial statements of
the Company.
Management intends to continue seeking opportunities for
expansion in the industries in which it operates and believes
that the Company's liquidity and capital resources are
adequate for its current and intended operations.
RESULTS OF OPERATIONS
Net sales increased $88.5 million over 1992 to total
$1,142.1 million for the year ended December 31, 1993.
Operating income of $21.0 million in 1993 was $18.5
million less than in 1992.
Net sales of $1,053.7 million for the year ended December
31, 1992 increased by $177.8 million compared to the year
ended December 31, 1991. Operating income of $39.5 million
for the year ended December 31, 1992 increased by 121%
compared to the year ended December 31, 1991.
Food Production And Processing Segment
Food production and processing segment sales totaled $940.4
million in 1993, an increase of $76.5 million or 9% compared
to the year ended December 31, 1992. Of the increase, $51.4
million resulted from the first full year of operations of a
flour mill located in Guanica, Puerto Rico and the
acquisition of a flour mill in Zaire during 1993. In
December of 1993, the Company's investment in the Zaire flour
mill was reduced to a minority interest and the equity method
of accounting for this investment is now being used.
Net sales from commodity trading activity increased by
$15.9 million as a result of increased sales to the Company's
nonconsolidated flour mills.
Sales volume of poultry products decreased by 4% compared
to 1992, and was principally attributed to a decline in
purchases of fresh poultry from third party sources for
further processing. The average sales price the Company
received for its poultry products increased during 1993
resulting in relatively unchanged net sales compared to 1992.
Sales volume of the Company's pork products decreased by 3%
during 1993, primarily as a result of a decline in the number
of hogs processed. Total sales of pork products were
slightly lower in 1993 as the decrease in volume of pork
products sold was partially offset by increased sales prices.
(Graphs omitted from margin, see appendix.)
In 1993, operating income from food production and
processing declined by $12.9 million compared to the year
ended December 31, 1992. The decrease in operating income
was principally attributed to a $15.4 million operating loss
incurred at the Company's Minnesota pork processing plant.
Throughout 1993, the Company paid, on average, 7% more for
live hogs than in 1992 while sales prices did not increase at
the same rate. The Company will eliminate pork and lamb
slaughtering at the plant in March 1994. The ongoing
operations of the plant will consist of further processing
fresh pork products purchased from third parties. $4.5
million of the operating loss reported in 1993 was a reserve
established in the fourth quarter to reduce the carrying
value of certain equipment used in slaughtering operations to
net realizable value and for other incremental costs of this
change.
Operating income at the Company's poultry operations
increased by $5.2 million compared to 1992, primarily as a
result of an increase in the Company's average selling price
received for poultry products. Third and fourth quarter
results in 1993 reflect an increase in finished feed costs
due to higher grain prices.
Operating income at the Company's flour mills increased by
$3.4 million compared to 1992. The increase is principally
attributed to the first full year of operations of the
Company's flour mill located in Puerto Rico and the
acquisition of a flour mill located in Zaire. The increase
is also net of a fourth quarter loss reported by the flour
mill in Zaire of $2.9 million attributable to government
mandated price controls and monetary reform. Subsequent to
December 31, 1993, the controls imposed by the government
were lifted.
Net sales totaled $863.9 million for the year ended
December 31, 1992, an increase of $148.5 million compared to
1991. Operating income increased $17.8 million compared to
the year ended December 31, 1991. The increase in poultry
and pork sales in 1992 was related to increased volume.
Sales volume of poultry products increased by 11% compared to
1991, primarily due to the Mayfield, Kentucky, plant
operating at near capacity for the entire year. Sales volume
of pork products increased by 36% in the first full year of
operations. The increase in operating income was principally
attributable to improved margins on poultry and pork
products which generated operating income of $8.0 million, an
increase of $13.2 million compared to the year ended December
31, 1991. The improved results from poultry and pork
products were attributable to lower unit costs due to volume
increases and lower live hog prices which were partially
offset by declines of 2% and 8% in the average selling price
of poultry and pork products, respectively.
Transportation Segment
Transportation sales for the year ended December 31, 1993
totaled $182.5 million, an increase of $12.0 million compared
to 1992. The increase in sales includes new services to Peru
and Chile which started in July 1993. Operating income for
the year ended December 31, 1993 totaled $21.5 million and
remained almost unchanged compared to 1992 primarily as a
result of changes in cargo mix within certain markets
serviced by the Company.
Transportation sales for the year ended December 31, 1992
totaled $170.5 million, an increase of $28.0 million compared
to 1991. Operating income in 1992 increased $3.6 million
compared to 1991 to total $21.6 million for the year ended
December 31, 1992. The increases were related to improved
economies in Central and South America which have
resulted in greater trade.
Other Businesses
Operating income decreased by $5.2 million at the Company's
electric power production facility located in the Dominican
Republic as a result of higher generator maintenance costs
and unscheduled repairs. The Company operates the facility
under the terms of a contract with the Dominican government
that expired in January 1994 and is currently in the process
of negotiating a new contract.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased to
$104.5 million for the year ended December 31, 1993 from
$93.2 million in 1992 and $85.7 million in 1991. The
increase in expenses for the year ended December 31, 1993 is
principally related to new operations in flour milling and
increased expenses related to the expansion of the Company's
hog production and processing operations. The increase in
1992 compared to 1991 is primarily attributable to increased
sales and marketing efforts. As a percentage of sales,
selling, general and administrative expenses increased in
1993 by less than 1% compared to 1992 and decreased by 1% in
1992 compared to 1991.
Other
Interest income totaled $7.0 million, $7.0 million and
$13.1 million for the years ended December 31, 1993, 1992 and
1991, respectively. 1993 includes $1.5 million of interest
income on refunds of Federal income tax for tax years through
1988. Increases in short-term investments partially offset
lower rates. The decline in interest income in 1992 compared
to 1991 was due primarily to the collection of $45.2 million
of fixed-rate notes receivable in January which paid interest
at above market rates.
Interest expense totaled $7.0 million for the year ended
December 31, 1993 compared to $6.6 million and $7.7 million
for the years ended December 31, 1992 and 1991, respectively.
Interest expense increased in 1993 by 8% compared to 1992,
largely as a result of increased borrowings. Interest
expense decreased in 1992 compared to 1991 primarily as a
result of lower interest rates.
The Company does not believe its businesses have been
materially adversely affected by inflation.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders Seaboard Corporation
We have audited the accompanying consolidated balance sheets of
Seaboard Corporation and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of earnings,
retained earnings and cash flows for each of the years in the
three-year period ended December 31, 1993. 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 state-
ments. An audit also 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 finan-
cial position of Seaboard Corporation and subsidiaries at
December 31, 1993 and 1992 and results of their operations
and their cash flows for each of the years in the three-year
period ended December 31, 1993 in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial state-
ments, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes," in 1993.
KPMG Peat Marwick
Kansas City, Missouri
March 4, 1994
CONSOLIDATED STATEMENTS OF EARNINGS
Seaboard Corporation and Subsidiaries
____________________________________________________________________________________________________
(Thousands of dollars except per share amounts) Years ended December 31,
____________________________________________________________________________________________________
1993 1992 1991
____________________________________________________________________________________________________
Net sales $1,142,144 $1,053,655 $875,874
Cost of sales and operating expenses 1,016,647 920,929 772,315
____________________________________________________________________________________________________
Gross income 125,497 132,726 103,559
Selling, general and administrative expenses 104,452 93,215 85,689
____________________________________________________________________________________________________
Operating income 21,045 39,511 17,870
____________________________________________________________________________________________________
Income from foreign subsidiaries not consolidated 2,177 4,132 4,186
____________________________________________________________________________________________________
23,222 43,643 22,056
____________________________________________________________________________________________________
Other income (expense):
Interest income 7,037 7,009 13,103
Interest expense (7,067) (6,580) (7,691)
Miscellaneous (529) (494) 160
____________________________________________________________________________________________________
Total other income (expense), net (559) (65) 5,572
____________________________________________________________________________________________________
Earnings before income taxes and
cumulative effect of a change
in accounting principle 22,663 43,578 27,628
Income tax expense (6,846) (12,503) (6,387)
____________________________________________________________________________________________________
Earnings before cumulative effect of
a change in accounting principle 15,817 31,075 21,241
Cumulative effect of changing the
accounting for income taxes 20,074 -- --
____________________________________________________________________________________________________
Net earnings $ 35,891 $ 31,075 $ 21,241
====================================================================================================
Earnings per common share:
Earnings before cumulative effect of a change
in accounting principle $ 10.63 $ 20.89 $ 14.28
Cumulative effect of changing the
accounting for income taxes 13.50 -- --
- -----------------------------------------------------------------------------------------------------
Earnings per common share $ 24.13 $ 20.89 $ 14.28
====================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Seaboard Corporation and Subsidiaries
____________________________________________________________________________________________________
(Thousands of dollars except per share amounts) Years ended December 31,
____________________________________________________________________________________________________
1993 1992 1991
____________________________________________________________________________________________________
Balance at beginning of year $ 263,653 $ 233,322 $ 212,825
Net earnings 35,891 31,075 21,241
Dividends on common stock (1,116) (744) (744)
____________________________________________________________________________________________________
Balance at end of year $ 298,428 $ 263,653 $ 233,322
====================================================================================================
Dividends per common share $ .75 $ .50 $ .50
====================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
Seaboard Corporation and Subsidiaries
___________________________________________________________________________________________________
(Thousands of dollars) December 31,
___________________________________________________________________________________________________
Assets 1993 1992
___________________________________________________________________________________________________
Current assets:
Cash and cash equivalents $ 7,110 $ 9,838
Short-term investments 215,902 114,761
Receivables:
Trade 85,576 90,386
Due from foreign subsidiaries not consolidated 1,385 7,936
Other 8,660 4,621
___________________________________________________________________________________________________
95,621 102,943
Allowance for doubtful receivables (6,556) (5,653)
___________________________________________________________________________________________________
Net receivables 89,065 97,290
Inventories 70,961 70,765
Notes receivable 3,649 1,209
Deferred income taxes 7,671 2,714
Prepaid expenses and deposits 8,374 7,679
___________________________________________________________________________________________________
Total current assets 402,732 304,256
___________________________________________________________________________________________________
Investments in and advances to foreign subsidiaries not consolidated 28,520 17,992
___________________________________________________________________________________________________
Net property, plant and equipment 205,438 156,563
___________________________________________________________________________________________________
Other assets 10,642 6,310
___________________________________________________________________________________________________
Total Assets $647,332 $485,121
===================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
___________________________________________________________________________________________________
(Thousands of Dollars) December 31,
___________________________________________________________________________________________________
Liabilities and Stockholders' Equity 1993 1992
___________________________________________________________________________________________________
Current liabilities:
Notes payable to bank $ 16,055 $ 4,698
Current maturities of long-term debt 9,217 598
Accounts payable 44,787 37,389
Accrued liabilities 28,667 21,342
Accrued payroll 13,776 10,882
Deferred revenue 5,026 9,963
Income taxes payable 8,757 9,573
___________________________________________________________________________________________________
Total current liabilities 126,285 94,445
___________________________________________________________________________________________________
Long-term debt, less current maturities 194,506 78,123
___________________________________________________________________________________________________
Deferred income taxes 20,440 40,953
___________________________________________________________________________________________________
Accrued pension plan liability, less current portion 1,745 2,019
___________________________________________________________________________________________________
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 4,440 4,440
Retained earnings 298,428 263,653
___________________________________________________________________________________________________
Total stockholders' equity 304,356 269,581
Commitments and contingent liabilities
___________________________________________________________________________________________________
Total Liabilities and Stockholders' Equity $647,332 $485,121
===================================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS
Seaboard Corporation and Subsidiaries
___________________________________________________________________________________________________________________
(Thousands of dollars) Years ended December 31,
___________________________________________________________________________________________________________________
1993 1992 1991
___________________________________________________________________________________________________________________
Cash flows from operating activities:
Net earnings $ 35,891 $ 31,075 $ 21,241
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 34,429 29,601 26,082
Equity in earnings of nonconsolidated foreign subsidiaries (1,497) (2,530) (1,550)
Deferred income taxes (25,470) (9,877) (1,038)
Other operating activities 1,192 (1,035) 1,313
Changes in assets and liabilities (net of businesses acquired):
Receivables (286) (17,920) (24,384)
Inventories (196) (15,368) (15,284)
Prepaid expenses and deposits (695) (552) (1,134)
Current liabilities exclusive of debt 11,590 13,496 16,458
___________________________________________________________________________________________________________________
Net cash provided by operating activities 54,958 26,890 21,704
___________________________________________________________________________________________________________________
Cash flows from investing activities:
Net (investment in) proceeds from short-term investments (101,141) (23,886) 6,711
Capital expenditures (87,328) (35,286) (20,240)
Investments and advances to foreign subsidiaries not consolidated 1,990 885 (8,765)
Proceeds from the sale of equipment 1,924 2,385 1,320
Notes receivable (2,874) 44,767 759
Acquisition of businesses (5,500) (2,650) --
- -------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (192,929) (13,785) (20,215)
___________________________________________________________________________________________________________________
Cash flows from financing activities:
Notes payable to banks 11,357 (664) 2,110
Proceeds from issuance of long-term debt 126,500 13,509 7,500
Principal payments of long-term debt (1,498) (20,995) (9,970)
Dividends paid (1,116) (744) (744)
___________________________________________________________________________________________________________________
Net cash provided by (used in) financing activities 135,243 (8,894) (1,104)
___________________________________________________________________________________________________________________
Net increase (decrease) in cash and cash equivalents (2,728) 4,211 385
Cash and cash equivalents at beginning of year 9,838 5,627 5,242
___________________________________________________________________________________________________________________
Cash and cash equivalents at end of year $ 7,110 $ 9,838 $ 5,627
===================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest (net of amounts capitalized) $ 6,778 $ 6,266 $ 7,967
===================================================================================================================
Income taxes $ 13,058 $ 17,737 $ 9,133
===================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Seaboard Corporation and Subsidiaries
December 31, 1993, 1992 and 1991
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
engaged domestically in poultry and pork production and processing,
commodity merchandising, baking, flour milling, shipping, and produce
storage and distribution. Overseas, the Company engages in fruit,
vegetable and shrimp production and processing, flour milling, animal
feed production, polypropylene bag manufacturing and electric power
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
Funds retained for future use in the business are temporarily
invested in time deposits, commercial paper, tax-exempt bonds,
corporate bonds and U.S. government obligations. These investments
are carried at the lower of amortized cost or market. The carrying
amount approximates fair value because of the short maturity of these
instruments.
In May 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards 115, "Accounting for
Certain Investments in Debt and Equity Securities," effective for
fiscal years beginning after December 15, 1993. Under the new rules,
debt securities that the Company has both the positive intent and
ability to hold to maturity are carried at amortized cost. Debt
securities that the Company does not have the positive intent and
ability to hold to maturity and all marketable equity securities are
classified as available-for-sale or trading and carried at fair value.
Unrealized holding gains and losses on securities classified as
available-for-sale are recorded as a separate component of
stockholders' equity. Unrealized holding gains and losses on
securities classified as trading are reported in earnings.
Presently, the Company carries all debt securities at the lower of
amortized cost or market. The new rules will be applied prospectively
in the first quarter of 1994. Application of the new rules will not
have a material impact upon the consolidated financial statements of
the Company.
Inventories
The Company uses the lower of last-in, first-out (LIFO) cost or
market for determining cost for poultry and baking product
inventories. Dressed pork, produce and seafood inventories are valued
at the lower of first-in, first-out (FIFO) cost or market. Domestic
grain inventories are valued at market after adjustment of open
purchase and sale contracts to market. Grain inventories held in
milling operations are valued at the lower of FIFO cost or market.
The Company has entered into contracts that have been designated
as hedges against fluctuations in the purchase and sales prices of
live hogs and grain. The gains and losses on completed contracts are
included in the measurement of these transactions.
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.
Revenue Recognition
The Company recognizes revenue on commercial exchanges at the
time title to the goods transfers to the buyer.
Income Taxes
The Company adopted Statement of Financial Accounting Standards
109, "Accounting for Income Taxes," (SFAS 109) 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, 1993, 1992
and 1991, 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 $12,467,000 and $11,818,000 at December
31, 1993 and 1992, 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 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 gains (losses) for the years ended December 31, 1993,
1992 and 1991 were $(3,059,000), $436,000 and $(262,000),
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 in the
management of interest rate exposure. The differential to be paid or
received is accrued and recognized in earnings.
NOTE 2
Acquisitions
______________________________________________________________________
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
Matadi, 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 subsidiary'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.
In October 1992, the Company acquired a flour mill in Puerto Rico
for $2,650,000. The Company accounted for the acquisition of the
facility using the purchase method.
Subsequent to December 31, 1993, 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.
None of these acquisitions 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, 1993,
the Company had a net receivable balance from the Parent Company of
$501,000. At December 31, 1992, the Company was indebted to the
Parent Company in the net amount of $1,062,000. Interest incurred on
receivables and advances approximate U.S. Treasury Bill rates. For
the years ended December 31, 1993, 1992 and 1991, net interest expense
amounted to $19,000, $122,000, and $296,000 respectively.
NOTE 4
Inventories
_____________________________________________________________________________________________________________
A summary of inventories at the end of each year is as follows:
(Thousands of dollars) December 31,
______________________________________________________________________________________________________________
1993 1992
______________________________________________________________________________________________________________
At lower of LIFO cost or market:
Live poultry $22,545 $20,366
Dressed poultry 8,278 7,868
Feed and baking ingredients, packaging supplies and other 7,200 6,677
______________________________________________________________________________________________________________
38,023 34,911
LIFO allowance (3,834) (968)
______________________________________________________________________________________________________________
Total inventories at lower of LIFO cost or market 34,189 33,943
______________________________________________________________________________________________________________
At lower of FIFO cost or market:
Crops in production, fertilizers and pesticides 11,376 10,439
Grain, flour and feed 3,170 907
Dressed pork 8,587 5,073
Live hogs 3,037 699
Other 7,467 9,408
______________________________________________________________________________________________________________
Total inventories at lower of FIFO cost or market 33,637 26,526
______________________________________________________________________________________________________________
Grain at market 3,135 10,296
______________________________________________________________________________________________________________
Total inventories $70,961 $70,765
==============================================================================================================
The use of the LIFO method decreased net earnings in 1993 by
$1,806,000 ($1.21 per share), increased net earnings in 1992 by
$384,000 ($.26 per share) and decreased net earnings in 1991 by
$342,000 ($.23 per share). The increase in net earnings in 1992 was
primarily the result of declining purchase prices. If the FIFO method
had been used, inventories would have been $3,834,000 and
$968,000 higher than those reported at December 31, 1993 and 1992,
respectively.
Note 5
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 those investments
where such a loss occurred and recognized the impairment in value by a
charge to earnings.
In August 1991, the Company acquired a 42.5% interest in H.F.P.
Engineering (Nigeria) Ltd., a Nigerian company engaged in the
prefabrication and construction of commercial and residential
properties in Lagos, Nigeria for cash in the amount of $6.13 million.
Sales of grain and supplies to foreign subsidiaries are included
in consolidated net sales for the years ended December 31, 1993, 1992,
and 1991, and amounted to $20,126,000, $16,765,000 and $5,930,000,
respectively.
The Company has periodically borrowed funds from its Ecuadorian
subsidiary denominated in local currency. The loans were repaid
resulting in a foreign currency exchange gain of $685,000 for the year
ended December 31, 1991.
Combined condensed financial information of the minority-owned
nonconsolidated foreign subsidiaries for their fiscal periods ended
within each of the Company's years ended are as follows:
December 31,
______________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992 1991
______________________________________________________________________________________________________________
Net sales $113,743 $124,819 $81,270
Net earnings 7,578 6,875 1,338
Total assets 142,776 118,397 121,835
Total liabilities 84,205 74,566 81,851
Total equity $ 58,571 $ 42,481 $38,084
==============================================================================================================
NOTE 6
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) 1993 1992
______________________________________________________________________________________________________________
Land and improvements $ 13,208 $ 11,629
Buildings and improvements 66,218 56,399
Machinery and equipment 170,241 147,016
Transportation equipment 76,368 49,860
Office furniture and fixtures 6,669 6,646
Construction in progress 22,228 4,520
______________________________________________________________________________________________________________
354,932 276,070
Accumulated depreciation and amortization (149,494) (119,507)
______________________________________________________________________________________________________________
Net property, plant and equipment $205,438 $156,563
==============================================================================================================
Approximately $297,000 and $145,000 of interest costs were
capitalized as part of property, plant and equipment in the years
ended December 31, 1993 and 1992, respectively. No interest costs
were capitalized in 1991.
NOTE 7
Unsecured Short-Term Bank Borrowings
______________________________________________________________________
The Company maintains uncommitted credit lines at various banks
for its operations. The Company's credit lines totaled $132,000,000
at December 31, 1993. The credit line arrangements do not require
compensating fees or balances. Shown below is a summary of short-term
bank borrowing activity:
December 31,
______________________________________________________________________________________________________________
(Thousands of dollars, except percent amounts) 1993 1992 1991
______________________________________________________________________________________________________________
Unsecured notes payable to banks at year-end $ 16,055 $ 4,698 $ 5,362
Interest rate at year-end 3.65% 3.75% 4.90%
Average short-term borrowings at month-end $ 7,877 $ 8,461 $ 4,927
Weighted average interest rate 3.75% 4.27% 6.09%
Peak month-end short-term borrowings $ 16,055 $ 14,860 $ 8,778
==============================================================================================================
NOTE 8
Income Taxes
______________________________________________________________________
Effective January 1, 1993, the Company adopted SFAS 109. The
cumulative effect of implementation of SFAS 109 at January 1, 1993
resulted in an increase to earnings of $20.1 million or $13.50 per
common share. This increase was principally due to tax rate
differences and the reversal of deferred taxes on undistributed
earnings of certain foreign subsidiaries invested overseas that
management believes are permanently invested. Prior year financial
statements have not been restated. Deferred income taxes for the year
ended December 31, 1993 includes $0.6 million due to an increase in
corporate tax rates.
Total income taxes for the years ended December 31, 1993, 1992
and 1991 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:
Years ended December 31,
______________________________________________________________________________________________________________
(Thousands of dollars, except percent amounts) 1993 1992 1991
_______________________________________________ __________________ __________________ ____________________
% of % of % of
Pretax Pretax Pretax
Amount Earnings Amount Earnings Amount Earnings
_______________________________________________ ___________________ ___________________ ___________________
Computed tax expense on earnings before
income taxes and cumulative effect of
a change in accounting principle $ 7,932 35.0% $14,817 34.0% $ 9,394 34.0%
Adjustments to tax expense attributable to:
Foreign tax differences (1,181) (5.2) (500) (1.1) (333) (1.2)
Tax-exempt investment income (424) (1.6) (603) (1.4) (650) (2.4)
Nondeductible foreign subsidiary losses -- -- 70 .1 (1,033) (3.8)
Utilization of foreign tax credit
carryforwards -- -- (889) (2.0) -- --
State income taxes, net of Federal benefit 465 1.8 840 1.9 401 1.5
Other 54 .2 (1,232) (2.8) (1,392) (5.0)
________________________________________________ __________________ __________________ ____________________
$ 6,846 30.2% $12,503 28.7% $ 6,387 23.1%
==============================================================================================================
<FN>
The components of income tax expense for the years ended December 31, 1993, 1992 and 1991 are as follows:
Years ended December 31,
______________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992 1991
______________________________________________________________________________________________________________
Current:
Federal $11,017 $20,297 $ 6,427
State and local 1,225 2,083 998
Deferred benefit (5,396) (9,877) (1,038)
______________________________________________________________________________________________________________
$ 6,846 $12,503 $ 6,387
===============================================================================================================
Components of the net deferred income tax liability at
December 31, 1993 and January 1, 1993 are as follows (in thousands):
December 31, January 1,
1993 1993
------------ -----------
Deferred income tax liabilities:
Cash basis farming
adjustment $ 19,036 $ 18,549
Undistributed earnings of
foreign subsidiaries 2,539 3,013
Depreciation 1,411 1,912
Other 929 --
------- --------
23,915 23,474
------- --------
Deferred income tax assets:
Reserves/accruals 9,168 3,861
Losses of foreign subsidiaries 2,881 2,799
Other 1,978 1,448
------ -------
14,027 8,108
------ -------
Valuation allowance 2,881 2,799
------ -------
Net deferred income tax
liability $12,769 $ 18,165
====== =======
The valuation allowance required under SFAS 109 represents
accumulated losses on certain foreign subsidiaries that will not be
recognized without future liquidation or sale of these subsidiaries.
At December 31, 1993, 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 permanently invested such earnings in
these foreign operations. Should such accumulated earnings be
distributed, the resulting Federal income taxes would amount to
approximately $12,000,000.
The sources of deferred income taxes resulting from timing
differences in the recognition of revenue and expense for income tax
and financial statement purposes for the years ended December 31, 1992
and 1991 are as follows:
Years ended December 31,
- ---------------------------------------------------------------------------------------------------------------
(Thousands of dollars) 1992 1991
- ---------------------------------------------------------------------------------------------------------------
Undistributed earnings of foreign consolidated subsidiaries,
net of Federal income taxes currently payable by the Company $ 1,327 $ (443)
Installment sale (9,451) (256)
Accelerated depreciation (310) 378
Other, net (1,443) (717)
______________________________________________________________________________________________________________
$(9,877) $(1,038)
==============================================================================================================
NOTE 9
Long-Term Debt
______________________________________________________________________________________________________________
A summary of long-term debt at the end of each year is as follows:
December 31,
______________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992
______________________________________________________________________________________________________________
Term Loans $166,274 $ 40,629
Industrial development revenue bonds (IDRB's) at variable interest rates 33,500 33,500
Other 3,949 4,592
______________________________________________________________________________________________________________
203,723 78,721
Current maturities of long-term debt (9,217) (598)
______________________________________________________________________________________________________________
Long-term debt, less current maturities $194,506 $ 78,123
==============================================================================================================
In December 1993, the Company issued $100,000,000 in unsecured
Senior Notes to various lenders, the proceeds of which are to be used
for the construction of hog production and processing facilities and
for general corporate purposes. The notes bear interest at 6.49% and
mature in equal installments of $20,000,000 on December 1, 2001, 2002,
2003, 2004 and 2005.
At December 31, 1993, $33,500,000 IDRB's were outstanding with
$7,000,000 due in 2004, $8,000,000 due in 2005, $9,500,000 due in
2012, $4,300,000 due in 2017 and $4,700,000 due in 2019. The average
interest rate incurred on these bonds amounted to 2.52%, 3.10% and
4.97% for the years ended December 31, 1993, 1992 and 1991,
respectively. Redemption of the bonds is assured under irrevocable
bank letters of credit issued by major banks. Although the bond
issues mature in 2004, 2005, 2012, 2017 and 2019, for financial
reporting purposes, the bonds are deemed to mature in 1995, 1996, 1997
and 1998, the years in which the bank letters of credit and committed
extensions thereto expire. Poultry processing facilities, having a
depreciated cost of $28,992,000 at December 31, 1993, secure the 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 $230,000,000.
At December 31, 1993, term loans relating to the acquisition of
two cargo vessels totalled $19,645,000. These notes are payable in
quarterly installments of $570,000 through January 2000 with the
balance of $5,300,000 payable in April 2000, bear interest at 6.47%
and are secured by a first mortgage on the vessels. In June 1993, a
term loan of $6,000,000 was obtained as part of the financing for the
hog production and processing facilities. The debt matures in 1996
and bears interest at 3.0%, payable quarterly.
In March 1992, the Company obtained a $10,000,000 term loan for
working capital purposes. This term loan matures in 1997 with interest
payable quarterly at 1/2% above the London Interbank Offered Rate.
Term loans totaling $12,629,000 at December 31, 1993 and 1992,
mature as follows: $5,300,000 in 1994 and $7,329,000 in 1997 with
interest payable quarterly at 5/8% and 3/4% above the London Interbank
Offered Rate, respectively. The average interest rate on these loans
for the years ended December 31, 1993, 1992 and 1991 were 3.9%, 5.2%
and 6.9%, respectively.
At December 31, 1993 and 1992, a term loan related to the
construction of a power generating barge totaled $18,000,000. This
term loan matures in 1998, bears interest at 7.83% payable quarterly
and is secured by marketable securities with a carrying value of
approximately $22,469,000.
The fair value of the Company's long-term debt is determined by
comparing interest rates for debt with similar terms and maturities.
At December 31, 1993, the fair value of the Company's long-term debt
was approximately $202,219,000.
The Company has entered interest rate exchange agreements with a
bank to limit its exposure to the interest rate volatility of its
variable rate long-term debt. These agreements involve transactions
with notional amounts of $80,000,000 and $50,000,000 at December 31,
1993 and 1992, respectively. The agreements have maturity dates
ranging from 1996 to 2003, and result in a weighted average fixed
interest rate of 6.09% and 6.17% at December 31, 1993 and 1992,
respectively, on an approximate 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 interest
rate 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 $3,535,000 to
terminate the interest rate exchange agreements at December 31, 1993.
Annual maturities of long-term debt at December 31, 1993 are as
follows: $9,217,000 in 1994, $10,450,000 in 1995, $17,873,000 in
1996, $35,648,000 in 1997, $20,319,000 in 1998, and $110,216,000
thereafter.
NOTE 10
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:
Years ended December 31,
______________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992 1991
______________________________________________________________________________________________________________
Service cost-benefits earned during the period $ 2,678 $ 2,653 $ 2,006
Interest cost on projected benefit obligation 1,650 1,382 1,165
Actual return on assets (1,714) (1,178) (1,069)
Net amortization and deferral 540 168 357
______________________________________________________________________________________________________________
Net periodic pension cost $ 3,154 $ 3,025 $ 2,459
==============================================================================================================
Assumptions used in determining pension information were:
Years ended December 31,
______________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992 1991
______________________________________________________________________________________________________________
Expected long-term rate of return on assets 8.00% 8.00% 7.75%
Discount rate 7.25% 8.00% 7.75%
Long-term rate of increase in compensation levels 5.00% 6.00% 7.50%
______________________________________________________________________________________________________________
<FN>
The funded status and accrued pension cost at December 31, 1993 and 1992 for all active defined benefit plans is
shown below:
December 31,
________________________________________________________________________________________________________________________
(Thousands of dollars) 1993 1992
_______________________________________________________ ______________________________ ______________________________
Actuarial present value of benefit obligations:
Vested benefit obligation $18,928 $13,593
Nonvested benefit obligation 1,927 1,683
_______________________________________________________ _______________________________ _____________________________
Accumulated benefit obligation 20,855 15,276
Effects of projected future compensation levels 1,919 5,392
_______________________________________________________ _______________________________ _____________________________
Projected benefit obligation 22,774 20,668
Plan assets at fair value 19,710 15,937
_______________________________________________________ _______________________________ _____________________________
Projected benefit obligation in excess of plan assets 3,064 4,731
Recognized minimum liability 248 --
Unrecognized net liability at transition (649) (736)
Unrecognized net gain (loss) 201 (1,116)
_______________________________________________________ _______________________________ _____________________________
Accrued pension cost $ 2,864 $ 2,879
===================================================================================================================
On December 31, 1993, the Company froze future benefits under
the defined benefit pension plans provided to its domestic salaried
and clerical employees. Effective January 1, 1994, these plans were
replaced by 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 of final
average pay. In lieu of participating in the new plan, certain
executives became participants in a nonqualified supplemental
retirement plan. No expense has been accrued for the nonqualified
plan as of December 31, 1993.
With the sale of its domestic flour milling operation, the
Company froze certain pension plans and fully vested the covered
employees. The excess of the actuarial present value of the
accumulated plan benefits over the plan assets was recorded as a
liability at the date of sale. Payments made, and the portion of the
pension liability due currently, amounted to $198,000, $181,000 and
$209,000 for the years ended December 31, 1993, 1992 and 1991,
respectively.
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 $1,096,000, $998,000, and $731,000 for the
years ended December 31, 1993, 1992 and 1991, respectively.
NOTE 11
Contingencies
In April 1990, a derivative action was commenced by a stockholder
of the Company. The action named as defendants Seaboard Corporation,
the Parent Company and the three then directors of the Company
alleging breaches of fiduciary duty by the Directors of Seaboard
Corporation. In November, 1993, the plaintiff filed motion to amend
the complaint to add counts accusing certain members of senior
management of improprieties intended to enrich themselves at the
Company's expense. The defendants are vigorously contesting all
allegations. In the opinion of management, this action is not
expected to result in a judgement having a materially adverse effect
on the consolidated financial statements of the Company.
The Company is also subject to 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 judgement having a
materially adverse effect on the consolidated financial statements of
the Company.
NOTE 12
Segment Information
______________________________________________________________________
The Company principally operates in two business segments: food
production and processing 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. Business segment information for the years
ended December 31, 1993, 1992 and 1991 is as follows:
________________________________________________________________________________
(Thousands of dollars) 1993
________________________________________________________________________________
Food Unallocated
Production Corporate
and Items and
Processing Transportation Other Eliminations Total
________________________________________________________________________________
Sales to
unaffiliated customers $940,369 182,523 19,252 -- 1,142,144
Intersegment sales -- 8,923 -- (8,923) --
________________________________________________________________________________
Net sales $940,369 191,446 19,252 (8,923) 1,142,144
================================================================================
Operating income (loss) $ 4,733 21,514 (390) (4,812) 21,045
======================================================================
Income from foreign subsidiaries
not consolidated 2,177
Interest income 7,037
Interest expense (7,067)
Other corporate expense (529)
________________________________________________________________________________
Earnings before income taxes and cumulative
effect of a change in accounting principle $ 22,663
================================================================================
Identifiable assets $273,198 86,597 23,893 -- 383,688
======================================================================
Corporate assets 263,644
________________________________________________________________________________
Total assets $647,332
================================================================================
Depreciation
and amortization $ 23,166 9,080 1,450 733 34,429
================================================================================
Capital expenditures
(excluding acquisitions)$ 51,115 35,291 47 875 87,328
================================================================================
________________________________________________________________________________
(Thousands of dollars) 1992
________________________________________________________________________________
Food Unallocated
Production Corporate
and Items and
Processing Transportation Other Eliminations Total
________________________________________________________________________________
Sales to
unaffiliated customers $863,873 170,527 19,255 -- 1,053,655
Intersegment sales -- 8,635 -- (8,635) --
________________________________________________________________________________
Net sales $863,873 179,162 19,255 (8,635) 1,053,655
================================================================================
Operating income (loss) $ 17,602 21,552 4,371 (4,014) 39,511
======================================================================
Income from foreign subsidiaries
not consolidated 4,132
Interest income 7,009
Interest expense (6,580)
Other corporate expense (494)
________________________________________________________________________________
Earnings before income taxes $ 43,578
================================================================================
Identifiable assets $255,719 51,600 28,895 -- 336,214
======================================================================
Corporate assets 148,907
________________________________________________________________________________
Total assets $485,121
================================================================================
Depreciation
and amortization $ 18,574 8,813 1,511 703 29,601
================================================================================
Capital expenditures (excluding
acquisitions) $ 30,423 3,817 115 931 35,286
================================================================================
________________________________________________________________________________
(Thousands of dollars) 1991
________________________________________________________________________________
Food Unallocated
Production Corporate
and Items and
Processing Transportation Other Eliminations Total
________________________________________________________________________________
Sales to
unaffiliated customers $715,346 142,527 18,001 -- 875,874
Intersegment sales -- 9,154 -- (9,154) --
________________________________________________________________________________
Net sales $715,346 151,681 18,001 (9,154) 875,874
================================================================================
Operating income (loss) $ (198) 17,953 3,433 (3,318) 17,870
======================================================================
Income from foreign subsidiaries
not consolidated 4,186
Interest income 13,103
Interest expense (7,691)
Other corporate income 160
________________________________________________________________________________
Earnings before income taxes $ 27,628
================================================================================
Identifiable assets $207,487 56,605 28,368 -- 292,460
======================================================================
Corporate assets 165,585
________________________________________________________________________________
Total assets $458,045
================================================================================
Depreciation
and amortization $ 15,555 8,429 1,524 574 26,082
================================================================================
Capital expenditures (excluding
acquisitions) $ 15,412 3,842 27 959 20,240
================================================================================
The following is a summary of domestic and foreign net sales,
operating income and identifiable assets included in the consolidated
financial statements:
Years ended December 31,
________________________________________________________________________________
(Thousands of dollars) 1993 1992 1991
________________________________________________________________________________
Net sales:
Domestic $ 983,433 $ 962,892 $ 802,357
Foreign 158,711 90,763 73,517
________________________________________________________________________________
$1,142,144 $1,053,655 $ 875,874
================================================================================
Operating income:
Domestic $ 15,959 $ 31,469 $ 11,203
Foreign 5,086 8,042 6,667
________________________________________________________________________________
$ 21,045 $ 39,511 $ 17,870
================================================================================
Identifiable assets:
Domestic $ 536,223 $ 345,927 $ 350,230
Foreign 111,109 139,194 107,815
________________________________________________________________________________
$ 647,332 $ 485,121 $ 458,045
================================================================================
Included in identifiable assets at December 31, 1993 are foreign
receivables of approximately $21,565,000 which represent more of a
collection risk than the Company's domestic receivables. The Company
believes that its allowance for doubtful receivables is adequate.
APPENDIX
Seaboard Corporation and Subsidiaries
Graph data
Years ended December 31,
1989 1990 1991 1992 1993
Summary Of Selected Financial Data:
TOTAL ASSETS (THOUSANDS OF DOLLARS) 367,801 422,488 458,045 485,121 647,332
STOCKHOLDERS' EQUITY (THOUSANDS OF DOLLARS) 189,448 218,753 239,250 269,581 304,356
EARNINGS PER COMMON SHARE (DOLLARS) 12.56 20.19 14.28 20.89 24.13
Management's Discussion and Analysis of Financial
Condition and Results of Operations:
TOTAL CAPITALIZATION (THOUSANDS OF DOLLARS) 306,769 346,217 357,186 390,676 521,047
CURRENT RATIO 2.73 :1 2.69 :1 2.82 :1 3.22 :1 3.19 :1
WORKING CAPITAL (THOUSANDS OF DOLLARS) 105,345 128,711 183,825 209,811 276,447
CAPITAL EXPENDITURES (THOUSANDS OF DOLLARS) 51,960 41,108 20,240 35,286 87,328
NET SALES (THOUSANDS OF DOLLARS) 518,759 557,328 875,874 1,053,655 1,142,144
NET EARNINGS (THOUSANDS OF DOLLARS) 18,678 30,049 21,241 31,075 35,891