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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock American Stock
$1.00 Par Value Exchange
Securities registered pursuant of Section 12(g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. X
The aggregate market value of 348,815 shares of voting stock
held by nonaffiliates on January 31, 2002 was approximately
$107,469,902, based on the closing price of $308.10 per share.
As of March 1, 2002, the number of shares of common stock
outstanding was 1,487,519.75.
DOCUMENTS INCORPORATED BY REFERENCE
Part I, item 1(b), a part of item 1(c)(1) and the financial
information required by item 1(d) and Part II, items 5, 6, 7, 7A
and 8 are incorporated by reference to the Registrant's Annual
Report to Stockholders furnished to the Commission pursuant to
Rule 14a-3(b).
Part III, a part of item 10 and items 11, 12 and 13 are
incorporated by reference to the Registrant's definitive proxy
statement filed pursuant to Regulation 14A for the 2002 annual
meeting of stockholders (the "2002 Proxy Statement").
This Form 10-K and its Exhibits (Form 10-K) contain forward-
looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which may include statements
concerning projection of revenues, income or loss, capital
expenditures, capital structure or other financial items,
statements regarding the plans and objectives of management for
future operations, statements of future economic performance,
statements of the assumptions underlying or relating to any of
the foregoing statements and other statements which are other
than statements of historical fact. These statements appear in a
number of places in this Form 10-K and include statements
regarding the intent, belief or current expectations of the
Company and its management with respect to (i) the cost and
timing of the completion of new or expanded facilities, (ii) the
Company's financing plans, (iii) the price of feed stocks and
other materials used by the Company, (iv) the sale price for pork
products from such operations, (v) the price for the Company's
products and services, (vi) the effect of the devaluation of the
Argentine peso, (vii) the effect of the changes to the produce
division operations on the consolidated financial statements of
the Company, (viii) the potential effect of the proposed U.S.
Farm Bill on the Company's Pork Division, (ix) the potential
impact of various environmental actions pending or threatened
against the Company or (x) other trends affecting the Company's
financial condition or results of operations. Readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially as a
result of various factors. The accompanying information
contained in this Form 10-K, including without limitation, the
information under the headings "Management's Discussion and
Analysis of Financial Condition and Results of Operations",
identifies important factors which could cause such differences.
PART I
Item 1. Business
(a) General Development of Business
Seaboard Corporation, a Delaware corporation, the successor
corporation to a company first incorporated in 1928, and
subsidiaries ("Registrant" or "Company"), is a diversified
international agribusiness and transportation company which is
primarily engaged domestically in pork production and processing,
and cargo shipping. Overseas, the Company is primarily engaged
in commodity merchandising, flour and feed milling, sugar
production, and electric power generation. See Item 1(c) (1)
(ii) below for a discussion of developments in specific segments.
(b) Financial Information about Industry Segments
The information required by Item 1 relating to Industry
Segments is hereby incorporated by reference to Note 13 of
Registrant's Consolidated Financial Statements appearing on pages
47 through 50 of the Registrant's Annual Report to Stockholders
furnished to the Commission pursuant to Rule 14a-3(b) and
attached as Exhibit 13 to this Report.
(c) Narrative Description of Business
(1) Business Done and Intended to be Done by the Registrant
(i) Principal Products and Services
Registrant produces hogs and processes pork in the United
States and sells fresh pork to further processors, foodservice
and retail, primarily in the western half of the United States
and foreign markets. Hogs produced at Company owned or leased
facilities as well as third-party hogs are primarily processed at
the Company's processing plant.
Registrant operates an ocean liner service for containerized
cargo primarily between Florida and ports in the Caribbean Basin
and Central and South America, and also operates a cargo terminal
facility at the Port of Houston.
Registrant markets grains, oilseeds and oilseed products in
bulk to affiliated companies and third party customers primarily
in Africa, the Caribbean, Central and South America, and the
Eastern Mediterranean. Registrant operates its own bulk carriers
primarily in the Atlantic Basin to conduct a portion of its
commodity trading activities and charters third party bulk
carriers to conduct commodity trading activities and transport
bulk goods on behalf of third party customers. Registrant, by
itself or through non-controlled affiliates, operates milling
businesses in Africa, the Caribbean and South America.
Registrant operates two power generating facilities in the
Dominican Republic, and produces and refines sugarcane and
produces and processes citrus in Argentina.
Registrant processes jalapeno peppers in Honduras.
Registrant also brokers shrimp for independent Honduran growers.
The majority of these products are transported using the
Registrant's shipping line and distribution facility in Miami,
Florida. The Registrant, through a non-controlled affiliate,
produces wine in Bulgaria for distribution primarily throughout
Europe.
The information required by Item 1 with respect to the
amount or percentage of total revenue contributed by any class of
similar products or services which account for 10% or more of
consolidated revenue in any of the last three fiscal years is
hereby incorporated by reference to Note 13 of Registrant's
Consolidated Financial Statements appearing on pages 47 through
50 of the Registrant's Annual Report to Stockholders furnished to
the Commission pursuant to rule 14a-3(b) and attached as Exhibit
13 to this report.
(ii) Status of Product or Segment
In May 2001, the Registrant completed construction of a feed
mill in Okeene, Oklahoma for the Pork Division. In March 2001,
the Registrant terminated previously announced plans to commence
construction during 2001 of a second pork processing plant at a
location in Northeast Kansas. In February 2002, the Company
announced plans to build a second processing plant in northern
Texas along with related plans to expand its vertically
integrated hog production facilities. These plans are contingent
on obtaining necessary permits, commitments for a sufficient
quantity of hogs to operate the plant, and no statutory
impediments being imposed by the proposed farm bill currently
being debated in the U.S. Congress as discussed below. The
Company also anticipates pursuing various contract grower
finishing arrangements.
On February 12, 2002, the United States Senate passed a Farm
Bill, (S. Bill 1731), which includes a provision (the "Johnson
Amendment") which prohibits packers, such as the Company, from
owning or controlling livestock intended for slaughter for more
than 14 days prior to the slaughter. The Johnson Amendment also
contains a transition rule applicable to packers of pork
providing for an effective date which is 18 months after
enactment of the Act. The U.S. House of Representatives also
passed a Farm Bill (H. Bill 2646), but this Bill does not include
the prohibition on packers owning or controlling livestock. A
committee of Conferees, consisting of members of both the Senate
and the House, has been established to reconcile the differences
between the two Bills, including the Johnson Amendment. If a
uniform Bill is agreed upon by the committee, the Farm Bill will
be voted upon by both the Senate and the House and, if enacted,
will be sent to the President for him to sign into law or to
veto.
If the Farm Bill containing the Johnson Amendment becomes
law, it could have a material adverse effect on the Company, its
operations and its strategy of vertical integration in the pork
business. Currently, the Company owns and operates production
facilities and owns swine and produces approximately three
million hogs per year with construction in progress for an
additional half million hogs per year. If enacted, the Johnson
Amendment would prohibit the Company from owning or controlling
hogs, and thus would require the Company to divest these
operations, possibly at prices which are below the carrying value
of such assets on the Company's balance sheet, or otherwise
restructure its ownership and operation.
The Johnson Amendment could also be construed as prohibiting
or restricting the Company from engaging in various contractual
arrangements with third party hog producers, such as traditional
contract finishing arrangements. Accordingly, the Company's
ability to contract for the supply of hogs to its processing
facility may be significantly, negatively impacted.
The Company, along with industry groups and other similarly
situated companies are vigorously lobbying against enactment of
the Johnson Amendment.
The Registrant owns an Argentine company involved in sugar
and citrus operations. In January 2002, the Argentine peso was
devalued resulting in a write-down in the net assets of this
Argentine company (see Note 12 of the Registrant's Consolidated
Financial Statements for further discussion). The economy of
Argentina has been severely, negatively impacted by the
devaluation and the continuing recession. The Registrant cannot
presently predict the effect the current conditions will have on
the Company's future business or financial position and results
of operations, but further devaluation will result in additional
asset write-downs.
Through September 2001, the Registrant's power generating
facilities in the Dominican Republic sold 100% of their
production to a state-owned electric company. Subsequent to
September 29, 2001, the Company began selling power directly to
the power distribution companies at spot market prices. The
prices realized and ultimate profitability are now subject to the
effects of market conditions and competition. In December 2001,
the Registrant sold a 10% minority interest in its power barge
placed in service during the fourth quarter of 2000. As part of
the sale agreement, the buyer has the option to sell its interest
back to the Company at any time until December 31, 2004 for book
value at the time of sale.
In the fourth quarter of 2001, Registrant ceased pickle,
pepper and shrimp farming operations and is considering various
strategic future alternatives for these operations and its shrimp
processing plant in Honduras. Certain of these farms are
currently leased and operated by local farmers under short-term
agreements.
In May 2001, the Registrant exchanged ownership interest in
a joint venture in Maine engaged in the production and processing
of salmon and other seafood products for shares of common stock
of Fjord Seafood ASA.
(iii) Sources and Availability of Raw Materials
None of Registrant's businesses utilize material amounts of
raw materials that are dependent on purchases from one supplier
or a small group of dominant suppliers.
(iv) Patents, Trademarks, Licenses, Franchises and Concessions
The following names of the Registrant's businesses are
registered trademarks: Seaboard, Seaboard Farms and Seaboard
Marine.
The Company's Power Division has a local environmental
permit and permits to operate power generation facilities in the
Dominican Republic.
Part of the sales within the Registrant's Sugar and Citrus
segment are made under the Chango brand in Argentina. Patents,
trademarks, franchises, licenses and concessions are not material
to any of Registrant's other segments.
(v) Seasonal Business
Profits from processed pork are generally higher in the fall
months. Sugar prices in Argentina are generally lower during the
typical sugarcane harvest period between June and November. The
Registrant's other segments are not seasonally dependent to any
material extent.
(vi) Practices Relating to Working Capital Items
There are no unusual industry practices or practices of
Registrant relating to working capital items.
(vii) Depending on a Single Customer or Few Customers
Registrant does not have sales to any one customer equal to
10% or more of Registrant's consolidated revenues. The power
segment sells power in the Dominican Republic on the spot market
accessed by three local distribution companies, a state-owned
electric company, and limited other customers. No other segments
have sales to a few customers which, if lost, would have a
material adverse effect on any such segment or on Registrant
taken as a whole.
(viii) Backlog
Backlog is not material to Registrant's businesses.
(ix) Government Contracts.
No material portion of Registrant's business involves
government contracts.
(x) Competitive Conditions
Competition in Registrant's pork segment comes from a
variety of national and regional producers and is based primarily
on product quality, customer service and price. According to
recent trade publications, Registrant ranks as one of the
nation's top five pork producers (based on sows in production)
and top ten pork processors (based on daily processing capacity).
The Registrant's ocean liner service for containerized
cargoes faces competition based on price and customer service.
Registrant believes it is among the top five ranking ocean liner
services for containerized cargoes in the Caribbean Basin based
on cargo volume.
The Registrant's sugar business faces significant
competition for sugar sales in the local Argentine market. Sugar
prices in Argentina are higher than world markets due to current
Argentine government price protection policies.
The Registrant's power division is located in the Dominican
Republic. Power generated by this division is sold on the spot
market at prices primarily based on market conditions rather than
cost-based rates.
(xi) Research and Development Activities
Registrant does not engage in material research and
development activities.
(xii) Environmental Compliance
Registrant is subject to numerous Federal, state and local
provisions relating to the environment which require the
expenditure of funds in the ordinary course of business. In the
next fiscal year, Registrant anticipates spending approximately
$2.5 million in order to ensure continued compliance with
applicable Federal, state and local environmental provisions with
respect to Registrant's Dorman Sow Farm. No other significant
amounts are anticipated to be expended for these purposes,
including with respect to the items disclosed in Item 3. Legal
Proceedings, except as incurred in the ordinary course of
business.
(xiii) Number of Persons Employed by Registrant
As of December 31, 2001, Registrant, excluding non-
consolidated foreign affiliates, had 9,502 employees, of whom
5,574 were employed in the United States.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales
The financial information required by Item 1 relating to
export sales is hereby incorporated by reference to Note 13 of
Registrant's Consolidated Financial Statements appearing on pages
47 through 50 of Registrant's Annual Report to Stockholders
furnished to the Commission pursuant to Rule 14a-3(b) and
attached as Exhibit 13 to this report.
Registrant considers its relations with the governments of
the countries in which its foreign subsidiaries and affiliates
are located to be satisfactory, but these foreign operations are
subject to the normal risks of doing business abroad, including
expropriation, confiscation, war, insurrection, civil strife and
revolution, currency inconvertibility and devaluation, and
currency exchange controls. To minimize these risks, Registrant
has insured certain investments in its affiliate flour mills in
Democratic Republic of Congo, Ecuador, Haiti, Lesotho, Mozambique
and Zambia, to the extent deemed appropriate against certain of
these risks with the Overseas Private Investment Corporation, an
agency of the United States Government.
Item 2. Properties
(1) Pork
The Registrant owns a hog processing plant in Oklahoma with
a double shift capacity of approximately four and one-half
million hogs per year. Hog production facilities currently
consist of a combination of owned and leased farrowing, nursery
and finishing units supporting 181,000 sows. Registrant
currently operates six feed mills which have a combined capacity
to produce approximately 1,500,000 tons of feed annually to
support the hog production. These facilities are located in
Oklahoma, Texas, Kansas and Colorado.
(2) Marine
Registrant leases a 135,000 square foot warehouse and 70
acres of port terminal land and facilities in Florida which are
used in its containerized cargo operations. Registrant owns
seven ocean cargo vessels with deadweights ranging from 2,813 to
14,545 metric tons. Registrant timecharters, under short-term
agreements, between twelve and eighteen containerized ocean cargo
vessels with deadweights ranging from 2,600 to 17,511 metric-
tons. Registrant also bareboat charters, under long-term lease
agreements, three containerized ocean cargo vessels with
deadweights ranging from 12,169 to 12,648 metric tons.
Registrant owns or leases approximately 30,000 dry, refrigerated
and specialized containers and related equipment. Registrant
also leases a 62 acre cargo handling and terminal facility in
Houston including a 550,000 square foot warehouse and a 240,000
square foot facility with freezer storage and office space.
(3) Commodity Trading and Milling
The Registrant owns in whole or in part milling operations
in 12 countries with capacity to mill over 6,600 metric tons of
wheat and maize per day. In addition, Registrant has feed mill
capacity of 100 metric tons per hour to produce formula animal
feed. The milling operations located in Angola, Democratic
Republic of Congo, Ecuador, Guyana, Haiti, Kenya, Lesotho,
Mozambique, Nigeria, Republic of Congo, Sierra Leone and Zambia
own their facilities; in Kenya, Lesotho, Mozambique, Nigeria,
Republic of Congo and Sierra Leone the land the mills are located
on is leased under long-term agreements. The Registrant owns
seven 9,000 metric-ton deadweight dry bulk carriers and
timecharters, under short-term agreements, between five and ten
bulk carrier ocean vessels with dead weights ranging from 8,000
to 60,000 metric tons.
(4) Sugar and Citrus
Registrant has a controlling interest in an Argentine
company which owns approximately 39,000 acres of planted
sugarcane and approximately 3,100 acres of planted citrus. In
addition, this company owns a sugar mill with a capacity to
process approximately 170,000 metric tons of sugar per year.
(5) Power
Registrant owns two floating power generating facilities,
with a combined rated capacity of 112 megawatts, both located in
Santo Domingo, Dominican Republic.
(6) Other
Registrant owns a jalapeno pepper processing plant in
Honduras and leases 40,000 square feet of refrigerated space and
70,000 square feet of dry space in the Port of Miami for
warehousing produce products.
Management believes that the Registrant's present facilities
are generally adequate and suitable for its current purposes. In
general, facilities are fully utilized; however, seasonal
fluctuations in inventories and production may occur as a
reaction to market demands for certain products. Certain foreign
milling operations may operate at less than full capacity due to
low demand related to poor consumer purchasing power.
Item 3. Legal Proceedings
The Company is subject to legal proceedings related to the
normal conduct of its business, including as a defendant in a
maritime arbitration claim more fully described in Note 11 of the
consolidated financial statements.
Sierra Club Claims
On June 2, 2000, a Complaint was filed by the Sierra Club
against the Company, Seaboard Farms, Inc. and Shawnee Funding,
Limited Partnership in the United States District Court for the
Western District of Oklahoma, No. CIV -00-979-L, alleging
violations of the Clean Water Act ("CWA") at the Company's Dorman
Sow Farm in Beaver County, Oklahoma. Sierra Club later amended
its complaint to add claims under the Comprehensive Environmental
Response Compensation & Liability Act ("CERCLA") and the Resource
Conservation and Recovery Act ("RCRA"). The Complaint seeks
declaratory and injunctive relief, civil penalties, and
attorneys' fees.
The Complaint asserts violations of the CWA on account of
alleged discharges to waters of the United States, failure to
obtain a National Pollutant Discharge Elimination System
("NPDES") permit for a concentrated animal feeding operation
("CAFO"), failure to obtain a NPDES general permit for storm
water discharges associated with construction activities, and the
filling of wetland areas. The Complaint also asserts violations
of CERCLA, on account of an alleged failure to report routine air
emissions of ammonia, and RCRA, on account of the alleged "open
dumping" of hog waste allegedly leaking from wastewater treatment
lagoons and the creation of an imminent and substantial
endangerment to human health and the environment as a result of
such alleged leaking.
Sierra Club seeks the statutory maximum civil penalty of
$27,500 per day of violation for each alleged violation of the
CWA and CERCLA. Sierra Club has asserted a claim for penalties
under RCRA, but RCRA does not authorize civil penalties for the
particular violations alleged. In addition, Sierra Club seeks
injunctive relief, including a temporary shutdown of the farm
until it obtains an NPDES permit or, alternatively, improvements
to the farm's wastewater handling system. Sierra Club also
requests attorney's fees, which the court could award in its
discretion in the event that Sierra Club is successful on the
merits.
In addition to the lawsuit that has been filed with respect
to the Dorman Sow Farm, Sierra Club has alleged violations of
reporting requirements under CERCLA and The Emergency Planning
and Community Right-to-Know Act at other farms owned by Seaboard
Farms and has stated its intent to file suit concerning such
alleged violations.
The Company believes it has meritorious defenses to all of
the claims of the Sierra Club but cannot predict with certainty
the outcome of the litigation.
EPA Claims Concerning Farms in Major County and Kingfisher
County, Oklahoma
On June 7, 2001, the United States Environmental Protection
Agency, Region 6 ("EPA") issued an Emergency Administrative Order
(the "SDWA Order"), pursuant to Section 1431(a) of the Safe
Drinking Water Act, 42 U.S.C. Sec. 300i(a) (the "SDWA"), against
the Company's subsidiary, Seaboard Farms, Inc. ("Seaboard
Farms"), Shawnee Funding, Limited Partnership, and PIC
International Group, Inc. ("PIC") (collectively, "Respondents").
The SDWA Order alleges that the Respondents have violated the
SDWA, through the operation of five swine farms located in Major
County and Kingfisher County, Oklahoma, and the introduction of a
contaminant (nitrate) into groundwater, creating an imminent and
substantial risk of harm from contamination of domestic wells.
The SDWA Order requires Respondents to sample domestic wells
within a broad area potentially downgradient of the five farms
and to provide alternative domestic water supplies for users of
certain wells. In the event the Respondents fail to comply with
the SDWA Order, the EPA may commence a civil action and can seek
a civil penalty of up to $15,000 per day, per violation.
The Company does not believe the swine farms are the source
of elevated nitrates in groundwater. Respondents jointly filed
petitions in the United States Court of Appeals for the Tenth
Circuit, asking the court to set aside, declare invalid, and/or
remand the SDWA Order and other actions by EPA on the grounds
that EPA's actions are arbitrary, capricious, an abuse of
discretion and otherwise not in accordance with law, and have
been taken without observance of procedures required by law.
Briefing in these cases has been stayed while the parties are in
settlement negotiations.
Despite Respondents' dispute with EPA concerning the
validity of the SDWA Order, the Company is cooperating with EPA
and hopes to resolve the matter outside of litigation by agreeing
to conduct sampling of water and supplying alternative water
supplies to certain residences, and without the payment of any
civil penalty. Pursuant to the requirements of the SDWA Order,
as subsequently modified by EPA, Respondents have conducted
sampling of all known domestic wells within the relevant area and
provided alternative water supplies to users of domestic wells at
which nitrate levels have tested above EPA's drinking water
standard.
On June 29, 2001, the EPA filed a Unilateral Administrative
Order (the "RCRA Order"), pursuant to Section 7003 of the
Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Sec. 6973 ("RCRA"), against the same Respondents named in the
SDWA Order: Seaboard Farms, Shawnee Funding, and PIC. The RCRA
Order contains principally the same allegations as the SDWA Order
that leaking infrastructure at the same five swine farms is
causing or could cause contamination of the groundwater. The
RCRA Order alleges that, as a result, Respondents have
contributed to an "imminent and substantial endangerment" within
the meaning of RCRA from the leaking of solid waste in the
lagoons or other infrastructure at the farms. The RCRA Order
requires Respondents to develop and undertake a study to
determine if there has been any contamination from farm
infrastructure and, if contamination has occurred, to develop and
undertake a remedial plan. In the event the Respondents fail to
comply with the RCRA Order, the EPA may commence a civil action
and can seek a civil penalty of up to $5,500 per day, per
violation.
Although the Company disputes the validity of the RCRA Order
on grounds similar to those that support its challenge to the
SDWA Order, the Company is cooperating with EPA in the conduct of
an investigation to resolve EPA's concerns about potential
groundwater contamination.
In addition to the farms identified in the SDWA and RCRA
Orders, EPA has identified additional farms in Major County and
Kingfisher County, Oklahoma, at which EPA believes groundwater
contamination may have occurred. EPA has requested informally
that the Company investigate whether contamination has occurred,
and the Company is considering its response to this request.
The farms that are the subject of the SDWA Order and the
RCRA Order, as well as the additional farms identified by EPA as
potential sources of groundwater contamination, were previously
owned by PIC. PIC is presently providing indemnity and defense
of this matter, reserving its right to contest the obligation to
do so. The Company does not believe there are valid grounds to
contest PIC's obligation to provide the indemnity and defense of
this matter. One indemnity agreement with PIC is subject to a
$5,000,000 limit, but the Company believes that a more general
environmental indemnity agreement would require indemnification
of liability in excess of that amount.
Potential Additional EPA Claims
EPA also has been conducting a broad-reaching investigation
of Seaboard Farms, seeking information as to compliance with the
CWA, CERCLA and the Clean Air Act. Through Information Requests,
EPA has sought information concerning whether Seaboard Farms'
operations may be discharging pollutants to waters of the United
States in violation of the CWA, whether there has been unlawful
filling of "wetlands" within the jurisdiction of the CWA, whether
Seaboard Farms has properly reported emissions of hazardous
substances into the air, and whether some of its farms may be
emitting air pollutants at levels subject to Clean Air Act
permitting requirements. EPA has advised the Company that it
will be seeking additional information and that it will be
alleging violations of law. If EPA does allege such violations,
it may seek to require the Company or Seaboard Farms to obtain
requisite permits in order to engage in operations, in addition
to seeking civil penalties or other relief.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the last quarter of the
fiscal year covered by this report to a vote of security holders.
Executive Officers of Registrant
The following table lists the executive officers and certain
significant employees of Registrant. Generally, each executive
officer is elected at the Annual Meeting of the Board of
Directors following the Annual Meeting of Stockholders and holds
his office until the next such annual meeting or until his
successor is duly chosen and qualified. There are no
arrangements or understandings pursuant to which any executive
officer was elected.
Name (Age) Positions and Offices with Registrant and Affiliates
H. Harry Bresky (76) Chairman of the Board, President and
Chief Executive Officer of Registrant;
President and Treasurer of Seaboard
Flour Corporation (SFC)
Steven J. Bresky (48) Senior Vice President, International Operations
Robert L. Steer (42) Senior Vice President, Treasurer and
Chief Financial Officer
David M. Becker (40) Vice President, General Counsel and
Assistant Secretary
James L. Gutsch (48) Vice President, Engineering
Rodney K. Brenneman (37) President, Seaboard Farms, Inc.
John Lynch (68) President, Seaboard Marine Ltd.
Mr. H. Harry Bresky has served as President and Chief
Executive Officer of Registrant since February 2001 and
previously as President of Registrant since 1967. He has served
as President of SFC since 1987, and as Treasurer of SFC since
1973. Mr. Bresky is the father of Steven J. Bresky.
Mr. Steven J. Bresky has served as Senior Vice President,
International Operations of Registrant since February 2001 and
previously as Vice President of Registrant since April 1989.
Mr. Steer has served as Senior Vice President, Treasurer and
Chief Financial Officer of Registrant since February 2001 and
previously as Vice President, Chief Financial Officer of
Registrant since April 1998 and as Vice President, Finance of
Registrant since April 1996. He has been employed by the
Registrant since 1984.
Mr. Becker has served as Vice President, General Counsel and
Assistant Secretary of Registrant since February 2001 and
previously as General Counsel and Assistant Secretary of
Registrant since April 1998 and as Assistant Secretary of
Registrant since May 1994.
Mr. Gutsch has served as Vice President, Engineering of
Registrant since December 1998. He has been employed by the
Registrant since 1984.
Mr. Brenneman has served as President of Seaboard Farms,
Inc. since June 2001 and previously served as Senior Vice
President and Chief Financial Officer of Seaboard Farms, Inc.
since January 1997 and prior to that, Vice President of Finance
for Seaboard Farms, Inc. since January 1995. Mr. Brenneman has
been employed with the Registrant or Seaboard Farms, Inc. since
1989.
Mr. Lynch has served as President of Seaboard Marine, Ltd.
Since 1998 and previously as Vice President of Seaboard Marine
Ltd. since his employment in 1987.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The information required by Item 5 is hereby incorporated by
reference to "Stock Listing" and "Quarterly Financial Data"
appearing on pages 52 and 8, respectively, of Registrant's Annual
Report to Stockholders furnished to the Commission pursuant to
Rule 14a-3(b) and attached as Exhibit 13 to this Report.
Item 6. Selected Financial Data
The information required by Item 6 is hereby incorporated by
reference to the "Summary of Selected Financial Data" appearing
on page 7 of Registrant's Annual Report to Stockholders furnished
to the Commission pursuant to Rule 14a-3(b) and attached as
Exhibit 13 of this Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by Item 7 is hereby incorporated by
reference to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing on pages 9 through
22 of Registrant's Annual Report to Stockholders furnished to the
Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13
to this Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by Item 7A is hereby incorporated
by reference to the material under the captions "Derivative
Instruments and Hedging Activities" within Note 1 of the
Registrant's Consolidated Financial Statements appearing on page
32, and to the material under the caption "Derivative
Information" within "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing on pages
20 through 22 of the Registrant's Annual Report to Stockholders
furnished to the Commission pursuant to Rule 14a-3(b) and
attached as Exhibit 13 to this Report.
Item 8. Financial Statements and Supplementary Data
The information required by Item 8 is hereby incorporated by
reference to Registrant's "Quarterly Financial Data,"
"Independent Auditors' Report," "Consolidated Statements of
Earnings," "Consolidated Balance Sheets," "Consolidated
Statements of Stockholders' Equity," "Consolidated Statements of
Cash Flows" and "Notes to Consolidated Financial Statements"
appearing on pages 8 and 23 through 51 of Registrant's Annual
Report to Stockholders furnished to the Commission pursuant to
Rule 14a-3(b) and attached as Exhibit 13 to this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of Registrant
Refer to "Executive Officers of Registrant" in Part I.
Information required by this item relating to directors of
Registrant has been omitted since Registrant filed a definitive
proxy statement within 120 days after December 31, 2001, the
close of its fiscal year. The information required by this item
relating to directors is incorporated by reference to "Item 1"
appearing on pages 3 and 4 of the 2002 Proxy statement. The
information required by this item relating to late filings of
reports required under Section 16(a) of the Securities Exchange
Act of 1934 is incorporated by reference to "Section 16(a)
Beneficial Ownership Reporting Compliance" on page 12 of the
Registrant's 2002 Proxy Statement.
Item 11. Executive Compensation
This item has been omitted since Registrant filed a
definitive proxy statement within 120 days after
December 31, 2001, the close of its fiscal year. The information
required by this item is incorporated by reference to "Executive
Compensation and Other Information," "Retirement Plans" and
"Compensation Committee Interlocks and Insider Participation"
appearing on pages 6 through 9 and 11 of the 2002 Proxy
Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This item has been omitted since Registrant filed a
definitive proxy statement within 120 days after December 31,
2001, the close of its fiscal year. The information required by
this item is incorporated by reference to "Principal
Stockholders" appearing on page 2 and "Election of Directors" on
pages 3 and 4 of the 2002 Proxy Statement.
Item 13. Certain Relationships and Related Transactions
This item has been omitted since Registrant filed a
definitive proxy statement within 120 days after
December 31, 2001, the close of its fiscal year. The information
required by this item is incorporated by reference to
"Compensation Committee Interlocks and Insider Participation"
appearing on page 11 of the 2002 Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. Consolidated financial statements.
See Index to Consolidated Financial Statements on
page F-1.
2. Consolidated financial statement schedules.
See Index to Consolidated Financial Statements on
page F-1.
3. Exhibits.
2.1 - Subscription Agreement by and between
Seaboard Corporation, Fjord Seafood ASA, ContiSea,
LCC, DRFF Corp., ContiGroup Companies, Inc. and
Sabroso AS, dated March 16, 2001. Incorporated by
reference to Exhibit 2.1 of Registrant's Form 10-Q
for the quarter ended June 30, 2001.
3.1 - Registrant's Certificate of Incorporation,
as amended. Incorporated by reference to Exhibit
3.1 of Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
3.2 - Registrant's By-laws, as amended.
4.1 - Note Purchase Agreement dated
December 1, 1993 between the Registrant and
various purchasers as listed in the exhibit. The
Annexes and Exhibits to the Note Purchase
Agreement have been omitted from the filing, but
will be provided supplementally upon request of
the Commission. Incorporated by reference to
Exhibit 4.1 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1993.
4.2 - Seaboard Corporation 6.49% Senior Note Due
December 1, 2005 issued pursuant to the Note
Purchase Agreement described above. Incorporated
by reference to Exhibit 4.2 of Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1993.
4.3 - Note Purchase Agreement dated June 1, 1995
between the registrant and various purchasers as
listed in the exhibit. The Annexes and Exhibits
to the Note Purchase Agreement have been omitted
from the filing, but will be provided
supplementally upon request of the Commission.
Incorporated by reference to Exhibit 4.3 of
Registrant's Form 10-Q for the quarter ended
September 9, 1995.
4.4 - Seaboard Corporation 7.88% Senior Note Due
June 1, 2007 issued pursuant to the Note Purchase
Agreement described above. Incorporated by
reference to Exhibit 4.4 of Registrant's Form 10-Q
for the quarter ended September 9, 1995.
4.5 - Seaboard Corporation Note Agreement dated as
of December 1, 1993 ($100,000,000 Senior Notes due
December 1, 2005). First Amendment to Note
Agreement. Incorporated by reference to Exhibit
4.7 of Registrant's Form 10-Q for the quarter
ended March 23, 1996.
4.6 - Seaboard Corporation Note Agreement dated as
of June 1, 1995 ($125,000,000 Senior Notes due
June 1, 2007). First Amendment to Note Agreement.
Incorporated by reference to Exhibit 4.8 of
Registrant's Form 10-Q for the quarter ended
March 23, 1996.
* 10.1 - Registrant's Executive Retirement Plan
dated January 1, 1997. The addenda have been
omitted from the filing, but will be provided
supplementary upon request of the Commission.
Incorporated by reference to Exhibit 10.1 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997.
* 10.2 - Registrant's Supplemental Executive Benefit
Plan as Amended and Restated. Incorporated by
reference to Exhibit 10.2 of Registrants Form 10-K
for fiscal year ended December 31, 2000.
* 10.3 - Registrant's Supplemental Executive
Retirement Plan for H. Harry Bresky dated
March 21, 1995. Incorporated by reference to
Exhibit 10.3 of Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995.
* 10.4 - Registrant's Executive Deferred
Compensation Plan dated January 1, 1999.
Incorporated by reference to Exhibit 10.1 of
Registrant's Form 10-Q for the quarter ended
March 31, 1999.
* 10.5 - First Amendment to Registrant's Executive
Retirement Plan as Amended and Restated
January 1, 1997, dated February 28, 2001, amending
Registrant's Executive Retirement Plan dated
January 1, 1997 referenced as Exhibit 10.1.
Incorporated by reference to Exhibit 10.6 of
Registrant's Form 10-K for fiscal year ended
December 31, 2000.
* 10.6 - Registrant's Investment Option Plan dated
December 18, 2000. Incorporated by reference to
Exhibit 10.7 of Registrant's Form 10-K for fiscal
year ended December 31, 2000.
10.7 - Registrant's Promissory Note dated
January 25, 2002 from Seaboard Flour Corporation.
10.8 - Registrant's Stock Pledge Agreement dated
January 25, 2002 from Seaboard Flour Corporation.
10.9 - Registrant's Promissory Note dated
February 13, 2002 from Seaboard Flour Corporation.
10.10 - Registrant's Lease Agreement dated
August 11, 1994 with Shawnee Funding, Limited
Partnership as amended by Amendment No. 1 dated
August 9, 1995, by Amendment No. 2 dated
December 19, 1995, and by Amendment No. 3 dated
November 26, 1997.
13 - Sections of Annual Report to security holders
incorporated by reference herein.
21 - List of subsidiaries.
* Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during
the last quarter of the fiscal year covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SEABOARD CORPORATION
By /s/H. Harry Bresky By /s/Robert L. Steer
H. Harry Bresky, President and Chief Robert L. Steer, Senior Vice
Executive Officer (principal executive President, Treasurer and Chief
officer) Financial Officer (principal
financial officer)
Date: March 12, 2002 Date: March 12, 2002
By /s/John A. Virgo
John A. Virgo, Corporate Controller
(principal accounting officer)
Date: March 12, 2002
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of Registrant and in the capacities and on the
dates indicated.
By /s/H. Harry Bresky By /s/J.E. Rodrigues
H. Harry Bresky, Director and Chairman J.E. Rodrigues, Director
of the Board
Date: March 12, 2002 Date: March 12, 2002
By /s/David A. Adamsen By /s/Thomas J. Shields
David A. Adamsen, Director Thomas J. Shields, Director
Date: March 12, 2002 Date: March 12, 2002
By /s/Douglas W. Baena
Douglas W. Baena, Director
Date: March 12, 2002
SEABOARD CORPORATION AND SUBSIDIARIES
Index to Consolidated Financial Statements and Schedule
Financial Statements
Stockholders'
Annual Report Page
Independent Auditors' Report 23
Consolidated Balance Sheets as of December 31, 2001
and December 31, 2000 24
Consolidated Statements of Earnings for the years
ended December 31, 2001, December 31, 2000 and
December 31, 1999 26
Consolidated Statements of Changes in Equity for the
years ended December 31, 2001, December 31, 2000 and
December 31, 1999 27
Consolidated Statements of Cash Flows for the years
ended December 31, 2001, December 31, 2000 and
December 31, 1999 28
Notes to Consolidated Financial Statements 29
The foregoing are incorporated by reference.
The individual financial statements of the nonconsolidated
foreign affiliates which would be required if each such foreign
affiliate were a Registrant are omitted, because (a) the
Registrant's and its other subsidiaries' investments in and
advances to such foreign affiliates do not exceed 20% of the
total assets as shown by the most recent consolidated balance
sheet; (b) the Registrant's and its other subsidiaries'
proportionate share of the total assets (after intercompany
eliminations) of such foreign affiliates do not exceed 20% of the
total assets as shown by the most recent consolidated balance
sheet; and (c) the Registrant's and its other subsidiaries'
equity in the earnings before income taxes and extraordinary
items of the foreign affiliates does not exceed 20% of such
income of the Registrant and consolidated subsidiaries compared
to the average income for the last five fiscal years.
Combined condensed financial information as to assets,
liabilities and results of operations have been presented for
nonconsolidated foreign affiliates in Note 5 of "Notes to the
Consolidated Financial Statements."
II - Valuation and Qualifying Accounts for the years ended
December 31, 2001, 2000 and 1999 F-3
All other schedules are omitted as the required information is
inapplicable or the information is presented in the consolidated
financial statements or related consolidated notes.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Seaboard Corporation:
Under date of March 4, 2002, we reported on the consolidated
balance sheets of Seaboard Corporation and subsidiaries as of
December 31, 2001 and 2000, and the related consolidated
statements of earnings, changes in equity and cash flows for each
of the years in the three-year period ended December 31, 2001, as
contained in the December 31, 2001 annual report to stockholders.
These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10-K
for the year ended December 31, 2001. In connection with our
audits of the aforementioned consolidated financial statements,
we also audited the related consolidated financial statement
schedule as listed in the accompanying index. This financial
statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG LLP
Kansas City, Missouri
March 4, 2002
Schedule II
SEABOARD CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In Thousands)
Balance at Provision Write-offs net Acquisitions Balance at
beginning of year (1) of recoveries and Disposals end of year
Year ended December 31, 2001:
Allowance for doubtful accounts $ 29,801 206 (9,436) - $ 20,571
Drydock accrual $ 5,496 5,356 (4,800) - $ 6,052
Year ended December 31, 2000:
Allowance for doubtful accounts $ 29,075 12,276 (8,199) (3,351) $ 29,801
Drydock accrual $ 5,444 4,051 (3,999) - $ 5,496
Year ended December 31, 1999:
Allowance for doubtful accounts $ 26,117 7,105 (4,147) - $ 29,075
Drydock accrual $ 5,207 3,504 (3,267) - $ 5,444
(1) Allowance for doubtful accounts provisions charged to selling, general and administrative expenses;
drydock provisions charged to cost of sales.