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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, 2002
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 incorporation (I.R.S. Employer
or organization) Identification No.)
9000 W. 67th Street, Shawnee Mission, Kansas 66202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 676-8800
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
Indicate by checkmark whether the registrant is an
accelerated filer (as defined in Rule 126-2 of the Act).
Yes X No
The aggregate market value of 348,815 shares of voting stock
held by nonaffiliates on January 31, 2003 was approximately
$86,663,087, based on the closing price of $248.45 per share on
June 29, 2002, the end of the registrant's second fiscal quarter.
As of February 21, 2003, the number of shares of common stock
outstanding was 1,255,053.90.
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 2003 annual
meeting of stockholders (the "2003 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 ability to obtain adequate financing and liquidity,
(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 demand for power and related spot prices in
the Dominican Republic, (vii) the effect of the devaluation of
the Argentine peso, (viii) the effect of the changes to the
produce division operations on the consolidated financial
statements of the Company, (ix) the potential effect of the
proposed meat packer ban legislation on the Company's Pork
Division, (x) the effect of the national strike in Venezuela on
the Company's Marine Division, (xi) the potential effect of the
Company's investments in a wine business and salmon and other
seafood business on the consolidated financial statements of the
Company, (xiii) the potential impact of various environmental
actions pending or threatened against the Company, or (xiii)
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
48 through 51 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. Registrant 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 grain
processing 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. Registrant sources and sells truck freight through a
brokerage business. Registrant, through a non-controlled
affiliate headquartered in Norway, produces and processes salmon
and other seafood. 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 48 through
51 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 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. Consistent with those plans, the Company continues
to acquire and permit land in order to meet the requirements to
operate the plant. The Company is continuing to evaluate the
timing of construction based on current financial and market
conditions in the Pork industry caused by the oversupply of hogs
and pork. This project is also contingent on a number of other
factors, including obtaining necessary financing for the project,
obtaining the necessary permits, commitments for a sufficient
quantity of hogs to operate the plant, and no statutory
impediments being imposed. If the Company pursues this project,
it may also enter into various contract growing arrangements.
Management is not able to predict the viability or the exact
timing of the expansion project; however, if the Company decides
to pursue the project, construction of the plant would not begin
until after 2003.
During the third quarter of 2002 the Company completed the
first of two new Company-owned hog production facilities which
increased the Company's breeding herd by approximately 12,500
sows. The second facility is expected to be completed and
stocked during 2003.
During the fourth quarter of 2002, the Company purchased
certain hog production facilities previously leased under a
master lease arrangement. These facilities supply approximately
24% of the Company-owned hogs processed at the plant.
In early January 2003, a bill (the Bill) was introduced in
the United States Senate which includes a provision to prohibit
meat packers, such as the Company, from owning or controlling
livestock intended for slaughter. The Bill also contains a
transition rule applicable to packers of pork providing for an
effective date which is 18 months after enactment. Similar
language was passed by the U.S. Senate in 2002 as part of the
Senate's version of the Farm Bill. The U.S. House of
Representatives also passed a Farm Bill in 2002, but that Farm
Bill did not include the prohibition on packers owning or
controlling livestock and it was eventually dropped in conference
committee and was not part of the final Farm Bill.
If the Bill containing the proposed language 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 quarter million hogs per year. If passed in its
current form, the Bill 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 Bill 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 could be significantly, negatively impacted. The
Company, along with industry groups and other similarly situated
companies are vigorously lobbying against enactment of any such
legislation.
During 2002, Registrant opened new commodity trading offices
in Ecuador, Kenya and Peru.
During 2002, the Company purchased two new ocean liner
services for containerized cargo shipping out of the Port of New
Orleans to Central America, and out of the Philadelphia,
Pennsylvania area to the Caribbean Basin.
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.
The Company ceased its shrimp, pickle and pepper farming
operations in Honduras during 2001 and is considering various
strategic alternatives for these assets. In February 2003, the
Registrant signed a letter of intent with a local Honduran shrimp
farmer for the sale of the Company's Honduran shrimp farming and
processing plant businesses. Certain of the pickle and pepper
farms are currently leased and operated by local farmers under
short-term agreements.
During July 2002, the Registrant purchased additional shares
of Fjord Seafood ASA, a fully-integrated producer and processor
of salmon and other seafood headquartered in Norway, increasing
its ownership to approximately 21%. During 2002, the Bulgarian
wine business received an extension of principal payment due
dates, and a waiver of default. This business is currently
negotiating with the bank for additional revised terms and
conditions.
(iii) Sources and Availability of Raw Materials
None of the 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 Registrant uses the registered trademark of Seaboard.
The Pork Division uses registered trademarks relating to its
products, including Seaboard Farms, Inc., Seaboard Farms and
PrairieFresh and has applied for registration of A Taste Like No
Other. The Registrant considers the use of these trademarks
important to the marketing and promotion of its' fresh pork
products.
The Marine Division uses the trade name Seaboard Marine
which is also a registered trademark. There is significant
recognition for the Seaboard Marine trademark in the industry
and amongst customers.
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. The Company's
Produce division sells nearly all of its processed jalapeno
peppers to one customer under a contract expiring in 2006. 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. No
amounts which would have a material or significant effect on the
Registrant's financial condition or results of operations 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, 2002, Registrant, excluding non-
consolidated foreign affiliates, had 9,294 employees, of whom
5,265 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
48 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.
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, 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.
(e) Available Information
Registrant electronically files annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports pursuant to Section 13(a) or 15(d) of
the Exchange Act with the Commission. The public may read and
copy any materials filed with the Commission at their Public
Reference Room at 450 Fifth Street, NW, Washington, DC 20549.
The public may also obtain this information by calling the
Commission at 1-800-SEC-0330.
The Commission also maintains an Internet site that contains
reports, proxy and information statements, and other information
regarding electronic filers at www.sec.gov. The Registrant
provides access to its most recent Form 10-K, 10-Q and 8-K
reports on its Internet website, www.seaboardcorp.com, free of
charge, as soon as reasonably practicable after those reports are
electronically filed with the Commission.
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 approximately 195,000 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 fifteen and nineteen containerized ocean
cargo vessels with deadweights ranging from 2,600 to 20,388
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 which includes several warehouses totaling over 690,000
square feet for cargo storage.
(3) Commodity Trading and Milling
The Registrant owns in whole or in part grain-processing
operations in 13 countries with productive capacity to mill over
5,800 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, Uganda 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
seven and sixteen bulk carrier ocean vessels with dead weights
ranging from 8,000 to 60,000 metric tons.
(4) Sugar and Citrus
Registrant's Argentine sugar and citrus company 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 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 and imported European-
subsidized finished product.
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 Claim
The Company and Sierra Club have reached an agreement to
settle the ongoing litigation brought by the Sierra Club, subject
to court approval. The Complaint to bring the action was
originally filed on June 2, 2000 by the Sierra Club against the
Company, Seaboard Farms, Inc. ("Seaboard Farms") and Shawnee
Funding, Limited Partnership ("Shawnee Funding") in the United
States District Court for the Western District of Oklahoma,
No. CIV -00-979-L. The Complaint alleged 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").
Pursuant to the settlement, the Company will pay Sierra Club
$125,000 and will pay an additional $100,000 to Ducks Unlimited
to fund playa lake conservation efforts in Beaver and Texas
Counties in Oklahoma. The Company will also conduct an
investigation at three farms located in Kingfisher and Major
Counties in Oklahoma according to an agreed upon process that may
include corrective action if warranted. Sierra Club reserved the
right to appeal the District Court's ruling that the Company does
not have to aggregate ammonia emissions from all sources at the
Dorman Sow Farm for CERCLA reporting purposes. In the event
Sierra Club appeals and this ruling is reversed, as Sierra Club's
sole remedy, the Company must pay Sierra Club an additional
$25,000.
EPA and State of Oklahoma Claims Concerning Farms in Major and
Kingfisher County, Oklahoma
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 Seaboard Farms, Shawnee Funding, and PIC
International Group, Inc. ("PIC") (collectively, "Respondents").
The RCRA Order alleges that five swine farms located in Major
County and Kingfisher County, Oklahoma purchased from PIC are
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.
On July 23, 2002, the Company received a notice from the
State of Oklahoma, alleging that the Company has violated various
provisions of Oklahoma state law and the operating permits
related to these farms based on the same conditions, which gave
rise to the RCRA Order. In the event the State brings an
enforcement action, they have threatened to do so as an
administrative action in which they can seek administrative
penalties of not more than $10,000 per day of noncompliance and
can seek to assess violation points which could prohibit the
Company from continuing to operate one or more of these farms.
Although the Company disputes the RCRA Order and the State
of Oklahoma's contentions, the Company is cooperating with the
EPA and the State of Oklahoma.
The farms that are the subject of the RCRA Order and the
allegations by the State of Oklahoma were previously owned by
PIC. PIC is presently providing indemnity and defense of the
RCRA Order (reserving its right to contest the obligation to do
so). One indemnity agreement with PIC is subject to a $5 million
limit, but the Company believes that a more general environmental
indemnity agreement would require indemnification of liability in
excess of that amount. The Company has demanded that PIC provide
indemnity and defense with respect to the notice of violations
letter received from the State of Oklahoma. PIC is disputing its
obligation to provide indemnity and defense with respect to the
notice of violation, and this dispute remains outstanding.
Potential Additional EPA Claims
EPA has been conducting a broad-reaching investigation of
Seaboard Farms, seeking information as to compliance with the
Clean Water Act (CWA), Comprehensive Environmental Response,
Compensation & Liability Act (CERCLA) and the Clean Air Act.
Through Information Requests and farm inspections, EPA obtained
information that may be related to whether Seaboard Farms'
operations are discharging pollutants to waters of the United
States in violation of the CWA, whether National Pollutant
Discharge Elimination System storm water construction permits
were obtained, where required, whether there has been unlawful
filling of or discharge to "wetlands" within the jurisdiction of
the CWA, whether Seaboard Farms has properly reported emissions
of hazardous substances into the air under CERCLA, and whether
some of its farms may be emitting air pollutants at levels
subject to Clean Air Act permitting requirements. As a result of
the investigation, EPA requested that the Company engage in
settlement discussions to avoid further EPA investigative efforts
and potential formal claims being filed. EPA has presented
settlement demands, and Seaboard has responded. The Company
believes it has meritorious legal and factual defenses and
objections to EPA's demands, but will continue to engage in
settlement discussions. Such settlement discussions could lead
to an Agreed Consent Order.
On April 2, 2002, the United States Environmental Protection
Agency ("EPA") sent to Seaboard Farms, Inc. a letter pursuant to
the Clean Air Act ("CAA") demanding Seaboard Farms install and
use monitoring equipment to sample emissions at certain hog
confinement facilities for purposes of determining whether these
operations are in compliance with the CAA. The EPA is also
requesting that Seaboard Farms agree that these facilities are
comparable to all other facilities operated and that the
monitoring results can be reasonably extrapolated to estimate
the emissions for all other farms operated by Seaboard Farms. If
the specified farms are not comparable, EPA is demanding that
Seaboard Farms conduct monitoring at the incomparable farms. The
letter also requires that Seaboard Farms submit a plan and
protocol for testing for emissions of particulate matter,
volatile organic compounds and hydrogen sulfide.
The Company believes that EPA's demand is beyond the
Agency's authority pursuant to the CAA and that the Company
cannot be required to undertake the air monitoring. Seaboard
Farms calculated its emissions using scientifically acceptable
methods other than monitoring and determined that the emissions
from its hog operations do not require a CAA permit. Seaboard
Farms set forth this position in a letter to EPA, and will have
discussions with EPA regarding compliance. The EPA could bring a
suit to enforce the provisions of the letter, and if a court were
to determine that EPA is within its authority, the court could
impose a civil penalty of up to $27,500 per day of
non-compliance, and could order injunctive relief requiring that
Seaboard Farms conduct the monitoring.
On February 20, 2003, Seaboard Farms, Inc. received an
additional Information Request from the EPA seeking information
as to compliance with the CWA by the Company with respect to
virtually all of its confined animal feeding operations. The
Company is presently in the process of complying with the
Information Request. At present, no relief has been sought by
the EPA.
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 (77) Chairman of the Board, President and
Chief Executive Officer of Registrant;
Manager of Seaboard Flour LLC (SF)
Steven J. Bresky (49) Senior Vice President, International Operations
Robert L. Steer (43) Senior Vice President, Treasurer and Chief Financial
Officer
David M. Becker (41) Vice President, General Counsel and Assistant
Secretary
James L. Gutsch (49) Vice President, Engineering
Rodney K. Brenneman (38) President, Seaboard Farms, Inc.
John Lynch (69) 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 Manager of SF since 2002. He served as President of Seaboard
Flour Corporation from 1987 through 2002, and as Treasurer of
Seaboard Flour Corporation from 1973 through 2002. 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 (a) "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 and (b)
"Compensation Committee Interlocks and Insider Participation"
appearing on page 11 of the Registrant's 2003 Proxy Statement.
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
31, 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 Balance Sheets,"
"Consolidated Statements of Earnings," "Consolidated Statements
of Changes in 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, 2002, 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 2003 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 13 of the
Registrant's 2003 Proxy Statement.
Item 11. Executive Compensation
This item has been omitted since Registrant filed a
definitive proxy statement within 120 days after
December 31, 2002, 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 2003 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,
2002, 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 2003 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, 2002, 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 2003 Proxy Statement.
Item 14. Controls and Procedures
The Company has established a system of controls and other
procedures designed to ensure that information required to be
disclosed in its periodic reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. These
disclosure controls and procedures have been evaluated under the
direction of the Company's Chief Executive Officer and Chief
Financial Officer within the last 90 days. Based on such
evaluations, the Chief Executive Officer and Chief Financial
Officer have concluded that the disclosure controls and
procedures are effective. There have been no significant changes
in the Company's system of internal controls or in other factors
that could significantly affect internal controls subsequent to
the evaluation by the Chief Executive Officer and Chief Financial
Officer.
PART IV
Item 15. 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.
3.1 - Registrant's Certificate of Incorporation,
as amended. Incorporated by reference to Exhibit
3.1 of Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
3.2 - Registrant's By-laws, as amended.
Incorporated by reference to Exhibit 3.2 of
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001.
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.
4.7 - Second Amendment to the Note Purchase
Agreements dated as of December 1, 1993
($100,000,000 Senior Notes due December 1, 2005).
Incorporated by reference to Exhibit 4.1 of
Registrant's Form 10-Q for the quarter ended
September 28, 2002.
4.8 - Second Amendment to the Note Purchase
Agreements dated as of June 1, 1995 ($125,000,000
Senior Notes due June 1, 2007). Incorporated by
reference to Exhibit 4.2 of Registrant's Form 10-Q
for the quarter ended September 28, 2002.
4.9 - Seaboard Corporation Note Purchase Agreement
dated as of September 30, 2002 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 28, 2002.
4.10 - Seaboard Corporation $32,500,000 5.8%
Senior Note, Series A, due September 30, 2009
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 28, 2002.
4.11 - Seaboard Corporation $38,000,000 6.21%
Senior Note, Series B, due September 30, 2009
issued pursuant to the Note Purchase Agreement
described above. Incorporated by reference to
Exhibit 4.5 of Registrant's Form 10-Q for the
quarter ended September 28, 2002.
4.12 - Seaboard Corporation $7,500,000 6.21%
Senior Note, Series C, due September 30, 2012
issued pursuant to the Note Purchase Agreement
described above. Incorporated by reference to
Exhibit 4.6 of Registrant's Form 10-Q for the
quarter ended September 28, 2002.
4.13 - Seaboard Corporation $31,000,000 6.92%
Senior Note, Series D, due September 30, 2012
issued pursuant to the Note Purchase Agreement
described above. Incorporated by reference to
Exhibit 4.7 of Registrant's Form 10-Q for the
quarter ended September 28, 2002.
* 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 - Reorganization Agreement by and between
Seaboard Corporation and Seaboard Flour
Corporation as of October 18, 2002 incorporated by
reference to Exhibit 10.1 of the Form 8-K dated
October 18, 2002.
10.8 - Purchase and Sale Agreement dated October
18, 2002 by and between Flour Holdings LLC and
Seaboard Flour Corporation with respect to which
the "Earnout Payments" thereunder have been
assigned to Seaboard Corporation. Incorporated by
reference to Exhibit 10.2 of Registrant's Form 10-
Q for the quarter ended September 28, 2002.
13 - Sections of Annual Report to security holders
incorporated by reference herein.
21 - List of subsidiaries.
99.1 - Certification of the Chief Executive
Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
99.2 - Certification of the Chief Financial
Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
* Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
i. Seaboard Corporation filed Form 8-K dated October 8, 2002
announcing completion of a private placement of Senior Notes and
its intentions for the use of the proceeds.
ii. Seaboard Corporation filed Form 8-K dated October 18, 2002
announcing the repurchase of 232,414.85 shares of common stock
from its parent, Seaboard Flour Corporation.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SEABOARD CORPORATION
By /s/H. Harry Bresky By /s/Robert L. Steer
H. Harry Bresky, President Robert L. Steer, Senior
and Chief Executive Officer Vice President, Treasurer
(principal executive officer) and Chief Financial Officer
(principal financial officer)
Date: March 4, 2003 Date: March 4, 2003
By /s/John A. Virgo
John A. Virgo, Corporate Controller
(principal accounting officer)
Date: March 4, 2003
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 4, 2003 Date: March 4, 2003
By /s/David A. Adamsen By /s/Thomas J.Shields
David A. Adamsen, Director Thomas J. Shields, Director
Date: March 4, 2003 Date: March 4, 2003
By /s/Douglas W. Baena
Douglas W. Baena, Director
Date: March 4, 2003
CERTIFICATIONS
I, H. H Bresky, certify that:
1.I have reviewed this annual report on Form 10-K of Seaboard Corporation;
2.Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3.Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods
presented in this annual report;
4.The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a)designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
b)evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
c)presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5.The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a)all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b)any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6.The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: March 4, 2003
/s/ H. H. Bresky
H. H. Bresky, Chairman of the Board,
President, and Chief Executive Officer
CERTIFICATIONS
I, Robert L. Steer, certify that:
1.I have reviewed this annual report on Form 10-K of Seaboard Corporation;
2.Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3.Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods
presented in this annual report;
4.The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a)designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;
b)evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and
c)presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5.The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a)all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b)any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6.The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
Date: March 4, 2003
/s/ Robert L. Steer
Robert L. Steer, Senior Vice President,
Treasurer, and Chief Financial Officer
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, 2002
and December 31, 2001 24
Consolidated Statements of Earnings for the years
ended December 31, 2002, December 31, 2001 and
December 31, 2000 25
Consolidated Statements of Changes in Equity for the
years ended December 31, 2002, December 31, 2001and
December 31, 2000 26
Consolidated Statements of Cash Flows for the years
ended December 31, 2002, December 31, 2001 and
December 31, 2000 27
Notes to Consolidated Financial Statements 28
The foregoing are incorporated by reference.
Fjord Seafood ASA (a nonconsolidated foreign affiliate) financial
statements for the years ended December 31, 2002, 2001, and 2000,
will be filed by amendment to this Form 10-K no later than 180 days
after December 31, 2002. The individual
financial statements of all other 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 and (b) 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, 2002, 2001 and 2000 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.
F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Seaboard Corporation:
Under date of February 21, 2003, we reported on the consolidated
balance sheets of Seaboard Corporation and subsidiaries as of
December 31, 2002 and 2001, 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, 2002, as
contained in the December 31, 2002 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, 2002. 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
February 24, 2003
F-2
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, 2002:
Allowance for doubtful accounts $20,571 62 (4,455) - $16,178
Drydock accrual $ 6,052 3,709 (3,368) - $ 6,393
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
(1) Allowance for doubtful accounts provisions charged to selling,
general and administrative expenses; drydock provisions charged to cost of
sales.
F-3