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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, 2004
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)
(913) 676-8800
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each className of each exchange on which registered
Common Stock $1.00 Par Value American Stock Exchange
SECURITIES REGISTERED PURSUANT TO 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 statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act). Yes [ X ] No [ ]
The aggregate market value of 354,380 shares of Seaboard voting
stock held by nonaffiliates was approximately $175,453,538, based
on the closing price of $495.10 per share on July 2, 2004, the
end of Seaboard's second fiscal quarter. As of
February 18, 2005, 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 6, 7, 7A and
8 are incorporated herein by reference to Seaboard Corporation's
Annual Report to Stockholders furnished to the Commission
pursuant to Rule 14a-3(b).
Part II, a part of item 5, and Part III, a part of item 10 and
items 11, 12 and 13 are incorporated herein by reference to
Seaboard Corporation's definitive proxy statement filed pursuant
to Regulation 14A for the 2005 annual meeting of stockholders.
Forward-Looking Statements
This report, including information included or incorporated by
reference in this report, contains certain forward-looking
statements with respect to the financial condition, results of
operations, plans, objectives, future performance and business of
Seaboard Corporation and its subsidiaries (Seaboard). Forward-
looking statements generally may be identified as:
statements that are not historical in nature, and
statements preceded by, followed by or that include the
words "believes," "expects," "may," "will," "should,"
"could," "anticipates," "estimates," "intends" or similar
expressions
In more specific terms, forward-looking statements, include,
without limitation:
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 regarding the intent, belief or current
expectations of Seaboard and its management with respect to:
(i) the cost and timing of the completion of new or
expanded facilities,
(ii) Seaboard's ability to obtain adequate financing
and liquidity,
(iii) the price of feed stocks and other materials used
by Seaboard,
(iv) the sale price for pork products from such
operations,
(v) the price for other products and services,
(vi) the charter hire rates and fuel prices for vessels,
(vii) the demand for power, related spot market prices
and collectibility of receivables in the Dominican
Republic,
(viii) the effect of the fluctuation in exchange rates
for the Dominican Republic peso,
(ix) the effect of the Venezuelan economy on the Marine
segment,
(x) the potential effect of Seaboard's investment in a wine
business on the consolidated financial statements,
(xi) the potential impact of various environmental actions
pending or threatened against Seaboard,
(xii) the potential impact of the American Jobs Creation
Act, or
(xiii) other trends affecting Seaboard's financial
condition or results of operations, and
statements of the assumptions underlying or relating to any
of the foregoing statements.
Forward-looking statements are not guarantees of future
performance or results. They involve risks, uncertainties and
assumptions. Actual results may differ materially from those
contemplated by the forward-looking statements due to a variety
of factors. The information contained in this Form 10-K and in
other filings Seaboard makes with the Commission, including
without limitation, the information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in this Form 10-K, identifies important
factors which could cause such differences.
2
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 (Seaboard) is a diversified international
agribusiness and transportation company which is primarily
engaged domestically in pork production and processing, and cargo
shipping. Overseas, Seaboard is primarily engaged in commodity
merchandising, flour and feed milling, sugar production, and
electric power generation. See Item 1(c) (1) (ii) "Status of
Product or Segment" below for a discussion of developments in
specific segments.
Seaboard Flour LLC, a Delaware limited liability company, owns
approximately 70.7 percent of the outstanding common stock of
Seaboard. Mr. H. Harry Bresky, President and Chief Executive
Officer of Seaboard, and other members of the Bresky family,
including trusts created for their benefit, own approximately
99.5 percent of the common units of Seaboard Flour LLC. Such
Bresky family members also own additional shares, representing
approximately 2.7 percent of the outstanding common stock of
Seaboard.
(b) Financial Information about Industry Segments
The information required by Item 1(b) of Form 10-K relating to
Industry Segments is incorporated herein by reference to Note 13
of the Consolidated Financial Statements appearing on pages 54
through 58 of the Seaboard Corporation 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
Pork Division - Seaboard, through its subsidiary, Seaboard
Farms, Inc., engages in the businesses of hog production and
pork processing in the United States. Through these
operations, Seaboard produces and sells fresh and frozen
pork to further processors, foodservice outlets, grocery
stores and other retail outlets, and other distributors
throughout the United States, and to Japan and other foreign
markets. Further processing companies purchase Seaboard's
pork products in bulk and produce products, such as
lunchmeat, hams, bacon, and sausages. Fresh pork, such as
loins, tenderloins and ribs are sold to distributors and
grocery stores. Seaboard also sells a small amount of
packaged, further processed and marinated pork products.
Seaboard sells some of its products under the brand name
Prairie Fresh. Seaboard's hog processing plant is located
in Guymon, Oklahoma, and operates at double shift capacity.
Seaboard's hog production operations consist of the breeding
and raising of approximately 3.5 million hogs annually at
facilities it either owns or leases or at facilities owned
and operated by third parties with whom it has grower
contracts. The hog production operations are located in the
States of Oklahoma, Kansas, Texas and Colorado. As a part
of the hog production operations, Seaboard produces
specially formulated feed for the hogs at six owned feed
mills. The remaining hogs processed are purchased from
third party hog producers, primarily pursuant to purchase
contracts.
Commodity Trading and Milling Division - Seaboard's
Commodity Trading and Milling Division, through its
subsidiaries, Seaboard Overseas Limited located in Bermuda,
Seaboard Overseas Trading and Shipping (PTY), Ltd. located
in Durban, South Africa, and other locations in Peru,
Ecuador and Zambia, internationally markets wheat, corn,
soybean meal and other commodities in bulk to third party
customers and affiliated companies. These commodities are
purchased worldwide, with primary destinations to Africa,
South America, the Caribbean, and the Eastern Mediterranean.
The division originates, transports and markets
approximately 4.8 million tons of grains and proteins on an
annual basis. Seaboard integrates the service of delivering
commodities to its customers through the use of chartered
bulk vessels and its seven owned bulk carriers.
This division also operates milling businesses in 13
countries, which are primarily supplied by the trading
locations discussed above. The grain processing businesses
are operated through five consolidated and eight non-
consolidated affiliates in Africa, the Caribbean and South
America, with flour, feed and maize milling businesses which
produce approximately 1.5 million metric tons of finished
products per year. Most of the products produced by the
milling operations are sold in the countries in which the
products are produced.
3
Marine Division - Seaboard, through its subsidiary, Seaboard
Marine Limited, and various foreign affiliated companies and
third party agents, provides containerized cargo shipping
service to over twenty-five countries between the United
States, the Caribbean Basin, and Central and South America.
Seaboard uses a network of offices and agents throughout the
United States, Canada, Latin America and the Caribbean Basin
to book both northbound and southbound cargo. Through
intermodal arrangements, Seaboard can transport cargo to and
from numerous U.S. mainland locations by either truck or
rail to and from one of its U.S. port locations, where it is
staged for export via sea or received as import cargo from
abroad.
Seaboard's primary marine operations located in Miami
include a 135,000 square foot warehouse for cargo
consolidation and temporary storage, and a 70 acre terminal
at the Port of Miami. At the Port of Houston, Seaboard
operates a 62 acre cargo terminal facility that includes
over 690,000 square feet of on-dock warehouse space for
temporary storage of bagged grains, resins and other
cargoes. Seaboard also makes scheduled vessel calls in New
Orleans, Louisiana, Fernandina Beach, Florida and
Philadelphia, Pennsylvania. Seaboard's fleet consists of
seven owned and approximately 23 chartered vessels,
thousands of dry, refrigerated and specialized containers
and related equipment. Seaboard also provides cargo
transportation service from its domestic ports of call to
and from multiple foreign destinations where Seaboard does
not make vessel calls through connecting carrier agreements
with third party regional and global carriers.
Sugar and Citrus Division - Seaboard, through its
subsidiary, Ingenio y Refineria San Martin del Tabacal and
other Argentine non-consolidated affiliates, is involved in
the production and refining of sugar cane and the production
and processing of citrus in Argentina. This division also
purchases sugar and citrus in bulk from third parties within
Argentina for subsequent resale. The sugar products are
primarily sold in Argentina, primarily to retailers, soft
drink manufacturers, and food manufacturers, with some
exports to the United States, South America and Europe while
the citrus products are primarily exported to the global
market. Seaboard grows a large portion of the sugar cane on
approximately 46,000 acres of land it owns in northern
Argentina. The cane is processed at an owned mill, with a
current processing capacity of approximately 180,000 metric
tons of sugar per year. During 2005 Seaboard plans to
increase this capacity to approximately 200,000 metric tons.
The sugar mill is one of the largest in Argentina. Another
3,000 acres of land is planted with oranges.
Power Division - Seaboard, through its subsidiary,
Transcontinental Capital Corp. (Bermuda) Ltd., operates as
an independent power producer in the Dominican Republic.
This operation is exempt from U.S. regulation under the
Public Utility Holding Company Act of 1938, as amended. The
business operates two floating barges with a system of
diesel engines capable of generating a combined rated
capacity of approximately 112 megawatts of electricity.
Seaboard generates electricity into the local Dominican
Republic power grid, but is not involved in the transmission
or distribution of the electricity. The barges are secured
on the Ozama River in Santo Domingo, Dominican Republic.
The electricity is sold at contracted pricing to certain
large commercial users with contract terms extending from
one to four years. Seaboard also sells power under short-
term contracts with certain government-owned distribution
companies. The remaining electricity is sold in the "spot
market" at prevailing market prices, primarily to three
wholly or partially government-owned electric distribution
companies.
Other Businesses - Seaboard purchases and processes jalapeno
peppers at its owned plant in Honduras. The processed
peppers are primarily sold to a customer in the United
States, and are shipped by Seaboard's Marine Division and
distributed from Seaboard's Port of Miami cold storage
warehouse.
Seaboard has a truck transportation business which arranges
truck freight services for third parties as a broker and as
a carrier. This business also provides logistics and
transportation services to other Seaboard companies, using
its owner-operator program and extensive carrier network.
Seaboard also has an equity investment in a wine business
that produces wine in Bulgaria for distribution, primarily
throughout Europe.
4
The information required by Item 1 of Form 10-K with respect
to the amount or percentage of total revenue contributed by
any class of similar products or services which account for
10 percent or more of consolidated revenue in any of the
last three fiscal years is set forth in Note 13 of
Seaboard's Consolidated Financial Statements, appearing on
pages 54 through 58 of the Seaboard's Annual Report to
Stockholders, furnished to the Commission pursuant to
rule 14a-3(b) and attached as Exhibit 13 to this report,
which information is incorporated herein by reference.
(ii) Status of Product or Segment
In early 2004, Seaboard entered into a marketing agreement
with Triumph Foods LLC (Triumph) to market all of the pork
products processed at Triumph's pork processing plant to be
constructed in St. Joseph, Missouri. The plant is scheduled
to begin operations in late 2005. This plant will have
capacity similar to Seaboard's Guymon, Oklahoma plant with
the business based upon the same integrated model as
Seaboard's. The Triumph plant is not expected to reach full
double shift operating capacity until 2007.
In early 2002, Seaboard announced plans to build a second
pork processing plant in northern Texas along with related
plans to expand its vertically integrated hog production
facilities. However, with the planned construction of the
Triumph pork processing plant discussed above, Seaboard does
not intend to proceed with the expansion project at this
time.
From time to time bills have been introduced in the United
States Senate and House of Representatives which included
provisions to prohibit meat packers, such as Seaboard, from
owning or controlling livestock intended for slaughter.
Such bills could have prohibited Seaboard from owning or
controlling hogs, and thus would have required divestiture
of our operations, or otherwise a restructuring of its
ownership and operation. Currently, no such bill is active
nor have any been passed into law, and Seaboard does not
expect any such actions to be passed in 2005.
The economic environment in the Dominican Republic (DR) has
been in turmoil for the last two years. During 2003, the
exchange rate for the Dominican peso devalued significantly
before strengthening somewhat during 2004. In addition,
since the last half of 2003, the power industry in the DR
has suffered from a cash flow imbalance that began when the
government did not allow retail electricity rates charged by
the distribution companies to increase sufficiently to cover
the significant peso devaluation and increases in
dollar-denominated fuel costs. The government has not fully
funded this cash shortfall.
As a result of the weakened economic environment in the DR,
the generating companies have experienced difficulty in
obtaining timely collections of trade receivables from the
government-owned distribution companies or other companies
that must also collect from the government in order to make
payments on their accounts. As a result, similar to other
independent power producers, Seaboard has curtailed its
level of power generation in 2004 based on management's
belief about collectibility of receivables from spot sales.
While multilateral credit agencies may eventually provide
funding support to this country to improve liquidity,
management can not predict if adequate funding will occur to
fully resolve this situation during the next year. With the
exception of those government or government-reliant
customers, all commercial contract customers generally pay
their accounts timely. Seaboard continues to pursue
additional commercial contract customers which would reduce
dependency on the government for liquidity. In addition,
Seaboard is pursuing additional investment opportunities in
the DR power industry.
Seaboard has an equity investment in a wine business in
Bulgaria. In February 2005, the Board of Directors and the
majority of owners, including Seaboard, agreed to pursue the
sale of the entire business or all of its assets. No
assurance can be given as to whether any such sale will
occur.
(iii) Sources and Availability of Raw Materials
None of Seaboard'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
Seaboard uses the registered trademark of Seaboard.
5
The Pork Division uses registered trademarks relating to its
products, including Seaboard Farms, Inc., Seaboard Farms,
PrairieFresh, and A Taste Like No Other. Seaboard
considers the use of these trademarks important to the
marketing and promotion of its pork products.
The Marine Division uses the trade name Seaboard Marine
which is also a registered trademark. Seaboard believes
there is significant recognition of the Seaboard Marine
trademark in the industry and by many of its customers.
Part of the sales within the Sugar and Citrus Division are
made under the Chango brand in Argentina, where this
division operates. Local sales prices benefit from sugar
import duties imposed by the Argentine government, which
affects the volume of sugar imported to that market.
Seaboard's Power Division benefits from a tax exempt
concession granted by the Dominican Republic government
through 2012.
Patents, trademarks, franchises, licenses and concessions
are not material to any of Seaboard's other divisions.
(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. Seaboard's other divisions are not seasonally
dependent to any material extent.
(vi) Practices Relating to Working Capital Items
There are no unusual industry practices or practices of
Seaboard relating to working capital items.
(vii) Depending on a Single Customer or Few Customers
Seaboard does not have sales to any one customer equal to
10% or more of consolidated revenues. The Pork division
derives approximately ten percent of its revenues from three
customers in Japan through one agent. The Power division
sells power in the Dominican Republic to a limited number of
contract customers and on the spot market accessed primarily
by three wholly or partially government-owned distribution
companies.
Seaboard's Produce Division sells nearly all of its
processed jalapeno peppers to one customer under a contract
expiring in 2006. We do not believe the loss of this
customer would have a material adverse effect on Seaboard's
consolidated financial position or results of operations.
No other division has sales to a few customers which, if
lost, would have a material adverse effect on any such
segment or on Seaboard taken as a whole.
(viii) Backlog
Backlog is not material to Seaboard businesses.
(ix) Government Contracts
No material portion of Seaboard business involves government
contracts.
(x) Competitive Conditions
Competition in Seaboard's Pork Division comes from a variety
of national, international and regional producers and
processors and is based primarily on product quality,
customer service and price. According to recent issues of
Successful Farming and Feedstuffs, trade publications,
Seaboard 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).
Seaboard's ocean liner service for containerized cargoes
faces competition based on price and customer service.
Seaboard believes it is among the top five ranking ocean
liner services for containerized cargoes in the Caribbean
Basin based on cargo volume.
Seaboard's sugar business owns one of the largest sugar
mills in Argentina and 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.
Seaboard's Power Division is located in the Dominican
Republic. Power generated by this segment is sold on the
spot market or to contract customers at prices primarily
based on market conditions rather than cost-based rates.
6
(xi) Research and Development Activities
Seaboard does not engage in material research and
development activities.
(xii) Environmental Compliance
Seaboard 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.
Seaboard does not anticipate making expenditures for these
purposes, including expenditures with respect to the items
disclosed in Item 3, Legal Proceedings, which, in the
aggregate would have a material or significant effect on
Seaboard's financial condition or results of operations.
(xiii) Number of Persons Employed by Registrant
As of December 31, 2004, Seaboard, excluding non-
consolidated foreign affiliates, had 9,532 employees, of
whom 5,383 were employed in the United States.
Approximately 2,000 employees in Seaboard's Pork Division
and approximately 10 employees in Seaboard's Produce
Division are covered by collective bargaining agreements.
Seaboard considers its employee relations to be
satisfactory.
(d) Financial Information about Geographic Areas
The financial information required by Item 1(d) of Form 10-K
relating to export sales is incorporated herein by reference to
Note 13 of Seaboard's Consolidated Financial Statements appearing
on pages 54 through 58 of Seaboard's Annual Report to
Stockholders furnished to the Commission pursuant to Rule 14a-
3(b) and attached as Exhibit 13 to this report.
Seaboard 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 risks of doing business in lesser-developed countries
which are subject to potential civil unrests and government
instabilities, increasing the exposure to potential
expropriation, confiscation, war, insurrection, civil strife and
revolution, currency inconvertibility and devaluation, and
currency exchange controls. To minimize certain of these risks,
Seaboard has insured certain investments in its affiliate flour
mills in Angola, Haiti, Lesotho, Mozambique, Republic of Congo
and Zambia, to the extent available and deemed appropriate
against certain of these risks with the Overseas Private
Investment Corporation, an agency of the United States
Government. At the date of this report, Seaboard is not aware
of any situations referred to above which could have a material
effect on Seaboard's business.
(e) Available Information
Seaboard electronically files with the Commission 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. The public may read and copy
any materials filed with the Commission at their public reference
room located at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain further
information concerning the public reference room and any
applicable copy charges, as well as the process of obtaining
copies of filed documents by calling the Commission at 1-800-SEC-
0330.
The Commission maintains an Internet site that contains reports,
proxy and information statements, and other information regarding
electronic filers at www.sec.gov. Seaboard provides access to
its most recent Form 10-K, 10-Q and 8-K reports, and any
amendments to these 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.
Please note that any internet addresses provided in this report
are for information purposes only and are not intended to be
hyperlinks. Accordingly, no information provided at such
Internet addresses is intended or deemed to be incorporated
herein by reference.
7
Item 2. Properties
(1) Pork - Seaboard's Pork Division owns a hog processing plant
in Guymon, Oklahoma, which opened in 1995. It has a daily double
shift capacity to process approximately 16,000 hogs and generally
operates at capacity with additional weekend shifts depending on
market conditions. The plant is utilized at near capacity
throughout the year. Seaboard's hog production operations
consist of the breeding and raising of approximately 3.5 million
hogs annually at facilities it either owns or leases, or at
facilities owned and operated by third parties with whom it has
grower contracts. This business owns and operates six centrally
located feed mills which have a combined capacity to produce
approximately 1,700,000 tons of formulated feed annually used
primarily to support Seaboard's existing hog production, and has
the capability of supporting additional hog production in the
future. These facilities are located in Oklahoma, Texas, Kansas
and Colorado.
(2) Commodity Trading and Milling - Seaboard's Commodity Trading
and Milling Division owns, in whole or in part, grain-processing
operations in 13 countries which have the capacity to mill over
6,000 metric tons of wheat and maize per day. In addition,
Seaboard has feed mill capacity of in excess of 112 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. Certain foreign milling operations may operate at
less than full capacity due to low demand related to poor
consumer purchasing power and European-subsidized wheat and flour
exports. Seaboard also owns seven 9,000 metric-ton deadweight
dry bulk carriers and "time charters" (the charter of a vessel,
whereby the vessel owner is responsible to provide the captain
and crew necessary to operate the vessel), under short-term
agreements, between seven and twenty-three bulk carrier ocean
vessels with deadweights ranging from 8,000 to 60,000 metric
tons.
(3) Marine - Seaboard's Marine Division leases a 135,000 square
foot warehouse and 70 acres of port terminal land and facilities
in Miami, Florida which are used in its containerized cargo
operations. Seaboard also leases an approximately 62 acre cargo
handling and terminal facility in Houston, Texas, which includes
several on-dock warehouses totaling over 690,000 square feet for
cargo storage. Seaboard owns seven ocean cargo vessels with
deadweights ranging from 2,813 to 14,545 metric tons and time
charters under long-term contracts ranging from one to three
years, and short-term agreements, between fifteen and twenty
containerized ocean cargo vessels with deadweights ranging from
2,600 to 19,456 metric-tons. In addition, this business also
"bareboat charters" (the charter of a vessel, whereby the
charterer is responsible for providing the captain and crew
necessary to operate the vessel), under long-term lease
agreements, three containerized ocean cargo vessels with
deadweights ranging from 12,169 to 12,648 metric tons. Seaboard
owns or leases an aggregate of approximately 35,000 dry,
refrigerated and specialized containers and related equipment.
(4) Sugar and Citrus - Seaboard's Argentine Sugar and Citrus
Division owns approximately 46,000 acres of planted sugarcane and
approximately 3,000 acres of orange trees. Depending on local
harvest and market conditions, this business also purchases third
party sugar and citrus for resale. In addition, this division
owns a sugar mill with a current capacity to process
approximately 180,000 metric tons of sugar per year with plans to
increase capacity to approximately 200,000 metric tons for the
2005 harvest. This capacity is sufficient to process all of the
cane harvested by this division and certain additional quantities
harvested on behalf of the third party farmers in the region.
The sugarcane fields and processing mill are located in northern
Argentina in the Salta Province, which experiences seasonal
rainfalls that may limit the harvest season, which then affects
the duration of mill operations and quantities of sugar produced.
This division also owns a juice processing plant and fresh fruit
packaging plant with capacity to produce approximately 3,500 tons
of concentrated juice and package approximately 300,000 boxes of
fresh fruit annually.
(5) Power - Seaboard's Power Division owns two floating electric
power generating facilities, consisting of a system of diesel
engines mounted onto barge-type vessels, with a combined rated
capacity of approximately 112 megawatts, both located on the
Ozama River in Santo Domingo, Dominican Republic. The barges
historically generated power at near capacity throughout the year
as the demand for power in the Dominican Republic exceeds
reliable power supply. However, Seaboard curtailed production
from time to time throughout 2004 due to non-payment by certain
customers. Seaboard operates as an independent power producer
and is not involved in the transmission and distribution
facilities that deliver the power to the end users.
8
(6) Other - Seaboard owns a jalapeno pepper processing plant and
warehouse 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 Seaboard's present facilities are
adequate and suitable for its current purposes.
Item 3. Legal Proceedings
Sierra Club Settlement
In order to settle threatened additional litigation with Sierra
Club, Seaboard agreed to conduct an investigation to determine if
corrective action is required at three farms purchased from PIC
located in Kingfisher and Major Counties in Oklahoma according to
an agreed upon process. Based on the investigation, it has been
determined that two farms do not require any corrective action.
The investigation is ongoing at the remaining farm, and it is
unknown if any remediation will be required. The costs of
conducting the monitoring and the investigation are not material.
Environmental Protection Agency (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, Inc. ("Seaboard Farms"),
Shawnee Funding, Limited Partnership 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, Seaboard Farms received a Notice of Violation
from the State of Oklahoma, alleging that Seaboard Farms has
violated various provisions of state law and the operating
permits related to these same 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 Seaboard
Farms from continuing to operate one or more of these farms.
On April 15, 2003, EPA sent a formal Notice of Violation letter
to the Respondents, alleging that the Respondents have failed to
comply with the RCRA Order because they have not undertaken an
investigation of land on which Seaboard Farms spreads effluent
originating from the five facilities. The Respondents believe
that the Notice of Violation letter has no merit because the RCRA
Order, by its terms, does not cover these areas, and EPA does not
have jurisdiction to impose the RCRA Order with respect to land
application activities.
Seaboard Farms disputes the RCRA Order and the State of
Oklahoma's contentions on legal and factual grounds, and advised
the EPA that it won't comply with the RCRA Order, as written.
Notwithstanding, Seaboard Farms has undertaken an extensive
investigation under the RCRA Order, and has had significant
discussions with the EPA and the State of Oklahoma, proposing to
take a number of corrective actions with respect to the farms in
order to attempt to settle the RCRA Order and the Oklahoma Notice
of Violation. As a part of those discussions, the EPA and the
State of Oklahoma, advised Seaboard Farms that one additional
farm in Kingfisher County must be included in any settlement,
although neither agency has filed any formal claims with respect
to that farm. The EPA recently advised Seaboard Farms that any
such settlement must include a civil fine of $1,200,000.
Seaboard Farms believes that the EPA has no authority to impose a
civil fine, but is attempting to negotiate a settlement. If
the matter is not settled, the EPA could bring an action against
Seaboard Farms to enforce the RCRA Order, although Seaboard Farms
believes it has meritorious defenses to any such action, or the
EPA could determine to take no further action. A tentative
verbal settlement has been reached with the State of Oklahoma
which would require Seaboard Farms to pay a fine of $100,000 and
to undertake agreed upon supplemental environmental projects at a
cost of $80,000. The settlement is subject to the final terms of
the settlement being agreed to and the approval of the Oklahoma
Board of Agriculture. Irrespective of the settlement, Seaboard
intends to proceed with its proposed corrective actions with
respect to the farms.
9
The farms at issue were previously owned by PIC and PIC is
indemnifying Seaboard Farms with respect to the RCRA Order
(reserving its right to contest the obligation to do so),
pursuant to an indemnification agreement which has a $5 million
limit. If the tentative settlement with the State of Oklahoma is
agreed to, the estimated cumulative costs which will be expended
pursuant to the settlement will total approximately $6.2 million,
not including the additional legal costs required to negotiate
the settlement and not including any fines which are required by
EPA or the fine tentatively agreed to with the State of Oklahoma.
If the measures taken pursuant to the settlement are not
effective or if certain additional issues arise at the farms
after the settlement, other measures with additional costs may be
required. PIC has advised Seaboard Farms that it is not
responsible for the costs in excess of $5 million. Seaboard
Farms disputes PIC's determination of the costs to be included in
the calculation. Seaboard Farms believes that the costs to be
considered are less than $5 million, such that PIC is responsible
for all such costs and penalties, except for approximately
$180,000 of estimated costs that would be incurred over 5 years
subsequent to the settlement for certain testing and sampling.
Seaboard Farms has agreed to conduct such testing and sampling as
a part of the sampling it conducts in the normal course of
operations and believes that the incremental costs incurred to
conduct such testing and sampling will be less than $180,000.
Seaboard Farms also believes that a more general indemnity
agreement would require indemnification of liability in excess of
$5 million (excluding the estimated $180,000 cost for testing and
sampling), although PIC disputes this.
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 Seaboard Farms engage in
settlement discussions to avoid further EPA investigative efforts
and potential formal claims being filed. EPA has presented
settlement demands, and Seaboard Farms has responded. Management
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 enforceable settlement agreement.
On April 2, 2002, the United States Environmental Protection
Agency ("EPA") sent to Seaboard Farms a letter pursuant to the
Clean Air Act ("CAA") demanding Seaboard Farms monitor emissions
at certain hog confinement facilities for purposes of determining
whether these operations are in compliance with the CAA. The EPA
also requested 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 any
of the specified farms are not comparable, the letter demanded
that Seaboard Farms conduct monitoring at those farms. The
letter also required that Seaboard Farms submit a plan and
protocol for testing for emissions of particulate matter,
volatile organic compounds and hydrogen sulfide.
Although management believes that EPA's demand is beyond the
Agency's authority pursuant to the CAA and that Seaboard Farms
cannot be required to undertake the air monitoring, Seaboard
Farms is engaging in discussions with EPA to attempt to reach an
agreement that will be satisfactory to EPA. Seaboard Farms has
proposed to conduct certain studies to resolve the CAA
allegations, which studies are estimated to cost approximately
$30,000. No final settlement has been reached with EPA.
If no agreement is reached with EPA, 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. Seaboard Farms believes
the emissions from its hog operations do not require CAA permits.
On February 20, 2003, Seaboard Farms received an additional
Information Request from EPA seeking information as to compliance
with the CWA by Seaboard Farms with respect to virtually all of
its confined animal feeding operations. Management has complied
with the Information Request. At present, no relief has been
sought by the EPA.
10
On March 24, 2003, Seaboard Farms received an additional
Information Request seeking information as to a hog farm and a
feed mill, each located in Colorado. The Company has complied
with the Information Request. At present, no relief has been
sought by the EPA.
The costs incurred to comply with the various Information
Requests from EPA are not material.
Other
On January 26, 2004, the U.S. Department of Justice sent Seaboard
Marine, Ltd. a letter stating that it was investigating possible
violations of 49 U.S.C. sections 5104-5124 and 49 C.F.R. sections
171-173 relating to the transportation, storage and discharge of
hazardous materials. On September 21, 2004, Seaboard Marine pled
guilty to the violations. In conjunction with this guilty plea,
Seaboard Marine entered into a Plea Agreement agreeing to pay a
fine, restitution and other costs totaling approximately
$300,000, to implement a compliance plan, and to conduct training
of employees. At the sentencing, the US attorney will recommend
that the judge impose the sentence set forth in the Plea
Agreement, although the judge has discretion to impose a fine of
up to $500,000.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the
last quarter of the fiscal year covered by this report.
Executive Officers of Registrant
The following table lists the executive officers and certain
significant employees of Seaboard. 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 (79) Chairman of the Board, President and Chief
Executive Officer of Seaboard;
Manager of Seaboard Flour LLC
Steven J. Bresky (51) Senior Vice President, International
Operations
Robert L. Steer (45) Senior Vice President, Treasurer and
Chief Financial Officer
David M. Becker (43) Vice President, General Counsel and
Secretary
Barry E. Gum (38) Vice President, Finance
James L. Gutsch (51) Vice President, Engineering
Ralph L. Moss (59) Vice President, Governmental Affairs
David S. Oswalt (37) Vice President, Taxation and Business
Development
John A. Virgo (44) Vice President, Corporate Controller and
Chief Accounting Officer
Rodney K. Brenneman (40) President, Seaboard Farms, Inc.
Edward A. Gonzalez (39) President, Seaboard Marine Ltd.
Mr. H. Harry Bresky has served as President and Chief Executive
Officer of Seaboard since February 2001 and previously as
President of Seaboard from 1967 to 2001. He has served as
Manager of Seaboard Flour, LLC (previously Seaboard Flour
Corporation) since 2002. Previously 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 Seaboard since February 2001 and
previously as Vice President of Seaboard from 1989 to 2001.
Mr. Steer has served as Senior Vice President, Treasurer and
Chief Financial Officer of Seaboard since February 2001 and
previously as Vice President, Chief Financial Officer of Seaboard
from 1998 to 2001.
11
Mr. Becker has served as Vice President, General Counsel and
Secretary of Seaboard since December 2003, and previously as Vice
President, General Counsel and Assistant Secretary from 2001 to
2003. He served as General Counsel and Assistant Secretary of
Seaboard from 1998 to 2001.
Mr. Gum has served as Vice President, Finance of Seaboard since
December 2003, previously as Director of Finance from 2000 to
2003 and prior to that as Finance Manager from 1999 to 2000.
Mr. Gutsch has served as Vice President, Engineering of Seaboard
since December 1998.
Mr. Moss has served as Vice President, Governmental Affairs of
Seaboard since December 2003 and previously as Director,
Government Affairs from 1993 to 2003.
Mr. Oswalt has served as Vice President, Taxation and Business
Development of Seaboard since December 2003 and previously as
Director of Tax from 1995 to 2003.
Mr. Virgo has served as Vice President, Corporate Controller and
Chief Accounting Officer of Seaboard since December 2003 and
previously as Corporate Controller from 1996 to 2003.
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. from 1997 to
2001.
Mr. Gonzalez has served as President of Seaboard Marine, Ltd.
since January 2005 and previously served as Vice President of
Terminal Operations of Seaboard Marine Ltd. from 2000 to 2005 and
Director of Terminal Operations from 1998 to 2000.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Seaboard's Board of Directors intends that Seaboard will continue
to pay quarterly dividends, with the actual amount of any
dividends being dependant upon such factors as Seaboard's
financial condition, results of operations and current and
anticipated cash needs, including capital requirements. As
discussed in Note 8 of the consolidated financial statements
appearing on pages 43 through 44 of the Seaboard Corporation
Annual Report to Stockholders furnished to the Commission
pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this
Report, Seaboard's ability to declare and pay dividends is
subject to limitations imposed by the note agreements referred to
there.
Seaboard has not established any equity compensation plans or
individual agreements for its employees under which Seaboard
common stock, or options, rights or warrants with respect to
Seaboard common stock, may be granted.
Seaboard did not sell any equity securities during the fiscal
year covered by this report that were not registered under the
Securities Act of 1933.
There were no purchases made by or on behalf of Seaboard or any
"affiliated purchaser" (as defined by applicable rules of the
Commission) of shares of Seaboard's common stock during the
fourth quarter of the fiscal year covered by this report.
In addition to the information provided above, the information
required by Item 5 of Form 10-K is incorporated herein by
reference to (a) the information under "Stockholder Information -
Stock Listing" and (b) the dividends per common share information
and market price range per common share information under
"Quarterly Financial Data" appearing on pages 59 and 8,
respectively, of Seaboard'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 of Form 10-K is incorporated
herein by reference to the "Summary of Selected Financial Data"
appearing on page 7 of Seaboard's Annual Report to Stockholders
furnished to the Commission pursuant to Rule 14a-3(b) and
attached as Exhibit 13 of this Report.
12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information required by Item 7 of Form 10-K is incorporated
herein by reference to "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing on pages
9 through 24 of Seaboard'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 of Form 10-K is incorporated
herein by reference to (a) the material under the captions
"Derivative Instruments and Hedging Activities" within Note 1 of
Seaboard's Consolidated Financial Statements appearing on pages
34 and 35, and (b) to the material under the caption "Derivative
Information" within "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing on pages
22 through 24 of Seaboard'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 of Form 10-K is incorporated
herein by reference to Seaboard's "Quarterly Financial Data,"
"Report of Independent Registered Public Accounting Firm,"
"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 page 8 and pages
26 through 58 of Seaboard'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.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures - As of December
31, 2004, Seaboard's management has evaluated, under the
direction of our chief executive and chief financial officers,
the effectiveness of Seaboard's disclosure controls and
procedures, as defined in Exchange Act 15(d) - 15(e). Based upon
and as of the date of that evaluation, Seaboard's chief executive
and chief financial officers concluded that Seaboard's disclosure
controls and procedures were effective to ensure that information
required to be disclosed in the reports it files and submits
under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported as and when required. It should be noted
that any system of disclosure controls and procedures, however
well designed and operated, can provide only reasonable, and not
absolute, assurance that the objectives of the system are met.
In addition, the design of any system of disclosure controls and
procedures is based in part upon assumptions about the likelihood
of future events. Because of these and other inherent
limitations of any such system, there can be no assurance that
any design will always succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.
Management's Report on Internal Control Over Financial Reporting
- - Information required by Item 9A pursuant to rules 13a-15(f) is
incorporated herein by reference to Seaboard's "Management's
Report on Internal Control over Financial Reporting" appearing on
page 25 of Seaboard's Annual Report to Stockholders furnished to
the commission pursuant to Rule 14a-3(b) and attached as Exhibit
13 to this report.
Change in Internal Controls - There has been no change in
Seaboard's internal control over financial reporting that
occurred during the fiscal quarter ended December 31, 2004 that
has materially affected, or is reasonably likely to materially
affect, Seaboard's internal control over financial reporting.
Item 9B. Other Information
As discussed in Note 13 to the Consolidated Financial Statements
appearing on page 55 of Seaboard's Annual Report to Stockholders
furnished to the Commission pursuant to Rule 14a-3(b) and
attached as Exhibit 13 to this Report, during the fourth quarter
of 2004 Seaboard recorded an impairment in value of its equity
investment in a wine business.
On March 4, 2005 Seaboard adopted the Seaboard Corporation
Retiree Medical Benefit Plan, included as Exhibit 10.10.
On March 4, 2005, Seaboard filed the Seaboard Corporation
Executive Officers' Bonus Policy, included as Exhibit 10.11.
On March 4, 2005, Seaboard amended it Code of Ethics Policy as
discussed in Item 10 below.
13
PART III
Item 10. Directors and Executive Officers of the Registrant
We refer you to the information under the caption "Executive
Officers of Registrant" appearing immediately following the
disclosure in Item 4 of Part I of this report.
Seaboard has adopted a Code of Ethics Policy (the Code) for
directors, officers (including our chief executive officer, chief
financial officer, chief accounting officer, controller and
persons performing similar functions) and employees, which Code
was amended and restated effective March 4, 2005. A copy of this
Code, as amended, is attached as Exhibit 14 to this Report. The
amendment clarified that subsidiaries of Seaboard must adopt a
similar policy and made certain other clarifications. Seaboard
has posted the Code on its internet website,
www.seaboardcorp.com, and intends to disclose any future changes
and waivers to the Code by posting such information on that
website.
In addition to the information provided above, the information
required by Item 10 of Form 10-K is incorporated herein by
reference to (a) the disclosure relating to directors under "Item
1: Election of Directors" appearing on page 5 of the 2005 Proxy
statement, (b) the disclosure relating to Seaboard's audit
committee and "audit committee financial expert" and its director
nomination procedures under "Meetings of the Board of Directors
and Committees -- Committees of the Board" appearing on pages 6
and 7 of Seaboard's definitive proxy statement filed pursuant to
Regulation 14A for the 2005 annual meeting of Stockholders ("2005
Proxy Statement"), and (c) the disclosure relating to late
filings of reports required under Section 16(a) of the Securities
Exchange Act of 1934 under "Section 16(a) Beneficial Ownership
Reporting Compliance" appearing on page 22 of the 2005 Proxy
Statement.
Item 11. Executive Compensation
The information required by Item 11 of Form 10-K is incorporated
herein by reference to (a) the disclosure relating to
compensation of directors under "Meetings of the Board of
Directors and Committees -- Committees of the Board" appearing on
pages 6 and 7 of the 2005 Proxy statement, and (b) the disclosure
relating to compensation of executive officers under "Executive
Compensation and Other Information," "Retirement Plans" and
"Compensation Committee Interlocks and Insider Participation"
appearing on pages 8 through 13 and pages 17 and 18 of the 2005
Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Seaboard has not established any equity compensation plans or
individual agreements for its employees under which Seaboard
common stock, or options, rights or warrants with respect to
Seaboard common stock may be granted.
In addition to the information provided above, the information
required by Item 12 of Form 10-K is incorporated herein by
reference to the disclosure under "Principal Stockholders" and
"Share Ownership of Management and Directors" appearing on pages
3 and 4 of the 2005 Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 of Form 10-K is incorporated
herein by reference to "Compensation Committee Interlocks and
Insider Participation" appearing on pages 17 and 18 of the 2005
Proxy Statement.
Item 14. Principal Accounting Fees and Services
The information required by Item 14 of Form 10-K is incorporated
herein by reference to "Item 2 Selection of Independent
Auditors" appearing on pages 18 through 20 of the 2005 Proxy
Statement.
PART IV
Item 15. Exhibits, Financial Statement Schedules
(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.
14
3.Exhibits.
3.1 Seaboard's Certificate of Incorporation, as amended.
Incorporated herein by reference to Exhibit 3.1 of
Seaboard's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992.
3.2 Seaboard's By-laws, as amended. Incorporated herein by
reference to Exhibit 3.2 of Seaboard'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
Seaboard and various purchasers as listed in the
exhibit. Incorporated herein by reference to Exhibit
4.1 of Seaboard's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993. 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.
4.2 Seaboard Corporation 6.49% Senior Note Due
December 1, 2005 issued pursuant to the Note Purchase
Agreement described above. Incorporated herein by
reference to Exhibit 4.2 of Seaboard'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
Seaboard and various purchasers as listed in the
exhibit. Incorporated herein by reference to Exhibit
4.3 of Seaboard's Form 10-Q for the quarter ended
September 9, 1995. 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.
4.4 Seaboard Corporation 7.88% Senior Note Due June 1, 2007
issued pursuant to the Note Purchase Agreement
described above. Incorporated herein by reference to
Exhibit 4.4 of Seaboard'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 herein by reference to Exhibit 4.7 of
Seaboard'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 herein by reference to Exhibit 4.8 of
Seaboard'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 herein by reference to
Exhibit 4.1 of Seaboard'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 herein by reference to Exhibit
4.2 of Seaboard'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 Seaboard and various
purchasers as listed in the exhibit. Incorporated
herein by reference to Exhibit 4.3 of Seaboard's Form
10-Q for the quarter ended September 28, 2002. 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.
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 herein by reference to Exhibit 4.4 of
Seaboard'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 herein by reference to Exhibit 4.5 of
Seaboard'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 herein by reference to Exhibit 4.6 of
Seaboard's Form 10-Q for the quarter ended
September 28, 2002.
15
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 herein by reference to Exhibit 4.7 of
Seaboard's Form 10-Q for the quarter ended
September 28, 2002.
4.14 Seaboard Corporation Credit Agreement dated as of
December 3, 2004 ($200,000,000 revolving credit
facility expiring on December 2, 2009). The schedules
and exhibits to the Credit Agreement have been omitted
from this filing, but will be provided supplementally
upon request of the Commission.
10.1* Seaboard Corporation Executive Retirement Plan
dated November 5, 2004, amending and restating the
Seaboard Corporation Executive Retirement Plan dated
January 1, 1997 as amended and restated February 28,
2001. The addendums to the Executive Retirement Plan
have been omitted from the filing, but will be provided
supplementally upon request of the Commission.
Incorporated herein by reference to Exhibit 10.1 of
Seaboard's Form 10-Q for the quarter ended October 2,
2004.
10.2* Seaboard Corporation Supplemental Executive
Benefit Plan as Amended and Restated. Incorporated
herein by reference to Exhibit 10.2 of Seaboard's Form
10-K for fiscal year ended December 31, 2000.
10.3* Seaboard Corporation Supplemental Executive
Retirement Plan for H. Harry Bresky dated
March 21, 1995. Incorporated herein by reference to
Exhibit 10.3 of Seaboard's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
10.4* Seaboard Corporation Executive Deferred
Compensation Plan dated January 1, 1999. Incorporated
herein by reference to Exhibit 10.1 of Seaboard's Form
10-Q for the quarter ended March 31, 1999.
10.5* Seaboard Corporation Executive Retirement Plan
Trust dated November 5, 2004 between Seaboard
Corporation and Robert L. Steer as trustee.
Incorporated herein by reference to Exhibit 10.2 of
Seaboard's Form 10-Q for the quarter ended October 2,
2004.
10.6* Seaboard Corporation Investment Option Plan dated
December 18, 2000. Incorporated herein by reference to
Exhibit 10.7 of Seaboard'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 herein 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 herein by reference to
Exhibit 10.2 of Seaboard's Form 10-Q for the quarter
ended September 28, 2002.
10.9 Marketing Agreement dated February 2, 2004 by and among
Seaboard Corporation, Seaboard Farms, Inc., Triumph
Foods LLC, and for certain limited purposes only, the
members of Triumph Foods LLC. Incorporated herein by
reference to Exhibit 10.2 of Seaboard's Form 8-K dated
February 3, 2004.
10.10* Seaboard Corporation Retiree Medical Benefit Plan
dated March 4, 2005. The exhibit to the Retiree
Medical Benefit Plan has been omitted from this
filing, but will be provided supplementally upon
request of the Commission.
10.11* Seaboard Corporation Executive Officers' Bonus
Policy.
13 Sections of Annual Report to security holders
specifically incorporated herein by reference herein.
14 Code of Ethics Policy as amended as of March 4, 2005.
21 List of subsidiaries.
31.1 Certification of the Chief Executive Officer Pursuant
to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
16
31.2 Certification of the Chief Financial Officer Pursuant
to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 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.
32.2 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) Exhibits.
See exhibits identified above under Item 15(a)3.
(c) Financial Statement Schedules.
See financial statement schedules identified above under Item
15(a)2.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Seaboard has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SEABOARD CORPORATION
By /s/H. H. Bresky By /s/Robert L. Steer
H. H. Bresky, President and Chief Robert L. Steer, Senior Vice
Executive Officer President, Treasurer and
(principal executive officer) Chief Financial Officer
(principal financial officer)
Date: March 4, 2005 Date: March 4, 2005
By /s/John A. Virgo
John A. Virgo, Vice President,
Corporate Controller and Chief
Accounting Officer
(principal accounting officer)
Date: March 4, 2005
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. H. Bresky By /s/Kevin M. Kennedy
H. H. Bresky, Director and Chairman Kevin M. Kennedy, Director
of the Board
Date: March 4, 2005 Date: March 4, 2005
By /s/David A. Adamsen By /s/Joseph E. Rodrigues
David A. Adamsen, Director Joseph E. Rodrigues, Director
Date: March 4, 2005 Date: March 4, 2005
By /s/Douglas W. Baena
Douglas W. Baena, Director
Date: March 4, 2005
18
SEABOARD CORPORATION AND SUBSIDIARIES
Index to Consolidated Financial Statements and Schedule
Financial Statements
Stockholders'
Annual Report Page
Report of Independent Registered Public Accounting Firm 26
Consolidated Balance Sheets as of December 31, 2004
and December 31, 2003 28
Consolidated Statements of Earnings for the years
ended December 31, 2004, December 31, 2003 and
December 31, 2002 29
Consolidated Statements of Changes in Equity for the
years ended December 31, 2004, December 31, 2003 and
December 31, 2002 30
Consolidated Statements of Cash Flows for the years
ended December 31, 2004, December 31, 2003 and
December 31, 2002 31
Notes to Consolidated Financial Statements 32
The foregoing are incorporated herein 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) Seaboard'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) Seaboard'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 Seaboard 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, 2004, 2003 and 2002 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
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Seaboard Corporation:
Under date of March 4, 2005, we reported on the consolidated
balance sheets of Seaboard Corporation and subsidiaries (the
Company) as of December 31, 2004 and 2003, 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, 2004, as contained in the December 31, 2004 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, 2004.
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.
Our report dated March 4, 2005 contains an explanatory paragraph
that states that the Company adopted Statement of Financial
Standards No. 143, "Accounting for Asset Retirement Obligations,"
and FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities," and changed its method of accounting for
costs expected to be incurred during regularly scheduled
drydocking of vessels from the accrual method to the direct-
expense method in 2003.
KPMG LLP
Kansas City, Missouri
March 4, 2005
F-2
Schedule II
SEABOARD CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In Thousands)
Balance at Provision Net deductions Accounting Balance at
beginning of year (1) (2) changes (3) end of year
Year ended December 31, 2004:
Allowance for doubtful accounts $23,359 2,463 (11,298) - $14,524
Year ended December 31, 2003:
Allowance for doubtful accounts $16,178 8,473 (1,292) - $23,359
Drydock accrual $ 6,393 - - (6,393) $ -
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
(1) The allowance for doubtful accounts provision is charged to
selling, general and administrative expenses. Through December
31, 2002, the provision for drydock was charged to cost of sales.
(2) Includes write-offs net of recoveries and currency
translation adjustments.
(3) Effective January 1, 2003, Seaboard changed its method of
accounting for drydock maintenance costs from the accrue-in-
advance method to the direct-expense method. As a result,
Seaboard reversed its allowance for drydock accrual as a
cumulative effect of a change in accounting principle.
F-3