UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 2008
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)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report.)
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 whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer [ X ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes . No X .
There were 1,243,909 shares of common stock, $1.00 par value per
share, outstanding on April 21, 2008.
Total pages in filing - 19 pages
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Thousands of dollars except per share amounts)
(Unaudited)
Three Months Ended
March 29, March 31,
2008 2007
Net sales:
Products $ 745,900 $ 512,951
Services 218,849 197,814
Other 28,919 18,383
Total net sales 993,668 729,148
Cost of sales and operating expenses:
Products 681,241 461,168
Services 185,942 150,270
Other 25,335 16,640
Total cost of sales and operating expenses 892,518 628,078
Gross income 101,150 101,070
Selling, general and administrative expenses 41,768 44,252
Operating income 59,382 56,818
Other income (expense):
Interest expense (2,826) (3,542)
Interest income 4,272 4,641
Income from foreign affiliates 3,948 1,416
Minority and other noncontrolling interests (26) (77)
Foreign currency loss, net (1,733) (3,304)
Miscellaneous, net 3,446 586
Total other income (expense), net 7,081 (280)
Earnings before income taxes 66,463 56,538
Income tax benefit (expense) 3,564 (7,183)
Net earnings $ 70,027 $ 49,355
Earnings per common share $ 56.28 $ 39.13
Dividends declared per common share $ 0.75 $ 0.75
Average number of shares outstanding 1,244,205 1,261,367
See accompanying notes to condensed consolidated financial statements.
2
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Thousands of dollars)
(Unaudited)
March 29, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $ 40,261 $ 47,346
Short-term investments 293,474 286,660
Receivables, net 392,772 359,313
Inventories 437,195 392,946
Deferred income taxes 19,920 19,558
Other current assets 87,046 77,710
Total current assets 1,270,668 1,183,533
Investments in and advances to foreign affiliates 65,256 60,706
Net property, plant and equipment 755,093 730,395
Goodwill 40,628 40,628
Intangible assets, net 30,493 30,895
Other assets 51,239 47,542
Total assets $2,213,377 $2,093,699
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 159,836 $ 85,088
Current maturities of long-term debt 11,077 11,912
Accounts payable 118,175 135,398
Other current liabilities 187,148 190,530
Total current liabilities 476,236 422,928
Long-term debt, less current maturities 125,400 125,532
Deferred income taxes 100,905 105,697
Other liabilities 86,123 84,343
Total non-current and deferred liabilities 312,428 315,572
Minority and other noncontrolling interests 971 971
Stockholders' equity:
Common stock of $1 par value,
Authorized 4,000,000 shares;
issued and outstanding 1,243,909 and 1,244,278
shares 1,244 1,244
Accumulated other comprehensive loss (77,695) (78,651)
Retained earnings 1,500,193 1,431,635
Total stockholders' equity 1,423,742 1,354,228
Total liabilities and stockholders' equity $2,213,377 $2,093,699
See accompanying notes to condensed consolidated financial statements.
3
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 29, March 31,
2008 2007
Cash flows from operating activities:
Net earnings $ 70,027 $ 49,355
Adjustments to reconcile net earnings to cash
from operating activities:
Depreciation and amortization 21,283 18,783
Income from foreign affiliates (3,948) (1,416)
Other investment income, net (1,520) (420)
Foreign currency exchange losses 7,975 -
Minority and noncontrolling interest 26 77
Deferred income taxes (5,364) (822)
Gain from sale of fixed assets (461) (515)
Changes in current assets and liabilities:
Receivables, net of allowance (32,152) 36,618
Inventories (44,504) (14,760)
Other current assets (9,858) (5,130)
Current liabilities, exclusive of debt (20,537) (39,005)
Other, net 3,807 7,456
Net cash from operating activities (15,226) 50,221
Cash flows from investing activities:
Purchase of short-term investments (63,658) (752,131)
Proceeds from the sale of short-term investments 49,896 767,495
Proceeds from the maturity of short-term investments 5,459 2,432
Investments in and advances to foreign affiliates, net 42 1,978
Capital expenditures (47,663) (39,019)
Repurchase of minority interest in a controlled
subsidiary - (30,000)
Proceeds from the sale of fixed assets 727 639
Other, net (1,185) (1,219)
Net cash from investing activities (56,382) (49,825)
Cash flows from financing activities:
Notes payable to banks, net 67,034 853
Principal payments of long-term debt (989) (1,990)
Repurchase of common stock (536) -
Dividends paid (933) (946)
Other, net (26) (40)
Net cash from financing activities 64,550 (2,123)
Effect of exchange rate change on cash (27) 390
Net change in cash and cash equivalents (7,085) (1,337)
Cash and cash equivalents at beginning of year 47,346 31,369
Cash and cash equivalents at end of period $ 40,261 $ 30,032
See accompanying notes to condensed consolidated financial statements.
4
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 - Accounting Policies and Basis of Presentation
The condensed consolidated financial statements include the accounts of
Seaboard Corporation and its domestic and foreign subsidiaries
("Seaboard"). All significant intercompany balances and transactions
have been eliminated in consolidation. Seaboard's investments in non-
controlled affiliates are accounted for by the equity method. The
unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements of Seaboard for
the year ended December 31, 2007 as filed in its Annual Report on
Form 10-K. Seaboard's first three quarterly periods include
approximately 13 weekly periods ending on the Saturday closest to the end
of March, June and September. Seaboard's year-end is December 31.
The accompanying unaudited condensed consolidated financial statements
include all adjustments (consisting only of normal recurring accruals)
which, in the opinion of management, are necessary for a fair
presentation of financial position, results of operations and cash flows.
Results of operations for interim periods are not necessarily indicative
of results to be expected for a full year.
Use of Estimates
The preparation of the consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities at
the date of the consolidated financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
New Accounting Standards
In December 2007, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141(R) (SFAS 141R),
"Business Combinations." This statement defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination, establishes the acquisition date as the date that the
acquirer achieves control and requires the acquirer to recognize the
assets acquired, liabilities assumed and any noncontrolling interest at
their fair values as of the acquisition date. This statement also
requires that acquisition-related costs of the acquirer be recognized
separately from the business combination and will generally be expensed
as incurred. Seaboard will be required to adopt this statement as of
January 1, 2009. The impact of adopting SFAS 141R will be limited to any
future business combinations for which the acquisition date is on or
after January 1, 2009.
In December 2007, the FASB issued Statement of Financial Accounting
Standards No. 160 (SFAS 160), "Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51." This statement will
change the accounting and reporting for minority interests, which will be
recharacterized as noncontrolling interests and classified as a component
of equity. Seaboard will be required to adopt this statement as of
January 1, 2009. The adoption of SFAS 160 will not have a material
impact on Seaboard's financial position or net earnings.
In February 2008, the FASB issued FASB Staff Position 157-2 which defers
the effective date of SFAS 157 for nonfinancial assets and nonfinancial
liabilities, except for items that are recognized or disclosed at fair
value in an entity's financial statements on a recurring basis (at least
annually). Seaboard will be required to adopt SFAS 157 for these
nonfinancial assets and nonfinancial liabilities as of January 1, 2009.
Management believes the adoption of SFAS 157 deferral provisions will not
have a material impact on Seaboard's financial position or net earnings.
In March 2008, the FASB issued Statement of Financial Accounting
Standards No. 161 (SFAS 161), "Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133." This
statement will change the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide
enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and
how derivative instruments and related hedged items affect an entity's
financial position, net earnings, and cash flows. Seaboard will be
required to adopt this statement as of January 1, 2009. The adoption of
SFAS 161 will not have a material impact on Seaboard's financial position
or net earnings.
Note 2 - Repurchase of Minority Interest
On December 27, 2006, Seaboard entered into a Purchase Agreement to
repurchase the 4.74% equity interest in Seaboard Foods LP from the former
owners of Daily's effective January 1, 2007. As part of the Purchase
Agreement, on January 2, 2007 Seaboard paid $30,000,000 of the purchase
price for the 4.74% equity interest to the former
5
owners of Daily's. Based on the formula of operating results and certain
net cash flows through June 30, 2007, the final purchase price was
determined to be $61,260,000, including transaction costs of $53,000.
Seaboard paid the balance of the purchase price owed to the former owners
of Daily's of $31,207,000 in August 2007.
Note 3 - Inventories
The following is a summary of inventories at March 29, 2008 and
December 31, 2007:
March 29, December 31,
(Thousands of dollars) 2008 2007
At lower of LIFO cost or market:
Live hogs and materials $201,373 $181,019
Fresh pork and materials 24,800 18,550
226,173 199,569
LIFO adjustment (30,653) (23,509)
Total inventories at lower of LIFO cost or market 195,520 176,060
At lower of FIFO cost or market:
Grain, primarily wheat and corn, and soybean meal 128,836 100,082
Sugar produced and in process 34,807 35,180
Other 38,366 33,782
Total inventories at lower of FIFO cost or market 202,009 169,044
Grain, flour and feed at lower of weighted average cost or
market 39,666 47,842
Total inventories $437,195 $392,946
Note 4 - Income Taxes
Seaboard's tax returns are regularly audited by federal, state and
foreign tax authorities, which may result in adjustments. Seaboard's
U.S. federal income tax returns have been reviewed through the 2004 tax
year. There have not been any material changes in unrecognized income
tax benefits since December 31, 2007. Interest related to unrecognized
tax benefits and penalties were not material for the three months ended
March 29, 2008.
Note 5 - Fair Value Measurements
In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157 (SFAS 157), "Fair Value Measurements". This
statement established a single authoritative definition of fair value
when accounting rules require the use of fair value, set out a
framework for measuring fair value, and required additional disclosures
about fair-value measurements. SFAS 157 clarifies that fair value is
an exit price, representing the amount that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants.
Seaboard adopted SFAS 157 on January 1, 2008 with the exception of
nonfinancial assets and nonfinancial liabilities that were deferred by
FASB Staff Position 157-2 as discussed in Note 1 to the Condensed
Consolidated Financial Statements. As of March 29, 2008, Seaboard has
not applied SFAS 157 to goodwill and intangible assets in accordance
with FASB Staff Position 157-2.
SFAS 157 discusses valuation techniques, such as the market approach
(prices and other relevant information generated by market conditions
involving identical or comparable assets or liabilities), the income
approach (techniques to convert future amounts to single present
amounts based on market expectations including present value techniques
and option-pricing), and the cost approach (amount that would be
required to replace the service capacity of an asset which is often
referred to as replacement cost). SFAS 157 utilizes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three broad levels. The following is a brief
description of those three levels:
Level 1: Observable inputs such as unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has the
ability to access at the measurement date.
6
Level 2: Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or
indirectly. These include quoted prices for similar assets or
liabilities in active markets and quoted prices for identical or
similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity's own
assumptions.
The following table shows assets and liabilities measured at fair value
on a recurring basis as of March 29, 2008 and also the level within the
fair value hierarchy used to measure each category of assets.
Quoted Prices
In Active Significant
Markets for Other Significant
Balance Identical Observable Unobservable
March 29, Assets Inputs Inputs
(Thousands of dollars) 2008 (Level 1) (Level 2) (Level 3)
Assets:
Available-for-sale securities $293,474 $ 26,870 $266,604 $ -
Deferred compensation plans 29,775 21,218 8,557 -
Derivatives 19,409 9,448 9,961 -
Total Assets $342,658 $ 57,536 $285,122 $ -
Total Liabilities-Derivatives $ 10,544 $ 6,652 $ 3,892 $ -
In February 2007, the FASB issued Statement of Financial Accounting
Standards No. 159 (SFAS 159), "The Fair Value Option for Financial
Assets and Financial Liabilities." This statement provided companies
with an option to report selected financial assets and liabilities at
fair value. This statement was effective for Seaboard as of January 1,
2008; however Seaboard did not elect the option to report any of the
selected financial assets and liabilities at fair value.
Note 6 - Employee Benefits
Seaboard maintains a defined benefit pension plan ("the Plan") for its
domestic salaried and clerical employees. As a result of its liquidity
and tax positions, in April 2007 Seaboard made a deductible
contribution in the amount of $10,000,000 for the 2006 plan year. At
this time management does not plan on making any additional
contributions in 2008 for the 2007 or 2008 plan year. Additionally,
Seaboard also sponsors non-qualified, unfunded supplemental executive
plans, and unfunded supplemental retirement agreements with certain
executive employees. Management is considering funding alternatives,
but currently has no plans to provide funding for these supplemental
plans in advance of when the benefits are paid.
The late Mr. H. H. Bresky retired as President and CEO of Seaboard
effective July 6, 2006. As a result of Mr. Bresky's retirement, he was
entitled to a lump sum payment of $8,709,000 from Seaboard's Executive
Retirement Plan. Under IRS regulations, there is a six month delay of
benefit payments for key employees and thus Mr. Bresky was not paid his
lump sum until February 2007. This lump sum payment exceeded the
Company's service and interest cost components under this plan and thus
required Seaboard to recognize a portion of its actuarial losses.
However, Seaboard was not relieved of its obligation until the
settlement was paid in 2007. Accordingly, the settlement loss of
$3,671,000 was not recognized until February 2007 in accordance with
Statement of Financial Accounting Standards No. 88, "Employers
Accounting for Settlements and Curtailments of Defined Benefit Pension
for Termination Benefits."
7
The net periodic benefit cost of these plans was as follows:
Three Months Ended
March 29, March 31,
(Thousands of dollars) 2008 2007
Components of net periodic benefit cost:
Service cost $ 1,395 $ 1,219
Interest cost 1,960 1,407
Expected return on plan assets (1,681) (1,247)
Amortization and other 369 510
Settlement loss - 3,671
Net periodic benefit cost $ 2,043 $ 5,560
Note 7 - Commitments and Contingencies
During the fourth quarter of 2005, Seaboard's subsidiary, Seaboard
Marine, received a notice of violation letter from U.S. Customs and
Border Protection demanding payment of a significant penalty for an
alleged failure to manifest narcotics in connection with Seaboard
Marine's shipping operations, in violation of a federal statute and
regulation. In response to Seaboard Marine's petition for relief, the
amount of the penalty has been reduced to an amount which will not have
a material adverse effect on the consolidated financial statements of
Seaboard. Seaboard is reviewing the reduction and will continue to
have discussions with U.S. Customs and Border Protection toward a
possible further reduction in the penalty of Seaboard.
Seaboard is subject to various other legal proceedings related to the
normal conduct of its business, including various environmental related
actions. In the opinion of management, none of these actions is
expected to result in a judgment having a materially adverse effect on
the consolidated financial statements of Seaboard.
Contingent Obligations
Certain of the non-consolidated affiliates and third party contractors
who perform services for Seaboard have bank debt supporting their
underlying operations. From time to time, Seaboard will provide
guarantees of that debt allowing a lower borrowing rate or facilitating
third party financing in order to further Seaboard's business
objectives. Seaboard does not issue guarantees of third parties for
compensation. As of March 29, 2008, Seaboard had guarantees
outstanding to two third parties with a total maximum exposure of
$1,978,000. Seaboard has not accrued a liability for any of the third
party or affiliate guarantees as management considered the likelihood
of loss to be remote.
As of March 29, 2008, Seaboard had outstanding letters of credit
("LCs") with various banks which reduced its borrowing capacity under
its committed credit facilities by $56,471,000. Included in these
amounts are LCs totaling $42,688,000, which support the Industrial
Development Revenue Bonds included as long-term debt and $13,708,000 of
LCs related to insurance coverages.
Note 8 - Stockholders' Equity and Accumulated Other Comprehensive Loss
Components of total comprehensive income, net of related taxes, are
summarized as follows:
Three Months Ended
March 29, March 31,
(Thousands of dollars) 2008 2007
Net earnings $70,027 $49,355
Other comprehensive income
net of applicable taxes:
Foreign currency translation adjustment 430 (480)
Unrealized gains (losses) on investments 299 566
Unrecognized pension cost 227 2,603
Amortization of deferred gain on interest rate swaps - (43)
Total comprehensive income $70,983 $52,001
8
The components of and changes in accumulated other comprehensive loss
for the three months ended March 29, 2008 are as follows:
Balance Balance
December 31, Period March 29,
(Thousands of dollars) 2007 Change 2008
Foreign currency translation adjustment $(58,719) $ 430 $(58,289)
Unrealized gain on investments 1,149 299 1,448
Unrecognized pension cost (21,081) 227 (20,854)
Accumulated other comprehensive loss $(78,651) $ 956 $(77,695)
With the exception of the foreign currency translation loss to which a
35% federal tax rate is applied, income taxes for components of
accumulated other comprehensive loss were recorded using a 39%
effective tax rate. In addition, the unrecognized pension cost
includes $5,465,000 related to employees at certain subsidiaries for
which no tax benefit has been recorded.
On August 7, 2007, the Board of Directors authorized Seaboard to
repurchase from time to time prior to August 31, 2009 up to
$50,000,000 market value of its Common Stock in open market or
privately negotiated purchases, of which $18,975,000 remained available
at March 29, 2008. During the first quarter of 2008, Seaboard
repurchased 369 shares of common stock at a cost of $536,000. Shares
repurchased are retired and resume status of authorized and unissued
shares.
Note 9 - Segment Information
Seaboard has an investment in a Bulgarian wine business (the Business).
Since March 2007, this business has been unable to make its scheduled
loan payments and has been in technical default on its bank debt.
During the fourth quarter of 2007, Seaboard signed an agreement to
allow a bank to take majority ownership of the Business resulting in a
loss of significant influence by Seaboard. Accordingly, in the fourth
quarter of 2007 Seaboard discontinued using the equity method of
accounting and wrote-off the remaining investment balance. Seaboard
recorded 50% of the losses from the Business in 2007.
The Pork segment has $28,372,000 of goodwill and $24,000,000 of other
intangibles not subject to amortization in connection with its
acquisition of Daily's in 2005. The fair value of these intangible
assets as of December 31, 2007 is partially based on certain scenarios
that include management's ability and intention to grow and expand
Daily's through construction or acquisition of additional capacity.
However, based in part on recent market conditions, management is
currently evaluating such future plans for expanding Daily's capacity.
Accordingly, depending on the ultimate outcome of management's decision
for the future plans of expanding Daily's capacity, there is a
possibility that some amount of either this goodwill or other
intangible assets, or both, could be deemed impaired during some future
period including fiscal 2008, which may result in a material charge to
earnings.
The following tables set forth specific financial information about
each segment as reviewed by Seaboard's management. Operating income for
segment reporting is prepared on the same basis as that used for
consolidated operating income. Operating income, along with income or
losses from foreign affiliates for the Commodity Trading and Milling
segment, is used as the measure of evaluating segment performance
because management does not consider interest and income tax expense on
a segment basis.
9
Sales to External Customers:
Three Months Ended
March 29, March 31,
(Thousands of dollars) 2008 2007
Pork $238,915 $241,647
Commodity Trading and Milling 479,891 246,688
Marine 210,940 191,059
Sugar and Citrus 31,038 27,333
Power 28,919 18,383
All Other 3,965 4,038
Segment/Consolidated Totals $993,668 $729,148
Operating Income (Loss):
Three Months Ended
March 29, March 31,
(Thousands of dollars) 2008 2007
Pork $ (4,842) $ 20,911
Commodity Trading and Milling 49,072 10,228
Marine 10,880 27,496
Sugar and Citrus 3,173 4,615
Power 2,359 471
All Other 158 115
Segment Totals 60,800 63,836
Corporate Items (1,418) (7,018)
Consolidated Totals $ 59,382 $ 56,818
Income (Loss) from Foreign Affiliates:
Three Months Ended
March 29, March 31,
(Thousands of dollars) 2008 2007
Commodity Trading and Milling $ 3,936 $ 2,355
Sugar and Citrus 12 126
All Other - (1,065)
Segment/Consolidated Totals $ 3,948 $ 1,416
Total Assets:
March 29, December 31,
(Thousands of dollars) 2008 2007
Pork $ 821,007 $ 783,288
Commodity Trading and Milling 483,628 447,211
Marine 248,871 231,278
Sugar and Citrus 177,184 171,978
Power 65,961 64,647
All Other 7,555 6,993
Segment Totals 1,804,206 1,705,395
Corporate Items 409,171 388,304
Consolidated Totals $2,213,377 $2,093,699
10
Investments in and Advances to Foreign Affiliates:
March 29, December 31,
(Thousands of dollars) 2008 2007
Commodity Trading and Milling $ 64,082 $ 59,538
Sugar and Citrus 1,174 1,168
Segment/Consolidated Totals $ 65,256 $ 60,706
Administrative services provided by the corporate office allocated to
the individual segments represent corporate services rendered to and
costs incurred for each specific division with no allocation to
individual segments of general corporate management oversight costs.
Corporate assets include short-term investments, other current assets
related to deferred compensation plans, certain investments in and
advances to foreign affiliates, fixed assets, deferred tax amounts and
other miscellaneous items. Corporate operating losses represent
certain operating costs not specifically allocated to individual
segments.
11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Summary of Sources and Uses of Cash
Cash and short-term investments as of March 29, 2008 decreased $0.3
million from December 31, 2007. Cash used for capital expenditures was
$47.7 million and cash used for operating activities was $15.2 million
for the three months ended March 29, 2008. These uses of cash were
funded by an increase in notes payable. Cash from operating activities
decreased $65.4 million for the 2008 quarter compared to the 2007
quarter, primarily as the result of increases in working capital needs
in the Commodity Trading and Milling segment, primarily for increased
amounts of receivables and inventory, and the Pork segment, primarily
for increased amounts of inventory.
Acquisitions, Capital Expenditures and Other Investing Activities
During the three months ended March 29, 2008, Seaboard invested $47.7
million in property, plant and equipment, of which $25.0 million was
expended in the Pork segment, $0.5 million was expended in the
Commodity Trading and Milling segment, $14.5 million in the Marine
segment, and $7.4 million in the Sugar and Citrus segment. The Pork
segment spent $15.6 million on constructing additional hog finishing
space and the biodiesel plant. The Marine segment spent $12.7 million
to purchase cargo carrying and handling equipment. In the Sugar and
Citrus segment, the capital expenditures were primarily for expansion
of cane growing operations, development of the cogeneration plant and
expansion of alcohol distillery operations. All other capital
expenditures are of a normal recurring nature and primarily include
replacements of machinery and equipment, and general facility
modernizations and upgrades.
For the remainder of 2008 management has budgeted capital expenditures
totaling $125.0 million. In April, 2008, the Pork segment entered into
an agreement to build and operate a majority-owned ham-boning and
processing plant in Mexico. The total cost of this plant is expected
to be $12.0 million with approximately $10.0 million to be spent in
2008. This plant is currently expected to be completed in early 2009.
In addition, the Pork segment plans to spend $17.6 million for
additional hog finishing space, improvements to existing hog
facilities, upgrades to the Guymon pork processing plant and additional
facility upgrades and related equipment. The Commodity Trading and
Milling segment plans to spend $5.0 million primarily for milling
facility upgrades and related equipment. The Marine segment has
budgeted $66.0 million primarily for the potential purchase of two
containerized cargo vessels, additional cargo carrying and handling
equipment and the expansion of existing port facilities. The Sugar and
Citrus segment plans to spend $25.8 million primarily for the
development of a 40 megawatt cogeneration plant, expansion of cane
growing operations and completion of the expansion of alcohol
distillery operations. The balance of $0.6 million is planned to be
spent in all other businesses. Management anticipates funding these
capital expenditures from available cash, the use of available short-
term investments or Seaboard's available borrowing capacity.
The Pork segment previously announced plans to expand its processed
meats capabilities by constructing a separate further processing plant,
primarily for bacon, at an approximate cost of $45.0 million; however
the timing of this facility is uncertain. In addition, other
alternatives to construction may be considered for this project
including the acquisition of an existing facility. As a result,
capital expenditures during 2008 for this project, if any, have not
been determined at this time. In addition, Seaboard has decided not to
proceed with any investment in the previously announced consortium to
construct two coal-fired 305 megawatt electric generating plants in the
Dominican Republic.
Financing Activities and Debt
As of March 29, 2008, Seaboard had committed lines of credit totaling
$100.0 million and uncommitted lines totaling $190.6 million.
Borrowings outstanding under the committed lines of credit totaled
$43.0 million and borrowings under the uncommitted lines of credit
totaled $116.8 million as of March 29, 2008. Outstanding standby
letters of credit reduced Seaboard's borrowing capacity under its
committed credit lines by $56.5 million primarily representing $42.7
million for Seaboard's outstanding Industrial Development Revenue Bonds
and $13.7 million related to insurance coverages.
Seaboard's remaining 2008 scheduled long-term debt maturities total
$10.9 million. Management believes that Seaboard's current combination
of internally generated cash, liquidity, capital resources and
borrowing capabilities will be adequate for its existing operations and
any currently known potential plans for expansion of existing
operations or business segments. Management intends to continue
seeking opportunities for expansion in the industries in which Seaboard
operates, utilizing existing liquidity and available borrowing
capacity.
On August 7, 2007, the Board of Directors authorized Seaboard to
repurchase from time to time prior to August 31, 2009 up to $50.0
million market value of its Common Stock in open market or privately
negotiated purchases, of which $19.0 million remained available at
March 29, 2008. For the quarter ended March 29, 2008, Seaboard used
cash to
12
repurchase 369 shares of common stock at a total price of $0.5
million. The remaining stock repurchase will be funded by cash on
hand. Shares repurchased are retired and resume status of authorized
and unissued shares. The Board's stock repurchase authorization does
not obligate Seaboard to acquire a specific amount of common stock and
the stock repurchase program may be modified or suspended at any time
at Seaboard's discretion.
See Note 7 to the Condensed Consolidated Financial Statements for a
summary of Seaboard's contingent obligations, including guarantees
issued to support certain activities of non-consolidated affiliates or
third parties who provide services for Seaboard.
RESULTS OF OPERATIONS
Net sales increased to $993.7 million for the first quarter of 2008
compared to $729.1 million for the first quarter of 2007. The increase
primarily reflects the result of significant price increases for
commodities sold by the commodity trading business and, to a lesser
extent, increased commodity trading volumes.
Operating income increased to $59.4 million in 2008, compared to $56.8
million during the first quarter of 2007. The increase for the quarter
is primarily the result of higher commodity trading margins that are
not expected to repeat and also reflects the $17.3 million fluctuation
of marking to market the derivative contracts, both as discussed below.
The increase was partially offset by higher feed costs for hogs,
including the effect on LIFO reserves, from the increased price of corn
and soybean meal, and lower margins on marine cargo services as a
result of increased fuel and other costs.
Pork Segment
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $238.9 $241.6
Operating income (loss) $ (4.8) $ 20.9
Net sales for the Pork segment decreased $2.7 million in the first
quarter of 2008 compared to the first quarter of 2007. The decrease
for the quarter is primarily the result of lower prices for pork
products sold partially offset by higher sales volume of pork products.
Overall, export net sales were up as export sales volumes increased
more than export sale prices decreased. Overall, domestic net sales
were down as domestic sale prices decreased more than domestic volumes
increased.
Operating income for the Pork segment decreased $25.7 million in the
first quarter of 2008 compared to the first quarter of 2007. The
decrease primarily relates to higher feed costs from the increased
price of corn and soybean meal. The decline was also attributable to
lower prices for pork products discussed above and the impact of using
the LIFO method for determining certain inventory costs. LIFO
decreased operating income by $7.1 million in 2008 compared to a
decrease of $2.4 million in the first quarter of 2007, primarily as a
result of higher feed costs. Partially offsetting the decrease in
operating income were commodity derivative gains and lower costs for
third party hogs used for processing.
Management is unable to predict future market prices for pork products
or the cost of feed and third party hogs. Feed costs continue to rise
significantly, primarily from the higher cost of corn and soybean meal
as demand has increased due to, among other things, the demand for corn
by ethanol plants. Without a noted improvement in current market
conditions including feed costs, management expects to incur additional
losses during the remainder of 2008. In addition, as discussed in Note
9 to the Condensed Consolidated Financial Statements, depending on
management's future plans for expansion of Daily's, there is a
possibility that some amount of either goodwill or other intangible
assets, or both, could be deemed impaired during some future period
including fiscal 2008, which may result in a material charge to
earnings.
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Commodity Trading and Milling Segment
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $479.9 $246.7
Operating income $ 49.1 $ 10.2
Income from foreign affiliates $ 3.9 $ 2.4
Net sales for the Commodity Trading and Milling segment increased
$233.2 million in the first quarter of 2008 compared to the first
quarter of 2007. The increase primarily reflects significant price
increases for commodities sold by the commodity trading business,
especially for wheat, and, to a lesser extent, increased commodity
trading volumes with third parties. The increased trading volumes to
third parties are primarily a result of Seaboard expanding its business
in new and existing markets.
Operating income for this segment increased $38.9 million in the first
quarter of 2008 compared to the first quarter of 2007. The increase
primarily reflects certain long inventory positions, principally wheat,
previously taken by Seaboard which provided higher than average
commodity trading margins as the price of these commodities
significantly increased to historic highs at the time of sale.
However, depending on future commodity prices, management does not
expect to be able to repeat these significant favorable margins for the
remainder of 2008. The fluctuation also reflects the $17.3 million
fluctuation of marking to market the derivative contracts as discussed
below and, to a lesser extent increased commodity trading volumes as
discussed above.
Due to the uncertain political and economic conditions in the countries
in which Seaboard operates and the current fluctuations in the
commodity markets, management is unable to predict future sales and
operating results, but anticipates positive operating income for the
remainder of 2008 based on current market prices for commodities,
excluding the potential effects of marking to market derivative
contracts. However, the current unprecedented high level of grain
prices increase certain business risks for each of the commodity
trading, consolidated milling and foreign affiliate operations in this
segment. Those risks, including holding high priced inventory or the
potential for reduced sales volumes, can increase if governments impose
sales price controls, grain prices fall significantly and competitors
hold lower priced positions, or customers default, which could result
in write-downs of inventory values and an increase in bad debt expense.
If any one or more of these conditions develop, the result may
materially lower operating income and could result in operating losses
for any one or all of the commodity trading, consolidated milling and
foreign affiliate operations.
Had Seaboard not applied mark-to-market accounting to its derivative
instruments, operating income would have been lower by $17.2 million
for the first quarter of 2008, while operating income would have been
higher by $0.2 million for the first quarter of 2007. While management
believes its commodity futures and options, foreign exchange contracts
and forward freight agreements are primarily economic hedges of its
firm purchase and sales contracts or anticipated sales contracts,
Seaboard does not perform the extensive record-keeping required to
account for these types of transactions as hedges for accounting
purposes. Accordingly, while the changes in value of the derivative
instruments were marked to market, the changes in value of the firm
purchase or sales contracts were not. As products are delivered to
customers, these mark-to-market adjustments will be primarily offset by
realized margins as revenue is recognized. Accordingly, these mark-to-
market gains could reverse in future quarters in 2008.
Income from foreign affiliates in the first quarter of 2008 increased
by $1.5 million compared to the first quarter of 2007. Based on the
uncertainty of local political and economic situations in the countries
in which the flour and feed mills operate, and increasing grain costs,
management cannot predict future results.
Marine Segment
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $210.9 $191.1
Operating income $ 10.9 $ 27.5
Net sales for the Marine segment increased $19.8 million in the first
quarter of 2008 compared to the first quarter of 2007, reflecting
higher cargo volumes and higher cargo rates. Cargo volumes were higher
as a result of the expansion of services provided in certain markets
and continued favorable economic conditions in most Latin American
markets served. Cargo rates were higher in certain markets primarily
as a result of higher cost-recovery surcharges for fuel.
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Operating income for the Marine segment decreased $16.6 million for the
first quarter of 2008 compared to the first quarter of 2007. The
decrease was primarily the result of significantly higher fuel costs
for vessels on a per unit shipped basis in excess of higher cost-
recovery surcharges noted above. Operating income was also decreased
by higher costs on a per unit shipped basis for various operating costs
such as stevedoring, equipment, charter hire and owned-vessel operating
costs, and trucking. Although management cannot predict changes in
future volumes and cargo rates or to what extent changes in economic
conditions and operating cost increases will impact net sales or
operating income, it does expect this segment to remain profitable for
the remainder of 2008, although significantly lower than 2007.
Sugar and Citrus Segment
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $ 31.0 $ 27.3
Operating income $ 3.2 $ 4.6
Income from foreign affiliates $ 0.0 $ 0.1
Net sales for the Sugar and Citrus segment increased $3.7 million in
the first quarter of 2008 compared to the first quarter of 2007. The
increase primarily reflects higher domestic sugar prices. Although
domestic Argentine sugar prices increased, governmental authorities
continue to attempt to control inflation by limiting the price of basic
commodities, including sugar. Accordingly, management cannot predict
whether sugar prices will continue to increase. Seaboard expects to at
least maintain its historical sales volume to Argentinean customers.
Operating income decreased $1.4 million in the first quarter of 2008
compared to the first quarter of 2007. The decrease is the result of
higher administrative costs and lower overall margins on sugar sales
from a higher percentage mix of purchased third party sugar for resale,
which has a significantly lower margin compared to sugar produced by
Seaboard. Management expects operating income will remain positive for
the remainder of 2008.
Power Segment
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $ 28.9 $ 18.4
Operating income $ 2.4 $ 0.5
Net sales for the Power segment increased $10.5 million in the first
quarter of 2008 compared to the first quarter of 2007 primarily
reflecting higher rates. The higher rates were attributable primarily
to higher fuel costs, a component of pricing. Operating income
increased $1.9 million in the first quarter of 2008 compared to the
first quarter of 2007. The increase is primarily the result of higher
rates being in excess of higher fuel costs. Management cannot predict
future fuel costs or the extent to which rates will fluctuate compared
to fuel costs, although management expects this segment to remain
profitable for the remainder of 2008.
All Other
Three Months Ended
March 29, March 31,
(Dollars in millions) 2008 2007
Net sales $ 4.0 $ 4.0
Operating income $ 0.2 $ 0.1
Loss from foreign affiliate $ - $ (1.1)
Net sales and operating income primarily represents results from the
jalapeno pepper operations. The loss from foreign affiliate reflects
Seaboard's share of losses from its equity method investment in a
Bulgarian wine business. During the fourth quarter of 2007, Seaboard
signed an agreement to allow a bank to take majority ownership of the
wine business resulting in a loss of significant influence by Seaboard.
Accordingly, Seaboard discontinued using the equity method of
accounting. See Note 9 to the Condensed Consolidated Financial
Statements for further discussion of this business.
15
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses decreased by
$2.5 million in the first quarter of 2008 compared to the first quarter
of 2007 primarily as a result of a $3.7 million pension settlement loss
recognized in the first quarter of 2007 related to Mr. Bresky's
retirement payment in February 2007 as discussed in Note 6 to the
Condensed Consolidated Financial Statements. As a percentage of
revenues, SG&A decreased to 4.2% in the first quarter of 2008 compared
to 6.1% for the first quarter of 2007 primarily as a result of
increased sales in the Commodity Trading and Milling segment and, to a
lesser extent, the pension settlement loss noted above.
Foreign Currency Losses
Seaboard realized net foreign currency losses of $1.7 million in the
first quarter of 2008 compared with $3.3 million of losses in the first
quarter of 2007. The fluctuation for the quarter primarily relates to
exchange gains realized in certain South American countries for the
Marine segment.
Miscellaneous, Net
Miscellaneous, net was $3.4 million in the first quarter of 2008
compared to $0.6 million in the first quarter of 2007. The fluctuation
primarily reflects income in 2008 of $1.8 million in the Power segment
related to the settlement of a receivable, not related to its business,
purchased at a discount and, to a lesser extent, increased income of
$0.9 million from the mark-to-market of commodity futures and options
contracts that management does not view as economic hedges of its
operations.
Income Tax Expense
The effective tax rate decreased in 2008 compared to 2007 resulting in
a tax benefit for 2008 primarily based on a projected domestic taxable
loss compared to permanently deferred foreign earnings for 2008.
OTHER FINANCIAL INFORMATION
In December 2007, the FASB issued Statement of Financial Accounting
Standards No. 141(R) (SFAS 141R), "Business Combinations." This
statement defines the acquirer as the entity that obtains control of
one or more businesses in the business combination, establishes the
acquisition date as the date that the acquirer achieves control and
requires the acquirer to recognize the assets acquired, liabilities
assumed and any noncontrolling interest at their fair values as of the
acquisition date. This statement also requires that acquisition-
related costs of the acquirer be recognized separately from the
business combination and will generally be expensed as incurred.
Seaboard will be required to adopt this statement as of January 1,
2009. The impact of adopting SFAS 141R will be limited to any future
business combinations for which the acquisition date is on or after
January 1, 2009.
In December 2007, the FASB issued Statement of Financial Accounting
Standards No. 160 (SFAS 160), "Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51." This statement will
change the accounting and reporting for minority interests, which will
be recharacterized as noncontrolling interests and classified as a
component of equity. Seaboard will be required to adopt this statement
as of January 1, 2009. The adoption of SFAS 160 will not have a
material impact on Seaboard's financial position or net earnings.
In February 2008, the FASB issued FASB Staff Position 157-2 which
defers the effective date of SFAS 157 for nonfinancial assets and
nonfinancial liabilities, except for items that are recognized or
disclosed at fair value in an entity's financial statements on a
recurring basis (at least annually). Seaboard will be required to
adopt SFAS 157 for these nonfinancial assets and nonfinancial
liabilities as of January 1, 2009. Management believes the adoption
of SFAS 157 will not have a material impact on Seaboard's financial
position or net earnings.
In March 2008, the FASB issued Statement of Financial Accounting
Standards No. 161 (SFAS 161), "Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133." This
statement will change the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide
enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and
how derivative instruments and related hedged items affect an entity's
financial position, net earnings, and cash flows. Seaboard will be
required to adopt this statement as of January 1, 2009. The adoption
of SFAS 161 will not have a material impact on Seaboard's financial
position or net earnings.
16
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Seaboard is exposed to various types of market risks in its day-to-day
operations. Seaboard utilizes derivative instruments to mitigate some
of these risks including both purchases and sales of futures and
options to hedge inventories, forward purchase and sale contracts, and
forward freight agreements. From time to time, Seaboard may enter into
speculative derivative transactions not directly related to its raw
material requirements. The nature of Seaboard's market risk exposure
related to these items has not changed materially since
December 31, 2007.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures - Seaboard's
management 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 Rule 13a-15(e) as of
March 29, 2008. 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. Due to 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.
Change in Internal Controls - There has been no change in Seaboard's
internal control over financial reporting required by Exchange Act Rule
13a-15 that occurred during the fiscal quarter ended March 29, 2008
that has materially affected, or is reasonably likely to materially
affect, Seaboard's internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1A. Risk Factors
There have been no material changes in the risk factors as previously
disclosed in Seaboard's Annual Report on form 10-K for the year ended
December 31, 2007.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table contains information regarding Seaboard's purchase of
its common stock during the quarter.
Issuer Purchases of Equity Securities
Approximate
Dollar
Total Value
Number of
of Shares Shares
Purchased that May
as Part Yet Be
Total Average of Publicly Purchased
Number of Price Announced Under the
Shares Paid per Plans or Plans or
Period Purchased Share Programs Programs
January 1 to January 31, 2008 - n/a n/a $19,511,158
February 1 to February 29, 2008 - n/a n/a $19,511,158
March 1 to March 29, 2008 369 $ 1,452 369 $18,975,441
Total 369 $ 1,452 369 $18,975,441
All purchases during the quarter were made under the authorization from
our Board of Directors to purchase up to $50.0 million of Seaboard
common stock announced on August 8, 2007. An expiration date of August
31, 2009 has been specified for this authorization. All purchases were
made through open-market purchases and all the repurchased shares have
been retired.
17
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders was held on April 28, 2008 in
Auburndale, Massachusetts. Two items were submitted to a vote as
described in Seaboard's Proxy Statement dated March 14, 2008. The
following table briefly describes the proposals and results of the
stockholders' vote.
Votes in Votes
Favor Withheld
1.To elect the following persons as directors.
Steven J. Bresky 1,143,126.24 77,570
David A. Adamsen 1,154,499.24 66,197
Douglas W. Baena 1,154,468.24 66,228
Kevin M. Kennedy 1,154,487.24 66,209
Joseph E. Rodrigues 1,154,426.24 66,270
Votes in Votes Votes
Favor Against Abstaining
2.To ratify selection of KPMG LLP as
independent auditors for 2008. 1,219,514.24 1,022 160
There were no broker nonvotes on any matter.
Item 6. Exhibits
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
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
This Form 10-Q contains 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, including the impact of mark-to-
market accounting on operating income; 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) Seaboard's ability to obtain adequate financing and liquidity,
(ii) the price of feed stocks and other materials used by Seaboard,
(iii) the sales price or market conditions for pork, grains, sugar and
other products and services, (iv) statements concerning management's
expectations of recorded tax effects under existing circumstances, (v)
the ability of the Commodity Trading and Milling segment to
successfully compete in the markets it serves and the volume of
business and working capital requirements associated with the
competitive trading environment, (vi) the charter hire rates and fuel
prices for vessels, (vii) the stability of the Dominican Republic's
economy, fuel costs and related spot market prices and collection of
receivables in the Dominican Republic, (viii) the effect of the
fluctuation in foreign currency exchange rates, (ix) statements
concerning profitability or sales volume of any of Seaboard's segments,
(x) the anticipated costs and completion timetable for Seaboard's
scheduled capital improvements, or (xi) 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.
18
This list of forward-looking statements is not exclusive. Seaboard
undertakes no obligation to publicly update or revise any forward-
looking statement, whether as a result of new information, future
events, changes in assumptions or otherwise. 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 report, 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DATE: April 29, 2008
Seaboard Corporation
by: /s/ Robert L. Steer
Robert L. Steer, Senior Vice President,
Chief Financial Officer
(principal financial officer)
by: /s/ John A. Virgo
John A. Virgo, Vice President, Corporate
Controller and Chief Accounting Officer
(principal accounting officer)
19