10-K 1 k-10.txt SEABOARD CORPORATION 2001 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission file number: 1-3390 Seaboard Corporation (Exact name of registrant as specified in its charter) Delaware 04-2260388 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 9000 W. 67th Street, Shawnee Mission, Kansas 66202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (913) 676-8800 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock American Stock $1.00 Par Value Exchange Securities registered pursuant of Section 12(g) of the Act: None (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X The aggregate market value of 348,815 shares of voting stock held by nonaffiliates on January 31, 2002 was approximately $107,469,902, based on the closing price of $308.10 per share. As of March 1, 2002, the number of shares of common stock outstanding was 1,487,519.75. DOCUMENTS INCORPORATED BY REFERENCE Part I, item 1(b), a part of item 1(c)(1) and the financial information required by item 1(d) and Part II, items 5, 6, 7, 7A and 8 are incorporated by reference to the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b). Part III, a part of item 10 and items 11, 12 and 13 are incorporated by reference to the Registrant's definitive proxy statement filed pursuant to Regulation 14A for the 2002 annual meeting of stockholders (the "2002 Proxy Statement"). This Form 10-K and its Exhibits (Form 10-K) contain forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact. These statements appear in a number of places in this Form 10-K and include statements regarding the intent, belief or current expectations of the Company and its management with respect to (i) the cost and timing of the completion of new or expanded facilities, (ii) the Company's financing plans, (iii) the price of feed stocks and other materials used by the Company, (iv) the sale price for pork products from such operations, (v) the price for the Company's products and services, (vi) the effect of the devaluation of the Argentine peso, (vii) the effect of the changes to the produce division operations on the consolidated financial statements of the Company, (viii) the potential effect of the proposed U.S. Farm Bill on the Company's Pork Division, (ix) the potential impact of various environmental actions pending or threatened against the Company or (x) other trends affecting the Company's financial condition or results of operations. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of various factors. The accompanying information contained in this Form 10-K, including without limitation, the information under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations", identifies important factors which could cause such differences. PART I Item 1. Business (a) General Development of Business Seaboard Corporation, a Delaware corporation, the successor corporation to a company first incorporated in 1928, and subsidiaries ("Registrant" or "Company"), is a diversified international agribusiness and transportation company which is primarily engaged domestically in pork production and processing, and cargo shipping. Overseas, the Company is primarily engaged in commodity merchandising, flour and feed milling, sugar production, and electric power generation. See Item 1(c) (1) (ii) below for a discussion of developments in specific segments. (b) Financial Information about Industry Segments The information required by Item 1 relating to Industry Segments is hereby incorporated by reference to Note 13 of Registrant's Consolidated Financial Statements appearing on pages 47 through 50 of the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. (c) Narrative Description of Business (1) Business Done and Intended to be Done by the Registrant (i) Principal Products and Services Registrant produces hogs and processes pork in the United States and sells fresh pork to further processors, foodservice and retail, primarily in the western half of the United States and foreign markets. Hogs produced at Company owned or leased facilities as well as third-party hogs are primarily processed at the Company's processing plant. Registrant operates an ocean liner service for containerized cargo primarily between Florida and ports in the Caribbean Basin and Central and South America, and also operates a cargo terminal facility at the Port of Houston. Registrant markets grains, oilseeds and oilseed products in bulk to affiliated companies and third party customers primarily in Africa, the Caribbean, Central and South America, and the Eastern Mediterranean. Registrant operates its own bulk carriers primarily in the Atlantic Basin to conduct a portion of its commodity trading activities and charters third party bulk carriers to conduct commodity trading activities and transport bulk goods on behalf of third party customers. Registrant, by itself or through non-controlled affiliates, operates milling businesses in Africa, the Caribbean and South America. Registrant operates two power generating facilities in the Dominican Republic, and produces and refines sugarcane and produces and processes citrus in Argentina. Registrant processes jalapeno peppers in Honduras. Registrant also brokers shrimp for independent Honduran growers. The majority of these products are transported using the Registrant's shipping line and distribution facility in Miami, Florida. The Registrant, through a non-controlled affiliate, produces wine in Bulgaria for distribution primarily throughout Europe. The information required by Item 1 with respect to the amount or percentage of total revenue contributed by any class of similar products or services which account for 10% or more of consolidated revenue in any of the last three fiscal years is hereby incorporated by reference to Note 13 of Registrant's Consolidated Financial Statements appearing on pages 47 through 50 of the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to rule 14a-3(b) and attached as Exhibit 13 to this report. (ii) Status of Product or Segment In May 2001, the Registrant completed construction of a feed mill in Okeene, Oklahoma for the Pork Division. In March 2001, the Registrant terminated previously announced plans to commence construction during 2001 of a second pork processing plant at a location in Northeast Kansas. In February 2002, the Company announced plans to build a second processing plant in northern Texas along with related plans to expand its vertically integrated hog production facilities. These plans are contingent on obtaining necessary permits, commitments for a sufficient quantity of hogs to operate the plant, and no statutory impediments being imposed by the proposed farm bill currently being debated in the U.S. Congress as discussed below. The Company also anticipates pursuing various contract grower finishing arrangements. On February 12, 2002, the United States Senate passed a Farm Bill, (S. Bill 1731), which includes a provision (the "Johnson Amendment") which prohibits packers, such as the Company, from owning or controlling livestock intended for slaughter for more than 14 days prior to the slaughter. The Johnson Amendment also contains a transition rule applicable to packers of pork providing for an effective date which is 18 months after enactment of the Act. The U.S. House of Representatives also passed a Farm Bill (H. Bill 2646), but this Bill does not include the prohibition on packers owning or controlling livestock. A committee of Conferees, consisting of members of both the Senate and the House, has been established to reconcile the differences between the two Bills, including the Johnson Amendment. If a uniform Bill is agreed upon by the committee, the Farm Bill will be voted upon by both the Senate and the House and, if enacted, will be sent to the President for him to sign into law or to veto. If the Farm Bill containing the Johnson Amendment becomes law, it could have a material adverse effect on the Company, its operations and its strategy of vertical integration in the pork business. Currently, the Company owns and operates production facilities and owns swine and produces approximately three million hogs per year with construction in progress for an additional half million hogs per year. If enacted, the Johnson Amendment would prohibit the Company from owning or controlling hogs, and thus would require the Company to divest these operations, possibly at prices which are below the carrying value of such assets on the Company's balance sheet, or otherwise restructure its ownership and operation. The Johnson Amendment could also be construed as prohibiting or restricting the Company from engaging in various contractual arrangements with third party hog producers, such as traditional contract finishing arrangements. Accordingly, the Company's ability to contract for the supply of hogs to its processing facility may be significantly, negatively impacted. The Company, along with industry groups and other similarly situated companies are vigorously lobbying against enactment of the Johnson Amendment. The Registrant owns an Argentine company involved in sugar and citrus operations. In January 2002, the Argentine peso was devalued resulting in a write-down in the net assets of this Argentine company (see Note 12 of the Registrant's Consolidated Financial Statements for further discussion). The economy of Argentina has been severely, negatively impacted by the devaluation and the continuing recession. The Registrant cannot presently predict the effect the current conditions will have on the Company's future business or financial position and results of operations, but further devaluation will result in additional asset write-downs. Through September 2001, the Registrant's power generating facilities in the Dominican Republic sold 100% of their production to a state-owned electric company. Subsequent to September 29, 2001, the Company began selling power directly to the power distribution companies at spot market prices. The prices realized and ultimate profitability are now subject to the effects of market conditions and competition. In December 2001, the Registrant sold a 10% minority interest in its power barge placed in service during the fourth quarter of 2000. As part of the sale agreement, the buyer has the option to sell its interest back to the Company at any time until December 31, 2004 for book value at the time of sale. In the fourth quarter of 2001, Registrant ceased pickle, pepper and shrimp farming operations and is considering various strategic future alternatives for these operations and its shrimp processing plant in Honduras. Certain of these farms are currently leased and operated by local farmers under short-term agreements. In May 2001, the Registrant exchanged ownership interest in a joint venture in Maine engaged in the production and processing of salmon and other seafood products for shares of common stock of Fjord Seafood ASA. (iii) Sources and Availability of Raw Materials None of Registrant's businesses utilize material amounts of raw materials that are dependent on purchases from one supplier or a small group of dominant suppliers. (iv) Patents, Trademarks, Licenses, Franchises and Concessions The following names of the Registrant's businesses are registered trademarks: Seaboard, Seaboard Farms and Seaboard Marine. The Company's Power Division has a local environmental permit and permits to operate power generation facilities in the Dominican Republic. Part of the sales within the Registrant's Sugar and Citrus segment are made under the Chango brand in Argentina. Patents, trademarks, franchises, licenses and concessions are not material to any of Registrant's other segments. (v) Seasonal Business Profits from processed pork are generally higher in the fall months. Sugar prices in Argentina are generally lower during the typical sugarcane harvest period between June and November. The Registrant's other segments are not seasonally dependent to any material extent. (vi) Practices Relating to Working Capital Items There are no unusual industry practices or practices of Registrant relating to working capital items. (vii) Depending on a Single Customer or Few Customers Registrant does not have sales to any one customer equal to 10% or more of Registrant's consolidated revenues. The power segment sells power in the Dominican Republic on the spot market accessed by three local distribution companies, a state-owned electric company, and limited other customers. No other segments have sales to a few customers which, if lost, would have a material adverse effect on any such segment or on Registrant taken as a whole. (viii) Backlog Backlog is not material to Registrant's businesses. (ix) Government Contracts. No material portion of Registrant's business involves government contracts. (x) Competitive Conditions Competition in Registrant's pork segment comes from a variety of national and regional producers and is based primarily on product quality, customer service and price. According to recent trade publications, Registrant ranks as one of the nation's top five pork producers (based on sows in production) and top ten pork processors (based on daily processing capacity). The Registrant's ocean liner service for containerized cargoes faces competition based on price and customer service. Registrant believes it is among the top five ranking ocean liner services for containerized cargoes in the Caribbean Basin based on cargo volume. The Registrant's sugar business faces significant competition for sugar sales in the local Argentine market. Sugar prices in Argentina are higher than world markets due to current Argentine government price protection policies. The Registrant's power division is located in the Dominican Republic. Power generated by this division is sold on the spot market at prices primarily based on market conditions rather than cost-based rates. (xi) Research and Development Activities Registrant does not engage in material research and development activities. (xii) Environmental Compliance Registrant is subject to numerous Federal, state and local provisions relating to the environment which require the expenditure of funds in the ordinary course of business. In the next fiscal year, Registrant anticipates spending approximately $2.5 million in order to ensure continued compliance with applicable Federal, state and local environmental provisions with respect to Registrant's Dorman Sow Farm. No other significant amounts are anticipated to be expended for these purposes, including with respect to the items disclosed in Item 3. Legal Proceedings, except as incurred in the ordinary course of business. (xiii) Number of Persons Employed by Registrant As of December 31, 2001, Registrant, excluding non- consolidated foreign affiliates, had 9,502 employees, of whom 5,574 were employed in the United States. (d) Financial Information about Foreign and Domestic Operations and Export Sales The financial information required by Item 1 relating to export sales is hereby incorporated by reference to Note 13 of Registrant's Consolidated Financial Statements appearing on pages 47 through 50 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this report. Registrant considers its relations with the governments of the countries in which its foreign subsidiaries and affiliates are located to be satisfactory, but these foreign operations are subject to the normal risks of doing business abroad, including expropriation, confiscation, war, insurrection, civil strife and revolution, currency inconvertibility and devaluation, and currency exchange controls. To minimize these risks, Registrant has insured certain investments in its affiliate flour mills in Democratic Republic of Congo, Ecuador, Haiti, Lesotho, Mozambique and Zambia, to the extent deemed appropriate against certain of these risks with the Overseas Private Investment Corporation, an agency of the United States Government. Item 2. Properties (1) Pork The Registrant owns a hog processing plant in Oklahoma with a double shift capacity of approximately four and one-half million hogs per year. Hog production facilities currently consist of a combination of owned and leased farrowing, nursery and finishing units supporting 181,000 sows. Registrant currently operates six feed mills which have a combined capacity to produce approximately 1,500,000 tons of feed annually to support the hog production. These facilities are located in Oklahoma, Texas, Kansas and Colorado. (2) Marine Registrant leases a 135,000 square foot warehouse and 70 acres of port terminal land and facilities in Florida which are used in its containerized cargo operations. Registrant owns seven ocean cargo vessels with deadweights ranging from 2,813 to 14,545 metric tons. Registrant timecharters, under short-term agreements, between twelve and eighteen containerized ocean cargo vessels with deadweights ranging from 2,600 to 17,511 metric- tons. Registrant also bareboat charters, under long-term lease agreements, three containerized ocean cargo vessels with deadweights ranging from 12,169 to 12,648 metric tons. Registrant owns or leases approximately 30,000 dry, refrigerated and specialized containers and related equipment. Registrant also leases a 62 acre cargo handling and terminal facility in Houston including a 550,000 square foot warehouse and a 240,000 square foot facility with freezer storage and office space. (3) Commodity Trading and Milling The Registrant owns in whole or in part milling operations in 12 countries with capacity to mill over 6,600 metric tons of wheat and maize per day. In addition, Registrant has feed mill capacity of 100 metric tons per hour to produce formula animal feed. The milling operations located in Angola, Democratic Republic of Congo, Ecuador, Guyana, Haiti, Kenya, Lesotho, Mozambique, Nigeria, Republic of Congo, Sierra Leone and Zambia own their facilities; in Kenya, Lesotho, Mozambique, Nigeria, Republic of Congo and Sierra Leone the land the mills are located on is leased under long-term agreements. The Registrant owns seven 9,000 metric-ton deadweight dry bulk carriers and timecharters, under short-term agreements, between five and ten bulk carrier ocean vessels with dead weights ranging from 8,000 to 60,000 metric tons. (4) Sugar and Citrus Registrant has a controlling interest in an Argentine company which owns approximately 39,000 acres of planted sugarcane and approximately 3,100 acres of planted citrus. In addition, this company owns a sugar mill with a capacity to process approximately 170,000 metric tons of sugar per year. (5) Power Registrant owns two floating power generating facilities, with a combined rated capacity of 112 megawatts, both located in Santo Domingo, Dominican Republic. (6) Other Registrant owns a jalapeno pepper processing plant in Honduras and leases 40,000 square feet of refrigerated space and 70,000 square feet of dry space in the Port of Miami for warehousing produce products. Management believes that the Registrant's present facilities are generally adequate and suitable for its current purposes. In general, facilities are fully utilized; however, seasonal fluctuations in inventories and production may occur as a reaction to market demands for certain products. Certain foreign milling operations may operate at less than full capacity due to low demand related to poor consumer purchasing power. Item 3. Legal Proceedings The Company is subject to legal proceedings related to the normal conduct of its business, including as a defendant in a maritime arbitration claim more fully described in Note 11 of the consolidated financial statements. Sierra Club Claims On June 2, 2000, a Complaint was filed by the Sierra Club against the Company, Seaboard Farms, Inc. and Shawnee Funding, Limited Partnership in the United States District Court for the Western District of Oklahoma, No. CIV -00-979-L, alleging violations of the Clean Water Act ("CWA") at the Company's Dorman Sow Farm in Beaver County, Oklahoma. Sierra Club later amended its complaint to add claims under the Comprehensive Environmental Response Compensation & Liability Act ("CERCLA") and the Resource Conservation and Recovery Act ("RCRA"). The Complaint seeks declaratory and injunctive relief, civil penalties, and attorneys' fees. The Complaint asserts violations of the CWA on account of alleged discharges to waters of the United States, failure to obtain a National Pollutant Discharge Elimination System ("NPDES") permit for a concentrated animal feeding operation ("CAFO"), failure to obtain a NPDES general permit for storm water discharges associated with construction activities, and the filling of wetland areas. The Complaint also asserts violations of CERCLA, on account of an alleged failure to report routine air emissions of ammonia, and RCRA, on account of the alleged "open dumping" of hog waste allegedly leaking from wastewater treatment lagoons and the creation of an imminent and substantial endangerment to human health and the environment as a result of such alleged leaking. Sierra Club seeks the statutory maximum civil penalty of $27,500 per day of violation for each alleged violation of the CWA and CERCLA. Sierra Club has asserted a claim for penalties under RCRA, but RCRA does not authorize civil penalties for the particular violations alleged. In addition, Sierra Club seeks injunctive relief, including a temporary shutdown of the farm until it obtains an NPDES permit or, alternatively, improvements to the farm's wastewater handling system. Sierra Club also requests attorney's fees, which the court could award in its discretion in the event that Sierra Club is successful on the merits. In addition to the lawsuit that has been filed with respect to the Dorman Sow Farm, Sierra Club has alleged violations of reporting requirements under CERCLA and The Emergency Planning and Community Right-to-Know Act at other farms owned by Seaboard Farms and has stated its intent to file suit concerning such alleged violations. The Company believes it has meritorious defenses to all of the claims of the Sierra Club but cannot predict with certainty the outcome of the litigation. EPA Claims Concerning Farms in Major County and Kingfisher County, Oklahoma On June 7, 2001, the United States Environmental Protection Agency, Region 6 ("EPA") issued an Emergency Administrative Order (the "SDWA Order"), pursuant to Section 1431(a) of the Safe Drinking Water Act, 42 U.S.C. Sec. 300i(a) (the "SDWA"), against the Company's subsidiary, Seaboard Farms, Inc. ("Seaboard Farms"), Shawnee Funding, Limited Partnership, and PIC International Group, Inc. ("PIC") (collectively, "Respondents"). The SDWA Order alleges that the Respondents have violated the SDWA, through the operation of five swine farms located in Major County and Kingfisher County, Oklahoma, and the introduction of a contaminant (nitrate) into groundwater, creating an imminent and substantial risk of harm from contamination of domestic wells. The SDWA Order requires Respondents to sample domestic wells within a broad area potentially downgradient of the five farms and to provide alternative domestic water supplies for users of certain wells. In the event the Respondents fail to comply with the SDWA Order, the EPA may commence a civil action and can seek a civil penalty of up to $15,000 per day, per violation. The Company does not believe the swine farms are the source of elevated nitrates in groundwater. Respondents jointly filed petitions in the United States Court of Appeals for the Tenth Circuit, asking the court to set aside, declare invalid, and/or remand the SDWA Order and other actions by EPA on the grounds that EPA's actions are arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law, and have been taken without observance of procedures required by law. Briefing in these cases has been stayed while the parties are in settlement negotiations. Despite Respondents' dispute with EPA concerning the validity of the SDWA Order, the Company is cooperating with EPA and hopes to resolve the matter outside of litigation by agreeing to conduct sampling of water and supplying alternative water supplies to certain residences, and without the payment of any civil penalty. Pursuant to the requirements of the SDWA Order, as subsequently modified by EPA, Respondents have conducted sampling of all known domestic wells within the relevant area and provided alternative water supplies to users of domestic wells at which nitrate levels have tested above EPA's drinking water standard. On June 29, 2001, the EPA filed a Unilateral Administrative Order (the "RCRA Order"), pursuant to Section 7003 of the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sec. 6973 ("RCRA"), against the same Respondents named in the SDWA Order: Seaboard Farms, Shawnee Funding, and PIC. The RCRA Order contains principally the same allegations as the SDWA Order that leaking infrastructure at the same five swine farms is causing or could cause contamination of the groundwater. The RCRA Order alleges that, as a result, Respondents have contributed to an "imminent and substantial endangerment" within the meaning of RCRA from the leaking of solid waste in the lagoons or other infrastructure at the farms. The RCRA Order requires Respondents to develop and undertake a study to determine if there has been any contamination from farm infrastructure and, if contamination has occurred, to develop and undertake a remedial plan. In the event the Respondents fail to comply with the RCRA Order, the EPA may commence a civil action and can seek a civil penalty of up to $5,500 per day, per violation. Although the Company disputes the validity of the RCRA Order on grounds similar to those that support its challenge to the SDWA Order, the Company is cooperating with EPA in the conduct of an investigation to resolve EPA's concerns about potential groundwater contamination. In addition to the farms identified in the SDWA and RCRA Orders, EPA has identified additional farms in Major County and Kingfisher County, Oklahoma, at which EPA believes groundwater contamination may have occurred. EPA has requested informally that the Company investigate whether contamination has occurred, and the Company is considering its response to this request. The farms that are the subject of the SDWA Order and the RCRA Order, as well as the additional farms identified by EPA as potential sources of groundwater contamination, were previously owned by PIC. PIC is presently providing indemnity and defense of this matter, reserving its right to contest the obligation to do so. The Company does not believe there are valid grounds to contest PIC's obligation to provide the indemnity and defense of this matter. One indemnity agreement with PIC is subject to a $5,000,000 limit, but the Company believes that a more general environmental indemnity agreement would require indemnification of liability in excess of that amount. Potential Additional EPA Claims EPA also has been conducting a broad-reaching investigation of Seaboard Farms, seeking information as to compliance with the CWA, CERCLA and the Clean Air Act. Through Information Requests, EPA has sought information concerning whether Seaboard Farms' operations may be discharging pollutants to waters of the United States in violation of the CWA, whether there has been unlawful filling of "wetlands" within the jurisdiction of the CWA, whether Seaboard Farms has properly reported emissions of hazardous substances into the air, and whether some of its farms may be emitting air pollutants at levels subject to Clean Air Act permitting requirements. EPA has advised the Company that it will be seeking additional information and that it will be alleging violations of law. If EPA does allege such violations, it may seek to require the Company or Seaboard Farms to obtain requisite permits in order to engage in operations, in addition to seeking civil penalties or other relief. Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted during the last quarter of the fiscal year covered by this report to a vote of security holders. Executive Officers of Registrant The following table lists the executive officers and certain significant employees of Registrant. Generally, each executive officer is elected at the Annual Meeting of the Board of Directors following the Annual Meeting of Stockholders and holds his office until the next such annual meeting or until his successor is duly chosen and qualified. There are no arrangements or understandings pursuant to which any executive officer was elected. Name (Age) Positions and Offices with Registrant and Affiliates H. Harry Bresky (76) Chairman of the Board, President and Chief Executive Officer of Registrant; President and Treasurer of Seaboard Flour Corporation (SFC) Steven J. Bresky (48) Senior Vice President, International Operations Robert L. Steer (42) Senior Vice President, Treasurer and Chief Financial Officer David M. Becker (40) Vice President, General Counsel and Assistant Secretary James L. Gutsch (48) Vice President, Engineering Rodney K. Brenneman (37) President, Seaboard Farms, Inc. John Lynch (68) President, Seaboard Marine Ltd. Mr. H. Harry Bresky has served as President and Chief Executive Officer of Registrant since February 2001 and previously as President of Registrant since 1967. He has served as President of SFC since 1987, and as Treasurer of SFC since 1973. Mr. Bresky is the father of Steven J. Bresky. Mr. Steven J. Bresky has served as Senior Vice President, International Operations of Registrant since February 2001 and previously as Vice President of Registrant since April 1989. Mr. Steer has served as Senior Vice President, Treasurer and Chief Financial Officer of Registrant since February 2001 and previously as Vice President, Chief Financial Officer of Registrant since April 1998 and as Vice President, Finance of Registrant since April 1996. He has been employed by the Registrant since 1984. Mr. Becker has served as Vice President, General Counsel and Assistant Secretary of Registrant since February 2001 and previously as General Counsel and Assistant Secretary of Registrant since April 1998 and as Assistant Secretary of Registrant since May 1994. Mr. Gutsch has served as Vice President, Engineering of Registrant since December 1998. He has been employed by the Registrant since 1984. Mr. Brenneman has served as President of Seaboard Farms, Inc. since June 2001 and previously served as Senior Vice President and Chief Financial Officer of Seaboard Farms, Inc. since January 1997 and prior to that, Vice President of Finance for Seaboard Farms, Inc. since January 1995. Mr. Brenneman has been employed with the Registrant or Seaboard Farms, Inc. since 1989. Mr. Lynch has served as President of Seaboard Marine, Ltd. Since 1998 and previously as Vice President of Seaboard Marine Ltd. since his employment in 1987. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The information required by Item 5 is hereby incorporated by reference to "Stock Listing" and "Quarterly Financial Data" appearing on pages 52 and 8, respectively, of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 6. Selected Financial Data The information required by Item 6 is hereby incorporated by reference to the "Summary of Selected Financial Data" appearing on page 7 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 of this Report. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information required by Item 7 is hereby incorporated by reference to "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing on pages 9 through 22 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by Item 7A is hereby incorporated by reference to the material under the captions "Derivative Instruments and Hedging Activities" within Note 1 of the Registrant's Consolidated Financial Statements appearing on page 32, and to the material under the caption "Derivative Information" within "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing on pages 20 through 22 of the Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 8. Financial Statements and Supplementary Data The information required by Item 8 is hereby incorporated by reference to Registrant's "Quarterly Financial Data," "Independent Auditors' Report," "Consolidated Statements of Earnings," "Consolidated Balance Sheets," "Consolidated Statements of Stockholders' Equity," "Consolidated Statements of Cash Flows" and "Notes to Consolidated Financial Statements" appearing on pages 8 and 23 through 51 of Registrant's Annual Report to Stockholders furnished to the Commission pursuant to Rule 14a-3(b) and attached as Exhibit 13 to this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. PART III Item 10. Directors and Executive Officers of Registrant Refer to "Executive Officers of Registrant" in Part I. Information required by this item relating to directors of Registrant has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 2001, the close of its fiscal year. The information required by this item relating to directors is incorporated by reference to "Item 1" appearing on pages 3 and 4 of the 2002 Proxy statement. The information required by this item relating to late filings of reports required under Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to "Section 16(a) Beneficial Ownership Reporting Compliance" on page 12 of the Registrant's 2002 Proxy Statement. Item 11. Executive Compensation This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 2001, the close of its fiscal year. The information required by this item is incorporated by reference to "Executive Compensation and Other Information," "Retirement Plans" and "Compensation Committee Interlocks and Insider Participation" appearing on pages 6 through 9 and 11 of the 2002 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 2001, the close of its fiscal year. The information required by this item is incorporated by reference to "Principal Stockholders" appearing on page 2 and "Election of Directors" on pages 3 and 4 of the 2002 Proxy Statement. Item 13. Certain Relationships and Related Transactions This item has been omitted since Registrant filed a definitive proxy statement within 120 days after December 31, 2001, the close of its fiscal year. The information required by this item is incorporated by reference to "Compensation Committee Interlocks and Insider Participation" appearing on page 11 of the 2002 Proxy Statement. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) The following documents are filed as part of this report: 1. Consolidated financial statements. See Index to Consolidated Financial Statements on page F-1. 2. Consolidated financial statement schedules. See Index to Consolidated Financial Statements on page F-1. 3. Exhibits. 2.1 - Subscription Agreement by and between Seaboard Corporation, Fjord Seafood ASA, ContiSea, LCC, DRFF Corp., ContiGroup Companies, Inc. and Sabroso AS, dated March 16, 2001. Incorporated by reference to Exhibit 2.1 of Registrant's Form 10-Q for the quarter ended June 30, 2001. 3.1 - Registrant's Certificate of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992. 3.2 - Registrant's By-laws, as amended. 4.1 - Note Purchase Agreement dated December 1, 1993 between the Registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the Commission. Incorporated by reference to Exhibit 4.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993. 4.2 - Seaboard Corporation 6.49% Senior Note Due December 1, 2005 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.2 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993. 4.3 - Note Purchase Agreement dated June 1, 1995 between the registrant and various purchasers as listed in the exhibit. The Annexes and Exhibits to the Note Purchase Agreement have been omitted from the filing, but will be provided supplementally upon request of the Commission. Incorporated by reference to Exhibit 4.3 of Registrant's Form 10-Q for the quarter ended September 9, 1995. 4.4 - Seaboard Corporation 7.88% Senior Note Due June 1, 2007 issued pursuant to the Note Purchase Agreement described above. Incorporated by reference to Exhibit 4.4 of Registrant's Form 10-Q for the quarter ended September 9, 1995. 4.5 - Seaboard Corporation Note Agreement dated as of December 1, 1993 ($100,000,000 Senior Notes due December 1, 2005). First Amendment to Note Agreement. Incorporated by reference to Exhibit 4.7 of Registrant's Form 10-Q for the quarter ended March 23, 1996. 4.6 - Seaboard Corporation Note Agreement dated as of June 1, 1995 ($125,000,000 Senior Notes due June 1, 2007). First Amendment to Note Agreement. Incorporated by reference to Exhibit 4.8 of Registrant's Form 10-Q for the quarter ended March 23, 1996. * 10.1 - Registrant's Executive Retirement Plan dated January 1, 1997. The addenda have been omitted from the filing, but will be provided supplementary upon request of the Commission. Incorporated by reference to Exhibit 10.1 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997. * 10.2 - Registrant's Supplemental Executive Benefit Plan as Amended and Restated. Incorporated by reference to Exhibit 10.2 of Registrants Form 10-K for fiscal year ended December 31, 2000. * 10.3 - Registrant's Supplemental Executive Retirement Plan for H. Harry Bresky dated March 21, 1995. Incorporated by reference to Exhibit 10.3 of Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. * 10.4 - Registrant's Executive Deferred Compensation Plan dated January 1, 1999. Incorporated by reference to Exhibit 10.1 of Registrant's Form 10-Q for the quarter ended March 31, 1999. * 10.5 - First Amendment to Registrant's Executive Retirement Plan as Amended and Restated January 1, 1997, dated February 28, 2001, amending Registrant's Executive Retirement Plan dated January 1, 1997 referenced as Exhibit 10.1. Incorporated by reference to Exhibit 10.6 of Registrant's Form 10-K for fiscal year ended December 31, 2000. * 10.6 - Registrant's Investment Option Plan dated December 18, 2000. Incorporated by reference to Exhibit 10.7 of Registrant's Form 10-K for fiscal year ended December 31, 2000. 10.7 - Registrant's Promissory Note dated January 25, 2002 from Seaboard Flour Corporation. 10.8 - Registrant's Stock Pledge Agreement dated January 25, 2002 from Seaboard Flour Corporation. 10.9 - Registrant's Promissory Note dated February 13, 2002 from Seaboard Flour Corporation. 10.10 - Registrant's Lease Agreement dated August 11, 1994 with Shawnee Funding, Limited Partnership as amended by Amendment No. 1 dated August 9, 1995, by Amendment No. 2 dated December 19, 1995, and by Amendment No. 3 dated November 26, 1997. 13 - Sections of Annual Report to security holders incorporated by reference herein. 21 - List of subsidiaries. * Management contract or compensatory plan or arrangement. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the last quarter of the fiscal year covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SEABOARD CORPORATION By /s/H. Harry Bresky By /s/Robert L. Steer H. Harry Bresky, President and Chief Robert L. Steer, Senior Vice Executive Officer (principal executive President, Treasurer and Chief officer) Financial Officer (principal financial officer) Date: March 12, 2002 Date: March 12, 2002 By /s/John A. Virgo John A. Virgo, Corporate Controller (principal accounting officer) Date: March 12, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated. By /s/H. Harry Bresky By /s/J.E. Rodrigues H. Harry Bresky, Director and Chairman J.E. Rodrigues, Director of the Board Date: March 12, 2002 Date: March 12, 2002 By /s/David A. Adamsen By /s/Thomas J. Shields David A. Adamsen, Director Thomas J. Shields, Director Date: March 12, 2002 Date: March 12, 2002 By /s/Douglas W. Baena Douglas W. Baena, Director Date: March 12, 2002 SEABOARD CORPORATION AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedule Financial Statements Stockholders' Annual Report Page Independent Auditors' Report 23 Consolidated Balance Sheets as of December 31, 2001 and December 31, 2000 24 Consolidated Statements of Earnings for the years ended December 31, 2001, December 31, 2000 and December 31, 1999 26 Consolidated Statements of Changes in Equity for the years ended December 31, 2001, December 31, 2000 and December 31, 1999 27 Consolidated Statements of Cash Flows for the years ended December 31, 2001, December 31, 2000 and December 31, 1999 28 Notes to Consolidated Financial Statements 29 The foregoing are incorporated by reference. The individual financial statements of the nonconsolidated foreign affiliates which would be required if each such foreign affiliate were a Registrant are omitted, because (a) the Registrant's and its other subsidiaries' investments in and advances to such foreign affiliates do not exceed 20% of the total assets as shown by the most recent consolidated balance sheet; (b) the Registrant's and its other subsidiaries' proportionate share of the total assets (after intercompany eliminations) of such foreign affiliates do not exceed 20% of the total assets as shown by the most recent consolidated balance sheet; and (c) the Registrant's and its other subsidiaries' equity in the earnings before income taxes and extraordinary items of the foreign affiliates does not exceed 20% of such income of the Registrant and consolidated subsidiaries compared to the average income for the last five fiscal years. Combined condensed financial information as to assets, liabilities and results of operations have been presented for nonconsolidated foreign affiliates in Note 5 of "Notes to the Consolidated Financial Statements." II - Valuation and Qualifying Accounts for the years ended December 31, 2001, 2000 and 1999 F-3 All other schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related consolidated notes. INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Seaboard Corporation: Under date of March 4, 2002, we reported on the consolidated balance sheets of Seaboard Corporation and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of earnings, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2001, as contained in the December 31, 2001 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended December 31, 2001. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Kansas City, Missouri March 4, 2002

Schedule II SEABOARD CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts (In Thousands) Balance at Provision Write-offs net Acquisitions Balance at beginning of year (1) of recoveries and Disposals end of year Year ended December 31, 2001: Allowance for doubtful accounts $ 29,801 206 (9,436) - $ 20,571 Drydock accrual $ 5,496 5,356 (4,800) - $ 6,052 Year ended December 31, 2000: Allowance for doubtful accounts $ 29,075 12,276 (8,199) (3,351) $ 29,801 Drydock accrual $ 5,444 4,051 (3,999) - $ 5,496 Year ended December 31, 1999: Allowance for doubtful accounts $ 26,117 7,105 (4,147) - $ 29,075 Drydock accrual $ 5,207 3,504 (3,267) - $ 5,444 (1) Allowance for doubtful accounts provisions charged to selling, general and administrative expenses; drydock provisions charged to cost of sales.