UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 27, 2020~~July 3, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________________ to ____________________________________

Commission File Number: 1-3390

Seaboard Corporation

(Exact name of registrant as specified in its charter)


Delaware		04-2260388
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

9000 West 67th Street, Merriam, 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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $1.00 Par Value	SEB	NYSE American

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 ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ⌧	Accelerated Filer ◻
Non-Accelerated Filer ◻	Smaller Reporting Company ☐
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧.

There were 1,160,779 shares of common stock, $1.00 par value per share, outstanding on July ~~21, 2020.~~27, 2021.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,		July 3,		June 27,
(Millions of dollars except share and per share amounts)	2020		2019		2020		2019		2021		2020		2021		2020
Net sales:
Products (affiliate sales of $332, $357, $591 and $677)	$	1,589	$	1,513	$	2,971	$	2,758
Services (affiliate sales of $6, $4, $12 and $8)		206		275		489		544
Products (affiliate sales of $392, $332, $685 and $591)									$	2,089	$	1,589	$	3,820	$	2,971
Services (affiliate sales of $4, $6, $9 and $12)										330		206		643		489
Other		13		34		31		63		11		13		26		31
Total net sales		1,808		1,822		3,491		3,365		2,430		1,808		4,489		3,491
Cost of sales and operating expenses:
Products		1,518		1,422		2,796		2,652		1,894		1,520		3,500		2,798
Services		185		238		441		478		269		185		530		441
Other		14		26		28		49		14		14		28		28
Total cost of sales and operating expenses		1,717		1,686		3,265		3,179		2,177		1,719		4,058		3,267
Gross income		91		136		226		186		253		89		431		224
Selling, general and administrative expenses		80		83		152		167		88		80		174		152
Operating income		11		53		74		19		165		9		257		72
Other income (expense):
Interest expense		(6)		(12)		(11)		(18)		(6)		(6)		4		(11)
Interest income		4		8		11		15		6		4		11		11
Loss from affiliates		(17)		(16)		(21)		(34)
Income (loss) from affiliates										(5)		(17)		1		(21)
Other investment income (loss), net		128		37		(97)		150		46		128		117		(97)
Foreign currency gains (losses), net		(5)		(1)		(16)		2		(7)		(5)		2		(16)
Miscellaneous, net		1		—		2		—		1		1		7		2
Total other income (expense), net		105		16		(132)		115		35		105		142		(132)
Earnings (loss) before income taxes		116		69		(58)		134		200		114		399		(60)
Income tax expense		(142)		(11)		(71)		(19)		(24)		(141)		(44)		(70)
Net earnings (loss)	$	(26)	$	58	$	(129)	$	115	$	176	$	(27)	$	355	$	(130)
Less: Net loss attributable to noncontrolling interests		—		—		—		—		0		0		0		0
Net earnings (loss) attributable to Seaboard	$	(26)	$	58	$	(129)	$	115	$	176	$	(27)	$	355	$	(130)

Earnings (loss) per common share	$	(22.35)	$	50.13	$	(110.88)	$	98.92	$	151.56	$	(23.51)	$	305.59	$	(112.33)
Average number of shares outstanding		1,160,779		1,165,740		1,162,307		1,166,575		1,160,779		1,160,779		1,160,779		1,162,307

Other comprehensive income (loss), net of income tax expense of $1, $0, $1 and $0:
Other comprehensive income (loss), net of income tax expense of $1, $1, $1 and $1:
Foreign currency translation adjustment		(19)		(9)		(16)		(11)		(15)		(19)		—		(16)
Unrecognized pension cost		—		3		2		6		4		—		5		2
Other comprehensive loss, net of tax	$	(19)	$	(6)	$	(14)	$	(5)
Other comprehensive income (loss), net of tax									$	(11)	$	(19)	$	5	$	(14)
Comprehensive income (loss)		(45)		52		(143)		110		165		(46)		360		(144)
Less: Comprehensive loss attributable to noncontrolling interests		—		—		—		—		0		0		0		0
Comprehensive income (loss) attributable to Seaboard	$	(45)	$	52	$	(143)	$	110	$	165	$	(46)	$	360	$	(144)

See accompanying notes to condensed consolidated financial statements.

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)


	June 27,		December 31,		July 3,		December 31,
(Millions of dollars except share and per share amounts)	2020		2019		2021		2020
Assets
Current assets:
Cash and cash equivalents	$	79	$	125	$	92	$	76
Short-term investments		1,178		1,434		1,483		1,465
Receivables, net		551		646
Receivables, net of allowance for credit losses of $30 and $28						642		532
Inventories		989		1,022		1,497		1,178
Other current assets		117		123		164		103
Total current assets		2,914		3,350		3,878		3,354
Property, plant and equipment, net		1,479		1,431		1,744		1,582
Operating lease right of use assets, net		429		446		416		390
Investments in and advances to affiliates		706		735		666		698
Goodwill		163		164		164		167
Other non-current assets		182		159		202		208
Total assets	$	5,873	$	6,285	$	7,070	$	6,399
Liabilities and Stockholders’ Equity
Current liabilities:
Lines of credit	$	220	$	246	$	474	$	222
Current maturities of long-term debt		82		62		9		55
Accounts payable		189		368		390		276
Deferred revenue		44		80		95		89
Operating lease liabilities		113		104		137		111
Other current liabilities		374		329		308		323
Total current liabilities		1,022		1,189		1,413		1,076
Long-term debt, less current maturities		687		730		711		707
Deferred income taxes		29		76		85		103
Long-term income tax liability		62		62
Long-term operating lease liabilities		354		379		315		318
Other liabilities		329		295		363		367
Total non-current liabilities		1,461		1,542		1,474		1,495
Commitments and contingent liabilities
Stockholders’ equity:
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,160,779 shares in 2020 and 1,164,848 shares in 2019		1		1
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,160,779 shares in 2021 and 2020						1		1
Accumulated other comprehensive loss		(454)		(440)		(466)		(471)
Retained earnings		3,833		3,983		4,637		4,287
Total Seaboard stockholders’ equity		3,380		3,544		4,172		3,817
Noncontrolling interests		10		10		11		11
Total equity		3,390		3,554		4,183		3,828
Total liabilities and stockholders’ equity	$	5,873	$	6,285	$	7,070	$	6,399

See accompanying notes to condensed consolidated financial statements.

~~SEABOARD CORPORATION AND SUBSIDIARIES~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

Six Months Ended

June 27,

June 29,

(Millions of dollars)
2020

2019

Cash flows from operating activities:

Net earnings (loss)
$
(129)

$
115

Adjustments to reconcile net earnings (loss) to cash from operating activities:

Depreciation and amortization

72

68

Deferred income taxes

(47)

8

Loss from affiliates

21

34

Dividends received from affiliates

7

2

Other investment loss (income), net

97

(150)

Other, net

22

6

Changes in assets and liabilities:

Receivables, net of allowance

86

(3)

Inventories

22

(54)

Other assets

5

32

Other liabilities, exclusive of debt

(156)

(19)

Net cash from operating activities

—

39

Cash flows from investing activities:

Purchase of short-term investments

(311)

(733)

Proceeds from the sale of short-term investments

464

617

Proceeds from the maturity of short-term investments

20

164

Capital expenditures

(108)

(156)

Investments in and advances to affiliates, net

(5)

(11)

Purchase of long-term investments

(38)

(9)

Other, net

1

2

Net cash from investing activities

23

(126)

Cash flows from financing activities:

Lines of credit, net

(22)

13

Proceeds from long-term debt

7

31

Principal payments of long-term debt

(31)

(20)

Repurchase of common stock

(13)

(14)

Dividends paid

(5)

(5)

Other, net

(4)

(2)

Net cash from financing activities

(68)

3

Effect of exchange rate changes on cash and cash equivalents

(1)

—

Net change in cash and cash equivalents

(46)

(84)

Cash and cash equivalents at beginning of year

125

194

Cash and cash equivalents at end of period
$
79

$
110

~~See accompanying notes to condensed consolidated financial statements.~~

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


			Accumulated										Accumulated
			Other										Other
	Common		Comprehensive		Retained		Noncontrolling				Common		Comprehensive		Retained		Noncontrolling
(Millions of dollars)	Stock		Loss		Earnings		Interests		Total		Stock		Loss		Earnings		Interests		Total
Balances, December 31, 2018	$	1	$	(410)	$	3,727	$	11	$	3,329
Reduction to noncontrolling interests		—		—		—		(1)		(1)
Comprehensive income:
Net earnings		—		—		57		—		57
Other comprehensive income, net of tax		—		1		—		—		1
Repurchase of common stock		—		—		(13)		—		(13)
Dividends on common stock ($2.25/share)		—		—		(3)		—		(3)
Balances, March 30, 2019	$	1	$	(409)	$	3,768	$	10	$	3,370
Comprehensive income:
Net earnings		—		—		58		—		58
Other comprehensive loss, net of tax		—		(6)		—		—		(6)
Repurchase of common stock		—		—		(1)		—		(1)
Dividends on common stock ($2.25/share)		—		—		(2)		—		(2)
Balances, June 29, 2019	$	1	$	(415)	$	3,823	$	10	$	3,419

Balances, December 31, 2019	$	1	$	(440)	$	3,983	$	10	$	3,554	$	1	$	(440)	$	4,030	$	10	$	3,601
Adoption of accounting guidance (see Note 1)		—		—		(3)		—		(3)		—		—		(3)		—		(3)
Comprehensive loss:
Comprehensive income (loss):
Net loss		—		—		(103)		—		(103)		—		—		(103)		—		(103)
Other comprehensive income, net of tax		—		5		—		—		5		—		5		—		—		5
Repurchase of common stock		—		—		(13)		—		(13)		—		—		(13)		—		(13)
Dividends on common stock ($2.25/share)		—		—		(3)		—		(3)		—		—		(3)		—		(3)
Balances, March 28, 2020	$	1	$	(435)	$	3,861	$	10	$	3,437	$	1	$	(435)	$	3,908	$	10	$	3,484
Comprehensive loss:
Net loss		—		—		(26)		—		(26)		—		—		(27)		—		(27)
Other comprehensive loss, net of tax		—		(19)		—		—		(19)		—		(19)		—		—		(19)
Dividends on common stock ($2.25/share)		—		—		(2)		—		(2)		—		—		(2)		—		(2)
Balances, June 27, 2020	$	1	$	(454)	$	3,833	$	10	$	3,390	$	1	$	(454)	$	3,879	$	10	$	3,436

Balances, December 31, 2020											$	1	$	(471)	$	4,287	$	11	$	3,828
Comprehensive income:
Net earnings												—		—		179		—		179
Other comprehensive income, net of tax												—		16		—		—		16
Dividends on common stock ($2.25/share)												—		—		(3)		—		(3)
Balances, April 3, 2021											$	1	$	(455)	$	4,463	$	11	$	4,020
Comprehensive income (loss):
Net earnings												—		—		176		—		176
Other comprehensive loss, net of tax												—		(11)		—		—		(11)
Dividends on common stock ($2.25/share)												—		—		(2)		—		(2)
Balances, July 3, 2021											$	1	$	(466)	$	4,637	$	11	$	4,183

See accompanying notes to condensed consolidated financial statements

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended
	July 3,		June 27,
(Millions of dollars)	2021		2020
Cash flows from operating activities:
Net earnings (loss)	$	355	$	(130)
Adjustments to reconcile net earnings (loss) to cash from operating activities:
Depreciation and amortization		87		72
Deferred income taxes		(26)		(46)
Loss (income) from affiliates		(1)		21
Dividends received from affiliates		30		7
Other investment loss (income), net		(117)		97
Other, net		4		22
Changes in assets and liabilities:
Receivables, net of allowance for credit losses		(109)		86
Inventories		(319)		22
Other assets		(51)		5
Accounts payable		86		(177)
Other liabilities, exclusive of debt		(7)		21
Net cash from operating activities		(68)		—
Cash flows from investing activities:
Purchase of short-term investments		(1,482)		(311)
Proceeds from the sale of short-term investments		1,569		464
Proceeds from the maturity of short-term investments		19		20
Capital expenditures		(223)		(108)
Proceeds from the sale of property, plant and equipment		14		2
Principal payments received on notes receivable		11		—
Purchase of long-term investments		(14)		(38)
Other, net		1		(6)
Net cash from investing activities		(105)		23
Cash flows from financing activities:
Uncommitted lines of credit, net		152		(22)
Draws under committed lines of credit		402		205
Repayments of committed lines of credit		(302)		(205)
Principal payments of long-term debt		(50)		(31)
Repurchase of common stock		—		(13)
Dividends paid		(5)		(5)
Other, net		(5)		3
Net cash from financing activities		192		(68)
Effect of exchange rate changes on cash and cash equivalents		(3)		(1)
Net change in cash and cash equivalents		16		(46)
Cash and cash equivalents at beginning of year		76		125
Cash and cash equivalents at end of period	$	92	$	79

See accompanying notes to condensed consolidated financial statements.

SEABOARD CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – ~~Accounting Policies and~~ Basis of Presentation and Accounting Policies

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-consolidated affiliates are accounted for by the equity method. The unaudited condensed consolidatedThese financial statements should be read in conjunction with the consolidated financial statements of Seaboard for the year ended December 31, ~~2019~~2020 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. Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

The ~~accompanying~~ unaudited condensed consolidated financial statements include all adjustments, ~~(consisting~~consisting only of normal recurring ~~adjustments)~~adjustments that, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. ~~Except for new guidance adopted prospectively as discussed below,~~ Seaboard has consistently applied all accounting policies as disclosed in ~~the~~its latest annual report on Form 10-K to all periods presented in these condensed consolidated financial statements. ~~Results~~During the fourth quarter of ~~operations for interim periods are not necessarily indicative~~2020, Seaboard elected to change its method of ~~results~~valuing its inventories from the last-in, first-out (“LIFO”) method to ~~be expected for~~the first-in, first-out (“FIFO”) method. The effects of the change in accounting principle from LIFO to FIFO were retrospectively applied and, as a full year. As Seaboard conducts its commodity trading business with third parties, consolidated subsidiaries and non-consolidated affiliates on an interrelated basis, gross margin on non-consolidated affiliates cannot be clearly distinguished without making numerous assumptions primarily with respect to marked-to-market accounting for commodity derivatives.

~~Use of Estimates~~

~~The preparation of~~result, certain financial statement line items in the condensed consolidated ~~financial~~ statements of comprehensive income, changes in ~~conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires management~~equity and cash flows for the six months ended June 27, 2020 were adjusted as necessary. For further information, refer to ~~make estimates and assumptions that affect~~ the ~~reported amounts of assets and liabilities,~~annual report on Form 10-K for the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to allowance for credit losses on receivables, valuation of inventories, impairment of long-lived assets, intangibles and goodwill, potential write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes, lease liabilities and right of use (“ROU”) assets and accrued pension liability. Actual results could differ from those estimates.year ended December 31, 2020.

Supplemental Cash Flow Information

Non-cash investing activities for the six months ended July 3, 2021, included purchases of property, plant and equipment in accounts payable of $28 million. The following table includes supplemental cash and non-cash information related to leases. Seaboard reports the amortization of ~~ROU~~right of use (“ROU”) assets and changes in operating lease liabilities in other liabilities, exclusive of debt in the condensed consolidated statements of cash flows.

Three months ended

Six months ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$
36

$
35

$
71

$
67

Operating cash flows from finance leases

1

1

2

1

Financing cash flows from finance leases

2

—

3

—

Operating ROU assets obtained in exchange for new operating lease liabilities

$
5

$
12

$
43

$
42

Finance ROU assets obtained in exchange for new finance lease liabilities

19

16

27

17

~~Leases~~

Seaboard’s operating lease assets and liabilities are reported separately in the condensed consolidated balance sheets. The classification of Seaboard’s finance leases in the condensed consolidated balance sheets was as follows:



							Six months ended
		June 27,		December 31,			July 3,		June 27,
(Millions of dollars)		2020		2019			2021		2020
Finance lease ROU assets, net	Property, plant and equipment, net	$	74	$	50
Finance lease liabilities	Other current liabilities		7		5
Non-current finance lease liabilities	Other liabilities		62		40
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases							$	75	$	71
Operating cash flows from finance leases								2		2
Financing cash flows from finance leases								5		3

Operating ROU assets obtained in exchange for new operating lease liabilities						��	$	84	$	43
Finance ROU assets obtained in exchange for new finance lease liabilities								6		27

Goodwill and Other Intangible Assets

The ~~decrease~~change in the carrying amount of goodwill of $3 million as of July 3, 2021 compared to December 31, 2020 was due to ~~a $(1) million acquisition related adjustment in~~foreign currency exchange differences and other adjustments within the Commodity Trading and Milling (“CT&M”) segment. ~~See Note 10 for further information on this acquisition-related adjustment.~~ As of ~~June 27, 2020,~~July 3, 2021, other intangible assets, included in other non-current assets, were ~~$55~~$50 million, net of accumulated amortization of ~~$12~~$27 million. ~~Amortization expense was $2 million~~

Income Taxes

Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and ~~$4 million and foreign currency exchange adjustments were $0 million and ($1) million~~adjusts the provision for discrete tax items recorded in the ~~three and six month periods ended June 27, 2020, respectively.~~period.

Accounting Standard Recently Adopted ~~During 2020~~

On January 1, 2020, Seaboard adopted guidance which requires the use of a new current expected credit loss model in order to determine the allowance for credit losses with respect to ~~accounts receivable and notes receivable,~~receivables, among other financial instruments. This model estimates the lifetime of expected credit loss ~~based on historical experience, current conditions and reasonable supportable forecasts~~ and replaces the existing incurred loss model. As a result of this adoption, Seaboard recorded a cumulative-effect adjustment of $3 million on January 1, 2020 that decreased retained earnings and increased the allowance for credit losses. The allowance for credit loss was $30 million and $28 million at June 27, 2020 and December 31, 2019, respectively. The activity within the allowance for credit losses on receivables was immaterial for the three and six months ended June 27, 2020.

Seaboard used the loss-rate method in developing its allowance for credit losses, which involved identifying pools of assets with similar risk characteristics, reviewing historical losses within the last five years and consideration for any reasonable supportable forecasts of economic indicators. Seaboard endeavors to minimize credit risk due to credit granting policies, relationships established with its customers and relatively short billing and collection cycles. Management monitors the credit quality of its different receivable types by frequent customer discussions, following economic and industry trends and specific customer data. Changes in estimates, developing trends and other new information can have a material effect on future evaluations.6

~~Recently Issued Accounting Standard Not Yet Adopted~~

In December 2019, the Financial Accounting Standards Board issued guidance which simplifies the accounting for income taxes by removing certain exceptions to the general principles and improves consistent application of GAAP for other areas by clarifying and amending existing guidance. This guidance is effective for Seaboard on January 1, 2021. Seaboard is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its financial statements and disclosures.

Note 2 – Investments

The following is a summary of the estimated fair value of short-term investments classified as trading securities:



	June 27,		December 31,		July 3,		December 31,
(Millions of dollars)	2020		2019		2021		2020
Domestic debt securities					$	685	$	496
Domestic equity securities	$	546	$	706		456		702
Domestic debt securities		389		409
Foreign equity securities		100		189		193		133
Foreign debt securities		54		43		117		68
High yield securities		46		56
Money market funds held in trading accounts		24		12		15		47
Collateralized loan obligations		14		15
Other trading securities		5		4		17		19
Total trading short-term investments	$	1,178	$	1,434	$	1,483	$	1,465

The change in unrealized gains (losses) related to trading securities still held at the end of the respective reporting period was $9 million and $17 million for the three and six months ended July 3, 2021, respectively, and $113 million and $(97) million for the three and six months ended June 27, 2020, ~~respectively, and $38 million and $126 million for the three and six months ended June 29, 2019,~~ respectively.

Seaboard had no ~~equity securities~~$45 million and $29 million of short-term investments denominated in foreign currencies, as of June 27, 2020. As of December 31, 2019, Seaboard had $62 million of equity securities denominated in foreign currencies, with $32 million in euros, $12 million in Japanese yen, $8 million in British pounds and the remaining $10 million in various other currencies. Seaboard had $15 million and $13 million of debt securities denominated inprimarily euros, as of ~~June 27, 2020~~July 3, 2021 and December 31, ~~2019,~~2020, respectively.

Note 3 – Inventories

The following is a summary of inventories:



	June 27,		December 31,		July 3,		December 31,
(Millions of dollars)	2020		2019		2021		2020
At lower of last-in, first-out ("LIFO") cost or market:
At lower of FIFO cost and net realizable value (NRV):
Hogs and materials	$	402	$	387	$	467	$	437
Fresh pork and materials		37		46
LIFO adjustment		(61)		(64)
Total inventories at lower of LIFO cost or market		378		369
At lower of first-in, first-out ("FIFO") cost and net realizable value ("NRV"):
Pork products and materials						46		46
Grains, oilseeds and other commodities		325		353		576		380
Biodiesel						122		72
Sugar produced and in process		36		17		37		24
Other		102		109		43		61
Total inventories at lower of FIFO cost and NRV		463		479		1,291		1,020
Grain, flour and feed at lower of weighted average cost and NRV		148		174		206		158
Total inventories	$	989	$	1,022	$	1,497	$	1,178

Note 4 – Lines of Credit, Long-Term Debt, Commitments and Contingencies

Lines of Credit

The outstanding balances under uncommitted lines of credit were $374 million and $222 million as of July 3, 2021 and December 31, 2020, respectively. Of the outstanding balance at July 3, 2021, $236 million was denominated in foreign currencies with $203 million denominated in the South African rand, $24 million denominated in the Canadian dollar and the remaining in various other currencies. The weighted average interest rate for outstanding lines of credit was 2.81% and 3.89% as of July 3, 2021 and December 31, 2020, respectively.

During the second quarter of 2021, Seaboard amended a committed line of credit agreement to increase the borrowing capacity from $100 million to $250 million. This credit agreement is secured by certain short-term investments and matures on September 30, 2022. A $250 million committed line of credit matured in May 2021. There was $100 million outstanding under committed lines of credit as of July 3, 2021 and no balance outstanding as of December 31, 2020.

~~Note 4 –~~Long-term Debt ~~and Commitments and Contingencies~~

The outstanding balances under uncommitted and committed lines of credit were $220 million and $0 million, respectively, as of June 27, 2020. Of the outstanding balance, $126 million was denominated in foreign currencies with $93 million denominated in the South African rand, $23 million denominated in the Canadian dollar, $8 million denominated in the Argentine peso and $2 million denominated in the euro. The outstanding balances under uncommitted and committed lines of credit were $246 million and $0 million, respectively, as of December 31, 2019. The weighted average interest rates for outstanding lines of credit were 4.32% and 5.79% as of June 27, 2020 and December 31, 2019, respectively.

During the second quarter of 2020, Seaboard entered into 2 committed revolving credit agreements, which provide for an unsecured $250 million line of credit with a $100 million accordion option maturing May 20, 2021, and a $75 million line of credit secured by certain short-term investments maturing September 25, 2020. Draws bear interest based on LIBOR plus a spread. Seaboard incurs unused commitment fees of 0.20% to 0.75% per annum.

~~Long-term debt includes borrowings under term loans and other contractual obligations for payment, including notes payable.~~ The following is a summary of long-term debt:



		June 27,		December 31,		July 3,		December 31,
(Millions of dollars)		2020		2019		2021		2020
Term Loan due 2028	$	690	$	691	$	681	$	684
Foreign subsidiary obligations		80		102		1		49
Total long-term debt at face value		770		793
Current maturities of long-term debt and unamortized discount and costs		(83)		(63)
Other long-term debt						39		30
Total debt at face value						721		763
Current maturities and unamortized discount and costs						(10)		(56)
Long-term debt, less current maturities and unamortized discount and costs	$	687	$	730	$	711	$	707

The interest rate on the Term Loan due 2028 was ~~1.80%~~1.73% and ~~3.42%~~1.77% as of ~~June 27, 2020~~July 3, 2021 and December 31, ~~2019,~~2020, respectively. The weighted average interest rate on Seaboard’s foreign subsidiary obligations was ~~3.28%~~7.34% and ~~3.50%~~3.51% as of ~~June 27, 2020~~July 3, 2021 and December 31, ~~2019,~~2020, respectively. Foreign subsidiary obligations as of December 31, 2020, included a $46 million euro-denominated note payable related to a 2018 acquisition that was repaid in January 2021.

In conjunction with the purchase of certain equipment during the second quarter of 2021, $9 million of secured, long-term debt was assumed. The loan agreement incurs a fixed interest rate of 5.60% and matures in August 2037.

Seaboard was in compliance with all restrictive debt covenants relating to these agreements as of ~~June 27, 2020.~~July 3, 2021.

Legal Proceedings

On June 28, 2018, ~~Wanda Duryea and 11 other indirect purchasers of pork products, acting on behalf of themselves and a putative class of~~12 indirect purchasers of pork products filed a class action complaint in the U.S. District Court for the District of Minnesota (the “District Court”) against several pork processors, including Seaboard Foods LLC and Agri Stats, Inc., a company described in the complaint as a data sharing service. ~~Subsequent to the filing of this initial~~The complaint ~~additional~~also named Seaboard Corporation as a defendant. Additional class action complaints making similar claims on behalf of putative classes of direct and indirect purchasers were later filed in the District ~~Court. The complaints~~Court, and 3 additional actions by standalone plaintiffs (including the Commonwealth of Puerto Rico) were amended and consolidated for pre-trial purposes, into 3 consolidated putative class actions brought on behalf of (a) direct purchasers, (b) consumer indirect purchasers and (c) commercial and institutional indirect purchasers. The amended complaints named Seaboard Corporation as an additional defendant.filed in or transferred to the District Court. The consolidated actions are styled In re Pork Antitrust Litigation. ~~Subsequent to the original filings, two additional actions making similar claims, including one by the Commonwealth of Puerto Rico, were brought in or transferred to the District Court.~~ The operative complaints ~~alleged,~~allege, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork products in violation of U.S. antitrust laws by coordinating their output and limiting production, allegedly facilitated by the exchange of non-public information about prices, capacity, sales volume and demand through Agri Stats, Inc. The complaints on behalf of the putative classes of indirect purchasers also ~~included causes of action~~assert claims under various state laws, including state antitrust laws, unfair competition laws, consumer protection statutes, and ~~state~~ common law ~~claims for~~ unjust enrichment. ~~The complaints also alleged that the defendants concealed this conduct from the plaintiffs and the members of the putative classes.~~ The relief sought in the respective complaints includes treble damages, injunctive relief, pre- and post-judgment interest, costs and attorneys’ ~~fees on behalf of the putative classes.~~fees. On ~~August 8, 2019,~~October 16, 2020, the District Court ~~granted~~denied defendants’ motion to dismiss the class action cases while giving the plaintiffs leave to amend. The classes and the other two plaintiffs filed amended complaints in November and December 2019. In addition to amending the original claims, the consumer indirect purchasers have asserted a new claim alleging that the exchange of information by defendants through Agri Stats Inc. unreasonably restrained trade. On January 15, 2020, the defendants, including Seaboard, movedmotions to dismiss the amended ~~complaints.~~ complaints, but the District Court later dismissed all claims against Seaboard Corporation without prejudice.

In 2021, several additional standalone plaintiffs filed similar actions in District Courts throughout the country. These actions have been conditionally transferred to Minnesota for pretrial proceedings pursuant to an order by the Judicial Panel on Multidistrict Litigation.

Seaboard intends to defend all of these cases vigorously. It is impossible at this stage either to determine the probability of a favorable or unfavorable outcome resulting from these suits, or to reasonably estimate the amount of potential loss or range of potential loss, if any, resulting from the suits.

On March 20, 2018, the bankruptcy trustee (the “Trustee”) for Cereoil Uruguay S.A. (“Cereoil”) filed a suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard and Seaboard’s subsidiaries, Seaboard Overseas Limited (“SOL”) and Seaboard Uruguay Holdings Ltd. (“Seaboard Uruguay”). Seaboard has a 45% indirect ownership of Cereoil. The suit seeks an order requiring Seaboard, SOL and Seaboard Uruguay to reimburse Cereoil the amount of $22 million, contending that deliveries of soybeans to SOL pursuant to purchase agreements should be set aside as fraudulent conveyances. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and its two subsidiaries could be ordered to pay the amount of $22 million. Any award in this case would offset against any award in the additional case described below filed by the Trustee on April 27, 2018.

On April 27, 2018, the Trustee for Cereoil filed another suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard, SOL, Seaboard Uruguay, all directors of Cereoil, including two individuals employed by Seaboard who served as directors at the behest of Seaboard, and the Chief Financial Officer of Cereoil, an employee of Seaboard who also served at the behest of Seaboard (collectively, the “Cereoil Defendants”). The Trustee contends that the Cereoil Defendants acted with willful misconduct to cause Cereoil’s insolvency, and thus should be ordered to pay all liabilities of Cereoil, net of assets. The bankruptcy filing lists total liabilities of $53 million and assets of $30 million. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and the other Cereoil Defendants could be ordered to pay the amount of the net indebtedness of Cereoil, which based on the bankruptcy schedules would total $23 million. It is possible that the net indebtedness could be higher than this amount if Cereoil’s liabilities are greater than $53 million and/or Cereoil’s assets are worth less than $30 million.

In addition, in the event of an adverse ruling, the Bankruptcy Court of First Instance could order payment of the Trustee’s professional fees, interest, and other expenses. Any award in this case would offset against any award in the case described above filed on March 20, 2018.

A creditor of Cereoil which has a claim in the bankruptcy proceeding pending in Uruguay ~~of approximately $10 million, plus accrued interest,~~ has threatened to bring legal action in the U.S. against Seaboard alleging on various legal theories that Seaboard is responsible for ~~this same indebtedness.~~indebtedness of approximately $10 million, plus accrued interest. Seaboard will vigorously defend this action should it be brought.

On May 15, 2018, the Trustee for Nolston S.A. (“Nolston”) filed a suit in the Bankruptcy Court of First Instance in Uruguay that was served during the second quarter of 2018 naming as parties Seaboard and the other Cereoil Defendants. Seaboard has a 45% indirect ownership of Nolston. The Trustee contends that the Cereoil Defendants acted with willful misconduct to cause Nolston’s insolvency, and thus should be ordered to pay all liabilities of Nolston, net of assets. The bankruptcy filing lists total liabilities of $29 million and assets of $15 million. Seaboard intends to defend this case vigorously. It is impossible at this stage to determine the probability of a favorable or unfavorable outcome resulting from this suit. In the event of an adverse ruling, Seaboard and the other Cereoil Defendants could be ordered to pay the amount of the net indebtedness of Nolston, which based on the bankruptcy schedules would total $14 million. It is possible that the net indebtedness could be higher than this amount if Nolston’s liabilities are greater than $29 million and/or Nolston’s assets are worth less than $15 million. In addition, in the event of an adverse ruling, the Bankruptcy Court of First Instance could order payment of the Trustee’s professional fees, interest, and other expenses.

Seaboard is subject to various administrative and judicial proceedings and other legal matters related to the normal conduct of its business. In the opinion of management, the ultimate resolution of these items is not expected to have a material adverse effect on the condensed consolidated financial statements of Seaboard.

Guarantees

Certain of ~~the~~Seaboard’s 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 in order to further Seaboard’s business objectives. ~~Seaboard does not issue guarantees of third parties for compensation.~~ As of ~~June 27, 2020,~~July 3, 2021, guarantees outstanding to affiliates and third parties were not material. Seaboard has not accrued a liability for any of the affiliate or third-party guarantees as management considers the likelihood of loss to be remote.

Note 5 – Employee Benefits

Seaboard has aqualified defined benefit pension ~~plan~~plans for ~~certain~~its domestic salaried and clerical ~~employees. At this time, 0 contributions are expected to be made to the plan in 2020.~~employees that were hired before January 1, 2014. Effective January 1, 2021, Seaboard transferred assets and liabilities for employees of certain Seaboard subsidiaries into a successor plan. Seaboard also sponsors non-qualified, unfunded supplemental executive plans, and has certain individual, non-qualified, unfunded supplemental retirement agreements for certain retired employees. Management has no plans to provide funding for ~~these supplemental~~any plans in advance of when the benefits are paid.

The net periodic benefit cost for all ~~of these~~ plans was as follows:



	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2020		2019		2020		2019		2021		2020		2021		2020
Components of net periodic benefit cost:
Service cost	$	2	$	2	$	5	$	4	$	2	$	2	$	5	$	5
Interest cost		3		3		6		6		2		3		4		6
Expected return on plan assets		(3)		(3)		(6)		(5)		(3)		(3)		(6)		(6)
Amortization and other		3		3		6		4
Amortization										3		3		5		4
Settlement loss recognized										3		—		3		2
Net periodic benefit cost	$	5	$	5	$	11	$	9	$	7	$	5	$	11	$	11

Note 6 – Derivatives and Fair Value of Financial Instruments

The following tables ~~shows~~show assets and liabilities measured at fair value on a recurring basis as of ~~June 27, 2020~~July 3, 2021 and December 31, ~~2019,~~2020, and also the level within the fair value hierarchy used to measure each category of assets and liabilities. The trading securities classified as other current assets below are assets held for Seaboard’s deferred compensation plans.



	Balance								Balance
	June 27,								July 3,
(Millions of dollars)	2020		Level 1		Level 2		Level 3		2021		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic debt securities									$	685	$	440	$	245	$	—
Domestic equity securities	$	546	$	546	$	—	$	—		456		456		—		—
Domestic debt securities		389		121		268		—
Foreign equity securities		100		100		—		—		193		193		—		—
Foreign debt securities		54		—		54		—		117		—		117		—
High yield securities		46		7		39		—
Money market funds held in trading accounts		24		24		—		—		15		15		—		—
Collateralized loan obligations		14		—		14		—
Other trading securities		5		4		1		—		18		—		18		—
Trading securities – other current assets:
Domestic equity securities		40		40		—		—		15		15		—		—
Money market fund held in trading accounts		6		6		—		—		6		6		—		—
Foreign equity securities		2		2		—		—		4		4		—		—
Fixed income securities		2		2		—		—
Long-term investments		29		—		—		29
Derivatives:
Commodities		9		9		—		—
Total Assets	$	1,266	$	861	$	376	$	29
Liabilities:
Contingent consideration	$	15	$	—	$	—	$	15
Fixed income mutual funds										3		2		1		—
Long-term investment										32		—		—		32
Derivatives:
Commodities		2		2		—		—		17		16		1		—
Interest rate swaps		1		—		1		—		6		—		6		—
Foreign currencies		2		—		2		—		9		—		9		—
Total Assets									$	1,576	$	1,147	$	397	$	32
Liabilities:
Trading securities – short-term investments:
Other trading securities									$	1	$	—	$	1	$	—
Contingent consideration										15		—		—		15
Derivatives:
Commodities										33		33		—		—
Total Liabilities	$	20	$	2	$	3	$	15	$	49	$	33	$	1	$	15



	Balance
	December 31,
(Millions of dollars)	2020		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	702	$	702	$	—	$	—
Domestic debt securities		496		196		300		—
Foreign equity securities		133		133		—		—
Foreign debt securities		68		—		68		—
Money market funds held in trading accounts		47		47		—		—
Other trading securities		20		3		17		—
Trading securities – other current assets:
Domestic equity securities		14		14		—		—
Money market fund held in trading accounts		6		6		—		—
Foreign equity securities		3		3		—		—
Fixed income mutual funds		3		2		1		—
Long-term investment		31		—		—		31
Derivatives:
Commodities		28		28		—		—
Interest rate swaps		1		—		1		—
Total Assets	$	1,552	$	1,134	$	387	$	31
Liabilities:
Trading securities – short-term investments:
Other trading securities	$	1	$	—	$	1	$	—
Contingent consideration		16		—		—		16
Derivatives:
Commodities		19		19		—		—
Foreign currencies		9		—		9		—
Total Liabilities	$	45	$	19	$	10	$	16

Financial instruments consisting of cash and cash equivalents, net receivables, lines of credit and accounts payable are carried at cost, which approximates fair value as a result of the short-term nature of the instruments. The fair value of short-term investments is measured using multiple levels. Domestic debt securities categorized as level 1 in the fair value hierarchy include debt securities held in mutual funds and ETFs. Domestic debt securities categorized as level 2 include corporate bonds, mortgage-backed securities, asset-backed securities, U.S. Treasuries and high-yield securities. Foreign debt securities categorized as level 2 include foreign government or government related securities, corporate bonds, asset-backed securities and high-yield securities with a country of origin concentration outside the U.S. Seaboard’s long-term debt is recorded on the financials at amortized cost. Since most long-term debt is variable-rate, its carrying amount approximates fair value, and would have been classified as level 2.

Seaboard has a long-term investment in a financial services company that primarily lends to and invests in debt securities of privately held companies. This long-term investment is classified in “Other non-current assets” and is valued at net asset value (“NAV”), adjusted for specific liquidity factors, resulting in level 3 classification. The change in value during 2021 is related to equity market activity and is recorded in “Other investment income (loss)”.

The fair value of Seaboard’s contingent consideration related to a 2018 acquisition was classified as a level 3 in the fair value hierarchy since the calculation is dependent upon projected company specific inputs using a Monte Carlo simulation. Seaboard remeasures the estimated fair value of the contingent consideration liability until settled with adjustments included in net earnings (loss). The change in value during 2021 was related to updated foreign currency rates, interest rates and estimated earnings before interest taxes depreciation and amortization projections at the measurement date, and is recorded in “Interest expense”.

Seaboard’s operations are exposed to market risks from changes in commodity prices, foreign currency exchange rates, interest rates and equity prices. Seaboard uses various commodity derivative futures and options to manage its risk of price fluctuations for raw materials and other inventories, finished product sales and firm sales commitments. Also, Seaboard enters into foreign currency exchange agreements to manage the foreign currency exchange rate risk with respect to certain

Balance






December 31,

(Millions of dollars)

2019

Level 1
Level 2
Level 3

Assets:

Trading securities – short-term investments:

Domestic equity securities

$
706

$
706

$
—

$
—

Domestic debt securities

409

117

292

—

Foreign equity securities

189

189

—

—

High yield securities

56

10

46

—

Foreign debt securities

43

—

43

—

Collateralized loan obligations

15

—

15

—

Money market funds held in trading accounts

12

12

—

—

Other trading securities

4

4

—

—

Trading securities – other current assets:

Domestic equity securities

40

40

—

—

Money market fund held in trading accounts

6

6

—

—

Foreign equity securities

3

3

—

—

Fixed income securities

2

2

—

—

Derivatives:

Commodities

6

6

—

—

Total Assets

$
1,491

$
1,095

$
396

$
—

Liabilities:

Contingent consideration

$
13

$
—

$
—

$
13

Derivatives:

Commodities

4

4

—

—

Foreign currencies

3

—

3

—

Total Liabilities

$
20

$
4

$
3

$
13

~~Financial instruments consisting of cash~~transactions denominated in foreign currencies, interest rate swap agreements to manage the interest rate risk with respect to certain variable rate long-term debt, and ~~cash equivalents, net receivables, lines of credit and accounts payable are carried at cost, which approximates fair value as a result of~~equity futures contracts to manage the equity price risk with respect to certain short-term nature of the instruments. The fair value of short-term investments is measured using multiple levels. Domestic debt securities categorized as level 1 in the fair value hierarchy include debt securities held in mutual funds and ETFs. Domestic debt securities categorized as level 2 include corporate bonds, mortgage-backed securities, asset-backed securities and U.S. Treasuries. Foreign debt securities categorized as level 1 in the fair value hierarchy include debt securities held in mutual funds and ETFs with a country of origin concentration outside the U.S. Foreign debt securities categorized as level 2 include foreign government or government related securities and asset-backed securities with a country of origin concentration outside the U.S. High yield securities categorized as level 1 in the fair value hierarchy include high yield securities held in mutual funds and ETFs and level 2 includes corporate bonds and bank loans.

During the first quarter of 2020, Seaboard invested $30 million in a financial services company that primarily lends to and invests in debt securities of privately held companies. This long-term investment is classified in “Other non-current assets” on the condensed consolidated balance sheet and is valued at net asset value (“NAV”), adjusted for specific liquidity factors, resulting in level 3 classification.

The fair value of Seaboard’s contingent consideration related to a 2018 acquisition was classified as a level 3 in the fair value hierarchy since the calculation is dependent upon projected company specific inputs using a Monte Carlo simulation. Seaboard remeasures the estimated fair value of the contingent consideration liability until settled with adjustments included in net earnings (loss). The increase in the liability during 2020 was related to lower interest rates at the measurement date.

investments. While management believes its derivatives are primarily economic hedges, Seaboard does not perform the extensive record-keeping required to account for these types of transactions as hedges for accounting purposes. These derivative contracts are recorded at fair value, with any changes in fair value recognized in the condensed consolidated statements of comprehensive income. As the ~~derivatives discussed below~~derivative contracts are not accounted for as hedges, fluctuations in the related ~~commodity~~ prices ~~foreign currency exchange~~or rates ~~interest rates and equity prices~~ could have a material impact on earnings in any given reporting period. The nature of Seaboard’s market risk exposure has not changed materially since December 31, ~~2019.~~

~~Commodity Instruments~~2020.

Seaboard uses various derivative futures and options to manage its risk of price fluctuations for raw materials and other inventories, finished product sales and firm sales commitments. As of June 27, 2020, Seaboard had open net derivative contracts to purchase 35 million pounds of sugar and open net derivative contracts to sell 29 million pounds of soybean oil. As of December 31, 2019, Seaboard had open net derivative contracts to purchase 17 million bushels of grain and open net derivative contracts to sell 132 million pounds of soybean oil and 12 million gallons of heating oil. Commodity derivatives are recorded at fair value with any changes in fair value being marked-to-market as a component of cost of sales in the ~~condensed consolidated statements of comprehensive income.~~

~~Foreign Currency Exchange Agreements~~

Seaboard enters into foreign currency exchange agreements to manage the foreign currency exchange rate risk with respect to certain transactions denominated in foreign currencies. As of June 27, 2020 and December 31, 2019, Seaboard had foreign currency exchange agreements to cover a portion of its firm sales and purchase commitments and related trade receivables and payables with netfollowing aggregated outstanding notional amounts ~~of $50 million and $78 million, respectively, primarily~~ related to ~~the South African rand and the euro. From time to time,~~derivative financial instruments:



		July 3,	December 31,
(Millions)	Metric	2021	2020
Commodities
Grain	Bushels	31	26
Hogs	Pounds	1	2
Soybean oil	Pounds	9	56
Heating oil	Gallons	16	—
Foreign currencies	U.S. dollar	50	49
Interest rate swaps	U.S. dollar	400	400
Equity futures	U.S. dollar	—	3

During mid-2020, Seaboard is subject to counterparty credit risk related to its foreign currency exchange agreements should the counterparties fail to perform according to the terms of the contracts. As of June 27, 2020, Seaboard had a maximum aggregate amount of loss due to credit risk of less than $1 million with 2 counterparties related to foreign currency exchange agreements. Seaboard does not hold any collateral related to these agreements.

~~Interest Rate Swap Agreements~~

~~Seaboard enters~~entered into interest rate swap agreements to manage the interest rate risk with respect to certain variable rate long-term debt. During the second quarter of 2020, Seaboard entered into 2 interest rate exchange agreements with an aggregate notional value totaling $100 million that mature in ~~May 2025.~~mid-2025. Seaboard pays fixed-rate interest payments ~~in the range~~at a weighted-average interest rate of ~~0.30% to 0.35% over the life of the agreements~~0.26% and receives variable-rate interest payments based on the one-month LIBOR from the counterparty without the exchange of the underlying notional amounts. ~~Interest rate exchange agreements are recorded at fair value~~

Credit risks associated with changes in value marked-to-market as a component of interest expense, net in the condensed consolidated statements of comprehensive income. Subsequently in the third quarter of 2020, Seaboard entered into an interest rate exchange agreement with a notional value of $300 million that matures in July 2025 with a fixed interest rate of 0.24%.

~~Equity Futures Contracts~~

~~Seaboard enters into equity futures contracts to manage the equity price risk with respect to certain short-term investments. Equity futures~~these derivative contracts are ~~recorded at fair value~~not significant as Seaboard minimizes counterparty exposure by dealing with ~~changes in value marked-to-market as a component~~credit-worthy counterparties and uses margin accounts for some contracts. At July 3, 2021, the maximum amount of ~~other investment income (loss), net in~~credit risk, had the ~~condensed consolidated statements~~counterparties failed to perform according to the terms of ~~comprehensive income. The notional amounts of these equity futures contracts were $131 million and $0 million as of June 27, 2020 and December 31, 2019, respectively.~~the contract, was $15 million.

The following table provides the amount of gain or (loss) ~~recognized in income~~ for each type of derivative and where it was recognized in the condensed consolidated statements of comprehensive income:



		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 27,		June 29,		June 27,		June 29,			July 3,		June 27,		July 3,		June 27,
(Millions of dollars)		2020		2019		2020		2019			2021		2020		2021		2020
Commodities	Cost of sales	$	(4)	$	1	$	17	$	(31)	Cost of sales	$	(22)	$	(4)	$	(20)	$	17
Foreign currencies	Cost of sales		1		1		13		4	Cost of sales		2		1		3		13
Foreign currencies	Foreign currency gains (losses), net		—		—		1		—	Foreign currency gains (losses), net		1		—		3		1
Equity	Other investment income (loss), net		(5)		—		23		(3)
Interest rate swaps	Interest expense		(1)		—		(1)		—	Interest expense		(1)		(1)		6		(1)
Equity futures										Other investment income (loss), net		—		(5)		—		23

The following table provides the fair value of each type of derivative held and where each derivative is included in the condensed consolidated balance sheets:



		Asset Derivatives					Liability Derivatives					Asset Derivatives					Liability Derivatives
		June 27,		December 31,			June 27,		December 31,			July 3,		December 31,			July 3,		December 31,
(Millions of dollars)		2020		2019			2020		2019			2021		2020			2021		2020
Commodities	Other current assets	$	9	$	6	Other current liabilities	$	2	$	4	Other current assets	$	17	$	28	Other current liabilities	$	33	$	19
Foreign currencies	Other current assets		—		—	Other current liabilities		2		3	Other current assets		9		—	Other current liabilities		—		9
Interest rate swaps	Other current assets		—		—	Other current liabilities		1		—	Other current assets		6		1	Other current liabilities		—		—
Equity	Short-term investments		1		—	Short-term investments		—		—
Equity futures											Short-term investments		—		—	Short-term investments		—		—

Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of ~~June 27, 2020~~July 3, 2021 and December 31, ~~2019,~~2020, the commodity derivatives had a margin account balance of ~~$17~~$71 million and ~~$13~~$15 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of ~~$24~~$55 million and ~~$15~~$24 million, respectively. Seaboard’s equity future derivatives are also presented on a net basis, including netting the derivatives within short-term investments.

Note 7 – Stockholders’ Equity and Accumulated Other Comprehensive Loss

~~In October 2019, the Board of Directors extended through October 31, 2020~~ Seaboard’s share repurchase ~~program.~~program expired on October 31, 2020. Under this share repurchase program, Seaboard iswas authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may behave been above or below the traded market price. During ~~the period that the share repurchase program remains in effect,~~2020, Seaboard ~~may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. All stock~~ repurchased will be made in compliance with applicable legal requirements and funded by cash on hand. The timing of the repurchases and the number of shares repurchased will depend upon market conditions, compliance with Securities and Exchange Commission regulations and other factors. The Board of Directors’ stock repurchase authorization does not obligate Seaboard to acquire a specific amount of common stock, and the stock repurchase program may be suspended at any time at Seaboard’s discretion. As of June 27, 2020, $65 million remained available for repurchase under this program. Seaboard repurchased 0 shares and 4,069 shares of common stock ~~during the three~~at a total price of $13 million. Shares repurchased were retired and ~~six months ended June 27, 2020, respectively.~~

~~The changes in the components of other comprehensive income (loss), net of related taxes, are as follows:~~

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020


2019


2020


2019

Foreign currency translation adjustment

$
(19)

$
(9)

$
(16)

$
(11)

Unrecognized pension cost ^(a)

—

3

2

6

Other comprehensive loss, net of tax

$
(19)

$
(6)

$
(14)

$
(5)


		~~(a)~~ ~~Primarily represents amounts reclassified from accumulated other comprehensive loss to net periodic pension cost representing the amortization of actuarial losses (gains) and other adjustments.~~

became authorized and unissued shares.

The components of accumulated other comprehensive loss, net of related taxes, ~~are~~were as follows:



	June 27,		December 31,		July 3,		December 31,
(Millions of dollars)	2020		2019		2021		2020
Cumulative foreign currency translation adjustment	$	(385)	$	(369)	$	(376)	$	(376)
Cumulative unrecognized pension cost		(69)		(71)		(90)		(95)
Total accumulated other comprehensive loss	$	(454)	$	(440)	$	(466)	$	(471)

~~Note 8 – Revenue Recognition~~

~~Seaboard has multiple segments with diverse revenue streams. The following tables present Seaboard’s sales disaggregated by revenue source and segment:~~

Three Months Ended June 27, 2020

Sugar

and

All

Consolidated

(Millions of dollars)

Pork

CT&M

Marine

Alcohol

Power

Other

Totals

Major Products/Services Lines:

Products

$
409

$
1,119

$
—

$
18

$
—

$
3

$
1,549

Transportation

2

—

192

—

—

—

194

Energy

40

—

—

—

13

—

53

Other

8

4

—

—

—

—

12

Segment/Consolidated Totals

$
459

$
1,123

$
192

$
18

$
13

$
3

$
1,808

Three Months Ended June 29, 2019

Sugar

and

All

Consolidated

(Millions of dollars)

Pork

CT&M

Marine

Alcohol

Power

Other

Totals

Major Products/Services Lines:

Products

$
427

$
999

$
—

$
29

$
—

$
5

$
1,460

Transportation

3

—

259

—

—

1

263

Energy

53

—

—

1

33

—

87

Other

9

3

—

—

—

—

12

Segment/Consolidated Totals

$
492

$
1,002

$
259

$
30

$
33

$
6

$
1,822

Six Months Ended June 27, 2020

Sugar

and

All

Consolidated

(Millions of dollars)

Pork

CT&M

Marine

Alcohol

Power

Other

Totals

Major Products/Services Lines:

Products

$
814

$
2,029

$
—

$
39

$
—

$
9

$
2,891

Transportation

4

—

461

—

—

—

465

Energy

80

—

—

1

30

—

111

Other

16

8

—

—

—

—

24

Segment/Consolidated Totals

$
914

$
2,037

$
461

$
40

$
30

$
9

$
3,491

Six Months Ended June 29, 2019

Sugar

and

All

Consolidated

(Millions of dollars)

Pork

CT&M

Marine

Alcohol

Power

Other

Totals

Major Products/Services Lines:

Products

$
784

$
1,825

$
—

$
54

$
—

$
8

$
2,671

Transportation

7

—

513

—

—

1

521

Energy

87

—

—

1

62

—

150

Other

17

6

—

—

—

—

23

Segment/Consolidated Totals

$
895

$
1,831

$
513

$
55

$
62

$
9

$
3,365

Revenue from goods and services transferred to customers at a single point in time account for approximately 85% of Seaboard’s net sales. Substantially all of the sales in Seaboard’s Marine segment are recognized ratably over the transit time for each voyage as Seaboard believes this is a faithful depiction of the performance obligation to its customers. Seaboard’s contracts with its customers are short-term, defined as less than one year.

Deferred revenue represents cash payments received in advance of Seaboard’s performance or revenue billed that is unearned. The CT&M segment requires certain customers to pay in advance or upon delivery to avoid collection risk. The Marine segment’s deferred revenue balance primarily relates to the unearned portion of billed revenue when a ship is on the water and has not arrived at the designated port. Deferred revenue balances are reduced when revenue is recognized. The deferred revenue balance as of December 31, 2019 was fully recognized as revenue during the first quarter of 2020.

~~Note 9 – Income Taxes~~

Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusts the provision for discrete tax items recorded in the period. Future changes in the forecasted annual income (loss) projections, including changes due to the ongoing impacts of the coronavirus disease 2019 (“COVID-19”) pandemic, could result in significant adjustments to quarterly income tax expense (benefit) in future periods.

Note 108 – Segment Information

Seaboard has 6 reportable segments: Pork, CT&M, Marine, Sugar and Alcohol, Power and Turkey, each offering a specific product or service. For details on the respective products or services of each segment, see Note 15 to the consolidated financial statements included in Seaboard’s annual report on Form 10-K for the year ended December 31, ~~2019. Below are segment updates from year-end.~~

During the first quarter of 2020, the CT&M segment finalized the purchase price allocation related to the October 2019 acquisition of ContiLatin del Peru S.A. resulting in the recording of $1 million of intangible assets and no ~~goodwill.~~

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of June 27, 2020 and December 31, 2019, Butterball had total assets of $1.1 billion and $1.0 billion, respectively. Butterball’s summarized income statement information was as follows:

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020


2019


2020


2019

Net sales

$
327

$
343

$
645

$
646

Operating loss

$
(24)

$
(8)

$
(31)

$
(27)

Net loss

$
(27)

$
(16)

$
(40)

$
(37)

2020.

The following tables ~~set forth specific financial information about each segment as reviewed~~present Seaboard’s sales disaggregated by Seaboard’s management. Operating income (loss) for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income (loss), along with income or loss from affiliates for the Pork, CT&Mrevenue source and Turkey segments, is used as the measure of evaluating segment performance because management does not consider interest, other investment income (loss) and income tax benefit (expense) on a segment basis.segment:

Sales to External Customers:

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Pork

$
459

$
492

$
914

$
895

CT&M

1,123

1,002

2,037

1,831

Marine

192

259

461

513

Sugar and Alcohol

18

30

40

55

Power

13

33

30

62

All Other

3

6

9

9

Segment/Consolidated Totals

$
1,808

$
1,822

$
3,491

$
3,365



		Three Months Ended July 3, 2021
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	596	$	1,374	$	—	$	26	$	—	$	4	$	2,000
Transportation		2		—		319		—		—		—		321
Energy		89		—		—		—		11		—		100
Other		6		3		—		—		—		—		9
Segment/Consolidated Totals	$	693	$	1,377	$	319	$	26	$	11	$	4	$	2,430



		Three Months Ended June 27, 2020
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	409	$	1,119	$	—	$	18	$	—	$	3	$	1,549
Transportation		2		—		192		—		—		—		194
Energy		40		—		—		—		13		—		53
Other		8		4		—		—		—		—		12
Segment/Consolidated Totals	$	459	$	1,123	$	192	$	18	$	13	$	3	$	1,808

1613

Operating Income (Loss):

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Pork

$
11

$
25

$
43

$
(9)

CT&M

24

29

54

36

Marine

(11)

4

(17)

4

Sugar and Alcohol

(2)

(4)

(3)

(8)

Power

(1)

8

1

12

All Other

—

—

1

1

Segment Totals

21

62

79

36

Corporate

(10)

(9)

(5)

(17)

Consolidated Totals

$
11

$
53

$
74

$
19



		Six Months Ended July 3, 2021
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	1,091	$	2,520	$	—	$	50	$	—	$	7	$	3,668
Transportation		3		—		619		—		—		1		623
Energy		152		—		—		2		24		—		178
Other		12		8		—		—		—		—		20
Segment/Consolidated Totals	$	1,258	$	2,528	$	619	$	52	$	24	$	8	$	4,489



		Six Months Ended June 27, 2020
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	814	$	2,029	$	—	$	39	$	—	$	9	$	2,891
Transportation		4		—		461		—		—		—		465
Energy		80		—		—		1		30		—		111
Other		16		8		—		—		—		—		24
Segment/Consolidated Totals	$	914	$	2,037	$	461	$	40	$	30	$	9	$	3,491

Income (Loss) from Affiliates:

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Pork

$
(4)

$
(6)

$
(3)

$
(14)

CT&M

—

(5)

1

(5)

Marine

1

—

2

1

Sugar and Alcohol

—

1

—

1

Power

—

2

—

2

Turkey

(14)

(8)

(21)

(19)

Segment/Consolidated Totals

$
(17)

$
(16)

$
(21)

$
(34)

Total Assets:

June 27,

December 31,

(Millions of dollars)

2020

2019

Pork

$
1,759

$
1,802

CT&M

1,570

1,621

Marine

504

554

Sugar and Alcohol

141

139

Power

282

283

Turkey

253

275

All Other

7

10

Segment Totals

4,516

4,684

Corporate

1,357

1,601

Consolidated Totals

$
5,873

$
6,285

Investments in and Advances to Affiliates:

June 27,

December 31,

(Millions of dollars)

2020

2019

Pork

$
181

$
183

CT&M

231

237

Marine

32

32

Sugar and Alcohol

6

5

Power

3

3

Turkey

253

275

Segment/Consolidated Totals

$
706

$
735

The following tables present Seaboard’s operating income (loss) and income (loss) from affiliates by segment. Operating income (loss) for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income (loss), along with income or loss from affiliates for the Pork, CT&M and Turkey segments, is used as the measure of evaluating segment performance because management does not consider interest, other investment income (loss) and income tax benefit (expense) on a segment basis. Administrative services provided by the corporate office are allocated to the individual segments and represent corporate services rendered to and costs incurred for each specific segment, with no allocation to individual segments of general corporate management oversight costs.



Operating Income (Loss):	Three Months Ended				Six Months Ended
	July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2021		2020		2021		2020
Pork	$	129	$	9	$	190	$	41
CT&M		16		24		32		54
Marine		32		(11)		53		(17)
Sugar and Alcohol		(1)		(2)		—		(3)
Power		(5)		(1)		(7)		1
All Other		—		—		1		1
Segment Totals		171		19		269		77
Corporate		(6)		(10)		(12)		(5)
Consolidated Totals	$	165	$	9	$	257	$	72



Income (Loss) from Affiliates:	Three Months Ended				Six Months Ended
	July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2021		2020		2021		2020
Pork	$	(6)	$	(4)	$	(2)	$	(3)
CT&M		4		—		10		1
Marine		1		1		2		2
Sugar and Alcohol		—		—		—		—
Power		—		—		—		—
Turkey		(4)		(14)		(9)		(21)
Segment/Consolidated Totals	$	(5)	$	(17)	$	1	$	(21)

The following tables present total assets by segment and the investments in and advances to affiliates by segment. Corporate assets primarily include cash and short-term investments, other current assets related to deferred compensation plans, long-term investments and other miscellaneous items. Corporate operating results represent certain operating costs not specifically allocated to individual segments and include costs related to Seaboard’s deferred compensation plans, which are offset by the effect of the ~~marked-to-market~~mark-to-market adjustments on these investments recorded in other investment income (loss), net.



Total Assets:	July 3,		December 31,
(Millions of dollars)	2021		2020
Pork	$	2,137	$	1,927
CT&M		1,948		1,585
Marine		564		508
Sugar and Alcohol		148		153
Power		329		302
Turkey		255		265
All Other		7		6
Segment Totals		5,388		4,746
Corporate		1,682		1,653
Consolidated Totals	$	7,070	$	6,399



Investments in and Advances to Affiliates:	July 3,		December 31,
(Millions of dollars)	2021		2020
Pork	$	147	$	172
CT&M		228		222
Marine		30		30
Sugar and Alcohol		3		6
Power		3		3
Turkey		255		265
Segment/Consolidated Totals	$	666	$	698

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). As of July 3, 2021 and December 31, 2020, Butterball had total assets of $1.2 billion and $993 million, respectively. Butterball’s summarized income statement information was as follows:



	Three Months Ended				Six Months Ended
	July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2021		2020		2021		2020
Net sales	$	371	$	327	$	712	$	645
Operating loss	$	(4)	$	(24)	$	(20)	$	(31)
Net loss	$	(7)	$	(27)	$	(18)	$	(40)

1715

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~~

~~As of June 27, 2020, Seaboard had cash and short-term investments of $1.3 billion and additional total net working capital of $635 million. Accordingly, management~~Management believes Seaboard’s 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.~~operations in both the short-term and long-term. Management intends to continue seeking opportunities for expansion in the industries in which Seaboard operates, utilizing existing liquidity, available borrowing capacity and other financing alternatives. The ~~extent to which the COVID-19 pandemic impacts the~~terms and availability of such financing may be impacted by economic and financial market conditions, as well as Seaboard’s financial condition and results of operations at the time Seaboard ~~is still uncertain.~~seeks such financing, and there can be no assurances that Seaboard will be able to obtain such financing on terms that will be acceptable or advantageous. Also, from time to time, Seaboard may fund capital calls and issue borrowings for its equity method investments based on specific facts and circumstances.

~~Cash~~As of July 3, 2021, Seaboard had cash and short-term investments of approximately $1.6 billion and additional total net working capital of $890 million. Also, Seaboard had available uncommitted lines of credit totaling $599 million and committed lines of credit available totaling $150 million as of June 27, 2020 decreased $302 million to $1.3 billion from December 31, 2019. The decrease was primarily the result of the sale of short-term investments for working capital purposes. Cash from operating activities decreased $39 million for the six months ended June 27, 2020 compared to the same period in 2019, primarily due to timing of payments on liabilities, partially offset by higher adjusted earnings for unrealized losses on short-term investments, lower inventory purchases and more cash collected on receivables.July 3, 2021.

As of ~~June 27, 2020, $64~~July 3, 2021, $77 million of the ~~$1.3~~$1.6 billion of cash and short-term investments were held by Seaboard’s foreign subsidiaries. Historically, Seaboard has considered substantially all foreign profits as being permanently invested in its foreign operations, including all cash and short-term investments held by foreign subsidiaries. Seaboard intends to continue permanently reinvesting the majority of these funds outside the U.S. as current plans do not demonstrate a need to repatriate them to fund Seaboard’s U.S. operations. For any planned repatriation to the U.S., Seaboard would record applicable deferred taxes for state or foreign withholding taxes.

~~Capital Expenditures~~Cash and ~~Other Investing Activities~~short-term investments as of July 3, 2021 increased $34 million from December 31, 2020. The increase was primarily the result of timing of draws under lines of credit and working capital fluctuations, partially offset by investments in capital expenditures. During the second quarter of 2021, the short-term investment portfolio was repositioned to reduce equity price risk and in anticipation of possibly utilizing short-term investment proceeds to fund capital expenditures. As a result, there was a significant increase in proceeds from the sale of short-term investments and purchase of short-term investments in the condensed consolidated statement of cash flows for the six months ended July 3, 2021. Cash from operating activities decreased $68 million for the six months ended July 3, 2021 compared to the same period in 2020, primarily due to higher inventories due to increased commodity prices and higher receivables due to sales growth, partially offset by the increase in trade payables and higher earnings.

During the six months ended ~~June 27, 2020,~~July 3, 2021, Seaboard invested ~~$108~~$223 million in property, plant and equipment, of which ~~$75~~$170 million was in the Pork ~~segment, $19 million in the Power segment and the remaining amount in other segments.~~segment. The Pork segment expenditures were primarily for ~~completing~~ the ~~expansion~~construction of the ~~Guymon pork processing plant and the modifications to the idle ethanol~~renewable diesel plant in Hugoton, ~~Kansas. The Power segment expenditures were for its power generating barge under construction with completion expected in 2021. All other capital expenditures were primarily of~~Kansas, and a ~~normal recurring nature such as replacements of machinery~~fuel storage and ~~equipment and general facility modernizations and upgrades.~~

distribution facility. For the remainder of ~~2020,~~2021, management has budgeted capital expenditures totaling ~~$174~~approximately $350 million. The Pork segment budgeted ~~$128~~approximately $275 million primarily for modifications to convert the Hugoton, Kansas plant to a renewable diesel ~~production facility,~~plant, with operations expected to begin in ~~2022. The CT&M segment budgeted $14 million primarily for milling assets~~2022, and other new investments, including biogas recovery and improvements to existing facilities and related equipment. The Marine segment budgeted $19 million primarily for additional cargo carrying and handling equipment. The Power segment budgeted $8 million primarily for capital expenditures associated with the new ~~power barge~~fuel storage and ~~construction costs for operating the existing barge together with the new barge at the current site. The remaining amount is planned to be spent in all other businesses.~~distribution facility. Management anticipates paying for these capital expenditures from a combination of available cash, ~~the use of available~~ short-term investments and ~~Seaboard’s available~~ borrowing capacity.

From time to time, Seaboard may fund capital calls and issue borrowings for its equity method investments based on the specific facts and circumstances. During the second quarter of 2020, no contributions or loans were provided. During the first quarter of ~~2020,~~2021, Seaboard ~~contributed $5~~repaid foreign subsidiary debt related to a 2018 acquisition of $46 million ~~to Seaboard Triumph Foods, LLC (“STF”) for working capital needs. Seaboard has~~upon its maturity. The primary debt outstanding is a ~~50% noncontrolling interest in STF, which operates a pork processing plant located in Iowa.~~

~~Financing Activities and Debt~~

As of June 27, 2020, Seaboard had short-term uncommitted lines of credit totaling $596 million and committed lines of credit totaling $425 million. During the second quarter, Seaboard entered into two credit agreements for $325 million of additional committed lines of credit for working capital and general corporate purposes. There was $220 million and $0 million borrowed under the uncommitted and committed lines of credit, respectively, as of June 27, 2020. Seaboard’s borrowing capacity under its uncommitted lines of credit was further reduced by letters of credit totaling $3 million. As of June 27, 2020, Seaboard had an unsecured term loan, which maturesTerm Loan due in 2028 with a balance of ~~$690~~$681 million ~~and $80 million~~as of ~~foreign subsidiary debt, denominated primarily in U.S. dollars and euros.~~

~~Management intends~~July 3, 2021. Draws under lines of credit have increased to continue seeking opportunities for expansion in the industries in which Seaboard operates, utilizing existing liquidity, available borrowing capacity and other financing alternatives. The terms and availability of such

financing may be impacted by economic and financial market conditions, as well as Seaboard’s financial condition and results of operations at the time Seaboard seeks such financing, and there can be no assurances that Seaboard will be able to obtain such financing on terms that will be acceptable or advantageous.

fund working capital.

RESULTS OF OPERATIONS

Net sales for the three and six month periods of ~~2020 decreased $14~~2021 increased $622 million and ~~increased $126~~$998 million, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three and six month ~~period was~~periods primarily reflected higher prices of commodities sold in the ~~result of lower~~CT&M segment, higher prices for pork products, market hogs and biodiesel sold in the Pork segment and higher cargo volumes in the Marine segment, lower prices and volumes of pork products sold and biodiesel in the Pork segment, lower spot market rates and production in the Power segment and lower volumes and prices of alcohol sold in the Sugar and Alcohol segment, partially offset by higher volumes of certain commodities in the CT&M segment. The increase for the six month period was primarily the result of higher volumes for certain commodities in the CT&M segment, partially offset by lower cargo volumes in the Marine segment and lower spot market rates and production in the Power segment.

Operating income ~~decreased $42~~increased $156 million and ~~increased $55~~$185 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019. The decrease for the three month period primarily reflected lower margins on pork products sold in the Pork segment and lower operating income due to decreased revenues in the Marine segment.~~2020. The increase for the three and six month ~~period~~periods primarily reflected higher margins on pork ~~products sold, lower derivative contract losses~~product and ~~the federal blender’s credits recognized~~hog sales in the Pork segment and higher ~~margins on third-party sales~~voyage revenue in the Marine segment, partially offset by derivative contract losses in the CT&M ~~segment, partially offset by lower operating income due to decreased revenues and lower voyage and other costs in the Marine~~ segment.

~~During the quarter, all segments continued to be~~16

Seaboard’s operations were most impacted by the COVID-19 pandemic ~~though some more than others. All~~during the second quarter of ~~Seaboard’s operations were considered “essential businesses” as defined by~~2020 compared to any other quarterly reporting period since the ~~respective governments and have been able to continue to operate.~~pandemic began. During the second quarter of 2020, Seaboard’s food product businesses saw changes in the mix of products primarily from a shift from food service to retail customer demand. ~~The food service businesses began to see a recovery in sales and operations towards the latter part of the quarter.~~Cargo volumes at Seaboard’s transportation business ~~was most impacted~~dropped significantly with ~~cargo volumes dropping significantly and~~ customers taking a longer period of time to resume operations at normal capacity. ~~The~~Also, the energy business saw declines due to low fuel prices. ~~There still remains uncertainty about~~Seaboard continues to encounter challenges resulting from the ~~expected length~~pandemic, including labor and ~~impact that~~has partially-staffed shifts and commodity market volatility. In addition, certain product sales have not yet returned to pre-COVID levels. The near and long-term impacts of the COVID-19 pandemic ~~will have~~ on Seaboard’s operations and the global ~~economy. Seaboard is taking a variety~~economy are unknown and impossible to predict with any level of ~~measures to ensure the availability and functioning of its essential operations and to promote the safety and security of all of its employees.~~certainty.

Pork Segment



	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2020		2019		2020		2019		2021		2020		2021		2020
Net sales	$	459	$	492	$	914	$	895	$	693	$	459	$	1,258	$	914
Operating income (loss)	$	11	$	25	$	43	$	(9)
Operating income									$	129	$	9	$	190	$	41
Loss from affiliates	$	(4)	$	(6)	$	(3)	$	(14)	$	(6)	$	(4)	$	(2)	$	(3)

Net sales for the Pork segment ~~decreased $33~~increased $234 million and ~~increased $19~~$344 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three ~~month period was primarily the result of lower prices~~ and volumes of pork products sold and lower prices and volume of biodiesel, partially offset by the recognition of $19 million in federal blender’s credits for biodiesel production in the second quarter of 2020 and higher sales of market hogs. For the six month ~~period, the increase~~periods was primarily the result of higher ~~volumes and~~ prices ~~for market hogs, the recognition of $33 million in federal blender’s credits for biodiesel production in the first half of 2020 and higher volumes~~ of pork products, ~~sold, partially offset by lower prices~~market hogs and volumes of biodiesel. In December 2019, the President of the U.S. signed into law the Further Consolidated Appropriations Act that extended the federal blender’s credits through 2022. There were no federal blenders’ credits recognized in the first half of 2019.biodiesel sold.

Operating income for the Pork segment ~~decreased $14~~increased $120 million and ~~increased $52~~$149 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three and six month ~~period~~periods was primarily due to ~~lower~~higher margins on pork product sales and ~~higher plant processing costs primarily due~~market hogs, and to ~~labor,~~a lesser extent, on biodiesel. Higher prices for pork products and hogs were partially offset by ~~no derivative contract losses in the second quarter of 2020 that were incurred in the second quarter of 2019 and lower~~higher costs for third-party hogs. The increase for the six month period was primarily due to no derivative contract losses and revenue recognized associated with the federal blender’s credits for the first six months of 2020, partially offset by lower biodiesel margins.feed. Management is unable to predict ~~future~~ market prices for pork products, the cost of feed or third-party hogs or the prices of

biodiesel or the ongoing impacts of the COVID-19 ~~pandemic;~~pandemic for future periods; however, management anticipates this segment will be profitable for the remainder of ~~2020.~~2021. The uncertainties and the volatility of the commodity grain markets could have a significant impact on profitability.

~~Loss from affiliates decreased $2~~CT&M Segment



	Three Months Ended				Six Months Ended
	July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2021		2020		2021		2020
Net sales	$	1,377	$	1,123	$	2,528	$	2,037
Operating income as reported	$	16	$	24	$	32	$	54
Mark-to-market adjustments		10		3		21		(2)
Operating income excluding mark-to-market adjustments	$	26	$	27	$	53	$	52
Income from affiliates	$	4	$	—	$	10	$	1

Net sales for the CT&M segment increased $254 million and ~~$11~~$491 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease was primarily the result of STF processing more hogs and utilizing more capacity. STF’s operations began in September 2017 with the second shift commencing in October 2018.~~

~~CT&M Segment~~

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Net sales

$
1,123

$
1,002

$
2,037

$
1,831

Operating income as reported

$
24

$
29

$
54

$
36

Marked-to-market adjustments

3

(7)

(2)

(4)

Operating income excluding marked-to-market adjustments

$
27

$
22

$
52

$
32

Loss from affiliates

$
—

$
(5)

$
1

$
(5)

~~Net sales for the CT&M segment increased $121 million and $206 million for the three and six month periods of 2020, respectively, compared to the same periods in 2019. The~~ increase primarily reflected higher volumes of certain commodities for third-party customers, including sales for a business acquired in October 2019, and higher prices for certain commodities, partially offset by lower affiliate volumes.

~~Operating income for this segment decreased $5 million and increased $18 million for the three and six month periods of 2020, respectively, compared to the same periods in 2019. The decrease~~ for the three month period primarily reflected ~~derivative contract losses in the second quarter of 2020,~~higher sales prices for most commodities, partially offset by ~~higher margins on~~lower volumes to both third-party ~~sales.~~customers and affiliates. The increase for the six month period primarily reflected higher sales prices of certain commodities to third-party customers and affiliates and, to a lesser extent, higher volumes to third-party customers, partially offset by lower volumes to affiliates due to timing of shipments.

Operating income for this segment decreased $8 million and $22 million for the three and six month periods of 2021, respectively, compared to the same periods in 2020. The decrease for the three and six month periods primarily reflected derivative contract losses related to mark-to-market adjustments and lower volumes of commodities sold, partially offset by higher margins on third-party ~~sales, including from the business acquired in October 2019.~~sales. Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which this segment operates, the volatility in the commodity markets, changes in ocean freight rates, and the ongoing impacts of the COVID- 19 pandemic, management is unable to predict ~~future~~ sales and operating ~~results; however,~~results for this segment for future periods. However, management anticipates positive operating income for this segment ~~will be profitable~~ for the remainder of ~~2020.~~2021, excluding the effects of marking to market derivative contracts.

Had Seaboard not applied ~~marked-to-market~~mark-to-market accounting to its derivative instruments, operating income for this segment would have been higher by $10 million and $21 million for the three and six month periods of 2021, respectively, and higher by $3 million and lower by $2 million for the three and six month periods of 2020, ~~respectively. Operating income for this segment would have been lower by $7 million and $4 million for the three and six month periods of 2019,~~ respectively. While management believes its commodity futures, options and foreign exchange contracts are primarily economic hedges of its firm purchase and sales contracts and anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these transactions as hedges for accounting purposes. Accordingly, while the changes in value of the derivative instruments were ~~marked-to-market,~~marked to market, the changes in value of the firm purchase or sales contracts were not. As products are delivered to customers, these existing ~~marked-to-market~~mark-to-market adjustments should be primarily offset by realized margins or losses as revenue is recognized over time, and these ~~marked-to-market~~mark-to-market adjustments could reverse in ~~2020.~~2021. Management believes eliminating these ~~marked-to-market~~mark-to-market adjustments provides a more reasonable presentation to compare and evaluate period-to-period financial results for this segment.

~~Marine Segment~~

Three Months Ended

Six Months Ended

June 27,

June 29,

June 27,

June 29,

(Millions of dollars)

2020

2019

2020

2019

Net sales

$
192

$
259

$
461

$
513

Operating income (loss)

$
(11)

$
4

$
(17)

$
4

Income from affiliates

$
1

$
—

$
2

$
1

~~Net sales for the Marine segment decreased $67~~Income from affiliates increased $4 million and ~~$52~~$9 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019. The decrease~~2020, primarily due to an African affiliate that incurred significant losses in the prior year related to higher feed and production costs and COVID-19 disruptions with reduced demand.

Marine Segment



	Three Months Ended				Six Months Ended
	July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2021		2020		2021		2020
Net sales	$	319	$	192	$	619	$	461
Operating income (loss)	$	32	$	(11)	$	53	$	(17)
Income from affiliates	$	1	$	1	$	2	$	2

Net sales for the Marine segment increased $127 million and $158 million for the three and six month periods of ~~2020~~2021, respectively, compared to the same periods in 2020. The increase for the three and six month periods of 2021 was primarily the result of ~~lower~~higher cargo volumes and, to a lesser extent, an increase in average freight rates due to strong demand. For the three and six month periods of 2020, cargo volumes were lower due to less demand with many of Marine’s customers temporarily shut down due to government orders associated with ~~COVID-19, partially offset by slightly higher freight rates due to a change in cargo mix with more refrigerated cargo volumes that generally have a higher freight rate.~~COVID-19.

Operating income ~~decreased $15~~increased $43 million and ~~$21~~$70 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three and six month periods was primarily the result of ~~lower revenues,~~higher voyage revenue, partially offset by ~~lower~~higher fuel costs due to the ~~decrease~~increase in price and consumption, higher charter hire costs due to increased rates and ~~lower~~more vessels, and higher terminal and intermodal trucking costs ~~as a result of~~related to the ~~overall decrease~~increase in cargo volumes. Management cannot predict changes in fuel costs, ~~future~~ cargo volumes and cargo rates, or the ongoing impacts of the COVID-19 ~~pandemic. Based on market conditions,~~pandemic for future periods; however, management expects higher charter hire rates, but anticipates this segment will ~~not~~ be profitable for the remainder of ~~2020.~~2021.

Sugar and Alcohol Segment



	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2020		2019		2020		2019		2021		2020		2021		2020
Net sales	$	18	$	30	$	40	$	55	$	26	$	18	$	52	$	40
Operating loss	$	(2)	$	(4)	$	(3)	$	(8)	$	(1)	$	(2)	$	—	$	(3)
Income from affiliates	$	—	$	1	$	—	$	1

Net sales for the Sugar and Alcohol segment ~~decreased $12~~increased $8 million and ~~$15~~$12 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three and six month periods primarily reflected ~~lower~~higher volumes ~~and prices~~ of alcohol and sugar sold, partially offset by ~~higher~~lower sales prices ~~of sugar sold~~ on ~~lower volumes.~~sugar. Sugar and alcohol sales are denominated in Argentine pesos, and an increase in local sales prices may be offset by exchange rate changes in the Argentine peso against the U.S. dollar.

Operating loss for the Sugar and Alcohol segment decreased $2$1 million and $5$3 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019. The decrease for~~2020. For the three and six month periods, the decrease primarily reflected ~~lower selling, general and administrative expenses and~~ higher margins on ~~sugar sales.~~alcohol due to lower production costs, partially offset by lower sales prices on sugar. Management cannot predict local sugar and alcohol prices, the volatility in the currency exchange rate or the ongoing impacts of the COVID-19 ~~pandemic.~~pandemic for future periods. Based on ~~market~~these conditions, management ~~currently~~ cannot predict if this segment will be profitable for the remainder of ~~2020.~~2021.

Power Segment


													��
	Three Months Ended				Six Months Ended				Three Months Ended					Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,			July 3,		June 27,
(Millions of dollars)	2020		2019		2020		2019		2021		2020			2021		2020
Net sales	$	13	$	33	$	30	$	62	$	11	$	13		$	24	$	30
Operating income (loss)	$	(1)	$	8	$	1	$	12	$	(5)	$	(1)		$	(7)	$	1
Income from affiliates	$	—	$	2	$	—	$	2

Net sales for the Power segment decreased ~~$20~~$2 million and ~~$32~~$6 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The decrease for the three and six month periods primarily reflected lower power generation, partially offset by higher spot market rates ~~primarily due to lower~~as a result of higher fuel ~~prices and lower production due to less demand.~~prices.

Operating income for the Power segment decreased $9$4 million and ~~$11~~$8 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The decrease for the three and six month periods was primarily due to lower revenues ~~partially offset by lower fuel costs~~ and, ~~consumption.~~to a lesser extent, higher operating costs. Management cannot predict ~~future~~ fuel costs, the extent that spot market rates will fluctuate compared to fuel costs or other power producers, or the ongoing impacts of the COVID-19 ~~pandemic.~~pandemic for future periods. Based on ~~market~~these conditions and plans for the interconnection of the existing barge at a new site related to the arrival of the new barge, management ~~currently cannot predict if~~expects this segment will not be profitable for the remainder of ~~2020.~~2021. The new barge arrived in early May 2021 and testing and commissioning has commenced. Commercial operations for the new barge are anticipated to begin later this year and management continues to explore strategic alternatives for the existing barge, including a sale or relocation.

Turkey Segment



	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,		July 3,		June 27,		July 3,		June 27,
(Millions of dollars)	2020		2019		2020		2019		2021		2020		2021		2020
Loss from affiliates	$	(14)	$	(8)	$	(21)	$	(19)	$	(4)	$	(14)	$	(9)	$	(21)

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in ~~Butterball.~~Butterball, LLC. The ~~increase~~decrease in loss from affiliates for the three and six month ~~period~~periods of ~~2020~~2021 compared to the same ~~period~~periods in ~~2019~~2020 was primarily the result of ~~lower volumes of turkey products sold related to a decline~~an increase in ~~food service demand~~sales volume and higher ~~production costs primarily related to labor. The increase in loss for the six month period of 2020 compared to the same period in 2019 was primarily~~

~~due to lower volumes of turkey products sold and higher production costs,~~revenue per pound, partially offset by ~~overall higher prices on~~ a ~~stronger~~weaker sales mix ~~with more~~due to a decrease in value-added ~~turkey products sold.~~product sales and higher feed and plant production costs. Also, interest costs were lower than the same periods in the prior year primarily due to mark-to-market fluctuations on interest rate swap agreements. Management is unable to predict ~~future~~ market prices for turkey products, the cost of feed or the ongoing impacts of the COVID-19 ~~pandemic.~~pandemic for future periods. Based on ~~market~~these conditions, management ~~anticipates~~cannot predict if this segment will ~~not~~ be profitable for the remainder of ~~2020.~~2021. The uncertainties and the volatility of the commodity grain markets could have a significant impact on profitability.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses ~~decreased $3~~increased $8 million and ~~$15~~$22 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019.~~2020. The ~~decrease~~increase for the three month period was primarily ~~due~~the result of higher personnel costs, including pension-related adjustments and bonus accruals associated with improved financial performance, and higher consulting costs, partially offset by lower costs related to ~~lower personnel costs. The decrease for the six month period was primarily due to lower~~Seaboard’s deferred compensation ~~program costs due to capital market volatility.~~program. The deferred compensation program costs are offset by the effect of the ~~marked-to-market~~mark-to-market on investments recorded in other investment income (loss). The increase for the six month period was primarily the result of higher costs related to Seaboard’s deferred compensation program and higher personnel costs.

Interest Expense

Interest expense remained the same and decreased ~~$6 million and $7~~$15 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019. The~~2020. For the three month period, the decrease ~~was primarily due to lower~~in interest rates on outstanding debt was offset by the mark-to-market fluctuations on interest rate swap agreements and ~~more~~less capitalized interest related to ~~ongoing capital expenditure investments.~~construction in progress due to the decrease in interest rates. The decrease for the six month period was primarily related to mark-to-market fluctuations on interest rate swap agreements and lower interest rates, partially offset by less capitalized interest. Seaboard entered into two interest rate exchange agreements during the second quarter of 2020.

Other Investment Income (Loss), Net

Other investment income, net decreased $82 million and increased ~~$91~~$214 million for the three and six month ~~period~~periods of ~~2020~~2021, respectively, compared to the same ~~period~~periods in ~~2019~~2020 primarily due to ~~unrealized~~mark-to-market fluctuations and realized gains on short-term ~~investments due to~~investments. There was increased capital market volatility partially offset by $26 million of realized losses from the sale of certain short-term investments. Other investment income, net decreased $247 million for the six month period of 2020 compared to the same period in 2019 primarily due to unrealized losses on short-term investments ~~partially offset by $37 million~~at the onset of ~~realized gains.~~the COVID-19 pandemic in the United States during the three and six month periods of 2020.

Foreign Currency Gains (Losses), Net

~~Other foreign~~Foreign currency ~~losses,~~gains, net ~~increased $4~~decreased $2 million and increased $18 million for the three and six month periods of ~~2020,~~2021, respectively, compared to the same periods in ~~2019~~2020 primarily due to fluctuations in the ~~Zambian kwacha,~~ South African rand, Zambian kwacha and the euro among fluctuations of other currency exchange rates in several foreign countries.

Income Tax Expense

The effective tax rate for the three and six month ~~period~~periods of 2020 ~~increased compared to the three month period of 2019~~was primarily ~~due to a change~~impacted by changes in forecasted annual results ~~from~~due to the uncertainty of the COVID-19 pandemic and the impact of tax credits. The forecasted annual results were a loss at the first quarter of 2020 and changed to positive earnings at the second quarter of ~~2020.~~2020, resulting in a negative tax rate. The effective tax rate for the three and six month ~~period~~periods of ~~2020 decreased compared to~~2021 was lower than the ~~six month period~~U.S. federal income tax rate of ~~2019~~21% primarily due to ~~additional~~the availability of tax credits which decreased income tax ~~exempt income from the federal blender’s credits and lower forecasted earnings compared to prior year.~~expense.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Seaboard is exposed to various types of market risks in its day-to-day operations. Primary market risk exposures result from changing commodity prices, foreign currency exchange rates, interest rates and equity prices. Occasionally, Seaboard utilizes derivative instruments to manage these overall market risks. ~~Seaboard entered into interest rate swap agreements during the second quarter of 2020, but the~~The nature of Seaboard’s market risk exposure related to these items has not changed materially since December 31, ~~2019.~~2020. See Note 6 to the condensed consolidated financial statements for further discussion.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures — Seaboard’s management evaluated, under the direction of the Chief Executive and Chief Financial ~~Officer,~~Officers, the effectiveness of Seaboard’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of ~~June 27, 2020.~~July 3, 2021. Based upon and as of the date of that evaluation, Seaboard’s Chief Executive and Chief Financial ~~Officer~~Officers concluded that Seaboard’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports it files and submits under the Exchange Act 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~~Control Over Financial Reporting — There ~~has~~have been no ~~change~~changes in Seaboard’s internal control over financial reporting required by Exchange Act Rule 13a-15(f) that occurred during the fiscal quarter ended ~~June 27, 2020~~July 3, 2021 that has materially affected, or is reasonably likely to materially affect, Seaboard’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For information related to Seaboard’s legal proceedings, see Note 4 to the condensed consolidated financial statements.

Item 1A. Risk Factors

~~Except for the update to the risk factors set forth below, there~~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, ~~2019.~~

~~(a)(3) Deterioration of Economic Conditions Could Negatively Impact Seaboard’s Business~~. Seaboard’s business may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability of capital markets, consumer spending rates, energy availability and costs, impacts caused by pandemics and other public health emergencies, including the COVID-19 pandemic, and the effects of governmental initiatives to manage economic conditions. Any such changes could adversely affect the demand for and production of Seaboard’s meat products, grains, shipping services and other products, or the cost and availability of needed raw materials and packaging materials, thereby negatively affecting Seaboard’s financial results. For example, Seaboard is monitoring the impact of the COVID-19 pandemic, which has already caused a significant disruption to global financial markets and supply chains. The significance of the operational and financial impact to Seaboard will depend on how long and widespread this disruption proves to be. The extent to which the COVID-19 pandemic impacts Seaboard’s results will depend on future developments, which are uncertain and cannot be predicted, including new information which may emerge concerning the severity of the pandemic and the actions that are being taken to contain and treat it. If economic or market conditions in key global markets deteriorate, Seaboard may experience material adverse effects on its business, financial condition and results of operations. The current national and global economic conditions, could, among other things:

●

~~impair the financial condition of some of Seaboard’s customers and suppliers, thereby increasing customer bad debts or non-performance by customers and suppliers;~~

●

~~negatively impact global demand for protein and grain-based products, which could result in a reduction of revenues, operating income and cash flows;~~

●

~~decrease the value of Seaboard’s investments in equity and debt securities, including pension plan assets, causing losses that would adversely impact Seaboard’s net earnings; and~~

●

~~impair the financial viability of Seaboard’s insurers.~~

~~(b)(4) The Loss of This Segment’s Oklahoma Pork Processing Plant and the STF Plant Could Adversely Affect the Business~~. This segment is largely dependent on the continued operation of its Oklahoma pork processing plant and the STF plant. Seaboard provides approximately one-third of STF’s hogs for processing and also markets substantially all pork products produced. The closure, loss of, or damage to these plants for any reason, including pandemic, fire, tornado, earthquake, or the occurrence of adverse governmental action could adversely affect the business of this segment. The closure, even temporarily, of these plants could have a material adverse effect on Seaboard’s liquidity and financial results.2020.

~~Item 2.~~ ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

There were no purchases of Seaboard’s common stock made by or on behalf of Seaboard or any “affiliated purchaser” (as defined by applicable rules of the Securities and Exchange Commission) during the fiscal quarter ended June 27, 2020. See Note 7 to the condensed consolidated financial statements for further discussion of Seaboard’s share repurchase program.

2320


Item 6.		Exhibits

Exhibit No.		Description

~~10.1~~		~~364-Day Revolving Credit Agreement dated May 21, 2020. Incorporated herein by reference to Exhibit 10.1 of Seaboard’s Form 8-K dated May 28, 2020~~.

31.1		Certification of the Chief Executive ~~and~~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 ~~and~~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

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

2421

Forward-looking Statements

This Form 10-Q contains ~~forward-looking statements~~“forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including with respect to the financial condition, results of operations, plans, objectives, future performance and business of 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, adequate liquidity levels, capital expenditures, capital structure or other financial items, including the impact of ~~marked-to-market~~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, agricultural commodities, sugar, alcohol, turkey and other products and services; (iv) the recorded tax effects under certain circumstances and changes in tax laws; (v) the volume of business and working capital requirements associated with the competitive trading environment for the CT&M segment; (vi) the charter hire rates and fuel prices for vessels; (vii) the fuel costs and related spot market prices for electricity in the Dominican Republic; (viii) the effect of the fluctuation in foreign currency exchange rates, (ix) the profitability or sales volume of any of Seaboard’s segments; (x) the anticipated costs and completion timetables for Seaboard’s scheduled capital improvements, acquisitions and dispositions; (xi) the productive capacity of facilities that are planned or under construction, and the timing of the commencement of operations at such facilities; (xii) the impact of pandemics or other public health emergencies, such as the COVID-19 ~~pandemic~~pandemic; (xiii) potential future impact on Seaboard’s business of new legislation, rules or ~~(xiii)~~policies; (xiv) adverse results in pending litigation matters; or (xv) 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.

This list of forward-looking statements is not exclusive. Forward-looking statements are based only on Seaboard’s current beliefs, expectations and assumptions regarding its future financial condition, results of operations, plans, objectives, performance and business. 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, except as required by law. 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 heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the information included under the caption “Risk Factors” in Seaboard’s latest annual report on Form 10-K, as supplemented in this Form 10-Q, identifies important factors that could cause such differences.

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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.


	Seaboard Corporation
		(Registrant)

	by:	/s/ ~~Robert L. Steer~~David H. Rankin
		~~Robert L. Steer~~David H. Rankin
		~~President, Chief~~ Executive ~~Officer~~
		~~and~~Vice President, Chief Financial Officer

		(principal ~~executive officer and principal~~ financial officer)

	Date: ~~July 28, 2020~~August 3, 2021


	by:	/s/ Michael D. Trollinger
		Michael D. Trollinger
		Senior Vice President, Corporate Controller
		and Chief Accounting Officer

		(principal accounting officer)

	Date: ~~July 28, 2020~~August 3, 2021

2623



		Three Months Ended June 29, 2019
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	427	$	999	$	—	$	29	$	—	$	5	$	1,460
Transportation		3		—		259		—		—		1		263
Energy		53		—		—		1		33		—		87
Other		9		3		—		—		—		—		12
Segment/Consolidated Totals	$	492	$	1,002	$	259	$	30	$	33	$	6	$	1,822



		Six Months Ended June 29, 2019
								Sugar
								and				All		Consolidated
(Millions of dollars)		Pork		CT&M		Marine		Alcohol		Power		Other		Totals
Major Products/Services Lines:
Products	$	784	$	1,825	$	—	$	54	$	—	$	8	$	2,671
Transportation		7		—		513		—		—		1		521
Energy		87		—		—		1		62		—		150
Other		17		6		—		—		—		—		23
Segment/Consolidated Totals	$	895	$	1,831	$	513	$	55	$	62	$	9	$	3,365



Sales to External Customers:	Three Months Ended				Six Months Ended
	June 27,		June 29,		June 27,		June 29,
(Millions of dollars)	2020		2019		2020		2019
Pork	$	459	$	492	$	914	$	895
CT&M		1,123		1,002		2,037		1,831
Marine		192		259		461		513
Sugar and Alcohol		18		30		40		55
Power		13		33		30		62
All Other		3		6		9		9
Segment/Consolidated Totals	$	1,808	$	1,822	$	3,491	$	3,365