UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~July 4, 2015~~April 2, 2016

~~{ }~~☐ 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~~
Delaware	1-3390	04-2260388
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation)	File Number)	Identification No.)

~~incorporation or organization)~~

9000 West 67th Street, ~~Shawnee Mission,~~Merriam, Kansas		66202
(Address of principal executive offices)		(Zip Code)

~~(913) 676-8800~~

(Registrant’s telephone number, including area ~~code)~~code (913) 676-8800

Not Applicable

(Former name, former address and former fiscal year, if changed since last ~~report.)~~report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X ☒ No __☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes X ☒ No __☐

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


Large Accelerated Filer ~~[ X ]~~☒	Accelerated Filer ~~[ ]~~☐
Non-Accelerated Filer [ ]☐ (Do not check if a smaller reporting company)	Smaller Reporting Company [ ]☐

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

There were 1,170,550 shares of common stock, $1.00 par value per share, outstanding on ~~July 28, 2015.~~April 29, 2016.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

~~(Thousands of dollars except share and per share amounts)~~

(Unaudited)

		Three Months Ended								Six Months Ended
		July 4,				June 28,				July 4,				June 28,			Three Months Ended
		2015				2014				2015				2014			April 2,		April 4,
(Millions of dollars except share and per share amounts)																	2016		2015
Net sales:
Products (includes sales to affiliates of $212,464, $179,031, $424,170 and $375,017)		$	1,148,164			$	1,417,116			$	2,325,091			$	2,630,871
Service revenues		251,846				224,127				500,955				436,160
Products (includes sales to affiliates of $224 and $212)																	$	1,066	$	1,177
Services revenues																		236		249
Other		27,876				53,348				54,198				107,196				17		26
Total net sales		1,427,886				1,694,591				2,880,244				3,174,227				1,319		1,452
Cost of sales and operating expenses:
Products		1,081,425				1,249,249				2,200,088				2,354,832				990		1,119
Services		224,298				202,482				443,316				396,989				212		219
Other		22,634				45,433				44,147				99,391				17		21
Total cost of sales and operating expenses		1,328,357				1,497,164				2,687,551				2,851,212				1,219		1,359
Gross income		99,529				197,427				192,693				323,015				100		93
Selling, general and administrative expenses		67,867				63,088				133,192				123,473				64		65
Operating income		31,662				134,339				59,501				199,542				36		28
Other income (expense):
Interest expense		(3,760		)		(3,856		)		(8,290		)		(8,676		)		(8)		(5)
Interest income		2,596				1,724				5,925				8,804				4		3
Interest income from affiliates		7,179				6,880				14,239				13,236				6		7
Income from affiliates		12,257				8,120				23,036				15,401				22		11
Other investment income (loss), net		(2,736		)		2,787				3,812				3,360
Foreign currency gains (losses), net		363				(2,994		)		1,775				(8,687		)
Other investment income, net																		5		7
Foreign currency gains, net																		7		1
Miscellaneous, net		3,517				(2,393		)		(910		)		(2,253		)		(3)		(4)
Total other income, net		19,416				10,268				39,587				21,185				33		20
Earnings before income taxes		51,078				144,607				99,088				220,727				69		48
Income tax expense		(18,968		)		(49,851		)		(33,850		)		(76,885		)		(14)		(15)
Net earnings		$	32,110			$	94,756			$	65,238			$	143,842		$	55	$	33
Less: Net income attributable to noncontrolling interests		(459		)		(762		)		(685		)		(1,045		)		(1)		—
Net earnings attributable to Seaboard		$	31,651			$	93,994			$	64,553			$	142,797		$	54	$	33

Earnings per common share	$ 27.04				$ 79.28				$ 55.15				$ 120.34				$	45.91	$	28.11

Other comprehensive income (loss), net of income tax benefit of $682, $725, $824 and $10,388:
Other comprehensive income (loss), net of income tax benefit of $10 and $0:
Foreign currency translation adjustment		(8,836		)		(2,790		)		(14,794		)		(29,565		)		(26)		(6)
Unrealized gain (loss) on investments		(3		)		498				674				1,024
Unrealized gain (loss) on cash flow hedges		-				(275		)		-				86
Unrealized gain on investments																		—		1
Unrecognized pension cost		945				320				2,227				640				1		1
Other comprehensive loss, net of tax		$	(7,894	)		$	(2,247	)		$	(11,893	)		$	(27,815	)	$	(25)	$	(4)
Comprehensive income		24,216				92,509				53,345				116,027				30		29
Less: Comprehensive income attributable to noncontrolling interests		(451		)		(765		)		(754		)		(1,044		)		(1)		—
Comprehensive income attributable to Seaboard		$	23,765			$	91,744			$	52,591			$	114,983		$	29	$	29

Average number of shares outstanding		1,170,550				1,185,633				1,170,550				1,186,640				1,170,550		1,170,550

See accompanying notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

~~(Thousands of dollars except share and per share amounts)~~

(Unaudited)

		July 4,			December 31,
		2015			2014			April 2,		December 31,
(Millions of dollars except share and per share amounts)								2016		2015
Assets	Assets
Current assets:
Cash and cash equivalents		$	80,093		$	36,459		$	53	$	50
Short-term investments		626,537			490,566				1,185		1,254
Receivables, net of allowance		488,986			633,965				451		510
Inventories		664,970			736,302				694		739
Deferred income taxes		46,435			45,647
Other current assets		124,684			110,053				99		111
Total current assets		2,031,705			2,052,992				2,482		2,664
Net property, plant and equipment		839,661			846,757				907		831
Investments in and advances to affiliates		605,014			543,411				722		671
Notes receivable from affiliates		191,778			197,270				213		200
Other assets		70,188			51,328
Other non-current assets									72		65
Total assets		$	3,738,346		$	3,691,758		$	4,396	$	4,431

Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity
Current liabilities:
Notes payable to banks		$	103,252		$	75,524		$	146	$	141
Current maturities of long-term debt									8		4
Accounts payable		163,977			214,218				193		239
Deferred revenue		66,713			51,158				100		93
Other current liabilities		306,368			293,932				272		289
Total current liabilities		640,310			634,832				719		766
Long-term debt, less current maturities									506		518
Deferred income taxes		76,029			95,538				30		41
Other liabilities and deferred credits		234,108			226,677				228		224
Total non-current liabilities		310,137			322,215				764		783
Commitments and contingent liabilities
Stockholders’ equity:
Common stock of $1 par value,
Authorized 1,250,000 shares;
issued and outstanding 1,170,550 shares		1,171			1,171
Common stock of $1 par value. Authorized 1,250,000 shares; issued and outstanding 1,170,550 shares									1		1
Accumulated other comprehensive loss		(264,530		)	(252,637		)		(303)		(278)
Retained earnings		3,046,355			2,981,802				3,207		3,153
Total Seaboard stockholders’ equity		2,782,996			2,730,336				2,905		2,876
Noncontrolling interests		4,903			4,375				8		6
Total equity		2,787,899			2,734,711				2,913		2,882
Total liabilities and stockholders’ equity		$	3,738,346		$	3,691,758		$	4,396	$	4,431

See accompanying notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

SEABOARD CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

~~(Thousands of dollars)~~

(Unaudited)

	Six Months Ended
	July 4,			June 28,			Three Months Ended
	2015			2014			April 2,		April 4,
(Millions of dollars)							2016		2015
Cash flows from operating activities:
Net earnings	$	65,238		$	143,842		$	55	$	33
Adjustments to reconcile net earnings to cash from operating activities:
Depreciation and amortization	46,126			46,057				23		24
Gain from sale of fixed assets	(499		)	(1,887		)
Deferred income taxes	(19,538		)	13,362				—		(8)
Pay-in-kind interest and accretion on notes receivable from affiliates	(8,765		)	(7,535		)		(1)		(4)
Income from affiliates	(23,036		)	(15,401		)		(22)		(11)
Dividends received from affiliates	18,326			1,823				1		10
Other investment income, net	(3,812		)	(3,360		)		(5)		(7)
Other, net	1,672			626				—		1
Changes in assets and liabilities:
Changes in assets and liabilities, net of acquisition:
Receivables, net of allowance	145,444			69,297				41		106
Inventories	63,569			(51,365		)		48		18
Other current assets	(14,193		)	6,042				9		(10)
Current liabilities, exclusive of debt	(18,973		)	(5,728		)		(38)		(31)
Other, net	12,385			7,140				6		2
Net cash from operating activities	263,944			202,913				117		123
Cash flows from investing activities:
Purchase of short-term investments	(313,417		)	(567,264		)		(171)		(225)
Proceeds from the sale of short-term investments	165,751			530,709				247		119
Proceeds from the maturity of short-term investments	15,877			3,338				5		4
Capital expenditures	(68,005		)	(68,213		)		(63)		(28)
Proceeds from the sale of fixed assets	24,079			2,252				44		—
Acquisition of business								(148)		—
Investments in and advances to affiliates, net	(49,831		)	(1,786		)		(24)		(18)
Principal payments received on long-term notes receivable from affiliates	74			-
Long-term notes receivable issued to affiliates								(12)		—
Purchase of long-term investments	(22,258		)	(2,333		)		(9)		(3)
Other, net	(2,897		)	(70		)		—		(9)
Net cash from investing activities	(250,627		)	(103,367		)		(131)		(160)
Cash flows from financing activities:
Notes payable to banks, net	30,757			(23,943		)		18		49
Principal payments of long-term debt	-			(5,903		)
Repurchase of common stock	-			(53,781		)
Other, net	(226		)	(18		)
Net cash from financing activities	30,531			(83,645		)		18		49
Effect of exchange rate change on cash	(214		)	2,698
Effect of exchange rate changes on cash and cash equivalents								(1)		—
Net change in cash and cash equivalents	43,634			18,599				3		12
Cash and cash equivalents at beginning of year	36,459			55,055				50		36
Cash and cash equivalents at end of period	$	80,093		$	73,654		$	53	$	48

See accompanying notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

SEABOARD CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 —– Accounting Policies and Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries (“Seaboard”). All significant intercompany balances and transactions have been eliminated in consolidation. Seaboard’s investments in non-consolidated affiliates are accounted for by the equity method. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of Seaboard for the year ended December 31, ~~2014~~2015 as filed in its ~~Annual Report~~annual report on Form 10-K. Seaboard’s first three quarterly periods include approximately 13 weekly periods ending on the Saturday closest to the end of March, June and September. Seaboard’s year-end is December 31.

The accompanying unaudited Condensed Consolidated Financial Statements include all adjustments (consisting only of normal recurring adjustments) ~~which,~~that, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. 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 mark-to-market accounting for commodity derivatives.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with United States (“U.S.”) generally accepted accounting principles (“("GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the 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 doubtful accounts, valuation of inventories, impairment of long-lived assets, potential write-down related to investments in and advances to affiliates and notes receivable from affiliates, income taxes and accrued pension liability. Actual results could differ from those estimates.

Supplemental Non-Cash Transactions

Seaboard ~~has~~had notes receivable from affiliates ~~which accrue~~that accrued pay-in-kind interest income, primarily from one ~~affiliate as discussed in~~affiliate. On January 4, 2016, the interest on this note receivable was modified to eliminate future pay-in-kind interest. See Note 9.9 to the Condensed Consolidated Financial Statements for further discussion of this modification. Seaboard recognized ~~$4,405,000~~$1 million and ~~$8,765,000~~$4 million of non-cash, pay-in-kind interest income and accretion of discount for the ~~three~~first quarter ended April 2, 2016 and ~~six months ended July~~April 4, 2015, ~~respectively, and $3,907,000 and $7,535,000 for the three and six months ended June 28, 2014,~~ respectively, related to these notes ~~receivable.~~receivable from affiliates.

Recently Issued Accounting Standards Not Yet Adopted

In May 2014, the Financial Accounting Standards Board ~~(“FASB”~~("FASB") issued guidance to develop a single, comprehensive revenue recognition model for all contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in ~~U.S.~~ GAAP when it becomes effective. Seaboard is currently evaluating the impact this new guidance will have on its consolidated financial statements and related disclosures. Seaboard will be required to adopt this guidance on January 1, 2018, and it is currently anticipated that Seaboard will apply this guidance using the cumulative effect transition method.

In July 2015, the FASB issued guidance to simplify the subsequent measurement of ~~inventory;~~inventory, excluding inventory measured using last-in, ~~first out~~first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new guidance is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. Seaboard believes the adoption of this guidance will not have a material impact on Seaboard’s financial position or net earnings.

In January 2016, the FASB issued guidance that requires entities to measure equity investments, other than those accounted for using the equity method of accounting, at fair value and recognize any changes in fair value in net income if a readily determinable fair value exists. For equity investments without readily determinable fair values, the cost method of accounting is also eliminated. An entity may elect to record these equity investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The new guidance is effective for interim and

annual periods beginning after December 15, 2017. Seaboard is analyzing the impact of this new standard on certain of its equity investments and, at this time, cannot estimate the impact of adoption on net earnings.

~~Change in Accounting Method~~

~~During~~In February 2016, the ~~second quarter of 2015, Seaboard invested an additional $10,000,000 in~~FASB issued guidance that a ~~business operating a 300 megawatt electricity generating facility~~lessee should recognize in the ~~Dominican Republic. This investment increased Seaboard’s ownership interest~~balance sheet a liability to ~~29.9%~~make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from ~~less than 20%. Seaboard’s~~a lease by a lessee have not significantly changed from the previous ~~investment~~guidance. For operating leases, a lessee is required to: (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of ~~$5,910,000 was accounted for using~~the lease payments, in the balance sheet, (2) recognize a single lease cost, calculated so that the cost ~~method~~of the lease is allocated over the lease term on a generally straight-line basis and as(3) classify all cash payments within operating activities in the statement of cash flows. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a ~~result~~modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. Seaboard is currently assessing the potential impact of this additional investment, Seaboard changed its accounting method to the equity method. This change in accounting requires Seaboard to present its prior period financial results to reflect the equity method of accounting from the date of the initial investment which resulted in a $12,691,000 adjustment to retained earnings and a corresponding increase to its investment as of January 1, 2014. The results for the three and six months ended July 4, 2015 andnew standard.

June 28, 2014, which represents Seaboard’s portion of the income (losses) incurred by the investee were not material. There is no tax impact to Seaboard on these amounts. See Note 9 for more information.

Note 2 —– Investments

Seaboard’s short-term investments are treated as either available-for-sale securities or trading securities. All of Seaboard’s available-for-sale and trading securities are classified as current assets as they are readily available to support Seaboard’s current operating needs. Available-for-sale securities are recorded at their estimated fair value with unrealized gains and losses reported, net of tax, as a separate component of accumulated other comprehensive loss. Trading securities are recorded at their estimated fair value with unrealized gains and losses reflected in other investment income (loss), net. At July 4, 2015, money market funds included $969,000 denominated in British pounds and $560,000 denominated in Canadian dollars.

The following is a summary of the amortized cost and estimated fair value of short-term investments for both available-for-sale and trading securities at ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014.~~

2015

2014

Amortized

Fair

Amortized

Fair

(Thousands of dollars)

Cost

Value

Cost

Value

Money market funds

$
266,106

$
266,106

$
142,432

$
142,432

Corporate bonds

12,540

12,538

11,000

11,015

U.S. Government agency securities

9,437

9,480

9,684

9,666

Other available-for-sale investments

3,685

3,706

3,933

3,983

Total available-for-sale short-term investments

291,768

291,830

167,049

167,096

High yield trading debt securities

162,196

159,798

187,491

181,483

Equity mutual fund

86,309

84,557

83,809

82,542

Domestic equity ETF

59,155

61,914

31,307

32,651

Money market funds held in trading accounts

23,618

23,618

21,401

21,401

Other trading investments

5,719

4,820

6,173

5,393

Total trading short-term investments

336,997

334,707

330,181

323,470

Total short-term investments

$
628,765

$
626,537

$
497,230

$
490,566

~~The following table summarizes the estimated fair value of fixed rate securities designated as available-for-sale classified by the contractual maturity date of the security as of July 4,~~ 2015.

(Thousands of dollars)

2015

Due within one year

$
980

Due after one year through three years

9,841

Due after three years

12,542

Total fixed rate securities

$
23,363



	April 2, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
(Millions of dollars)	Cost		Value		Cost		Value
Money market funds	$	133	$	133	$	81	$	81
Total available-for-sale short-term investments		133		133		81		81
Domestic equity securities		466		469		475		466
Domestic debt securities		351		351		452		450
Foreign equity securities		119		114		120		120
High yield debt securities		94		93		108		104
Money market funds held in trading accounts		17		17		22		22
Collateralized loan obligation		10		8		10		10
Other trading securities		—		—		1		1
Total trading short-term investments		1,057		1,052		1,188		1,173
Total short-term investments	$	1,190	$	1,185	$	1,269	$	1,254

Seaboard had $76 million of equity securities denominated in foreign currencies at April 2, 2016, with $25 million in euros, $17 million in Japanese yen, $14 million in British pounds, $6 million in Swiss francs and the remaining $14 million in various other currencies. At December 31, 2015, Seaboard had $80 million of equity securities denominated in foreign currencies, with $25 million in euros, $20 million in Japanese yen, $15 million in British pounds, $7 million in Swiss francs and the remaining $13 million in various other currencies. Also, money market funds included $2 million and $3 million denominated in various foreign currencies at April 2, 2016, and December 31, 2015, respectively.

In addition to its short-term investments, Seaboard also has trading securities related to Seaboard’s deferred compensation plans classified in other current assets in the Condensed Consolidated Balance Sheets. See Note 5 to the Condensed Consolidated Financial Statements for information on the types of trading securities held related to the deferred compensation plans.

Note 3 —– Inventories

The following is a summary of inventories at ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014:~~2015:

	July 4,			December 31,
(Thousands of dollars)	2015			2014

							April 2,		December 31,
(Millions of dollars)							2016		2015
At lower of LIFO cost or market:
Live hogs and materials	$	212,405		$	208,641		$	231	$	210
Fresh pork and materials	27,140			28,573				32		26
	239,545			237,214				263		236
LIFO adjustment	(30,992		)	(36,560		)		(27)		(28)
Total inventories at lower of LIFO cost or market	208,553			200,654				236		208
At lower of FIFO cost or market:
Grains, oilseeds and other commodities	266,388			320,066				281		330
Sugar produced and in process	51,069			48,863				34		52
Other	59,785			57,344				53		61
Total inventories at lower of FIFO cost or market	377,242			426,273				368		443
Grain, flour and feed at lower of weighted average cost or market	79,175			109,375				90		88
Total inventories	$	664,970		$	736,302		$	694	$	739

Note 4 —– Income Taxes

Seaboard’s tax returns are regularly audited by federal, state and foreign tax authorities, which may result in material adjustments. Seaboard’s U.S. federal income tax ~~years’~~years are closed through ~~2010.~~2011. Seaboard has been notified of the IRS’ intent to examine its 2013 U.S. income tax return. There have not been any material changes in unrecognized income tax benefits since December 31, ~~2014.~~2015. Interest and penalties related to unrecognized tax benefits ~~and penalties was~~were not material for the ~~six~~three months ended ~~July 4, 2015.~~April 2, 2016.

Note 5 —– Derivatives and Fair Value of Financial Instruments

~~U.S.~~ GAAP discusses valuation techniques, such as the market approach (prices and other relevant information generated by market conditions involving identical or comparable assets or liabilities), the income approach (techniques to convert future amounts to single present amounts based on market expectations including present value techniques and option-pricing), and the cost approach (amount that would be required to replace the service capacity of an asset, which is often referred to as replacement cost). ~~U.S. GAAP~~Seaboard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad ~~levels. The following is a brief description of those three~~ levels:

Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities that ~~the Company~~Seaboard has the ability to access at the measurement date.

Level 2:Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3:Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table shows assets and liabilities measured at fair value on a recurring basis as of ~~July 4, 2015~~April 2, 2016 and also the level within the fair value hierarchy used to measure each category of assets and liabilities. Seaboard uses the end of the reporting period to determine if there were any transfers between levels. There were no transfers between levels that occurred in the first ~~six~~three months of ~~2015.~~2016. The trading securities classified as other current assets below are assets held for Seaboard’s deferred compensation plans.

	Balance
	July 4,
(Thousands of dollars)	2015		Level 1		Level 2		Level 3
									Balance
									April 2,
(Millions of dollars)									2016		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities - short-term investments:
Available-for-sale securities – short-term investments:
Money market funds	$	266,106	$	266,106	$	-	$	-	$	133	$	133	$	—	$	—
Corporate bonds	12,538		-		12,538		-
U.S. Government agency securities	9,480		-		9,480		-
Other available-for-sale investments	3,706		-		3,706		-
Trading securities - short-term investments:
High yield trading debt securities	159,798		-		159,798		-
Equity mutual fund	84,557		84,557		-		-
Domestic equity ETF	61,914		61,914		-		-
Trading securities – short term investments:
Domestic equity securities										469		469		—		—
Domestic debt securities										351		351		—		—
Foreign equity securities										114		114		—		—
High yield debt securities										93		—		93		—
Money market funds held in trading accounts	23,618		23,618		-		-			17		17		—		—
Other trading investments	4,820		2,453		2,367		-
Trading securities - other current assets:
Collateralized loan obligation										8		—		8		—
Trading securities – other current assets:
Domestic equity securities	36,294		36,294		-		-			29		29		—		—
Foreign equity securities	7,010		7,010		-		-			4		4		—		—
Fixed income mutual funds	3,587		3,587		-		-			3		3		—		—
Other	2,919		2,520		399		-			2		2		—		—
Derivatives:
Derivatives
Commodities(1)	20,737		20,737		-		-			5		5		—		—
Interest rate swaps	1,368		-		1,368		-
Foreign currencies	2,285		-		2,285		-			2		—		2		—
Total Assets	$	700,737	$	508,796	$	191,941	$	-	$	1,230	$	1,127	$	103	$	—
Liabilities:
Derivatives:
Commodities(1)	$	11,530	$	11,530	$	-	$	-	$	8	$	8	$	—	$	—
Interest rate swaps	5,348		-		5,348		-			7		—		7		—
Foreign currencies	1,606		-		1,606		-			14		—		14		—
Total Liabilities	$	18,484	$	11,530	$	6,954	$	-	$	29	$	8	$	21	$	—

~~(1)~~ 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 July 4, 2015, the commodity derivatives had a margin account balance of $10,168,000 resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $19,852,000 and a net other current liability of $477,000.

⁽¹⁾

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 April 2, 2016, the commodity derivatives had a margin account balance of $23 million resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $19 million.

The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2014~~2015 and also the level within the fair value hierarchy used to measure each category of assets.

	Balance
	December 31,
(Thousands of dollars)	2014		Level 1		Level 2		Level 3
									Balance
									December 31,
(Millions of dollars)									2015		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities - short-term investments:
Available-for-sale securities – short-term investments:
Money market funds	$	142,432	$	142,432	$	-	$	-	$	81	$	81	$	—	$	—
Corporate bonds	11,015		-		11,015		-
U.S. Government agency securities	9,666		-		9,666		-
Other available-for-sale investments	3,983		-		3,983		-
Trading securities - short term investments:
High yield trading debt securities	181,483		-		181,483		-
Equity mutual fund	82,542		82,542		-		-
Domestic equity ETF	32,651		32,651		-		-
Trading securities – short term investments:
Domestic equity securities										466		466		—		—
Domestic debt securities										450		450		—		—
Foreign equity securities										120		120		—		—
High yield debt securities										104		—		104		—
Money market funds held in trading accounts	21,401		21,401		-		-			22		22		—		—
Other trading investments	5,393		2,614		2,779		-
Trading securities - other current assets:
Collateralized loan obligation										10		—		10		—
Other trading securities										1		—		1		—
Trading securities – other current assets:
Domestic equity securities	33,857		33,857		-		-			31		31		—		—
Foreign equity securities	6,532		6,532		-		-			5		5		—		—
Fixed income mutual funds	4,570		4,570		-		-			4		4		—		—
Other	2,676		2,405		271		-			3		2		1		—
Derivatives:
Derivatives
Commodities(1)	6,136		6,136		-		-			4		4		—		—
Foreign currencies	1,675		-		1,675		-			8		—		8		—
Total Assets	$	546,012	$	335,140	$	210,872	$	-	$	1,309	$	1,185	$	124	$	—
Liabilities:
Derivatives:
Commodities(1)	$	1,779	$	1,779	$	-	$	-	$	18	$	18	$	—	$	—
Interest rate swaps	7,715		-		7,715		-			6		—		6		—
Foreign currencies	407		-		407		-
Total Liabilities	$	9,901	$	1,779	$	8,122	$	-	$	24	$	18	$	6	$	—

~~(1)~~ 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 December 31, 2014, the commodity derivatives had a margin account balance of $4,314,000 resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $9,267,000 and a net other current liability of $596,000.

⁽¹⁾

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 December 31, 2015, the commodity derivatives had a margin account balance of $29 million resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $15 million.

Financial instruments consisting of cash and cash equivalents, net receivables, notes payable, and accounts payable are carried at cost, which approximates fair value as a result of the short-term nature of the instruments. The amortized cost and estimated fair values of investments at ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014~~2015 are presented in Note 2.2 to the Condensed Consolidated Financial Statements. The fair value of long-term debt is estimated by comparing interest rates for debt with similar terms and maturities. As Seaboard’s debt was issued during late 2015 and is variable-rate, carrying amount approximates fair value. If Seaboard’s debt was measured at fair value on its Condensed Consolidated Balance Sheets, it would have been classified as level 2 in the fair value hierarchy.

While management believes its derivatives are primarily economic hedges of its firm purchase and sales contracts or anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these types of transactions as hedges for accounting purposes. Since the derivatives discussed below are not accounted for as hedges, fluctuations in the related commodity prices, foreign currency exchange rates and interest rates could have a material impact on earnings in any given period. Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. The nature of Seaboard’s market risk exposure has not changed materially since December 31, ~~2014.~~2015.

Commodity Instruments

Seaboard uses various derivative futures and options to manage its risk to price fluctuations for raw materials and other inventories, finished product sales and firm sales commitments. At ~~July 4,~~April 2, 2016, Seaboard had open net derivative contracts to purchase 18 million bushels of grain and open net derivative contracts to sell 105 million pounds of hogs and 2 million gallons of heating oil. At December 31, 2015, Seaboard had open net derivative contracts to purchase ~~32,400,000~~25 million pounds of hogs, ~~17,087,000~~22 million bushels of grain, ~~3,240,000~~and 3 million pounds of ~~soybean oil, 312,000 tons of soybean meal and 220,000 pounds of dry whey powder~~sugar and open net derivative contracts to sell ~~1,722,000~~8 million pounds of ~~sugar. At December 31, 2014, Seaboard had open net derivative contracts to purchase 19,800,000 pounds of hogs, 19,620,000 pounds of~~ soybean ~~oil, 15,551,000 pounds of sugar, 10,697,000 bushels of grain, 88,000 pounds of dry whey powder and 85,000 tons of soybean meal and open net derivative contracts to sell 4,326,000 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. Foreign currency exchange agreements that are primarily related to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of cost of sales in the Condensed Consolidated Statements of Comprehensive Income. Foreign currency exchange agreements that are not related to an underlying commodity transaction are recorded at fair value with changes in value marked-to-market as a component of foreign currency gains (losses), net in the Condensed Consolidated Statements of Comprehensive Income.

At ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014,~~2015, Seaboard had trading foreign currency exchange agreements to cover a portion of its firm sales and purchase commitments and related trade receivables and payables with net notional amounts of ~~$45,737,000~~$162 million and ~~$143,961,000,~~$94 million, respectively, primarily related to the South African rand.

Interest Rate Exchange Agreements

During 2014 and 2015, Seaboard ~~initially put~~entered into ~~place~~ four, approximately eight-year interest rate exchange agreements with mandatory early termination dates, in the second half of 2014 and early 2015 for one of the agreements. During 2014 and 2015, these interest rate exchange agreements were terminated and replaced, each with a mandatory early termination date, which ~~coincides~~coincided with the ~~revised~~ anticipated delivery dates in 2015 and 2016 of dry bulk vessels to be ~~leased, and have similar terms as the original~~leased. These agreements terminated. In June 2015, one agreement was terminated and not renewed with the delivery of a bulk vessel now leased. Payments made by Seaboard to unwind these agreements were not material. These exchange agreements involveinvolved the exchange of fixed-rate and variable-rate interest payments without the exchange of the underlying notional amounts to mitigate the potential effects of fluctuations in interest rates on the anticipated ~~four~~ dry bulk vessel ~~leases in 2015. Seaboard pays~~leases. As of December 31, 2015, two agreements remained, each with a ~~fixed rate~~$22 million notional amount outstanding. In the first quarter of 2016, these agreements were terminated and ~~receives a variable rate~~not renewed with the delivery of ~~interest on~~the final two bulk vessels. Payments to unwind these ~~three notional amounts outstanding of $22,000,000 each. In~~agreements were $2 million.

During 2010, Seaboard entered into three ten-year interest rate exchange agreements ~~which~~to mitigate the effects of fluctuations in interest rates on variable-rate debt. These agreements involve the exchange of fixed-rate and variable-rate interest payments over the life of the agreements without the exchange of the underlying notional ~~amounts, to mitigate the effects of fluctuations in interest rates on variable rate debt.~~amounts. Seaboard pays a fixed rate and receives a variable rate of interest on ~~these three~~the notional amounts of ~~$25,000,000~~$25 million each. ~~All~~

At April 2, 2016 and December 31, 2015, Seaboard had three and five interest rate exchange agreements outstanding, respectively, with a total notional value of $75 million and $119 million, respectively. None of Seaboard’s outstanding interest rate exchange agreements ~~do not~~ qualify as hedges for accounting purposes. Accordingly, the changes in fair value of these agreements are recorded in miscellaneous, net in the Condensed Consolidated Statements of Comprehensive Income. At July 4, 2015 and December 31, 2014, Seaboard had six and seven interest rate exchange agreements outstanding, respectively, with a total notional value of $141,000,000 and $163,000,000, respectively.

Counterparty Credit Risk

From time to time Seaboard is subject to counterparty credit risk related to its foreign currency exchange agreements and interest rate swaps should the counterparties fail to perform according to the terms of the contracts. As of ~~July 4, 2015,~~April 2, 2016, Seaboard ~~has~~had a maximum amount of loss due to credit risk in the amount of ~~$2,285,000~~$2 million with ~~five~~three counterparties related to foreign currency exchange agreements and ~~$1,368,000 with one~~no counterparty credit risk related to the interest rate swaps. Seaboard does not hold any collateral related to these agreements.

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 for the three ~~and six~~ months ended ~~July~~April 2, 2016 and April 4, ~~2015 and June 28, 2014.~~2015.



		Three Months Ended
		April 2,		April 4,
(Millions of dollars)		2016		2015
Commodities	Cost of sales	$	—	$	(6)
Foreign currencies	Cost of sales		(12)		(1)
Foreign currencies	Foreign currency		—		2
Interest rate	Miscellaneous, net		(3)		(5)

(Thousands of dollars)

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

2015

2014

2015

2014

Commodities

Cost of sales

$
3,886

$
9,962

$
(2,062)

$
3,378

Foreign currencies

Cost of sales

1,915

2,328

1,421

2,813

Foreign currencies

Foreign currency

69

(1,185)

1,602

(420)

Interest rate

Miscellaneous, net

3,568

(3,293)

(1,123)

(3,895)

The following table provides the fair value of each type of derivative held as of ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014~~2015 and where each derivative is included in the Condensed Consolidated Balance Sheets.

(Thousands of dollars)		Asset Derivatives			Liability Derivatives
		July 4,	December 31,		July 4,	December 31,
		2015	2014		2015	2014
								Asset Derivatives					Liability Derivatives
								April 2,		December 31,			April 2,		December 31,
(Millions of dollars)								2016		2015			2016		2015
Commodities(1)	Other current assets	$20,737	$ 6,136	Other current liabilities	$ 11,530	$ 1,779	Other current assets	$	5	$	4	Other current liabilities	$	8	$	18
Foreign currencies	Other current assets	2,285	1,675	Other current liabilities	1,606	407	Other current assets		2		8	Other current liabilities		14		—
Interest rate	Other current assets	1,368	-	Other current liabilities	5,348	7,715	Other current assets		—		—	Other current liabilities		7		6

~~(1)~~ 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 July 4, 2015 and December 31, 2014, the commodity derivatives had a margin account balance of $10,168,000 and $4,314,000, respectively, resulting in a net other current asset in the Condensed Consolidated Balance Sheets of $19,852,000 and $9,267,000, respectively and a net other current liability of $477,000 and $596,000, respectively.

⁽¹⁾

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 April 2, 2016 and December 31, 2015, the commodity derivatives had a margin account balance of $23 million and $29 million, respectively, resulting in a net other current asset in the Condensed Consolidated Balance Sheets of $19 million and $15 million, respectively.

Note 6 – Employee Benefits

Seaboard maintains two defined benefit pension plans for its domestic salaried and clerical employees. At this time, no contributions are expected to be made to these plans ~~for the remainder of 2015.~~in 2016. 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 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
(Thousands of dollars)	July 4, 2015		June 28, 2014		July 4, 2015		June 28, 2014

									Three Months Ended
									April 2,		April 4,
(Millions of dollars)									2016		2015
Components of net periodic benefit cost:
Service cost	$	2,495	$	2,004	$	4,942	$	3,860	$	2	$	2
Interest cost	2,587		2,418		5,137		4,821			3		3
Expected return on plan assets	(2,173)		(2,179)		(4,288)		(4,364)			(2)		(2)
Amortization and other	1,377		581		2,126		1,051			1		1
Net periodic benefit cost	$	4,286	$	2,824	$	7,917	$	5,368	$	4	$	4

Note 7 – Notes Payable, Long-term Debt, Commitments and Contingencies

Notes Payable

All of the notes payable outstanding at April 2, 2016 related to foreign subsidiaries, with $66 million denominated in South African rand, $32 million denominated in Argentine pesos and $20 million denominated in Zambian kwacha. The weighted average interest rate for outstanding notes payable was 13.17% and 11.74% at April 2, 2016 and December 31, 2015, respectively. As of April 2, 2016, Seaboard had uncommitted bank lines totaling $371 million, of which $321 million of the uncommitted lines related to foreign subsidiaries. Seaboard’s borrowing capacity was reduced by $146 million outstanding under the uncommitted lines and letters of credit totaling $3 million. The notes payable under the credit lines are unsecured and do not require compensating balances.

~~Contingencies~~Long-term Debt

The following is a summary of long-term debt:



		April 2,		December 31,
(Millions of dollars)		2016		2015
Term Loan due 2022	$	500	$	500
Foreign subsidiary obligations due 2020 through 2023		15		23
Total long-term debt at face value		515		523
Current maturities of long-term debt and unamortized discount		(9)		(5)
Long-term debt, less current maturities and unamortized discount	$	506	$	518

Foreign currency exchange rate fluctuations accounted for $8 million of the decrease in the total long-term debt from December 31, 2015 to April 2, 2016. The interest rate on the Term Loan due 2022 was 2.06% and 1.90% at April 2, 2016 and December 31, 2015, respectively. The weighted average interest rate on Seaboard’s Argentine subsidiary’s loans was 30.25% and 30.23% at April 2, 2016 and December 31, 2015, respectively. Seaboard was in compliance with all restrictive debt covenants relating to these agreements as of April 2, 2016.

Commitments

In 2015, Seaboard’s Pork segment and Triumph Foods, LLC (“Triumph”) entered into a new joint venture, Seaboard Triumph Foods, LLC (“STF LLC”), with equal ownership of 50%. This joint venture is constructing a new pork processing facility in Sioux City, Iowa, which is expected to be completed by mid-2017. Seaboard originally agreed to contribute up to $207 million in connection with the development and operation of the facility; however, in the first quarter of 2016, third-party financing was obtained and the subscription agreement was amended to require $150 million in contributions. As of April 2, 2016, $36 million is expected to be contributed during the remainder of 2016, with $73 million due in 2017. As part of the operations, Seaboard agreed to provide a portion of the hogs to be processed at the facility.

Contingencies

On April 29, 2015, Seaboard received from the Department of Justice, Asset Forfeiture and Money Laundering Section (“AFMLS”), a Grand Jury subpoena issued by the ~~United States~~U.S. District Court for the District of Columbia (the “DC District Court”) requesting records related to 37 specified foreign companies and five individuals. Seaboard has previously produced documents responsive to Grand Jury subpoenas dated September 18, 2014 and October 17, 2014. The subpoena issued September 18, 2014 requested records related to nine entities and one individual, and the subpoena issued October 17, 2014 requested records with respect to eight additional entities and one additional individual. Two additional subpoenas, each dated July 2, 2015, were received by Seaboard requesting records related to a certain customer. The companies and individuals as to which the requested records relate to are not affiliated with Seaboard. The AFMLS attorney conducting the investigation has advised Seaboard that it is not a target of the

investigation. Seaboard has retained outside counsel and is cooperating with the government’s investigation. It is impossible at this stage either to determine the probability of a favorable or unfavorable outcome or to estimate the amount of potential loss, if any, resulting from the government’s inquiry.

On September 19, 2012, the ~~United States~~U.S. Immigration and Customs Enforcement (“ICE”) executed three search warrants authorizing the seizure of certain records from Seaboard’s offices in Merriam, Kansas and at the Seaboard Foods LLC (“("Seaboard ~~Foods”~~Foods") employment office and the human resources department in Guymon, Oklahoma. The warrants generally called for the seizure of employment-related files, certain e-mails and other electronic records relating to Medicaid and Medicaid recipients, certain health care providers in the Guymon area, and Seaboard’s health plan and certain personnel issues. The ~~United States~~U.S. Attorney’s Office for the Western District of Oklahoma (“USAO”), which has been leading the investigation, previously advised Seaboard that it intended to close its investigation and that no charges would be brought against Seaboard. However, discussions continue with the USAO, ~~continue~~ICE and the Oklahoma Attorney General's office regarding the ~~status of the investigation and~~matter, including the possibility of ~~proceedings by the USAO, ICE and/or the Oklahoma Attorney General’s office remains.~~a settlement. No proceedings have been filed or brought as of the date of this report. It is not possible at this time to determine whether ~~any agencies~~a settlement will ~~continue to pursue an investigation~~be reached or whether Seaboard will incur any material fines, penalties or liabilities in connection with this matter.

~~Seaboard’s subsidiary~~On February 16, 2016, Seaboard Foods ~~has a dispute~~received an information request (“Request”) from the U.S. Environmental Protection Agency (“EPA”) seeking information under the Clean Air Act with ~~the United Food & Commercial Workers International Union-industry Pension Fund (“Pension Fund”) regarding pension contributions being made by Seaboard Foods~~regard to ~~a multi-employer pension plan for the benefit of union employees~~various ammonia releases at Seaboard Foods’ ~~Guymon~~ pork processing plant ~~(the “Pension Plan”). Under a Collective Bargaining Agreement (“CBA”)~~in Guymon, Oklahoma. Seaboard has been cooperating with ~~United Food & Commercial Workers Union Local Two (“UCFW”), Seaboard Foods is making contributions~~ the EPA with regard

to the ~~Pension Plan based on hours worked to fund a pension benefit. Effective July 21, 2014, Seaboard Foods~~investigation and ~~UFCW negotiated a renewal of the CBA, which reduced a portion of the pension contributions being made~~has responded to the ~~Pension Plan and implemented a new 401(k) Plan pursuant~~Request. It is not possible at this time to ~~which~~determine whether Seaboard Foods also makes contributions on behalf of the employees. The changes to the pension contributions and the 401(k) Plan became effective January 1, 2015, pursuant to renewal of the CBA. The contributions being made by Seaboard Foods to the 401(k) Plan exceed the reductionwill incur any material fines, penalties or liabilities in ~~contributions being made to the Pension Plan.~~

The dispute involves the Pension Fund’s acceptance of the changes to the contributions to the Pension Plan. Seaboard Foods had previously contacted the Pension Fund advising it of Seaboard Foods’ intent to bargainconnection with the UCFW to make changes to the contributions and also advising the Pension Fund of the negotiated changes before they went into effect. Seaboard Foods believes it received approval of the changes from the Pension Fund. In fact, prior to the changes becoming effective, the Pension Fund sent letters to the employees and to Seaboard Foods giving notice of a reduction in benefit accruals attributable to the changes made to the contributions as negotiated in the CBA. However, on June 17, 2015, Seaboard Foods received a letter from the Pension Fund demanding that Seaboard Foods reinstate, effective January 1, 2015, the contributions being made under the prior CBA or the Pension Fund will consider Seaboard Foods as having fully withdrawn from the Pension Fund effective December 31, 2014. This position by the Pension Fund directly contradicts the Pension Fund’s previous representations and Seaboard Foods believes the Pension Fund cannot legally take this action. If the Pension Fund is successful in effecting the full withdrawal by Seaboard Foods from the Pension Plan, Seaboard Foods would incur a withdrawal liability. The exact amount of this withdrawal liability is dependent of a number of factors and is approximately $11,000,000, paid in quarterly installments over a period not to exceed 20 years. If Seaboard Foods were to reinstate the pension contributions to the levels existing under the prior CBA, and as now demanded by the Pension Fund trustees, it would have to re-open negotiations of the CBA. No amounts have been accrued for the potential withdrawal liability as of July 4, 2015 as Seaboard does not believe such liability is probable as of the date of this filing.

matter.

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 ~~resolutions~~resolution of these items ~~are~~is not expected to have a material adverse effect on the Condensed Consolidated Financial Statements of Seaboard.

Contingent Obligations

Certain of the non-consolidated affiliates and ~~third party~~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 ~~July 4, 2015,~~April 2, 2016, guarantees outstanding to third parties were not material. Seaboard has not accrued a liability for any of the ~~third party~~third-party or affiliate guarantees as management considers the likelihood of loss to be remote.

As See Notes Payable section above for discussion of ~~July 4, 2015, Seaboard’s borrowing capacity under its uncommitted lines was reduced by~~ letters of credit totaling $1,531,000. There were no letters of credit to reduce the committed lines. The notes payable to banks under the committed and uncommitted credit lines are unsecured. These lines of credit do not require compensating balances.credit.

On May 13, 2015 Seaboard, through a wholly-owned subsidiary, agreed to contribute up to $207,400,000 to jointly develop and operate a pork processing facility in Sioux City, Iowa. Approximately $25,700,000 will be contributed in 2015 with the remaining amounts through 2019. As part of the operations, Seaboard agreed to provide hogs to be processed at the facility. Seaboard is currently evaluating its options to provide additional hogs to the facility.

Note 8 – Stockholders’ Equity and Accumulated Other Comprehensive Loss

Seaboard has a share repurchase program in place ~~which~~that was ~~initially~~ approved by its Board of Directors ~~in November 2009,~~ and is in effect through October 31, ~~2015.~~2017. As of ~~July 4, 2015, $50,846,000 remained available for repurchases~~April 2, 2016, the authorized amount of repurchase under the share repurchase ~~program. For the six months ended July 4, 2015,~~program remained at $100 million. Seaboard did not repurchase any shares of common ~~stock. In May 2014, Seaboard commenced a tender offer to repurchase shares. On June 19, 2014 Seaboard completed~~stock during the ~~tender offer, pursuant to which it repurchased 16,738 shares~~first quarter of ~~common stock at a price per share of $2,950, for a total cost of $49,377,000.~~2016. Under this share repurchase program, Seaboard is authorized to repurchase its common stock from time to time in open market or privately negotiated purchases, which may be above or below the traded market price. During the period that the share repurchase program remains in effect, from time to time, Seaboard may enter into a 10b5-1 plan authorizing a third party to make such purchases on behalf of Seaboard. ~~The stock repurchases are being funded by cash on hand, and shares repurchased are being retired and resume the status of authorized and unissued shares.~~ All stock ~~repurchases are being~~repurchased will be made in compliance with applicable legal requirements and ~~the~~funded by cash on hand. The timing of the repurchases and the number of shares repurchased at any given time will depend upon market conditions, compliance with Securities and Exchange Commission regulations, and other factors. The ~~Board’s~~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.

In December 2012, Seaboard declared and paid a dividend of $12.00 per share on ~~the~~ common stock. The increased amount of the dividend (which has historically been $0.75 per share on a quarterly basis or $3.00 per share on an annual basis) represented a prepayment of the annual 2013, 2014, 2015 and 2016 dividends ($3.00 per share per year). Seaboard did not declare or pay a dividend in 2013, 2014, or 2015, and ~~2014. Seaboard~~ does not currently intend to declare any ~~further~~ dividends for ~~the years 2015 and~~ 2016.

The changes in the components of other comprehensive loss (“("OCL”), net of related taxes, are as follows:

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Thousands of dollars)

2015

2014

2015

2014

Foreign currency translation adjustment

$
(8,836)

$
(2,790)

$
(14,794)

$
(29,565)

Investments:

Unrealized gain

11

553

747

568

Amounts reclassified from OCL to net earnings

(14)
(1)
(55)
(1)
(73)
(1)
456
(1)
Unrealized gain (loss) on investments

(3)

498

674

1,024

Unrealized gain (loss) on cash flow hedges

-

(275)

-

86

Pension cost:

Unrealized gain (loss)

(16)

-

283

-

Amounts reclassified from OCL to net earnings

961
(2)
320
(2)
1,944
(2)
640
(2)
Unrecognized pension cost

945

320

2,227

640

Other comprehensive loss, net of tax

$
(7,894)

$
(2,247)

$
(11,893)

$
(27,815)



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Foreign currency translation adjustment	$	(26)	$	(6)
Unrealized gain on investments		—		1
Unrecognized pension cost (1)		1		1
Other comprehensive loss, net of tax	$	(25)	$	(4)

~~(1)~~ ~~This represents realized losses (gains) on the sale of available-for-sale securities and was recorded in other~~

~~investment income (loss), net.~~

~~(2)~~ ~~This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and~~

~~was recorded in operating income. See Note 6 for further discussion.~~

⁽¹⁾

This primarily represents the amortization of actuarial losses that were included in net periodic pension cost and was recorded in operating income. See Note 6 to the Condensed Consolidated Financial Statements for further discussion.

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



	April 2,		December 31,
(Millions of dollars)	2016		2015
Cumulative foreign currency translation adjustment	$	(254)	$	(228)
Unrealized gain on investments		1		1
Unrecognized pension cost		(50)		(51)
Total accumulated other comprehensive loss	$	(303)	$	(278)

July 4,

December 31,

(Thousands of dollars)

2015

2014

Cumulative foreign currency translation adjustment

$ (208,831)

$ (194,037)

Unrealized gain on investments

2,008

1,334

Unrecognized pension cost

(57,707)

(59,934)

Total accumulated other comprehensive loss

$ (264,530)

$ (252,637)

The foreign currency translation adjustment primarily represents the effect of the Argentine peso currency exchange fluctuation on the net assets of the Sugar segment. During the first quarter of 2016, Seaboard recognized $23 million of other comprehensive loss, net of related taxes, related to the devaluation of the Argentine peso. At ~~July 4, 2015,~~April 2, 2016, the Sugar segment had ~~$115,447,000~~$58 million in net assets denominated in Argentine pesos and ~~$22,000~~$2 million in net liabilities denominated in U.S. dollars. Management anticipates that the Argentine peso could continue to weaken against the U.S. dollar and ~~thus it is anticipated~~ that Seaboard could incur additional foreign currency translation adjustment losses in other comprehensive loss during the remainder of ~~2015.~~

2016.

At ~~July~~April 2, 2016 and April 4, 2015, ~~and June 28, 2014,~~ income taxes for cumulative foreign currency translation adjustments were recorded using a 35% effective tax rate except for ~~$66,988,000~~$88 million and ~~$50,353,000,~~$60 million, respectively, related to certain subsidiaries for which no tax benefit was recorded. At ~~July~~April 2, 2016 and April 4, 2015, ~~and June 28, 2014,~~ income taxes for all other components of accumulated other comprehensive loss were recorded using a 39% effective rate except for unrecognized pension cost of ~~$19,471,000~~$18 million and ~~$8,498,000,~~$20 million, respectively, related to employees at certain subsidiaries for which no tax benefit was recorded.

Note 9 -– Segment Information

Seaboard has six reportable segments: Pork, Commodity Trading and Milling (“CT&M”), Marine, Sugar, Power and Turkey, each offering a specific product or service. Below are segment updates from year-end or that impact prior period financial statements.

~~As of September 27, 2014,~~On February 7, 2016, Seaboard’s Pork segment ~~sold~~acquired hog inventory, a ~~50% interest~~feed mill, truck washes and certain hog farms in ~~Daily’s Premium Meats,~~the Central U.S. from Christensen Farms & Feedlots, Inc. and Christensen Farms Midwest, LLC ~~(“Daily’s”)~~for total cash consideration of $148 million. Seaboard had previously agreed to ~~Triumph Foods~~provide a portion of the hogs to be processed at the new pork processing facility being developed through STF LLC, ~~(“Triumph”). Daily’s produces~~as discussed in Note 7 to the Condensed Consolidated Financial Statements. With this purchase, Seaboard will increase its sow herd to meet the majority of such supply commitment for single shift processing at the new plant. Seaboard anticipates buying additional hog inventory and ~~markets raw and pre-cooked bacon, ham and sausage and has two further processing plants located~~related assets during 2016 to fulfill the remaining amount of such hog supply commitment.

The purchase was recorded at fair value in ~~Salt Lake City, Utah and Missoula, Montana. The~~Seaboard’s Pork segment ~~currently has a business relationship with Triumph under which Seaboard markets substantially all~~and the allocation of the ~~pork products produced at Triumph’s plant in St. Joseph, Missouri. Through September 27, 2014, Seaboard consolidated~~preliminary purchase price was as follows:



(Millions of dollars)
Inventories	$	33
Property, plant and equipment		111
Intangible assets		1
Goodwill		3
Total consideration transferred	$	148

Intangible assets include customer relationships that have a weighted-average useful life of 1.6 years. Goodwill represents the ~~operating~~farms’ established processes, workforce and close proximity to the Sioux City, Iowa, processing plant.

Operating results of ~~Daily’s as part~~$20 million in net sales and an immaterial amount of ~~its Pork segment operations. As a result of this transaction, Seaboard deconsolidated Daily’s from its~~net income have been included in Seaboard’s Condensed Consolidated ~~Balance Sheet~~Financial Statements from the date of acquisition for the three months ended April 2, 2016. Acquisition costs were less than $1 million.

The following unaudited pro forma information presents the combined consolidated financial results for Seaboard as if the acquisition had been completed at the beginning of September 27, 2014. Seaboard’s remaining 50% investment in Daily’s is accounted for in the Pork segment by using the equity method of accounting. Both Seaboard and Triumph supply raw product to Daily’s.January 1, 2015.



	Three months ended
	April 2,		April 4,
(Millions of dollars except per share amounts)	2016		2015
Net sales	$	1,335	$	1,489
Net earnings	$	55	$	32
Earnings per common share	$	45.91	$	27.25

The ~~Commodity Trading and Milling~~CT&M segment has a 50% noncontrolling interest in a bakery located in the Democratic Republic of Congo (“DRC”), which began operations in ~~the fourth quarter of~~ 2012. ~~The bakery has been incurring operating losses since it began operations as it continues to resolve equipment problems and attempts to gain market share.~~ As a result of ~~the~~ continuing equipment problems, other production challenges and unfavorable local market conditions causing operating losses and challenges in gaining market share, Seaboard’s management determined achieving improved operating results would take significantly longer than ~~anticipated. As a result, Seaboard’s management~~initially anticipated, and determined there was a decline in value considered ~~other-than-temporary~~other than temporary as of December 31, ~~2014 and thus~~2014. Seaboard recorded a write-down of $11 million in loss from affiliate in the fourth quarter of 2014, which represented the remaining equity investment in this ~~business and suspended the use of the equity method as of December 31, 2014.~~business. There was no tax benefit from this transaction. As part of its original investment, ~~in this bakery,~~ Seaboard has an interest bearing long-term note receivable from this ~~bakery, the terms of which require periodic principal payments,~~affiliate with the first payment due in June 2015 and a ~~final~~ maturity date of December 2020. No ~~payment was~~payments have been received, ~~in June~~ and Seaboard agreed to ~~review future~~temporarily waive this default to allow time to work with the business management and its other owners on revisions to the payment ~~terms. Repayment of this note is primarily dependent upon this business improving existing operations~~schedule to ~~generate adequate future~~better align with the bakery’s forecasted cash ~~flows to make future payments. Seaboard discontinued recognizing interest income on the note receivable during the fourth quarter of 2014.~~flows. As of ~~July 4, 2015,~~April 2, 2016, the recorded balance of this note receivable ~~from affiliate~~ and previous accrued interest was ~~$34,556,000,~~$35 million, all classified as long-term given uncertainty of the timing of payments in the future. On April 11, 2016, Seaboard reached an agreement with the other owners to restructure this note receivable by extending the maturity 18 months to June 1, 2022 and changing the bi-annual payments to monthly payments of varying amounts beginning December 1, 2016. Based on cash flow projections of the bakery and a discounted cash flow analysis based on the terms of the note receivable, Seaboard recognized no impairment as of April 2, 2016. If the future long-term cash flows of this bakery do not improve ~~there is a possibility that~~and forecasted cash flow projections are not met, some of the recorded value of the note receivable from affiliate could be deemed uncollectible in the future, which may result in a material charge to earnings. Including this business, as of ~~July 4, 2015~~April 2, 2016, Seaboard had a total of ~~$57,708,000~~$61 million of investments in, advances to and notes receivable from all of its affiliates in the DRC, which ~~represents~~represent the single largest foreign country risk exposure ~~for~~of Seaboard’s equity method investments. One of the other affiliates in the DRC, to which Seaboard sells wheat, is the only supplier of flour to this bakery.

~~In September 2013,~~ Seaboard ~~invested $17,000,000~~has a 50% noncontrolling equity interest in a flour production business in ~~Brazil for~~Brazil. Since September 2013, Seaboard has contributed a ~~50% noncontrolling equity interest~~total of $50 million in investments and advances, and provided a ~~$13,000,000~~$13 million long-term loan to this business. Half of the interest on this long-term note receivable from affiliate is payable currently in cash and the other half accrues as pay-in-kind interest. This note receivable matures in September 2020 but can be repaid with Seaboard having the option to convert the note receivable to equity and the other equity holders having the option to match such conversion with a purchase of new shares to avoid dilution. ~~In addition, at~~At the time of ~~Seaboard’s~~Seaboard's initial investment in this business, plans included potential future equal additional investments by the owners to improve existing operations and expand operations to improve long-term operating results. Seaboard’s share of additional investments and advances totaled $5,554,000 and $3,886,000 during the six months ended July 4, 2015 and the year ended December 31, 2014, respectively. This business, which has received additional third party loans during 2015, incurred significant operating losses in 2014 and for the first six months of 2015. During the three ~~and six~~ months ended ~~July 4, 2015,~~April 2, 2016, Seaboard’s advances totaled $1 million and Seaboard recorded losses from affiliate of ~~$10,247,000 and $21,913,000, respectively,~~$1 million related to ~~this investment, which included $5,846,000 in~~ the six month period for its proportionate share of a deferred income tax asset allowance related to 2014 and 2013. These recorded losses from affiliate were first used to reduce Seaboard’s investment in the business to zero and then, the remaining equity losses of $7,194,000 were used to write-down its advances and long-term note receivable from affiliate during the second quarter of 2015. Discussions are ongoing between the owners to determine the extent and timing of future additional investments by one or both parties or additional third party loans to fund expansion in an attempt to improve operating results. However, during the second quarter, Seaboard became concerned with disagreementsadvances. Based on discussions with the business’ other business partner as to the necessary support of the business, including the other equity partner’s ability and willingness to fund additional capital contributions. Based on current discussions with our business partner50% shareholder and the executive management of the business, the extent of the losses and revised financial ~~outlook~~forecast of the business economy, the halting of the construction plans for a new plant and the amount of existing ~~third party~~third-party debt, Seaboard previously reserved a total of ~~$27,300,000, Seaboard reserved the remaining portion of the advance and long-term loans of $9,345,000 during the second quarter of 2015 and thus reduced these~~$22 million related to its advances and long-term ~~loans to~~note receivable. Third-party debt was $19 million and $16 million as of April 2, 2016 and December 31, 2015, respectively. In total, Seaboard’s investment in the business, advances and long-term note receivable are zero as of ~~July 4, 2015. This charge was recorded~~April 2, 2016. Seaboard has begun the legal process, as ~~a reduction~~allowed per the Shareholders Agreement, to ~~income from affiliates in~~convert its debt to equity and, if successful, Seaboard would obtain control of the ~~Condensed Consolidated Statements of Comprehensive Income. As of December 31, 2014,~~business and the ~~recorded balance of this note receivable from affiliate was $13,849,000 and Seaboard’s equity investment and advances in this business was $11,669,000.~~entity would become consolidated. However, there is no certainty that Seaboard will successfully be able to obtain control. Seaboard also ~~had~~has a gross receivable due from affiliate related to this business resulting from sales of grain and supplies of ~~$16,480,000~~$23 million and ~~$13,969,000~~$17 million as of ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014,~~2015, respectively, which Seaboard ~~reserved $3,000,000 in the second quarter~~recorded a reserve of $9 million during 2015 based on an analysis of collectability and working capital. It

During the first quarter of 2016, Seaboard’s CT&M segment provided a $12 million loan to a Peruvian affiliate. Interest is ~~possible that additional reserves will be necessary~~payable monthly, and the principal is due on August 31, 2017, with no prepayment penalty.

Also during the ~~remainder~~first quarter of ~~2015.~~

~~In September 2014,~~2016, Seaboard invested ~~$17,333,000~~$7 million of cash and converted its $8 million note receivable to equity for a 36% noncontrolling interest in a ~~cargo~~holding company that owns a controlling interest in two Haitian start-up projects consisting of a marine terminal ~~business in Jamaica for~~operation and a ~~21% noncontrolling interest. This~~free trade zone development, which includes a planned power plant. The investment is accounted for in the Marine segment using the equity method and reported on a three-month ~~lag basis and thus~~lag. Seaboard’s first proportionate share of ~~earnings was~~income (loss) from affiliates will be recognized in the ~~first six months~~second quarter of ~~2015.~~

2016.

The Power segment had been operating a floating power generating facility (72 megawatts) in the Dominican Republic under a short-term lease agreement, but on April 1, 2014, Seaboard provided notice to cancel the lease and ceased operation of the leased facility on September 3, 2014. During the second quarter of 2015, ~~Seaboard~~Seaboard’s Power segment invested an additional ~~$10,000,000~~$10 million in a business operating a 300 megawatt electricity generating facility in the Dominican Republic and changed its method of accounting from a cost method investment ~~at Corporate~~ to an equity method ~~investment~~investment. This change in accounting required Seaboard to present its prior

period financial results to reflect the ~~Power segment. As a result, Seaboard reclassified the $5,910,000 initial investment~~equity method of accounting from ~~Corporate to the Power segment along with $12,691,000 of Seaboard’s interest in this business’ reported net income since~~ the date of ~~its~~the initial ~~investment, which is reflected as an adjustment to retained earnings as~~investment. Seaboard's portion of ~~January 1, 2014.~~

the investee’s loss for the three months ended April 4, 2015 was not material.

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC (“Butterball”). Butterball had total net sales for the three ~~and six~~ months ended ~~July~~April 2, 2016 and April 4, 2015 of ~~$390,739,000~~$385 million and ~~$788,437,000, respectively, compared to total net sales for~~$398 million, respectively. For the three ~~and six~~ months ended ~~June 28, 2014 of $375,668,000~~April 2, 2016 and ~~$731,431,000, respectively.~~April 4, 2015, Butterball had operating income ~~for the three~~of $45 million and ~~six months ended July 4, 2015~~$43 million, respectively, and net income of ~~$51,362,000~~$38 million and ~~$93,959,000, respectively, compared to operating income for the three and six months ended June 28, 2014 of $28,682,000 and $49,430,000,~~$32 million respectively. As of ~~July 4, 2015~~April 2, 2016 and December 31, ~~2014,~~2015, Butterball had total assets of ~~$1,040,435,000~~$1,101 million and ~~$1,021,182,000,~~$1,087 million, respectively.

In ~~conjunction~~connection with ~~Seaboard’s~~its initial investment in Butterball in December 2010, Seaboard ~~has~~provided Butterball with a ~~long-term note receivable from Butterball which had~~$100 million unsecured subordinated loan (the “subordinated loan”) with a ~~balance~~seven-year maturity and interest of ~~$149,691,000 as~~15% per annum, comprised of ~~July 4, 2015. Part of the~~5% payable in cash semi-annually, plus 10% pay-in-kind interest, ~~earned on this note is pay-in-kind interest,~~compounded semi-annually, which accumulates and is paid at ~~maturity~~maturity. Also in connection with providing the subordinated loan, Seaboard received detachable warrants, which upon exercise for a nominal price, would enable Seaboard to acquire an additional 5% equity interest in Butterball. In January 2016, the interest on the subordinated loan was modified to 10% per annum, payable only in cash semi-annually and the warrants were also modified, whereby Seaboard can exercise these warrants at any time after December ~~2017.~~

31, 2018 or prior to December 31, 2025 after which time the warrants expire.

The following tables set forth specific financial information about each segment as reviewed by Seaboard’s management. Operating income for segment reporting is prepared on the same basis as that used for consolidated operating income. Operating income, along with income or losses from affiliates for the ~~Commodity Trading~~CT&M and ~~Milling segment,~~Turkey segments, is used as the measure of evaluating segment performance because management does not consider interest, other investment income and income tax expense on a segment basis.

Sales to External Customers:

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Thousands of dollars)

2015

2014

2015

2014

Pork

$
331,259

$
466,735

$
652,147

$
848,825

Commodity Trading and Milling

778,688

914,114

1,599,276

1,703,504

Marine

241,679

210,960

478,339

411,424

Sugar

45,107

46,986

90,366

97,342

Power

27,510

53,033

52,641

106,881

All Other

3,643

2,763

7,475

6,251

Segment/Consolidated Totals

$
1,427,886

$
1,694,591

$
2,880,244

$
3,174,227

Operating Income (Loss):
	Three Months Ended						Six Months Ended
	July 4,			June 28,			July 4,			June 28,
(Thousands of dollars)	2015			2014			2015			2014
Sales to External Customers:													Three Months Ended
													April 2,		April 4,
(Millions of dollars)													2016		2015
Pork	$	18,537		$	110,213		$	34,933		$	170,690		$	328	$	321
Commodity Trading and Milling	7,380			18,263			11,862			30,193				709		820
Marine	5,451			(3,057		)	12,230			(10,449		)		227		237
Sugar	993			9,654			4,992			16,415				33		45
Power	4,342			6,129			6,976			4,445				17		25
All Other	235			(8		)	343			329				5		4
Segment Totals	36,938			141,194			71,336			211,623
Corporate Items	(5,276		)	(6,855		)	(11,835		)	(12,081		)
Consolidated Totals	$	31,662		$	134,339		$	59,501		$	199,542
Segment/Consolidated Totals													$	1,319	$	1,452



Operating Income (Loss):	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Pork	$	29	$	16
Commodity Trading and Milling		9		4
Marine		3		7
Sugar		—		4
Power		—		3
Segment Totals		41		34
Corporate		(5)		(6)
Consolidated Totals	$	36	$	28

Income (Loss) from Affiliates:

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Thousands of dollars)

2015

2014

2015

2014

Pork

$
3,836

$
-

$
6,489

$
-

Commodity Trading and Milling

(15,947
)
(2,170
)
(25,196
)
(2,205
)
Marine

413

-

1,066

-

Sugar

111

443

527

748

Power

573

317

125

954

Turkey

23,271

9,530

40,025

15,904

Segment/Consolidated Totals

$
12,257

$
8,120

$
23,036

$
15,401

Total Assets:
	July 4,		December 31,
(Thousands of dollars)	2015		2014

Income (Loss) from Affiliates:					Three Months Ended
					April 2,		April 4,
(Millions of dollars)					2016		2015
Pork	$	812,570	$	821,172	$	3	$	2
Commodity Trading and Milling	976,396		1,103,461			(4)		(9)
Marine	301,484		283,276			1		1
Sugar	179,423		198,271			1		—
Power	232,928		219,604			1		—
Turkey	427,404		393,425			20		17
All Other	5,909		5,887
Segment Totals	2,936,114		3,025,096
Corporate Items	802,232		666,662
Consolidated Totals	$	3,738,346	$	3,691,758
Segment/Consolidated Totals					$	22	$	11

Investments in and Advances to Affiliates:

July 4,

December 31,

(Thousands of dollars)

2015

2014

Pork

$
85,105

$
79,832

Commodity Trading and Milling

197,797

178,344

Marine

18,106

17,333

Sugar

3,351

2,994

Power

30,473

20,348

Turkey

270,182

244,560

Segment/Consolidated Totals

$
605,014

$
543,411



Total Assets:	April 2,		December 31,
(Millions of dollars)	2016		2015
Pork	$	1,035	$	858
Commodity Trading and Milling		955		988
Marine		311		296
Sugar		132		202
Power		198		271
Turkey		469		448
All Other		5		6
Segment Totals		3,105		3,069
Corporate		1,291		1,362
Consolidated Totals	$	4,396	$	4,431



Investments in and Advances to Affiliates:	April 2,		December 31,
(Millions of dollars)	2016		2015
Pork	$	134	$	115
Commodity Trading and Milling		214		218
Marine		34		19
Sugar		3		3
Power		35		34
Turkey		302		282
Segment/Consolidated Totals	$	722	$	671

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 for general corporate management oversight costs. Corporate assets include short-term investments, other current assets related to deferred compensation plans, fixed assets, deferred tax amounts and other miscellaneous items. Corporate operating losses represent certain operating costs not specifically allocated to individual segments and include costs related to Seaboard’s deferred compensation ~~programs (which~~plans, which are offset by the effect of the mark-to-market adjustments on these investments recorded in ~~Other Investment Income (Loss)~~other investment income (loss), ~~Net).~~net.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

LIQUIDITY AND CAPITAL RESOURCES

Summary of Sources and Uses of Cash

Cash and short-term investments as of ~~July 4, 2015 increased $179.6~~April 2, 2016 decreased $66 million to ~~$706.6~~$1,238 million from December 31, ~~2014.~~2015. The ~~increase~~decrease was primarily the result of the sale of short-term investments used for the $148 million acquisition of hog inventory and related assets discussed in Note 9 to the Condensed Consolidated Financial Statements and cash used for capital expenditures of $63 million, partially offset by net cash from operating activities of $263.9 million, proceeds from sale of fixed assets of $24.1 million and increases in notes payable of $30.8 million. Partially offsetting the increase was cash used for capital expenditures of $68.0 million, investments in affiliates of $49.8 million and purchase of long-term investments of $22.3$117 million. Cash from operating activities ~~increased $61.0~~decreased $6 million for the ~~six~~three months ended ~~July 4, 2015~~April 2, 2016 compared to the same period in ~~2014,~~2015, primarily as a result of ~~decreases~~changes in ~~accounts receivable and inventory, principally in the Commodity Trading and Milling segment,~~working capital, partially offset by ~~lower~~higher net earnings.

~~Acquisitions,~~ Capital Expenditures, Acquisitions and Other Investing Activities

During the ~~six~~three months ended ~~July 4, 2015,~~April 2, 2016, Seaboard Corporation and its subsidiaries (“Seaboard”) invested ~~$68.0~~$63 million in property, plant and equipment, of which ~~$18.6~~$15 million was ~~expended~~ in the Pork segment, ~~$19.5~~$31 million in the Commodity Trading and Milling segment, ~~and $24.3~~$6 million in the Marine segment and $10 million in the Sugar segment. The Pork segment expenditures were primarily for improvements to existing facilities and related equipment and additional hog finishing barns. Of the Commodity Trading and Milling segment expenditures, ~~$15.5~~$29 million was for the construction of two dry bulk vessels, of which ~~the first was~~both were delivered and then sold and leased back by Seaboard, at ~~its~~ book value of ~~$21.9~~$44 million each during the ~~second quarter.~~first quarter of 2016. The Marine segment expenditures were primarily for purchases of cargo carrying and handling equipment. The Sugar segment expenditures were primarily for milling capacity increase and fermentation and distillery equipment ~~and $7.9 million for the purchase of a containerized cargo vessel.~~upgrades. All other capital expenditures were primarily of a normal recurring nature and primarily included replacements of machinery and equipment, and general facility modernizations and upgrades.

For the remainder of ~~2015,~~2016, management has budgeted capital expenditures totaling ~~$148.0~~$147 million. The Pork segment plans to spend ~~$24.1~~$52 million primarily for improvements to existing facilities and related equipment and additional hog finishing barns. The Commodity Trading and Milling segment plans to spend ~~$60.4~~$29 million primarily for ~~payments of $48.2 million for three dry bulk vessels being built for~~ a ~~total estimated cost of $68.1 million~~new wheat mill in Zambia and other improvements to existing facilities and related equipment. However, Seaboard currently anticipates selling and leasing back these three vessels as they are completed, which would result in Seaboard receiving back the amounts spent to build at each individual lease inception with no gain or loss on sale. Payments under the lease agreements will be finalized upon delivery of the vessels. The three vessels are scheduled for delivery during 2015 and early 2016. The Marine segment has budgeted ~~$35.5~~$42 million primarily for additional cargo carrying and handling equipment. ~~In addition, management will be evaluating whether~~The Sugar segment plans to ~~purchase additional containerized cargo vessels~~spend $23 million primarily for ~~the Marine segment during 2015.~~increasing distillery and milling capacity. The balance of ~~$28.0~~$1 million is planned to be spent in all other businesses primarily for normal upgrades to existing ~~operations and for the expansion of the alcohol distillery in the Sugar segment.~~operations. 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.

~~On May 13, 2015~~During the first quarter of 2016, Seaboard ~~through a wholly-owned subsidiary, agreed to contribute up to $207.4~~contributed $16 million to ~~jointly develop and operate~~its 50% joint venture, Seaboard Triumph Foods, LLC (“STF LLC”), constructing a pork processing facility in Sioux City, Iowa. ~~Approximately $25.7 million is expected~~As the joint venture obtained third-party financing in March 2016, the original subscription agreement was amended to ~~be contributed in 2015 with~~modify the ~~remaining amounts through 2019. As part~~total contribution amount and timing of payments. See the ~~operations,~~Contractual Obligations section below for more information. In addition to capital contributions, Seaboard also agreed to provide a portion of the hogs to be processed at the facility. ~~Seaboard is currently evaluating its options to provide these additional hogs to~~In February 2016, the ~~facility.~~

~~In March 2015, Seaboard invested $10.0 million in an oilseed crushing business~~Pork Segment acquired hog inventory and related assets in the ~~Republic of Turkey~~Central United States (“U.S.”) for a ~~25% noncontrolling interest. This investment will be accounted~~purchase price of $148 million. These assets are expected to increase Seaboard’s hog production capacity to meet the majority of such hog supply commitment for ~~using~~single shift processing at the ~~equity method.~~

In the second quarter of 2015, Seaboard invested $10.0 million in a business operating a 300 megawatt electricity generating facility in the Dominican Republic, increasing Seaboard’s ownership interest to 29.9%.new plant. See Note 19 to the Condensed Consolidated Financial Statements for further ~~discussion.~~discussion of this acquisition. Seaboard anticipates buying additional hog inventory and related assets during 2016 to fulfill the remaining amount of such hog supply commitment.

Also during the first quarter of 2016, Seaboard invested $7 million of cash and converted its $8 million note receivable to equity for a 36% noncontrolling interest in a holding company that owns a controlling interest in two Haitian start-up projects consisting of a marine terminal operation and a free trade zone development, which includes a planned power plant. The investment is accounted for in the Marine segment using the equity method and reported on a three-month lag. Seaboard’s first proportionate share of income (loss) from affiliates will be recognized in the second quarter of 2015, Seaboard invested $8.0 million in a flour milling business in Botswana for a 49% noncontrolling interest and $10.3 million, which had previously been held in escrow, for a 45% noncontrolling interest in a commodity trading and flour milling business in Uruguay. These investments will be accounted for using the equity method. In the second quarter of 2015, Seaboard also invested $18.2 million for an 11.96% noncontrolling interest in a grain trading and poultry business in Morocco which will be accounted for using the cost method.2016.

During the second quarter of 2015, Seaboard provided an additional $4.0 million short-term loan to a port project in Haiti consisting primarily of a marine terminal operation, electric power generating plant and free trade zone development. This loan, which totals $8.0 million, is convertible into equity by Seaboard once certain business operating conditions are met in Haiti. Seaboard does anticipate these conditions being met by the end of 2015, at which time it will convert the loan to equity and invest an additional $7.0 million for a total minority equity investment of less than 25%.

Financing Activities and Debt

As of ~~July 4, 2015,~~April 2, 2016, Seaboard had a short-term ~~$50.0 million committed line of credit, a long-term $200.0 million committed line of credit and~~ uncommitted ~~lines totaling $262.6 million. As of July 4, 2015, there were no borrowings outstanding under the committed~~ lines of credit ~~and borrowings~~totaling $371 million. Borrowings under the uncommitted lines of credit totaled ~~$103.3~~$146 million, with all such borrowings related to foreign subsidiaries. Seaboard’s borrowing capacity under its uncommitted lines was further reduced by letters of credit totaling ~~$1.5~~$3 million.

On December 4, 2015, Seaboard’s wholly-owned subsidiary, Seaboard Foods LLC, obtained a $500 million unsecured term loan with a maturity date of December 4, 2022. Also in 2015, Seaboard’s Argentine subsidiary obtained long-term debt financing of $23 million, comprised of five loans denominated in Argentine pesos. All of the debt is guaranteed by Seaboard, except for $3 million secured by property, plant and equipment. See Note 7 to the Condensed Consolidated Financial Statements for current balances and for a summary of Seaboard’s contingent obligations, including guarantees issued to support certain activities of non-consolidated affiliates or third parties who provide services for Seaboard.

As of ~~July 4, 2015,~~April 2, 2016, Seaboard had cash and short-term investments of ~~$706.6~~$1,238 million and additional total net working capital of ~~$684.8 million and a $200.0 million long-term committed line of credit maturing on February 20, 2018.~~$525 million. Accordingly, 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 or business segments for ~~2015.~~2016. 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.

As of ~~July 4, 2015, $269.4~~April 2, 2016, $341 million of the ~~$706.6~~$1,238 million of cash and short-term investments were held by Seaboard’s foreign subsidiaries, and Seaboard could be required to accrue and pay taxes to repatriate these funds if needed for Seaboard’s operations in the U.S. However, Seaboard’s intent is to permanently reinvest these funds outside the U.S. and current plans do not demonstrate a need to repatriate them to fund Seaboard’s U.S. operations.

~~For~~Contractual Obligations

In the ~~six months ended June 28, 2014, Seaboard used cash~~first quarter of 2016, STF LLC obtained third-party financing, and as a result the original subscription agreement was amended to ~~repurchase 18,405 shares~~modify Seaboard’s total contribution amount and timing of ~~common stock at a~~payments. Seaboard’s total ~~price~~contribution was reduced from $207 million to $150 million, with $36 million due during the remainder of ~~$53.8 million. See Note 8~~2016 and $73 million due in 2017. Construction of the pork processing facility is expected to ~~the Condensed Consolidated Financial Statements for further discussion of this item.~~be completed by mid-2017.

See Note 7 to the Condensed Consolidated Financial Statements for a summary of Seaboard’s contingent obligations, including guarantees issued to support certain activities of non-consolidated affiliates or third parties who provide services for Seaboard.

RESULTS OF OPERATIONS

Net sales decreased $133 million for the three ~~and six~~ month ~~periods~~period of ~~2015 decreased by $266.7 million and $294.0 million, respectively, over~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~decrease was primarily ~~reflected~~ the ~~deconsolidation~~result of ~~Daily’s and lower prices for pork products sold in the Pork segment as discussed below,~~ lower sales prices ~~for various commodities for~~and the mix of products sold in the Commodity Trading and Milling segment, lower cargo rates in the Marine segment, lower prices of sugar and alcohol sold in the Sugar segment, and lower ~~sales volume for~~spot market rates in the Power ~~segment. The decreases were partially offset by higher cargo volumes for the Marine~~ segment.

Operating income ~~decreased by $102.7 million and $140.0~~increased $8 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~increase primarily reflected ~~lower prices~~higher sales volumes for pork products ~~sold.~~and market hogs in the Pork segment and higher margins on commodity trades to third parties in the Commodity Trading and Milling segment. The increase was partially offset by lower cargo rates in the Marine segment and higher production costs in the Sugar segment.

Pork Segment

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Net sales

$
331.3

$
466.7

$
652.1

$
848.8

Operating income

$
18.5

$
110.2

$
34.9

$
170.7

Income from affiliates

$
3.8

$
-

$
6.5

$
-



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Net sales	$	328	$	321
Operating income	$	29	$	16
Income from affiliates	$	3	$	2

Net sales for the Pork segment ~~decreased $135.4 million and $196.7~~increased $7 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases were~~increase was primarily the result of higher sales of market hogs related to the ~~deconsolidation of Daily’s,~~recent acquisition as discussed ~~below and~~in Note 9 to the Condensed Consolidated Financial Statements, partially offset by lower prices for pork products sold. ~~The decreases were partially offset by an increase in related sales volume.~~

Operating income for the Pork segment ~~decreased $91.7 million and $135.8~~increased $13 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases were~~increase was primarily the result of ~~lower prices for~~

~~pork products and to a lesser degree, the deconsolidation of Daily’s as discussed below. Partially offsetting the decreases were~~ lower feed costs for hogs internally grown, ~~and~~partially offset by lower ~~costs~~prices for ~~third party hogs.~~pork products sold.

Management is unable to predict future market prices for pork products, the cost of feed or cost of ~~third party~~third-party hogs. ~~In addition, the Federal blender’s credit for biodiesel expired December 31, 2014.~~ However, management anticipates positive operating income for this segment for the remainder of ~~2015, although significantly lower than 2014.~~2016.

Income from affiliates is primarily from Seaboard’s 50% proportionate share of earnings from Daily’s accounted for using the equity method as discussed in Note 9 to the Condensed Consolidated Financial Statements. Seaboard’s first proportionate share of earnings for Daily’s was recognized in the fourth quarter of 2014.

Commodity Trading and Milling Segment

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Net sales

$
778.7

$
914.1

$
1,599.3

$
1,703.5

Operating income as reported

$
7.4

$
18.3

$
11.9

$
30.2

Less mark-to-market adjustments

(1.3
)

(6.9
)

(6.1
)

(4.6)

Operating income excluding mark-to-market adjustments

$
6.1

$
11.4

$
5.8

$
25.6

Loss from affiliates

$
(15.9
)

$
(2.2
)

$
(25.2
)

$
(2.2)



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Net sales	$	709	$	820
Operating income as reported	$	9	$	4
Mark-to-market adjustments		5		(4)
Operating income excluding mark-to-market adjustments	$	14	$	—
Loss from affiliates	$	(4)	$	(9)

Net sales for the Commodity Trading and Milling segment decreased ~~$135.4 million and $104.2~~$111 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~decrease primarily reflected lower sales prices ~~for various commodities,~~and the mix of products sold, partially offset by higher ~~sales volume to third parties, principally for wheat and~~volumes in corn, soybean meal ~~for the six month period.~~and wheat.

Operating income for this segment ~~decreased $10.9 million and $18.3~~increased $5 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~increase primarily reflected ~~certain unfavorable market conditions, which resulted in lower~~higher margins on commodity trades to third ~~parties, especially wheat, an~~parties. The increase ~~in bad debt expense and for the three months~~also reflected fluctuations of ~~2015, a fluctuation of $5.6~~$9 million of ~~marking to market~~mark-to-market derivative contracts as discussed below. Excluding the effects of mark-to-market adjustments for derivatives contracts, ~~as discussed below,~~ operating income ~~decreased $5.3 million and $19.8 million, for the three and six month periods, respectively.~~increased $14 million.

Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which Seaboard operates, and the current volatility in the commodity markets, management is unable to predict future sales and operating results for this segment. However, management anticipates positive operating income for this segment for the remainder of ~~2015,~~2016, excluding the effects of marking to market derivative contracts.

Had Seaboard not applied mark-to-market accounting to its derivative instruments, operating income for this segment would have been higher by $5 million and lower by ~~$1.3~~$4 million ~~and $6.1 million, respectively,~~ for the three ~~and six~~ month periods of 2016 and 2015, ~~and would have been lower by $6.9 million and $4.6 million, respectively, for the three and six month periods of 2014.~~respectively. While management believes its commodity futures, ~~and~~ options and foreign exchange contracts are primarily economic hedges of its firm purchase and sales contracts or anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these ~~types of~~ transactions as hedges for accounting purposes. Accordingly, while the changes in value of the derivative instruments were marked-to-market, the changes in value of the firm purchase or sales contracts were ~~not, other than the recognition of certain loss contracts.~~not. As products are delivered to customers, these existing mark-to-market adjustments should be primarily offset by realized margins or losses as revenue is recognized over time and, ~~thus,~~ these mark-to-market adjustments could reverse in fiscal ~~2015.~~2016. Management believes eliminating these mark-to-market adjustments ~~as noted in the table above,~~ provides a more reasonable presentation to compare and evaluate period-to-period financial results for this segment.

Loss from affiliates for the three and six month periods of 2015 increased by $13.7 million and $23.0 million, respectively, from the same periods in 2014. The increases primarily reflected operating and currency losses and the write-off of notes receivable from an affiliate in Brazil of $19.6 million and $31.3 million for the three and six months periods, respectively. Based on the uncertainty of local political and economic environments in the countries in which Seaboard’s affiliates operate, management cannot predict future results. However, management anticipates continuing losses from its affiliate in Brazil for the remainder of 2015. See Note 9 to the Condensed Consolidated Financial Statements for further discussion of this affiliate.

Marine Segment



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Net sales	$	227	$	237
Operating income	$	3	$	7
Income from affiliates	$	1	$	1

~~Marine Segment~~

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Net sales

$
241.7

$
211.0

$
478.3

$
411.4

Operating income (loss)

$
5.5

$
(3.1
)
$
12.2

$
(10.4
)
Income from affiliate

$
0.4

$
-

$
1.1

$
-

Net sales for the Marine segment ~~increased $30.7 million and $66.9~~decreased $10 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~increases were~~decrease was primarily the result of ~~higher cargo volumes, partially offset by~~ lower cargo rates in certain markets during ~~2015~~2016 compared to ~~2014.~~2015.

Operating income ~~increased $8.6 million and $22.6~~decreased $4 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~increases were~~decrease was primarily the result of lower cargo rates, partially offset by lower voyage costs, principally fuel costs on a per unit shipped ~~basis, partially offset by lower cargo rates.~~basis. Management cannot predict changes in future cargo volumes, cargo rates and fuel costs, or to what extent changes in economic conditions in markets served will affect net sales or operating income during the remainder of ~~2015.~~2016. However, ~~based on recent improved market conditions,~~ management anticipates this segment will have positive operating income for the remainder of ~~2015.~~2016.

Income from affiliate represents an investment in a cargo terminal business in Jamaica accounted for using the equity method as discussed in Note 9 to the Condensed Consolidated Financial Statements. Seaboard’s first proportionate share of earnings for this investment was recognized in the first quarter of 2015.

Sugar Segment

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Net sales

$
45.1

$
47.0

$
90.4

$
97.3

Operating income

$
1.0

$
9.7

$
5.0

$
16.4

Income from affiliates

$
0.1

$
0.4

$
0.5

$
0.7



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Net sales	$	33	$	45
Operating income	$	—	$	4
Income from affiliates	$	1	$	—

Net sales for the Sugar segment decreased ~~$1.9 million and $6.9~~$12 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~decrease primarily reflected lower ~~volumes of~~prices for sugar and alcohol ~~sold partially offset by higher sale prices for both.~~sold. Sugar and alcohol sales are denominated in Argentine pesos, and ~~the~~an increase in local sale prices in terms of U.S. dollars ~~was somewhat negatively impacted~~were principally offset by exchange rate changes as the Argentine peso continued to weaken against the U.S. ~~dollar in 2015.~~dollar. Management cannot predict ~~sale~~local sugar and alcohol prices for the remainder of ~~2015,~~2016, but management anticipates that the Argentine peso ~~may~~will continue to weaken against the U.S. dollar. See Note 8 to the Condensed Consolidated Financial Statements for discussion of this devaluation’s impact on stockholders’ equity in the first quarter of 2016.

Operating income decreased ~~$8.7 million and $11.4~~$4 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~decreases~~decrease primarily reflected ~~lower income as a result of lower volumes of sugar and alcohol sold, while increased sale prices of sugar were offset by~~ higher production ~~costs. The decreases~~costs for sugar, alcohol and cogeneration. To a lesser extent, the decrease in operating income ~~were also the result of higher~~was partially offset by a reduction in selling, general and administrative expenses principally from ~~increased~~decreased personnel related costs. Operating income for the three and six month periods of 2014 included a $4.3 million gain recorded from a final insurance settlement for property damage and business interruption claims related to prior years. Based on recent market conditions, management ~~anticipates~~currently cannot predict if this segment will ~~not~~ be profitable for the remainder of ~~2015.~~2016.

Power Segment



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Net sales	$	17	$	25
Operating income	$	—	$	3
Income from affiliates	$	1	$	—

~~Power Segment~~

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Net sales

$
27.5

$
53.0

$
52.6

$
106.9

Operating income

$
4.3

$
6.1

$
7.0

$
4.4

Income from affiliate

$
0.6

$
0.3

$
0.1

$
1.0

Net sales for the Power segment decreased ~~$25.5 million and $54.3~~$8 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same period in ~~2014.~~2015. The ~~decreases~~decrease primarily ~~reflect lower volumes and, to a lesser extent,~~reflects lower spot market rates. ~~Although management cannot predict future~~The lower spot market rates ~~sales volumes for 2015 will be~~were attributable primarily to lower ~~than the same periods in 2014 as~~fuel costs, a ~~result~~component of ~~cancelling the short-term leasing of a power generating facility on September 3, 2014, as further discussed in Note 9 to the Condensed Consolidated Financial Statements.~~pricing.

Operating income decreased ~~$1.8~~$3 million ~~and increased $2.6 million~~ for ~~the three and six month periods of 2015, respectively, compared to the same periods in 2014. The decrease in~~ the three month period of ~~2015~~2016 compared to the same period in 2015. The decrease primarily ~~reflects~~reflected lower ~~volumes. The increase for the six month period of 2015 primarily reflects~~spot market rates, partially offset by lower fuel costs per kilowatt hour generated ~~in excess of~~and other lower ~~spot market rates and lower other~~ production ~~costs, partially offset by lower volumes.~~costs. Management cannot predict future fuel costs or the extent that spot market rates will fluctuate compared to fuel costs. However, management anticipates positive operating income for this segment for the remainder of ~~2015, although lower than 2014.~~2016.

Turkey Segment

Three Months Ended

Six Months Ended

July 4,

June 28,

July 4,

June 28,

(Dollars in millions)

2015

2014

2015

2014

Income from affiliate

$
23.3

$
9.5

$
40.0

$
15.9



	Three Months Ended
	April 2,		April 4,
(Millions of dollars)	2016		2015
Income from affiliates	$	20	$	17

The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in ~~Butterball.~~Butterball, LLC. The increase in income from ~~affiliate~~affiliates for the three ~~and six~~ month ~~periods~~period of ~~2015~~2016 compared to the same ~~periods~~period in ~~2014~~2015 was primarily the result of ~~lower feed costs and, for the six month period,~~ higher prices offor turkey products ~~sold.~~sold, partially offset by higher costs from the increased production of further processed turkey products and lower volumes. Management is unable to predict future market prices for turkey products, the cost of feed or the impact to ~~Butterball~~the Turkey segment from ~~the~~ avian ~~influenza currently being experienced by the turkey industry.~~influenza. However, management anticipates positive income for this segment for the remainder of ~~2015.~~2016.

~~Selling, General and Administrative Expenses~~21

Interest Expense

~~Selling, general and administrative (“SG&A”) expenses~~Interest expense increased ~~$4.8 million and $9.7~~by $3 million for the three ~~and six~~ month ~~periods~~period of ~~2015, respectively,~~2016 compared to the same ~~periods~~period in ~~2014.~~2015. The ~~increases were~~increase is primarily related to long-term debt issued in December 2015, partially offset by capitalized interest. See Note 7 to the ~~result of increased personnel related costs~~Condensed Consolidated Financial Statements for further information on this debt.

Other Investment Income, Net

The fluctuation in ~~most segments and bad debt expense in the Commodity Trading and Milling segment. As a percent of revenues, SG&A was 4.6%~~other investment income, net for the ~~first six months~~three month period of ~~2015~~2016 compared to ~~3.9% for~~ the same ~~periods~~period in ~~2014.~~2015 primarily reflects higher losses associated with investments in refined coal processing plants, partially offset by higher income on short-term investments related to mark-to-market fluctuations and dividends. A portion of Seaboard’s investment losses in refined coal processing plants are offset by tax credits in income tax expense.

~~Interest Income~~Foreign Currency Gains, Net

~~Interest income increased $0.9~~Foreign currency gains, net totaled $7 million and ~~decreased $2.9~~$1 million for the three ~~and six~~ month periods of 2016 and 2015, ~~respectively, compared to the same periods in 2014.~~respectively. The ~~decrease for the six month period~~fluctuation primarily reflects ~~a decrease in interest received on outstanding customer receivable balances~~gains in the ~~Power segment.~~

~~Other Investment Income (Loss), Net~~

~~The fluctuations in other investment income (loss), net for the three and six months of 2015 compared to the same periods in 2014 primarily reflect mark-to-market fluctuations from investments.~~

~~Foreign Currency Gains (Losses), Net~~

Foreign currency gains (losses), net fluctuated to a net gain of $0.4 million and $1.8 million for the three and six month periods of 2015, respectively, compared to a net loss of $3.0 million and $8.7 million for the same periods in 2014. The fluctuations primarily reflect changes related to multiple currencies with the more significant changes related to theeuro, Japanese yen, South African ~~rand. Seaboard operates~~rand and various other currency exchange rates in ~~many~~several foreign ~~countries which are less developed than the U.S.~~countries. The political and economic conditions of ~~these markets,~~the countries in which Seaboard operates and does business, along with fluctuations in the value of the U.S. dollar, cause volatility in currency exchange rates, which exposes Seaboard to fluctuating foreign currency gains and losses that cannot be predicted by Seaboard. Although Seaboard does not utilize hedge accounting, Seaboard does utilize foreign currency exchange

contracts to manage its risks and exposure to foreign currency fluctuations primarily related to the South African ~~rand and the euro.~~rand. Management believes gains and losses on commodity transactions, including the mark-to-market effects, of such foreign currency exchange contracts relate to the underlying commodity transactions and classifies such gains and losses in cost of sales. All other gains (losses) on foreign currency exchange agreements are included in foreign currency gains (losses), net.

~~Miscellaneous, Net~~Income Tax Expense

On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 (the “2015 Tax Act”) was signed into law. The 2015 Tax Act reinstated and made permanent certain expired corporate income tax provisions that impact current and deferred taxes for financial reporting purposes. Certain reinstated provisions were extended for 2015 and 2016, while certain other provisions were extended beyond 2016.

The ~~fluctuations in miscellaneous, net~~effective tax rate for the three ~~and six months~~month period of 2016 was lower than that for the three month period of 2015 ~~compared~~primarily due to the ~~same periods in 2014 primarily reflect mark-to-market fluctuations on interest rate exchange agreements.~~2015 Tax Act’s extension of certain tax provisions that had expired during the three month period of 2015 and additional tax credits earned.

Other Financial Information

See Note 1 to the Condensed Consolidated Financial Statements for a discussion of recently issued accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Seaboard is exposed to various types of market risks in its day-to-day operations. Seaboard utilizes derivative instruments to mitigate some of these risks, including both purchases and sales of futures and options to hedge inventories, forward purchases and sale contracts. Primary market risk exposures result from changing commodity prices, foreign currency exchange rates and interest rates. Seaboard also enters into speculative derivative transactions not directly related to its raw material requirements. The nature of Seaboard’s market risk exposure related to these items has not changed materially since December 31, ~~2014.~~2015. See Note 5 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 our Chief Executive and Chief Financial Officers, the effectiveness of Seaboard’s disclosure controls and procedures as defined in Exchange Act Rule ~~13a—15(e)~~13a-15(e) as of ~~July 4, 2015.~~April 2, 2016. Based upon and as of the date of that evaluation, Seaboard’s Chief Executive and Chief Financial Officers concluded that Seaboard’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports it files and submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported as and when required. It should be noted that any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any system of disclosure controls and procedures is based in part upon assumptions about the likelihood of future events. Due to these and other

inherent limitations of any such system, there can be no assurance that any design will always succeed in achieving its stated goals under all potential future conditions.

Change in Internal Controls —There has been no change in Seaboard’s internal control over financial reporting required by Exchange Act Rule ~~13a—15~~13a-15(f) that occurred during the fiscal quarter ended ~~July 4, 2015~~April 2, 2016 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 7 to the Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

There have been no material changes in the risk factors as previously disclosed in Seaboard’s ~~Annual Report~~annual report on Form 10-K for the year ended December 31, ~~2014.~~2015.

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

As of the date of this report, Seaboard ~~presently~~ may repurchase up to ~~$50.8~~$100 million market value of its common stock from time to time in open market or privately negotiated purchases under its share repurchase program. See Note 8 to the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements for further discussion. There were no purchases made pursuant to Seaboard’s share repurchase program during the ~~second~~first quarter of ~~2015.~~2016.

~~Item 6.~~		~~Exhibits~~
Item 6.		Exhibits

Exhibit No.		Description

10.1		First Amendment to Seaboard Triumph Foods, LLC Subscription Agreement dated ~~May 13, 2015. Incorporated herein by reference to Exhibit 10.1 of Seaboard’s Form 8-K dated May 13, 2015.~~February 29, 2016

31.1		Certification of the Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101~~101.INS		~~The following financial information from Seaboard Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2015, formatted in~~ XBRL (Extensible Business Reporting Language): (1) Condensed Consolidated Statements of Comprehensive Income, (2) Condensed Consolidated Balance Sheets, (3) Condensed Consolidated Statements of Cash Flows, and (4) the Notes to Unaudited Condensed Consolidated Financial Statements *.Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Forward-looking Statements

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections.

This Form 10-Q contains forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Seaboard Corporation and its subsidiaries (“Seaboard”). Forward-looking statements generally may be identified as statements that are not historical in ~~nature;~~nature and statements preceded by, followed by or that include the words “believes,” “expects,” “may,” “will,” “should,” “could,” “anticipates,” “estimates,” “intends,” or similar expressions. In more specific terms, forward-looking statements, include without limitation: statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, including the impact of mark-to-market accounting on operating income; statements regarding the plans and objectives of management for future operations; statements of future economic performance; statements regarding the intent, belief or current expectations of Seaboard and its management with respect to: (i) Seaboard’s ability to obtain adequate financing and ~~liquidity,~~liquidity; (ii) the price of feed stocks and other materials used by Seaboard; (iii) the sales price or market conditions for pork, grains, sugar, 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 Commodity Trading and Milling segment; (vi) the charter hire rates and fuel prices for vessels; (vii) the fuel costs and related spot market prices 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 ~~timetable~~timetables for Seaboard’s scheduled capital improvements, acquisitions and dispositions; (xi) the productive capacity of facilities that are planned or ~~(xi)~~under construction, and the timing of the commencement of operations at such facilities; (xii) the increase in Seaboard's hog and other production capacity attributable to acquisitions; (xiii) the amount of Seaboard's funding commitment for refined coal processing plants; or (xiv) 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. Seaboard undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions or otherwise. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and

assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to a variety of factors. The information contained in this report, including without limitation the information under the ~~headings~~heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” identifies important factors ~~which~~that could cause such differences.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SEABOARD CORPORATION


	by:	/s/ Robert L. Steer
		Robert L. Steer, Executive Vice President,
		Chief Financial Officer
		(principal financial officer)

	Date: ~~August 11, 2015~~May 6, 2016


	by:	/s/ Michael D. Trollinger
		Michael D. Trollinger, Vice President, Corporate Controller
		and Chief Accounting Officer
		(principal accounting officer)

	Date: ~~August 11, 2015~~May 6, 2016

(Thousands of dollars)	2015
Due within one year	$	980
Due after one year through three years	9,841
Due after three years	12,542
Total fixed rate securities	$	23,363

Sales to External Customers:
	Three Months Ended				Six Months Ended
	July 4,		June 28,		July 4,		June 28,
(Thousands of dollars)	2015		2014		2015		2014

Pork	$	331,259	$	466,735	$	652,147	$	848,825
Commodity Trading and Milling	778,688		914,114		1,599,276		1,703,504
Marine	241,679		210,960		478,339		411,424
Sugar	45,107		46,986		90,366		97,342
Power	27,510		53,033		52,641		106,881
All Other	3,643		2,763		7,475		6,251
Segment/Consolidated Totals	$	1,427,886	$	1,694,591	$	2,880,244	$	3,174,227

Income (Loss) from Affiliates:
	Three Months Ended						Six Months Ended
	July 4,			June 28,			July 4,			June 28,
(Thousands of dollars)	2015			2014			2015			2014

Pork	$	3,836		$	-		$	6,489		$	-
Commodity Trading and Milling	(15,947		)	(2,170		)	(25,196		)	(2,205		)
Marine	413			-			1,066			-
Sugar	111			443			527			748
Power	573			317			125			954
Turkey	23,271			9,530			40,025			15,904
Segment/Consolidated Totals	$	12,257		$	8,120		$	23,036		$	15,401