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Lines of Credit and Long-Term Debt | 12 Months Ended
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Dec. 31, 2019
Lines of Credit and Long-Term Debt |
Lines of Credit and Long-Term Debt | Note 8 – Lines of Credit and Long-Term Debt The outstanding balance under uncommitted lines of credit was $246 million and $148 million as of December 31, 2019 and 2018, respectively. Of the $246 million outstanding as of December 31, 2019, $189 million was denominated in foreign currencies, with $91 million denominated in the South African rand, $53 million in the Peruvian sol, $24 million denominated in the Canadian dollar, $19 million denominated in the Zambian kwacha and the remaining in various other currencies. The weighted average interest rate for outstanding uncommitted lines of credit was 5.79% and 7.76% as of December 31, 2019 and 2018, respectively. The uncommitted lines of credit are unsecured and do not require compensating balances. Facility fees on these agreements are not material. Seaboard has a $100 million committed line of credit with Wells Fargo Bank, National Association that had no outstanding balance as of December 31, 2019 and 2018, respectively. During 2019, Seaboard renewed this credit line through September 25, 2020, with no other changes to the agreement. Interest is computed at LIBOR plus 0.50%, and Seaboard incurs an unused commitment fee of 0.09% per annum. This line of credit is secured by certain short-term investments and is subject to standard representations and covenants. As of December 31, 2019, Seaboard’s borrowing capacity under its uncommitted and committed lines of credit was reduced by the $246 million drawn and $18 million of letters of credit. Long-term Debt Long-term debt includes borrowings under term loans and other contractual obligations for payment, including notes payable. The following table is a summary of long-term debt: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | December 31, | ​
(Millions of dollars) | ​ | ​ | 2019 | ​ | ​ | 2018 | ​
Term Loan due 2028 | ​ | $ | 691 | ​ | $ | 698 | ​
Foreign subsidiary obligations | ​ | ​ | 102 | ​ | ​ | 81 | ​
Total long-term debt at face value | ​ | ​ | 793 | ​ | ​ | 779 | ​
Current maturities of long-term debt and unamortized discount and costs | ​ | ​ | (63) | ​ | ​ | (40) | ​
Long-term debt, less current maturities and unamortized discount and costs | ​ | $ | 730 | ​ | $ | 739 | ​
​ On September 25, 2018, Seaboard Foods LLC entered into an Amended and Restated Term Loan Credit Agreement (“Credit Agreement”) with CoBank, ACB, Farm Credit Services of America, PCA, and the lenders party thereto. This Credit Agreement replaced Seaboard Foods LLC’s $500 million unsecured term loan with a $700 million unsecured term loan (“Term Loan”) and extended the maturity from December 4, 2022 to September 25, 2028. Seaboard Foods LLC received proceeds of $220 million, net of certain costs. The Term Loan provides for quarterly payments of the principal balance pursuant to the revised amortization schedule set forth in the Credit Agreement, with the balance due on the maturity date. The Term Loan bears interest at fluctuating rates based on various margins over a Base Rate, LIBOR or a Quoted Rate, at the option of the borrower. The interest rate was 3.42% and 4.15% as of December 31, 2019 and 2018, respectively. The Term Loan requires, among other terms, the maintenance of certain ratios involving a maximum debt to capitalization ratio, which shall not exceed 50% at the end of any fiscal quarter, and minimum tangible net worth, as defined, of not less than $2.5 billion plus 25% of cumulative consolidated net income. The Term Loan also includes restrictions of certain subsidiaries to grant liens on assets, incur indebtedness over 15% of consolidated tangible net worth, make certain acquisitions, investments and asset dispositions in excess of specified amounts, and limits aggregate dividend payments to $100 million per year under certain circumstances. Seaboard Corporation has guaranteed all obligations of Seaboard Foods LLC under the Term Loan. Foreign subsidiary long-term debt is primarily denominated in euros and U.S. dollars. In conjunction with the acquisition discussed in Note 2, Seaboard incurred a euro-denominated note payable due to the sellers with a balance of $44 million as of December 31, 2019. The change in value from the date of acquisition to the current reporting period reflects foreign currency fluctuations and the accretion of the discount to the note payable face value over the term that is recorded as additional interest expense. This foreign subsidiary obligation bears interest at an annual rate of 3.25%, with interest due annually on the anniversary date, until maturity on January 5, 2021. Seaboard’s Sugar and Alcohol segment, which is on a one-month lag, has notes payable outstanding of $54 million and $29 million as of December 31, 2019 and 2018, respectively with maturity dates that range from December 9, 2019 to December 30, 2019. The interest rate on the Sugar and Alcohol segment’s notes payable was 3.20% and 3.10% as of December 31, 2019 and 2018, respectively. The weighted average interest rate of all foreign subsidiary debt was 3.50% and 3.80% as of December 31, 2019 and 2018, respectively. All of the foreign subsidiary debt is guaranteed by Seaboard, except $1 million is secured by property, plant and equipment. Seaboard was in compliance with all restrictive debt covenants relating to these agreements as of December 31, 2019. The aggregate minimum principal payments required on long-term debt as of December 31, 2019 were as follows: $62 million in 2020, $53 million in 2021, $8 million in 2022, $7 million in 2023, $7 million in 2024 and $656 million thereafter.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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