SEB 10-K & 10-Q changes, risk factors and insider trading

This ManagementManagement’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, Seaboard’s consolidated financial statements and the accompanying notes in Item 8. Certain statements in this report contain forward-looking statements. See the introduction in Item 1 for more information on these forward-looking statements, including a discussion of the most significant factors that could cause actual results to differ materially from those in the forward-looking statements. For discussion related to the results of operations for 2024 compared to 2023 refer to Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in Seaboard’s Form 10-K for the year ended December 31, 2024.

The Pork segment primarily produces hogs to process and sells pork products throughout the U.S. and to foreign markets. Sales prices are directly affected by both domestic and worldwide supply and demand for pork products and other proteins. Feed accounts for the largest input cost of raising hogs and is materially affected by price changes for corn and soybean meal. Market prices for hogs purchased from third parties for processing at the plant also represent a significant cost factor. As a result, commodity price fluctuations can affect profitability and cash flows. This segment is Seaboard’s most capital-intensive segment, representing approximately 47%41% of Seaboard’s total fixed assets and approximately 39%37% of total inventories as of December 31, 2024.2025. With the plant generally operating near capacity, Seaboard is continually looking for ways to enhance the plant’s operational efficiency, while also looking to increase margins by introducing new, higher margin value-added products. This segment also produces swine-derived renewable natural gas, but sales are not significant as most sitesfacilities are in the early stages of operation. Consistent production at each sitefacility may take longer than expected as it is dependent upon a number of variables, including the maturity and volatile solid concentration of the lagoon, weather, hog health and methanogen health.

The CT&M segment provides integrated agricultural commodity trading, processing and logistics services. The majority of its sales are derived from sourcing agricultural commodities from multiple origins and delivering them to third-party and affiliate customers in various international locations. This segment’s sales are significantly affected by fluctuating prices of various commodities, such as wheat, corn and soybean meal. Exports from various countries can exacerbate volatile market conditions. Profit margins are sometimes protected through commodity derivatives and other risk management practices, but the execution of these purchase and delivery transactions have long cycles of completion, which may extend for several months with a high degree of price volatility. As a result, these factors can significantly affect sales volumes, operating income, working capital and related cash flows from period to period. This segment represents approximately 41% of Seaboard’s total inventories as of December 31, 2024. Consolidated subsidiaries and non-consolidated affiliates operate the grain processingmilling facilities in foreign countries that are, in most cases, lesser developed and are more likely to be significantly impacted by changes in local crop production, political instability and local government policies, as well as fluctuations in economic and industry conditions and foreign currency exchange rates. This segment represents approximately 37% of Seaboard’s total inventories as of December 31, 2025.

The Liquid Fuels segment produces biodiesel and renewable diesel and generates related environmental credits, specifically LCFS credits and RINs, whichand areproduction thentax sold to third parties.credits. The profitability of this segment is impacted by world oildiesel prices, the market prices of pork fat, other animal fats and vegetable oils, all of which are utilized to produce biodiesel and renewable diesel, and by government mandates and incentives to use biofuels and the market price of environmental credits.

The Turkey segment represents Seaboard’s 52.5% non-controlling investment in Butterball, which is accounted for using the equity method.method of accounting. Butterball produces turkeys to process and sells turkey products. Sales prices are directly affected by both domestic and worldwide supply and demand for turkey products and other proteins. Feed accounts for the largest input cost of raising turkeys and is materially affected by price changes for corn and soybean meal. As a result, price fluctuations for corn and soybean meal affect profitability and cash flows.

The primary objectives of Seaboard’s financing strategy are to effectively manage financial risks, ensure efficient liquidity for daily global operations and maintain balance sheet strength. Seaboard’s principal funding sources are generated from operating activities, short-term investments and borrowings from revolving lines of credit and term loans. Seaboard’s cash requirements primarily include funding for working capital, capital expenditures, strategic investments and other needs. Management evaluates overall liquidity at least on a quarterly basis, and management believes Seaboard’s combination of internally generatedinternally-generated cash, liquidity and borrowing capabilities will be adequate to meet all short-term and long-term commitments.

As of December 31, 2024,2025, Seaboard had cash and short-term investments of nearly $1.2 billion and additional total working capital of $0.9$890 billion.million. As of December 31, 2024,2025, $97$161 million of the $1.2 billion of cash and short-term investments were held by Seaboard’s foreign subsidiaries. Historically, Seaboard has consideredconsiders substantially all foreign profits as being permanently investedreinvested in its foreign operations, includingexcept all cash and short-term investments held by foreign subsidiaries. During 2022, Seaboard reversed its indefinite reinvestment assertion in connection with certainfor previously-taxed undistributed earnings of its Seaboard Marine subsidiaryand due to the tax effectivenessearnings of repatriating. For allcertain other foreign subsidiaries, Seaboard intends to continue permanently reinvesting their funds outside the U.S. as they continue to demonstrate no need to repatriate them to fund Seaboard’s U.S. operations for the foreseeable future. Seaboard has not recorded deferred taxes for state or foreign withholding taxes that would result upon repatriation of these funds to the U.S. because determination of the tax that might be paid on unremitted earnings if eventually remitted is not practical due to the complexity of the multi-jurisdictional tax environment in which Seaboard operates.subsidiaries.

As of December 31, 2025, Seaboard had long-term debt of $1.0$991 billion as of December 31, 2024,million, which included athe Term Loan due 2033 of $963$953 million. Current maturities of long-term debt were $11 million as of December 31, 2024.2025. TheSee Note 7 to the consolidated financial statements for more discussion on lines of credit agreementand governinglong-term thedebt. TermSeaboard Loanwill due 2033 contains customary covenants for credit facilities of this type, including restrictions on the abilitycontinue to grant liens on assets, incur indebtedness and make certain acquisitions, investments, asset dispositions and dividend payments in excess of specified amounts. Seaboard evaluatesevaluate opportunities to access efficient financing in the markets where it operates, leveraging low-cost funding to support its operations.

Cash used in investing activities was $484$543 million for the year ended December 31, 2024,2025, compared to $273$484 million for 2023.2024. During 2024,2025, Seaboard invested $511$562 million in property, plant and equipment, an increase of which $299$51 million wasfrom the same period in the Porkprior segmentyear. andOf $172the 2025 total investment, $302 million was in the Marine segment.segment, The Pork segment expenditures wereconsisting primarily to fund renewable biogas recovery projects. At certain hog farms, the Pork segment has renewable biogas recovery facilities to capture methane from its hog lagoons and convert it into renewable natural gas, which is then injected into the local pipeline infrastructure. Some of these sites were placed in service during 2024, while one remains under construction. The Marine segment expenditures primarily related to installment payments on dual-fueled vessels under constructionconstruction. andSix thenew funding of other investments. Twodual-fueled vessels were completed and delivered induring 2024,2025, andthe sixlast otherof the original eight ordered vessels. In 2025, Seaboard Marine entered into an agreement to build a ninth new vessel at a cost of approximately $75 million. The new dual-fueled vessels arebring expectedgreater fuel efficiency, increased twenty-foot equivalent unit (“TEU”) capacity and a host of other advantages to bethe completedMarine segment’s fleet and deliveredcreate ina 2025.better overall fleet balance of owned and chartered vessels. Cash flows from investing activities for short-term investments are part of Seaboard’s overall liquidity management strategy. Short-term investment purchases are a result of the investment of excess cash, asset allocation from the active management of the portfolio and reinvestmentre-investment of matured securities. Also, during 2025, Seaboard rebalanced its short-term investments portfolio using different investment vehicles in some cases, such as private funds. See Note 2 to the consolidated financial statements for further discussion. Additionally, during 2025, Seaboard continued to invest in long-term investments with a $50 million purchase of equity interests in a fund that owns corporate debt securities.

Seaboard continues to make investments in its operations. The total budget for 20252026 capital expenditures is approximately $630$625 million, and includes $150 million for the Power segment’s expenditures related to the construction of EDM IV, which is expected to commence operations in 2028, along with several projects individually immaterial across the remaining segments. The total estimated cost of the EDM IV barge project is approximately $315 million, with approximatelyinstallment $290payments milliondue plannedbased inon themilestones Marine segment, primarily for vessels under construction, and approximately $215 million planned in the Pork segment.achieved. Management anticipates funding these capital expenditures from a combination of available cash, the use of available short-term investments and Seaboard’s available borrowing capacity.

Based on specific facts and circumstances, Seaboard may also fund capital calls and issue borrowings for its equity method investments. Seaboard continues to look for opportunities to further grow and diversify its operations, but there are no definitive plans for additional acquisitions at this time.operations. Management intends to utilize existing liquidity, available borrowing capacity and other financing alternatives to fund these opportunities. The terms and availability of such financing may be impacted by economic and financial market conditions, as well as Seaboard’s financial condition and results of operations at the time Seaboard seeks such financing, and there can be no assurances that Seaboard will be able to obtain such financing on terms that will be acceptable or advantageous.

Other than those obligations discussed above, future obligations mostly include normal operating expenses. For operating and finance leases, Seaboard had a current undiscounted obligation of $191 million and a long-termnoncurrent undiscounted obligation of $418$177 million and $396 million, respectively, as of December 31, 20242025; see Note 5 to the consolidated financial statements for further discussion on leases. The majority of Seaboard’s purchase commitments for materials or supplies are related to hog, grain, freightfreight, fuel and fuelhog procurement contracts with a current obligation of approximately $1.3$1.2 billion and a long-term obligation of approximately $576$1.8 millionbillion as of December 31, 20242025; see Note 8 to the consolidated financial statements for further discussion on commitments. These purchase commitments are of a normal, recurring nature with our commodity businesses and as agreements expire throughout the year they are renewed. Also, Seaboard is subject to obligations under its existing defined benefit pension plans. As of December 31, 2024,2025, the unfunded status of allthe non-qualified plans was $24$56 million. For additional information about Seaboard’s pension plans, see Note 9 to the consolidated financial statements.

Net sales for the years ended December 31, 2024,2025, 2024 and 2023 and 2022 were $9.1$9.8 billion, $9.6$9.1 billion and $11.2$9.6 billion, respectively. The decreaseincrease in sales of $500$646 million for 20242025 compared to 20232024 primarily reflected a $422$456 million decreaseincrease in CT&M segment sales due to lower prices of commodities. The decrease of $1.6 billion for 2023 compared to 2022 primarily reflected a sales decline of $1.2 billion in the CT&M segment due to lower prices andhigher volumes of commodities sold and a sales decline of $544$217 million increase in the Marine segment sales due to lowerincreased cargovoyage volumes and freight rates.revenue. See the net sales discussion by reportable segment below for more details.

Operating income (loss) for the years ended December 31, 2024,2025, 2024 and 2023 and 2022 was $156$239 million, ($87)$156 million and $657($87) million, respectively. The increase in operating income of $243$83 million for 20242025 compared to 20232024 primarily reflected an $83 million increase in Marine segment operating income of $475 million in the Pork segment due to higher marginsvoyage on the sale of pork products and market hogs,revenue, partially offset primarily by ahigher decreasevoyage-related in operating income of $146 million in the Marine segment due to lower voyage revenue. The decrease of $744 million for 2023 compared to 2022 primarily reflected a decrease in operating income of $395 million in the Pork segment due to lower margins on the sale of pork products and market hogs and a decline in operating income of $363 million in the Marine segment due to lower voyage revenue.costs. See the operating income discussion by reportable segment below for more details.

Interest incomeexpense increaseddecreased $6$2 million for the year ended December 31, 20242025, compared to 2023 and $30 million for the year ended December 31, 2023 compared to 20222024 primarily due to higherlower interest rates on short-termoutstanding investments.debt, partially offset by a decrease of $18 million in capitalized interest on construction in progress.

The decrease in net sales for the year ended December 31, 20232025, compared to 20222024 was due to lower market pricesvolumes of pork productsproducts, and to a lesser extent, market hogs soldsold, which decreased sales $228$106 million and $37 million, respectively, partially offset by higher volumessales ofprices pork products sold thatwhich increased sales $37$108 million. Lower sales volumes were primarily due to the availability of hogs related to diseases and timing of deliveries to the processing plants.

Net sales decreasedincreased for the year ended December 31, 20242025, compared to 20232024 primarily due to lowerhigher average sales pricesvolumes of certain commodities sold, which decreasedincreased sales $973$743 million, partially offset by higher5% volumes,lower average sales prices, which increaseddecreased sales $551$287 million. Sales prices for many of Seaboard’s products are directly affected by both domestic and worldwide supply and demand for commodities and competing products, all of which are determined by constantly changing market forces.

Operating income decreasedincreased for the year ended December 31, 20242025, compared to 20232024 primarily due to loweran marginsincrease drivenof by $22$31 million in mark-to-market lossesgains on derivative contracts, which continue to fluctuate until final delivery of product, and higher margins on certain commodities sold at trading offices, partially offset by alower $10margins at certain mills driven by government price controls and higher selling, general and administrative expenses of $19 million contingentdue considerationto liabilitybad adjustmentdebt recordedexpense inand thesalaries priorand year.benefits. While management anticipates positive operating income, excluding the effects of mark-to-market adjustments, for this segment in 2025,2026, no assurances can be made as it is difficult to predict worldwide commodity price fluctuations,fluctuations and the uncertain political and economic conditions in the countries in which this segment operates and the volatility in the commodity markets for future periods.operates.

The decreaseincrease in net sales for the year ended December 31, 20242025, compared to 20232024 was primarily due to anhigher overallfreight declinerates and cargo volumes. The increase in average freight rates was driven by competitivevarious pressures,freight partiallyrate offsetincreases byand ana increasemore infavorable mix of cargo volumes.types. Cargo volumes in 2025 increased 7% for the year ended 2024 as compared to the year ended 2023.2024.

The decreaseincrease in operating income for the year ended December 31, 20242025, compared to 20232024 was primarily the result of lowerhigher voyage revenuerevenue, partially offset by higher voyage-related costs, such as stevedoring, terminal services, trucking costs and increasesslot costs, which are primarily driven by higher cargo volumes. Many of this segment’s costs are variable in stevedoringnature and terminalthe costs,overall attributableexpense toamounts increasedwill cargofluctuate as volumes andincrease rates.or decrease. While management anticipates this segment will be profitable in 2025,2026, no assurances can be made as it is difficult to predict changes in cargo volumes, cargo rates, fuel costs or other voyage-relatedvoyage costs, cargo volumes or cargo ratescosts for future periods.

The increasedecrease in net sales for the year ended December 31, 20242025, compared to 20232024 reflected a slight increasedecrease in power generation,generation partiallyfrom offsetEDM byIII lower spot market ratesprimarily due to more power generation from lower fuelvariable-cost prices.producers and timing of maintenance performed that more than offset EDM II’s increased power generation.

The decrease in operating income for the year ended December 31, 20242025, compared to 20232024 was primarily adriven resultby ofthe an increasedecrease in maintenancenet costs.sales and higher fuel costs, primarily heavy fuel oil, due to increased consumption for EDM II. Generally, heavy fuel oil is more expensive than natural gas. While management anticipates this segment will be profitable in 2025,2026, no assurances can be made as it is difficult to predict fuel costs or the extent that spot market rates will fluctuate compareddue to fuel costs or other power producers for future periods.

The Turkey segment represents Seaboard’s non-controlling 52.5% investment in Butterball, which is accounted for using the equity method. The decreaseincrease in Butterball’s net income of $95$84 million for the year ended December 31, 20242025, compared to 20232024 was primarily the result of lowerincreased sales attributable to 10% higher volumes of $141turkey millionproducts sold and 2% higher prices, partially offset primarily by 16% higher plant costs due to weaker pricing, partially offset by a decrease in production costs, primarily attributable to lower feed costs. The average selling price decreased 8% for the year ended December 31, 2024 compared to 2023, primarily due to lower market prices. Salesmore volumes did not have a significant impact on the results.sold. While management anticipates this segment will be profitable infor 2025,2026, no assurances can be made as it is difficult to predict market prices for turkey products orproducts, the cost of feedproduction for future periods.periods Butterball’sand closureimpacts offrom a further-processing plant in Jonesboro, Arkansas, effective February 3, 2025, is not expected to have a material impact on net income in 2025.diseases.

This ManagementManagement’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, Seaboard’s consolidated financial statements and the accompanying notes included in this quarterly report on Form 10-Q and within Seaboard’s 2025 10-K. Certain statements in this report contain forward-looking statements. See the section entitled “Forward-looking Statements” for more information on these forward-looking statements, including a discussion of the most significant factors that could cause actual results to differ materially from those in the forward-looking statements.

The primary objectives of Seaboard’s financing strategy are to effectively manage financial risks, ensure efficient liquidity for daily global operations and maintain balance sheet strength. Seaboard’s principal funding sources are generatedcash fromprovided by operating activities, proceeds from sales of short-term investments and borrowings from revolving lines of credit and term loans. Seaboard’s cash requirements primarily includeconsist funding forof working capital, capital expenditures, strategic investments and other general corporate needs. Seaboard evaluates its overall liquidity at least on a quarterly basis,quarterly, and management believes that Seaboard’s combination of internally-generated cash, together with its available liquidity and borrowing capabilitiescapacity, will be adequate to meet all of its short-term and long-term commitments.

As of AprilJuly 4, 2026, Seaboard had cash and short-term investments of nearly $1.2 billion and additional net working capital of $1$1.2 billion. Of the total cash and short-term investments balance,balances, $102$136 million was held by foreign subsidiaries.

Available borrowing capacity fluctuates based on changes to the terms of line of credit agreements and draws needed to fund operations. During the first quarter of 2026, an uncommitted line of credit agreement, secured by eligible accounts receivable, that had up to $100 million of borrowing availability expired. Seaboard will continue to evaluate opportunities to access efficientcost-effective financing in the markets where it operates, leveraging low-cost funding sources to support its operations.

Seaboard had long-term debt of $988$972 million as of AprilJuly 4, 2026, which included a Term Loan due 2033 of $950$948 million. Current maturities of long-term debt were $11 million as of AprilJuly 4, 2026. See Note 4 to the condensed consolidated financial statements for more discussion of Seaboard’s lines of credit and long-term debt.

Cash used in operating activities was $54$30 million for the firstsix quartermonths ofended July 4, 2026, compared to $20cash provided by operating activities of $61 million for the same period in 2025. TheThis change inwas operating activities cash flows wasprimarily due to morea $160 million increase in cash used for working capital of $111 million,capital, partially offset by ana $59 million increase in net earnings, adjusted for non-cash items, of $56 million and more dividend payments received from equity method investments of $21 million.investments. The increase in cash used for working capital was primarily dueattributable to increases in inventory, primarily due to the timing of sales and inventory balances,purchases primarilyin Seaboard’s CT&M segment, and accounts receivable, related to higher sales in the Liquid Fuels segment. This segment’s fuel and taxCT&M creditssegments. inventoryThe increasesCT&M weresegment drivenhandles bylarge improvedshipments marketof conditions,grain, moreso production andthe timing of sales.these deliveries can result in significant working capital fluctuations across periods. During the second quarter of 2026, Seaboard sold 2025 production tax credits, accounted for as inventory, and received proceeds of $55 million, net of discount and transaction fees. The increases in inventory and accounts receivable were partially offset by the timing of accounts payable disbursements.

Cash used in investing activities was $87$137 million for the firstsix quartermonths ofended July 4, 2026, compared to $55$201 million for the same period in 2025. This change was primarily due to lower capital expenditures of $62 million. During the threesix months ended AprilJuly 4, 2026, Seaboard invested $96$198 million in property, plant and equipment, ofincluding which $44$79 million was in the Power segment, consisting primarily of installment payments for EDM IV, thea new barge currently under construction. Cash flows from investing activities for short-term investments are part of Seaboard’s overall liquidity management strategy. Short-term investment purchases are a result offrom the investment of excess cash, asset allocation decisions arising from the active management of the portfolio and re-investment of matured securities. Seaboard continues to explore strategic acquisitions and investments to further grow and diversify its operations.

Cash provided by financing activities was $133 million for the six months ended July 4, 2026, compared to $150 million for the same period in 2025. Cash flows from financing activities primarily include draws and repayments under committed and uncommitted revolving facilities held with financial institutions across multiple jurisdictions and currencies. Changes in Seaboard’s borrowing balances are primarily driven by its daily working capital needs. Seaboard did not repurchase any shares under its share repurchase program during the firstsix quartermonths of 2026. As of AprilJuly 4, 2026, $62 million remained available for repurchase under the program. Seaboard is not obligated to repurchase a minimum number of shares under the program,program and Seaboard cannot predict when, or if, it will repurchase any shares or the amount of any such repurchases. See Note 6 to the condensed consolidated financial statements for more discussion of Seaboard’s share repurchase program.

For the remainder of 2026, management has budgeted capital expenditures totaling approximately $460$305 million, which includesincluding approximately $125$60 million for the Power segment’s expenditures related to the construction of EDM IVIV, with the remainder relatingallocated to several individually immaterial projects across the remaining segments. Management anticipates funding these capital expenditures fromthrough a combination of available cash, theproceeds usefrom sales of available short-term investments and Seaboard’s available borrowing capacity.

DuringIn the first quarter ofFebruary 2026, the Marine segment entered into an amended and restated LNG fuel supply contract for its LNG-fueled vessels. TheAs of execution, the total minimum fuel purchase commitment over the 8-yeareight-year contract term beginning in February 2026 iswas approximately $335 million, basedcalculated onusing market prices at quarter end for the variable price component.component as of the end of the first quarter of 2026. There were no other material updates to Seaboard’s obligations as discussed in the 2025 10-K.

Seaboard’s operations are heavily commodity-drivencommodity-driven, and the financial performance for certain subsidiaries is veryhighly cyclicalcyclical, baseddepending on respectivetrends in the applicable global commodity markets and trends inbroader economic activity. The recent conflict involving IranIran, thatwhich began in late February 2026 and continued through the second quarter, has resulted in higher fuel prices, higher shipping costs, increased volatility in commodity markets and broader macroeconomic uncertainty, among other factors. Where possible, Seaboard’s segments pass on higher fuel costs through a fuel surcharge or other pricing mechanism. These conditions did not have a material impact on Seaboard’s first quarter 2026 results; however, the extent and duration of the conflict remain uncertain, and management continues to monitor developments. See Item 1A. Risk Factors for an update to the risk factors set forth in Seaboard’s 2025 10-K.

Net sales increased $84$442 million and $526 million for the three-monththree- periodand six-month periods of 20262026, respectively, compared to the samecorresponding periodperiods in 2025. TheThese increaseincreases were driven primarily reflectedby higher sales of $76 million in the Liquid Fuels segment drivensales byof $224 million and $300 million, respectively, due to increased environmental credit and fuel sales, and higher CT&M segment sales of $208 million and $188 million, respectively, due to increased volumes of fuelcommodities sold. See the net sales discussion by reportable segment below for more details.

Operating income increased $58$48 million and $106 million for the three-monththree- periodand six-month periods of 20262026, respectively, compared to the samecorresponding periodperiods in 2025. TheThese changeincreases were primarily reflecteddriven anby increase of $63 million inhigher Liquid Fuels segment operating income andof a $38$79 million increaseand in$142 Porkmillion, segmentrespectively, operatingreflecting incomeincreased drivenvolumes primarilyand by higher margins on products sold. These increases weremargins, partially offset by a $24 million decrease in CT&M segment operating income due to losses on mark-to-market derivative contracts and a $23 million decrease indecreased Marine segment operating income of $37 million and $60 million, respectively, due to lowerhigher freight rates and higheroverall voyage-related costs. See the operating income discussion by reportable segment below for more details.

Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax incomeincome, and adjustsadjusted for discrete items recorded during the period. The effective tax rate for the three-monththree- periodand six-month periods of 2026 decreasedincreased compared to the three-monthcorresponding periodperiods of 2025, withprimarily nobecause materialSeaboard driversrecognized forless theU.S. decrease. A rate reconciling item can have a disproportionate impact on the effectiveincome tax rateexpense whenin applied2025 againstdue ato relativelyits lowU.S. levelvaluation ofallowance pre-tax earnings, such as for the first quarter of 2025.position. In July 2025, the U.S. signed into lawenacted the One Big Beautiful Bill Act (“OBBBA”). The OBBBA imposed various changes to U.S. federal income tax regulation, including restoring 100% bonus depreciation, removing the requirement to capitalize and amortize domestic research and development expenditures, increasing interest deductibility and reducing certain international deductions. The international effects of the OBBBA, effective beginning on January 1, 2026, were not material to Seaboard’sthe firstthree- quarterand ofsix-month 2026periods incomeended taxJuly expense.4, 2026.

The increasedecrease in operating income for the three-month period of 2026 compared to the same period in 2025 primarily reflected lower sales prices and higher marginscosts onper unit of pork products andsold, marketpartially hogsoffset sold,by lower production costs due to the decrease in volumes. The increase in operating income for the six-month period of 2026 compared to the same period in 2025 primarily reflected a decrease in legal claims expenseexpense, and,and to a lesser extent, a decrease in feed costs of $19$23 million primarily due to volumes, partially offset by lower prices on pork products sold. Margins on market hog sales for the three- and six-month periods compared to the corresponding periods in 2025 were primarily flat as lower sales prices were largely offset by increases in otherlower production costs, drivenincluding byfeed. hogBased health.on Whilecurrent market conditions, management anticipatesis theuncertain Porkwhether this segment will be profitable for the remainder of 2026, and no assurances can be made as it is difficult to predict market prices for pork products, the cost of production or third-party hogs, diseasesthe effect of disease and the impact of geopolitical events for future periods.

Net sales decreasedincreased for the three-monththree- periodand six-month periods of 2026 compared to the corresponding periods in 2025, primarily due to lowerhigher volumes of certain commodities sold, which decreasedincreased sales $48by $196 million and $148 million, partiallyrespectively. offsetA by1% higherincrease in average sales prices of 2%, whichfurther increased sales $28by million.$12 million and $40 million, respectively, for the three- and six-month periods of 2026 compared to the corresponding periods in 2025. Sales prices for many of Seaboard’s products are directly affected by both domestic and worldwide supply and demand for commodities and competing products, all of which are determined by constantly changing market forces.

Operating income decreasedremained relatively flat for the three-month period of 2026 compared to the same period in 2025, primarilyas slightly higher margins at certain mills were mostly offset by reduced trading margins. Operating income decreased for the six-month period of 2026 compared to the same period in 2025 due to anincreases increasein ofcosts, $18including $20 million inof mark-to-market losses on derivative contracts, which will continue to fluctuate until final delivery of the product. While management anticipates positive operating income, excluding the effects of mark-to-market adjustments,income for this segment for the remainder of 2026, excluding the effects of mark-to-market adjustments, no assurances can be made as it is difficult to predict worldwide commodity price fluctuations and the uncertain political and economic conditions in the countries in which this segment operates.

The decrease in operating income for the three-monththree- periodand six-month periods of 2026 compared to the corresponding periods in 2025 was primarily the result of lower freight rates and higher voyage-related costs primarily due to higher cargooverall volumes.voyage-related costs, including port and canal, stevedoring, terminal services and trucking costs. Many of this segment’s costs are variable in naturenature, and the overall expense amounts will fluctuate as volumes increase or decrease. Vessel fuel costs increased $19 million and $26 million for the three- and six-month periods of 2026, respectively, compared to the corresponding periods in 2025, primarily due to higher market prices. While management anticipates this segment will be profitable for the remainder of 2026, no assurances can be made as it is difficult to predict changes in cargo volumes, cargo rates, fuel costs or other voyage costs for future periods.

The increase in operating income for the three-monththree- periodand six-month periods of 2026 compared to the corresponding periods in 2025 primarily reflected higher marginssales onprices, fuelpartially salesoffset by higher production costs, including increased feedstock costs of 64% and more77%, incomerespectively, for the three- and six-month periods of $122026 millioncompared to the corresponding periods in 2025. Income from production tax credits increased $5 million and $17 million, respectively, related to highermore production. Feedstock costs, used to produce biofuels, increased 18% as compared to 2025. Based on current market conditions, management anticipates this segment will be profitable for the remainder of 2026, but no assurances can be made as it is difficult to predict market prices for biodiesel, renewable diesel and credits, the cost of feedstock or production levels for future periods.

The increase in net sales for the three-monththree- periodand six-month periods of 2026 compared to the corresponding periods in 2025 primarily reflected more power generation and higher spot market rates,rates dueand, to a decreaselesser extent, increased power generation. The higher rates were driven by increased fuel prices, while the increase in power generation resulted from reduced output by lower variable-cost producers.producers and less downtime associated with barge maintenance.

OperatingThe increase in operating income remained relatively flat for the three-monththree- periodand six-month periods of 2026 compared to 2025,the ascorresponding periods in 2025 was driven by the increase in net salessales, was mostlypartially offset by higher fuel costs dueresulting from increased prices and consumption. Subsequent to increasedquarter consumptionend, anda prices.routine Whileinspection of EDM III, the power-generating barge that began operations in 2022, identified damage requiring repair. As a result, this barge will be nonoperational for an undetermined period. Based on current circumstances, management anticipatesis uncertain whether this segment will be profitable for the remainder of 2026, and no assurances can be made as it is difficult to predict the duration of repair for EDM III, fuel costs or the extent that spot market rates will fluctuate due to fuel costs or other power producers for future periods.

The Turkey segment represents Seaboard’s non-controlling 52.5% investment in Butterball, LLC (“Butterball”), which is accounted for using the equity method. The improvementincrease in Butterball’s net income for the three-monththree- periodand six-month periods of 2026 compared to the corresponding periods in 2025 was primarily reflecteddriven increasedby margins onhigher turkey productsproduct soldsales dueresulting tofrom higherincreases in both sales prices ofand sales volumes. Sales prices increased 10% asfor each period reflecting continued strength in commodity markets strengthened and the product sales mix shifted toward a greater concentration of value-added products,products whilein productionthe sales mix. Sales volumes increased 6% for each period. Production and processingplant costs werehad relativelyan flat.immaterial Volumesimpact soldon increasedresults 8%as duringimproved fixed-cost absorption from higher volumes helped offset any cost increases. Although commodity turkey market prices have continued to decline over the currentfirst period.half Whileof the year, management currently anticipates this segment will be profitable for the remainder of 2026,2026. However, no assurances can be made as it is difficult to predict market prices for turkey products, the cost of production for future periods and impacts from diseases.

The preparation of Seaboard’s condensed consolidated financial statements requires Seaboard to make estimates, judgments,judgments and assumptions. A summary of significant accounting policies and critical accounting estimates is included in Seaboard’s 2025 10-K. There were no changes to significant accounting policies or critical accounting estimates during the threesix months ended AprilJuly 4, 2026.