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Leases | 3 Months Ended
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Mar. 30, 2019
Leases |
Leases | Note 4 – Leases Seaboard has operating leases primarily for land, buildings, machinery and equipment and vessels. Seaboard had no material finance leases as of March 30, 2019. Seaboard’s Marine segment leases its PortMiami terminal, among other ports. The Pork segment has contract grower agreements in place with farmers to raise a portion of Seaboard’s hogs using the farmer’s buildings, land and equipment. The Marine and CT&M segments lease vessels for use in operations. Seaboard elected to account for lease and nonlease maintenance components as a single lease component for all classes of underlying assets. Seaboard’s nonlease components are primarily for services related to labor associated with caring for hogs in its contract grower agreements and crew services on vessel charter arrangements. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. As of March 30, 2019, the weighted average remaining lease term for Seaboard’s operating leases was approximately 7 years. Seaboard’s lease terms vary depending upon the class of asset and some leases include options to extend or terminate. Since Seaboard is not reasonably certain to exercise these renewal or termination options, the options are not considered in determining the lease term, and associated potential option payments or penalties are excluded from lease payments. Seaboard has elected not to recognize ROU assets and lease liabilities for short-term leases for all classes of underlying assets. Short-term leases are leases with terms greater than one month, but less than 12 months. Maturities of operating lease liabilities as of March 30, 2019 were as follows:
(Millions of dollars) |  |  |
Remainder of 2019 |  | $ | 99 |
2020 |  |  | 110 |
2021 |  |  | 97 |
2022 |  |  | 72 |
2023 |  |  | 51 |
Thereafter |  |  | 205 |
Total undiscounted lease payments |  |  | 634 |
Less imputed interest |  |  | (130) |
Total operating lease liability |  | $ | 504 |
Seaboard’s weighted average discount rate for operating leases was 6.76% as of March 30, 2019. There were estimates and judgments made in determining Seaboard’s multiple discount rates based on term, country and currency, including developing a secured credit rating and spreading market yield data across maturities and country risk-free rates. Below is Seaboard’s commitments table as of December 31, 2018, that disclosed operating lease payments for the next five years and thereafter. Seaboard had no material capital leases as of December 31, 2018.
|  | Years ended December 31, |  |  |  |
(Millions of dollars) |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | Thereafter |
Ports |  | $ | 18 |  | $ | 18 |  | $ | 19 |  | $ | 19 |  | $ | 20 |  | $ | 109 |
Vessel, time and voyage-charters |  |  | 58 |  |  | 27 |  |  | 26 |  |  | 13 |  |  | 8 |  |  | 25 |
Contract grower agreements |  |  | 47 |  |  | 41 |  |  | 37 |  |  | 27 |  |  | 18 |  |  | 61 |
Other operating lease payments |  |  | 18 |  |  | 13 |  |  | 9 |  |  | 8 |  |  | 6 |  |  | 15 |
Total unrecognized non-cancelable commitments |  | $ | 141 |  | $ | 99 |  | $ | 91 |  | $ | 67 |  | $ | 52 |  | $ | 210 |
The components of lease cost for the three months ended March 30, 2019, were as follows:
(Millions of dollars) |  |  |  |
Operating lease cost |  |  | $ | 33 |
Variable lease cost |  |  |  | 3 |
Short-term lease cost |  |  |  | 10 |
Total lease cost |  |  | $ | 46 |
Operating lease cost is recognized on a straight-line basis over the lease term. Variable lease payments associated with the Company’s leases are recognized when the event, activity or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments on leased assets are primarily for payments in excess of minimums with regards to throughput of containers at PortMiami. Short-term leases are primarily for containers and vessels at Seaboard’s Marine segment. Rental expense for leases with terms of a month or less are excluded from the total lease cost above.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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