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Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 12 − Income Taxes

Earnings before income taxes were as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Years ended December 31,
(Millions of dollars)		2024			2023			2022
United States	​	$	(41)	​	$	(403)	​	$	(205)
Foreign	​		285	​		509	​		782
Total earnings before income taxes excluding noncontrolling interests	​		244	​		106	​		577
Net earnings attributable to noncontrolling interests	​		2	​		1	​		2
Total earnings before income taxes	​	$	246	​	$	107	​	$	579

​

The components of total income taxes were as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Years ended December 31,
(Millions of dollars)		2024			2023			2022
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	(38)	​	$	(36)	​	$	54
Foreign	​		64	​		65	​		42
State and local	​		—	​		5	​		12
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​		63	​		(118)	​		(94)
Foreign	​		—	​		(1)	​		5
State and local	​		67	​		(35)	​		(22)
Income tax expense (benefit)	​		156	​		(120)	​		(3)
Unrealized changes in other comprehensive income	​		—	​		4	​		8
Total income taxes	​	$	156	​	$	(116)	​	$	5

​

Income taxes for the years ended December 31, 2024, 2023 and 2022 differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to earnings before income taxes excluding noncontrolling interests for the following reasons:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	Years ended December 31,
(Millions of dollars)		2024			2023			2022
Computed “expected” tax expense excluding noncontrolling interests	​	$	51	​	$	22	​	$	121	​
Adjustments to tax expense attributable to:	​	​	​	​	​	​	​	​	​	​
Foreign tax differences	​		48	​		(26)	​		(60)	​
Tax-exempt income	​		(26)	​		(22)	​		(17)	​
State income taxes, net of federal benefit	​		(46)	​		(28)	​		—	​
Foreign entity repatriation	​	​	—	​	​	—	​	​	10	​
Federal tax credits	​		(86)	​		(67)	​		(57)	​
Unrecognized tax benefits	​	​	4	​	​	(1)	​	​	7	​
Valuation allowance	​	​	212	​	​	(3)	​	​	(7)	​
IRS audit settlement	​	​	—	​	​	6	​	​	—	​
Other	​		(1)	​		(1)	​		—	​
Total income tax expense (benefit)	​	$	156	​	$	(120)	​	$	(3)	​

​

Certain of Seaboard’s foreign operations are subject to no income tax or a tax rate that is lower than the U.S. corporate tax rate. Additionally, foreign operations are subject to the GILTI income inclusion which can be offset by U.S. foreign tax credits. During 2024, Seaboard’s ability to utilize foreign tax credits to offset the GILTI income inclusion was limited by U.S. taxable income. Fluctuation of earnings or losses incurred from certain foreign operations conducting business in these jurisdictions impact the mix of taxable earnings. While certain of Seaboard’s operations have historically been subject to low or no income tax, going forward, the enactment of Pillar Two will result in previously low taxed earnings being taxed at least at a 15% minimum effective rate. The Pillar Two rules contain an exemption for qualified international shipping activity that may apply to certain of Seaboard’s international shipping operations. During 2024, certain countries in which Seaboard operates enacted Pillar Two laws, but these countries’ results did not have a material impact on income tax expense.

Tax-exempt income was primarily related to federal blender’s credits on the biodiesel and renewable diesel that the Liquid Fuels segment blends. As a result of these credits, Seaboard recognized non-taxable revenue of $125 million, $103 million and $79 million in net sales for the years ended December 31, 2024, 2023 and 2022, respectively. The receivable from the U.S. government was $25 million and $42 million as of December 31, 2024 and 2023, respectively, included in other receivables. With the passing of the Inflation Reduction Act of 2022, the federal blender’s credits expired December 31, 2024, and a new clean fuel production credit replaced the federal blender’s credits starting in 2025. Regulatory guidance to implement the new credit was issued in early 2025, and the value varies based on the greenhouse gas emissions factor of fuel produced and sold. This clean fuel production credit will be less than the federal blender’s credit, but Seaboard is still evaluating the new guidance and the impact it will have on its financial statements.

State income taxes were lower than prior year primarily due to an increase in certain state income tax credits. In 2023, state taxes were low primarily due to higher domestic losses and a decrease in certain state income tax rates.

Seaboard has invested in research and development activities, capital expenditures and other investments that generate federal tax credits. During 2024, Seaboard’s capital expenditures related to renewable biogas recovery facilities generated $83 million of transferable federal investment tax credits. During 2023, Seaboard’s capital expenditures related to renewable biogas recovery and solar facilities generated $31 million of transferable federal investment tax credits. During 2022, Seaboard invested $52 million in a solar renewable energy project in Guam and received $46 million of federal investment tax credits. Seaboard accounted for this solar investment using the flow-through method and recognized the impact of the investment tax credits in the period earned on a gross basis, with the charge related to the reduction of the investment recorded in other investment income (loss) offset by the benefit of the credits recorded in income tax benefit (expense). Research and development activities primarily accounted for the remainder of the federal tax credits generated.

Components of the net deferred income tax asset were as follows:

​

​	​	​	​	​	​	​
​	​	​	​	​	​	​
​	​	December 31,
(Millions of dollars)	​	2024		​	2023
Deferred income tax assets:	​	​	​	​	​	​
Reserves/accruals	​	$	54	​	$	80
Research and development capitalization	​	​	168	​	​	172
Unrealized loss on investments	​	​	18	​	​	21
Deferred earnings of foreign subsidiaries	​	​	6	​	​	3
Net operating and capital loss carry-forwards	​	​	29	​	​	18
Tax credit carry-forwards	​	​	198	​	​	95
Other	​	​	13	​	​	10
Gross deferred income tax assets before valuation allowance	​	​	486	​	​	399
Less: Valuation allowance	​	​	242	​	​	30
Total deferred income tax assets, net of valuation allowance	​	$	244	​	$	369
Deferred income tax liabilities:	​	​	​	​	​	​
Property, plant and equipment		$	146		$	139
Domestic partnerships	​	​	59	​	​	62
Other	​	​	2	​	​	1
Gross deferred income tax liabilities	​	​	207	​	​	202
Net deferred income tax asset	​	$	37	​	$	167

​

The activity within the valuation allowance account was as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​		Balance at			Charge (credit)		Balance at
(Millions of dollars)	​	beginning of year		​	to expense	​	end of year
Allowance for deferred tax assets:	​	​	​	​	​	​	​	​	​
Year ended December 31, 2024	​	$	30		212	​	$	242	​
Year ended December 31, 2023	​	$	33		(3)	​	$	30	​
Year ended December 31, 2022	​	$	60		(27)	​	$	33	​

​

The increase in the valuation allowance was primarily due to recording a valuation allowance on U.S. deferred tax assets. As of December 31, 2024, after considering U.S. pre-tax book income and the effects of permanent differences, Seaboard’s U.S. operations were in a historical three-year cumulative loss position. Under U.S. GAAP, a three-year cumulative loss position is significant objective negative evidence that it is more likely than not deferred tax assets will not be realized. Accordingly, during 2024, Seaboard recorded a valuation allowance adjustment totaling $212 million, which was primarily related to its U.S. deferred tax assets, with a corresponding charge to income tax expense. A valuation allowance was not needed on certain transferable tax credits that Seaboard has the intent and ability to sell, and these credits are discounted to estimated market value. Seaboard has also recorded a valuation allowance against certain foreign deferred tax assets that are not more likely than not to be realized.

As of December 31, 2024, Seaboard had state net operating loss carry-forwards of approximately $527 million and foreign net operating loss carry-forwards of approximately $49 million, a portion of which expire in varying amounts between 2025 and 2044, while others have indefinite expiration periods. As of December 31, 2024, Seaboard had federal tax credit carry-forwards of approximately $151 million, which expire between 2042 and 2044, and state tax credit carry-forwards of approximately $93 million, a portion of which expire in varying amounts between 2025 and 2030 with the remainder available for indefinite carry-forward.

Historically, Seaboard has considered substantially all foreign profits as being permanently invested in its foreign operations, including all cash and short-term investments held by foreign subsidiaries. During 2022, Seaboard reversed its indefinite reinvestment assertion in connection with certain previously-taxed undistributed earnings of its Seaboard Marine subsidiary due to the tax effectiveness of repatriating. As a result, Seaboard recorded a deferred tax liability of $13 million for federal and state incremental tax costs associated with the repatriation of Seaboard Marine’s previously-taxed foreign undistributed earnings. For all 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.

As of December 31, 2024 and 2023, Seaboard had income taxes receivable of $71 million and $67 million, respectively, primarily related to domestic tax jurisdictions, and had income taxes payable of $34 million and $41 million, respectively, primarily related to foreign tax jurisdictions. Income taxes receivable and income taxes payable are included in other receivables and other current liabilities in the consolidated balance sheets, respectively.

Seaboard’s tax returns are regularly audited by federal, state and foreign tax authorities, which may result in material adjustments. U.S federal tax years prior to 2021 are no longer subject to IRS tax assessment. In the U.S., typically the three most recent tax years are subject to IRS audits, unless an agreement is made to extend the statute of limitations for an audit in progress or the statute is specifically extended by law for certain specialized items. In Seaboard’s major non-U.S. jurisdictions, including the Dominican Republic, Ivory Coast and Senegal, tax years are typically subject to examination for three to six years.

After considering the valuation allowance, as of December 31, 2024 and 2023, Seaboard had $20 million and $49 million, respectively, in total unrecognized tax benefits, which, if recognized, would affect the effective tax rate. Seaboard does not have any material uncertain tax positions in which it is reasonably possible that the total amounts of the unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.

The following table is a reconciliation of the beginning and ending amount of unrecognized tax benefits:

​

​	​	​	​	​	​	​
​	​	​	​	​	​	​
(Millions of dollars)		2024			2023
Beginning balance at January 1	​	$	49	​	$	51
Additions for uncertain tax positions of prior years	​		5	​		2
Decreases for uncertain tax positions of prior years	​		(1)	​		(14)
Additions for uncertain tax positions of current year	​		5	​		18
Decreases related to audit settlements with taxing authorities	​	​	—	​	​	(6)
Lapse of statute of limitations	​		(6)	​		(2)
Ending balance as of December 31	​	$	52	​	$	49

​

Seaboard accrues interest and penalties related to unrecognized tax benefits in income tax expense and had approximately $10 million accrued as of December 31, 2024 and 2023.

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The entire disclosure for income tax.

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