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Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
Summary of Significant Accounting Policies  
Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Seaboard Corporation and its domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Financial information from certain foreign subsidiaries is reported on a one- to three-month lag, depending on the specific entity.

Investments in Affiliates

Investments in Affiliates

Investments in non-consolidated affiliates, where Seaboard has significant influence but does not have a controlling interest, are accounted for by the equity method. Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for its proportionate share of earnings or losses and dividends, including consideration of basis differences resulting from the difference between the initial carrying amount of the investment and the underlying equity in net assets. Seaboard reviews its investments in affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. For the CT&M segment, investments in affiliates are primarily in foreign countries, which are less developed than the U.S. and therefore expose Seaboard to greater financial risks. At certain times when there are ongoing losses, local economies are depressed, commodity-based markets are less stable or foreign governments cause challenging business conditions, management evaluates the fair value of the equity method investments for impairment. As the fair value of these investments is not readily determinable, management uses other methods to determine fair value such as estimated future cash flows, including assumptions on growth rates and consideration of other local business conditions as applicable.

Use of Estimates

Use of Estimates

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which require 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Foreign Currency Transactions and Translation

Foreign Currency Transactions and Translation

Seaboard has operations in several foreign countries, and the currencies of the countries fluctuate in relation to the U.S. dollar, resulting in foreign currency gains and losses. Certain CT&M segment subsidiaries located in Ivory Coast, Senegal and Zambia use local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at year-end exchange rates, and income and expenses are translated at average exchange rates. Translation gains and losses are recorded as components of other comprehensive income (loss). Also, certain non-consolidated affiliates, primarily in the CT&M segment, use local currency as their functional currency.
Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents include all demand deposits, overnight investments and other highly liquid investments with original maturities of three months or less.
Supplemental Cash Flow Information

Supplemental Cash Flow Information

The amounts paid for interest and income taxes are as follows:

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Years ended December 31,

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(Millions of dollars)

2024

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2023

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2022

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Interest, net of interest capitalized

$

57

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$

56

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$

35

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Income taxes, net of refunds and tax credit sale proceeds

 

40

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47

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101

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During 2024, Seaboard sold the majority of its 2023 transferable federal investment tax credits and received proceeds of $28 million. Proceeds from the sale of tax credits are presented within cash flows from operating activities.

Non-cash activities include capital expenditures of $25 million, $4 million and $15 million that were included in accounts payable and accrued expenses as of December 31, 2024, 2023 and 2022, respectively. Also, during 2024, there was a non-cash reclassification of a long-term investment in a business development company (“BDC”) to short-term investments. See Note 2 to the consolidated financial statements for further discussion of this reclassification. Non-cash activities associated with leases are included in Note 5 to the consolidated financial statements.

During 2024, the CT&M segment received $29 million on behalf of an affiliate. The amount is included in accounts payable as of December 31, 2024 and is payable upon demand. During 2023, Seaboard paid $30 million to settle a euro-denominated contingent consideration liability related to a 2018 CT&M segment acquisition. Cash flows from financing activities included the $14 million recognized at the acquisition date, and cash flows from operating activities included the remaining $16 million.
Short-Term Investments

Short-Term Investments

Short-term investments are categorized as trading securities and carried at fair value. Changes in the fair value of short-term investments are recorded as unrealized gains and losses included in other investment income (loss), net in the consolidated statements of comprehensive income, with any purchases and sales recorded on a settlement date basis.
Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and generally do not bear interest.

The allowance for credit losses is Seaboard’s best estimate of the amount of probable credit losses using the current expected credit loss model. This model estimates the lifetime of expected credit loss based on historical experience, current conditions and reasonable supportable forecasts. Changes in estimates, developing trends and other new information can have a material effect on future evaluations. As of December 31, 2024 and 2023, Seaboard had gross foreign receivables of approximately $475 million and $522 million, respectively, which generally represent more of a collection risk than the domestic receivables; however, as of December 31, 2024, no individual material amounts were deemed to have a heightened risk of collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The activity within the allowance for credit losses was as follows:

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Balance at

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Balance at

 

(Millions of dollars)

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beginning of year

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Provision(a)

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Net deductions(b)

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end of year

 

Allowance for Credit Losses:

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Year ended December 31, 2024

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$

30

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3

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(2)

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$

31

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Year ended December 31, 2023

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$

31

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5

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(6)

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$

30

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Year ended December 31, 2022

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$

31

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7

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(7)

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$

31

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(a)  Provision amounts are charged to selling, general and administrative expenses.

(b)  Includes write-offs net of recoveries, foreign currency translation adjustments and other adjustments.

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Notes Receivable

Notes Receivable

Notes receivable are included in other receivables, if current, and other non-current assets, if long-term. Seaboard’s notes receivable balances, net of reserves, were $34 million and $41 million as of December 31, 2024 and 2023, respectively. There were notes receivable due from affiliates outstanding of $6 million and $2 million, net as of December 31, 2024 and 2023, respectively. Seaboard monitors the credit quality of notes receivable, using the current expected credit loss model.

The activity within the allowance for notes receivable was as follows:

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Balance at

    

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Balance at

 

(Millions of dollars)

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beginning of year

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Provision

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Net deductions

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end of year

 

Allowance for Notes Receivable:

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Year ended December 31, 2024

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$

16

 

—

 

(2)

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$

14

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Year ended December 31, 2023

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$

17

 

2

 

(3)

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$

16

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Year ended December 31, 2022

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$

18

 

—

 

(1)

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$

17

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Inventories

Inventories

Grain, flour and feed inventories at the CT&M segment’s foreign milling operations are valued at the lower of weighted-average cost and net realizable value (“NRV”). All other inventories are valued at the lower of first-in, first-out (“FIFO”) cost and NRV. In determining NRV, management makes assumptions regarding estimated sales prices, estimated costs to complete and estimated disposal costs. Changes in future market prices or facts and circumstances could result in a material write-down in the value of inventory or decreased future margins on the sale of inventory.
Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are carried at cost and, except for land, depreciated using the straight-line method over an estimated useful life. Property, plant and equipment under finance leases are stated at the present value of minimum lease payments and subsequently amortized using the straight-line method over the earlier of the end of their useful life or the end of the lease term. Routine maintenance, repairs and minor renewals are expensed as incurred, while major renewals and improvements are capitalized.

Property, plant and equipment and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. Impairment is recognized if the carrying amount of the assets exceeds the estimated fair value of the assets. Operational challenges experienced with the renewable diesel plant and unfavorable biofuel and environmental credit market prices have resulted in Liquid Fuels segment operating losses. During the fourth quarter of 2024, management performed an asset impairment test and concluded assets were not impaired.
Right of Use Assets and Lease Liabilities

Right-of-Use Assets and Lease Liabilities

Right-of-use (“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 the lease commencement date. For leases that do not have readily determinable implicit discount rates, Seaboard adjusts its incremental borrowing rate by the local risk-free interest rate on its term loan with a credit risk premium corresponding to Seaboard’s unreported credit rating. Then Seaboard determines discount rates based on term, country and currency where the leased asset is located. Seaboard accounts for lease and non-lease components as a single lease component for all classes of underlying assets. Seaboard does not recognize ROU assets and lease liabilities for short-term leases with terms greater than one month but less than 12 months.
Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill is assessed annually for impairment by each reporting unit during the fourth quarter. Goodwill is assessed more frequently if events or changes in circumstances indicate that impairment is likely. Seaboard first assesses qualitative factors to determine whether it is more likely than not the fair value of any reporting unit is less than its carrying amount. If qualitative factors indicate more likely than not that an impairment is possible, Seaboard performs a quantitative impairment test using discounted cash flow analysis by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.

The changes in the carrying amount of goodwill were as follows:

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Pork

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CT&M

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(Millions of dollars)

    

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Segment

    

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Segment

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Total

Balance, December 31, 2022

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$

22

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$

132

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$

154

Foreign currency translation

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—

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6

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6

Balance, December 31, 2023

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22

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138

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160

Foreign currency translation

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—

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4

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4

Balance, December 31, 2024

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$

22

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$

142

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$

164

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Separable intangible assets with finite lives are amortized over their estimated useful lives and evaluated for impairment similar to property, plant and equipment discussed above. The gross carrying amount and accumulated amortization for finite-lived intangibles were as follows:

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December 31, 2024

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December 31, 2023

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Customer

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Trade

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Customer

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Trade

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(Millions of dollars)

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relationships

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names

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Total

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relationships

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names

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Total

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Gross carrying amount

$

51

$

28

$

79

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$

51

$

28

$

79

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Accumulated amortization and currency translation

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(39)

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(21)

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(60)

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(34)

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(19)

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(53)

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Net carrying amount

$

12

$

7

$

19

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$

17

$

9

$

26

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Amortization of intangible assets was $8 million for each of the years ended December 31, 2024, 2023 and 2022. Using the exchange rates in effect at year-end, estimated amortization of intangible assets as of December 31, 2024 is $8 million each year for the next two years and $3 million in year three.
Accrued Self-Insurance

Accrued Self-Insurance

Seaboard is self-insured for certain levels of workers’ compensation, health care coverage, property damage, vehicle, product recall and general liability. Liabilities associated with some of these risks are estimated based on actuarially-determined amounts and accrued in part by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. Changes in estimates to previously recorded reserves are reflected in current operating results.
Asset Retirement Obligation

Asset Retirement Obligation

Seaboard records a long-lived asset and a related liability for the asset retirement obligation costs associated with the closure of all hog lagoons. Based on detailed assessments and appraisals obtained to estimate the future asset retirement obligation costs, Seaboard records the present value of the projected costs in other non-current liabilities in the consolidated balance sheets. The retirement asset is depreciated over the economic life of the related asset. The following table shows the changes in the asset retirement obligation:

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December 31,

(Millions of dollars)

    

2024

    

2023

Beginning balance

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$

34

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$

32

Accretion expense

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2

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2

Ending balance

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$

36

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$

34
Pension Plans

Pension Plans

Seaboard records annual income and expense amounts relating to its pension plans based on calculations which include various actuarial assumptions, including discount rates, mortality, assumed rates of return, compensation increases and retirement rates. Seaboard reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. The effect of modifications on the value of plan obligations and assets is recognized immediately within other comprehensive income (loss) and amortized into operating earnings over future periods using the corridor approach. Actuarial (gains) losses that exceed 10% of the greater of the pension benefit obligation or the fair value of plan assets are generally amortized over the average remaining working lifetime of the participants. The measurement date for all plans is December 31. Any overfunded status is recognized as an asset and any underfunded status is recognized as a liability. The service cost component of net periodic benefit cost is recorded in either cost of sales or selling, general and administrative expenses depending upon the employee, and the other components of net periodic benefit cost are recorded in miscellaneous, net in the consolidated statements of comprehensive income. Settlements are recognized when lump sum payments on a cumulative basis exceed the service cost plus interest cost for the respective plan.
Revenue Recognition

Revenue Recognition

Almost all of Seaboard’s contracts with its customers are less than one year. Seaboard recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration it expects to receive in exchange for those goods or services. The majority of Seaboard’s revenue arrangements consist of a single performance obligation as the promise to transfer the individual product or service is not separately identifiable from other promises in the contracts, including shipping and handling and customary storage, and, therefore, not distinct. Revenue from goods and services transferred to customers at a single point in time accounts for approximately 85% of Seaboard’s net sales. Substantially all of the sales in Seaboard’s Marine segment are recognized ratably over the transit time for each voyage, as the performance obligation to its customers is satisfied.

Seaboard’s transaction prices are mostly fixed, but occasionally include minimal variable consideration for early payment, volume and other similar discounts, which are highly probable based on the history with the respective customers. Taxes assessed by a governmental authority that are collected by Seaboard from a customer are excluded from sales. Seaboard recognizes a financing component only on obligations that extend longer than one year.

Deferred revenue represents cash payments received in advance of Seaboard’s performance or revenue billed that is unearned. The CT&M segment requires certain customers to pay in advance or upon delivery to avoid collection risk. The Marine segment’s deferred revenue balance primarily relates to the unearned portion of billed revenue when a vessel is on the water and has not arrived at the designated port. Deferred revenue balances are reduced when revenue is recognized. The majority of the deferred revenue balance as of year-end is recognized as revenue during the following quarter.
Research and Development

Research and Development

Seaboard conducts research and development activities to develop new products and to improve existing products and processes. Seaboard incurred research and development expenses of $113 million, $361 million and $210 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Income Taxes

Income Taxes

Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Effects of changes in tax laws, including retroactive changes, are recognized in the financial statements in the period that the changes are enacted.

Each reporting period, Seaboard assesses the realizability of its deferred tax assets and the amount of any valuation allowance for each relevant taxing jurisdiction. A valuation allowance is established if it is more likely than not that the deferred tax assets will not be realized. Realizability of deferred tax assets is based on the weight of available positive and negative evidence to estimate whether sufficient future taxable income will be generated.

Seaboard accounts for the global intangible low-taxed income (“GILTI”) provision and the base-erosion and anti-abuse tax provision taxes in the period incurred. The Organization for Economic Co-operation and Development’s Pillar Two Model Rules (“Pillar Two”) are considered an alternative minimum tax, and therefore deferred taxes are not recognized or adjusted for the estimated future effects of the minimum tax.

For quarters, Seaboard computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income or loss and adjusts the provision for discrete tax items recorded in the period. If an annual effective tax rate cannot be reasonably estimated, Seaboard uses the actual effective tax rate.
Earnings Per Common Share

Earnings Per Common Share

Earnings per common share are based upon the weighted-average shares outstanding during the period. Basic and diluted earnings per share are the same for all periods presented.
Recently Issued Accounting Standards Adopted and Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Adopted

For the year ended December 31, 2024, Seaboard adopted Financial Accounting Standards Board (“FASB”) guidance that requires incremental segment disclosures including the disclosure of significant segment expenses regularly provided to Seaboard’s chief operating decision maker (“CODM”). The disclosure requirements were applied retrospectively to all prior periods presented in the financial statements. These additional disclosures are effective for interim reporting periods beginning on January 1, 2025. See Note 13 to the consolidated financial statements for disclosure impacts from this new accounting standard.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued guidance that requires additional detailed income tax disclosures related to standardization and disaggregation of information in the rate reconciliation of effective tax rates to statutory rates and income taxes paid by jurisdiction. This accounting standard should be applied on a prospective basis, although retrospective adoption is permitted. Seaboard will adopt this guidance for the annual reporting period beginning on January 1, 2025. Seaboard is assessing the impact this guidance will have on its disclosures.

In November 2024, the FASB issued guidance which requires disclosure of incremental income statement expense information on an annual and interim basis, primarily through additional expense disclosures including disaggregation of specific expense categories including, but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. Prospective application is required, and retrospective application is permitted. Seaboard will adopt this guidance for the annual reporting period beginning on January 1, 2027, and interim periods within the annual year beginning on January 1, 2028. Seaboard is assessing the impact this guidance will have on its disclosures.