Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies

Schedule of impact of change in accounting policy

The impact of the change on Seaboard’s consolidated statements of comprehensive income is summarized below:

	Year ended						Year ended							Year ended
	December 31, 2020						December 31, 2019							December 31, 2018
(Millions of dollars)		As Computed Under LIFO		As Reported Under FIFO		Impact of Change to FIFO		As Previously Reported		Impact of Change to FIFO		As Adjusted		As Previously Reported		Impact of Change to FIFO		As Adjusted
Cost of sales and operating expenses	$	6,612	$	6,552	$	(60)	$	6,400	$	(6)	$	6,394	$	6,060	$	(27)	$	6,033
Gross income	$	514	$	574	$	60	$	440	$	6	$	446	$	523	$	27	$	550
Operating income	$	185	$	245	$	60	$	104	$	6	$	110	$	209	$	27	$	236
Income tax expense (benefit)	$	(13)	$	3	$	16	$	1	$	2	$	3	$	1	$	7	$	8
Net earnings	$	239	$	283	$	44	$	283	$	4	$	287	$	(17)	$	20	$	3
Earnings (loss) per common share	$	205.88	$	244.21	$	38.33	$	242.78	$	3.84	$	246.62	$	(14.61)	$	16.87	$	2.26

The impact of the change on Seaboard’s consolidated balance sheet is summarized below:

		December 31, 2020						December 31, 2019
(Millions of dollars)		As Computed Under LIFO		As Reported Under FIFO		Impact of Change to FIFO		As Previously Reported		Impact of Change to FIFO		As Adjusted
Inventories	$	1,118	$	1,178	$	60	$	1,022	$	64	$	1,086
Deferred income taxes	$	87	$	103	$	16	$	76	$	17	$	93
Retained earnings	$	4,243	$	4,287	$	44	$	3,983	$	47	$	4,030

The impact of the change on Seaboard’s consolidated statements of cash flows is summarized below:

		Year ended						Year ended						Year ended
		December 31, 2020						December 31, 2019						December 31, 2018
		As		As		Impact of		As		Impact of				As		Impact of
		Computed		Reported		Change to		Previously		Change to		As		Previously		Change to		As
(Millions of dollars)		Under LIFO		Under FIFO		FIFO		Reported		FIFO		Adjusted		Reported		FIFO		Adjusted
Net earnings	$	239	$	283	$	44	$	283	$	4	$	287	$	(17)	$	20	$	3
Deferred income taxes	$	(5)	$	11	$	16	$	(55)	$	2	$	(53)	$	(20)	$	7	$	(13)
Inventories	$	(39)	$	(99)	$	(60)	$	(152)	$	(6)	$	(158)	$	(34)	$	(27)	$	(61)

Schedule of amounts paid for interest and income taxes

	Years ended December 31,
(Millions of dollars)	2020		2019		2018
Interest, net of interest capitalized	$	16	$	36	$	43
Income taxes, net of refunds		55		31		35

Summary of supplemental cash and non-cash information related to leases

	Twelve months ended
	December 31,
(Millions of dollars)		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	142	$	137
Operating cash flows from finance leases		4		1
Financing cash flows from finance leases		7		2
Operating ROU assets obtained in exchange for new operating lease liabilities	$	62	$	95
Finance ROU assets obtained in exchange for new finance lease liabilities		50		46

Schedule of allowance for credit losses

	Balance at		Transition			Balance at
(Millions of dollars)	beginning of year		Adjustment(a)	Provision(b)	Net deductions(c)	end of year
Allowance for Credit Losses:
Year Ended December 31, 2020	$	28	3	—	(3)	$	28
Year Ended December 31, 2019	$	33	—	5	(10)	$	28
Year Ended December 31, 2018	$	29	—	7	(3)	$	33

^(a)Adjustment made upon adoption of new guidance to retained earnings.

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

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

Schedule of allowance for notes receivable

	Balance at				Balance at
(Millions of dollars)	beginning of year		Provision	Net deductions	end of year
Allowance for Notes Receivable:
Year Ended December 31, 2020	$	17	—	—	$	17
Year Ended December 31, 2019	$	17	—	—	$	17
Year Ended December 31, 2018	$	16	1	—	$	17

Schedule of changes in the carrying amount of goodwill

		Pork		CT&M
(Millions of dollars)		Segment		Segment		Total
Balance as of December 31, 2018	$	18	$	149	$	167
Acquisition		—		1		1
Foreign currency translation		—		(4)		(4)
Balance as of December 31, 2019		18		146		164
Foreign currency translation		—		4		4
Other adjustments		—		(1)		(1)
Balance as of December 31, 2020	$	18	$	149	$	167

Schedule of gross carrying amount and accumulated amortization for finite-lived intangibles

		December 31, 2020						December 31, 2019
		Customer		Trade				Customer		Trade
(Millions of dollars)		relationships		names		Total		relationships		names		Total
Gross carrying amount	$	51	$	28	$	79	$	50	$	28	$	78
Accumulated amortization and currency translation		(16)		(9)		(25)		(13)		(7)		(20)
Net carrying amount	$	35	$	19	$	54	$	37	$	21	$	58

Schedule of changes in the asset retirement obligation

	Years ended December 31,
(Millions of dollars)	2020		2019
Beginning balance	$	25	$	23
Accretion expense		2		2
Ending balance	$	27	$	25