Basis of Presentation and Accounting Policies (Policies)

6 Months Ended

Jul. 03, 2021

Basis of Presentation and Accounting Policies

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Non-cash investing activities for the six months ended July 3, 2021, included purchases of property, plant and equipment in accounts payable of $28 million. The following table includes supplemental cash and non-cash information related to leases. Seaboard reports the amortization of right of use (“ROU”) assets and changes in operating lease liabilities in other liabilities, exclusive of debt in the condensed consolidated statements of cash flows.

	Six months ended
	July 3,		June 27,
(Millions of dollars)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	75	$	71
Operating cash flows from finance leases		2		2
Financing cash flows from finance leases		5		3
Operating ROU assets obtained in exchange for new operating lease liabilities	$	84	$	43
Finance ROU assets obtained in exchange for new finance lease liabilities		6		27

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill of $3 million as of July 3, 2021 compared to December 31, 2020 was due to foreign currency exchange differences and other adjustments within the Commodity Trading and Milling (“CT&M”) segment. As of July 3, 2021, other intangible assets, included in other non-current assets, were $50 million, net of accumulated amortization of $27 million.

Income Taxes

Income Taxes

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.

Accounting Standards Recently Adopted

Accounting Standard Recently Adopted

On January 1, 2020, Seaboard adopted guidance which requires the use of a new current expected credit loss model in order to determine the allowance for credit losses with respect to receivables, among other financial instruments. This model estimates the lifetime of expected credit loss and replaces the existing incurred loss model. As a result of this adoption, Seaboard recorded a cumulative-effect adjustment of $3 million on January 1, 2020 that decreased retained earnings and increased the allowance for credit losses.