Basis of Presentation and Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Basis of Presentation and Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Seaboard Corporation and its subsidiaries (“Seaboard”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in Seaboard’s annual report on Form 10-K for the year ended December 31, 2022. The unaudited financial information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. Seaboard’s first three quarterly periods include approximately 13 weekly periods ending on the Saturday closest to the end of March, June and September. Results of operations and cash flows for the periods presented are not necessarily indicative of results to be expected for the full year.

Related-party Transactions

Related-Party Transactions

Seaboard has investments in non-consolidated affiliates to further its business strategies and partner with other entities that have expertise in certain industries and countries. These investments are all accounted for using the equity method of accounting. Related-party transactions with these non-consolidated affiliates for product sales or services are identified on the statement of comprehensive income. As Seaboard conducts its agricultural commodity trading business with third parties, consolidated subsidiaries and non-consolidated affiliates on an interrelated basis, cost of sales on affiliate sales transactions cannot be distinguished without making numerous assumptions, primarily with respect to mark-to-market accounting for commodity derivatives. Purchases of raw materials or services from related parties included in Cost of sales were $22 million and $25 million for the three months ended September 30, 2023 and October 1, 2022, respectively, and $66 million and $59 million for the nine months ended September 30, 2023 and October 1, 2022, respectively.

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Non-cash investing activities for the nine months ended September 30, 2023 included purchases of property, plant and equipment in accounts payable of less than $1 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.

	Nine Months Ended
	September 30,		October 1,
(Millions of dollars)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	145	$	145
Operating cash flows from finance leases		5		5
Financing cash flows from finance leases		43		28
ROU assets obtained in exchange for new lease liabilities:
Operating leases	$	48	$	34
Finance leases		5		113

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill was related to foreign currency translation differences of $8 million within the Commodity Trading and Milling (“CT&M”) segment. Goodwill is initially recorded at fair value and not amortized but is reviewed for impairment at least annually or more frequently if impairment indicators arise. Due to the continued Pork segment operating losses, management performed an interim quantitative goodwill impairment test during the third quarter of 2023 for a reporting unit that has $22 million of goodwill. Based on the assessment, goodwill was determined to not be impaired as the fair value of the reporting unit exceeded the carrying amount.

As of September 30, 2023, intangible assets, included in other non-current assets, were $28 million, which consists of the gross carrying amount of $79 million, net of accumulated amortization of $45 million and net of accumulated foreign currency translation of $6 million.