Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

Note 5 − Leases

Seaboard leases ports, vessels, contract grower assets, and to a lesser extent, land, buildings and machinery and equipment. Seaboard’s non-lease components are primarily for services related to labor associated with crew services on vessel charter arrangements and caring for hogs in its contract grower agreements.

Seaboard’s operating lease assets and liabilities are reported separately in the consolidated balance sheets. The classifications of Seaboard’s finance leases in the consolidated balance sheets were as follows:

(Millions of dollars)			2023		2022
Finance lease right of use assets, net	Property, plant and equipment, net	$	148	$	198
Finance lease liabilities	Other current liabilities		51		56
Non-current finance lease liabilities	Other liabilities		96		143

Lease cost is included in various line items in the consolidated statements of comprehensive income or capitalized to inventory. Operating lease cost and short-term lease cost are recognized on a straight-line basis over the lease term. Finance lease cost is recognized based on the effective interest method for the lease liability and straight-line amortization of the ROU asset. Variable lease payments are recognized when the circumstance on which those payments are assessed occurs.

The components of lease cost were as follows for the years ended December 31:

(Millions of dollars)		2023		2022		2021
Operating lease cost	$	190	$	184	$	162
Finance lease cost:
Amortization of right of use assets		54		46		17
Interest on lease liabilities		6		6		5
Variable lease cost (a)		10		18		20
Short-term lease cost (b)		9		13		27
Sublease income		(7)		(6)		(8)
Total lease cost	$	262	$	261	$	223

(a)   Includes throughput of cargo containers in excess of minimums and changes in indexed charter-hire rates.

(b)   Short-term leases are primarily for cargo containers and vessels.

Weighted-average lease terms and discount rates were as follows as of December 31, 2023 and 2022:

	Operating Leases		Finance Leases
	2023	2022	2023	2022
Weighted-average remaining term (in years)	6	5	5	5
Weighted-average discount rate	6.63%	6.13%	3.79%	3.44%

Maturities of lease liabilities as of December 31, 2023 were as follows:

		Operating		Finance
(Millions of dollars)		Leases		Leases
2024	$	137	$	55
2025		90		33
2026		74		19
2027		59		13
2028		43		11
Thereafter		114		36
Total undiscounted lease payments		517		167
Less: Imputed interest		(96)		(20)
Total lease liability	$	421	$	147

The following table includes supplemental cash and non-cash information related to leases. Seaboard reports the amortization of ROU assets and changes in operating lease liabilities in other liabilities, exclusive of debt in the consolidated statements of cash flows.

	Years ended December 31,
(Millions of dollars)		2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	193	$	194	$	166
Operating cash flows from finance leases		6		6		5
Financing cash flows from finance leases		57		44		14
ROU assets obtained in exchange for new lease liabilities:
Operating leases	$	117	$	118	$	244
Finance leases		5		116		54