SEABOARD CORP DE
For the period ended Sep 28, 2024. Filed Oct 29, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Oct 29, 2024
SEB$3,528.16+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-07-30.
0000088121-24-000074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-10-29.
0000088121-24-000087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 45 previous paragraphs and 47 current paragraphs.
19 unchanged; 20 reworded; 8 added; 5 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Selling, General and Administrative Expenses
Current report
Selling, general and administrative expenses increased $7 million and $16 million for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023, primarily due to higher personnel costs, partially offset by the final adjustment to the contingent consideration liability recognized and paid during the third quarter of 2023.
Current report
Interest Expense
Current report
Interest expense increased $12 million and $9 million for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023. The increase for the three-month period was primarily due to higher interest rates on more outstanding debt and a decrease in capitalized interest on construction in progress. In November 2023, Seaboard amended its Term Loan Credit Agreement and increased the principal amount from $700 million to $975 million. The increase for the nine-month period primarily related to higher interest rates on more outstanding debt, partially offset by an increase in capitalized interest on construction in progress.
Current report
The effective tax rate for the three- and nine-month periods of 2024 was higher as compared to the same periods of 2023 primarily due to a valuation allowance on U.S. deferred tax assets recorded during the third quarter of 2024, partially offset by increased federal and state tax credits. As a result of establishing the valuation allowance against the U.S. deferred tax asset balances, Seaboard was unable to recognize a benefitof its year-to-date domestic losses and certain tax credits. See Note 8 to the condensed consolidated financial statements for additional information on factors that contributed to the valuation allowance during the third quarter of 2024. Seaboard has a history of using tax credits before they expire, and although U.S. GAAP required Seaboard to record a valuation allowance based on past results, management currently believes that these deferred tax assets will be realized in the future over time, although there can be no assurance as to the timing or if these will be realized at all. Seaboard’s federal tax credits have long carryforward periods that expire between 2042 and 2044. Despite recent pre-tax book losses in the U.S. operations as a result of challenging commodity conditions, Seaboard has no federal net operating loss carryforwards.
Current report
For the three-month period of 2024, higher volumes of pork products and market hogs sold contributed sales of $31 million and were offset by a decrease in the market price, reducing sales $32 million. Renewable natural gas sales increased, but sales are currently not significant. For the nine-month period of 2024, higher volumes of pork products and market hogs sold contributed sales of $102 million and higher market prices contributed to an increase in sales of $34 million.
Current report
With the passing of the Inflation Reduction Act of 2022, the federal blender’s credits are expected to expire after December 31, 2024. A new clean fuel production credit will replace the federal blender’s credits starting in 2025 with value based on the greenhouse gas emissions factor of fuel produced and sold. This clean fuel production credit is expected to be less than the federal blender’s credit; however regulatory guidance is pending in order to implement this new credit. For the nine-month periods of 2024 and 2023, the federal blender’s credits included in sales was $88 million and $82 million, respectively.
Current report
The decrease in sales for the three-month period of 2024 primarily reflected lower spot market rates due to lower fuel prices. The decrease in sales for the nine-month period of 2024 primarily reflected less power generation due to repairs and maintenance conducted during 2024.
Removed paragraphs (5)
Previous report
Other Investment Income, Net
Previous report
Other investment income, net decreased $18 million and $27 million for the three- and six-month periods of 2024, respectively, compared to the same periods in 2023, primarily due to unrealized mark-to-market losses on short-term investments.
Previous report
The increase in sales for the three- and six-month periods was primarily a result of higher prices due to commodity markets and higher volumes of pork products and market hogs sold due to more production. Higher prices contributed sales of $51 million and $66 million, and higher volumes contributed sales of $27 million and $63 million for the three- and six-month periods, respectively. This segment also produces renewable natural gas, but sales are currently not significant as production is dependent upon maturity of the lagoons.
Previous report
Had Seaboard not applied mark-to-market accounting to its derivative instruments, operating income for this segment would have been higher by $1 million and $29 million for the three- and six-month periods of 2024, respectively, and higher by $14 million and $7 million for the three- and six-month periods of 2023, respectively. While management believes its commodity futures, options and foreign exchange contracts are primarily economic hedges of its firm purchase and sales contracts and anticipated sales contracts, Seaboard does not perform the extensive record-keeping required to account for these transactions as hedges for accounting purposes. Accordingly, while the changes in value of the derivative instruments were marked to market, the changes in value of the firm purchase or sales contracts were not. As products are delivered to customers, these existing mark-to-market adjustments should be primarily offset by realized margins or losses as revenue is recognized over time, and these mark-to-market adjustments could reverse in 2024. Eliminating these mark-to-market adjustments provides another presentation to compare and evaluate period-to-period financial results for this segment.
Previous report
The decrease in sales primarily reflected less power generation, impacting sales $4 million and $12 million for the three- and six-month periods, respectively, due to power generation from lower variable-cost producers and maintenance conducted primarily in the first quarter, partially offset by an increase in spot market rates due to higher fuel prices.
Reworded paragraphs (20)
Previous wording
Liquidity includes cash and cash equivalents, short-term investments and available borrowing capacity under lines of credit facilities. As of June 29, 2024, Seaboard had cash and short-term investments of nearly $1.2 billion and total net working capital of $924 million. The following table presents a summary of Seaboard’s available borrowing capacity under lines of credit.
Current wording
Liquidity includes cash and cash equivalents, short-term investments and available borrowing capacity under lines of credit facilities. As of September 28, 2024, Seaboard had cash and short-term investments of nearly $1.2 billion and total net working capital of $874 million. The following table presents a summary of Seaboard’s available borrowing capacity under lines of credit.
Previous wording
As of June 29, 2024, $60 million of the $1.2 billion of cash and short-term investments were held by Seaboard’s foreign subsidiaries. Historically, Seaboard has considered substantially all foreign profits as being permanently invested in its foreign operations, including all cash and short-term investments held by foreign subsidiaries. During 2022, Seaboard reversed its indefinite reinvestment assertion in connection with certain previously-taxed undistributed earnings of its Seaboard Marine subsidiary due to the tax effectiveness of repatriating. For all other foreign subsidiaries, Seaboard intends to continue permanently reinvesting their funds outside the U.S. as they continue to demonstrate no need to repatriate them to fund Seaboard’s U.S. operations for the foreseeable future. As a result, Seaboard has not recorded deferred taxes for state or foreign withholding taxes that would result upon repatriation of these funds to the U.S. Determination of the tax that might be paid on unremitted earnings if eventually remitted is not practical due to the complexity of the multi-jurisdictional tax environment in which Seaboard operates.
Current wording
As of September 28, 2024, $87 million of the $1.2 billion of cash and short-term investments were held by Seaboard’s foreign subsidiaries. Historically, Seaboard has considered substantially all foreign profits as being permanently invested in its foreign operations, including all cash and short-term investments held by foreign subsidiaries. During 2022, Seaboard reversed its indefinite reinvestment assertion in connection with certain previously-taxed undistributed earnings of its Seaboard Marine subsidiary due to the tax effectiveness of repatriating. For all other foreign subsidiaries, Seaboard intends to continue permanently reinvesting their funds outside the U.S. as they continue to demonstrate no need to repatriate them to fund Seaboard’s U.S. operations for the foreseeable future. As a result, Seaboard has not recorded deferred taxes for state or foreign withholding taxes that would result upon repatriation of these funds to the U.S. Determination of the tax that might be paid on unremitted earnings if eventually remitted is not practical due to the complexity of the multi-jurisdictional tax environment in which Seaboard operates.
Previous wording
Cash provided by operating activities decreased $179 million for the six months ended June 29, 2024, compared to the same period in 2023. Less cash generated from working capital of $252 million and less dividends received from affiliates of $25 million were partially offset by an increase in net earnings, adjusted for non-cash items, of $101 million. The working capital changes primarily reflected a decrease in cash flows from receivables due to lower revenue and timing of collections and an increase in cash flows related to payments of other liabilities.
Current wording
Cash provided by operating activities decreased $362 million for the nine months ended September 28, 2024, compared to the same period in 2023. The decrease in cash generated from working capital was $361 million on a net basis. The working capital changes primarily reflected a decrease in cash flows from receivables of $267 million due to timing of collections, a decrease in cash flows for inventories due to lower commodity prices of $48 million and an increase in cash flows related to payments of other liabilities of $35 million. The change in earnings, adjusted for non-cash items, including the valuation allowance adjustment of $176 million to offset U.S. deferred tax assets for the nine-months ended September 28, 2024, was not significant period-over-period.
Previous wording
Cash flows from investing activities for short-term investments are part of Seaboard’s overall liquidity management strategy. Short-term investment purchases are a result of the investment of excess cash, asset allocation from the active management of the portfolio and re-investment of matured securities. Proceeds from the sale of short-term investments may be used to fund working capital needs and capital expenditure purchases. During the six months ended June 29, 2024, Seaboard invested $237 million in property, plant and equipment, including biogas recovery projects in the Pork segment and installment payments on vessels under construction in the Marine segment and other investments. At certain hog farms, the Pork segment is constructing biogas recovery facilities to capture methane from its hog lagoons and inject it as renewable natural gas into the local pipeline infrastructure. The payments for vessels are made in accordance with milestones achieved throughout construction and two vessels are expected to be completed in 2024. For the remainder of 2024, management has budgeted capital expenditures totaling approximately $320 million. Management anticipates paying for these capital expenditures from a combination of available cash, proceeds from the sale of available short-term investments and Seaboard’s available borrowing capacity.
Current wording
Cash flows from investing activities for short-term investments are part of Seaboard’s overall liquidity management strategy. Short-term investment purchases are a result of the investment of excess cash, asset allocation from the active management of the portfolio and re-investment of matured securities. Proceeds from the sale of short-term investments may be used to fund working capital needs and capital expenditure purchases. During the nine months ended September 28, 2024, Seaboard invested $373 million in property, plant and equipment, including biogas recovery projects in the Pork segment and installment payments on vessels under construction in the Marine segment and other investments. At certain hog farms, the Pork segment is constructing biogas recovery facilities to capture methane from its hog lagoons and inject it as renewable natural gas into the local pipeline infrastructure. One dual-fueled vessel was completed and delivered during the third quarter of 2024, and another vessel is expected to be completed during the fourth quarter of 2024. For the remainder of 2024, management has budgeted capital expenditures totaling approximately $165 million. Management anticipates paying for these capital expenditures from a combination of available cash, proceeds from the sale of available short-term investments and Seaboard’s available borrowing capacity.
Previous wording
As Seaboard’s operations are heavily commodity-driven, financial performance for certain subsidiaries is very cyclical based on respective commodity markets. Beginning in the second quarter of 2024, Liquid Fuels is a separate reportable segment and the former Sugar and Alcohol segment is no longer a separate reportable segment. The historical periods presented have been recast to reflect these changes. See Note 7 to the condensed consolidated financial statements for further discussion.
Current wording
Beginning in the second quarter of 2024, Liquid Fuels became a separate reportable segment and the former Sugar and Alcohol segment became part of All Other. The historical periods presented have been recast to reflect these changes. See Note 7 to the condensed consolidated financial statements for further discussion.
Previous wording
Net sales decreased $184 million and $492 million for the three- and six-month periods of 2024, respectively, compared to the same periods in 2023. The decrease for the three-month period reflected a decline of $204 million in CT&M segment sales primarily due to lower prices of commodities sold. The decrease for the six-month period primarily reflected a decline of $358 million in CT&M segment sales due to lower prices of commodities sold, partially offset by higher volumes sold, a decline in Marine segment sales of $147 million due to lower freight rates, and a decline in Liquid Fuels segment sales of $117 million due to lower volumes of fuel and environmental credits sold. The decreases were partially offset by an increase in Pork segment sales of $152 million due to higher selling prices and more pork products and market hogs sold. See the net sales discussion by reportable segment below for more details.
Current wording
Net sales decreased $170 million and $662 million for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023. The decrease for the three-month period primarily reflected a decline of $138 million in CT&M segment sales due to lower prices of commodities sold. The decrease for the nine-month period primarily reflected a decline of $496 million in CT&M segment sales due to lower prices of commodities sold, partially offset by higher volumes sold, a decline in Marine segment sales of $156 million due to lower freight rates, and a decline in Liquid Fuels segment sales of $143 million due to lower prices of environmental credits sold. The decreases were partially offset by an increase in Pork segment sales of $162 million due primarily to higher volumes of pork products and market hogs sold. See the net sales discussion by reportable segment below for more details.
Previous wording
Operating income increased $34 million and $77 million for the three- and six-month periods of 2024, respectively, compared to the same periods in 2023. The increase primarily reflected less Pork segment operating loss of $101 million and $282 million due to higher margins on the sale of pork products and market hogs, respectively, partially offset by a $42 million and $123 million decrease in Marine segment operating income due to lower voyage revenue, and a $28 million and $45 million decrease in Liquid Fuels segment operating income due to lower margins on fuel sales for the three- and six-month periods, respectively. See the operating income discussion by reportable segment below for more details.
Current wording
Operating income decreased $35 million and increased $42 million for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023. The decrease for the three-month period primarily reflected a decline in operating income in the Liquid Fuels and Marine segments of $30 million and $41 million, respectively, partially offset by an increase in Pork segment operating income of $52 million. The increase in operating income for the nine-month period primarily reflected an increase in Pork segment operating income of $334 million due to higher margins on the sale of pork products and market hogs, partially offset by a $164 million decrease in Marine segment operating income due to lower voyage revenue, and a $75 million decrease in Liquid Fuels segment operating income. See the operating income discussion by reportable segment below for more details.
Previous wording
Foreign currency gains, net decreased $18 million and $15 million for the three- and six-month periods of 2024, respectively, compared to the same periods in 2023, primarily due to fluctuations in the South African rand.
Current wording
Foreign currency gains, net decreased $9 million and $24 million for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023, primarily due to fluctuations in the South African rand.
Previous wording
The effective tax rate for the three- and six-month periods of 2024 was lower as compared to the same periods of 2023 due to increased federal and state tax credits. In 2021, the Organisation for Economic Co-operation and Development released Pillar Two Model Rules (“Pillar Two”). The model is designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each jurisdiction where they operate. The rules include transitional safe harbors that provide temporary exemption of operations in some jurisdictions if certain criteria are met. Some foreign jurisdictions in which Seaboard operates enacted Pillar Two legislation effective in 2024, but the impact will not be material to Seaboard in 2024. Seaboard is continuing to monitor legislative developments across relevant jurisdictions and the potential impact on future results.
Current wording
In 2021, the Organisation for Economic Co-operation and Development released Pillar Two Model Rules (“Pillar Two”). The model is designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each jurisdiction where they operate. The rules include transitional safe harbors that provide temporary exemption of operations in some jurisdictions if certain criteria are met. Some foreign jurisdictions in which Seaboard operates enacted Pillar Two legislation effective in 2024, but the impact will not be material to Seaboard in 2024. Seaboard is continuing to monitor legislative developments across relevant jurisdictions and the potential impact on future results.
Previous wording
The decrease in operating loss for the three- and six-month periods reflected higher margins on pork products and market hogs sold, primarily due to higher selling prices and lower hog production costs, including lower feed costs of $63 million and $100 million, respectively. Also, inventory adjustments to the lower of cost and net realizable value (“LCNRV”) reserve resulted in an increase of $40 million in operating loss for the three-month period and a $53 million decrease in operating loss for the six-month period based on a comparison of changes to the reserve per market prices at each respective period end. Inventory adjustments to the LCNRV reserve have been necessary since the third quarter of 2022 to properly state the hog inventory balances at quoted future market prices for pork products and grain costs. With the more favorable pork prices and lower grain commodity costs, the LCNRV reserve was not needed as of June 29, 2024. Management is unable to predict market prices for pork products, the cost of feed or third-party hogs for future periods; however, based on current conditions, management anticipates this segment to be near break-even for the remainder of 2024.
Current wording
The increase in operating income for the three- and nine-month periods of 2024 reflected higher margins on pork products and market hogs sold, primarily due to higher sales and lower hog production costs, including lower feed costs of $41 million and $141 million, respectively, and mark-to-market gains on derivative contracts. Also, inventory adjustments to the lower of cost and net realizable value (“LCNRV”) reserve resulted in a decrease of $9 million and an increase of $44 million in operating income for the three- and nine-month periods of 2024, respectively, based on a comparison of changes to the reserve per market prices at each respective period end. Inventory adjustments to the LCNRV reserve were necessary since the third quarter of 2022 to properly state the hog inventory balances at quoted future market prices for pork products and grain costs. With more favorable pork prices and lower grain commodity costs, the LCNRV reserve was not needed for the second and third quarter of 2024. Management is unable to predict market prices for pork products, the cost of feed or third-party hogs for future periods; however, based on current conditions, management anticipates this segment to be profitable for the remainder of 2024.
Previous wording
The decrease in sales for the three- and six-month periods was due to lower fuel and environmental credit sales. Lower volumes of fuel sold decreased sales $19 million and $72 million for the three- and six-month periods, respectively, as the renewable diesel plant was not operational for approximately four months during the first half of 2024 due to maintenance and repairs and less biodiesel was sold due to the timing of sales. Management expects consistent production at the renewable diesel plant throughout the remainder of 2024. Lower market values of environmental credits decreased sales $12 million and $53 million for three- and six-month periods, respectively.
Current wording
The decrease in sales for the three-month period of 2024 was due to lower market prices and volumes of environmental credits sold of $36 million and $9 million, respectively, partially offset by an increase in fuel sales of $19 million. Higher volumes of fuel sold increased sales $49 million, partially offset by lower prices which decreased sales $29 million. The increase in fuel volumes sold was primarily a result of consistent production at the renewable diesel plant during the third quarter of 2024. The decrease in sales for the nine-month period of 2024 was due to lower environmental credits sales and fuel sales of $94 million and $49 million, respectively. The decrease in environmental credit sales was primarily the result of lower market prices which decreased sales $88 million. As the renewable diesel plant was not operational for approximately four months during the first half of 2024 due to maintenance and repairs, fuel sales were impacted. Lower volumes of fuel sold decreased sales $30 million.
Previous wording
Operating income decreased for the three- and six-month periods primarily due to a decrease in margins of $27 million and $44 million, respectively. Margins decreased for the three- and six-month periods due to lower volumes produced and sold and higher maintenance and repair costs incurred at the renewable diesel plant, partially offset by a decrease in variable production costs, with a larger impact for the six-month period due to maintenance performed. Management is unable to predict market prices for biodiesel, renewable diesel, environmental credits, or the cost of feedstocks for future periods; however, based on current market conditions with lower renewable diesel and biodiesel prices and higher animal fat feedstock costs, management is uncertain whether this segment will be profitable for the remainder of 2024. Commodity markets are volatile, and management believes that current industry economic conditions are temporary.
Current wording
Operating income decreased for the three- and nine-month periods of 2024 primarily due to a decrease in margins of $28 million and $71 million, respectively. Margins decreased for the three-month period due to lower sales prices and higher production costs on fuel gallons sold. The decrease for the nine-month period primarily reflected lower sales, partially offset by a decrease in production costs. Management is unable to predict market prices for biodiesel, renewable diesel, environmental credits, or the cost of feedstocks for future periods; however, based on current market conditions with lower renewable diesel and biodiesel prices and higher animal fat feedstock costs, management is uncertain whether this segment will be profitable for the remainder of 2024. Commodity markets are volatile, and management believes that current industry economic conditions are temporary.
Previous wording
The decrease in sales for the three- and six-month periods was primarily due to lower average sales prices of commodities sold which decreased sales $239 million and $541 million, respectively. The decrease was partially offset by higher volumes sold, which increased sales $34 million and $183 million for the three- and six-month periods, respectively. Sales prices for many of Seaboard’s products are directly affected by both domestic and worldwide supply and demand for commodities and competing products, all of which are determined by constantly changing market forces.
Current wording
The decrease in sales for the three- and nine-month periods of 2024 was primarily due to lower average sales prices of commodities sold which decreased sales $212 million and $753 million, respectively. The decrease was partially offset by higher volumes sold, which increased sales $74 million and $257 million for the three- and nine-month periods, respectively. Sales prices for many of Seaboard’s products are directly affected by both domestic and worldwide supply and demand for commodities and competing products, all of which are determined by constantly changing market forces.
Previous wording
The increase in operating income for the three-month period primarily reflected the decrease of $13 million in mark-to-market losses on derivative contracts. The decrease in operating income for the six-month period reflected an increase of $22 million in mark-to-market losses on derivatives contracts, partially offset by higher margins due to lower commodity costs. Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which this segment operates and the volatility in the commodity markets, management is unable to predict sales and operating results for this segment for future periods; however, management anticipates this segment will be profitable for the remainder of 2024, without the effects of mark-to-market adjustments on derivative contracts that cannot be predicted.
Current wording
The slight decrease in operating income for the three-month period of 2024 primarily reflected lower margins related to the decline in sales prices. The decrease in operating income for the nine-month period of 2024 reflected an increase of $22 million in mark-to-market losses on derivatives contracts, partially offset by higher margins due to lower commodity costs. Due to worldwide commodity price fluctuations, the uncertain political and economic conditions in the countries in which this segment operates and the volatility in the commodity markets, management is unable to predict sales and operating results for this segment for future periods; however, management anticipates this segment will be profitable for the remainder of 2024, without the effects of mark-to-market adjustments on derivative contracts that cannot be predicted.
Previous wording
CT&M’s investments in affiliates are represented by numerous milling, feed and protein affiliates, with no individual investment representing a material fluctuation. The increase in income from affiliates for the three- and six-month periods was primarily due to higher margins with lower commodity costs.
Current wording
CT&M’s investments in affiliates are represented by numerous milling, feed and protein affiliates, with no individual investment representing a material fluctuation. The increase in income from affiliates for the three- and nine-month periods of 2024 was primarily due to higher margins with lower commodity costs.
Previous wording
The decrease in sales for the three- and six-month periods was due to an overall decline in average freight rates due to competitive pressures. The decrease was partially offset by an increase in cargo volumes, which increased 10% and 3% for the three- and six-month periods of 2024, respectively, compared to the same periods in 2023.
Current wording
The decrease in sales for the three- and nine-month periods of 2024 was due to an overall decline in average freight rates due to competitive pressures, partially offset by an increase in cargo volumes. Cargo volumes increased 9% and 5% for the three- and nine-month periods of 2024, respectively, compared to the same periods in 2023.
Previous wording
The decrease in operating income for the three-month period was primarily the result of lower voyage revenue and an increase in terminal services and trucking costs due to higher cargo volumes, partially offset by lower charter-hire costs. The decrease in operating income for the six-month period was primarily the result of lower voyage revenue, partially offset by lower voyage-related costs, primarily charter-hire costs. More recently, charter-hire rates are rising due to increased global demand for vessels. Management cannot predict changes in fuel costs or other voyage costs, cargo
Current wording
The decrease in operating income for the three-month period of 2024 was primarily the result of lower voyage revenue and an increase in voyage-related costs primarily due to the increase in cargo volumes and rates of some services received, such as stevedoring. The decrease in operating income for the nine-month period of 2024 was primarily the result of lower voyage revenue. An increase in stevedoring and terminal costs was offset by lower charter-hire costs. Management cannot predict changes in fuel costs or other voyage costs, cargo volumes or cargo rates for future periods; however, management anticipates this segment will be profitable for the remainder of 2024.
Previous wording
The decrease in operating income for the three- and six-month periods primarily reflected lower revenue. During the three-month period of 2024, lower fuel costs due to less consumption were offset by higher fuel prices. During the six-month period of 2024, lower fuel costs due primarily to less consumption were partially offset by maintenance costs incurred in the first quarter of 2024. Management cannot predict fuel costs or the extent that spot market rates will fluctuate compared to fuel costs or other power producers for future periods; however, management anticipates this segment will be profitable for the remainder of 2024. While EDM II, the barge that began operations in 2012, remains in operation in the Dominican Republic, Seaboard continues to explore strategic alternatives for this barge, including a sale or relocation.
Current wording
The decrease in operating income for the three- and nine-month periods of 2024 primarily reflected lower revenue. During the nine-month period of 2024, lower fuel costs were offset by an increase in maintenance costs. Management cannot predict fuel costs or the extent that spot market rates will fluctuate compared to fuel costs or other power producers for future periods; however, management anticipates this segment will be profitable for the remainder of 2024. While EDM II, the barge that began operations in 2012, remains in operation in the Dominican Republic, Seaboard continues to explore strategic alternatives for this barge, including a sale or relocation.
Previous wording
The Turkey segment represents Seaboard’s 52.5% investment in Butterball, which is accounted for using the equity method. Butterball’s net income decreased $17 million and $50 million for the three- and six-month periods of 2024, compared to the same periods in 2023, respectively. The decrease in net income was primarily due to lower margins on turkey products sold. The decrease in sales of $51 million and $89 million for the three- and six-month periods, respectively, were partially offset by a decrease in production costs primarily related to lower feed costs. The average selling price decreased 7% for each period due to a decline in commodity pricing, and volumes sold decreased 5% and 4% for the three- and six-month periods, respectively. Management is unable to predict market prices for turkey products or the cost of feed for future periods; however, management anticipates this segment will be profitable for the remainder of 2024.
Current wording
The Turkey segment represents Seaboard’s 52.5% investment in Butterball, which is accounted for using the equity method. Butterball’s net income decreased $28 million and $78 million for the three- and nine-month periods of 2024, compared to the same periods in 2023, respectively. The decrease in net income was primarily due to a decrease in sales of $50 million and $139 million for the three- and nine-month periods of 2024, respectively, due to weaker pricing, partially offset by lower production costs. The average selling price decreased 10% and 8% for the three- and nine-month periods of 2024, respectively, primarily due to lower market prices. Sales volumes did not have a significant impact on the results of the three-and nine-month periods. Management is unable to predict market prices for turkey products or the cost of feed for future periods; however, management anticipates this segment will be profitable for the remainder of 2024.
Previous wording
The preparation of Seaboard’s condensed consolidated financial statements requires Seaboard to make estimates, judgments, and assumptions. A summary of significant accounting policies and the critical accounting estimate is included in Seaboard’s annual report on Form 10-K for the year ended December 31, 2023. There were no changes to significant accounting policies or the critical accounting estimate during the six months ended June 29, 2024.
Current wording
The preparation of Seaboard’s condensed consolidated financial statements requires Seaboard to make estimates, judgments, and assumptions. A summary of significant accounting policies and the critical accounting estimate is included in Seaboard’s annual report on Form 10-K for the year ended December 31, 2023. There were no changes to significant accounting policies or the critical accounting estimate during the nine months ended September 28, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
volumes or cargo rates for future periods; however, management anticipates this segment will be profitable for the remainder of 2024.