v3.5.0.2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (TABLES)
6 Months Ended
Jun. 30, 2016
Derivative Instruments  
Schedule of assets and liabilities accounted for at fair value on a recurring basis

 

 

 

Fair Value Measurements at Reporting Date

 

 

 

June 30, 2016

 

December 31, 2015

 

(US$ in millions)

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable inventories (Note 5)

 

$

 

$

4,116 

 

$

917 

 

$

5,033 

 

$

 

$

3,421 

 

$

245 

 

$

3,666 

 

Trade accounts receivable(1)

 

 

 

 

 

 

 

 

 

Unrealized gain on designated derivative contracts(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

17 

 

 

17 

 

 

 

 

 

Foreign exchange

 

 

34 

 

 

34 

 

 

30 

 

 

30 

 

Unrealized gain on undesignated derivative contracts (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

926 

 

 

926 

 

 

176 

 

 

185 

 

Commodities

 

649 

 

1,069 

 

212 

 

1,930 

 

252 

 

696 

 

220 

 

1,168 

 

Freight

 

41 

 

 

 

41 

 

65 

 

 

 

65 

 

Energy

 

15 

 

 

 

17 

 

 

 

 

 

Deferred purchase price receivable (Note 12 )

 

 

103 

 

 

103 

 

 

79 

 

 

79 

 

Other (3)

 

44 

 

365 

 

 

409 

 

68 

 

176 

 

 

244 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

749 

 

$

6,637 

 

$

1,129 

 

$

8,515 

 

$

401 

 

$

4,584 

 

$

466 

 

$

5,451 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable(1)

 

$

 

$

365 

 

$

188 

 

$

553 

 

$

 

$

399 

 

$

44 

 

$

443 

 

Unrealized loss on designated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

248 

 

 

248 

 

 

15 

 

 

15 

 

Unrealized loss on undesignated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

425 

 

 

434 

 

 

605 

 

 

606 

 

Commodities

 

915 

 

1,455 

 

81 

 

2,451 

 

402 

 

304 

 

52 

 

758 

 

Freight

 

33 

 

 

 

35 

 

56 

 

 

 

56 

 

Energy

 

 

 

 

11 

 

31 

 

 

 

33 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

964 

 

$

2,495 

 

$

273 

 

$

3,732 

 

$

490 

 

$

1,326 

 

$

98 

 

$

1,914 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Trade accounts receivable and payable are generally stated at historical amounts, net of write-offs and allowances, with the exception of $5 million and $553 million, at June 30, 2016 and $6 million and $443 million at December 31, 2015, respectively, related to certain delivered inventory for which the receivable and payable, respectively, fluctuate based on changes in commodity prices. These receivables and payables are hybrid financial instruments for which Bunge has elected the fair value option.

 

(2)

Unrealized gains on designated and undesignated derivative contracts are generally included in other current assets. There are no such amounts included in other non-current assets at June 30, 2016 and December 31, 2015, respectively.

 

(3)

Other includes the fair values of marketable securities and investments in other current assets and other non-current assets.

 

(4)

Unrealized losses on designated and undesignated derivative contracts are generally included in other current liabilities. There are no such amounts included in other non-current liabilities at June 30, 2016 and December 31, 2015, respectively.

Reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Three Months Ended June 30, 2016

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, April 01, 2016

 

$

16

 

$

730

 

$

(291

)

$

455

 

Total gains and (losses), realized/unrealized included in cost of goods sold

 

116

 

121

 

3

 

240

 

Purchases

 

 

196

 

(17

)

179

 

Sales

 

 

(250

)

 

(250

)

Issuances

 

 

(7

)

 

(7

)

Settlements

 

(6

)

 

99

 

93

 

Transfers into Level 3

 

(2

)

168

 

(1

)

165

 

Transfers out of Level 3

 

3

 

(41

)

19

 

(19

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2016

 

$

127

 

$

917

 

$

(188

)

$

856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Three Months Ended June 30, 2015

 

 

 

 

 

Readily

 

Trade
Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net (2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, April 01, 2015

 

$

79

 

$

675

 

$

(489

)

$

265

 

Total gains and (losses), realized/unrealized included in cost of goods sold

 

151

 

39

 

1

 

191

 

Purchases

 

1

 

545

 

 

546

 

Sales

 

 

(485

)

 

(485

)

Issuances

 

 

 

(43

)

(43

)

Settlements

 

(29

)

 

205

 

176

 

Transfers into Level 3

 

(1

)

199

 

(31

)

167

 

Transfers out of Level 3

 

(9

)

(63

)

 

(72

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2015

 

$

192

 

$

910

 

$

(357

)

$

745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Six Months Ended June 30, 2016

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, January 01, 2016

 

$

167

 

$

245

 

$

(44

)

$

368

 

Total gains and losses (realized/unrealized) included in cost of goods sold

 

32

 

131

 

8

 

171

 

Purchases

 

 

733

 

(212

)

521

 

Sales

 

 

(499

)

 

(499

)

Issuances

 

(1

)

(6

)

 

(7

)

Settlements

 

(72

)

 

100

 

28

 

Transfers into Level 3

 

(2

)

361

 

(59

)

300

 

Transfers out of Level 3

 

3

 

(48

)

19

 

(26

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2016

 

$

127

 

$

917

 

$

(188

)

$

856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Six Months Ended June 30, 2015

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net (2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, January 01, 2015

 

$

(2

)

$

255

 

$

(33

)

$

220

 

Total gains and losses (realized/unrealized) included in cost of goods sold

 

243

 

59

 

1

 

303

 

Purchases

 

1

 

1,027

 

(1

)

1,027

 

Sales

 

 

(795

)

 

(795

)

Issuances

 

 

 

(327

)

(327

)

Settlements

 

(47

)

 

205

 

158

 

Transfers into Level 3

 

 

515

 

(203

)

312

 

Transfers out of Level 3

 

(3

)

(151

)

1

 

(153

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2015

 

$

192

 

$

910

 

$

(357

)

$

745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

Summary of changes in unrealized gains or (losses) recorded in earnings for Level 3 assets and liabilities

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Three Months Ended

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable and

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

83

 

$

51

 

$

(3

)

$

131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2015

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

23

 

$

(6

)

$

1

 

$

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

 

 

Level 3 Instruments

 

 

 

Fair Value Measurements

 

 

 

Six Months Ended

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable and

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

20

 

$

(7

)

$

(2

)

$

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2015

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

17

 

$

1

 

$

(3

)

$

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Derivatives, net include Level 3 derivative assets and liabilities.

 

(2)

Trade Accounts Receivable and Trade Accounts Payable, net, include Level 3 inventory related receivables and payables.

 

Summary of effect of derivative instruments designated as fair value hedges and undesignated derivative instruments on condensed consolidated statements of income

 

 

 

 

 

Gain or (Loss) Recognized in

 

 

 

 

 

Income on Derivative Instruments

 

 

 

 

 

Six Months Ended June 30,

 

(US$ in millions)

 

Location

 

2016

 

2015

 

Designated Derivative Contracts:

 

 

 

 

 

 

 

 

 

Interest Rate

 

Interest income/Interest expense

 

$

3

 

$

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

3

 

$

 

 

 

 

 

 

 

 

 

 

 

Undesignated Derivative Contracts:

 

 

 

 

 

Foreign Exchange

 

Foreign exchange gains (losses)

 

$

253

 

$

(257

)

Foreign Exchange

 

Cost of goods sold

 

601

 

30

 

Commodities

 

Cost of goods sold

 

(960

)

(42

)

Freight

 

Cost of goods sold

 

(1

)

(13

)

Energy

 

Cost of goods sold

 

9

 

6

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

(98

)

$

(276

)

 

 

 

 

 

 

 

 

 

 

 

Summary of effect of financial instruments designated as cash flow and net investment hedges

 

 

 

Six Months Ended June 30, 2016

 

 

 

 

 

Gain or

 

 

Gain or (Loss)

 

 

 

 

 

 

 

 

 

(Loss)

 

 

Reclassified from

 

 

 

 

 

 

 

 

 

Recognized in

 

 

Accumulated OCI into

 

Gain or (Loss) Recognized

 

 

 

Notional

 

Accumulated

 

 

Income (1)

 

in Income on Derivatives

 

(US$ in millions)

 

Amount

 

OCI (1)

 

Location

 

Amount

 

Location

 

Amount (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange (3)

 

$

178

 

$

30

 

Foreign exchange gains (losses)

 

$

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

178

 

$

30

 

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency denominated debt

 

$

661

 

$

4

 

Foreign currency denominated debt

 

$

 

Foreign currency denominated debt

 

$

 

Foreign Exchange (3)

 

$

1,275

 

$

(373

)

Foreign exchange gains (losses)

 

$

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,936

 

$

(369

)

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The gain (loss) recognized relates to the effective portion of the hedging relationship.  At June 30, 2016, Bunge expects to reclassify into income in the next 12 months approximately $16 million of after-tax gain related to its foreign exchange cash flow hedges and zero for net investment hedges.

 

(2)

There was no gain or loss recognized in income relating to the ineffective portion of the hedging relationships or relating to amounts excluded from the assessment of hedge effectiveness.

 

(3)

The foreign exchange contracts mature at various dates through 2018.

 

 

 

Six Months Ended June 30, 2015

 

 

 

 

 

Gain or

 

 

Gain or (Loss)

 

 

 

 

 

 

 

 

 

(Loss)

 

 

Reclassified from

 

 

 

 

 

 

 

 

 

Recognized in

 

 

Accumulated OCI into

 

Gain or (Loss) Recognized

 

 

 

Notional

 

Accumulated

 

 

Income (1)

 

in Income on Derivatives

 

(US$ in millions)

 

Amount

 

OCI (1)

 

Location

 

Amount

 

Location

 

Amount (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange (3)

 

$

554

 

$

(36

)

Foreign exchange gains (losses)

 

$

(18

)

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

554

 

$

(36

)

 

 

$

(18

)

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange (3)

 

$

2,169

 

$

16

 

Foreign exchange gains (losses)

 

$

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2,169

 

$

16

 

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The gain or (loss) recognized relates to the effective portion of the hedging relationship.  At June 30, 2015, Bunge expected to reclassify into income in the next 12 months approximately $(36) million of after-tax gains (losses) related to its foreign exchange cash flow hedges and zero for net investment hedges.

 

(2)

There was no gain or loss recognized in income relating to the ineffective portion of the hedging relationships or to amounts excluded from the assessment of hedge effectiveness.

 

(3)

The foreign exchange contracts matured at various dates in 2015 and 2016.

 

Interest rate  
Derivative Instruments  
Summary of outstanding derivative instruments

 

Below is a summary of Bunge’s current interest rate swap agreements designated as fair value hedge agreements as of June 30, 2016.

 

Notional

 

Notional

 

 

 

 

 

 

 

Weighted

 

Amount of

 

Amount of

 

 

 

 

 

Weighted Average

 

Average Rate

 

Hedged Obligation

 

Derivative

 

Effective Date

 

Maturity Date

 

Rate Payable (1)

 

Receivable (2)

 

$

500 

 

$

500 

 

November 24, 2015

 

November 24, 2020

 

3 month LIBOR plus 1.91%

 

3.50 

%

600 

 

600 

 

June 16, 2016

 

June 16, 2023

 

6 month EURIBOR plus 1.6778%

 

1.85 

%

 

 

(1)

Interest is payable in arrears semi-annually.

 

(2)

Interest is receivable in arrears semi-annually for U.S. dollar interest rate swap and annually for Euro interest rate swap.

 

Foreign exchange  
Derivative Instruments  
Summary of outstanding derivative instruments

 

 

 

June 30, 2016

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short)

 

Non-exchange Traded

 

Unit of

 

(US$ in millions)

 

& Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Foreign Exchange

 

 

 

 

 

 

 

 

 

Options

 

$

 

$

(908

)

$

255

 

Delta

 

Forwards

 

 

(9,428

)

5,217

 

Notional

 

Futures

 

(106

)

 

 

Notional

 

Swaps

 

 

(703

)

59

 

Notional

 

 

 

(1)

Exchange traded derivatives are presented on a net (short) and long position basis.

 

(2)

Non-exchange traded derivatives are presented on a gross (short) and long position basis.

 

Commodities  
Derivative Instruments  
Summary of outstanding derivative instruments

 

 

 

June 30, 2016

 

 

 

Exchange Traded
and Cleared

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Traded

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Agricultural Commodities

 

 

 

 

 

 

 

 

 

Futures

 

(5,196,415

)

 

 

Metric Tons

 

Options

 

(614,538

)

 

 

Metric Tons

 

Forwards

 

 

(32,537,902

)

34,814,537

 

Metric Tons

 

Swaps

 

30,000

 

(8,365,511

)

359,651

 

Metric Tons

 

 

 

(1)

Exchange traded and cleared derivatives are presented on a net (short) and long position basis.

 

(2)

Non-exchange traded derivatives are presented on a gross (short) and long position basis.

 

Freight  
Derivative Instruments  
Summary of outstanding derivative instruments

 

 

 

June 30, 2016

 

 

 

Exchange Cleared

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Ocean Freight

 

 

 

 

 

 

 

 

 

FFA

 

170

 

 

 

Hire Days

 

FFA Options

 

(470

)

 

 

Hire Days

 

 

 

(1)

Exchange cleared derivatives are presented on a net (short) and long position basis.

 

(2)

Non-exchange cleared derivatives are presented on a gross (short) and long position basis.

 

Energy  
Derivative Instruments  
Summary of outstanding derivative instruments

 

 

 

June 30, 2016

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure (3)

 

Natural Gas (3)

 

 

 

 

 

 

 

 

 

Futures

 

6,269,770

 

 

 

MMBtus

 

Swaps

 

 

 

4,632,084

 

MMBtus

 

Options

 

 

 

 

MMBtus

 

Energy—Other

 

 

 

 

 

 

 

 

 

Futures

 

16,870

 

 

 

Metric Tons

 

Forwards

 

 

 

7,108,552

 

Metric Tons

 

Swaps

 

185,000

 

(96,000

)

 

Metric Tons

 

Options

 

(11,826

)

 

 

Metric Tons

 

 

 

(1)

Exchange traded and cleared derivatives are presented on a net (short) and long position basis.

 

(2)

Non-exchange cleared derivatives are presented on a gross (short) and long position basis.

 

(3)

Million British Thermal Units (MMBtus) is the standard unit of measurement used to denote an amount of natural gas.