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

 

 

 

Fair Value Measurements at Reporting Date

 

 

 

September 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)

 

$

 

$

3,929 

 

$

292 

 

$

4,221 

 

$

 

$

3,421 

 

$

245 

 

$

3,666 

 

Trade accounts receivable(1)

 

 

 

 

 

 

 

 

 

Unrealized gain on designated derivative contracts(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

18 

 

 

18 

 

 

 

 

 

Foreign exchange

 

 

33 

 

 

33 

 

 

30 

 

 

30 

 

Unrealized gain on undesignated derivative contracts (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

341 

 

 

341 

 

 

176 

 

 

185 

 

Commodities

 

695 

 

789 

 

112 

 

1,596 

 

252 

 

696 

 

220 

 

1,168 

 

Freight

 

33 

 

 

 

33 

 

65 

 

 

 

65 

 

Energy

 

15 

 

 

 

15 

 

 

 

 

 

Deferred purchase price receivable (Note 12 )

 

 

104 

 

 

104 

 

 

79 

 

 

79 

 

Other (3)

 

30 

 

195 

 

 

225 

 

68 

 

176 

 

 

244 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

773 

 

$

5,419 

 

$

404 

 

$

6,596 

 

$

401 

 

$

4,584 

 

$

466 

 

$

5,451 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable(1)

 

$

 

$

525 

 

$

43 

 

$

568 

 

$

 

$

399 

 

$

44 

 

$

443 

 

Unrealized loss on designated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

 

 

 

 

15 

 

 

15 

 

Unrealized loss on undesignated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

 

 

 

Foreign exchange

 

 

387 

 

 

387 

 

 

605 

 

 

606 

 

Commodities

 

839 

 

557 

 

145 

 

1,541 

 

402 

 

304 

 

52 

 

758 

 

Freight

 

25 

 

 

 

26 

 

56 

 

 

 

56 

 

Energy

 

 

 

 

12 

 

31 

 

 

 

33 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

873 

 

$

1,472 

 

$

191 

 

$

2,536 

 

$

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 $9 million and $568 million, at September 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 September 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 September 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 September 30, 2016

 

 

 

 

 

Readily

 

Trade
Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

Balance, July 01, 2016

 

$

127

 

$

917

 

$

(188

)

$

856

 

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

 

(120

)

12

 

7

 

(101

)

Purchases

 

 

171

 

(8

)

163

 

Sales

 

 

(517

)

 

(517

)

Issuances

 

 

 

 

 

Settlements

 

(37

)

 

95

 

58

 

Transfers into Level 3

 

(5

)

208

 

 

203

 

Transfers out of Level 3

 

(1

)

(499

)

51

 

(449

)

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2016

 

$

(36

)

$

292

 

$

(43

)

$

213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 September 30, 2015

 

 

 

 

 

Readily

 

Trade
Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net (2)

 

Total

 

Balance, July 01, 2015

 

$

192

 

$

910

 

$

(357

)

$

745

 

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

 

217

 

109

 

(18

)

308

 

Purchases

 

 

170

 

(5

)

165

 

Sales

 

 

(647

)

 

(647

)

Issuances

 

 

 

 

 

Settlements

 

(91

)

 

261

 

170

 

Transfers into Level 3

 

(1

)

167

 

 

166

 

Transfers out of Level 3

 

 

(98

)

(47

)

(145

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2015

 

$

317

 

$

611

 

$

(166

)

$

762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

Nine Months Ended September 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

 

(87

)

143

 

15

 

71

 

Purchases

 

 

904

 

(220

)

684

 

Sales

 

 

(1,022

)

 

(1,022

)

Issuances

 

(1

)

 

 

(1

)

Settlements

 

(110

)

 

195

 

85

 

Transfers into Level 3

 

(7

)

569

 

(59

)

503

 

Transfers out of Level 3

 

2

 

(547

)

70

 

(475

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2016

 

$

(36

)

$

292

 

$

(43

)

$

213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

Nine Months Ended September 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

 

460

 

167

 

(17

)

610

 

Purchases

 

1

 

1,197

 

(5

)

1,193

 

Sales

 

 

(1,442

)

 

(1,442

)

Issuances

 

 

 

(328

)

(328

)

Settlements

 

(139

)

 

466

 

327

 

Transfers into Level 3

 

 

683

 

(203

)

480

 

Transfers out of Level 3

 

(3

)

(249

)

(46

)

(298

)

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2015

 

$

317

 

$

611

 

$

(166

)

$

762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 September 30, 2016

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

(127

)

$

(12

)

$

2

 

$

(137

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

(35

)

$

24

 

$

(20

)

$

(31

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

Nine 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 September 30, 2016

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

9

 

$

(26

)

$

1

 

$

(16

)

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

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

18

 

$

15

 

$

(2

)

$

31

 

 

(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

 

 

 

 

 

Nine Months Ended September 30,

 

(US$ in millions)

 

Location

 

2016

 

2015

 

Designated Derivative Contracts:

 

 

 

 

 

 

 

Interest Rate

 

Interest income/Interest expense

 

$

3

 

$

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

3

 

$

 

 

 

 

 

 

 

 

 

 

 

Undesignated Derivative Contracts:

 

 

 

 

 

 

 

Interest Rate

 

Interest income (expense)

 

$

(4

)

$

(1

)

Foreign Exchange

 

Foreign exchange gains (losses)

 

$

262

 

$

(356

)

Foreign Exchange

 

Cost of goods sold

 

646

 

(814

)

Commodities

 

Cost of goods sold

 

(531

)

1,086

 

Freight

 

Cost of goods sold

 

(1

)

10

 

Energy

 

Cost of goods sold

 

12

 

(9

)

 

 

 

 

 

 

 

 

Total

 

 

 

$

384

 

$

(84

)

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

Nine Months Ended September 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)

 

$

166

 

$

43

 

Foreign exchange gains (losses)

 

$

13

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

166

 

$

43

 

 

 

$

13

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency denominated debt (3)

 

$

663

 

$

1

 

Foreign currency denominated debt

 

$

 

Foreign currency denominated debt

 

$

 

Foreign Exchange (3)

 

$

653

 

$

(384

)

Foreign exchange gains (losses)

 

$

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,316

 

$

(383

)

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The gain (loss) recognized relates to the effective portion of the hedging relationship.  At September 30, 2016, Bunge expects to reclassify into income in the next 12 months approximately $31 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 2023.

 

 

 

 

Nine Months Ended September 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)

 

$

290

 

$

(89

)

Foreign exchange gains (losses)

 

$

(51

)

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

290

 

$

(89

)

 

 

$

(51

)

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange (3)

 

$

1,685

 

$

235

 

Foreign exchange gains (losses)

 

$

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,685

 

$

235

 

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The gain or (loss) recognized relates to the effective portion of the hedging relationship.  At September 30, 2015, Bunge expected to reclassify into income in the next 12 months approximately ($41) million of after-tax 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 2020.

 

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 September 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 1.9058%

 

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

 

 

 

September  30, 2016

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short)

 

Non-exchange Traded

 

Unit of

 

(US$ in millions)

 

& Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Foreign Exchange

 

 

 

 

 

 

 

 

 

Options

 

$

 

$

(844

)

$

697

 

Delta

 

Forwards

 

 

(7,730

)

4,876

 

Notional

 

Futures

 

(107

)

 

 

Notional

 

Swaps

 

 

(195

)

357

 

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

 

 

 

September 30, 2016

 

 

 

Exchange Traded
and Cleared

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Traded

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Agricultural Commodities

 

 

 

 

 

 

 

 

 

Futures

 

(1,961,645

)

 

 

Metric Tons

 

Options

 

98,239

 

 

 

Metric Tons

 

Forwards

 

 

(32,581,367

)

26,878,507

 

Metric Tons

 

Swaps

 

 

(8,215,554

)

1,043,987

 

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

 

 

 

September 30, 2016

 

 

 

Exchange Cleared

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Ocean Freight

 

 

 

 

 

 

 

 

 

FFA

 

(850

)

 

 

Hire Days

 

FFA Options

 

(284

)

 

 

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

 

 

 

September 30, 2016

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure (3)

 

Natural Gas (3)

 

 

 

 

 

 

 

 

 

Futures

 

2,695,000

 

 

 

MMBtus

 

Swaps

 

 

 

2,655,893

 

MMBtus

 

Options

 

 

 

 

MMBtus

 

Energy - Electricity(3)

 

 

 

 

 

 

 

 

 

Swaps

 

 

(48,000

)

 

MWh

 

Energy—Other

 

 

 

 

 

 

 

 

 

Futures

 

440

 

 

 

Metric Tons

 

Forwards

 

 

 

9,218,608

 

Metric Tons

 

Swaps

 

188,600

 

 

 

Metric Tons

 

Options

 

7,906

 

 

 

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)

Megawatt hours (MWh) and Million British Thermal Units (MMBtus) are the standard units of measurement used to denote an amount of electricity and natural gas, respectively.