v3.7.0.1
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
6 Months Ended
Jun. 30, 2017
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Schedule of assets and liabilities accounted for at fair value on a recurring basis

 

 

Fair Value Measurements at Reporting Date

 

 

 

June 30, 2017

 

December 31, 2016

 

(US$ in millions)

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable inventories (Note 5)

 

$

 

$

 3,753

 

$

 623

 

$

 4,376

 

$

 

$

 3,618

 

$

 237

 

$

 3,855

 

Trade accounts receivable(1)

 

 

7

 

 

7

 

 

6

 

 

6

 

Unrealized gain on designated derivative contracts(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

 

 

 

 

1

 

 

1

 

Foreign exchange

 

 

21

 

 

21

 

 

29

 

 

29

 

Unrealized gain on undesignated derivative contracts (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

4

 

 

4

 

 

1

 

 

1

 

Foreign exchange

 

2

 

306

 

 

308

 

 

312

 

 

312

 

Commodities

 

648

 

530

 

47

 

1,225

 

421

 

431

 

96

 

948

 

Freight

 

18

 

 

4

 

22

 

16

 

 

 

16

 

Energy

 

14

 

 

 

14

 

23

 

1

 

 

24

 

Deferred purchase price receivable (Note 13)

 

 

96

 

 

96

 

 

87

 

 

87

 

Other (3)

 

17

 

689

 

 

706

 

18

 

108

 

 

126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

699

 

$

5,406

 

$

674

 

$

6,779

 

$

478

 

$

4,594

 

$

333

 

$

5,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable(1)

 

$

 

$

659

 

$

453

 

$

1,112

 

$

 

$

478

 

$

44

 

$

522

 

Unrealized loss on designated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

23

 

 

23

 

 

18

 

 

18

 

Foreign exchange

 

 

2

 

 

2

 

 

 

 

 

Unrealized loss on undesignated derivative contracts (4):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

3

 

 

3

 

 

 

 

 

Foreign exchange

 

3

 

307

 

 

310

 

 

233

 

 

233

 

Commodities

 

623

 

423

 

45

 

1,091

 

356

 

444

 

144

 

944

 

Freight

 

21

 

 

3

 

24

 

14

 

 

1

 

15

 

Energy

 

16

 

 

3

 

19

 

9

 

 

2

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

$

663

 

$

1,417

 

$

504

 

$

2,584

 

$

379

 

$

1,173

 

$

191

 

$

1,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Trade accounts receivable and payable are generally stated at historical amounts, net of write-offs and allowances with the exception of $7 million and $1,112 million, at June 30, 2017 and $6 million and $522 million at December 31, 2016, 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 nil and $5 million included in other non-current assets at June 30, 2017 and December 31, 2016, 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 $28 million and $18 million included in other non-current liabilities at June 30, 2017 and December 31, 2016, 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, 2017

 

 

 

 

 

Readily

 

Trade
Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, April 1, 2017

 

$

(72

)

$

743

 

$

(372

)

$

299

 

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

 

27

 

86

 

4

 

117

 

Purchases

 

1

 

380

 

(125

)

256

 

Sales

 

 

(658

)

 

(658

)

Issuances

 

(3

)

 

 

(3

)

Settlements

 

54

 

 

91

 

145

 

Transfers into Level 3

 

(3

)

157

 

(51

)

103

 

Transfers out of Level 3

 

(4

)

(85

)

 

(89

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2017 

 

$

 

$

623

 

$

(453

)

$

170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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, 2016

 

 

 

 

 

Readily

 

Trade
Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net (2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, April 1, 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

 

 

 

Six Months Ended June 30, 2017

 

 

 

 

 

Readily

 

Trade Accounts

 

 

 

 

 

Derivatives,

 

Marketable

 

Receivable/

 

 

 

(US$ in millions)

 

Net (1)

 

Inventories

 

Payable, Net(2)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2017

 

$

(51

)

$

237

 

$

(44

)

$

142

 

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

 

(32

)

72

 

11

 

51

 

Purchases

 

5

 

1,144

 

(455

)

694

 

Sales

 

 

(1,030

)

 

(1,030

)

Issuances

 

(5

)

 

 

(5

)

Settlements

 

71

 

 

91

 

162

 

Transfers into Level 3

 

(7

)

341

 

(55

)

279

 

Transfers out of Level 3

 

19

 

(141

)

(1

)

(123

)

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2017 

 

$

 

$

623

 

$

(453

)

$

170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 1, 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.

 

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, 2017

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

5

 

$

22

 

$

(1

)

$

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

83

 

$

51

 

$

(3

)

$

131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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, 2017

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

(9

)

$

(9

)

$

3

 

$

(15

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

$

20

 

$

(7

)

$

(2

)

$

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 consolidated statements of income

 

 

 

 

Gain or (Loss) Recognized in

 

 

 

 

 

Income on Derivative Instruments

 

 

 

 

 

Six Months Ended June 30,

 

(US$ in millions)

 

Location

 

2017

 

2016

 

Designated Derivative Contracts:

 

 

 

 

 

 

 

Interest Rate

 

Interest income/Interest expense

 

$

8

 

$

3

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

8

 

$

3

 

 

 

 

 

 

 

 

 

 

 

Undesignated Derivative Contracts:

 

 

 

 

 

 

 

Foreign Exchange

 

Foreign exchange gains (losses)

 

$

22

 

$

253

 

Foreign Exchange

 

Cost of goods sold

 

(18

)

601

 

Commodities

 

Cost of goods sold

 

412

 

(960

)

Freight

 

Cost of goods sold

 

(3

)

(1

)

Energy

 

Cost of goods sold

 

(13

)

9

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

400

 

$

(98

)

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Six Months Ended June 30, 2017

 

 

 

 

 

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)

 

$

266

 

$

1

 

Foreign exchange gains (losses)

 

$

17

 

Foreign exchange gains (losses)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

266

 

$

1

 

 

 

$

17

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency denominated debt (4)

 

$

881

 

$

(70

)

Foreign currency denominated debt

 

$

 

Foreign currency denominated debt

 

$

 

Foreign Exchange (3)

 

$

500

 

$

(2

)

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,381

 

$

(72

)

 

 

$

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)The gain (loss) recognized relates to the effective portion of the hedging relationship.  At June 30, 2017, Bunge expects to reclassify into income in the next 12 months approximately $1 million of after-tax gain (loss) related to its foreign exchange cash flow hedges and nil 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 June 2018.

 

(4)The euro denominated loans mature in 2023.

 

 

 

 

 

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(3)

 

$

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 or (loss) recognized relates to the effective portion of the hedging relationship.  At June 30, 2016, Bunge expected to reclassify into income in the next 12 months approximately $16 million of after-tax gains (losses) related to its foreign exchange cash flow hedges and nil 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 matured at various dates through 2020.

 

Interest rate  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Summary of outstanding derivative instruments

As of June 30, 2017, Bunge had fixed-to-variable interest rate swap agreements. Below is a summary of Bunge’s current interest rate swap agreements designated as fair value hedge agreements as of June 30, 2017.

 

Notional

 

 

 

 

 

 

 

 

 

Amount of

 

Notional

 

 

 

Payment

 

 

 

Hedged

 

Amount of

 

 

 

Weighted Average

 

Fixed Rate

 

Obligation

 

Derivative

 

Maturity Date

 

Rate Payable

 

Receivable

 

$

500

 

$

500

 

November 24, 2020

 

3 month LIBOR plus 1.91%

 

3.50

%

euro

800

 

euro

800

 

June 16, 2023

 

6 month EURIBOR plus 1.64%

 

1.85

%

$

550

 

$

550

 

August 15, 2026

 

3 month LIBOR plus 1.12%

 

3.25

%

 

 

 

June  30, 2017

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short)

 

Non-exchange Traded

 

Unit of

 

(US$ in millions)

 

& Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Interest Rate

 

 

 

 

 

 

 

 

 

Futures

 

$

2

 

$

 

$

 

Notional

 

Swaps

 

 

(1,963

)

710

 

Notional

 

Forward Rate Agreements

 

 

 

3,513

 

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.

 

Foreign exchange  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Summary of outstanding derivative instruments

 

 

June  30, 2017

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short)

 

Non-exchange Traded

 

Unit of

 

(US$ in millions)

 

& Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Foreign Exchange

 

 

 

 

 

 

 

 

 

Options

 

$

 

$

(698

)

$

342

 

Delta

 

Forwards

 

 

(10,204

)

9,649

 

Notional

 

Futures

 

(70

)

 

 

Notional

 

Swaps

 

 

(342

)

1,082

 

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  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Summary of outstanding derivative instruments

 

 

June 30, 2017

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Traded

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Agricultural Commodities

 

 

 

 

 

 

 

 

 

Futures

 

765,000

 

 

 

Metric Tons

 

Options

 

(300,894

)

 

 

Metric Tons

 

Forwards

 

 

(31,421,931

)

24,072,031

 

Metric Tons

 

Swaps

 

508,000

 

(3,621,709

)

943,966

 

Metric Tons

 

 

(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.

 

Freight  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Summary of outstanding derivative instruments

 

 

June 30, 2017

 

 

 

Exchange Cleared

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure

 

Ocean Freight

 

 

 

 

 

 

 

 

 

FFA

 

1,661

 

 

 

Hire Days

 

FFA Options

 

212

 

 

 

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  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS  
Summary of outstanding derivative instruments

 

 

June 30, 2017

 

 

 

Exchange Traded

 

 

 

 

 

 

 

 

 

Net (Short) &

 

Non-exchange Cleared

 

Unit of

 

 

 

Long (1)

 

(Short) (2)

 

Long (2)

 

Measure (3)

 

Natural Gas (3)

 

 

 

 

 

 

 

 

 

Futures

 

4,525,431

 

 

 

MMBtus

 

Swaps

 

 

 

673,649

 

MMBtus

 

Options

 

 

 

 

MMBtus

 

 

 

 

 

 

 

 

 

 

 

Energy—Other

 

 

 

 

 

 

 

 

 

Futures

 

16,086

 

 

 

Metric Tons

 

Forwards

 

 

 

6,048,869

 

Metric Tons

 

Swaps

 

249,400

 

 

 

Metric Tons

 

Options

 

 

 

 

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”) are standard units of measurement used to denote an amount of electricity and natural gas, respectively.