TRADE STRUCTURED FINANCE PROGRAM

Bunge engages in various trade structured finance activities to leverage the value of its trade flows across its operating regions. For the nine months ended September 30, 2017 and 2016, the net returns from these activities were $27 million and $45 million, respectively, and were included as a reduction of cost of goods sold in the accompanying condensed consolidated statements of income. These activities include programs under which Bunge generally obtains U.S. dollar-denominated letters of credit (“LCs”) (each based on an underlying commodity trade flow) from financial institutions and time deposits denominated in either the local currency of the financial institutions' counterparties or in U.S. dollars, as well as foreign exchange forward contracts, and other programs in which trade related payables are set-off against receivables, all of which are subject to legally enforceable set-off agreements.

The table below summarizes the assets and liabilities included in the condensed consolidated balance sheets and the associated fair value amounts at September 30, 2017 and December 31, 2016, related to the program. The fair values approximated the carrying amount of the related financial instruments.



(US$ in millions)	September 30, 2017		December 31, 2016
Current assets:
Carrying value of time deposits	$	—	$	64
Fair value (Level 2 measurement) of time deposits	$	—	$	64

Non-current assets:
Carrying value of time deposits	$	313	$	464
Fair value (Level 2 measurement) of time deposits	$	313	$	464

Current liabilities:
Carrying value of letters of credit obligations	$	313	$	528
Fair value (Level 2 measurement) of letters of credit obligations	$	313	$	528

As of September 30, 2017 and December 31, 2016, time deposits and LCs of $6,766 million and $5,732 million, respectively, were presented net on the condensed consolidated balance sheets as the criteria of ASC 210-20, Offsetting, had been met. Additionally, as of September 30, 2017 and December 31, 2016, receivables and trade payables of $896 million and nil, respectively, were presented net on the condensed consolidated balance sheets as the criteria of ASC 210-20, Offsetting, had been met. At September 30, 2017 and December 31, 2016, time deposits, including those presented on a net basis, carried weighted-average interest rates of 2.84% and 2.36%, respectively. During the nine months ended September 30, 2017 and 2016, total net proceeds from issuances of LCs were $5,889 million and $5,165 million, respectively. These cash inflows are offset by the related cash outflows resulting from placement of the time deposits and repayment of the LCs. All cash flows related to the programs are included in operating activities in the condensed consolidated statements of cash flows.