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Financial Instruments | 9 Months Ended
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Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments Disclosure [Text Block] | FINANCIAL INSTRUMENTS At September 30, 2021, December 31, 2020 and September 30, 2020, the company had $2,108 million, $2,511 million and $1,986 million, respectively, of held-to-maturity securities (primarily time deposits and money market funds) classified as cash equivalents in the interim Consolidated Balance Sheets, as these securities had maturities of three months or less at the time of purchase; and $103 million, $43 million and $152 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively, of held-to-maturity securities (primarily time deposits) classified as marketable securities in the interim Consolidated Balance Sheets as these securities had maturities of more than three months to less than one year at the time of purchase. The company’s investments in held-to-maturity securities are held at amortized cost, which approximates fair value. At December 31, 2020, the company had $226 million of available-for-sale debt securities classified as marketable securities in the interim Consolidated Balance Sheet. Derivative Instruments Objectives and Strategies for Holding Derivative Instruments In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its exposure to foreign currency and commodity price risks. The company has established a variety of derivative programs to be utilized for financial risk management. These programs reflect varying levels of exposure coverage and time horizons based on an assessment of risk. Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee, consistent with the company's financial risk management policies and guidelines. Derivative instruments used are forwards, options, futures and swaps. The company has not designated any non-derivatives as hedging instruments. The company's financial risk management procedures also address counterparty credit approval, limits and routine exposure monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major commodity exchanges, and multinational grain exporters. The company is exposed to credit loss in the event of nonperformance by these counterparties. The company utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The company anticipates performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to management. The notional amounts of the company's derivative instruments were as follows:
Notional Amounts (In millions) | September 30, 2021 | December 31, 2020 | September 30, 2020
Derivatives designated as hedging instruments: |  |  |
Foreign currency contracts | $ | 1,227 |  | $ | 1,164 |  | $ | 770 |
Commodity contracts | $ | 262 |  | $ | 383 |  | $ | 51 |
Derivatives not designated as hedging instruments: |  |  |
Foreign currency contracts | $ | 1,164 |  | $ | 647 |  | $ | 924 |
Commodity contracts | $ | 7 |  | $ | — |  | $ | — |
Foreign Currency Risk The company's objective in managing exposure to foreign currency fluctuations is to reduce earnings and cash flow volatility associated with foreign currency rate changes and to mitigate the exposure of certain investments in foreign subsidiaries against changes in the Euro/USD exchange rate. Accordingly, the company enters into various contracts that change in value as foreign exchange rates change to protect the value of its existing foreign currency-denominated assets, liabilities, commitments, investments and cash flows. The company uses foreign exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The primary business objective of this hedging program is to maintain an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes, after related tax effects, are minimized. The company also uses foreign currency exchange contracts to offset a portion of the company’s exposure to certain forecasted transactions as well as the translation of foreign currency-denominated earnings. The company also uses commodity contracts to offset risks associated with foreign currency devaluation in certain countries. Commodity Price Risk Commodity price risk management programs serve to reduce exposure to price fluctuations on purchases of inventory such as corn and soybeans. The company enters into over-the-counter and exchange-traded derivative commodity instruments to hedge the commodity price risk associated with agricultural commodity exposures. Derivatives Designated as Cash Flow Hedges Commodity Contracts The company enters into over-the-counter and exchange-traded derivative commodity instruments, including options, futures and swaps, to hedge the commodity price risk associated with agriculture commodity exposures. While each risk management program has a different time maturity period, most programs currently do not extend beyond the next two years. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is probable of not occurring. The following table summarizes the after-tax effect of commodity contract cash flow hedges on accumulated other comprehensive loss:
| Three Months Ended September 30, | Nine Months Ended September 30,
(In millions) | 2021 | 2020 | 2021 | 2020
Beginning balance | $ | 73 |  | $ | (16) |  | $ | (16) |  | $ | 2 |
Additions and revaluations of derivatives designated as cash flow hedges | (10) |  | 10 |  | 93 |  | (34) |
Clearance of hedge results to earnings | (4) |  | (2) |  | (18) |  | 24 |
Ending balance | $ | 59 |  | $ | (8) |  | $ | 59 |  | $ | (8) |
At September 30, 2021, an after-tax net gain of $50 million is expected to be reclassified from accumulated other comprehensive loss into earnings over the next twelve months. Foreign Currency Contracts The company enters into forward contracts to hedge the foreign currency risk associated with forecasted transactions within certain foreign subsidiaries. While each risk management program has a different time maturity period, most programs currently do not extend beyond the next two years. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is probable of not occurring. The following table summarizes the after-tax effect of foreign currency cash flow hedges on accumulated other comprehensive loss:
| Three Months Ended September 30, | Nine Months Ended September 30,
(In millions) | 2021 | 2020 | 2021 | 2020
Beginning balance | $ | (21) |  | $ | 19 |  | $ | (17) |  | $ | — |
Additions and revaluations of derivatives designated as cash flow hedges | 8 |  | 4 |  | 3 |  | 23 |
Clearance of hedge results to earnings | 9 |  | (17) |  | 10 |  | (17) |
Ending balance | $ | (4) |  | $ | 6 |  | $ | (4) |  | $ | 6 |
At September 30, 2021, an after-tax net loss of $11 million is expected to be reclassified from accumulated other comprehensive loss into earnings over the next twelve months. Derivatives Designated as Net Investment Hedges Foreign Currency Contracts The company has designated €450 million of forward contracts to exchange EUR as net investment hedges. The purpose of these forward contracts is to mitigate FX exposure related to a portion of the company’s Euro net investments in certain foreign subsidiaries against changes in Euro/USD exchange rates. These hedges will expire and be settled in 2023, unless terminated early at the discretion of the company. The company elected to apply the spot method in testing for effectiveness of the hedging relationship. Derivatives not Designated in Hedging Relationships Foreign Currency Contracts The company uses foreign exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal earnings impact, after taxes. The company also uses foreign currency exchange contracts to offset a portion of the company’s exposure to the translation of certain foreign currency-denominated earnings so that gains and losses on the contracts offset changes in the USD value of the related foreign currency-denominated earnings over the relevant aggregate period. Commodity Contracts The company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as corn and soybeans. The company uses forward agreements, with durations less than one year, to buy and sell USD priced commodities in order to reduce its exposure to currency devaluation for a portion of its local currency cash balances. Counterparties to the forward sales agreements are multinational grain exporters and subject to the company’s financial risk management procedures. Fair Value of Derivative Instruments Asset and liability derivatives subject to an enforceable master netting arrangement with the same counterparty are presented on a net basis in the interim Consolidated Balance Sheets. The presentation of the company's derivative assets and liabilities is as follows:
|  | September 30, 2021
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the interim Consolidated Balance Sheet
Asset derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | $ | 20 |  | $ | — |  | $ | 20 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | 37 | (23) |  | 14 |
Total asset derivatives |  | $ | 57 |  | $ | (23) |  | $ | 34 |
Liability derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | $ | 9 |  | $ | — |  | $ | 9 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | 31 | (23) |  | 8 |
Total liability derivatives |  | $ | 40 |  | $ | (23) |  | $ | 17 |
|  | December 31, 2020
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheet
Asset derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | $ | 15 |  | $ | — |  | $ | 15 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | 40 |  | (40) |  | — |
Total asset derivatives |  | $ | 55 |  | $ | (40) |  | $ | 15 |
Liability derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | $ | 38 |  | $ | — |  | $ | 38 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | 97 |  | (40) |  | 57 |
Total liability derivatives |  | $ | 135 |  | $ | (40) |  | $ | 95 |
|  | September 30, 2020
(In millions) | Balance Sheet Location | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the interim Consolidated Balance Sheet
Asset derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | $ | 24 |  | $ | — |  | $ | 24 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | 101 |  | (75) |  | 26 |
Commodity contracts | Other current assets | 1 |  | — |  | 1 |
Total asset derivatives |  | $ | 126 |  | $ | (75) |  | $ | 51 |
Liability derivatives: |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | $ | 12 |  | $ | — |  | $ | 12 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | 84 |  | (69) |  | 15 |
Commodity contracts | Accrued and other current liabilities | 1 |  | — |  | 1 |
Total liability derivatives |  | $ | 97 |  | $ | (69) |  | $ | 28 |
1. Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. Effect of Derivative Instruments
| Amount of Gain (Loss) Recognized in OCI - Pre-Tax 1
| Three Months Ended September 30, | Nine Months Ended September 30,
(In millions) | 2021 | 2020 | 2021 | 2020
Derivatives designated as hedging instruments: |  |  |  |
Net investment hedges: |  |  |  |
Foreign currency contracts | $ | 10 |  | $ | (20) |  | $ | 24 |  | $ | (16) |
Cash flow hedges: |  |  |  |
Foreign currency contracts | 18 |  | 4 |  | 12 |  | 27 |
Commodity contracts | (11) |  | 14 |  | 117 |  | (46) |
Total derivatives designated as hedging instruments | $ | 17 |  | $ | (2) |  | $ | 153 |  | $ | (35) |
1.OCI is defined as other comprehensive income (loss).
| Amount of Gain (Loss) Recognized in Income - Pre-Tax 1
| Three Months Ended September 30, | Nine Months Ended September 30,
(In millions) | 2021 | 2020 | 2021 | 2020
Derivatives designated as hedging instruments: |  |  |  |
Cash flow hedges: |  |  |  |
Foreign currency contracts 2 | $ | (10) |  | $ | 19 |  | $ | (11) |  | $ | 19 |
Commodity contracts 2 | 4 |  | 3 |  | 20 |  | (32) |
Total derivatives designated as hedging instruments | $ | (6) |  | $ | 22 |  | $ | 9 |  | $ | (13) |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts 3 | $ | 34 |  | $ | (6) |  | $ | — |  | $ | 173 |
Foreign currency contracts 2 | 12 |  | 3 |  | (16) |  | 19 |
Commodity contracts 2 | (1) |  | — |  | (18) |  | 9 |
Total derivatives not designated as hedging instruments | 45 |  | (3) |  | (34) |  | 201 |
Total derivatives | $ | 39 |  | $ | 19 |  | $ | (25) |  | $ | 188 |
1.For cash flow hedges, this represents the portion of the gain (loss) reclassified from accumulated OCI into income during the period. 2.Recorded in cost of goods sold in the interim Consolidated Statements of Operations. 3.Gain recognized in other income (expense) - net was partially offset by the related gain on the foreign currency-denominated monetary assets and liabilities of the company's operations. See Note 6 - Supplementary Information, for additional information. Debt Securities The estimated fair value of the available-for-sale securities at December 31, 2020 was determined using Level 1 inputs within the fair value hierarchy. Level 1 measurements were based on quoted market prices in active markets for identical assets and liabilities. The available-for-sale securities at December 31, 2020 are held by certain foreign subsidiaries in which the USD is not the functional currency. The fluctuations in foreign exchange are recorded in accumulated other comprehensive loss within the interim Consolidated Statements of Equity. These fluctuations are subsequently reclassified from accumulated other comprehensive loss to earnings in the period in which the marketable securities are sold and the gains and losses on these securities offset a portion of the foreign exchange fluctuations in earnings for the company. The following table provides the investing results from available-for-sale securities for the nine months ended September 30, 2021:
Investing Results |  | Nine Months Ended September 30,
(In millions) |  | 2021
Proceeds from sales of available-for-sale securities |  | $ | 226 |
Gross realized losses |  | $ | (7) |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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