DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Bunge LTD | |
Entity Central Index Key | 1,144,519 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 140,602,216 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading symbol | bg |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 11,645 | $ 10,541 | $ 22,766 | $ 19,457 |
Cost of goods sold | (11,290) | (10,011) | (21,951) | (18,307) |
Gross profit | 355 | 530 | 815 | 1,150 |
Selling, general and administrative expenses | (328) | (303) | (706) | (617) |
Interest income | 8 | 14 | 20 | 24 |
Interest expense | (62) | (59) | (127) | (116) |
Foreign exchange gains (losses) | 51 | (6) | 107 | 15 |
Other income (expense) - net | 2 | (13) | (1) | (18) |
Income (loss) from continuing operations before income tax | 26 | 163 | 108 | 438 |
Income tax (expense) benefit | 55 | (39) | 27 | (73) |
Income (loss) from continuing operations | 81 | 124 | 135 | 365 |
Income (loss) from discontinued operations, net of tax | 6 | (4) | (13) | |
Net income (loss) | 87 | 120 | 135 | 352 |
Net (income) loss attributable to noncontrolling interests | (6) | 1 | (7) | 4 |
Net income (loss) attributable to Bunge | 81 | 121 | 128 | 356 |
Convertible preference share dividends and other obligations | (9) | (12) | (17) | (25) |
Net income (loss) available to Bunge common shareholders | $ 72 | $ 109 | $ 111 | $ 331 |
Earnings per common share-basic (Note 17) | ||||
Net income (loss) from continuing operations (in dollars per share) | $ 0.48 | $ 0.81 | $ 0.79 | $ 2.45 |
Net income (loss) from discontinued operations (in dollars per share) | 0.04 | (0.03) | (0.09) | |
Net income (loss) attributable to Bunge common shareholders (in dollars per share) | 0.52 | 0.78 | 0.79 | 2.36 |
Earnings per common share-diluted (Note 17) | ||||
Net income (loss) from continuing operations (in dollars per share) | 0.48 | 0.81 | 0.79 | 2.43 |
Net income (loss) from discontinued operations (in dollars per share) | 0.03 | (0.03) | (0.09) | |
Net income (loss) attributable to Bunge common shareholders (in dollars per share) | 0.51 | 0.78 | 0.79 | 2.34 |
Dividends declared per common share (in dollars per share) | $ 0.46 | $ 0.42 | $ 0.88 | $ 0.80 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ 87 | $ 120 | $ 135 | $ 352 |
Other comprehensive income (loss): | ||||
Foreign exchange translation adjustment | (140) | 465 | 126 | 985 |
Unrealized gains (losses) on designated cash flow and net investment hedges, net of tax (expense) benefit of nil and nil in 2017 and nil and nil in 2016 | (64) | (155) | (71) | (339) |
Unrealized gains (losses) on investments, net of tax (expense) benefit of $1 and $1 in 2017, nil and nil in 2016 | 1 | 1 | ||
Reclassification of realized net losses (gains) to net income, net of tax expense (benefit) of nil and nil in 2017, nil and nil in 2016 | (17) | (7) | (19) | |
Total other comprehensive income (loss) | (220) | 303 | 37 | 646 |
Total comprehensive income (loss) | (133) | 423 | 172 | 998 |
Less: comprehensive (income) loss attributable to noncontrolling interests | (11) | 6 | (17) | |
Total comprehensive income (loss) attributable to Bunge | $ (144) | $ 429 | $ 155 | $ 998 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Unrealized gains (losses) on designated cash flow and net investment hedges, tax (expense) benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized gains (losses) on investments, tax (expense) benefit | 1 | 0 | 1 | 0 |
Reclassification of realized net losses (gains) to net income, tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 575 | $ 934 |
Time deposits under trade structured finance program (Note 5) | 64 | |
Trade accounts receivable (less allowances of $120 and $122) (Note 13) | 1,747 | 1,676 |
Inventories (Note 6) | 5,454 | 4,773 |
Other current assets (Note 7) | 4,138 | 3,645 |
Total current assets | 11,914 | 11,092 |
Property, plant and equipment, net | 5,331 | 5,099 |
Goodwill | 504 | 373 |
Other intangible assets, net | 362 | 336 |
Investments in affiliates | 426 | 373 |
Deferred income taxes | 543 | 524 |
Time deposits under trade structured finance program (Note 5) | 411 | 464 |
Other non-current assets (Note 8) | 942 | 927 |
Total assets | 20,433 | 19,188 |
Current liabilities: | ||
Short-term debt | 1,274 | 257 |
Current portion of long-term debt (Note 12) | 206 | 938 |
Letter of credit obligations under trade structured finance program (Note 5) | 411 | 528 |
Trade accounts payable | 3,513 | 3,485 |
Other current liabilities (Note 10) | 2,529 | 2,476 |
Total current liabilities | 7,933 | 7,684 |
Long-term debt (Note 12) | 3,918 | 3,069 |
Deferred income taxes | 268 | 239 |
Other non-current liabilities | 879 | 853 |
Commitments and contingencies (Note 15) | ||
Equity (Note 16): | ||
Convertible perpetual preference shares, par value $.01; authorized, issued and outstanding: 2017 - 6,899,700 and 2016 - 6,900,000 shares (liquidation preference $100 per share) | 690 | 690 |
Common shares, par value $.01; authorized - 400,000,000 shares; issued and outstanding: 2017 - 140,591,756 shares, 2016 - 139,500,862 shares | 1 | 1 |
Additional paid-in capital | 5,212 | 5,143 |
Retained earnings | 8,195 | 8,208 |
Accumulated other comprehensive income (loss) (Note 16) | (5,951) | (5,978) |
Treasury shares, at cost - 2017 - and 2016 - 12,882,313 shares, respectively | (920) | (920) |
Total Bunge shareholders' equity | 7,227 | 7,144 |
Noncontrolling interests | 208 | 199 |
Total equity | 7,435 | 7,343 |
Total liabilities and equity | $ 20,433 | $ 19,188 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade accounts receivable, allowances (in dollars) | $ 120 | $ 122 |
Convertible perpetual preference shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible perpetual preference shares, authorized | 6,899,700 | 6,900,000 |
Convertible perpetual preference shares, issued | 6,899,700 | 6,900,000 |
Convertible perpetual preference shares, outstanding | 6,899,700 | 6,900,000 |
Convertible perpetual preference shares, liquidation preference (in dollars per share) | $ 100 | $ 100 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, authorized | 400,000,000 | 400,000,000 |
Common shares, issued | 140,591,756 | 139,500,862 |
Common shares, outstanding | 140,591,756 | 139,500,862 |
Treasury shares, at cost | 12,882,313 | 12,882,313 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 135 | $ 352 |
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities: | ||
Foreign exchange loss (gain) on net debt | (33) | 118 |
Bad debt expense | 8 | 11 |
Depreciation, depletion and amortization | 282 | 254 |
Share-based compensation expense | 17 | 26 |
Deferred income tax expense (benefit) | (2) | 82 |
Other, net | 18 | 23 |
Changes in operating assets and liabilities, excluding the effects of acquisitions: | ||
Trade accounts receivable | (93) | 39 |
Inventories | (532) | (1,250) |
Secured advances to suppliers | 125 | 265 |
Trade accounts payable and accrued liabilities | 98 | (272) |
Net unrealized gain/loss on derivative contracts | (36) | 34 |
Advances on sales | (149) | (106) |
Margin deposits | (45) | (117) |
Other, net | (270) | (143) |
Cash provided by (used for) operating activities | (477) | (684) |
INVESTING ACTIVITIES | ||
Payments made for capital expenditures | (342) | (275) |
Acquisitions of businesses (net of cash acquired) | (394) | |
Settlement of net investment hedges | (3) | (115) |
Proceeds from investments | 119 | 449 |
Payments for investments | (160) | (436) |
Payments for investments in affiliates | (68) | (20) |
Other, net | 9 | (20) |
Cash provided by (used for) investing activities | (839) | (417) |
FINANCING ACTIVITIES | ||
Net change in short-term debt with maturities of 90 days or less | 759 | 993 |
Proceeds from short-term debt with maturities greater than 90 days | 380 | 166 |
Repayments of short-term debt with maturities greater than 90 days | (138) | (152) |
Proceeds from long-term debt | 3,872 | 5,839 |
Repayments of long-term debt | (3,853) | (5,292) |
Proceeds from the exercise of option for common shares | 57 | |
Repurchases of common shares | (200) | |
Dividends paid | (135) | (124) |
Other, net | (6) | (18) |
Cash provided by (used for) financing activities | 936 | 1,212 |
Effect of exchange rate changes on cash and cash equivalents | 21 | 26 |
Net increase (decrease) in cash and cash equivalents | (359) | 137 |
Cash and cash equivalents, beginning of period | 934 | 411 |
Cash and cash equivalents, end of period | $ 575 | $ 548 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS - USD ($) $ in Millions | Redeemable Non-Controlling Interests | Convertible Preference Shares | Common Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Shares | Non-Controlling Interests | Total |
Balance at Dec. 31, 2015 | $ 690 | $ 1 | $ 5,105 | $ 7,725 | $ (6,360) | $ (720) | $ 211 | $ 6,652 | |
Balance at Dec. 31, 2015 | $ 37 | ||||||||
Balance (in shares) at Dec. 31, 2015 | 6,900,000 | 142,483,467 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | (6) | ||||||||
Net income (loss) | 356 | (4) | 352 | ||||||
Accretion of noncontrolling interests | 8 | (8) | (8) | ||||||
Other comprehensive income (loss) | 1 | 642 | 4 | 646 | |||||
Dividends on common shares | (111) | (111) | |||||||
Dividends on preference shares | (17) | (17) | |||||||
Dividends to noncontrolling interests on subsidiary common stock | (7) | (7) | |||||||
Noncontrolling interests from redemption | (1) | (8) | (9) | ||||||
Deconsolidation of subsidiary | (22) | (22) | |||||||
Share-based compensation expense | 26 | 26 | |||||||
Repurchase of common shares | (200) | (200) | |||||||
Repurchase of common shares (in shares) | (3,296,230) | ||||||||
Issuance of common shares | (2) | (2) | |||||||
Issuance of common shares (in shares) | 248,902 | ||||||||
Balance at Jun. 30, 2016 | $ 690 | $ 1 | 5,120 | 7,953 | (5,718) | (920) | 174 | 7,300 | |
Balance at Jun. 30, 2016 | 40 | ||||||||
Balance (in shares) at Jun. 30, 2016 | 6,900,000 | 139,436,139 | |||||||
Balance at Dec. 31, 2015 | $ 690 | $ 1 | 5,105 | 7,725 | (6,360) | (720) | 211 | 6,652 | |
Balance at Dec. 31, 2015 | $ 37 | ||||||||
Balance (in shares) at Dec. 31, 2015 | 6,900,000 | 142,483,467 | |||||||
Balance at Dec. 31, 2016 | $ 690 | $ 1 | 5,143 | 8,208 | (5,978) | (920) | 199 | 7,343 | |
Balance (in shares) at Dec. 31, 2016 | 6,900,000 | 139,500,862 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 128 | 7 | 135 | ||||||
Other comprehensive income (loss) | 27 | 10 | 37 | ||||||
Dividends on common shares | (124) | (124) | |||||||
Dividends on preference shares | (17) | (17) | |||||||
Dividends to noncontrolling interests on subsidiary common stock | (8) | (8) | |||||||
Share-based compensation expense | 17 | 17 | |||||||
Issuance of common shares | 52 | 52 | |||||||
Issuance of common shares (in shares) | (300) | 1,090,894 | |||||||
Balance at Jun. 30, 2017 | $ 690 | $ 1 | $ 5,212 | $ 8,195 | $ (5,951) | $ (920) | $ 208 | $ 7,435 | |
Balance (in shares) at Jun. 30, 2017 | 6,899,700 | 140,591,756 |
BASIS OF PRESENTATION AND PRINC
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 1. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements include the accounts of Bunge Limited (“Bunge”), its subsidiaries and variable interest entities (“VIEs”) in which Bunge is considered to be the primary beneficiary, and as a result, include the assets, liabilities, revenues and expenses of all entities over which Bunge exercises control. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The condensed consolidated balance sheet at December 31, 2016 has been derived from Bunge’s audited consolidated financial statements at that date. Operating results for the six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017. The financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, forming part of Bunge’s 2016 Annual Report on Form 10-K filed with the SEC on February 28, 2017. |
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2017 | |
ACCOUNTING PRONOUNCEMENTS | |
ACCOUNTING PRONOUNCEMENTS | 2. ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncements — In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, Compensation — Stock Compensation (Topic 718), Scope of Modification Accounting . The new guidance requires an entity to apply modification accounting only if the fair value, vesting conditions, or classification of the award as equity or liability changes as a result of a change in terms or conditions of a share-based payment award. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The amendments in the ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . The new guidance shortens the premium amortization period for certain callable debt securities to the earliest call date. The new guidance does not require an accounting change for securities held at a discount, which will continue to be amortized to maturity. The guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. The new requirements should be implemented using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes the presentation of net periodic benefit cost related to employer sponsored defined benefit plans and other postretirement benefits. Service cost should be included in the same income statement line item as other compensation costs arising from services rendered during the period, while other components of net periodic benefit pension cost should be presented separately outside of operating income. Additionally, only service costs may be capitalized in assets. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. Entities should apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component should be applied prospectively. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The new guidance clarifies the scope of Subtopic 610-20 on the sale or transfer of nonfinancial assets to noncustomers, including partial sales. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The new requirements may be implemented either retrospectively to each period presented in the financial statements (i.e., the full retrospective approach), or retrospectively with a cumulative—effect adjustment to retained earnings at the date of initial application (i.e., the modified retrospective approach). The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment . The new guidance eliminates Step 2 from the goodwill impairment test. Instead an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The standard is effective for annual or interim impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The new requirements should be implemented on a prospective basis. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business. The amendments provide that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. Otherwise, to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The new requirements should be implemented on a prospective basis. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. Recently Adopted Accounting Pronouncements - In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are under Common Control, which provides that a single decision maker is not required to consider indirect interests held through related parties that are under common control with the decision maker to be equivalents of direct interests in their entity. The new guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting . This update identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The update is effective for fiscal years beginning after December 15, 2016 on a prospective basis, with earlier application permitted. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. |
COMPETITIVENESS PROGRAM
COMPETITIVENESS PROGRAM | 6 Months Ended |
Jun. 30, 2017 | |
COMPETITIVENESS PROGRAM | |
COMPETITIVENESS PROGRAM | 3. COMPETITIVENESS PROGRAM In July 2017, Bunge announced a global Competitiveness Program (“the Program”) to improve its cost position and deliver increased value to shareholders. The Program will, among other things, rationalize Bunge’s cost structure and reengineer the way the company operates in order to reduce overhead costs. One of the Program’s key objectives will be to streamline processes and consolidate back office functions to improve efficiency and scalability. The Program will comprise restructuring initiatives that may include the sale or disposal of long-lived assets, reduction of workforce and rationalization of certain investments. As Bunge continues to review its opportunities, certain charges may be recorded in earnings, including severance and other employee benefit costs and other costs related to the disposal of assets or investments. There were no material expenses recorded for the Program as of June 30, 2017. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 6 Months Ended |
Jun. 30, 2017 | |
BUSINESS ACQUISITIONS | |
BUSINESS ACQUISITIONS | 4. BUSINESS ACQUISITIONS On February 28, 2017, Bunge closed on the acquisition of two oilseed processing plants and related operations in the Netherlands and France pursuant to an agreement with Cargill, Inc. Bunge paid a total purchase price of approximately $344 million, subject to adjustments for working capital. The purchase price allocation resulted in $109 million allocated to property, plant and equipment, $125 million to other net assets and liabilities and $7 million to finite-lived intangible assets. The transaction also resulted in $103 million of goodwill allocated to Bunge’s agribusiness operations. |
TRADE STRUCTURED FINANCE PROGRA
TRADE STRUCTURED FINANCE PROGRAM | 6 Months Ended |
Jun. 30, 2017 | |
TRADE STRUCTURED FINANCE PROGRAM | |
TRADE STRUCTURED FINANCE PROGRAM | 5. 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 six months ended June 30, 2017 and 2016, the net return from these activities was $18 million and $30 million, respectively, and were included as a reduction of cost of goods sold in the accompanying consolidated statements of income. These activities include programs under which Bunge generally obtains U.S. dollar-denominated letters of credit (“LCs”) (each based on an underlying commodity trade flow) from financial institutions, and time deposits denominated in either the local currency of the financial institutions counterparties or in U.S. dollars, as well as foreign exchange forward contracts, all of which are subject to legally enforceable set-off agreements. The table below summarizes the assets and liabilities included in the condensed consolidated balance sheets and the associated fair value amounts at June 30, 2017 and December 31, 2016, related to the program. The fair values approximated the carrying amount of the related financial instruments. June 30, December 31, (US$ in millions) 2017 2016 Current assets: Carrying value of time deposits $ — $ Fair value (Level 2 measurement) of time deposits $ — $ Non-current assets: Carrying value of time deposits $ $ Fair value (Level 2 measurement) of time deposits $ $ Current liabilities: Carrying value of letters of credit obligations $ $ Fair value (Level 2 measurement) of letters of credit obligations $ $ Total fair value (Level 2 measurement) of letters of credit obligations $ $ As of June 30, 2017 and December 31, 2016, time deposits and LCs of $6,182 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. At June 30, 2017 and December 31, 2016, time deposits, including those presented on a net basis, carried weighted-average interest rates of 2.59% and 2.36%, respectively. During the six months ended June 30, 2017 and 2016, total net proceeds from issuances of LCs were $3,889 million and $3,242 million, respectively. These cash inflows are offset by the related cash outflows resulting from placement of the time deposits and repayment of the LCs. All cash flows related to the programs are included in operating activities in the condensed consolidated statements of cash flows. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
INVENTORIES | 6. INVENTORIES Inventories by segment are presented below. Readily marketable inventory (“RMI”) are agricultural commodity inventories, such as soybeans, soybean meal, soybean oil, corn and wheat, carried at fair value because of their commodity characteristics, widely available markets and international pricing mechanisms. All other inventories are carried at lower of cost and net realizable value. June 30, December 31, (US$ in millions) 2017 2016 Agribusiness (1) $ $ Edible Oil Products (2) Milling Products Sugar and Bioenergy (3) Fertilizer Total $ $ (1) Includes RMI of $4,140 million and $3,593 million at June 30, 2017 and December 31, 2016, respectively. Of these amounts, $3,015 million and $2,523 million can be attributable to merchandising activities at June 30, 2017 and December 31, 2016, respectively. (2) Includes RMI of bulk soybean and canola oil in the aggregate amount of $104 million and $123 million at June 30, 2017 and December 31, 2016, respectively. (3) Includes sugar RMI, which can be attributable to Bunge’s trading and merchandising business of $132 million and $139 million at June 30, 2017 and December 31, 2016, respectively. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
OTHER CURRENT ASSETS | |
OTHER CURRENT ASSETS | 7. OTHER CURRENT ASSETS Other current assets consist of the following: June 30, December 31, (US$ in millions) 2017 2016 Unrealized gains on derivative contracts, at fair value $ $ Prepaid commodity purchase contracts (1) Secured advances to suppliers, net (2) Recoverable taxes, net Margin deposits Marketable securities, at fair value and other short-term investments Deferred purchase price receivable, at fair value (3) Prepaid expenses Other Total $ $ (1) Prepaid commodity purchase contracts represent advance payments against contracts for future delivery of specified quantities of agricultural commodities. (2) Bunge provides cash advances to suppliers, primarily Brazilian farmers of soybeans and sugarcane, to finance a portion of the suppliers’ production costs. Bunge does not bear any of the costs or operational risks associated with the related growing crops. The advances are largely collateralized by future crops and physical assets of the suppliers, carry a local market interest rate and settle when the farmer’s crop is harvested and sold. The secured advances to farmers are reported net of allowances of $1 million at June 30, 2017 and $1 million at December 31, 2016. There were no significant changes in the allowance at June 30, 2017 and December 31, 2016, respectively. Interest earned on secured advances to suppliers of $12 million and $7 million for the three months ended June 30, 2017 and 2016 respectively, and $27 million and $18 million for the six months ended June 30, 2017 and 2016, respectively is included in net sales in the condensed consolidated statements of income. (3) Deferred purchase price receivable represents additional credit support for the investment conduits in Bunge’s accounts receivables sales program (see Note 13). Marketable Securities and Other Short-Term Investments - The Company invests in foreign government securities, corporate debt securities, deposits, and other securities. The following is a summary of amounts recorded on the condensed consolidated balance sheets for marketable securities and other short-term investments. June 30, December 31, (US$ in millions) 2017 2016 Foreign government securities $ $ Corporate debt securities Certificate of deposits/time deposits Other Total marketable securities and other short-term investments $ $ As of June 30, 2017, total marketable securities and other short-term investments includes $16 million of assets classified as available for sale, $266 million as trading and $8 million as other short-term investments. As of December 31, 2016, total marketable securities and other short-term investments includes $22 million of assets classified as available for sale, $63 million as trading and $9 million as other short-term investments. Held-to-maturity foreign government and corporate debt securities and certificate of deposits/time deposits are expected to be converted to cash within a twelve month period and are therefore classified as current. Due to the short term nature of these investments, carrying value approximates fair value. |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | 8. OTHER NON-CURRENT ASSETS Other non-current assets consist of the following: June 30, December 31, (US$ in millions) 2017 2016 Recoverable taxes, net (1) $ $ Judicial deposits (1) Other long-term receivables Income taxes receivable (1) Long-term investments Affiliate loans receivable Long-term receivables from farmers in Brazil, net (1) Other Total $ $ (1) These non-current assets arise primarily from Bunge’s Brazilian operations and their realization could take several years. Recoverable taxes, net- Recoverable taxes are reported net of allowances of $26 million and $32 million at June 30, 2017 and December 31, 2016, respectively. Judicial deposits- Judicial deposits are funds that Bunge has placed on deposit with the courts in Brazil. These funds are held in judicial escrow relating to certain legal proceedings pending legal resolution and bear interest at the SELIC rate, which is the benchmark rate of the Brazilian central bank. Income taxes receivable- Income taxes receivable includes overpayments of current income taxes plus accrued interest. These income tax prepayments are expected to be primarily utilized for settlement of future income tax obligations. Income taxes receivable in Brazil bear interest at the SELIC rate. Affiliate loans receivable- Affiliate loans receivable are primarily interest bearing receivables from unconsolidated affiliates with a remaining maturity of greater than one year. Long-term receivables from farmers in Brazil, net of reserves- Bunge provides financing to farmers in Brazil, primarily through secured advances against farmer commitments to deliver agricultural commodities (primarily soybeans) upon harvest of the then-current year’s crop and through credit sales of fertilizer to farmers. The table below summarizes Bunge’s recorded investment in long-term receivables from farmers in Brazil. June 30, December 31, (US$ in millions) 2017 2016 Legal collection process (1) $ $ Renegotiated amounts (2) Other long-term receivables Total $ $ (1) All amounts in legal process are considered past due upon initiation of legal action. (2) All renegotiated amounts are current on repayment terms. The average recorded investment in long-term receivables from farmers in Brazil for the six months ended June 30, 2017 and the year ended December 31, 2016 was $264 million and $235 million, respectively. The table below summarizes Bunge’s recorded investment in long-term receivables from farmers in Brazil and the related allowance amounts. June 30, 2017 December 31, 2016 Recorded Recorded (US$ in millions) Investment Allowance Investment Allowance For which an allowance has been provided: Legal collection process $ $ $ $ Renegotiated amounts For which no allowance has been provided: Legal collection process — — Renegotiated amounts — — Other long-term receivables — — Total $ $ $ $ The table below summarizes the activity in the allowance for doubtful accounts related to long-term receivables from farmers in Brazil. Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2017 2016 2017 2016 Beginning balance $ $ $ $ Bad debt provisions Recoveries ) ) ) ) Write-offs ) — — — Foreign exchange translation ) ) Ending balance $ $ $ $ |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES Income tax expense is provided on an interim basis based on management’s estimate of the annual effective income tax rate and includes the tax effects of certain discrete items, such as changes in tax laws or tax rates or other unusual or non-recurring tax adjustments in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The effective tax rate is highly dependent on the geographic distribution of Bunge’s worldwide earnings or losses and tax regulations in each jurisdiction. Management regularly monitors the assumptions used in estimating its annual effective tax rate and adjusts estimates accordingly, including the realizability of deferred tax assets. Volatility in earnings results in a taxing jurisdiction could result in a determination that additional valuation allowance adjustments may be warranted. While management does not currently believe any future valuation allowance adjustments will be significant, the actual results may be different and the impact of such amounts will be recorded in the period in which management’s assessment changes. For the six months ended June 30, 2017, and 2016, income tax (expense)/benefit related to continuing operations was $27 million and $(73) million, respectively, resulting in effective tax rates of (25)% and 17%. The year-to-date effective tax rate of (25)% in 2017 was primarily due to certain discrete items, including an income tax benefit of $32 million for a favorable resolution of income tax matters in Asia and an income tax benefit of $17 million related to a tax election in South America. The 2016 year-to-date effective tax rate of 17% was driven primarily by discrete items, including an income tax benefit of $60 million recorded for a change in estimate resulting from a tax election for North America and an income tax benefit of $11 million recorded for income tax refund claims in Europe, partially offset by an income tax charge of $(32) million recorded for an uncertain tax position related to Asia. Excluding the effect of these discrete items noted above, Bunge’s effective tax rate for the six months ended June 30, 2017, and 2016 was 20% and 26%, respectively. The reduction in the effective tax rate from 2016 to 2017, taking into account an exclusion of the discrete tax items noted above, is primarily attributable to favorable earnings mix and increased tax-exempt income. Bunge believes that it is reasonably possible that approximately $30 million of its unrecognized tax benefits may be recognized within the next twelve months as a result of the lapse of statute of limitations, or settlement with the tax authorities. As a global enterprise, Bunge files income tax returns that are subject to periodic examination and challenge by federal, state and foreign tax authorities. In many jurisdictions, income tax examinations, including settlement negotiations or litigation, may take several years to finalize. While it is difficult to predict the final outcome or timing of resolution of any particular matter, management believes that the condensed consolidated financial statements reflect the largest amount of tax benefit that is more likely than not to be realized. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
OTHER CURRENT LIABILITIES | |
OTHER CURRENT LIABILITIES | 10. OTHER CURRENT LIABILITIES Other current liabilities consist of the following: June 30, December 31, (US$ in millions) 2017 2016 Unrealized losses on derivative contracts at fair value $ $ Accrued liabilities Advances on sales Other Total $ $ |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2017 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 11. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Bunge’s various financial instruments include certain components of working capital such as cash and cash equivalents, trade accounts receivable and trade accounts payable. Additionally, Bunge uses short and long-term debt to fund operating requirements. Cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt are stated at their carrying value, which is a reasonable estimate of fair value. See Note 13 for deferred purchase price receivable (“DPP”) related to sales of trade receivables. See Note 8 for long-term receivables from farmers in Brazil, net and other long-term investments and Note 12 for long-term debt. Bunge’s financial instruments also include derivative instruments and marketable securities, which are stated at fair value. The majority of Bunge’s exchange traded agricultural commodity futures are settled daily generally through its clearing subsidiary and, therefore, such futures are not included in the table below. Assets and liabilities are classified in their entirety based on the lowest level of input that is a significant component of the fair value measurement. The lowest level of input is considered Level 3. The following table sets forth, by level, Bunge’s assets and liabilities that were 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) — — — — Unrealized gain on designated derivative contracts(2): Interest rate — — — — — — Foreign exchange — — — — Unrealized gain on undesignated derivative contracts (2): Interest rate — — — — Foreign exchange — — — Commodities Freight — — — Energy — — — Deferred purchase price receivable (Note 13) — — — — Other (3) — — Total assets $ $ $ $ $ $ $ $ Liabilities: Trade accounts payable(1) $ — $ $ $ $ — $ $ $ Unrealized loss on designated derivative contracts (4): Interest rate — — — — Foreign exchange — — — — — — Unrealized loss on undesignated derivative contracts (4): Interest rate — — — — — — Foreign exchange — — — Commodities Freight — — Energy — — Total liabilities $ $ $ $ $ $ $ $ (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. Derivatives — Exchange traded futures and options contracts and exchange cleared contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. Bunge’s forward commodity purchase and sale contracts are classified as derivatives along with OTC derivative instruments relating primarily to freight, energy, foreign exchange and interest rates, and are classified within Level 2 or Level 3 as described below. Bunge estimates fair values based on exchange quoted prices, adjusted as appropriate for differences in local markets. These differences are generally valued using inputs from broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these derivative contracts are classified within Level 2. OTC derivative contracts include swaps, options and structured transactions that are valued at fair value generally determined using quantitative models that require the use of multiple market inputs including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets which are not highly active, other observable inputs relevant to the asset or liability, and market inputs corroborated by correlation or other means. These valuation models include inputs such as interest rates, prices and indices to generate continuous yield or pricing curves and volatility factors. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with less availability of pricing information and certain structured transactions can require internally developed model inputs that might not be observable in or corroborated by the market. When unobservable inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3. Exchange traded or cleared derivative contracts are classified in Level 1, thus transfers of assets and liabilities into and/or out of Level 1 occur infrequently. Transfers into Level 1 would generally only be expected to occur when an exchange cleared derivative contract historically valued using a valuation model as the result of a lack of observable inputs becomes sufficiently observable, resulting in the valuation price being essentially the exchange traded price. There were no significant transfers into or out of Level 1 during the periods presented. Readily marketable inventories — RMI reported at fair value are valued based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets with appropriate adjustments for differences in local markets where Bunge’s inventories are located. In such cases, the inventory is classified within Level 2. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. In such cases, the inventory is classified as Level 3. If Bunge used different methods or factors to determine fair values, amounts reported as unrealized gains and losses on derivative contracts and RMI at fair value in the consolidated balance sheets and condensed consolidated statements of income could differ. Additionally, if market conditions change subsequent to the reporting date, amounts reported in future periods as unrealized gains and losses on derivative contracts and RMI at fair value in the consolidated balance sheets and consolidated statements of income could differ. Level 3 Measurements — Transfers in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period. Bunge’s policy regarding the timing of transfers between levels is to record the transfers at the beginning of the reporting period. Level 3 Derivatives — Level 3 derivative instruments utilize both market observable and unobservable inputs within the fair value measurements. These inputs include commodity prices, price volatility, interest rates, volumes and locations. In addition, with the exception of the exchange cleared instruments, Bunge is exposed to loss in the event of the non-performance by counterparties on OTC derivative instruments and forward purchase and sale contracts. Adjustments are made to fair values on occasions when non-performance risk is determined to represent a significant input in Bunge’s fair value determination. These adjustments are based on Bunge’s estimate of the potential loss in the event of counterparty non-performance. Bunge did not have significant adjustments related to non-performance by counterparties at June 30, 2017 and December 31, 2016, respectively. Level 3 Readily marketable inventories and other — The significant unobservable inputs resulting in Level 3 classification for RMI, physically settled forward purchase and sale contracts, and trade accounts receivable and payable, net, relate to certain management estimations regarding costs of transportation and other local market or location-related adjustments, primarily freight related adjustments in the interior of Brazil and the lack of market corroborated information in Canada. In both situations, Bunge uses proprietary information such as purchase and sale contracts and contracted prices for freight, premiums and discounts to value its contracts. Movements in the price of these unobservable inputs alone would not have a material effect on Bunge’s financial statements as these contracts do not typically exceed one future crop cycle. The tables below present reconciliations for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six months ended June 30, 2017 and 2016. These instruments were valued using pricing models that management believes reflect the assumptions that would be used by a marketplace participant. Level 3 Instruments Fair Value Measurements Three Months Ended June 30, 2017 Readily Trade Derivatives, Marketable Receivable/ (US$ in millions) Net (1) Inventories Payable, Net(2) Total Balance, April 1, 2017 $ ) $ $ ) $ Total gains and (losses), realized/unrealized included in cost of goods sold Purchases ) Sales — ) — ) Issuances ) — — ) Settlements — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) — ) Balance, June 30, 2017 $ — $ $ ) $ (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 Derivatives, Marketable Receivable/ (US$ in millions) Net (1) Inventories Payable, Net (2) Total Balance, April 1, 2016 $ $ $ ) $ Total gains and (losses), realized/unrealized included in cost of goods sold Purchases — ) Sales — ) — ) Issuances — ) — ) Settlements ) — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) Balance, June 30, 2016 $ $ $ ) $ (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 $ ) $ $ ) $ Total gains and losses (realized/unrealized) included in cost of goods sold ) Purchases ) Sales — ) — ) Issuances ) — — ) Settlements — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) ) Balance, June 30, 2017 $ — $ $ ) $ (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 $ $ $ ) $ Total gains and losses (realized/unrealized) included in cost of goods sold Purchases — ) Sales — ) — ) Issuances ) ) — ) Settlements ) — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) Balance, June 30, 2016 $ $ $ ) $ (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. The tables below summarize changes in unrealized gains or (losses) recorded in earnings during the three and six months ended June 30, 2017 and 2016 for Level 3 assets and liabilities that were held at June 30, 2017 and 2016. 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 $ $ $ ) $ Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016 Cost of goods sold $ $ $ ) $ (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 $ ) $ ) $ $ ) Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016 Cost of goods sold $ $ ) $ ) $ (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. Derivative Instruments Interest rate derivatives — Bunge, from time-to-time uses interest rate derivatives, including interest rate swaps, interest rate basis swaps, interest rate options or interest rate futures. Bunge has entered into interest rate swap agreements for the purpose of managing certain of its interest rate exposures. The interest rate swaps used by Bunge as hedging instruments have been recorded at fair value in the condensed consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. These swap agreements have been designated as fair value hedges. Additionally, the carrying amount of the associated hedged debt is adjusted through earnings for changes in the fair value arising from changes in benchmark interest rates. Ineffectiveness is recognized to the extent that these two adjustments do not offset. 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 $ $ November 24, 2020 3 month LIBOR plus 1.91% % euro euro June 16, 2023 6 month EURIBOR plus 1.64% % $ $ August 15, 2026 3 month LIBOR plus 1.12% % Additionally, on various dates in 2016 and 2017, Bunge entered into interest rate futures, one year interest rate swap agreements and forward rate agreements that do not qualify for hedge accounting, and therefore Bunge has not designated these as hedge instruments for accounting purposes. The interest rate futures, interest rate swaps and forward rate agreements have been recorded at fair value in the consolidated condensed balance sheets with changes in fair value recorded contemporaneously in earnings. Below is a summary of Bunge’s outstanding interest rate swap agreements and forward rate agreements. 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 $ $ — $ — Notional Swaps — ) Notional Forward Rate Agreements — — 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 derivatives and hedging activities - Bunge uses a combination of foreign exchange forward, swap and option contracts in certain of its operations to mitigate the risk from exchange rate fluctuations in connection with certain commercial and balance sheet exposures. The foreign exchange forward and option contracts may be designated as cash flow hedges. Bunge may also use net investment hedges to partially offset the translation adjustments arising from the remeasurement of its investment in certain of its foreign subsidiaries. Foreign exchange risk is also managed through the use of foreign currency debt. Bunge has 800 million euro senior unsecured euro-denominated notes of which 797 million euro is designated and is effective as, a net investment hedge of euro denominated assets. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments are included in foreign currency translation adjustment within OCI. Bunge assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedge transactions are highly effective in offsetting changes in the hedged items. The table below summarizes the notional amounts of open foreign exchange positions. 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 $ — $ ) $ Delta Forwards — ) Notional Futures ) — — Notional Swaps — ) 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. Commodity derivatives - Bunge uses commodity derivative instruments to manage its exposure to movements associated with agricultural commodity prices. Bunge generally uses exchange traded futures and options contracts to minimize the effects of changes in the prices of agricultural commodities on its agricultural commodity inventories and forward purchase and sale contracts, but may also from time-to-time enter into OTC commodity transactions, including swaps, which are settled in cash at maturity or termination based on exchange-quoted futures prices. Forward purchase and sale contracts are primarily settled through delivery of agricultural commodities. While Bunge considers these exchange traded futures and forward purchase and sale contracts to be effective economic hedges, Bunge does not designate or account for the majority of its commodity contracts as hedges. The forward contracts require performance of both Bunge and the contract counterparty in future periods. Contracts to purchase agricultural commodities generally relate to current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of agricultural commodities generally do not extend beyond one future crop cycle. The table below summarizes the volumes of open agricultural commodities derivative positions. June 30, 2017 Exchange Traded Net (Short) & Non-exchange Traded Unit of Long (1) (Short) (2) Long (2) Measure Agricultural Commodities Futures — — Metric Tons Options ) — — Metric Tons Forwards — ) Metric Tons Swaps ) 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. Ocean freight derivatives — Bunge uses derivative instruments referred to as freight forward agreements “FFAs” and FFA options to hedge portions of its current and anticipated ocean freight costs. Changes in the fair values of ocean freight derivatives that are not designated as hedges are recorded in earnings. There were no designated hedges at June 30, 2017 and December 31, 2016, respectively. The table below summarizes the open ocean freight positions. June 30, 2017 Exchange Cleared Net (Short) & Non-exchange Cleared Unit of Long (1) (Short) (2) Long (2) Measure Ocean Freight FFA — — Hire Days FFA Options — — 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 derivatives — Bunge uses energy derivative instruments for various purposes including to manage its exposure to volatility in energy costs. Bunge’s operations use energy, including electricity, natural gas, coal, and fuel oil, including bunker fuel. The table below summarizes the open energy positions. June 30, 2017 Exchange Traded Net (Short) & Non-exchange Cleared Unit of Long (1) (Short) (2) Long (2) Measure (3) Natural Gas (3) Futures — — MMBtus Swaps — — MMBtus Options — — — MMBtus Energy—Other Futures — — Metric Tons Forwards — — Metric Tons Swaps — — 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. The Effect of Financial Instruments on the Condensed Consolidated Statements of Income The table below summarizes the effect of derivative instruments that are designated as fair value hedges and also derivative instruments that are undesignated on the condensed consolidated statements of income for the six months ended June 30, 2017 and 2016. 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 $ $ Total $ $ Undesignated Derivative Contracts: Foreign Exchange Foreign exchange gains (losses) $ $ Foreign Exchange Cost of goods sold ) Commodities Cost of goods sold ) Freight Cost of goods sold ) ) Energy Cost of goods sold ) Total $ $ ) The table below summarizes the effect of derivative instruments that are designated and qualify as cash flow and net investment hedges on the condensed consolidated statement of income for the six months ended June 30, 2017. 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) $ $ Foreign exchange gains (losses) $ Foreign exchange gains (losses) $ — Total $ $ $ $ — Net Investment Hedge: Foreign Currency denominated debt (4) $ $ ) Foreign currency denominated debt $ — Foreign currency denominated debt $ — Foreign Exchange (3) $ $ ) $ — $ — Total $ $ ) $ — $ — (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 $1 million of after-tax gain (loss) related to its foreign exchange cash flow hedges and nil for net investment hedges. (2) There was no gain or loss recognized in income relating to the ineffective portion of the hedging relationships or relating to amounts excluded from the assessment of hedge effectiveness. (3) The foreign exchange contracts mature at various dates through June 2018. (4) The euro denominated loans mature in 2023. The table below summarizes the effect of derivative instruments that are designated and qualify as cash flow and net investment hedges on the condensed consolidated statement of income for the six months ended June 30, 2016. Six Months Ended June 30, 2016 Gain or Gain or (Loss) (Loss) Reclassified from Recognized in Accumulated OCI into Gain or (Loss) Recognized Notional Accumulated Income (1) in Income on Derivatives (US$ in millions) Amount OCI (1) Location Amount Location Amount (2) Cash Flow Hedge: Foreign Exchange (3) $ $ Foreign exchange gains (losses) $ — Foreign exchange gains (losses) $ — Total $ $ $ — $ — Net Investment Hedge: Foreign currency denominated debt(3) $ $ Foreign currency denominated debt $ — Foreign currency denominated debt $ — Foreign Exchange (3) $ $ ) Foreign exchange gains (losses) $ — Foreign exchange gains (losses) $ — Total $ $ ) $ — $ — (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. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
DEBT | |
DEBT | 12. DEBT Bunge’s commercial paper program is supported by an identical amount of committed back-up bank credit lines (the “Liquidity Facility”) provided by banks that are rated at least A-1 by Standard & Poor’s Financial Services and P-1 by Moody’s Investors Service. The cost of borrowing under the Liquidity Facility would typically be higher than the cost of issuing under Bunge’s commercial paper program. At June 30, 2017, there were no borrowings outstanding under the commercial paper program and no borrowings under the Liquidity Facility. At June 30, 2017, Bunge had $4,120 million of unused and available borrowing capacity under its committed credit facilities totaling $5,015 million with a number of lending institutions. The fair value of Bunge’s long-term debt is based on interest rates currently available on comparable maturities to companies with credit standing similar to that of Bunge. The carrying amounts and fair value of long-term debt are as follows: June 30, 2017 December 31, 2016 Carrying Fair Value Carrying Fair Value (US$ in millions) Value (Level 2) Value (Level 2) Long-term debt, including current portion $ $ $ $ |
TRADE RECEIVABLES SECURITIZATIO
TRADE RECEIVABLES SECURITIZATION PROGRAM | 6 Months Ended |
Jun. 30, 2017 | |
TRADE RECEIVABLES SECURITIZATION PROGRAM | |
TRADE RECEIVABLES SECURITIZATION PROGRAM | 13. TRADE RECEIVABLES SECURITIZATION PROGRAM Bunge and certain of its subsidiaries participate in a $700 million trade receivables securitization program (the “Program”) with a financial institution, as administrative agent, and certain commercial paper conduit purchasers and committed purchasers (collectively, the “Purchasers”) that provides for funding of up to $700 million against receivables sold into the Program. The table below summarizes the cash flows and discounts of Bunge’s trade receivables associated with the Program. Servicing fees under the Program were not significant in any period. June 30, June 30, (US$ in millions) 2017 2016 Gross receivables sold $ $ Proceeds received in cash related to transfer of receivables $ $ Cash collections from customers on receivables previously sold $ $ Discounts related to gross receivables sold included in SG&A $ $ June 30, December 31, (US$ in millions) 2017 2016 Receivables sold which were derecognized on Bunge balance sheet $ $ Deferred purchase price included in other current assets $ $ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS Notes receivable —Bunge holds a note receivable from Navegações Unidas Tapajós S.A., a 50% equity method investment in Brazil, having a carrying value of $22 million at June 30, 2017, which matures in June 2019, with interest based on CDI, the average one-day interbank deposit rate in Brazil. Bunge holds a note receivable from Solazyme Bunge Renewable Oils Cooperatief U.A., a 49.9% equity method investment in Brazil, having a carrying value of $9 million at June 30, 2017, with an interest rate of 11.05%. In addition, Bunge held notes receivables from other related parties totaling $3 million at June 30, 2017. Notes payable —Bunge holds a note payable with its joint venture Bunge SCF Grain LLC with a carrying value of $11 million at June 30, 2017. This note matures on March 31, 2019 with an interest rate based on LIBOR and is included in other long-term liabilities in Bunge’s consolidated balance sheet. Other - Bunge purchased soybeans, other commodity products and received port services from certain of its unconsolidated investees, totaling $232 million and $216 million for the three months ended June 30, 2017 and 2016, respectively, and $500 million and $469 million for the six months ended June 30, 2017 and 2016, respectively. Bunge also sold soybeans, other commodity products and provided port services to certain of its unconsolidated investees, totaling $245 million and $73 million for the three months ended June 30, 2017 and 2016, re s pectively, and $311 million and $129 million for the six months ended June 30, 2017 and 2016, re s pectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Bunge is party to a large number of claims and lawsuits, primarily non-income tax and labor claims in Brazil and non-income tax claims in Argentina, arising in the normal course of business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. Bunge records liabilities related to its general claims and lawsuits when the exposure item becomes probable and can be reasonably estimated. Bunge management does not expect these matters to have a material adverse effect on Bunge’s financial condition, results of operations or liquidity. However, these matters are subject to inherent uncertainties and there exists the remote possibility of an adverse impact on Bunge’s position in the period the uncertainties are resolved whereby the settlement of the identified contingencies could exceed the amount of provisions included in the condensed consolidated balance sheets. Included in other non-current liabilities at June 30, 2017 and December 31, 2016 are the following amounts related to these matters: June 30, December 31, (US$ in millions) 2017 2016 Non-income tax claims $ $ Labor claims Civil and other claims Total $ $ Non-income tax claims - These tax claims relate principally to claims against Bunge’s Brazilian subsidiaries, primarily value added tax claims (ICMS, IPI, PIS/COFINS). The determination of the manner in which various Brazilian federal, state and municipal taxes apply to the operations of Bunge is subject to varying interpretations arising from the complex nature of Brazilian tax law. In addition to the matter discussed below, Bunge monitors other potential claims in Brazil regarding these value-added taxes. In particular, Bunge monitors the Brazilian federal and state governments’ responses to recent Brazilian Supreme Court decisions invalidating on constitutional grounds certain ICMS incentives and benefits granted by various states. While Bunge was not a recipient of any of the incentives and benefits that were the subject of these Supreme Court decisions, it has received other similar tax incentives and benefits, which are being challenged before the Supreme Court. Bunge has not received any tax assessment from the states that granted these incentives or benefits related to their validity and, based on the Company’s evaluation of this matter as required by U.S. GAAP, no liability has been recorded in the consolidated financial statements. On February 13, 2015, Brazil’s Supreme Federal Court ruled in a leading case that certain state ICMS tax credits for staple foods (including soy oil, margarine, and mayonnaise and wheat flours) are unconstitutional. Bunge, like other companies in the Brazilian food industry, is involved in several administrative and judicial disputes with Brazilian states regarding these tax credits. While the leading case does not involve Bunge and each case is unique in facts and circumstances and applicable state law, the ruling has general precedent authority in lower court cases. Based on management’s review of the ruling (without considering the future success of any potential clarification or modulation of the ruling) and its general application to Bunge’s pending cases, management recorded a liability of 468 million Brazilian reais (approximately $141 million as of June 30, 2017), plus applicable interest. Since 2015, Bunge settled a portion of its outstanding liabilities in amnesty programs in certain Brazilian states. As of June 30, 2017, the accrued liability was 408 million Brazilian reais (approximately $123 million), plus applicable interest. As of June 30, 2017, the Brazilian state authorities have concluded examinations of the ICMS tax returns from 1990 to the present and have issued over 1,300 assessments totaling approximately 1,030 million Brazilian reais (approximately $311 million as of June 30, 2017), plus applicable interest and penalties on the outstanding amount. As of December 31, 2016, the claims were approximately 797 million Brazilian reais (approximately $245 million), plus applicable interest and penalties. Management intends to continue to vigorously defend against its pending state cases. Management, in consultation with external legal advisors, has established appropriate reserves for potential exposures. As of June 30, 2017, the Brazilian authorities have concluded examinations of the PIS-COFINS tax returns and issued assessments relating to years 2004 through the first quarter of 2011. As of June 30, 2017, the cumulative claims for 2004 through 2011 were approximately 550 million Brazilian reais (approximately $166 million), plus applicable interest and penalties. As of December 31, 2016, the cumulative claims were approximately 510 million Brazilian reais (approximately $156 million), plus applicable interest and penalties. Management, in consultation with external legal advisors, has established appropriate reserves for potential exposures. Since 2010, the Argentine tax authorities have been conducting a review of income and other taxes paid by exporters and processors of cereals and other agricultural commodities in the country. In that regard, the Company has been subject to a number of assessments, proceedings, and claims related to its activities. In 2011, Bunge’s subsidiary in Argentina paid $112 million of accrued export tax obligations under protest and preserved its rights with respect to such payment. In 2012, the Argentine tax authorities further assessed interest on these payments, which as of June 30, 2017, totaled approximately $250 million. In 2012, the Argentine government suspended Bunge’s Argentine subsidiary from a registry of grain traders. While the suspension has not had a material adverse effect on Bunge’s business in Argentina, these actions have resulted in additional administrative requirements and increased logistical costs on domestic grain shipments within Argentina. Bunge is challenging these actions in the Argentine courts. Labor claims - The labor claims are principally claims against Bunge’s Brazilian subsidiaries. The labor claims primarily relate to dismissals, severance, health and safety, salary adjustments and supplementary retirement benefits. Civil and other claims - The civil and other claims relate to various disputes with third parties, including suppliers and customers. During the first quarter of 2016, Bunge received a notice from the Brazilian Administrative Council for Economic Defense initiating an administrative proceeding against its Brazilian subsidiary and two of its employees, certain of its former employees, several other companies in the Brazilian wheat milling industry and others for alleged anticompetitive activities in the north and northeast of Brazil. Bunge is defending against this action; however, the proceedings are at an early stage and Bunge cannot, at this time, reasonably predict the ultimate outcome of the proceedings or sanctions, if any, which may be imposed. Guarantees - Bunge has issued or was a party to the following guarantees at June 30, 2017: Maximum Potential Future (US$ in millions) Payments Unconsolidated affiliates financing (1)(2) $ Residual value guarantee (3) Total $ (1) Bunge issued guarantees to certain financial institutions related to debt of certain of its unconsolidated joint ventures. The terms of the guarantees are equal to the terms of the related financings which have maturity dates in 2017 through 2022. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. At June 30, 2017, Bunge recorded no obligation related to these guarantees. (2) Bunge issued guarantees to certain third parties related to performance of its unconsolidated joint ventures. The terms of the guarantees are equal to the completion date of a port terminal which is expected to be completed in 2019. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. At June 30, 2017, Bunge recorded no obligation related to these guarantees. (3) Bunge issued guarantees to certain financial institutions which are party to certain operating lease arrangements for railcars and barges. These guarantees provide for a minimum residual value to be received by the lessor at conclusion of the lease term. These leases expire at various dates from 2018 through 2021. At June 30, 2017, Bunge’s recorded obligation related to these guarantees was $3 million. Bunge Limited has provided a Guaranty to the Director of the Illinois Department of Agriculture as Trustee for Bunge North America, Inc. (“BNA”), an indirect wholly-owned subsidiary, which guarantees all amounts due and owing by BNA, to grain producers and/or depositors in the State of Illinois who have delivered commodities to BNA’s Illinois facilities. In addition, Bunge Limited has provided full and unconditional parent level guarantees of the outstanding indebtedness under certain credit facilities entered into and senior notes issued by, its subsidiaries. As of June 30, 2017, Bunge’s condensed consolidated balance sheet includes debt with a carrying amount of $5,013 million related to these guarantees. This debt includes the senior notes issued by two of Bunge’s 100% owned finance subsidiaries, Bunge Limited Finance Corp. and Bunge Finance Europe B.V. There are largely no restrictions on the ability of Bunge Limited Finance Corp. and Bunge Finance Europe B.V. or any other Bunge subsidiary to transfer funds to Bunge Limited. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
EQUITY | |
EQUITY | 16. EQUITY Share repurchase program - In May 2015, Bunge established a program for the repurchase of up to $500 million of Bunge’s issued and outstanding common shares. The program has no expiration date. Bunge did not repurchase any common shares during the quarter and six months ended June 30, 2017. Bunge repurchased 3,296,230 common shares in 2016 under this program for $200 million. Total repurchases under the program from its inception were 4,707,440 shares for $300 million. Accumulated other comprehensive income (loss) attributable to Bunge — The following table summarizes the balances of related after-tax components of accumulated other comprehensive income (loss) attributable to Bunge: Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance April 1, 2017 $ ) $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) ) — ) Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2017 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance April 1, 2016 $ ) $ $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — — Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2016 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance, January 1, 2017 $ ) $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2017 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance, January 1, 2016 $ ) $ $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — — Amount reclassified from accumulated other comprehensive income — — — — — Balance, June 30, 2016 $ ) $ ) $ ) $ $ ) |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2017 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | 17. EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share. Three Months Ended Six Months Ended June 30, June 30, (US$ in millions, except for share data) 2017 2016 2017 2016 Income (loss) from continuing operations $ $ $ $ Net (income) loss attributable to noncontrolling interests ) ) Income (loss) from continuing operations attributable to Bunge Other redeemable obligations (1) — ) — ) Convertible preference share dividends ) ) ) ) Income (loss) from discontinued operations, net of tax ) — ) Net income (loss) available to Bunge common shareholders $ $ $ $ Weighted-average number of common shares outstanding: Basic Effect of dilutive shares: —stock options and awards —convertible preference shares — — — Diluted (2) Basic earnings per common share: Net income (loss) from continuing operations $ $ $ $ Net income (loss) from discontinued operations ) — ) Net income (loss) attributable to Bunge common shareholders—basic $ $ $ $ Diluted earnings per common share: Net income (loss) from continuing operations $ $ $ $ Net income (loss) from discontinued operations ) — ) Net income (loss) attributable to Bunge common shareholders—diluted $ $ $ $ (1) Accretion of redeemable noncontrolling interest of $3 million and $8 million for the three and six months ended June 30, 2016, respectively, related to a non-fair value variable put arrangement whereby the noncontrolling interest holder could require Bunge to purchase the remaining shares of an oilseed processing operation in Central and Eastern Europe. Accretion for the respective periods include the effect of losses incurred by the operations for the three and six months ended June 30, 2016. In the second quarter of 2016, this variable put arrangement was terminated. (2) Approximately 3 million outstanding stock options and contingently issuable restricted stock units were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2017. Approximately 8 million weighted-average common shares that are issuable upon conversion of the convertible preference shares were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2017. Approximately 4 million outstanding stock options and contingently issuable restricted stock units were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2016. Approximately 8 million weighted-average common shares that are issuable upon conversion of the convertible preference shares were not dilutive and not included in the weighted-average number of common shares outstanding for the three months ended June 30, 2016. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18 SEGMENT INFORMATION Bunge has five reportable segments - Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer, which are organized based upon similar economic characteristics and are similar in nature of products and services offered, the nature of production processes and the type and class of customer and distribution methods. The Agribusiness segment is characterized by both inputs and outputs being agricultural commodities and thus high volume and low margin. The Edible Oil Products segment involves the processing, production and marketing of products derived from vegetable oils. The Milling Products segment involves the processing, production and marketing of products derived primarily from wheat and corn. The Sugar and Bioenergy segment involves sugarcane growing and milling in Brazil, sugar trading and merchandising in various countries, as well as sugarcane-based ethanol production and corn-based ethanol investments and related activities. Following the classification of the Brazilian fertilizer distribution and North American fertilizer businesses as discontinued operations, the activities of the Fertilizer segment include its port operations in Brazil and Argentina and its blending and retail operations in Argentina. The “Discontinued Operations & Unallocated” column in the following table contains the reconciliation between the totals for reportable segments and Bunge consolidated totals, which consist primarily of amounts attributable to discontinued operations, corporate items not allocated to the operating segments and inter-segment eliminations. Transfers between the segments are generally valued at market. The segment revenues generated from these transfers are shown in the following table as “Inter-segment revenues.” (US$ in millions) Edible Discontinued Three Months Ended Oil Milling Sugar and Operations & June 30, 2017 Agribusiness Products Products Bioenergy Fertilizer Unallocated (1) Total Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — — — ) — Foreign exchange gains (losses) ) — Noncontrolling interests (1) ) ) — — ) ) Other income (expense) — net ) — — Segment EBIT (2) — Discontinued operations (3) — — — — — Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Three Months Ended Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — ) — Foreign exchange gains (losses) ) ) ) — — ) Noncontrolling interests (1) ) ) — — — Other income (expense) — net ) — — ) — — ) Segment EBIT (2) — — Discontinued operations (3) — — — — — ) ) Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Edible Discontinued Six Months Ended Oil Milling Sugar and Operations & June 30, 2017 Agribusiness Products Products Bioenergy Fertilizer Unallocated (1) Total Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — — ) — Foreign exchange gains (losses) ) — Noncontrolling interests (1) ) ) — — ) ) Other income (expense) — net ) ) — — ) Segment EBIT (2) ) ) — Discontinued operations (3) — — — — — — — Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Six Months Ended June 30, 2016 Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — ) — Foreign exchange gains (losses) ) ) ) — Noncontrolling interests (1) — ) — — — Other income (expense) — net ) ) ) ) — — ) Segment EBIT (2) ) — Discontinued operations (3) — — — — — ) ) Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ (1) Includes noncontrolling interests share of interest and tax to reconcile to consolidated noncontrolling interest. (2) Total segment earnings before interest and taxes (“EBIT”) is an operating performance measure used by Bunge’s management to evaluate segment operating activities. Bunge’s management believes total segment EBIT is a useful measure of operating profitability, since the measure allows for an evaluation of the performance of its segments without regard to its financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge’s industry. (3) Represents net income (loss) from discontinued operations. A reconciliation of total Segment EBIT to net income attributable to Bunge follows: Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2017 2016 2017 2016 Total Segment EBIT from continuing operations $ $ $ $ Interest income Interest expense ) ) ) ) Income tax (expense) benefit ) ) Income (loss) from discontinued operations, net of tax ) — ) Noncontrolling interests’ share of interest and tax Net income attributable to Bunge $ $ $ $ |
BASIS OF PRESENTATION AND PRI27
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements include the accounts of Bunge Limited (“Bunge”), its subsidiaries and variable interest entities (“VIEs”) in which Bunge is considered to be the primary beneficiary, and as a result, include the assets, liabilities, revenues and expenses of all entities over which Bunge exercises control. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to Securities and Exchange Commission (“SEC”) rules. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The condensed consolidated balance sheet at December 31, 2016 has been derived from Bunge’s audited consolidated financial statements at that date. Operating results for the six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017. The financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016, forming part of Bunge’s 2016 Annual Report on Form 10-K filed with the SEC on February 28, 2017. |
ACCOUNTING PRONOUNCEMENTS (Poli
ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
ACCOUNTING PRONOUNCEMENTS | |
New Accounting Pronouncements | New Accounting Pronouncements — In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, Compensation — Stock Compensation (Topic 718), Scope of Modification Accounting . The new guidance requires an entity to apply modification accounting only if the fair value, vesting conditions, or classification of the award as equity or liability changes as a result of a change in terms or conditions of a share-based payment award. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The amendments in the ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . The new guidance shortens the premium amortization period for certain callable debt securities to the earliest call date. The new guidance does not require an accounting change for securities held at a discount, which will continue to be amortized to maturity. The guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. The new requirements should be implemented using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes the presentation of net periodic benefit cost related to employer sponsored defined benefit plans and other postretirement benefits. Service cost should be included in the same income statement line item as other compensation costs arising from services rendered during the period, while other components of net periodic benefit pension cost should be presented separately outside of operating income. Additionally, only service costs may be capitalized in assets. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. Entities should apply the guidance on the presentation of the components of net periodic benefit cost in the income statement retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component should be applied prospectively. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The new guidance clarifies the scope of Subtopic 610-20 on the sale or transfer of nonfinancial assets to noncustomers, including partial sales. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The new requirements may be implemented either retrospectively to each period presented in the financial statements (i.e., the full retrospective approach), or retrospectively with a cumulative—effect adjustment to retained earnings at the date of initial application (i.e., the modified retrospective approach). The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment . The new guidance eliminates Step 2 from the goodwill impairment test. Instead an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The standard is effective for annual or interim impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The new requirements should be implemented on a prospective basis. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business. The amendments provide that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. Otherwise, to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The new requirements should be implemented on a prospective basis. The adoption of this standard is not expected to have a material impact on Bunge’s consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements - In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are under Common Control, which provides that a single decision maker is not required to consider indirect interests held through related parties that are under common control with the decision maker to be equivalents of direct interests in their entity. The new guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting . This update identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The update is effective for fiscal years beginning after December 15, 2016 on a prospective basis, with earlier application permitted. Bunge adopted this ASU upon its effective date of January 1, 2017 and the adoption did not have a material impact on Bunge’s consolidated financial statements. |
TRADE STRUCTURED FINANCE PROG29
TRADE STRUCTURED FINANCE PROGRAM (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
TRADE STRUCTURED FINANCE PROGRAM | |
Summary of assets and liabilities related to the trade structured finance program | June 30, December 31, (US$ in millions) 2017 2016 Current assets: Carrying value of time deposits $ — $ Fair value (Level 2 measurement) of time deposits $ — $ Non-current assets: Carrying value of time deposits $ $ Fair value (Level 2 measurement) of time deposits $ $ Current liabilities: Carrying value of letters of credit obligations $ $ Fair value (Level 2 measurement) of letters of credit obligations $ $ Total fair value (Level 2 measurement) of letters of credit obligations $ $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES | |
Schedule of inventories by segment | June 30, December 31, (US$ in millions) 2017 2016 Agribusiness (1) $ $ Edible Oil Products (2) Milling Products Sugar and Bioenergy (3) Fertilizer Total $ $ (1) Includes RMI of $4,140 million and $3,593 million at June 30, 2017 and December 31, 2016, respectively. Of these amounts, $3,015 million and $2,523 million can be attributable to merchandising activities at June 30, 2017 and December 31, 2016, respectively. (2) Includes RMI of bulk soybean and canola oil in the aggregate amount of $104 million and $123 million at June 30, 2017 and December 31, 2016, respectively. (3) Includes sugar RMI, which can be attributable to Bunge’s trading and merchandising business of $132 million and $139 million at June 30, 2017 and December 31, 2016, respectively. |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
OTHER CURRENT ASSETS | |
Schedule of other current assets | June 30, December 31, (US$ in millions) 2017 2016 Unrealized gains on derivative contracts, at fair value $ $ Prepaid commodity purchase contracts (1) Secured advances to suppliers, net (2) Recoverable taxes, net Margin deposits Marketable securities, at fair value and other short-term investments Deferred purchase price receivable, at fair value (3) Prepaid expenses Other Total $ $ (1) Prepaid commodity purchase contracts represent advance payments against contracts for future delivery of specified quantities of agricultural commodities. (2) Bunge provides cash advances to suppliers, primarily Brazilian farmers of soybeans and sugarcane, to finance a portion of the suppliers’ production costs. Bunge does not bear any of the costs or operational risks associated with the related growing crops. The advances are largely collateralized by future crops and physical assets of the suppliers, carry a local market interest rate and settle when the farmer’s crop is harvested and sold. The secured advances to farmers are reported net of allowances of $1 million at June 30, 2017 and $1 million at December 31, 2016. There were no significant changes in the allowance at June 30, 2017 and December 31, 2016, respectively. Interest earned on secured advances to suppliers of $12 million and $7 million for the three months ended June 30, 2017 and 2016 respectively, and $27 million and $18 million for the six months ended June 30, 2017 and 2016, respectively is included in net sales in the condensed consolidated statements of income. (3) Deferred purchase price receivable represents additional credit support for the investment conduits in Bunge’s accounts receivables sales program (see Note 13). |
Summary of marketable securities and other short-term investments | June 30, December 31, (US$ in millions) 2017 2016 Foreign government securities $ $ Corporate debt securities Certificate of deposits/time deposits Other Total marketable securities and other short-term investments $ $ |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
OTHER NON-CURRENT ASSETS | |
Schedule of other non-current assets | June 30, December 31, (US$ in millions) 2017 2016 Recoverable taxes, net (1) $ $ Judicial deposits (1) Other long-term receivables Income taxes receivable (1) Long-term investments Affiliate loans receivable Long-term receivables from farmers in Brazil, net (1) Other Total $ $ (1) These non-current assets arise primarily from Bunge’s Brazilian operations and their realization could take several years. |
Summary of long-term receivables from Brazilian farmers | June 30, December 31, (US$ in millions) 2017 2016 Legal collection process (1) $ $ Renegotiated amounts (2) Other long-term receivables Total $ $ (1) All amounts in legal process are considered past due upon initiation of legal action. (2) All renegotiated amounts are current on repayment terms. |
Summary of gross investment in long-term receivables and the related allowance amounts from Brazilian farmers | June 30, 2017 December 31, 2016 Recorded Recorded (US$ in millions) Investment Allowance Investment Allowance For which an allowance has been provided: Legal collection process $ $ $ $ Renegotiated amounts For which no allowance has been provided: Legal collection process — — Renegotiated amounts — — Other long-term receivables — — Total $ $ $ $ |
Summary of the activity in the allowance for doubtful accounts related to long-term receivables from Brazilian farmers | Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2017 2016 2017 2016 Beginning balance $ $ $ $ Bad debt provisions Recoveries ) ) ) ) Write-offs ) — — — Foreign exchange translation ) ) Ending balance $ $ $ $ |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
OTHER CURRENT LIABILITIES | |
Schedule of other current liabilities | June 30, December 31, (US$ in millions) 2017 2016 Unrealized losses on derivative contracts at fair value $ $ Accrued liabilities Advances on sales Other Total $ $ |
FINANCIAL INSTRUMENTS AND FAI34
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) — — — — Unrealized gain on designated derivative contracts(2): Interest rate — — — — — — Foreign exchange — — — — Unrealized gain on undesignated derivative contracts (2): Interest rate — — — — Foreign exchange — — — Commodities Freight — — — Energy — — — Deferred purchase price receivable (Note 13) — — — — Other (3) — — Total assets $ $ $ $ $ $ $ $ Liabilities: Trade accounts payable(1) $ — $ $ $ $ — $ $ $ Unrealized loss on designated derivative contracts (4): Interest rate — — — — Foreign exchange — — — — — — Unrealized loss on undesignated derivative contracts (4): Interest rate — — — — — — Foreign exchange — — — Commodities Freight — — Energy — — Total liabilities $ $ $ $ $ $ $ $ (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 $18 million included in other non-current liabilities at June 30, 2017 and December 31, 2016, respectively. |
Reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | Level 3 Instruments Fair Value Measurements Three Months Ended June 30, 2017 Readily Trade Derivatives, Marketable Receivable/ (US$ in millions) Net (1) Inventories Payable, Net(2) Total Balance, April 1, 2017 $ ) $ $ ) $ Total gains and (losses), realized/unrealized included in cost of goods sold Purchases ) Sales — ) — ) Issuances ) — — ) Settlements — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) — ) Balance, June 30, 2017 $ — $ $ ) $ (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 Derivatives, Marketable Receivable/ (US$ in millions) Net (1) Inventories Payable, Net (2) Total Balance, April 1, 2016 $ $ $ ) $ Total gains and (losses), realized/unrealized included in cost of goods sold Purchases — ) Sales — ) — ) Issuances — ) — ) Settlements ) — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) Balance, June 30, 2016 $ $ $ ) $ (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 $ ) $ $ ) $ Total gains and losses (realized/unrealized) included in cost of goods sold ) Purchases ) Sales — ) — ) Issuances ) — — ) Settlements — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) ) Balance, June 30, 2017 $ — $ $ ) $ (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 $ $ $ ) $ Total gains and losses (realized/unrealized) included in cost of goods sold Purchases — ) Sales — ) — ) Issuances ) ) — ) Settlements ) — Transfers into Level 3 ) ) Transfers out of Level 3 ) ) Balance, June 30, 2016 $ $ $ ) $ (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 $ $ $ ) $ Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016 Cost of goods sold $ $ $ ) $ (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 $ ) $ ) $ $ ) Changes in unrealized gains and (losses) relating to assets and liabilities held at June 30, 2016 Cost of goods sold $ $ ) $ ) $ (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 $ $ Total $ $ Undesignated Derivative Contracts: Foreign Exchange Foreign exchange gains (losses) $ $ Foreign Exchange Cost of goods sold ) Commodities Cost of goods sold ) Freight Cost of goods sold ) ) Energy Cost of goods sold ) Total $ $ ) |
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) $ $ Foreign exchange gains (losses) $ Foreign exchange gains (losses) $ — Total $ $ $ $ — Net Investment Hedge: Foreign Currency denominated debt (4) $ $ ) Foreign currency denominated debt $ — Foreign currency denominated debt $ — Foreign Exchange (3) $ $ ) $ — $ — Total $ $ ) $ — $ — (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) $ $ Foreign exchange gains (losses) $ — Foreign exchange gains (losses) $ — Total $ $ $ — $ — Net Investment Hedge: Foreign currency denominated debt(3) $ $ Foreign currency denominated debt $ — Foreign currency denominated debt $ — Foreign Exchange (3) $ $ ) Foreign exchange gains (losses) $ — Foreign exchange gains (losses) $ — Total $ $ ) $ — $ — (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 $ $ November 24, 2020 3 month LIBOR plus 1.91% % euro euro June 16, 2023 6 month EURIBOR plus 1.64% % $ $ August 15, 2026 3 month LIBOR plus 1.12% % 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 $ $ — $ — Notional Swaps — ) Notional Forward Rate Agreements — — 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 $ — $ ) $ Delta Forwards — ) Notional Futures ) — — Notional Swaps — ) 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 — — Metric Tons Options ) — — Metric Tons Forwards — ) Metric Tons Swaps ) 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 — — Hire Days FFA Options — — 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 — — MMBtus Swaps — — MMBtus Options — — — MMBtus Energy—Other Futures — — Metric Tons Forwards — — Metric Tons Swaps — — 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. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
DEBT | |
Schedule of carrying amounts and fair value of long-term debt | June 30, 2017 December 31, 2016 Carrying Fair Value Carrying Fair Value (US$ in millions) Value (Level 2) Value (Level 2) Long-term debt, including current portion $ $ $ $ |
TRADE RECEIVABLES SECURITIZAT36
TRADE RECEIVABLES SECURITIZATION PROGRAM (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
TRADE RECEIVABLES SECURITIZATION PROGRAM | |
Summary of cash flows and discounts of trade receivables securitization program | June 30, June 30, (US$ in millions) 2017 2016 Gross receivables sold $ $ Proceeds received in cash related to transfer of receivables $ $ Cash collections from customers on receivables previously sold $ $ Discounts related to gross receivables sold included in SG&A $ $ June 30, December 31, (US$ in millions) 2017 2016 Receivables sold which were derecognized on Bunge balance sheet $ $ Deferred purchase price included in other current assets $ $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Liabilities related to general claims and lawsuits included in other non-current liabilities | June 30, December 31, (US$ in millions) 2017 2016 Non-income tax claims $ $ Labor claims Civil and other claims Total $ $ |
Maximum potential future payments related to guarantees | Guarantees - Bunge has issued or was a party to the following guarantees at June 30, 2017: Maximum Potential Future (US$ in millions) Payments Unconsolidated affiliates financing (1)(2) $ Residual value guarantee (3) Total $ (1) Bunge issued guarantees to certain financial institutions related to debt of certain of its unconsolidated joint ventures. The terms of the guarantees are equal to the terms of the related financings which have maturity dates in 2017 through 2022. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. At June 30, 2017, Bunge recorded no obligation related to these guarantees. (2) Bunge issued guarantees to certain third parties related to performance of its unconsolidated joint ventures. The terms of the guarantees are equal to the completion date of a port terminal which is expected to be completed in 2019. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. At June 30, 2017, Bunge recorded no obligation related to these guarantees. (3) Bunge issued guarantees to certain financial institutions which are party to certain operating lease arrangements for railcars and barges. These guarantees provide for a minimum residual value to be received by the lessor at conclusion of the lease term. These leases expire at various dates from 2018 through 2021. At June 30, 2017, Bunge’s recorded obligation related to these guarantees was $3 million. |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
EQUITY | |
Schedule of after-tax components of accumulated other comprehensive income (loss) attributable to Bunge | Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance April 1, 2017 $ ) $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) ) — ) Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2017 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance April 1, 2016 $ ) $ $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — — Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2016 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance, January 1, 2017 $ ) $ ) $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — Amount reclassified from accumulated other comprehensive income — ) — — ) Balance, June 30, 2017 $ ) $ ) $ ) $ $ ) Deferred Pension and Other Unrealized Accumulated Foreign Exchange Gains (Losses) Postretirement Gains (Losses) Other Translation on Hedging Liability on Comprehensive (US$ in millions) Adjustment Activities Adjustments Investments Income (Loss) Balance, January 1, 2016 $ ) $ $ ) $ $ ) Other comprehensive income (loss) before reclassifications ) — — Amount reclassified from accumulated other comprehensive income — — — — — Balance, June 30, 2016 $ ) $ ) $ ) $ $ ) |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
EARNINGS PER COMMON SHARE | |
Computation of basic and diluted earnings per common share | Three Months Ended Six Months Ended June 30, June 30, (US$ in millions, except for share data) 2017 2016 2017 2016 Income (loss) from continuing operations $ $ $ $ Net (income) loss attributable to noncontrolling interests ) ) Income (loss) from continuing operations attributable to Bunge Other redeemable obligations (1) — ) — ) Convertible preference share dividends ) ) ) ) Income (loss) from discontinued operations, net of tax ) — ) Net income (loss) available to Bunge common shareholders $ $ $ $ Weighted-average number of common shares outstanding: Basic Effect of dilutive shares: —stock options and awards —convertible preference shares — — — Diluted (2) Basic earnings per common share: Net income (loss) from continuing operations $ $ $ $ Net income (loss) from discontinued operations ) — ) Net income (loss) attributable to Bunge common shareholders—basic $ $ $ $ Diluted earnings per common share: Net income (loss) from continuing operations $ $ $ $ Net income (loss) from discontinued operations ) — ) Net income (loss) attributable to Bunge common shareholders—diluted $ $ $ $ (1) Accretion of redeemable noncontrolling interest of $3 million and $8 million for the three and six months ended June 30, 2016, respectively, related to a non-fair value variable put arrangement whereby the noncontrolling interest holder could require Bunge to purchase the remaining shares of an oilseed processing operation in Central and Eastern Europe. Accretion for the respective periods include the effect of losses incurred by the operations for the three and six months ended June 30, 2016. In the second quarter of 2016, this variable put arrangement was terminated. (2) Approximately 3 million outstanding stock options and contingently issuable restricted stock units were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2017. Approximately 8 million weighted-average common shares that are issuable upon conversion of the convertible preference shares were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2017. Approximately 4 million outstanding stock options and contingently issuable restricted stock units were not dilutive and not included in the weighted-average number of common shares outstanding for the three and six months ended June 30, 2016. Approximately 8 million weighted-average common shares that are issuable upon conversion of the convertible preference shares were not dilutive and not included in the weighted-average number of common shares outstanding for the three months ended June 30, 2016. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT INFORMATION | |
Operating Segment Information | (US$ in millions) Edible Discontinued Three Months Ended Oil Milling Sugar and Operations & June 30, 2017 Agribusiness Products Products Bioenergy Fertilizer Unallocated (1) Total Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — — — ) — Foreign exchange gains (losses) ) — Noncontrolling interests (1) ) ) — — ) ) Other income (expense) — net ) — — Segment EBIT (2) — Discontinued operations (3) — — — — — Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Three Months Ended Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — ) — Foreign exchange gains (losses) ) ) ) — — ) Noncontrolling interests (1) ) ) — — — Other income (expense) — net ) — — ) — — ) Segment EBIT (2) — — Discontinued operations (3) — — — — — ) ) Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Edible Discontinued Six Months Ended Oil Milling Sugar and Operations & June 30, 2017 Agribusiness Products Products Bioenergy Fertilizer Unallocated (1) Total Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — — ) — Foreign exchange gains (losses) ) — Noncontrolling interests (1) ) ) — — ) ) Other income (expense) — net ) ) — — ) Segment EBIT (2) ) ) — Discontinued operations (3) — — — — — — — Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ Six Months Ended June 30, 2016 Net sales to external customers $ $ $ $ $ $ — $ Inter—segment revenues — ) — Foreign exchange gains (losses) ) ) ) — Noncontrolling interests (1) — ) — — — Other income (expense) — net ) ) ) ) — — ) Segment EBIT (2) ) — Discontinued operations (3) — — — — — ) ) Depreciation, depletion and amortization ) ) ) ) ) — ) Total assets $ $ $ $ $ $ $ (1) Includes noncontrolling interests share of interest and tax to reconcile to consolidated noncontrolling interest. (2) Total segment earnings before interest and taxes (“EBIT”) is an operating performance measure used by Bunge’s management to evaluate segment operating activities. Bunge’s management believes total segment EBIT is a useful measure of operating profitability, since the measure allows for an evaluation of the performance of its segments without regard to its financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge’s industry. (3) Represents net income (loss) from discontinued operations. |
Reconciliation of total Segment EBIT to net income attributable to Bunge | Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2017 2016 2017 2016 Total Segment EBIT from continuing operations $ $ $ $ Interest income Interest expense ) ) ) ) Income tax (expense) benefit ) ) Income (loss) from discontinued operations, net of tax ) — ) Noncontrolling interests’ share of interest and tax Net income attributable to Bunge $ $ $ $ |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) $ in Millions | Feb. 28, 2017USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Purchase price allocation | |||
Goodwill | $ 504 | $ 373 | |
Cargill's two oilseed processing plants | |||
BUSINESS ACQUISITIONS | |||
Number of oilseed processing plants and operations | item | 2 | ||
Purchase price | $ 344 | ||
Purchase price allocation | |||
Property, plant and equipment | 109 | ||
Other net assets and liabilities | 125 | ||
Finite-lived intangible assets | 7 | ||
Goodwill | $ 103 |
TRADE STRUCTURED FINANCE PROG42
TRADE STRUCTURED FINANCE PROGRAM (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
TRADE STRUCTURED FINANCE PROGRAM | |||
Net return from activities including fair value changes | $ 18 | $ 30 | |
Weighted-average interest rate of time deposits (as a percent) | 2.59% | 2.36% | |
Total net proceeds from issuances of LCs | $ 3,889 | $ 3,242 | |
Current assets: | |||
Carrying value of time deposits | $ 64 | ||
Non-current assets: | |||
Carrying value of time deposits | 411 | 464 | |
Current liabilities: | |||
Carrying value of letters of credit obligations | 411 | 528 | |
Time deposits and LCs presented net on the consolidated balance sheets | |||
TRADE STRUCTURED FINANCE PROGRAM | |||
Face value of time deposits and LCs | 6,182 | 5,732 | |
Level 2 | |||
Current assets: | |||
Fair value (Level 2 measurement) of time deposits | 64 | ||
Non-current assets: | |||
Fair value (Level 2 measurement) of time deposits | 411 | 464 | |
Current liabilities: | |||
Fair value (Level 2 measurement) of letters of credit obligations | $ 411 | $ 528 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
INVENTORIES | ||
Inventories | $ 5,454 | $ 4,773 |
Agribusiness | ||
INVENTORIES | ||
Inventories | 4,298 | 3,741 |
Readily marketable inventories at fair value | 4,140 | 3,593 |
Agribusiness | Merchandising Activities | ||
INVENTORIES | ||
Readily marketable inventories at fair value | 3,015 | 2,523 |
Edible Oil Products | ||
INVENTORIES | ||
Inventories | 418 | 404 |
Readily marketable inventories at fair value | 104 | 123 |
Milling Products | ||
INVENTORIES | ||
Inventories | 190 | 167 |
Sugar and Bioenergy | ||
INVENTORIES | ||
Inventories | 455 | 406 |
Sugar and Bioenergy | Merchandising Activities | ||
INVENTORIES | ||
Readily marketable inventories at fair value | 132 | 139 |
Fertilizer | ||
INVENTORIES | ||
Inventories | $ 93 | $ 55 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Other current assets: | |||||
Unrealized gains on derivative contracts, at fair value | $ 1,594 | $ 1,594 | $ 1,327 | ||
Prepaid commodity purchase contracts | 323 | 323 | 273 | ||
Secured advances to suppliers, net | 421 | 421 | 601 | ||
Recoverable taxes, net | 493 | 493 | 467 | ||
Margin deposits | 295 | 295 | 251 | ||
Marketable securities, at fair value and other short-term investments | 290 | 290 | 94 | ||
Deferred purchase price receivable, at fair value | 96 | 96 | 87 | ||
Prepaid expenses | 121 | 121 | 148 | ||
Other | 505 | 505 | 397 | ||
Total | 4,138 | 4,138 | 3,645 | ||
Allowance on secured advance to farmers | 1 | 1 | $ 1 | ||
Interest earned on secured advances to suppliers | $ 12 | $ 7 | $ 27 | $ 18 |
OTHER CURRENT ASSETS - MARKETAB
OTHER CURRENT ASSETS - MARKETABLE SECURITIES AND OTHER SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Marketable Securities and Other Short-Term Investments | ||
Total marketable securities and other short-term investments | $ 290 | $ 94 |
Available for sale securities | 16 | 22 |
Trading | 266 | 63 |
Other short-term investments | $ 8 | 9 |
Maximum maturity period | 12 months | |
Foreign government securities | ||
Marketable Securities and Other Short-Term Investments | ||
Total marketable securities and other short-term investments | $ 214 | 28 |
Corporate debt securities | ||
Marketable Securities and Other Short-Term Investments | ||
Total marketable securities and other short-term investments | 65 | 57 |
Certificate of deposits/time deposits | ||
Marketable Securities and Other Short-Term Investments | ||
Total marketable securities and other short-term investments | 6 | 7 |
Other | ||
Marketable Securities and Other Short-Term Investments | ||
Total marketable securities and other short-term investments | $ 5 | $ 2 |
OTHER NON-CURRENT ASSETS - COMP
OTHER NON-CURRENT ASSETS - COMPOSITION (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
OTHER NON-CURRENT ASSETS | ||
Recoverable taxes, net | $ 125 | $ 139 |
Judicial deposits | 138 | 129 |
Other long-term receivables | 22 | 23 |
Income taxes receivable | 279 | 261 |
Long-term investments | 56 | 54 |
Affiliate loans receivable | 24 | 25 |
Long-term receivables from farmers in Brazil, net | 134 | 133 |
Other | 164 | 163 |
Total | 942 | 927 |
Allowance for recoverable taxes | $ 26 | $ 32 |
Minimum initial maturity of affiliate loans receivable | 1 year |
OTHER NON-CURRENT ASSETS - RECE
OTHER NON-CURRENT ASSETS - RECEIVABLES FROM FARMERS IN BRAZIL (Details) - Long-term receivables - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Recorded Investment | ||||||
Long-term receivables from farmers in Brazil | $ 243 | $ 242 | ||||
Average recorded investment in long-term receivables | 264 | 235 | ||||
Allowance | 109 | 109 | $ 111 | $ 111 | $ 108 | $ 100 |
Legal collection process | ||||||
Recorded Investment | ||||||
Long-term receivables from farmers in Brazil | 155 | 144 | ||||
For which an allowance has been provided: | 96 | 84 | ||||
For which no allowance has been provided: | 59 | 60 | ||||
Allowance | 82 | 78 | ||||
Renegotiated amounts | ||||||
Recorded Investment | ||||||
Long-term receivables from farmers in Brazil | 50 | 52 | ||||
For which an allowance has been provided: | 30 | 36 | ||||
For which no allowance has been provided: | 20 | 16 | ||||
Allowance | 27 | 31 | ||||
Other long-term receivables | ||||||
Recorded Investment | ||||||
Long-term receivables from farmers in Brazil | 38 | 46 | ||||
For which no allowance has been provided: | $ 38 | $ 46 |
OTHER NON-CURRENT ASSETS - ALLO
OTHER NON-CURRENT ASSETS - ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - Long-term receivables - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Allowance for Doubtful Accounts Related to Long Term Receivables | ||||
Beginning balance | $ 111 | $ 108 | $ 109 | $ 100 |
Bad debt provisions | 9 | 1 | 10 | 1 |
Recoveries | (5) | (9) | (8) | (9) |
Write-offs | (1) | |||
Foreign exchange translation | (5) | 11 | (2) | 19 |
Ending balance | $ 109 | $ 111 | $ 109 | $ 111 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
INCOME TAXES | ||||
Income tax (expense) benefit | $ 55 | $ (39) | $ 27 | $ (73) |
Effective tax rate (as a percent) | (25.00%) | 17.00% | ||
income tax benefit for favorable resolution of income tax matters | $ 32 | |||
Discrete tax benefits | $ 17 | $ 60 | ||
Income tax refund claims | 11 | |||
Income tax charge for uncertain tax position | $ 32 | |||
Effective tax rates excluding discrete items | 20.00% | 26.00% | ||
Unrecognized tax benefits may be recognized within the next twelve months | $ 30 | $ 30 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
OTHER CURRENT LIABILITIES | ||
Unrealized losses on derivative contracts at fair value | $ 1,444 | $ 1,203 |
Accrued liabilities | 513 | 548 |
Advances on sales | 246 | 395 |
Other | 326 | 330 |
Total | $ 2,529 | $ 2,476 |
FINANCIAL INSTRUMENTS AND FAI51
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - ASSETS AND LIABILITIES AT FAIR VALUE (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Unrealized gain | $ 1,594 | $ 1,327 |
Deferred purchase price receivable (Note 13 ) | 96 | 87 |
Liabilities: | ||
Unrealized loss | 1,444 | 1,203 |
Other non-current assets | ||
Unrealized gains (losses) on designated and undesignated derivative contracts | ||
Unrealized gains (losses) on derivative contracts | 0 | 5 |
Other non-current liabilities | ||
Unrealized gains (losses) on designated and undesignated derivative contracts | ||
Unrealized gains (losses) on derivative contracts | 28 | 18 |
Assets and liabilities measured at fair value on a recurring basis | ||
Assets: | ||
Readily marketable inventories (Note 5) | 4,376 | 3,855 |
Trade accounts receivable | 7 | 6 |
Deferred purchase price receivable (Note 13 ) | 96 | 87 |
Other | 706 | 126 |
Total assets | 6,779 | 5,405 |
Liabilities: | ||
Trade accounts payable | 1,112 | 522 |
Total liabilities | 2,584 | 1,743 |
Assets and liabilities measured at fair value on a recurring basis | Designated derivative contracts | Interest rate | ||
Assets: | ||
Unrealized gain | 1 | |
Liabilities: | ||
Unrealized loss | 23 | 18 |
Assets and liabilities measured at fair value on a recurring basis | Designated derivative contracts | Foreign exchange | ||
Assets: | ||
Unrealized gain | 21 | 29 |
Liabilities: | ||
Unrealized loss | 2 | |
Assets and liabilities measured at fair value on a recurring basis | Undesignated derivative contracts | Interest rate | ||
Assets: | ||
Unrealized gain | 4 | 1 |
Liabilities: | ||
Unrealized loss | 3 | |
Assets and liabilities measured at fair value on a recurring basis | Undesignated derivative contracts | Foreign exchange | ||
Assets: | ||
Unrealized gain | 308 | 312 |
Liabilities: | ||
Unrealized loss | 310 | 233 |
Assets and liabilities measured at fair value on a recurring basis | Undesignated derivative contracts | Commodities | ||
Assets: | ||
Unrealized gain | 1,225 | 948 |
Liabilities: | ||
Unrealized loss | 1,091 | 944 |
Assets and liabilities measured at fair value on a recurring basis | Undesignated derivative contracts | Freight | ||
Assets: | ||
Unrealized gain | 22 | 16 |
Liabilities: | ||
Unrealized loss | 24 | 15 |
Assets and liabilities measured at fair value on a recurring basis | Undesignated derivative contracts | Energy | ||
Assets: | ||
Unrealized gain | 14 | 24 |
Liabilities: | ||
Unrealized loss | 19 | 11 |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | ||
Assets: | ||
Other | 17 | 18 |
Total assets | 699 | 478 |
Liabilities: | ||
Total liabilities | 663 | 379 |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | Undesignated derivative contracts | Foreign exchange | ||
Assets: | ||
Unrealized gain | 2 | |
Liabilities: | ||
Unrealized loss | 3 | |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | Undesignated derivative contracts | Commodities | ||
Assets: | ||
Unrealized gain | 648 | 421 |
Liabilities: | ||
Unrealized loss | 623 | 356 |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | Undesignated derivative contracts | Freight | ||
Assets: | ||
Unrealized gain | 18 | 16 |
Liabilities: | ||
Unrealized loss | 21 | 14 |
Assets and liabilities measured at fair value on a recurring basis | Level 1 | Undesignated derivative contracts | Energy | ||
Assets: | ||
Unrealized gain | 14 | 23 |
Liabilities: | ||
Unrealized loss | 16 | 9 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | ||
Assets: | ||
Readily marketable inventories (Note 5) | 3,753 | 3,618 |
Trade accounts receivable | 7 | 6 |
Deferred purchase price receivable (Note 13 ) | 96 | 87 |
Other | 689 | 108 |
Total assets | 5,406 | 4,594 |
Liabilities: | ||
Trade accounts payable | 659 | 478 |
Total liabilities | 1,417 | 1,173 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Designated derivative contracts | Interest rate | ||
Assets: | ||
Unrealized gain | 1 | |
Liabilities: | ||
Unrealized loss | 23 | 18 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Designated derivative contracts | Foreign exchange | ||
Assets: | ||
Unrealized gain | 21 | 29 |
Liabilities: | ||
Unrealized loss | 2 | |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Undesignated derivative contracts | Interest rate | ||
Assets: | ||
Unrealized gain | 4 | 1 |
Liabilities: | ||
Unrealized loss | 3 | |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Undesignated derivative contracts | Foreign exchange | ||
Assets: | ||
Unrealized gain | 306 | 312 |
Liabilities: | ||
Unrealized loss | 307 | 233 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Undesignated derivative contracts | Commodities | ||
Assets: | ||
Unrealized gain | 530 | 431 |
Liabilities: | ||
Unrealized loss | 423 | 444 |
Assets and liabilities measured at fair value on a recurring basis | Level 2 | Undesignated derivative contracts | Energy | ||
Assets: | ||
Unrealized gain | 1 | |
Assets and liabilities measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Readily marketable inventories (Note 5) | 623 | 237 |
Total assets | 674 | 333 |
Liabilities: | ||
Trade accounts payable | 453 | 44 |
Total liabilities | 504 | 191 |
Assets and liabilities measured at fair value on a recurring basis | Level 3 | Undesignated derivative contracts | Commodities | ||
Assets: | ||
Unrealized gain | 47 | 96 |
Liabilities: | ||
Unrealized loss | 45 | 144 |
Assets and liabilities measured at fair value on a recurring basis | Level 3 | Undesignated derivative contracts | Freight | ||
Assets: | ||
Unrealized gain | 4 | |
Liabilities: | ||
Unrealized loss | 3 | 1 |
Assets and liabilities measured at fair value on a recurring basis | Level 3 | Undesignated derivative contracts | Energy | ||
Liabilities: | ||
Unrealized loss | 3 | 2 |
Fair value | Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities: | ||
Trade accounts receivable related to certain delivered inventory accounted for at prices that fluctuate based on changes in commodity prices and for which no payments had been received | 7 | 6 |
Trade accounts payable related to certain delivered inventory accounted for at prices that fluctuate based on changes in commodity prices and for which no payments had been made | $ 1,112 | $ 522 |
FINANCIAL INSTRUMENTS AND FAI52
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - RECONCILIATION FOR ASSETS AND LIABILITIES MEASURE AT FAIR VALUE USING LEVEL 3 (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Balance at beginning of period | $ 299 | $ 455 | $ 142 | $ 368 |
Purchases | 256 | 179 | 694 | 521 |
Sales | (658) | (250) | (1,030) | (499) |
Issuances | (3) | (7) | (5) | (7) |
Settlements | 145 | 93 | 162 | 28 |
Transfers into Level 3 | 103 | 165 | 279 | 300 |
Transfers out of Level 3 | (89) | (19) | (123) | (26) |
Balance at end of period | 170 | 856 | 170 | 856 |
Cost of goods sold | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Total gains and losses (realized/unrealized) included in cost of goods sold | 117 | 240 | 51 | 171 |
Changes in unrealized gains and (losses) relating to assets and liabilities | 26 | 131 | (15) | 11 |
Derivatives, Net | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Balance at beginning of period | (72) | 16 | (51) | 167 |
Purchases | 1 | 5 | ||
Issuances | (3) | (5) | (1) | |
Settlements | 54 | (6) | 71 | (72) |
Transfers into Level 3 | (3) | (2) | (7) | (2) |
Transfers out of Level 3 | (4) | 3 | 19 | 3 |
Balance at end of period | 127 | 127 | ||
Derivatives, Net | Cost of goods sold | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Total gains and losses (realized/unrealized) included in cost of goods sold | 27 | 116 | (32) | 32 |
Changes in unrealized gains and (losses) relating to assets and liabilities | 5 | 83 | (9) | 20 |
Readily Marketable Inventories | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Balance at beginning of period | 743 | 730 | 237 | 245 |
Purchases | 380 | 196 | 1,144 | 733 |
Sales | (658) | (250) | (1,030) | (499) |
Issuances | (7) | (6) | ||
Transfers into Level 3 | 157 | 168 | 341 | 361 |
Transfers out of Level 3 | (85) | (41) | (141) | (48) |
Balance at end of period | 623 | 917 | 623 | 917 |
Readily Marketable Inventories | Cost of goods sold | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Total gains and losses (realized/unrealized) included in cost of goods sold | 86 | 121 | 72 | 131 |
Changes in unrealized gains and (losses) relating to assets and liabilities | 22 | 51 | (9) | (7) |
Trade Accounts Receivable/Payable, Net | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Balance at beginning of period | (372) | (291) | (44) | (44) |
Purchases | (125) | (17) | (455) | (212) |
Settlements | 91 | 99 | 91 | 100 |
Transfers into Level 3 | (51) | (1) | (55) | (59) |
Transfers out of Level 3 | 19 | (1) | 19 | |
Balance at end of period | (453) | (188) | (453) | (188) |
Trade Accounts Receivable/Payable, Net | Cost of goods sold | ||||
Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Total gains and losses (realized/unrealized) included in cost of goods sold | 4 | 3 | 11 | 8 |
Changes in unrealized gains and (losses) relating to assets and liabilities | $ (1) | $ (3) | $ 3 | $ (2) |
FINANCIAL INSTRUMENTS AND FAI53
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - DERIVATIVE POSITIONS (Details) € in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017EUR (€)itemMMBTUt | Dec. 31, 2016USD ($) | Jun. 30, 2017USD ($)item | |
Interest Rate Swap Maturity at November 24, 2020 | |||
Derivative | |||
Notional Amount of Hedged Obligation | $ 500 | ||
Fixed Rate Receivable | 3.50% | 3.50% | |
Notional amount of derivative | $ 500 | ||
Interest Rate Swap Maturity at June 16, 2023 | |||
Derivative | |||
Notional Amount of Hedged Obligation | € | € 800 | ||
Fixed Rate Receivable | 1.85% | 1.85% | |
Notional amount of derivative | € | € 800 | ||
Interest Rate Swap Maturity at August 15, 2026 | |||
Derivative | |||
Notional Amount of Hedged Obligation | $ 550 | ||
Fixed Rate Receivable | 3.25% | 3.25% | |
Notional amount of derivative | $ 550 | ||
Commodities | Maximum | |||
Derivative | |||
Maximum period of commodity contracts for sale of agricultural commodity | 1 year | ||
Designated derivative contracts | Freight | |||
Derivative | |||
Notional amount of derivative | $ 0 | 0 | |
Undesignated derivative contracts | Interest rate | |||
Derivative | |||
Term of contract | 1 year | 1 year | |
LIBOR | Interest Rate Swap Maturity at November 24, 2020 | |||
Derivative | |||
Weighted Average Rate Payable | 1.91% | ||
LIBOR | Interest Rate Swap Maturity at August 15, 2026 | |||
Derivative | |||
Weighted Average Rate Payable | 1.12% | ||
EURIBOR | Interest Rate Swap Maturity at June 16, 2023 | |||
Derivative | |||
Weighted Average Rate Payable | 1.64% | ||
Senior Notes Due 2023 | |||
Derivative | |||
Aggregate principal amount | € | € 800 | ||
Senior Notes Due 2023 | Designated derivative contracts | |||
Derivative | |||
Notional Amount of Hedged Obligation | € | € 797 | ||
Exchange Traded | Interest rate | Futures | Long | |||
Derivative | |||
Notional amount of derivative | 2 | ||
Exchange Traded | Foreign exchange | Futures | Short | |||
Derivative | |||
Notional amount of derivative | 70 | ||
Exchange Traded | Commodities | Futures | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 765,000 | ||
Exchange Traded | Commodities | Options | Short | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 300,894 | ||
Exchange Traded | Commodities | Swaps | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 508,000 | ||
Exchange Traded | Natural Gas | Futures | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | MMBTU | 4,525,431 | ||
Exchange Traded | Energy - Other | Futures | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 16,086 | ||
Exchange Traded | Energy - Other | Swaps | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 249,400 | ||
Non-exchange Traded | Interest rate | Forward Rate Agreements | Long | |||
Derivative | |||
Notional amount of derivative | 3,513 | ||
Non-exchange Traded | Interest rate | Swaps | Short | |||
Derivative | |||
Notional amount of derivative | 1,963 | ||
Non-exchange Traded | Interest rate | Swaps | Long | |||
Derivative | |||
Notional amount of derivative | 710 | ||
Non-exchange Traded | Foreign exchange | Options | Short | |||
Derivative | |||
Delta amount of open foreign exchange positions | 698 | ||
Non-exchange Traded | Foreign exchange | Options | Long | |||
Derivative | |||
Delta amount of open foreign exchange positions | 342 | ||
Non-exchange Traded | Foreign exchange | Forwards | Short | |||
Derivative | |||
Notional amount of derivative | 10,204 | ||
Non-exchange Traded | Foreign exchange | Forwards | Long | |||
Derivative | |||
Notional amount of derivative | 9,649 | ||
Non-exchange Traded | Foreign exchange | Swaps | Short | |||
Derivative | |||
Notional amount of derivative | 342 | ||
Non-exchange Traded | Foreign exchange | Swaps | Long | |||
Derivative | |||
Notional amount of derivative | $ 1,082 | ||
Non-exchange Traded | Commodities | Forwards | Short | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 31,421,931 | ||
Non-exchange Traded | Commodities | Forwards | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 24,072,031 | ||
Non-exchange Traded | Commodities | Swaps | Short | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 3,621,709 | ||
Non-exchange Traded | Commodities | Swaps | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 943,966 | ||
Exchange Cleared | Freight | Options | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | item | 212 | 212 | |
Exchange Cleared | Freight | Forwards | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | item | 1,661 | 1,661 | |
Non Exchange Cleared | Natural Gas | Swaps | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | MMBTU | 673,649 | ||
Non Exchange Cleared | Energy - Other | Forwards | Long | |||
Derivative | |||
Nonmonetary notional amount of derivatives | t | 6,048,869 |
FINANCIAL INSTRUMENTS AND FAI54
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - EFFECT OF DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary of Cash Flow and Net Investment Hedges | |||
Amount of gain or loss relating to ineffective portion | $ 0 | $ 0 | |
Amount of gain or loss excluded from the assessment of hedge effectiveness | 0 | 0 | |
Cash Flow Hedges | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 266 | 178 | |
Gain or (Loss) Recognized in Accumulated OCI | 1 | 30 | |
Gain or (Loss) Reclassified from Accumulated OCI into Income | 17 | ||
Cash Flow Hedges | Foreign exchange | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 266 | 178 | |
Gain or (Loss) Recognized in Accumulated OCI | 1 | 30 | |
Gains (loss) expected to be reclassified from accumulated OCI into income in the next 12 months | 1 | 16 | |
Cash Flow Hedges | Foreign exchange | Foreign exchange gains (losses) | |||
Summary of Cash Flow and Net Investment Hedges | |||
Gain or (Loss) Reclassified from Accumulated OCI into Income | 17 | ||
Net Investment Hedges | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 1,381 | 1,936 | |
Gain or (Loss) Recognized in Accumulated OCI | (72) | (369) | |
Net Investment Hedges | Foreign currency denominated debt | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 881 | 661 | |
Gain or (Loss) Recognized in Accumulated OCI | (70) | 4 | |
Net Investment Hedges | Foreign exchange | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 500 | 1,275 | |
Gain or (Loss) Recognized in Accumulated OCI | (2) | (373) | |
Gains (loss) expected to be reclassified from accumulated OCI into income in the next 12 months | 0 | 0 | |
Designated derivative contracts | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Designated Derivative Contracts | 8 | 3 | |
Designated derivative contracts | Interest rate | Interest income/Interest expense | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | 8 | 3 | |
Designated derivative contracts | Freight | |||
Summary of Cash Flow and Net Investment Hedges | |||
Notional Amount | 0 | $ 0 | |
Undesignated derivative contracts | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | 400 | (98) | |
Undesignated derivative contracts | Foreign exchange | Foreign exchange gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | 22 | 253 | |
Undesignated derivative contracts | Foreign exchange | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | (18) | 601 | |
Undesignated derivative contracts | Commodities | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | 412 | (960) | |
Undesignated derivative contracts | Freight | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | (3) | (1) | |
Undesignated derivative contracts | Energy | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) | |||
Gain or (Loss) Recognized in Income on Undesignated Derivative Contracts | $ (13) | $ 9 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt | ||
Debt instrument unused and available borrowing capacity amount | $ 4,120 | |
Maximum borrowing capacity | 5,015 | |
Commercial paper program | ||
Debt | ||
Commercial paper, outstanding issuances | 0 | |
Liquidity facility | ||
Debt | ||
Credit facility, borrowings outstanding | 0 | |
Carrying Value | ||
Debt | ||
Long-term debt, including current portion | 4,124 | $ 4,007 |
Fair value | Level 2 | ||
Debt | ||
Long-term debt, including current portion | $ 4,268 | $ 4,163 |
TRADE RECEIVABLES SECURITIZAT56
TRADE RECEIVABLES SECURITIZATION PROGRAM (Details) - Bunge Securitization B.V. - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
TRADE RECEIVABLES SECURITIZATION PROGRAM | ||
Maximum funding under trade receivables securitization program | $ 700 | |
Gross receivables sold | 4,554 | $ 4,297 |
Proceeds received in cash related to transfer of receivables | 4,379 | 4,150 |
Cash collections from customers on receivables previously sold | 4,434 | 4,210 |
Discounts related to gross receivables sold included in SG&A | 4 | 3 |
Receivables sold which were derecognized on Bunge balance sheet | 672 | 628 |
Deferred purchase price included in other current assets | $ 96 | $ 87 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Tapajos | ||||
RELATED PARTY TRANSACTIONS | ||||
Ownership interest (as a percent) | 50.00% | 50.00% | ||
Notes receivable | $ 22 | $ 22 | ||
Solazyme | ||||
RELATED PARTY TRANSACTIONS | ||||
Ownership interest (as a percent) | 49.90% | 49.90% | ||
Notes receivable | $ 9 | $ 9 | ||
Interest rate | 11.05% | |||
Other related party | ||||
RELATED PARTY TRANSACTIONS | ||||
Notes receivable | 3 | $ 3 | ||
Bunge-SCF Grain, LLC | ||||
RELATED PARTY TRANSACTIONS | ||||
Notes payable | 11 | 11 | ||
Unconsolidated joint ventures | ||||
RELATED PARTY TRANSACTIONS | ||||
Purchases of soybeans, other commodity products and received port services from certain unconsolidated ventures | 232 | $ 216 | 500 | $ 469 |
Sale of soybeans, other commodity products and provided port services to certain unconsolidated ventures | $ 245 | $ 73 | $ 311 | $ 129 |
COMMITMENTS AND CONTINGENCIES58
COMMITMENTS AND CONTINGENCIES (Details) BRL in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2017BRLsubsidiaryitem | Jun. 30, 2017USD ($)subsidiaryitem | Dec. 31, 2016BRL | Dec. 31, 2016USD ($) | Dec. 31, 2011USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2016employee | |
Loss Contingencies and Guarantees | |||||||
Loss contingency accrual, at carrying value | $ 350 | $ 355 | |||||
Maximum potential future payments related to guarantees | 409 | ||||||
Brazil | |||||||
Loss Contingencies and Guarantees | |||||||
Number of employees under administrative proceedings | employee | 2 | ||||||
Argentina | |||||||
Loss Contingencies and Guarantees | |||||||
Payment of accrued export tax obligations | $ 112 | ||||||
Interest assessed on paid export tax obligations | 250 | ||||||
Non-income tax claims | |||||||
Loss Contingencies and Guarantees | |||||||
Loss contingency accrual, at carrying value | 170 | 173 | |||||
Labor claims | |||||||
Loss Contingencies and Guarantees | |||||||
Loss contingency accrual, at carrying value | 82 | 91 | |||||
Civil and other claims | |||||||
Loss Contingencies and Guarantees | |||||||
Loss contingency accrual, at carrying value | 98 | 91 | |||||
Value added tax claims (ICMS, IPI, PIS/COFINS) | Brazil | |||||||
Loss Contingencies and Guarantees | |||||||
Income tax liability for ICMS incentives or benefits | 0 | ||||||
Unconstitutional ICMS tax credits | |||||||
Loss Contingencies and Guarantees | |||||||
Income tax liability for ICMS incentives or benefits | BRL 468 | 141 | |||||
Portion of outstanding liabilities | BRL 408 | 123 | |||||
Unconsolidated affiliates financing | |||||||
Loss Contingencies and Guarantees | |||||||
Maximum potential future payments related to guarantees | 182 | ||||||
Residual value guarantee | |||||||
Loss Contingencies and Guarantees | |||||||
Maximum potential future payments related to guarantees | 227 | ||||||
Obligation related to outstanding guarantees | 3 | ||||||
Guarantee of indebtedness of subsidiaries | |||||||
Loss Contingencies and Guarantees | |||||||
Long-term debt including current portion, carrying value | $ 5,013 | ||||||
Guarantee of indebtedness of subsidiaries | Bunge Limited Finance Corp. and Bunge Finance Europe B.V. | |||||||
Loss Contingencies and Guarantees | |||||||
Number of subsidiaries | subsidiary | 2 | 2 | |||||
Percentage of ownership interest | 100.00% | 100.00% | |||||
Debt payment | Unconsolidated affiliates financing | |||||||
Loss Contingencies and Guarantees | |||||||
Obligation related to outstanding guarantees | $ 0 | ||||||
Performance guarantee | Unconsolidated affiliates financing | |||||||
Loss Contingencies and Guarantees | |||||||
Obligation related to outstanding guarantees | $ 0 | ||||||
Tax return examination 1990 to the present | ICMS tax liability | Brazil | |||||||
Loss Contingencies and Guarantees | |||||||
Number of assessments | item | 1,300 | 1,300 | |||||
Total assessment | BRL 1,030 | $ 311 | BRL 797 | 245 | |||
Tax return examination 2004 To 2011 | PIS COFINS liability | Brazil | |||||||
Loss Contingencies and Guarantees | |||||||
Total assessment | BRL 550 | $ 166 | BRL 510 | $ 156 |
EQUITY - SHARE REPURCHASE PROGR
EQUITY - SHARE REPURCHASE PROGRAM (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | 26 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | May 31, 2015 | |
EQUITY | ||||
Repurchase of common shares for the period | $ 200 | |||
Common Shares | ||||
EQUITY | ||||
Authorized amount of issued and outstanding common shares available for repurchase | $ 500 | |||
Repurchase of common shares (in shares) | 3,296,230 | 4,707,440 | ||
Repurchase of common shares for the period | $ 200 | $ 300 |
EQUITY - AOCI (Details)
EQUITY - AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | $ (5,978) | |||
Balance at end of period | $ (5,951) | (5,951) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | (5,726) | $ (6,026) | (5,978) | $ (6,360) |
Other comprehensive income (loss) before reclassifications | (208) | 314 | 46 | 642 |
Amount reclassified from accumulated other comprehensive income | (17) | (6) | (19) | |
Balance at end of period | (5,951) | (5,718) | (5,951) | (5,718) |
Foreign Exchange Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | (5,473) | (5,931) | (5,734) | (6,443) |
Other comprehensive income (loss) before reclassifications | (145) | 469 | 116 | 981 |
Balance at end of period | (5,618) | (5,462) | (5,618) | (5,462) |
Deferred Gains (Losses) on Hedging Activities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | (111) | 36 | (102) | 214 |
Other comprehensive income (loss) before reclassifications | (64) | (155) | (71) | (339) |
Amount reclassified from accumulated other comprehensive income | (17) | (6) | (19) | |
Balance at end of period | (192) | (125) | (192) | (125) |
Pension and Other Postretirement Liability Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | (145) | (134) | (145) | (134) |
Balance at end of period | (145) | (134) | (145) | (134) |
Unrealized Gains (Losses) on Investments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||
Balance at beginning of period | 3 | 3 | 3 | 3 |
Other comprehensive income (loss) before reclassifications | 1 | 1 | ||
Balance at end of period | $ 4 | $ 3 | $ 4 | $ 3 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Computation of basic and diluted earnings per common share | ||||
Income (loss) from continuing operations | $ 81 | $ 124 | $ 135 | $ 365 |
Net (income) loss attributable to noncontrolling interests | (6) | 1 | (7) | 4 |
Income (loss) from continuing operations attributable to Bunge | 75 | 125 | 128 | 369 |
Other redeemable obligations | (3) | (8) | ||
Convertible preference share dividends | (9) | (9) | (17) | (17) |
Income (loss) from discontinued operations, net of tax | 6 | (4) | (13) | |
Net income (loss) available to Bunge common shareholders | $ 72 | $ 109 | $ 111 | $ 331 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 140,466,021 | 139,406,634 | 140,111,135 | 140,234,524 |
Effect of dilutive shares: | ||||
-stock options and awards (in shares) | 932,783 | 358,243 | 1,043,341 | 289,838 |
-convertible preference shares (in shares) | 7,877,730 | |||
Diluted (in shares) | 141,398,804 | 139,764,877 | 141,154,476 | 148,402,092 |
Basic earnings per common share: | ||||
Net income (loss) from continuing operations (in dollars per share) | $ 0.48 | $ 0.81 | $ 0.79 | $ 2.45 |
Net income (loss) from discontinued operations (in dollars per share) | 0.04 | (0.03) | (0.09) | |
Net income (loss) attributable to Bunge common shareholders (in dollars per share) | 0.52 | 0.78 | 0.79 | 2.36 |
Diluted earnings per common share: | ||||
Net income (loss) from continuing operations (in dollars per share) | 0.48 | 0.81 | 0.79 | 2.43 |
Net income (loss) from discontinued operations (in dollars per share) | 0.03 | (0.03) | (0.09) | |
Net income (loss) attributable to Bunge common shareholders (in dollars per share) | $ 0.51 | $ 0.78 | $ 0.79 | $ 2.34 |
Stock options and contingently issuable restricted stock units | ||||
Diluted earnings per common share: | ||||
Antidilutive shares excluded from computation of EPS | 3,000,000 | 4,000,000 | 3,000,000 | 4,000,000 |
Oilseed processing venture in Eastern Europe | ||||
Diluted earnings per common share: | ||||
Accretion of redeemable noncontrolling interest gain (loss) | $ 3 | $ 8 | ||
Convertible Preference Shares | ||||
Diluted earnings per common share: | ||||
Antidilutive shares excluded from computation of EPS | 8,000,000 | 8,000,000 | 8,000,000 |
SEGMENT INFORMATION - FINANCIAL
SEGMENT INFORMATION - FINANCIAL INFORMATION BY SEGMENT (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | segment | 5 | ||||
Operating Segment Information | |||||
Net sales to external customers | $ 11,645 | $ 10,541 | $ 22,766 | $ 19,457 | |
Foreign exchange gains (losses) | 51 | (6) | 107 | 15 | |
Noncontrolling interests | (6) | 1 | (7) | 4 | |
Other income (expense) - net | 2 | (13) | (1) | (18) | |
Segment EBIT | 73 | 205 | 206 | 527 | |
Discontinued operations | 6 | (4) | (13) | ||
Depreciation, depletion and amortization | (152) | (141) | (282) | (254) | |
Total assets | 20,433 | 22,095 | 20,433 | 22,095 | $ 19,188 |
Agribusiness | |||||
Operating Segment Information | |||||
Net sales to external customers | 8,298 | 7,524 | 16,117 | 13,807 | |
Foreign exchange gains (losses) | 43 | (4) | 92 | 20 | |
Other income (expense) - net | 1 | (9) | 4 | (6) | |
Segment EBIT | 18 | 168 | 127 | 450 | |
Depreciation, depletion and amortization | (66) | (59) | (127) | (114) | |
Edible Oil Products | |||||
Operating Segment Information | |||||
Net sales to external customers | 1,970 | 1,705 | 3,850 | 3,231 | |
Foreign exchange gains (losses) | 1 | (1) | 4 | (2) | |
Other income (expense) - net | 3 | 1 | (1) | ||
Segment EBIT | 28 | 2 | 64 | 32 | |
Depreciation, depletion and amortization | (26) | (23) | (50) | (45) | |
Milling Products | |||||
Operating Segment Information | |||||
Net sales to external customers | 390 | 422 | 772 | 813 | |
Foreign exchange gains (losses) | (1) | (4) | (1) | (5) | |
Other income (expense) - net | 1 | (1) | (2) | ||
Segment EBIT | 16 | 33 | 25 | 55 | |
Depreciation, depletion and amortization | (15) | (17) | (30) | (31) | |
Sugar and Bioenergy | |||||
Operating Segment Information | |||||
Net sales to external customers | 906 | 809 | 1,894 | 1,467 | |
Foreign exchange gains (losses) | 4 | 3 | 9 | 3 | |
Other income (expense) - net | (3) | (4) | (5) | (9) | |
Segment EBIT | 8 | (9) | (14) | ||
Depreciation, depletion and amortization | (42) | (39) | (69) | (58) | |
Fertilizer | |||||
Operating Segment Information | |||||
Net sales to external customers | 81 | 81 | 133 | 139 | |
Foreign exchange gains (losses) | 4 | 3 | (1) | ||
Segment EBIT | 3 | 2 | (1) | 4 | |
Depreciation, depletion and amortization | (3) | (3) | (6) | (6) | |
Operating | Agribusiness | |||||
Operating Segment Information | |||||
Noncontrolling interests | (5) | (2) | (5) | ||
Total assets | 12,941 | 14,655 | 12,941 | 14,655 | |
Operating | Edible Oil Products | |||||
Operating Segment Information | |||||
Noncontrolling interests | (1) | (1) | (3) | (3) | |
Total assets | 2,406 | 2,013 | 2,406 | 2,013 | |
Operating | Milling Products | |||||
Operating Segment Information | |||||
Total assets | 1,530 | 1,503 | 1,530 | 1,503 | |
Operating | Sugar and Bioenergy | |||||
Operating Segment Information | |||||
Total assets | 3,032 | 3,410 | 3,032 | 3,410 | |
Operating | Fertilizer | |||||
Operating Segment Information | |||||
Noncontrolling interests | (1) | (1) | |||
Total assets | 344 | 330 | 344 | 330 | |
Discontinued Operations and Unallocated | |||||
Operating Segment Information | |||||
Inter-segment revenues | (1,059) | (1,019) | (2,115) | (1,903) | |
Noncontrolling interests | 1 | 4 | 2 | 7 | |
Discontinued operations | 6 | (4) | (13) | ||
Total assets | 180 | 184 | 180 | 184 | |
Inter-segment Eliminations | Agribusiness | |||||
Operating Segment Information | |||||
Inter-segment revenues | 1,027 | 991 | 2,040 | 1,849 | |
Inter-segment Eliminations | Edible Oil Products | |||||
Operating Segment Information | |||||
Inter-segment revenues | $ 32 | 25 | 70 | 51 | |
Inter-segment Eliminations | Milling Products | |||||
Operating Segment Information | |||||
Inter-segment revenues | 1 | $ 5 | 1 | ||
Inter-segment Eliminations | Sugar and Bioenergy | |||||
Operating Segment Information | |||||
Inter-segment revenues | $ 2 | $ 2 |
SEGMENT INFORMATION - NET INCOM
SEGMENT INFORMATION - NET INCOME TO SEGMENT EBIT (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of total Segment EBIT: | ||||
Total Segment EBIT from continuing operations | $ 73 | $ 205 | $ 206 | $ 527 |
Interest income | 8 | 14 | 20 | 24 |
Interest expense | (62) | (59) | (127) | (116) |
Income tax (expense) benefit | 55 | (39) | 27 | (73) |
Income (loss) from discontinued operations, net of tax | 6 | (4) | (13) | |
Noncontrolling interests' share of interest and tax | 1 | 4 | 2 | 7 |
Net income (loss) attributable to Bunge | $ 81 | $ 121 | $ 128 | $ 356 |