Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The company's cash, cash equivalents and marketable securities as of March 31, 2017 and December 31, 2016 are comprised of the following:



	March 31, 2017						December 31, 2016
	Cash and Cash Equivalents		Marketable Securities		Total Estimated Fair Value		Cash and Cash Equivalents		Marketable Securities		Total Estimated Fair Value
Cash	$	1,515	$	—	$	1,515	$	1,892	$	—	$	1,892

Level 2:
Certificate of deposit / time deposits¹	1,832		2,570		4,402		2,713		1,362		4,075

Total cash, cash equivalents and marketable securities	$	3,347	$	2,570			$	4,605	$	1,362


^1.	Represents held-to-maturity investments reported at amortized cost.

The estimated fair value of the company's cash equivalents, which approximates carrying value as of March 31, 2017 and December 31, 2016, was determined using Level 2 inputs within the fair value hierarchy. Level 2 measurements were based on current interest rates for similar investments with comparable credit risk and time to maturity.

The estimated fair value of the held-to-maturity securities, which approximates carrying value as of March 31, 2017 and December 31, 2016, was determined using Level 2 inputs within the fair value hierarchy. Level 2 measurements were based on current interest rates for similar investments with comparable credit risk and time to maturity. The carrying value approximates fair value due to the short-term nature of the investments.

Available-for-sale securities are reported at estimated fair value with unrealized gains and losses reported as a component of accumulated other comprehensive loss. There were no sales of available-for-sale securities for the three months ended March 31, 2017. The proceeds from the sale of available-for-sale securities for the three months ended March 31, 2016 were $260.

Debt

The estimated fair value of the company's total debt, including interest rate financial instruments, was determined using level 2 inputs within the fair value hierarchy, as described in the company's 2016 Annual Report in Note 1, “Summary of Significant Accounting Policies.” Based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's debt was approximately $10,800 and $8,890 as of March 31, 2017 and December 31, 2016, respectively.

Derivative Instruments

Objectives and Strategies for Holding Derivative Instruments

In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its exposure to foreign currency, interest rate and commodity price risks. The company has established a variety of derivative programs to be utilized for financial risk management. These programs reflect varying levels of exposure coverage and time horizons based on an assessment of risk.

Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee, consistent with the company's financial risk management policies and guidelines. Derivative instruments used are forwards, options, futures and swaps. The company has not designated any nonderivatives as hedging instruments.

The company's financial risk management procedures also address counterparty credit approval, limits and routine exposure monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major commodity exchanges. The company is exposed to credit loss in the event of nonperformance by these counterparties. The company utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The company's derivative assets and liabilities are reported on a gross basis in the Condensed Consolidated Balance Sheets. The company anticipates performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to management.

The notional amounts of the company's derivative instruments were as follows:



	March 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Commodity contracts	$	282	$	422
Derivatives not designated as hedging instruments:
Foreign currency contracts	7,342		9,896
Commodity contracts	460		7

Foreign Currency Risk

The company's objective in managing exposure to foreign currency fluctuations is to reduce earnings and cash flow volatility associated with foreign currency rate changes. Accordingly, the company enters into various contracts that change in value as foreign exchange rates change to protect the value of its existing foreign currency-denominated assets, liabilities, commitments and cash flows.

The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities of its operations. The primary business objective of this hedging program is to maintain

an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes,

net of related tax effects, are minimized. The company also uses foreign currency exchange contracts to offset a portion of the company's exposure to certain foreign currency-denominated revenues so that gains and losses on these contracts offset changes

in the USD value of the related foreign currency-denominated revenues. The objective of the hedge program is to reduce earnings

and cash flow volatility related to changes in foreign currency exchange rates.

Commodity Price Risk

Commodity price risk management programs serve to reduce exposure to price fluctuations on purchases of inventory such as corn, soybeans and soybean meal. The company enters into over-the-counter and exchange-traded derivative commodity instruments to hedge the commodity price risk associated with agricultural commodity exposures.

Derivatives Designated as Cash Flow Hedges

Foreign Currency Contracts

The company uses foreign currency exchange instruments such as forwards and options to offset a portion of the company's exposure to certain foreign currency-denominated revenues so that gains and losses on these contracts offset changes in the USD value of the related foreign currency-denominated revenues. In addition, the company occasionally uses forward exchange contracts to offset a portion of the company's exposure to certain foreign currency-denominated transactions such as capital expenditures.

Commodity Contracts

The company enters into over-the-counter and exchange-traded derivative commodity instruments, including options, futures and swaps, to hedge the commodity price risk associated with agriculture commodity exposures.

While each risk management program has a different time maturity period, most programs currently do not extend beyond the next two-year period. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is not probable of occurring. The following table summarizes the after-tax effect of cash flow hedges on accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016:



	Three Months Ended
	March 31,
	2017			2016
Beginning balance	$	7		$	(24	)
Additions and revaluations of derivatives designated as cash flow hedges	2			10
Clearance of hedge results to earnings	(5		)	7
Ending balance	$	4		$	(7	)

At March 31, 2017, an after-tax net gain of $8 is expected to be reclassified from accumulated other comprehensive loss into earnings over the next twelve months.

Derivatives not Designated in Hedging Relationships

Foreign Currency Contracts

The company routinely uses forward exchange contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal earnings impact, after taxes. The company also uses foreign currency exchange contracts to offset a portion of the company's exposure to certain foreign currency-denominated revenues so that gains and losses on the contracts offset changes in the USD value of the related foreign currency-denominated revenues.

Commodity Contracts

The company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as corn, soybeans and soybean meal.

Fair Values of Derivative Instruments

The table below presents the fair values of the company's derivative assets and liabilities within the fair value hierarchy, as described in the company's 2016 Annual Report in Note 1, “Summary of Significant Accounting Policies.”



		Fair Value Using Level 2 Inputs
	Balance Sheet Location	March 31, 2017		December 31, 2016
Asset derivatives:
Derivatives not designated as hedging instruments:
Foreign currency contracts¹	Accounts and notes receivable, net	$	60	$	182
Commodity contracts	Accounts and notes receivable, net	6		—
Total asset derivatives²		$	66	$	182
Cash collateral¹	Other accrued liabilities	$	—	$	52

Liability derivatives:
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other accrued liabilities	$	69	$	121
Total liability derivatives²		$	69	$	121


^1.	Cash collateral held as of March 31, 2017 and December 31, 2016 is related to foreign currency derivatives not designated as hedging instruments.


^2.	The company's derivative assets and liabilities subject to enforceable master netting arrangements totaled $48 at March 31, 2017 and $114 at December 31, 2016.

Effect of Derivative Instruments



	Amount of Gain (Loss) Recognized in OCI¹ (Effective Portion)				Amount of Gain (Loss) Recognized in Income²
Three Months Ended March 31,	2017		2016		2017			2016			Income Statement Classification
Derivatives designated as hedging instruments:
Cash flow hedges:
Commodity contracts	$	4	$	16	$	8		$	(11	)	Cost of goods sold
	4		16		8			(11		)
Derivatives not designated as hedging instruments:
Foreign currency contracts	—		—		(85		)	(154		)	Other income, net³
Foreign currency contracts	—		—		—			(4		)	Net sales
Commodity contracts	—		—		4			—			Cost of goods sold
	—		—		(81		)	(158		)
Total derivatives	$	4	$	16	$	(73	)	$	(169	)


^1.	OCI is defined as other comprehensive income (loss).


^2.	For cash flow hedges, this represents the effective portion of the gain (loss) reclassified from accumulated OCI into income during the period. For the three months ended March 31, 2017 and 2016, there was no material ineffectiveness with regard to the company's cash flow hedges.


^3.	Gain (loss) recognized in other income, net, was partially offset by the related gain (loss) on the foreign currency-denominated monetary assets and liabilities of the company's operations, see Note 5 for additional information.