Derivatives and Fair Value of Financial Instruments (Tables)

6 Months Ended

Jul. 02, 2016

Derivatives and Fair Value of Financial Instruments

Schedule of assets and liabilities measured at fair value on a recurring basis

	Balance
	July 2,
(Millions of dollars)	2016		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities – short-term investments:
Money market funds	$	2	$	2	$	—	$	—
Trading securities – short term investments:
Domestic equity securities		484		484		—		—
Domestic debt securities		398		398		—		—
Foreign equity securities		125		125		—		—
High yield debt securities		107		—		107		—
Collateralized loan obligations		13		—		13		—
Money market funds held in trading accounts		13		13		—		—
Other trading securities		1		1		—		—
Trading securities – other current assets:
Domestic equity securities		30		30		—		—
Foreign equity securities		4		4		—		—
Fixed income mutual funds		3		3		—		—
Other		2		2		—		—
Derivatives:
Commodities (1)		36		36		—		—
Foreign currencies		2		—		2		—
Total Assets	$	1,220	$	1,098	$	122	$	—
Liabilities:
Derivatives:
Commodities (1)	$	14	$	14	$	—	$	—
Interest rate swaps		7		—		7		—
Foreign currencies		6		—		6		—
Total Liabilities	$	27	$	14	$	13	$	—

⁽¹⁾ Seaboard’s commodity derivative assets and liabilities are presented in the Condensed Consolidated Balance Sheets on a net basis, including netting the derivatives with the related margin accounts. As of July 2, 2016, the commodity derivatives had a margin account balance of $(2) million resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $20 million.

The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and also the level within the fair value hierarchy used to measure each category of assets.

	Balance
	December 31,
(Millions of dollars)	2015		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities – short-term investments:
Money market funds	$	81	$	81	$	—	$	—
Trading securities – short term investments:
Domestic equity securities		466		466		—		—
Domestic debt securities		450		450		—		—
Foreign equity securities		120		120		—		—
High yield debt securities		104		—		104		—
Money market funds held in trading accounts		22		22		—		—
Collateralized loan obligation		10		—		10		—
Other trading securities		1		—		1		—
Trading securities – other current assets:
Domestic equity securities		31		31		—		—
Foreign equity securities		5		5		—		—
Fixed income mutual funds		4		4		—		—
Other		3		2		1		—
Derivatives:
Commodities (1)		4		4		—		—
Foreign currencies		8		—		8		—
Total Assets	$	1,309	$	1,185	$	124	$	—
Liabilities:
Derivatives:
Commodities (1)	$	18	$	18	$	—	$	—
Interest rate swaps		6		—		6		—
Total Liabilities	$	24	$	18	$	6	$	—

⁽¹⁾ Seaboard’s commodity derivative assets and liabilities are presented in the Condensed Consolidated Balance Sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2015, the commodity derivatives had a margin account balance of $29 million resulting in a net other current asset in the Condensed Consolidated Balance Sheet of $15 million.

Schedule of gain or (loss) recognized for each type of derivative and its location in the Condensed Consolidated Statements of Comprehensive Income

		Three Months Ended				Six Months Ended
		July 2,		July 4,		July 2,		July 4,
(Millions of dollars)		2016		2015		2016		2015
Commodities	Cost of sales	$	31	$	4	$	31	$	(2)
Foreign currencies	Cost of sales		(1)		2		(13)		1
Foreign currencies	Foreign currency gains, net		—		—		—		2
Interest rate swaps	Miscellaneous, net		(1)		4		(4)		(1)

Schedule of fair value of each type of derivative and its location in the Condensed Consolidated Balance Sheets

		Asset Derivatives					Liability Derivatives
		July 2,		December 31,			July 2,		December 31,
(Millions of dollars)		2016		2015			2016		2015
Commodities(1)	Other current assets	$	36	$	4	Other current liabilities	$	14	$	18
Foreign currencies	Other current assets		2		8	Other current liabilities		6		—
Interest rate swaps	Other current assets		—		—	Other current liabilities		7		6

Seaboard’s commodity derivative assets and liabilities are presented in the Condensed Consolidated Balance Sheets on a net basis, including netting the derivatives with the related margin accounts. As of July 2, 2016 and December 31, 2015, the commodity derivatives had a margin account balance of $(2) million and $29 million, respectively, resulting in a net other current asset in the Condensed Consolidated Balance Sheets of $20 million and $15 million, respectively.