Derivatives and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 29, 2018

Derivatives and Fair Value of Financial Instruments

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

	Balance
	September 29,
(Millions of dollars)	2018		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	812	$	812	$	—	$	—
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries		399		397		2		—
Foreign equity securities		305		305		—		—
Collateralized loan obligations		31		—		31		—
High yield securities		21		21		—		—
Term deposits		10		10		—		—
Money market funds held in trading accounts		7		7		—		—
Other trading securities		5		5		—		—
Trading securities – other current assets:
Domestic equity securities		37		37		—		—
Money market fund held in trading accounts		5		5		—		—
Foreign equity securities		3		3		—		—
Fixed income securities		3		3		—		—
Other		2		1		1		—
Derivatives:
Commodities (1)		2		2		—		—
Foreign currencies		1		—		1		—
Total Assets	$	1,643	$	1,608	$	35	$	—
Liabilities:
Contingent consideration	$	14	$	—	$	—	$	14
Derivatives:
Commodities (1)		10		10		—		—
Total Liabilities	$	24	$	10	$	—	$	14

⁽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 September 29, 2018, the commodity derivatives had a margin account balance of $25 million resulting in a net other current asset in the condensed consolidated balance sheet of $17 million.

The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and also the level within the fair value hierarchy used to measure each category of assets and liabilities.

	Balance
	December 31,
(Millions of dollars)	2017		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	752	$	752	$	—	$	—
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries		439		438		1		—
Foreign equity securities		319		319		—		—
Collateralized loan obligations		29		—		29		—
High yield securities		21		21		—		—
Money market funds held in trading accounts		10		10		—		—
Other trading securities		6		6		—		—
Trading securities – other current assets:
Domestic equity securities		35		35		—		—
Money market fund held in trading accounts		5		5		—		—
Foreign equity securities		4		4		—		—
Fixed income securities		2		2		—		—
Derivatives:
Commodities (1)		4		4		—		—
Foreign currencies		3		—		3		—
Total Assets	$	1,629	$	1,596	$	33	$	—
Liabilities:
Derivatives:
Commodities (1)	$	6	$	6	$	—	$	—
Foreign currencies		6		—		6		—
Total Liabilities	$	12	$	6	$	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, 2017, the commodity derivatives had a margin account balance of $20 million resulting in a net other current asset in the condensed consolidated balance sheet of $18 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				Nine Months Ended
		September 29,		September 30,		September 29,		September 30,
(Millions of dollars)		2018		2017		2018		2017
Commodities	Cost of sales	$	—	$	(6)	$	(16)	$	(5)
Foreign currencies	Cost of sales		2		2		(2)		(3)
Foreign currencies	Foreign currency gains (losses), net		—		(1)		—		(2)
Equity	Other investment income (loss), net		—		—		(10)		—

Schedule of fair value of each type of derivative and its location in the condensed consolidated balance sheets

			Asset Derivatives							Liability Derivatives
			September 29,			December 31,				September 29,			December 31,
(Millions of dollars)			2018			2017				2018			2017
Commodities(1)	Other current assets	$		2	$		4	Other current liabilities	$		10	$		6
Foreign currencies	Other current assets			1			3	Other current liabilities			—			6
Equity (1)	Short-term investments			—			—	Short-term investments			—			—

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 September 29, 2018 and December 31, 2017, the commodity derivatives had a margin account balance of $25 million and $20 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $17 million and $18 million, respectively. Seaboard’s equity derivatives are also presented on a net basis, including netting the derivatives within short-term investments.