Derivatives and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 26, 2020

Derivatives and Fair Value of Financial Instruments

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

	Balance
	September 26,
(Millions of dollars)	2020		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	613	$	613	$	—	$	—
Domestic debt securities		391		122		269		—
Foreign equity securities		107		107		—		—
Foreign debt securities		57		—		57		—
High yield securities		55		7		48		—
Collateralized loan obligations		16		—		16		—
Money market funds held in trading accounts		2		2		—		—
Other trading securities		4		4		—		—
Trading securities – other current assets:
Domestic equity securities		12		12		—		—
Money market fund held in trading accounts		6		6		—		—
Foreign equity securities		3		3		—		—
Fixed income securities		2		2		—		—
Long-term investment		31		—		—		31
Derivatives:
Commodities		16		16		—		—
Foreign currencies		4		—		4		—
Total Assets	$	1,319	$	894	$	394	$	31
Liabilities:
Contingent consideration	$	15	$	—	$	—	$	15
Derivatives:
Commodities		15		15		—		—
Interest rate swaps		1		—		1		—
Foreign currencies		4		—		4		—
Total Liabilities	$	35	$	15	$	5	$	15

	Balance
	December 31,
(Millions of dollars)	2019		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	706	$	706	$	—	$	—
Domestic debt securities		409		117		292		—
Foreign equity securities		189		189		—		—
High yield securities		56		10		46		—
Foreign debt securities		43		—		43		—
Collateralized loan obligations		15		—		15		—
Money market funds held in trading accounts		12		12		—		—
Other trading securities		4		4		—		—
Trading securities – other current assets:
Domestic equity securities		40		40		—		—
Money market fund held in trading accounts		6		6		—		—
Foreign equity securities		3		3		—		—
Fixed income securities		2		2		—		—
Derivatives:
Commodities		6		6		—		—
Total Assets	$	1,491	$	1,095	$	396	$	—
Liabilities:
Contingent consideration	$	13	$	—	$	—	$	13
Derivatives:
Commodities		4		4		—		—
Foreign currencies		3		—		3		—
Total Liabilities	$	20	$	4	$	3	$	13

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 26,		September 28,		September 26,		September 28,
(Millions of dollars)		2020		2019		2020		2019
Commodities	Cost of sales	$	10	$	(17)	$	27	$	(48)
Foreign currencies	Cost of sales		2		1		15		5
Foreign currencies	Foreign currency gains (losses), net		(3)		—		(2)		—
Equity	Other investment income (loss), net		(16)		—		7		(3)
Interest rate swaps	Interest expense		—		—		(1)		—

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

		Asset Derivatives					Liability Derivatives
		September 26,		December 31,			September 26,		December 31,
(Millions of dollars)		2020		2019			2020		2019
Commodities	Other current assets	$	16	$	6	Other current liabilities	$	15	$	4
Foreign currencies	Other current assets		4		—	Other current liabilities		4		3
Interest rate swaps	Other current assets		—		—	Other current liabilities		1		—
Equity	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 26, 2020 and December 31, 2019, the commodity derivatives had a margin account balance of $18 million and $13 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $19 million and $15 million, respectively. Seaboard’s equity future derivatives are also presented on a net basis, including netting the derivatives within short-term investments.