Revenues

Revenue Recognition

The Company principally generates revenue from merchandising and transporting agricultural commodities and manufactured products used as ingredients in food, feed, energy, and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. For transportation service contracts, the Company recognizes revenue over time as the barge, ocean-going vessel, truck, rail, or container freight moves towards its destination in accordance with the transfer of control guidance of Topic 606. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20).

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of products sold. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Taxes Collected from Customers and Remitted to Governmental Authorities

The Company does not include taxes assessed by governmental authorities that are (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers, in the measurement of transactions prices or as a component of revenues and cost of products sold.

Transaction Price Allocated to Remaining Performance Obligations

The Company generally recognizes revenue at a point in time with the exception of revenue from transportation services which is recognized over time. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The Company applies the practical expedient in paragraph 10-50-14 of Topic 606 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Disaggregation of Revenues

The following table presents revenue disaggregated by timing of recognition and major product lines for the three months ended September 30, 2018.



	Topic 606 Revenue						Topic 815⁽¹⁾		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Origination
Merchandising and Handling	$	396	$	57	$	453	$	5,333	$	5,786
Transportation	—		64		64		—		64
Total Origination	396		121		517		5,333		5,850
Oilseeds
Crushing and Origination	330		—		330		4,109		4,439
Refining, Packaging, Biodiesel, and Other	593		—		593		1,378		1,971
Total Oilseeds	923		—		923		5,487		6,410
Carbohydrate Solutions
Starches and Sweeteners	1,261		—		1,261		445		1,706
Bioproducts	828		—		828		—		828
Total Carbohydrate Solutions	2,089		—		2,089		445		2,534
Nutrition
Wild Flavors and Specialty Ingredients	641		—		641		—		641
Animal Nutrition	281		—		281		—		281
Total Nutrition	922		—		922		—		922

Other	84		—		84		—		84
Total Revenues	$	4,414	$	121	$	4,535	$	11,265	$	15,800

⁽¹⁾Topic 815 revenue relates to the physical delivery or the settlement of the Company’s sales contracts that are accounted for as derivatives and are outside the scope of Topic 606.

The following table presents revenue disaggregated by timing of recognition and major product lines for the nine months ended September 30, 2018.



	Topic 606 Revenue						Topic 815⁽¹⁾		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Origination
Merchandising and Handling	$	1,542	$	179	$	1,721	$	16,768	$	18,489
Transportation	—		182		182		—		182
Total Origination	1,542		361		1,903		16,768		18,671
Oilseeds
Crushing and Origination	647		—		647		12,225		12,872
Refining, Packaging, Biodiesel, and Other	1,787		—		1,787		4,101		5,888
Total Oilseeds	2,434		—		2,434		16,326		18,760
Carbohydrate Solutions
Starches and Sweeteners	3,699		—		3,699		1,349		5,048
Bioproducts	2,734		—		2,734		—		2,734
Total Carbohydrate Solutions	6,433		—		6,433		1,349		7,782
Nutrition
Wild Flavors and Specialty Ingredients	1,970		—		1,970		—		1,970
Animal Nutrition	920		—		920		—		920
Total Nutrition	2,890		—		2,890		—		2,890

Other	291		—		291		—		291
Total Revenues	$	13,590	$	361	$	13,951	$	34,443	$	48,394

⁽¹⁾Topic 815 revenue relates to the physical delivery or the settlement of the Company’s sales contracts that are accounted for as derivatives and are outside the scope of Topic 606.

Origination

The Origination segment generates revenue from the sale of commodities and from service fees for the transportation of goods. Revenue is measured based on the consideration specified in the contract and excludes any sales incentives and amounts collected on behalf of third parties. Revenue is recognized when a performance obligation is satisfied by transferring control over a product or providing service to a customer. For transportation service contracts in Transportation, the Company recognizes revenue over time as the barge, ocean-going vessel, truck, rail, or container freight moves towards its destination in accordance with the transfer of control guidance of Topic 606. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20.

Oilseeds

The Oilseeds segment generates revenue primarily from the sale of products manufactured in its global processing facilities. The segment also generates revenue from the sale of raw commodities in its South American grain origination business and from the sale of peanuts, tree nuts, and peanut-derived ingredients. Revenue is recognized when a performance obligation is satisfied by transferring control over a product. The amount of revenue recognized follows the contractually specified price which may include freight or other contractually specified cost components. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20.

Carbohydrate Solutions

The Carbohydrate Solutions segment generates revenue from the sale of products manufactured at the Company’s global corn and milling facilities around the world. Revenue is recognized when control over products is transferred to the customer. Products are shipped to the customers from the Company’s various facilities and from its network of storage terminals. The amount of revenue recognized is based on the consideration specified in the contract which could include freight and other costs depending on the specific shipping terms of each contract. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20.

Nutrition

The Nutrition segment sells specialty products including natural flavor ingredients, flavor systems, natural colors, animal nutrition products, other specialty food and feed ingredients. Revenue is recognized when control over products is transferred to the customer. The amount of revenue recognized follows the contracted price or the mutually agreed price of the product. Freight and shipping are recognized as a component of revenue at the same time control transfers to the customer.

Other

Other includes the Company’s futures commission business whose primary sources of revenue are commissions and brokerage income generated from executing orders and clearing futures contracts and options on futures contracts on behalf of its customers. Commissions and brokerage revenue are recognized on the date the transaction is executed. Other also includes the Company’s captive insurance business which generates third party revenue through its proportionate share of premiums from third-party reinsurance pools. Reinsurance premiums are recognized on a straight-line basis over the period underlying the policy.

Contract Liabilities

Contract liabilities relate to advance payments from customers for goods and services that the Company has yet to provide. Contract liabilities of $106 million and $185 million as of September 30, 2018 and January 1, 2018, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheet. Contract liabilities recognized as revenues for the three and nine months ended September 30, 2018 were $36 million and $286 million, respectively.

Impacts on Financial Statements

The following tables summarize the impacts of Topic 606 adoption on the various lines of the Company’s consolidated financial statements.

Consolidated Balance Sheets (excerpt)



	January 1, 2018		September 30, 2018
	After Adoption		As		Under		Effect of
	of Topic 606		Reported		Topic 605		Change
	(In millions)
Assets
Trade receivables	$	2,343	$	1,934	$	1,675	$	259
Inventories	8,770		8,483		8,760		(277		)
Other current assets	3,175		3,707		3,713		(6		)
Total Current Assets	19,918		19,465		19,489		(24		)
Total Assets	$	39,956	$	39,664	$	39,688	$	(24	)
Liabilities, Temporary Equity, and Shareholders’ Equity
Accrued expenses and other payables	$	2,826	$	2,925	$	2,947	$	(22	)
Total Current Liabilities	12,563		11,648		11,670		(22		)
Reinvested earnings	17,552		18,478		18,480		(2		)
Total Shareholders’ Equity	18,322		19,000		19,002		(2		)
Total Liabilities, Temporary Equity, and Shareholders’ Equity	$	39,956	$	39,664	$	39,688	$	(24	)

Consolidated Statements of Earnings (excerpt)



	Three Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2018
	As		Under		Effect of		As		Under		Effect of
	Reported		Topic 605		Change		Reported		Topic 605		Change
	(In millions)
Revenues	$	15,800	$	15,785	$	15	$	48,394	$	48,518	$	(124	)
Cost of products sold	14,742		14,729		13		45,266		45,388		(122		)
Gross profit	1,058		1,056		2		3,128		3,130		(2		)
Earnings before income taxes	632		630		2		1,748		1,750		(2		)
Income taxes	96		95		1		250		250		—
Net earnings including noncontrolling interests	536		535		1		1,498		1,500		(2		)
Net earnings attributable to controlling interests	536		535		1		1,495		1,497		(2		)