WHITE PLAINS, N.Y.,
July 29 /PRNewswire-FirstCall/ --
Bunge Limited (NYSE: BG)
- Closed on sale of fertilizer nutrients assets
- Portion of sale proceeds used to reduce debt and initiate
share repurchase program
- Agribusiness results impacted by lower volumes and margins
in oilseeds
- Expect significantly improved performance in the second half
of the year
|
(In millions, except per share
data and percentages)
|
|
|
Quarter Ended
|
Six Months Ended
|
|
|
6/30/10
|
6/30/09
|
% Change
|
6/30/10
|
6/30/09
|
% Change
|
|
|
Volumes (metric
tons)
|
36,551
|
38,505
|
(5)%
|
68,474
|
70,756
|
(3)%
|
|
|
Net sales
|
$10,974
|
$10,994
|
-%
|
21,319
|
$20,192
|
6%
|
|
|
Total segment EBIT
(1,2)
|
$2,389
|
$419
|
470%
|
$2,507
|
$216
|
1,061%
|
|
|
Agribusiness
|
$28
|
$435
|
(94)%
|
$150
|
$463
|
(68)%
|
|
|
Sugar &
Bioenergy
|
$4
|
$13
|
(69)%
|
$9
|
$3
|
200%
|
|
|
Fertilizer
|
$2,369
|
$(53)
|
n/m
|
$2,329
|
$(315)
|
n/m
|
|
|
Edible Oil
Products
|
$(13)
|
$10
|
n/m
|
$5
|
$32
|
(84)%
|
|
|
Milling Products
|
$1
|
$14
|
(93)%
|
$14
|
$33
|
(58)%
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bunge
(2)
|
$1,778
|
$313
|
468%
|
$1,841
|
118
|
1,460%
|
|
|
Earnings per common
share-
diluted (2,3)
|
$11.15
|
$2.28
|
389%
|
$11.67
|
$0.64
|
1,723%
|
|
|
(1) Total segment earnings
before interest and tax ("EBIT") is a
non-GAAP financial measure. The information required by
Regulation G under the
Securities Exchange Act of 1934,
including a reconciliation to net income attributable to Bunge, is
included in the tables attached to this press
release.
(2) Bunge's results
included certain gains and charges that may be of interest to
investors. See the Additional Financial Information
section
included in the tables attached
to this press release for more information.
(3) See Note 3 to the
consolidated statements of income attached to this press release
for information on the calculation of diluted earnings
per
share.
|
|
|
|
|
|
|
|
|
Alberto Weisser, Bunge's Chairman
and Chief Executive Officer stated, "The second quarter was
disappointing, due primarily to low volumes and margins in
agribusiness.
"We expect significant improvement in the second half of the
year. In agribusiness, demand should be stronger and Northern
Hemisphere harvests will contribute to new market conditions.
Sugar and ethanol production will peak as the harvest
progresses and sugar content yields improve, and fertilizer will
enter its seasonally strong period in the Southern Hemisphere.
"In May, we completed the sale of our fertilizer nutrients
assets. This sale, combined with the acquisition of Moema,
has changed Bunge's Brazilian portfolio significantly. We
believe it has improved our growth potential and created the
opportunity for more synergies among our operations. We have
embarked on a restructuring and consolidation effort to reflect
this new portfolio and to reduce costs in the face of Brazil's continued currency strength and
rising labor costs. We anticipate annual cost savings from
these actions of approximately $120
million beginning in 2011.
"To date, we have retired approximately $1.5 billion of debt with a portion of the
proceeds from our nutrients assets sale, and have returned over
$200 million to Bunge's shareholders
through the share buyback program announced in June. Our
balance sheet is strong, providing us with ample financial
flexibility to pursue compelling investment opportunities in our
core and adjacent businesses."
Agribusiness
Results in oilseed processing, grain origination and
distribution in all regions were lower than those of an
exceptionally strong period last year. Slow farmer selling,
combined with stronger than expected soybean export demand from
China and excess capacity in some
regions, created a tight supply situation that pressured margins in
South America and the U.S.
Our commercial and risk management strategies, especially in
oilseeds, had anticipated more balanced supply and demand in the
quarter, considering the record soybean crops in South America. Slow farmer selling also
impacted European softseed processing results and our grain
origination and distribution businesses in most regions.
Second quarter results included $4
million of restructuring charges relating to the
consolidation of our Brazilian operations.
Sugar & Bioenergy
Sugar and bioenergy results were in line with expectations.
Higher results in sugarcane milling due to the addition of
the Moema mills and positive trading results were offset by start
up costs associated with the expansion and construction of mills.
The second quarter is typically the weakest period for this
segment, as it marks the beginning of the sugarcane harvest in the
Central-South of Brazil when the
sugar content of the cane is at its lowest level.
Consequently, our mills produced less sugar and ethanol per
unit of cane milled than they will in the second half of the year
when the yield increases. Higher SG&A reflects the
addition of Moema and $3 million of
restructuring charges related to the consolidation of our Brazilian
operations.
Fertilizer
Higher fertilizer results were due to the gain on the sale of
our Brazilian fertilizer nutrients assets, which was completed
during the quarter. Performance in our Brazilian retail
business, however, was weaker than expected due to the combination
of aggressive competitor pricing, which pressured margins, and
disruptions resulting from the separation of our nutrients business
from retail, which resulted in higher operating costs and lost
sales opportunities. As a result of the sale of nutrients, we
are restructuring this business so it is more focused, with a
leaner cost structure, a different commercial approach and stronger
connections to agribusiness. Noncontrolling interest
increased in the quarter due to higher results at Fosfertil.
The second quarter included a charge of $37 million recorded in cost of goods sold
related to an inventory valuation adjustment as a consequence of
the nutrients assets sale. The second quarter of 2009
included the reversal of a $32
million provision recorded in SG&A related to
transactional taxes in Brazil as a
result of new legislation.
Edible Oil Products
Results in the quarter were adversely impacted by $2 million of restructuring charges mostly
related to the consolidation of our Brazilian operations,
$21 million of provisions in SG&A
related to an expiring tax credit and customer promotional
allowances in our Brazilian business and a $2 million decrease as a result of the sale of
our joint venture interest in Saipol in the fourth quarter of last
year. On a comparable basis, performance this quarter
improved due to higher results in our margarine businesses in
Brazil and Europe.
Milling Products
Higher corn milling results were more than offset by lower wheat
milling margins due to increased local competition as a result of a
large Brazilian wheat crop. Second quarter results included
$3 million of restructuring charges
recorded in SG&A related to the consolidation of our
Brazil operations. The
second quarter also included $5
million of provisions recorded in SG&A primarily related
to customer promotional allowances in wheat milling.
Financial Costs
Interest expense increased in the quarter primarily due to
higher average borrowing costs, including costs on debt assumed in
the Moema acquisition. Substantially all of the Moema debt
has been repaid or refinanced at lower interest rates. Based
on estimated average borrowing levels and rates, we expect lower
interest expense in the third and fourth quarters.
Income Taxes
The effective tax rate for the six months ended June 30, 2010 was 23% compared to 25% for the
same period last year, and reflects the impact of the sale of our
fertilizer nutrients assets in the period.
Cash Flow
Cash flows from investing activities included $3.9 billion of gross proceeds from the sale of
our fertilizer nutrients assets. Cash used by operations in
the six months ended June 30, 2010
was $159 million.
The negative cash flow from operations in 2010 is primarily
due to payments of withholding taxes and transaction closing costs
totaling $417 million related to the
sale of the fertilizer nutrients assets. Cash used by
operations in the same period last year was $1,754 million.
Jacqualyn Fouse, Chief Financial
Officer, stated, "Looking forward, U.S. crops are progressing well
with a potential for record production of corn and soybeans, which
would provide our grain operations ample supplies to originate,
store and transport. The global crushing environment is more
challenging than expected; however, farmer selling has normalized,
and better meat industry economics and oil demand from the edible
oil and biodiesel channels should provide support for improved
conditions later in the year. Fertilizer results should
improve as the pace of farmer purchases picks up closer to
planting. Sugar & bioenergy results should benefit from
the increase in sugar content yields which is expected to occur in
the second half of the year. In food & ingredients, our
expectations for edible oils remain the same, but we expect
competitive conditions to continue to pressure our wheat milling
margins.
"Given this outlook, and our much weaker than expected second
quarter performance, we are reducing our 2010 full-year earnings
guidance to $3.25 to $3.50 per share.
This guidance excludes $1,848
million of notable items recorded in the first half of the
year. It also assumes an effective tax rate of 20% to 24% and is
based on 157 million shares outstanding on a fully diluted basis,
which reflects shares repurchased to date through our recently
announced share buyback program and assumed dilution relating to
our convertible preference shares."
Conference Call and Webcast Details
Bunge Limited's management will host a conference call at
10:00 a.m. EDT on July 29, 2010 to discuss the company's
results.
Additionally, a slide presentation to accompany the discussion
of results will be posted in the "Investor Information" section of
www.bunge.com.
To listen to the call, please dial (888) 857-6929. If you
are located outside the United
States or Canada, dial
(719) 457-2705. Please dial in five to 10 minutes before the
scheduled start time. When prompted, enter confirmation code
6904103. The call will also be webcast live at
www.bunge.com.
To access the webcast, select the "Investor Information" link on
the Bunge homepage, then select "Webcasts and News Alerts."
Select "Q2 2010 Bunge Limited Conference Call" and follow the
prompts. Please go to the Web site at least 15 minutes prior
to the call to register and download any necessary audio
software.
For those who cannot listen to the live broadcast, a replay will
be available later in the day on July 29,
2010, continuing through August 28,
2010. To listen to it, please dial (888) 203-1112 or,
if located outside the United
States or Canada, dial
(719) 457-0820. When prompted, enter confirmation code
6904103. A replay will also be available on the company's Web
site. To access it, select the "Investor Information" link on
the Bunge homepage, then select "Audio Archives" and follow the
prompts.
About Bunge Limited
Bunge Limited (www.bunge.com, NYSE: BG) is a leading global
agribusiness and food company with approximately 32,000 employees
in more than 30 countries. Bunge buys, sells, stores and
transports oilseeds and grains to serve customers worldwide;
processes oilseeds to make protein meal for animal feed and edible
oil products for commercial customers and consumers; produces sugar
and ethanol from sugarcane; mills wheat and corn to make
ingredients used by food companies; and sells fertilizer in North
and South America. Founded
in 1818, the company is headquartered in White Plains, New York.
Cautionary Statement Concerning Forward-Looking
Statements
This press release contains both historical and forward-looking
statements. All statements, other than statements of
historical fact are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements are not
based on historical facts, but rather reflect our current
expectations and projections about our future results, performance,
prospects and opportunities. We have tried to identify these
forward-looking statements by using words including "may," "will,"
"should," "could," "expect," "anticipate," "believe," "plan,"
"intend," "estimate," "continue" and similar expressions.
These forward-looking statements are subject to a number of
risks, uncertainties and other factors that could cause our actual
results, performance, prospects or opportunities to differ
materially from those expressed in, or implied by, these
forward-looking statements. The following important factors,
among others, could affect our business and financial performance:
industry conditions, including fluctuations in supply, demand and
prices for agricultural commodities and other raw materials and
products used in our business; fluctuations in energy and freight
costs and competitive developments in our industries; the effects
of weather conditions and the outbreak of crop and animal disease
on our business; global and regional agricultural, economic,
financial and commodities market, political, social and health
conditions; the outcome of pending regulatory and legal
proceedings; our ability to complete, integrate and benefit from
acquisitions, dispositions, joint ventures and strategic alliances;
our ability to achieve the efficiencies, savings and other benefits
anticipated from our cost reduction, margin improvement and other
business optimization initiatives; changes in government policies,
laws and regulations affecting our business, including agricultural
and trade policies, tax regulations and biofuels legislation; and
other factors affecting our business generally. The
forward-looking statements included in this release are made only
as of the date of this release, and except as otherwise required by
federal securities law, we do not have any obligation to publicly
update or revise any forward-looking statements to reflect
subsequent events or circumstances.
Additional Financial Information
The following table provides a summary of certain gains and
charges that may be of interest to investors. The table
includes a description of these items and their effect on total
segment EBIT, income from operations before income tax, net income
attributable to Bunge and earnings per share for the quarter and
six months ended June 30, 2010 and
2009.
|
(In millions, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
EBIT
|
Income From
Operations Before
Income Tax
|
Net Income
Attributable
to Bunge
|
Earnings Per
Share
Diluted
|
|
|
Quarter Ended June
30:
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|
|
Gain on sale of fertilizer
nutrients assets (1)
|
$2,440
|
$ –
|
$2,440
|
$ –
|
$1,901
|
$ –
|
$11.92
|
$ –
|
|
|
Inventory valuation adjustment
(2)
|
(37)
|
–
|
(37)
|
–
|
(24)
|
–
|
(0.15)
|
–
|
|
|
Restructuring charges
(3)
|
(12)
|
–
|
(12)
|
–
|
(8)
|
–
|
(0.05)
|
–
|
|
|
Transactional tax credit
(5)
|
–
|
32
|
–
|
32
|
–
|
21
|
–
|
0.15
|
|
|
Total
|
$2,391
|
$32
|
$2,391
|
$32
|
$1,869
|
$21
|
$11.72
|
$0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
EBIT
|
Income From
Operations Before
Income Tax
|
Net Income
Attributable
to Bunge
|
Earnings Per
Share
Diluted
|
|
|
Six Months Ended June
30:
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|
|
Gain on sale of fertilizer
nutrients assets (1)
|
$2,440
|
$ –
|
$2,440
|
$ –
|
$1,901
|
$ –
|
$12.05
|
$ –
|
|
|
Inventory valuation adjustment
(2)
|
(37)
|
–
|
(37)
|
–
|
(24)
|
–
|
(0.15)
|
–
|
|
|
Impairment and restructuring
charges (3)
|
(34)
|
–
|
(34)
|
–
|
(22)
|
–
|
(0.14)
|
–
|
|
|
Acquisition related expenses
(4)
|
(11)
|
–
|
(11)
|
–
|
(7)
|
–
|
(0.04)
|
–
|
|
|
Transactional tax credit
(5)
|
–
|
32
|
–
|
32
|
–
|
21
|
–
|
0.17
|
|
|
Total
|
$2,358
|
$32
|
$2,358
|
$32
|
$1,848
|
$21
|
$11.72
|
$0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In January 2010, Bunge and
two of its wholly owned subsidiaries entered into a definitive
agreement (the Agreement) with Vale S.A.,
a Brazil-based global mining
company (Vale), and an affiliate of Vale, pursuant to which Vale
would acquire Bunge's fertilizer nutrients
assets in Brazil, including its
interest in Fertilizantes Fosfatados S.A. (Fosfertil). The
transaction closed on May 27, 2010 for cash
proceeds of $3.9 billion and
Bunge recognized a gain of $2.4 billion ($1.9 billion net of tax)
in its fertilizer segment. Included in the
calculation of the gain is $152
million of transactions costs incurred in connection with the
divestiture. Total income tax associated with
the transaction was $539
million, of which $275 million was paid during the quarter ended
June 30, 2010, $5 million is expected to be
paid in the third quarter of
2010 and approximately $259 million is expected to be offset by
deferred tax assets and other tax credits
and therefore is not expected to
result in cash tax payments. Approximately $56 million related to
the post-closing working capital
adjustment is expected to be
received in the third quarter of 2010. Approximately $142
million of transaction costs and $275 million of
withholding taxes are included
as a component of cash used for operating activities in Bunge's
condensed consolidated statements of
cash flows. Gross proceeds
of $3.9 billion are included as a component of cash provided by
investing activities in Bunge's condensed
consolidated statements of cash
flows.
(2) In the second quarter of
2010, Bunge recorded a pretax charge of $37 million in cost of
goods sold in its condensed consolidated
statement of income, related to
an inventory valuation adjustment due to changes in its fertilizer
segment.
(3) In the second quarter of
2010, Bunge recorded pretax restructuring charges of $12 million
related to our Brazilian operations, of
which $4 million was in the
agribusiness segment, $3 million in the sugar and bioenergy
segment, $2 million in the edible oil products
segment and $3 million in the
milling products segment, in selling, general and administrative
expenses in its condensed consolidated
statement of income.
Pre-tax restructuring and related charges recorded in cost of
goods sold in the quarter ended March 31, 2010
consisted primarily of
termination benefit costs in the U.S. and Brazil, of which $5
million were in the agribusiness segment, $1 million
in the sugar and bioenergy
segment, $4 million in the fertilizer segment, and $1 million in
the milling segment.
Pre-tax impairment charges
recorded in cost of goods sold in the quarter ended March 31, 2010
primarily consisted of $9 million in
the agribusiness segment, which
related to the closure of an older, less efficient oilseed
processing facility in the U.S. and $2 million
in the milling products segment,
which related to the closure of a co-located corn oil extraction
line.
(4) In the quarter ended March
31, 2010, Bunge acquired a 100% ownership interest in five sugar
mills in Brazil. In connection with
these transactions, Bunge
recorded in selling, general and administrative expenses pretax
acquisition-related expenses of $11 million.
(5) In the second quarter of
2009, Bunge reversed a $32 million provision recorded in selling,
general and administrative expenses,
related to transactional taxes
in its fertilizer segment, which resulted from new Brazilian
legislation.
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
INCOME
(In millions, except per share
data and percentages)
(Unaudited)
|
|
|
Quarter Ended
June 30,
|
Percent
|
|
Six Months Ended
June 30,
|
Percent
|
|
|
2010
|
|
2009
|
Change
|
|
2010
|
|
2009
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 10,974
|
|
$ 10,994
|
–%
|
|
$ 21,319
|
|
$ 20,192
|
6%
|
|
|
Cost of goods sold
|
(10,549)
|
|
(10,582)
|
–%
|
|
(20,349)
|
|
(19,645)
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
425
|
|
412
|
3%
|
|
970
|
|
547
|
77%
|
|
|
Selling, general and
administrative expenses
|
(415)
|
|
(309)
|
34%
|
|
(762)
|
|
(603)
|
26%
|
|
|
Gain on sale of fertilizer
nutrients assets (Note 1)
|
2,440
|
|
–
|
100%
|
|
2,440
|
|
–
|
100%
|
|
|
Interest income
|
23
|
|
40
|
(43)%
|
|
42
|
|
76
|
(45)%
|
|
|
Interest expense (Note
2)
|
(101)
|
|
(66)
|
53%
|
|
(179)
|
|
(133)
|
35%
|
|
|
(49)
|
|
320
|
|
|
(99)
|
|
301
|
|
|
|
Other income
(expense)−net
|
(3)
|
|
(1)
|
|
|
(3)
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations before
income tax
|
2,320
|
|
396
|
486%
|
|
2,409
|
|
180
|
1,238%
|
|
|
Income tax expense
|
(542)
|
|
(79)
|
586%
|
|
(551)
|
|
(45)
|
1,124%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations after
income tax
|
1,778
|
|
317
|
461%
|
|
1,858
|
|
135
|
1,276%
|
|
|
Equity in earnings of
affiliates
|
9
|
|
5
|
80%
|
|
9
|
|
11
|
(18)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
1,787
|
|
322
|
455%
|
|
1,867
|
|
146
|
1179%
|
|
|
Net income attributable to
noncontrolling interest
|
(9)
|
|
(9)
|
–%
|
|
(26)
|
|
(28)
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Bunge
|
1,778
|
|
313
|
468%
|
|
1,841
|
|
118
|
1,460%
|
|
|
Convertible preference share
dividends
|
(20)
|
|
(20)
|
|
|
(39)
|
|
(39)
|
|
|
|
Net income available to Bunge
common
shareholders
|
$
1,758
|
|
$
293
|
500%
|
|
$ 1,802
|
|
$
79
|
2,181%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share –
diluted (Note 3):
|
|
|
|
|
|
|
|
|
|
|
|
Earnings to Bunge common
shareholders
|
$ 11.15
|
|
$ 2.28
|
389%
|
|
$ 11.67
|
|
$ 0.64
|
1,723%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted–average common shares
outstanding-diluted (Note 3)
|
159,448,713
|
|
137,576,049
|
|
|
157,710,543
|
|
122,919,727
|
|
|
|
Note 1: See the Additional
Financial Information section.
Note 2: Includes
interest expense on readily marketable inventories of $20 million
and $21 million for the quarter ended June 30, 2010 and
2009,
respectively, and $33 million
and $28 million for the six months ended June 30, 2010 and 2009,
respectively.
Note 3: Weighted-average common shares
outstanding-diluted for the quarter and six months ended June 30,
2010 excludes the dilutive effect of
approximately 3 million
outstanding stock options and contingently issuable restricted
stock units because the effect of the conversion would not
have
been dilutive.
Weighted-average common shares outstanding-diluted for the
quarter and six months ended June 30, 2010 includes the dilutive
effect
of approximately 14.6 million
weighted average common shares that would be
issuable upon conversion of Bunge's convertible preference
shares.
Weighted-average common shares
outstanding-diluted for the quarter ended June 30, 2009 includes
the dilutive effect of 14.6 weighted average common
shares that would be issuable
upon conversion of Bunge's convertible preference shares because
the effect of the conversion would have been dilutive.
There were no weighted average
common shares of outstanding stock-based payment awards that would
be issuable upon conversion of the convertible
preference shares, included in
the earnings per common share-diluted calculation for the six
months ended June 30, 2009 because they would not have
been dilutive.
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED SEGMENT
INFORMATION
(In millions, except volumes and
percentages)
(Unaudited)
Set forth below is a summary of
certain items in our consolidated statements of income and volumes
by reportable
segment.
|
|
|
Quarter Ended
June 30,
|
Percent
|
|
Six Months Ended
June 30,
|
Percent
|
|
|
2010
|
2009
|
Change
|
|
2010
|
2009
|
Change
|
|
|
Volumes (in thousands of
metric
tons):
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
29,197
|
32,024
|
(9)%
|
|
54,335
|
58,221
|
(7)%
|
|
|
Sugar & Bioenergy
|
2,788
|
1,573
|
77%
|
|
4,551
|
3,009
|
51%
|
|
|
Fertilizer
|
1,965
|
2,426
|
(19)%
|
|
4,264
|
4,487
|
(5)%
|
|
|
Edible oil products
|
1,493
|
1,382
|
8%
|
|
2,932
|
2,776
|
6%
|
|
|
Milling products
|
1,108
|
1,100
|
1%
|
|
2,392
|
2,263
|
6%
|
|
|
Total
|
36,551
|
38,505
|
(5)%
|
|
68,474
|
70,756
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ 7,406
|
$ 7,902
|
(6)%
|
|
$ 14,051
|
$ 14,144
|
(1)%
|
|
|
Sugar & Bioenergy
|
963
|
402
|
140%
|
|
1,988
|
793
|
151%
|
|
|
Fertilizer
|
641
|
841
|
(24)%
|
|
1,340
|
1,540
|
(13)%
|
|
|
Edible oil products
|
1,578
|
1,472
|
7%
|
|
3,151
|
2,962
|
6%
|
|
|
Milling products
|
386
|
377
|
2%
|
|
789
|
753
|
5%
|
|
|
Total
|
$ 10,974
|
$ 10,994
|
–%
|
|
$ 21,319
|
$ 20,192
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ 270
|
$ 488
|
(45)%
|
|
$ 599
|
$ 700
|
(14)%
|
|
|
Sugar & Bioenergy
|
46
|
17
|
171%
|
|
68
|
18
|
278%
|
|
|
Fertilizer
|
(11)
|
(212)
|
95%
|
|
50
|
(405)
|
112%
|
|
|
Edible oil products
|
86
|
83
|
4%
|
|
185
|
162
|
14%
|
|
|
Milling products
|
34
|
36
|
(6)%
|
|
68
|
72
|
(6)%
|
|
|
Total
|
$ 425
|
$ 412
|
3%
|
|
$ 970
|
$ 547
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
expenses:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ (200)
|
$ (190)
|
5%
|
|
$ (368)
|
$ (340)
|
8%
|
|
|
Sugar & Bioenergy
|
(36)
|
(7)
|
414%
|
|
(65)
|
(14)
|
364%
|
|
|
Fertilizer
|
(49)
|
(18)
|
172%
|
|
(101)
|
(75)
|
35%
|
|
|
Edible oil products
|
(97)
|
(71)
|
37%
|
|
(173)
|
(133)
|
30%
|
|
|
Milling products
|
(33)
|
(23)
|
43%
|
|
(55)
|
(41)
|
34%
|
|
|
Total
|
$ (415)
|
$ (309)
|
34%
|
|
$ (762)
|
$ (603)
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of fertilizer
nutrients
assets
|
$ 2,440
|
$
–
|
100%
|
|
$ 2,440
|
$
–
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain
(loss):
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ (36)
|
$ 138
|
|
|
$
(77)
|
$ 117
|
|
|
|
Sugar & Bioenergy
|
(2)
|
–
|
|
|
7
|
1
|
|
|
|
Fertilizer
|
(9)
|
183
|
|
|
(25)
|
186
|
|
|
|
Edible oil products
|
(2)
|
(1)
|
|
|
(4)
|
(3)
|
|
|
|
Milling products
|
–
|
–
|
|
|
–
|
–
|
|
|
|
Total
|
$ (49)
|
$ 320
|
|
|
$
(99)
|
$ 301
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$
3
|
$
3
|
–%
|
|
$
7
|
$
2
|
250%
|
|
|
Sugar & Bioenergy
|
(3)
|
(2)
|
(50)%
|
|
(2)
|
(8)
|
75%
|
|
|
Fertilizer
|
8
|
1
|
700%
|
|
3
|
1
|
200%
|
|
|
Edible oil products
|
–
|
2
|
(100)%
|
|
–
|
14
|
(100)%
|
|
|
Milling products
|
1
|
1
|
–%
|
|
1
|
2
|
(50)%
|
|
|
Total
|
$
9
|
$
5
|
80%
|
|
$
9
|
$
11
|
(18)%
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ (13)
|
$
(6)
|
|
|
$
(15)
|
$
(14)
|
|
|
|
Sugar & Bioenergy
|
4
|
3
|
|
|
6
|
4
|
|
|
|
Fertilizer
|
(8)
|
(5)
|
|
|
(35)
|
(18)
|
|
|
|
Edible oil products
|
(1)
|
–
|
|
|
(4)
|
(4)
|
|
|
|
Milling products
|
–
|
–
|
|
|
–
|
–
|
|
|
|
Total
|
$ (18)
|
$
(8)
|
|
|
$
(48)
|
$
(32)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$
4
|
$
2
|
|
|
$
4
|
$
(2)
|
|
|
|
Sugar & Bioenergy
|
(5)
|
2
|
|
|
(5)
|
2
|
|
|
|
Fertilizer
|
(2)
|
(2)
|
|
|
(3)
|
(4)
|
|
|
|
Edible oil products
|
1
|
(3)
|
|
|
1
|
(4)
|
|
|
|
Milling products
|
(1)
|
–
|
|
|
–
|
–
|
|
|
|
Total
|
$
(3)
|
$
(1)
|
|
|
$
(3)
|
$
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings before
interest
and tax:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$
28
|
$ 435
|
(94)%
|
|
$ 150
|
$ 463
|
(68)%
|
|
|
Sugar & Bioenergy
|
4
|
13
|
(69)%
|
|
9
|
3
|
200%
|
|
|
Fertilizer
|
2,369
|
(53)
|
n/m
|
|
2,329
|
(315)
|
n/m
|
|
|
Edible oil products
|
(13)
|
10
|
n/m
|
|
5
|
32
|
(84)%
|
|
|
Milling products
|
1
|
14
|
(93)%
|
|
14
|
33
|
(58)%
|
|
|
Total (Note 1)
|
$ 2,389
|
$ 419
|
470%
|
|
$ 2,507
|
$ 216
|
1,061%
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of total
segment
earnings before interest and
tax:
|
|
|
|
|
|
|
|
|
|
Total
segment earnings before interest and tax
|
$ 2,389
|
$ 419
|
|
|
$ 2,507
|
$ 216
|
|
|
|
Interest income
|
23
|
40
|
|
|
42
|
76
|
|
|
|
Interest expense
|
(101)
|
(66)
|
|
|
(179)
|
(133)
|
|
|
|
Income tax expense
|
(542)
|
(79)
|
|
|
(551)
|
(45)
|
|
|
|
Noncontrolling interest share of
interest and tax
|
9
|
(1)
|
|
|
22
|
4
|
|
|
|
Net income attributable to
Bunge
|
$ 1,778
|
$ 313
|
|
|
$ 1,841
|
$ 118
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion
and
amortization:
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
$ (45)
|
$ (46)
|
(2)%
|
|
$ (91)
|
$ (86)
|
6%
|
|
|
Sugar & Bioenergy
|
(32)
|
(3)
|
967%
|
|
(46)
|
(5)
|
820%
|
|
|
Fertilizer
|
(9)
|
(34)
|
(74)%
|
|
(24)
|
(66)
|
(64)%
|
|
|
Edible oil products
|
(20)
|
(17)
|
18%
|
|
(40)
|
(34)
|
18%
|
|
|
Milling products
|
(7)
|
(5)
|
40%
|
|
(14)
|
(9)
|
56%
|
|
|
Total
|
$ (113)
|
$ (105)
|
8%
|
|
$ (215)
|
$ (200)
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: Total segment earnings
before interest and tax ("EBIT") is a non-GAAP measure and is not
intended to replace net
income attributable to Bunge,
the most directly comparable GAAP measure. The information
required by Regulation G under
the Securities Exchange Act of
1934, including the reconciliation to net income attributable to
Bunge, is included under the
caption "Reconciliation of
Non-GAAP Measures."
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
|
|
|
|
June 30,
2010
|
|
December 31,
2009
|
|
June 30,
2009
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 2,771
|
|
$
553
|
|
$
489
|
|
|
Trade accounts
receivable
|
|
2,489
|
|
2,363
|
|
2,098
|
|
|
Inventories
(1)
|
|
4,571
|
|
4,862
|
|
6,690
|
|
|
Deferred income
taxes
|
|
145
|
|
506
|
|
321
|
|
|
Other current
assets (2)
|
|
2,980
|
|
3,499
|
|
3,728
|
|
|
Total current assets
|
|
12,956
|
|
11,783
|
|
13,326
|
|
|
Property, plant and equipment,
net
|
|
4,651
|
|
5,347
|
|
4,584
|
|
|
Goodwill
|
|
960
|
|
427
|
|
376
|
|
|
Other intangible assets,
net
|
|
191
|
|
170
|
|
114
|
|
|
Investments in
affiliates
|
|
584
|
|
622
|
|
781
|
|
|
Deferred income taxes
|
|
966
|
|
979
|
|
978
|
|
|
Other non-current
assets
|
|
1,786
|
|
1,958
|
|
1,649
|
|
|
Total assets
|
|
$22,094
|
|
$21,286
|
|
$21,808
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$ 172
|
|
$ 166
|
|
$ 1,035
|
|
|
Current portion of
long-term debt
|
|
271
|
|
31
|
|
294
|
|
|
Trade accounts
payable
|
|
3,278
|
|
3,275
|
|
3,361
|
|
|
Deferred income
taxes
|
|
68
|
|
100
|
|
104
|
|
|
Other current
liabilities
|
|
2,345
|
|
2,635
|
|
3,096
|
|
|
Total current
liabilities
|
|
6,134
|
|
6,207
|
|
7,890
|
|
|
Long-term debt
|
|
3,401
|
|
3,618
|
|
3,921
|
|
|
Deferred income taxes
|
|
115
|
|
183
|
|
145
|
|
|
Other non-current
liabilities
|
|
757
|
|
913
|
|
942
|
|
|
|
|
|
|
|
|
|
|
Total Bunge shareholders'
equity
|
|
11,408
|
|
9,494
|
|
8,111
|
|
|
Noncontrolling
interest
|
|
279
|
|
871
|
|
799
|
|
|
Total equity
|
|
11,687
|
|
10,365
|
|
8,910
|
|
|
Total liabilities and
shareholders' equity
|
|
$22,094
|
|
$21,286
|
|
$21,808
|
|
|
|
|
|
|
|
|
|
|
Note 1: Includes
readily marketable inventories at fair value of $3,205 million,
$3,380 million and $4,344 million at June 30,
2010, December 31, 2009 and June
30, 2009 respectively.
Note 2: Includes
marketable securities of $74 million, $15 million and $20 million
at June 30, 2010, December 31, 2009
and June 30, 2009,
respectively.
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
|
|
|
Six Ended
June 30,
|
|
|
|
2010
|
|
2009
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
Net
income
|
|
$ 1,867
|
|
$ 146
|
|
|
Adjustments
to reconcile net income to cash used for operating
activities:
|
|
|
|
|
|
|
Foreign
exchange loss (gain) on debt
|
|
225
|
|
(359)
|
|
|
Gain on sale
of fertilizer nutrients assets
|
|
(2,440)
|
|
–
|
|
|
Impairment
of assets
|
|
12
|
|
–
|
|
|
Bad debt
expense
|
|
16
|
|
23
|
|
|
Depreciation, depletion and
amortization
|
|
215
|
|
200
|
|
|
Stock-based
compensation expense
|
|
34
|
|
16
|
|
|
Recoverable
taxes provision
|
|
1
|
|
37
|
|
|
Deferred
income taxes
|
|
202
|
|
(104)
|
|
|
Equity in
earnings of affiliates
|
|
(9)
|
|
(11)
|
|
|
Changes in
operating assets and liabilities, excluding the effects of
acquisitions:
|
|
|
|
|
|
|
Trade
accounts receivable
|
|
(645)
|
|
361
|
|
|
Inventories
|
|
(80)
|
|
(528)
|
|
|
Prepaid
commodity purchase contracts
|
|
(126)
|
|
(211)
|
|
|
Secured
advances to suppliers
|
|
67
|
|
257
|
|
|
Trade
accounts payable
|
|
522
|
|
(1,111)
|
|
|
Advances on
sales
|
|
20
|
|
21
|
|
|
Unrealized
net gain/loss on derivative contracts
|
|
15
|
|
213
|
|
|
Margin
deposits
|
|
153
|
|
(279)
|
|
|
Accrued
liabilities
|
|
179
|
|
(69)
|
|
|
Other—net
|
|
(387)
|
|
(356)
|
|
|
Cash used
for operating activities
|
|
(159)
|
|
(1,754)
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
Payments
made for capital expenditures
|
|
(547)
|
|
(346)
|
|
|
Acquisitions
of businesses (net of cash acquired)
|
|
(133)
|
|
(19)
|
|
|
Proceeds
from sale of fertilizer nutrients assets
|
|
3,886
|
|
–
|
|
|
Cash
disposed in sale of fertilizer nutrients assets
|
|
(106)
|
|
–
|
|
|
Proceeds
from investments
|
|
28
|
|
60
|
|
|
Proceeds
from disposal of property, plant and equipment
|
|
3
|
|
5
|
|
|
Related
party loans
|
|
(7)
|
|
(19)
|
|
|
Investments
in affiliates
|
|
(2)
|
|
–
|
|
|
Change in
restricted cash
|
|
–
|
|
(28)
|
|
|
Cash
provided by (used for) investing activities
|
|
3,122
|
|
(347)
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
Net
repayments in short-term debt with maturities of 90 days or
less
|
|
219
|
|
364
|
|
|
Proceeds
from short-term debt with maturities greater than 90
days
|
|
267
|
|
784
|
|
|
Repayments
of short-term debt with maturities greater than 90 days
|
|
(852)
|
|
(625)
|
|
|
Proceeds
from long-term debt
|
|
132
|
|
2,857
|
|
|
Repayment of
long-term debt
|
|
(306)
|
|
(1,754)
|
|
|
Proceeds
from sale of common shares
|
|
2
|
|
1
|
|
|
Repurchase
of common shares
|
|
(86)
|
|
–
|
|
|
Dividends
paid to preference shareholders
|
|
(39)
|
|
(39)
|
|
|
Dividends
paid to common shareholders
|
|
(60)
|
|
(46)
|
|
|
Dividends
paid to noncontrolling interest
|
|
–
|
|
(8)
|
|
|
Other
|
|
22
|
|
(3)
|
|
|
Cash (used
for) provided by financing activities
|
|
(701)
|
|
1,531
|
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
(44)
|
|
55
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
2,218
|
|
(515)
|
|
|
Cash and
cash equivalents, beginning of period
|
|
553
|
|
1,004
|
|
|
Cash and
cash equivalents, end of period
|
|
$ 2,771
|
|
$ 489
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
This earnings release contains total segment earnings before
interest and tax ("EBIT"), which is "non-GAAP financial measures"
as this term is defined in Regulation G of the Securities Exchange
Act of 1934. In accordance with Regulation G, Bunge has
reconciled this non-GAAP financial measure to the most directly
comparable U.S. GAAP measures.
Total segment earnings before interest and tax
Total segment EBIT is consolidated net income attributable to
Bunge excluding interest income and expense and income tax
attributable to each segment.
Total segment EBIT is a non-GAAP financial measure and is not
intended to replace net income attributable to Bunge, the most
directly comparable GAAP financial measure. Total segment
EBIT is an operating performance measure used by Bunge's management
to evaluate its segments' operating activities. Bunge
believes EBIT is a useful measure of its segments' operating
profitability, since the measure reflects equity in earnings of
affiliates and minority interest and excludes income tax.
Income tax is excluded as management believes income tax is
not material to the operating performance of its segments.
Interest income and expense have become less meaningful to
the segments' operating activities as Bunge is financing more of
its working capital with equity rather than debt. In
addition, EBIT is a financial measure that is widely used by
analysts and investors in Bunge's industries. Total segment
EBIT is not a measure of consolidated operating results under U.S.
GAAP and should not be considered as an alternative to net income
or any other measure of consolidated operating results under U.S.
GAAP.
Below is a reconciliation of total segment EBIT to net income
attributable to Bunge:
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
(In millions)
|
2010
|
2009
|
|
2010
|
2009
|
|
|
Total segment EBIT
|
$ 2,389
|
$ 419
|
|
$ 2,507
|
$ 216
|
|
|
Interest income
|
23
|
40
|
|
42
|
76
|
|
|
Interest expense
|
(101)
|
(66)
|
|
(179)
|
(133)
|
|
|
Income tax expense
|
(542)
|
(79)
|
|
(551)
|
(45)
|
|
|
Noncontrolling interest share of
interest and tax
|
9
|
(1)
|
|
22
|
4
|
|
|
Net income attributable to
Bunge
|
$ 1,778
|
$ 313
|
|
$ 1,841
|
$ 118
|
|
|
|
|
|
|
|
|
|
SOURCE Bunge Limited