Filed by Bunge Limited
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Corn Products International, Inc.
Commission File Number for Registration Statement
on Form S-4: 333-152781
|
Investor Contact:
|
|
Mark
Haden
|
|
|
Bunge
Limited
|
|
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914-684-3398
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|
|
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Mark.Haden@Bunge.com
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|
|
|
|
|
Media Contact:
|
|
Stewart
Lindsay
|
|
|
|
Bunge
Limited
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|
|
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914-684-3369
Stewart.Lindsay@Bunge.com
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www.bunge.com
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Bunge
Reports Third Quarter Results
White
Plains, NY October 23, 2008
Bunge Limited (NYSE:BG)
·
Cash
provided by operating activities was $2.2 billion in the quarter
·
The
Company is maintaining its full year 2008 earnings guidance
Financial
Highlights
(In
millions, except per share data and percentages)
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
9/30/08
|
|
9/30/07
|
|
% Change
|
|
9/30/08
|
|
9/30/07
|
|
% Change
|
|
Volumes (metric tons)
|
|
35.2
|
|
37.7
|
|
(7)
|
%
|
102.5
|
|
102.9
|
|
|
%
|
Net sales
|
|
$
|
14,797
|
|
$
|
9,729
|
|
52
|
%
|
$
|
41,631
|
|
$
|
25,370
|
|
64
|
%
|
Total segment EBIT
(
1
)
,
(
2
)
|
|
$
|
247
|
|
$
|
532
|
|
(54)
|
%
|
$
|
1,767
|
|
$
|
834
|
|
112
|
%
|
Agribusiness
|
|
$
|
170
|
|
$
|
381
|
|
(55)
|
%
|
$
|
1,035
|
|
$
|
526
|
|
97
|
%
|
Fertilizer
|
|
$
|
84
|
|
$
|
112
|
|
(25)
|
%
|
$
|
610
|
|
$
|
219
|
|
179
|
%
|
Edible Oil Products
|
|
$
|
(29
|
)
|
$
|
17
|
|
(271)
|
%
|
$
|
36
|
|
$
|
41
|
|
(12)
|
%
|
Milling products
|
|
$
|
22
|
|
$
|
22
|
|
|
%
|
$
|
86
|
|
$
|
48
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(2)
|
|
$
|
234
|
|
$
|
351
|
|
(33)
|
%
|
$
|
1,274
|
|
$
|
533
|
|
139
|
%
|
Earnings per common share- diluted
(2),(3)
|
|
$
|
1.70
|
|
$
|
2.70
|
|
(37)
|
%
|
$
|
9.26
|
|
$
|
4.12
|
|
125
|
%
|
(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, is included in the tables
attached to this press release.
(2)
Bunges 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 2 to the consolidated statements of
income attached to this press release for information on the calculation of
diluted earnings per share.
Overview
Alberto Weisser, Bunges Chairman and Chief Executive Officer stated,
The third quarter was a volatile time in the global agribusiness and food
markets, but the Bunge team managed through the period with skill. We head toward the end of 2008 with a
comfortable liquidity position and continued expectations for record full-year
results.
Current conditions in the global agribusiness market are clearly
different than the extraordinary ones experienced in the first half of the
year. Comparatively, recent results have
been pressured by softer demand for feed inputs and slower farmer selling in certain
regions, as well as by reduced sales of fertilizer in Brazil.
We see the current market environment as relatively short-lived. The basic fundamentals of our industry remain
intact and should generate compelling growth for companies with global asset
networks and broad product offerings.
World population and living standards in developing economies continue
to rise, and non-food uses for agricultural commodities are expected to
increase. We expect that these factors
will contribute to a rebound in overall demand.
At the same time, ending stocks of agricultural commodities remain below
historic norms, which will encourage the markets to maintain commodity prices
at levels that provide incentives to farmers to plant larger areas and buy the
nutrients necessary to generate higher crop yields.
We continue working to capitalize on our industrys growth trends by
building upon Bunges strong global network of assets. For example, we recently purchased a 50%
stake in the port of Phu My Port in Vietnam.
Since 2004, Bunge has had exclusive rights to ship agricultural
commodities through the port. As an
owner, we will be able to expand the ports capacity and accelerate the growth
of our business in this attractive market.
One of our global strategies is to invest in complementary value
chainssuch as sugar and corn wet millingin which we can leverage our existing
risk management, logistics and industrial expertise to succeed. In September we purchased a majority
stake in a second sugarcane mill in Brazil, which we plan to expand. We also entered into joint ventures with
Itochu to develop sugar and sugarcane-based ethanol opportunities in the
country. Together, Bunge and Itochu will
complete the expansion of the Santa Juliana mill and develop a new, greenfield
mill. The three projects are expected to
reach full annual capacity of over 12 million metric tons of sugarcane in the
aggregate, within four years.
Since the announcement of the merger, Corn Products and Bunge have
been engaged in preparations for the integration of our two companies. Bunge
and Corn Products currently anticipate that the special shareholders meetings
of both companies will be held in mid to late December, rather than in November as
previously anticipated. We are disappointed
in the performance of the stock prices of the two companies, but Bunges belief
in the strategic rationale for the merger is unchanged.
2
Third Quarter Results
Agribusiness
Oilseed
processing results were slightly lower in the quarter, as higher margins were
more than offset by lower volumes.
Softseed processing results in Europe and Canada were strong in the
quarter, whereas demand for soybean products weakened. Slow farmer selling in the U.S. and Brazil
due in part to volatility of commodity and currency prices, as well as harvest
delays in the U.S., contributed to lower results in grain origination. Lower distribution results reflected margins
that returned to more normal levels from the higher margins experienced in the
third quarter of last year. Risk
management strategies continued to work well during a volatile period.
Foreign exchange losses of $192
million, primarily in our Brazilian subsidiary, from U.S. dollar-denominated
financing of working capital were offset by the positive impact of foreign
exchange on valuations of commodity inventories included in gross profit. In the third quarter, the Brazilian
real
devalued 17% against the U.S. dollar.
Third
quarter EBIT included a $60 million credit resulting from a favorable ruling
related to certain transactional taxes in Brazil that were accrued and paid in
past years.
Fertilizer
Volumes were down in the quarter primarily due to soybean and corn
farmers accelerating purchases in the first half of the year and a tight credit
environment for farmers. Higher margins
were more than offset by $215 million of foreign exchange losses resulting from
the devaluation of the Brazilian
real
on U.S.
dollar-denominated financing of working capital. Unlike in agribusiness where inventories are
marked to market, the offsetting gain on fertilizer inventories is expected to
occur in future quarters when the inventories are sold. Minority interest increased in the quarter
due to higher results at Fosfertil.
Edible Oil Products
Volume increased in the quarter.
Results declined primarily due to high raw material costs in Europe as a
result of crude oil inventories purchased prior to the recent price declines.
Milling Products
Higher margins in wheat milling were offset by lower volumes in corn
milling.
3
Financial Costs
Interest expense decreased in the quarter due to lower average debt
levels, mostly resulting from the drop in prices of agricultural commodity
inventories which led to lower average working capital needs.
Income Taxes
The effective tax rate for the nine months ended September 30,
2008 was 24% compared to 26% for the same period in 2007. The decrease in the effective tax rate was
primarily due to a higher percentage of earnings in lower tax jurisdictions.
Cash Flow
Cash provided
by operating activities in the third quarter of 2008 was $2,210 million
compared to cash provided by operating activities of $134 million in the same
period last year. For the nine months
ended September 30, 2008, cash provided by operating activities was $1,727
million compared to cash used for operating activities in the same period last
year of $642 million. The $2.4 billion
year-over-year improvement reflects the drop in commodity prices during the
quarter, as well as higher earnings and actions taken to increase the
efficiency of working capital management.
Outlook
Jacqualyn Fouse, Chief Financial Officer, stated, We expect a solid
finish to the year. Agribusiness should
benefit from large harvests in the northern hemisphere. Fertilizer margins should remain strong,
though volumes will likely be moderated due to the level of forward purchasing
which occurred in the first half of the year and current tight farmer credit
conditions. Foods results should improve
due to lower raw material costs. 2008
will be a record year for earnings and cash flow, and reinforces the importance
of viewing our business on a full-year basis.
In consideration of this outlook, we are maintaining our 2008
full-year earnings guidance of $11.60 to $11.90 per share. This guidance assumes an effective tax rate
range of 24% to 28%. This fully diluted
per share guidance is based on an estimated weighted average of 138 million shares
outstanding, which includes assumed dilution relating to our convertible
preference shares.
Conference Call and
Webcast Details
Bunge
Limiteds management will host a conference call at 10:00 a.m. EDT on
Thursday, October 23, 2008, to discuss the companys results.
Additionally,
a slide presentation to accompany the discussion of the third quarter financial
results can be found in the Investor Information section of our Web site,
www.Bunge.com, under Investor Presentations.
4
To listen to
the conference call, please dial (877) 719-9791. If you are located outside of the United
States or Canada, dial (719) 325-4762.
Please dial in five to 10 minutes before the scheduled start time. When
prompted, enter confirmation code 3968460.
The conference call will also be available live on the companys Web
site at www.Bunge.com.
To access the
webcast, click the News and Information link on the Bunge homepage then
select Webcasts and Upcoming Events.
Click on the link for the Q3 2008 Bunge Limited Conference Call, and
follow the prompts to join the call. Please go to the Web site at least 15
minutes prior to the call to register and to download and install any necessary
audio software.
For those who cannot listen to
the live broadcast, a replay of the call will be available following the call
and continuing through November 22, 2008.
To listen to the replay, please dial (888) 203-1112, or, if located outside
of the United States or Canada, dial (719) 457-0820. When prompted, enter confirmation code
3968460. A rebroadcast of the conference
call will also be available on the companys Web site. To locate the rebroadcast on the Web site,
click on the News and Information link on the Bunge homepage then select
Audio Archives from the left-hand menu.
Select the link for the Q3 2008 Bunge Limited Conference Call. Follow the prompts to access the replay.
About
Bunge Limited
Bunge Limited (www.Bunge.com, NYSE: BG) is a leading global agribusiness
and food company founded in 1818 and headquartered in White Plains, New
York. Bunges over 25,000 employees in
over 30 countries enhance lives by improving the global agribusiness and food
production chain. The company supplies
fertilizer to farmers in South America, originates, transports and processes
oilseeds, grains and other agricultural commodities worldwide, produces food
products for commercial customers and consumers and supplies raw materials and
services to the biofuels industry.
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, expect, anticipate, believe, 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, as well as those of the markets we serve or intend to serve, 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: our
ability to complete, integrate and benefit from acquisitions, divestitures,
joint ventures and strategic alliances; estimated demand for the commodities
and other products that we sell and use in our business; industry conditions,
including the cyclicality of the agribusiness industry and unpredictability of
the weather; agricultural, economic and political conditions in the primary
markets where we
5
operate; and other economic, business, competitive and/or regulatory
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
Information
This press release is not a substitute for the preliminary joint proxy
statement/prospectus or any other documents that Bunge Limited and Corn
Products International, Inc. have filed or will file with the SEC in
connection with the proposed merger. Investors and securityholders are urged to
carefully read the preliminary joint proxy statement/prospectus and any other
relevant documents filed or to be filed by Bunge or Corn Products, including
the definitive joint proxy statement/prospectus when it becomes available,
because they will contain important information. The preliminary joint proxy
statement/prospectus is, and other documents filed or to be filed by Bunge and
Corn Products with the SEC are or will be, available free of charge at the
SECs web site (www.sec.gov), by accessing Bunges website at www.bunge.com
under the tab Investor Information and from Bunge by directing a request to
Bunge Limited, 50 Main Street, White Plains, NY 10606, Attention: Investor
Relations, and from Corn Products by directing a request to Corn Products
International, Inc., 5 Westbrook Corporate Center Westchester, IL 60154,
Attention: Investor Relations.
Bunge, Corn Products and their respective directors, executive officers
and other employees may be deemed to be participants in a solicitation of
proxies from the securityholders of Bunge or Corn Products in connection with
the proposed merger. Information about Bunges directors and executive
officers is available in Bunges proxy statement, dated April 16, 2008,
for its 2008 annual meeting of shareholders and in Bunges most recent filing
on Form 10-K. Information about Corn Products directors and
executive officers is available in Corn Products proxy statement, dated April 4,
2008, for its 2008 annual meeting of stockholders and in Corn Products most
recent filing on Form 10-K. Additional information about the
interests of potential participants is included in the preliminary joint proxy
statement/prospectus referred to above.
6
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 earnings before
interest and taxes (EBIT), income from operations before income tax, net income
and earnings per share for the quarter and nine months ended September 30,
2008 and 2007.
(In millions, except per share data)
|
|
Total EBIT
|
|
Income From
Operations Before
Income Tax
|
|
Net Income
|
|
Earnings Per Share
Diluted
|
|
Quarter
Ended September 30:
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
Transactional tax credit
(1)
|
|
$
|
62
|
|
$
|
|
|
$
|
62
|
|
$
|
|
|
$
|
41
|
|
$
|
|
|
$
|
0.30
|
|
$
|
|
|
Impairment and restructuring charges
(3)
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(0.02
|
)
|
Total
|
|
$
|
62
|
|
$
|
(2
|
)
|
$
|
62
|
|
$
|
(2
|
)
|
$
|
41
|
|
$
|
(2
|
)
|
$
|
0.30
|
|
$
|
(0.02
|
)
|
(In millions, except per share data)
Nine Months Ended
|
|
Total EBIT
|
|
Income From
Operations Before
Income Tax
|
|
Net Income
|
|
Earnings Per Share
Diluted
|
|
September 30:
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
Transactional tax credit
(1)
|
|
$
|
190
|
|
$
|
|
|
$
|
190
|
|
$
|
|
|
$
|
131
|
|
$
|
|
|
$
|
0.95
|
|
$
|
|
|
Gain on sale of land
(2)
|
|
14
|
|
|
|
14
|
|
|
|
9
|
|
|
|
0.07
|
|
|
|
Impairment and restructuring charges
(3)
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
(9
|
)
|
|
|
(0.07
|
)
|
Total
|
|
$
|
204
|
|
$
|
(10
|
)
|
$
|
204
|
|
$
|
(10
|
)
|
$
|
140
|
|
$
|
(9
|
)
|
$
|
1.02
|
|
$
|
(0.07
|
)
|
(1)
As a result of favorable rulings related to certain transactional taxes
in Brazil that were accrued and paid in past years, Bunge recorded $117 million
and $11 million in cost of goods sold in its agribusiness and its milling
products segments, respectively, pertaining to transactional tax credits on
sales and $60 million and $2 million in selling, general and administrative
expenses in its agribusiness and edible oil products segment, respectively, pertaining
to transactional tax credits on financial transactions.
(2)
In the second quarter of 2008, Bunge recorded a gain on sale of land in
its edible oil products segment.
(3)
Impairment and restructuring charges in the
quarter ended September 30, 2007 consisted of $1 million in the
agribusiness segment and $1 million in the edible oil products segment. Impairment and restructuring charges in the
nine months ended September 30, 2007 consisted of $5 million in the
agribusiness segment and $5 million in the edible oil products segment. These 2007 impairment charges were recorded
in cost of goods sold.
7
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data and
percentages)
(Unaudited)
|
|
Quarter Ended
September 30,
|
Percent
|
|
Nine Months Ended
September 30,
|
|
Percent
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales (Note 1)
|
|
$
|
14,797
|
|
$
|
9,729
|
|
52
|
%
|
$
|
41,631
|
|
$
|
25,370
|
|
64
|
%
|
Cost of goods sold (Note 1)
|
|
(13,588
|
)
|
(8,822
|
)
|
54
|
%
|
(38,104
|
)
|
(23,631
|
)
|
61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
1,209
|
|
907
|
|
33
|
%
|
3,527
|
|
1,739
|
|
103
|
%
|
Selling, general and administrative
expenses
|
|
(382
|
)
|
(353
|
)
|
8
|
%
|
(1,244
|
)
|
(925
|
)
|
34
|
%
|
Interest income
|
|
57
|
|
44
|
|
30
|
%
|
159
|
|
112
|
|
42
|
%
|
Interest expense
|
|
(67
|
)
|
(52
|
)
|
29
|
%
|
(192
|
)
|
(144
|
)
|
33
|
%
|
Interest expense on readily marketable inventories
|
|
(30
|
)
|
(50
|
)
|
(40
|
)%
|
(93
|
)
|
(107
|
)
|
(13
|
)%
|
Foreign exchange gain (loss)
|
|
(471
|
)
|
56
|
|
(941
|
)%
|
(206
|
)
|
178
|
|
(216
|
)%
|
Other income (expense)net
|
|
(1
|
)
|
(5
|
)
|
(80
|
)%
|
(13
|
)
|
(2
|
)
|
550
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations before income tax
|
|
315
|
|
547
|
|
(42
|
)
%
|
1,938
|
|
851
|
|
128
|
%
|
Income tax expense
|
|
(5
|
)
|
(145
|
)
|
|
|
(459
|
)
|
(221
|
)
|
108
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations after income tax
|
|
310
|
|
402
|
|
(23
|
)%
|
1,479
|
|
630
|
|
135
|
%
|
Minority interest
|
|
(90
|
)
|
(57
|
)
|
58
|
%
|
(232
|
)
|
(104
|
)
|
123
|
%
|
Equity in earnings (loss) of affiliates
|
|
14
|
|
6
|
|
133
|
%
|
27
|
|
7
|
|
286
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
234
|
|
351
|
|
(33
|
)%
|
1,274
|
|
533
|
|
139
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preference share dividends
|
|
(19
|
)
|
(8
|
)
|
|
|
(58
|
)
|
(25
|
)
|
|
|
Net income available to common shareholders
|
|
$
|
215
|
|
$
|
343
|
|
(37
|
)%
|
$
|
1,216
|
|
$
|
508
|
|
139
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share diluted (Note
2):
|
|
$
|
1.70
|
|
$
|
2.70
|
|
(37
|
)%
|
$
|
9.26
|
|
$
|
4.12
|
|
125
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weightedaverage common shares
outstanding-diluted (Note 2)
|
|
137,839,070
|
|
129,794,933
|
|
|
|
137,634,556
|
|
129,505,800
|
|
|
|
Note 1:
Net
sales and cost of goods sold for the quarter and nine months ended September 30,
2007 have been restated.
Note 2:
Weighted-average
common shares outstanding-diluted for the quarter and nine months ended September 30,
2008 includes the dilutive effect of 14,572,258 weighted average common shares
that would be issuable upon conversion of Bunges convertible preference shares
because the effect of the conversion would have been dilutive. The dilutive
effect of the 7,483,740 weighted average common shares, which would be issuable
upon conversion of Bunges convertible preference shares, is included in the
earnings per common share-diluted calculation for the quarter and nine months
ended September 30, 2007 because the effect of the conversion would have
been dilutive.
8
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
September 30,
|
|
Percent
|
|
Nine Months Ended
September 30,
|
|
Percent
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
Volumes (in thousands of metric tons):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
29,683
|
|
31,168
|
|
(5
|
)%
|
86,501
|
|
86,261
|
|
|
%
|
Fertilizer
|
|
3,082
|
|
4,033
|
|
(24
|
)%
|
8,748
|
|
9,529
|
|
(8
|
)%
|
Edible oil products
|
|
1,452
|
|
1,418
|
|
2
|
%
|
4,281
|
|
4,069
|
|
5
|
%
|
Milling products
|
|
1,004
|
|
1,097
|
|
(8
|
)%
|
2,972
|
|
3,010
|
|
(1
|
)%
|
Total
|
|
35,221
|
|
37,716
|
|
(7
|
)%
|
102,502
|
|
102,869
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales (Note 1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
10,152
|
|
$
|
6,736
|
|
51
|
%
|
$
|
28,894
|
|
$
|
18,027
|
|
60
|
%
|
Fertilizer
|
|
1,899
|
|
1,239
|
|
53
|
%
|
4,875
|
|
2,646
|
|
84
|
%
|
Edible oil products
|
|
2,232
|
|
1,388
|
|
61
|
%
|
6,411
|
|
3,771
|
|
70
|
%
|
Milling products
|
|
514
|
|
366
|
|
40
|
%
|
1,451
|
|
926
|
|
57
|
%
|
Total
|
|
$
|
14,797
|
|
$
|
9,729
|
|
52
|
%
|
$
|
41,631
|
|
$
|
25,370
|
|
64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
534
|
|
$
|
538
|
|
(1
|
)%
|
$
|
1,743
|
|
$
|
911
|
|
91
|
%
|
Fertilizer
|
|
543
|
|
245
|
|
122
|
%
|
1,314
|
|
482
|
|
173
|
%
|
Edible oil products
|
|
84
|
|
79
|
|
6
|
%
|
306
|
|
232
|
|
32
|
%
|
Milling products
|
|
48
|
|
45
|
|
7
|
%
|
164
|
|
114
|
|
44
|
%
|
Total
|
|
$
|
1,209
|
|
$
|
907
|
|
33
|
%
|
$
|
3,527
|
|
$
|
1,739
|
|
103
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
(174
|
)
|
$
|
(173
|
)
|
1
|
%
|
$
|
(641
|
)
|
$
|
(451
|
)
|
42
|
%
|
Fertilizer
|
|
(78
|
)
|
(82
|
)
|
(5
|
)%
|
(243
|
)
|
(199
|
)
|
22
|
%
|
Edible oil products
|
|
(102
|
)
|
(74
|
)
|
38
|
%
|
(278
|
)
|
(211
|
)
|
32
|
%
|
Milling products
|
|
(28
|
)
|
(24
|
)
|
17
|
%
|
(82
|
)
|
(64
|
)
|
28
|
%
|
Total
|
|
$
|
(382
|
)
|
$
|
(353
|
)
|
8
|
%
|
$
|
(1,244
|
)
|
$
|
(925
|
)
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
(192
|
)
|
$
|
19
|
|
|
|
$
|
(33
|
)
|
$
|
83
|
|
|
|
Fertilizer
|
|
(270
|
)
|
33
|
|
|
|
(169
|
)
|
94
|
|
|
|
Edible oil products
|
|
(9
|
)
|
5
|
|
|
|
(4
|
)
|
5
|
|
|
|
Milling products
|
|
|
|
(1
|
)
|
|
|
|
|
(4
|
)
|
|
|
Total
|
|
$
|
(471
|
)
|
$
|
56
|
|
|
|
$
|
(206
|
)
|
$
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
7
|
|
$
|
(2
|
)
|
450
|
%
|
$
|
9
|
|
$
|
(10
|
)
|
190
|
%
|
Fertilizer
|
|
2
|
|
|
|
100
|
%
|
6
|
|
(1
|
)
|
700
|
%
|
Edible oil products
|
|
4
|
|
6
|
|
(33
|
)%
|
9
|
|
16
|
|
(44
|
)%
|
Milling products
|
|
1
|
|
2
|
|
(50
|
)%
|
3
|
|
2
|
|
50
|
%
|
Total
|
|
$
|
14
|
|
$
|
6
|
|
133
|
%
|
$
|
27
|
|
$
|
7
|
|
286
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
(6
|
)
|
$
|
(1
|
)
|
500
|
%
|
$
|
(23
|
)
|
$
|
(12
|
)
|
92
|
%
|
Fertilizer
|
|
(112
|
)
|
(80
|
)
|
40
|
%
|
(294
|
)
|
(153
|
)
|
92
|
%
|
Edible oil products
|
|
(4
|
)
|
2
|
|
(300
|
)%
|
(7
|
)
|
2
|
|
(450
|
)%
|
Milling products
|
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
Total
|
|
$
|
(122
|
)
|
$
|
(79
|
)
|
54
|
%
|
$
|
(324
|
)
|
$
|
(163
|
)
|
99
|
%
|
9
|
|
Quarter Ended
September 30,
|
|
Percent
|
|
Nine Months Ended
September 30,
|
|
Percent
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
2008
|
|
2007
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income/(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
1
|
|
$
|
|
|
100
|
%
|
$
|
(20
|
)
|
$
|
5
|
|
(500
|
)%
|
Fertilizer
|
|
(1
|
)
|
(4
|
)
|
(75
|
)%
|
(4
|
)
|
(4
|
)
|
|
%
|
Edible oil products
|
|
(2
|
)
|
(1
|
)
|
100
|
%
|
10
|
|
(3
|
)
|
433
|
%
|
Milling products
|
|
1
|
|
|
|
100
|
%
|
1
|
|
|
|
|
%
|
Total
|
|
$
|
(1
|
)
|
$
|
(5
|
)
|
(80
|
)%
|
$
|
(13
|
)
|
$
|
(2
|
)
|
550
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment earnings before interest and tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
170
|
|
$
|
381
|
|
(55
|
)%
|
$
|
1,035
|
|
$
|
526
|
|
97
|
%
|
Fertilizer
|
|
84
|
|
112
|
|
(25
|
)%
|
610
|
|
219
|
|
179
|
%
|
Edible oil products
|
|
(29
|
)
|
17
|
|
(271
|
)%
|
36
|
|
41
|
|
(12
|
)%
|
Milling products
|
|
22
|
|
22
|
|
|
%
|
86
|
|
48
|
|
79
|
%
|
Total (Note 2)
|
|
$
|
247
|
|
$
|
532
|
|
(54
|
)%
|
$
|
1,767
|
|
$
|
834
|
|
112
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of total segment earnings
before interest and tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment earnings before interest and
tax
|
|
$
|
247
|
|
$
|
532
|
|
|
|
$
|
1,767
|
|
$
|
834
|
|
|
|
Interest income
|
|
57
|
|
44
|
|
|
|
159
|
|
112
|
|
|
|
Interest expense
|
|
(97
|
)
|
(102
|
)
|
|
|
(285
|
)
|
(251
|
)
|
|
|
Income tax
|
|
(5
|
)
|
(145
|
)
|
|
|
(459
|
)
|
(221
|
)
|
|
|
Minority interest share of interest and tax
|
|
32
|
|
22
|
|
|
|
92
|
|
59
|
|
|
|
Other (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
234
|
|
$
|
351
|
|
|
|
$
|
1,274
|
|
$
|
533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
(48
|
)
|
$
|
(38
|
)
|
26
|
%
|
$
|
(144
|
)
|
$
|
(108
|
)
|
33
|
%
|
Fertilizer
|
|
(44
|
)
|
(37
|
)
|
19
|
%
|
(130
|
)
|
(107
|
)
|
22
|
%
|
Edible oil products
|
|
(20
|
)
|
(15
|
)
|
33
|
%
|
(56
|
)
|
(44
|
)
|
27
|
%
|
Milling products
|
|
(5
|
)
|
(5
|
)
|
|
%
|
(14
|
)
|
(12
|
)
|
17
|
%
|
Total
|
|
$
|
(117
|
)
|
$
|
(95
|
)
|
23
|
%
|
$
|
(344
|
)
|
$
|
(271
|
)
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
11
|
|
$
|
9
|
|
22
|
%
|
$
|
42
|
|
$
|
23
|
|
83
|
%
|
Fertilizer
|
|
37
|
|
17
|
|
118
|
%
|
89
|
|
48
|
|
85
|
%
|
Edible oil products
|
|
1
|
|
1
|
|
|
%
|
3
|
|
2
|
|
50
|
%
|
Milling products
|
|
|
|
|
|
|
%
|
1
|
|
1
|
|
|
%
|
Total
|
|
$
|
49
|
|
$
|
27
|
|
81
|
%
|
$
|
135
|
|
$
|
74
|
|
82
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agribusiness
|
|
$
|
(70
|
)
|
$
|
(90
|
)
|
(22
|
)%
|
$
|
(208
|
)
|
$
|
(211
|
)
|
(1
|
)%
|
Fertilizer
|
|
(6
|
)
|
(4
|
)
|
50
|
%
|
(15
|
)
|
(14
|
)
|
7
|
%
|
Edible oil products
|
|
(16
|
)
|
(7
|
)
|
129
|
%
|
(46
|
)
|
(23
|
)
|
100
|
%
|
Milling products
|
|
(5
|
)
|
(1
|
)
|
400
|
%
|
(16
|
)
|
(3
|
)
|
433
|
%
|
Total
|
|
$
|
(97
|
)
|
$
|
(102
|
)
|
(5
|
)%
|
$
|
(285
|
)
|
$
|
(251
|
)
|
14
|
%
|
Note 1:
Net
sales and cost of goods sold for the quarter ended September 30, 2007 have
been restated.
Note 2:
Total
segment earnings before interest and tax (EBIT) is a non-GAAP measure and is
not intended to replace net income, 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, is included under the caption Reconciliation of
Non-GAAP Measures.
Note 3:
Includes
other amounts not directly attributable to Bunges segments.
10
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
2008
|
|
2007
|
|
2007
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,494
|
|
$
|
981
|
|
$
|
845
|
|
Trade accounts receivable
|
|
3,536
|
|
2,541
|
|
2,697
|
|
Inventories
|
|
6,995
|
|
5,924
|
|
5,622
|
|
Deferred income taxes
|
|
430
|
|
219
|
|
142
|
|
Other current assets
|
|
4,827
|
|
4,853
|
|
4,454
|
|
Total current assets
|
|
17,282
|
|
14,518
|
|
13,760
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
4,298
|
|
4,216
|
|
3,967
|
|
Goodwill
|
|
366
|
|
354
|
|
251
|
|
Other intangible assets, net
|
|
115
|
|
139
|
|
112
|
|
Investments in affiliates
|
|
779
|
|
706
|
|
684
|
|
Deferred income taxes
|
|
771
|
|
903
|
|
939
|
|
Other non-current assets
|
|
1,029
|
|
1,155
|
|
1,113
|
|
Total assets
|
|
$
|
24,640
|
|
$
|
21,991
|
|
$
|
20,826
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
765
|
|
$
|
590
|
|
$
|
1,529
|
|
Current portion of long-term
debt
|
|
567
|
|
522
|
|
106
|
|
Trade accounts payable
|
|
5,566
|
|
4,061
|
|
3,614
|
|
Deferred income taxes
|
|
225
|
|
166
|
|
118
|
|
Other current liabilities
|
|
3,941
|
|
3,495
|
|
3,589
|
|
Total current liabilities
|
|
11,064
|
|
8,834
|
|
8,956
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
2,961
|
|
3,435
|
|
3,480
|
|
Deferred income taxes
|
|
164
|
|
149
|
|
178
|
|
Other non-current liabilities
|
|
981
|
|
876
|
|
904
|
|
Minority interest in
subsidiaries
|
|
760
|
|
752
|
|
602
|
|
Shareholders equity
|
|
8,710
|
|
7,945
|
|
6,706
|
|
Total liabilities and
shareholders equity
|
|
$
|
24,640
|
|
$
|
21,991
|
|
$
|
20,826
|
|
11
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
|
Nine Months Ended
September 30,
|
|
|
|
2008
|
|
2007
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
|
|
$
|
1,274
|
|
$
|
533
|
|
Adjustments to reconcile net income to cash
provided by (used for) operating activities:
|
|
|
|
|
|
Foreign exchange (gain) loss on debt
|
|
90
|
|
(167
|
)
|
Impairment of assets
|
|
6
|
|
10
|
|
Bad debt expense
|
|
68
|
|
39
|
|
Depreciation, depletion and amortization
|
|
344
|
|
271
|
|
Stock-based compensation expense
|
|
56
|
|
31
|
|
Recoverable tax provision
|
|
(19
|
)
|
|
|
Deferred income taxes
|
|
(22
|
)
|
(64
|
)
|
Minority interest
|
|
232
|
|
104
|
|
Equity in earnings of affiliates
|
|
(26
|
)
|
(7
|
)
|
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
|
|
|
|
|
|
Trade accounts receivable
|
|
(1,255
|
)
|
(557
|
)
|
Inventories
|
|
(1,453
|
)
|
(1,571
|
)
|
Prepaid commodity purchase contracts
|
|
268
|
|
(103
|
)
|
Secured advances to suppliers
|
|
(5
|
)
|
124
|
|
Trade accounts payable
|
|
1,997
|
|
908
|
|
Advances on sales
|
|
171
|
|
(79
|
)
|
Unrealized net (gain) loss on derivative contracts
|
|
(322
|
)
|
(199
|
)
|
Margin deposits
|
|
44
|
|
(189
|
)
|
Accrued liabilities
|
|
190
|
|
126
|
|
Other net
|
|
89
|
|
148
|
|
Cash provided by (used for) operating
activities
|
|
1,727
|
|
(642
|
)
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
Payments made for capital expenditures
|
|
(594
|
)
|
(382
|
)
|
Investments in affiliates
|
|
(68
|
)
|
(36
|
)
|
Acquisitions of businesses, net of cash
acquired
|
|
(61
|
)
|
(31
|
)
|
Related party loans
|
|
30
|
|
1
|
|
Proceeds from disposal of property, plant
and equipment
|
|
36
|
|
18
|
|
Proceeds from investment
|
|
2
|
|
|
|
Cash used for investing activities
|
|
(655
|
)
|
(430
|
)
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
Net change in short-term debt with
maturities of 90 days or less
|
|
(586
|
)
|
687
|
|
Proceeds from short-term debt with
maturities greater than 90 days
|
|
1,209
|
|
679
|
|
Repayments of short-term debt with
maturities greater than 90 days
|
|
(405
|
)
|
(348
|
)
|
Proceeds from long-term debt
|
|
1,757
|
|
1,576
|
|
Repayments of long-term debt
|
|
(2,205
|
)
|
(1,041
|
)
|
Proceeds from sale of common shares
|
|
7
|
|
23
|
|
Dividends paid to common shareholders
|
|
(64
|
)
|
(59
|
)
|
Dividends paid to preference shareholders
|
|
(61
|
)
|
(25
|
)
|
Dividends paid to minority interest
|
|
(153
|
)
|
(8
|
)
|
Other
|
|
38
|
|
28
|
|
Cash (used for) provided by financing
activities
|
|
(463
|
)
|
1,512
|
|
Effect of exchange rate changes on cash and
cash equivalents
|
|
(96
|
)
|
40
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
513
|
|
480
|
|
Cash and cash equivalents, beginning of
period
|
|
981
|
|
365
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,494
|
|
$
|
845
|
|
12
Reconciliation of Non-GAAP Measures
This
earnings release contains total segment earnings before interest and tax, net
financial debt and net financial debt less readily marketable inventories,
which are 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 these non-GAAP
financial measures to the most directly comparable U.S. GAAP measures.
Total
segment earnings before interest and tax
Total
segment earnings before interest and tax (EBIT) is Bunges consolidated net
income that excludes 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, the most directly comparable GAAP financial measure. Total segment EBIT is an operating
performance measure used by Bunges 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 Bunges
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:
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(In millions)
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
Total segment EBIT
|
|
$
|
247
|
|
$
|
532
|
|
$
|
1,767
|
|
$
|
834
|
|
Interest income
|
|
57
|
|
44
|
|
159
|
|
112
|
|
Interest expense
|
|
(97
|
)
|
(102
|
)
|
(285
|
)
|
(251
|
)
|
Income tax
|
|
(5
|
)
|
(145
|
)
|
(459
|
)
|
(221
|
)
|
Minority interest share of interest and tax
|
|
32
|
|
22
|
|
92
|
|
59
|
|
Other (1)
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
234
|
|
$
|
351
|
|
$
|
1,274
|
|
$
|
533
|
|
(1) Includes other amounts not
directly attributable to Bunges segments.
Net
Financial Debt
Net
financial debt is the sum of short-term debt, current maturities of long-term
debt and long-term debt, less cash and cash equivalents and marketable
securities. Net financial debt is
presented because management believes it represents a meaningful measure of
Bunges leverage capacity and solvency.
Net financial debt is not a measure of solvency under U.S. GAAP and
should not be considered as an alternative to total debt as a measure of
solvency.
Net
financial debt less readily marketable inventories (RMI), or net financial debt
less RMI, is the sum of short-term debt, current maturities of long-term debt
and long-term debt, less cash and cash equivalents, marketable securities and
readily marketable inventories. Net
financial debt less RMI is presented because management believes it represents
a more complete picture of Bunges leverage capacity and solvency since it
adjusts for readily marketable inventories.
Readily marketable inventories are agricultural inventories that are
readily convertible to cash because of their commodity characteristics, widely
available markets and international pricing mechanisms. Net financial debt less RMI is not a measure
of leverage capacity and solvency under U.S. GAAP and should not be considered
as an alternative to total debt as a measure of solvency.
13
Below
is a reconciliation of total long-term and short-term debt to net financial
debt and to net financial debt less readily marketable inventories:
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
(In millions)
|
|
2008
|
|
2007
|
|
2007
|
|
Short-term debt
|
|
$
|
765
|
|
$
|
590
|
|
$
|
1,529
|
|
Long-term debt, including current portion
|
|
3,528
|
|
3,957
|
|
3,586
|
|
Total debt (1)
|
|
4,293
|
|
4,547
|
|
5,115
|
|
Less:
|
|
|
|
|
|
|
|
Cash and cash equivalents (1)
|
|
1,494
|
|
981
|
|
845
|
|
Marketable securities
|
|
43
|
|
5
|
|
19
|
|
Net financial debt
|
|
2,756
|
|
3,561
|
|
4,251
|
|
Less: Readily marketable inventories
|
|
3,142
|
|
3,358
|
|
3,645
|
|
Net financial debt less readily marketable inventories
|
|
$
|
(386
|
)
|
$
|
203
|
|
$
|
606
|
|
(1) Includes total debt of $11 million, $26
million and $26 million and cash and cash equivalents of $759 million, $449
million and $361 million as of September 30, 2008, December 31, 2007
and September 30, 2007, respectively, relating to Fosfertil.
14
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