10-K/A 1 a2206733z10-ka.htm 10-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



FORM 10-K/A

ý   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

or

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to                            

Commission File Number 001-16625

BUNGE LIMITED
(Exact name of registrant as specified in its charter)

GRAPHIC

Bermuda
(State or other jurisdiction of incorporation or organization)
  98-0231912
(IRS Employer Identification No.)

50 Main Street
White Plains, New York USA

(Address of principal executive offices)

 

10606
(Zip Code)

(914) 684-2800
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class   Name of each exchange on which registered
Common Shares, par value $.01 per share   New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:    None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act: Large Accelerated filer ý    Accelerated filer o    Non-accelerated filer (do not check if a smaller reporting company) o    Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý

         The aggregate market value of registrant's common shares held by non-affiliates, based upon the closing price of our common shares on the last business day of the registrant's most recently completed second fiscal quarter, June 30, 2010, as reported by the New York Stock Exchange, was approximately $7,048 million. Common shares held by executive officers and directors and persons who own 10% or more of the issued and outstanding common shares have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not a determination for any other purpose.

         As of February 18, 2011, 146,843,806 Common Shares, par value $.01 per share were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the proxy statement for the 2011 Annual General Meeting of Shareholders to be held on May 27, 2011 are incorporated by reference into Part III.

   



EXPLANATORY NOTE

        Bunge Limited (the "Company") is filing this Amendment No. 1 (the "Amendment No. 1") to its Annual Report on Form 10-K for the year ended December 31, 2010 (the "Form 10-K") to correct the inadvertent omission of the conformed signatures of Deloitte & Touche LLP, the Company's Independent Registered Public Accounting Firm ("Deloitte & Touche"), from the Reports of Independent Registered Public Accounting Firm (the "Reports") originally included in the Form 10-K. This Amendment No. 1 includes the conformed signed copies of the Reports, together with the audited financial statements and financial statement schedules as originally filed with the Form 10-K. Additionally, as required under the Securities Exchange Act of 1934, as amended, new certifications of the Company's principal executive officer and principal financial officer and a new consent of Deloitte & Touche are filed as exhibits hereto.

        No revisions are being made to the Company's financial statements and except as described above, this Amendment No. 1 does not amend any other information in the Form 10-K, does not reflect any events that may have occurred subsequent to the filing of the original Form 10-K and does not modify or update in any way any disclosures made in the Form 10-K.


PART II

Item 8.    Financial Statements and Supplementary Data

        Our financial statements and related schedule required by this item are contained on pages F-1 through F-85 and on page E-1 of this Annual Report on Form 10-K/A. See Item 15(a) for a listing of financial statements provided.


PART IV

Item 15.    Exhibits, Financial Statement Schedules

a.     (1)-(2) Financial Statements and Financial Statement Schedules

        See "Index to Consolidated Financial Statements" on page F-1 and Financial Statement Schedule II—Valuation and Qualifying Accounts on page E-1 of this Annual Report on Amendment No. 1 to the Form 10-K.

a.     (3) Exhibits

        The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Amendment No. 1 or the Form 10-K.

        Certain of the agreements filed as exhibits to this Amendment No. 1 or the Form 10-K contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement, which may have been included in the agreement for the purpose of allocating risk between the parties rather than establishing matters as facts and may have been qualified by disclosures that were made to the parties in connection with the negotiation of these agreements and not necessarily reflected in the agreements. Accordingly, the representations and warranties contained in these agreements may not describe the actual state of affairs of Bunge Limited or its subsidiaries as of the date that these representations and warranties were made or at any other time. Investors should not rely on these representations and warranties as statements of fact. Additional information about Bunge Limited and its subsidiaries may be found elsewhere in the Annual Report on this Amendment No. 1, the Form 10-K and Bunge Limited's other public filings, which are available without charge through the SEC's website at www.sec.gov.

        See "Index to Exhibits" set forth below.


Exhibit
Number
  Description
  2.1   Share Purchase and Sale Agreement and Other Covenants, dated January 26, 2010, among Bunge Limited, Bunge Brasil Holdings B.V., Bunge Fertilizantes S.A., Vale S.A. and Mineração Naque S.A. (English Translation) (incorporated by reference from the Registrant's Form 10-K filed March 1, 2010)

 

2.2

 

First Amendment to the Share Purchase and Sale Agreement and Other Covenants among Bunge Limited, Bunge Brasil Holdings B.V., Bunge Fertilizantes S.A., Vale S.A. and Mineração Naque S.A. dated May 21, 2010 (incorporated by reference from the Registrant's Form 10-Q filed August 9, 2010)

 

3.1

 

Memorandum of Association (incorporated by reference from the Registrant's Form F-1 (No. 333-65026) filed July 13, 2001)

 

3.2

 

Bye-laws, as amended May 23, 2008 (incorporated by reference from the Registrant's Form 10-Q filed August 11, 2008)

 

4.1

 

Form of Common Share Certificate (incorporated by reference from the Registrant's Form 10-K filed March 3, 2008)

 

4.2

 

Certificate of Designation for Cumulative Convertible Perpetual Preference Shares (incorporated by reference from the Registrant's Form 8-K filed November 20, 2006)

 

4.3

 

Form of Cumulative Convertible Perpetual Preference Share Certificate (incorporated by reference from the Registrant's Form 8-K filed November 20, 2006)

 

4.4

 

The instruments defining the rights of holders of the long-term debt securities of Bunge and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Bunge hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request

 

4.5

 

Certificate of Deposit of Memorandum of Increase of Share Capital (incorporated by reference from the Registrant's Form 10-Q filed August 11, 2008)

 

10.1

 

Pooling Agreement, dated as of August 25, 2000, between Bunge Funding Inc., Bunge Management Services Inc., as Servicer, and The Chase Manhattan Bank, as Trustee (incorporated by reference from the Registrant's Form F-1 (No. 333-65026) filed July 13, 2001)

 

10.2

 

Second Amended and Restated Series 2000-1 Supplement, dated as of February 26, 2002, between Bunge Funding Inc., Bunge Management Services, Inc., as Servicer, Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank International," New York Branch, as Letter of Credit Agent, JPMorgan Chase Bank, as Administrative Agent, The Bank of New York, as Collateral Agent and Trustee, and Bunge Asset Funding Corp., as Series 2000-1 Purchaser, amending and restating the First Amended and Restated Series 2000-1 Supplement, dated July 12, 2001 (incorporated by reference from the Registrant's Form F-1 (No. 333-81322) filed March 8, 2002)

 

10.3

 

Sixth Amended and Restated Liquidity Agreement, dated as of June 28, 2004, among Bunge Asset Funding Corp., the financial institutions party thereto, Citibank N.A., as Syndication Agent, BNP Paribas, as Documentation Agent, Credit Suisse First Boston, as Documentation Agent, Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank International," New York Branch, as Documentation Agent, and JPMorgan Chase Bank, as Administrative Agent (incorporated by reference from the Registrant's Form 10-Q filed August 9, 2004)

Exhibit
Number
  Description
  10.4   Eighth Amended and Restated Liquidity Agreement, dated as of October 5, 2007, among Bunge Asset Funding Corp., the financial institutions party thereto, Citibank N.A., as Syndication Agent, BNP Paribas, as Documentation Agent, Credit Suisse, acting through its Cayman Islands branch, as Documentation Agent, Cooperative Centrale Raiffeisen- Boerenleenbank B.A., "Rabobank International," New York Branch, as Documentation Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference from the Registrant's Form 10-K filed March 3, 2008)

 

10.5

 

Sixth Amended and Restated Guaranty, dated as of June 11, 2007, between Bunge Limited, as Guarantor, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank International," New York Branch, in its capacity as the letter of credit agent under the Letter of Credit Reimbursement Agreement for the benefit of the Letter of Credit Banks, JPMorgan Chase Bank, N.A., in its capacity as the administrative agent under the Liquidity Agreement, for the benefit of the Liquidity Banks and The Bank of New York, in its capacity as collateral agent under the Security Agreement and as trustee under the Pooling Agreement (incorporated by reference from the Registrant's Form 8-K filed on June 14, 2007)

 

10.6

 

Facility Agreement, dated as of March 28, 2008, among Bunge Finance Europe B.V., as Borrower, BNP Paribas, Calyon, Fortis Bank (Netherland) N.V. and the Royal Bank of Scotland plc, as Mandated Lead Arrangers, the financial institutions from time to time party thereto, and Fortis Bank (Nederland) N.V., as Agent (incorporated by reference from the Registrant's Form 8-K filed on March 31, 2008)

 

10.7

 

Guaranty, dated as of March 28, 2008, between Bunge Limited, as Guarantor, and Fortis Bank (Netherland) N.V., as Agent (incorporated by reference from the Registrant's Form 8-K filed on March 31, 2008)

 

10.8

 

Three-Year Revolving Credit Agreement, dated June 3, 2009, among Bunge Limited Finance Corp., as borrower, Citibank, N.A., as syndication agent, BNP Paribas, Calyon New York Branch and CoBank, ACB, as documentation agents, JPMorgan Chase Bank, N.A. as administrative agent, and certain lenders party thereto (incorporated by reference from the Registrant's Form 8-K filed on June 3, 2009)

 

10.9

 

Guaranty, dated as of June 3, 2009, between Bunge Limited and JPMorgan Chase Bank, N.A., as administrative agent under the 3-Year Revolving Credit Agreement (incorporated by reference from the Registrant's Form 8-K filed on June 3, 2009)

 

10.10

 

Facility Agreement, dated November 24, 2009, among Bunge Finance Europe B.V., as Borrower, the several banks and other financial institutions or entities from time to time parties thereto, as Lenders, Fortis Bank (Nederland) N.V., as facility agent (incorporated by reference from the Registrant's Form 8-K filed on November 30, 2009)

 

10.11

 

Guaranty, dated as of November 24, 2009, between Bunge Limited, as Guarantor, and Fortis Bank (Nederland) N.V., as facility agent (incorporated by reference from the Registrant's Form 8-K filed on November 30, 2009)

 

10.12

 

Employment Agreement (Amended and Restated as of December 31, 2008) between Bunge Limited and Alberto Weisser (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.13

 

Offer Letter, dated as of February 1, 2008, for Vicente Teixeira (incorporated by reference from the Registrant's Form 10-Q filed May 12, 2008)

 

10.14

 

Bunge Limited Equity Incentive Plan (Amended and Restated as of December 31, 2008) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

Exhibit
Number
  Description
  10.15   Form of Nonqualified Stock Option Award Agreement (effective as of 2005) under the Bunge Limited Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 15, 2006)

 

10.16

 

Form of Restricted Stock Unit Award Agreement (effective as of 2005) under the Bunge Limited Equity Incentive Plan (incorporated by reference from the Registrant's Form 8-K filed July 8, 2005)

 

10.17

 

Form of Performance-Based Restricted Stock Unit-Target EPS Award Agreement (effective as of 2005) under the Bunge Limited Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 15, 2006)

 

10.18

 

Form of Performance-Based Restricted Stock Unit-Target Operating Profit Award Agreement (effective as of 2005) under the Bunge Limited Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 15, 2006)

 

10.19

 

Bunge Limited 2009 Equity Incentive Plan (incorporated by reference from the Registrant's Definitive Proxy Statement filed April 3, 2009)

 

10.20**

 

Form of Nonqualified Stock Option Award Agreement under the 2009 Bunge Limited Equity Incentive Plan

 

10.21**

 

Form of Restricted Stock Unit Award Agreement under the 2009 Bunge Limited Equity Incentive Plan

 

10.22**

 

Form of Performance-Based Restricted Stock Unit-Target EPS Award Agreement under the 2009 Bunge Limited Equity Incentive Plan

 

10.23

 

Bunge Limited Non-Employee Directors' Equity Incentive Plan (Amended and Restated as of February 25, 2005) (incorporated by reference from the Registrant's Form 10-K filed March 16, 2005)

 

10.24

 

Bunge Limited 2007 Non-Employee Directors' Equity Incentive Plan (Amended and Restated as of December 31, 2008) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.25

 

Form of Deferred Restricted Stock Unit Award Agreement (effective as of 2007) under the Bunge Limited 2007 Non-Employee Directors' Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 3, 2008)

 

10.26

 

Form of Restricted Stock Unit Award Agreement under the Bunge Limited 2007 Non-Employee Directors' Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 1, 2010)

 

10.27

 

Form of Nonqualified Stock Option Award Agreement (effective as of 2005) under the Bunge Limited Non-Employee Directors' Equity Incentive Plan (incorporated by reference from the Registrant's Form 10-K filed March 15, 2006)

 

10.28

 

Bunge Limited Deferred Compensation Plan for Non-Employee Directors (Amended and Restated as of December 31, 2008) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.29

 

Bunge Excess Benefit Plan (Amended and Restated as of January 1, 2009) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.30

 

Bunge Excess Contribution Plan (Amended and Restated as of January 1, 2009) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.31**

 

Bunge U.S. SERP (Amended and Restated as of January 1, 2011)

Exhibit
Number
  Description
  10.32   Bunge Limited Employee Deferred Compensation Plan (effective January 1, 2008) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.33

 

Bunge Limited Annual Incentive Plan (Amended and Restated as of December 31, 2008) (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.34

 

Bunge Limited Annual Incentive Plan (effective January 1, 2011) (incorporated by reference from the Registrant's Definitive Proxy Statement filed April 16, 2010)

 

10.35

 

Offer Letter, dated as of June 21, 2007 for Jacqualyn A. Fouse (incorporated by reference from the Registrant's Form 10-Q filed on August 9, 2007)

 

10.36

 

Offer Letter, amended and restated as of December 31, 2008, for Archibald Gwathmey (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.37

 

Offer Letter, amended and restated as of December 31, 2008, for Andrew J. Burke (incorporated by reference from the Registrant's Form 10-K filed March 2, 2009)

 

10.38**

 

Description of Non-Employee Directors' Compensation as of January 1, 2011

 

10.39

 

Offer Letter, amended and restated as of February 1, 2009, for D. Benedict Pearcy (incorporated by reference from the Registrant's Form 10-Q filed May 10, 2010)

 

10.40

 

Separation Agreement and Release of Claims by and between Bunge Limited and Archibald Gwathmey, effective as of December 31, 2010 (incorporated by reference from the Registrant's Form 8-K/A filed December 21, 2010)

 

12.1**

 

Computation of Ratio of Earnings to Fixed Charges

 

21.1**

 

Subsidiaries of the Registrant

 

23.1**

 

Consent of Deloitte & Touche LLP

 

23.2*

 

Consent of Deloitte & Touche LLP

 

31.1**

 

Certification of Bunge Limited's Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act

 

31.2**

 

Certification of Bunge Limited's Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act

 

31.3*

 

Certification of Bunge Limited's Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act

 

31.4*

 

Certification of Bunge Limited's Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act

 

32.1**

 

Certification of Bunge Limited's Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act

 

32.2**

 

Certification of Bunge Limited's Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act

 

32.3*

 

Certification of Bunge Limited's Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act

 

32.4*

 

Certification of Bunge Limited's Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act

Exhibit
Number
  Description
  101*+   The following financial information from Bunge Limited's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders' Equity, (v) the Notes to the Consolidated Financial Statements and (vi) Schedule II—Valuation and Qualifying Accounts.

*
Filed with this Amendment No. 1 to the Form 10-K.

**
Previously filed with the Form 10-K.


+
Users of this interactive data file are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.


BUNGE LIMITED
Schedule II—Valuation and Qualifying Accounts
(US$ In Millions)

 
   
  Additions    
   
 
Description
  Balance at
beginning of
period
  Charged to
costs and
expenses
  Charged to
other
accounts(b)
  Deductions
from reserves
  Balance
at end of
period
 

FOR THE YEAR ENDED DECEMBER 31, 2008

                               

Allowances for doubtful accounts (a)

  $ 285     95     (46 )   (43)   (c) $ 291  

Allowance for secured advances to suppliers

  $ 52     33     (14 )   (34)   (c) $ 37  

Allowances for recoverable taxes

  $ 135     20     (37 )   (14 ) $ 104  

Income tax valuation allowance

  $ 33     47     14   (d)     $ 94  

FOR THE YEAR ENDED DECEMBER 31, 2009

                               

Allowances for doubtful accounts (a)

  $ 291     75     84     (100)   (c) $ 350  

Allowance for secured advances to suppliers

  $ 37     21     17       $ 75  

Allowances for recoverable taxes

  $ 104     34     31     (5 ) $ 164  

Income tax valuation allowance

  $ 94     50     5     (33 ) $ 116  

FOR THE YEAR ENDED DECEMBER 31, 2010

                               

Allowances for doubtful accounts (a)

  $ 350     58     3     (111)   (c) $ 300  

Allowance for secured advances to suppliers

  $ 75     17     3     (8 ) $ 87  

Allowances for recoverable taxes

  $ 164     20     (20 )   (46)   (e) $ 118  

Income tax valuation allowance

  $ 116     128     1       $ 245  

(a)
This includes an allowance for doubtful accounts for current and non-current trade accounts receivables.

(b)
This consists primarily of foreign exchange translation adjustments.

(c)
Such amounts include write-offs of uncollectible accounts.

(d)
This includes a reclassification from uncertain tax liabilities and a deferred tax asset adjustment.

(e)
This includes $39M related to the sale of nutrients assets.

E-1


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Bunge Limited
White Plains, New York

        We have audited the accompanying consolidated balance sheets of Bunge Limited and subsidiaries (the "Company") as of December 31, 2010 and 2009, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Bunge Limited and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2011 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

February 28, 2011
New York, New York

F-2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Bunge Limited
White Plains, New York

        We have audited the internal control over financial reporting of Bunge Limited and subsidiaries (the "Company") as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management's Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the five entitites that were formerly part of the Moema Group (collectively, "Moema"), which were acquired in February 2010 and whose combined financial statements constitute 7% of total assets at December 31, 2010 and 1% of net sales for the year ended December 31, 2010. Accordingly, our audit did not include the internal control over financial reporting at Moema. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

F-3


        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2010 of the Company and our report dated February 28, 2011 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ DELOITTE & TOUCHE LLP

February 28, 2011
New York, New York

F-4



BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(U.S. dollars in millions, except per share data)

 
  Year Ended December 31,  
 
  2010   2009   2008  

Net sales

  $ 45,707   $ 41,926   $ 52,574  

Cost of goods sold

    (43,196 )   (40,722 )   (48,538 )
               

Gross profit

   
2,511
   
1,204
   
4,036
 

Selling, general and administrative expenses

    (1,558 )   (1,342 )   (1,613 )

Gain on sale of fertilizer nutrients assets (Note 3)

    2,440          

Interest income

    69     122     214  

Interest expense

    (298 )   (283 )   (361 )

Loss on extinguishment of debt (Note 17)

    (90 )        

Foreign exchange gain (loss)

    2     469     (749 )

Other income (expenses)—net

    (26 )   (25 )   10  
               

Income from operations before income tax

   
3,050
   
145
   
1,537
 

Income tax (expense) benefit

    (689 )   110     (245 )

Equity in earnings of affiliates

    27     80     34  
               

Net income

   
2,388
   
335
   
1,326
 

Net (income) loss attributable to noncontrolling interest

    (34 )   26     (262 )
               

Net income attributable to Bunge

   
2,354
   
361
   
1,064
 

Convertible preference share dividends

    (67 )   (78 )   (78 )
               

Net income available to Bunge common shareholders

 
$

2,287
 
$

283
 
$

986
 
               

Earnings per common share—basic (Note 24)

                   

Earnings to Bunge common shareholders

  $ 16.20   $ 2.24   $ 8.11  
               

Earnings per common share—diluted (Note 24)

                   

Earnings to Bunge common shareholders

  $ 15.06   $ 2.22   $ 7.73  
               

   

The accompanying notes are an integral part of these consolidated financial statements.

F-5



BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in millions, except share data)

 
  December 31,  
 
  2010   2009  

ASSETS

             

Current assets:

             

Cash and cash equivalents

  $ 578   $ 553  

Trade accounts receivable (less allowance of $177 and $192) (Note 18)

    2,901     2,363  

Inventories (Note 4)

    6,635     4,862  

Deferred income taxes (Note 14)

    233     506  

Other current assets (Note 5)

    5,468     3,499  
           

Total current assets

    15,815     11,783  

Property, plant and equipment, net (Note 6)

    5,312     5,347  

Goodwill (Note 7)

    934     427  

Other intangible assets, net (Note 8)

    186     170  

Investments in affiliates (Note 10)

    609     622  

Deferred income taxes (Note 14)

    1,200     979  

Other non-current assets (Note 11)

    1,945     1,958  
           

Total assets

  $ 26,001   $ 21,286  
           

LIABILITIES AND SHAREHOLDERS' EQUITY

             

Current liabilities:

             

Short-term debt (Note 16)

  $ 1,718   $ 166  

Current portion of long-term debt (Note 17)

    612     31  

Trade accounts payable

    3,637     3,275  

Deferred income taxes (Note 14)

    262     100  

Other current liabilities (Note 12)

    3,775     2,635  
           

Total current liabilities

    10,004     6,207  

Long-term debt (Note 17)

    2,551     3,618  

Deferred income taxes (Note 14)

    84     183  

Other non-current liabilities

    808     913  

Commitments and contingencies (Note 22)

             

Shareholders' equity (Note 23):

             

Mandatory convertible preference shares, par value $.01; authorized—862,500; issued and outstanding: 2010—zero, 2009—862,455 shares (liquidation preference $1,000 per share)

        863  

Convertible perpetual preference shares, par value $.01; authorized issued and outstanding: 2010 and 2009—6,900,000 shares (liquidation preference $100 per share)

    690     690  

Common shares, par value $.01; authorized—400,000,000 shares; issued: 2010—146,635,083 shares, 2009—134,096,906 shares

    1     1  

Additional paid-in capital

    4,793     3,625  

Retained earnings

    6,153     3,996  

Accumulated other comprehensive income

    583     319  
           

Total Bunge shareholders' equity

    12,220     9,494  

Noncontrolling interest

    334     871  
           

Total equity

    12,554     10,365  
           

Total liabilities and shareholders' equity

  $ 26,001   $ 21,286  
           

   

The accompanying notes are an integral part of these consolidated financial statements.

F-6



BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in millions)

 
  Year Ended December 31,  
 
  2010   2009   2008  

OPERATING ACTIVITIES

                   

Net income

  $ 2,388   $ 335   $ 1,326  

Adjustments to reconcile net income to cash (used for) provided by operating activities:

                   

Foreign exchange loss (gain) on debt

    75     (606 )   472  

Gain on sale of fertilizer nutrients assets

    (2,440 )        

Impairment of assets

    77     31     18  

Bad debt expense

    48     55     69  

Depreciation, depletion and amortization

    443     443     439  

Stock-based compensation expense

    60     17     66  

Recoverable taxes provision

    3     61     (9 )

Gain on sale of property, plant and equipment

    (7 )   (4 )   (14 )

Deferred income taxes

    160     (204 )   (251 )

Equity in earnings of affiliates

    (27 )   (80 )   (34 )

Changes in operating assets and liabilities, excluding the effects of acquisitions:

                   

Trade accounts receivable

    (1,560 )   242     (338 )

Inventories

    (1,894 )   1,636     (905 )

Prepaid commodity purchase contracts

    (65 )   86     300  

Secured advances to suppliers

    35     221     (143 )

Trade accounts payable

    1,305     (1,427 )   1,161  

Advances on sales

    70     (8 )   (106 )

Unrealized net gain/loss on derivative contracts

    (588 )   (175 )   184  

Margin deposits

    (382 )   (229 )   8  

Recoverable taxes

    (122 )   (471 )   (428 )

Accrued liabilities

    15     (56 )   207  

Other—net

    (29 )   (235 )   521  
               

Cash (used for) provided by operating activities

    (2,435 )   (368 )   2,543  
               

INVESTING ACTIVITIES

                   

Payments made for capital expenditures

    (1,072 )   (918 )   (896 )

Acquisitions of businesses (net of cash acquired) and intangible assets

    (252 )   (136 )   (131 )

Proceeds from sales of fertilizer nutrients assets

    3,914          

Cash disposed of in sale of fertilizer nutrients assets

    (106 )        

Related party (loans) repayments

    (39 )   (22 )   47  

Proceeds from (payments for) investments

    50     96     (94 )

Proceeds from disposal of property, plant and equipment

    16     36     39  

Investments in affiliates

    (2 )   (8 )   (71 )
               

Cash provided by (used for) investing activities

    2,509     (952 )   (1,106 )
               

FINANCING ACTIVITIES

                   

Net change in short-term debt with maturities of 90 days or less

    573     (342 )   (687 )

Proceeds from short-term debt with maturities greater than 90 days

    1,669     1,140     1,887  

Repayments of short-term debt with maturities greater than 90 days

    (1,070 )   (1,164 )   (1,206 )

Proceeds from long-term debt

    2,535     2,774     1,967  

Repayment of long-term debt

    (3,227 )   (2,242 )   (2,819 )

Proceeds from sale of common shares

    6     763     7  

Repurchase of common shares

    (354 )        

Dividends paid to preference shareholders

    (78 )   (78 )   (81 )

Dividends paid to common shareholders

    (124 )   (103 )   (87 )

Dividends paid to noncontrolling interest

    (9 )   (17 )   (154 )

Capital contributions from noncontrolling interest in less than wholly-owned subsidiaries

    60     87     27  

Return of capital to noncontrolling interest

    (11 )   (44 )    
               

Cash (used for) provided by financing activities

    (30 )   774     (1,146 )

Effect of exchange rate changes on cash and cash equivalents

    (19 )   95     (268 )
               

Net increase (decrease) in cash and cash equivalents

    25     (451 )   23  

Cash and cash equivalents, beginning of period

    553     1,004     981  
               

Cash and cash equivalents, end of period

  $ 578   $ 553   $ 1,004  
               

   

The accompanying notes are an integral part of these consolidated financial statements.

F-7



BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(U.S. dollars in millions, except share data)

 
   
   
   
   
   
   
  Accumulated
Other
Comprehensive
Income (Loss)
(Note 23)
   
   
   
   
 
 
  Convertible Preference Shares   Common Shares    
   
   
   
   
   
 
 
  Additional
Paid-in
Capital
  Retained
Earnings
  Treasury
Shares
  Noncontrolling
Interest
  Total
Shareholders'
Equity
  Comprehensive
Income (Loss)
 
 
  Shares   Amount   Shares   Amount  

Balance, January 1, 2008

    7,762,500   $ 1,553     121,225,963   $ 1   $ 2,760   $ 2,962   $ 669   $   $ 752   $ 8,697        

Comprehensive income—2008:

                                                                   

Net income

                        1,064             262     1,326   $ 1,326  

Other comprehensive income (loss):

                                                                   

Foreign exchange translation adjustment, net of tax expense of $0

                            (1,346 )       (181 )   (1,527 )   (1,527 )

Unrealized losses on commodity futures and foreign exchange contracts, net of tax benefit of $31

                            (68 )           (68 )   (68 )

Unrealized investment losses, net of tax benefit of $4

                            (8 )           (8 )   (8 )

Reclassification of realized net gains to net income, net of tax expense of $15

                            (22 )           (22 )   (22 )

Pension liability adjustment, net of tax of $21 and $(11)

                            (36 )       21     (15 )   (15 )
                                                                   

Total comprehensive income (loss)

                                          $ (314 )
                                                                   

Pension measurement date adjustment, net of tax benefit of $2

                        (4 )               (4 )      

Dividends on common shares

                        (87 )               (87 )      

Dividends on preference shares

                        (91 )               (91 )      

Dividends to noncontrolling interest on subsidiary common stock

                                    (154 )   (154 )      

Capital contribution from noncontrolling interest

                                    26     26        

Capital contribution related to exchange of subsidiaries stock in connection with merger of subsidiaries

                    13                 (34 )   (21 )      

Gain on sale of interest in subsidiary

                    13                     13        

Stock-based compensation expense

                    66                     66        

Reversal of tax benefits related to stock options and award plans

                    (5 )                   (5 )      

Issuance of common shares:

                                                                   

—conversion of mandatory preference shares

    (45 )       369                                    

—stock options and award plans, net of shares withheld for taxes

            406,124         2                     2        
                                                 

Balance, December 31, 2008

    7,762,455   $ 1,553     121,632,456   $ 1   $ 2,849   $ 3,844   $ (811 ) $   $ 692   $ 8,128        

Comprehensive income—2009:

                                                                   

Net income (loss)

                        361             (26 )   335   $ 335  

Other comprehensive income (loss):

                                                                   

Foreign exchange translation adjustment, net of tax expense of $0

                            1,062         190     1,252     1,252  

Unrealized gains on commodity futures and foreign exchange contracts, net of tax expense of $10

                            25             25     25  

Unrealized investment gains, net of tax expense of $1

                            2             2     2  

Reclassification of realized net losses to net income, net of tax benefit of $30

                            52             52     52  

Pension liability adjustment, net of tax benefit of $6 and $5

                            (11 )       (16 )   (27 )   (27 )
                                                                   

Total comprehensive income

                                          $ 1,639  
                                                                   

Dividends on common shares

                        (131 )               (131 )      

Dividends on preference shares

                        (78 )               (78 )      

Dividends to noncontrolling interest on subsidiary common stock

                                    (17 )   (17 )      

Return of capital to noncontrolling interest

                                    (44 )   (44 )      

Capital contribution from noncontrolling interest

                                    87     87        

Consolidation of subsidiary

                                    5     5        

F-8



BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Continued)

(U.S. dollars in millions, except share data)

 
   
   
   
   
   
   
  Accumulated
Other
Comprehensive
Income (Loss)
(Note 23)
   
   
   
   
 
 
  Convertible Preference Shares   Common Shares    
   
   
   
   
   
 
 
  Additional
Paid-in
Capital
  Retained
Earnings
  Treasury
Shares
  Noncontrolling
Interest
  Total
Shareholders'
Equity
  Comprehensive
Income (Loss)
 
 
  Shares   Amount   Shares   Amount  

Purchase of additional shares in subsidiary from noncontrolling interest

                    (4 )                   (4 )      

Stock-based compensation expense

                    17                     17        

Tax benefits related to stock options and award plans

                    6                     6        

Issuance of common shares:

                                                                   

—public equity offering

            12,000,000         761                     761        

—stock options and award plans, net of shares withheld for taxes

            464,450         (4 )                   (4 )      
                                                 

Balance, December 31, 2009

    7,762,455   $ 1,553     134,096,906   $ 1   $ 3,625   $ 3,996   $ 319   $   $ 871   $ 10,365        

Comprehensive income—2010:

                                                                   

Net income

                        2,354             34     2,388   $ 2,388  

Other comprehensive income (loss):

                                                                   

Foreign exchange translation adjustment, net of tax expense of $0

                            247         (24 )   223     223  

Unrealized gains on commodity futures and foreign exchange contracts, net of tax expense of $11

                            21             21     21  

Reclassification of realized net gains to net income, net of tax expense of $11

                            (11 )           (11 )   (11 )

Pension liability adjustment, net of tax expense of $5

                            5             5     5  

Other posretirement healthcare subsidy tax deduction adjustment

                            2             2     2  
                                                                   

Total comprehensive income

                                                              $ 2,628  
                                                                   

Dividends on common shares

                        (130 )               (130 )      

Dividends on preference shares

                        (67 )               (67 )      

Dividends to noncontrolling interest on subsidiary common stock

                                    (12 )   (12 )      

Return of capital to noncontrolling interest

                                    (11 )   (11 )      

Capital contribution from noncontrolling interest

                                    61     61        

Consolidation of subsidiary

                                    3     3        

Sale of non-wholly owned subsidiary (Note 3)

                                    (588 )   (588 )      

Stock-based compensation expense

                    60                     60        

Repurchase of common shares

            (6,714,573 )                   (354 )       (354 )      

Issuance of common shares:

                                                                   

—business acquisition (Note 2)

            10,315,400         600                     600        

—conversion of mandatory convertible preference shares (Note 23)

    (862,455 )   (863 )   8,417,215         509             354                

—stock options and award plans, net of shares withheld for taxes

            520,135         (1 )                   (1 )      
                                                 

Balance, December 31, 2010

    6,900,000   $ 690     146,635,083   $ 1   $ 4,793   $ 6,153   $ 583   $   $ 334   $ 12,554        
                                                 

   

The accompanying notes are an integral part of these consolidated financial statements.

F-9



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies

        Description of Business—Bunge Limited is a Bermuda holding company. Bunge Limited, together with its consolidated subsidiaries through which its businesses are conducted (collectively, "Bunge"), is an integrated, global agribusiness and food company. Bunge Limited common shares trade on the New York Stock Exchange under the ticker symbol "BG." Bunge operates in four divisions, which include five reportable segments: agribusiness, sugar and bioenergy, edible oil products, milling products and fertilizer.

        Agribusiness—Bunge's agribusiness segment is an integrated business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Bunge's agribusiness operations and assets are located in North America, South America, Europe and Asia, and we have merchandising and distribution offices throughout the world.

        Bunge's agribusiness segment also participates in related financial activities, such as offering trade structured finance, which leverages our international trade flows, providing risk management services to customers by assisting them with managing price exposure to agricultural commodities and developing private investment vehicles to invest in businesses complementary to our commodities operations.

        Sugar and Bioenergy—In the first quarter of 2010, Bunge began reporting the results of its sugar and bioenergy businesses as a reportable segment, which includes the results of its sugar production, merchandising and distribution businesses and its ethanol production investments and activities. Prior to the first quarter of 2010, sugar and bioenergy results and assets were included in the agribusiness segment. Accordingly, amounts for prior periods presented have been reclassified to conform to the current period segment presentation. This reportable segment became significant to Bunge in February 2010 with the acquisition of five sugar mills in Brazil. See Note 2 of the notes to the consolidated financial statements.

        Bunge's sugar and bioenergy segment is an integrated business involved in the procurement and growing of sugarcane for its mills, production of sugar and sugarcane-based ethanol, merchandising and distribution of sugar within Brazil and on a global basis through Bunge's merchandising and distribution office in London. In addition, the segment includes Bunge's minority investments in the U.S. corn-based ethanol industry.

        Edible oil products—Bunge's edible oil products segment consists of producing and selling edible oil products, such as packaged and bulk oils, shortenings, margarine, mayonnaise and other products derived from the vegetable oil refining process. Bunge's edible oil products operations are located in North America, Europe, Brazil, China and India.

        Milling products—Bunge's milling products segment include its wheat, corn and rice milling businesses. The wheat milling business consists of producing and selling wheat flours and bakery mixes. Bunge's wheat milling activities are located in Brazil. The corn milling business consists of producing and selling products derived from corn. Bunge's corn milling activities are located in the United States. In 2010, Bunge acquired a U.S. rice mill. See Note 2 of the notes to the consolidated financial statements.

        Fertilizer—Bunge's fertilizer segment has historically been involved in every stage of the fertilizer business, from mining of phosphate-based raw materials to the sale of blended fertilizer products. In May 2010, Bunge sold its fertilizer nutrients assets in Brazil, including its phosphate mining assets and its investment in Fosfertil S.A., a phosphate and nitrogen producer in Brazil. In addition, Bunge acquired the Argentine fertilizer business of Petrobras Energia S.A., which produces liquid and solid

F-10



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

nitrogen fertilizers. Bunge also has a joint venture with Office Chérifien des Phosphates, or OCP, to produce fertilizer products in Morocco. See Notes 2, 3 and 10 of the notes to the consolidated financial statements.

        Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the assets, liabilities, revenues and expenses of all entities over which Bunge exercises control.

        Noncontrolling interest related to Bunge's ownership interests of less than 100% is reported as noncontrolling interest in subsidiaries in the consolidated balance sheets. The noncontrolling ownership interest in Bunge's earnings, net of tax, is reported as net (income) loss attributable to noncontrolling interest in the consolidated statements of income.

        Bunge evaluates its equity investments for consolidation in accordance with a standard issued by the FASB that provides guidance on entities subject to consolidation as well as how to consolidate. The standard focuses on controlling financial interests that may be achieved through arrangements that do not involve voting interests. A variable interest entity (VIE) is a legal structure that does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. The standard requires that a VIE be consolidated by a company if that company is the primary beneficiary of the VIE. The primary beneficiary of a VIE is an entity that is subject to a majority of the risk of loss from the VIE's activities or entitled to receive a majority of the VIE's residual returns or both. As of December 31, 2010 and 2009, Bunge had no investments in affiliates that have not been consolidated that would be considered VIEs where Bunge is determined to be the primary beneficiary.

        Investments in businesses in which Bunge does not have control but has the ability to exercise significant influence are accounted for by the equity method of accounting whereby the investment is carried at acquisition cost plus Bunge's equity in undistributed earnings or losses since acquisition. Investments in which Bunge does not have the ability to exercise significant influence are accounted for by the cost method. Equity and cost method investments are included in investments in affiliates in the consolidated balance sheets.

        Use of Estimates and Certain Concentrations of Risk—The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require management to make certain estimates and assumptions. These may affect the reported amounts of assets and liabilities at the date of the financial statements. They may also affect the reported amounts of revenues and expenses during the reporting period. Amounts affected include, but are not limited to, allowances for doubtful accounts, valuation allowances for recoverable taxes and deferred tax assets, impairment of long-lived assets, restructuring charges, useful lives of property, plant and equipment and intangible assets, contingent liabilities, liabilities for unrecognized tax benefits and pension plan obligations. In addition, significant management estimates and assumptions are required in determination of fair values of Level 3 assets and liabilities. See Note 15 of the notes to the consolidated financial statements. Actual amounts may vary from these estimates.

        The availability and price of agricultural commodities used in Bunge's operations are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) programs and policies, and changes in global demand and production of similar and

F-11



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

competitive crops. The markets for Bunge's products are highly price competitive and are sensitive to product substitution. Bunge competes against large multinational, regional and national suppliers, processors and distributors and farm cooperatives. Competition is based on price, product and service offerings and geographic location. In addition, Bunge has significant commercial activities related to logistics as it moves commodities around the world and also related to energy as agricultural commodities and commodity products have become key components of ethanol and other biofuels. Bunge also enters into over-the-counter derivative instruments with financial counterparties, primarily related to management of interest rate and foreign currency risk. As a result of these activities, Bunge also has concentrations of risk with counterparties in the agribusiness, shipping, energy and finance industries.

        Translation of Foreign Currency Financial Statements—Bunge's reporting currency is the U.S. dollar. The functional currency of the majority of Bunge's foreign subsidiaries is their local currency and, as such, amounts included in the consolidated statements of income are translated using average exchange rates during each period. Assets and liabilities are translated at period-end exchange rates and resulting foreign exchange translation adjustments are recorded in the consolidated balance sheets as a component of accumulated other comprehensive income (loss).

        Foreign Currency Transactions—Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into their respective functional currencies at exchange rates in effect at the balance sheet date. The resulting exchange gain or loss is included in Bunge's consolidated statements of income as foreign exchange gain (loss).

        Cash and Cash Equivalents—Cash and cash equivalents include time deposits and readily marketable securities with original maturity dates of three months or less at the time of acquisition.

        Trade Accounts Receivable and Secured Advances to Suppliers—Accounts receivable and secured advances to suppliers are stated at the historical carrying amounts net of write-offs and allowances for uncollectible accounts. Bunge establishes an allowance for uncollectible trade accounts receivable and secured advances to farmers based on historical experience, farming economic and other market conditions as well as specific identified customer collection issues. Uncollectible accounts are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when Bunge has determined that collection of the balance is unlikely.

        Secured advances to suppliers bear interest at contractual amounts which reflect current market interest rates at the time of the transaction. There are no deferred fees or costs associated with these receivables. As a result of these factors, there are no imputed interest amounts to be amortized under the interest method. Interest income is calculated based on the terms of the individual agreements and is recognized on an accrual basis.

        Bunge adopted the accounting guidance on disclosure about the credit quality of financing receivables and the allowance for credit losses as of December 31, 2010. This guidance requires information to be disclosed at disaggregated levels, defined as portfolio segments and classes. Based upon its analysis of credit losses and risk factors to be considered in determining the allowance for credit losses, Bunge has determined that the long-term receivables from farmers in Brazil is a single portfolio segment.

        Bunge evaluates this single portfolio segment by class of receivables, which is defined as a level of information (below a portfolio segment) in which the receivables have the same initial measurement

F-12



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

attribute and a similar method for assessing and monitoring risk. Bunge has identified accounts in legal collection processes and renegotiated amounts as classes of long-term receivables from farmers. Valuation allowances for accounts in legal collection processes are determined by Bunge on individual accounts based on the fair value of the collateral provided as security for the secured advance or credit sale. The fair value is determined using a combination of internal and external resources, including published information concerning Brazilian land values by region. For determination of the valuation allowances for renegotiated amounts, Bunge considers historical experience with the individual farmers, current weather and crop conditions, as well as the fair value of non-crop collateral.

        For both classes, a long-term receivable from farmers in Brazil is considered impaired, based on current information and events, if Bunge determines it to be probable that all amounts due under the original terms of the receivable will not be collected. Recognition of interest income on secured advances to farmers is suspended once the farmer defaults on the originally scheduled delivery of agricultural commodities as the collection of future income is determined to not be probable. No additional interest income is accrued from the point of default until ultimate recovery, where amounts collected are credited first against the receivable and then to any unrecognized interest income.

        Inventories—Readily marketable inventories are agricultural commodity inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. The majority of Bunge's readily marketable inventories are valued at fair value. These agricultural commodity inventories have quoted market prices in active markets, may be sold without significant further processing and have predictable and insignificant disposal costs. Changes in the fair values of merchandisable agricultural commodities inventories are recognized in earnings as a component of cost of goods sold. Also included in readily marketable inventories is sugar produced by our sugar mills in Brazil. These inventories are stated at the lower of average cost or market. They are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms.

        Inventories other than readily marketable inventories are principally stated at the lower of cost or market. Cost is determined using primarily the weighted-average cost method.

        Derivative Instruments and Hedging Activities—Bunge enters into derivative instruments that are related to its business and financial exposures as a multinational agricultural commodities and food company. Bunge uses derivative instruments to manage its exposure to movements associated with agricultural commodity prices, transportation costs, foreign currency exchange rates, interest rates and energy costs. Bunge's use of these instruments is generally intended to mitigate the exposure to market variables. See Note 15 of the notes to the consolidated financial statements.

        Bunge enters into interest rate swap agreements for the purpose of managing certain of its interest rate exposures. The interest rate swaps used by Bunge as hedging instruments have been recorded at fair value in the consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. Certain swap agreements are designated as fair value hedges. Additionally, the carrying amount of the associated debt is adjusted through earnings for changes in the fair value arising from changes in benchmark interest rates. Ineffectiveness is recognized to the extent that these adjustments do not offset. In addition, Bunge has entered into certain interest rate basis swap agreements that do not qualify for hedge accounting, and therefore such agreements have not been designated by Bunge as hedge instruments for accounting purposes.

F-13



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

        Bunge uses a combination of foreign exchange forward and option contracts in certain of its operations to mitigate the risk from exchange rate fluctuations in connection with anticipated sales denominated in foreign currencies. These derivative instruments are designated as cash flow hedges. The changes in the fair values on the contracts designated as cash flow hedges are recorded in accumulated other comprehensive income (loss), net of applicable taxes, and are reclassified into earnings when the anticipated sales occur. The ineffective portion of these hedges is recorded as foreign exchange gain or loss in the consolidated statements of income. Bunge also may use net investment hedges to partially offset the translation adjustments arising from the remeasurement of its investment in its Brazilian subsidiaries. Bunge records the effective portion of the gain or loss on the derivative instruments designated and qualifying as net investment hedges in accumulated other comprehensive income (loss), net of applicable taxes, as an offset to the foreign currency translation adjustment.

        Bunge generally uses exchange traded futures and options contracts to minimize the effects of changes in agricultural commodity prices on its agricultural commodity inventories, including produced sugar, future sugar production and forward purchase and sale contracts, but may also from time to time enter into OTC commodity transactions, including swaps, which are settled in cash at maturity or termination based on exchange-quoted futures prices. Changes in fair values of exchange traded futures contracts representing the unrealized gains and/or losses on these instruments are settled daily generally through Bunge's wholly-owned futures clearing subsidiary. Forward purchase and sale contracts are primarily settled through delivery of agricultural commodities. While Bunge considers these exchange traded futures and forward purchase and sale contracts to be effective economic hedges, Bunge does not designate or account for the majority of its commodity contracts as hedges. Changes in fair values of these contracts and related readily marketable agricultural commodity inventories are included in cost of goods sold in the consolidated statements of income. The forward contracts require performance of both Bunge and the contract counterparty in future periods. Contracts to purchase agricultural commodities generally relate to current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of agricultural commodities generally do not extend beyond one future crop cycle.

        In addition, Bunge uses exchange traded futures and options as economic hedges of portions of its forecasted oilseed processing production requirements, including forecasted purchases of soybeans and sales of soy commodity products. For hedges of U.S. production requirements, the changes in the market values of such futures contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged items and, therefore, these derivatives are designated as cash flow hedges. For economic hedges of production requirements outside the U.S., location differences between processing facilities and commodity exchanges generally cause these futures and options contracts to not meet the highly effective criterion for hedge accounting. Therefore, these instruments are not designated as hedges for accounting purposes.

        Bunge is exposed to loss in the event of the non-performance by counterparties to over-the-counter derivative instruments and forward purchase and sale contracts. Adjustments are made to fair values of derivative instruments on occasions when non-performance risk is determined to represent a significant input in fair value determination. These adjustments are based on Bunge's estimate of the potential loss in the event of counterparty non-performance.

        Bunge enters into time charter agreements for utilization of ocean freight vessels for the purpose of transporting agricultural commodities based on forecasted requirements. In addition, Bunge sells

F-14



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

through "relet agreements" the right to use these ocean freight vessels when excess freight capacity is available. The market price for ocean freight varies depending on the supply and demand for ocean freight vessels and global economic and trade conditions. Bunge's time charter agreements, which represent unrecognized firm commitments for utilization of ocean freight vessels, have terms ranging from two months to five years. Bunge uses derivative instruments to hedge both time charter agreements and other portions of its anticipated ocean freight costs. A portion of the ocean freight derivatives may be designated as fair value hedges of Bunge's time charter agreements.

        Bunge uses derivative instruments to manage its exposure to volatility in energy costs. Bunge's operations use substantial amounts of energy, including natural gas, coal, steam and fuel oil, including bunker fuel.

        Generally, derivative instruments are recorded at fair value in other current assets or other current liabilities in Bunge's consolidated balance sheets. Bunge assesses, both at the inception of a hedge and on an ongoing basis, whether the derivatives that are designated as hedges are highly effective in offsetting changes in the hedged items. The effective and ineffective portions of changes in fair values of derivative instruments designated as fair value hedges, along with the gains or losses on the related hedged items are recorded in earnings in the consolidated statements of income in the same caption as the hedged items. The effective portion of changes in fair values of derivative instruments that are designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) and are reclassified or amortized to earnings when the hedged cash flows are realized or when the hedge is no longer considered to be effective. In addition, Bunge may designate certain derivative instruments as net investment hedges to hedge the exposure associated with its equity investments in foreign operations. The effective portions of changes in the fair values of net investment hedges, which are evaluated based on spot rates, are recorded in the foreign exchange translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheets and the ineffective portions of such derivative instruments are recorded in foreign exchange gains or losses in the consolidated statements of income.

        Recoverable Taxes—Recoverable taxes include value-added taxes paid upon the acquisition of raw materials and taxable services and other transactional taxes which can be recovered in cash or as compensation against income taxes or other taxes owed by Bunge, primarily in Brazil. These recoverable tax payments are included in other current assets or other non-current assets based on their expected realization. In cases where Bunge determines that recovery is doubtful, recoverable taxes are reduced by allowances for the estimated unrecoverable amounts.

        Property, Plant and Equipment, Net—Property, plant and equipment, net is stated at cost less accumulated depreciation and depletion. Major improvements that extend the life, capacity or efficiency and improve the safety of the asset are capitalized, while minor maintenance and repairs are expensed as incurred. Costs related to legal obligations associated with the future retirement of assets are capitalized and depreciated over the lives of the underlying assets. Depreciation is computed based on

F-15



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

the straight line method over the estimated useful lives of the assets. Useful lives for property, plant and equipment are as follows:

 
  Years  

Buildings

    10-50  

Machinery and equipment

    7-20  

Furniture, fixtures and other

    3-20  

        Included in property, plant and equipment for 2010 and 2009 are biological assets, primarily sugarcane, that are stated at cost less accumulated depletion. The remaining useful lives of Bunge's biological assets range from 1 to 6 years. Depletion is calculated using the estimated units of production based on the remaining useful life of the growing sugarcane.

        Included in property, plant and equipment for 2009 are mining properties that are stated at cost less accumulated depletion. In May 2010, Bunge sold its fertilizer nutrients assets in Brazil, including its phosphate mining assets and its investment in Fosfertil S.A., a phosphate and nitrogen producer in Brazil (see Note 3 of the notes to the consolidated financial statements). The remaining useful lives of Bunge's mines operated in its fertilizer operations estimated through the date of Bunge's sale of its fertilizer nutrients assets ranged from 15 to 52 years. Bunge determined the estimated useful lives of its mines based on reserve estimates and forecasts of annual production. Depletion was calculated using the unit of production method based on proven and probable reserves.

        Bunge capitalizes interest on borrowings during the construction period of major capital projects. The capitalized interest is recorded as part of the asset to which it relates and is depreciated over the asset's estimated useful life.

        Goodwill and Other Intangible Assets—Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in a business acquisition. Goodwill is not amortized, but is tested annually for impairment in the fourth quarter of Bunge's fiscal year or whenever there are indicators that the carrying value of the assets may not be fully recoverable. Bunge uses a two step process to test goodwill at the reporting unit level. The first step involves a comparison of the estimated fair value of each reporting unit with its carrying value. Fair value is estimated using discounted cash flows of the reporting unit based on planned growth rates and estimates of discount rates. If the carrying value exceeds the fair value, the second step of the process is necessary. The second step measures the difference between the carrying value and the implied fair value of goodwill. If the estimates or related projections of the fair value of reporting units change in the future, we may be required to record impairment charges.

        Bunge's reporting segments in which it has recorded goodwill are agribusiness, sugar and bioenergy, edible oil products, milling products and fertilizer (see Note 7 of the notes to the consolidated financial statements). Impairment losses are generally included in cost of goods sold in the consolidated statements of income, unless the goodwill is associated with acquired marketing or brand assets, in which case impairment losses are included in selling, general and administrative expenses in the consolidated statements of income.

        Other intangible assets that have finite useful lives include brands, trademarks and other assets which are recorded at fair value at the date of acquisition. Other intangible assets with indefinite lives are not amortized but are tested annually for impairment in the fourth quarter of Bunge's fiscal year or whenever there are indicators that the carrying values of the assets may not be fully recoverable. To

F-16



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

test indefinite-lived intangible assets for impairment, Bunge compares the fair values of indefinite-lived intangible assets with their carrying values. The fair values of indefinite-lived intangible assets are determined using discounted cash flows based on planned growth rates and estimates of discount rates. If its carrying value exceeds fair value, an indefinite-lived intangible asset is considered impaired and is reduced to fair value. If the estimates or related projections of the fair values of indefinite-lived intangible assets change in the future, we may be required to record impairment charges. Definite-lived intangible assets are amortized on a straight line basis over their estimated useful lives, ranging from 2 to 50 years. See Note 8 of the notes to the consolidated financial statements.

        Impairment of Property, Plant and Equipment and Other Finite-Lived Intangible Assets —Bunge reviews its property, plant and equipment and other finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that carrying amounts of an asset may not be recoverable. In performing the review for recoverability, Bunge bases its evaluation on such indicators as the nature, future economic benefits and geographic locations of the assets, historical or future profitability measures and other external market conditions. If these indicators result in the expected non-recoverability of the carrying amount of an asset or asset group, Bunge determines whether impairment has occurred by analyzing estimates of undiscounted future cash flows. If the estimates of undiscounted future cash flows during the expected useful life of the asset are less than the carrying value of the asset, a loss is recognized for the difference between the carrying value of the asset and its estimated fair value, measured by the present value of the estimated future cash flows or by third-party appraisal. Bunge records impairments related to property, plant and equipment and other finite-lived intangible assets used in the processing of its products in cost of goods sold in its consolidated statements of income. The impairment of marketing or brand assets is recognized in selling, general and administrative expenses in the consolidated statements of income. See Note 9 of the notes to the consolidated financial statements.

        Property, plant and equipment and other finite-lived intangible assets to be sold or otherwise disposed of are reported at the lower of carrying amount or fair value less cost to sell.

        Impairment of Investments in Affiliates—Bunge continually reviews its investments in affiliates to determine whether a decline in fair value is other than temporary. Bunge considers various factors in determining whether to recognize an impairment charge, including the length of time that the fair value of the investment is expected to be below its carrying value, the financial condition, operating performance and near-term prospects of the affiliate, which include general market conditions specific to the affiliate or the industry in which it operates, and Bunge's intent and ability to hold the investment for a period of time sufficient to allow for the recovery in fair value. Impairment charges for investments in affiliates are included as a reduction in share of the equity in earnings of affiliates in the consolidated statements of income.

        Stock-Based Compensation—Bunge maintains equity incentive plans for its employees and non-employee directors, which are described in Note 25 of the notes to the consolidated financial statements. Bunge accounts for stock-based compensation using the modified prospective transition method. Under the modified prospective transition method, compensation cost recognized for the years ended December 31, 2010, 2009 and 2008 includes (1) compensation cost for all share-based awards granted prior to, but not yet vested as of, January 1, 2006, based on the grant date fair value in accordance with a FASB issued standard that provides guidance for recognizing transactions under share-based payment arrangements with employees, and (2) compensation cost for all share-based

F-17



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

awards granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of the FASB standard.

        Income Taxes—Income tax expenses and benefits are recognized based on the tax laws and regulations in the jurisdictions in which Bunge's subsidiaries operate. Under Bermuda law, Bunge is not required to pay taxes in Bermuda on either income or capital gains. The provision for income taxes includes income taxes currently payable and deferred income taxes arising as a result of temporary differences between the carrying amounts of existing assets and liabilities in Bunge's financial statements and their respective tax basis. Deferred tax assets are reduced by valuation allowances if it is determined that it is more likely than not that the deferred tax asset will not be realized. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expenses in the consolidated statements of income.

        The calculation of the tax liabilities involves management judgments concerning uncertainties in the application of complex tax regulations in the many jurisdictions in which Bunge operates and involves consideration of potential liabilities for potential tax audit issues in those many jurisdictions based on estimates of whether it is more likely than not those additional taxes will be due. Investment tax credits are recorded in income tax expenses in the period in which such credits are granted.

        Revenue Recognition—Sales of agricultural commodities, fertilizers and other products are recognized when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered, title to the product and risk of loss transfer to the customer, which is dependent on the agreed upon sales terms with the customer, and when collection of the sale price is reasonably assured. Sales terms provide for passage of title either at the time and point of shipment or at the time and point of delivery of the product being sold. Net sales consist of gross sales less discounts related to promotional programs and sales taxes. Interest income on secured advances to suppliers is included in net sales due to its operational nature (see Note 5 of the notes to the consolidated financial statements). Sales of a primarily financial nature, such as trade structured financing activities, are recorded net, and margins earned on such transactions are included in net sales. Shipping and handling charges billed to customers are included in net sales and related costs are included in cost of goods sold.

        Research and Development—Research and development costs are expensed as incurred. Research and development expenses were $24 million, $26 million and $35 million in 2010, 2009 and 2008, respectively.

        Adoption of New Accounting PronouncementsAmendment to Consolidation—In June 2009, the FASB issued a standard that requires an enterprise to (1) determine whether an entity is a variable interest entity (VIE), (2) determine whether the enterprise has a controlling financial interest indicating it is a primary beneficiary of a VIE, which would result in the enterprise being required to consolidate the VIE in its financial statements, and (3) provide enhanced disclosures about the enterprise's involvement in VIEs. As a result of the adoption of this standard on January 1, 2010, Bunge consolidated an agribusiness joint venture (see Note 23 of the notes to the consolidated financial statements).

        Accounting for Transfers of Financial Assets—In June 2009, the FASB issued a standard that amended a previously issued standard to improve the information reported in financial statements related to the transfer of financial assets and the effects of the transfers of such assets on the financial

F-18



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Significant Accounting Policies (Continued)

position, results from operations and cash flows of the transferor and a transferor's continuing involvement, if any, with transferred financial assets. In addition, the amendment limits the circumstances in which a financial asset or a portion of a financial asset should be derecognized in the financial statements of the transferor when the transferor has not transferred the entire original financial asset. Upon adoption of this standard on January 1, 2010, all trade accounts receivables sold after that date under Bunge's accounts receivable securitization programs (the "securitization programs") are included in trade accounts receivable and the amounts outstanding under the securitization programs are accounted for as secured borrowings and are reflected as short-term debt on Bunge's consolidated balance sheet. As a result of this adoption, Bunge has reduced its utilization of these programs and either terminated or allowed certain of these programs to expire. The adoption of this standard did not have a material impact on Bunge's financial position, results from operations or cash flows. See Note 18 of the notes to the consolidated financial statements.

        Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses —In July 2010, the FASB issued a standard that amended a previously issued standard requiring an entity to include additional disaggregated disclosures in their financial statements about their financing receivables, including credit risk disclosures and the allowance for credit losses. Entities with financing receivables are required to disclose a rollforward of the allowance for credit losses, certain credit quality information, impaired loan information, modification information, and past due information. Trade receivables with maturities of less than one year are excluded from the scope of the new disclosures. The adoption of this standard did not have a material impact on Bunge's financial position, results from operations or cash flows, but resulted in expanded disclosures (see Notes 5 and 11 of the notes to the consolidated financial statements).

2. Business Acquisitions

        Moema Acquisition—In the first quarter of 2010, Bunge acquired a 100% interest in five Brazilian sugarcane mills in São Paulo and Minas Gerais states through the acquisition of Usina Moema Particpacãoes S.A. (Moema Par) and remaining interests in four mills that were not wholly-owned by Moema Par. Bunge collectively refers to the acquired entities as Moema. The purchase consideration for the Moema acquisition was as follows:

(US$ in millions)
   
 

Fair value of 10,315,400 Bunge Limited common shares issued

  $ 600  

Cash paid

    52  
       

Total purchase price

  $ 652  
       

        Bunge issued 9,718,632 of its common shares with a fair value of $570 million and paid 97 million Brazilian reais in cash, which equated to approximately $51 million, at the closing of the transaction. The final purchase price was subject to a post-closing adjustment based on working capital and net debt of the acquired companies at closing under Brazilian generally accepted accounting principles. During the second and third quarters of 2010, Bunge issued 596,768 of its common shares, with a fair value of $30 million and paid 1 million Brazilian reais in cash, which equated to approximately $1 million, in connection with the finalization of all post-closing adjustments. Acquisition related expenses of $11 million associated with the Moema acquisition were included in selling, general and administrative expenses in the consolidated statement of income for the year ended December 31, 2010.

F-19



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Business Acquisitions (Continued)

        The table below summarizes Bunge's assessment of the fair values of assets and liabilities acquired and resulting determination of goodwill:

(US$ in millions)
  December 31, 2010  

Assets acquired:

       

Cash

  $ 3  

Inventories

    187  

Other current assets

    69  

Property, plant and equipment

    657  

Other intangible assets

    44  

Other non-current assets

    127  
       

Total assets

    1,087  
       

Liabilities acquired:

       

Short-term debt

    (378 )

Other current liabilities

    (286 )

Long-term debt

    (177 )

Other non-current liabilities

    (34 )
       

Total liabilities

    (875 )
       

Goodwill

    440  
       

Total purchase price

  $ 652  
       

Intangible assets consist of the following:

(US$ in millions)
   
  Useful Life

Land lease agreements

  $ 43   7 years

Other

    1   2-20 years
         

Total

  $ 44    
         

        The fair value assigned to intangible assets associated with land lease agreements for the production of sugarcane was determined using the income approach. The fair value of the other intangibles was primarily determined using the market approach. The intangible assets have no expected residual value at the end of their useful lives and are subject to amortization on a straight-line basis. The fair values of tangible assets were derived using a combination of the income approach, the market approach and the cost approach as considered appropriate for the specific assets being valued. None of the acquired assets or liabilities will be measured at fair value on a recurring basis in periods subsequent to the initial recognition.

        Moema is a party to a number of claims and lawsuits, primarily civil, labor and environmental claims arising out of the normal course of business. Included in other non-current liabilities is $14 million related to Moema's probable contingencies.

        Moema is included in the sugar and bioenergy segment and the goodwill from this acquisition has been assigned to that segment. The acquisition is expected to complement Bunge's existing sugarcane

F-20



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Business Acquisitions (Continued)

milling and trading and merchandising activities. The acquisition increases Bunge's presence in the sugar and sugarcane-based ethanol industry in Brazil, substantially increasing Bunge's annual sugarcane crushing capacity. The acquired mills form a cluster within a highly productive region for sugarcane in Brazil. The Moema management team's experience in sugarcane agricultural and industrial processes is expected to complement Bunge's expertise in trade and financial risk management. Bunge also expects synergies with its fertilizer business and logistics efficiencies from the acquisition. Goodwill of $489 million is deductible for tax purposes. In addition, the tax deductible goodwill exceeds the recorded goodwill by approximately $95 million resulting in total tax deductible goodwill of approximately $584 million. As a result, a long-term deferred tax asset of $49 million relating to the excess tax deductible goodwill and a corresponding reduction in goodwill have been recorded in the purchase price allocation.

        Supplemental pro forma financial information is not presented for the year ended December 31, 2009, because it is not practical to provide this information as Moema historically did not report results under U.S. GAAP.

        Included in the consolidated statement of income for the year ended December 31, 2010 are Moema's net sales and losses from operations before income taxes of $496 million and $22 million, respectively.

        Argentina Fertilizer Acquisition—In the first quarter of 2010, Bunge acquired the Argentine fertilizer business of Petrobras Energía S.A., a subsidiary of Petroleo Brasileiro S.A. (Petrobras), for approximately $80 million. The acquired business is included in Bunge's fertilizer segment. This acquisition expands Bunge's presence in the Argentine retail fertilizer market, allowing it to further develop synergies with its grain origination operations through the sale of products to farmers from whom it may purchase commodities. Based on the fair values of assets and liabilities acquired, $66 million of the purchase price has been allocated to property, plant and equipment, $6 million to other current assets, $7 million to other intangible assets, primarily a non-compete agreement, and $1 million to goodwill.

        Other—In the third quarter of 2010, Bunge completed the acquisitions of two oilseed processing facilities in Turkey in separate transactions for a total purchase price of approximately $24 million, consisting of $5 million in cash and $19 million of other prepayments related to existing contractual arrangements. The preliminary purchase price allocations for the combined transactions included $20 million allocated to property, plant and equipment and $4 million to goodwill.

        In the fourth quarter of 2010, Bunge acquired the North American rice milling business of Pacific International Rice Mills, LLC (PIRM) in its milling products segment for $43 million in cash. PIRM produces bulk and packaged milled rice for domestic and export customers. The acquisition supports Bunge's strategy of expanding into adjacent value chains within the milling products segment. With the preliminary determination of the fair values of acquired assets and liabilities, $17 million of the purchase price has been allocated to property, plant and equipment, $33 million to current assets and $7 million to current liabilities.

        In the fourth quarter of 2010, Bunge acquired the Hungarian margarine businesses of Royal Brinkers in its edible oil products segment for 5 million Euros in cash which equated to approximately $7 million. With the preliminary determination of the fair values of assets and liabilities acquired,

F-21



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Business Acquisitions (Continued)

$2 million of the purchase price has been allocated to property, plant and equipment, $1 million to other intangible assets and $4 million to goodwill.

        Also in the fourth quarter of 2010, Bunge completed the acquisition of several grain elevators in the U.S. in its agribusiness segment in two separate transactions for a total purchase price of $64 million in cash. The preliminary purchase price allocations of the combined transactions included $30 million allocated to property, plant and equipment, $54 million to current assets, $25 million to current liabilities and $5 million to goodwill.

        In 2009, Bunge acquired the European margarine businesses of Raisio plc in its edible oil products segment for a purchase price of 81 million Euros in cash which equated to approximately $115 million, net of $5 million of cash received. Upon completion in 2010 of the determination of the fair values of assets and liabilities acquired, $38 million was recorded as property, plant and equipment, $26 million as other intangible assets, $46 million as goodwill, $9 million as net working capital and $(4) million as deferred tax liabilities. In addition, in 2009 Bunge's edible oil products segment acquired the assets of a U.S. vegetable shortening business for $11 million in cash. Upon completion of the determination of the fair values of assets and liabilities acquired, $8 million was recorded as property, plant and equipment, $1 million as intangible assets and $2 million as current assets.

        In 2009, Bunge finalized purchase price allocations related to the 2008 acquisitions of a sugarcane mill and a wheat milling business in Brazil. The purchase price for the sugarcane mill acquisition was $54 million, consisting of $28 million in cash, an $8 million short-term note payable and $18 million of assumed long-term debt. Bunge had preliminarily recognized $28 million of goodwill in its agribusiness segment as a result of this transaction. Upon the completion of the purchase price allocation, goodwill was reduced by $12 million with $12 million reallocated to property, plant and equipment, $6 million to intangible assets and $(6) million to deferred tax liabilities. The purchase price for the wheat milling business was $17 million in cash. Bunge had preliminarily recognized $14 million of goodwill in its milling products segment as a result of this transaction. Upon the 2009 completion of the purchase price allocation, this $14 million of goodwill was reallocated with $2 million allocated to property, plant and equipment, $19 million to other intangible assets and $7 million to deferred tax liabilities.

        Bunge also completed purchase price allocations during 2009 for the 2008 acquisition of a 50% interest in the owner/operator of a port facility in Vietnam through acquisition of 100% of the company which owns the 50% interest. Bunge determined that its total variable interests in the owner/operator of the port facility, including its ownership share, port management responsibilities and an operational throughput agreement, require consolidation of the owner/operator in its consolidated financial statements under the provisions of a FASB issued standard that provides guidance on entities subject to consolidation. The purchase price was $14 million. Based on the 2008 preliminary purchase price allocation, Bunge recorded $6 million of other intangible assets in its agribusiness segment. Upon the finalization of the purchase price allocation in 2009, $7 million was allocated to other intangible assets and $1 million to deferred tax liabilities.

        Pro forma financial information is not presented as these acquisitions individually and in the aggregate are not material.

F-22



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Business Divestitures

        In January 2010, Bunge and two of its wholly-owned subsidiaries entered into a definitive agreement (as amended, the Agreement) with Vale S.A., a Brazil-based global mining company (Vale), and an affiliate of Vale, pursuant to which Vale acquired Bunge's fertilizer nutrients assets in Brazil, including its interest in Fertilizantes Fosfatados S.A. (Fosfertil) when the transaction closed on May 27, 2010. Final settlement of the post-closing adjustment as contemplated in the Agreement occurred on August 13, 2010. Bunge received total cash proceeds of $3,914 million and recognized a gain of $2,440 million ($1,901 million net of tax) in its fertilizer segment related to this transaction. Included in the calculation of the gain was $152 million of transaction costs incurred in connection with the divestiture. Total income tax expense associated with the transaction was $539 million, of which approximately $280 million was paid during the year ended December 31, 2010 and approximately $259 million was offset by deferred tax assets and other tax credits and, therefore, did not result in cash tax payments.

        Approximately $144 million of transaction costs and $280 million of withholding taxes are included as a component of cash used for operating activities in Bunge's consolidated statements of cash flows for the year ended December 31, 2010. Gross proceeds of $3,914 million and cash disposed of $106 million related to this transaction are included as a component of cash provided by investing activities in Bunge's consolidated statement of cash flows for the year ended December 31, 2010.

        Assets and liabilities disposed of as part of this transaction included approximately $1,516 million of property, plant and equipment, net, related to fertilizer mining properties and other plants and equipment of the fertilizer nutrients activities.

4. Inventories

        Inventories consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Agribusiness (1)

  $ 5,137   $ 3,535  

Sugar and Bioenergy (2)

    359     89  

Edible oils (3)

    460     371  

Milling (3)

    163     118  

Fertilizer (4)

    516     749  
           

Total

  $ 6,635   $ 4,862  
           

(1)
Includes readily marketable agricultural commodity inventories fair value of $4,540 million and $3,197 million at December 31, 2010 and 2009, respectively. All other agribusiness segment inventories are carried at lower of cost or market.

(2)
Includes readily marketable sugar inventories of $86 million and $21 million at December 31, 2010 and 2009, respectively. Of these sugar inventories, $66 million and $21 million are carried at fair value at December 31, 2010 and 2009, respectively, in Bunge's trading and merchandising business. Sugar and ethanol inventories in Bunge's industrial production business are carried at lower of cost or market.

F-23



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. Inventories (Continued)

(3)
Edible oil products and milling products inventories are generally carried at lower of cost or market, with the exception of readily marketable inventories of bulk soybean oil and corn, which are carried at fair value in the aggregate amount of $225 million and $162 million at December 31, 2010 and 2009, respectively.

(4)
Fertilizer inventories are carried at lower of cost or market.

5. Other Current Assets

        Other current assets consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Prepaid commodity purchase contracts (1)

  $ 267   $ 110  

Secured advances to suppliers (2)

    245     275  

Unrealized gains on derivative contracts

    2,619     1,202  

Recoverable taxes—current

    500     680  

Margin deposits (3)

    926     530  

Marketable securities

    39     15  

Other

    872     687  
           

Total

  $ 5,468   $ 3,499  
           

(1)
Prepaid commodity purchase contracts represent advance payments against fixed priced contracts for future delivery of specified quantities of agricultural commodities. These contracts are recorded at fair value based on prices of the underlying agricultural commodities.

(2)
Bunge provides cash advances to suppliers, primarily Brazilian farmers of soybeans and other agricultural commodities, to finance a portion of the suppliers' production costs. These advances are strictly financial in nature. Bunge does not bear any of the costs or risks associated with the related growing crops. The advances are largely collateralized by the farmer's crop, land and physical assets, carry a local market interest rate and settle when the farmer's crop is harvested and sold. The secured advances to farmers are reported net of allowances of $3 million at December 31, 2010 and 2009. Changes in the allowance for 2010 included an increase of $1 million for additional bad debt provisions and a reduction in the allowance for recoveries of $1 million. Changes in the allowance for 2009 included an increase of $1 million for additional bad debt provisions and a reduction as the result of foreign exchange adjustments of $1 million.


Interest earned on secured advances to suppliers of $25 million, $41 million and $48 million for 2010, 2009, and 2008, respectively, is included in net sales in the consolidated statements of income.

(3)
Margin deposits include U.S. treasury securities at fair value and cash.

F-24



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. Property, Plant and Equipment

        Property, plant and equipment consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Land

  $ 483   $ 347  

Mining properties

        301  

Biological assets

    313     103  

Buildings

    1,743     2,068  

Machinery and equipment

    4,270     4,681  

Furniture, fixtures and other

    488     468  
           

    7,297     7,968  

Less: accumulated depreciation and depletion

    (2,983 )   (3,632 )

Plus: construction in progress

    998     1,011  
           

Total

  $ 5,312   $ 5,347  
           

        Bunge capitalized expenditures of $1,117 million, $1,001 million and $1,003 million in 2010, 2009 and 2008, respectively. In addition, included in these capitalized expenditures was capitalized interest on construction in progress of $21 million, $26 million and $18 million in 2010, 2009 and 2008, respectively and non-cash asset acquisitions of $11 million in 2010. Depreciation and depletion expense was $420 million, $427 million and $428 million in 2010, 2009 and 2008, respectively. Certain property, plant and equipment amounts were significantly impacted by acquisition and divestiture activity during 2010 (see Notes 2 and 3 of the notes to the consolidated financial statements).

F-25



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. Goodwill

        Bunge performed its annual impairment test in the fourth quarters of 2010, 2009 and 2008. For the year ended December 31, 2010 there was an impairment of $3 million in the milling products segment (see Note 9 of the notes to the consolidated financial statements). There were no impairments of goodwill for the years ended December 31, 2009 and 2008.

        The changes in the carrying amount of goodwill by segment at December 31, 2010 and 2009 are as follows:

(US$ in millions)
  Agribusiness   Sugar and
Bioenergy
(1)
  Edible Oil
Products
  Milling
Products
  Fertilizer   Total  

Balance, January 1, 2009

  $ 164   $ 105   $ 37   $ 19   $   $ 325  

Goodwill acquired (2)

            50             50  

Reallocation of acquired goodwill (2) (3)

        (12 )   (7 )   (14 )       (33 )

Tax benefit on goodwill amortization (4)

    (6 )                   (6 )

Foreign exchange translation

    46     37     3     5         91  
                           

Balance, December 31, 2009

    204     130     83     10         427  

Goodwill acquired (2)

    9     440     4         1     454  

Reallocation of acquired goodwill (2)

            (4 )           (4 )

Impairment

                (3 )       (3 )

Tax benefit on goodwill amortization (4)

    (6 )       (1 )           (7 )

Foreign exchange translation

    8     61     (2 )           67  
                           

Balance, December 31, 2010

  $ 215   $ 631   $ 80   $ 7   $ 1   $ 934  
                           

(1)
See Note 1 and 2 of the notes to the consolidated financial statements.

(2)
See Note 2 of the notes to the consolidated financial statements.

(3)
In 2009, Bunge was released from an obligation of approximately $7 million recorded as part of the purchase accounting for edible oil products assets acquired in 2008. The release from this obligation was recorded in 2009 as a reduction of goodwill in the edible oil products segment.

(4)
Bunge's Brazilian subsidiary's tax deductible goodwill is in excess of its book goodwill. For financial reporting purposes, the tax benefits attributable to the excess tax goodwill are first used to reduce associated goodwill and then other intangible assets to zero, prior to recognizing any income tax benefit in the consolidated statements of income.

F-26



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. Other Intangible Assets

        Intangible assets consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Trademarks/brands, finite-lived

  $ 127   $ 130  

Licenses

    11     12  

Other

    115     72  
           

    253     214  

Less accumulated amortization:

             

Trademarks/brands (1)

    (54 )   (47 )

Licenses

    (3 )   (2 )

Other

    (39 )   (23 )
           

    (96 )   (72 )

Trademarks/brands, indefinite-lived

    29     28  
           

Intangible assets, net of accumulated amortization

  $ 186   $ 170  
           

(1)
Bunge's Brazilian subsidiary's tax deductible goodwill in the agribusiness segment is in excess of its book goodwill. For financial reporting purposes, for other intangible assets acquired prior to 2009, before recognizing any income tax benefit of tax deductible goodwill in excess of its book goodwill in the consolidated statements of income and after the related book goodwill has been reduced to zero, any such remaining tax deductible goodwill in excess of its book goodwill is used to reduce other intangible assets to zero.

        In 2010, Bunge assigned values totaling $52 million to other intangible assets acquired in business acquisitions. These assets primarily relate to land lease agreements acquired as part of the Moema acquisition (see Note 2 of the notes to the consolidated financial statements). These amounts were allocated $44 million, $7 million and $1 million to the sugar and bioenergy, fertilizer and edible oil products segments, respectively. Finite lives of these assets range from 2 to 20 years. In addition, $9 million of other intangible assets, net have been disposed of as part of the sale of the Brazilian fertilizer nutrients assets (see Note 3 of the notes to the consolidated financial statements) and $9 million of other intangible assets have been impaired (see Note 9 of the notes to the consolidated financial statements).

        Bunge performed its annual impairment test in the fourth quarters of 2010, 2009 and 2008. There were no impairment of indefinite-lived intangible assets for the years ended December 31, 2010, 2009 and 2008.

        The aggregate amortization expense was $23 million, $16 million and $11 million for the years ended December 31, 2010, 2009 and 2008, respectively. The annual estimated aggregate amortization expense for 2011 is approximately $23 million with approximately $22 million estimated per year for 2012 through 2015.

        In 2009, Bunge acquired assets including $25 million of trademarks and brands, $1 million in licenses and $5 million of other intangible assets in its edible oils products segment and assigned lives to these assets ranging from 3 to 20 years. In addition, $5 million of licenses acquired in 2009 in its agribusiness segment were assigned a 50-year life. Also, as discussed in Note 2 of the notes to the consolidated financial statements, Bunge completed purchase price allocations in 2009 related to certain

F-27



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. Other Intangible Assets (Continued)

2008 acquisitions, which resulted in the recording of $3 million and $4 million to licenses and other intangible assets, respectively, in the agribusiness segment and $19 million to other intangible assets in the milling products segment with lives ranging from 5 to 40 years.

9. Impairment and Restructuring Charges

        Impairment—In 2010, Bunge recorded pretax non-cash impairment charges of $77 million in cost of goods sold, which consisted of $42 million related to the write-down of a European oilseed processing and refining facility that commenced operations in 2008 but has not reached its expected capacity or profitability, $12 million related to the closure of an older, less efficient oilseed processing facility in the United States and a co-located corn oil extraction line, $9 million related to the closure of processing and refining facilities in Europe with restructuring of Bunge's European footprint, $9 million related to a long-term supply contract acquired in connection with a wheat mill acquisition in Brazil, $3 million related to the write-down of an older and less efficient Brazilian distribution center and $2 million related to the write-down of an administrative office in Brazil. These pretax impairment charges were allocated $35 million to the agribusiness segment, $28 million to the edible oil products segment and $14 million to the milling products segment. The fair values of the processing facilities and distribution center were determined utilizing projected discounted cash flows for these facilities. The fair values of the office facility and the long term supply contract were determined using third-party valuations.

        In 2009, Bunge recorded pretax non-cash impairment charges of $5 million in cost of goods sold in its agribusiness segment, relating to the permanent closure of a smaller, older and less efficient oilseed processing and refining facility in Brazil. In addition, Bunge recorded $26 million of pretax non-cash impairment charges in selling, general and administrative expenses in its agribusiness segment, relating to the write-down of certain real estate assets in South America and an equity investment in a U.S. biodiesel production and marketing company. The fair values of the real estate assets were determined by using third-party valuations. The fair value of the U.S. biodiesel investment was determined utilizing projected cash flows of the biodiesel production and marketing company.

        In 2008, Bunge recorded pretax non-cash impairment charges of $16 million and $2 million in cost of goods sold in its agribusiness and edible oil products segments, respectively, relating to the permanent closures of a smaller, older and less efficient oilseed processing and refining facility in Europe and a smaller, older and less efficient oilseed processing plant in the United States. The fair values of land and equipment at these facilities were determined by using third-party valuations.

        Restructuring—In 2010, Bunge recorded pretax restructuring charges of $19 million in cost of goods sold, which related primarily to the oilseed processing facility closure in the United States, the consolidation of administrative functions in Brazil and restructuring of certain European operations. These restructuring charges were allocated $10 million to the agribusiness segment, $1 million to the sugar and bioenergy segment, $4 million to the edible oil products segment and $4 million to the fertilizer segment. In addition, restructuring charges consisting primarily of termination benefits related to the consolidation of Bunge's Brazilian operations and the closure of certain European oilseed processing and refining facilities were recorded as selling, general and administrative expenses with $3 million, $3 million, $3 million and $1 million allocated to the agribusiness, sugar and bioenergy, edible oil products, and milling products segments, respectively.

F-28



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. Impairment and Restructuring Charges (Continued)

        Termination benefit costs in the agribusiness segment for the year ended December 31, 2010 related to benefit obligations associated with approximately 90 employees related to the closure of the U.S. oilseed processing facility and the consolidation of our operations in Brazil. This consolidation of Brazilian operations also impacted the sugar and bioenergy, fertilizer, edible oil products and milling products segments. Termination benefit costs in our edible oil products segment related to 411 employees in connection with the reorganization of certain of our operations in Europe. Bunge has accrued $11 million in its consolidated balance sheets related to the Brazilian restructuring as of December 31, 2010. Substantially all of these costs will be paid in 2011 under severance plans that were defined and communicated in 2010. Funding for the payments will be provided by cash flows from operations.

        In 2009, Bunge recorded pretax restructuring charges of $16 million in cost of goods sold related to its European and Brazilian businesses. These charges consisted of termination benefit costs of $10 million, $3 million and $3 million in the agribusiness, edible oil products and fertilizer segments, respectively. In the agribusiness segment, termination costs related to benefit obligations associated with approximately 48 plant employees related to the closure of a European oilseed processing facility and approximately 47 employees related to the consolidation of our administrative activities in Brazil. In the edible oil products segment, such charges related to benefits due to approximately 405 employees as a result of the reorganization of certain of our operations in Europe and approximately 24 employees as a result of the consolidation of our administrative activities in Brazil. In the fertilizer segment, such charges relate to benefits due to approximately 96 employees related to the consolidation of our administrative activities in Brazil. Approximately $11 million of these costs were paid in 2010 under severance plans that were defined and communicated in 2009. Funding for the payments was provided by cash flows from operations.

        In 2008, Bunge recorded pretax restructuring charges of $8 million in cost of goods sold, related to its European agribusiness and edible oil products segments. These charges consisted of termination benefit costs of $4 million and $1 million in the agribusiness and edible oil products segments, respectively, and other facility closure costs of $3 million in the agribusiness segment. In the agribusiness segment, termination costs related to benefit obligations associated with approximately 21 plant employees and other facility closure expenses. The majority of these costs were paid in 2009 based on decisions that were made and severance plans that were defined and communicated in 2008. Funding for the payments was provided by cash flows from operations.

        The following table summarizes assets measured at fair value (all of which utilized Level 3 inputs) on a nonrecurring basis subsequent to initial recognition. For additional information on Level 1, 2 and 3 inputs see Note 15 of the notes to the condensed consolidated financial statements.

 
   
  Fair Value Measurements Using    
 
 
  Year Ended
December 31, 2010
  Impairment Losses
Year Ended
December 31, 2010
 
(US$ in millions)
  Level 1   Level 2   Level 3  

Property, plant and equipment

  $ 96   $   $   $ 96   $ (65 )
                       

Other Intangible Assets

  $ 3   $   $   $ 3   $ (9 )
                       

Goodwill

  $   $   $   $   $ (3 )
                       

F-29



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10. Investments in Affiliates

        Bunge participates in several unconsolidated joint ventures and other investments accounted for on the equity method. The most significant of these at December 31, 2010 are described below. Bunge allocates equity in earnings of affiliates to its reporting segments.

Agribusiness

        Terminal 6 S.A. and Terminal 6 Industrial S.A.    Bunge has a joint venture in Argentina with Aceitera General Deheza S.A. (AGD), for the operation of the Terminal 6 port facility located in the Santa Fe province of Argentina. Bunge is also a party to a second joint venture with AGD that operates a crushing facility located adjacent to the Terminal 6 port facility. Bunge owns 40% and 50%, respectively, of these joint ventures. In 2010, Ecofuel S.A., of which Bunge is a 50% owner of this company along with AGD in Argentina, merged with Terminal 6 Industrial S.A. Ecofuel manufactured biodiesel products in the Santa Fe province of Argentina.

        The Solae Company.    Solae is a joint venture with E.I. du Pont de Nemours and Company. Solae is engaged in the global production and distribution of soy-based ingredients, including soy proteins and lecithins. Bunge has a 28.06% interest in Solae.

        Diester Industries International S.A.S. (DII).    Bunge is a party to a joint venture with Diester Industries, a subsidiary of Sofiproteol, specializing in the production and marketing of biodiesel in Europe. Bunge has a 40% interest in DII.

Sugar and Bioenergy

        Bunge-Ergon Vicksburg, LLC (BEV).    Bunge is a 50% owner of BEV along with Ergon Ethanol, Inc. BEV operates an ethanol plant at the Port of Vicksburg, Mississippi, where Bunge operates grain elevator facilities.

        Southwest Iowa Renewable Energy, LLC (SIRE).    Bunge is a 26% owner of SIRE. The other owners are primarily agricultural producers located in Southwest Iowa. SIRE operates an ethanol plant near Bunge's oilseed processing facility in Council Bluffs, Iowa.

Food Products

        Harinera La Espiga, S.A. de C.V.    Bunge is a party to this joint venture in Mexico with Grupo Neva, S.A. de C.V. and Cerrollera, S.A. de C.V. The joint venture has wheat milling and bakery dry mix operations in Mexico. Bunge has a 31.5% interest in the joint venture.

Fertilizers

        Bunge Maroc Phosphore S.A.    Bunge has a 50% interest in this joint venture, to produce fertilizers in Morocco with Office Cherifien Des Phosphates (OCP). The joint venture was formed to produce fertilizer products in Morocco for shipment to Brazil, Argentina and certain other markets in Latin America. In 2008, Bunge contributed $61 million to this joint venture.

F-30



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10. Investments in Affiliates (Continued)

        Summarized combined financial information reported for all equity method affiliates and a summary of the amounts recorded in Bunge's consolidated financial statements as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 follows:

 
  December 31,  
(US$ in millions)
  2010   2009  

Combined financial position (unaudited):

             

Current assets

  $ 1,269   $ 1,268  

Non-current assets

    2,004     2,238  
           

Total assets

  $ 3,273   $ 3,506  
           

Current liabilities

    778     933  

Non-current liabilities

    600     640  

Stockholders' equity

    1,895     1,933  
           

Total liabilities and stockholders' equity

  $ 3,273   $ 3,506  
           

Amounts recorded by Bunge:

             

Investments (1)

  $ 609   $ 622  

 

(US$ in millions)
  2010   2009   2008  

Combined results of operations (unaudited):

                   

Revenues

  $ 2,902   $ 5,407   $ 6,063  

Income before income tax and noncontrolling interest

    82     94     92  

Net income

    66     82     85  

Amounts recorded by Bunge:

                   

Equity in earnings of affiliates (2)

    27     80     34  

(1)
Approximately $5 million and $9 million of this amount at December 31, 2010 and 2009, respectively, related to Bunge's investment in Bunge-Ergon Vicksburg, LLC. At December 31, 2010 and 2009, Bunge's investment exceeded its underlying equity in the net assets of BEV. Straight line amortization of this excess against equity in earnings of affiliates was $1 million and $4 million, respectively. Amortization of the excess has been attributed to fixed assets of Bunge-Ergon Vicksburg, LLC, which were being amortized over 15 years. At December 31, 2010 and 2009, Bunge's investment of $367 million and $360 million, respectively, equaled its underlying equity in the net assets of Solae.

(2)
In 2009, equity in earnings of affiliates includes a $66 million, (net of tax of $3 million), gain on the sale of Saipol. In 2008, Bunge's equity in earnings of Solae included impairment and restructuring charges of $5 million, net of a tax benefit of $2 million.

F-31



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. Other Non-Current Assets:

        Other non-current assets consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Recoverable taxes

  $ 964   $ 769  

Long-term receivables from farmers, net

    377     393  

Judicial deposits

    172     198  

Other long-term receivables

    129     186  

Pension plan assets in excess of benefit obligations

    12     70  

Other

    291     342  
           

Total

  $ 1,945   $ 1,958  
           

        Recoverable taxes—Recoverable taxes included in other non-current assets are reported net of allowances of $38 million and $71 million at December 31, 2010 and 2009, respectively.

        Long-term receivables from farmers in Brazil—Bunge provides financing to farmers in Brazil, primarily through secured advances against farmer commitments to deliver agricultural commodities (primarily soybeans) upon harvest of the then-current year's crop and through credit sales of fertilizer to farmers. These are both commercial transactions that are intended to be short-term in nature with amounts expected to be repaid either in cash or through delivery to Bunge of agricultural commodities when the related crops are harvested. These arrangements are typically secured by the farmer's expected current year crop and liens on land, buildings and equipment to ensure recoverability in the event of crop failure. The terms of fertilizer credit sales do not include interest. The secured advances against commitments to deliver soybeans provide for interest between the advance date and the scheduled soybean delivery date. The credit factors considered by Bunge in evaluating farmers before initial advance or extension of credit include, among other things, the credit history of the farmer, financial strength, available agricultural land, and available collateral in addition to the expected crop.

        From time to time, weather conditions in certain regions of Brazil and farming economics in general, are adversely affected by factors including volatility in soybean prices, movements in the Brazilian real relative to the U.S. dollar and crop quality and yield issues. In the event of a farmer default resulting from these or other factors, Bunge considers these secured advance and credit sale amounts as past due immediately when the expected soybeans are not delivered as scheduled against advances or when the credit sale amounts are not paid when they come due at the end of the harvest. A large portion of these defaulted accounts resulted from poor crops in certain regions of Brazil in 2005 and 2006. While Brazilian farm economics have improved from those consecutive crop failures, some farmers have continued to face economic challenges due to high debt levels and a strong Brazilian real.

        Upon farmer default, Bunge generally initiates legal proceedings to recover the defaulted amounts. However, the legal recovery process through the judicial system is a long-term process, generally spanning a number of years. As a result, once accounts have been submitted to the judicial process for recovery, Bunge may also seek to renegotiate certain terms with the defaulting farmer in order to accelerate recovery of amounts owed.

F-32



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. Other Non-Current Assets: (Continued)

        Credit quality and allowance for uncollectible accounts—Bunge adopted the accounting guidance on disclosure about the credit quality of financing receivables and the allowance for credit losses as of December 31, 2010. This guidance requires information to be disclosed at disaggregated levels, defined as portfolio segments and classes. Based upon its analysis of credit losses and risk factors to be considered in determining the allowance for credit losses, Bunge has determined that the long-term receivables from farmers in Brazil is a single portfolio segment.

        Bunge evaluates this single portfolio segment by class of receivables, which is defined as a level of information (below a portfolio segment) in which the receivables have the same initial measurement attribute and a similar method for assessing and monitoring risk. Bunge has identified accounts in legal collection processes and renegotiated amounts as classes of long-term receivables from farmers. Valuation allowances for accounts in legal collection processes are determined by Bunge on individual accounts based on the fair value of the collateral provided as security for the secured advance or credit sale. The fair value is determined using a combination of internal and external resources, including published information concerning Brazilian land values by region. For determination of the valuation allowances for renegotiated amounts, Bunge considers historical experience with the individual farmers, current weather and crop conditions, as well as the fair value of non-crop collateral.

        Impairment—For both classes, a long-term receivable from farmers in Brazil is considered impaired, based on current information and events, if Bunge determines it to be probable that all amounts due under the original terms of the receivable will not be collected. Recognition of interest income on secured advances to farmers is suspended once the farmer defaults on the originally scheduled delivery of agricultural commodities as the collection of future income is determined to not be probable. No additional interest income is accrued from the point of default until ultimate recovery, where amounts collected are credited first against the receivable and then to any unrecognized interest income.

        The table below summarizes Bunge's recorded investment in long-term receivables from farmers in Brazil as of December 31, 2010 for renegotiated amounts and amounts in the legal collection process.

 
  December 31,  
(US$ in millions)
  2010  

Legal collection process (1)

  $ 441  

Renegotiated amounts:

       

Current

    137  
       

Total

  $ 578  
       

(1)
All amounts in legal process are considered past due upon initiation of legal action.

F-33



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. Other Non-Current Assets: (Continued)

        The table below summarizes Bunge's recorded investment in long-term receivables from farmers in Brazil and the related allowance amounts as of December 31, 2010.

 
  December 31, 2010  
(US$ in millions)
  Recorded
Investment
  Allowance  

For which an allowance has been provided:

             

Renegotiated amounts

  $ 66   $ 39  

Legal collection process

    180     162  

For which no allowance has been provided:

             

Renegotiated amounts

    71      

Legal collection process

    261      
           

Total

  $ 578   $ 201  
           

        The table below summarizes the activity in the allowance for doubtful accounts related to long-term receivables from farmers in Brazil for the year ended December 31, 2010.

 
  December 31,  
(US$ in millions)
  2010  

Beginning Balance

  $ 232  

Bad debt provision

    31  

Recoveries

    (15 )

Write-offs

    (57 )

Transfers (1)

    4  

Foreign exchange translation

    6  
       

Ending balance

  $ 201  
       

(1)
Represents reclassifications from allowance for doubtful accounts-current for secured advances to suppliers.

        Judicial deposits—Judicial deposits are funds that Bunge has placed on deposit with the court in Brazil. These funds are held in judicial escrow relating to certain legal proceedings pending legal resolution and bear interest at the SELIC rate (benchmark rate of the Brazilian central bank).

        Other long-term receivables—Other long-term receivables include primarily installment payments to be received from Bunge's sale of its 33.34% interest in Saipol S.A.S. in December 2009 for 145 million Euros, or its equivalent at that date of approximately $209 million. The sale agreement provided for payment in four equal annual installments, the first of which was received in January, 2010. The reported long-term balance related to Saipol represents installments expected after 2011. The January 2011 installment is included in other current assets (see Note 5 of the notes to the consolidated financial statements).

F-34



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. Other Current Liabilities

        Other current liabilities consist of the following:

 
  December 31,  
(US$ in millions)
  2010   2009  

Accrued liabilities

  $ 1,268   $ 1,046  

Unrealized loss on derivative contracts

    2,105     1,250  

Advances on sales

    323     253  

Other

    79     86  
           

Total

  $ 3,775   $ 2,635  
           

13. Asset Retirement Obligations

        Bunge has asset retirement obligations with carrying amounts totaling $43 million and $71 million at December 31, 2010 and 2009, respectively. Asset retirement obligations are primarily in the agribusiness segment, related to the restoration of leased land to its original state and removal of the plants upon termination of the leases, and in its edible oil products segment, related to the removal of certain storage tanks associated with edible oil refining facilities.

        The change in carrying value of asset retirement obligations in 2010 consisted of additions of $6 million in the sugar and bioenergy segment related to the acquisition of Moema, a $3 million increase of the initial obligation, which resulted from a decrease in the discount rate used to calculate the present value ($2 million in the fertilizer segment and $1 million in the agribusiness segment), an increase of $3 million for accretion expense, an increase of $2 million related to currency translation and a decrease of $42 million in the fertilizer segment due to the sale of the nutrients assets (see Note 3 of the notes to the consolidated financial statements). The change in carrying value of asset retirement obligations in 2009 consisted of a $13 million increase of the initial obligation, which resulted from a decrease in the discount rate used to calculate the present value ($8 million in the fertilizer segment, $4 million in the agribusiness segment and $1 million in the edible oil products segment), an increase of $9 million for accretion expense and an increase of $13 million related to currency translation.

14. Income Taxes

        Bunge operates globally and is subject to the tax laws and regulations of numerous tax jurisdictions and authorities, as well as tax agreements and treaties among these jurisdictions. Bunge's tax provision is impacted by, among other factors, changes in tax laws, regulations, agreements and treaties, currency exchange rates and Bunge's profitability in each taxing jurisdiction.

        Bunge records valuation allowances when it is more likely than not that some portion or all of its deferred tax assets might not be realized. The ultimate realization of deferred tax assets depends primarily on Bunge's ability to generate sufficient timely future income of the appropriate character in the appropriate tax jurisdiction.

F-35



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes (Continued)

        Bunge has elected to use the U.S. federal income tax rate to reconcile its provision for income taxes.

        The components of income from operations before income tax are as follows:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

United States

  $ 42   $ 184   $ 126  

Non-United States

    3,008     (39 )   1,411  
               

Total

  $ 3,050   $ 145   $ 1,537  
               

        The components of the income tax (expense) benefit are:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Current:

                   

United States

  $ (33 ) $ (58 ) $ (12 )

Non-United States

    (499 )   (39 )   (511 )
               

    (532 )   (97 )   (523 )
               

Deferred:

                   

United States

    (12 )   (13 )   (22 )

Non-United States

    (148 )   217     273  
               

    (160 )   204     251  
               

Uncertain:

                   

United States

    (1 )   (2 )   (1 )

Non-United States

    4     5     28  
               

    3     3     27  
               

Total

  $ (689 ) $ 110   $ (245 )
               

F-36



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes (Continued)

        Reconciliation of the income tax (expense) benefit if computed at the U.S. Federal income tax rate to Bunge's reported income tax (expense) benefit is as follows:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Income from operations before income tax

  $ 3,050   $ 145   $ 1,537  

Income tax rate

    35 %   35 %   35 %
               

Income tax expense at the U.S. Federal tax rate

    (1,068 )   (51 )   (538 )

Adjustments to derive effective tax rate:

                   

Foreign earnings taxed at different statutory rates

    515     163     166  

Changes in valuation allowances

    (129 )   (17 )   (47 )

Goodwill amortization

    44     31     23  

Benefit from interest on capital dividends paid by Brazilian companies

    2     1     14  

Investment tax credits

    27     22     45  

Foreign exchange on monetary items

    (9 )   (11 )   69  

Non-deductible expenses

    (68 )   (35 )   (35 )

Uncertain tax positions

    3     3     27  

Other

    (6 )   4     31  
               

Income tax (expense) benefit

  $ (689 ) $ 110   $ (245 )
               

        Bunge's subsidiaries had undistributed earnings amounting to $6,808 million at December 31, 2010. These amounts are considered to be permanently reinvested and, accordingly, no provision for income taxes has been made. If these earnings were distributed in the form of dividends or otherwise, Bunge would be subject to income taxes on some of these distributions in various jurisdictions and also to foreign withholding taxes; however, it is not practicable to estimate the amount of taxes that would be payable upon remittance of these earnings.

F-37



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes (Continued)

        The primary components of deferred tax assets and liabilities and related valuation allowances are as follows:

 
  December 31,  
(US$ in millions)
  2010   2009  

Deferred income tax assets:

             

Net operating loss carryforwards

  $ 1,098   $ 1,072  

Excess of tax basis over financial statement basis of property, plant and equipment

    34     17  

Accrued retirement costs (pension and postretirement healthcare cost) and other accrued employee compensation

    115     136  

Tax credit carryforwards

    12     21  

Inventories

        3  

Other accruals and reserves not currently deductible for tax purposes

    625     499  
           

Total deferred tax assets

    1,884     1,748  

Less valuation allowances

    (245 )   (116 )
           

Deferred tax assets, net of valuation allowance

    1,639     1,632  
           

Deferred tax liabilities:

             

Excess of financial statement basis over tax basis of long-lived assets

    179     255  

Undistributed earnings of affiliates not considered permanently reinvested

    30     31  

Inventories

    11     20  

Other temporary differences

    332     124  
           

Total deferred tax liabilities

    552     430  
           

Net deferred tax assets

  $ 1,087   $ 1,202  
           

        Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to the years in which those temporary differences are expected to be recovered or settled.

        At December 31, 2010, Bunge's pretax loss carryforwards totaled $3,485 million, of which $2,694 million have no expiration, including loss carryforwards of $2,361 million in Brazil. While loss carryforwards in Brazil can be carried forward indefinitely, annual utilization is limited to 30% of taxable income. The remaining tax loss carryforwards expire at various periods beginning in 2011 through the year 2027.

        Income Tax Valuation Allowances—Bunge continually assesses the adequacy of its valuation allowances and recognizes tax benefits only when it is more likely than not that the benefits will be realized. The utilization of deferred tax assets depends on the generation of future income during the period in which the related temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in this assessment.

        In 2010, income tax expense increased $128 million for net valuation allowances. There is an increase in the valuation allowance for tax carryforwards in Russia and Italy due to an uncertain economic environment in those countries combined with 10 and 5 year carryforward limitations,

F-38



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes (Continued)

respectively. In addition, the valuation allowance increased in Brazil as a result of losses in companies with no source of income and the decision to liquidate one of Bunge's Brazilian finance subsidiaires.

        Uncertain Tax Liabilities—FASB issued a standard on income taxes that requires applying a "more likely than not" threshold to the recognition and de-recognition of tax benefits. At December 31, 2010 and 2009, respectively, Bunge had recorded tax liabilities of $98 million and $104 million in other non-current liabilities and $4 million and $7 million in current liabilities in its consolidated balance sheets, of which $42 million and $40 million relates to accrued penalties and interest. During 2010, 2009 and 2008, respectively, Bunge recognized $(2) million, $8 million and $13 million in interest and penalties in income tax (expense) benefit in the consolidated statements of income. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

(US$ in millions)
  2010   2009   2008  

Balance at January 1

  $ 111   $ 138   $ 197  

Additions based on tax positions related to the current year

    1     1     3  

Additions based on tax positions related to prior years

    7     42     11  

Reductions for tax positions of prior years

            (40 )

Settlement or clarification from tax authorities

    (2 )   (81 )   (2 )

Expiration of statute of limitations

    (7 )   (3 )   (1 )

Sale of Brazilian fertilizer nutrients assets

    (6 )        

Foreign currency translation

    (2 )   14     (30 )
               

Balance at December 31

  $ 102   $ 111   $ 138  
               

        Substantially all of the unrecognized tax benefits balance, if recognized, would affect Bunge's effective income tax rate. There are no positions at December 31, 2010 with respect to which the unrecognized tax benefit is expected to increase or decrease significantly within the next 12 months.

        The net reduction of $27 million in 2009 included settlements of $39 million under a Brazilian tax amnesty program, a reversal of $7 million due to a favorable ruling from applicable tax authorities, $14 million of currency translation adjustments and various smaller items totaling $4 million.

        Bunge, through its subsidiaries, files income tax returns in the United States (federal and various states) and non-United States jurisdictions. The table below reflects the tax years for which Bunge is subject to income tax examinations by tax authorities:

 
  Open Tax Years  

North America

    1998-2010  

South America

    2004-2010  

Europe

    2004-2010  

Asia

    2003-2010  

        During 2010, the Brazilian IRS commenced an examination of the income tax returns of one of Bunge's Brazilian subsidiaries for the years 2005 to 2007. As of December 31, 2010, the Brazilian IRS has proposed certain significant adjustments to the subsidiary filed tax returns. Management, in consultation with external legal advisors, has reviewed and responded to the proposed adjustments and

F-39



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes (Continued)

believes that it is more likely than not that it will prevail and therefore, has not recorded an uncertain tax liability.

        Bunge paid income taxes, net of refunds received, of $398 million, $205 million and $394 million during the years ended December 31, 2010, 2009 and 2008, respectively. These net payments include payments of interim estimated income and withholding taxes in accordance with applicable tax laws, primarily in Brazil. For 2009 and 2008, estimated tax payments exceeded the annual amounts ultimately determined to be owed by $168 million and $42 million, respectively. In accordance with applicable tax laws, these overpayments may be recoverable from future income taxes or certain non-income taxes payable. For 2010, income tax payments in Europe included the use of $13 million of recoverable value-added taxes in accordance with applicable regulations. Bunge had $27 million, $38 million and $75 million withheld by third-parties and remitted to applicable governments on its behalf during the years ended December 31, 2010, 2009 and 2008, respectively.

        Brazil Tax Law Changes—Brazil enacted new "thin capitalization" tax legislation in June 2010. This legislation denies income tax deductions for interest payments with respect to certain debt to the extent a company's debt-to-equity ratio exceeds a certain threshold or the debt is with related parties located in a tax haven jurisdiction as defined under the law. The thin capitalization legislation provides for an effective date of January 1, 2010 with respect to both the income tax and social contribution tax on income (25% and 9%, respectively, which are reported together as income tax expense in Bunge's consolidated statements of income). However, based on external legal advice, Bunge has concluded that under Brazil's Constitution, the new law cannot apply to the income tax portion until January 1, 2011 and the social contribution portion can only apply from March 15, 2010. Because Bunge believes that it is more likely than not that this position will be sustained, it has not accrued any income tax with respect to this new legislation at December 31, 2010, but has accrued the social contribution portion only of $15 million from March 15, 2010.

15. Financial Instruments and Fair Value Measurements

        Bunge's various financial instruments include certain components of working capital such as cash and cash equivalents, trade accounts receivable and accounts payable. Additionally, Bunge uses short- and long-term debt to fund operating requirements. Cash and cash equivalents, trade accounts receivable and accounts payable and short-term debt are stated at their carrying value, which is a reasonable estimate of fair value. For long-term debt, see Note 17 of the notes to the consolidated financial statements. Bunge's financial instruments also include derivative instruments and marketable securities, which are stated at fair value.

        Fair value is the expected price that would be received for an asset or paid to transfer a liability (an exit price) in Bunge's principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Bunge determines the fair values of its readily marketable inventories, derivatives, and certain other assets based on the fair value hierarchy established in a FASB issued standard, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs based on market data obtained from sources independent of Bunge that reflect the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are inputs that are developed based on the best information available in circumstances that reflect Bunge's own assumptions based on market data and on assumptions that market participants would use in pricing

F-40



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

the asset or liability. The standard describes three levels within its hierarchy that may be used to measure fair value.

        Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 assets and liabilities include exchange traded derivative contracts.

        Level 2: Observable inputs, including Level 1 prices (adjusted); quoted prices for similar assets or liabilities; quoted prices in markets that are less active than traded exchanges; and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include readily marketable inventories and over-the-counter (OTC) commodity purchase and sales contracts and other OTC derivatives whose value is determined using pricing models with inputs that are generally based on exchange traded prices, adjusted for location specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

        Level 3: Unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. In evaluating the significance of fair value inputs, Bunge gives consideration to items that individually, or when aggregated with other inputs, generally represent more than 10% of the fair value of the assets or liabilities. For such identified inputs, judgments are required when evaluating both quantitative and qualitative factors in the determination of significance for purposes of fair value level classification and disclosure. Level 3 assets and liabilities include assets and liabilities whose value is determined using proprietary pricing models, discounted cash flow methodologies, or similar techniques, as well as assets and liabilities for which the determination of fair value requires significant management judgment or estimation.

F-41



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The following table sets forth by level Bunge's assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2010 and 2009. The majority of Bunge's exchange traded agricultural commodity futures are settled daily generally through its clearing subsidiary and therefore such futures are not included in the table below. Assets and liabilities are classified in their entirety based on the lowest level of input that is a significant component of the fair value measurement. The lowest level of input is considered Level 3. Bunge's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels.

 
  Fair Value Measurements at Reporting Date Using  
 
  December 31, 2010   December 31, 2009  
(US$ in millions)
  Level 1   Level 2   Level 3   Total   Level 1   Level 2   Level 3   Total  

Assets:

                                                 

Readily marketable inventories (Note 4)

  $   $ 4,567   $ 264   $ 4,831   $   $ 3,271   $ 109   $ 3,380  

Unrealized gain on designated derivative contracts (1):

                                                 

Interest Rate

                        9         9  

Foreign Exchange

        22         22         11         11  

Unrealized gain on undesignated derivative contracts (1):

                                                 

Interest Rate

        4         4                  

Foreign Exchange

    2     209     1     212         41     3     44  

Commodities

    114     1,754     454     2,322     34     905     94     1,033  

Freight

    1     22     3     26         68     8     76  

Energy

    9     11     16     36     10     22     13     45  

Other (2)

    252     88         340     138     16         154  
                                   

Total assets

  $ 378   $ 6,677   $ 738   $ 7,793   $ 182   $ 4,343   $ 227   $ 4,752  
                                   

Liabilities:

                                                 

Unrealized loss on designated derivative contracts (3):

                                                 

Interest Rate

  $   $   $   $   $   $ 7   $   $ 7  

Foreign Exchange

        22         22         123         123  

Unrealized loss on undesignated derivative contracts (3):

                                                 

Interest Rate

        1         1         2         2  

Foreign Exchange

        69         69     7     15         22  

Commodities

    692     1,167     162     2,021     113     693     84     890  

Freight

                    98     106         204  

Energy

    8     1     5     14     8     7     3     18  
                                   

Total liabilities

  $ 700   $ 1,260   $ 167   $ 2,127   $ 226   $ 953   $ 87   $ 1,266  
                                   

(1)
Unrealized gains on designated and undesignated derivative contracts are generally included in other current assets. At December 31, 2009, $8 million of unrealized gains on designated and undesignated derivative contracts are included in other non-current assets. There are no such amounts included in other non-current assets at December 31, 2010.

(2)
Other assets include primarily the fair values of U.S. Treasury securities held as margin deposits.

(3)
Unrealized losses on designated and undesignated derivative contracts are generally included in other current liabilities. At December 31, 2009, $8 million of unrealized losses on designated and undesignated derivative contracts are included in other non-current liabilities. There are no such amounts included in other non-current liabilities at December 31, 2010.

        Derivatives—Exchange traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. Bunge's forward commodity purchase and sale contracts are classified as derivatives along with other OTC derivative instruments relating

F-42



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

primarily to freight, energy, foreign exchange and interest rates, and are classified within Level 2 or Level 3 as described below. Bunge estimates fair values based on exchange quoted prices, adjusted as appropriate for differences in local markets. These differences are generally valued using inputs from broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these derivative contracts are classified within Level 2. Changes in the fair values of these contracts are recognized in the consolidated financial statements as a component of cost of goods sold, foreign exchange gain or loss, other income (expense) or other comprehensive income (loss).

        OTC derivative contracts include swaps, options and structured transactions that are valued at fair value generally are determined using quantitative models that require the use of multiple market inputs including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets which are not highly active, other observable inputs relevant to the asset or liability, and market inputs corroborated by correlation or other means. These valuation models include inputs such as interest rates, prices and indices to generate continuous yield or pricing curves and volatility factors. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with less availability of pricing information and certain structured transactions can require internally developed model inputs that might not be observable in or corroborated by the market. When unobservable inputs have a significant impact on the measurement of fair value, the instrument is categorized in Level 3.

        Bunge designates certain derivative instruments as fair value hedges or cash flow hedges and assesses, both at inception of the hedge and on an ongoing basis, whether derivatives that are designated as hedges are highly effective in offsetting changes in the hedged items or anticipated cash flows.

        Readily marketable inventories—The majority of Bunge's readily marketable commodity inventories are valued at fair value. These agricultural commodity inventories are readily marketable, have quoted market prices and may be sold without significant additional processing. Changes in the fair values of these inventories are recognized in the consolidated statements of income as a component of cost of goods sold.

        Readily marketable inventories reported at fair value are valued based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets with appropriate adjustments for differences in local markets where Bunge's inventories are located. In such cases, the inventory is classified within Level 2. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. In such cases, the inventory is classified as Level 3.

        If Bunge used different methods or factors to determine fair values, amounts reported as unrealized gains and losses on derivative contracts and readily marketable inventories at fair value in the consolidated balance sheets and consolidated statements of income could differ. Additionally, if market conditions change subsequent to the reporting date, amounts reported in future periods as unrealized gains and losses on derivative contracts and readily marketable inventories at fair value in the consolidated balance sheets and consolidated statements of income could differ.

        Level 3 Valuation—Bunge's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair

F-43



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

value hierarchy. In evaluating the significance of fair value inputs, Bunge gives consideration to items that individually, or when aggregated with other inputs, represent more than 10% of the fair value of the asset or liability. For such identified inputs, judgments are required when evaluating both quantitative and qualitative factors in the determination of significance for purposes of fair value level classification and disclosure. Because of differences in the availability of market pricing data over their terms, inputs for some assets and liabilities may fall into any one of the three levels in the fair value hierarchy or some combination thereof. While FASB guidance requires Bunge to classify these assets and liabilities in the lowest level in the hierarchy for which inputs are significant to the fair value measurement, a portion of that measurement may be determined using inputs from a higher level in the hierarchy.

        Transfers in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period.

        Level 3 Derivatives—Level 3 derivative instruments utilize both market observable and unobservable inputs within the fair value measurements. These inputs include commodity prices, price volatility factors, interest rates, volumes and locations. In addition, with the exception of the exchange cleared instruments where Bunge clears trades through an exchange, Bunge is exposed to loss in the event of the non-performance by counterparties on over-the-counter derivative instruments and forward purchase and sale contracts. Adjustments are made to fair values on occasions when non-performance risk is determined to represent a significant input in Bunge's fair value determination. These adjustments are based on Bunge's estimate of the potential loss in the event of counterparty non-performance. Bunge did not have significant allowances relating to non-performance by counterparties at December 31, 2010 and 2009.

        Level 3 Readily marketable inventories—Readily marketable inventories are considered Level 3 when at least one significant assumption or input is unobservable. These assumptions or unobservable inputs include certain management estimations regarding costs of transportation and other local market or location-related adjustments.

F-44



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The tables below present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2010 and 2009. Level 3 instruments presented in the tables include readily marketable inventories and derivatives. These instruments were valued using pricing models that, in management's judgment, reflect the assumptions that would be used by a marketplace participant to determine fair value.

 
  Level 3 Instruments:  
 
  Fair Value Measurements  
(US$ in millions)
  Derivatives,
Net (1)
  Readily
Marketable
Inventories
  Total  

Balance, January 1, 2010

  $ 31   $ 109   $ 140  

Total gains and losses (realized/unrealized) included in cost of goods sold

    385     408     793  

Total gains and losses (realized/unrealized) included in foreign exchange gains (losses)

    (1 )       (1 )

Purchases, issuances and settlements

    (156 )   (257 )   (413 )

Transfers into Level 3

    59     6     65  

Transfers out of Level 3

    (11 )   (2 )   (13 )
               

Balance, December 31, 2010

  $ 307   $ 264   $ 571  
               

 

 
  Level 3 Instruments:  
 
  Fair Value Measurements  
(US$ in millions)
  Derivatives,
Net (1)
  Readily
Marketable
Inventories
  Total  

Balance, January 1, 2009

  $ (101 ) $ 183   $ 82  

Total gains and losses (realized/unrealized) included in cost of goods sold

    117     101     218  

Total gains and losses (realized/unrealized) included in foreign exchange gains (losses)

    3         3  

Purchases, issuances and settlements

    (68 )   (185 )   (253 )

Transfers in (out) of Level 3

    80     10     90  
               

Balance, December 31, 2009

  $ 31   $ 109   $ 140  
               

(1)
Derivatives, net include Level 3 derivative assets and liabilities.

F-45



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The table below summarizes changes in unrealized gains or losses recorded in earnings during the year ended December 31, 2010 and 2009 for Level 3 assets and liabilities that were held at December 31, 2010 and 2009:

 
  Level 3 Instruments:  
 
  Fair Value Measurements  
(US$ in millions)
  Derivatives,
Net (1)
  Readily
Marketable
Inventories
  Total  

Changes in unrealized gains and (losses) relating to assets and liabilities held at December 31, 2010:

                   

Cost of goods sold

  $ 421   $ 239   $ 660  
               

Foreign exchange gains (losses)

  $ (1 ) $   $ (1 )
               

Changes in unrealized gains and (losses) relating to assets and liabilities held at December 31, 2009:

                   

Cost of goods sold

  $ 59   $ 66   $ 125  
               

Foreign exchange gains (losses)

  $ 3   $   $ 3  
               

(1)
Derivatives, net include Level 3 derivative assets and liabilities

Derivative Instruments

        Interest Rate Derivatives—Interest rate swaps used by Bunge as hedging instruments have been recorded at fair value in the consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. Certain of these swap agreements have been designated as fair value hedges. The carrying amount of the associated hedged debt is also adjusted through earnings for changes in the fair value arising from changes in benchmark interest rates. Ineffectiveness is recognized to the extent that these two adjustments do not offset. Bunge enters into interest rate swap agreements for the purpose of managing certain of its interest rate exposures. Bunge also enters into certain interest rate basis swap agreements that do not qualify as hedges for accounting purposes. As a result, changes in fair value of such interest rate basis swap agreements are recorded in earnings.

        On July 7, 2010, Bunge discontinued the hedge relationship between the hedged $250 million term loan due 2011, which was repaid on the same day, and the interest rate swap agreement with a notional value of $250 million which had been hedging that exposure.

F-46



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The following table summarizes Bunge's outstanding interest rate swap and interest rate basis swap agreements at December 31, 2010:

(US$ in millions, except percentages)
  Notional Amount
of Hedged Obligation
  Notional Amount
of Derivative (4)
 

Interest rate swap agreements

  $ 475   $ 725  

Weighted-average rate payable—1.56% (1)

             

Weighted-average rate receivable—3.05% (2)

             

Interest rate basis swap agreements

  $ 375   $ 375  

Weighted-average rate payable—0.61% (1)

             

Weighted-average rate receivable—0.26% (3)

             

(1)
Interest is payable in arrears based on the average daily effective Federal Funds rate, three-month U.S. dollar LIBOR and six-month U.S. dollar LIBOR prevailing during the respective period plus a spread.

(2)
Interest is receivable in arrears based on a fixed interest rate.

(3)
Interest is receivable in arrears based on one-month U.S. dollar LIBOR.

(4)
The interest rate swap agreements mature in 2011 and 2013.

        Bunge recognized approximately $9 million, $8 million and $3 million as a reduction in interest expense in the consolidated statements of income in the years ended December 31, 2010, 2009 and 2008, respectively, relating to its outstanding interest rate swap agreements. In addition, in 2010, 2009 and 2008, Bunge recognized gains of approximately $11 million, $11 million and $12 million, respectively, as a reduction of interest expense in the consolidated statements of income, related to the amortization of deferred gains on termination of interest rate swap agreements.

        Bunge reclassified a loss of approximately $6 million in 2010 and $2 million in each of the years 2009 and 2008 from accumulated other comprehensive income (loss) in its consolidated balance sheets to interest expense in its consolidated statements of income, which related to settlements of certain derivative contracts designated as cash flow hedges, in connection with forecasted issuances of debt financing (see Notes 17 of the notes to the consolidated financial statements).

        Foreign exchange derivatives—Bunge uses a combination of foreign exchange forward and option contracts in certain of its operations to mitigate the risk from exchange rate fluctuations in connection with anticipated sales denominated in foreign currencies. The foreign exchange forward and option contracts are designated as cash flow hedges. Bunge also uses net investment hedges to partially offset the translation adjustments arising from the remeasurement of its investment in its Brazilian subsidiaries.

        Bunge assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedge transactions are highly effective in offsetting changes in the hedged items.

F-47



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The table below summarizes the notional amounts of open foreign exchange positions at December 31, 2010.

 
  December 31, 2010
 
  Exchange Traded    
   
   
 
  Non-exchange Traded    
 
  Net (Short)
& Long (1)
  Unit of
Measure
(US$ in millions)
  (Short) (2)   Long (2)

Foreign Exchange:

                     

Options

  $   $ (24 ) $ 1   Delta

Forwards

    (111 )   (6,710 )   4,528   Notional

Swaps

        (176 )   136   Notional

(1)
Exchange traded futures and options are presented on a net (short) and long position basis.

(2)
Non-exchange traded swaps, options and forwards are presented on a gross (short) and long position basis.

        In addition, Bunge has cross-currency interest rate swap agreements with an aggregate notional principal amount of 10 billion Japanese Yen maturing in 2011 for the purpose of managing its currency exposure associated with its 10 billion Japanese Yen term loan due 2011. Bunge has accounted for these cross-currency interest rate swap agreements as fair value hedges.

        The table below summarizes Bunge's outstanding cross-currency interest rate swap agreements at December 31, 2010.

(US$ in millions)
  Notional Amount
of Hedged Obligation
  Notional Amount
of Derivative (1)
 

U.S. dollar/Yen cross currency interest rate swaps

  $ 123   $ 123  

(1)
Under the terms of the cross-currency interest rate swap agreements, interest is payable in arrears based on three-month U.S. dollar LIBOR and is receivable in arrears based on three-month Yen LIBOR.

        Commodity derivatives—Bunge uses derivative instruments to manage its exposure to movements associated with agricultural commodity prices. Bunge generally uses exchange traded futures and options contracts to minimize the effects of changes in the prices of agricultural commodities on its agricultural commodity inventories and forward purchase and sale contracts, but may also from time to time enter into OTC commodity transactions, including swaps, which are settled in cash at maturity or termination based on exchange-quoted futures prices. Changes in fair values of exchange traded futures contracts representing the unrealized gains and/or losses on these instruments are settled daily generally through Bunge's wholly-owned futures clearing subsidiary. Forward purchase and sale contracts are primarily settled through delivery of agricultural commodities. While Bunge considers these exchange traded futures and forward purchase and sale contracts to be effective economic hedges, Bunge does not designate or account for the majority of its commodity contracts as hedges. Changes in fair values of these contracts and related readily marketable agricultural commodity inventories are included in cost of goods sold in the consolidated statements of income. The forward contracts require performance of both Bunge and the contract counterparty in future periods. Contracts to purchase

F-48



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

agricultural commodities generally relate to current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of agricultural commodities generally do not extend beyond one future crop cycle.

        In addition, Bunge hedges portions of its forecasted oilseed processing production requirements, including forecasted purchases of soybeans and sales of soy commodity products. The instruments used are generally exchange traded futures contracts. Such contracts hedging U.S. oilseed processing activities qualify and are designated as cash flow hedges. Contracts that are used as economic hedges of other global oilseed processing activities generally do not qualify for hedge accounting as a result of location differences and are therefore not designated as cash flow hedges for accounting purposes.

        The table below summarizes the volumes of open agricultural commodities derivative positions at December 31, 2010.

 
  December 31, 2010
 
  Exchange Traded   Non-exchange
Traded
   
 
  Net (Short) &
Long (1)
  Unit of
Measure
 
  (Short) (2)   Long (2)

Agricultural Commodities

                     

Futures

    (12,056,477 )         Metric Tons

Options

    (381,870 )   (199,531 )   214,313   Metric Tons

Forwards

        (21,829,007 )   31,258,483   Metric Tons

Swaps

        (4,767,258 )   408,233   Metric Tons

(1)
Exchange traded futures and options are presented on a net (short) and long position basis.

(2)
Non-exchange traded swaps, options and forwards are presented on a gross (short) and long position basis.

        Ocean freight derivatives—Bunge uses derivative instruments referred to as freight forward agreements, or FFAs and FFA options to hedge portions of its current and anticipated ocean freight costs. A portion of the ocean freight derivatives have been designated as fair value hedges of Bunge's firm commitments to purchase time on ocean freight vessels. Changes in the fair value of the ocean freight derivatives that are qualified, designated and highly effective as fair value hedges, along with the gain or loss on the hedged firm commitments to purchase time on ocean freight vessels that is attributable to the hedged risk, are recorded in earnings. Changes in the fair values of ocean freight derivatives that are not designated as hedges are also recorded in earnings.

F-49



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The table below summarizes the open ocean freight positions at December 31, 2010.

 
  December 31, 2010
 
  Exchange Cleared   Non-exchange
Cleared
   
 
  Net (Short) &
Long (1)
  Unit of
Measure
 
  (Short) (2)   Long (2)

Ocean Freight

                     

FFA

    (3,874 )   (365 )     Hire Days

FFA Options

    680           Hire Days

(1)
Exchange cleared futures and options are presented on a net (short) and long position basis.

(2)
Non-exchange cleared options and forwards are presented on a gross (short) and long position basis.

        Energy derivatives—Bunge uses derivative instruments to manage its exposure to volatility in energy costs. Bunge's operations use substantial amounts of energy, including natural gas, coal, steam and fuel oil, including bunker fuel.

        The table below summarizes the open energy positions at December 31, 2010.

 
  December 31, 2010
 
  Exchange Traded   Non-exchange
Cleared
   
 
  Net (Short) &
Long (1)
  Unit of
Measure
 
  (Short) (2)   Long (2)

Natural Gas (3)

                     

Futures

    (1,402,500 )   (2,729 )     MMBtus

Swaps

        (25,000 )   1,084,777   MMBtus

Options

    1,264,351     (102,319 )     MMBtus

Energy—Other

                     

Futures

    128,680           Metric Tons

Forwards

        (1,175,045 )   6,657,552   Metric Tons

Swaps

        (137,000 )   354,000   Metric Tons

Options

    40,815         119,046   Metric Tons

(1)
Exchange traded futures and exchange cleared options are presented on a net (short) and long position basis.

(2)
Non-exchange cleared swaps, options and forwards are presented on a gross (short) and long position basis.

(3)
Million British Thermal Units (MMBtus) are the standard unit of measurement used to denote the amount of natural gas.

F-50



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

The Effect of Derivative Instruments on the Consolidated Statements of Income

        The table below summarizes the effect of derivative instruments that are designated as fair value hedges and also derivative instruments that are undesignated on the consolidated statements of income for the years ended December 31, 2010 and 2009.

 
  Gain or (Loss) Recognized in Income on Derivative  
 
   
  December 31,  
(US$ in millions)
  Location   2010   2009  

Designated Derivative Contracts:

                 

Interest Rate (1)

  Interest income/Interest expense   $ 1   $  

Foreign Exchange (2)

  Foreign exchange gains (losses)          

Commodities (3)

  Cost of goods sold          

Freight (3)

  Cost of goods sold         (14 )

Energy (3)

  Cost of goods sold          
               

Total

      $ 1   $ (14 )
               

Undesignated Derivative Contracts:

                 

Interest Rate

  Interest expense   $ (1 ) $  

Interest Rate

  Other income (expenses)—net     (40 )   (3 )

Foreign Exchange

  Foreign exchange gains (losses)     95     (209 )

Foreign Exchange

  Cost of goods sold     36     29  

Commodities

  Cost of goods sold     (449 )   (395 )

Freight

  Cost of goods sold     (4 )   (24 )

Energy

  Cost of goods sold     2     (5 )
               

Total

      $ (361 ) $ (607 )
               

(1)
The gains or (losses) on the hedged items are included in interest income and interest expense, respectively, as are the offsetting gains or (losses) on the related interest rate swaps.

(2)
The gains or (losses) on the hedged items are included in foreign exchange gains (losses).

(3)
The gains or (losses) on the hedged items are included in cost of goods sold.

F-51



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The table below summarizes the effect of derivative instruments that are designated and qualify as cash flow and net investment hedges on the consolidated statements of income for the year ended December 31, 2010.

 
   
  Gain or
(Loss)
Recognized
in
Accumulated
OCI (1)
  Gain or (Loss)
Reclassified from
Accumulated OCI into
Income (1)
   
   
 
 
   
  Gain or (Loss) Recognized
in Income on Derivative (2)
 
 
  Notional
Amount
 
(US$ in millions)
  Location   Amount   Location   Amount (3)  

Cash Flow Hedge:

                                 

              Foreign         Foreign        

              exchange         exchange        

Foreign Exchange (4)

  $   $ 2   gains (losses)   $ 3   gains (losses)   $  

              Cost of         Cost of        

Commodities (5)

    45     19   goods sold     12   goods sold     (2 )
                           

Total

  $ 45   $ 21       $ 15       $ (2 )
                           

Net Investment Hedge (6):

                                 

              Foreign         Foreign        

              exchange         exchange        

Foreign Exchange

  $   $ (17 ) gains (losses)   $   gains (losses)   $  
                           

Total

  $   $ (17 )     $       $  
                           

(1)
The gain or (loss) recognized relates to the effective portion of the hedging relationship. At December 31, 2010, Bunge expects to reclassify into income in the next 12 months approximately $5 million of after tax gains related to its agricultural commodities cash flow hedges. As of December 31, 2010, there are no foreign exchange cash flow hedges or net investment hedges outstanding.

(2)
The gain or (loss) recognized relates to the ineffective portion of the hedging relationship and to the amount excluded from the assessment of hedging effectiveness.

(3)
The amount of loss recognized in income is $2 million, which relates to the ineffective portion of the hedging relationships, and zero, which relates to the amount excluded from the assessment of hedge effectiveness.

(4)
The foreign exchange forward contracts matured at various dates in 2010.

(5)
The changes in the market value of these futures contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged items. The commodities futures contracts mature at various dates in 2011.

(6)
Bunge paid Brazilian reais and receives U.S. dollars using fixed interest rates, offsetting the translation adjustment of its net investment in Brazilian reais assets. The swaps matured in 2010. In July 2010, Bunge de-designated the net investment hedge. Gains or losses due to changes in exchange rates on the de-designated swaps were recorded in the income statement from the date of de-designation until maturity.

F-52



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Financial Instruments and Fair Value Measurements (Continued)

        The table below summarizes the effect of derivative instruments that are designated and qualify as cash flow and net investment hedges on the consolidated statements of income for the year ended December 31, 2009.

 
   
  Gain or
(Loss)
Recognized
in
Accumulated
OCI (1)
  Gain or (Loss)
Reclassified from
Accumulated OCI into
Income (1)
   
   
 
 
   
  Gain or (Loss) Recognized
in Income on Derivative (2)
 
 
  Notional
Amount
 
(US$ in millions)
  Location   Amount   Location   Amount (3)  

Cash Flow Hedge:

                                 

              Foreign         Foreign        

              exchange         exchange        

Foreign Exchange (4)

  $ 859   $ 46   gains (losses)   $ (36 ) gains (losses)   $ (9 )

              Cost of         Cost of        

Commodities (5)

    55     (21 ) goods sold     (11 ) goods sold     (1 )
                           

Total

  $ 914   $ 25       $ (47 )     $ (10 )
                           

Net Investment Hedge (6):

                                 

              Foreign         Foreign        

              exchange         exchange        

Foreign Exchange

  $ 419   $ 147   gains (losses)   $   gains (losses)   $  
                           

Total

  $ 419   $ 147       $       $  
                           

(1)
The gain or (loss) recognized relates to the effective portion of the hedging relationship. At December 31, 2009, Bunge expects to reclassify into income in the next 12 months approximately $1 million, $(2) million and zero of after tax gains related to its foreign exchange, agricultural commodities and net cash flow hedges, respectively.

(2)
The gain or (loss) recognized relates to the ineffective portion of the hedging relationship and to the amount excluded from the assessment of hedging effectiveness.

(3)
The amount of loss recognized in income is $1 million, which relates to the ineffective portion of the hedging relationships, and $9 million, which relates to the amount excluded from the assessment of hedge effectiveness.

(4)
The foreign exchange forward contracts matured at various dates in 2010 and 2011.

(5)
The changes in the market value of these futures contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged items. The commodities futures contracts matured at various dates in 2010.

(6)
Bunge paid Brazilian reais and receives U.S. dollars using fixed interest rates, offsetting the translation adjustment of its net investment in Brazilian reais assets. The swaps matured at various dates in 2010.

F-53



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16. Short-Term Debt and Credit Facilities

        Bunge's short-term borrowings are typically sourced from various banking institutions and the U.S. commercial paper market. Bunge also borrows from time to time in local currencies in various foreign jurisdictions. Interest expense includes facility commitment fees, amortization of deferred financing costs and charges on certain lending transactions, including certain intercompany loans and foreign currency conversions in Brazil. The weighted-average interest rate on short-term borrowings as of December 31, 2010 and 2009 was 2.53% and 12.54%, respectively.

 
  December 31,  
(US$ in millions)
  2010   2009  

Lines of credit:

             

Secured

  $ 15   $  

Unsecured, variable interest rates from 1.27% to 18.70%

    1,703     166  
           

Total short-term debt

  $ 1,718   $ 166  
           

        At December 31, 2010, Bunge had no outstanding amounts under its $575 million commercial paper program. The commercial paper program is supported by committed back-up bank credit lines (the liquidity facility) equal to the amount of the commercial paper program provided by lending institutions that are rated at least A-1 by Standard & Poors and P-1 by Moody's Investors Services. The liquidity facility, which matures in June 2012, permits Bunge, at its option, to set up direct borrowings or issue commercial paper in an aggregate amount of up to $575 million. The cost of borrowing under the liquidity facility would typically be higher than the cost of borrowing under our commercial paper program. At December 31, 2010, no borrowings were outstanding under these committed back-up bank credit lines.

        In addition to the committed facilities noted above, from time to time, Bunge enters into uncommitted short-term credit lines as necessary based on our liquidity requirements. At December 31, 2010, $1,075 million was outstanding under these uncommitted short-term credit lines. In addition, Bunge's operating companies had $643 million in short-term borrowings outstanding from local bank lines of credit at December 31, 2010 to support working capital requirements.

        At December 31, 2010, Bunge had approximately $575 million of unused and available borrowing capacity under its commercial paper program and committed short-term credit facilities.

F-54



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. Long-Term Debt

        Long-term obligations are summarized below.

 
  December 31,  
(US$ in millions)
  2010   2009  

Term loans due 2011—LIBOR (1) plus 1.25% to 1.75%

  $ 475   $ 475  

Term loan due 2011—fixed interest rate of 4.33%

        250  

Term loan due 2013—fixed interest rate of 3.32%

    300      

Japanese Yen term loan due 2011—Yen LIBOR (2) plus 1.40%

    123     108  

7.44% Senior Guaranteed Notes, Series C, due 2012

        351  

7.80% Senior Notes due 2012

        200  

5.875% Senior Notes due 2013

    300     300  

5.35% Senior Notes due 2014

    500     500  

5.10% Senior Notes due 2015

    382     382  

5.90% Senior Notes due 2017

    250     250  

8.50% Senior Notes due 2019

    600     600  

BNDES (3) loans, variable interest rate indexed to TJLP (4) plus 3.20% to 4.50% payable through 2016

    118     106  

Other

    115     127  
           

    3,163     3,649  

Less: Current portion of long-term debt

    (612 )   (31 )
           

Total long-term debt

  $ 2,551   $ 3,618  
           

(1)
One-, three- and six-month LIBOR at December 31, 2010 were 0.26%, 0.30% and 0.46% per annum, respectively, and at December 31, 2009 were 0.23%, 0.25% and 0.43% per annum, respectively.

(2)
Three-month Yen LIBOR at December 31, 2010 and 2009 was 0.19% and 0.28%, respectively.

(3)
BNDES loans are Brazilian government industrial development loans.

(4)
TJLP is a long-term interest rate published by the Brazilian government on a quarterly basis. The annualized rate for 2010 and 2009 was 6.00% and 6.13%, respectively.

        The fair values of long-term debt, including current portion, at December 31, 2010 and 2009 were $3,407 million and $3,796 million, respectively, calculated based on interest rates currently available on comparable maturities to companies with credit standing similar to that of Bunge.

        In December 2010, Bunge entered into a bilateral term loan agreement with a group of lending institutions for $300 million. The term loan is set to mature in 2013, is fully funded as of December 31, 2010 and carries interest of 3.32%.

        Bunge may from time to time seek to retire or purchase outstanding debt in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, Bunge's liquidity requirements, contractual restrictions and other factors. The following table summarizes debt repayments made using certain of the proceeds from the sale of

F-55



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. Long-Term Debt (Continued)

Bunge's Brazilian fertilizer nutrients assets (see Note 3 of the notes to the consolidated financial statements).

(US$ in millions)
  Aggregate
Principal
Amount
  Aggregate
Repayment
Amount
 

7.44% Senior Guaranteed Notes, Series C, due 2012 (1)

  $ 351   $ 406  

7.80% Senior Notes, due 2012 (2)

    198     230  

Term Loan, fixed interest rate of 4.33%, due 2011 (3)

    250     260  

Other (4)

    28     35  
           

Total

  $ 827   $ 931  
           

(1)
The aggregate repayment amount includes a $48 million make-whole payment and $7 million of accrued and unpaid interest. Also, in connection with this debt redemption, Bunge recognized a loss of $4 million related to the non-cash write-off of unamortized losses on treasury rate lock contracts and unamortized debt issuance costs.

(2)
The aggregate repayment amount includes a $28 million make-whole payment and $4 million of accrued and unpaid interest. Also in connection with this debt redemption, Bunge recognized a loss of $2 million related to the non-cash write-off of unamortized losses on treasury rate lock contracts, and unamortized original issue discount and issuance costs.

(3)
The aggregate repayment amount paid to the participant banks of the syndicated term loan includes a $6 million make-whole payment and $4 million of accrued and unpaid interest.

(4)
The aggregate repayment amount includes a $7 million make-whole payment.

        In addition, in February 2010, Bunge repurchased and cancelled approximately $2 million of the then outstanding $200 million aggregate principal amount of the 7.80% senior notes due 2012.

        At December 31, 2010, Bunge had approximately $2,232 million of unused and available borrowing capacity under its committed long-term credit facilities with a number of lending institutions.

        Certain land, property, equipment and investments in consolidated subsidiaries having a net carrying value of approximately $80 million at December 31, 2010 have been mortgaged or otherwise collateralized against long-term debt of $122 million at December 31, 2010.

F-56



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. Long-Term Debt (Continued)

        Principal Maturities.    Principal maturities of long-term debt at December 31, 2010 are as follows:

(US$ in millions)
   
 

2011

  $ 612  

2012

    34  

2013

    638  

2014

    581  

2015

    408  

Thereafter

    890  
       

Total

  $ 3,163  
       

        Bunge's credit facilities and certain senior notes require it to comply with specified financial covenants related to minimum net worth, minimum current ratio, a maximum debt to capitalization ratio and indebtedness at the subsidiary level. Bunge was in compliance with these covenants at December 31, 2010.

        In 2010, 2009 and 2008, Bunge paid interest, net of interest capitalized, of $247 million, $284 million and $309 million, respectively.

18. Accounts Receivable Securitization Facilities

        In January 2010, Bunge adopted a FASB issued standard that resulted in amounts outstanding under its securitization programs being accounted for as secured borrowings and reflected as short-term debt on its consolidated balance sheet. As a result of this change in accounting standards, Bunge significantly reduced its utilization of these programs and either terminated or allowed these programs to expire.

        Certain of Bunge's European subsidiaries had an accounts receivable securitization facility, through which subsidiaries sold without recourse, certain eligible trade accounts receivable up to a maximum amount of 200 million Euro. Utilization of these facilities stopped in March 2010 and the facility was allowed to expire in October 2010. The effective yield rates on accounts receivable sold were based on monthly EUR LIBOR plus 0.295% per annum, which included the program cost and certain administrative fees. In the years ended December 31, 2010, 2009 and 2008, Bunge recognized expenses of approximately $1 million, $5 million and $13 million, respectively, in selling, general and administrative expenses in its consolidated statements of income related to this facility. At December 31, 2009, Bunge had sold approximately $198 million of accounts receivable to the facility, of which it had retained $56 million of beneficial interests in certain accounts receivable that did not qualify as sales. The beneficial interests were subordinate to investors' interests and were valued at historical cost, which approximated fair value. The beneficial interests were recorded in other current assets in Bunge's consolidated balance sheet, net of an allowance for doubtful accounts of $8 million against the beneficial interests at December 31, 2009. There were no amounts outstanding under the facility at December 31, 2010.

        Bunge had two revolving accounts receivable securitization facilities through its North American operating subsidiaries, through which it sold, on a revolving basis, undivided percentage ownership interests (undivided interests) in designated accounts receivable pools without recourse up to a maximum of approximately $221 million as of December 31, 2009. During 2010, Bunge did not utilize

F-57



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. Accounts Receivable Securitization Facilities (Continued)

these facilities and it terminated the $71 million facility in March 2010 and allowed the $150 million facility to expire in July 2010. The effective rate on these facilities approximated the 30 day commercial paper rate plus annual commitment fees ranging from 90 basis points on an undrawn basis to 150 basis points on a drawn basis. During 2009, outstanding undivided interests averaged $153 million. There were no outstanding undivided interests in pooled accounts receivable at December 31, 2010 or 2009. Bunge recognized expenses of $1 million, $4 million and $7 million for the years ended December 31, 2010, 2009 and 2008, respectively, in selling, general and administrative expenses in its consolidated statements of income.

19. Pension Plans

        Employee Defined Benefit Plans—Certain U.S., Canadian, European and Brazilian based subsidiaries of Bunge sponsor non-contributory defined benefit pension plans covering substantially all employees of the subsidiaries. The plans provide benefits based primarily on participants' salary and length of service.

        The funding policies for Bunge's defined benefit pension plans are determined in accordance with statutory funding requirements. The most significant defined benefits plan is in the United States. The U.S. funding policy requires at least those amounts required by the Pension Protection Act of 2006. Assets of the plans consist primarily of equity and fixed income investments.

        Plan Amendments and Transfers In—At December 31, 2010, there was a transfer in of assets and liabilities of a plan sponsored by one of Bunge's European subsidiaries due to statutory charges. This plan was previously accounted for as a defined contribution plan. In 2009, there was a transfer in that resulted from certain plan combinations in Bunge's European operations. There were no significant amendments to Bunge's employee benefit plans during the years ended December 31, 2010 and 2008.

        Plan Settlement and Transfers Out—In 2010, there was a transfer out that resulted from the divestiture of Bunge's Brazilian fertilizer nutrients assets (see Note 3 of the notes to the consolidated financial statements), which included its Brazil-based fertilizer subsidiary, Ultrafertil, SA (Ultrafertil). Ultrafertil was a participating sponsor in a frozen multiple-employer defined benefit pension plan (the "Petros Plan") that was managed by Fundaçao Petrobras de Securidade Social (Petros). The Petros Plan began in 1970 prior to the Brazilian government's deregulation of the fertilizer industry in Brazil. The Petros Plan was funded in accordance with Brazilian statutory requirements. The sale of Bunge's Brazilian fertilizer nutrients assets was accounted for as a settlement of the Petros Plan of approximately $42 million. In 2009, Bunge terminated certain of its Canadian plans which resulted in a $7 million settlement.

F-58



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Pension Plans (Continued)

        The following table sets forth in aggregate a reconciliation of the changes in the U.S. and foreign defined benefit pension plans' benefit obligations, assets and funded status at December 31, 2010 and 2009 for plans with assets in excess of benefit obligations and plans with benefit obligations in excess of plan assets. A measurement date of December 31, Bunge's fiscal year end, was used for all plans.

 
  U.S. Pension Benefits
December 31,
  Foreign Pension Benefits
December 31,
 
(US$ in millions)
  2010   2009   2010   2009  

Change in benefit obligations:

                         

Benefit obligation as of beginning of year

  $ 394   $ 346   $ 479   $ 328  

Service cost

    13     12     3     3  

Interest cost

    24     22     22     41  

Actuarial loss (gain), net

    19     29     9     28  

Employee contributions

            1     2  

Net transfers in (out)

            (398 )   14  

Plan amendments

            1      

Plan settlements

            42     (7 )

Effect of plan combinations

                (8 )

Benefits paid

    (17 )   (14 )   (19 )   (27 )

Expenses paid

    (1 )   (1 )        

Impact of foreign exchange rates

            (4 )   105  
                   

Benefit obligation as of end of year

  $ 432   $ 394   $ 136   $ 479  
                   

Change in plan assets:

                         

Fair value of plan assets as of beginning of year

  $ 298   $ 220   $ 493   $ 368  

Actual return on plan assets

    48     48     28     29  

Employer contributions

    2     45     14     10  

Employee contributions

            1     2  

Plan settlements

            (2 )   (7 )

Effect of plan combinations

                (2 )

Divestitures

            (398 )    

Benefits paid

    (17 )   (14 )   (19 )   (27 )

Expenses paid

    (1 )   (1 )        

Impact of foreign exchange rates

            (2 )   120  
                   

Fair value of plan assets as of end of year

  $ 330   $ 298   $ 115   $ 493  
                   

Funded (unfunded) status and net amounts recognized:

                         

Plan assets (less than) in excess of benefit obligation

  $ (102 ) $ (96 ) $ (21 ) $ 14  

Net (liability) asset recognized in the balance sheet

  $ (102 ) $ (96 ) $ (21 ) $ 14  
                   

Amounts recognized in the balance sheet consist of:

                         

Non-current assets

  $ 2   $ 1   $ 10   $ 69  

Current liabilities

    (1 )   (1 )   (2 )   (10 )

Non-current liabilities

    (103 )   (96 )   (29 )   (45 )
                   

Net (liability) asset recognized

  $ (102 ) $ (96 ) $ (21 ) $ 14  
                   

F-59



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Pension Plans (Continued)

        Included in accumulated other comprehensive income at December 31, 2010 are the following amounts that have not yet been recognized in net periodic benefit costs: unrecognized initial net asset of $1 million ($1 million, net of tax), unrecognized prior service cost of $9 million ($6 million, net of tax) and unrecognized actuarial loss of $110 million ($71 million, net of tax). The prior service cost included in accumulated other comprehensive income that is expected to be recognized in net periodic benefit costs in 2011 is $2 million ($1 million, net of tax) and unrecognized actuarial loss of $6 million ($4 million, net of tax).

        Bunge has aggregated certain U.S. and foreign defined benefit pension plans with projected benefit obligations in excess of fair value of plan assets with pension plans that have fair value of plan assets in excess of projected benefit obligations. At December 31, 2010, the $432 million and $136 million projected benefit obligations for U.S. and foreign plans, respectively, include plans with projected benefit obligations of $381 million and $39 million, respectively, which were in excess of the fair value of related plan assets of $276 million and $8 million, respectively. At December 31, 2009, the $394 million and $479 million projected benefit obligations for U.S. and foreign plans, respectively, include plans with projected benefit obligations of $377 million and $64 million, respectively, which were in excess of the fair value of related plan assets of $281 million and $9 million, respectively. The accumulated benefit obligation for the U.S. and foreign defined benefit pension plans, respectively, was $381 million and $81 million at December 31, 2010 and $347 million and $456 million at December 31, 2009, respectively.

        The following table summarizes information relating to aggregated U.S. and foreign defined benefit pension plans with an accumulated benefit obligation in excess of plan assets:

 
  U.S. Pension Benefits December 31,   Foreign Pension Benefits December 31,  
(US$ in millions)
  2010   2009   2010   2009  

Projected benefit obligation

  $ 381   $ 377   $ 29   $ 52  

Accumulated benefit obligation

    330     330     28     49  

Fair value of plan assets

    276     281     3     3  

        The components of net periodic benefit costs are as follows for U.S. and foreign defined benefit plans:

 
  U.S. Pension Benefits December 31,   Foreign Pension Benefits December 31,  
(US$ in millions)
  2010   2009   2008   2010   2009   2008  

Service cost

  $ 13   $ 12   $ 11   $ 3   $ 3   $ 5  

Interest cost

    24     22     21     22     41     37  

Expected return on plan assets

    (24 )   (22 )   (20 )   (25 )   (43 )   (39 )

Amortization of prior service cost

    2     2     1     1     1     1  

Amortization of net loss

    5     3     1         (2 )    

Settlement loss recognized

                26     1      
                           

Net periodic benefit costs

  $ 20   $ 17   $ 14   $ 27   $ 1   $ 4  
                           

F-60



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Pension Plans (Continued)

        The weighted-average actuarial assumptions used in determining the benefit obligation under the U.S. and foreign defined benefit pension plans are as follows:

 
  U.S. Pension Benefits
December 31,
  Foreign Pension Benefits
December 31,
 
 
  2010   2009   2010   2009  

Discount rate

    6.0 %   6.2 %   4.4 %   10.5 %

Increase in future compensation levels

    4.2 %   4.2 %   2.4 %   6.3 %

        The weighted-average actuarial assumptions used in determining the net periodic benefit cost under the U.S. and foreign defined benefit pension plans are as follows:

 
  U.S. Pension Benefits
December 31,
  Foreign Pension Benefits
December 31,
 
 
  2010   2009   2008   2010   2009   2008  

Discount rate

    6.2 %   6.5 %   6.5 %   10.5 %   11.4 %   9.4 %

Increase in future compensation levels

    4.2 %   4.2 %   4.3 %   6.3 %   6.7 %   4.8 %

Expected long-term rate of return on assets

    8.0 %   8.0 %   7.8 %   11.4 %   10.9 %   10.2 %

        The sponsoring subsidiaries select the expected long-term rate of return on assets in consultation with their investment advisors and actuaries. These rates are intended to reflect the average rates of earnings expected to be earned on the funds invested or to be invested to provide required plan benefits. The plans are assumed to continue in effect as long as assets are expected to be invested.

        In estimating the expected long-term rate of return on assets, appropriate consideration is given to historical performance for the major asset classes held or anticipated to be held by the applicable plan trusts and to current forecasts of future rates of return for those asset classes. Cash flows and expenses are taken into consideration to the extent that the expected returns would be affected by them. As assets are generally held in qualified trusts, anticipated returns are not reduced for taxes.

        Plan Assets—Beginning with the year ended December 31, 2009, Bunge adopted prospectively the guidance of a FASB issued standard that requires expanded and more detailed disclosures about its sponsored postretirement defined benefit plan assets, including Bunge's investment strategies, major categories of plan assets, concentration of risks within plan assets and valuation techniques used to measure the fair value of plan assets.

        The objectives of the U.S. plans' trust funds are to sufficiently diversify plan assets to maintain a reasonable level of risk without imprudently sacrificing return, with a target asset allocation of approximately 40% fixed income securities and approximately 60% equities. Bunge implements its investment strategy through a combination of indexed mutual funds and a proprietary portfolio of fixed income securities. Bunge's policy is not to invest plan assets in Bunge Limited shares. Investments for the Petros Plan in Brazil were pooled, managed and administered by Petros. Bunge did not control the investment policies or practices of the Petros Plan.

        Plan investments are stated at fair value which is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan classifies its investments in Level 1, which refers to securities that are actively traded on a public exchange and valued using quoted prices from active markets for identical

F-61



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Pension Plans (Continued)

assets, Level 2, which refers to securities not traded in an active market but for which observable market inputs are readily available and Level 3, which refers to other assets valued based on significant unobservable inputs. In 2009, Level 3 assets were comprised of Brazilian real estate investment assets of $23 million and relate to the Petros Plan (a multiple-employer plan) of Bunge's Fosfertil investment (see Note 3 of the notes to the consolidated financial statements). The assets of the Petros Plan were pooled, managed and administered by Petros. Bunge did not have control over the invested assets therefore additional Level 3 disclosure was not practicable at December 31, 2009.

        The fair values of Bunge's U.S. and foreign defined benefit pension plans' assets as of the measurement date for 2010 and 2009, by category, are as follows:

(US$ in millions)   Fair Value Measurements at December 31, 2010  
Asset Category   Total   Quoted Prices in Active
Markets for Identical
Assets (Level 1)
  Significant
Observable
Inputs (Level 2)
  Significant
Unobservable
Inputs (Level 3)
 
 
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
 

Equities:

                                                 

Mutual Funds (1)

  $ 213   $ 20   $ 213   $ 1   $   $ 19   $   $  

Fixed income securities:

                                                 

Mutual Funds (2)

    117     95     65         52     46         49  
                                   

Total

  $ 330   $ 115   $ 278   $ 1   $ 52   $ 65   $   $ 49  
                                   

 

(US$ in millions)   Fair Value Measurements at December 31, 2009  
Asset Category   Total   Quoted Prices in Active
Markets for Identical
Assets (Level 1)
  Significant
Observable
Inputs (Level 2)
  Significant
Unobservable
Inputs (Level 3)
 
 
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
  U.S.
Pension
Benefits
  Foreign
Pension
Benefits
 

Cash

  $ 4   $   $ 4   $   $   $   $   $  

Equities:

                                                 

Mutual Funds (1)

    247     153     247     138         15          

Fixed income securities:

                                                 

Mutual Funds (2)

    47     317             47     317          

Real estate

        23                         23  
                                   

Total

  $ 298   $ 493   $ 251   $ 138   $ 47   $ 332   $   $ 23  
                                   

(1)
This category represents a portfolio of equity investments comprised of equity index funds that invest in U.S. equities and non-U.S. equities. The U.S. equities are comprised of investments focusing on large, mid and small cap companies and non-U.S. equities are comprised of international, emerging markets and real estate investment trusts.

(2)
This category represents a portfolio of fixed income investments in mutual funds comprised of investment grade U.S. government bonds and notes, foreign government bonds and corporate bonds from diverse industries.

F-62



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Pension Plans (Continued)

(US$ in millions)
  Fair Value
Measurements
Using Significant
Unobservable
Input (Level 3)
 
 
  Insured  
 
  Asset  

Beginning balance, January 1, 2010

  $  

Actual return on plan assets:

       

Relating to assets still held at December 31, 2010

     

Relating to assets sold during 2010

     

Purchase, sales and settlements

     

Transfers into Level 3 (1)

  $ 49  

Ending balance, December 31, 2010

  $ 49  

(1)
At December 31, 2010, there was a transfer in of a plan previously accounted for as a defined contribution plan. This plan's assets are classified as insured assets and are held by a collective insurance fund. Bunge does not actively participate in the administration or the asset management of the collective fund.

        Bunge expects to contribute $20 million and $9 million, respectively, to its U.S. and foreign based defined benefit pension plans in 2011.

        The following benefit payments, which reflect future service as appropriate, are expected to be paid related to U.S. and foreign defined benefit pension plans:

(US$ in millions)
  U.S. Pension
Benefit Payments
  Foreign Pension
Benefit Payments
 

2011

  $ 17   $ 8  

2012

    18     8  

2013

    19     8  

2014

    21     8  

2015

    24     9  

2016-2020

    149     47  

        Employee Defined Contribution Plans—Bunge also makes contributions to qualified defined contribution plans for eligible employees. Contributions to these plans amounted to $12 million, $17 million and $16 million in 2010, 2009 and 2008, respectively.

20. Postretirement Healthcare Benefit Plans

        Certain U.S. and Brazil based subsidiaries of Bunge have benefit plans to provide certain postretirement healthcare benefits to eligible retired employees of those subsidiaries. The plans require minimum retiree contributions and define the maximum amount the subsidiaries will be obligated to pay under the plans. Bunge's policy is to fund these costs as they become payable.

        Plan Amendments—In 2009, Bunge amended its postretirement healthcare plan in Brazil by increasing contributions from retirees to reduce its exposure to increased costs related to this plan.

F-63



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. Postretirement Healthcare Benefit Plans (Continued)

        Plan Settlements—In 2010, Bunge divested its Brazilian fertilizer nutrients assets (see Note 3 and 19 of the notes to the consolidated financial statements), which resulted in a settlement of approximately $32 million.

        The following table sets forth a reconciliation of the changes in the postretirement healthcare benefit plans' benefit obligations and funded status at December 31, 2010 and 2009. A measurement date of December 31 was used for all plans.

 
  U.S. Postretirement
Healthcare Benefits
December 31,
  Foreign Postretirement
Healthcare Benefits
December 31,
 
(US$ in millions)
  2010   2009   2010   2009  

Change in benefit obligations:

                         

Benefit obligation as of beginning of year

  $ 26   $ 25   $ 111   $ 72  

Service cost

            1     2  

Interest cost

    2     2     10     10  

Actuarial (gain) loss, net

    (6 )   1     12     11  

Employee contributions

    1     1          

Net transfers in

                4  

Plan amendments

                (8 )

Plan settlements/divestitures

            (32 )    

Effect of acquisitions

            1      

Benefits paid

    (3 )   (3 )   (8 )   (6 )

Impact of foreign exchange rates

            5     26  
                   

Benefit obligation as of end of year

  $ 20   $ 26   $ 100   $ 111  
                   

Change in plan assets:

                         

Employer contributions

  $ 2   $ 2   $ 8   $ 6  

Employee contributions

    1     1          

Benefits paid

    (3 )   (3 )   (8 )   (6 )
                   

Fair value of plan assets as of end of year

  $   $   $   $  
                   

Funded status and net amounts recognized:

                         

Plan assets less than benefit obligation

  $ (20 ) $ (26 ) $ (100 ) $ (111 )

Net liability recognized in the balance sheet

  $ (20 ) $ (26 ) $ (100 ) $ (111 )
                   

Amounts recognized in the balance sheet consist of:

                         

Current liabilities

  $ (2 ) $ (3 ) $ (8 ) $ (7 )

Non-current liabilities

    (18 )   (23 )   (92 )   (104 )
                   

Net liability recognized

  $ (20 ) $ (26 ) $ (100 ) $ (111 )
                   

        Included in accumulated other comprehensive income at December 31, 2010 are the following amounts for U.S. and foreign postretirement healthcare benefit plans that have not yet been recognized in net periodic benefit costs: unrecognized prior service credit of $1 million ($1 million, net of tax) and $6 million ($4 million, net of tax), respectively, and unrecognized actuarial gain (loss) of $1 million ($1 million, net of tax) and $(13) million (($8) million, net of tax), respectively. Bunge expects to

F-64



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. Postretirement Healthcare Benefit Plans (Continued)

recognize unrecognized prior service credits in 2011 of $1 million ($1 million, net of tax) and unrecognized actuarial losses of $1 million ($1 million, net of tax) as components of net periodic pension cost for its postretirement healthcare benefit plans

        The components of net periodic benefit costs for U.S. and foreign postretirement healthcare benefit plans are as follows:

 
  U.S. Postretirement Healthcare Benefits
Year Ended December 31,
  Foreign Postretirement Healthcare
Benefits Year Ended December 31,
 
(US$ in millions)
  2010   2009   2008   2010   2009   2008  

Service cost

  $   $   $   $ 1   $ 2   $ 1  

Interest cost

    2     2     1     10     10     6  

Amortization of prior service cost

                (1 )        

Amortization of net loss

                2         1  

Settlement gain recognized

                (26 )        
                           

Net periodic benefit costs

  $ 2   $ 2   $ 1   $ (14 ) $ 12   $ 8  
                           

        The weighted-average discount rates used in determining the actuarial present value of the accumulated benefit obligations under the U.S. and foreign postretirement healthcare benefit plans are as follows:

 
  U.S. Postretirement
Healthcare Benefits
December 31,
  Foreign Postretirement
Healthcare Benefits
December 31,
 
 
  2010   2009   2010   2009  

Discount rate

    5.3 %   5.8 %   10.8 %   11.3 %

        The weighted-average discount rate assumptions used in determining the net periodic benefit costs under the U.S. and foreign postretirement healthcare benefit plans are as follows:

 
  U.S. Postretirement
Healthcare Benefits
Year Ended
December 31,
  Foreign Postretirement
Healthcare Benefits
Year Ended
December 31,
 
 
  2010   2009   2008   2010   2009   2008  

Discount rate

    5.8 %   6.5 %   6.4 %   11.3 %   12.4 %   9.3 %

        At December 31, 2010, for measurement purposes related to U.S. plans, an 11.18% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2011, decreasing to 4.50% by 2029, remaining at that level thereafter. At December 31, 2009, for measurement purposes related to U.S. plans, a 12% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2010. For foreign plans, the assumed annual rate of increase in the per capita cost of covered healthcare benefits averaged 8.07% and 8.95% for 2010 and 2009, respectively.

F-65



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. Postretirement Healthcare Benefit Plans (Continued)

        A one-percentage point change in assumed healthcare cost trend rates would have the following effects:

(US$ in millions)
  One percentage
point increase
  One percentage
point decrease
 

Effect on total service and interest cost—U.S. plans

  $   $  

Effect on total service and interest cost—Foreign plans

  $ 1   $ (1 )

Effect on postretirement benefit obligation—U.S. plans

  $ 1   $ (1 )

Effect on postretirement benefit obligation—Foreign plans

  $ 12   $ (10 )

        Bunge expects to contribute $2 million to its U.S. postretirement healthcare benefit plan and $8 million to its foreign postretirement healthcare benefit plans in 2011.

        The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:

(US$ in millions)
  U.S. Postretirement
Healthcare Benefit
Expected Payments
  Foreign Postretirement
Healthcare Benefit
Expected Payments
 

2011

  $ 2   $ 8  

2012

    2     8  

2013

    2     8  

2014

    2     9  

2015

    2     9  

2016-2020

    7     51  

21. Related Party Transactions

        Notes receivable—In December 2009, Bunge sold its investment in Saipol to the joint venture partner Sofiproteol. The note receivable from Sofiproteol will be repaid in four equal annual installments, with the first payment collected in January 2010.

        Bunge holds a note receivable under a revolving credit facility from Bunge-Ergon Vicksburg LLC, a 50% owned U.S. joint venture. The amounts outstanding were $24 million and $19 million at December 31, 2010 and 2009, respectively. This note matures in May 2011 with interest payable at a rate of LIBOR plus 2.0%.

        Bunge holds a note receivable from Southwest Iowa Renewable Energy, a 26% owned U.S. investment, having a carrying value of approximately $34 million and $27 million at December 31, 2010 and 2009, respectively. This note matures in August 2014 with interest payable at a rate of LIBOR plus 7.5%.

        Bunge holds a note receivable from Eastern Agro Investment, Ltd., a 50% owned investment, having a carrying value of approximately $11 million at December 31, 2010. This note matures in February 2011 with interest payable at a rate of 3.78%.

        Bunge holds a note receivable from Biodiesel Bilbao S.A., a 20% owned investment, having a carrying value of approximately $7 million at December 31, 2010. This note matures in December 2015 with interest payable at a rate of EURIBOR plus 2.0%.

F-66



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

21. Related Party Transactions (Continued)

        Bunge has recognized interest income related to these notes receivable of approximately $4 million, $1 million and $6 million for the years ended December 31, 2010, 2009 and 2008, respectively, in interest income in its consolidated statements of income. Notes receivable at December 31, 2010 and 2009, with carrying values of $90 million and $47 million, respectively, are included in other current assets or other non-current assets in the consolidated balance sheets, according to payment terms.

        Notes payable—Bunge has a note payable with a carrying value of $7 million and $8 million at December 31, 2010 and 2009, respectively, to a joint venture partner in one of its port terminals in Brazil. The real-denominated note is payable on demand with interest payable annually at the Brazilian interbank deposit rate (9.75% at December 31, 2010). In addition, Bunge had a note payable to a U.S. joint venture in the U.S. The note was paid in full at December 31, 2010. At December 31, 2009, this note had a carrying value of $5 million with interest payable at LIBOR plus 2.0%. The notes payable are included in other current liabilities in Bunge's consolidated balance sheets at December 31, 2010 and 2009. Bunge recorded interest expense of approximately $1 million, $1 million and $2 million in 2010, 2009 and 2008, respectively, related to these notes.

        Other—Bunge purchased soybeans, other commodity products and phosphate-based products from certain of its unconsolidated joint ventures, which totaled $525 million, $1,073 million and $1,059 million for the years ended December 31, 2010, 2009 and 2008, respectively. Bunge also sold soybean commodity products and other commodity products to certain of these joint ventures, which totaled $478 million, $596 million and $335 million for the years ended December 31, 2010, 2009 and 2008, respectively. At December 31, 2010 and 2009, Bunge had approximately $69 million and $23 million, respectively, of receivables from these joint ventures recorded in trade accounts receivable in the consolidated balance sheets. In addition, at December 31, 2010 and 2009, Bunge had approximately $42 million and $25 million, respectively, of payables to these joint ventures recorded in trade accounts payable in the consolidated balance sheets. Bunge believes these transactions are recorded at values similar to those with third parties.

        Mutual Investment Limited—Bunge is a party to an administrative services agreement with Mutual Investment Limited, Bunge's former parent company prior to the 2001 initial public offering, under which Bunge provides corporate and administrative services to Mutual Investment Limited, including financial, legal, tax, accounting and insurance. The agreement has a quarterly term that is automatically renewable unless terminated by either party. Mutual Investment Limited pays Bunge for the services rendered on a quarterly basis based on Bunge's direct and indirect costs of providing the services. In 2010, 2009 and 2008, Mutual Investment Limited paid Bunge $60 thousand, $139 thousand and $34 thousand, respectively, under this agreement.

22. Commitments and Contingencies

        Bunge is party to a large number of claims and lawsuits, primarily tax and labor claims in Brazil, arising in the normal course of business. Bunge records liabilities related to its general claims and lawsuits when the exposure item becomes probable and can be reasonably estimated. After taking into account the recorded liabilities for these matters, management believes that the ultimate resolution of such matters will not have a material adverse effect on Bunge's financial condition, results of

F-67



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22. Commitments and Contingencies (Continued)

operations or liquidity. Included in other non-current liabilities at December 31, 2010 and 2009 are the following accrued liabilities:

 
  December 31,  
(US$ in millions)
  2010   2009  

Tax claims

  $ 127   $ 135  

Labor claims

    78     97  

Civil and other

    114     110  
           

Total

  $ 319   $ 342  
           

        Tax Claims—The tax claims relate principally to claims against Bunge's Brazilian subsidiaries, including primarily value-added tax claims (ICMS, IPI, PIS and COFINS, of which PIS and COFINS are used by the Brazilian government to fund social contribution programs). The determination of the manner in which various Brazilian federal, state and municipal taxes apply to the operations of Bunge is subject to varying interpretations arising from the complex nature of Brazilian tax law.

        Labor Claims—The labor claims relate principally to claims against Bunge's Brazilian subsidiaries. The labor claims primarily relate to dismissals, severance, health and safety, salary adjustments and supplementary retirement benefits.

        Civil and Other—The civil and other claims relate to various disputes with third parties, including suppliers and customers.

        Guarantees—Bunge has issued or was a party to the following guarantees at December 31, 2010:

(US$ in millions)
  Maximum
Potential Future
Payments
 

Customer financing (1)

  $ 71  

Unconsolidated affiliates financing (2)

    56  
       

Total

  $ 127  
       

(1)
Bunge has issued guarantees to third parties in Brazil related to amounts owed these third parties by certain of Bunge's customers. The terms of the guarantees are equal to the terms of the related financing arrangements, which are generally one year or less, with the exception of guarantees issued under certain Brazilian government programs, primarily from 2006 and 2007, where terms are up to five years. In the event that the customers default on their payments to the third parties and Bunge would be required to perform under the guarantees, Bunge has obtained collateral from the customers. At December 31, 2010, Bunge had approximately $58 million of tangible property that had been pledged to Bunge as collateral against certain of these refinancing arrangements. Bunge evaluates the likelihood of the customer repayments of the amounts due under these guarantees based upon an expected loss analysis and records the fair value of such guarantees as an obligation in its consolidated financial statements. Bunge's recorded obligation related to these outstanding guarantees was $8 million at December 31, 2010.

F-68



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22. Commitments and Contingencies (Continued)

(2)
Bunge issued guarantees to certain financial institutions related to debt of certain of its unconsolidated joint ventures. The terms of the guarantees are equal to the terms of the related financings which have maturity dates in 2012 and 2018. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. At December 31, 2010, Bunge's recorded obligation related to these guarantees was $4 million.

        In addition, Bunge Limited has provided full and unconditional parent level guarantees of the indebtedness outstanding under certain senior credit facilities and senior notes entered into, or issued by, its 100% owned subsidiaries. At December 31, 2010, Bunge's consolidated balance sheet includes debt with a carrying amount of $3,405 million related to these guarantees. This debt includes the senior notes issued by two of Bunge's 100% owned finance subsidiaries, Bunge Limited Finance Corp. and Bunge N.A. Finance L.P. There are no significant restrictions on the ability of Bunge Limited Finance Corp., Bunge N.A. Finance L.P. or any other Bunge subsidiary to transfer funds to Bunge Limited.

        Freight Supply Agreements—In the ordinary course of business, Bunge enters into time charter agreements for the use of ocean freight vessels and freight service on railroad lines for the purpose of transporting agricultural commodities. In addition, Bunge sells the right to use these ocean freight vessels when excess freight capacity is available. These agreements generally range from two months to approximately five years, in the case of ocean freight vessels, depending on market conditions, and 5 to 17 years in the case of railroad services. Future minimum payment obligations due under these agreements are as follows:

(US$ in millions)
   
 

Less than 1 year

  $ 302  

1 to 3 years

    269  

3 to 5 years

    188  

After five years

    1,046  
       

Total

  $ 1,805  
       

        Actual amounts paid under these contracts may differ due to the variable components of these agreements and the amount of income earned on the sales of excess capacity. The agreements for the freight service on railroad lines require a minimum monthly payment regardless of the actual level of freight services used by Bunge. The costs of Bunge's freight supply agreements are typically passed through to the customers as a component of the prices charged for its products.

        Also in the ordinary course of business, Bunge enters into relet agreements related to ocean freight vessels. Such relet agreements are similar to sub-leases. Bunge received approximately $416 million in 2010 and expects to receive payments of approximately $23 million in 2011 under such relet agreements.

        Commitments—At December 31, 2010, Bunge had approximately $12 million of purchase commitments related to its inventories and $84 million of contractual commitments related to construction in progress.

F-69



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. Shareholders' Equity

        Share Repurchase Program—On June 8, 2010, Bunge announced that its Board of Directors had approved a program for the repurchase of up to $700 million of Bunge's issued and outstanding common shares. The program runs through December 31, 2011. Bunge repurchased 6,714,573 common shares, for approximately $354 million through December 1, 2010. There are no shares in treasury as of December 31, 2010.

        Common shares—On December 1, 2010, Bunge used its 6,714,573 repurchased common shares and issued an additional 1,702,642 common shares in the conversion of its then outstanding 862,455 (mandatory convertible preference shares), plus accumulated and unpaid dividends. On the mandatory conversion date of December 1, 2010, as a result of adjustments to the initial conversion rates because cash dividends paid on Bunge Limited's common shares exceeded certain specified thresholds, each mandatory convertible preference share automatically converted on December 1, 2010 into 9.7596 common shares (which represented a total of 8,417,215 common shares).

        In August 2009, Bunge sold 12,000,000 common shares in a public equity offering, including the exercise in full of the underwriters' over-allotment option, for which it received net proceeds of approximately $761 million after deducting underwriting discounts, commissions and expenses. Bunge used the net proceeds of this offering to repay indebtedness and for other general corporate purposes.

        Mandatory Convertible Preference Shares—Prior to the mandatory conversion date of December 1, 2010, Bunge had 862,455 mandatory convertible preference shares, with a par value $0.01 per share and with an initial liquidation preference of $1,000, issued and outstanding. At any time prior to December 1, 2010, holders could elect to convert the mandatory convertible preference shares at the minimum conversion rate of 8.2416 common shares per mandatory convertible preference share, subject to additional certain anti-dilution adjustments. The mandatory convertible preference shares accrued dividends at an annual rate of 5.125%. Dividends were cumulative from the date of issuance and were payable, quarterly in arrears, on each March 1, June 1, September 1 and December 1, when, as and if declared by Bunge's board of directors. Accumulated but unpaid dividends on the mandatory convertible preference shares did not bear interest. Dividends were paid in cash with the final dividend paid on December 1, 2010.

        Cumulative Convertible Perpetual Preference Shares—Bunge has 6,900,000, 4.875% cumulative convertible perpetual preference shares (convertible preference shares), par value $0.01 outstanding as of December 31, 2010. Each convertible preference share has an initial liquidation preference of $100 per share plus accumulated unpaid dividends up to a maximum of an additional $25 per share. As a result of adjustments made to the initial conversion price because cash dividends paid on Bunge Limited's common shares exceeded certain specified thresholds, each convertible preference share is convertible at any time at the holder's option into approximately 1.0938 common shares based on a conversion price of $91.43 per convertible preference share, subject in each case to certain specified anti-dilution adjustments (which represents 7,547,220 Bunge Limited common shares as of December 31, 2010).

        At any time on or after December 1, 2011, if the closing market price of Bunge's common shares equals or exceeds 130% of the conversion price of the convertible preference shares, for 20 trading days within any period of 30 consecutive trading days (including the last trading day of such period), Bunge may elect to cause all outstanding convertible preference shares to be automatically converted

F-70



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. Shareholders' Equity (Continued)

into the number of common shares that are issuable at the conversion price. The convertible preference shares are not redeemable by Bunge at any time.

        The convertible preference shares accrue dividends at an annual rate of 4.875%. Dividends are cumulative from the date of issuance and are payable, quarterly in arrears, on each March 1, June 1, September 1 and December 1, commencing on March 1, 2007, when, as and if declared by Bunge's board of directors. The dividends may be paid in cash, common shares or a combination thereof. Accumulated but unpaid dividends on the convertible preference shares will not bear interest. In 2010 and 2009, Bunge recorded $67 million and $78 million, respectively, of dividends on its convertible preference shares.

        Accumulated Other Comprehensive Income (Loss)—The following table summarizes the balances of related after tax components of accumulated other comprehensive income (loss):

(US$ in millions)
  Foreign
Exchange
Translation
Adjustment (1)
  Deferred
Gain (Loss)
on Hedging
Activities
  Treasury
Rate Lock
Contracts
  Pension
and Other
Postretirement
Liability
Adjustment
  Unrealized
Gain (Loss)
on
Investments
  Accumulated
Other
Comprehensive
Income (Loss)
 

Balance, January 1, 2008

  $ 707   $ 12   $ (11 ) $ (43 ) $ 4   $ 669  

Other comprehensive income (loss), net of tax

    (1,346 )   (92 )   2     (36 )   (8 )   (1,480 )
                           

Balance, December 31, 2008

    (639 )   (80 )   (9 )   (79 )   (4 )   (811 )

Other comprehensive income (loss), net of tax

    1,062     75     2     (11 )   2     1,130  
                           

Balance, December 31, 2009

    423     (5 )   (7 )   (90 )   (2 )   319  

Other comprehensive income, net of tax

    247     3     7     7         264  
                           

Balance, December 31, 2010

  $ 670   $ (2 ) $   $ (83 ) $ (2 ) $ 583  
                           

(1)
Bunge has significant operating subsidiaries in Brazil, Argentina and Europe. The functional currency of Bunge's subsidiaries is the local currency. The assets and liabilities of these subsidiaries are translated into U.S. dollars from local currency at month-end exchange rates, and the resulting foreign exchange translation gains and losses are recorded in the consolidated balance sheets as a component of accumulated other comprehensive income (loss).

F-71



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. Shareholders' Equity (Continued)

        Comprehensive Income (Loss)—The following table summarizes the components of comprehensive income (loss):

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Net income

  $ 2,388   $ 335   $ 1,326  

Other comprehensive income (loss):

                   

Foreign exchange translation adjustment, net of tax

    223     1,252     (1,527 )

Unrealized gains (losses) on commodity futures and foreign exchange contracts designated as cash flow hedges, net of tax (expense) benefit $(11), $(10), $31

    21     25     (68 )

Unrealized gains (losses) on investments, net of tax (expense) benefit $0, $(1), $4

        2     (8 )

Reclassification of realized net (gains) losses to net income, net of tax expense (benefit) $11, $(30), $15

    (11 )   52     (22 )

Pension adjustment, net of tax (expense) benefit $(5), $11, $10

    5     (27 )   (15 )

Other postretirement healthcare subsidy tax deduction adjustment

    2          
               

Total comprehensive income (loss)

    2,628     1,639     (314 )

Less: Comprehensive income attributable to noncontrolling interest

    (10 )   (148 )   (102 )
               

Total comprehensive income (loss) attributable to Bunge

  $ 2,618   $ 1,491   $ (416 )
               

        Transfers to/from Noncontrolling Interest—On May 27, 2010, Bunge sold its Brazilian fertilizer nutrients assets, including its direct and indirect 54% ownership interest in the voting common shares and 36% interest in the nonvoting preferred shares of Fosfertil (representing Bunge's right to approximately 42% of the earnings of Fosfertil). See Note 3 of the notes to the consolidated financial statements. Prior to this date, Fosfertil was a consolidated subsidiary of Bunge. Effective as of the sale date and as a result of this transaction, Bunge deconsolidated Fosfertil and derecognized $588 million of noncontrolling interest, which represented approximately 58% of noncontrolling interest in earnings of Fosfertil.

        Bunge is involved in a joint venture to build and operate a grain terminal in Longview, Washington, U.S. Bunge has a 51% controlling interest in the joint venture, which it consolidates. In 2010, the noncontrolling interest holders, which have a 49% interest, made a $61 million capital contribution to this joint venture. Bunge made a proportionate capital contribution, which resulted in no ownership percentage change. In 2009, Bunge received $35 million of capital contributions from the noncontrolling interests, of which $5 million was the initial noncontrolling equity interest upon consolidation by Bunge of this joint venture.

        Effective January 1, 2010, Bunge adopted a FASB issued standard that amends the consolidation guidance that applies to variable interest entities (VIEs). As a result of this adoption, Bunge consolidated AGRI-Bunge, LLC, an agribusiness joint venture which originates grains and operates a Mississippi river terminal in the United States in which Bunge has 50% voting power and a 34%

F-72



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. Shareholders' Equity (Continued)

interest in the equity and earnings. Bunge recorded $3 million of noncontrolling equity interest upon its consolidation of this joint venture in the first quarter of 2010.

        During 2010, there was a net redemption of certain third party investors in a private investment fund consolidated by Bunge. The net redeemed shares were valued at $9 million and represented approximately 30% of the outstanding shares of the fund along with $4 million of dividends representing their share of the cumulative earnings of the fund. This resulted in Bunge's ownership interest in the fund increasing from 31% at December 31, 2009 to 39% at December 31, 2010. In addition in 2010, an inactive joint venture was liquidated which resulted in $2 million of capital returned to noncontrolling interests and dividends of $8 million were recorded, which represented earnings of a non-wholly owned subsidiary. In 2009, certain third party investors in the same private investment fund redeemed their shares in the fund. The shares were valued at $44 million and represented 51% of the outstanding shares of the fund and 100% of the ownership interest of these investors in the fund. Additionally, the investors received $8 million of dividends, which represented their share of the cumulative earnings of the fund. This transaction resulted in Bunge's ownership interest in the fund increasing from 16% at December 31, 2008 to 31% at December 31, 2009.

        During 2009, certain of Bunge's Brazilian subsidiaries primarily involved in its sugar business received approximately $52 million in capital contributions from noncontrolling interests. Bunge made proportionate capital contributions to these subsidiaries, which resulted in no ownership percentage change.

        In 2008, certain of Bunge's Brazilian subsidiaries, which are primarily involved in its sugar business, received approximately $25 million in capital contributions from noncontrolling interests. Bunge's ownership interest in these subsidiaries was not affected by these contributions. In addition in 2008, Bunge recorded $13 million in additional paid-in capital as a result of a final purchase price adjustment relating to the merger of its subsidiaries in Poland. In this transaction, Bunge exchanged 18% of the stock of one of its subsidiaries for additional ownership interests in certain non wholly owned subsidiaries and affiliates, resulting in consolidation of all of these entities by Bunge.

24. Earnings Per Share

        Basic earnings per share is computed by dividing net income available to Bunge common shareholders by the weighted-average number of common shares outstanding, excluding any dilutive effects of stock options, restricted stock unit awards, convertible preference shares and convertible notes during the reporting period. Diluted earnings per share is computed similar to basic earnings per share, except that the weighted-average number of common shares outstanding is increased to include additional shares from the assumed exercise of stock options, restricted stock unit awards and convertible securities and notes, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options, except those which are not dilutive, were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. In addition, Bunge accounts for the effects of convertible securities and convertible notes, using the if-converted method. Under this method, the convertible securities and convertible notes are assumed to be converted and the related dividend or interest expense, net of tax, is added back to earnings, if dilutive.

        On the mandatory conversion date of December 1, 2010, each mandatory convertible preference share, then outstanding, automatically converted into 9.7596 of common shares. At any time prior to

F-73



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

24. Earnings Per Share (Continued)

December 1, 2010, holders could elect to convert the mandatory convertible preference shares at the conversion rate of 8.2416, subject to certain additional anti-dilution adjustments (which represented 7,108,009 common shares prior to December 1, 2010). Each mandatory convertible preference share had a liquidation preference of $1,000 per share. The calculation of diluted earnings per common share for the year ended December 31, 2010 includes the weighted-average common shares that would be issuable upon conversion of the mandatory convertible preference shares, up to the mandatory conversion date of December 1, 2010, as they were dilutive. The calculation of diluted earnings per common share for the year ended December 31, 2008 includes the weighted-average common shares that would have been issuable upon conversion of the mandatory convertible preference shares as they were dilutive (see Note 23 of the notes to the consolidated financial statements). The calculation of diluted earnings per common share for the year ended December 31, 2009 does not include the weighted-average common shares that would be issuable upon conversion of the mandatory convertible preference shares as they were not dilutive.

        In addition, Bunge has 6,900,000 convertible perpetual preference shares outstanding as of December 31, 2010 (see Note 23 of the notes to the consolidated financial statements). Each convertible preference share has an initial liquidation preference of $100 per share and each convertible preference share is convertible, at any time at the holder's option, initially into approximately 1.0938 common shares based on a conversion price of $91.4262 per convertible preference share, subject in each case to certain anti-dilution specified adjustments (which represents 7,547,220 common shares as of December 31, 2010). The calculation of diluted earnings per common share for the year ended December 31, 2009 does not include the weighted-average common shares that would be issuable upon conversion of the convertible perpetual preference shares as they were not dilutive. The calculations of diluted earnings per common share for the years ended December 31, 2010 and 2008 include the weighted-average common shares that would be issuable upon conversion of the convertible perpetual preference shares as they were dilutive.

F-74



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

24. Earnings Per Share (Continued)

        The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2010, 2009 and 2008.

 
  Year Ended December 31,  
(US$ in millions, except for share data)
  2010   2009   2008  

Net income attributable to Bunge

  $ 2,354   $ 361   $ 1,064  

Convertible preference share dividends

    (67 )   (78 )   (78 )
               

Net income available to Bunge common shareholders

  $ 2,287   $ 283   $ 986  
               

Weighted-average number of common shares outstanding:

                   

Basic

    141,191,136     126,448,071     121,527,580  

Effect of dilutive shares:

                   

—stock options and awards (1)

    1,032,143     1,221,751     1,488,899  

—convertible preference shares

    14,051,535         14,574,787  
               

Diluted

    156,274,814     127,669,822     137,591,266  
               

Earnings per common share:

                   

Earnings to Bunge common shareholders—basic

  $ 16.20   $ 2.24   $ 8.11  

Earnings to Bunge common shareholders—diluted

  $ 15.06   $ 2.22   $ 7.73  

(1)
The weighted-average common shares outstanding-diluted excludes approximately 3 million, 2 million and 1 million stock options and contingently issuable restricted stock units, which were not dilutive and not included in the computation of diluted earnings per share for 2010, 2009 and 2008, respectively.

25. Share-Based Compensation

        In 2010, Bunge recognized approximately $22 million and $38 million of compensation expense, related to its stock option and restricted stock unit awards, respectively, in additional paid-in capital for awards classified as equity awards. In 2009, Bunge recognized approximately $16 million and $1 million of compensation expense, related to its stock option and restricted stock unit awards, respectively, in additional paid-in capital for awards classified as equity awards. In 2008, Bunge recognized approximately $16 million and $50 million of compensation expense, related to its stock option and restricted stock unit awards, respectively, in additional paid-in capital for awards classified as equity awards.

        In 2010, there was an insignificant amount of aggregate tax benefit related to share-based compensation. In 2009, the aggregate tax benefit related to share-based compensation was approximately $6 million. In 2008, Bunge reversed an aggregate tax benefit of approximately $5 million related to share-based compensation.

        2009 Equity Incentive Plan and Equity Incentive Plan—In 2009, Bunge established the 2009 Equity Incentive Plan (the 2009 EIP), which was approved by shareholders at the 2009 annual general meeting. Under the 2009 EIP, the compensation committee of Bunge board of directors may grant equity-based awards to officers, employees, consultants and independent contractors. Awards under the 2009 EIP may be in the form of stock options, restricted stock units (performance-based or time-vested) or other equity-based awards. Prior to May 8, 2009, the date of shareholder approval of

F-75



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. Share-Based Compensation (Continued)

the 2009 EIP, Bunge granted equity-based awards under the Equity Incentive Plan (the Equity Incentive Plan), which is a shareholder approved plan. Under the Equity Incentive Plan, the compensation committee of the Bunge Limited board of directors was authorized to grant equity-based awards to officers, employees, consultants and independent contractors. The Equity Incentive Plan provided that awards may be in the form of stock options, restricted stock units (performance-based or time-vested) or other equity-based awards. Effective May 8, 2009, no further awards will be granted under the Equity Incentive Plan.

        (i) Stock Option Awards—Stock options to purchase Bunge Limited common shares are non-statutory and granted with an exercise price equal to the market value of Bunge Limited common shares on the date of grant, as determined under the Equity Incentive Plan or the 2009 EIP, as applicable. Options expire ten years after the date of grant and generally vest and become exercisable on a pro-rata basis over a three-year period on each anniversary of the date of the grant. Vesting may be accelerated in certain circumstances as provided in the 2009 EIP and the Equity Incentive Plan. Compensation expense is recognized for option grants beginning in 2006 on a straight-line basis and for options granted prior to 2006 is recognized on an accelerated basis over the vesting period of each grant.

        (ii) Restricted Stock Units—Performance-based restricted stock units and time-vested restricted stock units are granted at no cost. Performance-based restricted stock units are awarded at the beginning of a three-year performance period and vest following the end of the three-year performance period. Performance-based restricted stock units fully vest on the third anniversary of the date of grant. Payment of the units is subject to Bunge attaining certain targeted cumulative earnings per share (EPS) during the three-year performance period. Targeted cumulative EPS under the Equity Incentive Plan or the 2009 EIP, as applicable, is based on income per share from continuing operations adjusted for non-recurring charges and other one-time events at the discretion of the compensation committee. Vesting may be accelerated in certain circumstances as provided in the 2009 EIP and in the Equity Incentive Plan. Payment of the award is calculated based on a sliding scale whereby 50% of the performance-based restricted stock unit award vests if the minimum performance target is achieved. No vesting occurs if actual cumulative EPS is less than the minimum performance target. The award is capped at 200% of the grant for actual performance in excess of the maximum performance target for an award. Awards are paid solely in Bunge Limited common shares.

        Time-vested restricted stock units are subject to vesting periods varying from three to five years and vest on either a pro-rata basis over the applicable vesting period or 100% at the end of the applicable vesting period, as determined at the time of grant by the compensation committee. Vesting may be accelerated in certain circumstances as provided in the 2009 EIP and the Equity Incentive Plan. Time-vested restricted stock units are paid out in Bunge Limited common shares upon satisfying the applicable vesting terms.

        At the time of payout, a participant holding a vested restricted stock unit will also be entitled to receive corresponding dividend equivalent share payments. Dividend equivalents on performance-based restricted stock units are capped at the target level. Compensation expense for restricted stock units is equal to the market value of Bunge Limited common shares at the date of grant and is recognized on a straight-line basis over the vesting period of each grant.

F-76



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. Share-Based Compensation (Continued)

        2007 Non-Employee Directors' Equity Incentive Plan—Bunge has established the Bunge Limited 2007 Non-Employee Directors' Equity Incentive Plan (the 2007 Directors' Plan), a shareholder approved plan. Under the 2007 Directors' Plan, the compensation committee may grant equity based awards to non-employee directors of Bunge Limited. Awards may consist of restricted stock, restricted stock units, deferred restricted stock units and non-statutory stock options.

        (i) Stock Option Awards—Stock options to purchase Bunge Limited common shares are granted with an exercise price equal to the market value of Bunge Limited common shares on the date of grant, as determined under the 2007 Directors' Plan. Options expire ten years after the date of grant and generally vest and are exercisable on the third anniversary of the date of grant. Vesting may be accelerated in certain circumstances as provided in the 2007 Directors' Plan. Compensation expense is recognized for options on a straight-line basis.

        (ii) Restricted Stock Units—Restricted stock units and deferred restricted stock units are granted at no cost. Restricted stock units generally vest on the third anniversary of the date of grant and payment is made in Bunge Limited common shares. Deferred restricted stock units generally vest on the first anniversary of the date of grant and payment is deferred until after the third anniversary of the date of grant and made in Bunge Limited common shares. Vesting may be accelerated in certain circumstances as provided in the 2007 Directors' Plan.

        At the time of payment, a participant holding a restricted stock unit or deferred restricted stock unit will also be entitled to receive corresponding dividend equivalent share payments. Compensation expense is equal to the market value of Bunge Limited common shares at the date of grant and is recognized on a straight-line basis over the vesting period of each grant.

        Non-Employee Directors' Equity Incentive Plan—Prior to May 25, 2007, the date of shareholder approval of the 2007 Directors' Plan, Bunge granted equity-based awards to its non-employee directors under the Non-Employee Directors' Equity Incentive Plan (the Directors' Plan) which is a shareholder approved plan. The Directors' Plan provides for awards of non-statutory stock options to non-employee directors. The options vest and are exercisable on the January 1 that follows the date of grant. Vesting may be accelerated in certain circumstances as provided in the Directors' Plan. Compensation expense is recognized for option grants beginning in 2006 on a straight-line basis and for options granted prior to 2006 is recognized on an accelerated basis over the vesting period of each grant. Effective May 25, 2007, no further awards will be granted under the Directors' Plan.

        The fair value of each stock option granted under all of Bunge's equity incentive plans is estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses the assumptions noted in the following table. The expected volatility of Bunge's common shares is based on historical volatility calculated using the daily closing price of Bunge's shares up to the date of grant. Bunge uses historical employee exercise behavior for valuation purposes. The expected option term of options granted represents the period of time that the options granted are expected to be outstanding and is based on historical experience giving consideration for the contractual terms, vesting periods and expectations of future employee behavior. The risk-free interest rate is based on the rate of U.S.

F-77



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. Share-Based Compensation (Continued)

Treasury zero-coupon bonds with a term equal to the expected option term of the option grants on the date of grant.

Assumptions:
  December 31,
2010
  December 31,
2009
  December 31,
2008
 

Expected option term (in years)

    5.43     5.14     5.07  

Expected dividend yield

    1.36 %   1.47 %   0.60 %

Expected volatility

    44.34 %   43.35 %   28.56 %

Risk-free interest rate

    2.56 %   2.31 %   2.58 %

        A summary of option activity under the plans as of December 31, 2010 and changes during the year then ended is presented below.

Options
  Shares   Weighted-Average
Exercise Price
  Weighted-Average
Remaining
Contractual Term
  Aggregate
Intrinsic
Value
 

(US$ in millions)

                         

Outstanding at January 1, 2010

    4,658,629   $ 56.32              

Granted

    965,600   $ 61.60              

Exercised

    (171,643 ) $ 33.00              

Forfeited or expired

    (209,755 ) $ 74.52              
                         

Outstanding at December 31, 2010

    5,242,831   $ 57.34     5.76   $ 76  
                       

Exercisable at December 31, 2010

    3,708,035   $ 54.78     4.46   $ 66  
                       

        The weighted-average grant date fair value of options granted during 2010, 2009 and 2008 was $23.70, $18.68 and $31.09, respectively. The total intrinsic value of options exercised during 2010, 2009 and 2008 was approximately $4 million, $2 million and $8 million, respectively. The excess tax benefit classified as a financing cash flow for 2010, 2009 and 2008 was not significant.

        As of December 31, 2010, there was $21 million of total unrecognized compensation cost related to non-vested stock options granted under the Equity Incentive Plans expected to be recognized approximately over the next two years.

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BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. Share-Based Compensation (Continued)

        A summary of Bunge's restricted stock units under the plans as of December 31, 2010 and changes during 2010 is presented below:

Restricted Stock Units
  Shares   Weighted-Average
Grant-Date Fair
Value
 

Restricted stock units at January 1, 2010 (1)

    1,081,544   $ 75.15  

Granted

    583,753   $ 58.67  

Vested/issued (2)

    (348,492 ) $ 80.42  

Forfeited/cancelled (2)

    (182,052 ) $ 65.78  
             

Restricted stock units at December 31, 2010 (1)

    1,134,753   $ 67.15  
             

(1)
Excludes accrued unvested corresponding dividends, which are payable in shares upon vesting in Bunge's common shares. As of December 31, 2010, there were 14,888 unvested corresponding dividends accrued. Accrued unvested corresponding dividends are revised upon non-achievement of performance targets.

(2)
During 2010, Bunge issued 348,492 common shares, net of common shares withheld to cover taxes, including related common shares representing accrued corresponding dividends, with a weighted-average fair value of $60.39 per share. In 2010, payment/issuance of approximately 4,340 vested restricted stock units and related earned dividends were deferred by participants. As of December 31, 2010, Bunge has approximately 24,003 deferred common share units including common shares representing accrued corresponding dividends. During 2010, Bunge canceled in the aggregate approximately 167,348 shares related primarily to performance-based restricted stock unit awards that were withheld to cover payment of employee related taxes and performance-based restricted stock unit awards did not vest due to non-achievement of performance targets.

        The weighted-average grant date fair value of restricted stock units granted during 2010, 2009 and 2008 was $58.67, $50.63 and $110.07, respectively.

        At December 31, 2010, there was approximately $36 million of total unrecognized compensation cost related to restricted stock units share-based compensation arrangements granted under the 2009 EIP, the Equity Incentive Plan and the 2007 Non-Employee Directors' Plan, which will be recognized over the next two years. The total fair value of restricted stock units vested during 2010 was approximately $28 million.

        Common Shares Reserved for Share-Based Awards—The 2007 Directors' Plan and the 2009 EIP provide that 600,000 and 10,000,000 common shares, respectively, are reserved for grants of stock options, stock awards and other awards under the plans. At December 31, 2010, 453,775 and 8,554,697 common shares were available for future grants under the 2007 Directors' Plan and the 2009 EIP, respectively.

F-79



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26. Lease Commitments

        Bunge routinely leases storage facilities, transportation equipment and office facilities under operating leases. Minimum lease payments under non-cancelable operating leases at December 31, 2010 are as follows:

(US$ in millions)
   
 

2011

  $ 165  

2012

    111  

2013

    96  

2014

    44  

2015

    39  

Thereafter

    187  
       

Total

  $ 642  
       

        Rent expense under non-cancelable operating leases was $157 million, $146 million and $140 million for 2010, 2009 and 2008, respectively.

        In addition, Bunge has land lease agreements for the production of sugarcane. These agreements have an average life of six to seven years and cover approximately 133,000 hectares of land. Amounts owed under these agreements are dependent on several variables including the quantity of sugarcane produced per hectare, the total recoverable sugar (TRS) per ton of sugarcane produced and the price for each kilogram of TRS as determined by Consecena, the Sao Paulo state sugarcane and sugar and ethanol council. The related expense included in cost of goods sold in the consolidated statement of income for 2010 was $61 million.

27. Operating Segments and Geographic Areas

        Sugar and Bioenergy segment—Bunge participates in the sugar and sugarcane-based ethanol industries through its sugar trading and merchandising business, headquartered in London, and its sugarcane milling operations in Brazil. In addition, Bunge has investments in entities that produce corn-based ethanol in the United States. Bunge wholly-owns or has majority interests in seven sugarcane mills in Brazil, five of which were acquired in the Moema acquisition in February 2010 (see Note 2 of the notes to the consolidated financial statements). Bunge also has an 80% stake in a greenfield mill, which commenced commercial operations in the fourth quarter of 2010. Most of the mills allow Bunge to adjust production, within certain capacity limits, between sugar (raw and crystal) and sugarcane-based ethanol (hydrous and anhydrous), allowing Bunge to readily respond to changes in customer demand and market prices within each of these product lines. Bunge also has cogeneration facilities at all mills, which produce energy through the burning of sugarcane bagasse in boilers, enabling these mills to be self-sufficient for their energy needs and, in most cases, to sell surplus energy to third parties such as local utilities.

        In the first quarter of 2010, Bunge began reporting the results of its sugar and bioenergy businesses as a reportable segment. Prior to 2010, sugar and bioenergy results and assets were included in the agribusiness segment. Accordingly, amounts for prior years presented have been reclassified to conform to the current year segment presentation.

        As a result, Bunge has five reportable segments—agribusiness, sugar and bioenergy, edible oil products, milling products and fertilizer—which are organized based upon similar economic

F-80



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

27. Operating Segments and Geographic Areas (Continued)

characteristics and are similar in nature of products and services offered, the nature of production processes, the type and class of customer and distribution methods. The agribusiness segment is characterized by both inputs and outputs being agricultural commodities and thus high volume and low margin. The sugar and bioenergy segment involves sugar origination, milling, trading and merchandising businesses, as well as sugar and sugarcane-based ethanol production and corn-based ethanol investments and activities. Following the completion of the sale of Bunge's Brazilian fertilizer nutrients assets in May 2010, the activities of the fertilizer segment include its blending and distribution business in Brazil as well as its operations in Argentina and the United States (see Note 3 of the notes to the condensed consolidated financial statements). Additionally, Bunge has retained its 50% interest in its fertilizer joint venture in Morocco. The edible oil products segment involves the manufacturing and marketing of products derived from vegetable oils. The milling products segment involves the manufacturing and marketing of products derived primarily from wheat and corn.

        The "Unallocated" column in the following table contains the reconciliation between the totals for reportable segments and Bunge consolidated totals, which consists primarily of corporate items not allocated to the operating segments, inter-segment eliminations. Transfers between the segments are

F-81



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

27. Operating Segments and Geographic Areas (Continued)

generally valued at market. The revenues generated from these transfers are shown in the following table as "Inter-segment revenues."

(US$ in millions)
  Agribusiness   Sugar and
Bioenergy
  Edible Oil
Products
  Milling
Products
  Fertilizer   Unallocated   Total  

2010

                                           

Net sales to external customers

  $ 30,138   $ 4,455   $ 6,783   $ 1,605   $ 2,726   $   $ 45,707  

Inter-segment revenues

    3,902     24     96     41     115     (4,178 )    

Gross profit(1)

    1,660     101     427     168     155         2,511  

Foreign exchange gain (loss)

    (4 )   30         (1 )   (23 )       2  

Equity in earnings of affiliates

    18     (6 )       3     12         27  

Noncontrolling interest(2)

    (47 )   9     (5 )       (35 )   44     (34 )

Other income (expense)

    2     (8 )   (10 )   5     (15 )       (26 )

Segment EBIT(3)

    840     (13 )   80     67     2,344     (90 )   3,228  

Depreciation, depletion and amortization expense

    (179 )   (116 )   (78 )   (27 )   (43 )       (443 )

Investments in affiliates

    509     20     15     13     52         609  

Total assets

    16,100     4,679     2,243     771     2,208         26,001  

Capital expenditures

    409     365     66     23     182     27     1,072  

2009

                                           

Net sales to external customers

  $ 27,934     2,577   $ 6,184   $ 1,527   $ 3,704   $   $ 41,926  

Inter-segment revenues

    3,462     77     131     17     18     (3,705 )    

Gross profit(1)

    1,330     49     412     152     (739 )       1,204  

Foreign exchange gain (loss)

    216     2     (4 )   (1 )   256         469  

Equity in earnings of affiliates

    15     (12 )   86     4     (13 )       80  

Noncontrolling interest(2)

    (26 )   6     (10 )       87     (31 )   26  

Other income (expense)

    (4 )   2     (7 )   (1 )   (15 )       (25 )

Segment EBIT

    812     8     181     58     (616 )       443  

Depreciation, depletion and amortization expense

    (179 )   (15 )   (73 )   (27 )   (149 )       (443 )

Investments in affiliates

    506     20     15     14     67         622  

Total assets

    11,172     2,691     2,030     670     4,683     40     21,286  

Capital expenditures

    222     257     55     24     329     31     918  

2008

                                           

Net sales to external customers

  $ 35,670     1,018   $ 8,216   $ 1,810   $ 5,860   $   $ 52,574  

Inter-segment revenues

    7,871     289     112     6     173     (8,451 )    

Gross profit(1)

    2,009     20     356     202     1,449         4,036  

Foreign exchange gain (loss)

    (196 )   (2 )   (22 )   1     (530 )       (749 )

Equity in earnings of affiliates

    12     (6 )   17     4     7         34  

Noncontrolling interest(2)

    (26 )   2     (8 )       (323 )   93     (262 )

Other income (expense)

    (21 )   15     14         2         10  

Segment EBIT

    959     (10 )   (11 )   104     321         1,363  

Depreciation, depletion and amortization expense

    (178 )   (8 )   (74 )   (18 )   (161 )       (439 )

Investments in affiliates

    484     41     155     12     69         761  

Total assets

    11,404     795     2,093     597     5,030     311     20,230  

Capital expenditures

    286     177     101     70     230     32     896  

(1)
In 2010, Bunge recorded pretax impairment charges of $77 million in cost of goods sold related to its operations in Europe, Brazil and the U.S. Of these pretax impairment charges $35 million of these charges was allocated to the agribusiness segment, $28 million to the edible oil products segment and $14 million to the milling products segment. In addition, Bunge recorded pretax restructuring charges of $19 million in cost of goods sold, related primarily to termination benefit costs of its U.S. and Brazil operations, which it allocated $10 million, $1 million, $4 million and $4 million to its agribusiness, sugar and bioenergy, edible oil products and fertilizer segment,

F-82



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

27. Operating Segments and Geographic Areas (Continued)

    respectively. Bunge also recorded $10 million in selling, general and administrative expenses, related to its Brazilian operations, which it allocated $3 million, $3 million, $3 million and $1 million to its agribusiness, sugar and bioenergy, edible oil products and milling products segment, respectively, in its consolidated statements of income (see Note 9 of the notes to the consolidated financial statements).

    In 2009, Bunge recorded pretax impairment charges of $5 million in cost of goods sold, relating to the permanent closure of a smaller, older and less efficient oilseed processing and refining facility, in its agribusiness segment. In addition, Bunge recorded pretax impairment charges of $26 million in selling, general and administrative expenses, relating to the write-down of certain real estate assets and a biodiesel equity investment, in its agribusiness segment.

    In 2008, Bunge recorded pretax asset impairment and restructuring charges of $23 million in the agribusiness segment and $3 million in the edible oil products segment. The impairment and restructuring charges related to permanent closure of older less efficient facilities and related employee termination costs, and environmental expenses. These impairment and restructuring charges are recorded in cost of goods sold in Bunge's consolidated statements of income (see Note 9 of the notes to the consolidated financial statements).

(2)
Includes noncontrolling interest share of interest and tax to reconcile to consolidated net income attributable to noncontrolling interest and other amounts not attributable to Bunge's operating segments.

(3)
In 2010, Bunge sold its Brazilian fertilizer nutrients assets, including its interest in Fertilizantes Fosfatados S.A. (Fosfertil). Bunge recognized a pretax gain of $2,440 million on this transaction which is included in segment EBIT (see Note 3 of the notes to the consolidated financial statements). Also, included in segment EBIT for 2010 is an unallocated loss of $90 million related to loss on extinguishment of debt (see Note 17 of the notes to the consolidated financial statements).

        Total segment earnings before interest and taxes (EBIT) is an operating performance measure used by Bunge's management to evaluate segment operating activities. Bunge's management believes total segment EBIT is a useful measure of operating profitability, since the measure allows for an evaluation of the performance of its segments without regard to its financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge's industries.

        A reconciliation of total segment EBIT to net income attributable to Bunge follows:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Total segment EBIT

  $ 3,228   $ 443   $ 1,363  

Interest income

    69     122     214  

Interest expense

    (298 )   (283 )   (361 )

Income tax (expense) benefit

    (689 )   110     (245 )

Noncontrolling interest share of interest and tax

    44     (31 )   93  
               

Net income attributable to Bunge

  $ 2,354   $ 361   $ 1,064  
               

F-83



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

27. Operating Segments and Geographic Areas (Continued)

        Net sales by product group to external customers were as follows:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Agricultural commodities products

  $ 30,138   $ 27,934   $ 35,670  

Sugar and bioenergy products

    4,455     2,577     1,018  

Edible oil products

    6,783     6,184     8,216  

Wheat milling products

    1,082     985     1,285  

Corn milling products

    523     542     525  

Fertilizer products

    2,726     3,704     5,860  
               

Total

  $ 45,707   $ 41,926   $ 52,574  
               

        Geographic area information for net sales to external customers, determined based on the location of the subsidiary making the sale, and long-lived assets follows:

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Net sales to external customers:

                   

Europe

  $ 15,490   $ 13,815   $ 18,189  

United States

    10,441     10,267     12,153  

Brazil

    9,027     9,203     11,998  

Asia

    6,136     5,385     5,524  

Argentina

    2,918     1,836     2,730  

Canada

    1,658     1,388     1,954  

Rest of world

    37     32     26  
               

Total

  $ 45,707   $ 41,926   $ 52,574  
               

 

 
  Year Ended December 31,  
(US$ in millions)
  2010   2009   2008  

Long-lived assets (1):

                   

Europe

  $ 986   $ 1,021   $ 1,080  

United States

    1,176     977     904  

Brazil

    4,103     3,971     2,620  

Asia

    279     178     161  

Argentina

    300     228     226  

Canada

    172     174     157  

Rest of world

    25     17     14  
               

Total

  $ 7,041   $ 6,566   $ 5,162  
               

(1)
Long-lived assets include property, plant and equipment, net, goodwill and other intangible assets, net and investments in affiliates.

F-84



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

28. Quarterly Financial Information (Unaudited)

 
  Quarter    
 
(US$ in millions, except per share data)
  First   Second   Third   Fourth   Year End  

2010 (1)

                               

Volumes (in millions of metric tons)

    32     36     35     32     135  

Net sales

  $ 10,345   $ 10,974   $ 11,662   $ 12,726   $ 45,707  

Gross profit

    545     425     712     829     2,511  

Net income

    80     1,787     206     315     2,388  

Net income attributable to Bunge

    63     1,778     212     301     2,354  

Earnings per common share—basic

                               

Net income

  $ 0.57   $ 12.41   $ 1.48   $ 2.23   $ 16.91  
                       

Earnings to Bunge common shareholders

  $ 0.31   $ 12.21   $ 1.38   $ 2.07   $ 16.20  
                       

Earnings per common share—diluted (2)

                               

Net income

  $ 0.57   $ 11.21   $ 1.39   $ 2.04   $ 15.28  
                       

Earnings to Bunge common shareholders

  $ 0.31   $ 11.15   $ 1.36   $ 1.95   $ 15.06  
                       
   

Weighted-average number of shares outstanding—basic

    140,112,091     144,034,189     139,600,641     141,025,069     141,191,136  

Weighted-average number of shares outstanding—diluted

    141,286,541     159,448,713     147,993,316     154,382,325     156,274,814  
   

Market price:

                               

High

  $ 71.29   $ 61.85   $ 61.61   $ 65.52        

Low

  $ 56.90   $ 47.19   $ 46.29   $ 57.45        
   

2009

                               

Volumes (in millions of metric tons)

    32     38     37     34     141  

Net sales

  $ 9,198   $ 10,994   $ 11,298   $ 10,436   $ 41,926  

Gross profit

    135     412     343     314     1,204  

Net (loss) income

    (176 )   322     197     (8 )   335  

Net income attributable to Bunge

    (195 )   313     232     11     361  

Earnings per common share—basic

                               

Net (loss) income

  $ (1.45 ) $ 2.64   $ 1.54   $ (0.60 ) $ 2.65  
                       

Earnings (loss) to Bunge common shareholders

  $ (1.76 ) $ 2.40   $ 1.82   $ (0.21 ) $ 2.24  
                       

Earnings per common share—diluted (2)

                               

Net (loss) income

  $ (1.45 ) $ 2.34   $ 1.37   $ (0.60 ) $ 2.62  
                       

Earnings (loss) to Bunge common shareholders

  $ (1.76 ) $ 2.28   $ 1.62   $ (0.21 ) $ 2.22  
                       

Weighted-average number of shares outstanding—basic

    121,730,058     122,026,034     127,800,921     134,084,639     126,448,071  

Weighted-average number of shares outstanding—diluted

    121,730,058     137,576,049     143,540,130     134,084,639     127,669,822  
   

Market price:

                               

High

  $ 59.33   $ 67.89   $ 72.41   $ 68.51        

Low

  $ 41.61   $ 46.58   $ 54.44   $ 57.06        
   

(1)
In 2010, Bunge sold its Brazilian fertilizer nutrients assets, including its interest in Fertilizantes Fosfatados S.A. (Fosfertil). Bunge recognized a pretax gain of $2,440 million on this transaction which is included in segment EBIT (see Note 3 of the notes to the consolidated financial statements). Also, included

F-85



BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

28. Quarterly Financial Information (Unaudited) (Continued)

    in segment EBIT for 2010 is an unallocated loss of $90 million related to loss on extinguishment of debt (see Note 17 of the notes to the consolidated financial statements).

(2)
Earnings per share to Bunge common shareholders for both basic and diluted is computed independently for each period presented. As a result, the sum of the quarterly earnings per share for the years ended December 31, 2010 and 2009 does not equal the total computed for the year.

29. Subsequent Events

        On February 10, 2011, one of Bunge's European subsidiaries acquired a port facility in Ukraine for a total purchase price of approximately $100 million.

F-86



SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
   
   
    BUNGE LIMITED

Dated: December 22, 2011

 

By:

 

/s/ ANDREW J. BURKE

Andrew J. Burke
Chief Financial Officer and
Global Operational Excellence Officer