UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2009

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)

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

50 Main Street, White Plains, New York		10606
(Address of principal executive offices)		(Zip Code)

(914) 684-2800

(Registrant’s telephone number, including area code)

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 x 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 o No 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. (Check one):

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o
(Do not check if a smaller
reporting company)

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o No x

As of May 1, 2009 the number of common shares issued and outstanding of the registrant was:

Common shares, par value $.01: 122,020,217

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BUNGE LIMITED

TABLE OF CONTENTS

			Page
PART I— FINANCIAL INFORMATION

Item 1	–	Financial Statements

		Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2009 and 2008		2

		Condensed Consolidated Balance Sheets at March 31, 2009 and December 31, 2008		3

		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008		4

		Consolidated Statements of Equity for the Three Months Ended March 31, 2009 and 2008		5

		Notes to the Condensed Consolidated Financial Statements		7

Cautionary Statement Regarding Forward Looking Statements				24

Item 2	–	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24

Item 3	–	Quantitative and Qualitative Disclosures About Market Risk		39

Item 4	–	Controls and Procedures		46

PART II— OTHER INFORMATION

Item 1	–	Legal Proceedings	47

Item 1A	–	Risk Factors	47

Item 2	–	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3	–	Defaults Upon Senior Securities	48

Item 4	–	Submission of Matters to a Vote of Security Holders	48

Item 5	–	Other Information	48

Item 6	–	Exhibits	48

Signatures			49

Exhibit Index			E-1

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PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BUNGE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(United States Dollars in Millions, except per share data)

	Three Months Ended March 31,
	2009				2008
Net sales		$	9,198			$	12,469
Cost of goods sold		(9,063		)		(11,602		)

Gross profit		135				867
Selling, general and administrative expenses		(294		)		(402		)
Interest income		36				48
Interest expense		(67		)		(98		)
Foreign exchange gains (losses)		(19		)		7
Other income (expense) – net		(7		)		(3		)

(Loss) income from operations before income tax		(216		)		419
Income tax benefit (expense)		34				(117		)

(Loss) income from operations after income tax		(182		)		302
Equity in earnings of affiliates		6				20

Net (loss) income		(176		)		322
Net income attributable to noncontrolling interest		(19		)		(33		)

Net (loss) income attributable to Bunge		(195		)		289
Convertible preference share dividends		(19		)		(19		)

Net (loss) income available to Bunge common shareholders		$	(214	)		$	270

(Loss) earnings per common share – basic (Note 12)
(Loss) earnings to Bunge common shareholders		$	(1.76	)		$	2.23

(Loss) earnings per common share – diluted (Note 12)
(Loss) earnings to Bunge common shareholders		$	(1.76	)		$	2.10

Dividends per common share		$	0.19			$	0.17

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

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BUNGE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(United States Dollars in Millions, except share data)

	March 31, 2009				December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents		$	498			$	1,004
Trade accounts receivable (less allowance of $168 and $164)		1,939				2,350
Inventories (Note 3)		4,961				5,653
Deferred income taxes		348				268
Other current assets (Note 4)		3,320				3,901
Total current assets		11,066				13,176
Property, plant and equipment, net		3,918				3,969
Goodwill (Note 5)		324				325
Other intangible assets, net		105				107
Investments in affiliates		757				761
Deferred income taxes		842				864
Other non-current assets		1,177				1,028
Total assets		$18,189				$20,230
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt		$617				$473
Current portion of long-term debt		68				78
Trade accounts payable		2,976				4,158
Deferred income taxes		78				104
Other current liabilities (Note 6)		2,699				3,261
Total current liabilities		6,438				8,074
Long-term debt		2,998				3,032
Deferred income taxes		124				132
Other non-current liabilities		853				864

Commitments and contingencies (Note 10)

Shareholders’ equity:
Mandatory convertible preference shares, par value $.01; authorized, issued and outstanding: 2009 and 2008 – 862,455 shares (liquidation preference $1,000 per share)		863				863
Convertible perpetual preference shares, par value $.01; authorized issued and outstanding: 2009 and 2008 – 6,900,000 shares (liquidation preference $100 per share)		690				690
Common shares, par value $.01; authorized – 400,000,000 shares; issued and outstanding: 2009 – 122,008,749 shares, 2008 – 121,632,456 shares		1				1
Additional paid-in capital		2,851				2,849
Retained earnings		3,584				3,844
Accumulated other comprehensive income (loss)		(878		)		(811		)
Total Bunge shareholders’ equity		7,111				7,436
Noncontrolling interest		665				692
Total equity		7,776				8,128
Total liabilities and shareholders’ equity		$18,189				$20,230

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

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BUNGE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(United States Dollars in Millions)

	Three Months Ended March 31,
	2009				2008
OPERATING ACTIVITIES
Net (loss) income		$	(176	)		$	322
Adjustments to reconcile net (loss) income to cash used for operating activities:
Foreign exchange loss (gain) on debt		120				(160		)
Impairment of assets		–				2
Bad debt expense		8				40
Depreciation, depletion and amortization		95				108
Stock-based compensation expense		10				13
Recoverable taxes provision		15				(14		)
Deferred income taxes		(133		)		(11		)
Equity in earnings of affiliates		(6		)		(20		)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Trade accounts receivable		374				(451		)
Inventories		603				(480		)
Prepaid commodity purchase contracts		(34		)		18
Secured advances to suppliers		44				15
Trade accounts payable		(1,155		)		356
Advances on sales		(16		)		(20		)
Unrealized net (gain) loss on derivative contracts		265				51
Margin deposits		17				(188		)
Accrued liabilities		(136		)		(3		)
Other—net		(258		)		69
Cash used for operating activities		(363		)		(353		)
INVESTING ACTIVITIES
Payments made for capital expenditures		(112		)		(148		)
Investments in affiliates		–				(61		)
Acquisitions of businesses (net of cash acquired)		(4		)		(19		)
Related party loans		(52		)		(16		)
Proceeds from investments		30				–
Change in restricted cash		(28		)		–
Proceeds from disposal of property, plant and equipment		1				13
Cash used for investing activities		(165		)		(231		)
FINANCING ACTIVITIES
Net change in short-term debt with maturities of 90 days or less		(38		)		165
Proceeds from short-term debt with maturities greater than 90 days		507				514
Repayments of short-term debt with maturities greater than 90 days		(328		)		(125		)
Proceeds from long-term debt		98				462
Repayment of long-term debt		(133		)		(607		)
Proceeds from sale of common shares		–				3
Dividends paid to preference shareholders		(19		)		(22		)
Dividends paid to common shareholders		(23		)		(21		)
Dividends paid to noncontrolling interest		(8		)		(62		)
Other		(26		)		–
Cash provided by financing activities		30				307
Effect of exchange rate changes on cash and cash equivalents		(8		)		19
Net decrease in cash and cash equivalents		(506		)		(258		)
Cash and cash equivalents, beginning of period		1,004				981
Cash and cash equivalents, end of period		$	498			$	723

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

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BUNGE LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

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

	Convertible Preference Shares		Common Shares		Additional Paid-in	Retained	Accumulated Other Comprehensive	Non - Controlling	Total	Comprehensive
	Shares	Amount	Shares	Amount	Capital	Earnings	Income (Loss)	Interest	Equity	Income (Loss)
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	—	—	—	—	—	289	—	33	322	$322
Other comprehensive income (loss):
Foreign exchange translation adjustment, net of tax expense of $0	—	—	—	—	—	—	81	25	—	106
Unrealized gains on commodity futures and foreign exchange contracts, net of tax benefit of $0	—	—	—	—	—	—	5	—	—	5
Unrealized investment losses, net of tax benefit of $2	—	—	—	—	—	—	(4)	—	—	(4)
Reclassification of realized net gains to net income, net of tax expense of $4	—	—	—	—	—	—	(6)	—	—	(6)
Total comprehensive income (loss)	—	—	—	—	—	—	76	25	101	$423
SFAS No. 158 measurement date adjustment, net of tax benefit of $2	—	—	—	—	—	(4)	—	—	(4)
Dividends on common shares	—	—	—	—	—	(21)	—	—	(21)
Dividends on preference shares	—	—	—	—	—	(31)	—	—	(31)
Dividends paid to noncontrolling interest on subsidiary common stock	—	—	—	—	—	—	—	(62)	(62)
Capital contribution related to exchange of subsidiaries stock in connection with merger of subsidiaries	—	—	—	—	13	—	—	(33)	(20)
Stock-based compensation expense	—	—	—	—	13	—	—	—	13
Issuance of common shares:
—stock options and award plans, net of shares withheld for taxes	—	—	295,566	—	3	—	—	—	3
Balance, March 31, 2008	7,762,500	$1,553	121,521,529	$1	$2,789	$3,195	$745	$715	$8,998

(Continued on the following page)

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	Convertible Preference Shares		Common Shares		Additional Paid-in	Retained	Accumulated Other Comprehensive		Non - Controlling		Total	Comprehensive
	Shares	Amount	Shares	Amount	Capital	Earnings	Income (Loss)		Interest		Equity	Income (Loss)
Balance, January 1, 2009	7,762,455	$1,553	121,632,456	$1	$2,849	$3,844	$(811)		$692		$8,128
Comprehensive income—2009:
Net (loss) income	—	—	—	—	—	(195)	—		19		(176)	$(176	)
Other comprehensive income (loss):
Foreign exchange translation adjustment, net of tax expense of $0	—	—	—	—	—	—	(76)		(12	)	—	(88)
Unrealized gains on commodity futures and foreign exchange contracts, net of tax expense of $8	—	—	—	—	—	—	14		—		—	14
Reclassification of realized net gains to net (loss), net of tax of $1	—	—	—	—	—	—	(1)		—		—	(1)
Pension adjustment, net of tax benefit of $5	—	—	—	—	—	—	(4)		(6	)	—	(10)
Total comprehensive income (loss)	—	—	—	—	—	—	(67)		(18)		(85)	$(261)
Dividends on common shares	—	—	—	—	—	(46)	—		—		(46)
Dividends on preference shares	—	—	—	—	—	(19)	—		—		(19)
Dividends paid to noncontrolling interest on subsidiary common stock	—	—	—	—	—	—	—		(8)		(8)
Return of capital to noncontrolling interest	—	—	—	—	—	—	—		(43)		(43)
Capital contribution from noncontrolling interest	—	—	—	—	—	—	—		23		23
Purchase of additional shares in subsidiary from noncontrolling interest	—	—	—	—	(4)	—	—		—		(4)
Stock-based compensation expense	—	—	—	—	10	—	—		—		10
Issuance of common shares:
—stock options and award plans, net of shares withheld for taxes	—	—	376,293	—	(4)	—	—		—		(4)
Balance, March 31, 2009	7,762,455	$1,553	122,008,749	$1	$2,851	$3,584	$(878	)	$665		$7,776

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

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BUNGE LIMITED AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Bunge Limited and its subsidiaries (Bunge) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended (Exchange Act). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2008 has been derived from Bunge’s audited consolidated financial statements at that date. Operating results for the three months ended March 31, 2009 are not necessarily indicative of the results to be expected for the year ending December 31, 2009. The financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2008 included in Bunge’s 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 2, 2009.

Reclassifications – Certain reclassifications were made to the prior period condensed consolidated financial statements to conform to the current period presentation.

2. NEW ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Pronouncements – In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141 (revised 2007), Business Combinations (SFAS No. 141(R)). SFAS No. 141(R) seeks to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. This Statement also requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values. SFAS No. 141(R) requires an acquirer to recognize adjustments made during the measurement period to the acquired assets and liabilities as if they had occurred on the acquisition date and revise prior period financial statements in subsequent filings for changes. In addition, SFAS No. 141(R) requires that all acquisition related costs be expensed as incurred, rather than capitalized as part of the purchase price and those restructuring costs that an acquirer expected but was not obligated to incur to be recognized separately from the business combination. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. On January 1, 2009, Bunge adopted SFAS No. 141(R) prospectively.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (SFAS No. 160). SFAS No. 160 amends Accounting Research Bulletin (ARB) 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest on the face of the consolidated statement of income. Under SFAS No. 160, the accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation must be accounted for as equity transactions for the difference between the parent’s carrying value and the cash exchanged in the transaction. In addition, SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated (except in the case of a spin-off), and requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s ownership interest and the interests of the noncontrolling owners of a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.

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On January 1, 2009, Bunge adopted SFAS No. 160 prospectively. Bunge has applied the presentation and disclosure provisions of SFAS No. 160 to its condensed consolidated financial statements retrospectively.

In March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (SFAS No. 161), which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, by requiring expanded disclosures about a company’s derivative instruments and hedging activities, including increased qualitative, quantitative, and credit-risk disclosures, but does not change the scope or accounting of SFAS No. 133. SFAS No. 161 also amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to clarify that derivative instruments are subject to the concentration-of-credit-risk disclosures of SFAS No. 107. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption permitted. On January 1, 2009, Bunge adopted the provisions of SFAS No. 161. See Note 7 of the notes to the condensed consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP (the GAAP hierarchy). SFAS No. 162 makes the GAAP hierarchy explicitly and directly applicable to preparers of financial statements, a step that recognizes preparers’ responsibilities for selecting the accounting principles for their financial statements, and sets the stage for making the framework of the FASB Concept Statements fully authoritative. The effective date for SFAS No. 162 is 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s related amendments to remove the GAAP hierarchy from auditing standards, where it has resided for some time. The SEC’s approval date was November 15, 2008. Bunge’s adoption of SFAS No. 162 in January 2009 did not have a material impact on its consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets (FSP No. FAS 142-3). FSP No. FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Bunge’s adoption of FSP No. FAS 142-3 in January 2009 did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements – In April 2009, the FASB issued three Staff Positions FSP No. FAS 157-4, Determining the Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP No. FAS 157-4), FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP No. FAS 107-1 and APB 28-1), and FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP No. FAS 115-2 and FAS 124-2).

FSP No. FAS 157-4 provides additional guidance on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market activity for the asset or liability within the scope of SFAS No. 157 and also provides additional guidance on circumstances which may indicate that a transaction is not orderly. FSP FAS No. 157-4 amends SFAS No. 157 to require interim disclosures of the inputs and valuation techniques used to measure fair value reflecting changes in the valuation techniques and related inputs, if any, on an interim basis applicable to items measured on a recurring and nonrecurring basis. FSP No. FAS 157-4 is effective prospectively for interim and annual reporting periods ending after June 15, 2009. Bunge is evaluating the impact, if any, FSP No. FAS 157-4 will have on its consolidated financial statements.

FSP No. FAS 107-1 and APB 28-1, extends the requirements of SFAS No. 107, Disclosures about Fair Value of Financial Instruments (SFAS No. 107) to interim financial statements of publicly-traded companies. Prior to FSP No. FAS 107-1 and APB 28-1 fair values for these assets and liabilities were only disclosed once a year. FSP No. FAS 107-1 and APB 28-1 requires that disclosures provide qualitative and quantitative information on fair value estimates for all financial instruments not measured on the balance sheet at fair value, when practicable, with the exception of certain financial instruments listed in SFAS No. 107. FSP No. FAS 107-1 and APB 28-1 is effective prospectively for interim reporting periods ending after June 15, 2009. Bunge is evaluating the impact, if any, FSP No. FAS 107-1 and APB 28-1 will have on its consolidated financial statements.

FSP No. FAS 115-2 and FAS 124-2, provides guidance on the recognition and presentation of other-than-temporary impairments of debt securities classified as available-for-sale and held-to-maturity. It also expands and increases the

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frequency of disclosures about other-than-temporary impairments in both debt and equity securities within the scope of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, and FSP No. FAS 115-1/FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. FSP No. FAS 115-2 and FAS 124-2 is effective prospectively for interim and annual reporting periods ending after June 15, 2009. Bunge is evaluating the impact, if any, FSP No. FAS 115-2 and FAS 124-2 will have on its consolidated financial statements.

3. INVENTORIES

Inventories consist of the following:

(US$ in millions)	March 31, 2009	December 31, 2008
Agribusiness – Readily marketable inventories at fair value (1)	$2,562	$2,619
Fertilizer	1,450	1,875
Edible oils (2)	374	444
Milling (2)	109	113
Other (3)	466	602
Total	$4,961	$5,653

(1) Readily marketable inventories are agricultural commodities inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms.

(2) Includes readily marketable inventories at fair value totaling $109 million and $122 million at March 31, 2009 and December 31, 2008, respectively.

(3) Agribusiness inventories carried at lower of cost or market.

4. OTHER CURRENT ASSETS

Other current assets consist of the following:

(US$ in millions)	March 31, 2009		December 31, 2008
Prepaid commodity purchase contracts (1)		$ 149		$	115
Secured advances to suppliers (2)		384		423
Unrealized gain on derivative contracts		1,098		1,810
Recoverable taxes (3)		548		518
Margin deposits		284		301
Other		857		734
Total		$3,320		$	3,901

(1)	Prepaid commodity purchase contracts represent advance payments for obligations to producers for future delivery of specified quantities of agricultural commodities. Prepaid commodity purchase contracts are recorded at fair value based on market 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 future crops and physical assets of the suppliers, carry a local market interest rate and settle when the farmer’s crop is harvested and sold. In addition to current secured advances, Bunge has non-current secured advances to suppliers, primarily farmers in Brazil, in the amount of $255 million and $253 million at March 31, 2009 and December 31, 2008, respectively, that are included in other non-current assets in the condensed consolidated balance sheets. The repayment terms of the non-current secured advances generally range from two to three years. Included in the secured advances to suppliers recorded in other current assets are advances that were renegotiated from their original terms, equal to an aggregate of $46 million at both March 31, 2009 and December 31, 2008. Included in the secured advances to suppliers recorded in other non-current assets are advances that were renegotiated from their original terms, equal to an aggregate of $34 million and

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$33 million at March 31, 2009 and December 31, 2008, respectively. These renegotiated advances are largely collateralized by a farmer’s future crops and a mortgage on the land, buildings and equipment.

Also included in non-current secured advances to suppliers are advances for which Bunge has initiated legal action to collect the outstanding balance, equal to an aggregate of $183 million and $182 million at March 31, 2009 and December 31, 2008, respectively. The allowance for uncollectible advances totaled $37 million at both March 31, 2009 and December 31, 2008.

Interest earned on secured advances to suppliers of $16 million and $13 million for the three months ended March 31, 2009 and 2008, respectively, is included in net sales in the condensed consolidated statements of income.

(3) Bunge has an additional recoverable taxes balance of $296 million and $266 million at March 31, 2009 and December 31, 2008, respectively, which is included in other non-current assets in the condensed consolidated balance sheets. The balance of current and non-current recoverable taxes is net of the allowance for recoverable taxes of $106 million and $104 million at March 31, 2009 and December 31, 2008, respectively.

5. GOODWILL

At March 31, 2009, the changes in the carrying value of goodwill by segment are as follows:

(US$ in millions)	Agribusiness		Edible Oil Products		Milling Products		Total
Balance, December 31, 2008		$269		$37		$19		$325
Acquired goodwill		—		—		—		—
Allocation of acquired goodwill		—		—		—		—
Tax benefit on goodwill amortization (1)		(1)		—		—		(1)
Foreign exchange translation		5		(5)		—		—
Balance, March 31, 2009		$273		$32		$19		$324

(1) 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 condensed consolidated statements of income.

6. OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

(US$ in millions)	March 31, 2009	December 31, 2008
Accrued liabilities	$1,020	$1,110
Unrealized loss on derivative contracts	1,330	1,775
Advances on sales	244	261
Other	105	115
Total	$2,699	$3,261

7. 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 and derivative instruments to manage its foreign exchange, interest rate, commodity price, freight and energy cost exposures. Bunge also uses derivative instruments to reduce volatility in its income tax expense that results from foreign exchange gains and losses on certain U.S. dollar denominated loans in Brazil. Cash and cash equivalents, trade accounts receivable and accounts payable and short- and long-term debt are stated at their carrying value, which is a reasonable estimate of fair value. All derivative instruments and marketable securities are stated at fair value.

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Adoption of SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133— Effective January 1, 2009, Bunge adopted SFAS No. 161, which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, by expanding the disclosure requirements. The disclosure provisions of SFAS No. 161 apply to all entities with derivative instruments subject to SFAS No. 133 and also apply to related hedged items and other instruments that are designated and qualify as hedging instruments. SFAS No. 161 requires an entity to disclose how and why it uses derivative instruments; how derivative instruments and related hedged items are accounted for under SFAS No. 133; and how derivative instruments and related hedged items affect the entity’s financial position, financial performance, and cash flows. Entities are required to provide tabular disclosures of the location, by line item, of amounts of gains and losses reported in the statement of income.

Adoption of SFAS No. 157, Fair Value Measurements— Effective January 1, 2008, Bunge adopted SFAS No. 157. In February 2008, the FASB issued FSP No. FAS 157-2, Effective Date of SFAS No. 157 (FSP No. FAS 157-2). FSP No. FAS 157-2 delayed the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP No. FAS 157-2 became effective for Bunge upon adoption of SFAS No. 157 on January 1, 2008, and Bunge is required to disclose all non-financial assets and non-financial liabilities that are carried at fair value beginning January 1, 2009.

SFAS No. 157 defines fair value as the 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, derivative contracts, and certain other assets based on the fair value hierarchy established in SFAS No. 157, 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 the reporting entity that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. 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 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 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.

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 March 31, 2009 and December 31, 2008. Bunge’s exchange-traded futures are predominantly settled daily generally through its clearing subsidiary and therefore such futures are not included in the table below. As required by SFAS No. 157, 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

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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

	March 31, 2009				December 31, 2008

(US$ in millions)	Level 1 (1)	Level 2 (2)	Level 3 (3)	Total	Level 1 (1)	Level 2 (2)	Level 3 (3)	Total

Assets:
Readily marketable inventories (Note 3)	$—	$2,304	$367	$2,671	$—	$2,558	$183	$2,741
Unrealized gain on designated derivative contracts (4)
Interest Rate	—	12	—	12	—	12	—	12
Foreign Exchange	—	10	—	10	—	41	—	41
Freight	11	—	—	11	—	—	—	—
Unrealized gain on undesignated derivative contracts (4):
Foreign Exchange	8	93	—	101	7	72	—	79
Commodities	13	582	113	708	9	1,259	149	1,417
Freight	8	—	234	242	—	4	269	273
Energy	—	58	2	60	—	—	—	—
Other (5)	159	5	—	164	22	11	—	33
Total assets	$199	$3,064	$716	$3,979	$38	$3,957	$601	$4,596

Liabilities:
Unrealized loss on designated derivative contracts (6):
Interest Rate	$ —	$ 12	$ —	$ 12	$—	$ 1	$ —	$ 1
Foreign Exchange	—	72	—	72	—	1	—	1
Freight	—	—	—	—	—	15	—	15
Unrealized loss on undesignated derivative contracts (6):
Interest Rate	—	1	—	1	—	1	—	1
Foreign Exchange	—	204	—	204	—	31	10	41
Commodities	57	494	69	620	22	1,117	93	1,232
Freight	11	29	360	400	—	71	416	487
Energy	—	57	22	79	—	—	—	—
Total liabilities	$ 68	$ 869	$451	$1,388	$22	$1,237	$519	$1,778

(1)	Quoted prices in active markets for identical assets
(2)	Significant other observable inputs
(3)	Significant unobservable inputs
(4)	Unrealized gains on designated and undesignated derivative contracts are generally included in other current assets. At March 31, 2009 and December 31, 2009, $14 million and zero, respectively, of designated and undesignated derivative contracts are included in other non-current assets.
(5)	Other assets include primarily the fair values of treasury securities held as margin deposits.
(6)	Unrealized losses on designated and undesignated derivative contracts are generally included in other current liabilities. At March 31, 2009 and December 31, 2008, $15 million and $3 million, respectively, of designated and undesignated derivative contracts are included in other non-current liabilities.

Bunge has determined that there are no credit risk related contingent features and nonrecurring non-financial assets and liabilities at March 31, 2009.

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 primarily to freight, energy, foreign exchange and interest rates. 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

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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 condensed consolidated financial statements as a component of cost of goods sold, foreign exchange gain or loss, other income (expense) - net or other comprehensive income (loss).

OTC derivative contracts include swaps, options and structured transactions that are valued at fair value and may be offset with similar positions in exchange traded markets. The fair values of OTC derivative instruments 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.

Readily marketable inventories—Bunge’s readily marketable commodity inventories are valued at fair value. These commodities are readily marketable, have quoted market prices and may be sold without significant additional processing. Bunge determines fair value based on quoted prices on exchange-traded futures contracts with appropriate adjustments for differences in local markets where Bunge’s inventories are located. Changes in the fair values of these inventories are recognized in the condensed consolidated statements of income as a component of cost of goods sold.

Readily marketable inventories are valued based on the fair values of the commodities, including exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets. 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 in the condensed consolidated balance sheets and condensed 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 in the condensed consolidated balance sheets and condensed 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 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 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. Because of differences in the availability of market prices and market liquidity 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 SFAS No. 157 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—The fair values of Level 3 derivative instruments are estimated using pricing information from less active markets. 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-traded instruments where Bunge clears trades through the exchange, Bunge is exposed to loss in the event of the non-performance by counterparties on OTC 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 our fair value determination. These adjustments are based on Bunge’s estimate of the potential loss in the event of counterparty non-performance.

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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 inputs include exchange quotes and certain management estimations regarding local markets.

The tables below present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2009 and 2008. Level 3 instruments presented in the tables include readily marketable inventories and derivatives, which were carried at fair value prior to the adoption of SFAS No. 157. These instruments were valued using pricing models that, in management’s judgment, reflect the assumptions a marketplace participant would use at March 31, 2009 and 2008, as applicable.

	Level 3 Instruments:
	Fair Value Measurements
(US$ in millions)	Derivatives, Net (1)	Readily Marketable Inventories	Total
Balance, December 31, 2008	$(101)	$183	$82
Total gains and losses (realized/unrealized) included in cost of goods sold	156	65	221
Purchases, issuances and settlements	(127)	119	(8)
Transfers in/out of Level 3	(30)	—	(30)
Balance, March 31, 2009	$(102)	$367	$265

	Level 3 Instruments:
	Fair Value Measurements
(US$ in millions)	Derivatives, Net (1)	Readily Marketable Inventories	Total
Balance, January 1, 2008	$107	$133	$240
Total gains and losses (realized/unrealized) included in cost of goods sold	44	41	85
Purchases, issuances and settlements	(126)	—	(126)
Transfers in/out of Level 3	—	—	—
Balance, March 31, 2008	$25	$174	$199

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

The table below summarizes changes in unrealized gains or losses recorded in earnings during the three months ended March 31, 2009 and 2008 for Level 3 assets and liabilities that were held at March 31, 2009 and 2008:

	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 March 31, 2009:
Cost of goods sold	$ 35		$ 54	$ 89

Changes in unrealized gains and losses relating to assets and liabilities held at March 31, 2008:
Cost of goods sold	$(37	)	$61	$24

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

Derivative Instruments

Interest rate derivatives — The interest rate swaps used by Bunge as hedging instruments have been recorded at fair value in the condensed consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. Additionally, the carrying amount of the associated debt is adjusted through earnings for changes in the fair value due to changes in benchmark interest rates. Ineffectiveness, as defined in SFAS No. 133, is recognized to the extent that these two adjustments do not offset. Bunge has entered into interest rate swap agreements for the purpose of

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managing certain of its interest rate and currency exposure. The swap agreements are assumed to be perfectly effective under the shortcut method of SFAS No. 133. In addition, Bunge has entered into interest rate basis swap agreements that do not qualify for hedge accounting in accordance with SFAS No. 133, and therefore Bunge has not designated these swap agreements as hedge instruments for accounting purposes. As a result, changes in fair value of the basis swap agreements are recorded as an adjustment to earnings.

The following table summarizes our outstanding interest rate swap agreements as of March 31, 2009:

	Notional Amount of Hedged Obligation	Notional Amount of Derivative (6)
(US$ in millions)

Receive fixed / pay Federal Funds notional principal amount	$250	$250
Weighted average rate payable – 1.18% (1)
Weighted average rate receivable – 4.33% (2)

Receive three-month Yen LIBOR / pay three-month U.S. dollar LIBOR	$102	$102
Weighted average rate payable – 3.16% (3)
Weighted average rate receivable – 2.22% (4)

Receive LIBOR / pay Federal Funds notional principal amount	$375	$375
Weighted average rate payable – 0.61% (1)
Weighted average rate receivable – 0.53% (5)

(1) Interest is payable in arrears based on the average daily effective Federal Funds rate prevailing during the respective period plus a spread.

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

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

(4) Interest is receivable in arrears based on three-month Yen LIBOR.

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

(6) The interest rate swap agreements mature in 2011.

Foreign exchange derivatives — Bunge uses a combination of foreign exchange contracts and zero cost collars in certain of its operations to mitigate the risk in exchange rate fluctuations in connection with anticipated sales in foreign currencies. The foreign exchange contracts and zero cost collars are designated as cash flow hedges in accordance with SFAS No. 133. 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 on-going basis, whether the derivatives that are used in hedge transactions are highly effective in offsetting changes in cash flow hedged items.

The table below summarizes the notional amounts of open foreign exchange positions as of March 31, 2009:

	March 31, 2009
	Exchange Traded	Non-exchange Traded
(US$ in millions)	Net - (Short) & Long (1)	(Short) (2)	Long (2)	Unit of Measure

Foreign Exchange:
Options	—	(25)	18	Notional
Forwards	—	(1,584)	1,076	Notional
Swaps	—	(806)	1,988	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.

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 sales 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

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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 sales contracts are primarily settled through delivery of agricultural commodities. While Bunge considers these exchange-traded futures and forward purchase and sales contracts to be effective economic hedges, the Company 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 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 hedges portions of its forecasted U.S. oilseed processing production requirements, including forecasted purchases of soybeans and sales of soy commodity products, for quantities that usually do not exceed three months of processing capacity. The instruments used are exchange-traded futures contracts, which are designated as cash flow hedges.

The table below summarizes the volumes of open agricultural commodities positions as of March 31, 2009:

	March 31, 2009
	Exchange Traded	Non-exchange Traded
	Net (Short) & Long (1)	(Short) (2)	Long (2)	Unit of Measure

Agricultural Commodities
Futures	(3,087,921)	—	—	Metric Tons
Options	(137,980)	(1,038,802)	398,503	Metric Tons
Forwards	—	(20,376,387)	14,477,079	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 a fair value hedge, 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.

The table below summarizes the open ocean freight positions as of March 31, 2009:

	March 31, 2009
	Exchange Cleared	Non-exchange Cleared
	Net (Short) & Long (1)	(Short) (2)	Long (2)	Unit of Measure

Ocean Freight
FFA	—	(10,889)	10,952	Hire Days
FFA Options	(2,984)	(259)	—	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.

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The table below summarizes the open energy positions as of March 31, 2009:

	March 31, 2009
	Exchange Traded	Non-exchange Traded
	Net (Short) & Long (1)	(Short) (2)	Long (2)	Unit of Measure

Bunkers/ Coal / Ethanol / Emission Credits
Futures	(3,431,290)	—	—	Metric Tons
Forwards	—	(4,316,688)	3,526,083	Metric Tons
Swaps	—