FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
April 30, 2004
Commission File Number 001-16625
BUNGE LIMITED
(Translation of registrant's name into English)
50 Main Street
White Plains, New York 10606
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in
this Form the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant with Rule 12g3-2(b): 82-_______
1
This report on Form 6-K shall be incorporated by reference into the Registration
Statements on Form F-3 (Registration Nos. 333-104974, 333-106182, 333-107376,
333-108441-01, 333-109309, 333-110904, 333-113194-01 and 333-114973), as
amended, and the Registration Statements on Form F-4 (Registration Statement
Nos. 333-108462 and 333-113786), as amended, filed by Bunge Limited Finance
Corp. and Bunge Limited under the Securities Act of 1933, as amended, and the
Registration Statements on Form S-8 (Registration Nos. 333-66594, 333-75762,
333-76938 and 333-109446) filed by Bunge Limited under the Securities Act of
1933, to the extent not superseded by documents or reports subsequently filed
under the Securities Act of 1933 or the Securities Exchange Act of 1934, as
amended.
Cautionary Statement Concerning Forward-Looking Statements
This report contains both historical and forward-looking statements. All
statements, other than statements of historical fact are, or may be deemed to
be, forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements are not based on
historical facts, but rather reflect our current expectations and projections
about our future results, performance, prospects and opportunities. We have
tried to identify these forward-looking statements by using words including
"may," "will," "expect," "anticipate," "believe," "intend," "estimate,"
"continue" and similar expressions. These forward-looking statements are subject
to a number of risks, uncertainties and other factors that could cause our
actual results, performance, prospects or opportunities, as well as those of the
markets we serve or intend to serve, to differ materially from those expressed
in, or implied by, these forward-looking statements. The following important
factors, among others, could affect our business and financial performance: our
ability to complete, integrate and benefit from acquisitions, divestitures,
joint ventures and strategic alliances; estimated demand for the commodities and
other products that we sell and use in our business; industry conditions,
including the cyclicality of the agribusiness industry and unpredictability of
the weather; agricultural, economic and political conditions in the primary
markets where we operate; and other economic, business, competitive and/or
regulatory factors affecting our business generally. The forward-looking
statements included in this report are made only as of the date of this release,
and except as otherwise required by federal securities law, we do not have any
obligation to publicly update or revise any forward-looking statements to
reflect subsequent events or circumstances.
2
The following is a summary of the unaudited consolidated results of Bunge
Limited for the first quarter of 2004.
> Financial Highlights
(In millions, except per share data and percentages)
--------------------------------------------------------------------------
First Quarter Ended Percent
----------------------
3/31/04 3/31/03 Change
--------------------------------------------------------------------------
Volumes (metric tons) 23.8 22.9 4%
Net sales $5,739 $4,842 19%
Net income $70 $40 75%
Earnings per share(1) $0.65 $0.40 63%
--------------------------------------------------------------------------
Bunge's results included certain gains and charges that may be of interest to
investors. These items totaled $3 million, or $.03 per share, in the quarter
ended March 31, 2004, and $(1) million, or $(.01) per share, in the quarter
ended March 31, 2003. These gains and charges are detailed in the attached
schedule titled "Additional Financial Information."
> 2004 First Quarter Results
Agribusiness
Agribusiness benefited from solid volume growth and improvements in margins,
assisted by effective risk management. Efficiency improvements in logistics,
favorable effects from freight risk management programs and better than expected
margins in North America also contributed. Selling, general and administrative
expenses (SG&A) increased compared to the first quarter of 2003 primarily due to
increases in employee compensation and the appreciation of the Brazilian real.
Interest expense increased, primarily due to an increase in inventory levels
associated with higher commodity prices.
Fertilizer
Higher average selling prices for fertilizer offset weaker volumes. Volumes in
the first quarter of 2003 benefited from farmers' accelerated purchases, which
did not occur in 2004. Higher international prices for fertilizer raw materials
boosted local selling prices and increased margins on local production, which is
priced to import parity. SG&A increased, primarily due to the appreciation of
the Brazilian real, increased labor and fiscal provisions and salary increases.
----------
(1) Earnings per share numbers are reported on a fully diluted basis, which
includes approximately 7.78 million common shares issuable upon conversion of
Bunge's 3.75% convertible notes due 2022. The convertible notes became
convertible as of March 31, 2004. See Note (2) of the footnotes to the
"Consolidated Statements of Income" for more information.
3
Edible Oil Products
For comparative purposes, the results of the edible oil segment are presented
below for the first quarter of 2004 and for the first quarter of 2003 including
the results of Lesieur, which was sold to our Saipol joint venture in July 2003,
and the results of Lesieur for the first quarter ended March 31, 2003.
-------------------------------------------------------------------------------------
First Quarter Ended
-----------------------------------------
As Reported Lesieur
(In millions, except volumes) 3/31/04 3/31/03 3/31/03
-------------------------------------------------------------------------------------
Volumes (in thousands of metric tons) 714 859 157
Net sales $542 $536 $156
Segment operating profit $17 $17 $6
-------------------------------------------------------------------------------------
Edible oil results benefited from margin improvements in Bunge's Eastern
European businesses. These improvements were partially offset by increases in
raw material costs, primarily soybean oil.
Milling Products
Milling products results benefited from higher margins and sales volumes in
Bunge's corn milling business and higher margins in Bunge's wheat milling
business.
Financial Costs
Interest income decreased, primarily due to lower interest rates in Brazil.
Interest expense declined despite increases in average borrowings for the first
quarter of 2004, compared to the same period in 2003, primarily due to lower
average interest rates on long-term borrowings. During 2003, the company
replaced long-term debt assumed in the acquisition of Cereol in 2002 and
long-term debt maturing in 2003 with lower interest rate debt.
Foreign exchange losses and related hedging costs, incurred primarily on the net
U.S. dollar-denominated monetary liability position of Bunge's Brazilian
subsidiaries, were $16 million in the first quarter of 2004, compared to foreign
exchange gains of $7 million in the same period last year. The Brazilian real
depreciated 1% in value against the U.S. dollar in the first quarter of 2004, as
compared to a 5% appreciation in the same period last year.
Other Income (Expense) - net
In March 2004, Bunge exchanged its Brazilian domestic retail flour assets for J.
Macedo's industrial flour assets and $7 million in cash. The exchange resulted
in a pre-tax gain of $5 million, which is included in other income (expense) -
net for the first quarter of 2004.
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Other income (expense) - net also benefited from increases in Bunge's share of
earnings from its joint ventures in Argentina and Solae. Solae was formed in the
second quarter of 2003.
Income Tax Expense
Bunge's effective tax rate for the first quarter of 2004 was 40%, compared to
38% in the first quarter of 2003. Our estimated effective tax rate for 2004
increased from 2003 due to reduced tax benefits on U.S. export sales and higher
taxes payable in various tax jurisdictions.
Total Debt and Cash Flow
Total debt, which includes short-term debt, current maturities of long-term debt
and long-term debt, was $4,215 million at March 31, 2004, an increase of $821
million from December 31, 2003 primarily due to higher levels of inventory
resulting from the increase in agricultural commodity prices. In addition,
readily marketable inventories increased at March 31, 2004 by $1,011 million
from December 31, 2003. Higher product prices require more working capital for
similar levels of business volume. Total debt is not reduced for the amount of
readily marketable inventories we hold. Readily marketable inventories are
agricultural inventories that are readily convertible to cash because of their
commodity characteristics, widely available markets and international pricing
mechanisms.
Cash flow from operations was negatively affected by higher levels of working
capital caused by the 60% increase in soybean prices since mid-2003. This effect
is likely to reverse when prices return to historical averages. Cash flow used
for operations in the first quarter of 2004 was $720 million, which included the
effect of higher agricultural commodity prices of approximately $793 million, as
compared to cash flow used for operations for the first quarter of 2003 of $3
million.
5
Additional Financial Information
The following table provides a summary of certain gains and charges that may be
of interest to investors. The table includes a description of these items and
their effect on income from continuing operations before income taxes and
minority interest, net income and earnings per share for the quarters ended
March 31, 2004 and 2003.
-------------------------------------------------------------------------------------------------------------------------------
Income From
Continuing
Operations Before
Income Taxes and Earnings Per Share
(In millions, except per share data) Minority Interest Net Income Diluted
------------------------------------ ----------------- ---------- -------
2004 2003 2004 2003 2004 2003
---- ---- ---- ---- ---- ----
Quarter Ended March 31:
Gain on exchange of
retail flour business $5 $- $3 $ - $0.03 $ -
Discontinued operations, net of
tax - - - (1) - (0.01)
---------- ---------- ---------- ---------- ------------ ----------
Total $5 $- $3 $(1) $0.03 $(0.01)
========== ========== ========== ========== ============ ==========
-------------------------------------------------------------------------------------------------------------------------------
6
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data and percentages)
(Unaudited)
Quarter Ended Percent
March 31, Change
----------------------------- ---------
2004 2003
-------------- -------------
Net sales $5,739 $4,842 19%
Cost of goods sold (5,374) (4,569) 18%
-------------- -------------
Gross profit 365 273 34%
Selling, general and administrative expenses (178) (149) 19%
Interest income 16 20 (20)%
Interest expense (40) (47) (15)%
Interest expense on readily marketable inventories (12) (7) 71%
Foreign exchange gains (losses) (16) 7
Other income (expense)-net 11 1
-------------- -------------
Income from continuing operations before income tax and
minority interest 146 98 49%
Income tax expense (58) (37) 57%
-------------- -------------
Income from continuing operations before minority interest 88 61 44%
Minority interest (18) (20) (10)%
-------------- -------------
Income from continuing operations 70 41 71%
Discontinued operations, net of tax (Note 1) - (1)
-------------- -------------
Net income $ 70 $ 40 75%
============== =============
Earnings per common share - basic (Note 2):
Income from continuing operations $ 0.70 $ 0.41 71%
Discontinued operations - (0.01)
-------------- -------------
Net income per share - basic $ 0.70 $ 0.40 75%
============== =============
Earnings per common share - diluted (Note 2):
Income from continuing operations $ 0.65 $ 0.41 59%
Discontinued operations - (0.01)
-------------- -------------
$ 0.65 $ 0.40
Net income per share - diluted 63%
============== =============
7
FOOTNOTES TO CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Note 1: In December 2003, Bunge sold its North American bakery business to a
third party. Accordingly, the operating results for the disposed
division have been reported as discontinued operations for the three
months ended March 31, 2003.
Note 2: Earnings per share are calculated on the basis of the following number
of common shares outstanding:
Quarter Ended
March 31,
---------------------------------
2004 2003
--------------- ----------------
(In millions, except share data)
Income from continuing operations - basic $70 $41
Interest on convertible notes, net of tax 1 -
--------------- ----------------
Income from continuing operations - diluted $71 $41
=============== ================
Weighted average number of common shares outstanding:
Basic 100,016,833 99,585,790
Effect of dilutive shares:
-Stock options and awards 1,770,441 916,340
-Convertible notes 7,778,425 -
--------------- ----------------
Diluted 109,565,699 100,502,130
=============== ================
Income from continuing operations - per share:
-Basic $0.70 $0.41
=============== ================
-Diluted $0.65 $0.41
=============== ================
The calculation of diluted earnings per common share for the three
months ended March 31, 2004 includes the 7,778,425 common shares that
would be issuable upon conversion of our 3.75% convertible notes due
2022. The convertible notes became convertible as of March 31, 2004.
The convertible notes are convertible at the option of the holder into
our common shares, among other circumstances, during any calendar
quarter in which the closing price of our common shares for at least 20
of the last 30 trading days of the immediately preceding calendar
quarter is more than 120% of the conversion price of $32.1402, or
approximately $38.57 per share. The closing price condition was
satisfied as of March 31, 2004 and the convertible notes may be
converted at the option of the holder. The convertible notes will
remain convertible until June 30, 2004, unless the closing price
condition described above is satisfied again at June 30, 2004, at which
point the convertible notes will remain convertible for another
calendar quarter.
Note 3: Certain reclassifications were made to the prior period's
consolidated financial statements to conform to the 2004 presentation.
8
CONSOLIDATED SEGMENT INFORMATION SUMMARY TABLE
(In millions, except volumes and percentages)
(Unaudited)
Set forth below is a summary of certain items in our consolidated statements of
income and volumes by reportable segment.
Quarter Ended March 31,
-------------------------------- Percent
2004 2003 Change
-------------- -------------- ------
Volumes (in thousands of metric tons):
Agribusiness 20,393 19,232 6%
Fertilizer 1,760 1,861 (5)%
Edible oil products 714 859 (17)%
Milling products 966 825 17%
Other (soy ingredients) - 132 (100)%
-------------- --------------
Food products total 1,680 1,816 (7)%
-------------- --------------
Total 23,833 22,909 4%
============== ==============
Net sales:
Agribusiness $4,631 $3,802 22%
Fertilizer 366 286 28%
Edible oil products 542 536 1%
Milling products 200 172 16%
Other (soy ingredients) - 46 (100)%
-------------- --------------
Food products total 742 754 (2)%
-------------- --------------
Total $5,739 $4,842 19%
============== ==============
Cost of goods sold:
Agribusiness $(4,425) $(3,685) 20%
Fertilizer (281) (226) 24%
Edible oil products (486) (472) 3%
Milling products (182) (157) 16%
Other (soy ingredients) - (29) (100)%
-------------- --------------
Food products total (668) (658) 2%
-------------- --------------
Total $(5,374) $(4,569) 18%
============== ==============
Gross profit:
Agribusiness $206 $117 76%
Fertilizer 85 60 42%
Edible oil products 56 64 (13)%
Milling products 18 15 20%
Other (soy ingredients) - 17 (100)%
-------------- --------------
Food products total 74 96 (23)%
-------------- --------------
Total $365 $273 34%
============== ==============
Selling, general and administrative expenses:
Agribusiness $(101) $ (74) 36%
Fertilizer (31) (19) 63%
Edible oil products (35) (39) (10)%
Milling products (11) (10) 10%
Other (soy ingredients) - (7) (100)%
-------------- --------------
Food products total (46) (56) (18)%
-------------- --------------
Total $(178) $(149) 19%
============== ==============
Foreign exchange gain (loss):
Agribusiness $(5) $11
Fertilizer (11) (2)
Edible oil products - -
Milling products - -
Other (soy ingredients) - 1
-------------- --------------
9
Quarter Ended March 31,
-------------------------------- Percent
2004 2003 Change
-------------- -------------- ------
Food products total - 1
-------------- --------------
Total $(16) $10
============== ==============
Interest income:
Agribusiness $2 $3 (33)%
Fertilizer 9 11 (18)%
Edible oil products 3 1 200%
Milling products 2 - -
Other (soy ingredients) - - -
-------------- --------------
Food products total 5 1 400%
-------------- --------------
Total $16 $15 7%
============== ==============
Interest expense:
Agribusiness $(30) $(13) 131%
Fertilizer (11) (12) (8)%
Edible oil products (7) (9) (22)%
Milling products (3) (2) 50%
Other (soy ingredients) - (2) (100)%
-------------- --------------
Food products total (10) (13) (23)%
-------------- --------------
Total $(51) $(38) 34%
============== ==============
-------------------------------------------------------------------------------------------------------------
Segment operating profit:
Agribusiness $72 $44 64%
Fertilizer 41 38 8%
Edible oil products 17 17 -
Milling products 6 3 100%
Other (soy ingredients) - 9 (100)%
-------------- --------------
Total(1) $136 $111 23%
============== ==============
-------------------------------------------------------------------------------------------------------------
----------
Note 1: Total segment operating profit is Bunge's consolidated income from
continuing operations before income taxes and minority interest that
includes an allocated portion of the foreign exchange gains and losses
relating to debt financing operating working capital, including readily
marketable inventories. Also included in total segment operating profit
is interest income and interest expense attributable to the financing of
operating working capital. Total segment operating profit is a financial
measure not calculated in accordance with generally accepted accounting
principles in the United States, which we refer to as GAAP and is not
intended to replace income from continuing operations before income
taxes and minority interest, the most directly comparable GAAP measure.
Total segment operating profit is a key performance measurement used by
Bunge's management to evaluate whether its operating activities cover
the financing costs of its business. Bunge believes total segment
operating profit is a more complete measure of its operating
profitability, since it allocates foreign exchange gains and losses and
the cost of debt financing working capital to the appropriate operating
segments. Total segment operating profit is not a measure of
consolidated operating results under GAAP and should not be considered
as an alternative to income from continuing operations before income
taxes and minority interest or any other measure of consolidated
operating results under GAAP.
Below is a reconciliation of income from continuing operations before income
taxes and minority interest to total segment operating profit:
Three Months
Ended
March 31,
-------------------------------
2004 2003
------------- -------------
Income from continuing operations before income taxes and minority interest...... $146 $ 98
Plus (minus) unallocated expenses--net........................................... (10) 13
------- -------
Total segment operating profit................................................... $136 $111
======= =======
Unallocated expenses-net includes interest income, interest expense, foreign
exchange gains and losses and other income and expense not directly attributable
to our operating segments.
10
Quarter Ended March 31,
-------------------------------- Percent
2004 2003 Change
-------------- -------------- ------
Income from continuing operations before income tax and
minority interest:
Segment operating profit $136 $111
Unallocated 10 (13)
-------------- --------------
Total $146 $98 49%
============== ==============
Depreciation, depletion and amortization:
Agribusiness $24 $27 (11)%
Fertilizer 17 12 42%
Edible oil products 7 6 17%
Milling products 3 4 (25)%
Other (soy ingredients) - - -
-------------- --------------
Food products total 10 10 -
-------------- --------------
Total $51 $49 4%
============== ==============
11
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
March 31, December 31, March 31,
2004 2003 2003
----------------- ------------------ ------------------
ASSETS
Cash and cash equivalents $ 523 $ 489 $ 396
Trade accounts receivable 1,587 1,495 1,257
Inventories 3,950 2,867 2,387
Other current assets 1,719 1,567 2,098
----------------- ------------------ ------------------
Total current assets 7,779 6,418 6,138
Property, plant and equipment, net 2,066 2,090 1,712
Goodwill 145 148 131
Investments in affiliates 536 537 69
Other non-current assets 699 691 502
----------------- ------------------ ------------------
Total assets $11,225 $9,884 $8,552
================= ================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt $ 1,553 $ 889 $1,178
Current portion of long-term debt 331 128 305
Trade accounts payable 1,946 1,678 1,217
Other current liabilities 1,464 1,242 1,236
----------------- ------------------ ------------------
Total current liabilities 5,294 3,937 3,936
Long-term debt 2,331 2,377 1,911
Other non-current liabilities 608 639 587
Minority interest in subsidiaries 564 554 510
Shareholders' equity 2,428 2,377 1,608
----------------- ------------------ ------------------
Total liabilities and shareholders' equity $11,225 $9,884 $8,552
================= ================== ==================
12
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Quarter Ended
March 31,
----------------------------
2004 2003
------------- -------------
OPERATING ACTIVITIES
Net income $70 $40
Adjustments to reconcile net income to cash used
for operating activities:
Minority interest 18 20
Depreciation, depletion and amortization 51 49
Other - net 13 (73)
Changes in operating assets and liabilities, excluding the
effects of acquisitions (872) (39)
------------- -------------
Cash used for operating activities (720) (3)
INVESTING ACTIVITIES
Payments made for capital expenditures (52) (53)
Business acquisitions, net of cash acquired (3) (5)
Proceeds from disposal of property, plant and equipment 8 9
------------- -------------
Cash used for investing activities (47) (49)
FINANCING ACTIVITIES
Net change in short-term debt 655 (51)
Proceeds from long-term debt 315 99
Repayments of long-term debt (160) (53)
Proceeds from sale of common shares 5 6
Dividends paid to shareholders (11) (10)
Dividends paid to minority interest (1) (31)
------------- -------------
Cash provided by (used for) financing activities 803 (40)
Effect of exchange rate changes on cash and cash
equivalents (2) 18
------------- -------------
Net increase (decrease) in cash and cash equivalents 34 (74)
Cash and cash equivalents, beginning of period 489 470
------------- -------------
Cash and cash equivalents, end of period $523 $396
============= =============
13
SIGNATURES
Pursuant to the requirements 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.
Date: April 30, 2004 BUNGE LIMITED
By:/s/ WILLIAM M. WELLS
-----------------------------
William M. Wells
Chief Financial Officer
14