EXHIBIT 99.1

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K includes forward-looking statements
that 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," "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. These factors include the risks,
uncertainties, trends and other factors discussed under the headings "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Item 1. Business--Business Overview" and elsewhere in this
current report on Form 8-K. Examples of forward-looking statements include all
statements that are not historical in nature, including statements regarding:

o our operations, competitive position, strategy and prospects;

o industry conditions, including the cyclicality of the oilseed
processing industry, unpredictability of the weather and the
impact of crop and animal disease on our business;

o estimated demand for the commodities and other products that
we sell;

o the effects of economic, political or social conditions and
changes in foreign exchange policy or rates;

o our ability to complete, integrate and benefit from
acquisitions, joint ventures and strategic alliances;

o governmental policies affecting our business, including
agricultural and trade policies;

o our funding needs and financing sources; and

o the outcome of pending regulatory and legal proceedings.

In light of these risks, uncertainties and assumptions, you should not
place undue reliance on any forward-looking statements. Additional risks that we
may currently deem immaterial or that are not presently known to us could also
cause the forward-looking events discussed in this Annual Report not to occur.
Except as otherwise required by applicable securities laws, we undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, changed circumstances or any
other reason after the date of this Annual Report.

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about their companies without fear of litigation. We are
taking advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act in connection with the forward-looking statements included
in this document.

Part II -- Item 6. Selected Financial Data

The following table sets forth our selected consolidated financial
information for the periods indicated. You should read this information together
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with the consolidated financial statements and notes to the
consolidated financial statements included elsewhere in this Annual Report on
Form 10-K.

Our consolidated financial statements are prepared in U.S. dollars and
in accordance with generally accepted accounting principles in the United States
(U.S. GAAP). The consolidated statements of income and cash flow data for each
of the three years ended December 31, 2005 and the consolidated balance sheet
data as of December 31, 2005 and 2004 are derived from our audited consolidated
financial statements included in this report on Form 8-K. The consolidated
statements of income and cash flow data for the years ended December 31, 2002
and 2001 and the consolidated balance sheet data as of December 31, 2003, 2002
and 2001 are derived from our audited consolidated financial statements that are
not included in this report on Form 8-K.

In October 2002, we acquired a controlling interest in Cereol, S.A., a
French agribusiness company, and in April 2003 we acquired the remaining
ownership interest in Cereol. As a result, we now own 100% of Cereol's share
capital and voting rights. Cereol's results of operations have been included in
our historical financial statements since October 1, 2002.

Year Ended December 31,
---------------------------------------------------------------
2005 2004 2003 2002 2001
----------- --------- --------- --------- ---------
(US$ in millions)

Consolidated Statements of Income Data:
Net sales........................................... $ 24,275 $ 25,168 $ 22,165 $ 13,882 $ 11,302
Cost of goods sold.................................. (22,704) (23,282) (20,860) (12,544) (10,331)
----------- --------- --------- --------- ---------
Gross profit........................................ 1,571 1,886 1,305 1,338 971
Selling, general and administrative expenses........ (956) (871) (691) (579) (423)
Gain on sale of soy ingredients business............ -- -- 111 -- --
Interest income..................................... 104 103 102 71 91
Interest expense.................................... (231) (214) (215) (176) (223)
Foreign exchange (losses) gains..................... (22) (31) 92 (179) (148)
Other income (expense)--net......................... 53 31 19 6 (4)
----------- --------- --------- --------- ---------
Income from continuing operations before income
tax and minority interest....................... 519 904 723 481 264
Income tax benefit (expense)........................ 82 (289) (201) (104) (68)
----------- --------- --------- --------- ---------
Income from continuing operations before minority
interest........................................ 601 615 522 377 196
Minority interest................................... (71) (146) (104) (102) (72)
----------- --------- --------- --------- ---------
Income from continuing operations................... 530 469 418 275 124
Discontinued operations, net of tax of $5 (2003),
$1 (2002), $0 (2001)............................ -- -- (7) 3 3
----------- --------- --------- --------- ---------
Income before cumulative effect of change in
accounting principles........................... 530 469 411 278 127
Cumulative effect of change in accounting
principles, net of tax of $6 (2002) and $4 (2001) -- -- -- (23) 7
----------- --------- --------- --------- ---------
Net income.......................................... $ 530 $ 469 $ 411 $ 255 $ 134
=========== ========= ========= ========= =========

Year Ended December 31,
--------------------------------------------------------------------
2005 2004 2003 2002 2001
------------ ------------ ------------ ------------ ------------
(US$, except outstanding share data)

Per Share Data:
Earnings per common share--basic:
Income from continuing operations................... $ 4.73 $ 4.42 $ 4.19 $ 2.87 $ 1.73
Discontinued operations............................. -- -- (.07) .03 .04
Cumulative effect of change in accounting
principles -- -- -- (.24) .10
------------ ------------ ------------ ------------ ------------
Net income per share................................ $ 4.73 $ 4.42 $ 4.12 $ 2.66 $ 1.87
============ ============ ============ ============ ============
Earnings per common share--diluted(1):
Income from continuing operations................... $ 4.43 $ 4.10 $ 3.89 $ 2.83 $ 1.72
Discontinued operations............................. -- -- (.06) .03 .04
Cumulative effect of change in accounting principles -- -- -- (.23) .10
------------ ------------ ------------ ------------ ------------
Net income per share................................ $ 4.43 $ 4.10 $ 3.83 $ 2.63 $ 1.86
============ ============ ============ ============ ============
Cash dividends declared per common share............ $ .560 $ .480 $ .420 $ .385 $ .095
Weighted average common shares outstanding--
basic(1)......................................... 112,131,739 106,015,869 99,745,825 95,895,338 71,844,895
Weighted average common shares outstanding--
diluted(1)....................................... 120,853,928 115,674,056 108,654,027 97,395,005 72,004,754

Year Ended December 31,
---------------------------------------------------------------
2005 2004 2003 2002 2001
---------- ---------- ----------- ----------- -------------
(US$ in millions)

Consolidated Cash Flow Data:
Cash provided by (used for) operating activities...... $ 382 $ 802 $ (41) $ 128 $ 205
Cash (used for) provided by investing activities...... (480) (824) 101 (1,071) (175)
Cash provided by (used for) financing activities...... 21 (91) (102) 1,295 (224)

December 31,
---------------------------------------------------------------
2005 2004 2003 2002 2001
---------- ---------- ----------- ----------- -------------
(US$ in millions)

Consolidated Balance Sheet Data:
Cash and cash equivalents............................. $ 354 $ 432 $ 489 $ 470 $ 199
Inventories(2)........................................ 2,769 2,636 2,867 2,407 1,368
Working capital....................................... 2,947 2,766 2,481 1,655 938
Total assets.......................................... 11,446 10,907 9,884 8,349 5,443
Short-term debt, including current portion of
long-term debt..................................... 589 681 1,017 1,499 983
Long-term debt........................................ 2,557 2,600 2,377 1,904 830
Redeemable preferred stock(3)......................... -- -- 171 171 171
Common shares and additional paid in capital, net of
receivable from former sole shareholder............ 2,631 2,362 2,011 1,945 1,631
Shareholders' equity.................................. $ 4,226 $ 3,375 $ 2,377 $ 1,472 $ 1,376

Year Ended December 31,
--------------------------------------------------------------
2005 2004 2003 2002 2001
---------- ---------- ----------- ----------- ------------
(in millions of metric tons)

Other Data:
Volumes:
Agribusiness...................................... 97.5 88.6 87.0 69.6 57.5
Fertilizer........................................ 11.5 11.6 11.5 10.7 9.0
Food products:
Edible oil products............................... 4.3 4.7 4.1 2.0 1.6
Milling products.................................. 3.9 4.0 3.5 3.3 3.3
Other............................................. -- -- 0.1 0.2 0.1
Total food products.................................. 8.2 8.7 7.7 5.5 5.0
Total volume...................................... 117.2 108.9 106.2 85.8 71.5

- ----------------------
(1) In October 2005, Bunge Limited announced its intent to redeem on
November 22, 2005 for cash the remaining approximately $242 million
principal amount outstanding of its 3.75% convertible notes.
Substantially all of the then outstanding convertible notes were
converted into 7,532,542 common shares of Bunge Limited prior to the
redemption date. The calculation of diluted earnings per common share
for the year ended December 31, 2005 includes the weighted average
common shares that were issuable upon conversion of the convertible
notes through the date of redemption. The calculation of diluted
earnings per common share for the years ended December 31, 2004, 2003
and 2002 includes the weighted average common shares that were issuable
upon conversion of the convertible notes during this period.

(2) Included in inventories were readily marketable inventories of $1,534
million, $1,264 million, $1,846 million, $1,517 million and $764
million at December 31, 2005, 2004, 2003, 2002 and 2001, respectively.
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.

(3) These shares were redeemed in November 2004.

Part II -- Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following should be read in conjunction with "Cautionary Statement
Regarding Forward-Looking Statements" and our combined consolidated financial
statements and notes thereto included as part of this Annual Report on Form
10-K.

Operating Results

Factors Affecting Operating Results

Our results of operations are affected by the following key factors in
each of our business divisions:

Agribusiness

In the agribusiness division, we purchase, store, process, transport
and sell agricultural commodities and commodity products. Profitability in this
division is principally affected by volatility in the prices of agricultural
commodities and commodity products and the availability and cost of
transportation and logistics services, including truck, barge, rail and ocean
freight. Additionally, profitability in the division is also affected by the
relative prices of processed oilseed products and the raw materials necessary to
produce them, which are influenced by the global supply and demand for each. Our
oilseed processing profitability is also impacted by industry capacity
utilization and energy costs. Availability of agricultural commodities is
affected by weather conditions, governmental policies and agricultural growing
patterns. Demand is affected by growth in worldwide consumption of food
products, population growth, changes in per capita incomes and the relative
prices of substitute agricultural products. We expect that population growth and
rising standards of living will continue to have a positive impact on global
demand for our agribusiness products.

From time to time, imbalances may exist between oilseed processing
capacity and demand for oilseed products, which impacts our decisions regarding
whether and when to purchase, store, process, transport or sell these
commodities, including whether to reduce our own oilseed processing capacity.

Fertilizer

In the fertilizer division, demand for our products is affected by the
profitability of the Brazilian agricultural sector, agricultural commodity
prices, international fertilizer prices, the types of crops planted, the number
of acres planted, the quality of the land under cultivation and weather-related
issues affecting the success of the harvest. In addition, our selling prices are
influenced by international selling prices for imported fertilizers and raw
materials, such as phosphate, ammonia and urea, as our products are priced to
import parity.

Profitability in our fertilizer division is also affected by the cost
of imported raw materials since we do not produce locally all of our raw
material requirements. A significant portion of our raw material needs are met
with imports. The Brazilian fertilizer business is also a seasonal business with
fertilizer sales concentrated in the third and fourth quarters of the year. As a
result, we generally import and mine raw materials and produce finished goods
during the first half of the year in preparation for the main Brazilian
cultivation season that occurs during the second half of the year.

Food Products

In the food products division, which consists of our edible oil
products and milling products segments, our operations are affected by changes
in the prices of raw materials, such as crude vegetable oils and grains, the mix
of products we sell, changes in eating habits, changes in per capita incomes,
consumer purchasing power levels and changes in general economic conditions and
the competitive environment in Europe, North America and Brazil, the principal
markets of our food products division. Competition in this industry has
intensified in the past several years due to consolidation in the supermarket
industry and attempts by our competitors to increase market share.

In addition, our results of operations are affected by the following
factors:

Foreign Currency Exchange Rates

Due to the global nature of our operations, our operating results can
be materially impacted by fluctuations in currency exchange rates. Both
translation of our foreign subsidiary financial statements and foreign currency
transactions affect our results as described below.

Translation of Foreign Currency Financial Statements. Our reporting
currency is the U.S. dollar. However, the functional currency of the majority of
our foreign subsidiaries is their local currency. We translate the amounts
included in the consolidated statements of income and cash flows of our foreign
subsidiaries into U.S. dollars on a monthly basis at weighted average exchange
rates, which we believe approximates the actual exchange rates on the dates of
the transactions. Translations of the local currency income statement and cash
flow amounts to U.S. dollars are affected by fluctuations of the local currency
during a quarter versus the U.S. dollar. Further, comparisons of results between
quarters are affected by the differences in the average exchange rates during
one quarter versus another quarter.

Our foreign subsidiaries' assets and liabilities are translated into
U.S. dollars from local currency at period end exchange rates and we record the
resulting foreign exchange translation adjustments in our consolidated balance
sheets as a component of accumulated other comprehensive income (loss). Included
in other comprehensive income for the year ended December 31, 2005, 2004 and
2003 were foreign exchange net translation gains of $101 million, $217 million
and $489 million, respectively, representing the net gains from the translation
of our foreign subsidiaries' assets and liabilities.

Foreign Currency Transactions. Certain of our foreign subsidiaries,
most significantly those in Brazil, have monetary assets and liabilities that
are denominated in U.S. dollars. These U.S. dollar denominated monetary assets
and liabilities are remeasured into their respective functional currencies at
exchange rates in effect at the applicable balance

sheet date. The resulting gain or loss is included in our consolidated
statements of income as a foreign exchange gain or loss.

We also enter into derivative financial instruments, such as foreign
currency forward contracts, swaps and options, to limit exposures to changes in
foreign currency exchange rates with respect to our foreign currency denominated
assets and liabilities and our local currency operating expenses. These
derivative instruments are marked-to-market, with changes in their fair value
recognized as a component of foreign exchange in our consolidated statements of
income. We may also hedge other foreign currency exposures as deemed
appropriate.

Brazil. The functional currency of our Brazilian subsidiaries is the
Brazilian real. As such, exchange rate changes between the U.S. dollar and the
real affect our operating profitability. The real appreciated 13% against the
U.S. dollar at December 31, 2005 compared to the rate at December 31, 2004, and
the real appreciated 9% against the U.S. dollar at December 31, 2004 when
compared to the rate at December 31, 2003. In 2005, the average real-U.S. dollar
exchange rate was R$2.435, compared to R$2.926 in 2004, which represents a 20%
strengthening in the value of the real versus the U.S. dollar in 2005.

We use long-term intercompany loans to reduce our exposure to foreign
currency fluctuations in Brazil, particularly their effects on our results of
operations. These loans do not require cash payment of principal and are treated
as analogous to equity for accounting purposes. As a result, the foreign
exchange gains or losses on these intercompany loans are recorded in other
comprehensive income (loss). This is in contrast to foreign exchange gains or
losses on third-party debt and short-term intercompany debt, which are recorded
in foreign exchange gains (losses) in our consolidated statements of income.

Agribusiness Segment--Brazil. Our agribusiness sales are U.S.
dollar-denominated or U.S. dollar-linked. In addition, commodity inventories in
our agribusiness segment are stated at market value, which is generally linked
to U.S. dollar-based international prices. As a result, these commodity
inventories provide a natural hedge to our exposure to fluctuations in currency
exchange rates in our agribusiness segment. Devaluations of the real against the
U.S. dollar generally have a positive effect on our agribusiness segment results
in Brazil, as real-denominated industrial and selling, general and
administrative (SG&A) costs are translated to U.S. dollars at weaker real to
U.S. dollar exchange rates, which results in lower U.S. dollar costs.
Devaluations of the real generate gains based on the changes in the local
currency value of these commodity inventories, which are reflected in cost of
goods sold in our consolidated statements of income. However, devaluations of
the real will also generate offsetting net foreign exchange losses on the net
U.S. dollar monetary liability position of our Brazilian agribusiness
subsidiaries, which are reflected in foreign exchange losses in our consolidated
statements of income. As our Brazilian subsidiaries are primarily funded with
intercompany, U.S. dollar-denominated debt, the mark-to-market gains on the
commodity inventories generally offset the foreign exchange losses on the
intercompany U.S. dollar-denominated debt. Our effective tax rate is also
favorably affected by the devaluation of the real, as we recognize tax benefits
related to foreign exchange losses on certain intercompany loans. The foreign
exchange losses eliminate in our consolidated statements of income but the
related tax effects remain.

Appreciations generally have a corresponding negative effect on our
results when local currency-denominated costs are translated to U.S. dollars at
stronger real to U.S. dollar exchange rates resulting in higher U.S. dollar
costs and losses based on changes in the local currency value of our
agribusiness segment commodity inventories. At the same time, appreciations of
the real generate offsetting net foreign exchange gains on the net U.S. dollar
monetary position of our Brazilian subsidiaries, which are reflected in foreign
exchange gains in our consolidated statements of income. Our effective tax rate
is unfavorably affected by the appreciation of the real, as we incur income
taxes related to foreign exchange gains on certain intercompany loans. However,
we use derivative instruments to offset the foreign exchange gains on certain
intercompany loans, which reduce the income tax expense resulting from the
appreciation of the real.

Fertilizer Segment--Brazil. Our fertilizer segment sales prices are
linked to U.S. dollar-priced imported and domestic raw materials. Mining,
industrial and SG&A expenses are real-denominated costs. Inventories in our
fertilizer segment are accounted for on the historical cost basis and are not
marked-to-market. These inventories are generally financed with U.S.
dollar-denominated intercompany loans. Appreciations of the real against the
U.S. dollar result in higher mining, industrial and SG&A expenses when
translated into U.S. dollars and net foreign exchange gains on the net U.S.
dollar monetary liability position of our fertilizer segment. In addition, our
gross profit margins are adversely affected by appreciations of the real as our
local currency revenues are linked to U.S.-dollar priced imported and domestic
raw materials, and we are selling higher cost inventories acquired and produced
when the real was weaker.

Inventories are typically acquired and produced in the first half of the year,
while products are typically sold in the second half of the year. Thus, the
recording of the exchange gains on the net U.S. dollar monetary liability
position and the effects of the appreciating real on our gross profit margins
generally do not occur in the same quarterly reporting period. As such, the
foreign exchange impact on the intercompany debt is reflected monthly in our
results while the impact on gross profit margins is reflected at the time
products are sold. The converse is true for devaluations of the real and their
effects on our financial statements.

Edible Oil and Milling Products Segment--Brazil. Our food products
businesses are generally local currency businesses. The costs of raw materials,
principally wheat and soybean oil, are largely U.S.-dollar linked and changes in
the costs of these raw materials have historically been passed through to the
customer in the form of higher or lower selling prices. However, delays or
difficulties in passing through changes in raw materials costs into local
currency selling prices can affect margins.

Other Operations. We operate in countries that are members of the
European Union and several European countries that are not members of the
European Union. Our risk management policy is to fully hedge our monetary
exposures in those countries to minimize the financial effects of fluctuations
in the euro and other European currencies. We also operate in Argentina, where
we are exposed to the peso. Our risk management policy is to fully hedge our
monetary exposure to the financial effects of fluctuations in the value of the
peso relative to the U.S. dollar.

Income Taxes

As a Bermuda exempted company, we are not subject to income taxes in
our jurisdiction of incorporation. However, our subsidiaries, which operate in
multiple tax jurisdictions, are subject to income taxes at various statutory
rates.

In 2005, we received a favorable U.S. tax ruling with respect to the
tax status of certain entities acquired in the 2002 acquisition of Cereol S.A.
(Cereol). We had recorded a $125 million deferred tax liability in the opening
balance sheet of Cereol in 2002, related to unremitted earnings of a subsidiary
that were not considered to be permanently reinvested. Based upon the final
ruling received in 2005, we determined that the subsidiary could be liquidated
without generating tax on the unremitted earnings. As a result of receipt of the
favorable U.S. tax ruling, and in accordance with EITF Issue No. 93-7,
Uncertainties Related to Income Taxes in a Purchase Business Combination, we
reduced certain indefinite lived intangible assets acquired in the Cereol
acquisition by $39 million, net of deferred tax liabilities, to zero and then
recognized a $86 million non-cash tax benefit in our consolidated statements of
income. In conjunction with this transaction, we incurred $9 million of tax
expense in 2005, related to the repatriation of the post-acquisition unremitted
earnings of a foreign subsidiary under the provisions of the American Jobs
Creation Act of 2004 (the Jobs Act).

We have in the past obtained tax benefits under U.S. tax laws providing
incentives under the provisions of the Extraterritorial Income Act (ETI)
legislation. However, the Jobs Act ultimately repeals the ETI benefit. Under the
Jobs Act, the ETI will be phased out with 100% of the otherwise available ETI
benefit retained for 2004, 80% of the otherwise available ETI benefit retained
for 2005, 60% of the otherwise available ETI benefit retained for 2006 and the
ETI benefit phased out completely in 2007. The ETI benefit has been replaced
with an income tax deduction intended to allocate benefits previously provided
to U.S. exporters across all manufacturers when fully phased in. Although most
of our U.S. operations qualify as "manufacturing," we do not expect to receive
significant benefits from this new tax legislation as we have from the prior one
primarily due to our U.S. tax position.

Inflation

Inflation did not have a material impact on our business in 2005, 2004
or 2003.

Results of Operations

2005 Overview

Our agribusiness results for 2005 were lower than 2004 despite higher
volumes. Overall, agribusiness volumes for 2005 increased over 2004 as customers
continued to respond to lower agricultural commodity prices and lower ocean
freight prices as compared to 2004's higher prices. Soybean prices declined
significantly in the second half of 2004, in response to a record U.S. soybean
crop and for most of 2005 remained lower than 2004. Spot market prices for ocean
freight have declined primarily due to an increase in vessel availability
resulting from new capacity and a reduction in Chinese demand for ocean freight.
As a result, our agribusiness margins have suffered, as it is more difficult to
fully recover our freight costs for shipments to customers. Our 2006
agribusiness results will continue to be pressured by freight costs.

In Brazil, farm economics in 2005 deteriorated due to a drought, lower
soybean prices and a steadily appreciating real. Brazilian farmers reacted to
these conditions by withholding crop sales which negatively affected our results
in this region. Our agribusiness results also suffered from the effects of a
stronger real on local currency costs when these costs were translated into U.S.
dollars. Our European agribusiness margins improved as a result of our European
biodiesel operations, which were contributed to a joint venture in the fourth
quarter of 2005. See "--Liquidity and Capital Resources--Formation of European
Biodiesel Joint Venture" below. Softseed operations benefited from ample
commodity supplies and strong demand for vegetable oil from the biodiesel
sector.

Our fertilizer results for 2005 were lower than 2004 due to higher
costs and lower margins. Margins suffered primarily due to a stronger real which
contributed to higher inventory carrying costs and operating expenses, which are
real-based. In anticipation of stronger demand later in 2005, we purchased and
manufactured excess fertilizer inventories early in the year which resulted in
increased inventory carrying costs as these inventories were purchased when the
real was weaker but sold later at a stronger real-U.S. dollar exchange rate,
which pressured our margins when translated into U.S. dollars. Additionally, as
a result of lower 2004 retail fertilizer sales in the soybean sector, our
fertilizer inventory levels were higher than necessary going into 2005. By the
end of 2005, we sold a significant portion of these higher priced excess
fertilizer inventories at lower prices, reducing our inventories to more
appropriate levels. Margins were further pressured by the inability of farmers
to absorb higher selling prices, which was in contrast to 2004, when farmers
purchased fertilizer earlier in the year to take advantage of lower prices.
Fertilizer results were also negatively impacted by increases in bad debt
expenses.

As a result of these industry conditions in Brazil, and our efforts to
reduce costs and improve capacity utilization, we have reduced our workforce in
Brazil by approximately 10%, permanently closed two oilseed processing plants
and idled seven fertilizer facilities and initiated other cost-savings measures
in 2005. We have also expanded our risk management program to lower our exposure
to the real by hedging both balance sheet and income statement exposures. Our
2005 agribusiness and fertilizer results included impairment and restructuring
charges of $40 million and $2 million, respectively, reflecting the costs of the
plant closures and workforce reductions in Brazil. We estimate that these steps
will save $60 million to $80 million in 2006. In addition, we are expanding our
phosphate mining capacity in Brazil by over 10% allowing us to substitute more
expensive imported fertilizer raw materials with domestic supply at lower costs.

We expect the recovery in the Brazilian farm sector to be slow in 2006
largely due to the continued strengthening of the real. As a result, we expect
that retail fertilizer volumes in the Brazilian market will be flat in 2006. We
also expect a more competitive oilseed processing environment in Argentina, as
the industry expands capacity in that country. In addition, we expect to close
three additional oilseed processing plants in Brazil in the first quarter of
2006, which will result in asset impairment and restructuring charges related to
those closures, the amount of which has not yet been determined. We will
continue to monitor market conditions in South America, and additional future
restructuring and asset impairment charges may result if conditions improve
slower than expected or not to the extent expected.

Although edible oil results improved in North America and Brazil in
2005, these increases were more than offset by declines in profitability in
Eastern Europe. Brazil and the United States benefited from higher margins
primarily due to lower raw material costs. In addition, the increased demand for
low and reduced trans-fat products boosted our canola oil margins. Results in
Eastern Europe were negatively affected by lower average selling prices and the
high cost of raw materials we had purchased in 2004 in Romania and the Ukraine,
higher selling and marketing

expenses for repositioned and new margarine brands in Poland and higher selling
expenses in Russia due to the establishment of a new sales group. Until the
completion of a new sunseed crushing plant in Voronezh, Russia, which is
expected by the end of 2006, we will continue to supply our Russian bottled oil
business with imports at higher costs compared to domestic supply. In 2005, we
also incurred $2 million of restructuring charges relating to workforce
reductions in Brazil and Europe.

Our milling product segment results for 2005 were higher than 2004.
Wheat milling products benefited from improved product mix resulting in higher
volumes and selling prices in Brazil. Corn milling results declined primarily
due to lower margins.

Segment Results

In the second quarter of 2003, we sold our Brazilian soy ingredients
business to The Solae Company, our joint venture with DuPont. As a result, our
"other (soy ingredients)" segment now reflects only the historical results of
this soy ingredients business.

In the first quarter 2006 Form 10-Q, we reclassified certain edible oil
product lines from the agribusiness segment to the edible oil products segment.
As a result, amounts in our segment results for the years ended December 31,
2005, 2004 and 2003 have been reclassified to conform to the 2006 presentation.

A summary of certain items in our consolidated statements of income and
volumes by reportable segment for the periods indicated is set forth below.

Year Ended December 31,
-------------------------------------------------------------------------
Percent Percent
2005 2004 Change 2003 Change
----------- ------------- ------------ ------------ -------------
(US$ in millions, except percentages)

Volumes (in thousands of metric
tons):
Agribusiness............................ 97,561 88,619 10% 86,962 2%
Fertilizer.............................. 11,478 11,589 (1)% 11,538 --
Edible oil products..................... 4,266 4,728 (10)% 4,100 15%
Milling products........................ 3,890 3,987 (2)% 3,468 15%
Other (soy ingredients)................. -- -- -- 140 (100)%
----------- ------------- ------------
Total................................ 117,195 108,923 8% 106,208 3%
=========== ============= ============

Net sales:
Agribusiness............................ $ 17,357 $ 17,911 (3)% $ 16,224 10%
Fertilizer.............................. 2,674 2,581 4% 1,954 32%
Edible oil products..................... 3,385 3,872 (13)% 3,184 22%
Milling products........................ 859 804 7% 751 7%
Other (soy ingredients)................. -- -- -- 52 (100)%
----------- ------------- ------------
Total................................ $ 24,275 $ 25,168 (4)% $ 22,165 14%
=========== ============= ============

Costs of goods sold:
Agribusiness............................ $ (16,536) $ (16,975) (3)% $ (15,675) 8%
Fertilizer.............................. (2,333) (1,980) 18% (1,581) 25%
Edible oil products..................... (3,101) (3,615) (14)% (2,900) 25%
Milling products........................ (734) (712) 3% (670) 6%
Other (soy ingredients)................. -- -- -- (34) (100)%
----------- ------------- ------------
Total................................ $ (22,704) $ (23,282) (2)% $ (20,860) 12%
=========== ============= ============

Gross profit:
Agribusiness............................ $ 821 $ 936 (12)% $ 549 70%
Fertilizer.............................. 341 601 (43)% 373 61%
Edible oil products..................... 284 257 11% 284 (10)%
Milling products........................ 125 92 36% 81 14%
Other (soy ingredients)................. -- -- -- 18 (100)%
----------- ------------- ------------
Total................................ $ 1,571 $ 1,886 (17)% $ 1,305 45%
=========== ============= ============

Selling, general and administrative
expenses:
Agribusiness............................ $ (456) $ (471) (3)% $ (332) 42%
Fertilizer.............................. (229) (197) 16% (129) 53%
Edible oil products..................... (215) (157) 37% (180) (13)%
Milling products........................ (56) (46) 22% (43) 7%
Other (soy ingredients)................. -- -- -- (7) (100)%
----------- ------------- ------------
Total................................ $ (956) $ (871) 10% $ (691) 26%
=========== ============= ============

Foreign exchange gain (loss):
Agribusiness............................ $ 29 $ (17) $ 89
Fertilizer.............................. (47) (32) (20)
Edible oil products..................... -- 5 --
Milling products........................ (1) -- --
Other (soy ingredients)................. -- -- (1)
----------- ------------- ------------
Total................................ $ (19) $ (44) $ 68
=========== ============= ============

Interest income:
Agribusiness............................ $ 21 $ 21 -- $ 26 (19)%
Fertilizer.............................. 57 50 14% 53 (6)%
Edible oil products..................... 3 6 (50)% 6 --
Milling products........................ 2 3 (33)% -- 100%
Other (soy ingredients)................. -- -- -- -- --
----------- ------------- ------------
Total................................ $ 83 $ 80 4% $ 85 (6)%
=========== ============= ============
Interest expense:
Agribusiness............................ $ (140) $ (111) 26% $ (80) 39%
Fertilizer.............................. (41) (50) (18)% (35) 43%
Edible oil products..................... (35) (32) 9% (24) 33%
Milling products........................ (7) (8) (13)% (8) --
Other (soy ingredients)................. -- -- -- (2) (100)%
----------- ------------- ------------
Total................................ $ (223) $ (201) 11% $ (149) 35%
=========== ============= ============

Segment operating profit:
Agribusiness............................ $ 275 $ 358 (23)% $ 252 42%
Fertilizer.............................. 81 372 (78)% 242 54%
Edible oil products..................... 37 79 (53)% 86 (8)%
Milling products........................ 63 41 54% 30 37%
Other (soy ingredients)................. -- -- -- 8 (100)%
----------- ------------- ------------
Total................................ $ 456 $ 850 (46)% $ 618 38%
=========== ============= ============

Depreciation, depletion and amortization:
Agribusiness............................ $ 110 $ 89 24% $ 77 16%
Fertilizer.............................. 104 70 49% 57 23%
Edible oil products..................... 50 41 22% 37 11%
Milling products........................ 14 12 17% 13 (8)%
Other (soy ingredients)................. -- -- -- -- --
----------- ------------- ------------
Total................................ $ 278 $ 212 31% $ 184 15%
=========== ============= ============
Net income ............................. $ 530 $ 469 13% $ 411 14%
=========== ============= ============

- -----------------------------
(1) Total segment operating profit is our consolidated income from
operations before income tax 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 an
allocation of interest income and interest expense attributable to the
financing of operating working capital.

Total segment operating profit is a non-GAAP measure and is not
intended to replace income from operations before income tax and
minority interest, the most directly comparable GAAP measure. Total
segment operating profit is a key performance measurement used by our
management to evaluate whether our operating activities cover the
financing costs of our business. We believe total segment operating
profit is a more complete measure of our operating profitability, since
it allocates foreign exchange gains and losses and the cost of debt
financing working capital to the appropriate operating segments.
Additionally, we believe total segment operating profit assists
investors by allowing them to evaluate changes in the operating results
of our portfolio of businesses before non-operating factors that affect
net income. 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 operations before income tax and
minority interest or any other measure of consolidated operating
results under GAAP.

Below is a reconciliation of income from continuing operations before
income tax and minority interest to total segment operating profit:

Year Ended December 31,
---------------------------------------
2005 2004 2003
---------- ---------- -----------
(US$ in millions)

Income from continuing operations before income tax and minority interest....... $519 $904 $723
Unallocated (income) expense--net(1)............................................ (63) (54) 6
Gain on sale of soy ingredients business........................................ -- -- (111)
---------- ---------- ------------
Total segment operating profit.................................................. $456 $850 $618
========== ========== ============

- -----------------------------
(1) Unallocated (income) expense--net includes interest income, interest
expense, foreign exchange gains and losses and other income and expense
not directly attributable to our operating segments.

2005 Compared to 2004

Agribusiness Segment. Agribusiness segment net sales decreased 3% due
to lower average selling prices for agricultural commodity products, partially
offset by an 10% increase in volumes. The decrease in average selling prices was
primarily due to increased global supply of grains and oilseeds. Agribusiness
volumes increased as customers responded to lower prices in 2005 for
agricultural commodities compared to 2004's higher prices.

Cost of goods sold decreased 3% primarily due to lower raw material
costs, partially offset by an increase in volumes. Included in cost of goods
sold in 2005 was $40 million of impairment and restructuring charges relating to
two oilseed processing plants in Brazil, which were closed in 2005, and the
impairment of one plant in India, a $27 million decrease in the remaining
balance of our allowance for recoverable taxes in Argentina, primarily as a
result of payments being received without delays and the significant improvement
in the Argentine government's financial condition, and a reversal of a $14
million provision for a transactional tax resulting from a favorable U.S. tax
ruling. Included in cost of goods sold in 2004 were $10 million of non-cash
impairment charges on long-lived assets and $7 million of restructuring charges
relating to our Western European oilseed processing operations.

Gross profit decreased 12% primarily due to lower results in our
Brazilian agribusiness operations caused by the slower pace of farmer selling,
which reduced margins and capacity utilization in Brazil, freight costs and
higher operational expenses due to the impact of the stronger real on local
currency costs when translated into U.S. dollars.

SG&A decreased 3% primarily due to a reduction in bad debt expense as a
result of recoveries on advances to farmers and lower variable compensation
expense, offset in part by the impact of the stronger Brazilian real on local
currency costs when translated into U.S. dollars. SG&A included $5 million of
restructuring charges relating to a workforce reduction in our Brazilian and
European operations.

Segment operating profit decreased 23% primarily due to the decrease in
gross profit.

Fertilizer Segment. Fertilizer segment net sales increased 4% primarily
due to an increase in average selling prices offset in part by a 1% decrease in
volumes. Retail volumes declined as farmers reduced their fertilizer purchases
due to reduced plantings of soybeans and a reduction in the use of fertilizers.
Partially offsetting the volume decline was an increase in nitrogen-based
fertilizer sales volumes in 2005 compared to 2004 as Brazilian farmers responded
to attractive sugar cane prices by increasing their sugar cane plantings.
Selling prices benefited from higher international prices primarily for
nitrogen-based fertilizer raw materials.

Cost of goods sold increased 18% primarily due to increases in imported
raw material costs, higher operational and depreciation expenses attributable to
new blending, granulation and acidulation plants that commenced production
during the second quarter of 2004 and higher costs due to the impact of the
stronger real on local currency costs when translated into U.S. dollars in 2005
compared to 2004. Legislation passed in Brazil in May 2005 enabled us to recover
$28 million in value-added tax credits, which are included as a reduction to
cost of goods sold.

Gross profit decreased by 43% primarily due to lower volumes, increases
in raw material costs, operational and depreciation expenses. We purchased and
manufactured fertilizer inventories in anticipation of stronger demand later in
the year, which resulted in increased inventory carrying costs as these
fertilizer inventories were purchased when the real was weaker but sold later at
a stronger real-U.S. dollar exchange rate. This negatively pressured margins as
fertilizer prices in U.S. dollar terms remained relatively stable. Margins were
further negatively affected by the inability of the farmers to absorb higher
selling prices.

SG&A increased 16% primarily due to higher bad debt expense of $44
million, higher employee expenses, a $2 million restructuring charge relating to
a workforce reduction in Brazil and the effect of the stronger real on local
currency costs when translated into U.S. dollars compared to last year. Bad debt
expense increased primarily due to increases in delinquent accounts as a result
of weakened farm economics in Brazil. In certain regions in Brazil, the 2005
crop was poor in quality and yield, primarily due to a drought. In 2005, SG&A
included a reversal of a provision of $10 million due to favorable settlement
relating to an audit of value added taxes in Brazil.

Segment operating profit decreased 78% primarily due to the decrease in
gross profit and increases in SG&A.

Edible Oil Products Segment. Edible oil products segment net sales
decreased 13% primarily due to lower average selling prices caused by a decrease
in raw material costs that resulted from increased global supply of oilseeds.
The decrease was also due to a 10% decline in volumes.

Cost of goods sold decreased 14% primarily due to lower raw material
costs offset partially by increases in energy costs. Included in cost of goods
sold in 2004 were $7 million of impairment charges related to write downs of

certain refining and packaging facilities in our North and South American edible
oil operations. Gross profit increased 11% primarily due to the increase in
sales volumes, lower raw material costs and a more profitable product mix in
most locations.

SG&A increased 37% primarily due to the effects of a stronger real on
local currency costs when translated into U.S. dollars, higher employee costs
related to building our sales force in Russia and higher advertising expenses in
Brazil and Poland related to the launch and repositioning of our margarine
brands. In 2005, SG&A included $2 million of restructuring charges relating to a
work force reductions in Brazil and Europe.

Segment operating profit decreased 53% primarily due to the increase in
SG&A.

Milling Products Segment. Milling products segment net sales increased
7% primarily due to higher average selling prices for wheat milling products as
a result of improved product mix and higher volumes in Brazil benefited by
increases in international wheat prices. Average selling prices for corn milling
products were slightly lower.

Cost of goods sold increased 3% primarily due to higher energy costs
and operational expenses resulting from the impact of the stronger real on local
currency costs when translated into U.S. dollars offset by lower volumes. In
addition, cost of goods sold for 2005 benefited from raw material purchases we
made earlier in the year prior to an increase in international wheat prices and
lower expenses due to synergies created from the exchange of our Brazilian
retail flour assets for the industrial flour assets of J. Macedo S.A. in 2004.
Gross profit increased 36% primarily due to higher average selling prices for
wheat milling products, lower raw material costs and a more profitable mix of
products sold.

SG&A increased 22% primarily due to the impact of the stronger real.
Segment operating profit increased 54% as a result of the improvement in gross
profit.

Consolidated Financial Costs. The following is a summary of
consolidated financial costs for the periods indicated:

Year Ended
December 31,
---------------------
2005 2004 Change
-------- ----------- ----------
(US$ in millions, except
percentages)

Interest income.................... $ 104 $ 103 1%
Interest expense................... (231) (214) 8%
Foreign exchange losses............ (22) (31)

Interest income increased 1% primarily due to higher average balances
of interest bearing accounts receivable. Interest expense increased 8% due to
higher average interest rates on short-term debt.

Foreign exchange losses of $22 million in 2005 included hedging costs
related to our exposure in Brazil partially offset by exchange gains on our
Brazilian U.S. dollar net monetary liability position primarily due to the 13%
appreciation of the real in 2005. In addition, the 2% devaluation of the
Argentine peso in 2005 resulted in exchange losses on our Argentine U.S. dollar
net monetary liability position.

Foreign exchange losses of $31 million in 2004 included hedging costs
related to our exposure in Brazil and exchange losses on our Brazilian U.S.
dollar net monetary liability position primarily due to the 7% devaluation of
the real in the first six months of 2004. During the third quarter of 2004, the
real appreciated 9% resulting in foreign exchange gains on the U.S. dollar net
monetary liability position in Brazil in that quarter. In the fourth quarter of
2004, the real and the euro appreciated against the U.S. dollar which resulted
in foreign exchange gains on the U.S. dollar net monetary liability positions of
Bunge's Brazilian and European subsidiaries. The foreign exchange gains recorded
in the third quarter of 2004 did not offset the foreign exchange losses recorded
in the first six months of 2004 primarily because the aggregate net U.S. dollar
monetary liability position in the third quarter of 2004 was less than it was in
the first half of 2004.

Other Income (Expense)--net. Other income (expense)--net increased $22
million to $53 million in 2005 from $31 million in 2004 primarily due to higher
earnings from Bunge's French vegetable oil processing and European biodiesel
joint ventures and gains on the sales of long-lived assets. 2005 included a
pretax gain of $8 million from the formation of our biodiesel joint venture with
Diester Industrie in December 2005. 2004 included a pretax gain of $5 million
from our asset exchange transaction with J. Macedo.

Income Tax Benefit (Expense). Income tax benefit for 2005 of $82
million included a non-cash $77 million reversal of a deferred tax liability as
a result of a favorable U.S. tax ruling with respect to unremitted earnings of a
foreign subsidiary acquired (See "--Income Taxes" above) and a $79 million
reversal of deferred tax valuation allowances as a result of the projected
utilization of net operating loss carry-forwards. We were able to recognize
these operating loss carry-forwards because of the legal restructuring of the
Bunge's Brazilian subsidiaries, increased statutory taxable income of these
subsidiaries caused by the effects of the real appreciation and actions
undertaken to recover the net operating loss carry-forwards. The remaining
decrease in our income taxes was primarily attributable to a reduction in
earnings in higher tax jurisdictions.

Minority Interest. Minority interest expense decreased $75 million to
$71 million in 2005 from $146 million in 2004, primarily due to lower earnings
from our non-wholly owned subsidiaries and the acquisition of the remaining 17%
minority interest of Bunge Brasil S.A. in the third and fourth quarters of 2004.
Bunge now owns 100% of Bunge Brasil.

Net Income. Net income increased $61 million to $530 million in 2005
from $469 million in 2004. Net income for 2005 includes the reversal of deferred
tax valuation allowances of $79 million and a reduction of deferred tax
liabilities of $77 million due to a favorable tax ruling, impairment and
restructuring charges of $33 million, net of tax, the reversal of valuation
allowances on recoverable taxes of $19 million, net of tax, the value-added tax
credits of $17 million, net of tax, related to a change in tax laws, gains on
sales of long-lived assets of $13 million, net of tax and a reversal of a
transactional tax provision for $10 million, net of tax, due to a favorable tax
ruling. Net income for 2004 included $15 million of after tax impairment and
restructuring charges on long-lived assets in Europe and a $3 million after tax
gain on the asset exchange transaction with J. Macedo.

2004 Compared to 2003

Agribusiness Segment. Agribusiness segment net sales increased 10% due
to higher average selling prices for soy commodity products and a 2% increase in
volumes. Selling prices for soy commodity products increased compared to last
year primarily due to the shortage associated with the reduced 2003/2004 U.S.
soybean crop. Prices of our softseed products also increased following the trend
of soybean product prices. Volume increases were driven mainly by higher
origination volumes in North America and South America.

Cost of goods sold increased 8% due to higher raw material costs,
increased volumes and provisions related to the values of certain forward sales
contracts for agricultural commodity products due to nonperformance by
counterparties. Included in cost of goods sold in 2004 were $10 million of
non-cash impairment charges on long-lived assets and $7 million of restructuring
charges relating to our Western European oilseed processing operations. Included
in cost of goods sold in 2003 were $56 million of non-cash impairment charges on
long-lived assets in our European oilseed processing operations, a $39 million
decline in our allowance for recoverable taxes as a result of either cash
received by us or compensation against taxes owed by us to the Argentine
government and a curtailment gain of $15 million relating to the reduction of
pension and postretirement healthcare benefits of certain U.S. employees.

Gross profit increased 70% due to improvements in margins which
resulted from effective freight and risk management, strong softseed
profitability, efficiency improvements in logistics and higher volumes.

Selling, general and administrative expenses (SG&A) increased 42%
primarily due to increases in bad debt expense associated with higher commodity
prices, increased variable employee compensation expense relating to the
improved financial results, increased legal and tax provisions and an increase
in the work force in our international marketing business. SG&A in 2003
benefited from a $5 million curtailment gain relating to certain postretirement
healthcare benefit plans.

Foreign exchange losses for 2004 were $17 million compared to foreign
exchange gains of $89 million in 2003. Through the first six months of 2004, the
real devalued against the U.S. dollar, resulting in exchange losses on our U.S.
dollar net monetary liability position in Brazil. Our U.S. dollar monetary
exposure in Brazil is typically at its highest level during the first half of
the year. During the second half of 2004, the real appreciated, resulting in
exchange gains on our U.S. dollar net monetary liability position in Brazil.
However, the exposure to the U.S. dollar was lower and thus the related exchange
gains recorded in the second half of 2004 were not enough to offset the exchange
losses recorded through the first six months of 2004. The exchange gains in 2003
resulted from the appreciation of the real. Foreign exchange gains and losses
are substantially offset by inventory mark-to-market adjustments, which are
included in cost of goods sold.

Interest expense increased 39% primarily due to higher average levels
of operating working capital, as a result of the higher commodity prices
experienced during most of the year.

Segment operating profit increased 42% primarily due to the
improvements in margins and volume growth.

Fertilizer Segment. Fertilizer segment net sales increased 32% due to
higher average selling prices. Selling prices benefited from higher
international selling prices for imported fertilizers and raw materials, which
helped increase local sales prices as local fertilizer products are priced to
import parity. Although volumes in 2004 were flat versus 2003, retail fertilizer
sales volumes increased 7% as a result of a slight increase in market share.
However, the retail fertilizer volume growth in 2004 was offset by a decrease in
sales volumes of lower margin fertilizer byproducts, such as gypsum.

Cost of goods sold increased 25% due to higher imported raw material
costs mitigated in part by lower local production costs as we are able to source
much of our raw materials from our own mines.

Gross profit increased 61% as a result of higher fertilizer selling
prices, partially offset by increases in imported raw material costs.

SG&A increased 53% primarily due to bad debt provisions associated with
the higher selling prices, increases in employee compensation expense because of
higher salaries and certain other labor and legal provisions. In addition, 2003
benefited from non-recurring credits relating to social health and welfare taxes
in Brazil and lower bad debt expense.

Segment operating profit increased 54% primarily due to the increase in
gross profit, partially offset by the increase in SG&A, higher foreign exchange
losses as a result of costs associated with managing foreign exchange exposure
and higher interest expense associated with increases in working capital levels.

Edible Oil Products Segment. The table below outlines our edible oil
products segment results for 2004 and 2003. The results for 2003 include the
results of Lesieur, a French bottled oil producer, which we sold to our Saipol
joint venture in July 2003. In addition, for comparative purposes, the 2003
results of our edible oil products segment excluding Lesieur and the results of
Lesieur alone are also presented.

Year Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------
2004 2003 2003 2003
----------- ------------- ------------- -----------
Excluding
Actual Actual Lesieur Lesieur
----------- ------------- ------------- -----------
(US$ in millions, except volumes)

Volumes (in thousands of metric tons)....................... 4,728 4,100 3,845 255
Net sales................................................... $ 3,872 $ 3,184 $ 2,909 $ 275
Cost of goods sold.......................................... (3,615) (2,900) (2,660) (240)
----------- ------------- ------------- -----------
Gross profit................................................ 257 284 249 35
Selling, general and administrative expenses................ (157) (180) (158) (22)
Foreign exchange gain....................................... 5 -- -- --
Interest income............................................. 6 6 6 --
Interest expense............................................ (32) (24) (22) (2)
----------- ------------- ------------- -----------
Segment operating profit............................... $ 79 $ 86 $ 75 $ 11
=========== ============= ============= ===========

Edible oil products segment net sales, excluding Lesieur, increased 33%
primarily due to a 23% increase in sales volumes and higher average selling
prices. Increases in selling prices were primarily due to higher raw material
costs, principally crude soybean oil. The increase in soybean oil prices also
resulted in higher selling prices for other softseed products as they follow the
trend of soybean oil prices primarily in North America and Eastern Europe.
Volumes increased primarily in North America as a result of stronger demand.

Cost of goods sold, excluding Lesieur, increased 36% primarily due to
increases in sales volumes and higher raw material costs. Included in cost of
goods sold in 2004 were $7 million of impairment charges relating to write-downs
of certain refining and packaging facilities in our North and South American
edible oil operations and in 2003, a $1 million curtailment gain relating to
certain postretirement healthcare benefit plans.

Gross profit, excluding Lesieur, increased 3% primarily due to
increases in sales volumes and margin expansion in Eastern Europe and Canada as
a result of the higher average selling prices partially offset by the impairment
charges incurred in 2004 and higher raw material costs.

SG&A, excluding Lesieur, decreased 1% primarily due to lower marketing
expenses. SG&A in 2003 benefited from a $1 million curtailment gain relating to
certain postretirement healthcare benefit plans.

Segment operating profit, excluding Lesieur, increased 5% primarily due
increases in sales volumes partially offset by higher interest expense
attributable to higher levels of working capital.

Milling Products Segment. Milling products segment net sales increased
7% primarily due to a 15% increase in sales volumes. Corn milling volumes
increased primarily due to higher sales to U.S. commercial customers, higher
sales under the U.S. government food aid program and the addition of a corn
milling facility acquired in the latter half of 2003. The increase in wheat
milling volumes was primarily due to the addition of our industrial flour
business which resulted from the asset exchange of Bunge's Brazilian retail
flour assets for J. Macedo S.A.'s industrial flour assets and $7 million in cash
in March 2004.

Cost of goods sold increased 6% due to the increase in sales volumes
and higher raw material costs. Gross profit increased 14% primarily due to the
increase in sales volumes.

Segment operating profit increased by 37% as a result of the
improvement in gross profit.

Consolidated Financial Costs. The following is a summary of
consolidated financial costs for the periods indicated:

Year Ended
December 31,
---------------------
Percent
2005 2004 Change
-------- ----------- ----------
(US$ in millions, except
percentages)
Interest income.................... $ 103 $ 102 1%
Interest expense................... (214) (215) --
Foreign exchange (losses) gains.... (31) 92

Included in interest income for 2004 was $10 million of interest income
earned on the cash invested in Brazil from the net proceeds of the June 2004
public equity offering, which was used in the third and fourth quarters of 2004
to acquire the remaining equity interest in Bunge Brasil that we did not already
own. Excluding this $10 million, interest income decreased 9% due to lower
interest rates earned on invested cash in Brazil, partially offset by an
increase in the average balance of invested cash. Interest expense decreased $1
million primarily due to lower interest rates on our debt portfolio and $14
million of benefits from interest rate hedges, partially offset by higher
average borrowings.

Foreign exchange losses of $31 million included costs associated with
managing foreign exchange exposure related to our monetary exposure in Brazil
and exchange losses on our Brazilian-U.S. dollar net monetary liability position
primarily due to the 7% devaluation of the real in the first six months of 2004.
The first half of the year is usually when our U.S. dollar net monetary
liability exposure in Brazil is at its highest level because of our acquisition
of crops harvested in April, May and June. During the six months ended December
31, 2004, the real appreciated 17% resulting in exchange gains on the U.S.
dollar net monetary liability position in Brazil in that period. However, the
exposure to the U.S. dollar was lower and thus the related exchange gains
recorded in the six months ended December 31, 2004 were not enough to offset the
exchange losses recorded in the first six months of 2004. The 8% appreciation in
the value of the euro during 2004 also resulted in exchange gains on our
European-U.S. dollar monetary liability position. The exchange gains in 2003
resulted from the 22% appreciation in the value of the Brazilian real versus the
U.S. dollar and a gain on a net U.S. dollar-denominated monetary asset in
Argentina. Foreign exchange gains and losses are substantially offset by
inventory marked-to-market adjustments, which are included in cost of goods
sold.

Other Income (Expense)--net. Other income (expense)--net increased $12
million to $31 million in 2004 from $19 million of income in 2003 primarily due
to $10 million of gains on interest rate derivatives and the pretax gain of $5
million on the asset exchange transaction with J. Macedo, offset by a decrease
in our earnings from Solae. Solae's results declined primarily due to lower
margins on product sales caused by the high commodity costs that existed during
most of 2004.

Income Tax Expense. Income tax expense increased $88 million to $289
million in 2004 from $201 million in 2003 primarily due to an increase in pretax
income. Our annual effective tax rate for 2004 was 32%, compared to an annual
effective tax rate of 28% in 2003. Excluding the tax-free gain on the sale of
our Brazilian soy ingredients business to Solae, the 2003 annual effective tax
rate was 33%. The primary cause of the decrease in the effective tax rate was
due to increased earnings in 2004 in lower tax jurisdictions.

Minority Interest. Minority interest expense increased $42 million to
$146 million in 2004 from $104 million in 2003 primarily due to increased
earnings at our less than wholly owned subsidiaries.

Net Income. Net income increased $58 million to $469 million in 2004
from $411 million in 2003. Net income for 2004 included $15 million of after tax
impairment and restructuring charges on long-lived assets in Europe and a $3
million after tax gain on the asset exchange transaction with J. Macedo. Net
income for 2003 included the $111 million gain on the asset sale of our
Brazilian soy ingredients business to Solae, an after tax gain of $16 million
relating to the curtailment of certain pension and postretirement healthcare
benefit plans, $40 million of after tax impairment charges on long-lived assets
in Europe and a loss on discontinued operations of $7 million related to
operations we sold in 2003.

Liquidity and Capital Resources

Our primary financial objective is to maintain sufficient liquidity
through a conservative balance sheet that provides flexibility to pursue our
growth objectives. Our current ratio, defined as current assets divided by
current liabilities, was 1.81 and 1.71 at December 31, 2005 and 2004,
respectively.

Cash and Readily Marketable Inventories. Cash and cash equivalents were
$354 million at December 31, 2005 and $432 million at December 31, 2004.

Included in our inventories were readily marketable inventories of
$1,534 million at December 31, 2005 and $1,264 million at December 31, 2004.
Readily marketable inventories are agricultural commodity inventories, financed
primarily with debt, which are readily convertible to cash because of their
commodity characteristics, widely available markets and international pricing
mechanisms. The increase in inventories was primarily attributable to our North
American operations where inventories returned to more normal levels at the end
of 2005 relative to unusually low inventory levels at the end of 2004 which were
caused by reluctant farmer selling due to perceived low commodity prices.

Fertilizer Segment Accounts Receivable. In our fertilizer segment,
customer accounts receivable typically have repayment terms of up to 180 days.
The actual due dates are individually determined based upon when a farmer
purchases our fertilizers and the anticipated harvest and sale of the farmer's
crop, as the farmer's cash flow is cyclical and is typically generated after the
crop is harvested. The payment terms for these accounts receivable are typically
renegotiated if there is a crop failure or the cash flows generated from the
harvest are not adequate for the farmer to repay balances due to us. In certain
regions in Brazil, the 2005 crop was poor in quantity and yield, primarily due
to a drought. As a result of the extension of credit terms and concerns about
the collectibility of some of the accounts receivable, we have increased our
reserve for doubtful accounts in the fertilizer segment to $115 million at
December 31, 2005 from $62 million at December 31, 2004. At December 31, 2005,
our total fertilizer segment accounts receivable was $663 million compared to
$548 million at December 31, 2004. We closely monitor the recoverability of
these accounts receivable.

Secured Advances to Suppliers and Prepaid Commodity Contracts. We
purchase soybeans through prepaid commodity purchase contracts and advances to
farmers in Brazil. These arrangements are typically secured by the farmer's
future crop and mortgages on the farmer's land and other assets and are
generally settled after the farmer's crop is harvested and sold. At December 31,
2005, we had $924 million in prepaid commodity purchase contracts and advances
to farmers compared to $932 million at December 31, 2004. Against these
outstanding balances, we also had accounts payables reflecting soybeans which
had been delivered by these farmers to our facilities with a value of $39
million as of December 31, 2005 and $38 million as of December 31, 2004. The
allowance for uncollectible advances totaled $32 million at December 31, 2005
and $43 million at December 31, 2004. We closely monitor the collectibility of
these advances.

Accounts Receivable Securitization. In October 2005, certain of our
European subsidiaries entered into an accounts receivable securitization
facility (Euro securitization facility). Through the Euro securitization
facility, our European subsidiaries may offer to sell and the investor has the
option to buy, without recourse, on a monthly basis certain eligible trade
accounts receivable, up to a maximum amount of Euro 200 million. Our European
subsidiaries retain collection and administrative responsibilities for the
accounts receivable sold. The initial term of the Euro securitization facility
expires in 2010, but may be terminated earlier upon occurrence of certain
limited circumstances. The effective yield rates on the accounts receivable sold
are based on monthly EUR LIBOR plus .295% per annum. As of December 31, 2005, we
sold approximately $192 million of accounts receivable to the Euro
securitization facility, of which we have retained a $37 million beneficial
interest in other current assets on the consolidated balance sheet at December
31, 2005. See "--Off-Balance Sheet Arrangements" for more information.

Long-Term and Short-Term Debt. We conduct most of our financing
activities through a centralized financing structure, designed to act as our
central treasury, which enables us and our subsidiaries to borrow long-term and
short-term debt more efficiently. This structure includes a master trust
facility, the primary assets of which consist of intercompany loans made to
Bunge Limited and its subsidiaries. Bunge Limited's wholly owned financing
subsidiaries fund the master trust with long- and short-term debt obtained from
third parties, including through our commercial paper program.

To finance working capital, we use cash flows generated from operations
and short-term borrowings, including our commercial paper program, and various
long-term bank facilities and bank credit lines, which are sufficient to meet
our business needs. At December 31, 2005, we had approximately $1,450 million of
committed borrowing capacity under our commercial paper program, other
short-term lines of credit and long-term credit facilities, all of which are
with a number of lending institutions. Of this committed capacity, $1,173
million was unused and available at December 31, 2005.

At December 31, 2005, we had $265 million outstanding under our
commercial paper program. Our commercial paper program is our least expensive
available short-term funding source. We maintain back-up bank credit lines equal
to the maximum capacity of our commercial paper program of $600 million. These
credit lines expire in June 2007. If we were unable to access the commercial
paper market, we would use these bank credit lines, which would be at a higher
cost than our commercial paper. Bunge has provided parent level guarantees of
the indebtedness under these bank credit lines entered into by its wholly owned
subsidiary. At December 31, 2005, no amounts were outstanding under these
back-up bank credit lines.

Our short-term and long-term debt decreased by $135 million at December
31, 2005 from December 31, 2004 primarily due to the conversion to Bunge Limited
common shares by the noteholders of our 3.75% convertible notes due November 15,
2022 as described below.

In July 2005, we completed an offering of $400 million aggregate
principal amount of unsecured senior notes bearing interest at a rate of 5.10%
per year that mature in July 2015. The notes were issued by our wholly owned
finance subsidiary, Bunge Limited Finance Corp., and are fully and
unconditionally guaranteed by Bunge Limited. Interest on these unsecured senior
notes is payable semi-annually in arrears in January and July of each year,
commencing in January 2006. We used the net proceeds of this offering of $396
million for the repayment of outstanding indebtedness.

In December 2005, we canceled our $455 million European revolving
credit agreement. No material termination fees were incurred as a result of the
cancellation. We determined that the facility was no longer needed given our
assessment of present and anticipated liquidity requirements. In November 2005,
we amended our $850 million revolving credit agreement to allow us to borrow
euros or U.S. dollars at our discretion.

In October 2005, we announced our intention to redeem for cash on
November 22, 2005 the remaining outstanding 3.75% convertible notes due November
15, 2022. The convertible notes were convertible into 31.1137 common shares of
Bunge Limited for each $1,000 principal amount of convertible notes. This
represents a price of $32.1402 per share at which Bunge Limited common shares
would be issued and delivered following conversion. Substantially all holders of
the remaining outstanding aggregate principal amount of $242 million convertible
notes converted their notes into an aggregate of 7,532,542 million common shares
of Bunge Limited prior to the redemption date.

Through our subsidiaries, we have various other long-term debt
facilities at fixed and variable interest rates denominated in both U.S. dollars
and Brazilian reais, most of which mature between 2006 and 2008. At December 31,
2005, we had $316 million outstanding under these long-term debt facilities. Of
this amount, at December 31, 2005, $142 million was secured by certain land,
property, plant and equipment and investments in our consolidated subsidiaries,
having a net carrying value of $760 million.

Our credit facilities and certain senior notes require us to comply
with specified financial covenants related to minimum net worth, working capital
and a maximum debt to capitalization ratio. We were in compliance with these
covenants as of December 31, 2005.

We do not have any ratings downgrade triggers that would accelerate the
maturity of our debt. However, a downgrade in our credit ratings could adversely
affect our ability to renew existing or to obtain access to new credit
facilities in the future and would increase the cost of such facilities to us.

Our credit ratings on our unsecured guaranteed senior notes by Moody's
Investors Service, Inc. (Moody's) at December 31, 2005 were "Baa2" with "outlook
stable," and "BBB" with "outlook stable" by Standard & Poor's Rating Services
and Fitch Rating Services (Fitch). Our commercial paper is rated "A-1" by
Standard & Poor's Rating Services,

"P-1" by Moody's and "F-1" by Fitch, and the interest rates on our commercial
paper borrowings are indexed to these ratings.

We have various outstanding interest rate swap agreements with a total
notional amount of $900 million for the purpose of managing our interest rate
exposure on a portion of our fixed rate senior notes. Under the terms of the
interest rate swaps, we make payments based on six-month LIBOR set in arrears,
and we receive payments based on fixed interest rates. Accrued interest payable
of approximately $1 million relating to these swaps was recorded as an increase
to interest expense in 2005. The maturity of the interest rate swap agreements
correspond with the maturity of the associated fixed rate senior notes.

Shareholders' Equity. Shareholders' equity increased to $4,226 million
at December 31, 2005 from $3,375 million at December 31, 2004, as a result of
the net income of $530 million, $18 million from the issuance of our common
shares upon the exercise of employee stock options and the issuance of
restricted stock units that had vested, $250 million from the conversion of a
portion of the convertible notes and other comprehensive income of $115 million,
which includes foreign exchange gains of $101 million. This increase was
partially offset by dividends paid to shareholders of $63 million.

Cash Flows

2005 Compared to 2004. In 2005, our cash and cash equivalents balance
decreased $78 million, reflecting the net impact of cash flows from operating,
investing and financing activities, compared to a $57 million decrease in our
cash and cash equivalents balance in 2004.

Our operating activities provided cash of $382 million in 2005,
compared to cash provided by operating activities of $802 million in 2004.

Our cash flow from operations has varied depending on the timing of the
acquisition of, and the market prices for, our agribusiness commodity
inventories, as well as the timing of when such inventories were sold. In
addition, the growth of our business has resulted in the need to increase
working capital levels which reduces our cash flow from operations.

Historically, our operating activities use cash in the first half of
the year due to purchases of the South American harvest, which occurs in March,
April and May. In addition, in the first half of the year we are also building
fertilizer inventories in anticipation of sales to farmers who typically
purchase the bulk of their fertilizer needs in the second half of the year. Also
during the first half of the year, North American and European "old" crop
inventories harvested and purchased in September, October and November of the
previous year are at their lowest level.

Cash flows in the second half of the year will vary depending upon the
amount of advances made to farmers in Brazil and the amount of North American
and European "new" crops purchased during the September, October and November
harvest periods. In addition, most of the South American inventories acquired
during the March, April and May harvest period have been sold.

The decrease in the cash flow from operating activities is primarily
due to the decline in income from operations before income taxes and minority
interest and higher levels of operating working capital for 2005 compared to
2004. Cash flow from operations in the fourth quarter of 2005 included
approximately $155 million from the sale of accounts receivable through a new
securitization facility. In 2004, cash flow benefited from the reduction in high
soybean prices.

Cash used by investing activities was $480 million in 2005, compared to
cash used of $824 million in 2004. Payments made for capital expenditures
included investments in property, plant and equipment that totaled $522 million
and consisted primarily of expenditures under our normal capital expenditure
plan. Maintenance capital expenditures were $120 million in 2005, compared to
$136 million in 2004. Maintenance capital expenditures are expenditures made to
replace existing equipment in order to maintain current production capacity. The
majority of non-maintenance capital expenditures in 2005 related to efficiency
improvements to reduce costs, equipment upgrades and business expansion.

Acquisitions of businesses and other intangible assets included in cash
flows from investing activities were $50 million in 2005, which included $23
million for the Ideal premium bottled oil brand in Russia and the former Soviet
Union countries and $13 million from the acquisition of a controlling interest
in an integrated soybean crushing and refining plant in the port city of Rizhao,
China. Investments in affiliates of $18 million primarily included an investment
in a port terminal joint venture in Brazil. In 2005 and 2004, we received a
capital return of $35 million and $17 million, respectively, from our Solae
joint venture.

Cash provided by financing activities was $21 million in 2005, compared
to cash used of $91 million in 2004. In 2005 and 2004, we increased our
borrowings of long-term debt primarily to finance our additional working capital
requirements and fund our investing activities. In July 2005, our wholly owned
finance subsidiary, Bunge Limited Finance Corp., issued $400 million of
unsecured senior notes, which are unconditionally guaranteed by us, for net
proceeds of $396 million. Dividends paid to our shareholders in 2005 were $63
million.

2004 Compared to 2003. In 2004, our cash and cash equivalents balance
decreased by $57 million, reflecting the net impact of cash flows from
operating, investing and financing activities, compared to a $19 million
increase in our cash and cash equivalents balance in 2003.

Cash flow provided by operating activities for 2004 was $802 million
compared to cash used for operating activities of $41 million in 2003.

Cash flow from operations in 2004 was favorably affected by the strong
operating results and the return of soybean prices to more normalized levels in
the latter part of the year. Soybean prices increased significantly beginning in
the third quarter of 2003 and continued their increase into 2004. During the
latter half of the third quarter of 2004, agricultural prices declined, which
resulted in a reduction in working capital levels.

Cash flow provided by operating activities for 2004 also included $60
million received from the net settlement of various interest rate derivatives
entered into and terminated in 2004. Cash flow from operations for 2003 included
$57 million paid in connection with the settlement of an arbitration.

Cash used by investing activities was $841 million in 2004, compared to
cash provided of $101 million in 2003. Investments in property, plant and
equipment under our capital expenditure plan were $437 million for 2004. Of this
amount, $136 million represented maintenance capital expenditures in 2004,
compared to $98 million in 2003.

During the third and fourth quarters of 2004, we acquired the remaining
17% interest in Bunge Brasil that we did not already own for $314 million in
cash. In April 2004, we acquired the remaining 40% of Polska Oil, a Polish
producer of bottled edible oils, for $27 million. In addition, we invested
approximately $38 million in existing and new business joint ventures during
2004 primarily in South America and Eastern Europe and we loaned $14 million to
our joint venture in Poland. Also included in cash flow from investing
activities in 2004 was $7 million received in the asset exchange transaction
with J. Macedo.

In 2003, we received net proceeds of $532 million from the sale of our
Brazilian soy ingredients business to The Solae Company, the sale of Lesieur to
our Saipol S.A.S. joint venture and the sale of our U.S. bakery operations. We
used $23 million to acquire the remaining 2.62% of Cereol's outstanding shares
we did not already own and we paid an additional purchase price of $42 million
to Edison S.p.A., Cereol's former controlling shareholder, and Cereol's former
public shareholders. In addition, in 2003, we acquired additional shares in
Fosfertil for $84 million, and we completed certain smaller acquisitions in
India and Eastern Europe having an aggregate purchase price of approximately $37
million. In 2003, we received $41 million relating to Lesieur's intercompany
debt owed to us.

Cash used for financing activities was $74 million in 2004, compared to
cash used of $102 million in 2003. In 2004, we reduced our borrowings of
short-term debt by using cash flow provided by operating activities. In April
2004, our wholly owned finance subsidiary, Bunge Limited Finance Corp., issued
$500 million of unsecured senior notes, which are unconditionally guaranteed by
us, for net proceeds of $496 million, and in June 2004, we sold 9,775,000 common
shares in a public offering for net proceeds of $331 million. In November 2004,
we redeemed preferred shares of a subsidiary for $170 million. Dividends paid to
our shareholders in 2004 were $51 million.

In 2003, we used cash flow from the net proceeds from the sales of
businesses to reduce borrowings on short- and long-term debt. In 2003, we issued
$800 million of senior notes. In 2003, Mutual Investment Limited repaid in full
a $55 million note owed to us. Dividends paid to our shareholders during 2003
were $42 million.

Capital Expenditures

Our capital expenditures were $522 million in 2005, $437 million in
2004 and $304 million in 2003. In 2005, major capital projects included the
expansion of our Brazilian fertilizer blending, sulfuric and phosphoric acid
production capacity, investments in export terminal operations in Brazil and
Argentina, expansion of our oilseed processing capabilities and port facilities
in Spain and Eastern Europe, and expansion of oilseed processing and grain
origination capabilities in Russia and Ukraine.

In 2004, major capital projects included the expansion of our Brazilian
fertilizer blending and phosphoric acid production capacity, expansion of our
grain origination operations in Brazil (including additional investments in
logistics), investments in export terminal operations in Argentina, expansion of
our oilseed processing capacity in Eastern Europe and acquisitions of port
facilities.

In 2003, major projects included expansion of our edible oil production
facilities in Europe, the construction of a new margarine plant and an oilseed
processing plant in Brazil, logistics investments, primarily in Brazil,
expansion of our grain origination facilities in Brazil and expansion of our
fertilizer mixing capacity. In addition, we expanded our operations in India
through the buyout of a joint venture partner in India and the purchase of a
small crushing and refining facility.

We intend to invest approximately $490 million to $510 million in 2006,
net of cash received on asset dispositions. Of this amount, we expect that $195
million to $215 million will be used for maintenance of current production
capacity, safety, productivity and environmental programs. The other investments
will be used to build new plants and improve oilseed processing logistics and
plant operating efficiencies in Europe, expand and upgrade our mining,
fertilizer production capacity and port facilities in Brazil, expand or acquire
grain origination facilities in Europe and modernize certain of our edible oil
refineries in Canada and Europe. We intend to fund our capital expenditures with
cash flows from operations and available borrowings.

Formation of European Biodiesel Joint Venture

In December 2005, we entered into a joint venture with Diester
Industrie, a company specializing in the production and marketing of biodiesel,
pursuant to which we transferred our biodiesel assets to a new company. The new
company will be called Diester Industries International S.A.S. (DII). Diester
Industrie is a subsidiary of Sofiproteol. The joint venture combines our and
Diester Industrie's biodiesel assets, except for those owned and operated in
France. Diester Industrie owns 60% of the joint venture and we own 40%. In
addition, Bunge received $19 million in cash and a note receivable from DII for
$10 million in the transaction. We recognized an $8 million gain on the
formation of the joint venture.

Off-Balance Sheet Arrangements

Guarantees

We have issued or were party to the following third-party guarantees at
December 31, 2005:

Maximum Potential
(US$ in millions) Future Payments
- ------------------ -------------------
Operating lease residual values (1)...................... $ 60
Unconsolidated affiliates financing (2).................. 26
Customer financing (3)................................... 184
-------------------
Total.................................................... $ 270
===================

- -----------------------------
(1) Prior to January 1, 2003, we entered into synthetic lease agreements
for barges and railcars originally owned by us and subsequently sold to
third parties. The leases are classified as operating leases in
accordance with SFAS No. 13, Accounting for Leases. Any gains on the
sales were deferred and recognized ratably over the initial lease
terms. We have the option under each lease to purchase the barges or
railcars at fixed amounts, based on estimated fair values or to sell
the assets. If we elect to sell, we will receive proceeds up to fixed
amounts specified in the agreements. If the proceeds of such sales are
less than the specified fixed amounts, we would be obligated under a
guarantee to pay supplemental rent for the deficiency in proceeds up to
a maximum of approximately $60 million at December 31, 2005. The
operating leases expire through 2010. There are no recourse provisions
or collateral that would enable us to recover any amounts paid under
this guarantee.

(2) Prior to January 1, 2003, we issued a guarantee to a financial
institution related to debt of our joint ventures in Argentina, which
are our unconsolidated affiliates. The term of the guarantee is equal
to the term of the related financing, which matures in 2009. There are
no recourse provisions or collateral that would enable us to recover
any amounts paid under this guarantee.

(3) We issued guarantees to financial institutions in Brazil related to
amounts owed the institutions by certain of its customers. The terms of
the guarantees are equal to the terms of the related financing
arrangements, which can be as short as 120 days or as long as 360 days.
In the event that the customers default on their payments to the
institution and we would be required to perform under the guarantees,
we have obtained collateral from the customers. At December 31, 2005,
$75 million of these financing arrangements were collateralized by
tangible property. We have determined the fair value of these
guarantees to be immaterial at December 31, 2005.

In addition, we have issued parent level guarantees for the repayment
of certain senior notes and senior credit facilities, which were issued or
entered into by our wholly owned subsidiaries, with a carrying amount of $2,398
million at December 31, 2005. All outstanding debt related to these guarantees
are reflected in our consolidated financial statements included as part of this
Annual Report on Form 10-K. There are no significant restrictions on the ability
of Bunge Limited Finance Corp. or any of our other subsidiaries to transfer
funds to us.

Also, certain of our subsidiaries have provided guarantees of
indebtedness of certain of their subsidiaries under certain lines of credit with
various institutions. The total borrowing capacity under these lines of credit
was $308 million as of December 31, 2005, of which approximately $5 million of
related debt was outstanding as of such date.

Accounts Receivable Securitization Facilities

In October 2005, certain of our European subsidiaries entered into an
accounts receivable securitization facility (Euro securitization facility).
Through the Euro securitization facility, our European subsidiaries may offer to
sell and the investor has the option to buy, without recourse, on a monthly
basis certain eligible trade accounts receivable, up to a maximum amount of Euro
200 million. Eligible accounts receivable are based on accounts receivable in
certain designated European countries. We account for the transfers of eligible
accounts receivable as sales under SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. Our European
subsidiaries retain collection and administrative responsibilities for the
accounts receivable sold. At the time an account receivable is sold and title
has transferred it is removed from the consolidated balance sheet and the
proceeds are reflected in cash provided by operating activities. The effective
yield rates on the accounts receivable sold are based on monthly EUR LIBOR plus
..295% per annum. We recognized approximately $2 million in related expenses for
the year ended December 31, 2005, which are included in selling, general and
administrative expenses in our consolidated statement of income.

The initial term of the Euro securitization facility expires in 2010,
but may be terminated earlier upon the occurrence of certain limited
circumstances. Our European subsidiaries retain beneficial interests in certain
accounts receivable that do not qualify as a sale under SFAS No. 140. The
beneficial interests are subordinate to the investor's interests and are valued
at historical cost, which approximates fair value. The beneficial interests are
recorded in other current assets in the consolidated balance sheet.

As of December 31, 2005, we sold approximately $192 million accounts
receivable to the Euro securitization facility, of which we have retained a $37
million beneficial interest in certain accounts receivable that did not qualify
as a sale under the terms of the SFAS No. 140.

In addition, we have two other accounts receivable securitization
facilities through our wholly owned North American operating subsidiaries.
Through agreements with certain financial institutions, we may sell, on a
revolving basis, undivided percentage ownership interests (undivided interests)
in designated pools of accounts receivable without recourse up to a maximum
amount of approximately $177 million. Collections reduce accounts receivable
included in the pools, and are used to purchase new receivables, which become
part of the pools. One of the facilities expires in 2006, with an option to
renew, and the other facility expires in 2007. The effective yield rates
approximate the 30-day commercial paper rate plus annual commitment fees ranging
from 29.5 to 40 basis points.

During 2005 and 2004, the outstanding undivided interests averaged $116
million and $115 million, respectively, under these North American
securitization facilities. We retain collection and administrative
responsibilities for the accounts receivable in the pools. Bunge recognized $5
million, $2 million and $3 million in related expenses for the years ended
December 31, 2005, 2004 and 2003, respectively, which are included in selling,
general and administrative expenses in our consolidated statements of income. In
addition, we retain interests in the pools of accounts receivable not sold under
these securitization facilities. Due to the short-term nature of the accounts
receivable, our retained interests in the pools are valued at historical cost,
which approximate fair value. The full amount of the allowance for doubtful
accounts has been retained in our consolidated balance sheets since collections
of all pooled accounts receivable are first utilized to reduce the outstanding
undivided interests. Accounts receivable at December 31, 2005 were net of $105
million representing the outstanding undivided interests in pooled accounts
receivable. At December 31, 2004, there were no undivided interests in the
pooled receivables outstanding.

Tabular Disclosure of Contractual Obligations

The following table summarizes our scheduled contractual obligations
and their expected maturities at December 31, 2005, and the effect such
obligations are expected to have on our liquidity and cash flows in the future
periods indicated.

At December 31, 2005
--------------------------------------------------------------
Less than After
Contractual Obligations (1) Total 1 Year 1-3 Years 4-5 Years 5 Years
- --------------------------- ----------- ----------- ----------- ----------- ----------
(US$ in millions)

Commercial paper borrowings (1)................... $ 265 $ 265 $ -- $ -- $ --
Other short-term borrowings (1)................... 146 146 -- -- --
Long-term debt (1)................................ 2,735 178 754 14 1,789
Fixed interest rate obligations................... 435 68 192 119 56
Non-cancelable lease obligations.................. 580 118 260 97 105
Freight supply agreements (2)..................... 2,310 238 412 252 1,408
Inventory purchase commitments.................... 282 282 -- -- --
----------- ----------- ----------- ----------- ----------
Total contractual obligations..................... $ 6,753 $ 1,295 $ 1,618 $ 482 $ 3,358
=========== =========== =========== =========== ==========

- -----------------------------
(1) We also have variable interest rate obligations on certain of our
outstanding borrowings.

(2) In the ordinary course of business, we enter into purchase commitments
for time on ocean freight vessels and freight service on railroad lines
for the purpose of transporting agricultural commodities. In addition,
we sell time on these ocean freight vessels when excess freight
capacity is available. These agreements range from two months to six
years in the case of ocean freight vessels and 9 to 22 years in the
case of railroad services. Actual amounts paid under these contracts
may differ due to the variable components of these agreements and the
amount of income earned by us on the sale of excess capacity. The
railroad freight services agreements require a minimum monthly payment
regardless of the actual level of freight services used by us. The
costs of our freight supply agreements are typically passed through to
our customers as a component of the prices we charge

for our products. However, changes in the market value of freight
compared to the rates at which we have contracted for freight may
affect margins on the sales of agricultural commodities.

Employee Benefit Plans

We expect to contribute $7 million to our defined benefit pension plans
and $3 million to our postretirement healthcare benefit plans in 2006.

Critical Accounting Policies and Estimates

We believe that the application of the following accounting policies,
which are important to our financial position and results of operations,
requires significant judgments and estimates on the part of management. For a
summary of all of our accounting policies, including the accounting policies
discussed below, see Note 1 to our consolidated financial statements included in
Part III of this Annual Report on Form 10-K.

Allowances for Uncollectible Accounts

We evaluate the collectibility of our trade accounts receivable and
secured advances to suppliers and record allowances for uncollectible accounts
if we have determined that collection is doubtful. We base our determination of
the allowance for uncollectible accounts on analyses of credit quality for
specific accounts, historical trends of charge-offs and recoveries, the economic
and financial condition of the farming industry and other market conditions.
Different assumptions, changes in economic circumstances or the deterioration of
the financial condition of our customers could result in additional provisions
to the allowance for uncollectible accounts and an increase in bad debt expense.
At December 31, 2005, our allowances for uncollectible trade accounts receivable
and secured advances to suppliers were $180 million and $32 million,
respectively. At December 31, 2004, our allowances for uncollectible trade
accounts receivable and secured advances to suppliers were $133 million and $43
million, respectively. The increase in bad debt was primarily in the fertilizer
segment. We continue to monitor the economic environment and events taking place
in the applicable countries and will adjust these reserves in the future
depending upon significant changes in circumstances.

Recoverable Taxes

We evaluate the collectibility of our recoverable taxes and record
valuation allowances if we determine that collection is doubtful. Recoverable
taxes primarily represent value-added taxes paid on the acquisition of raw
materials and other services which can be recovered in cash or as compensation
of outstanding balances against income taxes or certain other taxes we may owe.
Management's assumption about the collectibility of recoverable taxes requires
significant judgment because it involves an assessment of the ability and
willingness of the applicable federal or local government to refund the taxes.
The balance of these allowances fluctuates depending on the sales activity of
existing inventories, purchases of new inventories, seasonality, changes in
applicable tax rates, cash payment by the applicable government agencies and
compensation of outstanding balances against income or certain other taxes owed
to the applicable governments. At December 31, 2005, the allowance for
recoverable taxes was $7 million. We continue to monitor the economic
environment and events taking place in the applicable countries and will adjust
these reserves in the future depending upon significant changes in
circumstances.

Agricultural Commodity Derivatives

To the extent we consider it prudent for minimizing risk, we use
exchange traded futures and options contracts to minimize the effect of price
fluctuations on agricultural commodity transactions. The futures and options
contracts that we use for hedging are purchased and sold through regulated
commodity exchanges. We also manage risk by entering into fixed-price purchase
contracts with pre-approved producers and establishing limits for individual
suppliers. Fixed-price sales contracts are entered into with customers with
acceptable creditworthiness, as determined by us. The fair values of futures and
options contracts are determined primarily from quotes listed on the applicable
commodity exchanges. Fixed-price purchase and sales contracts are with various
counterparties and the fair value of such contracts are determined from the
market price of the underlying product. We are exposed to loss in the event of
nonperformance by the counterparties to these contracts. The risk of
nonperformance is routinely monitored and provisions recorded if necessary to
account for potential nonperformance. Different assumptions, changes in economic
circumstances or the

deterioration of the financial condition of the counterparties to these
contracts could result in additional provisions and increased expense reflected
in cost of goods sold.

Intangible Assets and Long-Lived Assets

Long-lived assets include property, plant and equipment and
identifiable intangible assets. When facts and circumstances indicate that the
carrying values of long-lived assets may be impaired, an evaluation of
recoverability is performed by comparing the carrying value of the assets to the
projected future cash flows to be generated by such assets. If it appears that
the carrying value of our assets is not recoverable, we recognize an impairment
loss as a charge against results of operations. Our judgments related to the
expected useful lives of long-lived assets and our ability to realize
undiscounted cash flows in excess of the carrying amount of such assets are
affected by factors such as the ongoing maintenance of the assets, changes in
economic conditions and changes in operating performance. As we assess the
ongoing expected cash flows and carrying amounts of our long-lived assets,
changes in these factors could cause us to realize material impairment charges.

In 2005, we recorded a pretax impairment charge in our agribusiness
segment of $35 million relating to certain South American oilseed processing
facilities which have been closed due to a deteriorating operating environment
due to industry over capacity and $3 million relating to an oilseed processing
plant in India. In addition, we expect to close three additional oilseed
processing plants in Brazil in the first quarter of 2006, which will result in
asset impairment and restructuring charges related to those closures, the amount
of which has not yet been determined.

Goodwill

Goodwill represents the excess of the costs of businesses acquired over
the fair market value of net tangible and identifiable intangible assets.
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS No. 142), requires that goodwill be tested for
impairment annually. In assessing the recovery of goodwill, projections
regarding estimated discounted future cash flows, market place data and other
factors are used to determine the fair value of the reporting units and the
respective assets. These projections are based on historical data, anticipated
market conditions and management plans. If these estimates or related
projections change in the future, we may be required to record additional
impairment charges. In the fourth quarter of 2005, we performed our annual
impairment test and determined that there were no impairments of goodwill.

Contingencies

We are a party to a large number of claims and lawsuits, primarily tax
and labor claims in Brazil, arising in the normal course of business, and have
accrued our estimate of the probable costs to resolve these claims. This
estimate has been developed in consultation with in house and outside counsel
and is based on an analysis of potential results, assuming a combination of
litigation and settlement strategies. Future results of operations for any
particular quarterly or annual period could be materially affected by changes in
our assumptions or the effectiveness of our strategies relating to these
proceedings. For more information on tax and labor claims in Brazil, please see
"Item 3. Legal Proceedings."

Employee Benefit Plans

We sponsor various pension and postretirement benefit plans. In
connection with the plans, we make various assumptions in the determination of
projected benefit obligations and expense recognition related to pension and
postretirement obligations. Key assumptions include discount rates, rates of
return on plan assets, asset allocations and rates of future compensation
increases. Management develops its assumptions based on its experience and by
reference to market related data. All assumptions are reviewed periodically and
adjusted as necessary.

Our 2005 weighted average discount rate assumption used to calculate
projected benefit obligations under the plans was 5.7% at the September 30, 2005
measurement date and was consistent with the rate at the September 30, 2004
measurement date. Our discount rate is based on the U.S. "Aa"-rated corporate
bonds with similar maturities. Our U.S.-based plans represent approximately 84%
of total projected benefit obligations. The weighted average rate of return
assumption on assets of funded plans was 8.0% as of the 2005 measurement date
and was also consistent with the 2004

weighted average rate. Our average targeted assumed asset allocations of 60%
equity securities and of 40% fixed income securities consisting primarily of
government and corporate debt securities for the significant plans.

In 2005, we recorded a decrease in the additional minimum pension
liability which increased shareholders' equity by $2 million, net of tax benefit
of $1 million due to asset performance of the plans' assets resulting in overall
improvement in the unfunded status. Future recognition of additional minimum
pension liabilities will depend on the actual return on the plans' assets and
the discount rate.

A one percentage point decrease in the assumed discount rate on our
defined benefit pension plans would increase annual expense and the projected
benefit obligation by $4 million and $48 million, respectively. A one percentage
point increase or decrease in the long-term return assumptions on our defined
benefit pension plan assets would increase or decrease annual pension expense by
$2 million.

Income Taxes

We record valuation allowances to reduce our deferred tax assets to the
amount that we are likely to realize. We consider projections of future taxable
income and prudent tax planning strategies to assess the need for and the size
of the valuation allowances. If we determine that we can realize a deferred tax
asset in excess of our net recorded amount, we decrease the valuation allowance,
thereby increasing net income. Conversely, if we determine that we are unable to
realize all or part of our net deferred tax asset, we increase the valuation
allowance, thereby decreasing net income.

Prior to recording a valuation allowance, our deferred tax assets were
$660 million and $545 million at December 31, 2005 and 2004, respectively.
However, we have recorded valuation allowances of $95 million and $177 million
as of December 31, 2005 and 2004, respectively, primarily representing the
uncertainty regarding the recoverability of certain net operating loss
carry-forwards. The decrease in the deferred tax valuation allowance in 2005
resulted from the projected utilization of net operating loss carry-forwards by
our Brazilian subsidiaries. We were able to recognize these operating loss
carry-forwards because of the legal restructuring of our Brazilian subsidiaries,
increased statutory taxable income of these subsidiaries caused by the effects
of the real appreciation and actions undertaken to recover the net operating
loss carry-forwards.

In addition, the calculation of our tax liabilities involves dealing
with uncertainties in the application of complex tax regulations in a multitude
of jurisdictions across our global operations. We recognize potential
liabilities and record tax liabilities for anticipated tax audit issues in the
U.S. and other tax jurisdictions based on our estimate of whether, and the
extent to which, additional taxes will be due. We adjust these reserves in light
of changing facts and circumstances; however, due to the complexity of some of
these uncertainties, the ultimate resolution may result in a payment that is
materially different from our current estimate of the tax liabilities. If our
estimate of tax liabilities proves to be less than the ultimate assessment, an
additional charge to expense would result. If payment of these amounts
ultimately proves to be less than the recorded amounts, the reversal of the
liabilities would result in tax benefits being recognized in the period when we
determined the liabilities are no longer necessary.

Recent Accounting Pronouncements

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting
for Conditional Asset Retirement Obligations, an Interpretation of FASB
Statement No. 143 (FIN 47). FIN 47 clarifies that an entity is required to
recognize a liability for the fair value of a conditional asset retirement
obligation when incurred if the fair value of the liability can be reasonably
estimated. FIN 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset retirement
obligation. FIN 47 is effective December 31, 2005 for calendar year companies.
The impact of the adoption of FIN 47 on our consolidated financial statements is
not material.

In May 2005, Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 154, Accounting Changes and
Error Corrections (SFAS No. 154). SFAS No. 154 requires retrospective
application to prior periods' financial statements of a voluntary change in
accounting principle, unless such application is impracticable. SFAS No. 154
also requires that a change in the method of depreciation, amortization or
depletion for long-lived, non-financial assets be accounted for as a change in
accounting estimate that is effected by a change in

accounting principle, rather than reporting such a change as a change in
accounting principle as previously reported under Accounting Principles Board
(APB) Opinion No. 20 (Opinion No. 20). SFAS No. 154 replaces Opinion No. 20 and
SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements,
carrying forward many provisions of Opinion No. 20 and the provisions of SFAS
No. 3. SFAS No. 154 is effective for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005; however, earlier
application is permitted for fiscal years beginning after June 1, 2005. SFAS No.
154 does not change the transition provisions of any existing accounting
pronouncements, including those that are in a transition phase as of the
effective date of SFAS No. 154.

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment
(SFAS No. 123R), that requires all share-based payments, including grants of
employee stock options, to be recognized in the income statement based on their
fair values. Pro forma disclosure is no longer an alternative. SFAS No. 123R was
effective for the first interim or annual periods beginning July 1, 2005. In
April 2005, the SEC issued an amendment to Rule 4-01(a) of Regulation S-X of the
Exchange Act regarding the compliance date for SFAS No. 123R. The amendment
requires companies to prepare financial statements in accordance with SFAS No.
123R beginning with the first interim or annual period of a company's first
fiscal year beginning on or after June 15, 2005, therefore, for companies with a
calendar fiscal year end, the effective date is January 1, 2006. Bunge currently
reports stock compensation based on Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25), with pro forma disclosures
regarding fair value. We are currently evaluating the provisions of SFAS No.
123R to determine the impact on our financial statements.