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

99K characters. Original on sec.gov · Markdown

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 in Item 15 of this Annual Report on Form 10-K.

For a comparison of results of operations for the fiscal years ended December 31, 2022 and 2021, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of Bunge Limited's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 24, 2023.

Operating Results

Factors Affecting Operating Results

Bunge Global SA, a Swiss company, together with its subsidiaries, is a leading global agribusiness and food company with integrated operations that stretch from farmer to consumer. The commodity nature of the Company's principal products, as well as regional and global supply and demand variations that occur as an inherent part of the business, make volumes an important operating measure. Accordingly, information is included in "Segment Overview and Results of Operations" that summarizes certain items in our consolidated statements of income and volumes by reportable segment. The common unit of measure for all reported volumes is metric tons.

Agribusiness

In the Agribusiness segment, we purchase, store, transport, process, and sell agricultural commodities and commodity products. Profitability in this segment is affected by the availability and market prices of agricultural commodities and processed commodity products and the availability and costs of energy, transportation, and logistics services. Profitability in our processing operations is also impacted by volumes procured, processed, and sold and by capacity utilization rates. Availability of agricultural commodities is affected by many factors, including weather, farmer planting and selling decisions, plant diseases, governmental policies, and agricultural sector economic conditions. Reported Processing volumes comprise oilseed volumes crushed (processed) during a period, which approximate sales volumes to third parties during the same period. Reported Merchandising volumes represent sales volumes to third-party customers.

Demand for our purchased and processed Agribusiness products is affected by many factors, including global and regional economic conditions, changes in per capita income, the financial condition of our customers and their access to credit, worldwide consumption of food products, particularly pork and poultry, population growth rates, relative prices of substitute agricultural products, outbreaks of disease associated with livestock and poultry, and demand for renewable fuels produced from agricultural commodities and commodity products.

We expect that the factors described above will continue to affect global supply and demand for our Agribusiness products for the foreseeable future. We also expect that, from time to time, imbalances will likely exist between oilseed processing capacity and demand for oilseed products in certain regions, which impacts our decisions regarding whether, when, and where to purchase, store, transport, process or sell these commodities, including whether to change the location of or adjust our own oilseed processing capacity.

Additionally, price fluctuations and availability of commodities may cause fluctuations in our working capital, reflected in the level of inventories, accounts receivable, and outstanding borrowings over the course of a given year. For example, increased availability of commodities at harvest times often causes fluctuations in our inventories and borrowings. Increases in agricultural commodity prices will also generally cause our cash flow requirements to increase as our operations require increased use of cash and associated borrowings to acquire inventories and fund daily settlement requirements on exchange-traded futures that we use to hedge our physical inventories.

Refined and Specialty Oils

In the Refined and Specialty Oils segment, our operating results are affected by changes in the prices of raw materials such as crude vegetable oils, the mix of products that we sell, changes in consumer eating habits, changes in per capita income, consumer purchasing power levels, availability of credit to customers, governmental dietary guidelines and policies, changes in regional economic conditions, and the general competitive environment in our markets. Raw material inputs to our production processes in the Refined and Specialty Oils segment are largely sourced at market prices from our Agribusiness segment. Reported volumes in this segment reflect sales volumes to third-party customers. The unit of measure for these volumes is metric tons as these businesses are linked to the commodity raw materials, which are their primary inputs.

Milling

In the Milling segment, our operating results are affected by changes in the prices of raw materials such as grains, the mix of products that we sell, changes in consumer eating habits, changes in per capita income, consumer purchasing power levels, availability of credit to customers, governmental dietary guidelines and policies, changes in regional economic conditions and the general competitive environment in our markets. Raw material inputs to our production processes in the Milling segment are largely sourced at market prices from our Agribusiness segment. Reported volumes in this segment reflect feedstock ground (processed) during a period, again approximating sales volumes during the same period. The unit of measure for these volumes is metric tons as these businesses are linked to the commodity raw materials, which are their primary inputs.

Sugar and Bioenergy

Our Sugar and Bioenergy segment primarily comprises our 50% interest in BP Bunge Bioenergia, a joint venture with BP. BP Bunge Bioenergia operates on a stand-alone basis with a total of 11 mills located across the Southeast, North, and Midwest regions of Brazil. We account for our interest in the joint venture under the equity method of accounting. Accordingly, our reported Sugar and Bioenergy results include our share of the net earnings in BP Bunge Bioenergia. While we are committed to supporting the growth and development of BP Bunge Bioenergia, our long-term goal is to seek strategic opportunities for our investment in the joint venture.

Profitability of this segment, the value of our investment, and the timing of distributions we receive, if any, are affected by the profitability of the joint venture. In turn, the profitability of the joint venture is affected by the availability and quality of sugarcane, which impacts capacity utilization rates and the amount of sugar that can be extracted from the sugarcane, and by market prices of sugar and ethanol. The availability and quality of sugarcane is affected by many factors, including weather, geographical factors such as soil quality and topography, and agricultural practices. Once planted, sugarcane may be harvested for several continuous years, but the yield decreases with each subsequent harvest. As a result, the current optimum economic cycle is generally five to seven consecutive harvests, depending on location. The joint venture owns and/or has partnership agreements to manage farmland on which it grows and harvests sugarcane and also purchases sugarcane from third parties. Prices of sugarcane in Brazil are established by Consecana, the state of São Paulo sugarcane, sugar, and ethanol council, and are based on the sucrose content of the cane and the market prices of sugar and ethanol. Demand for the joint venture's products is affected by many factors, including changes in global or regional economic conditions, the financial condition of customers and customer access to credit, worldwide consumption of food products, population growth rates, changes in per capita income, and demand for and governmental support of renewable fuels produced from agricultural commodities, including sugarcane.

In addition to these industry related factors which impact our business areas, our results of operations in all business areas and segments 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 foreign currency exchange rates. Both translation of our foreign subsidiaries' financial statements and foreign currency transactions can affect our results. On a monthly basis, for subsidiaries whose functional currency is a currency other than the U.S. dollar, subsidiary statements of income and cash flows must be translated into U.S. dollars for consolidation purposes based on weighted-average exchange rates in each monthly period. As a result, fluctuations of local currencies compared to the U.S. dollar during each monthly period impact our consolidated statements of income and cash flows for each reported period (per quarter and year-to-date) and also affect comparisons between those reported periods. Subsidiary balance sheets are translated using exchange rates as of the balance sheet date with the resulting translation adjustments reported in our consolidated balance sheets as a component of Accumulated other comprehensive loss.

Additionally, we record transaction gains or losses on monetary assets and liabilities that are not denominated in the functional currency of the entity. These amounts are remeasured into their respective functional currencies at exchange rates as of the balance sheet date, with the resulting gains or losses included in the entity's statement of income and, therefore, in our consolidated statements of income as Foreign exchange gains (losses) - net.

We primarily use a combination of equity and intercompany loans to finance our subsidiaries. Intercompany loans that are of a long-term investment nature with no intention of repayment in the foreseeable future are considered permanently invested and as such are treated as analogous to equity for accounting purposes. As a result, any foreign currency translation gains or losses on such permanently invested intercompany loans are reported in Accumulated other comprehensive loss in our consolidated balance sheets. In contrast, foreign currency translation gains or losses on intercompany loans that are not of a permanent nature are recorded in our consolidated statements of income as Foreign exchange gains (losses) - net.

Income Taxes

As a Swiss corporation, we are subject to corporate income tax at federal, cantonal and communal levels on our Swiss income. Qualifying net dividend income and net capital gains on the sale of qualifying investments in subsidiaries are effectively exempt from federal, cantonal and communal corporate income tax. Consequently, we expect dividends from our subsidiaries and capital gains from sales of investments in our subsidiaries to be exempt from Swiss corporate income tax. In addition, our subsidiaries, which operate in multiple tax jurisdictions, are subject to income taxes at various statutory rates ranging from 0% to 35%. The jurisdictions that significantly impact our effective tax rate are Brazil, the United States, Argentina and Switzerland. Determination of taxable income requires the interpretation of related and often complex tax laws and regulations in each jurisdiction in which we operate, and the use of estimates and assumptions regarding future events.

Non-U.S. GAAP Financial Measures

Total segment earnings before interest and taxes ("EBIT") is an operating performance measure used by Bunge’s management to evaluate segment operating activities. Bunge also uses Core Segment EBIT, Non-core Segment EBIT, Corporate and Other EBIT, and Total Segment EBIT to evaluate segment operating performance of Bunge’s Core reportable segments, Non-core reportable segments, and Total reportable segments together with Corporate and Other. Core Segment EBIT is the aggregate of the EBIT of each of Bunge’s Agribusiness, Refined and Specialty Oils, and Milling segments. Non-core Segment EBIT is the EBIT of Bunge’s Sugar & Bioenergy segment. Total Segment EBIT is the aggregate of the EBIT of Bunge’s Core and Non-core reportable segments, together with Corporate and Other. Bunge’s management believes Core Segment EBIT, Non-core Segment EBIT, Corporate and Other EBIT, and Total Segment EBIT are useful measures of operating profitability since the measures allow for an evaluation of the performance of its segments without regard to financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge’s industry. Total Segment EBIT is a non-U.S. GAAP financial measure and is not intended to replace Net income attributable to Bunge, the most directly comparable U.S. GAAP financial measure. Further, Total Segment EBIT excludes EBIT attributable to noncontrolling interests and is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income or any other measure of consolidated operating results under U.S. GAAP. See the reconciliation of Net income attributable to Bunge to Total Segment EBIT below.

Cash provided by (used for) operating activities, adjusted is calculated by including the Proceeds from beneficial interests in securitized trade receivables with Cash provided by (used for) operating activities. Cash provided by (used for) operating activities, adjusted is a non-U.S. GAAP financial measure and is not intended to replace Cash provided by (used for) operating activities, the most directly comparable U.S. GAAP financial measure. Our management believes presentation of this measure allows investors to view our cash generating performance using the same measure that management uses in evaluating financial and business performance and trends. Calculation of the measure, including Proceeds from beneficial interests in securitized trade receivables, was affected by the November 2022 securitization program change described in Note 4 - Trade Accounts Receivable and Trade Receivables Securitization.

2023 Overview

Net Income Attributable to Bunge - For the year ended December 31, 2023, Net income attributable to Bunge was $2,243 million, an increase of $633 million compared to a Net income attributable to Bunge of $1,610 million for the year ended December 31, 2022. The increase was primarily due to higher Segment EBIT in our Core and Non-core segments, partially offset by lower EBIT in our Corporate and Other activities, as further discussed in the Segment Overview and Results of Operations section below, and increased income tax expense.

Earnings Per Share - Diluted - For the year ended December 31, 2023, Net income attributable to Bunge shareholders, diluted, was $14.87 per share, an increase of $4.36 per share, compared to $10.51 per share for the year ended December 31, 2022.

EBIT - For the year ended December 31, 2023, Total Segment EBIT was $3,333 million, an increase of $1,002 million compared to EBIT of $2,331 million for the year ended December 31, 2022. The increase in Total Segment EBIT for the year ended December 31, 2023 was due to higher Segment EBIT in our Core and Non-core segments, partially offset by lower Segment EBIT in our Corporate and Other activities, as further discussed in the Segment Overview and Results of Operations section below, and which also provides a reconciliation of Net income attributable to Bunge to Total Segment EBIT.

Income Tax Expense - Income tax expense was $714 million for the year ended December 31, 2023 compared to income tax expense of $388 million for the year ended December 31, 2022. The increase in income tax expense for the year ended December 31, 2023 was primarily due to higher pre-tax income and earnings mix, partially offset by $90 million of net benefit related to tax credits granted in Switzerland.

Liquidity and Capital Resources – At December 31, 2023, working capital, which equals Total current assets less Total current liabilities, was $8,663 million, an increase of $1,505 million, compared to working capital of $7,158 million at December 31, 2022. The increase in working capital was primarily due to higher Cash and cash equivalents balances as well as lower Trade accounts payable and Current portion of long-term debt balances, driven by strong operating cash flows, partially offset by lower Inventories driven by lower average commodity prices partially offset by higher volumes.

Segment Overview and Results of Operations

Our operations are organized, managed, and classified into four reportable segments based upon their similar economic characteristics, nature of products and services offered, production processes, types and classes of customer, and distribution methods. We further organize these reportable segments into Core operations and Non-core operations. Core operations comprise our Agribusiness, Refined and Specialty Oils, and Milling segments. Non-core operations comprise our Sugar & Bioenergy segment, which itself primarily comprises the Company’s 50% interest in the net earnings of BP Bunge Bioenergia, a joint venture with BP.

Our remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other. Corporate and Other includes salaries and overhead for corporate functions that are not allocated to our individual reportable segments because the operating performance of each reportable segment is evaluated by the Company's chief operating decision maker exclusive of these items, as well as certain other activities including Bunge Ventures, the Company's captive insurance activities, and trade receivables securitization program, as well as certain income tax assets and liabilities.

A reconciliation of Net income attributable to Bunge to Total Segment EBIT follows:


	Year Ended December 31,
(US$ in millions)	2023		2022
Net income attributable to Bunge	$	2,243	$	1,610
Interest income	(148)		(71)
Interest expense	516		403
Income tax expense	714		388

Noncontrolling interests' share of interest and tax	8		1
Total segment EBIT	$	3,333	$	2,331
Agribusiness Segment EBIT	2,786		1,715
Refined and Specialty Oils Segment EBIT	865		746
Milling Segment EBIT	66		162

Core Segment EBIT	3,717		2,623
Corporate and Other EBIT	(548)		(397)
Sugar and Bioenergy Segment EBIT	164		105
Non-core Segment EBIT	164		105
Total Segment EBIT	$	3,333	$	2,331

Core Segments

Agribusiness Segment


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change
Volumes (in thousand metric tons)	76,019		77,492		(2)	%
Net sales	$	42,764	$	47,700	(10)	%
Cost of goods sold	(39,443)		(45,410)		(13)	%
Gross profit	3,321		2,290		45	%
Selling, general and administrative expense	(592)		(532)		11	%
Foreign exchange gains — net	—		2		(100)	%
EBIT attributable to noncontrolling interests	(70)		(45)		(56)	%
Other income (expense) — net	126		(67)		288	%
Income from affiliates	1		67		(99)	%
Total Agribusiness Segment EBIT	$	2,786	$	1,715	62	%

2023 Compared to 2022

Agribusiness segment Net sales decreased 10% to $42,764 million for the year ended December 31, 2023. The decrease was due to the following:

*•*In Processing, Net sales decreased 5%, primarily due to lower average sales prices experienced in almost all regions for our global soybean oilseed processing businesses and our Europe softseed business. Lower average sales prices resulted from a reduction in the current year relative to the higher price environment in the prior year following the onset of the Ukraine-Russia war. Also contributing to the decrease in Net sales was lower volumes resulting primarily from decreased sales in Argentina due to the drought experienced in the region in the current year. The above decreases were partially offset by higher volumes in our global soybean oilseed processing business as a result of strong demand in both China and North America and increased activity in our Europe softseed business in the last half of 2023 at our Ukrainian facilities, which more than offset the reduction due to the sale of our Russian Oilseed Processing business in the first quarter of 2023.

In Merchandising, Net sales decreased 23%, primarily due to lower average sales prices in our global corn, wheat, and oil businesses, as a result of higher global commodity prices in the prior year following the onset of the Ukraine-Russia war, which exacerbated an already tight commodity supply environment. Volumes were also down due to decreased demand in our global corn and oil businesses. Net sales were down in our ocean freight business due to lower prices and stabilizing demand. The above decreases were partially offset by higher sales volumes in our global wheat business, as a result of the partial resumption of operations in Ukraine.

Cost of goods sold decreased 13%, to $39,443 million for the year ended December 31, 2023. The decrease was primarily due to the following:

In Processing, Cost of goods sold decreased 9% due to lower Net sales, favorable mark-to-market results, lack of recurring prior year losses in relation to the Ukraine-Russia war and impairment of the Russian business upon classification as held-for-sale, and an $18 million benefit in the current year from the recognition of mark-to-market gains on the recovery of inventories in Ukraine, partially offset by a current year $37 million fixed asset impairment charge in North America.
In Merchandising, Cost of goods sold decreased by 22% due to lower Net sales, lack of recurring losses in relation to the Ukraine-Russia war and a $11 million benefit in the current year from the recognition of mark-to-market gains related to the recovery of inventories in Ukraine primarily from our Mykolaiv facility, partially offset by unfavorable mark-to-market results.

Selling, general and administrative ("SG&A") expenses increased 11%, to $592 million for the year ended December 31, 2023. The increase was primarily driven by increased personnel costs and higher costs as a result of inflationary pressures, partially offset by favorable currency movements, primarily from the weakening Argentine peso.

Other income (expense) - net increased 288%, to income of $126 million for the year ended December 31, 2023, compared to expense of $67 million for the year ended December 31, 2022. The increase was due to gains in Argentina related to foreign currency positioning and positive results in our Bunge Financial Services business compared to prior year losses on marketable securities and other short-term investments with exposures to Ukraine, following the onset of the Ukraine-Russia war.

Income from affiliates decreased 99% to income of $1 million for the year ended December 31, 2023, compared to income of $67 million for the year ended December 31, 2022. The decrease was primarily due to results from equity method investments in South America resellers.

Segment EBIT increased 62% to $2,786 million for the year ended December 31, 2023. The increase was primarily due to the following:

In Processing, an increase of 121% was primarily due to higher Gross profit driven by improved margins in our Europe softseed business, our global oilseed processing businesses, and our North America oilseed processing business, and higher Other income (expense) - net, partially offset by higher SG&A expense and a reduction in Income from affiliates as described above.
In Merchandising, a decrease of 49% was primarily due to lower Gross profit, driven by lower results in our ocean freight business, and higher SG&A, partially offset by higher Other income (expense) - net, as described above.

Refined and Specialty Oils Segment


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change
Volumes (in thousand metric tons)	8,908		9,201		(3)	%
Net sales	$	14,603	$	16,850	(13)	%
Cost of goods sold	(13,234)		(15,692)		(16)	%
Gross profit	1,369		1,158		18	%
Selling, general and administrative expense	(425)		(357)		19	%
Foreign exchange losses (gains) — net	7		(14)		150	%
EBIT attributable to noncontrolling interests	(21)		(12)		75	%
Other (expense) — net	(65)		(29)		124	%
Income from affiliates	—		—		—	%
Total Refined and Specialty Oils Segment EBIT	$	865	$	746	16	%

2023 Compared to 2022

Refined and Specialty Oils segment Net sales decreased 13%, to $14,603 million for the year ended December 31, 2023, primarily due to lower average sales prices in most regions, driven by prices stabilizing and increased supply. Sales volumes were also lower in most regions, driven by the 2022 partial expiration of leased capacity at the Rotterdam facility as well as the sale of our Russia operations in the first quarter of 2023.

Cost of goods sold decreased 16%, to $13,234 million for the year ended December 31, 2023. The decrease in Cost of goods sold was primarily due to lower average commodity prices and volumes in most regions, as described for Net sales above, a lack of a non-recurring impairment charge and employee severance expenses related to the classification of our Russian oilseed and processing business as held-for-sale in the prior period, and more favorable mark-to-market results.

SG&A expenses increased 19%, to $425 million for the year ended December 31, 2023. The increase was primarily driven by accelerated amortization charges of $21 million, which included $4 million attributable to noncontrolling interests, primarily related to the discontinuance of the Loders Croklaan trademark, as well as, higher personnel costs and higher costs as a result of inflationary pressures.

Segment EBIT increased 16% to $865 million for the year ended December 31, 2023. The increase was primarily due to higher Gross profit driven by overall higher margins in most regions partially offset by higher SG&A, as described above.

Milling Segment


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change
Volumes (in thousand metric tons)	3,391		4,331		(22)	%
Net sales	$	1,896	$	2,388	(21)	%
Cost of goods sold	(1,729)		(2,128)		(19)	%
Gross profit	167		260		(36)	%
Selling, general and administrative expense	(95)		(102)		(7)	%
Foreign exchange gains — net	1		4		(75)	%
EBIT attributable to noncontrolling interests	1		(1)		200	%
Other (expense) income — net	(7)		1		(800)	%
Loss from affiliates	(1)		—		(100)	%
Total Milling Segment EBIT	$	66	$	162	(59)	%

2023 Compared to 2022

Milling segment Net sales decreased 21%, to $1,896 million for the year ended December 31, 2023. The decrease was primarily due to lower volumes in our North America wheat milling business, driven by the completion of the sale of our Mexican wheat milling business in the third quarter of 2022, and our South American wheat milling business, partially offset by higher prices in the South American wheat milling business.

Cost of goods sold decreased 19%, to $1,729 million for the year ended December 31, 2023. The decrease was primarily due to lower volumes, as described for Net sales above, due to the sale of our Mexican wheat milling business in the third quarter of 2022, partially offset by unfavorable mark-to-market results compared to a strong prior year in South America during a period of high market volatility.

Segment EBIT decreased 59% to $66 million for the year ended December 31, 2023. The decrease was primarily due to lower Gross profit resulting from unfavorable mark-to-market results in South America and sale of our Mexican wheat milling business in 2022, as described above.

Corporate and Other


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change
Net sales	$	42	$	35	20	%
Cost of goods sold	(60)		(70)		(14)	%
Gross profit	(18)		(35)		49	%
Selling, general and administrative expense	(602)		(377)		60	%
Foreign exchange gains (losses) — net	12		(5)		340	%
EBIT attributable to noncontrolling interests	4		(9)		144	%
Other income — net	73		84		(13)	%
Loss from affiliates	(17)		(55)		(69)	%
Total Corporate and Other EBIT	$	(548)	$	(397)	(38)	%

2023 Compared to 2022

Corporate and Other EBIT decreased 38%, to a loss of $548 million for the year ended December 31, 2023. The decrease was primarily driven by increased SG&A expense, including $114 million related to acquisition and integration costs associated with the announced acquisition agreement with Viterra as well as increased expenses associated with other growth and productivity-related initiatives and higher personnel costs as a result of inflationary pressures. Also contributing to the decrease were impairment charges of $20 million, in Other income (expense) - net, related to a long-term investment, and $16 million, in Income from affiliates, related to a minority investment in Australian Plant Proteins, a start-up manufacturer of novel protein ingredients. In addition, results in the prior year included a gain of $29 million, at Bunge's then-70% share, related to the settlement of one of the Company's international defined benefit pension plans. The decreases described above were partially offset by impairment charges in the prior year of $53 million related to the impairment of minority investments in two start-up manufacturers of novel protein ingredients, Merit Functional Foods and Australian Plant Proteins, and a $11 million impairment charge related to the classification of our Russian business as held-for-sale.

Non-core Segment

Sugar and Bioenergy Segment


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change

Net sales	$	235	$	259	(9)	%
Cost of goods sold	(229)		(250)		(8)	%
Gross profit	6		9		(33)	%
Selling, general and administrative expense	(1)		(1)		—	%
Foreign exchange losses — net	—		2		(100)	%
EBIT attributable to noncontrolling interests	—		—		—	%
Other income — net	2		2		—	%
Income from affiliates	157		93		69	%
Total Sugar and Bioenergy Segment EBIT	$	164	$	105	56	%

2023 Compared to 2022

Segment EBIT increased 56%, to $164 million for the year ended December 31, 2023. The increase was due to more favorable results from our investment in BP Bunge Bioenergia, primarily resulting from the release of a tax valuation allowance in the current period as well as higher sugar sales prices. The release of the tax valuation allowance is related to our investment in BP Bunge Bioenergia. Therefore, the tax valuation release is recorded within Income from affiliates and included in EBIT.

Interest—A summary of consolidated interest income and expense follows:


	Year Ended December 31,
(US$ in millions)	2023		2022		% Change
Interest income	$	148	$	71	108	%
Interest expense	(516)		(403)		28	%

2023 Compared to 2022

Interest income increased 108% to $148 million for the year ended December 31, 2023. Interest expense increased 28% to $516 million for the year ended December 31, 2023. Higher interest income is the result of significantly higher investments in cash equivalents in the current year and higher variable interest rates. Higher interest expense is the result of higher variable interest rates on debt, as well as, $16 million in financing related fees associated with the announced Business Combination Agreement with Viterra in the current period. Partially offsetting the current period increase in interest expense is a prior year charge of $47 million resulting from the early redemption of all issued and outstanding 4.35% Senior Notes due March 2024.

Liquidity and Capital Resources

Our main financial objectives are to prudently manage financial risks, ensure consistent access to liquidity and minimize cost of capital in order to efficiently finance our business and maintain balance sheet strength. We generally finance our ongoing operations with cash flows generated from operations, issuances of commercial paper, borrowings under various bilateral and syndicated revolving credit facilities, term loans, and proceeds from the issuance of senior notes. Acquisitions and long-lived assets are generally financed with a combination of equity and long-term debt.

Working Capital


	As of December 31,
(US$ in millions, except current ratio)	2023		2022
Cash and cash equivalents	$	2,602	$	1,104
Trade accounts receivable, net	2,592		2,829
Inventories	7,105		8,408
Other current assets(1)	4,051		4,417
Total current assets	$	16,350	$	16,758
Short-term debt	$	797	$	546
Current portion of long-term debt	5		846
Trade accounts payable	3,664		4,386
Current operating lease obligations	308		425
Other current liabilities(2)	2,913		3,397
Total current liabilities	$	7,687	$	9,600
Working capital(3)	$	8,663	$	7,158
Current ratio(3)	2.13		1.75

(1)Comprises Assets held for sale and Other current assets

(2)Comprises Liabilities held for sale and Other current liabilities

(3)Working capital is defined as Total current assets less Total current liabilities; Current ratio represents Total current assets divided by Total current liabilities

Working capital was $8,663 million at December 31, 2023, an increase of $1,505 million from working capital of $7,158 million at December 31, 2022.

Cash and Cash Equivalents - Cash and cash equivalents were $2,602 million at December 31, 2023, an increase of $1,498 million from $1,104 million at December 31, 2022. Cash balances are managed in accordance with our investment policy, the objectives of which are to preserve the principal value of our cash assets, maintain a high degree of liquidity, and deliver competitive returns subject to prevailing market conditions. Cash balances are typically invested in short-term deposits with highly-rated financial institutions, in U.S. government securities and A-1/P-1 commercial papers. Please refer to the Cash Flows section of this report, below, for details regarding the primary factors giving rise to the change in Cash and cash equivalents during the year ended December 31, 2023.

Trade accounts receivable, net - Trade accounts receivable, net were $2,592 million at December 31, 2023, a decrease of $237 million from $2,829 million at December 31, 2022. The decrease was primarily due to decreased Net sales in the current period driven by factors described in the Segment Overview & Results of Operations above.

Inventories - Inventories were $7,105 million at December 31, 2023, a decrease of $1,303 million from $8,408 million at December 31, 2022. The decrease was primarily due to lower average commodity prices relative to the prior year, partially offset by higher volumes.

RMI comprises agricultural commodity inventories, including soybeans, soybean meal, soybean oil, corn, and wheat that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. Total RMI reported at fair value were $5,837 million and $6,680 million at December 31, 2023 and December 31, 2022, respectively (see Note 5- Inventories, to our consolidated financial statements).

Other current assets - Other current assets, including Assets held for sale, were $4,051 million at December 31, 2023, a decrease of $366 million from $4,417 million at December 31, 2022. The decrease is primarily due to a decrease in margin

deposits as well as lower unrealized gains on derivative contracts, at fair value as a result of volatile commodity prices, a decrease in Assets held for sale due to the completion of the sale of our Russian operations in the first quarter of 2023 (see Note 2- Acquisitions and Dispositions, to our consolidated financial statements), partially offset by an increase in secured advances to suppliers, net and prepaid commodity contracts.

Short-term debt - Short-term debt, including the Current portion of long-term debt, was $802 million at December 31, 2023, a decrease of $590 million from $1,392 million at December 31, 2022. The lower Short-term debt level at December 31, 2023 compared to December 31, 2022 is primarily due to the repayment of 1.85% Senior Notes - Euro in June 2023 partially offset by higher borrowings by Bunge operating companies on local bank lines of credit.

Trade accounts payable - Trade accounts payable were $3,664 million at December 31, 2023, a decrease of $722 million from $4,386 million at December 31, 2022. The decrease in Trade accounts payable was primarily due to lower average inventory purchase prices during the current year.

Other current liabilities - Other current liabilities, including Liabilities held for sale, were $2,913 million at December 31, 2023, a decrease of $484 million from $3,397 million at December 31, 2022. The decrease was primarily due to lower unrealized losses on derivative contracts, as a result of volatile commodity prices, and lower advances on sales during the current period due to a reduction in commodity prices, partially offset by an increase in accrued liabilities driven by increased acquisition and integration costs as well as higher income tax payable.

Debt

Financing Arrangements and Outstanding Indebtedness— Prior to June 21, 2023, we conducted most of our third-party financing activities through a centralized financing structure that provided the Company with efficient access to debt and capital markets. This structure included a master trust (the "Bunge Master Trust"), the primary assets of which comprised intercompany loans made to Bunge Limited and its subsidiaries. Certain of Bunge Limited’s 100% owned finance subsidiaries, including Bunge Limited Finance Corp., Bunge Finance Europe B.V., and Bunge Asset Funding Corp., funded the Bunge Master Trust with short and long-term debt obtained from third parties, including through our commercial paper program and certain credit facilities, as well as the issuance of senior notes. Borrowings by these finance subsidiaries carry full, unconditional guarantees by Bunge Limited or Bunge Global SA.

On June 21, 2023, Bunge Limited and its finance subsidiaries terminated the Bunge Master Trust in accordance with a termination and lien release agreement in order to simplify the legal framework around its capital structure (see Note 17- Short-term Debt and Credit Facilities). In connection with the termination of the Bunge Master Trust, Bunge amended its existing credit agreements and related guarantees to remove all references and provisions related to the Bunge Master Trust. The amendments also resulted in Bunge Limited’s obligations as the existing guarantor being automatically assigned to Bunge Global SA, the new Swiss holding company, as successor guarantor, effective November 1, 2023, the completion date of the Redomestication.

On June 21, 2023, we also terminated our then existing $600 million asset-backed commercial paper program and the related liquidity and letter of credit facilities as well as established a new $1 billion unsecured corporate commercial paper program (the "$1 Billion Commercial Paper Program").

Revolving Credit Facilities—At December 31, 2023, we had $5,665 million unused and available committed borrowing capacity comprising committed revolving credit facilities. The following table summarizes these facilities for the years presented:


		Total Committed Capacity (2)		Borrowings Outstanding
Revolving Credit Facilities (1)	Maturities	December 31, 2023		December 31, 2023		December 31, 2022

Revolving credit facilities
$1.1 Billion 364-day Revolving Credit Agreement	2024	$	1,100	$	—	$	—
$1.75 Billion 2026 Revolving Credit Facility	2026	1,750		—		—
$1.95 Billion 5-year Revolving Credit Agreement	2026	1,950		—		—
$865 Million 2026 Revolving Credit Facility	2026	865		—		—
Total revolving credit facilities		$	5,665	$	—	$	—

(1)See Note 17- Short-term Debt and Credit Facilities for further information on these programs.

(2)The short-term credit ratings of the new $1 Billion Commercial Paper Program (see Note 17- Short-term Debt and Credit Facilities for further details on program) require Bunge to keep same day unused committed borrowing capacity under its long-term committed credit facilities in an amount greater or equal to the amount of commercial paper issued and outstanding.

Short and long-term debt—Our short and long-term debt increased by $231 million to $4,882 million at December 31, 2023, from $4,651 million at December 31, 2022, primarily due to the draws on our $250 Million February 2023 Delayed Draw Term Loan and $750 Million Delayed Draw Term Loan and an increase in short-term bank borrowings, offset by the repayment of the 1.85% Senior Notes - Euro in June 2023 and 5-year term loan agreement due 2024 in October 2023. For the year ended December 31, 2023, our average short and long-term debt outstanding was approximately $5,293 million compared to approximately $5,986 million for the year ended December 31, 2022. Our Long-term debt outstanding balance, including the Current-portion of long-term debt, was $4,085 million at December 31, 2023 compared to $4,105 million at December 31, 2022.

The following table summarizes our short-term debt activity at December 31, 2023.


(US$ in millions)	Outstanding Balance at December 31, 2023		Weighted Average Interest Rate at December 31, 2023		Highest Balance Outstanding During 2023		Average Balance During 2023		Weighted Average Interest Rate During 2023
Bank Borrowings(1)	$	797	8.36	%	$	955	$	685	19.26	%
Commercial Paper	—		—	%	483		79		5.54	%
Total	$	797	8.36	%			$	764	17.84	%

(1)Includes $179 million of local currency bank borrowings in certain European, South American, and Asia-Pacific countries at a weighted average interest rate of 15.30% as of December 31, 2023.

From time to time, through our financing subsidiaries, we enter into bilateral short-term credit lines as necessary based on our financing requirements. At December 31, 2023, there were no borrowings outstanding under these bilateral short-term credit lines. In addition, Bunge's operating companies had $797 million and $546 million in short-term borrowings outstanding from local bank lines of credit at December 31, 2023 and 2022, respectively, to support working capital requirements.

As described in Note 2- Acquisitions and Dispositions, we have secured a total of $8.0 billion in acquisition financing in the form of a $7.7 billion financing commitment from a consortium of lenders, arranged by Sumitomo Mitsui Banking Corporation and a $300 million 5-year delayed draw term loan from CoBank and the U.S. farm credit system executed on July 7, 2023 that may be drawn upon the closing of the Acquisition. The commitment for the $7.7 billion financing commitment is in the form of a three-tranche term loan maturing 364-days, 2-years and 3-years from closing of the Acquisition. We intend to use a portion of the acquisition financing to fund the cash portion of the Transaction Consideration, and the remainder for repayment of certain indebtedness of Viterra which is expected to be repaid at closing and for the ongoing operations of the combined company following closing.

The following table summarizes our short and long-term debt:


	December 31,
(US$ in millions)	2023		2022
Short-term debt: (1)
Short-term debt (2)	$	797	$	546
Current portion of long-term debt	5		846
Total short-term debt	802		1,392
Long-term debt: (3)
Term loan due 2024 - three-month TONAR plus 0.75% (Tranche A) (4)	—		232
Term loan due 2024 - three-month SOFR plus 1.40% (Tranche B) (4)	—		90
Term loan due 2025 - SOFR plus 0.90%	750		—
Term loan due 2027 - SOFR plus 1.125%	250		—
Term loan due 2028 - SOFR plus 1.325%	249		249

1.85% Senior Notes due 2023 - Euro (5)	—		853

1.63% Senior Notes due 2025	598		597
3.25% Senior Notes due 2026	698		698
3.75% Senior Notes due 2027	597		597
2.75% Senior Notes due 2031	991		990
Cumulative adjustment to long-term debt from application of hedge accounting	(260)		(341)
Other	212		140
Subtotal	4,085		4,105
Less: Current portion of long-term debt	(5)		(846)
Total long-term debt (6)	4,080		3,259
Total debt	$	4,882	$	4,651

(1) Includes secured debt of $200 million and $56 million at December 31, 2023 and December 31, 2022, respectively.

(2) Includes $179 million and $207 million of local currency borrowings in certain European, South American, and Asia-Pacific countries at a weighted average interest rate of 15.30% and 32.12% as of December 31, 2023 and December 31, 2022, respectively.

(3) Variable interest rates are as of December 31, 2023.

(4) On October 6, 2023, Bunge prepaid and terminated its 5-year term loan agreement due in 2024.

(5) Upon maturity in June 2023, Bunge repaid the principal and accrued interest due on all of the issued and outstanding 1.85% Senior Notes - Euro.

(6) Includes secured debt of $100 million and $21 million at December 31, 2023 and December 31, 2022, respectively.

Credit Ratings—Bunge's debt ratings and outlook by major credit rating agencies at December 31, 2023 were as follows:


	Short-term Debt(1)	Long-term Debt	Outlook
Standard & Poor's	A-2	BBB+	Positive
Moody's	P-2	Baa2	Review for Upgrade
Fitch	F-2	BBB	Rating Watch Positive

(1)Short-term debt rating applies only to $1 Billion Commercial Paper Program with Bunge Limited Finance Corp. as the issuer.

Following the announcement of the Acquisition, all three rating agencies reviewed our credit ratings and published updated credit opinions on us, reflecting their views of the credit profile of the Company both on a current standalone basis, and a pro-forma at closing basis. Based on its review, Standard and Poor's upgraded our credit rating to BBB+ and further placed us

on positive outlook for an upgrade to A-. Moody’s kept our credit rating unchanged at Baa2 and placed us on a review for upgrade to Baa1. Fitch kept our credit rating unchanged at BBB and placed us on credit watch positive for an upgrade to BBB+. We expect Standard and Poor's, Moody’s and Fitch to resolve their positive outlook, review for upgrade and credit watch positive status respectively at or before the closing date of the Acquisition, based on a variety of factors including but not limited to our operating performance, our financial position and high certainty that the Acquisition will close.

On June 21, 2023, Standard & Poor’s and Moody’s assigned short-term ratings to the $1 Billion Commercial Paper Program of A-2 and P-2, respectively. Subsequently, on August 11, 2023, Fitch assigned F-2 rating to the program.

Our debt agreements do not have any credit rating downgrade triggers that would accelerate the maturity of our debt. However, credit rating downgrades would increase borrowing costs under our credit facilities and, depending on their severity, could impede our ability to obtain credit facilities or access the capital markets in the future on competitive terms. A significant increase in our borrowing costs could impair our ability to compete effectively in our business relative to competitors with higher credit ratings.

Our credit facilities and certain senior notes require us to comply with specified financial covenants, including minimum current ratio, maximum debt to capitalization ratio, and limitations on secured indebtedness. We were in compliance with these covenants as of December 31, 2023.

Trade Receivable Securitization Program

Bunge and certain of its subsidiaries participate in a trade receivables securitization program (the "Program") with a financial institution, as administrative agent, and certain commercial paper conduit purchasers and committed purchasers (collectively, the "Purchasers"). The Program is designed to enhance our financial flexibility by providing an additional source of liquidity for our operations. As referenced in Note 4 - Trade Accounts Receivable and Trade Receivables Securitization Program, the aggregate size of the program is $1.5 billion, with an accordion feature of $1 billion. The Program terminates on May 17, 2031; however, each committed purchaser's commitment to purchase trade receivables under the Program will terminate on December 17, 2024, with a feature that permits us to request 364-day extensions.

The Program’s current pledge structure results from a November 16, 2022 amendment which replaced the existing DPP structure. Under the new structure, Bunge Securitization B.V. ("BSBV"), a consolidated bankruptcy remote special purpose entity, transfers certain trade receivables to the Purchasers in exchange for a cash payment up to the aggregate size of the Program. Bunge also retains ownership of a population of unsold receivables. BSBV agrees to guaranty the collection of sold receivables and grants a lien to the administrative agent on all unsold receivables. Collections on unsold receivables and guarantee payments are classified as operating activities in our consolidated statements of cash flows. Previously, under the DPP structure, we reflected cash flows related to the DPP as investing activities in our consolidated statements of cash flows.

Under the Program’s previous structure, Bunge's risk of loss following the sale of the trade receivables was limited to the DPP, included in Other current assets in the consolidated balance sheets. The DPP was repaid in cash as receivables were collected, generally within 30 days. Under the amended structure, Bunge’s risk of loss following the sale of the trade receivables is substantially the same and limited to the assets of BSBV, primarily comprised of unsold receivables pledged to the administrative agent.

Interest Rate Swap Agreements

We may use interest rate swaps in hedge accounting relationships and record the swaps at fair value in the consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. Additionally, the carrying amount of the associated debt is adjusted through earnings for changes in fair value due to changes in benchmark interest rates. See Note 16- Derivative Instruments and Hedging Activities to our consolidated financial statements.

Equity

Total equity is set forth in the following table:


	December 31,
(US$ in millions)	2023		2022

Common shares	$	—	$	1
Registered shares	1		—
Additional paid-in capital	5,900		6,692
Retained earnings	12,077		10,222
Accumulated other comprehensive loss	(6,054)		(6,371)
Treasury shares, at cost (2023—16,109,804 and 2022—18,835,812) (1)	(1,073)		(1,320)
Total Bunge shareholders' equity	10,851		9,224
Noncontrolling interests	963		732
Total equity	$	11,814	$	9,956

(1) In connection with the Redomestication described in Note 1- Nature of Business, Basis of Presentation, and Significant Accounting Policies, 8,102,179 shares held in treasury with an acquisition cost of $845 million were cancelled to comply with the Swiss Code limitation on issuer’s holding of registered share capital.

Total Bunge shareholders' equity was $10,851 million at December 31, 2023 compared to $9,224 million at December 31, 2022. The increase in Bunge shareholders' equity during the year ended December 31, 2023 was primarily due to $2,243 million of Net income attributable to Bunge, $317 million of Other comprehensive income, as described in Note 23- Equity, $69 million of share-based compensation expense partially offset by $600 million of share repurchases, as described in Note 23- Equity, and $386 million of declared dividends to shareholders.

Noncontrolling interests increased to $963 million at December 31, 2023 from $732 million at December 31, 2022 primarily due to $95 million of Net income attributable to our noncontrolling interest entities, $91 million related to the acquisition of noncontrolling interest in Terminal de Granéis de Santa Catarina ("TGSC") (see Note 11- Investments in Affiliates and Variable Interest Entities for further details), and $56 million of contributions from noncontrolling interests, partially offset by $17 million of dividends paid to noncontrolling interest holders.

Share repurchase program - As noted in Note 2- Acquisitions and Dispositions, on June 12, 2023, Bunge Limited's Board approved the expansion of the existing $500 million program for the repurchase of our issued and outstanding common shares. At the time, approximately $300 million of capacity for the repurchase of Bunge Limited common shares remained available under the existing program and Bunge Limited's Board approved the expansion of the program by an additional $1.7 billion, for an aggregate unutilized capacity of $2.0 billion at June 12, 2023. The program continues to have an indefinite term. During the twelve months ended December 31, 2023, Bunge repurchased 5,407,861 shares for $600 million. As of December 31, 2023, 7,516,976 shares were repurchased for $800 million and $1.4 billion remained outstanding for repurchases under the program.

Subsequent to the consolidated balance sheet date, from December 31, 2023 through February 21, 2024, Bunge repurchased an additional 3,319,987 shares for $301 million. Therefore, as of February 21, 2024, 10,836,963 shares were repurchased for $1.1 billion and $1.1 billion remains outstanding for repurchases under the program.

Cash Flows


	Year ended December 31,
(US$ in millions)	2023		2022
Cash provided by (used for) operating activities	$	3,308	$	(5,549)
Cash (used for) provided by investing activities	(1,009)		6,499
Cash used for financing activities	(856)		(769)
Effect of exchange rate changes on cash and cash equivalents, restricted cash, and cash held for sale	28		66
Net increase in cash and cash equivalents, restricted cash, and cash held for sale	$	1,471	$	247

Our cash flows from operations vary depending on, among other items, the market prices and timing of the purchase and sale of our inventories. Generally, during periods when commodity prices are rising, our Agribusiness operations require

increased use of cash to support working capital to acquire inventories and fund daily settlement requirements on exchange traded futures that we use to minimize price risk related to the purchase and sale of our inventories.

2023 Compared to 2022

For the year ended December 31, 2023, our cash and cash equivalents, restricted cash, and cash held for sale increased $1,471 million, compared to an increase of $247 million for the year ended December 31, 2022.

Operating: Cash provided by operating activities was $3,308 million for the year ended December 31, 2023, an increase of $8,857 million compared to cash used for operating activities of $5,549 million for the year ended December 31, 2022. The increase was primarily due to net changes in working capital, driven by lower average commodity prices, and decreased beneficial interest in securitized trade receivables, due to a change in structure of the securitization program discussed above.


	Year ended December 31,
(US$ in millions)	2023		2022
Cash provided by (used for) operating activities	$	3,308	$	(5,549)
Net proceeds from beneficial interest in securitized trade receivables (1)	87		6,824
Cash provided by operating activities, adjusted	$	3,395	$	1,275

(1) On November 16, 2022, Bunge and certain of its subsidiaries amended its trade receivables securitization program from a DPP structure to a pledge structure, see above for further details.

Cash provided by operating activities, including net proceeds from beneficial interest in securitized trade receivables was $3,395 million for the year ended December 31, 2023, compared to $1,275 million for the year ended December 31, 2022. The increase was driven by net working capital changes, driven by lower average commodity prices, as well as higher Net income during the year ended December 31, 2023.

Certain of our non-U.S. operating subsidiaries are primarily funded with U.S. dollar-denominated debt, while currency risk is hedged with U.S. dollar-denominated assets. The functional currency of our operating subsidiaries is generally the local currency. The financial statements of our subsidiaries are calculated in the functional currency, and when the local currency is the functional currency, translated into U.S. dollars. U.S. dollar-denominated loans are remeasured into their respective functional currencies at exchange rates at the applicable balance sheet date. Also, certain of our U.S. dollar functional operating subsidiaries outside the U.S. are partially funded with local currency borrowings, while the currency risk is hedged with local currency denominated assets. Local currency loans in U.S. dollar functional currency subsidiaries outside the U.S. are remeasured into U.S. dollars at the exchange rate on the applicable balance sheet date. The resulting gain or loss is included in our consolidated statements of income as Foreign exchange gains (losses) - net. For the year ended December 31, 2023 we recorded a foreign currency gain on net debt of $281 million versus a foreign currency gain on net debt for the year ended December 31, 2022 of $101 million, which were included as adjustments to reconcile Net income to Cash provided by (used for) operating activities in the line item "Foreign exchange (gain) loss on net debt" in our consolidated statements of cash flows. This adjustment is required as the gains and losses are non-cash items that arise from financing activities and therefore will have no impact on cash flows from operations.

Investing: Cash used for investing activities was $1,009 million for the year ended December 31, 2023 compared to cash provided by investing activities of $6,499 million for the year ended December 31, 2022, a decrease of $7,508 million. The decrease was primarily due to lower net proceeds from beneficial interests in securitized trade receivable as a result of the change in the program structure above, and higher capital expenditures including the acquisition of the Avondale refinery. Additionally, lower proceeds were received on the sale of our Russian operations during the year ended December 31, 2023 compared to proceeds received from the sale of our Mexican wheat milling business during the year ended December 31, 2022.

Financing: Cash used for financing activities was $856 million for the year ended December 31, 2023, an increase of $87 million, compared to cash used for financing activities of $769 million for the year ended December 31, 2022. For the year ended December 31, 2023, we received net cash proceeds from short-term and long-term debt of $200 million, primarily from delayed term draw loans of $750 million and $250 million as well as increased short term bank borrowings, offset by the repayment of the 1.85% Senior Notes - Euro in June 2023 and a 5-year loan agreement due in 2024, repurchased $600 million of common shares, and paid $383 million in dividend payments to common shareholders. For the year ended December 31, 2022, we made net cash repayments from short-term and long-term debt of $708 million, paid $349 million in dividends to our common and preference shareholders, repurchased $200 million of common shares, and paid $102 million to acquire an additional 10% ownership interest from redeemable noncontrolling interest holders in our subsidiary, Bunge Loders Croklaan Group B.V. These cash outflows were partially offset by $542 million in cash received from the sale of noncontrolling interests,

including upon formation of the Bunge Chevron JV, and $92 million in proceeds from the exercise of options for common shares.

Capital Expenditures

Our cash payments made for capital expenditures were $1,122 million and $555 million for the years ended December 31, 2023 and 2022, respectively. We intend to make capital expenditures in the range of $1.2 billion to $1.4 billion in 2024. Our priorities for 2024 are to maintain the cash generating capacity of our assets through non-discretionary projects, such as maintenance, safety and compliance, as well as discretionary investments in growth and productivity projects, focusing on our strategy to strengthen our oilseeds platform, increase participation in biofuels and plant-based proteins, and grow our value-added oils business. These discretionary and non-discretionary capital investments will also help us achieve certain of our environmental and sustainability related objectives. We intend to fund these capital expenditures primarily with cash flows from operations.

Off-Balance Sheet Arrangements

Guarantees

We have issued or were party to the following guarantees at December 31, 2023:


(US$ in millions)	Recorded Liability		Maximum Potential Future Payments
Unconsolidated affiliates guarantee (1)	$	—	$	94
Residual value guarantee (2)	—		388
Russia disposition indemnity (3)	9		235
Other guarantees	—		14
Total	$	9	$	731

(1)We have issued guarantees to certain financial institutions related to debt of certain of our unconsolidated affiliates. The terms of the guarantees are equal to the terms of the related financings, which have maturity dates through 2034. There are no recourse provisions or collateral that would enable us to recover any amounts paid under these guarantees. In addition, certain of our subsidiaries have guaranteed the obligations of certain of their unconsolidated affiliates and in connection therewith have secured their guarantee obligations through a pledge to the financial institutions of certain of their unconsolidated affiliates' shares plus loans receivable from the unconsolidated affiliates in the event that the guaranteed obligations are enforced.

Based on the amounts drawn under guaranteed debt facilities of unconsolidated affiliates at December 31, 2023, our potential liability was $83 million, and less than $1 million of obligations related to these guarantees have been recorded within Other non-current liabilities.

(2)We have issued guarantees to certain financial institutions that are party to certain operating lease arrangements for railcars, barges and buildings. These guarantees provide for a minimum residual value to be received by the lessor at the conclusion of the lease term. These leases expire at various dates from 2024 through 2029. At December 31, 2023, no obligation has been recorded related to these guarantees. Any obligation recorded would be recognized in Current operating lease obligations or Non-current operating lease obligations. (see Note 26- Leases, to our consolidated financial statements).

(3)On February 3, 2023, Bunge agreed to indemnify the buyer of its Russian operations against certain existing legal claims involving Bunge's former Russian subsidiary. The indemnity expires on February 2, 2030. As of December 31, 2023, we recorded a $9 million obligation related to this indemnity within Other non-current liabilities.

Contractual Obligations

The following table summarizes our scheduled contractual obligations and their expected maturities at December 31, 2023, and the effect such obligations are expected to have on our liquidity and cash flows in the future periods indicated.


	Payments due by period
(US$ in millions)	Total		2024		2025 - 2026		2027 - 2028		2029 and thereafter
Short-term debt	$	797	$	797	$	—	$	—	$	—
Long-term debt, including current portion(1)	4,361		9		2,142		1,135		1,075
Variable interest rate obligations	303		80		129		66		28
Interest obligations on fixed rate debt	390		88		155		78		69
Non-cancelable lease obligations(2)	1,086		338		345		139		264
Capital commitments	219		219		—		—		—
Freight supply agreements(3)	507		507		—		—		—
Inventory purchase commitments	283		270		13		—		—
Power supply purchase commitments	97		26		32		21		18
Other commitments and obligations(4)	509		282		117		75		35
Total contractual cash obligations(5)	$	8,552	$	2,616	$	2,933	$	1,514	$	1,489

(1)Includes components of long-term debt attributable to unamortized premiums of $16 million and excludes components of long-term debt attributable to fair value hedge accounting of $260 million.

(2)Represents future minimum payments under non-cancelable leases with initial terms of one year or more. Minimum lease payments have not been reduced by minimum sublease income receipts of $115 million due in future periods under non-cancelable subleases.

(3)Represents purchase commitments for time on ocean freight vessels and railroad freight lines for the purpose of transporting agricultural commodities. The ocean freight service agreements are short term contracts with a duration of less than a year. Ocean freight service agreements with terms in excess of one year are included in non-cancelable lease obligations. The railroad freight service agreements require a minimum monthly payment regardless of the actual level of freight services used. 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 such freight services compared to the rates at which we have contracted them may affect margins on the sales of agricultural commodities.

(4)Represents other purchase commitments and obligations, such as take-or-pay contracts, throughput contracts, and debt commitment fees.

(5)Does not include estimated payments of liabilities associated with uncertain income tax positions. As of December 31, 2023, Bunge had uncertain income tax liabilities of $68 million, including interest and penalties. At this time, we are unable to make a reasonably reliable estimate of the timing of payments in individual years in connection with these tax liabilities; therefore, such amounts are not included in the above contractual obligations table. See Note 14- Income Taxes to our consolidated financial statements.

Employee Benefit Plans

We expect to contribute $24 million to our defined benefit pension plans and $4 million to our postretirement benefit plans in 2024.

Critical Accounting Policies and Estimates

Our accounting policies are more fully described in Note 1- Nature of Business, Basis of Presentation and Significant Accounting Policies to our consolidated financial statements included as part of this Annual Report on Form 10-K. As disclosed in Note 1, the preparation of financial statements in conformity with U.S. GAAP requires management to make substantial judgment or estimation in their application that may significantly affect reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates. We believe the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments.

Foreign Currency Transactions and Translation of Foreign Currency Financial Statements

Our reporting currency is the U.S. dollar. The functional currency of the majority of our foreign subsidiaries is their local currency. The determination of functional currency may require significant judgment to identify the currency of the primary economic environment in which a subsidiary operates. This may include an evaluation of a number of economic factors including, cash flow, sales price, sales market, expense, and financing indicators, as well, as the extent of the subsidiary’s intra-entity transactions. However, in accordance with U.S. GAAP, if a foreign entity's economy is determined to be highly inflationary, then such foreign entity's financial statements are remeasured as if the functional currency were the reporting currency.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into their respective functional currencies at exchange rates in effect at the balance sheet date. The resulting exchange gain or loss is included in our consolidated statements of income as Foreign exchange gains (losses) - net unless the remeasurement gain or loss relates to an intercompany transaction that is of a long-term investment nature and for which settlement is neither planned nor anticipated in the foreseeable future, in which case the remeasurement gain or loss is reported as a component of Accumulated other comprehensive loss in our consolidated balance sheets.

At period-end, amounts included in the consolidated statements of income, comprehensive income, cash flows, and changes in equity are translated using average exchange rates during each period. Assets and liabilities are translated at period-end exchange rates and resulting foreign currency translation adjustments are recorded in the consolidated balance sheets as a component of Accumulated other comprehensive loss.

Inventories and Commodity Derivatives

Our RMI, forward RMI purchase and sale contracts, and exchange-traded futures and options are primarily valued at fair value. RMI are freely-traded, have quoted market prices, may be sold without significant additional processing and have predictable and insignificant disposal costs (see Note 5- Inventories to our consolidated financial statements for RMI balances as of December 31, 2023). We estimate the fair values of commodity inventories and forward purchase and sale contracts on these inventories based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or over-the-counter ("OTC") markets with appropriate adjustments for differences in local markets where our inventories are located. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. The significant unobservable inputs for RMI and physically-settled forward purchase and sale contracts relate to certain management estimates regarding transportation costs and other local market or location-related adjustments, primarily freight-related adjustments in the interior of Brazil and the lack of market corroborated information in Canada. In both situations, we use proprietary information such as purchase and sale contracts and contracted prices to value freight, premiums, and discounts in our contracts. Counterparty credit and performance risk on forward commodity purchase and sale contracts is included in the determination of fair value. From time to time, we have experienced instances of counterparty non-performance as a result of significant declines in counterparty profitability under these contracts due to movements in commodity prices between the time the contracts were executed and the contractual forward delivery period. However, based on historical experience with our suppliers and customers, our own credit risk, and knowledge of current market conditions, we do not view non-performance risk to be a significant input to fair value for the majority of our forward commodity purchase and sale contracts.

Changes in the fair values of these inventories and contracts are recognized in our consolidated statements of income as a component of Cost of goods sold. If we used different methods or factors to estimate fair values, amounts reported as Inventories and Unrealized gains and losses on derivative contracts in the consolidated balance sheets and Cost of goods sold in the consolidated statements of income could differ. Additionally, if market conditions change subsequent to year-end, amounts reported in future periods as Inventories, Unrealized gains and losses on derivative contracts, and Cost of goods sold could differ. See Note 15- Fair Value Measurements to our consolidated financial statements for further details of commodity inventories and forward purchase and sale contracts on these inventories carried at fair value.

Derivatives - Designated Hedging Activities

We manage currency risk on certain forecasted purchases, sales and selling, general and administrative expenses with currency forwards designated as cash flow hedges. Assuming normal market conditions, the change in the market value of such derivative instruments has historically been, and is expected to continue to be, highly effective at offsetting changes in price movements of the hedged item. Gains and losses arising from open and closed hedging transactions are deferred in Accumulated other comprehensive loss, net of applicable income taxes, and recognized as a component of earnings in the consolidated statement of income in the same caption as the hedged items when the hedged item is recognized in earnings. If it is determined that the derivative hedging instruments are no longer effective at offsetting changes in the price of the hedged item, then the changes in the market value of the derivative instrument would be recorded immediately in the consolidated statements of income in the same caption as the hedged items. See Note 16- Derivative Instruments and Hedging Activities to our consolidated financial statements for further details and impacts of cash flow hedges on the consolidated financial statements.

Goodwill

When we acquire a business, the consideration is first assigned to identifiable assets and liabilities, including intangible assets, based on estimated fair values, with any excess recorded as goodwill. Determining fair value requires significant estimates and assumptions based on an evaluation of a number of factors, including market participants, projected growth rates, the amounts and timing of future cash flows, the discount rates applied to the cash flows, and the determination of useful life of an asset.

Our goodwill balance is not amortized to expense. Instead, it is tested for impairment at least annually. We generally perform our annual impairment analysis during the fourth quarter. If events or indicators of impairment occur between annual impairment analyses, we perform an impairment analysis at that date. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant asset. In testing for a potential impairment of goodwill, we: (1) determine our reporting units; (2) allocate goodwill to our various reporting units to which the acquired goodwill relates; (3) determine the carrying value, or book value, of our reporting units; (4) estimate the fair value of each reporting unit using a discounted cash flow model and/or using market multiples; (5) compare the fair value of each reporting unit to its carrying value; and (6) if the estimated fair value of a reporting unit is less than the carrying value, we recognize an impairment charge for such amount, but not exceeding the total amount of goodwill allocated to that reporting unit.

The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis, including the identification of our reporting units, identification and allocation of the assets and liabilities to each of our reporting units, and determination of fair value. In estimating the fair value of a reporting unit for the purposes of our annual or periodic impairment analysis, we make estimates and significant judgments about the future cash flows of that reporting unit aligned with management’s strategic business plans. Changes in judgment related to these assumptions and estimates could result in goodwill impairment charges. We believe the assumptions and estimates used are appropriate based on the information currently available to management. Estimates based on market earnings multiples of peer companies identified for the reporting unit may also be used, where available. Critical estimates in the determination of fair value under the income approach include, but are not limited to, assumptions about variables such as commodity prices, crop and related throughput and production volumes, profitability, future capital expenditures, other expenses, and discount rates, all of which are subject to a high degree of judgment.

During the fourth quarter of 2023, we performed our annual impairment assessment and determined the estimated fair values of each of our goodwill reporting units exceeded each of their carrying values by a significant amount. See Note 8- Goodwill, to our consolidated financial statements.

Property, Plant and Equipment and Other Finite-Lived Intangible Assets

Long-lived assets include property, plant and equipment and other finite-lived intangible assets. Property, plant and equipment and finite-lived intangible assets are depreciated or amortized over their estimated useful life on a straight line basis. When facts and circumstances indicate the carrying values of these assets may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets to the undiscounted projected future cash flows to be generated by such assets from their use and ultimate disposal. If the carrying value of our assets is not recoverable, we recognize an impairment loss in the amount that carrying value exceeds fair value. Impairment is recognized as a charge against results of operations. Our judgments related to the expected useful lives of these 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 these assets, changes in these factors could cause us to realize material impairment charges. Please refer to Note 10- Impairments to our consolidated financial statements for details of property, plant and equipment and other finite-lived intangible asset impairment charges recorded in the year ended December 31, 2023.

Investments in Affiliates

We have investments in various unconsolidated joint ventures accounted for using the equity method, minus impairment. We review our investments annually or when an event or circumstances indicate that a potential decline in value may be other than temporary. We consider various factors in determining whether to recognize an impairment charge, including the length of time the fair value of the investment is expected to be below its carrying value, the financial condition, operating performance and near-term prospects of the affiliate, and our intent and ability to hold the investment for a period of time sufficient to allow for recovery of the fair value. During the second quarter of 2023, certain of the above factors indicated an other than temporary decline in value of our investment in Australia Plant Proteins ("APP"), a start-up manufacturer of novel protein ingredients. As a result of the impairment, there is no carrying value associated with the equity method investment in APP at December 31, 2023. Critical estimates in the determination of the fair value include, but are not limited to, future expected cash flows, revenue growth, and discount rates. If we used different methods or factors to estimate fair value, the amount of recorded impairment and the carrying value of our investments could differ. Please refer to Note 10- Impairments and Note 11- Investments in Affiliates and Variable Interest Entities to our consolidated financial statements for further details.

Contingencies

We are a party to a large number of claims and lawsuits, primarily non-income tax and labor claims in Brazil and non-income tax claims in Argentina, and we make provisions for potential liabilities arising from such claims when we deem them probable and reasonably estimable. These estimates of probable loss have been developed in consultation with in-house and outside counsel and are 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, see "Item 3. Legal Proceedings" and Note 21- Commitments and Contingencies to our consolidated financial statements.

Income Taxes

We record valuation allowances to reduce our deferred tax assets to the amount that we are likely to realize. We apply a "more likely than not" threshold to the recognition and de-recognition of tax benefits. Accordingly, we recognize the amount of tax benefit that has a greater than 50% likelihood of being ultimately realized upon settlement. We consider projections of future taxable income and prudent tax planning strategies to assess the need for and the amount 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 decreasing income tax expense. 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 increasing income tax expense. During 2023, we increased valuation allowances by $321 million, primarily attributable to valuation allowance established on tax credits generated during the year where Bunge believes a portion of the deferred tax asset is not more likely than not to be realized.

The calculation of our uncertain tax positions involves complexities in the application of intricate tax regulations in a multitude of jurisdictions across our global operations. Future changes in judgment related to the ultimate resolution of unrecognized tax benefits will affect the earnings in the quarter of such change. At December 31, 2023, we had recorded uncertain tax positions of $68 million in our consolidated balance sheet. For additional information on income taxes, please refer to Note 14- Income Taxes to our consolidated financial statements.

Recoverable Taxes

We evaluate the collectability of our recoverable taxes and record allowances if we determine that collection is doubtful. Recoverable taxes include value-added taxes paid upon the acquisition of property, plant and equipment, raw materials and taxable services, as well as other transactional taxes, which can be recovered in cash or as compensation against income taxes, or other taxes we may owe, primarily in Brazil and Europe. Management's assumption about the collectability 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, percentages of export sales, seasonality, changes in applicable tax rates, cash payments by the applicable government agencies and the offset of outstanding balances against income or certain other taxes owed to the applicable governments, where permissible. At December 31, 2023, the allowance for recoverable taxes was $35 million. We continue to monitor the economic environment and events taking place in the applicable countries and in cases where we determine that recovery is doubtful, recoverable taxes are reduced by allowances for the estimated unrecoverable amounts.

New Accounting Pronouncements

See Note 1- Nature of Business, Basis of Presentation and Significant Accounting Policies to our consolidated financial statements included as part of this Annual Report on Form 10-K.

Previous: Item 6. [Reserved] · Next: Item 7A. Quantitative and Qualitative Disclosures About Market Risk