filings.toolsItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
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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, 2023 and 2022, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of Bunge Global SA's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024.
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.
Viterra
Following the completion of our pending Viterra Acquisition, our operations will be impacted by the integration of Viterra's network of agricultural storage, processing, and transport assets. Viterra businesses operate in similar industries as we do, so we expect the factors that impact Viterra's operations will be broadly consistent with the factors that we have described above that impact each of our segments.
Sugar and Bioenergy
Our Sugar and Bioenergy segment primarily comprised our 50% interest in BP Bunge Bioenergia, a joint venture with BP. On October 1, 2024, we completed the sale of our 50% interest in BP Bunge Bioenergia. See Note 2 - Acquisitions and Dispositions to our consolidated financial statements for further details.
BP Bunge Bioenergia operated on a stand-alone basis with a total of 11 mills located across the Southeast, North, and Midwest regions of Brazil. We accounted 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.
Prior to the sale of our interest in October 2024, profitability of this segment, the value of our investment, and the timing of distributions we received, if any, were affected by the profitability of the joint venture. In turn, the profitability of the joint venture was affected by the availability and quality of sugarcane, which impacted capacity utilization rates and the amount of sugar that could 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. Demand for the joint venture's products was 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 (losses) gains - 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 (losses) gains - 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 Argentina, Brazil, Canada, Switzerland and the United States. 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 earnings before interest and taxes ("EBIT") is an operating performance measure used by Bunge’s management to evaluate reportable segment operating activities as well as Corporate and Other results. Bunge also uses Core Segment EBIT, Non-core Segment EBIT, Corporate and Other EBIT, and Total 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 reportable segments. Non-core Segment EBIT is the EBIT of Bunge’s Sugar & Bioenergy reportable segment. Total 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 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 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 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 EBIT below.
2024 Overview
Net Income Attributable to Bunge Shareholders - For the year ended December 31, 2024, Net income attributable to Bunge shareholders was $1,137 million, a decrease of $1,106 million compared to a Net income attributable to Bunge shareholders of $2,243 million for the year ended December 31, 2023. The decrease was primarily due to lower Core Segment EBIT, as further discussed in the Segment Overview & Results of Operations section below, partially offset by lower income tax expense as discussed further below.
Earnings Per Share - Diluted - For the year ended December 31, 2024, Net income attributable to Bunge shareholders - diluted, was $7.99 per share, a decrease of $6.88 per share, compared to $14.87 per share for the year ended December 31, 2023.
EBIT - For the year ended December 31, 2024, Total EBIT was $1,792 million, a decrease of $1,541 million compared to EBIT of $3,333 million for the year ended December 31, 2023. The decrease in Total EBIT for the year ended December 31, 2024 was primarily due to lower Core Segment EBIT, resulting primarily from lower gross profit in our Agribusiness segment, 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 shareholders to Total EBIT.
Income Tax Expense - Income tax expense was $336 million for the year ended December 31, 2024 compared to income tax expense of $714 million for the year ended December 31, 2023. The decrease in income tax expense for the year ended December 31, 2024 was primarily due to lower pre-tax income and earnings mix.
Liquidity and Capital Resources – At December 31, 2024, working capital, which equals Total current assets less Total current liabilities, was $8,523 million, a decrease of $140 million, compared to working capital of $8,663 million at December 31, 2023. The decrease in working capital was primarily due to a higher Current portion of long-term debt balance, lower Inventories and lower Trade accounts receivables, net, partially offset by lower Trade accounts payable balances and higher Cash and cash equivalents, as further discussed in the Liquidity and Capital Resources section below.
Segment Overview and Results of Operations
Our operations are organized, managed, and classified into four reportable segments based upon their similar economic characteristics, nature of products and services offered, production processes, types and classes of customer, and distribution methods. We further organize these reportable segments into Core operations and Non-core operations. Core operations comprise our Agribusiness, Refined and Specialty Oils, and Milling reportable segments. Non-core operations comprise our Sugar & Bioenergy reportable segment, which itself primarily comprised the Company’s 50% interest in the net earnings of BP Bunge Bioenergia, a joint venture with BP p.l.c. See Note 2- Acquisitions and Dispositions for details regarding Bunge's disposition of its 50% interest in BP Bunge Bioenergia.
Our remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other. Corporate and Other includes salaries and overhead for corporate functions that are not allocated to our individual reportable segments because the operating performance of each reportable segment is evaluated by the Company's chief operating decision maker exclusive of these items, as well as certain other activities including Bunge Ventures, the Company's captive insurance activities, and trade receivables securitization program, as well as certain income tax assets and liabilities.
A reconciliation of Net income attributable to Bunge shareholders to Total EBIT follows:
| Year Ended December 31, | ||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | ||||||||||||||||||
| Net income attributable to Bunge shareholders | $ | 1,137 | $ | 2,243 | ||||||||||||||||
| Interest income | (163) | (148) | ||||||||||||||||||
| Interest expense | 471 | 516 | ||||||||||||||||||
| Income tax expense | 336 | 714 | ||||||||||||||||||
| Noncontrolling interests' share of interest and tax | 11 | 8 | ||||||||||||||||||
| Total EBIT | $ | 1,792 | $ | 3,333 | ||||||||||||||||
| Agribusiness Segment EBIT | 1,301 | 2,786 | ||||||||||||||||||
| Refined and Specialty Oils Segment EBIT | 759 | 865 | ||||||||||||||||||
| Milling Segment EBIT | 111 | 66 | ||||||||||||||||||
| Core Segment EBIT | 2,171 | 3,717 | ||||||||||||||||||
| Corporate and Other EBIT | (594) | (548) | ||||||||||||||||||
| Sugar and Bioenergy Segment EBIT | 215 | 164 | ||||||||||||||||||
| Non-core Segment EBIT | 215 | 164 | ||||||||||||||||||
| Total EBIT | $ | 1,792 | $ | 3,333 |
Core Segments
Agribusiness Segment
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Volumes (in thousand metric tons) | 80,628 | 76,019 | 6 | % | ||||||||||||||||||||||
| Net sales | $ | 38,598 | $ | 42,764 | (10) | % | ||||||||||||||||||||
| Cost of goods sold | (36,684) | (39,443) | (7) | % | ||||||||||||||||||||||
| Gross profit | 1,914 | 3,321 | (42) | % | ||||||||||||||||||||||
| Selling, general and administrative expense | (603) | (592) | 2 | % | ||||||||||||||||||||||
| Foreign exchange losses — net | (171) | — | (100) | % | ||||||||||||||||||||||
| EBIT attributable to noncontrolling interests | (9) | (70) | (87) | % | ||||||||||||||||||||||
| Other income — net | 226 | 126 | 79 | % | ||||||||||||||||||||||
| (Loss) income from affiliates | (56) | 1 | (5,700) | % | ||||||||||||||||||||||
| Total Agribusiness Segment EBIT | $ | 1,301 | $ | 2,786 | (53) | % |
2024 Compared to 2023
Agribusiness segment Net sales decreased 10% to $38,598 million for the year ended December 31, 2024. The decrease was due to the following:
*•*In Processing, Net sales decreased 11%, primarily due to lower average sales prices experienced in all regions for our global soybean oilseed processing businesses as well as our Europe softseed businesses, driven by relative price stabilization due to a more balanced supply and demand environment, in addition to overall lower volumes in our global soybean oilseed processing businesses. The above decreases were slightly offset by higher volumes in South America resulting from the non-recurrence of the prior year drought in Argentina along with higher volumes in our Europe softseed business primarily driven from increased activity at our Ukrainian facilities.
- In Merchandising, Net sales decreased 7%, primarily due to lower average sales prices in our global corn, wheat, and oil businesses, in addition to lower volumes in our global wheat business. The decrease was partially offset by an
increase in volumes in our global corn and oils businesses, primarily due to fewer supply constraints compared to the prior period.
Cost of goods sold decreased 7%, to $36,684 million for the year ended December 31, 2024. The decrease was primarily due to the following:
-
In Processing, Cost of goods sold decreased 7%, primarily due to lower Net sales and the non-recurrence of a prior year fixed asset impairment charge in North America. The decrease was also attributable to $5 million in insurance recoveries, related to certain previously damaged property, as well as a business interruption insurance recovery of $38 million related to our Ukrainian operations as a result of the Ukraine-Russia war, both of which were recognized in the current year. The decrease was partially offset by unfavorable mark-to-market results in the current period as well as the absence of mark-to-market gains from the recovery of inventory in Ukraine recognized in the prior period.
-
In Merchandising, Cost of goods sold decreased by 8%, primarily due to lower Net sales, as further described above, and favorable mark-to-market results in the current period. The decrease was also attributable to $1 million in insurance recoveries, related to certain previously damaged property, as well as a business interruption insurance recovery of $14 million related to our Ukrainian operations as a result of the Ukraine-Russia war, both of which were recognized in the current year. The decrease was partially offset by the lack of mark-to-market gains from the recovery of inventory in Ukraine recognized in the prior period.
Foreign exchange losses - net was a loss of $171 million for the year ended December 31, 2024 . The net loss in the current year was the result of losses in our processing business, primarily due to the impact of a stronger U.S. dollar on U.S. dollar-denominated loans payable in non-U.S. dollar functional currency operations. The loss was partially offset by net remeasurement gains on net monetary assets, excluding the impact of loans payable described above, as a result of U.S. dollar exposure in non-U.S. dollar functional currency operations.
Other income - net was income of $226 million for the year ended December 31, 2024, compared to income of $126 million for the year ended December 31, 2023. The increase was primarily due to gains in Argentina related to foreign currency positioning.
(Loss) income from affiliates was a loss of $56 million for the year ended December 31, 2024, compared to income of $1 million for the year ended December 31, 2023. The decrease was primarily due to unfavorable results from equity method investments in South America, as well as a $19 million impairment charge in the current period associated with a minority investment in North America.
Segment EBIT decreased 53% to $1,301 million for the year ended December 31, 2024. The decrease was primarily due to the following:
-
In Processing, a decrease of 62% was primarily due to lower Gross profit across all businesses and regions, foreign exchange losses, and impairment charges incurred in the current year, as described above. This decrease was partially offset by an increase in Other income (expense) - net as highlighted above.
-
In Merchandising, an increase of 20% was primarily due to higher Gross profit, driven by more favorable results in our ocean freight business.
Refined and Specialty Oils Segment
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Volumes (in thousand metric tons) | 9,134 | 8,908 | 3 | % | ||||||||||||||||||||||
| Net sales | $ | 12,771 | $ | 14,603 | (13) | % | ||||||||||||||||||||
| Cost of goods sold | (11,484) | (13,234) | (13) | % | ||||||||||||||||||||||
| Gross profit | 1,287 | 1,369 | (6) | % | ||||||||||||||||||||||
| Selling, general and administrative expense | (416) | (425) | (2) | % | ||||||||||||||||||||||
| Foreign exchange (losses) gains — net | (20) | 7 | (386) | % | ||||||||||||||||||||||
| EBIT attributable to noncontrolling interests | (35) | (21) | 67 | % | ||||||||||||||||||||||
| Other (expense) — net | (57) | (65) | (12) | % | ||||||||||||||||||||||
| Total Refined and Specialty Oils Segment EBIT | $ | 759 | $ | 865 | (12) | % |
2024 Compared to 2023
Refined and Specialty Oils segment Net sales decreased 13%, to $12,771 million for the year ended December 31, 2024, primarily due to lower average sales prices in all regions, driven by a more balanced supply and demand environment and uncertainty related to U.S. biofuel policies, partially offset by increased volumes in Asia due to higher demand for certain products driven by better pricing, as well as increased volumes in North America, primarily due to expanded capacity at our Avondale refinery.
Cost of goods sold decreased 13%, to $11,484 million for the year ended December 31, 2024. The decrease in Cost of goods sold was primarily due to lower prices in all regions, as described in Net sales above, in addition to favorable mark-to-market results.
SG&A expenses decreased 2%, to $416 million for the year ended December 31, 2024. The decrease was primarily driven by the lack of recurring prior year accelerated amortization charges, related to the discontinuance of the Loders Croklaan trademark.
Segment EBIT decreased 12% to $759 million for the year ended December 31, 2024. The decrease was primarily driven by lower Gross profit driven by overall lower margins, particularly in North America, as well as unfavorable Foreign exchange (losses) gains - net, primarily driven by the devaluation of the Egyptian pound in the first quarter of 2024.
Milling Segment
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Volumes (in thousand metric tons) | 3,703 | 3,391 | 9 | % | ||||||||||||||||||||||
| Net sales | $ | 1,555 | $ | 1,896 | (18) | % | ||||||||||||||||||||
| Cost of goods sold | (1,337) | (1,729) | (23) | % | ||||||||||||||||||||||
| Gross profit | 218 | 167 | 31 | % | ||||||||||||||||||||||
| Selling, general and administrative expense | (97) | (95) | 2 | % | ||||||||||||||||||||||
| Foreign exchange (losses) gains — net | (3) | 1 | (400) | % | ||||||||||||||||||||||
| EBIT attributable to noncontrolling interests | — | 1 | (100) | % | ||||||||||||||||||||||
| Other expense — net | (6) | (7) | (14) | % | ||||||||||||||||||||||
| Loss from affiliates | (1) | (1) | — | % | ||||||||||||||||||||||
| Total Milling Segment EBIT | $ | 111 | $ | 66 | 68 | % |
2024 Compared to 2023
Milling segment Net sales decreased 18%, to $1,555 million for the year ended December 31, 2024. The decrease was primarily due to lower sales prices in both our South American wheat milling and North American corn milling businesses. These decreases were partially offset by an increase in volumes across both regions.
Cost of goods sold decreased 23%, to $1,337 million for the year ended December 31, 2024. The decrease was primarily due to lower sales prices, as described for Net sales above, as well as favorable mark-to-market results.
Segment EBIT increased 68% to $111 million for the year ended December 31, 2024. The increase was primarily due to higher Gross profit in both regions, as described above.
Corporate and Other
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Net sales | $ | 54 | $ | 42 | 29 | % | ||||||||||||||||||||
| Cost of goods sold | (83) | (60) | 38 | % | ||||||||||||||||||||||
| Gross profit | (29) | (18) | (61) | % | ||||||||||||||||||||||
| Selling, general and administrative expense | (658) | (602) | 9 | % | ||||||||||||||||||||||
| Foreign exchange gains — net | 5 | 12 | (58) | % | ||||||||||||||||||||||
| EBIT attributable to noncontrolling interests | 4 | 4 | — | % | ||||||||||||||||||||||
| Other income — net | 83 | 73 | 14 | % | ||||||||||||||||||||||
| Income (loss) from affiliates | 1 | (17) | 106 | % | ||||||||||||||||||||||
| Total Corporate and Other EBIT | $ | (594) | $ | (548) | (8) | % |
2024 Compared to 2023
Corporate and Other EBIT decreased 8%, to a loss of $594 million for the year ended December 31, 2024. The decrease was primarily driven by an increase in SG&A expense resulting from increased acquisition and integration costs associated with the announced acquisition of Viterra, partially offset by lower variable compensation expense. The company recognized acquisition and integrations costs within Corporate and Other EBIT of $244 million, and $114 million for the years ended December 31, 2024, and 2023, respectively. The decrease described above was partially offset by the absence of recurring prior year impairment charges of $20 million, reported in in Other income - net, related to a long-term investment and $16 million, reported in Income (loss) from affiliates, related to a minority investment in Australian Plant Proteins, a start-up manufacturer of novel protein ingredients.
Non-core Segment
Sugar and Bioenergy Segment
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Net sales | $ | 130 | $ | 235 | (45) | % | ||||||||||||||||||||
| Cost of goods sold | (127) | (229) | (45) | % | ||||||||||||||||||||||
| Gross profit | 3 | 6 | (50) | % | ||||||||||||||||||||||
| Selling, general and administrative expense | (2) | (1) | 100 | % | ||||||||||||||||||||||
| Other income — net | 196 | 2 | 9,700 | % | ||||||||||||||||||||||
| Income from affiliates | 18 | 157 | (89) | % | ||||||||||||||||||||||
| Total Sugar and Bioenergy Segment EBIT | $ | 215 | $ | 164 | 31 | % |
2024 Compared to 2023
Segment EBIT increased 31%, to $215 million for the year ended December 31, 2024. The increase was primarily due to a $195 million gain on the sale of Bunge's 50% ownership share in BP Bunge Bioenergia, recorded in Other income - net. The increase was partially offset by less favorable results from our investment in BP Bunge Bioenergia, primarily resulting from the absence of a tax valuation allowance release in the current period as compared to the prior period, current period foreign exchange losses on U.S. dollar denominated debt at BP Bunge Bioenergia, lower current period gross margins, and lower equity method earnings following the sale. See Note 2- Acquisitions and Dispositions in the consolidated financial statements for further details regarding the Company's disposition of BP Bunge Bioenergia.
Interest—A summary of consolidated interest income and expense follows:
| Year Ended December 31, | ||||||||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | % Change | |||||||||||||||||||||||
| Interest income | $ | 163 | $ | 148 | 10 | % | ||||||||||||||||||||
| Interest expense | (471) | (516) | (9) | % |
2024 Compared to 2023
Interest income increased 10% to $163 million for the year ended December 31, 2024. Interest expense decreased 9% to $471 million for the year ended December 31, 2024. Higher interest income is the result of higher balances in cash and cash equivalents in the current year. Lower interest expense is the result of lower interest rates.
Liquidity and Capital Resources
Our main financial objectives are to prudently manage financial risks, ensure consistent access to liquidity, and minimize cost of capital in order to efficiently finance our business and maintain balance sheet strength. We generally finance our ongoing operations with cash flows generated from operations, issuances of commercial paper, borrowings under various bilateral and syndicated revolving credit facilities, term loans, and proceeds from the issuance of senior notes. Acquisitions and long-lived assets are generally financed with a combination of equity and long-term debt.
Working Capital
| As of December 31, | |||||||||||
| (US$ in millions, except current ratio) | 2024 | 2023 | |||||||||
| Cash and cash equivalents | $ | 3,311 | $ | 2,602 | |||||||
| Trade accounts receivable, net | 2,148 | 2,592 | |||||||||
| Inventories | 6,491 | 7,105 | |||||||||
| Other current assets | 4,008 | 4,051 | |||||||||
| Total current assets | $ | 15,958 | $ | 16,350 | |||||||
| Short-term debt | $ | 875 | $ | 797 | |||||||
| Current portion of long-term debt | 669 | 5 | |||||||||
| Trade accounts payable | 2,777 | 3,664 | |||||||||
| Current operating lease obligations | 286 | 308 | |||||||||
| Other current liabilities | 2,828 | 2,913 | |||||||||
| Total current liabilities | $ | 7,435 | $ | 7,687 | |||||||
| Working capital**(1)** | $ | 8,523 | $ | 8,663 | |||||||
| Current ratio**(1)** | 2.15 | 2.13 |
(1)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 $8,523 million at December 31, 2024, a decrease of $140 million from working capital of $8,663 million at December 31, 2023.
Cash and Cash Equivalents - Cash and cash equivalents were $3,311 million at December 31, 2024, an increase of $709 million from $2,602 million at December 31, 2023. 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, money market funds, and commercial paper programs with highly-rated financial institutions and in U.S. government securities. 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, 2024.
Trade accounts receivable, net - Trade accounts receivable, net were $2,148 million at December 31, 2024, a decrease of $444 million from $2,592 million at December 31, 2023. The decrease was primarily due to decreased Net sales in the current period driven by factors described in the Segment Overview & Results of Operations section above.
Inventories - Inventories were $6,491 million at December 31, 2024, a decrease of $614 million from $7,105 million at December 31, 2023. The decrease was primarily due to certain lower average commodity prices, including soybeans and wheat, as well as overall lower volumes.
Readily marketable inventories ("RMI") comprise agricultural commodity inventories, such as soybeans, soybean meal, soybean oil, palm 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 $5,224 million and $5,837 million at December 31, 2024 and 2023, respectively (see Note 5- Inventories, to our consolidated financial statements).
Other current assets - Other current assets were $4,008 million at December 31, 2024, a decrease of $43 million from $4,051 million at December 31, 2023. The decrease is primarily due to a decrease in secured advances to supplies, net as market conditions in Brazil have led to a reduction in new advances in the current period, lower unrealized gains on derivative contracts as a result of volatile commodity prices, and a decrease in prepaid expenses due to the changing market environment. These decreases were partially offset by an increase in marketable securities and other short-term investments, a deferred payment recorded in the current year in connection with the sale of BP Bunge Bioenergia that was collected in early 2025, and the recognition of an insurance recovery receivable related to business interruption resulting from the Ukraine-Russia war in the current year (see Note 6- Other Current Assets to our consolidated financial statements).
Short-term debt - Short-term debt, including the Current portion of long-term debt, was $1,544 million at December 31, 2024, an increase of $742 million from $802 million at December 31, 2023. The higher Short-term debt level at December 31, 2024 compared to December 31, 2023 is primarily due to an increase in the Current portion of long-term debt associated with our 1.63% Senior Notes, due 2025, and higher borrowings by Bunge operating companies on local bank lines of credit.
Trade accounts payable - Trade accounts payable were $2,777 million at December 31, 2024, a decrease of $887 million from $3,664 million at December 31, 2023. The decrease in Trade accounts payable was primarily due to certain lower average commodity prices, including soybeans and wheat, lower volumes, and timing of payments.
Other current liabilities - Other current liabilities were $2,828 million at December 31, 2024, a decrease of $85 million from $2,913 million at December 31, 2023. The decrease was primarily due to lower income tax payable as a result of lower earnings, partially offset by higher unrealized losses on derivative contracts as a result of volatile commodity prices.
Debt
Revolving Credit Facilities—At December 31, 2024, 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:
| Committed Capacity | Incremental Commitments**(2)** | Borrowings Outstanding | ||||||||||||||||||||||||||||||
| Revolving Credit Facilities (1) | Maturities | December 31, 2024 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||
| $1.1 Billion 364-day Revolving Credit Agreement | 2025 | $ | 1,100 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
| $3.2 Billion 5-year Revolving Credit Agreement | 2029 | 1,950 | 1,250 | — | — | |||||||||||||||||||||||||||
| $3.5 Billion 3-year Revolving Facility Agreement | 2026 | 1,750 | 1,750 | — | — | |||||||||||||||||||||||||||
| $865 Million 5-year Revolving Credit Facility | 2026 | 865 | — | — | — | |||||||||||||||||||||||||||
| Total Revolving Credit Facilities | $ | 5,665 | $ | 3,000 | $ | — | $ | — | ||||||||||||||||||||||||
(1)See Note 17- Debt for further information on these programs. The short-term credit ratings of the commercial paper 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.
(2)Incremental commitments are available to be drawn following the completion of the Viterra Acquisition subject to the satisfaction of certain conditions.
Short and long-term debt—
| As of December 31, | |||||||||||
| US$ in millions | 2024 | 2023 | |||||||||
| Short-term debt | $ | 875 | $ | 797 | |||||||
| Long-term debt, including current portion | 5,363 | 4,085 | |||||||||
| Total debt | $ | 6,238 | $ | 4,882 | |||||||
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Average total debt outstanding | $ | 5,480 | $ | 5,293 |
Our total debt increased by $1,356 million to $6,238 million at December 31, 2024, from $4,882 million at December 31, 2023, primarily due to an increase in Long-term debt, including current portion, resulting from the issuance of three tranches of the September 2024 Senior Notes for an aggregate principal amount of $2.0 billion, partially offset by the prepayment of a $750 million 3-year term loan agreement due in 2025. See Note 17- Debt for further information.
From time to time, through our financing subsidiaries, we enter into bilateral short-term credit lines as necessary. At December 31, 2024, there were no borrowings outstanding under these bilateral short-term credit lines.
In addition, Bunge's operating companies had $875 million and $797 million in short-term borrowings outstanding from local bank lines of credit at December 31, 2024, and 2023, 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 debt financing ("Acquisition Financing"). On September 17, 2024, we completed the sale and issuance of three tranches of Senior Notes for an aggregate principal amount of $2.0 billion. See Note 17- Debt for further information. As a result of the Senior Notes issuance, and in accordance with its terms, the Acquisition Financing commitment was reduced by $2.0 billion with $6.0 billion available as of December 31, 2024. Bunge intends to use a portion of the proceeds from the Acquisition Financing and Senior Notes issuance to fund a portion of the cash consideration for Bunge's Acquisition of Viterra and to repay a portion of certain Viterra debt to be assumed in connection with the Acquisition, including, in each case, related fees and expenses, and, with any remaining amounts, for general corporate purposes.
Also, in the third quarter of 2024, Bunge's wholly-owned subsidiary, Bunge Limited Finance Corp. ("BLFC"), commenced offers (the "US Exchange Offers") to exchange all outstanding notes of certain series issued by Viterra Finance B.V. ("VFBV") and guaranteed by Viterra and Viterra B.V., for up to $1.95 billion aggregate principal amount of new notes issued by BLFC and guaranteed by Bunge. In addition, in the third quarter of 2024, Viterra commenced a consent solicitation (the "European Consent Solicitation") to amend the indenture governing VFBV's outstanding 500 million Euro aggregate principal amount of 0.375% senior unsecured notes due 2025 and outstanding 700 million Euro aggregate principal amount of 1.000% senior unsecured notes due 2028 to, among other things, substitute the issuer and guarantors of such notes with Bunge Finance Europe B.V. ("BFE"), a wholly owned finance subsidiary of Bunge, as issuer, and Bunge as guarantor. See Note 17- Debt for further information.
The US Exchange Offers and European Consent Solicitation are conditioned among other things, upon the consummation of the Acquisition. This Annual Report is not intended to and does not constitute an offer to sell or purchase, or the solicitation of an offer to sell or purchase, or the solicitation of any vote of approval or the solicitation of tenders or consents with respect to any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Registered Senior Notes — BLFC, a wholly owned finance subsidiary of Bunge, had the following outstanding debt securities (collectively referred to as the "BLFC Notes") registered under the requirements of the Securities Act of 1933, as amended, at December 31, 2024.
| (US$ in millions) | Aggregate Principal Amount Outstanding | Balance Outstanding | ||||||||||||
| 1.63% Senior Notes due 2025 | $ | 600 | 599 | |||||||||||
| 3.25% Senior Notes due 2026 | 700 | 699 | ||||||||||||
| 3.75% Senior Notes due 2027 | 600 | 598 | ||||||||||||
| 4.10% Senior Notes due 2028 | 400 | 397 | ||||||||||||
| 4.20% Senior Notes due 2029 | 800 | 793 | ||||||||||||
| 2.75% Senior Notes due 2031 | 1,000 | 993 | ||||||||||||
| 4.65% Senior Notes due 2034 | 800 | 790 |
Bunge unconditionally guarantees BLFC's obligations with respect to the BLFC Notes. Bunge's guarantees are unsecured and unsubordinated obligations of Bunge and rank equally with all other unsecured and unsubordinated obligations of Bunge. The guarantees provide that in the event of a default in payment of principal of, or interest on, BLFC Notes of a particular series, the holder of such series of senior debt securities may institute legal proceedings directly against Bunge to enforce the applicable guarantee without first proceeding against BLFC.
As a holding company, Bunge is dependent upon dividends, loans, or advances or other intercompany transfers of funds from its subsidiaries to meet its obligations, including its obligations under the guarantee. The ability of certain of its subsidiaries to pay dividends and make other payments to Bunge may be restricted by, among other things, applicable laws, as well as agreements to which those subsidiaries may be party. Therefore, the ability of Bunge to make payments with respect to the guarantee may be limited. The BLFC Notes effectively rank junior to all liabilities of Bunge's subsidiaries (other than BLFC). In the event of a bankruptcy, liquidation, or dissolution of a subsidiary (other than BLFC) and following payment of its liabilities, the subsidiary may not have sufficient assets remaining to make payments to Bunge as a shareholder or otherwise.
Credit Ratings—Bunge's debt ratings and outlook by major credit rating agencies at December 31, 2024 were as follows:
| Short-term Debt**(1)** | Long-term Debt | Outlook | |||||||||||||||
| Standard & Poor's | A-2 | BBB+ | CreditWatch Positive | ||||||||||||||
| Moody's | P-2 | Baa1 | Stable | ||||||||||||||
| Fitch | F-2 | BBB+ | Stable |
(1)Short-term debt rating applies only to the commercial paper program with BLFC as the issuer.
Following the announcement of the Viterra Acquisition and the related financing activity described above, 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. As well as with the issuance of Bunge Senior Notes in September 2024, S&P, Moody’s, and Fitch have taken the following actions:
-
S&P upgraded Bunge’s long-term debt credit rating to BBB+ on June 13, 2023 and further placed the outlook on CreditWatch Positive for an upgrade to A- on September 9, 2024;
-
S&P also assigned a preliminary A- issue-level rating to Bunge's newly issued 2024 Senior Notes on September 10, 2024;
-
Moody’s upgraded Bunge’s long-term debt credit rating to Baa1 on August 1, 2024 with stable outlook; and
-
Fitch upgraded Bunge’s long-term debt credit rating to BBB+ on September 5, 2024 with stable outlook.
We expect Standard and Poor's to resolve their CreditWatch Positive status 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.
Our debt agreements do not have any credit rating downgrade triggers that would accelerate maturity of our debt. However, credit rating downgrades would increase borrowing costs under our syndicated credit facilities (a credit rating upgrade, on the other hand, would reduce our borrowing cost) 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, 2024.
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 $1 billion. The Program terminates on May 17, 2031; however, each committed purchaser's commitment to purchase trade receivables under the Program will terminate on December 16, 2025, with a feature that permits us to request 364-day extensions.
Under the Program's pledge structure, Bunge Securitization B.V. ("BSBV"), a consolidated bankruptcy remote special purpose entity, transfers certain trade receivables to the Purchasers in exchange for a cash payment up to the aggregate size of the Program. Bunge also retains ownership of a population of unsold receivables. BSBV agrees to guaranty the collection of sold receivables and grants a lien to the administrative agent on all unsold receivables. Collections on unsold receivables and guarantee payments are classified as operating activities in our consolidated statements of cash flows. Bunge’s risk of loss following the sale of the trade receivables is substantially the same and limited to the assets of BSBV, primarily comprised of unsold receivables pledged to the administrative agent.
Interest Rate Swap Agreements
We may use interest rate swaps in hedge accounting relationships and record the swaps at fair value in the consolidated balance sheets with changes in fair value recorded contemporaneously in earnings. Additionally, the carrying amount of the associated debt is adjusted through earnings for changes in fair value due to changes in benchmark interest rates. See Note 16- Derivative Instruments and Hedging Activities to our consolidated financial statements.
Equity
Total equity is set forth in the following table:
| December 31, | ||||||||||||||
| (US$ in millions) | 2024 | 2023 | ||||||||||||
| Registered shares | $ | 1 | $ | 1 | ||||||||||
| Additional paid-in capital (1) | 5,325 | 5,900 | ||||||||||||
| Retained earnings | 12,838 | 12,077 | ||||||||||||
| Accumulated other comprehensive loss | (6,702) | (6,054) | ||||||||||||
| Treasury shares, at cost (2024—21,318,307 and 2023—16,109,804) (1) | (1,549) | (1,073) | ||||||||||||
| Total Bunge shareholders' equity | 9,913 | 10,851 | ||||||||||||
| Noncontrolling interests | 1,032 | 963 | ||||||||||||
| Total equity | $ | 10,945 | $ | 11,814 |
(1) In the fourth quarter of 2024, Bunge Global SA cancelled 6,146,930 shares held in treasury totaling $572 million.
Total Bunge shareholders' equity was $9,913 million at December 31, 2024 compared to $10,851 million at December 31, 2023. The decrease was primarily due to $1,100 million in repurchases of registered shares, as described in Note 22- Equity to our consolidated financial statements and in the Share repurchase program paragraph below*,* $648 million of loss in Other comprehensive loss and $373 million of declared dividends to shareholders, as described in Note 22- Equity, partially offset by $1,137 million of Net income attributable to Bunge shareholders.
Noncontrolling interests increased to $1,032 million at December 31, 2024 from $963 million at December 31, 2023 primarily due to $52 million of Net income attributable to noncontrolling interests and $53 million of contributions from noncontrolling interests, partially offset by $32 million of loss in Other comprehensive loss.
Share repurchase program - As noted in Note 22- Equity, on November 13, 2024, Bunge Global SA's Board approved the expansion of an existing program by an additional $500 million bringing total authorizations under the program since inception to $2.7 billion. The program continues to have an indefinite term. As of December 31, 2024, a total of 19,667,739 shares were repurchased under the program for $1.9 billion with an aggregate purchase authorization of approximately $800 million remaining outstanding for repurchases under the program. During the twelve months ended December 31, 2024, Bunge repurchased 12,150,763 shares for $1.1 billion.
Cash Flows
| Year ended December 31, | ||||||||||||||||||||
| (US$ in millions) | 2024 | 2023 | ||||||||||||||||||
| Cash provided by operating activities | $ | 1,900 | $ | 3,308 | ||||||||||||||||
| Cash used for investing activities | (1,114) | (1,009) | ||||||||||||||||||
| Cash used for financing activities | (90) | (856) | ||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 9 | 28 | ||||||||||||||||||
| Net increase in cash and cash equivalents and restricted cash | $ | 705 | $ | 1,471 |
Our cash flows from operations vary depending on, among other items, Net income and 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.
2024 Compared to 2023
For the year ended December 31, 2024, our cash and cash equivalents, restricted cash, and cash held for sale increased $705 million, compared to an increase of $1,471 million for the year ended December 31, 2023.
Operating: Cash provided by operating activities was $1,900 million for the year ended December 31, 2024, compared to $3,308 million for the year ended December 31, 2023, a decrease of $1,408 million. The decrease was primarily due to lower reported net income during the year ended December 31, 2024 compared to the year ended December 31, 2023 as discussed in
the Segment Overview & Results of Operations section above as well as an overall reduction to net changes in working capital driven by the drivers discussed in Working Capital section above.
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 (losses) gains - net. For the year ended December 31, 2024, we recorded a foreign currency loss on net debt of $174 million largely due to the weakening of the Brazilian real in the current year versus a foreign currency gain on net debt for the year ended December 31, 2023 of $281 million, which were included as adjustments to reconcile Net income to Cash provided by operating activities in the line item "Foreign exchange loss (gain) 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 $1,114 million for the year ended December 31, 2024 compared to $1,009 million for the year ended December 31, 2023, an increase of $105 million. The increase was primarily due to higher net payments for investments at Bunge Financial Services, higher spend on capital expenditures related to certain growth and productivity projects in North America, and lower proceeds from the disposal of businesses and property, plant and equipment during the year ended December 31, 2024, as compared to proceeds received on the sale of our Russian operations during the year ended December 31, 2023. These uses of cash were partially offset by proceeds from the sale of our investment in affiliate, BP Bunge Bioenergia, to BP.
Financing: Cash used for financing activities was $90 million for the year ended December 31, 2024 compared to $856 million for the year ended December 31, 2023, a decrease of $766 million. For the year ended December 31, 2024, we received additional net cash proceeds from short-term and long-term debt of $1,186 million as a result of the issuance of three tranches of Senior Notes for an aggregate principal amount of $2.0 billion, partially offset by the prepayment of a $750 million term loan that occurred in 2024, as described above, and repurchased an additional $500 million registered shares compared to the previous period.
Capital Expenditures
Our cash payments made for capital expenditures were $1,376 million and $1,122 million for the years ended December 31, 2024 and 2023, respectively. We intend to make capital expenditures in the range of $1.5 billion to $1.7 billion in 2025. Our priorities for 2025 are to maintain the cash generating capacity of our assets through non-discretionary projects, such as maintenance, safety and compliance, as well as discretionary investments in growth and productivity projects, focusing on our strategy to strengthen our oilseeds platform, increase participation in biofuels and plant-based proteins, and grow our value-added oils business. These discretionary and non-discretionary capital investments will also help us achieve certain of our environmental and sustainability related objectives. We intend to fund these capital expenditures primarily with cash flows from operations and cash on hand.
Off-Balance Sheet Arrangements
Guarantees and Indemnifications
Please refer to Note 20- Commitments and Contingencies to our consolidated financial statements included as part of this Annual Report on Form 10-K for details concerning our off-balance sheet arrangements related to guarantees and indemnifications.
Contractual Obligations
The following table summarizes our scheduled contractual obligations and their expected maturities at December 31, 2024, and the effect such obligations are expected to have on our liquidity and cash flows in the future periods indicated.
| Payments due by period | |||||||||||||||||
| (US$ in millions) | Total | 2025 | 2026 - 2027 | 2028 - 2029 | 2030 and thereafter | ||||||||||||
| Short-term debt | $ | 875 | $ | 875 | $ | — | $ | — | $ | — | |||||||
| Long-term debt, including current portion(1) | 5,663 | 690 | 1,627 | 1,464 | 1,882 | ||||||||||||
| Variable interest rate obligations | 149 | 33 | 71 | 30 | 15 | ||||||||||||
| Interest obligations on fixed rate debt | 898 | 169 | 297 | 205 | 227 | ||||||||||||
| Non-cancelable lease obligations(2) | 1,077 | 315 | 354 | 143 | 265 | ||||||||||||
| Capital commitments | 243 | 243 | — | — | — | ||||||||||||
| Freight supply agreements(3) | 138 | 138 | — | — | — | ||||||||||||
| Inventory purchase commitments | 188 | 182 | 3 | 2 | 1 | ||||||||||||
| Power supply purchase commitments | 77 | 28 | 27 | 9 | 13 | ||||||||||||
| Other commitments and obligations(4) | 669 | 310 | 191 | 90 | 78 | ||||||||||||
| Total contractual cash obligations(5) | $ | 9,977 | $ | 2,983 | $ | 2,570 | $ | 1,943 | $ | 2,481 |
(1)Includes components of long-term debt attributable to unamortized premiums of $32 million and excludes components of long-term debt attributable to fair value hedge accounting of $269 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 $57 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, 2024, Bunge had uncertain income tax liabilities of $75 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 $14 million to our defined benefit pension plans and $4 million to our postretirement benefit plans in 2025. Further, we expect approximately $508 million in benefit payments related to our defined benefit pension and postretirement benefit plans in 2025. The expected benefit payments in 2025 include $487 million related to the lump sum payments and transfer of all remaining benefits due to the future conversion of the buy-in contract to a buy-out arrangement for one of Bunge's defined benefit U.S. pension plans. See Note 18- Employee Benefit Plans for further information.
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 (losses) gains - 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, 2024). 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 a market multiples model based on guideline public companies; (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. Critical estimates in the determination of fair value under the market approach include, but are not limited to, determination of the guideline public companies and selection of the market multiples.
During the fourth quarter of 2024, we performed our annual impairment assessment using a discounted cash flow ("DCF") method from the income approach and a guideline public companies method ("GPC") from the market approach, giving equal emphasis to each. We determined equal emphasis was appropriate as the DCF method captured the growth and margin expectations specific to the reporting units; whereas the GPC method captured market-specific factors using a reasonably similar set of guideline public companies. The results of our annual impairment assessment determined that 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.
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 third quarter of 2024, certain of the above factors indicated an other than temporary decline in value of one of our minority investments in North America. 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 20- Commitments and Contingencies to our consolidated financial statements.
Indemnifications
We have provided certain indemnifications in connection with our divestitures. In some instances, we have recorded indemnification liabilities upon inception measured at fair value in accordance with ASC 460, Guarantees and ASC 450, Contingencies. The estimates to determine the fair value prioritize observable inputs in accordance with ASC 820, Fair Value Measurement. Our estimation techniques often employ probability weighting, assigning probabilities to various outcomes and weighting the associated costs accordingly, based on consultations with internal experts. Changes in these assumptions and estimates could impact the recorded liability. During the fourth quarter of 2024, in connection with the sale of our 50% interest in BP Bunge Bioenergia, we agreed to indemnify BP against future losses associated with certain legal claims as defined in the share purchase agreement. As a consequence, we recognized a liability of $95 million. Refer to Note 20- Commitments and Contingencies to our consolidated financial statements for further details.
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 2024, we increased valuation allowances by $5 million, primarily attributable to current year operations offset by currency movement in certain jurisdictions.
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, 2024, we had recorded uncertain tax positions of $75 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, 2024, the allowance for recoverable taxes was $25 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.
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