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Bunge Reports Fourth Quarter 2006 Results

WHITE PLAINS, N.Y., Feb. 8 /PRNewswire-FirstCall/ -- Bunge Limited (NYSE:BG).

    * Financial Highlights

    (In millions, except per share data and percentages)

                        Quarter Ended    Percent       Year Ended      Percent
                     12/31/06  12/31/05   Change   12/31/06  12/31/05   Change
    Volumes
     (metric tons)      28.7      29.4     (2)%      114.9     117.2      (2)%
    Net sales         $7,683    $6,753     14%     $26,274   $24,377       8%
    Total segment
     operating profit
     (loss)(1)          $192      $(11)               $443      $456      (3)%
    Net income          $264      $149     77%        $521      $530      (2)%
    Earnings per share
     - diluted         $2.12     $1.25     70%       $4.28     $4.43      (3)%

Bunge's results included certain gains and charges that may be of interest to investors. For the quarter ended December 31, 2006, the net gains totaled $74 million, or $0.60 per share. For the year ended December 31, 2006, the net gains totaled $42 million, or $0.35 per share. In the quarter ended December 31, 2005, the net gains totaled $52 million, or $0.44 per share, and for the year ended December 31, 2005, the net gains totaled $141 million, or $1.17 per share. Additional information is provided in the attached schedule titled "Additional Financial Information."

Overview

Alberto Weisser, Bunge's Chairman and Chief Executive Officer stated: "Bunge finished 2006 on a promising note. Our team did an excellent job of delivering results and produced strong second half performances in all of our operating segments. We expect 2007 to be a year of improved earnings.

"Over the past several months we have seen clear signs of improvement in the Brazilian agribusiness and fertilizer markets. There are still some challenges, such as the strong real, but higher commodity prices, large new corn and soybean crops and continued government support have improved farm economics in the country and should translate into more crop sales and larger fertilizer purchases in 2007. Steps taken in late 2005 and early 2006 to restructure our Brazilian businesses, lower costs and enhance our foreign currency risk management should position Bunge to benefit from improving Brazilian market conditions.

"The emerging biofuels industry is creating higher demand for our core products and is materially influencing global supply and demand. Bunge is taking a focused approach to the biodiesel and corn ethanol industries. We are making minority investments in well-positioned assets and acting as a raw material and service supplier to biofuels producers. Our overall strategic focus remains on the agribusiness and food industries, where we see great opportunity driven by strong demand for our core products. To capitalize on this growth, we will continue to enhance the balance, integration and efficiency of our global network of assets.

"In 2007, we will expand capacity at our sunseed crushing plant in Martfu, Hungary to grow our presence in Eastern Europe, build a new wheat mill in northeastern Brazil to improve production efficiency and continue increasing our fertilizer mining and production operations to meet future growth in Brazilian agriculture. We will complete our two Canadian crushing and refining capacity expansion projects and increase our presence in the global sugar and sugar-based ethanol markets. Also, our oilseed processing facilities in Ukraine, Russia and Spain and our new grain and fertilizer terminals in the port of Santos, Brazil will come fully online during 2007, supplying real benefits to our business.

"Ours is a growth industry with compelling opportunities. We will invest to capitalize on them, while building a balanced, global business that enables us to weather challenging periods as they occur."

Fourth Quarter Results

Agribusiness

Results in the quarter improved when compared to the same period last year. Higher results in South America were driven by higher oilseed processing margins, which more than offset lower volume. Benefits from prior restructuring actions reduced the effects of a stronger Brazilian real on local currency operating costs when translated into U.S. dollars. The average real-U.S. dollar exchange rate strengthened 5% when compared to the fourth quarter of 2005. Results continued to be strong in North America. Despite significant cost reductions in South America, SG&A increased primarily due to a stronger real.

Fourth quarter 2005 results included $35 million of impairment charges related to the closure of two oilseed processing plants in Brazil and the impairment of one plant in India, and $10 million of restructuring charges related to operations in Brazil and Europe.

Fertilizer

Results in the quarter improved when compared to last year's poor performance. Higher margins in Bunge's retail and nutrients businesses were the primary drivers. Rising agricultural commodity prices and favorable weather conditions throughout most of Brazil resulted in increased late season fertilizer purchases by farmers. Improved risk management, which offset the impact of a stronger real on margins and costs, benefited results as well. SG&A for the quarter decreased due to lower bad debt, savings from cost reduction measures and a $6 million provision reversal due to a favorable court ruling relating to Brazilian social taxes. 2005 results included a $2 million restructuring charge.

Edible Oil Products

Results improved primarily due to increased volumes and margins in Brazil. Fourth quarter 2005 results included a $2 million restructuring charge related to operations in Brazil and Europe.

Milling Products

Strong results in the quarter were due to higher wheat milling margins resulting from rising international wheat prices. Bunge benefited from low raw material costs as it purchased much of its inventory prior to the rise in prices.

Financial Costs

Interest income increased primarily due to higher average levels of interest bearing accounts. Interest expense increased primarily due to higher borrowings, resulting from higher average operating working capital, and increases in short-term interest rates.

Foreign exchange gains in the fourth quarter of 2006 resulted from the effects of an appreciation of the Brazilian real and the European euro compared to the U.S. dollar on the net U.S. dollar-denominated monetary liability position of Bunge's Brazilian and European subsidiaries. Foreign exchange losses in the fourth quarter of 2005 resulted from the effects of the devaluation of the Brazilian real compared to the U.S. dollar on the net monetary liability position of Bunge's Brazilian subsidiaries.

Other Income (Expense) - Net

Other income and (expense) - net for 2006 primarily includes a gain on sale of land in Europe of $31 million.

Income Taxes

Bunge's income tax benefit for the year ended December 31, 2006 included a $67 million reduction in its deferred tax asset valuation allowances, a $14 million income tax charge relating to certain tax contingencies in Europe and a charge of $21 million relating to the reversal of certain tax benefits on U.S. foreign sales recorded from 2001 to 2005. Bunge's income tax benefit for the year ended December 31, 2005 reflected a $79 million reduction in its deferred tax valuation allowances and a $77 million tax benefit relating to a reduction in its deferred tax liability due to a favorable tax ruling with respect to the unremitted earnings of a foreign subsidiary holding company.

The decrease in the income tax expense, excluding the items noted above, was primarily due to a decline in income from operations before income tax in subsidiaries that are in tax jurisdictions with higher income tax rates. The effects of a legal restructuring completed in 2005 also contributed to the lower income tax expense.

Minority Interest

Minority interest expense increased in the fourth quarter of 2006 when compared to 2005 due to higher earnings at Fosfertil.

Equity in Earnings of Affiliates

Equity in earnings of affiliates for the fourth quarter of 2006 included a loss from the investment in Solae due to impairment and restructuring charges.

Cash Flow and Net Financial Debt(2)

Net financial debt and readily marketable inventories at December 31, 2006 increased $333 million, and $802 million, respectively, from December 31, 2005, primarily due to higher prices and volumes of commodity inventories. Net financial debt was reduced during the fourth quarter of 2006 by net proceeds of $677 million received from the November 2006 sale of convertible preference shares.

Cash flow used by operations was $289 million for the year ended December 31, 2006 compared to $382 million of cash flow provided by operations in the year ended December 31, 2005. Higher operating working capital, primarily due to increased prices and volumes of commodity inventories, contributed to the decline in cash flow from operations. Normally, when global supplies of agricultural commodities become more balanced with demand, commodity prices decrease resulting in lower working capital and improved operating cash flow.

Outlook

Bill Wells, Chief Financial Officer, stated, "Following our strong second half in 2006, we are looking forward to a much better year in 2007. Though it is still early, crops in Brazil and Argentina are forecasted to be at or near record levels. High global commodity prices should strengthen farm economics, prompt farmer selling, and encourage Brazilian farmers to purchase higher levels of crop inputs such as fertilizers. Industry expectations are for retail volumes in the Brazilian fertilizer market to be up four percent. New oilseed processing assets coming on line will benefit results in Europe. North America should have a good year, but a tough comparison to strong results in 2006.

    "Our 2007 guidance is as follows:

    * Depreciation, Depletion and Amortization: $370 million to $390 million

    * Capital Expenditures (net of asset dispositions): $570 million to $590
      million, of which $290 million to $310 million are sustaining,
      maintenance, safety and environmental capital expenditures

    * Tax Rate: 18% to 22%

    * Joint Venture Earnings: $20 million to $30 million.

    "Our guidance assumes the following:

    * Stable currencies

    * Normal crops

    * Stable international fertilizer prices

    * Brazilian retail fertilizer market volume growth of 4% when compared to
      2006

"Based on these assumptions, our 2007 net income guidance is $590 million to $610 million, representing $4.56 to $4.71 per share, and includes an estimated $30 million, or $0.23 per share, during the year related to a gain on sale of assets. This fully diluted per share guidance is based on an estimated weighted average of 129.5 million shares outstanding, which includes assumed dilution relating to our November 2006 issuance of convertible preference shares."

Background Information, Conference Call and Webcast Details

Supplemental information pertaining to the fourth quarter can be found in the 'Investor Information' section of our Web site, www.Bunge.com, under 'Investor Presentations'.

Bunge Limited's management will host a conference call at 10:00 a.m. EST on February 8 to discuss the company's results.

To listen to the conference call, please dial (800) 810-0924. If you are located outside of the United States, dial (913) 981-4900. Please dial in five to 10 minutes before the scheduled start time. When prompted, enter passcode number 9156254. The conference call will also be available live on the company's Web site at www.Bunge.com.

To access the webcast, click the "News and Information" link on the Bunge homepage then select "Webcasts and Upcoming Events." Click the link for the "Q4 2006 Bunge Limited Conference Call," and follow the prompts to join the call. Please go to the Web site at least 15 minutes prior to the call to register and to download and install any necessary audio software.

For those who cannot listen to the live broadcast, a replay of the call will be available beginning at 1:00 p.m. EST on February 8, 2007 and continuing through 1:00 p.m. EST on March 8, 2007. To listen to the replay, please dial (888) 203-1112, or, if located outside of the United States, dial (719) 457-0820. When prompted, enter passcode number 9156254. A rebroadcast of the conference call will also be available on the company's Web site. To locate the rebroadcast on the Web site, click the "News and Information" link on the Bunge homepage then select "Audio Archives" from the left-hand menu. Select the link for the "Q4 2006 Bunge Limited Conference Call." Follow the prompts to access the replay.

About Bunge Limited

Bunge Limited (NYSE:BG) is a leading global agribusiness and food company founded in 1818 and headquartered in White Plains, New York. Bunge's over 22,000 employees in over 30 countries enhance lives by improving the global agribusiness and food production chain. The company supplies fertilizer to farmers in South America, originates, transports and processes oilseeds, grains and other agricultural commodities worldwide, produces food products for commercial customers and consumers and supplies raw materials and services to the biofuels industry.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," "will," "expect," "anticipate," "believe," "intend," "estimate," "continue" and similar expressions. These forward- looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these forward- looking statements. The following important factors, among others, could affect our business and financial performance: our ability to complete, integrate and benefit from acquisitions, divestitures, joint ventures and strategic alliances; estimated demand for the commodities and other products that we sell and use in our business; industry conditions, including the cyclicality of the agribusiness industry and unpredictability of the weather; agricultural, economic and political conditions in the primary markets where we operate; and other economic, business, competitive and/or regulatory factors affecting our business generally. The forward-looking statements included in this release are made only as of the date of this release, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

    (1) Total segment operating profit (loss) is the consolidated segment
        operating profit (loss) of Bunge's segments.  Total segment operating
        profit (loss) is a non-GAAP measure and is not intended to replace
        income (loss) from operations before income tax, the most directly
        comparable GAAP measure.  The information required by Regulation G
        under the Securities Exchange Act of 1934, including reconciliation to
        income (loss) from operations before income tax, is included in the
        tables attached to this press release.

    (2) Net financial debt is a non-GAAP financial measure and is not
        intended to replace total debt.  A definition of net financial debt
        and the information required by Regulation G under the Securities
        Exchange Act of 1934, including a reconciliation of net financial debt
        to total debt, the most directly comparable GAAP measure, is included
        in the tables attached to this press release.



                       Additional Financial Information

The following table provides a summary of certain gains and charges that may be of interest to investors. The table includes a description of these items and their effect on total segment operating profit (loss), income (loss) from operations before income tax, net income and earnings per share for the quarter and twelve months ended December 31, 2006 and 2005.

    (In millions, except
     per share data)             Total       Income
                                Segment   (Loss) From
                               Operating   Operations               Earnings
                                 Profit      Before                 Per Share
                                 (Loss)    Income Tax  Net Income    Diluted
    Quarter Ended December 31: 2006  2005  2006  2005  2006  2005  2006   2005

    Reversal of social
     contribution/transactional
     tax provision (1)          $6    $-    $6    $-    $2    $-  $0.02    $-
    Impairment and
     restructuring charges
     in affiliates (2)           -     -     -     -   (13)    -  (0.10)    -
    Impairment and
     restructuring charges (3)   -   (49)    -   (49)    -   (33)     - (0.27)
    Reversal of income tax
     valuation allowances
     due to settlement
     of tax audits (4)           -     -     -     -    58     -   0.47     -
    Incremental share-based
     compensation expense (5)   (3)    -    (3)    -    (2)    - (0.02)     -
    Reversal of deferred
     tax liability on
     unremitted foreign
     earnings (6)                -     -     -     -     -    77     -   0.64
    Gain on sale of assets       -     -    31     8    29     8  0.23   0.07
        Total                   $3  $(49)  $34  $(41)  $74   $52 $0.60  $0.44



                 Additional Financial Information (Continued)

    (In millions, except
     per share data)             Total       Income
                                Segment   (Loss) From
                               Operating   Operations               Earnings
                                 Profit      Before                 Per Share
                                 (Loss)    Income Tax  Net Income    Diluted
    Twelve Months Ended
    December 31:               2006  2005  2006  2005  2006 2005  2006    2005

    Reversal of social
     contribution/transactional
     tax provision (1)         $18   $14   $18   $14    $8  $10  $0.07  $0.08
    Impairment and
     restructuring charges (3) (24)  (49)  (24)  (49)  (16) (33) (0.13) (0.27)
    Litigation settlement (7)    6     -     6     -     4    -   0.03      -
    Incremental share-based
     compensation expense (5)  (10)    -   (10)    -    (7)   -  (0.06)     -
    Reversal of recoverable
     tax valuation
     allowance (8)               -    27     -    27     -   19      -   0.16
    Value added tax credits (9)  -    28     -    28     -   17      -   0.14
    Impairment and
     restructuring charges
     in affiliates (2)           -     -     -     -   (13)   -  (0.11)     -
    Reversal of income tax
     valuation allowance due
     to settlement of
     tax audits (4)              -     -     -     -    58    -   0.48      -
    Tax benefit reversal on
     U.S. foreign sales (10)     -     -     -     -   (21)   -  (0.17)     -
    Reversal of income tax
     valuation allowance (11)    -     -     -     -     -   38      -   0.31
    Reversal of deferred tax
     liability on unremitted
     foreign earnings (6)        -     -     -     -     -   77      -   0.64
    Gain on sale of assets       -     -    31    15    29   13   0.24   0.11
        Total                 $(10)  $20   $21   $35   $42 $141  $0.35  $1.17

    (1)  In the quarter and year ended December 31, 2006, Bunge received a
         favorable final ruling from the Brazilian tax court related to social
         contribution taxes improperly levied in prior years.  As a result,
         Bunge's Brazilian fertilizer subsidiaries affected by this ruling
         reversed their provision related to this tax.  The effect on net
         income is net of minority interest.  In the year ended December 31,
         2005, represents the reversal of a provision due to a favorable South
         American tax ruling in the agribusiness segment.

    (2)  In the quarter and year ended December 31, 2006, Bunge's equity in
         earnings of Solae, an unconsolidated joint venture, included
         impairment and restructuring charges, net of income tax benefit of
         $20 million. In addition, a tax credit of $7 million was included in
         income tax benefit.

    (3)  Impairment and restructuring charges of $24 million in the year ended
         December 31, 2006 consisted of $20 million in the agribusiness
         segment, $2 million in the fertilizer segment and $2 million in the
         edible oil products segment.  Impairment and restructuring charges in
         the quarter and year ended December 31, 2005 of $49 million consisted
         of $45 million in the agribusiness segment, $2 in the fertilizer
         segment and $2 million in the edible oil products segment.

    (4)  In the quarter and year ended December 31, 2006, Bunge recorded a $58
         million net credit, which consists of a $72 million income tax
         valuation allowance reversal due to a favorable settlement of tax
         audits offset in part by a $14 million income tax contingency in
         Europe.

    (5)  In 2006, Bunge adopted Financial Accounting Standards No. 123R -
         Share Based Payments (SFAS No. 123R) and began expensing stock
         options.  Prior to the adoption of SFAS No. 123R, Bunge accounted for
         stock-based compensation using the intrinsic value method under
         Accounting Principles Board (APB) Opinion No. 25, Accounting for
         Stock Issued to Employees (APB 25), and Financial Accounting
         Standards Board (FASB) Interpretation No. 28, Accounting for Stock
         Appreciation Rights and Other Variable Stock Option or Award Plans
         (FIN 28) with pro forma disclosure in accordance with the provisions
         of SFAS No. 123, Accounting for Stock-Based Compensation.

    (6)  In the quarter and year ended December 31, 2005, Bunge received a
         favorable U.S. tax ruling with respect to the unremitted earnings of
         a foreign subsidiary holding company.  As a result, Bunge liquidated
         this foreign subsidiary, reduced the associated deferred tax
         liability and recognized a $77 million one-time, non-cash tax
         benefit.

    (7)  In the year ended December 31, 2006, Bunge received a payment of $6
         million in partial settlement of its litigation in Brazil against
         Centrais Eletricias Brasileiras S.A. (Eletrobras), of which
         $4 million was recognized in the agribusiness segment and $2 million
         in the edible oil products segment.

    (8)  Represents the reversal of the remaining Argentine recoverable tax
         valuation allowance in the agribusiness segment.

    (9)  Represents value-added tax credits related to taxes paid in prior
         periods in the fertilizer segment.

    (10) In the year ended December 31, 2006, Bunge recorded a charge of $21
         million to income tax expense, which represented a correction of
         certain tax benefits recognized from 2001 to 2005 related to income
         tax incentives under the Foreign Sales Corporation/Extraterritorial
         Income Exclusion provisions of the U.S. Internal Revenue Code.

    (11) In the year ended December 31, 2005, represents the reduction of
         deferred tax assets stemming from a legal restructuring initiated
         with the 2004 buyout of the minority interests of Bunge Brasil S.A.



    CONSOLIDATED STATEMENTS OF INCOME
    (In millions, except per share data and percentages)
    (Unaudited)

                             Quarter Ended          Twelve Months Ended
                              December 31,    Percent    December 31,  Percent
                            2006      2005    Change   2006      2005   Change

    Net sales (Note 1)     $7,683    $6,753     14%  $26,274   $24,377      8%
    Cost of goods sold
     (Note 1)              (7,169)   (6,401)    12%  (24,703)  (22,806)     8%

    Gross profit              514       352     46%    1,571     1,571      -%
    Selling, general and
     administrative expenses (278)     (287)    (3)%    (978)     (956)     2%
    Interest income            32        26     23%      119       104     14%
    Interest expense          (68)      (62)    10%     (211)     (192)    10%
    Interest expense on
     readily marketable
     inventories              (18)       (6)             (69)      (39)    77%
    Foreign exchange
     gain (loss)               24       (32)              59       (22)
    Other income (expense)
     -net (Note 2)             24         6               31        22

    Income (loss) from
     operations before
     income tax               230        (3)             522       488      7%
    Income tax benefit         69       160               36        82

    Income from operations
     after income tax         299       157     90%      558       570    (2)%
    Minority interest         (22)      (12)    83%      (60)      (71)  (15)%
    Equity in earnings of
     affiliates (Note 2)      (13)        4               23        31   (26)%

    Net income                264       149     77%      521       530    (2)%

    Preference share
     dividends                (4)         -               (4)        -
    Net income available to
     common shareholders    $260       $149             $517      $530

    Earnings per common
     share - diluted
     (Note 3):             $2.12      $1.25     70%    $4.28     $4.43    (3)%

    Weighted-average
     common shares
     outstanding-diluted
     (Note 3)        124,409,362 120,773,361     120,849,357 120,853,928

    Note 1: Bunge has corrected its classification of interest on secured
            advances to suppliers by reclassifying amounts from cost of goods
            sold to net sales for the periods presented. The effect of this
            reclassification increased cost of goods sold and net sales by $16
            million and $27 million in the quarter ended December 31, 2006 and
            2005, respectively, and $78 million and $102 million for the year
            ended December 31, 2006 and 2005, respectively. This change does
            not affect gross profit, segment operating profit (loss) or net
            income.

    Note 2: In 2006, Bunge reclassified certain earnings on investments in
            affiliates from other income (expense) - net to equity in earnings
            of affiliates.  As a result, amounts for the quarter and twelve
            months ended December 31, 2005 have been reclassified to conform
            to the quarter and twelve months ended December 31, 2006
            presentation.

    Note 3: Weighted-average common shares outstanding-diluted for the quarter
            ended December 31, 2006 includes the dilutive effect of 3,310,388
            weighted average common shares that would be obtainable upon
            conversion of Bunge's convertible preference shares and for the
            year ended December 31, 2006 excludes 834,399 weighted average
            common shares as the inclusion would be anti-dilutive.  Weighted-
            average common shares outstanding-diluted for the quarter and year
            ended December 31, 2005 includes 3,737,167 and 6,727,852,
            respectively, of weighted average common shares that were issuable
            upon conversion of the 3.75% convertible notes due 2022
            (convertible notes) through November 22, 2005, the date of
            redemption.  In addition, the numerator for the calculation of
            earnings per common share-diluted for the quarter ended and year
            ended December 31, 2005 was increased by $2 million and $5
            million, respectively, to reflect interest expense related to the
            convertible notes.



    CONSOLIDATED SEGMENT INFORMATION
    (In millions, except volumes and percentages)
    (Unaudited) (Note 1)

Set forth below is a summary of certain items in our consolidated statements of income and volumes by reportable segment.

                                                       Twelve Months
                            Quarter Ended                  Ended
                             December 31,    Percent    December 31,   Percent
                           2006      2005     Change   2006      2005   Change
    Volumes (in thousands
     of metric tons):
    Agribusiness          22,676    23,596     (4)%   94,993    97,560    (3)%
    Fertilizer             3,921     3,697      6%    11,578    11,478     1%
    Edible oil products    1,196     1,117      7%     4,451     4,267     4%
    Milling products         933       995     (6)%    3,895     3,890     -%
    Total                 28,726    29,405     (2)%  114,917   117,195    (2)%

    Net sales:
    Agribusiness (Note 2) $5,516    $4,686     18%   $19,106   $17,459     9%
    Fertilizer               918       894      3%     2,602     2,674    (3)%
    Edible oil products      998       945      6%     3,601     3,385     6%
    Milling products         251       228     10%       965       859    12%
        Total             $7,683    $6,753     14%   $26,274   $24,377     8%

    Gross profit:
    Agribusiness            $267      $174     53%     $780      $821     (5)%
    Fertilizer               125        67     87%      326       341     (4)%
    Edible oil products       82        80      3%      327       284     15%
    Milling products          40        31     29%      138       125     10%
        Total               $514      $352     46%   $1,571    $1,571      -%

    Selling, general and
     administrative expenses:
    Agribusiness           $(150)    $(134)    12%    $(506)    $(456)    11%
    Fertilizer               (49)      (72)   (32)%    (190)     (229)   (17)%
    Edible oil products      (61)      (64)    (5)%    (217)     (215)     1%
    Milling products         (18)      (17)     6%      (65)      (56)    16%
        Total              $(278)    $(287)    (3)%   $(978)    $(956)     2%

    Foreign exchange
     gain (loss):
    Agribusiness              $8       $(6)            $(12)      $29
    Fertilizer                 9       (27)              47       (47)
    Edible oil products        3        (1)               5         -
    Milling products           -         -                -        (1)
        Total                $20      $(34)             $40      $(19)

    Interest income:
    Agribusiness              $7        $2    250%      $27       $21     29%
    Fertilizer                14        19    (26)%      58        57      2%
    Edible oil products        -         -      -%        2         3    (33)%
    Milling products           1         1      -%        3         2     50%
        Total                $22       $22      -%      $90       $83      8%

    Interest expense:
    Agribusiness            $(64)     $(40)    60%    $(203)    $(140)    45%
    Fertilizer               (11)      (12)    (8)%     (39)      (41)    (5)%
    Edible oil products       (9)       (9)     -%      (31)      (35)   (11)%
    Milling products          (2)       (3)   (33)%      (7)       (7)     -%
        Total               $(86)     $(64)    34%    $(280)    $(223)    26%

    Segment operating
     profit (loss):
    Agribusiness             $68       $(4)             $86      $275    (69)%
    Fertilizer                88       (25)             202        81    149%
    Edible oil products       15         6    150%       86        37    132%
    Milling products          21        12     75%       69        63     10%
        Total (Note 3)      $192      $(11)            $443      $456     (3)%

    Income (loss) from
     operations before
     income tax:
      Segment operating
       profit (loss)        $192      $(11)            $443      $456
      Unallocated income
       - net (Note 4)         38         8               79        32
    Income (loss) from
     operations before
     income tax             $230       $(3)            $522      $488

    Depreciation, depletion
     and amortization:
    Agribusiness             $35       $32      9%     $126      $110     15%
    Fertilizer                33        28     18%      130       104     25%
    Edible oil products       13        13      -%       53        50      6%
    Milling products           4         4      -%       15        14      7%
        Total                $85       $77     10%     $324      $278     17%

    Note 1: In 2006, Bunge reclassified certain product lines in its
            agribusiness segment to its edible oil products segment.  As a
            result, amounts for the quarter and year ended December 31, 2005
            have been reclassified to conform to the quarter and year ended
            December 31, 2006 presentation.

    Note 2: Bunge has corrected its classification of interest on secured
            advances to suppliers by reclassifying amounts from cost of goods
            sold to net sales. The effect of this reclassification increased
            cost of goods sold and net sales by $16 million and $27 million in
            the quarter ended December 31, 2006 and 2005, respectively, and
            $78 million and $102 million for the year ended December 31, 2006
            and 2005, respectively. This change does not affect gross profit,
            segment operating profit (loss) or net income.

    Note 3: Total segment operating profit (loss) is the consolidated segment
            operating profit (loss) of all of Bunge's operating segments.
            Total segment operating profit (loss) is a non-GAAP measure and is
            not intended to replace income (loss) from operations before
            income tax, the most directly comparable GAAP measure.  The
            information required by Regulation G under the Securities Exchange
            Act of 1934, including the reconciliation to income (loss) from
            operations before income tax, is included under the caption
            "Reconciliation of Non-GAAP Measures."

    Note 4: Includes interest income, interest expense and foreign exchange
            gains and losses and other income and expenses not directly
            attributable to Bunge's operating segments.



    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
                                                  December 31,   December 31,
                                                        2006           2005
                                   ASSETS
    Current assets:
      Cash and cash equivalents                         $365           $354
      Trade accounts receivable                        1,879          1,702
      Inventories                                      3,684          2,769
      Deferred income taxes                              149            102
      Other current assets                             2,316          1,637
    Total current assets                               8,393          6,564
    Property, plant and equipment, net                 3,446          2,900
    Goodwill                                             236            176
    Other intangible assets, net                          99            132
    Investments in affiliates                            649            585
    Deferred income taxes                                714            462
    Other non-current assets                             810            627
    Total assets                                     $14,347        $11,446

                     LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Short-term debt                                   $454           $411
      Current portion of long-term debt                  156            178
      Trade accounts payable                           2,328          1,803
      Deferred income taxes                               54             38
      Other current liabilities                        1,523          1,187
    Total current liabilities                          4,515          3,617
    Long-term debt                                     2,874          2,557
    Deferred income taxes                                180            145
    Other non-current liabilities                        700            576
    Minority interest in subsidiaries                    410            325
    Shareholders' equity                               5,668          4,226
    Total liabilities and shareholders' equity       $14,347        $11,446



    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)

                                                          Twelve Months Ended
                                                               December 31,
                                                          2006           2005
    OPERATING ACTIVITIES
    Net income                                            $521           $530
    Adjustments to reconcile net income to cash
     (used for) provided by operating activities:
      Foreign exchange gain on debt                       (175)          (112)
      Impairment of assets                                  20             35
      Bad debt expense                                      41             40
      Depreciation, depletion and amortization             324            278
      Increase (decrease) in the allowance
       for recoverable taxes                                 5            (27)
      Deferred income taxes                               (191)          (238)
      Gain on sale of assets                               (36)           (13)
      Minority interest                                     60             71
      Equity in earnings of affiliates                     (23)           (31)
    Changes in operating assets and liabilities,
     excluding the effects of acquisitions:
      Trade accounts receivable                            (69)           270
      Inventories                                         (729)           (11)
      Prepaid commodity purchase contracts                 (88)           (41)
      Advances to suppliers                                256            135
      Trade accounts payable                               365           (337)
      Unrealized net (gain) loss on derivative contracts  (184)            81
      Margin deposits                                      (85)            (9)
      Other - net                                         (301)          (239)
    Cash (used for) provided by operating activities      (289)           382

    INVESTING ACTIVITIES
    Payments made for capital expenditures                (503)          (522)
    Investments in affiliates                              (91)           (18)
    Acquisitions of businesses and other intangible assets (74)           (50)
    Return of capital from affiliate                        18             38
    Related party (loans) repayments                       (21)            13
    Proceeds from sale of investment                        11              -
    Proceeds from disposal of property, plant and equipment 49             59
    Cash used for investing activities                    (611)          (480)

    FINANCING ACTIVITIES
    Net change in short-term debt                           11           (130)
    Proceeds from long-term debt                           488          1,210
    Repayments of long-term debt                          (200)          (952)
    Proceeds from sale of common shares                     16             13
    Proceeds from sale of preference shares                677              -
    Dividends paid to shareholders                         (74)           (63)
    Dividends paid to minority interest                    (27)           (57)
    Cash provided by financing activities                  891             21
    Effect of exchange rate changes on cash
     and cash equivalents                                   20             (1)

    Net increase (decrease) in cash and cash equivalents    11            (78)
    Cash and cash equivalents, beginning of period         354            432
    Cash and cash equivalents, end of period              $365           $354


    Reconciliation of Non-GAAP Measures

This earnings release contains total segment operating profit (loss), net financial debt and net financial debt less readily marketable inventories, which are "non-GAAP financial measures" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, Bunge has reconciled these non-GAAP financial measures to the most directly comparable U.S. GAAP measures.

Total Segment Operating Profit (Loss)

Total segment operating profit (loss), which is the consolidated segment operating profit (loss) of all of Bunge's operating segments, is Bunge's consolidated income (loss) from operations before income tax that includes interest income of each segment and an allocated portion of the foreign exchange gains and losses and of interest expense relating to debt financing operating working capital, including readily marketable inventories.

Total segment operating profit (loss) is a non-GAAP financial measure and is not intended to replace income (loss) from operations before income tax, the most directly comparable GAAP financial measure. Total segment operating profit (loss) is a key performance measurement used by Bunge's management to evaluate whether operating activities cover the financing costs of its business. Bunge believes total segment operating profit (loss) is a more complete measure of its operating profitability, since it allocates foreign exchange gains and losses and the cost of debt financing working capital to the appropriate operating segments. Additionally, Bunge believes total segment operating profit (loss) assists investors by allowing them to evaluate changes in the operating results of its portfolio of businesses before non- operating factors that affect net income. Total segment operating profit (loss) is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to income (loss) from operations before income tax or any other measure of consolidated operating results under U.S. GAAP.

Below is a reconciliation of income (loss) from operations before income tax to total segment operating profit (loss):

                                           Quarter Ended      Twelve Months
                                            December 31,    Ended December 31,
    (In millions)                           2006    2005      2006      2005
    Income (loss) from operations
     before income tax                      $230     $(3)     $522      $488
    Unallocated income - net (1)             (38)     (8)      (79)      (32)
    Total segment operating profit (loss)   $192    $(11)     $443      $456

    (1) Includes interest income, interest expense and foreign exchange gains
        and losses and other income and expenses not directly attributable to
        Bunge's operating segments.

    Net Financial Debt

Net financial debt is the sum of short-term debt, current maturities of long-term debt and long-term debt, less cash and cash equivalents and marketable securities. Net financial debt is presented because management believes it represents a meaningful measure of Bunge's leverage capacity and solvency. Net financial debt is not a measure of solvency under U.S. GAAP and should not be considered as an alternative to total debt as a measure of solvency.

Net financial debt less readily marketable inventories (RMI), or net financial debt less RMI, is the sum of short-term debt, current maturities of long-term debt and long-term debt, less cash and cash equivalents, marketable securities and readily marketable inventories. Net financial debt less RMI is presented because management believes it represents a more complete picture of Bunge's leverage capacity and solvency since it adjusts for readily marketable inventories. Readily marketable inventories are agricultural inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. Net financial debt less RMI is not a measure of leverage capacity and solvency under U.S. GAAP and should not be considered as an alternative to total debt as a measure of solvency.

Below is a reconciliation of total long-term and short-term debt to net financial debt and to net financial debt less readily marketable inventories:


                                                   December 31,   December 31,
    (In millions)                                       2006           2005

    Short-term debt                                     $454           $411
    Long-term debt, including current portion          3,030          2,735
    Total debt                                         3,484          3,146
    Less:
      Cash and cash equivalents                          365            354
      Marketable securities                                3              9
    Net financial debt                                 3,116          2,783
    Less: Readily marketable inventories               2,336          1,534
    Net financial debt less readily
     marketable inventories                             $780         $1,249

Source: Bunge Limited

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