Basic earnings per share is computed by dividing net income available to Bunge common shareholders by the weighted-average number of common shares outstanding, excluding any dilutive effects of stock options, restricted stock unit awards, convertible preference shares and convertible notes during the reporting period. Diluted earnings per share is computed similar to basic earnings per share, except that the weighted-average number of common shares outstanding is increased to include additional shares from the assumed exercise of stock options, restricted stock unit awards and convertible securities and notes, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options, except those which are not dilutive, were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. In addition, Bunge accounts for the effects of convertible securities and convertible notes, using the if-converted method. Under this method, the convertible securities and convertible notes are assumed to be converted and the related dividend or interest expense, net of tax, is added back to earnings, if dilutive.

On the mandatory conversion date of December 1, 2010, each mandatory convertible preference share, then outstanding, automatically converted into 9.7596 of common shares. At any time prior to December 1, 2010, holders could elect to convert the mandatory convertible preference shares at the conversion rate of 8.2416, subject to certain additional anti-dilution adjustments (which represented 7,108,009 common shares prior to December 1, 2010). Each mandatory convertible preference share had a liquidation preference of $1,000 per share. The calculation of diluted earnings per common share for the year ended December 31, 2010 includes the weighted-average common shares that would be issuable upon conversion of the mandatory convertible preference shares, up to the mandatory conversion date of December 1, 2010, as they were dilutive. The calculation of diluted earnings per common share for the year ended December 31, 2008 includes the weighted-average common shares that would have been issuable upon conversion of the mandatory convertible preference shares as they were dilutive (see Note 23 of the notes to the consolidated financial statements). The calculation of diluted earnings per common share for the year ended December 31, 2009 does not include the weighted-average common shares that would be issuable upon conversion of the mandatory convertible preference shares as they were not dilutive.

In addition, Bunge has 6,900,000 convertible perpetual preference shares outstanding as of December 31, 2010 (see Note 23 of the notes to the consolidated financial statements). Each convertible preference share has an initial liquidation preference of $100 per share and each convertible preference share is convertible, at any time at the holder's option, initially into approximately 1.0938 common shares based on a conversion price of $91.4262 per convertible preference share, subject in each case to certain anti-dilution specified adjustments (which represents 7,547,220 common shares as of December 31, 2010). The calculation of diluted earnings per common share for the year ended December 31, 2009 does not include the weighted-average common shares that would be issuable upon conversion of the convertible perpetual preference shares as they were not dilutive. The calculations of diluted earnings per common share for the years ended December 31, 2010 and 2008 include the weighted-average common shares that would be issuable upon conversion of the convertible perpetual preference shares as they were dilutive.

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2010, 2009 and 2008.

	Year Ended December 31,

(US$ in millions, except for share data)	2010			2009			2008
Net income attributable to Bunge	$	2,354		$	361		$	1,064
Convertible preference share dividends		(67	)		(78	)		(78	)

Net income available to Bunge common shareholders	$	2,287		$	283		$	986

Weighted-average number of common shares outstanding:
Basic		141,191,136			126,448,071			121,527,580
Effect of dilutive shares:
—stock options and awards (1)		1,032,143			1,221,751			1,488,899
—convertible preference shares		14,051,535			—			14,574,787

Diluted		156,274,814			127,669,822			137,591,266

Earnings per common share:
Earnings to Bunge common shareholders—basic	$	16.20		$	2.24		$	8.11
Earnings to Bunge common shareholders—diluted	$	15.06		$	2.22		$	7.73

(1): The weighted-average common shares outstanding-diluted excludes approximately 3 million, 2 million and 1 million stock options and contingently issuable restricted stock units, which were not dilutive and not included in the computation of diluted earnings per share for 2010, 2009 and 2008, respectively.