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Operating Segments and Geographic Areas | 12 Months Ended
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Dec. 31, 2011
Operating Segments and Geographic Areas |
Operating Segments and Geographic Areas |
27. Operating Segments and Geographic Areas Sugar and Bioenergy segment—In the first quarter of 2010, Bunge began reporting the results of its sugar and bioenergy businesses as a reportable segment. Prior to 2010, sugar and bioenergy results and assets were included in the agribusiness segment. Accordingly, amounts for 2009 have been reclassified to conform to the current segment presentation. As a result, Bunge has five reportable segments—agribusiness, sugar and bioenergy, edible oil products, milling products and fertilizer—which are organized based upon similar economic characteristics and are similar in nature of products and services offered, the nature of production processes, the type and class of customer and distribution methods. The agribusiness segment is characterized by both inputs and outputs being agricultural commodities and thus high volume and low margin. The sugar and bioenergy segment involves sugarcane growing and milling in Brazil, sugar merchandising in various countries, as well as sugarcane-based ethanol production and corn-based ethanol investments and related activities. The edible oil products segment involves the manufacturing and marketing of products derived from vegetable oils. The milling products segment involves the manufacturing and marketing of products derived primarily from wheat and corn. Following the completion of the sale of Bunge's Brazilian fertilizer nutrients assets in May 2010, the activities of the fertilizer segment include its fertilizer distribution business in Brazil as well as its operations in Argentina and the United States (see Note 3). Additionally, Bunge has retained its 50% interest in its fertilizer joint venture in Morocco. The "Unallocated" column in the following table contains the reconciliation between the totals for reportable segments and Bunge consolidated totals, which consist primarily of corporate items not allocated to the operating segments and inter-segment eliminations. Transfers between the segments are generally valued at market. The revenues generated from these transfers are shown in the following table as "Inter-segment revenues segments or inter-segment eliminations."
(US$ in millions) |  | Agribusiness |  | Sugar and Bioenergy |  | Edible Oil Products |  | Milling Products |  | Fertilizer |  | Unallocated |  | Total |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales to external customers |  | $ | 38,909 |  | $ | 5,842 |  | $ | 8,839 |  | $ | 2,006 |  | $ | 3,147 |  | $ | — |  | $ | 58,743 |
Inter-segment revenues |  |  | 4,965 |  |  | 13 |  |  | 86 |  |  | 50 |  |  | 57 |  |  | (5,171 | ) |  | — |
Gross profit (1) |  |  | 1,731 |  |  | 149 |  |  | 462 |  |  | 234 |  |  | 152 |  |  | — |  |  | 2,728 |
Foreign exchange gain (loss) |  |  | (16 | ) |  | (4 | ) |  | 3 |  |  | — |  |  | (2 | ) |  | — |  |  | (19 | )
Equity in earnings of affiliates |  |  | 33 |  |  | 2 |  |  | — |  |  | 5 |  |  | 4 |  |  | — |  |  | 44 |
Noncontrolling interest (2) |  |  | (22 | ) |  | (2 | ) |  | (6 | ) |  | — |  |  | — |  |  | 32 |  |  | 2 |
Other income (expense)-net |  |  | (7 | ) |  | 2 |  |  | 3 |  |  | (3 | ) |  | (11 | ) |  | — |  |  | (16 | )
Segment EBIT (3) |  |  | 934 |  |  | (20 | ) |  | 137 |  |  | 104 |  |  | (1 | ) |  | — |  |  | 1,154 |
Depreciation, depletion and amortization expense |  |  | (196 | ) |  | (171 | ) |  | (87 | ) |  | (27 | ) |  | (45 | ) |  | — |  |  | (526 | )
Investments in affiliates |  |  | 506 |  |  | 18 |  |  | — |  |  | 14 |  |  | 62 |  |  | — |  |  | 600 |
Total assets |  |  | 13,993 |  |  | 3,805 |  |  | 2,445 |  |  | 715 |  |  | 2,317 |  |  | — |  |  | 23,275 |
Capital expenditures |  |  | 494 |  |  | 376 |  |  | 145 |  |  | 25 |  |  | 56 |  |  | 29 |  |  | 1,125 |
2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales to external customers |  | $ | 30,138 |  | $ | 4,455 |  | $ | 6,783 |  | $ | 1,605 |  | $ | 2,726 |  | $ | — |  | $ | 45,707 |
Inter-segment revenues |  |  | 3,902 |  |  | 24 |  |  | 96 |  |  | 41 |  |  | 115 |  |  | (4,178 | ) |  | — |
Gross profit (1) |  |  | 1,660 |  |  | 101 |  |  | 427 |  |  | 168 |  |  | 155 |  |  | — |  |  | 2,511 |
Foreign exchange gain (loss) |  |  | (4 | ) |  | 30 |  |  | — |  |  | (1 | ) |  | (23 | ) |  | — |  |  | 2 |
Equity in earnings of affiliates |  |  | 18 |  |  | (6 | ) |  | — |  |  | 3 |  |  | 12 |  |  | — |  |  | 27 |
Noncontrolling interest (2) |  |  | (47 | ) |  | 9 |  |  | (5 | ) |  | — |  |  | (35 | ) |  | 44 |  |  | (34 | )
Other income (expense)-net |  |  | 2 |  |  | (8 | ) |  | (10 | ) |  | 5 |  |  | (15 | ) |  | — |  |  | (26 | )
Segment EBIT (3) |  |  | 840 |  |  | (13 | ) |  | 80 |  |  | 67 |  |  | 2,344 |  |  | (90 | ) |  | 3,228 |
Depreciation, depletion and amortization expense |  |  | (179 | ) |  | (116 | ) |  | (78 | ) |  | (27 | ) |  | (43 | ) |  | — |  |  | (443 | )
Investments in affiliates |  |  | 509 |  |  | 20 |  |  | 15 |  |  | 13 |  |  | 52 |  |  | — |  |  | 609 |
Total assets |  |  | 16,100 |  |  | 4,679 |  |  | 2,243 |  |  | 771 |  |  | 2,208 |  |  | — |  |  | 26,001 |
Capital expenditures |  |  | 409 |  |  | 365 |  |  | 66 |  |  | 23 |  |  | 182 |  |  | 27 |  |  | 1,072 |
2009 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales to external customers |  | $ | 27,934 |  | $ | 2,577 |  | $ | 6,184 |  | $ | 1,527 |  | $ | 3,704 |  | $ | — |  | $ | 41,926 |
Inter-segment revenues |  |  | 3,462 |  |  | 77 |  |  | 131 |  |  | 17 |  |  | 18 |  |  | (3,705 | ) |  | — |
Gross profit (loss) (1) |  |  | 1,330 |  |  | 49 |  |  | 412 |  |  | 152 |  |  | (739 | ) |  | — |  |  | 1,204 |
Foreign exchange gain (loss) |  |  | 216 |  |  | 2 |  |  | (4 | ) |  | (1 | ) |  | 256 |  |  | — |  |  | 469 |
Equity in earnings of affiliates |  |  | 15 |  |  | (12 | ) |  | 86 |  |  | 4 |  |  | (13 | ) |  | — |  |  | 80 |
Noncontrolling interest (2) |  |  | (26 | ) |  | 6 |  |  | (10 | ) |  | — |  |  | 87 |  |  | (31 | ) |  | 26 |
Other income (expense)-net |  |  | (4 | ) |  | 2 |  |  | (7 | ) |  | (1 | ) |  | (15 | ) |  | — |  |  | (25 | )
Segment EBIT |  |  | 812 |  |  | 8 |  |  | 181 |  |  | 58 |  |  | (616 | ) |  | — |  |  | 443 |
Depreciation, depletion and amortization expense |  |  | (179 | ) |  | (15 | ) |  | (73 | ) |  | (27 | ) |  | (149 | ) |  | — |  |  | (443 | )
Investments in affiliates |  |  | 506 |  |  | 20 |  |  | 15 |  |  | 14 |  |  | 67 |  |  | — |  |  | 622 |
Total assets |  |  | 11,172 |  |  | 2,691 |  |  | 2,030 |  |  | 670 |  |  | 4,683 |  |  | 40 |  |  | 21,286 |
Capital expenditures |  |  | 222 |  |  | 257 |  |  | 55 |  |  | 24 |  |  | 329 |  |  | 31 |  |  | 918 |
(1) In 2010, Bunge recorded pretax impairment charges of $77 million in cost of goods sold related to its operations in Europe, Brazil and the U.S. Of these pretax impairment charges, $35 million of these charges were allocated to the agribusiness segment, $28 million to the edible oil products segment and $14 million to the milling products segment. In addition, Bunge recorded pretax restructuring charges of $19 million in cost of goods sold, related primarily to termination benefit costs of its U.S. and Brazil operations, which it allocated $10 million, $1 million, $4 million and $4 million to its agribusiness, sugar and bioenergy, edible oil products and fertilizer segment, respectively. Bunge also recorded $10 million in selling, general and administrative expenses, related to its Brazilian operations, which it allocated $3 million, $3 million, $3 million and $1 million to its agribusiness, sugar and bioenergy, edible oil products and milling products segment, respectively, in its consolidated statements of income (see Note 9). In 2009, Bunge recorded pretax impairment charges of $5 million in cost of goods sold, relating to the permanent closure of a smaller, older and less efficient oilseed processing and refining facility, in its agribusiness segment. In addition, Bunge recorded pretax impairment charges of $26 million in selling, general and administrative expenses, relating to the write-down of certain real estate assets and a biodiesel equity investment, in its agribusiness segment. (2) Includes the noncontrolling interest share of interest and tax to reconcile to consolidated noncontrolling interest. (3) In 2010, Bunge sold its Brazilian fertilizer nutrients assets, including its interest in Fertilizantes Fosfatados S.A. (Fosfertil). Bunge recognized a pretax gain of $2,440 million on this transaction which is included in segment EBIT (see Note 3 of the notes to the consolidated financial statements). In addition, included in segment EBIT for 2010 is an unallocated loss of $90 million related to loss on extinguishment of debt (see Note 17). Total segment earnings before interest and taxes (EBIT) is an operating performance measure used by Bunge's management to evaluate segment operating activities. Bunge's management believes total segment EBIT is a useful measure of operating profitability, since the measure allows for an evaluation of the performance of its segments without regard to its financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors in Bunge's industries. A reconciliation of total segment EBIT to net income attributable to Bunge follows:
|  | Year Ended December 31, |
--- | --- | --- | ---
(US$ in millions) |  | 2011 |  | 2010 |  | 2009 |
Total segment EBIT |  | $ | 1,154 |  | $ | 3,228 |  | $ | 443 |
Interest income |  |  | 102 |  |  | 69 |  |  | 122 |
Interest expense |  |  | (302 | ) |  | (298 | ) |  | (283 | )
Income tax (expense) benefit |  |  | (44 | ) |  | (689 | ) |  | 110 |
Noncontrolling interest share of interest and tax |  |  | 32 |  |  | 44 |  |  | (31 | )
Net income attributable to Bunge |  | $ | 942 |  | $ | 2,354 |  | $ | 361 |
Net sales by product group to external customers were as follows:
|  | Year Ended December 31, |
--- | --- | --- | ---
(US$ in millions) |  | 2011 |  | 2010 |  | 2009 |
Agricultural commodities products |  | $ | 38,909 |  | $ | 30,138 |  | $ | 27,934 |
Sugar and bioenergy products |  |  | 5,842 |  |  | 4,455 |  |  | 2,577 |
Edible oil products |  |  | 8,839 |  |  | 6,783 |  |  | 6,184 |
Wheat milling products |  |  | 1,186 |  |  | 1,082 |  |  | 985 |
Corn milling products |  |  | 820 |  |  | 523 |  |  | 542 |
Fertilizer products |  |  | 3,147 |  |  | 2,726 |  |  | 3,704 |
Total |  | $ | 58,743 |  | $ | 45,707 |  | $ | 41,926 |
Geographic area information for net sales to external customers, determined based on the location of the subsidiary making the sale, and long-lived assets follows:
|  | Year Ended December 31, |
--- | --- | --- | ---
(US$ in millions) |  | 2011 |  | 2010 |  | 2009 |
Net sales to external customers: |  |  |  |  |  |  |  |  |  |
Europe |  | $ | 18,417 |  | $ | 15,490 |  | $ | 13,815 |
United States |  |  | 13,843 |  |  | 10,441 |  |  | 10,267 |
Brazil |  |  | 10,907 |  |  | 9,027 |  |  | 9,203 |
Asia |  |  | 9,590 |  |  | 6,136 |  |  | 5,385 |
Argentina |  |  | 3,660 |  |  | 2,918 |  |  | 1,836 |
Canada |  |  | 1,856 |  |  | 1,658 |  |  | 1,388 |
Rest of world |  |  | 470 |  |  | 37 |  |  | 32 |
Total |  | $ | 58,743 |  | $ | 45,707 |  | $ | 41,926 |
|  | Year Ended December 31, |
--- | --- | --- | ---
(US$ in millions) |  | 2011 |  | 2010 |  | 2009 |
Long-lived assets (1): |  |  |  |  |  |  |  |  |  |
Europe |  | $ | 1,051 |  | $ | 986 |  | $ | 1,021 |
United States |  |  | 1,307 |  |  | 1,176 |  |  | 977 |
Brazil |  |  | 4,004 |  |  | 4,103 |  |  | 3,971 |
Asia |  |  | 378 |  |  | 279 |  |  | 178 |
Argentina |  |  | 287 |  |  | 300 |  |  | 228 |
Canada |  |  | 180 |  |  | 172 |  |  | 174 |
Rest of world |  |  | 23 |  |  | 25 |  |  | 17 |
Total |  | $ | 7,230 |  | $ | 7,041 |  | $ | 6,566 |
(1) Long-lived assets include property, plant and equipment, net, goodwill and other intangible assets, net and investments in affiliates.

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