|
14. TRADE RECEIVABLES SECURITIZATION PROGRAM
Bunge accounts for its trade receivables securitization program (the “Program”) under the provisions of ASC Topic 860, Transfers and Servicing. The securitization program terminates on June 1, 2016. However, each committed purchaser’s commitment to fund trade receivables sold under the securitization program will terminate on May 29, 2013 unless extended for additional 364-day periods in accordance with the terms of the receivables transfer agreement.
As of September 30, 2012 and December 31, 2011, $804 million and $716 million, respectively, of receivables sold under the Program were derecognized from Bunge’s condensed consolidated balance sheets. Proceeds received in cash related to transfers of receivables under the program totaled $9,727 million and $3,755 million for the nine months ended September 30, 2012 and the period from inception of the program (June 1, 2011) through September 30, 2011, respectively. In addition, cash collections from customers on receivables previously sold were $9,886 million and $3,014 million for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011. As this is a revolving facility, cash collections from customers are reinvested to fund new receivable sales. Gross receivables sold under the program for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011 were $9,921 million and $2,915 million, respectively. These sales resulted in discounts of $2 million for both the three months ended September 30, 2012 and 2011, respectively, and $6 million and $2 million for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011, which were included in SG&A in the condensed consolidated statements of income. Servicing fees under the program were not significant in any period.
Bunge’s risk of loss following the sale of the accounts receivable is limited to the deferred purchase price receivable, which was $125 million and $192 million at September 30, 2012 and December 31, 2011, respectively, and is included in other current assets in the condensed consolidated balance sheets (see Note 5). The deferred purchase price will be repaid in cash as receivables are collected, generally within 30 days. Delinquencies and credit losses on accounts receivable sold under the program during the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011 were insignificant. Bunge has reflected all cash flows under the securitization program as operating cash flows in the condensed consolidated statements of cash flows for the nine months ended September 30, 2012 and 2011, including changes in the fair value of the deferred purchase price of $5 million and $1 million for the nine months ended September 30, 2012 and the period from inception of the program through September 30, 2011. |