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BUSINESS DIVESTITURES | 9 Months Ended
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Sep. 30, 2013
BUSINESS DIVESTITURES |
BUSINESS DIVESTITURES | 4. BUSINESS DIVESTITURES On December 6, 2012, Bunge entered into a definitive agreement with Yara International ASA (Yara), under which Yara would acquire Bunge’s Brazilian fertilizer distribution business, including blending facilities, brands and warehouses, for $750 million in cash. As a result of the transaction, which closed on August 8, 2013, Bunge will no longer have significant ongoing cash flows related to the Brazilian fertilizer business or any significant ongoing participation in the operations of this business. Bunge received cash proceeds of the Brazilian real equivalent of $750 million upon closing the transaction, resulting in recognition of a gain of $148 million ($112 million net of tax) which is included in discontinued operations in our condensed consolidated statements of income for the three and nine months ended September 30, 2013. Included in the gain are approximately $7 million of transaction costs incurred in connection with the divestiture and $41 million release of the cumulative translation adjustment associated with the disposed business. The results of the Brazilian fertilizer distribution business and the tax impact are reported in discontinued operations for the three and nine months ended September 30, 2013 and 2012 and are summarized as follows:
|  | Three Months Ended September 30, |
(US$ in millions) |  | 2013 |  | 2012 |
Net sales |  | $ | 149 |  | $ | 750 |
Cost of goods sold |  | (139 | ) |  | (734 | )
Gross profit |  | 10 |  | 16 |
Selling, general and administrative expenses |  | (14 | ) | (19 | )
Interest income |  | 8 |  | 8 |
Interest expense |  | — |  | (9 | )
Foreign exchange gain (loss) |  | (13 | ) | 5 |
Other income (expenses)—net |  | 1 |  | — |
Gain on sale of Brazilian fertilizer business |  | 148 |  | — |
Income (loss) from discontinued operations before income tax |  | 140 |  | 1 |
Income tax (expense) benefit |  | (37 | ) | 1 |
Income (loss) from discontinued operations, net of tax |  | $ | 103 |  | $ | 2 |
|  | Nine Months Ended September 30, |
(US$ in millions) |  | 2013 |  | 2012 |
Net sales |  | $ | 1,217 |  | $ | 1,878 |
Cost of goods sold |  | (1,141 | ) | (1,861 | )
Gross profit |  | 76 |  | 17 |
Selling, general and administrative expenses |  | (58 | ) | (68 | )
Interest income |  | 14 |  | 17 |
Interest expense |  | (9 | ) | (16 | )
Foreign exchange gain (loss) |  | (14 | ) | 18 |
Other income (expenses)—net |  | (12 | ) | (36 | )
Gain on sale of Brazilian fertilizer business |  | 148 |  | — |
Income (loss) from discontinued operations before income tax |  | 145 |  | (68 | )
Income tax (expense) benefit |  | (51 | ) | 35 |
Income (loss) from discontinued operations, net of tax |  | $ | 94 |  | $ | (33 | )
Approximately $7 million of transaction costs are included as a component of cash used for operating activities in Bunge’s condensed consolidated statements of cash flows for the nine months ended September 30, 2013. Gross proceeds of $750 million and cash disposed of $4 million related to the sale of the Brazilian fertilizer distribution business are included as a component of cash provided by investing activities in Bunge’s condensed consolidated statements of cash flows for the nine months ended September 30, 2013. The assets and liabilities classified as held for sale related to the fertilizer divestiture in the condensed consolidated balance sheet at December 31, 2012 consisted of the following:
|  | December 31, |
(US$ in millions) |  | 2012 |
Assets: |  |  |
Cash and cash equivalents |  | $ | 2 |
Trade accounts receivable (less allowance of $2) |  | 189 |
Inventories |  | 402 |
Other current assets |  | 67 |
Current assets held for sale |  | $ | 660 |
Property, plant and equipment, net |  | $ | 218 |
Deferred income taxes |  | 40 |
Other non-current assets |  | (8 | )
Non-current assets held for sale |  | $ | 250 |
Liabilities: |  |  |
Trade accounts payable |  | $ | 157 |
Other current liabilities |  | 140 |
Current liabilities held for sale |  | $ | 297 |
Other non-current liabilities |  | 13 |
Non-current liabilities held for sale |  | $ | 13

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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