Third Quarter 2021 Overview You should refer to "Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting Operating Results" in our Annual Report on Form 10-K for the year endedDecember 31, 2020 for a discussion of key factors affecting operating results in each of our business segments. In addition, you should refer to "Item 9A, Controls and Procedures" in our Annual Report on Form 10-K for the year endedDecember 31, 2020 and to "Item 4, Controls and Procedures" in this Quarterly Report on Form 10-Q for the period endedSeptember 30, 2021 for a discussion of our internal controls over financial reporting. Non-U.S. GAAP Financial Measures Total segment earnings before interest and taxes ("EBIT") is an operating performance measure used byBunge 's management to evaluate segment operating activities.Bunge also uses Core Segment EBIT, Non-core Segment EBIT and Total Segment EBIT to evaluate the operating performance ofBunge 's Core reportable segments, Non-core reportable segments, and Total reportable segments together with our Corporate and Other activities. Core Segment EBIT is the aggregate of the earnings before interest and taxes of each ofBunge 's Agribusiness, Refined and Specialty Oils, and Milling segments. Non-core Segment EBIT is the earnings before interest and taxes ofBunge 's Sugar & Bioenergy segment. Total Segment EBIT is the aggregate of the earnings before interest and taxes ofBunge 's Core and Non-core reportable segments, together with its corporate and other activities.Bunge 's management believes Core Segment EBIT, Non-core Segment EBIT and Total Segment EBIT are useful measures of operating profitability since the measures allow for an evaluation of the performance of its segments without regard to financing methods or capital structure. In addition, EBIT is a financial measure that is widely used by analysts and investors inBunge 's industry. Total Segment EBIT is a non-U.S. GAAP financial measure and is not intended to replace Net income (loss) attributable toBunge , the most directly comparableU.S. GAAP financial measure. Further, Total Segment EBIT excludes EBIT attributable to noncontrolling interests and is not a measure of consolidated operating results underU.S. GAAP and should not be considered as an alternative to Net income (loss) or any other measure of consolidated operating results underU.S. GAAP. See the reconciliation of Net income (loss) attributable toBunge to Total Segment EBIT below. Cash provided by (used for) operating activities, adjusted is calculated by including the Proceeds from beneficial interests in securitized trade receivables with Cash provided by (used for) operating activities. Cash provided by (used for) operating activities, adjusted is a non-GAAP financial measure and is not intended to replace Cash provided by (used for) operating activities, the most directly comparableU.S. GAAP financial measure. Our management believes presentation of this measure allows investors to view our cash generating performance using the same measure that management uses in evaluating financial and business performance and trends. Executive Summary Net Income (Loss) Attributable toBunge - For the three months endedSeptember 30, 2021 , Net income attributable toBunge was$653 million , an increase of$391 million compared to$262 million for the three months endedSeptember 30, 2020 . For the nine months endedSeptember 30, 2021 , Net income attributable toBunge was$1,847 million , an increase of$1,253 million , compared to Net income attributable toBunge of$594 million for the nine months endedSeptember 30, 2020 . The increase for the three and nine months endedSeptember 30, 2021 was due to higher Segment EBIT in our Core and Non-core segments, which are further discussed in the Segment Overview & Results of Operations section below. Earnings Per Common Share - Diluted - For the three months endedSeptember 30, 2021 , Net income attributable toBunge common shareholders, diluted, was$4.28 per share, an increase of$2.44 per share, compared to income of$1.84 per share for the three months endedSeptember 30, 2020 . For the nine months endedSeptember 30, 2021 , Net income attributable toBunge common shareholders, diluted, was$12.12 per share, an increase of$8.14 per share, compared to income of$3.98 per share for the nine months endedSeptember 30, 2020 . EBIT - For the three months endedSeptember 30, 2021 , Total Segment EBIT was$784 million , an increase of$433 million compared to Total Segment EBIT of$351 million for the three months endedSeptember 30, 2020 . For the nine months endedSeptember 30, 2021 , Total Segment EBIT was$2,329 million , an increase of$1,410 million , compared to Total Segment EBIT of$919 million for the nine months endedSeptember 30, 2020 . The increase in Total Segment EBIT for the three and nine months endedSeptember 30, 2021 was due to higher Segment EBIT in our Core and Non-core segments, which are further discussed in the Segment Overview & Results of Operations section below. 37 -------------------------------------------------------------------------------- Table of Contents Income Tax (Expense) Benefit - Income tax expense was$92 million for the three months endedSeptember 30, 2021 compared to income tax expense of$38 million for the three months endedSeptember 30, 2020 . Income tax expense was$334 million for the nine months endedSeptember 30, 2021 compared to income tax expense of$151 million for the nine months endedSeptember 30, 2020 . The increase in income tax expense for the three and nine months endedSeptember 30, 2021 was primarily due to higher pretax income, partially offset by a lower estimated effective tax rate for 2021. Liquidity and Capital Resources - AtSeptember 30, 2021 , working capital, which equals Total current assets less Total current liabilities, was$6,775 million , an increase of$2,206 million , compared to working capital of$4,569 million atSeptember 30, 2020 , and an increase of$1,579 million , compared to working capital of$5,196 million atDecember 31, 2020 . The increases in working capital are primarily due to higher commodity prices on readily marketable inventory ("RMI") as well as a decrease in Short-term debt atSeptember 30, 2021 . Segment Overview & Results of Operations EffectiveJanuary 1, 2021 , we changed our reporting segments to align with our new value chain operational structure, as discussed in Note 20- Segment Information. Certain reclassifications of prior period amounts within the reporting segments have been made to conform to current presentation. Our operations are now organized, managed and classified into four reportable segments based upon their similar economic characteristics, nature of products and services offered, production processes, types and classes of customer, and distribution methods. We further organize these reportable segments into Core operations and Non-core operations. Core operations comprise our Agribusiness, Refined and Specialty Oils, and Milling segments. Non-core operations comprise our Sugar & Bioenergy segment, which itself primarily comprises the Company's 50% interest in the net earnings ofBP Bunge Bioenergia , a joint venture with BP p.l.c. ("BP"). Our remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other. Corporate and Other includes salaries and overhead for corporate functions that are not allocated to our individual reporting segments because the operating performance of each reporting segment is evaluated by the Company's chief operating decision maker exclusive of these items, as well as certain other activities includingBunge Ventures , the Company's captive insurance activities and securitization program, as well as certain income tax assets and liabilities. A reconciliation of Net income (loss) attributable toBunge to Total Segment EBIT follows: Three Months Ended Nine Months Ended September 30, September 30, (US$ in millions) 2021 2020 2021 2020
Net income (loss) attributable to
$ 1,847 $ 594 Interest income (19) (5) (34) (18) Interest expense 57 56 184 195 Income tax expense (benefit) 92 38 334 151
Noncontrolling interests' share of interest
and tax 1 - (2) (3)
Total Segment EBIT $ 784 $ 351 $ 2,329 $ 919
Agribusiness Segment EBIT 639 317 1,838 1,069
Refined and Specialty Oils Segment EBIT 130 76 541 174
Milling Segment EBIT 43 26 85 69
Core Segment EBIT 812 419 2,464 1,312
Corporate and Other EBIT (81) (92) (227) (279)
Sugar and Bioenergy Segment EBIT 53 24 92 (114)
Non Core Segment EBIT 53 24 92 (114)
Total Segment EBIT $ 784 $ 351 $ 2,329 $ 919
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Table of Contents
Core Segments
Agribusiness Segment
Three Months Ended Nine Months Ended
September 30, September 30,
(US$ in millions, except volumes) 2021 2020 2021 2020
Volumes (in thousand metric tons) 30,486 36,319 106,375 107,269
Net sales $ 9,868 $ 7,290 $ 31,312 $ 20,597
Cost of goods sold (9,277) (6,917) (29,425) (19,319)
Gross profit 591 373 1,887 1,278
Selling, general and administrative expense (118) (145) (313) (365)
Foreign exchange gains (losses) (30) 59 (1) 78
EBIT attributable to noncontrolling interests 5 (2) (6) (7)
Other income (expense) - net 181 15 227 39
Income (loss) from affiliates 10 17 44 46
Total Agribusiness Segment EBIT $ 639 $
317
Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 Agribusiness segment Net sales increased by$2,578 million , or 35%, to$9,868 million for the three months endedSeptember 30, 2021 , compared to$7,290 million for the three months endedSeptember 30, 2020 . The increase was primarily due to the following: •In Processing, Net sales increased$1,305 million primarily due to significantly higher average sales prices in our soybean processing businesses in all regions, driven by higher commodity prices, and significantly higher average sales prices in our European softseed processing businesses. The above increases were partially offset by lower sales volumes, primarily inNorth America due to lower available soybean and canola supplies, as well as inSouth America due to lower levels of farmer selling in the current year. •In Merchandising, Net sales increased$1,273 million due to significantly higher average sales prices in our global corn, wheat and oil business due to higher commodity prices, and strong execution in our ocean freight business. The above increases were partially offset by lower volumes, primarily in our global corn business due to decreased farmer selling inSouth America , as well as the completion of the sale of a portfolio of interiorUnited States grain elevators early in the current quarter. Cost of goods sold increased by$2,360 million , or 34%, to$9,277 million for the three months endedSeptember 30, 2021 compared to$6,917 million for the three months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, Cost of goods sold increased by$1,222 million due to the higher sales activity and related commodity prices noted above, including unfavorable mark-to-market results in our processing businesses in all regions in the current year period. •In Merchandising, Cost of goods sold increased by$1,138 million due to the higher sales activity and related commodity prices noted above, partially offset by favorable mark-to-market results, primarily in our ocean freight and global oils businesses. Gross profit increased by$218 million , or 58%, to$591 million for the three months endedSeptember 30, 2021 , compared to$373 million for the three months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, an increase of$83 million was due to higher Net sales in excess of higher Cost of goods sold, as described above. 39 -------------------------------------------------------------------------------- Table of Contents •In Merchandising, an increase of$135 million was due to higher Net sales in excess of higher Cost of goods sold, as described above. Selling, general and administrative ("SG&A") expenses decreased by$27 million , or 19%, to$118 million for the three months endedSeptember 30, 2021 , compared to$145 million for the three months endedSeptember 30, 2020 . The decrease is driven by favorable currency movements, primarily from the weakening of the Brazilian real, along with the allocation of a higher portion of variable incentive costs to Corporate and Other activities in the current year. Other income (expense) - net increased$166 million , to income of$181 million for the three months endedSeptember 30, 2021 , compared to income of$15 million for the three months endedSeptember 30, 2020 . The increase is primarily due to a$158 million gain resulting from the sale of the interior grain elevators located inthe United States in the current quarter. Income (loss) from affiliates decreased$7 million , to income of$10 million for the three months endedSeptember 30, 2021 , compared to income of$17 million for the three months endedSeptember 30, 2020 . The decrease is primarily due to lower results from our investment in Terminal 6 S.A. and Terminal 6Industrial S.A. , a port facility inArgentina , and in our investment inVietnam Agribusiness Holdings , an oilseed processing business inVietnam , primarily driven by unfavorable mark-to-market results. Segment EBIT increased$322 million , or 102%, to$639 million for the three months endedSeptember 30, 2021 , compared to$317 million for the three months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, an increase of$63 million was primarily due to higher Gross profit, lower SG&A and higher Other income (expense) - net, as described above. •In Merchandising, an increase of$259 million was primarily due to higher Gross profit, lower SG&A and higher Other income (expense) - net, as described above. Nine Months EndedSeptember 30, 2021 Compared to Nine Months EndedSeptember 30, 2020 Agribusiness segment Net sales increased by$10,715 million , or 52%, to$31,312 million for the nine months endedSeptember 30, 2021 , compared to$20,597 million for the nine months endedSeptember 30, 2020 . The increase was primarily due to the following: •In Processing, Net sales increased$5,502 million primarily due to significantly higher average sales prices in our soybean processing businesses in all regions due to higher commodity prices, and significantly higher average sales prices in our European softseed processing business. The above increases were partially offset by slightly lower volumes in most key regions. •In Merchandising, Net sales increased$5,213 million due to significantly higher average sales prices, primarily in our global corn and global oil businesses, due to higher commodity prices, as well higher sales volumes in our global wheat and global oil businesses due to high export demand. Cost of goods sold increased by$10,106 million , or 52%, to$29,425 million for the nine months endedSeptember 30, 2021 compared to$19,319 million for the nine months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, Cost of goods sold increased by$4,955 million due to the higher sales activity and related commodity prices noted above, partially offset by favorable mark-to-market results in our global soybean processing businesses. •In Merchandising, Cost of goods sold increased by$5,151 million due to the higher sales and related commodity prices activity noted above, as well as unfavorable mark-to-market results, primarily in our ocean freight business. Gross profit increased by$609 million , or 48%, to$1,887 million for the nine months endedSeptember 30, 2021 , compared to$1,278 million for the nine months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, an increase of$547 million was due to higher Net sales in excess of higher Cost of goods sold, as described above. 40 -------------------------------------------------------------------------------- Table of Contents •In Merchandising, an increase of$62 million was due to higher Net sales in excess of higher Cost of goods sold, as described above. SG&A expenses decreased$52 million , or 14%, to$313 million for the nine months endedSeptember 30, 2021 , compared to$365 million for the nine months endedSeptember 30, 2020 . The decrease was primarily due to a higher portion of variable incentive costs being allocated to Corporate and Other activities in the current year. Other income (expense) - net increased$188 million , to income of$227 million for the nine months endedSeptember 30, 2021 , compared to income of$39 million for the nine months endedSeptember 30, 2020 . The increase is primarily due to a$158 million gain resulting on the sale of the interior grain elevators located inthe United States . Segment EBIT increased$769 million , or 72%, to$1,838 million for the nine months endedSeptember 30, 2021 , compared to$1,069 million for the nine months endedSeptember 30, 2020 . The net increase was primarily due to the following: •In Processing, an increase of$536 million was primarily due to higher Gross profit, lower SG&A and higher Other income (expense) - net, as described above. •In Merchandising, an increase of$233 million was primarily due to higher Gross profit, lower SG&A and higher Other income (expense) - net, as described above.
Refined and Specialty Oils Segment
Three Months Ended Nine Months Ended
September 30, September 30,
(US$ in millions, except volumes) 2021 2020 2021 2020
Volumes (in thousand metric tons) 2,390 2,475 6,841 7,115
Net sales $ 3,648 $ 2,432 $ 9,572 $ 6,887
Cost of goods sold (3,430) (2,254) (8,924) (6,434)
Gross profit 218 178 648 453
Selling, general and administrative expense (83) (96) (259) (279)
Foreign exchange gains (losses) (1) (2) 1 -
EBIT attributable to noncontrolling interests (2) (3) (85) 3
Other income (expense) - net (2) (1) 236 (3)
Income (loss) from affiliates - - - -
Total Refined and Specialty Oils Segment EBIT $ 130 $
76
Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 Refined and Specialty Oils segment Net sales increased$1,216 million , or 50%, to$3,648 million for the three months endedSeptember 30, 2021 , compared to$2,432 million for the three months endedSeptember 30, 2020 , primarily due to significantly higher average selling prices in all regions, driven by higher commodity prices due to strong demand from renewable diesel inNorth America , as well as food services across all regions. Cost of goods sold increased$1,176 million , or 52%, to$3,430 million for the three months endedSeptember 30, 2021 , compared to$2,254 million for the three months endedSeptember 30, 2020 . The increase in Cost of goods sold was in line with the increase in Net sales and related to higher raw material commodity prices in the current year, in addition to unfavorable mark-to-market results, partially offset by slightly lower overall volumes. Gross profit for the three months endedSeptember 30, 2021 increased$40 million , or 22%, to$218 million , compared to$178 million for the three months endedSeptember 30, 2020 . The increase was due to the increase in Net sales in excess of the increase in Cost of goods sold, as described above. SG&A expenses decreased$13 million , or 14%, to$83 million for the three months endedSeptember 30, 2021 , compared to$96 million the three months endedSeptember 30, 2020 . The decrease is driven by favorable currency 41 -------------------------------------------------------------------------------- Table of Contents movements, primarily from the weakening of the Brazilian real along with the allocation of a higher portion of variable incentive costs to Corporate and Other activities in the current year. Segment EBIT increased$54 million , or 71%, to$130 million for the three months endedSeptember 30, 2021 , compared to$76 million for the three months endedSeptember 30, 2020 . The increase was primarily due to higher Gross profit and by lower SG&A, as described above. Nine Months EndedSeptember 30, 2021 Compared to Nine Months EndedSeptember 30, 2020 Refined and Specialty Oils segment Net sales increased$2,685 million , or 39%, to$9,572 million for the nine months endedSeptember 30, 2021 , compared to$6,887 million for the nine months endedSeptember 30, 2020 , primarily due to significantly higher average selling prices inNorth America andEurope , driven by strong demand for renewable diesel and food services. The above increases were partially offset by lower overall volumes, primarily in our South American operations due to stay-at-home orders associated with COVID-19 earlier in the current year, as well as the sale of our Brazilian margarine and mayonnaise assets in the fourth quarter of 2020. Cost of goods sold increased$2,490 million , or 39%, to$8,924 million for the nine months endedSeptember 30, 2021 , compared to$6,434 million for the nine months endedSeptember 30, 2020 . The increase in Cost of goods sold was due to higher raw material commodity prices in the current year and unfavorable mark-to-market results, partially offset by lower overall volumes as described under Net sales above. Gross profit for the nine months endedSeptember 30, 2021 increased$195 million , or 43%, to$648 million , compared to$453 million for the nine months endedSeptember 30, 2020 . The increase was due to the increase in Net sales in excess of the increase in Cost of goods sold, as described above. SG&A expenses decreased$20 million , or 7%, to$259 million for the nine months endedSeptember 30, 2021 , compared to$279 million for the nine months endedSeptember 30, 2020 , primarily due to higher bad debt expense recorded in the prior year, favorable currency movements, primarily from the weakening of the Brazilian real, and the allocation of a higher portion of variable incentive costs to Corporate and Other activities in the current year. EBIT attributable to noncontrolling interests, an expense when subsidiaries with noncontrolling interests generate earnings before interest and tax, versus income when subsidiaries with noncontrolling interests generate loss before interest and tax, decreased by$88 million to an expense of$85 million for the nine months endedSeptember 30, 2021 , compared to income of$3 million for the nine months endedSeptember 30, 2020 . The expense for the current year is primarily due to improved results inBunge Loders Croklaan, including the noncontrolling interest share of the gain on sale of ourRotterdam oils refinery. Other income (expense), net was income of$236 million for the nine months endedSeptember 30, 2021 , compared to expense of$3 million for the nine months endedSeptember 30, 2020 . Current period income was primarily due to a$219 million gain, which includes the amount attributable to noncontrolling interest, resulting on the sale of ourRotterdam oils refinery, as well as a$19 million gain on the sale of a Mexican oils packaging facility. Segment EBIT increased$367 million , or 211%, to$541 million for the nine months endedSeptember 30, 2021 , compared to$174 million for the nine months endedSeptember 30, 2020 . The increase was due to higher Gross profit and Other income (expense), net, and lower SG&A, partially offset by EBIT attributable to noncontrolling interests, as described above. 42 -------------------------------------------------------------------------------- Table of Contents Milling Segment Three Months Ended Nine Months Ended September 30, September 30, (US$ in millions, except volumes) 2021 2020 2021 2020 Volumes (in thousand metric tons) 1,542 1,231 4,789 4,430 Net sales$ 530 $ 388 $ 1,392 $ 1,185 Cost of goods sold (460) (338) (1,231) (1,036) Gross profit 70 50 161 149 Selling, general and administrative expense (25) (24) (73) (77) Foreign exchange gains (losses) (2) 1 (2) - EBIT attributable to noncontrolling interests - - (1) (1) Other income (expense) - net - - - (1) Income (loss) from affiliates - (1) - (1) Total Milling Segment EBIT$ 43 $ 26 $ 85 $ 69 Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 Milling segment Net sales increased$142 million , or 37%, to$530 million for the three months endedSeptember 30, 2021 , compared to$388 million for the three months endedSeptember 30, 2020 . The increase was primarily due to higher volumes and prices in our South American wheat milling business and higher prices in our North American corn milling and Mexican wheat milling businesses, partially offset by lower volumes inNorth America due to lower domestic demand and the sale of our rice business in the prior year. Cost of goods sold increased$122 million , or 36%, to$460 million for the three months endedSeptember 30, 2021 , compared to$338 million for the three months endedSeptember 30, 2020 . The increase was in line with the increase in Net sales described above, partially offset by favorable mark-to-market results. Gross profit increased$20 million , or 40%, to$70 million for the three months endedSeptember 30, 2021 , compared to$50 million for the three months endedSeptember 30, 2020 . The increase was due to higher volumes in our South American wheat milling business and higher prices in our Mexican wheat milling and North American corn milling businesses. SG&A expenses increased$1 million , or 4%, to$25 million for the three months endedSeptember 30, 2021 , compared to$24 million for the three months endedSeptember 30, 2020 . Although there was a decrease due to a higher portion of variable incentive costs being allocated to Corporate and Other, there were multiple offsetting SG&A expenses which resulted in an overall increase. Segment EBIT increased$17 million , or 65%, to$43 million for the three months endedSeptember 30, 2021 , compared to$26 million for the three months endedSeptember 30, 2020 . The increase was primarily due to higher gross profit as described above. Nine Months EndedSeptember 30, 2021 Compared to Nine Months EndedSeptember 30, 2020 Milling segment Net sales increased$207 million , or 17%, to$1,392 million for the nine months endedSeptember 30, 2021 , compared to$1,185 million for the nine months endedSeptember 30, 2020 . The increase was primarily due to higher average sales prices and volumes in our South American and Mexican wheat milling businesses, partially offset by lower volumes inNorth America due to the sale of our rice milling business in the prior year. Cost of goods sold increased$195 million , or 19%, to$1,231 million for the nine months endedSeptember 30, 2021 , compared to$1,036 million for the nine months endedSeptember 30, 2020 . The increase was primarily driven by the volume increases in our South American and Mexican wheat milling businesses noted above, in addition to higher raw material wheat prices inSouth America andMexico , and higher corn prices inNorth America , partially offset by lower volumes inNorth America resulting from the prior year sale of our rice business and favorable mark-to-market results. 43 -------------------------------------------------------------------------------- Table of Contents Gross profit increased$12 million , or 8%, to$161 million for the nine months endedSeptember 30, 2021 , compared to$149 million for the nine months endedSeptember 30, 2020 . The increase was primarily due to the increase in Net sales in excess of the increase in Cost of goods sold, as described above. SG&A expenses decreased$4 million , or 5%, to$73 million for the nine months endedSeptember 30, 2021 , compared to$77 million for the nine months endedSeptember 30, 2020 . The decrease was primarily due to a higher portion of variable incentive costs being allocated to Corporate and Other. Segment EBIT increased$16 million , or 23%, to$85 million for the nine months endedSeptember 30, 2021 , compared to$69 million for the nine months endedSeptember 30, 2020 . The increase was due to higher gross profit and lower SG&A, as described above. Corporate and Other Three Months Ended Nine Months Ended September 30, September 30, (US$ in millions, except volumes) 2021 2020 2021 2020 Net sales$ 2 $ -$ 3 $ - Cost of goods sold (21) (4) (28) (6) Gross profit (19) (4) (25) (6) Selling, general and administrative expense (101) (87) (250) (272) Foreign exchange gains (losses) (3) (4) (9) (3) EBIT attributable to noncontrolling interests 2 - 2 - Other income (expense) - net 41 3 55 2 Income (loss) from affiliates (1) - - - Total Corporate and Other$ (81) $ (92) $ (227) $ (279) Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 Segment EBIT increased$11 million , or 12%, to a loss of$81 million for the three months endedSeptember 30, 2021 , compared to a loss of$92 million for the three months endedSeptember 30, 2020 . The improved result is primarily due to our corporate venture capital unit's activities, which benefited from a mark-to-market gain on the initial public offering of one of its investments during the period, partially offset by higher variable incentive costs in the current year period. Nine Months EndedSeptember 30, 2021 Compared to Nine Months EndedSeptember 30, 2020 Segment EBIT increased$52 million , or 19%, to a loss of$227 million for the nine months endedSeptember 30, 2021 , compared to a loss of$279 million for the nine months endedSeptember 30, 2020 . The improved result is primarily due to our corporate venture capital unit's activities, which benefited from a mark-to-market gain on the initial public offering of one of its investments during the period, as well as a bad debt reserve and related legal provision in relation to a disputed account receivable balance deemed uncollectible in the prior year, partially offset by higher variable incentive costs in the current year. 44
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Table of Contents
Non-core Segment
Sugar and Bioenergy Segment
Three Months Ended Nine Months Ended
September 30, September 30,
(US$ in millions, except volumes) 2021 2020 2021 2020
Volumes (in thousand metric tons) 91 95 291 244
Net sales $ 69 $ 49 $ 190 $ 125
Cost of goods sold (67) (44) (187) (118)
Gross profit 2 5 3 7
Selling, general and administrative expense - - (1) -
Foreign exchange gains (losses) - - - -
EBIT attributable to noncontrolling interests - - - -
Other income (expense) - net - - 1 -
Income (loss) from affiliates 51 19 89 (121)
Total Sugar and Bioenergy Segment EBIT
$ (114) Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 Segment EBIT increased$29 million , or 121%, to$53 million for the three months endedSeptember 30, 2021 , compared to$24 million for the three months endedSeptember 30, 2020 . The increase is due to more favorable results from our investment inBP Bunge Bioenergia , driven by higher ethanol volumes and higher average sales prices in the current period. Nine Months EndedSeptember 30, 2021 Compared to Nine Months EndedSeptember 30, 2020 Segment EBIT increased$206 million , or 181%, to income of$92 million for the nine months endedSeptember 30, 2021 , compared to a loss of$114 million for the nine months endedSeptember 30, 2020 . The increase is due to more favorable results from our investment inBP Bunge Bioenergia , driven by higher sugar and ethanol volumes and higher average sugar and ethanol sales prices in the current period, as well as a significant foreign exchange loss onU.S. dollar denominated debt due to a large depreciation in the Brazilian real in the prior year period.
Interest - A summary of consolidated interest income and expense follows:
Three Months Ended Nine Months Ended
September 30, September 30,
(US$ in millions) 2021 2020 2021 2020
Interest income $ 19 $ 5 $ 34 $ 18
Interest expense (57) (56) (184) (195)
Interest income was $19 million for the three months ended September 30, 2021 ,
compared to $5 million for the three months ended September 30, 2020 . Interest
expense increased by $1 million , to $57 million for the three months ended
September 30, 2021 , compared to $56 million for the three months ended September
30, 2020 . The decrease in net interest expense was due to increased Interest
income for the three months ended September 30, 2021 , primarily driven by the
resolution of an historical value added tax matter.
Interest income was $34 million for the nine months ended September 30, 2021 ,
compared to $18 million for the nine months ended September 30, 2020 . Interest
expense decreased by $11 million , to $184 million for the nine months ended
September 30, 2021 , compared to $195 million for the nine months ended
September 30, 2020 . The decrease in net interest expense was due to was due to
lower variable interest rates in the nine months ended September 30, 2021 as
well as increased Interest income for the nine months ended September 30, 2021 ,
primarily driven by the resolution of an historical value added tax matter.
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Table of Contents
Liquidity and Capital Resources
Our main financial objectives are to prudently manage financial risks, ensure
consistent access to liquidity and minimize cost of capital in order to
efficiently finance our business and maintain balance sheet strength. We
generally finance our ongoing operations with cash flows generated from
operations, issuances of commercial paper, borrowings under various bilateral
and syndicated revolving credit facilities, term loans, and proceeds from the
issuance of senior notes. Acquisitions and long-lived assets are generally
financed with a combination of equity and long-term debt.
Working Capital
As of
US$ in millions, except current ratio
December 31, 2020
Cash and cash equivalents $ 1,033 $ 291 $ 352
Trade accounts receivable, net 2,431 1,623 1,717
Inventories 8,014 6,463 7,172
Other current assets(1) 5,056 5,124 6,940
Total current assets $ 16,534 $ 13,501 $ 16,181
Short-term debt $ 1,151 $ 1,610 $ 2,828
Current portion of long-term debt 510 509 8
Trade accounts payable 3,944 2,708 2,636
Current operating lease obligations 332 233 235
Other current liabilities(2) 3,822 3,872 5,278
Total current liabilities $ 9,759 $ 8,932 $ 10,985
Working capital(3) $ 6,775 $ 4,569 $ 5,196
Current ratio(4) 1.69 1.51 1.47
(1) Comprises Assets held for sale and Other current assets.
(2) Comprises Liabilities held for sale and Other current liabilities.
(3) Working capital is Total current assets less Total current liabilities.
(4) Current ratio represents Total current assets divided by Total current
liabilities.
Working capital was $6,775 million at September 30, 2021 , an increase of $1,579
million , or 30%, from working capital of $5,196 million at December 31, 2020 ,
and an increase of $2,206 million , or 48% from working capital of $4,569 million
at September 30, 2020 .
Cash and Cash Equivalents - Cash and cash equivalents were $1,033 million at
September 30, 2021 , an increase of $681 million from $352 million at
December 31, 2020 and an increase of $742 million from $291 million at
September 30, 2020 . Cash balances are managed in accordance with our investment
policy, the objectives of which are to preserve the principal value of our cash
assets, maintain a high degree of liquidity, and deliver competitive returns
subject to prevailing market conditions. Cash balances are typically invested in
short-term deposits with highly-rated financial institutions and in U.S.
government securities.
Trade accounts receivable, net - Trade accounts receivable, net were $2,431
million at September 30, 2021 , an increase of $714 million from $1,717 million
at December 31, 2020 and an increase of $808 million from $1,623 million at
September 30, 2020 . The increases from December 31, 2020 and September 30, 2020
were primarily due to increased Net sales in the current period driven by
factors described in the Segment Overview & Results of Operations above.
Inventories - Inventories were $8,014 million at September 30, 2021 , an increase
of $842 million from $7,172 million at December 31, 2020 and an increase of
$1,551 million from $6,463 million at September 30, 2020 . The increases from
both comparative periods were primarily related to higher average commodity
prices at the end of the current period.
RMI comprises agricultural commodity inventories, such as soybeans, soybean
meal, soybean oil, corn, and wheat that are readily convertible to cash because
of their commodity characteristics, widely available markets and international
pricing mechanisms. Total RMI reported at fair value was $6,505 million , $5,961
million and $5,354 at September 30, 2021 ,
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December 31, 2020 and September 30, 2020 , respectively (see Note 6- Inventories,
to our condensed consolidated financial statements).
Other current assets - Other current assets were $5,056 million at September 30,
2021 , a decrease of $1,884 million from $6,940 million at December 31, 2020 and
a decrease of $68 million from $5,124 million at September 30, 2020 . The
decrease from December 31, 2020 was primarily due to lower unrealized gains on
derivative contracts, lower margin deposits, as well as the sales of our
Rotterdam oils facility and our United States interior grain elevators during
the nine month period ended September 30, 2021 , which were classified as held
for sale at December 31, 2020 . The decrease from September 30, 2020 was
primarily due to lower unrealized gains on derivative contracts and a decrease
in Assets held for sale related to the completion of the sale of our United
States interior grain elevators, partially offset by an increase in the deferred
purchase price receivable balance related to increased sales into our trade
receivables securitization program.
Short-term debt - Short-term debt, including the current portion of long-term
debt, was $1,661 million at September 30, 2021 , a decrease of $1,175 million
from $2,836 million at December 31, 2020 and a decrease of $458 million from
$2,119 million at September 30, 2020 . The lower short-term debt levels at
September 30, 2021 compared to December 31, 2020 and September 30, 2020 were
driven by a $1 billion long-term bond issuance in the second quarter of 2021, as
discussed below, from which a portion of the proceeds were used to pay down
short-term debt.
Trade accounts payable - Trade accounts payable were $3,944 million at
September 30, 2021 , an increase of $1,308 million from $2,636 million at
December 31, 2020 and an increase of $1,236 million from $2,708 million at
September 30, 2020 . The increases in Trade accounts payable from December 31,
2020 and September 30, 2020 were primarily due to higher average inventory
purchase volumes and prices during the current period.
Other current liabilities - Other current liabilities were $3,822 million at
September 30, 2021 , a decrease of $1,456 million from $5,278 million at
December 31, 2020 and a decrease of $50 million from $3,872 million at
September 30, 2020 . The decrease from December 31, 2020 was primarily due to
lower unrealized losses on derivative contracts, as well as the sale of our
United States interior grain elevators, which was classified as held for sale,
and a payment to acquire the noncontrolling equity interests in our Z.T.
Kruszwica S.A. subsidiary in Europe during the nine months ended September 30,
2021 (see Note 10- Other Current Liabilities to our condensed consolidated
financial statements). The decrease from September 30, 2020 was primarily due to
the sale of our United States interior grain elevators and a payment to acquire
the noncontrolling equity interests in our Z.T. Kruszwica S.A. subsidiary,
partially offset by higher unrealized losses on derivative contracts.
Debt
Financing Arrangements and Outstanding Indebtedness - We conduct most of our
financing activities through a centralized financing structure that provides the
Company with efficient access to debt and capital markets. This structure
includes a master trust, the primary assets of which consist of intercompany
loans made to Bunge Limited and its subsidiaries. Certain of Bunge Limited's
100% owned finance subsidiaries, including Bunge Limited Finance Corp. , Bunge
Finance Europe B.V. , and Bunge Asset Funding Corp. , fund the master trust with
short and long-term debt obtained from third parties, including through our
commercial paper program and certain credit facilities, as well as the issuance
of senior notes. Borrowings by these finance subsidiaries carry full,
unconditional guarantees by Bunge Limited .
Revolving Credit Facilities - At September 30, 2021 , we had $5,565 million of
aggregate committed borrowing capacity under our commercial paper program and
various revolving bilateral and syndicated credit facilities, of which $5,565
million was unused and available. The following table summarizes these
facilities as of the periods presented:
Total Committed
(US$ in millions) Capacity Borrowings Outstanding
Commercial Paper Program September 30, September 30, December 31,
and Revolving Credit Facilities Maturities 2021 2021 2020
Commercial paper 2026 $ 600 $ - $ 549
Revolving credit facilities 2022 - 2026 4,965 - 944
Total $ 5,565 $ - $ 1,493
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Our commercial paper program is supported by committed back-up bank credit lines (the "Liquidity Facility") equal to the amount of the commercial paper program provided by financial institutions that are required to be rated at least A-1 byStandard & Poor's and P-1 byMoody's Investor Services . The cost of borrowing under the Liquidity Facility would typically be higher than the cost of issuance under our commercial paper program. AtSeptember 30, 2021 , no borrowings were outstanding under the commercial paper program and no borrowings were outstanding under the Liquidity Facility. The Liquidity Facility is our only revolving credit facility that requires lenders to maintain minimum credit ratings. OnJuly 16, 2021 , we amended and extended the Liquidity Facility toJuly 16, 2026 . Our unsecured$1,250 million 364-day Revolving Credit Agreement (the "$1.25 Billion Credit Agreement") with a group of lenders, comprising a$1,000 million tranche ("Tranche A") and a$250 million tranche ("Tranche B"), was scheduled to mature onOctober 21, 2021 . OnJuly 16, 2021 , we entered into an unsecured$1 billion 364-day Revolving Credit Agreement (the "$1 Billion Credit Agreement"), with a group of lenders scheduled to mature onJuly 15, 2022 .Bunge may, from time to time, request one or more of the existing or new lenders to increase the total participations under the$1 Billion Credit Agreement by an aggregate amount up to$250 million pursuant to an accordion provision. Borrowings will bear interest at LIBOR plus an applicable margin, as defined in the$1 Billion Credit Agreement. The$1 Billion Credit Agreement replaces the existing$1.25 Billion Credit Agreement. We had no borrowings outstanding atSeptember 30, 2021 under the$1 Billion Credit Agreement. Our unsecured committed$1,100 million five-year syndicated revolving credit agreement (the "$1.1 Billion Credit Agreement") with certain lenders party thereto, was scheduled to mature onDecember 14, 2023 . OnJuly 16, 2021 , we entered into an unsecured committed$1.35 billion 5-year Revolving Credit Agreement ("$1.35 Billion Credit Agreement") maturing onJuly 16, 2026 . We may, from time to time, request one or more of the existing lenders or new lenders to increase the total commitments under the$1.35 Billion Credit Agreement by up to$200 million pursuant to an accordion provision. Borrowings will bear interest at LIBOR plus an applicable margin, as defined in the$1.35 Billion Credit Agreement. The$1.35 Billion Credit Agreement replaces the existing$1.1 Billion Credit Agreement. We had no borrowings outstanding atSeptember 30, 2021 under the$1.35 Billion Credit Agreement. We had no borrowings outstanding atSeptember 30, 2021 under our$1,750 million unsecured committed syndicated revolving credit facility with certain lenders party thereto maturingDecember 12, 2022 (the "$1.75 Billion 2022 Facility"). Borrowings under the$1.75 Billion 2022 Facility bear interest at LIBOR plus a margin, which will vary from 0.30% to 1.30% per annum, based on the credit ratings of our senior long-term unsecured debt. The applicable margin is also subject to certain premiums or discounts tied to criteria determined by certain sustainability targets. We also pay a fee that varies from 0.10% to 0.40% per annum, based on the utilization of the$1.75 Billion 2022 Facility. We may, from time to time, with the consent of the facility agent, request one or more of the existing lenders or new lenders to increase the total commitments under the$1.75 Billion 2022 Facility by up to$250 million pursuant to an accordion provision. We had no borrowings outstanding atSeptember 30, 2021 under our unsecured committed$865 million revolving credit facility, maturingSeptember 6, 2022 (the "$865 Million 2022 Facility"). Borrowings under the$865 Million 2022 Facility bear interest at LIBOR plus an applicable margin based on the credit ratings of our senior long-term unsecured debt. OnFebruary 23, 2021 , we entered into an unsecured committed$375 million 364-day Revolving Credit Agreement (the "$375 Million Credit Agreement") with a lender. The$375 Million Credit Agreement will bear interest at LIBOR plus an applicable margin, as defined in the$375 Million Credit Agreement. The$375 Million Credit Agreement was scheduled to mature onFebruary 22, 2022 . OnJuly 16, 2021 , we terminated the$375 Million Credit Agreement. In addition to committed credit facilities, from time to time, through our financing subsidiaries, we enter into bilateral short-term credit lines as necessary based on our financing requirements. AtSeptember 30, 2021 , there were no borrowings outstanding under these bilateral short-term credit lines. Short and long-term debt - Our short and long-term debt decreased by$813 million , or 11.2%, to$6,475 million atSeptember 30, 2021 , from$7,288 million atDecember 31, 2020 , primarily due to increased cash generated from operations, excluding beneficial interests in securitized trade receivables. For the nine months endedSeptember 30, 2021 , our average short and long-term debt outstanding was approximately$7,455 million , compared to approximately$5,715 million for the nine months endedSeptember 30, 2020 . Our long-term debt balance, including the current portion of long-term debt, was$5,324 million atSeptember 30, 2021 , compared to$4,460 million atDecember 31, 2020 , an increase of$864 million , or 19.4%. OnMay 14, 2021 , we completed the sale and issuance of$1 billion aggregate principal amount of 2.750% unsecured senior notes (the "2.75% Senior Notes") dueMay 14, 2031 . The 2.75% Senior Notes are fully and unconditionally guaranteed by us. The offering was made pursuant to a shelf registration statement on Form S-3 (Registration No. 48 -------------------------------------------------------------------------------- Table of Contents 333-231083) filed by us and our 100% owned finance subsidiaryBunge Limited Finance Corp. with theU.S. Securities and Exchange Commission . Interest on the 2.75% Senior Notes is payable semi-annually in arrears in November and May of each year, commencing onNovember 14, 2021 . At any time prior toFebruary 14, 2031 (three months before maturity of the 2.75% Senior Notes), we may elect to redeem and repay the 2.75% Senior Notes, at any time in whole, or from time to time in part, at a redemption price substantially equal to 100% of the principal amount of the 2.75% Senior Notes being redeemed on the redemption date. The net proceeds of the offering were approximately$990 million after deducting underwriting commissions, the original issue discount and offering fees and expense payable by us. We used the net proceeds from this offering for general corporate purposes, including the repayment of certain short-term debt. OnFebruary 25, 2021 , we entered into an unsecured syndicated$250 million 364-day term loan (the "$250 Million Term Loan") with a group of lenders. The$250 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the$250 Million Term Loan agreement. The$250 Million Term Loan matures onFebruary 24, 2022 and was fully drawn as ofSeptember 30, 2021 . OnFebruary 23, 2021 , we entered into an unsecured$125 million 364-day term loan (the "$125 Million Term Loan") with a lender. The$125 Million Term Loan bears interest at LIBOR plus an applicable margin, as defined in the$125 Million Term Loan agreement. The$125 Million Term Loan was scheduled to mature onFebruary 22, 2022 . OnJuly 16, 2021 , we prepaid the outstanding balance of the$125 Million Term Loan. The following table summarizes our short-term debt atSeptember 30, 2021 . Average Balance Outstanding Highest Balance During Quarter Weighted Average Balance at Weighted Average Outstanding During Ended
Interest Rate
September 30, Interest Rate at Quarter Ended September 30, During Quarter Ended
(US$ in millions) 2021 September 30, 2021 September 30, 2021 2021 September 30, 2021
Bank borrowings (1) $ 1,151 4.58 % $ 1,826 $ 1,474 3.39 %
Commercial paper - - % - - - %
Total $ 1,151 $ 1,826 $ 1,474
(1) Includes $401 million of local currency bank borrowings in certain Central
and Eastern European, South American and Asia-Pacific countries at a weighted
average interest rate of 11.02% as of September 30, 2021 .
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The following table summarizes our short and long-term indebtedness:
September 30, December 31,
(US$ in millions) 2021 2020
Short-term debt: (1)
Short-term debt (2) $ 1,151 $ 2,828
Current portion of long-term debt 510 8
Total short-term debt 1,661 2,836
Long-term debt (3):
Term loan due 2024 - three-month Yen LIBOR plus 0.75% (Tranche A)
274 297
Term loan due 2024 - three-month LIBOR plus 1.30% (Tranche B) 89 89
3.00% Senior Notes due 2022 400 399
1.85% Senior Notes due 2023 - Euro 926 982
4.35% Senior Notes due 2024 597 597
1.63% Senior Notes due 2025 596 595
3.25% Senior Notes due 2026 697 696
3.75% Senior Notes due 2027 596 595
2.75% Senior Notes due 2031 989 -
Other 160 210
Subtotal 5,324 4,460
Less: Current portion of long-term debt (510) (8)
Total long-term debt 4,814 4,452
Total debt $ 6,475 $ 7,288
(1) Includes secured debt of $17 million and $1 million at September 30, 2021
and December 31, 2020 , respectively.
(2) Includes $401 million and $558 million of local currency bank borrowings in
certain Central and Eastern European, South American and Asia-Pacific countries
at a weighted average interest rate of 11.02% and 24.54% as of September 30,
2021 and December 31, 2020 , respectively.
(3) Includes secured debt of $21 million and $5 million at September 30, 2021
and December 31, 2020 , respectively.
Credit Ratings -
Short-term Long-term
Debt (1) Debt Outlook
Standard & Poor's A-1 BBB Stable
Moody's P-1 Baa2 Stable
Fitch (2) BBB- Stable
(1) Short-term debt rating applies only to
Our debt agreements do not have any credit rating downgrade triggers that would accelerate maturity of our debt. However, credit rating downgrades would increase our borrowing costs under our syndicated credit facilities and, depending on their severity, could impede our ability to obtain credit facilities or access the capital markets in the future on competitive
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terms. A significant increase in our borrowing costs could impair our ability to
compete effectively in our business relative to competitors with higher credit
ratings.
Our credit facilities and certain senior notes require us to comply with
specified financial covenants including minimum net worth, minimum current
ratio, a maximum debt to capitalization ratio and limitations on secured
indebtedness. We were in compliance with these covenants as of September 30,
2021 .
Equity
Total equity is set forth in the following table:
September 30, December 31,
(US$ in millions) 2021 2020
Equity:
Convertible perpetual preference shares $ 690 $ 690
Common shares 1 1
Additional paid-in capital 5,530 5,408
Retained earnings 8,830 7,236
Accumulated other comprehensive income (loss) (6,436) (6,246)
(1,120) (1,020)
Total Bunge shareholders' equity 7,495 6,069
Noncontrolling interest 136 136
Total equity $ 7,631 $ 6,205
Total Bunge shareholders' equity was $7,495 million at September 30, 2021 ,
compared to $6,069 million at December 31, 2020 , an increase of $1,426 million .
The increase during the nine months ended September 30, 2021 was primarily due
to $1,847 million of Net income attributable to Bunge and $76 million from the
issuance of common shares under our share based compensation programs, partially
offset by $190 million of translation losses, and $221 million and $25 million
of declared dividends to common and preferred shareholders, respectively.
As of September 30, 2021 , we had 6,899,683 of 4.875% cumulative convertible
perpetual preference shares outstanding with an aggregate liquidation preference
of $690 million . Each convertible perpetual preference share has an initial
liquidation preference of $100 , which will be adjusted for any accumulated and
unpaid dividends. The convertible perpetual preference shares carry an annual
dividend of $4.875 per share, payable quarterly. As a result of adjustments made
to the initial conversion price because cash dividends paid on Bunge Limited's
common shares exceeded certain specified thresholds, each convertible perpetual
preference share is convertible, at the holder's option, at any time into 1.2749
Bunge Limited common shares, based on the conversion price of $78.4346 per
share, subject to certain additional anti-dilution adjustments (which represents
8,796,406 Bunge Limited common shares at September 30, 2021 ). At any time, if
the closing price of our common shares equals or exceeds 130% of the conversion
price for 20 trading days during any consecutive 30 trading days (including the
last trading day of such period), we may elect to cause the convertible
perpetual preference shares to be automatically converted into Bunge Limited
common shares at the then-prevailing conversion price. The convertible perpetual
preference shares are not redeemable by us at any time.
Share repurchase program - In May 2015 , we established a program for the
repurchase of up to $500 million of our issued and outstanding common shares.
Under this program, 1,298,384 common shares were repurchased for $100 million
during the three and nine month periods ended September 30, 2021 . There were no
shares repurchased under this program during the three months ended September
30, 2020 , and 2,546,000 common shares were repurchased for $100 million during
the nine months ended September 30, 2020 . Total repurchases under the program
from its inception in May 2015 through September 30, 2021 were 8,551,824 shares
for $500 million , thereby completing the program.
Effective October 25, 2021 , our Board of Directors approved a new program for
the repurchase of up to $500 million of our issued and outstanding common
shares. The program has no expiration date.
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