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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Commission File Number 001-16625

BUNGE LIMITED
(Exact name of registrant as specified in its charter)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    ý            No    o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes    ý No    o

        As of August 4, 2004, the number of common shares issued and outstanding of the registrant was:

Common shares, par value $.01; 110,016,156

BUNGE LIMITED

Table of Contents

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

BUNGE LIMITED AND SUBSIDIARIES

         CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

         (United States Dollars in Millions, except per share data)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUNGE LIMITED AND SUBSIDIARIES

         CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

         (United States Dollars in Millions, except share data)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUNGE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(United States Dollars in Millions)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUNGE LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION

        The accompanying unaudited condensed consolidated financial statements of Bunge Limited and its subsidiaries (Bunge) have been prepared in accordance with United States of America generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The consolidated balance sheet at December 31, 2003 has been derived from Bunge's audited financial statements at that date. Operating results for the three and six months ended June 30, 2004 are not necessarily indicative of the results to be expected for the year ending December 31, 2004. The financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2003 included in Bunge's 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission on July 27, 2004.

        Reclassifications—Certain reclassifications were made to the prior period condensed consolidated financial statements to conform to the current period presentation.

2.    NEW ACCOUNTING STANDARDS

        In March 2004, the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 04-2 (Issue No. 04-2), Whether Mineral Rights Are Tangible or Intangible Assets, that mineral rights, as defined in Issue No. 04-2, are tangible assets. There is an inconsistency between this consensus that mineral rights are tangible assets and the characterization of mineral rights as intangible assets in Statement of Financial Accounting Standards (SFAS) No. 141 and No. 142. In April 2004, the FASB issued proposed Staff Position (FSP) No. FAS 141-a and 142-a, Interaction of FASB Statements No. 141, Business Combinations and No. 142, Goodwill and Other Intangible Assets and EITF Issue No. 04-2, Whether Mineral Rights Are Tangible or Intangible Assets to eliminate the inconsistency between EITF Issue No. 04-2 and SFAS No. 141 and No. 142. The guidance in this FSP would be effective for the first reporting period beginning after the date that this FSP is finalized. Early application of this guidance is permitted in periods for which financial statements have not yet been issued. Bunge has applied the EITF and the proposed FSP to its consolidated balance sheet beginning as of March 31, 2004 and has reclassified the prior period consolidated balance sheet to conform to this presentation.

        In January 2004, the FASB issued FSP No. FAS 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The Act to which FSP 106-1 relates was signed into law in December 2003, introduces a prescription drug benefit under Medicare as well as a federal subsidy, under certain conditions, to sponsors of retiree health care benefit plans. Bunge has elected a one-time deferral of the accounting for the effects of the Act, as permitted by this FSP. In May 2004, the FASB issued FSP No. FAS 106-2 that superceded FASB FSP No. FAS 106-1. FSP No. FAS 106-2 is effective for interim periods beginning after June 15, 2004 and allows two alternate methods of transition, retroactive application to the date of enactment of the Act or prospective application from the date of adoption of this statement. This Staff Position will require a remeasurement of the applicable Plans' assets and benefit obligations at the applicable date.

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3.    INVENTORIES

        Inventories consist of the following:

(1)

Readily marketable inventories are agricultural commodities inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms.

(2)

Other consists of agribusiness inventories, other than readily marketable inventories, carried at lower of cost or market.

4.    BUSINESS COMBINATIONS

        Acquisition of Bunge Brasil Minority Interest—Bunge intends to buy back the outstanding minority interest in Bunge Brasil S.A., its publicly traded Brazilian subsidiary, through a tender offer pursuant to Brazilian law. The tender offer is expected to close in the second half of 2004, subject to receipt of regulatory approvals.

        Polska Oil—In April 2004, Bunge acquired the remaining 40% of Polska Oil Investment B.V., a holding company for certain of Bunge's Polish operations, from the European Bank for Reconstruction and Development, or EBRD, pursuant to the terms of an amended and restated shareholders agreement between the parties. The purchase price of the EBRD stake in Polska Oil was approximately $27 million.

        J. Macêdo Exchange Transaction—In the quarter ended March 31, 2004, Bunge completed an exchange transaction with J. Macêdo, whereby Bunge exchanged its Brazilian domestic retail flour assets for J. Macêdo's industrial flour assets and approximately $7 million in cash. The assets exchanged were comprised primarily of brands. Bunge recognized a pre-tax gain of $5 million as a result of this transaction, which is included in other income (expense)-net in the condensed consolidated statement of income for the six months ended June 30, 2004.

        Acquisition Restructuring—In connection with the acquisition of Cereol S.A., Bunge has accrued termination benefits and facility related realignment obligations as part of its integration plan (the Plan). The Plan is designed to streamline personnel and realign facilities acquired from Cereol. These obligations, which totaled $35 million, have been accrued as part of the purchase price and are included in other current liabilities in the condensed consolidated balance sheets. Bunge's integration process and the Plan regarding this acquisition, which included an evaluation of these issues was

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finalized in 2003. Of the obligations accrued, $29 million relate to employee termination and $6 million relate to facility realignment. The following table summarizes activity related to the Plan:

        Payments related to employee termination and facility realignment obligations are expected to be substantially completed in 2005. The Plan is expected to be funded by cash flows from operations. No significant unresolved issues exist related to the Plan. Any adjustments to the Plan will be reported as an adjustment to net income.

5.    OTHER CURRENT ASSETS

        Other current assets consist of the following:

6.    GOODWILL

        At June 30, 2004, the changes in the carrying value of goodwill by segment are as follows:

(1)

Bunge's Brazilian subsidiary's tax deductible goodwill is in excess of its book goodwill. For financial reporting purposes, the tax benefits attributable to the excess tax goodwill are first used to reduce goodwill and then intangible assets to zero, prior to recognizing any income tax benefit in the condensed consolidated statements of income.

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7.    OTHER CURRENT LIABILITIES

        Other current liabilities consist of the following:

8.    LONG-TERM DEBT

        In June 2004, Bunge entered into various interest rate swap agreements. Bunge uses interest rate swaps to manage its exposure to fluctuations in interest rates on a portion of its fixed rate debt instruments. The interest rate swap agreements are accounted for as fair value hedges. The derivatives have been recorded at fair value in the condensed consolidated balance sheet within other assets with changes in fair value recorded currently in earnings. Additionally, the carrying amount of the associated debt is adjusted through earnings for changes in the fair value due to changes in interest rates. Ineffectiveness is recognized to the extent that these two adjustments do not offset. The derivatives were assumed to be perfectly effective under the shortcut method of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The differential to be paid or received on changes in interest rates is recorded as an adjustment to interest expense. The interest rate swaps settle every six months until expiration.

        The following table summaries these transactions as of June 30, 2004:

(1)

Interest is payable in arrears based on a forecasted rate of six-month LIBOR minus a spread.

        In April 2004, Bunge completed the sale of $500 million aggregate principal amount of unsecured senior notes bearing interest at a rate of 5.35% per year that mature in April 2014. The senior notes were issued by Bunge's wholly owned finance subsidiary, Bunge Limited Finance Corp., and are fully and unconditionally guaranteed by Bunge. Interest on the senior notes is payable semi-annually in arrears in April and October of each year, commencing in October 2004. Bunge used the net proceeds of this offering, of approximately $496 million, for the repayment of outstanding indebtedness.

9.    RELATED PARTY TRANSACTIONS

        Bunge sells soybean meal and fertilizer products to Seara Alimentos S.A., a subsidiary of Mutual Investment Limited engaged in the business of meat and poultry production. These sales were

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$3 million and $5 million for the three and six months ended June 30, 2004, respectively, and $1 million and $3 million for the three and six months ended June 30, 2003, respectively.

        In addition, Bunge sold soybeans and related soybean products to The Solae Company, its joint venture with DuPont, which totaled $49 million and $94 million for the three and six months ended June 30, 2004, respectively. Bunge also purchased soybean meal and soybean oil from Solae, which totaled $22 million and $28 million for the three and six months ended June 30, 2004, respectively. Bunge believes these transactions are recorded at values similar to those with third parties.

10.    EMPLOYEE BENEFIT PLANS