December 31,
(US$ in millions)				2004
Payable in U.S. Dollars:
	Long-term debt, variable interest rates indexed
		to LIBOR(1) plus 1.38% to 4.02%	$	36
Payable in Brazilian Reais:
	BNDES(2) loans, variable interest rate indexed
		to IGPM(3) plus 6.5% to 7.9%		134
	Other			23
Total variable rate long-term debt,
	including current maturities		$	193

(1)	LIBOR as of December 31, 2004 was 1.54%.
(2)	BNDES loans are Brazilian government industrial development loans.
(3)	IGPM is a Brazilian inflation index published by Fundação Getulio Vargas. The annualized rate for the year ended December 31, 2004 was 12.42%.

An increase in the interest rates on our long-term variable rate debt based on a 10% change in the LIBOR and IGPM rates at December 31, 2004 would increase the interest rates on our variable rate debt between 12 to 98 basis points, which would have no material effect on our operating results.

In addition to long-term debt, we have variable interest rate short-term debt and commercial paper with a balance of $541 million at December 31, 2004. The short-term debt is predominantly held with commercial banks and the interest rates are generally based on LIBOR plus a spread of 1% to 2%.

Our commercial paper is rated "A-1" by Standard & Poor's Rating Services and "P-1" by Moody's Investors Service, Inc. and the interest rates on our commercial paper borrowings are indexed to this rating. An increase in interest rates on our short-term debt based on a 10% change in LIBOR and a 10% change in the commercial paper interest rate for A-1/P-1 rated commercial paper at December 31, 2004 would increase the interest rate on our variable rate short-term debt approximately 24 basis points, which would have no material effect on our operating results.

interest rate derivatives In September 2004, we entered into treasury rate lock agreements with an aggregate notional amount of $500 million at a 10-year treasury yield of 4.15% with a settlement date of March 2005. The treasury rate lock agreements were not designated as hedging instruments. In the fourth quarter of 2004, we terminated these treasury rate lock agreements. We recorded a gain in other income (expense)—net in the consolidated statements of income of approximately $10 million relating to the cash settlement received on these derivative agreements for the year ended December 31, 2004.

In June 2004, we entered into various interest rate swap agreements to manage our interest rate exposure on a portion of our fixed rate debt. These swap agreements had an aggregate notional amount of $1 billion at weighted average fixed rates receivable of 4.375% and 5.35% and weighted average variable rates payable of 2.23% and 2.17%, with maturity dates of 2008 and 2014. These interest rate swap agreements were accounted for as fair value hedges. In September 2004, we terminated the June 2004 swap agreements and received $60 million in cash, which was comprised of $8 million of accrued interest and a $52 million gain on the net settlement of the June 2004 swap agreements. The $8 million of accrued interest was recorded as a reduction of interest expense for the year ended December 31, 2004 in the consolidated statements of income and the $52 million gain was recorded as an adjustment to the carrying amount of the related debt for the year ended December 31, 2004 in the consolidated balance sheet. The $52 million gain will be amortized to earnings over the remaining term of the debt, which ranges from four to nine years.

Concurrent with the September 2004 termination of the June 2004 swap agreements, we entered into various new interest rate swap agreements to manage our interest rate exposure on a portion of our fixed rate debt. We have accounted for these new swap agreements as fair value hedges.

The interest rate swaps used by us as derivative hedging instruments have been recorded at fair value in other liabilities in the consolidated balance sheets 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. As of December 31, 2004, we recognized no ineffectiveness related to the interest rate swap hedging instruments. The derivatives we entered into for hedge purposes are 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. We recorded $6 million of accrued interest as a reduction of interest expense in the consolidated statements of income for the year ended December 31, 2004.

The following table summarizes our outstanding interest rate swap agreements as of December 31, 2004.

		Maturity							Fair Value
December 31,
(US$ in millions)			2008			2014			Total		2004
Receive fixed/pay variable
	notional amount	$	500		$	500		$	1,000	$	(12	)
Weighted average variable
	rate payable(1)		3.28	%		3.15	%
Weighted average fixed
	rate receivable		4.375	%		5.35	%

(1)	Interest is payable in arrears based on a forecasted rate of six-month LIBOR plus a spread.

forward-looking statements
This report contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," "will," "expect," "anticipate," "believe," "intend," "estimate," "continue" and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these forward-looking statements. The following important factors, among others, could affect our business and financial performance: governmental policies affecting our business, including agricultural and trade policies and laws governing environmental liabilities; our funding needs and financing sources; changes in foreign exchange policy or rates; the outcome of pending regulatory and legal proceedings; our ability to complete, integrate and benefit from acquisitions, divestitures, joint ventures and strategic alliances; estimated demand for the commodities and other products that we sell and use in our business; industry conditions, including the cyclicality of the agribusiness industry and unpredictability of the weather; agricultural, economic, social and political conditions in the primary markets where we operate; and other economic, business, competitive and/or regulatory factors affecting our business generally.

The forward-looking statements included in this report are made only as of the date of this report, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

All information that is not historical in nature disclosed under "Guarantees, Contractual Obligations and Off-Balance Sheet Arrangements" is deemed to be a forward-looking statement.