In 2003, Bunge recorded a pretax non-cash impairment charge of $40 million relating to its fixed assets at its European oilseed processing facilities. These facilities were older, less efficient crushing facilities, and these operations were dependent on soybeans imported from North and South America for production. The European operations experienced operating losses during 2003. During the fourth quarter of 2003, Bunge updated its operating forecast, which included the effects of certain events occurring in the fourth quarter, such as the shortfall in the North American soy crop, increased export tariffs for Brazilian soy exports, and increased freight rates. Furthermore, Bunge determined that maintenance capital expenditures for the facilities would be substantially higher than previously forecasted. As a result of these factors, Bunge tested the assets for impairment based upon an undiscounted cash flow model and determined that these cash flows would not recover the carrying value of the assets. The impairment was measured based upon the amount by which the carrying value exceeded the discounted cash flows.

In 2002, Bunge recorded pretax non-cash impairment charge of $5 million relating to its North American edible oil bottling facilities. The impairment charge was attributable to a planned disposal of a facility in the edible oil products segment. The carrying value of these assets was written down to their estimated fair value at December 31, 2002.

Bunge has recorded these impairment charges in cost of goods sold in the consolidated statements of income for the years ended December 31, 2004, 2003 and 2002.

restructuring In connection with the 2004 impairment charges in its agribusiness segment, Bunge recorded $7 million of restructuring charges related to employee termination benefit obligations for 62 plant and administrative employees in the oilseed processing operations as part of its restructuring plan. These restructuring charges were included in cost of goods sold for the year ended December 31, 2004 and in other current liabilities on the consolidated balance sheet at December 31, 2004. The restructuring plan is designed to streamline Bunge's costs and simplify its oilseed processing operations in Western Europe. Bunge's restructuring plan is expected to be finalized in 2005. Payments related to employee termination obligations are expected to be paid in 2005. The plan is expected to be funded by cash flows from operations. No significant unresolved issues exist related to the restructuring plan.