Bunge Limited and Corn Products to Combine Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vincent Andrews - Morgan Stanley - Analyst : Good morning everyone, and congratulations.

Question: Vincent Andrews - Morgan Stanley - Analyst : A few questions here, I guess why not start with the guidance just to get that out of the way. Based on our estimates, I'm not surprised that you've raised the numbers to this level, but you've been very conservative with guidance to date. Is it fair to say that all the same caveats that you've been giving us all year in relation to the farmer and fertilizer prices and so forth apply to this new guidance as well?

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay, and -- Mark, is that you?

Question: Vincent Andrews - Morgan Stanley - Analyst : Oh, okay. Could you -- is there any sort of split that you could give between Fertilizer and Agribusiness in terms of the guidance raise?

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay. Okay. And then just moving onto the deal, Alberto, why now? Obviously, there are lots of great attributes of Corn Products, but some of those -- the majority of them were also true two or three years ago when the stock was at a much lower valuation or share price.

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay. Last one, and then I'll pass it along, interesting time to be making this acquisition with corn well north of $7, and your standalone business really -- the price of corn is -- you don't have too much where you're trying to pass through a higher price of corn, and that's not going to be the same now. How are you thinking about the high-fructose corn syrup business in the U.S.? And I know Corn Products is well hedged for 2008, but how did you deal -- or, how do you think about that risk on a go-forward basis given where corn prices are?

Question: Vincent Andrews - Morgan Stanley - Analyst : All right. Thanks, so much. I'll pass it along. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Ken Zaslow - BMO Capital Markets - Analyst : Good morning, everyone.

Question: Ken Zaslow - BMO Capital Markets - Analyst : Pretty good. Alberto, I guess my first question is when you look at CPO, does this contribute to your growth outlook or to your consistency of earnings over the next three to five years? How do you see it playing out?

Question: Ken Zaslow - BMO Capital Markets - Analyst : So, do you expect to be raising your long-term growth outlook projections from what you have historically said? And, how long will that take before we see that?

Question: Ken Zaslow - BMO Capital Markets - Analyst : But, you do think that it will add incremental growth to your business model?

Question: Ken Zaslow - BMO Capital Markets - Analyst : And does this -- this does not change your CapEx program or anything like that, does it?

Question: Ken Zaslow - BMO Capital Markets - Analyst : Sam, I have a question for you as well.

Question: Ken Zaslow - BMO Capital Markets - Analyst : You know, you kind of look at consensus for '09, you kind of put an average multiple on you for the history, you know you get roughly about a $53 stock price. Why sell out at $56? Does that give us the idea that maybe consensus might be wrong on '09 numbers?

Question: Ken Zaslow - BMO Capital Markets - Analyst : Same math we see.

Question: Ken Zaslow - BMO Capital Markets - Analyst : We -- you see the same math we see on -- out there.

Question: Ken Zaslow - BMO Capital Markets - Analyst : Okay.

Question: Ken Zaslow - BMO Capital Markets - Analyst : And my last question, Alberto in the press release, you discussed that you think the cultures are very similar. I kind of would argue it a little differently than that. Can you give us an idea of why you think the cultures are very similar?

Question: Ken Zaslow - BMO Capital Markets - Analyst : Great. I appreciate it. Thanks, guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David Driscoll - Citigroup - Analyst : Good morning, everyone.

Question: David Driscoll - Citigroup - Analyst : Congratulations, everybody.

Question: David Driscoll - Citigroup - Analyst : This is a big deal. Just a quick comment on the last question there, Alberto, you said you saw this thing as incremental to growth. Did you just mean incremental in terms of like technically, it'll add net income? Or on a percentage basis, it doesn't seem even remotely possible that this is incremental on a percentage growth basis given that you've been raising guidance in the magnitude of dollars and $2 every time we seem to get a new release, which is wonderful but nonetheless, it would seem that with $7 corn, kind of big picture here, the growth rate from the Corn Products assets combined with the growth rate of your assets in these current environments, it would seem that this is growth dilutive. How would you respond to that?

Question: David Driscoll - Citigroup - Analyst : I look forward to that. A couple of more questions. Does Corn Products benefit from the Bunge tax rate? Will we actually see the CPO tax rate go down to the Bunge level?

Question: David Driscoll - Citigroup - Analyst : That goes right to the next question. What's the timing of the synergies? And then if you could just give us some ball park break down between costs and revenue? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David Driscoll - Citigroup - Analyst : I've got one more for Bunge and then a couple for Sam. So Jackie, one more question here on the balance sheet. Can, number one actually, do you have the new credit ratios under the pro forma balance sheet? And then second question here is do you see the need in the near term for Bunge to raise cash through an equity offering?

Question: David Driscoll - Citigroup - Analyst : Okay. Great. Thanks for all the time here. Sam, I've got a couple of questions for you.

Question: David Driscoll - Citigroup - Analyst : HFCS in 2009, certainly with $7 corn, this -- I certainly feel like the plan to grow earnings in '09 is challenged under a $7 corn environment. Can you just frame up for us what you see or how you see the business shaping out in '09? I mean, even if it's not numeric, I'd still appreciate any comments on the ability to raise prices in this kind of environment, all the way to actually not just simply covering the cost of corn, but to seeing profit improvement? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David Driscoll - Citigroup - Analyst : Quick question on international pricing, Sam. This is the one that's always kind of on a spot basis that you realize the current price of corn almost immediately. How are you seeing pricing go through those international ops today?

Question: David Driscoll - Citigroup - Analyst : Final question, any weakness on high fructose volumes because of softness in the beverage industry? We've been hearing some comments on this.

Question: David Driscoll - Citigroup - Analyst : I appreciate all the color here and thanks a lot. Congratulations on the transaction.

Question: Christine McCracken - Cleveland Research - Analyst : Good morning.

Question: Christine McCracken - Cleveland Research - Analyst : Just wanted to touch, I guess follow-up, on Dave's question relative to high fructose contracting. Because of the timing, the deal closing, is would there be any change to either the process of negotiations or and/or how you handle those corn contracts that you generally lock in at the end of the year?

Question: Christine McCracken - Cleveland Research - Analyst : So you're going to -- you're not going to change your risk management practices relative to corn?

Question: Christine McCracken - Cleveland Research - Analyst : Great. And then just in terms of, again, kind of the fourth quarter timing on the deal closing, is that tied to the complexity of all the different locations that you operate in as a collective company? Or is that really just kind of the earliest that you can see it all getting done? Is there -- there's no antitrust issues at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Christine McCracken - Cleveland Research - Analyst : And then, Alberto, just in terms of obviously Corn Products is somewhat of a competitor to sugar in South America, wondering does this -- this wouldn't change your plans necessarily in terms of expanding into sugar, sugar-based ethanol in that market, is it?

Question: Christine McCracken - Cleveland Research - Analyst : Perfect. Just one last question, in terms of management of the corn wet milling business, are you working to retain several of the hot -- the Corn Products, kind of key management personnel? Can you comment on that at all?

Question: Christine McCracken - Cleveland Research - Analyst : Perfect. Congratulations.

Question: Christina McGlone - Deutsche Bank - Analyst : Good morning.

Question: Christina McGlone - Deutsche Bank - Analyst : Alberto, you had listed earlier to Vincent's question a bunch of reasons why you weren't ready earlier to do this transaction. And my impression was that your geographic footprint in kind of grain storage and logistics wouldn't really match up with CPO's geographic footprint. And I want to know what has changed now. I know you've grown in grain, in grain distribution logistics and I'm curious how does this footprint stack up now? Is there -- are you perhaps at a disadvantage to ADM because of bases being further away from CPO's facilities with your storage facilities?

Question: Christina McGlone - Deutsche Bank - Analyst : Okay. And then expanding on another further question, so in the oil seeds business, it's a very flow-through business and corn is much stickier and unable to hedge the co-products directly. I'm just -- I want to hear about your intelligence and your skill set in being able to manage corn versus oil seeds.

Question: Christina McGlone - Deutsche Bank - Analyst : Okay. And in terms of the total new business, I know Jackie said you don't have the pro formas, but the kind of contracted, fixed price business in North America and Canada. What would that represent in terms of the whole company, the new company's profits as a percentage?

Question: Christina McGlone - Deutsche Bank - Analyst : But that -- it seems to me to be less than 5%. So I was just wanted to get your read on that.

Question: Christina McGlone - Deutsche Bank - Analyst : Okay.

Question: Christina McGlone - Deutsche Bank - Analyst : Yes.

Question: Christina McGlone - Deutsche Bank - Analyst : Okay. And Sam, Jorge and John are staying on to the best of your knowledge?

Question: Christina McGlone - Deutsche Bank - Analyst : Okay. And just one last question. I wanted to understand the opportunity in Asia and Alberto, you mentioned China and introducing CPO to the food channel. Can you just give an update on what China's stance is in terms of corn used for various uses in China?

Question: Christina McGlone - Deutsche Bank - Analyst : Okay. Thank you.

Question: Robert Moskow - Credit Suisse - Analyst : Hi thanks. Congratulations and just a couple of questions. Alberto, is this the last acquisition you'll make in the corn sweetener space or do you think there's more consolidation opportunities in the U.S. beyond this one?

Question: Robert Moskow - Credit Suisse - Analyst : I'll move on. But -- no, but honestly, I mean, is there more room for consolidation in this industry overall? Whether you do it or somebody else does it in the U.S.?

Question: Robert Moskow - Credit Suisse - Analyst : Okay. And then you mentioned that this will make you a bigger provider to, say, a Kellogg that's buying soybean oil and high-fructose corn syrup, for example. How important is it for a Kellogg to get both of these products from one supplier? What does it mean for them and why is it a benefit to them? And maybe you could just give me a little bit more detail on how it creates cost savings for you?

Question: Robert Moskow - Credit Suisse - Analyst : And as part of that, then, I guess, Jackie, as you're working on the integration, will you integrate the sales forces of these two companies into one sales force? Or will you call on them separately for different products.

Question: Robert Moskow - Credit Suisse - Analyst : Okay. Well it, just logically though, it sounds like if you're doing that and then Bunge's doing that on their side, you still have two sales forces. It sounds like there's room for integration there. But you'll figure it out as you move along I suppose.

Question: Robert Moskow - Credit Suisse - Analyst : Lastly, on stevia, I hope I'm pronouncing it correctly.

Question: Robert Moskow - Credit Suisse - Analyst : Cargill's been giving it a lot of publicity lately. It's been getting a lot of publicity. Can you give me a sense of what the future is for that product and what kind of competitive threat it represents?

Question: Robert Moskow - Credit Suisse - Analyst : Okay. Thank you very much.

Question: David Driscoll - Citigroup - Analyst : Hi. Great. Thanks for taking the quick follow-up. I think nobody asked just the basic here, what's the accretion-dilution analysis, Jackie, in '09? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David Driscoll - Citigroup - Analyst : Alberto, I keep asking you this question on just about every conference call we're on. So it's sorry for the repetition here, but your earnings numbers keep going up like there's just an amazing event. Could you give us a comment on what you see for 2009? Again, even if you're not specific on a number, do you actually foresee continued earnings growth in '09 off the new base you set up this morning?

Question: David Driscoll - Citigroup - Analyst : Great. Well I appreciate the comments. Thank you everyone.