Bunge Ltd

Good morning and welcome to the Bungee Global Second Quarter 2025 Earnings Release and Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mark Hayden, Vice President of Investor Relations. Please go ahead.

Thank you, Drew. Thank you all for joining us this morning for our second quarter earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center at our website on bungie.com for events and presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measure posted on our website as well. I'd like to direct you to slide two to remind you that today's presentation includes forward-looking statements that reflect Bungie's current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bungie has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bungie's Chief Executive Officer, John Neville, Chief Financial Officer. I'll now turn the call over to Greg.

Thank you, Mark, and good morning, everyone. Before we get started, I just wanted to mention, you may have noticed, Mark's now leading IR, and I wanted to give a quick thank you to Ruthann for her years of service in IR, and she'll now be leading our government affairs team globally, so they'll still be working closely together. So welcome. This is a pivotal quarter for Bungie, and I want to begin by thanking the team for continued focus and execution. We successfully navigated a highly complex period, both internally and externally, and and delivered better than expected results for the quarter, especially given the market conditions. The team continues to demonstrate agility in an ever-changing environment, while also making significant progress against our strategic priorities. We're very pleased to have completed our combination with Viterra earlier this month, creating the premier agribusiness solutions company, positioned to address some of the most pressing needs of the 21st century for farmers and consumers across food, feed, and fuel. This has been a long time in the making, and we use that time well. We're finding our integration plans and preparing for execution. Now that the combination is complete, teams are moving quickly to identify and capture cost savings, along with commercial opportunities we couldn't pursue before closing. We're already moving to implement logistical and transportation efficiencies the potential to reduce expenses between origin and destination. These are durable synergies that will benefit everyone across the value chain. Our teams have hit the ground running. I've been impressed by the seamless collaboration, partnership, unified sense of purpose across the company. We remain as excited as ever about our path ahead. Viterra brings a very talented team, robust network of strategically positioned assets. We move into integration phase. We are leveraging core aspects of the playbook that has served Bungie so well over the past several years. We'll move quickly to apply many of the same proven standardized approaches to reach the full potential for a combined company. This includes utilizing the value chain operating model, our global functional centers of excellence, and structuring our reward system to ensure our teams are working together toward the common goals of our global company while always staying aligned with our shareholders. We are applying a global approach to risk management that aligns with the earnings power of our combined company and today's environment, positioning us to better capture value from our expanded global asset base while prudently allocating risk to the best opportunities. As we integrate these two highly complementary businesses, we're optimistic about the value we will generate. With the rigorous integration planning that's been done, we have a clear path to bringing our companies together, capturing meaningful efficiencies and operational synergies. I'm especially excited about the potential commercial synergies. We're already identifying opportunities to run a more efficient processing and logistics network, use our combined information to better manage risk for Bungie and our customers. It's been great to see the teams working quickly to identify and tackle these areas together. Beyond Viterra, we continue to focus on our broader strategic priorities, including ongoing portfolio optimization. Earlier this month, we announced the completion of the sale of U.S. corn milling, which further simplifies our business along our global value chains. Shifting to our operating performance, our second quarter results were largely driven by better than expected processing results in South America, higher margins in Brazil and Argentina. Finance specialty oils was negatively impacted by uncertainty related to U.S. biofuel policy. John will go into more detail about the second quarter financials in a moment. Looking ahead, We are maintaining our full year adjusted EPS outlook of approximately $7.75 to the legacy standalone bungie. It no longer includes the second half earnings from our corn milling business due to its sale, which closed on June 30th. With that, I'll turn it over to John for a deeper look at our financials and outlook.

John? Thanks, Greg, and good morning, everyone. Now let's turn to the earnings highlights on slide five. As Greg mentioned, the second quarter exceeded our expectations, primarily by processing. The team's execution allowed us to benefit from late quarter market volatility. Our reported second quarter earnings per share was $2.61, compared to $0.48 in the second quarter of 2024. Our reported results included a favorable market-to-market timing difference of $0.69 per share, a net favorable impact of $0.61 per share from notable items, consisting of an 87-cent gain, sale of our U.S. corn milling business, set in part by 26 cents transaction and integration-related costs related to VITERA. Adjusted EPS was $1.31 in the second quarter versus $1.73 in the prior year. Adjusted segment earnings before interest and taxes, EBIT, was $376 million in the quarter versus $519 million last year. In processing, high results in South America, while Brazil and Argentina benefited from large soybean crops through farmer selling, high results in Asia, more than offset by low results in Europe and North America. Merchandising improved performance in global grains and oils, more than offset by low results in our financial services and ocean freight businesses. While largely driven by North America and Europe, Results in refined and specialty oils were down in all regions, reflecting a more balanced global supply and demand environment and uncertainty in U.S. biofuel policy. Milling, higher results in North America and offset by lower results in South America. In corporate and other, decrease in corporate expenses was primarily driven by performance-based compensation. Prior other results include a loss of $21 million from the Sugar and Bioenergy Joint Venture that we divested in the fourth quarter of last year. An interest expense of $60 million was down in the quarter compared to last year due to lower average net interest rates. Increased capitalized interest on capital projects and higher interest income from investments in interest-bearing. The increase in income tax expense for the quarter was primarily due to lower pre-tax incomes. Let's turn to slide six, where you can see our adjusted EPS and EBIT trends over the past four years, along with the trailing 12 months. Over this period, our team has excelled in managing a variety of different market environments, while also executing on numerous internal initiatives, most notably VITERI integration planning. Recent performance trend reflects a more balanced global supply and demand environment, the impact of ongoing trade, and biofuel uncertainty that has created a very spot market environment. Slide 7 details our capital allocation. To date, we have generated $693 million of adjusted funds from operations. After allocating $133 million to sustaining cap bags, which includes maintenance, environmental health, and safety, we had $560 million of discretionary cash flow available. The $185 million in dividends invested $583 million in growth and productivity-related capex. We also received $776 million of cash proceeds related to the sale of our U.S. corn milling business, the sale of an interest in our soy crush footprint in Spain to Repsol, and a final payment for the sale of our interest in the sugar and bioenergy joint venture that closed in 2024. This resulted in approximately $570 million of retained cash flow. Moving to slide eight, the year-end readily marketable inventories, or RMI, exceeded our net debt by approximately $2.2 billion. Our adjusted leverage ratio reflects our adjusted net debt to adjusted EBITDA was 1.1 times in the second quarter. Slide nine highlights our liquidity position. At quarter end, we had committed credit facilities for approximately $8.7 billion, of which approximately $7.6 billion were unused, providing ample liquidity to manage the ongoing capital needs of our larger combined company. In addition, we had a cash balance of approximately $6.8 billion in anticipation of our merger with Viterra. I would also like to point out that following our closing of Viterra, S&P upgraded our credit rating to A-minus, reflecting our improved business risk profile, giving a step change in our scale and diversification. Let's turn to slide 10. For the early 12 months, adjusted ROIC was 8.4%, and ROIC was 7.4%. Adjusting for construction and progress for large multi-year projects not yet operating, in the excess cash on our balance sheet by term closing, adjusted ROIC increased by 1.6 percentage points and ROIC by approximately 1 percentage point. Moving to slide 11. During the 12 months, we produced discretionary cash flow of approximately $1.1 billion. Cash flow yielded 9.8% compared to our cost of equity of 8.2%. Please turn to slide 12 in our 2025 outlook. As Greg mentioned in his remarks, taking into account second quarter results, current margin of macro environment, and foreign coders, we continue to forecast full-year 2025 EPS of approximately $7.75. This forecast no longer includes second-half earnings in the corn milling business due to the sale on June 30, and also excludes the impact of ITERA, which closed on July 2. In agribusiness, full-year results are forecasted to be higher previous outlook driven by processing that remained down from last year. The finest specialty oils full-year results are expected to be down from our previous outlook, reflecting the softer second quarter performance down from last year. In milling, full-year results are expected to be down from our previous outlook, reflecting the sale of corn milling, but still in line with last year. Corporate and other full-year results are expected to be in line with our previous outlook, but favorable to last year. Additionally, the company expects the following for 2025. Adjusted annual effective tax rate in the range of 21% to 25%, an interest expense at the lower end of the range of $220 to $250 million, capital expenditures in the range of $1.5 to $1.7 billion, depreciation and amortization of approximately $490 million. Prior to reporting third quarter earnings, we anticipate providing a forecast for the buying company along with the historical BUNKI information included in a new segment reporting structure that will be used going forward for the combined company. With that, I'll turn things back over to Greg for some closing comments.

Thanks, John. Before we go into Q&A, I just want to offer a few closing thoughts. So when we first announced our combination with VITERA two years ago, we saw opportunities with the combined company to accelerate our strategy enhance our diversification across crops and geographies, and increase the impact of our investments. Those same benefits hold true today and are especially relevant as we navigate the current macro environment. With the greater diversification across assets, geographies, and crops, more data to provide us insight, supply and demand dynamics, we're even better positioned to serve our customers at both ends of the value chain, regardless of the market environment. And with the increased scale of our platform, we will get a better return on investments to further improve our business, including technology in areas such as data analytics to enhance supply chain transparency, logistics planning, processing efficiency, risk management, and decision-making support. I'm confident that we have the right people, platform, and strategies in place deliver value for our stakeholders, farmers to consumers across feed, food, and fuel markets. We will have a stronger, better positioned company with even greater flexibility and resources to address global food security and renewable energy needs. With that, we'll turn to Q&A.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Strzelczyk with BMO. Please go ahead. Mr. Stralsik, your line is open. Is it possible your line is muted accidentally? Okay, we'll move to the next question then. The next question comes from Puran Sharma with Stevens Inc. Please go ahead.

Good morning, and thanks for the question. Just wanted to start off by Just asking about the soy crush performance throughout the quarter in your regions. You provided a little bit of detail in the press release, but just wondering if you could flush that out a little bit. And as we look to the back half of the year, how should we think about fundamentals, especially with the recent RVO in mind? And then my follow-up would just be in regards to the SREs. You know, have you heard anything? How soon do you think we can get an announcement? How have your conversations been regarding this matter? And any sort of details you could provide there would be helpful. Thanks.

Here, I'll start. John, you can come in. Yeah, as far as Q2 looked at, the outperformance that was almost starting to be expected came really kind of second half June. And that was South America and North America processing margins, really driven by the rising veg oil values and lower bean costs, and primarily in the U.S. So that was where it really delivered that. As you look kind of towards the current market conditions, looking across, you know, soy, YQ3s, you know, improved a little bit. It's still kind of unclear. Due to continued soft bio demand and South American supply, margins definitely are better in Q4 and back above baseline with the harvest outlook that's coming. And then if we walk quickly around the globe, if you look at Brazil, Q2 margins are better year over year. There's no logistical challenges with take or pay now. You've got a record bean crop. And, of course, that's offset a little bit by some of the demand of exports of beans to China. And then the deferral of the B15, which we'll see coming in in the second half. But we expect that second half to be better year over year. And oil demand, of course, is expected to pick up from energy, although we haven't seen it yet. And then in Argentina, Q2 margins have been better year over year. That was strong farmer selling by the big crops and the export window looking like it was coming to an end. And so that got the industry well covered for Q3, and Q4 has yet to play out. And then across Europe, our Q2 margins were good, but down slightly from a strong prior year. Second half will probably be a little tougher. You've got some competing imports from the South American flows. In China, our Q2 margins improved in the second half, although they were still slightly down from prior year. Second half margins will probably be lower than Q2, but still look pretty good versus historical levels. So that's the look on soy. And then on soft, Q2 margins and volumes were down in all regions versus prior year. And that was really as across Europe, Black Sea, Canada, we had smaller seed production last year. Crops are developing well in all regions. And you see that as the forward crush curves are supported. starting late Q3 as we're expecting arrival of new seeds.

In terms of the SREs, obviously we've been plugged in pretty closely monitoring that. Our belief is the administration has done a great job of supporting the U.S. farmer, and we think they clearly understand the impact of what the SREs could potentially have on the RVO. But so we'll see. We probably don't have any special insights into where it's going to end up, but we do expect decisions sometime in August or September. And again, I think given the supportive nature of the policy around 45Z and around VOs, we would expect the SREs to be well thought through and supportive.

Appreciate the call there. The next question comes from Andrew Stralsik with BMO. Please go ahead with your question.

Hey, good morning. Can you hear me now? Yes. Good morning. Good morning, Andrew. Wonderful. Sorry about that. I know you're going to give the combined company, Viterra, guidance including Viterra, you know, before the third quarter call. But you put out some pro forma numbers including Viterra. that I think have created some concern. And I know there's some noise in there. So I was just wondering if you're able to help us kind of think about what a clean Viterra earnings base for 2024 would have looked like, or some of the factors that impacted kind of the underlying Viterra earnings numbers in that pro forma that you shared, or maybe if you wanted to compare 2026 fundamentals for Viterra versus 24, if you see the environment, you know, on a relative basis, getting, getting better or worse, just some color around that would, would be helpful.

Sure. Let, let me start in the, in John, if you come in, look, I just like to start by saying, look, uh, Victoria's got a great team and an excellent platform and the strategic rationale is it's absolutely still in place. Um, you know, as far as, uh, Prior to close, I'd say John and I in our past life have walked that path, so we probably have as good an understanding about that as anyone. It definitely was a challenging time, no doubt, for the team. You're moving a private company into a larger public company, which we'd lived before. We had the regulatory delay. We understand how disruptive that can be to the team and the business. I think the good news is we understand what those challenges are. or there's really nothing we haven't seen before, and we know how to address those going forward. So, when you look at the combined, you know, company going forward, look, biofuel policies and large crops, you know, are generally supportive of our fresh assets. You look at the storage assets now the combined company has, those benefit from large crops globally. You know, not only in the storage, but in the optionality then when the demand calls for that stored product. And then you look at our new combined expanded network. It's much more balanced now between, you know, crush and origination, how the origination from the farmer to support our assets fits so well together. You know, it's really a vertical merger if you think about it. And that's really going to increase commercial optionality for us. And then the other is we're now the largest and lowest-cost crusher in Argentina, and that's right as that country continues to stabilize, and it's important to the overall crush franchise. So we really love the combination, and so kind of regardless of what cycle we're in going forward, what we do know is the combined business, we are very, very comfortable. We'll have higher lows in the tough cycle and higher highs as we get into mid- and better cycles.

Yeah, I would just add on, Andrew, you know, when you look at the performers, I mean, they don't have synergies captured and they have costs and they're related to the deal. And I think the VITERA team would tell you that they could have executed better in some ways. And so, I think these are things that are easily fixed. And obviously, we're hyper-focused on synergies going forward, both on the cost side and on the commercial side. And Everything we're seeing so far there is just optimism that we'll get every dollar synergy that we forecast, if not more on the cost side, you know, and certainly going to be as aggressive as we can be. Still support the business, you know, comfortably, obviously. But then on the commercial side, as Greg alluded to, I think there's some great opportunity there that we'll see going forward.

Okay, that's super helpful. And then I apologize if this was already asked and I might have missed it, but I guess I'm curious. I mean, we can see in the U.S. crush curve post the RVO how things have evolved. How are you thinking about the implications kind of on a more global basis with the U.S. potentially out of the global market for bean oil and maybe how you might see the ripple effects play out through the crush margins in Brazil and Europe and Argentina kind of relative to what we're able to see in the U.S.? ?

Yeah, if you look back, kind of the first run when oil share was as strong in the U.S. with the draw from biofuels, right, we've got a bit of a test run, if you will, for our global system. But the key, I think this time, is we've got even a better, more complete system. And as you've seen when we've been challenged with whatever macroeconomic challenges you know, situation the last few years, we've been able to adjust to that, whether it's, you know, being there to buy the beans from the farmers or to serve our customers from the best market with meal or from the best market with oil. So, you know, we see this as a great opportunity. I think the other key is, you know, B-15s coming in in Brazil. So that'll balance, you know, some of the demand there on oil as well as the demand that we see coming in North America. So, Yeah, we're excited to run this combined platform in what's a pretty complex macro environment, but we know we're well suited for it.

Great. Thank you very much.

The next question comes from Ben Toyrer with Barclays. Please go ahead.

Yeah, good morning, and thanks for taking my question. Just wanted to squeeze in two quick ones. So one, as you look into the back half, and obviously you made some adjustments for the divestiture of the corn milling business in North America. Now, that put aside, as you look into the second half versus what you initially expected for the second half, has anything changed? materially change to the up or the downside, just given that there's a little bit of a stronger crush environment, particularly in North America? That would be my first question.

Yeah, Ben, I can take that. I think, you know, overall, you know, while we're holding the year, and we look at the second half, just to be clear, we're going to have likely a weaker Q3, given the by the fact that we had a lot of our crush margin lock coming into the quarter and some of this run-up we saw recently in crush margin in the U.S. Captured a little bit of that in Q3, but most of it we were already locked. So we're really looking at second half, kind of a 30-70 split of earnings, second half. And I would say while we are predicting and we're forecasting a stronger processing in the second half, primarily in Q4, by the improvement in crush margins, especially in the U.S., We've got offsets in other parts of the business. Merchandising continues to be challenging and I think tough to predict. And so we've got a conservative forecast in, we think, for merchandising. And we've seen a little bit of softness on the specialty oil side. So overall, kind of a shift to the processing side away from parts of the business.

Yeah, that brings me actually to my second question on the oil piece, because that seems like that was a probably a little bit softer than what you initially expected for the quarter. And also, I mean, the tone for the guidance is a little weaker. So just wanted to understand what are the issues here? Is it too much supply or is it not enough demand or is it a combination of both of it?

Yeah, if you look at the RSO, definitely was impacted by the lower energy demand, you know, due to the uncertainty around the biofuels policy. And then we also saw, you know, customers with some of the uncertainty around tariffs until those get set. customers going very spot. So that definitely affected some of the flows. But we are expecting, you know, the RSO to improve coming off the Q2 levels in the second half.

Okay, perfect. Thank you.

The next question comes from Salvatore Tiano with Bank of America. Please go ahead.

Yes, good morning. So firstly, I want to ask a little bit about your investments, the organic investments that you have for the next couple of years, including, I believe, Morristown's supposed to come online later this year. How's the Dash Hema crash expansion going? And if you can provide any commentary with regard to CapEx there, expected earnings contribution, and progress.

This is John. I'll take those. So, you know, Forest Town is moving along extremely well. We're going to basically go into commissioning and go live on that plant expecting in October, so call it mid-Q4. I'm really pleased about the progress we've made there on getting ready to go. It's obviously going to take a bit of time commissioning. It's a big plant. It's a bit complex. So, you know, it takes time to work through the bugs and the you know, initially, but really pleased to have an expectation that thing will be humming by, you know, early to mid next year with, again, a start probably like call it mid Q4. Destrehan, both projects in Destrehan are moving along well. Of course, we have the Crush project that's in our joint venture with Chevron. You know, we're expecting that to come on probably call it late Q2 of next year. Um, and then followed probably about a month later by the barge unloading project, which is a hundred percent owned project, but both going along well. Um, and, uh, you know, largely, obviously most of the CapEx will be complete on those three projects by the end of this year, a little bit of spill over on Destrohan, Destrohan projects into next year, um, in the 2026 first half. Uh, and then the other big project we have, of course, is our Weston plant in Europe. that's probably been delayed a bit just given some contractor issues and looking probably at early 2027 commissioning on that plant versus late 26 at this point. I would say all in all, projects are moving along well and teams are doing it safely and effectively and optimistic that all these are going to be good projects when wrapped up.

Perfect. And the other thing I want to ask is, what is your outlook, I guess, on the meal side in the U.S., both on demand, whether that's domestic or on the export market, but also supply? Because obviously we're talking with the RBOs about the improved outlook for the oil side, but it looks like we're still adding probably a good 10%, 15% to meal supply in North America in the next two years. And obviously prices are moving lower.

I think the key is to continue to watch their good economics in the animal protein segment. So demand has been very good. They like using soybean meal at prices itself into the formula. The other factor is North America has added some export capabilities. And so we've got a lower supply chain cost to get from the interior plants to the export and get it on a ship, making the U.S. more competitive in the global markets as well. And if you remember, we sell more soybean meal than we produce. We're a net short, so we're able to find the best market for that, whether it's being consumed domestically or going to our customers in the global market.

Salvatore, just note that we've seen the meal situation coming, obviously, and The expansion of our Destrehan barge unloading facility and the expansion we did at our P&W facility are both intended to take on some of that soybean meal that's going to go to export.

Great.

Thank you very much. The next question comes from Heather Jones from Heather Jones Research. Please go ahead.

Good morning and congratulations on closing the tariff. Good morning. Thank you. My first question is on your RSO business. So just assuming a relatively benign SRE outcome, you know, demand for North American veggie oil set to explode, and that the vast majority of your big RDE producers now have PTUs in place. So I'm just wondering, do you think this is going to set up a situation in which refining margins could potentially go to zero? in the US and if so, your outlook for the rest of the world, would that still allow for a normalized EBIT target of about 400 million? I think it's what y'all laid out in 22.

Let me start and I'll let John come back. Remember when we talked in the past that we expected the refining margins to moderate over time and that was always our plan. some of that will work back into the crush margin because the demand for crude, of course, will go up. And so kind of depending on that balance, who's running, how hard they're running the pretreatment, will make a difference on where the refining margin falls out. But it probably will keep it tighter than historical, but not long-term historical, but not better than you know, kind of the peak period. And of course, if you remember, we had it much lower in our model.

I would just add, Heather, that if you look at the last couple of quarters, the amount of refined oil going into energy has been significant to our overall portfolio, and still has been solid on the food side. And so that we would expect to continue. And we'll see what the, you know, things ramp up on the R&D side. We'll see what kind of demands there. But Just to point out, by far, most of our refined oil is going into the food industry.

Okay. And then a follow-on is, like you mentioned, Greg, about the demand for crude oil is obviously going to skyrocket. So just thinking of the interplay between those, maybe refining margins get really compressed in the U.S., but how do you think about the normalized range for soy and soft crush margins given that crude oil demand is going to surge and you're also going to have this very large meal production. And I know we won't know until we know. But just how are you all thinking about that setup, the potential there?

Yeah, I think we're encouraged. You've got big bean crops. You've got good animal profitability on the meal takeaway and inclusion rates. You've got the biofuel policy, you know, with the RVO being constructive in the U.S. You got the B-15 coming on in Brazil. So, you know, from an overall setup, exactly how it'll play out, you know, we've got, you know, our theories, but the one thing I'm really glad is that we're running what is now a pretty balanced global crushing footprint, you know, in soy and soft. So, I think we'll We feel the balance of supply and demand is going to be pretty good, and I think we'll be able to most efficiently serve it from the best origins.

Okay. Thank you so much.

Thank you.

The next question comes from Derek Whitfield with Texas Capital. Please go ahead.

Good morning, all, and thanks for taking my questions. Similar to Heather's question, given the meaningful step up in domestic SBO demand for fuel, how do you see the interplay between SBO and other seed oils as it relates to food in the U.S.?

Yeah, as I said, I think the good news is we've seen a bit of a test run, you know, on this. And as market, you know, heightens up on the demand, you have certain food customers that will switch to other oils. And some of that's functionality. Some of that's from a price standpoint. So we're working with those. So we like being able to offer the full suite of the seed oils to our customers. So we see it as opportunities.

Terrific. And then with regard to the one big beautiful bill, it appears 45Z policy will have a longer and greater impact on SBO economics based on the removal of the indirect land use charge. Do you guys have a sense of how material ILAC is on average? And then as a build on that from an OVB perspective, have you been able to quantify how material of a health to 100% bonus depreciation is to your business?

Yeah, so starting with the ILAC change, that's obviously going to, number one, we're very pleased that the 45Z includes all North American feedstocks, so that benefits our crush in Canada as well on the canola side. And the indirect land use change impact is going to be significant because it really puts soybean oil and canola oil much more on par with the lower CI feedstocks. And when you think about the The prevalence of soybean oil and the ease of moving it in large quantities, it's going to be very price competitive, but also it's a much easier feedstock to process. And so we think it's going to bode well for demand for crude, certainly crude soybean oil, crude coal oil. See about the refined side, as we talked about earlier. Still think there's going to be some demand there. So all in all, pretty positive on that piece. Your accelerated depreciation side, you know, clearly where we have an opportunity to take advantage of it, we will on some of these bigger capital projects. I don't know that it will necessarily change strategy around CapEx, but it certainly is going to be a tailwind if we, you know, as we see opportunities.

That's helpful. Thanks for your time.

The next question comes from Stephen Haynes with Morgan Stanley. Please go ahead.

Hey, good morning. Thanks for taking my question. I wanted to ask on some developments in the global trade market with China taking some soybean meal from Argentina and sending some soybean oil into India. I guess not typical behavior from them. These kind of one-off weird kind of moves, or do you think there's kind of just more of a structural change going on? Just curious on any thoughts there. Thank you.

I think the one thing the last five, six years have taught us is the world's a pretty dynamic place now. And I know I'm repeating myself, but it's why we love our balanced global footprint of crushing as well as origination. And I think China's very... very public, that they're focused on food security. So I think it's absolutely logical and rational that they continue to build different optionality. And I would say the importation of soy meal is a new option that they're now developing. So it seems like a logical and rational action. And then as far as commodities, moving in untraditional flows, I think that's the norm now. I think that's the norm going forward, and I really feel that Bungie's built for it.

Fair enough. We appreciate that. And then maybe just on the commercial synergy side, I realize it's early days, but do you have kind of a timeline roughly for when you think some of these could be realized? I'm sure there are some that are more low-hanging that could be immediate, maybe some that are a bit longer term, but any way to help us think about kind of at a very, very high level how to just kind of conceptualize when you could start realizing some of those synergies?

Yeah, it's, look, it's too early to put any new targets out there, but, you know, let me say, you know, we're very optimistic. Our goal all along has been deliver, you know, more than we promised and deliver them faster than we promised. So that's what we've got the focus, you know, the team focused on. There's no doubt that when we start thinking about the commercial synergies, just the global scale that we've got now and with the local granularity, whether it's on originating from farmers or distributing to end customers, the capabilities that we've got on the logistical and transportation side, the ability to manage our risk and help our customers manage their risk so that we can be the partner of choice that's exciting. And, you know, I tell you, just since we've closed, I've had the opportunity to sit with the commercial teams and some of the functional teams as, you know, we're now one team, one company. And the way that people are working together has been fantastic, right? Everybody is really transparent and collaborative. We've got the ego, you know, we're focused on earnings is what we're focused on. And, you hearing the teams and the opportunities that they're finding together in the plans. Look, it takes some time to execute, but as we had teams together here in North America a couple weeks ago, I was in Europe all last week listening to the teams and work and hearing the report out to the working sessions, and I'm excited about it. I'm really excited. It'll take some time to do, but the reason that we did this deal, they're all still in place.

I would just add, Stephen, that I think the first focus item for the commercial team was one voice to the market. And I think that, you know, Greg mentioned the team set aside, you know, who was doing what, and we figured out very quickly what's the right approach in every market that we're in to make sure we're one voice to the customer. And both ends, the farmer on one side and customers on the other. And we couldn't be more pleased with the coordination among the teams that are just now starting to figure out what the real opportunities are.

Thank you. The next question comes from Manav Gupta with UBS. Please go ahead.

Hi, so I wanted to ask about the shareholder returns post the closure of the deal. How much is remaining under the buybacks? Could you accelerate the buybacks to offset the dilution from the VITERA deal?

Yeah, Manav, thanks. This is John. The original $2 billion commitment, we have $800 million left, and obviously that's going to be an important part of our capital allocation here going forward. We anticipated that all along. We had a big outflow of cash relative to getting the deal closed, but it's always been – built into that. And, and obviously we've talked to the rating agencies about our plans there. Uh, and, and we expect to execute on that, um, fairly soon. And, uh, you know, we'll see, I mean, technically we have a period of time post-close to do that. We'll look for the right opportunities to, to, to execute on that remaining balance. And then going forward, um, you know, we do expect this, this machine to generate a lot of cash going forward once we hit our stride and, and, uh, capital allocation in the form of share buyback will likely become a pretty important part of our ongoing strategy.

Thank you. And the follow-up here is when you look at the R view, and if you look actually closely, not many people do, unfortunately, is that you're getting 50% rent on imported feedstocks. That means domestic soybean oil could actually price at a significant premium to some of these imported RD feedstocks. So would that lead to a situation where you would actually see your domestic soybean oil actually competing against low-CI feedstocks and the premium that those low-CI feedstocks get versus your domestic soybean shrink meaningfully and maybe go even the other way, if you could comment on that?

Yeah, I think it's a little early to tell, but I don't think that's out of the realm of possibility. You know, certainly the... The rules were put in place around, you know, and in generation were meant to incent domestic production and use of domestic feedstocks. So soybean oil obviously being a key part of that and being, you know, something that can be supplied in large quantity, we think is going to give it, as I mentioned earlier, an advantage, particularly over imported feedstocks. So we'll see how the market plays out. The market always works and it finds a balance, but we like the setup. You know, and we always do. We think we'll be in a good position to take advantage or whatever the market is.

Thank you so much.

This concludes our question and answer session. I would like to turn the conference back over to Greg Heckman for any closing remarks.

I'd like to thank everybody for joining us today and for your interest in support of Bungie. As you can tell, this is a really key time in the life of the company. really excited to bring these teams together and run this incredible global footprint that we've got to serve our customers and that there's no doubt whatever environment that we're in, we've got the trust that our team is going to get our share. So thank you much and have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.