bunge 2004 annual report management’s discussion and analysis of financial condition and results of operations cash flows 44 2004 Compared to 2003 In 2004, our cash and cash equivalents balance decreased by $57 million, reflecting the net impact  of cash flows from operating, investing and financing activities, compared to a $19 million increase in our cash and cash equiv- alents balance in 2003. Cash flow provided by operating activities for 2004 was  $802 million compared to cash used for operating activities of $41 million in 2003. Our cash flow from operations has varied depending on the  timing of the acquisition of, and the market prices for, agricultural commodity inventories, as well as the timing of when such inventories were sold. In addition, the growth of our business has resulted in the need to increase working capital levels which reduces our cash flow from operations. The second and third quarters of the year are typically the periods when most of our cash flows from operations are provided. It is during this period that North American and European “old” crop inventories harvested and purchased in September, October and November of the previous year are at their lowest level. In addi- tion, most of the South American inventories acquired during the March, April and May harvest period have been sold. Cash flows from operations during the first and fourth quarters will vary depending upon the amount of advances made to farmers in Brazil and the amount of North American and European “new” crops purchased during the September, October and November harvest period. Cash flow from operations in 2004 was favorably affected by the strong operating results and the return of soybean prices to more normalized levels in the latter part of the year. Soybean prices increased significantly beginning in the third quarter of 2003 and continued their increase into 2004. During the latter half of the third quarter of 2004, agricultural prices declined, which resulted in a reduction in working capital levels. Cash flow provided by operating activities for 2004 also included $60 million received from the net settlement of various interest rate derivatives entered into and terminated in 2004. Cash flow from operations for 2003 included $57 million paid in connection with the settlement of an arbitration. Cash used for financing activities was $74 million in 2004, com- pared to cash used of $102 million in 2003. In 2004, we reduced our borrowings of short-term debt by using cash flow provided by operating activities. In April 2004, our wholly owned finance subsidiary, Bunge Limited Finance Corp., issued $500 million of unsecured senior notes, which are unconditionally guaranteed by us, for net proceeds of $496 million, and in June 2004, we sold 9,775,000 common shares in a public offering for net proceeds In 2003, we received net proceeds of $532 million from the sale of our Brazilian soy ingredients business to Solae, the sale of Lesieur to our Saipol joint venture and the sale of our U.S. bakery operations. We used $23 million to acquire the remaining 2.62% of Cereol’s outstanding shares we did not already own and we paid an additional purchase price of $42 million to Edison S.p.A, Cereol’s former controlling shareholder, and Cereol’s former public shareholders. In addition, in 2003, we acquired additional shares in Fosfertil for $84 million, and we completed certain smaller acquisitions in India and Eastern Europe having an  aggregate purchase price of approximately $37 million. In 2003, we received $41 million relating to Lesieur’s intercompany debt owed to us. During the third and fourth quarters of 2004, we acquired the remaining 17% interest in Bunge Brasil that we did not already own for $314 million in cash. In April 2004, we acquired the remaining 40% of Polska Oil, a Polish producer of bottled edible oils, for $27 million. In addition, we invested approximately $38 million in existing and new business joint ventures during 2004, primarily  in South America and Eastern Europe and we loaned $14 million to our joint venture in Poland. Also included in cash flow from investing activities in 2004 is $7 million received in the asset exchange transaction with J. Macêdo. Cash used by investing activities was $841 million in 2004,  compared to cash provided of $101 million in 2003. Investments  in property, plant and equipment under our capital expenditure plan were $437 million for 2004. Of this amount, $136 million represented maintenance capital expenditures in 2004, compared to $98 million in 2003. Maintenance capital expenditures are expenditures made to replace existing equipment in order to maintain current production capacity and expenditures for equip- ment required to comply with environmental regulations. The majority of non-maintenance capital expenditures in 2004 related to efficiency improvements to reduce costs, equipment upgrades and business expansion.