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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The market risk inherent in the Company’s market risk sensitive instruments and positions is the potential loss arising from adverse changes in: commodity market prices as they relate to the Company’s net commodity position, foreign currency exchange rates, and interest rates as described below. Commodities The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government programs and policies, changes in global demand resulting from population growth and changes in standards of living, and global production of similar and competitive crops. To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchangetraded futures and exchange-traded and over-the-counter options contracts to minimize its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts. The Company will also use exchange-traded futures and exchange-traded and over-the-counter options contracts as components of merchandising strategies designed to enhance margins. The results of these strategies can be significantly impacted by factors such as the volatility of the relationship between the value of exchange-traded commodities futures contracts and the cash prices of the underlying commodities, counterparty contracts defaults, and volatility of freight markets. In addition, the Company from time-to-time enters into derivative contracts which are designated as hedges of specific volumes of commodities that will be purchased and processed, or sold, in a future month. The changes in the market value of such futures contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item. Gains and losses arising from open and closed hedging transactions are deferred in other comprehensive income, net of applicable taxes, and recognized as a component of cost of products sold in the statement of earnings when the hedged item is recognized. A sensitivity analysis has been prepared to estimate the Company’s exposure to market risk of its daily net commodity position. The Company’s daily net commodity position consists of merchandisable agricultural commodity inventories, related purchase and sale contracts, and exchange-traded futures and exchange-traded and over-the-counter option contracts, including those contracts used to hedge portions of production requirements. The fair value of such daily net commodity position is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures prices. Market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in such prices. Actual results may differ. 2008 2007 Long/(Short) Fair Value Market Risk Fair Value Market Risk (In millions) Highest position $ 1,260 $ 126 $ 703 $ 70 Lowest position (915) (92) (565) (57) Average position 251 25 180 18 The change in fair value of the average position for 2008 compared to 2007 was principally a result of increases in commodity prices and, to a lesser extent, quantities underlying the daily net commodity position. 34
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued) Currencies In order to reduce the risk of foreign currency exchange rate fluctuations, except for amounts permanently invested as described below, the Company follows a policy of entering into currency exchange forward contracts to mitigate its foreign currency risk related to transactions denominated in a currency other than the functional currencies applicable to each of its various entities. The instruments used are forward contracts, swaps with banks, and exchange-traded futures contracts. The changes in market value of such contracts have a high correlation to the price changes in the currency of the related transactions. The potential loss in fair value for such net currency position resulting from a hypothetical 10% adverse change in foreign currency exchange rates is not material. The amount the Company considers permanently invested in foreign subsidiaries and affiliates and translated into dollars using the year-end exchange rates is $7.0 billion at June 30, 2008, and $5.4 billion at June 30, 2007. This increase is due to an increase in retained earnings of the foreign subsidiaries and affiliates and appreciation of foreign currencies versus the U.S. dollar. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates is $695 million and $543 million for 2008 and 2007, respectively. Actual results may differ. Interest The fair value of the Company’s long-term debt is estimated using quoted market prices, where available, and discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Such fair value exceeded the long-term debt carrying value. Market risk is estimated as the potential increase in fair value resulting from a hypothetical .5% decrease in interest rates. Actual results may differ. 2008 2007 (In millions) Fair value of long-term debt $7,789 $4,862 Excess of fair value over carrying value 99 110 Market risk 308 232 The increase in fair value of long-term debt in 2008 resulted principally from the Company’s issuance of approximately $3.1 billion in long-term debt in 2008. 35
Page 1 and 2: Relatório Anual 2008 da Archer Dan
Page 3 and 4: DESTAQUES FINANCEIROS (em milhões,
Page 5 and 6: No ano, o lucro líquido atingiu US
Page 7 and 8: O ELO VITAL: Os negócios da ADM co
Page 9 and 10: O MUNDO PRECISA DE CONEXÃO. A RESP
Page 11 and 12: Erik Lightner, da ADM, supervisiona
Page 13 and 14: A BASE DE ATIVOS GLOBAIS DA ADM EST
Page 15 and 16: UNITED STATES SECURITIES AND EXCHAN
Page 17 and 18: Table of Contents Item No. Descript
Page 19 and 20: Item 1. BUSINESS (Continued) Golden
Page 21 and 22: Item 1. BUSINESS (Continued) Corpor
Page 23 and 24: Item 1. BUSINESS (Continued) The Co
Page 25 and 26: Item 1A. RISK FACTORS (Continued) T
Page 27 and 28: Item 2. PROPERTIES The Company owns
Page 29 and 30: Item 2. PROPERTIES (Continued) Othe
Page 31 and 32: Item 5. MARKET FOR REGISTRANT’S C
Page 33 and 34: Item 6. SELECTED FINANCIAL DATA Sel
Page 35 and 36: Item 7. MANAGEMENT’S DISCUSSION A
Page 47: Item 7. MANAGEMENT’S DISCUSSION A
Page 51 and 52: Archer Daniels Midland Company Cons
Page 53 and 54: Archer Daniels Midland Company Cons
Page 55 and 56: Archer Daniels Midland Company Note
Page 63 and 64: Note 5. Investments in and Advances
Page 65 and 66: Note 7. Debt and Financing Arrangem
Page 69 and 70: Note 8. Shareholders’ Equity (Con
Page 73 and 74: Note 11. Income Taxes (Continued) A
Page 75 and 76: Note 11. Income Taxes (Continued) A
Page 77 and 78: Note 13. Employee Benefit Plans (Co
Page 87 and 88: The Board of Directors and Sharehol
Page 89 and 90: Item 9. CHANGES IN AND DISAGREEMENT
Page 91 and 92: Item 10. DIRECTORS, EXECUTIVE OFFIC
Page 93 and 94: Item 12. SECURITY OWNERSHIP OF CERT
Page 95 and 96: Item 15. EXHIBITS AND FINANCIAL STA
Page 97 and 98: Item 15. EXHIBITS AND FINANCIAL STA
Page 99 and 100:
EXHIBIT 21--SUBSIDIARIES OF THE REG
Page 101 and 102:
Registration Statement No. 333-4261
Page 103 and 104:
ARCHER-DANIELS-MIDLAND COMPANY Powe
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d) Disclosed in this report any cha
Page 115 and 116:
d) Disclosed in this report any cha
Page 117 and 118:
SECTION 1350 CERTIFICATION 103 Exhi
Page 119:
NUTRIÇÃO CONEXÃO ENERGIA PROGRES
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Portuguese - ADM

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