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Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 1. Summary of Significant Accounting Policies (Continued)
During June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF03-6-1). FSP
EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities
prior to vesting and, therefore, need to be included in the earnings allocation in computing Earnings per Share
(EPS) under the two-class method. The FSP clarifies that all outstanding unvested share-based payment awards that
contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and are
considered to be participating securities. As such, the issuing entity is required to apply the two-class method of
computing basic and diluted EPS. The Company will be required to adopt FSP EITF 03-6-1 on July 1, 2009 and
has not yet assessed the impact of the adoption of this standard on the Company’s financial statements.
Note 2. Acquisitions
The Company’s 2008, 2007, and 2006 acquisitions were accounted for as purchases in accordance with SFAS No.
141, Business Combinations. Accordingly, the tangible assets and liabilities have been adjusted to fair values with
the remainder of the purchase price, if any, recorded as goodwill. The identifiable intangible assets acquired as part
of these acquisitions are not material.
2008 Acquisitions
During 2008, the Company acquired six businesses for a total cost of $15 million, satisfied by $2 million in
Company stock and $13 million in cash, and recorded a preliminary allocation to the purchase price related to these
acquisitions. The purchase price allocation resulted in no goodwill. The purchase price of $15 million was
allocated to current assets, property, plant and equipment, and liabilities for $18 million, $10 million, and $13
million, respectively.
2007 Acquisitions
During 2007, the Company acquired seven businesses for a total cost of $103 million. One of the acquisitions
resulted in obtaining the remaining outstanding shares of an unconsolidated affiliate where the Company held a
50% interest.
The Company recorded goodwill of $5 million related to these acquisitions. The cash purchase price of $103
million plus the $100 million carrying value of the previously unconsolidated affiliate was allocated to current
assets, property, plant, and equipment, current liabilities, and debt for $82 million, $206 million, $33 million, and
$52 million, respectively.
2006 Acquisitions
During 2006, the Company acquired twelve businesses for a total cost of $182 million. The Company recorded no
goodwill related to these acquisitions.
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