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Note 5. Investments in and Advances to Affiliates
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
The Company has ownership interests in non-majority-owned affiliates accounted for under the equity method.
The Company had 80 and 79 unconsolidated affiliates as of June 30, 2008 and 2007, respectively, located in
North and South America, Africa, Europe, and Asia. The following table summarizes the combined balance
sheets and the combined statements of earnings of the Company’s unconsolidated affiliates as of and for each of
the three years ended June 30, 2008, 2007, and 2006.
2008 2007 2006
(In millions)
Current assets $ 15,111 $ 7,683
Non-current assets 17,201 11,156
Current liabilities (11,069) (5,758)
Non-current liabilities (2,799) (1,975)
Minority interests (720) (915)
Net assets $ 17,724 $ 10,191
Net sales $ 37,542 $ 25,127 $ 20,304
Gross profit 4,575 3,123 2,328
Net income 2,503 1,684 793
Undistributed earnings of the Company’s unconsolidated affiliates as of June 30, 2008, are $1.0 billion. The
company is a limited partner in various private equity funds which have a carrying value at June 30, 2008 of
$129 million. The Company has future capital commitments related to these partnerships of $137 million as of
June 30, 2008. Two foreign affiliates for which the Company has a carrying value of $1.2 billion have a market
value of $1.9 billion based on quoted market prices and exchange rates at June 30, 2008.
The Company provides credit facilities totaling $240 million to two unconsolidated affiliates. One facility is due
on demand and bears interest equal to the monthly average commercial paper rate applicable to the Company’s
commercial paper borrowing facility. The second facility has a 90 day term and bears interest at LIBOR plus
one. Outstanding advances under these credit facilities are $195 million as of June 30, 2008, and are included in
receivables in the accompanying consolidated balance sheet.
During 2007, the Company sold its 28% ownership interest in Agricore United for cash of $321 million and
recognized a gain of $153 million.
During June 2007, the Company exchanged its ownership interests in eleven Asian joint venture companies for
shares of Wilmar International Limited (WIL), a Singapore publicly listed company. In exchange for its ownership
interests in the joint ventures, the Company received 366 million WIL shares with a fair value of $756 million.
Immediately prior to the exchange, the carrying value of the Company’s interests in the joint ventures exchanged
for WIL shares was $231 million. The Company recognized a $286 million after-tax gain in 2007 related to the
exchange transaction. The gain represents the difference between the fair value of the WIL shares received and the
carrying value of the Company’s interests in the joint ventures exchanged for WIL shares, less the elimination of
the portion of the gain representing the Company’s retained direct and indirect ownership interests in WIL. During
2008, the Company finalized its accounting for this exchange using the purchase method of accounting. As a
result, the Company reduced its investment in WIL and recorded goodwill of $176 million. The Company
accounts for its direct and indirect interests in WIL using the equity method of accounting as the Company believes
it has the ability to exercise significant influence over the operating and financial policies of WIL.
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