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Note 11. Income Taxes (Continued)
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Significant components of the Company’s deferred tax liabilities and assets are as follows:
2008 2007
(In millions)
Deferred tax liabilities
Depreciation $ 549 $ 595
Bond discount amortization 13 16
Unrealized gain on marketable securities 11 26
Equity in earnings of affiliates 272 246
Other 2 54
847 937
Deferred tax assets
Pension and postretirement benefits 133 140
Reserves and other accruals 20 23
Purchased call options 98 109
Tax credit carryforwards, net 41 49
Other 82 118
374 439
Net deferred tax liabilities 473 498
Current net deferred tax assets included
in other assets – 34
Non-current net deferred tax liabilities $ 473 $ 532
Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate on earnings is as follows:
2008 2007 2006
Statutory rate 35.0% 35.0% 35.0%
Export tax incentives – (0.5) (1.8)
State income taxes, net of
federal tax benefit 1.3 1.4 1.9
Foreign earnings taxed at rates
other than the U.S. statutory rate (4.6) (2.9) (4.7)
Adjustment of income taxes to
filed tax returns 0.2 (0.4) (2.2)
Other (0.6) (1.1) 1.1
Effective rate 31.3% 31.5% 29.3%
The Company made income tax payments of $859 million, $794 million, and $508 million in 2008, 2007, and
2006, respectively.
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