German - ADM

Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS (Continued)Selling, general, and administrative expenses of $1.2 billion were comparable to 2006 and include $25 million ofcurrency exchange rate increases. Excluding the impact of currency exchange rate increases, selling, general andadministrative expenses decreased $23 million principally due to 2006 selling, general and administrative expensesincluding $20 million of severance costs associated with the closure of a citric acid plant. During 2007 and 2006,the Company issued option grants and restricted stock awards to officers and key employees pursuant to theCompany’s Long-term Management Incentive Program. Certain officers and key employees of the Companyreceiving option grants and restricted stock awards are eligible for retirement. Compensation expense related tooption grants and restricted stock awards issued to these retirement-eligible employees is recognized in earnings onthe date of grant. Selling, general, and administrative expense for 2007 and 2006 includes compensation expenserelated to option grants and restricted stock awards granted to retirement-eligible employees of $30 million and $31million, respectively.Other income increased $1.0 billion primarily due to the $440 million Wilmar Gain, a $357 million gain on the saleof the Company’s equity securities of Tyson Foods, Inc. and Overseas Shipholding Group, Inc., a $153 million gainon the sale of the Company’s interest in Agricore United, and a $53 million gain on the sale of the Company’sArkady food ingredient business. Other income also includes a $46 million charge related to the repurchase of$400 million of the Company’s outstanding debentures. Excluding these items, other income increased $73 millionprimarily due to a $120 million increase in equity in earnings of unconsolidated affiliates, and a $53 millionincrease in investment income, partially offset by a $69 million increase in interest expense and a $27 millionreduction in gains on sales of long-lived assets. The increase in equity in earnings of unconsolidated affiliates isprimarily due to higher valuations of the Company’s private equity fund investments and improved operatingresults of the Company’s Asian oilseed crushing ventures. Interest expense and investment income increasedprimarily due to increased average borrowing and investment levels.Operating profit by segment is as follows:2007 2006 Change(In millions)Oilseeds Processing $1,117 $ 599 $ 518Corn ProcessingSweeteners and Starches 485 432 53Bioproducts 634 445 189Total Corn Processing 1,119 877 242Agricultural Services 516 275 241OtherFood, Feed, and Industrial 214 159 55Financial 195 151 44Total Other 409 310 99Total Segment Operating Profit 3,161 2,061 1,100Corporate (7) (206) 199Earnings Before Income Taxes $3,154 $1,855 $1,29923