German - ADM

Archer Daniels Midland CompanyNotes to Consolidated Financial Statements (Continued)Note 5.Investments in and Advances to Affiliates (Continued)Undistributed earnings of the Company’s unconsolidated affiliates as of June 30, 2007, are $656 million. Thecompany is a limited partner in various private equity funds which have a carrying value at June 30, 2007 of$165 million. The Company has future capital commitments related to these partnerships of $138 million as ofJune 30, 2007. Two foreign affiliates for which the Company has a carrying value of $1.1 billion have a marketvalue of $1.3 billion based on quoted market prices and exchange rates at June 30, 2007.The Company provides a $200 million credit facility to one unconsolidated affiliate. The facility is due ondemand and bears interest equal to the monthly average commercial paper rate applicable to the Company’scommercial paper borrowing facility. Outstanding advances under the credit facility of $180 million as ofJune 30, 2007, 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 andrecognized a gain of $153 million.During June 2007, the Company exchanged its ownership interests in eleven Asian joint venture companies forshares of Wilmar International Limited (WIL), a Singapore publicly listed company. In exchange for its ownershipinterests 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 exchangedfor WIL shares was $231 million. The Company has accounted for the exchange transaction in accordance withSFAS Number 153, Exchanges of Nonmonetary Assets, an amendment of APB No. 29. Pursuant to SFAS Number153, accounting for nonmonetary transactions should be based upon the fair value of the assets received with gainor loss recognized for any difference between the fair value of the asset received and the cost of the assetsurrendered. Accordingly, the Company has recognized a $440 million gain in the accompanying consolidatedstatement of earnings related to the exchange transaction. The gain represents the difference between the fair valueof the WIL shares received and the carrying value of the Company’s interests in the joint ventures exchanged forWIL shares less the elimination of the portion of the gain representing the Company’s retained direct and indirectownership interests in WIL. The Company is accounting for its direct and indirect interests in WIL on the equitymethod of accounting as the Company believes it has the ability to exercise significant influence over the operatingand financial policies of WIL.As of June 30, 2007, there is one joint venture company subject to the exchange transaction in which regulatoryapproval is pending. The Company has not recognized any gain related to the exchange of this joint venture withWIL as of June 30, 2007. The exchange transaction and the related gain for this joint venture will be recognizedwhen, and if, final regulatory approval is obtained.51