Archer Daniels Midland 2006 Annual Report Download - page 52

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50 Archer Daniels Midland Company
which expire at various times through fiscal 2010. The Company
has recorded a valuation allowance of $14 million against the state
income tax incentive credits at June 30, 2006 due to the uncertainty
of their realization.
Undistributed earnings of the Company’s foreign subsidiaries and
affiliated corporate joint venture companies accounted for on
the equity method amounting to approximately $2.2 billion at
June 30, 2006 are considered to be permanently reinvested, and
accordingly, no provision for U.S. income taxes has been provided
thereon. It is not practicable to determine the deferred tax liability for
temporary differences related to these undistributed earnings.
Note 11-Leases
The Company leases manufacturing and warehouse facilities, real
estate, transportation assets, and other equipment under non-
cancelable operating leases which expire at various dates through the
year 2076. Rent expense for 2006, 2005, and 2004 was $129 million,
$116 million, and $121 million, respectively. Future minimum
rental payments for non-cancelable operating leases with initial or
remaining terms in excess of one year are as follows:
Fiscal years (In thousands)
2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 77,457
2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,481
2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,946
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,361
2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,970
Thereafter ................................................... 135,613
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $377,828
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 12-Employee Benefit Plans
The Company provides substantially all domestic employees and employees at certain international subsidiaries with pension benefits. The
Company also provides substantially all domestic salaried employees with postretirement health care and life insurance benefits.
The Company has savings and investment plans available to employees. The Company also maintains stock ownership plans for qualifying
employees. The Company contributes shares of its stock to the plans to match qualifying employee contributions. Employees have the choice of
retaining Company stock in their accounts or diversifying the shares into other investment options. Expense is measured and recorded based upon
the fair market value of the stock contributed to the plans each month. The number of shares designated for use in the plans is not significant
compared to the shares outstanding for the periods presented. Assets of the Company’s defined contribution savings plans consist primarily of
listed common stocks and pooled funds. The Company’s defined contribution savings plans held 20.1 million shares of Company common stock
at June 30, 2006, with a market value of $829 million. Cash dividends received on shares of Company common stock by these plans during the
year ended June 30, 2006 were $8 million.
Pension Benefits Postretirement Benefits
2006 2005 2004 2006 2005 2004
(In thousands) (In thousands)
Retirement plan expense
Defined benefit plans:
Service cost (benefits earned during the period) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58,869 $ 58,092 $ 48,749 $ 6,663 $ 6,467 $ 6,121
Interest cost ............................................................. 86,568 79,267 70,133 8,526 7,704 7,711
Expected return on plan assets .............................................. (80,789) (68,259) (57,947) — — —
Curtailment ............................................................. 9,913 — — — — —
Amortization of actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,024 32,582 23,865 431 91 61
Other amortization ....................................................... 4,832 4,273 3,721 (1,116) (1,116) (1,116)
Net periodic defined benefit plan expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,417 105,955 88,521 14,504 13,146 12,777
Defined contribution plans: ................................................... 26,616 25,046 23,622 — — —
Total retirement plan expense ............................................... $141,033 $131,001 $112,143 $14,504 $13,146 $12,777