Archer Daniels Midland 2009 Annual Report Download - page 19

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13
Item 1A.
RISK FACTORS (Continued)
In addition, changes to regulations may require the Company to modify existing processing facilities and/or
processes which could significantly increase operating costs and negatively impact operating results.
The Company is exposed to potential business disruption, including but not limited to transportation services,
and other serious adverse impacts resulting from acts of terrorism or war, natural disasters and severe weather
conditions, and accidents which could adversely affect the Company’s operating results.
The assets and operations of the Company are subject to damage and disruption from various events which include,
but are not limited to, acts of terrorism or war, natural disasters and severe weather conditions, accidents,
explosions, and fires.
The potential effects of the conditions cited above include, but are not limited to, extensive property damage,
extended business interruption, personal injuries, and damage to the environment. The Company’s operations also
rely on dependable and efficient transportation services. A disruption in transportation services could result in
problems supplying materials to the Company’s facilities and impair the Company’s ability to deliver products to
its customers in a timely manner.
The Company’s business is capital intensive in nature and the Company relies on cash generated from its
operations and external financing to fund its growth and ongoing capital needs. Limitations on access to
external financing could adversely affect the Company’s operating results.
The Company requires significant capital to operate its current business and fund its growth strategy. The
Company’s working capital requirements are directly affected by the price of agricultural commodities, which may
fluctuate significantly and change quickly. The Company also requires substantial capital to maintain and upgrade
its extensive network of storage facilities, processing plants, refineries, mills, ports, transportation assets and other
facilities to keep pace with competitive developments, technological advances, regulations and changing safety
standards in the industry. Moreover, the expansion of the Company’s business and pursuit of acquisitions or other
business opportunities may require significant amounts of capital. If the Company is unable to generate sufficient
cash flows or raise adequate external financing, it may restrict the Company’s current operations and its growth
opportunities which could adversely affect the Company’s operating results.
The Company’s risk management strategies may not be effective.
The Company’s business is affected by fluctuations in agricultural commodity prices, transportation costs, energy
prices, interest rates, and foreign currency exchange rates. The Company engages in hedging strategies to manage
these risks. However, these hedging strategies may not be successful in mitigating the Company’s exposure to
these fluctuations. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”
Item 1B.
UNRESOLVED STAFF COMMENTS
The Company has no unresolved staff comments.