Archer Daniels Midland 2009 Annual Report Download - page 33

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27
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Selling, general and administrative expenses increased $224 million to $1.4 billion primarily due to higher
employee-related costs and higher outside service costs, including $44 million related to an organizational
realignment and reorganization of the company’s European headquarters, and $37 million due to the impact of
currency rate fluctuations.
Other (income) expense – net decreased $911 million primarily due to gains totaling $1.0 billion on business
disposals recorded in 2007 including $440 million related to the Wilmar gain, a $357 million realized securities
gain from sales of the Company’s equity securities of Tyson Foods, Inc. and Overseas Shipholding Group, Inc., a
gain of $153 million from the sale of the Company’s interest in Agricore United, and a $53 million gain from the
sale of the Company’s Arkady food ingredient business. Equity in earnings of unconsolidated affiliates increased
$121 million in 2008, primarily related to improved operating results of the Company’s investments in U.S. grain
export, Asian oilseeds and peanut processing ventures. Other (income) expense - net also reflects $38 million in
gains on sales of securities in 2008, $21 million in gains on disposals of long-lived assets in 2008, an increase from
2007 to 2008 of $11 million in charges related to abandonment and write-down of long-lived assets, and a charge
of $46 million related to the repurchase of $400 million of the Company’s outstanding debentures in 2007.
Operating profit by segment is as follows:
2008
2007
Change
(In millions)
Oilseeds Processing
Crushing & Origination
$ 727
$ 414
$ 313
Refining, Packaging, Biodiesel & Other
181
202
(21)
Asia
132
523
(391)
Total Oilseeds Processing
1,040
1,139
(99)
Corn Processing
Sweeteners & Starches
557
510
47
Bioproducts
404
595
(191)
Total Corn Processing
961
1,105
(144)
Agricultural Services
Merchandising & Handling
873
382
491
Transportation
144
156
(12)
Total Agricultural Services
1,017
538
479
Other
Wheat, Cocoa & Malt
217
209
8
Financial
206
170
36
Total Other
423
379
44
Total Segment Operating Profit
3,441
3,161
280
Corporate
(817)
(7)
(810)
Earnings Before Income Taxes
$2,624
$3,154
$ (530)
Oilseeds Processing operating profit decreased 9% to $1.0 billion. Excluding the $440 million Wilmar gain
reflected in Asia results in 2007, Oilseeds Processing operating profit increased 49%, primarily due to strong global
demand for protein meal, vegetable oil, and fertilizer. Crushing and Origination operating profits increased 76% to
$727 million due principally to improved crushing margins in North and South America and improved fertilizer
results in South America. Refining, Packaging, Biodiesel and Other operating profits decreased 10% to $181
million due principally to decreased biodiesel margins in Europe and asset impairment charges of $28 million in
2008, partially offset by improved global refining margins. 2007 operating profit for Refining, Packaging,
Biodiesel and Other includes a $14 million gain on a business disposal. Excluding the Wilmar gain, Asia operating