Archer Daniels Midland 2009 Annual Report Download - page 61

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55
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 6.
Investments in and Advances to Affiliates (Continued)
The Company provides credit facilities totaling $175 million to three unconsolidated affiliates. One facility is
due on demand and bears interest equal to the monthly average commercial paper rate applicable to the
Company’s commercial paper borrowing facility. The second facility matures December 31, 2011 and bears
interest at the one month LIBOR rate. The third facility has no fixed maturity date, is repayable within 90 days
of the advance, and bears interest at LIBOR plus one percent. Outstanding advances under these credit facilities
are $50 million as of June 30, 2009, and 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 and
recognized a gain of $153 million.
During June 2007, the Company exchanged its ownership interests in eleven Asian joint venture companies for
shares of Wilmar International Limited (WIL), a Singapore publicly listed company. In exchange for its ownership
interests 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 exchanged
for WIL shares was $231 million. The Company recognized a $286 million after-tax gain in 2007 related to the
exchange transaction. The gain represents the difference between the fair value of the WIL shares received and the
carrying value of the Company’s interests in the joint ventures exchanged for WIL shares, less the elimination of
the portion of the gain representing the Company’s retained direct and indirect ownership interests in WIL. During
2008, the Company finalized its accounting for this exchange using the purchase method of accounting. As a
result, the Company reduced its investment in WIL and recorded goodwill of $176 million. The Company
accounts for its direct and indirect interests in WIL using the equity method of accounting due to its ability to
exercise significant influence over WIL.
Note 7.
Goodwill
The Company accounts for its goodwill and other intangible assets in accordance with SFAS No. 142, Goodwill
and Other Intangible Assets. Under this standard, goodwill and intangible assets deemed to have indefinite lives
are not amortized but are subject to annual impairment tests. The Company recorded a $6 million goodwill
impairment charge during 2009 and no goodwill impairment during 2008. The other changes in goodwill during
2009 are related to acquisitions, investment in a joint venture and foreign currency translation adjustments. The
carrying value of the Company’s other intangible assets is not material.
Goodwill balances attributable to consolidated businesses and investments in affiliates, by segment, are set forth
in the following table.
2009
2008
Consolidated
Investments
Consolidated
Investments
Businesses
in Affiliates
Total
Businesses
In Affiliates
Total
(In millions)
(In millions)
Oilseeds Processing
$ 9
$186
$195
$ 15
$185
$200
Corn Processing
77
7
84
77
7
84
Agricultural Services
44
1
45
51
1
52
Other
126
82
208
103
67
170
Total
$256
$276
$532
$246
$260
$506