Archer Daniels Midland 2009 Annual Report Download - page 65

59
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 8.
Debt and Financing Arrangements (Continued)
At June 30, 2009, the fair value of the Company’s long-term debt exceeded the carrying value by $303 million, as
estimated by using quoted market prices or discounted future cash flows based on the Company’s current
incremental borrowing rates for similar types of borrowing arrangements.
The aggregate maturities of long-term debt for the five years after June 30, 2009, are $48 million, $328 million,
$151 million, $268 million, and $1,215 million, respectively.
At June 30, 2009, the Company had pledged certain property, plant, and equipment with a carrying value of $340
million as security for certain long-term debt obligations.
At June 30, 2009, the Company had lines of credit totaling $6.6 billion, of which $6.5 billion was unused. The
weighted average interest rates on short-term borrowings outstanding at June 30, 2009 and 2008, were 2.86% and
2.83%, respectively. Of the Company’s total lines of credit, $4.2 billion support a commercial paper borrowing
facility, against which there were no borrowings at June 30, 2009.
The Company has outstanding standby letters of credit and surety bonds at June 30, 2009 and 2008, totaling
$398 million and $500 million, respectively.
Note 9.
Shareholders’ Equity
The Company has authorized one billion shares of common stock and 500,000 shares of preferred stock, each
without par value. No preferred stock has been issued. At June 30, 2009 and 2008, the Company had
approximately 30.0 million and 27.8 million shares, respectively, in treasury. Treasury stock of $765 million at
June 30, 2009, and $719 million at June 30, 2008, is recorded at cost as a reduction of common stock.
The Company’s employee stock compensation plans provide for the granting of options to employees to purchase
common stock of the Company pursuant to the Company’s 1999 Incentive Compensation Plan and 2002 Incentive
Compensation Plan. These options are issued at market value on the date of grant, vest incrementally over five to
nine years, and expire ten years after the date of grant.
The Company’s 1999 and 2002 Incentive Compensation Plans provide for the granting of restricted stock and
restricted stock units (Restricted Stock Awards) at no cost to certain officers and key employees. The awards are
made in common stock or stock units with equivalent rights and vest at the end of a three-year restriction period.
During 2009, 2008, and 2007, 1.1 million, 1.3 million, and 1.1 million common shares or units, respectively,
were granted as Restricted Stock Awards. At June 30, 2009, there were 1.5 million and 3.5 million shares
available for future grants pursuant to the 1999 and 2002 plans, respectively.
Compensation expense for option grants and Restricted Stock Awards granted to employees is generally
recognized on a straight-line basis during the service period of the respective grant. Certain of the Company’s
option grants and Restricted Stock Awards continue to vest upon the recipient’s retirement from the Company
and compensation expense related to option grants and Restricted Stock Awards granted to retirement eligible
employees is recognized in earnings on the date of grant. Total compensation expense for option grants and
Restricted Stock Awards recognized during 2009, 2008, and 2007 was $65 million, $70 million, and $70 million,
respectively.