Archer Daniels Midland 2009 Annual Report Download - page 40

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34
Item 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
(Continued)
The amount the Company considers permanently invested in foreign subsidiaries and affiliates and translated into
dollars using the year-end exchange rates is $6.6 billion at June 30, 2009, and $7.0 billion at June 30, 2008. This
decrease is due to the depreciation of foreign currencies versus the U.S. dollar partially offset by an increase in
retained earnings of the foreign subsidiaries and affiliates. The potential loss in fair value resulting from a
hypothetical 10% adverse change in quoted foreign currency exchange rates is $664 million and $695 million for
2009 and 2008, respectively. Actual results may differ.
Interest
The fair value of the Company’s long-term debt is estimated using quoted market prices, where available, and
discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of
borrowing arrangements. Such fair value exceeded the long-term debt carrying value. Market risk is estimated as
the potential increase in fair value resulting from a hypothetical .5% decrease in interest rates. Actual results may
differ.
2009
2008
(In millions)
Fair value of long-term debt
$8,103
$7,789
Excess of fair value over carrying value
303
99
Market risk
310
308
The increase in fair value of long-term debt in 2009 resulted principally from decreased interest rates.