Archer Daniels Midland 2009 Annual Report Download - page 54

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48
Archer Daniels Midland Company
Notes to Consolidated Financial Statements (Continued)
Note 3.
Fair Value Measurements (Continued)
The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) during the year ended June 30, 2009.
Level 3 Fair Value Measurements
Inventories
Carried at
Market, Net
Derivative
Contracts,
Net
Marketable
Securities
Total
(In millions)
Balance, June 30, 2008
$ 343
$ (6)
$ 10
$ 347
Total gains (losses), realized or
unrealized, included in earnings
before income taxes*
(278)
(74)
(1)
(353)
Purchases, issuances and settlements
225
(74)
17
168
Transfers in and/or out of Level 3
178
152
(26)
304
Ending balance, June 30, 2009
$ 468
$ (2)
$ –
$ 466
*Includes unrealized losses of $35 million attributable to the change in Level 3 derivative assets still held at June
30, 2009 and unrealized losses of $76 million attributable to the change in Level 3 inventories carried at market still
held at June 30, 2009.
Note 4.
Inventories, Derivative Instruments & Hedging Activities
The Company values certain inventories using the lower of cost, determined by either the LIFO or FIFO method, or
market. During 2009, reductions in certain LIFO inventory quantities resulted in liquidations of a previously
established LIFO cost layer, thereby decreasing the impact of the LIFO valuation reserve adjustment on earnings
by $13 million after income tax.
2009
2008
(In millions)
LIFO inventories
FIFO value
$ 745
$ 1,215
LIFO valuation reserve
(267)
(784)
LIFO inventories carrying value
478
431
FIFO inventories
2,735
2,343
Market inventories
4,569
7,386
$ 7,782
$ 10,160