EX-99.1 3 exhibit991.htm EXHIBIT 99.1 exhibit991.htm

 
Archer Daniels Midland Company
4666 Faries Parkway
Decatur, Il 62526
 
News Release

FOR IMMEDIATE RELEASE
February 4, 2008
 
ARCHER DANIELS MIDLAND REPORTS SECOND QUARTER RESULTS
 
Decatur, IL — February 4, 2008— Archer Daniels Midland (NYSE: ADM)
 
Net earnings for the quarter ended December 31, 2007 increased 7 % to $ 473 million - $ .73 per share from $ 441 million - $ .67 per share last year.

“ADM’s record earnings for the second quarter and first half of fiscal 2008 demonstrate the value created by and the strengths of our broadly diversified asset base and product portfolio,” said Patricia Woertz, chairman and CEO. “This quarter, heightened demand, coupled with geographic crop imbalances, drove volumes, prices and volatility in many key markets. Our team’s skill in managing both risk and rapidly changing market opportunities, enabled us to deliver outstanding value for our shareholders.”

Second quarter segment operating profit increased 25 % to $ 955 million from $ 767 million last year.
·  
Oilseeds Processing operating profit increased on improved margin conditions due to strong protein and oil demand.
·  
Corn Processing operating profit decreased due to lower ethanol selling prices and increased net corn costs.
·  
Agricultural Services operating profit increased due to improved global grain merchandising and handling results.
·  
Other segment operating profit increased primarily due to improved results of wheat and malt processing operations and increased financial services income.
 
 
Financial Highlights 
(Amounts in millions, except per share data and percentages)
   
Three Months Ended
   
Six Months Ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
% Change
   
2007
   
2006
   
% Change
 
Net sales and other operating income
  $
16,496
    $
10,976
     
50%
    $
29,324
    $
20,423
     
 44%
 
Segment operating profit
  $
955
    $
767
     
25%
    $
1,752
    $
1,415
     
 24%
 
Net earnings
  $
473
    $
441
     
 7%
    $
913
    $
844
     
  8%
 
Earnings per share
  $
0.73
    $
0.67
     
 9%
    $
1.41
    $
1.28
      
 10%
 
Average number of shares outstanding
   
646
     
661
     
 (2)%
     
646
     
661
     
  (2)%
 



Archer Daniels Midland Company
Page 2
 
Discussion of Operations
 

Net sales and other operating income increased 50 % to $ 16.5 billion.  Increased selling prices resulting from sharp rises in commodity prices accounted for approximately 78 % of the increase while higher sales volumes, principally feed grains, ethanol and wheat, accounted for the remaining 22 % increase.

A summary of operating profit and net earnings is as follows:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
Oilseeds Processing
  $
219
    $
192
    $
27
    $
428
    $
362
    $
66
 
Corn Processing
   
275
     
336
      (61 )    
528
     
625
      (97 )
Agricultural Services
   
315
     
131
     
184
     
544
     
246
     
298
 
Other
   
146
     
108
     
38
     
252
     
182
     
70
 
    Segment operating profit
   
955
     
767
     
188
     
1,752
     
1,415
     
337
 
Corporate
    (270 )     (138 )     (132 )     (421 )     (211 )     (210 )
    Earnings before income taxes
   
685
     
629
     
56
     
1,331
     
1,204
     
127
 
Income taxes
    (212 )     (188 )     (24 )     (418 )     (360 )     (58 )
    Net earnings
  $
473
    $
441
    $
32
    $
913
    $
844
    $
69
 

Net earnings increased $ 32 million for the quarter and $ 69 million for the six months due principally to increased segment operating profit of $ 188 million for the quarter and $ 337 million for the six months partially offset by increased corporate charges related principally to LIFO inventory valuations. In addition, income taxes increased due primarily to increased pretax earnings and to a higher effective tax rate resulting from changes in the geographic mix of earnings.




Archer Daniels Midland Company
Page 3
 
Oilseeds Processing
Operating profits consist of earnings from:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
Crushing and origination
  $
141
    $
129
    $
12
    $
272
    $
233
    $
39
 
Refining, packaging, biodiesel and other
   
46
     
53
      (7 )    
108
     
102
     
6
 
Asia
   
32
     
10
     
22
     
48
     
27
     
21
 
    Total Oilseeds Processing
  $
219
    $
192
    $
27
    $
428
    $
362
    $
66
 

Oilseeds Processing operating profit increased $ 27 million for the quarter and $ 66 million for the six months due principally to strong global demand for protein meal and oil. Worldwide crush volumes increased 2 % for the six months to 14.7 million metric tons. Crushing and origination results increased $ 12 million for the quarter and $ 39 million for the six months due principally to better crush margins in North America and improved origination results in South America partially offset by reduced results of European operations and increased manufacturing costs. Value added refining, packaging, biodiesel and other results for the quarter and six months include asset abandonment charges of $ 15 million and $ 18 million, respectively, compared to $ 2 million in the prior year quarter and six months. Excluding these charges, refining, packaging, biodiesel, and other operating profits increased $ 6 million for the quarter and $ 22 million for the six months principally from improved refining volumes and margins. Asia results increased $ 22 million for the quarter and $ 21 million for the six months reflecting the Company’s share of improved operating earnings of Wilmar International Limited.
 

Corn Processing
Operating profits consist of earnings from:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
Sweeteners and starches
  $
147
    $
152
    $ (5 )   $
311
    $
271
    $
40
 
Bioproducts
   
128
     
184
      (56 )    
217
     
354
      (137 )
    Total Corn Processing
  $
275
    $
336
    $ (61 )   $
528
    $
625
    $ (97 )

Corn Processing operating profit decreased $ 61 million for the quarter and $ 97 million for the six months. Sweeteners and Starches operating profit decreased $ 5 million for the quarter on higher average sweetener and starch selling prices and favorable risk management results, offset by higher net corn and manufacturing costs. For the six months, Sweeteners and Starches operating profit increased $ 40 million due principally to favorable risk management results. Bioproducts results declined $ 56 million for the quarter and $ 137 million for the six months due principally to higher net corn costs and lower ethanol selling prices partially offset by increased ethanol sales volumes and favorable risk management results. In addition, specialty feed results improved on increased selling prices and volumes.


Archer Daniels Midland Company
Page 4
 
Agricultural Services
Operating profits consist of earnings from:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
Merchandising and handling
  $
258
    $
64
    $
194
    $
443
    $
129
    $
314
 
Transportation
   
57
     
67
      (10 )    
101
     
117
      (16 )
    Total Agricultural Services
  $
315
    $
131
    $
184
    $
544
    $
246
    $
298
 

Agricultural Services results increased $ 184 million for the quarter and $ 298 million for the six months due principally to improved global merchandising and handling results as volatile commodity market conditions, large North American crops and global wheat shortages provided increased margin and volume opportunities. Transportation results declined due principally to lower barge freight rates and increased operating costs.
 

Other
Operating profits consist of earnings from:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
Wheat, cocoa and malt
  $
78
    $
50
    $
28
    $
116
    $
93
    $
23
 
Financial
   
68
     
58
     
10
     
136
     
89
     
47
 
    Total Other
  $
146
    $
108
    $
38
    $
252
    $
182
    $
70
 

Other operating profit increased $ 38 million for the quarter and $ 70 million for the six months. Wheat, Cocoa and Malt operations improved $ 28 million for the quarter and $ 23 million for the six months due principally to improved wheat and malt processing operating efficiencies and margins partially offset by lower cocoa press margins.  Financial earnings improved $ 10 million for the quarter and $ 47 million for the six months principally due to marketable security gains of the Company’s brokerage services business, and income from private equity fund investments.


Archer Daniels Midland Company
Page 5


Corporate
Corporate results consist of the following:

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
Inc (Dec)
   
2007
   
2006
   
Inc (Dec)
 
   
(in millions)
 
                                     
LIFO (charge)
  $ (225 )   $ (107 )   $ (118 )   $ (307 )   $ (124 )   $ (183 )
Investment income
   
38
     
23
     
15
     
81
     
41
     
40
 
Corporate costs
    (60 )     (49 )     (11 )     (150 )     (119 )     (31 )
Other
    (23 )     (5 )     (18 )     (45 )     (9 )     (36 )
    Total Corporate
  $ (270 )   $ (138 )   $ (132 )   $ (421 )   $ (211 )   $ (210 )
 

 
 
 
Conference Call Information
Archer Daniels Midland Company will host a conference call and audio Web cast at 8:00 a.m. Central Time on Monday, February 4, 2008 to discuss financial results and provide a Company update.  In addition, a financial summary slide presentation will be available to download approximately 60 minutes prior to the start of the call.  To listen to the call via the Internet or to download the slide presentation, go to: www.admworld.com/webcast.  To listen by phone, dial 866-202-4367 or 617-213-8845; the access code is 54749621.  Replay of the call will be available beginning on February 4, 2008, at 11:00 a.m. Central Time and ending February 11, 2008.  To listen to the replay by telephone, dial 888-286-8010 or 617-801-6888; the access code is: 48905000.  To listen to the replay online, visit www.admworld.com/webcast.

 
Archer Daniels Midland Company (ADM) has a premier position in the agricultural processing value chain and is a world leader in BioEnergy.  ADM is one of the world’s largest processors of soybeans, corn, wheat and cocoa.  ADM is a leading manufacturer of biodiesel, ethanol, soybean oil and meal, corn sweeteners, flour and other value-added food, feed and industrial products.  Headquartered in Decatur, Illinois, ADM has over 27,000 employees, more than 240 processing plants and net sales for the fiscal year ended June 30, 2007 of $44 billion.  Additional information can be found on ADM’s Web site at http://www.admworld.com/.
 

Contacts:
 
David Weintraub
Dwight Grimestad
Director, External Communications
Vice President, Investor Relations
217/451-4960
217/424-4586
 
 
(Financial Tables Follow)



February 4, 2008

Archer Daniels Midland Company
Consolidated Statements of Earnings
(unaudited)

   
Three months ended
   
Six months ended
 
   
December 31,
   
December 31,
 
   
2007
   
2006
   
2007
   
2006
 
   
(in millions, except per share amounts)
 
                         
Net sales and other operating income
  $
16,496
    $
10,976
    $
29,324
    $
20,423
 
Cost of products sold
   
15,548
     
10,068
     
27,446
     
18,650
 
Gross profit
   
948
     
908
     
1,878
     
1,773
 
Selling, general and administrative expenses
   
338
     
298
     
693
     
608
 
Other (income) expense – net
    (75 )     (19 )     (146 )     (39 )
Earnings before income taxes
   
685
     
629
     
1,331
     
1,204
 
Income taxes
   
212
     
188
     
418
     
360
 
Net earnings
  $
473
    $
441
    $
913
    $
844
 
Diluted earnings per common share
  $
.73
    $
.67
    $
1.41
    $
1.28
 
Average number of shares outstanding
   
646
     
661
     
646
     
661
 
                                 
Other (income) expense - net consists of:
                               
Interest expense
  $
113
    $
111
    $
201
    $
208
 
Investment income
    (69 )     (65 )     (132 )     (125 )
Net gain on marketable securities
transactions
    (13 )     (6 )     (27 )     (11 )
Equity in earnings of
unconsolidated affiliates
    (124 )     (66 )     (210 )     (123 )
Other – net
   
18
     
7
     
22
     
12
 
    $ (75 )   $ (19 )   $ (146 )   $ (39 )
                                 
Operating profit by segment is as follows:
                               
Oilseeds Processing (1)
  $
219
    $
192
    $
428
    $
362
 
Corn Processing (3)
   
275
     
336
     
528
     
625
 
Agricultural Services
   
315
     
131
     
544
     
246
 
Other (3)
   
146
     
108
     
252
     
182
 
Total segment operating profit
   
955
     
767
     
1,752
     
1,415
 
Corporate  (2) (3)
    (270 )     (138 )     (421 )     (211 )
Earnings before income taxes
  $
685
    $
629
    $
1,331
    $
1,204
 

(1)
Includes charges for abandonments and write down of long-lived assets of $15 million for the quarter and $ 18 million for the six months ended December 31, 2007. Includes charges for abandonments of $ 2 million for the quarter and six months ended December 31, 2006.
(2)
Includes LIFO charge of $ 225 million for the quarter and $ 307 million for the six months ended December 31, 2007. Includes LIFO charge of $ 107 million for the quarter and $ 124 million for the six months ended December 31, 2006.
(3)
Includes an organizational realignment charge of $23 million for the six months ended December 31, 2007.
 

 
February 4, 2008
Archer Daniels Midland Company
Summary of Financial Condition
(unaudited)
 
   
December 31, 2007
   
June 30, 2007
 
   
(in millions)
 
             
NET INVESTMENT IN
           
Working capital
  $
12,694
    $
7,787
 
Property, plant, and equipment
   
6,574
     
6,010
 
Investments in and advances to affiliates
   
2,736
     
2,498
 
Long-term marketable securities
   
679
     
657
 
Other non-current assets
   
841
     
831
 
    $
23,524
    $
17,783
 
                 
FINANCED BY
               
Short-term debt
  $
4,536
    $
468
 
Long-term debt, including current maturities
   
5,292
     
4,817
 
Deferred liabilities
   
1,372
     
1,245
 
Shareholders' equity
   
12,324
     
11,253
 
    $
23,524
    $
17,783
 
                 
SUMMARY OF CASH FLOWS
           
(unaudited)
           
   
Six Months Ended
 
   
December 31,
 
   
2007
   
2006
 
   
(in millions)
 
Operating Activities
           
Net earnings
  $
913
    $
844
 
Depreciation and asset abandonments
   
380
     
346
 
Other – net
   
72
     
61
 
Changes in operating assets and liabilities
    (4,291 )     (1,547 )
Total Operating Activities
    (2,926 )     (296 )
Investing Activities
               
Purchases of property, plant and equipment
    (896 )     (560 )
Net assets of businesses acquired
    (10 )     (55 )
Other investing activities
    (40 )     (204 )
Total Investing Activities
    (946 )     (819 )
Financing Activities
               
Long-term debt borrowings
   
515
     
15
 
Long-term debt payments
    (49 )     (130 )
Net borrowings under lines of credit
   
4,042
     
1,180
 
Purchases of treasury stock
    (61 )     (136 )
Cash dividends
    (148 )     (131 )
Proceeds from exercises of stock options
   
15
     
27
 
Total Financing Activities
   
4,314
     
825
 
Increase (decrease) in cash and cash equivalents
   
442
      (290 )
Cash and cash equivalents - beginning of period
   
663
     
1,113
 
Cash and cash equivalents - end of period
  $
1,105
    $
823