-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BwzVBGZ0HQgv0uH72EhD7CnT6P7QzGXWW0PHavbxtALprsHWHkD58JYXvhU4II7N XTtFzgsUBuJm+/SCVdOrNw== 0000007084-97-000032.txt : 19970930 0000007084-97-000032.hdr.sgml : 19970930 ACCESSION NUMBER: 0000007084-97-000032 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970929 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARCHER DANIELS MIDLAND CO CENTRAL INDEX KEY: 0000007084 STANDARD INDUSTRIAL CLASSIFICATION: FATS & OILS [2070] IRS NUMBER: 410129150 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-00044 FILM NUMBER: 97687318 BUSINESS ADDRESS: STREET 1: 4666 FARIES PKWY CITY: DECATUR STATE: IL ZIP: 62526 BUSINESS PHONE: 2174245200 10-K 1 1997 10K-ANNUAL REPORT 17 PAGE 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from --------------------- to -------- - ----------- Commission file number 1-44 ARCHER-DANIELS-MIDLAND COMPANY (Exact name of registrant as specified in its charter) Delaware 41-0129150 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 4666 Faries Parkway Box 1470 Decatur, Illinois 62525 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code217-424-5200 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock, no par value New York Stock Exchange Chicago Stock Exchange Swiss Exchange Tokyo Stock Exchange Frankfurt Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X__ No __ 1 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] State the aggregate market value of the voting stock held by non- affiliates of the registrant. Common Stock, no par value--$10.2 billion (Based on the closing price of the New York Stock Exchange on August 18, 1997) Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Common Stock, no par value--531,196,269 shares (August 31, 1997) DOCUMENTS INCORPORATED BY REFERENCE Portions of the annual shareholders' report for the year ended June 30, 1997 are incorporated by reference into Parts I, II and IV. Portions of the annual proxy statement for the year ended June 30, 1997 are incorporated by reference into Part III. 1 PAGE 2 PART I Item 1. BUSINESS (a) General Development of Business Archer Daniels Midland Company was incorporated in Delaware in 1923, successor to the Daniels Linseed Co. founded in 1902. During the last five years, the Company has experienced significant growth, spending approximately $3.8 billion for construction of new plants, expansions of existing plants and the acquisitions of plants and transportation equipment. There have been no significant dispositions during this period. However, during this period, the Company has disposed of its Supreme Sugar subsidiary and its British Arkady bakery ingredient business. In addition, the Company has contributed its formula feed operations, its rice milling operations, its Mexican wheat flour mills and its masa corn flour business to various unconsolidated joint ventures. (b) Financial Information About Industry Segments The Company is in one business segment-- procuring, transporting, storing, processing and merchandising agricultural commodities and products. (c) Narrative Description of Business (i)Principal products produced and principal markets for and methods of distribution of such products. The Company is engaged in the business of procuring, transporting, storing, processing and merchandising agricultural commodities and products. It is one of the world's largest processors of oilseeds, corn and wheat. The Company also processes cocoa beans, milo, oats, barley and peanuts. Other operations include transporting, merchandising and storing agricultural commodities and products. These operations and processes produce products which have primarily two end uses: food or feed ingredients. Each commodity processed is in itself a feed ingredient as are the by-products produced during the processing of each commodity. Production processes of all commodities are capital intensive and similar in nature. These processes involve grinding, crushing or milling with further value added through extraction, refining and fermenting. Generally, each commodity can be processed by any of these methods to generate additional value-added products. All commodities and related processed products share the same network of commodity procurement facilities, transportation services 2 PAGE 3 Item 1. BUSINESS--Continued (including rail, barge, truck and ocean vessels) and storage facilities. The geographic areas, customers and marketing methods are basically the same for all commodities and their related further processed products. Feed ingredient products and by-products are sold to farmers, feed dealers and livestock producers, all of whom purchase products from across the entire commodity chain. Food ingredient products are also sold to one basic group of customers: food and beverage processors. Any single customer may purchase products produced from all commodities, and any single food or feed product could include ingredients produced from all commodities processed. Oilseed Products Soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed and corn germ are processed to provide vegetable oils and meals principally for the food and feed industries. Crude vegetable oil is sold "as is" or is further processed by refining and hydrogenating into margarine, shortening, salad oils and other food products. Partially refined oil is sold for use in chemicals, paints and other industrial products. Lecithin, an emulsifier produced in the vegetable oil refining process, is marketed as a food and feed ingredient. Natural source Vitamin E, an antioxidant, and distilled monoglycerides, an emulsifier, are produced from soybeans and other oilseeds. Oilseed meals supply more than one-half of the high protein ingredients used in the domestic manufacture of commercial livestock and poultry feeds. Soybean meal is further processed into soy flour and grits, used in both food and industrial products, and into value-added soy protein products. Textured vegetable protein (TVP), a soy protein product developed by the Company, is sold primarily to the institutional food market and, through others, to the food consumer market. The Company also produces a wide range of other edible soy protein products including isolated soy protein, soy protein concentrate, soy-based milk products, soy flours and vegetable patties (Harvest Burgers). The Company produces and markets a wide range of consumer and institutional health foods based on the Company's various soy protein products. The Company produces cottonseed flour which is sold primarily to the pharmaceutical industry. Cotton cellulose pulp is manufactured and sold to the chemical, paper and filter markets. 3 PAGE 4 Item 1. BUSINESS-Continued Corn Products The Company is engaged in dry milling and wet milling corn operations. Products produced for use by the food and beverage industry include syrup, starch, glucose, dextrose, crystalline dextrose, high fructose sweeteners, crystalline fructose and grits. Corn gluten feed and distillers grains are produced for use as feed ingredients. Ethyl alcohol is produced to beverage grade or for industrial use as ethanol. In gasoline, ethanol increases octane, and is used as an extender and oxygenate. Corn germ, a by-product of the milling process, is further processed as an oilseed. By fermentation of dextrose, the Company produces citric and lactic acids, feed-grade amino acids and vitamins, lactates, sorbitol, and food emulsifiers principally for the food and feed industries. Wheat and Other Milled Products Wheat flour is sold primarily to large bakeries, durum flour is sold to pasta manufacturers and bulgur, a gelatinized wheat food, is sold to both the export and the domestic food markets. The Company produces wheat starch and vital wheat gluten for the baking industry. The Company mills oats into oat bran and oat flour for institutional and consumer food customers. The Company also mills milo to produce industrial flour that is used in the manufacturing of wall board for the building industry. Other Products and Services The Company buys, stores and cleans agricultural commodities, such as oilseeds, corn, wheat, milo, oats and barley, for resale to other processors worldwide. The Company grinds cocoa beans and produces cocoa liquor, cocoa butter, cocoa powder, chocolate and various compounds for the food processing industry. The Company produces and distributes formula feeds and animal health and nutrition products to the livestock, dairy and poultry industries. Many of the feed ingredients and health and nutrition products are produced in our other commodity processing operations. 4 PAGE 5 The Company produces bakery products and mixes which are sold to the baking industry. Item 1. BUSINESS--Continued The Company produces spaghetti, noodles, macaroni, and other consumer food products. The Company also produces lettuce, other fresh vegetables and herbs in its hydroponic greenhouse. Malt products are produced for use by the food and beverage industries. The Company raises fish for distribution to consumer food customers. Hickory Point Bank and Trust Co. furnishes public banking services, except commercial loans, as well as cash management and securities safekeeping services for the Company. ADM Investor Services, Inc. is a registered futures commission merchant and a clearing member of all principal commodities exchanges. ADM Securities Inc. is a securities broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers, Inc. Agrinational Insurance Company acts as a direct insurer and reinsurer of a portion of the Company's domestic and foreign property and casualty insurance risks. Alfred C. Toepfer International (Germany) and affiliates, of which the Company has a 50% interest, is one of the world's largest, most respected trading companies specializing in processed agricultural products. Toepfer has forty-one sales offices worldwide. Compagnie Industrielle et Financiere des Produits Amylaces SA (Luxembourg) and affiliates, of which the Company has a 41.5% interest, owns European agricultural processing plants that are primarily engaged in wet corn milling and wheat starch production. Gruma S.A. de C.V. (Mexico) and affiliates, of which the Company has a 22% interest, is the world's largest producer and marketer of corn flour and tortillas with operations in the U.S., Mexico and Central America. 5 PAGE 6 Additionally, the Company has a 20% interest in a joint venture which consists of the combined U.S. corn flour operations of ADM and Gruma. The Company also has a 40% share, through a joint venture with Gruma, of four Mexican-based wheat flour mills. Item 1. BUSINESS--Continued The Company owns a 30% non-voting equity interest in Minnesota Corn Processors (MCP). MCP operates wet corn milling plants in Minnesota and Nebraska. The Company formed a strategic alliance with United Grain Growers of Canada (UGG) which resulted in the Company having approximately 45% ownership of UGG. UGG, with more than 165 locations throughout Western Canada, is involved in grain merchandising, crop input marketing and distribution, livestock production services and farm business communications. Consolidated Nutrition, L.C., a joint venture between the Company and Ag Processing Inc., is a supplier of premium animal feeds and animal health products. The Company has a 50% ownership interest in this joint venture. ADM/Countrymark, LLC, a joint venture between the Company and Countrymark Cooperative Inc., operates a grain business in Indiana, Kentucky, Maryland, Michigan and Ohio. The Company has a 50% ownership interest in this joint venture. The Company owns a 25% interest in Acatos & Hutchinson, a U.K. based company, that processes and markets edible oil. Almidones Mexicanos S.A. (Mexico), of which the Company has a 50% interest, operates a wet corn milling plant in Mexico. Golden Peanut Company, a joint venture between the Company, Gold Kist, Inc. and Alimenta Processing Corporation, is a major supplier of peanuts to both the domestic and export markets. The Company has a 33 1/3% ownership interest in this joint venture. ADM-Riceland Partnership, a joint venture between the Company and Riceland Foods, Inc., is a processor of rice and rice products for institutional and consumer food customers. The Company has a 50% ownership interest in this joint venture. The Company owns a 48% interest in Heartland Rail Corporation. Heartland's 81% owned affiliate, Iowa Interstate Railroad, operates a regional railroad in Iowa and Illinois. The Company participates in various joint ventures that operate oilseed crushing facilities, oil refineries and related storage facilities in China and Indonesia. 6 PAGE 7 Item 1. BUSINESS--Continued The percentage of net sales and other operating income by classes of products and services for the last three fiscal years were as follows:
Oilseed products 64% 61% 61% Corn products 16 18 19 Wheat and other milled products 12 13 11 Other products and services 8 8 9 ---- ---- ---- 100% 100% 100% ==== ==== ====
Methods of Distribution Since the Company's customers are principally other manufacturers and processors, its products are distributed mainly in bulk from processing plants or storage facilities directly to the customers' facilities. The Company owns a large number of trucks and trailers and owns or leases large numbers of railroad tank cars and hopper cars to augment those provided by the railroads. The Company uses the inland waterway system and functions as a contract carrier of commodities for its own operations as well as for other companies. The Company owns and leases approximately 2,000 river barges and 27 line-haul towboats. (ii) Status of new products The Company continues to expand its business through the development and production of new, value-added products. The Company has entered the vitamin market with the production of riboflavin and vitamin E and is currently expanding production facilities to produce biotin and vitamin C. The Company continues to develop its soy protein meat substitutes, Harvest Burgers and Harvest Burgers for Recipes, its soy protein powdered non-dairy beverage, Nutribev, and its non-dairy frozen dessert, Dairylike. Additionally, the Company is developing and expanding production facilities to produce emulsifiers, distilled monoglycerides, astaxanthan and isoflavones. 7 PAGE 8 Item 1. BUSINESS--Continued (iii) Source and availability of raw materials Substantially all of the Company's raw materials are agricultural commodities. In any single year, the availability and price of these commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) farm programs and policies, changes in global demand created by population growth and higher standards of living and worldwide production of similar and competitive crops. (iv) Patents, trademarks and licenses The Company owns several valuable patents, trademarks and licenses but does not consider its business dependent upon any single or group of patents, trademarks and licenses. (v) Extent to which business is seasonal Since the Company is so widely diversified in global agribusiness markets, there are no material seasonal fluctuations in the manufacture, sale and distribution of its products and services. There is a degree of seasonality in the growing season and procurement of the Company's principal raw materials: oilseeds, wheat, corn and other grains. However, the actual physical movement of the millions of bushels of these crops through the Company's storage and processing facilities is reasonably constant throughout the year. The worldwide need for food is not seasonal and is ever expanding as is the world's population. (vi) Working capital items Price variations and availability of grain at harvest often cause wide fluctuations in the Company's inventories and short-term borrowings. (vii) Dependence on single customer No material part of the Company's business is dependent upon a single customer or very few customers. (viii) Amount of backlog Because of the nature of the Company's business, the backlog of orders at year end is not a significant indication of the Company's activity for the current or upcoming year. 8 PAGE 9 Item 1. BUSINESS--Continued (ix) Business subject to renegotiation The Company has no business with the government that is subject to renegotiation. (x) Competitive conditions Markets for the Company's products are highly price competitive and sensitive to product substitution. No single company competes with the Company in all of its markets; however, a number of large companies compete in one or more markets. Major competitors in one or more markets include, but are not limited to, Cargill, Inc., ConAgra, Inc., CPC International, Eridania Beghin-Say and Tate & Lyle. (xi) Research and development expenditures Practically all of the Company's technical efforts and expenditures are concerned with food and feed ingredient products. Special efforts are being made to find improvements in food technology to alleviate the protein malnutrition throughout the world, utilizing the three largest United States crops: corn, soybeans and wheat. The need to successfully market new or improved food and feed ingredients developed in the Company's research laboratories led to the concept of technical support. The Company is staffed with technical representatives who work closely with customers and potential customers on the development of food and feed products which incorporate Company- produced ingredients. These technical representatives are an adjunct to both the research and sales functions. The Company maintains a research laboratory in Decatur, Illinois where product and process development activities are conducted. To develop new bioproducts and to improve existing bioproducts, new cultures are developed using classical mutation and genetic engineering. Protein research is conducted at facilities in Decatur where meat and dairy pilot plants support application research. Research to support sales and development for bakery products is done at a laboratory in Olathe, Kansas. Research to support sales and development for cocoa and chocolate products is done in Milwaukee, Wisconsin and the Netherlands. 9 PAGE 10 Item 1. BUSINESS--Continued The amounts spent during the three years ended June 30, 1997, 1996 and 1995 for such technical efforts were approximately $12.2, $11.5 and $11.3 million, respectively. (xii)Material effects of capital expenditures for environmental protection During 1997, $21 million was spent for equipment, facilities and programs for pollution control and compliance with the requirements of various environmental agencies. There have been no material effects upon the earnings and competitive position of the Company resulting from compliance with federal, state and local laws or regulations enacted or adopted relating to the protection of the environment. The Company expects that expenditures for environmental facilities and programs will continue at approximately the present rate with no unusual amounts anticipated for the next two years. (xiii) Number of employees The number of persons employed by the Company was 17,160 at June 30, 1997. (d)Financial Information About Foreign and Domestic Operations and Export Sales The Company's foreign operations are principally in developed countries and do not entail any undue or unusual business risks. Geographic financial information is set forth in "Note 10 of Notes to Consolidated Financial Statements" of the annual shareholders' report for the year ended June 30, 1997 and is incorporated herein by reference. 10 PAGE 11 Item 1. BUSINESS--Continued (e) Executive Officers and Certain Significant Employees Name Title Age G. Allen Andreas President and Chief Executive 54 Officer from 1997. Counsel to the Executive Committee from September 1994. Vice President from 1988. Michael D. Andreas Currently on a temporary 48 administrative leave from the Company. Vice Chairman of the Board of Directors from October 1992 to October 1996. Executive Vice President from 1988 to October 1996. Martin L. Andreas Senior Vice President from 1988.58 Assistant to the Chairman. Charles P. Archer Treasurer from October 1992. 42 Assistant Treasurer from 1988 to 1992. Lewis W. Batchelder Group Vice President from 52 July 1997. Senior Vice President of ADM/Growmark. Various grain merchandising positions since 1971. Charles T. Bayless Executive Vice President from 62 July 1997. Group Vice President from January 1993. Vice President from 1992. President of ADM Processing Division since 1980. Howard E. Buoy Group Vice President from 70 January 1993. Vice President of ADM Processing Division from 1979. William H. Camp Vice President from April 1993.48 Vice President of ADM Processing Division from 1990 to 1993. Mark J. Cheviron Vice President from July 1997.48 Vice President of Corporate Security and Administrative Services since May 1997. Director of Security since 1980. 11 PAGE 12 Item 1. BUSINESS-Continued Barrie R. Cox Vice President from January 1996. 50 President of ADM Food Additives Division from 1994. Vice President of ADM Corn Processing Division from 1990 to 1995. Larry H. Cunningham Group Vice President and 53 President of ADM Corn Processing Division from October 1996. Vice President and President of Protein Specialties Division since July 1993. Formerly President of A. E. Staley Manufacturing Co. Craig L. Hamlin Group Vice President from 51 October 1994. President of ADM Milling from 1989. Edward A. Harjehausen Vice President from October46 1992. Vice President of ADM Corn Processing Division from 1988. James C. Ielase Group Vice President since 56 July 1997. President of Golden Peanut Company from April 1995 to June 1997. Private investments from 1992 to April 1995. Burnell D Kraft Senior Vice President from 66 July 1997. Group Vice President from January 1993. Vice President from 1984. President of ADM/Growmark, Collingwood Grain and Tabor Grain Co. subsidiaries. Paul L. Krug, Jr. Vice President from 1991 and 53 President of ADM Investor Services. John E. Long Vice President from July 1996.68 President of ADM Research Division from 1992. Various senior research positions from 1975. 12 PAGE 13 Item 1. BUSINESS-Continued Jack McDonald Vice President from October 1994. 65 President of Southern Cotton Oil Division from 1990. John D. McNamara Group Vice President and 49 President of North American Oilseed Processing Division from July 1997. President of ADM Agri- Industries since 1992. International merchandising positions since 1984. Steven R. Mills Controller from October 1994. 42 Various senior treasury and accounting positions from 1979. Paul B. Mulhollem Group Vice President from 48 July 1997. Vice President from January 1996. Managing Director of ADM International, Ltd., from 1993. International merchandising positions since 1992. Brian F. Peterson Vice President from January 1996. 55 President of ADM BioProducts Division from 1995. Various merchandising positions from 1980. Raymond V. Preiksaitis Group Vice President from44 July 1997. Vice President - Management Information Systems from 1988. John G. Reed Vice President from 1982. 67 Richard P. Reising Senior Vice President from July53 1997. Vice President, Secretary and General Counsel from 1991 to 1997. John D. Rice Vice President from 1993 and 43 President of ADM Food Oils Division since December 1996. Vice President of ADM Processing Division from 1992. Kenneth A. Robinson Vice President from January 1996. 50 Vice President of ADM Processing Division from 1985. 13 PAGE 14 Item 1. BUSINESS-Continued Douglas J. Schmalz Vice President and Chief 51 Financial Officer from 1986. Controller from 1986 to 1994. David J. Smith Vice President, Secretary and 42 General Counsel from July, 1997. Assistant General Counsel from 1995. Assistant Secretary from 1988 to July 1997. Member of the Law Department since 1981. Stephen H. Yu Vice President from January 1996. 37 Managing Director of ADM Asia-Pacific, Ltd., from 1993. Various merchandising positions with Continental Grain Company from 1986. Officers of the registrant are elected by the Board of Directors for terms of one year and until their successors are duly elected and qualified. G. Allen Andreas and Martin L. Andreas are nephews of Dwayne O. Andreas, a director of the registrant. Michael D. Andreas is the son of Dwayne O. Andreas. Charles P. Archer is the son of S. M. Archer, Jr., a director of the registrant. 14 PAGE 15 Item 2. PROPERTIES (a) Processing Facilities The Company owns, leases, or has a 50% or greater interest in the following processing plants:
United Foreign Total States ------------------------- ---- Owned 133 67 200 Leased 3 - 3 Joint Venture 54 21 75 ---- ---- ---- 190 88 278 === === ===
The Company's operations are such that most products are efficiently processed near the source of raw materials. Consequently, the Company has many plants located strategically in grain producing areas. The annual volume processed will vary depending upon availability of raw materials and demand for finished products. The Company operates thirty-seven domestic and nine foreign oilseed crushing plants with a daily processing capacity of approximately 84,000 metric tons. The domestic plants are located in Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Mississippi, Nebraska, North Dakota, Ohio, South Carolina, Tennessee and Texas. The foreign plants are located in Canada, England, Germany, Mexico and the Netherlands. The Company operates four wet corn milling and two dry corn milling plants with a daily grind capacity of approximately 1,600,000 bushels. These plants and other related properties, including corn germ extraction, corn gluten pellet, and alcohol bottling plants, are located in Illinois, Iowa, New York, and North Dakota. The Company also has interests, through joint ventures, in corn milling plants in Mexico, Bulgaria, Hungary, Slovakia, and Turkey. The Company operates twenty-nine domestic wheat and durum flour mills, a domestic bulgur plant, and thirteen foreign flour mills with a total daily capacity of approximately 408,000 cwt. of flour. The Company also operates seven bakery mix and specialty ingredient plants, three corn flour mills, two milo mills, two pasta plants, and two starch and gluten plants. These plants and other related properties are strategically located across North and Central America in California, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Washington, Wisconsin, Canada, Barbados, Belize and Jamaica. 15 PAGE 16 Item 2. PROPERTIES The Company also has an interest, through a joint venture, in rice milling plants in Arkansas and Louisiana. The Company operates eleven domestic oilseed refineries in Georgia, Illinois, Indiana, Iowa, Nebraska, Tennessee and Texas as well as eight foreign refineries in Canada, England, Germany, and the Netherlands. The Company also has an interest, through a joint venture, in an oilseed refinery in Texas. The Company produces packaged oils in California, Georgia, Illinois and Germany. The Company also has an interest, through a joint venture, in a packaged oils plant in England. Soy protein specialty products are produced in Illinois and the Netherlands, lecithin products are produced in Illinois, Iowa, Nebraska, Canada, Germany and the Netherlands, and Vitamin E is produced in Illinois. Cotton linter pulp is produced in Tennessee and cottonseed flour is produced in Texas. The Company produces feed and food additives at seven bioproducts plants located in Illinois, North Carolina, and Ireland. The Company also operates formula feed and animal health and nutrition plants in Georgia, Illinois, Iowa, Minnesota, Ohio, Texas, Washington, Canada, Ireland, Barbados, Belize, China and Puerto Rico. The Company also has an interest, through a joint venture, in formula feed and pet food plants in Alabama, Arkansas, Georgia, Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, Ohio, Pennsylvania, Tennessee, Wisconsin, Canada, Puerto Rico and Trinidad. The Company operates three domestic and seven foreign chocolate and cocoa bean processing plants located in Massachusetts, North Carolina, Wisconsin, Canada, China, France, Germany, the Netherlands and Singapore. The Company operates five North American barley malting plants located in Illinois, Minnesota, Wisconsin and Canada. The Company operates various other food ingredient plants in England, France and Germany. 16 PAGE 17 Item 2. PROPERTIES--Continued (b) Procurement Facilities The Company operates one hundred ninety domestic terminal, country and river elevators covering the major grain producing states, including one hundred twenty-eight country elevators and sixty-two terminal and river loading facilities including three grain export elevators in Louisiana. Elevators are located in Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, Tennessee, and Texas. Domestic grain terminals, elevators and processing plants have an aggregate storage capacity of approximately 401,000,000 bushels. The Company also has an interest, through a joint venture, in fourteen grain terminals and elevators located in Indiana, Kentucky, Maryland, Michigan, and Ohio with an aggregate storage capacity of approximately 58,000,000 bushels. The Company also operates forty-six foreign grain elevators in Barbados, Brazil, Canada, Ireland and Germany. Thirteen cotton gins are located in Texas and serve the cottonseed crushing plants in that area. Item 3. LEGAL PROCEEDINGS ENVIRONMENTAL MATTERS In 1993, the State of Illinois Environmental Protection Agency ("IEPA") brought administrative enforcement proceedings arising out of the Company's alleged failure to obtain permits for certain pollution control equipment at certain of the Company's processing facilities in Illinois. The Company and IEPA have executed a settlement agreement with respect to one of these proceedings. That agreement is currently before the Illinois Pollution Control Board for approval. The Company believes it has meritorious defenses to the remaining proceeding. In management's opinion this settlement and the remaining proceeding will not either individually or in the aggregate, have a material adverse effect on the Company's financial condition or results of operations. The Company is involved in approximately 35 administrative and judicial proceedings in which it has been identified as a potentially responsible party (PRP) under the federal Superfund law and its state analogs for the study and clean-up of sites contaminated by material discharged into the environment. In all of these matters, there are numerous PRPs. Due to various factors such as the required level of remediation and participation in the clean-up effort by others, the Company's future clean- up costs at these sites cannot be reasonably estimated. However, in management's opinion these proceedings will not, either individually or in the aggregate, have a material adverse effect on the Company's financial condition or results of operations. 17 PAGE 18 LITIGATION REGARDING ALLEGED ANTICOMPETITIVE PRACTICES The Company and certain of its current and former officers and directors are currently defendants in various lawsuits related to alleged anticompetitive practices by the Company as described in more detail below. The Company and the individual defendants named in these actions intend to vigorously defend the actions unless they can be settled on terms deemed acceptable to the parties. The Company has paid and intends to continue to pay the legal expenses of its current and former officers and directors and to indemnify these persons with respect to these actions in accordance with Article X of the Bylaws of the Company. GOVERNMENTAL INVESTIGATIONS Federal grand juries in the Northern Districts of Illinois, California and Georgia, under the direction of the United States Department of Justice ("DOJ"), have been investigating possible violations by the Company and others with respect to the sale of lysine, citric acid and high fructose corn syrup, respectively. In connection with an agreement with the DOJ, the Company has paid the United States a fine of $100 million. This agreement constitutes a global resolution of all matters between the DOJ and the Company and brought to a close all DOJ investigations of the Company. The Company received notice that certain foreign governmental entities were commencing investigations to determine whether anticompetitive practices occurred in their jurisdictions. In February 1997, the Company's three Mexican subsidiaries were notified that the Mexican Federal Competition Commission commenced an investigation as to whether the Company's marketing and sale of lysine in Mexico resulted in violations of that country's federal antitrust laws. In June 1997, the Company and several of its European subsidiaries were notified that the Commission of the European Communities initiated an investigation as to their possible anticompetitive practices in the amino acid markets, in particular the lysine market, in the European Union. In September 1997, the Company received a request for information from the Commission of the European Communities with respect to an investigation being conducted by that Commission into the possible existence of certain agreements and/or concerted practices in the citric acid market within the European Union. Each of these investigations is in the early stages and, accordingly, their ultimate outcome and materiality cannot presently be determined. HIGH FRUCTOSE CORN SYRUP ACTIONS The Company, along with other companies, has been named as a defendant in thirty antitrust suits involving the sale of high fructose corn syrup. Twenty-nine of these actions have been brought as putative class actions. 18 PAGE 19 FEDERAL ACTIONS. Twenty-two of these putative class actions allege violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of high fructose corn syrup during certain periods in the 1990s. These twenty-two actions have been transferred to the United States District Court for the Central District of Illinois and consolidated under the caption In Re High Fructose Corn Syrup Antitrust Litigation, MDL No. 1087 and Master File No. 95-1477. The parties are in the midst of discovery in this action. On January 14, 1997, the Company, along with other companies, was named a defendant in a non-class action antitrust suit involving the sale of high fructose corn syrup and corn syrup. This action which is encaptioned Gray & Co. v. Archer Daniels Midland Co., et al, No. 97- 69-AS and was filed in federal court in Oregon, alleges violations of federal antitrust laws and Oregon and Michigan state antitrust laws, including allegations that defendants conspired to fix, raise, maintain and stabilize the price of corn syrup and high fructose corn syrup, and seeks treble damages, attorneys' fees and costs of an unspecified amount. The parties are in the midst of discovery in this action. STATE ACTIONS. The Company, along with other companies, also has been named as a defendant in six putative class action antitrust suits filed in California state court involving the sale of high fructose corn syrup. These California actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. One of the California putative classes comprises certain direct purchasers of high fructose corn syrup in the State of California during certain periods in the 1990s. This action was filed on October 17, 1995 in Superior Court for the County of Stanislaus, California and encaptioned Kagome Foods, Inc. v Archer-Daniels- Midland Co. et al., Civil Action No. 37236. This action has been removed to federal court and consolidated with the federal class action litigation pending in the Central District of Illinois referred to above. The other five California putative classes comprise certain indirect purchasers of high fructose corn syrup and dextrose in the State of California during certain periods in the 1990s. One such action was filed on July 21, 1995 in the Superior Court of the County of Los Angeles, California and is encaptioned Borgeson v. Archer-Daniels-Midland Co., et al., Civil Action No. BC131940. This action and the other four indirect purchases actions have been coordinated before a single court in Stanislaus County, California under the caption, Food Additives (HFCS) cases, Master File No. 39693. The other four actions are encaptioned, Goings v. Archer Daniels Midland Co., et al., Civil Action No. 750276 (Filed on July 21, 1995, Orange County Superior Court); Rainbow Acres v. Archer Daniels Midland Co., et al., Civil Action No. 974271 (Filed on November 22, 1995, San Francisco County Superior Court); Patane v. Archer Daniels Midland Co., et al., Civil Action No. 212610 (Filed on January 17, 1996, Sonoma County Superior Court); and St. Stan's Brewing Co. v. Archer Daniels Midland Co., et al., Civil Action No. 37237 (Filed on October 17, 1995, Stanislaus County Superior Court). The parties are in the midst of discovery in this action. The Company, along with other companies, also has been named a defendant in a putative class action antitrust suit filed in Alabama state court. The Alabama action alleges violations of the Alabama, Michigan and Minnesota antitrust laws, including allegations that defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seeks an injunction against continued illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the Alabama action comprises certain indirect purchasers in Alabama, Michigan and Minnesota during the period March 18, 1994 to March 18, 1996. This action was filed on March 18, 1996 in the Circuit Court of Coosa County, Alabama, and is encaptioned Caldwell v. Archer-Daniels-Midland Co., et al., Civil Action No. 96-17. On April 23, 1997, the court granted the defendants' motion to sever and dismiss the non-Alabama claims. The remaining parties are in the midst of discovery in this action. LYSINE ACTIONS The Company, along with other companies, had been named as a defendant in twenty-one putative class action antitrust suits involving the sale of lysine. Except for several plaintiffs that opted out of the federal class action settlement and the actions specifically described below, all such suits have been settled, dismissed or withdrawn. 19 PAGE 20 STATE ACTIONS. The Company has been named as a defendant, along with other companies, in two putative class action antitrust suits and one non-class action suit filed in Alabama state court, one putative class action antitrust suit filed in Tennessee state court and one putative class action antitrust suit filed in Michigan state court involving the sale of lysine. The two putative Alabama class actions allege violations of the Alabama antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of lysine, and seek an injunction against continued alleged illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The two putative classes in the Alabama actions comprise certain indirect purchasers of lysine in the State of Alabama during certain periods in the 1990s. One such action was filed on August 17, 1995 in the Circuit Court of DeKalb County, Alabama, and is encaptioned Ashley v. Archer-Daniels-Midland Co., et al., Civil Action No. 95-336. The parties are in the midst of discovery in this action. The other Alabama action, encaptioned Bailey v. Archer Daniels Midland Co., et al., Civil Action No. 95-165, and filed on December 11, 1995 in the Circuit Court of Tallapoosa County, has been placed on the court's administrative docket pending the outcome of the Ashley action. The non-class action, encaptioned Kent v. Archer Daniels Midland Co., et al, No. CV 9701108, and filed on February 21, 1997 in the Circuit Court of Jefferson County, Alabama, includes allegations that are similar to these contained in the putative class actions and seeks monetary relief in the amount of $670,000, injunctive relief against alleged illegal conduct, attorneys fees and costs, punitive damages and other unspecified relief. The Tennessee action, encaptioned McCormack Farms v. Archer Daniels Midland Co., et al., Civil Action No. 96C-2190, and filed on June 11, 1996 in Davidson County Circuit Court, alleges a restraint of trade in violation of the Tennessee Trade Practices Act and Tennessee Consumer Protection Act. This action includes allegations that defendants conspired to fix, maintain or stabilize the prices of lysine and seeks an injunction against continued illegal conduct, treble damages of an unspecified amount, attorneys' fees and costs, and other unspecified relief. The putative class in this case comprises certain indirect purchasers of lysine within the State of Tennessee during the period June 10, 1992 through June 10, 1996. The Company has not yet filed a responsive pleading. The Michigan action alleges a restraint of trade in violation of the Michigan Antitrust Reform Act and include allegations that defendants conspired to fix, raise, maintain and stabilize the price of lysine and seeks an injunction against continued illegal conduct, treble damages of an unspecified amount, attorneys' fees and costs, and other unspecified relief. The putative class in this case comprises certain indirect purchasers of lysine within the State of Michigan during certain periods in the 1990s. This action, encaptioned Michigan Pork Producers Assn, et al. v. Archer Daniels Midland Co., et al., No. 906-10696-CZ, was filed on September 25, 1996 in Kent County Circuit Court. The Company has not yet filed a responsive pleading in either action. CITRIC ACID ACTIONS The Company, along with other companies, had been named as a defendant in eleven putative class action antitrust suits and two non-class action antitrust suits involving the sale of citric acid. Except for several plaintiffs that opted out of the federal class action settlement and the actions specifically described below, all such suits have been settled or dismissed. FEDERAL ACTIONS. Seven of these actions alleged violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of citric acid, and sought injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of citric acid for certain periods in the 1990s. These six actions were transferred to the United States District Court for the Northern District of California and consolidated as In Re Citric Acid Antitrust Litigation, MDL No. 1092, Master File No. C-95-2963(FMS). On September 27, 1996 the Company entered into an agreement with counsel for the plaintiff class in this consolidated action in which among other things, the Company agreed to pay $35 million to members of the class, without admitting the alleged violations of law. On March 3, 1997, the court preliminarily approved the settlement and final approval was granted on July 23, 1997. On February 4, 1997, a class action complaint, encaptioned Galavan Supplements Ltd. v. Archer Daniels Midland Co., et al., No. 97-0704 JGD (VAPx), was filed in the United States District Court for the Central District of California. The Company, along with other companies, was named a defendant in this putative class action brought on behalf of a class consisting of all persons and entities outside of the United States who purchased citric acid directly from any defendants through their foreign facilities during the time period July 1, 1991 through June 30, 1995. This action alleges violations of the federal antitrust laws, including allegations that the defendants conspired to fix, maintain and stabilize the price of citric acid and to allocate amongst themselves their major citric acid customers, accounts and market shares on a worldwide basis. The Company, along with other defendants, has moved to dismiss this action. The Company, along with other companies, also has been named as a defendant in two non-class action federal antitrust suits involving the sale of citric acid. One action was filed on June 9, 1997 in the United States District Court for the Northern District of California and is encaptioned The Proctor & Gamble Manufacturing Co., et al. v. Archer- Daniels-Midland Company, et al., Civil Action No. 97- 2155 (VRW). The other action was filed on June 26, 1997 in the United States District Court for the Northern District of California and is encaptioned Conopco, Inc., et al. v. Archer-Daniels-Midland Company, et al., Civil Action No. 97-2407 (MMC). Both actions 20 PAGE 21 allege violations of federal antitrust laws, including allegations that defendants agreed to fix, raise and maintain the price of citric acid, and seek an injunction against continued alleged illegal conduct, treble damages of an unspecified amount, attorney's fees and costs, and other unspecified relief. These actions, which have been brought by entities that opted out of the federal class action, have been coordinated with In Re Citric Acid Antitrust Litigation that also is pending in the United States District Court for the Northern District of California. The Company and the plaintiffs in Conopco have reached a tentative settlement agreement which provides for consideration to be paid by the Company in the form of cash and product in amounts not deemed material. The parties are in the midst of discovery in the remaining action. STATE ACTIONS. The Company, along with other companies, also has been named as a defendant in one putative class action antitrust suit filed in Alabama state court involving the sale of citric acid. This action alleges violations of the Alabama antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of citric acid, and seeks an injunction against continued alleged illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the Alabama action comprises certain indirect purchasers of citric acid in the State of Alabama from July 1993 until July 1995. This action was filed on July 27, 1995 in the Circuit Court of Walker County, Alabama and is encaptioned Seven Up Bottling Co. of Jasper, Inc. v. Archer-Daniels-Midland Co., et al., Civil Action No. 95- 436. The Company currently is seeking appellate review of the denial of its motion to dismiss this action. The Company, along with other companies, also has been named as a defendant in two putative class action antitrust suits filed in California state court involving the sale of citric acid. These actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants conspired to fix, maintain or stabilize the price of citric acid, and seek injunctions against continued illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain indirect purchasers of citric acid within the State of California during certain periods in the 1990s. One such action was filed on June 12, 1996 in the Superior Court of the County of San Francisco, California and is encaptioned Bianco v. Archer Daniels Midland Co., et al., Civil Action No. 978912. The second action was filed on June 28, 1996 in San Francisco County Superior Court and is encaptioned Wignall v. Archer Daniels Midland Co., et al., Civil Action No. 979360. These actions recently have been coordinated before a single court in San Francisco, County, California under the caption, Food Additives (Lysine/Citric Acid) cases, Coordination Proceeding No. 3265. The Company, along with other companies, also has been named as a defendant in one putative class action antitrust suit filed in Wisconsin state court involving the sale of citric acid. This action alleges violations of the laws of Wisconsin, Minnesota, Alabama, Arizona, California, District of Columbia, Florida, Tennessee, West Virginia, Mississippi, New Mexico, North Carolina, South Dakota, North Dakota, Kansas, Louisiana, Michigan and Maine, including allegations that defendants conspired to maintain the price of citric acid at artificially high levels and seeks injunctive relief, treble damages of an unspecified amount, attorneys fees and costs and other unspecified relief. The putative class in this case comprises certain indirect purchasers of citric acid in the above referenced states during the period July 1, 1991 through June 27, 1995. This action was filed on December 20, 1996 in the Circuit Court for Milwaukee County, Wisconsin and is encaptioned Raz, et al. v. Archer-Daniels-Midland Co., et al., No. 96-CV-9729. The Company has moved to dismiss this action and that motion is set for hearing in October, 1997. HIGH FRUCTOSE CORN SYRUP/CITRIC ACID STATE CLASS ACTIONS The Company, along with other companies, has been named as a defendant in six putative class action antitrust suits involving the sale of both high fructose corn syrup and citric acid. Two of these actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. The putative class in one of these California cases comprises certain direct purchasers of high fructose corn syrup and citric acid in the State of California during the period January 1, 1992 until at least October 1995. This action was filed on October 11, 1995 in the Superior Court of Stanislaus County, California and is entitled Gangi Bros. Packing Co. v. Archer-Daniels-Midland Co., et al., Civil Action No. 37217. The putative class in the other California case comprises certain indirect purchasers of high fructose corn syrup and citric acid in the state of California during the period October 12, 1991 until November 20, 1995. This action was filed on November 20, 1995 in the Superior Court of San Francisco County and is encaptioned MCFH, Inc. v. Archer-Daniels-Midland Co., et al., Civil Action No. 974120. The California Judicial Council has bifurcated the citric acid and high fructose corn syrup claims in these actions and coordinated them with other actions in San Francisco County Superior Court and Stanislaus County Superior Court. The Company, along with other companies, also has been named as a defendant in at least one putative class action antitrust suit filed in West Virginia state court involving the sale of high fructose corn syrup and citric acid. This action also alleges violations of the West Virginia antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the West Virginia action comprises certain entities within the State of West Virginia that purchased products containing high fructose corn syrup and/or citric acid for resale from at least 1992 until 1994. This action was filed on October 26, 1995, in the Circuit Court for Boone County, West Virginia, and is encaptioned Freda's v. Archer-Daniels-Midland Co., et al., Civil Action No. 95- C-125. The parties are in the midst of discovery in this action. The Company, along with other companies, also has been named as defendant in a putative class action antitrust suit filed in Michigan state court involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the Michigan antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the Michigan action comprises certain persons within the State of Michigan that purchased products containing high fructose corn syrup and/or citric acid during the period January 1993 through June 27, 1995. This action was filed on February 26, 1996 in the Circuit Court for Ingham County, Michigan, and is encaptioned Wilcox v. Archer-Daniels-Midland Co., et al., Civil Action No. 96- 82473-CP. The parties are in the midst of discovery in this action. The Company, along with other companies, also has been named as a defendant in a putative class action antitrust suit filed in the Superior Court for the District of Columbia involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the District of Columbia antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the District of Columbia action comprises certain persons within the District of Columbia that purchased products containing high fructose corn syrup and/or citric acid during the period January 1, 1992 through December 31, 1994. This action was filed on April 12, 1996 in the Superior Court for the District of Columbia, and is encaptioned Holder v. Archer-Daniels-Midland Co., et al., Civil Action No. 96-2975. The parties are in the midst of discovery in this action. The Company, along with other companies, has been named as a defendant in a putative class action antitrust suit filed in Kansas state court involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the Kansas antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, court costs and other unspecified relief. The putative class in the Kansas action comprises certain persons within the State of Kansas that purchased products containing high fructose corn syrup and/or citric acid during at least the period January 1, 1992 through December 31, 1994. This action was filed on May 7, 1996 in the District Court of Wyandotte County, Kansas and is encaptioned Waugh v. Archer-Daniels-Midland Co., et al., Case No. 96-C-2029. The parties are in the midst of discovery in this action. 21 PAGE 22 HIGH FRUCTOSE CORN SYRUP/CITRIC ACID/LYSINE STATE CLASS ACTIONS The Company, along with other companies, has been named as a defendant in six putative class action antitrust suits filed in California state court involving the sale of high fructose corn syrup, citric acid and/or lysine. These actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, citric acid and/or lysine, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. One of the putative classes comprises certain direct purchasers of high fructose corn syrup, citric acid and/or lysine in the State of California during a certain period in the 1990s. This action was filed on December 18, 1995 in the Superior Court for Stanislaus County, California and is encaptioned Nu Laid Foods, Inc. v. Archer- Daniels-Midland Co., et al., Civil Action No. 39693. The other five putative classes comprise certain indirect purchasers of high fructose corn syrup, citric acid and/or lysine in the State of California during certain periods in the 1990s. One such action was filed on December 14, 1995 in the Superior Court for Stanislaus County, California and is encaptioned Batson v. Archer- Daniels-Midland Co., et al., Civil Action No. 39680. The other actions are encaptioned Nu Laid Foods, Inc. v. Archer Daniels Midland Co., et al., No 39693 (Filed on December 18, 1995 Stanislaus County Superior Court); Abbott v. Archer Daniels Midland Co., et al., No. 41014 (Filed on December 21, 1995, Stanislaus County Superior Court); Noldin v. Archer Daniels Midland Co., et al., No. 41015 (Filed on December 21, 1995, Stanislaus County Superior Court); Guzman v. Archer Daniels Midland Co., et al., No. 41013 (Filed on December 21, 1995, Stanislaus County Superior Court) and Ricci v. Archer Daniels Midland Co., et al., No. 96-AS-00383 (Filed on February 6, 1996, Sacramento County Superior Court). As noted above, the plaintiffs in these actions and the lysine defendants have executed a settlement agreement that has been approved by the court and the California Judicial Council has bifurcated the citric acid and high fructose corn syrup claims and coordinated them with other actions in San Francisco County Superior Court and Stanislaus County Superior Court. SHAREHOLDER DERIVATIVE ACTIONS Following the public announcement of the grand jury investigations in June 1995 discussed above, three shareholder derivative suits were filed against certain of the Company's then current directors and executive officers and nominally against the Company in the United States District Court for the Northern District of Illinois and fourteen similar shareholder derivative suits were filed in the Delaware Court of Chancery. The derivative suits filed in federal court in Illinois were consolidated under the name Felzen, et al. v. Andreas, et al., Civil Action No. 95-C-4006, 95-C-4535, and a consolidated amended derivative complaint was filed on September 29, 1995. This complaint names all then current directors of the Company (except Mr. Coan) and one former director as defendants and names the Company as a nominal defendant. It alleges breach of fiduciary duty, waste of corporate assets, abuse of control and gross mismanagement, based on the antitrust allegations described above, as well as other alleged wrongdoing. On October 31, 1995, the Court granted the defendants' motion to transfer the Illinois consolidated derivative action to the Central District of Illinois, wherein it now bears the case number 95- 2279. On April 26, 1996, the court dismissed the suit without prejudice and permitted the plaintiffs twenty- one days to refile it. The plaintiffs refiled the complaint on May 17, 1996. The defendants again moved to dismiss the complaint on June 1, 1996. Plaintiffs have supplemented the complaint to include the antitrust settlements and guilty plea described above. The fourteen shareholder derivative suits filed in the Delaware Court of Chancery have been consolidated as In Re Archer Daniels Midland Derivative Litigation, Consolidated No. 14403. An amended and consolidated complaint was filed on November 19, 1996. ADM moved to dismiss the complaint on December 12, 1996. On May 29, 1997, the Company executed a Memorandum of Understanding with counsel for both the Illinois and Delaware shareholder derivative plaintiffs. This Memorandum of Understanding provides for, among other things, $8 million to be paid by or on behalf of certain defendants in these actions to the Company and certain changes in the structure and policies of the Company's Board of Directors. On May 30, 1997, the United States District Court for the Central District of Illinois preliminarily approved this settlement and on July 7, 1997 final approval was granted. Certain entities appealed the final settlement approval order to the United States Court of Appeals for the Seventh Circuit and that appeal is pending. Provided the order approving the Memorandum of Understanding is affirmed, the parties have agreed to jointly seek dismissal of the Delaware actions with prejudice. DELAWARE STATE LAW/FEDERAL SECURITIES LAWS ACTIONS The Company and certain of its current and former directors also have been named as defendants in a putative class action suit encaptioned Loudon v. Archer- Daniels-Midland Co., et al., Civil Action No. 14638, filed in the Delaware Court of Chancery on October 20, 1995. This action alleges violations of Delaware state law and seeks invalidation of the 1995 election of the Company's directors on the basis of alleged omissions from the proxy statement issued by the Company prior to its October 19, 1995 annual meeting of shareholders. The Delaware Court of Chancery dismissed this action on February 20, 1996. On September 17, 1997, the Supreme Court of Delaware affirmed the lower court's judgment and remanded the case to provide the plaintiff's an opportunity to replead. 22 PAGE 23 OTHER As described in the notes to the consolidated financial statements and management's discussion of operations and financial condition, the Company has made provisions to cover assessed fines, litigation settlements and related costs and expenses described above. However, because of the early stage of other putative class actions and proceedings described above, including those related to high fructose corn syrup, the ultimate outcome and materiality of these matters cannot presently be determined. Accordingly, no provision for any liability that may result therefrom has been made in the consolidated financial statements. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Information responsive to this Item is set forth in "Common Stock Market Prices and Dividends" of the annual shareholders' report for the year ended June 30, 1997 and is incorporated herein by reference. Item 6. SELECTED FINANCIAL DATA Information responsive to this Item is set forth in the "Ten-Year Summary of Operating, Financial and Other Data" of the annual shareholders' report for the year ended June 30, 1997 and is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information responsive to this Item is set forth in "Management's Discussion of Operations and Financial Condition" of the annual shareholders' report for the year ended June 30, 1997 and is incorporated herein by reference. Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information responsive to this Item is set forth in "Management's Discussion of Operations and Financial Condition" of the annual shareholders' report for the year ended June 30, 1997 and is incorporated herein by reference. 23 PAGE 24 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements and supplementary data included in the annual shareholders' report for the year ended June 30, 1997 are incorporated herein by reference: Consolidated balance sheets--June 30, 1997 and 1996 Consolidated statements of earnings--Years ended June 30, 1997, 1996 and 1995 Consolidated statements of shareholders' equity--Years ended June 30, 1997, 1996 and 1995 Consolidated statements of cash flows--Years ended June 30, 1997, 1996 and 1995 Notes to consolidated financial statements--June 30, 1997 Summary of Significant Accounting Policies Report of Independent Auditors Quarterly Financial Data (Unaudited) Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to directors and executive officers is set forth in "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the definitive proxy statement for 1997 and is incorporated herein by reference. Certain information with respect to executive officers is included in Item 1(e) of this report. Item 11. EXECUTIVE COMPENSATION Information responsive to this Item is set forth in "Executive Compensation" and "Compensation and Stock Option Committee Report" of the definitive proxy statement for 1997 and is incorporated herein by reference. Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information responsive to this Item is set forth in "Principal Holders of Voting Securities" of the definitive proxy statement for 1997 and is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information responsive to this Item is set forth in "Certain Relationships and Related Transactions" of the definitive proxy statement for 1997 and is incorporated herein by reference. 24 PAGE 25 PART IV Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) The following consolidated financial statements and other financial data of the registrant and its subsidiaries, included in the annual report of the registrant to its shareholders for the year ended June 30, 1997, are incorporated by reference in Item 8, and are also incorporated herein by reference: Consolidated balance sheets--June 30, 1997 and 1996 Consolidated statements of earnings--Years ended June 30, 1997, 1996 and 1995 Consolidated statements of shareholders' equity-- Years ended June 30, 1997, 1996 and 1995 Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K --Continued Consolidated statements of cash flows--Years ended June 30, 1997, 1996 and 1995 Notes to consolidated financial statements--June 30, 1997 Summary of Significant Accounting Policies Quarterly Financial Data (Unaudited) (a)(2) Schedules are not applicable and therefore not included in this report. Financial statements of affiliates accounted for by the equity method have been omitted because they do not, considered individually, constitute significant subsidiaries. (a)(3) LIST OF EXHIBITS (3) Composite Certificate of Incorporation and Bylaws filed on November 7, 1986 as Exhibits 3(a) and 3(b), respectively, to Post Effective Amendment No. 1 to Registration Statement on Form S-3, Registration No. 33-6721, are incorporated herein by reference. (4) Instruments defining the rights of security holders, including: 25 PAGE 26 (i)Indenture dated May 15, 1981, between the r egistrant and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference to Exhibit 4(b) to Amendment No. 1 to Registration Statement No. 2-71862), relating to the $250,000,000 - 7% Debentures due May 15, 2011; (ii)Indenture dated May 1, 1982, between the r egistrant and Morgan Guaranty Trust Company of New York, as Trustee (incorporated by reference to Exhibit 4(c) to Registration Statement No. 2- 77368), relating to the $400,000,000 Zero Coupon Debentures due May 1, 2002; Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K --Continued (iii)Indenture dated as of March 1, 1984 betwe en the registrant and Chemical Bank, as Trustee (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated August 3, 1984 (File No. 1-44)), as supplemented by the Supplemental Indenture dated as of January 9, 1986, between the registrant and Chemical Bank, as Trustee (incorporated by reference to Exhibit 4 to the registrant's Current Report on Form 8-K dated January 9, 1986 (File No. 1-44)), relating to the $100,000,000 - 10 1/4% Debentures due January 15, 2006; (iv)Indenture dated June 1, 1986 between the r egistrant and Chemical Bank, (as successor to Manufacturers Hanover Trust Company), as Trustee (incorporated by reference to Exhibit 4(a) to Registration Statement No. 33-6721), and Supplemental Indenture dated as of August 1, 1989 between the registrant and Chemical Bank (as successor to Manufacturers Hanover Trust Company), as Trustee (incorporated by reference to Exhibit 4(c) to Post-Effective Amendment No. 3 to Registration Statement No. 33-6721), relating to the $300,000,000 - 8 7/8% Debentures due April 15, 2011, the $300,000,000 - 8 3/8% Debentures due April 15, 2017, the $300,000,000 - 8 1/8% Debentures due June 1, 2012, the $250,000,000 - 6 1/4% Notes due May 15, 2003, the $250,000,000 - 7 1/8% Debentures due March 1, 2013, and the $350,000,000 - 7 1/2% Debentures due March 15, 2027. Copies of constituent instruments defining rights of holders of long-term debt of the Company and Subsidiaries, other than the Indentures specified herein, are not filed herewith, pursuant to Instruction (b)(4) (iii)(A) to Item 601 of Regulation S-K, because the total amount of securities authorized under any such instrument does not exceed 10% of the total assets of the Company and Subsidiaries on a consolidated basis. The registrant hereby agrees that it will, upon request by the Commission, furnish to the Commission a copy of each such instrument. (10) Material Contracts--Copies of the Company's stock option plans and its savings and investment plans, pursuant to Instruction (10)(iii)(A) to Item 601 of Regulation S-K, are incorporated herein by reference as follows: (i)Registration Statement No. 2-91811 on Form S -8 dated June 22, 1984 (definitive Prospectus dated July 16, 1984) relating to the Archer Daniels Midland 1982 Incentive Stock Option Plan. 26 PAGE 27 Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K --Continued (ii)Registration Statement No. 33-49409 on Form S-8 dated March 15, 1993 relating to the Archer Daniels Midland 1991 Incentive Stock Option Plan and Archer Daniels Midland Company Savings and Investment Plan. (iii)Registration Statement No. 33-58387 on For m S-8 dated April 3, 1995 relating to the ADM Savings and Investment Plan for Salaried Employees and the ADM Savings and Investment Plan for Hourly Employees. (13)Portions of annual report to shareholders incorporated by reference (21)Subsidiaries of the registra nt (23)Consent of independent audit ors (24) Powers of attorney (27) Financial Data Schedule (b) Reports on Form 8-K A Form 8-K was not filed during the quarter ended June 30, 1997. 27 PAGE 28 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: September 26, 1997 ARCHER-DANIELS-MIDLAND COMPANY /s/ D. J. Smith /s/ D. J. Schmalz /s/ S. R. Mills D. J. Smith D. J. Schmalz S. R. Mills Vice President, Secretary Vice President and Controller and General Counsel Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on September 26, 1997, by the following persons on behalf of the Registrant and in the capacities indicated.
/s/ G. A. Andreas G. A. Andreas*, Chief Executive and Director (Principal Executive Officer) /s/ D. O. Andreas /s/ M. B. Mulroney D. O. Andreas*, M. B. Mulroney*, Chairman of the Board of Director Directors /s/ S. M. Archer, Jr. /s/ R. S. Strauss S. M. Archer, Jr.*, R. S. Strauss*, Director Director /s/ J. R. Block /s/ J. K. Vanier J. R. Block*, J. K. Vanier*, Director Director /s/ R. R. Burt /s/ O. G. Webb R. R. Burt*, O. G. Webb*, Director Director /s/ Mrs. M. H. Carter /s/ A. Young Mrs. M. H. Carter*, A. Young*, Director Director /s/ G. O. Coan /s/ D. J. Smith G. O. Coan*, Attorney-in-Fact Director /s/ F. R. Johnson F. R. Johnson*, Director
*Powers of Attorney authorizing R. P. Reising, D. J. Schmalz and D. J. Smith and each of them, to sign the Form 10-K on behalf of the above-named officers and directors of the Company are being filed with the Securities and Exchange Commission. 28 EX-24 2 POWERS OF ATTORNEY PAGE 1 EXHIBIT 24 -- POWERS OF ATTORNEY ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director, Chairman of the Board and Chief Executive (Principal Executive Officer) of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such Chairman of the Board, Chief Executive and Director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ D. O. ANDREAS D. O. Andreas 1 PAGE 2 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ G. ALLEN ANDREAS G. ALLEN ANDREAS 2 PAGE 3 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/S. M. ARCHER 3 S. M. ARCHER PAGE 4 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/J. R. BLOCK J. R. BLOCK 4 PAGE 5 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ RICHARD BURT RICHARD BURT 5 PAGE 6 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/M. H. CARTER M. H. CARTER 6 PAGE 7 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/G. O. COAN G. O. COAN 7 PAGE 8 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ F. ROSS JOHNSON F. ROSS JOHNSON 8 PAGE 9 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ M. BRIAN MULRONEY M. BRIAN MULRONEY 9 PAGE 10 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/R. S. STRAUSS R. S. STRAUSS 10 PAGE 11 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ J. K. VANIER J. K. VANIER 11 PAGE 12 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ O. G. WEBB O. G. WEBB 12 PAGE 13 ARCHER-DANIELS-MIDLAND COMPANY Power of Attorney of Director KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of ARCHER-DANIELS-MIDLAND COMPANY, a Delaware corporation, does hereby make, constitute and appoint D. J. SCHMALZ, R. P. REISING and D. J. SMITH, and each or any one of them, the undersigned's true and lawful attorneys-in-fact, with power of substitution, for the undersigned and in the undersigned's name, place and stead, to sign and affix the undersigned's name as such director of said Company to the Form 10-K for the fiscal year ending June 30, 1997, and all amendments thereto, to be filed by said Company with the Securities and Exchange Commission, Washington, D.C., and to file the same, with all exhibits thereto and other supporting documents, with said Commission, granting unto said attorneys-in- fact, and each of them, full power and authority to do and perform any and all acts necessary or incidental to the performance and execution of the powers therein expressly granted. IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this 25th day of September, 1997. /s/ ANDREW YOUNG ANDREW YOUNG 13 EX-23 3 CONSENT OF INDEPENDENT AUDITORS PAGE 1 EXHIBIT 23--CONSENT OF INDEPENDENT AUDITORS ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES June 30, 1997 We consent to the incorporation by reference in this Annual Report (Form 10-K) of Archer Daniels Midland Company of our report dated July 31, 1997 included in the 1997 Annual Report to Shareholders of Archer Daniels Midland Company. We also consent to the incorporation by reference in the following Registration Statements of our report dated July 31, 1997, with respect to the consolidated financial statements of Archer Daniels Midland Company incorporated herein by reference in this Annual Report (Form 10-K) for the year ended June 30, 1997. Registration Statement No. 2-91811 on Form S-8 dated June 22, 1984 (definitive Prospectus dated July 16, 1984) relating to the Archer Daniels Midland Company 1982 Incentive Stock Option Plan. Registration Statement No. 33-49409 on Form S-8 dated March 15, 1993 relating to the Archer Daniels Midland 1991 Incentive Stock Option Plan and Archer Daniels Midland Company Savings and Investment Plan. Registration Statement No. 33-50879 on Form S-3 dated November 1, 1993 relating to Debt Securities and Warrants to purchase Debt Securities of Archer Daniels Midland Company. Registration Statement No. 33-55301 on Form S-3 dated August 31, 1994 as amended by Amendment No. 1 dated October 7, 1994 (definitive Prospectus dated October 11, 1994) relating to secondary offering of the Common Stock of Archer Daniels Midland Company. Registration Statement No. 33-56223 on Form S-3 dated October 28, 1994 as amended by Amendment No. 1 dated December 27, 1994 (definitive Prospectus dated December 30, 1994) relating to secondary offering of the Common Stock of Archer Daniels Midland Company. Registration Statement No. 33-58387 on Form S-8 dated April 3, 1995 relating to the ADM Savings and Investment Plan for Salaried Employees and the ADM Savings and Investment Plan for Hourly Employees. Registration Statement No. 333-13233 on Form S-3 dated October 1, 1996 as amended by Amendment No. 1 dated November 8, 1996, Amendment No. 2 dated March 20, 1997 and Amendment No. 3 dated March 31, 1997 (definitive Prospectus dated April 1, 1997) relating to secondary offering of the Common Stock of Archer Daniels Midland Company. Registration Statement No. 333-30137 on Form S-3 dated June 26, 1997 relating to Debt Securities and Warrants to purchase Debt Securities of Archer Daniels Midland Company. Registration Statement No. 333-31623 on Form S-3 dated July 18, 1997 as amended by Amendment No. 1 dated July 29, 1997, (definitive Prospectus dated August 5, 1997) relating to secondary offering of the Common Stock of Archer Daniels Midland Company. /S/ERNST & YOUNG LLP ERNST & YOUNG LLP Minneapolis, Minnesota September 29, 1997 1 EX-21 4 SUBSIDIARIES OF THE REGISTRANT PAGE 1 EXHIBIT 21--SUBSIDIARIES OF THE REGISTRANT ARCHER DANIELS MIDLAND COMPANY June 30, 1997 Following is a list of the Registrant's subsidiaries showing the percentage of voting securities owned:
Organized Under Laws of Ownershi p ADM Agri-Industries Ltd. Canada 100% ADM Europe BV Netherlands 100 ADM Europoort BV Netherlands 100 ADM/Growmark River Systems, Inc. Delaware 100 ADM Beteiligungs GmbH Germany 100 ADM International Ltd. (B) England 100 ADM Investor Services, Inc. Delaware 100 ADM Ireland Holdings Ltd. Ireland 100 ADM Milling Co. Minnesota 100 ADM Oelmuhlen GmbH & Co. KG Germany 100 ADM Ringaskiddy Ireland 100 ADM Transportation Co. Delaware 100 ADMIC Investments NV Netherlands 100 Antilles Agrinational Insurance Company Vermont 100 Agrinational Ltd. Cayman Islands 100 Alfred C. Toepfer International (A) Germany 50 American River Transportation Co. Delaware 100 Collingwood Grain, Inc. Kansas 100 Compagnie Industrielle Et Financiere Luxembourg 42 (CIP)(A) Consolidated Nutrition, L.C. (A) Iowa 50 Erith Oil Works Ltd. England 100 Fleischmann Malting Company, Inc. Delaware 100 Gruma S.A. de C.V. (A) Mexico 22 Hickory Point Bank & Trust Co. Illinois 100 Midland Stars, Inc. Delaware 100 Oelmuhle Hamburg AG (C) Germany 95 Premiere Agri Technologies Inc. Delaware 100 Tabor Grain Co. Nevada 100
(A) Not included in consolidated financial statements--included on the equity basis. (B) ADM International Ltd. has twenty-two subsidiary companies whose names have been omitted because, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary. (C) Oelmuhle Hamburg AG has twelve subsidiaries whose names have been omitted because, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary. The names of twenty-nine domestic subsidiaries and sixty-eight international subsidiaries have been omitted because, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary. 1 EX-13 5 ANNUAL REPORT TO SECURITY HOLDERS PAGE 1 MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION - JUNE 30, 1997 Operations The Company is in one business segment - procuring, transporting, storing, processing and merchandising agricultural commodities and products. A summary of net sales and other operating income by classes of products and services is as follows:
1997 1996 1995 --------------------- ----- (in millions) Oilseed products $8,860 $8,027 $7,620 Corn products 2,171 2,431 2,368 Wheat and other milled 1,631 1,662 1,371 products Other products 1,191 1,120 1,196 ------ ------ ------ $13,85 $13,24 $12,55 3 0 5 ====== ====== ====== = = =
1997 compared to 1996 Net sales and other operating income increased $613 million to a record high $13.9 billion for 1997 due principally to a 4% increase in average selling prices and to a lesser extent sales attributable to recently acquired operations. Sales of oilseed products increased 10% to $8.9 billion due primarily to higher average selling prices reflecting relatively strong demand for protein meal in the domestic market and the higher cost of raw materials. Sales volumes of oilseed products were up for the year due principally to improved export vegetable oil demand. Sales of corn products decreased 11% to $2.2 billion due primarily to decreased sales volumes of fuel alcohol as reduced corn supplies and the resulting higher cost of corn resulted in the Company reducing its production of fuel alcohol. Average selling prices of corn products were up 3% for the year due to the good demand for the Company's fuel alcohol and bioproducts, including lysine and threonine. These average selling price increases were partially offset by lower average selling prices for the Company's sweetener products as a result of the start-up of new corn wet milling facilities in the industry and the resulting overcapacity in the marketplace. Sales of wheat and other milled products decreased 2% to $1.6 billion due to both decreased volumes of products sold and to lower average selling prices reflecting excess milling capacity in the industry. This volume decrease was partially offset by sales related to recently acquired operations in Canada and the Caribbean. The increase in other products and services was due principally to the sales related to the Company's recently acquired cocoa business partially offset by lower merchandising and transportation revenues. Cost of products sold and other operating costs increased $700 million to $12.6 billion due principally to a 5% increase in average raw material commodity prices and to costs attributable to recently acquired operations. 1 PAGE 2 The $86 million decrease in gross profit to $1.3 billion resulted primarily from decreased merchandising and transportation margins and the net effect of increased raw material costs versus higher sales prices. These decreases were partially offset by gross profit attributable to recently acquired operations. Selling, general and administrative expenses increased $202 million to $675 million due primarily to increased legal and litigation related costs of $171 million including provisions related to fines and litigation settlements arising out of the United States Department of Justice antitrust investigation of the Company's lysine and citric acid products, as well as a securities suit brought by shareholders (see note 11 to the financial statements). Additionally, selling, general and administrative expenses increased $26 million due to expenses attributable to recently acquired operations. The decrease in other income for 1997 was due principally to decreased gains on marketable securities transactions, decreased investment income due to both lower invested funds and lower interest rates, increased interest expense due primarily to increased levels of borrowings, and a decrease in other income as 1996 results included a $15 million gain on the sale of the Company's Supreme Sugar subsidiary. The decrease in income taxes for 1997 resulted primarily from lower pretax earnings. The increase in the Company's effective income tax rate to 41% for the year compared to an effective rate of 34% last year was due principally to the non- deductibility for income tax purposes of a portion of the Company's litigation settlements and fines. 1996 compared to 1995 Net sales and other operating income increased $685 million to $13.2 billion for 1996 due principally to a 6% increase in average selling prices. This increase was partially offset by the decrease due to the sale of the Company's Supreme Sugar subsidiary and British Arkady bakery ingredient business, and the contribution of the Company's formula feed operation to an unconsolidated subsidiary. Sales of oilseed products increased 5% to $8 billion due primarily to higher average selling prices reflecting relatively strong demand for protein meal in the domestic market and the higher cost of raw materials. Sales volumes of oilseed products were up slightly for the year as the aforementioned meal demand more than offset the weaker export vegetable oil demand. Sales of corn products increased 3% to $2.4 billion due primarily to increased sales volumes resulting from good demand for the Company's fuel, beverage, and industrial alcohol, as well as for various bioproducts, including citric acid, lysine, and MSG. These volume increases were partially offset by lower average selling prices and lower sales volumes for the Company's sweetener products. Sales of wheat and other milled products increased 21% to $1.7 billion due principally to increased average selling prices reflecting the higher costs of raw materials. These increased average selling prices were partially offset by decreased sales volumes reflecting reduced export flour demand. The decrease in sales of other products and services for the year was due principally to the sale of the Company's Supreme Sugar subsidiary and British Arkady bakery ingredient business as well as the contribution of the Company's formula feed operation to an unconsolidated joint venture. These decreases were partially offset by increased merchandising and transportation revenues. Cost of products sold and other operating costs increased $961 million to $11.9 billion due primarily to a 16% increase in average raw material commodity prices, partially offset by costs attributable to recently divested operations. The $276 million decrease in gross profit to $1.4 billion in 1996 resulted primarily from a $242 million decrease due to the net effect of higher raw material commodity prices versus increased average selling prices and, to a lesser extent, gross profit attributable to recently divested operations. Selling, general and administrative expenses increased $23 million to $473 million in 1996 due primarily to an increase in legal and litigation related expenses which were partially offset by $29 million of expenses attributable to recently divested operations and by an $8 million decrease in bad debt expense. The increase in other income for 1996 was due principally to increased gains on marketable securities transactions and, to a lesser extent, increased equity in earnings of unconsolidated affiliates. Other income for 1996 included a $15 million gain on the sale of the Company's Supreme Sugar subsidiary. The decrease in income taxes for 1996 was the result of lower pretax earnings partially offset by a higher effective income tax rate. The Company's effective income tax rate for 1996 was 34% compared to an effective rate of 33% for 1995. Liquidity and Capital Resources At June 30, 1997, the Company continued to show substantial liquidity with working capital of $2 billion, including cash and marketable securities of $728 million. Working capital also includes inventory with a replacement cost in excess of its LIFO carrying value of approximately $45 million. During 1997, the Company's cash and marketable securities net of short-term debt decreased $1.3 billion, working capital decreased $716 million and shareholders' equity decreased $95 million reflecting the Company's investments in property, plant and equipment expansions, investments in affiliates, business acquisitions, and purchases of the Company's common stock. Capital resources remained strong as reflected in the Company's net worth of $6.1 billion. The principal sources of capital during the year were funds generated from operations and funds generated from the issuance of $350 million of 7.5% debentures due in 2027. The Company's ratio of long-term debt to total capital at year end was approximately 26%. Annual maturities of long-term debt range from $11 million to $24 million during the next four years and will be $428 million in 2002. 2 PAGE 3 Commercial paper and commercial bank lines of credit are available to meet seasonal cash requirements. At June 30, 1997, the Company had $864 million of short-term bank credit lines. Both Standard & Poor's and Moody's continue to assign their highest ratings to the Company's commercial paper and to rate the Company's long-term debt as AA- and Aa3, respectively. In addition to the cash flow generated from operations, the Company has access to equity and debt capital through numerous alternatives from public and private sources in the domestic and international markets. As discussed in Note 11 to the consolidated financial statements, various grand juries under the direction of the United States Department of Justice ("DOJ") have been conducting investigations into possible violations by the Company and others of federal antitrust laws and related matters with respect to the sale of lysine, citric acid and high fructose corn syrup. In connection with an agreement with the DOJ, the Company has paid the United States a fine of $100 million. This agreement constitutes a global resolution of all matters between the DOJ and the Company and brings to a close all DOJ investigations of the Company. In addition, related civil class actions and other proceedings have been filed against the Company, which could result in the Company being subject to monetary damages, other sanctions and expenses. As also discussed in Note 11 to the consolidated financial statements, the Company has settled certain civil federal class action suits involving lysine, citric acid, and securities, and certain state actions filed by indirect purchasers of lysine. The Company made provisions of $200 million in fiscal 1997 and $31 million in fiscal 1996 to cover such fines and settlements and related costs and expenses. Because of the early stage of other putative class actions and proceedings, including those related to high fructose corn syrup, the ultimate outcome and materiality of these matters cannot presently be determined. Accordingly, no provision for any liability that may result therefrom has been made in the consolidated financial statements. Market Risk Sensitive Instruments and Positions The market risk inherent in the Company's market risk sensitive instruments and positions is the potential loss arising from adverse changes in commodity prices, marketable equity security prices, foreign currency exchange rates, and interest rates as discussed below. Commodities The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) farm programs and policies, changes in global demand created by population growth and higher standards of living, and global production of similar and competitive crops. To reduce price risk caused by market fluctuations, the Company generally follows a policy of hedging its inventories and related purchase and sale contracts. In addition, the Company from time to time will hedge portions of its production requirements. The instruments used are principally readily marketable exchange traded futures contracts which are designated as hedges. The changes in market value of such contracts have a high correlation to the price changes of the hedged commodity. To obtain a proper matching of revenue and expense, gains or losses arising from open and closed hedging transactions are included in inventories as a cost of the commodities and reflected in the statement of earnings when the product is sold. A sensitivity analysis has been prepared to estimate the Company's exposure to market risk of its commodity position. The Company's daily net commodity position consists of inventories, related purchase and sales contracts, and exchange traded contracts, including those to hedge portions of production requirements. The fair value of such position is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures prices. Market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in such prices. The results of this analysis, which may differ from actual results, are as follows for fiscal 1997:
Fair Value Market Risk -------------------------------- ----- (in millions) Highest long position $468 $47 Highest short position 314 31 Average position (long) 123 12
Marketable Equity Securities Marketable equity securities at June 30, 1997, which are recorded at a fair value of $911 million and include net unrealized gains of $183 million, have exposure to price risk. This risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in prices quoted by stock exchanges and amounts to $91 million. Actual results may differ. Currencies In order to reduce the risk of foreign currency exchange rate fluctuations, the Company follows a policy of hedging substantially all transactions, except for amounts permanently invested as described below, denominated in a currency other than the functional currencies applicable to each of its various entities. The instruments used for hedging are readily marketable exchange traded futures contracts and forward contracts with banks. The changes in market value of such contracts have a high correlation to the price changes in the currency of the related hedged transactions. The potential loss in fair value for such net currency position resulting from 10% adverse change in foreign currency exchange rates is not material. The amount permanently invested in foreign subsidiaries and affiliates and translated into dollars using the year end exchange rate is $1.7 billion at June 30, 1997. The potential loss in fair value resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates amounts to $167 million. Actual results may differ. 3 PAGE 4 Interest At June 30, 1997, the fair value of the Company's long-term debt is estimated at $2.7 billion using quoted market prices or 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 by $336 million. Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-half percent decrease in interest rates and amounts to $107 million. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company is in one business segment - procuring, transporting, storing, processing, and merchandising agricultural commodities and products. The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) farm programs and policies, changes in global demand created by population growth and higher standards of living, and global production of similar and competitive crops. Principles of Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. Investments in affiliates are carried at cost plus equity in undistributed earnings since acquisition. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Reclassification Certain items in prior year financial statements have been reclassified to conform to the current year's presentation. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Marketable Securities The Company classifies all of its marketable securities as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of income taxes, reported as a component of shareholders' equity. 4 PAGE 5 Inventories Inventories, consisting primarily of merchandisable agricultural commodities and related value-added products, are carried at cost, which is not in excess of market prices. Inventory cost methods include the last-in, first-out (LIFO) method, the first- in, first-out (FIFO) method and the hedging procedure method. The hedging procedure method approximates FIFO cost. To reduce price risk caused by market fluctuations, the Company generally follows a policy of hedging its inventories and related purchase and sale contracts. In addition, the Company from time to time will hedge portions of its production requirements. The instruments used are readily marketable exchange traded futures contracts which are designated as hedges. The changes in market value of such contracts have a high correlation to the price changes of the hedged commodity. Also, the underlying commodity can be delivered against such contracts. To obtain a proper matching of revenue and expense, gains or losses arising from open and closed hedging transactions are included in inventories as a cost of the commodities and reflected in the statement of earnings when the product is sold. Property, Plant and Equipment Property, plant, and equipment are recorded at cost. The Company generally uses the straight line method in computing depreciation for financial reporting purposes and generally uses accelerated methods for income tax purposes. The annual provisions for depreciation have been computed principally in accordance with the following ranges of asset lives: buildings - 10 to 50 years; machinery and equipment - 3 to 30 years. Net Sales The Company follows a policy of recognizing sales at the time of product shipment. Net margins from grain merchandised, rather than the total sales value thereof, are included in net sales in the consolidated statements of earnings. Sales of the Company, including the sales value of grain merchandised, were $18.1 billion in 1997, $18.0 billion in 1996, and $15.6 billion in 1995, and such sales include export sales of $5.4 billion in 1997, $5.7 billion in 1996 and $4.3 billion in 1995. Per Share Data Share and per share information have been adjusted to give effect to all stock dividends, including the 5% stock dividend declared in July 1997 and payable in September 1997. Net earnings per common share is determined by dividing net earnings by the weighted average number of common shares outstanding. The impact of common stock equivalents is not material. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Number 128 (SFAS 128) "Earnings Per Share." This statement establishes standards for computing and presenting basic and diluted earnings per share (EPS) for financial statements issued for periods ending after December 15, 1997. The adoption of SFAS 128 will not have a material effect on the Company's reported EPS. 5 PAGE 6
CONSOLIDATED STATEMENTS OF EARNINGS Year Ended June 30 ------------------------------ ------- 1997 1996 1995 ------------------------------- ------ (In thousands, except per share amounts) Net sales and other operating $13,853,2 $13,239,8 $12,555,4 income 62 39 03 Cost of products sold and other 12,552,71 11,853,07 10,892,47 operating costs 8 0 6 --------- --------- --------- - - - Gross Profit 1,300,544 1,386,769 1,662,927 Selling, general and administrative 675,103 473,294 450,365 expenses --------- --------- --------- - - - Earnings From Operations 625,441 913,475 1,212,562 Other income (expense) 18,964 140,938 (31,039) --------- --------- --------- - - - Earnings Before Income Taxes 644,405 1,054,413 1,181,523 Income taxes 267,096 358,501 385,608 --------- --------- --------- - - - Net Earnings $ $ $ 377,309 695,912 795,915 ========= ========= ========= = = = Net earnings per common share $ $ $ .66 1.20 1.34 ========= ========= ========= = = Average number of shares outstanding 567,954 577,547 596,139 ========= ========= =========
See notes to consolidated financial statements. 6 PAGE 7
CONSOLIDATED BALANCE SHEETS June 30 ---------------------- ----- 1997 1996 ---------------------- ---- Assets (In thousands) Current Assets Cash and cash equivalents $ $ 397,788 534,702 Marketable securities 330,208 820,147 Receivables 1,329,350 1,131,591 Inventories 2,094,092 1,790,636 Prepaid expenses 132,897 107,607 ---------- ---------- Total Current Assets 4,284,335 4,384,683 Investments and Other Assets Investments in and advances to 1,102,420 624,305 affiliates Long-term marketable securities 987,665 1,092,969 Other assets 271,352 233,611 ---------- ---------- 2,361,437 1,950,885 Property, Plant and Equipment Land 118,898 114,542 Buildings 1,448,945 1,245,662 Machinery and equipment 6,841,225 6,034,979 Construction in progress 765,720 588,711 Less allowances for depreciation (4,466,193 (3,869,593 ) ) ---------- ---------- - - 4,708,595 4,114,301 ---------- ---------- - - $11,354,36 $10,449,86 7 9 ========== ========== = =
7 PAGE 8
CONSOLIDATED BALANCE SHEETS June 30 ---------------------- -- 1997 1996 ---------------------- -- (In thousands) Liabilities and Shareholders' Equity Current Liabilities Short-term debt $ 604,831 $ - Accounts payable 1,126,313 993,403 Accrued expenses 493,944 525,626 Current maturities of long-term debt 23,667 114,522 ---------- ---------- Total Current Liabilities 2,248,755 1,633,551 Long-Term Debt 2,344,949 2,002,979 Deferred Liabilities Income taxes 597,514 562,362 Other 113,020 106,165 ---------- ---------- 710,534 668,527 Shareholders' Equity Common stock 4,192,321 3,869,875 Reinvested earnings 1,857,808 2,274,937 ---------- ---------- 6,050,129 6,144,812 ---------- ---------- $11,354,37 $10,449,869 8 ========== ==========
See notes to consolidated financial statements. 8 PAGE 9
CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended June 30 ----------------------------- ----- 1997 1996 1995 ----------------------------- ----- (In thousands) Operating Activities Net earnings $ $ $ 795,915 377,309 695,912 Adjustments to reconcile to net cash provided by operations Depreciation and amortization 446,412 393,605 384,872 Deferred income taxes (12,235) 72,673 25,421 Amortization of long-term debt 29,094 25,584 21,908 discount (Gain) loss on marketable securities (59,549) (109,359 27,633 transactions ) Other (40,758) (33,243) 8,432 Changes in operating assets and liabilities Receivables (23,225) (183,569 (82,203) ) Inventories 23,046 (320,529 (41,561) ) Prepaid expenses (18,760) (1,683) 5,219 Accounts payable and accrued (110,653 314,494 45,611 expenses ) -------- -------- --------- - - Total Operating Activities 610,681 853,885 1,191,247 Investing Activities Purchases of property, plant and (779,508 (754,268 (558,604) equipment ) ) Net assets of businesses acquired (429,940 (28,612) (55,126) ) Investments in and advances to (416,861 (110,615 (122,565) affiliates ) ) Purchases of marketable securities (966,203 (816,401 (2,017,619 ) ) ) Proceeds from sales of marketable 1,607,63 1,260,71 1,940,370 securities 1 0 -------- -------- --------- - - Total Investing Activities (984,881 (449,186 (813,544) ) ) Financing Activities Long-term debt borrowings 348,695 42,066 17,626 Long-term debt payments (115,853 (22,233) (32,304) ) Net borrowings under line of credit 421,046 - - agreements Purchases of treasury stock (312,525 (259,980 (179,613) ) ) Cash dividends and other (104,077 (84,443) (45,213) ) -------- -------- --------- - - Total Financing Activities 237,286 (324,590 (239,504) ) -------- -------- --------- - - Increase (Decrease) In Cash And Cash (136,914 80,109 138,199 Equivalents ) Cash And Cash Equivalents Beginning Of 534,702 454,593 316,394 Period -------- -------- -------- - - Cash And Cash Equivalents End Of $ $ $ 454,593 Period 397,788 534,702 ======== ======== ========= = =
See notes to consolidated financial statements. 9 PAGE 10
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Common Stock --------- -- Shares Amount Reinvest ed Earnings ----------------------------- ------ (In thousands) Balance July 1, 1994 $ 343,639 $3,415,9 $1,629,4 55 66 Net earnings - - 795,915 Cash dividends paid - $.08 per - - (46,825) share 3-for-2 stock split 172,030 - - 5% stock dividend 25,358 406,019 (406,019 ) Treasury stock purchases (9,756) (179,613 - ) Foreign currency translation - - 66,005 Unrealized net gains on marketable securities - - 147,118 Other 1,253 26,616 (472) --------- -------- -------- - - Balance June 30, 1995 532,524 3,668,97 2,185,18 7 8 Net earnings - - 695,912 Cash dividends paid - $.16 per - - (90,860) share 5% stock dividend 25,991 411,542 (411,542 ) Treasury stock purchases (15,632) (259,980 - ) Foreign currency translation - - (96,101) Change in unrealized net gains on marketable securities - - (7,421) Other 2,938 49,336 (239) --------- -------- -------- - - Balance June 30, 1996 545,821 3,869,87 2,274,93 5 7 Net earnings - - 377,309 Cash dividends paid - $.19 per - - (106,990 share ) 5% stock dividend 26,565 594,590 (594,590 ) Treasury stock purchases (16,707) (312,525 - ) Foreign currency translation - - (73,393) Change in unrealized net gains on marketable securities - - (19,199) --------- -------- -------- -- - Other 2,195 40,381 (266) --------- -------- -------- -- Balance June 30, 1997 557,874 $4,192,32 $1,857,8 1 08 ========= ======== ======== = ==
See notes to consolidated financial statements. 10 PAGE 11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1-Marketable Securities and Cash Equivalents
Unrealiz Unrealize Fair ed d Cost Gains Losses Value -------------------------------------- -------- (In thousands) 1997 United States government obligations Maturity less than 1 year $ $ $ $ 455,657 66 19 455,704 Maturity 1 year to 5 74,332 70 108 74,294 years Other debt securities Maturity less than 1 year 157,588 435 - 158,023 Equity securities 728,448 186,551 3,540 911,459 -------- -------- -------- -------- -- -- -- -- $1,416,0 $187,122 $ 3,667 $1,599,4 25 80 ======== ======== ======== ======== == == == == 1996 United States government obligations Maturity less than 1 year $1,184,2 $ $ $1,188,0 16 4,027 235 08 Maturity 1 year to 5 19,026 - 201 18,825 years Other debt securities Maturity less than 1 year 148,345 716 - 149,061 Maturity 1 year to 5 58,962 1,813 - 60,775 years Equity securities 804,052 212,906 5,602 1,011,35 6 -------- -------- -------- -------- -- -- -- -- $2,214,6 $219,462 $ 6,038 $2,428,0 01 25 ======== ======== ======== ======== == == == ==
11 PAGE 12 Note 2-Inventories
1997 1996 ---------------------- ----- (In thousands) LIFO inventories FIFO value $ 521,277 $ 705,814 LIFO valuation reserve (44,811) (190,641) ---------- ---------- LIFO carrying value 476,466 515,173 FIFO inventories, including hedging procedure method 1,617,626 1,275,463 ---------- ---------- $2,094,092 $1,790,636 ========== ========== Note 3-Accrued Expenses 1997 1996 ---------------------- ----- (In thousands) Payroll and employee benefits $ $ 128,205 117,211 Income taxes 99,744 175,603 Other 265,995 232,812 ---------- ---------- - $ $ 493,944 525,626 ========== ==========
12 PAGE 13
Note 4-Debt and Financing Arrangements 1997 1996 ------------------------ ----- (In thousands) 7.5% Debentures $350 million face amount, due in 2027 $ 347,860 $ - 8.875% Debentures $300 million face amount, due in 2011 298,331 298,271 8.125% Debentures $300 million face amount, due in 2012 298,079 298,015 8.375% Debentures $300 million face amount, due in 2017 294,285 294,178 7.125% Debentures $250 million face amount, due in 2013 249,416 249,397 6.25% Notes $250 million face amount, due in 2003 249,353 249,280 Zero Coupon Debt $400 million face amount, due in 2002 209,967 183,736 7% Debentures $250 million face amount, due in 2011 131,486 129,083 10.25% Debentures $100 million face amount, due in 2006 98,847 98,767 6% Bonds 150 million Deutsche Mark face amount, due in June 1997 - 98,370 Industrial Revenue Bonds at various rates from 5.30% to 13.25% and due in varying amounts to 2011 74,571 76,498 Other 116,421 141,906 ---------- ---------- Total long-term debt 2,368,616 2,117,501 Less current maturities (23,667) (114,522) ---------- ---------- $2,344,949 $2,002,979 ========== ==========
13 PAGE 14 At June 30, 1997, the fair value of the Company's long-term debt exceeded the carrying value by $336 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. Unamortized original issue discounts on the 7% Debentures and Zero Coupon Debt issues are being amortized at 15.35% and 13.80%, respectively. Accelerated amortization of the discounts for tax purposes has the effect of lowering the actual rate of interest to be paid over the remaining lives of the issues to approximately 10.33% and 5.36%, respectively. The aggregate maturities for long-term debt for the five years after June 30, 1997 are $24 million, $15 million, $11 million, $21 million and $428 million, respectively. At June 30, 1997 the Company had lines of credit totaling $864 million. The weighted average interest rate on short-term borrowings outstanding at June 30, 1997 was 4.81%. Note 5-Shareholders' Equity The Company has authorized 800 million shares of common stock and 500,000 shares of preferred stock, both without par value. No preferred stock has been issued. At June 30, 1997 and 1996, the Company had approximately 19.7 million and 33.4 million common shares, respectively, in treasury. Treasury stock is recorded at cost, $327 million at June 30, 1997, as a reduction of common stock. Stock option plans provide for the granting of options to employees to purchase common stock of the Company at market value on the date of grant. Options expire five to ten years after the date of grant. At June 30, 1997, options for 4,320,588 shares at a weighted average price of $14.39 per share were outstanding of which 1,616,528 shares were exercisable at a weighted average price of $13.16 per share. There were 3,958,635 shares available for future grant at June 30, 1997. The Company accounts for its stock option plans in accordance with Accounting Principles Board (APB) Opinion Number 25 "Accounting for Stock Issued to Employees." Under APB 25 no compensation expense is recognized if the exercise price of the employee stock option equals the market price on the grant date. Statement of Financial Accounting Standards Number 123 "Accounting for Stock-Based Compensation" requires the fair value of options granted and the pro forma impact on earnings and earnings per share be disclosed when material. The pro forma impact for 1997 and 1996 is not material. Cumulative foreign currency translation losses of $107 million and unrealized gains on securities of $120 million at June 30, 1997, net of applicable taxes, are included as components of reinvested earnings. 14 PAGE 15
Note 6-Other Income (Expense) 1997 1996 1995 (In thousands) Investment income $ $ $ 121,991 150,446 147,133 Interest expense (197,214) (170,089) (170,88 6) Gain (loss) on marketable securities transactions 59,810 109,359 (27,633 ) Equity in earnings (losses) 35,243 31,780 (19,801 of affiliates ) Other (866) 19,442 40,148 _________ ________ _______ _ __ __ $ $ $ 18,994 140,938 (31,039 ) ====== ===== =====
Interest expense is net of interest capitalized of $41 million, $43 million and $32 million in 1997, 1996 and 1995, respectively. The Company made interest payments of $198 million, $188 million and $181 million in 1997, 1996 and 1995 respectively. The realized gains on sales of available-for-sale marketable securities totaled $63 million, $109 million and $18 million in 1997, 1996 and 1995, respectively. The realized losses totaled $3 million and $46 million in 1997 and 1995, respectively. 15 PAGE 16 Note 7-Income Taxes For financial reporting purposes, earnings before income taxes includes the following components:
1997 1996 1995 ________________________________ (In thousands) United States $ $ $1,022,2 563,086 907,376 45 Foreign 81,319 147,037 159,278 ________ ________ ________ __ __ _ $ $1,054,4 $1,181,5 644,405 13 23 ====== ====== ======
Significant components of income taxes are as follows:
1997 1996 1995 ______________________________________ (In thousands) Current Federal $ $ $ 216,641 207,166 271,702 State 29,440 29,604 38,768 Foreign 27,352 46,646 42,085 Deferred Federal (5,357) 69,253 30,191 State (2,910) 6,467 2,108 Foreign 1,930 (635) 754 _________ _________ _________ _ $ $ $ 267,096 358,501 385,608 ====== ====== =====
Significant components of the Company's deferred tax liabilities and assets are as follows:
1997 1996 __________________________ (In thousands) Deferred tax liabilities Depreciation $446,083 $413,792 Unrealized gain on marketable 62,957 73,727 securities Bond discount amortization 56,312 60,659 Other 76,992 66,812 ________ ________ 642,344 614,990
Deferred tax assets Postretirement benefits 29,318 27,822 Other 64,186 76,337 ________ ________ 93,504 104,159 ________ ________ Net deferred tax liabilities 548,840 510,831 Current net deferred tax assets included in prepaid expenses 48,674 51,531 ________ ________ Non-current net deferred tax $597,514 $562,362 liabilities ===== =====
Reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows:
1997 1996 1995 Statutory rate 35.0% 35.0% 35.0% Litigation settlements and fines 7.5 - - State income taxes, net of federal tax benefit 2.7 2.2 2.3 Foreign sales corporation (3.4) (2.4) (1.8) Other (0.4) (0.8) (2.9) _____ _____ ____ Effective rate 41.4 % 34.0% 32.6% ==== ==== ====
The Company made income tax payments of $312 million, $268 million and $354 million in 1997, 1996 and 1995, respectively. Undistributed earnings of the Company's foreign subsidiaries amounting to approximately $460 million at June 30, 1997, are considered to be permanently reinvested and, accordingly, no provision for U.S. income taxes has been provided thereon. It is not practicable to determine the deferred tax liability for temporary differences related to these undistributed earnings. Note 8-Leases The Company has noncancellable operating leases with total future rental commitments of $161 million, which range from $7 million to $31 million during each of the next five years, and expire on various dates through 2026. Rent expense for 1997, 1996 and 1995 was $69 million, $73 million and $73 million, respectively. 16 PAGE 17 Note 9-Employee Benefit Plans The Company has noncontributory and trusteed pension plans covering substantially all employees. It is the Company's policy to fund pension costs as required by the Employee Retirement Income Security Act. At June 30, 1997, the plans had assets at fair value of $432 million and projected benefit obligations of $458 million based on a discount rate of 7.5%. Pension expense is not material. The Company has postretirement health care and life insurance plans covering substantially all employees. The fully accrued accumulated postretirement benefit obligations (APBO) for the unfunded plans at June 30, 1997 were $59 million, based on a discount rate of 7.5% and an assumed health care cost trend rate of 9.7% for 1998 gradually decreasing to 5.5% by 2004. Expense of these plans is not material. A 1% increase in the health care cost trend rate assumption would not have had a material impact on the APBO or expense for the year. In addition, the Company has savings and investment plans available to eligible employees with one year of service. Employees may contribute up to 6% of their salaries, not to exceed $9,500. The Company matches these contributions, at various levels, to a maximum of $6,333.
Note 10-Geographic Information 1997 1996 1995 (In millions) Net sales and other operating income: United States $ 9,733 $ 9,661 $ 9,052 Europe 3,039 2,753 2,754 Other foreign 1,041 826 749 _______ _______ _______ $13,853 $13,240 $12,555 ==== ==== ==== Sales or transfers between geographic areas: United States $ 354 $ 282 $ 166 Europe 51 108 115 Other foreign 146 133 54 _______ ______ ______ $ 551 $ 523 $ 335 ==== ==== ==== Earnings from operations: United States $ 550 $ 805 $ 1,089 Europe 46 69 77 Other foreign 29 39 47 _______ ______ ______ $ 625 $ 913 $ 1,213 ==== ==== ==== Identifiable assets: United States $ 6,663 $ 6,025 $ 5,351 Europe 1,288 929 846 Other foreign 585 418 334 _______ ______ ______ $ 8,536 $ 7,372 $ 6,531 ==== ==== ====
Earnings from operations represent earnings before other income and income taxes. Sales or transfers between geographic areas are made at established transfer prices. Identifiable assets exclude cash and cash equivalents, marketable securities and investments in and advances to affiliates. At June 30, 1997, approximately $1.3 billion of the Company's cash and cash equivalents, marketable securities and investments in affiliates were foreign assets, of which $697 million were in Europe. 17 PAGE 18 Note 11. Antitrust Investigation and Related Litigation Federal grand juries in the Northern Districts of Illinois, California and Georgia, under the direction of the United States Department of Justice ("DOJ"), have been investigating possible violations by the Company and others with respect to the sale of lysine, citric acid and high fructose corn syrup, respectively. In connection with an agreement with the DOJ, the Company has paid the United States a fine of $100 million. This agreement constitutes a global resolution of all matters between the DOJ and the Company and brings to a close all DOJ investigations of the Company. Following public announcement in June 1995 of these investigations, the Company and certain of its then current directors and executive officers were named as defendants in a number of putative class action suits for alleged violations of federal securities laws on behalf of all purchasers of securities of the Company during the period between certain dates in 1992 and 1995. The Company, along with other domestic and foreign companies, was named as a defendant in a number of putative class action antitrust suits and other proceedings involving the sale of lysine, citric acid, and high fructose corn syrup. The plaintiffs generally request unspecified compensatory damages, costs, expenses and unspecified relief. The Company and the individuals named as defendants intend to vigorously defend these actions and proceedings unless they can be settled on terms deemed acceptable by the parties. These matters have resulted and could result in the Company being subject to monetary damages, other sanctions and expenses. The Company has made provisions of $200 million in fiscal 1997 and $31 million in fiscal 1996 to cover the fine, litigation settlements related to the federal lysine class action, federal securities class action, the federal citric class action and certain state actions filed by indirect purchasers of lysine, and related costs and expenses associated with the litigation described in the proceeding paragraph. Because of the early stage of other putative class actions and proceedings, including those related to high fructose corn syrup, the ultimate outcome and materiality of these matters cannot presently be determined. Accordingly, no provision for any liability that may result therefrom has been made in the consolidated financial statements. The Company and its directors have also been named as defendants in a putative class action suit which alleges violations of Delaware state law and seeks invalidation of the election of the Company's directors on the basis of alleged omissions from the proxy statement issued by the Company prior to its 1995 Annual Meeting of Shareholders. This case was dismissed and is now on appeal in the Supreme Court of Delaware. 18 PAGE 19 QUARTERLY FINANCIAL DATA (Unaudited)
Quarter --------------------------------------- -------- First Second Third Fourth Total ------- ------- ------- ------- ------- (In thousands, except per share amounts) Fiscal 1997 Net sales $3,330,47 $3,514,9 $3,414,8 $3,593,03 $13,853,2 5 38 18 1 62 Gross profit 370,000 386,463 216,407 327,674 1,300,544 Net earnings 3,553 189,941 61,167 122,648 377,309 Per common 0.01 0.33 0.10 .022 0.66 share Fiscal 1996 Net sales $3,078,58 $3,424,6 $3,433,4 $3,303,13 $13,239,8 6 85 35 3 39 Gross profit 329,244 402,790 344,877 309,858 1,386,769 Net earnings 163,102 225,970 163,285 143,555 695,912 Per common 0.28 0.39 0.28 0.25 1.20 share
Results for the first quarter of fiscal 1997 include a charge of $.31 per share for fines and litigation settlements arising out of the United States Department of Justice antitrust investigation of the Company's lysine and citric acid products as well as resolution of a securities suit brought by shareholders. COMMON STOCK MARKET PRICES AND DIVIDENDS The Company's common stock is listed and traded on the New York Stock Exchange, Chicago Stock Exchange, Tokyo Stock Exchange, Frankfurt Stock Exchange and the Swiss Exchange. The following table sets forth, for the periods indicated, the high and low market prices of the common stock and common stock cash dividends.
Cash Market Price Dividends High Low Per Share Fiscal 1997--Quarter Ended June 30 22 7/8 16 1/4 0.048 March 31 21 7/8 16 1/2 0.048 December 31 22 18 1/8 0.048 September 30 18 3/8 14 7/8 0.046 Fiscal 1996--Quarter Ended June 30 18 3/8 16 1/4 0.046 March 31 17 3/4 15 1/4 0.046 December 31 16 5/8 13 1/2 0.046 September 30 16 3/8 13 0.022
The number of shareholders of the Company's common stock at June 30, 1997 was 33,834. The Company expects to continue its policy of paying regular cash dividends, although there is no assurance as to future dividends because they are dependent on future earnings, capital requirements and financial condition. 19 PAGE 20 Archer Daniels Midland Company TEN-YEAR SUMMARY
Operating, Financial and Other Data (Dollars in thousands, except per share data) 1997 1996 1995 Operating Net sales and other operating income $13,853,262 $13,239,839 $12,555,403 Depreciation and amortization 446,412 393,605 384,872 Net earnings 377,309 695,912 795,915 Per common share .66 1.20 1.34 Cash dividends 106,990 90,860 46,825 Per common share .19 .16 .08 Financial Working capital $2,035,580 $ 2,751,132 $2,540,260 Per common share 3.65 4.80 4.33 Current ratio 1.9 2.7 3.2 Inventories 2,094,092 1,790,636 1,473,896 Net property, plant and equipment 4,708,595 4,114,301 3,762,281 Gross additions to property, plant and equipment 1,127,360 801,426 657,915 Total assets 11,354,367 10,449,869 9,756,887 Long-term debt 2,344,949 2,002,979 2,070,095 Shareholders' equity 6,050,129 6,144,812 5,854,165 Per common share 10.85 10.72 9.97 Other Weighted average shares outstanding (000's) 567,954 577,547 596,139 Number of shareholders 33,834 35,431 34,385 Number of employees 17,160 14,811 14,833
Certain items in prior year financial statements have been reclassified to conform to the current year's presentation. Share and per share data have been adjusted for three-for-two stock splits in December 1989 and December 1994, and annual 5% stock dividends through September 1997. Net earnings for 1997 include a charge of $.31 per share for fines and litigation settlements arising out of the United States Department of Justice antitrust investigation of the Company's lysine and citric acid products as well as resolution of a securities suit brought by shareholders. Net earnings for 1993 includes a credit of $68 million or $.11 per share and a charge of $35 million or $.06 per share for the cumulative effects of changes in accounting for income taxes and postretirement benefits, respectively. 20 PAGE 21
1994 1993 1992 1991 1990 1989 1988 $11,158,4 $9,578,37 $9,026,17 $8,271,5 $7,551,9 $7,729,6 $6,808,6 79 0 7 88 72 20 32 354,463 328,549 293,729 261,367 248,113 220,538 183,952 484,069 567,527 503,757 466,678 483,522 424,673 353,058 .80 .91 .80 .74 .77 .68 .56 32,586 32,266 30,789 29,527 25,976 17,271 17,095 .05 .05 .05 .05 .04 .03 .03 $2,783,81 $2,961,50 $2,276,56 $1,674,7 $1,627,4 $1,487,1 $1,408,6 7 3 4 35 59 51 64 4.67 4.75 3.64 2.68 2.59 2.39 2.27 3.5 4.1 3.4 3.0 3.4 3.4 3.0 1,422,147 1,131,787 1,025,030 917,495 771,233 694,998 773,702 3,538,575 3,214,834 3,060,096 2,695,62 2,131,80 1,832,25 1,661,22 5 7 8 0 682,485 572,022 614,844 911,586 550,851 405,888 370,295 8,746,853 8,404,111 7,524,530 6,260,60 5,450,01 4,728,30 4,397,56 7 0 8 4 2,021,417 2,039,143 1,562,491 980,273 750,901 690,052 692,878 5,045,421 4,883,251 4,492,353 3,922,29 3,573,22 3,033,50 2,630,52 5 8 3 9 8.46 7.82 7.19 6.28 5.68 4.87 4.25 602,307 624,968 626,641 628,811 626,610 620,769 631,571 33,940 33,654 32,277 28,981 26,076 20,382 18,491 16,013 14,168 13,524 13,049 11,861 10,214 9,631
21 EX-27 6 FINANCIAL DATA SCHEDULE
5 YEAR JUN-30-1997 JUN-30-1997 397,788 330,208 1,329,350 0 2,094,092 4,284,335 9,174,788 4,466,193 11,354,367 2,248,755 2,344,949 0 0 4,192,321 1,857,808 11,354,367 13,853,262 13,853,262 12,552,718 12,552,718 0 0 197,214 644,405 267,096 377,309 0 0 0 377,309 .66 .66
EX-27 7 FINANCIAL DATA SCHEDULE
5 9-MOS JUN-30-1997 MAR-31-1997 632,549 230,668 1,356,393 0 2,463,801 4,814,077 8,999,149 4,372,814 11,634,211 2,607,164 2,327,931 0 0 3,702,008 2,322,572 11,634,211 10,260,231 10,260,231 9,287,361 9,287,361 0 0 142,762 458,575 203,914 254,661 0 0 0 254,661 .47 .47
EX-27 8 FINANCIAL DATA SCHEDULE
5 6-MOS JUN-30-1997 DEC-31-1996 337,254 555,902 1,306,209 0 2,199,435 4,534,578 8,331,146 4,034,270 11,016,605 2,130,577 1,984,735 0 0 3,830,125 2,400,107 11,016,605 6,845,413 6,845,413 6,088,950 6,088,950 0 0 94,260 365,897 172,403 193,494 0 0 0 193,494 .36 .36
EX-27 9 FINANCIAL DATA SCHEDULE
5 3-MOS JUN-30-1997 SEP-30-1996 452,871 930,391 1,187,038 0 1,557,400 4,230,254 8,151,982 3,938,840 10,784,946 2,056,350 1,992,590 0 0 3,845,980 2,229,266 10,784,946 3,330,475 3,330,475 2,960,475 2,960,475 0 0 46,127 78,109 74,556 3,553 0 0 0 3,553 .01 .01
EX-27 10 FINANCIAL DATA SCHEDULE
5 YEAR JUN-30-1996 JUN-30-1996 534,702 820,147 1,131,591 0 1,790,636 4,384,683 7,983,894 3,869,593 10,449,869 1,633,551 2,002,979 0 0 3,869,875 2,274,937 10,449,869 13,239,839 13,239,839 11,853,070 11,853,070 0 0 170,089 1,054,413 358,501 695,912 0 0 0 695,912 1.27 1.27
EX-27 11 FINANCIAL DATA SCHEDULE
5 9-MOS JUN-30-1996 MAR-31-1996 570,220 595,684 1,136,636 0 2,102,677 4,510,732 7,747,294 3,774,676 10,402,810 1,593,441 2,075,880 0 0 3,470,867 2,597,920 10,402,810 9,936,706 9,936,706 8,859,795 8,859,795 0 0 126,657 836,905 284,548 552,357 0 0 0 552,357 1.05 1.05
EX-27 12 FINANCIAL DATA SCHEDULE
5 6-MOS JUN-30-1996 DEC-31-1995 773,903 330,651 1,062,469 0 2,350,840 4,630,781 7,610,131 3,703,494 10,640,366 1,884,343 2,073,507 0 0 3,498,209 2,484,052 10,640,366 6,503,271 6,503,271 5,771,237 5,771,237 0 0 82,633 589,504 200,432 389,072 0 0 0 389,072 .74 .74
EX-27 13 FINANCIAL DATA SCHEDULE
5 3-MOS JUN-30-1996 SEP-30-1995 658,828 482,326 1,062,352 0 1,585,897 3,911,959 7,447,259 3,614,981 10,134,165 1,412,233 2,069,697 0 0 3,632,447 2,356,758 10,134,165 3,078,586 3,078,586 2,749,342 2,749,342 0 0 40,077 247,125 84,023 163,102 0 0 0 163,102 .31 .31
EX-27 14 FINANCIAL DATA SCHEDULE
5 YEAR JUN-30-1995 JUN-30-1995 454,593 664,690 1,013,562 0 1,473,896 3,712,645 7,308,733 3,546,452 9,756,887 1,172,385 2,070,095 0 0 3,668,977 2,185,188 9,756,887 12,555,403 12,555,403 10,892,476 10,892,476 0 0 170,886 1,181,523 385,608 795,915 0 0 0 795,915 1.47 1.47
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