EX-99.1 2 ex99_1.htm EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Press Release
 
 
 
 
 
 
Archer Daniels Midland Company
4666 Faries Parkway
Decatur, IL 62525
     
News Release
 
 FOR IMMEDIATE RELEASE

 July 30, 2004


  ARCHER DANIELS MIDLAND REPORTS FOURTH QUARTER AND ANNUAL RESULTS

Decatur, IL — July 30, 2004 — Archer Daniels Midland (NYSE: ADM)
 

 n

 

Net earnings for the year ended June 30, 2004 increased 10% to $ 495 million - $ .76 per share compared to $ 451 million - $ .70 per share last year.

 n

 

Segment operating profit for the year ended June 30, 2004 increased 55% to a record level of $ 1.56 billion.

 n

 

Results for the quarter ended June 30, 2004 were a loss of $ 103 million – ($ .16) per share including a $ 400 million ($ 252 million after tax – ($ .39) per share) charge related to the fructose litigation settlement compared to profits last year of $ 95 million - $ .15 per share.

 n

   Segment operating profit for the quarter increased to $ 268 million from $ 230 million last year.
 

 s

 Oilseed Processing recorded a loss as Chinese contract defaults impacted global oilseed markets.
 s Corn Processing profits increased on improved Bioproducts results.
 s Agricultural Services continued its strong performance.

 s

 Other segment operating profits increased as Wheat Processing, Cocoa Processing and private equity investments continued to improve.

 n

   Financial Highlights
(Amounts in thousands, except per share data and percentages)

 
  
THREE MONTHS ENDED
TWELVE MONTHS ENDED
 

 

 
6/30/04

 

 
6/30/03

 

 
% CHANGE

 

 
6/30/04

 

 
6/30/03

 

 
% CHANGE
  
 
 
 
 
Net sales and other operating income
  
$
9,685,969
  
$
8,048,226
    
   20%
 
$
36,151,394
  
$
30,708,033
    
18%
 
Segment operating profit
  
$
267,617
  
$
230,227
    
   16%
 
$
1,561,011
  
$
1,009,912
    
55%
 
Net earnings (loss)
  
$
(103,061
)
$
95,020
    
-208%
 
$
494,710
  
$
451,145
    
10%
 
Earnings (loss) per share
  
$
(.16
)
$
.15
    
-207%
 
$
.76
  
$
.70
    
  9%
 
Average number of shares outstanding
    
650,279
    
644,611
    
     1%
 
  
647,698
    
646,086
    
-
  
 
 
 
 

"
2004 was a year characterized by extreme volatility and difficult business conditions for global agribusiness. In addition, during this past quarter,  ADM settled its remaining significant litigation exposures. Despite these challenges, we reported record operating profits for the fiscal year and a solid improvement in full year earnings. ADM is today strongly positioned to meet the needs of its global customers  and deliver value to its shareholders.”
 
G. Allen Andreas, Chairman and Chief Executive
 
     
Archer Daniels Midland
Page 2

Discussion of Operations
Net earnings for the year ended June 30, 2004 were $ 495 million, or $ .76 per share, compared to $ 451 million, or $ .70 per share, last year. Results for the quarter ended June 30, 2004 were a loss of $ 103 million, or $ .16 per share, compared to earnings of $ 95 million, or $ .15 per share, last year. The quarter and year ended June 30, 2004 includes a $ 400 million charge ($ 252 million after tax, or $ .39 per share) related to the settlement of fructose litigation.

Segment operating profit increased $ 37 million to $ 268 million for the quarter and increased $ 551 million to $ 1.56 billion for the year as operating profit improvements were realized in all major segments except the Oilseed Processing segment. Oilseed Processing operating results declined to a loss of $ 15 million for the quarter and earnings of $ 291 million for the year as Chinese contract defaults in the fourth quarter had a significant impact on global oilseed markets which negatively impacted our oilseeds operation. Corn Processing operating earnings increased to $ 150 million for the quarter and $ 661 million for the year as Bioproducts results improved due to increased volumes and selling prices of alcohol and lysine product categories which more than offset higher net corn costs. Earnings of Sweetener and Starch products declined for the quarter as increased net corn costs more than offset improved volumes and selling prices. For the year, Sweetener and Starch earnings improved due to increased volumes and selling prices. Agricultural Services’ balanced global grain and marketing system continued its strong performance resulting in improved operating profits. Other segment operating profit increased to $ 88 million for the quarter and $ 359 million for the year as Food and Feed Ingredient earnings increased due to improved operating results of wheat processing and cocoa processing operations. In addition, financial operations increased primarily due to improved results of our private equity fund investments. Corporate expense for the quarter increased $ 328 million to $ 426 million due principally to the $ 400 million fructose litigation settlement partially offset by a $ 42 million credit due to changing commodity prices on LIFO inventory valuations and an increase of $ 10 million in security gains. For the year, corporate expense increased $ 464 million due primarily to the $ 400 million fructose litigation settlement and an increased charge of $ 104 million due to changing commodity price effects on LIFO inventory valuations partially offset by increased security gains of $ 24 million.

Fiscal 2004 fourth quarter includes a $ 400 million ($ 252 million after tax, equal to $ .39 per share) charge for the fructose litigation settlement, $ 10 million ($ 6 million after tax, equal to $ .01 per share) of asset abandonment charges and $ 12 million ($ 8 million after tax, equal to $ .01 per share) of security gains. Last years fourth quarter included $ 13 million ($ 8 million after tax, equal to $ .01 per share) of asset abandonment charges and $ 2 million ($ 1 million after tax) of security gains. Fiscal 2004 twelve month results includes a $ 400 million ($ 252 million after tax, equal to $ .39 per share) charge for the fructose litigation settlement, $ 51 million ($32 million after tax, equal to $ .05 per share) of asset abandonment charges, a $ 21 million ($ 13 million after tax, equal to $ .02 per share) gain from an insurance-related lawsuit pertaining to the flood of 1993 and $ 24 million ($ 15 million after tax, equal to $ .02 a share) of security gains. Fiscal 2003 twelve month results include $ 13 million ($ 8 million after tax, equal to $ .01 per share) of asset abandonment charges, a $ 28 million ($ 17 million after tax, equal to $ .03 per share) gain from partial settlements of the Company’s claims related to vitamin antitrust litigation, and an $ 11 million ($ 7 million after tax, equal to $ .01 per share) charge related to the company’s global settlement with the EPA.
 
 
     
 
Archer Daniels Midland
Page 3
 
The Company has changed its reportable segments to reflect how the Company now manages its businesses and to reflect the activities of the Company as viewed by the Company’s chief operating decision maker. The Company’s Corn Processing segment now includes all of the Company’s fermentation activities, including operations such as Specialty Feed Ingredients that was previously classified in Other. The results of the Corn Processing segment are presented as two classes of products: Sweeteners & Starches and Bioproducts. Additionally, the Company will present two sub-categories of Other: Food & Feed Ingredients and Financial. Prior periods segment information has been reclassified to conform to the new presentation. Attached to this release are restated segment operating profit disclosures for each quarter in the fiscal years ended June 30, 2004 and 2003.
 
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast to discuss fourth quarter results at 10:00 a.m. Central Daylight Time on July 30, 2004. To listen by phone, dial 888-639-3004 or 706-679-8315, no access code is required. Digital replay of the call will be available for fourteen days beginning on July 30, 2004 approximately 2 hours after the call and ending on August 13, 2004 at 10:59 p.m. CDT. To access this replay, dial 800-642-1687 or 706-645-9291 and enter access code: 8533881. To listen to a live broadcast via the Internet go to: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=ADM&script=1010&item_id=825235. A replay of the Web cast will be available for 10 days on the www.admworld.com Web site.

Archer Daniels Midland Company (ADM) is a world leader in agricultural processing. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is also a leader in the production of soy meal and oil, ethanol, corn sweeteners and flour. In addition, ADM produces value-added food and feed ingredients. Headquartered in Decatur, Illinois, ADM has over 26,000 employees, more than 260 processing plants and net sales for the fiscal year ended June 30, 2004 of $36.2 billion. Additional information can be found on ADM's Web site at http://www.admworld.com.

Contacts:
 
Brian Peterson
Dwight Grimestad
Senior Vice President, Corporate Affairs
Vice President, Investor Relations
217/424-5413
217/424-4586
(Financial Tables Follow)

 
     
 
July 30, 2004
 
 
 
 
 
 
 
ARCHER DANIELS MIDLAND COMPANY
 
 
 
CONSOLIDATED STATEMENTS OF EARNINGS
 
(unaudited)
 
 
 
 
 
 
 
 
Three months ended
Twelve months ended
 

 
June 30,
June 30,
   
   
2004

 

 
2003

 

 
2004

 

 
2003
  
   
 
 
 
(in thousands, except per share amounts)
 
    
 
    
 
    
 
    
 
  
Net sales and other operating income
  
$
9,685,969
  
$
8,048,226
  
$
36,151,394
  
$
30,708,033
  
Cost of products sold
    
9,182,712
    
7,646,306
    
34,003,070
    
28,980,895
  
   
 
 
 
 
Gross profit
    
503,257
    
401,920
    
2,148,324
    
1,727,138
  
Selling, general and administrative expenses
    
652,695
    
254,127
    
1,401,833
    
947,694
  
Other expense – net
    
8,695
    
14,897
    
28,480
    
148,471
  
   
 
 
 
 
Earnings (loss) before income taxes
    
(158,133
)
  
132,896
    
718,011
    
630,973
  
Income taxes
    
(55,072
)
  
37,876
    
223,301
    
179,828
  
   
   
 
 
 
Net earnings (loss)
  
$
(103,061
)
$
95,020
  
$
494,710
  
$
451,145
  
   
 
 
 
 
Basic and diluted earnings (loss) per common share
  
$
(.16
)
$
.15
  
$
.76
    $
.70
  
   
 
 
 
 
Average number of shares outstanding
    
650,279
    
644,611
    
647,698
    
646,086
  
   
 
 
 
 
Other expense – net consists of:
    
 
    
 
    
 
    
 
  
Interest expense
  
$
82,142
  
$
86,853
  
$
341,991
  
$
359,971
  
Investment income
    
(26,828
)
  
(29,469
)
  
(116,352
)
  
(121,887
)
Net (gain) loss on marketable securities transactions
    
(12,271
)
  
(2,341
)
  
(23,968
)
  
363
  
Equity in (earnings) losses of unconsolidated
  affiliates
    
(39,263
)
  
(36,336
)
  
(180,716
)
  
(65,991
)
Other – net
    
4,915
    
(3,810
)
  
7,525
    
(23,985
)
   
 
 
 
 
   
$
8,695
  
$
14,897
  
$
28,480
  
$
148,471
  
   
 
 
 
 
Operating profit (loss) by segment is as follows:
    
 
    
 
    
 
    
 
  
Oilseeds Processing (1)
  
$
(15,491
)
$
82,612
  
$
290,732
  
$
337,089
  
Corn Processing
   
 
    
 
    
 
    
 
  
Sweeteners and Starches (1) (3)
    
62,155
    
71,048
    
318,369
    
228,227
  
Bioproducts (1)
    
87,897
    
18,442
    
342,578
    
130,473
  
   
 
 
 
 
Total Corn Processing
    
150,052
    
89,490
    
660,947
    
358,700
  
Agricultural Services (1) (3)
    
44,852
    
13,526
    
249,863
    
92,124
  
Other
   
 
    
 
    
 
    
 
  
Food and Feed Ingredients (1) (4)
    
58,260
    
27,953
    
260,858
    
212,507
  
Financial
    
29,944
    
16,646
    
98,611
    
9,492
  
   
 
 
 
 
Total Other
    
88,204
    
44,599
    
359,469
    
221,999
  
   
 
 
 
 
Total segment operating profit     
267,617
     230,227      1,561,011      1,009,912   
Corporate (1) (2) (3) (5)
    
(425,750
)
  
(97,331
)
  
(843,000
)
  
(378,939
)
   
 
 
 
 
Earnings (loss) before income taxes
  
$
(158,133
)
$
132,896
  
$
718,011
  
$
630,973
  
   
 
 
 
 

(1) 

 
 
Fiscal 2004 fourth quarter results include a charge for abandonment and write down of long-lived assets of: Oilseeds Processing ($1 million), Other - Food and Feed Ingredients ($9 million). Fiscal 2004 twelve month results include a charge for abandonment and write down of long-lived assets of: Oilseeds Processing ($4 million), Corn Processing – Sweeteners and Starches ($1 million), Corn Processing – Bioproducts ($14 million), Agricultural Services ($5 million), Other – Food and Feed Ingredients ($12 million), and Corporate ($14 million). Fiscal 2003 twelve month results include a charge for abandonment and write down of long-lived assets of: Oilseeds Processing ($7 million) and Other – Food and Feed Ingredients ($ 6 million).
(2) 

Fiscal 2004 fourth quarter and twelve months results include a $400 million charge for the settlement of fructose litigation.

 (3) 

Fiscal 2004 twelve months results include a gain from an insurance-related lawsuit of: Corn Processing ($15 million), Agricultural Services ($2 million), and Corporate ($4 million).

(4)

Fiscal 2003 twelve months results include partial settlements of the Company’s claims related to vitamin antitrust litigation of $28 million.

 (5) 

Fiscal 2003 twelve months results include a charge related to the Company’s global settlement with the EPA of $11 million.


 
     
 
 
July 30, 2004
  
 
 
 
  
 
 
ARCHER DANIELS MIDLAND COMPANY
  
 
 
SUMMARY OF FINANCIAL CONDITION
  
 
 
(unaudited)
  
 
 
 
    
June 30, 2004

 

 
June 30, 2003
  
   
 
 
 
  
(in thousands)
NET INVESTMENT IN
    
 
    
 
  
Working capital
  
$
5,520,066
  
$
4,584,756
  
Property, plant and equipment
    
5,254,738
    
5,468,716
 
Investments in and advances to affiliates
    
1,832,619
    
1,763,453
 
Long-term marketable securities
    
1,161,388
    
818,016
 
Other non current assets
    
781,080
    
710,837
 
   
$
14,549,891
  
$
13,345,778
  
   
 
 
FINANCED BY
    
 
    
 
  
Short-term debt
  
$
1,770,512
  
$
1,279,483
  
Long-term debt, including current maturites
    
3,900,670
    
3,903,175
 
Deferred liabilities
    
1,180,493
    
1,093,923
 
Shareholders' equity
    
7,698,216
    
7,069,197
 
   
$
14,549,891
  
$
13,345,778
  
   
 
 
SUMMARY OF CASH FLOWS
    
 
    
 
  
(unaudited)
  
Twelve Months Ended
 

 
June 30

 

 
 

 

 
2004

 

 
2003

 

 

 

 

 

 

 
(in thousands)
Operating activities
    
 
    
 
  
Net earnings
  
$
494,710
  
$
451,145
  
Depreciation
    
685,613
    
643,615
  
Asset abandonments
    
50,576
    
13,221
  
Other
    
(212,260
)
  
247,585
  
Changes in operating assets and liabilities
    
(985,300
)
  
(284,134
)
Total Operating Activities
    
33,339
    
1,071,432
  
Investing Activities
    
 
    
 
  
Purchases of property, plant and equipment
    
(509,237
)
  
(435,952
)
Net assets of businesses acquired
    
(93,022
)
  
(526,970
)
Other investing activities
    
27,824
    
(98,432
)
   
   
 
Total Investing Activities
    
(574,435
)
  
(1,061,354
)
Financing Activities
    
 
    
 
  
Long-term borrowings
    
4,366
    
517,222
  
Long-term debt payments
    
(32,381
)
  
(315,319
)
Net borrowings under lines of credit
    
483,764
    
281,669
  
Purchases of treasury stock
    
(4,113
)
  
(101,212
)
Cash dividends
    
(174,109
)
  
(155,565
)
Proceeds from exercises of stock options
    
38,817
    
1,971
  
   
 
 
Total Financing Activities
    
316,344
    
228,766
  
   
 
 
Increase (decrease) in cash and cash equivalents
    
(224,752
)
  
238,844
  
Cash and cash equivalents beginning of period
    
764,959
    
526,115
  
Cash and cash equivalents end of period
  
$
540,207
  
$
764,959
  
   
 
 

 
     
 
 
July 30, 2004
  
 
 
 
 
ARCHER DANIELS MIDLAND COMPANY
 
OPERATING PROFIT (LOSS) BY SEGMENT (AS RESTATED)
 
(unaudited)
  
 
 
 
  
 
 
 
  
Quarter Ended
  
Fiscal Year

 

 

 

 

 

 

 

 

 
09/30/03

 

 
12/31/03

 

 
03/31/04

 

 
06/30/04

 

 
2004

 

   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Oilseeds Processing
  
$
67,830
  
$
120,883
  
$
117,510
  
$
(15,491
)
$
290,732
  
 
    
 
    
 
    
 
    
 
    
 
  
Corn Processing
    
 
    
 
    
 
    
 
    
 
  
Sweeteners and Starches
    
88,860
    
75,812
    
91,542
    
62,155
    
318,369
  
Bioproducts
    
18,437
    
96,295
    
139,949
    
87,897
    
342,578
  
   
 
 
 
 
 
Total Corn Processing
    
107,297
    
172,107
    
231,491
    
150,052
    
660,947
  
 
    
 
    
 
    
 
    
 
    
 
  
Agricultural Services
    
42,849
    
106,335
    
55,827
    
44,852
    
249,863
  
 
    
 
    
 
    
 
    
 
    
 
  
Other
    
 
    
 
    
 
    
 
    
 
  
Food and Feed Ingredients
    
59,998
    
72,569
    
70,031
    
58,260
    
260,858
  
Financial
    
18,601
    
23,217
    
26,849
    
29,944
    
98,611
  
   
 
 
 
 
 
Total Other
    
78,599
    
95,786
    
96,880
    
88,204
    
359,469
  
   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Total segment operating profit
    
296,575
    
495,111
    
501,708
    
267,617
    
1,561,011
  
 
    
 
    
 
    
 
    
 
    
 
  
Corporate
    
(78,921
)
  
(175,082
)
  
(163,247
)
  
(425,750
)
  
(843,000
)
   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Earnings (loss) before income tax
  
$
217,654
  
$
320,029
  
$
338,461
  
$
(158,133
)
$
718,011
  
   
 
 
 
 
 
 
 
     
 
 
 
  
Quarter Ended

 
Fiscal Year

 

 

 

 

 

 

 

 

 
09/30/02

 

 
12/31/02

 

 
03/31/03

 

 
06/30/03

 

 
2003
  
   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Oilseeds Processing
  
$
76,374
  
$
102,724
  
$
75,379
  
$
82,612
  
$
337,089
  
 
    
 
    
 
    
 
    
 
    
 
  
Corn Processing
    
 
    
 
    
 
    
 
    
 
  
Sweeteners and Starches
    
61,643
    
41,919
    
53,617
    
71,048
    
228,227
  
Bioproducts
    
28,116
    
35,344
    
48,571
    
18,442
    
130,473
  
   
 
 
 
 
 
Total Corn Processing
    
89,759
    
77,263
    
102,188
    
89,490
    
358,700
  
 
    
 
    
 
    
 
    
 
    
 
  
Agricultural Services
    
40,113
    
34,959
    
3,526
    
13,526
    
92,124
  
 
    
 
    
 
    
 
    
 
    
 
  
Other
    
 
    
 
    
 
    
 
    
 
  
Food and Feed Ingredients
    
43,415
    
94,399
    
46,740
    
27,953
    
212,507
  
Financial
    
(9,715
)
  
(11,976
)
  
14,537
    
16,646
    
9,492
  
   
 
 
 
 
 
Total Other
    
33,700
    
82,423
    
61,277
    
44,599
    
221,999
  
   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Total segment operating profit
    
239,946
    
297,369
    
242,370
    
230,227
    
1,009,912
  
 
    
 
    
 
    
 
    
 
    
 
  
Corporate
    
(84,442
)
  
(108,527
)
  
(88,639
)
  
(97,331
)
  
(378,939
)
   
 
 
 
 
 
 
    
 
    
 
    
 
    
 
    
 
  
Earnings before income tax
  
$
155,504
  
$
188,842
  
$
153,731
  
$
132,896
  
$
630,973