EX-99.1 2 pressrelease.htm PRESS RELEASE Press Release
 
 
 
Archer Daniels Midland Company
4666 Faries Parkway
Decatur, Il 62526
 
                                      News Release 
 
FOR IMMEDIATE RELEASE
January 28, 2005
 
ARCHER DANIELS MIDLAND REPORTS SECOND QUARTER RESULTS
 
Decatur, IL — January 28, 2005 — Archer Daniels Midland (NYSE: ADM)
 
► Net earnings for the quarter ended December 31, 2004 increased 42% to $ 314 million - $ .48 per share from $ 221 million - $ .34 per share last year.
  w   Net earnings for the quarter ended December 31, 2004 includes a gain of $ 45 million, $ .07 per share, representing the Company’s equity share of the gain reported by its unconsolidated affiliate, Compagnie Industrielle et Financiere des Produits Amylces SA (“CIP”), upon the sale of its interest in Tate & Lyle.
► Second quarter segment operating profit decreased 2% to $ 485 million from $ 495 million last year.
  w   Oilseeds Processing earnings decreased as improved processing margins in Europe and Asia were offset by a reduction in North and South American operating results.
  w   Corn Processing earnings decreased due principally to higher net corn and energy costs compared to last year. While still higher than a year ago, net corn costs in fiscal 2005 continue to decline from the peak reached in the fourth quarter of fiscal 2004.
  w   Agricultural Services earnings declined as improved North American origination and transportation results were offset by a decline from the prior year’s strong global grain merchandising results.
  w   Other segment operating earnings increased primarily from improved Financial earnings.
 
► Financial Highlights
(Amounts in thousands, except per share data and percentages)

   

 THREE MONTHS ENDED

  

 THREE MONTHS ENDED

  
     

12/31/04

    

12/31/03

    

% CHANGE

    

12/31/04

    

12/31/03

    

% CHANGE

  
Net sales and other operating income
  
$
9,063,526
  
$
9,188,504
    
-1%
 
$
18,035,937
  
$
17,156,406
    
  5%
 
Segment operating profit
  
$
484,685
  
$
495,111
    
-2%
 
$
823,357
  
$
791,686
    
  4%
 
Net earnings
  
$
313,509
  
$
220,821
    
42%
 
$
579,806
  
$
371,002
    
56%
 
Earnings per share
  
$
0.48
  
$
0.34
    
41%
 
$
0.89
  
$
0.57
    
56%
 
Average number of shares outstanding
    
654,985
    
646,845
    
  1%
 
  
653,652
    
645,992
    
  1%
 
 
 
“ADM closed the first half of fiscal year 2005 with record quarterly earnings.  The results for the quarter were generated with balanced contributions from our diverse operating segments.  Management continues to adapt its strategies to meet the demands of a dynamic agribusiness environment.”
 
G. Allen Andreas, Chairman and Chief Executive
 
  
     
 

Archer Daniels Midland
Page 2
 
Discussion of Operations
Net earnings for the quarter ended December 31, 2004 were $ 314 million, or $ .48 per share, compared to $ 221 million, or $ .34 per share, last year. Net earnings for the six months ended December 31, 2004 were $ 580 million, or $ .89 per share, compared to $ 371 million, or $ .57 per share, last year. This year’s results for the quarter and six months ended December 31, 2004 include an after-tax gain of $ 45 million, or $ .07 per share, representing the Company’s equity share of the gain reported by its unconsolidated affiliate, CIP, upon the sale of its interest in Tate & Lyle. Last year’s results for the quarter and six months included an asset abandonment charge of $ 29 million ($ 18 million after tax, equal to $ .03 per share).

Segment Operating profit declined $ 10 million to $ 485 million for the quarter but increased $ 32 million to $ 823 million for the six months.

Oilseed Processing operating profit for the quarter of $ 119 million declined slightly from $ 121 million last year as improved operating results in Europe and Asia were offset by decreased operating results in our North and South American operations. For the six months, Oilseed Processing operating profit increased to $ 210 million from $ 189 million last year as improved European operating results were partially offset by a decline in North American, South American and Asian operating earnings.

Corn Processing operating profit declined $ 40 million to $ 132 million for the quarter and declined $ 44 million to $ 235 million for the six months due principally to higher net corn and energy costs as compared to last year. However, as net corn costs in fiscal 2005 continue to decline, second quarter Corn Processing operating profits increased 28% over first quarter levels. Sweetener and Starches earnings declined $ 31 million to $ 45 million for the quarter and declined $65 million to $ 100 million for the six months due principally to higher net corn and energy costs. For the quarter, Bioproducts operating profits declined $ 9 million to $ 87 million as the effect of higher net corn and energy costs, lower ethanol sales volumes and lower lysine selling prices more than offset the positive impact of higher ethanol selling prices. For the six months, Bioproducts operating profits increased $ 21 million to $ 135 million due principally to higher ethanol selling prices.

Agricultural Services operating profit decreased $ 18 million to $ 88 million for the quarter and decreased $ 10 million to $ 139 million for the six months as improvements in North American origination and transportation operating results were more than offset by a decline from the prior year’s strong global grain merchandising results.

Other segment operating profit increased to $ 146 million from $ 96 million for the quarter and increased to $ 239 million from $ 174 million for the six months due principally to improved Financial operating results. Food and Feed Ingredient earnings of $ 71 million for the quarter were comparable to last year. Earnings of Food and Feed Ingredients increased to $ 160 million for the six months due principally to improved operating results of our Cocoa operations and improved earnings of GRUMA. Financial operations increased to $ 75 million for the quarter and $ 79 million for the six months primarily due to improved results of our private equity fund investments and captive insurance operations.

Corporate improved by $ 145 million for the quarter and $ 271 million for the six months primarily due to the Company’s $45 million equity share of the gain reported by CIP upon the sale of its Tate & Lyle interest in this year’s second quarter and the positive impact of $ 72 million for the quarter and $ 196 million for the six months from the effect of declining commodity prices on LIFO inventory valuations. In addition, last year’s quarter and six months included an abandonment charge of $ 14 million.
 
  
     
 

Archer Daniels Midland
Page 3
 
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast at 10:00 a.m. Central Standard Time on Friday, January 28, 2005 to discuss financial results and provide a Company update. 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 for10 days beginning on January 28, 2005 approximately 2 hours after the call and ending on February 6, 2005 at 10:59 p.m. CST. To access this replay, dial 800-642-1687 or 706-645-9291 and enter access code: 3063288. To listen to a live broadcast via the Internet go to: http://www.admworld.com/webcast/. A replay of the Web cast will be available for 10 days on the ADM World 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 250 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)



  
     
 
January 28, 2005
 
 ARCHER DANIELS MIDLAND COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)

   
Three months ended
 Six months ended
December 31,
 December 31,
2004
2003
2004
2003
(in thousands, except per share amounts)
                           
Net sales and other operating income
  
$
9,063,526
  
$
9,188,504
  
$
18,035,937
  
$
17,156,406
  
Cost of products sold
    
8,394,818
    
8,584,210
   
16,703,797
    
16,098,358
 
Gross profit
    
668,708
    
604,294
   
1,332,140
    
1,058,048
 
Selling, general and administrative expenses
    
269,741
    
265,641
   
521,250
    
497,437
 
Other (income) expense - net
    
(55,395
)
  
18,624
   
(29,409
)
  
22,928
 
Earnings before income taxes
    
454,362
    
320,029
   
840,299
    
537,683
 
Income taxes
    
140,853
    
99,208
   
260,493
    
166,681
 
Net earnings
  
$
313,509
  
$
220,821
  
$
579,806
  
$
371,002
  
Basic and diluted earnings per common share
  
$
0.48
  
$
0.34
  
$
0.89
  
$
0.57
  
Average number of shares outstanding
    
654,985
    
646,845
   
653,652
    
645,992
 
                           
Other (income) expense - net consists of:
                          
Interest expense
  
$
82,561
  
$
89,949
  
$
161,610
  
$
172,993
  
Investment income
    
(24,621
)
  
(25,448
)
  
(55,456
)
  
(53,749
)
Net (gain) loss on marketable securities transactions
    
566
    
72
    
559
    
(1,020
)
Equity in (earnings) losses of unconsolidated affiliates
    
(115,905
)
  
(53,355
)
  
(136,798
)
  
(96,649
)
Other - net
    
2,004
    
7,406
    
676
    
1,353
  
   
$
(55,395
)
$
18,624
  
$
(29,409
)
$
22,928
  
                           
Operating profit by segment is as follows:
                          
Oilseeds Processing
  
$
118,782
  
$
120,883
  
$
210,055
  
$
188,713
  
Corn Processing
                          
Sweeteners and Starches
    
44,758
    
75,812
    
99,638
    
164,672
  
Bioproducts
    
87,250
    
96,295
    
135,443
    
114,732
  
Total Corn Processing
    
132,008
    
172,107
    
235,081
    
279,404
  
Agricultural Services ²
    
87,863
    
106,335
    
139,135
    
149,184
  
Other  
                      
Food and Feed Ingredients ²
    
70,808
    
72,569
    
160,047
    
132,567
  
Financial
    
75,224
    
23,217
    
79,039
    
41,818
  
Total Other ²
    
146,032
    
95,786
    
239,086
    
174,385
  
Total segment operating profit
    
484,685
    
495,111
    
823,357
    
791,686
  
Corporate  ¹ ² ³
    
(30,323
)
  
(175,082
)
  
16,942
    
(254,003
)
Earnings before income taxes
  
$
454,362
  
$
320,029
  
$
840,299
  
$
537,683
  
 
  ¹
 Fiscal 2005 second quarter and six months results include a $ 45 million gain representing the Company’s equity share of the gain reported by its unconsolidated affiliate, CIP, upon the sale of its interest in Tate & Lyle.
  ² Fiscal 2004 second quarter and six months results include a charge for the abandonment and write down of long-lived assets of: Agricultural Services ($ 5 million), Other ($ 10 million), and Corporate ($ 14 million).
  ³
Includes LIFO income of $ 19 million for the quarter and $ 135 million for the six months ended December 31, 2004. Includes LIFO charge of $ 53 million for the quarter and $ 61 million for the six months ended December 31, 2003. 
 
  
     
 
January 28, 2005
 
ARCHER DANIELS MIDLAND COMPANY
SUMMARY OF FINANCIAL CONDITION
(unaudited) 
 
     
December 31, 2004
    
June 30, 2004
  
   
(in thousands)
NET INVESTMENT IN
              
Working capital
  
$
5,102,225
  
$
5,520,066
  
Property, plant and equipment
    
5,272,295
    
5,254,738
  
Investments in and advances to affiliates
    
1,981,633
    
1,832,619
  
Long-term marketable securities
    
1,237,549
    
1,161,388
  
Other non-current assets
    
799,753
    
781,080
  
 
$
14,393,455
  
$
14,549,891
  
FINANCED BY
              
Short-term debt
  
$
732,678
  
$
1,770,512
  
Long-term debt, including current maturites
    
3,774,597
    
3,900,670
  
Deferred liabilities
    
1,355,484
    
1,180,493
  
Shareholders' equity
    
8,530,696
    
7,698,216
  
   
$
14,393,455
  
$
14,549,891
  
               
SUMMARY OF CASH FLOWS
              
 (unaudited)  
Six Months Ended
   
December 31,
     
2004
    
2003
   
(in thousands)
Operating activities
              
Net earnings
  
$
579,806
  
$
371,002
  
Depreciation
   
337,086
    
340,878
  
Asset abandonments
    
1,896
    
29,268
  
Other - net
    
82,737
    
(24,806
)
Changes in operating assets and liabilities
    
341,357
    
(1,192,448
)
Total Operating Activities
    
1,342,882
    
(476,106
)
Investing Activities
              
Purchases of property, plant and equipment
    
(284,286
)
  
(250,697
)
Net assets of businesses acquired
    
(6,797
)
  
(53,616
)
Other investing activities
    
41,440
    
(169,776
)
Total Investing Activities
    
(249,643
)
  
(474,089
)
Financing Activities
              
Long-term borrowings
    
8,547
    
2,646
  
Long-term debt payments
    
(155,988
)
  
(20,504
)
Net borrowings (payments) under lines of credit
    
(1,070,423
)
  
811,612
  
Purchases of treasury stock
    
(45
)
  
(3,980
)
Cash dividends
    
(98,175
)
  
(77,799
)
Proceeds from exercises of stock options
    
16,957
    
10,386
  
Total Financing Activities
    
(1,299,127
)
  
722,361
  
Decrease in cash and cash equivalents
    
(205,888
)
  
(227,834
)
Cash and cash equivalents beginning of period
    
540,207
    
764,959
  
Cash and cash equivalents end of period
  
$
334,319
  
$
537,125