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
April 29, 2005
 
ARCHER DANIELS MIDLAND REPORTS THIRD QUARTER RESULTS
 
Decatur, IL — April 29, 2005 — Archer Daniels Midland (NYSE: ADM)
 
►
Net earnings for the quarter ended March 31, 2005 increased 19% to $ 269 million - $ .41 per share from $ 227 million - $ .35 per share last year.
 
·  
Net earnings for the quarter ended March 31, 2005 includes a gain of $ 74 million, $ .11 per share, representing the Company’s gain upon the sale of its interest in Tate & Lyle.
 
►
Third quarter segment operating profit decreased to $ 377 million from $ 502 million last year.
 
·  
Oilseeds Processing earnings decreased as improved processing margins in Europe were offset by a reduction in North American and Asian operating results.
 
·  
Corn Processing earnings decreased due principally to higher energy costs and reduced lysine selling prices. Net corn costs in fiscal 2005 continue to decline from the peak reached in the fourth quarter of fiscal 2004.
 
·  
Agricultural Services earnings were comparable to last year as improved North American origination and transportation results were offset by a decline from the prior year’s strong global grain merchandising results.
 
·  
Other segment operating earnings decreased primarily from reduced operating results of Food and Feed Ingredients partially offset by improved Financial earnings.
 
► Financial Highlights
(Amounts in thousands, except per share data and percentages)
   
THREE MONTHS ENDED
  
NINE MONTHS ENDED 
  
     
3/31/05
   
3/31/04
 
 % CHANGE
   
3/31/05
   
3/31/04
 
 % CHANGE
 
Net sales and other operating income
  
$
8,484,171
  
$
9,309,019
  
   -9%
 
$
26,520,108
  
$
26,465,425
  
 -
  
Segment operating profit
  
$
376,587
  
$
501,708
  
 -25%
 
$
1,199,944
  
$
1,293,394
  
  -7%
 
Net earnings
  
$
269,095
  
$
226,769
  
  19%
 
$
848,901
  
$
597,771
  
 42%
 
Earnings per share
  
$
.41
  
$
.35
  
  17%
 
$
1.29
  
$
.92
  
 40%
 
Average number of shares outstanding
    
658,333
    
650,962
  
    1%
 
  
656,177
    
649,241
  
   1%
 
 
 
“This quarter’s earnings reflect the competitive markets in agribusiness and the impact of capacity added in recent years in several sectors. Cash flows remain strong, liquidity improved and returns from our financial assets contributed to the solid results.”
 
G. Allen Andreas, Chairman and Chief Executive
Archer Daniels Midland
Page 2
 
Discussion of Operations
 
Net earnings for the quarter ended March 31, 2005 were $ 269 million, or $ .41 per share, compared to $ 227 million, or $ .35 per share, last year. Net earnings for the nine months ended March 31, 2005 were $ 849 million, or $ 1.29 per share, compared to $ 598 million, or $ .92 per share, last year. This year’s results for the quarter and nine months include a gain of $ 114 million ($ 74 million after tax, equal to $ .11 per share) from the sale of the Company’s direct share interest in Tate & Lyle. This year’s results for the nine months also include an after tax gain of $ 45 million ($.07 per share) representing the Company’s equity share of the gain reported in the second quarter by its unconsolidated affiliate, CIP, upon the sale of its interest in Tate & Lyle. Last year’s results for the quarter and nine months included asset abandonment charges of $ 12 million ($ 8 million after tax, equal to $ .01 per share) and $ 41 million ($ 26 million after tax, equal to $ .04 per share) respectively. Last year’s results for the quarter and nine months also included 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 an $ 11 million ($ 7 million after tax, equal to $ .01 per share) gain on securities transactions. 
 
Segment Operating profit declined $125 million to $ 377 million for the quarter and declined $ 93 million to $1.2 billion for the nine months.
 
Oilseeds Processing operating profit declined $ 57 million to $ 61 million for the quarter and declined $ 35 million to $ 271 million for the nine months as improved operating results in Europe were offset by decreased operating results in North American and Asian operations. Operating results in South America improved for the quarter but lagged prior year results for the nine months.
 
Corn Processing operating profit declined $ 54 million to $ 178 million for the quarter and declined $ 98 million to $ 413 million for the nine months due principally to higher energy costs and reduced lysine selling prices as compared to last year. In addition, higher average net corn costs negatively impacted the nine month comparison. However, as net corn costs in fiscal 2005 continue to decline, third quarter Corn Processing operating profits increased 35% over second quarter levels. Sweetener and Starches earnings declined $ 12 million to $ 80 million for the quarter due principally to higher energy costs and declined $ 77 million to $ 179 million for the nine months due principally to higher average net corn and energy costs. For the quarter, Bioproducts operating profits declined $ 42 million to $ 98 million as the effect of higher energy costs, lower ethanol sales volumes and lower lysine selling prices more than offset the positive impact of higher ethanol selling prices and lower net corn costs. For the nine months, Bioproducts operating profits decreased $ 21 million to $ 233 million due principally to higher average net corn and energy costs, lower ethanol sales volumes and lower lysine selling prices partially offset by the higher ethanol selling prices.
 
Agricultural Services operating profit of $ 55 million for the quarter and $194 million for the nine months were down slightly from last year levels as improvements in North American origination and transportation operating results were offset by a decline from the prior year’s strong global grain merchandising results.
 
Other segment operating profit decreased to $ 83 million from $ 97 million for the quarter and increased to $ 322 million from $ 271 million for the nine months. Food and Feed Ingredient earnings of $ 44 million for the quarter declined from prior year levels due principally to reduced results from Cocoa and Natural Health and Nutrition operations. Earnings of Food and Feed Ingredients of $ 204 million for the nine months were comparable to last year. Financial operations increased to $ 40 million for the quarter and $ 119 million for the nine months primarily due to improved results of private equity fund investments. In addition, results of the captive insurance operations improved in the nine month period.

Archer Daniels Midland
Page 3
 
Corporate results for the quarter improved $ 195 million to a profit of $ 32 million from a loss of $ 163 million last year. For the nine months, Corporate results improved $ 466 million to a profit of $ 49 million from a loss of $ 417 million last year. These improvements were related to the current year gains of $ 114 million for the quarter and $ 159 million for the nine months related to the sale of the Company’s Tate & Lyle interests. In addition, changing commodity price levels had no impact on LIFO inventory valuation for the current year quarter but rising prices resulted in a $ 99 million LIFO charge last year. For the nine months, declining commodity price levels this year resulted in LIFO income of $ 135 million compared to a LIFO charge of $ 160 million for the nine months last year due to rising price levels.
 
Conference Call Information
 
Archer Daniels Midland will host a conference call and audio Web cast at 8:00 a.m. Central Daylight Time on Friday, April 29, 2005 to discuss financial results and provide a Company update. To listen by phone, dial 800-798-2864 or 617-614-6206; the access code is 21567211. Digital replay of the call will be available beginning on April 29, 2005 from 1:00 p.m. CDT and ending on May 6, 2005. To access this replay, dial 888-286-8010 or 617-801-6888 and enter access code: 33538402. 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 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)
April 29, 2005

ARCHER DANIELS MIDLAND COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
   
Three months ended
  
Nine months ended
  
   
March 31,
  
March 31,
  
     
2005 
        
2004 
    
2005 
    
2004 
  
     
(in thousands, except per share amounts)
  
                           
Net sales and other operating income
  
$
8,484,171
  
$
9,309,019
  
$
26,520,108
  
$
26,465,425
  
Cost of products sold
    
7,909,315
    
8,722,000
    
24,613,112
    
24,820,358
  
Gross profit
    
574,856
    
587,019
    
1,906,996
    
1,645,067
  
Selling, general and administrative expenses
    
280,395
    
251,701
    
801,645
    
749,138
  
Other (income) expense - net
    
(114,575
)
  
(3,143
)
  
(143,984
)
  
19,785
  
Earnings before income taxes
    
409,036
    
338,461
    
1,249,335
    
876,144
  
Income taxes
    
139,941
    
111,692
    
400,434
    
278,373
  
Net earnings
  
$
269,095
  
$
226,769
  
$
848,901
  
$
597,771
  
Diluted earnings per common share
  
$
.41
  
$
.35
  
$
1.29
  
$
.92
  
Average number of shares outstanding
    
658,333
    
650,962
    
656,177
    
649,241
  
                           
Other (income) expense - net consists of:
                          
Interest expense
  
$
80,293
  
$
86,856
  
$
241,903
  
$
259,849
  
Investment income
    
(36,300
)
  
(35,775
)
  
(91,756
)
  
(89,524
)
Net (gain) loss on marketable securities
transactions
    
(113,820
)
  
(10,677
)
  
(113,261
)
  
(11,697
)
Equity in (earnings) losses of
unconsolidated affiliates
    
(36,611
)
  
(44,804
)
  
(173,409
)
  
(141,453
)
Other - net
    
(8,137
)
  
1,257
    
(7,461
)
  
2,610
  
   
$
(114,575
)
$
(3,143
)
$
(143,984
)
$
19,785
  
                           
Operating profit by segment is as follows:
                          
Oilseeds Processing
  
$
60,734
  
$
117,510
  
$
270,789
  
$
306,223
  
Corn Processing
                          
Sweeteners and Starches
    
79,817
    
91,542
    
179,455
    
256,214
  
Bioproducts
    
98,056
    
139,949
    
233,499
    
254,681
  
Total Corn Processing
    
177,873
    
231,491
    
412,954
    
510,895
  
Agricultural Services (2)
    
54,644
    
55,827
    
193,779
    
205,011
  
Other  
                          
Food and Feed Ingredients (2)
    
43,544
    
70,031
    
203,591
    
202,598
  
Financial
    
39,792
    
26,849
    
118,831
    
68,667
  
Total Other (2)
    
83,336
    
96,880
    
322,422
    
271,265
  
Total segment operating profit
    
376,587
    
501,708
    
1,199,944
    
1,293,394
  
Corporate  (1) (2) (3)
    
32,449
    
(163,247
)
  
49,391
    
(417,250
)
Earnings before income taxes
  
$
409,036
  
$
338,461
  
$
1,249,335
  
$
876,144
  
 
(1) 
Fiscal 2005 third quarter and nine months results include gains of $ 114 million and $ 159 million, respectively, related to sales of the Company’s interests in Tate & Lyle.
(2)
Fiscal 2004 third quarter results include a charge for the abandonment and write down of long-lived assets of: Oilseeds Processing ($ 3 million), Corn Processing ($ 1 million) and Other ($ 8 million). Fiscal 2004 nine month results include a charge for the abandonment and write down of long-lived assets of: Oilseeds Processing ($ 3 million), Corn Processing ($ 1 million), Agricultural Services ($ 5 million), Other ($ 18 million) and Corporate ($ 14 million).
(3)
Includes LIFO income of $ 135 million for the nine months ended March 31, 2005. Includes LIFO charge of $ 99 million for the quarter and $ 160 million for the nine months ended March 31, 2004.
April 29, 2005

ARCHER DANIELS MIDLAND COMPANY
SUMMARY OF FINANCIAL CONDITION
(unaudited)
   
March 31, 2005
  
 June 30, 2004
  
   
(in thousands)
  
NET INVESTMENT IN
              
Working capital
  
$
5,036,687
  
$
5,520,066
  
Property, plant and equipment
    
5,248,860
    
5,254,738
  
Investments in and advances to affiliates
    
1,893,932
    
1,832,619
  
Long-term marketable securities
    
989,510
    
1,161,388
  
Other non-current assets
    
804,899
    
781,080
  
   
$
13,973,888
  
$
14,549,891
  
               
FINANCED BY
              
Short-term debt
  
$
270,374
  
$
1,770,512
  
Long-term debt, including current maturites
    
3,758,072
    
3,900,670
  
Deferred liabilities
    
1,372,336
    
1,180,493
  
Shareholders' equity
    
8,573,106
    
7,698,216
  
   
$
13,973,888
  
$
14,549,891
  
               
SUMMARY OF CASH FLOWS
              
(unaudited)
              
 
Nine Months Ended 
 
  
March 31, 
     
2005
    
2004
  
 
  
(in thousands) 
Operating activities
              
Net earnings
  
$
848,901
  
$
597,771
  
Depreciation
   
507,599
    
513,293
  
Asset abandonments
    
1,896
    
40,184
  
Other - net
    
31,742
    
31,087
  
Changes in operating assets and liabilities
    
653,614
    
(2,080,976
)
Total Operating Activities
    
2,043,752
    
(898,641
)
Investing Activities
              
Purchases of property, plant and equipment
    
(451,223
)
  
(365,752
)
Net assets of businesses acquired
    
(4,670
)
  
(53,616
)
Other investing activities
    
351,223
    
(23,705
)
Total Investing Activities
    
(104,670
)
  
(443,073
)
Financing Activities
              
Long-term borrowings
    
8,547
    
2,646
  
Long-term debt payments
    
(174,018
)
  
(26,731
)
Net borrowings (payments) under lines of credit
    
(1,520,661
)
  
1,510,532
  
Purchases of treasury stock
    
(3,514
)
  
(4,083
)
Cash dividends
    
(153,967
)
  
(126,615
)
Proceeds from exercises of stock options
    
26,207
    
26,021
  
Total Financing Activities
    
(1,817,406
)
  
1,381,770
  
Increase in cash and cash equivalents
    
121,676
    
40,056
  
Cash and cash equivalents beginning of period
    
540,207
    
764,959
  
Cash and cash equivalents end of period
  
$
661,883
  
$
805,015