EX-99.1 2 adm8kfy06q1ex99.htm ADM8KFY06Q1EX99 adm8kfy06q1ex99

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

FOR IMMEDIATE RELEASE   
 October 28, 2005
 
ARCHER DANIELS MIDLAND REPORTS FIRST QUARTER RESULTS
 
Decatur, IL — October 28, 2005 — Archer Daniels Midland (NYSE: ADM)
 
►
Net earnings for the quarter ended September 30, 2005 decreased to $ 186 million - $ .29 per share compared to $ 266 million - $ .41 per share last year.
►
First quarter segment operating profit increased 3% to $ 351 million from $ 339 million last year.
·  
Oilseeds Processing operating profit increased on improved results in Europe, South America and Asia.
·  
Corn Processing operating profit increased principally due to lower net corn costs.
·  
Agricultural Services operating profit declined due to the negative impact of hurricanes on operations and a decline in global merchandising results.
·  
Other segment operating profit increased from improved Financial results partially offset by a decline in Food and Feed Ingredient results.
 
►Financial Highlights
(Amounts in thousands, except per share data and percentages)
   
THREE MONTHS ENDED
      
   
9/30/05
 
 
9/30/04
 
% CHANGE
 
Net sales and other operating income
  $
8,626,949
    $
8,972,411
  
   -4%
 
Segment operating profit
  $
350,518
  $
338,672
  
    3%
 
Net earnings
 $
186,338
    $
266,297
 
-30%
  
Earnings per share
  $
0.29
    $
0.41
 
-29%
  
Average number of shares outstanding
  
653,805
    
653,125
  
-
  
 
 
“The hurricanes in the Gulf Coast Region seriously disrupted ADM’s North American business this past quarter. Our management team immediately addressed both the personal needs of our employees and the business demands created by the crises. The dedication and commitment demonstrated by our employees during this difficult time was exemplary. Looking forward, with this year’s near record U.S. harvest the Company is positioned to deliver solid results as we enter the fall season.”
 
G. Allen Andreas, Chairman and Chief Executive
Archer Daniels Midland
Page 2
 
Discussion of Operations
 
Net earnings for the quarter ended September 30, 2005 were $ 186 million, equal to $ .29 per share, compared to $ 266 million, equal to $ .41 per share last year. Earnings for the quarter ended September 30, 2005 include an after-tax charge of $19 million, equal to $ .03 per share, as a result of the Company’s recent adoption of Financial Accounting Standard Number 123 (revised 2004) requiring the acceleration of share-based compensation expense into this quarter relating to grants issued to retirement-eligible employees pursuant to the Company’s Incentive Compensation Plan.

Segment operating profit for the quarter ended September 30, 2005 increased $ 12 million to $ 351 million as operating profit improvements were realized in all major segments except Agricultural Services.

Oilseeds Processing operating profit increased $ 8 million to $ 99 million for the quarter as improved South America, Europe and Asia operating results were partially offset by decreased operating results of our North America operations.

Corn Processing operating profit increased $ 33 million to $ 136 million for the quarter due principally to lower net corn costs partially offset by lower lysine selling prices and higher energy costs. Sweeteners and Starches results increased $ 37 million to $ 92 million for the quarter due principally to lower net corn costs partially offset by higher energy costs. Bioproducts results declined $ 4 million to $ 44 million for the quarter due primarily to lower lysine selling prices, lower citric acid operating results and higher energy costs partially offset by lower net corn costs and increased ethanol sales volumes.

Agricultural Services operating profits declined $ 31 million to $ 20 million for the quarter due to a decline in global grain merchandising results and the negative impact of hurricanes on North American origination and export operating results. These declines were partially offset by improved operating results of transportation operations.

Other segment operating earnings increased to $ 95 million from $ 93 million last year due to improved operating results of Financial operations partially offset by a decline in operating results of Food and Feed Ingredient operations. Financial operating results increased $ 22 million to $ 26 million for the quarter due principally to improved results of insurance operations. Food and Feed Ingredient results declined to $ 69 million from $ 89 million last year as operating results of the natural health and nutrition, cocoa, and wheat product lines declined from last year’s levels.

Significant components of Corporate results are as follows (in millions)

   
Three months ended
 
  
September 30
 
 
 
2005
 
 
2004
  
               
LIFO inventory valuation adjustment
 
$
9
  
$
116
  
Other
    
(86
)
  
(69
)
    Total Corporate expense (income)
  
$
(77
)
$
47
  
 
Conference Call Information
 
Archer Daniels Midland will host a conference call and audio Web cast to discuss first quarter results at 8:00 a.m. Central Daylight Time on Friday, October 28, 2005. To listen by phone, dial 888-396-2369 or 617-847-8710; the access code is 26328093. Digital replay of the call will be available beginning on October 28, 2005 from 10:00 a.m. CDT and ending on November 7, 2005. To access this replay, dial 888-286-8010 or 617-801-6888 and enter access code: 44831728. To listen to the call 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 until November 7, 2005.
 
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 25,000 employees, more than 250 processing plants and net sales for the fiscal year ended June 30, 2005 of $35.9 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)
 
October 28, 2005
ARCHER DANIELS MIDLAND COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
   
Three months ended
     
September 30 
  
 
 
 
2005
 
 
2004
 
 
 
(in thousands, except per share amounts) 
               
Net sales and other operating income
  
$
8,626,949
  
$
8,972,411
  
Cost of products sold
    
8,044,238
    
8,308,979
  
Gross profit
    
582,711
    
663,432
  
Selling, general and administrative expenses
    
304,455
    
251,509
  
Other expense - net
    
4,524
    
25,986
  
Earnings before income taxes
    
273,732
    
385,937
  
Income taxes
    
87,394
    
119,640
  
Net earnings
 
$
186,338
  
$
266,297
  
               
Diluted earnings per common share
  
$
0.29
  
$
0.41
  
Average number of shares outstanding
    
653,805
    
653,125
  
               
Other expense - net consists of:
              
Interest expense
  
$
86,289
  
$
79,049
  
Investment income
    
(37,774
)
  
(30,835
)
Net gain on marketable securities transactions
    
(5,259
)
  
(7
)
Equity in earnings of unconsolidated affiliates
    
(35,680
)
  
(20,893
)
Other - net
    
(3,052
)
  
(1,328
)
   
$
4,524
  
$
25,986
  
               
Operating profit by segment is as follows:
              
Oilseeds Processing
 
$
99,115
  
$
91,273
  
Corn Processing
             
Sweeteners and Starches
   
92,481
    
54,880
  
Bioproducts
   
43,777
    
48,193
  
Total Corn Processing
    
136,258
    
103,073
  
Agricultural Services
    
20,009
    
51,272
  
Other
             
Food and Feed Ingredients
    
69,229
    
89,239
  
Financial
    
25,907
    
3,815
  
Total Other
    
95,136
    
93,054
  
Total segment operating profit
    
350,518
    
338,672
  
Corporate
   
(76,786
)
  
47,265
  
Earnings before income taxes
  
$
273,732
  
$
385,937
  
 
October 28, 2005
ARCHER DANIELS MIDLAND COMPANY
SUMMARY OF FINANCIAL CONDITION
(unaudited)
   
 
September 30, 2005
 
 
June 30, 2005
 
 
(in thousands)
 
 
 
 
 
 
  
NET INVESTMENT IN
              
Working capital
  
$
5,610,951
  
$
4,992,583
  
Property, plant, and equipment
    
5,213,529
    
5,184,380
  
Investments in and advances to affiliates
    
1,925,213
    
1,879,501
  
Long-term marketable securities
    
1,103,019
    
1,049,952
  
Other non current assets
    
791,962
    
773,571
  
   
$
14,644,674
  
$
13,879,987
  
               
FINANCED BY
              
Short-term debt
  
$
480,551
  
$
425,808
  
Long-term debt, including current maturites
    
4,240,679
    
3,753,078
  
Deferred liabilities
    
1,272,996
    
1,267,629
  
Shareholders' equity
    
8,650,448
    
8,433,472
  
   
$
14,644,674
  
$
13,879,987
  
               
SUMMARY OF CASH FLOWS
              
(unaudited)
              
   
Three Months Ended
 
 
September 30
 
 
 
2005
 
 
2004
 
 
 
(in thousands)
Operating activities
              
Net earnings
  
$
186,338
  
$
266,297
  
Depreciation
    
164,173
    
167,447
  
Other - net
    
(161,882
)
  
76,556
  
Changes in operating assets and liabilities
    
216,401
    
488,919
  
Total Operating Activities
    
405,030
    
999,219
  
Investing Activities
              
Purchases of property, plant and equipment
    
(157,422
)
  
(141,993
)
Net assets of businesses acquired
    
(57,124
)
  
(6,797
)
Other investing activities
    
(62,905
)
  
(6,205
)
Total Investing Activities
    
(277,451
)
  
(154,995
)
Financing Activities
              
Long-term borrowings
    
598,624
    
132
  
Long-term debt payments
    
(102,236
)
  
(15,835
)
Net (payments) borrowings under lines of credit
    
56,134
    
(817,804
)
Purchases of treasury stock
    
(18
)
  
(16
)
Cash dividends
    
(55,491
)
  
(49,029
)
Proceeds from exercises of stock options
    
7,825
    
5,345
  
Total Financing Activities
    
504,838
    
(877,207
)
Increase (decrease) in cash and cash equivalents
    
632,417
    
(32,983
)
Cash and cash equivalents beginning of period
    
522,420
    
540,207
  
Cash and cash equivalents end of period
  
$
1,154,837
  
$
507,224