EX-99.1 2 adm8kfy06q4pressrelease.htm ADM FY06 Q4 PRESS RELEASE ADM FY06 Q4 Press Release
 
 
 
 
Archer Daniels Midland Company
4666 Faries Parkway
Decatur, Il 62526

News Release 


 
FOR IMMEDIATE RELEASE
 
August 1, 2006
 
ARCHER DANIELS MIDLAND REPORTS RECORD ANNUAL RESULTS
 
Decatur, IL — August 1, 2006 — Archer Daniels Midland (NYSE: ADM)
 
►
Net earnings for the year ended June 30, 2006 increased 26 % to $ 1.312 billion - $ 2.00 per share from
$ 1.044 billion - $ 1.59 per share last year.
►
Segment operating profit for the year increased 33 % to $ 2.061 billion from $ 1.551 billion last year.
 
“ADM delivered its second consecutive year of record earnings” said CEO and President Patricia Woertz. “Credit goes to the people of ADM and the alignment of our strategy, global portfolio of assets and strong management team. We have good momentum going forward and are well positioned to capitalize on our opportunities for continued growth.”
 
►
Net earnings for the quarter more than doubled to $ 410 million - $ .62 per share from $ 195 million - $ .30 per share last year.
►
Segment operating profit for the quarter increased 82 % to $ 637 million from $ 351 million last year.
·  
Oilseeds Processing operating profit increased on improved market conditions in all geographic areas.
·  
Corn Processing operating profit increased due to improved ethanol and sweetener selling prices and volumes.
·  
Agricultural Services operating profit increased principally due to improved transportation results.
·  
Other segment operating profit declined primarily due to decreased results of Food & Feed Ingredients.
 
► Financial Highlights
(Amounts in thousands, except per share data and percentages)
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
     
6/30/06
    
6/30/05
    
% CHANGE
    
6/30/06
    
6/30/05
    
% CHANGE
  
Net sales and other operating income
  
$
9,547,336
  
$
9,423,702
    
    1%
 
$
36,596,111
  
$
35,943,810
    
  2%
 
Segment operating profit
  
$
637,286
  
$
350,996
    
  82%
 
$
2,061,191
  
$
1,550,940
    
33%
 
Net earnings
  
$
410,259
  
$
195,484
    
110%
 
$
1,312,070
  
$
1,044,385
    
26%
 
Earnings per share
  
$
.62
  
$
.30
    
107%
 
$
2.00
  
$
1.59
    
26%
 
Average number of shares outstanding
    
658,750
    
655,394
    
    1%
 
  
656,287
    
656,123
    
-
  

 
 
Archer Daniels Midland
Page 2
 
► Strategic Progress
Woertz also noted that in line with the Company’s strategy to expand in areas of food, fuel, and industrial products, ADM announced in the fourth quarter:
·  
Selection of Cedar Rapids, Iowa site for ethanol expansion.
·  
Selection of Hazleton, Pennsylvania for a new cocoa plant.
·  
Two agreements to market other producers’ ethanol.
·  
Acquisition of Groupe Lysac, Inc., including biodegradable absorbent polymer technology.
·  
Expansion of Hamburg, Germany oil refinery.
·  
Plans to build first biodiesel plant in Brazil.
 
► Discussion of Operations
Net earnings for the year ended June 30, 2006 were $ 1.312 billion, or $ 2.00 per share, compared to $1.044 billion, or
$ 1.59 per share, last year. Net earnings for the quarter ended June 30, 2006 were $ 410 million, or $ .62 per share, compared to $ 195 million, or $ .30 per share, last year.

Net earnings for the year ended June 30, 2006 include a $ 36 million tax credit related to the adjustment of state and federal income taxes, securities gains of $ 40 million ($ 25 million after tax), Brazilian transactional tax credits of $ 46 million ($30 million after tax), a $ 17 million ($ 11 million after tax) gain from the sale of long lived assets, a charge related to Accounting for Conditional Asset Retirement Obligations (FIN 47) of $ 15 million ($ 9 million after tax), asset impairment charges of $ 80 million ($ 50 million after tax) and a charge of $ 22 million related to costs associated with a citric acid plant shut down and an exit from the European animal feed business. Net earnings for the year ended June 30, 2005 include a gain of $ 114 million ($ 74 million after tax) from the sale of the Company’s direct interest in Tate & Lyle, an after tax gain of $ 45 million representing the Company’s equity share of the gain reported by its unconsolidated subsidiary, CIP, upon the sale of its interest in Tate & Lyle and asset impairment charges of $ 42 million ($ 26 million after tax).

Net earnings for the quarter ended June 30, 2006 include security gains of $ 12 million ($ 8 million after tax), a $ 17 million ($ 11 million after tax) gain from the sale of long lived assets, Brazilian transactional tax credits of $ 27 million ($18 million after tax), asset impairment charges of $ 44 million ($ 28 million after tax) and a FIN 47 charge of $ 15 million ($ 9 million after tax). Net earnings for the quarter ended June 30, 2005 include asset impairment charges of
$ 40 million ($ 25 million after tax).

Segment operating profit increased $ 286 million to $ 637 million for the quarter and increased $ 510 million to $ 2.1 billion for the year.

Oilseeds Processing operating profit increased $ 121 million to $ 195 million for the quarter and increased $ 254 million to $ 598 million for the year as improved market conditions resulted in increased operating results in all geographic areas.
 
 
Archer Daniels Midland
Page 3

Corn Processing operating profit increased $ 169 million to $ 286 million for the quarter as Sweeteners and Starches earnings increased $ 20 million to $ 112 million and Bioproducts earnings increased $ 149 million to $ 174 million. For the fiscal year, Corn Processing operating profit increased $ 347 million to $ 877 million as Sweeteners and Starches earnings increased $ 160 million to $ 432 million and Bioproducts increased $ 187 million to $ 446 million. Increased starch, sweetener and ethanol selling prices and volumes contributed to the earnings improvements for both the quarter and fiscal year. Lower lysine selling prices negatively impacted Bioproducts results for the fiscal year. For the quarter, average net corn costs increased. For the year, net corn costs decreased, but were partially offset by higher energy costs.

Agricultural Services operating profits increased $ 15 million to $ 83 million for the quarter and increased $ 14 million to $ 275 million for the year principally due to improved operating results of transportation operations partially offset by a decline in global grain merchandising operations. In addition, fiscal year operating profits of the North American origination and export operations declined due to the negative impact of the hurricanes in the first half of the fiscal year.

Other segment operating profit declined $ 18 million to $ 73 million for the quarter due principally to a $ 40 million decline in Food and Feed Ingredients operating results, primarily due to reduced operating profits of the natural health and nutrition, wheat milling and cocoa operations, partially offset by a $ 21 million improvement in operating profit of the financial operations. For the year, Other segment operating profit declined $ 104 million to $ 310 million due to a decline in operating profit of the Food and Feed Ingredient businesses due principally to asset abandonment charges and reduced operating results of the natural health and nutrition, wheat milling and cocoa operations.

Significant components of Corporate results are as follows (in millions):
 
   
Three months ended
Twelve months ended
   
June 30,
June 30,
     
2006
    
2005
    
2006
    
2005
  
                           
Gain on sale of securities
  
$
-
  
$
-
  
$
29
  
$
159
  
LIFO income (charge)
    
(1
)
  
(21
)
  
12
    
114
  
Other
    
(54
)
  
(63
)
  
(247
)
  
(308
)
Total Corporate
  
$
(55
)
$
(84
)
$
(206
)
$
(35
)
 
Archer Daniels Midland
Page 4
 
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast to discuss financial results and provide a Company update at 8:00 a.m. Central Daylight Time (CDT) on Tuesday, August 1, 2006. To listen by phone, dial 800-706-7741 or 617-614-3471; the access code is 69620120. Digital replay of the call will be available beginning on August 1, 2006 from 10:00 a.m. CDT and ending on August 8, 2006. To access this replay, dial 888-286-8010 or 617-801-6888 and enter access code: 45934305. 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 Website.
 
Archer Daniels Midland Company (ADM) is a world leader in agricultural processing and fermentation technology. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is also a leader in the production of soybean oil and meal, 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, 2006 of $36.6 billion. Additional information can be found on ADM's Website 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)
 
August 1, 2006
       
        
ARCHER DANIELS MIDLAND COMPANY
       
CONSOLIDATED STATEMENTS OF EARNINGS
   
(unaudited)
  
Three months ended
 Twelve months ended
   
June 30,
 June 30,
     
2006
    
2005
    
2006
    
2005
  
 
(in thousands, except per share amounts)
                           
Net sales and other operating income
  
$
9,547,336
  
$
9,423,702
  
$
36,596,111
  
$
35,943,810
  
Cost of products sold
    
8,718,433
    
8,899,359
    
33,630,297
    
33,512,471
  
Gross profit
    
828,903
    
524,343
    
2,965,814
    
2,431,339
  
Selling, general and administrative expenses
    
296,541
    
279,166
    
1,192,683
    
1,080,811
  
Other (income) expense - net
    
(49,489
)
  
(21,863
)
  
(82,119
)
  
(165,847
)
Earnings before income taxes
    
581,851
    
267,040
    
1,855,250
    
1,516,375
  
Income taxes
    
171,592
    
71,556
    
543,180
    
471,990
  
Net earnings
 
$
410,259
  
$
195,484
  
$
1,312,070
  
$
1,044,385
  
Diluted earnings per common share
  
$
.62
  
$
.30
  
$
2.00
  
$
1.59
  
Average number of shares outstanding
    
658,750
    
655,394
    
656,287
    
656,123
  
                           
Other (income) expense - net consists of:
                          
Interest expense
  
$
101,836
  
$
84,677
  
$
365,180
  
$
326,580
  
Investment income
    
(57,940
)
  
(43,590
)
  
(204,083
)
  
(135,346
)
Net (gain) loss on marketable securities
  transactions
    
(11,851
)
  
(38
)
  
(39,803
)
  
(113,299
)
Equity in (earnings) losses of
  unconsolidated affiliates
    
(60,735
)
  
(55,456
)
  
(174,339
)
  
(228,865
)
Other - net
    
(20,799
)
  
(7,456
)
  
(29,074
)
  
(14,917
)
   
$
(49,489
)
$
(21,863
)
$
(82,119
)
$
(165,847
)
                           
Operating profit (loss) by segment is as follows:
                          
Oilseeds Processing (2) (4)
  
$
194,673
  
$
73,865
  
$
598,415
  
$
344,654
  
Corn Processing
                         
Sweeteners and Starches (2)
   
111,915
    
92,032
    
431,662
    
271,487
  
Bioproducts (2) (7)
    
173,961
    
25,247
    
445,696
    
258,746
  
Total Corn Processing
    
285,876
    
117,279
    
877,358
    
530,233
  
Agricultural Services (2)
    
83,253
    
67,880
    
275,469
    
261,659
  
Other
                         
Food and Feed Ingredients (2) (5)
    
20,228
    
60,026
    
159,123
    
263,617
  
Financial (6)
    
53,256
    
31,946
    
150,826
    
150,777
  
Total Other
    
73,484
    
91,972
    
309,949
    
414,394
  
Total segment operating profit
    
637,286
    
350,996
    
2,061,191
    
1,550,940
  
Corporate (1) (3) (4) (6)
    
(55,435
)
  
(83,956
)
  
(205,941
)
  
(34,565
)
Earnings (loss) before income taxes
  
$
581,851
  
$
267,040
  
$
1,855,250
  
$
1,516,375
  
 
(1)
 Fiscal 2005 twelve months results include gains of $159 million related to sales of the Company’s interests in Tate & Lyle PLC.
(2) Fiscal 2006 fourth quarter results include a charge for abandonment and write downs of long-lived assets and a charge for FIN 47 of: Oilseeds Processing ($ 16 million), Corn Processing - Sweeteners and Starches ($ 5 million), Corn Processing – Bioproducts ($ 7 million), Agricultural Services ($ 1 million), Other – Food and Feed Ingredients ($ 30 million). Fiscal 2006 twelve months results include a charge for abandonment and write downs of long-lived assets and a charge for FIN 47 of: Oilseeds Processing ($ 20 million), Corn Processing – Sweeteners and Starches ($ 5 million), Corn Processing – Bioproducts ($ 7 million), Agricultural Services ($ 1 million), Other – Food and Feed Ingredients ($ 62 million). Fiscal 2005 fourth quarter results include a charge for abandonment and write-down of long-lived assets of: Oilseeds Processing ($13 million), Corn Processing – Bioproducts ($16 million), and Other – Food and Feed Ingredients ($11 million).  Fiscal 2005 twelve months results include a charge for abandonment and write-down of long-lived assets of: Oilseeds Processing ($13 million), Corn Processing – Bioproducts ($16 million), and Other – Food and Feed Ingredients ($13 million).
(3) Fiscal 2006 fourth quarter results include a LIFO charge of $ 1 million. Fiscal 2006 twelve months results include LIFO income of $ 12 million. Fiscal 2005 fourth quarter results include a LIFO charge of $21 million.  Fiscal 2005 twelve months results include LIFO income of $114 million. 
(4)  Fiscal 2006 includes Brazilian transactional tax credits of:  Oilseeds Processing ($ 27 million for the quarter and twelve months) and Corporate ($ 19 million for the twelve months). 
(5)  Fiscal 2006 fourth quarter and twelve months results include a $ 17 million gain from sale of long lived assets. Fiscal 2006 twelve months results include a charge of $ 16 million related to exiting the European animal feed business. 
(6)  Fiscal 2006 includes gains on securities sales for the quarter of: Financial ($ 12 million). Fiscal 2006 twelve months results include gains on securities sales of: Financial ($ 12 million) and Corporate ($ 28 million).   
(7) Fiscal 2006 twelve months results include a charge of $6 million related to the closure of a citric acid plant. 
 
 
August 1, 2006
              
               
ARCHER DANIELS MIDLAND COMPANY
              
SUMMARY OF FINANCIAL CONDITION
              
(unaudited)
              
     
June 30, 2006
    
June 30, 2005
  
   
(in thousands)
NET INVESTMENT IN
              
Working capital
  
$
6,290,697
  
$
4,992,583
  
Property, plant and equipment
    
5,293,032
    
5,184,380
  
Investments in and advances to affiliates
    
1,985,662
    
1,879,501
  
Long-term marketable securities
    
1,110,177
    
1,049,952
  
Other non-current assets
    
1,053,882
    
773,571
  
   
$
15,733,450
  
$
13,879,987
  
               
FINANCED BY
              
Short-term debt
  
$
549,419
  
$
425,808
  
Long-term debt, including current maturites
    
4,130,091
    
3,753,078
  
Deferred liabilities
    
1,247,060
    
1,267,629
  
Shareholders' equity
    
9,806,880
    
8,433,472
  
   
$
15,733,450
  
$
13,879,987
  
               
SUMMARY OF CASH FLOWS
              
(unaudited)
              
   
Twelve Months Ended
   
June 30,
     
2006
    
2005
  
   
(in thousands)
Operating Activities
              
Net earnings
  
$
1,312,070
  
$
1,044,385
  
Depreciation
    
656,714
    
664,652
  
Asset abandonments
    
71,264
    
41,548
  
Other - net
    
(253,285
)
  
103,664
  
Changes in operating assets and liabilities
    
(396,382
)
  
271,930
  
Total Operating Activities
    
1,390,381
    
2,126,179
  
Investing Activities
              
Purchases of property, plant and equipment
    
(762,009
)
  
(623,819
)
Net assets of businesses acquired
    
(182,213
)
  
(24,238
)
Other investing activities
    
(124,319
)
  
346,549
  
Total Investing Activities
    
(1,068,541
)
  
(301,508
)
Financing Activities
              
Long-term debt borrowings
    
643,544
    
18,547
  
Long-term debt payments
    
(265,988
)
  
(185,913
)
Net borrowings (payments) under lines of credit
    
104,548
    
(1,357,456
)
Purchases of treasury stock
    
(1,585
)
  
(139,112
)
Cash dividends
    
(241,995
)
  
(209,425
)
Proceeds from exercises of stock options
    
30,069
    
30,901
  
Total Financing Activities
    
268,593
    
(1,842,458
)
Increase (decrease) in cash and cash equivalents
    
590,433
    
(17,787
)
Cash and cash equivalents beginning of period
    
522,420
    
540,207
  
Cash and cash equivalents end of period
  
$
1,112,853
  
$
522,420