 | Archer Daniels Midland Company 4666 Faries Parkway Decatur, Il 62526 |
News Release
FOR IMMEDIATE RELEASE October 29, 2004
ARCHER DANIELS MIDLAND REPORTS FIRST QUARTER RESULTS
Decatur, IL — October 29, 2004 — Archer Daniels Midland (NYSE: ADM)
| t | Net earnings for the quarter ended September 30, 2004 increased 77 % to $ 266 million - $ .41 per share from $ 150 million - $ .23 per share last year. |
| t | First quarter segment operating profit increased 14 % to $ 339 million from $ 297 million last year. |
| · | Oilseeds Processing earnings increased on improved processing results in North America and Europe. |
| · | Corn Processing earnings declined as improved Bioproducts results were offset by the impact of higher net corn costs. |
| · | Agricultural Services earnings increased on improved North American origination and transportation results. |
| · | Other segment operating earnings increased from improved Food and Feed Ingredients results. Financial earnings from our private equity funds declined. |
s Financial Highlights
(Amounts in thousands, except per share data and percentages)
| THREE MONTHS ENDED | | |
| | | | 9/30/2004 | | 9/30/2003 | | % CHANGE |
| Net sales and other operating income | | | $ | 8,972,411 | | $ | 7,967,902 | | | 13% | |
| Segment operating profit | | | $ | 338,672 | | $ | 296,575 | | | 14% | |
| Net earnings | | | $ | 266,297 | | $ | 150,181 | | | 77% | |
| Earnings per share | | | $ | 0.41 | | $ | 0.23 | | | 78% | |
| Average number of shares outstanding | | | | 652,325 | | | 645,132 | | | 1% | |
“Record harvests in North America are nearly complete. Reduced prices for grain and oilseeds improved the Company’s liquidity and contributed to the continuation of strong operating results. Our management team continues to enhance the capabilities of our global network to build long-term shareholder value.” G. Allen Andreas, Chairman and Chief Executive |
Archer Daniels Midland
Page 2
Discussion of Operations
Net earnings for the quarter ended September 30, 2004 were $ 266 million, equal to $ .41 per share, compared to $ 150 million, equal to $ .23 per share last year, an increase of 77%.
Segment operating profit for the quarter ended September 30, 2004 increased $ 42 million to $ 339 million as operating profit improvements were realized in all major segments except the Corn Processing segment. Oilseeds Processing operating earnings increased to $ 91 million from $ 68 million last year as improved North American and European operating results were partially offset by decreased operating results in our Asian operations. Corn Processing operating earnings declined to $ 103 million from $ 107 million last year. Bioproducts results improved to $ 48 million from $ 18 million last year as higher ethanol and feed ingredient bioproduct selling prices more than offset higher net corn costs. Sweeteners and Starches were negatively impacted by higher net corn costs resulting in earnings of $ 55 million co mpared to earnings of $ 89 million last year. Agricultural Services operating earnings increased to $ 51 million from $ 43 million last year as improvements in North American origination and transportation operating results more than offset a decline from the prior year’s strong global grain merchandising results. Other segment operating earnings increased to $ 93 million from $ 79 million last year. Food and Feed Ingredient earnings increased $ 29 million to $ 89 million due to improved operating results of our Cocoa operations and improved earnings of the GRUMA corn flour venture. Financial operations declined $ 15 million primarily due to a decrease in results of our private equity fund investments. For the quarter, Corporate improved to $ 47 million of income this year from $ 79 million of expense last year due primarily to a $ 116 million credit from the effect of changing commodity prices on LIFO inventory valuations compared to a LIFO charge of $ 8 million last year.
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast to discuss first quarter results at 10:00 a.m. Central Daylight Time on October 29, 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 on October 29, 2004 approximately 2 hours after the call and ending on November 8, 2004 at 10:59 p.m. CST. To access this replay, dial 800-642-1687 or 706-645-9291 and enter access code: 1032038. 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 thewww.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 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 athttp://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 29, 2004 | | | |
| | | |
ARCHER DANIELS MIDLAND COMPANY | | | |
CONSOLIDATED STATEMENTS OF EARNINGS | | | |
| (unaudited) | | | |
| | | Three months ended |
| | | | September 30, | |
| | | | 2004 | | | 2003 | |
| | | (in thousands, except per share amounts) |
| | | | | | | | |
| Net sales and other operating income | | $ | 8,972,411 | | $ | 7,967,902 | |
| Cost of products sold | | | 8,308,979 | | | 7,514,148 | |
| Gross profit | | | 663,432 | | | 453,754 | |
| Selling, general and administrative expenses | | | 251,509 | | | 231,796 | |
| Other expense - net | | | 25,986 | | | 4,304 | |
| Earnings before income taxes | | | 385,937 | | | 217,654 | |
| Income taxes | | | 119,640 | | | 67,473 | |
| Net earnings | | $ | 266,297 | | $ | 150,181 | |
| | | | | | | | |
| Basic and diluted earnings per common share | | $ | 0.41 | | $ | 0.23 | |
| Average number of shares outstanding | | | 652,325 | | | 645,132 | |
| | | | | | | | |
Other expense - net consists of: | | | | | | | |
| Interest expense | | $ | 79,049 | | $ | 83,044 | |
| Investment income | | | (30,835 | ) | | (28,301 | ) |
| Net (gain) on marketable securities transactions | | | (7 | ) | | (1,092 | ) |
| Equity in (earnings) of unconsolidated affiliates | | | (20,893 | ) | | (43,294 | ) |
| Other - net | | | (1,328 | ) | | (6,053 | ) |
| | | $ | 25,986 | | $ | 4,304 | |
| | | | | | | | |
Operating profit by segment is as follows: | | | | | | | |
| Oilseeds Processing | | $ | 91,273 | | $ | 67,830 | |
| Corn Processing | | | | | | | |
| Sweeteners and Starches | | | 54,880 | | | 88,860 | |
| Bioproducts | | | 48,193 | | | 18,437 | |
| Total Corn Processing | | | 103,073 | | | 107,297 | |
| Agricultural Services | | | 51,272 | | | 42,849 | |
| Other | | | | | | | |
| Food and Feed Ingredients | | | 89,239 | | | 59,998 | |
| Financial | | | 3,815 | | | 18,601 | |
| Total Other | | | 93,054 | | | 78,599 | |
| Total segment operating profit | | | 338,672 | | | 296,575 | |
| Corporate | | | 47,265 | | | (78,921 | ) |
| Earnings before income taxes | | $ | 385,937 | | $ | 217,654 | |
October 29, 2004 | | | | | |
| | | | | | |
ARCHER DANIELS MIDLAND COMPANY | | | | | |
SUMMARY OF FINANCIAL CONDITION | | | | | |
| (unaudited) | | | | | |
| | | | September 30, 2004 | | | June 30, 2004 | |
| | (in thousands) |
| NET INVESTMENT IN | | | | | | | |
| Working capital | | $ | 4,872,121 | | $ | 5,520,066 | |
| Property, plant, and equipment | | | 5,239,996 | | | 5,254,738 | |
| Investments in and advances to affiliates | | | 1,883,017 | | | 1,832,619 | |
| Long-term marketable securities | | | 1,134,320 | | | 1,161,388 | |
| Other non current assets | | | 781,737 | | | 781,080 | |
| | | $ | 13,911,191 | | $ | 14,549,891 | |
| | | | | | | | |
| FINANCED BY | | | | | | | |
| Short-term debt | | $ | 957,799 | | $ | 1,770,512 | |
| Long-term debt, including current maturites | | | 3,888,850 | | | 3,900,670 | |
| Deferred liabilities | | | 1,161,086 | | | 1,180,493 | |
| Shareholders' equity | | | 7,903,456 | | | 7,698,216 | |
| | | $ | 13,911,191 | | $ | 14,549,891 | |
| | | | | | | | |
SUMMARY OF CASH FLOWS | | | | | | | |
| (unaudited) | | | | | | | |
| | | Three Months Ended |
| | September 30, |
| | | 2004 | | | 2003 | |
| | (in thousands) |
| Operating activities | | | | | | | |
| Net earnings | | $ | 266,297 | | $ | 150,181 | |
| Depreciation | | | 167,447 | | | 166,133 | |
| Other | | | 76,556 | | | (40,681 | ) |
| Changes in operating assets and liabilities | | | 488,919 | | | (119,492 | ) |
| Total Operating Activities | | | 999,219 | | | 156,141 | |
| Investing Activities | | | | | | | |
| Purchases of property, plant and equipment | | | (141,993 | ) | | (108,602 | ) |
| Net assets of businesses acquired | | | (6,797 | ) | | (53,015 | ) |
| Other investing activities | | | (6,205 | ) | | 151,273 | |
| Total Investing Activities | | | (154,995 | ) | | (10,344 | ) |
| Financing Activities | | | | | | | |
| Long-term borrowings | | | 132 | | | 2,646 | |
| Long-term debt payments | | | (15,835 | ) | | (15,441 | ) |
| Net payments under lines of credit | | | (817,804 | ) | | (91,040 | ) |
| Purchases of treasury stock | | | (16 | ) | | (3,969 | ) |
| Cash dividends | | | (49,029 | ) | | (38,842 | ) |
| Proceeds from exercises of stock options | | | 5,345 | | | 1,872 | |
| Total Financing Activities | | | (877,207 | ) | | (144,774 | ) |
| Increase (decrease) in cash and cash equivalents | | | (32,983 | ) | | 1,023 | |
| Cash and cash equivalents beginning of period | | | 540,207 | | | 764,959 | |
| Cash and cash equivalents end of period | | $ | 507,224 | | $ | 765,982 | |
