 | Archer Daniels Midland Company 4666 Faries Parkway Decatur, Il 62526 |
News Release
| FOR IMMEDIATE RELEASE | July 29, 2005 |
ARCHER DANIELS MIDLAND REPORTS RECORD ANNUAL RESULTS
Decatur, IL — July 29, 2005 — Archer Daniels Midland (NYSE: ADM)
► | Net earnings for the year ended June 30, 2005 increased to $ 1.044 billion - $ 1.59 per share compared to $ 495 million - $ .76 per share last year. |
► | Segment operating profit for the year was $ 1.551 billion compared to $ 1.561 billion last year. |
► | Net earnings for the quarter ended June 30, 2005 increased to $ 195 million - $ .30 per share compared to a loss last year of $ 103 million - ($ .16) per share. |
► | Last year’s results included a $ 400 million ($252 million after tax - $ .39 per share) fourth quarter charge related to a fructose litigation settlement. |
► | Segment operating profit for the quarter increased to $ 351 million from $ 268 million last year. |
| · | Oilseeds Processing operating profit increased on improved results in Europe, South America and Asia. |
| · | Corn Processing operating profit decreased principally due to reduced lysine selling prices and higher energy costs. |
| · | Agricultural Services operating profit increased due to improved grain operations and transportation results. |
| · | Other segment operating profit increased from improved Food and Feed Ingredients and Financial results. |
► Financial Highlights
(Amounts in thousands, except per share data and percentages)
| THREE MONTHS ENDED | TWELVE MONTHS ENDED |
| | | 6/30/05 | | | 6/30/04 | | | % CHANGE | | | 6/30/05 | | | 6/30/04 | | | % CHANGE | |
| Net sales and other operating income | $ | 9,423,702 | | $ | 9,685,969 | | | -3% | | | 35,943,810 | | $ | 36,151,394 | | | -1% | |
| Segment operating profit | $ | 350,996 | | $ | 267,617 | | | 31% | | | 1,550,940 | | $ | 1,561,011 | | | -1% | |
| Net earnings (loss) | $ | 195,484 | | $ | (103,061 | ) | | - | | | 1,044,385 | | $ | 494,710 | | | 111% | |
| Earnings (loss) per share | $ | .30 | | $ | (.16 | ) | | - | | | 1.59 | | $ | .76 | | | 109% | |
| Average number of shares outstanding | | 655,394 | | | 652,391 | | | - | | | 656,123 | | $ | 649,810 | | | 1% | |
“This fiscal year, ADM delivered record earnings generating double-digit returns on shareholder’s equity. Our diverse network of businesses is positioned to meet the global needs of our customers and to provide solid returns on invested capital.” G. Allen Andreas, Chairman and Chief Executive |
Archer Daniels Midland
Page 2
Discussion of Operations
Net earnings for the year ended June 30, 2005 were $ 1.044 billion, or $ 1.59 per share, compared to $ 495 million, or $ .76 per share, last year. Net earnings for the quarter ended June 30, 2005 were $ 195 million, or $.30 a share, compared to a loss of $ 103 million, or $ .16 per share last year. The quarter and year ended June 30, 2004 included a $ 400 million charge ($ 252 million after tax, or $ .39 per share) related to the settlement of fructose litigation.
Segment operating profit increased $ 83 million to $ 351 million for the quarter and declined $ 10 million to $ 1.551 billion for the year as operating profit improvements were realized in all major segments except the Corn Processing segment.
Oilseeds Processing operating profit increased $ 89 million to $ 74 million for the quarter and increased $ 54 million to $ 345 million for the year due to improved operating results in Europe, South America and Asia. Last year’s operating profit for the quarter and fiscal year were negatively impacted by Chinese contract defaults in the fourth quarter. In addition, results for the fourth quarter and year include a charge for abandonment and write-down of long-lived assets of $13 million. Last year’s results included abandonment losses of $1 million for the quarter and $4 million for the year.
Corn Processing operating profit declined $ 33 million to $ 117 million for the quarter and declined $ 131 million to $ 530 million for the year due principally to lower lysine selling prices and higher energy costs as compared to last year. Sweeteners and Starches operating profit increased $ 30 million to $ 92 million for the quarter due to higher sweetener and starch volumes and lower net corn costs partially offset by increased energy costs. For the year, Sweetener and Starch operating profit declined $ 47 million to $ 271 million as higher sweetener and starch selling prices were more than offset by increased energy and net corn costs. Last year’s fourth quarter and fiscal year results also included a $ 15 million gain from an insurance-related lawsuit. Bioproducts operating profit declined $ 63 million to $ 25 million for the quarter due to lower lysine selling prices and higher energy costs partially offset by lower net corn costs. For the year, Bioproducts operating profit declined $ 84 million to $ 259 million due to lower lysine selling prices and higher average net corn and energy costs. For the year, these declines were partially offset by higher ethanol selling prices. In addition, Bioproducts results for the fourth quarter and year include a charge for abandonment and write-down of long-lived assets of $ 16 million. Last year’s Bioproducts results included abandonment losses of $ 14 million for the year.
Agricultural Services operating profit increased by $ 23 million to $ 68 million for the quarter due principally to improved grain operations and transportation results. For the year, operating profit increased $ 12 million to $ 262 million as improvements in North American grain and transportation results offset a decline from last year’s strong global grain merchandising results. Last year’s Agricultural Services results included abandonment losses of $ 5 million for the year.
Other segment operating profit increased $ 4 million to $ 92 million for the quarter and increased $ 55 million to $ 414 million for the year as both Food and Feed Ingredients and Financial operations showed improvements over last year. Food and Feed Ingredients operating profits of $ 60 million for the quarter and $ 264 million for the year were comparable to last year. In addition, Food and Feed Ingredients results include a charge for abandonment and write-down of long-lived assets of $11 million for the quarter and $13 million for the year. Last year’s results included abandonment losses of $9 million for the quarter and $13 million for the year. Financial operating profit of $ 32 million for the quarter was comparable to the $ 30 million profit of last year. For the full year, Financial operating earnings increased $ 52 million to $ 151 million primarily due to improved results of captive insurance operations and private equity fund investments.
Archer Daniels Midland
Page 3
Significant components of Corporate results are as follows (in millions):
| | | Fourth Quarter | Fiscal Year |
| | | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | | | | | | | | | | | | | |
| Gain on sale of securities | | $ | - | | $ | 9 | | $ | 159 | | $ | 21 | |
| Fructose litigation settlement | | | - | | | (400 | ) | | - | | | (400 | ) |
| LIFO income (charge) | | | (21 | ) | | 42 | | | 114 | | | (119 | ) |
| Abandonments | | | - | | | - | | | - | | | (14 | ) |
| Other | | | (63 | ) | | (77 | ) | | (308 | ) | | (331 | ) |
| Total Corporate | | $ | (84 | ) | $ | (426 | ) | $ | (35 | ) | $ | (843 | ) |
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 on Friday, July 29, 2005. To listen by phone, dial 866-761-0749 or 617-614-2707; the access code is 17239336. Digital replay of the call will be available beginning on July 29, 2005 from 10:00 a.m. CDT and ending on August 5, 2005. To access this replay, dial 888-286-8010 or 617-801-6888 and enter access code: 97317456. 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.
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)
| July 29, 2005 | | | |
| | | | |
| ARCHER DANIELS MIDLAND COMPANY | | | |
| CONSOLIDATED STATEMENTS OF EARNINGS | | | |
| (unaudited) | | | |
| | | Three months ended | Twelve months ended |
| | | June 30, | June 30, |
| | | | 2005 | | | 2004 | | | 2005 | | | 2004 | |
| | (in thousands, except per share amounts) |
| | | | | | | | | | | | | | |
| Net sales and other operating income | | $ | 9,423,702 | | $ | 9,685,969 | | $ | 35,943,810 | | $ | 36,151,394 | |
| Cost of products sold | | | 8,899,359 | | | 9,182,712 | | | 33,512,471 | | | 34,003,070 | |
| Gross profit | | | 524,343 | | | 503,257 | | | 2,431,339 | | | 2,148,324 | |
| Selling, general and administrative expenses | | | 279,166 | | | 652,695 | | | 1,080,811 | | | 1,401,833 | |
| Other (income) expense - net | | | (21,863 | ) | | 8,695 | | | (165,847 | ) | | 28,480 | |
| Earnings (loss) before income taxes | | | 267,040 | | | (158,133 | ) | | 1,516,375 | | | 718,011 | |
| Income taxes | | | 71,556 | | | (55,072 | ) | | 471,990 | | | 223,301 | |
| Net earnings (loss) | | $ | 195,484 | | $ | (103,061 | ) | $ | 1,044,385 | | $ | 494,710 | |
| Diluted earnings (loss) per common share | | $ | .30 | | $ | (.16 | ) | $ | 1.59 | | $ | .76 | |
| Average number of shares outstanding | | | 655,394 | | | 652,391 | | | 656,123 | | | 649,810 | |
| | | | | | | | | | | | | | |
| Other (income) expense - net consists of: | | | | | | | | | | | | | |
| Interest expense | | $ | 84,677 | | $ | 82,142 | | $ | 326,580 | | $ | 341,991 | |
| Investment income | | | (43,590 | ) | | (26,828 | ) | | (135,346 | ) | | (116,352 | ) |
Net (gain) loss on marketable securities transactions | | | (38 | ) | | (12,271 | ) | | (113,299 | ) | | (23,968 | ) |
Equity in (earnings) losses of unconsolidated affiliates | | | (55,456 | ) | | (39,263 | ) | | (228,865 | ) | | (180,716 | ) |
| Other - net | | | (7,456 | ) | | 4,915 | | | (14,917 | ) | | 7,525 | |
| | | $ | (21,863 | ) | $ | 8,695 | | $ | (165,847 | ) | $ | 28,480 | |
| | | | | | | | | | | | | | |
| Operating profit (loss) by segment is as follows: | | | | | | | | | | | | | |
Oilseeds Processing (2) | | $ | 73,865 | | $ | (15,491 | ) | $ | 344,654 | | $ | 290,732 | |
| Corn Processing | | | | | | | | | | | | | |
Sweeteners and Starches (2) (5) | | | 92,032 | | | 62,155 | | | 271,487 | | | 318,369 | |
Bioproducts (2) | | | 25,247 | | | 87,897 | | | 258,746 | | | 342,578 | |
| Total Corn Processing | | | 117,279 | | | 150,052 | | | 530,233 | | | 660,947 | |
Agricultural Services (2) (5) | | | 67,880 | | | 44,852 | | | 261,659 | | | 249,863 | |
| Other | | | | | | | | | | | | | |
Food and Feed Ingredients (2) | | | 60,026 | | | 58,260 | | | 263,617 | | | 260,858 | |
| Financial | | | 31,946 | | | 29,944 | | | 150,777 | | | 98,611 | |
| Total Other | | | 91,972 | | | 88,204 | | | 414,394 | | | 359,469 | |
| Total segment operating profit | | | 350,996 | | | 267,617 | | | 1,550,940 | | | 1,561,011 | |
Corporate (1) (2) (3) (4) (5) | | | (83,956 | ) | | (425,750 | ) | | (34,565 | ) | | (843,000 | ) |
| Earnings (loss) before income taxes | | $ | 267,040 | | $ | (158,133 | ) | $ | 1,516,375 | | $ | 718,011 | |
(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 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). Fiscal 2004 fourth quarter results include a charge for abandonment and write down of long-lived assets of: Oilseeds Processing ($1 million), Other - Food and Feed Ingredients ($9 million). Fiscal 2004 twelve month results include a charge for abandonment and write down of long-lived assets of: Oilseeds Processing ($4 million), Corn Processing - Sweeteners and Starches ($1 million), Corn Processing - Bioproducts ($14 million), Agricultural Services ($5 million), Other - Food and Feed Ingredients ($13 million), and Corporate ($14 million). |
| (3) | Fiscal 2005 fourth quarter results include a LIFO charge of $21 million. Fiscal 2005 twelve months results include LIFO income of $114 million. Fiscal 2004 fourth quarter results include LIFO income of $42 million. Fiscal 2004 twelve months results include a LIFO charge of $119 million. |
| (4) | Fiscal 2004 fourth quarter and twelve months results include a $400 million charge for the settlement of fructose litigation. |
| (5) | Fiscal 2004 twelve months results include a gain from an insurance-related lawsuit of: Corn Processing ($15 million), Agricultural Services ($2 million), and Corporate ($4 million). |
July 29, 2005 | | | | | |
| | | | | | |
ARCHER DANIELS MIDLAND COMPANY | | | | | |
SUMMARY OF FINANCIAL CONDITION | | | | | |
| (unaudited) | | | | | |
| | | | | | | | |
| | | | June 30, 2005 | | | June 30, 2004 | |
| | | (in thousands) |
| NET INVESTMENT IN | | | | | | | |
| Working capital | | $ | 4,992,583 | | $ | 5,520,066 | |
| Property, plant and equipment | | | 5,184,380 | | | 5,254,738 | |
| Investments in and advances to affiliates | | | 1,879,501 | | | 1,832,619 | |
| Long-term marketable securities | | | 1,049,952 | | | 1,161,388 | |
| Other non-current assets | | | 773,571 | | | 781,080 | |
| | | $ | 13,879,987 | | $ | 14,549,891 | |
| FINANCED BY | | | | | | | |
| Short-term debt | | $ | 425,808 | | $ | 1,770,512 | |
| Long-term debt, including current maturites | | | 3,753,078 | | | 3,900,670 | |
| Deferred liabilities | | | 1,267,629 | | | 1,180,493 | |
| Shareholders' equity | | | 8,433,472 | | | 7,698,216 | |
| | | $ | 13,879,987 | | $ | 14,549,891 | |
| | | | | | | | |
SUMMARY OF CASH FLOWS | | | | | | | |
| (unaudited) | | | | | | | |
| | | Twelve Months Ended |
| | | June 30, |
| | | | 2005 | | | 2004 | |
| | | (in thousands) |
| Operating activities | | | | | | | |
| Net earnings | | $ | 1,044,385 | | $ | 494,710 | |
| Depreciation | | | 664,652 | | | 685,613 | |
| Asset abandonments | | | 41,548 | | | 50,576 | |
| Other - net | | | 103,664 | | | (212,260 | ) |
| Changes in operating assets and liabilities | | | 271,930 | | | (985,300 | ) |
| Total Operating Activities | | | 2,126,179 | | | 33,339 | |
| Investing Activities | | | | | | | |
| Purchases of property, plant and equipment | | | (623,819 | ) | | (509,237 | ) |
| Net assets of businesses acquired | | | (24,238 | ) | | (93,022 | ) |
| Other investing activities | | | 346,549 | | | 27,824 | |
| Total Investing Activities | | | (301,508 | ) | | (574,435 | ) |
| Financing Activities | | | | | | | |
| Long-term borrowings | | | 18,547 | | | 4,366 | |
| Long-term debt payments | | | (185,913 | ) | | (32,381 | ) |
| Net borrowings (payments) under lines of credit | | | (1,357,456 | ) | | 483,764 | |
| Purchases of treasury stock | | | (139,112 | ) | | (4,113 | ) |
| Cash dividends | | | (209,425 | ) | | (174,109 | ) |
| Proceeds from exercises of stock options | | | 30,901 | | | 38,817 | |
| Total Financing Activities | | | (1,842,458 | ) | | 316,344 | |
| Increase (decrease) in cash and cash equivalents | | | (17,787 | ) | | (224,752 | ) |
| Cash and cash equivalents beginning of period | | | 540,207 | | | 764,959 | |
| Cash and cash equivalents end of period | | $ | 522,420 | | $ | 540,207 | |
