 | Archer Daniels Midland Company 4666 Faries Parkway Decatur, Il 62526 |
News Release
FOR IMMEDIATE RELEASE | October 31, 2006 |
ARCHER DANIELS MIDLAND REPORTS FIRST QUARTER RESULTS
Decatur, IL — October 31, 2006 — Archer Daniels Midland (NYSE: ADM)
► | Net earnings for the quarter ended September 30, 2006 more than doubled to $ 403 million - $ .61 per share from $ 186 million - $ .29 per share last year. |
“ADM delivered near-record performance in the first quarter,” said ADM Chief Executive Officer and President, Patricia A. Woertz. “Our earnings, more than double those of a year ago, reflect strong momentum in our core businesses. However, we will continue to experience the challenges of dealing with volatile commodity prices.”
► | Segment operating profit for the quarter increased 85% to $ 648 million from $ 351 million last year. |
| · | Oilseeds Processing operating profit increased on improved market conditions in all geographic regions. |
| · | Corn Processing operating profit increased due to improved ethanol and sweetener selling prices. |
| · | Agricultural Services operating profit increased due to improved global merchandising and transportation results. |
| · | Other segment operating profit declined primarily due to decreased results of Food, Feed and Industrial. |
► Financial Highlights
(Amounts in thousands, except per share data and percentages)
| | THREE MONTHS ENDED | | | |
| | 9/30/2006 | | | 9/30/2005 | | | % CHANGE | |
| Net sales and other operating income | $ | 9,446,922 | | $ | 8,626,949 | | | 10% | |
| Segment operating profit | $ | 647,934 | | $ | 350,518 | | | 85% | |
| Net earnings | $ | 402,745 | | $ | 186,338 | | | 116% | |
| Earnings per share | $ | .61 | | $ | .29 | | | 110% | |
| Average number of shares outstanding | | 660,863 | | | 653,805 | | | 1% | |
Archer Daniels Midland
Page 2
Discussion of Operations
Net earnings for the quarter ended September 30, 2006 were $ 403 million, or $ .61 per share, compared to $ 186 million, or $ .29 per share, last year.
Segment operating profit increased $ 297 million to $ 648 million for the quarter from $ 351 million last year.
Oilseeds Processing operating profit increased $ 71 million to $ 170 million for the quarter as improved market conditions resulted in increased operating profits in all geographic regions.
Corn Processing operating profit increased $ 154 million to $ 290 million for the quarter as Sweetener and Starches earnings increased $ 20 million to $ 113 million and Bioproducts earnings increased $ 134 million to $ 177 million. Increased starch, sweetener and ethanol selling prices contributed to the earnings improvement.
Agricultural Services operating profits increased $ 91 million to $ 111 million due principally to improved earnings of global grain merchandising operations and improved operating results of transportation operations. In the first quarter of fiscal year 2006, the negative impact of hurricanes decreased North American origination and export operating results.
Other segment operating profit declined $ 19 million to $ 76 million for the quarter due principally to a $ 31 million decline in Food, Feed and Industrial operating results. This decline was primarily due to reduced operating results of cocoa, wheat milling and natural health and nutrition operations, partially offset by a $ 12 million improvement in operating profit of the financial operations.
Significant components of Corporate results are as follows (in millions):
| | Three months ended |
| | September 30 |
| | | 2006 | | | 2005 | |
| | | | | | | |
| LIFO income (charge) | | $ | (17 | ) | $ | 9 | |
| Other | | | (56 | ) | | (86 | ) |
| Total Corporate | | $ | (73 | ) | $ | (77 | ) |
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast to discuss first quarter results and provide a Company update at 8:00 a.m. Central Standard Time (CST) on Tuesday, October 31, 2006. To listen by phone, dial 800-299-7098 or 617-801-9715; the access code is 60756673. Digital replay of the call will be available beginning on October 31, 2006 from 10:00 a.m. CST and ending on November 7, 2006. To access this replay, dial 888-286-8010 or 617-801-6888 and enter access code: 97811879. In addition, a financial summary slide presentation will be available to download approximately 60 minutes prior to the start of the call. To listen to the call and to download the financial summary presentation 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 240 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)
ARCHER DANIELS MIDLAND COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
| | | Three months ended |
| | September 30 |
| | | 2006 | | | 2005 | |
| | (in thousands, except per share amounts) |
| | | | | | | | |
| Net sales and other operating income | | $ | 9,446,922 | | $ | 8,626,949 | |
| Cost of products sold | | | 8,581,344 | | | 8,044,238 | |
| Gross profit | | | 865,578 | | | 582,711 | |
| Selling, general and administrative expenses | | | 309,835 | | | 304,455 | |
| Other (income) expense - net | | | (19,510 | ) | | 4,524 | |
| Earnings before income taxes | | | 575,253 | | | 273,732 | |
| Income taxes | | | 172,508 | | | 87,394 | |
| Net earnings | | $ | 402,745 | | $ | 186,338 | |
| | | | | | | | |
| Diluted earnings per common share | | $ | .61 | | $ | 0.29 | |
| Average number of shares outstanding | | | 660,863 | | | 653,805 | |
| | | | | | | | |
Other (income) expense - net consists of: | | | | | | | |
| Interest expense | | $ | 97,051 | | $ | 86,289 | |
| Investment income | | | (60,709 | ) | | (37,774 | ) |
| Net gain on marketable securities transactions | | | (4,273 | ) | | (5,259 | ) |
| Equity in earnings of unconsolidated affiliates | | | (56,615 | ) | | (35,680 | ) |
| Other - net | | | 5,036 | | | (3,052 | ) |
| | | $ | (19,510 | ) | $ | 4,524 | |
| | | | | | | | |
Operating profit (loss) by segment is as follows: | | | | | | | |
| Oilseeds Processing | | $ | 169,645 | | $ | 99,115 | |
| Corn Processing | | | | | | | |
| Sweeteners and Starches | | | 112,914 | | | 92,481 | |
| Bioproducts | | | 177,584 | | | 43,777 | |
| Total Corn Processing | | | 290,498 | | | 136,258 | |
| Agricultural Services | | | 111,299 | | | 20,009 | |
| Other | | | | | | | |
| Food, Feed and Industrial | | | 38,169 | | | 69,229 | |
| Financial | | | 38,323 | | | 25,907 | |
| Total Other | | | 76,492 | | | 95,136 | |
| Total segment operating profit | | | 647,934 | | | 350,518 | |
| Corporate | | | (72,681 | ) | | (76,786 | ) |
| Earnings before income taxes | | $ | 575,253 | | $ | 273,732 | |
October 31, 2006
ARCHER DANIELS MIDLAND COMPANY
SUMMARY OF FINANCIAL CONDITION
(unaudited)
| | | September 30, 2006 | | | June 30, 2006 | |
| | (in thousands) |
| | | | | | | |
| NET INVESTMENT IN | | | | | | | |
| Working capital | | $ | 6,764,771 | | $ | 6,290,697 | |
| Property, plant, and equipment | | | 5,378,873 | | | 5,293,032 | |
| Investments in and advances to affiliates | | | 2,061,651 | | | 1,985,662 | |
| Long-term marketable securities | | | 1,110,308 | | | 1,110,177 | |
| Other non-current assets | | | 1,041,981 | | | 1,053,882 | |
| | | $ | 16,357,584 | | $ | 15,733,450 | |
| | | | | | | | |
| FINANCED BY | | | | | | | |
| Short-term debt | | $ | 714,956 | | $ | 549,419 | |
| Long-term debt, including current maturities | | | 4,099,971 | | | 4,130,091 | |
| Deferred liabilities | | | 1,252,912 | | | 1,247,060 | |
| Shareholders' equity | | | 10,289,745 | | | 9,806,880 | |
| | | $ | 16,357,584 | | $ | 15,733,450 | |
SUMMARY OF CASH FLOWS | | | | | | | |
| (unaudited) | | | | | | | |
| | | Three Months Ended |
| | | September 30 |
| | | 2006 | | | 2005 | |
| | | (in thousands) |
| Operating activities | | | | | | | |
| Net earnings | | $ | 402,745 | | $ | 186,338 | |
| Depreciation | | | 171,125 | | | 164,173 | |
| Other - net | | | (2,653 | ) | | (161,882 | ) |
| Changes in operating assets and liabilities | | | (486,642 | ) | | 216,401 | |
| Total Operating Activities | | | 84,575 | | | 405,030 | |
| Investing Activities | | | | | | | |
| Purchases of property, plant and equipment | | | (251,517 | ) | | (157,422 | ) |
| Net assets of businesses acquired | | | (20,195 | ) | | (57,124 | ) |
| Other investing activities | | | (44,422 | ) | | (62,905 | ) |
| Total Investing Activities | | | (316,134 | ) | | (277,451 | ) |
| Financing Activities | | | | | | | |
| Long-term debt borrowings | | | 9,933 | | | 598,624 | |
| Long-term debt payments | | | (42,226 | ) | | (102,236 | ) |
| Net borrowings under lines of credit | | | 167,797 | | | 56,134 | |
| Purchases of treasury stock | | | (54 | ) | | (18 | ) |
| Cash dividends | | | (65,709 | ) | | (55,491 | ) |
| Proceeds from exercises of stock options | | | 7,456 | | | 7,825 | |
| Total Financing Activities | | | 77,197 | | | 504,838 | |
| Increase (decrease) in cash and cash equivalents | | | (154,362 | ) | | 632,417 | |
| Cash and cash equivalents - beginning of period | | | 1,112,853 | | | 522,420 | |
| Cash and cash equivalents - end of period | | $ | 958,491 | | $ | 1,154,837 | |
