 | Archer Daniels Midland Company 4666 Faries Parkway Decatur, Il 62526 |
News Release
| FOR IMMEDIATE RELEASE | July 30, 2007 |
ARCHER DANIELS MIDLAND REPORTS THIRD QUARTER RESULTS
Decatur, IL — July 30, 2007 — Archer Daniels Midland (NYSE: ADM)
► | Net earnings for the year ended June 30, 2007 increased 65 % to a record $ 2.162 billion - $ 3.30 per share from $ 1.312 billion - $ 2.00 per share. Net earnings for the year ended June 30, 2007 includes after tax gains on asset sales of $665 million. |
► | Segment operating profit for the year increased 53 % to a record $ 3.161 billion from $ 2.061 billion last year on improved results from all operating segments. |
“ADM delivered its third consecutive year of record earnings,” said Chairman and CEO Patricia A. Woertz. “Credit goes to the people of ADM, who delivered strong results in all our major business segments and beat both our return and cost targets.”
“We are building out the long term potential of this company. Our realignment and sale of assets are on target. Our strategic capital projects are all on schedule, and we see adequate global crops to meet all needs. We remain very confident in our strategic direction.”
► | Net earnings for the quarter increased $ 545 million to $ 955 million - $ 1.47 per share from $ 410 million - $ .62 per share last year. Net earnings for the quarter ended June 30, 2007 includes after tax gains on asset sales of $ 616 million. |
► | Segment operating profit for the quarter increased $ 515 million to $ 1.152 billion from $ 637 million last year. |
| · | Oilseeds Processing operating profit increased principally due to a gain on the exchange of the Company’s interests in certain Chinese joint ventures for shares in Wilmar International Ltd., the largest agricultural processing business in Asia. |
| · | Corn Processing operating profit declined due primarily to lower ethanol sales volumes and higher net corn costs. |
| · | Agricultural Services operating profit increased principally due to a gain realized upon the sale of the Company’s Agricore United investment. |
| · | Other segment operating profit increased primarily due to improved Financial results. |
►Financial Highlights
(Amounts in thousands, except per share data and percentages)
| | THREE MONTHS ENDED | TWELVE MONTHS ENDED |
| | | 6/30/07 | | | 6/30/06 | | | % CHANGE | | | 6/30/07 | | | 6/30/06 | | | % CHANGE | |
| Net sales and other operating income | $ | 12,214,198 | | $ | 9,547,336 | | | 28% | | $ | 44,018,309 | | $ | 36,596,111 | | | 20% | |
| Segment operating profit | $ | 1,152,491 | | $ | 637,286 | | | 81% | | $ | 3,160,596 | | $ | 2,061,191 | | | 53% | |
| Net earnings | $ | 954,764 | | $ | 410,259 | | | 133% | | $ | 2,161,668 | | $ | 1,312,070 | | | 65% | |
| Earnings per share | $ | 1.47 | | $ | .62 | | | 137% | | $ | 3.30 | | $ | 2.00 | | | 65% | |
Average number of shares outstanding | | 647,709 | | | 658,750 | | | (2)% | | | 655,609 | | | 656,287 | | | - | |
Archer Daniels Midland Company
Page 2
►Discussion of Operations
Net earnings for the year ended June 30, 2007 were $ 2.162 billion, or $ 3.30 per share, compared to $1.312 billion, or $ 2.00 per share, last year. Net earnings for the quarter ended June 30, 2007 were $ 955 million, or $ 1.47 per share, compared to $ 410 million, or $ .62 per share, last year.
Net earnings for the year ended June 30, 2007 include gains on asset sales of $ 1.043 billion ($ 665 million after tax), asset impairment charges of $ 21 million ($ 13 million after tax), LIFO charges of $ 207 million ($129 million after tax) and a charge on debt repurchase of $ 46 million ($ 29 million after tax). Net earnings for the year ended June 30, 2006 include gains on asset sales of $ 62 million ($ 39 million after tax), asset impairment and retirement obligation charges of $ 101 million ($ 81 million after tax), LIFO income of $ 12 million ($ 8 million after tax), Brazilian transactional tax credits of $ 46 million ($ 30 million after tax) and a $ 36 million tax credit related to adjustment of state and federal income taxes.
Net earnings for the quarter ended June 30, 2007 include gains on asset sales of $ 967 million ($ 616 million after tax), asset impairment charges of $ 19 million ($ 12 million after tax), LIFO inventory charges of $ 60 million ($38 million after tax) and a charge on debt repurchase of $ 46 million ($ 29 million after tax). Net earnings for the quarter ended June 30, 2006 include gains on asset sales of $ 28 million ($18 million after tax), asset impairment and retirement obligation charges of $ 59 million ($ 37 million after tax), LIFO charges of $ 1 million ($ 1 million after tax), and Brazilian transactional tax credits of $ 27 million ($ 17 million after tax).
Segment operating profit increased $ 515 million to $ 1.2 billion for the quarter and increased $ 1.1 billion to a record $ 3.2 billion for the year.
Oilseeds Processing operating profit of $ 587 million for the quarter and $ 1.1 billion for the year included a $440 million gain upon the exchange of the Company’s interests in certain Chinese joint ventures for shares in Wilmar International, Ltd., the largest agriculture processing business in Asia. Excluding this gain, Oilseeds Processing operating profit for the quarter decreased $ 48 million to $ 147 million, from last year’s record quarter of $ 195 million. The decline was due principally to a decline in European rapeseed and biodiesel margins and the inclusion in 2006 results of $ 27 million in Brazilian transactional tax credits. Excluding the gain, Oilseeds Processing operating profits for the year increased $ 79 million to a record $ 677 million. The increase was primarily due to improved worldwide soybean crush margins, partially offset by lower softseed and biodiesel processing margins in Europe.
Corn Processing operating results declined $ 45 million to $ 241 million for the quarter from $ 286 million last year. The decline was due principally to higher net corn costs and lower ethanol sales volumes. For the year, operating results increased $ 242 million to a record $ 1.1 billion from $ 877 million last year. The increase was due principally to the higher average selling prices of sweetener and ethanol products partially offset by higher net corn costs.
Agricultural Services operating results of $ 241 million for the quarter included a gain of $ 153 million resulting from the sale of the Company’s interest in Agricore United. Excluding this gain, Agricultural Services results increased $ 5 million to $ 88 million for the quarter. The increase is due primarily to improved global merchandising and handling results partially offset by lower transportation results. For the year, excluding the gain, Agricultural Services results increased $ 87 million to a record $ 362 million from $ 275 million last year. The increase reflects improved global merchandising, handling and transportation operating results.
Other segment operating results increased $ 10 million to $ 83 million for the quarter principally due to improved Financial operating results. For the year, Other segment operating profit increased $ 99 million to $ 409 million from $ 310 million last year. The increase was due principally to a gain of $ 53 million realized upon the sale of the Company’s Arkady food ingredient business and to improved Financial operating results.
Archer Daniels Midland Company
Page 3
Significant components of Corporate results are as follows:
| | | Three months ended | | Twelve months ended | |
| | | June 30, | | | June 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | (in millions) |
| | | | | | | | | | | | | |
| LIFO income (charge) | $ | (60 | ) | $ | (1 | ) | $ | (207 | ) | $ | 12 | |
| Investment income (expense) | | 26 | | | (1 | ) | | 78 | | | (24 | ) |
| Charge on debt repurchase | | (46 | ) | | - | | | (46 | ) | | - | |
| Gain on security transactions | | 363 | | | - | | | 374 | | | 29 | |
| Brazilian transactional tax credit | | - | | | - | | | - | | | 19 | |
| Corporate costs | | (41 | ) | | (57 | ) | | (211 | ) | | (235 | ) |
| Other | | - | | | 4 | | | 5 | | | (7 | ) |
| Total Corporate | $ | 242 | | $ | (55 | ) | $ | (7 | ) | $ | (206 | ) |
Conference Call Information
Archer Daniels Midland will host a conference call and audio Web cast at 8:00 a.m. Central Daylight Time (CDT) on Monday, July 30, 2007 to discuss financial results and provide a Company update. 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 download the slide presentation via the Internet go to: www.admworld.com\webcast. To listen by phone, dial 866-277-1181 or 617-597-5358; the access code is 44694376. Digital replay of the call will be available beginning on July 30, 2007 at 10:00 a.m. CDT and ending on August 6, 2007. To access this replay, dial 888-286-8010 or 617-801-6888; the access code is: 90120095.
Archer Daniels Midland Company (ADM) is the world leader in BioEnergy and has a premier position in the agricultural processing value chain. ADM is one of the world’s largest processors of soybeans, corn, wheat and cocoa. ADM is a leading manufacturer of biodiesel, ethanol, soybean oil and meal, corn sweeteners, flour and other 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, 2007 of $44 billion. Additional information can be found on ADM’s Web site at http://www.admworld.com/
###
Contacts: | |
| Dwight Grimestad |
Vice President - Corporate Communications | Vice President - Investor Relations |
| 217/424-5413 | 217/424-4586 |
(Financial Tables Follow)
ARCHER DANIELS MIDLAND COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(unauadited)
| | | | Three months ended | | Twelve months ended | |
| | | | June 30, | | June 30, | |
| | | | 2007 | | | 2006 | | 2007 | | | 2006 | |
| | | | (in thousands, except per share amounts) | |
| | | | | | | | | | | | | |
| Net sales and other operating income | | $ | 12,214,198 | | | $ | 9,547,336 | | $ | 44,018,309 | | | $ | 36,596,111 | |
| Cost of products sold | | | 11,496,457 | | | | 8,718,433 | | | 40,781,160 | | | | 33,630,297 | |
| Gross profit | | | 717,741 | | | | 828,903 | | | 3,237,149 | | | | 2,965,814 | |
| Selling, general and administrative expenses | | | 293,081 | | | | 296,541 | | | 1,195,164 | | | | 1,192,683 | |
| Other (income) expense – net | | | (969,126 | ) | | | (49,489 | ) | | (1,111,985 | ) | | | (82,119 | ) |
| Earnings before income taxes | | | 1,393,786 | | | | 581,851 | | | 3,153,970 | | | | 1,855,250 | |
| Income taxes | | | 439,022 | | | | 171,592 | | | 992,302 | | | | 543,180 | |
| Net earnings | | $ | 954,764 | | | $ | 410,259 | | $ | 2,161,668 | | | $ | 1,312,070 | |
| Diluted earnings per common share | | $ | 1.47 | | | $ | .62 | | $ | 3.30 | | | $ | 2.00 | |
| Average number of shares outstanding | | | 647,709 | | | | 658,750 | | | 655,609 | | | | 656,287 | |
| | | | | | | | | | | | | | | | | |
Other (income) expense – net consists of: | | | | | | | | | | | | | | | |
| Interest expense | | $ | 110,385 | | | $ | 101,836 | | $ | 433,974 | | | $ | 365,180 | |
| Investment income | | | (65,101 | ) | | | (57,940 | ) | | (256,784 | ) | | | (204,083 | ) |
| Charge on debt repurchase | | | 46,478 | | | | – | | | 46,478 | | | | 4,067 | |
| Net gain on marketable securities | | | (369,594 | ) | | | (11,851 | ) | | (393,838 | ) | | | (39,803 | ) |
(Gain) loss on sales and exchanges of businesses | | | (597,726 | ) | | | (109 | ) | | (649,245 | ) | | | 12,158 | |
Equity in earnings of unconsolidated affiliates | | | (86,031 | ) | | | (60,735 | ) | | (293,607 | ) | | | (174,339 | ) |
| Other – net | | | (7,537 | ) | | | (20,690 | ) | | 1,037 | | | | (45,299 | ) |
| | | | $ | (969,126 | ) | | $ | (49,489 | ) | $ | (1,111,985 | ) | | $ | (82,119 | ) |
| | | | | | | | | | | | | | | | | |
Operating profit (loss) by segment is as follows: | | | | | | | | | | | | | | | |
| Oilseeds Processing (1) (2) (4) | | $ | 587,177 | | | $ | 194,673 | | $ | 1,117,343 | | | $ | 598,415 | |
| Corn Processing | | | | | | | | | | | | | | | |
| Sweeteners and Starches (2) | | | 99,248 | | | | 111,915 | | | 484,985 | | | | 431,662 | |
| Bioproducts (2) (7) | | | 142,070 | | | | 173,961 | | | 634,102 | | | | 445,696 | |
| Total Corn Processing | | | 241,318 | | | | 285,876 | | | 1,119,087 | | | | 877,358 | |
| Agricultural Services (1) (2) | | | 240,833 | | | | 83,253 | | | 515,508 | | | | 275,469 | |
| Other | | | | | | | | | | | | | | | |
| Food, Feed and Industrial (2) (5) | | | 25,055 | | | | 20,228 | | | 213,761 | | | | 159,123 | |
| Financial (6) (7) | | | 58,108 | | | | 53,256 | | | 194,897 | | | | 150,826 | |
| Total Other | | | 83,163 | | | | 73,484 | | | 408,658 | | | | 309,949 | |
| Total segment operating profit | | | 1,152,491 | | | | 637,286 | | | 3,160,596 | | | | 2,061,191 | |
| Corporate (3) (4) (6) (7) | | | 241,295 | | | | (55,435 | ) | | (6,626 | ) | | �� | (205,941 | ) |
| Earnings before income taxes | | $ | 1,393,786 | | | $ | 581,851 | | $ | 3,153,970 | | | $ | 1,855,250 | |
(Footnotes to Financial Table Follows
| (1) | Fiscal 2007 fourth quarter and twelve month results include gains on asset sales of $ 440 million (Oilseeds Processing) and $ 158 million (Agricultural Services). |
| (2) | Fiscal 2007 fourth quarter results include a charge for abandonment and write downs of long-lived assets of: Oilseeds Processing ($ 5 million), Corn Processing - Bioproducts ($ 1 million), and Other – Food, Feed and Industrial ($ 13 million). Fiscal 2007 twelve months results include a charge for abandonment and write downs of long-lived assets of: Oilseeds Processing ($ 5 million), Corn Processing – Bioproducts ($ 1 million), and Other – Food, Feed and Industrial ($ 15 million). Fiscal 2006 fourth quarter results include a charge for abandonment and write downs of long-lived assets and a charge for asset retirement obligations of: Oilseeds Processing ($ 16 million), Corn Processing - Sweeteners and Starches ($ 5 million), Corn Processing – Bioproducts ($ 7 million), Agricultural Services ($ 1 million), Other – Food, Feed and Industrial ($ 30 million). Fiscal 2006 twelve months results include a charge for abandonment and write downs of long-lived assets and a charge for asset retirement obligations of: Oilseeds Processing ($ 20 million), Corn Processing – Sweeteners and Starches ($ 5 million), Corn Processing – Bioproducts ($ 7 million), Agricultural Services ($ 1 million), Other – Food, Feed and Industrial ($ 62 million). |
| (3) | Fiscal 2007 fourth quarter results include a LIFO charge of $ 60 million. Fiscal 2007 twelve month results include a LIFO charge of $ 207 million. Fiscal 2006 fourth quarter results include a LIFO charge of $ 1 million. Fiscal 2006 twelve month results include LIFO income of $ 12 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 2007 twelve month results include a gain of $ 53 million upon the sale of the Company’s Arkady food ingredient business. Fiscal 2006 fourth quarter and twelve month results include a $ 17 million gain from sale of long-lived assets. Fiscal 2006 twelve month 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 month results include gains on securities sales of: Financial ($ 12 million) and Corporate ($ 28 million). |
| (7) | Fiscal 2007 includes gains on securities sales of $ 363 million (Corporate) and $7 million (Financial) for the quarter and $ 374 million (Corporate) and $20 million (Financial) for the twelve months. Fiscal 2006 twelve months results include a charge of $6 million related to the closure of a citric acid plant. |
ARCHER DANIELS MIDLAND COMPANY
SUMMARY OF FINANCIAL CONDITION
(unaudited)
| | | June 30, 2007 | | | June 30, 2006 | |
| | (in thousands) |
| | | | | | | |
| NET INVESTMENT IN | | | | | | |
| Working capital | $ | 7,787,012 | | $ | 6,290,697 | |
| Property, plant and equipment | | 6,009,849 | | | 5,293,032 | |
| Investments in and advances to affiliates | | 2,498,133 | | | 1,985,662 | |
| Long-term marketable securities | | 656,603 | | | 1,110,177 | |
| Other non-current assets | | 831,071 | | | 1,053,882 | |
| | $ | 17,782,668 | | $ | 15,733,450 | |
| | | | | | | |
| FINANCED BY | | | | | | |
| Short-term debt | $ | 467,915 | | $ | 549,419 | |
| Long-term debt, including current maturities | | 4,816,863 | | | 4,130,091 | |
| Deferred liabilities | | 1,244,909 | | | 1,247,060 | |
| Shareholders' equity | | 11,252,981 | | | 9,806,880 | |
| | $ | 17,782,668 | | $ | 15,733,450 | |
| | | | | | | |
| | | | | | | |
SUMMARY OF CASH FLOWS | | | | | | |
| (unaudited) | | | | | | |
| | Twelve Months Ended |
| June 30, |
| | | 2007 | | | 2006 | |
| | (in thousands) |
| Operating activities | | | | | | |
| Net earnings | $ | 2,161,668 | | $ | 1,312,070 | |
| Depreciation | | 700,564 | | | 656,714 | |
| Asset abandonments | | 20,676 | | | 71,264 | |
| Other - net | | (850,490 | ) | | (262,425 | ) |
| Changes in operating assets and liabilities | | (1,729,373 | ) | | (401,582 | ) |
| Total Operating Activities | | 303,045 | | | 1,376,041 | |
| Investing Activities | | | | | | |
| Purchases of property, plant and equipment | | (1,198,025 | ) | | (762,009 | ) |
| Net assets of businesses acquired | | (103,347 | ) | | (182,213 | ) |
| Other investing activities | | 946,015 | | | (124,319 | ) |
| Total Investing Activities | | (355,357 | ) | | (1,068,541 | ) |
| Financing Activities | | | | | | |
| Long-term borrowings | | 1,165,778 | | | 643,544 | |
| Long-term debt payments | | (548,994 | ) | | (265,988 | ) |
| Net borrowings (payments) under lines of credit | | 109,844 | | | 104,548 | |
| Purchases of treasury stock | | (532,866 | ) | | (1,585 | ) |
| Cash dividends | | (280,512 | ) | | (241,995 | ) |
| Other - net | | (91,324 | ) | | 44,409 | |
| Total Financing Activities | | (397,762 | ) | | 282,933 | |
| Increase (decrease) in cash and cash equivalents | | (450,074 | ) | | 590,433 | |
| Cash and cash equivalents beginning of period | | 1,112,853 | | | 522,420 | |
| Cash and cash equivalents end of period | $ | 662,779 | | $ | 1,112,853 | |
