PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-44
ARCHER-DANIELS-MIDLAND COMPANY
(Exact name of registrant as specified in its charter)
Delaware 41-0129150
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
4666 Faries Parkway Box 1470 Decatur, Illinois 62525
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code217-424-5200
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___.
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, no par value--326,801,908 shares
(December 31, 1993)
1
PAGE 2
PART I - FINANCIAL INFORMATION
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
THREE MONTHS ENDED
DECEMBER 31,
1993 1992
-------------------------
(In thousands, except
per share amounts)
Net sales and other operating income $2,821,561 $2,547,483
Cost of products sold and other
operating
costs 2,499,224 2,223,506
--------- ----------
Gross Profit 322,337 323,977
Selling, general and administrative 90,793 84,130
expenses
--------- ----------
Earnings From Operations 231,544 239,847
Other income (expense) (9,131) (6,853)
--------- ---------
Earnings Before Income Taxes 222,413 232,994
Income taxes 76,354 77,618
--------- ---------
Net Earnings $ 146,059 $ 155,376
========= =========
Average number of shares outstanding 330,400 342,763
Net earnings per common share $.44 $.45
Dividends per common share $.025 $.024
See notes to consolidated financial statements
2
PAGE 3
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
SIX MONTHS ENDED
DECEMBER 31,
1993 1992
--------------------
(In thousands, except
per share amounts)
Net sales and other operating income $5,435,189 $4,931,960
Cost of products sold and other
operating costs 4,889,715 4,346,693
--------- ---------
Gross Profit 545,474 585,267
Selling, general and administrative 174,038 163,180
expenses
--------- ---------
Earnings From Operations 371,436 422,087
Other income (expense) (24,130) (759)
--------- ---------
Earnings Before Income Taxes and
Cumulative Effect of Accounting 347,306 421,328
Changes
Income taxes 132,184 140,349
--------- ---------
Earnings Before Cumulative Effect of
Accounting Changes 215,122 280,979
Cumulative effect of accounting changes - 33,018
--------- ---------
Net Earnings $ 215,122 $ 313,997
========= =========
Average number of shares outstanding 333,152 342,693
Earnings per common share
Before cumulative effect of accounting
changes $.65 $.82
Cumulative effect of accounting - .10
changes
---- ----
Net Earnings $.65 $.92
==== ====
Dividends per common share $.049 $.047
See notes to consolidated financial statements.
3
PAGE 4
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
DECEMBER 31, JUNE 30,
1993 1993
--------------------------
(In thousands)
ASSETS
Current Assets
Cash and cash equivalents $257,773 $
386,483
Marketable securities 964,713 1,481,83
1
Receivables 867,444 824,882
Inventories 1,695,60 1,131,78
7 7
Prepaid expenses 101,885 96,751
-------- --------
- -
Total Current Assets 3,887,42 3,921,73
2 4
Investments and Other Assets
Long-term marketable securities 1,056,44 872,265
9
Investments in and advances to 283,476 331,672
affiliates
Other assets 78,906 63,606
-------- --------
- -
1,418,83 1,267,54
1 3
Property, Plant and Equipment
Agricultural processing 2,928,88 2,773,46
3 2
Transportation 426,469 441,372
-------- --------
- -
3,355,35 3,214,83
2 4
-------- --------
- -
$8,661,605 $8,404,1
11
======== ========
= =
See notes to consolidated financial statements.
4
PAGE 5
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
DECEMBER 31, JUNE 30,
1993 1993
--------------------------
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 73,638 $ -
Accounts payable 848,924 555,514
Accrued expenses and taxes 435,845 373,431
Current maturities of long-term debt 28,301 31,286
--------- ---------
Total Current Liabilities 1,386,708 960,231
Long-Term Debt
Agricultural processing 1,778,659 1,766,957
Transportation 222,862 272,186
--------- ---------
2,001,521 2,039,143
Deferred Credits 555,293 521,486
Shareholders' Equity
Common stock 3,022,874 3,366,622
Reinvested earnings 1,695,209 1,516,629
--------- ---------
4,718,083 4,883,251
--------- ---------
$8,661,605 $8,404,111
========= =========
See notes to consolidated financial statements.
5
PAGE 6
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED
DECEMBER 31,
1993 1992
--------------------------
(In thousands)
Operating Activities
Net earnings $ 215,122$ 313,997
Adjustments to reconcile to net cash
provided by operations
Cumulative effect of accounting changes,
net of tax - (33,018)
Depreciation and amortization 171,050 160,750
Deferred income taxes 28,210 10,156
Amortization of long-term debt discount 9,480 8
,203
Other (11,473) (266)
Changes in operating assets and liabilities
Receivables (9,290) (45,137)
Inventories (540,325) (365,708)
Prepaid expenses (4,684) (28,570)
Accounts payable, accrued expenses
and taxes 303,121 119,278
--------- ---------
Total Operating Activities 161,211 139,685
Investing Activities
Purchases of property, plant and equipment (232,626) (208,4
22)
Business acquisitions (63,550) (126,987)
Investments in and advances to affiliates 5,578 (4,131)
Purchases of marketable securities (1,337,594) (758,218)
Proceeds from sales of marketable securities 1,685,157 678,6
01
Purchases of treasury stock (355,223) (12,440)
--------- ---------
Total Investing Activities (298,258) (431,597)
Financing Activities
Long-term debt borrowings 5,155 1,614
Long-term debt payments (53,703) (15,526)
Net borrowings under line of credit agreements 73,638
71,024
Cash dividends and other (16,753) (14,208)
--------- ---------
Total Financing Activities 8,337 42,904
--------- ---------
Decrease In Cash and Cash Equivalents (128,710) (249,008)
Cash and Cash Equivalents Beginning of Period 386,483 964,
360
--------- ---------
Cash and Cash Equivalents End of Period$ 257,773 $ 715,352
========= =========
See notes to consolidated financial statements.
6
TABLE 7
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.The accompanying unaudited consolidated financial
statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes
required by generally accepted accounting principles for
complete financial statements. In the opinion of
management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair
presentation have been included. Operating results for
the quarter and six months ended December 31, 1993 are
not necessarily indicative of the results that may be
expected for the year ending June 30, 1994. For further
information, refer to the consolidated financial
statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended
June 30, 1993.
Note 2. Other Income (Expense)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1993 1992 1993 1992
-------------------------------------
(In thousands) (In thousands)
Investment income $ 27,396 $ 20,074$ 54,334 $ 55,024
Interest expense (42,821) (36,578) (86,222) (72,289)
Gain (loss) on marketable
securities transactions 334 249 1,604 9,647
Other, including equity in
earnings of affiliates 5,960 9,402 6,154 6,859
-------- ---------------- --------
$ (9,131) $ (6,853)$(24,130)$ (759)
======== ================ ========
Note 3. Per Share Data
All references to share and per share information have
been adjusted for the 5 percent stock dividend paid
September 20, 1993.
Note 4. Accounting Changes
Results for the six months ended December 31, 1992 have
been restated for the cumulative effect of the adoption of
FASB Statements No. 106 and No. 109 resulting in a net credit
of $33 million. Results for the quarter and six months ended
December 31, 1992 were also restated for the current year
effect of the accounting change for FASB Statement No. 106.
7
PAGE 8
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales and other operating income increased 11 percent for
the quarter and 10 percent in the six months compared to a year
ago due primarily to higher average selling prices of most
processed products and to a lesser extent volume increases in
corn and wheat products.
Gross profits decreased from $324 million to $322 million for
the quarter and from $585 million to $545 million for the six
months compared to last year. The effect of commodity price
increases on LIFO inventory valuations decreased gross profit
$35 million in the quarter and $41 million in the six months
compared to decreased gross profit of $4 million and $1 million
for the comparable periods of a year ago. For the six months,
the negative effect on operations of the widespread Midwest
flooding also contributed significantly to the decrease in gross
profit. For the quarter and six months, these decreases were
partially offset by increased gross profits from oilseed
processing operations which experienced better market conditions
resulting in favorable processing margins.
Selling, general and administrative expenses increased 8 percent
to $91 million for the quarter and increased 7 percent to $174
million for the six months compared to a year ago primarily
reflecting general cost increases.
The decrease in other income for the quarter resulted primarily
from increased interest expense due to higher levels of long-
term debt borrowings and decreased equity in earnings of non-
consolidated affiliates. This decrease was partially offset by
increased investment income. For the six months, the decrease
in other income was due to increased interest expense and
decreased gains on marketable securities transactions.
Income taxes for the quarter and six months decreased due to
lower pretax earnings. These decreases were partially offset by
the increase in the United States federal corporate income tax
rate to 35%. For the six months, the increase in the federal
corporate income tax rate also resulted in increased income tax
reserves and a non-recurring income tax charge of $14 million.
The effects of the change in the federal corporate income tax
rate increased the Company's effective income tax rate to 34
percent for the quarter and 38 percent for the six months
compared to a rate of 33 percent for the comparable periods of a
year ago.
Results for fiscal 1993 have been restated for the cumulative
effect of the adoption of FASB Statements No. 106 and No. 109
resulting in a net credit of $33 million for the six months
ended December 31, 1993. Results for the first two quarters of
fiscal 1993 have also been restated, net of tax, for the current
year effect of the accounting change for FASB Statement No. 106.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended December 31, 1993, the Company's
cash and marketable securities net of short-term debt decreased
$535 million to $2.2 billion, working capital decreased $461
million to $2.5 billion and net worth decreased $165 million to
$4.7 billion. These decreases reflect investments in property,
plant and equipment expansions, business acquisitions, and
purchases of the Company's common stock. The Company's ratio of
long-term liabilities to total capital at December 31, 1993 was
approximately 28 percent.
8
PAGE 9
PART II - OTHER INFORMATION
Item 4. Submission of matters to a vote of Security
Holders:
The information required in response to this
item is contained in the Company's proxy statement
dated September 17, 1993 previously filed with the
Commission and is incorporated herein by
reference.
Proxies for the Annual Meeting were solicited
pursuant to Regulation 14. There was no
solicitation in opposition to the Board of Director
nominees as listed in the proxy statement and all
of such nominees were elected.
Item 6. Exhibits and Reports on Form 8-K
a) Notice of annual meeting and proxy
statement dated September 17, 1993
incorporated as an exhibit herein by
reference.
b) A Form 8-K was not filed during the
quarter ended December 31, 1993.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ARCHER-DANIELS-MIDLAND
COMPANY
D. J. Schmalz
Vice President, Controller
and Chief Financial Officer
R. P. Reising
Vice President, Secretary and
General Counsel
Dated: February 9, 1994
9