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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 March 31, 1994
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--327,001,530 shares
(March 31, 1994)
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PART I - FINANCIAL INFORMATION
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
1994 1993
(In thousands, except
per share amounts)
Net sales and other operating income $3,010,001 $2,457,142
Cost of products sold and other operating
costs 2,724,343 2,192,274
_________ _________
Gross Profit 285,658 264,868
Selling, general and administrative expenses 92,548 82,249
_________ _________
Earnings From Operations 193,110 182,619
Other income (expense) 5,260 9,303
_________ _________
Earnings Before Income Taxes 198,370 191,922
Income taxes 67,101 62,482
_________ _________
Net Earnings $ 131,269 $ 129,440
========= =========
Average number of shares outstanding 326,905 343,018
Net earnings per common share $ .40 $.38
Dividends per common share $.025 $.024
See notes to consolidated financial statements
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
NINE MONTHS ENDED
MARCH 31,
1994 1993
(In thousands, except
per share amounts)
Net sales and other operating income $8,445,190 $7,389,102
Cost of products sold and other operating
costs 7,614,058 6,538,967
_________ _________
Gross Profit 831,132 850,135
Selling, general and administrative expenses 266,586 245,429
_________ _________
Earnings From Operations 564,546 604,706
Other income (expense) (18,870) 8,544
_________ _________
Earnings Before Income Taxes and
Cumulative Effect of Accounting Changes
545,676
613,250
Income taxes 199,285 202,831
_________ _________
Earnings Before Cumulative Effect of
Accounting Changes
346,391
410,419
Cumulative effect of accounting changes - 33,018
_________ _________
Net Earnings $ 346,391 $ 443,437
========= =========
Average number of shares outstanding 331,288 342,799
Earnings per common share
Before cumulative effect of accounting changes $1.05 $1.20
Cumulative effect of accounting changes - .10
____ ____
Net Earnings $1.05 $1.30
==== ====
Dividends per common share $.074 $.071
See notes to consolidated financial statements
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
MARCH 31, JUNE 30,
1994 1993
(In thousands)
ASSETS
Current Assets
Cash and cash equivalents $ 223,907 $ 386,483
Marketable securities 874,848 1,481,831
Receivables 954,597 824,882
Inventories 1,744,037 1,131,787
Prepaid expenses 125,261 96,751
_________ _________
Total Current Assets 3,922,650 3,921,734
Investments and Other Assets
Long-term marketable securities 980,514 872,265
Investments in and advances to affiliates 295,768 331,672
Other assets 106,361 63,606
__________ _________
1,382,643 1,267,543
Property, Plant and Equipment
Agricultural processing 3,019,749 2,773,462
Transportation 422,994 441,372
_________ _________
3,442,743 3,214,834
_________ _________
$8,748,036 $8,404,111
========= =========
See notes to consolidated financial statements
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
MARCH 31, JUNE 30,
1994 1993
_________________________
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 64,417 $ -
Accounts payable 704,274 555,514
Accrued expenses and taxes 525,144 373,431
Current maturities of long-term debt 27,113 31,286
_________ ________
Total Current Liabilities 1,320,948 960,231
Long-Term Debt
Agricultural processing 1,798,393 1,766,957
Transportation 215,446 272,186
_________ _________
2,013,839 2,039,143
Deferred Credits 553,159 521,486
Shareholders' Equity
Common stock 3,027,688 3,366,622
Reinvested earnings 1,832,402 1,516,629
_________ _________
4,860,090 4,883,251
_________ _________
$8,748,036 $8,404,111
========= ==========
See notes to consolidated financial statements
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
MARCH 31,
1994 1993
(In thousands)
Operating Activities
Net earnings $ 346,391$ 443,437
Adjustments to reconcile to net cash provided
by operations
Cumulative effect of accounting changes,
net of tax - (33,018)
Depreciation and amortization 261,272 243,572
Deferred income taxes 30,785 10,557
Amortization of long-term debt discount 14,436 12,492
Other (32,375) (21,227)
Changes in operating assets and liabilities
Receivables (31,001) (60,894)
Inventories (523,844)(242,517)
Prepaid expenses (27,276) (28,074)
Accounts payable, accrued expenses
and taxes 193,558 97,989
__________________
Total Operating Activities 231,946 422,317
Investing Activities
Purchases of property, plant and equipment(354,545)(299,178)
Business acquisitions (218,370)(128,021)
Investments in and advances to affiliates 5,806 9,888
Purchases of marketable securities(1,573,776)(1,406,071)
Proceeds from sales of marketable securities2,112,661798,791
Purchases of treasury stock (355,225) (12,442)
__________________
Total Investing Activities(383,449)(1,037,033)
Financing Activities
Long-term debt borrowings 11,715 254,491
Long-term debt payments (62,372) (27,575)
Net borrowings under line of credit agreements64,247 63,418
Cash dividends and other (24,663) (22,182)
__________________
Total Financing Activities (11,073) 268,152
__________________
Decrease In Cash and Cash Equivalents (162,576)(346,564)
Cash and Cash Equivalents Beginning of Period 386,483 964,360
__________________
Cash and Cash Equivalents End of Period $ 223,907$ 617,796
==================
See notes to consolidated financial statements
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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 nine months ended March 31, 1994 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 ENDEDNINE MONTHS ENDED
MARCH 31, MARCH 31,
1994 1993 1994 1993
_____________________________________
(In thousands) (In thousands)
Investment income $ 23,511 $ 23,310$ 77,845$ 78,334
Interest expense (45,568) (37,629)(131,790)(109,918)
Gain (loss) on marketable
securities transactions 19,862 16,440 21,466 26,087
Other, including equity in
earnings of affiliates 7,455 7,182 13,609 14,041
______ ______ ______ ______
$ 5,260 $ 9,303$(18,870)$ 8,544
====== ====== ====== ======
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 nine months ended March 31, 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. Results for the quarter and
nine months ended March 31, 1993 were also restated for
the current year effect of the accounting change for
FASB Statement No. 106.
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales and other operating income increased 23 percent for
the quarter and 14 percent for the nine months compared to a
year ago due primarily to higher average selling prices of most
processed products and to a lesser extent volume increases,
including sales of recently acquired companies.
Gross profits increased to $286 million from $265 million for
the quarter reflecting gross profits of recently acquired
companies and increased gross profits of oilseed processing
operations which experienced better market conditions resulting
in favorable processing margins. For the nine months, gross
profits decreased from $850 million to $831 million due
principally to the negative effect on operations of the
widespread Midwest flooding and to the effect of commodity price
changes on LIFO inventory valuations. These decreases were
partially offset by increased gross profits from oilseed
processing operations and recently acquired companies. The
effect of commodity price changes on LIFO inventory valuations
decreased gross profit $5 million in the quarter and $46 million
in the nine months compared to increased gross profit of $5
million and $4 million for the comparable periods of a year ago.
Selling, general and administrative expenses increased 13
percent to $93 million for the quarter and increased 9 percent
to $267 million for the nine months compared to a year ago
primarily reflecting costs of recently acquired companies and
general cost increases.
The decrease in other income for the quarter and nine months
resulted primarily from increased interest expense due to higher
levels of long-term debt borrowings. For the quarter, this
decrease was partially offset by increased gains on marketable
securities transactions.
Income taxes for the quarter increased due to higher pretax
earnings and the increase in the United States federal corporate
income tax rate to 35 percent. For the nine months, income
taxes decreased due to lower pretax earnings. This decrease was
partially offset by the aforementioned income tax rate increase
which 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 37 percent for the nine 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 nine months
ended March 31, 1993. Results for the first three 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.
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LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended March 31, 1994, the Company's cash
and marketable securities net of short-term debt decreased $726
million to $2.0 billion, working capital decreased $360 million
to $2.6 billion and shareholders' equity decreased $23 million
to $4.9 billion. These decreases principally 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 March 31, 1994 was approximately 27 percent.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A Form 8-K was not filed during the quarter
ended March 31, 1994.
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: May 10, 1994
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