EX-99.1 2 exhibit991.htm PRESS RELEASE exhibit991.htm


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Archer Daniels Midland Company
4666 Faries Parkway
Decatur, IL  62526
 

  News Release
   
February 1, 2011
FOR IMMEDIATE RELEASE

ADM REPORTS 30 PERCENT INCREASE IN SECOND-QUARTER EPS
Strong performance from all businesses drove earnings to $ 732 million or $ 1.14 per share

Archer Daniels Midland Company (NYSE: ADM) today reported second-quarter net earnings of $ 732 million and record quarterly segment operating profit of $ 1.4 billion for the quarter ended December 31, 2010, up $ 165 million and $ 392 million, respectively, from the same period one year earlier.
 
•
ADM earned $ 1.14 diluted EPS, a 30 percent increase versus last year’s $ 0.88 second quarter.
•
Segment operating profit of $ 1.4 billion was a record, up 40 percent from the same period in the prior year.
•
Oilseeds Processing profit declined $ 27 million as improved results from operations were more than offset by mark-to-market timing effects.
•
Corn Processing profit increased $ 109 million on favorable corn ownership, increased ADM ethanol production and strong export sweetener demand.
•
Agricultural Services results increased $ 276 million as ADM was well positioned to meet strong global grain demand and shipped record volumes through its U.S. origination and export network.
 
“The ADM team delivered outstanding performance across the board, resulting in record operating profit. Amid strong demand and regional dislocations, we used our vast global network to deliver for our customers and shareholders,” said Patricia Woertz, ADM chairman and CEO. “Looking ahead, global markets remain dynamic. In this environment, we use ADM’s exceptional capabilities, our unique global asset base and the insights of our team to drive value and to serve vital needs.”

Financial Highlights
 
(Amounts in millions, except per share data)
 
Quarter Ended
December 31
      
Six Months Ended
December 31
      
 
2010
  
2009
    
Change
  
2010
  
2009
    
Change
  
Segment operating profit
   $ 1,362     $ 970     $ 392     $ 2,127     $ 1,744     $ 383  
Net earnings
   $ 732     $ 567     $ 165     $ 1,077     $ 1,063     $ 14  
Diluted earnings per share
   $ 1.14     $ 0.88     $ 0.26     $ 1.68     $ 1.65     $ 0.03  
Average shares outstanding
     641       645               641       644          


 
 
 
 

A summary of segment operating profit and net earnings follows:

   
Quarter ended
          
Six months ended
        
   
December 31
          
December 31
        
   
2010
    
2009
    
Change
    
2010
    
2009
    
Change
  
   
(in millions)
  
                                     
Oilseeds Processing
   $ 325     $ 352     $ (27 )   $ 633     $ 636     $ (3 )
Corn Processing
     399       290       109       740       478       262  
Agricultural Services
     426       150       276       558       325       233  
Other
     212       178       34       196       305       (109 )
Segment operating profit
     1,362       970       392       2,127       1,744       383  
Corporate
     (364 )     (186 )     (178 )     (667 )     (243 )     (424 )
Earnings before income
taxes
     998       784       214       1,460       1,501       (41 )
Income taxes
     (269 )     (223 )     (46 )     (389 )     (443 )     54  
Net earnings including
  noncontrolling interests
     729       561       168       1,071       1,058       13  
                                                 
Less: Net earnings (losses)
  attributable to noncontrolling
  interests
     (3 )     (6 )       3       (6 )     (5 )     (1 )
                                                 
Net earnings
   $ 732     $ 567     $ 165     $ 1,077     $ 1,063     $ 14  


Discussion of Operations

Net earnings for the second quarter of $ 732 million increased $ 165 million due to a $ 392 million increase in segment operating profit. This increase was partially offset by changes in LIFO inventory valuations, included in corporate, caused by higher agricultural commodity prices. Earnings before income taxes include a LIFO charge of $ 254 million this quarter, or $ 0.25 per share, compared to a LIFO charge of $ 54 million last year, or $ 0.05 per share. The company’s effective income tax rate for the quarter was 27 percent, comparable to the prior year’s second quarter rate of 28 percent.


 
 
 
 
 
Oilseeds Processing

Oilseeds operating profit in the second quarter declined $ 27 million to $ 325 million.

Crushing and origination operating profit increased $ 7 million to $ 200 million for the quarter. Globally, ADM’s crushing volumes were essentially flat compared to the year-ago quarter. ADM’s acquisition of the controlling interest in Golden Peanut, and the resulting revaluation, generated a pretax gain of $ 71 million. South American results strengthened on improved fertilizer and grain origination income. European results were lower due to mark-to-market timing effects related to substantial increases in commodity prices, effects that were partially offset by improved margins, including the impact of favorable softseed positioning.

Refining, packaging, biodiesel and other generated a profit of $ 78 million for the quarter, similar to prior year results.

Oilseeds results in Asia declined $ 36 million to $ 47 million for the quarter, reflecting ADM’s share of the weaker results from its equity investee, Wilmar International Limited.

Corn Processing

For the quarter, corn processing operating profit increased $ 109 million to a profit of $ 399 million, enhanced by favorable corn ownership positions. Corn processing volumes were up 24 percent, reflecting the ramp-up of the company’s two new dry mills.

Sweeteners and starches operating profit decreased $ 52 million from the prior year to $ 119 million, due to lower average selling prices and higher net corn costs. Sales volumes were up due to improved export sweetener shipments and stronger U.S. demand for industrial starches.

Bioproducts profit in the quarter rose $ 161 million to $ 280 million, driven by improved ethanol margins and volumes, and by stronger lysine margins.

Agricultural Services

Agricultural Services operating profit increased $ 276 million to $ 426 million for the second quarter.

Merchandising and handling profit increased $ 273 million to $ 376 million on strong results from global merchandising operations and on record ADM export volumes from the United States.

Earnings from transportation operations improved on higher barge-freight rates and volumes.


 
 
 
 
 
Other

In the second quarter, profits from ADM’s Other business units increased $ 34 million to $ 212 million.

In Other processing, profits in wheat milling and cocoa operations were similar to last year’s strong results.

Other financial results increased $ 33 million mainly due to reduced provisions in the company’s captive insurance subsidiary.

Corporate Results

Corporate results decreased $ 178 million principally due to a $ 200 million change in LIFO reserves, higher expense for the elimination of minority interests, and higher corporate interest. Partially offsetting these items were $ 55 million of unrealized gains on interest rate swaps.

Current Market Conditions

Global supplies of corn, soybeans, canola and rapeseed remain dynamic. The global supply of wheat is ample, though there are some regional dislocations and quality issues. South American farmers have begun harvesting their crops. In North America, farmers are considering planting decisions.

Globally, demand for crops and processed products remains strong. Global demand for protein meal is being led by good demand from Asia. The one-year extensions of the blenders’ credits and the U.S. EPA’s recent decisions on enhanced ethanol blending are supportive of biofuels. U.S. corn-based ethanol remains the most competitive ethanol in the global market. Mexican demand for corn sweetener continues to be strong.

 
 
 
 

Conference Call Information

ADM will host a conference call and audio webcast at 8:30 a.m. Central Time on Tuesday, Feb. 1, 2011, to discuss financial results and provide a company update. A financial summary slide presentation will be available to download approximately 60 minutes prior to the call. To listen to the call online or to download the slide presentation, go to www.adm.com/webcast. To listen by telephone, dial 866-362-4829 or 617-597-5346; the access code is 66596395.  Replay of the call will be available from 12:30 p.m. Central Time on Feb. 1 to Feb. 8, 2011. To listen to the replay by telephone, dial 888-286-8010 or 617-801-6888; the access code is 18889828. To listen to the replay online, visit www.adm.com/webcast.

About ADM

Every day, the 29,000 people of Archer Daniels Midland Company (NYSE: ADM) turn crops into renewable products that meet the demands of a growing world. At more than 240 processing plants, we convert corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses. We operate the world’s premier crop origination and transportation network, connecting crops and markets in more than 60 countries. Our global headquarters is in Decatur, Illinois, and our net sales for the fiscal year ended June 30, 2010, were $62 billion. For more information about our company and our products, visit www.adm.com.
 
 
Contacts
  
   
Media:  Investors:
David Weintraub
Dwight Grimestad
Director, External Communications
Vice President, Investor Relations
217/424-5413
217/424-4586

 
 
(Financial Tables Follow)

 
 
 
 
 
 
Segment Operating Analysis
(unaudited)
 
   
Quarter ended
    
Six months ended
  
   
December 31
    
December 31
  
   
2010
    
2009
    
2010
    
2009
  
   
(in ‘000s metric tons)
  
Processing volumes
                        
Oilseeds Processing
     7,834       7,799       14,909       14,172  
Corn Processing
     5,908       4,767       11,742       9,388  
Wheat and cocoa
     1,819       1,874       3,704       3,784  
Total processing volumes
     15,561       14,440       30,355       27,344  

             
   
Quarter ended
    
Six months ended
  
   
December 31
    
December 31
  
   
2010
    
2009
    
2010
    
2009
  
   
(in millions)
  
Net sales and other operating income
                        
Oilseeds Processing
   $ 6,220     $ 4,880     $ 12,680     $ 11,238  
Corn Processing
     2,485       2,029       4,663       3,945  
Agricultural Services
     10,757       7,640       17,291       12,962  
Other
     1,468       1,364       3,095       2,689  
Total net sales and other operating
   income
   $ 20,930     $ 15,913     $ 37,729     $ 30,834  





 
 
 
 

Segment Operating Profit
(unaudited)
 
   
Quarter ended
December 31
          
Six months ended
December 31
        
   
2010
    
2009
    
Change
    
2010
    
2009
    
Change
  
   
(in millions)
  
                                     
 
Oilseeds Processing Operating Profit
                                  
Crushing and origination
   $ 200     $ 193     $ 7     $ 376     $ 328     $ 48  
Refining, packaging, biodiesel
  and other
     78       76       2       154       146       8  
Asia
     47       83       (36 )     103       162       (59 )
    Total Oilseeds Processing
   $ 325     $ 352     $ (27 )   $ 633     $ 636     $ (3 )

Corn Processing Operating Profit
 
                                
Sweeteners and starches
   $ 119     $ 171     $ (52 )   $ 265     $ 365     $ (100 )
Bioproducts
     280       119       161       475       113       362  
    Total Corn Processing
   $ 399     $ 290     $ 109     $ 740     $ 478     $ 262  

Agricultural Services Operating Profit
                                  
Merchandising and handling
   $ 376     $ 103     $ 273     $ 479     $ 260     $ 219  
Transportation
     50       47       3       79       65       14  
    Total Agricultural Services
   $ 426     $ 150     $ 276     $ 558     $ 325     $ 233  

Other Operating Profit
                                    
Processing
   $ 160     $ 159     $ 1     $ 186     $ 266     $ (80 )
Financial
     52       19       33       10       39       (29 )
    Total Other
   $ 212     $ 178     $ 34     $ 196     $ 305     $ (109 )

Corporate Results
                                    
LIFO credit (charge)
   $ (254 )   $ (54 )   $ (200 )   $ (377 )   $ 22     $ (399 )
Interest expense - net
     (83 )     (71 )     (12 )     (172 )     (136 )     (36 )
Corporate costs
     (66 )     (70 )     4       (139 )     (139 )     –  
Unrealized gains on interest
   rate swaps
     55       –       55       24       –       24  
Other
     (16 )     9       (25 )     (3 )     10       (13 )
    Total Corporate
   $ (364 )   $ (186 )   $ (178 )   $ (667 )   $ (243 )   $ (424 )




 
 
 
 

Consolidated Statements of Earnings
(unaudited)

   
Quarter ended
    
Six months ended
  
   
December 31
    
December 31
  
   
2010
    
2009
    
2010
    
2009
  
   
(in millions, except per share amounts)
  
                         
Net sales and other operating income
   $ 20,930     $ 15,913     $ 37,729     $ 30,834  
Cost of products sold
     19,696       14,860       35,687       28,808  
Gross profit
     1,234       1,053       2,042       2,026  
Selling, general and administrative expenses     412        358        793        712   
Other (income) expense – net
     (176 )     (89 )     (211 )     (187 )
Earnings before income taxes
     998       784       1,460       1,501  
Income taxes
     (269 )     (223 )     (389 )     (443 )
Net earnings including noncontrolling interests
     729       561       1,071       1,058  
Less: Net earnings (losses) attributable
      to noncontrolling interests
     (3 )     (6 )     (6 )     (5 )
Net earnings attributable to ADM
   $ 732     $ 567     $ 1,077     $ 1,063  
                                 
Diluted earnings per common share
   $ 1.14     $ 0.88     $ 1.68     $ 1.65  
                                 
Average number of shares outstanding
     641       645       641       644  
                                 
                                 
Other (income) expense - net consists of:
                                
Interest expense
   $ 115     $ 105     $ 232     $ 203  
Investment income
     (41 )     (36 )     (65 )     (66 )
Gain related to Golden Peanut
    acquisition
     (71 )     –       (71 )     –  
Equity in (earnings) losses of
unconsolidated affiliates
     (138 )     (139 )     (263 )     (291 )
Unrealized gains on interest rate swaps
     (55 )     –       (24 )     –  
Other – net
     14       (19 )     (20 )     (33 )
    $ (176 )   $ (89 )   $ (211 )   $ (187 )



 
 
 
 



Summary of Financial Condition
(unaudited)
 
 
   
December 31
 2010
    
June 30
2010
  
   
(in millions)
  
NET INVESTMENT IN
            
Working capital
   $ 16,131     $ 10,279  
Property, plant, and equipment
     9,194       8,712  
Investments in and advances to affiliates
     2,975       2,799  
Long-term marketable securities
     823       678  
Other non-current assets
     1,261       1,225  
    $ 30,384     $ 23,693  
                 
FINANCED BY
                
Short-term debt
   $ 5,632     $ 374  
Long-term debt, including current maturities
     7,053       7,174  
Deferred liabilities
     1,795       1,514  
Shareholders’ equity
     15,904       14,631  
    $ 30,384     $ 23,693  
                 


 
 
 
 
 
Summary of Cash Flows
(unaudited)

   
Six Months Ended
  
   
December 31
  
   
2010
    
2009
  
   
(in millions)
  
Operating Activities
            
Net earnings
   $ 1,071     $ 1,058  
Depreciation and amortization
     463       431  
Other – net
     (24 )     171  
Changes in operating assets and liabilities
     (5,593 )     (280 )
Total Operating Activities
     (4,083 )     1,380  
Investing Activities
                
Purchases of property, plant and equipment
     (645 )     (939 )
Net assets of businesses acquired
     (163 )     (57 )
Other investing activities
     (333 )     216  
Total Investing Activities
     (1,141 )     (780 )
Financing Activities
                
Long-term debt borrowings
     35       10  
Long-term debt payments
     (237 )     (36 )
Net borrowings (payments) under lines of credit
     5,179       (140 )
Purchases of treasury stock
     (86 )     –  
Cash dividends
     (192 )     (180 )
Other
     5       8  
Total Financing Activities
     4,704       (338 )
Increase (decrease) in cash and cash equivalents
     (520 )     262  
Cash and cash equivalents - beginning of period
     1,046       1,055  
Cash and cash equivalents - end of period
   $ 526     $ 1,317