DECATUR, Ill., Nov. 4 /PRNewswire-FirstCall/ -- Archer Daniels Midland
Company (NYSE: ADM) today announced record quarterly net earnings of $ 1.05
billion for the quarter ended September 30, 2008, up 138 % from the period a
year ago. Net sales increased 65 % to $ 21.16 billion.
"This record quarter again demonstrates the ability of our people to
utilize our integrated global network and financial strength to capitalize on
opportunities and further affirms our business model and strategy," said
Chairman of the Board and Chief Executive Officer Patricia Woertz. "Our
strong balance sheet and credit rating provide us with the flexibility to
access the most cost-efficient credit markets. Our market acumen coupled with
this financial strength enables us to recognize and promptly act upon
opportunities when they arise."
> Net earnings for the quarter ended September 30, 2008 increased
138 % to $ 1.05 billion - $ 1.63 per share from
$ 441 million - $ .68 per share last year.
> Net sales and other operating income increased 65 % to
$ 21.16 billion for the quarter ended September 30, 2008, due
principally to higher average selling prices resulting primarily
from year-over-year increases in underlying commodity costs.
> Segment operating profit for the quarter increased 48 % to
$ 1.18 billion from $ 797 million last year.
* Oilseeds Processing operating profit increased on improved
global crushing and origination margins, improved margins for
value-added products and increased equity earnings of our Asian
affiliates.
* Corn Processing operating profit decreased due principally to
sharply higher net corn and energy costs partially offset by
increased sales volumes and average selling prices for
sweeteners and starches, ethanol and lysine.
* Agricultural Services operating profit increased due
principally to improved margins resulting from opportunities
created by market volatility, global shifts in sources of grain
supplies and the delayed US harvest.
* Other operating profit increased due principally to improved
cocoa processing volumes and margins and improved wheat
processing margins.
> Financial Highlights
(Amounts in millions, except per share data and percentages)
THREE MONTHS ENDED
9/30/2008 9/30/2007 % CHANGE
Net sales and other operating
income $21,160 $12,828 65%
Segment operating profit $1,176 $797 48%
Net earnings $1,050 $441 138%
Earnings per share $1.63 $.68 140%
Average number of shares
outstanding 645 647 -
Discussion of Operations
Net sales and other operating income increased 65 % to $ 21.16 billion due
principally to higher selling prices resulting primarily from sharp rises in
underlying commodity costs and, to a lesser extent, foreign exchange
translation impacts. Sales volumes were comparable.
A summary of first quarter segment operating profit and net earnings is as
follows:
Three months ended
September 30
2008 2007 Change
Oilseeds Processing $510 $209 $301
Corn Processing 118 253 (135)
Agricultural Services 428 229 199
Other 120 106 14
Segment operating profit 1,176 797 379
Corporate 318 (150) 468
Earnings before income taxes 1,494 647 847
Income taxes (444) (206) (238)
Net earnings $ 1,050 $441 $609
Net earnings increased $ 609 million due principally to a $ 379 million
increase in segment operating profit and from the positive impact on Corporate
results of the change in LIFO inventory valuations. In addition, income taxes
increased due principally to increased pretax earnings, partially offset by a
decreased effective tax rate resulting from changes in the geographic mix of
pretax earnings.
Oilseeds Processing Operating Profit
Three months ended
September 30
2008 2007 Change
Crushing and origination $339 $131 $208
Refining, packaging, biodiesel,
and other 106 62 44
Asia 65 16 49
Total Oilseeds Processing $510 $209 $301
Oilseeds Processing operating profit increased $ 301 million to
$ 510 million from $ 209 million last year. Crushing and origination results
increased $ 208 million due principally to improved global crush margins
primarily related to favorable raw material positioning. Origination margins
increased in Europe and South America and fertilizer results improved in South
America due principally to increased sales volumes. Refining, packaging,
biodiesel and other results increased $ 44 million due principally to improved
refining margins and improved biodiesel margins in Europe and South America.
In addition, biodiesel sales volumes in South America increased due to the
recently-opened plant in Rondonopolis, Brazil. Asia results increased
$ 49 million due principally to increased equity earnings related to our
investment in Wilmar International Ltd.
Corn Processing Operating Profit
Three months ended
September 30
2008 2007 Change
Sweeteners and starches $65 $167 $(102)
Bioproducts 53 86 (33)
Total Corn Processing $118 $253 $(135)
Corn Processing operating profit decreased $ 135 million to $ 118 million
from $ 253 million last year. Sweeteners and Starches operating profit
decreased $ 102 million to $ 65 million due principally to sharply higher net
corn and energy costs, partially offset by increased sales volumes and higher
average selling prices. Bioproducts operating profit decreased $ 33 million to
$ 53 million due principally to higher net corn and energy costs partially
offset by higher average selling prices and increased sales volumes for
ethanol and lysine. Net corn costs were negatively impacted this quarter by
mark-to-market losses on corn futures and options used to economically hedge
sales obligations.
Agricultural Services Operating Profit
Three months ended
September 30
2008 2007 Change
Merchandising and handling $385 $185 $200
Transportation 43 44 (1)
Total Agricultural Services $428 $229 $199
Agricultural Services results increased $ 199 million to $ 428 million due
principally to improved global merchandising and handling margins resulting
from opportunities created by volatile commodity and freight market
conditions, global shifts in the sources of grain supplies and the delayed
U.S. harvest. Transportation results were similar as lower barge freight
volumes and increased operating costs were partially offset by increased barge
freight rates.
Other Operating Profit
Three months ended
September 30
2008 2007 Change
Wheat, cocoa and malt $103 $38 $65
Financial 17 68 (51)
Total Other $120 $ 106 $14
Other operating profit increased $ 14 million due principally to improved
operating margins in wheat and cocoa, higher equity earnings of affiliates and
increased sales volumes of cocoa and chocolate products partially offset by
decreased interest income from the Company's brokerage services business and
reduced income from the Company's managed fund investments. Wheat, cocoa and
malt includes one-time gains of $ 9 million related to the disposal of the
Company's Malt business.
Corporate Results
Three months ended
September 30
2008 2007 Change
LIFO income/(expense) $453 $(83) $536
Investment income/(expense) (19) 46 (65)
Loss on security transactions (9) (2) (7)
Corporate costs (94) (90) (4)
Other (13) (21) 8
Total Corporate $318 $(150) $468
Corporate results increased $ 468 million due principally to a LIFO credit
of $ 453 million compared to a LIFO charge of $ 83 million last year.
Investment income/(expense) decreased $ 65 million primarily due to increased
interest expense.
Conference Call Information
Archer Daniels Midland Company will host a conference call and audio Web
cast at 8:00 a.m. Central Time on Tuesday, November 4, 2008 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 via the
Internet or to download the slide presentation, go to:
http://www.admworld.com/webcast. To listen by telephone, dial 800-599-9795 or
617-786-2905; the access code is 35756541. Replay of the call will be
available beginning on November 4, 2008, at 10:00 a.m. Central Time and ending
November 11, 2008. To listen to the replay by telephone, dial 888-286-8010 or
617-801-6888; the access code is: 14100301. To listen to the replay online,
visit http://www.admworld.com/webcast.
Every day, the 27,000 people of Archer Daniels Midland Company (NYSE: ADM)
turn crops into renewable products that meet the demands of a growing world.
At more than 230 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, 2008, were $70
billion. For more information about our Company and our products, visit
http://www.admworld.com.
(Financial Tables Follow)
November 4, 2008
Archer Daniels Midland Company
Consolidated Statements of Earnings
(unaudited)
Three months ended
September 30
2008 2007
(in millions, except per
share amounts)
Net sales and other operating income $21,160 $12,828
Cost of products sold 19,293 11,898
Gross profit 1,867 930
Selling, general and administrative expenses 409 354
Other income - net (36) (71)
Earnings before income taxes 1,494 647
Income taxes 444 206
Net earnings $1,050 $441
Diluted earnings per common share $1.63 $.68
Average number of shares outstanding 645 647
Other income - net consists of:
Interest expense $129 $88
Investment income (54) (63)
Net gain on marketable securities transactions (9) (15)
Equity in earnings of unconsolidated affiliates (123) (85)
Other - net 21 4
$(36) $(71)
November 4, 2008
Archer Daniels Midland Company
Segment Operating Analysis
(unaudited)
Three months ended
September 30
2008 2007
(in millions)
Net sales and other operating income
Oilseeds Processing $7,772 $4,610
Corn Processing 2,241 1,521
Agricultural Services 9,569 5,540
Other 1,578 1,157
Total net sales and other operating income $21,160 $12,828
Three months ended
September 30
2008 2007
(in millions)
Segment operating profit (loss)
Oilseeds Processing (1) (4) $510 $209
Corn Processing (1) 118 253
Agricultural Services (4) 428 229
Other (1) (3) (4) 120 106
Total segment operating profit 1,176 797
Corporate (2) 318 (150)
Earnings before income taxes $1,494 $647
Three months ended
September 30
2008 2007
(in 000s metric tons)
Processing volumes
Oilseeds Processing 7,025 7,185
Corn Processing 4,589 4,444
Wheat, cocoa and malt 1,877 2,144
Total processing volumes 13,491 13,773
(1) Includes asset impairment charges of $ 3 million, $ 2 million and
$ 1 million in Oilseeds, Corn and Other, respectively, for the
quarter ended September 30, 2007. There were no asset impairment
charges for the quarter ended September 30, 2008.
(2) Includes realignment charges of $ 23 million for the quarter ended
September 30, 2007. There were no realignment charges for the
quarter ended September 30, 2008.
(3) Includes net gains on securities of $ 15 million for the quarter
ended September 30, 2007 and $9 million for the quarter ended
September 30, 2008.
(4) Includes gain on asset and business disposals of $ 3 million,
$ 2 million and $ 5 million in Oilseeds, Agricultural Services and
Other, respectively, for the quarter ended September 30, 2008.
November 4, 2008
Archer Daniels Midland Company
Summary of Financial Condition
(unaudited)
September 30 June 30
2008 2008
(in millions)
NET INVESTMENT IN
Cash, cash equivalents and short-term
marketable securities $2,985 $1,265
Working capital (excluding cash, cash
equivalents and short-term marketable
securities) 8,739 12,924
Property, plant, and equipment 7,155 7,125
Investments in and advances to affiliates 2,752 2,773
Long-term marketable securities 641 590
Other non-current assets 1,085 1,113
$23,357 $25,790
FINANCED BY
Short-term debt $707 $3,123
Long-term debt, including current maturities 7,798 7,922
Deferred liabilities 1,319 1,255
Shareholders' equity 13,533 13,490
$23,357 $25,790
Summary of Cash Flows
(unaudited)
Three Months Ended
September 30
2008 2007
(in millions)
Operating Activities
Net earnings $1,050 $441
Depreciation and asset abandonments 177 185
Other - net (74) 17
Changes in operating assets and liabilities 3,527 (1,853)
Total Operating Activities 4,680 (1,210)
Investing Activities
Purchases of property, plant and equipment (483) (359)
Proceeds from sales of businesses 236 8
Net assets of businesses acquired (24) (5)
Other investing activities (28) 132
Total Investing Activities (299) (224)
Financing Activities
Long-term debt borrowings 102 17
Long-term debt payments (15) (39)
Net borrowings under lines of credit (2,570) 2,041
Purchases of treasury stock (100) (60)
Cash dividends (84) (74)
Other 8 7
Total Financing Activities (2,659) 1,892
Increase in cash and cash equivalents 1,722 458
Cash and cash equivalents - beginning of period 810 663
Cash and cash equivalents - end of period $2,532 $1,121
