(Source: Business Wire)
Archer Daniels Midland Company (NYSE:ADM) today announced earnings of $
567 million and net sales of $ 15.9 billion for the quarter ended
December 31, 2009.
"I'm very pleased with the performance of our people and with our
results this quarter," said Chairman of the Board and Chief Executive
Officer Patricia Woertz. "While our earnings, in total, were
comparable to last year's strong second quarter, the market conditions
and the mix of earnings were markedly different. This, once again,
demonstrates the ability of the ADM team to utilize the geographic scope
and diversity of our asset base to create value for our stockholders."
Net earnings attributable to ADM for the quarter ended December 31,
2009, were $ 567 million or $ .88 per share, down 2 % from last year's
second quarter.
Net sales for the quarter ended December 31, 2009, were $ 15.9
billion, down 5 %. Increased sales volumes this quarter were offset by
lower average selling prices, resulting primarily from year-over-year
decreases in underlying commodity costs.
Segment operating profit for the quarter ended December 31, 2009,
was $ 970 million, up 19 %.
Oilseeds Processing profit increased due to higher volumes and
improved margins.
Corn Processing profit increased on lower net corn costs and
improved bioproducts results.
Agricultural Services profit decreased as merchandising results
were lower.
Other operating profit increased due to improved results from
cocoa and milling and the absence of last year's Gruma and captive
insurance losses.
Financial Highlights
(Amounts in millions, except per share data and percentages)
Quarter Ended Six Months Ended
December 31 December 31
2009 2008 % Change 2009 2008 % Change
Net sales $ 15,913 $ 16,673 (5%) $ 30,834 $ 37,833 (18%)
Segment operating profit $ 970 $ 815 19% $ 1,744 $ 1,991 (12%)
Net earnings attributable to ADM $ 567 $ 578 (2%) $ 1,063 $ 1,623 (35%)
Earnings per share $ 0.88 $ 0.90 (2%) $ 1.65 $ 2.52 (35%)
Average number of shares outstanding 645 643 644 644
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Strategic Investment Activities
To drive earnings growth, the Company advanced its strategy to expand
the size and global reach of its core model:
The Company has started up its ethanol dry mill in Columbus, Nebraska,
adding 300 million gallons of annual capacity.
The Company has brought on line its Clinton, Iowa, cogeneration
facility and started up the boilers at its Columbus, Nebraska,
cogeneration facility. These new facilities will provide
cost-effective process steam and electricity to adjacent corn wet and
dry mills.
The Company's Brazilian JV sugarcane ethanol plant has been completed
and is now operational.
The Company integrated its newly acquired processing plant in Olomouc,
Czech Republic, into its network, improving access to the Central
European market and expanding its origination footprint.
The Company started production at its Hazelton, Pennsylvania, cocoa
plant.
The Company continued construction at its bioplastics plant in
Clinton, Iowa, propylene/ethylene glycol plant in Decatur, Illinois,
and ethanol dry mill in Cedar Rapids, Iowa.
The Company has completed expansion projects at a number of its
existing North American oilseeds processing plants and at its Decatur,
Illinois, corn wet milling plant.
Discussion of Operations
Net sales decreased 5 % to $ 15.9 billion for the quarter and decreased
18 % to $ 30.8 billion for the six months. For the quarter, decreased
average selling prices were offset by increased sales volumes and the
impact of foreign exchange translation. Year-to-date net sales decreased
due principally to lower average selling prices. Average selling prices
decreased in line with year-over-year declines in underlying commodity
costs. Year-to-date total sales volumes were comparable.
A summary of segment operating profit and net earnings is as follows:
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
Oilseeds Processing $ 352 $ 319 $ 33 $ 636 $ 829 $ (193 )
Corn Processing 290 29 261 478 147 331
Agricultural Services 150 462 (312 ) 325 890 (565 )
Other 178 5 173 305 125 180
Segment operating profit 970 815 155 1,744 1,991 (247 )
Corporate (186 ) 2 (188 ) (243 ) 312 (555 )
Earnings before income taxes 784 817 (33 ) 1,501 2,303 (802 )
Income taxes (223 ) (238 ) 15 (443 ) (678 ) 235
Net earnings including noncontrolling interests 561 579 (18 ) 1,058 1,625 (567 )
Less: Net earnings (losses) attributable to noncontrolling interests (6 ) 1 7 (5 ) 2 7
Net earnings attributable to ADM $ 567 $ 578 $ (11 ) $ 1,063 $ 1,623 $ (560 )
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Net earnings attributable to ADM decreased $ 11 million for the quarter
primarily due to a $ 177 million pre-tax decline in Corporate results
related to the change in LIFO inventory valuations partially offset by
increased segment operating profit. Net earnings attributable to ADM
decreased $ 560 million for the six months due to lower segment
operating profit and lower Corporate results arising from a $ 554
million pre-tax change in LIFO inventory valuations. Income taxes
decreased $ 15 million for the quarter and $ 235 million for the six
months due principally to lower pre-tax earnings.
Oilseeds Processing Operating Profit
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
Crushing and origination $ 193 $ 187 $ 6 $ 328 $ 526 $ (198 )
Refining, packaging, biodiesel and other 76 86 (10 ) 146 192 (46 )
Asia 83 46 37 162 111 51
Total Oilseeds Processing $ 352 $ 319 $ 33 $ 636 $ 829 $ (193 )
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Oilseeds Processing operating profit increased $ 33 million for the
quarter and decreased $ 193 million for the six months. Crushing and
origination results increased $ 6 million for the quarter as stronger
crush margins in North America and the absence of fertilizer inventory
write-downs recognized last year were partially offset by weaker
year-over-year European results. Year-to-date crushing and origination
results decreased $ 198 million as margins declined from high prior-year
levels due to lower demand for vegetable oil and protein meal. Global
soybean supply shortages resulted in lower production volumes in the
early part of this fiscal year.
Refining, packaging, biodiesel and other operating profit decreased $ 10
million for the quarter and $ 46 million for the six months. Lower
European biodiesel margins for the quarter and six months were only
partially offset by improved South American refining and biodiesel
results. North American sales volumes and margins decreased for the
quarter and six months.
Oilseeds results in Asia increased $ 37 million for the quarter and $ 51
million for the six months as the Company's investments, principally its
equity interest in Wilmar International Limited, continued to perform
well.
Corn Processing Operating Profit
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
Sweeteners and starches $ 171 $ 140 $ 31 $ 365 $ 205 $ 160
Bioproducts 119 (111 ) 230 113 (58 ) 171
Total Corn Processing $ 290 $ 29 $ 261 $ 478 $ 147 $ 331
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Corn Processing operating profit increased $ 261 million for the quarter
and $ 331 million for the six months. Sweeteners and starches operating
profit increased $ 31 million for the quarter and $ 160 million for the
six months due to lower net corn and manufacturing costs partially
offset by lower sales volumes.
Bioproducts operating profit increased $ 230 million for the quarter and
$ 171 million for the six months due to improved ethanol margins and
higher sales volumes resulting from lower net corn costs, decreased
manufacturing costs, and favorable gasoline blending economics.
Bioproducts operating profit for the quarter also reflected increased
sales volumes and margins for lysine, increased citric acid margins, and
increased startup costs related to the Company's new industrial
chemicals plants, ethanol dry mills, sugarcane processing plant, and new
co-generation facilities.
Agricultural Services Operating Profit
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
Merchandising and handling $ 103 $ 385 $ (282 ) $ 260 $ 770 $ (510 )
Transportation 47 77 (30 ) 65 120 (55 )
Total Agricultural Services $ 150 $ 462 $ (312 ) $ 325 $ 890 $ (565 )
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Agricultural Services operating profit decreased $ 312 million for the
quarter and $ 565 million for the six months. Merchandising and handling
results decreased $282 million for the quarter and $ 510 million for the
six months. Demand for exports of U.S. soybeans was strong during the
quarter. Enhanced volume and margin opportunities created by last year's
volatile commodity markets and tight credit markets did not recur during
the quarter and six months ended December 31, 2009.
Transportation results decreased $ 30 million for the quarter and $ 55
million for the six months due to lower barge freight rates and
decreased utilization levels resulting from the late, extended North
American harvest.
Other Operating Profit
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
Processing $ 159 $ 51 $ 108 $ 266 $ 154 $ 112
Financial 19 (46 ) 65 39 (29 ) 68
Total Other $ 178 $ 5 $ 173 $ 305 $ 125 $ 180
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Other operating profit increased $ 173 million for the quarter and $ 180
million for the six months. Other processing operating profit increased
$ 108 million for the quarter and $ 112 million for the six months due
to increased equity earnings from the Company's investment in Gruma
S.A.B de C.V., improved global wheat milling margins, and increased
cocoa processing earnings. Other processing earnings for the quarter and
six months ended December 31, 2009, include mark-to-market gains of $ 46
million and $ 69 million, respectively related to certain forward sales
commitments accounted for as derivatives.
Other financial operating profit increased $ 65 million for the quarter
and $ 68 million for the six months due to the absence of losses
experienced last year by the Company's captive insurance business and
improved results of the Company's brokerage services business.
Corporate Results
Quarter ended Six months ended
December 31 December 31
2009 2008 Change 2009 2008 Change
(in millions)
LIFO credit (charge) $ (54 ) $ 123 $ (177 ) $ 22 $ 576 $ (554 )
Interest expense - net (71 ) (42 ) (29 ) (136 ) (70 ) (66 )
Corporate costs (70 ) (35 ) (35 ) (139 ) (129 ) (10 )
Other 9 (44 ) 53 10 (65 ) 75
Total Corporate $ (186 ) $ 2 $ (188 ) $ (243 ) $ 312 $ (555 )
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Corporate results decreased $ 188 million for the quarter and $ 555
million for the six months. Market prices for LIFO-based inventories
were generally higher for the quarter resulting in a $ 54 million
increase in LIFO inventory reserves compared to a $ 123 million decrease
in last year's quarter. LIFO inventory reserves decreased $ 22 million
for the six months ended December 31, 2009, compared to a $ 576 million
decrease in the same period last year. Interest expense - net increased
$ 29 million for the quarter and $ 66 million for the six months
reflecting a reduction in corporate interest income caused by lower
short-term interest rates and lower working capital requirements of the
operating segments. Corporate costs for the quarter increased $ 35
million due to higher employee-related costs and commercial services
expenses. Year-to-date corporate costs increased primarily due to higher
commercial services expenses. Other principally represents the
elimination of after-tax earnings of minority interests.
New Accounting Standards
Certain amounts in the prior year's Consolidated Statement of Earnings,
Segment Operating Analysis, Summary of Financial Condition, and Summary
of Cash Flows have been restated and presentation formats have been
modified to apply the requirements of new accounting standards ASC Topic
810, Consolidation and ASC Topic 470-20, Debt with Conversion
and Other Options. Effective July 1, 2009, the Company adopted this
amended guidance which requires retrospective application to all periods
presented.
Conference Call Information
Archer Daniels Midland Company will host a conference call and audio
webcast at 8:30 a.m. Central Time on Tuesday, February 2, 2010, 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 via the Internet or
to download the slide presentation, go to www.adm.com/webcast.
To listen by telephone, dial 800-299-7635 or 617-786-2901; the access
code is 75645282. Replay of the call will be available beginning at
11:30 a.m. Central Time on February 2 to February 9, 2010. To listen to
the replay by telephone, dial 888-286-8010 or 617-801-6888; the access
code is 72817894. To listen to the replay online, visit www.adm.com/webcast.
About ADM
Every day, the 28,000 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, 2009, were $69 billion. For
more information about our Company and our products, visit www.adm.com.
Archer Daniels Midland Company
Consolidated Statements of Earnings
(unaudited)
Quarter ended Six months ended
December 31 December 31
2009 2008 2009 2008
(in millions, except per share amounts)
Net sales and other operating income $ 15,913 $ 16,673 $ 30,834 $ 37,833
Cost of products sold 14,860 15,461 28,808 34,754
Gross profit 1,053 1,212 2,026 3,079
Selling, general and administrative expenses 358 337 712 746
Other (income) expense -- net (89 ) 58 (187 ) 30
Earnings before income taxes 784 817 1,501 2,303
Income taxes 223 238 443 678
Net earnings including noncontrolling interests 561 579 1,058 1,625
Less: Net earnings (losses) attributable to noncontrolling interests (6 ) 1 (5 ) 2
Net earnings attributable to ADM $ 567 $ 578 $ 1,063 $ 1,623
Diluted earnings per common share $ .88 $ .90 $ 1.65 $ 2.52
Average number of shares outstanding 645 643 644 644
Other (income) expense - net consists of:
Interest expense $ 105 $ 130 $ 203 $ 268
Investment income (36 ) (48 ) (66 ) (102 )
Net gain on marketable securities transactions (6 ) -- (7 ) (9 )
Equity in earnings of unconsolidated affiliates (139 ) (93 ) (291 ) (216 )
Other -- net (13 ) 69 (26 ) 89
$ (89 ) $ 58 $ (187 ) $ 30
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Archer Daniels Midland Company
Segment Operating Analysis
(unaudited)
Quarter ended Six months ended
December 31 December 31
2009 2008 2009 2008
(in millions)
Net sales and other operating income
Oilseeds Processing $ 4,880 $ 5,296 $ 11,238 $ 13,068
Corn Processing 2,029 1,853 3,945 4,094
Agricultural Services 7,640 8,141 12,962 17,710
Other 1,364 1,383 2,689 2,961
Total net sales and other operating income $ 15,913 $ 16,673 $ 30,834 $ 37,833
Quarter ended Six months ended
December 31 December 31
2009 2008 2009 2008
(in millions)
Segment Operating profit (loss)
Oilseeds Processing ((3)) $ 352 $ 319 $ 636 $ 829
Corn Processing 290 29 478 147
Agricultural Services ((3)) 150 462 325 890
Other ((1) (3)) 178 5 305 125
Total segment operating profit 970 815 1,744 1,991
Corporate ((2) (3)) (186 ) 2 (243 ) 312
Earnings before income taxes $ 784 $ 817 $ 1,501 $ 2,303
Quarter ended Six months ended
December 31 December 31
2009 2008 2009 2008
(in 000s metric tons)
Processing volumes
Oilseeds Processing 7,799 7,136 14,172 14,160
Corn Processing 4,767 4,416 9,264 9,004
Wheat, cocoa and malt 1,874 1,847 3,908 3,725
Total processing volumes 14,440 13,399 27,344 26,889
((1)) Includes asset impairment charges of $ 9 million in Other for the quarter and six months ended December 31, 2008.
((2)) Includes LIFO charge of $ 54 million for the quarter and LIFO credit of $ 22 million for the six months ended December 31, 2009. Includes LIFO credit of $ 123 million for the quarter and $ 576 million for the six months ended December 31, 2008.
((3)) Includes gain on asset and business disposal of $ 7 million in Corporate for the quarter and $ 3 million, $ 2 million, $ 5 million and $ 7 million in Oilseeds, Agricultural Services, Other and Corporate, respectively, for the six months ended December 31, 2008.
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Archer Daniels Midland Company
Summary of Financial Condition
(unaudited)
December 31 June 30
2009 2009
(in millions)
NET INVESTMENT IN
Working capital $ 11,255 $ 10,927
Property, plant, and equipment 8,636 7,950
Investments in and advances to affiliates 2,693 2,459
Long-term marketable securities 651 626
Other non-current assets 1,161 1,139
$ 24,396 $ 23,101
FINANCED BY
Short-term debt $ 221 $ 356
Long-term debt, including current maturities 7,644 7,640
Deferred liabilities 1,736 1,452
Shareholders' equity 14,795 13,653
$ 24,396 $ 23,101
Summary of Cash Flows
(unaudited)
Six Months Ended
December 31
2009 2008
(in millions)
Operating Activities
Net earnings $ 1,058 $ 1,625
Depreciation and amortization 431 381
Other -- net 171 (434 )
Changes in operating assets and liabilities (280 ) 4,293
Total Operating Activities 1,380 5,865
Investing Activities
Purchases of property, plant and equipment (939 ) (1,069 )
Proceeds from sales of businesses -- 237
Net assets of businesses acquired (57 ) (24 )
Other investing activities 216 (701 )
Total Investing Activities (780 ) (1,557 )
Financing Activities
Long-term debt borrowings 10 102
Long-term debt payments (36 ) (16 )
Net borrowings (payments) under lines of credit (140 ) (2,698 )
Purchases of treasury stock -- (100 )
Cash dividends (180 ) (167 )
Other 8 9
Total Financing Activities (338 ) (2,870 )
Increase in cash and cash equivalents 262 1,438
Cash and cash equivalents - beginning of period 1,055 810
Cash and cash equivalents - end of period $ 1,317 $ 2,248
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