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Archer Daniels Midland Reports Third Quarter Results
DECATUR, Ill., April 29 /PRNewswire-FirstCall/ --
-- Net earnings for the quarter ended March 31, 2008 increased 42% to
$517 million -- $.80 per share from $363 million -- $.56 per
share last year.
"ADM's third-quarter performance demonstrates the ability of our balanced
operations, global network and solid balance sheet to deliver strong
results amid fluid markets," said Patricia Woertz, Chairman and CEO.
"Volatility in commodity markets presented unprecedented opportunities.
Once again, our team leveraged our financial flexibility and global asset
base to capture those opportunities to deliver shareholder value."
-- Financial Highlights
(Amounts in millions, except per share data and percentages)
Three Months Ended Nine Months Ended
March 31 March 31
2008 2007 %Change 2008 2007 %Change
Net sales and other
operating income $18,708 $11,381 64% $48,032 $31,804 51%
Segment operating profit $913 $593 54% $2,665 $2,008 33%
Net earnings $517 $363 42% $1,430 $1,207 18%
Diluted earnings per share $.80 $.56 43% $2.21 $1.83 21%
Average number of shares
outstanding 647 653 (1)% 646 658 (2)%
-- Net sales and other operating income increased 64% to $18.7 billion
for the quarter ended March 31, 2008.
-- Selling prices increased due principally to sharp rises in commodity
prices.
-- Third quarter segment operating profit increased 54% to $913 million
from $593 million last year.
-- Oilseeds Processing operating profit increased as global demand for
protein and oil improved.
-- Corn Processing operating profit decreased due principally to higher
net corn costs.
-- Agricultural Services operating profit increased as highly volatile
market conditions provided exceptional merchandising opportunities.
-- Other segment operating profit increased due to improved margins and
increased financial services income.
Discussion of Operations Net sales and other operating income increased 64% to $18.7 billion for the quarter and 51% or $16.2 billion for the nine months. Increased selling prices resulting primarily from sharp rises in commodity prices accounted for approximately 85% of the increase while higher sales volumes, principally vegetable oil and meal, feed grains and wheat, accounted for the remaining 15% increase.
A summary of segment operating profit and net earnings is as follows:
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
Oilseeds Processing $237 $185 $52 $666 $547 $119
Corn Processing 172 251 (79) 699 876 (177)
Agricultural Services 366 46 320 910 292 618
Other 138 111 27 390 293 97
Segment operating profit 913 593 320 2,665 2,008 657
Corporate (158) (37) (121) (579) (248) (331)
Earnings before income
taxes 755 556 199 2,086 1,760 326
Income taxes (238) (193) (45) (656) (553) (103)
Net earnings $517 $363 $154 $1,430 $1,207 $223
Net earnings increased $154 million for the quarter and $223 million for the nine months due principally to increased segment operating profit of $320 million for the quarter and $657 million for the nine months partially offset by increased corporate expenses for LIFO inventory valuations and minority interest elimination for both the quarter and nine months. Income taxes increased $45 million for the quarter and $103 million for the nine months due principally to increased pretax earnings for both the quarter and nine months partially offset by a lower effective tax rate for the quarter due to changes in the geographic mix of earnings.
Oilseeds Processing Operating Profit
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
Crushing and origination $179 $101 $78 $451 $334 $117
Refining, packaging, biodiesel
and other 39 55 (16) 148 157 (9)
Asia 19 29 (10) 67 56 11
Total Oilseeds Processing $237 $185 $52 $666 $547 $119
Oilseeds Processing operating profit increased $52 million for the quarter and $119 million for the nine months due principally to continuing strong global demand for protein meal and vegetable oil. Crushing and origination results increased $78 million for the quarter and $117 million for the nine months due to improved processing margins in North and South America and increased worldwide crushing volumes. Refining, packaging, biodiesel and other results decreased $16 million for the quarter and $9 million for the nine months due principally to weaker biodiesel margins in Europe. Last year's quarter and nine month results for refining, packaging, biodiesel and other include a $14 million gain from business disposals.
Corn Processing Operating Profit
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
Sweeteners and starches $98 $132 $(34) $409 $403 $6
Bioproducts 74 119 (45) 290 473 (183)
Total Corn Processing $172 $251 $(79) $699 $876 $(177)
Corn Processing operating profit decreased $79 million for the quarter and $177 million for the nine months due primarily to increased net corn and manufacturing costs, principally energy. Partially offsetting these higher costs, sweeteners and starches selling prices increased for the quarter and nine months and sales quantities of ethanol increased for the quarter and nine months. Increases in sales prices and volumes for the quarter and nine months of lysine also favorably impacted bioproducts earnings.
Agricultural Services Operating Profit
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
Merchandising and handling $341 $21 $320 $784 $150 $634
Transportation 25 25 - 126 142 (16)
Total Agricultural
Services $366 $46 $320 $910 $292 $618
Agricultural Services results increased $320 million for the quarter and $618 million for the nine months to record levels due principally to continuing enhanced merchandising and handling margins caused by the highly volatile global grain markets and favorable risk management results. Transportation results decreased $16 million for the nine months due to higher operating costs, principally fuel.
Other Operating Profit
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
Wheat, cocoa and malt $90 $82 $8 $205 $175 $30
Financial 48 29 19 185 $118 67
Total Other $138 $111 $27 $390 $293 $97
Other operating profit increased $27 million for the quarter and $97 million for the nine months. Wheat, cocoa and malt operations improved $8 million for the quarter and $30 million for the nine months due principally to favorable risk management results in wheat and malt partially offset by decreased cocoa processing margins. Last year's quarter and nine month wheat, cocoa and malt results include a $39 million gain from business disposals. Financial earnings improved $19 million for the quarter and $67 million for the nine months principally due to higher brokerage services income, decreased insurance loss provisions, marketable securities gains and improved earnings from managed fund investments.
Corporate Results
Three months ended Nine months ended
March 31 March 31
2008 2007 Change 2008 2007 Change
(in millions)
LIFO (charge) $(64) $(23) $(41) $(371) $(146) $(225)
Investment income 7 22 (15) 88 52 36
Gain on security transactions 1 9 (8) 3 11 (8)
Corporate costs (59) (51) (8) (209) (169) (40)
Other (43) 6 (49) (90) 4 (94)
Total Corporate $(158) $(37) $(121) $(579) $(248) $(331)
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, April 29, 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 phone, dial 800-322-5044 or 617-614-4927; the access code is 75451708. Replay of the call will be available beginning on April 29, 2008, at 10:00 a.m. Central Time and ending May 6, 2008. To listen to the replay by telephone, dial 888-286-8010 or 617-801-6888; the access code is: 61412554. To listen to the replay online, visit http://www.admworld.com/webcast. Archer Daniels Midland Company NYSE: ADM is the world leader in BioEnergy and has a premier position in the agricultural processing value chain. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is a leading manufacturer of biodiesel, ethanol, soybean oil and meal, corn sweeteners, flour and other value-added food and feed ingredients. Headquartered in Decatur, Illinois, ADM has over 27,000 employees, more than 240 processing plants and net sales for the fiscal year ended June 30, 2007 of $44 billion. Additional information can be found on ADM's Web site at http://www.admworld.com.
(Financial Tables Follow)
April 29, 2008
Archer Daniels Midland Company
Consolidated Statements of Earnings
(unaudited)
Three months ended Nine months ended
March 31 March 31
2008 2007 2008 2007
(in millions, except per share amounts)
Net sales and other operating
income $18,708 $11,381 $48,032 $31,804
Cost of products sold 17,551 10,635 44,997 29,285
Gross profit 1,157 746 3,035 2,519
Selling, general and
administrative expenses 378 294 1,071 902
Other (income) expense - net* 24 (104) (122) (143)
Earnings before income taxes 755 556 2,086 1,760
Income taxes 238 193 656 553
Net earnings $517 $363 $1,430 $1,207
Diluted earnings per common
share $.80 $.56 $2.21 $1.83
Average number of shares
outstanding 647 653 646 658
*Other (income) expense - net
Interest expense $136 $115 $338 $324
Investment income (70) (66) (202) (192)
Net gain on marketable securities
transactions (9) (13) (37) (24)
Equity in earnings of
unconsolidated affiliates (78) (85) (288) (208)
Other - net 45 (55) 67 (43)
$24 $(104) $(122) $(143)
April 29, 2008
Archer Daniels Midland Company
Segment Operating Analysis
(unaudited)
Three months ended Nine months ended
March 31 March 31
2008 2007 2008 2007
(in millions)
Net sales and other operating income
Oilseeds Processing $5,721 $3,231 $15,587 $9,831
Corn Processing 1,808 1,488 5,012 4,253
Agricultural Services 9,777 5,694 23,551 14,874
Other 1,402 968 3,882 2,846
Total net sales and other
operating income $18,708 $11,381 $48,032 $31,804
Three months ended Nine months ended
March 31 March 31
2008 2007 2008 2007
(in millions)
Segment operating profit
Oilseeds Processing (1) (2) $237 $185 $666 $547
Corn Processing 172 251 699 876
Agricultural Services 366 46 910 292
Other (2) 138 111 390 293
Total segment operating profit $913 $593 $2,665 $2,008
Three months ended Nine months ended
March 31 March 31
2008 2007 2008 2007
(in 000s metric tons)
Processing volumes
Oilseeds Processing 7,615 6,902 22,283 21,304
Corn Processing 4,329 4,443 13,272 13,548
Wheat, cocoa and malt 1,985 1,966 6,240 6,133
Total processing volumes 13,929 13,311 41,795 40,985
(1) Includes charges for abandonments and write down of long-lived assets
of $18 million for the nine months ended March 31, 2008. Includes
charges for abandonments of $2 million for the nine months ended
March 31, 2007. There were no charges for abandonments and write
downs of long-lived assets for the quarters ended March 31, 2008 and
March 31, 2007.
(2) Includes a $14 million gain from a business disposal in Oilseeds for
the quarter and nine months ended March 31, 2007. Includes a $39
million gain from a business disposal in Other for the quarter and
nine months ended March 31, 2007.
April 29, 2008
Archer Daniels Midland Company
Summary of Financial Condition
(unaudited)
March 31 June 30
2008 2007
(in millions)
NET INVESTMENT IN
Working capital $14,314 $7,787
Property, plant, and equipment 6,860 6,010
Investments in and advances to affiliates 2,877 2,498
Long-term marketable securities 653 657
Other non-current assets 894 831
$25,598 $17,783
FINANCED BY
Short-term debt $4,916 $468
Long-term debt, including current maturities 6,080 4,817
Deferred liabilities 1,440 1,245
Shareholders' equity 13,162 11,253
$25,598 $17,783
SUMMARY OF CASH FLOWS
(unaudited)
March 31
2008 2007
(in millions)
Operating Activities
Net earnings $1,430 $1,207
Depreciation and asset abandonments 562 521
Other - net 218 4
Changes in operating assets and liabilities (5,377) (1,766)
Total Operating Activities (3,167) (34)
Investing Activities
Purchases of property, plant and equipment (1,312) (844)
Net assets of businesses acquired (10) (92)
Other investing activities (306) (14)
Total Investing Activities (1,628) (950)
Financing Activities
Long-term debt borrowings 1,308 1,166
Long-term debt payments (58) (131)
Net borrowings under lines of credit 4,362 570
Purchases of treasury stock (61) (533)
Purchase of convertible note hedge - (299)
Sale of stock warrants - 170
Cash dividends (232) (207)
Proceeds from exercises of stock options 19 32
Total Financing Activities 5,338 768
Increase (decrease) in cash and cash equivalents 543 (216)
Cash and cash equivalents - beginning of period 663 1,113
Cash and cash equivalents - end of period $1,206 $897
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