ADM Reports Second Quarter 2012.5 Earnings Of $510 Million Or $0.77 Per Share

Agricultural Services Solid Despite Impact of U.S. Drought

Agricultural Services operating profit was $317 million, up $77 million from the same period one year earlier. Results included a $62 million gain on ADM’s investment in GrainCorp.

Excluding the gain on GrainCorp, merchandising and handling earnings rose $23 million to $129 million, as solid U.S. soybean exports and improved international merchandising results more than offset lower U.S. corn origination and export volumes.

Transportation results were solid, despite challenges from low water on the Mississippi River. Results decreased $5 million to $48 million as increased barge operating expenses were partially offset by higher freight rates.

Milling and other results remained steady, as the milling business continued to perform well.

Other Financial Results Improve

Operating profit from ADM’s Other Financial businesses was $77 million, up $55 million, with asset disposal gains and favorable captive insurance loss reserve adjustments.

Conference Call Information

ADM will host a conference call and audio webcast Tuesday, Feb. 5, 2013, at 8 a.m. Central Time 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 [phone] in the U.S. or [phone] if calling from outside the U.S. The access code is 85998249.

Replay of the call will be available from Feb. 6, 2013 to Feb. 12, 2013. To listen to the replay by telephone, dial [phone] in the U.S. or [phone] if calling from outside the U.S. The access code is 85998249. The replay will also be available online for an extended period of time at www.adm.com/webcast.

About ADM

For more than a century, the people of Archer Daniels Midland Company (NYSE: ADM) have transformed crops into products that serve vital needs. Today, 30,000 ADM employees around the globe convert oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses. With more than 265 processing plants, 460 crop procurement facilities, and the world’s premier crop transportation network, ADM helps connect the harvest to the home in more than 140 countries. For more information about ADM and its products, visit www.adm.com.

¹ Non-GAAP financial measures, see pages 5 and 12 for explanations and reconciliations

Financial Tables Follow

Segment Operating Profit and Corporate Results
A non-GAAP financial measure (unaudited)
			Quarter ended December 31													Four quarters ended December 31
			2012				2011				Change					2012				2011				Change
			(in millions)
Oilseeds Processing Operating Profit
Crushing and origination			$	261			$	121			$	140				$	931			$	855			$	76
Refining, packaging, biodiesel and other				50				77				(27	)				241				315				(74	)
Cocoa and other				36				(30	)			66					276				88				188
Asia				64				41				23					172				178				(6	)
Total Oilseeds Processing			$	411			$	209			$	202				$	1,620			$	1,436			$	184
Corn Processing Operating Profit
Sweeteners and starches			$	97			$	75			$	22				$	421			$	165			$	256
Bioproducts (excluding charges)				(94	)			135				(229	)				(133	)			559				(692	)
Restructuring and Exit Costs				-				(339	)			339					(10	)			(339	)			329
Total Corn Processing			$	3			$	(129	)		$	132				$	278			$	385			$	(107	)
Agricultural Services Operating Profit
Merchandising and handling (excluding item)			$	129			$	106			$	23				$	415			$	654			$	(239	)
Gain on interest in GrainCorp				62				-				62					62				-				62
Transportation				48				53				(5	)				111				112				(1	)
Milling and other (excluding items)				78				81				(3	)				337				314				23
Gain on sale of Gruma assets				-				-				-					-				78				(78	)
Asset impairment charge				-				-				-					(146	)			-				(146	)
Total Agricultural Services			$	317			$	240			$	77				$	779			$	1,158			$	(379	)
Other Operating Profit
Financial			$	77			$	22			$	55				$	91			$	46			$	45
Total Other			$	77			$	22			$	55				$	91			$	46			$	45
Segment Operating Profit			$	808			$	342			$	466				$	2,768			$	3,025			$	(257	)
Corporate Results
LIFO credit (charge)			$	113			$	(59	)		$	172				$	3			$	76			$	(73	)
Interest expense - net				(112	)			(99	)			(13	)				(445	)			(428	)			(17	)
Unallocated corporate costs				(70	)			(71	)			1					(274	)			(342	)			68
Employee-related exit costs				-				-				-					(71	)			-				(71	)
Gains on interest rate swaps				-				-				-					-				6				(6	)
Debt buyback/exchange				(5	)			-				(5	)				(5	)			(12	)			7
Pension settlements				(68	)			-				(68	)				(68	)			-				(68	)
Other				36				8				28					73				11				62
Total Corporate			$	(106	)		$	(221	)		$	115				$	(787	)		$	(689	)			(98	)
Earnings Before Income Taxes			$	702			$	121			$	581				$	1,981			$	2,336			$	(355	)

Total segment operating profit is ADM’s consolidated income from operations before income tax that excludes certain corporate items. Management believes that segment operating profit is a useful measure of ADM’s performance because it provides investors information about ADM’s business unit performance excluding certain corporate overhead costs. Total segment operating profit is a non-GAAP financial measure and is not intended to replace earnings before income tax, the most directly comparable GAAP financial measure. Total segment operating profit is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to income before income taxes or any other measure of consolidated operating results under U.S. GAAP.

Quarterly Segment Operating Profit and Corporate Results
A non-GAAP financial measure (unaudited)
			Quarter ended																Four Quarters					Quarter ended																Fiscal Year
			Mar’12				June'12				Sep'12				Dec'12				2012					Sep'11				Dec'11				Mar'12				June'12				2012
			(in millions)
Oilseeds Processing Operating Profit
Crushing and origination			$	264			$	150			$	256			$	261			$	931				$	106			$	121			$	264			$	150			$	641
Refining, packaging, biodiesel, and other				79				84				28				50				241					55				77				79				84				295
Cocoa and other				159				52				29				36				276					2				(30	)			159				52				183
Asia				40				45				23				64				172					57				41				40				45				183
			$	542			$	331			$	336			$	411			$	1,620				$	220			$	209			$	542			$	331			$	1,302
Corn Processing Operating Profit
Sweeteners and starches			$	95			$	135			$	94			$	97			$	421				$	30			$	75			$	95			$	135			$	335
Bioproducts (excluding charges)				48				(61	)			(26	)			(94	)			(133	)				153				135				48				(61	)			275
Restructuring and exit costs				(10	)			-				-				-				(10	)				-				(339	)			(10	)			-				(349	)
			$	133			$	74			$	68			$	3			$	278				$	183			$	(129	)		$	133			$	74			$	261
Agricultural Services Operating Profit
Merchandising and handling (excluding item)			$	148			$	30			$	108			$	129			$	415				$	209			$	106			$	148			$	30			$	493
Gain on interest in GrainCorp				-				-				-				62				62					-				-				-				-				-
Transportation				27				17				19				48				111					28				53				27				17				125
Milling and other (excluding charge)				86				76				97				78				337					86				81				86				76				329
Asset impairment charge				-				-				(146	)			-				(146	)				-				-				-				-				-
			$	261			$	123			$	78			$	317			$	779				$	323			$	240			$	261			$	123			$	947
Other Operating Profit
Financial			$	(18	)		$	16			$	16			$	77			$	91				$	(5	)		$	22			$	(18	)		$	16			$	15
			$	(18	)		$	16			$	16			$	77			$	91				$	(5	)		$	22			$	(18	)		$	16			$	15
Segment Operating Profit			$	918			$	544			$	498			$	808			$	2,768				$	721			$	342			$	918			$	544			$	2,525
Corporate Results
LIFO credit (charge)			$	(107	)		$	50			$	(53	)		$	113			$	3				$	126			$	(59	)		$	(107	)		$	50			$	10
Interest expense - net				(114	)			(112	)			(107	)			(112	)			(445	)				(98	)			(99	)			(114	)			(112	)			(423	)
Unallocated corporate costs				(67	)			(67	)			(70	)			(70	)			(274	)				(84	)			(71	)			(67	)			(67	)			(289	)
Employee-related exit costs				(71	)			-				-				-				(71	)				-				-				(71	)			-				(71	)
Debt buyback/exchange				-				-				-				(5	)			(5	)				(4	)			-				-				-				(4	)
Pension settlements				-				-				-				(68	)			(68	)				-				-				-				-				-
Other				9				1				27				36				73					(1	)			8				9				1				17
			$	(350	)		$	(128	)		$	(203	)		$	(106	)		$	(787	)			$	(61	)		$	(221	)		$	(350	)		$	(128	)		$	(760	)
Earnings Before Income Taxes			$	568			$	416			$	295			$	702			$	1,981				$	660			$	121			$	568			$	416			$	1,765

Total segment operating profit is ADM’s consolidated income from operations before income tax that excludes certain corporate items. Management believes that segment operating profit is a useful measure of ADM’s performance because it provides investors information about ADM’s business unit performance excluding certain corporate overhead costs. Total segment operating profit is a non-GAAP financial measure and is not intended to replace earnings before income tax, the most directly comparable GAAP financial measure. Total segment operating profit is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to income before income taxes or any other measure of consolidated operating results under U.S. GAAP.

Consolidated Statements of Earnings
(unaudited)
				Quarter ended									Six months ended
				December 31									December 31
			2012				2011					2012				2011
			(in millions, except per share amounts)
Net sales and other operating income			$	24,921			$	23,306				$	46,729			$	45,208
Cost of products sold				23,925				22,493					44,927				43,361
Gross profit				996				813					1,802				1,847
Selling, general and administrative expenses				(479	)			(423	)				(869	)			(830	)
Equity in earnings of unconsolidated affiliates				142				127					255				251
Investment income				29				22					59				62
Interest expense				(107	)			(96	)				(213	)			(209	)
Asset impairment, exit and restructuring costs				-				(352	)				(146	)			(352	)
Other income (expense) – net				121				30					109				12
Earnings before income taxes				702				121					997				781
Income taxes				(192	)			(38	)				(303	)			(237	)
Net earnings including noncontrolling interests				510				83					694				544
Less: Net earnings (losses) attributable to noncontrolling interests				-				3					2				4
Net earnings attributable to ADM			$	510			$	80				$	692			$	540
Diluted earnings per common share			$	0.77			$	0.12				$	1.05			$	0.81
Average number of shares outstanding				661				667					661				670
Other income (expense) - net consists of:
Net gain on marketable securities transactions			$	43			$	11				$	45			$	16
Gain on interest in GrainCorp				62				-					62				-
Debt buyback/exchange costs				(5	)			-					(5	)			(12	)
Other – net				21				19					7				8
			$	121			$	30				$	109			$	12

Summary of Financial Condition
(unaudited)
			December 31,				December 31,
			2012				2011
			(in millions)
NET INVESTMENT IN
Cash and cash equivalents		$	1,714			$	864
Short-term marketable securities			576				594
Operating working capital (a)			13,563				13,373
Property, plant, and equipment			10,123				9,601
Investments in and advances to affiliates			3,170				3,211
Long-term marketable securities			717				352
Other non-current assets			1,364				1,313
		$	31,227			$	29,308
FINANCED BY
Short-term debt		$	2,816			$	834
Long-term debt, including current maturities			6,724				8,364
Deferred liabilities			2,556				1,945
Shareholders’ equity			19,131				18,165
		$	31,227			$	29,308

(a) Current assets (excluding cash and cash equivalents and short-term marketable securities) less current liabilities (excluding short-term debt and current maturities of long-term debt)

Summary of Cash Flows
(unaudited)
				Six Months Ended
				December 31
				2012				2011
				(in millions)
Operating Activities
Net earnings			$	694				$	544
Depreciation and amortization				435					414
Asset impairment charge				146					350
Other – net				(4	)				102
Changes in operating assets and liabilities				1,207					1,631
Total Operating Activities				2,478					3,041
Investing Activities
Purchases of property, plant and equipment				(615	)				(852	)
Net assets of businesses acquired				(26	)				(206	)
Proceeds from sale of Gruma				450					-
Marketable securities – net				(898	)				195
Cash held in a deconsolidated entity				-					(130	)
Other investing activities				116					59
Total Investing Activities				(973	)				(934	)
Financing Activities
Long-term debt borrowings				106					91
Long-term debt payments				(1,423	)				(173	)
Net borrowings (repayments) under lines of credit				660					(1,076	)
Debt repayment premium and costs				(197	)				(32	)
Purchases of treasury stock				-					(427	)
Cash dividends				(230	)				(224	)
Other				2					(17	)
Total Financing Activities				(1,082	)				(1,858	)
Increase (decrease) in cash and cash equivalents				423					249
Cash and cash equivalents - beginning of period				1,291					615
Cash and cash equivalents - end of period			$	1,714				$	864

Segment Operating Analysis
(unaudited)
				Quarter Ended							Four Quarters Ended
				December 31							December 31
			2012				2011				2012			2011
			(‘000s of metric tons)
Processed volumes
Oilseeds				8,406			8,191				31,820			29,930
Corn				6,026			6,297				24,517			24,078
Milling and Cocoa				1,813			1,855				7,023			7,211
Total processed volumes				16,245			16,343				63,360			61,219
				Quarter Ended							Four Quarters Ended
				December 31							December 31
			2012			2011					2012			2011
			(In millions)
Net sales and other operating income
Oilseeds Processing			$	8,364		$	8,266				$	35,430		$	33,581
Corn Processing				3,041			3,158					11,830			11,755
Agricultural Services				13,485			11,854					43,159			42,708
Other				31			28					140			111
Total net sales and other
operating income			$	24,921		$	23,306				$	90,559		$	88,155

Segment Operating Analysis
(unaudited)
			Quarter ended												Four Quarters
			Mar'12			June'12			Sept'12			Dec'12			2012
			(In '000 metric tons)
Processed volumes
Oilseeds				8,159			7,793			7,462			8,406			31,820
Corn				6,174			6,036			6,281			6,026			24,517
Milling and Cocoa				1,740			1,680			1,790			1,813			7,023
Total processed volumes				16,073			15,509			15,533			16,245			63,360
			Quarter ended												Fiscal Year
			Sept'11			Dec'11			Mar'12			June'12			2012
			(In '000 metric tons)
Processed volumes
Oilseeds				7,018			8,191			8,159			7,793			31,161
Corn				6,111			6,297			6,174			6,036			24,618
Milling and Cocoa				1,881			1,855			1,740			1,680			7,156
Total processed volumes				15,010			16,343			16,073			15,509			62,935
			Quarter ended												Four Quarters
			Mar'12			June'12			Sept'12			Dec'12			2012
			(In millions)
Net sales and other operating income
Oilseeds Processing			$	7,715		$	9,663		$	9,688		$	8,364		$	35,430
Corn Processing				2,835			2,828			3,126			3,041			11,830
Agricultural Services				10,571			10,147			8,956			13,485			43,159
Other				34			37			38			31			140
Total net sales and other operating income			$	21,155		$	22,675		$	21,808		$	24,921		$	90,559
			Quarter ended												Fiscal Year
			Sept'11			Dec'11			Mar'12			June'12			2012
			(In millions)
Net sales and other operating income
Oilseeds Processing			$	9,071		$	8,266		$	7,715		$	9,663		$	34,715
Corn Processing				3,293			3,158			2,835			2,828			12,114
Agricultural Services				9,510			11,854			10,571			10,147			42,082
Other				28			28			34			37			127
Total net sales and other operating income			$	21,902		$	23,306		$	21,155		$	22,675		$	89,038

Adjusted Earnings Per Share
A non-GAAP financial measure
(unaudited)
			Quarter Ended									Four QuartersEnded
			December 31									December 31
			2012					2011				2012
Earnings Per Share (fully-diluted)			$	0.77				$	0.12			$	2.08
Adjustments:
LIFO charge/(credit) (a)				(0.11	)				0.06				-
Asset impairment charge – Gruma (b)				-					-				0.16
Asset impairment charge – PHA (c)				-					0.33				-
Restructuring and exit costs (d)				-					-				0.08
Gain on interest in GrainCorp (e)				(0.07	)				-				(0.07	)
Gain on sale of assets (f)				(0.04	)				-				(0.04	)
Pension settlements (g)				0.07					-				0.07
Brazil income tax remeasurement (h)				0.01					-				0.02
Adjust quarterly effective tax rate to fiscal year average (i)				(0.03	)				-				-
Sub-total adjustments				(0.17	)				0.39				0.22
Adjusted Earnings Per Share (non-GAAP)			$	0.60				$	0.51			$	2.30

		(a)		The Company’s pretax changes in its LIFO reserves during the period, tax effected using the Company’s U.S. effective income tax rate.
		(b)		The asset impairment charge related to the Company’s investments associated with Gruma, tax effected using the applicable U.S. and Mexican tax rates.
		(c)		The asset impairment charge related to the PHA business, tax effected using the Company’s U.S. effective income tax rate.
		(d)		The restructuring and exit costs related primarily to the global workforce reduction program, tax effected using the applicable U.S., European and South American tax rates.
		(e)		The gain on the Company’s interest in the shares of GrainCorp, tax effected using the applicable U.S. and European tax rates.
		(f)		The gain on the sale of certain of the Company’s exchange membership interests, tax effected using the Company’s U.S. effective income tax rate.
		(g)		The one-time expense related to pension settlements, tax effected using the applicable U.S. and European tax rates.
		(h)		The tax impact of foreign-exchange remeasurement of certain Brazilian assets.
		(i)		The impact to EPS if the December 31, 2012 final effective income tax rate of 30% were used.

Adjusted EPS is ADM’s fully diluted EPS after removal of the effect on Reported EPS of certain specified items as more fully described above. Management believes that Adjusted EPS is a useful measure of ADM’s performance because it provides investors additional information about ADM’s operations allowing better evaluation of ongoing business performance. Adjusted EPS is a non-GAAP financial measure and is not intended to replace or be an alternative to EPS, the most directly comparable GAAP financial measure, or any other measures of operating results under GAAP. Earnings amounts in the tables above have been divided by the company’s diluted shares outstanding for each respective quarter in order to arrive at an adjusted EPS amount for each specified item.

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