This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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 (888) 522-5398 in the U.S. or (706) 902-2121 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 (855) 859-2056 in the U.S. or (404) 537-3406 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.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,111.58 +4.88 0.03%
S&P 500 2,000.02 +2.10 0.11%
NASDAQ 4,570.6370 +13.29 0.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs