adm10qfy08q1.htm
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
FORM
10-Q
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended September 30, 2007
OR
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the
transition period from __________ to __________
Commission
file number 1-44
ARCHER-DANIELS-MIDLAND
COMPANY
(Exact
name of registrant as specified in its charter)
Delaware
|
41-0129150
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.
R. S. Employer
Identification
No.)
|
|
|
4666
Faries Parkway Box 1470
Decatur,
Illinois
(Address
of principal executive offices)
|
62525
(Zip
Code)
|
|
|
(217)
424-5200
|
(Registrant's
telephone number, including area
code)
|
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days. Yes x No
o.
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
“accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange
Act.
Large
Accelerated Filer x Accelerated
Filer o Non-accelerated
Filer o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x.
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common
Stock, no par value – 642,890,659 shares
PART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
Archer-Daniels-Midland
Company
Consolidated
Statements of Earnings
(Unaudited)
|
|
Three
Months Ended
|
|
|
|
September
30,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In
millions, except
|
|
|
|
per
share amounts)
|
|
|
|
|
|
|
|
|
Net
sales and other operating income
|
|
$ |
12,828
|
|
|
$ |
9,447
|
|
Cost
of products sold
|
|
|
11,898
|
|
|
|
8,581
|
|
Gross
Profit
|
|
|
930
|
|
|
|
866
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
354
|
|
|
|
310
|
|
Other
income – net
|
|
|
(71 |
) |
|
|
(20 |
) |
Earnings
Before Income Taxes
|
|
|
647
|
|
|
|
576
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
206
|
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$ |
441
|
|
|
$ |
403
|
|
|
|
|
|
|
|
|
|
|
Average
number of shares outstanding – basic
|
|
|
644
|
|
|
|
657
|
|
|
|
|
|
|
|
|
|
|
Average
number of shares outstanding – diluted
|
|
|
647
|
|
|
|
661
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted earnings per common share
|
|
$ |
0.68
|
|
|
$ |
0.61
|
|
|
|
|
|
|
|
|
|
|
Dividends
per common share
|
|
$ |
0.115
|
|
|
$ |
0.10
|
|
See
notes
to consolidated financial statements.
Archer-Daniels-Midland
Company
Consolidated
Balance Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
|
2007
|
|
|
2007
|
|
|
|
(In
millions)
|
|
Assets
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ |
1,121
|
|
|
$ |
663
|
|
Segregated
cash and investments
|
|
|
1,182
|
|
|
|
1,424
|
|
Receivables
|
|
|
8,428
|
|
|
|
6,404
|
|
Inventories
|
|
|
7,747
|
|
|
|
6,060
|
|
Other
assets
|
|
|
540
|
|
|
|
571
|
|
Total
Current Assets
|
|
|
19,018
|
|
|
|
15,122
|
|
|
|
|
|
|
|
|
|
|
Investments
and Other Assets
|
|
|
|
|
|
|
|
|
Investments
in and advances to affiliates
|
|
|
2,624
|
|
|
|
2,498
|
|
Long-term
marketable securities
|
|
|
684
|
|
|
|
657
|
|
Goodwill
|
|
|
319
|
|
|
|
317
|
|
Other
assets
|
|
|
519
|
|
|
|
514
|
|
Total
Investments and Other Assets
|
|
|
4,146
|
|
|
|
3,986
|
|
|
|
|
|
|
|
|
|
|
Property,
Plant, and Equipment
|
|
|
|
|
|
|
|
|
Land
|
|
|
225
|
|
|
|
227
|
|
Buildings
|
|
|
3,056
|
|
|
|
3,002
|
|
Machinery
and equipment
|
|
|
12,015
|
|
|
|
11,822
|
|
Construction
in progress
|
|
|
1,073
|
|
|
|
884
|
|
|
|
|
16,369
|
|
|
|
15,935
|
|
Accumulated
depreciation
|
|
|
(10,141 |
) |
|
|
(9,925 |
) |
Total
Property, Plant, and Equipment
|
|
|
6,228
|
|
|
|
6,010
|
|
Total
Assets
|
|
$ |
29,392
|
|
|
$ |
25,118
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Short-term
debt
|
|
$ |
2,523
|
|
|
$ |
468
|
|
Accounts
payable
|
|
|
5,512
|
|
|
|
4,919
|
|
Accrued
expenses
|
|
|
3,424
|
|
|
|
2,416
|
|
Current
maturities of long-term debt
|
|
|
67
|
|
|
|
65
|
|
Total
Current Liabilities
|
|
|
11,526
|
|
|
|
7,868
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
4,733
|
|
|
|
4,752
|
|
Deferred
income taxes
|
|
|
552
|
|
|
|
532
|
|
Other
|
|
|
761
|
|
|
|
713
|
|
Total
Long-Term Liabilities
|
|
|
6,046
|
|
|
|
5,997
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
Equity
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
5,056
|
|
|
|
5,090
|
|
Reinvested
earnings
|
|
|
6,375
|
|
|
|
5,982
|
|
Accumulated
other comprehensive income
|
|
|
389
|
|
|
|
181
|
|
Total
Shareholders’ Equity
|
|
|
11,820
|
|
|
|
11,253
|
|
Total
Liabilities and Shareholders’ Equity
|
|
$ |
29,392
|
|
|
$ |
25,118
|
|
See
notes
to consolidated financial statements.
Archer-Daniels-Midland
Company
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
Three
Months Ended
|
|
|
|
September
30,
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In
thousands)
|
|
Operating
Activities
|
|
|
|
|
|
|
Net
earnings
|
|
$ |
441
|
|
|
$ |
403
|
|
Adjustments
to reconcile net earnings to net cash provided by
|
|
|
|
|
|
|
|
|
(used
in) operating activities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
185
|
|
|
|
171
|
|
Deferred
income taxes
|
|
|
(18 |
) |
|
|
(10 |
) |
Gain
on marketable securities transactions
|
|
|
(15 |
) |
|
|
(4 |
) |
Equity
in earnings of affiliates, net of dividends
|
|
|
(52 |
) |
|
|
(48 |
) |
Pension
and postretirement accruals, net of contributions
|
|
|
14
|
|
|
|
19
|
|
Other
– net
|
|
|
88
|
|
|
|
50
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Segregated
cash and investments
|
|
|
246
|
|
|
|
8
|
|
Receivables
|
|
|
(814 |
) |
|
|
(126 |
) |
Inventories
|
|
|
(1,858 |
) |
|
|
(421 |
) |
Other
assets
|
|
|
(71 |
) |
|
|
(37 |
) |
Accounts
payable and accrued expenses
|
|
|
644
|
|
|
|
72
|
|
Total
Operating Activities
|
|
|
(1,210 |
) |
|
|
77
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Purchases
of property, plant, and equipment
|
|
|
(359 |
) |
|
|
(251 |
) |
Proceeds
from sales of property, plant, and equipment
|
|
|
9
|
|
|
|
11
|
|
Net
assets of businesses acquired
|
|
|
(5 |
) |
|
|
(20 |
) |
Purchases
of marketable securities
|
|
|
(122 |
) |
|
|
(139 |
) |
Proceeds
from sales of marketable securities
|
|
|
242
|
|
|
|
74
|
|
Other
– net
|
|
|
11
|
|
|
|
9
|
|
Total
Investing Activities
|
|
|
(224 |
) |
|
|
(316 |
) |
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Long-term
debt borrowings
|
|
|
17
|
|
|
|
10
|
|
Long-term
debt payments
|
|
|
(39 |
) |
|
|
(42 |
) |
Net
borrowings under lines of credit agreements
|
|
|
2,041
|
|
|
|
168
|
|
Purchases
of treasury stock
|
|
|
(60 |
) |
|
|
–
|
|
Cash
dividends
|
|
|
(74 |
) |
|
|
(66 |
) |
Other
– net
|
|
|
7
|
|
|
|
14
|
|
Total
Financing Activities
|
|
|
1,892
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
|
|
458
|
|
|
|
(155 |
) |
Cash
and cash equivalents beginning of period
|
|
|
663
|
|
|
|
1,113
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents end of period
|
|
$ |
1,121
|
|
|
$ |
958
|
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
Archer-Daniels-Midland
Company
Notes
to Consolidated Financial Statements
(Unaudited)
Note
1. Basis of Presentation
The
accompanying unaudited consolidated financial statements have been prepared
in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, these statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation
have
been included. Operating results for the quarter ended September 30, 2007 are
not necessarily indicative of the results that may be expected for the year
ending June 30, 2008. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended June 30, 2007.
Last-in,
First-out (LIFO) Inventories
Interim
period LIFO calculations are based on interim period costs and management’s
estimates of year-end inventory levels. Because the availability and
price of agricultural commodity-based LIFO inventories are unpredictable due
to
factors such as weather, government farm programs and policies, and changes
in
global demand, quantities of LIFO-based inventories at interim periods may
vary
significantly from management’s estimates of year-end inventory
levels.
Note
2. New Accounting Standards
During
July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation
Number 48, Accounting for Uncertainty in Income Taxes – an interpretation of
FASB Statement Number 109 (FIN 48). FIN 48 clarifies the accounting for
income taxes by prescribing the minimum requirements a tax position must
meet
before being recognized in the financial statements. In addition, FIN
48 prohibits the use of Statement of Financial Accounting Standards (SFAS)
Number 5, Accounting for Contingencies, in evaluating the recognition
and measurement of uncertain tax positions. The Company adopted the
provisions of FIN 48 on July 1, 2007. The effect of the adoption was
immaterial to the Company.
The
Company files income tax returns in multiple jurisdictions and is subject
to
examination by taxing authorities throughout the world. In the U.S.,
the Company remains subject to Federal examination for tax years 2003
through 2007. The amount of unrecognized tax benefits at September 30, 2007
was
immaterial. There were no significant increases or decreases in
unrecognized tax benefits as a result of tax positions taken during a prior
period or taken during the current quarter and there were no material
settlements during the quarter ended September 30, 2007. The Company
classifies interest and penalties related to uncertain tax positions as interest
expense and penalty expense which are included in the accompanying
consolidated statements of earnings in other income – net and selling, general
and administrative expenses, respectively. The amount of
interest expense and penalty expense was immaterial for the quarter
ended September 30, 2007.
Archer-Daniels-Midland
Company
Notes
to Consolidated Financial Statements (Continued)
(Unaudited)
Note
2. New Accounting Standards (Continued)
During
September 2006, the FASB issued SFAS Number 157, Fair Value
Measurements. SFAS Number 157 establishes a framework for
measuring fair value within generally accepted accounting principles, clarifies
the definition of fair value within that framework, and expands disclosures
about the use of fair value measurements. SFAS Number 157 does not require
any
new fair value measurements in generally accepted accounting
principles. However, the definition of fair value in SFAS Number 157
may affect assumptions used by companies in determining fair
value. The Company will be required to adopt SFAS Number 157 on July
1, 2008. The Company has not completed its evaluation of the impact
of adopting SFAS Number 157 on the Company’s financial statements, but currently
believes the impact of the adoption of SFAS Number 157 will not require material
modification of the Company’s fair value measurements and will be substantially
limited to expanded disclosures in the notes to the Company’s consolidated
financial statements.
During
February 2007, the FASB issued SFAS Number 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS Number 159 allows entities
to voluntarily choose, at specified election dates, to measure many financial
assets and financial liabilities at fair value. The election is made on an
instrument-by-instrument basis and is irrevocable. If the fair value option
is
elected for an instrument, SFAS Number 159 specifies that all subsequent changes
in fair value for that instrument shall be reported in earnings. The
Company will be required to adopt SFAS Number 159 on July 1, 2008 and has not
yet assessed the impact of the adoption of this standard on the Company’s
financial statements.
Note
3. Long-Term Debt
The
Company has outstanding $1.2 billion principal amount of convertible senior
notes (the Notes) due in 2014. As of September 30, 2007 none of the conditions
permitting conversion of the Notes had been satisfied and no share amounts
related to the conversion of the Notes or exercise of the warrants sold in
connection with the issuance of the Notes, were included in diluted average
shares outstanding. For further information on the Notes, refer to
Note 7 “Debt and Financing Arrangements” in the consolidated financial
statements and footnotes thereto included in the Company’s annual report on Form
10-K for the year ended June 30, 2007.
Note
4. Comprehensive Income
The
components of comprehensive income, net of related tax, are as
follows:
|
|
Three
Months Ended
|
|
|
|
September
30,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$ |
441
|
|
|
$ |
403
|
|
Net
change in unrealized gain (loss) on investments
|
|
|
(2 |
) |
|
|
8
|
|
Deferred
gain on hedging activities
|
|
|
5
|
|
|
|
48
|
|
Pension
liability adjustment
|
|
|
(5 |
) |
|
|
–
|
|
Foreign
currency translation adjustment
|
|
|
210
|
|
|
|
29
|
|
Comprehensive
income
|
|
$ |
649
|
|
|
$ |
488
|
|
Archer-Daniels-Midland
Company
Notes
to Consolidated Financial Statements (Continued)
(Unaudited)
Note
5. Other Income - Net
|
|
Three
Months Ended
|
|
|
|
September
30,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
$ |
88
|
|
|
$ |
97
|
|
Investment
income
|
|
|
(63 |
) |
|
|
(61 |
) |
Net
gain on marketable securities transactions
|
|
|
(15 |
) |
|
|
(4 |
) |
Equity
in earnings of unconsolidated affiliates
|
|
|
(85 |
) |
|
|
(57 |
) |
Other
- net
|
|
|
4
|
|
|
|
5
|
|
|
|
$ |
(71 |
) |
|
$ |
(20 |
) |
Note
6. Segment Information
The
Company is principally engaged in procuring, transporting, storing, processing,
and merchandising agricultural commodities and products. The Company
has reclassified certain operations within its reportable segments to reflect
how the Company now manages its businesses following a realignment of the
organizational structure of the Company and to reflect the activities of
the Company as viewed by the Company’s chief operating decision
maker. The Company’s operations are classified into three reportable
business segments: Oilseeds Processing, Corn Processing and
Agricultural Services. Each of these segments is organized based upon
the nature of products and services offered. The Company’s remaining
operations are aggregated and classified as Other. The reclassification of
certain operations in the Company’s reportable segments principally resulted in
the movement of certain food, feed, and industrial operations previously
classified in Other to the respective segment which produces the raw material
feedstock used in those operations. The Oilseeds Processing segment
now includes the Company’s natural health and nutrition and protein specialties
operations, the Corn Processing segment now includes the Company’s industrial
bioproducts operations, and the Agricultural Services segment now includes
the
Company’s formula feed processing and edible bean origination
operations. Prior period segment information has been reclassified to
conform to the new presentation.
The
Oilseeds Processing segment includes activities related to the crushing and
origination of oilseeds such as soybeans, cottonseed, sunflower seeds, canola,
peanuts, and flaxseed into vegetable oils and meals principally for the food
and
feed industries. In addition, oilseeds and oilseed products may
be used internally or resold into the marketplace as raw materials for other
processing. Crude vegetable oil is sold "as is" or is further
processed by refining, bleaching, and deodorizing into salad
oils. Salad oils can be further processed by hydrogenating and/or
interesterifying into margarine, shortening, and other food products. Partially
refined oil is sold for use in chemicals, paints, and other industrial
products. Refined oil can be further processed for use in the
production of biodiesel. Oilseed meals are primary ingredients used
in the manufacture of commercial livestock and poultry feeds. Oilseeds
Processing includes activities related to the production of natural health
and nutrition products and the production of other specialty food and feed
ingredients. This segment also includes activities related to
the Company’s interests in unconsolidated affiliates in Asia,principally Wilmar
International Limited, the largest agricultural processing business in
Asia.
The
Corn
Processing segment includes activities related to the production of sweeteners,
starches, dextrose, and syrups for the food and beverage industry as well
as
activities related to the production, by fermentation, of bioproducts such
as
ethanol, amino acids, and other food, feed and industrial
products.
Archer-Daniels-Midland
Company
Notes
to Consolidated Financial Statements (Continued)
(Unaudited)
Note
6. Segment Information (Continued)
The
Agricultural Services segment utilizes the Company’s extensive grain elevator
and transportation network to buy, store, clean, and transport agricultural
commodities, such as oilseeds, corn, wheat, milo, oats, barley, and edible
beans, and resells or processes these commodities primarily as food and
feed ingredients for the agricultural processing
industry. Agricultural Services’ grain sourcing and transportation
network provides reliable and efficient services to the Company’s agricultural
processing operations. Also included in Agricultural Services are the activities
of A.C. Toepfer International, a global merchandiser of agricultural commodities
and processed products.
Other
includes the Company’s remaining operations, consisting of activities related to
processing agricultural commodities into food ingredient products such as wheat
into wheat flour, cocoa into chocolate and cocoa products, and barley into
malt
for the beverage industry. Other also includes financial activities related
to
banking, captive insurance, private equity fund investments, and futures
commission merchant activities.
Intersegment
sales have been recorded at amounts approximating market. Operating
profit for each segment is based on net sales less identifiable operating
expenses, including an interest charge related to working capital usage. Also
included in segment operating profit are the related equity in earnings of
affiliates based on the equity method of accounting. General
corporate expenses, investment income, unallocated interest expense, marketable
securities transactions, and FIFO to LIFO inventory adjustments have been
excluded from segment operations and classified as Corporate.
For
detailed information regarding the Company’s reportable segments, see Note 14 to
the consolidated financial statements included in the Company’s annual report on
Form 10-K for the year ended June 30, 2007.
Archer-Daniels-Midland
Company
Notes
to Consolidated Financial Statements (Continued)
(Unaudited)
Note
6. Segment Information (Continued)
|
|
Three
Months Ended
|
|
|
|
September
30,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In
millions)
|
|
Sales
to external customers
|
|
|
|
|
|
|
Oilseeds
Processing
|
|
$ |
4,610
|
|
|
$ |
3,238
|
|
Corn
Processing
|
|
|
1,521
|
|
|
|
1,351
|
|
Agricultural
Services
|
|
|
5,540
|
|
|
|
3,975
|
|
Other
|
|
|
1,157
|
|
|
|
883
|
|
Total
|
|
$ |
12,828
|
|
|
$ |
9,447
|
|
|
|
|
|
|
|
|
|
|
Intersegment
sales
|
|
|
|
|
|
|
|
|
Oilseeds
Processing
|
|
$ |
147
|
|
|
$ |
83
|
|
Corn
Processing
|
|
|
19
|
|
|
|
10
|
|
Agricultural
Services
|
|
|
420
|
|
|
|
304
|
|
Other
|
|
|
31
|
|
|
|
30
|
|
Total
|
|
$ |
617
|
|
|
$ |
427
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
Oilseeds
Processing
|
|
$ |
4,757
|
|
|
$ |
3,321
|
|
Corn
Processing
|
|
|
1,540
|
|
|
|
1,361
|
|
Agricultural
Services
|
|
|
5,960
|
|
|
|
4,279
|
|
Other
|
|
|
1,188
|
|
|
|
913
|
|
Intersegment
elimination
|
|
|
(617 |
) |
|
|
(427 |
) |
Total
|
|
$ |
12,828
|
|
|
$ |
9,447
|
|
|
|
|
|
|
|
|
|
|
Segment
operating profit
|
|
|
|
|
|
|
|
|
Oilseeds
Processing
|
|
$ |
209
|
|
|
$ |
170
|
|
Corn
Processing
|
|
|
253
|
|
|
|
289
|
|
Agricultural
Services
|
|
|
229
|
|
|
|
115
|
|
Other
|
|
|
106
|
|
|
|
74
|
|
Total
segment operating profit
|
|
|
797
|
|
|
|
648
|
|
Corporate
|
|
|
(150 |
) |
|
|
(72 |
) |
Earnings
before income taxes
|
|
$ |
647
|
|
|
$ |
576
|
|
|
|
|
|
|
|
|
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Company
Overview
The
Company is principally engaged in procuring, transporting, storing, processing,
and merchandising agricultural commodities and products. The Company’s
operations are classified into three reportable business segments: Oilseeds
Processing, Corn Processing and Agricultural Services. Each of these
segments is organized based upon the nature of products and services
offered. The Company’s remaining operations are aggregated and
classified as Other.
The
Oilseeds Processing segment includes activities related to the crushing and
origination of oilseeds such as soybeans, cottonseed, sunflower seeds, canola,
peanuts, and flaxseed into vegetable oils and meals principally for the food
and
feed industries. In addition, oilseeds and oilseed products may be
used internally or resold into the marketplace as raw materials for other
processing. Crude vegetable oil is sold "as is" or is further processed by
refining, bleaching, and deodorizing into salad oils. Salad oils can
be further processed by hydrogenating and/or interesterifying into margarine,
shortening, and other food products. Partially refined oil is sold for use
in
chemicals, paints, and other industrial products. Refined oil can be
further processed for use in the production of biodiesel. Oilseed
meals are primary ingredients used in the manufacture of commercial livestock
and poultry feeds. Oilseeds Processing includes activities related to the
production of natural health and nutrition products and the production of
other
specialty food and feed ingredients. This segment also includes activities
related to the Company’s interests in unconsolidated affiliates in Asia,
principally Wilmar International Limited, the largest agricultural processing
business in Asia.
The
Corn
Processing segment includes activities related to the production of sweeteners,
starches, dextrose, and syrups for the food and beverage industry as well
as
activities related to the production, by fermentation, of bioproducts such
as
ethanol, amino acids, and other food, feed and industrial products.
The
Agricultural Services segment utilizes the Company’s extensive grain elevator
and transportation network to buy, store, clean, and transport agricultural
commodities, such as oilseeds, corn, wheat, milo, oats, barley, and edible
beans, and resells or processes these commodities primarily as food and feed
ingredients for the agricultural processing
industry. Agricultural Services’ grain sourcing and transportation
network provides reliable and efficient services to the Company’s agricultural
processing operations. Also included in Agricultural Services are the activities
of A.C. Toepfer International, a global merchandiser of agricultural commodities
and processed products.
Other
includes the Company’s remaining operations, consisting of activities related to
processing agricultural commodities into food ingredient products such as
wheat
into wheat flour, cocoa into chocolate and cocoa products, and barley into
malt
for the beverage industry. Other also includes financial activities related
to
banking, captive insurance, private equity fund investments, and futures
commission merchant activities.
Operating
Performance Indicators
The
Company is exposed to certain risks inherent to an agricultural-based commodity
business. These risks are further described in Item 1A, “Risk
Factors” included in the Company’s annual report on Form 10-K for the year ended
June 30, 2007.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|
The
Company’s Oilseeds Processing, Agricultural Services, and Wheat Processing
operations are principally agricultural commodity-based businesses where changes
in segment selling prices move in relationship to changes in prices of the
commodity-based agricultural raw materials. Therefore, changes in
agricultural commodity prices have relatively equal impacts on both net sales
and cost of products sold and minimal impact on the gross profit of underlying
transactions. As a result, changes in net sales amounts of these business
segments do not necessarily correspond to the changes in gross profit realized
by these businesses.
The
Company’s Corn Processing operations and certain other food and feed processing
operations also utilize agricultural commodities (or products derived from
agricultural commodities) as raw materials. In these operations,
agricultural commodity price changes can result in significant fluctuations
in
cost of products sold and such price changes cannot necessarily be passed
directly through to the selling price of the finished products. For products
such as ethanol, selling prices bear no direct relationship to the raw material
cost of the agricultural commodity from which it is produced.
The
Company conducts its business in many countries. For the majority of
the Company’s subsidiaries located outside the United States, the local currency
is the functional currency. Revenues and expenses denominated in
foreign currencies are translated into U.S. dollars at the weighted average
exchange rates for the applicable periods. Fluctuations in the exchange rates
of
foreign currencies, primarily the Euro and British pound, as compared to the
U.S. dollar will result in corresponding fluctuations in the relative U.S.
dollar value of the Company’s revenues and expenses. The impact of
these currency exchange rate changes was not significant during the quarter
ended September 30, 2007.
The
Company measures the performance of its business segments using key operating
statistics such as segment operating profit and return on fixed capital
investment and net assets. The Company’s operating results can vary
significantly due to changes in unpredictable factors such as fluctuations
in
energy prices, weather conditions, plantings, global government farm programs
and policies, changes in global demand resulting from population growth and
changes in standards of living, and global production of similar and competitive
crops. Due to these unpredictable factors, the Company does not
provide forward-looking information in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” Additionally, the Company’s
operating results for the current quarter are not necessarily indicative of
the
results that may be expected for the year ending June 30, 2008.
Three
Months Ended September 30, 2007 Compared to Three Months Ended September 30,
2006
As
an
agricultural-based commodity business, the Company is subject to a variety
of
market factors which affect the Company’s operating results. Net
earnings for the quarter increased principally due to increased segment
operating profits, partially offset by increased corporate expenses related
principally to LIFO inventory valuation charges and costs associated with
realignment of the Company’s organizational structure. Large North American
crops and global wheat shortages created favorable operating conditions in
agricultural merchandising and handling operations. Abundant oilseeds
supplies and good demand for vegetable oil and soybean meal positively impacted
crushing margins in North America. Abundant crops and increased fertilizer
margins positively impacted South American oilseeds operating results.
Corn prices rose in connection with increases in other agricultural
commodity prices, resulting in higher net corn costs and reducing ethanol
margins, which negatively affected corn processing operating
results. Corn processing operating results were favorably impacted by
increased selling prices for sweetener and starch products resulting from higher
industry capacity utilization.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|
Analysis
of Statements of Earnings
Net
sales
and other operating income increased 36% to $12.8 billion for the quarter,
due
primarily to higher selling prices of Agricultural Services merchandised
commodities and increased selling prices and volumes of oilseeds processing
products.
Net
sales
and other operating income by segment for the quarter are as
follows:
|
|
Three
Months Ended
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
(In
millions)
|
|
Oilseeds
Processing
|
|
|
|
|
|
|
|
|
|
Crushing
& Origination
|
|
$ |
2,808
|
|
|
$ |
1,916
|
|
|
$ |
892
|
|
Refining,
Packaging, Biodiesel & Other
|
|
|
1,767
|
|
|
|
1,296
|
|
|
|
471
|
|
Asia
|
|
|
35
|
|
|
|
26
|
|
|
|
9
|
|
Total
Oilseeds Processing
|
|
|
4,610
|
|
|
|
3,238
|
|
|
|
1,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corn
Processing
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweeteners
and Starches
|
|
|
834
|
|
|
|
629
|
|
|
|
205
|
|
Bioproducts
|
|
|
687
|
|
|
|
722
|
|
|
|
(35 |
) |
Total
Corn Processing
|
|
|
1,521
|
|
|
|
1,351
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandising
& Handling
|
|
|
5,480
|
|
|
|
3,914
|
|
|
|
1,566
|
|
Transportation
|
|
|
60
|
|
|
|
61
|
|
|
|
(1 |
) |
Total
Agricultural Services
|
|
|
5,540
|
|
|
|
3,975
|
|
|
|
1,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Wheat,
Cocoa, and Malt
|
|
|
1,133
|
|
|
|
859
|
|
|
|
274
|
|
Financial
|
|
|
24
|
|
|
|
24
|
|
|
|
–
|
|
Total
Other
|
|
|
1,157
|
|
|
|
883
|
|
|
|
274
|
|
Total
|
|
$ |
12,828
|
|
|
$ |
9,447
|
|
|
$ |
3,381
|
|
Oilseeds
Processing sales increased 42% to $4.6 billion primarily due to higher average
selling prices and volumes for vegetable oil and higher average selling prices
for soybean meal. Good demand for vegetable oil and soybean meal
supported higher prices and volumes. Higher average selling prices of
South American oilseed exports and fertilizer also contributed to the
increase. Corn Processing sales increased 13% to $1.5 billion
principally due to higher average selling prices in Sweeteners and Starches,
partially offset by lower sales volumes and lower average selling prices for
ethanol. Higher sales prices for Sweeteners and Starches reflect
higher industry capacity utilization. Bioproducts sales decreased
principally due to lower ethanol sales volumes and prices as a result
of ethanol industry capacity currently exceeding customer demand
levels. Agricultural Services sales increased 39% to $5.5 billion
primarily due to higher commodity prices and, to a lesser extent, increased
sales volumes. Commodity market prices of corn, soybeans, and wheat
increased approximately 44%, 36% and 26%, respectively, from market price levels
of a year ago. Other sales increased 31% to $1.2 billion primarily
due to increased average selling prices of wheat flour and cocoa
products.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|
Cost
of
products sold increased 39% to $11.9 billion primarily due to higher
agricultural commodity prices and increased sales volumes. Manufacturing costs
increased $52 million primarily due to increased employee-related costs, and
higher plant maintenance and depreciation costs.
Selling,
general and administrative expenses increased $44 million to $354 million due
principally to employee-related costs including $23 million related to an
organizational realignment.
Other
income increased $51 million primarily due to a $28 million increase in equity
in earnings of affiliates, an $11 million increase in realized securities gains,
and a $9 million decrease in interest expense. The increase in equity in
earnings of affiliates is primarily due to increased valuations of the Company’s
private equity fund investments. Interest expense decreased primarily
due to lower average interest rates partially offset by higher average
borrowings, and increased capitalization of interest to construction
projects.
Operating
profit by segment for the quarter is as follows:
|
|
Three
Months Ended
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
(In
millions)
|
|
Oilseeds
Processing
|
|
|
|
|
|
|
|
|
|
Crushing
& Origination
|
|
$ |
131
|
|
|
$ |
104
|
|
|
$ |
27
|
|
Refining,
Packaging, Biodiesel & Other
|
|
|
62
|
|
|
|
49
|
|
|
|
13
|
|
Asia
|
|
|
16
|
|
|
|
17
|
|
|
|
(1 |
) |
Total
Oilseeds Processing
|
|
|
209
|
|
|
|
170
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corn
Processing
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweeteners
and Starches
|
|
|
164
|
|
|
|
119
|
|
|
|
45
|
|
Bioproducts
|
|
|
89
|
|
|
|
170
|
|
|
|
(81 |
) |
Total
Corn Processing
|
|
|
253
|
|
|
|
289
|
|
|
|
(36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandising
& Handling
|
|
|
185
|
|
|
|
65
|
|
|
|
120
|
|
Transportation
|
|
|
44
|
|
|
|
50
|
|
|
|
(6 |
) |
Total
Agricultural Services
|
|
|
229
|
|
|
|
115
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Wheat,
Cocoa, and Malt
|
|
|
38
|
|
|
|
43
|
|
|
|
(5 |
) |
Financial
|
|
|
68
|
|
|
|
31
|
|
|
|
37
|
|
Total
Other
|
|
|
106
|
|
|
|
74
|
|
|
|
32
|
|
Total
Segment Operating Profit
|
|
|
797
|
|
|
|
648
|
|
|
|
149
|
|
Corporate
|
|
|
(150 |
) |
|
|
(72 |
) |
|
|
(78 |
) |
Earnings
Before Income Taxes
|
|
$ |
647
|
|
|
$ |
576
|
|
|
$ |
71
|
|
Oilseeds
Processing operating profits increased 23% to $209 million. Crushing
and Origination operating profits increased 26% to $131 million principally
due
to improved crushing margins in North America and improved origination results
in South American, partially offset by lower crushing margins in
Europe. North American crushing margins improved due to abundant
oilseed supplies in the United States and good demand for vegetable oil and
soybean meal. Improved capacity utilization also favorably impacted
North American crushing margins. South American origination results
improved principally due to increased origination and export volumes and
increased fertilizer margins. The improvement in fertilizer margins
is primarily due to higher
average sales prices and improved demand resulting from seasonal planting
activities combined with stable raw material costs. Crushing margins
in Europe declined principally due to higher oilseed costs as a result of
agricultural commodity market concerns regarding future European rapeseed
availability. Refining, Packaging, Biodiesel, and Other operating profits
increased $13 million to $62 million principally due to improved refining
volumes and operating margins resulting from good demand for vegetable
oil.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|
Corn
Processing operating profits declined 12% to $253 million primarily due to
higher net corn costs and lower ethanol selling prices and volumes, partially
offset by higher average selling prices of Sweeteners and Starches
products and favorable risk management results. Net corn costs have
increased approximately 50% from the prior year quarter due to corn prices
increasing in connection with other agricultural commodity prices as a result
of
weather-related supply and demand factors. Agricultural commodity
market concerns regarding the expected decline in the ending 2006 corn crop
carryover has also contributed to the increase in corn costs. Sweeteners
and
Starches operating profits improved 38% to $164 million primarily due to
higher
average sales prices due principally to increased industry capacity
utilization. This increase was partially offset by higher net corn
costs. Bioproducts operating profit declined 48% to $89 million
primarily as a result of higher net corn costs and, to a lesser extent, lower
ethanol sales volumes and lower ethanol average selling prices. The
lower ethanol sales volumes and average selling prices is principally due
to
current excess ethanol industry capacity.
Agricultural
Services operating profits increased $114 million to $229 million principally
due to improved Merchandising and Handling operating
results. Merchandising and Handling operating results improved as
volatile agricultural commodity market conditions, the acceleration of the
North
American harvest, and global wheat shortages created favorable operating
conditions. Transportation operating results declined principally due
to a reduction in barge shipping volumes.
Other
operating profits increased $32 million to $106 million principally due to
improved results from financial activities. Financial operating profits
increased $37 million to $68 million principally due to increased valuations
of
the Company’s private equity fund investments and gains on sales of equity
securities held by the Company’s futures commission merchant
business. Wheat, Cocoa, and Malt operating profits declined $5
million principally due to lower Cocoa Processing operating
results. This decrease is principally due to higher inventory
carrying costs, and weaker North American chocolate demand negatively impacting
processing margins.
Corporate
expense increased $78 million to $150 million principally due to an $83 million
charge, compared to a $17 million charge in the prior year, related to the
effect of changing commodity prices on LIFO inventory valuations, a $23 million
charge related to organizational realignment costs, and increased minority
interest expense. These increases were partially offset by a $23 million
increase in investment income.
Income
taxes increased due principally to higher pretax earnings. The
Company’s effective tax rate for the quarter is 31.8% as compared to 30% in the
prior year’s quarter. The increase in the Company’s effective tax
rate is primarily due to changes in the geographic mix of pretax
earnings.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|
Liquidity
and Capital Resources
The
Company’s objective is to have sufficient liquidity, balance sheet strength, and
financial flexibility to fund the operating and capital requirements of a
capital intensive agricultural-based commodity business.
At
September 30, 2007, the Company continued to show substantial liquidity with
working capital of $7.5 billion and a current ratio, defined as current assets
divided by current liabilities, of 1.65 to 1. Included in working
capital is $1.2 billion of cash, cash equivalents, and short-term marketable
securities as well as $5.4 billion of readily marketable commodity inventories.
Working capital increased $238 million during the quarter principally due
to
increased prices and quantities of agricultural commodity
inventories. Capital resources remained strong as reflected by the
increase in the Company’s net worth from $11.3 billion to $11.8
billion. The Company’s ratio of long-term debt to total capital (the
sum of the Company’s long-term debt and shareholders’ equity) was 29% at
September 30, 2007 compared to 30% at June 30, 2007. This ratio is a measure
of
the Company’s long-term liquidity and is an indicator of financial
flexibility.
Contractual
Obligations and Commercial Commitments
During
the
three months ended September 30, 2007, the Company’s inventory purchase
obligations increased $4.1 billion to $15.9 billion. This increase
was principally related to increased obligations to purchase agricultural
commodities. As of September 30, 2007, the Company expects to make
payments related to inventory purchase obligations of $15.0 billion within
the
next twelve months. There were no other material changes in the
Company’s contractual obligations and off balance sheet arrangements during the
three months ended September 30, 2007.
Critical
Accounting Policies
There
were
no material changes in the Company’s critical accounting policies during the
three months ended September 30, 2007.
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
The
market
risk inherent in the Company’s market risk sensitive instruments and positions
is the potential loss arising from adverse changes in: commodity prices as
they
relate to the Company’s net commodity position; marketable equity security
prices; market prices of limited partnerships’ investments; foreign currency
exchange rates; and interest rates. Significant changes in market
risk sensitive instruments and positions for the quarter ended September
30,
2007 are described below. There were no material changes during the
quarter in the Company’s potential loss arising from changes in market prices of
limited partnerships’ investments, marketable equity securities, foreign
currency exchange rates, and interest rates.
For
detailed information regarding the Company’s market risk sensitive instruments
and positions, see Item 7A, “Quantitative and Qualitative disclosures About
Market Risk” included in the Company’s annual report on Form 10-K for the year
ended June 30, 2007.
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
(Continued)
|
Commodities
The
availability and price of agricultural commodities are subject to wide
fluctuations due to unpredictable factors such as weather, plantings, global
government farm programs and policies, changes in global demand resulting from
population growth and changes in standards of living, and global production
of
similar and competitive crops. A sensitivity analysis has been
prepared to estimate the Company’s exposure to market risk of its commodity
position. The Company’s daily net commodity position consists of inventories,
related purchase and sale contracts, and exchange-traded futures contracts,
including those to hedge portions of production requirements. The fair value
of
such position is a summation of the fair values calculated for each commodity
by
valuing each net position at quoted futures prices. Market risk is estimated
as
the potential loss in fair value resulting from a hypothetical ten percent
adverse change in such prices. Actual results may
differ.
|
|
September
30, 2007
|
|
|
June
30, 2007
|
|
|
|
Fair
Value
|
|
|
Market
Risk
|
|
|
Fair
Value
|
|
|
Market
Risk
|
|
|
|
(in
millions)
|
|
Highest
position - long
|
|
$ |
1,260
|
|
|
$ |
126
|
|
|
$ |
703
|
|
|
$ |
70
|
|
Lowest
position - long (short)
|
|
|
467
|
|
|
|
47
|
|
|
|
(565
|
) |
|
|
(57 |
) |
Average
position - long
|
|
|
1,049
|
|
|
|
105
|
|
|
|
180
|
|
|
|
18
|
|
The
increase in fair value of the average position was principally the result of
an
increase in quantities underlying the daily net commodity position.
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
As
of
September 30, 2007, an evaluation was performed under the supervision and with
the participation of the Company’s management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company’s “disclosure controls and procedures” (as defined in
Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934 (the
“Exchange Act”)). Based on that evaluation, the Company’s management, including
the Chief Executive Officer and Chief Financial Officer, concluded the Company’s
disclosure controls and procedures were effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is (a) recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms and (b) accumulated and communicated to the Company’s management,
including the Chief Executive Officer and the Chief Financial Officer, to allow
timely decisions regarding required disclosure. There was no change in the
Company’s internal controls over financial reporting during the Company’s most
recently completed fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company’s internal controls over financial
reporting.
PART
II – OTHER INFORMATION
Environmental
Matters
The
Company is involved in approximately twenty administrative and judicial
proceedings in which it has been identified as a potentially responsible party
(PRP) under the federal Superfund law and its state analogs for the study and
cleanup of sites contaminated by material discharged into the
environment. In all of these matters there are numerous
PRPs. Due to various factors, such as the required level of
remediation and participation in the cleanup effort by others, the Company’s
future cleanup costs at these sites cannot be reasonably
estimated. In management’s opinion, these proceedings will not,
either individually or in the aggregate, have a material adverse affect on
the
Company’s financial condition or results of operations.
There
were
no significant changes in the Company’s risk factors during the three months
ended September 30, 2007.
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
Issuer
Purchases of Equity Securities
|
|
|
|
|
|
|
|
Total
Number of
|
|
|
Number
of Shares
|
|
|
|
Total
Number
|
|
|
Average
|
|
|
Shares
Purchased as
|
|
|
Remaining
that May be
|
|
|
|
of
Shares
|
|
|
Price
Paid
|
|
|
Part
of Publicly
|
|
|
Purchased
Under the
|
|
Period
|
|
Purchased
(1)
|
|
|
per
Share
|
|
|
Announced
Program (2)
|
|
|
Program
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
1, 2007 to
|
|
|
|
|
|
|
|
|
|
|
|
|
July
31, 2007
|
|
|
13,851
|
|
|
$ |
35.44
|
|
|
|
289
|
|
|
|
77,501,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
1, 2007 to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August
31, 2007
|
|
|
17,372
|
|
|
|
33.51
|
|
|
|
98
|
|
|
|
77,501,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
1, 2007 to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, 2007
|
|
|
1,840,443
|
|
|
|
32.63
|
|
|
|
1,837,098
|
|
|
|
75,664,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,871,666
|
|
|
$ |
32.65
|
|
|
|
1,837,485
|
|
|
|
75,664,170
|
|
(1)
|
Total
shares purchased represents those shares purchased as part of the
Company’s publicly announced share repurchase program described below,
shares received as payment of the exercise price for stock option
exercises, and shares received as payment of the withholding taxes
on
vested restricted stock grants.
|
(2)
|
On
November 4, 2004, the Company’s Board of Directors approved a stock
repurchase program authorizing the Company to repurchase up to 100,000,000
shares of the Company’s common stock during the period commencing January
1, 2005 and ending December 31,
2009.
|
(3)(i)
|
Composite
Certificate of Incorporation, as amended, filed on November 13,
2001 as
Exhibit 3(i) to Form 10-Q for the quarter ended September 30,
2001 (File
No. 1-44), is incorporated herein by
reference.
|
(ii)
|
Bylaws,
as amended, filed on February 6, 2007 as Exhibit 3(ii) to Form 8-K
(File
No. 1-44), are incorporated herein by
reference.
|
(31.1)
|
Certification
of Chief Executive Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a)
of the Securities Exchange Act, as
amended.
|
(31.2)
|
Certification
of Chief Financial Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a)
of the Securities Exchange Act, as
amended.
|
(32.1)
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
(32.2)
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ARCHER-DANIELS-MIDLAND
COMPANY
/s/
D. J.
Schmalz
D.
J.
Schmalz
Senior
Vice President and
Chief
Financial Officer
/s/
D. J.
Smith
D.
J.
Smith
Executive
Vice President, Secretary and
General
Counsel
Dated:
November 8, 2007