ADM Reports Second Quarter 2013 Earnings of $223 Million or $0.34 per Share

Adjusted EPS of $0.46, up 21 percent from year-ago quarter

DECATUR, Ill.--(BUSINESS WIRE)--Archer Daniels Midland Company (NYSE: ADM) today reported financial results for the quarter ended June 30, 2013. The company reported net earnings for the quarter of $223 million, or $0.34 per share, down from $0.43 per share in the same period one year earlier. Adjusted earnings per share¹ were $0.46, up from $0.38 in the same period last year. Segment operating profit¹ was $647 million, up 19 percent from the prior year.

“The team managed well through this period, as tight U.S. crop supplies reduced volumes,” said ADM Chairman and CEO Patricia Woertz. “Also, corn results improved amid volatile ethanol industry conditions.

“During the quarter, we continued our work to improve the company’s future returns and earnings power over the cycle. Our effort to unlock cash reached $2 billion, with the team reaching this milestone a half-year ahead of schedule. And, in cost, we made solid progress toward our goal of $200 million in additional cost reductions by the end of 2014.

“Looking ahead, we’ll be managing through tight crop supplies until the forecast large but delayed U.S. harvest.”

Second Quarter 2013 Highlights

• Adjusted EPS of $0.46 excludes approximately $39 million in pretax LIFO charges, or $0.04 per share; $51 million, or $0.05 per share, in foreign-currency hedging losses related to the GrainCorp acquisition; and $29 million, or $0.03 per share, of additional provisions related to the previously disclosed FCPA matter.
• Oilseeds Processing profit decreased $10 million as solid performance in crushing and origination was offset by weaker cocoa results.
• Corn Processing profit increased $149 million due to improved ethanol results.
• Agricultural Services profit decreased $42 million amid expected lower U.S. origination volumes as well as weaker international merchandising results.
• ADM’s net debt position fell to $5.5 billion, down from $8.9 billion a year ago, as ADM’s focus on capital efficiency further strengthened the balance sheet.

Adjusted EPS of 46 Cents, up 8 Cents

Adjusted EPS increased primarily due to higher segment operating profit.

This quarter’s effective tax rate of 29 percent was below the 30 percent rate during the same period last year.

Oilseeds Earnings Essentially Flat as Stronger Crushing and Origination Profits Were Offset by Lower Cocoa Results

Oilseeds operating profit in the second quarter was $321 million, similar to the same period one year earlier.

Crushing and origination operating profit was $185 million, up $35 million from the year-ago quarter. European crushing results improved significantly year-over-year as delays in the arrival of South American meal contributed to stronger margins. In North America, tighter crop supplies resulted in weaker soy and softseed crush margins. South American operations recovered from the first quarter and generated strong overall results, equivalent to the year-ago quarter.

Refining, packaging, biodiesel and other generated a profit of $93 million for the quarter, up $9 million on stronger European results.

Cocoa and other results decreased $58 million due to lower margins on business contracted in earlier quarters.

Oilseeds results in Asia for the quarter were up $4 million from the same period last year, principally reflecting ADM’s share of the improved results from Wilmar International Limited.

Corn Processing Results Reflect Improved Ethanol Conditions

Corn processing operating profit of $223 million represented an increase of $149 million from the same period one year earlier.

Sweeteners and starches operating profit decreased $9 million to $126 million. Excluding the impact of corn hedge ineffectiveness, sweeteners and starches results improved by $25 million, with overall demand and margins remaining solid.

Bioproducts results increased $158 million to $97 million. Overall ethanol margins were profitable, albeit volatile.

Agricultural Services Impacted by Lower U.S. Volumes and Weaker International Merchandising Results

Agricultural Services operating profit was $81 million, down $42 million from the same period one year earlier.

Merchandising and handling earnings declined $16 million to $14 million, due to smaller U.S. origination and export volumes, and lower margins in international merchandising.

Transportation results decreased $14 million to $3 million as lower U.S. export volumes reduced barge freight utilization.

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

Provision for FCPA Matter

ADM has been in discussions with the U.S. Department of Justice and the U.S. Securities and Exchange Commission regarding a previously disclosed FCPA matter dating back to 2008 and earlier. Based upon recent progress in these discussions, ADM believes it is appropriate to increase its provision to $54 million, a $29 million increase over the $25 million established in the first quarter.

Conference Call Information

ADM will host a conference call and audio webcast Tuesday, Aug. 6, 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 16833630.

Replay of the call will be available from Aug. 7, 2013, to Aug. 13, 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 16833630. 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 10 for explanations and reconciliations

Financial Tables Follow

Segment Operating Profit and Corporate Results
A non-GAAP financial measure (unaudited)
			Quarter ended												Six months ended
			June 30												June 30
			2013				2012				Change				2013				2012				Change
			(in millions)
Oilseeds Processing Operating Profit
Crushing and origination			$	185			$	150			$	35			$	341			$	414				($73	)
Refining, packaging, biodiesel, and other				93				84				9				201				163				38
Cocoa and other				(6	)			52				(58	)			(28	)			211				(239	)
Asia				49				45				4				120				85				35
	Total Oilseeds Processing		$	321			$	331				($10	)		$	634			$	873				($239	)
Corn Processing Operating Profit
Sweeteners and starches			$	126			$	135				($9	)		$	202			$	230				($28	)
Bioproducts (excluding charges)				97				(61	)			158				174				(13	)			187
Restructuring and exit costs				0				0				0				0				(10	)			10
	Total Corn Processing		$	223			$	74			$	149			$	376			$	207			$	169
Agricultural Services Operating Profit
Merchandising and handling			$	14			$	30				($16	)		$	100			$	178				($78	)
Milling and other				64				76				(12	)			123				162				(39	)
Transportation				3				17				(14	)			9				44				(35	)
	Total Agricultural Services		$	81			$	123				($42	)		$	232			$	384				($152	)
Other Operating Profit
Financial			$	22			$	16			$	6			$	35				($2	)		$	37
	Total Other		$	22			$	16			$	6			$	35				($2	)		$	37
Segment Operating Profit			$	647			$	544			$	103			$	1,277			$	1,462				($185	)
Corporate Results
LIFO credit (charge)				($39	)		$	50				($89	)			($73	)			($57	)			($16	)
Interest expense - net				(104	)			(112	)			8				(209	)			(226	)			17
Corporate costs				(71	)			(67	)			(4	)			(153	)			(134	)			(19	)
Employee-related exit costs				0				0				0				0				(71	)			71
Loss on Australian foreign exchange hedges				(51	)			0				(51	)			(51	)			0				(51	)
Other				(65	)			1				(66	)			(99	)			10				(109	)
	Total Corporate			($330	)			($128	)			($202	)			($585	)			($478	)			($107	)
Earnings Before Income Taxes			$	317			$	416				($99	)		$	692			$	984				($292	)

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
			June 30								June 30
			2013				2012				2013				2012
			(in millions, except per share amounts)
Net sales and other operating income			$	22,541			$	22,675			$	44,268			$	43,830
Cost of products sold				21,734				21,862				42,705				42,009
	Gross profit			807				813				1,563				1,821
Selling, general, and administrative expenses				452				394				888				796
Asset impairment charges and exit costs				0				0				0				85
Equity in (earnings) losses of unconsolidated affiliates				(62	)			(106	)			(199	)			(221	)
Interest income				(29	)			(24	)			(56	)			(50	)
Interest expense				107				116				213				232
Other (income) expense - net				22				17				25				(5	)
	Earnings before income taxes			317				416				692				984
Income taxes				(91	)			(123	)			(196	)			(286	)
	Net earnings including noncontrolling interests			226				293				496				698
Less: Net earnings (losses) attributable to noncontrolling interests				3				9				4				15
Net earnings attributable to ADM			$	223			$	284			$	492			$	683
Diluted earnings per common share			$	0.34			$	0.43			$	0.74			$	1.03
Average number of shares outstanding				663				661				663				662
Other (income) expense - net consists of:
	Net loss (gain) on marketable securities transactions			($5	)			($1	)			($5	)			($9	)
	Gain on sale of assets			(16	)			0				(21	)			(9	)
	Loss on Australian foreign exchange hedges			51				0				51				0
	Other - net			(8	)			18				0				13
			$	22			$	17			$	25				($5	)

Summary of Financial Condition
(unaudited)
			June 30,			June 30,
			2013			2012
			(in millions)
NET INVESTMENT IN
	Cash and cash equivalents		$	1,848		$	1,291
	Short-term marketable securities			181			176
	Operating working capital (a)			12,042			14,646
	Property, plant, and equipment			10,091			9,812
	Investments in and advances to affiliates			3,145			3,388
	Long-term marketable securities			720			262
	Other non-current assets			1,246			1,355
			$	29,273		$	30,930
FINANCED BY
	Short-term debt		$	1,016		$	2,108
	Long-term debt, including current maturities			6,508			8,212
	Deferred liabilities			2,736			2,441
	Shareholders' equity			19,013			18,169
			$	29,273		$	30,930

(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
				June 30
				2013				2012
				(in millions)
Operating Activities
	Net earnings			$	496			$	698
	Depreciation and amortization				454				434
	Asset impairment charges				0				30
	Other - net				(243	)			(17	)
	Changes in operating assets and liabilities				1,641				(1,291	)
		Total Operating Activities			2,348				(146	)
Investing Activities
	Purchases of property, plant and equipment				(442	)			(625	)
	Net assets of businesses acquired				(16	)			(35	)
	Marketable securities - net				324				453
	Other investing activities				192				19
		Total Investing Activities			58				(188	)
Financing Activities
	Long-term debt borrowings				20				6
	Long-term debt payments				(260	)			(185	)
	Net borrowings (payments) under lines of credit				(1,787	)			1,273
	Debt repayment premium and costs								(12	)
	Purchases of treasury stock				(11	)			(100	)
	Cash dividends				(250	)			(231	)
	Other				16				10
		Total Financing Activities			(2,272	)			761
Increase (decrease) in cash and cash equivalents					134				427
Cash and cash equivalents - beginning of period					1,714				864
Cash and cash equivalents - end of period				$	1,848			$	1,291

Segment Operating Analysis
(unaudited)
		Quarter ended						Six months ended
		June 30						June 30
		2013			2012			2013			2012
		(in '000s metric tons)
Processed volumes
Oilseeds			7,382			7,793			15,737			15,952
Corn			6,226			6,036			11,520			12,210
Milling and Cocoa			1,755			1,680			3,486			3,420
Total processed volumes			15,363			15,509			30,743			31,582
		Quarter ended						Six months ended
		June 30						June 30
		2013			2012			2013			2012
		(in millions)
Net sales and other operating income
Oilseeds Processing		$	9,336		$	9,663		$	17,479		$	17,378
Corn Processing			3,638			2,828			6,691			5,663
Agricultural Services			9,530			10,147			20,030			20,718
Other			37			37			68			71
Total net sales and other operating income		$	22,541		$	22,675		$	44,268		$	43,830

Adjusted Earnings Per Share
A non-GAAP financial measure
(unaudited)
		Quarter Ended							Six months ended
		June 30							June 30
		2013			2012				2013			2012
Reported EPS (fully diluted)		$	0.34		$	0.43			$	0.74		$	1.03
Adjustments:
LIFO (credit) charge (a)			0.04			(0.05	)			0.07			0.05
Loss on Australian-dollar foreign exchange hedges (b)			0.05							0.05
FCPA charge (c)			0.03							0.06
Restructuring and exit costs (d)													0.08
Sub-total adjustments			0.12			(0.05	)			0.18			0.13
Adjusted earnings per share (non-GAAP)		$	0.46		$	0.38			$	0.92		$	1.16

(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 loss on Australian-dollar foreign exchange hedges tax effected using the Company’s U.S. effective income tax rate.
(c)		The FCPA charge related to an estimated provision for settlement with the government agencies pertaining to potential violations of anti-corruption practices net of estimated tax.
(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.

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.

Archer Daniels Midland Company
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217-424-5413
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Investor Relations Contact
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