ADM Reports Adjusted Second Quarter 2014 Earnings of $0.77 per Share

  ADM Reports Adjusted Second Quarter 2014 Earnings of $0.77 per Share                 Adjusted EPS up 67 percent from year-ago period                 Net earnings of $533 million or $0.81 per share  Business Wire  DECATUR, Ill. -- August 5, 2014  Archer Daniels Midland Company (NYSE: ADM) today reported financial results for the quarter ended June 30, 2014.  The company reported adjusted earnings per share^1 of $0.77, up from $0.46 in the same period last year. Adjusted segment operating profit^1 was $819 million, up 32 percent from $621 million in the year-ago period.  Net earnings for the quarter were $533 million, or $0.81 per share, and segment operating profit^1 was $888 million.  “In the second quarter, the ADM team continued to execute very well and delivered strong results. We capitalized on robust ethanol demand, a recovery of U.S. grain export volumes and continuing strong demand for oilseeds products,” said ADM Chairman and CEO Patricia Woertz.  “The team also continues to drive improved returns, with this quarter’s ROIC showing a 200-basis-point improvement over last year.  “Today, the crops in North America and Europe are developing nicely, so we are preparing for what could be very large harvests.”  Second Quarter 2014 Highlights^1    *Adjusted EPS of $0.77 excludes approximately $73 million in pretax LIFO     income, or $0.07 per share, and $31 million in pretax costs related to     restructuring, or about $0.03 per share.   *Oilseeds Processing increased $18 million, as continued good North     American crushing results were partially offset by weaker origination     results in South America and lower results from Wilmar.   *Corn Processing increased $69 million on strong ethanol demand and steady     sweetener volumes.   *Agricultural Services increased $122 million, driven by strong U.S.     exports and significantly improved results from international     merchandising.   *Trailing four-quarter-average adjusted ROIC increased 200 basis points     year over year.   *The net debt position^2 of the company declined to $3.6 billion, compared     to $5.5 billion in the same period last year, which also resulted in a     lower net interest expense.   *ADM repurchased 7.2 million shares during the quarter, bringing     year-to-date buybacks to 11.5 million shares for about $500 million.  Oilseeds Earnings Steady with Strong N.A. Crush Offset by Weaker S.A. Origination and Wilmar  Oilseeds operating profit of $328 million represented an increase of $18 million from the same period one year earlier. These numbers exclude a negligible charge for cocoa hedge timing effects, versus a gain of $11 million, or $0.01 per share, in the year-ago period.  Crushing and origination operating profit declined $22 million to $163 million. North and South American soybean crushing operations and North American canola crushing operations all saw good volumes and margins. Those were offset by lower results from South American origination amid slower farmer selling.  Refining, packaging, biodiesel and other generated a profit of $119 million for the quarter, up $26 million with good volumes and margins for refined and packaged oils in South America and record results for lecithin and protein specialties.  Cocoa and other earned $20 million in the quarter, up $37 million from the year-ago period, reflecting the improved margin environment in the cocoa business.  Oilseeds results in Asia for the quarter were down $23 million from the same period last year, principally reflecting lower results from Wilmar International Limited.  Corn Processing Results Improved Significantly on Strong Performances Across the Segment  Corn processing operating profit of $277 million represented an increase of $69 million from the same period one year earlier. These numbers exclude positive timing effects of $70 million, or $0.07 per share, versus $15 million, or $0.01 per share, in the year-ago period.  Sweeteners and starches results increased $25 million to $136 million on steady volumes, with lower average selling prices offset by lower net corn costs.  Bioproducts results increased $44 million to $141 million driven by strong demand and good margins in ethanol.  Agricultural Services Results Improve on Strong U.S. Grain Exports and International Merchandising  Agricultural Services operating profit was $203 million, up $122 million from the year-ago period.  Merchandising and handling earnings increased $101 million to $115 million, amid strong U.S. export volumes, partial recovery of a loss reserve, and continued improvement in international merchandising results.  Transportation results increased $24 million to $27 million with southbound barge freight utilization driven by strong U.S. exports, and with good northbound utilization.  Milling and other results were essentially flat as lower milling results were offset by strong performance by the edible bean business.  Other Items of Note  This quarter’s effective tax rate was 28 percent, versus 29 percent in the same period last year.  As additional information to help clarify underlying business performance, the tables on page 9 include both adjusted EPS as well as adjusted EPS excluding significant timing effects.  Conference Call Information  ADM will host a conference call and audio webcast on Aug. 5, 2014, 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 69056477.  Replay of the call will be available from Aug. 6, 2014, to Aug. 12, 2014. 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 69056477. 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, 31,000 ADM employees around the globe convert oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses. With more than 270 processing plants, 470 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 These are non-GAAP financial measures; see pages 4 and 9 for explanations and reconciliations. ^2 Total debt less cash and cash equivalents and short-term marketable securities.                             Financial Tables Follow                                                                       Segment Operating Profit and Corporate Results A non-GAAP financial measure (unaudited)                                                                                                  Quarter ended                 Six months ended                               June 30                         June 30 (In millions)    2014      2013       Change    2014       2013        Change Oilseeds Processing Operating Profit Crushing and     $ 163      $ 185      $ (22 )   $ 324       $ 341       $ (17 ) origination Refining, packaging,       119        93         26        232         201         31 biodiesel, and other Cocoa and other (excluding       20         (17    )   37        50          (44     )   94 timing effects) Cocoa hedge timing           (1     )   11         (12   )   (25     )   16          (41   ) effects* Asia             26        49        (23   )   80         120        (40   ) Total Oilseeds   $ 327     $ 321     $ 6      $ 661      $ 634      $ 27   Processing Corn Processing Operating Profit Sweeteners and starches (excluding       $ 136      $ 111      $ 25      $ 243       $ 231       $ 12 timing effects) Bioproducts (excluding       141        97         44        295         174         121 timing effects ) Corn hedge timing           70        15        55       5          (29     )   34     effects* Total Corn       $ 347     $ 223     $ 124    $ 543      $ 376      $ 167  Processing Agricultural Services Operating Profit Merchandising    $ 115      $ 14       $ 101     $ 184       $ 100       $ 84 and handling Milling and      61         64         (3    )   112         123         (11   ) other Transportation   27        3         24       60         9          51     Total Agricultural     $ 203     $ 81      $ 122    $ 356      $ 232      $ 124  Services Other Operating Profit Financial        $ 11      $ 22      $ (11 )   $ 19       $ 35       $ (16 ) Total Other      $ 11      $ 22      $ (11 )   $ 19       $ 35       $ (16 )                                                                                 Segment Operating        $ 888      $ 647      $ 241     $ 1,579     $ 1,277     $ 302 Profit *Memo: Adjusted Segment          $ 819      $ 621      $ 198     $ 1,599     $ 1,290     $ 309 Operating Profit                                                                                 Corporate Results LIFO credit      $ 73       $ (39  )   $ 112     $ (86   )   $ (73   )   $ (13 ) (charge) Interest         (78    )   (104   )   26        (171    )   (209    )   38 expense - net Unallocated corporate        (109   )   (71    )   (38   )   (189    )   (153    )   (36   ) costs Other charges    (31    )   (80    )   49        (31     )   (105    )   74 Minority interest and     (8     )   (36    )   28       (1      )   (45     )   44     other Total            $ (153 )   $ (330 )   $ 177    $ (478  )   $ (585  )   $ 107  Corporate Earnings Before Income    $ 735     $ 317     $ 418    $ 1,101    $ 692      $ 409  Taxes  Segment operating profit is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items and timing effects (see items denoted*). Timing effects relate to hedge ineffectiveness and mark-to-market hedge timing effects. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items and timing effects. Segment operating profit and adjusted segment operating profit are non-GAAP financial measures and are not intended to replace earnings before income tax, the most directly comparable GAAP financial measure. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered alternatives 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                              2014        2013         2014        2013                              (in millions, except per share amounts) Revenues                     $ 21,494     $ 22,541     $ 42,190     $ 44,268 Cost of products sold        20,322      21,734      40,343      42,705    Gross profit                 1,172        807          1,847        1,563 Selling, general, and        426          452          819          888 administrative expenses Asset impairment, exit,      31           —            31           — and restructuring costs Equity in (earnings) losses of unconsolidated     (78      )   (62      )   (210     )   (199     ) affiliates Interest income              (24      )   (29      )   (46      )   (56      ) Interest expense             79           107          172          213 Other (income) expense -     3           22          (20      )   25        net Earnings before income       735          317          1,101        692 taxes Income taxes                 (203     )   (91      )   (301     )   (196     ) Net earnings including       532          226          800          496 noncontrolling interests Less: Net earnings (losses) attributable to     (1       )   3           —           4         noncontrolling interests Net earnings attributable    $ 533       $ 223       $ 800       $ 492     to ADM                                                                               Diluted earnings per         $ 0.81       $ 0.34       $ 1.21       $ 0.74 common share                                                                               Average number of shares     659          663          661          663 outstanding                                                                                                                                                             Other (income) expense - net consists of: Gain on sales of             $ (13    )   (16      )   (34      )   (21      ) assets/business (a) Net loss (gain) on marketable securities        —            (5       )   —            (5       ) transactions Loss on Australian foreign   —            51           —            51 exchange hedges Other - net                  16          (8       )   14          —                                      $ 3         $ 22        $ (20    )   $ 25       (a) Current period gain includes individually insignificant disposals in Oilseeds (Q2 $0, YTD $15 million), Ag Services (Q2 $13 million, YTD $20 million), Corporate (Q2 and YTD $1 million) and a loss in Corn (Q2 $1 million, YTD $2 million). Prior period gain includes individually insignificant disposals in Oilseeds (Q2 $6 million, YTD $8 million), Corn (Q2 and YTD $3 million), Ag Services (Q2 $3 million, YTD $6 million), Other (Q2 and YTD $6 million) and a loss in Corporate (Q2 and YTD $2 million).                                                            Summary of Financial Condition (Unaudited)                                                                                                             June 30,     June 30,                                                2014         2013                                                (in millions) NET INVESTMENT IN Cash and cash equivalents                      $ 1,630      $ 1,848 Short-term marketable securities               366          181 Operating working capital (a)                  11,024       12,042 Property, plant, and equipment                 10,110       10,091 Investments in and advances to affiliates      3,419        3,145 Long-term marketable securities                539          720 Other non-current assets                       1,204       1,246                                                $ 28,292    $ 29,273 FINANCED BY Short-term debt                                $ 233        $ 1,016 Long-term debt, including current maturities   5,389        6,508 Deferred liabilities                           2,451        2,736 Shareholders' equity                           20,219      19,013                                                $ 28,292    $ 29,273  (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                                                    2014       2013                                                    (in millions) Operating Activities Net earnings                                       $ 800       $ 496 Depreciation and amortization                      432         454 Other - net                                        (180    )   (243    ) Changes in operating assets and liabilities        (69     )   1,641    Total Operating Activities                         983         2,348                                                                         Investing Activities Purchases of property, plant and equipment         (398    )   (442    ) Net assets of businesses acquired                  —           (16     ) Marketable securities - net                        50          324 Other investing activities                         91         192      Total Investing Activities                         (257    )   58                                                                         Financing Activities Long-term debt borrowings                          1           20 Long-term debt payments                            (1,162  )   (260    ) Net borrowings (payments) under lines of credit    (129    )   (1,787  ) Purchases of treasury stock                        (493    )   (11     ) Cash dividends                                     (315    )   (250    ) Acquisition of noncontrolling interest             (157    )   — Other                                              38         16       Total Financing Activities                         (2,217  )   (2,272  )                                                                         Increase (decrease) in cash and cash equivalents   (1,491  )   134 Cash and cash equivalents - beginning of period    3,121      1,714    Cash and cash equivalents - end of period          $ 1,630    $ 1,848                                                     Segment Operating Analysis (unaudited)                                                                                Quarter ended             Six months ended                           June 30                   June 30                           2014        2013         2014        2013                           (in '000s metric tons) Processed volumes Oilseeds                  7,785        7,382        16,474       15,737 Corn                      6,336        6,226        12,085       11,520 Milling and Cocoa         1,788       1,755       3,561       3,486 Total processed volumes   15,909      15,363      32,120      30,743                                                                                                                                                               Quarter ended             Six months ended                           June 30                   June 30                           2014         2013         2014         2013                           (in millions) Revenues Oilseeds Processing       $ 8,841      $ 9,336      $ 16,644     $ 17,479 Corn Processing           3,071        3,638        5,901        6,691 Agricultural Services     9,513        9,530        19,487       20,030 Other                     69          37          158         68 Total revenues            $ 21,494    $ 22,541    $ 42,190    $ 44,268                                                           Adjusted Earnings Per Share A non-GAAP financial measure (unaudited)                                                                                                  Quarter ended         Six months ended                                      June 30               June 30                                      2014      2013       2014      2013 Reported EPS (fully diluted)         $ 0.81     $ 0.34     $ 1.21     $ 0.74 Adjustments: LIFO (credit) charge (a)             (0.07  )   0.04       0.08       0.07 Restructuring/relocation charges     0.03       —          0.03       — (b) FCPA charges (c)                     —          0.03       —          0.06 GrainCorp-related charges (d)        —          0.05       —          0.05 Effective tax rate adjustments (e)   —         —         —         (0.01  ) Sub-total adjustments                (0.04  )   0.12      0.11      0.17    Adjusted earnings per share          $ 0.77    $ 0.46    $ 1.32    $ 0.91  (non-GAAP)                                                                               Memo: Timing effects (gain) loss Corn (f)                             (0.07  )   (0.01  )   (0.01  )   0.03 Cocoa (g)                            —         (0.01  )   0.03      (0.02  ) Sub-total timing effects             (0.07  )   (0.02  )   0.02      0.01    Adjusted EPS excluding timing        $ 0.70    $ 0.44    $ 1.34    $ 0.92  effects (non-GAAP)  (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.       Relocation of the global headquarters to Chicago, Ill., costs related to (b)   integration of Toepfer following the acquisition of the noncontrolling       interest, and other restructuring charges totaling $31 million, pretax,       tax effected using the applicable tax rates.       Charges, net of estimated tax, related to settlements with government (c)   agencies pertaining to potential violations of anti-corruption       practices. (d)   The loss on Australian dollar foreign exchange hedges tax effected using       the Company's U.S. effective income tax rate. (e)   Impact to EPS due to the change in annual effective tax rate.       Corn timing effects in the current quarter are comprised of corn hedge (f)   ineffectiveness losses of $0.01 per share and ethanol mark-to-market       gains of $0.08 per share. The prior period timing item is a gain of       $0.01 per share for corn hedge ineffectiveness. (g)   The company’s pretax cocoa timing effects, tax effected using the       company's effective tax rate.  Adjusted EPS and adjusted EPS excluding timing effects reflect ADM’s fully diluted EPS after removal of the effect on Reported EPS of certain specified items and timing effects as more fully described above. Management believes that these are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of ongoing business performance. These non-GAAP financial measures are not intended to replace or be an alternative to Reported 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 and timing effect.  Contact:  Archer Daniels Midland Company Media Relations David Weintraub 217-424-5413 or Investor Relations Case McGee 217-451-8286  
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