-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OSfE0mwwpKY0AmrcRT1y3rqVz8iqu96cUfSzLrRQn4sZQbL3LYbRuJ7JnbyLKygm JgB+PhFRwYzfzJ50Zp8u6g== 0000007084-96-000003.txt : 19960216 0000007084-96-000003.hdr.sgml : 19960216 ACCESSION NUMBER: 0000007084-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960209 FILED AS OF DATE: 19960213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARCHER DANIELS MIDLAND CO CENTRAL INDEX KEY: 0000007084 STANDARD INDUSTRIAL CLASSIFICATION: FATS & OILS [2070] IRS NUMBER: 410129150 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00044 FILM NUMBER: 96517740 BUSINESS ADDRESS: STREET 1: 4666 FARIES PKWY CITY: DECATUR STATE: IL ZIP: 62526 BUSINESS PHONE: 2174245200 10-Q 1 10-Q FOR 12/31/95 PAGE 1 UNITED STATES 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 December 31, 1995 OR [ ] 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 (I. R. S. Employer incorporation or organization) Identification No.) 4666 Faries Parkway Box 1470 Decatur, Illinois 62525 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code217-424-5200 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 ___. 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--520,578,484 shares (January 31, 1996) 1 PAGE 2 PART I - FINANCIAL INFORMATION ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
THREE MONTHS ENDED DECEMBER 31, 1995 1994 ------------------------- (In thousands, except per share amounts) Net sales and other operating income $3,415,058 $3,221,804 Cost of products sold and other operating costs 3,018,206 2,744,179 _________ _________ Gross Profit 396,852 477,625 Selling, general and administrative 128,519 122,094 expenses _________ _________ Earnings From Operations 268,333 355,531 Other income (expense) 74,046 (29,459) _________ _________ Earnings Before Income Taxes 342,379 326,072 Income taxes 116,409 105,974 _________ _________ Net Earnings $ $ 225,970 220,098 ========= ========= Average number of shares outstanding 524,143 541,861 Net earnings per common share $.41 $.43 Dividends per common share $.024 $.05
See notes to consolidated financial statements. 2 PAGE 3 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
SIX MONTHS ENDED DECEMBER 31, 1995 1994 ----------------- - --------- (In thousands, except per share amounts) Net sales and other operating $6,237,02 income $6,535,796 7 Cost of products sold and other operating costs 5,814,613 5,414,583 _________ __________ _ Gross Profit 721,183 822,444 Selling, general and administrative expenses 227,240 222,403 _________ __________ _ Earnings From Operations 493,943 600,041 Other income (expense) 95,561 (45,015) _________ __________ _ Earnings Before Income Taxes 589,504 555,026 Income taxes 200,432 180,384 _________ __________ _ $ $ Net Earnings 389,072 374,642 ========= ========== = Average number of shares outstanding 527,429 541,597 Net earnings per common share $ $ .74 .69 Dividends per common share $ $.074 .039
See notes to consolidated financial statements. 3 PAGE 4 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
DECEMBER 31, JUNE 30, 1995 1995 ------------------------- (In thousands) ASSETS Current Assets Cash and cash equivalents $ $ 454,593 773,903 Marketable securities 330,651 664,690 Receivables 1,062,469 1,013,562 Inventories 2,350,840 1,473,896 Prepaid expenses 112,918 105,904 _________ __________ __ _ Total Current Assets 4,630,781 3,712,645 Investments and Other Assets Investments in and advances to affiliates 544,357 502,698 Long-term marketable securities 1,351,830 1,604,219 Other assets 206,761 175,044 _________ __________ __ _ 2,102,948 2,281,961 Property, Plant and Equipment Land 114,044 113,098 Buildings 1,160,009 1,109,249 Machinery and equipment 5,686,244 5,443,561 Construction in progress 649,834 642,825 Less allowances for (3,703,49 depreciation 4) (3,546,452 ) _________ __________ ___ _ 3,906,637 3,762,281 _________ __________ __ _ $10,640,3 $9,756,887 66 ========= ========== == =
See notes to consolidated financial statements. 4 PAGE 5 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
DECEMBER 31, JUNE 30, 1995 1995 ------------------------- (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term debt $ 294,336 $ - Accounts payable 1,091,077 725,046 Accrued expenses 524,211 431,725 Current maturities of long-term debt 15,134 15,614 ________ _________ Total Current Liabilities 1,924,758 1,172,385 Long-Term Debt 2,073,507 2,070,095 Deferred Credits Income taxes 556,007 538,351 Other 103,833 121,891 __________ ________ 659,840 660,242 Shareholders' Equity Common stock 3,498,209 3,668,977 Reinvested earnings 2,484,052 2,185,188 ___________ _________ 5,982,261 5,854,165 __________ ________ $10,640,366 $9,756,887 ========== =========
See notes to consolidated financial statements. 5 PAGE 6 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
SIX MONTHS ENDED DECEMBER 31, 1995 1994 ----------------------- (In thousands) Operating Activities Net earnings $389,072 $374,642 Adjustments to reconcile to net cash provided by operations Depreciation and amortization 194,407 191,975 Deferred income taxes 58,938 13,774 Amortization of long-term debt discount12,434 10,830 Other (95,017) 18,212 Changes in operating assets and liabilities Receivables (92,723) (4,733) Inventories (891,458) (453,444) Prepaid expenses (7,167) (15,366) Accounts payable and accrued expenses433,713 272,362 _________ _________ Total Operating Activities 2,199 408,252 Investing Activities Purchases of property, plant and equipment(354,510)(318,6 08) Business acquisitions (26,120) (11,000) Investments in and advances to affiliates(56,482)(91,478) Purchases of marketable securities (279,702) (1,346,294) Proceeds from sales of marketable securities965,659 1,271 ,350 Other (1,241) - _________ _________ Total Investing Activities 247,604 (496,030) Financing Activities Long-term debt borrowings 6,305 18,465 Long-term debt payments (8,434) (22,820) Net borrowings under line of credit agreements296,336 78,8 44 Purchases of treasury stock (187,948) (3,928) Cash dividends and other (36,752) (20,774) _________ _________ Total Financing Activities 69,507 49,787 _________ _________ Increase (Decrease) In Cash and Cash Equivalents 319,310 (37,991) Cash and Cash Equivalents Beginning of Period454,593 316,394 _________ _________ Cash and Cash Equivalents End of Period$ 773,903 $ 278, 403 ======== ========
See notes to consolidated financial statements. 6 PAGE 7 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. 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, they 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 and six months ended December 31, 1995 are not necessarily indicative of the results that may be expected for the year ending June 30, 1996. 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, 1995. Note 2. Other Income (Expense)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1995 1994 1995 1994 ------------------------------------- (In thousands) (In thousands) Investment income $ 37,328 $ 29,674 $ 79,151 $ 61,936 Interest expense (42,556) (43,723)(82,633) (86,492) Gain (loss) on marketable securities transactions 67,181 (7,117) 67,869 (11,941) Other, including equity in earnings of affiliates 12,093 (8,293) 31,174 (8,518) _______ _______ _______ _______ $ 74,046 $ (29,459)$ 95,561 $(45,015) ======= ======= ======= =======
Note 3. Per Share Data All references to share and per share information have been adjusted for the 5 percent stock dividend paid September 18, 1995. 7 PAGE 8 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 4. Antitrust Investigation and Related Litigation The Company, along with a number of other domestic and foreign companies, is the subject of a grand jury investigation into possible violations of federal antitrust laws and possible related crimes in the food additives industry. The investigation is directed towards possible price-fixing with respect to lysine, citric acid and high fructose corn syrup. Neither the Company nor any director, officer or employee has been charged in connection with the investigation. Following public announcement of the investigation, the Company and certain of its directors and executive officers were named as defendants in a number of putative class actions alleging violations of antitrust and securities laws relating to the Company's marketing practices in the food additives industry, specifically with respect to lysine, citric acid and high fructose corn syrup. The plaintiffs generally request unspecified compensatory and punitive damages, costs, expenses and unspecified relief. The Company and the individuals named as defendants intend to vigorously defend these class actions unless they can be settled on terms deemed acceptable by the parties. These matters could result in the Company being subject to monetary damages, fines, penalties and other sanctions and expenses. The ultimate outcome of the investigation and the putative class actions cannot presently be determined. However, the Company has made a provision related to the lysine contingency, which amount is not material to its consolidated financial statements for the quarter ended December 31, 1995. In the Company's opinion the ultimate resolution of this contingency, to the extent not provided for, will not have a material adverse effect on the Company's consolidated financial condition or annual results of operations, but it could be material to the consolidated operating results of a particular future quarter if resolved unfavorably. Because of the early stage of the investigation as it relates to citric acid and high fructose corn syrup, no provision for any liability that may result therefrom has been made in the accompanying consolidated financial statements. Shareholder derivative actions also have been filed against certain of the Company's directors and executive officers and nominally against the Company alleging that the individuals named as defendants breached their fiduciary duties to the Company and seeking monetary damages and other relief on behalf of the Company from the individuals named as defendants. The Company has sought or intends to seek dismissal of these derivative actions on the ground that they cannot be maintained unless the plaintiffs first brought their complaints to the Company's Board of Directors, which they did not. The Company from time to time, in the ordinary course of business, is named as a defendant in various other lawsuits. In management's opinion, the gross liability from such other lawsuits, including environmental exposure, with or without insurance recoveries is not considered to be material to the Company's consolidated financial condition or results of operations. 8 PAGE 9 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION The Company is in one business segment - procuring, transporting, storing, processing and merchandising agricultural commodities and products. The availability and price of agricultural commodities are subject to wide fluctuations due to unpredictable factors such as: weather; plantings; government (domestic and foreign) farm programs and policies; changes in global demand created by population growth and higher standards of living; and global production of similar and competitive crops. Generally, changes in the price of agricultural commodities can be passed through to the price of processed products. Ethanol is one of a limited few of the Company's processed products which must be priced to compete with products produced from other raw materials. The Company follows a policy of hedging substantially all inventory and related purchase and sale contracts. In addition, the Company from time to time will hedge anticipated production, generally not exceeding six months requirements. These hedges are made to reduce price risk of market fluctuations and risk of crop failure. The instruments used are principally readily marketable exchange traded futures contracts which are designated as hedges. The changes in market value of such contracts have a high correlation to the price changes of the hedged commodity. Also, the underlying commodity can be delivered against such contracts. To obtain a proper matching of revenue and expense, gains or losses arising from open and closed hedging transactions are included in inventory as a cost of the commodities and reflected in the income statement when the product is sold. Inflation, over time, has an impact on agricultural commodity prices. The Company's business is capital intensive and inflation could impact the cost of capital investment. OPERATIONS Net sales and other operating income increased $193 million to $3.4 billion for the quarter and increased $299 million to $6.5 billion for the six months due primarily to increases in average selling prices of 7 percent and 16 percent, respectively. These increases were partially offset by a 6 percent decrease in volume of products sold for the quarter and by the decrease due to the sale of the Company's Supreme Sugar subsidiary and British Arkady bakery ingredient business and the contribution of the Company's formula feed operation to an unconsolidated joint venture. A summary of net sales and other operating income by classes of products and services is as follows:
THREE MONTHS SIX MONTHS ENDED ENDED DECEMBER 31, DECEMBER 31, 1995 1994 1995 1994 _______________ ______________ ___ ___ (In millions) (In millions) Oilseed products $ 2,073 $ $ 3,92 $ 1,922 9 3,599 Corn products 1,290 674 607 1,282 Wheat and other milled 831 products 429 360 713 Other products 486 239 333 643 ______ ______ ______ ______ $ $ $ 6,53 $ 3,415 3,222 6 6,237 ====== ====== ====== ======
9 PAGE 10 Sales of oilseed products increased 8 percent for the quarter and 9 percent for the six months due primarily to increased average selling prices reflecting the higher cost of raw materials. Sales volumes were lower in the quarter as weaker export markets for both vegetable oil and meal products more than offset the strong demand for domestic meal products. Sales of corn products increased 11 percent to $674 million for the quarter and 1 percent to $1.3 billion for the six months due primarily to increased sales volumes resulting from strong demand for beverage and industrial alcohol as well as for various bioproducts, including lysine, MSG and citric acid. These volume increases were partially offset by lower average selling prices for the Company's sweetener and fuel alcohol products. Sales of wheat and other milled products increased 19 percent for the quarter and 17 percent for the six months due principally to increased average selling prices reflecting the higher cost of raw materials. The decrease in sales of other products for both the quarter and six months was due principally to the sale of the Company's Supreme Sugar subsidiary and British Arkady bakery ingredient business as well as the contribution of the Company's formula feed operation to an unconsolidated joint venture. Cost of products sold and other operating costs increased $274 million to $3 billion for the quarter and increased $400 million to $5.8 billion for the six months due primarily to increases in raw material commodity prices of 11 percent and 15 percent, respectively. The effect of commodity price increases on Last- In, First-Out (LIFO)inventory valuations resulted in an increase in LIFO inventory valuation reserves, a charge to cost of products sold and a reduction in gross profits of $59 million for the quarter and $72 million for the six months ended December 31, 1995. For the six months ended December 31, 1994, the effect of commodity price decreases on LIFO inventory valuations resulted in a decrease in LIFO inventory valuation reserves and a credit to cost of products sold and gross profits of $9 million. The effect of LIFO valuations were minimal in the quarter ended December 31, 1994. LIFO inventory valuations reserves at December 31, 1995 were $122 million compared to $55 million at December 31, 1994. The $81 million decrease in gross profit for the quarter resulted primarily from a $45 million decrease due to the net effect of higher raw material commodity prices versus increased average selling prices and a $26 million decrease due to lower sales volumes. The $101 million decrease in gross profit for the six months can be attributed primarily to a $76 million decrease due to the net effect of higher raw material commodity prices versus increased average selling prices and to a $25 million decrease due to divested operations. Selling, general and administrative expenses increased $6 million to $129 million for the quarter and increased $5 million to $227 million for the six months due primarily to an increase in legal and litigation related expenses and general cost increases which were partially offset by expenses attributable to recently divested operations and reduced bad debt expense. The increase in other income for the quarter and six months was due principally to $67 million of gains on marketable securities transactions realized during the quarter. To a lesser extent, other income increased for both the quarter and six months due to increased equity in earnings of unconsolidated affiliates and to increased investment income due primarily to higher interest rates. For the six months, the increase in other income included a $15 million gain on the sale of the Company's Supreme Sugar subsidiary. The increase in income taxes for both the quarter and six months resulted primarily from higher pretax earnings and to a lesser extent from higher effective income tax rates. The Company's effective income tax rate of 34 percent for both the quarter and six months compares to a rate of 33 percent for the comparable periods of a year ago. 10 PAGE 11 LIQUIDITY AND CAPITAL RESOURCES During the six months ended December 31, 1995, the Company continued to show substantial liquidity as working capital increased $166 million to $2.7 billion. Capital resources were strengthened by a $128 million increase in net worth to $6 billion. This increase was net of treasury stock repurchases of $188 million for the six months. The Company's ratio of long- term liabilities to total capital at December 31, 1995 was approximately 24 percent. As discussed in Note 4 to the unaudited consolidated financial statements, the Company, along with a number of other domestic and foreign companies, is the subject of a grand jury investigation into possible violations of federal antitrust laws and possible related crimes in the food additives industry. Neither the Company nor any director, officer or employee has been charged in connection with the investigation. In addition, related civil class actions are pending. These matters could result in the Company being subject to monetary damages, fines, penalties and other sanctions and expenses. The ultimate outcome of the investigation and the putative class actions cannot presently be determined. However, the Company has made a provision related to the lysine contingency, which amount is not material to its consolidated financial statements for the quarter ended December 31, 1995. In the Company's opinion the ultimate resolution of this contingency, to the extent not provided for, will not have a material adverse effect on the Company's consolidated financial condition or annual results of operations, but it could be material to the consolidated operating results of a particular future quarter if resolved unfavorably. Because of the early stage of the investigation as it relates to citric acid and high fructose corn syrup, no provision for any liability that may result therefrom has been made in the accompanying unaudited consolidated financial statements. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company, along with a number of other domestic and foreign companies, is the subject of an investigation being conducted by a grand jury in the Northern District of Illinois in Chicago, into possible violations of federal antitrust laws and possible related crimes in the food additives industry. This investigation is directed towards possible price- fixing with respect to lysine, citric acid, and high fructose corn syrup. Federal grand juries in other jurisdictions also may have been convened to investigate certain of these matters. Neither the Company nor any director, officer or employee of the Company has been charged in connection with this investigation. 11 PAGE 12 Following public announcement in June 1995 of the investigation, the Company and certain of its directors and executive officers were named as defendants in at least seventeen putative class action suits on behalf of all purchasers of securities of the Company during the period between certain dates in 1992 and 1995. Fourteen of these suits were consolidated under the name In Re Archer-Daniels- Midland Company Securities Litigation, United States District Court, Northern District of Illinois, Civil Action No. 95-C-3979, and a consolidated complaint was filed on September 22, 1995. The consolidated complaint alleges that the defendants made material misrepresentations and omissions with respect to the Company and its operations and with respect to actions of the Company and its officers regarding antitrust violations, as a result of which market prices of the Company's securities were artificially inflated during the putative class period. The consolidated complaint alleges that the conduct complained of violates federal securities laws. The plaintiffs request unspecified compensatory damages, costs (including attorneys and expert fees), expenses and other unspecified relief on behalf of the putative class. On October 31, 1995, the Court granted the defendants' motion to transfer the consolidated action to the Central District of Illinois (wherein it now bears Case Number 95-2287) where at least three similar actions are also pending. The Company and the individual defendants have moved to dismiss this consolidated complaint. The Company, along with other companies, has been named as a defendant in at least twenty-eight putative class action antitrust suits involving the sale of high fructose corn syrup. Twenty-two of these actions allege violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of high fructose corn syrup during certain periods in the 1990s. One such action was filed on July 21, 1995 in the United States District Court for the Northern District of Alabama and is encaptioned Golden Eagle, Inc. v. Archer-Daniels- Midland Co., et al., Civil Action No. 95-D-1888-J. This and other similar actions have been transferred to the United States District Court for the Central District of Illinois and assigned Master File No. 95- 1477. The Company, along with other companies, also has been named as a defendant in at least six putative class action antitrust suits filed in California state court involving the sale of high fructose corn syrup. These actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. Two of the putative classes comprise certain direct purchasers of high fructose corn syrup in the State of California during certain periods in the 1990s. One such action was filed on October 17, 1995 in Superior Court for the County Stanislaus, California and encaptioned St. Stan's Brewing Co. v. Archer-Daniels- Midland Co., et al., Civil Action No. 37237. The other four putative classes comprise certain indirect purchasers of high fructose corn syrup in the State of California during certain periods in the 1990s. One such action was filed on July 21, 1995 in the Superior Court of the County of Los Angeles, California and is encaptioned Borgeson v. Archer-Daniels-Midland Co., et al., Civil Action No. BC131940. 12 PAGE 13 The Company has been named as a defendant in at least fourteen putative class action antitrust suits involving the sale of lysine. Nine of these actions allege violations of federal antitrust laws, including allegations that certain entities agreed to fix, stabilize and maintain at artificially high levels the prices of lysine, and seek injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of lysine for certain periods in the 1990s. One such action was filed on July 26, 1995 in the United States District Court for Central District of Illinois and is encaptioned Walker Farms, Inc. v. Archer-Daniels- Midland Co., Civil Action No. 95-2186. This and other similar actions have been transferred to the United States District Court for the Northern District of Illinois and assigned Master File No. 95-7679. The Company also has been named as a defendant in at least one non-class action federal antitrust suit involving the sale of lysine. This action was filed on November 13, 1995 in the United States District Court for the Eastern District of Missouri and is encaptioned Purina Mills, Inc., et al. v. Archer-Daniels-Midland Co., Civil Action No. 95-CV-2227. It alleges violations of federal antitrust laws, including allegations that certain entities agreed to fix, stabilize and maintain at artificially high levels the price of lysine, and seeks an injunction against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The Company also has been named as a defendant in at least two putative class action antitrust suits filed in California state court, at least two putative class action antitrust suits filed in Alabama state court, and at least one putative class action antitrust suit filed in Georgia state court involving the sale of lysine. The California actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of lysine, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. The putative classes in the California actions comprise certain indirect purchasers of lysine in the State of California during certain periods in the 1990s. One such action was filed on September 29, 1995 in the Superior Court of the County of San Diego, California, and is encaptioned Equine Competition Products, Inc. v. Archer-Daniels-Midland Co. et al., Civil Action No. 693014. The Alabama actions allege violations of the Alabama antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of lysine, and seek an injunction against continued alleged illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in the Alabama actions comprise certain indirect purchasers of lysine during certain periods in the 1990s. One such action was filed on August 17, 1995 in the Circuit Court of DeKalb County, Alabama, and is encaptioned Ashley v. Archer-Daniels- Midland Co. et al., Civil Action No. 95-336. The Georgia action, encaptioned Long v. Archer-Daniels- Midland Co., et al., Civil Action No. E-43829, and originally filed in Fulton County Superior Court, alleges a restraint of trade in violation of Georgia common law and the Georgia state RICO Act. This action, which was removed to federal court and there amended, includes allegations that the defendants conspired to maintain the price of lysine at artificially high levels and seeks an injunction against continued illegal conduct, treble damages of an unspecified amount, attorneys fees and costs and other unspecified relief. The putative claim in the action comprises certain indirect purchasers of lysine during the period January 1, 1990 until the present. The Company has moved to dismiss the complaint and plaintiff has opposed this action and filed an amended complaint. 13 PAGE 14 The Company, along with other companies, has been named as a defendant in at least seven putative class action antitrust suits involving the sale of citric acid. Six of these actions allege violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of citric acid, and seek injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of citric acid for certain periods in the 1990s. One such action was filed on August 18, 1995, in the United States District Court for the Northern District of California, and is encaptioned 7-Up Bottling Co. of Philadelphia, Inc. v. Archer-Daniels-Midland Co. et al., Civil Action No. 95- 2963. Other similar actions have been transferred to this same court. The Company, along with other companies, also has been named as a defendant in at least one putative class action antitrust suit filed in Alabama state court involving the sale of citric acid. This action alleges violations of the Alabama antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of citric acid, and seeks an injunction against continued alleged illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the Alabama action comprises certain indirect purchasers of citric acid in the State of Alabama from July 1993 until July 1995. This action was filed on July 27, 1995 in Circuit Court of Walker County, Alabama and is encaptioned Seven Up Bottling Co. of Jasper, Inc. v. Archer-Daniels-Midland Co., et al., Civil Action No. 95-436. The Company, along with other companies, has been named as a defendant in at least three putative class action antitrust suits involving the sale of both high fructose corn syrup and citric acid. Two of these actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. The putative class in one of these cases comprises certain direct purchasers of high fructose corn syrup and citric acid in the State of California during the period January 1, 1992 until at least October 1995. This action was filed on October 11, 1995 in the Superior Court of Stanislaus County, California and is entitled Gangi Bros. Packing Co. v. Archer-Daniels-Midland Co., et al., Civil Action No. 37217. The putative class in the other case comprises certain indirect purchasers of high fructose corn syrup and citric acid in the state of California during the period October 12, 1991 until November 20, 1995. This action was filed on November 20, 1995 in the Superior Court of San Francisco County and is encaptioned MCFH, Inc. v. Archer-Daniels-Midland Company Co., et al., Civil Action No. 974120. The Company, along with other companies, also has been named as a defendant in at least one putative class action antitrust suit filed in West Virginia state court involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the West Virginia antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the West Virginia action comprises certain entities within the State of West Virginia that purchased products containing high fructose corn syrup and/or citric acid for resale from at least 1992 until 1994. This action was filed on October 26, 1995, in the Circuit Court for Boone County, West Virginia, and is encaptioned Freda's v. Archer-Daniels-Midland Co., et al., Civil Action No. 95-C-125. 14 PAGE 15 The Company, along with other companies, has been named as a defendant in at least six putative class action antitrust suits involving the sale of high fructose corn syrup, citric acid and lysine. These actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, citric acid and lysine, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. One of the putative classes comprises certain direct purchasers of high fructose corn syrup, citric acid or lysine in the State of California during a certain period in the 1990s. This action was filed on December 18, 1995 in the Superior Court for the County Stanislaus, California and is encaptioned Nu Laid Foods, Inc. v. Archer-Daniels- Midland Co., et al., Civil Action No. 39693. The other five putative classes comprise certain indirect purchasers of high fructose corn syrup, citric acid and lysine in the State of California during certain periods in the 1990s. One such action was filed on December 14, 1995 in the Superior Court for the County Stanislaus, California and is encaptioned Batson v. Archer- Daniels-Midland Co., et al., Civil Action No. 39680. Also following the public announcement of the grand jury investigation in June 1995, three shareholder derivative suits were filed against certain of the Company's directors and executive officers and nominally against the Company in the United States District Court for the Northern District of Illinois and at least fourteen similar shareholder derivative suits were filed in the Delaware Court of Chancery. The derivative suits filed in federal court in Illinois were consolidated under the name Felzen, et al. v. Andreas, et al, Civil Action Nos. 95-C-4006, 95- C-4535, and a consolidated amended derivative complaint was filed on September 29, 1995. This complaint names all current directors of the Company and one former director as defendants and names the Company as a nominal defendant. It alleges breach of fiduciary duty, waste of corporate assets, abuse of control and gross mismanagement, based on the antitrust allegations described above as well as other alleged wrongdoing. On October 31, 1995, the Court granted the defendants' motion to transfer the Illinois consolidated derivative action to the Central District of Illinois, wherein it now bears the case number 95-2279. The Company and individual defendants have moved to dismiss this complaint. The Company and its directors also have been named as defendants in a putative class action suit encaptioned Loudon v. Archer-Daniels-Midland Company, et al., Civil Action No. 14638, filed in the Delaware Court of Chancery on October 20, 1995. This action alleges violations of Delaware state law and seeks invalidation of the election of the Company's directors on the basis of alleged omissions from the proxy statement issued by the Company prior to its October 19, 1995 annual meeting. The defendants have moved to dismiss this action. The Company and its directors also have been named as defendants in a similar suit filed on November 1, 1995 in the United States District Court for the Central District of Illinois, encaptioned Buckley v. Archer-Daniels- Midland Company, et al., Civil Action No. 95-C-2269, alleging violations of analogous provisions of federal securities law. The defendants moved to dismiss this action and the plaintiff has filed an amended complaint. 15 PAGE 16 The Company and the individual defendants named in the actions described above intend to vigorously defend them unless they can be settled on terms deemed acceptable to the parties. The antitrust investigation and related litigation is also discussed in note 4 to the unaudited consolidated financial statements and in management's discussion of operations and financial condition. Reference is made to Item 3 to the Company's Annual Report on Form 10-K for the year ended June 30, 1995 for a discussion of additional legal proceedings. Item 4. Submission of matters to a vote of Security Holders: The Annual Meeting of Shareholders was held on October 19, 1995. Proxies for the Annual Meeting were solicited pursuant to Regulation 14. There was no solicitation in opposition to the Board of Director nominees as listed in the proxy statement and all of such nominees were elected as follows:
Nominee Shares Cast Shares For Withheld ______________ _______________ ___________ D. O. Andreas 355,356,046 84,637,946 Ralph Bruce 355,741,655 84,252,337 J. H. Daniels 355,788,126 84,205,866 G. O. Coan 355,762,802 84,231,190 L. W. Andreas 355,450,339 84,543,653 S. M. Archer, Jr. 355,797,616 84,196,376 R. A. Goldberg 355,708,614 84,285,378 J. K. Vanier 355,840,768 84,153,224 M. L. Andreas 355,299,832 84,694,160 Mrs. N. A. Rockefeller 355,620,653 84,373,339 M. D. Andreas 354,390,438 85,603,554 H. D. Hale 355,512,903 84,481,089 O. G. Webb 355,800,084 84,193,908 J. R. Randall 355,809,611 84,184,381 F. Ross Johnson 355,609,869 84,384,123 R. S. Strauss 355,667,768 84,326,224 M. B. Mulroney 355,778,425 84,215,567 There were no abstentions or broker non-votes regarding the election of directors. The appointment by the Board of Directors of Ernst & Young LLP as Independent Accountants to audit the accounts of the Company for the fiscal year ending June 30, 1996 was ratified as follows: Shares Cast Shares Shares Broker For Withheld Abstaining Non-Votes ____________ _________ __________ __________ 431,978,007 6,224,330 1,791,655 0 The shareholder proposal relative to diversity on the Company's Board of Directors was defeated as follows: Shares Cast Shares Cast Shares Broker For Against Abstaining Non-Votes __________ ___________ _________ ___________ 65,939,588 280,246,433 17,804,593 76,003,378
Item 6. Exhibits and Reports on Form 8-K a) Notice of annual meeting and proxy statement dated September 13, 1995 incorporated as an exhibit herein by reference. b) A Form 8-K was not filed during the quarter ended December 31, 1995. 16 PAGE 17 SIGNATURES Pursuant to the requirements of the Securities 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 Vice President and Chief Financial Officer /s/ R. P. Reising R. P. Reising Vice President, Secretary and General Counsel Dated: February 13, 1996 EX-27 2 FINANCIAL DATA SCHEDULE FOR 10-Q 12/31/95
5 6-MOS JUN-30-1996 DEC-31-1995 773,903 330,651 1,062,469 0 2,350,840 4,630,781 7,610,131 3,703,494 10,640,366 1,884,343 2,073,507 3,498,209 0 0 2,484,052 10,640,366 6,535,796 6,535,796 5,814,613 5,814,613 0 0 82,633 589,504 200,432 389,072 0 0 0 389,072 .74 .74
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