-----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, KVVbD1UW6muKNcAeynX+ya+PjSMa5xK20pRjg9LARekMiB0bR6cPzIfl8Hw6577I HvRtW+NJnbx+xXKQSbc8ow== 0000007084-98-000017.txt : 19980626 0000007084-98-000017.hdr.sgml : 19980626 ACCESSION NUMBER: 0000007084-98-000017 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 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: 11-K SEC ACT: SEC FILE NUMBER: 001-00044 FILM NUMBER: 98653990 BUSINESS ADDRESS: STREET 1: 4666 FARIES PKWY CITY: DECATUR STATE: IL ZIP: 62526 BUSINESS PHONE: 2174245200 11-K 1 ADM SAV. & INV. PLAN FOR HOURLY EMPLOYEES 16 PAGE 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X]Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 or [ ]Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________________ to _________________ Commission file number 1-44 A.Full title of the plan and the address of the plan, if different from that of the issuer named below: ADM SAVINGS AND INVESTMENT PLAN FOR HOURLY EMPLOYEES B.Name of the issuer of the securities held pursuant to the Plan and the address of its principal executive office: ARCHER DANIELS MIDLAND COMPANY BOX 1470 DECATUR, IL 62525 1 PAGE 2 ADM Savings And Investment Plan For Hourly Employees Audited Financial Statements and Schedules December 31, 1997 and 1996 Report of Independent Auditors....................................... 3 Audited Financial Statements and Schedules Statements of Net Assets Available for Benefits...................... 4 Statements of Changes in Net Assets Available for Benefits........... 5 Notes to Financial Statements........................................ 6 Schedule Item 27a--Schedule of Assets Held for Investment Purposes... 11 Schedule Item 27d--Schedule of Reportable Transactions................ 13 2 PAGE 3 Report of Independent Auditors Administrative Committee ADM Savings and Investment Plan for Hourly Employees Decatur, Illinois We have audited the accompanying statements of net assets available for benefits of the ADM Savings and Investment Plan for Hourly Employees (the "Plan") as of December 31, 1997 and 1996, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1997 and 1996, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1997 and reportable transactions for the year ended December 31, 1997 are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Minneapolis, Minnesota May 11, 1998 3 PAGE 4 ADM Savings and Investment Plan for Hourly Employees Statements Of Net Assets Available for Benefits [CAPTION] December 31 1997 1996 ___________________________ Assets Cash/(cash overdraft) $ 53$ (13,414) Investments (Note 1) Cash equivalents 110,887 46,579 Archer Daniels Midland Company common stock 42,164,474 34,659,240 Pfizer Incorporated common stock 5,676,108 3,807,293 Commingled fixed income funds 323,288 335,087 Equity mutual funds 691,940 308,238 Commingled capital contract fund 193,303 171,358 Participant loans 277,651 - __________ __________ 49,437,651 39,327,795 Contributions receivable from employer 338,590 244,851 Contributions receivable from employees 515,508 367,079 __________ __________ Net assets available for benefits $50,291,802$39,926,311 ========== ==========
See accompanying notes. 4 PAGE 5 ADM Savings and Investment Plan for Hourly Employees Statement of Changes in Net Assets Available for Benefits [CAPTION] Year ended December 31 1997 1996 ___________________________ Additions: Contributions from Archer Daniels Midland Company (Note 2) $ 3,426,203 $3,012,891 Contributions from participating employees (Note 2) 5,907,860 4,548,248 Transfer of Assets From Qualified Merged Plan 390,069 - Dividend and interest income 2,582,368 1,694,123 __________ _________ 12,306,500 9,255,262 Deductions: Benefit payments Common stock 1,313,699 464,947 Cash 2,828,525 1,824,569 __________ _________ 4,142,224 2,289,516 __________ _________ 8,164,276 6,965,746 Net realized and unrealized appreciation in fair value of investments 2,201,215 6,710,219 __________ __________ Net increase 10,365,491 13,675,965 Net assets available for benefits at beginning of year 39,926,311 26,250,346 __________ __________ Net assets available for benefits at end of year $50,291,802$39,926,311 ========== ==========
See accompanying notes. 5 PAGE 6 ADM Savings And Investment Plan For Hourly Employees Notes to Financial Statements December 31, 1997 1. Significant Accounting Policies Basis of Accounting The accounting records of the Plan are maintained on the accrual basis. Investments Investments are carried at fair value. Common stocks are valued at the quoted market price on the last business day of the Plan year. Investments in commingled and mutual funds are stated at the reported net asset value on the last day of the Plan year. Unallocated funds are invested in a short-term money market account as deemed appropriate by the trustee. The participant loans are valued at cost which approximates fair value. Plan Expenses Brokerage commissions, transfer taxes and other charges and expenses in connection with the purchase or sale of securities are charged against the trust fund and added to the cost of such securities, or deducted from the sale proceeds, as the case may be. Any remaining costs of administering the plan are currently paid by ADM and its affiliates. While it is anticipated that ADM and its affiliates will continue to pay these costs, the Plan does permit the reasonable expenses of administering the Plan to be paid from the trust fund. There are no charges or deductions, other than taxes, that may be made against the trust fund other than those described in this summary. Plan Year The Plan year is the twelve month period ending December 31, corresponding to the tax year of the Company. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. Description of the Plan General The Plan is a defined contribution plan available to substantially all hourly employees of the Company who have completed one year of service. The 6 PAGE 7 ADM Savings And Investment Plan For Hourly Employees Notes to Financial Statements (continued) Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. All plan assets are held and managed by National City Bank of Minneapolis (trustee of the Plan). The trust will continue for an indefinite period of time as provided by the Plan. Contributions Under the terms of the Plan, employees electing to participate can generally contribute from 1% up to as much as 10% of their compensation as defined by the Plan document to the Plan, the maximum determined by the participant's participating location. The Company match varies by location. Substantially all contributions are received from the Company in the form of Archer Daniels Midland Company common stock as determined by location and all contributions are immediately vested to the participant. Employees should refer to the appendix to the Plan applicable to their participating location for more complete information regarding employee contribution and employer match limitations. Participant Loans Effective January 1, 1997, participants may borrow from their fund accounts a minimum of $1,000 up to the lessor of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan fund. A maximum of one loan may be outstanding to a participant at one time. Loans are allowed only for education, medical expenses, and primary home purchases. An education loan or a medical expense loan is available for up to 5 years, and a home purchase loan is available for up to 10 years. The loans are secured by the balance in the participant's account and bear interest at a rate equal to the prime rate plus one percent. Principal and interest is repaid ratably through payroll deductions, with payments taken from each paycheck. Withdrawals The full value of an employee's account is payable following termination of employment. Withdrawal of shares acquired under 401(k) provisions is subject to hardship restrictions. 7 PAGE 8 ADM Savings And Investment Plan For Hourly Employees Notes to Financial Statements (continued) Plan Mergers During the year ended December 31, 1997, the assets and liabilities of savings plans covering the hourly employees of recently acquired ADM subsidiaries were merged into the plan, as is the policy of ADM. 3. Investments The Plan's investments are held by a bank administered trust fund. During 1997 and 1996, the Plan's investments (including investments bought, sold, as well as held during the year) appreciated (depreciated) in fair value as follows: [CAPTION] Net Appreciation (Depreciation) in Fair Value Fair Value at During Year End of Year ______________________________________ Year ended December 31, 1997 Cash equivalents $ - $ 110,887 Archer Daniels Midland Company common stock (495,194) 42,164,474 Pfizer Incorporated common stock2,678,724 5,676,108 Commingled fixed income fund 1,160 323,288 Equity mutual funds 3,736 691,940 Commingled Capital Contract Fund 12,789 193,303 Participant loans - 277,651 _________ __________ $2,201,215 $ 49,437,651 ========= ========== Year ended December 31, 1996 Cash equivalents $ - $ 46,579 Archer Daniels Midland Company common stock 5,823,092 34,659,240 Pfizer Incorporated common stock862,691 3,807,293 Commingled fixed income fund (8,264) 335,087 Equity mutual funds 20,605 308,238 Commingled Capital Contract Fund 12,095 171,358 __________ __________ $6,710,219 $ 39,327,795 ========== ==========
8 PAGE 9 ADM Savings And Investment Plan For Hourly Employees Notes to Financial Statements (continued) At December 31, 1997 and 1996, the fair value of the Archer Daniels Midland Company common stock and the Pfizer Incorporated common stock each represented 5% or more of the Plan's net assets. 4. Transactions with Parties-in-Interest During the two years ended December 31, 1997, the Plan had the following transactions related to Archer Daniels Midland Company common stock: 1997 1996 _______________________ Number of common shares contributed 451,784 388,674 Number of common shares purchased 17,898 17,309 Cost of common shares purchased $367,240 $336,076 Cash dividends received $350,175 $281,073 Shares received through stock dividends88,251 71,004 Number of common shares sold 103,132 84,332 Market value of common shares sold$2,129,733 $1,675,050 Cost of common shares sold $1,324,138 $1,201,657 5. Plan Terminations Although it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time. Upon termination, all amounts in participants' accounts are 100% vested. 6. Income Tax Status The Plan has received a determination letter from the Internal Revenue Service, dated April 5, 1996 stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986 (the "Code"). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the Code. Distributions of benefits to participants, their estates or beneficiaries, generally are subject to federal income tax as either ordinary income or capital gain depending on the event giving rise to the distribution and the method used. 9 PAGE 10 7. Year 2000 Issue (unaudited) The Plan Sponsor has developed a plan to modify its internal information technology to be ready for the year 2000 and has begun converting critical data processing systems. The project also includes determining whether third party service providers have reasonable plans in place to become year 2000 compliant. The Plan Sponsor currently expects the project to be substantially complete by early 1999. The Plan Sponsor does not expect this project to have a significant effect on plan operations. 8. Subsequent Events The Company intends to convert the Plan to an employee stock ownership plan (ESOP), effective April 1, 1998. Most features of the plan, including employee and employer contributions, loans and withdrawal and distribution options will remain unchanged. IRS regulations require ESOPs to offer investment options to employees age 55 and older with 10 or more years of service. 10 PAGE 11 ADM Savings And Investment Plan For Hourly Employees EIN: 41-0129150 Plan: 027 Item 27a--Schedule of Assets Held for Investment Purposes December 31, 1997 [CAPTION] Description of Investment Including Identity of Issue, Maturity Date, Rate of Borrower, Lessor or Interest, Par or Similar Party Maturity Value Cost Current Value National City Bank-Prime Cash Money Market Fund * 94,073 units $ 94,073$ 94,073 Vista Premier US Government Money Market Fund 8,696 units 8,696 8,696 Frank Russell--Short-term Investment Fund 8,118 units 8,118 8,118 _________ _________ 110,887 110,887 Archer Daniels Midland Company * 1,944,138 shares of common stock31,351,38642,164,474 Pfizer Incorporated 76,125 shares of common stock 707,121 5,676,108 Equity mutual funds Frank Russell--Real Estate Securities Fund 1,768 units 46,700 54,552 Frank Russell--Equity I 2,984 units 89,566 91,045 Frank Russell--Equity II 673 units 19,521 22,186 Frank Russell--Equity III 4,953 units 148,948 147,591 Frank Russell--Equity Q 2,563 units 84,753 92,004 Frank Russell--International Fund3,567 units129,434 123,428 Dreyfus A BDS Plus Fund 568 units 8,222 8,342 Dreyfus Appreciation Fund 130 units 4,004 4,221 Dreyfus New Leaders Fund 120 units 5,314 5,340 Janus Fund 314 units 8,514 7,808 Templeton Foreign Fund Cl11,091 units 11,995 10,854 Vista Balanced Fund A 770 units 11,197 11,441 Vista Capital Growth Fund ClA485 units 20,708 21,136 ADM Savings And Investment Plan For Hourly Employees Item 27a--Schedule of Assets Held for Investment Purposes (continued) Vista Growth & Income Fund ClA452 units 19,213 18,928 Vista US Treasury Income Fund A355 units 3,930 4,015 Frank Russell--Global Balanced Fund 722 units14,666 15,760 Frank Russell--Domestic Conservative Balanced Fund 314 units 4,834 5,224 Frank Russell--Aggressive Balanced Fund 1,828 units 21,788 23,172 Frank Russell--Global Equity Fund 1,039 units23,543 24,893 __________ __________ 676,850 691,940 Frank Russell--Commingled capital 10,912 units179,748 193,303 contract fund Participant loans Various notes bearing interest at 9.25% to 9.50% - 277,651 Commingled fixed income funds Federated High Yield Trust1,680 units 14,443 16,199 Federated International Income Fund 5,967 units 63,150 61,701 Frank Russell--Multistrategy Bond Fund 10,647 units 220,082 229,014 Frank Russell--Diversified Bond Fund 1,571 units 15,555 16,374 __________ __________ 313,230 323,288 __________ __________ Total assets held for investment purposes $33,339,222 $49,437,651
========== ========== * Indicates party-in-interest to the Plan. 11 PAGE 12 [CAPTION] ADM Savings And Investment Plan For Hourly Employees EIN: 41-0129150 Plan: 027 Item 27d--Schedule of Reportable Transactions Year ended December 31, 1997 Identity Description Purchase Selling Cost of Current Net of Party of Asset/ Price Price Asset Value of Gain Involved Transaction Asset on (Loss) Transactio n Date Category (iii)- Series of Transactio ns National Prime Cash City Bank Money Market Fund: Purchased 2,945,613 $2,945,613 $2,945,61 $2,945,61 units in 144 3 3 transactions Sold 2,898,119 $2,898,1 $ - units in 102 19 2,898,119 2,898,119 transactions Archer Archer Daniels Daniels Company Midland Company common stock Sold 103,132 shares in 61 805,595 transactions 2,129,73 1,324,138 2,129,733 3 Purchased 17,898 shares in 7 367,240 transactions 367,240 367,240
There were no category (i), (ii) or (iv) transactions during the year. 12 PAGE 13 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed by the undersigned thereunto duly authorized. ARCHER DANIELS MIDLAND COMPANY /s/ DOUGLAS J. SCHMALZ Douglas J. Schmalz Vice President and Chief Financial Officer Dated: June 25, 1998 13 PAGE 14 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-58387 dated April 3, 1995) pertaining to the ADM Savings and Investment Plan for Hourly Employees of our report dated May 11, 1998 with respect to the financial statements and schedules of the ADM Savings and Investment Plan for Hourly Employees included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Minneapolis, Minnesota June 25, 1998 14 -----END PRIVACY-ENHANCED MESSAGE-----