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 September 30, 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--530,169,008 shares
(September 30, 1995)
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PART I - FINANCIAL INFORMATION
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
______________________
(In thousands, except
per share amounts)
<S> <C> <C>
Net sales and other operating income $3,120,738 $3,015,223
Cost of products sold and other
operating costs 2,796,407 2,670,404
_________ _________
Gross Profit 324,331 344,819
Selling, general and administrative 98,721 100,309
expenses
_________ _________
Earnings From Operations 225,610 244,510
Other income (expense) 21,515 (15,556)
_________ _________
Earnings Before Income Taxes 247,125 228,954
Income taxes 84,023 74,410
_________ _________
Net Earnings $163,102 $154,544
========= =========
Average number of shares outstanding 530,744 541,334
Net earnings per common share $.31 $.28
Dividends per common share $.024 $.015
</TABLE>
See notes to consolidated financial statements.
2
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1995
(In thousands)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 658,828 $454,593
Marketable securities 482,326 664,690
Receivables 1,062,352 1,013,562
Inventories 1,585,897 1,473,896
Prepaid expenses 122,556 105,904
_________ _________
_ _
Total Current Assets 3,911,959 3,712,645
Investments and Other Assets
Investments in and advances to 505,999 502,698
affiliates
Long-term marketable securities 1,688,353 1,604,219
Other assets 195,576 175,044
_________ _________
_ _
2,389,928 2,281,961
Property, Plant and Equipment
Land 112,282 113,098
Buildings 1,117,506 1,109,249
Machinery and equipment 5,489,504 5,443,561
Construction in progress 727,967 642,825
Less allowances for depreciation (3,614,981) (3,546,452)
_________ _________
_ _
3,832,278 3,762,281
_________ _________
_ _
$10,134,165 $9,756,887
========= =========
</TABLE>
See notes to consolidated financial statements.
3
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30,JUNE 30,
1995 1995
(In thousands)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 52,193 $ -
Accounts payable 863,960 725,046
Accrued expenses 478,873 431,725
Current maturities of long-term debt 17,207 15,614
__________ _________
Total Current Liabilities 1,412,233 1,172,385
Long-Term Debt 2,069,697 2,070,095
Deferred Credits 560,819 538,351
Income taxes 102,211 121,891
Other
__________ __________
663,030 660,242
Shareholders' Equity
Common stock 3,632,447 3,668,977
Reinvested earnings 2,356,758 2,185,188
__________ __________
5,989,205 5,854,165
__________ __________
$10,134,165 $ 9,756,887
========== ==========
</TABLE>
See notes to consolidated financial statements.
4
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
______________________
(In thousands)
<S> <C> <C>
Operating Activities
Net earnings $ 163,102 $ 154,544
Adjustments to reconcile to net cash
provided by operations
Depreciation and amortization 96,453 95,069
Deferred income taxes 4,229 3,501
Amortization of long-term debt discount 6,149 5,297
Other (22,313) 9,872
Changes in operating assets and liabilities
Receivables (78,735) (28,580)
Inventories (127,907) 100,104
Prepaid expenses (16,806) (21,070)
Accounts payable and accrued expenses201,840 109,103
_______ _______
Total Operating Activities 226,012 427,840
Investing Activities
Purchases of property, plant and equipment(176,370) (146,352)
Business acquisitions (23,390) -
Investments in and advances to affiliates(13,864) (20,819)
Purchases of marketable securities (219,351) (778,761)
Proceeds from sales of marketable securities415,838 462,376
Other (1,241)
_______ _______
Total Investing Activities (18,378) (483,556)
Financing Activities
Long-term debt borrowings 6,305 -
Long-term debt payments (5,103) (17,986)
Net borrowings under line of credit agreements54,193 76,287
Purchases of treasury stock (46,404) (1)
Cash dividends and other (12,390) (8,425)
_______ _______
Total Financing Activities (3,399) 49,875
_______ _______
Increase (Decrease) In Cash and Cash Equivalents204,235(5,841)
Cash and Cash Equivalents Beginning of Period454,593 316,394
_______ _______
Cash and Cash Equivalents End of Period$ 658,828 $ 310,553
======= =======
</TABLE>
See notes to consolidated financial statements.
5
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 ended September 30, 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)
<TABLE>
<CAPTION> THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
__________________
(In thousands)
<S> <C> <C>
Investment income $41,823 $ 32,262
Interest expense (40,077) (42,769)
Gain (loss) on marketable
securities transactions 688 (4,824)
Other, including equity in earnings
of affiliates 19,081 (225)
______ ______
$21,515 $(15,556)
====== ======
</TABLE>
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.
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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.
These matters could result in the Company being
subject to monetary damages, fines, penalties and
other sanctions and expenses. However, because of the
early stage of the investigation, the ultimate outcome
of the investigation and the putative class actions
cannot presently be determined. Accordingly, 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 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 financial condition or results of
operations.
7
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ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITIONS
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 $106 million to
$3.1 billion for the quarter from $3 billion last year due
primarily to a 7 percent increase in volume of products sold.
This increase was partially offset by a 1 percent decrease in
average selling prices, the sale of the Company's British Arkady
and Supreme Sugar subsidiaries 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:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
(In millions)
<S> <C> <C>
Oilseed products $1,856 $ 1,677
Corn products 616 675
Wheat and other milled products 403 353
Other products 246 310
_____ _____
$3,121 $ 3,015
</TABLE> ===== =====
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Sales of oilseed products increased 11% to $1.9 billion due
primarily to increased volume, including sales of acquired
businesses, as good demand for meal products both in the export
and domestic markets contributed to favorable oilseed processing
market conditions. Sales of corn products decreased 9% to $616
million due primarily to reduced sales volumes and to a lesser
extent lower average selling prices. Sales of wheat and other
milled products increased 14% due principally to increased
average selling prices of wheat flour which resulted from the
higher cost of raw materials. The decrease in sales of other
products was due 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 $126
million to $2.8 billion for the quarter due primarily to the 7%
increased in volume of products sold and to a lesser extent
higher corn and wheat raw materials commodity prices.
The $20 million decrease in gross profit for the quarter to $324
million can be attributed to a $25 million decrease due to the
combined effect of higher raw material commodity prices and
lower average selling prices and a $15 million decrease due to
divested operations. These decreases were partially offset by a
$20 million increase in gross profit due to higher sales
volumes.
Selling, general and administrative expenses decreased $2
million to $99 million due primarily to $11 million of expense
attributable to recently divested operations which were
partially offset by general cost increases in support of
increased sales volumes.
The increase in other income (expense) for the quarter resulted
primarily from the $15 million gain on the sale of the Company's
Supreme Sugar Company subsidiary and to a lesser extent
increased investment income, due to both higher levels of
invested funds and higher interest rates, increased gains on
marketable securities transactions and increased equity in
earnings of unconsolidated affiliates.
The increase in income taxes for the quarter resulted primarily
from higher pretax earnings. The Company's effective income tax
rate for the quarter was 34 percent compared to 33 percent last
year.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended September 30, 1995, the Company's
liquidity continued to improve as cash and marketable securities
net of short-term debt increased $54 million to $2.8 billion and
its capital resources were strengthened by a $135 million
increase in net worth to $6 billion. The Company's ratio of
long-term liabilities to total capital at September 30, 1995 was
approximately 24 percent.
As discussed in Note 4 to the 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. However, because of the early
stage of the investigation, the ultimate outcome of these
matters cannot presently be determined. Accordingly, no
provision for any liability that may result therefrom has been
made in the accompanying consolidated financial statements.
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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.
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
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 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-one putative
class action antitrust suits involving the sale of
high fructose corn syrup. Seventeen 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.
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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-B-1888-J.
The Company, along with other companies, also has been
named as a defendant in at least four 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 of Stanislaus, California and is
encaptioned St. Stan's Brewing Co. v. Archer-Daniels-
Midland Co., et al., Civil Action No. 37237. The
other two 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.
The Company has been named as a defendant in at least
eleven 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 the Central District of Illinois
and is encaptioned Walker Farms, Inc. v. Archer-
Daniels-Midland Co., Civil Action No. 95-2186. The
Company also has been named as a defendant in at least
one putative class action antitrust suit filed in
California state court and at least one putative class
action antitrust suit filed in Alabama state court
involving the sale of lysine. The California action
alleges 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
seeks an injunction against continued alleged illegal
conduct, treble damages of an unspecified amount,
attorneys fees and costs, restitution and other
unspecified relief. The putative class in the
California action comprises certain indirect
purchasers of lysine in the State of California from
February 1992 until at least September 1995. This
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 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 lysine, and
seeks an injunction against continued alleged illegal
conduct, damages of an unspecified amount, attorneys
fees and costs, and other unspecified relief. The
Alabama putative class comprises certain indirect
purchasers of lysine from August 1993 until August
1995. This 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 Company, along with other companies, has been
named as a defendant in at least four putative class
action antitrust suits involving the sale of citric
acid. Three 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
period 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. 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 two putative class
action antitrust suits involving the sale of both high
fructose corn syrup and citric acid. One of these
actions alleges violations of the California antitrust
and unfair competition laws, including allegations
that the defendants agreed to fix, stabilize and
maintain at
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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,
restitution and other unspecified relief. The
putative class in this case comprises certain direct
purchasers of high fructose corn syrup and citric acid
in the State of California from January 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 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 of Boone County,
West Virginia, and is encaptioned Freda's v. Archer-
Daniels-Midland Co., et al., Civil Action No. 95-C-
125.
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. The Company and the individual
defendants have moved to dismiss this consolidated
complaint.
The Company and its directors also have been named as
defendants in a putative class action suit encaptioned
Loudon v. Archer-Daniels-Midland Co., 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 Company and the
individual defendants have moved to dismiss this
complaint. 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 Co., et al. Civil
Action No. 95-C-2269, alleging violations of analogous
provisions of federal securities law.
The Company and the individual defendants named in the
actions described above intend to vigorously defend
them. These actions could result in the Company being
subject to monetary damages, fines, penalties and
other sanctions and expenses. However, because of the
early stage of the investigation and civil litigation,
the ultimate outcome of the investigation and the
putative class actions cannot be determined.
Accordingly, no provision for any liability that may
result therefrom has been made in the consolidated
financial statements.
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.
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Item 2. Changes in Securities
a) In July, 1995 the Board of Directors
declared a 5 percent stock dividend which was
paid on September 18, 1995, to shareholders of
record on August 21, 1995.
Item 6. Exhibits and Reports on Form 8-K
a) Form 8-K reports were filed with the
Securities and Exchange Commission on July 3,
1995 as amended on Form 8-K/A on July 26, 1995,
setting forth information regarding the
investigation into possible violations of federal
antitrust laws in the food additives industry,
specifically citric acid, high fructose corn
syrup and lysine, and on July 20, 1995, as
amended on Form 8-K/A on July 26, 1995, setting
forth information regarding: (1) various
shareholder derivative actions and putative class
action suits filed against the Company and
certain of its directors and executive officers;
(2) formation of a committee of nine outside
directors to direct the Company's response to
matters related to the government investigations;
and (3) authorization by the Board of Directors
to purchase up to 20 million shares of the
Company's issued and outstanding common stock.
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: November 14, 1995
13
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0
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