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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
1995 1994
-------------------------
(In thousands, except
per share amounts)
<S> <C>
<C>
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
</TABLE>
See notes to consolidated financial statements.
2
PAGE 3
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER
31,
1995
1994
-----------------
- ---------
(In thousands,
except
per share
amounts)
<S> <C>
<C>
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
</TABLE>
See notes to consolidated financial statements.
3
PAGE 4
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1995
-------------------------
(In thousands)
<S> <C>
<C>
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
========= ==========
== =
</TABLE>
See notes to consolidated financial statements.
4
PAGE 5
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1995
-------------------------
(In thousands)
<S> <C>
<C>
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
========== =========
</TABLE>
See notes to consolidated financial statements.
5
PAGE 6
ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31,
1995 1994
-----------------------
(In thousands)
<S> <C>
<C>
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
======== ========
</TABLE>
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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1995 1994 1995 1994
-------------------------------------
(In thousands) (In thousands)
<S> <C> <C> <C>
<C>
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)
======= ======= ======= =======
</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.
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:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1995 1994 1995 1994
_______________ ______________
___ ___
(In millions) (In millions)
<S> <C> <C> <C>
<C>
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
======
====== ====== ======
</TABLE>
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:
<TABLE>
<CAPTION>
Nominee Shares Cast Shares
For Withheld
______________ _______________
___________
<S> <C> <C>
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
</TABLE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 773,903
<SECURITIES> 330,651
<RECEIVABLES> 1,062,469
<ALLOWANCES> 0
<INVENTORY> 2,350,840
<CURRENT-ASSETS> 4,630,781
<PP&E> 7,610,131
<DEPRECIATION> 3,703,494
<TOTAL-ASSETS> 10,640,366
<CURRENT-LIABILITIES> 1,884,343
<BONDS> 2,073,507
<COMMON> 3,498,209
0
0
<OTHER-SE> 2,484,052
<TOTAL-LIABILITY-AND-EQUITY> 10,640,366
<SALES> 6,535,796
<TOTAL-REVENUES> 6,535,796
<CGS> 5,814,613
<TOTAL-COSTS> 5,814,613
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82,633
<INCOME-PRETAX> 589,504
<INCOME-TAX> 200,432
<INCOME-CONTINUING> 389,072
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 389,072
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
</TABLE>
