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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
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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
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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
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ADM Savings and Investment Plan for Hourly Employees
Statements Of Net Assets Available for Benefits
[CAPTION]
<TABLE>
December 31
1997 1996
___________________________
<S> <C> <C>
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
========== ==========
</TABLE>
See accompanying notes.
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ADM Savings and Investment Plan for Hourly Employees
Statement of Changes in Net Assets Available for Benefits
[CAPTION]
<TABLE>
Year ended December 31
1997 1996
___________________________
<S> <C> <C>
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
========== ==========
</TABLE>
See accompanying notes.
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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
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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.
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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]
<TABLE>
<S> <C> <C>
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
========== ==========
</TABLE>
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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.
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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.
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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]
<TABLE>
<S> <C> <C> <C>
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
</TABLE> ========== ==========
* Indicates party-in-interest to the Plan.
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[CAPTION]
<TABLE>
ADM Savings And Investment Plan For Hourly Employees
EIN: 41-0129150
Plan: 027
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
There were no category (i), (ii) or (iv) transactions during the year.
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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
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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
