MPLS:0006-0066505
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, 1999
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 EMPLOYEE STOCK OWNERSHIP 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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Audited Financial Statements and
Schedules
ADM Employee Stock Ownership Plan
for Hourly Employees
Years ended December 31, 1999 and 1998
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ADM Employee Stock Ownership Plan
for Hourly Employees
Audited Financial Statements and Schedules
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors 1
Audited Financial Statements and Schedules
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits3
Notes to Financial Statements 4
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes at End of Year 9
Schedule H, Line 4j - Schedule of Reportable Transactions10
Schedule G, Part III - Schedule of Nonexempt Transactions11
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Report of Independent Auditors
Administrative Committee
ADM Employee Stock Ownership Plan
for Hourly Employees
We have audited the accompanying statements of net assets
available for benefits of the ADM Employee Stock Ownership
Plan for Hourly Employees as of December 31, 1999 and 1998,
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 auditing
standards generally accepted in the United States. 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, 1999 and
1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with
accounting principles generally accepted in the United
States.
Our audits were performed 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 at end of year as of December 31, 1999,
reportable transactions and non-exempt transactions for the
year then ended, are presented for purposes of additional
analysis and are not a required part of the financial
statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security
Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures
applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in
the relation to the financial statements taken as a whole.
/s/ Ernst & Young
LLP
Minneapolis, Minnesota
June 13, 2000
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ADM Employee Stock Ownership Plan
for Hourly Employees
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
<S> <C> <C>
December 31
1999 1998
Assets
Cash $ $
63 66
Investments, at fair value 53,193,071 54,072,203
Income receivable 38 -
Contributions receivable from employer 543,867 884,427
Contributions receivable from employees 780,344 1,441,179
Loan repayments receivable 17,747 19,565
Net assets available for benefits $54,535,13 $56,417,44
0 0
See accompanying notes.
</TABLE>
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ADM Employee Stock Ownership Plan
for Hourly Employees
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
<S> <C> <C>
Year ended December
31
1999 1998
Additions:
Contributions from Archer Daniels Midland $ $
Company 5,558,187 5,454,619
Contributions from participating 7,835,466 8,125,492
employees
Transfer of assets from another plan 2,404,315 1,767,654
Dividend and interest income 2,688,374 2,369,170
18,486,342 17,716,935
Deductions:
Benefit payments:
Common stock 1,407,219 2,382,966
Cash 2,002,770 3,514,220
3,409,989 5,897,186
15,076,353 11,819,749
Net transfers out
Net realized and unrealized depreciation
in fair value (16,958,66 (5,694,111
of investments 3) )
Net (decrease)/increase (1,882,310 6,125,638
)
Net assets available for benefits at 56,417,440 50,291,802
beginning of year
Net assets available for benefits at end $54,535,13 $56,417,44
of year 0 0
See accompanying notes.
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</TABLE>
Page 7
1. Significant Accounting Policies
Basis of Accounting
The accounting records of the ADM Employee Stock Ownership
Plan for Hourly Employees (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 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 the Plan
Sponsor, Archer Daniels Midland Company ("ADM" or the
"Company") and its affiliates. While it is anticipated 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.
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 all
hourly employees of the Company who have completed one year
of service. The 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.
The Company converted the Plan, formerly called the ADM
Savings and Investment Plan for Hourly Employees, to an
employee stock ownership plan ("ESOP"), effective April 1,
1998. Most features of the Plan, including employee and
employer contributions, loans and withdrawals, and
distribution options remained unchanged. In accordance with
Internal Revenue Service regulations for ESOPs, the Plan
offers investment options to employees age 55 and older with
ten or more years of service.
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2. Description of the Plan (continued)
All Plan assets are held and managed by Hickory Point Bank &
Trust, FSB (trustee of the Plan as of October 1, 1998). The
former trustee was National City Bank of Minneapolis. The
trust will continue for an indefinite period of time as
provided by the Plan. Hickory Point Bank & Trust, FSB is a
subsidiary of ADM.
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 contributions and employer match
limitations.
The investment option that allows participants age 55 and
older with ten years of service to reallocate their ESOP
accounts into the various investment funds maintained under
the Plan became available January 1, 1999. Shares of ADM
stock added to the participants' accounts after April 1,
1998 may be reallocated.
Participant Loans
Participants may borrow from their fund accounts a minimum
of $1,000 up to the lesser of $50,000 or 50% of their
account balance. Loan transactions are treated as a transfer
from (to) the investment fund. A maximum of one loan may be
outstanding to a participant at any time.
Loans are allowed only for purposes of educational and
medical expenses and for purchases of a primary residence.
Educational or medical expense loans are available for up to
five years, and a home purchase loan is available for up to
ten 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 1% at time of issuance. Principal and interest are
repaid ratably through payroll deductions, with payments
taken from each paycheck.
Withdrawal
The full value of an employee's account is payable following
termination of employment. Withdrawals by active employees
are permitted for two reasons: upon reaching age 59 1/2 and
for specific hardship circumstances, and only after
receiving a loan available to the participant under the loan
program. Withdrawal of shares acquired under 401(k)
provisions is subject to hardship restrictions.
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2. Description of the Plan (continued)
Plan Mergers
During the years ended December 31, 1999 and 1998, the
assets and liabilities of certain 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 1999 and 1998, the Plan's investments
(including investments bought, sold, as well as held during
the year) appreciated (depreciated) in fair value as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Net
Appreciation
(Depreciation
) in Fair Fair Value
Value During at
Year End of
Year
Year ended December 31, 1999:
Cash equivalents $ $
- 53,807
Archer Daniels Midland Company common (14,578,622) 41,782,995
stock
Pfizer Incorporated common stock (2,138,994) 5,222,762
Vanguard Wellington Fund (125,057) 676,549
Equity mutual funds (3,758) 2,867,843
Invesco Stable Value Fund - 1,919,508
Participant loans - 669,607
$(16,846,431) $53,193,07
1
Year ended December 31, 1998:
Cash equivalents $ $
- 30,298
Archer Daniels Midland Company common (9,066,049) 43,094,771
stock
Pfizer Incorporated common stock 3,303,180 7,479,625
Balanced Fund 4,315 255,424
Equity mutual funds 57,199 990,520
Stable Value Fund 7,244 1,779,667
Participant loans - 441,898
$ $54,072,20
(5,694,111) 3
</TABLE>
At December 31, 1999 and 1998, 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.
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4. Nonparticipant-Directed Investments
Information about the net assets and the significant
components of the changes in net assets relating to the
nonparticipant-directed investments is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
December 31
1999 1998
Net assets:
Archer Daniels Midland Company common $41,782,99 $43,094,77
stock 5 1
Total $41,782,99 $43,094,77
5 1
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Year ended
December
31, 1999
Changes in net assets:
Contributions:
Employer` $
5,558,187
Employee 7,835,466
Dividend income 2,424,635
Net realized and unrealized depreciation in fair (14,177,257
value of investments )
Distributions to participants (2,892,642)
Transfers to participant-directed investments (60,165)
$
(1,311,776)
</TABLE>
5. Transactions with Parties-in-Interest
During the years ended December 31, 1999 and 1998, the Plan
had the following transactions related to Archer Daniels
Midland Company common stock:
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
Number of common shares contributed 862,061 632,764
Number of common shares purchased 1,345,453 23,931
Cost of common shares purchased $16,856,25 $447,271
7
Cash dividends received $600,173 $425,950
Shares received through stock dividends 141,808 110,973
Number of common shares sold 415,916 122,546
Market value of common shares sold $3,487,060 $2,366,977
Cost of common shares sold $6,577,319 $1,575,291
</TABLE>
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6. 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.
7. 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
(the "Code") and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its
qualification. The Plan administrator believes the Plan is
being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the
Plan is qualified and the related trust is tax-exempt.
Subsequent amendments have been structured to, and are
intended to, maintain the Plan's qualified status.
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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ADM Employee Stock Ownership Plan
for Hourly Employees
EIN: 41-0129150
Plan #027
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Description of
Identity of Issue, Investment Including Current
Borrower, Maturity Date, Rate Cost Value
Lessor or Similar Party of Interest, Par or
Maturity Value
Cash equivalents:
Vista Premier U.S.
Government Money Market 25,925 units $ $
Fund 25,925 25,925
SEI Liquid Asset Prime
Obligations Fund #12 27,882 units 27,882 27,882
53,807 53,807
Archer Daniels Midland 3,446,020 shares of 50,878,544 41,782,99
Company* common stock 5
Pfizer Incorporated 161,010 shares of 725,945 5,222,762
common stock
Invesco Stable Value Fund 1,919,508 units 1,919,508 1,919,508
Vanguard Wellington Fund 24,197 units 599,898 676,549
Equity mutual funds:
Vangaurd S & P 500 Index 14,278 units 1,540,641 1,932,183
Fund
Hotchkis & Wiley 2,171 units 57,638 57,312
International Fund
T. Rowe Mid-Cap Growth Fund 13,858 units 502,238 556,101
Janus Fund 1,320 units 60,229 58,127
Templeton Foreign Fund CLI 3,310 units 34,616 37,140
Vista Balanced Fund A 1,852 units 30,680 28,611
Vista Capital Growth Fund 1,637 units 74,066 68,623
CLA
Vista Growth & Income Fund 1,508 units 67,552 59,403
CLA
Vista U.S. Treasury Income 1,006 units 10,728 10,547
Fund A
Dreyfus A BDS Plus Fund 969 units 13,077 12,981
Dreyfus Appreciation Fund 381 units 17,417 17,402
Dreyfus New Leader Fund 580 units 30,578 29,413
2,439,460 2,867,843
Participant loans Various notes bearing
interest at 8.75% to 0 669,607
9.50%
Total assets held for
investment purposes $56,617,16 $53,193,1
2 07
</TABLE>
*Indicates a party-in-interest to the Plan.
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ADM Employee Stock Ownership Plan
for Hourly Employees
EIN: 41-0129150
Plan #027
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
<C>
Current
Value
of Asset
Purchase Selling Cost on Net
Identity of Party Description of Price Price of Asset Transacti Gain/
Involved Asset/Transaction on (Loss)
Date
Category (iii)--Series of Transactions in Excess
of 5% of Net Assets
Hickory Point Bank SEI Liquid Asset Prime
Obligations Fund #12:
Purchased 3,974,833 shares
in $ $ $
185 transactions 3,974,833 3,974,833 3,974,833
Sold 3,946,951 shares in $3,946,95 3,946,951 3,946,951 $
192 transactions 1 -
Archer Daniels Midland Archer Daniels Midland
Company Company common stock:
Sold 415,916 shares in 353 3,487,060 6,577,319 3,487,060 (3,090,2
transactions 59)
Purchased 1,345,453 shares
in 16,856,25 16,856,25 16,856,25
68 transactions 7 7 7
</TABLE>
There were no category (i), (ii) or (iv) transactions for the year ended
December 31, 1999.
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ADM Employee Stock Ownership Plan
for Hourly Employees
EIN: 41-0129150
Plan #027
Schedule G, Part III - Schedule of Nonexempt Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
(b) Relationship
(a) Identity of to Plan, Employer (c) Description of Transactions Including Maturity
Party Involved or Other Date,
Party-in-Interest Rate of Interest, Collateral, Par or Maturity
Value
Archer Daniels Midland Employer/Plan The Plan Sponsor failed to timely remit participant
Company Sponsor 401(k) contributions in February 1999, due to
administrative error. The amount totaled $604,882
and has been subsequently deposited.
There was no earnings impact to the participants as
a result of the delay. The subsequent deposit of
treasury stock shares of the Plan Sponsor was made
at the appropriate cost, as if the deposit had
been made timely.
</TABLE>
Columns (d) through (j) are not applicable.
*Indicates a party-in-interest to the Plan.
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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 28, 2000
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