Page 1
MANAGEMENT'S DISCUSSION OF
OPERATIONS AND FINANCIAL CONDITION - JUNE 30, 2000
Operations
The Company is in one business segment - procuring, transporting,
storing, processing and merchandising agricultural commodities
and products. A summary of net sales and other operating income
by classes of products and services is as follows:
<TABLE>
<CAPTION> <S> <C> <C>
<C>
2000 1999 1998
(in millions)
Oilseed products $7,219 $8,494 $10,15
2
Corn products 1,950 1,855 2,154
Wheat and other milled 1,358 1,378 1,491
products
Other products and 2,350
services 2,556 2,312
$12,87 $14,28 $16,10
7 3 9
</TABLE>
2000 compared to 1999
Net sales and other operating income decreased 10 percent to
$12.9 billion for 2000 due principally to decreases in average
selling prices of 11 percent. Sales of oilseed products
decreased 15 percent to $7.2 billion due primarily to lower
average selling prices reflecting the lower cost of raw
materials. Sales of corn products increased 5 percent due
primarily to increased sales volume and increased average selling
price of the Company's fuel alcohol arising from good demand from
existing sales markets and expansion into new markets due to
higher gasoline prices and relative ethanol pricing. These
increases more than offset slight decreases in sales volumes of
the Company's sweetener and amino acid products. Sales of wheat
and other milled products decreased 1 percent to $1.4 billion due
principally to lower average selling prices reflecting the lower
cost of raw materials. This decrease was partially offset by
sales attributable to recently acquired operations in the United
Kingdom and the Caribbean. The decrease in sales of other
products and services was due primarily to decreased sales
volumes and lower average selling prices of both the Company's
cocoa and formula feed products. This decrease was partially
offset by increased grain merchandising revenues.
Cost of products sold and other operating costs decreased $1.4
billion to $11.7 billion due primarily to lower average raw
material costs arising from an abundant worldwide supply of
agriculture commodities.
Gross profit decreased $12 million to $1.2 billion in 2000 due
primarily to a $108 million charge to cost of products sold
related to the abandonment of certain long-lived assets and other
asset write-downs. This decrease was partially offset by
increased grain merchandising margins.
1
Page 2
Selling, general and administrative expenses increased $28
million for the year to $729 million due principally to $26
million of expenses attributable to recently acquired operations
and to newly-established international merchandising offices.
Increased bad debt expense and increased severance costs
associated with facility closures and consolidations were offset
by decreased advertising expenses.
Other expense increased $26 million to $137 million due
principally to decreased gains on marketable securities
transactions and increased interest expense due to both higher
average borrowing levels and higher short-term borrowing rates.
These increases were partially offset by increased equity in
earnings of unconsolidated affiliates resulting primarily from
higher valuations of the Company's private equity funds.
The decrease in income taxes for 2000 resulted primarily from a
$60 million tax credit related to a redetermination of foreign
sales corporation benefits for prior years and the resolution of
various other tax issues. To a lesser extent, income taxes
decreased due to lower pretax earnings. The Company's effective
income tax rate for 2000, excluding the aforementioned credit,
was 32 percent compared to an effective rate of 33 percent for
1999.
1999 compared to 1998
Net sales and other operating income decreased 11 percent to
$14.3 billion for 1999 due principally to decreases in average
selling prices of 11 percent and in volumes of products sold of 7
percent. These decreases were partially offset by sales of $852
million attributable to recently acquired operations. Sales of
oilseed products decreased 16 percent to $8.5 billion due
primarily to lower average selling prices reflecting the lower
cost of raw materials. Sales volumes of oilseed products
decreased by 8 percent due to weak demand from Asia and Eastern
Europe for both protein meals and vegetable oils as well as new
domestic industry production capacity more than offsetting good
domestic demand for oilseed products. These decreases were
partially offset by sales attributable to recently acquired
operations. Sales of corn products decreased 14 percent for the
year to $1.9 billion as lower average selling prices for the
Company's alcohol and amino acid products more than offset the
increase in average selling price of the Company's sweetener
products. Low gasoline prices have negatively affected average
sales prices of fuel alcohol. Excess production capacity in the
amino acid industry as well as low protein meal and corn prices
have depressed selling prices of the Company's amino acid
products to historically low levels. Sales volumes of both the
alcohol and sweetener products decreased as excess production
capacity in these industries resulted in difficult market
conditions. Sales of wheat and other milled products decreased 8
percent to $1.4 billion due principally to lower average selling
prices reflecting the lower cost of raw materials. Sales volumes
increased slightly for the year due to sales attributable to
recently acquired operations. The increase in sales of other
products and services was due principally to the sales volumes
attributable to the Company's recently acquired feed and cocoa
businesses as well as increased grain merchandising and
transportation revenues. These increases were partially offset by
lower average selling prices for cocoa products.
Cost of products sold and other operating costs decreased $1.7
billion to $13.1 billion due primarily to lower average raw
material costs arising from an abundant worldwide supply of
agricultural commodities and decreased sales volumes. These
decreases were partially offset by costs related to recently
acquired operations.
2
Page 3
Gross profit decreased $149 million to $1.2 billion in 1999 due
primarily to selling price declines exceeding declines in lower
average raw material costs and to lower volumes of products sold.
These decreases were partially offset by gross profit
attributable to recently acquired operations and to increased
grain merchandising and transportation margins.
Selling, general and administrative expenses increased $40
million to $701 million due principally to $78 million of
expenses attributable to recently acquired operations. This
increase was partially offset by a decline in on-going expenses,
primarily legal and litigation related costs.
Other expense of $111 million for 1999 was relatively unchanged
from 1998. Increased interest expense due principally to higher
average borrowing levels and decreased equity in earnings of
unconsolidated affiliates due primarily to lower valuations of
the Company's private equity fund investments were offset by
increased gains on marketable securities transactions.
The decrease in income taxes for 1999 resulted primarily from
lower pretax earnings. The Company's effective income tax rate
for 1999 was 33 percent compared to an effective rate of 34
percent for 1998.
In 1999, the Company incurred an extraordinary charge, net of
tax, of $15 million resulting from the repurchase of a portion of
its 7 percent debentures due May 2011.
Liquidity and Capital Resources
At June 30, 2000, the Company continued to show substantial
liquidity with working capital of $1.8 billion. Capital resources
remained strong as reflected in the Company's net worth of $6.1
billion. The principal source of capital during the year was
funds generated from operations. The principal uses of capital
during the year were investments in property, plant and equipment
expansions, investments in affiliates, and purchases of the
Company's common stock. The Company's ratio of long-term debt to
total capital at year-end was approximately 32 percent. Annual
maturities of long-term debt for the five years after June 30,
2000 are $32 million, $425 million, $273 million, $23 million and
$123 million, respectively.
Commercial paper and commercial bank lines of credit are
available to meet seasonal cash requirements. At June 30, 2000,
the Company had $2.2 billion of short-term bank credit lines.
Standard & Poor's and Moody's rate the Company's commercial paper
as A-1 and P-1, respectively, and rate the Company's long-term
debt as A+ and A1, respectively. In addition to the cash flow
generated from operations, the Company has access to equity and
debt capital through numerous alternatives from public and
private sources in domestic and international markets.
As described in Note 11 to the consolidated financial statements,
the Company has made provisions to cover fines, litigation
settlements and costs related to certain putative class action
antitrust suits and other proceedings. Because of the early
stage of other putative class actions and proceedings, including
those related to high fructose corn syrup, the ultimate outcome
and materiality of these matters cannot presently be determined.
Accordingly, no provision for any liability that may result
therefrom has been made in the consolidated financial statements.
3
Page 4
Market Risk Sensitive Instruments and Positions
The market risk inherent in the Company's market risk sensitive
instruments and positions is the potential loss arising from
adverse changes in commodity prices, marketable equity security
prices, foreign currency exchange rates and interest rates as
described below.
Commodities
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, shifts in global demand created by
population growth and changes in standards of living, and global
production of similar and competitive crops. To reduce price risk
caused by market fluctuations, the Company generally follows a
policy of hedging its inventories and related purchase and sale
contracts. In addition, the Company from time to time will hedge
portions of its production requirements. 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. To obtain a proper matching of revenue and
expense, gains or losses arising from open and closed hedging
transactions are included in inventories as a cost of the
commodities and reflected in the consolidated statements of
earnings when the product is sold.
A sensitivity analysis has been prepared to estimate the
Company's exposure to market risk of its commodity position. The
Company's daily net commodity position consists of inventories,
related purchase and sale contracts, and exchange-traded
contracts, including those to hedge portions of production
requirements. The fair value of such position is a summation of
the fair values calculated for each commodity by valuing each net
position at quoted futures prices. Market risk is estimated as
the potential loss in fair value resulting from a hypothetical 10
percent adverse change in such prices. The results of this
analysis, which may differ from actual results, are as follows.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
2000 1999
Fair Value Fair Value
Market Risk Market Risk
(in millions)
Highest long $254 $25 $319 $32
position
Highest short 293 29 149 15
position
Average position (25) 2 29 3
long (short)
</TABLE>
The decrease in fair value of the average position for 2000
compared to 1999 was principally a result of a decrease in the
daily net commodity position and, to a lesser extent, from a
decrease in quoted futures prices.
Marketable Equity Securities
Marketable equity securities, which are recorded at fair value,
have exposure to price risk. The fair value of marketable equity
securities is based on quoted market prices. Risk is estimated as
the potential loss in fair value resulting from a hypothetical 10
percent adverse change in quoted market prices. Actual results
may differ.
4
Page 5
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
(in millions)
Fair value $576 $743
Market risk 58 74
</TABLE>
The decrease in fair value for 2000 compared to 1999 resulted
primarily from a decrease in quoted market prices and, to a
lesser extent, to disposals of securities.
Currencies
In order to reduce the risk of foreign currency exchange rate
fluctuations, the Company follows a policy of hedging
substantially all transactions, except for amounts permanently
invested as described below, denominated in a currency other than
the functional currencies applicable to each of its various
entities. The instruments used for hedging are readily marketable
exchange-traded futures contracts and forward contracts with
banks. The changes in market value of such contracts have a high
correlation to the price changes in the currency of the related
hedged transactions. The potential loss in fair value for such
net currency position resulting from 10 percent adverse change in
foreign currency exchange rates is not material.
The amount the Company considers permanently invested in foreign
subsidiaries and affiliates and translated into dollars using the
year-end exchange rate is $2.1 billion at June 30, 2000 and $1.8
billion at June 30, 1999. This increase is due to additional
investments and earnings of the subsidiaries and affiliates,
partially offset by a decrease due to changes in exchange rates.
The potential loss in fair value resulting from a hypothetical 10
percent adverse change in quoted foreign currency exchange rates
amounts to $207 million and $183 million for 2000 and 1999,
respectively. Actual results may differ.
Interest
The fair value of the Company's long-term debt is estimated below
using quoted market prices, where available, and discounted
future cash flows based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements. Such
fair value exceeded the long-term debt carrying value. Market
risk is estimated as the potential increase in fair value
resulting from a hypothetical one-half percent decrease in
interest rates.
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
(in millions)
Fair value of long-term debt $3,279 $3,430
Excess of fair value over 238
carrying value 2
Market risk 140 171
</TABLE>
The decrease in fair value for the current year resulted from the
effect of an increase in quoted interest rates.
Page 5
Page 6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is in one business segment - procuring, transporting,
storing, processing, and merchandising agricultural commodities
and products.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries over which the
Company exercises control. Investments in affiliates are carried
at cost plus equity in undistributed earnings since acquisition.
Use of Estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect amounts
reported in its consolidated financial statements and
accompanying notes. Actual results could differ from those
estimates.
Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less at the time of purchase to be
cash equivalents.
Marketable Securities
The Company classifies all of its marketable securities as
available-for-sale. Available-for-sale securities are carried at
fair value, with the unrealized gains and losses, net of income
taxes, reported as a component of shareholders' equity.
Inventories
Inventories, consisting primarily of merchandisable agricultural
commodities and related value-added products, are carried at
cost, which is not in excess of market prices. Inventory cost
methods include the last-in, first-out (LIFO) method, the first-
in, first-out (FIFO) method and the hedging procedure method. The
hedging procedure method approximates FIFO cost by valuing
inventory at market adjusted for gains and losses on forward
purchase and sale contracts and exchange-traded futures.
To reduce price risk caused by market fluctuations, the Company
generally follows a policy of hedging its inventories and related
purchase and sale contracts. In addition, the Company from time
to time will hedge portions of its production requirements. The
instruments used are 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 inventories
as a cost of the commodities and reflected in the consolidated
statements of earnings when the product is sold.
6
Page 7
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. The Company
generally uses the straight-line method in computing depreciation
for financial reporting purposes and generally uses accelerated
methods for income tax purposes. The annual provisions for
depreciation have been computed principally in accordance with
the following ranges of asset lives: buildings - 10 to 50 years;
machinery and equipment - 3 to 30 years.
Asset Abandonments and Write-Downs
The Company recorded a $108 million charge in the fourth quarter
of fiscal year 2000 principally related to the abandonment of
certain long-lived assets and other asset write-downs. The
majority of the long-lived assets were idle and the decision to
abandon was finalized after consideration of the ability to
utilize the assets for their intended purpose, employ the assets
in alternative uses or sell the assets to recover the carrying
value. The remaining long-lived assets were in use in a product
line, which is currently being marketed for sale, but were
written down to fair value to recognize an impairment in the
value of the assets.
Net Sales
The Company follows a policy of recognizing sales at the time of
product shipment. Net margins from grain merchandised, rather
than the total sales value thereof, are included in net sales in
the consolidated statements of earnings. Sales of the Company,
including the sales value of grain merchandised, were $18.6
billion in 2000, $18.5 billion in 1999, and $19.8 billion in
1998, and such sales include export sales of $5 billion in 2000,
$5.2 billion in 1999, and $5.5 billion in 1998.
Per Share Data
Share and per share information has been adjusted to give effect
to all stock dividends, including the 5 percent stock dividend
declared in July 2000 and payable in September 2000. Basic
earnings per common share are determined by dividing net earnings
by the weighted average number of common shares outstanding.
New Accounting Standards
Effective July 1, 2000, the Company adopted Statement of
Financial Accounting Standards Number 133 (SFAS 133) "Accounting
for Derivative Instruments and Hedging Activities". SFAS 133
establishes standards for recognition and measurement of
derivatives and hedging activities. As a result of this adoption,
the Company will record in the first quarter of fiscal 2001 the
cumulative effect of change in accounting adjustment to other
comprehensive income (loss) of $(32 million), net of $19 million
tax benefit, for derivatives which hedge the variable cash flows
of certain forecasted transactions. The fair value of these
derivative instruments was previously classified in inventory.
Effective June 30, 2001, the Company will adopt Emerging Issues
Task Force Issue Number 99-19, "Reporting Revenue Gross as a
Principal Versus Net as an Agent". The adoption of this Issue
will result in the Company reporting revenue including the sales
value of grain merchandised but will have no impact on gross
profit or net earnings.
7
Page 8
<TABLE>
<CAPTION>
<S> <C> <C>
<C>
CONSOLIDATED STATEMENTS OF EARNINGS
Year Ended June 30
2000 1999 1998
(In thousands, except per share
amounts)
Net sales and other operating income $12,876 $14,283,335 $16,108
,817 ,630
Cost of products sold and other 11,657, 13,051,306 14,727,
operating costs 242 670
Gross Profit 1,219,5 1,232,029 1,380,9
75 60
Selling, general and administrative 729,358 701,075 660,692
expenses
Earnings From Operations 490,217 530,954 720,268
Other expense (136,98 (111,121) (110,25
0) 6)
Earnings Before Income Taxes and 353,237 419,833 610,012
Extraordinary Loss
Income taxes 52,334 138,545 206,403
Earnings Before Extraordinary 300,903 281,288 403,609
Loss
- -
Extraordinary loss, net of tax, on (15,324) -
debt repurchase -
Net Earnings $300,90 $265,964 $403,60
3 9
Basic and diluted earnings per
common share
Before extraordinary loss $0.47 $0.43 $0.62
Extraordinary loss on debt (.02)
repurchase - -
After Extraordinary Loss $0.47 $0.41 $0.62
Average number of shares outstanding 637,409 652,694 653,378
See notes to consolidated financial
statements.
</TABLE
8
Page 9
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEETS
June 30
ASSETS 2000
1999
(In
thousan
ds)
CURRENT ASSETS
Cash and cash $681,378
equivalents $477,226
Marketable securities 222,191
454,223
Receivables 1,922,163
2,139,896
Inventories 2,732,694
2,856,884
Prepaid expenses 231,162
234,138
Total Current 5,789,588
Assets 6,162,367
Investments and Other
Assets
Investments in and 1,484,980
advances to affiliates 1,876,633
Long-term marketable 779,916
securities 617,633
Other assets 408,236
489,386
2,673,132
2,983,652
Property, Plant and
Equipment
Land 163,607
163,722
Buildings 1,949,211
2,098,124
Machinery and 8,384,865
equipment 8,702,639
Construction in 675,870
progress 416,546
Less allowances for
depreciation (6,103,95 (5,606,392)
0)
5,567,161
5,277,081
$14,029,8
$14,423,1 81
00
9
Page 10
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <S>
<S>
CONSOLIDATED BALANCE SHEETS
June 30
Liabilities and Shareholders' 2000 1999
Equity
(In
thousan
ds)
Current Liabilities
Short-term debt 1,550,5 1,241,369
71
Accounts payable 2,139,7 2,004,396
44
Accrued expenses 610,735 567,593
Current maturities of long- 31,895 26,907
term debt
Total Current Liabilities 4,332,9 3,840,265
45
Long-Term Debt 3,277,2 3,191,883
18
Deferred Liabilities
Income taxes 560,772 619,752
Other 141,922 137,341
702,694 757,093
Shareholders' Equity
Common stock 5,232,5 5,081,320
97
Reinvested earnings 1,325,3 1,419,321
23
Accumulated other (260,
comprehensive loss (447,677 001)
)
6,110,2 6,240,640
43
$14,423 $14,029,8
,100 81
See notes to consolidated
financial statements.
</TABLE>
10
Page 11
<TABLE>
<CAPTION>
<S> <S> <S>
<S>
CONSOLIDATED STATEMENTS OF CASH FLOWS
June 30
2000 1999 1998
(In
thousands)
Operating Activities
Net earnings
$300, $265,964 $403,6
903 09
Adjustments to reconcile to net
cash provided by operations
Depreciation and amortization
604,2 584,965 526,81
29 3
Asset abandonments and write-downs -
108,4 -
77
Deferred income taxes (23,8
12) 49,676 28,659
Amortization of long-term debt
discount 43,41 37,216 33,297
0
(Gain) loss on marketable (10,1 (101,780) (36,30
securities transactions 66) 3)
Extraordinary loss on debt - -
repurchase 15,324
Other
43,42 95,456 39,292
7
Changes in operating assets and
liabilities
Receivables (278, (294,4
383) 56,946 07)
Inventories (160, (79,811) (150,5
422) 09)
Prepaid expenses (3,33 (63,294) (27,27
8) 5)
Accounts payable and accrued
expenses 191,0 359,185 90,203
71
Total Operating Activities
815,3 1,219,847 613,37
96 9
Investing Activities
Purchases of property, plant and (428, (671,471) (702,6
equipment 737) 83)
Net assets of businesses acquired (30,4 (136,021) (370,5
22) 61)
Investments in and advances to (362, (117,371) (366,9
affiliates, net 072) 68)
Purchases of marketable securities (1,10 (635,562) (1,202
1,100 ,662)
)
Proceeds from sales of marketable
securities 912,9 1,139,466 1,007,
23 373
Increase in other assets (50,0 -
00) -
Total Investing Activities (1,05 (420,959) (1,635
9,408 ,501)
)
Financing Activities
Long-term debt borrowings
108,8 383,735 441,46
95 4
Long-term debt payments (54,6 (88,785) (55,97
09) 2)
Net borrowings under line of credit (338,109)
agreements 316,9 774,03
32 3
Purchases of treasury stock (210, (313,829) (81,15
911) 4)
Cash dividends and other (120, (106,847) (107,7
447) 12)
Total Financing Activities (463,835)
39,86 970,65
0 9
Increase (Decrease) in Cash and (204,
Cash Equivalents 152) 335,053 51,463
Cash and Cash Equivalents Beginning
of Year 681,3 346,325 397,78
78 8
Cash and Cash Equivalents End of
Year $477, $681,378 $346,3
226 25
Supplemental cash flow information
Non-cash investing and financing
activities
Common stock issued in purchase $ $ $298,2
acquisition - - 44
See notes to consolidated financial
statements.
</TABLE>
11
Page 12
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
<C>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY
Accumul Other
ated
Comprehensive
Income (Loss)
Unrealiz
ed
Net
Gains
Foreign (losses) Total
Common
Stock
Reinv Currenc on Shareh
ested y Marketab olders
le '
Shares Amoun Earni Transla Securiti Equity
t ngs tion es
Balance July 1, 1997 557,874 $4,19 $1,84 ($107,4 $120,498 $6,050
2,321 4,744 34) ,129
Comprehensive income
Net earnings 403,6
09
Foreign currency (108,55
translation 1)
Change in unrealized net gains 1,187
(losses) on marketable securities
Total 296,24
comprehensive income 5
Cash dividends paid- (111, (111,5
$.17 per share 551) 51)
5% stock dividend 28,534 473,9 (473,
48 948)
Treasury stock (3,767) (81,1 (81,15
purchases 54) 4)
Common stock issued 13,953 298,2 298,24
in purchase 44 4
acquisition
Other 2,627 53,29 (291) 52,999
0
Balance June 599,221 4,936 1,662 (215,98 121,685 6,504,
30, 1998 ,649 ,563 5) 912
Comprehensive income
Net earnings 265,9
64
Foreign currency (83,842
translation )
Change in unrealized net gains (81,859)
(losses) on marketable securities
Total 100,26
comprehensive income 3
Cash dividends paid- (117, (117,0
$.18 per share 089) 89)
5% stock dividend 29,180 391,8 (391,
89 889)
Treasury stock (19,867) (313, (313,8
purchases 829) 29)
Other 4,261 66,61 (228) 66,383
1
Balance June 612,795 5,081 1,419 (299,82 39,826 6,240,
30, 1999 ,320 ,321 7) 640
Comprehensive income
Net earnings 300,9
03
Foreign currency (97,030
translation )
Change in unrealized net gains (90,646)
(losses) on marketable securities
Total 113,22
comprehensive income 7
Cash dividends paid- (120, (120,0
$.19 per share 001) 01)
5% stock dividend 30,109 274,4 (274,
73 473)
Treasury stock (17,711) (210, (210,9
purchases 911) 11)
Other 7,103 87,71 (427) 87,288
5
Balance June 632,296 $5,23 $1,32 ($396,8 ($50,820 $6,110
30, 2000 2,597 5,323 57) ) ,243
See notes to
consolidated
financial
statements.
</TABLE>
12
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Note 1-Marketable Securities and Cash
Equivalents
Unreali Unreali
zed zed
Cost Gains Losses Fair
Value
2000 (In
Thousan
ds)
United States government
obligations
Maturity less than 1 $499,50 $489 $467 $499,53
year 9 1
Maturity 1 year to 5 39,788 74 39,862
years -
Other debt securities
Maturity less than 1 173,454 700 1 174,153
year
Equity securities 665,095 60,192 149,142 576,145
$1,377, $61,455 $149,61 $1,289,
846 0 691
Unreali Unreali
zed zed
Cost Gains Losses Fair
Value
1999 (In Thousan
ds)
United States government
obligations
Maturity less than 1 $405,72 $260 $279 $405,70
year 3 4
Maturity 1 year to 5 35,392
298 35,094
years -
Other debt securities
Maturity less than 1 238,827 75 2 238,900
year
Equity securities 705,156 103,762 $65,808 743,110
$1,385, $104,09 $66,387 $1,422,
098 7 808
</TABLE>
13
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<TABLE>
<CAPTION>
<S> <C> <C>
Note 2-Inventories
2000
1999
(In thousands)
LIFO inventories $420,824
367,902
FIFO value
(1,360)
-
LIFO valuation reserve 420,824
366,542
LIFO carrying value
FIFO inventories, including 2,436,06
hedging 0 2,366,152
procedure method $2,856,8
84 $2,732,694
</TABLE>
14
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
Note 3-Investments In and Advances to
Affiliates
The Company has 97 unconsolidated affiliates located in North and
South America, Africa,
Europe and Asia, accounted for under the equity method. The
following table summarizes the
Balance sheets as of June 30, 2000 and 1999, and the statements
of earnings for the three years
Ended June 30, 2000 of the Company's
unconsolidated affiliates:
2000 1999 1998
(In thousands)
Current assets $3,894,202
$3,359,596
Non-current assets 7,571,209
6,155,709
Current liabilities 2,286,132
2,241,739
Non-current liabilities 1,910,057
1,695,557
Minority interests 265,937
309,712
Net sales 15,009,536 $13,651,
14,605,815 086
Gross profit 1,211,868 1,161,67
1,124,363 3
Net income (loss) 725,759 (2,630) 216,178
The Company's investment in unconsolidated affiliates exceeds the
underlying equity in net
assets by $109 million, which amount is being amortized on a
straight-line basis over 10 to 40
years.
Three foreign affiliates for which the Company has a carrying
value of $370 million have a market
value of $183 million based on quoted market prices and exchange
rates at June 30, 2000.
</TABLE>
15
Page 16
<TABLE>
<CAPTION>
<S> <C> <C>
Note 4-Debt and Financing Arrangements
2000 1999
(In thousands)
7.5% Debentures $350 million
face amount, due in 2027 $347,926 $347,903
Zero Coupon Debt $400 million
face amount, due in 2002 313,344 274,198
6.625% Debentures $300 million
face amount, due in 2029 298,579 298,563
8.875% Debentures $300 million
face amount, due in 2011 298,545 298,467
8.125% Debentures $300 million
face amount, due in 2012 298,305 298,224
8.375% Debentures $300 million
face amount, due in 2017 294,669 294,530
6.25% Notes $250 million
face amount, due in 2003 249,600 249,513
7.125% Debentures $250 million
face amount, due in 2013 249,485 249,460
6.95% Debentures $250 million
face amount, due in 2097 246,124 246,095
6.75% Debentures $200 million
face amount, due in 2027 195,676 195,572
5.87% Debentures $196 million
face amount, due in 2010 109,074 105,520
Other 407,786 360,745
Total long-term debt 3,309,11 3,218,790
3
Less current maturities (31,895) (26,907)
$3,277,2 $3,191,88
18 3
In 1999, the Company incurred a pre-tax extraordinary
charge of $24 million
resulting from the repurchase of a portion of its 7%
debentures due in 2011.
The remaining 7% debentures were exchanged for 5.87%
debentures due in
2010.
At June 30, 2000, the fair value of the Company's
long-term debt exceeded the
carrying value by $1.5 million, as estimated by using
quoted market prices or
discounted future cash flows based on the Company's
current incremental bor-
rowing rates for similar types of
borrowing arrangements.
Unamortized original issue discount on the Zero
Coupon Debt is being amor-
tized at 13.80%. Accelerated amortization of the
discount for tax purposes has
the effect of lowering the actual rate of interest to
be paid over the remaining life
of the issue to approximately
4.94%.
The aggregate maturities for long-term debt for the
five years after June 30, 2000
are $32 million, $425 million, $273 million, $23
million, and $123 million, respectively.
At June 30, 2000, the Company had lines of credit
totaling $2.2 billion. The
weighted average interest rates on short-term
borrowings outstanding at June
30, 2000 and 1999 were 6.57% and 4.71%,
respectively.
Note 5-Shareholders' Equity
The Company has authorized 800 million shares of common
stock and 500,000
shares of preferred stock, both without par value. No
preferred stock has been
issued. At June 30, 2000 and 1999, the Company had
approximately 18.7 million
and 23.7 million common shares, respectively, in treasury.
Treasury stock is
recorded at cost, $210 million at June 30, 2000, as a
reduction of common
stock.
Stock option plans provide for the granting of options to
employees to purchase
common stock of the Company at market value on the date of
grant. Options
expire five to ten years after the date of grant. At June
30, 2000, there were 7.8
million shares available for future grant. Stock option
activity during the years
indicated is as follows:
Weighted
Average
Number Exercise Price
of
Shares Per Share
(In thousands)
Shares under option at June 5,002 $12.44
30, 1997
Granted 38 19.17
Exercised 11.40
(560)
Cancelled 13.75
(71)
Shares under option at June 4,409 12.61
30, 1998
Granted 2,398 14.22
Exercised (1,286) 10.99
Cancelled 11.62
(216)
Shares under option at June 5,305 13.77
30, 1999
Granted 5,795 10.72
Exercised 12.43
(5)
Cancelled 12.82
(652)
Shares under option at June $12.14
30, 2000 10,443
Shares exercisable at June 30, 1,795 13.72
2000
Shares exercisable at June 30, 1,440 13.11
1999
Shares exercisable at June 30, 2,332 11.73
1998
At June 30, 2000, the range of exercise prices and weighted
average remaining
contractual life of outstanding options was $9.52 to $19.51
and six years,
respectively.
The Company accounts for its stock option plans in
accordance with Accounting
Principles Board Opinion Number 25 (APB 25) "Accounting for
Stock Issued to
Employees." Under APB 25, compensation expense is
recognized if the exercise
price of the employee stock option is less than the market
price on the grant
date. Statement of Financial Accounting Standards Number
123 "Accounting for
Stock-Based Compensation" requires the fair value of
options granted and the
pro forma impact on earnings and earnings per share be
disclosed when material.
Had compensation expense for stock options been determined
based on the
fair value of options granted, the Company's 2000 net
earnings would have been
impacted by approximately one and one-half percent. 1999
net earnings
would have been impacted by approximately one-half of one
percent and 1998 net
earnings by less than one-quarter of one percent. The
Company's 2000 earnings per
share would have been affected by approximately three-
quarters of one percent. 1999
and 1998 earnings per share would have been affected by
approximately one-
quarter of one percent.
The weighted average fair values of options granted during
2000, 1999 and
1998 are $3.20, $4.62 and $5.88, respectively. The fair
value of each
option grant is estimated as of the date of grant using the
Black-Scholes
single option pricing model for pro forma footnote
purposes. Expected dividend
yield was assumed to be 2 percent in 2000 and 1 percent in
1999 and 1998. An expected risk-free
interest rate of 8 percent was assumed in 2000 and 6
percent in 1999 and 1998. Expected
volatility was assumed to be .3 percent in 2000 and 1999
and .2 percent in 1998. Expected option
life was assumed to be six years in 2000, five years in
1999 and four years in 1998.
</TABLE>
16
Page 17
<TABLE>
<CAPTION>
<S> <C>
<C> <C>
Note 6-Other Expense
2000
1999 1998
Investment income $136,317 $118,720
$123,729
Interest expense
(377,404 (326,207 (293,220
) ) )
Net gain on marketable
securities
transactions 10,103 101,319 36,544
Equity in earnings
(losses)
of affiliates
88,206 (4,273) 20,364
Other
5,798 (680) 2,327
($136,98
($111,12 ($110,25
0) 1) 6)
Interest expense is net of interest capitalized of $23
million, $26 million
and $37 million in 2000, 1999 and 1998,
respectively.
The Company made interest payments of $366 million,
$299 million and
$295 million in 2000, 1999, and 1998,
respectively.
Realized gains on sales of available-for-sale
marketable securities totaled
$17 million, $102 million and $37 million
in 2000, 1999 and 1998,
respectively. Realized losses totaled $7 million and
$1 million in 2000 and
1999, respectively.
Note 7-Income Taxes
For financial reporting purposes, earnings before income
taxes and extraordinary loss
includes the following
components:
2000 1999 1998
(In thousands
United States $ $
211,159 327,489 $458,184
Foreign
142,078 92,344 151,828
$ $ $
353,237 419,833 610,012
Significant components of income
taxes are as follows:
2000 1999 1998
(In thousands)
Current
Federal $ $
$36,624 74,040 111,152
State
22,099 12,787 20,879
Foreign
30,480 27,968 54,724
Deferred
Federal
(33,025) 25,085 14,474
State
(7,693) 674 1,451
Foreign
3,849 (2,009) 3,723
$ $
$52,334 138,545 206,403
Significant components of the Company's
deferred tax liabilities
and assets are as
follows:
2000 1999
(In thousands)
Deferred tax
liabilities
Depreciation $514,822 $527,833
Bond discount 49,733 58,286
amortization
Other 91,851 85,285
656,406 671,404
Deferred tax assets
Unrealized loss on marketable 37,336 2,117
securities
Postretirement 35,103 32,786
benefits
Other 129,139 107,771
201,578 142,674
Net deferred tax 454,828 528,730
liabilities
Current net deferred tax assets
included
in prepaid expenses 105,944 91,022
Non-current net $560,772 $619,752
deferred tax
liabilities
Reconciliation of the statutory federal income tax rate
to the Company's effective tax rate
on earnings before extraordinary
loss is as follows:
2000 1999 1998
Statutory rate 35.0% 35.0%
35.0%
Prior years tax (17.0) - -
redetermination
Foreign sales (6.3) (4.5) (4.7)
corporation
State income taxes, net
of
federal tax benefit 2.7 2.2 2.4
Indefinitely invested
earnings of
foreign affiliates (0.3) (1.8) 0.7
Litigation settlements
and
fines - - 1.4
Other 0.7 2.1 (1.0)
Effective rate 14.8% 33.0% 33.8%
The Company made income tax payments of $89
million, $111 million,
and $225 million in 2000, 1999,
and 1998 respectively.
During the fourth quarter of 2000, the
Company recognized a reduction
in income tax related to a redetermination of
foreign sales corporation
benefits for prior years and the resolution
of various other tax issues.
This resulted in a $60 million credit, or
$.09, per share to the current
year provision.
Undistributed earnings of the Company's
foreign subsidiaries amounting
to approximately $523 million at June 30,
2000 are considered to be
permanently reinvested and, accordingly, no
provision for U.S. income
taxes has been provided thereon. It is not
practicable to determine the
deferred tax liability for temporary
differences related to these
undistributed earnings.
</TABLE>
17
Page 18
<TABLE>
<CAPTION>
<S>
<C>
Note 8-Leases
The Company leases manufacturing and warehouse
facilities, real estate,
Transportation and other equipment under operating
leases which expire
at various dates through the year 2026. Rent
expense for 2000, 1999 and
1998 was $89 million, $86 million and $82 million,
respectively. Future
minimum rental payments for non-cancelable
operating leases with initial
or remaining terms in excess of one year are as
follows:
Fiscal years (In thousands)
2000 $32,375
2001 21,320
2002 18,715
2003 13,889
2004 11,524
Thereafter 66,440
Total minimum lease payments $164,263
</TABLE>
<TABLE>
<CAPTION>
Note 9-Employee
Benefit Plans
The Company provides
substantially all employees
with pension benefits. The
Company also provides
substantially all domestic
employees with postretirement
health care and life insurance
benefits. It is the Company's
policy to fund pension costs as
required by applicable laws and
regulations. In addition, the
Company has savings and
investment plans available to
eligible employees with one
year of service. Total
retirement plan expense
includes the following
components:
<S> <C> <C> <C> <C> <C> <C>
Pension Benefits Postretirement
Benefits
2000 1999 1998 2000 1999 1998
(In (In
thousa thous
nds) ands)
Defined benefit plans
Service cost $ $ $ $ $ $
(benefits earned 31,084 23,239 22,559 5,546 4,355 4,139
During the
period)
Interest cost
47,818 37,903 33,658 5,693 4,284 4,403
Expected return
on plan assets (50,910) (43,84 (37,15 - - -
4) 9)
Actuarial loss
(gain) 891 969 (53) (265) (769) (663)
Net amortization
1,071 40 (951) 165 (111) (111)
Net
periodic pension 29,954 18,307 18,054 11,13 7,759 7,768
expense 9
Defined contribution
plans 18,455 17,775 15,497
Total retirement $ $ $ $ $ $
plan expense 48,409 36,082 33,551 11,13 7,759 7,768
9
The following tables set forth changes in the
benefit obligation and the fair value of plan
assets:
2000 1999 2000 1999
(In thousands)
Benefit obligation, $ $ $ $
beginning 696,658 638,00 81,330 61,19
6 0
Service cost
31,084 23,239 5,546 4,355
Interest cost
47,818 37,903 5,693 4,284
Actuarial loss (gain)
(25,443) (6,581 4,237 8,288
)
Benefits paid
(32,461) (23,96 (4,500 (2,85
1) ) 1)
Plan amendments
1,822 35,254 - -
Acquisitions/divestit
ures, net 2,472 - - 6,065
Foreign currency
effects (9,934) (7,202 (1) (1)
)
Benefit obligation, $ $ $
ending 712,016 696,65 $92,30 81,33
8 5 0
Fair value of plan $ $ $ $
assets, beginning 615,977 613,51 - -
6
Actual return on plan
assets 52,000 15,685 - -
Employer
contributions 29,762 20,378 4,500 2,851
Benefits paid
(32,461) (23,96 (4,500 (2,85
1) ) 1)
Acquisitions/divestit
ures, net 6,031 - - -
Foreign currency
effects (14,565) (9,641 - -
)
Fair value of plan $ $ $ $
assets, ending 656,744 615,97 - -
7
Funded status $ $
(55,272) (80,68 $(92,3 $(81,
1) 05) 330)
Unamortized
transition amount (17,090) (14,72 - -
9)
Unrecognized net loss
(gain) 25,537 40,146 (9,468 (13,9
) 71)
Unrecognized prior
service costs 44,575 59,600 4,613 4,779
Adjustment for fourth
quarter contributions 3,846 491 - -
Pension asset $ $
(liability) 1,596 4,827 $(97,1 $(90,
recognized in the 60) 522)
balance sheet
At June 30, 2000 and 1999, a
prepaid pension benefit cost of
$54 million and $57 million,
respectively, and an accrued
pension benefit liability of
$75 million and $83million,
respectively, were recognized
in the consolidated balance
sheets. For postretirement
benefit plans, an accrued
benefit liability of $97
million and $91 million was
recognized at June 30, 2000 and
1999, respectively.
The following table sets forth the principal assumptions used in
developing the benefit obligation and the net periodic pension
expense:
Pension Benef Pensi Bene
its on fits
2000 1999 2000 1999
Discount rate 7.1% 7.0% 7.5% 7.0%
Expected return 8.3% 8.9% N/A N/A
on plan assets
Rate of 4.2% 4.5% N/A N/A
compensation increase
</TABLE>
18
Page 19
The projected benefit
obligation, accumulated benefit
obligation and fair value of
plan assets for the U.S.
retirement plans with
accumulated benefit obligations
in excess of plan assets were
$539 million, $459 million, and
$414 million, respectively, as
of June 30, 2000 and $539
million, $455 million, and $386
million, respectively, as of
June 30, 1999
For measurement purposes, a
7.6% annual rate of increase in
the per capita cost of covered
health care benefits was
assumed for 2001. The rate was
assumed to decrease gradually
to 5.5% for 2004 and remain at
that level thereafter.
Assumed health care cost trend
rates have a significant impact
on the amounts reported for the
health care plans. A 1% change
in assumed health care cost
trend rates would have the
following effect:
<TABLE>
<CAPTION>
<S> <C> <C>
1% 1%
Increa Decre
se ase
(In
thousa
nds)
Effect on total of service and $ $
interest cost components 1,092 (1,01
1)
Effect on accumulated $ $
postretirement benefit 6,695 (6,35
obligations 3)
</TABLE>
19
Page 20
<TABLE>
<CAPTION>
Note 10-Segment and Geographic Information
Based on the Company's organizational structure and the
manner in which
Performance is assessed and operating decisions are made,
the Company
operates as one business segment - procuring,
transporting, storing, processing
and merchandising agricultural commodities
and products.
Information about the Company's operations by geographic
areas is as follows:
<S> <C> <C> <C>
2000 1999 1998
(In
millions)
Net sales and other
operating income
United States $8,258 $9,288 $10,
784
Germany 1,523 1,795 1,88
9
Other foreign 3,096 3,200 3,43
6
$12,877 $14,283 $16,
109
Sales or transfers between
geographic areas:
United States $339 $339 $354
Europe 47 47 51
Other foreign 228 228 146
* $614 $614 $551
Earnings from operations:
United States $412 $552 $550
Germany 23 37 8
Other foreign 96 131 67
$531 $720 $625
Long-lived assets
United States $4,275 $4,525 $4,3
50
Germany 172 196 206
Other foreign 958 987 924
$5,405 $5,708 $5,4
80
Information about the Company's revenues by classes of
products and services
is as follows:
2000 1999
1998
(In
millions)
Oilseed products $7,219 $8,494 $10,
152
Corn products 1,950 1,855 2,15
4
Wheat and other milled products 1,358 1,378 1,49
1
Other products and services 2,350 2,556 2,31
2
$12,877 $14,283 $16,
109
</TABLE>
20
Page 21
Note 11-Antitrust Investigation
and Related Litigation
The Company, along with other
domestic and foreign companies,
was named as a defendant in a
number of putative class action
antitrust suits and other
proceedings involving the sale
of lysine, citric acid, sodium
gluconate, monosodium glutamate
and high fructose corn syrup.
These actions and proceedings
generally involve claims for
unspecified compensatory
damages, fines, costs, expenses
and unspecified relief. The
Company intends to vigorously
defend these actions and
proceedings unless they can be
settled on terms deemed
acceptable by the parties.
These matters have resulted and
could result in the Company
being subject to monetary
damages, other sanctions and
expenses.
The Company has made provisions
to cover the fines, litigation
settlements and costs related
to certain of the
aforementioned suits and
proceedings. Because of the
early stage of other putative
class actions and proceedings,
including those related to high
fructose corn syrup, the
ultimate outcome and
materiality of these matters
cannot presently be determined.
Accordingly, no provision for
any liability that may result
therefrom has been made in the
consolidated financial
statements.
21
Page 22
REPORT OF INDEPENDENT AUDITORS
Board of Directors and
Shareholders
Archer Daniels Midland Company
Decatur, Illinois
We have audited the
accompanying consolidated
balance sheets of Archer
Daniels Midland Company and
subsidiaries as of June 30,
2000 and 1999, and the related
consolidated statements of
earnings, shareholders' equity
and cash flows for each of the
three years in the period ended
June 30, 2000. These financial
statements are the
responsibility of the Company'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
consolidated financial position
of Archer Daniels Midland
Company and its subsidiaries at
June 30, 2000 and 1999, and the
consolidated results of their
operations and their cash flows
for each of the three years in
the period ended June 30, 2000,
in conformity with accounting
principles generally accepted
in the United States.
St. Louis, Missouri
July 28, 2000
22
Page 23
<TABLE>
<CAPTION>
Quarterly Financial Data (Unaudited)
<S> <C> <C> <C> <C> <C>
Quarter
First Second Third Fourth Total
(In thousands, except per share amounts)
Fiscal 2000
Net sales $3,220, $3,420, $3,111 $3,123 $12,876
980 346 ,809 ,682 ,817
Gross profit 272,320 406,273 334,97 206,00 1,219,5
6 6 75
Net earnings 36,367 101,920 103,02 59,587 300,903
9
Per common share 0.06 0.16 0.16 0.09 0.47
Fiscal 1999
Net sales $3,801, $3,911, $3,378 $3,192 $14,283
421 539 ,126 ,249 ,335
Gross profit 293,636 421,330 238,92 278,14 1,232,0
3 0 29
Earnings before 116,855 110,434 11,742 42,257 281,288
extraordinary loss
Per common share 0.18 0.16 0.02 0.07 0.43
Net earnings 116,855 95,110 11,742 42,257 265,964
Per common share 0.18 0.14 0.02 0.07 0.41
Net earnings for the three months ended June 30, 2000 and the year ended
June 30, 2000 include a charge to cost
of products sold of $108 million ($72 million after tax, equal to $.11
per share) related to the abandonment of certain
long-lived assets and other asset write-downs and a $60 million tax
credit, equal to $.09 per share, related to a redeter-
mination of foreign sales corporation benefits for prior years and the
resolution of various other tax issues.
During the second quarter of the year ended June 30, 1999, the Company
incurred an extraordinary charge, net of tax,
of $15 million, or $ .02 per share, resulting from the repurchase of a
portion of its 7 percent debentures due May 2011.
</TABLE>
23
Page 24
<TABLE>
<CAPTION>
Common Stock Market Prices and Dividends
The Company's common stock is listed and traded on the New York Stock
Exchange, Chicago Stock Exchange,
Tokyo Stock Exchange, Frankfurt Stock Exchange and Swiss Exchange. The
following table sets forth, for
the periods indicated, the high and low market prices of the common
stock and common stock cash dividends.
<S> <C> <C> <C>
Cash
Market Price Divid
ends
High Low Per
Share
Fiscal 2000--
Quarter Ended
June 30 $ 1 7/8 $ 9 $ 0.048
1 1/16
March 31 1 3/4 8 3/8 0.048
2
December 31 1 1/2 1 7/8 0.048
3 0
September 30 1 15/16 1 1/4 0.045
3 1
Fiscal 1999--
Quarter Ended
June 30 $ 1 3/16 $ 1 1/4 0.045
5 2 $
March 31 1 1/2 1 1/8 0.045
5 3
December 31 1 9/16 1 0.045
7 4 5/16
September 30 1 3/16 1 0.043
7 3 7/16
The number of shareholders of the Company's common stock at June 30,
2000 was 29, 911. The Company
expects to continue its policy of paying regular cash dividends,
although there is no assurance as to future
dividends because they are dependent on future earnings, capital
requirements and financial condition.
</TABLE>
24
Page 25
<TABLE>
<CAPTION>
TEN YEAR SUMMARY
Operating, Financial and Other Data (Dollars in
thousands, except per share data)
<S> <C> <C> <C> <C>
2000 1999 1998 1997
Operating
Net sales and other $12,876 $14,283 $16,108 $13,853
operating income ,817 ,335 ,630 ,262
Depreciation and 604,229 584,965 526,813 446,412
amortization
Net earnings 300,903 265,964 403,609 377,309
Per common share 0.47 0.41 0.62 0.57
Cash dividends 120,001 117,089 111,551 106,990
Per common share 0.19 0.18 0.17 0.16
Financial
Working capital $1,829, $1,949, $1,734, $2,035,
422 323 411 580
Per common share 2.89 3.03 2.63 3.15
Current ratio 1.4 1.5 1.5 1.9
Inventories 2,856,8 2,732,6 2,562,6 2,094,0
84 94 50 92
Net property, plant and 5,277,0 5,567,1 5,322,7 4,708,5
equipment 81 61 04 95
Gross additions to 475,396
property, plant and 825,676 1,127,3
equipment 1,228,55 60
3
Total assets 14,423, 14,029, 13,833, 11,354,
100 881 534 367
Long-term debt 3,277,2 3,191,8 2,847,1 2,344,9
18 83 30 49
Shareholders' equity 6,110,2 6,240,6 6,504,9 6,050,1
43 40 12 29
Per common share 9.66 9.70 9.85 9.37
Other
Weighted average shares 637,409
outstanding 652,694 653,378 657,478
(000s)
Number of shareholders 29,911 31,764 32,539 33,834
Number of employees 22,753 23,603 23,132 17,160
Share and per share data have been adjusted for a three-for-
two stock split in December 1994 and annual 5% stock
dividends through September 2000.
Net earnings for 1999 include an extraordinary charge of
$15 million, or $.02 per share, from the repurchase
of debt.
Net earnings for 1993 include a net credit of $68 million,
or $.09 per share, and a charge of $35 million, or
$.05 per share, for the cumulative effects of changes in
accounting for income taxes and postretirement
benefits, respectively.
</TABLE>
25
Page 26
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991
$13,239 $12,555 $11,158 $9,578 $9,026 $8,271
,839 ,403 ,479 ,370 ,177 ,588
393,605 384,872 354,463 328,54 293,72 261,36
9 9 7
695,912 795,915 484,069 567,52 503,75 466,67
7 7 8
1.04 1.15 0.69 0.78 0.69 0.64
90,860 46,825 32,586 32,266 30,789 29,527
0.14 0.07 0.05 0.04 0.04 0.04
$2,751, $2,540, $2,783, $2,961 $2,276 $1,674
132 260 817 ,503 ,564 ,735
4.15 3.74 4.03 4.10 3.15 2.31
2.7 3.2 3.5 4.1 3.4 3.0
1,790,6 1,473,8 1,422,1 1,131, 1,025, 917,49
36 96 47 787 030 5
4,114,3 3,762,2 3,538,5 3,214, 3,060, 2,695,
01 81 75 834 096 625
801,426 657,915 682,485 572,02 614,84 911,58
2 4 6
10,449, 9,756,8 8,746,8 8,404, 7,524, 6,260,
869 87 53 111 530 607
2,002,9 2,070,0 2,021,4 2,039, 1,562, 980,27
79 95 17 143 491 3
6,144,8 5,854,1 5,045,4 4,883, 4,492, 3,922,
12 65 21 251 353 295
9.26 8.61 7.30 6.76 6.21 5.42
668,583 690,105 697,246 723,47 725,41 727,92
9 5 7
35,431 34,385 33,940 33,654 32,277 28,981
14,811 14,833 16,013 14,168 13,524 13,049
</TABLE>
26
