FORM
10-K
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended June 30, 2006
OR
| o | 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)
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Delaware
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41-0129150
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(State
or other jurisdiction of
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(I.
R. S. Employer
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incorporation
or organization)
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Identification
No.)
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4666
Faries Parkway Box 1470 Decatur, Illinois
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62525
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(Address
of principal executive offices)
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(Zip
Code)
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217-424-5200
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(Registrant's
telephone number, including area code)
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Securities
registered pursuant to Section 12(b) of the
Act:
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Title
of each class
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Name
of each exchange on which registered
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Common
Stock, no par value
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New
York Stock Exchange
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Chicago
Stock Exchange
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Swiss
Stock Exchange
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Frankfurt
Stock Exchange
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Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act.
Yes
x No
o
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. Yes o
No x
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
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this
Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer” and “large accelerated filer” in Rule 12B-2 of the Exchange
Act.
Large
Accelerated Filer x Accelerated
Filer o Non-accelerated
Filer o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
State
the
aggregate market value of the voting stock held by non-affiliates of the
registrant.
Common
Stock, no par value--$15.7 billion
(Based
on
the closing sale price of Common Stock as reported on the New York Stock
Exchange
as
of
December 31, 2005)
Indicate
the number of shares outstanding of each of the registrant's classes of common
stock, as of the latest practicable date.
Common
Stock, no par value—655,717,116 shares
(July
31,
2006)
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the annual shareholders' report for the year ended June 30, 2006 are
incorporated by reference into Parts I, II and IV.
Portions
of the proxy statement for the annual meeting of stockholders to be held
November
2, 2006 are incorporated by reference into Part III.
SAFE
HARBOR STATEMENT
This
Form
10-K contains forward-looking information that is subject to certain risks
and
uncertainties that could cause actual results to differ materially from those
projected, expressed, or implied by such forward-looking information. In some
cases, you can identify forward-looking statements by our use of words such
as
“may, will, should, anticipates, believes, expects, plans, future, intends,
could, estimate, predict, potential or contingent,” the negative of these terms
or other similar expressions. The Company’s actual results could differ
materially from those discussed or implied herein. Factors that could cause
or
contribute to such differences include, but are not limited to, those discussed
in this Form 10-K for the fiscal year ended June 30, 2006. Among these risks
are
legislative acts, changes in the prices of food, feed and other commodities,
including gasoline, and macroeconomic conditions in various parts of the world.
To the extent permitted under applicable law, the Company assumes no obligation
to update any forward-looking statements as a result of new information or
future events.
PART
I
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Item
1.
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BUSINESS
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(a)
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General
Development of Business
Archer
Daniels Midland Company was incorporated in Delaware in 1923, successor
to
the Daniels Linseed Co. founded in 1902.
During
the last five years, the Company has experienced significant growth,
spending approximately $4.0 billion for construction of new plants,
expansions of existing plants and the acquisitions of plants and
transportation equipment. There have been no significant dispositions
during this period.
During
2006, the Company announced plans to expand its ethanol production
capacity by 550 million gallons through the construction of two dry
corn
milling plants. The Company also announced plans to construct a
polyhydroxy alkanoate (PHA) natural plastics production facility,
a new
U.S. cocoa processing facility, and a U.S. biodiesel production facility.
The Company expects to spend approximately $3.1 billion to construct
these
facilities and other approved capital projects over the next four
years.
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(b)
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Financial
Information About Industry Segments
The
Company is principally engaged in procuring, transporting, storing,
processing and merchandising agricultural commodities and products.
The
Company’s operations are classified into three reportable business
segments: Oilseeds Processing, Corn Processing, and Agricultural
Services.
Each of these segments is organized based upon the nature of products
and
services offered. The Company’s remaining operations are aggregated and
classified as Other.
Financial
information with respect to the Company’s reportable business segments is
set forth in “Note 13 of Notes to Consolidated Financial Statements” of
the annual shareholders’ report for the year ended June 30, 2006 and is
incorporated herein by reference.
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(c)
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Narrative
Description of Business
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(i)
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Principal
products produced and principal markets for and methods of distribution
of
such products:
Oilseeds
Processing
The
Company is engaged in processing oilseeds such as soybeans, cottonseed,
sunflower seeds, canola, peanuts, and flaxseed into vegetable oils
and
meals principally for the food and feed industries. Crude vegetable
oil is
sold "as is" or is further processed by refining, bleaching and
deodorizing into salad oils. Salad oils can be further processed
by
hydrogenating and/or interesterifying into margarine, shortening
and other
food products. Partially refined oil is sold for use in chemicals,
paints
and other industrial products. Refined oil can be further processed
for
use in the production of biodiesel. Oilseed meals are primary ingredients
used in the manufacture of commercial livestock and poultry feeds.
Cottonseed flour is produced and sold primarily to the pharmaceutical
industry. Cotton cellulose pulp is manufactured and sold to the chemical,
paper and filter markets.
Golden
Peanut Company LLC, a joint venture between the Company and Alimenta
(U.S.A.), Inc., is a major supplier of peanuts to both the domestic
and
export markets. The Company has a 50% ownership interest in this
joint
venture.
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Item
1.
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BUSINESS
- Continued
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The
Company participates in various joint ventures in China and Indonesia
that
operate palm plantations; soybean, rapeseed, cottonseed, sunflower,
peanut,
palm kernel, and sesame crushing facilities and related vegetable
oil
refineries and packaging facilities; an oleochemical plant that produces
fatty acids, glycerin and soap noodles; a soy protein plant; wheat
flour
mills; rice mills; feed mills; fertilizer operations; and related
silos
and storage facilities.
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Corn
Processing
The
Company is engaged in wet milling and dry milling corn operations.
Products produced for use in the food and beverage industry include
syrup,
starch, glucose, dextrose, and sweeteners. Dextrose is also produced
for
use by the Company as a feedstock for its bioproducts operations.
Corn
gluten feed and meal as well as distillers grains are produced for
use as
feed ingredients. Corn germ, a by-product of the wet milling process,
is
further processed as an oilseed into vegetable oil and meal.
By
fermentation of dextrose, the Company produces alcohol, amino acids,
and
other specialty food and feed ingredients. Ethyl alcohol is produced
to
beverage grade or for industrial use as ethanol. In gasoline, ethanol
increases octane and is used as an extender and oxygenate. Amino
acids,
such as lysine and threonine, are vital compounds used in swine feeds
to
produce leaner animals, and in poultry feeds to enhance the speed
and
efficiency of poultry production. The Company also produces, by
fermentation, astaxanthin, a product used in aquaculture to enhance
flesh
coloration. The Company produces citric and lactic acids, lactates,
sorbitol and xanthan gum which are used in various food and industrial
products.
Almidones
Mexicanos S.A., of which the Company has a 50% interest, operates
a wet
corn milling plant in Mexico.
Eaststarch
C.V. (Netherlands), of which the Company has a 50% interest, owns
interests in companies that operate wet corn milling plants in Bulgaria,
Hungary, Romania, Slovakia and
Turkey.
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Agricultural
Services
The
Agricultural Services segment utilizes the Company’s extensive grain
elevator and transportation network to buy, store, clean and transport
agricultural commodities, such as oilseeds, corn, wheat, milo, oats
and
barley, and resells these commodities primarily as feed ingredients
and as
raw materials for the agricultural processing industry. Agricultural
Services’ grain sourcing and transportation network provides reliable and
efficient services to the Company’s agricultural processing
operations.
A.C.
Toepfer International and affiliates, in which the Company has an
80%
interest, is a global merchandiser of agricultural commodities and
processed products. Toepfer has 39 sales offices worldwide and operates
export, river, and country elevators in Argentina, Romania, and the
Ukraine.
The
Company has a 45% interest in Kalama Export Company, a grain export
elevator in Washington.
The
Company owns a 23% interest in Agricore United, one of Canada’s leading
agri-businesses.
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Item
1.
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BUSINESS
- Continued
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Other
The
Company is engaged in milling wheat, corn and milo into flour. Wheat
flour
is sold primarily to commercial bakeries, food companies, food service
companies and retailers. Bulgur, a gelatinized wheat food, is sold
to both
the export and the domestic food markets. Corn meal and flour is
sold
primarily to the cereal, snack and bakery mix markets. The Company
produces bakery products and mixes which are sold to the baking industry.
The Company also mills milo to produce industrial flour used in the
manufacturing of wallboard for the building industry.
The
Company processes cocoa beans and produces cocoa liquor, cocoa butter,
cocoa powder, chocolate and various compounds for the food processing
industry.
The
Company produces wheat starch and vital wheat gluten for the baking
industry. Lecithin, an emulsifier produced in the vegetable oil refining
process, is marketed as a food and feed ingredient.
The
Company produces a wide range of edible soy protein products including
soy
flour, soy grits, soy protein concentrates and soy isolates that
are used
in processed meats, baked foods, nutritional products, snacks and
dairy
and meat analogs. The Company further processes these ingredients
into dry
and frozen meat analogs that it markets to foodservice operators,
retail
and private label brand marketers, and direct to retail
stores.
The
Company produces natural source Vitamin E, tocopherol antioxidants
and
phytosterols from co-products of oilseeds which are marketed to the
dietary supplement and food industry. The Company produces soy
isoflavones, a dietary supplement, from a co-product of edible soy
processing. The Company produces lettuce, other fresh vegetables
and herbs
in its hydroponic greenhouse. The Company raises fish in an aquaculture
operation for distribution to consumer food customers.
The
Company processes and distributes edible beans for use as a food
ingredient.
The
Company produces and distributes formula feeds and animal health
and
nutrition products to the livestock, dairy, poultry and pet food
industries.
Gruma
S.A. de C.V. and affiliates, of which the Company has a 27% interest,
is
the world's largest producer and marketer of corn flour and tortillas
with
operations in the U.S., Mexico, Central America, South America and
Europe.
Additionally, the Company has a 20% interest in a joint venture which
consists of the combined U.S. corn flour operations of ADM and Gruma.
The
Company also has a 40% share, through a joint venture with Gruma,
in nine
Mexican-based wheat flour mills.
International
Malting Company, a joint venture between the Company and the Lesaffre
Company, operates malting barley plants in the United States, Australia,
New Zealand, and Canada. The Company has a 50% ownership interest
in this
joint venture.
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Item
1.
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BUSINESS
- Continued
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Hickory
Point Bank and Trust Company, fsb, a wholly-owned subsidiary of the
Company, furnishes public banking and trust services, as well as
cash
management, transfer agency and securities safekeeping services for
the
Company.
ADM
Investor Services, Inc., a wholly-owned subsidiary of the Company,
is a
registered futures commission merchant and a clearing member of all
principal commodities exchanges. ADM Investor Services International,
Ltd.
specializes in futures, options and foreign exchange in the European
marketplace. ADM Derivatives, Inc. offers foreign exchange services
to
institutional and retail clients.
Agrinational
Insurance Company, a wholly-owned subsidiary of the Company, provides
insurance coverage for certain property, casualty, marine, and other
miscellaneous risks of the Company and participates in certain third-party
reinsurance arrangements.
The
Company is a limited partner in various private equity funds which
invest
primarily in emerging markets.
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Methods
of Distribution
Since
the Company's customers are principally other manufacturers and
processors, the Company’s products are distributed mainly in bulk from
processing plants or storage facilities directly to the customers'
facilities. The Company has developed a comprehensive transportation
system utilizing trucks, railcars, river barges and ocean-going vessels
to
efficiently move both commodities and processed products virtually
anywhere in the world. The Company owns or leases large numbers of
the
trucks, trailers, railroad tank and hopper cars, river barges and
towboats
used in this transportation system.
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(ii)
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Status
of new products
The
Company continues to expand its business through the development
and
production of new, value-added products. A new line of trans-free
fats and
oils is being marketed under the NovaLipid™ brand using enzymatic
interesterification technology. This portfolio of new products allows
margarines, shortenings and other products to be produced with near
zero
levels of trans-fatty acids. The Company’s capacity to produce these
products has been expanded several times both at the Quincy, Illinois
and
at the Mankato, Minnesota vegetable oil refineries. A number of customers
have launched trans-free margarines and bakery products using the
NovaLipid™ enzymatically interesterified products.
Food
ingredient research continues to explore new applications for existing
products. In this area, a soluble fiber derived from corn, Fibersol-2,
continues to find new markets. It has recently been featured in a
new
orange juice with added fiber as well as being used in breakfast
cereal
products.
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Item
1.
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BUSINESS
- Continued
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Research
into producing biodiesel is focused on lowering costs in the process
as
well as continuing to study a variety of fatty acid feed stocks.
The
Company’s research group is developing a variety of base and acid
catalyzed technologies for converting different fatty acid streams
to
methyl esters.
A
joint research project with Argonne National Laboratory is focused
on the
development of a separative bioreactor which utilizes the principles
of
electrodeionization that allows the production of chemicals from
biomass feedstocks without the production of salt byproducts. In
addition
a joint project with the Department of Energy on the utilization
of corn
fiber in an advanced biorefinery is reaching the commercialization
stage.
The
Company’s joint development alliance with Metabolix to produce PHA via
fermentation met its research goals. From
this alliance, a 50/50 joint venture has been formed to manufacture
and
market natural PHA polymers for a variety of applications, including
coated paper, film, and molded goods. The joint venture is planning
to
establish a state-of-the-art production facility. Natural PHA polymers
are
produced using a fully-biological fermentation process that converts
agricultural raw materials such as corn sugar into a range of
biodegradable and compostable plastics.
The
Company acquired an exclusive license for flax lignan technology
that may
have potential for health maintenance and possible risk reduction
of
several diseases. The license gives the Company an exclusive, worldwide
right to produce and sell flax lignans for use as an active ingredient
in
functional foods, nutraceuticals, pharmaceuticals, animal feed additives
and veterinary products. Commercial scale production of lignans is
starting in fiscal 2007.
The
Company has two projects currently funded under the federal government’s
biomass program. One project, funded by the U.S. Department of
Energy, is targeted at converting a portion of the corn fiber stream
produced in the corn wet milling operation to fermentable sugars.
This sugar stream can then be used for ethanol production or
chemical synthesis. This same process will also produce a vegetable
oil stream high in phytosterols and a new fiber stream for food
and feed
applications. The second project, co-funded by the U.S.
Department of Agriculture, is focused on the development of a corn
substitute for ruminant feed applications by combining distillers
dried
grains with pretreated cellulose streams such as corn stover or
wheat
straw.
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(iii)
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Source
and availability of raw materials
Substantially
all of the Company's raw materials are agricultural commodities.
In any
single year, the availability and price of these commodities are
subject
to unpredictable factors such as weather, plantings, government (domestic
and foreign) farm programs and policies, changes in global demand
created
by population growth and changes in standards of living, and global
production of similar and competitive crops. The substantial majority
of
our raw materials are procured from thousands of grain elevators
and
wholesale merchants, principally in North America, South America
and
Europe pursuant to short-term agreements (less than 1 year) or on
a “spot”
basis. The Company does not grow crops and a relatively small proportion
of our raw materials are purchased directly from growers. The Company
is
not dependent upon any particular grower, elevator or merchant or
group of
growers, elevators or merchants as a source for its raw
materials.
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Item
1.
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BUSINESS
- Continued
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(iv)
|
Patents,
trademarks and licenses
The
Company owns several valuable patents, trademarks and licenses, but
does
not consider any segment of its business dependent upon any single
or
group of patents, trademarks or
licenses.
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(v)
|
Extent
to which business is seasonal
Since
the Company is so widely diversified in global agribusiness markets,
there
are no material seasonal fluctuations in the manufacture, sale and
distribution of its products and services. There is a degree of
seasonality in the growing season and procurement of the Company's
principal raw materials: oilseeds, corn, wheat, cocoa beans and other
grains. However, the actual physical movement of the millions of
bushels
of these crops through the Company's storage and processing facilities
is
reasonably constant throughout the
year.
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(vi)
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Working
capital items
Price
variations and availability of raw agricultural commodities may cause
fluctuations in the Company's receivables, inventories, and short-term
borrowings.
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(vii)
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Dependence
on single customer
No
material part of the Company's business in any segment is dependent
upon a
single customer or very few
customers.
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(viii)
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Amount
of backlog
Because
of the nature of the Company's business, the backlog of orders at
year end
is not a significant indication of the Company's activity for the
current
or upcoming year.
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(ix)
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Business
subject to renegotiation
The
Company has no business with the government subject to
renegotiation.
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(x)
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Competitive
conditions
Item
1A, “Risk Factors,” includes a description of the Company’s competitive
conditions.
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(xi)
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Research
and development expenditures
The
Company’s research and development expenditures are focused on developing
food, feed, fuel and industrial products from renewable, agricultural
crops. The Company uses technical services representatives to interact
with customers to understand the customers’ product needs. These technical
service representatives then interact with researchers who are familiar
with the Company’s wide range of food, feed, fuel and industrial products
as well as applications technology. These individuals form quick
acting
teams to develop solutions to customer
needs.
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Item
1.
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BUSINESS
- Continued
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The
Company maintains a research laboratory in Decatur, Illinois where
product
and process development activities are conducted. To develop new
bioproducts and to improve existing bioproducts, new cultures are
developed using classical mutation and genetic engineering. Protein
and
vegetable oil research is conducted at facilities in Decatur where
bakery,
meat and dairy pilot plants support application research. Vegetable
oil
research is also conducted in Hamburg, Germany, Erith, U.K. and Arras,
France. Research to support sales and development for bakery products
is
done at a laboratory in Olathe, Kansas. Research to support sales
and
development for cocoa and chocolate products is done in Milwaukee,
Wisconsin and the Netherlands. Research and technical support for
industrial and food wheat starch applications is conducted in a Montreal,
Canada research center. The Company conducts research for corn starches
in
paper and textile industries as well as fuel ethanol research in
Clinton,
Iowa. The Company maintains research centers in Quincy, Illinois
and
Decatur, Indiana that conduct swine and cattle feeding trials to
test new
formula feed products and to develop improved feeding
efficiencies.
The
amounts spent during the three years ended June 30, 2006, 2005 and
2004
for such technical efforts were approximately $45 million, $40 million
and
$32 million, respectively.
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(xii)
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Material
effects of capital expenditures for environmental protection
During
the year ended June 30, 2006, $61 million was spent for equipment,
facilities and programs for pollution control and compliance with
the
requirements of various environmental
agencies.
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There
have been no material effects upon the earnings and competitive position
of the Company resulting from compliance with federal, state and
local
laws or regulations enacted or adopted relating to the protection
of the
environment.
The
Company expects expenditures for environmental facilities and programs
to
continue at approximately the present rate with no unusual amounts
anticipated for the next two years.
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(xiii)
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Number
of employees
The
number of persons employed by the Company was approximately 26,800
at June
30, 2006.
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(d)
|
Financial
Information About Foreign and Domestic Operations and Export
Sales
Item
1A, “Risk Factors,” includes a description of the Company’s foreign
operations. Geographic financial information is set forth in "Note
13 of
Notes to Consolidated Financial Statements" of the annual shareholders'
report for the year ended June 30, 2006 and is incorporated herein
by
reference.
Export
sales by segment for the last three years were as
follows:
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2006
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2005
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2004
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||||
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(in
thousands)
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||||||||||
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Oilseeds
Processing
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$
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639,255
|
$
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800,003
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$
|
1,212,729
|
||||
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Corn
Processing
|
452,841
|
426,999
|
533,672
|
|||||||
|
Agricultural
Services
|
5,296,654
|
5,005,900
|
5,001,022
|
|||||||
|
Other
|
193,780
|
211,301
|
246,478
|
|||||||
|
Total
|
$
|
6,582,530
|
$
|
6,444,203
|
$
|
6,993,901
|
||||
|
Item
1.
|
BUSINESS
- Continued
|
|
(e)
|
Available
Information
The
Company’s Internet website is http://www.admworld.com.
The Company makes available, free of charge, through its Internet
website,
the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, Directors and Officers Forms 3, 4 and
5, and
amendments to those reports, as soon as reasonably practicable after
electronically filing such materials with, or furnishing them to,
the
Securities and Exchange Commission.
In
addition, the Company makes available, through its Internet website,
the
Company’s Business Code of Conduct and Ethics, Corporate Governance
Guidelines, and the written charters of the Audit,
Compensation/Succession, Nominating/Corporate Governance, and Executive
Committees.
|
|
The
public may read and copy any materials filed by the Company with
the
Securities and Exchange Commission (SEC) at the SEC’s Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. The public may
obtain
information on the operation of the Public Reference Room by calling
the
SEC at 1-800-SEC-0330. The SEC maintains an Internet website which
contains reports, proxy and information statements, and other information
regarding issuers that file information electronically with the SEC.
The
SEC’s Internet website address is http://www.sec.gov.
|
|
Item
1A.
|
RISK
FACTORS
|
The
availability and price of the agricultural commodities and agricultural
commodity products the Company produces and merchandises can be affected by
weather, disease, government programs and other factors beyond the Company’s
control.
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
resulting from population growth and changes in standards of living, and global
production of similar and competitive crops. These factors have
historically caused volatility in the agricultural commodities industry and,
consequently, in the Company’s operating results. Reduced supply of
agricultural commodities due to weather-related factors could adversely affect
the Company’s profitability by increasing the cost of raw materials used in the
Company’s agricultural processing operations. Reduced supplies of agricultural
commodities could also limit the Company’s ability to procure, transport, store,
process, and merchandise agricultural commodities in an efficient manner which
could adversely affect the Company’s profitability. In addition, the
availability and price of agricultural commodities can be affected by other
factors such as plant disease which can result in crop failures and reduced
harvests.
Fluctuations
in energy prices could adversely affect the Company’s operating
results.
The
Company’s operating costs and selling prices of certain finished products are
sensitive to changes in energy prices. The Company’s processing plants are
powered principally by electricity, natural gas, and coal. The Company’s
transportation operations are dependent upon diesel fuel and other petroleum
products. Significant increases in the cost of these items could adversely
affect the Company’s production costs and profitability.
|
Item
1A.
|
RISK
FACTORS - Continued
|
The
Company has certain finished products, such as ethanol and biodiesel, which
are
closely related to, or may be substituted for, petroleum products. Therefore,
the selling prices of ethanol and biodiesel relate to the selling prices of
unleaded gasoline and diesel fuel. A significant decrease in the price of
unleaded gasoline or diesel fuel could result in a significant decrease in
the
selling price of the Company’s ethanol and biodiesel and could adversely affect
the Company’s revenues and operating results.
The
Company is subject to economic and political instability and other risks of
doing business globally.
The
Company conducts its business in many countries and wholly-owns, or has
significant ownership interests in, subsidiaries located outside of the United
States. The Company’s operations are principally in developed countries.
However, volatile economic, political and market conditions in some countries
in
which the Company operates may have a negative impact on operating results
and
the Company’s ability to execute its business strategies.
The
Company is also exposed to other risks of international operations,
including:
| · |
regulation
of the economy in the markets in which the Company
operates;
|
| · |
inflation
and adverse economic conditions resulting from governmental attempts
to
reduce inflation, such as imposition of higher interest rates and
wage and
price controls;
|
| · |
trade
barriers on imports or exports, such as higher tariffs and taxes
on
imports of agricultural commodities and commodity
products;
|
| · |
changes
in the tax laws or inconsistent tax regulations in the countries
in which
the Company operates;
|
| · |
currency
exchange rate fluctuations; exchange controls or other currency
restrictions; and
|
| · |
civil
unrest or significant political
instability.
|
The
occurrence of any of these events in the markets in which the Company operates,
or in other markets where the Company plans to expand or develop its business,
could jeopardize or limit the Company’s ability to transact business in those
markets and could adversely affect the Company’s revenues and operating
results.
Disruption
of transportation services could adversely affect the Company’s operating
results.
The
Company’s operations rely on dependable and efficient transportation services. A
disruption in transportation services could result in supply problems at the
Company’s processing plants and impair the Company’s ability to deliver
processed products to its customers in a timely manner. In addition, a
disruption in transportation services could adversely impact the Company’s
procurement, transportation, and merchandising operations. The Company owns
ground, river, and rail transportation assets in order to manage its risk
related to transportation system disruptions. However, a natural disaster or
other catastrophic event could result in disruptions in regional transportation
infrastructure systems affecting the Company’s transportation assets and those
of the Company’s third-party transportation providers. Disruption in
transportation services could interrupt the Company’s processing, procurement,
transportation, and merchandising operations and adversely affect the Company’s
revenues and operating results.
|
Item
1A.
|
RISK
FACTORS - Continued
|
Government
policies and environmental regulations affecting the agricultural sector and
related industries could adversely affect the Company’s operations and
profitability.
Agricultural
production and trade flows are subject to government policies and
regulations. Governmental policies affecting the agricultural industry, such
as
taxes, tariffs, duties, subsidies and import and export restrictions on
agricultural commodities and commodity products, can influence the planting
of
certain crops, the location and size of crop production, whether
unprocessed or processed commodity products are traded, the volume and types
of
imports and exports, and industry profitability. In addition, international
trade disputes can adversely affect agricultural commodity trade flows by
limiting or disrupting trade between countries or regions. Future government
policies may adversely affect the supply, demand for, and prices of the
Company’s products, restrict the Company’s ability to do business in its
existing and target markets and could negatively impact the Company’s operating
results.
A
significant part of the Company’s operations are regulated by environmental laws
and regulations. The production of the Company’s products requires the use of
materials which can create emissions of certain regulated substances. The
Company cannot be assured that it is in compliance with all environmental
requirements at all times, or that the Company will not incur material costs
or
liabilities to comply with environmental requirements. In addition, changes
to
environmental regulations may require the Company to modify its existing
processing facilities and could significantly increase operating
costs.
The
Company has significant competition in the markets in which it operates. Markets
for the Company’s products are highly price competitive and sensitive to product
substitution. No single company competes with the Company in all of its markets.
However, a number of large companies compete with the Company in one or more
markets. Major competitors in one or more markets include Barry Callebaut A.G.,
Bunge, Ltd., Cargill, Inc., Corn Products International, Inc. and Tate
& Lyle PLC. In addition, the Company also competes with regional suppliers,
processors and distributors, and farm cooperatives. Competition could cause
the
Company to lose market share, exit certain lines of business, increase
expenditures or reduce pricing, each of which could have an adverse effect
on
the Company’s revenues and operating results.
The
Company is subject to food and feed industry risks.
The
Company is subject to food industry risks which include, but are not limited
to,
food spoilage or food contamination, shifting consumer preferences, federal,
state, and local food processing regulations, and customer product liability
claims. In addition, the Company may not always be able to obtain adequate
liability insurance related to product liability and food safety matters. The
occurrence of any of the matters described above could adversely affect the
Company’s revenues and operating results.
Certain
of
the Company’s merchandised commodities and finished products are used as
ingredients in livestock and poultry feed. The Company is subject to risks
associated with the outbreak of disease in livestock and poultry, including,
but
not limited to, mad-cow disease and avian influenza. The outbreak of disease
could adversely affect demand for the Company’s products used as
ingredients in livestock and poultry feed. A decrease in demand for
these products could adversely affect the Company’s revenues and operating
results.
|
Item
1B.
|
UNRESOLVED
STAFF COMMENTS
|
The
Company has no unresolved staff comments.
|
Item
2.
|
PROPERTIES
|
|
The
Company owns or leases the following processing plants and procurement
facilities:
|
|
Processing
Plants
|
Procurement
Facilities
|
||||||
|
United
|
Foreign
|
Total
|
United
|
Foreign
|
Total
|
||
|
States
|
States
|
||||||
|
Owned
|
137
|
98
|
235
|
174
|
100
|
274
|
|
|
Leased
|
3
|
1
|
4
|
5
|
25
|
30
|
|
|
140
|
99
|
239
|
179
|
125
|
304
|
||
|
The
Company’s operations are such that most products are efficiently processed
near the source of raw materials. Consequently, the Company has many
plants strategically located in grain producing areas. The annual
volume
of commodities processed will vary depending upon availability of
raw
materials and demand for finished
products.
|
|
Oilseeds
Processing
|
|
Processing
Plants
|
Procurement
Facilities
|
||||||
|
United
|
Foreign
|
Total
|
United
|
Foreign
|
Total
|
||
|
States
|
States
|
||||||
|
Owned
|
43
|
45
|
88
|
14
|
78
|
92
|
|
|
Leased
|
-
|
-
|
-
|
-
|
14
|
14
|
|
|
43
|
45
|
88
|
14
|
92
|
106
|
||
|
The
Company operates twenty-one domestic and seventeen foreign oilseed
crushing plants with a daily processing capacity of approximately
89,000
metric tons (3.3 million bushels). The domestic plants are located
in
Georgia, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska,
North Dakota, Ohio, South Carolina, Tennessee, and Texas. The foreign
plants are located in Bolivia, Brazil, Canada, England, Germany,
India,
Mexico, the Netherlands, Poland, and the Ukraine.
The
Company operates thirteen domestic oilseed refineries in Georgia,
Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, North Dakota,
and
Tennessee, as well as seventeen foreign refineries in Bolivia, Brazil,
Canada, England, France, Germany, India, the Netherlands, and Poland.
The
Company packages oils at seven domestic plants located in California,
Florida, Georgia, and Illinois, as well as at six foreign plants
located
in Bolivia, Brazil, England, and Germany. Cotton linter pulp is produced
in Tennessee and cottonseed flour is produced in Texas. The Company
operates two fertilizer blending plants in Brazil and two biodiesel
plants
in Germany.
The
Oilseeds Processing segment operates fourteen domestic country grain
elevators as adjuncts to its processing plants. These elevators,
with an
aggregate storage capacity of 6 million bushels, are located in Illinois,
Missouri and North Carolina.
This
segment also operates ninety-two foreign elevators, including port
facilities, in Bolivia, Brazil, Canada, Germany, Mexico, the Netherlands,
Paraguay, and Poland as adjuncts to its processing plants. These
facilities have a storage capacity of 126 million
bushels.
|
|
Item
2.
|
PROPERTIES
- Continued
|
|
Corn
Processing
|
|
Processing
Plants
|
Procurement
Facilities
|
||||||
|
United
|
Foreign
|
Total
|
United
|
Foreign
|
Total
|
||
|
States
|
States
|
||||||
|
Owned
|
14
|
-
|
14
|
5
|
-
|
5
|
|
|
The
Company operates five wet corn milling and two dry corn milling plants
with a daily grind capacity of approximately 50,500 metric tons (2.0
million bushels). Corn germ extraction plants, sweeteners and starches
production facilities, and bioproducts production facilities are
located
in Illinois, Iowa, Minnesota, Nebraska, North Carolina, and North
Dakota.
The Corn Processing segment also operates five domestic grain terminal
elevators as adjuncts to its processing plants. These elevators,
with an
aggregate storage capacity of 10.5 million bushels, are located in
Minnesota.
|
|
Agricultural
Services
|
|
Processing
Plants
|
Procurement
Facilities
|
||||||
|
United
|
Foreign
|
Total
|
United
|
Foreign
|
Total
|
||
|
States
|
States
|
||||||
|
Owned
|
1
|
-
|
1
|
132
|
17
|
149
|
|
|
Leased
|
1
|
-
|
1
|
5
|
5
|
10
|
|
|
2
|
-
|
2
|
137
|
22
|
159
|
||
|
The
Company operates a rice mill located in California and an animal
feed
facility in Illinois. The Agricultural Services segment operates
one
hundred thirty-seven domestic terminal, sub-terminal, country, and
river
elevators covering the major grain producing states, including fifty-three
country elevators and eighty-four sub-terminal, terminal and river
loading
facilities including eight grain export elevators in Florida, Louisiana,
Ohio and Texas. Elevators are located in Arkansas, Illinois, Indiana,
Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska,
North Dakota, Ohio, Oklahoma, Tennessee, and Texas. These elevators
have
an aggregate storage capacity of approximately 334 million bushels.
The
Company has four grain export elevators in Argentina and the Ukraine
that
have an aggregate storage capacity of approximately 20 million bushels.
The Company has thirteen country elevators located in the Ukraine,
Romania, and the Dominican Republic. In addition, the Company has
five
river elevators located in Romania and the
Ukraine.
|
|
Other
|
|
Processing
Plants
|
Procurement
Facilities
|
||||||
|
United
|
Foreign
|
Total
|
United
|
Foreign
|
Total
|
||
|
States
|
States
|
||||||
|
Owned
|
79
|
53
|
132
|
23
|
5
|
28
|
|
|
Leased
|
2
|
1
|
3
|
-
|
6
|
6
|
|
|
81
|
54
|
135
|
23
|
11
|
34
|
||
|
Item
2.
|
PROPERTIES
- Continued
|
|
The
Company operates twenty-three domestic wheat flour mills, a domestic
bulgur plant, two domestic corn flour mills, two domestic milo mills,
and
twenty-one foreign flour mills with a total daily milling capacity
of
approximately 27,100 metric tons (1.0 million bushels). The Company
also
operates six bakery mix plants. These plants and related properties
are
located in California, Illinois, Indiana, Kansas, Minnesota, Missouri,
Nebraska, New York, North Carolina, Oklahoma, Pennsylvania, Tennessee,
Texas, Washington, Barbados, Belize, Canada, England, Grenada, and
Jamaica. The Company operates two foreign formula feed plants as
adjuncts
to the wheat flour mills in Belize and Grenada. The Company operates
a
food ingredient plant and a rice milling plant in Jamaica.
The
Company operates three domestic and ten foreign chocolate and cocoa
bean
processing plants. The domestic plants are located in Massachusetts,
New
Jersey, and Wisconsin, and the foreign plants are located in Brazil,
Canada, China, England, Ivory Coast, the Netherlands, Poland, and
Singapore. The Company operates eleven cocoa bean procurement and
handling
facilities/port sites in the Ivory Coast, Indonesia, Malaysia, and
Brazil.
The
Company operates two domestic soy protein specialty plants in Illinois
and
one foreign plant in the Netherlands. Lecithin products are produced
at
six domestic and four foreign plants in Illinois, Iowa, Nebraska,
Canada,
Germany, and the Netherlands. The Company also operates a starch
and
gluten plant in Iowa and one in Canada. The Company produces soy-based
foods at plants in Illinois, North Dakota, and England. The Company
produces Vitamin E, sterols, and isoflavones at plants in Illinois.
The
Company also operates a bakery mix and specialty ingredient plant
in
Kansas and a honey drying operation in Wisconsin.
The
Company operates twenty-three domestic edible bean procurement facilities
with an aggregate storage capacity of approximately 11 million bushels,
located in Colorado, Idaho, Michigan, Minnesota, North Dakota, and
Wyoming.
The
Company also operates thirty domestic and six foreign formula feed
and
animal health and nutrition plants. The domestic plants are located
in
Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota,
Missouri, Nebraska, Ohio, Pennsylvania, South Dakota, Texas, Washington,
and Wisconsin. The foreign plants are located in Canada, China, Puerto
Rico, and Trinidad.
|
|
Item
3.
|
LEGAL
PROCEEDINGS
|
ENVIRONMENTAL
MATTERS
The
Company is involved in approximately twenty administrative and judicial
proceedings in which it has been identified as a potentially responsible party
(“PRP”) under the federal Superfund law and its state analogs for the study and
clean-up of sites contaminated by material discharged into the environment.
In
all of these matters there are numerous PRPs. Due to various factors such as
the
required level of remediation and participation in the clean-up effort by
others, the Company’s future clean-up costs at these sites cannot be reasonably
estimated. In management’s opinion, these proceedings will not, either
individually or in the aggregate, have a material adverse affect on the
Company’s financial condition or results of operations.
On
March
10, 2005, the Company received a Finding of Violation from U.S. EPA Region
5
regarding the implementation of the Pharmaceutical Maximum Achievable Control
Technology standards at the Company's Vitamin E plant located in Decatur,
Illinois (the violations were primarily related to documentation requirements).
The Company and the U.S. EPA have reached a tentative settlement which includes
a penalty of $375,000 and a requirement to perform a supplemental environmental
project at a cost of approximately $1,000,000.
|
Item
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
None.
PART
II
|
Item
5.
|
MARKET
FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
ISSUER
PURCHASES OF EQUITY
SECURITIES
|
Information
responsive to this Item is set forth in "Common Stock Market Prices and
Dividends" of the annual shareholders' report for the year ended June 30, 2006
and is incorporated herein by reference.
ISSUER
PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
Total
Number of
|
|
|
Number
of Shares
|
|
|
|
|
|
Total
Number
|
|
|
Average
|
|
|
Shares
Purchased as
|
|
|
Remaining
to be
|
|
|
|
|
|
of
Shares
|
|
|
Price
Paid
|
|
|
Part
of Publicly
|
|
|
Purchased
Under the
|
|
|
Period
|
|
|
Purchased
(1)
|
|
|
per
Share
|
|
|
Announced
Program (2)
|
|
|
Program
(2)
|
|
|
April
1, 2006 to
April
30, 2006
|
2,533
|
$
|
36.57
|
521
|
92,903,981
|
||||||||
|
May
1, 2006 to
May
31, 2006
|
43,893
|
38.42
|
27,989
|
92,875,992
|
|||||||||
|
June
1, 2006 to
June
30, 2006
|
11,350
|
41.99
|
11,350
|
92,864,642
|
|||||||||
|
Total
|
57,776
|
$
|
39.04
|
39,860
|
92,864,642
|
|
(1)
Total shares purchased represents those shares purchased as part
of the
Company’s publicly announced share repurchase program described below and
shares received as payment of the exercise price for stock option
exercises. During the three-month period ended June 30, 2006, the
Company
received 17,916 shares as payment of the exercise price for stock
option
exercises.
(2)
On November 4, 2004, the Company’s Board of Directors approved a stock
repurchase program authorizing the Company to repurchase up to 100,000,000
shares of the Company’s common stock during the period commencing January
1, 2005 and ending December 31, 2009.
|
|
Item
6.
|
SELECTED
FINANCIAL DATA
|
Information
responsive to this Item is set forth in the "Ten Year Summary of Operating,
Financial and Other Data" of the annual shareholders' report for the year ended
June 30, 2006 and is incorporated herein by reference.
|
Item
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Information
responsive to this Item is set forth in "Management's Discussion of Operations
and Financial Condition" of the annual shareholders' report for the year ended
June 30, 2006 and is incorporated herein by reference.
|
Item
7A.
|
QUANTITIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
Information
responsive to this Item is set forth in "Management's Discussion of Operations
and Financial Condition" of the annual shareholders' report for the year ended
June 30, 2006 and is incorporated herein by reference.
|
Item
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA
|
The
following financial statements and supplementary data included in the annual
shareholders' report for the year ended June 30, 2006 are incorporated herein
by
reference:
Consolidated
balance sheets--June 30, 2006 and 2005
Consolidated
statements of earnings--Years ended June 30, 2006, 2005 and 2004
Consolidated
statements of shareholders' equity--Years ended June 30, 2006, 2005 and
2004
Consolidated
statements of cash flows--Years ended June 30, 2006, 2005 and 2004
Notes
to
consolidated financial statements--June 30, 2006
Summary
of
Significant Accounting Policies
Management’s
Report on Internal Control Over Financial Reporting
Reports
of
Independent Registered Public Accounting Firm
Quarterly
Financial Data (Unaudited)
|
Item
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
None.
|
Item
9A.
|
CONTROLS
AND PROCEDURES
|
As
of June
30, 2006, an evaluation was performed under the supervision and with the
participation of the Company’s management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation
of
the Company’s “disclosure controls and procedures” (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act”)). Based on that evaluation, the Company’s management, including the Chief
Executive Officer and Chief Financial Officer, concluded the Company’s
disclosure controls and procedures were effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms. There was no change in the Company’s internal controls over financial
reporting during the Company’s most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal controls over financial reporting.
Management’s
report on internal control over financial reporting is set forth in
“Management’s Report on Internal Control Over Financial Reporting” of the annual
shareholders report for the year ended June 30, 2006 and is incorporated herein
by reference.
|
Item
9A.
|
CONTROLS
AND PROCEDURES - Continued
|
The
report
of the independent registered public accounting firm on internal control over
financial reporting is set forth in “Report of Independent Registered Public
Accounting Firm” of the annual shareholders' report for the year ended June 30,
2006 and is incorporated herein by reference.
|
Item
9B.
|
OTHER
INFORMATION
|
None.
PART
III
|
Item
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE
REGISTRANT
|
Information
with respect to directors, executive officers, code of conduct, audit committee
and audit committee financial experts of the Company, and Section 16(a)
beneficial ownership reporting compliance is set forth in “Election of
Directors,” “Corporate Governance Guidelines,” “Code of Conduct,” “Report of the
Audit Committee,” and “Section 16(a) Beneficial Ownership Reporting Compliance,”
of the definitive proxy statement for the Company’s annual meeting of
stockholders to be held on November 2, 2006 and is incorporated herein by
reference.
Information
with respect to executive officers and certain significant employees of the
Company is set forth below. Except as otherwise indicated, all positions are
with the Company.
|
Name
|
Title
|
Age
|
||
|
Ronald
S. Bandler
|
Assistant
Treasurer from January 1998. Manager of Treasury Operations from
1989 to
January 1998.
|
45
|
||
|
Lewis
W. Batchelder
|
Senior Vice President from December 2001. Group Vice President from July 1997 to December 2001. President of Grain Operations from March 2001 to August 2006. |
61 |
||
|
|
||||
|
Mark
A. Bemis
|
Vice
President from February 2005. President of ADM Cocoa from September
2001.
Vice President and General Manager, North American Division-ADM Cocoa
from
March 1999 to September 2001. Various merchandising and management
positions from 1983 to March 1999.
|
45
|
||
| J. Kevin Burgard |
Vice
President from January 2003. President of Specialty Food Ingredients
from
June 2005. Managing Director of ADM International from January 2003
to
June 2005. President of North American Oilseed Processing Division
from
March 2002 to January 2003. President, ADM Bioproducts and Feed from
September 2001 to March 2002. Vice President, North American Soybean
Division from January 2001 to September 2001. Various merchandising
management positions from 1986 to 2001.
|
44
|
||
|
Item
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT -
Continued
|
| William H. Camp |
Executive
Vice President from February 2005. Senior Vice President from December
2001 to February 2005. Group Vice President and President, North
American
Oilseed Processing Division from April 2000 to December 2001. Group
Vice
President and President, South American Oilseed Processing Division
from
March 1999 to April 2000. Vice President from April 1993 to March
1999.
|
57
|
||
| Mark J. Cheviron |
Vice
President from July 1997. Vice President of Corporate Security and
Administrative Services since May 1997. Director of Security since
1980.
|
57
|
||
|
Craig
A. Fischer
|
Vice President from September 2001. President of ADM Milling from September 2001. President of ADM BioProducts and Specialty Ingredients from July 2000 to September 2001. Vice President of ADM Corn Processing from 1985 to 2000. President of ARTCO from 1996 to 1999. |
56 |
||
|
Dennis
C. Garceau
|
Vice
President from April 1999. President of ADM Technical Services Department
from April 1999. Various senior engineering positions from 1969 to
April
1999.
|
59
|
||
|
Edward
A. Harjehausen
|
Senior
Vice President from February 2005. Group Vice President from March
2002 to
February 2005. President of ADM Bioproducts and Feed Division from
March
2002 to June 2005. President of ADM Corn Processing Division from
July
2000 to June 2005. Vice President from October 1992 to March 2002.
President of ADM Bioproducts and Food Additives from October 1999
to July
2000.
|
56
|
||
|
Shannon
Herzfeld
|
Vice
President from February 2005. Senior Vice President-International
Affairs
with Pharmaceutical Research and Manufacturers of America (PhRMA)
trade
association from January 1998 to December 2004. Director-International
Trade Services with Akin, Gump, Strauss, Hauer & Feld, L.L.P from 1985
to 1997.
|
54
|
||
|
Craig
E. Huss
|
Vice
President from January 2001. President of ADM Transportation from
1999.
Various grain elevator and merchandising management positions from
1976 to
1999.
|
54
|
||
|
Matthew
J. Jansen
|
Vice
President from January 2003. President-Grain Operations from August
2006.
President, South American Oilseed Processing Division from April
2000 to
August 2006. Vice President, South American Oilseed Processing Division
from August 1999 to April 2000. Various merchandising management
positions
from 1989 to 1999.
|
40
|
||
|
Item
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT -
Continued
|
|
Michael
Lusk
|
Vice
President from November 1999. Senior Vice President with AON/
International Risk Management Company, Inc. from 1989 to November
1999.
|
57
|
|
|
Vikram
Luthar
|
Vice
President and Treasurer from November 2004. Various treasury positions
with General Motors Corporation from 1993 to 2004.
|
39
|
|
|
Margaret
M. Loebl
|
Group
Vice President from November 2002. Vice President, Corporate Finance
of
NIKE, Inc. from 2000 to 2001. Various finance and control positions
with
General Motors Corporation from 1987 to 2000.
|
46
|
|
|
Steven
R. Mills
|
Group
Vice President and Controller from January 2002. Vice President from
February 2000 to January 2002. Controller from October 1994.
|
51
|
|
|
Randall
J. Moon
|
Vice
President from February 2005. Vice President-Compensation and Benefits
from August 2002 to February 2005. Various employee benefits and
human
resources positions with CSX Corporation from 1991 to July
2002.
|
47
|
|
|
Brian
F. Peterson
|
Senior
Vice President from January 2003. Group Vice President and Managing
Director of ADM International, Ltd. from October 1999 to January
2003.
Vice President from January 1996 to October 1999. President of ADM
Protein
Specialties Division from February 1999 to October 1999. President
of ADM
Bioproducts Division from 1995 to October 1999.
|
64
|
|
|
Raymond
V. Preiksaitis
|
Group
Vice President from July 1997. Vice President of Management Information
Systems from 1988 to July 1997.
|
54
|
|
|
John
D. Rice
|
Executive
Vice President from February 2005. Senior Vice President from February
2000 to February 2005. Group Vice President and President, North
American
Oilseed Processing Division from February 1999 to February 2000.
Vice
President from 1993 to February 1999. President of ADM Food Oils
Division
from December 1996 to February 2000.
|
52
|
|
|
Dennis
C. Riddle
|
Vice
President from May 2006. President ADM Corn Processing Division from
June
2005. Senior Vice President - Sweeteners & Starches from May 2004 to
June 2005. Vice President, Sales & Marketing for ADM Corn Processing
Division from April 1999 to May 2004.
|
59
|
|
|
Scott
A. Roberts
|
Assistant
Secretary and Assistant General Counsel from July 1997. Member of
the Law
Department since 1985.
|
46
|
|
Item
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT -
Continued
|
|
Kenneth
A. Robinson
|
Vice
President from January 1996.
|
59
|
|
|
Ismael
Roig
|
Vice
President from December 2004. Various finance and control positions
with
General Motors Corporation from 1993 to 2004.
|
39
|
|
|
Scott
A. Roney
|
Vice
President from April 2001. Member of the Law Department from 1991
to April
2001.
|
42
|
|
| Marc A. Sanner |
Assistant
Controller from January 2003. Vice President, Business Development
and
Strategic Planning from July 2001 to January 2003. Various positions
in
tax and accounting from 1987 to 2001.
|
53
|
|
|
Douglas
J. Schmalz
|
Senior
Vice President and Chief Financial Officer from January 2002. Vice
President and Chief Financial Officer from 1986 to January
2002.
|
60
|
|
| A. J. Shafter |
Vice
President and Assistant General Counsel from January 2003. Partner
with
Kehart Shafter Webber & Campbell Robinson from December 1975 to
January 2003.
|
59
|
|
|
David
J. Smith
|
Executive
Vice President, Secretary and General Counsel from January 2003.
Senior
Vice President, Secretary and General Counsel from January 2002 to
January
2003. Vice President, Secretary and General Counsel from July 1997
to
January 2002. Assistant General Counsel from 1995 to July 1997. Assistant
Secretary from 1988 to July 1997.
|
51
|
|
|
Stephen
H. Yu
|
Vice
President from January 1996.
|
46
|
|
|
Patricia
A. Woertz |
Chief
Executive Officer & President from April 2006. Executive Vice
President Downstream at Chevron Corporation from October 2001 to
March
2006. Vice President at Chevron Corporation from 1998 to 2001. President
of Chevron Products Company from 1998 to 2001.
|
53
|
|
|
Mark
Zenuk
|
Vice
President from August 2005. Managing Director-ADM International,
Ltd.
since June 2005. Various merchandising management positions from
2000 to
2005.
|
39
|
|
Item
11.
|
EXECUTIVE
COMPENSATION
|
Information
responsive to this Item is set forth in "Executive Compensation" of the
definitive proxy statement for the Company’s annual meeting of stockholders to
be held on November 2, 2006 and is incorporated herein by
reference.
|
Item
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
Information
responsive to this Item is set forth in "Principal Holders of Voting
Securities", “Election of Directors” and “Equity Compensation Plan Information”
of the definitive proxy statement for the Company’s annual meeting of
stockholders to be held on November 2, 2006 and is incorporated herein by
reference.
|
Item
13.
|
CERTAIN
RELATIONSHIPS AND RELATED
TRANSACTIONS
|
Information
responsive to this Item is set forth in "Certain Relationships and Related
Transactions" of the definitive proxy statement for the Company’s annual meeting
of stockholders to be held on November 2, 2006 and is incorporated herein by
reference.
|
Item
14.
|
PRINCIPAL
ACCOUNTANT FEES AND
SERVICES
|
Information
responsive to this Item is set forth in “Fees Paid to Independent Auditors” and
“Audit Committee Pre-Approval Policies” of the definitive proxy statement for
the Company’s annual meeting of stockholders to be held on November 2, 2006 and
is incorporated herein by reference.
PART
IV
|
Item
15.
|
EXHIBITS
AND FINANCIAL STATEMENT
SCHEDULES
|
|
(a)(1)
|
The
following consolidated financial statements and other financial data
of
the registrant and its subsidiaries included in the annual report
of the
Company to its shareholders for the year ended June 30, 2006 are
incorporated by reference in Item 8, and are also incorporated herein
by
reference:
Consolidated
balance sheets--June 30, 2006 and 2005
Consolidated
statements of earnings--Years ended
June
30, 2006, 2005 and 2004
Consolidated
statements of shareholders' equity--
Years
ended June 30, 2006, 2005 and 2004
Consolidated
statements of cash flows--Years ended
June
30, 2006, 2005 and 2004
Notes
to consolidated financial statements--June 30, 2006
Summary
of Significant Accounting Policies
Quarterly
Financial Data (Unaudited)
|
|
Item
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
- Continued
|
|
(a)(2)
|
Financial
Statement Schedules
|
|
SCHEDULE
II - VALUATION AND QUALIFYING ACCOUNTS AND
RESERVES
|
||||||||||||||||
|
Balance
at
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at
|
|
|||
|
|
|
|
Beginning
|
|
|
|
|
|
|
|
|
|
|
|
End
|
|
|
|
|
|
of
Year
|
|
|
Additions
|
|
Deductions(1)
|
|
|
Other(2)
|
|
|
of
Year
|
|
|
|
|
|
(In
thousands)
|
||||||||||||||
|
Allowance
for doubtful accounts
|
||||||||||||||||
|
2004
|
$
|
40,616
|
13,747
|
(10,503
|
)
|
(453
|
)
|
$
|
43,407
|
|||||||
|
2005
|
$
|
43,407
|
5,658
|
(6,264
|
)
|
1,599
|
$
|
44,400
|
||||||||
|
2006
|
$
|
44,400
|
13,569
|
(6,964
|
)
|
3,310
|
$
|
54,315
|
||||||||
|
(1)
Uncollectible accounts written off, net of recoveries
|
||||||||||||||||
|
(2)
Impact of business combinations and foreign currency exchange
adjustments
|
||||||||||||||||
|
All
other schedules are either not required, not applicable or the information
is otherwise included.
|
|
(a)(3)
|
LIST
OF EXHIBITS
|
|
(3)
|
(i)
|
Composite
Certificate of Incorporation, as amended, filed on November 13, 2001,
as
Exhibit (3)(i) to Form 10-Q for the quarter ended September 30, 2001
(File
No. 1-44), is incorporated herein by
reference.
|
|
(ii)
|
Bylaws,
as amended and restated, filed on May 12, 2000 as Exhibit 3(ii) to
Form
10-Q for the quarter ended March 31, 2000 (File No. 1-44), are
incorporated herein by reference.
|
|
(4)
|
Instruments
defining the rights of security holders,
including:
|
|
(i)
|
Indenture
dated June 1, 1986 between the registrant and JPMorgan Chase (formerly
known as, or successor to, The Chase Manhattan Bank, Chemical Bank,
and
Manufacturers Hanover Trust Company), as Trustee (incorporated by
reference to Exhibit 4(a) to Registration Statement No. 33-6721),
and
Supplemental Indenture dated as of August 1, 1989 between the registrant
and JPMorgan Chase (formerly known as, or successor to, The Chase
Manhattan Bank, Chemical Bank and Manufacturers Hanover Trust Company),
as
Trustee (incorporated by reference to Exhibit 4(c) to Post-Effective
Amendment No. 3 to Registration Statement No. 33-6721), relating
to:
the
$300,000,000 - 8 7/8% Debentures due April 15, 2011,
the
$300,000,000 - 8 3/8% Debentures due April 15, 2017,
the
$300,000,000 - 8 1/8% Debentures due June 1, 2012,
the
$250,000,000 - 7 1/8% Debentures due March 1, 2013,
the
$350,000,000 - 7 1/2% Debentures due March 15, 2027,
the
$200,000,000 - 6 3/4% Debentures due December 15, 2027,
the
$250,000,000 - 6 7/8% Debentures due December 15, 2097,
the
$196,210,000 - 5 7/8% Debentures due November 15, 2010,
the
$300,000,000 - 6 5/8% Debentures due May 1, 2029,
the
$400,000,000 - 7% Debentures due February 1, 2031,
the
$500,000,000 - 5.935% Debentures due October 1, 2032, and
the
$600,000,000 - 5.375% Debentures due September 15,
2035.
|
|
Item
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
- Continued
|
|
Copies
of constituent instruments defining rights of holders of long-term
debt of
the Company and Subsidiaries, other than the Indentures specified
herein,
are not filed herewith, pursuant to Instruction (b)(4)(iii)(A) to
Item 601
of Regulation S-K, because the total amount of securities authorized
under
any such instrument does not exceed 10% of the total assets of the
Company
and Subsidiaries on a consolidated basis. The registrant hereby agrees
that it will, upon request by the Commission, furnish to the Commission
a
copy of each such instrument.
|
|
(10)
|
Material
Contracts--Copies of the Company's stock option and stock unit plans,
deferred compensation plan, and savings and investment plans, pursuant
to
Instruction (b)(10)(iii)(A) to Item 601 of Regulation S-K, each of
which
is a management contract or compensation plan or arrangement required
to
be filed as an exhibit pursuant to Item 15(c) of Form 10-K, are
incorporated herein by reference as
follows:
|
|
(i)
|
Exhibits
4(c) and 4(d) to Registration Statement No. 33-49409 on Form S-8
dated
March 15, 1993 relating to the Archer Daniels Midland 1991 Incentive
Stock
Option Plan and Archer Daniels Midland Company Savings and Investment
Plan.
|
|
(ii)
|
Exhibits
4(c) and 4(d) to Registration Statement No. 333-39605 on Form S-8
dated
November 5, 1997 relating to the ADM Savings and Investment Plan
for
Salaried Employees and the ADM Savings and Investment Plan for Hourly
Employees.
|
|
(iii)
|
The
Archer-Daniels-Midland 1996 Stock Option Plan (incorporated by reference
to Exhibit A to the Company’s Definitive Proxy Statement filed with the
Securities and Exchange Commission on September 25, 1996 (File No.
1-44)).
|
|
(iv)
|
The
Archer-Daniels-Midland Company Amended and Restated Stock Unit Plan
for
Nonemployee Directors (incorporated by reference to Exhibit 99.3
to the
Company's Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 23, 2004 (File No.
1-44)).
|
|
(v)
|
Exhibits
4(c) and 4(d) to Registration Statement No. 333-75073 on Form S-8
dated
March 26, 1999 relating to the ADM Employee Stock Ownership Plan
for
Salaried Employees and the ADM Employee Stock Ownership Plan for
Hourly
Employees.
|
|
(vi)
|
The
Archer-Daniels-Midland Company Incentive Compensation Plan (incorporated
by reference to Exhibit A to the Company’s Definitive Proxy Statement
filed with the Securities and Exchange Commission on September 15,
1999
(File No. 1-44)).
|
|
(vii)
|
Exhibits
4.3 and 4.4 to Registration Statement No. 333-42612 on Form S-8 dated
July
31, 2000 relating to the ADM 401(k) Plan for Salaried Employees and
the
ADM 401(k) Plan for Hourly Employees, as amended by Post-Effective
Amendment No. 1 to Registration Statement No. 333-42612 on Form S-8
dated
August 8, 2000.
|
|
(viii)
|
ADM
Deferred Compensation Plan for Selected Management Employees II (as
adopted as of December 1, 2004) (incorporated by reference to Exhibit
99.1
to the Company’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 23, 2004 (File No.
1-44)).
|
|
(ix)
|
ADM
Supplemental Retirement Plan II (as adopted as of December 1, 2004)
(incorporated by reference to Exhibit 99.2 to the Company’s Current Report
on Form 8-K filed with the Securities and Exchange Commission on
December
23, 2004 (File No. 1-44)).
|
|
Item
15.
|
EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES -
Continued
|
|
(x)
|
The
Archer-Daniels-Midland 2002 Incentive Compensation Plan (incorporated
by
reference to Exhibit A to the Company’s Definitive Proxy Statement filed
with the Securities and Exchange Commission on September 25, 2002
(File
No. 1-44)).
|
|
(xi)
|
Management
Compensation Arrangements (incorporated by reference to Exhibit 10.1
to
the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2005 (File No. 1-44)).
|
|
(xii)
|
Form
of Stock Option Agreement (incorporated by reference to Exhibit 10.2
to
the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2005 (File No. 1-44)).
|
|
(xiii)
|
Form
of Restricted Stock Agreement (incorporated by reference to Exhibit
10.3
to the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2005 (File No. 1-44)).
|
|
(xiv)
|
Separation
Agreement between Archer-Daniels-Midland Company and Paul B. Mulhollem
dated September 29, 2005, filed on September 30, 2005 as Exhibit
10 to the
Company’s Current Report on Form 8-K (File No.
1-44)
|
|
(xv)
|
Agreement
Regarding Terms of Employment dated April 27, 2006 with Patricia
A.
Woertz, filed on May 1, 2006 as Exhibit 10.1 to the Company’s Current
Report on Form 8-K (File No. 1-44).
|
|
(xvi)
|
Transition
Agreement between Archer-Daniels-Midland Company and G. Allen Andreas
dated May 5, 2006 filed on May 8, 2006 as Exhibit 10.1 to the Company’s
Current Report on Form 8-K (File No.
1-44).
|
|
(13)
|
Portions
of annual report to shareholders incorporated by
reference
|
|
(21)
|
Subsidiaries
of the registrant
|
|
(23)
|
Consent
of independent registered public accounting
firm
|
|
(24)
|
Powers
of attorney
|
|
(31.1)
|
Certification
of Chief Executive Officer pursuant to Rule 13a - 14(a) and Rule
15d-14(a)
of the Securities Exchange Act, as
amended.
|
|
(31.2)
|
Certification
of Chief Financial Officer pursuant to Rule 13a - 14(a) and Rule
15d-14(a)
of the Securities Exchange Act, as
amended.
|
|
(32.1)
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
(32.2)
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted
pursuant
to Section 906 of the Sarbanes-Oxley Act of
2002.
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized.
Date:
September 8,
2006
ARCHER-DANIELS-MIDLAND
COMPANY
By:
/s/ D.
J. Smith
D.
J.
Smith
Executive
Vice President, Secretary
and
General Counsel
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been
signed below on September 8, 2006, by the following persons on behalf of the
Registrant and in the capacities indicated.
|
/s/
P. A. Woertz
|
/s/
A. Maciel
|
|
P.
A. Woertz,
|
A.
Maciel*,
|
|
Chief
Executive Officer, President and Director
|
Director
|
|
(Principal
Executive Officer)
|
|
|
/s/
P. J. Moore
|
|
|
/s/
D. J. Schmalz
|
P.
J. Moore*,
|
|
D.
J. Schmalz
|
Director
|
|
Senior
Vice President and
|
|
|
Chief
Financial Officer
|
/s/
M. B. Mulroney
|
|
(Principal
Financial Officer)
|
M.
B. Mulroney*,
|
|
Director
|
|
|
/s/
S. R. Mills
|
|
|
S.
R. Mills
|
/s/
T. F. O’Neill
|
|
Group
Vice President and Controller
|
T.
F. O’Neill*,
|
|
(Controller)
|
Director
|
|
/s/
G. A. Andreas
|
/s/
O. G. Webb
|
|
G.
A. Andreas*,
|
O.
G. Webb*,
|
|
Chairman
of the Board
|
Director
|
| Director | |
| s/ K. R. Westbrook | |
|
/s/
A. L. Boeckmann
|
K.
R. Westbrook*,
|
|
A.
L. Boeckmann*,
|
Director
|
|
Director
|
|
|
/s/
D. J. Smith
|
|
|
/s/
M. H. Carter
|
Attorney-in-Fact
|
|
M.
H. Carter*,
|
|
|
Director
|
|
|
/s/
R. S. Joslin
|
|
|
R.
S. Joslin *,
|
|
|
Director
|
*Powers
of
Attorney authorizing D. J. Schmalz, S. R. Mills and D. J. Smith, and each of
them, to sign the Form 10-K on behalf of the above-named officers and directors
of the Company, copies of which are being filed with the Securities and Exchange
Commission.