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Archer-Daniels-Midland Annual Report (Amendment), Year Ended Jun 30, 2003

Filing Date
Filed September 11, 2003
Period End
June 30, 2003
Security
ADM
In the record · 2016–202610-K1210-Q368-K102

ADM filed 12 annual reports (10-K), 36 quarterly reports (10-Q) and 102 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Nov ’19Nov ’19
  2. Leadership change8-K · Nov ’22Nov ’22
  3. FY2024 annual report10-K · Feb ’25Feb ’25

01—Abstract

Summary

Summary of the 10-K/A filed September 11, 2003. Cited figures are marked; the original filing is the authoritative source.

Archer-Daniels-Midland's amended FY2003 10-K/A (fiscal year ended June 30, 2003) was filed to correct a clerical error: draft versions of Exhibits 13 and 21 were inadvertently included in the original 10-K filed September 3, 2003.

Per the explanatory note, the financial position and results in Exhibit 13 are unchanged; the amendment adds explanatory language on acquisition accounting and reformats the subsidiary list. Investors should therefore read the figures below as the same numbers reported in the original filing. Note that the filing itself is dated September 11, 2003 per the request, while the document's explanatory note references the original filing on September 3, 2003.

Fiscal 2003 was a year of growth in top-line sales but weaker profitability. Net sales and other operating income rose 36% to $30.7 billiona, driven by acquisitions (Minnesota Corn Processors, A.C. Toepfer International consolidation, Pura plc, and six ABF flour mills) and higher commodity prices.

However, net earnings fell 12% to $451 millionb ($0.70 per share) from $511 million ($0.78), as reduced North American and European oilseed crush margins, drought-hit Agricultural Services and Wheat Processing results, and a smaller vitamin antitrust settlement gain ($28 million versus $147 million a year earlier) weighed on results. Corn Processing was the standout, with operating profit up 52%. The balance sheet remains conservative and liquid.

Working capital was $3.3 billionc with a 1.6 current ratio, shareholders' equity rose to $7.1 billion, and the long-term debt-to-capital ratio increased modestly to 35% from 32%. Operating cash flow was $1.1 billion, and the company carries A+/A1 long-term ratings. Key risk items include ongoing antitrust litigation (including high fructose corn syrup suits with no provision recorded), commodity price exposure, and $631 million in debt guarantees, mostly tied to equity-method affiliates.

02—Key points

Key Highlights

  1. Net sales rose 36% to $30.7 billion, largely from acquisitions, but net earnings declined 12% to $451 million ($0.70 per share) versus $511 million ($0.78) in fiscal 2002.
  2. Corn Processing operating profit increased 52% to $326 million on higher ethanol and sweetener volumes, the strongest segment performance; the MCP acquisition was consolidated from September 6, 2002.
  3. Oilseeds Processing operating profit fell 13% to $337 million due to weaker North American and European crush margins, partially offset by South American and Asian operations.
  4. Agricultural Services operating profit dropped 46% to $92 million after drought-reduced crop sizes hurt grain origination and trading, and low river levels and higher fuel costs hit barge transportation.
  5. Liquidity remained strong: $787 million in cash and short-term marketable securities, $2 billion of readily marketable inventories, $1.8 billion of unused credit lines, and shareholders' equity of $7.1 billion.
  6. Leverage edged up, with the long-term debt-to-total-capital ratio rising to 35% from 32%, after issuing $500 million of 5.935% debentures due 2032 and assuming MCP debt.
  7. Dividends increased to $0.24 per share from $0.20, and the company repurchased $101 million of stock during the year.

03—Questions

Frequently Asked Questions

  1. Why was this 10-K/A filed, and does it change ADM's financial results?

    The amendment restates Exhibits 13 and 21 because draft versions were mistakenly filed with the original 10-K due to a clerical error. Exhibit 13 contains grammatical and format revisions plus additional sentences on acquisition accounting, but the company states there were no changes to its financial position or results of operations.

  2. What drove the 36% increase in revenue while earnings declined?

    Revenue growth came mainly from recently acquired businesses (MCP in Corn Processing and A.C. Toepfer International in Agricultural Services) and higher commodity prices. Earnings declined because of weaker oilseed crush margins, drought-related losses in grain and wheat operations, and a much smaller vitamin antitrust settlement gain ($28 million versus $147 million in fiscal 2002).

  3. How strong is ADM's balance sheet and liquidity position?

    ADM reported working capital of $3.3 billion and a current ratio of 1.6 at June 30, 2003. It had $1.3 billion of commercial paper and bank borrowings outstanding with $1.8 billion available, and holds A-1/P-1 short-term and A+/A1 long-term credit ratings. Leverage increased modestly, with long-term debt to total capital at 35%.

  4. What are the main legal and financial risks investors should monitor?

    ADM faces putative class action antitrust suits involving lysine, citric acid, sodium gluconate, MSG, and high fructose corn syrup. Provisions have been recorded only for some matters, and no provision has been made for the high fructose corn syrup claims because their outcome cannot be determined. The company also has about $631 million in debt guarantees, mostly for equity-method affiliates, and is exposed to commodity price, currency, and interest rate movements.

04—Continue

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