01—Abstract
Summary
Summary of the 10-K filed February 26, 2014. Cited figures are marked; the original filing is the authoritative source.
Archer-Daniels-Midland Company (ADM) filed its 2013 10-K on February 26, 2014, detailing a year of mixed results across its diverse agribusiness operations.
The company experienced a slight decline in overall revenues, primarily attributed to lower commodity prices and sales volumes in its Agricultural Services segment, partly offset by stronger performance in its Corn Processing segment, driven by improved ethanol margins and higher volumes. Despite a challenging environment with tight crop supplies in North America due to drought, ADM demonstrated resilience through its global supply chain and diversified product portfolio. The company made significant strategic moves, including exploring the sale of its cocoa business and facing regulatory hurdles in its attempt to acquire GrainCorp.
The filing also highlights substantial investments in property, plant, and equipment, alongside ongoing research and development efforts focused on improving processing efficiency and developing new bio-based products. ADM maintained a strong liquidity position and continued its commitment to returning capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Revenues for the year ended December 31, 2013, were $89.8 billion, a slight decrease from $90.6 billion in 2012, impacted by lower average selling prices and volumes in Agricultural Services, partially offset by strong performance in Corn Processing, particularly ethanol.
- Operating profit from segments totaled $2.7 billion, a slight decrease from $2.77 billion in 2012, with significant one-time charges impacting comparability, including impairments on investments and assets.
- The company incurred a $155 million impairment charge related to its GrainCorp investment, following regulatory prohibition of its acquisition.
- Corn Processing segment operating profit saw a significant increase of 193% to $814 million, driven by improved ethanol margins and lower corn costs.
- Oilseeds Processing segment operating profit decreased by 9% to $1.47 billion, mainly due to weaker cocoa and soft seed results, although biodiesel margins improved.
- Agricultural Services segment operating profit declined by 51% to $380 million, impacted by lower origination volumes, reduced farmer selling, and an impairment charge on the GrainCorp investment.
- ADM maintained a strong financial position with $20.2 billion in shareholders' equity and $3.6 billion in cash, cash equivalents, and short-term marketable securities at year-end 2013, with a commitment to capital return through dividends and share repurchases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 26, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $89.80B$89.04B | +0.9% |
| Cost of Revenue | $85.92B$85.37B | +0.6% |
| Gross Profit | $3.89B$3.67B | +6.0% |
| R&D Expenses | $59.00M$56.00M | +5.4% |
| SG&A Expenses | $1.76B$1.63B | +8.2% |
| Interest Expense | $413.00M$441.00M | −6.3% |
| Net Income | $1.34B$1.22B | +9.7% |
| EPS (Basic) | $2.03$1.84 | +10.3% |
| EPS (Diluted) | $2.02$1.84 | +9.8% |
| Shares Outstanding (Basic) | 661.00M665.00M | −0.6% |
| Shares Outstanding (Diluted) | 663.00M666.00M | −0.5% |
05—Questions
Frequently Asked Questions
What were the main drivers of ADM's financial performance in 2013?
ADM's 2013 performance was influenced by a combination of factors, including lower commodity prices impacting revenues, particularly in Agricultural Services due to drought conditions and reduced export volumes. However, the Corn Processing segment showed strength with improved ethanol margins and higher volumes, while Oilseeds Processing saw mixed results with improved biodiesel margins but weaker cocoa and soft seed performance. One-time charges, such as investment impairments and FCPA settlements, also affected reported earnings.
How did the company's segment performance vary in 2013?
The Corn Processing segment was a standout performer, with operating profit significantly increasing due to strong ethanol margins and reduced corn costs. The Oilseeds Processing segment saw a decrease in operating profit, primarily due to weaker cocoa and soft seed results, though improved biodiesel margins provided some offset. The Agricultural Services segment experienced a substantial decline in operating profit, impacted by lower volumes and an impairment charge on its GrainCorp investment.
What is the company's outlook for capital expenditures and shareholder returns?
ADM projected capital expenditures of $1.4 billion for 2014. The company demonstrated a continued commitment to shareholder returns, planning to pay dividends and buy back approximately 18 million shares in 2014, which together were expected to result in a total cash outlay of approximately $1.4 billion.
Were there any significant non-recurring items or legal matters impacting the 2013 results?
Yes, the company reported several significant items. These included a $155 million impairment charge on its GrainCorp investment, $51 million in asset impairment charges for its Brazilian sugar mill, and $54 million in charges related to a settlement of Foreign Corrupt Practices Act (FCPA) matters. These items impacted the comparability of the reported earnings.
06—Continue