13 Page 1 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, 2000 OR [ ] 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) Delaware 41-0129150 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 4666 Faries Parkway Box 1470 Decatur, Illinois 62525 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code217-424-5200 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock, no par value New York Stock Exchange Chicago Stock Exchange Swiss Exchange Tokyo Stock Exchange Frankfurt Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None 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____ 1 Page 2 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. [ ] State the aggregate market value of the voting stock held by non- affiliates of the registrant. Common Stock, no par value--$4.8 billion (Based on the closing price of the New York Stock Exchange on August 28, 2000) 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-601,601,595 shares (August 31, 2000) DOCUMENTS INCORPORATED BY REFERENCE Portions of the annual shareholders' report for the year ended June 30, 2000 are incorporated by reference into Parts I, II and IV. Portions of the annual proxy statement for the year ended June 30, 2000 are incorporated by reference into Part III. 2 Page 3 PART I Item 1. BUSINESS (a) 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 $4.5 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 this period, the Company has contributed malting operations, Mexican wheat flour mills and masa corn flour operations to various unconsolidated joint ventures. (b) Financial Information About Industry Segments The Company is in one business segment--procuring, transporting, storing, processing and merchandising agricultural commodities and products. (c) Narrative Description of Business (i)Principal products produced and principal markets for and methods of distribution of such products: The Company is engaged in the business of procuring, transporting, storing, processing and merchandising agricultural commodities and products. It is one of the world's largest processors of oilseeds, corn and wheat. The Company also processes cocoa beans, milo, oats, barley and peanuts. Other operations include transporting, merchandising and storing agricultural commodities and products. These operations and processes produce products which have primarily two end uses: food or feed ingredients. Each commodity processed is in itself a feed ingredient as are the by-products produced during the processing of each commodity. Production processes of all commodities are capital intensive and similar in nature. These processes involve grinding, crushing or milling with further value added through extraction, refining and fermenting. Generally, each commodity can be processed by any of these methods to generate additional value-added products. 3 Page 4 Item 1. BUSINESS-Continued All commodities and related processed products share the same network of commodity procurement facilities, transportation services (including rail, barge, truck and ocean vessels) and storage facilities. The geographic areas, customers and marketing methods are basically the same for all commodities and their related further processed products. Feed ingredient products and by-products are sold to farmers, feed dealers and livestock producers, all of whom purchase products from across the entire commodity chain. Food ingredient products are also sold to one basic group of customers: food and beverage processors. Any single customer may purchase products produced from all commodities, and any single food or feed product could include ingredients produced from all commodities processed. Oilseed Products Soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed and corn germ are processed to provide vegetable oils and meals principally for the food and feed industries. Crude vegetable oil is sold "as is" or is further processed by refining and hydrogenating into margarine, shortening, salad oils and other food products. Partially refined oil is sold for use in chemicals, paints and other industrial products. Lecithin, an emulsifier produced in the vegetable oil refining process, is marketed as a food and feed ingredient. Natural source Vitamin E, an antioxidant, and distilled monoglycerides, an emulsifier, are produced from soybeans and other oilseeds. Oilseed meals supply more than one-half of the high protein ingredients used in the manufacture of commercial livestock and poultry feeds. Soybean meal is further processed into soy flour and grits, used in both food and industrial products, and into value-added soy protein products. Textured vegetable protein (TVPr), a soy protein product developed by the Company, is sold primarily to the institutional food market and, through others, to the food consumer market. The Company also produces a wide range of other edible soy protein products including isolated soy protein, soy protein concentrate, soy-based milk products, soy flours and soy protein meat substitutes (Harvest Burgersr and Harvest Burgersr for RecipesT). The Company produces and markets a wide range of consumer and institutional health foods based on the Company's various soy protein products, including soy- derived isoflavones. The Company produces cottonseed flour which is sold primarily to the pharmaceutical industry. Cotton cellulose pulp is manufactured and sold to the chemical, paper and filter markets. 4 Page 5 Item 1. BUSINESS-Continued Corn Products The Company is engaged in dry milling and wet milling corn operations. Products produced for use by the food and beverage industry include syrup, starch, glucose, dextrose, crystalline dextrose, high fructose sweeteners, crystalline fructose and grits. Corn gluten feed and distillers grains are produced for use as 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. Corn germ, a by-product of the milling process, is further processed as an oilseed. By fermentation of dextrose, the Company produces citric and lactic acids, feed-grade amino acids and vitamins, lactates, sorbitol, xanthan gum, and food emulsifiers principally for the food and feed industries. Wheat and Other Milled Products Wheat flour is sold primarily to large bakeries, durum flour is sold to pasta manufacturers and bulgur, a gelatinized wheat food, is sold to both the export and the domestic food markets. The Company produces wheat starch and vital wheat gluten for the baking industry. The Company also mills milo to produce industrial flour used in the manufacturing of wall board for the building industry. Other Products and Services The Company buys, stores and cleans agricultural commodities, such as oilseeds, corn, wheat, milo, oats and barley, for resale to other processors worldwide. The Company grinds cocoa beans and produces cocoa liquor, cocoa butter, cocoa powder, chocolate and various compounds for the food processing industry. The Company produces and distributes formula feeds and animal health and nutrition products to the livestock, dairy and poultry industries. Many of the feed ingredients and health and nutrition products are produced in the Company's other commodity processing operations. The Company produces bakery products and mixes which are sold to the baking industry. 5 Page 6 Item 1. BUSINESS--Continued The Company produces spaghetti, noodles, macaroni, and other consumer food products. The Company also produces lettuce, other fresh vegetables and herbs in its hydroponic greenhouse. The Company processes and distributes edible beans for use in many parts of the food industry. The Company raises fish in an aquaculture operation for distribution to consumer food customers. Hickory Point Bank and Trust Co. furnishes public banking and trust services, as well as cash management and securities safekeeping services for the Company. ADM Investor Services, Inc. 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. Agrinational Insurance Company acts as a direct insurer and reinsurer of a portion of the Company's domestic and foreign property and casualty insurance risks. The Company owns a 60% interest in Heartland Rail Corporation. Heartland's 80% owned affiliate, Iowa Interstate Railroad, operates a regional railroad in Iowa and Illinois. Alfred C. Toepfer International (Germany) and affiliates, in which the Company has a 75% interest (25% is held indirectly through the Company's 50% interest in Intrade), is one of the world's largest, most respected trading companies specializing in agricultural commodities and processed products. Toepfer has thirty-eight sales offices worldwide. Compagnie Industrielle et Financiere des Produits Amylaces SA (Luxembourg) and affiliates, of which the Company has a 41.5% interest, is a holding company with interests primarily in various international agri- businesses. Gruma S.A. de C.V. (Mexico) and affiliates, of which the Company has a 29% interest, is the world's largest producer and marketer of corn flour and tortillas with operations in the U.S., Mexico, Central and South America. 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. 6 Page 7 Item 1. BUSINESS-Continued The Company owns a 30% non-voting equity interest in Minnesota Corn Processors (MCP). MCP operates wet corn milling plants in Minnesota and Nebraska. The Company formed a strategic alliance with United Grain Growers of Canada (UGG) which resulted in the Company having approximately 42% ownership of UGG. UGG, with 159 facilities located throughout Western Canada, is involved in grain merchandising, crop input marketing and distribution, livestock production services and farm business communications. Consolidated Nutrition, L.C., a joint venture between the Company and Ag Processing Inc., is a supplier of premium animal feeds and animal health products. The Company has a 50% ownership interest in this joint venture. The Company has a 45% interest in Kalama Export Company, a grain export elevator in Washington. The Company owns a 28% interest in Pura PLC, a U.K. based company, that processes and markets edible oil. Eaststarch C.V. (Netherlands), of which the Company has a 50% interest, owns interest in companies that operate wet corn milling plants in Bulgaria, Hungary, Romania, Slovakia and Turkey. Almidones Mexicanos S.A. (Mexico), of which the Company has a 50% interest, operates a wet corn milling plant in Mexico. Golden Peanut Company, a joint venture among the Company, Cargill, Inc., Gold Kist, Inc. and Alimenta Processing Corporation, is a major supplier of peanuts to both the domestic and export markets. The Company has a 25% ownership interest in this joint venture. ADM-Riceland Partnership, a joint venture between the Company and Riceland Foods, Inc., is a processor of rice and rice products for institutional and consumer food customers. The Company has a 50% ownership interest in this joint venture. The Company owns a 50% interest in Sociedad Aceitera Oriente, S.A., a Bolivian company is in the oilseed crushing, refining and bottling business. The Company owns a 50% interest in ADM Doysan, a Turkish company in the oilseed crushing, refining and bottling business. 7 Page 8 Item 1. BUSINESS-Continued International Malting Company, a joint venture between the Company and the LeSaffre Company, operates barley malting plants in the United States, Australia, Canada and France. The Company has a 40% ownership interest in this joint venture. The Company participates in various joint ventures that operate oilseed crushing facilities, oil refineries and related storage facilities in China and Indonesia. The Company is a limited partner in various private equity funds which invest primarily in emerging markets that have agri-processing potential. The percentage of net sales and other operating income by classes of products and services for the last three fiscal years were as follows: <TABLE> <CAPTION> <S> <C> <C> <C> 2000 1999 1998 Oilseed products 56% 59% 63% Corn products 15 13 13 Wheat and other milled products 11 10 9 Other products and services 18 18 15 ____ ____ ____ 100% 100% 100% ==== ==== ==== </TABLE> Methods of Distribution Since the Company's customers are principally other manufacturers and processors, its products are distributed mainly in bulk from processing plants or storage facilities directly to the customers' facilities. The Company owns a large number of trucks and trailers and owns or leases large numbers of railroad tank cars and hopper cars to augment those provided by the railroads. The Company uses the inland waterway systems of North and South America and functions as a contract carrier of commodities for its own operations as well as for other companies. The Company owns or leases approximately 2,250 river barges and 53 line-haul towboats. 8 Page 9 Item 1. BUSINESS-Continued (ii) Status of new products The Company continues to expand its business through the development and production of new, value-added products. These new products include a wide-range of health and nutrition products known as nutraceuticals or functional foods. The Company has entered the vitamin market with the production of riboflavin and vitamin E and is currently expanding production facilities to produce vitamin C. The Company continues to develop its soy protein meat substitutes, Harvest Burgersr and Harvest Burgersr for RecipesT, its soy protein powdered non-dairy beverage, Nutribevr, and its non-dairy frozen dessert, DairylikeT. The Company is developing and expanding production facilities to produce soy- derived isoflavones, sterols, granular lecithin, astaxathin, distilled monoglycerides and xanthan gum. Additionally, the Company is in the early stages of development of the antioxidants beta- carotene and tocotrienols. (iii) 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 wide fluctuations due to unpredictable factors such as weather, plantings, government (domestic and foreign) farm programs, international trade policies, shifts in global demand created by population growth, changes in standards of living and worldwide production of similar and competitive crops. (iv) Patents, trademarks and licenses The Company owns several valuable patents, trademarks and licenses, but does not consider its business dependent upon any single or group of patents, trademarks or licenses. (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, wheat, corn 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. The worldwide need for food is not seasonal and is ever expanding as is the world's population. 9 Page 10 Item 1. BUSINESS-Continued (vi) Working capital items Price variations and availability of grain at harvest often cause fluctuations in the Company's inventories and short-term borrowings. (vii) Dependence on single customer No material part of the Company's business is dependent upon a single customer or very few customers. (viii) 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. (ix) Business subject to renegotiation The Company has no business with the government subject to renegotiation. (x) Competitive conditions 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, but are not limited to, Cargill, Inc., ConAgra, Inc., Corn Products International, Inc., Eridania Beghin-Say and Tate & Lyle. (xi) Research and development expenditures Practically all of the Company's technical efforts and expenditures are concerned with food and feed ingredient products. Special efforts are being made to find improvements in food technology to alleviate protein malnutrition throughout the world, utilizing the three largest United States crops: corn, soybeans and wheat. 10 Page 11 Item 1. BUSINESS-Continued The need to successfully market new or improved food and feed ingredients developed in the Company's research laboratories led to the concept of technical support. The Company is staffed with technical representatives who work closely with customers and potential customers on the development of food and feed products which incorporate Company- produced ingredients. These technical representatives are an adjunct to both the research and sales functions. 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 research is conducted at facilities in Decatur where meat and dairy pilot plants support application research. Starch and amyolitic enzyme research is done at a laboratory in Clinton, Iowa. 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. The Company maintains research centers in Quincy, Illinois 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, 2000, 1999 and 1998 for such technical efforts were approximately $23.4, $22.0 million and $17.1 million, respectively. (xii)Material effects of capital expenditures for environmental protection During 2000, $14.7 million was spent for equipment, facilities and programs for pollution control and compliance with the requirements of various environmental agencies. 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 that expenditures for environmental facilities and programs will continue at approximately the present rate with no unusual amounts anticipated for the next two years. 11 Page 12 Item 1. BUSINESS-Continued (xiii) Number of employees The number of persons employed by the Company was 22,753 at June 30, 2000. (d)Financial Information About Foreign and Domestic Operations and Export Sales The Company's foreign operations are principally in developed countries and do not entail any undue or unusual business risks. Geographic financial information is set forth in "Note 10 of Notes to Consolidated Financial Statements" of the annual shareholders' report for the year ended June 30, 2000 and is incorporated herein by reference. 12 Page 13 Item 1. BUSINESS--Continued (e) Executive Officers and Certain Significant Employees Name Title Age G. Allen Andreas Chairman of the Board of 57 Directors from January 1999. Chief Executive Officer from July 1997. President from July 1997 to February 1999. Counsel to the Executive Committee from September 1994 to July 1997. Vice President from 1988 to July 1997. Martin L. Andreas Senior Vice President from 1989.61 Assistant to the Chief Executive from 1989. Charles P. Archer Treasurer from October 1992. 44 Maureen K. Ausura Vice President from June 2000.45 Senior Vice President, Human Resources, of Giant Eagle, Inc. from 1996. Various senior personnel positions with Campbell Soup Company from 1984. Ronald S. Bandler Assistant Treasurer from January39 1998. Manager of Treasury Operations from 1989 to January 1998. Lewis W. Batchelder Group Vice President from 55 July 1997. Senior Vice President of ADM/Growmark. Various grain merchandising positions since 1971. Howard E. Buoy Group Vice President from 74 January 1993. William H. Camp Group Vice President and 51 President, North American Oilseed Processing Division from April 2000. Group Vice President and President, South American Oilseed Processing Division from March 1999 to April 2000. Vice President from April 1993 to March 1999. 13 Page 14 Item 1. BUSINESS-Continued Mark J. Cheviron Vice President from July 1997.51 Vice President of Corporate Security and Administrative Services since May 1997. Director of Security since 1980. Larry H. Cunningham Senior Vice President from 56 February 2000Consultant for the Company from October 1999 to February 2000. Group Vice President and President of ADM Corn Processing Division from October 1996 to October 1999. President of ADM Food Additives Division from October 1998 to October 1999. Vice President from July 1993 to October 1996. Anthony P. Delio Vice President from May 2000. 44 President of ADM Protein Specialties Division from October 1999. President of ADM Nutraceutical Division from May 1999. Various senior product development positions with Mars, Inc from 1980. Dennis C. Garceau Vice President from April 1999.53 President of ADM Technical Services Department. Various senior engineering positions from 1969. Craig L. Hamlin Senior Vice President from June 54 2000. Group Vice President from October 1994 to June 2000. President of ADM Milling from 1989. Edward A. HarjehausenPresident of ADM Corn Processing 50 Division from July 2000. President of ADM BioProducts and Food Additives From October 1999 to July 2000. Vice President from October 1992. Burnell D Kraft Senior Vice President from 69 July 1997. Group Vice President from January 1993 to July 1997. President of ADM/Growmark, ADM/Countrymark and Tabor Grain Co. Paul L. Krug, Jr. Vice President from 1991 and 56 14 President of ADM Investor Page 15 Services. Item 1. BUSINESS-Continued John E. Long Vice President from July 1996.71 President of ADM Research Division from 1992 to March 2000. Various senior research positions from 1975. Michael Lusk Vice President from November 1999 51 Senior Vice President with International Risk Management, Inc. from 1989. Claudia M. Madding Executive Assistant to the Chairman 49 and Chairman Emeritus from January 1999. Secretary to the Executive Committee from September 1997. Executive Assistant to the Chairman from July 1997 to January 1999. Assistant Secretary from 1993. Administrative Assistant to the Chairman from 1984 to 1997. John D. McNamara President from February 1999. 52 Group Vice President and President of North American Oilseed Processing Division from July 1997 to February 1999. President of ADM Agri-Industries since 1992. Steven R. Mills Vice President from February 2000. 45 Controller from October 1994. Stephen W. Minder Corporate Compliance Officer from 44 July 1997. Various senior internal audit positions since 1990. Paul B. Mulhollem Senior Vice President from October 51 1999. Group Vice President from July 1997 to October 1999. Vice President from January 1996 to July 1997. Managing Director of ADM International, Ltd., from 1993. Brian F. Peterson Group Vice President and Managing 58 Director of ADM International, Ltd., from October 1999. 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. 15 Page 16 Item 1. BUSINESS-Continued Raymond V. Preiksaitis Group Vice President from48 July 1997. Vice President - Management Information Systems from 1988 to July 1997. John G. Reed Vice President from 1982. 70 Richard P. Reising Senior Vice President from July56 1997. Vice President, Secretary and General Counsel from 1991 to 1997. John D. Rice Senior Vice President from 46 February 2000. Group Vice President and President, North American Oilseed Processing Division from February 1999 to February 2000. Vice President from 1993 to 1999. President of ADM Food Oils Division from December 1996 to February 2000. Scott A. Roberts Assistant Secretary and Assistant 40 General Counsel from July 1997. Member of the Law Department since 1985. Kenneth A. Robinson Vice President from January 1996. 53 Vice President of ADM Processing Division from 1985. Douglas J. Schmalz Vice President and Chief 54 Financial Officer from 1986. David J. Smith Vice President, Secretary and 45 General Counsel from July 1997. Assistant General Counsel from 1995 to 1997. Assistant Secretary from 1988 to 1997. Member of the Law Department since 1981. Stephen H. Yu Vice President from January 1996. 40 Managing Director of ADM Asia-Pacific, Ltd., from 1993. Officers of the registrant are elected by the Board of Directors for terms of one year and until their successors are duly elected and qualified. 16 Page 17 Item 2. PROPERTIES PROCESSING FACILITIES The Company owns, leases, or has a 50% or greater interest in the following processing plants: United States Foreign Total Owned 137 93 230 Leased 2 2 4 Joint Venture 47 31 78 186 126 312 The Company's operations are such that most products are efficiently processed near the source of raw materials. Consequently, the Company has many plants located strategically in grain producing areas. The annual volume processed will vary depending upon availability of raw material and demand for finished products. The Company operates thirty-three domestic and seventeen foreign oilseed crushing plants with a daily processing capacity of approximately 90,000 metric tons (3.3 million bushels). The domestic plants are located in Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Mississippi, Nebraska, North Dakota, Ohio, South Carolina, Tennessee and Texas. The foreign plants are located in Brazil, Canada, England, Germany, India, Mexico, the Netherlands and Poland. The Company also has interests, through joint ventures, in oilseed crushing plants in Bolivia and Turkey. The Company operates four wet corn milling and two dry corn milling plants with a daily grind capacity of approximately 41,700 metric tons (1.6 million bushels). These plants and other related properties, including corn germ extraction and corn gluten pellet plants, are located in Illinois, Iowa, New York and North Dakota. The Company also has interests, through joint ventures, in corn milling plants in Bulgaria, Hungary, Mexico, Romania, Slovakia and Turkey. The Company operates twenty-nine domestic wheat and durum flour mills, a domestic bulgur plant, three domestic corn flour mills, two domestic milo mills, and eighteen foreign flour mills with a total daily milling capacity of approximately 31,800 metric tons (1.1 million bushels). The Company also operates seven bakery mix and specialty ingredient plants, one pasta plant, and two starch and gluten plants. These plants and other related properties are located in California, Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Washington, Wisconsin, Barbados, Belize, Canada, England, Grenada, Jamaica, and the Netherlands Antilles. The company also has an interest, through a joint venture, in rice milling plants in Arkansas and Louisiana. 17 Page 18 Item 2. PROPERTIES-Continued The Company operates fourteen domestic oilseed refineries in Georgia, Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Tennessee and Texas as well as thirteen foreign refineries in Brazil, Canada, Germany, India, the Netherlands and Poland. The company also has interests, through joint ventures, in oilseed refineries in Texas, Bolivia, England, and Turkey. The company produces packaged oils in California, Georgia, Illinois, Brazil and Germany and has interests, through joint ventures, in packaged oils plants in Bolivia, England, and Turkey. Soy protein specialty products are produced in Illinois and the Netherlands, lecithin products are produced in Illinois, Iowa, Nebraska, Canada, Germany and the Netherlands, and Vitamin E is produced in Illinois. Cotton linter pulp is produced in Tennessee and cottonseed flour is produced in Texas. The Company produces feed and food additives at seven bioproducts plants located in Illinois, North Carolina, China and Ireland. The Company also operates thirteen domestic and eleven foreign formula feed and animal health and nutrition plants. The domestic plants are located in Georgia, Illinois, Indiana, Iowa, Nebraska, Ohio, Texas and Washington. The foreign plants are located in Barbados, Belize, Canada, China, Grenada, Ireland, the Netherlands Antilles, and Puerto Rico. The company also has interests, through joint ventures, in formula feed plants in Arkansas, Colorado, Georgia, Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, Ohio, Pennsylvania, Tennessee, Wisconsin, Canada, China, Puerto Rico and Trinidad. The Company operates four domestic and eleven foreign chocolate and cocoa bean processing plants. The domestic plants are located in Georgia, Massachusetts, New Jersey, and Wisconsin, and the foreign plants are located in Brazil, Canada, China, England, France, Germany, the Netherlands, Poland and Singapore. The Company operates various other food and food ingredient plants in North Dakota, England, France, Germany and Jamaica. 18 Page 19 Item 2. PROPERTIES-Continued PROCUREMENT FACILITIES The Company owns, leases, or has a 50% or greater interest in the following procurement facilities: <TABLE> <CAPTION> <S> <C> <C> <C> United States Foreign Total Owned 249 80 329 Leased 30 47 77 Joint Venture 8 15 23 287 142 429 </TABLE> The Company operates two hundred twenty-eight domestic terminal, country, and river elevators covering the major grain producing states, including one hundred fifty-six country elevators and seventy-two terminal and river loading facilities including five grain export elevators in Louisiana, Maryland, and Texas. Elevators are located in Arkansas, Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Tennessee and Texas. Domestic grain terminals, elevators and processing plants have an aggregate storage capacity of approximately 491 million bushels. The Company also has interests, through joint ventures, in eight domestic grain elevators located in Minnesota and South Dakota. Domestic joint venture grain terminals and elevators have an aggregate storage capacity of approximately 6 million bushels. The Company also operates one hundred twenty-three foreign grain elevators with an aggregate storage capacity of approximately 109 million bushels, including four export facilities located in Brazil. These elevators are located in Argentina, Barbados, Brazil, Canada, Germany, Paraguay and Uraguay. The Company also has an interest, through a joint venture, in fifteen grain elevators in Bolivia with an aggregate storage capacity of approximately 6 million bushels. The Company operates forty-seven domestic and four foreign edible bean procurement facilities with an aggregate storage capacity of approximately 22 million bushels, located in California, Colorado, Idaho, Michigan, Minnesota, North Dakota, Wyoming and Canada. Four cotton gins are located in Texas and serve the cottonseed crushing plants in that area. 19 Page 20 Item 3. LEGAL PROCEEDINGS ENVIRONMENTAL MATTERS In 1993, the State of Illinois Environmental Protection Agency ("Illinois EPA") brought administrative enforcement proceedings arising out of the Company's alleged failure to obtain proper permits for certain pollution control equipment at one of the Company's processing facilities in Illinois. The Company and Illinois EPA executed a settlement agreement which is currently before the Illinois Pollution Control Board for approval. However, in June 1999, the United States Environmental Protection Agency (U.S. EPA) issued a Notice of Violation involving some of the matters covered under the pending State settlement and in January 2000 the United States Department of Justice ("DOJ") issued a Notice of Proposed Civil Enforcement Action against the Company regarding these same matters. Further, in 1998, the Illinois EPA filed an administrative enforcement proceeding arising out of certain alleged permit exceedances relating to the same facility. Also in 1998 and 2000, the Company voluntarily reported to the Illinois EPA certain other permit exceedances related to other processes at that same facility, and in 1999 Illinois EPA issued a Notice of Violation relating to the exceedances disclosed in 1998. The Company understands that all pending and threatened enforcement actions at the facility will be consolidated into two proceedings, one to be brought by the State which will subsume the settlement presently pending before the Board and another to be brought by the Department of Justice. The Company and the DOJ have agreed to a penalty of approximately $1.5 million in settlement of the federal action, and the Company has offered to settle the remaining matters with the State for approximately $1.1 million. Also in 1998, the State of Illinois filed a civil administrative action alleging violations of the Illinois Environmental Protection Act, and regulations promulgated thereunder, arising from a one time release of denatured ethanol at one of its Illinois distribution facilities. In January 2000 U.S. EPA issued a Notice of Violation to the Company for another Illinois facility regarding alleged emissions violations and the failure to obtain proper permits for various equipment at that facility. In management's opinion the settlements and the remaining proceedings, all seeking compliance with applicable environmental permits and regulations, will not, either individually or in the aggregate, have a material adverse affect on the Company's financial condition or results of operations. On July 31, 2000, the federal environmental authorities in Brazil issued an Administrative Notice upon the Company requiring payment of approximately $5.6 million for the discharge of an industrial wastewater from its facility located in Rondonopolis. The Company intends to appeal this penalty. 20 Page 21 Item 3. LEGAL PROCEEDINGS-Continued The Company is involved in approximately 25 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. However, 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. LITIGATION REGARDING ALLEGED ANTICOMPETITIVE PRACTICES The Company is currently a defendant in various lawsuits related to alleged anticompetitive practices by the Company as described in more detail below. The Company intends to vigorously defend the actions unless they can be settled on terms deemed acceptable to the parties. GOVERNMENTAL INVESTIGATIONS Federal grand juries in the Northern Districts of Illinois, California and Georgia, under the direction of the DOJ, have been investigating possible violations by the Company and others with respect to the sale of lysine, citric acid and high fructose corn syrup, respectively. In connection with an agreement with the DOJ in fiscal 1997, the Company paid the United States fines of $100 million. This agreement constitutes a global resolution of all matters between the DOJ and the Company and brought to a close all DOJ investigations of the Company. The federal grand juries in the Northern Districts of Illinois (lysine) and Georgia (high fructose corn syrup) have been closed. The Company has received notice that certain foreign governmental entities were commencing investigations to determine whether anticompetitive practices occurred in their jurisdictions. Except for the investigations being conducted by the Commission of the European Communities, the Mexican Federal Competition Commission and the Brazilian Department of Protection and Economic Defense as described below, all such matters have been resolved as previously reported. 21 Page 22 Item 3. LEGAL PROCEEDINGS-Continued In June 1997, the Company and several of its European subsidiaries were notified that the Commission of the European Communities had initiated an investigation as to possible anticompetitive practices in the amino acid markets, in particular the lysine market, in the European Union. On October 29, 1998, the Commission of the European Communities initiated formal proceedings against the Company and others and adopted a Statement of Objections. The reply of the Company was filed on February 1, 1999 and the hearing was held on March 1, 1999. On August 8, 1999, the Commission of the European Communities adopted a supplementary Statement of Objections expanding the period of involvement as to certain other companies. On June 7, 2000, the Commission of the European Communities adopted a decision imposing a fine against the Company in the amount of EUR 47.3 million. The Company intends to appeal this decision. In September 1997, the Company received a request for information from the Commission of the European Communities with respect to an investigation being conducted by that Commission into the possible existence of certain agreements and/or concerted practices in the citric acid market in the European Union. On March 28, 2000, the Commission of European Communities initiated formal proceedings against the Company and others and adopted a Statement of Objections. In November 1998, a European subsidiary of the Company received a request for information from the Commission of the European Communities with respect to an investigation being conducted by that Commission into the possible existence of certain agreements and/or concerted practices in the sodium gluconate market in the European Union. On May 17, 2000, the Commission of European Communities initiated formal proceedings against the Company and others and adopted a Statement of Objections. On February 11, 1999 a Mexican subsidiary of the Company was notified that the Mexican Federal Competition Commission had initiated an investigation as to possible anticompetitive practices in the citric acid market in Mexico. On May 8, 2000, a Brazilian subsidiary of the Company was notified of the commencement of an administrative proceeding by the Department of Protection and Economic Defense relative to possible anticompetitive practices in the lysine market in Brazil. On July 3, 2000, the Brazilian subsidiary of the Company filed a Statement of Defense in this proceeding. The ultimate outcome and materiality of the proceedings of the Commission of the European Communities cannot presently be determined. The Company may become the subject of similar antitrust investigations conducted by the applicable regulatory authorities of other countries. HIGH FRUCTOSE CORN SYRUP ACTIONS The Company, along with other companies, has been named as a defendant in thirty-one antitrust suits involving the sale of high fructose corn syrup in the United States. Thirty of these actions have been brought as putative class actions. 22 Page 23 Item 3. LEGAL PROCEEDINGS-Continued FEDERAL ACTIONS. Twenty-two of these putative class actions allege violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek injunctions against continued alleged illegal conduct, treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of high fructose corn syrup during certain periods in the 1990s. These twenty-two actions have been transferred to the United States District Court for the Central District of Illinois and consolidated under the caption In Re High Fructose Corn Syrup Antitrust Litigation, MDL No. 1087 and Master File No. 95-1477. On January 14, 1997, the Company, along with other companies, was named a defendant in a non-class action antitrust suit involving the sale of high fructose corn syrup and corn syrup. This action which is encaptioned Gray & Co. v. Archer Daniels Midland Co., et al, No. 97- 69-AS, and was filed in federal court in Oregon, alleges violations of federal antitrust laws and Oregon and Michigan state antitrust laws, including allegations that defendants conspired to fix, raise, maintain and stabilize the price of corn syrup and high fructose corn syrup, and seeks treble damages, attorneys' fees and costs of an unspecified amount. This action was transferred for pretrial proceedings to the United States District Court for the Central District of Illinois. STATE ACTIONS. The Company, along with other companies, also has been named as a defendant in seven putative class action antitrust suits filed in California state court involving the sale of high fructose corn syrup. These California actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. One of the California putative classes comprises certain direct purchasers of high fructose corn syrup in the State of California during certain periods in the 1990s. This action was filed on October 17, 1995 in Superior Court for the County of Stanislaus, California and encaptioned Kagome Foods, Inc. v Archer-Daniels-Midland Co. et al., Civil Action No. 37236. This action has been removed to federal court and consolidated with the federal class action litigation pending in the Central District of Illinois referred to above. The other six California putative classes comprise certain indirect purchasers of high fructose corn syrup and dextrose in the State of California during certain periods in the 1990s. One such action was filed on July 21, 1995 in the Superior Court of the County of Los Angeles, California and is encaptioned Borgeson v. Archer-Daniels-Midland Co., et al., Civil Action No. BC131940. This action and four other indirect purchaser actions have been coordinated before a single court in Stanislaus County, California under the caption, Food Additives (HFCS) cases, Master File No. 39693. The other four actions are encaptioned, Goings v. Archer Daniels Midland Co., et al., Civil 23 Page 24 Item 3. LEGAL PROCEEDINGS-Continued Action No. 750276 (Filed on July 21, 1995, Orange County Superior Court); Rainbow Acres v. Archer Daniels Midland Co., et al., Civil Action No. 974271 (Filed on November 22, 1995, San Francisco County Superior Court); Patane v. Archer Daniels Midland Co., et al., Civil Action No. 212610 (Filed on January 17, 1996, Sonoma County Superior Court); and St. Stan's Brewing Co. v. Archer Daniels Midland Co., et al., Civil Action No. 37237 (Filed on October 17, 1995, Stanislaus County Superior Court). On October 8, 1997, Varni Brothers Corp. filed a complaint in intervention with respect to the coordinated action pending in Stanislaus County Superior Court, asserting the same claims as those advanced in the consolidated class action. The Company, along with other companies, also has been named a defendant in a putative class action antitrust suit filed in Alabama state court. The Alabama action alleges violations of the Alabama, Michigan and Minnesota antitrust laws, including allegations that defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, and seeks an injunction against continued illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the Alabama action comprises certain indirect purchasers in Alabama, Michigan and Minnesota during the period March 18, 1994 to March 18, 1996. This action was filed on March 18, 1996 in the Circuit Court of Coosa County, Alabama, and is encaptioned Caldwell v. Archer-Daniels-Midland Co., et al., Civil Action No. 96-17. On April 23, 1997, the court granted the defendants' motion to sever and dismiss the non-Alabama claims. On March 27, 2000, defendants moved for summary judgment in light of a recent Alabama Supreme Court case holding that the Alabama antitrust laws apply only to intrastate commerce. That matter is currently pending. LYSINE ACTIONS The Company, along with other companies, had been named as a defendant in twenty-three putative class action antitrust suits involving the sale of lysine in the United States. Except for the actions specifically described below, all such suits have been settled, dismissed or withdrawn. CANADIAN ACTIONS. The Company, along with other companies, has been named as a defendant in one putative class action antitrust suit filed in Ontario Court (General Division) in which the plaintiffs allege the defendants reached agreements with one another as to the price at which each of them would sell lysine to customers in Ontario and as to the total volume of lysine that each company would supply in Ontario in violation of Sections 45 (1)(c) and 61(1)(b)of the Competition Act. The putative class is comprised of certain indirect purchasers in Ontario during the period from June 1, 1992 to June 27, 1995. The plaintiffs seek C$25 million for violations of the Competition Act, C$10 million in punitive, exemplary and aggravated damages, interest and costs of the action. This action was served upon the Company on June 11, 1999 and is encaptioned Rein Minnema and 24 Page 25 Item 3. LEGAL PROCEEDINGS-Continued Minnema Farms Ltd. v. Archer-Daniels-Midland Company, et al., Court File No. G23495-99. The Company, along with other companies, has been named as a respondent in a motion seeking authorization to institute a class action filed in Superior Court in the Province of Quebec, District of Montreal, in which the applicants allege the respondents conspired, combined, agreed or arranged to prevent or lessen, unduly, competition with respect to the sale of lysine in Canada in violation of Section 45(1)(c) of the Competition Act. The putative class is comprised of certain indirect purchasers in Quebec after June, 1992. The applicants seek at least C$4,460,000, costs of investigation, attorneys' fees and interest. This motion is encaptioned Option Consommateurs, et al v. Archer-Daniels-Midland Company, et al., Court No. 500- 06-000089-991. STATE ACTION. The Company has been named as a defendant, along with other companies, in one putative class action antitrust suit alleging violations of the Alabama antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of lysine, and seeking an injunction against continued alleged illegal conduct, damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in this action comprises certain indirect purchasers of lysine in the State of Alabama during certain periods in the 1990s. This action was filed on August 17, 1995 in the Circuit Court of DeKalb County, Alabama, and is encaptioned Ashley v. Archer-Daniels- Midland Co., et al., Civil Action No. 95-336. On March 13, 1998, the court denied plaintiff's motion for class certification. Subsequently, the plaintiff amended his complaint to add approximately 300 individual plaintiffs. On March 23, 2000, defendants filed a motion for summary judgment in light of a recent Alabama Supreme Court case holding that the Alabama antitrust laws apply only to intrastate commerce. That motion is currently pending. CITRIC ACID ACTIONS The Company, along with other companies, had been named as a defendant in fourteen putative class action antitrust suits and two non-class action antitrust suits involving the sale of citric acid in the United States. Except for the action specifically described below, all such suits have been settled or dismissed. 25 Page 26 Item 3. LEGAL PROCEEDINGS-Continued CANADIAN ACTIONS. The Company, along with other companies, has been named as a defendant in three actions filed pursuant to the Class Proceedings Act, 1992, in which the plaintiffs allege that the defendants violated the Competition Act with respect to the sale of citric acid in Canada. One of these actions was filed in the Superior Court of Justice, in Newmarket, Ontario, and encaptioned Ashworth v. Archer-Daniels-Midland Company, et al., Court file No. 53510/99. The putative class is comprised of certain indirect purchasers in Ontario during the period from July 1, 1991 to June 27, 1995. The plaintiffs in this action seek general damages in the amount of C$30 million and punitive and exemplary damages in the amount of C$30 million, interest, costs and fees. The second action was filed in the Superior Court of Justice in London, Ontario, and encaptioned Fairlee Fruit Juice Limited v. Archer- Daniels-Midland Company, et al., Court File No. 32562/99. The plaintiffs in this action seek general damages in the amount of C$300 million, punitive and exemplary damages in the amount of C$20 million, interest, costs and fees. The Company has become aware of, but has not yet been formally served with, a third action commenced in Barrie, Ontario in the (Ontario) Superior Court of Justice under the Class Proceedings Act. In that action, encaptioned E. D. Smith & Sons, Limited v. Archer Daniels Midland Company et al., Court File No. 99-B673, the putative class is persons or corporations who were resident or carried on business in Ontario and who were direct and indirect purchasers of citric acid between July 1, 1991 and July 27, 1995. The action claims damages in the amount of C$24,000,000 for breach of the Competition Act, conspiracy and infliction of economic injury, plus C$10,000,000 for punitive, exemplary and aggravated damages, plus interest and costs. All three Ontario actions referred to above have now been transferred to Toronto, Ontario. The Company, along with other companies, has been named as a respondent in a motion seeking authorization to institute a class action filed in Superior Court in the Province of Quebec, District of Montreal, in which the applicants allege the respondents comprised, combined, agreed or arranged to prevent or lessen, unduly, competition with respect to the sale of citric acid in Canada in violation of Section 45(1)(c) of the Competition Act. The putative class is comprised of certain indirect purchasers in Quebec since July, 1991. The applicants seek C$3,115,000, the costs of investigation, attorneys' fees and interest. This motion is encaptioned Option Consommateurs, et al. v. Archer-Daniels-Midland-Company, et al., Court No.500-06- 000094-991. HIGH FRUCTOSE CORN SYRUP/CITRIC ACID STATE CLASS ACTIONS The Company, along with other companies, has been named as a defendant in five putative class action antitrust suits involving the sale of both high fructose corn syrup and citric acid. Two of these actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seek treble damages of 26 Page 27 Item 3. LEGAL PROCEEDINGS-Continued an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. The putative class in one of these California cases comprises certain direct purchasers of high fructose corn syrup and citric acid in the State of California during the period January 1, 1992 until at least October 1995. This action was filed on October 11, 1995 in the Superior Court of Stanislaus County, California and is entitled Gangi Bros. Packing Co. v. Archer-Daniels-Midland Co., et al., Civil Action No. 37217. The putative class in the other California case comprises certain indirect purchasers of high fructose corn syrup and citric acid in the state of California during the period October 12, 1991 until November 20, 1995. This action was filed on November 20, 1995 in the Superior Court of San Francisco County and is encaptioned MCFH, Inc. v. Archer-Daniels-Midland Co., et al., Civil Action No. 974120. The California Judicial Council has bifurcated the citric acid and high fructose corn syrup claims in these actions and coordinated them with other actions in San Francisco County Superior Court and Stanislaus County Superior Court. As noted in prior filings, the Company accepted a settlement agreement with counsel for the citric acid plaintiff class. This settlement received final court approval and the case was dismissed on September 30, 1998. The Company, along with other companies, also has been named as a defendant in at least one putative class action antitrust suit filed in West Virginia state court involving the sale of high fructose corn syrup and citric acid. This action also alleges violations of the West Virginia antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the West Virginia action comprises certain entities within the State of West Virginia that purchased products containing high fructose corn syrup and/or citric acid for resale from at least 1992 until 1994. This action was filed on October 26, 1995, in the Circuit Court for Boone County, West Virginia, and is encaptioned Freda's v. Archer-Daniels-Midland Co., et al., Civil Action No. 95-C-125. The Company, along with other companies, also has been named as a defendant in a putative class action antitrust suit filed in the Superior Court for the District of Columbia involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the District of Columbia antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative class in the District of Columbia action comprises certain persons within the District of Columbia that purchased products containing high fructose corn syrup and/or citric acid during the period January 1, 1992 through December 31, 1994. This action was filed on April 12, 1996 in the Superior Court for the District of Columbia, and is encaptioned Holder v. Archer-Daniels-Midland Co., et al., Civil Action No. 96- 2975. On November 13, 1998, plaintiff's motion for class certification was granted. The Company, along with other companies, has been named as a defendant in a putative class action 27 Page 28 Item 3. LEGAL PROCEEDINGS-Continued antitrust suit filed in Kansas state court involving the sale of high fructose corn syrup and citric acid. This action alleges violations of the Kansas antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup and citric acid, and seeks treble damages of an unspecified amount, court costs and other unspecified relief. The putative class in the Kansas action comprises certain persons within the State of Kansas that purchased products containing high fructose corn syrup and/or citric acid during at least the period January 1, 1992 through December 31, 1994. This action was filed on May 7, 1996 in the District Court of Wyandotte County, Kansas and is encaptioned Waugh v. Archer-Daniels-Midland Co., et al., Case No. 96-C-2029. Plaintiff's motion for class certification is currently pending. HIGH FRUCTOSE CORN SYRUP/CITRIC ACID/LYSINE STATE CLASS ACTIONS The Company, along with other companies, has been named as a defendant in six putative class action antitrust suits filed in California state court involving the sale of high fructose corn syrup, citric acid and/or lysine. These actions allege violations of the California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the prices of high fructose corn syrup, citric acid and/or lysine, and seek treble damages of an unspecified amount, attorneys fees and costs, restitution and other unspecified relief. One of the putative classes comprises certain direct purchasers of high fructose corn syrup, citric acid and/or lysine in the State of California during a certain period in the 1990s. This action was filed on December 18, 1995 in the Superior Court for Stanislaus County, California and is encaptioned Nu Laid Foods, Inc. v. Archer-Daniels-Midland Co., et al., Civil Action No. 39693. The other five putative classes comprise certain indirect purchasers of high fructose corn syrup, citric acid and/or lysine in the State of California during certain periods in the 1990s. One such action was filed on December 14, 1995 in the Superior Court for Stanislaus County, California and is encaptioned Batson v. Archer-Daniels-Midland Co., et al., Civil Action No. 39680. The other actions are encaptioned Nu Laid Foods, Inc. v. Archer Daniels Midland Co., et al., No 39693 (Filed on December 18, 1995, Stanislaus County Superior Court); Abbott v. Archer Daniels Midland Co., et al., No. 41014 (Filed on December 21, 1995, Stanislaus County Superior Court); Noldin v. Archer Daniels Midland Co., et al., No. 41015 (Filed on December 21, 1995, Stanislaus County Superior Court); Guzman v. Archer Daniels Midland Co., et al., No. 41013 (Filed on December 21, 28 Page 29 Item 3. LEGAL PROCEEDINGS-Continued 1995, Stanislaus County Superior Court) and Ricci v. Archer Daniels Midland Co., et al., No. 96-AS-00383 (Filed on February 6, 1996, Sacramento County Superior Court). As noted in prior filings, the plaintiffs in these actions and the lysine defendants have executed a settlement agreement that has been approved by the court and the California Judicial Council has bifurcated the citric acid and high fructose corn syrup claims and coordinated them with other actions in San Francisco County Superior Court and Stanislaus County Superior Court. MONOSODIUM GLUTAMATE ACTIONS The Company, along with other companies, has been named as a defendant in twelve putative class action antitrust suits involving the sale of monosodium glutamate and/or other food flavor enhancers in the United States. FEDERAL ACTIONS. Eight of these putative class actions allege violations of federal antitrust laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the price of monosodium glutamate, disodium inosinate and disodium guanylate, and seek various relief, including treble damages of an unspecified amount, attorneys fees and costs, and other unspecified relief. The putative classes in these cases comprise certain direct purchasers of monosodium glutamate, disodium inosinate and/or disodium guanylate during certain periods in the 1990's to the present. The Company has never produced or sold disodium inosinate or disodium guanylate. One such action was filed on October 27, 1999 in the United States District Court for the Northern District of California and is encaptioned Thorp, Inc. v. Archer- Daniels-Midland Company, et al., NoC99 4752 (VRW). The second action was filed on October 27, 1999 in the United States District Court for the Northern District of California and is encaptioned Premium Ingredients, Ltd. v. Archer-Daniels-Midland Co., et al., No. C 99 4742(MJJ). The third action was filed on October 28, 1999 in the United States District Court for the Northern District of California and is encaptioned Felbro Food Products v. Archer-Daniels-Midland Company, et al., No.C99 4761(MJJ). The fourth action was filed on November 17, 1999 in the United States District Court for the Northern District of California and is encaptioned First Spice Mixing Co., Inc. v. Archer Daniels Midland Co., et al., No. C 99 4977 (PJH). The fifth action was filed on November 23, 1999 in the United States District Court for the District of New Jersey and is encaptioned Diversified Foods and Seasonings, Inc. v. Archer Daniels Midland Co., Inc. et al., No. 99 CV 5501. The sixth action was filed on December 16, 1999 in the United States District Court for the Eastern District of New York and 29 Page 30 Item 3. LEGAL PROCEEDINGS-Continued is encaptioned M. Phil Yen, Inc. v. Ajinomoto Co. Inc., et al., No. 99 Div 06514 (EK). The seventh action was filed on January 27, 2000 in the Northern District of California and is encaptioned Chicago Ingredients, Inc. v. Archer-Daniels-Midland Co., et al., No. C 00 0308 (JL). The eighth action was filed on April 12, 2000 in the Eastern District of Pennsylvania and is encaptioned Heller Seasonings & Ingredients, Inc. v. Ajinomoto U.S.A., Inc., et al., No. 00-CV-1905. The Judicial Panel on Multidistrict Litigation has consolidated these actions for coordinated pretrial discovery in the United States District Court of the District of Minnesota. STATE ACTION. The Company, along with at least one other company, also has been named as a defendant in four putative class action antitrust suits filed in California state court involving the sale of monosodium glutamate and/or other food flavor enhancers. These actions allege violations of California antitrust and unfair competition laws, including allegations that the defendants agreed to fix, stabilize and maintain at artificially high levels the price of monosodium glutamate and/or other food flavor enhancers, and seek treble damages of an unspecified amount, restitution, attorneys' fees and costs, and other unspecified relief. The putative classes in these actions comprise certain indirect purchasers of monosodium glutamate and/or other food flavor enhancers in the State of California during certain periods in the 1990's. The first action originally was filed on June 25, 1999 in the Superior Court of San Francisco County and in encaptioned Fu's Garden Restaurant v. Archer-Daniels-Midland Company, et al., Civil Action No. 304471. The second action was filed on January 14, 2000 in the Superior Court of San Francisco County and is encaptioned JMN Restaurant Management, Inc. v. Ajinomoto Co., Inc., et al., Civil Action No. 309236. The third action was filed on May 2, 2000 in the Superior Court of San Francisco County and is encaptioned Tanuki Restaurant and Lilly Zapanta v. Archer Daniels Midland Co., et al, Civil Action No. 311871. The fourth action was filed on May 24, 2000 in the Superior Court of San Francisco County and is encaptioned Tasty Sunrise Burgers v. Archer Daniels Midland Co., et al., Civil Action No. 312373. On June 19, 2000, the court consolidated all of these cases for pretrial and trial purposes. OTHER The Company has made provisions to cover certain legal proceedings and related costs and expenses as described in the notes to the unaudited consolidated financial statements and management's discussion of operations and financial condition. However, because of the early stage of other putative class actions and proceedings described above, 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 audited consolidated financial statements. 30 Page 31 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 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, 2000 and is incorporated herein by reference. 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, 2000 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, 2000 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, 2000 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, 2000 are incorporated herein by reference: Consolidated balance sheets--June 30, 2000 and 1999 Consolidated statements of earnings--Years ended June 30, 2000, 1999 and 1998 Consolidated statements of shareholders' equity--Years ended June 30, 2000, 1999 and 1998 Consolidated statements of cash flows--Years ended June 30, 2000, 1999 and 1998 Notes to consolidated financial statements--June 30, 2000 Summary of Significant Accounting Policies Report of Independent Auditors Quarterly Financial Data (Unaudited) 31 Page 32 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to directors and executive officers is set forth in "Election of Directors" 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 October 26, 2000 and is incorporated herein by reference. Certain information with respect to executive officers is included in Item 1(e) of this report. Item 11. EXECUTIVE COMPENSATION Information responsive to this Item is set forth in "Executive Compensation" and "Compensation Committee Report" of the definitive proxy statement for the Company's annual meeting of Stockholders to be held on October 26, 2000 and is incorporated herein by reference. Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information responsive to this Item is set forth in "Principal Holders of Voting Securities" and "Election of Directors" of the definitive proxy statement for the Company's annual meeting of Stockholders to be held on October 26, 2000 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 October 26, 2000 and is incorporated herein by reference. PART IV Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1)The following consolidated financial statements and other financial data of the registrant and its subsidiaries, included in the annual report of the registrant to its shareholders for the year ended June 30, 2000, are incorporated by reference in Item 8, and are also incorporated herein by reference: Consolidated balance sheets--June 30, 2000 and 1999 Consolidated statements of earnings--Years ended June 30, 2000, 1999 and 1998 32 Page 33 Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K--Continued Consolidated statements of shareholders' equity-- Years ended June 30, 2000, 1999 and 1998 Consolidated statements of cash flows--Years ended June 30, 2000, 1999 and 1998 Notes to consolidated financial statements--June 30, 2000 Summary of Significant Accounting Policies Quarterly Financial Data (Unaudited) (a)(2) Schedules are not applicable and therefore not included in this report. Financial statements of affiliates accounted for by the equity method have been omitted because they do not, considered individually, constitute significant subsidiaries. (a)(3) LIST OF EXHIBITS (3)(i)Composite Certificate of Incorporation, as amended, filed as Exhibit (3)(i) to Form 10-K for the year ended June 30, 1999 (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, are incorporated herein by reference. (4) Instruments defining the rights of security holders, including: (i)Indenture dated June 1, 1986 between the registrant and The Chase Manhattan Bank, formerly known as Chemical Bank, (as successor to 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 Chemical Bank (as successor to 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 - 6 1/4% Notes due May 15, 2003, 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, and the $300,000,000 - 6 5/8% Debentures due May 1, 2029. 33 Page 34 Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K--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 and its savings and investment plans, pursuant to Instruction (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 on exhibit pursuant to Item 14(c) of Form 10-K, are incorporated herein by reference as follows: (i) 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) 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) Registration Statement No. 333-51381 on Form S-8 dated April 30, 1998 relating to the Archer- Daniels-Midland Company 1996 Stock Option Plan. (iv) The Archer-Daniels-Midland Company Stock Unit Plan for Nonemployee Directors (incorporated by reference to Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1997, (File No. 1-44)). (v) 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)). 34 Page 35 Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K--Continued (vii) 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 No. 1 to Registration Statement No. 333-42612 on Form S-8 dated August 8, 2000. (13) Portions of annual report to shareholders incorporated by reference (21) Subsidiaries of the registrant (23) Consent of independent auditors (24) Powers of attorney (27) Financial Data Schedule (b) Reports on Form 8-K A Form 8-K was not filed during the quarter ended June 30, 2000. 35 Page 36 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 27, 2000 ARCHER-DANIELS-MIDLAND COMPANY By: /s/ D. J. Smith D. J. Smith 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 27, 2000, by the following persons on behalf of the Registrant and in the capacities indicated. <TABLE> <CAPTION> <S> <C> /s/ G. A. Andreas /s/ G. O. Coan G. A. Andreas*, G. O. Coan*, Chief Executive and Director Director (Principal Executive Officer) /s/ F. R. Johnson /s/D. J. Schmalz F. R. Johnson*, D. J. Schmalz Director Vice President and Chief Financial Officer /s/ D. J. Mimran (Principal Financial Officer) D. J. Mimran*, Director /s/S. R. Mills S. R. Mills /s/ M. B. Mulroney Vice President and Controller M. B. Mulroney*, (Controller) Director /s/ D. O. Andreas /s/ R. S. Strauss D. O. Andreas* R. S. Strauss*, Director Director /s/ J. R. Block /s/ J. K. Vanier J. R. Block*, J. K. Vanier*, Director Director /s/ R. R. Burt /s/ O. G. Webb R. R. Burt*, O. G. Webb*, Director Director /s/ Mrs. M. H. Carter /s/ A. Young Mrs. M. H. Carter*, A. Young*, Director Director /s/ D. J. Smith Attorney-in-Fact </TABLE> *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. 36