25 Page 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period ________________________ 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 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 ___. Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value - 607,167,224 shares (January 31, 2000) 1 Page 2 PART I - FINANCIAL INFORMATION ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) <TABLE> <CAPTION> THREE MONTHS ENDED DECEMBER 31, 1999 1998 ---------------------- --- (In thousands, except per share amounts) <S> <C> <C> Net sales and other operating income $3,420,34 6 $3,911,5 39 Cost of products sold and other operating 3,014,073 costs 3,490,20 9 _________ ________ _ Gross Profit 406,273 421,330 Selling, general and administrative 199,476 expenses 182,246 _________ ________ _ Earnings From Operations 206,797 239,084 Other expense (53,534) (69,191) _________ ________ _ Earnings Before Income Taxes and Extraordinary Loss 153,263 169,893 Income taxes 51,343 59,459 _________ ________ _ Earnings Before Extraordinary 101,920 Loss 110,434 Extraordinary loss, net of tax, on debt - repurchase (15,324) _________ ________ _ Net Earnings $ 101,9 $ 95,11 20 0 ========= ========= Average number of shares outstanding 608,772 623,259 Basic and diluted earnings per common share Before extraordinary loss $.17 $.1 7 Extraordinary loss on debt - (.0 repurchase 2) ____ ____ After Extraordinary Loss $.17 $.1 5 ==== ==== Dividends per common share $.05 $.04 8 </TABLE> See notes to consolidated financial statements. 2 Page 3 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) <TABLE> <CAPTION> SIX MONTHS ENDED DECEMBER 31, 1999 1998 ---------------------- --- (In thousands, except per share amounts) <S> <C> <C> Net sales and other operating income $6,641,32 6 $7,712,9 60 Cost of products sold and other operating 5,962,733 costs 6,997,99 4 _________ ________ _ Gross Profit 678,593 714,966 Selling, general and administrative 370,211 expenses 349,062 _________ ________ _ Earnings From Operations 308,382 365,904 Other expense (100,433) (17,607) _________ ________ _ Earnings Before Income Taxes and Extraordinary Loss 207,949 348,297 Income taxes 69,662 121,008 _________ ________ _ Earnings Before Extraordinary 138,287 Loss 227,289 Extraordinary loss, net of tax, on debt - repurchase (15,324) _________ ________ _ Net Earnings $ 138,2 $ 211,96 87 5 ========= ========= Average number of shares outstanding 609,990 625,141 Basic and diluted earnings per common share Before extraordinary loss $.23 $.3 6 Extraordinary loss on debt - (.0 repurchase 2) ____ ____ After Extraordinary Loss $.23 $.3 4 ==== ==== Dividends per common share $.098 $.09 4 </TABLE> See notes to consolidated financial statements. 3 PAGE 4 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) <TABLE> <CAPTION> DECEMBER 31, JUNE 30, 1999 1999 ------------------------ ----- (In thousands) <S> <C> <C> ASSETS Current Assets Cash and cash equivalents $ 571,561 $ 681,378 Marketable securities 420,764 222,191 Receivables 2,236,800 1,922,163 Inventories 3,066,596 2,732,694 Prepaid expenses 204,041 231,162 ___________ ___________ Total Current Assets 6,499,762 5,789,588 Investments and Other Assets Investments in and advances to 1,733,347 1,484,980 affiliates Long-term marketable securities 685,814 779,916 Other assets 475,972 408,236 ___________ ___________ 2,895,133 2,673,132 Property, Plant and Equipment Land 167,816 163,607 Buildings 2,083,288 1,949,211 Machinery and equipment 8,640,358 8,384,865 Construction in progress 520,516 675,870 Less allowances for depreciation (5,895,607) (5,606,392) ___________ ___________ 5,516,371 5,567,161 ___________ ___________ $14,911,266 $14,029,881 =========== =========== </TABLE> See notes to consolidated financial statements. 4 PAGE 5 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) <TABLE> <CAPTION> DECEMBER 31, JUNE 30, 1999 1999 ------------------------ ---- (In thousands) <S> <C> <C> LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term debt $1,621,002 $1,241,369 Accounts payable 2,450,301 2,004,396 Accrued expenses 632,223 567,593 Current maturities of long-term debt 30,464 26,907 __________ __________ Total Current Liabilities 4,733,990 3,840,265 Long-term Debt 3,273,176 3,191,883 Deferred Credits Income taxes 586,425 619,752 Other 138,584 137,341 __________ __________ 725,009 757,093 Shareholders' Equity Common stock 5,018,320 5,081,320 Reinvested earnings 1,497,648 1,419,321 Accumulated other comprehensive income (336,877) (260,001) (loss) __________ __________ 6,179,091 6,240,640 __________ __________ $14,911,266 $14,029,881 ========== ========== </TABLE> See notes to consolidated financial statements. 5 PAGE 6 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) <TABLE> <CAPTION> SIX MONTHS ENDED DECEMBER 31, 1999 1998 ------------------------- ----- (In thousands) <S> <C> <C> Operating Activities Net earnings $ 138,287 $ 211,965 Adjustments to reconcile to net cash provided by operations Depreciation and amortization 302,677 285,517 Deferred income taxes 9,416 25,757 Amortization of long-term debt discount 20,980 17,535 (Gain) loss on marketable securities transactions (12,677) (101,674) Extraordinary loss on debt repurchase - 15,324 Other 64,977 99,455 Changes in operating assets and liabilities Receivables (325,538) 134,012 Inventories (338,151) (448,298) Prepaid expenses 27,192 (8,065) Accounts payable and accrued expenses 502,527 294,532 ________ ________ Total Operating Activities 389,690 526,060 Investing Activities Purchases of property, plant and equipment (255,055) (359,797) Net assets of businesses acquired (6,670) (60,316) Investments in and advances to affiliates, (241,983) (91,378) net Purchases of marketable securities (595,620) (377,995) Proceeds from sales of marketable 396,943 774,179 securities Increase in other assets (50,000) - ________ ________ Total Investing Activities (752,385) (115,307) Financing Activities Long-term debt borrowings 103,548 83,020 Long-term debt payments (43,874) (65,509) Net borrowings (payments) under line of credit 378,050 (103,848) agreements Purchases of treasury stock (124,911) (137,445) Cash dividends and other (59,935) (56,939) ________ ________ Total Financing Activities 252,878 (280,721) ________ ________ Increase (Decrease) in Cash and Cash (109,817) 130,032 Equivalents Cash and Cash Equivalents Beginning of 681,378 346,325 Period ________ ________ Cash and Cash Equivalents End of Period $ 571,561 $ 476,357 ======== ======== </TABLE> See notes to consolidated financial statements. 6 PAGE 7 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1.Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter and six months ended December 31, 1999 are not necessarily indicative of the results that may be expected for the year ending June 30, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended June 30, 1999. Note 2.New Accounting Standards In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Number 133 (SFAS 133) "Accounting for Derivative Instruments and Hedging Activities." This statement, which is required to be adopted for annual periods beginning after June 15, 2000, establishes standards for recognition and measurement of derivatives and hedging activities. The Company has not yet determined the financial statement impact of SFAS 133. Note 3. Per Share Data All references to share and per share information have been adjusted for the 5 percent stock dividend paid September 20, 1999. Note 4.Comprehensive Income (Loss) Comprehensive income (loss) was $(5) million and $171 million for the quarter ended December 31, 1999 and 1998, respectively. Comprehensive income was $61 million and $188 million for the six months ended December 31, 1999 and 1998, respectively. 7 PAGE 8 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) <TABLE> <CAPTION> Note 5. Other Expense Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 (In thousands) (In thousands) <S> <C> <C> <C> <C> Investment income $ 31,237 $ 27,274 $ 62,084 $ 56,411 Interest expense (99,519) (84,512) (184,958) (164,539) Net gain on marketable 6,685 1,972 12,677 101,685 securities transactions Equity in earnings (losses) of 5,634 (15,032) 5,474 (11,190) affiliates Other 2,429 1,107 4,290 26 _______ _______ _______ _______ $(53,534 $(69,191 $(100,43 $ ) ) 3) (17,607) ======= ======= ======= ======= </TABLE> Note 6.Antitrust Investigation and Related Litigation Federal grand juries in the Northern Districts of Illinois, California and Georgia, under the direction of the United States Department of Justice ("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 brings 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, along with other domestic and foreign companies, was named as a defendant in a number of putative class action antitrust suits and other proceedings involving the sale of lysine, citric acid, sodium gluconate, monosodium glutamate and high fructose corn syrup. These actions and proceedings generally involve claims for unspecified compensatory damages, fines, costs, expenses and unspecified relief. The Company intends to vigorously defend these actions and proceedings unless they can be settled on terms deemed acceptable by the parties. These matters have resulted and could result in the Company being subject to monetary damages, other sanctions and expenses. The Company has made provisions of $21 million in fiscal 1999, $48 million in fiscal 1998 and $200 million in fiscal 1997 to cover the fines, litigation settlements related to the federal lysine class action, federal securities class action, the federal citric class action, the federal sodium gluconate class action, and certain state actions filed by indirect purchasers of lysine, certain actions filed by parties that opted out of the class action 8 PAGE 9 settlements, certain other proceedings and the related costs and expenses associated with the litigation described above. Because of the early stage of other putative class actions and proceedings, including those related to high fructose corn syrup, the ultimate outcome and materiality of these matters cannot presently be determined. Accordingly, no provision for any liability that may result therefrom has been made in the unaudited consolidated financial statements. 9 PAGE 10 ARCHER DANIELS MIDLAND COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION OPERATIONS The Company is in one business segment - procuring, transporting, storing, processing and merchandising agricultural commodities and products. A summary of net sales and other operating income by classes of products and services is as follows: <TABLE> <CAPTION> Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 (in millions) (in millions) <S> <C> <C> <C> <C> Oilseed products $1,873 $2,314 $3,700 $4,639 Corn products 520 475 980 988 Wheat and other milled 359 353 720 714 products Other products and 668 770 services 1,241 1,372 _____ _____ _____ _____ $3,420 $3,912 $6,641 $7,713 ===== ===== ===== ===== </TABLE> Net sales and other operating income decreased 13 percent to $3.4 billion for the quarter and decreased 14 percent to $6.6 billion for the six months due principally to decreases in average selling prices of 12 percent and 15 percent, respectively. Sales of oilseed products decreased 19 percent to $1.9 billion for the quarter and decreased 20 percent to $3.7 billion for the six months due primarily to lower average selling prices reflecting the lower cost of raw materials. In addition, sales volumes of oilseed products decreased for both the quarter and six months due to weak demand from Asia for both protein meals and vegetable oils. Sales of corn products increased 9 percent for the quarter due principally to an increase in sales volume of the Company's fuel alcohol as there was good demand from existing sales markets and expansion into new markets. Corn products sales for the quarter also increased due to higher average selling prices of the Company's amino acid products. Sales of corn products decreased 1 percent for the six months due principally to decreases in sales volumes of the Company's sweetener, amino acid and citric acid products as excess industry production capacities resulted in difficult market conditions. These decreases were partially offset by increased sales volumes of the Company's alcohol products and higher average selling prices of the Company's sweetener products. Sales of wheat and other milled products increased 2 percent to $359 million for the quarter and increased 1 percent to $720 million for the six months as sales attributable to recently acquired operations more than offset slight decreases in average selling prices. The decreases in sales of other products and services for both the quarter and six months were due principally to decreased sales volumes of the Company's cocoa and formula feed products and to lower average selling prices of cocoa products. These decreases were partially offset by increased grain merchandising revenues. 10 PAGE 11 Cost of products sold and other operating costs decreased $476 million to $3 billion for the quarter and decreased $1 billion to $6 billion for the six months due primarily to lower average raw material costs arising from an abundant world-wide supply of agricultural commodities and, to a lesser extent, lower sales volumes. Gross profit decreased $15 million to $406 million for the quarter and decreased $36 million to $679 million for the six months due principally to selling price declines exceeding declines in lower average raw material costs and, to a lesser extent, lower volumes of products sold. These decreases were partially offset by gross profit attributable to increased grain merchandising margins. Selling, general and administrative expenses increased $17 million for the quarter to $199 million and increased $21 million for the six months to $370 million due primarily to increased salary-related costs associated with facility closures and consolidations, increased bad debt expense and expenses attributable to recently acquired operations. These increases were partially offset by decreased advertising expenses. Other expense decreased $16 million for the quarter to $54 million due principally to increased equity in earnings of unconsolidated affiliates resulting primarily from higher valuations of the Company's private equity funds. This increase was partially offset by increased interest expense due to higher average borrowing levels. Other expense increased $83 million for the six months to $100 million due principally to decreased gains on marketable securities transactions. The decrease in income taxes for the quarter and six months resulted primarily from lower pretax earnings. The Company's effective income tax rate for the quarter was 33.5% compared to an effective rate of approximately 35% for the comparable periods of a year ago. During the second quarter of fiscal 1999, the Company incurred an extraordinary charge, net of tax, of $15 million resulting from the repurchase of a portion of its outstanding 7% debentures due may 2011. Liquidity and Capital Resources At December 31, 1999, the Company continued to show substantial liquidity with working capital of $1.8 billion. Capital resources remained strong as reflected in the Company's net worth of $6.2 billion. The Company's ratio of long-term debt to total capital at December 31, 1999 was approximately 32%. As described in Note 6 to the unaudited consolidated financial statements, various grand juries under the direction of the United States Department of Justice ("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. 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 brings to a close all DOJ investigations of the Company. In addition, related civil class actions and other proceedings have been filed against the Company which could result in the Company being subject to monetary damages, other sanctions and expenses. As also described in Note 6 to the unaudited consolidated financial statements, the Company has settled certain civil federal class action suits involving lysine, citric acid, 11 PAGE 12 sodium gluconate, and securities, and certain state actions filed by indirect purchasers of lysine. The Company has made provisions of $21 million in fiscal 1999, $48 million in fiscal 1998 and $200 million in fiscal 1997 to cover the fines, litigation settlements related to the federal lysine class action, federal securities class action, the federal citric class action, and certain state actions filed by indirect purchasers of lysine, certain actions filed by parties that opted out of the class action settlements, certain other proceedings and the related costs and expenses associated with the litigation described above. Because of the early stage of other putative class actions and proceedings, including those related to high fructose corn syrup, the ultimate outcome and materiality of these matters cannot presently be determined. Accordingly, no provision for any liability that may result therefrom has been made in the unaudited consolidated financial statements. Year 2000 Issues The Company satisfactorily completed its year 2000 readiness work. Since entering the year 2000, the Company has not experienced any major disruptions to its business nor is it aware of any significant year 2000-related disruptions impacting its customers or suppliers. The Company will continue to monitor its critical systems over the next several months but does not anticipate any significant impacts due to year 2000 exposures from its internal systems or from the activities of its suppliers and customers. Costs incurred to achieve year 2000 readiness were not material. Item 3. Quantitative and Qualitative Disclosures About Market Risk There were no material changes during the quarter ended December 31, 1999. PART II - OTHER INFORMATION Item 1. 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 an 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 Violations 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, the Company voluntarily reported to the Illinois EPA certain other permit exceedances and in 1999 Illinois EPA issued a Notice of Violation relating to those exceedances from another process at that same facility. 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. Also in 1998, the State 12 PAGE 13 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. The Company is involved in approximately 30 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 and the Mexican Federal Competition Commission as described below, all such matters have been resolved as previously reported. 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 13 PAGE 14 European Communities adopted a supplementary Statement of Objections expanding the period of involvement as to certain other companies. 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. 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 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. 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. Thirty of these actions have been brought as putative class actions. 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. The parties are currently appealing certain discovery rulings to the United States Court of Appeals for the Seventh Circuit. 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 14 PAGE 15 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 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 parties are in the midst of discovery in the coordinated 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. The remaining parties are in the midst of discovery in this action. 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. 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 15 PAGE 16 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 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 purchases 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. 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. Except for the action specifically described below, all such suits have been settled or dismissed. CITRIC CANADIAN ACTIONS. The Company, along with other companies, has been named as a defendant in two 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 16 PAGE 17 million, interest, costs and fees. The other 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, 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 in 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 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 17 PAGE 18 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 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 18 PAGE 19 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, 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 eight putative class action antitrust suits involving the sale of monosodium glutamate and/or other food flavor enhancers. FEDERAL ACTIONS. Six 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 is encaptioned M. Phil Yen, Inc. v. Ajinomoto Co. Inc., et al., No. 99 Div 06514 (EK). Various motions have been filed with the Judicial Panel on Multidistrict Litigation requesting that these actions be consolidated and coordinated for pretrial discovery, and argument on these motions was held on January 29, 2000. 19 PAGE 20 STATE ACTION. The Company, along with at least one other company, also has been named as a defendant in two 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 class in this action comprises 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. 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 unaudited consolidated financial statements. Item 4. Submission of matters to a vote of Security Holders: The Annual Meeting of Shareholders was held on October 21, 1999. Proxies for the Annual Meeting were solicited pursuant to Regulation 14. There was no solicitation in opposition to the Board of Director nominees as listed in the proxy statement and all of such nominees were elected as follows: Nominee Shares Cast Shares For Withheld D. O. Andreas 506,391,046 14,457,198 G. O. Coan 509,452,163 11,396,081 G. A. Andreas 507,354,809 13,493,435 J. K. Vanier 508,947,907 11,900,337 A. Young 509,089,375 11,758,869 R. Burt 509,461,058 11,387,186 O. G. Webb 509,497,556 11,350,688 F. Ross Johnson 508,406,457 12,441,787 R. S. Strauss 508,621,359 12,226,885 M. B. Mulroney 507,877,002 12,971,242 J. R. Block 509,321,281 11,526,963 M. H. Carter 509,553,356 11,294,888 D. J. Mimran 509,398,384 11,449,860 20 PAGE 21 There were no abstentions or broker non-votes regarding the election of directors. The appointment by the Board of Directors of Ernst & Young LLP as Independent Accountants to audit the accounts of the Company for the fiscal year ending June 30, 2000 was ratified as follows: For 514,035,168 Against 4,670,138 Abstain 2,142,938 The Incentive Compensation Plan was approved as follows: For 473,801,869 Against 41,414,588 Abstain 5,631,787 The Stockholder's Proposal relative to cumulative voting was defeated as follows: For 153,732,154 Against 279,422,076 Abstain 14,499,457 21 PAGE 22 The Stockholder's Proposal relative to a post-meeting report was defeated as follows: For 22,992,506 Against 415,794,287 Abstain 8,866,894 The Stockholder's Proposal relative to confidential voting was defeated as follows: For 205,054,406 Against 233,445,036 Abstain 9,154,245 Item 6. Exhibits and Reports on Form 8-K a)Exhibits (3)(i) Articles of Incorporation Composite Certificate of Incorporation, as amended, filed on September 22, 1999 as Exhibit (3)(i) to Form 10K for the year ended June 30, 1999, is incorporated herein by reference. (3)(ii)Bylaws, as amended and restated, filed on May 14, 1999 as Exhibit (3)(ii) to Form 10Q for the quarter ended March 31, 1999, are incorporated herein by reference. (27) Financial Data Schedules b)A Form 8-K was not filed during the quarter ended December 31, 1999. SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ARCHER-DANIELS-MIDLAND COMPANY /s/ D. J. Schmalz D. J. Schmalz Vice President and Chief Financial Officer /s/ D. J. Smith D. J. Smith Vice President, Secretary and General Counsel Dated: February 11, 2000 22