Archer Daniels Midland 2009 Annual Report Download - page 2

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ARCHER DANIEL S MIDL AND COMPANY 2009 FORM 10 - K AND LETTER FROM THE CHAIRMAN
02
From 2006 to 2008 ADM delivered some of the best performance in our 107-year
history. In a world of growing economies, rising expectations for high-quality food, increasing
energy demands, crop dislocations, and market volatility, our people and assets delivered
record results.
But as we demonstrated in 2009, our industry acumen and exceptional network of
assets make it possible for ADM to perform well even in less favorable environments.
As commentators and economists consider the global economic crisis of 2008-2009,
they may long debate what the critical touch was that sent the dominoes tumbling. But
there is no debate about all that came undone. What began in the subprime mortgage
market helped trigger dissolution of financial institutions and automakers, a deep freeze
in global credit markets, disarray in the stock market, decline in the housing and retail
sectors, and the disappointment of seeing 401Ks, college funds, retirement dreams, and
the livelihoods of millions diminished if not destroyed.
Because of the depth and magnitude of this economic downturn, consumers made
changes to their dietary habits and their fuel consumption. Even in a business such as ours
that is often buffered from economic fluctuations, the economic downturn came to bear
on the customers and markets we serve, decreasing demand and defining a significantly
different operating landscape than we’ve seen in many years.
As global economies rebound, we look forward to improved operating conditions. We
see signs of demand returning in our key markets and geographies as well as indications
of plentiful supply from the North American and European harvests.
Solid operational performance
In fiscal 2009, ADM continued making meaningful progress toward our safety goal of
Zero Incidents, Zero Injuries. We reduced lost workday frequency by 10 percent and our
recordable incident rate by 20 percent versus 2008.
Our financial results were something of a “tale of two halves.” We delivered strong
first-half results, led by robust earnings in oilseeds and record results in our agricultural
services segment. In the second half, we felt the full impact of the recession. Ethanol
margins continued to decline, and unusual items related to equity investees also impacted
our performance.