ADM Reports Second Quarter 2024 Results, Affirms Full-Year EPS Guidance

Reported EPS of $0.98, Adjusted EPS1 of $1.03

ADM (NYSE: ADM) today reported financial results for the quarter ended June 30, 2024.

Second Quarter 2024 Highlights

Net earnings of $486 million, adjusted net earnings1 of $508 million
Earnings before taxes of $596 million, segment operating profit1 of $1,014 million, adjusted segment operating profit1 of $1,021 million
Trailing four-quarter average return on invested capital (ROIC) of 8.9%, trailing four-quarter average adjusted return on invested capital (ROIC)1 of 9.7%

“ADM delivered solid results in the quarter, in spite of challenging market conditions, and we are pleased with the progress we are making against our 2024 priorities and strategic initiatives,” said Chair of the Board and CEO Juan Luciano.

“In Ag Services & Oilseeds, while large South American crops and shifts in farmer selling behaviors impacted results in the second quarter, we expect improved margin opportunities through the remainder of the year. In Carb Solutions, the team delivered solid results driven by favorable Starches & Sweeteners and ethanol margin environments, and we expect continued strong performance. And our actions to recover profitability in the Nutrition segment delivered sequential improvement in the quarter and set us up for continued increases moving forward. With solid performance and continued strong cash flow, we have returned significant cash to shareholders through our repurchase efforts through the first two quarters.

“In the second half of the year, improvements in both crush and ethanol, our efforts in operational excellence, the focus on our key priorities, and our team’s agility give us confidence in our full-year expectations, despite uncertainties in the external environment.”

Second Quarter and First Half 2024 Results

2Q 2024 Results Overview

($ in millions except per share amounts)

Earnings Before Taxes

EPS (as reported)

GAAP

$596

$0.98

vs. 2Q 2023

(47)%

(42)%

Segment Operating Profit1

Adjusted Segment Operating Profit1

Adjusted EPS1

NON-GAAP

$1,014

$1,021

$1.03

vs 2Q 2023

(34)%

(37)%

(46)%

1H 2024 Results Review

($ in millions except per share amounts)

Earnings Before Taxes

EPS (as reported)

GAAP

$1,481

$2.41

vs. 1H 2023

(41)%

(37)%

Segment Operating Profit1

Adjusted Segment Operating Profit1

Adjusted EPS1

NON-GAAP

$2,325

$2,338

$2.49

vs 1H 2023

(28)%

(30)%

(37)%

1 Non-GAAP financial measures; see pages 6, 8, 13, and 14 for explanations and reconciliations.

Summary of Second Quarter and First Half 2024

For the second quarter ended June 30, 2024, earnings before taxes were $596 million and earnings per share on a GAAP basis were $0.98. Segment operating profit was $1,014 million and included charges of $7 million, or approximately $0.01 per share, related to impairments.

Earnings before taxes were $596 million for the second quarter, down (47)% due to lower pricing and execution margins as well as higher corporate unallocated costs. Adjusted segment operating profit was $1,021 million for the second quarter, a 37% decrease versus the prior year period. Adjusted earnings per share were $1.03. Lower pricing and execution margins led to a decline of $1.03 per share versus the prior year period, largely reflecting the impact of lower crush and origination margins. Volume improvement represented a $0.19 per share increase versus the prior year period, primarily reflecting higher volumes in AS&O and Carbohydrate Solutions. Higher costs of $0.07 per share were primarily driven by $0.06 per share of unplanned downtime at Decatur East. Share repurchases contributed $0.10 per share of benefit in the quarter compared to the prior year period. During the quarter, there was approximately a $0.02 per share negative impact from mark-to-market timing in AS&O.

Earnings before taxes were $1,481 million for the first half, down (41)% due to lower pricing and execution margins as well as higher corporate unallocated costs. Adjusted segment operating profit was $2,338 million for the first half of 2024, a 30% decrease versus the prior year period. Adjusted earnings per share were $2.49. Lower pricing and execution margins led to a decline of $2.02 per share versus the prior year period, largely reflecting the impact of lower crush and origination margins, as well as lower mark-to-market timing impacts of $0.40 per share. Improved input and manufacturing costs, primarily related to lower energy costs, led to an increase of $0.08 per share versus the prior year period, partially offset by a $0.10 negative impact from unplanned downtime at Decatur East. Volume improvement represented a $0.37 per share increase versus the prior year period, primarily reflecting higher processed volumes in AS&O. Higher equity earnings led to a $0.06 per share increase in the first half of 2024 versus the prior year period. Corporate and Other accounted for a $0.18 per share decrease, largely attributed to higher IT costs and legal fees. Share repurchases contributed $0.21 per share of benefit compared to the prior year period.

2Q 2024 Segment Overview

($ in millions, except where noted)

2Q 2024

2Q 20232

% Change

Adjusted Segment Operating Profit1

$1,021

$1,628

(37)%

Segment Operating Profit:

Ag Services & Oilseeds

459

1,054

(56)%

Carbohydrate Solutions

357

319

12%

Nutrition

109

169

(36)%

Other

12%

1H 2024 Segment Overview

($ in millions, except where noted)

1H 2024

1H 20232

% Change

Adjusted Segment Operating Profit1

$2,338

$3,353

(30)%

Segment Operating Profit:

Ag Services & Oilseeds

1,323

2,265

(42)%

Carbohydrate Solutions

605

598

Nutrition

193

307

(37)%

Other

217

183

19%

1 Non-GAAP financial measure; see pages 6 and 8 for explanation and reconciliation.

2 2023 Ag Services & Oilseeds, Carbohydrate Solutions, and Nutrition segment operating profits have been revised to reflect immaterial error corrections with no change to total Adjusted Segment Operating Profit. See Note 13, Segment Information of the Company’s consolidated financial statements included in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

Ag Services and Oilseeds Summary

AS&O segment operating profit was $459 million during the second quarter of 2024, down 56% compared to the elevated prior year levels. The Ag Services subsegment operating profit was lower versus the prior year quarter. In South America Origination, slower farmer selling due to a smaller crop in Mato Grosso, and higher logistics costs related to industry take-or-pay contracts led to much lower margins. North American Origination results were lower, as increased supply from Brazil and Argentina shifted export competitiveness to South American origins, and limited carries and trading opportunities in North America. In the Crushing subsegment, global soybean crush margins decreased due to more balanced supply and demand conditions and lower soybean oil values caused by increased imports of used cooking oil. During the quarter, there were negative mark-to-market timing impacts of approximately $15 million versus approximately $195 million of negative impacts from the same period a year ago, totaling approximately $180 million of positive impacts year-over-year. Refined Products & Other (RPO) results were lower, as refining margins eased from historical levels due to increased pre-treatment capacity and higher imports of used cooking oil. Biodiesel margins were lower versus the prior year due to lower LCFS and RIN values. During the quarter, there were negative mark-to-market timing impacts in RPO of approximately $90 million versus approximately $90 million of positive timing impacts in the prior year, totaling approximately $180 million of negative impacts year-over-year. Equity earnings from Wilmar were $68 million during the quarter.

For the first half of 2024, AS&O delivered $1,323 million in segment operating profit, lower versus the elevated prior year. Ample supplies out of South America created more balanced supply and demand conditions, leading to a lower margin environment in the segment. Improved segment volumes and lower costs partially offset the impact from lower margins. Equity earnings from Wilmar were 10% higher versus the comparable period.

2Q 2024 AS&O Overview

($ in millions, except where noted)

2Q 2024

2Q 2023

% Change

Segment Operating Profit

$459

$1,054

(56)%

Ag Services

122

380

(68)%

Crushing

132

224

(41)%

Refined Products and Other

137

362

(62)%

Wilmar

(23)%

1H 2024 AS&O Overview

($ in millions, except where noted)

1H 2024

1H 2023

% Change

Segment Operating Profit

$1,323

$2,265

(42)%

Ag Services

354

728

(51)%

Crushing

445

651

(32)%

Refined Products and Other

307

689

(55)%

Wilmar

217

197

10%

Carbohydrate Solutions Summary

Carbohydrate Solutions segment operating profit was $357 million for the second quarter of 2024, up 12% compared to the prior year period. The Starches & Sweeteners subsegment increased $22 million, as strong starches and sweeteners margins and higher volumes were partially offset by lower margins in the EMEA region, as well as lower domestic ethanol margins. In the Vantage Corn Processing (VCP) subsegment, results improved $16 million compared to the prior year period, as strong demand for exports of ethanol supported higher margins.

For the first half of 2024, Carbohydrate Solutions segment operating profit of $605 million was 1% higher than the prior year, as improved volumes and lower costs were partially offset by lower margins in the EMEA region and lower domestic ethanol margins.

2Q 2024 Carbohydrate Solutions Overview

($ in millions, except where noted)

2Q 2024

2Q 2023

% Change

Segment Operating Profit

$357

$319

12%

Starches and Sweeteners

323

301

Vantage Corn Processors

89%

1H 2024 Carbohydrate Solutions Overview

($ in millions, except where noted)

1H 2024

1H 2023

% Change

Segment Operating Profit

$605

$598

Starches and Sweeteners

584

614

(5)%

Vantage Corn Processors

(16)

231%

Nutrition Summary

Nutrition segment operating profit was $109 million for the second quarter of 2024, down 36% compared to the prior year period. Human Nutrition subsegment operating profit was $103 million, approximately $82 million lower versus the prior year period, as impacts related to unplanned downtime at Decatur East, a normalizing texturants market, and higher manufacturing costs negatively impacted margins. In the Animal Nutrition subsegment, operating profit of $6 million was higher year-over-year as cost optimization efforts and lower input costs supported higher margins.

For the first half of 2024, Nutrition segment operating profit of $193 million was 37% lower than the prior year, primarily driven by negative impacts related to unplanned downtime at Decatur East, a normalizing texturants market, and higher costs in Human Nutrition.

2Q 2024 Nutrition Overview

($ in millions, except where noted)

2Q 2024

2Q 2023

% Change

Segment Operating Profit

$109

$169

(36)%

Human Nutrition

103

185

(44)%

Animal Nutrition

(16)

138%

1H 2024 Nutrition Overview

($ in millions, except where noted)

1H 2024

1H 2023

% Change

Segment Operating Profit

$193

$307

(37)%

Human Nutrition

179

323

(45)%

Animal Nutrition

(16)

188%

Other and Corporate Summary

For the second quarter and first half, Other segment operating profit was $96 million and $217 million, up 12% and 19% respectively, compared to the prior year period, supported by higher Captive Insurance results due to lower claim activity. ADM Investor Services results decreased on lower interest income.

In Corporate for the second quarter, unallocated corporate costs increased on higher global technology investments to support digital transformation efforts, increased legal fees, and increased securitization fees. Other Corporate was favorable compared to the prior year period resulting from foreign currency hedges.

In Corporate for the first half, unallocated corporate costs increased versus the prior year on higher global technology investments to support digital transformation efforts, increased legal fees, and increased securitization fees. Other Corporate was unfavorable compared to the prior year period due to investment valuation losses of approximately $18 million in our ADM Ventures portfolio.

Outlook

The company affirms its previously provided EPS guidance for the full year. ADM continues to expect adjusted earnings per share2 in the range of $5.25 to $6.25 for the full year.

______________________________________

2Forecasted GAAP Earnings Reconciliation: ADM is not presenting forecasted GAAP earnings per diluted share or a quantitative reconciliation to forecasted adjusted earnings per share in reliance on the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K. ADM is unable to predict with reasonable certainty and without unreasonable effort the impact of any impairment and timing of restructuring-related and other charges, along with acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.

Conference Call Information

ADM will host a webcast today, July 30, 2024, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.

About ADM

ADM unlocks the power of nature to enrich the quality of life. We’re an essential global agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. We’re a premier human and animal nutrition provider, offering one of the industry’s broadest portfolios of ingredients and solutions from nature. We’re a trailblazer in health and well-being, with an industry-leading range of products for consumers looking for new ways to live healthier lives. We’re a cutting-edge innovator, guiding the way to a future of new consumer and industrial solutions. And we're a leader in sustainability, scaling across entire value chains to help decarbonize the multiple industries we serve. Around the globe, our innovation and expertise are meeting critical needs while nourishing quality of life and supporting a healthier planet. Learn more at www.adm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical fact included in this release, are forward-looking statements. You can identify forward-looking statements by the fact they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “outlook,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to significant risks, uncertainties and changes in circumstances that could cause actual results and outcomes to differ materially from the forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, without limitation, those that are described in the Company’s most recent Annual Report on Form 10-K and in other documents that the Company files or furnishes with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, ADM does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the date of this announcement, whether as a result of new information, future events, changes in assumptions or otherwise.

Non-GAAP Financial Measures

The Company uses certain “Non-GAAP” financial measures as defined by the Securities and Exchange Commission. These are measures of performance not defined by accounting principles generally accepted in the United States, and should be considered in addition to, not in lieu of, GAAP reported measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.

Adjusted net earnings and Adjusted earnings per share (EPS). Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described in the reconciliation tables below. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described in the reconciliation tables below. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item.

Segment operating profit and adjusted segment operating profit. Segment operating profit is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit is segment operating profit excluding specified items as more fully described in the reconciliation tables below. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered alternatives to earnings before income taxes, the most directly comparable GAAP financial measure, or any other measure of consolidated operating results under U.S. GAAP.

Adjusted Return on Invested Capital (ROIC). Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities and other specified items. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures.

ADM presents guidance of forecasted adjusted EPS for the full year 2024 in this release. ADM is not able to present forecasted GAAP EPS or a quantitative reconciliation to forecasted adjusted EPS in reliance on the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K. ADM is unable to predict with reasonable certainty and without unreasonable effort the impact of any impairment and timing of restructuring-related and other charges, along with acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to ADM’s consolidated statements of earnings.

Financial Tables Follow

Source: Corporate Release Source: ADM

Segment Operating Profit, Adjusted Segment Operating Profit (both non-GAAP financial measures)

and Corporate Results

(unaudited)

Quarter ended

Six months ended

June 30

(In millions)

2024

2023

Change

2024

2023

Change

Earnings before income taxes

596

1,132

(536

)

1,481

2,529

(1,048

)

Corporate Unallocated

418

393

844

715

129

Segment Operating Profit

1,014

1,525

(511

)

2,325

3,244

(919

)

Specified items:

(Gain) loss on sales of assets

—

(11

)

—

(12

)

Impairment, restructuring charges and contingency provisions

114

(107

)

121

(108

)

Adjusted Segment Operating Profit

1,021

1,628

(607

)

2,338

3,353

(1,015

)

Segment Operating Profit:

Ag Services and Oilseeds

459

1,054

(595

)

1,323

2,265

(942

)

Ag Services

122

380

(258

)

354

728

(374

)

Crushing

132

224

(92

)

445

651

(206

)

Refined Products and Other

137

362

(225

)

307

689

(382

)

Wilmar

(20

)

217

197

Carbohydrate Solutions

357

319

605

598

Starches and Sweeteners

323

301

584

614

(30

)

Vantage Corn Processors

(16

)

Nutrition

109

169

(60

)

193

307

(114

)

Human Nutrition

103

185

(82

)

179

323

(144

)

Animal Nutrition

(16

)

(16

)

Other Business

217

183

Corporate Results

(418

)

(393

)

(25

)

(844

)

(715

)

(129

)

Interest expense - net

(128

)

(125

)

(238

)

(228

)

(10

)

Unallocated corporate costs

(292

)

(262

)

(30

)

(596

)

(510

)

(86

)

Other

)

(17

)

Specified items:

Gain (loss) on debt conversion option

—

)

—

)

Expenses related to acquisitions

)

Restructuring charges

—

)

(12

)

Segment operating profit, a non-GAAP financial measure, is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit, a non-GAAP financial measure, is segment operating profit excluding specified items. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered alternatives to earnings before income taxes, the most directly comparable GAAP financial measure, or any other measure of consolidated operating results under U.S. GAAP.

Consolidated Statements of Earnings

(unaudited)

Quarter ended

Six months ended

June 30

2024

2023

2024

2023

(in millions, except per share amounts)

Revenues

22,248

25,190

44,095

49,262

Cost of products sold (1)

20,852

23,307

41,040

45,299

Gross profit

1,396

1,883

3,055

3,963

Selling, general, and administrative expenses (2)

907

841

1,858

1,722

Asset impairment, exit, and restructuring costs

Equity in (earnings) losses of unconsolidated affiliates

(152

)

(151

)

(364

)

(325

)

Interest and investment income

(140

)

(142

)

(263

)

(276

)

Interest expense (3)

187

180

353

327

Other (income) expense - net (4)

)

(37

)

(35

)

(81

)

Earnings before income taxes

596

1,132

1,481

2,529

Income tax expense (benefit) (5)

115

204

281

429

Net earnings including noncontrolling interests

481

928

1,200

2,100

Less: Net earnings (losses) attributable to noncontrolling interests

)

(15

)

Net earnings attributable to ADM

486

927

1,215

2,097

Diluted earnings per common share

0.98

1.70

2.41

3.82

Average diluted shares outstanding

493

546

503

549

(1) Includes a contingency loss provision of $62 million related to import duties in the prior quarter and YTD, respectively.

(2) Includes acquisition-related expenses of $4 million in the current quarter and YTD. Includes acquisition-related expenses of $3 million in the prior quarter and YTD.

(3) Includes (gains) losses related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $(1) million and $(6) million in the prior quarter and YTD, respectively.

(4) Includes net (gains) losses related to the sale of certain assets of $(11) million and $(12) million in the prior quarter and YTD, respectively.

(5) Includes the tax expense impact of specified items and tax discrete items totaling $11 million and $14 million in the current quarter and YTD, respectively. Includes the tax expense (benefit) impact of the above specified items and tax discrete items totaling $1 million and $21 million in the prior quarter and YTD, respectively.

Summary of Financial Condition

(unaudited)

June 30, 2024

June 30, 2023

(in millions)

Net Investment In

Cash and cash equivalents

764

1,426

Operating working capital

9,827

10,898

Property, plant, and equipment

10,628

10,127

Investments in affiliates

5,557

5,665

Goodwill and other intangibles

6,970

6,542

Other non-current assets

2,581

2,479

36,327

37,137

Financed By

Short-term debt

2,312

125

Long-term debt, including current maturities

8,248

8,545

Deferred liabilities

3,306

3,188

Temporary equity

302

304

Shareholders’ equity

22,159

24,975

36,327

37,137

Summary of Cash Flows

(unaudited)

Six months ended

June 30

2024

2023

(in millions)

Operating Activities

Net earnings

1,200

2,100

Depreciation and amortization

566

521

Asset impairment charges

(Gains) losses on sales/revaluation of assets

(32

)

Other - net

(93

)

(145

)

Other changes in operating assets and liabilities

(524

)

(1,591

)

Total Operating Activities

1,168

899

Investing Activities

Purchases of property, plant and equipment

(690

)

(614

)

Net assets of businesses acquired

(936

)

—

Proceeds from sale of business/assets

Investments in affiliates

)

Other investing activities

)

Total Investing Activities

(1,612

)

(611

)

Financing Activities

Long-term debt borrowings

—

500

Long-term debt payments

—

(662

)

Net borrowings (payments) under lines of credit

2,208

(371

)

Share repurchases

(2,327

)

(1,001

)

Cash dividends

(503

)

(494

)

Other

(39

)

(103

)

Total Financing Activities

(661

)

(2,131

)

Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents

(14

)

Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents

(1,119

)

(1,846

)

Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period

5,390

7,033

Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period

4,271

5,187

Segment Operating Analysis

(unaudited)

Quarter ended

Six months ended

June 30

2024

2023

2024

2023

(in ‘000s metric tons)

Processed volumes (by commodity)

Oilseeds

8,872

8,783

18,259

17,410

Corn

4,482

4,448

8,890

8,842

Total processed volumes

13,354

13,231

27,149

26,252

Quarter ended

Six months ended

June 30

2024

2023

2024

2023

(in millions)

Revenues

Ag Services and Oilseeds

17,333

19,844

34,552

38,423

Carbohydrate Solutions

2,894

3,381

5,577

6,918

Nutrition

1,908

1,853

3,744

3,706

Other Business

113

112

222

215

Total revenues

22,248

25,190

44,095

49,262

Adjusted Earnings Per Share A non-GAAP financial measure (unaudited)

Quarter ended June 30

Six months ended June 30

2024

2023

2024

2023

In millions

Per share

In millions

Per share

In millions

Per share

In millions

Per share

Net earnings and fully diluted EPS

486

0.98

927

1.70

1,215

2.41

2,097

3.82

Adjustments:

Loss (gain) on sales of assets and businesses (a)

—

)

(0.02

)

—

)

(0.02

)

Impairment, restructuring charges and contingency provisions (b)

0.01

0.17

0.04

0.18

Expenses related to acquisitions (c)

0.01

—

0.01

—

Loss (gain) on debt conversion option (d)

—

)

—

)

(0.01

)

Tax adjustment (e)

0.03

0.04

0.03

0.01

Sub-total adjustments

0.05

107

0.19

0.08

0.16

Adjusted net earnings and adjusted EPS

508

1.03

1,034

1.89

1,258

2.49

2,185

3.98

(a)

Prior quarter and YTD gain of $11 million and $12 million pretax ($8 million and $9 million after tax), respectively, was related to the sale of certain assets, tax effected using the applicable tax rate.

(b)

Current quarter and YTD charges of $7 million and $25 million pretax ($5 million and $23 million after tax), respectively were related to the impairment of certain assets and restructuring, tax effected using the applicable tax rates. Prior quarter and YTD charges of $117 million and $124 million pretax ($93 million and $98 million after tax), respectively, were related to the impairment of certain assets, restructuring, and a contingency loss provision related to import duties, tax effected using the applicable tax rates.

(c)

Current quarter and YTD expenses of $4 million ($3 million after tax) were related to certain acquisitions, tax effected using the Company’s U.S. income tax rate. Prior quarter and YTD expenses of $3 million ($2 million after tax) were related to certain acquisitions, tax effected using the Company’s U.S. income tax rate.

(d)

Prior quarter and YTD gain on debt conversion option of $1 million and $6 million pretax ($1 million and $6 million after tax), respectively.

(e)

Tax expense (benefit) adjustment due to certain discrete items totaling $14 million and $17 million in the current quarter and YTD, respectively. Tax expense (benefit) adjustment due to certain discrete items totaling $21 million and $3 million in the prior quarter and YTD, respectively.

Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described above. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described above. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item.

Return on Invested Capital and Adjusted Return on Invested Capital

A non-GAAP financial measure

(unaudited)

ROIC Earnings (in millions)

Four Quarters

Quarter Ended

Ended

Sep. 30, 2023

Dec. 31, 2023

Mar. 31, 2024

June 30, 2024

Net earnings attributable to ADM

821

565

729

486

2,601

Adjustments:

Interest expense

109

115

135

456

Tax on interest

(23

)

(26

)

(27

)

(32

)

(108

)

Total ROIC Earnings

895

648

817

589

2,949

Total ROIC Earnings

895

648

817

589

2,949

Other Adjustments

155

257

Total Adjusted ROIC Earnings

954

803

838

611

3,206

Invested Capital (in millions)

Quarter Ended

Trailing Four

Sep. 30, 2023

Dec. 31, 2023

Mar. 31, 2024

June 30, 2024

Quarter Average

Equity (1)

25,228

24,132

23,219

22,148

23,682

+ Interest-bearing liabilities (2)

8,346

8,370

9,995

10,576

9,322

Total Invested Capital

33,574

32,502

33,214

32,724

33,004

Total Invested Capital

33,574

32,502

33,214

32,724

33,004

Other Adjustments

155

Total Adjusted Invested Capital

33,633

32,657

33,235

32,746

33,068

Return on Invested Capital

8.9

Adjusted Return on Invested Capital

9.7

(1) Excludes noncontrolling interests

(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt

ROIC is ROIC earnings divided by invested capital. ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings. Invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities.

Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings, and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities adjusted for the after-tax effect of specified items. Adjusted ROIC on a trailing four quarter average basis is equal to the average trailing four quarters of adjusted ROIC earnings divided by the average trailing four quarters of adjusted invested capital. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures.

Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA) A non-GAAP financial measure (unaudited)

The tables below provide a reconciliation of net earnings to adjusted EBITDA for the trailing four quarters ended June 30, 2024.

Four Quarters

Quarter Ended

Ended

Sep. 30, 2023

Dec. 31, 2023

Mar. 31, 2024

June 30, 2024

(in millions)

Net earnings

821

565

729

486

2,601

Net earnings (losses) attributable to noncontrolling interests

(23

)

(10

)

(35

)

Income tax expense

207

192

166

115

680

Interest expense

109

115

135

456

Depreciation and amortization

261

277

280

286

1,104

EBITDA

1,389

1,120

1,280

1,017

4,806

(Gain) loss on sales of assets and businesses

)

—

)

Impairment and restructuring charges and contingency provisions.

172

268

Railroad maintenance expense

—

Expenses related to acquisitions

—

Adjusted EBITDA

1,491

1,325

1,298

1,032

5,146

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of income tax expense, interest expense on borrowings, and depreciation and amortization to net earnings. Management believes that EBITDA and adjusted EBITDA are useful measures of the Company’s performance because they provide investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. EBITDA and adjusted EBITDA are non-GAAP financial measure and are not intended to replace or be an alternative to net earnings, the most directly comparable GAAP financial measure.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730432957/en/

Media Contact Brett Lutz media@adm.com 312-634-8484

Investor Relations Megan Britt Megan.Britt@adm.com 872-257-8378

Archer Daniels Midland (NYSE:ADM)
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