Files Restated Fiscal Year 2023 Form 10-K and
Subsequent Forms 10-Q
As Expected, Restatement Had No Impact on
Consolidated Financial Results for 2023 and First and Second
Quarters of 2024
Company to Host Conference Call on December 3,
2024
ADM (NYSE: ADM) today reported financial results for the quarter
ended September 30, 2024 that are consistent with its previously
announced preliminary results, and also filed its third quarter
form 10-Q. The Company also filed its restated financial statements
in its fiscal year 2023 Form 10-K and its forms 10-Q for the first
and second quarters of 2024. The restatement did not impact the
Company’s consolidated financial results for any of the periods
covered by those reports, as noted below.
Third Quarter 2024 Highlights
- Net earnings of $18 million, adjusted net earnings2 of $530
million
- See below for impact of non-cash charge against GAAP earnings
for the third quarter of $461 million related to our Wilmar equity
investment
- Earnings per share2 of $0.04, with adjusted earnings per
share1,2 of $1.09, both down versus the prior year period
- Trailing four-quarter average return on invested capital (ROIC)
of 6.6%, trailing four-quarter average adjusted return on invested
capital (ROIC)1 of 8.8%
Year-to-date cash flows from operating activities were $2,468
million, with cash flows from operations before working capital1,3
of $2,341 million, as compared to cash flows from operating
activities of $1,891 million and cash flows from operations before
working capital1,3 of $3,804 million for the corresponding
prior-year year-to-date period.
“Accuracy and transparency are important to the Company and we
are pleased to have now completed the restatement and be current
with our financial filing. We continue to focus on implementing
enhancements to internal controls to ensure integrity and accuracy
of reporting,” said Chair of the Board and CEO Juan Luciano.
“Looking ahead, while we foresee softer market conditions into
next year, we are taking actions to improve performance and drive
value creation. We are redoubling our focus on productivity and
operational excellence, while maintaining our disciplined approach
to capital allocation.”
1 Non-GAAP financial measures; see pages
7-9 and 14-16 for explanations and reconciliations.
2 All references in this document to
earnings per share (EPS) and adjusted earnings per share reflect
EPS on a diluted basis.
3 Cash from operations before working
capital is cash from operating activities of $2,468 million less
the changes in working capital of $127 million in YTD 2024. Cash
from operations before working capital is cash from operating
activities of $1,891 million excluding the changes in working
capital of ($1,913) million in YTD 2023
Third Quarter and Year-to-Date 2024 Results
3Q 2024 Results Overview
($ in millions except per share
amounts)
Earnings Before Income
Taxes
EPS1 (as reported)
GAAP
$108
$0.04
vs. 3Q 2023
(90)%
(97)%
Total Segment Operating
Profit2
Adjusted EPS1,2
NON-GAAP
$1,037
$1.09
vs 3Q 2023
(28)%
(33)%
YTD 2024 Results Review
($ in millions except per share
amounts)
Earnings Before Taxes
EPS1 (as reported)
GAAP
$1,588
$2.48
vs. YTD 2023
(55)%
(54)%
Total Segment Operating
Profit2
Adjusted EPS2
NON-GAAP
$3,158
$3.61
vs YTD 2023
(32)%
(36)%
1 All references in this document to
earnings per share (EPS) and adjusted earnings per share reflect
EPS on a diluted basis.
2 Non-GAAP financial measures; see pages
7-9 and 14-16 for explanations and reconciliations.
Summary of Third Quarter and
Year-to-Date 2024
For the third quarter ended September 30, 2024, earnings before
income taxes were $108 million, down (90)% versus the prior year
quarter. During the third quarter of 2024, the Company recorded a
non-cash impairment charge against GAAP earnings of $461 million
related to its equity investment in Wilmar. Earnings per share on a
GAAP basis were $0.04, and adjusted earnings per share were $1.09,
both down versus the prior year quarter. Total segment operating
profit was $1,037 million, down (28)% versus the prior year
quarter, and excluded specified items of $504 million, or
approximately $1.03 per share, related to impairments.
Earnings before income taxes were $1,588 million year-to-date in
2024, down (55)% versus the prior year period. Total segment
operating profit was $3,158 million year-to-date in 2024, down
(32)%. Earnings per share on a GAAP basis were $2.48 and adjusted
earnings per share were $3.61, down versus the prior year.
3Q 2024 Segment Overview
($ in millions, except where noted)
3Q 2024
3Q 20232
% Change
Total Segment Operating Profit1
$1,037
$1,446
(28)%
Segment Operating Profit:
Ag Services & Oilseeds
480
848
(43)%
Carbohydrate Solutions
452
468
(3)%
Nutrition
105
130
(19)%
YTD 2024 Segment Overview
($ in millions, except where noted)
YTD 2024
YTD 20232
% Change
Total Segment Operating Profit1
$3,158
$4,616
(32)%
Segment Operating Profit:
Ag Services & Oilseeds
1,803
3,113
(42)%
Carbohydrate Solutions
1,057
1,066
(1)%
Nutrition
298
437
(32)%
1 Non-GAAP financial measure; see pages
7-9 and 14-16 for explanation and reconciliation.
2 2023 Ag Services & Oilseeds,
Carbohydrate Solutions, and Nutrition segment operating profits
have been restated to reflect corrections with no change to total
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 September 30,
2024.
Ag Services and Oilseeds Segment
Summary
AS&O segment operating profit was $480 million during the
third quarter of 2024, down (43)% compared to the prior year
quarter.
The Ag Services subsegment operating profit was (53)% lower
versus the prior year quarter, primarily due to lower results in
South America Origination, as slower farmer selling and higher
logistics costs related to industry take-or-pay contracts led to
lower margins. The prior year quarter also included $48M of
insurance proceeds related to Hurricane Ida.
The Crushing subsegment operating profit was (25)% lower versus
the prior year quarter. Global soybean crush margins were higher,
supported by strong margins in EMEA. However, higher canola seed
prices due to less supply in Europe drove lower canola crush
margins, leading to lower results. During the quarter, there were
approximately zero mark-to-market timing impacts versus
approximately $100 million of positive impacts from the same period
a year ago, totaling approximately $100 million of negative net
impacts versus the prior year. The current quarter also included
$24 million of insurance proceeds for the partial settlement of the
Decatur East and West insurance claims related to incidents in
2023.
The Refined Products & Other (RPO) subsegment operating
profit was (63)% lower versus the prior year quarter, primarily
driven by lower results in North America, as higher imports of used
cooking oil and increased pre-treatment capacity drove
significantly lower refining and global biodiesel margins. During
the quarter, there were negative mark-to-market timing impacts in
RPO of approximately $20 million versus approximately $100 million
of positive timing impacts in the prior year, totaling
approximately $120 million of negative net impacts year over
year.
Equity earnings from the Company’s investment in Wilmar were $62
million during the quarter compared to the prior year quarter of
$35 million.
Year-to-date in 2024, the AS&O segment delivered $1,803
million in segment operating profit, lower versus the elevated
prior year. Ample supplies out of South America created more
balanced supply and demand conditions, leading to a lower margin
environment in the segment. Improved segment volumes and lower
costs partially offset the impact from lower margins. Equity
earnings from the Company’s Wilmar investment were 20% higher
versus the comparable prior year period.
3Q 2024 AS&O Overview
($ in millions, except where noted)
3Q 2024
3Q 2023
% Change
Segment Operating Profit
$480
$848
(43)%
Ag Services
107
226
(53)%
Crushing
187
250
(25)%
Refined Products and Other
124
337
(63)%
Wilmar
62
35
77%
YTD 2024 AS&O Overview
($ in millions, except where noted)
YTD 2024
YTD 2023
% Change
Segment Operating Profit
$1,803
$3,113
(42)%
Ag Services
461
954
(52)%
Crushing
632
901
(30)%
Refined Products and Other
431
1,026
(58)%
Wilmar
279
232
20%
Carbohydrate Solutions Segment
Summary
Carbohydrate Solutions segment operating profit was $452 million
for the third quarter of 2024, down (3)% compared to the prior year
period.
The Starches & Sweeteners subsegment increased 13%, versus
the prior year period, primarily driven by strong starches and
sweeteners volumes and margins, supported by high utilization rates
across the network. The current quarter also included $47 million
of insurance proceeds for the partial settlement of the Decatur
West insurance claims related to an incident that occurred in
2023.
In the Vantage Corn Processing (VCP) subsegment, operating loss
of $(3) million was lower compared to the prior year period, driven
by higher inventories and production, leading to a lower margin
environment.
Year-to-date in 2024, Carbohydrate Solutions segment operating
profit of $1,057 million was (1)% lower than the prior year, as
lower margins in the EMEA region and lower domestic ethanol margins
were partially offset by improved volumes and lower costs.
3Q 2024 Carbohydrate Solutions
Overview
($ in millions, except where noted)
3Q 2024
3Q 2023
% Change
Segment Operating Profit
$452
$468
(3)%
Starches and Sweeteners
455
403
13%
Vantage Corn Processors
(3)
65
(105)%
YTD 2024 Carbohydrate Solutions
Overview
($ in millions, except where noted)
YTD 2024
YTD 2023
% Change
Segment Operating Profit
$1,057
$1,066
(1)%
Starches and Sweeteners
1,039
1,017
2%
Vantage Corn Processors
18
49
(63)%
Nutrition Segment
Summary
Nutrition segment operating profit was $105 million for the
third quarter of 2024, down (19)% compared to the prior year
period.
Human Nutrition subsegment operating profit was $86 million,
approximately (27)% lower versus the prior year period. These
results include solid performance by recent Flavors M&A,
lapping of non-recurring benefits in the prior year period, changes
in inventory adjustments and certain other costs, including costs
associated with the closure of a joint venture. The current quarter
also included $25 million of insurance proceeds for the partial
settlement of the Decatur East insurance claims related to an
incident that occurred in 2023.
In the Animal Nutrition subsegment, operating profit of $19
million was 58% higher compared to prior year quarter, as cost
optimization efforts and lower input costs supported higher
margins.
Year-to-date in 2024, Nutrition segment operating profit of $298
million was (32)% lower than the prior year period, primarily
driven by negative impacts related to unplanned downtime at Decatur
East, lower texturants margins, and higher costs in Human
Nutrition.
3Q 2024 Nutrition Overview
($ in millions, except where noted)
3Q 2024
3Q 2023
% Change
Segment Operating Profit
$105
$130
(19)%
Human Nutrition
86
118
(27)%
Animal Nutrition
19
12
58%
YTD 2024 Nutrition Overview
($ in millions, except where noted)
YTD 2024
YTD 2023
% Change
Segment Operating Profit
$298
$437
(32)%
Human Nutrition
265
441
(40)%
Animal Nutrition
33
(4)
NM
Other and Corporate
Summary
For the third quarter, Other business operating loss was $17
million, down $63 million versus the prior year period, due to
lower Captive insurance results from $112 million in claim
settlements. Included in claim settlements were partial settlements
of $96 million for the Decatur East and West insurance claims. ADM
Investor Services results decreased on lower interest income.
Year-to-date in 2024, Other business operating gain was $200
million, down $29 million versus the prior year period, due to
lower Captive insurance results from $112 million in claim
settlements. Included in claim settlements were partial settlements
of $96 million for the Decatur East and West insurance claims. ADM
Investor Services results decreased on lower interest income.
In Corporate for the third quarter, unallocated corporate costs
increased versus the prior year on $28 million in higher legal fees
and $14 million in higher financing costs, partially offset by
lower incentive compensation.
In Corporate for year-to-date 2024, unallocated corporate costs
increased versus the prior year on higher global technology
investments to support digital transformation efforts, $75 million
in increased legal fees, and $33 million in increased financing
costs, partially offset by lower incentive compensation. Other
Corporate was unfavorable compared to the prior year period due to
investment valuation losses partially offset by foreign currency
gains.
Outlook3
The Company affirmed its previously provided EPS guidance for
the full year. ADM expects adjusted earnings per share1,2 in the
range of $4.50 to $5.00 for the full year 2024 based on trends in
ADM’s performance to date, legislative and regulatory policy
uncertainties, and ongoing headwinds from slower market demand and
internal operational challenges.
Within the reportable segments, for the fourth quarter compared
to the prior year period, the Company anticipates lower
year-over-year segment operating profit in AS&O, as an improved
environment in Ag Services is expected to be more than offset by
lower margins in Crushing and Refined Products & Other. In
Carbohydrate Solutions, solid demand and margins in North American
Starches & Sweeteners and strong fundamentals in ethanol are
expected to be offset by moderating wheat milling margins, leading
to fourth quarter segment operating profit that is roughly in-line
with the prior year period. In Nutrition, the Company anticipates
the fourth quarter operating profit will be higher than the prior
year period, but lower than the third quarter of 2024, due to
softer consumer demand, lower texturants pricing, and ongoing
operational challenges, including prolonged downtime at Decatur
East.
Wilmar
GAAP earnings include a reduction in the carrying value of the
Wilmar equity investment to reflect the Singapore Exchange trading
price as of the balance sheet date. The reduction resulted from a
determination that declines in the valuation amount for our
investment are impaired on an “other than temporary” basis as of
the end of the quarter. This has resulted in a non-cash charge
against GAAP earnings for the third quarter of 2024 of $461
million. The Company is continuing to evaluate trends in the
trading price of our Wilmar equity investment and the potential for
future charges that could result.
1Non-GAAP financial measures; see pages
7-9 and 14-16 for explanations and reconciliations.
2 All references in this document to
earnings per share (EPS) and adjusted earnings per share reflect
EPS on a diluted basis.
3 Forecasted 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.
Restated Financial
Statements
As previously disclosed, following ongoing dialogue with the
staff of the United States Securities and Exchange Commission, the
Company concluded that it would amend the Company’s fiscal year
2023 Form 10-K (the “FY2023 Form 10-K”) and Form 10-Q for the first
and second quarters of 2024 (collectively, the “Q1 and Q2 2024 Form
10-Qs”). The Company has now filed the amended FY2023 Form 10-K and
the amended Q1 and Q2 2024 Form 10-Qs, which contain the restated
financial statements for each of the periods included in those
filings, including fiscal years 2021, 2022 and 2023 in the FY2023
Form 10-K and each of the quarterly and year-to-date periods
included in the Q1 and Q2 2024 Form 10-Qs (collectively, the
“Restatements”). Because the transactions affected by the
restatement occurred between the Company’s reporting segments, the
restatement had no impact on ADM’s consolidated balance sheet,
earnings, or cash flows for the periods presented in the restated
filings.
Conference Call
Information
ADM will host a webcast on December 3, 2024 at 8 a.m. Central
Time to discuss financial results and outlook. 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 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.
Total segment operating profit. Total segment operating profit
is ADM’s consolidated earnings before income taxes adjusted for
Other business, Corporate, and specified items as more fully
described in the reconciliation tables below. Management believes
that total segment operating profit is a useful measure of ADM’s
performance because it provides investors information about ADM’s
reportable segment performance excluding other business, corporate
overhead costs as well as specified items. Total segment operating
profit is not a measure of consolidated operating results under
U.S. GAAP and should not be considered an alternative to earnings
before income taxes, the most directly comparable GAAP financial
measure, or any other measure of consolidated operating results
under U.S. GAAP. The Company is revising its reconciliation and
calculation of total segment operating profit. The revised
reconciliation is presented in Note 13. Segment Information of the
Company’s consolidated financial statements included in the
Quarterly Report on Form 10-Q for the quarter ended September 30,
2024, which presents a subtotal for total segment operating profit
that is equal to the sum of the segment operating profit reported
for each of the Ag Services and Oilseeds, Carbohydrate Solutions
and Nutrition segments. Amounts for Other business and specified
items, which previously were reflected in the calculation of total
segment operating profit, are now reflected as reconciling items,
similar to Corporate, between total segment operating profit and
earnings before income taxes
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 redeemable and non-redeemable noncontrolling interests)
and interest-bearing liabilities (which totals invested capital),
adjusted for 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.
Cash flow from operations before working capital is defined as
cash flow from operating activities excluding the changes in
operating assets and liabilities as presented in the Company’s
consolidated statement of cash flows. Management believes that cash
flow from operations before working capital is a useful measure of
the Company’s cash generation. Cash flow from operations before
working capital is a non-GAAP financial measure and is not intended
to replace or be an alternative to cash from operating activities,
the most directly comparable GAAP financial measure.
EBITDA is defined as earnings before interest, taxes,
depreciation and amortization. Adjusted EBITDA is defined as
earnings before interest on borrowings, taxes, depreciation, and
amortization, 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 measures and are not intended to replace or
be an alternative to net earnings, the most directly comparable
GAAP financial measure.
Financial Tables Follow
Source: Corporate Release
Source: ADM
Total Segment Operating Profit (a
non-GAAP financial measure) and Corporate Results
(unaudited)
Quarter ended
Nine months ended
September 30
September 30
(In millions)
2024
2023
Change
2024
2023
Change
Earnings before income taxes
$
108
$
1,031
$
(923
)
$
1,588
$
3,560
$
(1,972
)
Other Business (earnings) loss
17
(46
)
63
(200
)
(229
)
29
Corporate
409
390
19
1,254
1,105
149
Specified items:
(Gain) loss on sales of assets
(1
)
2
(3
)
(1
)
(10
)
9
Impairment and restructuring charges
504
69
435
517
190
327
Total Segment Operating Profit
$
1,037
$
1,446
$
(409
)
$
3,158
$
4,616
$
(1,458
)
Segment Operating Profit:
Ag Services and Oilseeds
$
480
$
848
$
(368
)
$
1,803
$
3,113
$
(1,310
)
Ag Services
107
226
(119
)
461
954
(493
)
Crushing
187
250
(63
)
632
901
(269
)
Refined Products and Other
124
337
(213
)
431
1,026
(595
)
Wilmar
62
35
27
279
232
47
Carbohydrate Solutions
$
452
$
468
$
(16
)
$
1,057
$
1,066
$
(9
)
Starches and Sweeteners
455
403
52
1,039
1,017
22
Vantage Corn Processors
(3
)
65
(68
)
18
49
(31
)
Nutrition
$
105
$
130
$
(25
)
$
298
$
437
$
(139
)
Human Nutrition
86
118
(32
)
265
441
(176
)
Animal Nutrition
19
12
7
33
(4
)
37
Corporate Results
$
(409
)
$
(390
)
$
(19
)
$
(1,254
)
$
(1,105
)
$
(149
)
Interest expense - net
(113
)
(98
)
(15
)
(351
)
(326
)
(25
)
Unallocated corporate costs
(306
)
(298
)
(8
)
(903
)
(808
)
(95
)
Other
10
11
(1
)
16
34
(18
)
Specified items:
Gain (loss) on debt conversion option
—
—
—
—
6
(6
)
Expenses related to acquisitions
—
(3
)
3
(4
)
(6
)
2
Restructuring and contingency charges
—
(2
)
2
(12
)
(5
)
(7
)
Total segment operating profit is ADM’s
consolidated earnings before income taxes adjusted for Other
business, Corporate, and specified items as more fully described in
the reconciliation tables below. Management believes that total
segment operating profit are useful measures of ADM’s performance
because it provides investors information about ADM’s business unit
performance excluding other business, corporate overhead costs as
well as specified items. Total segment operating profit is not a
measure of consolidated operating results under U.S. GAAP and
should not be considered an alternative 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
Nine months ended
September 30
September 30
2024
2023
2024
2023
(in millions, except per share
amounts)
Revenues
$
19,937
$
21,695
$
64,032
$
70,957
Cost of products sold (1)
18,572
19,885
59,612
65,184
Gross profit
1,365
1,810
4,420
5,773
Selling, general, and administrative
expenses (2)
905
815
2,763
2,537
Asset impairment, exit, and restructuring
costs(3)
507
79
532
146
Equity in (earnings) losses of
unconsolidated affiliates
(134
)
(83
)
(498
)
(408
)
Interest and investment income
(137
)
(152
)
(400
)
(428
)
Interest expense (4)
174
155
527
482
Other (income) expense - net (5)
(58
)
(35
)
(92
)
(116
)
Earnings before income taxes
108
1,031
1,588
3,560
Income tax expense (benefit) (6)
90
207
370
636
Net earnings including noncontrolling
interests
18
824
1,218
2,924
Less: Net earnings (losses) attributable
to noncontrolling interests
—
3
(15
)
6
Net earnings attributable to
ADM
$
18
$
821
$
1,233
$
2,918
Diluted earnings per common
share
$
0.04
$
1.52
$
2.48
$
5.35
Average diluted shares outstanding
483
540
497
546
(1) Includes a net reversal of charges related to inventory
writedowns of $5 million and a contingency loss provision of $62
million related to import duties in the prior YTD.
(2) Includes acquisition-related expenses of $3 million and $6
million in the prior quarter and YTD, respectively, and a
contingency loss adjustment of $8 million in the prior quarter and
YTD.
(3) Includes charges related to the impairment of the Company's
investment in Wilmar, impairment of discontinued animal nutrition
trademarks and restructuring costs
(4) Includes (gains) losses related to the mark-to-market
adjustment of the conversion option of the exchangeable bond issued
in August 2020 of $6 million in the prior YTD.
(5) Includes net (gains) losses related to the sale of certain
assets of $(1) million in the current quarter and YTD. Includes net
(gains) losses related to the sale of certain assets of $2 million
and $(10) million in the prior quarter and YTD, respectively.
(6) Includes the tax expense (benefit) impact of above specified
items and tax discrete items totaling $9 million and $23 million in
the current quarter and YTD, respectively, and $(17) million and
$(38) million in the prior year quarter and YTD, respectively.
Summary of Financial Condition
(unaudited)
September 30, 2024
September 30, 2023
(in millions)
Net Investment In
Cash and cash equivalents
$
784
$
1,498
Operating working capital
9,297
11,036
Property, plant, and equipment
10,828
10,218
Investments in affiliates
5,142
5,469
Goodwill and other intangibles
6,999
6,392
Other non-current assets
2,604
2,492
$
35,654
$
37,105
Financed By
Short-term debt
$
1,733
$
116
Long-term debt, including current
maturities
8,303
8,225
Deferred liabilities
3,351
3,183
Temporary equity
283
316
Shareholders’ equity
21,984
25,265
$
35,654
$
37,105
Summary of Cash Flows
(unaudited)
Nine months ended
September 30
2024
2023
(in millions)
Operating Activities
Net earnings
$
1,218
$
2,924
Depreciation and amortization
854
782
Asset impairment charges
517
120
(Gains) losses on sales/revaluation of
assets
9
(33
)
Other - net
(257
)
11
Other changes in operating assets and
liabilities
127
(1,913
)
Net Cash Provided by Operating
Activities
2,468
1,891
Investing Activities
Purchases of property, plant and
equipment
(1,071
)
(1,055
)
Net assets of businesses acquired
(936
)
(11
)
Proceeds from sale of business/assets
31
21
Investments in affiliates
(44
)
(8
)
Other investing activities
18
(8
)
Net Cash (Used) by Investing
Activities
(2,002
)
(1,061
)
Financing Activities
Long-term debt borrowings
—
500
Long-term debt payments
—
(963
)
Net borrowings (payments) under lines of
credit
1,627
(379
)
Share repurchases
(2,327
)
(1,118
)
Cash dividends
(744
)
(738
)
Other
(21
)
(102
)
Net Cash (Used) by Financing
Activities
(1,465
)
(2,800
)
Effect of exchange rate on cash, cash
equivalents, restricted cash, and restricted cash equivalents
6
(22
)
Increase (decrease) in cash, cash
equivalents, restricted cash, and restricted cash
equivalents
(993
)
(1,992
)
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
$
4,397
$
5,041
Segment Operating Analysis
(unaudited)
Quarter ended
Nine months ended
September 30
September 30
2024
2023
2024
2023
(in ‘000s metric tons)
Processed volumes (by
commodity)
Oilseeds
8,410
8,648
26,669
26,058
Corn
4,943
4,507
13,833
13,349
Total processed volumes
13,353
13,155
40,502
39,407
Quarter ended
Nine months ended
September 30
September 30
2024
2023
2024
2023
(in millions)
Revenues
Ag Services and Oilseeds
$
15,089
$
16,479
$
49,642
$
54,902
Carbohydrate Solutions
2,908
3,325
8,484
10,243
Nutrition
1,831
1,784
5,575
5,490
Other Business
109
107
331
322
Total revenues
$
19,937
$
21,695
$
64,032
$
70,957
Adjusted Net Earnings and Adjusted
EPS
Non-GAAP financial measures
(unaudited)
Quarter ended September 30
Nine months ended September
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
$
18
$
0.04
$
821
$
1.52
$
1,233
$
2.48
$
2,918
$
5.35
Adjustments:
Loss (gain) on sales of assets and
businesses (a)
(1
)
—
2
—
(1
)
—
(7
)
(0.02
)
Impairment, restructuring charges and
contingency provisions (b)
500
1.03
54
0.10
523
1.06
152
0.28
Expenses related to acquisitions (c)
—
—
3
0.01
3
0.01
5
0.01
Loss (gain) on debt conversion option
(d)
—
—
—
—
—
—
(6
)
(0.01
)
Certain discrete tax adjustments (e)
13
0.02
—
—
30
0.06
3
0.01
Sub-total adjustments
512
1.05
59
0.11
555
1.13
147
0.27
Adjusted net earnings and adjusted
EPS
$
530
$
1.09
$
880
$
1.63
$
1,788
$
3.61
$
3,065
$
5.62
Current quarter and YTD gain of $1 million and $(1) million
pretax ($(1) million and $(1) million after tax), respectively, was
related to the sale of certain assets, tax effected using the
applicable tax rate. Prior quarter and YTD (gain) loss of $2
million and $(10) million pretax ($2 million and $(7) million after
tax), respectively, was related to the sale of certain assets, tax
effected using the applicable tax rate.
(a)
Current quarter and YTD gain of $1 million
and $(1) million pretax ($(1) million and $(1) million after tax),
respectively, was related to the sale of certain assets, tax
effected using the applicable tax rate. Prior quarter and YTD
(gain) loss of $2 million and $(10) million pretax ($2 million and
$(7) 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 $504
million and $529 million pretax ($500 million and $523 million
after tax), respectively were related to the impairment of the
Company's investment in Wilmar, impairment of discontinued animal
nutrition trademarks, and restructuring, tax effected using the
applicable tax rates. Prior quarter and YTD charges of $79 million
and $141 million pretax ($60 million and $111 million after tax),
respectively, were related to the impairment of certain assets and
restructuring. Also included in the prior quarter and YTD is a
contingency loss reversal of $8 million pretax ($6 million after
tax) and a contingency provision related to import duties of $62
million pretax ($47 million after tax) in the prior YTD, tax
effected using the applicable tax rates.
(c)
Current 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 and $6 million ($3 million and $5
million after tax), respectively, were related to certain
acquisitions, tax effected using the Company’s U.S. income tax
rate.
(d)
Prior YTD gain on debt conversion option
of $6 million pretax ($6 million after tax).
(e)
Tax adjustments due to certain discrete
items totaling $13 million and $30 million in the current quarter
and YTD, respectively. Tax adjustments due to certain discrete
items totaling $3 million in the prior 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.
Adjusted Return on Invested
Capital
A non-GAAP financial measure
(unaudited)
ROIC Earnings (in millions)
Four Quarters
Quarter Ended
Ended
Dec. 31, 2023
Mar. 31, 2024
Jun. 30, 2024
Sep. 30, 2024
Sep. 30, 2024
Net earnings attributable to ADM
$
565
$
729
$
486
$
18
$
1,798
Adjustments:
Interest expense
109
115
135
124
483
Tax on interest
(26
)
(27
)
(32
)
(30
)
(115
)
Total ROIC Earnings
$
648
$
817
$
589
$
112
$
2,166
Total ROIC Earnings
$
648
$
817
$
589
$
112
$
2,166
Other Adjustments
155
21
22
512
710
Total Adjusted ROIC Earnings
$
803
$
838
$
611
$
624
$
2,876
Invested Capital (in millions)
Quarter Ended
Trailing Four
Dec. 31, 2023
Mar. 31, 2024
Jun. 30, 2024
Sep. 30, 2024
Quarter Average
Equity (1)
$
24,132
$
23,219
$
22,148
$
21,974
$
22,868
+ Interest-bearing liabilities (2)
8,370
9,995
10,576
10,051
9,748
Total Invested Capital
$
32,502
$
33,214
$
32,724
$
32,025
$
32,616
Total Invested Capital
$
32,502
$
33,214
$
32,724
$
32,025
$
32,616
Other Adjustments
155
21
22
512
178
Total Adjusted Invested Capital
$
32,657
$
33,235
$
32,746
$
32,537
$
32,794
Return on Invested Capital
6.6
%
Adjusted Return on Invested
Capital
8.8
%
(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 September 30, 2024.
Four Quarters
Quarter Ended
Ended
Dec. 31, 2023
Mar. 31, 2024
Jun. 30, 2024
Sep. 30, 2024
Sep. 30, 2024
(in millions)
Net earnings
$
565
$
729
$
486
$
18
$
1,798
Net earnings (losses) attributable to
noncontrolling interests
(23
)
(10
)
(5
)
—
(38
)
Income tax expense
192
166
115
90
563
Interest expense
109
115
135
124
483
Depreciation and amortization
277
280
286
288
1,131
EBITDA
1,120
1,280
1,017
520
3,937
(Gain) loss on sales of assets and
businesses
(7
)
—
—
(1
)
(8
)
Impairment and restructuring charges and
contingency provisions
172
18
7
504
701
Railroad maintenance expense
39
—
4
28
71
Expenses related to acquisitions
1
—
4
—
5
Adjusted EBITDA
$
1,325
$
1,298
$
1,032
$
1,051
$
4,706
EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. Adjusted EBITDA is
defined as earnings before interest on borrowings, taxes,
depreciation, and amortization, 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/20241118398169/en/
Media Contact Brett Lutz media@adm.com 312-634-8484
Investor Relations Megan Britt Megan.Britt@adm.com
872-257-8378
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