Archer-Daniels-Midland Co
For the period ended Sep 30, 2024. Filed Nov 18, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 18, 2024
ADM$69.97-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-18.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 141 current paragraphs.
23 unchanged; 61 reworded; 48 added; 27 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
Restatement of Previously Issued Consolidated Financial Statements
Current report
As described in the Part I, Item 1, Note 13 to the Consolidated Financial Statements, the Company has restated its Consolidated Financial Statements as of September 30, 2023 and for the three and nine months ended September 30, 2023. As a result, the previously reported financial information as of September 30, 2023 and for the three and nine months ended September 30, 2023, in this MD&A has been updated to reflect the restatements. See Item 1, Note 13. Segment Information, in the Consolidated Financial Statements for additional information related to the restatements, including descriptions of the adjustments and the impacts on the Consolidated Financial Statements, as well as a description of certain segment disclosure presentation errors that are being corrected in this report.
Current report
In the Ag Services and Oilseeds segment, Ag Services experienced lower margins in South America that were negatively impacted by take or pay contracts with railroads and smaller crops in places, strong corn volumes in North America on pre-harvest inventory liquidations, and solid volumes and margins in Global Trade. Low river water levels and hurricanes caused some operational disruptions in North America. Global crushing margins were pressured from more global competition than in previous years. Crushing saw low North American industry run rates that included annual maintenance shutdowns in advance of the US harvest that kept meal values firm, and pressured margins in Europe on reduced demands for EU produced crude oils. In Refined Products and Other, oil values in North America were under pressure due to low carbon intensity feedstocks competing in the renewable diesel market and uncertainty around Biodiesel industry policy changes, while Europe results were driven by solid spot margins. Based on the Company’s consideration of available information, the Company determined that its investment in Wilmar was other-than-temporarily impaired at September 30, 2024, and as a result, recorded a pre-tax impairment charge of $461 million in the three months ended September 30, 2024. The Company will continue to monitor Wilmar’s stock price as quoted on the Singapore Exchange, latest consensus analyst forecasts, and other trends to determine if future downward adjustments are necessary.
Current report
Analysis of Results of Operations
Current report
Earnings before income taxes decreased $923 million from $1 billion to $108 million primarily driven by a $461 million impairment charge related to the Company’s investment in Wilmar, lower pricing and execution margins, as well as unplanned downtime at key facilities.
Current report
Total segment operating profit (a non-GAAP measure) decreased $409 million from $1.4 billion to $1.0 billion due to lower results in Refined Products and Other, Ag Services, Vantage Corn Processors, Crushing, and Human Nutrition, partially offset by higher results in Starches and Sweeteners, Wilmar, and Animal Nutrition. Total segment operating profit (a non-GAAP measure) excluded asset impairment and restructuring charges totaling $504 million, driven by the impairment of $461 million of the Company’s investment in Wilmar. Excluded from total segment operating profit (a non-GAAP measure) in the year-ago quarter was a net charge of $71 million consisting of impairment and restructuring charges totaling $69 million and a loss on the sale of certain assets of $2 million.
Current report
Corporate results in the current year quarter were a net charge of $409 million. Charges consisted of $113 million of net interest expense and $306 million of unallocated costs.
Current report
Cost of products sold decreased $1.3 billion to $18.6 billion due principally to lower average commodity costs. Manufacturing expenses increased $124 million to $1.9 billion driven by increases in maintenance expenses due to work performed at Ag Services & Oilseeds facilities in Decatur, Illinois and Spiritwood, North Dakota, among others, increased salaries and benefits due to salary increases, higher depreciation expenses, and higher operating supplies driven by increases in EMEA, partially offset by decreases in energy costs particularly driven by lower energy pricing in EMEA.
Current report
Selling, general, and administrative expenses increased $90 million to $905 million driven by higher legal and financing fees, higher salary and benefit costs due to increased employee headcount, and increased amortization of intangibles due to the Company’s previous investment in computer software and intangibles acquired in business combinations, which were partially offset by decreased incentive compensation driven by lower Company performance and reduced provisions for bad debt.
Current report
Interest expense increased $19 million to $174 million driven by the increased use of the Company’s commercial paper borrowing programs.
Current report
Other income — net increased $23 million to $58 million driven by higher net foreign exchange gains, an absence of a contingent loss adjustment when compared to the year-ago period, partially offset by lower gains on sales of individually insignificant assets in the ordinary course of business than the year-ago period.
Current report
In the Carbohydrate Solutions segment, the segment operating profit decreased 3%. Starches and Sweeteners results were higher year-over-year driven by strong starches and sweeteners margins, higher volumes supported by high utilization rates across the network, and $47 million of insurance proceeds for the partial settlement of the Decatur West insurance claims related to an incident that occurred in 2023, partially offset by lower corn oil margins. Vantage Corn Processors results declined year-over-year as ethanol inventory values declined throughout the quarter on higher industry inventories and production.
Current report
In the Nutrition segment, the segment operating profit decreased 19%. Human Nutrition results were lower than the year-ago quarter. In Flavors, higher sales volumes in EMEA and contributions from acquisitions led to higher results. In Specialty Ingredients, lower soy protein sales volumes due to the 2023 Decatur East incident led to lower profits, partially offset by $25 million of insurance proceeds for the partial settlement of the 2023 Decatur East incident insurance claims and changes in inventory adjustments compared to the prior year quarter. In Health and Wellness, lower profits were driven by inventory reserve adjustments due primarily to changes in customer demand fulfillment, non-recurring benefits in the year-ago quarter, costs associated with the closure of a joint venture, and softer margins within prebiotics, offset by stronger growth in biotics and botanicals. Animal Nutrition results were higher compared to the year-ago quarter as cost optimization efforts and lower input costs bolstered margins.
Current report
In Other Business, the operating profit decreased $63 million. Captive insurance results were lower due to $112 million in claim settlements, which included partial settlements of $96 million for the Decatur East and West insurance claims. ADM Investor Services results were lower due to decreased interest income.
Current report
Corporate results for the three months ended September 30, 2024 and 2023 were as follows (in millions).
Current report
In this report, the Company is revising its reconciliation and calculation of total segment operating profit. The revised reconciliation in Note 13. Segment Information 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.
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Current report
In the Ag Services and Oilseeds segment, following two years of very favorable market conditions, several headwinds in the agriculture cycle led to more normalized results throughout the entire value chain. Ag Services experienced slow South American farmer selling through much of the current year period, low demand for North American exports, and low margins in all regions with the move to a carry market. Crushing saw depressed oil values primarily driven by used cooking oil imports and increased industry capacity. In Refined Products and Other, oil values in North America were under pressure due to low carbon intensity feedstocks competing in the renewable diesel market and uncertainty around the lack of guidance on Biodiesel industry policy changes. Based on the Company’s consideration of available information, the Company determined that its investment in Wilmar was other-than-temporarily impaired at September 30, 2024, and as a result, recorded a pre-tax impairment charge of $461 million in the nine months ended September 30, 2024. The Company will continue to monitor Wilmar’s stock price as quoted on the Singapore Exchange, latest consensus analyst forecasts, and other trends to determine if future downward adjustments are necessary.
Current report
Analysis of Results of Operations
Current report
Earnings before income taxes decreased $2.0 billion from $3.6 billion to $1.6 billion primarily driven by lower pricing and execution margins, as well as the $461 million impairment charge related to the Company’s investment in Wilmar .
Current report
Corporate results in the current period were a net charge of $1.3 billion. Charges consisted of $351 million of net interest expense and $903 million of unallocated costs.
Current report
Gross profit decreased $1.4 billion, or 23%, to $4.4 billion due principally to lower margins in Ag Services and Oilseeds ($1.2 billion), Human Nutrition ($88 million), Starches and Sweeteners ($69 million), and Vantage Corn Processors ($41 million), partially offset by higher margins in Animal Nutrition ($51 million), and Other Business ($45 million). See the segment operating profit discussion on page 50 for further information.
Current report
Selling, general, and administrative expenses increased $226 million to $2.8 billion driven by higher legal and financing fees, higher salary and benefit costs due to increased employee headcount, and increased amortization of intangibles due to the Company’s previous investment in computer software and intangibles acquired in business combinations, partially offset by decreased incentive compensation driven by lower Company performance and reduced provisions for bad debt.
Current report
Interest expense increased $45 million to $527 million driven by increased use of the Company’s commercial paper borrowing programs.
Current report
Other income — net decreased $24 million to $92 million driven by lower gains on sales of individually insignificant assets in the ordinary course of business than the year-ago period and lower net foreign exchange gains. This decrease was partially offset by favorable adjustments to contingent loss reserves.
Current report
In Other Business, operating profit decreased $29 million, driven by lower Captive insurance results due to $112 million in claim settlements, which included partial settlements of $96 million for the Decatur East and West insurance claims.
Current report
Corporate results for the nine months ended September 30, 2024 and 2023 were as follows (in millions).
Current report
In this report, the Company is revising its reconciliation and calculation of total segment operating profit. The revised reconciliation in Note 13. Segment Information 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.
Current report
Operating cash flows
Current report
Cash provided by operating activities was $2.5 billion and $1.9 billion for the nine months ended September 30, 2024 and 2023, respectively.
Current report
The increase in cash provided by operating activities is primarily driven by changes in net working capital. Changes in net working capital are driven by changes in segregated investments, changes in inventory, changes in trade payables and changes in payables to brokerage customers. Segregated investments increased $257 million compared to an increase of $1.2 billion in the prior-year period driven by higher interest rates. Inventories decreased $1.2 billion compared to decrease of $3.5 billion in the prior year-period reflecting lower commodity pricing. Trade payables decreased $1.4 billion compared to a decrease of $2.6 billion in the prior-year period, reflecting lower commodity pricing. Brokerage payables decreased $249 million compared to a decrease of $1.6 billion in the prior-year period driven by decreased trading activity in the Company’s futures commission and brokerage business.
Current report
Investing cash flows
Current report
Net cash used in investing activities was $2.0 billion and $1.1 billion for the nine months ended September 30, 2024 and 2023, respectively.
Current report
Net cash used in investing activities for the nine months ended September 30, 2024 included additions to property, plant and equipment of $1.1 billion and business acquisitions net of cash acquired of $936 million, and investments in affiliates of $44 million, partially offset by proceeds from sale of assets of $31 million.
Current report
Net cash used in investing activities for the nine months ended September 30, 2023 included additions to property, plant and equipment of $1.1 billion, partially offset by proceeds from sale of assets of $21 million.
Current report
Financing cash flows
Current report
Net cash used in financing activities was $1.5 billion and $2.8 billion for the nine months ended September 30, 2024 and 2023, respectively.
Current report
Net cash used in financing activities for the nine months ended September 30, 2024 included net borrowings on short-term credit agreements of $1.6 billion. No long-term debt repayments were made in the current period.
Current report
Net cash used in financing activities for the nine months ended September 30, 2023 included corporate bond repayments of $963 million and net borrowings on short-term credit agreements of $379 million. It also included proceeds from debt of $500 million related to the $500 million aggregate principle amount of 4.500% Notes due 2033 that were issued in April 2023.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (27)
Previous report
Intersegment Sales - Correction of Certain Segment-Specific Historical Information and Related Matters
Previous report
As further described in Note 13, Segment Information of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein, the Company conducted an Investigation following receipt of a voluntary document request from the SEC. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, based on the Investigation, the Company corrected certain segment-specific historical financial information for the years presented in the Form 10-K.
Previous report
Because each sale adjusted occurred between the Company’s reporting segments, the adjustments had no impact on the Company’s previously-reported consolidated balance sheets and statements of earnings, comprehensive income (loss), or cash flows. The Company determined the adjustments are not material to the Company’s consolidated financial statements taken as a whole for any period.
Previous report
As further described in Note 13, Segment Information of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein, the Company also corrected certain immaterial errors relating to the classification of certain intrasegment revenues.
Previous report
Additional information about such error corrections is set forth in Note 13, Segment Information of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein. Note 13 also includes adjustments to certain corresponding segment-specific historical financial information for the three and six months ended June 30, 2023 to reflect these immaterial error corrections. The information in this MD&A reflects the corrections to the historical financial information for the three and six months ended June 30, 2023.
Previous report
Earnings before taxes decreased $0.5 billion to $0.6 billion due to lower pricing and execution margins as well as higher corporate unallocated costs. Segment operating profit (a non-GAAP measure) decreased $0.5 billion from $1.5 billion to $1.0 billion and included asset impairment and restructuring charges totaling $7 million. Included in segment operating profit in the prior-year quarter was a net charge of $103 million consisting of charges totaling $114 million and a gain on the sale of certain assets of $11 million. Adjusted segment operating profit (a non-GAAP measure) decreased $0.6 billion to $1.0 billion due primarily to lower results in Ag Services and Oilseeds, and Human Nutrition, partially offset by higher results in Carbohydrate Solutions, Other Business, and Animal Nutrition. Corporate Unallocated results in the current quarter were a net charge of $418 million. Corporate unallocated results in the prior-year quarter were a net charge of $393 million and included a mark-to-market gain of $1 million on the conversion option of the exchangeable bonds issued in August 2020.
Previous report
Analysis of Statements of Earnings
Previous report
Cost of products sold decreased $2.5 billion to $20.9 billion due principally to lower average commodity costs. Manufacturing expenses increased $20 million to $1.9 billion due principally to higher salaries and benefit costs, maintenance costs, and commercial services, partially offset by lower energy costs.
Previous report
Gross profit decreased $0.5 billion or 26% to $1.4 billion. Lower results in Ag Services and Oilseeds ($507 million), and Human Nutrition ($54 million) were partially offset by higher results in Carbohydrate Solutions ($32 million), Animal Nutrition ($24 million), and Other ($20 million). These factors are explained in the segment operating profit discussion on page 47.
Previous report
Selling, general, and administrative expenses increased $66 million to $907 million due primarily to increased legal and professional fees, increased amortization of intangibles, and higher salaries and benefit costs.
Previous report
Interest expense increased $7 million to $187 million due primarily to increased short-term rates on customer deposit balances in ADM Investor Services. Interest expense in the prior-year quarter also included a mark-to-market gain adjustment of $1 million related to the conversion option of the exchangeable bonds issued in August 2020.
Previous report
Other income-net decreased $28 million to $9 million. Income in the current quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, net foreign exchange gains, and net other income. Income in the prior-year quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, net foreign exchange gains, and net other income.
Previous report
Carbohydrate Solutions operating profit increased 12%. Starches and Sweeteners results were higher year-over-year as strong starches and sweeteners margins and higher volumes were partially offset by lower domestic ethanol margins, as well as moderating margins in the EMEA region. Vantage Corn Processors results improved year-over-year as strong demand for exports of ethanol supported higher margins.
Previous report
Nutrition operating profit decreased 36%. Human Nutrition results were lower than the second quarter of 2023 as impacts related to unplanned downtime at Decatur East, a normalizing texturants market, and higher manufacturing costs negatively impacted margins. Animal Nutrition results were higher compared to the same quarter last year as cost optimization efforts and lower input costs bolstered margins.
Previous report
Other Business operating profit increased $10 million. Captive insurance results were higher due to lower claim activity. ADM Investor Services was lower on higher operating costs.
Previous report
Corporate unallocated results for the quarter were as follows:
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Previous report
Analysis of Statements of Earnings
Previous report
Selling, general, and administrative expenses increased $0.1 billion to $1.9 billion due primarily to higher salaries and benefit costs, increased expenses for contracted outside labor, and higher legal and financing fees, partially offset by decreased provisions for bad debt.
Previous report
Interest expense increased $26 million to $353 million due primarily to increased short-term rates on customer deposit balances in ADM Investor Services. Interest expense in the prior period included a $6 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020. The exchangeable bonds were paid off in full in August 2023.
Previous report
Other income-net decreased $46 million to $35 million. Income in the current period included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, and net foreign exchange gains. Income in the prior period included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, net foreign exchange gains, and net other income.
Previous report
Other Business operating profit increased $34 million. Captive insurance results were higher due to lower claim activity. ADM Investor Services profits were lower on higher operating costs.
Previous report
Corporate unallocated results for the six months ended June 30, 2024 and 2023 were as follows:
Previous report
Cash provided by operating activities was $1.2 billion for the six months ended June 30, 2024 compared to cash provided of $0.9 billion for the same period last year. Working capital changes decreased cash by $0.5 billion for the six months ended June 30, 2024 compared to a decrease of $1.6 billion for the same period last year. Segregated investments increased $0.3 billion due to increased trading activity in the Company’s futures commission and brokerage business. Trade receivables increased $0.2 billion due to timing of sales. Inventories decreased $1.4 billion due to lower inventory prices and volumes. Trade payables decreased $1.3 billion primarily due to lower payables related to grain purchases. Brokerage payables decreased approximately $0.4 billion due to decreased trading activity in the Company’s futures commission and brokerage business.
Previous report
Cash used in investing activities was $1.6 billion for the six months ended June 30, 2024 compared to $0.6 billion for the same period last year. Capital expenditures for the six months ended June 30, 2024 of $0.7 billion were comparable to the same period last year. Net assets of businesses acquired in the six months ended June 30, 2024 were $0.9 billion compared to none in the same period last year.
Previous report
Cash used in financing activities was $0.7 billion for the six months ended June 30, 2024 compared to cash used of $2.1 billion for the same period last year. Long-term debt payments were immaterial for the six months ended June 30, 2024 compared to $0.7 billion for the same period last year, due to no corporate bond issues coming due in the current year period, compared to one issue coming due in the prior year period. Net borrowings on short-term credit agreements for the six months ended June 30, 2024 were $2.2 billion compared to net payments of $0.4 billion for the same period last year. Share repurchases for the six months ended June 30, 2024 were $2.3 billion compared to $1.0 billion for the same period last year. Dividends were $0.5 billion for the six months ended June 30, 2024 compared to $0.5 billion for the same period last year.
Previous report
In 2024, the Company expects total capital expenditures of approximately $1.4 billion and additional cash outlays of approximately $1.0 billion in dividends and $2.3 billion in share repurchases, subject to other strategic uses of capital and the evolution of operating cash flows and the working capital position throughout the year.
Reworded paragraphs (61)
Previous wording
This MD&A should be read in conjunction with the accompanying unaudited consolidated financial statements.
Current wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying unaudited Consolidated Financial Statements.
Previous wording
ADM is an essential global agricultural supply chain manager and processor; a premier human and animal nutrition provider; a trailblazer in groundbreaking solutions to support healthier living; an industry-leading innovator in replacing petroleum-based products; and a leader in sustainability. The Company is one of the world’s leading producers of ingredients for sustainable nutrition. The Company uses its significant global asset base to originate and transport agricultural commodities, connecting to markets in over 190 countries. The Company also processes corn, oilseeds, and wheat into products for food, animal feed, industrial, and energy uses. The Company also engages in the manufacturing, sale, and distribution of a wide array of ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, and other specialty food and feed ingredients. The Company uses its global asset network, business acumen, and its relationships with suppliers and customers to efficiently connect the harvest to the home thereby generating returns for its shareholders, principally from margins earned on these activities.
Current wording
Archer-Daniels-Midland Company and its subsidiaries (“ADM” or the “Company”) is an essential global agricultural supply chain manager and processor; a premier human and animal nutrition provider; a trailblazer in groundbreaking solutions to support healthier living; an industry-leading innovator in replacing petroleum-based products; and a leader in sustainability. The Company is one of the world’s leading producers of ingredients for sustainable nutrition. The Company uses its significant global asset base to originate and transport agricultural commodities, connecting to markets in over 190 countries. The Company also processes corn, oilseeds, and wheat into products for food, animal feed, industrial, and energy uses. The Company also engages in the manufacturing, sale, and distribution of a wide array of ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, and other specialty food and feed ingredients. The Company uses its global asset network, business acumen, and its relationships with suppliers and customers to efficiently connect the harvest to the home thereby generating returns for its shareholders, principally from margins earned on these activities.
Previous wording
The Company’s operations are organized, managed, and classified into three reportable business segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable business segments, as defined by the applicable accounting standard, and are classified as Other Business. Financial information with respect to the Company’s reportable business segments is set forth in Note 13 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements”.
Current wording
The Company’s operations are organized, managed, and classified into three reportable segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these reportable segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Corporate and Other Business. Financial information with respect to the Company’s reportable segments is set forth in Note 13. Segment Information of “Notes to Consolidated Financial Statements” included in Item 1 “Financial Statements”.
Previous wording
•the acquisitions in January 2024 of Revela Foods, a Wisconsin-based developer and manufacturer of innovative dairy flavor ingredients and solutions and FDL, a UK-based leading developer and producer of premium flavor and functional ingredient systems.
Current wording
•the acquisitions in January 2024 of Revela Foods, a Wisconsin-based developer and manufacturer of innovative dairy flavor ingredients and solutions and FDL, a UK-based leading developer and producer of premium flavor and functional ingredient systems. See Note 4. Acquisitions of “Notes to Consolidated Financial Statements” included in Item 1 “Financial Statements” for further information.
Previous wording
The Company’s policy to protect forests, biodiversity, and communities includes provisions that promote conservation of water resources and biodiversity in agricultural landscapes, promote solutions to reduce climate change and greenhouse gas emissions, and support agriculture as a means to advance sustainable development by reducing poverty and increasing food security. Additionally, the policy confirms ADM’s commitment to protect human rights defenders, whistleblowers, complainants, and community spokespersons; ADM’s aspiration to cooperate with all parties necessary to enable access to fair and just remediation; and the Company’s non-compliance protocol for suppliers. In 2022, the Company achieved full traceability of its direct and indirect sourcing throughout its soy supply chains in Brazil, Paraguay, and Argentina. ADM is committed to eliminating deforestation from all of the Company’s supply chains by 2025. In 2023, after a strategic investigation of the impact of conversion of native habitats in its key supply chains, the Company announced its commitment to eliminate conversion of native habitats in high risk areas in South America for direct suppliers of all commodities by 2025 and indirect suppliers by 2027, with a 2025 cutoff date (a date after which conversion of primary native vegetation renders a given area or production unit non-compliant) for both direct and indirect suppliers.
Current wording
The Company’s policy to protect forests, biodiversity, and communities includes provisions that promote conservation of water resources and biodiversity in agricultural landscapes, promote solutions to reduce climate change and greenhouse gas emissions, and support agriculture as a means to advance sustainable development by reducing poverty and increasing food security. Additionally, the policy confirms ADM’s commitment to protect human rights defenders, whistleblowers, complainants, and community spokespersons; ADM’s aspiration to cooperate with all parties necessary to enable access to fair and just remediation; and the Company’s non-compliance protocol for suppliers. In 2022, the Company achieved full traceability of its direct and indirect sourcing throughout its soy supply chains in Brazil, Paraguay, and Argentina. ADM is committed to eliminating deforestation from all of the Company’s supply chains by end of 2025. In 2023, after a strategic investigation of the impact of conversion of native habitats in its key supply chains, the Company announced its commitment to eliminate conversion of native habitats in high risk areas in South America for direct suppliers of all commodities by end of 2025 and indirect suppliers by 2027, with a December 31, 2025 cutoff date (a date after which conversion of primary native vegetation renders a given area or production unit non-compliant) for both direct and indirect suppliers.
Previous wording
The Company is exposed to certain risks inherent to an agricultural-based commodity business. These risks are further described in Part I Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
The Company is exposed to certain risks inherent to an agricultural-based commodity business. These risks are further described in Part I Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023.
Previous wording
The Company’s Ag Services and Oilseeds and Carbohydrate Solutions operations are principally agricultural commodity-based businesses where changes in selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold. Therefore, changes in revenues of these businesses do not necessarily correspond to changes in margins or gross profit. Thus, gross margins per volume or metric ton are more meaningful than gross margins as percentage of revenues.
Current wording
The Company’s Ag Services and Oilseeds and Carbohydrate Solutions segments are principally agricultural commodity-based businesses where changes in selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold. Therefore, changes in revenues of these businesses do not necessarily correspond to changes in margins or gross profit. Thus, gross margins per volume or metric ton are more meaningful than gross margins as percentage of revenues.
Previous wording
The Nutrition businesses also utilize agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily correlate to changes in cost of products sold. Therefore, changes in revenues of these businesses may correspond to changes in margins or gross profit. Thus, gross margins rates are more meaningful as a performance indicator in these businesses.
Current wording
The Nutrition segment also utilizes agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily correlate to changes in cost of products sold. Therefore, changes in revenues of these businesses may correspond to changes in margins or gross profit. Thus, gross margins rates are more meaningful as a performance indicator in these businesses.
Previous wording
The Company measures its performance using key financial metrics including net earnings, adjusted earnings per share (EPS), gross margins, segment operating profit, adjusted segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, return on invested capital, economic value added, and operating cash flows before working capital. Some of these metrics are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures. For more information, see “Non-GAAP Financial Measures” on page 48. The Company’s financial results can vary significantly due to changes in factors such as fluctuations in energy prices, weather conditions, crop plantings, government programs and policies, trade policies, changes in global demand, general global economic conditions, changes in standards of living, global production of similar and competitive crops, and geopolitical developments. Due to the unpredictable nature of these and other factors, the Company undertakes no responsibility for updating any forward-looking information contained within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current wording
The Company measures its performance using key financial metrics including net earnings, adjusted diluted earnings per share (EPS), gross margins, segment operating profit, total segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, return on invested capital, adjusted economic value added, and operating cash flows before working capital. Some of these metrics are not defined by generally accepted accounting principles in the United States (GAAP) and should be considered in addition to, and not in lieu of, GAAP financial measures. For more information, see “Non-GAAP Financial Measures” on page 44.
Previous wording
The Company is subject to a variety of market factors which affect the Company's operating results. In Ag Services and Oilseeds, following two years of very favorable market conditions, several headwinds in the agriculture cycle led to more normalized conditions throughout the entire value chain. Ag Services experienced slow South American farmer selling, depressed margins, low demand for North American exports along with limited trade opportunities as a carry market has contributed to slow farmer selling. Crushing saw good demand with lower North American meal exports. In Refined Products and Other, despite strong global demand for oil and biodiesel, margins were limited by oil values, particularly in North America, due to low carbon intensity feedstocks competing in the renewable diesel market. In Carbohydrate Solutions, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Demand for ethanol was strong going into summer driving season. Strong ethanol export demand was due to higher mandates in certain jurisdictions and discretionary blending. Industry ethanol stocks declined and ethanol margins improved. In Nutrition, demand was softer in a few food and beverage product categories driven by shifts in consumer discretionary spend. Human Nutrition was impacted by inflation which drove lower demand and impacted sales volumes in alternative proteins. In Animal Nutrition, a soft amino acids market driven by price weakness in North America was partially compensated by a slightly improved market in Europe, Middle East, and Africa (EMEA). The global feed and feed additives market remained challenged on the demand side, with weakness in the Chinese beef and pork business and continued subdued global shrimp prices.
Current wording
The Company is subject to a variety of market factors which affect the Company's operating results.
Previous wording
The Company is subject to a variety of market factors which affect the Company's operating results. In Ag Services and Oilseeds, following two years of very favorable market conditions, several headwinds in the agriculture cycle led to more normalized results throughout the entire value chain. Ag Services experienced slow South American farmer selling, low demand for North American exports, with good crop prospects in North America. Crushing experienced strong run rates in Europe and South America, the anticipation of a more normal global supply environment, and new capacity suppressing meal and oil values. In Refined Products and Other, oil values in North America were under pressure due to low carbon intensity feedstocks competing in the renewable diesel market, nevertheless the biodiesel mandate increase from B12 to B14 in Brazil had a positive impact on results. In Carbohydrate Solutions, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Strong export demand for ethanol helped offset higher industry production to minimize the imbalance between supply and demand. In Nutrition, demand was softer in a few food and beverage product categories driven by shifts in consumer discretionary spend. Human Nutrition was impacted by inflation which drove lower demand and impacted sales volumes in alternative proteins. Demand has started to recover in the food, beverage, and dietary supplement segment. In Animal Nutrition, a soft amino acids market driven by price weakness in North America was partially compensated by a slightly improved market in Europe, Middle East, and Africa (EMEA). The global feed and feed additives market remained challenged on the demand side, with weakness in the Chinese beef and pork business and continued subdued global shrimp prices.
Current wording
In the Nutrition segment, demand was softer in a few food and beverage product categories driven by shifts in consumer discretionary spend. Human Nutrition was impacted by inflation which drove lower demand and decreased volumes in alternative proteins. Demand started to recover in the food, beverage, and dietary supplement categories. In Animal Nutrition, a soft amino acids market driven by price weakness in North America was partially offset by a slightly improved market in Europe, Middle East, and Africa (EMEA). The global feed market saw some modest improvement with continued price weakness of main feed ration commodities, while key livestock prices remained steady. The feed additives market was impacted by volatility on vitamins due to supply disruptions, however overall modestly improving, following the improvement in the feed sector.
Previous wording
Income tax expense decreased $89 million to $115 million. The effective tax rate for the quarter ended June 30, 2024 was 19.3% compared to 18.0% for the quarter ended June 30, 2023. The increase in the rate was primarily due to the impact of discrete tax items, partially offset by the change in the geographic mix of forecasted pretax earnings.
Current wording
Income tax expense decreased $117 million to $90 million. The effective tax rate for the three months ended September 30, 2024 was 83.3% compared to 20.1% for the three months ended September 30, 2023. The increase in the effective tax rate was primarily due to the impairment of the Company’s investment in Wilmar.
Previous wording
Processed volumes by product for the six months ended June 30, 2024 and 2023 were as follows (in metric tons):
Current wording
Processed volumes by product for the three months ended September 30, 2024 and 2023 were as follows (in metric tons).
Previous wording
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. Oilseeds and corn processed volumes were fairly consistent between the quarters with increases due to more favorable weather and reduced unplanned downtime compared to the previous year.
Current wording
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall decrease in processed oilseeds volumes was primarily related to lower North America and South America crush volumes in the current year quarter. The overall increase in processed corn volumes was primarily related to increased plant reliability in the current period compared to the year-ago period due to unplanned downtime at the Decatur, Illinois plant and the Cedar Rapids, Iowa dry mill.
Previous wording
Revenues by segment for the quarter were as follows:
Current wording
Revenues by segment for the three months ended September 30, 2024, were as follows (in millions).
Previous wording
Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes. During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from market price changes, which generally result in an insignificant impact to gross profit.
Current wording
Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes. During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins. Revenues and cost of products sold, particularly in the Ag Services and Oilseeds segment, generally have a relatively equal impact from market price changes, which generally result in an insignificant impact to gross profit.
Previous wording
Revenues decreased $2.9 billion to $22.2 billion due to lower sales prices ($3.6 billion), partially offset by higher sales volumes ($0.7 billion). Lower sales prices of emulsifiers and thickeners, biodiesel, and corn and lower sales volumes of meal and farming materials, were partially offset by higher sales volumes of animal feeds, oils, soybeans and rapeseed. Ag Services and Oilseeds revenues decreased 13% to $17.3 billion due to lower sales prices ($3.1 billion), partially offset by higher sales volumes ($0.6 billion). Carbohydrate Solutions revenues decreased 14% to $2.9 billion due to lower sales prices ($0.5 billion). Nutrition revenues increased 3% to $1.9 billion due to slightly higher sales volumes ($0.2 billion), partially offset by lower prices ($0.1 billion).
Current wording
Revenues decreased $1.8 billion to $19.9 billion driven by lower sales prices ($3.5 billion), partially offset by higher sales volumes ($1.7 billion). Lower sales prices of alcohol, biodiesel, corn, soybeans, and wheat were partially offset by higher sales volumes of corn, sorghum and milo, wheat, and soybeans. Ag Services and Oilseeds revenues decreased 8% to $15.1 billion driven by lower sales prices ($3.0 billion), partially offset by higher sales volumes ($1.6 billion). Carbohydrate Solutions revenues decreased 13% to $2.9 billion driven by lower sales prices ($524 million), partially offset by higher sales volumes ($106 million). Nutrition revenues increased 3% to $1.8 billion driven by higher sales volumes ($65 million), partially offset by lower sales prices ($18 million).
Previous wording
Foreign currency translation decreased revenues by $114 million and cost of products sold by $95 million.
Current wording
Foreign currency translation decreased revenues by $102 million and decreased cost of products sold by $86 million.
Previous wording
Gross profit decreased $0.9 billion or 23% to $3.1 billion due principally to lower results in Ag Services and Oilseeds ($870 million), Human Nutrition ($102 million), and Starches and Sweeteners ($35 million), partially offset by Animal Nutrition ($44 million), Vantage Corn Processors ($24 million), and Other ($37 million). These factors are explained in the segment operating profit discussion on page 54.
Current wording
Gross profit decreased $445 million, or 25%, to $1.4 billion driven by lower margins in Ag Services and Oilseeds ($360 million), Vantage Corn Processors ($65 million) and Starches and Sweeteners ($33 million), partially offset by higher margins in Human Nutrition ($2 million), Animal Nutrition ($8 million), and Other Business ($8 million). See the segment operating profit discussion on page 43 for further information.
Previous wording
Asset impairment, exit, and restructuring costs decreased $53 million to $7 million. Charges in the current quarter consisted of $7 million of impairments related to certain long-lived assets presented as specified items within segment operating profit. Charges in the prior-year quarter consisted of $43 million of impairments related to certain long-lived assets and intangibles and $17 million of restructuring, presented as specified items within segment operating profit.
Current wording
Asset impairment, exit, and restructuring costs increased $428 million to $507 million. Charges in the current year quarter of $507 million primarily included a $461 million impairment charge related to the Company’s investment in Wilmar and a $43 million impairment charge related to discontinued animal nutrition trademarks, presented as specified items. Charges in the year-ago quarter consisted of $74 million of impairments related to certain long-lived assets and intangibles and $3 million of restructuring, presented as specified items, and restructuring of $2 million in Corporate.
Previous wording
Equity in earnings of unconsolidated affiliates increased $1 million to $152 million due primarily to higher earnings from the Company’s investments in Hungrana, Almindones Mexicanos S.A., and Stratas, partially offset by lower earnings from the Company’s investment in Wilmar.
Current wording
Equity in earnings of unconsolidated affiliates increased $51 million to $134 million driven by higher earnings from the Company’s investments in Wilmar, Almidones Mexicanos S.A., and Skyland Grain, LLC, partially offset by lower earnings from the Company’s investment in Olenex Sarl.
Previous wording
Interest and investment income decreased $2 million to $140 million due primarily to lower interest income.
Current wording
Interest and investment income decreased $15 million to $137 million driven by lower interest income for ADM Investor Services due to lower customer balances.
Previous wording
Segment operating profit (loss) and adjusted segment operating profit (both non-GAAP measures) are reconciled to earnings before income taxes, the most directly comparable GAAP measure, for the six months ended June 30, 2024 and 2023 as follows:
Current wording
Total segment operating profit (a non-GAAP measure) is reconciled to earnings before income taxes, the most directly comparable GAAP measure, for the three months ended September 30, 2024 and 2023 as follows (in millions).
Previous wording
Ag Services and Oilseeds operating profit decreased 56%. Ag Services results were lower than the second quarter of 2023 due to the stabilization of trade flows leading to lower global trade and risk management results. In South America, slower farmer selling led to much lower margins. North American results were lower due to strong supplies out of Brazil and Argentina shifting export demand to South America. Crushing results were lower than the prior year quarter as global soy crush margins moderated due to more balanced supply and demand conditions and lower oil values caused by an increase in imports of used cooking oil. During the quarter, negative mark-to-market timing impacts were significantly lower than in the prior-year quarter. Refined Products & Other (RPO) results were lower, as the margin structure in North America and EMEA has eased from historically high levels in the prior year period. RPO negative mark-to-market timing impacts affected current quarter results versus positive impacts in the prior-year quarter. Equity earnings from Wilmar were lower versus the second quarter of 2023.
Current wording
In the Ag Services and Oilseeds segment, the segment operating profit decreased 43%, driven by more stable global supply and demand conditions and continued low commodity pricing, leading to tighter margins and lower operating profits. Ag Services results were lower year-over-year. In South America, results were driven by lower origination volumes and margin compression due to the industry's concern about fulfilling the take or pay agreements and slow farmer selling. North American results were comparatively reduced by lower insurance proceeds received in the current year and decreased export demand. Crushing results were lower than the high previous year as North America saw significant planned and unplanned downtimes, limiting execution opportunities, and lower oil values caused in part by an increase in imports of used cooking oil used as low carbon intensity renewable diesel feedstock. During the current year quarter, negative mark-to-market timing impacts in Crushing were significantly lower than in the year-ago quarter. EMEA soy crush margins were improved, driven by delays of imports from South America. South American soy crush margins were also higher, supported by increased oil prices due to strong demand. 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. Refined Products and Other (RPO) results were lower, as the margin structure in North America and EMEA has normalized from historically high levels in the year-ago quarter. Mark-to-market timing impacts affected current year quarter RPO results versus positive impacts in the year-ago quarter. Prior year benefited significantly from positive biodiesel timing effects. Equity earnings from Wilmar increased compared to the year-ago quarter.
Previous wording
Corporate unallocated results were a net charge of $418 million in the current quarter compared to a net charge of $393 million in the prior-year quarter. Interest expense-net increased $3 million due to higher borrowings. Unallocated corporate costs increased $30 million due primarily to increases in legal and professional fees, global technology spend, and securitization fees. Gain on debt conversion option in the prior-year quarter was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020. Other income in the current quarter includes foreign exchange gains of $12 million and the non-service components of net pension benefit income of $5 million. Other expense in the prior-year quarter included foreign exchange losses and railroad maintenance expenses, partially offset by the non-service components of net pension benefit income of $5 million.
Current wording
Interest expense-net increased $15 million driven by higher financing costs due to increased commercial paper balances. Unallocated corporate function costs increased $8 million driven by increases in legal and professional fees and securitization fees, partially offset by a decrease in incentive compensation. Other income — net in the current year quarter included foreign exchange gains of $39 million and the non-service components of net pension benefit income of $4 million, partially offset by railroad maintenance expenses of $28 million. Other income — net in the prior-year quarter included foreign exchange gains and the non-service components of net pension benefit income of $4 million, partially offset by railroad maintenance expenses of $26 million.
Previous wording
The Company uses adjusted net earnings, adjusted earnings per share (EPS), EBITDA, adjusted EBITDA, segment operating profit, and adjusted segment operating profit, non-GAAP financial measures as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance. These performance measures are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.
Current wording
The Company uses adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit, non-GAAP financial measures as defined by the SEC, to evaluate the Company’s financial performance. These performance measures are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.
Previous wording
Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items. Adjusted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items. EBITDA is defined as earnings before interest on borrowings, taxes, and 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. Segment operating profit is total operating profit of the Company’s reportable segments. Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items.
Current wording
Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items. Adjusted diluted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items. EBITDA is defined as earnings before interest on borrowings, taxes, and 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. Total segment operating profit is defined as ADM’s consolidated earnings before income taxes, adjusted for Other business, Corporate, and specified items.
Previous wording
Management believes that adjusted net earnings, adjusted EPS, EBITDA, adjusted EBITDA, segment operating profit, and adjusted segment operating profit 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. Adjusted net earnings, adjusted EPS, EBITDA, adjusted EBITDA, segment operating profit, and adjusted segment operating profit are not intended to replace or be an alternative to net earnings, diluted EPS and earnings before income taxes, the most directly comparable amounts reported under GAAP. The table on page 47 provides a reconciliation of segment operating profit and adjusted segment operating profit to earnings before income taxes for the three months ended June 30, 2024 and 2023.
Current wording
Management believes that adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit 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. Adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit are not intended to replace or be an alternative to net earnings, diluted EPS, and earnings before income taxes, the most directly comparable amounts reported under GAAP. The table on page 43 provides a reconciliation of total segment operating profit to earnings before income taxes for the three months ended September 30, 2024 and 2023.
Previous wording
The table below provides a reconciliation of net earnings to adjusted net earnings and diluted EPS to adjusted EPS for the three months ended June 30, 2024 and 2023.
Current wording
The table below provides a reconciliation of net earnings to adjusted net earnings and diluted EPS to adjusted diluted EPS for the three months ended September 30, 2024 and 2023.
Previous wording
The tables below provide a reconciliation of net earnings to EBITDA and adjusted EBITDA for the three months ended June 30, 2024 and 2023.
Current wording
The tables below provide a reconciliation of net earnings to EBITDA and adjusted EBITDA for the three months ended September 30, 2024 and 2023 (in millions).
Previous wording
Market Factors Influencing Operations or Results in the Six Months Ended June 30, 2024
Current wording
Market Factors Influencing Operations or Results in the Nine Months Ended September 30, 2024
Previous wording
Earnings before taxes decreased $1.0 billion to $1.5 billion due to lower pricing and execution margins as well as higher corporate unallocated costs. Segment operating profit (a non-GAAP measure) decreased $0.9 billion to $2.3 billion and included a net charge of $13 million consisting of asset impairment charges totaling $13 million. Included in segment operating profit in the prior period was a net charge of $109 million consisting of charges totaling $121 million related to the impairment of certain assets, restructuring, and a contingency/settlement, partially offset by gains on the sale of certain assets of $12 million. Adjusted segment operating profit (a non-GAAP measure) decreased $1.0 billion to $2.3 billion due primarily to lower results in Crushing, Refined Products and Other, Ag Services, Human Nutrition, and Starches and Sweeteners, partially offset by higher results in Wilmar, Vantage Corn Processors, Animal Nutrition, and Other Business. Corporate unallocated results in the current period were a net charge of $0.8 billion. Corporate unallocated results in the prior period were a net charge of $0.7 billion and included a mark-to-market gain of $6 million on the conversion option of the exchangeable bonds issued in August 2020. The bonds were paid off in full, as scheduled, in August 2023.
Current wording
Total segment operating profit (a non-GAAP measure) decreased $1.5 billion to $3.2 billion due to lower results in Refined Products and Other, Ag Services, Crushing, Human Nutrition, and Vantage Corn Processors, partially offset by higher results in Wilmar, Animal Nutrition, and Starches and Sweeteners. Total segment operating profit (a non-GAAP measure) excluded asset impairment and restructuring charges totaling $517 million, driven by the impairment of $461 million of the Company’s investment in Wilmar. Excluded from total segment operating profit (a non-GAAP measure) in the year-ago period was a net charge of $180 million consisting of charges totaling $190 million related to the impairment of certain assets, restructuring, and a contingency/settlement, partially offset by gains on the sale of certain assets of $10 million.
Previous wording
Income taxes of $281 million decreased $148 million. The Company’s effective tax rate for the six months ended June 30, 2024 was 19.0% compared to 17.0% for the six months ended June 30, 2023. The increase in the rate was primarily due to the impact of discrete tax items, partially offset by the change in the geographic mix of forecasted pretax earnings.
Current wording
Income taxes decreased $266 million to $370 million. The Company’s effective tax rate for the nine months ended September 30, 2024 was 23.3% compared to 17.9% for the nine months ended September 30, 2023. The increase in the effective tax rate was primarily due to the impairment of the Company’s investment in Wilmar.
Previous wording
Processed volumes by product for the quarter were as follows (in metric tons):
Current wording
Processed volumes by product for the nine months ended September 30, 2024 and 2023 were as follows (in metric tons).
Previous wording
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall increase in oilseeds processed volumes was primarily related to improved crush rates in South America and EMEA compared to lower crush rates in the prior year due to inclement weather, unplanned downtime, and reduced capacity due to the Russian-Ukraine war. In addition, plant reliability has increased slightly year over year.
Current wording
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall increase in oilseeds processed volumes was primarily related to improved crush rates in South America and EMEA in the current period compared to lower crush rates in the year-ago period due to inclement weather, unplanned downtime, and reduced capacity due to the Russian-Ukraine war. The overall increase in processed corn volumes was primarily related to increased plant reliability in the current year period compared to lower volumes in the year-ago period due to unplanned downtime at the Decatur, Illinois plant.
Previous wording
Revenues by segment for the six months ended June 30, 2024 and 2023 were as follows:
Current wording
Revenues by segment for the nine months ended September 30, 2024 and 2023 were as follows (in millions).
Previous wording
Revenues decreased $5.2 billion to $44.1 billion due to lower sales prices ($8.5 billion), partially offset by higher sales volumes ($3.4 billion). Lower sales prices of oils, soybeans, corn, and meal, and lower sales volumes of milled rice and alcohol, were partially offset by higher sales volumes of soybeans, wheat, oils and corn. Ag Services and Oilseeds revenues decreased 10% to $34.6 billion due to lower sales prices ($7.4 billion), partially offset by higher sales volumes ($3.6 billion). Carbohydrate Solutions revenues decreased 19% to $5.6 billion due to lower sales prices ($1.2 billion) and lower sales volumes ($0.2 billion). Nutrition revenues increased 1% to $3.7 billion due to higher volumes ($0.1 billion), partially offset by lower prices ($0.1 billion).
Current wording
Revenues decreased $6.9 billion to $64.0 billion driven by lower sales prices ($12.1 billion), partially offset by higher sales volumes ($5.2 billion). Lower sales prices of oils, soybeans, corn, and meal, and lower sales volumes of farming materials and alcohol, were partially offset by higher sales volumes of soybeans, wheat, oils, sorghum and milo, and corn. Ag Services and Oilseeds revenues decreased 10% to $49.6 billion driven by lower sales prices ($10.5 billion), partially offset by higher sales volumes ($5.2 billion). Carbohydrate Solutions revenues decreased 17% to $8.5 billion driven by lower sales prices ($1.7 billion) and lower sales volumes ($38 million). Nutrition revenues increased 2% to $5.6 billion driven by higher sales volumes ($7 million) and higher sales prices ($79 million).
Previous wording
Cost of products sold decreased $4.3 billion to $41.0 billion due principally to lower average commodity costs. Manufacturing expenses decreased $0.1 billion to $3.7 billion due principally to decreases in energy costs, and operating supplies, partially offset by increases in salaries and benefits, legal, professional, and other fees, and commercial services.
Current wording
Cost of products sold decreased $5.6 billion to $59.6 billion due principally to lower average commodity costs. Manufacturing expenses increased $58 million to $5.6 billion due principally to increases in maintenance expenses due to work performed at Ag Services & Oilseeds facilities in Decatur, Illinois and Spiritwood, North Dakota, among others, increased salaries and benefits due to salary increases, higher depreciation expenses, and increased legal, professional, and other fees, partially offset by decreases in energy costs particularly driven by lower energy pricing in EMEA and operating supplies decreases within Carbohydrate Solutions.
Previous wording
Foreign currency translation decreased revenues and cost of products sold by $50 million and $32 million, respectively.
Current wording
Foreign currency translation decreased revenues by $153 million and decreased cost of products sold by $117 million.
Previous wording
Asset impairment, exit, and restructuring costs decreased $42 million to $25 million. Charges in the current period consisted of $10 million of impairments related to certain long-lived assets, and $4 million of restructuring, presented as specified items within segment operating profit, and $11 million of restructuring in Corporate unallocated. Charges in the prior period consisted of $46 million of impairments related to certain long-lived assets and intangible assets and $21 million of restructuring, presented as specified items within segment operating profit.
Current wording
Asset impairment, exit, and restructuring costs increased $386 million to $532 million. Charges in the current year period of $532 million primarily included a $461 million impairment charge related to the Company’s investment in Wilmar and a $43 million impairment charge related to discontinued animal nutrition trademarks, presented as specified items, and $12 million of restructuring costs presented within Corporate. Charges in the year-ago period consisted of $120 million of impairments related to certain long-lived assets and intangible assets and $21 million of restructuring, presented as specified items, and $5 million of restructuring costs presented within Corporate.
Showing the first 40 of 61 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
The Company’s financial results can vary significantly due to changes in factors such as fluctuations in energy prices, weather conditions, crop plantings, government programs and policies, trade policies, changes in global demand, general global economic conditions, changes in standards of living, global production of similar and competitive crops, and geopolitical developments. Due to the unpredictable nature of these and other factors, the Company undertakes no responsibility for updating any forward-looking information contained within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current report — wording carried from elsewhere
In the Carbohydrate Solutions segment, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Demand for ethanol was solid supported by the summer driving season. Strong ethanol export demand was due to higher mandates in certain jurisdictions and discretionary blending of ethanol as compared to higher priced oxygenate alternatives. Higher industry production rates kept ethanol stocks relatively unchanged.
Current report — wording carried from elsewhere
The Company is subject to a variety of market factors which affect the Company's operating results.
Current report — wording carried from elsewhere
In the Carbohydrate Solutions segment, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Strong export demand for ethanol helped offset higher industry production to minimize the imbalance between supply and demand.
Current report — wording carried from elsewhere
In the Nutrition segment, demand was softer in a few food and beverage product categories driven by shifts in consumer discretionary spend. Human Nutrition was impacted by inflation which drove lower demand and decreased volumes in alternative proteins. Demand has started to recover in the food, beverage, and dietary supplement categories. In Animal Nutrition, a soft amino acids market driven by price weakness in North America was partially offset by a slightly improved market in EMEA. The global feed market saw some modest improvement with continued price weakness of main feed ration commodities, while key livestock prices remained steady. The feed additives market was impacted by volatility on vitamins due to supply disruptions, however overall modestly improving, following the improvement in the feed sector.
Current report — wording carried from elsewhere
The Company’s objective is to have sufficient liquidity, balance sheet strength, and financial flexibility to fund the operating and capital requirements of a capital-intensive agricultural commodity-based business. The Company depends on access to credit markets, which can be impacted by its credit rating and factors outside of the Company’s control, to fund its working capital needs and capital expenditures.
Current report — wording carried from elsewhere
At September 30, 2024, the Company had a current ratio, defined as current assets divided by current liabilities, of 1.4 to 1. Included in working capital was $6.1 billion of readily marketable commodity inventories.
Current report — wording carried from elsewhere
The Company’s ratio of long-term debt to total capital (the sum of long-term debt of $7.6 billion and shareholders’ equity of $22.0 billion in 2024 and the sum of long-term debt of $8.3 billion and shareholders’ equity of $24.1 billion in 2023) was 26% and 25% at September 30, 2024 and December 31, 2023, respectively.
Current report — wording carried from elsewhere
The Company’s ratio of net debt (the sum of short-term debt of $1.7 billion, current maturities of long-term debt of $725 million, and long-term debt of $7.6 billion less the sum of cash and cash equivalents of $784 million and short-term marketable securities of none in 2024 and the sum of short-term debt of $105 million, current maturities of long-term debt of $1 million, and long-term debt of $8.3 billion less the sum of cash and cash equivalents of $1.4 billion and short-term marketable securities of none in 2023) to capital (the sum of net debt of $9.3 billion and shareholders’ equity of $22.0 billion in 2024 and the sum of net debt of $7.0 billion and shareholders' equity of $24.1 billion in 2023) was 30% and 22% at September 30, 2024 and December 31, 2023, respectively.