Archer-Daniels-Midland Co

The Company uses certain “non-GAAP” financial measures as defined by the SEC. 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 section.

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.

Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items as more fully described in the reconciliation tables. Adjusted diluted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items as more fully described in the reconciliation tables.

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 to exclude the impact of specified items as more fully described in the reconciliation tables.

Total segment operating profit is defined as ADM’s consolidated earnings before income taxes, adjusted for Other Business, Corporate, and specified items as more fully described in the reconciliation tables.

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 below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to adjusted net earnings (a non-GAAP measure) and diluted EPS (the most directly comparable GAAP measure) to adjusted diluted EPS (a non-GAAP measure) for the three months ended March 31, 2025 and 2024.

(1) Tax effected using the U.S. and other applicable tax rates.

The table below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to EBITDA (a non-GAAP measure) and adjusted EBITDA (a non-GAAP measure) for the three months ended March 31, 2025 and 2024 (in millions).

(1) Represents interest expense on borrowings and therefore excludes ADM Investor Services related interest expense.

(2) Excludes $3 million of accelerated depreciation recorded within restructuring charges as a specified item for the three months ended March 31, 2025.

The table below provides a reconciliation of earnings before income taxes (the most directly comparable GAAP measure) to total segment operating profit (a non-GAAP measure) for the three months ended March 31, 2025 and 2024 (in millions).

Liquidity and Capital Resources

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.

The primary source of funds to finance the Company’s operations, capital expenditures, and advancement of its growth strategy is cash generated by operations and lines of credit, including a commercial paper borrowing facility and accounts receivable securitization programs. In addition, the Company believes it has access to funds from public and private equity and debt capital markets in both U.S. and international markets.

At March 31, 2025, the Company’s capital resources included shareholders’ equity of $22.1 billion and lines of credit, including the accounts receivable securitization programs described below, totaling $12.4 billion, of which $7.6 billion was unused. Of the Company’s total lines of credit, $5.1 billion supported the combined U.S. and European commercial paper borrowing programs, against which there was $2.6 billion of commercial paper outstanding at March 31, 2025.

As of March 31, 2025, the Company had $864 million of cash and cash equivalents, $633 million of which was cash held by foreign subsidiaries whose undistributed earnings are considered indefinitely reinvested. Based on the Company’s historical ability to generate sufficient cash flows from its U.S. operations and unused and available U.S. credit capacity of $3.2 billion, the Company has asserted that these funds are indefinitely reinvested outside the U.S.

As of March 31, 2025, the Company had total available liquidity of $8.4 billion comprised of cash and cash equivalents and unused lines of credit. The Company believes that cash flows from operations, cash and cash equivalents on hand, and unused lines of credit will be sufficient to meet its ongoing liquidity requirements for at least the next twelve months.

Operating Cash Flows

Cash (used in) provided by operating activities was $(342) million and $700 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease in cash provided by operating activities was primarily driven by lower earnings for the three months ended March 31, 2025 and changes in net working capital. Changes in net working capital were driven by changes insegregated investments, payables to brokerage customers, trade receivables, inventory, and trade payables.

Segregated investments decreased $220 million compared to an increase of $159 million in the prior year quarter and brokerage payables decreased $79 million compared to an increase of $319 million in the prior year quarter, both driven by decreased customer balances in the brokerage business due to market uncertainty.

Trade receivables increased by $655 million in the current quarter compared to a decrease of $61 million in the prior year quarter, primarily driven by the timing of sales in South America.

Inventories and trade payables decreased $137 million and $423 million, respectively, compared to a decrease of $295 million and $713 million, respectively, in the prior year quarter, reflecting increased procurement in the current quarter, driven by timing and an improved harvest in South America.

Investing Cash Flows

Net cash used in investing activities was $129 million and $1.2 billion for the three months ended March 31, 2025 and 2024, respectively.

Net cash used in investing activities for the three months ended March 31, 2025 included additions to property, plant and equipment of $291 million and a business acquisition, net of cash acquired of $90 million, partially offset by proceeds from sales of marketable securities of $248 million.

Net cash used in investing activities for the three months ended March 31, 2024 included additions to property, plant and equipment of $328 million and business acquisitions, net of cash acquired of $915 million.

Financing Cash Flows

Net cash provided by (used in) in financing activities was $587 million and $(2) million for the three months ended March 31, 2025 and 2024, respectively.

Net cash provided by financing activities for the three months ended March 31, 2025 and March 31, 2024 included net borrowings under short-term credit agreements of $863 million and $1.6 billion, respectively.

No share repurchases were made in the three months ended March 31, 2025. Share repurchases for the three months ended March 31, 2024 were $1.3 billion.

Dividends paid for the three months ended March 31, 2025 and 2024 were $247 million and $257 million, respectively.

Financial Ratios

At March 31, 2025, the Company had a current ratio, defined as current assets divided by current liabilities, of 1.4 to 1. Included in working capital at March 31, 2025 was $7.0 billion of readily marketable commodity inventories.

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 $22.1 billion at March 31, 2025 and the sum of long-term debt of $7.6 billion and shareholders’ equity of $22.2 billion at December 31, 2024) was 26% and 25% at March 31, 2025 and December 31, 2024, respectively.

The Company’s ratio of net debt (the sum of short-term debt of $2.8 billion, current maturities of long-term debt of $704 million, and long-term debt of $7.6 billion less the sum of cash and cash equivalents of $864 million and short-term marketable securities of $33 million at March 31, 2025 and the sum of short-term debt of $1.9 billion, current maturities of long-term debt of $674 million, and long-term debt of $7.6 billion less the sum of cash and cash equivalents of $611 million and short-term marketable securities of $246 million at December 31, 2024) to capital (the sum of net debt of $10.2 billion and shareholders’ equity of $22.1 billion at March 31, 2025 and the sum of net debt of $9.3 billion and shareholders' equity of $22.2 billion at December 31, 2024) was 31% and 30% at March 31, 2025 and December 31, 2024, respectively.

Stock Repurchase Program

On March 12, 2024, the Company entered into an accelerated share repurchase (“ASR”) transaction agreement with Merrill Lynch International, an affiliate of BofA Securities, Inc., to repurchase $1.0 billion of ADM common stock as part of ADM’s existing share repurchase program.

On March 28, 2024, the Company received an interim delivery of 8,880,986 shares at an average share price of $60.596, or $538 million in aggregate. On April 15, 2024, the Company received a final delivery of 7,325,733 shares at an average share price of $63.045, or $462 million in aggregate, as final settlement of the ASR transaction.

On December 11, 2024, the Company's Board of Directors approved a second extension of the stock repurchase program through December 31, 2029 and the repurchase of up to an additional 100 million shares under the extended program. As of March 31, 2025, the Company had 115 million remaining shares under its share repurchase program until December 31, 2029.

Accounts Receivable Securitization Program

The Company has accounts receivable securitization programs (the “Programs”) with certain commercial paper conduit purchasers and committed purchasers. The Programs provide the Company with up to $2.9 billion in funding against accounts receivable transferred into the Programs and expands the Company’s access to liquidity through efficient use of its balance sheet assets (see Note 15. Sale of Accounts Receivable within “Notes to Consolidated Financial Statements” included in Item 1 herein, “Consolidated Financial Statements” for further information). As of March 31, 2025, the Company had $813 million unused capacity of its facility under the Programs.

Contractual Obligations and Commercial Commitments

The Company’s purchase obligations as of March 31, 2025 and December 31, 2024 were $14.2 billion and $12.4 billion, respectively. As of March 31, 2025, the Company expects to make payments related to purchase obligations of $11.6 billion within the next twelve months. There were no other material changes in the Company’s contractual obligations during the three months ended March 31, 2025.

Critical Accounting Estimates

There were no material changes in the Company’s critical accounting estimates during the three months ended March 31, 2025. For a description of the Company’s critical accounting estimates and assumptions used in the preparation of the Company’s financial statements, see Part II. Item 7 and Note 1 of “Notes to Consolidated Financial Statements” included in Part II. Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.