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 years ended December 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 years ended December 31, 2025 and 2024 (in millions).

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

(2) Excludes $20 million of accelerated depreciation recorded within restructuring charges as a specified item for the year ended December 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 years ended December 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 December 31, 2025, the Company’s capital resources included shareholders’ equity of $22.7 billion and lines of credit, including the accounts receivable securitization programs described below, totaling $12.3 billion, of which $9.4 billion was unused. Of the Company’s total lines of credit, $5.1 billion supported the commercial paper borrowing programs, against which there was $715 million of commercial paper outstanding at December 31, 2025.

As of December 31, 2025, the Company had $1.0 billion of cash and cash equivalents, $312 million of which is 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 $5.1 billion, the Company has asserted these funds are indefinitely reinvested outside the U.S.

As of December 31, 2025, the Company has total available liquidity of $10.4 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

Net cash provided by operating activities was $5.5 billion, $2.8 billion, and $4.5 billion for the years ended December 31, 2025, 2024, and 2023, respectively.

The increase in cash provided by operating activities in 2025 compared to 2024 was due to changes in net working capital, partially offset by lower earnings in the current year. Changes in net working capital were driven by changes in inventory, payables to brokerage customers and segregated investments, partially offset by changes in accrued expenses and other payables.

Changes in inventories resulted in cash inflow of $1.5 billion in the current year reflecting lower commodity pricing and reductions driven by working capital reduction initiatives, compared to an inflow of $162 million in the prior-year, reflecting lower commodity pricing.

Changes in payables to brokerage customers resulted in cash inflow of $1.1 billion in the current year compared to an outflow of $78 million in the prior year. The inflow in the current year is driven by increased trading activity in the Company’s futures commission and brokerage business.

Change in segregated investments resulted in an outflow of $43 million in the current year compared to an outflow of $693 million in the prior year, driven by brokerage customer trading activity.

Changes in accrued expenses and other payables resulted in an outflow of $823 million in the current year period compared to an outflow of$276 million in the prior year period, primarily driven by the valuation of derivative contracts.

Investing Cash Flows

Net cash used in investing activities was $1.0 billion, $2.7 billion, and $1.5 billion for the years ended December 31, 2025, 2024, and 2023, respectively.

Net cash used in investing activities for the year ended December 31, 2025 primarily included additions to property, plant and equipment of $1.2 billion, business acquisitions, net of cash acquired of $108 million, proceeds from sales of marketable securities of $277 million, and proceeds from sales of assets, businesses and investments of $111 million.

Net cash used in investing activities for the year ended December 31, 2024 included additions to property, plant and equipment of $1.6 billion, businesses acquired, net of cash acquired of $927 million and purchase of marketable securities of $308 million.

Financing Cash Flows

Net cash used in financing activities was $2.9 billion, $1.5 billion, and $4.6 billion for the years ended December 31, 2025, 2024, and 2023, respectively.

In the year ended December 31, 2025, the Company repaid in full €650 million of 1.000% notes, previously included within Current maturities of long-term debt.

Net cash used in financing activities for the year ended December 31, 2025 and 2024 included net repayments for short-term credit agreements of $1.1 billion and net borrowings of $1.8 billion, respectively.

Dividends paid for the years ended December 31, 2025, 2024, and 2023 were $987 million, $985 million, and $977 million, respectively.

No share repurchases were made in the twelve months ended December 31, 2025. Cash paid for share repurchases for the year ended December 31, 2024 was $2.3 billion. As of December 31, 2025, the Company had 115 million shares remaining that may be repurchased under its stock repurchase program until December 31, 2029.

Credit Ratings

As of December 31, 2025, the three major credit rating agencies maintained the Company’s credit ratings at investment grade levels with a negative outlook.

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 $3.0 billion in funding against accounts receivable transferred into the Programs and expand the Company’s access to liquidity through efficient use of its balance sheet assets (see Part II. Item 8. Note 19. Sale of Accounts Receivable for more information and disclosures on the Programs). As of December 31, 2025, the Company utilized $2.1 billion of its facility under the Programs.

Contractual Obligations and Commercial Commitments

In 2026, the Company expects capital expenditures of approximately $1.4 billion and dividend payments of $1.0 billion, subject to other strategic uses of capital and the evolution of operating cash flows and the working capital position throughout the year. The Company’s other material cash requirements within the next 12 months include current maturities of long-term debt of $1.0 billion, interest payments of $527 million, operating lease payments of $357 million, and pension, other postretirement, and defined contribution plan contributions of $119 million.

The Company’s purchase obligations as of December 31, 2025 and 2024 were $13.8 billion and $12.4 billion, respectively. The increase is primarily related to an increase in obligations for commodities. As of December 31, 2025, the Company expects to make payments related to purchase obligations of $12.5 billion within the next twelve months. The Company expects to make payments related to debt and interest, operating leases, purchase obligations and other material cash requirements beyond the next twelve months of approximately $15.3 billion.

The Company’s credit facilities and certain debentures require the Company to comply with specified financial and non-financial covenants including maintenance of minimum tangible net worth as well as limitations related to incurring liens, secured debt, and certain other financing arrangements. The Company was in compliance with these covenants as of December 31, 2025.

Critical Accounting Estimates

The process of preparing financial statements requires management to make estimates and judgments that affect the carrying values of the Company’s assets and liabilities as well as the recognition of revenues and expenses. These estimates and judgments are based on the Company’s historical experience and management’s knowledge and understanding of current facts and circumstances.

Certain of the Company’s accounting estimates are considered critical, as these estimates are important to the depiction of the Company’s financial statements and require significant or complex judgment by management. Critical accounting estimates are those estimates made in accordance with GAAP which involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on ADM’s financial condition and results of operations.

Management has discussed with the Company’s Audit Committee the development, selection, disclosure, and application of these critical accounting estimates. Following are the accounting estimates management considers critical to the Company’s financial statements.

Fair Value Measurements - Inventories and Commodity Derivatives

Description: Certain of the Company’s inventory, inventory-related payables, and commodity derivative assets and liabilities as of December 31, 2025 are valued at estimated fair values, including $6.2 billion of merchandisable agricultural commodity inventories, $822 million of commodity derivative assets, $613 million of commodity derivative liabilities, and $730 million of inventory-related payables. Commodity derivative assets and liabilities include forward purchase and sales contracts for agricultural commodities. Merchandisable agricultural commodities are freely traded, have quoted market prices, and may be sold without significant additional processing.

Judgments and Uncertainties: Management estimates fair value for its commodity-related assets and liabilities based on exchange-quoted prices, adjusted for differences in local markets. The Company’s inventory, inventory-related payables, and commodity derivative fair value measurements are mainly based on observable market quotations without significant adjustments and are therefore reported as Level 2 within the fair value hierarchy. Level 3 fair value measurements of approximately $3.2 billion of assets and $329 million of liabilities represent fair value estimates where unobservable price components represent 10% or more of the total fair value price. For more information concerning amounts reported as Level 3, see Part II. Item 8. Note 4. Fair Value Measurements.

Sensitivity of Estimate to Change: Changes in the market values of these inventories and commodity contracts are recognized in the Consolidated Statements of Earnings as a component of cost of products sold. If management used different methods or factors to estimate market value, amounts reported could differ materially. Additionally, if market conditions change subsequent to year-end, amounts reported in future periods could differ materially.

Income Taxes

Description: The Company accounts for income taxes in accordance with the applicable accounting standards which prescribe a minimum threshold a tax position is required to meet before being recognized in the Consolidated Financial Statements. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

Judgments and Uncertainties: ADM calculates its provision for income taxes based on the statutory tax rates and tax attributes available to the Company in the various jurisdictions in which it operates. The Company uses judgment in evaluating the Company’s tax positions and determining its annual tax provision.

Sensitivity of Estimate to Change: While ADM considers all of its tax positions fully supportable, the Company faces challenges from U.S. and foreign tax authorities regarding the amount of taxes due. The Company recognizes a tax position in its Consolidated Financial Statements when it is determined to be more likely than not to be sustained upon examination, based on its technical merits. The position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

Business Combinations

Description: The Company’s acquisitions are accounted for in accordance with Accounting Standards Codification (ASC) Topic 805, Business Combinations, as amended. The consideration transferred is allocated to various assets acquired and liabilities assumed at their estimated fair values as of the acquisition date with the residual allocated to goodwill.

Judgments and Uncertainties: Fair values allocated to assets acquired and liabilities assumed in business combinations require management to make significant judgments, estimates, and assumptions, especially with respect to intangible assets. Management makes estimates of fair values based upon assumptions it believes to be reasonable. These estimates are based upon historical experience and information obtained from the management of the acquired companies and are inherently uncertain. The estimated fair values related to intangible assets primarily consist of customer relationships, trademarks, and developed technology which are determined primarily using discounted cash flow models. Estimates in the discounted cash flow models include, but are not limited to, certain assumptions that form the basis of the forecasted results (e.g. revenue growth rates, customer attrition rates, and royalty rates). These significant assumptions are forward looking and could be affected by future economic and market conditions.

Sensitivity of Estimate to Change: During the measurement period, which may take up to one year from the acquisition date, adjustments due to changes in the estimated fair value of assets acquired and liabilities assumed may be recorded as adjustments to the consideration transferred and related allocations. Upon the conclusion of the measurement period or the final determination of the values of assets acquired and liabilities assumed, whichever comes first, any such adjustments are charged to the Consolidated Statements of Earnings.

Goodwill Impairment

Description: Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired. At December 31, 2025, the Company had goodwill of $4.8 billion. The Company evaluates goodwill for impairment at the reporting unit level annually on October 1 or more frequently whenever there are indicators that the carrying value may not be fully recoverable, utilizing either the qualitative or quantitative testing method. The Company has seven reporting units with goodwill identified at one level below the operating segment using the criteria in ASC 350, Intangibles - Goodwill and Other (Topic 350). Two reporting units do not have any recorded goodwill. During the year ended December 31, 2025, the Company evaluated goodwill for impairment using a qualitative assessment for six reporting units and using a quantitative assessment for the Animal Nutrition reporting unit. See Part II. Item 8. Note 9. Goodwill and Other Intangible Assets for further information.

Judgments and Uncertainties: The Company has the option to first qualitatively assess factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company elects not to use this option, or it is determined that qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the reporting unit is less than its carrying value, or it is determined from the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. As part of the Company’s impairment analysis, the fair value of a reporting unit is generally determined using both the income and market approaches. Critical estimates in the determination of the fair value, when using a discounted cash flow analysis, of each reporting unit require management to make assumptions including, but not limited to, future expected cash flows of the reporting unit utilizing appropriate revenue growth, EBITDA margins, and discount rates. A decline in the actual cash flows of a reporting unit in future periods, as compared to the projected cash flows used in the discounted cash flow analysis, could result in the carrying value of the reporting unit exceeding its fair value. Further, a change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates.

Sensitivity of Estimate to Change: The estimated fair value of the Animal Nutrition reporting unit was evaluated to be approximately 15% in excess of its carrying value and no impairment was recorded.

The Company used a combination of the income and market approaches when performing the quantitative assessment of goodwill for the Animal Nutrition reporting unit. The Company weighted the income approach with a probability weight of 75%, as it is based on the future business plans and growth estimates for the Company’s Animal Nutrition business and thus considers short-term and long-term cash flow expectations for the business. The market approach was weighted at 25%, as it represents an estimate of fair value based on market guideline companies for which future growth expectations are not precisely known. The income approach is predicated upon the value of the estimated future cash flows that a business will generate going forward. The Company used the Discounted Cash Flow (DCF) method under the income approach for the analysis of Animal Nutrition. The market approach assumes that companies operating in the same industry will share similar characteristics and that values will correlate to those characteristics. Therefore, under the market approach, a comparison of the reporting unit to similar companies whose financial information is publicly available may provide a reasonable basis to estimate the fair value of the reporting unit. The two forms of the market approach most commonly applied are the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method. The Company utilized the GPC method to estimate the fair value of the Animal Nutrition reporting unit under the market approach. The GMAC method was also considered, but ultimately was not relied upon due to the lack of recent transactions that were directly comparable. In the selection of the appropriate market multiples, the Company considered the performance of the business, the size, risks, opportunities, and a comparison of the margins and growth of the Animal Nutrition business compared to the guideline public companies. The estimated fair value calculated by the GPC method was within 10% of the estimated fair value calculated by the income approach.

The Company performed a sensitivity analysis for the significant assumptions used in the goodwill impairment testing analysis for the Animal Nutrition reporting unit. The sensitivities were calculated in isolation using the income approach and keeping all other assumptions constant. The sensitivities for revenue growth and EBITDA margins do not consider the offsetting impact of a lower discount rate assumption to reflect the reduced risk in estimated future cash flow growth used under the income approach or the related impacts on pricing multiples used under the market approach.

As of December 31, 2025, goodwill allocated to the Animal Nutrition reporting unit totaled $958 million. For Animal Nutrition reporting unit impairment testing, below are certain hypotheticals where a change would result in an impairment:

–Increase to the discount rate of approximately 175 basis points would result in a goodwill impairment of approximately $29 million;

–Decrease to forecasted EBITDA margins of approximately 150 basis points would result in goodwill impairment of approximately $69 million

–Decrease in the forecasted revenue growth rate of approximately 290 basis points would result in goodwill impairment of approximately $1 million.; and

–Increase in the expected capital expenditures as a percentage of revenue over the entire forecast of approximately 100 basis points would result in a goodwill impairment of approximately $181 million.

Investments in Affiliates

Description: The Company applies the equity method of accounting for investments over which the Company has the ability to exercise significant influence, including its 22.5% investment in Wilmar. These investments in affiliates are carried at cost plus equity in undistributed earnings and are adjusted, where appropriate, for amortizable basis differences between the investment balance and the underlying net assets of the investee. Generally, the minimum ownership threshold for asserting significant influence is 20% ownership of the investee. However, the Company considers all relevant factors in determining its ability to assert significant influence including but not limited to, ownership percentage, board membership, customer and vendor relationships, and other arrangements.

Judgments and Uncertainties: The Company has evaluated its investments in affiliates as of December 31, 2025 to be appropriately stated at carrying values. The Company also periodically compares the book value of its investment in Wilmar against its market value as determined through quoted market prices, and evaluates for any potential other-than-temporary impairment. The Company’s investment in Wilmar had a carrying value of $4.0 billion as of December 31, 2025, and a market value of $3.4 billion based on the quoted Singapore Exchange market price, converted to U.S. dollars at the applicable exchange rate, at December 31, 2025. The Company evaluated several factors in its determination of whether an other-than-temporary impairment had occurred. This included consideration of the severity and duration of the carrying value being above Wilmar's stock price, the recent performance of Wilmar’s stock price as quoted on the Singapore Exchange, including stock price performance subsequent to the balance sheet date, Wilmar's financial condition and near-term performance prospects, latest consensus analyst forecasts, Wilmar’s long history of earnings and dividends and the Company’s continued representation on Wilmar’s Board. The Company considers its investment in Wilmar a significant and strategic relationship and has the intent and ability to retain its investment in Wilmar for a period of time sufficient to allow for any anticipated recovery in market value. Based on the evaluation of the factors above, the Company does not consider the investment to be other-than temporarily impaired at December 31, 2025.

Sensitivity of Estimate to Change: The performance of impairment tests involves the use of estimates and assumptions, which may change period to period. If the Company used different assumptions in the evaluation of its equity method investments, including its investment in Wilmar, the Company may conclude that investments are other-than-temporarily impaired.

Recent accounting pronouncements

See “New Accounting Pronouncements Not Yet Adopted” within Note 1. Summary of Significant Accounting Policies, to the Consolidated Financial Statements included in Part II. Item 8 for information regarding recent accounting pronouncements.