ADM Reports Fourth Quarter Earnings and Full-Year 2023 Results; Provides 2024 Guidance

2024-03-12

财报

CHICAGO--(BUSINESS WIRE)--ADM (NYSE: ADM) today reported financial results for the quarter and full year ended December 31, 2023.

Full-Year 2023 Highlights

Segment operating profit of $5,900 million, adjusted segment operating profit1 of $6,244 million

Trailing four-quarter average adjusted return on invested capital (ROIC)1 of 12.2%

Board Chair and CEO Juan Luciano commented, “ADM’s results speak to the resiliency of our business. Supported by our unparalleled global footprint and capabilities, we delivered another solid year of execution. Our team continues to focus on delivering high-quality products and services for our customers and is driving our productivity and innovation agenda, while generating strong cash flows that allow us to accelerate the return of cash to our shareholders.”

Fourth Quarter and Full-Year 2023 Results

4Q 2023 Results Overview

($ in millions except per share amounts)

Segment Operating Profit

EPS (as reported)

GAAP

$1,235

$1.06

vs. 4Q 2022

(23)%

(42)%

Adjusted Segment Operating Profit1

Adjusted EPS1

NON-GAAP

$1,399

$1.36

vs 4Q 2022

(16)%

(30)%

FY 2023 Results Review

($ in millions except per share amounts)

Segment Operating Profit

EPS (as reported)

GAAP

$5,900

$6.43

vs. FY 2022

(10)%

(17)%

Adjusted Segment Operating Profit1

Adjusted EPS1

NON-GAAP

$6,244

$6.98

vs FY 2022

(6)%

(11)%

1 Non-GAAP financial measures; see pages 6, 7, 8, 13 and 14 for explanations and reconciliations.

Summary of Fourth Quarter and Full Year 2023

For the fourth quarter ended December 31, 2023, earnings per share on a GAAP basis was $1.06. Segment operating profit on a GAAP basis was $1,235 million and included net charges of $171 million, or approximately $0.30 per share, related to impairments and restructuring, net of a contingent loss reversal, and a gain of $7 million related to the sale of certain assets.

Adjusted segment operating profit was $1,399 million for the fourth quarter, a 16% decrease versus the prior year period. Adjusted earnings per share were $1.36. Lower pricing and execution margins led to a decline of $0.21 per share versus the prior year period, largely reflecting the impact of lower crush and origination margins. Improved manufacturing costs, primarily related to lower input and energy costs, led to an increase of $0.18 per share versus the prior year. Lower equity earnings and cycling one-time legal recovery benefits led to a $0.34 per share decrease in the fourth quarter of 2023 versus the prior year period. Unplanned downtime at Decatur complex also negatively impacted fourth quarter EPS.

For the full year, earnings per share on a GAAP basis was $6.43. Segment operating profit on a GAAP basis was $5,900 million and included net charges of $361 million or approximately $0.56 per share related to impairments and restructuring, net of a contingent loss reversal, and a gain of $17 million or approximately $0.03 per share related to the sale of certain assets.

Adjusted segment operating profit was $6,244 million for the full year, a 6% decrease versus the prior year. Adjusted earnings per share were $6.98. Improved pricing and positive mark to market timing impacts were a $0.77 per share benefit. Overall volume declined, resulting in a $0.29 per share reduction versus the prior year. Higher manufacturing costs, partially related to unplanned downtime at the Decatur complex, led to a $0.41 per share decrease versus the prior year. Increased corporate costs related to higher interest rates and 1ADM implementation, partially offset by higher ADMIS, drove a decrease of $0.30 per share versus the prior year. Lower equity earnings, primarily related to Wilmar, attributed a $0.46 per share decrease versus the prior year. Benefits from share repurchases of $0.26 were more than offset by negative impacts of $0.20 related to a higher adjusted income tax rate, and cycling one-time benefits from the legal recovery and Biofuel Producer Recovery Program.

4Q 2023 Segment Overview

($ in millions, except where noted)

4Q 2023

4Q 20222

% Change

Adjusted Segment Operating Profit1

$1,399

$1,665

(16)%

Ag Services & Oilseeds

954

1,194

(20)%

Carbohydrate Solutions

309

277

12%

Nutrition

(10)

105

(110)%

Other

146

64%

FY 2023 Segment Overview

($ in millions, except where noted)

FY 2023

FY 20222

% Change

Adjusted Segment Operating Profit1

$6,244

$6,649

(6)%

Ag Services & Oilseeds

4,067

4,401

(8)%

Carbohydrate Solutions

1,375

1,413

(3)%

Nutrition

427

668

(36)%

Other

375

167

125%

1 Non-GAAP financial measures; see pages 6, 7, 8, 13 and 14 for explanations and reconciliations.

2 2022 Ag Services & Oilseeds, Carbohydrate Solutions, and Nutrition segment operating profits have been revised to reflect immaterial error corrections with no change to total Adjusted Segment Operating Profit. See Note 17, Segment and Geographic Information of the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2023.

Ag Services and Oilseeds Summary

AS&O segment operating profit was $954 million during the fourth quarter of 2023, down 20% compared to the prior year period. The decrease was driven by lower margins, as global grain and oilseed supplies recovered, pressuring commodity price levels. Improved volumes, primarily driven by record export volumes out of Brazil, and lower costs partially offset the impact from lower margins. Equity earnings from Wilmar were approximately 59% lower versus the prior year. The prior year period also included a $110 million legal recovery in Ag Services. During the quarter, there were approximately $35 million of net positive mark-to-market timing effects, compared to approximately $80 million of net negative impacts in the prior year quarter.

For the full year, AS&O delivered $4,067 million in segment operating profit, 8% lower than the record level in 2022. Ag Services adjusted segment operating profit was 15% lower versus the prior year, as reduced export volume and margins in North America origination were partially offset by record South American export volumes. In Global Trade, the stabilization of trade flows led to lower results compared to 2022.

Crushing segment operating profit for the full year was $346 million lower versus the prior year as improved processed volumes were more than offset by lower crush margins and higher manufacturing costs.

Refined Products and Other (RPO) results were $469 million higher for the full year, driven by higher volumes and margins in biodiesel. Market volatility drove positive timing impacts of approximately $235 million, compared to negative timing impacts of approximately $90 million in the prior year.

Equity earnings from Wilmar were $303 million in 2023, approximately 45% lower than the prior year.

4Q 2023 AS&O Overview

($ in millions, except where noted)

4Q 2023

4Q 2022

% Change

Segment Operating Profit

$954

$1,194

(20)%

Ag Services

214

417

(49)%

Crushing

389

—%

Refined Products and Other

280

214

31%

Wilmar

174

(59)%

FY 2023 AS&O Overview

($ in millions, except where noted)

FY 2023

FY 2022

% Change

Segment Operating Profit

$4,067

$4,401

(8)%

Ag Services

1,168

1,374

(15)%

Crushing

1,290

1,636

(21)%

Refined Products and Other

1,306

837

56%

Wilmar

303

554

(45)%

Carbohydrate Solutions Summary

Carbohydrate Solutions segment operating profit was $309 million during the fourth quarter of 2023, up 12% compared to the prior year period. The Starches & Sweeteners sub-segment increased $9 million, as higher pricing and lower input costs offset headwinds from lower volumes and co-product margins. In Vantage Corn Processing (VCP), results improved $23 million as strong export demand and steady domestic blending supported margins and higher ethanol production.

For the full year, Carbohydrate Solutions segment operating profit was $1,375 million, 3% lower versus the prior year. Higher starches & sweeteners pricing and mix were offset by weaker volumes and cycling one-time benefits in 2022 of $50 million related to USDA Biofuel Producer Recovery Program in VCP.

4Q 2023 Carbohydrate Solutions Overview

($ in millions, except where noted)

4Q 2023

4Q 2022

% Change

Segment Operating Profit

$309

$277

12%

Starches and Sweeteners

312

303

Vantage Corn Processors

(3)

(26)

88%

FY 2023 Carbohydrate Solutions Overview

($ in millions, except where noted)

FY 2023

FY 2022

% Change

Segment Operating Profit

$1,375

$1,413

(3)%

Starches and Sweeteners

1,329

1,376

(3)%

Vantage Corn Processors

24%

Nutrition Summary

Nutrition segment operating profit was negative $10 million during the fourth quarter of 2023, down 110% compared to the prior year period. Human Nutrition segment operating profit was negative $25 million, approximately $112 million lower versus the prior year period, as operational challenges led to lower volumes and increased manufacturing costs. The quarter also included negative impacts of $64 million related to deconsolidation and write-down of a joint venture, and an investment valuation loss. Unplanned downtime at Decatur East was also a negative impact. Animal Nutrition operating profit of $15 million was 17% lower versus the prior year, driven largely by lower amino acid margins and lower sub-segment volumes overall.

For the full year, Nutrition segment operating profit was $427 million, 36% lower versus the prior year. Human Nutrition results of $417 million were 25% lower than the prior year, as higher pricing was more than offset by weaker volumes and increased costs. The full year also included negative impacts of $64 million related to deconsolidation and write-down of a joint venture, and an investment valuation loss. Unplanned downtime at Decatur East was also a negative impact. Animal Nutrition results of $10 million were 91% lower compared to the prior year primarily driven by the normalization of amino acid margins and lower volumes.

4Q 2023 Nutrition Overview

($ in millions, except where noted)

4Q 2023

4Q 2022

% Change

Segment Operating Profit

$(10)

$105

(110)%

Human Nutrition

(25)

(129)%

Animal Nutrition

(17)%

FY 2023 Nutrition Overview

($ in millions, except where noted)

FY 2023

FY 2022

% Change

Segment Operating Profit

$427

$668

(36)%

Human Nutrition

417

557

(25)%

Animal Nutrition

111

(91)%

Other and Corporate Summary

For the fourth quarter, Other segment operating profit was $146 million, up 64% compared to the prior year period.

For the full year, Other segment operating profit was $375 million, up 125% compared to the prior year. Higher Captive Insurance results on new program premiums were partially offset by higher claim losses. ADM Investor Services results improved on higher net interest income.

In Corporate, for the full year, net interest expense increased year-over-year on higher short term interest rates. Unallocated corporate costs increased versus the prior year on higher global technology spend to support digital transformation efforts. Other Corporate was unfavorable compared to the prior year due to one-time investment valuation losses of approximately $57 million.

Outlook

The Company provided guidance for the full year 2024. ADM expects adjusted earnings per share in the range of $5.25 to $6.25 per share2, down 18% at the midpoint compared to 2023, reflecting moderating margin conditions and higher costs offsetting improved volumes.

In AS&O, global grain and oilseed supply is expected to increase as anticipated improvements in weather would support larger production levels in key South American countries. Assuming commodity prices ease from recent highs and trade flows adjust to the dislocations created over the past two years, the Company anticipates global soybean crush margin will decline in 2024, likely moving into a range of $35/Metric Ton (MT) to $60/MT. From the demand side, we continue to expect vegetable oil demand growth from renewable diesel and low single digit soybean meal demand growth to support structural margin improvement.

In Carbohydrate Solutions, we anticipate strong volumes and lower energy costs to support margin expansion in starches and sweeteners, partially offset by lower milling margins and ethanol margins, leading to slightly lower operating income versus 2023.

In Nutrition, we expect mid single digit revenue growth and operating income to be higher versus 2023.

Share Repurchase Authorization

ADM also announced the Company’s Board has authorized management to repurchase an additional $2 billion of the Company’s shares under ADM’s existing 200 million share repurchase program that runs through 2024. The Company intends to initiate this capital return expeditiously utilizing available cash on hand and intends to make approximately $1 billion of this capital return through an accelerated share repurchase (“ASR”).

As of December 31, 2023, ADM had approximately 52 million shares remaining for repurchase under its existing 200 million share program which commenced in 2015 and was then increased and extended in 2019. Since 2015, ADM has repurchased $8.6 billion of its common stock under this program.

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

Audit Committee Investigation Update

In a separate release issued today, ADM announced that it has substantially completed its previously announced investigation of intersegment transactions. Additional information will be available in ADM’s Form 10-K filing with the SEC.

Conference Call Information

ADM will host a webcast today, March 12, 2023, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.

About ADM

ADM unlocks the power of nature to enrich the quality of life. We’re a premier global human and animal nutrition company, delivering solutions today with an eye to the future. We’re blazing new trails in health and well-being as our scientists develop groundbreaking products to support healthier living. We’re a cutting-edge innovator leading the way to a new future of plant-based consumer and industrial solutions to replace petroleum-based products. We’re an unmatched agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. And we’re a leader in sustainability, scaling across entire value chains to help decarbonize our industry and safeguard our planet. From the seed of the idea to the outcome of the solution, we give customers an edge in solving the nutritional and sustainability challenges of today and tomorrow. Learn more at www.adm.com.

Cautionary Note Regarding Forward-Looking Statements

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

Non-GAAP Financial Measures

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

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

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

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

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

Financial Tables Follow

Source: Corporate Release

Source: ADM

Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP financial measure)

and Corporate Results

(unaudited)

Quarter ended

Year ended

December 31

(In millions)

2023

2022

Change

2023

2022

Change

Segment Operating Profit

1,235

1,611

(376

)

5,900

6,549

(649

)

Specified items:

(Gain) loss on sales of assets

)

(17

)

(17

)

(47

)

Impairment and restructuring charges and settlement contingencies

171

100

361

147

214

Adjusted Segment Operating Profit

1,399

1,665

(266

)

6,244

6,649

(405

)

Ag Services and Oilseeds

954

1,194

(240

)

4,067

4,401

(334

)

Ag Services

214

417

(203

)

1,168

1,374

(206

)

Crushing

389

—

1,290

1,636

(346

)

Refined Products and Other

280

214

1,306

837

469

Wilmar

174

(103

)

303

554

(251

)

Carbohydrate Solutions

309

277

1,375

1,413

(38

)

Starches and Sweeteners

312

303

1,329

1,376

(47

)

Vantage Corn Processors

)

(26

)

Nutrition

(10

)

105

(115

)

427

668

(241

)

Human Nutrition

(25

)

(112

)

417

557

(140

)

Animal Nutrition

)

111

(101

)

Other Business

146

375

167

208

Segment Operating Profit

1,235

1,611

(376

)

5,900

6,549

(649

)

Corporate Results

(501

)

(398

)

(103

)

(1,606

)

(1,316

)

(290

)

Interest expense - net

(105

)

(94

)

(11

)

(431

)

(333

)

(98

)

Unallocated corporate costs

(336

)

(299

)

(37

)

(1,144

)

(1,026

)

(118

)

Other

(58

)

(59

)

(24

)

(64

)

Specified items:

Expenses related to acquisitions

)

—

)

Gain on debt conversion option

—

)

Loss on sale of assets

—

)

Restructuring (charges) adjustment

)

Earnings Before Income Taxes

734

1,213

(479

)

4,294

5,233

(939

)

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

Consolidated Statements of Earnings

(unaudited)

Quarter ended

Year ended

December 31

2023

2022

2023

2022

(in millions, except per share amounts)

Revenues

22,978

25,939

93,935

101,556

Cost of products sold (1)

21,238

24,177

86,422

93,986

Gross profit

1,740

1,762

7,513

7,570

Selling, general, and administrative expenses (2)

919

897

3,456

3,358

Asset impairment, exit, and restructuring costs

196

342

Equity in (earnings) losses of unconsolidated affiliates

(143

)

(226

)

(551

)

(832

)

Interest and investment income

(71

)

(117

)

(499

)

(293

)

Interest expense (3)

165

134

647

396

Other (income) expense - net (4,5)

(60

)

(175

)

(176

)

(358

)

Earnings before income taxes

734

1,213

4,294

5,233

Income tax expense (benefit) (6)

192

189

828

868

Net earnings including noncontrolling interests

542

1,024

3,466

4,365

Less: Net earnings (losses) attributable to noncontrolling interests

(23

)

(17

)

Net earnings attributable to ADM

565

1,019

3,483

4,340

Diluted earnings per common share

1.06

1.84

6.43

7.71

Average diluted shares outstanding

531

554

542

563

(1)

Includes a contingency loss adjustment of $13 million related to import duties in the current quarter, and a net reversal of charges related to inventory writedowns of $5 million and a net contingency loss provision of $49 million related to import duties in the current YTD. Includes charges related to inventory writedowns in Ukraine of $3 million and $39 million in the prior-year quarter and YTD, respectively, partially offset by an insurance settlement of $2 million in the prior-year YTD.

(2)

Includes acquisition-related expenses of $1 million and $7 million in the current quarter and YTD, respectively, and a contingency loss adjustment of $8 million in the current YTD. Includes settlement contingencies of $34 million and $44 million in the prior-year quarter and YTD, respectively. Also includes acquisition-related expenses of $2 million in the prior-year YTD.

(3)

Includes (gains) losses related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $(6) million in the current YTD and $3 million and ($9) million in the prior-year quarter and YTD, respectively.

(4)

Includes net (gains) losses related to the sale of certain assets of $(7) million and $(17) million in the current quarter and YTD, respectively, and ($17) million and ($44) million in the prior-year quarter and YTD, respectively.

(5)

Includes a contingency loss adjustment of $11 million in the current quarter and YTD.

(6)

Includes the tax expense (benefit) impact of specified items and tax discrete items totaling $(11) million and $(49) million in the current quarter and YTD, respectively, and ($10) million and ($16) million in the prior-year quarter and YTD, respectively.

Summary of Financial Condition

(unaudited)

December 31,

2023

December 31,

2022

(in millions)

Net Investment In

Cash and cash equivalents

1,368

1,037

Operating working capital

9,843

11,627

Property, plant, and equipment

10,508

9,933

Investments in affiliates

5,500

5,467

Goodwill and other intangibles

6,341

6,544

Other non-current assets

2,515

2,420

36,075

37,028

Financed By

Short-term debt

105

503

Long-term debt, including current maturities

8,260

8,677

Deferred liabilities

3,245

3,232

Temporary equity

320

299

Shareholders’ equity

24,145

24,317

36,075

37,028

Summary of Cash Flows

(unaudited)

Year ended

December 31

2023

2022

(in millions)

Operating Activities

Net earnings

3,466

4,365

Depreciation and amortization

1,059

1,028

Asset impairment charges

309

(Gains) losses on sales/revaluation of assets

(115

)

Other - net

(145

)

(305

)

Other changes in operating assets and liabilities

(267

)

(1,532

)

Total Operating Activities

4,460

3,478

Investing Activities

Purchases of property, plant and equipment

(1,494

)

(1,319

)

Net assets of businesses acquired

(23

)

(22

)

Proceeds from sale of business/assets

131

Investments in affiliates

(18

)

(77

)

Other investing activities

(21

)

(113

)

Total Investing Activities

(1,496

)

(1,400

)

Financing Activities

Long-term debt borrowings

501

752

Long-term debt payments

(963

)

(482

)

Net borrowings (payments) under lines of credit

(390

)

(428

)

Share repurchases

(2,673

)

(1,450

)

Cash dividends

(977

)

(899

)

Other

(102

)

Total Financing Activities

(4,604

)

(2,499

)

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

)

—

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

(1,643

)

(421

)

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

7,033

7,454

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

5,390

7,033

Segment Operating Analysis

(unaudited)

Quarter ended

Year ended

December 31

2023

2022

2023

2022

(in ‘000s metric tons)

Processed volumes (by commodity)

Oilseeds

8,841

8,565

34,899

32,952

Corn

4,718

4,589

18,067

18,558

Total processed volumes

13,559

13,154

52,966

51,510

Quarter ended

Year ended

December 31

2023

2022

2023

2022

(in millions)

Revenues

Ag Services and Oilseeds

18,524

20,740

73,426

79,563

Carbohydrate Solutions

2,631

3,263

12,874

13,961

Nutrition

1,721

1,845

7,211

7,636

Other Business

102

424

396

Total revenues

22,978

25,939

93,935

101,556

Adjusted Earnings Per Share

A non-GAAP financial measure

(unaudited)

Quarter ended December 31

Year ended December 31

2023

2022

2023

2022

In millions

Per share

In millions

Per share

In millions

Per share

In millions

Per share

Net earnings and fully diluted EPS

565

1.06

1,019

1.84

3,483

6.43

4,340

7.71

Adjustments:

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

)

—

(13

)

(0.02

)

(12

)

(0.03

)

(33

)

(0.06

)

Impairment and restructuring charges and settlement contingencies (b)

158

0.30

0.10

310

0.57

115

0.21

Expenses related to acquisitions (c)

—

0.01

—

Gain on debt conversion option (d)

—

)

(0.01

)

(0.02

)

Tax adjustment (e)

—

0.01

Sub-total adjustments

155

0.30

0.09

302

0.55

0.14

Adjusted net earnings and adjusted EPS

720

1.36

1,069

1.93

3,785

6.98

4,421

7.85

(a)

Current quarter and YTD gain of $7 million and $17 million pretax ($5 million and $12 million after tax), respectively, was related to the sale of certain assets, tax effected using the applicable tax rates. Prior-year quarter and YTD gains of $17 million and $44 million pretax ($13 million and $33 million after tax), respectively was related to the sale of certain assets, tax effected using the applicable tax rates.

(b)

Current quarter and YTD charges of $196 million and $337 million pretax ($176 million and $287 million after tax), respectively, were related to the impairment of certain long-lived assets, goodwill, and other intangibles, and restructuring. Also included in the current quarter and YTD are contingency loss adjustments of $(11) million and $(19) million pretax ($(8) million and $(14) million after tax), respectively, and a contingency adjustment/net provision related to import duties of $(13) million and $49 million pretax ($(10) million and $37 million after tax), respectively, tax effected using the applicable tax rates. Prior-year quarter and YTD charges of $74 million and $148 million pretax ($55 million and $115 million after tax), respectively, were related to the impairment of certain assets, restructuring, and settlement contingencies, tax effected using the applicable tax rates. Prior-year YTD charges were also partially offset by an insurance settlement, tax effected using the applicable tax rate.

(c)

Current quarter and YTD expenses of $1 million and $7 million pretax ($1 million and $6 million after tax), respectively, were related to certain acquisitions, tax effected using the Company’s U.S. income tax rate. Prior-year YTD acquisition-related expenses were $2 million pretax ($1 million after tax), tax effected using the applicable tax rates.

(d)

Current YTD gain on debt conversion option of $6 million pretax ($6 million after tax) and prior-year quarter loss and YTD gain on debt conversion of $3 million and $9 million pretax ($3 million and $9 million after tax), respectively, was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020, tax effected using the applicable tax rate.

(e)

Tax expense adjustment due to certain discrete items totaling $1 million and $4 million in the current quarter and YTD, respectively, and $5 million and $7 million in the prior-year quarter and YTD, respectively.

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

Adjusted Return on Invested Capital

A non-GAAP financial measure

(unaudited)

Adjusted ROIC Earnings (in millions)

Four Quarters

Quarter Ended

Ended

Mar. 31, 2023

Jun. 30, 2023

Sep. 30, 2023

Dec. 31, 2023

Net earnings attributable to ADM

1,170

927

821

565

3,483

Adjustments:

Interest expense

100

124

109

430

Other adjustments

(12

)

130

167

361

Total adjustments

254

173

276

791

Tax on adjustments

(26

)

(52

)

(40

)

(38

)

(156

)

Net adjustments

202

133

238

635

Total Adjusted ROIC Earnings

1,232

1,129

954

803

4,118

Adjusted Invested Capital (in millions)

Quarter Ended

Trailing Four

Mar. 31, 2023

Jun. 30, 2023

Sep. 30, 2023

Dec. 31, 2023

Quarter Average

Equity (1)

24,860

24,939

25,228

24,132

24,790

+ Interest-bearing liabilities (2)

10,512

8,675

8,346

8,370

8,976

Other adjustments

(14

)

108

155

Total Adjusted Invested Capital

35,358

33,722

33,633

32,657

33,843

Adjusted Return on Invested Capital

12.2

(1)

Excludes noncontrolling interests

(2)

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

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

Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA)

A non-GAAP financial measure

(unaudited)

The tables below provide a reconciliation of net earnings to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended December 31, 2023.

Four Quarters

Quarter Ended

Ended

Mar. 31, 2023

Jun. 30, 2023

Sep. 30, 2023

Dec. 31, 2023

(in millions)

Net earnings

1,170

927

821

565

3,483

Net earnings (losses) attributable to noncontrolling interests

(23

)

(17

)

Income tax expense

225

204

207

192

828

Earnings before income taxes

1,397

1,132

1,031

734

4,294

Interest expense

100

124

109

430

Depreciation and amortization

259

262

261

277

1,059

(Gain) loss on sales of assets and businesses

)

(11

)

(17

)

Impairment and restructuring charges and settlement contingencies

117

172

367

Railroad maintenance expense

—

Expenses related to acquisitions

—

Adjusted EBITDA

1,762

1,629

1,491

1,325

6,207

Four Quarters

Quarter Ended

Ended

Mar. 31, 2023

Jun. 30, 2023

Sep. 30, 2023

Dec. 31, 2023

(in millions)

Ag Services and Oilseeds

1,301

1,143

937

1,053

4,434

Carbohydrate Solutions

358

397

546

387

1,688

Nutrition

203

237

197

695

Other Business

143

368

Corporate

(197

)

(232

)

(233

)

(316

)

(978

)

Adjusted EBITDA

1,762

1,629

1,491

1,325

6,207

Adjusted EBITDA is defined as earnings before interest, 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 interest expense on borrowings and depreciation and amortization to earnings before income taxes. Management believes that adjusted EBITDA is a useful measure of the Company’s performance because it provides investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to net earnings, the most directly comparable GAAP financial measure.