# Archer-Daniels-Midland Co: Form 10-Q for the period ended Sep 30, 2024

- Company: [Archer-Daniels-Midland Co](/companies/adm.md) (CIK 7084)
- Form: 10-Q
- Filed: 2024-11-18
- Accepted by EDGAR: Nov 18, 2024, 21:05 ET
- Period: 2024-09-30
- Accession: 0000007084-24-000054
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/7084/000000708424000054/adm-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/7084/000000708424000054/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $5.99bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $18.09bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $18.57bn | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $59.61bn | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-07-01 to 2024-09-30 | $1.36bn | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-01-01 to 2024-09-30 | $4.42bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $905.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $2.76bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $174.0m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $527.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $90.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $370.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $18.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $1.23bn | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.04 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $2.48 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $0.04 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $2.49 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 483,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 497,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $2.47bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $1.07bn | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $744.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $2.33bn | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-09-30 | $784.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $26.63bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $52.20bn | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $19.00bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-09-30 | $7.58bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-09-30 | $725.0m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2024-09-30 | $1.73bn | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-09-30 | $21.98bn | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 65,585 characters.

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.

### Restatement of Previously Issued Consolidated Financial Statements

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.

### Company Overview

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.

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”.

ADM’s recent significant portfolio actions and announcements include:

- 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.

Sustainability is a key driver in ADM’s expanding portfolio of environmentally responsible, plant-derived products. Consumers today increasingly expect their food and drink to come from sustainable ingredients, produced by companies that share their values, and ADM is continually finding new ways to meet those needs through its portfolio actions.

The Company’s strategic transformation is focused on three strategic pillars: Productivity, Innovation, and Culture.

The Productivity pillar includes (1) partnering across various global teams including procurement, supply chain, operations, and commercial to optimize costs and improve production volumes across the enterprise; (2) continued roll out of the 1ADM business transformation program and implementation of improved standardized business processes; and (3) increased use of technology, data analytics, and automation at production facilities, in offices, and with customers to improve efficiencies and customer service.

The Innovation pillar includes expansions and investments in (1) improving the customer experience by leveraging producer relationships and enhancing the use of state-of-the-art digital technology; (2) sustainability-driven innovation, which encompasses the full range of products, solutions, capabilities, and commitments to serve customers’ needs; and (3) growth initiatives, including organic growth with additional capacity to meet growing market demand and strategic objectives.

The Culture pillar focuses on building capabilities and enabling collaboration, teamwork, and agility from process standardization and digitalization and ADM’s diversity, equity, and inclusion initiatives, which bring new perspectives and expertise to the Company’s decision-making.

ADM plans to support the three pillars with investments in technology, which include expanding digital capabilities and investing further in research and development.

#### Environmental and Social Responsibility

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.

The Company’s environmental goals, collectively called “Strive 35” – an ambitious plan to, by 2035, reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 25 percent from a 2019 baseline, reduce Scope 3 emissions by 25% from a 2021 baseline, reduce energy intensity by 15 percent from a 2019 baseline, reduce water intensity by 10 percent from a 2019 baseline, and achieve a 90 percent landfill diversion rate. In 2023, ADM refined two of its Strive 35 commitments to more meaningfully drive progress: ADM aims to reduce its absolute water withdrawal by 10%, from a 2019 baseline, by 2035, and ADM aims to increase its use of low-carbon energy sources to 25% of total energy used by 2035.

#### Operating Performance Indicators

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.

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.

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.

The Company has consolidated subsidiaries in more than 70 countries. For the majority of the Company’s subsidiaries located outside the United States, the local currency is the functional currency except for certain significant subsidiaries in Switzerland where Euro is the functional currency, and Brazil and Argentina where U.S. dollar is the functional currency. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at the weighted average exchange rates for the applicable periods. For the majority of the Company’s business activities in Brazil and Argentina, the functional currency is the U.S. dollar; however, certain transactions, including taxes, occur in local currency and require remeasurement to the functional currency. Changes in revenues are expected to be correlated to changes in expenses reported by the Company caused by fluctuations in the exchange rates of foreign currencies, primarily the Euro, British pound, Canadian dollar, and Brazilian real, as compared to the U.S. dollar. Effective April 1, 2022, the Company changed the functional currency of its Turkish entities to the U.S. dollar which did not and is not expected to have a material impact on the Company’s Consolidated Financial Statements.

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.

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.”

### Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

#### Market Factors Influencing Operations or Results in the Three Months Ended September 30, 2024

The Company is subject to a variety of market factors which affect the Company's operating results.

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.

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.

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.

#### Analysis of Results of Operations

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.

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.

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.

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.

Processed volumes by product for the three months ended September 30, 2024 and 2023 were as follows (in metric tons).

*(In thousands)*

|  | Three Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Oilseeds | **8,410** | 8,648 | (238) |
| Corn | **4,943** | 4,507 | 436 |
| Total | **13,353** | 13,155 | 198 |

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.

Revenues by segment for the three months ended September 30, 2024, were as follows (in millions).

| Ag Services and Oilseeds | Three Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Ag Services | **$9,653** | $10,198 | $(545) |
| Crushing | **2,869** | 3,352 | (483) |
| Refined Products and Other | **2,567** | 2,929 | (362) |
| Total Ag Services and Oilseeds | **15,089** | 16,479 | (1,390) |
| Carbohydrate Solutions |  |  |  |
| Starches and Sweeteners | **2,192** | 2,448 | (256) |
| Vantage Corn Processors | **716** | 877 | (161) |
| Total Carbohydrate Solutions | **2,908** | 3,325 | (417) |
| Nutrition |  |  |  |
| Human Nutrition | **1,004** | 900 | 104 |
| Animal Nutrition | **827** | 884 | (57) |
| Total Nutrition | **1,831** | 1,784 | 47 |
| Total Segment Revenues | **19,828** | 21,588 | (1,760) |
| Other Business | **109** | 107 | 2 |
| Total Revenues | **$19,937** | $21,695 | $(1,758) |

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.

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).

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.

Foreign currency translation decreased revenues by $102 million and decreased cost of products sold by $86 million.

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.

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.

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.

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.

Interest and investment income decreased $15 million to $137 million driven by lower interest income for ADM Investor Services due to lower customer balances.

Interest expense increased $19 million to $174 million driven by the increased use of the Company’s commercial paper borrowing programs.

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.

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).

|  | Three Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| **Earnings before income taxes** | **$108** | $1,031 | $(923) |
| Other Business (earnings) loss | **17** | (46) | 63 |
| Corporate | **409** | 390 | 19 |
| Specified Items: |  |  |  |
| (Gain) loss on sale of assets | **(1)** | 2 | (3) |
| Impairment and restructuring charges | **504** | 69 | 435 |
| **Total Segment Operating Profit** | **$1,037** | $1,446 | $(409) |
| **Segment Operating Profit** |  |  |  |
| Ag Services and Oilseeds |  |  |  |
| Ag Services | **$107** | $226 | $(119) |
| Crushing | **187** | 250 | (63) |
| Refined Products and Other | **124** | 337 | (213) |
| Wilmar | **62** | 35 | 27 |
| Total Ag Services and Oilseeds | **$480** | $848 | $(368) |
| Carbohydrate Solutions |  |  |  |
| Starches and Sweeteners | **$455** | $403 | $52 |
| Vantage Corn Processors | **(3)** | 65 | (68) |
| Total Carbohydrate Solutions | **$452** | $468 | $(16) |
| Nutrition |  |  |  |
| Human Nutrition | **$86** | $118 | $(32) |
| Animal Nutrition | **19** | 12 | 7 |
| Total Nutrition | **$105** | $130 | $(25) |

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.

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.

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.

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.

Corporate results for the three months ended September 30, 2024 and 2023 were as follows (in millions).

|  | Three Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Interest expense-net | **(113)** | $(98) | $(15) |
| Unallocated corporate function costs | **(306)** | (298) | $(8) |
| Expenses related to acquisitions | **—** | (3) | 3 |
| Restructuring charges | **—** | (2) | 2 |
| Other income — net | **10** | 11 | (1) |
| Total Corporate | **$(409)** | **$(390)** | **$(19)** |

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.

#### Non-GAAP Financial Measures

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.

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.

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.

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.

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.

*In millions*

*In millions*

|  | Three Months Ended September 30, 2024 | Per share | 2023 | Per share |
| --- | ---: | ---: | ---: | ---: |
| Average number of shares outstanding - diluted | **483** |  | 540 |  |
| **Net earnings and reported EPS (fully diluted)** | **$18** | **$0.04** | $821 | $1.52 |
| Adjustments: |  |  |  |  |
| (Gain) Loss on sale of assets and businesses | **(1)** | **—** | 2 | — |
| Impairment and restructuring charges and contingency provisions - net of tax of $4 million in 2024 and $17 million in 2023 (1) | **500** | **1.03** | 54 | 0.10 |
| Expenses related to acquisitions | **—** | **—** | 3 | 0.01 |
| Certain discrete tax adjustments | **13** | **0.02** | — | — |
| Total adjustments | **512** | **1.05** | 59 | 0.11 |
| **Adjusted net earnings and adjusted diluted EPS** | **$530** | **$1.09** | $880 | $1.63 |

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

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).

|  | Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net earnings | **$18** | $821 |
| Net earnings (losses) attributable to noncontrolling interests | — | 3 |
| Income tax expense | 90 | 207 |
| Interest expense | 124 | 97 |
| Depreciation and amortization | 288 | 261 |
| EBITDA | **520** | 1,389 |
| (Gain) loss on sales of assets and businesses | (1) | 2 |
| Expenses related to acquisitions | **—** | 3 |
| Railroad maintenance expenses | 28 | 26 |
| Impairment and restructuring charges and contingency provisions | 504 | 71 |
| Adjusted EBITDA | **$1,051** | $1,491 |

46

### Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

#### Market Factors Influencing Operations or Results in the Nine Months Ended September 30, 2024

The Company is subject to a variety of market factors which affect the Company's operating results.

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.

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.

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.

#### Analysis of Results of Operations

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 .

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.

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.

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.

Processed volumes by product for the nine months ended September 30, 2024 and 2023 were as follows (in metric tons).

*(In thousands)*

|  | Nine Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Oilseeds | **26,669** | 26,058 | 611 |
| Corn | **13,833** | 13,349 | 484 |
| Total | **40,502** | 39,407 | 1,095 |

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.

Revenues by segment for the nine months ended September 30, 2024 and 2023 were as follows (in millions).

| Ag Services and Oilseeds | Nine Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Ag Services | **$32,597** | $35,259 | $(2,662) |
| Crushing | **9,046** | 10,515 | (1,469) |
| Refined Products and Other | **7,999** | 9,128 | (1,129) |
| Total Ag Services and Oilseeds | **49,642** | 54,902 | (5,260) |
| Carbohydrate Solutions |  |  |  |
| Starches and Sweeteners | **6,559** | 7,660 | (1,101) |
| Vantage Corn Processors | **1,925** | 2,583 | (658) |
| Total Carbohydrate Solutions | **8,484** | 10,243 | (1,759) |
| Nutrition |  |  |  |
| Human Nutrition | **3,029** | 2,802 | 227 |
| Animal Nutrition | **2,546** | 2,688 | (142) |
| Total Nutrition | **5,575** | 5,490 | 85 |
| Total Segment Revenues | **63,701** | 70,635 | (6,934) |
| Other Business | **331** | 322 | 9 |
| Total Revenues | **$64,032** | $70,957 | $(6,925) |

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, management believes that margins can be a helpful indicator of the Company’s underlying performance because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from commodity price changes, which generally result in an insignificant impact to gross profit.

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).

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.

Foreign currency translation decreased revenues by $153 million and decreased cost of products sold by $117 million.

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.

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.

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.

Equity in earnings of unconsolidated affiliates increased $90 million to $498 million driven by higher earnings from the Company’s investments in Wilmar, Almidones Mexicanos S.A., Skyland Grain, LLC, and Hungrana Kft., partially offset by lower earnings from ADM’s investments in Olenex Sarl and Stratas Foods LLC.

Interest and investment income decreased $28 million to $400 million driven by a valuation loss related to an investment in alternative protein and precision fermentation and lower interest rates for ADM Investor Services, partially offset by higher interest income within Corporate driven by higher interest rates and balances within money-market accounts.

Interest expense increased $45 million to $527 million driven by increased use of the Company’s commercial paper borrowing programs.

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.

Total segment operating profit (a non-GAAP measure) is reconciled to earnings before income taxes, the most directly comparable GAAP measure, for the nine months ended September 30, 2024 and 2023 as follows (in millions).

|  | Nine Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| **Earnings before income taxes** | **$1,588** | $3,560 | $(1,972) |
| Other Business (earnings) loss | **(200)** | (229) | 29 |
| Corporate | **1,254** | 1,105 | 149 |
| Specified Items: |  |  |  |
| (Gain) loss on sale of assets | **(1)** | (10) | 9 |
| Impairment and restructuring charges | **517** | 190 | 327 |
| **Total Segment Operating Profit** | **$3,158** | $4,616 | $(1,458) |
| **Segment Operating Profit** |  |  |  |
| Ag Services and Oilseeds |  |  |  |
| Ag Services | **$461** | $954 | $(493) |
| Crushing | **632** | 901 | (269) |
| Refined Products and Other | **431** | 1,026 | (595) |
| Wilmar | **279** | 232 | 47 |
| Total Ag Services and Oilseeds | **$1,803** | $3,113 | $(1,310) |
| Carbohydrate Solutions |  |  |  |
| Starches and Sweeteners | **$1,039** | $1,017 | $22 |
| Vantage Corn Processors | **18** | 49 | (31) |
| Total Carbohydrate Solutions | **$1,057** | $1,066 | $(9) |
| Nutrition |  |  |  |
| Human Nutrition | **$265** | $441 | $(176) |
| Animal Nutrition | **33** | (4) | 37 |
| Total Nutrition | **$298** | $437 | $(139) |

In the Ag Services and Oilseeds segment, segment operating profit decreased 42%. Ag Services results are down from the prior-year period. South America Origination margins decreased 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 America Origination continues to see weak export demand and a carry market has contributed to slow farmer selling limiting trade opportunities. Execution in destination marketing as well as effective risk management continued to deliver strong Global Trade results though lower than the prior year period. Crushing results were lower than the prior-year period, particularly in North America. Increased industry capacity pressured Crush margins and increased supply of competing low carbon intensity feedstocks affected margins. 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. RPO results were down from the year-ago period. North America margins compressed due to increased used cooking oil imports. Europe biodiesel benefited from high spot margins due to supply shortage. Wilmar earnings were higher versus the prior-year period.

In the Carbohydrate Solutions segment, segment operating profit decreased 1%. Starches and Sweeteners results were higher year-over-year driven by improved cost position on higher utilization rates, higher joint-venture earnings, and $47 million of insurance proceeds for the partial settlement of the Decatur West insurance claims related to an incident that occurred in 2023. Increased profits were offset by lower margins, driven by moderating margins in the EMEA region and in North American wheat and lower domestic ethanol margins due to strong industry production. Vantage Corn Processors results declined year-over-year as decreased pricing of ethanol led to lower margins.

In the Nutrition segment, segment operating profit decreased 32%. Human Nutrition results were lower than the prior-year period, as impacts in Specialty Ingredients related to unplanned downtime at Decatur East and a normalizing texturants market negatively impacted margins, 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 period. 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 period, and softer margins within prebiotics, offset by stronger growth in biotics and botanicals. Animal Nutrition results were higher compared to the prior-year period, as amino acids market recovery, cost optimization efforts and lower input costs bolstered margins.

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.

Corporate results for the nine months ended September 30, 2024 and 2023 were as follows (in millions).

|  | Nine Months Ended September 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Interest expense-net | **$(351)** | $(326) | (25) |
| Unallocated corporate function costs | **(903)** | (808) | (95) |
| Expenses related to acquisitions | **(4)** | (6) | 2 |
| Gain on debt conversion option | **—** | 6 | (6) |
| Restructuring charges | **(12)** | (5) | (7) |
| Other income — net | **16** | 34 | (18) |
| Total Corporate | **$(1,254)** | **$(1,105)** | $(149) |

Corporate results were a net charge of $1.3 billion in the current period compared to a net charge of $1.1 billion in the year-ago period. Interest expense-net increased $25 million driven by increased borrowings and interest rates on the Company’s commercial paper borrowing programs and increased interest expense relating to uncertain tax positions. Unallocated corporate function costs increased $95 million driven by increases in legal and professional fees and securitization fees. Gain on debt conversion option in the prior-year period was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020. Other income — net in the current period included the non-service components of net pension benefit income of $14 million and foreign exchange gains of $67 million, partially offset by railroad maintenance expenses of $32 million and valuation losses of approximately $18 million in the Company’s ADM Ventures portfolio. Other income — net in the prior-year period included the non-service components of net pension benefit income of $13 million and foreign exchange gains, partially offset by railroad maintenance expenses of $28 million.

#### Non-GAAP Financial Measures

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.

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.

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 50 provides a reconciliation of total segment operating profit to earnings before income taxes for the nine months ended September 30, 2024 and 2023.

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.

The table below provides a reconciliation of net earnings to adjusted net earnings and diluted EPS to adjusted diluted EPS for the nine months ended September 30, 2024 and 2023.

*In millions*

*In millions*

|  | Nine Months Ended September 30, 2024 | Per share | 2023 | Per share |
| --- | ---: | ---: | ---: | ---: |
| Average number of shares outstanding - diluted | **497** |  | 546 |  |
| Net earnings and reported EPS (fully diluted) | **$1,233** | **$2.48** | $2,918 | $5.35 |
| Adjustments: |  |  |  |  |
| Gain on sales of assets and businesses - net of tax of $3 million in 2023(1) | **(1)** | **—** | (7) | (0.02) |
| Impairment and restructuring charges and contingency provisions - net of tax of $6 million in 2024 and $43 million in 2023 (1) | **523** | **1.06** | 152 | 0.28 |
| Expenses related to acquisitions - net of tax of $1 million in 2024 and $1 million in 2023 (1) | **3** | **0.01** | 5 | 0.01 |
| Gain on debt conversion option | **—** | **—** | (6) | (0.01) |
| Certain discrete tax adjustments | **30** | **0.06** | 3 | 0.01 |
| Total adjustments | **555** | **1.13** | 147 | 0.27 |
| Adjusted net earnings and adjusted diluted EPS | **$1,788** | **$3.61** | $3,065 | $5.62 |

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

The tables below provide a reconciliation of net earnings to EBITDA and adjusted EBITDA for the nine months ended September 30, 2024 and 2023 (in millions).

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net earnings | **$1,233** | $2,918 |
| Net earnings (losses) attributable to non-controlling interests | (15) | 6 |
| Income tax expense | 370 | 636 |
| Interest expense | 375 | 321 |
| Depreciation and amortization | 854 | 782 |
| EBITDA | **2,817** | 4,663 |
| Gains on sales of assets and businesses | (1) | (10) |
| Expenses related to acquisitions | 4 | 6 |
| Railroad maintenance expenses | 32 | 28 |
| Impairment and restructuring charges and contingency provisions | 529 | 195 |
| Adjusted EBITDA | **$3,381** | $4,882 |

53

### 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 September 30, 2024, the Company’s capital resources included shareholders’ equity of $22.0 billion and lines of credit, including the accounts receivable securitization programs described below, totaling $12.5 billion, of which $8.7 billion was unused. Of the Company’s total lines of credit, $5.0 billion supported the combined U.S. and European commercial paper borrowing programs, against which there was $1.5 billion of commercial paper outstanding at September 30, 2024.

As of September 30, 2024, the Company had $784 million of cash and cash equivalents, $517 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 $4.5 billion, the Company has asserted that these funds are indefinitely reinvested outside the U.S.

As of September 30, 2024, the Company had total available liquidity of $9.5 billion comprised of cash and cash equivalents and unused lines of credit with a well-diversified group of primarily investment-grade institutions. 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 provided by operating activities was $2.5 billion and $1.9 billion for the nine months ended September 30, 2024 and 2023, respectively.

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.

#### Investing cash flows

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.

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.

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.

#### Financing cash flows

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.

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.

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.

Share repurchases for the nine months ended September 30, 2024 and 2023 were $2.3 billion and $1.1 billion, respectively.

Dividends paid for the nine months ended September 30, 2024 and 2023 were $744 million and $738 million, respectively.

#### Financial ratios

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.

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.

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.

#### Credit ratings

As of November 2024, the three major credit rating agencies maintained the Company’s credit ratings at investment grade levels with a negative outlook from two of the credit rating agencies.

#### 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 to repurchase up to 200 million shares through December 31, 2024. 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. See Note 11. Shareholders’ Equity within “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements” for more information. As of September 30, 2024, the Company had 14.8 million shares remaining that may be repurchased under its stock repurchase program until December 31, 2024.

#### 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 $2.8 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, “Financial Statements” for more information and disclosures on the Programs). As of September 30, 2024, the Company had $0.7 billion unused capacity of its facility under the Programs.

### Contractual Obligations and Commercial Commitments

The Company’s purchase obligations as of September 30, 2024 and December 31, 2023 were $14.1 billion and $14.0 billion, respectively. As of September 30, 2024, the Company expects to make payments related to purchase obligations of $11.9 billion within the next twelve months. There were no other material changes in the Company’s contractual obligations during the three months ended September 30, 2024.

### Off Balance Sheet Arrangements

There were no material changes in the Company’s off balance sheet arrangements during the three months ended September 30, 2024.

### Critical Accounting Policies and Estimates

There were no material changes in the Company’s critical accounting policies and estimates during the three months ended September 30, 2024. For a description of the Company’s critical accounting policies, 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/A for the year ended December 31, 2023.

### QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

## Market risk

As filed, 2,826 characters.

The market risk inherent in the Company’s market risk sensitive instruments and positions is the potential loss arising from adverse changes in: commodity market prices as they relate to the Company’s net commodity position, foreign currency exchange rates, and interest rates. Significant changes in market risk sensitive instruments and positions for the three months ended September 30, 2024 are described below. There were no material changes during the period in the Company’s potential loss arising from changes in foreign currency exchange rates and interest rates.

For detailed information regarding the Company’s market risk sensitive instruments and positions, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023.

#### Commodities

The availability and prices of agricultural commodities are subject to wide fluctuations due to factors such as changes in weather conditions, crop disease, plantings, government programs and policies, competition, changes in global demand, changes in customer preferences and standards of living, and global production of similar and competitive crops.

The fair value of the Company’s commodity position is a summation of the fair values calculated for each commodity by valuing all of the commodity positions at quoted market prices for the period, where available, or utilizing a close proxy. The Company has established metrics to monitor the amount of market risk exposure, which consist of volumetric limits and value-at-risk (VaR) limits. VaR measures the potential loss, at a 95% confidence level, that could be incurred over a one-year period. Volumetric limits are monitored daily and VaR calculations and sensitivity analysis are monitored weekly.

In addition to measuring the hypothetical loss resulting from an adverse two standard deviation move in market prices (assuming no correlations) over a one-year period using VaR, sensitivity analysis is performed measuring the potential loss in fair value resulting from a hypothetical 10% adverse change in market prices. The highest, lowest, and average weekly position together with the market risk from a hypothetical 10% adverse price change is as follows (in millions).

| Long/(Short) | Nine Months Ended September 30, 2024 Fair Value | Market Risk | Year ended December 31, 2023 Fair Value | Market Risk |
| --- | ---: | ---: | ---: | ---: |
| Highest position | **$543** | **$54** | $498 | $50 |
| Lowest position | **(265)** | **(27)** | (6) | (1) |
| Average position | **158** | **16** | 125 | 13 |

The change in fair value of the average position was due to the overall increase in average quantities, partially offset by the decrease in prices of certain commodities.

### CONTROLS AND PROCEDURES

## Controls and procedures

As filed, 4,614 characters.

### Evaluation of Disclosure Controls and Procedures

As of September 30, 2024, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer, concluded the Company’s disclosure controls and procedures were not effective as of September 30, 2024, due to the material weakness described below.

### Internal Control Over Financial Reporting

As disclosed in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023, during the fourth quarter of 2023, in connection with the Investigation, the Company identified a material weakness in its internal control over financial reporting related to the Company’s accounting practices and procedures for segment disclosures. The material weakness resulted from inadequate controls that allowed for certain intersegment sales to be reported at amounts that were not in accordance with ASC 606, *Revenue from Contracts with Customers*. Specifically, the Company did not have adequate controls in place around measurement of certain intersegment sales between the Company’s reporting segments. In addition, appropriate controls were not in place for the reporting of intersegment sales and for the application of disclosure requirements within ASC 280, *Segment Reporting*. The absence of adequate controls with respect to the reporting of intersegment sales impacted the completeness and accuracy of the Company’s segment disclosures and review controls over projected financial information utilized in goodwill and other long-lived asset impairment tests.

### Remediation Plan

The Company is implementing enhancements to its internal controls to remediate the identified material weakness in its internal control over financial reporting related to the Company’s accounting practices and procedures for intersegment sales and to enhance the reliability of its financial statements with respect to the pricing and reporting of such sales. Specifically, the Company has (i) enhanced the Company’s accounting policies with respect to the measurement of intersegment sales and (ii) improved its documentation of the Company’s pricing guidelines for intersegment sales. In addition, (i) the design and documentation of the execution of pricing and measurement controls for segment disclosure purposes and projected financial information used in impairment analyses have been enhanced, and testing of these controls will continue throughout the balance of the year; and (ii) training for relevant personnel on the measurement of intersegment sales and application of relevant accounting guidance to intersegment sales and segment disclosures has been provided and remains ongoing.

While the Company believes that these efforts will improve its internal control over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the material weakness in internal control over financial reporting until a sustained period of time has passed to allow management to test the design and operational effectiveness of the new and enhanced controls.

### Changes in Internal Control Over Financial Reporting

The Company is undertaking upgrades to its IT platforms and, in particular, certain of its enterprise resource planning (ERP) systems on a worldwide basis, which is expected to occur in phases over the next several years. The Company did not have any further deployments of updated ERP systems during the quarter ended September 30, 2024.

Except for the material weakness described above and the related remediation measures that are being implemented, there have been no changes in internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the nine months ended September 30, 2024, the Company completed the acquisitions of Revela, FDL, PT, and TNS. As a result of the acquisitions, the Company is in the process of reviewing the internal control structures of these businesses and, if necessary, will make appropriate changes as the Company incorporates its controls and procedures into the acquired businesses.

## Risk factors

As filed, 5,364 characters.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023, as supplemented by the risk factors set forth below.

***The Company faces risks related to international conflicts, acts of terrorism or war, or other geopolitical events, such as the ongoing Russia-Ukraine war, Israel-Hamas war, sanctions, and other economic disruptions.***

ADM’s assets and operations could be subject to extensive property damage, business disruption, loss in value, nationalization and expropriation as a result of geopolitical conflicts, acts of terrorism (e.g. purposeful adulteration of the Company’s products), and war, as well as any sanctions or embargoes resulting from these events. The assets and operations located in the region affected by the war between Russia and Ukraine are at an increased risk of property damage, inventory loss, business disruption, and expropriation. In addition, the Company may not be able to realize any financial or other benefits from its investments in Russia due to ongoing sanctions or actions of the Russian government. The Black Sea region is a major exporter of wheat and corn to the world, and the disruption of supply may continue to cause volatility in volumes, prices, and margins of these commodities and related products. While the Company has a robust trade sanctions compliance program, there is a risk that ADM and its related parties could trade with a sanctioned partner due to the number of sanctions taken against Russia. Trade receivables may be at risk of higher defaults, and other third-party risks could affect ADM’s ability to obtain inputs if suppliers are unable to perform or face insolvency, as certain supplies may not be attainable due to sanctions and/or restrictions on cross-border payment transactions. The Company could be materially impacted if, in the worst-case scenario, the conflict in Ukraine advances to other countries. The risk to ADM’s business from the war in Israel could increase if it expands into other countries. In such circumstances, trade policies and the Company’s critical global supply chain and logistical networks could be affected, impairing the Company’s ability to satisfy contractual obligations and impacting working capital requirements. Insurance may not adequately cover these risks. In addition, provisions for certain products that ADM produces, particularly those that support the food services channels, could be materially impacted. The Company continues to monitor risks associated with the conflict between Russia and Ukraine and the conflict in Israel along with the Red Sea and other political tensions and evaluate alternatives to reduce the impacts of these risks.

### PART II — OTHER INFORMATION

***The Company’s failure to successfully complete its ongoing implementations of new enterprise resource planning (ERP) systems and upgrades of its information technology (IT) systems could have a material and adverse effect on the Company’s business, financial condition and results of operations.***

The Company is undertaking upgrades to its IT platforms and, in particular, certain of its ERP systems on a worldwide basis, which is expected to occur in phases over the next several years. These upgrades include making changes to legacy systems or acquiring new systems with new functionality, and building new policies, procedures, training programs and monitoring tools. The Company is also engaged in implementations of new ERP systems which has required and will continue to require significant investments of human and financial resources. The Company’s strategy for pursuing these upgrades and implementations will likely evolve over time and may increase the time or expense involved in completing these projects. In implementing new ERPs, the Company may experience significant increases to inherent costs and risks associated with changing and acquiring these systems, policies, procedures and monitoring tools, including capital expenditures, additional operating expenses, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems policies, procedures or monitoring tools into its current systems. Any significant disruption or deficiency in the design and implementation of any ERP may adversely affect the Company’s ability to operate its business, or maintain effective disclosure controls and internal control over financial reporting. These implementations, modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, such as ERPs, delays in the Company’s timeline for planned improvements, significant system failures or the Company’s inability to successfully modify its IT systems, policies, procedures or monitoring tools to respond to changes in its business needs in the past have caused and in the future may cause disruptions in the Company’s business operations, increase security risks, including the risk of cybersecurity breaches, and may have a material and adverse effect on the Company’s business, financial condition and results of operations.

Filed Nov 18, 2024.
Source: SEC EDGAR, the filing index for accession 0000007084-24-000054. Last ingested by Listed: Oct 24, 2026, 14:51 ET. No prices; not investment advice.