• Net earnings and adjusted earnings of about $1.0 billion
  • Trailing four-quarter average adjusted ROIC of 13%

ADM (NYSE: ADM) today reported financial results for the quarter ended September 30, 2022.

“I’m proud of our team for delivering yet another quarter of strong results by supporting the global food system and providing needed nutrition to billions,” said Chairman and CEO Juan Luciano. “Global demand remains robust, and our adjusted EPS of $1.86 is a reflection of our team’s expertise in managing dynamic market conditions, as well as the unique benefits of our integrated global value chain and our product portfolio.

“Today’s ADM is a resilient company, with a broad global footprint and an array of innovative capabilities that are driving performance for customers, consumers and shareholders. And with strong cash flows, we’re advancing productivity initiatives to enhance cost efficiencies and returns; driving innovation efforts to build new capabilities and growth engines across all of our businesses; and continuing to return capital to our shareholders. We’re well positioned to end 2022 strong, and carry that momentum into 2023.”

Third Quarter 2022 Highlights

(Amounts in millions except per share amounts)

2022

 

2021

Earnings per share (as reported)

$

1.83

 

$

0.93

 

Adjusted earnings per share1

$

1.86

 

$

0.97

 

 

 

 

 

Segment operating profit

$

1,559

 

$

1,000

 

Adjusted segment operating profit (loss)1

$

1,579

 

$

1,002

 

Ag Services and Oilseeds

 

1,075

 

 

618

 

Carbohydrate Solutions

 

309

 

 

213

 

Nutrition

 

177

 

 

176

 

Other Business

 

18

 

 

(5

)

  • Q3 2022 EPS as reported of $1.83 includes a $0.07 per share charge related primarily to impairments and restructuring; a $0.04 per share gain related to the sale of certain assets; a $0.01 per share gain related to the mark-to-market adjustment on the Wilmar exchangeable bond; and a $0.01 per share tax expense related to certain discrete items. Adjusted EPS, which excludes these items, was $1.86.1

1 Non-GAAP financial measures; see pages 3, 5, 10, 11 and 12 for explanations and reconciliations, including after-tax amounts.

Quarterly Results of Operations

Ag Services & Oilseeds delivered substantially higher year-over-year results.

  • Ag Services results were significantly higher than the third quarter of 2021. The short crops in South America supported U.S. exports, driving improved volumes and margins in North American origination, which had significant negative impacts from Hurricane Ida in the prior year. Better margins in global ocean freight, driven by good execution amid dynamic global trade flows, powered better results in Global Trade. South American origination saw improved volumes and margins driven by increased farmer selling in addition to higher volumes through our export facilities.
  • Crushing results were significantly higher, with margins driven by resilient global demand for both meal and oil. Strong rapeseed margins in EMEA, driven by robust oil demand and continued market dislocations, along with positive impacts from an insurance settlement, helped drive improved results. North American soy crush margins continued to benefit from renewable diesel demand. Also, net positive timing effects in the quarter were about $175 million, as compared to the approximately $70 million in the prior-year quarter. Positive results were partially offset by lower crush volumes, including impacts from idled facilities in Ukraine and Paraguay.
  • Refined Products and Other results were higher year over year in a strong margin environment for both refined oils and biodiesel. Robust performance in global refined oils was driven by healthy demand and elevated refined oil margins amid supply chain disruptions.
  • Equity earnings from Wilmar were much higher versus the third quarter of 2021.

Carbohydrate Solutions results were significantly higher than the prior-year quarter’s.

  • The Starches and Sweeteners subsegment, which includes ethanol production from our wet mills, delivered much improved year-over-year results amid steady global demand for sweeteners and starches. Corn co-products — including continued robust demand for corn oil — as well as effective risk management drove higher execution margins in North America. Wheat milling had a strong performance, delivering improved volumes and margins to meet healthy demand for flour. In EMEA, the business delivered solid volumes and margins and managed through a dynamic energy environment to drive stronger results.
  • Vantage Corn Processors results were substantially lower. Ethanol margins were pressured by lower domestic demand and elevated corn costs. In addition, the prior year’s results included contributions from the now-sold Peoria facility.

Nutrition delivered revenue growth of 10%, and 16%1 on a constant currency basis; operating profit was similar to the prior-year quarter’s, and 7%1 higher on a constant currency basis, with continued strong demand offset by some demand fulfillment challenges.

  • Human Nutrition results were higher than those of the third quarter of 2021. Strong demand for plant-based proteins, as well as solid performance in texturants, drove continued growth in Specialty Ingredients. Flavors results were impacted by adverse currency translation effects in EMEA, partially offset by continued strong demand growth in the region; demand fulfillment challenges in North America and lower demand in APAC — driven partly by lockdowns in China — also negatively impacted results. Health & Wellness was lower versus the prior year, which included higher income from the Spiber fermentation agreement.
  • Animal Nutrition results were down versus the prior-year quarter. Pet results were lower in Latin America on lower volumes, partially offset by strong volumes and margins in North America. Softer animal protein demand affected feed volumes.

Other Business results were significantly higher than the prior year. Higher short-term interest rates drove improved earnings in ADM Investor Services, partially offset by increased claim settlements in captive insurance.

Other Items of Note

As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.

Segment operating profit of $1.6 billion for the quarter includes charges of $49 million ($0.07 per share) primarily related to impairments and restructuring, and gains related to the sale of certain assets of $29 million ($0.04 per share).

In Corporate results, interest expense increased year over year on higher interest rates. Unallocated corporate costs were higher year over year due primarily to performance-related compensation accruals, higher IT operating and project-related costs, and higher costs in the company’s centers of excellence. Other Corporate was favorable versus the prior year primarily due to higher results from foreign currency-related hedge activity. Corporate results also included a gain related to the mark-to-market adjustment on the Wilmar exchangeable bond of $8 million ($0.01 per share).

The effective tax rate for the quarter was approximately 16%, compared to approximately 18% in the prior year. The decreased rate was driven primarily by changes in the geographic mix of pretax earnings, partially offset by the impact of discrete tax items.

1 Constant currency revenue is ADM's GAAP revenue adjusted for the impact of fluctuations in foreign currency exchange rates. Constant currency operating profit is ADM's GAAP operating profit adjusted for the impact of fluctuation in foreign currency exchange rates. The Company calculates constant currency revenue/operating profit by converting its current period revenue/operating profit using the prior period exchange rates and comparing the adjusted amount to its prior period reported results. Management believes providing constant currency revenue and constant currency operating profit provide valuable supplemental information regarding its revenue and operating profit and facilitate period-to-period comparison. Constant currency revenue and constant currency operating profit are non-GAAP measures and are not intended to replace or be alternatives to GAAP revenues and GAAP operating profit, the most directly comparable GAAP financial measures.

Note: Additional Facts and Explanations

Additional facts and explanations about results and industry environment can be found at the end of the ADM Q3 Earnings Presentation at www.adm.com/webcast.

Conference Call Information

ADM will host a webcast on October 25, 2022, 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.

Forward-Looking Statements

Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements and materials are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation, and you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events.

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.

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

 

 

Nine months ended

 

 

September 30

 

 

September 30

 

(In millions)

2022

2021

Change

 

2022

2021

Change

 

 

 

 

 

 

 

 

Segment Operating Profit

$

1,559

 

$

1,000

 

$

559

 

 

$

4,938

 

$

3,250

 

$

1,688

 

Specified items:

 

 

 

 

 

 

 

Gain on sale of assets

 

(29

)

 

 

 

(29

)

 

 

(30

)

 

(22

)

 

(8

)

Impairment, restructuring, and settlement charges

 

49

 

 

2

 

 

47

 

 

 

76

 

 

133

 

 

(57

)

Adjusted Segment Operating Profit

$

1,579

 

$

1,002

 

$

577

 

 

$

4,984

 

$

3,361

 

$

1,623

 

 

 

 

 

 

 

 

 

Ag Services and Oilseeds

$

1,075

 

$

618

 

$

457

 

 

$

3,202

 

$

1,965

 

$

1,237

 

Ag Services

 

292

 

 

36

 

 

256

 

 

 

957

 

 

435

 

 

522

 

Crushing

 

346

 

 

280

 

 

66

 

 

 

1,242

 

 

812

 

 

430

 

Refined Products and Other

 

295

 

 

236

 

 

59

 

 

 

623

 

 

467

 

 

156

 

Wilmar

 

142

 

 

66

 

 

76

 

 

 

380

 

 

251

 

 

129

 

 

 

 

 

 

 

 

 

Carbohydrate Solutions

$

309

 

$

213

 

$

96

 

 

$

1,099

 

$

855

 

$

244

 

Starches and Sweeteners

 

327

 

 

178

 

 

149

 

 

 

1,036

 

 

706

 

 

330

 

Vantage Corn Processors

 

(18

)

 

35

 

 

(53

)

 

 

63

 

 

149

 

 

(86

)

 

 

 

 

 

 

 

 

Nutrition

$

177

 

$

176

 

$

1

 

 

$

605

 

$

531

 

$

74

 

Human Nutrition

 

146

 

 

139

 

 

7

 

 

 

470

 

 

429

 

 

41

 

Animal Nutrition

 

31

 

 

37

 

 

(6

)

 

 

135

 

 

102

 

 

33

 

 

 

 

 

 

 

 

 

Other Business

$

18

 

$

(5

)

$

23

 

 

$

78

 

$

10

 

$

68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Profit

$

1,559

 

$

1,000

 

$

559

 

 

$

4,938

 

$

3,250

 

$

1,688

 

 

 

 

 

 

 

 

 

Corporate Results

$

(329

)

$

(347

)

$

18

 

 

$

(918

)

$

(948

)

$

30

 

 

 

 

 

 

 

 

 

Interest expense - net

 

(76

)

 

(66

)

 

(10

)

 

 

(239

)

 

(200

)

 

(39

)

Unallocated corporate costs

 

(251

)

 

(231

)

 

(20

)

 

 

(727

)

 

(681

)

 

(46

)

Other

 

(10

)

 

(17

)

 

7

 

 

 

39

 

 

42

 

 

(3

)

Specified items:

 

 

 

 

 

 

 

Debt extinguishment charges

 

 

 

(36

)

 

36

 

 

 

 

 

(36

)

 

36

 

Expenses related to acquisitions

 

 

 

(3

)

 

3

 

 

 

(2

)

 

(3

)

 

1

 

Gain on debt conversion option

 

8

 

 

7

 

 

1

 

 

 

12

 

 

17

 

 

(5

)

Loss on sale of assets

 

 

 

 

 

 

 

 

(3

)

 

 

 

(3

)

Restructuring and settlement adjustment (charges)

 

 

 

(1

)

 

1

 

 

 

2

 

 

(87

)

 

89

 

Earnings Before Income Taxes

$

1,230

 

$

653

 

$

577

 

 

$

4,020

 

$

2,302

 

$

1,718

 

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

 

Nine months ended

 

September 30

 

September 30

 

2022

 

2021

 

2022

 

2021

 

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

Revenues

$

24,683

 

 

$

20,340

 

 

$

75,617

 

 

$

62,159

 

Cost of products sold (1)

 

22,872

 

 

 

19,014

 

 

 

69,809

 

 

 

57,822

 

Gross profit

 

1,811

 

 

 

1,326

 

 

 

5,808

 

 

 

4,337

 

Selling, general, and administrative expenses (2)

 

818

 

 

 

720

 

 

 

2,461

 

 

 

2,208

 

Asset impairment, exit, and restructuring costs (3)

 

28

 

 

 

2

 

 

 

30

 

 

 

84

 

Equity in (earnings) losses of unconsolidated affiliates

 

(210

)

 

 

(110

)

 

 

(606

)

 

 

(398

)

Interest and investment income

 

(85

)

 

 

(20

)

 

 

(176

)

 

 

(83

)

Interest expense (4)

 

97

 

 

 

61

 

 

 

262

 

 

 

188

 

Other (income) expense - net (5,6,7)

 

(67

)

 

 

20

 

 

 

(183

)

 

 

36

 

Earnings before income taxes

 

1,230

 

 

 

653

 

 

 

4,020

 

 

 

2,302

 

Income tax expense (benefit) (8)

 

193

 

 

 

120

 

 

 

679

 

 

 

364

 

Net earnings including noncontrolling interests

 

1,037

 

 

 

533

 

 

 

3,341

 

 

 

1,938

 

 

 

 

 

 

 

 

 

Less: Net earnings (losses) attributable to noncontrolling interests

 

6

 

 

 

7

 

 

 

20

 

 

 

11

 

Net earnings attributable to ADM

$

1,031

 

 

$

526

 

 

$

3,321

 

 

$

1,927

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.83

 

 

$

0.93

 

 

$

5.87

 

 

$

3.40

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

 

563

 

 

 

566

 

 

 

566

 

 

 

566

 

 

 

 

 

 

 

 

 

(1)

Includes charges related to inventory writedown of $11 million and $36 million in the current quarter and YTD respectively, and $13 million in the prior YTD. Current YTD was partially offset by an insurance settlement of $2 million.

 

(2)

Includes a contingency/settlement of $10 million in the current quarter and YTD and $38 million in the prior YTD. Also includes acquisition-related expenses of $2 million in the current YTD and $3 million in the prior quarter and YTD.

 

(3)

Includes charges related to the impairment of certain assets and restructuring of $28 million and $30 million in the current quarter and YTD, respectively, and $2 million and $84 million in the prior year quarter and YTD, respectively.

 

(4)

Includes gains related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $8 million and $12 million in the current quarter and YTD, respectively, and gains of $7 million and $17 million in the prior year quarter and YTD, respectively.

 

(5)

Includes gains related to the sale of certain assets of $29 million and $27 million in the current quarter and YTD, respectively, and gains of $22 million in the prior YTD.

 

(6)

Includes a pension settlement charge of $1 million and $83 million in the prior year quarter and YTD, respectively. Also, includes exit costs of $2 million in the prior YTD.

 

(7)

Includes a loss on debt extinguishment of $36 million in the prior year quarter and YTD primarily related to the early redemption of the $500 million 2.75% notes due in 2025.

 

(8)

Includes the tax expense (benefit) impact of the above specified items and tax discrete items totaling $5 million and $(6) million in the current quarter and YTD, respectively, and $(13) million and $(62) million in the prior year quarter and YTD, respectively.

Summary of Financial Condition

(unaudited)

 

 

 

September 30, 2022

 

September 30, 2021

 

 

(in millions)

Net Investment In

 

 

 

 

Cash and cash equivalents (a)

 

$

1,099

 

$

1,083

Operating working capital (b)

 

 

11,603

 

 

10,396

Property, plant, and equipment

 

 

9,605

 

 

9,848

Investments in affiliates

 

 

5,429

 

 

5,148

Goodwill and other intangibles

 

 

6,364

 

 

5,705

Other non-current assets

 

 

2,337

 

 

2,307

Net current assets held for sale

 

 

 

 

130

 

 

$

36,437

 

$

34,617

Financed By

 

 

 

 

Short-term debt (a)

 

$

181

 

$

314

Long-term debt, including current maturities (a)

 

 

8,559

 

 

8,620

Deferred liabilities

 

 

3,378

 

 

3,468

Temporary equity

 

 

290

 

 

225

Shareholders’ equity

 

 

24,029

 

 

21,990

 

 

$

36,437

 

$

34,617

(a)

Net debt is calculated as short-term debt plus long-term debt (including current maturities) less cash and cash equivalents.

(b)

Current assets (excluding cash and cash equivalents) less current liabilities (excluding short-term debt and current maturities of long-term debt).

Summary of Cash Flows

(unaudited)

 

 

 

Nine months ended

 

 

September 30

 

 

2022

 

2021

 

 

(in millions)

Operating Activities

 

 

 

 

Net earnings

 

$

3,341

 

 

$

1,938

 

Depreciation and amortization

 

 

774

 

 

 

739

 

Asset impairment charges

 

 

20

 

 

 

54

 

(Gains) losses on sales/revaluation of assets

 

 

(77

)

 

 

(95

)

Other - net

 

 

599

 

 

 

454

 

Other changes in operating assets and liabilities

 

 

(1,309

)

 

 

2,763

 

Total Operating Activities

 

 

3,348

 

 

 

5,853

 

 

 

 

 

 

Investing Activities

 

 

 

 

Purchases of property, plant and equipment

 

 

(841

)

 

 

(714

)

Net assets of businesses acquired

 

 

 

 

 

(501

)

Proceeds from sale of business/assets

 

 

51

 

 

 

73

 

Investments in affiliates

 

 

(60

)

 

 

(7

)

Other investing activities

 

 

(98

)

 

 

(138

)

Total Investing Activities

 

 

(948

)

 

 

(1,287

)

 

 

 

 

 

Financing Activities

 

 

 

 

Long-term debt borrowings

 

 

752

 

 

 

1,330

 

Long-term debt payments

 

 

(482

)

 

 

(533

)

Net borrowings (payments) under lines of credit

 

 

(751

)

 

 

(1,726

)

Share repurchases

 

 

(1,200

)

 

 

 

Cash dividends

 

 

(677

)

 

 

(626

)

Other

 

 

(6

)

 

 

1

 

Total Financing Activities

 

 

(2,364

)

 

 

(1,554

)

 

 

 

 

 

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

 

 

36

 

 

 

3,012

 

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

 

 

7,454

 

 

 

4,646

 

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

 

$

7,490

 

 

$

7,658

 

Segment Operating Analysis

(unaudited)

 

 

Quarter ended

 

Nine months ended

 

September 30

 

September 30

 

2022

 

2021

 

2022

 

2021

 

(in ‘000s metric tons)

Processed volumes (by commodity)

 

 

 

 

 

 

 

Oilseeds

 

7,688

 

 

8,509

 

 

24,387

 

 

26,247

Corn

 

4,381

 

 

5,051

 

 

13,969

 

 

13,743

Total processed volumes

 

12,069

 

 

13,560

 

 

38,356

 

 

39,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended

 

Nine months ended

 

September 30

 

September 30

 

2022

 

2021

 

2022

 

2021

 

(in millions)

Revenues

 

 

 

 

 

 

 

Ag Services and Oilseeds

$

19,141

 

$

15,689

 

$

58,823

 

$

48,967

Carbohydrate Solutions

 

3,581

 

 

2,866

 

 

10,698

 

 

7,909

Nutrition

 

1,864

 

 

1,697

 

 

5,791

 

 

4,993

Other Business

 

97

 

 

88

 

 

305

 

 

290

Total revenues

$

24,683

 

$

20,340

 

$

75,617

 

$

62,159

Adjusted Earnings Per Share

A non-GAAP financial measure

(unaudited)

 

 

Quarter ended September 30

 

Nine months ended September 30

 

2022

2021

 

2022

2021

 

In millions

Per share

In millions

Per share

 

In millions

Per share

In millions

Per share

Net earnings and fully diluted EPS

$

1,031

 

$

1.83

 

$

526

 

$

0.93

 

 

$

3,321

 

$

5.87

 

$

1,927

 

$

3.41

 

Adjustments:

 

 

 

 

 

 

 

 

 

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

 

(22

)

 

(0.04

)

 

 

 

 

 

 

(20

)

 

(0.04

)

 

(17

)

 

(0.03

)

Impairment, restructuring, and settlement charges (b)

 

40

 

 

0.07

 

 

3

 

 

0.01

 

 

 

60

 

 

0.10

 

 

167

 

 

0.30

 

Expenses related to acquisitions (c)

 

 

 

 

 

2

 

 

 

 

 

1

 

 

 

 

2

 

 

 

Debt extinguishment charges (d)

 

 

 

 

 

27

 

 

0.05

 

 

 

 

 

 

 

27

 

 

0.05

 

Loss (gain) on debt conversion option (e)

 

(8

)

 

(0.01

)

 

(7

)

 

(0.01

)

 

 

(12

)

 

(0.02

)

 

(17

)

 

(0.03

)

Tax adjustment (f)

 

7

 

 

0.01

 

 

(3

)

 

(0.01

)

 

 

2

 

 

 

 

(4

)

 

(0.01

)

Sub-total adjustments

 

17

 

 

0.03

 

 

22

 

 

0.04

 

 

 

31

 

 

0.04

 

 

158

 

 

0.28

 

Adjusted net earnings and adjusted EPS

$

1,048

 

$

1.86

 

$

548

 

$

0.97

 

 

$

3,352

 

$

5.91

 

$

2,085

 

$

3.69

 

 

 

 

 

 

 

 

 

 

 

(a)

Current quarter and YTD gains of $29 million and $27 million pretax ($22 million and $20 million after tax), respectively, were related to the sale of certain assets, tax effected using the Company’s U.S. income tax rate. Prior YTD gains of $22 million pretax ($17 million after tax) were related to the sale of certain assets, tax effected using the Company’s U.S. income tax rate.

(b)

Current quarter and YTD charges of $49 million and $74 million pretax ($40 million and $60 million after tax), respectively, were primarily related to the impairment of certain assets, restructuring charges, and a contingency/settlement tax effected using the applicable tax rates. Current YTD charges were also partially offset by an insurance settlement, tax effected using the applicable tax rate. Prior year quarter charges of $3 million pretax ($3 million after tax) were related to restructuring and pension settlement, tax effected using the applicable tax rates. Prior YTD charges of $220 million pretax ($167 million after tax) were related to the impairment of certain assets, restructuring, and legal and pension settlements, tax effected using the applicable tax rates.

(c)

Current YTD expenses of $2 million pretax ($1 million after tax) were related to the Deerland and Sojaprotein acquisitions, tax effected using the applicable tax rates. Prior year quarter and YTD expenses of $3 million pretax ($2 million after tax) were related to the Balto acquisition.

(d)

Prior quarter and YTD debt extinguishment charges of $36 million pretax ($27 million after tax) were related to the early redemption of notes, tax effected using the Company’s U.S. income tax rate.

(e)

Current quarter and YTD gain on debt conversion option of $8 million and $12 million pretax, respectively, ($8 million and $12 million after tax, respectively) and prior year quarter and YTD gain on debt conversion option of $7 million and $17 million pretax, respectively, ($7 million and $17 million after tax, respectively), were 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.

(f)

Tax adjustment due to certain discrete items totaling $7 million and $2 million in the current quarter and YTD, respectively, and $(3) million and $(4) million in the prior year quarter and YTD.

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

 

Dec. 31, 2021

 

Mar. 31, 2022

 

June 30, 2022

 

Sep. 30, 2022

 

Sep. 30, 2022

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to ADM

$

782

 

 

$

1,054

 

 

$

1,236

 

 

$

1,031

 

 

$

4,103

 

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense

 

77

 

 

 

92

 

 

 

73

 

 

 

97

 

 

 

339

 

Other adjustments

 

66

 

 

 

17

 

 

 

7

 

 

 

27

 

 

 

117

 

Total adjustments

 

143

 

 

 

109

 

 

 

80

 

 

 

124

 

 

 

456

 

Tax on adjustments

 

(14

)

 

 

(26

)

 

 

(19

)

 

 

(25

)

 

 

(84

)

Net adjustments

 

129

 

 

 

83

 

 

 

61

 

 

 

99

 

 

 

372

 

Total Adjusted ROIC Earnings

$

911

 

 

$

1,137

 

 

$

1,297

 

 

$

1,130

 

 

$

4,475

 

 

 

 

 

 

 

 

 

 

 

Adjusted Invested Capital (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Trailing Four

 

Dec. 31, 2021

 

Mar. 31, 2022

 

June 30, 2022

 

Sep. 30, 2022

 

Quarter Average

 

 

 

 

 

 

 

 

 

 

Equity (1)

$

22,477

 

$

23,722

 

$

24,393

 

$

23,997

 

$

23,647

 

+ Interest-bearing liabilities (2)

 

9,546

 

 

13,079

 

 

11,524

 

 

8,747

 

 

10,724

 

Other adjustments

 

70

 

 

13

 

 

5

 

 

25

 

 

28

 

Total Adjusted Invested Capital

$

32,093

 

$

36,814

 

$

35,922

 

$

32,769

 

$

34,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Return on Invested Capital

 

 

 

 

 

 

 

 

13.0

%

(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 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 Taxes, Interest, and Depreciation and Amortization (EBITDA)

A non-GAAP financial measure

(unaudited)

 

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended September 30, 2022.

 

 

 

 

 

 

 

 

 

 

Four Quarters

 

Quarter Ended

 

Ended

 

Dec. 31, 2021

 

Mar. 31, 2022

 

June 30, 2022

 

Sep. 30, 2022

 

Sep. 30, 2022

 

 

 

 

 

(in millions)

 

 

 

 

Earnings before income taxes

$

1,011

 

 

$

1,271

 

$

1,519

 

$

1,230

 

 

$

5,031

 

Interest expense

 

77

 

 

 

92

 

 

73

 

 

97

 

 

 

339

 

Depreciation and amortization

 

257

 

 

 

257

 

 

257

 

 

260

 

 

 

1,031

 

Losses (gains) on sales of assets and businesses

 

(55

)

 

 

2

 

 

 

 

(29

)

 

 

(82

)

Asset impairment, exit, restructuring, and settlement charges

 

80

 

 

 

17

 

 

8

 

 

49

 

 

 

154

 

Railroad maintenance expense

 

33

 

 

 

 

 

9

 

 

32

 

 

 

74

 

Expenses related to acquisitions

 

4

 

 

 

2

 

 

 

 

 

 

 

6

 

Adjusted EBITDA

$

1,407

 

 

$

1,641

 

$

1,866

 

$

1,639

 

 

$

6,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Four Quarters

 

Quarter Ended

 

Ended

 

Dec. 31, 2021

 

Mar. 31, 2022

 

June 30, 2022

 

Sep. 30, 2022

 

Sep. 30, 2022

 

 

 

 

 

(in millions)

 

 

 

 

Ag Services and Oilseeds

$ 902

 

$ 1,096

 

$ 1,207

 

$ 1,166

 

$ 4,371

Carbohydrate Solutions

510

 

396

 

550

 

391

 

1,847

Nutrition

220

 

254

 

304

 

242

 

1,020

Other Business

17

 

44

 

24

 

35

 

120

Corporate

(242)

 

(149)

 

(219)

 

(195)

 

(805)

Adjusted EBITDA

$ 1,407

 

$ 1,641

 

$ 1,866

 

$ 1,639

 

$ 6,553

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA is defined as earnings before taxes, interest, and 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 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 earnings before income taxes, the most directly comparable GAAP financial measure.

Media Relations Jackie Anderson 312-634-8484

Investor Relations Megan Britt 872-257-8378

Archer Daniels Midland (NYSE:ADM)
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