- Net earnings of $536 million, up
significantly year over year
- Trailing four-quarter ROIC of 8.3
percent, more than 200 bps over WACC
- Growing benefits from strategic actions
lead to confidence in ongoing earnings growth
Archer Daniels Midland Company (NYSE: ADM) today reported
financial results for the quarter ended September 30,
2018.
“The team delivered another strong quarter, capitalizing on
robust global demand with good execution and great utilization of
our global footprint,” said ADM Chairman and CEO Juan Luciano.
“For the last several years, through good conditions and bad,
we’ve remained focused on serving our customers and delivering our
strategic plan — optimizing our core, driving efficiencies, and
expanding strategically. Now, as we look forward to 2019, we are
continuing to enhance our earnings power, both through our growth
investments and our Readiness initiative, which is beginning to
drive fundamental changes in the way we run our company.
“Thanks to the team’s great work and the growing benefits of our
strategic actions, we expect a solid end to 2018, as well as
continued momentum for growth in earnings and returns in 2019 and
the years to follow.”
Third Quarter 2018 Highlights
2018 2017 (Amounts
in millions except per share data)
Earnings per share (as
reported) $ 0.94 $ 0.34 Adjusted
earnings per share1 $ 0.92 $
0.45 Segment operating profit $
881 $ 485 Adjusted segment operating
profit1 $ 861 $ 541
Origination 129 39 Oilseeds 349 113 Carbohydrate Solutions 288 300
Nutrition 67 68 Other 28 21
- EPS as reported of $0.94 includes a
$0.01 per share charge related to LIFO, a $0.04 per share gain
related to the sale of a business and an equity investment, and a
$0.01 per share tax expense related to U.S. tax reform and certain
discrete items. Adjusted EPS, which excludes these items, was
$0.92.1
1 Non-GAAP financial measures; see pages 4, 9, 10, and 11 for
explanations and reconciliations, including after-tax amounts.
Results of Operations
Origination results were up
substantially year over year.
Merchandising and Handling was significantly higher versus the
weak third quarter of 2017. In North America, the business managed
risk well in a volatile price environment, and capitalized on its
asset base to deliver higher volumes and margins, including strong
export sales to customers in markets outside of China. In Global
Trade, good utilization of the company’s global network of
origination assets and continued expansion of destination marketing
volumes and margins drove solid results.
Transportation results more than doubled year over year, driven
by higher volumes and margins in ARTCO.
Oilseeds results were also up
significantly over the prior-year period.
Crushing and Origination set a new record for crush volumes,
leveraging its strong global asset base and the company’s growing
destination marketing capabilities to capitalize on higher global
crush margins. Soybean crush was the major driver of earnings
growth, with North America, EMEA and South America all delivering
substantially higher results year over year. Softseeds results had
a significant improvement from the third quarter of 2017, with
particularly good results in EMEA.
Refining, Packaging, Biodiesel and Other was down versus the
third quarter of 2017. Biodiesel was up substantially year over
year, and edible oils continued to perform well. Peanut shelling
margins were significantly lower, primarily caused by large peanut
inventories and difficult market conditions.
Asia was higher on strong Wilmar results.
Carbohydrate Solutions results were
slightly lower than the year-ago quarter.
Starches and Sweeteners delivered solid results, slightly below
the strong prior-year period. EMEA sweeteners continued to benefit
from recent acquisitions, delivering good results despite sugar
oversupply in the region. Flour milling was higher, benefiting from
strong wheat procurement results and timing effects. North American
liquid sweeteners were negatively impacted by higher input and
manufacturing costs.
Bioproducts results were down, as positive results from
effective ethanol risk management as well as beverage and
industrial alcohols were offset by an extremely weak ethanol
industry margin environment.
Decatur plant downtime issues continued to impact North American
results.
Nutrition results were in line with
the prior-year period, with very strong WFSI results offset by a
weaker performance in Animal Nutrition.
WFSI results were significantly higher year over year. The
business delivered 10 percent year-over-year sales growth on a
constant currency basis, and more than 30 percent growth in
operating profit. WILD EMEA and North America results were
substantially higher on portfolio mix and improved volumes. In
Specialty Ingredients, emulsifiers and proteins continued to
perform well. The Health & Wellness business continued to grow
with the addition of Protexin.
In Animal Nutrition, issues that developed during the quarter
constrained lysine production volumes and increased manufacturing
costs, contributing to lower year-over-year results. Lower premix
margins also impacted results.
Other results increased due to
improved captive performance underwriting performance.
Other Items of Note
ADM made changes to its segment reporting in the first quarter
of 2018 to reflect the company’s new operating structure. To assist
in reconciling the new segment results to the prior presentation,
the table on page 11 provides financial information under the
historical segmentation.
As additional information to help clarify underlying business
performance, the table on page nine includes reported earnings and
EPS as well as adjusted earnings and EPS.
Segment operating profit of $881 million for the quarter
includes gains of $21 million ($0.04 per share) related to the sale
of a business and an equity investment, as well as a $1 million
charge related to a settlement.
In Corporate results, unallocated corporate costs for the
quarter increased principally due to performance-related
compensation accruals. Higher project spending in information
technology and growth-related projects also contributed to the
increase.
Other charges for the quarter in Corporate improved due to
better results from the company’s investment in Compagnie
Industrielle et Financiere des Produits Amylaces SA (CIP).
The effective tax rate for the quarter was approximately 15
percent, up from approximately 13 percent in the prior year. The
current quarter rate includes the effects of U.S. tax reform and
the 2017 biodiesel tax credit recorded in the first quarter, along
with certain favorable second quarter discrete tax items which
impact the Company’s overall calendar-year rate.
Conference Call Information
ADM will host a webcast on November 6, 2018, at 8 a.m.
Central Time to discuss financial results and provide a company
update. A financial summary slide presentation will be available to
download approximately 60 minutes prior to the call. To listen to
the webcast or to download the slide presentation, 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 the above statements constitute forward-looking
statements. These statements 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.
About ADM
For more than a century, the people of Archer Daniels Midland
Company (NYSE: ADM) have transformed crops into products that serve
the vital needs of a growing world. Today, we’re one of the world’s
largest agricultural processors and food ingredient providers, with
approximately 31,000 employees serving customers in more than 170
countries. With a global value chain that includes approximately
500 crop procurement locations, 270 food and feed ingredient
manufacturing facilities, 44 innovation centers and the world’s
premier crop transportation network, we connect the harvest to the
home, making products for food, animal feed, industrial and energy
uses. Learn more at www.adm.com.
Financial Tables Follow
Segment Operating Profit, Adjusted Segment Operating
Profit (a non-GAAP measure) and Corporate Results
(unaudited)
Quarter ended Nine months
ended September 30 September 30
(In millions) 2018 2017 Change 2018
2017 Change
Segment Operating Profit
$ 881 $ 485 $ 396
$ 2,487 $ 1,803 $
684 Specified items: (Gains) losses on sales of assets and
businesses (21 ) (12 ) (9 ) (21 ) (20 ) (1 ) Impairment,
restructuring, and settlement charges 1 63 (62 ) 36 98 (62 ) Hedge
timing effects — 5 (5 ) —
(4 ) 4
Adjusted Segment Operating Profit
$ 861 $ 541 $ 320
$ 2,502 $ 1,877 $ 625
Origination $ 129
$ 39 $ 90 $
363 $ 143 $
220 Merchandising and handling 93 25 68 293 94 199
Transportation 36 14 22 70 49 21
Oilseeds $
349 $ 113 $
236 $ 1,042 $
624 $ 418 Crushing and
origination 221 36 185 493 192 301 Refining, packaging, biodiesel,
and other 48 61 (13 ) 308 196 112 Asia 80 16 64 241 236 5
Carbohydrate Solutions $ 288
$ 300 $ (12 )
$ 748 $ 793
$ (45 ) Starches and sweeteners 245 251 (6 )
699 705 (6 ) Bioproducts 43 49 (6 ) 49 88 (39 )
Nutrition $ 67 $
68 $ (1 ) $
277 $ 239 $
38 WFSI 80 59 21 259 223 36 Animal Nutrition (13 ) 9
(22 ) 18 16 2
Other $ 28
$ 21 $ 7 $
72 $ 78 $
(6 ) Segment Operating Profit
$ 881 $ 485 $ 396
$ 2,487 $ 1,803 $ 684
Corporate Results $ (249 )
$ (260 ) $ 11
$ (739 ) $ (737
) $ (2 ) Interest expense
- net (80 ) (72 ) (8 ) (236 ) (232 ) (4 ) Unallocated corporate
costs (161 ) (109 ) (52 ) (487 ) (359 ) (128 ) Other charges (4 )
(24 ) 20 (28 ) (92 ) 64 Specified items: LIFO credit (charge) (7 )
— (7 ) 14 4 10 Adjustments related to acquisitions 4 — 4 4 — 4 Loss
on debt extinguishment — (11 ) 11 — (11 ) 11 Restructuring charges
(1 ) (44 ) 43 (6 ) (47 ) 41
Earnings Before Income Taxes $
632 $ 225 $
407 $ 1,748
$ 1,066 $ 682
Segment operating profit is ADM’s consolidated income from
operations before income tax excluding corporate items. Adjusted
segment operating profit, a non-GAAP measure, is segment operating
profit excluding specified items and timing effects. Timing effects
relate to hedge ineffectiveness and mark-to-market hedge timing
effects. 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 and significant timing effects. 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 2018 2017 2018
2017 (in millions, except per share amounts)
Revenues $ 15,800 $ 14,827 $ 48,394 $ 44,758 Cost of products sold
(1) 14,742 14,015 45,266 42,182 Gross
profit 1,058 812 3,128 2,576 Selling, general, and administrative
expenses 534 478 1,607 1,519 Asset impairment, exit, and
restructuring costs (2) 1 107 41 140 Equity in (earnings) losses of
unconsolidated affiliates (131 ) (46 ) (378 ) (327 ) Interest
income (40 ) (27 ) (115 ) (75 ) Interest expense 87 79 267 246
Other (income) expense - net (3,4) (25 ) (4 ) (42 ) 7
Earnings before income taxes 632 225 1,748 1,066 Income tax expense
(5) 96 30 250 256 Net earnings
including noncontrolling interests 536 195 1,498 810
Less: Net earnings (losses) attributable to
noncontrolling interests — 3 3 3
Net
earnings attributable to ADM $ 536
$ 192 $ 1,495 $
807 Diluted earnings per common share
$ 0.94 $ 0.34 $ 2.64
$ 1.41 Average number of shares outstanding
568 569
567 574
(1) Includes a charge (credit) related to changes in the
Company’s LIFO reserves of $7 million and ($14 million) in the
current quarter and YTD, respectively, and $0 and ($4 million) in
the prior quarter and YTD, respectively.
(2) Includes restructuring charges of $1 million in the current
quarter and charges related to impairment of certain assets and
restructuring charges of $41 million in the current YTD and $107
million and $140 million, in the prior quarter and YTD,
respectively.
(3) Includes current quarter and YTD gains of $21 million
related to the sale of a business and an equity investment, prior
quarter gains of $12 million related to the sale of an asset and an
adjustment of the proceeds of the 2015 sale of the cocoa business,
and prior YTD gains related to the sale of the crop risk services
business ($77 million) and the sale of an asset ($6 million),
partially offset by an adjustment of the proceeds of the 2015 sale
of the cocoa business of $63 million.
(4) Includes a settlement charge of $1 million in the current
quarter and YTD and a debt extinguishment charge of $11 million
related to the early redemption of the Company’s $559 million notes
due on March 15, 2018 and a settlement charge of $5 million in the
prior YTD.
(5) Includes the tax expense (benefit) impact of the above
specified items and tax discrete items totaling $3 million and ($11
million) in the current quarter and YTD, respectively, and ($40
million) and ($13 million) in the prior quarter and YTD,
respectively.
Summary of Financial Condition
(unaudited)
September 30, September 30, 2018
2017 (in millions)
Net Investment In Cash and cash
equivalents (a) $ 915 $ 518 Short-term marketable securities (a) —
261 Operating working capital (b) 8,024 7,229 Property, plant, and
equipment 9,885 9,956 Investments in and advances to affiliates
5,293 4,972 Long-term marketable securities 26 207 Goodwill and
other intangibles 4,065 3,939 Other non-current assets 930
755
$ 29,138 $ 27,837
Financed By Short-term debt (b) $ 532 $ 728 Long-term debt,
including current maturities (b) 7,320 6,608 Deferred liabilities
2,240 2,871 Temporary equity 46 53 Shareholders’ equity 19,000
17,577
$ 29,138 $ 27,837
(a) Net debt is calculated as short-term debt plus long-term
debt, including current maturities less cash and cash equivalents
and short-term marketable securities. (b) Current assets (excluding
cash and cash equivalents and short-term marketable securities)
less current liabilities (excluding short-term debt and current
maturities of long-term debt).
Summary of Cash Flows
(unaudited)
Nine months ended September 30 2018
2017 (in millions)
Operating Activities
Net earnings $ 1,498 $ 810 Depreciation and amortization 706 684
Asset impairment charges 33 81 Gains on sales of assets (45 ) (66 )
Other - net (286 ) 91 Change in deferred consideration in
securitized receivables(a) (5,413 ) (5,404 ) Other changes in
operating assets and liabilities (173 ) 555 Total Operating
Activities
(3,680 ) (3,249 )
Investing Activities Purchases of property, plant and
equipment (555 ) (696 ) Net assets of businesses acquired (324 )
(187 ) Proceeds from sale of business/assets 177 172 Investments in
retained interest in securitized receivables(a) (3,391 ) (3,089 )
Proceeds from retained interest in securitized receivables(a) 8,804
8,493 Marketable securities - net — 73 Investments in and advances
to affiliates (127 ) (281 ) Other investing activities (9 ) (14 )
Total Investing Activities
4,575 4,471
Financing Activities Long-term debt borrowings 762 509
Long-term debt payments (13 ) (840 ) Net borrowings (payments)
under lines of credit (317 ) 558 Share repurchases — (676 ) Cash
dividends (568 ) (544 ) Other 32 4 Total Financing
Activities
(104 ) (989 )
Increase (decrease) in cash, cash equivalents, restricted cash,
and restricted cash equivalents 791 233 Cash,
cash equivalents, restricted cash, and restricted cash equivalents
- beginning of period 1,858 1,561
Cash, cash equivalents, restricted cash, and restricted cash
equivalents - end of period $ 2,649
$ 1,794
(a) Cash flows related to the Company’s retained interest in
securitized receivables as required by ASU 2016-15 which took
effect January 1, 2018. Prior period amounts have been restated to
conform to the current presentation.
Segment Operating Analysis
(unaudited)
Quarter ended Nine months ended
September 30 September 30 2018 2017 2018
2017 (in ‘000s metric tons)
Processed volumes (by
commodity) Oilseeds 9,181 8,265 27,303 25,602
Corn 5,599 5,467 16,708 16,851 Total
processed volumes
14,780 13,732
44,011 42,453 Quarter ended Nine
months ended September 30 September 30 2018 2017
2018 2017 (in millions)
Revenues Origination $
5,850 $ 5,502 $ 18,671 $ 17,152 Oilseeds 6,410 5,735 18,760 17,013
Carbohydrate Solutions 2,534 2,607 7,782 7,627 Nutrition 922 885
2,890 2,673 Other 84 98 291 293 Total revenues
$ 15,800 $ 14,827
$ 48,394 $ 44,758
Adjusted Earnings Per Share A non-GAAP financial
measure
(unaudited)
Quarter ended Nine months ended
September 30 September 30 2018 2017 2018 2017 In
millions Per share In millions Per share In
millions Per share In millions Per share
Net earnings and fully diluted EPS $ 536
$ 0.94 $ 192
$ 0.34 $ 1,495 $
2.64 $ 807 $ 1.41
Adjustments: LIFO charge (credit) (a) 5 0.01 — — (11 ) (0.02 ) (2 )
— Losses (gains) on sales of assets and businesses (b) (20 ) (0.04
) (10 ) (0.02 ) (20 ) (0.04 ) 12 0.02 Asset impairment,
restructuring, and settlement charges (c) 2 — 69 0.12 30 0.05 98
0.17 Loss on debt extinguishment (d) — — 7 0.01 — — 7 0.01
Adjustments related to acquisitions (e) (3 ) — — — (3 ) — — — Tax
adjustment (f) 3 0.01 — —
(4 ) (0.01 ) 4 0.01 Sub-total
adjustments (13 ) (0.02 ) 66 0.11
(8 ) (0.02 ) 119 0.21
Adjusted net earnings and adjusted EPS $ 523
$ 0.92 $
258 $ 0.45 $
1,487 $ 2.62
$ 926 $ 1.62 (a)
Current quarter and YTD changes in the Company’s LIFO reserves of
$7 million and $14 million pretax, respectively ($5 million and $11
million after tax, respectively), tax effected using the Company’s
U.S. income tax rate. Prior quarter and YTD changes in the
Company’s LIFO reserves of $0 and $4 million pretax, respectively
($0 and $2 million after tax, respectively), tax effected using the
Company’s U.S. income tax rate. (b) Current quarter and YTD gains
of $21 million pretax ($20 million after tax) related to the sale
of a business and an equity investment, tax effected using the
applicable tax rates. Prior quarter gains of $12 million pretax
($10 million after tax) related to an adjustment of the proceeds of
the 2015 sale of the cocoa business and a gain on sale of asset,
tax effected using the applicable tax rates. Prior YTD gain of $20
million pretax ($12 million loss after tax) related to the sale of
the crop risk services business partially offset by an adjustment
of the proceeds of the 2015 sale of the cocoa business, tax
effected using the applicable tax rates. (c) Current quarter
charges of $2 million pretax and after tax related to restructuring
charges and a settlement charge, tax effected using the applicable
tax rates. YTD charges of $42 million pretax ($30 million after
tax) related to impairment of certain assets, restructuring charges
and a settlement charge, tax effected using the applicable tax
rates. Prior quarter charges of $107 million pretax ($69 million
after tax) related to impairment of certain long-lived assets and
restructuring charges, tax effected using the applicable tax rates.
Prior YTD charges of $145 million pretax ($98 million after tax)
related to impairment of certain long-lived assets, restructuring
charges, and a settlement charge, tax effected using the applicable
tax rates. (d) Debt extinguishment charge of $11 million pretax ($7
million after tax) related to the early redemption of the Company’s
$559 million notes due on March 15, 2018. (e) Acquisition
adjustment of $4 million pretax ($3 million after tax) related to
net gains on foreign exchange derivative contracts to economically
hedge certain acquisitions. (f) Tax adjustment due to changes in
the provisional tax amount related to the enactment of the Tax Cuts
and Jobs Act and certain discrete items totaling $3 million in the
current quarter and $4 million YTD and a discrete tax adjustment of
$4 million in the prior YTD period.
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, 2017 Mar. 31, 2018
June 30, 2018 Sep. 30, 2018 Sep. 30, 2018
Net earnings attributable to ADM $ 788 $ 393 $ 566 $ 536
$ 2,283 Adjustments: Interest expense 84 91 89 87
351 LIFO 2 (8 ) (13 ) 7
(12 ) Other
adjustments (3) (303 ) 2 31 (20 )
(290
) Total adjustments (217 ) 85 107 74
49 Tax on
adjustments (55 ) (24 ) (26 ) (21 )
(126 ) Net
adjustments (272 ) 61 81 53
(77
) Total Adjusted ROIC Earnings $ 516 $ 454 $
647 $ 589
$ 2,206
Adjusted Invested Capital (in millions)
Quarter Ended Trailing Four
Dec. 31, 2017 Mar. 31, 2018 June 30, 2018
Sep. 30, 2018 Quarter Average Equity (1) $
18,313 $ 18,732 $ 18,710 $ 18,987
$ 18,686 +
Interest-bearing liabilities (2) 7,493 9,000 7,630 7,857
7,995 + LIFO adjustment (net of tax) 46 49 39 44
45
Other adjustments (3) (326 ) (2 ) 23 (18 )
(81
) Total Adjusted Invested Capital $ 25,526 $ 27,779
$ 26,402 $ 26,870
$ 26,645
Adjusted Return on Invested Capital
8.3 %
(1)
Excludes noncontrolling interests
(2)
Includes short-term debt, current
maturities of long-term debt, capital lease obligations, and
long-term debt
(3)
Includes the impact of U.S. tax reform
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, changes in
the LIFO reserve and other 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 the LIFO reserve, and other specified items.
Management believes Adjusted ROIC is a useful financial measure
because it provides investors information about ADM’s returns
excluding the impacts of LIFO inventory reserves and other
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.
Segment Operating Profit, Adjusted Segment Operating
Profit (a non-GAAP measure) as Currently Reported vs Previous
Segments
(unaudited)
Quarter ended Nine
months ended September 30, 2018 September 30, 2018 As
As Currently Currently As Currently Reported Pro
Forma Reported Pro Forma Reported
Pro Forma (In millions)
Segment Operating
Profit Segment Operating Profit $ 881
$ 881 $ 2,487 $ 2,487
Specified items: Specified items: (Gains) losses on sales of assets
and businesses (Gains) losses on sales of assets and businesses (21
) (21 ) (21 ) (21 ) Impairment and restructuring charges Impairment
and restructuring charges 1 1 36
36
Adjusted Segment Operating Profit
Adjusted Segment Operating Profit $ 861
$ 861 $ 2,502 $ 2,502
Origination Agricultural Services $
129 $ 198 $
363 $ 517
Merchandising and handling Merchandising and handling 93 83 293 274
Transportation Transportation 36 36 70 70 Milling and Other — 79 —
173
Oilseeds Oilseeds $ 349
$ 349 $
1,042 $ 1,058
Crushing and origination Crushing and origination 221 221 493 496
Refining, packaging, biodiesel, & other Refining, packaging,
biodiesel, & other 48 46 308 320 Asia
Asia
80 82 241 242
Carbohydrate Solutions Corn
Processing $ 288 $
208 $ 748 $
598 Starches and sweeteners Sweeteners and Starches
245 174 699 541 Bioproducts Bioproducts 43 34 49 57
Nutrition Wild Flavors & Specialty Ingredients
$ 67 $ 78
$ 277 $ 257
WFSI Wild Flavors & Specialty Ingredients 80 78 259 257 Animal
Nutrition (13 ) — 18 —
Other Other $
28 $ 28 $ 72 $ 72
Segment operating profit is ADM’s consolidated income from
operations before income tax excluding corporate items. Adjusted
segment operating profit, a non-GAAP measure, is segment operating
profit excluding specified items and timing effects. Timing effects
relate to hedge ineffectiveness and mark-to-market hedge timing
effects. 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 and significant timing effects. 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.
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Archer Daniels Midland CompanyMedia
RelationsJackie Anderson312-634-8484orInvestor
RelationsVictoria de la Huerga312-634-8457
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