ADM(US:ADM)2025-08-05 20:03markdown PART I. FINANCIAL INFORMATION [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited consolidated financial statements of Archer-Daniels-Midland Company for the three and six months ended June 30, 2025 and 2024, including statements of earnings, comprehensive income (loss), balance sheets, cash flows, and shareholders' equity, along with detailed notes to the financial statements [Consolidated Statements of Earnings](index=4&type=section&id=a)%20Statements%20of%20Earnings) Consolidated Statements of Earnings (Three Months Ended June 30): | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenues | $21,166 | $22,248 | $(1,082) | -4.86% | | Gross Profit | $1,370 | $1,396 | $(26) | -1.86% | | Earnings Before Income Taxes | $279 | $596 | $(317) | -53.19% | | Net Earnings Attributable to ADM | $219 | $486 | $(267) | -54.94% | | Basic EPS | $0.45 | $0.99 | $(0.54) | -54.55% | | Diluted EPS | $0.45 | $0.98 | $(0.53) | -54.08% | | Dividends per common share | $0.51 | $0.50 | $0.01 | 2.00% | Consolidated Statements of Earnings (Six Months Ended June 30): | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenues | $41,341 | $44,095 | $(2,754) | -6.25% | | Gross Profit | $2,550 | $3,055 | $(505) | -16.53% | | Earnings Before Income Taxes | $632 | $1,481 | $(849) | -57.33% | | Net Earnings Attributable to ADM | $514 | $1,215 | $(701) | -57.70% | | Basic EPS | $1.06 | $2.42 | $(1.36) | -56.20% | | Diluted EPS | $1.06 | $2.41 | $(1.35) | -56.02% | | Dividends per common share | $1.02 | $1.00 | $0.02 | 2.00% | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=b)%20Statements%20of%20Comprehensive%20Income%20(Loss)) Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30): | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Net Earnings Including Non-controlling Interests | $217 | $481 | $(264) | -54.89% | | Total other comprehensive income (loss), net of tax | $316 | $(311) | $627 | -201.61% | | Total comprehensive income | $533 | $170 | $363 | 213.53% | | Comprehensive income attributable to ADM | $535 | $176 | $359 | 203.98% | Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30): | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Net Earnings Including Non-controlling Interests | $509 | $1,200 | $(691) | -57.58% | | Total other comprehensive income (loss), net of tax | $196 | $(397) | $593 | -149.37% | | Total comprehensive income | $705 | $803 | $(98) | -12.20% | | Comprehensive income attributable to ADM | $710 | $822 | $(112) | -13.63% | [Consolidated Balance Sheets](index=6&type=section&id=c)%20Balance%20Sheets) Consolidated Balance Sheets (as of June 30, 2025 vs. December 31, 2024): | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :----------------------- | :--------------------------- | :---------------- | :--------- | | Total Current Assets | $26,292 | $27,718 | $(1,426) | -5.14% | | Total Non-Current Assets | $25,704 | $25,553 | $151 | 0.59% | | Total Assets | $51,996 | $53,271 | $(1,275) | -2.39% | | Total Current Liabilities | $18,471 | $19,938 | $(1,467) | -7.36% | | Total Long-Term Liabilities | $10,838 | $10,902 | $(64) | -0.59% | | Total Shareholders' Equity | $22,438 | $22,178 | $260 | 1.17% | [Consolidated Statements of Cash Flows](index=7&type=section&id=d)%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (Six Months Ended June 30): | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Net cash provided by operating activities | $3,956 | $1,168 | $2,788 | 238.70% | | Net cash used in investing activities | $(391) | $(1,612) | $1,221 | -75.74% | | Net cash used in financing activities | $(1,579) | $(661) | $(918) | 138.88% | | Increase (Decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | $2,020 | $(1,119) | $3,139 | -280.52% | | Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period | $5,944 | $4,271 | $1,673 | 39.17% | [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=e)%20Statements%20of%20Shareholders'%20Equity) Shareholders' Equity Attributable to Archer-Daniels-Midland Company (June 30, 2025 vs. December 31, 2024): | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------------- | :----------------------- | :--------------------------- | :---------------- | :--------- | | Common Stock | $3,270 | $3,223 | $47 | 1.46% | | Reinvested Earnings | $21,952 | $21,933 | $19 | 0.09% | | Accumulated Other Comprehensive (Loss) | $(2,792) | $(2,988) | $196 | -6.56% | | Total Shareholders' Equity | $22,438 | $22,178 | $260 | 1.17% | [Notes to Consolidated Financial Statements](index=9&type=section&id=f)%20Notes%20to%20Financial%20Statements) [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) This note outlines the accounting principles used, including U.S. GAAP for interim financial information, consolidation principles for subsidiaries and VIEs, and the treatment of segregated cash and investments. It also details the Company's policies for receivables, inventories, cost method investments, and investments in affiliates, including the evaluation of impairment for its investment in Wilmar - The Company's Consolidated Financial Statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions[22](index=22&type=chunk) - The Company consolidates all entities where it has a controlling financial interest, including Variable Interest Entities (VIEs) where it is the primary beneficiary[25](index=25&type=chunk) - Segregated cash and investments, totaling **$4,887 million** as of June 30, 2025, are held for regulatory, commodity exchange, and insurance requirements[26](index=26&type=chunk)[29](index=29&type=chunk) - The allowance for estimated uncollectible accounts decreased from **$167 million** at January 1, 2025, to **$153 million** at June 30, 2025[33](index=33&type=chunk) Inventories (in millions): | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Raw materials and supplies | $1,694 | $1,922 | | Finished goods | $2,670 | $2,689 | | Market inventories | $5,359 | $6,961 | | **Total inventories** | **$9,723** | **$11,572** | - The Company recognized **impairment losses** of **$187 million** on cost method investments during the six months ended June 30, 2025[39](index=39&type=chunk) - The Company's **22.5%** investment in Wilmar International Limited had a carrying value of **$3.7 billion** and a market value of **$3.2 billion** as of June 30, 2025, but was not considered other-than-temporarily impaired[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 2. New Accounting Pronouncements](index=13&type=section&id=Note%202.%20New%20Accounting%20Pronouncements) This note details upcoming accounting standard updates, including ASU 2023-09 for income tax disclosures (effective December 31, 2025), ASU 2024-03 for income statement expense disaggregation (effective December 31, 2027), and ASU 2025-03 for determining the accounting acquirer in VIE business combinations (effective January 1, 2027). The Company expects these to result in expanded disclosures but not significant impacts on its consolidated financial statements, except for ASU 2025-03 which is still being evaluated - ASU 2023-09 (Income Taxes) will be adopted by December 31, 2025, enhancing income tax disclosures but not significantly impacting financial statements[50](index=50&type=chunk) - ASU 2024-03 (Expense Disaggregation) will be adopted by December 31, 2027, requiring tabular disclosure of operating expenses but not significantly impacting financial statements[51](index=51&type=chunk) - ASU 2025-03 (Business Combinations) will be adopted by January 1, 2027, amending the framework for identifying accounting acquirers in VIEs; the impact is currently being evaluated[52](index=52&type=chunk) [Note 3. Revenues](index=14&type=section&id=Note%203.%20Revenues) This note disaggregates revenue by timing of recognition (point in time vs. over time) and major product lines for the three and six months ended June 30, 2025 and 2024. It also provides a description of revenue recognition for each segment: Ag Services and Oilseeds, Carbohydrate Solutions, Nutrition, and Other Business Total Revenues by Segment (Three Months Ended June 30): | Segment | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Ag Services and Oilseeds | $16,269 | $17,333 | $(1,064) | -6.14% | | Carbohydrate Solutions | $2,792 | $2,894 | $(102) | -3.52% | | Nutrition | $1,993 | $1,908 | $85 | 4.45% | | Other Business | $112 | $113 | $(1) | -0.88% | | **Total Revenues** | **$21,166** | **$22,248** | **$(1,082)** | **-4.86%** | Total Revenues by Segment (Six Months Ended June 30): | Segment | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Ag Services and Oilseeds | $31,944 | $34,552 | $(2,608) | -7.55% | | Carbohydrate Solutions | $5,362 | $5,577 | $(215) | -3.86% | | Nutrition | $3,810 | $3,744 | $66 | 1.76% | | Other Business | $225 | $222 | $3 | 1.35% | | **Total Revenues** | **$41,341** | **$44,095** | **$(2,754)** | **-6.25%** | - Ag Services and Oilseeds revenue is generated from commodity sales, transportation service fees, manufactured products, and structured trade finance activities[60](index=60&type=chunk) - Carbohydrate Solutions revenue comes from products manufactured at corn and wheat milling facilities, with recognition upon transfer of control to the customer[62](index=62&type=chunk) - Nutrition segment revenue is from the sale of ingredients and solutions, including plant-based proteins, flavors, and animal nutrition products, recognized when control is transferred[64](index=64&type=chunk) [Note 4. Acquisitions](index=17&type=section&id=Note%204.%20Acquisitions) On January 31, 2025, the Company acquired Vandamme Hugaria Kft, a non-genetically modified crush and extraction facility in Hungary, for $123 million cash. This acquisition enhances the Ag Services and Oilseeds and Carbohydrate Solutions segments, with $95 million aggregate cash consideration (net of cash acquired) allocated to working capital, property, plant, and equipment, goodwill, and other intangible assets - On January 31, 2025, ADM acquired Vandamme Hugaria Kft for **$123 million** cash, adding capabilities to its Ag Services and Oilseeds and Carbohydrate Solutions segments[67](index=67&type=chunk) Vandamme Acquisition Cash Consideration Allocation (in millions): | Category | Amount | | :-------------------------------- | :----- | | Working capital, net of cash acquired | $24 | | Property, plant, and equipment | $27 | | Goodwill | $25 | | Other intangible assets | $22 | | Deferred tax liabilities | $(3) | | **Aggregate cash consideration, net of cash acquired** | **$95** | - Goodwill from the acquisition is primarily due to expected synergies and is not expected to be tax deductible[70](index=70&type=chunk) [Note 5. Fair Value Measurements](index=18&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note details the Company's fair value measurements for certain assets and liabilities, categorized into Level 1, Level 2, and Level 3 inputs. It provides tables of fair value measurements for June 30, 2025, and December 31, 2024, and roll forwards of Level 3 assets and liabilities, explaining the inputs and methodologies used for inventories, derivative gains/losses, cash equivalents, marketable securities, and segregated investments - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) Fair Value Measurements at June 30, 2025 (in millions): | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :------ | | **Assets:** | | | | | | Inventories carried at market | — | $2,652 | $2,707 | $5,359 | | Unrealized derivative gains | — | $614 | $596 | $1,210 | | Cash equivalents | $447 | — | — | $447 | | Marketable securities | $9 | — | — | $9 | | Segregated investments and restricted cash equivalents | $1,902 | — | — | $1,902 | | **Total Assets** | **$2,358** | **$3,266** | **$3,303** | **$8,927** | | **Liabilities:** | | | | | | Unrealized derivative losses | — | $735 | $385 | $1,120 | | Inventory-related payables | — | $933 | $41 | $974 | | **Total Liabilities** | **—** | **$1,668** | **$426** | **$2,094** | - Inventories and inventory-related payables are valued based on exchange-quoted prices adjusted for local market differences (basis), with Level 3 classification when unobservable inputs significantly impact fair value[79](index=79&type=chunk)[81](index=81&type=chunk) - Commodity derivative contracts are valued based on exchange-quoted prices adjusted for local market differences (basis), with Level 3 classification when unobservable inputs significantly impact fair value[83](index=83&type=chunk)[86](index=86&type=chunk) [Note 6. Derivative Instruments and Hedging Activities](index=23&type=section&id=Note%206.%20Derivative%20Instruments%20and%20Hedging%20Activities) This note details the Company's use of derivative instruments, both those not designated as hedging instruments (primarily for managing price risk and enhancing margins in commodity and foreign currency markets) and those designated as hedging instruments (cash flow, fair value, and net investment hedges). It provides fair value data and pre-tax gains/losses recognized in earnings for both categories - The Company uses exchange-traded and OTC commodity instruments to manage price risk and enhance margins, with changes in fair value recognized in Cost of products sold[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) Fair Value of Derivatives Not Designated as Hedging Instruments (in millions): | Category | June 30, 2025 (Assets) | June 30, 2025 (Liabilities) | December 31, 2024 (Assets) | December 31, 2024 (Liabilities) | | :----------------------- | :--------------------- | :-------------------------- | :------------------------- | :-------------------------- | | Foreign Currency Contracts | $181 | $158 | $272 | $102 | | Commodity Contracts | $1,010 | $708 | $828 | $760 | | **Total** | **$1,191** | **$866** | **$1,100** | **$862** | Pre-tax Gains (Losses) on Derivatives Not Designated as Hedging Instruments (Three Months Ended June 30, in millions): | Category | Revenues | Cost of products sold | Other (income) - net | Total | | :----------------------- | :------- | :-------------------- | :------------------- | :---- | | Foreign Currency Contracts | $(22) | $81 | $(90) | $(31) | | Commodity Contracts | — | $327 | — | $327 | | **Total** | **$(22)** | **$408** | **$(90)** | **$296** | Pre-tax Gains (Losses) on Derivatives Not Designated as Hedging Instruments (Six Months Ended June 30, in millions): | Category | Revenues | Cost of products sold | Other (income) - net | Total | | :----------------------- | :------- | :-------------------- | :------------------- | :---- | | Foreign Currency Contracts | $(46) | $231 | $(158) | $27 | | Commodity Contracts | — | $440 | — | $440 | | **Total** | **$(46)** | **$671** | **$(158)** | **$467** | - The Company uses cash flow hedges for anticipated corn and soybean purchases/sales and natural gas consumption, with after-tax losses of **$29 million** in AOCI as of June 30, 2025[119](index=119&type=chunk)[120](index=120&type=chunk)[123](index=123&type=chunk) - Fair value hedges are used for interest rate swaps to protect fixed-rate debt, resulting in pre-tax gains of **$19 million** in Other current assets as of June 30, 2025[124](index=124&type=chunk)[125](index=125&type=chunk) - Net investment hedges (cross-currency swaps and foreign exchange forwards) are used to protect foreign subsidiaries, resulting in after-tax losses of **$180 million** in AOCI as of June 30, 2025[126](index=126&type=chunk)[127](index=127&type=chunk) [Note 7. Other Current Assets](index=27&type=section&id=Note%207.%20Other%20Current%20Assets) This note provides a breakdown of the Company's other current assets, which totaled $4,310 million as of June 30, 2025, a decrease from $4,369 million at December 31, 2024. Key components include unrealized gains on derivative contracts, customer omnibus receivable, and margin deposits Other Current Assets (in millions): | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Unrealized gains on derivative contracts | $1,210 | $1,108 | | Customer omnibus receivable | $1,151 | $872 | | Margin deposits and grain accounts | $493 | $516 | | Financing receivables - net | $167 | $258 | | Insurance premiums receivable | $67 | $76 | | Prepaid expenses | $331 | $279 | | Biodiesel tax credit | $4 | $104 | | Tax receivables | $484 | $539 | | Non-trade receivables | $263 | $393 | | Other current assets | $140 | $224 | | **Total** | **$4,310** | **$4,369** | [Note 8. Accrued Expenses and Other Payables](index=28&type=section&id=Note%208.%20Accrued%20Expenses%20and%20Other%20Payables) This note details the components of accrued expenses and other payables, which decreased from $3,730 million at December 31, 2024, to $3,466 million at June 30, 2025. The decrease was primarily driven by a significant reduction in contract liabilities Accrued Expenses and Other Payables (in millions): | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Unrealized losses on derivative contracts | $1,120 | $972 | | Accrued compensation | $341 | $346 | | Income tax payable | $108 | $167 | | Other taxes payable | $167 | $138 | | Insurance liabilities | $109 | $172 | | Accrued interest payable | $159 | $153 | | Other deferred income | $130 | $156 | | Contract liabilities | $193 | $534 | | Other accruals and payables | $1,139 | $1,092 | | **Total** | **$3,466** | **$3,730** | - Revenues recognized from contract liabilities were **$201 million** for the three months and **$480 million** for the six months ended June 30, 2025[138](index=138&type=chunk) [Note 9. Debt and Financing Arrangements](index=28&type=section&id=Note%209.%20Debt%20and%20Financing%20Arrangements) This note provides information on the Company's debt and financing arrangements. As of June 30, 2025, the fair value of long-term debt was $7.2 billion (carrying value $7.6 billion), and total lines of credit were $12.5 billion, with $9.5 billion unused. Commercial paper outstanding was $721 million with a weighted average interest rate of 4.5% - **Fair value of long-term debt** (excluding current portion) was **$7.2 billion** at June 30, 2025, compared to a carrying value of **$7.6 billion**[139](index=139&type=chunk) - **Total lines of credit** were **$12.5 billion** at June 30, 2025, with **$9.5 billion** unused[140](index=140&type=chunk) - **Commercial paper outstanding** was **$721 million** at June 30, 2025, with a weighted average interest rate of **4.5%**[141](index=141&type=chunk) [Note 10. Income Taxes](index=28&type=section&id=Note%2010.%20Income%20Taxes) This note discusses the Company's effective tax rates, which increased to 22.2% for Q2 2025 (from 19.3% in Q2 2024) and 19.5% for H1 2025 (from 19.0% in H1 2024), primarily due to impairment losses. The Company is also evaluating the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) in the U.S., which is not expected to significantly impact current year financial statements Effective Tax Rate: | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Three Months Ended June 30 | 22.2% | 19.3% | | Six Months Ended June 30 | 19.5% | 19.0% | - The increase in the **effective tax rate** was primarily due to **impairment losses**, partially offset by discrete tax items[142](index=142&type=chunk) - The Company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, but does not expect a significant impact on current year financial statements[143](index=143&type=chunk) [Note 11. Shareholders' Equity](index=29&type=section&id=Note%2011.%20Shareholders'%20Equity) This note details changes in shareholders' equity, including treasury stock holdings and the share repurchase program. As of June 30, 2025, the Company held 235.7 million treasury shares. The Board approved an extension of the share repurchase program through December 31, 2029, authorizing an additional 100 million shares, with 115 million shares remaining under the program - As of June 30, 2025, the Company held approximately **235.7 million** common shares in treasury[146](index=146&type=chunk) - The Board of Directors approved an extension of the stock repurchase program through December 31, 2029, authorizing an additional **100 million** shares[147](index=147&type=chunk) - As of June 30, 2025, **115 million** shares remained under the share repurchase program[147](index=147&type=chunk) Accumulated Other Comprehensive Income (Loss) (AOCI) (June 30, 2025, in millions): | Component | Balance at April 1, 2025 | Net of Tax Amount (Q2 2025) | Balance at June 30, 2025 | | :--------------------------------------- | :----------------------- | :-------------------------- | :----------------------- | | Foreign Currency Translation Adjustment | $(3,094) | $357 | $(2,737) | | Deferred Gain (Loss) on Cash Flow Hedging Activities | $120 | $(46) | $74 | | Pension and Other Postretirement Benefit Liabilities | $(116) | $6 | $(110) | | Unrealized Gain (Loss) on Investments | $(18) | $(1) | $(19) | | **Total AOCI** | **$(3,108)** | **$316** | **$(2,792)** | [Note 12. Other Income – Net](index=31&type=section&id=Note%2012.%20Other%20Income%20%E2%80%93%20Net) This note details the components of Other income – net, which increased significantly for both the three and six months ended June 30, 2025, compared to the prior year. For the three months, it increased by $43 million to $52 million, and for the six months, it increased by $36 million to $71 million, primarily driven by gains on asset sales and benefits from a supply agreement termination Other Income – Net (in millions): | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gains on sale of assets | $(19) | $(5) | $(27) | $(7) | | Other – net | $(33) | $(4) | $(44) | $(28) | | **Other Income – Net** | **$(52)** | **$(9)** | **$(71)** | **$(35)** | [Note 13. Segment Information](index=31&type=section&id=Note%2013.%20Segment%20Information) This note provides detailed financial data for the Company's three reportable segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition, along with Other Business and Corporate. It outlines the nature of each segment's operations and how segment operating profit is used by the Chief Operating Decision Maker (CODM) to assess performance and allocate resources - The Company's operations are organized into three reportable segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition[156](index=156&type=chunk) - **Segment operating profit** is the primary measure used by the CODM to evaluate performance and allocate resources, excluding specified items and certain corporate items[157](index=157&type=chunk) Segment Operating Profit (Three Months Ended June 30, in millions): | Segment | 2025 | 2024 | Change (Millions) | Change (%) | | :-------------------------- | :--- | :--- | :---------------- | :--------- | | Ag Services and Oilseeds | $379 | $459 | $(80) | -17.43% | | Carbohydrate Solutions | $337 | $357 | $(20) | -5.60% | | Nutrition | $114 | $109 | $5 | 4.59% | | **Total Segment Operating Profit** | **$830** | **$925** | **$(95)** | **-10.27%** | Segment Operating Profit (Six Months Ended June 30, in millions): | Segment | 2025 | 2024 | Change (Millions) | Change (%) | | :-------------------------- | :--- | :--- | :---------------- | :--------- | | Ag Services and Oilseeds | $791 | $1,323 | $(532) | -40.21% | | Carbohydrate Solutions | $576 | $605 | $(29) | -4.79% | | Nutrition | $210 | $193 | $17 | 8.81% | | **Total Segment Operating Profit** | **$1,577** | **$2,121** | **$(544)** | **-25.65%** | Total Depreciation and Amortization Expense (in millions): | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $228 | $218 | $452 | $432 | | Amortization expense | $63 | $68 | $126 | $134 | [Note 14. Asset Impairment, Exit, and Restructuring Costs](index=38&type=section&id=Note%2014.%20Asset%20Impairment,%20Exit,%20and%20Restructuring%20Costs) This note details the significant increase in asset impairment, exit, and restructuring costs for the three and six months ended June 30, 2025. Total costs rose to $137 million (Q2 2025) from $7 million (Q2 2024) and to $175 million (H1 2025) from $25 million (H1 2024), primarily due to cost optimization and portfolio simplification initiatives, including charges within the Nutrition and Ag Services and Oilseeds segments Asset Impairment, Exit, and Restructuring Costs (in millions): | Charge Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restructuring and exit costs | $126 | — | $164 | $15 | | Impairment charge - other long-lived assets | $11 | $7 | $11 | $10 | | **Total** | **$137** | **$7** | **$175** | **$25** | - Restructuring charges for the six months ended June 30, 2025, included **$123 million** in Nutrition and **$27 million** in Ag Services and Oilseeds, primarily for impairment of long-lived assets, intangible assets, and employee termination benefits[190](index=190&type=chunk) - The Company announced targeted actions on February 4, 2025, to deliver over **$500 million** in **cost savings** by fiscal 2029 through **cost optimization** and **portfolio simplification**[190](index=190&type=chunk) [Note 15. Sale of Accounts Receivable](index=38&type=section&id=Note%2015.%20Sale%20of%20Accounts%20Receivable) This note describes the Company's accounts receivable securitization programs (First and Second Programs), which provide up to $3.0 billion in funding by selling trade receivables to purchasers. As of June 30, 2025, $2.2 billion in receivables were transferred and derecognized, with $780 million unused capacity. Total receivables sold for the six months ended June 30, 2025, were $22.7 billion, incurring $36 million in expenses classified as SG&A - The Company has two accounts receivable securitization programs providing up to **$3.0 billion** in funding[187](index=187&type=chunk)[188](index=188&type=chunk)[333](index=333&type=chunk) - As of June 30, 2025, **$2.2 billion** of trade receivables were transferred and derecognized, with **$780 million** unused capacity under the programs[192](index=192&type=chunk)[333](index=333&type=chunk) - **Total receivables sold** were **$22.7 billion** for the six months ended June 30, 2025, resulting in **$36 million** in expenses classified as Selling, general, and administrative expenses[192](index=192&type=chunk)[193](index=193&type=chunk) [Note 16. Supplier Finance Programs](index=39&type=section&id=Note%2016.%20Supplier%20Finance%20Programs) This note describes the Company's Supplier Payable Programs (SPP) with financial institutions, which act as paying agents for certain suppliers. The Company's obligations to suppliers are not impacted by their participation in the SPP, and associated amounts remain classified in trade payables. The outstanding payment obligations under SPP increased to $285 million at June 30, 2025, from $222 million at January 1, 2025 - The Company uses Supplier Payable Programs (SPP) where financial institutions act as paying agents for suppliers, without impacting the Company's obligations[195](index=195&type=chunk) - Amounts associated with the SPP are classified in trade payables and operating activities in cash flows[195](index=195&type=chunk) Changes to Outstanding Payment Obligations (Six Months Ended June, in millions): | Item | 2025 | 2024 | | :-------------------- | :--- | :--- | | Opening balance, January 1 | $222 | $274 | | Obligations confirmed | $434 | $520 | | Obligations paid | $(371) | $(505) | | **Closing balance, June 30** | **$285** | **$289** | [Note 17. Legal Proceedings](index=40&type=section&id=Note%2017.%20Legal%20Proceedings) This note outlines the Company's involvement in various legal actions and government investigations, including commodities class actions related to alleged ethanol price manipulation, and ongoing SEC and DOJ investigations into intersegment sales. Shareholder derivative lawsuits have also been filed. The Company denies liability and is vigorously defending itself, but is unable to predict the final outcome or reasonably estimate potential losses for these matters - The Company is involved in commodities class actions alleging manipulation of ethanol benchmark prices, with **potential damages estimated between $500 million and over $2.0 billion**[202](index=202&type=chunk) - **Ongoing government investigations** by the SEC and DOJ relate to intersegment sales between the Nutrition segment and the Ag Services and Oilseeds and Carbohydrate Solutions segments[205](index=205&type=chunk) - **Shareholder litigation**, including a securities fraud class action and derivative lawsuits, has been filed following the investigation announcement, with the Company unable to predict outcomes or estimate losses[206](index=206&type=chunk)[207](index=207&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=42&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition and results of operations, covering its business overview, strategic priorities for 2025, sustainability efforts, and significant portfolio actions. It also analyzes the financial performance for the three and six months ended June 30, 2025, compared to the prior year, discusses market factors, and reconciles non-GAAP financial measures [Company Overview and Strategy](index=42&type=section&id=Company%20Overview%20and%20Strategy) - ADM is a global agricultural supply chain manager and processor, a human and animal nutrition provider, and an innovator in bio-based solutions[210](index=210&type=chunk) - The Company's 2025 strategy focuses on execution and cost management, strategic simplification, targeted growth investment, and disciplined capital deployment[213](index=213&type=chunk) - Key strategic initiatives include boosting plant efficiencies, optimizing operating leverage in Nutrition, reducing third-party spend, and executing portfolio optimization[213](index=213&type=chunk) - ADM announced targeted actions on February 4, 2025, to achieve over **$500 million** in **cost savings** by fiscal 2029 through **cost optimization** and **portfolio simplification**[216](index=216&type=chunk) - Significant portfolio actions include the acquisition of Vandamme Hugaria Kft, the closure of the Tres Corações facility in Brazil, and a joint venture with PYCO Industries, Inc. for cottonseed processing[221](index=221&type=chunk) [Market Factors Influencing Operations](index=44&type=section&id=Market%20Factors%20Influencing%20Operations) - Ag Services and Oilseeds segment faced **compressed margins** due to **increased global supplies** of grains and oilseeds, higher projected ending stocks-to-use ratios, and trade policy uncertainty[227](index=227&type=chunk) - Carbohydrate Solutions segment benefited from **strong ethanol export demand** offsetting higher industry production, but Starches and Sweeteners saw demand softness in North America and higher corn costs in EMEA[228](index=228&type=chunk) - Nutrition segment experienced mixed Human Nutrition demand due to affordability concerns, while Animal Nutrition benefited from declining commodity markets supporting feed ration and additive markets[229](index=229&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=45&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) - **Earnings before income taxes** decreased by **$317 million** to **$279 million**, primarily due to asset impairment, exit, and restructuring costs and **revaluation losses** on investments[231](index=231&type=chunk) - **Total segment operating profit** decreased by **$95 million** to **$830 million**, driven by **lower results** in Ag Services and Oilseeds and Carbohydrate Solutions[232](index=232&type=chunk) Processed Volumes (Three Months Ended June 30, in thousands of metric tons): | Product | 2025 | 2024 | Change | | :-------- | :--- | :--- | :----- | | Oilseeds | 9,051 | 8,872 | 179 | | Corn | 4,614 | 4,482 | 132 | - **Revenues** decreased by **$1.1 billion** to **$21.2 billion**, mainly due to **lower sales prices**, partially offset by higher sales volumes of soybeans and meal[239](index=239&type=chunk) - Gross profit decreased by **$26 million** (**2%**) to **$1.4 billion**, primarily due to a **$92 million** margin decrease in Ag Services and Oilseeds, partially offset by a **$48 million** margin increase in Nutrition[241](index=241&type=chunk) - **Asset impairment, exit, and restructuring costs** increased by **$130 million** to **$137 million**, largely from Nutrition segment restructuring charges and asset impairment[244](index=244&type=chunk) - Interest and investment (income) expense decreased by **$210 million** to **$70 million**, driven by **revaluation losses** and lower interest income[246](index=246&type=chunk) - Ag Services and Oilseeds segment operating profit decreased **17%**, impacted by lower Global Trade and South American Origination results, and lower Crushing margins due to increased industry capacity[252](index=252&type=chunk) - Carbohydrate Solutions segment operating profit decreased **6%**, with lower Starches and Sweeteners results due to higher corn costs in EMEA and lower starch margins in North America[254](index=254&type=chunk) - Nutrition segment operating profit increased **5%**, driven by **improved Animal Nutrition results** and **significant growth in Flavors**, despite lower Human Nutrition results[255](index=255&type=chunk) [Non-GAAP Financial Measures - Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=49&type=section&id=Non-GAAP%20Financial%20Measures%20-%20Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) - **Adjusted net earnings** and **adjusted diluted EPS** are non-GAAP measures used to evaluate underlying business performance and comparability[264](index=264&type=chunk) Adjusted Net Earnings and Adjusted Diluted EPS (Three Months Ended June 30): | Metric | 2025 (Millions) | 2025 (Per Share) | 2024 (Millions) | 2024 (Per Share) | | :--------------------------------------- | :-------------- | :--------------- | :-------------- | :--------------- | | Net earnings and reported EPS (diluted) | $219 | $0.45 | $486 | $0.98 | | Total adjustments | $233 | $0.48 | $22 | $0.05 | | **Adjusted net earnings and adjusted diluted EPS** | **$452** | **$0.93** | **$508** | **$1.03** | EBITDA and Adjusted EBITDA (Three Months Ended June 30, in millions): | Metric | 2025 | 2024 | | :--------------------------------------- | :--- | :--- | | EBITDA | $681 | $1,017 | | Adjustments (specified items) | $236 | $11 | | **Adjusted EBITDA** | **$931** | **$1,032** | Reconciliation of Earnings Before Income Taxes to Total Segment Operating Profit (Three Months Ended June 30, in millions): | Metric | 2025 | 2024 | | :--------------------------------------- | :--- | :--- | | Earnings Before Income Taxes | $279 | $596 | | Other Business (earnings) | $(94) | $(96) | | Corporate | $498 | $418 | | Specified Items | $147 | $(7) | | **Total Segment Operating Profit** | **$830** | **$925** | [Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=53&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) - **Earnings before income taxes** decreased by **$849 million** to **$632 million**, primarily due to **lower pricing**, execution margins, asset impairment, and **investment revaluation losses**[273](index=273&type=chunk) - **Total segment operating profit** decreased by **$544 million** to **$1.6 billion**, mainly driven by **lower results** in the Ag Services and Oilseeds segment[274](index=274&type=chunk) Processed Volumes (Six Months Ended June 30, in thousands of metric tons): | Product | 2025 | 2024 | Change | | :-------- | :--- | :--- | :----- | | Oilseeds | 18,142 | 18,259 | (117) | | Corn | 9,195 | 8,890 | 305 | - **Revenues** decreased by **$2.8 billion** to **$41.3 billion**, primarily due to **lower sales prices**, partially offset by higher sales volumes[280](index=280&type=chunk) - Gross profit decreased by **$505 million** (**17%**) to **$2.6 billion**, driven by a **$543 million** margin decrease in Ag Services and Oilseeds[282](index=282&type=chunk) - **Asset impairment, exit, and restructuring costs** increased by **$150 million** to **$175 million**, with significant charges in Nutrition and Ag Services and Oilseeds[285](index=285&type=chunk) - Interest and investment income decreased by **$195 million** to **$68 million**, mainly due to **revaluation losses** and lower interest income[287](index=287&type=chunk) - Ag Services and Oilseeds segment operating profit decreased **40%**, impacted by lower Global Trade results, **increased global supplies**, and competitive crushing margins[292](index=292&type=chunk) - Carbohydrate Solutions segment operating profit decreased **5%**, with lower Starches and Sweeteners results due to competitive pricing, but improved Vantage Corn Processors results[294](index=294&type=chunk) - Nutrition segment operating profit decreased **9%**, with lower Human Nutrition results due to higher costs and reduced tolling margins, partially offset by increased Flavors and Animal Nutrition operating profit[295](index=295&type=chunk) [Non-GAAP Financial Measures - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=57&type=section&id=Non-GAAP%20Financial%20Measures%20-%20Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) - **Adjusted net earnings**, **adjusted diluted EPS**, **EBITDA**, **adjusted EBITDA**, and **total segment operating profit** are non-GAAP measures used for performance evaluation and comparability[299](index=299&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk) Adjusted Net Earnings and Adjusted Diluted EPS (Six Months Ended June 30): | Metric | 2025 (Millions) | 2025 (Per Share) | 2024 (Millions) | 2024 (Per Share) | | :--------------------------------------- | :-------------- | :--------------- | :-------------- | :--------------- | | Net earnings and reported EPS (diluted) | $514 | $1.06 | $1,215 | $2.41 | | Total adjustments | $276 | $0.57 | $43 | $0.08 | | **Adjusted net earnings and adjusted diluted EPS** | **$790** | **$1.63** | **$1,258** | **$2.49** | EBITDA and Adjusted EBITDA (Six Months Ended June 30, in millions): | Metric | 2025 | 2024 | | :--------------------------------------- | :--- | :--- | | EBITDA | $1,434 | $2,297 | | Adjustments (specified items) | $304 | $29 | | **Adjusted EBITDA** | **$1,738** | **$2,330** | Reconciliation of Earnings Before Income Taxes to Total Segment Operating Profit (Six Months Ended June 30, in millions): | Metric | 2025 | 2024 | | :--------------------------------------- | :--- | :--- | | Earnings Before Income Taxes | $632 | $1,481 | | Other Business (earnings) | $(190) | $(217) | | Corporate | $939 | $844 | | Specified Items | $196 | $13 | | **Total Segment Operating Profit** | **$1,577** | **$2,121** | [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company aims for sufficient liquidity, balance sheet strength, and financial flexibility, relying on cash from operations and lines of credit[314](index=314&type=chunk)[315](index=315&type=chunk) - As of June 30, 2025, **total available liquidity** was **$10.5 billion**, comprising **$1.1 billion** in cash and cash equivalents and **$9.5 billion** in unused lines of credit[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) - **Cash provided by operating activities** increased significantly to **$4.0 billion** for the six months ended June 30, 2025, from **$1.2 billion** in the prior year, driven by changes in net working capital[319](index=319&type=chunk) - **Net cash used in investing activities** decreased to **$391 million** for the six months ended June 30, 2025, from **$1.6 billion** in the prior year, due to lower business acquisitions[324](index=324&type=chunk)[325](index=325&type=chunk) - **Net cash used in financing activities** increased to **$1.6 billion** for the six months ended June 30, 2025, from **$661 million** in the prior year, primarily due to net repayments under credit agreements and no share repurchases in 2025[326](index=326&type=chunk)[327](index=327&type=chunk) - The Company's share repurchase program was extended through December 31, 2029, with **115 million** shares remaining for repurchase as of June 30, 2025[331](index=331&type=chunk)[332](index=332&type=chunk) [Contractual Obligations and Critical Accounting Estimates](index=62&type=section&id=Contractual%20Obligations%20and%20Critical%20Accounting%20Estimates) - Purchase obligations increased to **$13.2 billion** as of June 30, 2025, with **$9.8 billion** expected to be paid within the next twelve months[335](index=335&type=chunk) - There were no material changes in the Company's critical accounting estimates during the three months ended June 30, 2025[336](index=336&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=62&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that the market risk inherent in the Company's instruments and positions is the potential loss from adverse changes in commodity market prices, foreign currency exchange rates, equity prices, and interest rates. For detailed information, readers are referred to the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - Market risk includes potential losses from adverse changes in commodity market prices, foreign currency exchange rates, equity prices, and interest rates[337](index=337&type=chunk) - Detailed information on market risk sensitive instruments and positions is available in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[338](index=338&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=63&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section reports on the effectiveness of the Company's disclosure controls and procedures, which were deemed effective as of June 30, 2025. It also details the remediation of a previously disclosed material weakness in internal control over financial reporting related to segment disclosures and intersegment sales, which has now been fully remediated through enhanced procedures and training [Evaluation of Disclosure Controls and Procedures](index=63&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The Company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[341](index=341&type=chunk) [Internal Control Over Financial Reporting](index=63&type=section&id=Internal%20Control%20Over%20Financial%20Reporting) - A **material weakness** in internal control over financial reporting related to accounting practices for segment disclosures and intersegment sales was identified in Q4 2023[342](index=342&type=chunk) - The weakness stemmed from **inadequate controls** around the measurement and reporting of intersegment sales and the application of segment disclosure requirements[342](index=342&type=chunk) [Remediation of Previously Disclosed Material Weakness in Internal Control over Financial Reporting](index=63&type=section&id=Remediation%20of%20Previously%20Disclosed%20Material%20Weakness) - The **material weakness** has been **fully remediated** through **enhanced procedures** and accounting policies for intersegment sales measurement, improved documentation of pricing guidelines, and enhanced design and execution of controls[343](index=343&type=chunk)[344](index=344&type=chunk) - Training for relevant personnel on intersegment sales measurement and accounting guidance has been provided and is ongoing[343](index=343&type=chunk) [Changes in Internal Control Over Financial Reporting](index=63&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No material changes to IT platforms occurred during the three months ended June 30, 2025[345](index=345&type=chunk) - The Company is reviewing and integrating internal control structures of the recently acquired Vandamme Hugaria Kft[347](index=347&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=64&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 17. Legal Proceedings in Part I, Item 1, for information regarding legal actions involving the Company, including commodities class actions, government investigations, and shareholder litigation - Information on legal proceedings is incorporated by reference from Note 17. Legal Proceedings in the Consolidated Financial Statements[349](index=349&type=chunk) [ITEM 1A. RISK FACTORS](index=64&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section directs readers to Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, for a comprehensive discussion of potential risks - Readers should refer to Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, for detailed risk factor information[350](index=350&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=64&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section provides information on purchases of equity securities by the Company during the three months ended June 30, 2025. The Company purchased 4,460 shares at an average price of $45.75, primarily representing shares received as payments for withholding taxes on vested restricted stock awards. No shares were purchased as part of a publicly announced program during this period, with 114,764,049 shares remaining under the extended repurchase program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025): | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------- | :----------------------------- | :--------------------------- | | April 1, 2025 to April 30, 2025 | 3,047 | $44.53 | | May 1, 2025 to May 31, 2025 | 935 | $48.51 | | June 1, 2025 to June 30, 2025 | 478 | $48.10 | | **Total** | **4,460** | **$45.75** | - **Total shares purchased** represent shares received as payments for withholding taxes on vested restricted stock awards[352](index=352&type=chunk) - As of June 30, 2025, **114,764,049 shares** remained to be purchased under the Company's stock repurchase program, which was extended through December 31, 2029[352](index=352&type=chunk) [ITEM 5. OTHER INFORMATION](index=65&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section confirms that no directors or officers adopted, modified, or terminated insider trading arrangements under Rule 10b5-1(c) during the three months ended June 30, 2025. It also discloses that ADM International Sarl had outstanding invoices totaling $38,971 with CCIC Singapore PTE. Ltd. for services provided between March and May 2025, before CCIC Singapore was designated as a Specially Designated Global Terrorist organization by OFAC on May 13, 2025. No payments have been made since the designation, and the Company does not intend to continue engagement - No insider trading arrangements (Rule 10b5-1(c)) were adopted, modified, or terminated by directors or officers during the three months ended June 30, 2025[354](index=354&type=chunk) - ADM International Sarl had **$38,971** in invoices payable to CCIC Singapore PTE. Ltd. for services rendered before CCIC Singapore was designated a Specially Designated Global Terrorist organization by OFAC on May 13, 2025[355](index=355&type=chunk)[356](index=356&type=chunk) - No payments have been made to CCIC Singapore since the OFAC designation, and the Company does not intend to continue its engagement[356](index=356&type=chunk) [ITEM 6. EXHIBITS](index=65&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the Composite Certificate of Incorporation, Bylaws, certifications of principal executive and financial officers, and Inline XBRL files for financial statements and cover page - Exhibits include the Composite Certificate of Incorporation, Bylaws, certifications of principal executive and financial officers (Rule 13a–14(a) and 18 U.S.C. 1350), and Inline XBRL files[357](index=357&type=chunk)