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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying unaudited Consolidated Financial Statements, which can be found in Part I. Item 1. Consolidated Financial Statements.
Company Overview
Archer-Daniels-Midland Company and its subsidiaries (the "Company" or "ADM") unlock the power of nature to enrich the quality of life. The Company is an essential global agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. ADM is a premier human and animal nutrition provider, offering one of the industry’s broadest portfolios of ingredients and solutions from nature. The Company is a trailblazer in health and well-being, with an industry-leading range of products for consumers looking for new ways to live healthier lives. ADM is a cutting-edge innovator, guiding the way to a future of new bio-based consumer and industrial solutions. ADM is a leader in business-driven sustainability efforts that support a strong agricultural sector, resilient supply chains, and a vast and growing bioeconomy. Around the globe, the Company’s expertise and innovation are meeting critical needs from harvest to home.
Reportable Segments
The Company’s operations are organized, managed, and classified into three reportable segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard*,* and are classified within either Corporate or Other Business.
See Part I. Item 1. Note 13. Segment Information of “Notes to Consolidated Financial Statements” for further details on the nature of our business and our reportable operating segments.
2025 Strategy
The Company’s goal is to continue to build and sustain long-term value for our shareholders and customers. The Company believes the following mid-term priorities will help create value for its shareholders:
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Focus on execution and cost management – ADM seeks to prioritize operational excellence and driving targeted cost reductions through: (1) boosting plant efficiencies and restoring operations at the Decatur East plant; (2) optimizing operating leverage within the Nutrition segment; and (3) reducing third party spend and selling, general, and administrative expenses.
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Strategic simplification – ADM seeks to enhance returns on invested capital by executing a pipeline of simplification opportunities to optimize our portfolio and organizational structure, including: (1) addressing performance, demand, and capacity challenges; (2) reducing capital expenditures that do not meet the Company’s return objectives; and (3) reducing capability overlaps through synergies, closures, and divestitures.
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Targeted growth investment – ADM seeks to prioritize organic investment in key strategic initiatives, while also ensuring our businesses are ready for the future, including: (1) plant modernization investments; (2) cost optimization investments; and (3) enterprise system and process enhancements.
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Deploy capital with discipline – ADM seeks to prudently invest in opportunities. The Company also expects to continue returning cash to shareholders through dividends and share repurchases as appropriate.
Sustainability
Sustainability is a key driver in ADM’s expanding portfolio of environmentally responsible, plant-derived products. Consumers today increasingly expect their food and drink to come from sustainable ingredients, produced by companies that share their values, and ADM is continually finding new ways to meet those needs through its portfolio actions.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Significant Portfolio Actions
ADM’s recent significant portfolio actions and announcements, in the quarter, include:
- The acquisition in January 2025 of Vandamme Hugaria Kft, a 700 metric ton/day non-genetically modified crush and extraction facility based in Hungary. See Note 4. Acquisitions of “Notes to Consolidated Financial Statements” included in Item 1. Consolidated Financial Statements for further information.
Restructuring Program
On February 4, 2025, the Company announced a restructuring program that is expected to deliver in excess of $500 million of annual cost savings by fiscal 2029. The restructuring program has several initiatives including improvements in manufacturing costs, targeted workforce reductions, divestitures of non-strategic businesses, and monetization of investments, and is designed to help the Company achieve cost efficiencies. See Note 14. Asset Impairment, Exit, and Restructuring Costs in the notes to the consolidated financial statements included in Part I, Item 1, "Financial Statements" of this Report on Form 10-Q for additional information regarding restructuring related charges.
Government Investigation
As previously disclosed, the Company is under investigation by the United States Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”) relating to, among other things, intersegment sales between the Company’s Nutrition reporting segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions reporting segments. The Company is continuing to cooperate with the SEC and DOJ investigations and is unable to predict the outcome of these investigations.
Material Weakness
As previously disclosed, the Company identified a material weakness in the Company’s internal control over financial reporting related to its accounting practices and procedures for segment disclosures. For more information, see “Controls and Procedures” in Part I. Item 4 herein.
Operating Performance Indicators
The Company’s Ag Services and Oilseeds and Carbohydrate Solutions segments are principally agricultural commodity-based businesses where changes in selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold. Therefore, margins per volume or metric ton generally are meaningful as performance indicators in these businesses.
The Nutrition segment also utilizes agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily correlate to changes in cost of products sold. Therefore, changes in revenues of these businesses may correspond to changes in margins. Therefore, margins rates generally are meaningful as a performance indicator in these businesses.
The Company has consolidated subsidiaries in approximately 78 countries. For the majority of the Company’s subsidiaries located outside the United States, the local currency is the functional currency except for certain significant subsidiaries in Switzerland where Euro is the functional currency, and Brazil and Argentina where U.S. dollar is the functional currency. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at the weighted average exchange rates for the applicable periods. For the majority of the Company’s business activities in Brazil and Argentina, the functional currency is the U.S. dollar; however, certain transactions, including taxes, occur in local currency and require remeasurement to the functional currency. Changes in revenues are expected to be correlated to changes in expenses reported by the Company caused by fluctuations in the exchange rates of foreign currencies, primarily the Euro, British pound, Canadian dollar, and Brazilian real, as compared to the U.S. dollar.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company measures its performance using key financial metrics including net earnings, adjusted diluted earnings per share (EPS), margins, segment operating profit, total segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, return on invested capital, adjusted economic value added, and operating cash flows before working capital. Some of these metrics are not defined by generally accepted accounting principles in the United States (GAAP) and should be considered in addition to, and not in lieu of, GAAP financial measures. For further information, see the “Non-GAAP Financial Measures” section below.
The Company’s financial results can vary significantly due to changes in factors such as fluctuations in energy prices, weather conditions, crop plantings, government programs and policies, trade policies, changes in global demand, general global economic conditions, changes in standards of living, global production of similar and competitive crops, and geopolitical developments. Due to the unpredictable nature of these and other factors, the Company undertakes no responsibility for updating any forward-looking information contained within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
Market Factors Influencing Operations or Results in the Three Months Ended March 31, 2025
The Company is subject to a variety of market factors which affect the Company's operating results.
In the Ag Services and Oilseeds segment, increased global supplies of grains and oilseeds, higher projected ending stocks-to-use ratios, and tariff and trade policy uncertainty resulted in compressed margins and limited forward commitments by customers. Ag Services was negatively impacted in North America by a decrease in exports due to a large South American harvest, market trade uncertainties, including the absence of a milo export program with China, and a reduction in exportable surplus from Europe, Middle East, and Africa (EMEA), and India. In Crushing and Refined Products and Other (RPO), increased industry capacity lowered margins for North American soy and canola, while EMEA biodiesel margins declined due to biofuel and trade policy uncertainty.
In the Carbohydrate Solutions segment, strong export demand for ethanol helped offset higher industry production, which helped minimize the imbalance between production and domestic demand. For Starches and Sweeteners, North America saw lower starch margins due to demand softness in the paper and corrugated markets. EMEA saw higher corn costs and increased competition.
In the Nutrition segment, Human Nutrition demand was mixed across food and beverage categories as affordability remains a primary concern for consumers. In Animal Nutrition, declining commodity markets led to decreased spending, although additive markets experienced modest growth.
Analysis of Results of Operations
Earnings before income taxes decreased $532 million from $885 million to $353 million primarily driven by lower pricing and execution margins, in addition to lower equity in earnings of unconsolidated affiliates.
Total segment operating profit (a non-GAAP measure) decreased $449 million from $1.2 billion to $747 million driven by lower results in the Ag Services and Oilseeds segment. Total segment operating profit (a non-GAAP measure) in the three months ended March 31, 2025 excluded restructuring and net settlement contingencies of $49 million. Total segment operating profit (a non-GAAP measure) in the three months ended March 31, 2024 excluded asset impairment and restructuring charges of $6 million.
Total segment operating profit (a non-GAAP measure) is reconciled to earnings before income taxes, the most directly comparable GAAP measure, in the "Non-GAAP Financial Measures" section below.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Processed volumes by certain products for the three months ended March 31, 2025 and 2024 were as follows (in metric tons).
| Three Months Ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | Change | ||||||||||||||
| Oilseeds | 9,091 | 9,387 | (296) | ||||||||||||||
| Corn | 4,581 | 4,407 | 174 | ||||||||||||||
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall decrease in processed oilseeds volumes was primarily related to lower North America crush volumes in the current year quarter due to unplanned plant downtime. The overall increase in processed corn volumes was primarily related to increased plant reliability and utilization in the current year quarter due to decreased unplanned plant downtime when compared to the prior year quarter.
Revenues for the three months ended March 31, 2025 and 2024, were as follows (in millions):
| Three Months Ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| Ag Services and Oilseeds | |||||||||||||||||
| Ag Services | $ | 10,536 | $ | 11,197 | $ | (661) | |||||||||||
| Crushing | 2,639 | 3,327 | (688) | ||||||||||||||
| Refined Products and Other | 2,500 | 2,695 | (195) | ||||||||||||||
| Total Ag Services and Oilseeds | 15,675 | 17,219 | (1,544) | ||||||||||||||
| Carbohydrate Solutions | |||||||||||||||||
| Starches and Sweeteners | 1,937 | 2,156 | (219) | ||||||||||||||
| Vantage Corn Processors | 634 | 527 | 107 | ||||||||||||||
| Total Carbohydrate Solutions | 2,571 | 2,683 | (112) | ||||||||||||||
| Nutrition | |||||||||||||||||
| Human Nutrition | 998 | 964 | 34 | ||||||||||||||
| Animal Nutrition | 819 | 872 | (53) | ||||||||||||||
| Total Nutrition | 1,817 | 1,836 | (19) | ||||||||||||||
| Total Segment Revenues | 20,063 | 21,738 | (1,675) | ||||||||||||||
| Other Business | 112 | 109 | 3 | ||||||||||||||
| Total Revenues | $ | 20,175 | $ | 21,847 | $ | (1,672) |
Revenues and cost of products sold in agricultural merchandising and processing businesses are significantly correlated to the underlying commodity prices and volumes. In periods of significant changes in market prices, the underlying performance of the Company is better evaluated by looking at margins since both revenues and cost of products sold, particularly in the Ag Services and Oilseeds segment, generally have a relatively equal impact from market price changes which generally result in an insignificant impact to gross profit.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues decreased $1.7 billion to $20.2 billion driven by lower sales prices ($2.0 billion), partially offset by higher sales volumes ($291 million). Lower sales prices of meal, soybeans, and biodiesel and lower sales volumes of sorghum were partially offset by higher sales volumes of corn, oils, flavors, and ethanol. Ag Services and Oilseeds revenues decreased 9% to $15.7 billion driven by lower sales prices ($1.7 billion), partially offset by higher sales volumes ($143 million). Carbohydrate Solutions revenues decreased 4% to $2.6 billion driven by lower sales prices ($138 million), partially offset by higher sales volumes ($26 million). Nutrition revenues decreased 1% to $1.8 billion driven by lower sales prices ($141 million), partially offset by higher sales volumes ($122 million).
Cost of products sold decreased $1.2 billion to $19.0 billion primarily driven by lower average commodity costs. Manufacturing expenses increased $113 million to $1.9 billion, driven by increases in maintenance expenses due to work performed at Ag Services & Oilseeds facilities in Decatur, Illinois and higher grind at Carbohydrates Solutions facilities and increases in energy pricing in EMEA.
Gross profit decreased $479 million, or 29%, to $1.2 billion driven by a decrease in margins of $286 million, $123 million, $64 million, and $42 million for Crushing, Ag Services, Starches and Sweeteners, and Refined Products and Other, respectively, partially offset by a margin increase of $45 million in Vantage Corn Processors.
Selling, general, and administrative expenses decreased $19 million to $932 million, driven by decreased employee compensation costs and lower financing fees, partially offset by higher legal fees.
Asset impairment, exit, and restructuring costs increased $20 million to $38 million. Charges in the current year quarter were driven by the Company’s restructuring program announced in February 2025, and included $34 million of reportable segment specific restructuring charges and $4 million of restructuring in Corporate. Charges in the prior year quarter consisted of $3 million of impairments related to certain long-lived assets and $3 million of restructuring charges within reportable segments, and restructuring of $12 million in Corporate.
Equity in earnings of unconsolidated affiliates decreased $68 million to $144 million driven by lower earnings from the Company’s investments in Wilmar, partially offset by higher earnings from the Company’s investment in Olenex Sarl and SoyVen.
Interest and investment income increased $15 million to $138 million, primarily driven by investment valuation gains in the current year quarter of $1 million compared to prior year quarter investment valuation losses of $16 million.
Interest expense decreased $8 million to $158 million driven by lower interest rates.
Other income — net decreased $7 million to $19 million, driven by provisions for contingent losses of $23 million, partially offset by gains on sales of marketable securities of $17 million.
Income tax expense decreased $105 million to $61 million. The Company’s effective tax rate for three months ended March 31, 2025 was 17.3% compared to 18.8% for the three months ended March 31, 2024. The decrease in the effective tax rate was primarily due to the impact of discrete tax items in the prior year quarter.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Segment operating profit for the three months ended March 31, 2025 and 2024 was as follows (in millions).
| Three Months Ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| Segment Operating Profit (1) | |||||||||||||||||
| Ag Services and Oilseeds | |||||||||||||||||
| Ag Services | $ | 159 | $ | 232 | $ | (73) | |||||||||||
| Crushing | 47 | 313 | (266) | ||||||||||||||
| Refined Products and Other | 134 | 170 | (36) | ||||||||||||||
| Wilmar | 72 | 149 | (77) | ||||||||||||||
| Total Ag Services and Oilseeds | $ | 412 | $ | 864 | $ | (452) | |||||||||||
| Carbohydrate Solutions | |||||||||||||||||
| Starches and Sweeteners | $ | 207 | $ | 261 | $ | (54) | |||||||||||
| Vantage Corn Processors | 33 | (13) | 46 | ||||||||||||||
| Total Carbohydrate Solutions | $ | 240 | $ | 248 | $ | (8) | |||||||||||
| Nutrition | |||||||||||||||||
| Human Nutrition | $ | 75 | $ | 76 | $ | (1) | |||||||||||
| Animal Nutrition | 20 | 8 | 12 | ||||||||||||||
| Total Nutrition | $ | 95 | $ | 84 | $ | 11 | |||||||||||
(1) For the first quarter ended March 31, 2025, segment operating profit for the Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition segments included a positive impact of timing-related adjustments for incentive compensation payouts of $45 million, $12 million, and $20 million, respectively. The offsetting adjustment of $77 million was recorded in Corporate with no net impact to the Consolidated Financial Statements.
In the Ag Services and Oilseeds segment, segment operating profit decreased 52%. The Ag Services subsegment had lower operating profit compared to the prior year quarter, driven by a decrease in volumes and margins, primarily due to increased global supplies of grains and oilseeds, higher projected ending stocks-to-use ratios, and tariff and trade policy uncertainty. Margins were also impacted by negative mark-to-market timing impacts during the quarter and the impact of certain export duties. These impacts were partially offset by higher destination marketing volumes and related margins in the quarter. The Ag Services subsegment had approximately $30 million of net negative mark-to-market timing impacts during the quarter, compared to approximately $18 million of net positive impacts in the prior year quarter. The Crushing subsegment had lower operating profit versus the prior year quarter, driven by lower margins due to increased industry capacity, competitive meal exports from Argentina, higher manufacturing costs, and lower vegetable oil demand due to biofuel and trade policy uncertainty; these were partially offset by improved margins and volumes in South American Crushing. The Crushing subsegment had approximately $4 million of net positive mark-to-market timing impacts during the quarter, compared to approximately $40 million of net positive impacts in the prior year quarter. The RPO subsegment operating profit was lower than the prior year quarter, as lower vegetable oil demand and biofuel and trade policy uncertainty negatively impacted biodiesel margins in Europe and North America. Softer oil demand in North America and increased crush capacity also negatively impacted refining margins compared to the prior year quarter. RPO had approximately $4 million of net positive mark-to-market timing impacts during the quarter, compared to approximately $30 million of net negative impacts in the prior year quarter. Wilmar earnings decreased by $77 million to $72 million in the current year quarter.
In the Carbohydrate Solutions segment, segment operating profit decreased 3% compared to the prior year quarter. The Starches and Sweeteners subsegment operating profit was lower compared to the prior year quarter driven by lower North American starch margins, lower EMEA Starches and Sweeteners volumes and margins, and higher manufacturing costs. North American liquid sweetener margins and global wheat milling margins and volumes improved relative to the prior year quarter. The Vantage Corn Processors subsegment operating profit increased compared to the prior year quarter, driven by higher ethanol volumes and improved margins.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In the Nutrition segment, segment operating profit increased 13%. Human Nutrition results were flat compared to the prior year quarter. Flavors results were higher compared to the prior year quarter driven by higher volumes and margins. Specialty Ingredients results were lower compared to the prior year quarter driven by lower margins. In Health and Wellness, lower operating profit was driven by certain negative valuation adjustments. Animal Nutrition operating profit was higher compared to the prior year quarter, driven by improved market conditions, leading to higher margins, and cost optimization efforts.
Other Business and Corporate Results
Other Business contribution of operating profit decreased 21% from $121 million to $96 million. Lower net interest income due to lower customer deposit balances drove decreased operating profit in ADM Investor Services. Captive insurance results were lower driven by decreased interest income.
Corporate results for the three months ended March 31, 2025 and 2024 were as follows (in millions):
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||||||||
| Interest expense-net (1) | (100) | (110) | 10 | ||||||||||||||||||||
| Unallocated corporate function costs (2) | (352) | (304) | (48) | ||||||||||||||||||||
| Restructuring charges (3) | (5) | (12) | 7 | ||||||||||||||||||||
| Other income — net (4) | 16 | — | 16 | ||||||||||||||||||||
| Total Corporate | $ | (441) | $ | (426) | $ | (15) |
(1)Interest expense-net decreased, driven by higher interest income on tax receivables and higher capitalized interest, partially offset by higher interest costs on outstanding debt.
(2)Unallocated corporate function costs increased, primarily driven by timing-related incentive compensation adjustments, partially offset by lower technological spend.
(3)Restructuring charges decreased, driven by lower severance charges.
(4)Other income includes foreign exchange gains and losses. The prior year quarter also included valuation losses related to an ADM Ventures investment.
Non-GAAP Financial Measures
The Company uses certain “non-GAAP” financial measures as defined by the SEC. These are measures of performance not defined by accounting principles generally accepted in the United States, and should be considered in addition to, not in lieu of, GAAP reported measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this section.
The Company uses adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit, non-GAAP financial measures as defined by the SEC, to evaluate the Company’s financial performance.
Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items as more fully described in the reconciliation tables. Adjusted diluted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items as more fully described in the reconciliation tables.
EBITDA is defined as earnings before interest on borrowings, taxes, and depreciation and amortization. Adjusted EBITDA is defined as earnings before interest on borrowings, taxes, depreciation, and amortization, adjusted to exclude the impact of specified items as more fully described in the reconciliation tables.
Total segment operating profit is defined as ADM’s consolidated earnings before income taxes, adjusted for Other Business, Corporate, and specified items as more fully described in the reconciliation tables.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management believes that adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit are useful measures of the Company’s performance because they provide investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability.
Adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit are not intended to replace or be an alternative to net earnings, diluted EPS, and earnings before income taxes, the most directly comparable amounts reported under GAAP.
The table below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to adjusted net earnings (a non-GAAP measure) and diluted EPS (the most directly comparable GAAP measure) to adjusted diluted EPS (a non-GAAP measure) for the three months ended March 31, 2025 and 2024.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| In millions | Per share | In millions | Per share | ||||||||||||||||||||
| Average number of shares outstanding - diluted | 483 | 514 | |||||||||||||||||||||
| Net earnings and reported EPS (diluted) | $ | 295 | $ | 0.61 | $ | 729 | $ | 1.42 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Impairment, exit, restructuring charges, and settlement contingencies (net of tax of $11 million in 2025 and $0 million in 2024) (1) | 43 | 0.09 | 18 | 0.03 | |||||||||||||||||||
| Certain discrete tax adjustments | — | — | 3 | 0.01 | |||||||||||||||||||
| Total adjustments | 43 | 0.09 | 21 | 0.04 | |||||||||||||||||||
| Adjusted net earnings and adjusted diluted EPS | $ | 338 | $ | 0.70 | $ | 750 | $ | 1.46 |
(1) Tax effected using the U.S. and other applicable tax rates.
The table below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to EBITDA (a non-GAAP measure) and adjusted EBITDA (a non-GAAP measure) for the three months ended March 31, 2025 and 2024 (in millions).
| Three Months Ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Net Earnings Attributable to Archer-Daniels-Midland Company | $ | 295 | $ | 729 | |||||||||||||
| Net (losses) attributable to non-controlling interests | (3) | (10) | |||||||||||||||
| Income tax expense | 61 | 166 | |||||||||||||||
| Earnings Before Income Taxes | 353 | 885 | |||||||||||||||
| Interest expense (1) | 116 | 115 | |||||||||||||||
| Depreciation and amortization (2) | 284 | 280 | |||||||||||||||
| EBITDA | 753 | 1,280 | |||||||||||||||
| Impairment, exit, restructuring charges and settlement contingencies | 54 | — | |||||||||||||||
| Expenses related to acquisitions | — | 18 | |||||||||||||||
| Adjusted EBITDA | $ | 807 | $ | 1,298 | |||||||||||||
(1) Represents interest expense on borrowings and therefore excludes ADM Investor Services related interest expense.
(2) Excludes $3 million of accelerated depreciation recorded within restructuring charges as a specified item for the three months ended March 31, 2025.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The table below provides a reconciliation of earnings before income taxes (the most directly comparable GAAP measure) to total segment operating profit (a non-GAAP measure) for the three months ended March 31, 2025 and 2024 (in millions).
| Three Months Ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Earnings Before Income Taxes | $ | 353 | $ | 885 | |||||||||||||
| Other Business (earnings) | (96) | (121) | |||||||||||||||
| Corporate | 441 | 426 | |||||||||||||||
| Specified Items: | |||||||||||||||||
| Impairment, exit, restructuring charges and settlement contingencies | 49 | 6 | |||||||||||||||
| Total Segment Operating Profit | $ | 747 | $ | 1,196 |
Liquidity and Capital Resources
The Company’s objective is to have sufficient liquidity, balance sheet strength, and financial flexibility to fund the operating and capital requirements of a capital-intensive agricultural commodity-based business. The Company depends on access to credit markets, which can be impacted by its credit rating and factors outside of the Company’s control, to fund its working capital needs and capital expenditures.
The primary source of funds to finance the Company’s operations, capital expenditures, and advancement of its growth strategy is cash generated by operations and lines of credit, including a commercial paper borrowing facility and accounts receivable securitization programs. In addition, the Company believes it has access to funds from public and private equity and debt capital markets in both U.S. and international markets.
At March 31, 2025, the Company’s capital resources included shareholders’ equity of $22.1 billion and lines of credit, including the accounts receivable securitization programs described below, totaling $12.4 billion, of which $7.6 billion was unused. Of the Company’s total lines of credit, $5.1 billion supported the combined U.S. and European commercial paper borrowing programs, against which there was $2.6 billion of commercial paper outstanding at March 31, 2025.
As of March 31, 2025, the Company had $864 million of cash and cash equivalents, $633 million of which was cash held by foreign subsidiaries whose undistributed earnings are considered indefinitely reinvested. Based on the Company’s historical ability to generate sufficient cash flows from its U.S. operations and unused and available U.S. credit capacity of $3.2 billion, the Company has asserted that these funds are indefinitely reinvested outside the U.S.
As of March 31, 2025, the Company had total available liquidity of $8.4 billion comprised of cash and cash equivalents and unused lines of credit. The Company believes that cash flows from operations, cash and cash equivalents on hand, and unused lines of credit will be sufficient to meet its ongoing liquidity requirements for at least the next twelve months.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Cash Flows
Cash (used in) provided by operating activities was $(342) million and $700 million for the three months ended March 31, 2025 and 2024, respectively.
The decrease in cash provided by operating activities was primarily driven by lower earnings for the three months ended March 31, 2025 and changes in net working capital. Changes in net working capital were driven by changes in segregated investments, payables to brokerage customers, trade receivables, inventory, and trade payables.
Segregated investments decreased $220 million compared to an increase of $159 million in the prior year quarter and brokerage payables decreased $79 million compared to an increase of $319 million in the prior year quarter, both driven by decreased customer balances in the brokerage business due to market uncertainty.
Trade receivables increased by $655 million in the current quarter compared to a decrease of $61 million in the prior year quarter, primarily driven by the timing of sales in South America.
Inventories and trade payables decreased $137 million and $423 million, respectively, compared to a decrease of $295 million and $713 million, respectively, in the prior year quarter, reflecting increased procurement in the current quarter, driven by timing and an improved harvest in South America.
Investing Cash Flows
Net cash used in investing activities was $129 million and $1.2 billion for the three months ended March 31, 2025 and 2024, respectively.
Net cash used in investing activities for the three months ended March 31, 2025 included additions to property, plant and equipment of $291 million and a business acquisition, net of cash acquired of $90 million, partially offset by proceeds from sales of marketable securities of $248 million.
Net cash used in investing activities for the three months ended March 31, 2024 included additions to property, plant and equipment of $328 million and business acquisitions, net of cash acquired of $915 million.
Financing Cash Flows
Net cash provided by (used in) in financing activities was $587 million and $(2) million for the three months ended March 31, 2025 and 2024, respectively.
Net cash provided by financing activities for the three months ended March 31, 2025 and March 31, 2024 included net borrowings under short-term credit agreements of $863 million and $1.6 billion, respectively.
No share repurchases were made in the three months ended March 31, 2025. Share repurchases for the three months ended March 31, 2024 were $1.3 billion.
Dividends paid for the three months ended March 31, 2025 and 2024 were $247 million and $257 million, respectively.
Financial Ratios
At March 31, 2025, the Company had a current ratio, defined as current assets divided by current liabilities, of 1.4 to 1. Included in working capital at March 31, 2025 was $7.0 billion of readily marketable commodity inventories.
The Company’s ratio of long-term debt to total capital (the sum of long-term debt of $7.6 billion and shareholders’ equity of $22.1 billion at March 31, 2025 and the sum of long-term debt of $7.6 billion and shareholders’ equity of $22.2 billion at December 31, 2024) was 26% and 25% at March 31, 2025 and December 31, 2024, respectively.
ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company’s ratio of net debt (the sum of short-term debt of $2.8 billion, current maturities of long-term debt of $704 million, and long-term debt of $7.6 billion less the sum of cash and cash equivalents of $864 million and short-term marketable securities of $33 million at March 31, 2025 and the sum of short-term debt of $1.9 billion, current maturities of long-term debt of $674 million, and long-term debt of $7.6 billion less the sum of cash and cash equivalents of $611 million and short-term marketable securities of $246 million at December 31, 2024) to capital (the sum of net debt of $10.2 billion and shareholders’ equity of $22.1 billion at March 31, 2025 and the sum of net debt of $9.3 billion and shareholders' equity of $22.2 billion at December 31, 2024) was 31% and 30% at March 31, 2025 and December 31, 2024, respectively.
Stock Repurchase Program
On March 12, 2024, the Company entered into an accelerated share repurchase (“ASR”) transaction agreement with Merrill Lynch International, an affiliate of BofA Securities, Inc., to repurchase $1.0 billion of ADM common stock as part of ADM’s existing share repurchase program.
On March 28, 2024, the Company received an interim delivery of 8,880,986 shares at an average share price of $60.596, or $538 million in aggregate. On April 15, 2024, the Company received a final delivery of 7,325,733 shares at an average share price of $63.045, or $462 million in aggregate, as final settlement of the ASR transaction.
On December 11, 2024, the Company's Board of Directors approved a second extension of the stock repurchase program through December 31, 2029 and the repurchase of up to an additional 100 million shares under the extended program. As of March 31, 2025, the Company had 115 million remaining shares under its share repurchase program until December 31, 2029.
Accounts Receivable Securitization Program
The Company has accounts receivable securitization programs (the “Programs”) with certain commercial paper conduit purchasers and committed purchasers. The Programs provide the Company with up to $2.9 billion in funding against accounts receivable transferred into the Programs and expands the Company’s access to liquidity through efficient use of its balance sheet assets (see Note 15. Sale of Accounts Receivable within “Notes to Consolidated Financial Statements” included in Item 1 herein, “Consolidated Financial Statements” for further information). As of March 31, 2025, the Company had $813 million unused capacity of its facility under the Programs.
Contractual Obligations and Commercial Commitments
The Company’s purchase obligations as of March 31, 2025 and December 31, 2024 were $14.2 billion and $12.4 billion, respectively. As of March 31, 2025, the Company expects to make payments related to purchase obligations of $11.6 billion within the next twelve months. There were no other material changes in the Company’s contractual obligations during the three months ended March 31, 2025.
Critical Accounting Estimates
There were no material changes in the Company’s critical accounting estimates during the three months ended March 31, 2025. For a description of the Company’s critical accounting estimates and assumptions used in the preparation of the Company’s financial statements, see Part II. Item 7 and Note 1 of “Notes to Consolidated Financial Statements” included in Part II. Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
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