UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM ~~10-Q/A~~10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 1-44

ARCHER-DANIELS-MIDLAND COMPANY

(Exact name of registrant as specified in its charter)


Delaware		41-0129150
(State or other jurisdiction of incorporation or organization)		(I. R. S. Employer Identification No.)

77 West Wacker Drive, Suite 4600
Chicago,	Illinois	60601
(Address of principal executive offices)		(Zip Code)

(312) 634-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	ADM	NYSE
1.000% Notes due 2025		NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Emerging Growth Company

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value – ~~536,101,643~~494,437,789 shares

(~~July 24, 2023)~~

~~EXPLANATORY NOTE~~

Archer-Daniels-Midland Company is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment”) to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which was originally filed on July 25, 2023 (“Original Filing”), solely to add inline eXtensible Business Reporting Language (“iXBRL”) data tagging that was inadvertently omitted from the disclosure included in the Original Filing under Part II, “Item 5. Other Information.”

Except for the iXBRL specifically noted above, this Amendment does not modify or update any disclosures in the Original Filing. Accordingly, this Amendment does not reflect events occurring after the filing of the Original Filing or modify or update any disclosures, other than those identified above.April 29, 2024)

SAFE HARBOR STATEMENT

This Quarterly Report on Form 10-Q contains ~~forward-looking information~~“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that isinvolve substantial risks and uncertainties. All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, are forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “outlook,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements the Company makes relating to its future results and operations, growth opportunities, pending litigation and investigations, and timing of the remediation of the Company’s material weakness in the Company’s internal control over financial reporting are forward-looking statements. All forward-looking statements are subject to significant risks, uncertainties and ~~uncertainties~~changes in circumstances that could cause actual results and outcomes to differ materially from ~~those projected, expressed, or implied by such~~the forward-looking ~~information. Risks~~statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, without limitation, those that ~~could cause or contribute to such differences include, but~~ are ~~not limited to, those discussed~~described in Item 1A, ~~“Risk Factors”~~"Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, as may be updated in ~~our~~this or subsequent Quarterly Reports on Form 10-Q. ToShould one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Except to the extent ~~permitted under applicable~~required by law, ~~Archer-Daniels-Midland~~Archer-Daniels- Midland Company ~~assumes no~~does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking ~~statements~~statement whether as a result of new information, future events, changes in assumptions or ~~future events.~~otherwise.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Archer-Daniels-Midland Company

Consolidated Statements of Earnings

(Unaudited)


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		(In millions, except per share amounts)
		(In millions, except per share amounts)
		(In millions, except per share amounts)
		(In millions, except per share amounts)

Revenues	Revenues	$	25,190	$	27,284	$	49,262	$	50,934
Revenues
Revenues
Cost of products sold	Cost of products sold	23,307		25,184		45,299		46,937
Cost of products sold
Cost of products sold
Gross Profit
Gross Profit
Gross Profit	Gross Profit	1,883		2,100		3,963		3,997

Selling, general, and administrative expenses	Selling, general, and administrative expenses	841		814		1,722		1,643

Selling, general, and administrative expenses

Selling, general, and administrative expenses
Asset impairment, exit, and restructuring costs
Asset impairment, exit, and restructuring costs
Asset impairment, exit, and restructuring costs	Asset impairment, exit, and restructuring costs	60		1		67		2
Equity in earnings of unconsolidated affiliates	Equity in earnings of unconsolidated affiliates	(151)		(192)		(325)		(396)
Equity in earnings of unconsolidated affiliates
Equity in earnings of unconsolidated affiliates
Interest and investment income
Interest and investment income
Interest and investment income	Interest and investment income	(142)		(32)		(276)		(91)
Interest expense	Interest expense	180		73		327		165
Interest expense
Interest expense
Other (income) expense – net	Other (income) expense – net	(37)		(83)		(81)		(116)
Other (income) expense – net
Other (income) expense – net
Earnings Before Income Taxes
Earnings Before Income Taxes
Earnings Before Income Taxes	Earnings Before Income Taxes	1,132		1,519		2,529		2,790

Income tax expense	Income tax expense	204		279		429		486

Income tax expense

Income tax expense
Net Earnings Including Noncontrolling Interests
Net Earnings Including Noncontrolling Interests
Net Earnings Including Noncontrolling Interests	Net Earnings Including Noncontrolling Interests	928		1,240		2,100		2,304

Less: Net earnings attributable to noncontrolling interests		1		4		3		14
Less: Net earnings (losses) attributable to noncontrolling interests

Less: Net earnings (losses) attributable to noncontrolling interests

Less: Net earnings (losses) attributable to noncontrolling interests

Net Earnings Attributable to Controlling Interests

Net Earnings Attributable to Controlling Interests

Net Earnings Attributable to Controlling Interests	Net Earnings Attributable to Controlling Interests	$	927	$	1,236	$	2,097	$	2,290

Average number of shares outstanding – basic	Average number of shares outstanding – basic	545		566		548		566

Average number of shares outstanding – basic

Average number of shares outstanding – basic

Average number of shares outstanding – diluted	Average number of shares outstanding – diluted	546		568		549		568

Average number of shares outstanding – diluted

Average number of shares outstanding – diluted

Basic earnings per common share

Basic earnings per common share

Basic earnings per common share	Basic earnings per common share	$	1.70	$	2.18	$	3.83	$	4.05

Diluted earnings per common share	Diluted earnings per common share	$	1.70	$	2.18	$	3.82	$	4.03

Diluted earnings per common share

Diluted earnings per common share

Dividends per common share	Dividends per common share	$	0.45	$	0.40	$	0.90	$	0.80

Dividends per common share

Dividends per common share

See notes to consolidated financial statements.

Archer-Daniels-Midland Company

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		(In millions)
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
		(In millions)
		(In millions)
		(In millions)

Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	$	928	$	1,240	$	2,100	$	2,304
Net earnings including noncontrolling interests
Net earnings including noncontrolling interests
Other comprehensive income (loss):
Other comprehensive income (loss):
Other comprehensive income (loss):	Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	35		(7)		188		142
Foreign currency translation adjustment
Foreign currency translation adjustment
Tax effect	Tax effect	14		(84)		28		(115)
Tax effect
Tax effect
Net of tax amount
Net of tax amount
Net of tax amount	Net of tax amount	49		(91)		216		27

Pension and other postretirement benefit liabilities adjustment	Pension and other postretirement benefit liabilities adjustment	(6)		—		(32)		37

Pension and other postretirement benefit liabilities adjustment

Pension and other postretirement benefit liabilities adjustment
Tax effect	Tax effect	4		(4)		(9)		(11)
Tax effect
Tax effect
Net of tax amount
Net of tax amount
Net of tax amount	Net of tax amount	(2)		(4)		(41)		26

Deferred gain (loss) on hedging activities	Deferred gain (loss) on hedging activities	(37)		(80)		(141)		202

Deferred gain (loss) on hedging activities

Deferred gain (loss) on hedging activities
Tax effect	Tax effect	16		2		32		(45)
Tax effect
Tax effect
Net of tax amount
Net of tax amount
Net of tax amount	Net of tax amount	(21)		(78)		(109)		157

Unrealized gain (loss) on investments	Unrealized gain (loss) on investments	4		(8)		8		(13)

Unrealized gain (loss) on investments

Unrealized gain (loss) on investments
Tax effect
Tax effect
Tax effect	Tax effect	(1)		1		(2)		1
Net of tax amount	Net of tax amount	3		(7)		6		(12)
Net of tax amount
Net of tax amount
Other comprehensive income (loss)	Other comprehensive income (loss)	29		(180)		72		198
Other comprehensive income (loss)
Other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss)	Comprehensive income (loss)	957		1,060		2,172		2,502

Less: Comprehensive income (loss) attributable to noncontrolling interests	Less: Comprehensive income (loss) attributable to noncontrolling interests	—		—		(1)		5

Less: Comprehensive income (loss) attributable to noncontrolling interests

Less: Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income (loss) attributable to controlling interests	Comprehensive income (loss) attributable to controlling interests	$	957	$	1,060	$	2,173	$	2,497

Comprehensive income (loss) attributable to controlling interests

Comprehensive income (loss) attributable to controlling interests

See notes to consolidated financial statements.

Archer-Daniels-Midland Company

Consolidated Balance Sheets


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	March 31, 2024	December 31, 2023
		(Unaudited)
Assets
Assets
Assets	Assets
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,426	$	1,037

Segregated cash and investments	Segregated cash and investments	8,167		9,010
Segregated cash and investments
Segregated cash and investments
Trade receivables - net	Trade receivables - net	4,110		4,926
Inventories	Inventories	11,902		14,771

Other current assets	Other current assets	5,081		5,666
Other current assets
Other current assets
Total Current Assets	Total Current Assets	30,686		35,410

Investments and Other Assets	Investments and Other Assets
Investments and Other Assets
Investments and Other Assets
Investments in affiliates	Investments in affiliates	5,665		5,467

Goodwill and other intangible assets
Goodwill and other intangible assets
Goodwill and other intangible assets	Goodwill and other intangible assets	6,542		6,544
Right of use assets	Right of use assets	1,138		1,088
Other assets	Other assets	1,341		1,332
Total Investments and Other Assets	Total Investments and Other Assets	14,686		14,431

Property, Plant, and Equipment
Property, Plant, and Equipment
Property, Plant, and Equipment	Property, Plant, and Equipment
Land and land improvements	Land and land improvements	534		502
Buildings	Buildings	5,712		5,639
Machinery and equipment	Machinery and equipment	19,566		19,194
Construction in progress	Construction in progress	1,544		1,440
		27,356		26,775
Accumulated depreciation	Accumulated depreciation	(17,229)		(16,842)
Net Property, Plant, and Equipment	Net Property, Plant, and Equipment	10,127		9,933

Total Assets	Total Assets	$	55,499	$	59,774
Total Assets
Total Assets

Liabilities, Temporary Equity, and Shareholders’ Equity
Liabilities, Temporary Equity, and Shareholders’ Equity
Liabilities, Temporary Equity, and Shareholders’ Equity	Liabilities, Temporary Equity, and Shareholders’ Equity
Current Liabilities	Current Liabilities					Current Liabilities
Short-term debt	Short-term debt	$	125	$	503
Trade payables	Trade payables	5,079		7,803
Payables to brokerage customers	Payables to brokerage customers	8,712		9,856
Accrued expenses and other payables	Accrued expenses and other payables	4,269		4,795
Current lease liabilities	Current lease liabilities	302		292
Current maturities of long-term debt	Current maturities of long-term debt	301		942

Total Current Liabilities	Total Current Liabilities	18,788		24,191
Total Current Liabilities
Total Current Liabilities

Long-Term Liabilities
Long-Term Liabilities
Long-Term Liabilities	Long-Term Liabilities
Long-term debt	Long-term debt	8,244		7,735
Deferred income taxes	Deferred income taxes	1,351		1,402
Non-current lease liabilities	Non-current lease liabilities	853		816
Other	Other	984		1,014
Total Long-Term Liabilities	Total Long-Term Liabilities	11,432		10,967

Temporary Equity - Redeemable noncontrolling interest	Temporary Equity - Redeemable noncontrolling interest	304		299
Temporary Equity - Redeemable noncontrolling interest
Temporary Equity - Redeemable noncontrolling interest

Shareholders’ Equity
Shareholders’ Equity
Shareholders’ Equity	Shareholders’ Equity
Common stock	Common stock	3,128		3,147
Reinvested earnings	Reinvested earnings	24,244		23,646
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(2,433)		(2,509)
Noncontrolling interests	Noncontrolling interests	36		33
Total Shareholders’ Equity	Total Shareholders’ Equity	24,975		24,317
Total Liabilities, Temporary Equity, and Shareholders’ Equity	Total Liabilities, Temporary Equity, and Shareholders’ Equity	$	55,499	$	59,774

See notes to consolidated financial statements.

Archer-Daniels-Midland Company

Consolidated Statements of Cash Flows

(Unaudited)


(In millions)	(In millions)	Six Months Ended June 30,				(In millions)	Three Months Ended March 31,
		2023		2022			2024	2023

Operating Activities

Operating Activities

Operating Activities	Operating Activities
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	$	2,100	$	2,304
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities	Adjustments to reconcile net earnings to net cash provided by (used in) operating activities					Adjustments to reconcile net earnings to net cash provided by (used in) operating activities
Depreciation and amortization	Depreciation and amortization	521		514
Asset impairment charges	Asset impairment charges	46		4
Deferred income taxes	Deferred income taxes	8		(15)
Equity in earnings of affiliates, net of dividends	Equity in earnings of affiliates, net of dividends	(80)		(162)
Stock compensation expense	Stock compensation expense	86		97

Deferred cash flow hedges	Deferred cash flow hedges	(141)		206
Gains on sales of assets and businesses/investment revaluation		(32)		(42)

Deferred cash flow hedges

Deferred cash flow hedges
(Gain) losses on sales/revaluation of assets
Other – net	Other – net	(18)		312
Changes in operating assets and liabilities, net of acquisitions and dispositions	Changes in operating assets and liabilities, net of acquisitions and dispositions					Changes in operating assets and liabilities, net of acquisitions and dispositions
Segregated investments	Segregated investments	(1,392)		(1,753)
Trade receivables	Trade receivables	846		(2,155)
Inventories	Inventories	2,917		(349)

Other current assets	Other current assets	582		(1,593)
Other current assets
Other current assets
Trade payables	Trade payables	(2,762)		(710)
Payables to brokerage customers	Payables to brokerage customers	(1,213)		2,520
Accrued expenses and other payables	Accrued expenses and other payables	(569)		147
Total Operating Activities	Total Operating Activities	899		(675)

Investing Activities	Investing Activities
Investing Activities
Investing Activities
Capital expenditures	Capital expenditures	(614)		(500)
Net assets of businesses acquired
Proceeds from sales of assets

Proceeds from sales of assets and businesses		17		12

Investments in affiliates

Investments in affiliates

Investments in affiliates	Investments in affiliates	(6)		(58)

Cost method investments		(5)		(133)

Other – net

Other – net

Other – net	Other – net	(3)		32
Total Investing Activities	Total Investing Activities	(611)		(647)

Financing Activities	Financing Activities
Long-term debt borrowings		500		751
Financing Activities
Financing Activities

Long-term debt payments
Long-term debt payments
Long-term debt payments	Long-term debt payments	(662)		—
Net borrowings (payments) under lines of credit agreements	Net borrowings (payments) under lines of credit agreements	(371)		1,414

Share repurchases	Share repurchases	(1,001)		(200)
Share repurchases
Share repurchases
Cash dividends	Cash dividends	(494)		(453)

Other – net	Other – net	(103)		(21)
Other – net
Other – net
Total Financing Activities	Total Financing Activities	(2,131)		1,491

Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents
Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents
Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents	Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents	(3)		—
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	(1,846)		169
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period	Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period	7,033		7,454

Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period	Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period	$	5,187	$	7,623
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period

Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets	Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents	Cash and cash equivalents	$	1,426	$	906
Restricted cash and restricted cash equivalents included in segregated cash and investments	Restricted cash and restricted cash equivalents included in segregated cash and investments	3,761		6,717
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	5,187	$	7,623

See notes to consolidated financial statements.

Archer-Daniels-Midland-Company

Consolidated Statements of Shareholders’ Equity

(Unaudited)


	Common Stock																	Common Stock			Reinvested Earnings				Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests	Total Shareholders’ Equity
(In millions, except per share amounts)

		Common Stock			Reinvested Earnings				Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Shareholders’ Equity
(In millions, except per share amounts)		Shares	Amount
Balance, March 31, 2023		545	$	3,106			$	24,217			$	(2,463)	$	36		$	24,896

Balance, December 31, 2023

Balance, December 31, 2023

Balance, December 31, 2023
Comprehensive income															Comprehensive income
Net earnings															Net earnings				729							(10)
Other comprehensive income (loss)															Other comprehensive income (loss)					(83)			(3)
Total comprehensive income
Cash dividends paid - $0.50 per share
Share repurchases
Share repurchases prepayment
Stock compensation expense
Stock option exercises net of taxes

Other
Other
Other
Balance, March 31, 2024

Balance, December 31, 2022

Balance, December 31, 2022

Balance, December 31, 2022

Comprehensive income

Comprehensive income

Comprehensive income	Comprehensive income
Net earnings	Net earnings				927						1				Net earnings				1,170								2
Other comprehensive income (loss)	Other comprehensive income (loss)								30		(1)				Other comprehensive income (loss)					46		(3)		(3)
Total comprehensive income	Total comprehensive income												957
Cash dividends paid - $0.45 per share	Cash dividends paid - $0.45 per share				(246)								(246)
Share repurchases	Share repurchases	(9)			(654)								(654)
Stock compensation expense	Stock compensation expense	—	21										21
Stock option exercises net of taxes	Stock option exercises net of taxes	—	1										1
Other
Balance, March 31, 2023

Balance, June 30, 2023		536	$	3,128	$	24,244			$	(2,433)	$	36	$	24,975

Balance, December 31, 2022		547	$	3,147	$	23,646			$	(2,509)	$	33	$	24,317
Comprehensive income
Net earnings					2,097						3
Other comprehensive income (loss)									76		(4)
Total comprehensive income													2,172
Cash dividends paid - $0.90 per share					(494)								(494)
Share repurchases		(13)			(1,005)								(1,005)
Stock compensation expense		3	86										86
Stock option exercises net of taxes		(1)	(107)										(107)

Other		—	2		—				—		4		6
Balance, June 30, 2023		536	$	3,128	$	24,244			$	(2,433)	$	36	$	24,975

Balance, March 31, 2022		563	$	3,028	$	22,483			$	(1,789)	$	33	$	23,755

Comprehensive income
Net earnings					1,236						4
Other comprehensive income (loss)									(176)		(4)
Total comprehensive income													1,060
Cash dividends paid - $0.40 per share					(227)								(227)
Share repurchases		(2)			(200)								(200)
Stock compensation expense		—	28										28
Stock option exercises net of taxes		—	10										10

Balance, June 30, 2022		561	$	3,066	$	23,292			$	(1,965)	$	33	$	24,426

Balance, December 31, 2021		560	$	2,994	$	21,655			$	(2,172)	$	31	$	22,508

Comprehensive income
Net earnings					2,290						14
Other comprehensive income (loss)									207		(9)
Total comprehensive income													2,502
Cash dividends paid - $0.80 per share					(453)								(453)
Share repurchases		(2)			(200)								(200)
Stock compensation expense		3	97										97
Stock option exercises net of taxes		—	(26)										(26)
Other		—	1		—				—		(3)		(2)
Balance, June 30, 2022		561	$	3,066	$	23,292			$	(1,965)	$	33	$	24,426

See notes to consolidated financial statements.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2023.~~2024. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 for Archer-Daniels-Midland Company (the Company or ADM).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company consolidates all entities, including variable interest entities (VIEs), in which it has a controlling financial interest. For VIEs, the Company assesses whether it is the primary beneficiary as defined under the applicable accounting standard. Investments in affiliates, including VIEs through which the Company exercises significant influence but does not control the investee and is not the primary beneficiary of the investee’s activities, are carried at cost plus equity in undistributed earnings since acquisition and are adjusted, where appropriate, for basis differences between the investment balance and the underlying net assets of the ~~investee.~~investee and impairments determined to be other than temporary in nature. The Company’s portion of the results of certain affiliates and results of certain VIEs are included using the most recent available financial statements. In each case, the financial statements are within 93 days of the Company’s year end and are consistent from period to period.

Segregated Cash and Investments

The Company segregates certain cash, cash equivalents, and investment balances in accordance with regulatory requirements, commodity exchange requirements, and insurance arrangements. These balances represent deposits received from customers of the Company’s registered futures commission merchant and commodity brokerage services, cash margins and securities pledged to commodity exchange clearinghouses, and cash pledged as security under certain insurance arrangements. Segregated cash and investments also include restricted cash collateral for the various insurance programs of the Company’s captive insurance business. To the degree these segregated balances are comprised of cash and cash equivalents, they are considered restricted cash and cash equivalents on the consolidated statements of cash flows.

Receivables

The Company records receivables at net realizable value in trade receivables, other current assets, and other assets. These amounts ~~included~~include allowances for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances including any accrued interest ~~receivables~~ thereon. The Company estimates uncollectible accounts by pooling receivables according to type, region, credit risk rating, and age. Each pool is assigned an expected loss co-efficient to arrive at a general reserve based on historical write-offs adjusted, as needed, for regional, economic, and other forward-looking factors. The Company minimizes credit risk due to the large and diversified nature of its worldwide customer base. ADM manages its exposure to counter-party credit risk through credit analysis and approvals, credit limits, and monitoring procedures. Long-term receivables recorded in other assets were not material to the Company’s overall receivables portfolio.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 1. Basis of Presentation (Continued)

Changes to the allowance for estimated uncollectible accounts are as follows:


		Three Months Ended June 30
		2023		2022
Beginning, April 1		$	182	$	137
Current year provisions		9		22

Write-offs against allowance		(16)		(4)
Foreign exchange translation adjustment		—		(2)
Other		(1)		11
Ending, June 30		$	174	$	164

		Six Months Ended June 30
		2023		2022
	March 31, 2024									March 31, 2024	March 31, 2023
	(In millions)										(In millions)
Beginning, January 1	Beginning, January 1	$	199	$	122
Current year provisions	Current year provisions	13		44		Current year provisions	5	4	4
Recoveries	Recoveries	1		1
Write-offs against allowance	Write-offs against allowance	(40)		(5)
Foreign exchange translation adjustment	Foreign exchange translation adjustment	1		(2)
Other	Other	—		4
Ending, June 30		$	174	$	164
Ending, March 31

Write-offs against allowance in the ~~current quarter~~three months ended March 31, 2024 were primarily related to ~~a customer in Brazil. Also included in write-offs~~long-term receivables. Write-offs against allowance in the ~~six~~three months ended ~~June 30,~~March 31, 2023 ~~was~~were primarily related to allowance on receivables that were subsequently sold.

Inventories

Certain merchandisable agricultural commodity inventories, which include inventories acquired under deferred pricing contracts, are stated at market value. In addition, the Company values certain inventories using the first-in, first-out (FIFO) method at the lower of cost or net realizable value.

The following table sets forth the Company’s ~~inventories.~~inventories as of March 31, 2024 and December 31, 2023.


		June 30, 2023		December 31, 2022
	March 31, 2024						March 31, 2024	December 31, 2023
		(In millions)				(In millions)
Raw materials and supplies	Raw materials and supplies	$	7,592	$	6,975
Finished goods	Finished goods	4,310		7,796

Market inventories
Total inventories	Total inventories	$	11,902	$	14,771

Included in raw materials and supplies are work in process inventories which were not material as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

Cost Method Investments

Cost method investments of $421 million and $438 million as of March 31, 2024 and December 31, 2023, respectively, were included in Other Assets in the Company’s consolidated balance sheets. Revaluation loss of $18 million in the three months ended March 31, 2024 was related to an investment in alternative protein and precision fermentation, partially offset by an upward adjustment of $2 million. There were no revaluation gains or losses in the three months ended March 31, 2023. Revaluation gains and losses are recorded in interest and investment income in the Company’s consolidated statements of earnings. As of March 31, 2024, the cumulative amounts of upward and downward adjustments were $115 million and $94 million, respectively.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

~~Note 1. Basis of Presentation (Continued)~~

~~Cost Method Investments~~

Cost method investments of $494 million and $488 million as of June 30, 2023 and December 31, 2022, respectively, were included in Other Assets in the Company’s consolidated balance sheets. Revaluation gains of $3 million and $37 million in the three and six months ended June 30, 2022, respectively, in connection with observable third-party transactions, were recorded in interest and investment income in the Company's consolidated statements of earnings. There were no revaluation gains in the three and six months ended June 30, 2023.

~~Operations in Ukraine and Russia~~

ADM employs approximately 640 people in Ukraine and operates an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office. The Company’s footprint in Russia is limited to operations related to the production and transport of essential food commodities and ingredients.

As a result of the ongoing conflict in Ukraine, the Company reviewed the valuation of its assets and concluded that as of June 30, 2023, receivables, net of allowances, are deemed collectible and market inventories are valued appropriately. The Company also evaluated the impact of Russia’s announcement of its purported annexation of four Ukrainian regions on the valuation of ADM’s assets in those regions and concluded that the assets are appropriately valued. As the conflict in Ukraine evolves, the Company will continue to review the valuation of these assets and make any required adjustments, which are not expected to be material to the Company’s consolidated financial statements.

Note 2. New Accounting Standards

~~Effective January 1, 2023, the Company adopted the amended guidance of Accounting Standards Codification (ASC) Topic 805,~~ ~~Business Combinations~~, which improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The amended guidance requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, ~~Revenue from Contracts with Customers~~,~~(Topic 606). The Company’s adoption of this amended guidance did not have an impact on its consolidated financial statements.~~

Effective January 1, 2023, the Company adopted the amended guidance of ASC Subtopic 405-50, Liabilities - Supplier Finance Programs, which enhances the transparency of supplier finance programs. The amended guidance requires an entity (buyer) in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ADM has Supplier Payable Programs (“SPP”) with financial institutions which act as its paying agents for payables due to certain of its suppliers. The Company has neither an economic interest in a supplier’s participation in the SPP nor a direct financial relationship with the financial institutions, and has concluded that its obligations to the suppliers, including amounts due and scheduled payment terms, are not impacted by their participation in the SPP. Accordingly, amounts associated with the SPP continue to be classified in current liabilities in the Company’s consolidated balance sheet and in operating activities in its consolidated statement of cash flows. The supplier invoices that have been confirmed as valid under the program require payment in full generally within 90 days of the invoice date. As of June 30, 2023 and December 31, 2022, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $310 million and $196 million, respectively.

Through December 31, 2024, the Company has the option to adopt the amended guidance of ~~ASC Topic~~Accounting Standards Codification (ASC) 848, Reference Rate Reform, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. ~~The Company plans to adopt the expedients and exceptions provided by the amended guidance before the December~~Through March 31, 2024, ~~expiry date~~ADM has completed the transition of its financing, funding, and ~~does~~hedging portfolios from LIBOR to alternative reference rates. The transition did not ~~expect the adoption of the amended guidance to~~ have an impact on ~~its~~the Company’s consolidated financial statements.

Effective December 31, 2024, the Company will be required to adopt the amended guidance of ASC 280,

~~Archer-Daniels-Midland Company~~Segment Reporting, which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for more detailed information about a reportable segment’s expenses. The amended guidance improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and permits entities to disclose more than one measure of a reportable segment’s profitability used by the Chief Operating Decision Maker. The adoption of the amended guidance will result in expanded disclosures in the Company’s segment and geographic information footnote but will not have an impact on the consolidated financial statements.

~~Notes~~Effective December 31, 2025, the Company will be required to ~~Consolidated Financial Statements (Continued)~~adopt the amended guidance of ASC 740, Income Taxes, which enhances the transparency and decision usefulness of income tax disclosures. The amendments address investor requests for more transparency about income tax information. The adoption of the amended guidance will result in expanded disclosures in the Company’s income taxes footnote but will not have an impact on the consolidated financial statements.

~~(Unaudited)~~

Note 3. Revenues

Revenue Recognition

The Company principally generates revenue from merchandising and transporting agricultural commodities, and manufacturing products for use in food, beverages, feed, energy, and industrial applications, and ingredients and solutions for human and animal nutrition. Revenue is measured based on the consideration specified in the contract with a customer. The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The Company applies the practical expedient in paragraph 10-50-14 of ~~Topic~~ASC 606,Revenue from Contracts with Customers, (Topic 606) and does not disclose information about remaining performance obligations that have original expected durations of one year or less. For transportation service contracts, the Company recognizes revenue over time as the mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606. The Company recognized revenue from transportation service contracts of ~~$200~~$193 million and ~~$378~~$178 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $209 million and $384 million for the three and six months ended June 30, 2022,~~ respectively. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20).

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are included in cost of products sold. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Taxes Collected from Customers and Remitted to Governmental Authorities

The Company does not include taxes assessed by governmental authorities that are (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers, in the measurement of transaction prices or as a component of revenues and cost of products sold.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3. Revenues (Continued)

Contract Liabilities

Contract liabilities relate to advance payments from customers for goods and services ~~that~~ the Company has yet to provide. Contract liabilities of ~~$286~~$508 million and ~~$694~~$626 million as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets. Revenues recognized in the three months ended March 31, 2024 from the December 31, 2023 contract liabilities were ~~$311 million~~$235 million.

Disaggregation of Revenues

The following tables present revenue disaggregated by timing of recognition and ~~$673 million~~major product lines for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024 and ~~$335 million and $581 million for the three and six months ended June 30, 2022, respectively.~~2023.


	Three Months Ended March 31, 2024
	Topic 606 Revenue						Topic 815(1)		Total
(In millions)	Point in Time		Over Time		Total		Revenue		Revenues









Ag Services and Oilseeds
Ag Services	$	1,022	$	193	$	1,215	$	9,982	$	11,197
Crushing	117		—		117		3,210		3,327
Refined Products and Other	548		—		548		2,147		2,695
Total Ag Services and Oilseeds	1,687		193		1,880		15,339		17,219
Carbohydrate Solutions
Starches and Sweeteners	1,593		—		1,593		563		2,156
Vantage Corn Processors	527		—		527		—		527
Total Carbohydrate Solutions	2,120		—		2,120		563		2,683
Nutrition
Human Nutrition	964		—		964		—		964
Animal Nutrition	872		—		872		—		872
Total Nutrition	1,836		—		1,836		—		1,836

Other Business	109		—		109		—		109
Total Revenues	$	5,752	$	193	$	5,945	$	15,902	$	21,847

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3. Revenues (Continued)

~~Disaggregation of Revenues~~


	Three Months Ended March 31, 2023
	Topic 606 Revenue						Topic 815(1)		Total
(In millions)	Point in Time		Over Time		Total		Revenue		Revenues









Ag Services and Oilseeds
Ag Services	$	1,017	$	178	$	1,195	$	10,500	$	11,695
Crushing	191		—		191		3,492		3,683
Refined Products and Other	626		—		626		2,575		3,201
Total Ag Services and Oilseeds	1,834		178		2,012		16,567		18,579
Carbohydrate Solutions
Starches and Sweeteners	2,084		—		2,084		653		2,737
Vantage Corn Processors	800		—		800		—		800
Total Carbohydrate Solutions	2,884		—		2,884		653		3,537
Nutrition
Human Nutrition	936		—		936		—		936
Animal Nutrition	917		—		917		—		917
Total Nutrition	1,853		—		1,853		—		1,853

Other Business	103		—		103		—		103
Total Revenues	$	6,674	$	178	$	6,852	$	17,220	$	24,072

~~The following tables present revenue disaggregated by timing of recognition and major product lines for the three and six months ended June 30, 2023 and 2022.~~

Three Months Ended June 30, 2023
Topic 606 Revenue
Topic 815(1)
Total
(In millions) Point in Time Over Time Total Revenue Revenues
Ag Services and Oilseeds
Ag Services $ 1,071 $ 200 $ 1,271 $ 12,095 $ 13,366
Crushing 32 — 32 3,448 3,480
Refined Products and Other 577 — 577 2,421 2,998
Total Ag Services and Oilseeds 1,680 200 1,880 17,964 19,844
Carbohydrate Solutions
Starches and Sweeteners 1,872 — 1,872 603 2,475
Vantage Corn Processors 906 — 906 — 906
Total Carbohydrate Solutions 2,778 — 2,778 603 3,381
Nutrition
Human Nutrition 966 — 966 — 966
Animal Nutrition 887 — 887 — 887
Total Nutrition 1,853 — 1,853 — 1,853
Other Business 112 — 112 — 112
Total Revenues $ 6,423 $ 200 $ 6,623 $ 18,567 $ 25,190

Six Months Ended June 30, 2023
Topic 606 Revenue
Topic 815(1)
Total
Point in Time Over Time Total Revenue Revenues
(In millions)
Ag Services and Oilseeds
Ag Services $ 2,088 $ 378 $ 2,466 $ 22,595 $ 25,061
Crushing 223 — 223 6,940 7,163
Refined Products and Other 1,203 — 1,203 4,996 6,199
Total Ag Services and Oilseeds 3,514 378 3,892 34,531 38,423
Carbohydrate Solutions
Starches and Sweeteners 3,956 — 3,956 1,256 5,212
Vantage Corn Processors 1,706 — 1,706 — 1,706
Total Carbohydrate Solutions 5,662 — 5,662 1,256 6,918
Nutrition
Human Nutrition 1,902 — 1,902 — 1,902
Animal Nutrition 1,804 — 1,804 — 1,804
Total Nutrition 3,706 — 3,706 — 3,706
Other Business 215 — 215 — 215
Total Revenues $ 13,097 $ 378 $ 13,475 $ 35,787 $ 49,262

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 3. Revenues (Continued)~~

Three Months Ended June 30, 2022
Topic 606 Revenue
Topic 815(1)
Total
(In millions) Point in Time Over Time Total Revenue Revenues
Ag Services and Oilseeds
Ag Services $ 1,013 $ 209 $ 1,222 $ 13,111 $ 14,333
Crushing 128 — 128 3,234 3,362
Refined Products and Other 744 — 744 2,990 3,734
Total Ag Services and Oilseeds 1,885 209 2,094 19,335 21,429
Carbohydrate Solutions
Starches and Sweeteners 1,889 — 1,889 630 2,519
Vantage Corn Processors 1,232 — 1,232 — 1,232
Total Carbohydrate Solutions 3,121 — 3,121 630 3,751
Nutrition
Human Nutrition 1,020 — 1,020 — 1,020
Animal Nutrition 983 — 983 — 983
Total Nutrition 2,003 — 2,003 — 2,003
Other Business 101 — 101 — 101
Total Revenues $ 7,110 $ 209 $ 7,319 $ 19,965 $ 27,284

Six Months Ended June 30, 2022
Topic 606 Revenue
Topic 815(1)
Total
Point in Time Over Time Total Revenue Revenues
(In millions)
Ag Services and Oilseeds
Ag Services $ 1,983 $ 384 $ 2,367 $ 23,813 $ 26,180
Crushing 253 — 253 6,331 6,584
Refined Products and Other 1,376 — 1,376 5,542 6,918
Total Ag Services and Oilseeds 3,612 384 3,996 35,686 39,682
Carbohydrate Solutions
Starches and Sweeteners 3,819 — 3,819 1,198 5,017
Vantage Corn Processors 2,100 — 2,100 — 2,100
Total Carbohydrate Solutions 5,919 — 5,919 1,198 7,117
Nutrition
Human Nutrition 1,978 — 1,978 — 1,978
Animal Nutrition 1,949 — 1,949 — 1,949
Total Nutrition 3,927 — 3,927 — 3,927
Other Business 208 — 208 — 208
Total Revenues $ 13,666 $ 384 $ 14,050 $ 36,884 $ 50,934

(1) Topic 815 revenue relates to the physical delivery or the settlement of the Company’s sales contracts that are accounted for as derivatives and are outside the scope of Topic 606.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 3. Revenues (Continued)~~

Ag Services and Oilseeds

The Ag Services and Oilseeds segment generates revenue from the sale of commodities, from service fees for the transportation of goods, from the sale of products manufactured in its global processing facilities, and from its structured trade finance activities. Revenue is measured based on the consideration specified in the contract. Revenue is recognized when a performance obligation is satisfied by transferring control over a product or providing service to a customer. For transportation service contracts, the Company recognizes revenue over time as the mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606. The amount of revenue recognized follows the contractually specified price, which may include freight or other contractually specified cost components. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20. The Company engages in various structured trade finance activities to leverage its global trade flows whereby the Company obtains letters of credit (LCs) to guarantee payments on both global purchases and sales of grain. LCs guaranteeing payment on grain sales are sold on a non-recourse basis with no continuing involvement. The Company earns returns from the difference in interest rates between the LCs that guarantee payment on the underlying purchases and sales of grain given the differing risk profiles of the underlying transactions. The net return related to structured trade finance activities is included in revenue and is not significant for the three and six months ended June 30, 2023 and 2022.

Carbohydrate Solutions

The Carbohydrate Solutions segment generates revenue from the sale of products manufactured at the Company’s global corn and wheat milling facilities around the world. Revenue is recognized when control over products is transferred to the customer. Products are shipped to customers from the Company’s various facilities and from its network of storage terminals. The amount of revenue recognized is based on the consideration specified in the contract, which could include freight and other costs depending on the specific shipping terms of each contract. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3. Revenues (Continued)

Nutrition

The Nutrition segment sells ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, edible beans, formula feeds, animal health and nutrition products, pet food and treats, and other specialty food and feed ingredients. Revenue is recognized when control over products is transferred to the customer. The amount of revenue recognized follows the contracted price or the mutually agreed price of the product. Freight and shipping are recognized as a component of revenue at the same time control transfers to the customer.

Other Business

Other Business includes the Company’s futures commission business whose primary sources of revenue are commissions and brokerage income generated from executing orders and clearing futures contracts and options on futures contracts on behalf of its customers. Commissions and brokerage revenue are recognized on the date the transaction is executed. Other Business also includes the Company’s captive insurance business, which generates third party revenue through its proportionate share of premiums from third-party reinsurance pools. Reinsurance premiums are recognized on a straight-line basis over the period underlying the policy.

Note 4. Acquisitions

During the three months ended March 31, 2024, the Company acquired Revela Foods (“Revela”), a Wisconsin-based developer and manufacturer of innovative dairy flavor ingredients and solutions, FDL, a UK-based leading developer and producer of premium flavor and functional ingredient systems, and PT Trouw Nutrition Indonesia (“PT”), a subsidiary of Nutreco and leading provider of functional and nutritional solutions for livestock farming in Indonesia, for an aggregate cash consideration of $924 million.

The aggregate cash consideration of these acquisitions, net of $9 million in cash acquired, was allocated as follows, subject to final measurement period adjustments:


(In millions)	Revela		FDL		PT		Total
Working capital	$	50	$	—	$	5	$	55
Property, plant, and equipment	38		33		5		76
Goodwill	403		145		5		553
Other intangible assets	166		97		—		263
Other long-term assets	28		1		—		29
Long-term liabilities	(35)		(26)		—		(61)
Aggregate cash consideration	$	650	$	250	$	15	$	915

Goodwill recorded in connection with the acquisitions is primarily attributable to the synergies expected to arise after the Company’s acquisition of the businesses. Of the $553 million allocated to goodwill, none is expected to be deductible for tax purposes.

These acquisitions add capabilities to the Human and Animal Nutrition businesses. The Company’s consolidated statement of earnings for the quarter ended March 31, 2024 includes the post-acquisition results of the acquired businesses which were immaterial.

1413

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4. Acquisitions (Continued)

The following table sets forth the fair values and the useful lives of the other intangible assets acquired.


	Useful Lives			Revela		FDL		Total
	(In years)			(In millions)



Intangible assets with finite lives:
Trademarks/brands	3			$	—	$	4	$	4
Customer lists	10	to	18	124		73		197
Recipes and others	10	to	21	42		20		62
Total other intangible assets acquired				$	166	$	97	$	263

Note 4.5. Fair Value Measurements

The following tables set forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.


		Fair Value Measurements at June 30, 2023									Fair Value Measurements at March 31, 2024
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total			Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
		(In millions)									(In millions)

Assets:
Assets:
Assets:	Assets:
Inventories carried at market	Inventories carried at market	$	—	$	3,631	$	2,859	$	6,490
Unrealized derivative gains:	Unrealized derivative gains:									Unrealized derivative gains:
Commodity contracts	Commodity contracts	—		728		886		1,614
Foreign currency contracts	Foreign currency contracts	—		211		—		211

Cash equivalents	Cash equivalents	471		—		—		471

Cash equivalents

Cash equivalents

Segregated investments
Segregated investments
Segregated investments	Segregated investments	2,145		—		—		2,145

Total Assets	Total Assets	$	2,616	$	4,570	$	3,745	$	10,931
Total Assets
Total Assets

Liabilities:
Liabilities:
Liabilities:	Liabilities:
Unrealized derivative losses:	Unrealized derivative losses:									Unrealized derivative losses:
Commodity contracts	Commodity contracts	$	—	$	631	$	791	$	1,422
Foreign currency contracts	Foreign currency contracts	—		204		—		204

Inventory-related payables	Inventory-related payables	—		1,077		65		1,142

Inventory-related payables

Inventory-related payables

Total Liabilities	Total Liabilities	$	—	$	1,912	$	856	$	2,768
Total Liabilities
Total Liabilities

1514

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.5. Fair Value Measurements (Continued)


		Fair Value Measurements at December 31, 2022									Fair Value Measurements at December 31, 2023
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total			Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
		(In millions)									(In millions)

Assets:	Assets:
Assets:
Assets:
Inventories carried at market	Inventories carried at market	$	—	$	6,281	$	2,760	$	9,041
Unrealized derivative gains:	Unrealized derivative gains:									Unrealized derivative gains:
Commodity contracts	Commodity contracts	—		796		541		1,337
Foreign currency contracts	Foreign currency contracts	—		258		—		258
Interest rate contracts		—		109		—		109

Cash equivalents
Cash equivalents
Cash equivalents	Cash equivalents	405		—		—		405

Segregated investments	Segregated investments	1,453		—		—		1,453
Segregated investments
Segregated investments

Total Assets	Total Assets	$	1,858	$	7,444	$	3,301	$	12,603
Total Assets
Total Assets

Liabilities:
Liabilities:
Liabilities:	Liabilities:
Unrealized derivative losses:	Unrealized derivative losses:									Unrealized derivative losses:
Commodity contracts	Commodity contracts	$	—	$	665	$	603	$	1,268
Foreign currency contracts	Foreign currency contracts	—		275		—		275

Debt conversion option		—		—		6		6

Inventory-related payables

Inventory-related payables

Inventory-related payables	Inventory-related payables	—		1,181		89		1,270
Total Liabilities	Total Liabilities	$	—	$	2,121	$	698	$	2,819

Estimated fair values for inventories and inventory-related payables carried at market are based on exchange-quoted prices, adjusted for differences in local markets and quality, referred to as basis. Market valuations for the Company’s inventories are adjusted for location and quality (basis) because the exchange-quoted prices represent contracts ~~that have~~with standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using the inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the inventory is classified in Level 3. Changes in the fair value of inventories and inventory-related payables are recognized in the consolidated statements of earnings as a component of cost of products sold.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.5. Fair Value Measurements (Continued)

Derivative contracts include exchange-traded commodity futures and options contracts, forward commodity purchase and sale contracts, and over-the-counter (OTC) instruments related primarily to agricultural commodities, energy, interest rates, and foreign currencies. Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified in Level 1. Substantially all of the Company’s exchange-traded futures and options contracts are cash-settled on a daily basis and, therefore, are not included in these tables. Fair value for forward commodity purchase and sale contracts is estimated based on exchange-quoted prices adjusted for differences in local markets. Market valuations for the Company’s forward commodity purchase and sale contracts are adjusted for location (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When observable inputs are available for substantially the full term of the contract, it is classified in Level 2. When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the contract is classified in Level 3. Except for certain derivatives designated as cash flow hedges, changes in the fair value of commodity-related derivatives are recognized in the consolidated statements of earnings as a component of cost of products sold. Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net, depending upon the purpose of the contract. The changes in the fair value of derivatives designated as effective cash flow hedges are recognized in the consolidated balance sheets as a component of accumulated other comprehensive income (AOCI) until the hedged items are recorded in earnings or it is probable the hedged transaction will no longer occur.

The Company’s cash equivalents are comprised of money market funds valued using quoted market prices and are classified as Level 1.

The Company’s segregated investments are comprised of U.S. Treasury securities. U.S. Treasury securities are valued using quoted market prices and are classified in Level 1.

The debt conversion option iswas the equity linked embedded derivative related to the exchangeable bonds. The fair value of the embedded derivative iswas included in long-term debt, with changes in fair value recognized as interest, and iswas valued with the assistance of a third-party pricing service (a level 3 measurement).

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended ~~June 30, 2023.~~March 31, 2024.


		Level 3 Fair Value Asset Measurements at						Level 3 Fair Value Asset Measurements at
	March 31, 2024									March 31, 2024
		June 30, 2023						Inventories Carried at Market	Commodity Derivative Contracts Gains		Total Assets
		Inventories Carried at Market		Commodity Derivative Contracts Gains		Total Assets		(In millions)
		(In millions)
Balance, March 31, 2023		$	3,503	$	649	$	4,152
Balance, December 31, 2023
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	362		475		837
Purchases	Purchases	9,910		—		9,910
Sales	Sales	(10,646)		—		(10,646)
Settlements	Settlements	(4)		(457)		(461)
Transfers into Level 3	Transfers into Level 3	547		240		787
Transfers out of Level 3	Transfers out of Level 3	(813)		(21)		(834)
Ending balance, June 30, 2023		$	2,859	$	886	$	3,745
Ending balance, March 31, 2024

* Includes increase in unrealized gains of ~~$780~~$564 million relating to Level 3 assets still held at ~~June 30, 2023.~~March 31, 2024.

1716

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.5. Fair Value Measurements (Continued)

The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended ~~June 30, 2023.~~March 31, 2024.


		Level 3 Fair Value Liability Measurements at
		Level 3 Fair Value Liability Measurements at
		Level 3 Fair Value Liability Measurements at
											March 31, 2024
		Level 3 Fair Value Liability Measurements at						Inventory- related Payables				Commodity Derivative Contracts Losses	Total Liabilities
		June 30, 2023						(In millions)
		Inventory- related Payables		Commodity Derivative Contracts Losses		Debt Conversion Option			Total Liabilities
		(In millions)

Balance, March 31, 2023		$	57	$	455	$	1		$	513
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*		4		535		(1)			538
Balance, December 31, 2023
Balance, December 31, 2023
Balance, December 31, 2023
Total increase (decrease) in net realized/unrealized losses included in cost of products sold*
Purchases	Purchases	5		—		—			5
Sales	Sales	—		—		—			—
Settlements	Settlements	(3)		(283)		—			(286)
Transfers into Level 3	Transfers into Level 3	2		86		—			88
Transfers out of Level 3	Transfers out of Level 3	—		(2)		—			(2)
Ending balance, June 30, 2023		$	65	$	791	$	—		$	856
Ending balance, March 31, 2024

* Includes increase in unrealized losses of ~~$545~~$338 million relating to Level 3 liabilities still held at ~~June 30, 2023.~~March 31, 2024.


								Level 3 Fair Value Asset Measurements at
	March 31, 2023									March 31, 2023
								Inventories Carried at Market	Commodity Derivative Contracts Gains		Total Assets
		Level 3 Fair Value Asset Measurements at						(In millions)
		June 30, 2022
		Inventories Carried at Market		Commodity Derivative Contracts Gains		Total Assets
		(In millions)

Balance, March 31, 2022		$	3,959	$	828	$	4,787
Balance, December 31, 2022
Balance, December 31, 2022
Balance, December 31, 2022
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	(216)		319		103
Purchases	Purchases	11,678		—		11,678
Sales	Sales	(11,993)		—		(11,993)
Settlements	Settlements	—		(495)		(495)
Transfers into Level 3	Transfers into Level 3	222		293		515
Transfers out of Level 3	Transfers out of Level 3	(405)		(65)		(470)
Ending balance, June 30, 2022		$	3,245	$	880	$	4,125
Ending balance, March 31, 2023

* Includes increase in unrealized gains of ~~$253~~$632 million relating to Level 3 assets still held at ~~June 30, 2022.~~March 31, 2023.

1817

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.5. Fair Value Measurements (Continued)


		Level 3 Fair Value Liability Measurements at
		Level 3 Fair Value Liability Measurements at
		Level 3 Fair Value Liability Measurements at
											March 31, 2023
		Level 3 Fair Value Liability Measurements at						Inventory- related Payables				Commodity Derivative Contracts Losses	Debt Conversion Option	Total Liabilities
		June 30, 2022						(In millions)
		Inventory- related Payables		Commodity Derivative Contracts Losses		Debt Conversion Option			Total Liabilities
		(In millions)

Balance, March 31, 2022		$	53	$	1,856	$	30		$	1,939
Balance, December 31, 2022
Balance, December 31, 2022
Balance, December 31, 2022
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*	Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*	(2)		293		(19)			272
Purchases	Purchases	7		—		—			7
Sales		(3)		—		—			(3)

Settlements
Settlements
Settlements	Settlements	—		(1,251)		—			(1,251)
Transfers into Level 3	Transfers into Level 3	—		161		—			161
Transfers out of Level 3	Transfers out of Level 3	—		(99)		—			(99)
Ending balance, June 30, 2022		$	55	$	960	$	11		$	1,026
Ending balance, March 31, 2023

* Includes increase in unrealized losses of ~~$294~~$248 million relating to Level 3 liabilities still held at ~~June 30, 2022.~~

~~The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30,~~March 31, 2023.

Level 3 Fair Value Asset Measurements at
June 30, 2023
Inventories
Carried at
Market Commodity
Derivative
Contracts
Gains

Total
Assets
(In millions)
Balance, December 31, 2022 $ 2,760 $ 541 $ 3,301
Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 364 952 1,316
Purchases 18,575 — 18,575
Sales (18,900) — (18,900)
Settlements (4) (839) (843)
Transfers into Level 3 1,152 290 1,442
Transfers out of Level 3 (1,088) (58) (1,146)
Ending balance, June 30, 2023 $ 2,859 $ 886 $ 3,745

* Includes increase in unrealized gains of $1.4 billion relating to Level 3 assets still held at June 30, 2023.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 4. Fair Value Measurements (Continued)~~

~~The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2023.~~

Level 3 Fair Value Liability Measurements at
June 30, 2023
Inventory-
related
Payables Commodity
Derivative
Contracts
Losses Debt Conversion Option

Total
Liabilities
(In millions)
Balance, December 31, 2022 $ 89 $ 603 $ 6 $ 698
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* 2 778 (6) 774
Purchase 7 — — 7
Sales — — — —
Settlements (34) (707) — (741)
Transfers into Level 3 1 125 — 126
Transfers out of Level 3 — (8) — (8)
Ending balance, June 30, 2023 $ 65 $ 791 $ — $ 856

* Includes increase in unrealized losses of $0.8 billion relating to Level 3 liabilities still held at June 30, 2023.

~~The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2022.~~

Level 3 Fair Value Asset Measurements at
June 30, 2022
Inventories
Carried at
Market Commodity
Derivative
Contracts
Gains

Total
Assets
(In millions)
Balance, December 31, 2021 $ 3,004 $ 460 $ 3,464
Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 431 952 1,383
Purchases 21,230 — 21,230
Sales (21,308) — (21,308)
Settlements — (771) (771)
Transfers into Level 3 549 316 865
Transfers out of Level 3 (661) (77) (738)
Ending balance, June 30, 2022 $ 3,245 $ 880 $ 4,125

* Includes increase in unrealized gains of $1.7 billion relating to Level 3 assets still held at June 30, 2022.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 4. Fair Value Measurements (Continued)~~

~~The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2022.~~

Level 3 Fair Value Liability Measurements at
June 30, 2022
Inventory-
related
Payables Commodity
Derivative
Contracts
Losses Debt Conversion Option

Total
Liabilities
(In millions)
Balance, December 31, 2021 $ 106 $ 815 $ 15 $ 936
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* (4) 1,669 (4) 1,661
Purchases 9 — — 9
Sales (56) — — (56)
Settlements — (1,729) — (1,729)
Transfers into Level 3 — 322 — 322
Transfers out of Level 3 — (117) — (117)
Ending balance, June 30, 2022 $ 55 $ 960 $ 11 $ 1,026

* Includes increase in unrealized losses of $1.7 billion relating to Level 3 liabilities still held at June 30, 2022.

Transfers into Level 3 of assets and liabilities previously classified in Level 2 were due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts rising above the 10% threshold. Transfers out of Level 3 were primarily due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts falling below the 10% threshold and thus permitting reclassification to Level 2.

In some cases, the price components that result in differences between exchange-traded prices and local prices for inventories and commodity purchase and sale contracts are observable based upon available quotations for these pricing components, and in some cases, the differences are unobservable. These price components primarily include transportation costs and other adjustments required due to location, quality, or other contract terms. In the table below, these other adjustments are referred to as basis. The changes in unobservable price components are determined by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these unobservable price ~~components.~~components..

2118

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.5. Fair Value Measurements (Continued)

The following table sets forth the weighted average percentage of the unobservable price components included in the Company’s Level 3 valuations as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. The Company’s Level 3 measurements may include basis only, transportation cost only, or both price components. As an example, for Level 3 inventories with basis, the unobservable component as of ~~June 30, 2023~~March 31, 2024 is a weighted average ~~21.7%~~28.2% of the total price for assets and ~~21.5%~~25.9% of the total price for liabilities.


		Weighted Average % of Total Price
		June 30, 2023				December 31, 2022
	Weighted Average % of Total Price																		Weighted Average % of Total Price
	March 31, 2024														March 31, 2024						December 31, 2023
Component Type	Component Type	Assets		Liabilities		Assets		Liabilities		Component Type	Assets			Liabilities			Assets					Liabilities
Inventories and Related Payables	Inventories and Related Payables
Basis
Basis
Basis	Basis	21.7	%	21.5	%	19.4	%	15.2	%	28.2	%		25.9	%		25.0	%			33.2		%
Transportation cost	Transportation cost	14.1	%	—	%	10.5	%	—	%	Transportation cost	18.6	%		—	%		11.5	%				—	%

Commodity Derivative Contracts	Commodity Derivative Contracts
Commodity Derivative Contracts
Commodity Derivative Contracts
Basis
Basis
Basis	Basis	26.1	%	21.6	%	22.7	%	26.5	%	40.1	%		28.2	%		24.2	%			24.9		%
Transportation cost	Transportation cost	6.4	%	2.4	%	13.5	%	3.7	%	Transportation cost	8.3	%		1.5	%		9.3	%				3.2	%

In certain of the Company’s principal markets, the Company relies on price quotes from third parties to value its inventories and physical commodity purchase and sale contracts. These price quotes are generally not further adjusted by the Company in determining the applicable market price. In some cases, availability of third-party quotes is limited to only one or two independent sources. In these situations, absent other corroborating evidence, the Company considers these price quotes as 100% unobservable and, therefore, the fair value of these items is reported in Level 3.

Note 5.6. Derivative Instruments and Hedging Activities

Derivatives Not Designated as Hedging Instruments

The majority of the Company’s derivative instruments have not been designated as hedging instruments. The Company uses exchange-traded futures and exchange-traded and OTC options contracts to manage its net position of merchandisable agricultural product inventories and forward cash purchase and sales contracts to reduce price risk caused by market fluctuations in agricultural commodities and foreign currencies. The Company also uses exchange-traded futures and exchange-traded and OTC options contracts as components of merchandising strategies designed to enhance margins. The results of these strategies can be significantly impacted by factors such as the correlation between the value of exchange-traded commodities futures contracts and the value of the underlying commodities, counterparty contract defaults, and volatility of freight markets. Derivatives, including exchange-traded contracts and forward commodity purchase or sale contracts, and inventories of certain merchandisable agricultural products, which include amounts acquired under deferred pricing contracts, are stated at fair ~~value or market~~ value. Inventory is not a derivative and therefore fair values of and changes in fair values of inventories are not included in the tables below.

The following table sets forth the fair value of derivatives not designated as hedging instruments as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.


		June 30, 2023				December 31, 2022				March 31, 2024		December 31, 2023
		Assets		Liabilities		Assets		Liabilities		Assets	Liabilities		Assets	Liabilities
		(In millions)								(In millions)

Foreign Currency Contracts	Foreign Currency Contracts	$	167	$	85	$	154	$	275
Foreign Currency Contracts
Foreign Currency Contracts

Commodity Contracts	Commodity Contracts	1,612		1,422		1,337		1,248
Debt Conversion Option		—		—		—		6
Commodity Contracts
Commodity Contracts

Total	Total	$	1,779	$	1,507	$	1,491	$	1,529
Total
Total

2219

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 5.6. Derivative Instruments and Hedging Activities (Continued)

The following tables set forth the pre-tax gains (losses) on derivatives not designated as hedging instruments that have been included in the consolidated statements of earnings for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023.


						Other (income) expense - net

								Other (income) expense - net
				Cost of						Interest
(In millions)	(In millions)	Revenues		products sold						expense
Three Months Ended June 30, 2023
(In millions)
(In millions)
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Three Months Ended March 31, 2024
Consolidated Statement of Earnings	Consolidated Statement of Earnings	$	25,190	$	23,307		$		(37)				$	180
Consolidated Statement of Earnings
Consolidated Statement of Earnings

Pre-tax gains (losses) on:

Pre-tax gains (losses) on:

Pre-tax gains (losses) on:	Pre-tax gains (losses) on:

Foreign Currency Contracts	Foreign Currency Contracts	$	(15)	$	153		$	43			$	—

Foreign Currency Contracts

Foreign Currency Contracts
Commodity Contracts	Commodity Contracts	—		35			—				—
Debt Conversion Option		—		—			—				1
Commodity Contracts
Commodity Contracts

Total gain (loss) recognized in earnings	Total gain (loss) recognized in earnings	$	(15)	$	188		$	43			$	1			$	217

Three Months Ended June 30, 2022
Total gain (loss) recognized in earnings

Total gain (loss) recognized in earnings

Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
Three Months Ended March 31, 2023
Consolidated Statement of Earnings
Consolidated Statement of Earnings
Consolidated Statement of Earnings	Consolidated Statement of Earnings	$	27,284	$	25,184		$	(83)			$	73

Pre-tax gains (losses) on:	Pre-tax gains (losses) on:

Pre-tax gains (losses) on:

Pre-tax gains (losses) on:
Foreign Currency Contracts
Foreign Currency Contracts
Foreign Currency Contracts	Foreign Currency Contracts	$	13	$	(95)		$	240			$	—
Commodity Contracts	Commodity Contracts	—		1,062			—				—
Commodity Contracts
Commodity Contracts
Debt Conversion Option	Debt Conversion Option	—		—			—				19
Debt Conversion Option
Debt Conversion Option
Total gain (loss) recognized in earnings
Total gain (loss) recognized in earnings
Total gain (loss) recognized in earnings	Total gain (loss) recognized in earnings	$	13	$	967		$	240			$	19			$	1,239

Other (income) expense - net
Cost of Interest
(In millions) Revenues products sold expense
Six Months Ended June 30, 2023
Consolidated Statement of Earnings $ 49,262 $ 45,299 $ (81) $ 327
Pre-tax gains (losses) on:
Foreign Currency Contracts $ (26) $ 248 $ 27 $ —
Commodity Contracts — 475 — —
Debt Conversion Option — — — 6
Total gain (loss) recognized in earnings $ (26) $ 723 $ 27 $ 6 $ 730
Six Months Ended June 30, 2022
Consolidated Statement of Earnings $ 50,934 $ 46,937 $ (116) $ 165
Pre-tax gains (losses) on:
Foreign Currency Contracts $ (25) $ 348 $ 263 $ —
Commodity Contracts — (39) — —
Debt Conversion Option — — — 4
Total gain (loss) recognized in earnings $ (25) $ 309 $ 263 $ 4 $ 551

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 5. Derivative Instruments and Hedging Activities (Continued)~~

Changes in the market value of inventories of certain merchandisable agricultural commodities, inventory-related payables, forward cash purchase and sales contracts, exchange-traded futures and exchange-traded and OTC options contracts are recognized in earnings immediately as a component of cost of products sold.

Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net depending on the purpose of the contract.

Derivatives Designated as Cash Flow and Net Investment Hedging Strategies

The Company had certain derivatives designated as cash flow and net investment hedges as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

For derivative instruments that are designated and qualify as highly-effective cash flow hedges (i.e., hedging the exposure to variability in expected future cash flow that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of AOCI and as an operating activity in the statement of cash flows, and is reclassified into earnings in the same line item affected by the hedged transaction in the same period or periods during which the hedged transaction affects earnings. Hedge components excluded from the assessment of effectiveness and gains and losses related to discontinued hedges are recognized in the consolidated statement of earnings during the current period.

Commodity Contracts

For each of the hedge programs described below, the derivatives are designated as cash flow hedges. The changes in the market value of such derivative contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item. Once the hedged item is recognized in earnings, the gains and losses arising from the hedge are reclassified from AOCI to either revenues or cost of products sold, as applicable.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 6. Derivative Instruments and Hedging Activities (Continued)

The Company uses futures or options contracts to hedge the purchase price of anticipated volumes of corn to be purchased and processed in a future month. The objective of this hedging program is to reduce the variability of cash flows associated with the Company’s forecasted purchases of corn. The Company’s corn processing plants normally grind approximately 6559 million bushels of corn per month. During the past 12 months, the Company hedged between ~~17%~~12% and ~~33%~~34% of its monthly grind. At ~~June 30, 2023,~~March 31, 2024, the Company had designated hedges representing between 1%0% and ~~34%~~29% of its anticipated monthly grind of corn for the next 12 months.

The Company, from time to time, also uses futures, options, and swaps to hedge the sales price of certain ethanol sales contracts. The Company has established hedging programs for ethanol sales contracts that are indexed to unleaded gasoline prices and to various exchange-traded ethanol contracts. The objective of these hedging programs is to reduce the variability of cash flows associated with the Company’s sales of ethanol. During the past 12 months and as of June 30, 2023, the Company had no hedges related to ethanol sales under these programs.

The Company uses futures and options contracts to hedge the purchase price of the anticipated volumes of soybeans to be purchased and processed in a future month for certain of its U.S. soybean crush facilities, subject to certain program limits. The Company also uses futures or options contracts to hedge the sales prices of anticipated soybean meal and soybean oil sales proportionate to the soybean crushing process at these facilities, subject to certain program limits. During the past 12 months, the Company hedged between ~~92%~~77% and 100% of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities. At ~~June 30, 2023,~~March 31, 2024, the Company had designated hedges representing between 0%3% and 100% of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities over the next 12 months.

The Company uses futures and OTC swaps to hedge the purchase price of anticipated volumes of natural gas consumption in a future month for certain of its facilities in North America and Europe, subject to certain program limits. During the past 12 months, the Company hedged between ~~71%~~39% and ~~91%~~80% of the anticipated monthly natural gas consumption at the designated facilities. At ~~June 30, 2023,~~March 31, 2024, the Company had designated hedges representing between ~~37%~~34% and ~~78%~~70% of the anticipated monthly natural gas consumption over the next 12 months.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 5. Derivative Instruments and Hedging Activities (Continued)~~

As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had after-tax losses of ~~$91~~$9 million and ~~$17~~after-tax gains of $42 million in AOCI, respectively, related to gains and losses from these programs. The Company expects to recognize $919 million of the ~~June 30, 2023~~March 31, 2024 after-tax losses in its consolidated statement of earnings during the next 12 months.

~~Interest Rate Contracts~~

The Company used swap locks designated as cash flow hedges to hedge the changes in the forecasted interest payments due to changes in the benchmark rate leading up to future bond issuance dates. The terms of the swap locks matched the terms of the forecasted interest payments. The deferred gains and losses will be recognized in interest expense over the period in which the related interest payments will be paid. The Company executed swap locks maturing on various dates with an aggregate notional amount of $400 million as of December 31, 2022. During the quarter ended March 31, 2023, the Company unwound the swap locks in anticipation of the April 3, 2023 debt issuance.

Foreign Currency Contracts

The Company uses cross-currency swaps and foreign exchange forwards designated as net investment hedges to protect the Company’s investment in a foreign subsidiary against changes in foreign currency exchange rates. The Company executed USD-fixed to Euro-fixed cross-currency swaps with an aggregate notional amount of $0.8 billion as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, and foreign exchange forwards with an aggregate notional amount of ~~$3.2 billion and $2.5~~$2.1 billion as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022, respectively.~~2023.

As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had after-tax gains of ~~$16~~$46 million and ~~$79~~after-tax losses of $5 million in AOCI, respectively, related to foreign exchange gains and losses from net investment hedge transactions. The amount is deferred in AOCI until the underlying investment is divested.

The following table sets forth the fair value of derivatives designated as hedging instruments as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.


		June 30, 2023				December 31, 2022				March 31, 2024		December 31, 2023
		Assets		Liabilities		Assets		Liabilities		Assets	Liabilities		Assets	Liabilities
		(In millions)								(In millions)
Commodity Contracts	Commodity Contracts	$	2	$	—	$	—	$	20
Foreign Currency Contracts	Foreign Currency Contracts	44		119		104		$	—
Interest Rate Contracts		—		—		109		—

Total	Total	$	46	$	119	$	213	$	20
Total
Total

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 6. Derivative Instruments and Hedging Activities (Continued)

The following table sets forth the pre-tax gains (losses) on derivatives designated as hedging instruments that have been included in the consolidated statements of earnings for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023.

~~Archer-Daniels-Midland Company~~


	Cost of products sold
(In millions)
Three Months Ended March 31, 2024
Consolidated Statement of Earnings	$	20,188

Effective amounts recognized in earnings
Pre-tax gains (losses) on:

Commodity Contracts	$	19

Total gain (loss) recognized in earnings	$	19	$	19

Three Months Ended March 31, 2023
Consolidated Statement of Earnings	$	21,992

Effective amounts recognized in earnings
Pre-tax gains (losses) on:

Commodity Contracts	$	(104)




Total gain (loss) recognized in earnings	$	(104)	$	(104)

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 5. Derivative Instruments and Hedging Activities (Continued)~~

Cost of products sold
(In millions)
Three Months Ended June 30, 2023
Consolidated Statement of Earnings $ 23,307
Effective amounts recognized in earnings
Pre-tax gains (losses) on:
Commodity Contracts $ (41)
Total gain (loss) recognized in earnings $ (41) $ (41)
Three Months Ended June 30, 2022
Consolidated Statement of Earnings $ 25,184
Effective amounts recognized in earnings
Pre-tax gains (losses) on:
Commodity Contracts $ 150
Total gain (loss) recognized in earnings $ 150 $ 150

Cost of products sold
(In millions)
Six Months Ended June 30, 2023
Consolidated Statement of Earnings $ 45,299
Effective amounts recognized in earnings
Pre-tax gains (losses) on:
Commodity Contracts $ (145)
Total gain (loss) recognized in earnings $ (145) $ (145)
Six Months Ended June 30, 2022
Consolidated Statement of Earnings $ 46,937
Effective amounts recognized in earnings
Pre-tax gains (losses) on:
Commodity Contracts $ 248
Total gain (loss) recognized in earnings $ 248 $ 248

Other Net Investment Hedging Strategies

The Company has designated ~~€0.9 billion and €1.3~~€0.7 billion of its outstanding long-term debt and commercial paper borrowings at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022, respectively,~~2023 as hedges of its net investment in a foreign subsidiary. As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had after-tax gains of ~~$208~~$224 million and ~~$228~~$212 million in AOCI, respectively, related to foreign exchange gains and losses from the net investment hedge transactions. The amount is deferred in AOCI until the underlying investment is ~~divested~~divested.

2622

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 6.7. Other Current Assets

The following table sets forth the items in other current assets:


		June 30,		December 31,
		2023		2022
	March 31,						March 31,	December 31,
	2024						2024	2023
		(In millions)				(In millions)

Unrealized gains on derivative contracts	Unrealized gains on derivative contracts	$	1,825	$	1,704
Unrealized gains on derivative contracts
Unrealized gains on derivative contracts

Margin deposits and grain accounts
Margin deposits and grain accounts
Margin deposits and grain accounts	Margin deposits and grain accounts	460		723
Customer omnibus receivable	Customer omnibus receivable	1,068		1,309
Financing receivables - net (1)	Financing receivables - net (1)	161		235
Insurance premiums receivable	Insurance premiums receivable	71		54
Prepaid expenses	Prepaid expenses	349		443
Biodiesel tax credit	Biodiesel tax credit	177		68
Tax receivables	Tax receivables	544		616
Non-trade receivables	Non-trade receivables	328		361
Other current assets	Other current assets	98		153
		$	5,081	$	5,666

(1) The Company provides financing to certain suppliers, primarily Brazilian farmers, to finance a portion of the suppliers’ production costs. The amounts are reported net of allowances of $3$6 million at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. Interest earned on financing receivables of $4$5 million and ~~$10~~$6 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $4 million and $8 million for the three and six months ended June 30, 2022,~~ respectively, is included in interest and investment income in the consolidated statements of earnings.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

Note 7.8. Accrued Expenses and Other Payables

The following table sets forth the items in accrued expenses and other payables:


	March 31,						March 31,	December 31,
	2024						2024	2023
						(In millions)
		June 30,		December 31,
		2023		2022
		(In millions)

Unrealized losses on derivative contracts
Unrealized losses on derivative contracts
Unrealized losses on derivative contracts	Unrealized losses on derivative contracts	$	1,626	$	1,543
Accrued compensation	Accrued compensation	302		475
Income tax payable	Income tax payable	268		248
Other taxes payable	Other taxes payable	178		136

Insurance claims payable	Insurance claims payable	294		223

Insurance claims payable

Insurance claims payable
Contract liability	Contract liability	286		694

Other accruals and payables	Other accruals and payables	1,315		1,476
		$	4,269	$	4,795
Other accruals and payables

Other accruals and payables

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 8.9. Debt and Financing Arrangements

~~On April 3, 2023, the Company issued $500 million aggregate principal amount of 4.500% Notes due August 15, 2033. Net proceeds before expenses were $493 million.~~

~~In June 2023, the Company redeemed €600 million aggregate principal amount of 1.750% Notes due 2023.~~

During the six months ended June 30, 2023, Archer Daniels Midland Singapore, Pte. Ltd., a wholly-owned subsidiary of the Company, increased its revolving credit facility from $500 million to $750 million. The facility is used to finance working capital requirements and for general corporate purposes.

At ~~June 30, 2023,~~March 31, 2024, the fair value of the Company’s long-term debt was below the carrying value by $0.3 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards).

At ~~June 30, 2023,~~March 31, 2024, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling ~~$13.6~~$12.8 billion, of which ~~$11.3~~$8.8 billion was unused. Of the Company’s total lines of credit, $5.0 billion supported the combined U.S. and European commercial paper borrowing programs, against which there was no$0.9 billion of commercial paper outstanding at ~~June 30, 2023.~~March 31, 2024.

The Company has accounts receivable securitization programs (the “Programs”). The Programs provide the Company with up to $3.0 billion in funding resulting from the sale of accounts receivable with ~~$0.9~~$0.7 billion unused capacity as of ~~June 30, 2023.~~March 31, 2024.

Note 9.10. Income Taxes

The Company’s effective tax rate was ~~18.0% and 17.0%~~18.8% for the three ~~and six~~ months ended ~~June 30, 2023, respectively,~~March 31, 2024 compared to ~~18.4% and 17.4%~~16.1% for the three ~~and six~~ months ended ~~June 30, 2022, respectively.~~March 31, 2023. The ~~decrease~~increase in the rate was primarily due to the change in the geographic mix of forecasted pretax earnings and the impact of discrete tax items.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (“Inflation Act”), which includes, among other provisions, changes to the U.S. corporate income tax system, includingThe Organization for Economic Cooperation and Development’s Pillar Two initiative introduced a 15% global minimum tax applied on a country-by-country basis that has been enacted in certain jurisdictions in which the Company operates, with effective dates starting in fiscal year 2024. The Company is in scope of the enacted legislation and has performed an assessment of the potential exposure based on ~~“adjusted~~its most recent tax filings, country-by-country reporting, and the financial ~~statement income” and a one percent excise tax on net repurchases of stock for tax years beginning after December 31, 2022. The Company’s adoption~~results of the ~~Inflation Act did not have a significant impact~~constituent entities. Based on the ~~Company’s consolidated financial statements.~~assessment, the effective tax rates in most of the jurisdictions in which the Company operates are above the 15% global minimum tax threshold. However, there are a limited number of jurisdictions where the effective tax rate is close to 15%. ADM does not expect a material liability to global minimum tax in those jurisdictions.

A~~rcher-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 9. Income Taxes (Continued)~~

The Company is subject to income taxation and routine examinations in many jurisdictions around the world and frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature, and amount of deductions and the allocation of income among various tax jurisdictions. In its routine evaluations of the exposure associated with various tax filing positions, the Company recognizes a liability, when necessary, for estimated potential tax owed by the Company in accordance with applicable accounting standards. Resolution of the related tax positions, through negotiations with relevant tax authorities or through litigation, may take years to complete. Therefore, it is difficult to predict the timing for resolution of tax positions and the Company cannot predict or provide assurance as to the ultimate outcome of these ongoing or future examinations. However, the Company does not anticipate the total amount of unrecognized tax benefits will increase or decrease significantly in the next twelve months. Given the long periods of time involved in resolving tax positions, the Company does not expect the recognition of unrecognized tax benefits will have a material impact on the Company’s effective income tax rate in any given period.

The Company’s subsidiary in Argentina, ADM Agro SRL (formerly ADM Argentina SA and Alfred C. Toepfer Argentina SRL), received tax assessments challenging transfer prices used to price grain exports for the tax years 1999 through 2011, 2014 and 2015. As of June 30, 2023, these assessments totaled $3 million in tax and up to $18 million in interest (adjusted for variation in currency exchange rates). The Argentine tax authorities conducted a review of income and other taxes paid by large exporters and processors of cereals and other agricultural commodities resulting in allegations of income tax evasion. The Company strongly believes it has complied with all Argentine tax laws. Currently the Company is under audit for fiscal years 2016 to 2017. While the statute of limitations has expired for tax years 2012 and 2013, the Company cannot rule out receiving additional assessments challenging transfer prices used to price grain exports for years subsequent to 2015. The Company believes it has appropriately evaluated the transactions underlying these assessments, and has concluded, based on Argentine tax law, that its tax position is more likely than not to be sustained based upon its technical merits, and accordingly, has not recorded a tax liability for these assessments. The Company intends to vigorously defend its position against any assessments.

In 2014, the Company’s wholly-owned subsidiary in the Netherlands, ADM Europe B.V., received a tax assessment from the Netherlands tax authority challenging the transfer pricing aspects of a 2009 business reorganization, which involved two of its subsidiary companies in the Netherlands. As of ~~June 30, 2023,~~March 31, 2024, this assessment was $88 million in tax and ~~$33~~$34 million in interest (adjusted for variation in currency exchange rates). On April 23, 2020, the court issued an unfavorable ruling and in October 2020, assigned a third party expert to establish a valuation. During the second quarter of 2021, the third party expert issued a final valuation. On September 30, 2022, the court issued a ruling consistent with the valuation report, and the Dutch tax authorities have filed an appeal. During the quarter ended March 31, 2023, ADM filed a ~~cross-appeal.~~cross-appeal and is currently awaiting the court’s ruling. As of ~~June 30, 2023,~~March 31, 2024, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation.

2924

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note ~~10.~~ 11. Shareholders’ Equity

Accelerated Share Repurchase

On March 12, 2024, the Company entered into an accelerated share repurchase (“ASR”) transaction agreement (“ASR Agreement”) with Merrill Lynch International, an affiliate of BofA Securities, Inc., to repurchase $1.0 billion (the “Prepayment Amount”) of ADM common stock (“Common Stock”). The ASR transaction is part of ADM’s existing share repurchase program to repurchase up to 200 million shares through December 31, 2024.

Under the terms of the ASR Agreement, on March 13, 2024, the Company paid the Prepayment Amount and received no upfront shares of Common Stock. The total number of shares of Common Stock to be repurchased under the ASR Agreement will be based on volume weighted-average prices of the Common Stock during the term of the ASR transaction less a discount and subject to certain adjustments pursuant to the terms of the ASR Agreement. ADM will receive share deliveries at the end of each month commencing in March 2024, and upon final settlement of the ASR transaction, which is expected to occur no later than the end of the second quarter of 2024.

On March 28, 2024, the Company received an interim delivery of 8,880,986 shares at an average share price of $60.596 or $538 million. The Prepayment Amount initially recorded in additional paid in capital was partially reclassified to reinvested earnings for the $538 million amount repurchased.

As of March 31, 2024, the Company had 38.5 million remaining shares under its share repurchase program.

Accumulated Other Comprehensive Income

The following tables set forth the changes in AOCI by component for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 and the reclassifications out of AOCI for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 and ~~2022:~~2023:


	Three months ended March 31, 2024															Three months ended March 31, 2024
												Foreign Currency Translation Adjustment	Deferred Gain (Loss) on Hedging Activities	Pension Liability Adjustment	Unrealized Gain (Loss) on Investments		Total
		Three months ended June 30, 2023										(In millions)
		Foreign Currency Translation Adjustment		Deferred Gain (Loss) on Hedging Activities		Pension Liability Adjustment		Unrealized Gain (Loss) on Investments		Total
		(In millions)
Balance at March 31, 2023		$	(2,452)	$	60	$	(61)	$	(10)	$	(2,463)
Balance at December 31, 2023
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	88		(78)		(2)		4		12
Gain (loss) on net investment hedges	Gain (loss) on net investment hedges	(52)		—		—		—		(52)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	—		41		(4)		—		37
Tax effect	Tax effect	14		16		4		(1)		33
Net of tax amount	Net of tax amount	50		(21)		(2)		3		30
Balance at June 30, 2023		$	(2,402)	$	39	$	(63)	$	(7)	$	(2,433)
Balance at March 31, 2024

		Six months ended June 30, 2023
		Foreign Currency Translation Adjustment		Deferred Gain (Loss) on Hedging Activities		Pension Liability Adjustment		Unrealized Gain (Loss) on Investments		Total
		(In millions)
Balance at December 31, 2022		$	(2,622)	$	148	$	(22)	$	(13)	$	(2,509)
Other comprehensive income (loss) before reclassifications		322		(286)		3		8		47
Gain (loss) on net investment hedges		(130)		—		—		—		(130)
Amounts reclassified from AOCI		—		145		(35)		—		110
Tax effect		28		32		(9)		(2)		49
Net of tax amount		220		(109)		(41)		6		76
Balance at June 30, 2023		$	(2,402)	$	39	$	(63)	$	(7)	$	(2,433)

3025

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note ~~10. Accumulated Other Comprehensive Income~~11. Shareholders’ Equity (Continued)


		Amount reclassified from AOCI
		Three months ended June 30,				Six months ended June 30,				Affected line item in the consolidated statements of earnings
		Amount reclassified from AOCI
		Amount reclassified from AOCI
		Amount reclassified from AOCI
		Three months ended March 31,
		Three months ended March 31,
		Three months ended March 31,																Affected line item in the consolidated statements of earnings
Details about AOCI components	Details about AOCI components	2023		2022		2023		2022			Affected line item in the consolidated statements of earnings
		(In millions)
		(In millions)
		(In millions)
		(In millions)

Deferred loss (gain) on hedging activities	Deferred loss (gain) on hedging activities

		$	41	$	(150)	145		(248)		Cost of products sold

		41		(150)		145		(248)		Total before tax
		(8)		33		(26)		52		Tax
		$	33	$	(117)	$	119	$	(196)	Net of tax

Pension liability adjustment
Amortization of defined benefit pension items:
Prior service loss (credit)		$	(6)	$	(112)	$	(17)	$	(104)	Other (income) expense-net
Actuarial losses		2		104		(18)		127		Other (income) expense-net
Deferred loss (gain) on hedging activities
		(4)		(8)		(35)		23		Total before tax
		3		(2)		(9)		(8)		Tax
		$	(1)	$	(10)	$	(44)	$	15	Net of tax

Deferred loss (gain) on hedging activities

		(19)

		(19)

		(19)												104					Cost of products sold

		(19)

		(19)

		(19)												104					Total before tax
	4														4		(18)				Tax
	$													$	(15)	$	86			Net of tax

Pension liability adjustment
Pension liability adjustment
Pension liability adjustment
Amortization of defined benefit pension items:
Amortization of defined benefit pension items:
Amortization of defined benefit pension items:
Prior service loss (credit)
Prior service loss (credit)
Prior service loss (credit)												$	(5)	$	(11)				Other (income) expense-net
Actuarial losses											Actuarial losses	3		(20)					Other (income) expense-net
	(2)														(2)		(31)				Total before tax
	1														1		(12)				Tax
	$													$	(1)	$	(43)			Net of tax

The Company’s accounting policy is to release the income tax effects from AOCI when the individual units of account are sold, terminated, or extinguished.

Note ~~11.~~12. Other (Income) Expense -– Net

The following table sets forth the items in other (income) expense:

Three Months Ended Six Months Ended
June 30, June 30,
2023 2022 2023 2022
(In millions)
Gains on sales of assets $ (21) $ (5) $ (32) $ (5)
Other – net (16) (78) (49) (111)
Other (Income) Expense - Net $ (37) $ (83) $ (81) $ (116)


	Three Months Ended
	March 31,
	2024		2023
	(In millions)
Gains on sale of assets	$	(2)	$	(11)



Other – net	(24)		(33)
Other (Income) Expense – Net	$	(26)	$	(44)

Gains on ~~sales~~sale of assets in the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ consisted of gains on sales of certain assets and disposals of individually insignificant assets in the ordinary course of business.

Other -– net in the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 included the non-service components of net pension benefit income of $5 million, ~~and $9 million, respectively,~~ net foreign exchange gains, and net other income. Other -– net in the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 included the non-service components of net pension benefit income of $6$4 million, ~~and $12 million, respectively, a $50 million payment from the USDA Biofuel Producer Recovery Program,~~ net foreign exchange gains, and net other ~~expense.~~income.

~~Archer-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

Note ~~12.~~13. Segment Information

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 13. Segment Information (Continued)

Intersegment sales have been recorded ~~at amounts approximating market.~~using principles consistent with ASC 606, Revenue from Contracts with Customers. Operating profit for each segment is based on net sales less identifiable operating expenses. Also included in operating profit for each segment is equity in earnings of affiliates based on the equity method of accounting. Specified items included in total segment operating profit and certain corporate items are not allocated to the Company’s individual business segments because operating performance of each business segment is evaluated by management exclusive of these items. Corporate results principally include unallocated corporate expenses, interest cost net of interest income, and revaluation gains and losses on cost method investments and the share of the results of equity investments in early-stage start-up ~~companies~~companies.

Correction of Certain Segment-Specific Historical Financial Information

As previously disclosed, the Company received a voluntary document request from the Securities and Exchange Commission (“SEC”) relating to intersegment sales between the Company’s Nutrition segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions segments. In response, the Company engaged external counsel, assisted by a forensic accounting firm, to conduct an internal investigation, overseen by the Audit Committee of the Company’s Board of Directors, which is separately advised by external counsel (the “Investigation”).

The Company has historically disclosed in the footnotes to its financial statements that ~~ADM Ventures has investments in.~~intersegment sales have been recorded at amounts approximating market. In connection with the Investigation, the Company identified certain intersegment sales for the years ended December 31, 2021 through 2023 that occurred between the Company’s Nutrition segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions segments that were not recorded at amounts approximating market. The Company corrected these immaterial errors in its Annual Report on Form 10-K for the year ended December 31, 2023 for the years presented therein. The correction of these immaterial errors for the quarter ended March 31, 2023 is set forth below.

The correction of these immaterial errors does not have any impact on the Company’s previously reported Consolidated Statement of Earnings, Consolidated Statement of Comprehensive Income (Loss), Consolidated Balance Sheet, Consolidated Statement of Cash Flows, or Consolidated Statement of Shareholders’ Equity as of and for the period presented below.

The following tables present: (i) adjustments and revised gross revenues, intersegment revenues, and operating profit amounts for the Ag Services and Oilseeds segment; (ii) adjustments and revised gross revenues, intersegment revenues and operating profit amounts for the Carbohydrate Solutions segment; and (iii) adjustments and revised operating profit amounts for the Nutrition segment, in each case, for the three months ended March 31, 2023. No adjustments were required to the gross revenues of the Nutrition segment.

Impact of the Adjustments on Ag Services and Oilseeds Segment Gross Revenues and Operating Profit


(In millions)	Three Months Ended March 31, 2023
Gross revenues, as originally reported	$	19,914
Adjustments	1
Gross revenues, as revised	$	19,915

Intersegment revenues, as originally reported	$	1,335
Adjustments	1
Intersegment revenues, as revised	$	1,336

Segment operating profit, as originally reported	$	1,210
Adjustments	1
Segment operating profit, as revised	$	1,211

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 13. Segment Information (Continued)

Impact of the Adjustments on Carbohydrate Solutions Segment Gross Revenues and Operating Profit


(In millions)	Three Months Ended March 31, 2023
Gross revenues, as originally reported	$	4,266
Adjustments	6
Gross revenues, as revised	$	4,272

Intersegment revenues, as originally reported	$	729
Adjustments	6
Intersegment revenues, as revised	$	735

Segment operating profit, as originally reported	$	273
Adjustments	6
Segment operating profit, as revised	$	279

Impact of the Adjustments on Nutrition Segment Operating Profit


(In millions)	Three Months Ended March 31, 2023
Segment operating profit, as originally reported	$	145
Adjustments	(7)
Segment operating profit, as revised	$	138

Separately, the Company determined that a portion of the originally reported gross revenues and intersegment revenues of each of the Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition segments included certain intrasegment revenues (resulting from sales within the segment), and should have included exclusively intersegment revenues (resulting from sales from one segment to the other).

The correction of these immaterial errors does not have any impact on the Company’s previously reported Consolidated Statement of Earnings, Consolidated Statement of Comprehensive Income (Loss), Consolidated Balance Sheet, Consolidated Statements of Cash Flow, or Consolidated Statement of Shareholders’ Equity as of and for the period presented below.

The following tables present: (i) additional adjustments and further revised gross revenues and intersegment revenues amounts for the Ag Services and Oilseeds segment; (ii) additional adjustments and further revised gross revenues and intersegment revenues amounts for the Carbohydrate Solutions segment; and (iii) adjustments and revised gross revenues and intersegment revenues amounts for the Nutrition segment, for the three months ended March 31, 2023.

Additional Impact of the Adjustments on Ag Services and Oilseeds Segment Gross Revenues and Intersegment Revenues


(In millions)	Three Months Ended March 31, 2023
Gross revenues, as revised	$	19,915
Additional adjustments	(595)
Gross revenues, as further revised	$	19,320

Intersegment revenues, as revised	$	1,336
Additional adjustments	(595)
Intersegment revenues, as further revised	$	741

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 13. Segment Information (Continued)

Additional Impact of the Adjustments on Carbohydrate Solutions Segment Gross Revenues and Intersegment Revenues


(In millions)	Three Months Ended March 31, 2023
Gross revenues, as revised	$	4,272
Additional adjustments	(230)
Gross revenues, as further revised	$	4,042

Intersegment revenues, as revised	$	735
Additional adjustments	(230)
Intersegment revenues, as further revised	$	505

Impact of the Adjustments on Nutrition Segment Gross Revenues and Intersegment Revenues


(In millions)	Three Months Ended March 31, 2023
Gross revenues, as originally reported	$	1,944
Adjustments	(55)
Gross revenues, as revised	$	1,889

Intersegment revenues, as originally reported	$	91
Adjustments	(55)
Intersegment revenues, as revised	$	36

For more information about the Company’s business segments, refer to Note 17 of “Notes to Consolidated Financial Statements” included in Item 8, “Financial Statements and Supplementary Data” included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~

2023.

3229

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note ~~12.~~13. Segment Information (Continued)


		Three Months Ended				Six Months Ended
		June 30,				June 30,
Segment Information
Segment Information
Segment Information
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
(In millions)	(In millions)	2023		2022		2023		2022
(In millions)
(In millions)
Gross revenues
Gross revenues
Gross revenues	Gross revenues

Ag Services and Oilseeds	Ag Services and Oilseeds	$	20,864	$	22,468	$	40,778	$	41,600

Ag Services and Oilseeds

Ag Services and Oilseeds
Carbohydrate Solutions
Carbohydrate Solutions
Carbohydrate Solutions	Carbohydrate Solutions	3,829		4,500		8,095		8,680
Nutrition	Nutrition	1,926		2,055		3,870		4,021
Nutrition
Nutrition
Other Business
Other Business
Other Business	Other Business	112		101		215		208
Intersegment elimination	Intersegment elimination	(1,541)		(1,840)		(3,696)		(3,575)
Intersegment elimination
Intersegment elimination
Total gross revenues	Total gross revenues	$	25,190	$	27,284	$	49,262	$	50,934
Total gross revenues
Total gross revenues

Intersegment sales

Intersegment sales

Intersegment sales	Intersegment sales

Ag Services and Oilseeds	Ag Services and Oilseeds	$	1,020	$	1,039	$	2,355	$	1,918

Ag Services and Oilseeds

Ag Services and Oilseeds
Carbohydrate Solutions	Carbohydrate Solutions	448		749		1,177		1,563
Carbohydrate Solutions
Carbohydrate Solutions
Nutrition
Nutrition
Nutrition	Nutrition	73		52		164		94

Total intersegment sales	Total intersegment sales	$	1,541	$	1,840	$	3,696	$	3,575

Total intersegment sales

Total intersegment sales

Revenues from external customers

Revenues from external customers

Revenues from external customers	Revenues from external customers

Ag Services and Oilseeds	Ag Services and Oilseeds

Ag Services and Oilseeds

Ag Services and Oilseeds
Ag Services
Ag Services
Ag Services	Ag Services	$	13,366	$	14,333	$	25,061	$	26,180
Crushing	Crushing	3,480		3,362		7,163		6,584
Crushing
Crushing
Refined Products and Other
Refined Products and Other
Refined Products and Other	Refined Products and Other	2,998		3,734		6,199		6,918
Total Ag Services and Oilseeds	Total Ag Services and Oilseeds	19,844		21,429		38,423		39,682
Total Ag Services and Oilseeds
Total Ag Services and Oilseeds
Carbohydrate Solutions
Carbohydrate Solutions
Carbohydrate Solutions	Carbohydrate Solutions
Starches and Sweeteners	Starches and Sweeteners	2,475		2,519		5,212		5,017
Starches and Sweeteners
Starches and Sweeteners
Vantage Corn Processors
Vantage Corn Processors
Vantage Corn Processors	Vantage Corn Processors	906		1,232		1,706		2,100
Total Carbohydrate Solutions	Total Carbohydrate Solutions	3,381		3,751		6,918		7,117
Total Carbohydrate Solutions
Total Carbohydrate Solutions
Nutrition
Nutrition
Nutrition	Nutrition
Human Nutrition	Human Nutrition	966		1,020		1,902		1,978
Human Nutrition
Human Nutrition
Animal Nutrition	Animal Nutrition	887		983		1,804		1,949
Animal Nutrition
Animal Nutrition
Total Nutrition
Total Nutrition
Total Nutrition	Total Nutrition	1,853		2,003		3,706		3,927

Other Business	Other Business	112		101		215		208

Other Business

Other Business

Total revenues from external customers

Total revenues from external customers

Total revenues from external customers	Total revenues from external customers	$	25,190	$	27,284	$	49,262	$	50,934

Segment operating profit

Segment operating profit

Segment operating profit

Ag Services and Oilseeds

Ag Services and Oilseeds

Ag Services and Oilseeds
Carbohydrate Solutions
Carbohydrate Solutions
Carbohydrate Solutions
Nutrition
Nutrition
Nutrition
Other Business
Other Business
Other Business
Specified Items: Gains on sale of assets(1)
Specified Items: Gains on sale of assets(1)
Specified Items: Gains on sale of assets(1)
Impairment and restructuring charges(2)
Impairment and restructuring charges(2)
Impairment and restructuring charges(2)

Total segment operating profit

Total segment operating profit

Total segment operating profit
Corporate
Corporate
Corporate

Earnings before income taxes

Earnings before income taxes

Earnings before income taxes

(1) Prior quarter gains were related to the sale of certain assets.

(2) Current and prior quarter charges were related to the impairment of certain long-lived assets and restructuring.

3330

A
~~rcher-Daniels-Midland~~

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

~~Note 12. Segment Information (Continued)~~

Three Months Ended Six Months Ended
June 30, June 30,
(In millions) 2023 2022 2023 2022
Segment operating profit
Ag Services and Oilseeds $ 1,054 $ 1,119 $ 2,264 $ 2,127
Carbohydrate Solutions 303 473 576 790
Nutrition 185 239 330 428
Other Business 86 18 183 60
Specified Items:
Gains on sales of assets(1)
11 — 12 1
Impairment and restructuring charges and contingency provisions(2)
(114) (9) (121) (27)
Total segment operating profit 1,525 1,840 3,244 3,379
Corporate (393) (321) (715) (589)
Earnings before income taxes $ 1,132 $ 1,519 $ 2,529 $ 2,790

~~(1)~~ ~~Consists of gains related to the sale of certain assets in all periods presented.~~

~~(2)~~ Current quarter and year-to-date charges were related to the impairment of certain long-lived assets and intangibles, restructuring, and a contingent loss provision related to import duties. Prior-year quarter and year-to-date charges were related to the impairment of certain Ukraine assets. Prior year-to-date charges was partially offset by an insurance settlement.

Note ~~13.~~14. Asset Impairment, Exit, and Restructuring Costs

Asset impairment, exit, and restructuring costs in the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 consisted ~~of $43 million and $46 million~~ of impairments related to certain long-lived assets ~~and intangibles, respectively, and $17~~of $3 million and ~~$21 million of~~ restructuring charges ~~respectively.~~of $3 million, presented as specified items within segment operating profit, and restructuring charges in Corporate of $12 million.

Asset impairment, exit, and restructuring costs in the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 consisted of ~~immaterial charges.~~$3 million of impairments related to certain long-lived assets and $4 million of restructuring charges, presented as specified items within segment operating profit.

Note ~~14.~~15. Sale of Accounts Receivable

The Company has an accounts receivable securitization program (the “First Program”) with certain commercial paper conduit purchasers and committed purchasers (collectively, the “First Purchasers”). Under the First Program, certain U.S.-originated trade accounts receivable are sold to a wholly-owned bankruptcy-remote entity, ADM Receivables, LLC (“ADM Receivables”). ADM Receivables transfers certain of the purchased accounts receivable to each of the First Purchasers together with a security interest in all of its right, title, and interest in the remaining purchased accounts receivable. In exchange, ADM Receivables receives a cash payment of up to $1.9 billion ~~as amended,~~ for the accounts receivable transferred. The First Program terminates on May 17, 2024, unless extended.

The Company also has an accounts receivable securitization program (the “Second Program”) with certain commercial paper conduit purchasers and committed purchasers (collectively, the “Second Purchasers”). Under the Second Program, certain non-U.S.-originated trade accounts receivable are sold to a wholly-owned bankruptcy-remote entity, ADM Ireland Receivables Company (ADM Ireland Receivables). ADM Ireland Receivables transfers certain of the purchased accounts receivable to each of the Second Purchasers together with a security interest in all of its right, title, and interest in the remaining purchased accounts receivable. In exchange, ADM Ireland Receivables receives a cash payment of up to $1.1 billion (€1.0 billion) for the accounts receivables transferred. The Second Program terminates on ~~February 20, 2024,~~April 18, 2025, unless extended.

A~~rcher-Daniels-Midland Company~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~(Unaudited)~~

~~Note 14. Sale of Accounts Receivable (Continued)~~

Under the First and Second Programs (collectively, the “Programs”), ADM Receivables and ADM Ireland Receivables use the cash proceeds from the transfer of receivables to the First Purchasers and Second Purchasers (collectively, the “Purchasers”) and other consideration, as applicable, to finance the purchase of receivables from the Company and the ADM subsidiaries originating the receivables. The Company accounts for these transfers as sales. The Company acts as a servicer for the transferred receivables. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company did not record a servicing asset or liability related to its retained responsibility, based on its assessment of the servicing fee, market values for similar transactions, and its cost of servicing the receivables sold.

As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the fair value of trade receivables transferred to the Purchasers under the Programs and derecognized from the Company’s consolidated balance sheets was ~~$2.1~~$2.3 billion and ~~$2.6~~$1.6 billion, respectively. Total receivables sold were ~~$28.8~~$12.3 billion and ~~$29.3~~$15.1 billion for the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. Cash collections from customers on receivables sold were ~~$28.4~~$11.8 billion and ~~$28.2~~$14.8 billion for the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. As of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, receivables pledged as collateral to the Purchasers was ~~$0.8~~$0.7 billion and ~~$0.6~~$1.1 billion, respectively.

Transfers of receivables under the Programs resulted in an expense for the loss on sale of ~~$11~~$27 million and ~~$34~~$23 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~respectively, and $3 million and $8 million for the three and six months ended June 30, 2022,~~ respectively, which is classified as selling, general, and administrative expenses in the consolidated statements of earnings.

All cash flows under the Programs are classified as operating activities because the cash received from the Purchasers upon both the sale and collection of the receivables is not subject to significant interest rate risk given the short-term nature of the Company’s trade receivables.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 16. Supplier Finance Programs

ADM has Supplier Payable Programs (“SPP”) with financial institutions which act as its paying agents for payables due to certain of its suppliers. The Company has neither an economic interest in a supplier’s participation in the SPP nor a direct financial relationship with the financial institutions, and has concluded that its obligations to the suppliers, including amounts due and scheduled payment terms, are not impacted by their participation in the SPP. Accordingly, amounts associated with the SPP continue to be classified in trade payables in the Company’s consolidated balance sheet and in operating activities in its consolidated statement of cash flows. The supplier invoices that have been confirmed as valid under the program require payment in full generally within 90 days of the invoice date. As of March 31, 2024 and December 31, 2023, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $275 million and $274 million, respectively.

Changes to the outstanding payment obligations are as follows:


	March 31, 2024
	(In millions)
Beginning, January 1, 2024	$	274
Obligations confirmed	257
Obligations paid	(256)
Ending, March 31, 2024	$	275

Note 17. Legal Proceedings

The Company is routinely involved in a number of actual or threatened legal actions, including those involving alleged personal injuries, employment law, product liability, intellectual property, environmental issues, alleged tax liability (see Note 10 for information on income tax matters), and class actions. The Company also routinely receives inquiries from regulators and other government authorities relating to various aspects of its business, and at any given time, the Company has matters at various stages of resolution. The outcomes of these matters are not within Company’s complete control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief including injunctive relief, that could require significant expenditures or result in lost revenues. In accordance with applicable accounting standards, the Company records a liability in its consolidated financial statements for material loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss contingency is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, disgorgement, or punitive damages; or could result in a change in business practice.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 17. Legal Proceedings (Continued)

Commodities Class Actions

On September 4, 2019, AOT Holding AG (“AOT”) filed a putative class action under the U.S. Commodities Exchange Act in federal district court in Urbana, Illinois, alleging that the Company sought to manipulate the benchmark price used to price and settle ethanol derivatives traded on futures exchanges. On March 16, 2021, AOT filed an amended complaint adding a second named plaintiff Maize Capital Group, LLC (“Maize”). AOT and Maize allege that members of the putative class collectively suffered damages calculated to be between approximately $500 million to over $2.0 billion as a result of the Company’s alleged actions. On July 14, 2020, Green Plains Inc. and its related entities (“GP”) filed a putative class action lawsuit, alleging substantially the same operative facts, in federal court in Nebraska, seeking to represent sellers of ethanol. On July 23, 2020, Midwest Renewable Energy, LLC (“MRE”) filed a putative class action in federal court in Illinois alleging substantially the same operative facts and asserting claims under the Sherman Act. On November 11, 2020, United Wisconsin Grain Producers LLC (“UWGP”) and five other ethanol producers filed a lawsuit in federal court in Illinois alleging substantially the same facts and asserting claims under the Sherman Act and Illinois, Iowa, and Wisconsin law. The court granted ADM’s motion to dismiss the MRE and UWGP complaints without prejudice on August 9, 2021 and September 28, 2021, respectively. On August 16, 2021, the court granted ADM’s motion to dismiss the GP complaint, dismissing one claim with prejudice and declining jurisdiction over the remaining state law claim. MRE filed an amended complaint on August 30, 2021, which ADM moved to dismiss on September 27, 2021. The court denied ADM’s motion to dismiss on September 26, 2023. UWGP filed an amended complaint on October 19, 2021, which the court dismissed on July 12, 2022. UWGP has appealed the dismissal to the United States Court of Appeals for the Seventh Circuit. On October 26, 2021, GP filed a new complaint in Nebraska federal district court, alleging substantially the same facts and asserting a claim for tortious interference with contractual relations. On March 18, 2022, the Nebraska federal district court granted ADM’s motion to transfer the GP case back to the Central District of Illinois for further proceedings. ADM moved to dismiss the complaint on May 20, 2022 and on December 30, 2022, the court dismissed GP’s complaint with prejudice. GP appealed the dismissal. On January 12, 2024, the appellate court vacated the dismissal and remanded the case to the district court for further proceedings. On March 8, 2024, GP filed an amended complaint. The Company denies liability, and is vigorously defending itself in these actions. As these actions are in pretrial proceedings, the Company is unable at this time to predict the final outcome with any reasonable degree of certainty, but believes the outcome will not have a material adverse effect on its financial condition, results of operations, or cash flows.

Intersegment Sales Investigations

On June 30, 2023, the Company received a voluntary document request from the SEC relating to intersegment sales between the Company’s Nutrition reporting segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions reporting segments, and subsequently received an additional document request from the SEC. The Company is cooperating with the SEC. Following the Company’s January 21, 2024 announcement of the Investigation, the Company received document requests from the Department of Justice (“DOJ”) focused primarily on the same subject matter, and the DOJ directed grand jury subpoenas to certain current and former Company employees. The Company is cooperating with the DOJ. The Company is unable to predict the final outcome of these investigations with any reasonable degree of certainty.

Securities Litigation

On January 24, 2024, following the Company’s January 21, 2024 announcement of the investigation relating to intersegment sales, a purported stockholder of the Company filed a putative class action in the U.S. District Court for the Northern District of Illinois against the Company and its Chief Executive Officer, as well as Vikram Luthar and Ray Young. The plaintiff alleges false and misleading statements in the Company’s disclosures and seeks unspecified compensatory and punitive damages. On March 29, 2024 and April 12, 2024, purported stockholders of the Company filed derivative lawsuits in the U.S. District Court for the Northern District of Illinois against the Chief Executive Officer, Vikram Luthar, Ray Young, and certain individual ADM Directors, alleging false and misleading statements in the Company’s proxy statements, breach of fiduciary duty, and corporate waste, among other claims, and seeking unspecified damages. On April 23, 2024, a purported stockholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Delaware against the Chief Executive Officer, Vikram Luthar, Ray Young, and certain individual ADM Directors, asserting claims for breach of fiduciary duty and contribution and indemnification under the Securities Exchange Act and seeking unspecified damages. The Company is unable to predict the final outcome of these proceedings with any reasonable degree of certainty.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 18. Subsequent Event

On April 15, 2024, the Company received a final delivery of 7,325,733 shares at an average share price of $63.065 or $462 million as final settlement of the ASR transaction (see Note 11 for more information).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Company Overview

This MD&A should be read in conjunction with the accompanying unaudited consolidated financial statements.

ADM is an ~~indispensable~~essential global agricultural supply chain manager and processor; a premier human and animal nutrition provider; a trailblazer in groundbreaking solutions to support healthier living; an industry-leading innovator in replacing petroleum-based products; and a ~~company concerned about~~leader in sustainability. The Company is one of the world’s leading producers of ingredients for sustainable nutrition. The Company uses its significant global asset base to originate and transport agricultural commodities, connecting to markets in over 190 countries. The Company also processes corn, oilseeds, and wheat into products for food, animal feed, industrial, and energy uses. The Company also engages in the manufacturing, sale, and distribution of a wide array of ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, and other specialty food and feed ingredients. The Company uses its global asset network, business acumen, and its relationships with suppliers and customers to efficiently connect the harvest to the home thereby generating returns for its shareholders, principally from margins earned on these activities.

The Company’s operations are organized, managed, and classified into three reportable business segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable business segments, as defined by the applicable accounting standard, and are classified as Other Business. Financial information with respect to the Company’s reportable business segments is set forth in Note 1213 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements”.

ADM’s recent significant portfolio actions and announcements include:

•the ~~opening~~acquisitions in ~~February 2023~~January 2024 of Revela Foods, a ~~new production facility in Valencia, Spain to help meet rising global demand for probiotics, postbiotics,~~Wisconsin-based developer and ~~other products that support health~~manufacturer of innovative dairy flavor ingredients and ~~well-being;~~

•~~the announcement in March 2023~~solutions and FDL, a UK-based leading developer and producer of the signing of a joint venture agreement with Marel, a leading provider of advanced food processing solutions, to build an innovation center in the heart of the Netherlands food valley at the Wageningen Campus, subject to regulatory approvals;

•the announcement in May 2023 of a Strategic Development Agreement with Air Protein, a pioneer in air-based nutritional protein that requires no agriculture or farmland, decoupling protein production from traditional supply chain risks, to collaborate on researchpremium flavor and ~~development to further advance new and novel proteins for nutrition;~~

•~~the announcement in May 2023 of an agreement to acquire D.C.A. Finance B.V., a commodity derivative brokerage service provider, subject to required regulatory approvals;~~

•the announcement in June 2023 of the opening of a new Customer Creation and Innovation Center in Manchester, England, serving as a United Kingdom (UK) hub for food innovation and building upon ADM’s strong presence in the UK; and

•the launch in July 2023 of a growth initiative of its re:generations™ regenerative agriculture program that will drive expansion to cover 2 million acres across 18 U.S. states and Canada in 2023, and 4 million acres globally by 2025.functional ingredient systems.

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

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

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

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

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

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

ADM ~~will~~plans to support the three pillars with investments in technology, which include expanding digital capabilities and investing further in research and development. ~~All of these efforts will continue to be strengthened by the Company’s ongoing commitment to its Readiness initiative as described in Part I Item 4 “Controls and Procedures” on page 55.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Environmental and Social Responsibility

The Company’s policy to protect forests, biodiversity, and communities includes provisions that promote conservation of water resources and biodiversity in agricultural landscapes, promote solutions to reduce climate change and greenhouse gas emissions, and support agriculture as a means to advance sustainable development by reducing poverty and increasing food security. Additionally, the policy confirms ADM’s commitment to protect human rights defenders, whistleblowers, complainants, and community spokespersons; ADM’s aspiration to cooperate with all parties necessary to enable access to fair and just remediation; and the Company’s non-compliance protocol for suppliers. In 2022, the Company achieved full traceability of its direct and indirect sourcing throughout its soy supply chains in Brazil, Paraguay, and Argentina. ADM ~~aims~~is committed to ~~eliminate~~eliminating deforestation from all of the Company’s supply chains by 2025. In 2023, after a strategic investigation of the impact of conversion of native habitats in its key supply chains, the Company announced its commitment to eliminate conversion of native habitats in high risk areas in South America for direct suppliers of all commodities by 2025 and indirect suppliers by 2027, with a 2025 cutoff date (a date after which conversion of primary native vegetation renders a given area or production unit non-compliant) for both direct and indirect suppliers.

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

Operating Performance Indicators

The Company is exposed to certain risks inherent to an agricultural-based commodity business. These risks are further described in Part I Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

The Company’s Ag Services and Oilseeds and Carbohydrate Solutions operations are principally agricultural commodity-based businesses where changes in

selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold. Therefore, changes in revenues of these businesses do not necessarily correspond to changes in margins or gross profit. Thus, gross margins per volume or metric ton are more meaningful than gross margins as percentage of revenues.

The ~~Company’s Carbohydrate Solutions operations and~~ Nutrition businesses also utilize agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily correlate to changes in cost of products sold. Therefore, changes in revenues of these businesses may correspond to changes in margins or gross profit. Thus, gross margins rates are more meaningful as a performance indicator in these businesses.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The Company measures its performance using key financial metrics including net earnings, adjusted earnings per share (EPS), gross margins, ~~constant currency revenue and operating profit,~~ segment operating profit, adjusted segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, return on invested capital, economic value added, and operating cash flows before working capital. Some of these metrics are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures. For more information, see “Non-GAAP Financial Measures” on ~~pages 44 to 45 and 51 to 52.~~page 43. 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.”

~~Operations in Ukraine~~Intersegment Sales - Correction of Certain Segment-Specific Historical Information and ~~Russia~~Related Matters

~~ADM employs approximately 640 people~~As further described in ~~Ukraine and operates~~Note 13, Segment Information of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein, the Company conducted an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office. The Company’s footprint in Russia is limited to operations related to the production and transport of essential food commodities and ingredients.

While the Company’s Ukraine and Russian operations have historically represented less than 0.2% of consolidated revenues, the direct and indirect impacts of the ongoing military action could negatively affect ADM’s future operating results. The conflict in Ukraine has created disruptions in global supply chains and has created dislocations of key agricultural commodities. The indirect impact of these dislocations on the Company’s operating results will be a functionInvestigation following receipt of a ~~number of variables including supply and demand responses~~voluntary document request from the rest of the world as well as the length of the conflict and the condition of the agricultural industry and export infrastructure after the conflict ends. The Black Sea Grain Initiative, an agreement that allowed Ukraine to export grain and other food products, expired on July 17, 2023. For more information, refer to Part I, “Item 1A. Risk Factors”SEC. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023, based on the Investigation, the Company corrected certain segment-specific historical financial information for the years presented in the Form 10-K.

Because each sale to be adjusted occurred between the Company’s reporting segments, the adjustments had no impact on the Company’s previously-reported consolidated balance sheets and statements of earnings, comprehensive income (loss), or cash flows. The Company determined the adjustments are not material to the Company’s consolidated financial statements taken as a whole for any period.

As further described in Note 13, Segment Information of ~~June 30, 2023, ADM’s assets~~“Notes to Consolidated Financial Statements” included in ~~Ukraine consisted primarily~~Part I, Item 1 herein, the Company also corrected certain immaterial errors relating to the classification of current assets that were less than 0.4% of the Company’s total current assets and an immaterial amount of non-current assets. Of the total current assets in Ukraine, the majority related to inventories that represented less than 0.3% of ADM’s total inventories.certain intrasegment revenues.

Additional information about such error corrections is set forth in Note 13, Segment Information of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein. Note 13 also includes adjustments to certain corresponding segment-specific historical financial information for the three months ended March 31, 2023 to reflect these immaterial error corrections. The information in this MD&A reflects the corrections to the historical financial information for the three months ended March 31, 2023.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

Market Factors Influencing Operations or Results in the Three Months Ended ~~June 30, 2023~~March 31, 2024

The Company is subject to a variety of market factors which affect the Company's operating results. In Ag Services and Oilseeds, ~~supply has been impacted by~~following two years of very favorable market ~~dislocations such as~~conditions, several headwinds in the ~~Russian-Ukraine war, a record world soybean production, and extreme drought conditions in Argentina. Inflationary pressures and declining natural gas prices impacted~~agriculture cycle led to more normalized results throughout the entire value chain. Ag Services experienced slow South American farmer selling, low demand for North American exports, along with low margins in all regions with the move to a carry market. Crushing ~~was impacted by sustainable biofuel demand~~saw strong run rates, the anticipation of a more normal global supply environment, and ~~protein consumption around the globe.~~new capacity suppressing meal values. In Refined Products and Other, ~~margins were driven by strong oil demand, elevated~~ oil values ~~that~~in North America were ~~supported by biofuels demand driven by favorable blend economics~~under pressure due to ~~historically~~ low ~~distillate levels. Mediocre growth~~carbon intensity feedstocks competing in ~~mandated~~the renewable ~~volume obligations for 2023 to 2025 drove further market volatility.~~diesel market. In Carbohydrate Solutions, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Industry ethanol ~~inventories were restrained as production slowed due to seasonal maintenance at processing plants and strong domestic demand heading into the summer driving season.~~stocks remained elevated. Solid export demand for ethanol ~~supported~~helped minimize the ~~improved balance~~imbalance between supply and demand. In Nutrition, demand was softer in a few food and beverage product categories. Human Nutrition was impacted by inflation which drove lower demand ~~especially~~and impacted volumes in ~~higher priced product categories~~alternative proteins. Demand has started to recover in the food, beverage, and dietary supplement ~~segment and impacted volumes in flavors, flavor systems, emulsifiers, bioactives, and alternative proteins.~~segment. In Animal Nutrition, a soft amino acids ~~margins were pressured due to competition returning to~~ market ~~and production cost inflation. Results were also adversely affected~~driven by ~~weak demand in other product lines due to decreased market for feed, particularly~~price weakness in North America ~~and~~was partially compensated by a slightly improved market in Europe, Middle East, and Africa (EMEA),. The global feed and ~~animal disease impacts~~feed additives market remained challenged on ~~farms,~~the demand side, with weakness in the Chinese beef and ~~some premix~~pork business and additives customers cutting products out of formulation due to increased ingredient, freight, and energy costs. Increased competition in Latin America also contributed to the weak demand in that region.continued subdued global shrimp prices.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Three Months Ended ~~June 30, 2023~~March 31, 2024 Compared to Three Months Ended ~~June 30, 2022~~March 31, 2023

Net earnings attributable to controlling interests decreased ~~$0.3~~$0.4 billion from $1.2 billion to ~~$0.9~~$0.7 billion. Segment operating profit decreased ~~$0.3~~$0.4 billion from ~~$1.8~~$1.7 billion to ~~$1.5~~$1.3 billion and included ~~a net charge of $103 million consisting of~~ asset impairment and restructuring charges ~~of $114 million and a gain on the sale of certain assets of $11~~totaling $6 million. Included in segment operating profit in the prior-year quarter was a net charge of $9$6 million consisting of charges totaling $7 million related to asset impairment ~~charges.~~and restructuring, partially offset by a gain on the sale of certain assets of $1 million. Adjusted segment operating profit (a non-GAAP measure) decreased ~~$0.2~~$0.4 billion to ~~$1.6~~$1.3 billion due primarily to lower results in ~~Crushing, Wilmar,~~Refined Products and Other, Ag Services, ~~Carbohydrate Solutions,~~Crushing, Human Nutrition, and ~~Animal Nutrition,~~Starches and Sweeteners, partially offset by higher results in ~~Refined Products~~Wilmar, Vantage Corn Processors, Other Business, and ~~Other and Other Business.~~Animal Nutrition. Corporate results in the current quarter were a net charge of ~~$393~~$426 million and included ~~a mark-to-market gain~~restructuring charges of ~~$1 million on the conversion option of the exchangeable bonds issued in August 2020.~~$12 million. Corporate results in the prior-year quarter were a net charge of ~~$321~~$322 million and included a mark-to-market gain of ~~$19~~$5 million on the conversion option of the exchangeable bonds issued in August 2020.

Income tax expense decreased ~~$75~~$59 million to ~~$204~~$166 million. The effective tax rate for the quarter ended ~~June 30, 2023~~March 31, 2024 was ~~18.0%~~18.8% compared to ~~18.4%~~16.1% for the quarter ended ~~June 30, 2022.~~March 31, 2023. The ~~decrease~~increase in the rate was primarily due to changes in the geographic mix of forecasted pretax earnings and the impact of discrete tax items.

Analysis of Statements of Earnings

Processed volumes by product for the quarter are as follows (in metric tons):


		Three Months Ended
		June 30,
	Three Months Ended
		March 31,
		March 31,
		March 31,
(In thousands)
(In thousands)
(In thousands)	(In thousands)	2023	2022	Change	2024	2023	Change
Oilseeds	Oilseeds	8,783	8,208	575
Corn	Corn	4,448	4,776	(328)
Total	Total	13,231	12,984	247

The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall increase in oilseeds processed volumes was primarily related to improved crush rates in the current quarter compared to lower crush rates in the prior-year quarter resulting from ~~unplanned downtime~~weather related issues and reduced capacity due to logistics and staffing issues. The overall decrease in corn processed volumes was related to unplanned downtime at a corn germ plant, lower export volumes in North America, and reduced grind in EMEA due to weaker demand.the Russian-Ukraine war.

3938

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Revenues by segment for the quarter are as follows:


	Three Months Ended
		March 31,
		March 31,
		March 31,
		Three Months Ended
		June 30,
		2023		2022		Change		2024		2023	Change
		(In millions)							(In millions)

Ag Services and Oilseeds	Ag Services and Oilseeds

Ag Services and Oilseeds

Ag Services and Oilseeds
Ag Services
Ag Services
Ag Services	Ag Services	$	13,366	$	14,333	$	(967)
Crushing	Crushing	3,480		3,362		118
Refined Products and Other	Refined Products and Other	2,998		3,734		(736)
Total Ag Services and Oilseeds	Total Ag Services and Oilseeds	19,844		21,429		(1,585)

Carbohydrate Solutions	Carbohydrate Solutions
Carbohydrate Solutions
Carbohydrate Solutions
Starches and Sweeteners	Starches and Sweeteners	2,475		2,519		(44)
Vantage Corn Processors	Vantage Corn Processors	906		1,232		(326)
Total Carbohydrate Solutions	Total Carbohydrate Solutions	3,381		3,751		(370)

Nutrition	Nutrition
Nutrition
Nutrition
Human Nutrition
Human Nutrition
Human Nutrition	Human Nutrition	966		1,020		(54)
Animal Nutrition	Animal Nutrition	887		983		(96)
Total Nutrition	Total Nutrition	1,853		2,003		(150)

Other Business	Other Business	112		101		11
Other Business
Other Business

Total	Total	$	25,190	$	27,284	$	(2,094)
Total
Total

Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes. During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from market price changes, which generally result in an insignificant impact to gross profit.

Revenues decreased ~~$2.1~~$2.2 billion to ~~$25.2~~$21.8 billion due to lower sales prices ($~~3.2~~5.0 billion), partially offset by higher sales volumes ($~~1.1~~2.8 billion). Lower sales prices of oils, corn, soybeans, ~~oils, biodiesel,~~ and ~~corn~~meal and lower sales volumes of alcohol, ~~cotton, wheat,~~rapeseed, and ~~corn~~farming materials, were partially offset by higher sales volumes of corn, soybeans, wheat, and ~~farming materials.~~meal. Ag Services and Oilseeds revenues decreased 7% to ~~$19.8~~$17.2 billion due to lower sales prices ($~~3.5~~4.3 billion), partially offset by higher sales volumes ($~~1.9~~3.0 billion). Carbohydrate Solutions revenues decreased ~~10%~~24% to ~~$3.4~~$2.7 billion due to lower sales prices ($0.7 billion) and lower sales volumes ($~~0.5 billion), partially offset by higher sales prices ($0.1~~0.2 billion). Nutrition revenues ~~decreased 7%~~of $1.8 billion was comparable to ~~$1.9 billion due to lower sales volumes ($0.3 billion), partially offset by higher sales prices ($0.2 million).~~the prior-year quarter.

Cost of products sold decreased ~~$1.9~~$1.8 billion to ~~$23.3~~$20.2 billion due principally to lower average commodity ~~costs partially offset by higher manufacturing expenses.~~costs. Manufacturing expenses ~~increased $0.1 billion~~decreased $86 million to $1.8 billion due principally to ~~increases in maintenance expenses,~~lower energy costs, partially offset by higher salaries and benefit costs and commercial service ~~fees, energy costs, and lease expense.~~fees.

Foreign currency translation increased revenues by $64 million and cost of products sold by ~~$11 million and $13 million, respectively.~~$64 million.

Gross profit decreased ~~$0.2~~$0.4 billion or ~~10%,~~20% to ~~$1.9 billion due principally to lower~~$1.7 billion. Lower results in ~~Crushing~~Ag Services and Oilseeds ($~~245~~363 million), ~~Carbohydrate Solutions~~Starches and Sweeteners ($~~104 million), Ag Services ($46~~58 million), and ~~Animal~~Human Nutrition ($3848 million), were partially offset by higher results in ~~Refined Products~~Vantage Corn Processors ($18 million), Animal Nutrition ($17 million), and Other ($~~221~~17 million). These factors are explained in the segment operating profit discussion on page ~~43.~~42.

Selling, general, and administrative expenses increased ~~$27~~$70 million to ~~$841~~$951 million due primarily to higher legal and professional fees, increased amortization of intangibles, and higher salaries and benefit ~~costs and higher professional and financing fees, partially offset by decreased provisions for bad debt.~~costs.

4039

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Asset impairment, exit, and restructuring costs increased ~~$59~~$11 million to ~~$60~~$18 million. Charges in the current quarter consisted of ~~$43~~$3 million of impairments related to certain long-lived assets and ~~intangibles and $17~~$3 million of ~~restructuring.~~restructuring, presented as specified items within segment operating profit, and restructuring of $12 million in Corporate. Charges in the prior-year quarter ~~were not material.~~consisted of $3 million of impairments related to certain long-lived assets and $4 million of restructuring, presented as specified items within segment operating profit.

Equity in earnings of unconsolidated affiliates ~~decreased $41~~increased $38 million to ~~$151~~$212 million due primarily to ~~lower~~higher earnings from the Company’s ~~investments~~investment in ~~Wilmar and Stratas Foods LLC.~~Wilmar.

Interest and investment income ~~increased $110~~decreased $11 million to ~~$142~~$123 million due primarily to a valuation loss related to an investment in alternative protein and precision fermentation, partially offset by higher interest income driven by higher interest rates.

Interest expense increased ~~$107~~$19 million to ~~$180~~$166 million due primarily to increased short-term rates on customer deposit balances in ADM Investor ~~Services and on the Company’s commercial paper borrowing programs and increased interest expense from the new debt issued in the current quarter.~~Services. Interest expense in the ~~current~~prior-year quarter also included a ~~$1 million~~ mark-to-market gain adjustment of $5 million related to the conversion option of the exchangeable bonds issued in August ~~2020, compared to a $19 million mark-to-market gain adjustment in the prior-year quarter.~~2020.

Other income-net decreased ~~$46~~$18 million to ~~$37~~$26 million. Income in the current quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, net foreign exchange gains, and net other income. Income in the prior-year quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, ~~a $50 million payment from USDA Biofuel Producer Recovery Program, and~~ net foreign exchange gains, ~~partially offset by~~and net other ~~expense.~~income.

4140

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Segment operating profit (loss), adjusted segment operating profit (a non-GAAP measure), and earnings before income taxes for the quarter are as follows:


		Three Months Ended
		June 30,
Segment Operating Profit (Loss)		2023		2022		Change
	Three Months Ended
		March 31,
		March 31,
		March 31,
		2024
		2024
		2024						2023		Change
	(In millions)								(In millions)
Earnings before income taxes
Corporate results
Segment Operating Profit
Specified Items:
Gains on sale of assets
Gains on sale of assets
Gains on sale of assets
Impairment and restructuring charges
Adjusted Segment Operating Profit
		(In millions)

Ag Services and Oilseeds	Ag Services and Oilseeds

Ag Services and Oilseeds

Ag Services and Oilseeds
Ag Services
Ag Services
Ag Services	Ag Services	$	380	$	407	$	(27)
Crushing	Crushing	224		468		(244)
Refined Products and Other	Refined Products and Other	362		130		232
Wilmar	Wilmar	88		114		(26)
Total Ag Services and Oilseeds	Total Ag Services and Oilseeds	1,054		1,119		(65)

Carbohydrate Solutions	Carbohydrate Solutions
Carbohydrate Solutions
Carbohydrate Solutions
Starches and Sweeteners	Starches and Sweeteners	285		393		(108)
Vantage Corn Processors	Vantage Corn Processors	18		80		(62)
Total Carbohydrate Solutions	Total Carbohydrate Solutions	303		473		(170)

Nutrition	Nutrition
Nutrition
Nutrition
Human Nutrition
Human Nutrition
Human Nutrition	Human Nutrition	184		183		1
Animal Nutrition	Animal Nutrition	1		56		(55)
Total Nutrition	Total Nutrition	185		239		(54)

Other Business	Other Business	86		18		68
Other Business
Other Business

Specified Items:
Gains on sales of assets and businesses		11		—		11
Asset impairment, restructuring, and settlement charges		(114)		(9)		(105)

Total Specified Items		(103)		(9)		(94)

Total Segment Operating Profit		$	1,525	$	1,840	$	(315)

Adjusted Segment Operating Profit(1)		$	1,628	$	1,849	$	(221)

Segment Operating Profit		$	1,525	$	1,840	$	(315)
Corporate		(393)		(321)		(72)
Earnings Before Income Taxes		$	1,132	$	1,519	$	(387)

~~(1)~~

~~Adjusted segment~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Ag Services and Oilseeds operating profit ~~is segment~~decreased 29%. Ag Services results were lower than the first quarter of 2023 due to the stabilization of trade flows leading to lower global trade and risk management results. Crushing results were lower than the prior-year quarter as increased imports of used cooking oil and the anticipation of large South American supplies negatively impacted North American soy crush margins. Significant positive mark-to-market timing impacts that contributed to the prior-year quarter results also drove lower results in the current quarter. Refined Products and Other results were lower than the prior-year quarter as the increased imports of used cooking oil negatively impacted refining margins in North America. Negative mark-to-market timing impacts affected current quarter results versus positive impacts in the prior-year quarter. Equity earnings from Wilmar were higher versus the first quarter of 2023.

Carbohydrate Solutions operating profit ~~excluding~~decreased 11%. Starches and Sweeteners results were lower year-over-year as strong starches and sweeteners margins were offset by lower domestic ethanol margins due to strong industry production and elevated stocks, as well as moderating margins in the ~~above specified items.~~EMEA region. Vantage Corn Processors results improved year-over-year as strong demand for sustainably certified exports of ethanol supported volumes and margins.

Nutrition operating profit decreased 39%. Human Nutrition results were lower than the first quarter of 2023 as impacts related to unplanned downtime at Decatur East and a normalizing texturants market negatively impacted margins. Animal Nutrition results were higher compared to the same quarter last year as cost optimization efforts and lower input costs bolstered margins.

Other Business operating profit increased $24 million. Captive insurance results were higher due to higher program premiums and lower claims. ADM Investor Services results improved on higher net interest income.

Corporate results for the quarter are as follows:


	Three Months Ended
	March 31,
	2024		2023		Change
	(In millions)

Interest expense-net	$	(110)	$	(103)	$	(7)
Unallocated corporate costs	(304)		(248)		(56)



Gain on debt conversion option	—		5		(5)
Restructuring charges	(12)		—		(12)
Other income	—		24		(24)
Total Corporate	$	(426)	$	(322)	$	(104)

Corporate results were a net charge of $426 million in the current quarter compared to a net charge of $322 million in the prior-year quarter. Interest expense-net increased $7 million due primarily to lower capitalized interest. Unallocated corporate costs increased $56 million due primarily to increases in legal and professional fees, global technology spend, incentive compensation accruals, and financing costs. Gain on debt conversion option in the prior-year quarter was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020. Other income in the current quarter includes foreign exchange gains of $15 million and the non-service components of net pension benefit income of $5 million offset by an investment revaluation loss of $18 million. Other income in the prior-year quarter included the non-service components of net pension benefit income of $4 million and foreign exchange gains of $22 million.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Ag Services and Oilseeds operating profit decreased 6%. Ag Services results were slightly lower than the strong second quarter of 2022. South American origination results were higher year-over-year, as the business delivered record volumes and higher margins on strong export demand, leveraging strategic investments in port capacity to capitalize on the record Brazilian soybean crop. Results for North America origination were slightly lower year-over-year, driven by lower export demand due to strong South America supplies. Execution in destination marketing as well as effective risk management continued to deliver strong Global Trade results, though lower than the prior year’s record quarter. Crushing results were much lower than the record results from the prior-year quarter. Global soy crush margins remained strong, but lower year-over-year in all regions due to softer demand for both meal and oil, and a tight U.S. soybean carryout. This was partially offset by strong softseed margins and higher volumes, supported by a strong Canadian canola crop and utilization of flex capacity in EMEA. Additionally, negative mark-to-market timing effects that are expected to reverse as contracts execute in future periods, affected the results in the current quarter. Refined Products and Other results were significantly higher than the prior-year quarter, achieving a record second quarter. North America results were higher, driven by strong food oil demand and improved biodiesel volumes. In EMEA, strong export demand for biodiesel and domestic food oil demand supported stronger margins. Additionally, positive mark-to-market timing effects that expected to reverse as contracts execute in future periods, contributed to the results in the current quarter. Equity earnings from Wilmar were lower versus the second quarter of 2022.

Carbohydrate Solutions operating profit decreased 36%. Starches and Sweeteners, including ethanol production from the wet mills, capitalized on a solid demand environment during the quarter. North America starches and sweeteners delivered volumes and margins similar to the prior year quarter and ethanol margins were solid as industry stocks moderated, though lower relative to the prior-year quarter. Results were negatively impacted due to unplanned downtime at one of the corn germ plants. In EMEA, the business effectively managed margins to deliver improved results. The global wheat milling business posted higher margins, supported by steady customer demand. Vantage Corn Processors results were lower due to lower year-over-year ethanol margins and absence of the prior-year quarter’s $50 million payment from the USDA Biofuel Producer Recovery Program.

Nutrition operating profit decreased 23%. Human Nutrition results were in-line with the second quarter of 2022, as the business effectively managed a challenging demand environment. Flavors results were significantly higher than the prior-year quarter due to improved mix and pricing in EMEA as well as improving demand in North America. Specialty Ingredients results were lower year-over-year due to softer demand for plant-based proteins, particularly in the meat alternatives category in North America and Europe, partially offset by strong performance in texturants. Health and Wellness results were similar versus the prior-year quarter as lower demand for fibers offset lower selling, general, and administrative expenses. Animal Nutrition results were much lower compared to the prior-year quarter due to significantly lower contribution from amino acids, pockets of softer global feed demand affecting volumes, and continued demand fulfillment challenges and inventory losses in pet solutions.

Other Business operating profit increased $68 million. Higher net interest income drove improved earnings in ADM Investor Services. Captive insurance results improved on premiums from new programs partially offset by increased claim settlements.

~~Corporate results for the quarter are as follows:~~

Three Months Ended
June 30,
2023 2022 Change
(In millions)
Interest expense-net $ (125) $ (87) $ (38)
Unallocated corporate costs (262) (267) 5
Expenses related to acquisitions (3) — (3)
Gain on debt conversion option 1 19 (18)
Restructuring (charges) adjustment (3) 1 (4)
Other expense (1) 13 (14)
Total Corporate $ (393) $ (321) $ (72)

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

Corporate results were a net charge of $393 million in the current quarter compared to a net charge of $321 million in the prior-year quarter. Interest expense-net increased $38 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from the new debt issued in the current quarter. Unallocated corporate costs decreased $5 million as lower health insurance costs were partially offset by higher information technology costs. Gain on debt conversion option was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020. Other expense in the current quarter included foreign exchange losses and railroad maintenance expenses, partially offset by the non-service components of net pension benefit income of $5 million. Other income in the prior-year quarter included the non-service components of net pension benefit income of $6 million, an investment revaluation gain of $3 million, and foreign exchange gains, partially offset by railroad maintenance expenses.

Non-GAAP Financial Measures

The Company uses adjusted ~~EPS,~~net earnings, adjusted earnings per share (EPS), adjusted EBITDA, and adjusted segment operating profit, non-GAAP financial measures as defined by the ~~Securities and Exchange Commission,~~SEC, to evaluate the Company’s financial performance. These performance measures are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items. Adjusted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items. Adjusted EBITDA is defined as earnings before interest, ~~on borrowings,~~ taxes, depreciation, and amortization, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of income tax expense, interest expense on borrowings, and depreciation and amortization to ~~earnings before income taxes.~~net earnings. Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items.

Management believes that adjusted net earnings, adjusted EPS, adjusted EBITDA, and adjusted 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 EPS, adjusted EBITDA, and adjusted segment operating profit are not intended to replace or be an alternative to net earnings, diluted EPS, net earnings, ~~before income taxes,~~ and segment operating profit, respectively, the most directly comparable amounts reported under GAAP.

The table below provides a reconciliation of net earnings to adjusted net earnings and diluted EPS to adjusted EPS for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023.


	Three months ended March 31,												Three months ended March 31,
	2024										2024			2023
	In millions									In millions		Per share	In millions		Per share
Average number of shares outstanding - diluted
		Three months ended June 30,
Net earnings and reported EPS (fully diluted)
		2023				2022
		In millions		Per share		In millions		Per share
Average number of shares outstanding - diluted		546				568
Net earnings and reported EPS (fully diluted)

Net earnings and reported EPS (fully diluted)	Net earnings and reported EPS (fully diluted)	$	927	$	1.70	$	1,236	$	2.18
Adjustments:	Adjustments:

Gain on sales of assets and businesses - net of tax of $3 million (1)		(8)		(0.02)		—		—
Gain on debt conversion option - net of tax of $0 (1)		(1)		—		(19)		(0.04)
Impairment and restructuring charges and contingency provisions - net of tax of $24 million in 2023 and $2 million in 2022 (1)		93		0.17		6		0.01
Expenses related to acquisitions - net of tax of $1 million in 2022 (1)		2		—		—		—
Gains on sale of assets - net of tax of $0 million (1)

Gains on sale of assets - net of tax of $0 million (1)

Gains on sale of assets - net of tax of $0 million (1)
Gain on debt conversion option - net of tax of $0 million (1)
Impairment and restructuring charges - net of tax of $0 million in 2024 and $2 million in 2023 (1)

Certain discrete tax adjustments
Certain discrete tax adjustments
Certain discrete tax adjustments	Certain discrete tax adjustments	21		0.04		(1)		—
Total adjustments	Total adjustments	107		0.19		(14)		(0.03)
Adjusted net earnings and adjusted EPS	Adjusted net earnings and adjusted EPS	$	1,034	$	1.89	$	1,222	$	2.15

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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The tables below provide a reconciliation of net earnings ~~before income taxes~~ to adjusted EBITDA and adjusted EBITDA by segment for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023.


	Three months ended
		March 31,
		March 31,
		March 31,
(In millions)
(In millions)
(In millions)								2024	2023	Change
Net earnings
Net earnings (losses) attributable to noncontrolling interests
Income tax expense
Interest expense
Depreciation and amortization
EBITDA
(Gain) loss on sales of assets and businesses

		Three months ended
		June 30,
(In millions)		2023		2022		Change
Earnings before income taxes		$	1,132	$	1,519	$	(387)
Interest expense		124		73		51
Depreciation and amortization		262		257		5
Gains on sales of assets and businesses		(11)		—		(11)
Impairment and restructuring charges

Expenses related to acquisitions		3		—		3
Railroad maintenance expenses		2		9		(7)
Impairment and restructuring charges and contingency provisions		117		8		109

Impairment and restructuring charges

Impairment and restructuring charges
Adjusted EBITDA	Adjusted EBITDA	$	1,629	$	1,866	$	(237)

		Three months ended

		Three months ended

		Three months ended
		March 31,
		March 31,
		March 31,
(In millions)
(In millions)
(In millions)								2024	2023	Change
		Three months ended
		June 30,
(In millions)		2023		2022		Change
Ag Services and Oilseeds

Ag Services and Oilseeds

Ag Services and Oilseeds	Ag Services and Oilseeds	$	1,143	$	1,207	$	(64)
Carbohydrate Solutions	Carbohydrate Solutions	381		550		(169)
Nutrition	Nutrition	253		304		(51)
Other Business	Other Business	84		24		60
Corporate	Corporate	(232)		(219)		(13)
Adjusted EBITDA	Adjusted EBITDA	$	1,629	$	1,866	$	(237)

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Market Factors Influencing Operations or Results in the Six Months Ended June 30, 2023~~

The Company is subject to a variety of market factors which affect the Company's operating results. In Ag Services and Oilseeds, supply has been impacted by market dislocations such as the Russian-Ukraine war, a record world soybean production, and extreme drought conditions in Argentina. Inflationary pressures impacted the entire value chain. Crushing was impacted by sustainable biofuel demand and protein consumption around the globe. In Refined Products and Other, margins were driven by strong oil demand, elevated oil values that were supported by biofuels demand driven by favorable blend economics due to historically low distillate levels. In Carbohydrate Solutions, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio. Industry ethanol inventories were restrained as production slowed due to seasonal maintenance at processing plants and strong domestic demand heading into the summer driving season. Solid export demand for ethanol supported the improved balance between supply and demand. In Nutrition, demand was softer in a few food and beverage product categories. Human Nutrition was impacted by inflation which drove lower demand especially in higher priced product categories in the food, beverage, and dietary supplement segment and impacted volumes in flavors, flavor systems, emulsifiers, bioactives, and alternative proteins. In Animal Nutrition, amino acids margins were pressured due to competition returning to market and production cost inflation. Results were also adversely affected by weak demand in other product lines due to decreased market for feed, particularly in North America and EMEA, and animal disease impacts on farms, and some premix and additives customers cutting products out of formulation due to increased ingredient, freight, and energy costs. Increased competition in Latin America also contributed to the weak demand in that region.

~~Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022~~

Net earnings attributable to controlling interests decreased $0.2 billion to $2.1 billion. Segment operating profit decreased $0.1 billion to $3.2 billion and included a net charge of $109 million consisting of asset impairment and restructuring charges of $121 million and a gain on the sale of certain assets of $12 million. Included in segment operating profit in the prior period was a net charge of $26 million consisting of asset impairment, restructuring, and settlement charges of $27 million and a gain on sale of assets of $1 million. Adjusted segment operating profit (a non-GAAP measure) decreased $52 million to $3.4 billion due primarily to lower results in Crushing, Wilmar, Carbohydrate Solutions, and Nutrition, partially offset by higher results in Refined Products and Other, Ag Services, and Other Business. Corporate results in the current period were a net charge of $0.7 billion and included a mark-to-market gain of $6 million on the conversion option of the exchangeable bonds issued in August 2020. Corporate results in the prior period were a net charge of $0.6 billion and included a mark-to-market gain of $4 million on the conversion option of the exchangeable bonds issued in August 2020.

Income taxes of $429 million decreased $57 million. The Company’s effective tax rate for the six months ended June 30, 2023 was 17.0% compared to 17.4% for the six months ended June 30, 2022. The decrease in the rate was primarily due to the impact of discrete tax items.

~~Analysis of Statements of Earnings~~

~~Processed volumes by product for the six months ended June 30, 2023 and 2022 are as follows (in metric tons):~~

Six Months Ended
June 30,
(In thousands) 2023 2022 Change
Oilseeds 17,410 16,699 711
Corn 8,842 9,588 (746)
Total 26,252 26,287 (35)

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The overall increase in oilseeds processed volumes was primarily related to improved crush rates in the current period compared to lower crush rates in the prior period resulting from unplanned downtime due to logistics and staffing issues. The overall decrease in corn processed volumes was related to unplanned downtime at a corn germ plant, lower export volumes in North America, and reduced grind in EMEA due to weaker demand.

~~Revenues by segment for the six months ended June 30, 2023 and 2022 are as follows:~~

Six Months Ended
June 30,
2023 2022 Change
(In millions)
Ag Services and Oilseeds
Ag Services $ 25,061 $ 26,180 $ (1,119)
Crushing 7,163 6,584 579
Refined Products and Other 6,199 6,918 (719)
Total Ag Services and Oilseeds 38,423 39,682 (1,259)

Carbohydrate Solutions
Starches and Sweeteners 5,212 5,017 195
Vantage Corn Processors 1,706 2,100 (394)
Total Carbohydrate Solutions 6,918 7,117 (199)
Nutrition
Human Nutrition 1,902 1,978 (76)
Animal Nutrition 1,804 1,949 (145)
Total Nutrition 3,706 3,927 (221)
Other Business 215 208 7
Total $ 49,262 $ 50,934 $ (1,672)

Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes. During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from commodity price changes, which generally result in an insignificant impact to gross profit.

Revenues decreased $1.7 billion to $49.3 billion due to lower sales prices ($2.7 billion), partially offset by higher sales volumes ($1.0 billion). Lower sales prices of soybeans, oils, and biodiesel and lower sales volumes of corn, wheat, and alcohol were partially offset by higher sales prices of meal and higher sales volumes of soybeans, and biodiesel. Ag Services and Oilseeds revenues decreased 3% to $38.4 billion due to lower sales prices ($3.1 billion), partially offset by higher sales volumes ($1.8 billion). Carbohydrate Solutions revenues decreased 3% to $6.9 billion due to lower sales volumes ($0.3 billion), partially offset by lower sales prices ($0.1 billion). Nutrition revenues decreased 6% to $3.7 billion due to lower sales volumes ($0.5 billion), partially offset by higher sales prices ($0.3 billion).

Cost of products sold decreased $1.6 billion to $45.3 billion due principally to lower average commodity costs partially offset by higher manufacturing expenses. Manufacturing expenses increased $0.4 billion to $3.8 billion due principally to increases in energy costs, maintenance expenses, salaries and benefit costs, commercial service fees, and lease expense.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Foreign currency translation decreased revenues and cost of products sold by $0.3 billion.~~

Gross profit decreased $34 million or 1% to $4.0 billion due principally to lower results in Crushing ($232 million), Carbohydrate Solutions ($125 million), and Nutrition ($92 million), partially offset by higher results in Refined Products and Other ($330 million) and Ag Services ($89 million). These factors are explained in the segment operating profit discussion on page 50.

Selling, general, and administrative expenses increased $0.1 billion to $1.7 billion due primarily to higher salaries and benefit costs and higher professional and financing fees, partially offset by decreased provisions for bad debt.

Asset impairment, exit, and restructuring costs increased $65 million to $67 million. Charges in the current period consisted of $46 million of impairments related to certain long-lived assets and intangibles and $21 million of restructuring. Charges in the prior period were not material.

~~Equity in earnings of unconsolidated affiliates decreased $71 million to $325 million due primarily to lower earnings from the Company’s investments in Wilmar and Almidones Mexicanos S.A.~~

~~Interest and investment income increased $185 million to $276 million due primarily to higher interest income, partially offset by revaluation gains of $36 million in the prior period.~~

Interest expense increased $162 million to $327 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from new debt issuances. Interest expense in the current period also included a $6 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020 compared to a $4 million mark-to-market gain adjustment in the prior period.

Other income-net decreased $35 million to $81 million. Income in the current period included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, net foreign exchange gains, and net other income. Income in the prior period included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, a $50 million payment from USDA Biofuel Producer Recovery Program, and net foreign exchange gains, partially offset by net other expense.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Segment operating profit, adjusted segment operating profit (a non-GAAP measure), and earnings before income taxes for the six months ended June 30, 2023 and 2022 are as follows:~~

Six Months Ended
June 30,
Segment Operating Profit (Loss) 2023 2022 Change
(In millions)
Ag Services and Oilseeds
Ag Services $ 728 $ 665 $ 63
Crushing 650 896 (246)
Refined Products and Other 689 328 361
Wilmar 197 238 (41)
Total Ag Services and Oilseeds 2,264 2,127 137

Carbohydrate Solutions
Starches and Sweeteners 592 709 (117)
Vantage Corn Processors (16) 81 (97)
Total Carbohydrate Solutions 576 790 (214)
Nutrition
Human Nutrition 322 324 (2)
Animal Nutrition 8 104 (96)
Total Nutrition 330 428 (98)
Other Business 183 60 123
Specified Items:
Gains (losses) on sales of assets and businesses 12 1 11
Asset impairment, restructuring, and settlement charges (121) (27) (94)
Total Specified Items (109) (26) (83)
Total Segment Operating Profit $ 3,244 $ 3,379 $ (135)
Adjusted Segment Operating Profit(1)
$ 3,353 $ 3,405 $ (52)
Segment Operating Profit $ 3,244 $ 3,379 $ (135)
Corporate (715) (589) (126)
Earnings Before Income Taxes $ 2,529 $ 2,790 $ (261)

~~(1)~~ ~~Adjusted segment operating profit is segment operating profit excluding the above specified items.~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

Ag Services and Oilseeds operating profit increased 6%. Ag Services results were higher than the prior period. In South American origination, effective risk management and higher export demand due to the record Brazilian soybean crop drove significantly higher year-over-year results. Results for North America origination were slightly higher, driven by stronger soybean exports. Execution in destination marketing as well as effective risk management continued to deliver strong Global Trade results, though lower than the prior period. Crushing results were lower than the prior period. Global soy crush margins remained strong, but lower year-over-year in all regions due to softer demand for both meal and oil, and a tight U.S. soybean carryout. This was partially offset by strong softseed margins and higher volumes, supported by a strong Canadian canola crop and utilization of flex capacity in EMEA. Additionally, negative mark-to-market timing effects that are expected to reverse as contracts in future periods, affected the results in the current period. Refined Products and Other results were significantly higher than the prior period. North America results were higher, driven by strong food oil demand and improved biodiesel volumes. In EMEA, strong export demand for biodiesel and domestic food oil demand supported stronger margins. Additionally, positive mark-to-market timing effects that expected to reverse as contracts execute in future periods, contributed to the results in the current quarter. Equity earnings from Wilmar were lower versus the prior period.

Carbohydrate Solutions operating profit decreased 27%. Starches and Sweeteners, including ethanol production from the wet mills, capitalized on a solid demand environment during the period. North America starches and sweeteners delivered volumes and margins similar to the prior period and ethanol margins were solid as industry stocks moderated, though lower relative to the prior period. Results were negatively impacted due to unplanned downtime at one of the corn germ plants. In EMEA, the business effectively managed margins to deliver improved results. The global wheat milling business posted higher margins driven by solid customer demand. Vantage Corn Processors results were lower due to lower year-over-year ethanol margins and absence of the prior period’s $50 million payment from the USDA Biofuel Producer Recovery Program.

Nutrition operating profit decreased 23%. Human Nutrition results were in-line with the prior period, as the business continued to manage demand fulfillment challenges and destocking in certain categories. Flavors results were higher than the prior period due to improved mix and pricing in EMEA as well as improving demand in North America. Specialty Ingredients results were lower year-over-year due to softer demand for plant-based proteins, particularly in the meat alternatives category in North America and Europe, partially offset by strong performance in texturants. Health and Wellness results were lower year-over-year due to lower demand for fibers. Animal Nutrition results were significantly lower compared to the prior period due to lower contribution from amino acids, pockets of softer global feed demand affecting volumes, and continued demand fulfillment challenges and inventory losses in pet solutions.

Other Business operating profit increased $123 million. Higher net interest income drove improved earnings in ADM Investor Services. Captive insurance results improved on premiums from new programs partially offset by increased claim settlements.

~~Corporate results for the six months ended June 30, 2023 and 2022 are as follows:~~

Six Months Ended
June 30,
2023 2022 Change
(In millions)
Interest expense-net $ (228) $ (163) (65)
Unallocated corporate costs (510) (476) (34)
Loss on sale of assets — (3) 3
Expenses related to acquisitions (3) (2) (1)
Gain on debt conversion option 6 4 2
Restructuring (charges) adjustment (3) 2 (5)
Other income 23 49 (26)
Total Corporate $ (715) $ (589) $ (126)

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

Corporate results were a net charge of $0.7 billion in the current period compared to a net charge of $0.6 billion in the prior period. Interest expense-net increased $65 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from new debt issuances. Unallocated corporate costs increased $34 million due primarily to higher financing, information technology, and centers of excellence costs, partially offset by lower incentive compensation accruals. Gain on debt conversion option was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020. Other income in the current period included the non-service components of net pension benefit income of $9 million and foreign exchange gains, partially offset by railroad maintenance expenses. Other income in the prior period included the non-service components of net pension benefit income of $12 million, an investment revaluation gain of $36 million, and foreign exchange gains, partially offset by railroad maintenance expenses.

~~Non-GAAP Financial Measures~~

The Company uses adjusted EPS, adjusted EBITDA, and adjusted segment operating profit, non-GAAP financial measures as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance. These performance measures are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Adjusted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items. Adjusted EBITDA is defined as earnings before interest on borrowings, taxes, depreciation, and amortization, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense on borrowings and depreciation and amortization to earnings before income taxes. Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items.

Management believes that adjusted EPS, adjusted EBITDA, and adjusted 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 EPS, adjusted EBITDA, and adjusted segment operating profit are not intended to replace or be an alternative to diluted EPS, earnings before income taxes, and segment operating profit, respectively, the most directly comparable amounts reported under GAAP.

~~The table below provides a reconciliation of diluted EPS to adjusted EPS for the six months ended June 30, 2023 and 2022.~~

Six months ended June 30,
2023 2022
In millions Per share In millions Per share
Average number of shares outstanding - diluted 549 568
Net earnings and reported EPS (fully diluted) $ 2,097 $ 3.82 $ 2,290 $ 4.03
Adjustments:
Gains (losses) on sales of assets and businesses - net of tax of $3 million in 2023 and $0 million in 2022 (1)
(9) (0.02) 2 —
Impairment and restructuring charges and contingency provisions - net of tax of $26 million in 2023 and $5 million in 2022 (1)
98 0.18 20 0.04
Expenses related to acquisitions - net of tax of $1 million in 2023 and 2022 (1)
2 — 1 —
Gain on debt conversion option - net of tax of $0 (1)
(6) (0.01) (4) (0.01)
Certain discrete tax adjustments 3 0.01 (5) (0.01)
Total adjustments 88 0.16 14 0.02
Adjusted net earnings and adjusted EPS $ 2,185 $ 3.98 $ 2,304 $ 4.05

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

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the six months ended June 30, 2023 and 2022.~~

Six months ended
June 30,
(In millions) 2023 2022 Change
Earnings before income taxes $ 2,529 $ 2,790 $ (261)
Interest expense 224 165 59
Depreciation and amortization 521 514 7
(Gains) losses on sales of assets and businesses (12) 2 (14)
Expenses related to acquisitions 3 2 1
Railroad maintenance expenses 2 9 (7)
Impairment and restructuring charges and contingency provisions 124 25 99
Adjusted EBITDA $ 3,391 $ 3,507 $ (116)
Six months ended
June 30,
(In millions) 2023 2022 Change
Ag Services and Oilseeds $ 2,443 $ 2,303 $ 140
Carbohydrate Solutions 733 946 (213)
Nutrition 463 558 (95)
Other Business 181 68 113
Corporate (429) (368) (61)
Adjusted EBITDA $ 3,391 $ 3,507 $ (116)

5244

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources

A Company 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 ADM’s control, to fund its working capital needs and capital expenditures. The primary source of funds to finance ADM’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.

Cash provided by operating activities was ~~$0.9~~$0.7 billion for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to a use of ~~$0.7~~$1.6 billion for the same period last year. Working capital changes decreased cash by ~~$1.6~~$0.2 billion for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to a decrease of ~~$3.9~~$2.9 billion for the same period last year. Segregated investments increased ~~approximately $1.4~~$0.2 billion ~~driven by higher interest rates.~~due to increased trading activity in the Company’s futures commission and brokerage business. Trade receivables decreased ~~$0.8~~$0.1 billion due to lower revenues. Inventories decreased ~~approximately $2.9~~$0.3 billion due to lower inventory ~~volumes, partially offset by higher inventory prices. Other current assets decreased $0.6 billion primarily due to decreases in margin deposits~~prices and ~~grain accounts, customer omnibus receivable, and prepaid expenses.~~volumes. Trade payables decreased ~~$2.8~~$0.7 billion primarily due to lower payables related to grain purchases. Brokerage payables ~~decreased~~increased approximately ~~$1.2~~$0.3 billion due to ~~decreased~~increased trading activity in the Company’s futures commission and brokerage business. ~~Accrued expenses and other payables decreased $0.6 billion primarily due to decreases in contract liability, and compensation accruals.~~

Cash used in investing activities was ~~$0.6~~$1.2 billion for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to ~~$0.6~~$0.3 billion for the same period last year. Capital expenditures for the ~~six~~three months ended ~~June 30, 2023 were $0.6~~March 31, 2024 of $0.3 billion ~~compared~~was comparable to ~~$0.5 billion for~~ the same period last year. ~~There were $5 million additional cost method investments for~~Net assets of businesses acquired in the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 were $0.9 billion compared to ~~$0.1 billion for~~none in the same period last year.

Cash used in financing activities was ~~$2.1 billion~~$2 million for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to cash provided of ~~$1.5~~$0.6 billion for the same period last year. Long-term debt ~~borrowings~~payments were immaterial for the ~~six~~three months ended ~~June 30, 2023 were $0.5 billion which consisted of the $500 million aggregate principle amount of 4.500% Notes due 2033~~March 31, 2024 compared to ~~long-term debt borrowings for the same period last year of $0.8 billion which consisted of the $750~~$2 million aggregate principal amount of 2.900% Notes due 2032. Proceeds from the borrowings in the current period were used for general corporate purposes. Proceeds from the borrowings in the prior period were used to finance investments and expenditures in eligible green projects that contribute to environmental objectives and/or eligible social projects that aim to address or mitigate a specific social issue and/or seek to achieve positive social outcomes. Long-term debt payments were $0.7 billion for the six months ended June 30, 2023 which consisted of the €600 million aggregate principal amount of 1.750% Notes due 2023 compared to an immaterial amount for the same period last year. Net borrowings on short-term credit agreements for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 were ~~$0.4~~$1.6 billion compared to ~~$1.4~~$1.3 billion for the same period last year. Share repurchases for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 were ~~$1.0~~$1.3 billion compared to $0.4 billion for the same period last year. Dividends were $0.3 billion for the three months ended March 31, 2024 compared to $0.2 billion for the same period last year. ~~Dividends for the six months ended June 30, 2023 of $0.5 billion were comparable for the same period last year.~~

At ~~June 30, 2023,~~March 31, 2024, the Company had ~~$1.4~~$0.8 billion of cash and cash equivalents and a current ratio, defined as current assets divided by current liabilities, of ~~1.6~~1.5 to 1. Included in working capital was ~~$6.5~~$6.7 billion of readily marketable commodity inventories. At ~~June 30, 2023,~~March 31, 2024, the Company’s capital resources included shareholders’ equity of ~~$25.0~~$23.2 billion and lines of credit, including the accounts receivable securitization programs described below, totaling ~~$13.6~~$12.8 billion, of which ~~$11.3~~$8.8 billion was unused. The Company’s ratio of long-term debt to total capital (the sum of ~~the Company’s~~ long-term debt of $8.2 billion and shareholders’ ~~equity)~~equity of $23.2 billion in 2024 and the sum of long-term debt of $8.3 billion and shareholders’ equity of $24.1 billion in 2023) was 26% and 25% ~~and 24%~~ at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. The Company uses this ratio as a measure of the Company’s long-term indebtedness and an indicator of financial flexibility. The Company’s ratio of net debt (the sum of short-term debt of $1.7 billion, current maturities of long-term debt of $1 million, and long-term debt of $8.2 billion less the sum of cash and cash equivalents of $0.8 billion and short-term marketable ~~securities)~~securities of none in 2024 and the sum of short-term debt of $0.1 billion, current maturities of long-term debt of $1 million, and long-term debt of $8.3 billion less the sum of cash and cash equivalents of $1.4 billion and short-term marketable securities of none in 2023) to capital (the sum of net debt of $9.2 billion and shareholders’ ~~equity)~~equity of $23.2 billion in 2024 and the sum of net debt of $7.0 billion and shareholders' equity of $24.1 billion in 2023) was 28% and 22% ~~and 25%~~ at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Of the Company’s total lines of credit, $5.0 billion supported the combined U.S. and European commercial paper borrowing programs, against which there was no$0.9 billion of commercial paper outstanding at ~~June 30, 2023.~~March 31, 2024.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

As of ~~June 30, 2023,~~March 31, 2024, the Company had ~~$1.4~~$0.8 billion of cash and cash equivalents, ~~$0.8~~$0.7 billion 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 ~~$6.6~~$5.2 billion, the Company has asserted that these funds are indefinitely reinvested outside the U.S.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

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 $3.0 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 1415 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements” for more information and disclosures on the Programs). As of ~~June 30, 2023,~~March 31, 2024, the Company had ~~$0.9~~$0.7 billion unused capacity of its facility under the Programs.

As of ~~June 30, 2023,~~March 31, 2024, the Company has total available liquidity of ~~$12.7~~$9.6 billion comprised of cash and cash equivalents and unused lines of credit with a well-diversified group of primarily investment-grade institutions.

For the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, the Company spent approximately ~~$0.6~~$0.3 billion in capital expenditures, ~~$0.5~~$0.3 billion in dividends, and ~~$1.0~~$1.3 billion in share repurchases. The Company has a stock repurchase program. On March 12, 2024, the Company entered into an ASR Agreement with Merrill Lynch International, an affiliate of BofA Securities, Inc., to repurchase $1.0 billion of ADM common stock as part of ADM’s existing share repurchase program to repurchase up to 200 million shares through December 31, 2024. On March 28, 2024, the Company received an interim delivery of 8,880,986 shares at an average share price of $60.596 or $538 million. Under the program, the Company ~~has 74.8~~had 38.5 million shares remaining as of ~~June 30, 2023~~March 31, 2024 that may be repurchased until December 31, 2024. On April 15, 2024, the Company received a final delivery of 7,325,733 shares as final settlement of the ASR transaction (see Notes 11 and 18 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements” for more information). As of the final settlement date, the Company had 31.2 million shares remaining that may be repurchased under the program until December 31, 2024.

In ~~2023,~~2024, the Company expects total capital expenditures of approximately $1.3 billion and additional cash outlays of approximately $1.0 billion in dividends and ~~$2.0~~up to $2.3 billion in ~~opportunistic~~ share repurchases, subject to other strategic uses of capital and the evolution of operating cash flows and the working capital position throughout the year.

Contractual Obligations and Commercial Commitments

The Company’s purchase obligations as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 were ~~$14.2~~$12.2 billion and ~~$15.8~~$14.0 billion, respectively. The decrease is primarily related to lower energy commitments and obligations to purchase ~~lower quantities of~~ agricultural commodity ~~inventories.~~inventories at lower prices. As of ~~June 30, 2023,~~March 31, 2024, the Company expects to make payments related to purchase obligations of ~~$13.2~~$11.6 billion within the next twelve months. There were no other material changes in the Company’s contractual obligations during the quarter ended ~~June 30, 2023.~~March 31, 2024.

Off Balance Sheet Arrangements

In May 2023, the Company amended its First Program with certain commercial and conduit purchasers and committed purchasers and increased its facility from $1.8 billion to $1.9 billion. The First Program terminates on May 17, 2024, unless extended. There were no ~~other~~ material changes in the Company’s off balance sheet arrangements during the quarter ended ~~June 30, 2023.~~March 31, 2024.

Critical Accounting Policies and Estimates

There were no material changes in the Company’s critical accounting policies and estimates during the quarter ended ~~June 30, 2023.~~March 31, 2024. For a description of the Company’s critical accounting policies, estimates, and assumptions used in the preparation of the Company’s financial statements, see Part II, Item 7 and Note 1 of “Notes to Consolidated Financial Statements” included in Part II, Item 8, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The market risk inherent in the Company’s market risk sensitive instruments and positions is the potential loss arising from adverse changes in: commodity market prices as they relate to the Company’s net commodity position, foreign currency exchange rates, and interest rates. Significant changes in market risk sensitive instruments and positions for the quarter ended ~~June 30, 2023~~March 31, 2024 are described below. There were no material changes during the period in the Company’s potential loss arising from changes in foreign currency exchange rates and interest rates.

For detailed information regarding the Company’s market risk sensitive instruments and positions, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

5446

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)

Commodities

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

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

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

Six months ended

Year ended

June 30, 2023

December 31, 2022

Three months ended

Year ended

March 31, 2024

December 31, 2023

Long/(Short) (In millions)

Fair Value

Market Risk

Fair Value

Market Risk

Long/(Short) (In millions)

Fair Value

Market Risk

Fair Value

Market Risk

Highest position

498

986

Lowest position

Average position

278

388

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of ~~June 30, 2023,~~March 31, 2024, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and interim Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rules ~~13a–15(e)~~13a-15(e) and ~~15d–15(e)~~15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on that evaluation, the Company’s ~~management, including the~~ Chief Executive Officer and interim Chief Financial Officer, concluded the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicatedas of March 31, 2024, due to the ~~Company’s management, including the Chief Executive Officer and the Chief~~material weakness described below.

Internal Control Over Financial Officer, to allow timely decisions regarding required disclosure. There was no change in the Company’s internal controls over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.Reporting

~~During 2018, the Company launched an initiative called Readiness to drive new efficiencies and improve the customer experience~~As disclosed in the Company’s ~~existing businesses through~~Annual Report on Form 10-K for the year ended December 31, 2023, during the fourth quarter of 2023, in connection with the Investigation, the Company identified a ~~combination~~material weakness in its internal control over financial reporting related to the Company’s accounting practices and procedures for intersegment sales. The material weakness resulted from inadequate controls that allowed for certain intersegment sales to be reported at amounts that were not in accordance with ASC 606, Revenue from Contracts with Customers. Specifically, the Company did not have adequate controls in place around measurement of ~~data analytics,~~certain intersegment sales between the Nutrition reporting segment and the Ag Services and Oilseeds and Carbohydrate Solutions reporting segments. The absence of adequate controls with respect to the reporting of intersegment sales impacted the accuracy of the Company’s segment disclosures and review controls over projected financial information utilized in goodwill and other long-lived asset impairment tests.

ITEM 4. CONTROLS AND PROCEDURES (Continued)

Remediation Plan

The Company is in the process ~~simplification~~of implementing enhancements to its internal controls to remediate the identified material weakness in its internal control over financial reporting related to the Company’s accounting practices and ~~standardization,~~procedures for intersegment sales and ~~behavioral~~to enhance the reliability of its financial statements with respect to the pricing and ~~cultural change, building upon~~reporting of such sales. Specifically, the Company is in the process of: (i) enhancing the Company’s accounting policies with respect to the measurement of intersegment sales; (ii) improving and documenting the Company’s pricing guidelines for intersegment sales; (iii) enhancing the design and documentation of the execution of pricing and measurement controls for segment disclosure purposes and projected financial information used in impairment analyses; and (iv) increasing training for relevant personnel on the measurement of and application of relevant accounting guidance to intersegment sales.

While the Company believes these efforts will improve its ~~earlier 1ADM~~internal control over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the material weakness in internal control over financial reporting until a sustained period of time has passed to allow management to test the design and operational ~~excellence programs. As part~~effectiveness of ~~this transformation,~~ the new and enhanced controls.

Changes in Internal Control Over Financial Reporting

The Company is implementing a new enterprise resource planning (ERP) system on a worldwide basis, which is expected to occur in phases over the next several years. ~~During the quarter ended June 30, 2023, there were no~~The Company did not have any further deployments of the ERP ~~system. The Company continues to consider these~~system during the quarter ended March 31, 2024.

Except for the material weakness described above and the related remediation measures that are being implemented, there have been no changes in ~~its design of and testing for effectiveness of~~ internal ~~controls~~control over financial reporting ~~and concluded, as part of~~during the ~~evaluation described in the above paragraph,~~quarter ended March 31, 2024 that ~~the implementation of the new ERP system in these circumstances has not~~have materially affected, ~~its~~or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the quarter ended March 31, 2024, the Company completed the acquisitions of Revela, FDL, and PT. As a result of the acquisitions, the Company is in the process of reviewing the internal control structures of these businesses and, if necessary, will make appropriate changes as the Company incorporates its controls and procedures into the acquired businesses.

5548

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is routinely involved in a number of actual or threatened legal actions, including those involving alleged personal injuries, employment law, product liability, intellectual property, environmental issues, alleged tax liability (see Note 910, Income Taxes of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein, “Financial ~~Statements”~~Statements,” for information on income tax matters), and class actions. The Company also routinely receives inquiries from regulators and other government authorities relating to various aspects of our business, and at any given time, the Company has matters at various stages of resolution. The outcomes of these matters are not within our complete control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief including injunctive relief, that could require significant expenditures or result in lost revenues. In accordance with applicable accounting standards, the Company records a liability in its consolidated financial statements for material loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss contingency is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, disgorgement, or punitive damages; or could result in a change in business practice. See Note 17, Legal Proceedings of “Notes to Consolidated Financial Statements” included in Part I, Item 1 herein, “Financial Statements,” for information on the Company’s legal proceedings which is incorporated herein by reference.

On September 4, 2019, AOT Holding AG (“AOT”) filed a putative class action under the U.S. Commodities Exchange Act in federal district court in Urbana, Illinois, alleging that the Company sought to manipulate the benchmark price used to price and settle ethanol derivatives traded on futures exchanges. On March 16, 2021, AOT filed an amended complaint adding a second named plaintiff Maize Capital Group, LLC (“Maize”). AOT and Maize allege that members of the putative class collectively suffered damages calculated to be between approximately $500 million to over $2.0 billion as a result of the Company’s alleged actions. On July 14, 2020, Green Plains Inc. and its related entities (“GP”) filed a putative class action lawsuit, alleging substantially the same operative facts, in federal court in Nebraska, seeking to represent sellers of ethanol. On July 23, 2020, Midwest Renewable Energy, LLC (“MRE”) filed a putative class action in federal court in Illinois alleging substantially the same operative facts and asserting claims under the Sherman Act. On November 11, 2020, United Wisconsin Grain Producers LLC (“UWGP”) and five other ethanol producers filed a lawsuit in federal court in Illinois alleging substantially the same facts and asserting claims under the Sherman Act and Illinois, Iowa, and Wisconsin law. The court granted ADM’s motion to dismiss the MRE and UWGP complaints without prejudice on August 9, 2021 and September 28, 2021, respectively. On August 16, 2021, the court granted ADM’s motion to dismiss the GP complaint, dismissing one claim with prejudice and declining jurisdiction over the remaining state law claim. MRE filed an amended complaint on August 30, 2021, which ADM moved to dismiss on September 27, 2021. UWGP filed an amended complaint on October 19, 2021, which the court dismissed on July 12, 2022. UWGP has appealed the dismissal to the United States Court of Appeals for the Seventh Circuit. On October 26, 2021, GP filed a new complaint in Nebraska federal district court, alleging substantially the same facts and asserting a claim for tortious interference with contractual relations. On March 18, 2022, the Nebraska federal district court granted ADM’s motion to transfer the GP case back to the Central District of Illinois for further proceedings. ADM moved to dismiss the complaint on May 20, 2022 and on December 30, 2022, the court dismissed GP’s complaint with prejudice. GP has appealed the dismissal. The Company denies liability, and is vigorously defending itself in these actions. As these actions are in pretrial proceedings, the Company is unable at this time to predict the final outcome with any reasonable degree of certainty, but believes the outcome will not have a material adverse effect on its financial condition, results of operations, or cash flows.

The Company is not currently a party to any legal proceeding or environmental claim that it believes would have a material adverse effect on its financial position, results of operations, or liquidity.

ITEM 1A. RISK FACTORS

There were no significant changes in the Company’s risk factors during the quarter ended ~~June 30, 2023.~~March 31, 2024. For further information about the Company’s risk factors, refer to Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Period
Total Number of Shares Purchased(1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of a Publicly Announced Program(2)
Number of Shares Remaining to be Purchased Under the Program(2)
April 1, 2023 to
April 30, 2023 1,109,021 $ 78.331 1,109,021 82,337,873
May 1, 2023 to
May 31, 2023 4,018,934 75.349 4,018,934 78,318,939
June 1, 2023 to
June 30, 2023 3,557,170 73.387 3,556,480 74,762,459
Total 8,685,125 $ 74.926 8,684,435 74,762,459


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program(2)	Number of Shares Remaining to be Purchased Under the Program(2)
January 1, 2024 to
January 31, 2024	4,654,264	$	70.260	4,653,786	47,379,648

February 1, 2024 to
February 29, 2024	412,208	52.976		—	47,379,648

March 1, 2024 to
March 31, 2024	9,325,919	60.387		8,880,986	38,498,662
Total	14,392,391	$	63.368	13,534,772	38,498,662

(1)Total shares purchased represent those shares purchased in the open market as part of the Company’s publicly announced share repurchase program described below, shares received as payment for the exercise price of stock option exercises, and shares received as payment for the withholding taxes on vested restricted stock awards. During the three-month period ended ~~June 30, 2023,~~March 31, 2024, there were ~~690~~857,619 shares received as payments for the withholding taxes on vested restricted stock ~~awards and for the exercise price of stock option exercises.~~awards.

ITEM 4. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS (Continued)

(2)On November 5, 2014, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 100,000,000 shares of the Company’s common stock during the period commencing January 1, 2015 and ending December 31, 2019. On August 7, 2019, the Company’s Board of Directors approved the extension of the stock repurchase program through December 31, 2024 and the repurchase of up to an additional 100,000,000 shares under the extended program.

ITEM 5. OTHER INFORMATION

~~On June 9, 2023, Jennifer L. Weber,~~None of the Company’s ~~Senior Vice President, Chief People Officer and Chief Diversity Officer, entered into a pre-arranged trading~~directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of ADM’s securities that iswas intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange ~~Act. This plan provides for the sale of up to 11,111 shares of the Company’s common stock in the aggregate, and terminates on the earlier of the close of market on February 9, 2024~~Act or ~~the date all shares are sold thereunder. There were no other Rule 10b5-1 trading arrangements or~~any non-Rule 10b5-1 trading ~~arrangements adopted, modified or terminated by the Company’s directors and executive officers~~arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended ~~June 30, 2023.~~March 31, 2024.

ITEM 6. EXHIBITS


(3)(i)						Composite Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3(i) to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2001).

(3)(ii)						Bylaws, as amended through November 2, 2022 (incorporated by reference to Exhibit 3(ii) to the Company’s Annual Report on Form 10-K filed on February 14, 2023).

~~(4.1)~~(10.1)						Form of ~~4.500% Notes due 2033 (incorporated by reference to Exhibit 4.1 to~~Performance Share Unit Award Agreement under the Company’s ~~Current Report on Form 8-K filed on April 3, 2023).~~2020 Incentive Compensation Plan.

(10.2)						Form of Restricted Stock Unit Award Agreement under the Company’s 2020 Incentive Compensation Plan.

(31.1)						Certification of ~~Chief~~Principal Executive Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a) of the Securities Exchange Act of 1934, as amended.

(31.2)						Certification of ~~Chief~~Principal Financial Officer pursuant to Rule 13a–14(a) and Rule 15d–14(a) of the Securities Exchange Act of 1934, as amended.

(32.1)						Certification of ~~Chief~~Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32.2)						Certification of ~~Chief~~Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)						Inline XBRL file set for the consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” and for the information under Part II, Item 5, “Other Information” of this Quarterly Report on Form 10-Q.

(104)						Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL file set.

5850

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			ARCHER-DANIELS-MIDLAND COMPANY



			/s/ ~~V. Luthar~~I. Roig
			~~V. Luthar~~I. Roig
			Senior Vice President and Interim Chief Financial Officer



			~~/s/ R. B. Jones~~(Principal Financial Officer and Duly Authorized Officer)
			~~R. B. Jones~~
			~~Senior Vice President, General Counsel, and Secretary~~

Dated: ~~September 11, 2023~~April 30, 2024

5951


	Six Months Ended June 30, 2022
	Topic 606 Revenue						Topic 815(1)		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Ag Services and Oilseeds
Ag Services	$	1,983	$	384	$	2,367	$	23,813	$	26,180
Crushing	253		—		253		6,331		6,584
Refined Products and Other	1,376		—		1,376		5,542		6,918
Total Ag Services and Oilseeds	3,612		384		3,996		35,686		39,682
Carbohydrate Solutions
Starches and Sweeteners	3,819		—		3,819		1,198		5,017
Vantage Corn Processors	2,100		—		2,100		—		2,100
Total Carbohydrate Solutions	5,919		—		5,919		1,198		7,117
Nutrition
Human Nutrition	1,978		—		1,978		—		1,978
Animal Nutrition	1,949		—		1,949		—		1,949
Total Nutrition	3,927		—		3,927		—		3,927

Other Business	208		—		208		—		208
Total Revenues	$	13,666	$	384	$	14,050	$	36,884	$	50,934