Archer-Daniels-Midland Co. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Archer-Daniels-Midland Co. filed its Q1 2024 10-Q report, detailing financial performance and segment data.</b>

AI Summary

Archer-Daniels-Midland Co (ADM) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Archer-Daniels-Midland Co. filed its 10-Q report for the quarterly period ended March 31, 2024. The filing covers the period from January 1, 2024, to March 31, 2024. Key financial statement data, including common stock, retained earnings, and accumulated other comprehensive income, are presented for various dates including March 31, 2024, December 31, 2023, and March 31, 2023. Segment information for Ag Services, Crushing, and Refined Products and Other is included for the period. The company's principal executive offices are located at 77 W. Wacker Dr., Chicago, IL 60601.

Why It Matters

For investors and stakeholders tracking Archer-Daniels-Midland Co, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial snapshot of Archer-Daniels-Midland Co., crucial for assessing recent performance and trends. The detailed segment information allows for an analysis of which business units are driving revenue and growth, offering insights into the company's operational strengths.

Risk Assessment

Risk Level: medium — Archer-Daniels-Midland Co shows moderate risk based on this filing. The filing is a standard quarterly report, but the absence of specific financial performance figures (revenue, net income, etc.) in the provided text limits a deeper risk assessment beyond general operational and market factors inherent to the industry.

Analyst Insight

Review the detailed segment data within the full 10-Q to identify revenue drivers and potential areas of concern for Q1 2024.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Period End Date (Conformed period of report)
• 2024-01-01 — Period Start Date (Reporting period)
• 2023-03-31 — Prior Period End Date (Comparative financial data)
• 2023-01-01 — Prior Period Start Date (Comparative financial data)

Key Players & Entities

• Archer-Daniels-Midland Co. (company) — Filer name
• 0000007084 (company) — Central Index Key
• 2024-03-31 (date) — Conformed period of report
• 2024-04-30 (date) — Filed as of date
• 77 W. Wacker Dr. (address) — Business address street
• Chicago (address) — Business address city
• IL (address) — Business address state
• 60601 (address) — Business address zip

FAQ

Risk Factors

• Market to Market vs. Non-Market to Market Accounting [medium — financial]: The company utilizes both market-to-market and non-market-to-market accounting for its products and services, which can impact reported revenues and earnings.
• Commodity Price Volatility [high — market]: Fluctuations in commodity prices for agricultural products can significantly affect the company's revenues and profitability.
• Supply Chain and Logistics [medium — operational]: Disruptions in global supply chains or logistics can impact the company's ability to source raw materials and deliver finished products.

Filing Documents

• adm-20240331.htm (10-Q) — 1547KB
• adm-ex1012024331x10q.htm (EX-10.1) — 98KB
• adm-ex1022024331x10q.htm (EX-10.2) — 92KB
• adm-ex311_2024331xq1.htm (EX-31.1) — 10KB
• adm-ex312_2024331xq1.htm (EX-31.2) — 10KB
• adm-ex321_2024331xq1.htm (EX-32.1) — 5KB
• adm-ex322_2024331xq1.htm (EX-32.2) — 5KB
• adm-20240331_g1.jpg (GRAPHIC) — 109KB
• 0000007084-24-000017.txt (&nbsp;) — 10342KB
• adm-20240331.xsd (EX-101.SCH) — 53KB
• adm-20240331_cal.xml (EX-101.CAL) — 102KB
• adm-20240331_def.xml (EX-101.DEF) — 399KB
• adm-20240331_lab.xml (EX-101.LAB) — 838KB
• adm-20240331_pre.xml (EX-101.PRE) — 619KB
• adm-20240331_htm.xml (XML) — 1753KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Archer-Daniels-Midland Company Consolidated Statements of Earnings (Unaudited) Three Months Ended March 31, 2024 2023 (In millions, except per share amounts) Revenues $ 21,847 $ 24,072 Cost of products sold 20,188 21,992 Gross Profit 1,659 2,080 Selling, general, and administrative expenses 951 881 Asset impairment, exit, and restructuring costs 18 7 Equity in earnings of unconsolidated affiliates ( 212 ) ( 174 ) Interest and investment income ( 123 ) ( 134 ) Interest expense 166 147 Other (income) expense – net ( 26 ) ( 44 ) Earnings Before Income Taxes 885 1,397 Income tax expense 166 225 Net Earnings Including Noncontrolling Interests 719 1,172 Less: Net earnings (losses) attributable to noncontrolling interests ( 10 ) 2 Net Earnings Attributable to Controlling Interests $ 729 $ 1,170 Average number of shares outstanding – basic 513 550 Average number of shares outstanding – diluted 514 551 Basic earnings per common share $ 1.42 $ 2.13 Diluted earnings per common share $ 1.42 $ 2.12 Dividends per common share $ 0.50 $ 0.45 See notes to consolidated financial statements. 3 Archer-Daniels-Midland Company Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three Months Ended March 31, 2024 2023 (In millions) Net earnings including noncontrolling interests $ 719 $ 1,172 Other comprehensive income (loss): Foreign currency translation adjustment 4 153 Tax effect ( 20 ) 14 Net of tax amount ( 16 ) 167 Pension and other postretirement benefit liabilities adjustment ( 4 ) ( 26 ) Tax effect 1 ( 13 ) Net of tax amount ( 3 ) ( 39 ) Deferred gain (loss) on hedging activities ( 69 ) ( 104 ) Tax effect 10 16 Net of tax amount ( 59 ) ( 88 ) Unrealized gain (loss) on investments ( 7 ) 4 Tax effect ( 1 ) ( 1 ) Net of tax amount ( 8 ) 3 Other comprehensive income (loss) ( 86 ) 43 Comprehensive income (loss) 633 1,215 Less: Comprehensive income (loss) attributable to

Notes to Consolidated Financial Statements

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 three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 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, 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 and impairments determined to be other than temporary in nature. The Company's portion of the result

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 1. Basis of Presentation (Continued) Changes to the allowance for estimated uncollectible accounts are as follows: March 31, 2024 March 31, 2023 (In millions) Beginning, January 1 $ 215 $ 199 Current year provisions 5 4 Recoveries 8 1 Write-offs against allowance ( 13 ) ( 24 ) Foreign exchange translation adjustment 1 1 Other — 1 Ending, March 31 $ 216 $ 182 Write-offs against allowance in the three months ended March 31, 2024 were primarily related to long-term receivables. Write-offs against allowance in the three months ended March 31, 2023 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 as of March 31, 2024 and December 31, 2023. March 31, 2024 December 31, 2023 (In millions) Raw materials and supplies $ 1,880 $ 1,944 Finished goods 3,047 3,026 Market inventories 6,707 6,987 Total inventories $ 11,634 $ 11,957 Included in raw materials and supplies are work in process inventories which were not material as of March 31, 2024 and December 31, 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 gain

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 2. New Accounting Standards Through December 31, 2024, the Company has the option to adopt the amended guidance of 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. Through March 31, 2024, ADM has completed the transition of its financing, funding, and hedging portfolios from LIBOR to alternative reference rates. The transition did not have an impact on the Company's consolidated financial statements. Effective December 31, 2024, the Company will be required to adopt the amended guidance of ASC 280, 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 infor

Notes to Consolidated Financial Statements (Continued)

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 the Company has yet to provide. Contract liabilities of $ 508 million and $ 626 million as of March 31, 2024 and December 31, 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 $ 235 million. Disaggregation of Revenues The following tables present revenue disaggregated by timing of recognition and major product lines for the three months ended March 31, 2024 and 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 11 Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) 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 (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. 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 rev

Notes to Consolidated Financial Statements (Continued)

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 rev