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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.  20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
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

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ARCHER-DANIELS-MIDLAND COMPANY
(Exact name of registrant as specified in its charter)
Delaware41-0129150
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valueADMNYSE
1.000% Notes due 2025NYSE
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 FilerAccelerated FilerEmerging Growth Company
Non-accelerated FilerSmaller 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 – 494,437,789 shares
(April 29, 2024)

SAFE HARBOR STATEMENT

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve 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 changes in circumstances that could cause actual results and outcomes to differ materially from the forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, without limitation, those that are described in Item 1A, "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2023, as may be updated in this or subsequent Quarterly Reports on Form 10-Q. Should 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 required by law, Archer-Daniels- Midland Company does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement whether as a result of new information, future events, changes in assumptions or otherwise.







PART I - FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
Archer-Daniels-Midland Company

Consolidated Statements of Earnings
(Unaudited)
Three Months Ended
March 31,
 20242023
(In millions, except per share amounts)
Revenues$21,847 $24,072 
Cost of products sold20,188 21,992 
Gross Profit1,659 2,080 
Selling, general, and administrative expenses951 881 
Asset impairment, exit, and restructuring costs18 7 
Equity in earnings of unconsolidated affiliates(212)(174)
Interest and investment income(123)(134)
Interest expense166 147 
Other (income) expense – net(26)(44)
Earnings Before Income Taxes885 1,397 
Income tax expense166 225 
Net Earnings Including Noncontrolling Interests719 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 – basic513 550 
Average number of shares outstanding – diluted514 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,
20242023
(In millions)
Net earnings including noncontrolling interests$719 $1,172 
Other comprehensive income (loss):
Foreign currency translation adjustment4 153 
Tax effect(20)14 
Net of tax amount(16)167 
Pension and other postretirement benefit liabilities adjustment(4)(26)
Tax effect1 (13)
Net of tax amount(3)(39)
Deferred gain (loss) on hedging activities(69)(104)
Tax effect10 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 noncontrolling interests(13)(1)
Comprehensive income (loss) attributable to controlling interests$646 $1,216 

See notes to consolidated financial statements.




4


Archer-Daniels-Midland Company

Consolidated Balance Sheets
(In millions)March 31, 2024December 31, 2023
 (Unaudited)
Assets  
Current Assets  
Cash and cash equivalents$830 $1,368 
Segregated cash and investments7,381 7,228 
Trade receivables - net4,178 4,232 
Inventories11,634 11,957 
Other current assets4,983 4,982 
Total Current Assets29,006 29,767 
Investments and Other Assets  
Investments in affiliates5,566 5,500 
Goodwill and other intangible assets7,051 6,341 
Right of use assets1,285 1,211 
Other assets1,327 1,304 
Total Investments and Other Assets15,229 14,356 
Property, Plant, and Equipment  
Land and land improvements573 573 
Buildings5,940 5,876 
Machinery and equipment20,298 20,223 
Construction in progress1,421 1,360 
 28,232 28,032 
Accumulated depreciation(17,636)(17,524)
Net Property, Plant, and Equipment10,596 10,508 
Total Assets$54,831 $54,631 
Liabilities, Temporary Equity, and Shareholders’ Equity  
Current Liabilities  
Short-term debt$1,734 $105 
Trade payables5,599 6,313 
Payables to brokerage customers8,176 7,867 
Accrued expenses and other payables3,922 4,076 
Current lease liabilities298 300 
Current maturities of long-term debt1 1 
Total Current Liabilities19,730 18,662 
Long-Term Liabilities  
Long-term debt8,245 8,259 
Deferred income taxes1,291 1,309 
Non-current lease liabilities1,010 931 
Other1,016 1,005 
Total Long-Term Liabilities11,562 11,504 
Temporary Equity - Redeemable noncontrolling interest307 320 
Shareholders’ Equity  
Common stock2,720 3,154 
Reinvested earnings23,069 23,465 
Accumulated other comprehensive income (loss)(2,570)(2,487)
Noncontrolling interests13 13 
Total Shareholders’ Equity23,232 24,145 
Total Liabilities, Temporary Equity, and Shareholders’ Equity$54,831 $54,631 
See notes to consolidated financial statements.
5


Archer-Daniels-Midland Company

Consolidated Statements of Cash Flows
(Unaudited)
(In millions)Three Months Ended
March 31,
 20242023
Operating Activities  
Net earnings including noncontrolling interests$719 $1,172 
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities  
Depreciation and amortization280 259 
Asset impairment charges3 3 
Deferred income taxes(64)47 
Equity in earnings of affiliates, net of dividends(136)(113)
Stock compensation expense66 65 
Deferred cash flow hedges(69)(104)
(Gain) losses on sales/revaluation of assets14 (11)
Other – net69 (8)
Changes in operating assets and liabilities, net of acquisitions and dispositions  
Segregated investments(159)(935)
Trade receivables61 488 
Inventories295 52 
Other current assets163 328 
Trade payables(713)(1,556)
Payables to brokerage customers319 (460)
Accrued expenses and other payables(148)(837)
Total Operating Activities700 (1,610)
Investing Activities  
Capital expenditures(328)(327)
Net assets of businesses acquired(915) 
Proceeds from sales of assets6 13 
Investments in affiliates(4)(4)
Other – net11 (10)
Total Investing Activities(1,230)(328)
Financing Activities  
Long-term debt payments (2)
Net borrowings (payments) under lines of credit agreements1,619 1,306 
Share repurchases(1,327)(351)
Cash dividends(257)(248)
Other – net(37)(107)
Total Financing Activities(2)598 
Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents(13)(6)
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents(545)(1,346)
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period5,390 7,033 
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period$4,845 $5,687 
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets
Cash and cash equivalents$830 $899 
Restricted cash and restricted cash equivalents included in segregated cash and investments4,015 4,788 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$4,845 $5,687 

See notes to consolidated financial statements.
6


Archer-Daniels-Midland-Company

Consolidated Statements of Shareholders’ Equity
(Unaudited)
Common StockReinvested
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Shareholders’
Equity
(In millions, except per share amounts)SharesAmount
Balance, December 31, 2023513 $3,154 $23,465 $(2,487)$13 $24,145 
Comprehensive income      
Net earnings 729  (10) 
Other comprehensive income (loss)   (83)(3) 
Total comprehensive income     633 
Cash dividends paid - $0.50 per share  (257)  (257)
Share repurchases(13)(868)(868)
Share repurchases prepayment(462)(462)
Stock compensation expense3 66    66 
Stock option exercises net of taxes(1)(41)(41)
Other 3   13 16 
Balance, March 31, 2024502 $2,720 $23,069 $(2,570)$13 $23,232 
Balance, December 31, 2022547 $3,147 $23,646 $(2,509)$33 $24,317 
Comprehensive income      
Net earnings 1,170  2  
Other comprehensive income (loss)   46 (3) 
Total comprehensive income     1,215 
Cash dividends paid - $0.45 per share  (248)  (248)
Share repurchases(4)(351)(351)
Stock compensation expense3 65    65 
Stock option exercises net of taxes(1)(108)(108)
Other 2   4 6 
Balance, March 31, 2023546 $3,106 $24,217 $(2,463)$36 $24,896 
See notes to consolidated financial statements.
7



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 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 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 include allowances for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances including any accrued interest 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.










8

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:

March 31, 2024March 31, 2023
(In millions)
Beginning, January 1$215 $199 
Current year provisions5 4
Recoveries8 1 
Write-offs against allowance(13)(24)
Foreign exchange translation adjustment1 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, 2024December 31, 2023
 (In millions)
Raw materials and supplies$1,880 $1,944 
Finished goods3,047 3,026 
Market inventories6,707 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 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.








9


Archer-Daniels-Midland Company

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 information footnote but will not have an impact on the consolidated financial statements.

Effective December 31, 2025, the Company will be required to 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.

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 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 $193 million and $178 million for the three months ended March 31, 2024 and 2023, 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.

10

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 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 TimeOver TimeTotalRevenueRevenues
Ag Services and Oilseeds
Ag Services$1,022 $193 $1,215 $9,982 $11,197 
Crushing117  117 3,210 3,327 
Refined Products and Other548  548 2,147 2,695 
Total Ag Services and Oilseeds1,687 193 1,880 15,339 17,219 
Carbohydrate Solutions
Starches and Sweeteners1,593  1,593 563 2,156 
Vantage Corn Processors527  527  527 
Total Carbohydrate Solutions2,120  2,120 563 2,683 
Nutrition
Human Nutrition964  964  964 
Animal Nutrition872  872  872 
Total Nutrition1,836  1,836  1,836 
Other Business109  109  109 
Total Revenues$5,752 $193 $5,945 $15,902 $21,847 
11

Archer-Daniels-Midland Company

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 TimeOver TimeTotalRevenueRevenues
Ag Services and Oilseeds
Ag Services$1,017 $178 $1,195 $10,500 $11,695 
Crushing191 — 191 3,492 3,683 
Refined Products and Other626 — 626 2,575 3,201 
Total Ag Services and Oilseeds1,834 178 2,012 16,567 18,579 
Carbohydrate Solutions
Starches and Sweeteners2,084 — 2,084 653 2,737 
Vantage Corn Processors800 — 800 — 800 
Total Carbohydrate Solutions2,884 — 2,884 653 3,537 
Nutrition
Human Nutrition936 — 936 — 936 
Animal Nutrition917 — 917 — 917 
Total Nutrition1,853 — 1,853 — 1,853 
Other Business103 — 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 revenue when control of the inventory is transferred within the meaning of Topic 606 as required by Topic 610-20.

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.







12

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)RevelaFDLPTTotal
Working capital$50 $ $5 $55 
Property, plant, and equipment38 33 5 76 
Goodwill403 145 5 553 
Other intangible assets166 97  263 
Other long-term assets28 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.








13

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 LivesRevelaFDLTotal
(In years)(In millions)
Intangible assets with finite lives:
Trademarks/brands3$ $4 $4 
Customer lists10to18124 73 197 
Recipes and others10to2142 20 62 
Total other intangible assets acquired$166 $97 $263 

Note 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 March 31, 2024 and December 31, 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
 (In millions)
 
Assets:    
Inventories carried at market$ $3,759 $2,948 $6,707 
Unrealized derivative gains:    
Commodity contracts 598 764 1,362 
Foreign currency contracts 187  187 
Cash equivalents206   206 
Segregated investments1,663   1,663 
Total Assets$1,869 $4,544 $3,712 $10,125 
Liabilities:    
Unrealized derivative losses:    
Commodity contracts$ $448 $435 $883 
Foreign currency contracts 94  94 
Inventory-related payables 1,928 62 1,990 
Total Liabilities$ $2,470 $497 $2,967 
14

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 5.    Fair Value Measurements (Continued)
 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
 (In millions)
Assets:    
Inventories carried at market$ $4,274 $2,713 $6,987 
Unrealized derivative gains:    
Commodity contracts 628 731 1,359 
Foreign currency contracts 187  187 
Cash equivalents209   209 
Segregated investments1,362   1,362 
Total Assets$1,571 $5,089 $3,444 $10,104 
Liabilities:    
Unrealized derivative losses:    
Commodity contracts$ $500 $457 $957 
Foreign currency contracts 144  144 
Inventory-related payables 1,219 101 1,320 
Total Liabilities$ $1,863 $558 $2,421 

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 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.














15

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 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 was the equity linked embedded derivative related to the exchangeable bonds. The fair value of the embedded derivative was included in long-term debt, with changes in fair value recognized as interest, and was 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 March 31, 2024.
 Level 3 Fair Value Asset Measurements at
March 31, 2024
 Inventories
 Carried at
 Market
Commodity
Derivative
Contracts
Gains
 
Total 
Assets
 (In millions)
Balance, December 31, 2023$2,713 $731 $3,444 
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*
(97)375 278 
Purchases3,789  3,789 
Sales(3,883) (3,883)
Settlements (352)(352)
Transfers into Level 3516 28 544 
Transfers out of Level 3(90)(18)(108)
Ending balance, March 31, 2024$2,948 $764 $3,712 

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

16

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 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 March 31, 2024.

Level 3 Fair Value Liability Measurements at
 March 31, 2024
 Inventory-
 related
 Payables
Commodity
Derivative
Contracts
Losses
 
Total 
Liabilities
 (In millions)
Balance, December 31, 2023$101 $457 $558 
Total increase (decrease) in net realized/unrealized losses included in cost of products sold*(3)329 326 
Purchases1  1 
Sales(38) (38)
Settlements (290)(290)
Transfers into Level 31 13 14 
Transfers out of Level 3 (74)(74)
Ending balance, March 31, 2024$62 $435 $497 

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

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 March 31, 2023.
 Level 3 Fair Value Asset Measurements at
March 31, 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*2 477 479 
Purchases8,665  8,665 
Sales(8,254) (8,254)
Settlements (382)(382)
Transfers into Level 3605 50 655 
Transfers out of Level 3(275)(37)(312)
Ending balance, March 31, 2023$3,503 $649 $4,152 

* Includes increase in unrealized gains of $632 million relating to Level 3 assets still held at March 31, 2023.
17

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 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 March 31, 2023.
Level 3 Fair Value Liability Measurements at
 March 31, 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)243 (5)236 
Purchases2   2 
Settlements(31)(424)— (455)
Transfers into Level 3 39 — 39 
Transfers out of Level 3(1)(6)— (7)
Ending balance, March 31, 2023$57 $455 $1 $513 

* Includes increase in unrealized losses of $248 million relating to Level 3 liabilities still held at March 31, 2023.

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..


18

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 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 March 31, 2024 and December 31, 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 March 31, 2024 is a weighted average 28.2% of the total price for assets and 25.9% of the total price for liabilities.
Weighted Average % of Total Price
March 31, 2024December 31, 2023
Component TypeAssetsLiabilitiesAssetsLiabilities
Inventories and Related Payables
Basis28.2 %25.9 %25.0 %33.2 %
Transportation cost18.6 % %11.5 % %
Commodity Derivative Contracts
Basis40.1 %28.2 %24.2 %24.9 %
Transportation cost8.3 %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 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.  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 March 31, 2024 and December 31, 2023.
 March 31, 2024December 31, 2023
 AssetsLiabilitiesAssetsLiabilities
 (In millions)
Foreign Currency Contracts$145 $94 $187 $122 
Commodity Contracts1,351 883 1,343 957 
Total$1,496 $977 $1,530 $1,079 


19

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)
(Unaudited)

Note 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 months ended March 31, 2024 and 2023.
Other (income) expense - net
 Cost ofInterest
(In millions)Revenuesproducts soldexpense
Three Months Ended March 31, 2024
Consolidated Statement of Earnings$21,847 $20,188 $(26)$166 
Pre-tax gains (losses) on:
Foreign Currency Contracts$1 $(63)$54 $ 
Commodity Contracts 197   
Total gain (loss) recognized in earnings$1 $134 $54 $ $189 
Three Months Ended March 31, 2023
Consolidated Statement of Earnings$24,072 $21,992 $(44)$147 
Pre-tax gains (losses) on:
Foreign Currency Contracts$(11)$95 $(16)$— 
Commodity Contracts 440  — 
Debt Conversion Option — — 5 
Total gain (loss) recognized in earnings$(11)$535 $(16)$5 $513 
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 March 31, 2024 and December 31, 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.

20

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 59 million bushels of corn per month. During the past 12 months, the Company hedged between 12% and 34% of its monthly grind. At March 31, 2024, the Company had designated hedges representing between 0% and 29% of its anticipated monthly grind of corn for the next 12 months.

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 77% and 100% of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities. At March 31, 2024, the Company had designated hedges representing between 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 39% and 80% of the anticipated monthly natural gas consumption at the designated facilities. At March 31, 2024, the Company had designated hedges representing between 34% and 70% of the anticipated monthly natural gas consumption over the next 12 months.

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

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 March 31, 2024 and December 31, 2023, and foreign exchange forwards with an aggregate notional amount of $2.1 billion as of March 31, 2024 and December 31, 2023.

As of March 31, 2024 and December 31, 2023, the Company had after-tax gains of $46 million and 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 March 31, 2024 and December 31, 2023.

 March 31, 2024December 31, 2023
 AssetsLiabilitiesAssetsLiabilities
 (In millions)
Commodity Contracts$11 $ $16 $ 
Foreign Currency Contracts42   22 
Total$53 $ $16 $22 





21

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 months ended March 31, 2024 and 2023.

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)
Other Net Investment Hedging Strategies

The Company has designated €0.7 billion of its outstanding long-term debt and commercial paper borrowings at March 31, 2024 and December 31, 2023 as hedges of its net investment in a foreign subsidiary. As of March 31, 2024 and December 31, 2023, the Company had after-tax gains of $224 million and $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.























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