ADM Reports Record Second Quarter Earnings per Share of $1.26, $1.33 on an Adjusted Basis; Expects Momentum to Continue in Second Half, Leading to Very Strong Full-Year Outlook

ADM Reports Record Second Quarter Earnings per Share of $1.26, $1.33 on an Adjusted Basis; Expects Momentum to Continue in Second Half, Leading to Very Strong Full-Year Outlook

7/27/2021

  • Q2 net earnings of $712 million; adjusted net earnings of $754 million
  • Segment operating profit up more than 40%
  • ROIC of 9.7%, significantly higher than the prior-year period’s 8.1%
  • 27% year-over-year Q2 operating profit growth in Nutrition, raising segment’s OP growth expectations for full year to 20%

CHICAGO--(BUSINESS WIRE)-- ADM (NYSE: ADM) today reported financial results for the quarter ended June 30, 2021.

“It was yet another excellent quarter for ADM, as our team delivered record earnings, with strong year-over-year profit growth across all three business units,” said Chairman and CEO Juan Luciano.

“This is a very different ADM than even a few short years ago, and our transformation is far from over. Our productivity efforts are powering our execution, and — combined with our unparalleled global footprint and strong risk management — supported outstanding results in both Ag Services & Oilseeds and Carbohydrate Solutions. And we’re driving innovation, which helped support record top-line and bottom-line results in Nutrition; in fact, we are now raising our expectations of full-year profit growth for Nutrition to 20 percent.

“We’re excited about our growth trajectory as we continue to expand our participation in large and fast-growing categories, from alternative proteins to renewable green diesel to plant-based biosolutions, with all of our strategic efforts underpinned by our unique opportunity to use ADM’s integrated value chain to advance decarbonization of the food and agriculture industries. Given our great start to the year and our expectation of continued momentum in the second half, we are confident in delivering very strong full-year earnings, and we remain well-positioned for robust, sustained growth in the years to come.”

Second Quarter 2021 Highlights

(Amounts in millions except per share amounts)

2021

 

2020

Earnings per share (as reported)

$

1.26

 

 

$

0.84

 

Adjusted earnings per share1

$

1.33

 

 

$

0.85

 

 

 

 

 

Segment operating profit

$

1,145

 

 

$

813

 

Adjusted segment operating profit1

$

1,160

 

 

$

804

 

Ag Services and Oilseeds

570

 

 

413

 

Carbohydrate Solutions

383

 

 

195

 

Nutrition

201

 

 

158

 

Other Business

6

 

 

38

 

  • Q2 2021 EPS as reported of $1.26 includes a $0.16 per share charge related to asset impairment and non-cash pension settlement, a $0.06 per share gain related to the mark-to-market adjustment on the Wilmar exchangeable bond, and a $0.03 gain related to the sale of certain assets. Adjusted EPS, which excludes these items, was $1.33.1

1 Non-GAAP financial measures; see pages 5, 10, 11 and 12 for explanations and reconciliations, including after-tax amounts.

Quarterly Results of Operations

Ag Services & Oilseeds delivered operating profits almost 40 percent higher than the previous year’s quarter.

  • Ag Services results were higher year over year. The North American origination business effectively managed its positions in a dynamic pricing environment, and also delivered significantly higher export volumes, driven by corn sales to China. South American origination was impacted by slower farmer selling and high commodity prices, which impacted contract fulfillment. Global trade performance was lower than the strong second quarter of 2020, with results driven partially by timing impacts that should reverse.
  • Crushing had substantially higher year-over-year results. The business executed well in an environment of strong vegetable oil demand to deliver higher execution margins in North American soy and EU softseeds. Results were partially offset by weaker soybean crush margins in South America. In addition, there were approximately $70 million in net incremental negative timing effects, which should reverse in the coming quarters.
  • Refined Products and Other results were significantly higher than the prior-year period, driven by continued recovery in foodservice as well as positive timing effects in North America, partially offset by impacts of the reduction in Brazilian biodiesel mandates.
  • Equity earnings from Wilmar were higher year over year.

Carbohydrate Solutions results were almost double those of the prior-year period.

  • Starches and Sweeteners, including ethanol production from our wet mills, delivered substantially higher year-over-year results, driven by about $90 million in positioning gains across the ethanol complex in a highly dynamic environment, as well as more normalized results from corn oil. Sweetener volumes were higher, reflecting the beginnings of a recovery in demand from the foodservice channel. Ethanol margins improved versus the prior-year period, driven by a resurgence in driving miles in the U.S.
  • Vantage Corn Processors results were much higher than the second quarter of 2020, supported by the resumption of production at our two dry mills, improved fuel ethanol margins and favorable performance in USP-grade industrial alcohol from our Peoria complex.

Nutrition delivered a record Q2, with 15 percent revenue growth and 27 percent higher year-over-year profits.

  • Human Nutrition revenues were 13 percent higher than the second quarter of last year on a constant currency basis, and operating profits were up 24 percent. In North America and EMEA, the flavors business delivered strong volumes and improved product mix, particularly in the beverage segment. Specialty Ingredients delivered strong sales growth in specialty proteins, though results were lower due to certain one-time costs, mainly in texturants. In Health & Wellness, stronger sales and margins in probiotics were offset by higher costs in fibers due to planned facility downtime.
  • Animal Nutrition revenue was 17 percent higher year over year on a constant currency basis and profits were up 44 percent as improved demand and margins in amino acids, strength in feed additives and ingredients, and better performance in EMEA more than offset COVID-19 and labor-related impacts in other regions.

Other Business results were substantially lower than the prior-year period, driven primarily by captive insurance underwriting losses, most of which were offset by corresponding recoveries in other business segments.

Other Items of Note

As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.

Segment operating profit of $1.1 billion for the quarter includes charges related to asset impairment and restructuring of $37 million ($0.05 per share) and gains on sales of assets of $22 million ($0.03 per share).

In Corporate results, interest expense decreased from the prior year on lower interest rates and the favorable liability management actions taken in the prior year. Unallocated corporate costs were higher year over year due primarily to higher performance-related compensation accruals, higher IT operating and project-related costs, and transfers of costs from business segments into the centralized centers of excellence in supply chain and operations. Other income increased due primarily to a mark-to-market investment gain in the ADM Ventures portfolio. Corporate results also included a non-cash pension settlement charge of $82 million ($0.11 per share) and a gain related to the mark-to-market adjustment on the Wilmar exchangeable bond of $30 million ($0.06 per share).

The effective tax rate for the quarter was approximately 14 percent.

Note: Additional Facts and Explanations

Additional facts and explanations about results and industry environment can be found at the end of the ADM Q2 Earnings Presentation at www.adm.com/webcast.

Conference Call Information

ADM will host a webcast on July 27, 2021, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.

Forward-Looking Statements

Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements and materials are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation, and you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events.

About ADM

At ADM, we unlock the power of nature to provide access to nutrition worldwide. With industry-advancing innovations, a complete portfolio of ingredients and solutions to meet any taste, and a commitment to sustainability, we give customers an edge in solving the nutritional challenges of today and tomorrow. We’re a global leader in human and animal nutrition and the world’s premier agricultural origination and processing company. Our breadth, depth, insights, facilities and logistical expertise give us unparalleled capabilities to meet needs for food, beverages, health and wellness, and more. From the seed of the idea to the outcome of the solution, we enrich the quality of life the world over. Learn more at www.adm.com.

Financial Tables Follow

Source: Corporate Release

Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP financial measure)

and Corporate Results

(unaudited)

 

 

Quarter ended

 

 

Six months ended

 

 

June 30

 

 

June 30

 

(In millions)

2021

2020

Change

 

2021

2020

Change

 

 

 

 

 

 

 

 

Segment Operating Profit

$

1,145

 

$

813

 

$

332

 

 

$

2,250

 

$

1,412

 

$

838

 

Specified items:

 

 

 

 

 

 

 

(Gains) losses on sales of assets and businesses

(22)

 

(23)

 

1

 

 

(22)

 

(23)

 

1

 

Impairment, restructuring, and settlement charges

37

 

14

 

23

 

 

131

 

58

 

73

 

Adjusted Segment Operating Profit

$

1,160

 

$

804

 

$

356

 

 

$

2,359

 

$

1,447

 

$

912

 

 

 

 

 

 

 

 

 

Ag Services and Oilseeds

$

570

 

$

413

 

$

157

 

 

$

1,347

 

$

835

 

$

512

 

Ag Services

190

 

171

 

19

 

 

399

 

335

 

64

 

Crushing

150

 

113

 

37

 

 

532

 

183

 

349

 

Refined Products and Other

130

 

78

 

52

 

 

231

 

159

 

72

 

Wilmar

100

 

51

 

49

 

 

185

 

158

 

27

 

 

 

 

 

 

 

 

 

Carbohydrate Solutions

$

383

 

$

195

 

$

188

 

 

$

642

 

$

263

 

$

379

 

Starches and Sweeteners

306

 

177

 

129

 

 

528

 

276

 

252

 

Vantage Corn Processors

77

 

18

 

59

 

 

114

 

(13)

 

127

 

 

 

 

 

 

 

 

 

Nutrition

$

201

 

$

158

 

$

43

 

 

$

355

 

$

300

 

$

55

 

Human Nutrition

162

 

131

 

31

 

 

290

 

244

 

46

 

Animal Nutrition

39

 

27

 

12

 

 

65

 

56

 

9

 

 

 

 

 

 

 

 

 

Other Business

$

6

 

$

38

 

$

(32)

 

 

$

15

 

$

49

 

$

(34)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Profit

$

1,145

 

$

813

 

$

332

 

 

$

2,250

 

$

1,412

 

$

838

 

 

 

 

 

 

 

 

 

Corporate Results

$

(320)

 

$

(261)

 

$

(59)

 

 

$

(601)

 

$

(485)

 

$

(116)

 

 

 

 

 

 

 

 

 

Interest expense - net

(70)

 

(86)

 

16

 

 

(134)

 

(163)

 

29

 

Unallocated corporate costs

(248)

 

(194)

 

(54)

 

 

(450)

 

(383)

 

(67)

 

Other

49

 

35

 

14

 

 

59

 

(17)

 

76

 

Specified items:

 

 

 

 

 

 

 

LIFO credit (charge)

 

 

 

 

 

91

 

(91)

 

Gain (loss) on debt extinguishment

 

(14)

 

14

 

 

 

(14)

 

14

 

Gain on debt conversion option

30

 

 

30

 

 

10

 

 

10

 

Impairment, restructuring, and settlement charges

(81)

 

(2)

 

(79)

 

 

(86)

 

1

 

(87)

 

Earnings Before Income Taxes

$

825

 

$

552

 

$

273

 

 

$

1,649

 

$

927

 

$

722

 

Segment operating profit is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit, a non-GAAP financial measure, is segment operating profit excluding specified items. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered alternatives to income before income taxes, the most directly comparable GAAP financial measure, or any other measure of consolidated operating results under U.S. GAAP.

Consolidated Statements of Earnings

(unaudited)

 

 

Quarter ended

 

Six months ended

 

June 30

 

June 30

 

2021

 

2020

 

2021

 

2020

 

(in millions, except per share amounts)

 

 

 

 

 

 

 

 

Revenues

$

22,926

 

 

$

16,281

 

 

$

41,819

 

 

$

31,251

 

Cost of products sold (1)

21,463

 

 

15,173

 

 

38,808

 

 

29,192

 

Gross profit

1,463

 

 

1,108

 

 

3,011

 

 

2,059

 

Selling, general, and administrative expenses (2)

739

 

 

638

 

 

1,488

 

 

1,302

 

Asset impairment, exit, and restructuring costs (3)

23

 

 

16

 

 

82

 

 

57

 

Equity in (earnings) losses of unconsolidated affiliates

(163)

 

 

(103)

 

 

(288)

 

 

(243)

 

Investment income

(50)

 

 

(26)

 

 

(63)

 

 

(74)

 

Interest expense (4)

40

 

 

87

 

 

127

 

 

170

 

Other (income) expense - net (5,6,7)

49

 

 

(56)

 

 

16

 

 

(80)

 

Earnings before income taxes

825

 

 

552

 

 

1,649

 

 

927

 

Income tax expense (8)

113

 

 

80

 

 

244

 

 

64

 

Net earnings including noncontrolling interests

712

 

 

472

 

 

1,405

 

 

863

 

 

 

 

 

 

 

 

 

Less: Net earnings (losses) attributable to noncontrolling interests

 

 

3

 

 

4

 

 

3

 

Net earnings attributable to ADM

$

712

 

 

$

469

 

 

$

1,401

 

 

$

860

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.26

 

 

$

0.84

 

 

$

2.48

 

 

$

1.53

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

566

 

 

562

 

 

565

 

 

563

 

 

 

 

 

 

 

 

 

(1) Includes a charge related to an inventory writedown of $13 million in the current quarter and YTD, and a credit related to changes in the Company’s LIFO reserves of $91 million in the prior YTD.

 

(2) Includes a charge related to a legal settlement of $38 million in the current YTD.

 

(3) Includes charges related to impairment of certain assets and restructuring of $23 million and $82 million in the current quarter and YTD, respectively, and $16 million and $57 million in the prior quarter and YTD, respectively.

 

(4) Includes gains related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $30 million and $10 million in the current quarter and YTD, respectively.

 

(5) Includes gains related to the sale of certain assets of $22 million in the current quarter and YTD, and $23 million in the prior quarter and YTD. Also includes early debt repayment expenses of $14 million in the prior quarter and YTD.

 

(6) Includes exit costs of $2 million in the current YTD.

 

(7) Includes a settlement charge related to pension liabilities of $82 million in the current quarter and YTD.

 

(8) Includes the tax benefit impact of the above specified items and tax discrete items totaling $(24) million and $(49) million in the current quarter and YTD, respectively, and the tax expense (benefit) impact of the above specified items and certain discrete items totaling $(1) million and $19 million in the prior quarter and YTD, respectively.

Summary of Financial Condition

(unaudited)

 

 

 

June 30,
2021

 

June 30,
2020

 

 

(in millions)

Net Investment In

 

 

 

 

Cash and cash equivalents (a)

 

$

869

 

 

$

1,203

 

Operating working capital (b)

 

11,628

 

 

8,540

 

Property, plant, and equipment

 

9,873

 

 

9,833

 

Investments in and advances to affiliates

 

5,113

 

 

5,239

 

Goodwill and other intangibles

 

5,266

 

 

5,212

 

Other non-current assets

 

2,202

 

 

2,046

 

 

 

$

34,951

 

 

$

32,073

 

Financed By

 

 

 

 

Short-term debt (a)

 

$

1,289

 

 

$

531

 

Long-term debt, including current maturities (a)

 

8,432

 

 

8,642

 

Deferred liabilities

 

3,556

 

 

3,504

 

Temporary equity

 

71

 

 

85

 

Shareholders’ equity

 

21,603

 

 

19,311

 

 

 

$

34,951

 

 

$

32,073

 

(a)

Net debt is calculated as short-term debt plus long-term debt (including current maturities) less cash and cash equivalents.

(b)

Current assets (excluding cash and cash equivalents) less current liabilities (excluding short-term debt and current maturities of long-term debt).

Summary of Cash Flows

(unaudited)

 

 

 

Six months ended

 

 

June 30

 

 

2021

 

2020

 

 

(in millions)

Operating Activities

 

 

 

 

Net earnings

 

$

1,405

 

 

$

863

 

Depreciation and amortization

 

492

 

 

489

 

Asset impairment charges

 

54

 

 

47

 

(Gains) losses on sales/revaluation of assets

 

(79)

 

 

(64)

 

Other - net

 

330

 

 

276

 

Change in deferred consideration in securitized receivables(a)

 

 

 

(2,456)

 

Other changes in operating assets and liabilities

 

805

 

 

409

 

Total Operating Activities

 

3,007

 

 

(436)

 

 

 

 

 

 

Investing Activities

 

 

 

 

Purchases of property, plant and equipment

 

(427)

 

 

(360)

 

Net assets of businesses acquired

 

(5)

 

 

(3)

 

Proceeds from sale of business/assets

 

58

 

 

91

 

Investments in retained interest in securitized receivables(a)

 

 

 

(2,121)

 

Proceeds from retained interest in securitized receivables(a)

 

 

 

4,577

 

Marketable securities - net

 

1

 

 

(3)

 

Investments in and advances to affiliates

 

(8)

 

 

(5)

 

Other investing activities

 

(13)

 

 

(3)

 

Total Investing Activities

 

(394)

 

 

2,173

 

 

 

 

 

 

Financing Activities

 

 

 

 

Long-term debt borrowings

 

595

 

 

1,478

 

Long-term debt payments

 

(2)

 

 

(525)

 

Net borrowings (payments) under lines of credit

 

(752)

 

 

(667)

 

Share repurchases

 

 

 

(112)

 

Cash dividends

 

(417)

 

 

(405)

 

Other

 

 

 

3

 

Total Financing Activities

 

(576)

 

 

(228)

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents

 

2,037

 

 

1,509

 

Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period

 

4,646

 

 

2,990

 

Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period

 

$

6,683

 

 

$

4,499

 

(a)

Cash flows related to the Company’s retained interest in securitized receivables as required by ASU 2016-15 which took effect January 1, 2018.

Segment Operating Analysis

(unaudited)

 

 

Quarter ended

 

Six months ended

 

June 30

 

June 30

 

2021

 

2020

 

2021

 

2020

 

(in ‘000s metric tons)

Processed volumes (by commodity)

 

 

 

 

 

 

 

Oilseeds

8,778

 

 

9,103

 

 

17,738

 

 

18,266

 

Corn

5,042

 

 

4,099

 

 

8,692

 

 

9,633

 

Total processed volumes

13,820

 

 

13,202

 

 

26,430

 

 

27,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended

 

Six months ended

 

June 30

 

June 30

 

2021

 

2020

 

2021

 

2020

 

(in millions)

Revenues

 

 

 

 

 

 

 

Ag Services and Oilseeds

$

18,271

 

 

$

12,741

 

 

$

33,278

 

 

$

23,820

 

Carbohydrate Solutions

2,820

 

 

2,014

 

 

5,043

 

 

4,330

 

Nutrition

1,733

 

 

1,437

 

 

3,296

 

 

2,908

 

Other Business

102

 

 

89

 

 

202

 

 

193

 

Total revenues

$

22,926

 

 

$

16,281

 

 

$

41,819

 

 

$

31,251

 

Adjusted Earnings Per Share

A non-GAAP financial measure

(unaudited)

 

 

Quarter ended June 30

 

Six months ended June 30

 

2021

2020

 

2021

2020

 

In millions

Per share

In millions

Per share

 

In millions

Per share

In millions

Per share

Net earnings and fully diluted EPS

$

712

 

$

1.26

 

$

469

 

$

0.84

 

 

$

1,401

 

$

2.48

 

$

860

 

$

1.53

 

Adjustments:

 

 

 

 

 

 

 

 

 

LIFO charge (credit) (a)

 

 

 

 

 

 

 

(69)

 

(0.12)

 

Losses (gains) on sales of assets and businesses (b)

(17)

 

(0.03)

 

(18)

 

(0.03)

 

 

(17)

 

(0.03)

 

(18)

 

(0.03)

 

Impairment, restructuring, and settlement charges (c)

90

 

0.16

 

12

 

0.02

 

 

164

 

0.29

 

44

 

0.08

 

Loss (gain) on debt extinguishment (d)

 

 

11

 

0.02

 

 

 

 

11

 

0.02

 

Gain on debt conversion option (e)

(30)

 

(0.06)

 

 

 

 

(10)

 

(0.02)

 

 

 

Tax adjustment (f)

(1)

 

 

1

 

 

 

(1)

 

 

8

 

0.01

 

Sub-total adjustments

42

 

0.07

 

6

 

0.01

 

 

136

 

0.24

 

(24)

 

(0.04)

 

Adjusted net earnings and adjusted EPS

$

754

 

$

1.33

 

$

475

 

$

0.85

 

 

$

1,537

 

$

2.72

 

$

836

 

$

1.49

 

 

 

 

 

 

 

 

 

 

 

(a)

Prior YTD changes in the Company’s LIFO reserves of $(91) million pretax ($69 million after tax), tax effected using the Company’s U.S. income tax rate.

(b)

Current quarter and YTD gain of $22 million pretax ($17 million after tax) related to the sale of certain assets, tax effected using the Company’s U.S. income tax rate. Prior quarter and YTD gain of $23 million pretax ($18 million after tax) related to the sale of certain assets, tax effected using the applicable tax rates.

(c)

Current quarter and YTD charges of $118 million and $217 million pretax, respectively, ($90 million and $164 million after tax, respectively) related to the impairment of certain assets, restructuring, and legal and pension settlements, tax effected using the applicable tax rates. Prior quarter and YTD charges of $16 million and $57 million pretax, respectively ($12 million and $44 million after tax, respectively), related to the impairment of certain assets and restructuring, tax effected using the applicable tax rates.

(d)

Prior quarter and YTD early debt repayment expenses of $14 million pretax ($11 million after tax) related to the make-whole call provisions on a bond, tax effected using the Company’s U.S. income tax rate.

(e)

Current quarter and YTD gain on debt conversion option of $30 million and $10 million pretax, respectively, ($30 million and $10 million after tax, respectively), related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020, tax effected using the applicable tax rate.

(f)

Tax adjustment due to certain discrete items totaling $1 million in the current quarter and YTD and $1 million and $8 million in the prior quarter and YTD, respectively.

Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described above. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described above. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item.

 

Adjusted Return on Invested Capital

A non-GAAP financial measure

(unaudited)

 

Adjusted ROIC Earnings (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Four Quarters

 

Quarter Ended

 

Ended

 

Sep. 30, 2020

 

Dec. 31, 2020

 

Mar. 31, 2021

 

June 30, 2021

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

Net earnings attributable to ADM

$

225

 

 

$

687

 

 

$

689

 

 

$

712

 

 

$

2,313

 

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense

100

 

 

69

 

 

87

 

 

40

 

 

296

 

Other adjustments

355

 

 

1

 

 

99

 

 

95

 

 

550

 

Total adjustments

455

 

 

70

 

 

186

 

 

135

 

 

846

 

Tax on adjustments

(120)

 

 

(22)

 

 

(45)

 

 

(32)

 

 

(219)

 

Net adjustments

335

 

 

48

 

 

141

 

 

103

 

 

627

 

Total Adjusted ROIC Earnings

$

560

 

 

$

735

 

 

$

830

 

 

$

815

 

 

$

2,940

 

 

 

 

 

 

 

 

 

 

 

Adjusted Invested Capital (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Trailing Four

 

Sep. 30, 2020

 

Dec. 31, 2020

 

Mar. 31, 2021

 

June 30, 2021

 

Quarter Average

 

 

 

 

 

 

 

 

 

 

Equity (1)

$

19,322

 

 

$

20,000

 

 

$

20,841

 

 

$

21,582

 

 

$

20,436

 

+ Interest-bearing liabilities (2)

8,141

 

 

9,937

 

 

11,208

 

 

9,729

 

 

9,754

 

Other adjustments

259

 

 

(5)

 

 

74

 

 

72

 

 

100

 

Total Adjusted Invested Capital

$

27,722

 

 

$

29,932

 

 

$

32,123

 

 

$

31,383

 

 

$

30,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Return on Invested Capital

 

 

 

 

 

 

 

9.7

%

(1) Excludes noncontrolling interests

(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt

Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities adjusted for the after-tax effect of specified items. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)

A non-GAAP financial measure

(unaudited)

 

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended June 30, 2021.

 

 

 

 

 

 

 

 

 

Four Quarters

 

Quarter Ended

 

Ended

 

Sep. 30, 2020

 

Dec. 31, 2020

 

Mar. 31, 2021

 

June 30, 2021

 

June 30, 2021

 

 

 

 

 

(in millions)

 

 

 

 

Earnings before income taxes

$

200

 

 

$

756

 

 

$

824

 

 

$

825

 

 

$

2,605

 

Interest expense

100

 

 

69

 

 

87

 

 

40

 

 

296

 

Depreciation and amortization

238

 

 

249

 

 

249

 

 

243

 

 

979

 

Losses (gains) on sales of assets and businesses

(57)

 

 

(10)

 

 

 

 

(22)

 

 

(89)

 

Asset impairment, exit, restructuring, and settlement charges

8

 

 

27

 

 

99

 

 

118

 

 

252

 

Railroad maintenance expense

28

 

 

37

 

 

 

 

3

 

 

68

 

Loss (gain) on debt extinguishment

396

 

 

(1)

 

 

 

 

 

 

395

 

Expenses related to acquisitions

 

 

4

 

 

 

 

 

 

4

 

Adjusted EBITDA

$

913

 

 

$

1,131

 

 

$

1,259

 

 

$

1,207

 

 

$

4,510

 

 

 

 

 

 

 

 

 

 

Four Quarters

 

Quarter Ended

 

Ended

 

Sep. 30, 2020

 

Dec. 31, 2020

 

Mar. 31, 2021

 

June 30, 2021

 

June 30, 2021

 

 

 

 

 

(in millions)

 

 

 

 

Ag Services and Oilseeds

$

527

 

 

$

926

 

 

$

871

 

 

$

661

 

 

$

2,985

 

Carbohydrate Solutions

323

 

 

284

 

 

342

 

 

467

 

 

1,416

 

Nutrition

201

 

 

185

 

 

209

 

 

253

 

 

848

 

Other Business

21

 

 

(14)

 

 

11

 

 

7

 

 

25

 

Corporate

(159)

 

 

(250)

 

 

(174)

 

 

(181)

 

 

(764)

 

Adjusted EBITDA

$

913

 

 

$

1,131

 

 

$

1,259

 

 

$

1,207

 

 

$

4,510

 

Adjusted EBITDA is defined as earnings before taxes, interest, and 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 and depreciation and amortization to earnings before income taxes. Management believes that adjusted EBITDA is a useful measure of the Company’s performance because it provides investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to earnings before income taxes, the most directly comparable GAAP financial measure.

Media Relations
Jackie Anderson
312-634-8484

Investor Relations
Vikram Luthar
312-634-8119

Source: ADM