ADM Reports Third Quarter Earnings of $0.40 per Share, $0.89 per Share on an Adjusted Basis
• Net earnings of
• Outstanding results, great execution in all three businesses
• Continued focus on Readiness to drive growth, innovation, sustainability
“We delivered an outstanding quarter, and I am proud of our team’s continued great performance,” said Chairman and CEO
“Across the enterprise,
“From our Strive 35 sustainability goals, to our partnership with
Third Quarter 2020 Highlights
(Amounts in millions except per share amounts) |
2020 |
|
2019 |
|||||
Earnings per share (as reported) |
$ |
0.40 |
|
|
$ |
0.72 |
|
|
Adjusted earnings per share1 |
$ |
0.89 |
|
|
$ |
0.77 |
|
|
|
|
|
|
|||||
Segment operating profit |
$ |
904 |
|
|
$ |
758 |
|
|
Adjusted segment operating profit1 |
$ |
849 |
|
|
$ |
764 |
|
|
Ag Services and Oilseeds |
436 |
|
|
417 |
|
|||
Carbohydrate Solutions |
246 |
|
|
182 |
|
|||
Nutrition |
147 |
|
|
118 |
|
|||
Other Business |
20 |
|
|
47 |
|
-
EPS as reported of
$0.40 includes a$0.53 per share charge related to early debt retirement, a$0.03 per share charge related to the mark-to-market adjustment of the exchangeable bond issued inAugust 2020 , a$0.10 per share credit related to the gain on sale of Wilmar shares and certain assets, and other charges totaling$0.03 per share. Adjusted EPS, which excludes these items, was$0.89 .1
1 Non-GAAP financial measures; see pages 5, 10, 11 and 13 for explanations and reconciliations, including after-tax amounts.
Results of Operations
Ag Services & Oilseeds
results were higher than the third quarter of 2019. Both Ag Services and Crushing saw expanding margins during the quarter, resulting in approximately
-
Ag Services executed extremely well to capitalize on strong North American industry export margins and volumes. Results were lower in
South America , as the pace of Brazilian farmer selling slowed as expected following the aggressive selling in the first half of the year. Global Trade’s continued focus on serving customers contributed significantly to results, as did a$54 million settlement related to 2019 U.S. high water insurance claims. Negative timing impacts of almost$80 million led to lower overall results versus the prior year.
-
In Crushing, strong execution in an environment of tighter soybean supplies and solid global demand for meal and oil supported improved execution margins in
North and South America , partially offset by lower year-over-year margins in EMEAI. Negative timing impacts of approximately$75 million versus a gain of approximately$50 million recognized in the prior-year quarter led to lower year-over-year results.
-
Refined Products and Other delivered significantly higher year-over-year results, driven by improved biodiesel margins around the globe. Packaged oils in
South America also contributed.
- Equity earnings from Wilmar were substantially higher versus the prior-year period.
Carbohydrate Solutions results were significantly higher year over year.
-
Starches and Sweeteners subsegment results were substantially higher versus the third quarter of 2019. In
North America , balanced ethanol industry supply and demand drove improved wet mill ethanol margins versus the prior year. Demand for starches inNorth America was substantially stronger than earlier in the year, and higher than the prior-year quarter. Reduced food service demand affected sweetener and flour volumes, though retail demand for flour remained solid. Strong risk management and improved net corn costs contributed positively to results. EMEAI delivered improved results on higher demand and reduced manufacturing and raw material costs.
- In Vantage Corn Processors, distribution gains on wet mill ethanol, in addition to significantly improved year-over-year industry ethanol margins, helped to offset fixed costs from the two temporarily idled dry mills, driving higher year-over-year results. Increased volumes and margins of USP-grade industrial alcohol for hand sanitizer also supported improved performance.
Nutrition delivered its fifth consecutive quarter of 20-plus percent year-over-year profit growth.
-
Human Nutrition results were substantially higher versus the prior-year quarter, with improved results across the business portfolio. Flavors delivered another exceptional quarter, driven by increased revenue globally and improved mix and margins. Plant-based proteins helped drive a solid performance in Specialty Ingredients. Sales growth in probiotics, along with income from the
Spiber fermentation agreement, contributed to strong results in Health & Wellness.
- Animal Nutrition was higher year over year. Continued delivery of Neovia synergies, strength in livestock feed and year-over-year improvement in amino acids were partially offset by softer aquaculture feed demand as well as negative foreign currency impacts.
Other Business
results were lower, driven by lower
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
During the quarter, the company leveraged its strong cash position to re-balance its mix of long- and short-term debt, which will also reduce future interest payments, by economically retiring
In Corporate results, unallocated corporate costs for the quarter were higher year over year due primarily to variable performance-related compensation expense accruals, which were low in the prior year. Other charges increased due to railroad maintenance expenses, partially offset by improved foreign hedging results on intercompany funding and investment gains in
The effective tax rate for the quarter was a benefit of 13 percent compared to an expense of 19 percent in the prior year. The current quarter rate reflects the effects of the early debt retirement as well as the sale of Wilmar shares and increased year-over-year Wilmar earnings on the annual effective tax rate. The impact of
Note: Additional Facts and Explanations
Additional facts and explanations about results and industry environment can be found at the end of the
Conference Call Information
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.
About
At
Financial Tables Follow
Source: Corporate Release
Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP financial measure) |
||||||||||||||||||||||||
and Corporate Results |
||||||||||||||||||||||||
(unaudited) |
||||||||||||||||||||||||
|
Quarter ended |
|
|
Nine months ended |
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
(In millions) |
2020 |
2019 |
Change |
|
2020 |
2019 |
Change |
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Segment Operating Profit |
$ |
904 |
|
$ |
758 |
|
$ |
146 |
|
|
$ |
2,316 |
|
$ |
2,014 |
|
$ |
302 |
|
|||||
Specified items: |
|
|
|
|
|
|
|
|||||||||||||||||
(Gains) losses on sales of assets and businesses |
(57 |
) |
— |
|
(57 |
) |
|
(80 |
) |
(12 |
) |
(68 |
) |
|||||||||||
Impairment, restructuring, and settlement charges |
2 |
|
6 |
|
(4 |
) |
|
60 |
|
52 |
|
8 |
|
|||||||||||
Adjusted Segment Operating Profit |
$ |
849 |
|
$ |
764 |
|
$ |
85 |
|
|
$ |
2,296 |
|
$ |
2,054 |
|
$ |
242 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Ag Services and Oilseeds |
$ |
436 |
|
$ |
417 |
|
$ |
19 |
|
|
$ |
1,271 |
|
$ |
1,196 |
|
$ |
75 |
|
|||||
Ag Services |
147 |
|
161 |
|
(14 |
) |
|
482 |
|
326 |
|
156 |
|
|||||||||||
Crushing |
66 |
|
138 |
|
(72 |
) |
|
249 |
|
493 |
|
(244 |
) |
|||||||||||
Refined Products and Other |
127 |
|
80 |
|
47 |
|
|
286 |
|
223 |
|
63 |
|
|||||||||||
Wilmar |
96 |
|
38 |
|
58 |
|
|
254 |
|
154 |
|
100 |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Carbohydrate Solutions |
$ |
246 |
|
$ |
182 |
|
$ |
64 |
|
|
$ |
509 |
|
$ |
470 |
|
$ |
39 |
|
|||||
Starches and Sweeteners |
257 |
|
197 |
|
60 |
|
|
533 |
|
547 |
|
(14 |
) |
|||||||||||
Vantage Corn Processors |
(11 |
) |
(15 |
) |
4 |
|
|
(24 |
) |
(77 |
) |
53 |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Nutrition |
$ |
147 |
|
$ |
118 |
|
$ |
29 |
|
|
$ |
447 |
|
$ |
316 |
|
$ |
131 |
|
|||||
Human Nutrition |
128 |
|
102 |
|
26 |
|
|
372 |
|
293 |
|
79 |
|
|||||||||||
Animal Nutrition |
19 |
|
16 |
|
3 |
|
|
75 |
|
23 |
|
52 |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Other Business |
$ |
20 |
|
$ |
47 |
|
$ |
(27 |
) |
|
$ |
69 |
|
$ |
72 |
|
$ |
(3 |
) |
|||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Segment Operating Profit |
$ |
904 |
|
$ |
758 |
|
$ |
146 |
|
|
$ |
2,316 |
|
$ |
2,014 |
|
$ |
302 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Corporate Results |
$ |
(704 |
) |
$ |
(255 |
) |
$ |
(449 |
) |
|
$ |
(1,189 |
) |
$ |
(922 |
) |
$ |
(267 |
) |
|||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest expense - net |
(83 |
) |
(85 |
) |
2 |
|
|
(246 |
) |
(276 |
) |
30 |
|
|||||||||||
Unallocated corporate costs |
(196 |
) |
(139 |
) |
(57 |
) |
|
(579 |
) |
(454 |
) |
(125 |
) |
|||||||||||
Other charges |
(8 |
) |
— |
|
(8 |
) |
|
(25 |
) |
(18 |
) |
(7 |
) |
|||||||||||
Specified items: |
|
|
|
|
|
|
|
|||||||||||||||||
LIFO credit (charge) |
— |
|
16 |
|
(16 |
) |
|
91 |
|
(10 |
) |
101 |
|
|||||||||||
Early debt retirement charges |
(396 |
) |
— |
|
(396 |
) |
|
(410 |
) |
— |
|
(410 |
) |
|||||||||||
Expenses related to acquisitions |
— |
|
— |
|
— |
|
|
— |
|
(14 |
) |
14 |
|
|||||||||||
Loss on debt conversion option |
(15 |
) |
— |
|
(15 |
) |
|
(15 |
) |
— |
|
(15 |
) |
|||||||||||
Impairment and restructuring charges |
(6 |
) |
(47 |
) |
41 |
|
|
(5 |
) |
(150 |
) |
145 |
|
|||||||||||
Earnings Before Income Taxes |
$ |
200 |
|
$ |
503 |
|
$ |
(303 |
) |
|
$ |
1,127 |
|
$ |
1,092 |
|
$ |
35 |
|
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
Consolidated Statements of Earnings |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Quarter ended |
|
Nine months ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
(in millions, except per share amounts) |
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenues |
$ |
15,126 |
|
|
$ |
16,726 |
|
|
$ |
46,377 |
|
|
$ |
48,327 |
|
|
Cost of products sold (1) |
14,084 |
|
|
15,648 |
|
|
43,276 |
|
|
45,349 |
|
|||||
Gross profit |
1,042 |
|
|
1,078 |
|
|
3,101 |
|
|
2,978 |
|
|||||
Selling, general, and administrative expenses (2) |
636 |
|
|
578 |
|
|
1,938 |
|
|
1,839 |
|
|||||
Asset impairment, exit, and restructuring costs (3) |
4 |
|
|
53 |
|
|
61 |
|
|
200 |
|
|||||
Equity in (earnings) losses of unconsolidated affiliates |
(160 |
) |
|
(88 |
) |
|
(403 |
) |
|
(279 |
) |
|||||
Interest income |
(16 |
) |
|
(47 |
) |
|
(71 |
) |
|
(142 |
) |
|||||
Interest expense (4) |
100 |
|
|
97 |
|
|
270 |
|
|
307 |
|
|||||
Other (income) expense - net (5) |
278 |
|
|
(18 |
) |
|
179 |
|
|
(39 |
) |
|||||
Earnings before income taxes |
200 |
|
|
503 |
|
|
1,127 |
|
|
1,092 |
|
|||||
Income tax (benefit) expense (6) |
(26 |
) |
|
95 |
|
|
38 |
|
|
212 |
|
|||||
Net earnings including noncontrolling interests |
226 |
|
|
408 |
|
|
1,089 |
|
|
880 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Less: Net earnings (losses) attributable to noncontrolling interests |
1 |
|
|
1 |
|
|
4 |
|
|
5 |
|
|||||
Net earnings attributable to |
$ |
225 |
|
|
$ |
407 |
|
|
$ |
1,085 |
|
|
$ |
875 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per common share |
$ |
0.40 |
|
|
$ |
0.72 |
|
|
$ |
1.93 |
|
|
$ |
1.55 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Average diluted shares outstanding |
562 |
|
|
563 |
|
|
563 |
|
|
565 |
|
|||||
|
|
|
|
|
|
|
|
(1) Includes a charge (credit) related to changes in the Company’s LIFO reserves of
(2) Includes a settlement charge of
(3) Includes charges related to impairment of certain assets and restructuring of
(4) Includes charges related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in
(5) Includes current quarter and YTD gains related to the sale of Wilmar shares and certain other assets totaling
(6) Includes the tax benefit impact of the above specified items and tax discrete items totaling
Summary of Financial Condition |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
||||
|
|
(in millions) |
||||||
Net Investment In |
|
|
|
|
||||
Cash and cash equivalents (a) |
|
$ |
948 |
|
|
$ |
932 |
|
Short-term marketable securities (a) |
|
— |
|
|
26 |
|
||
Operating working capital (b) |
|
8,122 |
|
|
7,457 |
|
||
Property, plant, and equipment |
|
9,816 |
|
|
10,101 |
|
||
Investments in and advances to affiliates |
|
4,771 |
|
|
5,399 |
|
||
Long-term marketable securities |
|
9 |
|
|
10 |
|
||
|
|
5,275 |
|
|
5,401 |
|
||
Other non-current assets |
|
2,158 |
|
|
1,715 |
|
||
|
|
$ |
31,099 |
|
|
$ |
31,041 |
|
Financed By |
|
|
|
|
||||
Short-term debt (a) |
|
$ |
209 |
|
|
$ |
1,242 |
|
Long-term debt, including current maturities (a) |
|
7,924 |
|
|
7,646 |
|
||
Deferred liabilities |
|
3,540 |
|
|
3,205 |
|
||
Temporary equity |
|
85 |
|
|
53 |
|
||
Shareholders’ equity |
|
19,341 |
|
|
18,895 |
|
||
|
|
$ |
31,099 |
|
|
$ |
31,041 |
|
(a) |
Net debt is calculated as short-term debt plus long-term debt (including current maturities) less cash and cash equivalents and short-term marketable securities. |
|
(b) |
Current assets (excluding cash and cash equivalents and short-term marketable securities) less current liabilities (excluding short-term debt and current maturities of long-term debt). |
Summary of Cash Flows |
||||||||
(unaudited) |
||||||||
|
|
Nine months
|
||||||
|
|
|
||||||
|
|
2020 |
|
2019 |
||||
|
|
(in millions) |
||||||
Operating Activities |
|
|
|
|
||||
Net earnings |
|
$ |
1,089 |
|
|
$ |
880 |
|
Depreciation and amortization |
|
727 |
|
|
742 |
|
||
Asset impairment charges |
|
50 |
|
|
50 |
|
||
(Gains) losses on sales of assets |
|
(132 |
) |
|
(37 |
) |
||
Loss on debt extinguishment |
|
410 |
|
|
— |
|
||
Other - net |
|
151 |
|
|
65 |
|
||
Change in deferred consideration in securitized receivables(a) |
|
(4,603 |
) |
|
(5,714 |
) |
||
Other changes in operating assets and liabilities |
|
792 |
|
|
375 |
|
||
Total Operating Activities |
|
(1,516 |
) |
|
(3,639 |
) |
||
|
|
|
|
|
||||
Investing Activities |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
(558 |
) |
|
(566 |
) |
||
Net assets of businesses acquired |
|
(3 |
) |
|
(1,946 |
) |
||
Proceeds from sale of business/assets |
|
708 |
|
|
43 |
|
||
Investments in retained interest in securitized receivables(a) |
|
(2,121 |
) |
|
(3,813 |
) |
||
Proceeds from retained interest in securitized receivables(a) |
|
6,724 |
|
|
9,527 |
|
||
Marketable securities - net |
|
(1 |
) |
|
41 |
|
||
Investments in and advances to affiliates |
|
(5 |
) |
|
(12 |
) |
||
Other investing activities |
|
(16 |
) |
|
(23 |
) |
||
Total Investing Activities |
|
4,728 |
|
|
3,251 |
|
||
|
|
|
|
|
||||
Financing Activities |
|
|
|
|
||||
Long-term debt borrowings |
|
1,790 |
|
|
3 |
|
||
Long-term debt payments |
|
(2,032 |
) |
|
(615 |
) |
||
Net borrowings (payments) under lines of credit |
|
(993 |
) |
|
960 |
|
||
Share repurchases |
|
(117 |
) |
|
(150 |
) |
||
Cash dividends |
|
(607 |
) |
|
(592 |
) |
||
Other |
|
16 |
|
|
(36 |
) |
||
Total Financing Activities |
|
(1,943 |
) |
|
(430 |
) |
||
|
|
|
|
|
||||
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
1,269 |
|
|
(818 |
) |
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period |
|
2,990 |
|
|
3,843 |
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period |
|
$ |
4,259 |
|
|
$ |
3,025 |
|
(a) |
Cash flows related to the Company’s retained interest in securitized receivables as required by ASU 2016-15 which took effect |
Segment Operating Analysis |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Quarter ended |
|
Nine months ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
(in ‘000s metric tons) |
|||||||||||||||
Processed volumes (by commodity) |
|
|
|
|
|
|
|
|||||||||
Oilseeds |
8,970 |
|
|
9,062 |
|
|
27,236 |
|
|
27,002 |
|
|||||
Corn |
4,084 |
|
|
5,619 |
|
|
13,717 |
|
|
16,297 |
|
|||||
Total processed volumes |
13,054 |
|
|
14,681 |
|
|
40,953 |
|
|
43,299 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
|
Quarter ended |
|
Nine months ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
|
(in millions) |
|||||||||||||||
Revenues |
|
|
|
|
|
|
|
|||||||||
Ag Services and Oilseeds |
$ |
11,527 |
|
|
$ |
12,616 |
|
|
$ |
35,347 |
|
|
$ |
36,382 |
|
|
Carbohydrate Solutions |
2,064 |
|
|
2,565 |
|
|
6,394 |
|
|
7,409 |
|
|||||
Nutrition |
1,451 |
|
|
1,457 |
|
|
4,359 |
|
|
4,263 |
|
|||||
Other Business |
84 |
|
|
88 |
|
|
277 |
|
|
273 |
|
|||||
Total revenues |
$ |
15,126 |
|
|
$ |
16,726 |
|
|
$ |
46,377 |
|
|
$ |
48,327 |
|
Adjusted Earnings Per Share |
||||||||||||||||||||||||||
A non-GAAP financial measure |
||||||||||||||||||||||||||
(unaudited) |
||||||||||||||||||||||||||
|
Quarter ended |
|
Nine months ended |
|||||||||||||||||||||||
|
2020 |
2019 |
|
2020 |
2019 |
|||||||||||||||||||||
|
In millions |
Per share |
In millions |
Per share |
|
In millions |
Per share |
In millions |
Per share |
|||||||||||||||||
Net earnings and fully diluted EPS |
$ |
225 |
|
$ |
0.40 |
|
$ |
407 |
|
$ |
0.72 |
|
|
$ |
1,085 |
|
$ |
1.93 |
|
$ |
875 |
|
$ |
1.55 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
LIFO charge (credit) (a) |
— |
|
— |
|
(12 |
) |
(0.02 |
) |
|
(69 |
) |
(0.12 |
) |
8 |
|
0.01 |
|
|||||||||
Losses (gains) on sales of assets and businesses (b) |
(54 |
) |
(0.10 |
) |
— |
|
— |
|
|
(72 |
) |
(0.13 |
) |
(9 |
) |
(0.02 |
) |
|||||||||
Impairment, restructuring, and settlement charges (c) |
5 |
|
0.01 |
|
41 |
|
0.08 |
|
|
49 |
|
0.09 |
|
156 |
|
0.28 |
|
|||||||||
Expenses related to acquisitions (d) |
— |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
9 |
|
0.02 |
|
|||||||||
Early debt retirement charges (e) |
300 |
|
0.53 |
|
— |
|
— |
|
|
311 |
|
0.55 |
|
— |
|
— |
|
|||||||||
Loss on debt conversion option (f) |
15 |
|
0.03 |
|
— |
|
— |
|
|
15 |
|
0.03 |
|
— |
|
— |
|
|||||||||
Tax adjustment (g) |
8 |
|
0.02 |
|
(5 |
) |
(0.01 |
) |
|
16 |
|
0.03 |
|
(7 |
) |
(0.01 |
) |
|||||||||
Sub-total adjustments |
274 |
|
0.49 |
|
24 |
|
0.05 |
|
|
250 |
|
0.45 |
|
157 |
|
0.28 |
|
|||||||||
Adjusted net earnings and adjusted EPS |
$ |
499 |
|
$ |
0.89 |
|
$ |
431 |
|
$ |
0.77 |
|
|
$ |
1,335 |
|
$ |
2.38 |
|
$ |
1,032 |
|
$ |
1.83 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Current YTD changes in the Company’s LIFO reserves of |
(b) |
|
Current quarter and YTD gain of |
(c) |
Current quarter and YTD charges of |
|
(d) |
Prior YTD acquisition expenses of |
|
(e) |
Current quarter and YTD early debt retirement charges of |
|
(f) |
Current quarter and YTD loss on debt conversion option of |
|
(g) |
Tax adjustment totaling |
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 |
||||||||||||||||||||
A non-GAAP financial measure |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
Adjusted ROIC Earnings (in millions) |
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
Four Quarters |
||||||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net earnings attributable to |
$ |
504 |
|
|
$ |
391 |
|
|
$ |
469 |
|
|
$ |
225 |
|
|
$ |
1,589 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense |
95 |
|
|
83 |
|
|
87 |
|
|
100 |
|
|
365 |
|
||||||
LIFO |
27 |
|
|
(91 |
) |
|
— |
|
|
— |
|
|
(64 |
) |
||||||
Other adjustments |
253 |
|
|
48 |
|
|
8 |
|
|
355 |
|
|
664 |
|
||||||
Total adjustments |
375 |
|
|
40 |
|
|
95 |
|
|
455 |
|
|
965 |
|
||||||
Tax on adjustments |
(8 |
) |
|
(7 |
) |
|
(23 |
) |
|
(120 |
) |
|
(158 |
) |
||||||
Net adjustments |
367 |
|
|
33 |
|
|
72 |
|
|
335 |
|
|
807 |
|
||||||
Total Adjusted ROIC Earnings |
$ |
871 |
|
|
$ |
424 |
|
|
$ |
541 |
|
|
$ |
560 |
|
|
$ |
2,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
Quarter Ended |
|
Trailing Four |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Quarter Average |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity (1) |
$ |
19,208 |
|
|
$ |
18,952 |
|
|
$ |
19,293 |
|
|
$ |
19,322 |
|
|
$ |
19,194 |
|
|
+ Interest-bearing liabilities (2) |
8,891 |
|
|
12,512 |
|
|
9,181 |
|
|
8,141 |
|
|
9,681 |
|
||||||
+ LIFO adjustment (net of tax) |
69 |
|
|
— |
|
|
— |
|
|
— |
|
|
17 |
|
||||||
Other adjustments |
274 |
|
|
39 |
|
|
6 |
|
|
259 |
|
|
145 |
|
||||||
|
$ |
28,442 |
|
|
$ |
31,503 |
|
|
$ |
28,480 |
|
|
$ |
27,722 |
|
|
$ |
29,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted Return on |
|
|
|
|
|
|
|
8.3 |
% |
(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, changes in the LIFO reserve and other 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 the LIFO reserve, and other specified items. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of LIFO inventory reserves and other 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
Four Quarters |
||||||||||||||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
(in millions) |
|
|
|
|
|||||||||||
Earnings before income taxes |
$ |
496 |
|
|
$ |
375 |
|
|
$ |
552 |
|
|
$ |
200 |
|
|
$ |
1,623 |
|
|
Interest expense |
95 |
|
|
83 |
|
|
87 |
|
|
100 |
|
|
365 |
|
||||||
Depreciation and amortization |
251 |
|
|
245 |
|
|
244 |
|
|
238 |
|
|
978 |
|
||||||
LIFO charge (credit) |
27 |
|
|
(91 |
) |
|
— |
|
|
— |
|
|
(64 |
) |
||||||
Losses (gains) on sales of assets and businesses |
101 |
|
|
— |
|
|
(23 |
) |
|
(57 |
) |
|
21 |
|
||||||
Asset impairment and restructuring charges |
103 |
|
|
41 |
|
|
16 |
|
|
8 |
|
|
168 |
|
||||||
Railroad maintenance expense |
51 |
|
|
73 |
|
|
— |
|
|
28 |
|
|
152 |
|
||||||
Early debt retirement charges |
— |
|
|
— |
|
|
14 |
|
|
396 |
|
|
410 |
|
||||||
Expenses related to acquisitions |
3 |
|
|
— |
|
|
— |
|
|
— |
|
|
3 |
|
||||||
Adjusted EBITDA |
$ |
1,127 |
|
|
$ |
726 |
|
|
$ |
890 |
|
|
$ |
913 |
|
|
$ |
3,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Four Quarters |
|||||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
(in millions) |
|
|
|
|
|||||||||||
Ag Services and Oilseeds |
$ |
833 |
|
|
$ |
514 |
|
|
$ |
502 |
|
|
$ |
527 |
|
|
$ |
2,376 |
|
|
Carbohydrate Solutions |
258 |
|
|
148 |
|
|
274 |
|
|
323 |
|
|
1,003 |
|
||||||
Nutrition |
160 |
|
|
199 |
|
|
217 |
|
|
201 |
|
|
777 |
|
||||||
Other Business |
20 |
|
|
15 |
|
|
39 |
|
|
21 |
|
|
95 |
|
||||||
Corporate |
(144 |
) |
|
(150 |
) |
|
(142 |
) |
|
(159 |
) |
|
(595 |
) |
||||||
Adjusted EBITDA |
$ |
1,127 |
|
|
$ |
726 |
|
|
$ |
890 |
|
|
$ |
913 |
|
|
$ |
3,656 |
|
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
|
|
|
|
|
|
|
|
|
Four Quarters |
|||||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
(in millions) |
|
|
|
|
|||||||||||
Earnings before income taxes |
$ |
312 |
|
|
$ |
315 |
|
|
$ |
274 |
|
|
$ |
503 |
|
|
$ |
1,404 |
|
|
Interest expense |
97 |
|
|
101 |
|
|
109 |
|
|
97 |
|
|
404 |
|
||||||
Depreciation and amortization |
235 |
|
|
245 |
|
|
248 |
|
|
249 |
|
|
977 |
|
||||||
LIFO charge (credit) |
(4 |
) |
|
1 |
|
|
25 |
|
|
(16 |
) |
|
6 |
|
||||||
Losses (gains) on sales of assets and businesses |
8 |
|
|
(12 |
) |
|
— |
|
|
— |
|
|
(4 |
) |
||||||
Asset impairment, restructuring, & settlement charges |
250 |
|
|
11 |
|
|
138 |
|
|
53 |
|
|
452 |
|
||||||
Expenses related to acquisitions |
12 |
|
|
14 |
|
|
— |
|
|
— |
|
|
26 |
|
||||||
Adjusted EBITDA |
$ |
910 |
|
|
$ |
675 |
|
|
$ |
794 |
|
|
$ |
886 |
|
|
$ |
3,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Four Quarters |
|||||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
(in millions) |
|
|
|
|
|||||||||||
Ag Services and Oilseeds |
$ |
711 |
|
|
$ |
510 |
|
|
$ |
457 |
|
|
$ |
511 |
|
|
$ |
2,189 |
|
|
Carbohydrate Solutions |
281 |
|
|
178 |
|
|
274 |
|
|
264 |
|
|
997 |
|
||||||
Nutrition |
99 |
|
|
134 |
|
|
173 |
|
|
175 |
|
|
581 |
|
||||||
Other Business |
(3 |
) |
|
24 |
|
|
18 |
|
|
55 |
|
|
94 |
|
||||||
Corporate |
(178 |
) |
|
(171 |
) |
|
(128 |
) |
|
(119 |
) |
|
(596 |
) |
||||||
Adjusted EBITDA |
$ |
910 |
|
|
$ |
675 |
|
|
$ |
794 |
|
|
$ |
886 |
|
|
$ |
3,265 |
|
|
|
|
|
|
|
|
|
|
|
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006066/en/
Media Relations
312-634-8484
Investor Relations
312-634-8457
Source:
Media Relations
Jackie Anderson
312-634-8484
Investor Relations
Victoria de la Huerga
312-634-8457