Second Quarter 2020 · 2020. 7. 29. · 4. Q2 2020 Financial Highlights (in millions except per...

Second Quarter 2020 Earnings Conference Call July30,2020

2Confidentialandproprietarybusinessinform

ationofADM.

Safe Harbor Statement

Someofourcommentsandmaterialsinthispresentationconstituteforward-lookingstatementsthatreflectmanagement’scurrentviewsandestimatesoffutureeconomiccircumstances,industryconditions,Companyperformanceandfinancialresults.

Thesestatementsandmaterialsarebasedonmanyassumptionsandfactorsthataresubjecttoriskanduncertainties.ADMhasprovidedadditionalinformationinitsreportsonfilewiththeSECconcerningassumptionsandfactorsthatcouldcauseactualresultstodiffermateriallyfromthoseinthispresentation,andyoushouldcarefullyreviewtheassumptionsandfactorsinourSECreports.

Totheextentpermittedunderapplicablelaw,ADMassumesnoobligationtoupdateanyforward-lookingstatementsasaresultofnewinformationorfutureevents.


ationofADM.

Q2 Accomplishments

• 1ADM:Launchedprocurementandcontractspendapplications

• Expandedsustainabilitygoals

• $50MinAS&Ocapitalreductioninitiatives,includingongoingglobaloriginationfootprintoptimization,exitfromtwoGPTNbusinesses

• ClosingLosAngelesflourmill• Temporarilyidledtwodrymills

• Continueddestinationmarketinggrowth,extendingproductofferingsinAsia,LatinAmerica,Europe

• ExpandedproductionofhighqualityUSP-gradeindustrialethanol

• PlantPlusFoodsTMjointventurewithMarfrig

• Totalof$1Binrun-ratebenefitssinceinception;ontracktoexceed$1.2Bgoal


ationofADM.

Q2 2020 Financial Highlights (inmillionsexceptpersharedataandpercentages)

QuarterEndedJune30

2020 2019 Change

Adjustedearningspershare(1)(2) $0.85 $0.60 $0.25

Totalsegmentoperatingprofit(unadjusted)(3) $813 $645 $168

Adjustedsegmentoperatingprofit(1)(3) $804 $682 $122

Trailing4QaverageadjustedROIC(1) 8.1% 6.9% 115bps

Trailing4QadjustedEBITDA(1)(4) $3,629 $3,314 $315

AnnualadjustedEVA(1) $683 $42 $641

Quarterlyeffectivetaxrate 14% 13%

SixMonthsEndedJune30

2020 2019 Change

Cashfromoperationsbeforeworkingcapitalchanges $1,611 $1,016 $595

Purchasesofproperty,plant,andequipment $360 $383 $(23)

Returnofcapitaltoshareholders $517 $489 $28

Increase(decrease)incash,cashequivalents,restrictedcash,andrestrictedcashequivalents $1,509 $(1,094) $2,603

Netdebttototalcapitalratio(asofJune30) 29% 31%

(1)Non-GAAPmeasures-seenotesonpage26(2)Seeearningspershare,themostdirectlycomparableGAAPmeasure,onpage20(3)Seesegmentoperatingprofitasreportedonpage16(4)Seeearningsbeforeincometaxes,themostdirectlycomparableGAAPmeasure,onpages23and24


ationofADM.

Q2 Other and Corporate ResultsOtherBusiness

Q22019 Q32019 Q42019 Q12020 Q22020$(371) $(255) $(438) $(224) $(261)

• Otherresultsuponimprovedcaptiveinsuranceperformance

• Unallocatedcorporatehigheroncompensationaccrual,centralizationactivities

• TotalCorporateimprovedonforeigncurrencyhedgingresults,improvedinvestmentperformance,partiallyoffsetbydebtextinguishmentexpenses

Unallocatedcorporate Interestexpense OtherchargesLIFO Otherspecifieditems

Q22019 Q32019 Q42019 Q12020 Q22020$11 $47 $13 $11 $38

CorporateCharges

(Inmillions)


ationofADM.

AgServices Crushing RefinedProductsandOther Wilmar

Q22019 Q32019 Q42019 Q12020 Q22020$362 $417 $739 $422 $413

AS&O: Strong Performance, Led by Ag Services

• AgServicessubstantiallyhigheronSouthAmericaorigination,globaltraderesults

• LowerCrushing;strongglobalvolumes,goodresultsinSAandEMEAIoffsetbysoftermarginenvironmentinNA

• RPOuponimprovedbiodieselmarginsinNAandSA,refinedandpackagedoilsinSA

• WilmarlowerYOY

Segmentoperatingprofit(inmillions)


ationofADM.

Q22019 Q32019 Q42019 Q12020 Q22020$192 $182 $174 $68 $195

Carbohydrate Solutions: Similar to Prior Year

• S&Sdownonlowerfoodservicedemand,mark-to-marketlossesoncornoil,partiallyoffsetbylowerrawmaterialcosts,positiveriskmanagementandcontinuedstrengthinwheatmilling

• VCPYOYresultshigheronfavorableriskmanagementoninventorypositionsandstrongdemandforindustrialethanol;lowerindustryproduction—includingtwoidledADMdrymills—helpedtoright-sizestocks


VantageCornProcessors(VCP) StarchesandSweeteners


ationofADM.

Nutrition: Significant Growth Continues

• HumanNutritionsubstantiallyhigher;favorablesalesmixandmarginexpansionforNAflavors;meetingstrongdemandforplant-basedproteins,probiotics

• AnimalNutritionuponNeoviasynergies,gooddemandinpet


Q22019 Q32019 Q42019 Q12020 Q22020$117 $118 $102 $142 $158

HumanNutrition AnimalNutrition


ationofADM.

Strategy is Powering Results


ationofADM.

Upcoming Investor Events(Alleventsvirtual)

BarclaysGlobalConsumerStaplesConferenceSeptember8

J.P.MorganAllStarsConferenceSeptember15-16

BerenbergFoodIngredients&ChemicalsConferenceSeptember16

Additional Facts and Explanations


ationofADM.

Industry Environment

Corn

US 85% 94% 95% 7% 12% 13%

Brazil 50% 45% 44% n/a n/a n/a

Soybeans

US 83% 96% 93% 9% 15% 5%

Brazil 93% 75% 71% 40% 12% 15%

Argentina 37% 40% 34% n/a n/a n/a

Soybeans

US $15-$25 $20-$25

Europe $25-$30 $25-$35

BrazilExp:$0-$5Dom:$15-$25

Exp:$15-$25Dom:$15-$25

Argentina ∼ $5 $7-$12

China $25-$30 $30-$35

FrontMonthBoardCrush ~$27 ~$30

Canola/Rapeseed

NorthAmerica $25-$40 $20-$25

Europe $20-$25 $20-$30AverageIndustryEthanolEBITDAMargins/gal3

$(0.15) $(0.23) $(0.07)

AverageIndustryDailyProductionVolume(thousandsofbarrels/day)4

721 1,008 1,052

U.S.EthanolInventory(thousandsofbarrels)4

20,620 25,717 22,844

1ADMestimates2ADMestimates;reflectsmostcurrentmodelassumptionsanddataregardingcropproduction,quality,storage,andmarketinginformation3Bloomberg4EIAWeeklyPetroleumStatusReport

SpotGrossCrushMargins1

CurrentUS$/MT

Q1CallUS$/MT

U.S.EthanolMargins/Production Q220 Q120 Q219

FarmerSelling2

Current 5-YearAverage

PriorYear

2019/2020CropYear

Current 5-YearAverage

PriorYear

2020/2021CropYear


ationofADM.

ADM Additional Information

NutritionGrowth

Growth Growth

Q220 vs.Q219 YTD20 vs.YTD19

GAAPRevenues

HumanNutrition $723M —% $1,442 3%

AnimalNutrition $714M (10)% $1,466 4%

Q12020 ~$80M

Q22020 ~$95M

CumulativeCrushDeferredTimingGains/(Losses)

ProcessedVolumesbyYear(000sofmetrictons)

CalendarYear

2018 2019Oilseeds 36,308 36,271

Corn 22,343 22,079

58,651 58,350

ProcessedVolumesbyQuarter(000sofmetrictons)

CY19 CY20

Q1 Q2 Q3 Q4 Q1 Q2

Oilseeds 9,167 8,773 9,062 9,269 9,163 9,103

Corn 5,132 5,546 5,619 5,782 5,534 4,099

14,299 14,319 14,681 15,051 14,697 13,202

AsofJune30,2020,approximately$95Mofdeferredmark-to-markettiminggainsareexpectedtoberecognizedinsubsequentquarters

(1)Non-GAAPmeasure-seenotesonpage26(2)Seeearningsbeforeincometaxes,themostdirectlycomparableGAAPmeasure,onpages23and24

Trailing4-Quarters

Q220 Q219 Q220 Q219AdjustedEBITDA(1)(2) $ 890 $ 794 $ 3,629 $ 3,314

AgServicesandOilseeds $ 502 $ 457 $ 2,360 $ 2,258CarbohydrateSolutions $ 274 $ 274 $ 944 $ 1,097Nutrition $ 217 $ 173 $ 751 $ 509OtherBusiness $ 39 $ 18 $ 129 $ 76Corporate $ (142)$ (128) $ (555)$ (626)

AdjustedEBITDA(1)(2)bySegment(inmillions)

14

Financial Appendix


ationofADM.

Q2 Adjusted Segment OP $804 millionAdjustedsegmentoperatingprofit(1,2)(inmillions)Excludesspecifieditems

*Segmentoperatingprofitasreportedwas$813M

(1)Non-GAAPmeasure-seenotesonpage26;(2)Adjustedsegmentoperatingprofitequalstotalsegmentoperatingprofitexcludingspecifieditemsandtimingeffects.

AgServicesandOilseeds CarbohydrateSolutions Nutrition OtherBusiness

Q22019 Q32019 Q42019 Q12020 Q22020$682 $764 $1,028 $643 $804*


ationofADM.

Segment Operating Profit and Corporate ResultsQuarterEndedJune30

(Amountsinmillions) 2020 2019 Change

TotalSegmentOperatingProfit(1) $ 813 $ 645 $ 168

Specifieditems:(Gains)lossonsalesofassetsandbusinesses (23) — (23)

Impairment,restructuring,andsettlementcharges 14 37 (23)

AdjustedSegmentOperatingProfit(1)(2) $ 804 $ 682 $ 122

AgServicesandOilseeds $ 413 $ 362 $ 51

AgServices 171 90 81

Crushing 113 139 (26)

RefinedProductsandOther 78 71 7

Wilmar 51 62 (11)

CarbohydrateSolutions $ 195 $ 192 $ 3

StarchesandSweeteners 177 215 (38)

VantageCornProcessors 18 (23) 41

Nutrition $ 158 $ 117 $ 41

HumanNutrition 131 103 28

AnimalNutrition 27 14 13

OtherBusiness $ 38 $ 11 $ 27

TotalSegmentOperatingProfit(1) $ 813 $ 645 $ 168

Corporate $ (261) $ (371) $ 110

Interestexpense–net (86) (101) 15

Unallocatedcorporatecosts (194) (132) (62)

Othercharges 35 (12) 47

Specifieditems:LIFOcredit(charge) — (25) 25

Earlydebtrepaymentexpenses (14) — (14)

Impairmentandrestructuringcharges (2) (101) 99

EarningsBeforeIncomeTaxes $ 552 $ 274 $ 278



ationofADM.

Balance Sheet Highlights(Amountsinmillions) June30,2020 June30,2019Cash(1) $1,203 $853Netproperty,plant,andequipment 9,833 10,245Operatingworkingcapital(2) 8,540 7,804-Totalinventories 7,626 8,294

Totaldebt 9,173 9,412-CPoutstanding — 1,479

Shareholders’equity 19,311 18,979

Memos:AvailablecreditcapacityJune30-CP $5.0bil $3.5bil-Other $4.7bil $2.3bil

Readilymarketableinventory $4.6bil $4.9bil

(1)Cash=cashandcashequivalentsandshort-termmarketablesecurities(2)Currentassets(excludingcashandcashequivalentsandshort-termmarketablesecuritieslesscurrentliabilities(excludingshort-termdebtandcurrentmaturitiesoflong-termdebt)


ationofADM.

Cash Flow HighlightsSixMonthsEndedJune30

(Amountsinmillions) 2020 2019Cashfromoperationsbeforeworkingcapitalchanges $1,611 $1,016Changesinworkingcapital(1) 409 (116)Purchasesofproperty,plant,andequipment (360) (383)Netassetsofbusinessesacquired (3) (1,944)Sub-total 1,657 (1,427)

Marketablesecuritiesinvestment (3) 65Otherinvestingactivities 83 (5)Debtincrease/(decrease) 286 804Dividends (405) (395)Stockbuyback (112) (94)Other 3 (42)Increase(decrease)incash,cashequivalents,restrictedcash,andrestrictedcashequivalents $1,509 ($1,094)

(1)Includesthechangeindeferredconsiderationof($2,456million)in2020and($3,613million)in2019andthenetproceedsfromretainedinterestinsecuritizedreceivablesof$2,456millionin2020and$3,613millionin2019whicharepresentedseparatelyasoperatingactivitiesandinvestingactivities,respectively,inthestatementofcashflowsasrequiredbyASU2016-15whichtookeffect1/1/18.


ationofADM.

GAAP Statement of Earnings Summary

QuarterEndedJune30

2020 2019 Change

Revenues $16,281 $16,297 ($16)

Grossprofit 1,108 972 136

Selling,generalandadministrativeexpenses 638 602 36

Assetimpairment,exit,andrestructuringcharges 16 136 (120)

Equityin(earnings)lossesofunconsolidatedaffiliates (103) (90) (13)

Interestincome (15) (46) 31

Interestexpense 87 109 (22)

Other(income)expense–net (67) (13) (54)

Earningsbeforeincometaxes 552 274 278

Incometax(benefit)expense 80 36 44

Netearningsincludingnoncontrollinginterests 472 238 234

Less:Netearnings(losses)attributabletononcontrollinginterests 3 3 —

NetearningsattributabletoADM $ 469 $ 235 $ 234

Earningspershare(fullydiluted) $ 0.84 $ 0.42 $ 0.42

(Amountsinmillionsexceptpersharedata)


ationofADM.

Adjusted Earnings Per Share (EPS)(Amountsinmillionsexceptpersharedata)

QuarterEndedJune302020 2019

Pre-tax After-tax Pershare Pre-tax After-tax PershareEarningsandEPS(fullydiluted)asreported $ 552 $ 469 $ 0.84 $ 274 $ 235 $ 0.42

AdjustmentsLIFO(credit)/charge — — — 25 19 0.03(Gains)lossonsalesofassets (23) (18) (0.03) — — —Impairment,restructuring,andsettlementcharges 16 12 0.02 138 105 0.18Earlydebtrepaymentexpenses 14 11 0.02 — — —Taxadjustment 1 1 — (19) (19) (0.03)AdjustedEarningsandadjustedEPS(non-GAAP)(1) $ 560 $ 475 $ 0.85 $ 418 $ 340 $ 0.60

(1)Non-GAAPmeasure-seenotesonpage26


ationofADM.

ROIC versus WACCLT ROIC Objective: 10%

(1)Non-GAAPmeasure-seenotesonpage26(2)AdjustedforLIFOandspecifieditems-seenotesonpage26(3)AdjustedforLIFO-seenotesonpage26

Trailing4QAverageROIC Trailing4QAverageAdjustedROIC

Q2CY16

Q2CY17

Q2CY18

Q2CY19

Q2CY20

4%

5%

6%

7%

8%

9%

10%

11%

Q2CY20

Trailing4QAverageAdjustedROIC(1)(2) 8.1 %

AnnualWACC 5.75 %

Trailing4QAverageAdjustedEVA $683M

Long-TermWACC 7.0 %

Trailing4QAverageROIC(1)(3) 6.9 %


ationofADM.

Return on Invested Capital AdjustedROICEarnings(1)

(Amountsinmillions) FourthQuarters

QuarterEnded Ended

Sep.30,2019 Dec.31,2019 Mar.31,2020 June30,2020 June30,2020

NetearningsattributabletoADM $ 407 $ 504 $ 391 $ 469 $ 1,771

Adjustments

Interestexpense 97 95 83 87 362

LIFOcharge(credit) (16) 27 (91) — (80)

Otheradjustments 48 253 48 8 357

Totaladjustments 129 375 40 95 639

Taxonadjustments (32) (8) (7) (23) (70)

Netadjustments 97 367 33 72 569

TotalAdjustedROICEarnings $ 504 $ 871 $ 424 $ 541 $ 2,340

AdjustedInvestedCapital(1)

(Amountsinmillions) Trailing

QuarterEnded FourQuarter

Sep.30,2019 Dec.31,2019 Mar.31,2020 June30,2020 Average

Equity(2) $ 18,873 $ 19,208 $ 18,952 $ 19,293 $ 19,082

+ Interest-bearingliabilities(3) 8,891 8,891 12,512 9,181 9,869

+ LIFOadjustment(netoftax) 49 69 — — 30

+ Otheradjustments(netoftax) 36 274 39 6 89

TotalAdjustedInvestedCapital $ 27,849 $ 28,442 $ 31,503 $ 28,480 $ 29,070

(1)Non-GAAPmeasure–seenotesonpage26(2)Excludesnoncontrollinginterests(3)Includesshort-termdebt,currentmaturitiesoflong-termdebt,financeleaseobligations,andlong-termdebt


ationofADM.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1)

Four Quarters Ended June 30, 2020

AdjustedEBITDA(1)


QuarterEnded Ended


Earningsbeforeincometaxes $ 503 $ 496 $ 375 $ 552 $ 1,926


Depreciationamortization 249 251 245 244 989

LIFOcharge(credit) (16) 27 (91) — (80)

Losses(gains)onsalesofassetsandbusinesses — 101 — (23) 78

Assetimpairment,exit,andrestructuringcharges 53 103 41 16 213

Railroadmaintenanceexpense — 51 73 — 124

Earlydebtrepaymentexpenses — — — 14 14

Expensesrelatedtoacquisitions — 3 — — 3

AdjustedEBITDA $ 886 $ 1,127 $ 726 $ 890 $ 3,629

AdjustedEBITDA(1)bySegment

(Amountsinmillions) FourQuarters

QuarterEnded Ended


AgServicesandOilseeds $ 511 $ 833 $ 514 $ 502 $ 2,360

CarbohydrateSolutions 264 258 148 274 944

Nutrition 175 160 199 217 751

OtherBusiness 55 20 15 39 129

Corporate (119) (144) (150) (142) (555)

AdjustedEBITDA $ 886 $ 1,127 $ 726 $ 890 $ 3,629(1)Non-GAAPmeasure–seenotesonpage26


ationofADM.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1)

Four Quarters Ended June 30, 2019

AdjustedEBITDA(1)


QuarterEnded Ended

Sep.30,2018 Dec.31,2018 Mar.31,2019 Jun.30,2019 Jun.30,2019

Earningsbeforeincometaxes $ 632 $ 312 $ 315 $ 274 $ 1,533


Depreciationamortization 232 235 245 248 960

LIFOcharge(credit) 7 (4) 1 25 29

Losses(gains)onsalesofassetsandbusinesses (21) 8 (12) — (25)

Assetimpairment,exit,restructuring,andsettlementcharges 2 250 11 138 401

Expensesrelatedtoacquisitions (4) 12 14 — 22

AdjustedEBITDA $ 935 $ 910 $ 675 $ 794 $ 3,314

AdjustedEBITDA(1)bySegment

(Amountsinmillions) FourQuarters

QuarterEnded Ended

Sep.30,2018 Dec.31,2018 Mar.31,2019 Jun.30,2019 Jun.30,2019

AgServicesandOilseeds $ 580 $ 711 $ 510 $ 457 $ 2,258

CarbohydrateSolutions 364 281 178 274 1,097

Nutrition 103 99 134 173 509

OtherBusiness 37 (3) 24 18 76

Corporate (149) (178) (171) (128) (626)

AdjustedEBITDA $ 935 $ 910 $ 675 $ 794 $ 3,314

(1)Non-GAAPmeasure–seenotesonpage26


ationofADM.

2019 Segment OP and Adjusted Segment OP(1,2) Comparatives with VCP in Carbohydrate Solutions (in millions)

Qtr.Ended Qtr.Ended Qtr.Ended Qtr.Ended YearEnded

Mar.31,2019 Jun.30,2019 Sep.30,2019 Dec.31,2019 Dec.31,2019

As As As As As As As As As As As As

Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated

SegmentOperatingProfit(1) SegmentOperatingProfit(1) $ 611 $ 611 $ 645 $ 645 $ 758 $ 758 $ 934 $ 934 $ 2,948 $ 2,948

Specifieditems: Specifieditems:

(Gains)lossesonsalesofassets/businesses (Gains)lossesonsalesofassets/businesses (12) (12) — — — — — — (12) (12)

Impairment,restructuring,andsettlementchargesImpairment,restructuring,andsettlementcharges 9 9 37 37 6 6 94 94 146 146

AdjustedSegmentOperatingProfit(1)(2) AdjustedSegmentOperatingProfit(1)(2) $ 608 $ 608 $ 682 $ 682 $ 764 $ 764 $ 1,028 $ 1,028 $ 3,082 $ 3,082

AgServicesandOilseeds AgServicesandOilseeds $ 417 $ 417 $ 362 $ 362 $ 417 $ 417 $ 739 $ 739 $ 1,935 $ 1,935

AgServices AgServices 75 75 90 90 161 161 176 176 502 502

Crushing Crushing 216 216 139 139 138 138 87 87 580 580

RefinedProductsandOther RefinedProductsandOther 72 72 71 71 80 80 363 363 586 586

Wilmar Wilmar 54 54 62 62 38 38 113 113 267 267

CarbohydrateSolutions CarbohydrateSolutions $ 96 $ 96 $ 192 $ 192 $ 182 $ 182 $ 174 $ 174 $ 644 $ 644

StarchesandSweeteners StarchesandSweeteners 170 135 218 215 207 197 208 206 803 753

Bioproducts VantageCornProcessors (74) (39) (26) (23) (25) (15) (34) (32) (159) (109)

Nutrition Nutrition $ 81 $ 81 $ 117 $ 117 $ 118 $ 118 $ 102 $ 102 $ 418 $ 418

WildFlavorsandSpecialtyIngredients HumanNutrition 88 88 103 103 102 102 83 83 376 376

AnimalNutrition AnimalNutrition (7) (7) 14 14 16 16 19 19 42 42

Other OtherBusiness $ 14 $ 14 $ 11 $ 11 $ 47 $ 47 $ 13 $ 13 $ 85 $ 85



ationofADM.

Notes: Non-GAAP ReconciliationTheCompanyusescertain“Non-GAAP”financialmeasuresasdefinedbytheSecuritiesandExchangeCommission.ThesearemeasuresofperformancenotdefinedbyaccountingprinciplesgenerallyacceptedintheUnitedStates,andshouldbeconsideredinadditionto,notinlieuof,GAAPreportedmeasures.

(1) AdjustednetearningsandAdjustedearningspershare(EPS)AdjustednetearningsreflectsADM’sreportednetearningsafterremovaloftheeffectonnetearningsofspecifieditemsasmorefullydescribedabove.AdjustedEPSreflectsADM’sfullydilutedEPSafterremovaloftheeffectonEPSasreportedofspecifieditemsasmorefullydescribedabove.ManagementbelievesthatAdjustednetearningsandAdjustedEPSareusefulmeasuresofADM’sperformancebecausetheyprovideinvestorsadditionalinformationaboutADM’soperationsallowingbetterevaluationofunderlyingbusinessperformanceandbetterperiod-to-periodcomparability.Thesenon-GAAPfinancialmeasuresarenotintendedtoreplaceorbealternativestonetearningsandEPSasreported,themostdirectlycomparableGAAPfinancialmeasures,oranyothermeasuresofoperatingresultsunderGAAP.Earningsamountsdescribedabovehavebeendividedbythecompany’sdilutedsharesoutstandingforeachrespectiveperiodinordertoarriveatanadjustedEPSamountforeachspecifieditem.

(2) SegmentoperatingprofitandadjustedsegmentoperatingprofitSegmentoperatingprofitisADM’sconsolidatedincomefromoperationsbeforeincometaxexcludingcorporateitems.Adjustedsegmentoperatingprofit,anon-GAAPmeasure,issegmentoperatingprofitexcludingspecifieditems.ManagementbelievesthatsegmentoperatingprofitandadjustedsegmentoperatingprofitareusefulmeasuresofADM’sperformancebecausetheyprovideinvestorsinformationaboutADM’sbusinessunitperformanceexcludingcorporateoverheadcostsaswellasspecifieditems.SegmentoperatingprofitandadjustedsegmentoperatingprofitarenotmeasuresofconsolidatedoperatingresultsunderU.S.GAAPandshouldnotbeconsideredalternativestoincomebeforeincometaxes,themostdirectlycomparableGAAPfinancialmeasure,oranyothermeasureofconsolidatedoperatingresultsunderU.S.GAAP.

(3) AdjustedReturnonInvestedCapital(ROIC)AdjustedROICisAdjustedROICearningsdividedbyadjustedinvestedcapital.AdjustedROICearningsisADM’snetearningsadjustedfortheaftertaxeffectsofinterestexpense,changesintheLIFOreserveandotherspecifieditems.AdjustedinvestedcapitalisthesumofADM’sequity(excludingnoncontrollinginterests)andinterest-bearingliabilitiesadjustedfortheaftertaxeffectoftheLIFOreserve,andotherspecifieditems.ManagementbelievesAdjustedROICisausefulfinancialmeasurebecauseitprovidesinvestorsinformationaboutADM’sreturnsexcludingtheimpactsofLIFOinventoryreservesandotherspecifieditemsandincreasesperiod-to-periodcomparabilityofunderlyingbusinessperformance.ManagementusesAdjustedROICtomeasureADM’sperformancebycomparingAdjustedROICtoitsweightedaveragecostofcapital(WACC).AdjustedROIC,AdjustedROICearningsandAdjustedinvestedcapitalarenon-GAAPfinancialmeasuresandarenotintendedtoreplaceorbealternativestoGAAPfinancialmeasures.

(4) AverageROICAverageROICisADM’strailing4-quarternetearningsadjustedfortheafter-taxeffectsofinterestexpenseandchangesintheLIFOreservedividedbythesumofADM’sequity(excludingnon-controllinginterests)andinterest-bearingliabilitiesadjustedfortheafter-taxeffectoftheLIFOreserve.ManagementusesaverageROICforinvestorsasadditionalinformationaboutADM’sreturns.AverageROICisanon-GAAPfinancialmeasureandisnotintendedtoreplaceorbeanalternativetoGAAPfinancialmeasures.

(5) AdjustedEconomicValueAddedAdjustedeconomicvalueaddedisADM’strailing4-quartereconomicvalueaddedadjustedforLIFOandotherspecifieditems.TheCompanycalculateseconomicvalueaddedbycomparingADM’strailing4-quarteradjustedreturnstoitsAnnualWACCmultipliedbyadjustedinvestedcapital.Adjustedeconomicvalueaddedisanon-GAAPfinancialmeasureandisnotintendedtoreplaceorbeanalternativetoGAAPfinancialmeasures.

(6) AdjustedEBITDAAdjustedEBITDAisADM’searningsbeforetaxes,interest,anddepreciationandamortization,adjustedforLIFOandotherspecifieditems.TheCompanycalculatesadjustedEBITDAbyremovingtheimpactofLIFOandotherspecifieditemsandaddingbacktheamountsofinterestexpenseanddepreciationandamortizationtoearningsbeforeincometaxes.ManagementbelievesthatadjustedEBITDAisausefulmeasureoftheCompany'sperformancebecauseitprovidesinvestorsadditionalinformationabouttheCompany'soperationsallowingbetterevaluationofunderlyingbusinessperformanceandbetterperiodtoperiodcomparability.AdjustedEBITDAisanon-GAAPfinancialmeasureandisnotintendedtoreplaceorbeanalternativetoearningsbeforeincometaxes,themostdirectlycomparableGAAPfinancialmeasure.

Second Quarter 2020 · 2020. 7. 29. · 4. Q2 2020 Financial Highlights (in millions except per...

Documents

Transcript of Second Quarter 2020 · 2020. 7. 29. · 4. Q2 2020 Financial Highlights (in millions except per...