Segment Information

6 Months Ended

Jun. 30, 2019

The Company is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities, products, and ingredients. The Company’s operations are organized, managed, and classified into four reportable business segments: Origination, Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Other.

The Origination segment utilizes its extensive global grain elevator and transportation networks and port operations to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. The Origination segment includes international agricultural commodities merchandising and handling activities managed through a global trade desk based in Rolle, Switzerland. The Origination segment’s grain sourcing, handling, and transportation network provides reliable and efficient services to the Company’s customers and agricultural processing operations. The Origination segment’s transportation network capabilities include barge, ocean-going vessel, truck, rail, and container freight services. The Origination segment also includes the activities related to structured trade finance, the import and distribution of agricultural feed products, and the Company’s share of the results of its Pacificor joint venture. In February 2019, the Company purchased the remaining 50% interest owned by InVivo Group in the Gleadell Agriculture Ltd. joint venture.

The Oilseeds segment includes global activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, rapeseed, and flaxseed) into vegetable oils and protein meals. Oilseeds products produced and marketed by the Company include ingredients for the food, feed, energy, and industrial products industries. Crude vegetable oils produced by the segment’s crushing activities are sold “as is” or are further processed by refining, blending, bleaching, and deodorizing into salad oils. Salad oils are sold “as is” or are further processed by hydrogenating and/or interesterifying into margarine, shortening, and other food products. Partially refined oils are used to produce biodiesel and glycols or are sold to other manufacturers for use in chemicals, paints, and other industrial products. Oilseed protein meals are principally sold to third parties to be used as ingredients in commercial livestock and poultry feeds. In South America, the Oilseeds segment includes origination and merchandising activities as adjuncts to its oilseeds processing assets. These activities include a network of grain elevators, port facilities, and transportation assets used to buy, store, clean, and transport grains and oilseeds. The Oilseeds segment is a major supplier of peanuts, tree nuts, and peanut-derived ingredients to both the U.S. and export markets. In North America, cottonseed flour is produced and sold primarily to the pharmaceutical industry, and cotton cellulose pulp is manufactured and sold to the chemical, paper, and other industrial markets. The Oilseeds segment also includes the Company’s share of the results of its equity investment in Wilmar International Limited (Wilmar) and its share of the results of its Stratas Foods LLC, Edible Oils Limited, and Olenex Sarl (Olenex) joint ventures.

The Company’s Carbohydrate Solutions segment is engaged in corn and wheat wet and dry milling and other activities. The Carbohydrate Solutions segment converts corn and wheat into sweeteners, corn and wheat starches, wheat flour, and bioproducts. Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose, flour, and dextrose. Dextrose and starch are used by the Carbohydrate Solutions segment as feedstocks for its bioproducts operations. By fermentation of dextrose, the Carbohydrate Solutions segment produces alcohol and other food and animal feed ingredients. Ethyl alcohol is produced by the Company for industrial use as ethanol or as beverage grade. Ethanol, in gasoline, increases octane and is used as an extender and oxygenate. Corn gluten feed and meal, as well as distillers’ grains, are produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed into vegetable oil and protein meal. Other Carbohydrate Solutions products include citric acids which are used in various food and industrial products. This segment also includes the Company’s share of the results of its equity investments in Hungrana Ltd., Almidones Mexicanos S.A., and Red Star Yeast Company, LLC.

The Nutrition segment engages in the manufacturing, sale, and distribution of specialty products including natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products, and other specialty food and feed ingredients. The Nutrition segment includes activities related to the procurement, processing, and distribution of edible beans. The Nutrition segment also includes activities related to the processing and distribution of formula feeds and animal health and nutrition products and the manufacture of contract and private label pet treats and foods. During the six months ended June 30, 2019, the Company completed the acquisitions of Neovia, a French-based global provider of value-added animal nutrition solutions, with 72 production facilities and a presence in 25 countries; Florida Chemical Company, one of the world’s largest producers of citrus oils and ingredients; and Ziegler Group, a leading European provider of natural citrus flavor ingredients.

Other includes the Company’s remaining operations, primarily its financial business units, related to futures commission and insurance activities.

Intersegment sales have been recorded at amounts approximating market. Operating profit for each segment is based on net sales less identifiable operating expenses. Also included in operating profit for each segment is equity in earnings of affiliates based on the equity method of accounting. Specified items included in total segment operating profit and certain corporate items are not allocated to the Company’s individual business segments because operating performance of each business segment is evaluated by management exclusive of these items. Corporate results principally include the impact of LIFO-related adjustments, unallocated corporate expenses, interest cost net of investment income, and the Company’s share of the results of its equity investment in Compagnie Industrialle et Financiere des Produits Amylaces SA (Luxembourg) (CIP).

In May 2019, the Company announced the creation of a new business unit called Ag Services & Oilseeds, which combines the Origination and Oilseeds business operations into a single reporting structure effective July 1, 2019.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2019			2018			2019			2018
Gross revenues
Origination	$	7,193		$	7,757		$	14,168		$	14,936
Oilseeds	7,547			8,251			13,956			15,086
Carbohydrate Solutions	2,878			2,906			5,454			5,718
Nutrition	1,541			1,029			2,841			1,987
Other	104			101			185			207
Intersegment elimination	(2,966		)	(2,976		)	(5,003		)	(5,340		)
Total gross revenues	$	16,297		$	17,068		$	31,601		$	32,594

Intersegment sales
Origination	$	712		$	1,117		$	1,563		$	2,029
Oilseeds	1,800			1,589			2,795			2,822
Carbohydrate Solutions	437			259			610			470
Nutrition	17			11			35			19
Total intersegment sales	$	2,966		$	2,976		$	5,003		$	5,340

Revenues from external customers
Origination
Merchandising and Handling	$	6,418		$	6,577		$	12,476		$	12,789
Transportation	63			63			129			118
Total Origination	6,481			6,640			12,605			12,907
Oilseeds
Crushing and Origination	3,613			4,374			6,869			7,659
Refining, Packaging, Biodiesel, and Other	2,134			2,288			4,292			4,605
Total Oilseeds	5,747			6,662			11,161			12,264
Carbohydrate Solutions
Starches and Sweeteners	1,684			1,704			3,306			3,342
Bioproducts	757			943			1,538			1,906
Total Carbohydrate Solutions	2,441			2,647			4,844			5,248
Nutrition
Wild Flavors and Specialty Ingredients	728			693			1,402			1,329
Animal Nutrition	796			325			1,404			639
Total Nutrition	1,524			1,018			2,806			1,968

Other	104			101			185			207
Total revenues from external customers	$	16,297		$	17,068		$	31,601		$	32,594



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2019			2018			2019			2018
Segment operating profit
Origination	$	71		$	191		$	147		$	237
Oilseeds	291			341			632			690
Carbohydrate Solutions	192			247			288			460
Nutrition	117			114			198			210
Other	11			31			25			44
Specified Items:
Gains (losses) on sales of assets and businesses⁽¹⁾	—			—			12			—
Impairment, restructuring, and settlement charges⁽²⁾	(37		)	(22		)	(46		)	(35		)
Total segment operating profit	645			902			1,256			1,606
Corporate	(371		)	(250		)	(667		)	(490		)
Earnings before income taxes	$	274		$	652		$	589		$	1,116

⁽¹⁾ Current year-to-date gains consisted of a gain on the sale of certain assets and a step-up gain on an equity investment.

⁽²⁾ Current quarter and year-to-date charges primarily related to the impairment of certain long-lived assets. Prior quarter charges consisted of an impairment charge related to a long-term financing receivable and restructuring charges. Prior year-to-date charges consisted of impairment charges related to a long-term financing receivable and an equity investment and restructuring charges.