(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits | The following exhibits are furnished or filed, as applicable, herewith: |
99.1 |
101 | Interactive Data File |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and incorporated by reference to Exhibit 101) |
ARCHER-DANIELS-MIDLAND COMPANY |
Date: | By | /s/ D. Cameron Findlay | ||
D. Cameron Findlay | ||||
Senior Vice President, General Counsel, and Secretary |
Exhibit | Description |
99.1 |
101 | Interactive Data File |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and incorporated by reference to Exhibit 101) |
(Amounts in millions except per share amounts) | 2020 | 2019 | |||||
Earnings per share (as reported) | $ | 0.69 | $ | 0.41 | |||
Adjusted earnings per share1 | $ | 0.64 | $ | 0.46 | |||
Segment operating profit | $ | 599 | $ | 611 | |||
Adjusted segment operating profit1 | $ | 643 | $ | 608 | |||
Ag Services and Oilseeds | 422 | 417 | |||||
Carbohydrate Solutions | 68 | 96 | |||||
Nutrition | 142 | 81 | |||||
Other Business | 11 | 14 |
• | EPS as reported of $0.69 includes a $0.06 per share charge related to asset impairment and restructuring charges, a $0.12 per share credit related to LIFO, and a $0.01 per share tax expense related to certain discrete items. Adjusted EPS, which excludes these items, was $0.64.1 |
• | Ag Services results more than doubled versus the first quarter of 2019, which was negatively impacted by high water conditions in North America. Global trade performance was driven by strong results in destination marketing and structured trade finance. Robust farmer selling in Brazil drove higher year-over-year origination volumes and margins, which were partially offset by weaker results in North America. |
• | Crushing results were lower than the prior-year-period. Volumes were strong, and execution margins were solid, though below the high realized margins in the first quarter of 2019, which benefited from the short crop in Argentina. The prior-year quarter also benefited from about $75 million of positive timing impacts. |
• | Refined Products and Other results were higher than the first quarter of 2019. Higher margins in both biodiesel and refined oils in North America were offset by lower biodiesel margins in EMEAI. Peanut shelling results were significantly improved versus the prior-year period. |
• | Wilmar results were significantly higher year over year. |
• | The Starches and Sweeteners subsegment, including wet mill ethanol results, was down year over year, largely due to about $50 million in negative mark to market impacts on forward sales of corn oil, much of which could reverse over the balance of the year. Absent those impacts, results were higher due to better operating performance at the Decatur complex, strong results in wheat milling, and improved conditions in EMEAI. |
• | Vantage Corn Processors results were slightly higher than the prior year. Effective risk management, combined with the lack of the severe weather impacts seen in the first quarter of 2019, helped offset weak industry ethanol margins caused by significantly decreased demand. |
• | Human Nutrition businesses, including flavors, specialty ingredients and health & wellness, delivered strong performance and growth across the broad portfolio. Increased sales revenue in North America and EMEAI flavors, continued sales growth in alternative proteins, and additional bioactives income helped drive improved results. |
• | Animal Nutrition continued its growth trajectory. Improved year-over-year results were driven by a strong performance from Neovia, good volumes and margins in feed additives, and solid sales in pet care. Amino acids were negatively impacted by a year-over-year decline in the global pricing environment. |
Media Relations | Investor Relations |
Jackie Anderson | Victoria de la Huerga |
312-634-8484 | 312-634-8457 |
Quarter ended | |||||||||
March 31 | |||||||||
(In millions) | 2020 | 2019 | Change | ||||||
Segment Operating Profit | $ | 599 | $ | 611 | $ | (12 | ) | ||
Specified items: | |||||||||
(Gains) losses on sales of assets and businesses | — | (12 | ) | 12 | |||||
Impairment and restructuring charges | 44 | 9 | 35 | ||||||
Adjusted Segment Operating Profit | $ | 643 | $ | 608 | $ | 35 | |||
Ag Services and Oilseeds | $ | 422 | $ | 417 | $ | 5 | |||
Ag Services | 164 | 75 | 89 | ||||||
Crushing | 70 | 216 | (146 | ) | |||||
Refined Products and Other | 81 | 72 | 9 | ||||||
Wilmar | 107 | 54 | 53 | ||||||
Carbohydrate Solutions | $ | 68 | $ | 96 | $ | (28 | ) | ||
Starches and Sweeteners | 99 | 135 | (36 | ) | |||||
Vantage Corn Processors | (31 | ) | (39 | ) | 8 | ||||
Nutrition | $ | 142 | $ | 81 | $ | 61 | |||
Human Nutrition | 113 | 88 | 25 | ||||||
Animal Nutrition | 29 | (7 | ) | 36 | |||||
Other Business | $ | 11 | $ | 14 | $ | (3 | ) | ||
Segment Operating Profit | $ | 599 | $ | 611 | $ | (12 | ) | ||
Corporate Results | $ | (224 | ) | $ | (296 | ) | $ | 72 | |
Interest expense - net | (77 | ) | (90 | ) | 13 | ||||
Unallocated corporate costs | (189 | ) | (183 | ) | (6 | ) | |||
Other charges | (52 | ) | (6 | ) | (46 | ) | |||
Specified items: | |||||||||
LIFO credit (charge) | 91 | (1 | ) | 92 | |||||
Expenses related to acquisitions | — | (14 | ) | 14 | |||||
Impairment, restructuring, and settlement charges | 3 | (2 | ) | 5 | |||||
Earnings Before Income Taxes | $ | 375 | $ | 315 | $ | 60 |
Quarter ended | |||||||
March 31 | |||||||
2020 | 2019 | ||||||
(in millions, except per share amounts) | |||||||
Revenues | $ | 14,970 | $ | 15,304 | |||
Cost of products sold (1) | 14,019 | 14,376 | |||||
Gross profit | 951 | 928 | |||||
Selling, general, and administrative expenses (2) | 664 | 659 | |||||
Asset impairment, exit, and restructuring costs (3) | 41 | 11 | |||||
Equity in (earnings) losses of unconsolidated affiliates | (140 | ) | (101 | ) | |||
Interest income | (40 | ) | (49 | ) | |||
Interest expense | 83 | 101 | |||||
Other (income) expense - net (4) | (32 | ) | (8 | ) | |||
Earnings before income taxes | 375 | 315 | |||||
Income tax (benefit) expense (5) | (16 | ) | 81 | ||||
Net earnings including noncontrolling interests | 391 | 234 | |||||
Less: Net earnings (losses) attributable to noncontrolling interests | — | 1 | |||||
Net earnings attributable to ADM | $ | 391 | $ | 233 | |||
Diluted earnings per common share | $ | 0.69 | $ | 0.41 | |||
Average diluted shares outstanding | 564 | 566 | |||||
March 31, 2020 | March 31, 2019 | |||||||
(in millions) | ||||||||
Net Investment In | ||||||||
Cash and cash equivalents (a) | $ | 4,734 | $ | 926 | ||||
Short-term marketable securities (a) | — | 9 | ||||||
Operating working capital (b) | 7,985 | 8,175 | ||||||
Property, plant, and equipment | 9,883 | 10,299 | ||||||
Investments in and advances to affiliates | 5,143 | 5,332 | ||||||
Long-term marketable securities | 2 | 22 | ||||||
Goodwill and other intangibles | 5,194 | 5,459 | ||||||
Other non-current assets | 2,027 | 1,777 | ||||||
$ | 34,968 | $ | 31,999 | |||||
Financed By | ||||||||
Short-term debt (a) | $ | 3,382 | $ | 1,595 | ||||
Long-term debt, including current maturities (a) | 9,121 | 8,289 | ||||||
Deferred liabilities | 3,418 | 3,156 | ||||||
Temporary equity | 71 | 49 | ||||||
Shareholders’ equity | 18,976 | 18,910 | ||||||
$ | 34,968 | $ | 31,999 |
(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). |
Three months ended | ||||||||
March 31 | ||||||||
2020 | 2019 | |||||||
(in millions) | ||||||||
Operating Activities | ||||||||
Net earnings | $ | 391 | $ | 234 | ||||
Depreciation and amortization | 245 | 245 | ||||||
Asset impairment charges | 44 | 9 | ||||||
Losses (gains) on sales of assets | — | (15 | ) | |||||
Other - net | 159 | (7 | ) | |||||
Change in deferred consideration in securitized receivables(a) | (2,045 | ) | (1,778 | ) | ||||
Other changes in operating assets and liabilities | 551 | (723 | ) | |||||
Total Operating Activities | (655 | ) | (2,035 | ) | ||||
Investing Activities | ||||||||
Purchases of property, plant and equipment | (194 | ) | (198 | ) | ||||
Net assets of businesses acquired | (8 | ) | (1,876 | ) | ||||
Proceeds from sale of business/assets | 7 | 18 | ||||||
Investments in retained interest in securitized receivables(a) | (1,271 | ) | (1,313 | ) | ||||
Proceeds from retained interest in securitized receivables(a) | 3,316 | 3,091 | ||||||
Marketable securities - net | 5 | 50 | ||||||
Investments in and advances to affiliates | (3 | ) | (9 | ) | ||||
Other investing activities | 1 | (34 | ) | |||||
Total Investing Activities | 1,853 | (271 | ) | |||||
Financing Activities | ||||||||
Long-term debt borrowings | 1,481 | — | ||||||
Long-term debt payments | (1 | ) | (4 | ) | ||||
Net borrowings (payments) under lines of credit | 2,188 | 1,309 | ||||||
Share repurchases | (112 | ) | — | |||||
Cash dividends | (203 | ) | (198 | ) | ||||
Other | (11 | ) | (42 | ) | ||||
Total Financing Activities | 3,342 | 1,065 | ||||||
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | 4,540 | (1,241 | ) | |||||
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 | $ | 7,530 | $ | 2,602 |
Quarter ended | ||||||||
March 31 | ||||||||
2020 | 2019 | |||||||
(in ‘000s metric tons) | ||||||||
Processed volumes (by commodity) | ||||||||
Oilseeds | 9,163 | 9,167 | ||||||
Corn | 5,534 | 5,132 | ||||||
Total processed volumes | 14,697 | 14,299 | ||||||
Quarter ended | ||||||||
March 31 | ||||||||
2020 | 2019 | |||||||
(in millions) | ||||||||
Revenues | ||||||||
Ag Services and Oilseeds | $ | 11,079 | $ | 11,538 | ||||
Carbohydrate Solutions | 2,316 | 2,403 | ||||||
Nutrition | 1,471 | 1,282 | ||||||
Other Business | 104 | 81 | ||||||
Total revenues | $ | 14,970 | $ | 15,304 |
Quarter ended March 31 | ||||||||||||
2020 | 2019 | |||||||||||
In millions | Per share | In millions | Per share | |||||||||
Net earnings and fully diluted EPS | $ | 391 | $ | 0.69 | $ | 233 | $ | 0.41 | ||||
Adjustments: | ||||||||||||
LIFO charge (credit) (a) | (69 | ) | (0.12 | ) | 1 | — | ||||||
Losses (gains) on sales of assets and businesses (b) | — | — | (9 | ) | (0.02 | ) | ||||||
Asset impairment and restructuring charges (c) | 32 | 0.06 | 10 | 0.02 | ||||||||
Expenses related to acquisitions (d) | — | — | 9 | 0.02 | ||||||||
Tax adjustment (e) | 7 | 0.01 | 17 | 0.03 | ||||||||
Sub-total adjustments | (30 | ) | (0.05 | ) | 28 | 0.05 | ||||||
Adjusted net earnings and adjusted EPS | $ | 361 | $ | 0.64 | $ | 261 | $ | 0.46 | ||||
(a) | Current quarter 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. Prior quarter changes in the Company’s LIFO reserves of $1 million pretax ($1 million after tax), tax effected using the Company’s U.S. income tax rate. |
(b) | Prior quarter gains of $12 million pretax ($9 million after tax) related to the sale of certain assets and a step-up gain on an equity investment, tax effected using the Company’s U.S. income tax rate. |
(c) | Current quarter net charges of $41 million pretax ($32 million after tax) related to the impairment of certain assets and restructuring, tax effected using the applicable rates. Prior quarter charges of $11 million pretax ($10 million after tax) related to the impairment of certain assets and restructuring, tax effected using the applicable tax rates. |
(d) | Prior quarter acquisition expenses of $14 million pretax ($9 million after tax) consisted of expenses primarily related to the Neovia acquisition. |
(e) | Tax adjustment totaling $7 million in the current quarter due to certain discrete items and $17 million in the prior quarter due to certain discrete items and true-up adjustments. |
Adjusted ROIC Earnings (in millions) | |||||||||||||||||||
Four Quarters | |||||||||||||||||||
Quarter Ended | Ended | ||||||||||||||||||
June 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | |||||||||||||||
Net earnings attributable to ADM | $ | 235 | $ | 407 | $ | 504 | $ | 391 | $ | 1,537 | |||||||||
Adjustments: | |||||||||||||||||||
Interest expense | 109 | 97 | 95 | 83 | 384 | ||||||||||||||
LIFO | 25 | (16 | ) | 27 | (91 | ) | (55 | ) | |||||||||||
Other adjustments | 119 | 48 | 253 | 48 | 468 | ||||||||||||||
Total adjustments | 253 | 129 | 375 | 40 | 797 | ||||||||||||||
Tax on adjustments | (65 | ) | (32 | ) | (8 | ) | (7 | ) | (112 | ) | |||||||||
Net adjustments | 188 | 97 | 367 | 33 | 685 | ||||||||||||||
Total Adjusted ROIC Earnings | $ | 423 | $ | 504 | $ | 871 | $ | 424 | $ | 2,222 | |||||||||
Adjusted Invested Capital (in millions) | |||||||||||||||||||
Quarter Ended | Trailing Four | ||||||||||||||||||
June 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Quarter Average | |||||||||||||||
Equity (1) | $ | 18,955 | $ | 18,873 | $ | 19,208 | $ | 18,952 | $ | 18,997 | |||||||||
+ Interest-bearing liabilities (2) | 9,417 | 8,891 | 8,891 | 12,512 | 9,928 | ||||||||||||||
+ LIFO adjustment (net of tax) | 61 | 49 | 69 | — | 45 | ||||||||||||||
Other adjustments | 86 | 36 | 274 | 39 | 109 | ||||||||||||||
Total Adjusted Invested Capital | $ | 28,519 | $ | 27,849 | $ | 28,442 | $ | 31,503 | $ | 29,079 | |||||||||
Adjusted Return on Invested Capital | 7.6 | % |
Four Quarters | |||||||||||||||||||
Quarter Ended | Ended | ||||||||||||||||||
June 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | |||||||||||||||
(in millions) | |||||||||||||||||||
Earnings before income taxes | $ | 274 | $ | 503 | $ | 496 | $ | 375 | $ | 1,648 | |||||||||
Interest expense | 109 | 97 | 95 | 83 | 384 | ||||||||||||||
Depreciation and amortization | 248 | 249 | 251 | 245 | 993 | ||||||||||||||
LIFO charge (credit) | 25 | (16 | ) | 27 | (91 | ) | (55 | ) | |||||||||||
Gains (Losses) on sales of assets and businesses | — | — | 101 | — | 101 | ||||||||||||||
Asset impairment, restructuring, & settlement charges | 138 | 53 | 103 | 41 | 335 | ||||||||||||||
Railroad maintenance expense | — | — | 51 | 73 | 124 | ||||||||||||||
Expenses related to acquisitions | — | — | 3 | — | 3 | ||||||||||||||
Adjusted EBITDA | $ | 794 | $ | 886 | $ | 1,127 | $ | 726 | $ | 3,533 | |||||||||
Four Quarters | |||||||||||||||||||
Quarter Ended | Ended | ||||||||||||||||||
June 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | |||||||||||||||
(in millions) | |||||||||||||||||||
Ag Services and Oilseeds | $ | 457 | $ | 511 | $ | 833 | $ | 514 | $ | 2,315 | |||||||||
Carbohydrate Solutions | 274 | 264 | 258 | 148 | 944 | ||||||||||||||
Nutrition | 173 | 175 | 160 | 199 | 707 | ||||||||||||||
Other Business | 18 | 55 | 20 | 15 | 108 | ||||||||||||||
Corporate | (128 | ) | (119 | ) | (144 | ) | (150 | ) | (541 | ) | |||||||||
Adjusted EBITDA | $ | 794 | $ | 886 | $ | 1,127 | $ | 726 | $ | 3,533 | |||||||||
Four Quarters | |||||||||||||||||||
Quarter Ended | Ended | ||||||||||||||||||
June 30, 2018 | Sep. 30, 2018 | Dec 31, 2018 | Mar. 31, 2019 | Mar. 31, 2019 | |||||||||||||||
(in millions) | |||||||||||||||||||
Earnings before income taxes | $ | 652 | $ | 632 | $ | 312 | $ | 315 | $ | 1,911 | |||||||||
Interest expense | 89 | 87 | 97 | 101 | 374 | ||||||||||||||
Depreciation and amortization | 239 | 232 | 235 | 245 | 951 | ||||||||||||||
LIFO charge (credit) | (13 | ) | 7 | (4 | ) | 1 | (9 | ) | |||||||||||
Gains (Losses) on sales of assets and businesses | — | (21 | ) | 8 | (12 | ) | (25 | ) | |||||||||||
Asset impairment, restructuring, & settlement charges | 24 | 2 | 250 | 11 | 287 | ||||||||||||||
Expenses related to acquisitions | — | (4 | ) | 12 | 14 | 22 | |||||||||||||
Adjusted EBITDA | $ | 991 | $ | 935 | $ | 910 | $ | 675 | $ | 3,511 | |||||||||
Four Quarters | |||||||||||||||||||
Quarter Ended | Ended | ||||||||||||||||||
June 30, 2018 | Sep. 30, 2018 | Dec 31, 2018 | Mar. 31, 2019 | Mar. 31, 2019 | |||||||||||||||
(in millions) | |||||||||||||||||||
Ag Services and Oilseeds | $ | 633 | $ | 580 | $ | 711 | $ | 510 | $ | 2,434 | |||||||||
Carbohydrate Solutions | 333 | 364 | 281 | 178 | 1,156 | ||||||||||||||
Nutrition | 151 | 103 | 99 | 134 | 487 | ||||||||||||||
Other Business | 39 | 37 | (3 | ) | 24 | 97 | |||||||||||||
Corporate | (165 | ) | (149 | ) | (178 | ) | (171 | ) | (663 | ) | |||||||||
Adjusted EBITDA | $ | 991 | $ | 935 | $ | 910 | $ | 675 | $ | 3,511 | |||||||||
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