UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.  20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 1-44

ARCHER-DANIELS-MIDLAND COMPANY

(Exact name of registrant as specified in its charter)

Delaware		41-0129150
(State or other jurisdiction of incorporation or organization)		(I. R. S. Employer Identification No.)
77 West Wacker Drive, Suite 4600
Chicago,	Illinois	60601
(Address of principal executive offices)		(Zip Code)

(312) 634-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	ADM	NYSE
1.000% Notes due 2025		NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.         Yes  ☒  No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒  No  ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐	Emerging Growth Company	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐  No  ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, no par value – 560,561,569 shares

(July 25, 2022)

SAFE HARBOR STATEMENT

This Quarterly Report on Form 10-Q contains forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995 that is subject to risks and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking information.  Risks and uncertainties that could cause or contribute to such differences include, but are not limited to, those discussed in Item 1A, “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2021, as may be updated in our subsequent Quarterly Reports on Form 10-Q. To the extent permitted under applicable law, Archer-Daniels-Midland Company assumes no obligation to update any forward-looking statements as a result of new information or future events.

PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Archer-Daniels-Midland Company

Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions, except per share amounts)
Revenues	$	27,284	$	22,926	$	50,934	$	41,819
Cost of products sold	25,184		21,463		46,937		38,808
Gross Profit	2,100		1,463		3,997		3,011
Selling, general, and administrative expenses	814		739		1,643		1,488
Asset impairment, exit, and restructuring costs	1		23		2		82
Equity in earnings of unconsolidated affiliates	(192)		(163)		(396)		(288)
Investment income	(32)		(50)		(91)		(63)
Interest expense	73		40		165		127
Other (income) expense – net	(83)		49		(116)		16
Earnings Before Income Taxes	1,519		825		2,790		1,649
Income tax expense	279		113		486		244
Net Earnings Including Noncontrolling Interests	1,240		712		2,304		1,405
Less: Net earnings attributable to noncontrolling interests	4		—		14		4
Net Earnings Attributable to Controlling Interests	$	1,236	$	712	$	2,290	$	1,401
Average number of shares outstanding – basic	566		564		566		563
Average number of shares outstanding – diluted	568		566		568		565
Basic earnings per common share	$	2.18	$	1.26	$	4.05	$	2.49
Diluted earnings per common share	$	2.18	$	1.26	$	4.03	$	2.48
Dividends per common share	$	0.40	$	0.37	$	0.80	$	0.74

See notes to consolidated financial statements.

3

Archer-Daniels-Midland Company

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In millions)
Net earnings including noncontrolling interests	$	1,240	$	712	$	2,304	$	1,405
Other comprehensive income (loss):
Foreign currency translation adjustment	(7)		35		142		329
Tax effect	(84)		8		(115)		(48)
Net of tax amount	(91)		43		27		281
Pension and other postretirement benefit liabilities adjustment	—		71		37		89
Tax effect	(4)		(22)		(11)		(27)
Net of tax amount	(4)		49		26		62
Deferred gain (loss) on hedging activities	(80)		82		202		183
Tax effect	2		(15)		(45)		(40)
Net of tax amount	(78)		67		157		143
Unrealized gain (loss) on investments	(8)		(1)		(13)		(2)
Tax effect	1		(1)		1		(1)
Net of tax amount	(7)		(2)		(12)		(3)
Other comprehensive income (loss)	(180)		157		198		483
Comprehensive income (loss) including noncontrolling interests	1,060		869		2,502		1,888
Less: Comprehensive income (loss) attributable to noncontrolling interests	—		—		5		4
Comprehensive income (loss) attributable to controlling interests	$	1,060	$	869	$	2,497	$	1,884

See notes to consolidated financial statements.

4

Archer-Daniels-Midland Company

Consolidated Balance Sheets

(In millions)	June 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	906	$	943
Segregated cash and investments	9,974		8,016
Trade receivables	5,336		3,311
Inventories	14,485		14,481
Other current assets	6,946		5,158
Total Current Assets	37,647		31,909
Investments and Other Assets
Investments in and advances to affiliates	5,464		5,285
Goodwill and other intangible assets	6,547		6,747
Right of use assets	1,002		1,023
Other assets	1,488		1,369
Total Investments and Other Assets	14,501		14,424
Property, Plant, and Equipment
Land and land improvements	510		554
Buildings	5,596		5,597
Machinery and equipment	18,994		19,112
Construction in progress	1,175		960
	26,275		26,223
Accumulated depreciation	(16,595)		(16,420)
Net Property, Plant, and Equipment	9,680		9,803
Total Assets	$	61,828	$	56,136
Liabilities, Temporary Equity, and Shareholders’ Equity
Current Liabilities
Short-term debt	$	2,352	$	958
Trade payables	5,601		6,388
Payables to brokerage customers	11,307		8,965
Accrued expenses and other payables	5,014		4,790
Current lease liabilities	282		277
Current maturities of long-term debt	1,104		570
Total Current Liabilities	25,660		21,948
Long-Term Liabilities
Long-term debt	8,062		8,011
Deferred income taxes	1,579		1,412
Non-current lease liabilities	738		765
Other	1,102		1,233
Total Long-Term Liabilities	11,481		11,421
Temporary Equity - Redeemable noncontrolling interest	261		259
Shareholders’ Equity
Common stock	3,066		2,994
Reinvested earnings	23,292		21,655
Accumulated other comprehensive income (loss)	(1,965)		(2,172)
Noncontrolling interests	33		31
Total Shareholders’ Equity	24,426		22,508
Total Liabilities, Temporary Equity, and Shareholders’ Equity	$	61,828	$	56,136

See notes to consolidated financial statements.

5

Archer-Daniels-Midland Company

Consolidated Statements of Cash Flows

(Unaudited)

(In millions)	Six Months Ended June 30,
	2022		2021
Operating Activities
Net earnings including noncontrolling interests	$	2,304	$	1,405
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities
Depreciation and amortization	514		492
Asset impairment charges	4		54
Deferred income taxes	(15)		(37)
Equity in earnings of affiliates, net of dividends	(162)		(23)
Stock compensation expense	97		114
Deferred cash flow hedges	206		183
Gains on sales of assets and businesses/investment revaluation	(42)		(79)
Other – net	312		93
Changes in operating assets and liabilities
Segregated investments	(1,753)		610
Trade receivables	(2,155)		(710)
Inventories	(349)		223
Other current assets	(1,593)		780
Trade payables	(710)		(1,023)
Payables to brokerage customers	2,520		1,349
Accrued expenses and other payables	147		(424)
Total Operating Activities	(675)		3,007
Investing Activities
Purchases of property, plant, and equipment	(500)		(427)
Proceeds from sales of assets and businesses	12		58
Net assets of businesses acquired	—		(5)
Investments in and advances to affiliates	(58)		(8)
Distributions from affiliates	—		5
Other – net	(101)		(17)
Total Investing Activities	(647)		(394)
Financing Activities
Long-term debt borrowings	751		595
Long-term debt payments	—		(2)
Net borrowings (payments) under short-term credit agreements	1,414		(752)
Share repurchases	(200)		—
Cash dividends	(453)		(417)
Other – net	(21)		—
Total Financing Activities	1,491		(576)
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	169		2,037
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period	7,454		4,646
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period	$	7,623	$	6,683
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets
Cash and cash equivalents	$	906	$	869
Restricted cash and restricted cash equivalents included in segregated cash and investments	6,717		5,814
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	7,623	$	6,683

See notes to consolidated financial statements.

6

Archer-Daniels-Midland-Company

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Common Stock			Reinvested Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Shareholders’ Equity
(In millions, except per share amounts)	Shares	Amount
Balance, March 31, 2022	563	$	3,028	$	22,483	$	(1,789)	$	33	$	23,755
Comprehensive income
Net earnings				1,236				4
Other comprehensive income (loss)						(176)		(4)
Total comprehensive income										1,060
Cash dividends paid - $0.40 per share				(227)						(227)
Share repurchases	(2)			(200)						(200)
Stock compensation expense	—	28								28
Stock option exercises net of taxes	—	10								10
Balance, June 30, 2022	561	$	3,066	$	23,292	$	(1,965)	$	33	$	24,426
Balance, December 31, 2021	560	$	2,994	$	21,655	$	(2,172)	$	31	$	22,508
Comprehensive income
Net earnings				2,290				14
Other comprehensive income (loss)						207		(9)
Total comprehensive income										2,502
Cash dividends paid - $0.80 per share				(453)						(453)
Share repurchases	(2)			(200)						(200)
Stock compensation expense	3	97								97
Stock option exercises net of taxes	—	(26)								(26)
Other	—	1		—		—		(3)		(2)
Balance, June 30, 2022	561	$	3,066	$	23,292	$	(1,965)	$	33	$	24,426
Balance, March 31, 2021	559	$	2,858	$	20,261	$	(2,278)	$	20	$	20,861
Comprehensive income
Net earnings				712				—
Other comprehensive income (loss)						157		—
Total comprehensive income										869
Cash dividends paid - $0.37 per share				(209)						(209)
Stock compensation expense	—	38								38
Stock option exercises net of taxes	—	36								36
Other	—	9		(2)		—		1		8
Balance, June 30, 2021	559	$	2,941	$	20,762	$	(2,121)	$	21	$	21,603
Balance, December 31, 2020	556	$	2,824	$	19,780	$	(2,604)	$	22	$	20,022
Comprehensive income
Net earnings				1,401				4
Other comprehensive income (loss)						483		—
Total comprehensive income										1,888
Cash dividends paid - $0.74 per share				(417)						(417)
Stock compensation expense	3	114								114
Stock option exercises net of taxes	—	(1)								(1)
Other	—	4		(2)		—		(5)		(3)
Balance, June 30, 2021	559	$	2,941	$	20,762	$	(2,121)	$	21	$	21,603

See notes to consolidated financial statements.

7

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements

(Unaudited)

Note 1.    Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.  For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2021 for Archer-Daniels-Midland Company (the Company or ADM).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All significant intercompany accounts and transactions have been eliminated.  The Company consolidates all entities, including variable interest entities (VIEs), in which it has a controlling financial interest. For VIEs, the Company assesses whether it is the primary beneficiary as defined under the applicable accounting standard. Investments in affiliates, including VIEs through which the Company exercises significant influence but does not control the investee and is not the primary beneficiary of the investee’s activities, are carried at cost plus equity in undistributed earnings since acquisition and are adjusted, where appropriate, for basis differences between the investment balance and the underlying net assets of the investee.  The Company’s portion of the results of certain affiliates and results of certain VIEs are included using the most recent available financial statements.  In each case, the financial statements are within 93 days of the Company’s year end and are consistent from period to period.

Segregated Cash and Investments

The Company segregates certain cash, cash equivalents, and investment balances in accordance with regulatory requirements, commodity exchange requirements, and insurance arrangements. These balances represent deposits received from customers of the Company’s registered futures commission merchant and commodity brokerage services, cash margins and securities pledged to commodity exchange clearinghouses, and cash pledged as security under certain insurance arrangements. Segregated cash and investments also include restricted cash collateral for the various insurance programs of the Company’s captive insurance business. To the degree these segregated balances are comprised of cash and cash equivalents, they are considered restricted cash and cash equivalents on the consolidated statements of cash flows.

Receivables

The Company records receivables at net realizable value in trade receivables, other current assets, and other assets.  These amounts included allowances for estimated uncollectible accounts totaling $144 million and $122 million at June 30, 2022 and December 31, 2021, respectively, to reflect any loss anticipated on the accounts receivable balances including any accrued interest receivables thereon. Long-term receivables recorded in other assets were not material to the Company’s overall receivables portfolio.

The Company recorded bad debt expense in selling, general, and administrative expenses of $22 million and $44 million in the three and six months ended June 30, 2022, respectively, and $4 million and $8 million in the three and six months ended June 30, 2021, respectively.

Cost Method Investments

Cost method investments of $466 million and $297 million as of June 30, 2022 and December 31, 2021, respectively, were included in Other Assets in the Company’s consolidated balance sheets. Revaluation gains of $3 million and $37 million in the three and six months ended June 30, 2022, respectively, and $40 million in the three and six months ended June 30, 2021, in connection with observable third-party transactions, were recorded in investment income in the Company's consolidated statements of earnings.

8

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 1.    Basis of Presentation (Continued)

Operations in Ukraine and Russia

ADM employs approximately 650 people in Ukraine and operates an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office. Most of the facilities have been temporarily idled since February 24, 2022. The Company’s footprint in Russia is limited and operations have been scaled down to those related to the production and transport of essential food commodities and ingredients.

As a result of the recent events in Ukraine, the Company reviewed the valuation of its assets and recorded immaterial charges in the three and six months ended June 30, 2022 related to receivables and inventories. As of June 30, 2022, ADM concluded that 1) receivables, net of allowances, are deemed collectible; and 2) market inventories presented as level 3 in the fair value measurements table in Note 4 are valued appropriately at the February 24, 2022 market price due to the temporary lack of market activity. The temporarily idled property, plant, and equipment, which was immaterial, was not considered impaired. As the conflict in Ukraine evolves, the Company will continue to review the valuation of these assets and make any required adjustments, which are not expected to be material to the Company’s consolidated financial statements.

Note 2.    Pending Accounting Standards

Through December 31, 2022, the Company has the option to adopt the amended guidance of Accounting Standards Codification (ASC) Topic 848, Reference Rate Reform, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.  The Company plans to adopt the expedients and exceptions provided by the amended guidance before the December 31, 2022 expiry date and does not expect the adoption of the amended guidance to have an impact on its consolidated financial statements.

Effective January 1, 2023, the Company will be required to adopt the amended guidance of ASC Topic 805, Business Combinations, which improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The amended guidance requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers, (Topic 606). Early adoption is permitted. The Company does not expect the adoption of this amended guidance to have a significant impact on its consolidated financial statements.

Note 3.    Revenues

Revenue Recognition

The Company principally generates revenue from merchandising and transporting agricultural commodities, and manufacturing products for use in food, beverages, feed, energy, and industrial applications, and ingredients and solutions for human and animal nutrition. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The Company applies the practical expedient in paragraph 10-50-14 of Topic 606 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. For transportation service contracts, the Company recognizes revenue over time as the barge, ocean-going vessel, truck, rail, or container freight moves towards its destination in accordance with the transfer of control guidance of Topic 606. The Company recognized revenue from transportation service contracts of $209 million and $384 million for the three and six months ended June 30, 2022, respectively, and $151 million and $255 million for the three and six months ended June 30, 2021, respectively. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20).

9

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3.    Revenues (Continued)

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are included in cost of products sold. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Taxes Collected from Customers and Remitted to Governmental Authorities

The Company does not include taxes assessed by governmental authorities that are (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers, in the measurement of transaction prices or as a component of revenues and cost of products sold.

Contract Liabilities

Contract liabilities relate to advance payments from customers for goods and services that the Company has yet to provide. Contract liabilities of $340 million and $581 million as of June 30, 2022 and December 31, 2021, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets. Contract liabilities recognized as revenues were $335 million and $581 million for the three and six months ended June 30, 2022, respectively, and $287 million and $569 million for the three and six months ended June 30, 2021, respectively.

Disaggregation of Revenues

The following tables present revenue disaggregated by timing of recognition and major product lines for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30, 2022
	Topic 606 Revenue						Topic 815(1)		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Ag Services and Oilseeds
Ag Services	$	1,013	$	209	$	1,222	$	13,111	$	14,333
Crushing	128		—		128		3,234		3,362
Refined Products and Other	744		—		744		2,990		3,734
Total Ag Services and Oilseeds	1,885		209		2,094		19,335		21,429
Carbohydrate Solutions
Starches and Sweeteners	1,889		—		1,889		630		2,519
Vantage Corn Processors	1,232		—		1,232		—		1,232
Total Carbohydrate Solutions	3,121		—		3,121		630		3,751
Nutrition
Human Nutrition	1,020		—		1,020		—		1,020
Animal Nutrition	983		—		983		—		983
Total Nutrition	2,003		—		2,003		—		2,003
Other Business	101		—		101		—		101
Total Revenues	$	7,110	$	209	$	7,319	$	19,965	$	27,284

10

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3.    Revenues (Continued)

	Six Months Ended June 30, 2022
	Topic 606 Revenue						Topic 815(1)		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Ag Services and Oilseeds
Ag Services	$	1,983	$	384	$	2,367	$	23,813	$	26,180
Crushing	253		—		253		6,331		6,584
Refined Products and Other	1,376		—		1,376		5,542		6,918
Total Ag Services and Oilseeds	3,612		384		3,996		35,686		39,682
Carbohydrate Solutions
Starches and Sweeteners	3,819		—		3,819		1,198		5,017
Vantage Corn Processors	2,100		—		2,100		—		2,100
Total Carbohydrate Solutions	5,919		—		5,919		1,198		7,117
Nutrition
Human Nutrition	1,978		—		1,978		—		1,978
Animal Nutrition	1,949		—		1,949		—		1,949
Total Nutrition	3,927		—		3,927		—		3,927
Other Business	208		—		208		—		208
Total Revenues	$	13,666	$	384	$	14,050	$	36,884	$	50,934

	Three Months Ended June 30, 2021
	Topic 606 Revenue						Topic 815(1)		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Ag Services and Oilseeds
Ag Services	$	802	$	151	$	953	$	11,862	$	12,815
Crushing	92		—		92		2,735		2,827
Refined Products and Other	659		—		659		1,970		2,629
Total Ag Services and Oilseeds	1,553		151		1,704		16,567		18,271
Carbohydrate Solutions
Starches and Sweeteners	1,449		—		1,449		397		1,846
Vantage Corn Processors	974		—		974