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, 2023

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 – 536,101,643 shares

(July 24, 2023)

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, 2022, 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,
	2023		2022		2023		2022
	(In millions, except per share amounts)
Revenues	$	25,190	$	27,284	$	49,262	$	50,934
Cost of products sold	23,307		25,184		45,299		46,937
Gross Profit	1,883		2,100		3,963		3,997
Selling, general, and administrative expenses	841		814		1,722		1,643
Asset impairment, exit, and restructuring costs	60		1		67		2
Equity in earnings of unconsolidated affiliates	(151)		(192)		(325)		(396)
Interest and investment income	(142)		(32)		(276)		(91)
Interest expense	180		73		327		165
Other (income) expense – net	(37)		(83)		(81)		(116)
Earnings Before Income Taxes	1,132		1,519		2,529		2,790
Income tax expense	204		279		429		486
Net Earnings Including Noncontrolling Interests	928		1,240		2,100		2,304
Less: Net earnings attributable to noncontrolling interests	1		4		3		14
Net Earnings Attributable to Controlling Interests	$	927	$	1,236	$	2,097	$	2,290
Average number of shares outstanding – basic	545		566		548		566
Average number of shares outstanding – diluted	546		568		549		568
Basic earnings per common share	$	1.70	$	2.18	$	3.83	$	4.05
Diluted earnings per common share	$	1.70	$	2.18	$	3.82	$	4.03
Dividends per common share	$	0.45	$	0.40	$	0.90	$	0.80

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,
	2023		2022		2023		2022
	(In millions)
Net earnings including noncontrolling interests	$	928	$	1,240	$	2,100	$	2,304
Other comprehensive income (loss):
Foreign currency translation adjustment	35		(7)		188		142
Tax effect	14		(84)		28		(115)
Net of tax amount	49		(91)		216		27
Pension and other postretirement benefit liabilities adjustment	(6)		—		(32)		37
Tax effect	4		(4)		(9)		(11)
Net of tax amount	(2)		(4)		(41)		26
Deferred gain (loss) on hedging activities	(37)		(80)		(141)		202
Tax effect	16		2		32		(45)
Net of tax amount	(21)		(78)		(109)		157
Unrealized gain (loss) on investments	4		(8)		8		(13)
Tax effect	(1)		1		(2)		1
Net of tax amount	3		(7)		6		(12)
Other comprehensive income (loss)	29		(180)		72		198
Comprehensive income (loss)	957		1,060		2,172		2,502
Less: Comprehensive income (loss) attributable to noncontrolling interests	—		—		(1)		5
Comprehensive income (loss) attributable to controlling interests	$	957	$	1,060	$	2,173	$	2,497

See notes to consolidated financial statements.

4

Archer-Daniels-Midland Company

Consolidated Balance Sheets

(In millions)	June 30, 2023		December 31, 2022
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	1,426	$	1,037
Segregated cash and investments	8,167		9,010
Trade receivables - net	4,110		4,926
Inventories	11,902		14,771
Other current assets	5,081		5,666
Total Current Assets	30,686		35,410
Investments and Other Assets
Investments in affiliates	5,665		5,467
Goodwill and other intangible assets	6,542		6,544
Right of use assets	1,138		1,088
Other assets	1,341		1,332
Total Investments and Other Assets	14,686		14,431
Property, Plant, and Equipment
Land and land improvements	534		502
Buildings	5,712		5,639
Machinery and equipment	19,566		19,194
Construction in progress	1,544		1,440
	27,356		26,775
Accumulated depreciation	(17,229)		(16,842)
Net Property, Plant, and Equipment	10,127		9,933
Total Assets	$	55,499	$	59,774
Liabilities, Temporary Equity, and Shareholders’ Equity
Current Liabilities
Short-term debt	$	125	$	503
Trade payables	5,079		7,803
Payables to brokerage customers	8,712		9,856
Accrued expenses and other payables	4,269		4,795
Current lease liabilities	302		292
Current maturities of long-term debt	301		942
Total Current Liabilities	18,788		24,191
Long-Term Liabilities
Long-term debt	8,244		7,735
Deferred income taxes	1,351		1,402
Non-current lease liabilities	853		816
Other	984		1,014
Total Long-Term Liabilities	11,432		10,967
Temporary Equity - Redeemable noncontrolling interest	304		299
Shareholders’ Equity
Common stock	3,128		3,147
Reinvested earnings	24,244		23,646
Accumulated other comprehensive income (loss)	(2,433)		(2,509)
Noncontrolling interests	36		33
Total Shareholders’ Equity	24,975		24,317
Total Liabilities, Temporary Equity, and Shareholders’ Equity	$	55,499	$	59,774

See notes to consolidated financial statements.

5

Archer-Daniels-Midland Company

Consolidated Statements of Cash Flows

(Unaudited)

(In millions)	Six Months Ended June 30,
	2023		2022
Operating Activities
Net earnings including noncontrolling interests	$	2,100	$	2,304
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities
Depreciation and amortization	521		514
Asset impairment charges	46		4
Deferred income taxes	8		(15)
Equity in earnings of affiliates, net of dividends	(80)		(162)
Stock compensation expense	86		97
Deferred cash flow hedges	(141)		206
Gains on sales of assets and businesses/investment revaluation	(32)		(42)
Other – net	(18)		312
Changes in operating assets and liabilities, net of acquisitions and dispositions
Segregated investments	(1,392)		(1,753)
Trade receivables	846		(2,155)
Inventories	2,917		(349)
Other current assets	582		(1,593)
Trade payables	(2,762)		(710)
Payables to brokerage customers	(1,213)		2,520
Accrued expenses and other payables	(569)		147
Total Operating Activities	899		(675)
Investing Activities
Capital expenditures	(614)		(500)
Proceeds from sales of assets and businesses	17		12
Investments in affiliates	(6)		(58)
Cost method investments	(5)		(133)
Other – net	(3)		32
Total Investing Activities	(611)		(647)
Financing Activities
Long-term debt borrowings	500		751
Long-term debt payments	(662)		—
Net borrowings (payments) under lines of credit agreements	(371)		1,414
Share repurchases	(1,001)		(200)
Cash dividends	(494)		(453)
Other – net	(103)		(21)
Total Financing Activities	(2,131)		1,491
Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents	(3)		—
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	(1,846)		169
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period	7,033		7,454
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period	$	5,187	$	7,623
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets
Cash and cash equivalents	$	1,426	$	906
Restricted cash and restricted cash equivalents included in segregated cash and investments	3,761		6,717
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	5,187	$	7,623

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, 2023	545	$	3,106	$	24,217	$	(2,463)	$	36	$	24,896
Comprehensive income
Net earnings				927				1
Other comprehensive income (loss)						30		(1)
Total comprehensive income										957
Cash dividends paid - $0.45 per share				(246)						(246)
Share repurchases	(9)			(654)						(654)
Stock compensation expense	—	21								21
Stock option exercises net of taxes	—	1								1
Balance, June 30, 2023	536	$	3,128	$	24,244	$	(2,433)	$	36	$	24,975
Balance, December 31, 2022	547	$	3,147	$	23,646	$	(2,509)	$	33	$	24,317
Comprehensive income
Net earnings				2,097				3
Other comprehensive income (loss)						76		(4)
Total comprehensive income										2,172
Cash dividends paid - $0.90 per share				(494)						(494)
Share repurchases	(13)			(1,005)						(1,005)
Stock compensation expense	3	86								86
Stock option exercises net of taxes	(1)	(107)								(107)
Other	—	2		—		—		4		6
Balance, June 30, 2023	536	$	3,128	$	24,244	$	(2,433)	$	36	$	24,975
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

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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.  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, 2022 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 to reflect any loss anticipated on the accounts receivable balances including any accrued interest receivables thereon. The Company estimates uncollectible accounts by pooling receivables according to type, region, credit risk rating, and age. Each pool is assigned an expected loss co-efficient to arrive at a general reserve based on historical write-offs adjusted, as needed, for regional, economic, and other forward-looking factors. The Company minimizes credit risk due to the large and diversified nature of its worldwide customer base. ADM manages its exposure to counter-party credit risk through credit analysis and approvals, credit limits, and monitoring procedures. Long-term receivables recorded in other assets were not material to the Company’s overall receivables portfolio.

8

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 1.    Basis of Presentation (Continued)

Changes to the allowance for estimated uncollectible accounts are as follows:

	Three Months Ended June 30
	2023		2022
Beginning, April 1	$	182	$	137
Current year provisions	9		22
Write-offs against allowance	(16)		(4)
Foreign exchange translation adjustment	—		(2)
Other	(1)		11
Ending, June 30	$	174	$	164
	Six Months Ended June 30
	2023		2022
Beginning, January 1	$	199	$	122
Current year provisions	13		44
Recoveries	1		1
Write-offs against allowance	(40)		(5)
Foreign exchange translation adjustment	1		(2)
Other	—		4
Ending, June 30	$	174	$	164

Write-offs against allowance in the current quarter primarily related to a customer in Brazil. Also included in write-offs against allowance in the six months ended June 30, 2023 was allowance on receivables that were subsequently sold.

Inventories

Certain merchandisable agricultural commodity inventories, which include inventories acquired under deferred pricing contracts, are stated at market value.  In addition, the Company values certain inventories using the first-in, first-out (FIFO) method at the lower of cost or net realizable value.

The following table sets forth the Company’s inventories.

	June 30, 2023		December 31, 2022
	(In millions)
Raw materials and supplies	$	7,592	$	6,975
Finished goods	4,310		7,796
Total inventories	$	11,902	$	14,771

Included in raw materials and supplies are work in process inventories which were not material as of June 30, 2023 and December 31, 2022.

9

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 1.    Basis of Presentation (Continued)

Cost Method Investments

Cost method investments of $494 million and $488 million as of June 30, 2023 and December 31, 2022, 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, in connection with observable third-party transactions, were recorded in interest and investment income in the Company's consolidated statements of earnings. There were no revaluation gains in the three and six months ended June 30, 2023.

Operations in Ukraine and Russia

ADM employs approximately 640 people in Ukraine and operates an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office. The Company’s footprint in Russia is limited to operations related to the production and transport of essential food commodities and ingredients.

As a result of the ongoing conflict in Ukraine, the Company reviewed the valuation of its assets and concluded that as of June 30, 2023, receivables, net of allowances, are deemed collectible and market inventories are valued appropriately. The Company also evaluated the impact of Russia’s announcement of its purported annexation of four Ukrainian regions on the valuation of ADM’s assets in those regions and concluded that the assets are appropriately valued. 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.    New Accounting Standards

Effective January 1, 2023, the Company adopted the amended guidance of Accounting Standards Codification (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). The Company’s adoption of this amended guidance did not have an impact on its consolidated financial statements.

Effective January 1, 2023, the Company adopted the amended guidance of ASC Subtopic 405-50, Liabilities - Supplier Finance Programs, which enhances the transparency of supplier finance programs. The amended guidance requires an entity (buyer) in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ADM has Supplier Payable Programs (“SPP”) with financial institutions which act as its paying agents for payables due to certain of its suppliers. The Company has neither an economic interest in a supplier’s participation in the SPP nor a direct financial relationship with the financial institutions, and has concluded that its obligations to the suppliers, including amounts due and scheduled payment terms, are not impacted by their participation in the SPP. Accordingly, amounts associated with the SPP continue to be classified in current liabilities in the Company’s consolidated balance sheet and in operating activities in its consolidated statement of cash flows. The supplier invoices that have been confirmed as valid under the program require payment in full generally within 90 days of the invoice date. As of June 30, 2023 and December 31, 2022, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $310 million and $196 million, respectively.

Through December 31, 2024, the Company has the option to adopt the amended guidance of 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, 2024, except for hedging relationships existing as of December 31, 2024, 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, 2024 expiry date and does not expect the adoption of the amended guidance to have an impact on its consolidated financial statements.

10

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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. 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 mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606. The Company recognized revenue from transportation service contracts of $200 million and $378 million for the three and six months ended June 30, 2023, respectively, and $209 million and $384 million for the three and six months ended June 30, 2022, 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).

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 $286 million and $694 million as of June 30, 2023 and December 31, 2022, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets. Revenues recognized from contract liabilities were $311 million and $673 million for the three and six months ended June 30, 2023, respectively, and $335 million and $581 million for the three and six months ended June 30, 2022, respectively.

11

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3.    Revenues (Continued)

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, 2023 and 2022.

	Three Months Ended June 30, 2023
	Topic 606 Revenue						Topic 815(1)		Total
(In millions)	Point in Time		Over Time		Total		Revenue		Revenues
Ag Services and Oilseeds
Ag Services	$	1,071	$	200	$	1,271	$	12,095	$	13,366
Crushing	32		—		32		3,448		3,480
Refined Products and Other	577		—		577		2,421		2,998
Total Ag Services and Oilseeds	1,680		200		1,880		17,964		19,844
Carbohydrate Solutions
Starches and Sweeteners	1,872		—		1,872		603		2,475
Vantage Corn Processors	906		—		906		—		906
Total Carbohydrate Solutions	2,778		—		2,778		603		3,381
Nutrition
Human Nutrition	966		—		966		—		966
Animal Nutrition	887		—		887		—		887
Total Nutrition	1,853		—		1,853		—		1,853
Other Business	112		—		112		—		112
Total Revenues	$	6,423	$	200	$	6,623	$	18,567	$	25,190

	Six Months Ended June 30, 2023
	Topic 606 Revenue						Topic 815(1)		Total
	Point in Time		Over Time		Total		Revenue		Revenues
	(In millions)
Ag Services and Oilseeds
Ag Services	$	2,088	$	378	$	2,466	$	22,595	$	25,061
Crushing	223		—		223		6,940		7,163
Refined Products and Other	1,203		—		1,203		4,996		6,199
Total Ag Services and Oilseeds	3,514		378		3,892		34,531		38,423
Carbohydrate Solutions
Starches and Sweeteners	3,956		—		3,956		1,256		5,212
Vantage Corn Processors	1,706		—		1,706		—		1,706
Total Carbohydrate Solutions	5,662		—		5,662		1,256		6,918
Nutrition
Human Nutrition	1,902		—		1,902		—		1,902
Animal Nutrition	1,804		—		1,804		—		1,804
Total Nutrition	3,706		—		3,706		—		3,706
Other Business	215		—		215		—		215
Total Revenues	$	13,097	$	378	$	13,475	$	35,787	$	49,262

12

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3.    Revenues (Continued)

	Three Months Ended June 30, 2022
	Topic 606 Revenue						Topic 815(1)		Total
(In millions)	Point in Time		Over Time		Total		Revenue		Revenues
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

	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

(1) Topic 815 revenue relates to the physical delivery or the settlement of the Company’s sales contracts that are accounted for as derivatives and are outside the scope of Topic 606.

13

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 3.    Revenues (Continued)

Ag Services and Oilseeds

The Ag Services and Oilseeds segment generates revenue from the sale of commodities, from service fees for the transportation of goods, from the sale of products manufactured in its global processing facilities, and from its structured trade finance activities. Revenue is measured based on the consideration specified in the contract. Revenue is recognized when a performance obligation is satisfied by transferring control over a product or providing service to a customer. For transportation service contracts, the Company recognizes revenue over time as the mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606. The amount of revenue recognized follows the contractually specified price, which may include freight or other contractually specified cost components. 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 Topic 610-20. The Company engages in various structured trade finance activities to leverage its global trade flows whereby the Company obtains letters of credit (LCs) to guarantee payments on both global purchases and sales of grain. LCs guaranteeing payment on grain sales are sold on a non-recourse basis with no continuing involvement. The Company earns returns from the difference in interest rates between the LCs that guarantee payment on the underlying purchases and sales of grain given the differing risk profiles of the underlying transactions. The net return related to structured trade finance activities is included in revenue and is not significant for the three and six months ended June 30, 2023 and 2022.

Carbohydrate Solutions

The Carbohydrate Solutions segment generates revenue from the sale of products manufactured at the Company’s global corn and wheat milling facilities around the world. Revenue is recognized when control over products is transferred to the customer. Products are shipped to customers from the Company’s various facilities and from its network of storage terminals. The amount of revenue recognized is based on the consideration specified in the contract, which could include freight and other costs depending on the specific shipping terms of each contract. 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 Topic 610-20.

Nutrition

The Nutrition segment sells ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, edible beans, formula feeds, animal health and nutrition products, pet food and treats, and other specialty food and feed ingredients. Revenue is recognized when control over products is transferred to the customer. The amount of revenue recognized follows the contracted price or the mutually agreed price of the product. Freight and shipping are recognized as a component of revenue at the same time control transfers to the customer.

Other Business

Other Business includes the Company’s futures commission business whose primary sources of revenue are commissions and brokerage income generated from executing orders and clearing futures contracts and options on futures contracts on behalf of its customers. Commissions and brokerage revenue are recognized on the date the transaction is executed. Other Business also includes the Company’s captive insurance business, which generates third party revenue through its proportionate share of premiums from third-party reinsurance pools. Reinsurance premiums are recognized on a straight-line basis over the period underlying the policy.

14

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.    Fair Value Measurements

The following tables set forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2023 and December 31, 2022.

	Fair Value Measurements at June 30, 2023
	Quoted Prices in  Active Markets  for Identical  Assets  (Level 1)		Significant  Other  Observable  Inputs  (Level 2)		Significant  Unobservable Inputs (Level 3)		Total
	(In millions)
Assets:
Inventories carried at market	$	—	$	3,631	$	2,859	$	6,490
Unrealized derivative gains:
Commodity contracts	—		728		886		1,614
Foreign currency contracts	—		211		—		211
Cash equivalents	471		—		—		471
Segregated investments	2,145		—		—		2,145
Total Assets	$	2,616	$	4,570	$	3,745	$	10,931
Liabilities:
Unrealized derivative losses:
Commodity contracts	$	—	$	631	$	791	$	1,422
Foreign currency contracts	—		204		—		204
Inventory-related payables	—		1,077		65		1,142
Total Liabilities	$	—	$	1,912	$	856	$	2,768

15

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.    Fair Value Measurements (Continued)

	Fair Value Measurements at December 31, 2022
	Quoted Prices in  Active Markets  for Identical  Assets  (Level 1)		Significant  Other  Observable  Inputs  (Level 2)		Significant  Unobservable Inputs (Level 3)		Total
	(In millions)
Assets:
Inventories carried at market	$	—	$	6,281	$	2,760	$	9,041
Unrealized derivative gains:
Commodity contracts	—		796		541		1,337
Foreign currency contracts	—		258		—		258
Interest rate contracts	—		109		—		109
Cash equivalents	405		—		—		405
Segregated investments	1,453		—		—		1,453
Total Assets	$	1,858	$	7,444	$	3,301	$	12,603
Liabilities:
Unrealized derivative losses:
Commodity contracts	$	—	$	665	$	603	$	1,268
Foreign currency contracts	—		275		—		275
Debt conversion option	—		—		6		6
Inventory-related payables	—		1,181		89		1,270
Total Liabilities	$	—	$	2,121	$	698	$	2,819

Estimated fair values for inventories and inventory-related payables carried at market are based on exchange-quoted prices, adjusted for differences in local markets and quality, referred to as basis. Market valuations for the Company’s inventories are adjusted for location and quality (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using the inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the inventory is classified in Level 3. Changes in the fair value of inventories and inventory-related payables are recognized in the consolidated statements of earnings as a component of cost of products sold.

16

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.    Fair Value Measurements (Continued)

Derivative contracts include exchange-traded commodity futures and options contracts, forward commodity purchase and sale contracts, and over-the-counter (OTC) instruments related primarily to agricultural commodities, energy, interest rates, and foreign currencies.  Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified in Level 1.  Substantially all of the Company’s exchange-traded futures and options contracts are cash-settled on a daily basis and, therefore, are not included in these tables.  Fair value for forward commodity purchase and sale contracts is estimated based on exchange-quoted prices adjusted for differences in local markets.  Market valuations for the Company’s forward commodity purchase and sale contracts are adjusted for location (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity.  When observable inputs are available for substantially the full term of the contract, it is classified in Level 2.  When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the contract is classified in Level 3.  Except for certain derivatives designated as cash flow hedges, changes in the fair value of commodity-related derivatives are recognized in the consolidated statements of earnings as a component of cost of products sold.  Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net, depending upon the purpose of the contract.  The changes in the fair value of derivatives designated as effective cash flow hedges are recognized in the consolidated balance sheets as a component of accumulated other comprehensive income (AOCI) until the hedged items are recorded in earnings or it is probable the hedged transaction will no longer occur.

The Company’s cash equivalents are comprised of money market funds valued using quoted market prices and are classified as Level 1.

The Company’s segregated investments are comprised of U.S. Treasury securities. U.S. Treasury securities are valued using quoted market prices and are classified in Level 1.

The debt conversion option is the equity linked embedded derivative related to the exchangeable bonds. The fair value of the embedded derivative is included in long-term debt, with changes in fair value recognized as interest, and is valued with the assistance of a third-party pricing service (a level 3 measurement).

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended June 30, 2023.

	Level 3 Fair Value Asset Measurements at
	June 30, 2023
	Inventories  Carried at  Market		Commodity Derivative Contracts Gains		Total  Assets
	(In millions)
Balance, March 31, 2023	$	3,503	$	649	$	4,152
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	362		475		837
Purchases	9,910		—		9,910
Sales	(10,646)		—		(10,646)
Settlements	(4)		(457)		(461)
Transfers into Level 3	547		240		787
Transfers out of Level 3	(813)		(21)		(834)
Ending balance, June 30, 2023	$	2,859	$	886	$	3,745

* Includes increase in unrealized gains of $780 million relating to Level 3 assets still held at June 30, 2023.

17

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Note 4.    Fair Value Measurements (Continued)

The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended June 30, 2023.

	Level 3 Fair Value Liability Measurements at
	June 30, 2023
	Inventory-  related  Payables		Commodity Derivative Contracts Losses		Debt Conversion Option		Total  Liabilities
	(In millions)
Balance, March 31, 2023	$	57	$	455	$	1	$	513
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*	4		535		(1)		538
Purchases	5		—		—		5
Sales	—		—		—		—
Settlements	(3)		(283)		—		(286)
Transfers into Level 3	2		86		—		88
Transfers out of Level 3	—		(2)		—		(2)
Ending balance, June 30, 2023	$	65	$	791	$	—	$	856

* Includes increase in unrealized losses of $545 million relating to Level 3 liabilities still held at June 30, 2023.

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended June 30, 2022.

	Level 3 Fair Value Asset Measurements at
	June 30, 2022
	Inventories  Carried at  Market		Commodity Derivative Contracts Gains		Total  Assets
	(In millions)
Balance, March 31, 2022	$	3,959	$	828	$	4,787
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*	(216)		319		103
Purchases	11,678		—		11,678
Sales	(11,993)