Basis of Presentation

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Consolidated Financial Statements of Archer-Daniels-Midland Company and its subsidiaries (“ADM” or the “Company”) included herein 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 nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K/A for the year ended December 31, 2023.

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 and impairments determined to be other than temporary in nature. 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 include allowances for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances including any accrued interest 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.

Changes to the allowance for estimated uncollectible accounts were as follows (in millions).


	Three Months Ended September 30
	2024		2023

Opening balance, June 30	$	194	$	174
Reversals, net	(21)		(11)
Recoveries	1		—
Write-offs against allowance	(4)		(3)
Foreign exchange translation adjustment	1		(2)

Closing balance, September 30	$	171	$	158

	Nine Months Ended September 30
	2024		2023

Opening balance, December 31	$	215	$	199
Provisions (reversals), net	(28)		2
Recoveries	9		1
Write-offs against allowance	(20)		(43)
Foreign exchange translation adjustment	1		(1)
Other	(6)		—
Closing balance, September 30	$	171	$	158

Provisions (reversals), net in the three and nine months ended September 30, 2024 and 2023 included reversals of prior general provisions for economic factors related to the pandemic. Write-offs against allowance in the nine months ended September 30, 2024 were primarily related to a long-term receivable related to a processing location that was sold in a prior year and trade receivables. Write-offs against allowance in the nine months ended September 30, 2023 were primarily related to a customer in Brazil and 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 as of September 30, 2024 and December 31, 2023 (in millions).


	September 30, 2024		December 31, 2023

Raw materials and supplies	$	1,892	$	1,944
Finished goods	2,766		3,026
Market inventories	6,088		6,987
Total inventories	$	10,746	$	11,957

Included in raw materials and supplies are work in process inventories which were not material as of September 30, 2024 and December 31, 2023.

Cost Method Investments

Cost method investments of $441 million and $438 million as of September 30, 2024 and December 31, 2023, respectively, were included in Other Assets in the Company’s Consolidated Balance Sheets.

Revaluation losses of $18 million in the nine months ended September 30, 2024 were related to an investment in alternative protein and precision fermentation, partially offset by an upward adjustment of $2 million in the nine months ended September 30, 2024. There were no revaluation gains or losses in the three months ended September 30, 2024 and the three and nine months ended September 30, 2023.

Revaluation gains and losses are recorded in interest and investment income in the Company’s Consolidated Statements of Earnings. As of September 30, 2024, the cumulative amounts of upward and downward adjustments were $115 million and $94 million, respectively.

Investments in Affiliates

The Company applies the equity method of accounting for investments over which the Company has the ability to exercise significant influence, including its 22.5% investment in Wilmar International Limited (“Wilmar”).

In the three months ended September 30, 2024, the Company’s investment in Wilmar was written down to its fair value of $3.7 billion, a Level 1 valuation based on the quoted Singapore Exchange market price as of September 30, 2024, resulting in a pre-tax impairment charge of $461 million recorded in asset impairment, exit, and restructuring costs within the Consolidated Statement of Earnings.

In accordance with its accounting policy, the Company evaluated several factors in its determination of whether an other-than-temporary impairment in its investment in Wilmar had occurred as of September 30, 2024. This included consideration of the severity and duration of the decline in Wilmar’s stock price as quoted on the Singapore Exchange relative to the carrying value of the investment (including a continued deterioration subsequent to September 30, 2024), latest consensus analyst forecasts, the most recent earnings announcement from Wilmar, and other factors.

Based on the Company’s consideration of available information, the Company determined that its investment in Wilmar was other-than-temporarily impaired at September 30, 2024, and as a result, recorded a pre-tax impairment charge of $461 million in the three months ended September 30, 2024. The Company will continue to monitor Wilmar’s stock price as quoted on the Singapore Exchange, latest consensus analyst forecasts, and other trends to determine if future downward adjustments are necessary.