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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table sets forth the geographic split of earnings before income taxes (in millions).
Year Ended December 31
 202420232022
United States$656 $1,844 $2,725 
Foreign1,599 2,450 2,508 
Total Earnings Before Income Taxes
$2,255 $4,294 $5,233 

Significant components of income tax expense are as follows (in millions):
Year Ended December 31
 202420232022
Current expense
 
Federal$108 $291 $379 
State8 47 97 
Foreign490 513 481 
$606 $851 $957 
Deferred expense (benefit)
 
Federal(99)(52)23 
State6 (10)7 
Foreign(37)39 (119)
$(130)$(23)$(89)
Income tax expense
$476 $828 $868 
Significant components of deferred tax liabilities and assets are as follows (in millions):
December 31, 2024December 31, 2023
Deferred tax liabilities 
Property, plant, and equipment$808 $827 
Intangibles343 358 
Right of use assets317 263 
Equity in earnings of affiliates236 214 
Debt exchange49 50 
Reserves and other accruals133 49 
Other30 137 
 $1,916 $1,898 
Deferred tax assets 
Pension and postretirement benefits$95 $111 
Inventories12 20 
Lease liabilities323 268 
Stock compensation36 42 
Foreign tax loss carryforwards386 494 
Capital loss carryforwards41 42 
State tax attributes23 25 
US carryforwards
196 27 
Other111 71 
Gross deferred tax assets1,223 1,100 
Valuation allowances(223)(216)
Net deferred tax assets$1,000 $884 
Net deferred tax liabilities$916 $1,014 
The net deferred tax liabilities are classified as follows: 
Noncurrent assets
$352 $295 
Noncurrent liabilities(1,268)(1,309)
 $(916)$(1,014)

Net Operating Losses and Valuation Allowances

The Company had $386 million and $494 million of tax assets related to net operating loss carryforwards of certain international subsidiaries at December 31, 2024 and 2023, respectively. As of December 31, 2024, approximately $314 million of these assets have no expiration date, and the remaining $72 million expire at various times through fiscal 2034. The annual usage of certain of these assets is limited to a percentage of taxable income of the respective foreign subsidiary for the year. The Company has recorded a valuation allowance of $166 million and $160 million against these tax assets at December 31, 2024 and 2023, respectively, due to the uncertainty of their realization.

The Company had $41 million of tax assets related to foreign capital loss carryforwards at each of December 31, 2024 and 2023. The Company recorded a valuation allowance of $41 million against these tax assets at each of December 31, 2024 and 2023 due to the uncertainty of their realization.
The Company had $196 million of tax assets related to U.S. income tax attributes at December 31, 2024, of which $39 million will expire between 2029 and 2034, $89 million will expire in 2044, and the remaining $68 million have no expiration date.

The Company had $23 million and $25 million of tax assets related to state income tax attributes (incentive credits and net operating loss carryforwards), net of federal tax benefit, at December 31, 2024 and 2023, respectively, a majority of which will expire between 2025 and 2029. Due to the uncertainty of realization, the Company recorded a valuation allowance of $16 million and $14 million related to state income tax assets net of federal tax benefit as of December 31, 2024 and 2023, respectively. The change in the valuation allowance was related to the increase in the state income tax attributes over what was reserved in prior years.

In assessing the need for a valuation allowance, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. During 2024, the Company increased valuation allowances primarily related to net operating loss carryforwards.
The activity related to the income tax valuation allowance for the years ended December 31, 2024, 2023, and 2022 was as follows (in millions):
Year Ended December 31
202420232022
Opening balance, January 1
$216 $209 $281 
Additions
40 58 18 
Deductions
(33)(51)(90)
Ending balance, December 31
$223 $216 $209 

Income Tax Rate Reconciliation

Reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate on earnings is as follows:
Year Ended December 31
 202420232022
US Federal Statutory rate
21.0 %21.0 %21.0 %
State income taxes, net of federal tax benefit0.2 0.9 1.4 
Foreign earnings taxed at rates other than the U.S. statutory rate2.2 (0.3)(3.8)
Foreign currency effects/remeasurement(4.8)0.5 0.6 
Withholding Tax
1.8 0.1 — 
Impairment of Investments4.3 0.5 — 
Change in Uncertain Tax Position
3.2 0.1 0.5 
Tax benefit on U.S. biodiesel credits(2.9)(1.7)(1.2)
Second-generation biofuel credit
(1.2)— — 
U.S. railroad credits
(2.5)(1.5)(1.2)
U.S. tax on foreign earnings0.6 1.2 0.2 
Other(0.8)(1.5)(0.9)
Effective income tax rate21.1 %19.3 %16.6 %

The effective tax rates for 2024 and 2023 were impacted by the tax impact of impairments on investments and the Company's geographic mix of earnings. The effective tax rate for 2022 was impacted by the Company's geographic mix of earnings and discrete tax items.

ADM’s operations in foreign jurisdictions accounted for 71%, 57%, and 48% of the Company’s total pre-tax earnings in fiscal years 2024, 2023, and 2022, respectively. The foreign rate differential was primarily due to various tax rates applicable to the income earned from the Company’s operations in Europe, Asia, South America and the Caribbean.
U.S. Legislative Changes

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the “Inflation Act”), which includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on “adjusted financial statement income,” and a one percent excise tax on net repurchases of stock for tax years beginning after December 31, 2022. While the Inflation Act has no immediate impact and is not expected to have a material adverse effect on ADM’s results of operations going forward, the Company will continue to evaluate its impact as further information becomes available.

Other Matters

It is not practicable to determine the amount of unrecognized deferred tax liability related to any remaining undistributed earnings of foreign subsidiaries and corporate joint ventures not subject to the transition tax.

The Company has elected to pay the one-time transition tax on accumulated foreign earnings over eight years. As of December 31, 2024, the Company’s remaining transition tax liability was $61 million, which will be paid in 2025.

The Company incurred U.S. taxable income of $674 million, $425 million, and $684 million related to Global Intangible Low-Taxed Income (GILTI) and deducted $16 million, $77 million, and $67 million related to Foreign Derived Intangible Income Deduction in fiscal years 2024, 2023, and 2022, respectively. The Company made an accounting policy election to treat GILTI as a period cost. The Company has recorded and will continue to record the impact of tax reform items as U.S. tax authorities issue Treasury Regulations and other guidance addressing tax reform-related changes. The additional guidance, along with the potential for additional global tax legislation changes, may affect significant deductions and income inclusions and could have a material adverse effect on the Company’s net income or cash flow.

Unrecognized Tax Benefits

The following table sets forth a rollforward of activity of unrecognized tax benefits for the year ended December 31, 2024 and 2023 (in millions).
 
December 31,
 20242023
Opening balance, January 1
$168 $151 
Net additions related to current year’s tax positions
12 2 
Net additions related to prior years’ tax positions
57 28 
Additions (adjustments) related to acquisitions2 — 
Reductions related to lapse of statute of limitations(6)(6)
Settlements with tax authorities(48)(7)
Ending balance, December 31
$185 $168 

The additions and reductions in unrecognized tax benefits shown in the table included effects related to net income and shareholders’ equity. The changes in unrecognized tax benefits did not have a material effect on the Company’s net income or cash flow. At December 31, 2024 and 2023, the Company had accrued interest and penalties on unrecognized tax benefits of $59 million and $52 million, respectively.
The Company is subject to income taxation and routine examinations in many jurisdictions around the world and frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature, and amount of deductions and the allocation of income among various jurisdictions. In its routine evaluations of the exposure associated with various tax filing positions, the Company recognizes a liability, when necessary, for estimated potential tax owed by the Company in accordance with applicable accounting standards. Resolution of the related tax positions, through negotiations with relevant tax authorities or through litigation, may take years to complete. Therefore, it is difficult to predict the timing for resolution of tax positions and the Company cannot predict or provide assurance as to the ultimate outcome of these ongoing or future examinations. However, the Company does not anticipate that the total amount of unrecognized tax benefits will increase or decrease significantly in the next twelve months. Given the long periods of time involved in resolving tax positions, the Company does not expect that the recognition of unrecognized tax benefits will have a material impact on the Company’s effective income tax rate in any given period. If the total amount of unrecognized tax benefits were recognized by the Company at one time, there would be a reduction of $183 million on the tax expense for that period.

The Company remains subject to federal examination in the U.S. for the calendar tax years 2018 through 2024. In the year ended December 31, 2014, the Company’s wholly-owned subsidiary in the Netherlands, ADM Europe B.V., received a tax assessment of $122 million, including interest, from the Netherlands tax authority challenging the transfer pricing aspects of a business reorganization implemented in the year ended December 31, 2009. On July 11, 2024, the Tax Court of Appeals issued a ruling decreasing the assessment to $52 million, including interest. The Company decided not to appeal the decision further, and therefore the Tax Court of Appeals order is final. As of December 31, 2024, the Company has paid the final assessed amount, and the issue is considered settled.