- Net earnings of $424 million
- Adjusted segment operating profit up
over 30 percent compared to prior fourth quarter
- Expected improvements across all
businesses, project launches lead to confidence for stronger
2017
Archer Daniels Midland Company (NYSE: ADM) today reported
financial results for the quarter ended December 31, 2016.
“We capitalized on an improved environment, delivering stronger
fourth quarter performance after working through difficult market
conditions earlier in the year,” said ADM Chairman and CEO Juan
Luciano. “Ag Services saw strong results in North America and weak
results from the global trade desk. The Corn business delivered a
good quarter, led by sweeteners and starches, and saw solid results
from bioproducts. Oilseeds results were comparable to last year
despite lower global crush margins. In WFSI, WILD Flavors continued
to deliver earnings growth, while some of our specialty ingredients
businesses faced challenges, which we are addressing.
“We have continued to take important steps to advance our
strategic plan by completing additional acquisitions, organic
growth projects and portfolio management actions; exceeding our
2016 target for run-rate cost savings; and progressing in our
efforts to reduce capital intensity. In line with our balanced
capital allocation framework, we returned $1.7 billion to
shareholders in dividends and share buybacks during the year.
“With expected improvements across all of our businesses
throughout the year and additional contributions from recent
projects and new facilities as they ramp up, we are optimistic
about improving results throughout 2017.”
Fourth Quarter 2016 Highlights
Quarter ended December 31 2016
2015 As Reported Adj
Adjusted1 As Reported Adj
Adjusted1 (in millions, except per share
amounts)
Earnings per share
$ 0.73 $ 0.02 $ 0.75
$ 1.19 $ (0.54 ) $
0.65 Segment Operating Profit1 Agricultural Services
$ 237 $ 8 $ 245 $ 219 $ (5 ) $ 214 Corn Processing 249 6 255 200
(74 ) 126 Oilseeds Processing 233 6 239 426 (197 ) 229 WFSI 37 1 38
38 9 47 Other 50 — 50 17
— 17
Total $ 806
$ 21 $ 827
$ 900 $ (267 )
$ 633
1 Non-GAAP financial measures; see pages 4 and 9 for
explanations and reconciliations, including after-tax amounts.
Fourth Quarter 2016 Highlights (continued)
- EPS as reported of $0.73 includes a
$0.03 per share charge related to asset impairments, restructuring
and settlements; a $0.04 per share OPEB curtailment gain; and
certain discrete tax expense items of $0.03 per share. Adjusted
EPS, which excludes these items, is $0.751.
- Trailing four-quarter-average adjusted
ROIC was 5.9 percent1, 70 basis points below annual WACC of 6.6
percent.
- The effective tax rate was 32 percent
for the quarter and 29 percent for fiscal year 2016, compared to
negative 2 percent in the year-ago quarter and 19 percent for
fiscal year 2015, due to changes in the geographic mix of earnings
and discrete tax items. (See Other Items of Note on page 3 for
further details.)
- During 2016, the company returned $1.7
billion to shareholders through dividends and share
repurchases.
1 Non-GAAP financial measures; see pages 9 and 10 for
explanations and reconciliations, including after-tax amounts.
Results of Operations
Ag Services saw good execution in North America amid strong
global demand for U.S. commodities. Merchandising and handling
results increased on strong export volumes in an improved margin
environment. However, the global trade desk incurred losses, driven
by poor execution and limited forward merchandising
opportunities.
Transportation performed well, with modest improvements in
results despite an environment of lower freight rates.
Milling and Other had another strong quarter driven by solid
product margins—including wheat merchandising and handling
income—and sales volumes.
Corn Processing posted significantly improved results. Good
performance in sweeteners and starches was driven by solid demand
in North America and improved contributions from international
operations. Higher results in bioproducts were driven by improved
ethanol margins and volumes as a result of robust domestic and
export demand. Animal nutrition posted improved results, in part
due to operational improvements in the company’s lysine production
processes.
Oilseeds Processing results were comparable to the challenging
year-ago period. In crushing and origination, South America results
were impacted by reduced volumes as a result of the short 2016
soybean and corn crops in Brazil. Global soybean crush margins were
negatively impacted by ample substitute proteins worldwide, despite
strong global crush volumes. Softseeds performance improved due to
higher volumes and margins, driven by more favorable seed supply
and better demand for oil.
Refining, packaging, biodiesel and other posted continued strong
performance, bolstered by good demand for refined oils and
biodiesel.
Results in Asia improved over the prior-year quarter, reflecting
increased ownership and improved results from Wilmar.
In WFSI, the WILD Flavors business delivered solid
year-over-year growth, with results from the Eatem foods
acquisition in North America and good sales in EMEAI and Asia
Pacific more than offsetting weaker sales in Latin America.
However, overall results declined in the quarter due to continued
challenges in certain specialty ingredients businesses. The company
began implementing the restructuring of the specialty commodities
unit, and saw ongoing market softness in hydrocolloids and fibers,
as well as the effects of a short crop in edible beans.
Other Financial operating profit improved on better claims and
underwriting results in insurance operations, and a strong
performance from ADM Investor Services.
Other Items of Note
As additional information to help clarify underlying business
performance, the tables on page 9 include both reported EPS as well
as adjusted EPS excluding significant timing effects.
Segment operating profit of $806 million as reported for the
quarter includes charges of $16 million related to asset impairment
and restructuring activities. Prior-year segment operating profit
included impairment and restructuring charges of $146 million, in
addition to a net gain of $212 million on the sale of the global
cocoa and chocolate businesses and a $185 million gain on the
revaluation of the company’s previously held investment in
Eaststarch C.V. in conjunction with the acquisition of the
remaining interest.
Corporate other results include a $38 million OPEB curtailment
gain related to changes to the U.S. retiree medical program and
restructuring charges of $3 million. Corporate unallocated costs
were up due to higher project spending in 2016 compared to 2015.
Prior-year Corporate unallocated included impairment, restructuring
and settlement charges of $25 million.
Higher effective tax rates in the fourth quarter of 2016
compared to the fourth quarter of 2015 were due to changes in the
geographic mix of earnings, as well as approximately $18 million of
discrete tax expenses in 2016, compared to approximately $100
million of discrete tax benefits in 2015, which were a result of
portfolio management actions taken in the year-ago quarter.
Conference Call Information
ADM will host a webcast on Feb. 7, 2017, at 8 a.m. Central Time
to discuss financial results and provide a company update. A
financial summary slide presentation will be available to download
approximately 60 minutes prior to the call. To listen to the
webcast or to download the slide presentation, go to www.adm.com/webcast. A replay of the webcast will
also be available for an extended period of time at www.adm.com/webcast.
Forward-Looking Statements
Some of the above statements constitute forward-looking
statements. These statements are based on many assumptions and
factors that are subject to risk and uncertainties. ADM has
provided additional information in its reports on file with the SEC
concerning assumptions and factors that could cause actual results
to differ materially from those in this presentation, and you
should carefully review the assumptions and factors in our SEC
reports. To the extent permitted under applicable law, ADM assumes
no obligation to update any forward-looking statements.
About ADM
For more than a century, the people of Archer Daniels Midland
Company (NYSE: ADM) have transformed crops into products that serve
the vital needs of a growing world. Today, we’re one of the world’s
largest agricultural processors and food ingredient providers, with
approximately 32,000 employees serving customers in more than 160
countries. With a global value chain that includes approximately
500 crop procurement locations, 250 ingredient manufacturing
facilities, 38 innovation centers and the world’s premier crop
transportation network, we connect the harvest to the home, making
products for food, animal feed, industrial and energy uses. Learn
more at www.adm.com.
Financial Tables Follow
Segment Operating Profit and Corporate Results A non-GAAP
financial measure
(unaudited)
Quarter ended Year ended
December 31 December 31 (In millions)
2016 2015 Change 2016 2015 Change
Agricultural Services
Operating Profit $ 237 $ 219 $ 18 $ 602
$ 714 $ (112 ) Merchandising and handling (excl.
specified items) 126 100 26 228 305 (77 ) Milling and other
(excluding specified item) 62 61 1 226 244 (18 ) Transportation
(excluding specified items) 57 53 4 119 135 (16 ) Gains on sales of
assets/revaluation* — 6 (6 ) 43 33 10 Impairment and restructuring
charges* (8 ) (1 ) (7 ) (14 ) (3 ) (11 )
Corn Processing
Operating Profit $ 249 $ 200 $ 49 $ 811
$ 648 $ 163 Sweeteners and starches (excl.
specified items) 156 102 54 655 457 198 Bioproducts (excluding
specified items) 99 24 75 106 149 (43 ) Gains on sales of assets* —
185 (185 ) 59 191 (132 ) Corn hedge timing effects* (5 ) (9 ) 4 (1
) (13 ) 12 Impairment and restructuring charges* (1 ) (102 ) 101 (8
) (136 ) 128
Oilseeds Processing Operating Profit $
233 $ 426 $ (193 ) $ 871 $ 1,574 $ (703
) Crushing and origination (excl. specified items) 55 86 (31 ) 386
793 (407 ) Refining, packaging, biodiesel, and other (excluding
specified items) 93 95 (2 ) 344 308 36 Asia (excluding specified
item) 91 48 43 150 188 (38 ) Gain on sale of assets* — 206 (206 ) —
306 (306 ) Impairment and restructuring charges* (6 ) (34 ) 28 (9 )
(66 ) 57 Cocoa hedge timing effects* — 25 (25 ) — 45 (45 )
Wild Flavors & Specialty Ingredients Operating Profit
(WFSI) $ 37 $ 38 $ (1 ) $ 286 $ 280
$ 6 WFSI (excluding specified items) 38 47 (9 ) 275 289 (14
) Impairment and restructuring charges* (1 ) (9 ) 8 (1 ) (9 ) 8
Gain on revaluation* — — — 12 — 12
Other Operating
Profit $ 50 $ 17 $ 33 $ 134 $ 56
$ 78 Financial 50 17 33 134 56 78
Segment
Operating Profit $ 806 $ 900 $ (94 ) $ 2,704 $ 3,272 $ (568 )
*Memo: Adjusted Segment Operating Profit $ 827 $ 633 $ 194 $ 2,623
$ 2,924 $ (301 )
Corporate Results $ (177 ) $ (199 )
$ 22 $ (882 ) $ (988 ) $ 106 LIFO credit (charge) (2
) (14 ) 12 (19 ) 2 (21 ) Interest expense - net (77 ) (71 ) (6 )
(282 ) (297 ) 15 Unallocated corporate costs (132 ) (89 ) (43 )
(457 ) (433 ) (24 ) Minority interest and other credits (charges)
34 (25 ) 59 (124 ) (260 ) 136
Earnings
Before Income Taxes $ 629 $ 701 $ (72 ) $ 1,822
$ 2,284 $ (462 )
Segment operating profit is ADM’s consolidated income from
operations before income tax excluding corporate items. Adjusted
segment operating profit is segment operating profit adjusted,
where applicable, for specified items and timing effects (see items
denoted*). Timing effects relate to hedge ineffectiveness and
significant mark-to-market hedge timing effects. Management
believes that segment operating profit and adjusted segment
operating profit are useful measures of ADM’s performance because
they provide investors information about ADM’s business unit
performance excluding corporate overhead costs as well as specified
items and significant timing effects. Segment operating profit and
adjusted segment operating profit are non-GAAP financial measures
and are not intended to replace earnings before income tax, the
most directly comparable GAAP financial measure. Segment operating
profit and adjusted segment operating profit are not measures of
consolidated operating results under U.S. GAAP and should not be
considered alternatives to income before income taxes or any other
measure of consolidated operating results under U.S. GAAP.
Consolidated Statements of Earnings
(unaudited)
Quarter ended Year ended
December 31 December 31 2016 2015 2016
2015 (in millions, except per share amounts) Revenues
$ 16,501 $ 16,445 $ 62,346 $ 67,702 Cost of products sold 15,475
15,580 58,662 63,682 Gross profit 1,026
865 3,684 4,020 Selling, general, and administrative expenses 470
489 2,045 2,039 Asset impairment, exit, and restructuring costs 19
104 55 200 Equity in earnings of unconsolidated affiliates (139 )
(103 ) (292 ) (390 ) Interest income (24 ) (19 ) (92 ) (71 )
Interest expense 80 73 293 308 Other income - net (9 ) (380 ) (147
) (350 ) Earnings before income taxes 629 701 1,822 2,284 Income
taxes (203 ) 16 (534 ) (438 ) Net earnings including
noncontrolling interests 426 717 1,288 1,846 Less: Net earnings
(losses) attributable to noncontrolling interests 2 (1 ) 9
(3 )
Net earnings attributable to ADM $
424 $ 718 $ 1,279
$ 1,849 Diluted earnings per
common share $ 0.73 $ 1.19 $
2.16 $ 2.98 Average number of shares
outstanding 583 603 591 621
Other (income)
expense - net consists of:
Losses (Gains) on sales of assets/revaluations (a) $ (13 ) $ (433 )
$ (130 ) $ (572 ) Loss on debt extinguishment — — — 189 Other - net
4 53 (17 ) 33 $ (9 ) $ (380 ) $ (147 ) $ (350
)
(a) Current period gain in Ag Services (Q4 $4 million, YTD $51
million) related principally to realized contingent consideration
from the sale of the Company’s equity investment in Gruma S.A.B de
C.V. in December 2012 of $48 million partially offset by a $5
million loss on sale of assets; Corn (Q4 $2 million gain & YTD
$60 million gain) related principally to finalization of the gain
on sale of the Company’s Brazilian sugar ethanol facilities; WFSI
(Q4 $0 & YTD $12 million) related to the gain on revaluation of
the remaining interest to settlement value in conjunction with the
acquisition of the remaining interest in Amazon Flavors; Corporate
(Q4 $0 and YTD $5 million loss) related to a loss on sale of an
equity investment; and individually insignificant disposal gains in
Oilseeds and Other (Q4 $7 million; YTD $12 million). Prior period
gain includes disposals in Ag Services (Q4 $6 million, YTD $35
million) related principally to the revaluation of the Company's
previously held investments in North Star Shipping and Minmetal in
conjunction with the acquisition of the remaining interest in Q2;
Corn (Q4 $192 million, YTD $200 million) related principally to the
revaluation of the Company’s previously held investment in
Eaststarch C.V. in conjunction with the acquisition of the
remaining interest in Q4 and the sale of the lactic business in Q2;
Oilseeds (Q4 $230 million, YTD $332 million) related to the sales
of the global cocoa business in Q4 and the global chocolate
business in Q3 and the Barcarena export terminal transaction in Q2;
and individually insignificant gains in WILD Flavors and Specialty
Ingredients and Corporate (Q4 and YTD $5 million)
Summary of Financial Condition
(Unaudited)
December 31, December 31, 2016
2015 (in millions)
Net Investment In Cash and
cash equivalents (b) $ 619 $ 910 Short-term marketable securities
(b) 296 438 Operating working capital (a) 7,384 7,074 Property,
plant, and equipment 9,758 9,853 Investments in and advances to
affiliates 4,497 3,901 Long-term marketable securities 187 439
Goodwill and other intangibles 3,703 3,688 Other non-current assets
579 447 $ 27,023 $ 26,750
Financed By
Short-term debt (b) $ 154 $ 86 Long-term debt, including current
maturities (b) 6,777 5,791 Deferred liabilities 2,887 2,958
Temporary equity 24 — Shareholders’ equity 17,181 17,915 $
27,023 $ 26,750 (a) 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). (b) 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.
Summary of Cash Flows
(unaudited)
Year ended December 31 2016 2015
(in millions)
Operating Activities Net
earnings $ 1,288 $ 1,846 Depreciation and amortization 900 882
Asset impairment charges 34 129 Gains on sales of
assets/revaluations (130 ) (572 ) Other - net (32 ) (53 ) Changes
in operating assets and liabilities (585 ) 238 Total
Operating Activities 1,475 2,470
Investing Activities
Purchases of property, plant and equipment (882 ) (1,125 ) Net
assets of businesses acquired (130 ) (479 ) Proceeds from sale of
business/assets 195 1,765 Marketable securities - net 258 35 Other
investing activities (652 ) (217 ) Total Investing Activities
(1,211 ) (21 )
Financing Activities Long-term debt
borrowings 1,041 1,252 Long-term debt payments (14 ) (994 ) Net
borrowings (payments) under lines of credit 61 (18 ) Purchases of
treasury stock (1,000 ) (2,040 ) Cash dividends (701 ) (687 ) Other
34 (162 ) Total Financing Activities (579 ) (2,649 )
Increase (decrease) in cash, cash equivalents, restricted cash, and
restricted cash equivalents (315 ) (200 ) Cash, cash equivalents,
restricted cash, and restricted cash equivalents - beginning of
period 1,003 1,203 Cash, cash equivalents, restricted
cash, and restricted cash equivalents - end of period $ 688
$ 1,003
Segment Operating Analysis
(unaudited)
Quarter ended Year ended
December 31 December 31 2016 2015 2016
2015 (in ‘000s metric tons)
Processed volumes
Oilseeds Processing 8,651 8,825 33,788 34,260 Corn Processing (1)
5,650 6,077 22,273 23,126 Total
processed volumes 14,301 14,902 56,061 57,386
Quarter ended Year ended December 31 December 31 2016
2015 2016 2015 (in millions)
Revenues Agricultural Services $ 8,066 $ 8,029 $ 27,893 $
29,682 Corn Processing 2,516 2,431 9,466 9,995 Oilseeds Processing
5,281 5,355 22,152 25,217 Wild Flavors and Specialty Ingredients
544 531 2,427 2,407 Other 94 99 408 401 Total
revenues $ 16,501 $ 16,445 $ 62,346 $ 67,702
(1) The overall decrease in corn for the quarter and year ended
December 31, 2016 relates to the disposal of the sugar ethanol
operations in May 2016 partially offset by volumes from the
acquisition of Eaststarch C.V. in November 2015.
Adjusted Earnings Per Share A non-GAAP financial
measure
(unaudited)
Quarter ended Year ended
December 31 December 31 2016 2015 2016 2015
EPS
(fully diluted) as reported $ 0.73 $
1.19 $ 2.16 $ 2.98 Adjustments:
LIFO charge (a) — 0.01 0.02 — Gains on sales of assets/revaluations
(b) — (0.70 ) (0.15 ) (0.83 ) Asset impairment, restructuring, and
settlement charges (c) 0.03 0.24 0.13 0.37 Loss on debt
extinguishment (d) — — — 0.19 Post-retirement benefit adjustment
(e) (0.04 ) — (0.04 ) — Certain discrete tax adjustments (f) 0.03
(0.12 ) 0.04 (0.10 ) Effective tax rate adjustment (g) —
0.03 — — Sub-total adjustments 0.02
(0.54 ) — (0.37 )
Adjusted earnings per share
(non-GAAP) $ 0.75 $ 0.65
$ 2.16 $ 2.61
Memo: Timing effects (gain) loss Corn (h) — 0.01 — 0.01 Cocoa (i) —
(0.04 ) — (0.06 ) Sub-total timing effects —
(0.03 ) — (0.05 ) Adjusted EPS excluding timing effects
(non-GAAP) $ 0.75 $ 0.62 $ 2.16 $ 2.56
(a) Current quarter and YTD changes in the Company’s LIFO
reserves of $2 million pretax ($1 million after tax), and $19
million pretax, ($12 million after tax), respectively, tax effected
using the Company’s U.S. effective income tax rate. Prior quarter
and YTD changes in the Company’s LIFO reserves of $14 million
pretax ($9 million after tax) and $2 million pretax ($1 million
after tax), respectively, tax effected using the Company’s U.S.
effective income tax rate. (b) Current period YTD gains of $109
million pretax ($92 million after tax), primarily related to
recovery of loss provisions and gain related to the sale of the
Company’s Brazilian sugar ethanol facilities of $59 million pretax
($59 million after tax), realized contingent consideration on the
sale of the Company’s equity investment in Gruma S.A. de C.V. in
December 2012 of $48 million pretax ($33 million after tax), and
revaluation of the remaining interest to settlement value in
conjunction with the acquisition of the remaining interest in
Amazon Flavors of $12 million ($8 million after tax), partially
offset by a $5 million pretax ($3 million after tax) loss on sale
of assets and a $5 million pretax ($5 million after tax) loss on
sale of an equity investment , tax effected using the applicable
tax rates. Prior period gains of $397 million pretax ($421 million
after tax), related to the sale of the global cocoa business and
the revaluation of the Company’s previously held investment in
Eaststarch C.V. in conjunction with the acquisition of the
remaining interest, tax effected using the applicable tax rates.
Prior period YTD gains of $530 million pretax ($515 million after
tax) also include the sale of the global chocolate business, the
revaluation of the Company’s previously held investments in North
Star Shipping and Minmetal in conjunction with the acquisition of
the remaining interest, the sale of assets to the new Barcarena
export terminal joint venture in Brazil, and sale of the lactic
acid business, tax effected using the applicable tax rates. (c)
Current quarter charges of $19 million pretax ($13 million after
tax) related to impairment of certain long-lived assets and
restructuring charges, tax effected using the applicable tax rates.
Current YTD charges of $117 million pretax ($77 million after tax),
primarily related to legal fees and settlement, impairment of
certain long-lived assets and investments, and restructuring
charges, tax effected using the applicable tax rates. Prior period
and YTD charges of $171 million pretax ($141 million after tax) and
$267 million pretax ($230 million after tax), respectively,
primarily related to impairment of certain long-lived assets,
pension and other settlement, exit costs, and restructuring
charges, tax effected using the applicable tax rates (d) Debt
extinguishment charge of $189 million pretax ($118 million after
tax), related to cash tender offers of certain of the Company’s
outstanding debentures, tax effected using the Company’s U.S.
effective income tax rate. (e) U.S. retiree medical benefit
curtailment gain of $38 million pretax ($24 million after tax), tax
effected using the Company’s U.S. effective income tax rate. (f)
Certain discrete tax adjustments unrelated to current period
earnings totaling $21 million and $24 million, related to valuation
allowances, deferred tax re-rates, and changes in assertion in the
current quarter and YTD, respectively, and $73 million and $60
million related to valuation allowances and deferred tax re-rates
in the prior period and YTD, respectively. (g) Impact to EPS due to
the change in annual effective tax rate. (h) Prior period and YTD
corn timing effect losses of $9 million pretax ($6 million after
tax) and $13 million pretax ($8 million after tax), respectively,
tax effected using the Company's U.S. effective income tax rate (i)
Prior period and YTD cocoa timing effect gains of $25 million
pretax ($26 million after tax) and $45 million pretax ($39 million
after tax), respectively, tax effected using the Company’s
effective income tax rate.
Adjusted EPS and adjusted EPS excluding timing effects reflect
ADM’s fully diluted EPS after removal of the effect on EPS as
reported of certain specified items and timing effects as more
fully described above. Management believes that these are useful
measures of ADM’s performance because they provide investors
additional information about ADM’s operations allowing better
evaluation of underlying business performance and better
period-to-period comparability. These non-GAAP financial measures
are not intended to replace or be an alternative to EPS as
reported, the most directly comparable GAAP financial measure, or
any other measures of operating results under GAAP. Earnings
amounts described above have been divided by the company’s diluted
shares outstanding for each respective quarter in order to arrive
at an adjusted EPS amount for each specified item and timing
effect.
Adjusted Return on Invested Capital A non-GAAP
financial measure
(unaudited)
Adjusted ROIC Earnings (in millions)
Four Quarters Quarter
Ended Ended Mar. 31, 2016 June 30, 2016
Sep. 30, 2016 Dec. 31, 2016 Dec. 31, 2016
Net earnings attributable to ADM $ 230 $ 284 $ 341 $ 424
$ 1,279 Adjustments: Interest expense 70 65 78 80
293 LIFO 14 88 (85 ) 2
19 Other adjustments 13
(106 ) 82 (19 )
(30 ) Total adjustments 97 47
75 63
282 Tax on adjustments (40 ) (39 ) (22 ) (2 )
(103 ) Net adjustments 57 8 53
61
179 Total Adjusted ROIC Earnings $ 287
$ 292 $ 394 $ 485
$ 1,458
Adjusted Invested Capital (in millions)
Quarter Ended Trailing
Four Mar. 31, 2016 June 30, 2016 Sep. 30,
2016 Dec. 31, 2016 Quarter Average Equity
(1) $ 17,899 $ 17,655 $ 17,538 $ 17,173
$ 17,566 +
Interest-bearing liabilities (2) 6,646 7,386 7,073 6,931
7,009 + LIFO adjustment (net of tax) 44 99 45 47
59
Other adjustments 5 (87 ) 57 10
(4
) Total Adjusted Invested Capital $ 24,594 $ 25,053
$ 24,713 $ 24,161
$ 24,630
Adjusted Return on Invested Capital
5.9 %
(1)
Excludes noncontrolling interests
(2)
Includes short-term debt, current maturities of long-term debt,
capital lease obligations, and long-term debt
Adjusted ROIC is Adjusted ROIC earnings divided by adjusted
invested capital. Adjusted ROIC earnings is ADM’s net earnings
adjusted for the after tax effects of interest expense, changes in
the LIFO reserve and other specified items. Adjusted invested
capital is the sum of ADM’s equity (excluding noncontrolling
interests) and interest-bearing liabilities adjusted for the after
tax effect of the LIFO reserve, and other specified items.
Management believes Adjusted ROIC is a useful financial measure
because it provides investors information about ADM’s returns
excluding the impacts of LIFO inventory reserves and other
specified items and increases period-to-period comparability of
underlying business performance. Management uses Adjusted ROIC to
measure ADM’s performance by comparing Adjusted ROIC to its
weighted average cost of capital (WACC). Adjusted ROIC, Adjusted
ROIC earnings and Adjusted invested capital are non-GAAP financial
measures and are not intended to replace or be alternatives to GAAP
financial measures.
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Archer Daniels Midland CompanyMedia
RelationsJackie Anderson312-634-8484orInvestor
RelationsMark Schweitzer217-451-8286
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