What changed in this filing

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Item 1. Financial Statements

2022-07-26 compared with 2022-04-26 · 622 added, 227 removed, 865 unchanged (50% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In millions, except per share amounts)

7 unchanged sentences

Interest expense 73 40 165 127

Other income – net ( 33 ) ( 33 )

Other (income) expense – net ( 83 ) 49 ( 116 ) 16

Earnings Before Income Taxes 1,519 825 2,790 1,649

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(In millions)

20 unchanged sentences

Consolidated Balance Sheets

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Current Assets

46 unchanged sentences

Consolidated Statements of Cash Flows

(In millions) Three Months Ended

(In millions) Six Months Ended

Operating Activities

21 unchanged sentences

Proceeds from sales of assets and businesses 12 58

Net assets of businesses acquired — ( 5 )

Investments in and advances to affiliates ( 58 ) ( 8 )

4 unchanged sentences

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 )

18 unchanged sentences

(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

3 unchanged sentences

Total comprehensive income 2,502

Dividends paid - $ 0.40 per share ( 226 ) ( 226 )

Cash dividends paid - $ 0.80 per share ( 453 ) ( 453 )

Share repurchases ( 2 ) ( 200 ) ( 200 )

Stock compensation expense 3 97 97

1 unchanged sentence

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

3 unchanged sentences

Total comprehensive income 1,888

Dividends paid - $ 0.37 per share ( 208 ) ( 208 )

Cash dividends paid - $ 0.74 per share ( 417 ) ( 417 )

Stock compensation expense 3 114 114

1 unchanged sentence

Other — 4 ( 2 ) — ( 5 ) ( 3 )

Balance, March 31, 2021 559 $ 2,858 $ 20,261 $ ( 2,278 ) $ 20 $ 20,861

Balance, June 30, 2021 559 $ 2,941 $ 20,762 $ ( 2,121 ) $ 21 $ 21,603

See notes to consolidated financial statements.

2 unchanged sentences

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with 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 generally accepted accounting principles for audited financial statements.

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 three months ended March 31, 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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

12 unchanged sentences

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 $ 137 million and $ 122 million at March 31, 2022 and December 31, 2021, respectively, to reflect any loss anticipated on the accounts receivable balances including any accrued interest receivables thereon.

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 $ 4 million in the three months ended March 31, 2022 and 2021, respectively.

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 $ 434 million and $ 297 million as of March 31, 2022 and December 31, 2021, respectively, were included in Other Assets in the Company’s consolidated balance sheets.

Revaluation gains of $ 34 million in the quarter ended March 31, 2022, in connection with observable third-party transactions, were recorded in investment income in the Company's consolidated statement of earnings.

There were no revaluation gains in the quarter ended March 31, 2021.

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.

Archer-Daniels-Midland Company

4 unchanged sentences

Most of the facilities have been temporarily idled since February 24, 2022.

The Company’s footprint in Russia is limited and operations have been recently 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 quarter ended March 31, 2022 related to receivables and inventories.

As of March 31, 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 a more recent market price.

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;

The temporarily idled property, plant, and equipment, which was immaterial, was not considered impaired.

1 unchanged sentence

Pending Accounting Standards

Through December 31, 2022, 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.

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.

2 unchanged sentences

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 Topic 606.

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.

5 unchanged sentences

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 ASC 606, Revenue from Contracts with Customers (Topic 606) and does not disclose information about remaining performance obligations that have original expected durations 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 $ 175 million and $ 104 million for the three months ended March 31, 2022 and 2021, respectively.

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 unchanged sentences

Contract liabilities relate to advance payments from customers for goods and services that the Company has yet to provide.

Contract liabilities of $ 574 million and $ 581 million as of March 31, 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 $ 324 million and $ 282 million for the three months ended March 31, 2022 and 2021, respectively.

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 months ended March 31, 2022 and 2021.

Three Months Ended March 31, 2022

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)

18 unchanged sentences

Revenues (Continued)

Three Months Ended March 31, 2021

Six Months Ended June 30, 2022

Topic 606 Revenue Topic 815 (1)

15 unchanged sentences

Total Revenues $ 13,666 $ 384 $ 14,050 $ 36,884 $ 50,934

Three Months Ended June 30, 2021

Topic 606 Revenue Topic 815 (1)

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 — 974

Total Carbohydrate Solutions 2,423 — 2,423 397 2,820

Human Nutrition 848 — 848 — 848

Animal Nutrition 885 — 885 — 885

Total Nutrition 1,733 — 1,733 — 1,733

Other Business 102 — 102 — 102

Total Revenues $ 5,811 $ 151 $ 5,962 $ 16,964 $ 22,926

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Revenues (Continued)

Six Months Ended June 30, 2021

Topic 606 Revenue Topic 815 (1)

Point in Time Over Time Total Revenue Revenues

(In millions)

Ag Services and Oilseeds

Ag Services $ 1,464 $ 255 $ 1,719 $ 21,242 $ 22,961

Crushing 216 — 216 5,353 5,569

Refined Products and Other 1,171 — 1,171 3,577 4,748

Total Ag Services and Oilseeds 2,851 255 3,106 30,172 33,278

Carbohydrate Solutions

Starches and Sweeteners 2,810 — 2,810 781 3,591

Vantage Corn Processors 1,452 — 1,452 — 1,452

Total Carbohydrate Solutions 4,262 — 4,262 781 5,043

Human Nutrition 1,602 — 1,602 — 1,602

Animal Nutrition 1,694 — 1,694 — 1,694

Total Nutrition 3,296 — 3,296 — 3,296

Other Business 202 — 202 — 202

Total Revenues $ 10,611 $ 255 $ 10,866 $ 30,953 $ 41,819

(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.

25 unchanged sentences

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 March 31, 2022 and December 31, 2021.

Fair Value Measurements at March 31, 2022

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, 2022 and December 31, 2021.

Fair Value Measurements at June 30, 2022

Quoted Prices in

16 unchanged sentences

Foreign currency contracts — 223 — 223

Interest rate contracts — 1 — 1

Debt conversion option — — 11 11

53 unchanged sentences

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 March 31, 2022.

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

March 31, 2022

June 30, 2022

Market Commodity

(In millions)

Balance, December 31, 2021 $ 3,004 $ 460 $ 3,464

Balance, March 31, 2022 $ 3,959 $ 828 $ 4,787

Total increase (decrease) in net realized/unrealized gains included in cost of products sold*

5 unchanged sentences

Transfers out of Level 3 ( 405 ) ( 65 ) ( 470 )

Ending balance, March 31, 2022 $ 3,959 $ 828 $ 4,787

* Includes increase in unrealized gains of $ 1.4 billion relating to Level 3 assets still held at March 31, 2022.

Ending balance, June 30, 2022 $ 3,245 $ 880 $ 4,125

* Includes increase in unrealized gains of $ 253 million relating to Level 3 assets still held at June 30, 2022.

** Inventories carried at market includes Ukraine inventory as discussed in Note 1.

2 unchanged sentences

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 March 31, 2022.

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, 2022.

Level 3 Fair Value Liability Measurements at

March 31, 2022

June 30, 2022

Payables Commodity

1 unchanged sentence

(In millions)

Balance, December 31, 2021 $ 106 $ 815 $ 15 $ 936

Balance, March 31, 2022 $ 53 $ 1,856 $ 30 $ 1,939

Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*

5 unchanged sentences

Transfers out of Level 3 — ( 99 ) — ( 99 )

Ending balance, March 31, 2022 $ 53 $ 1,856 $ 30 $ 1,939

* Includes increase in unrealized losses of $ 1.4 billion relating to Level 3 liabilities still held at March 31, 2022.

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 March 31, 2021.

Ending balance, June 30, 2022 $ 55 $ 960 $ 11 $ 1,026

* Includes increase in unrealized losses of $ 294 million relating to Level 3 liabilities still held at June 30, 2022.

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, 2021.

Level 3 Fair Value Asset Measurements at

March 31, 2021

June 30, 2021

Market Commodity

(In millions)

Balance, March 31, 2021 $ 3,070 $ 684 $ 3,754

Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 75 273 348

Purchases 7,163 — 7,163

Sales ( 7,356 ) — ( 7,356 )

Settlements — ( 395 ) ( 395 )

Transfers into Level 3 410 22 432

Transfers out of Level 3 ( 538 ) ( 33 ) ( 571 )

Ending balance, June 30, 2021 $ 2,824 $ 551 $ 3,375

* Includes increase in unrealized gains of $ 380 million relating to Level 3 assets still held at June 30, 2021.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

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, 2021.

Level 3 Fair Value Liability Measurements at

June 30, 2021

Payables Commodity

Losses Foreign Currency Derivative Contracts Losses Debt Conversion Option

(In millions)

Balance, March 31, 2021 $ 21 $ 648 $ 11 $ 54 $ 734

Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* — 681 — ( 30 ) 651

Purchases 17 — — — 17

Settlements — ( 447 ) — — ( 447 )

Transfers into Level 3 — 170 — — 170

Transfers out of Level 3 — ( 15 ) ( 11 ) — ( 26 )

Ending balance, June 30, 2021 $ 38 $ 1,037 $ — $ 24 $ 1,099

* Includes increase in unrealized losses of $ 683 million relating to Level 3 liabilities still held at June 30, 2021.

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

Level 3 Fair Value Asset Measurements at

June 30, 2022

Market Commodity

(In millions)

Balance, December 31, 2021 $ 3,004 $ 460 $ 3,464

5 unchanged sentences

Transfers out of Level 3 ( 661 ) ( 77 ) ( 738 )

Ending balance, March 31, 2021 $ 3,070 $ 684 $ 3,754

* Includes increase in unrealized gains of $ 847 million relating to Level 3 assets still held at March 31, 2021.

Ending balance, June 30, 2022 $ 3,245 $ 880 $ 4,125

* Includes increase in unrealized gains of $ 1.7 billion relating to Level 3 assets still held at June 30, 2022.

** Inventories carried at market includes Ukraine inventory as discussed in Note 1.

Archer-Daniels-Midland Company

1 unchanged sentence

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 March 31, 2021.

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

Level 3 Fair Value Liability Measurements at

March 31, 2021

June 30, 2022

Payables Commodity

Losses Debt Conversion Option

(In millions)

Balance, December 31, 2021 $ 106 $ 815 $ 15 $ 936

Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* ( 4 ) 1,669 ( 4 ) 1,661

Purchase 9 — — 9

Sales ( 56 ) — — ( 56 )

Settlements — ( 1,729 ) — ( 1,729 )

Transfers into Level 3 — 322 — 322

Transfers out of Level 3 — ( 117 ) — ( 117 )

Ending balance, June 30, 2022 $ 55 $ 960 $ 11 $ 1,026

* Includes increase in unrealized losses of $ 1.7 billion relating to Level 3 liabilities still held at June 30, 2022.

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2021.

Level 3 Fair Value Asset Measurements at

June 30, 2021

Market Commodity

(In millions)

Balance, December 31, 2020 $ 2,183 $ 859 $ 3,042

Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 805 516 1,321

Purchases 13,548 — 13,548

Sales ( 13,988 ) — ( 13,988 )

Settlements — ( 823 ) ( 823 )

Transfers into Level 3 926 45 971

Transfers out of Level 3 ( 650 ) ( 46 ) ( 696 )

Ending balance, June 30, 2021 $ 2,824 $ 551 $ 3,375

* Includes increase in unrealized gains of $ 1.2 billion relating to Level 3 assets still held at June 30, 2021.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

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 six months ended June 30, 2021.

Level 3 Fair Value Liability Measurements at

June 30, 2021

Payables Commodity

Losses Foreign Currency Derivative Contracts Losses Debt Conversion Option

7 unchanged sentences

Transfers out of Level 3 — ( 154 ) ( 11 ) — ( 165 )

Ending balance, March 31, 2021 $ 21 $ 648 $ 11 $ 54 $ 734

* Includes increase in unrealized losses of $ 383 million relating to Level 3 liabilities still held at March 31, 2021.

Ending balance, June 30, 2021 $ 38 $ 1,037 $ — $ 24 $ 1,099

* Includes increase in unrealized losses of $ 1.1 billion relating to Level 3 liabilities still held at June 30, 2021.

Transfers into Level 3 of assets and liabilities previously classified in Level 2 were due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts rising above the 10% threshold.

8 unchanged sentences

Fair Value Measurements (Continued)

The following table sets forth the weighted average percentage of the unobservable price components included in the Company’s Level 3 valuations as of March 31, 2022 and December 31, 2021.

The following table sets forth the weighted average percentage of the unobservable price components included in the Company’s Level 3 valuations as of June 30, 2022 and December 31, 2021.

The Company’s Level 3 measurements may include basis only, transportation cost only, or both price components.

As an example, for Level 3 inventories with basis, the unobservable component as of March 31, 2022 is a weighted average 28.9 % of the total price for assets and 13.9 % of the total price for liabilities.

As an example, for Level 3 inventories with basis, the unobservable component as of June 30, 2022 is a weighted average 37.3 % of the total price for assets and 20.1 % of the total price for liabilities.

Weighted Average % of Total Price

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Component Type Assets Liabilities Assets Liabilities

17 unchanged sentences

Inventory is not a derivative and therefore fair values of and changes in fair values of inventories are not included in the tables below.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

The following table sets forth the fair value of derivatives not designated as hedging instruments as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

The following table sets forth the fair value of derivatives not designated as hedging instruments as of June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

Assets Liabilities Assets Liabilities

5 unchanged sentences

Total $ 2,152 $ 2,136 $ 1,493 $ 1,890

The following tables set forth the pre-tax gains (losses) on derivatives not designated as hedging instruments that have been included in the consolidated statements of earnings for the three months ended March 31, 2022 and 2021.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

Other expense (income) - net

1 unchanged sentence

(In millions) Revenues products sold expense

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Consolidated Statement of Earnings $ 27,284 $ 25,184 $ ( 83 ) $ 73

4 unchanged sentences

Total gain (loss) recognized in earnings $ 13 $ 967 $ 240 $ 19 $ 1,239

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Consolidated Statement of Earnings $ 22,926 $ 21,463 $ 49 $ 40

4 unchanged sentences

Total gain (loss) recognized in earnings $ ( 43 ) $ ( 459 ) $ ( 45 ) $ 30 $ ( 517 )

Changes in the market value of inventories of certain merchandisable agricultural commodities, forward cash purchase and sales contracts, exchange-traded futures and exchange-traded and OTC options contracts are recognized in earnings immediately 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 on the purpose of the contract.

Other expense (income) - net

Cost of Interest

(In millions) Revenues products sold expense

Six Months Ended June 30, 2022

Consolidated Statement of Earnings $ 50,934 $ 46,937 $ ( 116 ) $ 165

Pre-tax gains (losses) on:

Foreign Currency Contracts $ ( 25 ) $ 348 $ 263 $ —

Commodity Contracts — ( 39 ) — —

Debt Conversion Option — — — 4

Total gain (loss) recognized in earnings $ ( 25 ) $ 309 $ 263 $ 4 $ 551

Six Months Ended June 30, 2021

Consolidated Statement of Earnings $ 41,819 $ 38,808 $ 16 $ 127

Pre-tax gains (losses) on:

Foreign Currency Contracts $ ( 13 ) $ ( 48 ) $ 75 $ —

Commodity Contracts — ( 1,455 ) — —

Debt Conversion Option — — — 10

Total gain (loss) recognized in earnings $ ( 13 ) $ ( 1,503 ) $ 75 $ 10 $ ( 1,431 )

Archer-Daniels-Midland Company

1 unchanged sentence

Derivative Instruments and Hedging Activities (Continued)

Derivatives Designated as Cash Flow and Net Investment Hedging Strategies

The Company had certain derivatives designated as cash flow and net investment hedges as of March 31, 2022 and December 31, 2021.

The Company had certain derivatives designated as cash flow and net investment hedges as of June 30, 2022 and December 31, 2021.

For derivative instruments that are designated and qualify as net investment hedges, foreign exchange gains and losses related to changes in foreign currency exchange rates are deferred in AOCI until the underlying investment is divested.

The Company uses cross-currency swaps and foreign exchange forwards designated as net investment hedges to protect the Company’s investment in a foreign subsidiary against changes in foreign currency exchange rates.

The Company executed USD-fixed to Euro-fixed cross-currency swaps with an aggregate notional amount of $ 0.8 billion and $ 1.2 billion as of March 31, 2022 and December 31, 2021, respectively, and foreign exchange forwards with an aggregate notional amount of $ 2.3 billion and $ 2.6 billion as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 and December 31, 2021, the Company had after-tax losses of $ 24 million and $ 44 million in AOCI, respectively, related to foreign exchange gains and losses from these net investment hedge transactions.

The Company executed USD-fixed to Euro-fixed cross-currency swaps with an aggregate notional amount of $ 0.8 billion and $ 1.2 billion as of June 30, 2022 and December 31, 2021, respectively, and foreign exchange forwards with an aggregate notional amount of $ 2.5 billion and $ 2.6 billion as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022 and December 31, 2021, the Company had after-tax gains of $ 125 million and after-tax losses of $ 44 million in AOCI, respectively, related to foreign exchange gains and losses from these net investment hedge transactions.

The amount is deferred in AOCI until the underlying investment is divested.

5 unchanged sentences

The amounts are recorded in revenues as the related results are also recorded in revenues.

As of March 31, 2022 and December 31, 2021, the Company had interest rate swaps maturing on various dates with aggregate notional amounts of $ 1.0 billion.

As of June 30, 2022 and December 31, 2021, the Company had interest rate swaps maturing on various dates with aggregate notional amounts of $ 0.8 billion and $ 1.0 billion, respectively.

The Company also uses swap locks designated as cash flow hedges to hedge the changes in the forecasted interest payments due to changes in the benchmark rate leading up to future bond issuance dates.

1 unchanged sentence

The deferred gains and losses will be recognized in interest expense over the period in which the related interest payments will be paid.

As of March 31, 2022 and December 31, 2021, the Company executed swap locks maturing on various dates with an aggregate notional amount of $ 400 million.

As of March 31, 2022 and December 31, 2021, the Company had after-tax gains of $ 49 million and $ 35 million in AOCI, respectively, related to the interest rate swaps and swap locks.

As of June 30, 2022 and December 31, 2021, the Company executed swap locks maturing on various dates with an aggregate notional amount of $ 400 million.

As of June 30, 2022 and December 31, 2021, the Company had after-tax gains of $ 70 million and $ 35 million in AOCI, respectively, related to the interest rate swaps and swap locks.

The Company expects to recognize amounts deferred in AOCI in its consolidated statement of earnings during the life of the debt instruments.

For each of the hedge programs described below, the derivatives are designated as cash flow hedges.

The changes in the market value of such derivative contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item.

Once the hedged item is recognized in earnings, the gains and losses arising from the hedge are reclassified from AOCI to either revenues or cost of products sold, as applicable.

As of March 31, 2022 and December 31, 2021, the Company had after-tax gains of $ 370 million and $ 161 million in AOCI, respectively, related to gains and losses from these programs.

The Company expects to recognize $ 370 million of the March 31, 2022 after-tax gains in its consolidated statement of earnings during the next 12 months.

Archer-Daniels-Midland Company

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Derivative Instruments and Hedging Activities (Continued)

For each of the hedge programs described below, the derivatives are designated as cash flow hedges.

The changes in the market value of such derivative contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item.

Once the hedged item is recognized in earnings, the gains and losses arising from the hedge are reclassified from AOCI to either revenues or cost of products sold, as applicable.

As of June 30, 2022 and December 31, 2021, the Company had after-tax gains of $ 282 million and $ 161 million in AOCI, respectively, related to gains and losses from these programs.

The Company expects to recognize $ 282 million of the June 30, 2022 after-tax gains in its consolidated statement of earnings during the next 12 months.

The Company uses futures or options contracts to hedge the purchase price of anticipated volumes of corn to be purchased and processed in a future month.

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During the past 12 months, the Company hedged between 17 % and 33 % of its monthly grind.

At March 31, 2022, the Company had designated hedges representing between 0 % and 29 % of its anticipated monthly grind of corn for the next 12 months.

At June 30, 2022, the Company had designated hedges representing between 1 % and 32 % of its anticipated monthly grind of corn for the next 12 months.

The Company, from time to time, also uses futures, options, and swaps to hedge the sales price of certain ethanol sales contracts.

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The objective of these hedging programs is to reduce the variability of cash flows associated with the Company’s sales of ethanol.

During the past 12 months and as of March 31, 2022, the Company had no hedges related to ethanol sales under these programs.

During the past 12 months and as of June 30, 2022, the Company had no hedges related to ethanol sales under these programs.

The Company uses futures and options contracts to hedge the purchase price of the anticipated volumes of soybeans to be purchased and processed in a future month for certain of its U.S.

2 unchanged sentences

During the past 12 months, the Company hedged between 57 % and 100 % of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities.

At March 31, 2022, the Company had designated hedges representing between 0 % and 100 % of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities over the next 12 months.

At June 30, 2022, the Company had designated hedges representing between 0 % and 100 % of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities over the next 12 months.

The Company uses futures and OTC swaps to hedge the purchase price of anticipated volumes of natural gas consumption in a future month for certain of its facilities in North America and Europe, subject to certain program limits.

During the past 12 months, the Company hedged between 0 % and 121 % of the anticipated monthly natural gas consumption at the designated facilities.

At March 31, 2022, the Company had designated hedges representing between 0 % and 95 % of the anticipated monthly natural gas consumption over the next 12 months.

The following table sets forth the fair value of derivatives designated as hedging instruments as of March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

At June 30, 2022, the Company had designated hedges representing between 0 % and 111 % of the anticipated monthly natural gas consumption over the next 12 months.

The following table sets forth the fair value of derivatives designated as hedging instruments as of June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

Assets Liabilities Assets Liabilities

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Derivative Instruments and Hedging Activities (Continued)

The following table sets forth the pre-tax gains (losses) on derivatives designated as hedging instruments that have been included in the consolidated statements of earnings for the three months ended March 31, 2022 and 2021.

Cost of products sold

(In millions) Revenues

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Consolidated Statement of Earnings $ 27,284 $ 25,184

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Total gain (loss) recognized in earnings $ — $ 150 $ 150

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Consolidated Statement of Earnings $ 22,926 $ 21,463

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Total gain (loss) recognized in earnings $ ( 1 ) $ 239 $ 238

Other Net Investment Hedging Strategies

The Company has designated € 2.6 billion and € 1.8 billion of its outstanding long-term debt and commercial paper borrowings at March 31, 2022 and December 31, 2021, respectively, as hedges of its net investment in a foreign subsidiary.

As of March 31, 2022 and December 31, 2021, the Company had after-tax gains of $ 113 million and $ 55 million in AOCI, respectively, related to foreign exchange gains and losses from these net investment hedge transactions.

The amount is deferred in AOCI until the underlying investment is divested.

Cost of products sold

(In millions) Revenues

Six Months Ended June 30, 2022

Consolidated Statement of Earnings $ 50,934 $ 46,937

Effective amounts recognized in earnings

Pre-tax gains (losses) on:

Commodity Contracts $ — $ 248

Total gain (loss) recognized in earnings $ — $ 248 $ 248

Six Months Ended June 30, 2021

Consolidated Statement of Earnings $ 41,819 $ 38,808

Effective amounts recognized in earnings

Pre-tax gains (losses) on:

Commodity Contracts $ — $ 328

Interest Contracts ( 15 ) —

Total gain (loss) recognized in earnings $ ( 15 ) $ 328 $ 313

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

Other Net Investment Hedging Strategies

The Company has designated € 1.8 billion of its outstanding long-term debt and commercial paper borrowings at June 30, 2022 and December 31, 2021 as hedges of its net investment in a foreign subsidiary.

As of June 30, 2022 and December 31, 2021, the Company had after-tax gains of $ 227 million and $ 55 million in AOCI, respectively, related to foreign exchange gains and losses from these net investment hedge transactions.

The amount is deferred in AOCI until the underlying investment is divested.

Other Current Assets

The following table sets forth the items in other current assets:

March 31, December 31,

June 30, December 31,

(In millions)

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(1) The Company provides financing to certain suppliers, primarily Brazilian farmers, to finance a portion of the suppliers’ production costs.

The amounts are reported net of allowances of $ 5 million and $ 4 million at March 31, 2022 and December 31, 2021, respectively.

Interest earned on financing receivables of $ 4 million for the three months ended March 31, 2022 and 2021, respectively, is included in investment income in the consolidated statements of earnings.

(2) Non-trade receivables included $ 27 million of reinsurance recoverables as of March 31, 2022 and December 31, 2021, respectively.

The amounts are reported net of allowances of $ 3 million and $ 4 million at June 30, 2022 and December 31, 2021, respectively.

Interest earned on financing receivables of $ 4 million and $ 8 million for the three and six months ended June 30, 2022, respectively and $ 2 million and $ 6 million for the three and six months ended June 30, 2021, respectively, is included in investment income in the consolidated statements of earnings.

(2) Non-trade receivables included $ 29 million and $ 27 million of reinsurance recoverables as of June 30, 2022 and December 31, 2021, respectively.

Archer-Daniels-Midland Company

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The following table sets forth the items in accrued expenses and other payables:

March 31, December 31,

June 30, December 31,

(In millions)

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The Company expects to apply an amount equal to the net proceeds to finance or refinance eligible green projects and/or eligible social projects.

At March 31, 2022, the fair value of the Company’s long-term debt exceeded the carrying value by $ 1.0 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards).

At March 31, 2022, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling $ 14.3 billion, of which $ 8.2 billion was unused.

During the quarter ended March 31, 2022, the Company expanded its combined U.S.

and European commercial paper borrowing programs from $ 5.0 billion to $ 6.5 billion under the same terms, against which there was $ 0.7 billion commercial paper outstanding at March 31, 2022.

During the quarter ended March 31, 2022, the Company also added $ 1.5 billion of short-term borrowings at an average interest rate of 1.64 % due in September 2022.

At June 30, 2022, the fair value of the Company’s long-term debt exceeded the carrying value by $ 0.2 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards).

At June 30, 2022, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling $ 14.7 billion, of which $ 10.6 billion was unused.

During the six months ended June 30, 2022, the Company expanded its combined U.S.

and European commercial paper borrowing programs from $ 5.0 billion to $ 6.5 billion under the same terms, against which there was $ 0.2 billion commercial paper outstanding at June 30, 2022.

During the six months ended June 30, 2022, the Company also added $ 1.5 billion of short-term notes at an average interest rate of 1.64 % due in September 2022.

The Company has accounts receivable securitization programs (the “Programs”).

The Programs provide the Company with up to $ 2.3 billion in funding resulting from the sale of accounts receivable with $ 24 million unused capacity as of March 31, 2022 (see Note 14 for more information about the Programs).

The Programs provide the Company with up to $ 2.6 billion in funding resulting from the sale of accounts receivable with $ 0.9 billion unused capacity as of June 30, 2022 (see Note 14 for more information about the Programs).

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

The Company’s effective tax rate was 16.3 % for the three months ended March 31, 2022 compared to 15.9 % for the three months ended March 31, 2021.

The change in the rate was primarily due to changes in the geographic mix of earnings.

The Company’s effective tax rates were 18.4 % and 17.4 % for the three and six months ended June 30, 2022, respectively, compared to 13.7 % and 14.8 % for the three and six months ended June 30, 2021, respectively.

The change in the rate was primarily due to changes in the geographic mix of earnings and the impact of discrete tax items.

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.

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Toepfer Argentina SRL), received tax assessments challenging transfer prices used to price grain exports for the tax years 1999 through 2011 and 2014.

As of March 31, 2022, these assessments totaled $ 8 million in tax and up to $ 36 million in interest (adjusted for variation in currency exchange rates).

As of June 30, 2022, these assessments totaled $ 7 million in tax and up to $ 33 million in interest (adjusted for variation in currency exchange rates).

The Argentine tax authorities conducted a review of income and other taxes paid by large exporters and processors of cereals and other agricultural commodities resulting in allegations of income tax evasion.

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To date, the Company has not received assessments for closed years subsequent to 2014.

While the statute of limitations has expired for tax years 2012 and 2013, the Company cannot rule out receiving additional assessments challenging transfer prices used to price grain exports for years subsequent to 2014, and estimates that these potential assessments could be approximately $ 104 million in tax and $ 42 million in interest (adjusted for variation in currency exchange rates as of March 31, 2022).

While the statute of limitations has expired for tax years 2012 and 2013, the Company cannot rule out receiving additional assessments challenging transfer prices used to price grain exports for years subsequent to 2014, and estimates that these potential assessments could be approximately $ 92 million in tax and $ 43 million in interest (adjusted for variation in currency exchange rates as of June 30, 2022).

The Company believes that it has appropriately evaluated the transactions underlying these assessments, and has concluded, based on Argentine tax law, that its tax position would be sustained, and accordingly, has not recorded a tax liability for these assessments.

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In 2014, the Company’s wholly-owned subsidiary in the Netherlands, ADM Europe B.V., received a tax assessment from the Netherlands tax authority challenging the transfer pricing aspects of a 2009 business reorganization, which involved two of its subsidiary companies in the Netherlands.

As of March 31, 2022, this assessment was $ 90 million in tax and $ 32 million in interest (adjusted for variation in currency exchange rates).

As of June 30, 2022, this assessment was $ 81 million in tax and $ 29 million in interest (adjusted for variation in currency exchange rates).

On April 23, 2020, the court issued an unfavorable ruling and in October 2020, assigned a third party expert to establish a valuation by early 2021.

During the second quarter of 2021, the third party expert issued a final valuation.

The Company expects the court to issue a ruling on this matter in the second quarter of 2022.

The Company expects the court to issue a ruling on this matter in the second half of 2022.

Subsequent appeals may take an extended period of time and could result in additional financial impacts of up to the entire amount of the assessment.

The Company has carefully evaluated the underlying transactions and has concluded that the amount of gain recognized on the reorganization for tax purposes was appropriate.

As of March 31, 2022, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation.

As of June 30, 2022, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation.

Archer-Daniels-Midland Company

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Accumulated Other Comprehensive Income

The following tables set forth the changes in AOCI by component for the three months ended March 31, 2022 and the reclassifications out of AOCI for the three months ended March 31, 2022 and 2021:

Three months ended March 31, 2022

The following tables set forth the changes in AOCI by component for the three and six months ended June 30, 2022 and the reclassifications out of AOCI for the three and six months ended June 30, 2022 and 2021:

Three months ended June 30, 2022

Foreign Currency Translation Adjustment Deferred Gain (Loss) on Hedging Activities Pension Liability Adjustment Unrealized Gain (Loss) on Investments Total

(In millions)

Balance at March 31, 2022 $ ( 2,125 ) $ 460 $ ( 117 ) $ ( 7 ) $ ( 1,789 )

Other comprehensive income (loss) before reclassifications ( 339 ) 70 8 ( 8 ) ( 269 )

Gain (loss) on net investment hedges 336 — — — 336

Amounts reclassified from AOCI — ( 150 ) ( 8 ) — ( 158 )

Tax effect ( 84 ) 2 ( 4 ) 1 ( 85 )

Net of tax amount ( 87 ) ( 78 ) ( 4 ) ( 7 ) ( 176 )

Balance at June 30, 2022 $ ( 2,212 ) $ 382 $ ( 121 ) $ ( 14 ) $ ( 1,965 )

Six months ended June 30, 2022

Foreign Currency Translation Adjustment Deferred Gain (Loss) on Hedging Activities Pension Liability Adjustment Unrealized Gain (Loss) on Investments Total

(In millions)

Balance at December 31, 2021 $ ( 2,248 ) $ 225 $ ( 147 ) $ ( 2 ) $ ( 2,172 )

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Net of tax amount 36 157 26 ( 12 ) 207

Balance at March 31, 2022 $ ( 2,125 ) $ 460 $ ( 117 ) $ ( 7 ) $ ( 1,789 )

Balance at June 30, 2022 $ ( 2,212 ) $ 382 $ ( 121 ) $ ( 14 ) $ ( 1,965 )

A rcher-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Accumulated Other Comprehensive Income (Continued)

Amount reclassified from AOCI

Three months ended March 31, Affected line item in the consolidated statements of earnings

Three months ended June 30, Six months ended June 30, Affected line item in the consolidated statements of earnings

Details about AOCI components 2022 2021 2022 2021

4 unchanged sentences

( 150 ) ( 238 ) ( 248 ) ( 313 ) Total before tax

33 57 52 79 Tax

$ ( 117 ) $ ( 181 ) $ ( 196 ) $ ( 234 ) Net of tax

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The Company’s accounting policy is to release the income tax effects from AOCI when the individual units of account are sold, terminated, or extinguished.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Other (Income) Expense - Net

The following table sets forth the items in other (income) expense:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

(In millions)

Gains on sales of assets $ ( 5 ) $ ( 28 ) $ ( 5 ) $ ( 39 )

Pension settlement — 82 — 82

Other – net ( 78 ) ( 5 ) ( 111 ) ( 27 )

Other (Income) Expense - Net $ ( 83 ) $ 49 $ ( 116 ) $ 16

Gains on sales of assets in the three months ended March 31, 2021 consisted of gains on disposals of individually insignificant assets in the ordinary course of business.

Other - net included the non-service components of net pension benefit income of $ 6 million, foreign exchange gains, and other income in the three months ended March 31, 2022 and 2021.

Gains on sales of assets in the three and six months ended June 30, 2022 and 2021 consisted of gains on disposals of individually insignificant assets in the ordinary course of business.

Pension settlement in the three and six months ended June 30, 2021 was related to the purchase of group annuity contracts that irrevocably transferred the future benefit obligations and annuity administration for certain salaried and hourly retirees and terminated vested participants under the Company’s ADM Retirement Plan and ADM Pension Plan for Hourly-Wage Employees to independent third parties.

Other - net in the three and six months ended June 30, 2022 included the non-service components of net pension benefit income of $ 6 million and $ 12 million, respectively, a $ 50 million one-time payment from the USDA Biofuel Producer Recovery Program, foreign exchange gains, and other expense.

Other - net in the three and six months ended June 30, 2021 included the non-service components of net pension benefit income of $ 5 million and $ 11 million, respectively, foreign exchange gains, and other income and expense.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Segment Information

13 unchanged sentences

Segment Information (Continued)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In millions) 2022 2021 2022 2021

29 unchanged sentences

Segment Information (Continued)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In millions) 2022 2021 2022 2021

11 unchanged sentences

Earnings before income taxes $ 1,519 $ 825 $ 2,790 $ 1,649

(1) Current charges related to the impairment of certain Ukraine assets partially offset by an insurance settlement.

Prior quarter charges were related to the impairment of certain long-lived assets, restructuring, and a legal settlement.

(1) Consists of gains on the sale of certain assets in all periods presented.

(2) Current quarter and year-to-date charges related primarily to the impairment of certain Ukraine assets.

Current year-to-date charges was partially offset by an insurance settlement.

Prior quarter and year-to-date charges were related to the impairment of certain long-lived assets and restructuring.

Prior year-to-date charges also included a legal settlement.

Asset Impairment, Exit, and Restructuring Costs

Asset impairment, exit, and restructuring costs in the three months ended March 31, 2022 consisted of immaterial charges.

Asset impairment, exit, and restructuring costs in the three months ended March 31, 2021 consisted of $ 31 million of impairments related to certain long-lived assets and $ 23 million of restructuring charges, presented as specified items within segment operating profit, and $ 5 million of restructuring charges in Corporate.

Asset impairment, exit, and restructuring costs in the three and six months ended June 30, 2022 consisted of immaterial charges.

Asset impairment, exit, and restructuring costs in the three months ended June 30, 2021 consisted of $ 23 million of impairments related to certain long-lived assets and $ 1 million of restructuring charges, presented as specified items within segment operating profit, and a restructuring adjustment of $ 1 million in Corporate.

Asset impairment, exit, and restructuring costs in the six months ended June 30, 2021 consisted of $ 54 million of impairments related to certain long-lived assets and $ 24 million of restructuring charges, presented as specified items within segment operating profit, and $ 4 million of restructuring charges in Corporate.

Sale of Accounts Receivable

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ADM Receivables transfers certain of the purchased accounts receivable to each of the First Purchasers together with a security interest in all of its right, title, and interest in the remaining purchased accounts receivable.

In exchange, ADM Receivables receives a cash payment of up to $ 1.6 billion for the accounts receivable transferred.

The First Program terminates on May 18, 2022, unless extended.

In exchange, ADM Receivables receives a cash payment of up to $ 1.8 billion, as amended, for the accounts receivable transferred.

The First Program terminates on November 18, 2022, unless extended.

The Company also has an accounts receivable securitization program (the “Second Program”) with certain commercial paper conduit purchasers and committed purchasers (collectively, the “Second Purchasers”).

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ADM Ireland Receivables transfers certain of the purchased accounts receivable to each of the Second Purchasers together with a security interest in all of its right, title, and interest in the remaining purchased accounts receivable.

In exchange, ADM Ireland Receivables receives a cash payment of up to $ 0.7 billion (€ 0.6 billion) for the accounts receivables transferred.

In exchange, ADM Ireland Receivables receives a cash payment of up to $ 0.8 billion (€ 0.8 billion), as amended, for the accounts receivables transferred.

The Second Program terminates on February 16, 2023, unless extended.

Under the First and Second Programs (collectively, the “Programs”), ADM Receivables and ADM Ireland Receivables use the cash proceeds from the transfer of receivables to the First Purchasers and Second Purchasers (collectively, the “Purchasers”) and other consideration, as applicable, to finance the purchase of receivables from the Company and the ADM subsidiaries originating the receivables.

The Company accounts for these transfers as sales.

The Company acts as a servicer for the transferred receivables.

At March 31, 2022 and December 31, 2021, the Company did not record a servicing asset or liability related to its retained responsibility, based on its assessment of the servicing fee, market values for similar transactions, and its cost of servicing the receivables sold.

A rcher-Daniels-Midland Company

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Sale of Accounts Receivable (Continued)

As of March 31, 2022 and December 31, 2021, the fair value of trade receivables transferred to the Purchasers under the Programs and derecognized from the Company’s consolidated balance sheets was $ 2.3 billion and $ 2.2 billion, respectively.

Total receivables sold were $ 14.3 billion and $ 12.1 billion for the three months ended March 31, 2022 and 2021, respectively.

Cash collections from customers on receivables sold were $ 13.7 billion and $ 10.5 billion for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022 and December 31, 2021, receivables pledged as collateral to the Purchasers were $ 0.8 billion and $ 0.5 billion, respectively.

Transfers of receivables under the Programs resulted in an expense for the loss on sale of $ 5 million and $ 4 million for the three months ended March 31, 2022 and 2021, respectively, which is classified as selling, general, and administrative expenses in the consolidated statements of earnings.

The Company accounts for these transfers as sales.

The Company acts as a servicer for the transferred receivables.

At June 30, 2022 and December 31, 2021, the Company did not record a servicing asset or liability related to its retained responsibility, based on its assessment of the servicing fee, market values for similar transactions, and its cost of servicing the receivables sold.

As of June 30, 2022 and December 31, 2021, the fair value of trade receivables transferred to the Purchasers under the Programs and derecognized from the Company’s consolidated balance sheets was $ 1.8 billion and $ 2.2 billion, respectively.

Total receivables sold were $ 29.3 billion and $ 24.8 billion for the six months ended June 30, 2022 and 2021, respectively.

Cash collections from customers on receivables sold were $ 28.2 billion and $ 22.5 billion for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022 and December 31, 2021, receivables pledged as collateral to the Purchasers were $ 1.7 billion and $ 0.5 billion, respectively.

Transfers of receivables under the Programs resulted in an expense for the loss on sale of $ 3 million and $ 8 million for the three and six months ended June 30, 2022, respectively, and $ 2 million and $ 6 million for the three and six months ended June 30, 2021, respectively, which is classified as selling, general, and administrative expenses in the consolidated statements of earnings.

All cash flows under the Programs are classified as operating activities because the cash received from the Purchasers upon both the sale and collection of the receivables is not subject to significant interest rate risk given the short-term nature of the Company’s trade receivables.

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The Company uses its significant global asset base to originate and transport agricultural commodities, connecting to markets in 200 countries.

The Company also processes corn, oilseeds, and wheat into products for food, animal feed, chemical and energy uses.

The Company also processes corn, oilseeds, and wheat into products for food, animal feed, industrial, and energy uses.

The Company also engages in the manufacturing, sale, and distribution of specialty products including natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products, and other specialty food and feed ingredients.

5 unchanged sentences

Financial information with respect to the Company’s reportable business segments is set forth in Note 12 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements”.

The Company’s recent significant portfolio actions and announcements include:

ADM’s recent significant portfolio actions and announcements include:

• the acquisition in February 2022 of Comhan, a leading South African flavor distributor;

• the announcement in April 2022 of a growth investment in the Company’s oilseed facility in Mainz, Germany, which is expected to be completed in Q3 2023;

• the announcement in April 2022 of a $300 million investment in Decatur, IL to expand alternative protein production and the opening of a new, state-of-the-art protein innovation center;

• the announcement in April 2022 of a $300 million investment in Decatur, Illinois to expand alternative protein production and the opening of a new, state-of-the-art protein innovation center, which is expected to be completed in the first quarter of 2025;

• the announcement in April 2022 of a commitment to achieve 100% deforestation-free supply chains by 2025, five years earlier than previously targeted;

• the announcement in May 2022 to significantly expand starch production at the Company’s Marshall, Minnesota facility, which is expected to be completed in the second half of 2023;

• the announcement in May 2022 of five projects funded with support from ADM, in partnership with the U.S.

Department of Agriculture’s Natural Resources Conservation Service, to provide farmers with technical and financial resources to help plant cover crop on half a million acres;

• the announcement in June 2022 of the signing of a memorandum of understanding with Bayer, a global enterprise with core competencies in the life science fields of healthcare and agriculture, to build and implement a sustainable crop protection model to soybean farmers in India;

• the announcement in July 2021 of the signing of an agreement with Farmers Business Network (FBN) to expand availability of FBN’s leading-edge digital farm business management platform, Gradable, to ADM’s network of farmers across North America, offering 55,000 growers a comprehensive digital solution to manage their businesses and measure sustainable production data.

Sustainability is a key driver in ADM’s expanding portfolio of environmentally responsible, plant-derived products.

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and (3) increased use of technology, analytics, and automation at production facilities, in offices, and with customers.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Innovation activities include expansions and investments in (1) improving the customer experience, including leveraging producer relationships and enhancing the use of state-of-the-art digital technology to help customers grow;

(2) sustainability-driven innovation, which encompasses the full range of products, solutions, capabilities, and commitments to serve customers’ needs;

and (3) growth initiatives, including organic growth to support additional capacity and meet growing demand, and mergers and acquisitions opportunities.

ADM will support both pillars with investments in technology, which include expanding digital capabilities and investing further in product research and development.

and (3) growth initiatives, including organic growth to support additional capacity and meet growing demand, and targeted mergers and acquisitions.

ADM will support both pillars with investments in science and technology, which include expanding digital capabilities and investing further in product research and development.

All of these efforts will continue to be strengthened by the Company’s ongoing commitment to Readiness.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Environmental and Social Responsibility

26 unchanged sentences

Thus, gross margin rates are more meaningful as a performance indicator in these businesses.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The Company has consolidated subsidiaries in more than 70 countries.

7 unchanged sentences

Effective April 1, 2022, the Company changed the functional currency of its Turkish entities to the U.S.

dollar which is not expected to have a material impact on the Company’s consolidated financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The Company measures its performance using key financial metrics including net earnings, gross margins, segment operating profit, adjusted segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, manufacturing expenses, selling, general, and administrative expenses, return on invested capital, and economic value added.

dollar which did not and is not expected to have a material impact on the Company’s consolidated financial statements.

The Company measures its performance using key financial metrics including net earnings, gross margins, constant currency revenue, segment operating profit, adjusted segment operating profit, earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA, manufacturing expenses, selling, general, and administrative expenses, return on invested capital, economic value added, and operating cash flows before working capital.

Some of these metrics are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

For more information, see “Non-GAAP Financial Measures” on page 38.

The Company’s financial results can vary significantly due to changes in factors such as fluctuations in energy prices, weather conditions, crop plantings, government programs and policies, trade policies, changes in global demand, general global economic conditions, changes in standards of living, global production of similar and competitive crops, and geopolitics.

Due to these unpredictable factors, the Company undertakes no responsibility for updating any forward-looking information contained within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

For more information, see “Non-GAAP Financial Measures” on pages 42 and 49.

Due to the unpredictable nature of these and other factors, the Company undertakes no responsibility for updating any forward-looking information contained within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Operations in Ukraine and Russia

1 unchanged sentence

Most of the facilities have been temporarily idled since February 24, 2022.

The Company’s footprint in Russia is limited and operations have been recently scaled down to those related to the production and transport of essential food commodities and ingredients.

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.

On February 24, 2022, Russian troops invaded Ukraine.

While the Company’s Ukraine and Russian operations have historically represented less than 0.1% of consolidated revenues, the direct and indirect impacts of the ongoing military action could negatively affect ADM’s future operating results.

The conflict in Ukraine has created disruptions in global supply chains and is expected to create dislocations of key agricultural commodities.

The conflict in Ukraine has created disruptions in global supply chains and has created dislocations of key agricultural commodities.

The indirect impact of these dislocations on the Company’s operating results will be a function of a number of variables including supply and demand responses from the rest of the world as well as the length of the conflict and the condition of the agricultural industry and export infrastructure after the conflict ends.

For more information, refer to Part II, Item 1A, “Risk Factors”.

As of March 31, 2022, ADM’s assets in Ukraine consisted primarily of current assets that were less than 1% of the Company’s total current assets.

As of June 30, 2022, ADM’s assets in Ukraine consisted primarily of current assets that were less than 1% of the Company’s total current assets and an immaterial amount of non-current assets.

Of the total current assets in Ukraine, 76% were inventories that represented less than 2% of ADM’s total inventories.

Market Factors Influencing Operations or Results in the Three Months Ended March 31, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Market Factors Influencing Operations or Results in the Three Months Ended June 30, 2022

The Company is subject to a variety of market factors which affect the Company's operating results.

In Ag Services and Oilseeds, tight global stocks driven by a short crop in South America and good global demand drove commodity prices higher.

The conflict in Ukraine resulted in even tighter global stocks of commodities and created high volatility which had a positive impact on South American origination prices.

Global Trade results were driven by tight supply, strong destination marketing volumes and margins, and firm ocean freight rates.

North American origination was negatively impacted by weather-related supply disruption.

In Ag Services and Oilseeds, the unprecedented market volatility continued along the entire value chain.

The conflict in Ukraine continued to have an impact on global commodity flows and prices.

Global Trade results were driven by market disconnects, tight supply, and strong destination marketing margins.

In South America, a more timely crop saw farmer selling return to historic norms and a tight global supply drove commodity prices higher.

North American origination was negatively impacted by slow farmer selling, strained truck and rail systems in the interior, and weather disruption that resulted in delayed planting which negatively impacted fertilizer volume.

Crushing margins benefited from strong protein and renewable diesel demand and tight oilseeds stocks.

Refined oil margins were driven by strong oil demand with volatile energy markets driving premiums up.

In Carbohydrate Solutions, demand in starches and sweeteners was strong with margins remaining fairly steady on higher input costs.

Domestic ethanol demand improved significantly from the prior year, but remained below pre-pandemic levels.

Industry production of ethanol returned to pre-pandemic levels, with ethanol margins under pressure due to persistently high industry stocks.

In Refined Products and Other, margins were driven by strong oil demand and tight supply with volatile energy markets driving up biodiesel margins.

In Carbohydrate Solutions, demand for starches and sweeteners remained solid with margins remaining steady across the entire portfolio.

Production and logistics issues in North America resulted in tightness in the market ahead of peak summer demand.

Ethanol export demand was strong, driven by favorable blending economics and government incentives.

Domestic gasoline demand was tracking at or above prior year levels, despite elevated gasoline prices.

Industry ethanol production increased past the normal spring maintenance period, but poor railroad logistics and heat hampered production later in the quarter.

Corn milling margins benefited from strong co-product results, as prices for oil and feed products rose in line with higher underlying corn prices.

Corn costs were volatile and higher, in part due to a relatively low projected corn stocks-to-use ratio and uncertainty caused by the conflict in Ukraine and other inflationary pressures.

Nutrition benefited from overall strong demand in various product categories.

Nutrition benefited from overall strong demand in various food, beverage, and dietary supplement categories.

In Human Nutrition, demand for flavors, flavor systems, specialty proteins, bioactives, and fibers was strong, but increased energy and raw material costs adversely impacted results.

In Animal Nutrition, amino acids pricing and margins improved due to a tighter global supply environment.

Growing demand in complete food for petfood was partially offset by weak demand in other product lines with some customers cutting products out of formulation due to increased ingredient, freight, and energy costs.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

In Animal Nutrition, amino acids pricing and margins improved due to a tighter global supply environment, partially offset by the devaluation of certain currencies and weak demand in other product lines due to increased ingredient, freight, and energy costs.

ADM’s productivity initiatives are improving the Company’s capabilities to help mitigate the impact of inflation.

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

Net earnings attributable to controlling interests increased $0.5 billion from $0.7 billion to $1.2 billion.

Segment operating profit increased $0.4 billion from $1.1 billion to $1.5 billion and included a net charge of $17 million consisting of asset impairment, restructuring, and settlement charges of $18 million and a gain on sale of assets of $1 million.

Included in segment operating profit in the prior year quarter was $94 million of asset impairment, restructuring, and legal settlement charges.

Adjusted segment operating profit (a non-GAAP measure) increased $0.4 billion to $1.6 billion due primarily to higher results in all businesses except in Vantage Corn Processors.

Corporate results in the current quarter were a net charge of $268 million and included a mark-to-market loss of $15 million on the conversion option of the exchangeable bonds issued in August 2020.

Corporate results in the prior year quarter were a net charge of $281 million and included a mark-to-market loss of $20 million on the conversion option of the exchangeable bonds issued in August 2020 and a restructuring charge of $5 million.

Segment operating profit increased $0.7 billion from $1.1 billion to $1.8 billion and included a net charge of $9 million consisting of asset impairment charges.

Included in segment operating profit in the prior year quarter was a net charge of $15 million consisting of asset impairment and restructuring charges of $37 million, partially offset by gains on the sale of assets of $22 million.

Adjusted segment operating profit (a non-GAAP measure) increased $0.7 billion to $1.8 billion due primarily to higher results in all businesses.

Corporate results in the current quarter were a net charge of $321 million and included a mark-to-market gain of $19 million on the conversion option of the exchangeable bonds issued in August 2020.

Corporate results in the prior year quarter were a net charge of $320 million and included a pension settlement charge of $82 million and a mark-to-market gain of $30 million on the conversion option of the exchangeable bonds issued in August 2020.

Income tax expense increased $166 million to $279 million.

The effective tax rate for the quarter ended March 31, 2022 was 16.3% compared to 15.9% for the quarter ended March 31, 2021.

The change in the rate was due primarily to changes in the geographic mix of earnings.

The effective tax rate for the quarter ended June 30, 2022 was 18.4% compared to 13.7% for the quarter ended June 30, 2021.

The change in the rate was due primarily to changes in the geographic mix of pretax earnings and the impact of discrete tax items.

Analysis of Statements of Earnings

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Total 12,984 13,820 (836)

The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions.

The overall decrease in oilseeds processed volumes was primarily related to decreased crush rates resulting from the decline in global demand for canola oil and the indefinite shutdown of a Ukraine facility since February 2022.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The overall decrease in oilseeds processed volumes was primarily related to decreased crush rates resulting from the decline in global demand for rapeseed, temporarily idled facility in Paraguay due to crop failure, and the indefinite shutdown of a Ukraine facility since February 2022.

The overall decrease in corn was primarily related to logistical challenges surrounding railcar availability and the sale of the Peoria, Illinois facility in November 2021.

Revenues by segment for the quarter are as follows:

16 unchanged sentences

Total $ 27,284 $ 22,926 $ 4,358

Revenues and cost of products sold in agricultural merchandising and processing business are significantly correlated to the underlying commodity prices and volumes.

Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes.

During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from market price changes, which generally result in an insignificant impact to gross profit.

Revenues increased $4.8 billion to $23.7 billion due to higher sales prices ($4.6 billion) and higher sales volumes ($0.2 billion).

Higher sales prices of oils, corn, soybeans, animal feeds, wheat, biodiesel, farming materials, alcohol, and flour, and higher volumes of alcohol and milled rice, were partially offset by lower sales volumes of oils and wheat.

Revenues increased $4.4 billion to $27.3 billion due to higher sales prices ($5.2 billion), partially offset by lower sales volumes ($0.8 billion).

Higher sales prices of oils, soybeans, corn, meal, farming materials, wheat, biodiesel, flours, and alcohol and higher sales volumes of milled rice, were partially offset by lower volumes of soybeans, oils, and corn.

Ag Services and Oilseeds revenues increased 17% to $21.4 billion due to higher sales prices ($4.2 billion), partially offset by lower sales volumes ($1.0 billion).

Carbohydrate Solutions revenues increased 51% to $3.4 billion due to higher sales prices ($0.7 billion) and higher sales volumes ($0.4 billion) despite the loss of USD-grade industrial alcohol volumes from the divested Peoria, IL facility.

Carbohydrate Solutions revenues increased 33% to $3.8 billion due to higher sales prices ($0.8 billion) and higher sales volumes ($0.1 billion) despite the loss of USD-grade industrial alcohol volumes from the divested Peoria, Illinois facility.

Nutrition revenues increased 16% to $2.0 billion due to higher sales prices ($0.2 billion) and higher sales volumes ($0.1 billion).

Cost of products sold increased $3.7 billion to $25.2 billion due principally to higher average commodity costs.

Manufacturing expenses increased $0.3 billion to $1.7 billion due principally to higher energy costs, maintenance, and operating supplies.

Foreign currency translation decreased revenues and cost of products sold by $0.5 billion and $0.4 billion, respectively.

Gross profit increased $349 million or 23%, to $1.9 billion due principally to higher results in Ag Services and Oilseeds ($182 million), Starches and Sweeteners ($106 million), Nutrition ($82 million), and Other ($13 million), partially offset by lower results in Vantage Corn Processors ($33 million).

These factors are explained in the segment operating profit discussion on page 37.

Manufacturing expenses increased $0.2 billion to $1.7 billion due principally to higher energy costs, operating supplies, and maintenance.

Foreign currency translation decreased revenues and cost of products sold by $0.7 billion.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Selling, general, and administrative expenses increased $80 million to $829 million due primarily to higher IT expenses and insurance costs, increased provisions for bad debt, and amortization of intangibles from new acquisitions.

Gross profit increased $637 million or 44%, to $2.1 billion due principally to higher results in Ag Services and Oilseeds ($563 million), Starches and Sweeteners ($97 million), and Nutrition ($63 million), partially offset by lower results in Vantage Corn Processors ($45 million) and Other ($36 million).

These factors are explained in the segment operating profit discussion on page 41.

Selling, general, and administrative expenses increased $75 million to $814 million due primarily to higher IT and project-related expenses, higher insurance costs, increased provisions for bad debt, and amortization of intangibles from new acquisitions.

Asset impairment, exit, and restructuring costs decreased $22 million to $1 million.

Charges in the current quarter were not material.

Charges in the prior year quarter consisted of $31 million of impairments related to certain long-lived assets and $23 million of restructuring charges, presented as specified items within segment operating profit, and $5 million of restructuring charges in Corporate.

Equity in earnings of unconsolidated affiliates increased $79 million to $204 million due primarily to higher earnings from the Company’s investments in Wilmar, Almidones Mexicanos S.A., SoyVen, and Stratas Foods LLC.

Investment income increased $46 million to $59 million due primarily to revaluation gains of $34 million and interest income of $11 million related to a tax item in the current quarter.

Interest expense increased $5 million to $92 million due to higher debt balances and interest related to a tax item.

Interest expense in the current quarter also included a $15 million mark-to-market loss adjustment related to the conversion option of the exchangeable bonds issued in August 2020, compared to a $20 million mark-to-market loss adjustment in the prior year quarter.

Other income-net of $33 million was comparable to the prior period.

Income in the current quarter included the non-service components of net pension benefit income, foreign exchange gains, and other income.

Income in the prior year quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, foreign exchange gains, and other income.

Charges in the prior year quarter consisted of $23 million of impairments related to certain long-lived assets and $1 million of restructuring charges, presented as specified items within segment operating profit, and a restructuring adjustment of $1 million in Corporate.

Equity in earnings of unconsolidated affiliates increased $29 million to $192 million due primarily to higher earnings from the Company’s investment in Wilmar.

Investment income decreased $18 million to $32 million due primarily to lower revaluation gains of $2 million compared to $40 million in the prior year quarter, partially offset by higher interest income.

Interest expense increased $33 million to $73 million due to higher debt balances and increased short-term rates on the Company’s U.S.

and European commercial paper borrowing programs.

Interest expense in the current quarter also included a $19 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020, compared to a $30 million mark-to-market gain adjustment in the prior year quarter.

Other income-net increased from a net expense of $49 million in the prior year quarter to a net income of $83 million.

Income in the current quarter included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, a $50 million one-time payment from the USDA Biofuel Producer Recovery Program, foreign exchange gains, and other expense.

Expense in the prior year quarter included a non-cash pension settlement charge of $82 million related to the purchase of group annuity contracts that irrevocably transferred the future benefit obligations and annuity administration for certain salaried and hourly retirees and terminated vested participants under the ADM Retirement Plan and ADM Pension Plan for Hourly-Wage Employees to independent third parties, partially offset by gains on the sale of certain assets and disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, and foreign exchange gains.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

30 unchanged sentences

Ag Services and Oilseeds operating profit increased 96%.

Ag Services and Oilseeds delivered substantially higher year-over-year results, effectively managing risk and executing well in a dynamic environment of robust global demand and tight supply, driven primarily by the short South American crop.

Ag Services results were significantly higher versus the first quarter of 2021.

Global trade results were higher, driven by strong performances in destination marketing and global ocean freight.

North American origination margins and volumes were lower year-over-year, including negative timing effects .

Crushing was higher year over year in a strong global margin environment driven by robust protein and vegetable oil demand.

Improving margins in the quarter resulted in negative timing effects versus positive timing effects in the prior-year quarter.

Refined Products and Other results were much higher than the prior-year quarter, driven by healthy refining premiums and good refined oils demand in North America, as well as strong biodiesel margins in Europe, Middle East, and Africa (EMEA) biodiesel as well as healthy refining premiums and good demand in North American refined oils.

Equity earnings from Wilmar were significantly higher versus the first quarter of 2021.

Ag Services results were significantly higher versus the year-ago quarter.

Global trade profits were significantly higher year-over-year driven by the destination marketing’s ability to meet customer demand across the globe which helped drive strong volumes and margins and good execution in global ocean freight, as well as net timing gains for the quarter.

North America had solid performance as export volumes remained strong in a good global demand environment, though year-over-year results were lower due to an insurance settlement as well as strong positioning gains in the prior year quarter.

In South America, results were higher based on stronger origination volumes and better margins driven by strong global grain demand.

Crushing delivered substantially higher results.

Strong soy crush margins drove improved performance in all three regions, as meal and oil demand remained robust.

Positive net timing effects for the quarter, versus the negative timing in the prior year quarter, also helped drive higher year-over-year results.

Refined Products and Other results were similar to the prior-year quarter, as strong demand for biofuels and food oils drove strong refining premiums and biodiesel margins, were offset by negative timing effects.

Equity earnings from Wilmar were significantly higher versus the second quarter of 2021.

Carbohydrate Solutions operating profit increased 23%.

Carbohydrate Solutions delivered results that were substantially higher year-over-year.

Starches and Sweeteners, including ethanol production from the wet mills, delivered much higher results versus the prior-year quarter, driven by higher corn co-product revenues and improved citric acid profits in North America;

higher volumes and margins in EMEA;

and higher volumes and margins in wheat milling.

Sales volumes for starches and sweeteners continued their recovery.

The biosolutions platform continued to deliver revenue growth as demand for plant-based products expands into more diverse applications.

Vantage Corn Processors delivered solid execution margins but position losses on ethanol inventory as prices fell early in the quarter drove lower results versus the prior-year quarter, which benefited from demand for USP-grade industrial alcohol from the Peoria facility that was divested in November 2021.

Starches and Sweeteners, including ethanol production from the wet mills, delivered much better results due to solid demand as food service volumes reached close to pre-pandemic levels.

Corn co-products, including strong demand for corn oil, and effective risk management results drove higher ethanol and sweetener margins.

Vantage Corn Processors results were slightly higher in an environment of good gasoline demand and strong ethanol blending economics.

A $50 million one-time payment from the USDA Biofuel Producer Recovery Program helped offset the prior year’s strong industrial alcohol results from the now-sold Peoria, Illinois facility as well as valuation losses on ethanol inventory as prices fell late in the quarter.

Nutrition operating profit increased 19%.

Nutrition delivered strong revenue growth of 23% and maintained healthy margins, driving substantially higher results.

Human Nutrition delivered higher year-over-year results.

Flavors continued to deliver solid revenue growth, offset by some higher costs.

Strong sales growth in alternative proteins, including contribution from the Sojaprotein acquisition, and positive currency timing impacts in South America, offset some higher operating costs to help deliver better year-over-year results in Specialty Ingredients.

Health and Wellness was also higher year-over-year, powered by probiotics, including contribution from the November 2021 Deerland Probiotics and Enzymes acquisition, and robust demand for fiber.

Animal Nutrition profits were nearly double the prior-year quarter, due primarily to strength in amino acids, which was driven by a combination of product mix changes, improved North American demand and global supply chain disruptions.

Other Business operating profit increased $33 million, driven primarily by better performance in captive insurance, including reduced claim settlements versus the prior-year quarter.

Human Nutrition delivered higher year-over-year results as demand across its diverse product portfolio remained robust.

Flavors grew revenue in North America, Europe, Middle East, and Africa (EMEA), and South America, though profits were lower due to negative currency effects in EMEA as well as weaker results in Asia-Pacific.

Healthy demand for alternative proteins resulted in strong soy protein volumes and margins, as contributions from the Sojaprotein acquisition, as well as good demand for texturants, drove higher results in Specialty Ingredients.

Strength across probiotics, including in the recently-acquired Deerland Probiotics and Enzymes business, as well as robust demand for fibers, contributed to a stronger quarter in Health and Wellness.

Animal Nutrition profits were up substantially year-over-year, driven by continued strong volumes and margins in amino acids.

Other Business operating profit increased $12 million, driven primarily by higher ADM Investor Services earnings.

Corporate results for the quarter are as follows:

4 unchanged sentences

Unallocated corporate costs (267) (248) (19)

Loss on sale of assets (3) — (3)

Expenses related to acquisitions (2) — (2)

Loss on debt conversion option (15) (20) 5

Restructuring adjustment (charges) 1 (5) 6

Gain on debt conversion option 19 30 (11)

Restructuring and settlement charges 1 (81) 82

Other income 13 49 (36)

2 unchanged sentences

Corporate results were a net charge of $321 million in the current quarter compared to a net charge of $320 million in the prior year quarter.

Interest expense-net increased $12 million due to higher debt balances and interest related to a tax item.

Unallocated corporate costs increased $7 million due primarily to higher IT operating and project-related costs and higher costs in the Company’s centers of excellence, partially offset by lower incentive compensation accruals.

Loss on debt conversion option was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020.

Other income in the current quarter included the non-service components of net pension benefit income of $6 million and an investment revaluation gain of $34 million, partially offset by foreign exchange losses.

Other income in the prior year quarter included the non-service components of net pension benefit income of $6 million and foreign exchange gains.

Interest expense-net increased $17 million due to higher debt balances and increased short-term rates on the Company’s U.S.

and European commercial paper borrowing programs.

Unallocated corporate costs increased $19 million due primarily to higher IT and project-related costs and higher costs in the Company’s centers of excellence.

Gain on debt conversion option was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020.

Restructuring and settlement charges in the prior year quarter included a pension settlement charge of $82 million related to the purchase of group annuity contracts that irrevocably transferred the future benefit obligations and annuity administration for certain salaried and hourly retirees and terminated vested participants under the ADM Retirement Plan and ADM Pension Plan for Hourly-Wage Employees to independent third parties.

Other income in the current quarter included the non-service components of net pension benefit income of $6 million, an investment revaluation gain of $2 million, and foreign exchange gains, partially offset by railroad maintenance expenses.

Other income in the prior year quarter included the non-service components of net pension benefit income of $5 million, an investment revaluation gain of $40 million, and foreign exchange gains.

Non-GAAP Financial Measures

7 unchanged sentences

Adjusted EPS, adjusted EBITDA, and adjusted segment operating profit are not intended to replace or be an alternative to diluted EPS, earnings before income taxes, and segment operating profit, respectively, the most directly comparable amounts reported under GAAP.

The table below provides a reconciliation of diluted EPS to adjusted EPS for the three months ended March 31, 2022 and 2021.

Three months ended March 31,

The table below provides a reconciliation of diluted EPS to adjusted EPS for the three months ended June 30, 2022 and 2021.

Three months ended June 30,

In millions Per share In millions Per share

1 unchanged sentence

Net earnings and reported EPS (fully diluted) $ 1,236 $ 2.18 $ 712 $ 1.26

Losses on sales of assets and businesses - net of tax of $0 million in 2022 (1)

Loss on debt conversion option - net of tax of $0 (1)

Gains on sales of assets and businesses - net of tax of $5 million in 2021 (1)

— — (17) (0.03)

Gain on debt conversion option - net of tax of $0 (1)

(19) (0.04) (30) (0.06)

Asset impairment, restructuring, and settlement charges - net of tax of $2 million in 2022 and $28 million in 2021 (1)

6 0.01 90 0.16

Expenses related to acquisitions - net of tax of $1 million in 2022 (1)

Certain discrete tax adjustments (1) — (1) —

4 unchanged sentences

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the three months ended March 31, 2022 and 2021.

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the three months ended June 30, 2022 and 2021.

Three months ended

3 unchanged sentences

Depreciation and amortization 257 243 14

Losses on sales of assets and businesses 2 — 2

Expenses related to acquisition 2 — 2

Gains on sales of assets and businesses — (22) 22

Railroad maintenance expenses 9 3 6

Asset impairment, restructuring, and settlement charges 8 118 (110)

8 unchanged sentences

Adjusted EBITDA $ 1,866 $ 1,207 $ 659

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Market Factors Influencing Operations or Results in the Six Months Ended June 30, 2022

The Company is subject to a variety of market factors which affect the Company's operating results.

In Ag Services and Oilseeds, tight global stocks driven by a short crop in South America and good global demand drove commodity prices higher.

The conflict in Ukraine resulted in even tighter global stocks of commodities and created high volatility which had a positive impact on North and South American origination prices.

Global Trade results were driven by market disconnects, tight supply, strong destination marketing margins, and firm ocean freight rates.

North American origination was negatively impacted by weather-related supply disruption and delayed planting due to unfavorable weather which negatively impacted fertilizer volume.

Crushing margins benefited from strong protein and renewable diesel demand and tight oilseeds stocks.

In Refined Products and Other, margins were driven by strong oil demand and tight supply with volatile energy markets driving up biodiesel margins.

In Carbohydrate Solutions, demand for starches and sweeteners was solid with margins remaining steady despite higher input costs.

Domestic ethanol demand remained at or above the prior year, but below pre-pandemic levels.

Export ethanol demand was strong, driven by favorable blending economics and government incentives.

Industry production of ethanol returned to pre-pandemic levels as gasoline consumption remained robust even at higher gas prices.

Corn milling margins benefited from strong co-product results, as prices for oil and feed products rose in line with higher underlying corn prices.

Corn costs were volatile and higher, in part due to a relatively low projected corn stocks-to-use ratio and uncertainty caused by the conflict in Ukraine.

Nutrition benefited from overall strong demand in various various food, beverage, and dietary supplement categories.

In Human Nutrition, strong demand for flavors, flavor systems, specialty proteins, bioactives, and fibers were partially offset by higher energy and raw material costs.

Margins remained robust on strong price actions.

In Animal Nutrition, amino acids pricing and margins improved due to a tighter global supply environment, partially offset by the devaluation of certain currencies and weak demand in other product lines with some customers cutting products out of formulation due to increased ingredient, freight, and energy costs.

ADM’s productivity initiatives are improving the Company’s capabilities to help mitigate the impact of inflation.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Net earnings attributable to controlling interests increased $0.9 billion to $2.3 billion.

Segment operating profit increased $1.1 billion to $3.4 billion and included a net charge of $26 million consisting of asset impairment, restructuring, and settlement charges of $27 million and a gain on sale of assets of $1 million.

Included in segment operating profit in the prior period was a net charge of $109 million consisting of gains on the sale of assets of $22 million and asset impairment, restructuring, and settlement charges of $131 million.

Adjusted segment operating profit (a non-GAAP measure) increased $1.0 billion to $3.4 billion due primarily to higher results in all businesses except in Vantage Corn Processors.

Corporate results in the current and prior periods were a net charge of $0.6 billion.

Corporate results in the current period included a mark-to-market gain of $4 million on the conversion option of the exchangeable bonds issued in August 2020.

Corporate results in the prior period included a pension settlement charge of $82 million and a mark-to-market gain of $10 million on the conversion option of the exchangeable bonds issued in August 2020.

Income taxes of $486 million increased $242 million.

The Company’s effective tax rate for the six months ended June 30, 2022 was 17.4% compared to 14.8% for the six months ended June 30, 2021.

The change in the rate was due primarily to changes in the geographic mix of pretax earnings and the impact of discrete tax items.

Analysis of Statements of Earnings

Processed volumes by product for the six months ended June 30, 2022 and 2021 are as follows (in metric tons):

Six Months Ended

(In thousands) 2022 2021 Change

Oilseeds 16,699 17,738 (1,039)

Corn 9,588 8,692 896

Total 26,287 26,430 (143)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The overall increase in corn was primarily related to two dry mill facilities that were idled since April 2020 and restarted in April 2021, partially offset by the sale of the Peoria, Illinois facility in November 2021 and logistical challenges surrounding railcar availability in the second quarter of 2022.

Revenues by segment for the six months ended six months ended June 30, 2022 and 2021 are as follows:

Six Months Ended

2022 2021 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 26,180 $ 22,961 $ 3,219

Crushing 6,584 5,569 1,015

Refined Products and Other 6,918 4,748 2,170

Total Ag Services and Oilseeds 39,682 33,278 6,404

Carbohydrate Solutions

Starches and Sweeteners 5,017 3,591 1,426

Vantage Corn Processors 2,100 1,452 648

Total Carbohydrate Solutions 7,117 5,043 2,074

Human Nutrition 1,978 1,602 376

Animal Nutrition 1,949 1,694 255

Total Nutrition 3,927 3,296 631

Other Business 208 202 6

Total $ 50,934 $ 41,819 $ 9,115

Revenues and cost of products sold in a commodity merchandising and processing business are significantly correlated to the underlying commodity prices and volumes.

During periods of significant changes in commodity prices, the underlying performance of the Company is better evaluated by looking at margins because both revenues and cost of products sold, particularly in Ag Services and Oilseeds, generally have a relatively equal impact from commodity price changes, which generally result in an insignificant impact to gross profit.

Revenues increased $9.1 billion to $50.9 billion due to higher sales prices ($9.9 billion), partially offset by lower sales volumes ($0.8 billion).

Higher sales prices of oils, soybeans, corn, wheat, farming materials, meal, biodiesel, flours, and alcohol, and higher sales volumes of milled rice and alcohol, were partially offset by lower volumes of soybeans, oils, corn, and wheat.

Ag Services and Oilseeds revenues increased 19% to $39.7 billion due to higher sales prices ($7.9 billion), partially offset by lower sales volumes ($1.5 billion).

Carbohydrate Solutions revenues increased 41% to $7.1 billion due to higher sales prices ($1.6 billion) and higher sales volumes ($0.5 billion) despite the loss of USD-grade industrial alcohol volumes from the divested Peoria, Illinois facility.

Nutrition revenues increased 19% to $3.9 billion due to higher sales prices ($0.4 billion) and higher sales volumes ($0.2 billion).

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Cost of products sold increased $8.1 billion to $46.9 billion due principally to higher average commodity costs.

Manufacturing expenses increased $0.4 billion to $3.3 billion due principally to higher energy costs, operating supplies, and maintenance.

Foreign currency translation decreased revenues and cost of goods sold by $1.2 billion and $1.1 billion, respectively.

Gross profit increased $1.0 billion or 33% to $4.0 billion due principally to higher results in Ag Services and Oilseeds ($745 million), Starches and Sweeteners ($203 million), and Nutrition ($145 million), partially offset by lower results in Vantage Corn Processors ($78 million) and Other ($23 million) These factors are explained in the segment operating profit discussion on page 48.

Selling, general, and administrative expenses increased $0.2 billion to $1.6 billion due principally to higher IT and project-related expenses, higher insurance costs, increased provisions for bad debt, amortization of intangibles from new acquisitions, and higher salaries and benefit costs.

Asset impairment, exit, and restructuring costs decreased $80 million to $2 million.

Charges in the current period were not material.

Charges in the prior period consisted of $54 million of impairments related to certain long-lived assets and $24 million of restructuring charges, presented as specified items within segment operating profit, and $4 million of restructuring charges in Corporate.

Equity in earnings of unconsolidated affiliates increased $108 million to $396 million due primarily to higher earnings from the Company’s investments in Wilmar, Almidones Mexicanos S.A., Olenex, SoyVen, and Stratas Foods LLC.

Investment income increased $28 million to $91 million due primarily to higher interest income, partially offset by lower revaluation gains of $36 million compared to $40 million in the prior period.

Interest expense increased $38 million to $165 million due to higher debt balances and increased short-term rates on the Company’s U.S.

and European commercial paper borrowing programs.

Interest expense in the current period also included a $4 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020 compared to a $10 million mark-to-market gain adjustment in the prior period.

Other income-net increased from a net expense of $16 million in the prior period to a net income of $116 million.

Income in the current period included gains on disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, a $50 million one-time payment from the USDA Biofuel Producer Recovery Program, foreign exchange gains, and other expense.

Expense in the prior period included a non-cash pension settlement charge of $82 million related to the purchase of group annuity contracts that irrevocably transferred the future benefit obligations and annuity administration for certain salaried and hourly retirees and terminated vested participants under the ADM Retirement Plan and ADM Pension Plan for Hourly-Wage Employees to independent third parties, partially offset by gains on the sale of certain assets and disposals of individually insignificant assets in the ordinary course of business, the non-service components of net pension benefit income, foreign exchange gains, and other income.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Segment operating profit, adjusted segment operating profit (a non-GAAP measure), and earnings before income taxes for the six months ended June 30, 2022 and 2021 are as follows:

Six Months Ended

Segment Operating Profit (Loss) 2022 2021 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 665 $ 399 $ 266

Crushing 896 532 364

Refined Products and Other 328 231 97

Wilmar 238 185 53

Total Ag Services and Oilseeds 2,127 1,347 780

Carbohydrate Solutions

Starches and Sweeteners 709 528 181

Vantage Corn Processors 81 114 (33)

Total Carbohydrate Solutions 790 642 148

Human Nutrition 324 290 34

Animal Nutrition 104 65 39

Total Nutrition 428 355 73

Other Business 60 15 45

Specified Items:

Gains (losses) on sales of assets and businesses 1 22 (21)

Asset impairment, restructuring, and settlement charges (27) (131) 104

Total Specified Items (26) (109) 83

Total Segment Operating Profit $ 3,379 $ 2,250 $ 1,129

Adjusted Segment Operating Profit (1)

$ 3,405 $ 2,359 $ 1,046

Segment Operating Profit $ 3,379 $ 2,250 $ 1,129

Corporate (589) (601) 12

Earnings Before Income Taxes $ 2,790 $ 1,649 $ 1,141

(1) Adjusted segment operating profit is segment operating profit excluding the above specified items.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Ag Services and Oilseeds operating profit increased 58%.

Ag Services results were significantly higher versus the first half of 2021.

Global trade results were higher, driven by strong performances in destination marketing and global ocean freight.

North American origination margins and volumes were lower year-over-year .

South America results were higher, driven by better origination margins on good demand for grain.

Crushing was higher year over year in a strong global margin environment driven by robust protein and vegetable oil demand.

Positive net timing effects in the current period versus negative timing effects in the prior period helped drive higher year-over-year results.

Refined Products and Other results were higher than the prior period, driven by healthy refining premiums and good refined oils demand in North America, as well as strong biodiesel margins in EMEA.

Equity earnings from Wilmar were higher versus the first half of 2021.

Carbohydrate Solutions operating profit increased 23%.

Starches and Sweeteners, including ethanol production from the wet mills, delivered higher results versus the prior period, driven by solid margins across sweeteners and starches as well corn co-products, improved ethanol margins, and effective risk management.

Sales volumes for starches and sweeteners continued their recovery, and the biosolutions platform continued to deliver revenue growth as demand for plant-based products expanded into more diverse applications.

Vantage Corn Processors results were lower versus the prior period with improved ethanol margins and a $50 million one-time payment from the USDA Biofuel Producer Recovery Program partially offsetting the prior period’s strong positioning gains and industrial alcohol results from the now-sold Peoria, Illinois facility.

Nutrition operating profit increased 21%.

Human Nutrition delivered higher year-over-year results.

Flavors results were lower driven by softer demand in China.

Strong sales growth in alternative proteins, including contribution from the Sojaprotein acquisition, and good demand for texturants offset some higher operating costs to help deliver better year-over-year results in Specialty Ingredients.

Health and Wellness was also higher year-over-year, powered by probiotics, including contribution from the November 2021 Deerland Probiotics and Enzymes acquisition, and robust demand for fiber and Vitamin E.

Animal Nutrition profits were higher than the prior period, due primarily to strength in amino acids.

Other Business operating profit increased $45 million, driven primarily by better performance in captive insurance, including reduced claim settlements versus the prior period and higher ADM Investor Services earnings.

Corporate results for the six months ended June 30, 2022 and 2021 are as follows:

Six Months Ended

2022 2021 Change

(In millions)

Interest expense-net $ (163) $ (134) (29)

Unallocated corporate costs (476) (450) (26)

Loss on sale of assets (3) — (3)

Expenses related to acquisitions (2) — (2)

Gain on debt conversion option 4 10 (6)

Restructuring and settlement charges 2 (86) 88

Other income 49 59 (10)

Total Corporate $ (589) $ (601) $ 12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Corporate results were a net charge of $0.6 billion in the current period which was comparable to the prior period.

Interest expense-net increased $29 million due to higher debt balances, increased short-term rates on the Company’s U.S.

and European commercial paper borrowing programs, and interest related to a tax item.

Unallocated corporate costs increased $26 million due primarily to higher IT and project-related costs and higher costs in the Company’s centers of excellence, partially offset by lower incentive compensation accruals.

Gain on debt conversion option was related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020.

Restructuring and settlement charges in the prior period included a non-cash pension settlement charge of $82 million related to the purchase of group annuity contracts that irrevocably transferred the future benefit obligations and annuity administration for certain salaried and hourly retirees and terminated vested participants under the ADM Retirement Plant and ADM Pension Plan for Hourly-Wage Employees to independent third parties, and restructuring charges.

Other income in the current period included the non-service components of net pension benefit income of $12 million, an investment revaluation gain of $36 million and foreign exchange gains, partially offset by railroad maintenance expenses.

Other income in the prior period included the non-service components of net pension benefit income of $11 million, an investment revaluation gain of $40 million, and foreign exchange gains.

Non-GAAP Financial Measures

The Company uses adjusted EPS, adjusted EBITDA, and adjusted segment operating profit, non-GAAP financial measures as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance.

These performance measures are not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Adjusted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items.

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for specified items.

The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes.

Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items.

Management believes that adjusted EPS, adjusted EBITDA, and adjusted segment operating profit are useful measures of the Company’s performance because they provide investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability.

The table below provides a reconciliation of diluted EPS to adjusted EPS for the six months ended June 30, 2022 and 2021.

Six months ended June 30,

In millions Per share In millions Per share

Average number of shares outstanding - diluted 568 565

Net earnings and reported EPS (fully diluted) $ 2,290 $ 4.03 $ 1,401 $ 2.48

(Gains) losses on sales of assets and businesses - net of tax of $0 million in 2022 and $5 million in 2021 (1)

2 — (17) (0.03)

Asset impairment, restructuring, and settlement charges - net of tax of $5 million in 2022 and $53 million in 2021 (1)

20 0.04 164 0.29

Expenses related to acquisitions - net of tax of $1 million (1)

Gain on debt conversion option - net of tax of $0 (1)

(4) (0.01) (10) (0.02)

Certain discrete tax adjustments (5) (0.01) (1) —

Total adjustments 14 0.02 136 0.24

Adjusted net earnings and adjusted EPS $ 2,304 $ 4.05 $ 1,537 $ 2.72

(1) Tax effected using the U.S.

and other applicable tax rates.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the six months ended June 30, 2022 and 2021.

Six months ended

(In millions) 2022 2021 Change

Earnings before income taxes $ 2,790 $ 1,649 $ 1,141

Interest expense 165 127 38

Depreciation and amortization 514 492 22

(Gains) losses on sales of assets and businesses 2 (22) 24

Expenses related to acquisitions 2 — 2

Railroad maintenance expenses 9 3 6

Asset impairment, restructuring, and settlement charges 25 217 (192)

Adjusted EBITDA $ 3,507 $ 2,466 $ 1,041

Six months ended

(In millions) 2022 2021 Change

Ag Services and Oilseeds $ 2,303 $ 1,532 $ 771

Carbohydrate Solutions 946 809 137

Nutrition 558 462 96

Other Business 68 18 50

Corporate (368) (355) (13)

Adjusted EBITDA $ 3,507 $ 2,466 $ 1,041

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements