What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-07-25 compared with 2023-04-25 · 760 added, 150 removed, 761 unchanged (54% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions, except per share amounts)

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(In millions)

20 unchanged sentences

Consolidated Balance Sheets

(In millions) March 31, 2023 December 31, 2022

(In millions) June 30, 2023 December 31, 2022

Current Assets

46 unchanged sentences

Consolidated Statements of Cash Flows

(In millions) Three Months Ended

(In millions) Six Months Ended

Operating Activities

51 unchanged sentences

(In millions, except per share amounts) Shares Amount

Balance, March 31, 2023 545 $ 3,106 $ 24,217 $ ( 2,463 ) $ 36 $ 24,896

Comprehensive income

Net earnings 927 1

Other comprehensive income (loss) 30 ( 1 )

Total comprehensive income 957

Cash dividends paid - $ 0.45 per share ( 246 ) ( 246 )

Share repurchases ( 9 ) ( 654 ) ( 654 )

Stock compensation expense — 21 21

Stock option exercises net of taxes — 1 1

Balance, June 30, 2023 536 $ 3,128 $ 24,244 $ ( 2,433 ) $ 36 $ 24,975

Balance, December 31, 2022 547 $ 3,147 $ 23,646 $ ( 2,509 ) $ 33 $ 24,317

8 unchanged sentences

Other — 2 — — 4 6

Balance, June 30, 2023 536 $ 3,128 $ 24,244 $ ( 2,433 ) $ 36 $ 24,975

Balance, March 31, 2022 563 $ 3,028 $ 22,483 $ ( 1,789 ) $ 33 $ 23,755

Comprehensive income

Net earnings 1,236 4

Other comprehensive income (loss) ( 176 ) ( 4 )

Total comprehensive income 1,060

Cash dividends paid - $ 0.40 per share ( 227 ) ( 227 )

Share repurchases ( 2 ) ( 200 ) ( 200 )

Stock compensation expense — 28 28

Stock option exercises net of taxes — 10 10

Balance, June 30, 2022 561 $ 3,066 $ 23,292 $ ( 1,965 ) $ 33 $ 24,426

Balance, December 31, 2021 560 $ 2,994 $ 21,655 $ ( 2,172 ) $ 31 $ 22,508

4 unchanged sentences

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, March 31, 2022 563 $ 3,028 $ 22,483 $ ( 1,789 ) $ 33 $ 23,755

Balance, June 30, 2022 561 $ 3,066 $ 23,292 $ ( 1,965 ) $ 33 $ 24,426

See notes to consolidated financial statements.

6 unchanged sentences

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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2022 for Archer-Daniels-Midland Company (the Company or ADM).

23 unchanged sentences

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

Three Months Ended March 31

Three Months Ended June 30

Beginning, April 1 $ 182 $ 137

Current year provisions 9 22

Write-offs against allowance ( 16 ) ( 4 )

Foreign exchange translation adjustment — ( 2 )

Other ( 1 ) 11

Ending, June 30 $ 174 $ 164

Six Months Ended June 30

Beginning, January 1 $ 199 $ 122

3 unchanged sentences

Foreign exchange translation adjustment 1 ( 2 )

Other 1 ( 7 )

Ending, March 31 $ 182 $ 137

Write-offs against allowance in the current quarter related primarily to allowance on receivables that were subsequently sold.

Ending, June 30 $ 174 $ 164

Write-offs against allowance in the current quarter primarily related to a customer in Brazil.

Also included in write-offs against allowance in the six months ended June 30, 2023 was allowance on receivables that were subsequently sold.

Certain merchandisable agricultural commodity inventories, which include inventories acquired under deferred pricing contracts, are stated at market value.

In addition, the Company values certain inventories using the first-in, first-out (FIFO) method at the lower of cost or net realizable value.

The following table sets forth the Company’s inventories as of December 31, 2022 and 2021.

March 31, 2023 December 31, 2022

The following table sets forth the Company’s inventories.

June 30, 2023 December 31, 2022

(In millions)

2 unchanged sentences

Total inventories $ 11,902 $ 14,771

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

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

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Basis of Presentation (Continued)

Cost Method Investments

Cost method investments of $ 489 million and $ 488 million as of March 31, 2023 and December 31, 2022, respectively, were included in Other Assets in the Company’s consolidated balance sheets.

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

There were no revaluation gains in the three months ended March 31, 2023.

Cost method investments of $ 494 million and $ 488 million as of June 30, 2023 and December 31, 2022, respectively, were included in Other Assets in the Company’s consolidated balance sheets.

Revaluation gains of $ 3 million and $ 37 million in the three and six months ended June 30, 2022, respectively, in connection with observable third-party transactions, were recorded in interest and investment income in the Company's consolidated statements of earnings.

There were no revaluation gains in the three and six months ended June 30, 2023.

Operations in Ukraine and Russia

ADM employs approximately 640 people in Ukraine and operates an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office.

Facilities have been temporarily idled since February 24, 2022, most of which were brought back online by March 31, 2023, due in part to the opening of the Black Sea grain export corridor.

The Company’s footprint in Russia is limited to operations related to the production and transport of essential food commodities and ingredients.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Basis of Presentation (Continued)

As a result of the ongoing conflict in Ukraine, the Company reviewed the valuation of its assets and concluded that as of March 31, 2023, receivables, net of allowances, are deemed collectible and market inventories are valued appropriately.

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

As a result of the ongoing conflict in Ukraine, the Company reviewed the valuation of its assets and concluded that as of June 30, 2023, receivables, net of allowances, are deemed collectible and market inventories are valued appropriately.

The Company also evaluated the impact of Russia’s announcement of its purported annexation of four Ukrainian regions on the valuation of ADM’s assets in those regions and concluded that the assets are appropriately valued.

10 unchanged sentences

The supplier invoices that have been confirmed as valid under the program require payment in full generally within 90 days of the invoice date.

As of March 31, 2023 and December 31, 2022, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $ 247 million and $ 196 million, respectively.

As of June 30, 2023 and December 31, 2022, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $ 310 million and $ 196 million, respectively.

Through December 31, 2024, the Company has the option to adopt the amended guidance of ASC Topic 848, Reference Rate Reform , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

11 unchanged sentences

For transportation service contracts, the Company recognizes revenue over time as the mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606.

The Company recognized revenue from transportation service contracts of $ 178 million and $ 175 million for the three months ended March 31, 2023 and 2022, respectively.

The Company recognized revenue from transportation service contracts of $ 200 million and $ 378 million for the three and six months ended June 30, 2023, respectively, and $ 209 million and $ 384 million for the three and six months ended June 30, 2022, respectively.

For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20).

6 unchanged sentences

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

Contract liabilities of $ 473 million and $ 694 million as of March 31, 2023 and December 31, 2022, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets.

Contract liabilities recognized as revenues were $ 362 million and $ 324 million for the three months ended March 31, 2023 and 2022, respectively.

Contract liabilities of $ 286 million and $ 694 million as of June 30, 2023 and December 31, 2022, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets.

Revenues recognized from contract liabilities were $ 311 million and $ 673 million for the three and six months ended June 30, 2023, respectively, and $ 335 million and $ 581 million for the three and six months ended June 30, 2022, respectively.

Archer-Daniels-Midland Company

2 unchanged sentences

Disaggregation of Revenues

The following tables present revenue disaggregated by timing of recognition and major product lines for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31, 2023

The following tables present revenue disaggregated by timing of recognition and major product lines for the three and six months ended June 30, 2023 and 2022.

Three Months Ended June 30, 2023

Topic 606 Revenue Topic 815 (1)

14 unchanged sentences

Total Revenues $ 6,423 $ 200 $ 6,623 $ 18,567 $ 25,190

Three Months Ended March 31, 2022

Six Months Ended June 30, 2023

Topic 606 Revenue Topic 815 (1)

Point in Time Over Time Total Revenue Revenues

(In millions)

Ag Services and Oilseeds

Ag Services $ 2,088 $ 378 $ 2,466 $ 22,595 $ 25,061

Crushing 223 — 223 6,940 7,163

Refined Products and Other 1,203 — 1,203 4,996 6,199

Total Ag Services and Oilseeds 3,514 378 3,892 34,531 38,423

Carbohydrate Solutions

Starches and Sweeteners 3,956 — 3,956 1,256 5,212

Vantage Corn Processors 1,706 — 1,706 — 1,706

Total Carbohydrate Solutions 5,662 — 5,662 1,256 6,918

Human Nutrition 1,902 — 1,902 — 1,902

Animal Nutrition 1,804 — 1,804 — 1,804

Total Nutrition 3,706 — 3,706 — 3,706

Other Business 215 — 215 — 215

Total Revenues $ 13,097 $ 378 $ 13,475 $ 35,787 $ 49,262

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Revenues (Continued)

Three Months Ended June 30, 2022

Topic 606 Revenue Topic 815 (1)

(In millions) Point in Time Over Time Total Revenue Revenues

13 unchanged sentences

Total Revenues $ 7,110 $ 209 $ 7,319 $ 19,965 $ 27,284

Six Months Ended June 30, 2022

Topic 606 Revenue Topic 815 (1)

Point in Time Over Time Total Revenue Revenues

(In millions)

Ag Services and Oilseeds

Ag Services $ 1,983 $ 384 $ 2,367 $ 23,813 $ 26,180

Crushing 253 — 253 6,331 6,584

Refined Products and Other 1,376 — 1,376 5,542 6,918

Total Ag Services and Oilseeds 3,612 384 3,996 35,686 39,682

Carbohydrate Solutions

Starches and Sweeteners 3,819 — 3,819 1,198 5,017

Vantage Corn Processors 2,100 — 2,100 — 2,100

Total Carbohydrate Solutions 5,919 — 5,919 1,198 7,117

Human Nutrition 1,978 — 1,978 — 1,978

Animal Nutrition 1,949 — 1,949 — 1,949

Total Nutrition 3,927 — 3,927 — 3,927

Other Business 208 — 208 — 208

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

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

12 unchanged sentences

The Company earns returns from the difference in interest rates between the LCs that guarantee payment on the underlying purchases and sales of grain given the differing risk profiles of the underlying transactions.

The net return related to structured trade finance activities is included in revenue and is not significant for the quarters ended March 31, 2023 and 2022.

The net return related to structured trade finance activities is included in revenue and is not significant for the three and six months ended June 30, 2023 and 2022.

Carbohydrate Solutions

16 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, 2023 and December 31, 2022.

Fair Value Measurements at March 31, 2023

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

Fair Value Measurements at June 30, 2023

Quoted Prices in

15 unchanged sentences

Foreign currency contracts — 204 — 204

Debt conversion option — — 1 1

Inventory-related payables — 1,077 65 1,142

32 unchanged sentences

When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the inventory is classified in Level 3.

Changes in the fair value of inventories are recognized in the consolidated statements of earnings as a component of cost of products sold.

Changes in the fair value of inventories and inventory-related payables are recognized in the consolidated statements of earnings as a component of cost of products sold.

Archer-Daniels-Midland Company

1 unchanged sentence

Fair Value Measurements (Continued)

Derivative contracts include exchange-traded commodity futures and options contracts, forward commodity purchase and sale contracts, and OTC instruments related primarily to agricultural commodities, energy, interest rates, and foreign currencies.

Derivative contracts include exchange-traded commodity futures and options contracts, forward commodity purchase and sale contracts, and over-the-counter (OTC) instruments related primarily to agricultural commodities, energy, interest rates, and foreign currencies.

Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified in Level 1.

The majority of the Company’s exchange-traded futures and options contracts are cash-settled on a daily basis and, therefore, are not included in these tables.

Substantially all of the Company’s exchange-traded futures and options contracts are cash-settled on a daily basis and, therefore, are not included in these tables.

Fair value for forward commodity purchase and sale contracts is estimated based on exchange-quoted prices adjusted for differences in local markets.

8 unchanged sentences

Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net, depending upon the purpose of the contract.

The changes in the fair value of derivatives designated as effective cash flow hedges are recognized in the consolidated balance sheets as a component of AOCI until the hedged items are recorded in earnings or it is probable the hedged transaction will no longer occur.

The changes in the fair value of derivatives designated as effective cash flow hedges are recognized in the consolidated balance sheets as a component of accumulated other comprehensive income (AOCI) until the hedged items are recorded in earnings or it is probable the hedged transaction will no longer occur.

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

4 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, 2023.

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

Level 3 Fair Value Asset Measurements at

March 31, 2023

June 30, 2023

Market Commodity

(In millions)

Balance, December 31, 2022 $ 2,760 $ 541 $ 3,301

Balance, March 31, 2023 $ 3,503 $ 649 $ 4,152

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

4 unchanged sentences

Transfers out of Level 3 ( 813 ) ( 21 ) ( 834 )

Ending balance, March 31, 2023 $ 3,503 $ 649 $ 4,152

* Includes increase in unrealized gains of $ 632 million relating to Level 3 assets still held at March 31, 2023.

Ending balance, June 30, 2023 $ 2,859 $ 886 $ 3,745

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

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, 2023.

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

Level 3 Fair Value Liability Measurements at

March 31, 2023

June 30, 2023

Payables Commodity

1 unchanged sentence

(In millions)

Balance, December 31, 2022 $ 89 $ 603 $ 6 $ 698

Balance, March 31, 2023 $ 57 $ 455 $ 1 $ 513

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

5 unchanged sentences

Transfers out of Level 3 — ( 2 ) — ( 2 )

Ending balance, March 31, 2023 $ 57 $ 455 $ 1 $ 513

* Includes increase in unrealized losses of $ 248 million relating to Level 3 liabilities still held at March 31, 2023.

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2022.

Ending balance, June 30, 2023 $ 65 $ 791 $ — $ 856

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

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

Level 3 Fair Value Asset Measurements at

March 31, 2022

June 30, 2022

Market Commodity

(In millions)

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

Total increase (decrease) in net realized/unrealized gains included in cost of products sold* ( 216 ) 319 103

Purchases 11,678 — 11,678

Sales ( 11,993 ) — ( 11,993 )

Settlements — ( 495 ) ( 495 )

Transfers into Level 3 222 293 515

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

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.

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, 2022.

Level 3 Fair Value Liability Measurements at

June 30, 2022

Payables Commodity

Losses Debt Conversion Option

(In millions)

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* ( 2 ) 293 ( 19 ) 272

Purchases 7 — — 7

Sales ( 3 ) — — ( 3 )

Settlements — ( 1,251 ) — ( 1,251 )

Transfers into Level 3 — 161 — 161

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

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 six months ended June 30, 2023.

Level 3 Fair Value Asset Measurements at

June 30, 2023

Market Commodity

(In millions)

Balance, December 31, 2022 $ 2,760 $ 541 $ 3,301

5 unchanged sentences

Transfers out of Level 3 ( 1,088 ) ( 58 ) ( 1,146 )

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, 2023 $ 2,859 $ 886 $ 3,745

* Includes increase in unrealized gains of $ 1.4 billion relating to Level 3 assets still held at June 30, 2023.

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, 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 six months ended June 30, 2023.

Level 3 Fair Value Liability Measurements at

March 31, 2022

June 30, 2023

Payables Commodity

3 unchanged sentences

Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* 2 778 ( 6 ) 774

Purchase 7 — — 7

Sales — — — —

Settlements ( 34 ) ( 707 ) — ( 741 )

Transfers into Level 3 1 125 — 126

Transfers out of Level 3 — ( 8 ) — ( 8 )

Ending balance, June 30, 2023 $ 65 $ 791 $ — $ 856

* Includes increase in unrealized losses of $ 0.8 billion relating to Level 3 liabilities still held at June 30, 2023.

The following table presents a rollforward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the 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

Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 431 952 1,383

Purchases 21,230 — 21,230

3 unchanged sentences

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

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.

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.

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.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Fair Value Measurements (Continued)

Level 3 Fair Value Liability Measurements at

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

Purchases 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.

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.

5 unchanged sentences

Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these unobservable price components.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

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, 2023 and December 31, 2022.

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, 2023 and December 31, 2022.

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, 2023 is a weighted average 22.2 % of the total price for assets and 20.9 % of the total price for liabilities.

As an example, for Level 3 inventories with basis, the unobservable component as of June 30, 2023 is a weighted average 21.7 % of the total price for assets and 21.5 % of the total price for liabilities.

Weighted Average % of Total Price

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Component Type Assets Liabilities Assets Liabilities

5 unchanged sentences

Transportation cost 6.4 % 2.4 % 13.5 % 3.7 %

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Fair Value Measurements (Continued)

In certain of the Company’s principal markets, the Company relies on price quotes from third parties to value its inventories and physical commodity purchase and sale contracts.

10 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.

The following table sets forth the fair value of derivatives not designated as hedging instruments as of March 31, 2023 and December 31, 2022.

March 31, 2023 December 31, 2022

The following table sets forth the fair value of derivatives not designated as hedging instruments as of June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

Assets Liabilities Assets Liabilities

4 unchanged sentences

Total $ 1,779 $ 1,507 $ 1,491 $ 1,529

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 and six months ended June 30, 2023 and 2022.

Archer-Daniels-Midland Company

1 unchanged sentence

Derivative Instruments and Hedging Activities (Continued)

Other expense (income) - net

Other (income) expense - net

Cost of Interest

(In millions) Revenues products sold expense

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Consolidated Statement of Earnings $ 25,190 $ 23,307 $ ( 37 ) $ 180

4 unchanged sentences

Total gain (loss) recognized in earnings $ ( 15 ) $ 188 $ 43 $ 1 $ 217

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

Other (income) expense - net

Cost of Interest

(In millions) Revenues products sold expense

Six Months Ended June 30, 2023

Consolidated Statement of Earnings $ 49,262 $ 45,299 $ ( 81 ) $ 327

Pre-tax gains (losses) on:

Foreign Currency Contracts $ ( 26 ) $ 248 $ 27 $ —

Commodity Contracts — 475 — —

Debt Conversion Option — — — 6

Total gain (loss) recognized in earnings $ ( 26 ) $ 723 $ 27 $ 6 $ 730

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

Changes in the market value of inventories of certain merchandisable agricultural commodities, inventory-related payables, 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.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

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, 2023 and December 31, 2022.

The Company had certain derivatives designated as cash flow and net investment hedges as of June 30, 2023 and December 31, 2022.

For derivative instruments that are designated and qualify as highly-effective cash flow hedges (i.e., hedging the exposure to variability in expected future cash flow that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of AOCI and as an operating activity in the statement of cash flows, and is reclassified into earnings in the same line item affected by the hedged transaction in the same period or periods during which the hedged transaction affects earnings.

4 unchanged sentences

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.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

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.

2 unchanged sentences

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

At March 31, 2023, the Company had designated hedges representing between 1 % and 31 % of its anticipated monthly grind of corn for the next 12 months.

At June 30, 2023, the Company had designated hedges representing between 1 % and 34 % 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.

1 unchanged sentence

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, 2023, the Company had no hedges related to ethanol sales under these programs.

During the past 12 months and as of June 30, 2023, 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 92 % and 100 % of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities.

At March 31, 2023, 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, 2023, 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 71 % and 91 % of the anticipated monthly natural gas consumption at the designated facilities.

At March 31, 2023, the Company had designated hedges representing between 37 % and 80 % of the anticipated monthly natural gas consumption over the next 12 months.

As of March 31, 2023 and December 31, 2022, the Company had after-tax losses of $ 65 million and $ 17 million in AOCI, respectively, related to gains and losses from these programs.

The Company expects to recognize $ 63 million of the March 31, 2023 after-tax losses in its consolidated statement of earnings during the next 12 months.

At June 30, 2023, the Company had designated hedges representing between 37 % and 78 % of the anticipated monthly natural gas consumption over the next 12 months.

As of June 30, 2023 and December 31, 2022, the Company had after-tax losses of $ 91 million and $ 17 million in AOCI, respectively, related to gains and losses from these programs.

The Company expects to recognize $ 91 million of the June 30, 2023 after-tax losses in its consolidated statement of earnings during the next 12 months.

Interest Rate Contracts

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

The Company used 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.

3 unchanged sentences

During the quarter ended March 31, 2023, the Company unwound the swap locks in anticipation of the April 3, 2023 debt issuance.

As of March 31, 2023 and December 31, 2022, the Company had after-tax gains of $ 79 million and $ 82 million in AOCI, respectively, related to the swap locks.

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

Foreign Currency Contracts

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 as of March 31, 2023 and December 31, 2022, and foreign exchange forwards with an aggregate notional amount of $ 2.8 billion and $ 2.5 billion as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022, the Company had after-tax gains of $ 54 million and $ 79 million in AOCI, respectively, related to foreign exchange gains and losses from net investment hedge transactions.

The Company executed USD-fixed to Euro-fixed cross-currency swaps with an aggregate notional amount of $ 0.8 billion as of June 30, 2023 and December 31, 2022, and foreign exchange forwards with an aggregate notional amount of $ 3.2 billion and $ 2.5 billion as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, the Company had after-tax gains of $ 16 million and $ 79 million in AOCI, respectively, related to foreign exchange gains and losses from net investment hedge transactions.

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

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 designated as hedging instruments as of March 31, 2023 and December 31, 2022.

March 31, 2023 December 31, 2022

The following table sets forth the fair value of derivatives designated as hedging instruments as of June 30, 2023 and December 31, 2022.

June 30, 2023 December 31, 2022

Assets Liabilities Assets Liabilities

4 unchanged sentences

Total $ 46 $ 119 $ 213 $ 20

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, 2023 and 2022.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Derivative Instruments and Hedging Activities (Continued)

Cost of products sold

(In millions) Revenues

Three Months Ended March 31, 2023

(In millions)

Three Months Ended June 30, 2023

Consolidated Statement of Earnings $ 23,307

3 unchanged sentences

Total gain (loss) recognized in earnings $ ( 41 ) $ ( 41 )

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Consolidated Statement of Earnings $ 25,184

3 unchanged sentences

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

Cost of products sold

(In millions)

Six Months Ended June 30, 2023

Consolidated Statement of Earnings $ 45,299

Effective amounts recognized in earnings

Pre-tax gains (losses) on:

Commodity Contracts $ ( 145 )

Total gain (loss) recognized in earnings $ ( 145 ) $ ( 145 )

Six Months Ended June 30, 2022

Consolidated Statement of Earnings $ 46,937

Effective amounts recognized in earnings

Pre-tax gains (losses) on:

Commodity Contracts $ 248

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

Other Net Investment Hedging Strategies

The Company has designated € 1.3 billion of its outstanding long-term debt and commercial paper borrowings at March 31, 2023 and December 31, 2022 as hedges of its net investment in a foreign subsidiary.

As of March 31, 2023 and December 31, 2022, the Company had after-tax gains of $ 208 million and $ 228 million in AOCI, respectively, related to foreign exchange gains and losses from the net investment hedge transactions.

The Company has designated € 0.9 billion and € 1.3 billion of its outstanding long-term debt and commercial paper borrowings at June 30, 2023 and December 31, 2022, respectively, as hedges of its net investment in a foreign subsidiary.

As of June 30, 2023 and December 31, 2022, the Company had after-tax gains of $ 208 million and $ 228 million in AOCI, respectively, related to foreign exchange gains and losses from the net investment hedge transactions.

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

3 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions)

11 unchanged sentences

(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 $ 4 million and $ 3 million at March 31, 2023 and December 31, 2022, respectively.

Interest earned on financing receivables of $ 6 million and $ 4 million for the three months ended March 31, 2023 and 2022, respectively, is included in interest and investment income in the consolidated statements of earnings.

(2) Non-trade receivables as of March 31, 2023 included dividends receivable of $ 116 million.

The amounts are reported net of allowances of $ 3 million at June 30, 2023 and December 31, 2022.

Interest earned on financing receivables of $ 4 million and $ 10 million for the three and six months ended June 30, 2023, respectively, and $ 4 million and $ 8 million for the three and six months ended June 30, 2022, respectively, is included in interest and investment income in the consolidated statements of earnings.

Archer-Daniels-Midland Company

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions)

8 unchanged sentences

Debt and Financing Arrangements

During the quarter ended March 31, 2023, Archer Daniels Midland Singapore, Pte.

On April 3, 2023 , the Company issued $ 500 million aggregate principal amount of 4.500 % Notes due August 15, 2033 .

Net proceeds before expenses were $ 493 million.

In June 2023, the Company redeemed € 600 million aggregate principal amount of 1.750 % Notes due 2023.

During the six months ended June 30, 2023, Archer Daniels Midland Singapore, Pte.

Ltd., a wholly-owned subsidiary of the Company, increased its revolving credit facility from $ 500 million to $ 750 million.

The facility is used to finance working capital requirements and for and general corporate purposes.

At March 31, 2023, the fair value of the Company’s long-term debt was below the carrying value by $ 0.1 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards).

At March 31, 2023, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling $ 13.3 billion, of which $ 8.9 billion was unused.

The facility is used to finance working capital requirements and for general corporate purposes.

At June 30, 2023, the fair value of the Company’s long-term debt was below the carrying value by $ 0.3 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards).

At June 30, 2023, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling $ 13.6 billion, of which $ 11.3 billion was unused.

Of the Company’s total lines of credit, $ 5.0 billion supported the combined U.S.

and European commercial paper borrowing programs, against which there was $ 0.8 billion commercial paper outstanding at March 31, 2023.

and European commercial paper borrowing programs, against which there was no commercial paper outstanding at June 30, 2023.

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

The Programs provide the Company with up to $ 2.9 billion in funding resulting from the sale of accounts receivable with $ 0.3 billion unused capacity as of March 31, 2023.

The Company’s effective tax rate was 16.1 % for the three months ended March 31, 2023 compared to 16.3 % for the three months ended March 31, 2022.

The decrease in the rate was primarily due to the impact of discrete tax items, partially offset by changes in the geographic mix of forecasted earnings.

The Programs provide the Company with up to $ 3.0 billion in funding resulting from the sale of accounts receivable with $ 0.9 billion unused capacity as of June 30, 2023.

The Company’s effective tax rate was 18.0 % and 17.0 % for the three and six months ended June 30, 2023, respectively, compared to 18.4 % and 17.4 % for the three and six months ended June 30, 2022, respectively.

The decrease in the rate was primarily due to the impact of discrete tax items.

On August 16, 2022, the U.S.

10 unchanged sentences

Therefore, it is difficult to predict the timing for resolution of tax positions and the Company cannot predict or provide assurance as to the ultimate outcome of these ongoing or future examinations.

However, the Company does not anticipate that the total amount of unrecognized tax benefits will increase or decrease significantly in the next twelve months.

Given the long periods of time involved in resolving tax positions, the Company does not expect that the recognition of unrecognized tax benefits will have a material impact on the Company’s effective income tax rate in any given period.

However, the Company does not anticipate the total amount of unrecognized tax benefits will increase or decrease significantly in the next twelve months.

Given the long periods of time involved in resolving tax positions, the Company does not expect the recognition of unrecognized tax benefits will have a material impact on the Company’s effective income tax rate in any given period.

The Company’s subsidiary in Argentina, ADM Agro SRL (formerly ADM Argentina SA and Alfred C.

Toepfer Argentina SRL), received tax assessments challenging transfer prices used to price grain exports for the tax years 1999 through 2011, 2014 and 2015.

As of March 31, 2023, these assessments totaled $ 4 million in tax and up to $ 22 million in interest (adjusted for variation in currency exchange rates).

As of June 30, 2023, these assessments totaled $ 3 million in tax and up to $ 18 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.

The Company strongly believes that it has complied with all Argentine tax laws.

The Company strongly believes it has complied with all Argentine tax laws.

Currently the Company is under audit for fiscal years 2016 to 2017.

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 2015.

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 is more likely than not to be sustained based upon its technical merits, and accordingly, has not recorded a tax liability for these assessments.

The Company believes it has appropriately evaluated the transactions underlying these assessments, and has concluded, based on Argentine tax law, that its tax position is more likely than not to be sustained based upon its technical merits, and accordingly, has not recorded a tax liability for these assessments.

The Company intends to vigorously defend its position against any assessments.

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, 2023, this assessment was $ 88 million in tax and $ 32 million in interest (adjusted for variation in currency exchange rates).

As of June 30, 2023, this assessment was $ 88 million in tax and $ 33 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.

2 unchanged sentences

During the quarter ended March 31, 2023, ADM filed a cross-appeal.

As of March 31, 2023, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation.

As of June 30, 2023, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation.

Archer-Daniels-Midland Company

1 unchanged sentence

Accumulated Other Comprehensive Income

The following tables set forth the changes in AOCI by component for the three months ended March 31, 2023 and the reclassifications out of AOCI for the three months ended March 31, 2023 and 2022:

Three months ended March 31, 2023

The following tables set forth the changes in AOCI by component for the three and six months ended June 30, 2023 and the reclassifications out of AOCI for the three and six months ended June 30, 2023 and 2022:

Three months ended June 30, 2023

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, 2023 $ ( 2,452 ) $ 60 $ ( 61 ) $ ( 10 ) $ ( 2,463 )

Other comprehensive income (loss) before reclassifications 88 ( 78 ) ( 2 ) 4 12

Gain (loss) on net investment hedges ( 52 ) — — — ( 52 )

Amounts reclassified from AOCI — 41 ( 4 ) — 37

Tax effect 14 16 4 ( 1 ) 33

Net of tax amount 50 ( 21 ) ( 2 ) 3 30

Balance at June 30, 2023 $ ( 2,402 ) $ 39 $ ( 63 ) $ ( 7 ) $ ( 2,433 )

Six months ended June 30, 2023

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, 2022 $ ( 2,622 ) $ 148 $ ( 22 ) $ ( 13 ) $ ( 2,509 )

4 unchanged sentences

Net of tax amount 220 ( 109 ) ( 41 ) 6 76

Balance at March 31, 2023 $ ( 2,452 ) $ 60 $ ( 61 ) $ ( 10 ) $ ( 2,463 )

Balance at June 30, 2023 $ ( 2,402 ) $ 39 $ ( 63 ) $ ( 7 ) $ ( 2,433 )

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 2023 2022 2023 2022

13 unchanged sentences

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,

2023 2022 2023 2022

(In millions)

2 unchanged sentences

Other (Income) Expense - Net $ ( 37 ) $ ( 83 ) $ ( 81 ) $ ( 116 )

Gains on sales of assets in the three months ended March 31, 2023 consisted of gains on sales of certain assets and disposals of individually insignificant assets in the ordinary course of business.

Other - net in the three months ended March 31, 2023 included the non-service components of net pension benefit income of $ 4 million, net foreign exchange gains, and other net income.

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

Gains on sales of assets in the three and six months ended June 30, 2023 and 2022 consisted of gains on sales of certain assets and disposals of individually insignificant assets in the ordinary course of business.

Other - net in the three and six months ended June 30, 2023 included the non-service components of net pension benefit income of $ 5 million and $ 9 million, respectively, net foreign exchange gains, and net other income.

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 payment from the USDA Biofuel Producer Recovery Program, net foreign exchange gains, and net other expense.

Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Segment Information

12 unchanged sentences

Segment Information (Continued)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In millions) 2023 2022 2023 2022

29 unchanged sentences

Segment Information (Continued)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In millions) 2023 2022 2023 2022

6 unchanged sentences

Gains on sales of assets (1)

Impairment, restructuring, and settlement charges (2)

Impairment and restructuring charges and contingency provisions (2)

( 114 ) ( 9 ) ( 121 ) ( 27 )

Total segment operating profit 1,525 1,840 3,244 3,379

1 unchanged sentence

Earnings before income taxes $ 1,132 $ 1,519 $ 2,529 $ 2,790

(1) Current and prior-year quarter gains were related to the sale of certain assets.

(2) Current quarter charges were related to the impairment of certain assets and restructuring.

Prior-year quarter charges were related to the impairment of certain Ukraine assets, partially offset by an insurance settlement.

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

(2) Current quarter and year-to-date charges were related to the impairment of certain long-lived assets and intangibles, restructuring, and a contingent loss provision related to import duties.

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

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

Asset Impairment, Exit, and Restructuring Costs

Asset impairment, exit, and restructuring costs in the three months ended March 31, 2023 consisted of $ 3 million of impairments related to certain long-lived assets and $ 4 million of restructuring charges, presented as specified items within segment operating profit.

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 and six months ended June 30, 2023 consisted of $ 43 million and $ 46 million of impairments related to certain long-lived assets and intangibles, respectively, and $ 17 million and $ 21 million of restructuring charges, respectively.

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

Sale of Accounts Receivable

2 unchanged sentences

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 $ 1.8 billion for the accounts receivable transferred.

In exchange, ADM Receivables receives a cash payment of up to $ 1.9 billion, as amended, for the accounts receivable transferred.

The First Program terminates on May 17, 2024, unless extended.

2 unchanged sentences

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 $ 1.1 billion (€ 1.0 billion), as amended, for the accounts receivables transferred.

In exchange, ADM Ireland Receivables receives a cash payment of up to $ 1.1 billion (€ 1.0 billion) for the accounts receivables transferred.

The Second Program terminates on February 20, 2024, 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, 2023 and December 31, 2022, 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

1 unchanged sentence

Sale of Accounts Receivable (Continued)

As of March 31, 2023 and December 31, 2022, the fair value of trade receivables transferred to the Purchasers under the Programs and derecognized from the Company’s consolidated balance sheets was $ 2.6 billion.

Total receivables sold were $ 15.1 billion and $ 14.3 billion for the three months ended March 31, 2023 and 2022, respectively.

Cash collections from customers on receivables sold were $ 14.8 billion and $ 13.7 billion for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023 and December 31, 2022, receivables pledged as collateral to the Purchasers was $ 0.6 billion.

Transfers of receivables under the Programs resulted in an expense for the loss on sale of $ 23 million and $ 5 million for the three months ended March 31, 2023 and 2022, 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, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, the fair value of trade receivables transferred to the Purchasers under the Programs and derecognized from the Company’s consolidated balance sheets was $ 2.1 billion and $ 2.6 billion, respectively.

Total receivables sold were $ 28.8 billion and $ 29.3 billion for the six months ended June 30, 2023 and 2022, respectively.

Cash collections from customers on receivables sold were $ 28.4 billion and $ 28.2 billion for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 and December 31, 2022, receivables pledged as collateral to the Purchasers was $ 0.8 billion and $ 0.6 billion, respectively.

Transfers of receivables under the Programs resulted in an expense for the loss on sale of $ 11 million and $ 34 million for the three and six months ended June 30, 2023, respectively, and $ 3 million and $ 8 million for the three and six months ended June 30, 2022, 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.

Subsequent Event

On April 3, 2023 , the Company issued $ 500 million aggregate principal amount of 4.500 % Notes due August 15, 2033 .

Net proceeds before expenses were $ 493 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

5 unchanged sentences

an industry-leading innovator in replacing petroleum-based products;

and a leader in sustainability.

It is one of the world’s leading producers of ingredients for sustainable nutrition.

and a company concerned about sustainability.

The Company is one of the world’s leading producers of ingredients for sustainable nutrition.

The Company uses its significant global asset base to originate and transport agricultural commodities, connecting to markets in over 190 countries.

10 unchanged sentences

• the announcement in March 2023 of the signing of a joint venture agreement with Marel, a leading provider of advanced food processing solutions, to build an innovation center in the heart of the Netherlands food valley at the Wageningen Campus, subject to regulatory approvals;

• the announcement in May 2023 of a Strategic Development Agreement with Air Protein, a pioneer in air-based nutritional protein that requires no agriculture or farmland, decoupling protein production from traditional supply chain risks, to collaborate on research and development to further advance new and novel proteins for nutrition;

• the announcement in May 2023 of an agreement to acquire D.C.A.

Finance B.V., a commodity derivative brokerage service provider, subject to required regulatory approvals;

• the announcement in June 2023 of the opening of a new Customer Creation and Innovation Center in Manchester, England, serving as a United Kingdom (UK) hub for food innovation and building upon ADM’s strong presence in the UK;

• the launch in July 2023 of a growth initiative of its re:generations™ regenerative agriculture program that will drive expansion to cover 2 million acres across 18 U.S.

states and Canada in 2023, and 4 million acres globally by 2025.

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

2 unchanged sentences

Productivity, Innovation, and Culture.

The Productivity pillar includes (1) advancing the roles of the Company’s Centers of Excellence in procurement, supply chain, and operations to deliver additional efficiencies across the enterprise;

The Productivity pillar includes (1) partnering across various global teams including procurement, supply chain, operations, and commercial to optimize costs and improve production volumes across the enterprise;

(2) continued roll out of the 1ADM business transformation program and implementation of improved standardized business processes;

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

and (3) increased use of technology, data analytics, and automation at production facilities, in offices, and with customers to improve efficiencies and customer service.

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

The Innovation pillar includes expansions and investments in (1) improving the customer experience by leveraging producer relationships and enhancing the use of state-of-the-art digital technology;

4 unchanged sentences

All of these efforts will continue to be strengthened by the Company’s ongoing commitment to its Readiness initiative as described in Part I Item 4 “Controls and Procedures” on page 55.

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

Environmental and Social Responsibility

5 unchanged sentences

ADM aims to eliminate deforestation from all of the Company’s supply chains by 2025.

The Company’s environmental goals, collectively called “Strive 35” – an ambitious plan to, by 2035, reduce from a 2019 baseline absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 25 percent, reduce absolute Scope 3 emissions by 25 percent, reduce energy intensity by 15 percent, reduce water intensity by 10 percent, and achieve a 90 percent landfill diversion rate – are part of an aggressive plan to continue to reduce the Company’s environmental footprint.

The Company’s environmental goals, collectively called “Strive 35” – an ambitious plan to, by 2035, reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 25 percent from a 2019 baseline, reduce absolute Scope 3 emissions by 25 percent, reduce energy intensity by 15 percent, reduce water intensity by 10 percent, and achieve a 90 percent landfill diversion rate – are part of an aggressive plan to continue to reduce the Company’s environmental footprint.

Operating Performance Indicators

9 unchanged sentences

Therefore, changes in revenues of these businesses may correspond to changes in margins or gross profit.

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

Thus, gross margins 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.

10 unchanged sentences

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 pages 38 and 39.

For more information, see “Non-GAAP Financial Measures” on pages 44 to 45 and 51 to 52.

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 geopolitical developments.

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

ADM employs approximately 640 people in Ukraine and operates an oilseeds crushing plant, a grain port terminal, inland and river silos, and a trading office.

The Company’s footprint in Russia is limited to operations related to the production and transport of essential food commodities and ingredients.

While the Company’s Ukraine and Russian operations have historically represented less than 0.2% 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 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.

The Black Sea Grain Initiative, an agreement that allowed Ukraine to export grain and other food products, expired on July 17, 2023.

For more information, refer to Part I, “Item 1A.

Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

As of June 30, 2023, ADM’s assets in Ukraine consisted primarily of current assets that were less than 0.4% of the Company’s total current assets and an immaterial amount of non-current assets.

Of the total current assets in Ukraine, the majority related to inventories that represented less than 0.3% of ADM’s total inventories.

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, 2023

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

In Ag Services and Oilseeds, supply has been impacted by market dislocations such as the Russian-Ukraine war, a record world soybean production, and extreme drought conditions in Argentina.

Inflationary pressures and declining natural gas prices impacted the entire value chain.

Crushing was impacted by sustainable biofuel demand and protein consumption around the globe.

In Refined Products and Other, margins were driven by strong oil demand, elevated oil values that were supported by biofuels demand driven by favorable blend economics due to historically low distillate levels.

Mediocre growth in mandated renewable volume obligations for 2023 to 2025 drove further market volatility.

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

Industry ethanol inventories were restrained as production slowed due to seasonal maintenance at processing plants and strong domestic demand heading into the summer driving season.

Solid export demand for ethanol supported the improved balance between supply and demand.

In Nutrition, demand was softer in a few food and beverage product categories.

Human Nutrition was impacted by inflation which drove lower demand especially in higher priced product categories in the food, beverage, and dietary supplement segment and impacted volumes in flavors, flavor systems, emulsifiers, bioactives, and alternative proteins.

In Animal Nutrition, amino acids margins were pressured due to competition returning to market and production cost inflation.

Results were also adversely affected by weak demand in other product lines due to decreased market for feed, particularly in North America and Europe, Middle East, and Africa (EMEA), and animal disease impacts on farms, and some premix and additives customers cutting products out of formulation due to increased ingredient, freight, and energy costs.

Increased competition in Latin America also contributed to the weak demand in that region.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Net earnings attributable to controlling interests decreased $0.3 billion from $1.2 billion to $0.9 billion.

Segment operating profit decreased $0.3 billion from $1.8 billion to $1.5 billion and included a net charge of $103 million consisting of asset impairment and restructuring charges of $114 million and a gain on the sale of certain assets of $11 million.

Included in segment operating profit in the prior-year quarter was a net charge of $9 million consisting of asset impairment charges.

Adjusted segment operating profit (a non-GAAP measure) decreased $0.2 billion to $1.6 billion due primarily to lower results in Crushing, Wilmar, Ag Services, Carbohydrate Solutions, and Animal Nutrition, partially offset by higher results in Refined Products and Other and Other Business.

Corporate results in the current quarter were a net charge of $393 million and included a mark-to-market gain of $1 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 $321 million and included a mark-to-market gain of $19 million on the conversion option of the exchangeable bonds issued in August 2020.

Income tax expense decreased $75 million to $204 million.

The effective tax rate for the quarter ended June 30, 2023 was 18.0% compared to 18.4% for the quarter ended June 30, 2022.

The decrease in the rate was primarily due to the impact of discrete tax items.

Analysis of Statements of Earnings

Processed volumes by product for the quarter are as follows (in metric tons):

Three Months Ended

(In thousands) 2023 2022 Change

Oilseeds 8,783 8,208 575

Corn 4,448 4,776 (328)

Total 13,231 12,984 247

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 increase in oilseeds processed volumes was primarily related to improved crush rates in the current quarter compared to lower crush rates in the prior-year quarter resulting from unplanned downtime due to logistics and staffing issues.

The overall decrease in corn processed volumes was related to unplanned downtime at a corn germ plant, lower export volumes in North America, and reduced grind in EMEA due to weaker demand.

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

Revenues by segment for the quarter are as follows:

Three Months Ended

2023 2022 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 13,366 $ 14,333 $ (967)

Crushing 3,480 3,362 118

Refined Products and Other 2,998 3,734 (736)

Total Ag Services and Oilseeds 19,844 21,429 (1,585)

Carbohydrate Solutions

Starches and Sweeteners 2,475 2,519 (44)

Vantage Corn Processors 906 1,232 (326)

Total Carbohydrate Solutions 3,381 3,751 (370)

Human Nutrition 966 1,020 (54)

Animal Nutrition 887 983 (96)

Total Nutrition 1,853 2,003 (150)

Other Business 112 101 11

Total $ 25,190 $ 27,284 $ (2,094)

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 decreased $2.1 billion to $25.2 billion due to lower sales prices ($3.2 billion), partially offset by higher sales volumes ($1.1 billion).

Lower sales prices of soybeans, oils, biodiesel, and corn and lower sales volumes of alcohol, cotton, wheat, and corn were partially offset by higher sales volumes of soybeans and farming materials.

Ag Services and Oilseeds revenues decreased 7% to $19.8 billion due to lower sales prices ($3.5 billion), partially offset by higher sales volumes ($1.9 billion).

Carbohydrate Solutions revenues decreased 10% to $3.4 billion due to lower sales volumes ($0.5 billion), partially offset by higher sales prices ($0.1 billion).

Nutrition revenues decreased 7% to $1.9 billion due to lower sales volumes ($0.3 billion), partially offset by higher sales prices ($0.2 million).

Cost of products sold decreased $1.9 billion to $23.3 billion due principally to lower average commodity costs partially offset by higher manufacturing expenses.

Manufacturing expenses increased $0.1 billion to $1.8 billion due principally to increases in maintenance expenses, salaries and benefit costs, commercial service fees, energy costs, and lease expense.

Foreign currency translation increased revenues and cost of products sold by $11 million and $13 million, respectively.

Gross profit decreased $0.2 billion or 10%, to $1.9 billion due principally to lower results in Crushing ($245 million), Carbohydrate Solutions ($104 million), Ag Services ($46 million), and Animal Nutrition ($38 million), partially offset by higher results in Refined Products and Other ($221 million).

These factors are explained in the segment operating profit discussion on page 43.

Selling, general, and administrative expenses increased $27 million to $841 million due primarily to higher salaries and benefit costs and higher professional and financing fees, partially offset by decreased provisions for bad debt.

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

Asset impairment, exit, and restructuring costs increased $59 million to $60 million.

Charges in the current quarter consisted of $43 million of impairments related to certain long-lived assets and intangibles and $17 million of restructuring.

Charges in the prior-year quarter were not material.

Equity in earnings of unconsolidated affiliates decreased $41 million to $151 million due primarily to lower earnings from the Company’s investments in Wilmar and Stratas Foods LLC.

Interest and investment income increased $110 million to $142 million due primarily to higher interest income driven by higher interest rates.

Interest expense increased $107 million to $180 million due primarily to increased short-term rates on customer deposit balances in ADM Investor Services and on the Company’s commercial paper borrowing programs and increased interest expense from the new debt issued in the current quarter.

Interest expense in the current quarter also included a $1 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020, compared to a $19 million mark-to-market gain adjustment in the prior-year quarter.

Other income-net decreased $46 million to $37 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, net foreign exchange gains, and net 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, a $50 million payment from USDA Biofuel Producer Recovery Program, and net foreign exchange gains, partially offset by net other expense.

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

Segment operating profit (loss), adjusted segment operating profit (a non-GAAP measure), and earnings before income taxes for the quarter are as follows:

Three Months Ended

Segment Operating Profit (Loss) 2023 2022 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 380 $ 407 $ (27)

Crushing 224 468 (244)

Refined Products and Other 362 130 232

Wilmar 88 114 (26)

Total Ag Services and Oilseeds 1,054 1,119 (65)

Carbohydrate Solutions

Starches and Sweeteners 285 393 (108)

Vantage Corn Processors 18 80 (62)

Total Carbohydrate Solutions 303 473 (170)

Human Nutrition 184 183 1

Animal Nutrition 1 56 (55)

Total Nutrition 185 239 (54)

Other Business 86 18 68

Specified Items:

Gains on sales of assets and businesses 11 — 11

Asset impairment, restructuring, and settlement charges (114) (9) (105)

Total Specified Items (103) (9) (94)

Total Segment Operating Profit $ 1,525 $ 1,840 $ (315)

Adjusted Segment Operating Profit (1)

$ 1,628 $ 1,849 $ (221)

Segment Operating Profit $ 1,525 $ 1,840 $ (315)

Corporate (393) (321) (72)

Earnings Before Income Taxes $ 1,132 $ 1,519 $ (387)

(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 decreased 6%.

Ag Services results were slightly lower than the strong second quarter of 2022.

South American origination results were higher year-over-year, as the business delivered record volumes and higher margins on strong export demand, leveraging strategic investments in port capacity to capitalize on the record Brazilian soybean crop.

Results for North America origination were slightly lower year-over-year, driven by lower export demand due to strong South America supplies.

Execution in destination marketing as well as effective risk management continued to deliver strong Global Trade results, though lower than the prior year’s record quarter.

Crushing results were much lower than the record results from the prior-year quarter.

Global soy crush margins remained strong, but lower year-over-year in all regions due to softer demand for both meal and oil, and a tight U.S.

soybean carryout.

This was partially offset by strong softseed margins and higher volumes, supported by a strong Canadian canola crop and utilization of flex capacity in EMEA.

Additionally, negative mark-to-market timing effects that are expected to reverse as contracts execute in future periods, affected the results in the current quarter.

Refined Products and Other results were significantly higher than the prior-year quarter, achieving a record second quarter.

North America results were higher, driven by strong food oil demand and improved biodiesel volumes.

In EMEA, strong export demand for biodiesel and domestic food oil demand supported stronger margins.

Additionally, positive mark-to-market timing effects that expected to reverse as contracts execute in future periods, contributed to the results in the current quarter.

Equity earnings from Wilmar were lower versus the second quarter of 2022.

Carbohydrate Solutions operating profit decreased 36%.

Starches and Sweeteners, including ethanol production from the wet mills, capitalized on a solid demand environment during the quarter.

North America starches and sweeteners delivered volumes and margins similar to the prior year quarter and ethanol margins were solid as industry stocks moderated, though lower relative to the prior-year quarter.

Results were negatively impacted due to unplanned downtime at one of the corn germ plants.

In EMEA, the business effectively managed margins to deliver improved results.

The global wheat milling business posted higher margins, supported by steady customer demand.

Vantage Corn Processors results were lower due to lower year-over-year ethanol margins and absence of the prior-year quarter’s $50 million payment from the USDA Biofuel Producer Recovery Program.

Nutrition operating profit decreased 23%.

Human Nutrition results were in-line with the second quarter of 2022, as the business effectively managed a challenging demand environment.

Flavors results were significantly higher than the prior-year quarter due to improved mix and pricing in EMEA as well as improving demand in North America.

Specialty Ingredients results were lower year-over-year due to softer demand for plant-based proteins, particularly in the meat alternatives category in North America and Europe, partially offset by strong performance in texturants.

Health and Wellness results were similar versus the prior-year quarter as lower demand for fibers offset lower selling, general, and administrative expenses.

Animal Nutrition results were much lower compared to the prior-year quarter due to significantly lower contribution from amino acids, pockets of softer global feed demand affecting volumes, and continued demand fulfillment challenges and inventory losses in pet solutions.

Other Business operating profit increased $68 million.

Higher net interest income drove improved earnings in ADM Investor Services.

Captive insurance results improved on premiums from new programs partially offset by increased claim settlements.

Corporate results for the quarter are as follows:

Three Months Ended

2023 2022 Change

(In millions)

Interest expense-net $ (125) $ (87) $ (38)

Unallocated corporate costs (262) (267) 5

Expenses related to acquisitions (3) — (3)

Gain on debt conversion option 1 19 (18)

Restructuring (charges) adjustment (3) 1 (4)

Other expense (1) 13 (14)

Total Corporate $ (393) $ (321) $ (72)

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

Corporate results were a net charge of $393 million in the current quarter compared to a net charge of $321 million in the prior-year quarter.

Interest expense-net increased $38 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from the new debt issued in the current quarter.

Unallocated corporate costs decreased $5 million as lower health insurance costs were partially offset by higher information technology costs.

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.

Other expense in the current quarter included foreign exchange losses and railroad maintenance expenses, partially offset by the non-service components of net pension benefit income of $5 million.

Other income in the prior-year quarter included the non-service components of net pension benefit income of $6 million, an investment revaluation gain of $3 million, and foreign exchange gains, partially offset by railroad maintenance expenses.

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 on borrowings, 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 on borrowings 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.

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 June 30, 2023 and 2022.

Three months ended June 30,

In millions Per share In millions Per share

Average number of shares outstanding - diluted 546 568

Net earnings and reported EPS (fully diluted) $ 927 $ 1.70 $ 1,236 $ 2.18

Gain on sales of assets and businesses - net of tax of $3 million (1)

(8) (0.02) — —

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

(1) — (19) (0.04)

Impairment and restructuring charges and contingency provisions - net of tax of $24 million in 2023 and $2 million in 2022 (1)

93 0.17 6 0.01

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

Certain discrete tax adjustments 21 0.04 (1) —

Total adjustments 107 0.19 (14) (0.03)

Adjusted net earnings and adjusted EPS $ 1,034 $ 1.89 $ 1,222 $ 2.15

(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 three months ended June 30, 2023 and 2022.

Three months ended

(In millions) 2023 2022 Change

Earnings before income taxes $ 1,132 $ 1,519 $ (387)

Interest expense 124 73 51

Depreciation and amortization 262 257 5

Gains on sales of assets and businesses (11) — (11)

Expenses related to acquisitions 3 — 3

Railroad maintenance expenses 2 9 (7)

Impairment and restructuring charges and contingency provisions 117 8 109

Adjusted EBITDA $ 1,629 $ 1,866 $ (237)

Three months ended

(In millions) 2023 2022 Change

Ag Services and Oilseeds $ 1,143 $ 1,207 $ (64)

Carbohydrate Solutions 381 550 (169)

Nutrition 253 304 (51)

Other Business 84 24 60

Corporate (232) (219) (13)

Adjusted EBITDA $ 1,629 $ 1,866 $ (237)

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, 2023

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

In Ag Services and Oilseeds, supply has been impacted by market dislocations such as the Russian-Ukraine war, a record world soybean production, and extreme drought conditions in Argentina.

Inflationary pressures impacted the entire value chain.

Crushing was impacted by sustainable biofuel demand and protein consumption around the globe.

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

Industry ethanol inventories were restrained as production slowed due to seasonal maintenance at processing plants and strong domestic demand heading into the summer driving season.

Solid export demand for ethanol supported the improved balance between supply and demand.

In Nutrition, demand was softer in a few food and beverage product categories.

In Animal Nutrition, amino acids margins were pressured due to competition returning to market and production cost inflation.

Results were also adversely affected by weak demand in other product lines due to decreased market for feed, particularly in North America and EMEA, and animal disease impacts on farms, and some premix and additives customers cutting products out of formulation due to increased ingredient, freight, and energy costs.

Increased competition in Latin America also contributed to the weak demand in that region.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Net earnings attributable to controlling interests decreased $0.2 billion to $2.1 billion.

Segment operating profit decreased $0.1 billion to $3.2 billion and included a net charge of $109 million consisting of asset impairment and restructuring charges of $121 million and a gain on the sale of certain assets of $12 million.

Included in segment operating profit in the prior period was 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.

Adjusted segment operating profit (a non-GAAP measure) decreased $52 million to $3.4 billion due primarily to lower results in Crushing, Wilmar, Carbohydrate Solutions, and Nutrition, partially offset by higher results in Refined Products and Other, Ag Services, and Other Business.

Corporate results in the current period were a net charge of $0.7 billion and included a mark-to-market gain of $6 million on the conversion option of the exchangeable bonds issued in August 2020.

Corporate results in the prior period were a net charge of $0.6 billion and included a mark-to-market gain of $4 million on the conversion option of the exchangeable bonds issued in August 2020.

Income taxes of $429 million decreased $57 million.

The Company’s effective tax rate for the six months ended June 30, 2023 was 17.0% compared to 17.4% for the six months ended June 30, 2022.

The decrease in the rate was primarily due to the impact of discrete tax items.

Analysis of Statements of Earnings

Processed volumes by product for the six months ended June 30, 2023 and 2022 are as follows (in metric tons):

Six Months Ended

(In thousands) 2023 2022 Change

Oilseeds 17,410 16,699 711

Corn 8,842 9,588 (746)

Total 26,252 26,287 (35)

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

The overall increase in oilseeds processed volumes was primarily related to improved crush rates in the current period compared to lower crush rates in the prior period resulting from unplanned downtime due to logistics and staffing issues.

The overall decrease in corn processed volumes was related to unplanned downtime at a corn germ plant, lower export volumes in North America, and reduced grind in EMEA due to weaker demand.

Revenues by segment for the six months ended June 30, 2023 and 2022 are as follows:

Six Months Ended

2023 2022 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 25,061 $ 26,180 $ (1,119)

Crushing 7,163 6,584 579

Refined Products and Other 6,199 6,918 (719)

Total Ag Services and Oilseeds 38,423 39,682 (1,259)

Carbohydrate Solutions

Starches and Sweeteners 5,212 5,017 195

Vantage Corn Processors 1,706 2,100 (394)

Total Carbohydrate Solutions 6,918 7,117 (199)

Human Nutrition 1,902 1,978 (76)

Animal Nutrition 1,804 1,949 (145)

Total Nutrition 3,706 3,927 (221)

Other Business 215 208 7

Total $ 49,262 $ 50,934 $ (1,672)

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 decreased $1.7 billion to $49.3 billion due to lower sales prices ($2.7 billion), partially offset by higher sales volumes ($1.0 billion).

Lower sales prices of soybeans, oils, and biodiesel and lower sales volumes of corn, wheat, and alcohol were partially offset by higher sales prices of meal and higher sales volumes of soybeans, and biodiesel.

Ag Services and Oilseeds revenues decreased 3% to $38.4 billion due to lower sales prices ($3.1 billion), partially offset by higher sales volumes ($1.8 billion).

Carbohydrate Solutions revenues decreased 3% to $6.9 billion due to lower sales volumes ($0.3 billion), partially offset by lower sales prices ($0.1 billion).

Nutrition revenues decreased 6% to $3.7 billion due to lower sales volumes ($0.5 billion), partially offset by higher sales prices ($0.3 billion).

Cost of products sold decreased $1.6 billion to $45.3 billion due principally to lower average commodity costs partially offset by higher manufacturing expenses.

Manufacturing expenses increased $0.4 billion to $3.8 billion due principally to increases in energy costs, maintenance expenses, salaries and benefit costs, commercial service fees, and lease expense.

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

Foreign currency translation decreased revenues and cost of products sold by $0.3 billion.

Gross profit decreased $34 million or 1% to $4.0 billion due principally to lower results in Crushing ($232 million), Carbohydrate Solutions ($125 million), and Nutrition ($92 million), partially offset by higher results in Refined Products and Other ($330 million) and Ag Services ($89 million).

These factors are explained in the segment operating profit discussion on page 50.

Selling, general, and administrative expenses increased $0.1 billion to $1.7 billion due primarily to higher salaries and benefit costs and higher professional and financing fees, partially offset by decreased provisions for bad debt.

Asset impairment, exit, and restructuring costs increased $65 million to $67 million.

Charges in the current period consisted of $46 million of impairments related to certain long-lived assets and intangibles and $21 million of restructuring.

Charges in the prior period were not material.

Equity in earnings of unconsolidated affiliates decreased $71 million to $325 million due primarily to lower earnings from the Company’s investments in Wilmar and Almidones Mexicanos S.A.

Interest and investment income increased $185 million to $276 million due primarily to higher interest income, partially offset by revaluation gains of $36 million in the prior period.

Interest expense increased $162 million to $327 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from new debt issuances.

Interest expense in the current period also included a $6 million mark-to-market gain adjustment related to the conversion option of the exchangeable bonds issued in August 2020 compared to a $4 million mark-to-market gain adjustment in the prior period.

Other income-net decreased $35 million to $81 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, net foreign exchange gains, and net other income.

Income in the prior 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 payment from USDA Biofuel Producer Recovery Program, and net foreign exchange gains, partially offset by net other expense.

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, 2023 and 2022 are as follows:

Six Months Ended

Segment Operating Profit (Loss) 2023 2022 Change

(In millions)

Ag Services and Oilseeds

Ag Services $ 728 $ 665 $ 63

Crushing 650 896 (246)

Refined Products and Other 689 328 361

Wilmar 197 238 (41)

Total Ag Services and Oilseeds 2,264 2,127 137

Carbohydrate Solutions

Starches and Sweeteners 592 709 (117)

Vantage Corn Processors (16) 81 (97)

Total Carbohydrate Solutions 576 790 (214)

Human Nutrition 322 324 (2)

Animal Nutrition 8 104 (96)

Total Nutrition 330 428 (98)

Other Business 183 60 123

Specified Items:

Gains (losses) on sales of assets and businesses 12 1 11

Asset impairment, restructuring, and settlement charges (121) (27) (94)

Total Specified Items (109) (26) (83)

Total Segment Operating Profit $ 3,244 $ 3,379 $ (135)

Adjusted Segment Operating Profit (1)

$ 3,353 $ 3,405 $ (52)

Segment Operating Profit $ 3,244 $ 3,379 $ (135)

Corporate (715) (589) (126)

Earnings Before Income Taxes $ 2,529 $ 2,790 $ (261)

(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 6%.

Ag Services results were higher than the prior period.

In South American origination, effective risk management and higher export demand due to the record Brazilian soybean crop drove significantly higher year-over-year results.

Results for North America origination were slightly higher, driven by stronger soybean exports.

Execution in destination marketing as well as effective risk management continued to deliver strong Global Trade results, though lower than the prior period.

Crushing results were lower than the prior period.

Global soy crush margins remained strong, but lower year-over-year in all regions due to softer demand for both meal and oil, and a tight U.S.

soybean carryout.

This was partially offset by strong softseed margins and higher volumes, supported by a strong Canadian canola crop and utilization of flex capacity in EMEA.

Additionally, negative mark-to-market timing effects that are expected to reverse as contracts in future periods, affected the results in the current period.

Refined Products and Other results were significantly higher than the prior period.

North America results were higher, driven by strong food oil demand and improved biodiesel volumes.

In EMEA, strong export demand for biodiesel and domestic food oil demand supported stronger margins.

Additionally, positive mark-to-market timing effects that expected to reverse as contracts execute in future periods, contributed to the results in the current quarter.

Equity earnings from Wilmar were lower versus the prior period.

Carbohydrate Solutions operating profit decreased 27%.

Starches and Sweeteners, including ethanol production from the wet mills, capitalized on a solid demand environment during the period.

North America starches and sweeteners delivered volumes and margins similar to the prior period and ethanol margins were solid as industry stocks moderated, though lower relative to the prior period.

Results were negatively impacted due to unplanned downtime at one of the corn germ plants.

In EMEA, the business effectively managed margins to deliver improved results.

The global wheat milling business posted higher margins driven by solid customer demand.

Vantage Corn Processors results were lower due to lower year-over-year ethanol margins and absence of the prior period’s $50 million payment from the USDA Biofuel Producer Recovery Program.

Nutrition operating profit decreased 23%.

Human Nutrition results were in-line with the prior period, as the business continued to manage demand fulfillment challenges and destocking in certain categories.

Flavors results were higher than the prior period due to improved mix and pricing in EMEA as well as improving demand in North America.

Health and Wellness results were lower year-over-year due to lower demand for fibers.

Animal Nutrition results were significantly lower compared to the prior period due to lower contribution from amino acids, pockets of softer global feed demand affecting volumes, and continued demand fulfillment challenges and inventory losses in pet solutions.

Other Business operating profit increased $123 million.

Higher net interest income drove improved earnings in ADM Investor Services.

Captive insurance results improved on premiums from new programs partially offset by increased claim settlements.

Corporate results for the six months ended June 30, 2023 and 2022 are as follows:

Six Months Ended

2023 2022 Change

(In millions)

Interest expense-net $ (228) $ (163) (65)

Unallocated corporate costs (510) (476) (34)

Loss on sale of assets — (3) 3

Expenses related to acquisitions (3) (2) (1)

Gain on debt conversion option 6 4 2

Restructuring (charges) adjustment (3) 2 (5)

Other income 23 49 (26)

Total Corporate $ (715) $ (589) $ (126)

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

Corporate results were a net charge of $0.7 billion in the current period compared to a net charge of $0.6 billion in the prior period.

Interest expense-net increased $65 million due primarily to increased short-term rates on the Company’s commercial paper borrowing programs and increased interest expense from new debt issuances.

Unallocated corporate costs increased $34 million due primarily to higher financing, information technology, and centers of excellence costs, 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.

Other income in the current period included the non-service components of net pension benefit income of $9 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 $12 million, an investment revaluation gain of $36 million, and foreign exchange gains, partially offset by railroad maintenance expenses.

Non-GAAP Financial Measures

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 on borrowings, taxes, depreciation, and amortization, adjusted for specified items.

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

The table below provides a reconciliation of diluted EPS to adjusted EPS for the six months ended June 30, 2023 and 2022.

Six months ended June 30,

In millions Per share In millions Per share

Average number of shares outstanding - diluted 549 568

Net earnings and reported EPS (fully diluted) $ 2,097 $ 3.82 $ 2,290 $ 4.03

Gains (losses) on sales of assets and businesses - net of tax of $3 million in 2023 and $0 million in 2022 (1)

(9) (0.02) 2 —

Impairment and restructuring charges and contingency provisions - net of tax of $26 million in 2023 and $5 million in 2022 (1)

98 0.18 20 0.04

Expenses related to acquisitions - net of tax of $1 million in 2023 and 2022 (1)

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

(6) (0.01) (4) (0.01)

Certain discrete tax adjustments 3 0.01 (5) (0.01)

Total adjustments 88 0.16 14 0.02

Adjusted net earnings and adjusted EPS $ 2,185 $ 3.98 $ 2,304 $ 4.05

(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, 2023 and 2022.

Six months ended

(In millions) 2023 2022 Change

Earnings before income taxes $ 2,529 $ 2,790 $ (261)

Interest expense 224 165 59

Depreciation and amortization 521 514 7

(Gains) losses on sales of assets and businesses (12) 2 (14)

Expenses related to acquisitions 3 2 1

Railroad maintenance expenses 2 9 (7)

Impairment and restructuring charges and contingency provisions 124 25 99

Adjusted EBITDA $ 3,391 $ 3,507 $ (116)

Six months ended

(In millions) 2023 2022 Change

Ag Services and Oilseeds $ 2,443 $ 2,303 $ 140

Carbohydrate Solutions 733 946 (213)

Nutrition 463 558 (95)

Other Business 181 68 113

Corporate (429) (368) (61)

Adjusted EBITDA $ 3,391 $ 3,507 $ (116)

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