Archer-Daniels-Midland Co 10-Q/A

ITEM 1. FINANCIAL STATEMENTS Archer-Daniels-Midland Company Consolidated Statements of Earnings (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In millions, except per share amounts) Revenues $ 22,248 $ 25,190 $ 44,095 $ 49,262 Cost of products sold 20,852 23,307 41,040 45,299 Gross Profit 1,396 1,883 3,055 3,963 Selling, general, and administrative expenses 907 841 1,858 1,722 Asset impairment, exit, and restructuring costs 7 60 25 67 Equity in earnings of unconsolidated affiliates ( 152 ) ( 151 ) ( 364 ) ( 325 ) Interest and investment income ( 140 ) ( 142 ) ( 263 ) ( 276 ) Interest expense 187 180 353 327 Other (income) expense – net ( 9 ) ( 37 ) ( 35 ) ( 81 ) Earnings Before Income Taxes 596 1,132 1,481 2,529 Income tax expense 115 204 281 429 Net Earnings Including Noncontrolling Interests 481 928 1,200 2,100 Less: Net earnings (losses) attributable to noncontrolling interests ( 5 ) 1 ( 15 ) 3 Net Earnings Attributable to Controlling Interests $ 486 $ 927 $ 1,215 $ 2,097 Average number of shares outstanding – basic 492 545 503 548 Average number of shares outstanding – diluted 493 546 503 549 Basic earnings per common share $ 0.99 $ 1.70 $ 2.42 $ 3.83 Diluted earnings per common share $ 0.98 $ 1.70 $ 2.41 $ 3.82 Dividends per common share $ 0.50 $ 0.45 $ 1.00 $ 0.90 See notes to consolidated financial statements. 5 Archer-Daniels-Midland Company Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In millions) Net earnings including noncontrolling interests $ 481 $ 928 $ 1,200 $ 2,100 Other comprehensive income (loss): Foreign currency translation adjustment ( 261 ) 35 ( 257 ) 188 Tax effect ( 6 ) 14 ( 26 ) 28 Net of tax amount ( 267 ) 49 ( 283 ) 216 Pension and other postretirement benefit liabilities adjustment ( 3 ) ( 6 ) ( 7 ) ( 32 ) Tax effect 1 4 2 ( 9 ) Net of tax amount ( 2 ) ( 2 ) ( 5 ) ( 41 ) Deferred gain (loss) on hedging activities ( 48 ) ( 37 ) ( 117 ) ( 141 ) Tax effect 6 16 16 32 Net of tax amount ( 42 ) ( 21 ) ( 101 ) ( 109 ) Unrealized gain (loss) on investments — 4 ( 7 ) 8 Tax effect — ( 1 ) ( 1 ) ( 2 ) Net of tax amount — 3 ( 8 ) 6 Other comprehensive income (loss) ( 311 ) 29 ( 397 ) 72 Comprehensive income (loss) 170 957 803 2,172 Less: Comprehensive income (loss) attributable to noncontrolling interests ( 6 ) — ( 19 ) ( 1 ) Comprehensive income (loss) attributable to controlling interests $ 176 $ 957 $ 822 $ 2,173 See notes to consolidated financial statements. 6 Archer-Daniels-Midland Company Consolidated Balance Sheets (In millions) June 30, 2024 December 31, 2023 (Unaudited) Assets Current Assets Cash and cash equivalents $ 764 $ 1,368 Segregated cash and investments 6,975 7,228 Trade receivables - net 4,382 4,232 Inventories 10,443 11,957 Other current assets 4,398 4,982 Total Current Assets 26,962 29,767 Investments and Other Assets Investments in affiliates 5,557 5,500 Goodwill and other intangible assets 6,970 6,341 Right of use assets 1,293 1,211 Other assets 1,288 1,304 Total Investments and Other Assets 15,108 14,356 Property, Plant, and Equipment Land and land improvements 570 573 Buildings 6,002 5,876 Machinery and equipment 20,397 20,223 Construction in progress 1,458 1,360 28,427 28,032 Accumulated depreciation ( 17,799 ) ( 17,524 ) Net Property, Plant, and Equipment 10,628 10,508 Total Assets $ 52,698 $ 54,631 Liabilities, Temporary Equity, and Shareholders’ Equity Current Liabilities Short-term debt $ 2,312 $ 105 Trade payables 5,035 6,313 Payables to brokerage customers 7,468 7,867 Accrued expenses and other payables 3,569 4,076 Current lease liabilities 299 300 Current maturities of long-term debt 1 1 Total Current Liabilities 18,684 18,662 Long-Term Liabilities Long-term debt 8,247 8,259 Deferred income taxes 1,289 1,309 Non-current lease liabilities 1,017 931 Other 1,000 1,005 Total Long-Term Liabilities 11,553 11,504 Temporary Equity - Redeemable noncontrolling interest 302 320 Shareholders’ Equity Common stock 3,200 3,154 Reinvested earnings 21,828 23,465 Accumulated other comprehensive income (loss) ( 2,880 ) ( 2,487 ) Noncontrolling interests 11 13 Total Shareholders’ Equity 22,159 24,145 Total Liabilities, Temporary Equity, and Shareholders’ Equity $ 52,698 $ 54,631 See notes to consolidated financial statements. 7 Archer-Daniels-Midland Company Consolidated Statements of Cash Flows (Unaudited) (In millions) Six Months Ended June 30, 2024 2023 Operating Activities Net earnings including noncontrolling interests $ 1,200 $ 2,100 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities Depreciation and amortization 566 521 Asset impairment charges 10 46 Deferred income taxes ( 92 ) 8 Equity in earnings of affiliates, net of dividends ( 121 ) ( 80 ) Stock compensation expense 84 86 Deferred cash flow hedges ( 118 ) ( 141 ) (Gain) losses on sales/revaluation of assets 9 ( 32 ) Other – net 154 ( 18 ) Changes in operating assets and liabilities, net of acquisitions and dispositions Segregated investments ( 261 ) ( 1,392 ) Trade receivables ( 180 ) 846 Inventories 1,443 2,917 Other current assets 628 582 Trade payables ( 1,257 ) ( 2,762 ) Payables to brokerage customers ( 390 ) ( 1,213 ) Accrued expenses and other payables ( 507 ) ( 569 ) Total Operating Activities 1,168 899 Investing Activities Capital expenditures ( 690 ) ( 614 ) Net assets of businesses acquired ( 936 ) — Proceeds from sales of assets 16 17 Investments in affiliates ( 8 ) ( 6 ) Distributions from affiliates 2 — Cost method investments — ( 5 ) Other – net 4 ( 3 ) Total Investing Activities ( 1,612 ) ( 611 ) Financing Activities Long-term debt borrowings — 500 Long-term debt payments — ( 662 ) Net borrowings (payments) under lines of credit agreements 2,208 ( 371 ) Share repurchases ( 2,327 ) ( 1,001 ) Cash dividends ( 503 ) ( 494 ) Other – net ( 39 ) ( 103 ) Total Financing Activities ( 661 ) ( 2,131 ) Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents ( 14 ) ( 3 ) Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents ( 1,119 ) ( 1,846 ) Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period 5,390 7,033 Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period $ 4,271 $ 5,187 Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the consolidated balance sheets Cash and cash equivalents $ 764 $ 1,426 Restricted cash and restricted cash equivalents included in segregated cash and investments 3,507 3,761 Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 4,271 $ 5,187 See notes to consolidated financial statements. 8 Archer-Daniels-Midland-Company Consolidated Statements of Shareholders’ Equity (Unaudited) Common Stock Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests Total Shareholders’ Equity (In millions, except per share amounts) Shares Amount Balance, March 31, 2024 502 $ 2,720 $ 23,069 $ ( 2,570 ) $ 13 $ 23,232 Comprehensive income Net earnings 486 ( 5 ) Other comprehensive income (loss) ( 310 ) ( 1 ) Total comprehensive income 170 Cash dividends paid - $ 0.50 per share ( 247 ) ( 247 ) Share repurchases ( 24 ) 462 ( 1,480 ) ( 1,018 ) Stock compensation expense 18 18 Other — — — — 4 4 Balance, June 30, 2024 478 3,200 $ 21,828 $ ( 2,880 ) $ 11 $ 22,159 Balance, December 31, 2023 513 $ 3,154 $ 23,465 $ ( 2,487 ) $ 13 $ 24,145 Comprehensive income Net earnings 1,215 ( 15 ) Other comprehensive income (loss) ( 393 ) ( 4 ) Total comprehensive income 803 Cash dividends paid - $ 1.00 per share ( 503 ) ( 503 ) Share repurchases ( 37 ) ( 2,349 ) ( 2,349 ) Stock compensation expense 3 84 84 Stock option exercises net of taxes ( 1 ) ( 41 ) ( 41 ) Other — 3 — — 17 20 Balance, June 30, 2024 478 $ 3,200 $ 21,828 $ ( 2,880 ) $ 11 $ 22,159 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 Comprehensive income Net earnings 2,097 3 Other comprehensive income (loss) 76 ( 4 ) Total comprehensive income 2,172 Cash dividends paid - $ 0.90 per share ( 494 ) ( 494 ) Share repurchases ( 13 ) ( 1,005 ) ( 1,005 ) Stock compensation expense 3 86 86 Stock option exercises net of taxes ( 1 ) ( 107 ) ( 107 ) Other — 2 — — 4 6 Balance, June 30, 2023 536 $ 3,128 $ 24,244 $ ( 2,433 ) $ 36 $ 24,975 See notes to consolidated financial statements. 9 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Unaudited) Note 1. Basis of Presentation and Restatement of Previously Filed Consolidated Financial Statements The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K/A for the year ended December 31, 2023 for Archer-Daniels-Midland Company (the Company or ADM). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company consolidates all entities, including variable interest entities (VIEs), in which it has a controlling financial interest. For VIEs, the Company assesses whether it is the primary beneficiary as defined under the applicable accounting standard. Investments in affiliates, including VIEs through which the Company exercises significant influence but does not control the investee and is not the primary beneficiary of the investee’s activities, are carried at cost plus equity in undistributed earnings since acquisition and are adjusted, where appropriate, for basis differences between the investment balance and the underlying net assets of the investee and impairments determined to be other than temporary in nature. The Company’s portion of the results of certain affiliates and results of certain VIEs are included using the most recent available financial statements. In each case, the financial statements are within 93 days of the Company’s year end and are consistent from period to period. Restatement of Previously Filed Financial Statements Following ongoing dialogue with the staff of the United States Securities and Exchange Commission, the Company concluded that it would amend its fiscal year 2023 Form 10-K (the “FY2023 Form 10-K”) and Forms 10-Q for the first and second quarters of 2024 (collectively, the “Q1 and Q2 2024 Form 10-Qs”) to restate the segment information disclosure included in those filings. These restatements do not impact ADM’s Consolidated Statements of Earnings, Consolidated Statements of Comprehensive Income (Loss), Consolidated Balance Sheets, Consolidated Statements of Cash Flows or Consolidated Statements of Shareholders’ Equity as of and for the periods presented in the Amended Reports. As previously disclosed in Note 13. Segment Information, to ADM’s consolidated financial statements included in the Form 10-Q for the quarter ended June 30, 2024, ADM identified and corrected certain intersegment sales amounts that either (i) were not in accordance with prior disclosures about presenting such sales at amounts approximating market or (ii) included intrasegment sales (resulting from sales within the segment) and should have included exclusively intersegment sales (resulting from sales from one segment to another). In connection with the error corrections, ADM identified a material weakness in its internal control over financial reporting related to its accounting practices and procedures for intersegment sales. The Company put in place a plan to remediate this material weakness, as disclosed in the FY2023 Form 10-K and Q1 and Q2 2024 Form 10-Qs. In the course of testing new controls implemented as part of the Company’s material weakness remediation plan in the third quarter of 2024, ADM identified additional intrasegment sales previously misclassified and reported as intersegment sales. These newly identified errors concern intersegment sales for each of its Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition segments that included certain additional intrasegment sales and should have included exclusively intersegment sales. The Company also identified some intersegment sales between Ag Services and Oilseeds and Carbohydrate Solutions that were not accounted for consistently in accordance with revenue recognition and segment reporting standards and should not have been reported as intersegment sales. The Company also is correcting certain segment disclosure presentation errors. In this Amendment, the Company is revising its reconciliation and calculation of total segment operating profit. The revised reconciliation in Note 13. Segment Information presents a subtotal for total segment operating profit that is equal to the sum of the segment operating profit reported for each of the Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition segments. Amounts for other business and specified items, 10 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 1. Basis of Presentation and Restatement of Previously Filed Consolidated Financial Statements (Continued) which previously were reflected in the calculation of total segment operating profit, are now reflected as reconciling items, similar to Corporate, between total segment operating profit and earnings before income taxes. The Company has restated its consolidated financial statements for the quarters ended June 30, 2024 and 2023 in Note 13, Segment Information (Unaudited). Segregated Cash and Investments The Company segregates certain cash, cash equivalents, and investment balances in accordance with regulatory requirements, commodity exchange requirements, and insurance arrangements. These balances represent deposits received from customers of the Company’s registered futures commission merchant and commodity brokerage services, cash margins and securities pledged to commodity exchange clearinghouses, and cash pledged as security under certain insurance arrangements. Segregated cash and investments also include restricted cash collateral for the various insurance programs of the Company’s captive insurance business. To the degree these segregated balances are comprised of cash and cash equivalents, they are considered restricted cash and cash equivalents on the consolidated statements of cash flows. Receivables The Company records receivables at net realizable value in trade receivables, other current assets, and other assets. These amounts include allowances for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances including any accrued interest thereon. The Company estimates uncollectible accounts by pooling receivables according to type, region, credit risk rating, and age. Each pool is assigned an expected loss co-efficient to arrive at a general reserve based on historical write-offs adjusted, as needed, for regional, economic, and other forward-looking factors. The Company minimizes credit risk due to the large and diversified nature of its worldwide customer base. ADM manages its exposure to counter-party credit risk through credit analysis and approvals, credit limits, and monitoring procedures. Long-term receivables recorded in other assets were not material to the Company’s overall receivables portfolio. Changes to the allowance for estimated uncollectible accounts were as follows: Three Months Ended June 30 2024 2023 (In millions) Beginning, April 1 $ 216 $ 182 Current year provisions ( 12 ) 9 Write-offs against allowance ( 3 ) ( 16 ) Foreign exchange translation adjustment ( 1 ) — Other ( 6 ) ( 1 ) Ending, June 30 $ 194 $ 174 Six Months Ended June 30 2024 2023 (In millions) Beginning, January 1 $ 215 $ 199 Current year provisions ( 7 ) 13 Recoveries 8 1 Write-offs against allowance ( 16 ) ( 40 ) Foreign exchange translation adjustment — 1 Other ( 6 ) — Ending, June 30 $ 194 $ 174 11 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 1. Basis of Presentation and Restatement of Previously Filed Consolidated Financial Statements (Continued) Current year provisions in the three months ended June 30, 2024 include reversals of prior general provisions for economic factors related to the pandemic. Write-offs against allowance in the three months and six months ended June 30, 2024 were primarily related to trade receivables and long-term receivables, respectively. Write-offs against allowance in the three months ended June 30, 2023 were 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. Inventories Certain merchandisable agricultural commodity inventories, which include inventories acquired under deferred pricing contracts, are stated at market value. In addition, the Company values certain inventories using the first-in, first-out (FIFO) method at the lower of cost or net realizable value. The following table sets forth the Company’s inventories as of June 30, 2024 and December 31, 2023. June 30, 2024 December 31, 2023 (In millions) Raw materials and supplies $ 1,787 $ 1,944 Finished goods 2,909 3,026 Market inventories 5,747 6,987 Total inventories $ 10,443 $ 11,957 Included in raw materials and supplies are work in process inventories which were not material as of June 30, 2024 and December 31, 2023. Cost Method Investments Cost method investments of $ 440 million and $ 438 million as of June 30, 2024 and December 31, 2023, respectively, were included in Other Assets in the Company’s consolidated balance sheets. Revaluation losses of $ 18 million in the six months ended June 30, 2024 were related to an investment in alternative protein and precision fermentation, partially offset by an upward adjustment of $ 2 million in the six months ended June 30, 2024. There were no revaluation gains or losses in the three and six months ended June 30, 2023. Revaluation gains and losses are recorded in interest and investment income in the Company’s consolidated statements of earnings. As of June 30, 2024, the cumulative amounts of upward and downward adjustments were $ 115 million and $ 94 million, respectively. Investments in Affiliates The Company applies the equity method of accounting for investments over which the Company has the ability to exercise significant influence, including its 22.5 % investment in Wilmar International Limited (“Wilmar”). The Company’s investment in Wilmar had a carrying value of $ 4.1 billion as of June 30, 2024, and a market value of $ 3.2 billion based on the quoted Singapore Exchange market price converted to U.S. dollars at the applicable exchange rate at June 30, 2024. Wilmar does not have a recent history of operating losses, has positive working capital and positive cash flows and has a long history of paying dividends. A significant portion of the decline in market value of Wilmar based on the quoted Singapore Exchange market price occurred during the quarter ended June 30, 2024. The Company considers its investment in Wilmar a significant and strategic relationship and has the intent and ability to retain its investment in Wilmar for a period of time sufficient to allow for any anticipated recovery in market value. Based on the evaluation of the factors above and the Company’s evaluation of the near-term prospects of Wilmar in relation to the severity and duration of the decline in fair value, the Company does not consider the investment to be other-than-temporarily impaired at June 30, 2024. 12 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 2. New Accounting Standards Through December 31, 2024, the Company has the option to adopt the amended guidance of Accounting Standards Codification (ASC) 848, Reference Rate Reform , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. ADM has completed the transition of its financing, funding, and hedging portfolios from LIBOR to alternative reference rates. The transition did not have an impact on the Company’s consolidated financial statements. Effective December 31, 2024, the Company will be required to adopt the amended guidance of ASC 280, Segment Reporting , which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for more detailed information about a reportable segment’s expenses. The amended guidance improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and permits entities to disclose more than one measure of a reportable segment’s profitability used by the Chief Operating Decision Maker. The adoption of the amended guidance will result in expanded disclosures in the Company’s segment and geographic information footnote but will not have an impact on the consolidated financial statements. Effective December 31, 2025, the Company will be required to adopt the amended guidance of ASC 740, Income Taxes , which enhances the transparency and decision usefulness of income tax disclosures. The amendments address investor requests for more transparency about income tax information. The adoption of the amended guidance will result in expanded disclosures in the Company’s income taxes footnote but will not have an impact on the consolidated financial statements. Note 3. Revenues Revenue Recognition The Company principally generates revenue from merchandising and transporting agricultural commodities, and manufacturing products for use in food, beverages, feed, energy, and industrial applications, and ingredients and solutions for human and animal nutrition. Revenue is measured based on the consideration specified in the contract with a customer. The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The Company applies the practical expedient in paragraph 10-50-14 of ASC 606, Revenue from Contracts with Customers , (Topic 606) and does not disclose information about remaining performance obligations that have original expected durations of one year or less. 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 $ 252 million and $ 445 million for the three and six months ended June 30, 2024, respectively, and $ 200 million and $ 378 million for the three and six months ended June 30, 2023, 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). Shipping and Handling Costs Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are included in cost of products sold. Accordingly, amounts billed to customers for such costs are included as a component of revenues. Taxes Collected from Customers and Remitted to Governmental Authorities The Company does not include taxes assessed by governmental authorities that are (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers, in the measurement of transaction prices or as a component of revenues and cost of products sold. 13 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) Contract Liabilities Contract liabilities relate to advance payments from customers for goods and services the Company has yet to provide. Contract liabilities of $ 364 million and $ 626 million as of June 30, 2024 and December 31, 2023, respectively, were recorded in accrued expenses and other payables in the consolidated balance sheets. Revenues recognized in the three and six months ended June 30, 2024 from the December 31, 2023 contract liabilities were $ 120 million and $ 355 million, respectively. Disaggregation of Revenues The following tables present revenue disaggregated by timing of recognition and major product lines for the three and six months ended June 30, 2024 and 2023. Three Months Ended June 30, 2024 Topic 606 Revenue Topic 815 (1) Total (In millions) Point in Time Over Time Total Revenue Revenues Ag Services and Oilseeds Ag Services $ 925 $ 252 $ 1,177 $ 10,569 $ 11,746 Crushing 104 — 104 2,746 2,850 Refined Products and Other 523 — 523 2,214 2,737 Total Ag Services and Oilseeds 1,552 252 1,804 15,529 17,333 Carbohydrate Solutions Starches and Sweeteners 1,654 — 1,654 557 2,211 Vantage Corn Processors 683 — 683 — 683 Total Carbohydrate Solutions 2,337 — 2,337 557 2,894 Nutrition Human Nutrition 1,061 — 1,061 — 1,061 Animal Nutrition 847 — 847 — 847 Total Nutrition 1,908 — 1,908 — 1,908 Total Segment Revenues 5,797 252 6,049 16,086 22,135 Other Business 113 — 113 — 113 Total Revenues $ 5,910 $ 252 $ 6,162 $ 16,086 $ 22,248 14 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) Six Months Ended June 30, 2024 Topic 606 Revenue Topic 815 (1) Total Point in Time Over Time Total Revenue Revenues (In millions) Ag Services and Oilseeds Ag Services $ 1,947 $ 445 $ 2,392 $ 20,551 $ 22,943 Crushing 220 — 220 5,957 6,177 Refined Products and Other 1,070 — 1,070 4,362 5,432 Total Ag Services and Oilseeds 3,237 445 3,682 30,870 34,552 Carbohydrate Solutions Starches and Sweeteners 3,247 — 3,247 1,120 4,367 Vantage Corn Processors 1,210 — 1,210 — 1,210 Total Carbohydrate Solutions 4,457 — 4,457 1,120 5,577 Nutrition Human Nutrition 2,025 — 2,025 — 2,025 Animal Nutrition 1,719 — 1,719 — 1,719 Total Nutrition 3,744 — 3,744 — 3,744 Total Segment Revenues 11,438 445 11,883 31,990 43,873 Other Business 222 — 222 — 222 Total Revenues $ 11,660 $ 445 $ 12,105 $ 31,990 $ 44,095 Three Months Ended June 30, 2023 Topic 606 Revenue Topic 815 (1) Total (In millions) Point in Time Over Time Total Revenue Revenues Ag Services and Oilseeds Ag Services $ 1,071 $ 200 $ 1,271 $ 12,095 $ 13,366 Crushing 32 — 32 3,448 3,480 Refined Products and Other 577 — 577 2,421 2,998 Total Ag Services and Oilseeds 1,680 200 1,880 17,964 19,844 Carbohydrate Solutions Starches and Sweeteners 1,872 — 1,872 603 2,475 Vantage Corn Processors 906 — 906 — 906 Total Carbohydrate Solutions 2,778 — 2,778 603 3,381 Nutrition Human Nutrition 966 — 966 — 966 Animal Nutrition 887 — 887 — 887 Total Nutrition 1,853 — 1,853 — 1,853 Total Segment Revenues 6,311 200 6,511 18,567 25,078 Other Business 112 — 112 — 112 Total Revenues $ 6,423 $ 200 $ 6,623 $ 18,567 $ 25,190 15 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) Six Months Ended June 30, 2023 Topic 606 Revenue Topic 815 (1) Total 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 Nutrition Human Nutrition 1,902 — 1,902 — 1,902 Animal Nutrition 1,804 — 1,804 — 1,804 Total Nutrition 3,706 — 3,706 — 3,706 Total Segment Revenues 12,882 378 13,260 35,787 49,047 Other Business 215 — 215 — 215 Total Revenues $ 13,097 $ 378 $ 13,475 $ 35,787 $ 49,262 (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. Ag Services and Oilseeds The Ag Services and Oilseeds segment generates revenue from the sale of commodities, from service fees for the transportation of goods, from the sale of products manufactured in its global processing facilities, and from its structured trade finance activities. Revenue is measured based on the consideration specified in the contract. Revenue is recognized when a performance obligation is satisfied by transferring control over a product or providing service to a customer. 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 amount of revenue recognized follows the contractually specified price, which may include freight or other contractually specified cost components. 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 Topic 610-20. Carbohydrate Solutions The Carbohydrate Solutions segment generates revenue from the sale of products manufactured at the Company’s global corn and wheat milling facilities around the world. Revenue is recognized when control over products is transferred to the customer. Products are shipped to customers from the Company’s various facilities and from its network of storage terminals. The amount of revenue recognized is based on the consideration specified in the contract, which could include freight and other costs depending on the specific shipping terms of each contract. 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 Topic 610-20. Nutrition The Nutrition segment sells ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, edible beans, 16 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) formula feeds, animal health and nutrition products, pet food and treats, and other specialty food and feed ingredients. Revenue is recognized when control over products is transferred to the customer. The amount of revenue recognized follows the contracted price or the mutually agreed price of the product. Freight and shipping are recognized as a component of revenue at the same time control transfers to the customer. Other Business Other Business includes the Company’s futures commission business whose primary sources of revenue are commissions and brokerage income generated from executing orders and clearing futures contracts and options on futures contracts on behalf of its customers. Commissions and brokerage revenue are recognized on the date the transaction is executed. Other Business also includes the Company’s captive insurance business, which generates third party revenue through its proportionate share of premiums from third-party reinsurance pools. Reinsurance premiums are recognized on a straight-line basis over the period underlying the policy. Note 4. Acquisitions During the six months ended June 30, 2024, the Company acquired Revela Foods (“Revela”), a Wisconsin-based developer and manufacturer of innovative dairy flavor ingredients and solutions, FDL, a UK-based leading developer and producer of premium flavor and functional ingredient systems, PT Trouw Nutrition Indonesia (“PT”), a subsidiary of Nutreco and leading provider of functional and nutritional solutions for livestock farming in Indonesia, and Totally Natural Solutions (“TNS”), a UK-based hops flavoring producer, for an aggregate cash consideration of $ 948 million. The aggregate cash consideration of these acquisitions, net of $ 12 million in cash acquired, was allocated as follows, subject to final measurement period adjustments: (In millions) Revela FDL PT TNS Total Working capital $ 50 $ 16 $ 5 $ 2 $ 73 Property, plant, and equipment 38 34 5 2 79 Goodwill 410 128 5 8 551 Other intangible assets 166 97 — 11 274 Other long-term assets 28 1 — — 29 Long-term liabilities ( 43 ) ( 26 ) — ( 1 ) ( 70 ) Aggregate cash consideration $ 649 $ 250 $ 15 $ 22 $ 936 Goodwill recorded in connection with the acquisitions is primarily attributable to the synergies expected to arise after the Company’s acquisition of the businesses. Of the $ 551 million allocated to goodwill, $ 313 million is expected to be deductible for tax purposes. These acquisitions add capabilities to the Human and Animal Nutrition businesses. The Company’s consolidated statement of earnings for the three and six months ended June 30, 2024 includes the post-acquisition results of the acquired businesses which were immaterial. The following table sets forth the fair values and the useful lives of the other intangible assets acquired. Useful Lives Revela FDL TNS Total (In years) (In millions) Intangible assets with finite lives: Trademarks/brands 3 $ — $ 4 $ 1 $ 5 Customer lists 10 to 18 124 73 8 205 Recipes and others 10 to 21 42 20 2 64 Total other intangible assets acquired $ 166 $ 97 $ 11 $ 274 17 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. 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 June 30, 2024 and December 31, 2023. Fair Value Measurements at June 30, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (In millions) Assets: Inventories carried at market $ — $ 3,201 $ 2,546 $ 5,747 Unrealized derivative gains: Commodity contracts — 735 395 1,130 Foreign currency contracts — 188 — 188 Interest rate contracts — 5 — 5 Cash equivalents 260 — — 260 Segregated investments 1,748 — — 1,748 Total Assets $ 2,008 $ 4,129 $ 2,941 $ 9,078 Liabilities: Unrealized derivative losses: Commodity contracts $ — $ 545 $ 367 $ 912 Foreign currency contracts — 158 — 158 Inventory-related payables — 1,149 34 1,183 Total Liabilities $ — $ 1,852 $ 401 $ 2,253 18 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. Fair Value Measurements (Continued) Fair Value Measurements at December 31, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (In millions) Assets: Inventories carried at market $ — $ 4,274 $ 2,713 $ 6,987 Unrealized derivative gains: Commodity contracts — 628 731 1,359 Foreign currency contracts — 187 — 187 Cash equivalents 209 — — 209 Segregated investments 1,362 — — 1,362 Total Assets $ 1,571 $ 5,089 $ 3,444 $ 10,104 Liabilities: Unrealized derivative losses: Commodity contracts $ — $ 500 $ 457 $ 957 Foreign currency contracts — 144 — 144 Inventory-related payables — 1,219 101 1,320 Total Liabilities $ — $ 1,863 $ 558 $ 2,421 Estimated fair values for inventories and inventory-related payables carried at market are based on exchange-quoted prices, adjusted for differences in local markets and quality, referred to as basis. Market valuations for the Company’s inventories are adjusted for location and quality (basis) because the exchange-quoted prices represent contracts with standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using the inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. 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 and inventory-related payables are recognized in the consolidated statements of earnings as a component of cost of products sold. 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. 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. Market valuations for the Company’s forward commodity purchase and sale contracts are adjusted for location (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When observable inputs are available for substantially the full term of the contract, it is classified in Level 2. When unobservable inputs have a significant impact (more than 10%) on 19 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. Fair Value Measurements (Continued) the measurement of fair value, the contract is classified in Level 3. Except for certain derivatives designated as cash flow hedges, changes in the fair value of commodity-related derivatives are recognized in the consolidated statements of earnings as a component of cost of products sold. Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net, depending 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 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. The Company’s segregated investments are comprised of U.S. Treasury securities. U.S. Treasury securities are valued using quoted market prices and are classified in Level 1. 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, 2024. Level 3 Fair Value Asset Measurements at June 30, 2024 Inventories Carried at Market Commodity Derivative Contracts Gains Total Assets (In millions) Balance, March 31, 2024 $ 2,948 $ 764 $ 3,712 Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 187 197 384 Purchases 3,637 3,637 Sales ( 4,194 ) — ( 4,194 ) Settlements — ( 438 ) ( 438 ) Transfers into Level 3 557 29 586 Transfers out of Level 3 ( 589 ) ( 157 ) ( 746 ) Ending balance, June 30, 2024 $ 2,546 $ 395 $ 2,941 * Includes increase in unrealized gains of $ 325 million relating to Level 3 assets still held at June 30, 2024. 20 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. 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, 2024. Level 3 Fair Value Liability Measurements at June 30, 2024 Inventory- related Payables Commodity Derivative Contracts Losses Total Liabilities (In millions) Balance, March 31, 2024 $ 62 $ 435 $ 497 Total increase (decrease) in net realized/unrealized losses included in cost of products sold* ( 4 ) 203 199 Purchases 2 — 2 Sales ( 26 ) — ( 26 ) Settlements — ( 282 ) ( 282 ) Transfers into Level 3 — 15 15 Transfers out of Level 3 — ( 4 ) ( 4 ) Ending balance, June 30, 2024 $ 34 $ 367 $ 401 * Includes increase in unrealized losses of $ 208 million relating to Level 3 liabilities still held at June 30, 2024. 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 June 30, 2023 Inventories Carried at Market Commodity Derivative Contracts Gains Total Assets (In millions) Balance, March 31, 2023 $ 3,503 $ 649 $ 4,152 Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 362 475 837 Purchases 9,910 — 9,910 Sales ( 10,646 ) — ( 10,646 ) Settlements ( 4 ) ( 457 ) ( 461 ) Transfers into Level 3 547 240 787 Transfers out of Level 3 ( 813 ) ( 21 ) ( 834 ) 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. 21 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. 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, 2023. Level 3 Fair Value Liability Measurements at June 30, 2023 Inventory- related Payables Commodity Derivative Contracts Losses Debt Conversion Option Total Liabilities (In millions) 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* 4 535 ( 1 ) 538 Purchases 5 — — 5 Settlements ( 3 ) ( 283 ) — ( 286 ) Transfers into Level 3 2 86 — 88 Transfers out of Level 3 — ( 2 ) — ( 2 ) 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 six months ended June 30, 2024. Level 3 Fair Value Asset Measurements at June 30, 2024 Inventories Carried at Market Commodity Derivative Contracts Gains Total Assets (In millions) Balance, December 31, 2023 $ 2,713 $ 731 $ 3,444 Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 90 572 662 Purchases 7,426 — 7,426 Sales ( 8,077 ) — ( 8,077 ) Settlements — ( 790 ) ( 790 ) Transfers into Level 3 1,073 57 1,130 Transfers out of Level 3 ( 679 ) ( 175 ) ( 854 ) Ending balance, June 30, 2024 $ 2,546 $ 395 $ 2,941 * Includes increase in unrealized gains of $ 889 million relating to Level 3 assets still held at June 30, 2024. 22 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. Fair Value Measurements (Continued) The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2024. Level 3 Fair Value Liability Measurements at June 30, 2024 Inventory- related Payables Commodity Derivative Contracts Losses Total Liabilities (In millions) Balance, December 31, 2023 $ 101 $ 457 $ 558 Total increase (decrease) in net realized/unrealized losses included in cost of products sold* ( 7 ) 532 525 Purchases 3 — 3 Sales ( 64 ) — ( 64 ) Settlements — ( 572 ) ( 572 ) Transfers into Level 3 1 28 29 Transfers out of Level 3 — ( 78 ) ( 78 ) Ending balance, June 30, 2024 $ 34 $ 367 $ 401 * Includes increase in unrealized losses of $ 546 million relating to Level 3 liabilities still held at June 30, 2024. 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 Inventories Carried at Market Commodity Derivative Contracts Gains Total Assets (In millions) Balance, December 31, 2022 $ 2,760 $ 541 $ 3,301 Total increase (decrease) in net realized/unrealized gains included in cost of products sold* 364 952 1,316 Purchases 18,575 — 18,575 Sales ( 18,900 ) — ( 18,900 ) Settlements ( 4 ) ( 839 ) ( 843 ) Transfers into Level 3 1,152 290 1,442 Transfers out of Level 3 ( 1,088 ) ( 58 ) ( 1,146 ) 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. 23 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. Fair Value Measurements (Continued) The following table presents a rollforward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2023. Level 3 Fair Value Liability Measurements at June 30, 2023 Inventory- related Payables Commodity Derivative Contracts Losses Debt Conversion Option Total Liabilities (In millions) Balance, December 31, 2022 $ 89 $ 603 $ 6 $ 698 Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense* 2 778 ( 6 ) 774 Purchases 7 — — 7 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. 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. Transfers out of Level 3 were primarily due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts falling below the 10% threshold and thus permitting reclassification to Level 2. In some cases, the price components that result in differences between exchange-traded prices and local prices for inventories and commodity purchase and sale contracts are observable based upon available quotations for these pricing components, and in some cases, the differences are unobservable. These price components primarily include transportation costs and other adjustments required due to location, quality, or other contract terms. In the table below, these other adjustments are referred to as basis. The changes in unobservable price components are determined by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these unobservable price components. 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, 2024 and December 31, 2023. 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 June 30, 2024 is a weighted average 39.1 % of the total price for assets and 42.7 % of the total price for liabilities. Weighted Average % of Total Price June 30, 2024 December 31, 2023 Component Type Assets Liabilities Assets Liabilities Inventories and Related Payables Basis 39.1 % 42.7 % 25.0 % 33.2 % Transportation cost 17.4 % — % 11.5 % — % Commodity Derivative Contracts Basis 32.7 % 25.3 % 24.2 % 24.9 % Transportation cost 24.8 % 19.8 % 9.3 % 3.2 % 24 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 5. 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. These price quotes are generally not further adjusted by the Company in determining the applicable market price. In some cases, availability of third-party quotes is limited to only one or two independent sources. In these situations, absent other corroborating evidence, the Company considers these price quotes as 100% unobservable and, therefore, the fair value of these items is reported in Level 3. Note 6. Derivative Instruments and Hedging Activities Derivatives Not Designated as Hedging Instruments The majority of the Company’s derivative instruments have not been designated as hedging instruments. The Company uses exchange-traded futures and exchange-traded and OTC options contracts to manage its net position of merchandisable agricultural product inventories and forward cash purchase and sales contracts to reduce price risk caused by market fluctuations in agricultural commodities and foreign currencies. The Company also uses exchange-traded futures and exchange-traded and OTC options contracts as components of merchandising strategies designed to enhance margins. The results of these strategies can be significantly impacted by factors such as the correlation between the value of exchange-traded commodities futures contracts and the value of the underlying commodities, counterparty contract defaults, and volatility of freight markets. Derivatives, including exchange-traded contracts and forward commodity purchase or sale contracts, and inventories of certain merchandisable agricultural products, which include amounts acquired under deferred pricing contracts, are stated at fair value. 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 June 30, 2024 and December 31, 2023. June 30, 2024 December 31, 2023 Assets Liabilities Assets Liabilities (In millions) Foreign Currency Contracts $ 133 $ 158 $ 187 $ 122 Interest Rate Contracts — — — — Commodity Contracts 1,121 912 1,343 957 Total $ 1,254 $ 1,070 $ 1,530 $ 1,079 25 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 6. Derivative Instruments and Hedging Activities (Continued) 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, 2024 and 2023. Other (income) expense - net Cost of Interest (In millions) Revenues products sold expense Three Months Ended June 30, 2024 Consolidated Statement of Earnings $ 22,248 $ 20,852 $ ( 9 ) $ 187 Pre-tax gains (losses) on: Foreign Currency Contracts $ 18 $ ( 155 ) $ 8 $ — Commodity Contracts — ( 22 ) — — Total gain (loss) recognized in earnings $ 18 $ ( 177 ) $ 8 $ — $ ( 151 ) Three Months Ended June 30, 2023 Consolidated Statement of Earnings $ 25,190 $ 23,307 $ ( 37 ) $ 180 Pre-tax gains (losses) on: Foreign Currency Contracts $ ( 15 ) $ 153 $ 43 $ — Commodity Contracts — 35 — — Debt Conversion Option — — — 1 Total gain (loss) recognized in earnings $ ( 15 ) $ 188 $ 43 $ 1 $ 217 Other (income) expense - net Cost of Interest (In millions) Revenues products sold expense Six Months Ended June 30, 2024 Consolidated Statement of Earnings $ 44,095 $ 41,040 $ ( 35 ) $ 353 Pre-tax gains (losses) on: Foreign Currency Contracts $ 19 $ ( 218 ) $ 62 $ — Commodity Contracts — 175 — — Total gain (loss) recognized in earnings $ 19 $ ( 43 ) $ 62 $ — $ 38 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 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. 26 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 6. Derivative Instruments and Hedging Activities (Continued) Changes in the fair value of foreign currency-related derivatives are recognized in the consolidated statements of earnings as a component of revenues, cost of products sold, and other (income) expense - net depending on the purpose of the contract. Derivatives Designated as Cash Flow, Fair Value, and Net Investment Hedging Strategies The Company had certain derivatives designated as cash flow and net investment hedges as of June 30, 2024 and December 31, 2023. In addition, the Company had certain derivatives designated as fair value hedges as of June 30, 2024. 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. Hedge components excluded from the assessment of effectiveness and gains and losses related to discontinued hedges are recognized in the consolidated statement of earnings during the current period. Commodity Contracts For each of the hedge programs described below, the derivatives are designated as cash flow hedges. The changes in the market value of such derivative contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item. Once the hedged item is recognized in earnings, the gains and losses arising from the hedge are reclassified from AOCI to either revenues or cost of products sold, as applicable. 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. The objective of this hedging program is to reduce the variability of cash flows associated with the Company’s forecasted purchases of corn. The Company’s corn processing plants normally grind approximately 59 million bushels of corn per month. During the past 12 months, the Company hedged between 12 % and 34 % of its monthly grind. At June 30, 2024, the Company had designated hedges representing between 1 % and 31 % of its anticipated monthly grind of corn for the next 12 months. 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. soybean crush facilities, subject to certain program limits. The Company also uses futures or options contracts to hedge the sales prices of anticipated soybean meal and soybean oil sales proportionate to the soybean crushing process at these facilities, subject to certain program limits. During the past 12 months, the Company hedged between 77 % and 100 % of the anticipated monthly soybean crush for soybean purchases and soybean meal and oil sales at the designated facilities. At June 30, 2024, 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 39 % and 76 % of the anticipated monthly natural gas consumption at the designated facilities. At June 30, 2024, the Company had designated hedges representing between 33 % and 58 % of the anticipated monthly natural gas consumption over the next 12 months. As of June 30, 2024 and December 31, 2023, the Company had after-tax gains of $ 26 million and after-tax gains of $ 42 million in AOCI, respectively, related to gains and losses from these programs. The Company expects to recognize $ 26 million of the June 30, 2024 after-tax gains in its consolidated statement of earnings during the next 12 months. Fair Value Hedges The Company uses interest rate swaps designated as fair value hedges to protect the fair value of fixed-rate debt due to changes in interest rates. The changes in the fair value of the interest rate swaps and the underlying fixed-rate debt is recognized in the consolidated statement of earnings during the current period. The terms of the interest rate swaps match the terms of the underlying debt. The Company executed fixed to floating rate interest swaps with an aggregate notional amount of $ 500 million as of as of June 30, 2024. As of June 30, 2024, the Company had after-tax gains of $ 5 million in other current assets and a corresponding decrease to the underlying debt for the same amount with no net impact to earnings. 27 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 6. Derivative Instruments and Hedging Activities (Continued) 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 June 30, 2024 and December 31, 2023, and foreign exchange forwards with an aggregate notional amount of $ 2.0 billion and $ 2.1 billion as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, the Company had after-tax gains of $ 60 million and after-tax losses of $ 5 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. The following table sets forth the fair value of derivatives designated as hedging instruments as of June 30, 2024 and December 31, 2023. June 30, 2024 December 31, 2023 Assets Liabilities Assets Liabilities (In millions) Commodity Contracts $ 9 $ — $ 16 $ — Foreign Currency Contracts 55 — — 22 Interest Rate Contracts 5 — — — Total $ 69 $ — $ 16 $ 22 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 and six months ended June 30, 2024 and 2023. Cost of products sold (In millions) Three Months Ended June 30, 2024 Consolidated Statement of Earnings $ 20,852 Effective amounts recognized in earnings Pre-tax gains (losses) on: Commodity Contracts $ ( 23 ) Total gain (loss) recognized in earnings $ ( 23 ) $ ( 23 ) Three Months Ended June 30, 2023 Consolidated Statement of Earnings $ 23,307 Effective amounts recognized in earnings Pre-tax gains (losses) on: Commodity Contracts $ ( 41 ) Total gain (loss) recognized in earnings $ ( 41 ) $ ( 41 ) 28 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 6. Derivative Instruments and Hedging Activities (Continued) Cost of products sold (In millions) Six Months Ended June 30, 2024 Consolidated Statement of Earnings $ 41,040 Effective amounts recognized in earnings Pre-tax gains (losses) on: Commodity Contracts $ ( 4 ) Total gain (loss) recognized in earnings $ ( 4 ) $ ( 4 ) 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 ) Other Net Investment Hedging Strategies The Company has designated € 0.7 billion of its outstanding long-term debt and commercial paper borrowings at June 30, 2024 and December 31, 2023 as hedges of its net investment in a foreign subsidiary. As of June 30, 2024 and December 31, 2023, the Company had after-tax gains of $ 227 million and $ 212 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. Note 7. Other Current Assets The following table sets forth the items in other current assets: June 30, December 31, 2024 2023 (In millions) Unrealized gains on derivative contracts $ 1,323 $ 1,546 Margin deposits and grain accounts 601 560 Customer omnibus receivable 812 1,052 Financing receivables - net (1) 145 237 Insurance premiums receivable 79 61 Prepaid expenses 373 445 Biodiesel tax credit 150 119 Tax receivables 535 491 Non-trade receivables 280 304 Other current assets 100 167 $ 4,398 $ 4,982 (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 $ 6 million at each of June 30, 2024 and December 31, 2023. Interest earned on financing receivables of $ 5 million and $ 10 million for the three and six months ended June 30, 2024, 29 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 7. Other Current Assets (Continued) respectively, and $ 4 million and $ 10 million for the three and six months ended June 30, 2023, respectively, is included in interest and investment income in the consolidated statements of earnings. Note 8. Accrued Expenses and Other Payables The following table sets forth the items in accrued expenses and other payables: June 30, December 31, 2024 2023 (In millions) Unrealized losses on derivative contracts $ 1,070 $ 1,101 Accrued compensation 290 439 Income tax payable 202 284 Other taxes payable 206 172 Insurance claims payable 86 73 Contract liability 364 626 Other accruals and payables 1,351 1,381 $ 3,569 $ 4,076 Note 9. Debt and Financing Arrangements At June 30, 2024, the fair value of the Company’s long-term debt was below the carrying value by $ 0.5 billion, as estimated using quoted market prices (a Level 2 measurement under applicable accounting standards). At June 30, 2024, the Company had lines of credit, including the accounts receivable securitization programs described below, totaling $ 12.3 billion, of which $ 7.8 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 $ 1.0 billion of commercial paper outstanding at June 30, 2024. The Company has accounts receivable securitization programs (the “Programs”). The Programs provide the Company with up to $ 2.8 billion in funding resulting from the sale of accounts receivable with $ 0.7 billion unused capacity as of June 30, 2024. Note 10. Income Taxes The Company’s effective tax rate was 19.3 % and 19.0 % for the three and six months ended June 30, 2024, respectively, compared to 18.0 % and 17.0 % for the three and six months ended June 30, 2023, respectively. The increase in the rate was primarily due to the impact of discrete tax items, partially offset by the change in the geographic mix of forecasted pretax earnings. The Organization for Economic Cooperation and Development’s Pillar Two initiative introduced a 15% global minimum tax applied on a country-by-country basis that has been enacted in certain jurisdictions in which the Company operates, with effective dates starting in fiscal year 2024. The Company is in scope of the enacted legislation and has performed an assessment of the potential exposure based on its most recent tax filings, country-by-country reporting, and the financial results of the constituent entities. Based on the assessment, the effective tax rates in most of the jurisdictions in which the Company operates are above the 15% global minimum tax threshold. However, there are a limited number of jurisdictions where the effective tax rate is close to 15%. ADM does not expect a material liability to global minimum tax in those jurisdictions. The Company is subject to income taxation and routine examinations in many jurisdictions around the world and frequently faces challenges regarding the amount of taxes due. These challenges include positions taken by the Company related to the timing, nature, and amount of deductions and the allocation of income among various tax jurisdictions. In its routine evaluations of the exposure associated with various tax filing positions, the Company recognizes a liability, when necessary, for 30 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 10. Income Taxes (Continued) estimated potential tax owed by the Company in accordance with applicable accounting standards. Resolution of the related tax positions, through negotiations with relevant tax authorities or through litigation, may take years to complete. Therefore, it is difficult to predict the timing for resolution of tax positions and the Company cannot predict or provide assurance as to the ultimate outcome of these ongoing or future examinations. However, the Company does not anticipate 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. 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 June 30, 2024, this assessment was $ 87 million in tax and $ 35 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. During the second quarter of 2021, the third party expert issued a final valuation. On September 30, 2022, the court issued a ruling consistent with the valuation report, and both the Dutch tax authorities and ADM filed an appeal. On July 11, 2024, the Court of Appeals issued a decision which resulted in the Company increasing its uncertain tax position for this matter equal to the Court’s decision. The Company is evaluating the legal options. As of June 30, 2024, the Company has accrued its best estimate of what it believes will be the likely outcome of the litigation. Note 11. Shareholders’ Equity Accelerated Share Repurchase On March 12, 2024, the Company entered into an accelerated share repurchase (“ASR”) transaction agreement (“ASR Agreement”) with Merrill Lynch International, an affiliate of BofA Securities, Inc., to repurchase $ 1.0 billion (the “Prepayment Amount”) of ADM common stock (“Common Stock”). The ASR transaction is part of ADM’s existing share repurchase program to repurchase up to 200 million shares through December 31, 2024 . Under the terms of the ASR Agreement, on March 13, 2024, the Company paid the Prepayment Amount and received no upfront shares of Common Stock. The total number of shares of Common Stock repurchased under the ASR Agreement were determined based on volume weighted-average prices of the Common Stock during the term of the ASR transaction less a discount and subject to certain adjustments pursuant to the terms of the ASR Agreement. On March 28, 2024, the Company received an interim delivery of 8,880,986 shares at an average share price of $ 60.596 or $ 538 million. The Prepayment Amount initially recorded in additional paid in capital was partially reclassified to reinvested earnings for the $ 538 million amount repurchased. On April 15, 2024, the Company received a final delivery of 7,325,733 shares at an average share price of $ 63.045 , or $ 462 million in aggregate, as final settlement of the ASR transaction and such amount was reclassified during the quarter ended June 30, 2024, to reinvested earnings. As of June 30, 2024, the Company had 14.8 million remaining shares under its share repurchase program. 31 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 11. Shareholders’ Equity (Continued) Accumulated Other Comprehensive Income The following tables set forth the changes in AOCI by component for the three and six months ended June 30, 2024 and the reclassifications out of AOCI for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, 2024 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, 2024 $ ( 2,552 ) $ 99 $ ( 111 ) $ ( 6 ) $ ( 2,570 ) Other comprehensive income (loss) before reclassifications ( 285 ) ( 71 ) 1 — ( 355 ) Gain (loss) on net investment hedges 25 — — — 25 Amounts reclassified from AOCI — 23 ( 4 ) — 19 Tax effect ( 6 ) 6 1 — 1 Net of tax amount ( 266 ) ( 42 ) ( 2 ) — ( 310 ) Balance at June 30, 2024 $ ( 2,818 ) $ 57 $ ( 113 ) $ ( 6 ) $ ( 2,880 ) Six Months Ended June 30, 2024 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, 2023 $ ( 2,539 ) $ 158 $ ( 108 ) $ 2 $ ( 2,487 ) Other comprehensive income (loss) before reclassifications ( 362 ) ( 121 ) ( 1 ) ( 7 ) ( 491 ) Gain (loss) on net investment hedges 109 — — — 109 Amounts reclassified from AOCI — 4 ( 6 ) — ( 2 ) Tax effect ( 26 ) 16 2 ( 1 ) ( 9 ) Net of tax amount ( 279 ) ( 101 ) ( 5 ) ( 8 ) ( 393 ) Balance at June 30, 2024 $ ( 2,818 ) $ 57 $ ( 113 ) $ ( 6 ) $ ( 2,880 ) 32 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 11. Shareholders’ Equity (Continued) Amount reclassified from AOCI Three Months Ended June 30, Six Months Ended June 30, Affected line item in the consolidated statements of earnings Details about AOCI components 2024 2023 2024 2023 (In millions) Deferred loss (gain) on hedging activities $ 23 $ 41 $ 4 $ 145 Cost of products sold 23 41 4 145 Total before tax ( 4 ) ( 8 ) — ( 26 ) Tax $ 19 $ 33 $ 4 $ 119 Net of tax Pension liability adjustment Amortization of defined benefit pension items: Prior service loss (credit) $ ( 5 ) $ ( 6 ) $ ( 10 ) $ ( 17 ) Other (income) expense-net Actuarial losses 1 2 4 ( 18 ) Other (income) expense-net ( 4 ) ( 4 ) ( 6 ) ( 35 ) Total before tax 1 3 2 ( 9 ) Tax $ ( 3 ) $ ( 1 ) $ ( 4 ) $ ( 44 ) Net of tax 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. Note 12. Other (Income) Expense – Net The following table sets forth the items in other (income) expense: Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (In millions) Gains on sale of assets $ ( 5 ) $ ( 21 ) $ ( 7 ) $ ( 32 ) Other – net ( 4 ) ( 16 ) ( 28 ) ( 49 ) Other (Income) Expense – Net $ ( 9 ) $ ( 37 ) $ ( 35 ) $ ( 81 ) Gains on sale of assets in the three and six months ended June 30, 2024 and 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 and six months ended June 30, 2024 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, 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. Note 13. Segment Information - Restated The Company’s operations are organized, managed, and classified into three reportable business segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard , and are classified as Other Business. Intersegment sales have been recorded using principles consistent with ASC 606, Revenue from Contracts with Customers . 33 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 13. Segment Information - Restated (Continued) Operating profit for each segment is based on net sales less identifiable operating expenses. Also included in operating profit for each segment is equity in earnings of affiliates based on the equity method of accounting. Specified items and certain corporate items are not allocated to the Company’s individual business segments because operating performance of each business segment is evaluated by management exclusive of these items. Corporate results principally include unallocated corporate expenses, interest cost net of interest income, and revaluation gains and losses on cost method investments and the share of the results of equity investments in early-stage start-up companies. Restatement of Certain Segment-Specific Historical Financial Information As described in Note 1 to the Consolidated Financial Statements, the Company has restated its Consolidated Financial Statements as of June 30, 2024 and 2023 and for the three and six months ended June 30, 2024 and 2023. As a result, the previously reported financial information as of June 30, 2024 and 2023 and for the three and six months ended June 30, 2024 and 2023 in this Note 13. Segment Information, has been updated to reflect the restatements. The following tables set forth the impact of the restatements on intersegment sales and segment operating profit for each of the Company’s three reportable segments for the three and six months ended June 30, 2024 and 2023. Intersegment pricing adjustments include restatements related to intersegment sales that were not in accordance with prior disclosures about presenting such sales at amounts approximating market. Intersegment classification adjustments include restatements related to intrasegment sales (resulting from sales within the segment) previously misclassified and reported as intersegment sales (resulting from sales from one segment to another). Intersegment pricing adjustments and Intersegment classification adjustments are included within the Intersegment sales amounts and segment operating profit amounts previously reported by the Company in the Form 10-Q filed with the SEC on July 30, 2024. In the course of testing new controls implemented as part of the Company’s material weakness remediation plan in the third quarter of 2024, ADM identified additional intrasegment sales previously misclassified and reported as intersegment sales. The Company also identified some intersegment sales that were not accounted for consistently in accordance with revenue recognition and segment reporting standards and should not have been reported as intersegment sales. These amounts are presented in the table below as Additional intersegment classification adjustments. The Company also is correcting certain segment disclosure presentation errors in this Form 10-Q/A. See Note 1. for further information. Impact of the Restatement on the Ag Services and Oilseeds Segment Three Months Ended Six Months Ended June 30, June 30, (In millions) 2024 (Restated) 2023 (Restated) 2024 (Restated) 2023 (Restated) Intersegment revenues, as originally reported $ 546 $ 1,020 $ 1,155 $ 2,355 Intersegment pricing adjustments — 1 — 2 Intersegment classification adjustments — ( 320 ) — ( 915 ) Intersegment revenues, as previously reported 546 701 1,155 1,442 Additional intersegment classification adjustments ( 114 ) ( 139 ) ( 297 ) ( 350 ) Intersegment revenues, as restated $ 432 $ 562 $ 858 $ 1,092 Segment operating profit, as originally reported $ 459 $ 1,054 $ 1,323 $ 2,264 Intersegment pricing adjustments — — — 1 Segment operating profit, as restated $ 459 $ 1,054 $ 1,323 $ 2,265 34 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 13. Segment Information - Restated (Continued) Impact of the Restatement on the Carbohydrate Solutions Segment Three Months Ended Six Months Ended June 30, June 30, (In millions) 2024 (Restated) 2023 (Restated) 2024 (Restated) 2023 (Restated) Intersegment revenues, as originally reported $ 239 $ 448 $ 518 $ 1,177 Intersegment pricing adjustments — 16 — 22 Intersegment classification adjustments — ( 60 ) — ( 290 ) Intersegment revenues, as previously reported 239 404 518 909 Additional intersegment classification adjustments ( 14 ) ( 180 ) ( 84 ) ( 415 ) Intersegment revenues, as restated $ 225 $ 224 $ 434 $ 494 Segment operating profit, as originally reported $ 357 $ 303 $ 605 $ 576 Intersegment pricing adjustments — 16 — 22 Segment operating profit, as restated $ 357 $ 319 $ 605 $ 598 Impact of the Restatement on the Nutrition Segment Three Months Ended Six Months Ended June 30, June 30, (In millions) 2024 (Restated) 2023 (Restated) 2024 (Restated) 2023 (Restated) Intersegment revenues, as originally reported $ 13 $ 73 $ 19 $ 164 Intersegment pricing adjustments — — — — Intersegment classification adjustments — ( 39 ) — ( 94 ) Intersegment revenues, as previously reported 13 34 19 70 Additional intersegment classification adjustments 5 ( 22 ) 12 ( 46 ) Intersegment revenues, as restated $ 18 $ 12 $ 31 $ 24 Segment operating profit, as originally reported $ 109 $ 185 $ 193 $ 330 Intersegment pricing adjustments — ( 16 ) — ( 23 ) Segment operating profit, as restated $ 109 $ 169 $ 193 $ 307 For more information about the Company’s business segments, refer to Note 17 of “Notes to Consolidated Financial Statements” included in Item 8, “Financial Statements and Supplementary Data” included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023. 35 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 13. Segment Information - Restated (Continued) Segment Information for the Three and Six Months ended June 30, 2024 and 2023 Three Months Ended Six Months Ended June 30, June 30, (In millions) 2024 2023 2024 2023 Revenues from external customers Ag Services and Oilseeds Ag Services $ 11,746 $ 13,366 $ 22,943 $ 25,061 Crushing 2,850 3,480 6,177 7,163 Refined Products and Other 2,737 2,998 5,432 6,199 Total Ag Services and Oilseeds 17,333 19,844 34,552 38,423 Carbohydrate Solutions Starches and Sweeteners 2,211 2,475 4,367 5,212 Vantage Corn Processors 683 906 1,210 1,706 Total Carbohydrate Solutions 2,894 3,381 5,577 6,918 Nutrition Human Nutrition 1,061 966 2,025 1,902 Animal Nutrition 847 887 1,719 1,804 Total Nutrition 1,908 1,853 3,744 3,706 Total segment revenues from external customers 22,135 25,078 43,873 49,047 Other Business 113 112 222 215 Total revenues from external customers $ 22,248 $ 25,190 $ 44,095 $ 49,262 Intersegment revenues, as restated Ag Services and Oilseeds $ 432 $ 562 $ 858 $ 1,092 Carbohydrate Solutions 225 224 434 494 Nutrition 18 12 31 24 Total intersegment revenues, as restated $ 675 $ 798 $ 1,323 $ 1,610 Segment operating profit, as restated Ag Services and Oilseeds $ 459 $ 1,054 $ 1,323 $ 2,265 Carbohydrate Solutions 357 319 605 598 Nutrition 109 169 193 307 Total segment operating profit, as restated 925 1,542 2,121 3,170 Other Business earnings (loss) 96 86 217 183 Corporate ( 418 ) ( 393 ) ( 844 ) ( 715 ) Specified items: Gains on sale of assets (1) — 11 — 12 Impairment and restructuring charges (2) ( 7 ) ( 114 ) ( 13 ) ( 121 ) Earnings before income taxes $ 596 $ 1,132 $ 1,481 $ 2,529 (1) Prior year period gains were related to the sale of certain assets. (2) Current and prior year period charges were related to the impairment of certain long-lived assets and restructuring. 36 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 14. Asset Impairment, Exit, and Restructuring Costs Asset impairment, exit, and restructuring costs in the three and six months ended June 30, 2024 consisted of impairments related to certain long-lived assets of $ 7 million and $ 10 million, respectively, and restructuring charges of $ 3 million for the six months ended June 30, 2024, presented as specified items, and restructuring charges in Corporate of $ 12 million, for the six months ended June 30, 2024. Asset impairment, exit, and restructuring costs in the three and six months ended June 30, 2023 consisted of $ 43 million and $ 46 million, respectively, of impairments related to certain long-lived assets and intangibles, respectively, and $ 17 million and $ 21 million, respectively, of restructuring charges, presented as specified items. Note 15. Sale of Accounts Receivable The Company has an accounts receivable securitization program (the “First Program”) with certain commercial paper conduit purchasers and committed purchasers (collectively, the “First Purchasers”). Under the First Program, certain U.S.-originated trade accounts receivable are sold to a wholly-owned bankruptcy-remote entity, ADM Receivables, LLC (“ADM Receivables”). 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 $ 1.7 billion for the accounts receivable transferred. The First Program terminates on May 16, 2025, unless extended. The Company also has an accounts receivable securitization program (the “Second Program”) with certain commercial paper conduit purchasers and committed purchasers (collectively, the “Second Purchasers”). Under the Second Program, certain non-U.S.-originated trade accounts receivable are sold to a wholly-owned bankruptcy-remote entity, ADM Ireland Receivables Company (ADM Ireland Receivables). 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) for the accounts receivables transferred. The Second Program terminates on April 18, 2025, 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 June 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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 $ 1.6 billion, respectively. Total receivables sold were $ 23.6 billion and $ 28.8 billion for the six months ended June 30, 2024 and 2023, respectively. Cash collections from customers on receivables sold were $ 23.0 billion and $ 28.4 billion for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and December 31, 2023, receivables pledged as collateral to the Purchasers was $ 0.8 billion and $ 1.1 billion, respectively. Transfers of receivables under the Programs resulted in an expense for the loss on sale of $ 26 million and $ 53 million for the three and six months ended June 30, 2024, respectively, and $ 11 million and $ 34 million for the three and six months ended June, 30, 2023, 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. 37 Archer-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 16. Supplier Finance Programs ADM has Supplier Payable Programs (“SPP”) with financial institutions which act as its paying agents for payables due to certain of its suppliers. The Company has neither an economic interest in a supplier’s participation in the SPP nor a direct financial relationship with the financial institutions, and has concluded that its obligations to the suppliers, including amounts due and scheduled payment terms, are not impacted by their participation in the SPP. Accordingly, amounts associated with the SPP continue to be classified in trade payables in the Company’s consolidated balance sheet and in operating activities in its consolidated statement of cash flows. 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 June 30, 2024 and December 31, 2023, the Company’s outstanding payment obligations that suppliers had elected to sell to the financial institutions were $ 289 million and $ 274 million, respectively. Changes to the outstanding payment obligations were as follows: June 30, 2024 (In millions) Beginning, January 1, 2024 $ 274 Obligations confirmed 520 Obligations paid ( 505 ) Ending, June 30, 2024 $ 289 Note 17. Legal Proceedings The Company is routinely involved in a number of actual or threatened legal actions, including those involving alleged personal injuries, employment law, product liability, intellectual property, environmental issues, alleged tax liability (see Note 10 for information on income tax matters), and class actions. The Company also routinely receives inquiries from regulators and other government authorities relating to various aspects of its business, and at any given time, the Company has matters at various stages of resolution. The outcomes of these matters are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, claimants seek damages, as well as other relief including injunctive relief, that could require significant expenditures or result in lost revenues. In accordance with applicable accounting standards, the Company records a liability in its consolidated financial statements for material loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a material loss contingency is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages, with incomplete facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, disgorgement, or punitive damages; or could result in a change in business practice. The Company’s estimated loss or range of loss with respect to loss contingencies may change from time to time, and it is reasonably possible the Company will incur actual losses in excess of the amounts currently accrued and such additional amounts may be material. While the Company continues to work with parties with respect to potential resolution, no assurance can be given that it will be successful in doing so and the Company cannot predict the outcome of these matters. Commodities Class Actions On September 4, 2019, AOT Holding AG (“AOT”) filed a putative class action under the U.S. Commodities Exchange Act in federal district court in Urbana, Illinois, alleging the Company sought to manipulate the benchmark price used to price and settle ethanol derivatives traded on futures exchanges. On March 16, 2021, AOT filed an amended complaint adding a second named plaintiff Maize Capital Group, LLC (“Maize”). AOT and Maize allege that members of the putative class collectively suffered damages calculated to be between approximately $ 500 million to over $ 2.0 billion as a result of the Company’s alleged actions. On July 14, 2020, Green Plains Inc. and its related entities (“GP”) filed a putative class action lawsuit, alleging 38 A rcher-Daniels-Midland Company Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 17. Legal Proceedings (Continued) substantially the same operative facts, in federal court in Nebraska, seeking to represent sellers of ethanol. On July 23, 2020, Midwest Renewable Energy, LLC (“MRE”) filed a putative class action in federal court in Illinois alleging substantially the same operative facts and asserting claims under the Sherman Act. On November 11, 2020, United Wisconsin Grain Producers LLC (“UWGP”) and five other ethanol producers filed a lawsuit in federal court in Illinois alleging substantially the same facts and asserting claims under the Sherman Act and Illinois, Iowa, and Wisconsin law. The court granted ADM’s motion to dismiss the MRE and UWGP complaints without prejudice on August 9, 2021 and September 28, 2021, respectively. On August 16, 2021, the court granted ADM’s motion to dismiss the GP complaint, dismissing one claim with prejudice and declining jurisdiction over the remaining state law claim. MRE filed an amended complaint on August 30, 2021, which ADM moved to dismiss on September 27, 2021. The court denied ADM’s motion to dismiss on September 26, 2023. UWGP filed an amended complaint on October 19, 2021, which the court dismissed on July 12, 2022. UWGP has appealed the dismissal to the United States Court of Appeals for the Seventh Circuit. On October 26, 2021, GP filed a new complaint in Nebraska federal district court, alleging substantially the same facts and asserting a claim for tortious interference with contractual relations. On March 18, 2022, the Nebraska federal district court granted ADM’s motion to transfer the GP case back to the Central District of Illinois for further proceedings. ADM moved to dismiss the complaint on May 20, 2022 and on December 30, 2022, the court dismissed GP’s complaint with prejudice. GP appealed the dismissal. On January 12, 2024, the appellate court vacated the dismissal and remanded the case to the district court for further proceedings. On March 8, 2024, GP filed an amended complaint, which ADM has moved to dismiss. The Company denies liability, and is vigorously defending itself in these actions. As these actions are in pretrial proceedings, the Company is unable at this time to predict the final outcome with any reasonable degree of certainty, but believes the outcome will not have a material adverse effect on its financial condition, results of operations, or cash flows. Intersegment Sales Investigations On June 30, 2023, the Company received a voluntary document request from the SEC relating to intersegment sales between the Company’s Nutrition reporting segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions reporting segments, and subsequently received additional document requests from the SEC. The Company is cooperating with the SEC. Following the Company’s January 21, 2024 announcement of the Investigation, the Company received document requests from the Department of Justice (“DOJ”) focused primarily on the same subject matter, and the DOJ directed grand jury subpoenas to certain current and former Company employees. The Company is cooperating with the DOJ. The Company is unable to predict the final outcome of these investigations with any reasonable degree of certainty. Shareholder Litigation On January 24, 2024, following the Company’s January 21, 2024 announcement of the investigation relating to intersegment sales, a purported stockholder of the Company filed a putative class action in the U.S. District Court for the Northern District of Illinois against the Company and its Chief Executive Officer, as well as Vikram Luthar and Ray Young. On June 24, 2024, the court-appointed lead plaintiffs filed an amended putative class action complaint against the Company, its Chief Executive Officer, as well as Vikram Luthar, Ray Young, and Vince Macciocchi. Plaintiffs allege false and misleading statements in the Company’s disclosures related to ADM’s Nutrition segment and seek unspecified compensatory and punitive damages. Beginning on March 29, 2024, purported stockholders of the Company filed four derivative lawsuits in the U.S. District Court for the Northern District of Illinois and the U.S. District Court for the District of Delaware, against the Chief Executive Officer, Vikram Luthar, Ray Young, and certain individual current and former ADM Directors, alleging false and misleading statements in the Company’s proxy statements, breach of fiduciary duty, and corporate waste, among other claims, and seeking unspecified damages. The plaintiffs voluntarily dismissed one of the derivative complaints; the remainder have been consolidated in the U.S. District Court for the District of Delaware and the plaintiffs’ amended complaint is due September 13, 2024. The Company is unable to predict the final outcome of these proceedings with any reasonable degree of certainty. Note 18. Subsequent Event On July 28, 2024, there was an explosion at the Company’s Decatur, Illinois production complex resulting in damage to an elevator with no injuries to employees. The Company is assessing the operational and financial impacts of this event. 39 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying unaudited consolidated financial statements. Restatement of Previously Issued Consolidated Financial Statements As described in the Explanatory Note above and in Part I, Item 1, Note 1 to the Consolidated Financial Statements, the Company has restated its Consolidated Financial Statements as of June 30, 2024 and 2023 and for the three and six months ended June 30, 2024 and 2023 contained in this Amendment. As a result, the previously reported financial information as of June 30, 2024 and 2023 and for the three and six months ended June 30, 2024 and 2023, in this Item 2. MD&A has been updated to reflect the relevant restatements. See Item 1, Note 1. Basis of Presentation and Restatement of Previously Filed Consolidated Financial Statements, and Note 13. Segment Information, in the Consolidated Financial Statements for additional information related to the restatements, including descriptions of the adjustments and the impacts on the Consolidated Financial Statements. The Company also is correcting certain segment disclosure presentation errors. In this Amendment, the Company is revising its reconciliation and calculation of total segment operating profit. The revised reconciliation in Note 13. Segment Information presents a subtotal for total segment operating profit that is equal to the sum of the segment operating profit reported for each of the Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition segments. Amounts for other business and specified items, which previously were reflected in the calculation of total segment operating profit, are now reflected as reconciling items, similar to Corporate, between total segment operating profit and earnings before income taxes. Company Overview ADM is an essential global agricultural supply chain manager and processor; a premier human and animal nutrition provider; a trailblazer in groundbreaking solutions to support healthier living; an industry-leading innovator in replacing petroleum-based products; and a leader in 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. The Company also processes corn, oilseeds, and wheat into products for food, animal feed, industrial, and energy uses. The Company also engages in the manufacturing, sale, and distribution of a wide array of ingredients and solutions including plant-based proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, enzymes, botanical extracts, and other specialty food and feed ingredients. The Company uses its global asset network, business acumen, and its relationships with suppliers and customers to efficiently connect the harvest to the home thereby generating returns for its shareholders, principally from margins earned on these activities. The Company’s operations are organized, managed, and classified into three reportable business segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Each of these segments is organized based upon the nature of products and services offered. The Company’s remaining operations are not reportable business segments, as defined by the applicable accounting standard, and are classified as Other Business. Financial information with respect to the Company’s reportable business segments is set forth in Note 13 of “Notes to Consolidated Financial Statements” included in Item 1 herein, “Financial Statements”. ADM’s recent significant portfolio actions and announcements include: • the acquisitions in January 2024 of Revela Foods, a Wisconsin-based developer and manufacturer of innovative dairy flavor ingredients and solutions and FDL, a UK-based leading developer and producer of premium flavor and functional ingredient systems. Sustainability is a key driver in ADM’s expanding portfolio of environmentally responsible, plant-derived products. Consumers today increasingly expect their food and drink to come from sustainable ingredients, produced by companies that share their values, and ADM is continually finding new ways to meet those needs through its portfolio actions. The Company’s strategic transformation is focused on three strategic pillars: Productivity, Innovation, and Culture. 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 40 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) business transformation program and implementation of improved standardized business processes; and (3) increased use of technology, data analytics, and automation at production facilities, in offices, and with customers to improve efficiencies and customer service. 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; (2) sustainability-driven innovation, which encompasses the full range of products, solutions, capabilities, and commitments to serve customers’ needs; and (3) growth initiatives, including organic growth with additional capacity to meet growing market demand and strategic objectives. The Culture pillar focuses on building capabilities and enabling collaboration, teamwork, and agility from process standardization and digitalization and ADM’s diversity, equity, and inclusion initiatives, which bring new perspectives and expertise to the Company’s decision-making. ADM plans to support the three pillars with investments in technology, which include expanding digital capabilities and investing further in research and development. Environmental and Social Responsibility The Company’s policy to protect forests, biodiversity, and communities includes provisions that promote conservation of water resources and biodiversity in agricultural landscapes, promote solutions to reduce climate change and greenhouse gas emissions, and support agriculture as a means to advance sustainable development by reducing poverty and increasing food security. Additionally, the policy confirms ADM’s commitment to protect human rights defenders, whistleblowers, complainants, and community spokespersons; ADM’s aspiration to cooperate with all parties necessary to enable access to fair and just remediation; and the Company’s non-compliance protocol for suppliers. In 2022, the Company achieved full traceability of its direct and indirect sourcing throughout its soy supply chains in Brazil, Paraguay, and Argentina. ADM is committed to eliminating deforestation from all of the Company’s supply chains by 2025. In 2023, after a strategic investigation of the impact of conversion of native habitats in its key supply chains, the Company announced its commitment to eliminate conversion of native habitats in high risk areas in South America for direct suppliers of all commodities by 2025 and indirect suppliers by 2027, with a 2025 cutoff date (a date after which conversion of primary native vegetation renders a given area or production unit non-compliant) for both direct and indirect suppliers. 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 Scope 3 emissions by 25% from a 2021 baseline, reduce energy intensity by 15 percent from a 2019 baseline, reduce water intensity by 10 percent from a 2019 baseline, and achieve a 90 percent landfill diversion rate. In 2023, ADM refined two of its Strive 35 commitments to more meaningfully drive progress: ADM aims to reduce its absolute water withdrawal by 10%, from a 2019 baseline, by 2035, and ADM aims to increase its use of low-carbon energy sources to 25% of total energy used by 2035. Operating Performance Indicators The Company is exposed to certain risks inherent to an agricultural-based commodity business. These risks are further described in Part I Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023. The Company’s Ag Services and Oilseeds and Carbohydrate Solutions operations are principally agricultural commodity-based businesses where changes in selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold. Therefore, changes in revenues of these businesses do not necessarily correspond to changes in margins or gross profit. Thus, gross margins per volume or metric ton are more meaningful than gross margins as percentage of revenues. The Nutrition businesses also utilize agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily correlate to changes in cost of products sold. Therefore, changes in revenues of these businesses may correspond to changes in margins or gross profit. Thus, gross margins rates are more meaningful as a performance indicator in these businesses. 41