- Net earnings of $341 million
- Improving second half operating environment sets stage for a stronger 2017
CHICAGO--(BUSINESS WIRE)--Archer Daniels Midland Company (NYSE: ADM) today reported financial
results for the quarter ended September 30, 2016.
“After working through the challenging environment in the first half of
the year, we capitalized on improving operating conditions in the third
quarter and are positioned well for a solid finish to the year,” said
ADM Chairman and CEO Juan Luciano. “Ag Services results were driven by
U.S. exports that surged through the quarter, creating improved
merchandising opportunities as the global market relied heavily on U.S.
exports of corn and soybeans. Results for Corn included strong
performance in North American sweeteners and starches, growth from our
international corn operations and steady results for bioproducts.
Oilseeds results were impacted by significantly lower global soy
crushing margins, weaker origination results in Brazil and the unusual
equity loss from our Wilmar investment. WFSI results included strong
growth from WILD Flavors with mixed results from our specialty
ingredients businesses.
“We continued to execute our strategic plan in the quarter. We acquired
Caterina Foods, a manufacturer of specialty gluten-free and high-protein
pastas. In addition, we further invested in Asia’s growing and evolving
food demand by increasing our strategic ownership stake in Wilmar to 23
percent. Our ethanol dry mill review has progressed and we are targeting
receipt of final proposals from a short list of interested parties by
the end of the calendar year. And, we have implemented nearly $250
million of new run-rate savings actions through the third quarter and
expect to exceed our $275 million target by the end of the calendar
year. In line with our balanced capital allocation framework, we have
returned $1.3 billion to shareholders in dividends and share buybacks
through the first nine months of the year.
“With improving market conditions and a large U.S. harvest, combined
with the team’s solid execution capabilities, we feel good about the
remainder of the year and a stronger 2017.”
Third Quarter 2016 Highlights:
|
|
|
Quarter ended September 30
|
|
|
|
2016
|
|
2015
|
|
|
|
As Reported
|
|
Adj
|
|
Adjusted1
|
|
As Reported
|
|
Adj
|
|
Adjusted1
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
|
0.58
|
|
|
$
|
|
0.01
|
|
|
|
$
|
|
0.59
|
|
|
|
$
|
|
0.41
|
|
|
|
$
|
|
0.19
|
|
|
|
$
|
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural Services
|
|
$
|
193
|
|
|
$
|
|
2
|
|
|
|
$
|
|
195
|
|
|
|
$
|
|
149
|
|
|
|
$
|
|
—
|
|
|
|
$
|
|
149
|
|
Corn Processing
|
|
212
|
|
|
2
|
|
|
|
214
|
|
|
|
131
|
|
|
|
34
|
|
|
|
165
|
|
Oilseeds Processing
|
|
144
|
|
|
1
|
|
|
|
145
|
|
|
|
335
|
|
|
|
(59
|
|
)
|
|
276
|
|
WFSI
|
|
73
|
|
|
—
|
|
|
|
73
|
|
|
|
70
|
|
|
|
—
|
|
|
|
70
|
|
Other
|
|
23
|
|
|
—
|
|
|
|
23
|
|
|
|
24
|
|
|
|
—
|
|
|
|
24
|
|
Total
|
|
$
|
645
|
|
|
$
|
|
5
|
|
|
|
$
|
|
650
|
|
|
|
$
|
|
709
|
|
|
|
$
|
|
(25
|
|
)
|
|
$
|
|
684
|
1 Non-GAAP financial measures; see pages 4 and 9 for
explanations and reconciliations, including after-tax amounts.
Third Quarter 2016 Highlights (continued):
-
EPS as reported of $0.58 includes a $0.09 per share credit related to
LIFO, $0.08 per share of charges related to asset impairments,
restructuring and settlements, and other charges of $0.02 per share.
Excluding these items, adjusted EPS is $0.591.
-
Trailing four-quarter-average adjusted ROIC was 5.8 percent1,
80 basis points below our annual WACC of 6.6 percent.
-
The effective tax rate for the quarter was 28 percent compared to 31
percent in the year-ago quarter due to changes in the mix of earnings.
-
During the first nine months of 2016, the company returned $1.3
billion to shareholders through dividends and share repurchases.
1 Non-GAAP financial measures; see pages 9 and 10 for
explanations and reconciliations, including after-tax amounts.
Results of Operations:
In Ag Services, merchandising and handling results were up due to
increased volumes and improved margins as crop shortages in South
America accelerated this year’s seasonal shift in global demand to North
America. The global trade desk results were lower in the quarter as some
commodity prices declined, causing global buyers to draw down their
inventories, which limited merchandising opportunities.
Transportation results improved due to strong exports and improved
freight rates.
Milling and Other continued to perform well with another solid quarter,
consistent with the year-ago period, on strong product margins related
to seasonal demand.
In Corn Processing, sweeteners and starches results improved as the
North American business continued to perform well with solid demand,
production efficiencies and improved raw material costs. The company’s
results from its international corn operations improved in the quarter.
Bioproducts results, excluding last year’s Brazilian sugar impairment
charge, were essentially flat with improved operational performance and
margins from Animal Nutrition, offset by slightly lower ethanol results
compared to last year.
In Oilseeds Processing, crushing and origination results declined
significantly versus a very strong year-ago quarter due to lower soy
crush margins. In addition, origination volumes were lower due to
reduced Brazilian soybean and corn crops.
Refining, packaging, biodiesel and other results were up from the
year-ago quarter due to solid results in biodiesel, specialty fats and
oils and better Golden Peanut and Tree Nuts margins.
Oilseeds results in Asia for the quarter declined from the year-ago
period, primarily due to Wilmar’s unusual equity loss in the second
quarter . ADM records its share of Wilmar’s results on a one-quarter lag
basis and recorded a $48 million equity loss in the third quarter,
compared to income of $36 million in the third quarter one year ago.
WFSI results were up slightly versus the year-ago quarter with strong
operating profit growth in flavors and ingredient systems, and the
integration of Eatem Foods, offset by mixed results from the specialty
ingredients businesses and some start-up items.
Other financial operating profit was essentially flat on steady ADM
Investor Services volumes and results from captive insurance operations.
Other Items of Note
As additional information to help clarify underlying business
performance, the tables on page 9 include both reported EPS as well as
adjusted EPS excluding significant timing effects.
Segment operating profit of $645 million as reported for the quarter
includes charges of $2 million in Ag Services related to asset
impairment and restructuring; charges of $2 million in Corn Processing
primarily related to a $4 million final settlement of sales proceeds
from the Brazilian sugar ethanol disposal, partially offset by hedge
timing gains; and a $1 million restructuring charge in Oilseeds. Prior
year Oilseeds results included earnings of $63 million related to the
company’s cocoa business which was sold in the fourth quarter of 2015,
including $31 million of hedge timing effects.
In addition, corporate results include $74 million in legal settlements
and related fees, impairment charges and losses on sales of various
equity investments.
The effective tax rate for the quarter was 28 percent compared to 31
percent in the year-ago quarter, due to changes in the geographic mix of
earnings and the tax impact of portfolio actions.
Conference Call Information
ADM will host a webcast on Nov. 1, 2016, at 8 a.m. Central Time to
discuss financial results and provide a company update. A financial
summary slide presentation will be available to download approximately
60 minutes prior to the call. To listen to the webcast or to download
the slide presentation, go to www.adm.com/webcast.
A replay of the webcast will also be available for an extended period of
time at www.adm.com/webcast.
Forward-Looking Statements
Some of the above statements constitute forward-looking statements.
These statements are based on many assumptions and factors that are
subject to risk and uncertainties. ADM has provided additional
information in its reports on file with the SEC concerning assumptions
and factors that could cause actual results to differ materially from
those in this presentation, and you should carefully review the
assumptions and factors in our SEC reports. To the extent permitted
under applicable law, ADM assumes no obligation to update any
forward-looking statements.
About ADM
For more than a century, the people of Archer Daniels Midland Company
(NYSE: ADM) have transformed crops into products that serve the vital
needs of a growing world. Today, we’re one of the world’s largest
agricultural processors and food ingredient providers, with more than
32,300 employees serving customers in more than 160 countries. With a
global value chain that includes 428 crop procurement locations, 280
ingredient manufacturing facilities, 39 innovation centers and the
world’s premier crop transportation network, we connect the harvest to
the home, making products for food, animal feed, industrial and energy
uses. Learn more at www.adm.com.
Financial Tables Follow
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit and Corporate Results
|
|
A non-GAAP financial measure
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
|
|
|
|
Nine months ended
|
|
|
|
|
|
September 30
|
|
|
|
September 30
|
|
|
|
(In millions)
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural Services Operating Profit
|
|
$
|
193
|
|
|
$
|
149
|
|
|
$
|
44
|
|
|
$
|
365
|
|
|
$
|
495
|
|
|
$
|
(130
|
)
|
|
Merchandising and handling (excl. specified items)
|
|
92
|
|
|
57
|
|
|
35
|
|
|
102
|
|
|
205
|
|
|
(103
|
)
|
|
Milling and other (excluding specified item)
|
|
60
|
|
|
61
|
|
|
(1
|
)
|
|
164
|
|
|
183
|
|
|
(19
|
)
|
|
Transportation (excluding specified item)
|
|
43
|
|
|
31
|
|
|
12
|
|
|
62
|
|
|
82
|
|
|
(20
|
)
|
|
Gains on sales of assets/revaluation*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
27
|
|
|
16
|
|
|
Impairment and restructuring charges*
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corn Processing Operating Profit
|
|
$
|
212
|
|
|
$
|
131
|
|
|
$
|
81
|
|
|
$
|
562
|
|
|
$
|
448
|
|
|
$
|
114
|
|
|
Sweeteners and starches (excl. specified items)
|
|
176
|
|
|
125
|
|
|
51
|
|
|
499
|
|
|
355
|
|
|
144
|
|
|
Bioproducts (excluding specified items)
|
|
38
|
|
|
40
|
|
|
(2
|
)
|
|
7
|
|
|
125
|
|
|
(118
|
)
|
|
Gains (loss) on sales of assets*
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
59
|
|
|
6
|
|
|
53
|
|
|
Corn hedge timing effects*
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
|
4
|
|
|
(4
|
)
|
|
8
|
|
|
Impairment and restructuring charges*
|
|
(1
|
)
|
|
(33
|
)
|
|
32
|
|
|
(7
|
)
|
|
(34
|
)
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oilseeds Processing Operating Profit
|
|
$
|
144
|
|
|
$
|
335
|
|
|
$
|
(191
|
)
|
|
$
|
638
|
|
|
$
|
1,148
|
|
|
$
|
(510
|
)
|
|
Crushing and origination (excl. specified items)
|
|
76
|
|
|
175
|
|
|
(99
|
)
|
|
331
|
|
|
707
|
|
|
(376
|
)
|
|
Refining, packaging, biodiesel, and other (excluding specified items)
|
|
119
|
|
|
68
|
|
|
51
|
|
|
251
|
|
|
213
|
|
|
38
|
|
|
Asia (excluding specified item)
|
|
(50
|
)
|
|
33
|
|
|
(83
|
)
|
|
59
|
|
|
140
|
|
|
(81
|
)
|
|
Gain on sale of assets*
|
|
—
|
|
|
32
|
|
|
(32
|
)
|
|
—
|
|
|
100
|
|
|
(100
|
)
|
|
Impairment and restructuring charges*
|
|
(1
|
)
|
|
(4
|
)
|
|
3
|
|
|
(3
|
)
|
|
(32
|
)
|
|
29
|
|
|
Cocoa hedge timing effects*
|
|
—
|
|
|
31
|
|
|
(31
|
)
|
|
—
|
|
|
20
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wild Flavors & Specialty Ingredients Operating Profit
|
|
$
|
73
|
|
|
$
|
70
|
|
|
$
|
3
|
|
|
$
|
249
|
|
|
$
|
242
|
|
|
$
|
7
|
|
|
Wild Flavors and Specialty Ingredients (excluding specified item)
|
|
73
|
|
|
70
|
|
|
3
|
|
|
237
|
|
|
242
|
|
|
(5
|
)
|
|
Gain on revaluation*
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating Profit
|
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
(1
|
)
|
|
$
|
84
|
|
|
$
|
39
|
|
|
$
|
45
|
|
|
Financial
|
|
23
|
|
|
24
|
|
|
(1
|
)
|
|
84
|
|
|
39
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit
|
|
$
|
645
|
|
|
$
|
709
|
|
|
$
|
(64
|
)
|
|
$
|
1,898
|
|
|
$
|
2,372
|
|
|
$
|
(474
|
)
|
|
*Memo: Adjusted Segment Operating Profit
|
|
$
|
650
|
|
|
$
|
684
|
|
|
$
|
(34
|
)
|
|
$
|
1,796
|
|
|
$
|
2,291
|
|
|
$
|
(495
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results
|
|
$
|
(165
|
)
|
|
$
|
(342
|
)
|
|
$
|
177
|
|
|
$
|
(705
|
)
|
|
$
|
(789
|
)
|
|
$
|
84
|
|
|
LIFO credit (charge)
|
|
85
|
|
|
75
|
|
|
10
|
|
|
(17
|
)
|
|
16
|
|
|
(33
|
)
|
|
Interest expense - net
|
|
(74
|
)
|
|
(68
|
)
|
|
(6
|
)
|
|
(205
|
)
|
|
(226
|
)
|
|
21
|
|
|
Unallocated corporate costs
|
|
(106
|
)
|
|
(113
|
)
|
|
7
|
|
|
(325
|
)
|
|
(344
|
)
|
|
19
|
|
|
Minority interest and other charges
|
|
(70
|
)
|
|
(236
|
)
|
|
166
|
|
|
(158
|
)
|
|
(235
|
)
|
|
77
|
|
|
Earnings Before Income Taxes
|
|
$
|
480
|
|
|
$
|
367
|
|
|
$
|
113
|
|
|
$
|
1,193
|
|
|
$
|
1,583
|
|
|
$
|
(390
|
)
|
Segment operating profit is ADM’s consolidated income from operations
before income tax excluding corporate items. Adjusted segment operating
profit is segment operating profit adjusted, where applicable, for
specified items and timing effects (see items denoted*). Timing effects
relate to hedge ineffectiveness and significant mark-to-market hedge
timing effects. Management believes that segment operating profit and
adjusted segment operating profit are useful measures of ADM’s
performance because they provide investors information about ADM’s
business unit performance excluding corporate overhead costs as well as
specified items and significant timing effects. Segment operating profit
and adjusted segment operating profit are non-GAAP financial measures
and are not intended to replace earnings before income tax, the most
directly comparable GAAP financial measure. Segment operating profit and
adjusted segment operating profit are not measures of consolidated
operating results under U.S. GAAP and should not be considered
alternatives to income before income taxes or any other measure of
consolidated operating results under U.S. GAAP.
|
|
|
|
|
|
|
Consolidated Statements of Earnings
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter ended
|
|
Nine months ended
|
|
|
|
September 30
|
|
September 30
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
15,832
|
|
|
$
|
16,565
|
|
|
$
|
45,845
|
|
|
$
|
51,257
|
|
|
Cost of products sold
|
|
14,727
|
|
|
15,476
|
|
|
43,187
|
|
|
48,102
|
|
|
Gross profit
|
|
1,105
|
|
|
1,089
|
|
|
2,658
|
|
|
3,155
|
|
|
Selling, general, and administrative expenses
|
|
561
|
|
|
519
|
|
|
1,575
|
|
|
1,550
|
|
|
Asset impairment, exit, and restructuring costs
|
|
11
|
|
|
65
|
|
|
36
|
|
|
96
|
|
|
Equity in (earnings) losses of unconsolidated affiliates
|
|
2
|
|
|
(61
|
)
|
|
(153
|
)
|
|
(287
|
)
|
|
Interest income
|
|
(23
|
)
|
|
(13
|
)
|
|
(68
|
)
|
|
(52
|
)
|
|
Interest expense
|
|
78
|
|
|
69
|
|
|
213
|
|
|
235
|
|
|
Other (income) expense - net
|
|
(4
|
)
|
|
143
|
|
|
(138
|
)
|
|
30
|
|
|
Earnings before income taxes
|
|
480
|
|
|
367
|
|
|
1,193
|
|
|
1,583
|
|
|
Income taxes
|
|
(136
|
)
|
|
(114
|
)
|
|
(331
|
)
|
|
(454
|
)
|
|
Net earnings including noncontrolling interests
|
|
344
|
|
|
253
|
|
|
862
|
|
|
1,129
|
|
|
Less: Net earnings (losses) attributable to noncontrolling interests
|
|
3
|
|
|
1
|
|
|
7
|
|
|
(2
|
)
|
|
Net earnings attributable to ADM
|
|
$
|
341
|
|
|
$
|
252
|
|
|
$
|
855
|
|
|
$
|
1,131
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.58
|
|
|
$
|
0.41
|
|
|
$
|
1.44
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares outstanding
|
|
589
|
|
|
615
|
|
|
593
|
|
|
627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense - net consists of:
|
|
|
|
|
|
|
|
|
|
Losses (Gains) on sales of assets/revaluations (a)
|
|
$
|
7
|
|
|
$
|
(35
|
)
|
|
$
|
(117
|
)
|
|
$
|
(139
|
)
|
|
Loss on debt extinguishment
|
|
—
|
|
|
189
|
|
|
—
|
|
|
189
|
|
|
Other - net
|
|
(11
|
)
|
|
(11
|
)
|
|
(21
|
)
|
|
(20
|
)
|
|
|
|
$
|
(4
|
)
|
|
$
|
143
|
|
|
$
|
(138
|
)
|
|
$
|
30
|
|
(a) Current period gain in Ag Services (Q3 $0 million, YTD $47 million)
related principally to realized contingent consideration from the sale
of the Company’s equity investment in Gruma S.A.B de C.V. in December
2012 of $48 million partially offset by a $5 million loss on sale of
assets, Corn (Q3 $5 million loss & YTD $58 million gain) related
principally to finalization of the gain on sale of the Company’s
Brazilian sugar ethanol facilities, Wild (Q3 $0 million & YTD $12
million) related to the gain on revaluation of the remaining interest to
settlement value in conjunction with the acquisition of the remaining
interest in Amazon Flavors, Corporate (Q3 and YTD $5 million loss)
related to a loss on sale of an equity investment, and individually
insignificant disposal gains in Oilseeds and Other (Q3 $3 million; YTD
$5 million). Prior period gain in Ag Services (Q3 $1 million, YTD $29
million) related principally to the gain on revaluation of the Company’s
previously held investments in North Star Shipping and Minmetal in
conjunction with the acquisition of the remaining interest, Corn (Q3 $2
million, YTD $8 million) related principally to the gain on sale of the
lactic business in Q2, and Oilseeds (Q3 $32 million, YTD $102 million)
related to the gain on sale of the global cocoa business in Q3 and the
Barcarena export terminal transaction in Q2.
|
|
|
|
|
|
|
Summary of Financial Condition
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
|
(in millions)
|
|
Net Investment In
|
|
|
|
|
|
Cash and cash equivalents (b)
|
|
$
|
701
|
|
|
$
|
720
|
|
Short-term marketable securities (b)
|
|
256
|
|
|
417
|
|
Operating working capital (a)
|
|
7,328
|
|
|
7,910
|
|
Property, plant, and equipment
|
|
9,853
|
|
|
9,807
|
|
Investments in and advances to affiliates
|
|
4,497
|
|
|
3,909
|
|
Long-term marketable securities
|
|
462
|
|
|
436
|
|
Goodwill and other intangibles
|
|
3,852
|
|
|
3,306
|
|
Other non-current assets
|
|
646
|
|
|
374
|
|
Net current assets held for sale
|
|
—
|
|
|
821
|
|
|
|
$
|
27,595
|
|
|
$
|
27,700
|
|
Financed By
|
|
|
|
|
|
Short-term debt (b)
|
|
$
|
207
|
|
|
$
|
939
|
|
Long-term debt, including current maturities (b)
|
|
6,866
|
|
|
5,843
|
|
Deferred liabilities
|
|
2,926
|
|
|
3,040
|
|
Temporary equity
|
|
40
|
|
|
—
|
|
Shareholders’ equity
|
|
17,556
|
|
|
17,878
|
|
|
|
$
|
27,595
|
|
|
$
|
27,700
|
|
(a)
|
|
Current assets (excluding cash and cash equivalents, short-term
marketable securities, and current assets held for sale) less
current liabilities (excluding short-term debt, current maturities
of long-term debt, and current liabilities held for sale).
|
|
(b)
|
|
Net debt is calculated as short-term debt plus long-term debt,
including current maturities less cash and cash equivalents and
short-term marketable securities.
|
|
|
|
|
|
Summary of Cash Flows
|
|
(unaudited)
|
|
|
|
|
|
|
|
Nine months ended
September 30
|
|
|
|
2016
|
|
2015
|
|
|
|
(in millions)
|
|
Operating Activities
|
|
|
|
|
|
Net earnings
|
|
$
|
862
|
|
|
$
|
1,129
|
|
|
Depreciation and amortization
|
|
678
|
|
|
658
|
|
|
Asset impairment charges
|
|
28
|
|
|
68
|
|
|
Gains on sales of assets/revaluations
|
|
(117
|
)
|
|
(139
|
)
|
|
Other - net
|
|
110
|
|
|
(229
|
)
|
|
Changes in operating assets and liabilities
|
|
(405
|
)
|
|
(389
|
)
|
|
Total Operating Activities
|
|
1,156
|
|
|
1,098
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
(621
|
)
|
|
(819
|
)
|
|
Net assets of businesses acquired
|
|
(136
|
)
|
|
(83
|
)
|
|
Proceeds from sale of business/assets
|
|
104
|
|
|
594
|
|
|
Marketable securities - net
|
|
35
|
|
|
122
|
|
|
Other investing activities
|
|
(613
|
)
|
|
(121
|
)
|
|
Total Investing Activities
|
|
(1,231
|
)
|
|
(307
|
)
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
Long-term debt borrowings
|
|
1,036
|
|
|
1,246
|
|
|
Long-term debt payments
|
|
(9
|
)
|
|
(965
|
)
|
|
Net borrowings (payments) under lines of credit
|
|
107
|
|
|
834
|
|
|
Purchases of treasury stock
|
|
(754
|
)
|
|
(1,788
|
)
|
|
Cash dividends
|
|
(528
|
)
|
|
(520
|
)
|
|
Other
|
|
14
|
|
|
23
|
|
|
Total Financing Activities
|
|
(134
|
)
|
|
(1,170
|
)
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
(209
|
)
|
|
(379
|
)
|
|
Cash and cash equivalents - beginning of period
|
|
910
|
|
|
1,099
|
|
|
Cash and cash equivalents - end of period
|
|
$
|
701
|
|
|
$
|
720
|
|
|
|
|
|
|
|
|
Segment Operating Analysis
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter ended
September 30
|
|
Nine months ended
September 30
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
(in ‘000s metric tons)
|
|
Processed volumes
|
|
|
|
|
|
|
|
|
|
Oilseeds Processing
|
|
8,388
|
|
|
8,148
|
|
|
25,137
|
|
|
25,435
|
|
Corn Processing
|
|
5,794
|
|
|
6,038
|
|
|
16,623
|
|
|
17,049
|
|
Total processed volumes
|
|
14,182
|
|
|
14,186
|
|
|
41,760
|
|
|
42,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
September 30
|
|
Nine months ended
September 30
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
(in millions)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Agricultural Services
|
|
$
|
6,960
|
|
|
$
|
6,603
|
|
|
$
|
19,827
|
|
|
$
|
21,653
|
|
Corn Processing
|
|
2,391
|
|
|
2,519
|
|
|
6,950
|
|
|
7,564
|
|
Oilseeds Processing
|
|
5,775
|
|
|
6,747
|
|
|
16,871
|
|
|
19,862
|
|
Wild Flavors and Specialty Ingredients
|
|
611
|
|
|
588
|
|
|
1,883
|
|
|
1,876
|
|
Other
|
|
95
|
|
|
108
|
|
|
314
|
|
|
302
|
|
Total revenues
|
|
$
|
15,832
|
|
|
$
|
16,565
|
|
|
$
|
45,845
|
|
|
$
|
51,257
|
|
|
|
|
|
|
Adjusted Earnings Per Share
|
|
A non-GAAP financial measure
|
|
(unaudited)
|
|
|
|
|
|
|
|
Quarter ended
September 30
|
|
Nine months ended
September 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
EPS (fully diluted) as reported
|
$
|
|
0.58
|
|
|
$
|
0.41
|
|
|
$
|
1.44
|
|
|
$
|
1.80
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
LIFO (credit) charge (a)
|
(0.09
|
)
|
|
(0.07
|
)
|
|
0.02
|
|
|
(0.01
|
)
|
|
Losses (Gains) on sales of assets/revaluations (b)
|
0.02
|
|
|
(0.04
|
)
|
|
(0.15
|
)
|
|
(0.15
|
)
|
|
Asset impairment, restructuring, and settlement charges (c)
|
0.08
|
|
|
0.10
|
|
|
0.10
|
|
|
0.14
|
|
|
Loss on debt extinguishment (d)
|
—
|
|
|
0.19
|
|
|
—
|
|
|
0.19
|
|
|
Effective tax rate adjustment (e)
|
—
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
Sub-total adjustments
|
0.01
|
|
|
0.19
|
|
|
(0.03
|
)
|
|
0.17
|
|
|
Adjusted earnings per share (non-GAAP)
|
$
|
|
0.59
|
|
|
$
|
0.60
|
|
|
$
|
1.41
|
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
|
|
|
Memo: Timing effects (gain) loss
|
|
|
|
|
|
|
|
|
Cocoa (f)
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
(0.02
|
)
|
|
Sub-total timing effects
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
(0.02
|
)
|
|
Adjusted EPS excluding timing effects (non-GAAP)
|
$
|
|
0.59
|
|
|
$
|
0.57
|
|
|
$
|
1.41
|
|
|
$
|
1.95
|
|
|
(a)
|
|
Current quarter and YTD changes in the Company’s LIFO reserves of
$85 million pretax ($53 million after tax), and $17 million pretax,
($11 million after tax), respectively, tax effected using the
Company’s U.S. effective income tax rate. Prior quarter and YTD
changes in the Company’s LIFO reserves of $75 million pretax ($47
million after tax) and $16 million pretax ($10 million after tax),
respectively, tax effected using the Company’s U.S. effective income
tax rate.
|
|
(b)
|
|
Current period loss of $9 million pretax ($9 million after tax),
related to a true-up adjustment of the Q2’16 gain on the sale of the
Company’s Brazilian sugar ethanol facilities and loss on sale of an
equity investment. Current period YTD gain of $109 million pretax
($92 million after tax), primarily related to recovery of loss
provisions and gain related to the sale of the Company’s Brazilian
sugar ethanol facilities, realized contingent consideration on the
sale of the Company’s equity investment in Gruma S.A. de C.V. in
December 2012, and revaluation of the remaining interest to
settlement value in conjunction with the acquisition of the
remaining interest in Amazon Flavors, partially offset by a $5
million pretax ($3 million after tax) loss on sale of assets and a
$5 million pretax loss on sale of an equity investment ($5 million
after tax), tax effected using the applicable tax rates. Prior
period gain of $32 million pretax ($22 million after tax), related
to the sale of the global chocolate business, tax effected using the
Company’s effective income tax rate. Prior period YTD gains of $133
million pretax ($93 million after tax) also include the revaluation
of the Company’s previously held investments in North Star Shipping
and Minmetal in conjunction with the acquisition of the remaining
interest, the sale of assets to the new Barcarena export terminal
joint venture in Brasil, and sale of the lactic business, tax
effected using the applicable tax rates.
|
|
(c)
|
|
Current quarter and YTD charges of $73 million pretax ($48 million
after tax) and $98 million pretax ($64 million after tax),
respectively, primarily related to legal fees and settlement,
impairment of certain long-lived assets and investments, and
restructuring charges, tax effected using the applicable tax rates.
Prior period charges and YTD charges of $65 million pretax ($61
million after tax) and $96 million pretax ($89 million after tax),
respectively, primarily related to impairment of certain long-lived
assets and pension settlement, tax effected using the applicable tax
rates.
|
|
(d)
|
|
Debt extinguishment charge of $189 million pretax ($118 million
after tax), related to cash tender offers of certain of the
Company’s outstanding debentures, tax effected using the Company’s
U.S. effective income tax rate.
|
|
(e)
|
|
Impact to EPS due to the change in annual effective tax rate.
|
|
(f)
|
|
Cocoa timing effects Q3’15 gains of $31 million pretax ($21 million
after tax); YTD’15 gains of $20 million pretax ($14 million after
tax), tax effected using the Company’s effective income tax rate.
|
Adjusted EPS and adjusted EPS excluding timing effects reflect ADM’s
fully diluted EPS after removal of the effect on EPS as reported of
certain specified items and timing effects as more fully described
above. Management believes that these are useful measures of ADM’s
performance because they provide investors additional information about
ADM’s operations allowing better evaluation of underlying business
performance and better period-to-period comparability. These non-GAAP
financial measures are not intended to replace or be an alternative to
EPS as reported, the most directly comparable GAAP financial measure, or
any other measures of operating results under GAAP. Earnings amounts
described above have been divided by the company’s diluted shares
outstanding for each respective quarter in order to arrive at an
adjusted EPS amount for each specified item and timing effect.
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Invested Capital
|
|
A non-GAAP financial measure
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted ROIC Earnings (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Four Quarters
|
|
|
|
Quarter Ended
|
|
Ended
|
|
|
|
Dec. 31, 2015
|
|
Mar. 31, 2016
|
|
June 30, 2016
|
|
Sep. 30, 2016
|
|
Sep. 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to ADM
|
|
$
|
718
|
|
|
$
|
230
|
|
|
$
|
284
|
|
|
$
|
341
|
|
|
$
|
1,573
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
73
|
|
|
70
|
|
|
65
|
|
|
78
|
|
|
286
|
|
|
LIFO
|
|
14
|
|
|
14
|
|
|
88
|
|
|
(85
|
)
|
|
31
|
|
|
Other adjustments
|
|
(226
|
)
|
|
13
|
|
|
(106
|
)
|
|
82
|
|
|
(237
|
)
|
|
Total adjustments
|
|
(139
|
)
|
|
97
|
|
|
47
|
|
|
75
|
|
|
80
|
|
|
Tax on adjustments
|
|
(135
|
)
|
|
(37
|
)
|
|
(43
|
)
|
|
(22
|
)
|
|
(237
|
)
|
|
Net adjustments
|
|
(274
|
)
|
|
60
|
|
|
4
|
|
|
53
|
|
|
(157
|
)
|
|
Total Adjusted ROIC Earnings
|
|
$
|
444
|
|
|
$
|
290
|
|
|
$
|
288
|
|
|
$
|
394
|
|
|
$
|
1,416
|
|
|
|
|
Adjusted Invested Capital (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Trailing Four
|
|
|
|
Dec. 31, 2015
|
|
Mar. 31, 2016
|
|
June 30, 2016
|
|
Sep. 30, 2016
|
|
Quarter Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity (1)
|
|
$
|
17,899
|
|
|
$
|
17,899
|
|
|
$
|
17,655
|
|
|
$
|
17,538
|
|
|
$
|
17,748
|
|
|
+ Interest-bearing liabilities (2)
|
|
5,877
|
|
|
6,646
|
|
|
7,386
|
|
|
7,073
|
|
|
6,746
|
|
|
+ LIFO adjustment (net of tax)
|
|
35
|
|
|
44
|
|
|
99
|
|
|
45
|
|
|
56
|
|
|
Other adjustments
|
|
(328
|
)
|
|
8
|
|
|
(91
|
)
|
|
57
|
|
|
(89
|
)
|
|
Total Adjusted Invested Capital
|
|
$
|
23,483
|
|
|
$
|
24,597
|
|
|
$
|
25,049
|
|
|
$
|
24,713
|
|
|
$
|
24,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Invested Capital
|
|
|
|
|
|
|
|
5.8
|
%
|
|
(1)
|
|
Excludes noncontrolling interests
|
|
(2)
|
|
Includes short-term debt, current maturities of long-term debt,
capital lease obligations, and long-term debt
|
Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested
capital. Adjusted ROIC earnings is ADM’s net earnings adjusted
for the after tax effects of interest expense, changes in the LIFO
reserve and other specified items. Adjusted invested capital is
the sum of ADM’s equity (excluding noncontrolling interests) and
interest-bearing liabilities adjusted for the after tax effect of the
LIFO reserve, and other specified items. Management believes
Adjusted ROIC is a useful financial measure because it provides
investors information about ADM’s returns excluding the impacts of LIFO
inventory reserves and other specified items and increases
period-to-period comparability of underlying business performance. Management
uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted
ROIC to its weighted average cost of capital (WACC). Adjusted
ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP
financial measures and are not intended to replace or be alternatives to
GAAP financial measures.
Archer Daniels Midland Company
Media Relations
Steve Schrier
312-634-8484
or
Investor Relations
Mark Schweitzer
217-451-8286