- Net earnings of $788 million, including favorable U.S. tax reform impacts
- 2017 annual ROIC of 6.4 percent, above WACC of 6.0 percent
Archer Daniels Midland Company (NYSE: ADM) today reported financial
results for the quarter ended December 31, 2017.
“We ended 2017 with a solid fourth quarter. We pulled the levers under
our control—including cost and capital initiatives and interventions
throughout the year—to deliver value for shareholders,” said ADM
Chairman and CEO Juan Luciano. “I am also proud that our more than
31,000 colleagues delivered the best quarterly employee safety record in
ADM’s history.”
“For 2017 as a whole, we grew earnings per share, improved returns on
invested capital and generated positive EVA. Looking ahead, we expect
improving results through 2018 as our strategy advances. Our increasing
international presence, and expanding capabilities in areas such as
destination marketing, food and beverage innovation, and health and
wellness, all help to position ADM for continued growth and value
creation.”
|
|
|
|
|
|
|
|
Fourth Quarter 2017 Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
(Amounts in millions except per share data)
|
Earnings per share (as reported)
|
|
|
|
|
$
|
1.39
|
|
|
$
|
0.73
|
Adjusted earnings per share
1
|
|
|
|
|
$
|
0.82
|
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
Segment operating profit
|
|
|
|
|
$
|
733
|
|
|
$
|
806
|
Adjusted segment operating profit
1
|
|
|
|
|
$
|
793
|
|
|
$
|
827
|
Agricultural Services
|
|
|
|
|
301
|
|
|
245
|
Corn Processing
|
|
|
|
|
261
|
|
|
255
|
Oilseeds Processing
|
|
|
|
|
202
|
|
|
239
|
WFSI
|
|
|
|
|
56
|
|
|
38
|
Other
|
|
|
|
|
(27
|
)
|
|
50
|
-
EPS as reported of $1.39 includes a $0.08 per share charge related to
asset impairments and restructuring activities and a positive $0.65
per share net tax adjustment primarily related to U.S. tax reform.
Adjusted EPS, which excludes these items, was $0.82.1
-
During 2017, the company returned $1.5 billion to shareholders through
dividends and share repurchases.
1 Non-GAAP financial measures; see pages 4, 9 and 10 for
explanations and reconciliations, including after-tax amounts.
Results of Operations
Ag Services results were up over the prior-year period.
Merchandising and Handling earnings increased year-over-year. The lack
of competitiveness of U.S. grain exports was offset by solid performance
in Global Trade, strong destination marketing gains, and insurance and
other income.
Transportation results decreased from the prior-year period, due to
lower barge loadings and freight values.
Milling and Other earnings were down year-over-year due to lower volumes
and margins.
Corn Processing results increased over the prior-year fourth quarter.
Sweeteners and Starches had another strong quarter, with solid earnings
growth over the prior year in both North America and EMEA. Lower
year-over-year results in Bioproducts due to lower ethanol margins were
partially mitigated by favorable risk management.
Oilseeds Processing results were down compared to the fourth quarter of
last year. Crushing and Origination results were lower due to weak crush
margins, despite strong crush volumes and continued growth in demand.
Origination results in South America were impacted by weak margins.
Refining, Packaging, Biodiesel and Other experienced lower earnings
versus the fourth quarter of 2016, due primarily to weaker biodiesel
margins, partially offset by strong refining and packaging results.
Asia was up slightly over the prior-year period on Wilmar results.
WFSI results were solid, up versus the prior-year quarter. WILD Flavors
delivered double-digit operating profit growth with strong sales across
all regions. Specialty Ingredients results were up versus a challenging
year-ago period.
Other results decreased due to unfavorable underwriting performance from
the company’s captive insurance operations compared to favorable
underwriting income in the prior year period.
Other Items of Note
As additional information to help clarify underlying business
performance, the table on page 9 includes reported EPS as well as
adjusted EPS.
Segment operating profit of $733 million for the quarter includes
charges of $62 million ($0.07 per share) related to a settlement charge
and asset impairment and restructuring charges.
In Corporate results, unallocated corporate costs for the quarter
decreased due to lower employee costs and the absence of certain costs
incurred last year. Minority Interest and Other charges for the quarter
include several individually insignificant restructuring charges
totaling $7 million ($0.01 per share) compared to last year’s U.S. OPEB
curtailment gain of $38 million ($0.04 per share) and restructuring
charges of $3 million.
Income tax expense for the quarter decreased $379 million ($0.67 per
share) due to the estimated effects of U.S. tax reform. Excluding the
effects of U.S. tax reform, the Company’s effective tax rate would have
been 24 percent for the quarter and year.
Conference Call Information
ADM will host a webcast on February 6, 2018, at 8 a.m. Central Time to
discuss financial results and provide a company update. A financial
summary slide presentation will be available to download approximately
60 minutes prior to the call. To listen to the webcast or to download
the slide presentation, go to
www.adm.com/webcast
.
A replay of the webcast will also be available for an extended period of
time at
www.adm.com/webcast
.
Forward-Looking Statements
Some of the above statements constitute forward-looking statements.
These statements are based on many assumptions and factors that are
subject to risk and uncertainties. ADM has provided additional
information in its reports on file with the SEC concerning assumptions
and factors that could cause actual results to differ materially from
those in this presentation, and you should carefully review the
assumptions and factors in our SEC reports. To the extent permitted
under applicable law, ADM assumes no obligation to update any
forward-looking statements.
About ADM
For more than a century, the people of Archer Daniels Midland Company
(NYSE: ADM) have transformed crops into products that serve the vital
needs of a growing world. Today, we’re one of the world’s largest
agricultural processors and food ingredient providers, with
approximately 31,000 employees serving customers in more than 170
countries. With a global value chain that includes approximately 500
crop procurement locations, 270 ingredient manufacturing facilities, 44
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, Adjusted Segment Operating Profit (a
non-GAAP measure) and Corporate Results
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31
|
|
|
|
|
|
Year ended December 31
|
|
|
(In millions)
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit
|
|
|
$
|
733
|
|
|
$
|
806
|
|
|
$
|
(73
|
)
|
|
|
|
$
|
2,536
|
|
|
$
|
2,704
|
|
|
$
|
(168
|
)
|
Less specified items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gains) losses on sales of assets and businesses
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
|
|
(22
|
)
|
|
(114
|
)
|
|
92
|
|
Impairment, restructuring, and settlement charges
|
|
|
62
|
|
|
16
|
|
|
46
|
|
|
|
|
160
|
|
|
32
|
|
|
128
|
|
Hedge timing effects
|
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|
|
|
(4
|
)
|
|
1
|
|
|
(5
|
)
|
Adjusted Segment Operating Profit
|
|
|
$
|
793
|
|
|
$
|
827
|
|
|
$
|
(34
|
)
|
|
|
|
$
|
2,670
|
|
|
$
|
2,623
|
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural Services
|
|
|
$
|
301
|
|
|
$
|
245
|
|
|
$
|
56
|
|
|
|
|
$
|
585
|
|
|
$
|
573
|
|
|
$
|
12
|
|
Merchandising and handling
|
|
|
221
|
|
|
126
|
|
|
95
|
|
|
|
|
300
|
|
|
228
|
|
|
72
|
|
Milling and other
|
|
|
43
|
|
|
62
|
|
|
(19
|
)
|
|
|
|
199
|
|
|
226
|
|
|
(27
|
)
|
Transportation
|
|
|
37
|
|
|
57
|
|
|
(20
|
)
|
|
|
|
86
|
|
|
119
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corn Processing
|
|
|
$
|
261
|
|
|
$
|
255
|
|
|
$
|
6
|
|
|
|
|
$
|
909
|
|
|
$
|
761
|
|
|
$
|
148
|
|
Sweeteners and starches
|
|
|
185
|
|
|
156
|
|
|
29
|
|
|
|
|
746
|
|
|
655
|
|
|
91
|
|
Bioproducts
|
|
|
76
|
|
|
99
|
|
|
(23
|
)
|
|
|
|
163
|
|
|
106
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oilseeds Processing
|
|
|
$
|
202
|
|
|
$
|
239
|
|
|
$
|
(37
|
)
|
|
|
|
$
|
841
|
|
|
$
|
880
|
|
|
$
|
(39
|
)
|
Crushing and origination
|
|
|
44
|
|
|
55
|
|
|
(11
|
)
|
|
|
|
241
|
|
|
386
|
|
|
(145
|
)
|
Refining, packaging, biodiesel, and other
|
|
|
64
|
|
|
93
|
|
|
(29
|
)
|
|
|
|
272
|
|
|
344
|
|
|
(72
|
)
|
Asia
|
|
|
94
|
|
|
91
|
|
|
3
|
|
|
|
|
328
|
|
|
150
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wild Flavors & Specialty Ingredients (WFSI)
|
|
|
$
|
56
|
|
|
$
|
38
|
|
|
$
|
18
|
|
|
|
|
$
|
284
|
|
|
$
|
275
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
$
|
(27
|
)
|
|
$
|
50
|
|
|
$
|
(77
|
)
|
|
|
|
$
|
51
|
|
|
$
|
134
|
|
|
$
|
(83
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit
|
|
|
$
|
733
|
|
|
$
|
806
|
|
|
$
|
(73
|
)
|
|
|
|
$
|
2,536
|
|
|
$
|
2,704
|
|
|
$
|
(168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Results
|
|
|
$
|
(190
|
)
|
|
$
|
(177
|
)
|
|
$
|
(13
|
)
|
|
|
|
$
|
(927
|
)
|
|
$
|
(882
|
)
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit (charge)
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
|
|
2
|
|
|
(19
|
)
|
|
21
|
|
Interest expense - net
|
|
|
(78
|
)
|
|
(77
|
)
|
|
(1
|
)
|
|
|
|
(310
|
)
|
|
(282
|
)
|
|
(28
|
)
|
Unallocated corporate costs
|
|
|
(94
|
)
|
|
(132
|
)
|
|
38
|
|
|
|
|
(470
|
)
|
|
(457
|
)
|
|
(13
|
)
|
Minority interest and other charges
|
|
|
(16
|
)
|
|
34
|
|
|
(50
|
)
|
|
|
|
(149
|
)
|
|
(124
|
)
|
|
(25
|
)
|
Earnings Before Income Taxes
|
|
|
$
|
543
|
|
|
$
|
629
|
|
|
$
|
(86
|
)
|
|
|
|
$
|
1,609
|
|
|
$
|
1,822
|
|
|
$
|
(213
|
)
|
Segment operating profit is ADM’s consolidated income from
operations before income tax excluding corporate items. Adjusted
segment operating profit, a non-GAAP measure, is segment operating
profit excluding specified items and timing effects. Timing effects
relate to hedge ineffectiveness and 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 not measures of
consolidated operating results under U.S. GAAP and should not be
considered alternatives to income before income taxes, the most
directly comparable GAAP financial measure, or any other measure of
consolidated operating results under U.S. GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Earnings
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31
|
|
Year ended December 31
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
16,070
|
|
|
$
|
16,501
|
|
|
$
|
60,828
|
|
|
$
|
62,346
|
|
Cost of products sold
|
|
|
15,131
|
|
|
15,490
|
|
|
57,322
|
|
|
58,727
|
|
Gross profit
|
|
|
939
|
|
|
1,011
|
|
|
3,506
|
|
|
3,619
|
|
Selling, general, and administrative expenses
|
|
|
463
|
|
|
455
|
|
|
1,993
|
|
|
1,980
|
|
Asset impairment, exit, and restructuring costs
|
|
|
33
|
|
|
19
|
|
|
173
|
|
|
55
|
|
Equity in (earnings) losses of unconsolidated affiliates
|
|
|
(129
|
)
|
|
(139
|
)
|
|
(456
|
)
|
|
(292
|
)
|
Interest income
|
|
|
(31
|
)
|
|
(24
|
)
|
|
(106
|
)
|
|
(92
|
)
|
Interest expense
|
|
|
84
|
|
|
80
|
|
|
330
|
|
|
293
|
|
Other (income) expense - net
|
|
|
(24
|
)
|
|
(9
|
)
|
|
(37
|
)
|
|
(147
|
)
|
Earnings before income taxes
|
|
|
543
|
|
|
629
|
|
|
1,609
|
|
|
1,822
|
|
Income tax benefit (expense)
|
|
|
249
|
|
|
(203
|
)
|
|
(7
|
)
|
|
(534
|
)
|
Net earnings including noncontrolling interests
|
|
|
792
|
|
|
426
|
|
|
1,602
|
|
|
1,288
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net earnings (losses) attributable to noncontrolling interests
|
|
|
4
|
|
|
2
|
|
|
7
|
|
|
9
|
|
Net earnings attributable to ADM
|
|
|
$
|
788
|
|
|
$
|
424
|
|
|
$
|
1,595
|
|
|
$
|
1,279
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
|
$
|
1.39
|
|
|
$
|
0.73
|
|
|
$
|
2.79
|
|
|
$
|
2.16
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shares outstanding
|
|
|
565
|
|
|
583
|
|
|
572
|
|
|
591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense - net consists of:
|
|
|
|
|
|
|
|
|
|
(Gains) losses on sales of assets (a)
|
|
|
$
|
(14
|
)
|
|
$
|
(13
|
)
|
|
$
|
(80
|
)
|
|
$
|
(130
|
)
|
Loss on debt extinguishment (b)
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
Other - net (c)
|
|
|
(10
|
)
|
|
4
|
|
|
32
|
|
|
(17
|
)
|
|
|
|
$
|
(24
|
)
|
|
$
|
(9
|
)
|
|
$
|
(37
|
)
|
|
$
|
(147
|
)
|
(a) Current quarter gains include gains related to individually
insignificant disposals in Ag Services, Corn, Oilseeds, and WFSI.
Current year gains include gains related to the sale of the crop
risk services business in Other and other individually insignificant
disposals in all business segments and Corporate partially offset by
an adjustment of the proceeds of the 2015 sale of the cocoa business
in Oilseeds. Prior quarter gains related to individually
insignificant disposals in Ag Services, Corn, Oilseeds, and Other.
Prior year gains include gains related to realized contingent
consideration from the sale of the Company’s equity investment in
Gruma S.A.B de C.V. partially offset by a loss on sale of assets in
Ag Services, finalization of the gain on sale of the Company’s
Brazilian sugar ethanol facilities in Corn, revaluation of the
remaining interest to settlement value in conjunction with the
acquisition of the remaining interest in Amazon Flavors in WFSI, a
loss on sale of an equity investment in Corporate, and other
individually insignificant disposals in Ag Services, Corn, Oilseeds,
and Other.
|
|
(b) Current year charge related to the early redemption of the $559
million notes due on March 15, 2018.
|
|
(c) Other - net in the current quarter includes miscellaneous income
partially offset by provisions for contingent losses related to
settlement items in Oilseeds and foreign exchange losses. Other -
net in the current year includes provisions for contingent losses
related to certain settlement items in Oilseeds and WFSI and foreign
exchange losses partially offset by miscellaneous income. Other -
net in the prior quarter includes foreign exchange losses and other
expenses. Other - net in the prior year includes miscellaneous
income partially offset by foreign exchange losses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Financial Condition
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
|
(in millions)
|
Net Investment In
|
|
|
|
|
|
|
|
Cash and cash equivalents (b)
|
|
|
|
|
$
|
804
|
|
|
$
|
619
|
Short-term marketable securities (b)
|
|
|
|
|
—
|
|
|
296
|
Operating working capital (a)
|
|
|
|
|
7,421
|
|
|
7,384
|
Property, plant, and equipment
|
|
|
|
|
10,138
|
|
|
9,758
|
Investments in and advances to affiliates
|
|
|
|
|
5,088
|
|
|
4,497
|
Long-term marketable securities
|
|
|
|
|
92
|
|
|
187
|
Goodwill and other intangibles
|
|
|
|
|
3,918
|
|
|
3,703
|
Other non-current assets
|
|
|
|
|
802
|
|
|
579
|
|
|
|
|
|
$
|
28,263
|
|
|
$
|
27,023
|
Financed By
|
|
|
|
|
|
|
|
Short-term debt (b)
|
|
|
|
|
$
|
857
|
|
|
$
|
154
|
Long-term debt, including current maturities (b)
|
|
|
|
|
6,636
|
|
|
6,777
|
Deferred liabilities
|
|
|
|
|
2,395
|
|
|
2,887
|
Temporary equity
|
|
|
|
|
53
|
|
|
24
|
Shareholders’ equity
|
|
|
|
|
18,322
|
|
|
17,181
|
|
|
|
|
|
$
|
28,263
|
|
|
$
|
27,023
|
(a)
|
|
Current assets (excluding cash and cash equivalents and short-term
marketable securities) less current liabilities (excluding
short-term debt and current maturities of long-term debt).
|
(b)
|
|
Net debt is calculated as short-term debt plus long-term debt,
including current maturities less cash and cash equivalents and
short-term marketable securities.
|
|
|
|
|
|
|
|
|
|
|
Summary of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
(in millions)
|
Operating Activities
|
|
|
|
|
|
|
Net earnings
|
|
|
|
$
|
1,602
|
|
|
$
|
1,288
|
|
Depreciation and amortization
|
|
|
|
924
|
|
|
900
|
|
Asset impairment charges
|
|
|
|
101
|
|
|
34
|
|
Gains on sales of assets
|
|
|
|
(80
|
)
|
|
(130
|
)
|
Other - net
|
|
|
|
(652
|
)
|
|
(32
|
)
|
Changes in operating assets and liabilities
|
|
|
|
316
|
|
|
(505
|
)
|
Total Operating Activities
|
|
|
|
2,211
|
|
|
1,555
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(1,049
|
)
|
|
(882
|
)
|
Net assets of businesses acquired
|
|
|
|
(187
|
)
|
|
(130
|
)
|
Proceeds from sale of business/assets
|
|
|
|
195
|
|
|
195
|
|
Marketable securities - net
|
|
|
|
447
|
|
|
258
|
|
Other investing activities
|
|
|
|
(292
|
)
|
|
(652
|
)
|
Total Investing Activities
|
|
|
|
(886
|
)
|
|
(1,211
|
)
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
Long-term debt borrowings
|
|
|
|
532
|
|
|
1,041
|
|
Long-term debt payments
|
|
|
|
(846
|
)
|
|
(14
|
)
|
Net borrowings (payments) under lines of credit
|
|
|
|
685
|
|
|
61
|
|
Share repurchases
|
|
|
|
(750
|
)
|
|
(1,000
|
)
|
Cash dividends
|
|
|
|
(730
|
)
|
|
(701
|
)
|
Other
|
|
|
|
81
|
|
|
34
|
|
Total Financing Activities
|
|
|
|
(1,028
|
)
|
|
(579
|
)
|
|
|
|
|
|
|
|
Increase (decrease) in cash, cash equivalents, restricted cash,
and restricted cash equivalents
|
|
|
|
297
|
|
|
(235
|
)
|
Cash, cash equivalents, restricted cash, and restricted cash
equivalents - beginning of period
|
|
|
|
1,561
|
|
|
1,796
|
|
Cash, cash equivalents, restricted cash, and restricted cash
equivalents - end of period
|
|
|
|
$
|
1,858
|
|
|
$
|
1,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Analysis
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31
|
|
Year ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
(in ‘000s metric tons)
|
Processed volumes
|
|
|
|
|
|
|
|
|
|
|
Oilseeds Processing
|
|
|
|
9,131
|
|
|
8,651
|
|
|
34,733
|
|
|
33,788
|
Corn Processing
|
|
|
|
5,849
|
|
|
5,650
|
|
|
22,700
|
|
|
22,273
|
Total processed volumes
|
|
|
|
14,980
|
|
|
14,301
|
|
|
57,433
|
|
|
56,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31
|
|
Year ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
(in millions)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Agricultural Services
|
|
|
|
$
|
7,517
|
|
|
$
|
8,066
|
|
|
$
|
26,246
|
|
|
$
|
27,893
|
Corn Processing
|
|
|
|
2,509
|
|
|
2,516
|
|
|
9,352
|
|
|
9,466
|
Oilseeds Processing
|
|
|
|
5,424
|
|
|
5,281
|
|
|
22,530
|
|
|
22,152
|
Wild Flavors and Specialty Ingredients
|
|
|
|
526
|
|
|
544
|
|
|
2,313
|
|
|
2,427
|
Other
|
|
|
|
94
|
|
|
94
|
|
|
387
|
|
|
408
|
Total revenues
|
|
|
|
$
|
16,070
|
|
|
$
|
16,501
|
|
|
$
|
60,828
|
|
|
$
|
62,346
|
|
|
|
|
|
|
Adjusted Earnings Per Share
A non-GAAP financial measure
(unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31
|
|
Year ended December 31
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EPS (fully diluted) as reported
|
|
|
$
|
1.39
|
|
|
$
|
0.73
|
|
|
$
|
2.79
|
|
|
$
|
2.16
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
LIFO charge (credit) (a)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
(Gains) losses on sales of assets and businesses (b)
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
(0.15
|
)
|
Asset impairment, restructuring, and settlement charges (c)
|
|
|
0.08
|
|
|
0.03
|
|
|
0.25
|
|
|
0.13
|
|
Loss on debt extinguishment (d)
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Post-retirement benefit adjustment (e)
|
|
|
—
|
|
|
(0.04
|
)
|
|
—
|
|
|
(0.04
|
)
|
Tax adjustments (f)
|
|
|
(0.65
|
)
|
|
0.03
|
|
|
(0.64
|
)
|
|
0.04
|
|
Sub-total adjustments
|
|
|
(0.57
|
)
|
|
0.02
|
|
|
(0.36
|
)
|
|
—
|
|
Adjusted earnings per share
|
|
|
$
|
0.82
|
|
|
$
|
0.75
|
|
|
$
|
2.43
|
|
|
$
|
2.16
|
|
(a)
|
|
Current quarter and year to date changes in the Company’s LIFO
reserves of $2 million pretax ($1 million after tax) and $2 million
pretax ($1 million after tax), respectively, tax effected using the
Company’s U.S. income tax rate. Prior quarter and year to date
changes in the Company’s LIFO reserves of $2 million pretax ($1
million after tax), and $19 million pretax, ($12 million after tax),
respectively, tax effected using the Company’s U.S. income tax rate.
|
(b)
|
|
Current year to date gain of $22 million pretax ($10 million loss
after tax) primarily related to the sale of the crop risk services
business partially offset by an adjustment of the proceeds of the
2015 sale of the cocoa business, tax effected using the applicable
tax rates. Prior year to date 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 loss on sale of assets and a
loss on sale of an equity investment, tax effected using the
applicable tax rates.
|
(c)
|
|
Current quarter charges of $69 million pretax ($46 million after
tax) primarily consisted of a settlement charge and several
individually insignificant asset impairments and restructuring
charges, tax effected using the applicable tax rates. Current year
to date charges of $214 million pretax ($144 million after tax)
primarily consisted of the reconfiguration of the Company’s Peoria,
Illinois ethanol complex, restructuring charges related to the
reduction of certain positions within the Company’s global
workforce, settlement charges, and several individually
insignificant asset impairments and restructuring charges, tax
effected using the applicable tax rates. Prior quarter charges of
$19 million pretax ($13 million after tax) related to impairment of
certain long-lived assets and restructuring charges, tax effected
using the applicable tax rates. Prior year to date charges of $117
million pretax ($77 million after tax), primarily related to legal
fees and settlement, impairment of certain long-lived assets and
investments, and restructuring charges, tax effected using the
applicable tax rates.
|
(d)
|
|
Debt extinguishment charge of $11 million pretax ($7 million after
tax) related to the early redemption of the Company’s $559 million
notes due on March 15, 2018.
|
(e)
|
|
U.S. retiree medical benefit curtailment gain of $38 million pretax
($24 million after tax), tax effected using the Company’s U.S.
effective income tax rate.
|
(f)
|
|
Tax adjustments related to the enactment of the Tax Cuts and Jobs
Act totaling $379 million in the current quarter and year to date
and certain out of period discrete items consisting of valuation
allowances, deferred tax re-rates, and changes in assertion totaling
$9 million and $13 million in the current quarter and year to date,
respectively. Certain out of period discrete tax adjustments
totaling $21 million and $24 million, related to valuation
allowances, deferred tax re-rates, and changes in assertion in the
prior quarter and year to date, respectively.
|
|
Adjusted EPS reflects ADM’s fully diluted EPS after removal of the
effect on EPS as reported of certain specified items as more fully
described above. Management believes that Adjusted EPS is a useful
measure of ADM’s performance because it provides investors
additional information about ADM’s operations allowing better
evaluation of underlying business performance and better
period-to-period comparability. This non-GAAP financial measure is
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 period in order to arrive at an adjusted EPS
amount for each specified item.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Invested Capital
A non-GAAP financial measure
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted ROIC Earnings (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Four Quarters
|
|
|
|
Quarter Ended
|
|
Ended
|
|
|
|
Mar. 31, 2017
|
|
June 30, 2017
|
|
Sep. 30, 2017
|
|
Dec. 31, 2017
|
|
Dec. 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to ADM
|
|
|
$
|
339
|
|
|
$
|
276
|
|
|
$
|
192
|
|
|
$
|
788
|
|
|
$
|
1,595
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
81
|
|
|
86
|
|
|
79
|
|
|
84
|
|
|
330
|
|
LIFO
|
|
|
(13
|
)
|
|
9
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
Other adjustments (3)
|
|
|
14
|
|
|
20
|
|
|
106
|
|
|
(303
|
)
|
|
(163
|
)
|
Total adjustments
|
|
|
82
|
|
|
115
|
|
|
185
|
|
|
(217
|
)
|
|
165
|
|
Tax on adjustments
|
|
|
(28
|
)
|
|
(13
|
)
|
|
(70
|
)
|
|
(55
|
)
|
|
(166
|
)
|
Net adjustments
|
|
|
54
|
|
|
102
|
|
|
115
|
|
|
(272
|
)
|
|
(1
|
)
|
Total Adjusted ROIC Earnings
|
|
|
$
|
393
|
|
|
$
|
378
|
|
|
$
|
307
|
|
|
$
|
516
|
|
|
$
|
1,594
|
|
Adjusted Invested Capital (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Trailing Four
|
|
|
Mar. 31, 2017
|
|
June 30, 2017
|
|
Sep. 30, 2017
|
|
Dec. 31, 2017
|
|
Quarter Average
|
|
|
|
|
|
|
|
|
|
|
|
Equity (1)
|
|
$
|
17,121
|
|
|
$
|
17,411
|
|
|
$
|
17,570
|
|
|
$
|
18,313
|
|
|
$
|
17,604
|
|
+ Interest-bearing liabilities (2)
|
|
7,207
|
|
|
6,980
|
|
|
7,336
|
|
|
7,493
|
|
|
7,254
|
|
+ LIFO adjustment (net of tax)
|
|
39
|
|
|
44
|
|
|
44
|
|
|
46
|
|
|
43
|
|
Other adjustments (3)
|
|
12
|
|
|
43
|
|
|
66
|
|
|
(326
|
)
|
|
(51
|
)
|
Total Adjusted Invested Capital
|
|
$
|
24,379
|
|
|
$
|
24,478
|
|
|
$
|
25,016
|
|
|
$
|
25,526
|
|
|
$
|
24,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Return on Invested Capital
|
|
|
|
|
|
|
|
6.4
|
%
|
(1)
Excludes noncontrolling interests
|
(2)
Includes short-term debt, current
maturities of long-term debt, capital lease obligations, and
long-term debt
|
(3)
Includes the impact of U.S. tax reform
|
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
Colin McBean
312-634-8484
or
Investor Relations
Mark Schweitzer
217-451-8286