EX-99.1 2 adm-ex991_2018630xq2.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

a2015logoa04.jpg

ADM Reports Second Quarter Earnings of $1.00 per Share,
$1.02 per Share on an Adjusted Basis
•Net earnings of $566 million; adjusted earnings per share up 79 percent
•Strong execution, robust global demand drove excellent performance across the business

CHICAGO, July 31, 2018—Archer Daniels Midland Company (NYSE: ADM) today reported financial results for the quarter ended June 30, 2018.

“Our team executed exceptionally well to deliver outstanding results in the second quarter,” said ADM Chairman and CEO Juan Luciano.

“We continue to accelerate the execution of our strategic plan — optimizing our core, driving efficiencies, and expanding strategically — generating more than $150 million in run-rate savings, announcing three acquisitions in Nutrition, and closing on two new joint ventures overseas. Our actions, combined with robust global demand, position us to navigate today’s dynamic business environment and deliver strong results in the second half of 2018, and put us on a trajectory for continued future growth in earnings, returns and shareholder value.

“We are proud of the results we are delivering, committed to our continued improvement and growth, and confident about ADM’s future.”




Second Quarter 2018 Highlights
 
2018
 
2017
 
 
(Amounts in millions except per share data)
 
Earnings per share (as reported)
$
1.00

 
$
0.48

 
Adjusted earnings per share1
$
1.02

 
$
0.57

 
 
 
 
 
 
Segment operating profit
$
902

 
$
642

 
Adjusted segment operating profit1
$
924

 
$
658

 
   Origination
189

 
57

 
   Oilseeds
341

 
201

 
   Carbohydrate Solutions
249

 
279

 
   Nutrition
114

 
94

 
   Other
31

 
27

 

•
EPS as reported of $1.00 includes a $0.03 per share charge related to asset impairment and restructuring activities, a negative $0.01 per share tax adjustment related to U.S. tax reform and certain discrete items, and a positive $0.02 per share adjustment related to LIFO. Adjusted EPS, which excludes these items, was $1.02.1

    

1 Non-GAAP financial measures; see pages 4, 9 and 10 for explanations and reconciliations, including after-tax amounts.



Results of Operations
Origination results were up significantly over the second quarter of 2017.

Merchandising and Handling was up substantially year-over-year. North American Grain was a major contributor, as supply disruptions in Argentina and Brazil led to strong global demand for U.S. commodities, resulting in significantly higher volumes and margins for corn, wheat and soybean exports. Grain also benefited from solid risk management in basis positions, and from timing impacts from the first quarter. Global Trade’s diversified earnings base contributed positively to results, as losses related to the potential sorghum duty deposits were offset by strong performances in other areas, particularly ocean freight. Destination marketing volumes continued to grow in the quarter.

Transportation was significantly higher year-over-year, driven by increased volumes as U.S. waterways returned to more normal conditions. Transportation also benefited from ARTCO’s growing businesses in backhaul freight and stevedoring.

Oilseeds results were also up significantly over the prior-year period.

Crushing and Origination achieved a second-quarter record in crush volumes, delivering significantly higher year-over-year results amid continued strong soybean meal demand and robust crush margins. In South America, high origination volumes and improved margins, largely driven by more aggressive farmer selling and robust demand from China, contributed to strong results. Timing effects for the quarter were a net positive.

Refining, Packaging, Biodiesel and Other was up over the second quarter of 2017. Solid specialty and refined oils results were partially offset by weaker results in Golden Peanut and Tree Nuts.

Asia was lower on Wilmar results.

Carbohydrate Solutions results were modestly lower than the year-ago quarter.

Starches and Sweeteners was down versus the prior-year period. North American liquid sweeteners had a solid quarter and was in line with the year-ago period. Globally, starch volumes and dry sweetener margins were strong in the quarter, leading to good performances. The end of the EU sugar regime and the delay in the implementation of quotas in Turkey negatively impacted results in European liquid sweeteners. Flour milling was impacted by negative timing effects, and lower volumes in Caribbean operations.

Bioproducts results were down primarily on lower ethanol production volumes and higher costs due to plant downtime. Execution margins for ethanol were lower versus the prior year.

Nutrition delivered a 7 percent increase in revenue on a constant currency basis for the quarter, and earnings were significantly higher than the year-ago period.

WFSI results were up substantially versus the second quarter of 2017, with Specialty Ingredients, WILD Flavors and Health & Wellness all delivering improved sales and earnings. Specialty Ingredients benefited from improved volumes and margins in proteins, and from increased sales in fibers. In WILD Flavors, new business and an improved portfolio mix boosted sales and margins.

Animal Nutrition results were higher year-over-year, driven by stronger performances in lysine, as well as in pet premix and treats.

Other results increased on stronger ADM Investor Services earnings due to higher short-term interest rates.






Page 2

Other Items of Note
ADM made changes to its segment reporting in the first quarter of 2018 to reflect the company’s new operating structure. To assist in reconciling the new segment results to the prior presentation, the table on page 11 provides financial information under the historical segmentation.

As additional information to help clarify underlying business performance, the table on page nine includes reported earnings and EPS as well as adjusted earnings and EPS.

Segment operating profit of $902 million for the quarter includes charges of $22 million ($0.03 per share) related to asset impairment and restructuring.

In Corporate results, unallocated corporate costs for the quarter increased due to higher accruals for performance-related compensation based upon a more favorable outlook for the year.

Other charges for the quarter in Corporate improved due to better results in the company’s investment in Compagnie Industrielle et Financiere des Produits Amylaces SA (CIP), and lower pension expenses.

The effective tax rate for the quarter was approximately 13 percent, down from approximately 28 percent in the prior year, due mainly to U.S. tax reform, which reduced the federal income tax rate from 35 percent to 21 percent; the 2017 biodiesel tax credit recorded in the first quarter that impacts our overall calendar-year rate; and certain favorable second-quarter discrete tax items.
 
Conference Call Information
ADM will host a webcast on July 31, 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. 

Archer Daniels Midland Company

Media Relations                    Investor Relations
Jackie Anderson                    Victoria de la Huerga
312-634-8484                    312-634-8457


Financial Tables Follow


Page 3

Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP measure) and Corporate Results
(unaudited)
 
Quarter ended 
 June 30
 
 
Six months ended 
 June 30
 
(In millions)
2018
2017
Change
 
2018
2017
Change
 
 
 
 
 
 
 
 
Segment Operating Profit
$
902

$
642

$
260

 
$
1,606

$
1,318

$
288

Specified items:
 
 
 
 
 
 
 
(Gains) losses on sales of assets and businesses
—

(8
)
8

 
—

(8
)
8

Impairment and restructuring charges
22

26

(4
)
 
35

35

—

Hedge timing effects
—

(2
)
2

 
—

(9
)
9

Adjusted Segment Operating Profit
$
924

$
658

$
266


$
1,641

$
1,336

$
305

 
 
 
 
 
 
 
 
Origination
$
189

$
57

$
132

 
$
234

$
104

$
130

Merchandising and handling
158

46

112

 
200

69

131

Transportation
31

11

20

 
34

35

(1
)
 
 
 
 
 
 
 
 
Oilseeds
$
341

$
201

$
140

 
$
691

$
514

$
177

Crushing and origination
204

35

169

 
272

156

116

Refining, packaging, biodiesel, and other
85

81

4

 
258

138

120

Asia
52

85

(33
)
 
161

220

(59
)
 
 
 
 
 
 
 
 
Carbohydrate Solutions
$
249

$
279

$
(30
)
 
$
462

$
490

$
(28
)
Starches and sweeteners
238

253

(15
)
 
454

454

—

Bioproducts
11

26

(15
)
 
8

36

(28
)
 
 
 
 
 
 
 
 
Nutrition
$
114

$
94

$
20

 
$
210

$
171

$
39

WFSI
106

91

15

 
179

164

15

Animal Nutrition
8

3

5

 
31

7

24

 
 
 
 
 
 




Other
$
31

$
27

$
4

 
$
44

$
57

$
(13
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Operating Profit
$
902

$
642

$
260

 
$
1,606

$
1,318

$
288

 
 
 
 
 
 
 
 
Corporate Results
$
(250
)
$
(259
)
$
9

 
$
(490
)
$
(477
)
$
(13
)
 
 
 
 
 
 
 
 
Interest expense - net
(73
)
(81
)
8

 
(156
)
(160
)
4

Unallocated corporate costs
(180
)
(125
)
(55
)
 
(326
)
(250
)
(76
)
Other charges
(8
)
(42
)
34

 
(24
)
(68
)
44

Specified items:
 
 
 
 
 
 
 
LIFO credit (charge)
13

(9
)
22

 
21

4

17

Restructuring charges
(2
)
(2
)
—

 
(5
)
(3
)
(2
)
Earnings Before Income Taxes
$
652

$
383

$
269

 
$
1,116

$
841

$
275


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.

Page 4


Consolidated Statements of Earnings
(unaudited)

 
Quarter ended 
 June 30
 
Six months ended 
 June 30
 
2018
 
2017
 
2018
 
2017
 
(in millions, except per share amounts)
 
 
 
 
 
 
 
 
Revenues
$
17,068

 
$
14,943

 
$
32,594

 
$
29,931

Cost of products sold (1)
15,887

 
14,051

 
30,524

 
28,167

Gross profit
1,181

 
892

 
2,070

 
1,764

Selling, general, and administrative expenses (2)
560

 
525

 
1,073

 
1,041

Asset impairment, exit, and restructuring costs (3)
24

 
23

 
40

 
33

Equity in (earnings) losses of unconsolidated affiliates
(100
)
 
(109
)
 
(247
)
 
(281
)
Interest income
(42
)
 
(25
)
 
(75
)
 
(48
)
Interest expense
89

 
86

 
180

 
167

Other (income) expense - net (4)
(2
)
 
9

 
(17
)
 
11

Earnings before income taxes
652

 
383

 
1,116

 
841

Income tax expense (5)
(86
)
 
(108
)
 
(154
)
 
(226
)
Net earnings including noncontrolling interests
566

 
275

 
962

 
615

 
 
 
 
 
 
 
 
Less:  Net earnings (losses) attributable to noncontrolling interests
—

 
(1
)
 
3

 
—

Net earnings attributable to ADM
$
566

 
$
276

 
$
959

 
$
615

 
 
 
 
 
 
 
 
Diluted earnings per common share
$
1.00

 
$
0.48

 
$
1.70

 
$
1.07

 
 
 
 
 
 
 
 
Average number of shares outstanding
567

 
574

 
566

 
576

 
 
 
 
 
 
 
 

(1) Includes a charge (credit) related to changes in the Company’s LIFO reserves of ($13 million) and ($21 million) in the current quarter and YTD, respectively, and $9 million and ($4 million) in the prior quarter and YTD, respectively.

(2) Includes a settlement charge of $5 million in the prior quarter and YTD.

(3) Includes charges related to impairment of certain assets and restructuring charges of $24 million and $40 million in the current quarter and YTD, respectively, and $23 million and $33 million, in the prior quarter and YTD, respectively.

(4) Includes a (gain) loss in the prior quarter and YTD related to the sale of the crop risk services business of ($77 million) partially offset by an adjustment of the proceeds of the 2015 sale of the cocoa business of $69 million.

(5) Includes the tax expense (benefit) impact of the above specified items and tax discrete items totaling $2 million and ($14 million) in the current quarter and YTD, respectively, and $20 million and $27 million in the prior quarter and YTD, respectively.


Page 5


Summary of Financial Condition
(Unaudited)
 
 
 
June 30, 
 2018
 
June 30, 
 2017
 
 
(in millions)
Net Investment In
 
 
 
 
Cash and cash equivalents (a)
 
$
851

 
$
433

Short-term marketable securities (a)
 
2

 
237

Operating working capital (b)
 
7,718

 
7,034

Property, plant, and equipment
 
9,948

 
9,945

Investments in and advances to affiliates
 
5,355

 
4,856

Long-term marketable securities
 
33

 
199

Goodwill and other intangibles
 
3,834

 
3,866

Other non-current assets
 
938

 
750

 
 
$
28,679

 
$
27,320

Financed By
 
 

 
 

Short-term debt (b)
 
$
1,047

 
$
353

Long-term debt, including current maturities (b)
 
6,576

 
6,627

Deferred liabilities
 
2,291

 
2,895

Temporary equity
 
53

 
27

Shareholders’ equity
 
18,712

 
17,418

 
 
$
28,679

 
$
27,320



(a)
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.
(b)
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).


Page 6


Summary of Cash Flows
(unaudited)
 
 
 
Six months ended 
 June 30
 
 
2018
 
2017
 
 
(in millions)
Operating Activities
 
 
 
 
Net earnings
 
$
962

 
$
615

Depreciation and amortization
 
474

 
452

Asset impairment charges
 
33

 
19

Gains on sales of assets
 
(12
)
 
(51
)
Other - net
 
(319
)
 
(35
)
Change in deferred consideration in securitized receivables(a)
 
(4,107
)
 
(4,093
)
Other changes in operating assets and liabilities
 
(210
)
 
1,013

Total Operating Activities
 
(3,179
)
 
(2,080
)
 
 
 
 
 
Investing Activities
 
 

 
 

Purchases of property, plant and equipment
 
(379
)
 
(452
)
Net assets of businesses acquired
 
—

 
(180
)
Proceeds from sale of business/assets
 
26

 
149

Investments in retained interest in securitized receivables(a)
 
(2,184
)
 
(1,931
)
Proceeds from retained interest in securitized receivables(a)
 
6,212

 
5,845

Marketable securities - net
 
(2
)
 
106

Investments in and advances to affiliates
 
(132
)
 
(186
)
Other investing activities
 
7

 
(3
)
Total Investing Activities
 
3,548

 
3,348

 
 
 
 
 
Financing Activities
 
 

 
 

Long-term debt borrowings
 
—

 
17

Long-term debt payments
 
(6
)
 
(269
)
Net borrowings (payments) under lines of credit
 
196

 
195

Share repurchases
 
—

 
(511
)
Cash dividends
 
(379
)
 
(364
)
Other
 
13

 
(7
)
Total Financing Activities
 
(176
)
 
(939
)
 
 
 
 
 
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents
 
193

 
329

Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period
 
1,858

 
1,561

Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period
 
$
2,051

 
$
1,890


(a) Cash flows related to the Company’s retained interest in securitized receivables as required by ASU 2016-15 which took effect January 1, 2018. Prior period amounts have been restated to conform to the current presentation.

Page 7


Segment Operating Analysis
(unaudited)


 
 
Quarter ended 
 June 30
 
Six months ended 
 June 30
 
 
2018
 
2017
 
2018
 
2017
 
 
(in ‘000s metric tons)
Processed volumes (by commodity)
 
 
 
 
 
 
 
 
Oilseeds
 
9,075

 
8,518

 
18,122

 
17,337

Corn
 
5,518

 
5,840

 
11,109

 
11,384

Total processed volumes
 
14,593

 
14,358

 
29,231

 
28,721

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended 
 June 30
 
Six months ended 
 June 30
 
 
2018
 
2017
 
2018
 
2017
 
 
(in millions)
Revenues
 
 

 
 

 
 

 
 

Origination
 
$
6,606

 
$
5,347

 
$
12,821

 
$
11,650

Oilseeds
 
6,675

 
6,011

 
12,308

 
11,237

Carbohydrate Solutions
 
2,668

 
2,551

 
5,290

 
5,061

Nutrition
 
1,018

 
933

 
1,968

 
1,788

Other
 
101

 
101

 
207

 
195

Total revenues
 
$
17,068

 
$
14,943

 
$
32,594

 
$
29,931




Page 8


Adjusted Earnings Per Share
A non-GAAP financial measure
(unaudited)
 
Quarter ended 
 June 30
 
Six months ended 
 June 30
 
2018
2017
 
2018
2017
 
In millions
Per share
In millions
Per share
 
In millions
Per share
In millions
Per share
Net earnings and fully diluted EPS
$
566

$
1.00

$
276

$
0.48

 
$
959

$
1.70

$
615

$
1.07

Adjustments:
 
 

 
 

 
 

 
 

 
LIFO charge (credit) (a)
(10
)
(0.02
)
6

0.01

 
(16
)
(0.03
)
(2
)
—

Losses (gains) on sales of assets and businesses (b)
—

—

22

0.04

 
—

—

22

0.04

Asset impairment, restructuring, and settlement charges (c)
16

0.03

21

0.04

 
28

0.05

29

0.05

Tax adjustment (d)
7

0.01

—

—

 
(7
)
(0.02
)
4

0.01

Sub-total adjustments
13

0.02

49

0.09

 
5

—

53

0.10

Adjusted net earnings and adjusted EPS
$
579

$
1.02

$
325

$
0.57

 
$
964

$
1.70

$
668

$
1.17

 
 
 
 
 
 
 
 
 
 

(a)
Current quarter and YTD changes in the Company’s LIFO reserves of $13 million and $21 million pretax, respectively ($10 million and $16 million after tax, respectively), tax effected using the Company’s U.S. income tax rate. Prior quarter and YTD changes in the Company’s LIFO reserves of $9 million and $4 million pretax, respectively ($6 million and $2 million after tax, respectively), tax effected using the Company’s U.S. income tax rate.
(b)
Prior quarter and YTD gain of $8 million pretax ($22 million loss after tax) 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.
(c)
Current quarter and YTD charges of $24 million and $40 million pretax, respectively ($16 million and $28 million after tax, respectively) related primarily to the impairment of a long-term financing receivable and restructuring charges, tax effected using the applicable tax rates. Prior quarter and YTD charges of $28 million and $38 million pretax, respectively ($21 million and $29 million after tax, respectively) related to impairment of certain long-lived assets, restructuring charges, and a settlement charge, tax effected using the applicable tax rates.
(d)
Tax adjustment due to changes in the provisional tax amount related to the enactment of the Tax Cuts and Jobs Act and certain discrete items totaling $7 million in the current quarter and $7 million YTD and a discrete tax adjustment of $4 million in the prior period.


Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described above. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described above. Management believes that Adjusted net earnings and Adjusted EPS 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 alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, 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.



















Page 9









Adjusted Return on Invested Capital
A non-GAAP financial measure
(unaudited)
Adjusted ROIC Earnings (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Four Quarters
 
Quarter Ended
 
Ended
 
Sep. 30, 2017
 
Dec. 31, 2017
 
Mar. 31, 2018
 
June 30, 2018
 
June 30, 2018
 
 
 
 
 
 
 
 
 
 
Net earnings attributable to ADM
$
192

 
$
788

 
$
393

 
$
566

 
$
1,939

Adjustments:
 
 
 
 
 
 
 
 
 
   Interest expense
79

 
84

 
91

 
89

 
343

   LIFO
—

 
2

 
(8
)
 
(13
)
 
(19
)
   Other adjustments (3)
106

 
(303
)
 
2

 
31

 
(164
)
      Total adjustments
185

 
(217
)
 
85

 
107

 
160

   Tax on adjustments
(70
)
 
(55
)
 
(24
)
 
(26
)
 
(175
)
      Net adjustments
115

 
(272
)
 
61

 
81

 
(15
)
Total Adjusted ROIC Earnings
$
307

 
$
516

 
$
454

 
$
647

 
$
1,924

 
 
 
 
 
 
 
 
 
 

Adjusted Invested Capital (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Trailing Four
 
Sep. 30, 2017
 
Dec. 31, 2017
 
Mar. 31, 2018
 
June 30, 2018
 
Quarter Average
 
 
 
 
 
 
 
 
 
 
Equity (1)
$
17,570

 
$
18,313

 
$
18,732

 
$
18,710

 
$
18,331

+ Interest-bearing liabilities (2)
7,336

 
7,493

 
9,000

 
7,630

 
7,865

+ LIFO adjustment (net of tax)
44

 
46

 
49

 
39

 
45

Other adjustments (3)
66

 
(326
)
 
(2
)
 
23

 
(60
)
Total Adjusted Invested Capital
$
25,016

 
$
25,526

 
$
27,779

 
$
26,402

 
$
26,181

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Return on Invested Capital
 
 
 
 
 
 
 
7.3
%

(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.

Page 10


Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAP measure) as Currently Reported vs Previous Segments
(unaudited)
 
 
 
 
Three Months Ended 
 June 30, 2018
 
Six Months Ended 
 June 30, 2018
As Currently Reported
 
Pro Forma
As Currently Reported
Pro Forma
 
As Currently Reported
Pro Forma
 
 
 
(In millions)
 
 
 
Segment Operating Profit
 
Segment Operating Profit
$
902

$
902

 
$
1,606

$
1,606

Specified items:
 
Specified items:
 
 
 
 
 
Impairment and restructuring charges
 
Impairment and restructuring charges
22

22

 
35

35

Adjusted Segment Operating Profit
 
Adjusted Segment Operating Profit
$
924

$
924

 
$
1,641

$
1,641

 
 
 
 
 
 
 
 
Origination
 
Agricultural Services
$
189

$
230

 
$
234

$
319

Merchandising and handling
 
Merchandising and handling
158

151

 
200

191

Transportation
 
Transportation
31

31

 
34

34

 
 
Milling and Other
—

48

 
—

94

 
 
 
 
 
 
 
 
Oilseeds
 
Oilseeds
$
341

$
344

 
$
691

$
696

Crushing and origination
 
Crushing and origination
204

208

 
272

275

Refining, packaging, biodiesel, & other
 
Refining, packaging, biodiesel, & other
85

86

 
258

261

Asia
 
Asia
52

50

 
161

160

 
 
 
 
 
 
 
 
Carbohydrate Solutions
 
Corn Processing
$
249

$
213

 
$
462

$
403

Starches and sweeteners
 
Sweeteners and Starches
238

195

 
454

367

Bioproducts
 
Bioproducts
11

18

 
8

36

 
 
 
 
 
 
 
 
Nutrition
 
Wild Flavors & Specialty Ingredients
$
114

$
106

 
$
210

$
179

WFSI
 
Wild Flavors & Specialty Ingredients
106

106

 
179

179

Animal Nutrition
 
 
8

—

 
31

—

 
 
 
 
 
 
 
 
Other
 
Other
$
31

$
31

 
$
44

$
44



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.


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