ADM Reports Third Quarter Earnings

Archer Daniels Midland Company (NYSE: ADM) today reported financial results for the quarter ended September 30, 2017.

“Our third quarter results were below our expectations, as the operating environment in our Ag Services and Oilseeds businesses was more challenging than anticipated,” said ADM Chairman and CEO Juan Luciano. “Through the quarter, we took several actions to be even more competitive in the future, including: restructuring our global workforce; reconfiguring the Peoria ethanol complex; working to complete several operational start-ups; driving additional asset monetizations; and further reducing costs through our Project Readiness initiative.

“As we move through the fourth quarter, we are starting to transition from a period of costs and investments in acquisitions, new innovation centers and new facilities, to a period of lower capital spending and increasing benefits from these investments.”

Third Quarter 2017 Highlights

• EPS as reported of $0.34 includes a $0.12 per share charge related to asset impairments and restructuring activities; a $0.02 per share net gain on the sale of assets and businesses; and a $0.01 per share loss on debt extinguishment. Adjusted EPS, which excludes these items, was $0.45.¹
• Trailing four-quarter-average adjusted ROIC was 6.4 percent,¹ 40 basis points above annual WACC of 6.0 percent.
• During the first nine months of 2017, the company returned $1.2 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 down compared with a strong prior-year period.

In Merchandising and Handling, results decreased in both North America Grain and Global Trade, largely due to the lack of competitiveness of U.S. corn and soybeans in global markets.

Transportation results decreased from the prior-year period, due to low U.S. exports of grain and a slower start to the North American harvest.

Milling and Other earnings were down due to decreased volumes, mainly in the U.S, while product margins remained steady.

Corn Processing was up year-over-year, delivering another strong quarter. North America Sweeteners and Starches experienced good margins. Bioproducts results increased, with better ethanol margins over the prior-year period.

Oilseeds Processing results were down compared to the third quarter of last year. Crushing and Origination results were impacted by compressed global crush margins and weak South America origination margins.

Refining, Packaging, Biodiesel and Other experienced lower earnings versus the third quarter of 2016, due primarily to weaker biodiesel results caused by lower margins and negative mark-to-market impacts.

Asia was up over the prior-year period on Wilmar results that were lower than anticipated, but still higher than last year’s.

WFSI results were down versus the prior-year quarter. WILD Flavors delivered double-digit operating profit growth with strong sales in Asia and EMEA. Specialty Ingredients was down for the quarter, due in part to higher costs caused by operational start-ups in certain businesses.

Other Items of Note

As additional information to help clarify underlying business performance, the tables on page 9 include reported EPS as well as adjusted EPS, and adjusted EPS excluding timing effects.

Segment operating profit of $485 million for the quarter includes charges of $63 million ($0.07 per share) related to asset impairment and restructuring charges, primarily related to the Peoria ethanol complex reconfiguration, and a net gain of $12 million ($0.02 per share) on the sale of assets and businesses.

In Corporate results, Minority Interest and Other charges include restructuring charges of $44 million ($0.05 per share) related to the reduction of certain positions within the company’s global workforce and a debt extinguishment charge of $11 million ($0.01 per share).

The 13 percent effective tax rate reflects a decrease from our forecasted annual tax rate range of 27 to 29 percent, due primarily to the effect of certain favorable discrete items, including return to provision and a favorable outcome of a prior-year tax position related to an acquisition, partially offset by changes in the forecasted geographic mix of pre-tax earnings. These discrete items are included in both reported and adjusted earnings per share.

Conference Call Information

ADM will host a webcast on October 31, 2017, 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.