ADM Reports Fourth Quarter Earnings

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.”

• 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.