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ADM updates investors on accounting investigation

CEO assures no impact on consolidated earnings, commits to enhanced financial controls amidst ongoing SEC and DOJ investigations.

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Archer-Daniels-Midland Company (ADM) detailed the ongoing internal investigation concerning its accounting practices, particularly in the Nutrition reporting segment. This inquiry, initiated in January 2024, focuses on the accuracy of intersegment sales reporting.

Chairman and CEO Juan Luciano emphasized ADM's dedication to compliance and integrity in financial reporting, noting that the investigation hasn't affected the company's consolidated earnings. He highlighted a remediation plan to address the material weakness identified in ADM's financial statement reliability regarding intersegment sales pricing and reporting.

The investigation revealed discrepancies in how some intersegment sales between the Nutrition segment and the Ag Services and Oilseeds and Carbohydrate Solutions segments were recorded. These adjustments, although significant within the segments, do not impact ADM's overall financial statements.

ADM's Annual Report on Form 10-K includes a detailed remediation plan to strengthen internal controls over financial reporting. This move underscores the company's commitment to transparent and accurate financial practices.

Additionally, ADM is cooperating with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) in their investigations into these matters.

Financial Performance Highlights:

  • Q4 2023 GAAP earnings per share: $1.06; GAAP segment operating profit: $1,235 million.
  • Adjusted segment operating profit for Q4 2023: $1,399 million, a 16% decrease from the previous year.
  • Full-year GAAP earnings per share: $6.43; GAAP segment operating profit: $5,900 million.
  • Full-year adjusted segment operating profit: $6,244 million, down 6% from the prior year.

Factors affecting ADM's financial performance include lower crush and origination margins, decreased equity earnings, and unplanned downtime at the Decatur complex. Despite these challenges, improvements in manufacturing costs and positive market timing impacts offered some offsetting benefits.

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