Business Wire | Jan 26, 2021 07:00AM EST

ADM Reports Fourth Quarter Earnings of $1.22 per Share, $1.21 per Share on an Adjusted Basis, Affirms Earnings Growth Expectation for 2021

Jan. 26, 2021

CHICAGO--(BUSINESS WIRE)--Jan. 26, 2021--ADM (NYSE: ADM) today reported financial results for the quarter and fiscal year ended December 31, 2020.

"I want to thank our team, which performed exceptionally well during truly unprecedented times to deliver four straight quarters of year-over-year adjusted segment operating profit growth in 2020, along with solid returns and record full-year adjusted EPS of $3.59," said Chairman and CEO Juan Luciano. "Around the globe, ADM colleagues demonstrated their resourcefulness, creativity and commitment by keeping our work environment safe from COVID-19, maintaining our operations and serving our customers. The team delivered on our strategic objectives, maintained a solid balance sheet, managed a wide variety of risks superbly, and showed the strength of our diversified and global value chain.

"Our Ag Services and Oilseeds team delivered outstanding results in 2020, crossing the $2 billion profit mark by capitalizing on our unparalleled and flexible global footprint to meet strong demand. With continued strong global demand for grains and oilseeds as well as meal and oils, we are confident in another outstanding performance from Ag Services & Oilseeds in 2021.

"In Carbohydrate Solutions," Luciano continued, "the team achieved higher full-year results, demonstrating the power of our diversified product portfolio by pivoting quickly and effectively to meet incremental demand for industrial starches, retail flour and high-grade alcohol. The Carbohydrate Solutions business is well positioned to generate solid profit growth in 2021 as lockdown impacts dissipate.

"Our Nutrition business continued to harvest investments, lead in consumer growth trend areas, and partner with customers to deliver new products and solutions in 2020, driving 37 percent annual operating profit growth. Based on our current organic growth plans, we expect the Nutrition team to deliver solid revenue expansion and profit growth in 2021.

"For ADM, based on the continued delivery of drivers under our control and improving market conditions as the year progresses, we expect strong growth in segment operating profit and another record year of EPS in 2021. I am extremely proud of our team's performance: Our momentum is strong, and our future is bright."

Fourth Quarter 2020 Highlights

(Amounts in millions except per share amounts) 2020 2019

Earnings per share (as reported) $ 1.22 $ 0.90

Adjusted earnings per share^1 $ 1.21 $ 1.42



Segment operating profit $ 1,139 $ 934

Adjusted segment operating profit^1 $ 1,152 $ 1,028

Ag Services and Oilseeds 834 739

Carbohydrate Solutions 208 174

Nutrition 127 102

Other Business (17 ) 13

* Q4 2019 results included $270 million segment operating profit ($0.61 per share) impact of the retroactive biodiesel tax credit. * Q4 2020 EPS as reported of $1.22 includes a $0.03 per share charge related to asset impairment, restructuring and settlement; a $0.01 per share charge for acquisition-related expenses; a $0.01 per share credit related to gains on the sale of certain assets; and a $0.04 per share credit related to tax discrete items. Adjusted EPS, which excludes these items, was $1.21.1

Quarterly Results of Operations

Ag Services & Oilseeds achieved substantially higher results year over year, setting a Q4 record for adjusted operating profit.

* Ag Services results were significantly higher than the prior-year period, driven by great execution in North America, where the business capitalized on strong global demand, particularly from China, to deliver higher export volumes and margins. As expected, South American origination was lower year over year after significantly accelerated farmer selling in the first half of 2020. Global Trade contributed to the higher year-over-year results as it continued to utilize its global network and manage risk well to meet customer demand. As anticipated, negative timing impacts from the prior quarter reversed.

* Crushing delivered substantially higher results versus the prior-year period. The business captured significantly higher margins in all regions, driven by tight soybean supplies and strong global demand for both meal and vegetable oils. There was approximately $125 million in net negative timing in the quarter, driven by basis impacts and improving softseed margins.

* Refined Products and Other results were higher year over year absent the recognition of the retroactive biodiesel tax credit in Q4 of 2019, with good results driven primarily by solid South American margins.

* Equity earnings from Wilmar were higher versus the prior-year period.

1 Non-GAAP financial measures; see pages 5, 10, 11 and 13 for explanations and reconciliations, including after-tax amounts.

Carbohydrate Solutions results were higher than the fourth quarter of 2019.

* Starches and Sweeteners achieved significantly higher results versus the prior-year period, driven by lower net corn costs and intra-company insurance settlements. Earnings were partially offset by lower results from corn oil and wet mill ethanol margins.

* Vantage Corn Processors results were better versus the prior-year period, though they continued to reflect the challenged ethanol industry environment. The business delivered higher year-over-year margins as it met increased demand for USP-grade alcohol, partially offset by fixed costs from the two temporarily idled dry mills.

Nutrition delivered 24 percent year-over-year operating profit growth.

* Human Nutrition results were higher versus the prior-year quarter. Flavors delivered a strong quarter, driven by good sales and product mix in North America and EMEAI. Continued strength in plant proteins drove higher results in Specialty Ingredients. Health & Wellness delivered higher sales in probiotics and natural health and nutrition; prior-year results included revenue and income related to the launch of the strategic Spiber relationship. Results for the quarter also included an intra-company insurance settlement.

* Animal Nutrition results were significantly higher year over year, driven by strong performances in Asia and EMEAI and improvement in amino acid results, partially offset by currency effects in Latin America.

Other Business results were substantially lower, driven by lower ADM Investor Services earnings and Captive Insurance underwriting results, including intra-company settlements referenced above in Carbohydrate Solutions and Nutrition results.

Other Items of Note

As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.

Segment operating profit of $1.1 billion for the quarter includes charges related to asset impairment, restructuring, and settlement activities of $16 million ($0.02 per share) and gains on the sale of certain assets of $3 million ($0.00 per share).

In Corporate results, unallocated corporate costs for the quarter were higher year over year due primarily to increased variable performance-related compensation expense accruals, and increased IT and project-related expenses. Other charges decreased due to lower railroad maintenance expenses partially offset by the absence of prior year investment gains. Corporate results also included restructuring charges of $11 million ($0.01 per share).

The effective tax rate for the quarter was approximately 8 percent compared to a positive 1 percent in the prior year. The calendar year 2020 effective tax rate was approximately 5 percent, down from approximately 13 percent in 2019. The decrease for the calendar year was due primarily to changes in the geographic mix of earnings and the impact of U.S. tax credits, mainly the railroad tax credits, which have an offsetting expense in cost of products sold. Absent the effect of EPS adjusting items, the effective tax rate for calendar year 2020 was approximately 9 percent.

Note: Additional Facts and Explanations

Additional facts and explanations about results and industry environment can be found at the end of the ADM Q4 Earnings Presentation at www.adm.com/webcast.

Conference Call Information

ADM will host a webcast on January 26, 2021, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, 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 our comments and materials in this presentation constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements and materials 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 as a result of new information or future events.

About ADM

At ADM, we unlock the power of nature to provide access to nutrition worldwide. With industry-advancing innovations, a complete portfolio of ingredients and solutions to meet any taste, and a commitment to sustainability, we give customers an edge in solving the nutritional challenges of today and tomorrow. We're a global leader in human and animal nutrition and the world's premier agricultural origination and processing company. Our breadth, depth, insights, facilities and logistical expertise give us unparalleled capabilities to meet needs for food, beverages, health and wellness, and more. From the seed of the idea to the outcome of the solution, we enrich the quality of life the world over. Learn more at www.adm.com.

Source: Corporate Release

Segment Operating Profit, Adjusted Segment Operating Profit (a non-GAAPfinancial measure)

and Corporate Results

(unaudited)

Quarter ended Year ended

December 31 December 31

(In millions) 2020 2019 Change 2020 2019 Change



SegmentOperating $ 1,139 $ 934 $ 205 $ 3,455 $ 2,948 $ 507 Profit

Specified items:

(Gains) losseson sales of (3 ) - (3 ) (83 ) (12 ) (71 )assets and businesses

Impairment,restructuring, 16 94 (78 ) 76 146 (70 )and settlement charges

AdjustedSegment $ 1,152 $ 1,028 $ 124 $ 3,448 $ 3,082 $ 366 Operating Profit



Ag Services $ 834 $ 739 $ 95 $ 2,105 $ 1,935 $ 170 and Oilseeds

Ag Services 346 176 170 828 502 326

Crushing 217 87 130 466 580 (114 )

RefinedProducts and 153 363 (210 ) 439 586 (147 )Other

Wilmar 118 113 5 372 267 105



Carbohydrate $ 208 $ 174 $ 34 $ 717 $ 644 $ 73 Solutions

Starches and 229 206 23 762 753 9 Sweeteners

Vantage Corn (21 ) (32 ) 11 (45 ) (109 ) 64 Processors



Nutrition $ 127 $ 102 $ 25 $ 574 $ 418 $ 156

Human 90 83 7 462 376 86 Nutrition

Animal 37 19 18 112 42 70 Nutrition



Other Business $ (17 ) $ 13 $ (30 ) $ 52 $ 85 $ (33 )





SegmentOperating $ 1,139 $ 934 $ 205 $ 3,455 $ 2,948 $ 507 Profit



Corporate $ (383 ) $ (438 ) $ 55 $ (1,572 ) $ (1,360 ) $ (212 )Results



Interest (67 ) (72 ) 5 (313 ) (348 ) 35 expense - net

Unallocatedcorporate (278 ) (193 ) (85 ) (857 ) (647 ) (210 )costs

Other charges (29 ) (33 ) 4 (54 ) (51 ) (3 )

Specified items:

LIFO credit - (27 ) 27 91 (37 ) 128 (charge)

Gain (loss) ondebt 1 - 1 (409 ) - (409 )extinguishment

Expensesrelated to (4 ) (3 ) (1 ) (4 ) (17 ) 13 acquisitions

Loss on debtconversion (2 ) - (2 ) (17 ) - (17 )option

Gains (losses)on sales of 7 (101 ) 108 7 (101 ) 108 assets

Impairment,restructuring, (11 ) (9 ) (2 ) (16 ) (159 ) 143 and settlement charges

EarningsBefore Income $ 756 $ 496 $ 260 $ 1,883 $ 1,588 $ 295 Taxes

Segment operating profit is ADM's consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit, a non-GAAP financial measure, is segment operating profit excluding specified items. 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. 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 Year ended

December 31 December 31

2020 2019 2020 2019

(in millions, except per share amounts)



Revenues $ 17,978 $ 16,329 $ 64,355 $ 64,656

Cost of products sold ^(1) 16,626 15,160 59,902 60,509

Gross profit 1,352 1,169 4,453 4,147

Selling, general, andadministrative expenses ^ 749 654 2,687 2,493 (2)

Asset impairment, exit, and 19 103 80 303 restructuring costs ^(3)

Equity in (earnings) lossesof unconsolidated (176 ) (175 ) (579 ) (454 )affiliates

(Gain) loss on debt (1 ) - 409 - extinguishment^ (4)

Interest income (17 ) (50 ) (88 ) (192 )

Interest expense^ (5) 69 95 339 402

Other (income) expense - (47 ) 46 (278 ) 7 net ^(6,7)

Earnings before income 756 496 1,883 1,588 taxes

Income tax (benefit) 63 (3 ) 101 209 expense ^(8)

Net earnings including 693 499 1,782 1,379 noncontrolling interests



Less: Net earnings (losses)attributable to 6 (5 ) 10 - noncontrolling interests

Net earnings attributable $ 687 $ 504 $ 1,772 $ 1,379 to ADM



Diluted earnings per common $ 1.22 $ 0.90 $ 3.15 $ 2.44 share



Average diluted shares 563 563 563 565 outstanding



(1) Includes a charge (credit) related to changes in the Company's LIFO reserves of $(91) million in the current YTD and $27 and $37 million in the prior quarter and YTD, respectively. (2) Includes acquisition-related expenses of $4 million in the current quarter, acquisition-related expenses and a settlement charge totaling $8 million in the current YTD, and acquisition-related expenses of $3 million and $17 million in the prior quarter and YTD, respectively. (3) Includes charges related to impairment of certain assets and restructuring of $19 million and $80 million in the current quarter and YTD, respectively, and charges related to impairment of certain assets, restructuring, and pension settlement of $103 million and $303 million in the prior quarter and YTD, respectively. (4) Includes a (gain) loss on debt extinguishment of ($1 million) in the current quarter and $409 million in the current YTD primarily related to the early repurchase of certain of the Company's debentures. (5) Includes charges related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of $2 million and $17 million in the current quarter and YTD, respectively. Includes tax interest related to the sale of an equity investment of $12 million in the prior quarter and YTD. (6) Includes gains related to the sale of certain assets in the current quarter of $10 million in the current quarter, gains related to the sale of Wilmar shares and certain other assets of $90 million in the current YTD, a loss on sale of an equity investment of $101 million in the prior quarter and YTD, and gains related to the sale of certain assets and a step-up gain on an equity investment of $12 million in the prior YTD. (7) Includes a settlement charge of $8 million in the current quarter and YTD and $2 million in the prior YTD. (8) Includes the tax expense (benefit) impact of the above specified items and certain discrete items totaling $(25) million and $(94) million, in the current quarter and YTD, respectively, and $60 million and $3 million in the prior quarter and YTD, respectively.

Summary of Financial Condition

(unaudited)

December 31, December 31, 2020 2019

(in millions)

Net Investment In

Cash and cash equivalents (a) $ 666 $ 852

Short-term marketable securities (a) 1 -

Operating working capital (b) 10,481 7,970

Property, plant, and equipment 9,951 10,106

Investments in and advances to affiliates 4,913 5,132

Goodwill and other intangibles 5,413 5,476

Other non-current assets 2,156 1,936

$ 33,581 $ 31,472

Financed By

Short-term debt (a) $ 2,042 $ 1,202

Long-term debt, including current maturities (a) 7,887 7,679

Deferred liabilities 3,556 3,308

Temporary equity 74 58

Shareholders' equity 20,022 19,225

$ 33,581 $ 31,472

(a) Net debt is calculated as short-term debt plus long-term debt (includingcurrent maturities) less cash and cash equivalents and short-term marketablesecurities.

(b) Current assets (excluding cash and cash equivalents and short-termmarketable securities) less current liabilities (excluding short-term debt andcurrent maturities of long-term debt).

Summary of Cash Flows

(unaudited)

Year ended

December 31

2020 2019

(in millions)

Operating Activities

Net earnings $ 1,782 $ 1,379

Depreciation and amortization 976 993

Asset impairment charges 54 142

(Gains) losses on sales of assets (161 ) 39

Loss on debt extinguishment 409 -

Other - net 69 (267 )

Change in deferred consideration in securitized (4,603 ) (7,681 )receivables^(a)

Other changes in operating assets and liabilities (912 ) (57 )

Total Operating Activities (2,386 ) (5,452 )



Investing Activities

Purchases of property, plant and equipment (823 ) (828 )

Net assets of businesses acquired (15 ) (1,946 )

Proceeds from sale of business/assets 728 293

Investments in retained interest in securitized (2,121 ) (5,398 )receivables^(a)

Proceeds from retained interest in securitized 6,724 13,079 receivables^(a)

Marketable securities - net 4 77

Investments in and advances to affiliates (5 ) (13 )

Other investing activities (27 ) (5 )

Total Investing Activities 4,465 5,259



Financing Activities

Long-term debt borrowings 1,791 8

Long-term debt payments (2,136 ) (626 )

Net borrowings (payments) under lines of credit 837 919

Share repurchases (133 ) (150 )

Cash dividends (809 ) (789 )

Other 27 (22 )

Total Financing Activities (423 ) (660 )



Increase (decrease) in cash, cash equivalents, 1,656 (853 )restricted cash, and restricted cash equivalents

Cash, cash equivalents, restricted cash, and 2,990 3,843 restricted cash equivalents - beginning of period

Cash, cash equivalents, restricted cash, and $ 4,646 $ 2,990 restricted cash equivalents - end of period

(a) Cash flows related to the Company's retained interest in securitizedreceivables as required by ASU 2016-15 which took effect January 1, 2018.

Segment Operating Analysis

(unaudited)

Quarter ended Year ended

December 31 December 31

2020 2019 2020 2019

(in '000s metric tons)

Processed volumes (by commodity)

Oilseeds 9,329 9,269 36,565 36,271

Corn 4,168 5,782 17,885 22,079

Total processed volumes 13,497 15,051 54,450 58,350





Quarter ended Year ended

December 31 December 31

2020 2019 2020 2019

(in millions)

Revenues

Ag Services and Oilseeds $ 14,369 $ 12,359 $ 49,716 $ 48,741

Carbohydrate Solutions 2,078 2,477 8,472 9,886

Nutrition 1,441 1,414 5,800 5,677

Other Business 90 79 367 352

Total revenues $ 17,978 $ 16,329 $ 64,355 $ 64,656

Adjusted Earnings Per Share

A non-GAAP financial measure

(unaudited)

Quarter ended December 31 Year ended December 31

2020 2019 2020 2019

In Per share In Per In Per share In Per millions millions share millions millions share

Net earningsand fully $ 687 $ 1.22 $ 504 $ 0.90 $ 1,772 $ 3.15 $ 1,379 $ 2.44diluted EPS

Adjustments:

LIFO charge - - 20 0.04 (69 ) (0.12 ) 28 0.05(credit) (a)

Losses (gains)on sales of (8 ) (0.01 ) 133 0.24 (80 ) (0.14 ) 124 0.22assets and businesses (b)

Impairment,restructuring, 20 0.03 93 0.16 69 0.12 249 0.44and settlement charges (c)

Expensesrelated to 3 0.01 2 - 3 0.01 11 0.02acquisitions (d)

Loss (gain) ondebt (1 ) - - - 310 0.55 - -extinguishment (e)

Loss on debtconversion 2 - - - 17 0.03 - -option (f)

Tax adjustment (19 ) (0.04 ) 46 0.08 (3 ) (0.01 ) 39 0.07(g)

Sub-total (3 ) (0.01 ) 294 0.52 247 0.44 451 0.80adjustments

Adjusted netearnings and $ 684 $ 1.21 $ 798 $ 1.42 $ 2,019 $ 3.59 $ 1,830 $ 3.24adjusted EPS



* Current YTD changes in the Company's LIFO reserves of $(91) million pretax ($69 million after tax), tax effected using the Company's U.S. income tax rate. Prior quarter and YTD changes in the Company's LIFO reserves of $27 million and $37 million pretax, respectively ($20 million and $28 million after tax, respectively), tax effected using the Company's U.S. income tax rate. * Current quarter gains of $10 million pretax ($8 million after tax) related to the sale of certain assets and YTD gains of $90 million pretax ($80 million after tax), respectively, primarily related to the sale of Wilmar shares and certain other assets, tax effected using the applicable tax rates. Prior quarter and YTD loss of $101 million pretax ($133 million after tax) related to a loss on sale of an equity investment and prior YTD gains of $12 million pretax ($9 million after tax) related to the sale of certain assets and a step-up gain on an equity investment, tax effected using the applicable tax rates. * Current quarter and YTD charges of $27 million pretax ($20 million after tax) and $92 million pretax ($69 million after tax), respectively, related to the impairment of certain assets, restructuring, and settlement, tax effected using the applicable rates. Prior quarter and YTD charges of $103 million and $305 million pretax, respectively ($93 million and $249 million after tax, respectively), related to the impairment of certain assets, restructuring, and pension settlement, tax effected using the applicable tax rates. * Current quarter and YTD charges of $4 million pretax ($3 million after tax) related to a target acquisition, tax effected using the Company's U.S. income tax rate. Prior quarter and YTD acquisition expenses of $3 million pretax ($2 million after tax) and $17 million pretax ($11 million after tax), respectively, consisted of expenses primarily related to the Neovia acquisition, tax effected using the applicable tax rates. * Current quarter gain of $1 million pretax ($1 million after tax) related to the early repayment of certain debt, tax effected using the applicable tax rates. YTD loss on debt extinguishment of $409 million pretax ($310 million after tax), primarily related to the early repurchase of certain of the Company's debentures, tax effected using the applicable tax rates. * Current quarter and YTD loss on debt conversion option of $2 million pretax ($2 million after tax) and $17 million pretax ($17 million after tax), respectively, related to the mark-to-market adjustment of the conversion option of the exchangeable bonds issued in August 2020, tax effected using the applicable tax rate. * Tax adjustment due to certain discrete items totaling $(19) million and $(3) million in the current quarter and YTD, respectively, and $46 million and $39 million in the prior quarter and YTD, respectively. 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.

Adjusted Return on Invested Capital

A non-GAAP financial measure

(unaudited)

Adjusted ROIC Earnings (in millions)

Four Quarters

Quarter Ended Ended

Mar. 31, June 30, Sep 30, Dec. 31, Dec. 31, 2020 2020 2020 2020 2020



Net earnings $ 391 $ 469 $ 225 $ 687 $ 1,772 attributable to ADM

Adjustments:

Interest expense 83 87 100 69 339

LIFO (91 ) - - - (91 )

Other adjustments 48 8 355 1 412

Total adjustments 40 95 455 70 660

Tax on adjustments (7 ) (23 ) (120 ) (22 ) (172 )

Net adjustments 33 72 335 48 488

Total Adjusted ROIC $ 424 $ 541 $ 560 $ 735 $ 2,260 Earnings



Adjusted Invested Capital (in millions)

Quarter Ended

Trailing Four

Mar. 31, 2020

June 30, 2020

Sep 30, 2020

Dec. 31, 2020

Quarter Average

Equity (1)

$

18,952

$

19,293

$

19,322

$

20,000

$

19,392

+ Interest-bearing liabilities (2)

12,512

9,181

8,141

9,937

9,943

+ LIFO adjustment (net of tax)

-

-

-

-

-

Other adjustments

39

6

259

(5

)

75

Total Adjusted Invested Capital

$

31,503

$

28,480

$

27,722

$

29,932

$

29,410

Adjusted Return on Invested Capital

7.7

%

(1) Excludes noncontrolling interests(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt

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.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)A non-GAAP financial measure(unaudited)

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended December 31, 2020.

Adjusted Invested Capital (in millions)



Quarter Ended Trailing Four

Mar. 31, June 30, Sep 30, Dec. 31, Quarter 2020 2020 2020 2020 Average



Equity ^(1) $ 18,952 $ 19,293 $ 19,322 $ 20,000 $ 19,392

+ Interest-bearing 12,512 9,181 8,141 9,937 9,943 liabilities ^(2)

+ LIFO adjustment - - - - - (net of tax)

Other adjustments 39 6 259 (5 ) 75

Total Adjusted $ 31,503 $ 28,480 $ 27,722 $ 29,932 $ 29,410 Invested Capital





Adjusted Return on Invested 7.7 %Capital

(1) Excludes noncontrolling interests(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt

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.

Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)A non-GAAP financial measure(unaudited)

The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended December 31, 2020.

Four Quarters

Quarter Ended Ended

Mar. 31, June 30, Sep 30, Dec. 31, Dec. 31, 2020 2020 2020 2020 2020

(in millions)

Earnings before $ 375 $ 552 $ 200 $ 756 $ 1,883 income taxes

Interest expense 83 87 100 69 339

Depreciation and 245 244 238 249 976 amortization

LIFO charge (credit) (91 ) - - - (91 )

Losses (gains) onsales of assets and - (23 ) (57 ) (10 ) (90 )businesses

Asset impairment,restructuring, and 41 16 8 27 92 settlement charges

Railroad maintenance 73 - 28 37 138 expense

Loss (gain) on debt - 14 396 (1 ) 409 extinguishment

Expenses related to - - - 4 4 acquisitions

Adjusted EBITDA $ 726 $ 890 $ 913 $ 1,131 $ 3,660



Four Quarters

Quarter Ended Ended

Mar. 31, June 30, Sep 30, Dec. 31, Dec. 31, 2020 2020 2020 2020 2020

(in millions)

Ag Services and $ 514 $ 502 $ 527 $ 926 $ 2,469 Oilseeds

Carbohydrate 148 274 323 284 1,029 Solutions

Nutrition 199 217 201 185 802

Other Business 15 39 21 (14 ) 61

Corporate (150 ) (142 ) (159 ) (250 ) (701 )

Adjusted EBITDA $ 726 $ 890 $ 913 $ 1,131 $ 3,660



The tables below provide a reconciliation of earnings before income taxes to adjusted EBITDA and adjusted EBITDA by segment for the trailing four quarters ended December 31, 2019.

Four Quarters

Quarter Ended Ended

Mar. 31, Jun. 30, Sep. 30, Dec. 31, Dec. 31, 2019 2019 2019 2019 2019

(in millions)

Earnings before $ 315 $ 274 $ 503 $ 496 $ 1,588 income taxes

Interest expense 101 109 97 95 402

Depreciation and 245 248 249 251 993 amortization

LIFO charge (credit) 1 25 (16 ) 27 37

Losses (gains) onsales of assets and (12 ) - - 101 89 businesses

Asset impairment,restructuring, & 11 138 53 103 305 settlement charges

Railroad maintenance - - - 51 51 expenses

Expenses related to 14 - - 3 17 acquisitions

Adjusted EBITDA $ 675 $ 794 $ 886 $ 1,127 $ 3,482



Four Quarters

Quarter Ended Ended

Mar. 31, Jun. 30, Sep. 30, Dec. 31, Dec. 31, 2019 2019 2019 2019 2019

(in millions)

Ag Services and $ 510 $ 457 $ 511 $ 833 $ 2,311 Oilseeds

Carbohydrate 178 274 264 258 974 Solutions

Nutrition 134 173 175 160 642

Other Business 24 18 55 20 117

Corporate (171 ) (128 ) (119 ) (144 ) (562 )

Adjusted EBITDA $ 675 $ 794 $ 886 $ 1,127 $ 3,482



Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense and depreciation and amortization to earnings before income taxes. Management believes that adjusted EBITDA is a useful measure of the Company's performance because it provides investors additional information about the Company's operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to earnings before income taxes, the most directly comparable GAAP financial measure.

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