Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying Consolidated Financial Statements, which can be found in Part II. Item 8. Financial Statements and Supplementary Data.
This MD&A generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II. Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 20, 2025.
Company Overview
Archer-Daniels-Midland Company and its subsidiaries (the "Company" or "ADM") unlocks the power of nature to enrich the quality of life. The Company is an essential global agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. ADM is also a premier human and animal nutrition provider, as well as a leader in health and well-being products.
Reportable Segments
The Company’s operations are organized, managed, and classified into three reportable segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified within either Corporate or Other Business. See Part II. Item 8. Financial Statements and Supplementary Data. Note 17. Segment and Geographic Information for further information on the nature of our business and our reportable segments.
2025 Strategy
The Company’s goal is to continue to build and sustain long-term value for its shareholders and customers. The Company has established the following priorities to help achieve its goal:
• Focus on execution and cost management – ADM seeks to prioritize operational excellence and drive targeted cost reductions through: (1) boosting plant efficiencies; (2) optimizing operating leverage within the Nutrition segment; and (3) reducing third party spend and selling, general, and administrative expenses.
• Strategic simplification – ADM seeks to enhance returns on invested capital by executing a pipeline of simplification opportunities to optimize our portfolio and organizational structure, including: (1) addressing performance, demand, and capacity challenges; (2) reducing capital expenditures that do not meet the Company’s return objectives; and (3) reducing capability overlaps through synergies, closures, and divestitures.
• Targeted growth investment – ADM seeks to prioritize organic investment in key strategic initiatives, while also ensuring our businesses are ready for the future, including: (1) plant modernization investments; (2) cost optimization investments; and (3) enterprise system and process enhancements.
• Deploy capital with discipline – ADM seeks to prudently invest in opportunities while continuing to return value to shareholders through dividends.
The successful execution of the above priorities is expected to afford ADM the ability to continue investing in future growth that creates value over the long-term. ADM is investing in several key areas such as enhanced nutrition, biotics, biosolutions, precision fermentation, and decarbonization. Each of these development pathways has a different growth profile and timeline for value creation, and each complements our core business and presents the potential for compelling, enduring returns.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ADM has refined its digital strategy and has pivoted away from large global implementations and toward prioritizing regional, more agile projects. The Company is accelerating its data journey while continuing to invest in cybersecurity and network and application resilience. As a result of this strategy refinement, during the year ended December 31, 2025, the Company recognized an impairment charge of $179 million related to previously capitalized internal-use software. See Part II. Item 8. Financial Statements and Supplementary Data. Note 18. Asset Impairment, Exit, and Restructuring Costs for further information.
Sustainability
For more than 120 years, ADM has built its business on the strength of agriculture, innovation, and responsible stewardship. Today, sustainability is a core driver of ADM’s growth strategy, powering innovation, improving resilience, and unlocking new value across the global food system. The crops that ADM turns into an expansive array of products depend on healthy soil, water and air, and as the Company looks to the future, it is advancing efforts that enable and support agriculture and farmers, drive innovation and long-term value, and protect and strengthen vital supply chains.
ADM is focused on scaling regenerative practices in partnership with farmers, supporting them with tools, insights, and financial incentives to help their operations thrive. ADM is innovating to meet growing demand for sustainably sourced, bio-based products, creating new market opportunities for farmers whose crops deliver health, transparency, and environmental benefits. The Company is modernizing its own operations to improve efficiency, enhance competitiveness, reduce emissions, and help build a more resilient supply chain.
Targeted Actions to Deliver Cost Savings
On February 4, 2025, the Company announced targeted actions expected to deliver in excess of a $500 million of cumulative cost savings in the next 3 to 5 years. These include cost optimization and portfolio simplification initiatives designed to help the Company achieve cost efficiencies. See Note 18. Asset Impairment, Exit, and Restructuring Costs of “Notes to Consolidated Financial Statements” included in Part II. Item 8. Financial Statements and Supplementary Data for additional information regarding restructuring related charges.
Recent Significant Portfolio Actions
ADM’s recent significant portfolio actions and announcements included:
• The acquisition in January 2025 of Vandamme Hugaria Kft, a 700 metric ton/day non-genetically modified crush and extraction facility based in Hungary. See Note 3. Acquisitions of “Notes to Consolidated Financial Statements” included in Item 1. Consolidated Financial Statements for further information.
• The closure of the Tres Corações facility based in Brazil, in July 2025. Preparation for the closure resulted in exit and restructuring costs, including impairment of certain assets.
• The launch in September 2025 of a joint venture, Plainsman Company, with PYCO Industries, Inc., a leader in the local agricultural communities it serves, combining its and ADM’s Lubbock, Texas, cottonseed processing capabilities.
• Entered into a definitive agreement in September 2025 with Alltech Inc., a global leader in agriculture, to launch a North American animal feed joint venture to offer an industry-leading range of products and solutions for livestock, equine, backyard and leisure animals.
• Entered into a definitive agreement in December 2025 with Planters Cotton Oil Mill, Inc. (Planters), a premier cottonseed processor, to launch a new cottonseed joint venture. Planters is expected to contribute its crush plant in Pine Bluff, Arkansas, as well as additional origination and storage facilities located in the region, to the joint venture. ADM plans to contribute its Memphis, Tennessee, cottonseed facility. ADM expects to continue operating its Memphis oil refinery as part of the joint venture, while its crushing operations at the Memphis facility are expected to end.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Performance Indicators
The Company is exposed to certain risks inherent to an agricultural-based commodity business. These risks are further described in Part I. Item 1A. Risk Factors in this Annual Report on Form 10-K.
The Company’s Ag Services and Oilseeds and Carbohydrate Solutions segments are principally agricultural commodity-based businesses where changes in selling prices move in relationship to changes in prices of the commodity-based agricultural raw materials. As a result, changes in agricultural commodity prices have relatively equal impacts on both revenues and cost of products sold.
The Company's Nutrition segment primarily utilizes agricultural commodities (or products derived from agricultural commodities) as raw materials. However, in these operations, agricultural commodity market price changes do not necessarily strongly correlate to changes in cost of products sold. As a result, changes in revenues may correspond to changes in margins.
The Company has consolidated subsidiaries in 75 countries. For the majority of the Company’s subsidiaries located outside the United States, the local currency is the functional currency except for certain significant subsidiaries in Switzerland where Euro is the functional currency, and Brazil and Argentina where U.S. dollar is the functional currency. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at the average exchange rates for the applicable periods. For the majority of the Company’s business activities in Brazil and Argentina, the functional currency is the U.S. dollar; however, certain transactions, including taxes, occur in local currency and require remeasurement to the functional currency. Changes in revenues are expected to be correlated to changes in expenses reported by the Company caused by fluctuations in the exchange rates of foreign currencies, primarily the Euro, British pound, Canadian dollar, and Brazilian real, as compared to the U.S. dollar.
The Company measures its performance using key financial metrics including net earnings, adjusted diluted earnings per share (EPS), margins, segment operating profit, total segment operating profit, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation, and amortization (EBITDA), and adjusted EBITDA. Some of these metrics are not defined by generally accepted accounting principles in the United States (GAAP) and should be considered in addition to, and not in lieu of, GAAP financial measures. For more information, see the “ Non-GAAP Financial Measures ” section below.
The Company’s financial results can vary significantly due to changes in factors such as fluctuations in energy prices, weather conditions, crop plantings, government programs and policies, trade policies, changes in global demand, general global economic conditions, changes in standards of living, global production of similar and competitive crops, and geopolitical developments. Due to the unpredictable nature of these and other factors, the Company undertakes no responsibility for updating any forward-looking information contained within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Market Factors Influencing Operations and Results in the Twelve Months Ended December 31, 2025
The Company is subject to a variety of market factors which affect the Company’s operations and results, including those discussed below related to 2025.
In the Ag Services and Oilseeds segment, increased global supplies of grains and oilseeds, higher projected ending stocks-to-use ratios, the deferral of U.S. biofuel policy, the evolving global trade landscape, and logistical and weather challenges resulted in compressed margins. The Ag Services subsegment in North America was impacted by global trade policy uncertainty, though it benefited from the partial return of soybean exports in the fourth quarter of the current year from North America to China. Further, low water levels slowed execution pace; South America Origination was negatively impacted by slower corn farmer selling, and the Black Sea business was negatively impacted by farmer retention and logistical issues due to the Russia-Ukraine conflict escalations. In the Crushing and the Refined Products and Other (RPO) subsegments, the postponement of the implementation of European Union Deforestation Regulation and the deferral of U.S. biofuel and trade policy evolution negatively impacted sales volumes and margins.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In the Carbohydrate Solutions segment, solid domestic and export demand for ethanol, along with lower industry production, helped improve imbalances between production and domestic demand. For the Starches and Sweeteners subsegment, North America saw demand softness in the sweeteners, paper, and corrugated markets. Europe, the Middle East, and Africa (EMEA) was impacted by higher corn costs and increased competition.
In the Nutrition segment, the Human Nutrition subsegment continued to see growth trends in the Flavors market, as high value categories such as energy drinks and ready to drink beverages continued to perform strongly. Similarly, the Dietary Supplements market continued to grow in line with historical rates and shows expansion opportunities as customer acceptance of postbiotics (heat-stable version of probiotics) allows sales in a larger variety of segments (food and beverage). While tariffs and inflation continue to pose challenges to the Human Nutrition subsegment, clean label and healthier categories are outpacing the broader industry. In the Animal Nutrition subsegment, declining commodity prices continued to support feed ration commodities as well as additive markets, while localized volume softness impacted demand.
Processed volumes by product for the years ended December 31, 2025 and 2024 were as follows (in metric tons):
(In thousands)
Change
Oilseeds
Corn
The Company generally operates its production facilities, on an overall basis, at or near capacity, adjusting facilities individually, as needed, to react to the current margin environment and seasonal local supply and demand conditions. The increase in processed oilseeds volumes in 2025 was primarily related to higher volumes in South America due to improved plant reliability, in addition to improved North America crush volumes driven by improved utilization after the restoration of operations at the Company’s Decatur, Illinois facility. The processed corn volumes were consistent year over year.
Federal Clean Fuel Production Credits and Federal Blenders’ and Producers’ Credits
Biodiesel tax incentives have been provided through various U.S. statutes. The Inflation Reduction Act of 2022 introduced the Clean Fuel Production Credit (IRC Section 45Z or "45Z"). The 45Z credit is effective for fuel produced and sold between January 1, 2025 and December 31, 2029 and replaces prior incentives such as the Blenders’ Tax Credit ("BTC") for qualifying fuels. For the year ended December 31, 2025, the Company did not generate significant 45Z credits. The Company estimates that the total benefits available under 45Z will be higher in future periods primarily due to changes enacted in the OBBBA.
The BTC was previously the primary regulation, applicable to qualifying biodiesel. The Inflation Reduction Act of 2022 extended the BTC through December 31, 2024 and established the 45Z effective January 1, 2025, as discussed above. For the year ended December 31, 2024, the Company recorded benefits of $316 million related to the BTC.
Results of Operations
Earnings before income taxes decreased 44% or $1.0 billion, to $1.3 billion. Results in the current year were primarily driven by lower pricing and execution margins. In 2025, the Company recorded $372 million of impairments driven by revaluation losses related to investments in the alternative protein market and the Company's updated investment strategy around startup and development stage companies, $283 million of asset impairment, exit, contingency, restructuring charges, and impairment charges of $179 million related to previously capitalized software, and Wilmar International Limited (“Wilmar”) equity earnings related impacts reflecting a one time remeasurement gain of $254 million and a $163 million penalty charge. In the prior year period, the Company recorded a $461 million impairment of its investment in Wilmar.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Total segment operating profit (a non-GAAP measure) in 2025 decreased 23% or $1.0 billion, to $3.2 billion, primarily driven by lower results in the Ag Services and Oilseeds segment and the Carbohydrate Solutions segment. Total segment operating profit (a non-GAAP measure) in the year ended December 31, 2025 excluded specified items of $236 million that were primarily comprised of asset impairment, exit, and restructuring costs, as well as net impacts related to Wilmar. Total segment operating profit (a non-GAAP measure) in the year ended December 31, 2024 excluded asset impairment, restructuring, and net settlement contingencies of $490 million.
Total segment operating profit (a non-GAAP measure) is reconciled to earnings before income taxes, the most directly comparable GAAP measure, in the " Non-GAAP Financial Measures " section below.
Revenues for the years ended December 31, 2025 and 2024, were as follows (in millions):
Change
Ag Services and Oilseeds
Ag Services
Crushing
Refined Products and Other
Total Ag Services and Oilseeds
Carbohydrate Solutions
Starches and Sweeteners
Vantage Corn Processors
Total Carbohydrate Solutions
Nutrition
Human Nutrition
Animal Nutrition
Total Nutrition
Total Segment Revenues
Other Business
Total Revenues
Revenues and cost of products sold in agricultural merchandising and processing businesses are significantly correlated to the underlying commodity prices and volumes. In periods of significant changes in market prices, the underlying performance of the Company is better evaluated by looking at margins since both revenues and cost of products sold, particularly in the Ag Services and Oilseeds segment, generally have a relatively equal impact from market price changes which generally result in an insignificant impact to gross profit.
Revenues decreased $5.3 billion to $80.3 billion driven by lower sales volumes ($2.9 billion) and lower sales prices ($2.3 billion). Lower sales volumes of soybeans, corn, and sorghum were partially offset by higher sales volumes of meal and oils. Lower sales prices of meal, soybeans, and wheat were partially offset by higher sales prices of corn and oils. Ag Services and Oilseeds revenues decreased 7% to $61.6 billion driven by lower sales volumes ($2.8 billion) and lower sales prices ($2.1 billion). Carbohydrate Solutions revenues decreased 4% to $10.7 billion driven by lower sales prices ($330 million) and lower sales volumes ($167 million). Nutrition revenues increased 2% to $7.5 billion driven by higher sales prices ($68 million) and the benefit of a contract cancellation in Health and Wellness ($55 million).
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cost of products sold decreased $4.5 billion to $75.2 billion driven by lower sales volumes and lower average commodity costs. Manufacturing expenses increased $209 million primarily driven by higher compensation costs, insurance costs, and EMEA energy costs, partially offset by decreases in maintenance costs.
Gross profit decreased $745 million or 13%, to $5.0 billion driven by a decrease in margins of $865 million in Ag Services and Oilseeds, partially offset by a margin increase of $113 million in Nutrition.
Selling, general, and administrative expenses decreased 3% to $3.6 billion primarily driven by decreased third party service costs, due to improved cost management, and lower financing fees related to the Company’s accounts receivable securitization programs, driven by the Company's cash management initiative. The decrease was partially offset by increased compensation costs and provisions for bad debts.
Asset impairment, exit, and restructuring costs decreased $72 million to $473 million. Charges in the current year included $283 million of restructuring charges, primarily driven by $207 million and $46 million of charges within the Nutrition segment and the Ag Services and Oilseeds segment, respectively, and an impairment charge of $179 million, related to previously capitalized software, within Corporate. Charges in the prior year included a $461 million impairment related to the Company's Wilmar equity investment, $43 million of impairments related to customer lists and discontinued trademarks in the Animal Nutrition subsegment, $4 million of reportable segment specific restructuring charges and $23 million of restructuring in Corporate.
Equity in earnings of unconsolidated affiliates increased $27 million to $648 million driven by higher earnings from the Company’s investments in Wilmar and Olenex, partially offset by lower earnings in Stratas Foods, Terminal de Grãos Ponta da Montanha S.A., and Mid-America Biofuels. Current year Wilmar earnings included the impact of the Company's share of Wilmar's remeasurement gain of the $254 million and penalty charge of $163 million. See Note 8. Investments in and Advances to Affiliates of “Notes to Consolidated Financial Statements” included in Part II. Item 8. Financial Statements and Supplementary Data for additional information.
Interest and investment income decreased $444 million to $118 million, primarily due to revaluation losses of $372 million, driven by $257 million and $115 million within Corporate and the Nutrition segment, respectively, in addition to lower interest income at ADM Investor Services due to lower interest rates.
Interest expense decreased $94 million to $612 million primarily due to improved cash management, driven by decreased expense within Corporate driven by lower use of the Company’s commercial paper borrowing programs, lower interest rates, and favorable settlements of international tax audits, as well as lower interest rates at ADM Investor Services.
Other income - net of $150 million decreased $101 million, driven by lower third party insurance recoveries related to Decatur East and West.
Income taxes of $182 million decreased $294 million. The Company’s effective tax rate for 2025 was 14.5% compared to 21.1% for 2024 . The change in the effective rate was driven primarily by tax treatment of non-recurring items and the Company's geographic mix of earnings.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Segment Operating Profit
Segment operating profit for the years ended December 31, 2025 and 2024 was as follows (in millions):
Change
Segment Operating Profit (1)
Ag Services and Oilseeds
Ag Services
Crushing
Refined Products and Other
Wilmar
Total Ag Services and Oilseeds
Carbohydrate Solutions
Starches and Sweeteners
Vantage Corn Processors
Total Carbohydrate Solutions
Nutrition
Human Nutrition
Animal Nutrition
Total Nutrition
(1) For the year ended December 31, 2025, segment operating profit for the Ag Services and Oilseeds, Carbohydrate Solutions and Nutrition segments included a positive impact of timing-related adjustments for incentive compensation payouts of $45 million, $12 million, and $20 million, respectively. The offsetting adjustment of $77 million was recorded in Corporate with no net impact to the Consolidated Financial Statements.
In the Ag Services and Oilseeds segment, segment operating profit decreased 34%. Ag Services subsegment had lower results compared to the prior year, primarily driven by lower Global Trade results, driven by lower margins due to negative freight timing and lower trading results, and a decrease in sales volumes, partially offset by productivity actions, leading to decreased expenses, and improved Transportation results. Ag Services subsegment results were further impacted by decreased North American volumes and margins, driven by lower soybean exports and the impact of certain export duties, improved results in South America, driven by lower costs related to logistics take or pay contracts that negatively impacted the prior year, partially offset by the temporary disruption at a key port facility in Brazil and lower investment income in South America. Ag Services had approximately $37 million of net negative mark-to-market timing impacts during the current year, compared to approximately $34 million of net positive impacts in the prior year. The Crushing subsegment had lower results versus the prior year, driven by lower soy and canola crush margins and higher manufacturing costs in North America and EMEA; in addition to a decrease in insurance proceeds in the current year of $32 million, down from $76 million in the prior year, relating to the Decatur East insurance claim. South America Crushing results improved slightly on higher volumes. Crushing had approximately $46 million of net positive mark-to-market timing impacts during the current year, compared to approximately $20 million of net positive impacts in the prior year. Refined Products and Other subsegment results were lower than the prior year, driven by uncertain trade policy and lower demand for vegetable oil and biodiesel, negatively impacting biodiesel and refining margins in Europe and North America. The Refined Products and Other subsegment had approximately $46 million of net positive mark-to-market timing impacts during the current year, compared to approximately $194 million of net negative impacts in the prior year.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In the Carbohydrate Solutions segment, segment operating profit decreased 12% compared to the prior year. The Starches and Sweeteners subsegment results were lower compared to the prior year driven by lower wet mill ethanol and starch margins and higher manufacturing costs. Prior year results in North America benefitted from the receipt of $84 million of insurance proceeds from the settlement of Decatur West and Decatur East insurance claims compared to $9 million of proceeds received in the current year. In EMEA, results were driven by lower volumes and margins due to the competitive pricing environment and crop quality issues. Global Wheat Milling margins improved due to higher wheat basis gains. The Vantage Corn Processors subsegment results increased compared to the prior year, driven by improved ethanol volumes and margins.
In the Nutrition segment, segment operating profit increased 8%. Human Nutrition subsegment results were lower than the prior year. Flavors results were higher compared to the prior year, driven by higher volumes and margins in North America due to an increase in sales among existing key customers across multiple product categories. Specialty Ingredients results were lower, driven by higher raw material and manufacturing costs due to the resumption of operations at the Decatur East facility. The prior year also benefitted from approximately $71 million of insurance proceeds related to the Decatur East claim as compared to no proceeds in the current year. In Health and Wellness, results were lower as decreased margins, driven by certain negative inventory valuation adjustments and reduced tolling margins due to a contract cancellation, partially offset by higher Biotics margins. Animal Nutrition subsegment results were higher compared to the prior year, driven by cost optimization efforts and improved margins due to higher margin in feed additives and lower raw material costs.
Other Business and Corporate Results
Other Business contribution of operating profit increased 21% from $247 million to $298 million, Captive insurance results improved, driven by lower claim settlements. Current year results included claim payments to segments of $41 million to other segments for the Decatur East and West insurance claims, of which $39 million was from reinsurers, compared to prior year results including partial settlements to segments of $231 million for the Decatur East and West insurance claims, of which $133 million was from reinsurers. ADM Investor Services results were lower due to lower interest rates.
Corporate results were as follows (in millions):
Change
Interest expense - net (1)
Unallocated corporate function costs (2)
Expenses related to acquisitions
Revaluation losses, including impairment, contingency and restructuring charges (3)
Other income - net
Total Corporate
(1) Interest expense - net decreased $74 million, driven by reduced short-term borrowings, lower interest rates on the Company’s commercial paper borrowing programs, and favorable settlements of international tax audits.
(2) Unallocated corporate function costs decreased $59 million, driven by decreases in financing fees related to the Company’s accounts receivable securitization programs, due to improved cash management, in addition to lower third party service costs and lower corporate function costs, due to cost management initiatives, partially offset by increased incentive compensation.
(3) Revaluation losses, including impairment, contingency and restructuring charges increased $472 million driven by $257 million of impairment charges related to market dynamics and the Company's updated investment strategy around startup and development stage companies, an impairment charge of $179 million related to previously capitalized software, and $40 million of charges relating to a legal reserve, all presented as specified items.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Non-GAAP Financial Measures
The Company uses certain “non-GAAP” financial measures as defined by the SEC. These are measures of performance not defined by accounting principles generally accepted in the United States, and should be considered in addition to, not in lieu of, GAAP reported measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this section.
The Company uses adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit, non-GAAP financial measures as defined by the SEC, to evaluate the Company’s financial performance.
Adjusted net earnings is defined as net earnings adjusted for the effects on net earnings of specified items as more fully described in the reconciliation tables. Adjusted diluted EPS is defined as diluted EPS adjusted for the effects on reported diluted EPS of specified items as more fully described in the reconciliation tables.
EBITDA is defined as earnings before interest on borrowings, taxes, and depreciation and amortization. Adjusted EBITDA is defined as earnings before interest on borrowings, taxes, depreciation, and amortization, adjusted to exclude the impact of specified items as more fully described in the reconciliation tables.
Total segment operating profit is defined as ADM’s consolidated earnings before income taxes, adjusted for Other Business, Corporate, and specified items as more fully described in the reconciliation tables.
Management believes that adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit are useful measures of the Company’s performance because they provide investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. Adjusted net earnings, adjusted diluted EPS, EBITDA, adjusted EBITDA, and total segment operating profit are not intended to replace or be an alternative to net earnings, diluted EPS, and earnings before income taxes, the most directly comparable amounts reported under GAAP.
The table below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to adjusted net earnings (a non-GAAP measure) and diluted EPS (the most directly comparable GAAP measure) to adjusted diluted EPS (a non-GAAP measure) for the years ended December 31, 2025 and 2024.
In millions
Per share
In millions
Per share
Average number of shares outstanding - diluted
Net earnings and diluted EPS
Adjustments: (1)
(Gain) on sale of assets and businesses (net of tax of $9 million in 2025 and $3 million in 2024)
Impairment, exit, restructuring charges, and settlement contingencies (net of tax of $154 million in 2025 and $1 million in 2024)
ADM's share of equity method investment non-recurring (gains) and charges, net
Expenses related to acquisitions (net of tax of $2 million in 2024)
(Gain) on contract termination (net of tax of $17 million in 2025)
Certain discrete tax adjustments
Total adjustments
Adjusted net earnings and adjusted diluted EPS
(1) Tax effected using the U.S. and other applicable tax rates.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The table below provides a reconciliation of net earnings (the most directly comparable GAAP measure) to EBITDA (a non-GAAP measure) and adjusted EBITDA (a non-GAAP measure) for the years ended December 31, 2025 and 2024 (in millions).
Change
Net earnings
Net loss attributable to non-controlling interests
Income tax expense
Earnings Before Income Taxes
Interest expense (1)
Depreciation and amortization (2)
EBITDA
(Gains) on sale of assets and businesses
Impairment, exit, restructuring charges, and settlement contingencies
ADM's share of equity method investment non-recurring (gains) and charges, net
(Gain) on contract termination
Expenses related to acquisitions
Railroad maintenance expense
Adjusted EBITDA
(1) Represents interest expense on borrowings and therefore excludes ADM Investor Services related interest expense.
(2) Excludes $20 million of accelerated depreciation recorded within restructuring charges as a specified item for the year ended December 31, 2025.
The table below provides a reconciliation of earnings before income taxes (the most directly comparable GAAP measure) to total segment operating profit (a non-GAAP measure) for the years ended December 31, 2025 and 2024 (in millions).
Change
Earnings Before Income Taxes
Other Business (earnings)
Corporate
Specified Items:
(Gains) on sale of assets and businesses
Impairment, exit, restructuring charges, and settlement contingencies
ADM's share of equity method investment non-recurring (gains) and charges, net
(Gain) on contract termination
Total Segment Operating Profit
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company's objective is to have sufficient liquidity, balance sheet strength, and financial flexibility to fund the operating and capital requirements of a capital intensive agricultural commodity-based business. The Company depends on access to credit markets, which can be impacted by its credit rating and factors outside of the Company’s control, to fund its working capital needs and capital expenditures.
The primary source of funds to finance the Company’s operations, capital expenditures, and advancement of its growth strategy is cash generated by operations and lines of credit, including a commercial paper borrowing facility and accounts receivable securitization programs. In addition, the Company believes it has access to funds from public and private equity and debt capital markets in both U.S. and international markets.
At December 31, 2025, the Company’s capital resources included shareholders’ equity of $22.7 billion and lines of credit, including the accounts receivable securitization programs described below, totaling $12.3 billion, of which $9.4 billion was unused. Of the Company’s total lines of credit, $5.1 billion supported the commercial paper borrowing programs, against which there was $715 million of commercial paper outstanding at December 31, 2025.
As of December 31, 2025, the Company had $1.0 billion of cash and cash equivalents, $312 million of which is cash held by foreign subsidiaries whose undistributed earnings are considered indefinitely reinvested. Based on the Company’s historical ability to generate sufficient cash flows from its U.S. operations and unused and available U.S. credit capacity of $5.1 billion, the Company has asserted these funds are indefinitely reinvested outside the U.S.
As of December 31, 2025, the Company has total available liquidity of $10.4 billion comprised of cash and cash equivalents and unused lines of credit. The Company believes that cash flows from operations, cash and cash equivalents on hand, and unused lines of credit will be sufficient to meet its ongoing liquidity requirements for at least the next twelve months.
Operating Cash Flows
Net cash provided by operating activities was $5.5 billion, $2.8 billion, and $4.5 billion for the years ended December 31, 2025, 2024, and 2023, respectively.
The increase in cash provided by operating activities in 2025 compared to 2024 was due to changes in net working capital, partially offset by lower earnings in the current year. Changes in net working capital were driven by changes in inventory, payables to brokerage customers and segregated investments, partially offset by changes in accrued expenses and other payables.
Changes in inventories resulted in cash inflow of $1.5 billion in the current year reflecting lower commodity pricing and reductions driven by working capital reduction initiatives, compared to an inflow of $162 million in the prior-year, reflecting lower commodity pricing.
Changes in payables to brokerage customers resulted in cash inflow of $1.1 billion in the current year compared to an outflow of $78 million in the prior year. The inflow in the current year is driven by increased trading activity in the Company’s futures commission and brokerage business.
Change in segregated investments resulted in an outflow of $43 million in the current year compared to an outflow of $693 million in the prior year, driven by brokerage customer trading activity.
Changes in accrued expenses and other payables resulted in an outflow of $823 million in the c urrent year period compared to an outflow of $276 million in the prior year perio d, primarily driven by the valuation of derivative contracts.
Investing Cash Flows
Net cash used in investing activities was $1.0 billion, $2.7 billion, and $1.5 billion for the years ended December 31, 2025, 2024, and 2023, respectively.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net cash used in investing activities for the year ended December 31, 2025 primarily included additions to property, plant and equipment of $1.2 billion, business acquisitions, net of cash acquired of $108 million, proceeds from sales of marketable securities of $277 million, and proceeds from sales of assets, businesses and investments of $111 million.
Net cash used in investing activities for the year ended December 31, 2024 included additions to property, plant and equipment of $1.6 billion, businesses acquired, net of cash acquired of $927 million and purchase of marketable securities of $308 million.
Financing Cash Flows
Net cash used in financing activities was $2.9 billion, $1.5 billion, and $4.6 billion for the years ended December 31, 2025, 2024, and 2023, respectively.
In the year ended December 31, 2025, the Company repaid in full €650 million of 1.000% notes, previously included within Current maturities of long-term debt.
Net cash used in financing activities for the year ended December 31, 2025 and 2024 included net repayments for short-term credit agreements of $1.1 billion and net borrowings of $1.8 billion, respectively.
Dividends paid for the years ended December 31, 2025, 2024, and 2023 were $987 million, $985 million, and $977 million, respectively.
No share repurchases were made in the twelve months ended December 31, 2025. Cash paid for share repurchases for the year ended December 31, 2024 was $2.3 billion. As of December 31, 2025, the Company had 115 million shares remaining that may be repurchased under its stock repurchase program until December 31, 2029.
Credit Ratings
As of December 31, 2025, the three major credit rating agencies maintained the Company’s credit ratings at investment grade levels with a negative outlook.
Accounts Receivable Securitization Program
The Company has accounts receivable securitization programs (the “Programs”) with certain commercial paper conduit purchasers and committed purchasers. The Programs provide the Company with up to $3.0 billion in funding against accounts receivable transferred into the Programs and expand the Company’s access to liquidity through efficient use of its balance sheet assets (see Part II. Item 8. Note 19. Sale of Accounts Receivable for more information and disclosures on the Programs). As of December 31, 2025, the Company utilized $2.1 billion of its facility under the Programs.
Contractual Obligations and Commercial Commitments
In 2026, the Company expects capital expenditures of approximately $1.4 billion and dividend payments of $1.0 billion, subject to other strategic uses of capital and the evolution of operating cash flows and the working capital position throughout the year. The Company’s other material cash requirements within the next 12 months include current maturities of long-term debt of $1.0 billion, interest payments of $527 million, operating lease payments of $357 million, and pension, other postretirement, and defined contribution plan contributions of $119 million.
The Company’s purchase obligations as of December 31, 2025 and 2024 were $13.8 billion and $12.4 billion, respectively. The increase is primarily related to an increase in obligations for commodities. As of December 31, 2025, the Company expects to make payments related to purchase obligations of $12.5 billion within the next twelve months. The Company expects to make payments related to debt and interest, operating leases, purchase obligations and other material cash requirements beyond the next twelve months of approximately $15.3 billion.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company’s credit facilities and certain debentures require the Company to comply with specified financial and non-financial covenants including maintenance of minimum tangible net worth as well as limitations related to incurring liens, secured debt, and certain other financing arrangements. The Company was in compliance with these covenants as of December 31, 2025.
Critical Accounting Estimates
The process of preparing financial statements requires management to make estimates and judgments that affect the carrying values of the Company’s assets and liabilities as well as the recognition of revenues and expenses. These estimates and judgments are based on the Company’s historical experience and management’s knowledge and understanding of current facts and circumstances.
Certain of the Company’s accounting estimates are considered critical, as these estimates are important to the depiction of the Company’s financial statements and require significant or complex judgment by management. Critical accounting estimates are those estimates made in accordance with GAAP which involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on ADM’s financial condition and results of operations.
Management has discussed with the Company’s Audit Committee the development, selection, disclosure, and application of these critical accounting estimates. Following are the accounting estimates management considers critical to the Company’s financial statements.
Fair Value Measurements - Inventories and Commodity Derivatives
Description: Certain of the Company’s inventory, inventory-related payables, and commodity derivative assets and liabilities as of December 31, 2025 are valued at estimated fair values, including $6.2 billion of merchandisable agricultural commodity inventories, $822 million of commodity derivative assets, $613 million of commodity derivative liabilities, and $730 million of inventory-related payables. Commodity derivative assets and liabilities include forward purchase and sales contracts for agricultural commodities. Merchandisable agricultural commodities are freely traded, have quoted market prices, and may be sold without significant additional processing.
Judgments and Uncertainties: Management estimates fair value for its commodity-related assets and liabilities based on exchange-quoted prices, adjusted for differences in local markets. The Company’s inventory, inventory-related payables, and commodity derivative fair value measurements are mainly based on observable market quotations without significant adjustments and are therefore reported as Level 2 within the fair value hierarchy. Level 3 fair value measurements of approximately $3.2 billion of assets and $329 million of liabilities represent fair value estimates where unobservable price components represent 10% or more of the total fair value price. For more information concerning amounts reported as Level 3, see Part II. Item 8. Note 4. Fair Value Measurements.
Sensitivity of Estimate to Change: Changes in the market values of these inventories and commodity contracts are recognized in the Consolidated Statements of Earnings as a component of cost of products sold. If management used different methods or factors to estimate market value, amounts reported could differ materially. Additionally, if market conditions change subsequent to year-end, amounts reported in future periods could differ materially.
Income Taxes
Description: The Company accounts for income taxes in accordance with the applicable accounting standards which prescribe a minimum threshold a tax position is required to meet before being recognized in the Consolidated Financial Statements. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.
Judgments and Uncertainties: ADM calculates its provision for income taxes based on the statutory tax rates and tax attributes available to the Company in the various jurisdictions in which it operates. The Company uses judgment in evaluating the Company’s tax positions and determining its annual tax provision.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sensitivity of Estimate to Change: While ADM considers all of its tax positions fully supportable, the Company faces challenges from U.S. and foreign tax authorities regarding the amount of taxes due. The Company recognizes a tax position in its Consolidated Financial Statements when it is determined to be more likely than not to be sustained upon examination, based on its technical merits. The position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
Business Combinations
Description: The Company’s acquisitions are accounted for in accordance with Accounting Standards Codification (ASC) Topic 805, Business Combinations, as amended. The consideration transferred is allocated to various assets acquired and liabilities assumed at their estimated fair values as of the acquisition date with the residual allocated to goodwill.
Judgments and Uncertainties: Fair values allocated to assets acquired and liabilities assumed in business combinations require management to make significant judgments, estimates, and assumptions, especially with respect to intangible assets. Management makes estimates of fair values based upon assumptions it believes to be reasonable. These estimates are based upon historical experience and information obtained from the management of the acquired companies and are inherently uncertain. The estimated fair values related to intangible assets primarily consist of customer relationships, trademarks, and developed technology which are determined primarily using discounted cash flow models. Estimates in the discounted cash flow models include, but are not limited to, certain assumptions that form the basis of the forecasted results (e.g. revenue growth rates, customer attrition rates, and royalty rates). These significant assumptions are forward looking and could be affected by future economic and market conditions.
Sensitivity of Estimate to Change: During the measurement period, which may take up to one year from the acquisition date, adjustments due to changes in the estimated fair value of assets acquired and liabilities assumed may be recorded as adjustments to the consideration transferred and related allocations. Upon the conclusion of the measurement period or the final determination of the values of assets acquired and liabilities assumed, whichever comes first, any such adjustments are charged to the Consolidated Statements of Earnings.
Goodwill Impairment
Description: Goodwill represents the aggregate of the excess consideration paid for acquired businesses over the fair value of the net assets acquired. At December 31, 2025, the Company had goodwill of $4.8 billion. The Company evaluates goodwill for impairment at the reporting unit level annually on October 1 or more frequently whenever there are indicators that the carrying value may not be fully recoverable, utilizing either the qualitative or quantitative testing method. The Company has seven reporting units with goodwill identified at one level below the operating segment using the criteria in ASC 350, Intangibles - Goodwill and Other (Topic 350). Two reporting units do not have any recorded goodwill. During the year ended December 31, 2025, the Company evaluated goodwill for impairment using a qualitative assessment for six reporting units and using a quantitative assessment for the Animal Nutrition reporting unit. See Part II. Item 8. Note 9. Goodwill and Other Intangible Assets for further information.
Judgments and Uncertainties: The Company has the option to first qualitatively assess factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company elects not to use this option, or it is determined that qualitative factors alone are not sufficient to conclude whether it is more likely than not that the fair value of the reporting unit is less than its carrying value, or it is determined from the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. As part of the Company’s impairment analysis, the fair value of a reporting unit is generally determined using both the income and market approaches. Critical estimates in the determination of the fair value, when using a discounted cash flow analysis, of each reporting unit require management to make assumptions including, but not limited to, future expected cash flows of the reporting unit utilizing appropriate revenue growth, EBITDA margins, and discount rates. A decline in the actual cash flows of a reporting unit in future periods, as compared to the projected cash flows used in the discounted cash flow analysis, could result in the carrying value of the reporting unit exceeding its fair value. Further, a change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sensitivity of Estimate to Change: The estimated fair value of the Animal Nutrition reporting unit was evaluated to be approximately 15% in excess of its carrying value and no impairment was recorded.
The Company used a combination of the income and market approaches when performing the quantitative assessment of goodwill for the Animal Nutrition reporting unit. The Company weighted the income approach with a probability weight of 75%, as it is based on the future business plans and growth estimates for the Company’s Animal Nutrition business and thus considers short-term and long-term cash flow expectations for the business. The market approach was weighted at 25%, as it represents an estimate of fair value based on market guideline companies for which future growth expectations are not precisely known. The income approach is predicated upon the value of the estimated future cash flows that a business will generate going forward. The Company used the Discounted Cash Flow (DCF) method under the income approach for the analysis of Animal Nutrition. The market approach assumes that companies operating in the same industry will share similar characteristics and that values will correlate to those characteristics. Therefore, under the market approach, a comparison of the reporting unit to similar companies whose financial information is publicly available may provide a reasonable basis to estimate the fair value of the reporting unit. The two forms of the market approach most commonly applied are the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method. The Company utilized the GPC method to estimate the fair value of the Animal Nutrition reporting unit under the market approach. The GMAC method was also considered, but ultimately was not relied upon due to the lack of recent transactions that were directly comparable. In the selection of the appropriate market multiples, the Company considered the performance of the business, the size, risks, opportunities, and a comparison of the margins and growth of the Animal Nutrition business compared to the guideline public companies. The estimated fair value calculated by the GPC method was within 10% of the estimated fair value calculated by the income approach.
The Company performed a sensitivity analysis for the significant assumptions used in the goodwill impairment testing analysis for the Animal Nutrition reporting unit. The sensitivities were calculated in isolation using the income approach and keeping all other assumptions constant. The sensitivities for revenue growth and EBITDA margins do not consider the offsetting impact of a lower discount rate assumption to reflect the reduced risk in estimated future cash flow growth used under the income approach or the related impacts on pricing multiples used under the market approach.
As of December 31, 2025, goodwill allocated to the Animal Nutrition reporting unit totaled $958 million. For Animal Nutrition reporting unit impairment testing, below are certain hypotheticals where a change would result in an impairment:
– Increase to the discount rate of approximately 175 basis points would result in a goodwill impairment of approximately $29 million;
– Decrease to forecasted EBITDA margins of approximately 150 basis points would result in goodwill impairment of approximately $69 million
– Decrease in the forecasted revenue growth rate of approximately 290 basis points would result in goodwill impairment of approximately $1 million.; and
– Increase in the expected capital expenditures as a percentage of revenue over the entire forecast of approximately 100 basis points would result in a goodwill impairment of approximately $181 million.
Investments in Affiliates
Description: The Company applies the equity method of accounting for investments over which the Company has the ability to exercise significant influence, including its 22.5% investment in Wilmar. These investments in affiliates are carried at cost plus equity in undistributed earnings and are adjusted, where appropriate, for amortizable basis differences between the investment balance and the underlying net assets of the investee. Generally, the minimum ownership threshold for asserting significant influence is 20% ownership of the investee. However, the Company considers all relevant factors in determining its ability to assert significant influence including but not limited to, ownership percentage, board membership, customer and vendor relationships, and other arrangements.
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ARCHER-DANIELS-MIDLAND COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Judgments and Uncertainties: The Company has evaluated its investments in affiliates as of December 31, 2025 to be appropriately stated at carrying values. The Company also periodically compares the book value of its investment in Wilmar against its market value as determined through quoted market prices, and evaluates for any potential other-than-temporary impairment. The Company’s investment in Wilmar had a carrying value of $4.0 billion as of December 31, 2025, and a market value of $3.4 billion based on the quoted Singapore Exchange market price, converted to U.S. dollars at the applicable exchange rate, at December 31, 2025. The Company evaluated several factors in its determination of whether an other-than-temporary impairment had occurred. This included consideration of the severity and duration of the carrying value being above Wilmar's stock price, the recent performance of Wilmar’s stock price as quoted on the Singapore Exchange, including stock price performance subsequent to the balance sheet date, Wilmar's financial condition and near-term performance prospects, latest consensus analyst forecasts, Wilmar’s long history of earnings and dividends and the Company’s continued representation on Wilmar’s Board. The Company considers its investment in Wilmar a significant and strategic relationship and has the intent and ability to retain its investment in Wilmar for a period of time sufficient to allow for any anticipated recovery in market value. Based on the evaluation of the factors above, the Company does not consider the investment to be other-than temporarily impaired at December 31, 2025.
Sensitivity of Estimate to Change: The performance of impairment tests involves the use of estimates and assumptions, which may change period to period. If the Company used different assumptions in the evaluation of its equity method investments, including its investment in Wilmar, the Company may conclude that investments are other-than-temporarily impaired.
Recent accounting pronouncements
See “ New Accounting Pronouncements Not Yet Adopted ” within Note 1. Summary of Significant Accounting Policies, to the Consolidated Financial Statements included in Part II. Item 8 for information regarding recent accounting pronouncements.
