Accelerating Archer Daniels Midland Company November 2016

Transcription

1 Accelerating Archer Daniels Midland Company November 2016

2 Safe Harbor Statement 2 Some of our statements 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 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.

3 3 AGRICULTURAL SERVICES OILSEEDS PROCESSING CORN PROCESSING WILD FLAVORS & SPECIALTY INGREDIENTS

4 ADM: What We Do Simply Explained 4 Origination Processing Specialties Ag Services Division Origination of Crops For Internal Use For External Sale Milling Transportation Oilseeds Processing Division Corn Processing Division Meal Oil Other Oilseed Products Sweeteners & Starches Feed Fuel WFSI Division Specialized Ingredients & Flavors Customers & End Users Regional Sales Export to Port Export & Deliver to Customer Other Corn Products

5 ADM: Key Drivers of Profitability Capacity Utilization Corn Processing 21% Primary Business Conditions Driver 5 Percent of FY15 Adjusted Operating Profit Oilseeds Processing 44% Milling & Other Ag Services 23% Grain Merchandising Global Supply & Demand Balances and Fleet Utilization Wild Flavors & Specialty Ingredients 10% Transportation 1 Non-GAAP measure see appendix Other Innovation

6 World s Most Diversified Assets 6 Oilseeds Processing Corn Processing Wild Flavors & Specialty Ing. Ag Services Wilmar International Sourcing distribution Processing distribution

7 ADM: Profitable and Evolving Growth 7 Key Financial Statistics CY15 revenue: $68B Facilities: 700+ Market cap (12/31/2015): ~$23B NYSE: ADM FY04 Adjusted Segment Operating Profit $1.6 Billion 1 Corn Processing 43% 32% Oilseeds Processing CY15 Adjusted Segment Operating Profit $2.9 Billion 1 21% Corn Processing Oilseeds Processing 28% 23% 40% Ag Services 44% 23% Ag Services Other 10% 1 Non-GAAP measure - see appendix 2% Other Wild Flavors & Specialty Ingredients

8 ADM s History of Growth 8

9 ADM s Proven Core Model 9 Corn Oilseeds Wheat Source Transport Process Transform Distribute Market & Sell Financial strength and industry acumen underpin the chain and drive value Food Feed Fuel Industrial Setting the competitive standard Capture value across the chain

10 Our Value Creation Framework 10 Align Operating Metrics with Key Drivers of Shareholder Value Optimize the Core Increase destination marketing Portfolio management Rejuvenate product mix Drive Operational Efficiencies Technology for competitive advantage Standardization for scale 1ADM for productivity Expand Strategically Geographic expansion Grow market-facing units Create new ingredients business Enhance Talent & Capabilities Build talent base around the world Selective marketing and application development Add customer-centric capabilities

11 : Most Significant Portfolio Transformation in ADM History Divested Acquisitions and Investments 11 Cocoa business Chocolate businesses South American fertilizer Lactic acid business Brazilian sugarcane ethanol* Eaststarch C.V. **

12 Expanding Strategically 12 Geographic Diversity and Enhanced Portfolio Black Sea export Barcarena port Santa Fe port Medsofts (Egypt) Eaststarch C.V. Morocco sweetener AOR Eatem Foods CA Gold Almonds Harvest Innovations Non-GMO lecithin Tianjin fiber Campo Grande protein

13 Driving Value Creation 13 Strengthen our Existing Operations Golden Peanut and Tree Nuts streamlined operations Progressed dry mill strategic review, expect final proposals by end of 2016 Managing Costs to Grow Margins $250M in new run-rate cost savings in 2016, on track to exceed $275M year-end target 'Go Live' of 1ADM in North American grain elevators Fueling Future Growth Continued WFSI boltons with Caterina Foods acquisition Stratas Foods JV acquires Supreme Oil

14 Ag Services: ADM is the Premier Global Ag Services Company 14 Merchandising and Handling Transportation Milling

15 $ Million ADM is the Premier Global Ag Services Company 15 Efficiently buy, store, clean and transport agricultural commodities 1, Ag Services Adjusted Operating Profit 1,196 1,230 1,245 1, /2012 US drought impact FY08 FY09 FY10 FY11 CY12* CY13* CY14 CY15 Merchandising & Handling Transportation Milling & Other Prior periods have been restated to conform to current year presentation, except for the elimination of the allocation of working capital interest in fiscal 2007, 2008, and See appendix In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30 th Beginning in FY15, certain Foods & Wellness businesses that contributed $49 million of adjusted OP to Ag Services in FY14 began reporting results in the WFSI segment

16 Ag Services Links Crops to Global Markets 16 US & Canada Rail Eastern Europe Barge China Ocean Going Vessel SE Asia Note: Origination Assets in South America and part of Europe are reported within the Oilseeds segment. Australia NZ Container Former Toepfer Grain Elevators Wheat Milling Other Processing Trucking ARTCO Sales Office South America Truck Middle East & Africa

17 Ag Services: Sources of Profitability 17 Milling & Other Transportation 26% 20% 54% Merchandising & Handling Origination Assets in the majority of South America and part of Europe are reported within the Oilseed segment Percentages based on FY15 Adjusted Operating Profit

18 Ag Services: Grain & Transportation Sources of Profitability 18 Physical Grain Assets Physical Grain Assets Intellectual Capital Transportation Operating Expertise Elevation Capacity Volume Discounts Carry Charges Blending/Drying/Storage Connection to Farmers Risk Management Market Intelligence Arbitrage Grain & Freight Spreads/Options Diversified Product Portfolio Value Added Services Operating Efficiency Centralized Negotiations Trade Knowledge/Relationships Round Trip Optimization Competitive Advantage 3rd Party Logistics Inland Port/Intermodal Ramp Multi-modal Flexibility

19 Transportation: Core Competency & Competitive Advantage 19 Efficiency Technology 1,400 Semi Trailers Fleet Optimization 2,500 Barges 28,000 Railcars Asset Utilization Leverage 10 Owned Bulk Carriers 150 on Time Charters Ship 160,000 (teu) ocean containers annually

20 Ag Services: Growing Destination Marketing & Distribution FOB to CIF Margin $2 - $3 per MT From Origin to Port Destination Margin $8 - $12 per MT From Port to End Customer 20 Domestic Origination River Logistics Strategic Grain Export Assets Ocean Freight Destination Ports Destination Distribution

21 Ag Services Vision: Build on Being the Premier End-to-End Global Ag Services Company 21 Grow Origination Platform Grow in Destination Markets & Distribution Leverage Global Transportation Network

22 Corn Processing: World s Largest Corn Processor 22 ~30 Different Products 14 corn processing plants in 7 countries 37 feed and premix facilities in 6 countries Grind capacity of 3.0 million bushels per day

23 $ Million World s Largest Corn Processor 23 Accelerating diversification of products and global footprint Corn Processing Adjusted Operating Profit ,173 1, FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 Sweeteners & Starches Bioproducts Prior periods have been restated to conform to current year presentation, except for the elimination of the allocation of working capital interest in fiscal 2007, 2008, and See appendix. In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30 th Beginning in FY15, certain Foods & Wellness businesses that contributed $37 million of adjusted OP to Corn Processing in FY14 began reporting results in the WFSI segment

24 Corn Processing: Unparalleled Global Footprint 24 Corn Processing Plant 14 corn processing plants in 7 countries and 8 other processing plants 38 feed and premix facilities in 6 countries 3 of 5 largest corn mills in the world Daily grind capacity of 3.0 million bushels Other Processing Plant Sweetener Terminal Ethanol Terminal Animal Nutrition Processing Plant Export Flow

25 Corn Processing: NA Footprint is Strategically Positioned for Efficient Origination and Distribution 25 Corn Belt Corn Processing Plant ADM Elevator Sweetener Terminal Ethanol Terminal ADM Export Facility

26 Corn Processing: Market Leading Positions Across a Diverse Product Portfolio 26 Products Key Applications Market Position Sweeteners Starches Alcohol Soft Drinks Confectionery Paper making Corrugating Fuel (E-10/15/85) Beverage Bakery Brewery U.S.: #1 Food U.S.: #2 Personal Care Solvent U.S.: #1 Amino Acid (Lysine) Animal nutrition U.S.: #1 Bio-based Propylene Glycol (PG) Food & beverage De-icing Personal care Home care U.S.: #1

27 Corn Processing: Optimizing Margins through the Fight for the Grind 27 Fibersol Polydextrose Rare Sugar Omega-3 DHA Renewable Chemicals Enzymes Polyols Over-the-fence Opportunities Soluble ingredient used to increase dietary fiber Soluble ingredient used to increase non-dietary fiber and reduce sugar and calories Ultralow-calorie sugar with taste similar to fructose Sustainable alternative to fish oil with widely recognized health benefits for both humans and animals Exploring technology to produce adipic acid and other base ingredients for products such as nylon Key production input for various ADM products; could also be sold directly for food and feed applications Used in food and personal care products Long-term agreements to supply ADM s low-cost raw materials to co-located 3 rd parties

28 Ethanol Dynamics 28 Growing domestic and export demand Continue to build on logistics advantage Promoting E-15 Implementation Strong Cash Flow Generator Industry production capacity continued to increase in 2015 limiting margins U.S. Gasoline Demand Estimate Continues to Increase 2016 EIA U.S. Gasoline Annual Demand Estimate Current 2016 U.S. Gasoline Consumption estimate is over 2% higher than predicted one-year ago Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Source: U.S. Energy Information Administration Short-Term Energy Outlooks (billions of gallons)

29 Ethanol: A Low Cost Octane Enhancer 29 Mandates and octane economics drive export demand Product Octane Content Required % to Achieve 87 Octane Current Price (11/2/2016) Corn Ethanol % ~$1.65 Alkalytes % ~$1.57 MTBE % ~$1.67 Sugarcane Ethanol (Anhydrous) % ~$2.31 Incremental opportunity from global replacement of MTBE Net Exports Millions of Gallons Select Export Destinations Destination Change China Korea Oman Peru Netherlands Brazil

30 US Europe Latin America Africa South-East Asia China Glucose Native Starch HFCS 55 Polyols Corn Processing: Global S&S Growth Market Perspectives expected growth per region (%) expected growth per product (%) Keys Insights China is the # 1 starch & derivatives market since the early 2010 s Developed regions are growing below 1% per year Emerging markets are growing between 1x and 2x GDP growth rate Source: LMC International 2014

31 Corn Processing: Growing Our Global Footprint with China Plants 31 Tianjin Premix Feed Plant Dalian Premix Feed Plant Premix Feed Plants Tianjin Plant Complex China Corn Belt Nanjing Premix Feed Plant Tianjin 320K MT Fructose Plant Tianjin 18K MT Fibersol Plant

32 Oilseeds Processing: World s Most Diversified Oilseeds Business 32 ~60 Different Products Meal Oil Other Processing Assets in 16 Countries Wilmar Equity Investment

33 $ Million Adjusted for Unusual Items, Oilseeds Recent Operating Profit Has Been Largely Consistent in Varied Market Conditions 33 *Beginning in FY 2015, legacy Food & Wellness businesses, which contributed $165 million to Oilseeds OP in 2014, began reporting in WFSI. Full-year 2015 results also reflected the sale of our cocoa, chocolate and fertilizer businesses. Oilseeds Processing Adjusted Operating Profit 1,500 1,350 1,554 1,619 1,620 1,486 1,499 1,289* 1, FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 Crushing & Origination Asia Refining, Packaging, Biodiesel & Other Cocoa & Other Prior periods have been restated to conform to current year presentation, except for the elimination of the allocation of working capital interest in fiscal 2007, 2008, and See appendix. In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30th

34 Geographic Reach, Broad Range of Feedstocks Make Ours the World s Most Diversified Oilseeds Business 34 Crush Refinery Biodiesel Elevator Port Packaging Value Added Golden Peanut Golden Peanut Buying Point Sales Office Wilmar Soybean Canola/Rapeseed Sunflower Flax Cottonseed Peanut Palm

35 ADM Oilseeds at a Glance 35 We originate, transport, merchandise, crush, and further process soybeans, softseeds and other oilseeds Meals and oils used in food, animal feeds, renewable fuels, industrial products 120+ production facilities 170+ procurement facilities w/storage capacity of ~3.8M MTs Czernin, Poland, crush complex Processing capacity: 150M+ MTs/day Employees: ~10,000 Source: ADM 2015 Form 10-K

36 Key Competitive Advantages 36 Global Footprint Scale Strategic presence in key regions Investing to grow globally Diversification Geographic footprint Maximizing margins with switch plants Product mix Barcarena, Brazil Operations Integrated facilities Global transport/logistics network provides significant efficiencies Experienced team Risk-Management Focus Centralized hedge-desk operations Global market intelligence

37 Growth in Meat Consumption Continues to Drive Meal Demand Global poultry consumption projected to rise 257% from 1990 levels; pork up 93% Global protein meal consumption projected to rise 260% from 1990 levels 37 (in 1000 MTs) (in 1000 MTs) 140, , ,000 80,000 60,000 40,000 20, , , , , , ,000 50,000 0 Sources: USDA, OECD

38 To WFSI To WFSI Our Scale Enables Production of Broad Product Portfolio, Serving Variety of Markets with the Best Route to Market 38 Lecithin Soybean Gums Further Processing Sterols Canola/Rapeseed Crude Oil Refine Transesterify Vitamin E Biodiesel/Glycerin Interesterify Shortening Sunflower Flax Protein Meal Oil Hydrogenate Margarine Oil Protein Meal Cottonseed Further Processing Soy Flour/Cotton Flour Soy Concentrate Peanut Texturize Soy Isolate TVP/TVC Palm Cotton Lint Further Processing Cellulose

39 2015 Accomplishments Attest to Strategy s Effectiveness 39 Optimizing the Portfolio; Investing in Businesses that Meet our Returns Objectives Record global crush rates Achieved record returns Completed sale of Cocoa and Chocolate businesses Sold 50% of Barcarena port to Glencore Completed acquisition of Belgian oil bottler AOR Reached agreement with Wilmar to change Olenex into a full-fledged JV Completed cost savings projects w/run-rate savings of >$60M Addressed underperforming businesses; rationalized assets and structure in India and Paraguay, and in Golden Peanut and Tree Nuts

40 WILD Flavors and Specialty Ingredients: World-Class Specialty Ingredient Business 40 Industry s Broadest Portfolio of On-Trend Ingredients Addressing: Nutrition Function Texture Taste Specialty Ingredients Market = $50B $30B Ingredients $20B Flavors Market Growing 5-6%

41 WILD Flavors and Specialty Ingredients (WFSI) Extends ADM s Advantaged Portfolio into $50B Specialty Ingredients Space 41 AGRICULTURAL SERVICES OILSEEDS PROCESSING CORN PROCESSING WILD FLAVORS & SPECIALTY INGREDIENTS

42 WFSI Combines Legacy ADM Specialty Ingredients and Acquired Capabilities 42

43 WFSI: A Premier Specialty Ingredients Provider With Global Reach 43

44 WILD Flavors and Specialty Ingredients: Creating Ingredient Solutions for our Global Customers 44 Processing (30+) ADM Specialty Ingredients Specialty Commodities WILD Flavors Sales Locations (50+) ADM Specialty Ingredients Specialty Commodities WILD Flavors R&D and Applications (30+) ADM Specialty Ingredients R&D WILD Center of Excellence WILD Product Dev & App

45 WFSI: Industry s Broadest Portfolio of On-Trend Ingredients 45 Addressing nutrition, function, texture and taste Specialty Proteins Flavors & Extracts Nuts, Seeds, & Ancient Grains Edible Beans & Peas Nutritional Supplements Polyols Colors Fiber Mint Emulsifiers Hydrocolloids Ingredient Systems

46 Ingredient Systems: A Key WFSI Differentiator 46

47 WFSI: We Serve as an Extension of Our Customers Resources 47 A single partner for all needs, from individual ingredients to turnkey, customized solutions Consumer/Market Insights Product Development Commercialization Supply Management Capabilities in new-product innovation, cost-optimization create value for customers outsourcing their R&D needs.

48 48 WFSI: Supporting a Range of Products for Our Customers Who Sell Through a Variety of Channels Beverages Baked Goods Health & Nutrition Personal Care Dairy & Ice Cream Confections Channel partners include: Entrepreneurs/startups Regional CPG accounts Direct Sales accounts Private-label Foodservice Multinational CPG Snacks Meats & Meals

49 WFSI: Excellent Results in First Year as a Combined Organization 49 Earnings and synergies Achieved $0.10 accretion target More than $40M in cost synergies ahead of schedule Active pipeline of >750 revenue-synergy projects Global and cross-business unit wins Organic Growth, M&A Completion of non-gmo lecithin in Germany, India Customer Innovation Center in Cranbury, N.J. Savory flavors Eatem Foods Additional specialty commodities capabilities California Gold Almonds Non-GMO, gluten-free, organic ingredients Harvest Innovations

50 WFSI: Summary 50 A premier global ingredient company with exceptional capabilities, talent and value propositions Supporting customer and consumer needs in a dynamic marketplace First year as a combined organization delivered strong results

51 Innovation & Improvement Initiatives 51

52 Significant Opportunity for Additional Improvement A Systematic Approach to Cost Savings $240 M $160 M Data Infrastructure & Analytics Corn & Oilseeds Processing Technology Maintenance Initiatives Corn & Oilseeds Energy Efficiencies Operational Excellence Process Improvements Membrane Technology Fermentation Procurement Savings Advanced Process Controls Advanced Separations Yield Improvements Operational Reliability Catalysis Pipeline >$1 Billion By 2019 $350 M Additional Savings + $200 M Additional Procurement Savings = $550 Million 52 Executed on projects that will deliver >$200 million in run-rate savings in 2015 Targeting $275 million in run-rate savings in 2016

53 Strategic Innovation Enables New Products 53 Diversifying Corn Grind & Expanding Oilseeds Product Portfolio Super Absorbent Polymers Industrial Oils (Coatings) Specialty Proteins Alternative Sweeteners Feedstocks: Corn Oilseeds Industrials Project Pipeline Food and Feed Target: >$1B in New Product Sales Packaging and Fibers Home and Personal Care Specialty Oils Omega-3

54 $ Billions Adjusted Segment Operating Profit /2012 U.S. drought impact FY06 FY07 FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 Oilseeds Processing Corn Processing Agricultural Services WILD Flavors & Specialty Ingredients Other Prior periods have been restated to conform to current year presentation, except for the elimination of the allocation of working capital interest in fiscal 2007, 2008, and In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30th

55 Earnings Trend History 55 $4.00 $ Year Moving Average EPS (adj) 2011/2012 US drought impact $3.00 $2.90 $2.50 $2.00 $1.50 $1.65 FY06 FY07 FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 Earnings and EPS net of specified items (including LIFO) In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30th

56 Driving Earnings Growth over the Medium-Term 56 $1.00 to $1.50 Operational Excellence Execution of Key Projects WILD Flavors Acquisition & Synergies Share Repurchases Total Earnings Growth Potential

57 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q3 CY16 Trailing 4Q Average Adjusted ROIC (1) 5.8% Annual WACC 6.6% Trailing 4Q Average Adjusted EVA ($196M) Trailing 4Q Average ROIC (1)(3) 7.2% 57 (1) For periods prior to Q1 CY14, Trailing 4Q average WACC is displayed 1 Non-GAAP measure - see appendix

58 Balanced Capital Allocation Framework 58 80% 60% 40% 20% % of Operating Cash Flow Spend: 60%-70% in strategic M&A or return of capital to shareholders 30%-40% reinvested in Capex 0% Historical Medium-Term

59 Billions CapEx Discipline 59 $1.9 $1.6 $1.2 $1.2 $0.9 $0.9 $1.1 $1.0 FY09 FY10 FY11 CY12 CY13 CY14 CY15 CY16* (Projected)

60 Steadily Increasing Dividends 60 Annual Dividends per Share 96 $1.12 $ CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 (Q1 Annualized)

61 Dividend Payout Range to Increase with Stronger and More Stable Earnings Historical Range 20%-30% Dividend Payout Ratios Ranges Medium-Term Range 30%-40% 61

62 Balance Sheet Strength 62 50% Net Debt/Total Capital 15.0 Available Liquidity ($Billions) 25% 25% % Q Q Net debt is calculated as short-term debt plus long-term debt, including current maturities less cash and cash equivalents and short-term marketable securities. Total capital excludes cash from L/T debt 0.0 Q Q Total Liquidity with RMI Liquidity Available Liquidity available includes commercial paper and other sources of available credit capacity

63 2016 Priorities: With Current Headwinds Increased Focus on Areas in our Control 63 >$200M Savings in 2015 $275M target in 2016 Operational Excellence Portfolio Management Address Lower Returning Assets Dry Mill Strategic Review Bolt-on s Targeted Growth Reduce Invested Capital Reduce Asset Intensity Opportunistic M&A $1B Multi-Year Program

64 ADM Disciplined Capital Allocation Framework Earnings and EVA Growth 64 Balance Sheet Strength Portfolio and Footprint

65 Appendix 65

66 Historical Segment Operating Profit 66 Segment CY 2012 CY 2013 CY 2014 CY 2015 Operating As As As As As As As As As As As As As As As As Profit Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Reported Adj Adjusted Oilseeds Processing 1,065 1,065 1,350 1,350 1, ,554 1,690 (71) 1,619 1,620 1,620 1, ,486 1,605 (106) 1,499 1,574 (285) 1,289 Crushing & Origination (a,b) (71) Refining, Packaging, Biodiesel, & Other (f) (b) Cocoa & Other (d) (33) 13 (i) (20) (i) Asia Corn Processing , , , , (42) 606 Sweeteners & Starches (i) (b), 11 (i) (b, i) Bioproducts (321) (321) (d) (d) 843 (143) 10 (b) (133) (b), 4 (i) (b, i) Agricultural Services 1,196 1, ,230 1,002 1,002 1,323 (78) 1, , (30) (a, Merchandising & Handling (62) (a) (b) b) Transportation Milling and Other (4) 275 (c) (78) 399 (e) (b) (5) 191 (a) (b) Wild Flavors and Specialty Ingredients Wild Flavors Specialty Ingredients Other (31) (31) (33) Processing (j) Financial (57) (57) (g) (33) (a) Total 3, ,441 2, ,728 3, ,447 4,131 (48) 4,083 2, ,833 2, ,962 3,915 (222) 3,693 3,272 (348) 2,924 (a) Gain on asset and business disposal (b) Loss on asset and business disposal (c) Gruma foreign exhange losses (d) Start-up costs (e) Gain on sale of Gruma assets (f) Gain on Golden Peanut acquisition (g) Debt buyback costs (h) Gain on vitamin antitrust litigation settlement (i) Timing effects (j) Restructuring costs

67 Summary of Specified Items Excluded in Adjusted Earnings¹ 67 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 CY12 CY13 CY14 CY15 Earnings as Reported ,044 1,312 2,154 1,780 1,684 1,930 2,036 1,223 1,375 1,342 2,248 1,849 Specified Items: LIFO Credit/(Charge) 1 (1) (9) (74) 71 7 (129) (354) (229) FX gain/(loss) (25) (63) GrainCorp-related items (164) FCPA charge (37) Start-up Costs (68) (59) 0 Debt Buyback/Exchange Costs (47) (9) (7) (118) Golden Peanut Gain 44 0 Gruma Bank Disposal 49 0 Gain/(Loss) on Interest Rate Swaps (37) 19 0 Asset abandonment/impairment and exit costs (274) (161) (88) (67) (172) Valuation allowance (82) 66 Bioblenders' credit 55 0 Interest exp adj related to If-converted method (13) Tax on remeasurement (change in fiscal year) (14) (61) Pension settlement (44) Gain on GrainCorp 49 Gain on sale or revaluation of assets Quarterly ETR adjustment 0 0 Wilmar Tax (158) Gruma Derivatives (171) Wimar Restructure 286 Tyson/OSG shares 225 Agricore/Arkady Disposals 132 T& L Shares 119 Vitamin Settlement Fertilizer gain 83 Kalama Gain 97 CIP Gain 59 HFCS Litigation (252) Total Specified Items (326) (354) (7) (126) (198) (275) (144) (201) Earnings Excluding Specified Items ,305 1,640 2,134 1,691 2,056 2,234 1,498 1,519 1,543 2,101 1,615 EPS Adjusted for Specified Items (1) Non-GAAP measure - see notes on page 64

68 Notes: Non-GAAP Reconciliation 68 The Company uses certain Non-GAAP financial measures as defined by the Securities and Exchange Commission. 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. (1) Adjusted earnings per share (EPS) and adjusted EPS excluding timing effects Adjusted EPS and adjusted EPS excluding timing effects reflect ADM s fully diluted EPS after removal of the effect on Reported EPS of certain specified items and timing effects as more fully described above. Management believes that these are useful measures of ADM s performance because they provide investors additional information about ADM s operations allowing better evaluation of ongoing business performance. These non-gaap financial measures are not intended to replace or be an alternative to Reported EPS, the most directly comparable GAAP financial measure, or any other measures of operating results under GAAP. Earnings amounts in the tables above have been divided by the company s diluted shares outstanding for each respective quarter in order to arrive at an adjusted EPS amount for each specified item and timing effect. (2) Segment operating profit and adjusted segment operating profit Segment operating profit is ADM s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit is segment operating profit adjusted, where applicable, for specified items and timing effects. Timing effects relate to hedge ineffectiveness and mark-to-market hedge timing effects. 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, and specified items and timing effects. Segment operating profit and adjusted segment operating profit are non- GAAP financial measures and are not intended to replace earnings before income tax, the most directly comparable GAAP financial measure. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under U.S. GAAP and should not be considered as alternatives to income before income taxes or any other measure of consolidated operating results under U.S. GAAP. (3) Adjusted Return on Invested Capital (ROIC) 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 ROIC invested capital is the sum of ADM s equity (excluding noncontrolling interests) and interestbearing 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. 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. (4) Average ROIC Average ROIC is ADM s trailing 4-quarter net earnings adjusted for the after-tax effects of interest expense and changes in the LIFO reserve divided by the sum of ADM s equity (excluding non-controlling interests) and interest-bearing liabilities adjusted for the after-tax effect of the LIFO reserve. Management uses average ROIC for investors as additional information about ADM s returns. Average ROIC is a non-gaap financial measure and is not intended to replace or be an alternative to GAAP financial measures. (5) Adjusted Economic Value Added Adjusted economic value added is ADM s trailing 4-quarter economic value added adjusted for LIFO and other specified items. The Company calculates economic value added by comparing ADM s trailing 4-quarter adjusted returns to its Annual WACC multiplied by adjusted invested capital. Adjusted economic value added is a non-gaap financial measure and is not intended to replace or be an alternative to GAAP financial measures.