Archer-Daniels-Midland Co

Company Overview

Business Model: Archer-Daniels-Midland Company (ADM) operates as an essential global agricultural supply chain manager and processor, transforming raw agricultural commodities into a wide array of products for the food, feed, fuel, industrial, and consumer products sectors. The Company partners with farmers globally, leveraging an integrated network for origination, logistics, and manufacturing. ADM is also a premier provider of human and animal nutrition ingredients and solutions, including natural colors and flavors, plant-based proteins, probiotics, enzymes, and supplements, supporting health, productivity, and sustainability. Additionally, ADM is a key producer of biofuels and is actively investing in research, application development, and process improvement to deliver value-added products, enhance supply chain efficiency, and advance sustainable agricultural and nutrition solutions, including carbon capture and sequestration capabilities.

Market Position: ADM holds a market position as an essential global agricultural supply chain manager and processor, a premier human and animal nutrition provider, and a leader in health and well-being products. The Company emphasizes its role as a cutting-edge innovator, investing in research and development to deliver value-added products and advance sustainable solutions. In its Nutrition business, ADM focuses on innovation, science-based solutions, direct-to-consumer channels, market expansion, strategic partnerships, and leveraging data and technology to maintain competitiveness in a highly competitive environment with diverse ingredient suppliers, contract manufacturers, and global consumer goods companies. Competition across its markets is primarily based on price, foreign exchange rates, quality, global supply, and alternative products.

Recent Strategic Developments:

• 2025 Strategic Priorities: ADM's strategic priorities for 2025 include focusing on execution and cost management through boosting plant efficiencies, optimizing operating leverage within the Nutrition segment, and reducing third-party spend and selling, general, and administrative expenses. The Company also aims for strategic simplification by optimizing its portfolio and organizational structure, addressing performance challenges, reducing capital expenditures that do not meet return objectives, and reducing capability overlaps. Targeted growth investments are prioritized for plant modernization, cost optimization, and enterprise system and process enhancements, particularly in enhanced nutrition, biotics, biosolutions, precision fermentation, and decarbonization. Capital is deployed with discipline, continuing shareholder returns through dividends.
• Cost Savings Initiatives: In February 2025, ADM announced targeted actions expected to deliver over $500 million in cumulative cost savings within the next 3 to 5 years through cost optimization and portfolio simplification.
• Portfolio Actions:
  • Acquisition: In January 2025, ADM acquired Vandamme Hugaria Kft, a 700 metric ton/day non-genetically modified crush and extraction facility in Hungary.
  • Closure: In July 2025, the Company closed its Tres Corações facility in Brazil, incurring exit and restructuring costs.
  • Joint Ventures:
    • In September 2025, ADM launched Plainsman Company, a joint venture with PYCO Industries, Inc., combining cottonseed processing capabilities in Lubbock, Texas.
    • In September 2025, ADM entered a definitive agreement with Alltech Inc. to launch a North American animal feed joint venture.
    • In December 2025, ADM entered a definitive agreement with Planters Cotton Oil Mill, Inc. to launch a new cottonseed joint venture, contributing its Memphis, Tennessee, cottonseed facility.

Geographic Footprint: ADM operates with consolidated subsidiaries in 75 countries, procuring raw materials from North America, South America, Europe, the Middle East, Africa (EMEA), and Asia-Pacific. The Company maintains a global network of processing facilities and procurement facilities across these regions.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 6.27%
• Operating Margin: 1.56%
• Net Margin: 1.34%

Investment in Growth:

• R&D Expenditure: $246 million (0.31% of revenue)
• Capital Expenditures: $1.25 billion
• Strategic Investments: $125 million for the acquisition of Vandamme Hugaria Kft. The Company is also investing in enhanced nutrition, biotics, biosolutions, precision fermentation, and decarbonization initiatives.

Business Segment Analysis

Ag Services and Oilseeds

Financial Performance:

• Revenue: $61.57 billion (-7.43% YoY)
• Operating Margin: 2.62%
• Key Growth Drivers: Segment operating profit decreased 34% year-over-year. This was primarily driven by lower Global Trade results due to compressed margins from negative freight timing and lower trading results, and decreased sales volumes, partially offset by productivity actions and improved Transportation results. North American volumes and margins were impacted by global trade policy uncertainty and lower soybean exports. Crushing results were lower due to reduced soy and canola crush margins and higher manufacturing costs in North America and EMEA, alongside decreased insurance proceeds. Refined Products and Other results were lower due to uncertain trade policy and reduced demand for vegetable oil and biodiesel.

Product Portfolio: This segment includes global activities in origination, merchandising, transportation, and storage of agricultural raw materials, as well as the crushing and processing of oilseeds (soybeans, cottonseed, sunflower seed, canola, rapeseed, flaxseed). It produces and markets vegetable oils and oilseed protein meals for food, feed, energy, and industrial customers. Products include salad oils, margarine, shortening, biodiesel, glycols, peanuts, peanut-derived ingredients, and cotton cellulose pulp.

Market Dynamics: The segment faced compressed margins due to increased global supplies of grains and oilseeds, higher projected ending stocks-to-use ratios, the deferral of U.S. biofuel policy, evolving global trade landscapes, and logistical and weather challenges. North America Ag Services benefited from a partial return of soybean exports to China in Q4 2025, but low water levels slowed execution. South America Origination was negatively impacted by slower corn farmer selling, and the Black Sea business by farmer retention and logistical issues due to the Russia-Ukraine conflict. The postponement of the EU Deforestation Regulation and deferral of U.S. biofuel and trade policy negatively impacted sales volumes and margins in Crushing and Refined Products and Other.

Sub-segment Breakdown:

• Ag Services: $4.57 billion revenue (-2.76% YoY), $636 million operating profit (-11.19% YoY)
• Crushing: $10.35 billion revenue (-12.53% YoY), $159 million operating profit (-81.16% YoY)
• Refined Products and Other: $10.86 billion revenue (+2.43% YoY), $529 million operating profit (-4.17% YoY)
• Wilmar: $290 million operating profit (-13.69% YoY) (equity earnings)

Carbohydrate Solutions

Financial Performance:

• Revenue: $10.74 billion (-4.42% YoY)
• Operating Margin: 11.28%
• Key Growth Drivers: Segment operating profit decreased 12% year-over-year. Starches and Sweeteners results were lower due to reduced wet mill ethanol and starch margins and higher manufacturing costs. North America results in the prior year benefited from $84 million in insurance proceeds, compared to $9 million in the current year. EMEA was impacted by higher corn costs and increased competition. Global Wheat Milling margins improved due to higher wheat basis gains. Vantage Corn Processors results increased due to improved ethanol volumes and margins.

Product Portfolio: This segment involves corn and wheat wet and dry milling, converting these into sweeteners, starches, syrups, glucose, wheat flour, and dextrose for food and beverage applications. Dextrose and starches are also feedstocks for fermentation to produce alcohol and other food/animal feed ingredients. Ethanol is produced for gasoline. By-products include distillers’ grains, corn gluten feed, corn gluten meal for animal feed, and corn germ processed into vegetable oil and protein meal. Citric acids are produced for food and industrial applications.

Market Dynamics: Solid domestic and export demand for ethanol, coupled with lower industry production, helped balance production and demand. North America experienced demand softness in sweeteners, paper, and corrugated markets. EMEA faced challenges from higher corn costs and increased competition. The segment is also advancing carbon capture and sequestration and other emissions-reduction initiatives to support lower-carbon operations and plant-based alternatives.

Sub-segment Breakdown:

• Starches and Sweeteners: $7.98 billion revenue (-7.04% YoY), $1.06 billion operating profit (-21.15% YoY)
• Vantage Corn Processors: $2.76 billion revenue (+4.08% YoY), $152 million operating profit (+360.61% YoY)

Nutrition

Financial Performance:

• Revenue: $7.51 billion (+2.22% YoY)
• Operating Margin: 5.55%
• Key Growth Drivers: Segment operating profit increased 8% year-over-year. Human Nutrition results were slightly lower, with Flavors showing higher volumes and margins in North America from increased sales to existing key customers. Specialty Ingredients results were lower due to higher raw material and manufacturing costs following the resumption of operations at the Decatur East facility, and the absence of $71 million in insurance proceeds received in the prior year. Health and Wellness results were lower due to decreased margins from inventory valuation adjustments and reduced tolling margins from a contract cancellation, partially offset by higher Biotics margins. Animal Nutrition results were higher due to cost optimization efforts and improved margins from feed additives and lower raw material costs.

Product Portfolio: This segment creates, manufactures, sells, and distributes ingredients and solutions for human food, beverages, and nutritional supplements, as well as complete feed, feed premix and additives, pet food, and pet treats for livestock, aquaculture, and pets. Offerings include plant-based proteins, natural flavors and colors, flavor systems, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, postbiotics, enzymes, botanical extracts, edible beans, formula feeds, and animal health and nutrition products.

Market Dynamics: The Human Nutrition subsegment saw continued growth in the Flavors market, particularly in high-value categories like energy drinks and ready-to-drink beverages. The Dietary Supplements market grew in line with historical rates, with expansion opportunities from postbiotics. Clean label and healthier categories are outpacing the broader industry, despite challenges from tariffs and inflation. In Animal Nutrition, declining commodity prices supported feed ration and additive markets, though localized volume softness impacted demand.

Sub-segment Breakdown:

• Human Nutrition: $4.19 billion revenue (+6.16% YoY), $319 million operating profit (-2.45% YoY)
• Animal Nutrition: $3.33 billion revenue (-2.35% YoY), $98 million operating profit (+66.10% YoY)

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: No share repurchases were made in 2025. In 2024, cash paid for share repurchases was $2.3 billion.
• Dividend Payments: $987 million in 2025.
• Future Capital Return Commitments: As of December 31, 2025, the Company had 115 million shares remaining under its stock repurchase program, authorized through December 31, 2029.

Balance Sheet Position:

• Cash and Equivalents: $1.02 billion
• Total Debt: $8.41 billion
• Net Cash Position: $(7.40) billion
• Credit Rating: 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.
• Debt Maturity Profile:
  • 2026: $1.01 billion
  • 2027: $266 million
  • 2028: $0 million
  • 2029: $145 million
  • 2030: $1.01 billion
  • Thereafter: $5.44 billion

Cash Flow Generation:

• Operating Cash Flow: $5.45 billion
• Free Cash Flow: $4.20 billion
• Cash Conversion Metrics: Net cash provided by operating activities increased in 2025 compared to 2024, driven by changes in net working capital. This included a $1.5 billion cash inflow from lower inventories due to reduced commodity pricing and working capital initiatives, and a $1.1 billion cash inflow from payables to brokerage customers due to increased trading activity. These inflows were partially offset by an $823 million cash outflow from accrued expenses and other payables, primarily due to derivative contract valuations.

Operational Excellence

Production & Service Model: ADM utilizes an integrated global origination, logistics, and manufacturing network to transform raw commodities. The Company generally operates its production facilities at or near capacity, adjusting individual facilities based on margin environment and seasonal supply/demand. A comprehensive transportation capability, including owned or leased trucks, trailers, railroad cars, barges, towboats, and ocean-going vessels, facilitates efficient distribution of commodities and processed products worldwide.

Supply Chain Architecture: Key Suppliers & Partners:

• Agricultural Sourcing: Thousands of farmers, grain elevators, and wholesale merchants in North America, South America, EMEA, and Asia-Pacific, primarily through short-term agreements or spot purchases. The Company is not dependent on any single supplier.
• Equity Investments & Joint Ventures:
  • Ag Services and Oilseeds: Wilmar International Limited (22.5% equity interest, also a raw material supplier), Pacificor, LLC, SoyVen Holding B.V., Olenex Holdings B.V. (also a raw material supplier), Edible Oils Limited (also a raw material supplier), Stratas Foods LLC (also a raw material supplier), Terminal de Grãos Ponta da Montanha S.A., Gradable, LLC, and Plainsman Company, LLC.
  • Carbohydrate Solutions: Hungrana Ltd, Almidones Mexicanos S.A. de CV, Aston Foods and Food Ingredients, Red Star Yeast Company, LLC, and LSCP, LLC.
  • Nutrition: Vimison S.A. de C.V., Dusial S.A., Vitafort ZRT, Novial SAS, ADM Matsutani LLC, and Matsutani Singapore Pte. Ltd.
  • Strategic Partnerships: PYCO Industries, Inc. (Plainsman Company JV), Alltech Inc. (North American animal feed JV), Planters Cotton Oil Mill, Inc. (cottonseed JV).

Facility Network:

• Manufacturing: 279 thousand metric tons total daily processing capacity (owned and leased), strategically located in agricultural commodity producing areas.
• Warehousing & Storage: 147 owned warehouses and terminals, with 16.12 million metric tons total storage capacity (owned and leased).
• Research & Development: 71 innovation centers across three continents.
• Transportation: Extensive network of owned or leased trucks, trailers, railroad tank and hopper cars, river barges, towboats, and ocean-going vessels.

Operational Metrics:

• Processed Oilseeds: 36.32 million metric tons (+1.69% YoY)
• Processed Corn: 18.53 million metric tons (-0.09% YoY)
• Total Recordable Incident Rate (2025): Lowest in recent Company history.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Integrated Logistics: Utilizes a comprehensive transportation capability to distribute commodities and processed products globally.
• Direct Sales: Engages directly with thousands of farmers for raw material procurement and serves various end markets including food, feed, fuel, industrial, and consumer products sectors.
• Channel Partners: ADM Investor Services, Inc. offers brokerage services in Europe and Asia.
• Digital Platforms: The Nutrition business focuses on building direct-to-consumer sales channels and leveraging data and technology.

Customer Portfolio: Enterprise Customers: Serves a diverse customer base across food, feed, fuel, industrial, and consumer products sectors, including human food, beverages, nutritional supplements, and animal feed, premix, additives, pet food, and pet treats. Customer Concentration: No material part of the Company’s business is dependent upon a single customer or very few customers.

Geographic Revenue Distribution:

• United States: 36.1% of total revenue
• Switzerland: 22.2% of total revenue
• Cayman Islands: 7.6% of total revenue
• Brazil: 4.2% of total revenue
• Mexico: 3.4% of total revenue
• Canada: 2.2% of total revenue
• United Kingdom: 2.6% of total revenue
• Other Foreign: 19.0% of total revenue

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: ADM operates in an agricultural-based commodity business characterized by wide fluctuations in commodity availability and prices due to factors such as weather, crop disease, government policies, global demand, and competition. The Company's markets are highly price-competitive, with many products being global commodities or derivatives thereof, subject to substitution.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: ADM faces numerous competitors that vary by business segment. In the Nutrition business, competitors include ingredient suppliers, contract manufacturers, global fast-moving consumer goods companies, private label brands, and niche specialists.

Emerging Competitive Threats: The Company faces threats from new products from other industries that can replace its offerings, shifting consumer preferences (e.g., reduced demand for sweeteners, edible oils, or genetically modified products), and product safety and quality concerns.

Competitive Response Strategy: ADM's strategy includes continuous focus on managing unit costs and improving efficiency through technology and productivity enhancements. In its Nutrition business, the Company emphasizes innovation, science-based solutions, direct-to-consumer sales, new market expansion, strategic partnerships, and leveraging data and technology.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: Exposure to wide fluctuations in agricultural commodity availability and prices due to weather, crop disease, government policies, global demand, and climate change. Reduced supply or rising costs of raw materials can impact profitability. High commodity prices increase working capital needs, while abundant supplies can diminish price volatility and reduce market spread opportunities. Selling prices of biofuels (ethanol, biodiesel) are sensitive to petroleum product prices. Global economic downturns can reduce demand for agricultural commodities and food products.
• Technology Disruption: Risks from new products replacing existing functionalities, shifting consumer preferences (e.g., away from certain sweeteners or processed ingredients), and product safety/quality issues.
• Customer Concentration: The Company states no material part of its business is dependent upon a single customer or very few customers.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Business disruption risks from equipment failure, raw material shortages, natural disasters, adverse weather, accidents, fires, cybersecurity incidents, or labor disputes. Dependency on single plants for certain products. Reliance on dependable and efficient transportation services, including navigable waterways, with disruptions impacting material supply and product delivery. Availability of non-agricultural raw materials (e.g., water, chemicals) is also a risk.
• Geographic Concentration: Assets and operations in regions affected by geopolitical conflicts, such as the Russia-Ukraine conflict, face increased risks of property damage, inventory loss, business disruption, and expropriation.
• Capacity Constraints: Disruptions in transportation services could impair the Company's ability to supply materials and deliver products, potentially leading to capacity constraints.

Financial & Regulatory Risks

• Market & Financial Risks: Operating costs and selling prices are sensitive to energy prices, inflationary pressures, and logistics constraints. Working capital requirements are directly affected by volatile agricultural commodity prices. Access to credit markets and borrowing costs depend on maintaining sufficient credit ratings. Foreign currency exchange rate fluctuations also pose a risk.
• Regulatory & Compliance Risks: Subject to extensive U.S. and non-U.S. regulations on food safety, quality, manufacturing, labeling, occupational health and safety, and environmental matters. Evolving ESG regulations, including GHG emissions, can increase costs and require operational changes. Agricultural production and trade flows are influenced by government policies, tariffs, subsidies, and renewable energy mandates (e.g., Clean Fuels Production Credit, 45Z tax credit, Renewable Fuel Standard). Financial and commodities market regulations also apply to its futures commission merchant business and risk management practices.
• Legal Proceedings: Routinely involved in legal actions, including alleged personal injuries, employment law, product liability, intellectual property, environmental issues, alleged tax liability, and class actions (e.g., commodities class actions alleging ethanol price manipulation, shareholder litigation related to intersegment sales). Outcomes are uncertain and could result in material adverse effects.

Geopolitical & External Risks

• Geographic Dependencies: Assets and operations are exposed to geopolitical conflicts, acts of terrorism, war, and piracy, which can lead to property damage, business disruption, loss of value, nationalization, or expropriation.
• Trade Relations: Increases in tariffs and restrictive trade policies can negatively impact market access or product competitiveness, as seen with U.S. soybean trade with China in 2025.
• Sanctions & Export Controls: Compliance with evolving sanction regimes (e.g., against Russia) may require operational adjustments and increase the risk of inadvertent violations, potentially limiting access to supplies or restricting cross-border payment transactions. The Company ceased engagements with CCIC Singapore PTE. Ltd. after its OFAC designation in May 2025.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: ADM's R&D efforts are focused on creating science-based products, solutions, and technologies aligned with macro trends in food security, sustainable processes, health, and personalized nutrition. Strategic investments are made across the entire nutrition value chain, leveraging innovative processes and product optimization. The R&D team is also engaged in BioSolutions initiatives to reduce carbon footprint, redesign core products with sustainable alternatives, and explore new markets. Innovation Pipeline: The Company is investing in enhanced nutrition, biotics, biosolutions, precision fermentation, and decarbonization. R&D Centers: ADM operates 71 innovation centers across three continents.

Intellectual Property Portfolio:

• Patent Strategy: ADM owns trademarks, brands, recipes, and other intellectual property, including patents, with a net book value of $579 million as of December 31, 2025. Over 95% of these intangibles are in the Nutrition segment, which is not materially dependent on any single intellectual property.
• IP Litigation: Legal challenges related to intellectual property, liability for AI-driven decisions, and potential misuse of AI are identified as risks.

Technology Partnerships: ADM maintains ongoing partnerships with government and commercial cybersecurity experts to understand emerging cybersecurity threats.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: ADM invests in training and development programs to enhance technical, leadership, and professional skills, supporting internal talent mobility and succession planning.

Board Composition: The Board of Directors oversees cybersecurity risk as part of the Enterprise Risk Management program, assisted by the Sustainability and Technology Committee and the Audit Committee. A director with prior experience as a Chief Information Officer for a large public company was added to enhance cybersecurity oversight.

Human Capital Strategy

Workforce Composition:

• Total Employees: 41,496
• Geographic Distribution:
  • North America: 18,851
  • Latin America (LATAM): 9,528
  • Europe, the Middle East, and Africa (EMEA): 10,202
  • Asia-Pacific (APAC): 2,915
• Skill Mix: The Company relies on skilled trade and production workers for processing, warehousing, and shipping operations.

Talent Management: Acquisition & Retention: ADM focuses on attracting, developing, and retaining a skilled, engaged, and diverse workforce. This includes market-competitive pay, benefits, and well-being programs (health, wellness, retirement). The Company invests in training and development programs, such as the "Ability to Lead" leadership development program, and early career programs to cultivate future leaders. Employee Value Proposition: ADM aims to foster an inclusive culture where all employees feel they belong and contribute meaningfully, grounded in values of integrity, respect, excellence, resourcefulness, teamwork, and responsibility, as outlined in its Code of Conduct.

Diversity & Development:

• Development Programs: Training and development programs enhance technical, leadership, and professional skills, supporting internal talent mobility and succession planning.
• Culture & Engagement: The Company monitors workforce engagement, turnover, and other people metrics to inform human capital priorities and drive continuous improvement. Safety is a core operational priority, with policies, standards, and training aimed at reducing serious injuries and the total recordable incident rate.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: ADM is committed to sustainable practices to strengthen the Company and the global food system. It aims to drive change through innovative, sustainable solutions in agriculture, food and nutrition, industrial and consumer products, energy, and packaging materials. The Company focuses on scaling regenerative agricultural practices with farmers, modernizing operations to improve efficiency and reduce emissions, and reducing GHG emissions across its business activities and agricultural supply chain. Carbon Neutrality: ADM advances carbon capture and sequestration (CCS) and other emissions-reduction initiatives, positioning its Carbohydrate Solutions segment to offer low-carbon intensity feedstocks. The Company is diversifying and scaling its CCS operations to capture and store greater amounts of CO2. Renewable Energy: ADM is a key producer of biofuels, converting agricultural feedstocks into renewable fuels.

Supply Chain Sustainability:

• Supplier Engagement: ADM supports agricultural resilience and biodiversity by scaling regenerative practices in partnership with farmers, providing tools, insights, and financial incentives. The Ag Services and Oilseeds segment focuses on traceability and low-carbon agricultural practices. The Nutrition segment works with suppliers and customers on nature-positive solutions.
• Responsible Sourcing: ADM has established social and environmental policies for its sourcing operations, addressing risks like deforestation in South American soy and global palm, and environmental risks (water quality, erosion, soil degradation, GHG emissions) in row crops like corn, soy, wheat, and canola.

Social Impact Initiatives:

• Community Investment: ADM's Corporate Sustainability Report provides updates on programs, scenario analysis, and goals related to its social and environmental impact.
• Product Impact: The Company's purpose is to unlock the power of nature to enrich the quality of life, providing food security and offering human and animal nutrition products that support health and well-being.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The Company experiences seasonality in the growing cycles, procurement, and transportation of its principal raw materials (oilseeds, corn, wheat, other grains). Inventory levels typically peak after the northern hemisphere fall harvest and are lower during the northern hemisphere summer months.
• Economic Sensitivity: ADM's business and results of operations are sensitive to global and regional economic downturns, which can lead to reduced demand for agricultural commodities and food products.
• Industry Cycles: Abundant supplies and crop production outpacing demand for extended periods can diminish price volatility and reduce market spread opportunities.

Planning & Forecasting: ADM manages seasonality by operating its production facilities at or near capacity, adjusting individual facilities as needed based on the current margin environment and local supply and demand conditions. The Company also has seasonal financing arrangements with farmers, with advances during planting season and repayment at harvest.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: ADM is subject to extensive U.S. and non-U.S. federal, state, and local regulations covering food safety, quality, manufacturing, labeling, occupational health and safety, and environmental matters. Certain products require regulatory approvals or ongoing compliance with evolving frameworks. Regulatory scrutiny in food, feed, and nutrition sectors continues to evolve. Agricultural production and trade flows are influenced by government policies, mandates, regulations, and trade agreements, including taxes, tariffs, subsidies, and renewable fuels policies (e.g., Clean Fuels Production Credit, 45Z tax credit, Renewable Fuel Standard). The Company's futures commission merchant business and captive insurance provider are subject to additional financial and commodities market regulations. International Compliance: Operating in over 180 countries, ADM must comply with diverse laws and regulations globally, including those related to accounting, income taxes, anti-corruption, anti-bribery, global trade, trade sanctions, privacy, security, and product compliance.

Trade & Export Controls:

• Export Restrictions: International trade regulations can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions.
• Sanctions Compliance: Compliance with rapidly evolving sanction regimes (e.g., against Russia) may require operational adjustments and increase the risk of inadvertent violations, potentially affecting supply chains and cross-border payments. ADM ceased all engagements with CCIC Singapore PTE. Ltd. following its designation as a Specially Designated Global Terrorist organization by OFAC in May 2025.

Legal Proceedings: ADM is routinely involved in various legal actions, including alleged personal injuries, employment law, product liability, intellectual property, environmental issues, alleged tax liability, and class actions. Material litigation includes:

• Commodities Class Actions: Several putative class action lawsuits (e.g., AOT Holding AG, Green Plains Inc., Midwest Renewable Energy, LLC, United Wisconsin Grain Producers LLC) allege that ADM sought to manipulate ethanol derivative benchmark prices, asserting claims under the U.S. Commodities Exchange Act and the Sherman Act.
• Shareholder Litigation: A putative securities fraud class action was filed against the Company and certain officers following an investigation into intersegment sales. Related derivative lawsuits have also been filed against current and former officers and directors.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 14.5% in 2025, down from 21.1% in 2024. The change was primarily driven by the tax treatment of non-recurring items and the Company's geographic mix of earnings.
• Geographic Tax Planning: ADM is subject to income and non-income taxes in various global jurisdictions. The Company's effective tax rates can be affected by changes in the mix of earnings by jurisdiction. ADM has indefinitely reinvested historical undistributed earnings of certain foreign subsidiaries and corporate joint ventures.
• Tax Reform Impact: The U.S. One Big Beautiful Bill Act (OBBBA), enacted in July 2025, includes significant changes to corporate tax rules, deductions, expensing, and international tax provisions, which may affect ADM's tax position. The Company is evaluating the impact of OBBBA and the OECD’s Pillar Two initiative (a 15% global minimum tax) on future tax years as additional guidance is issued.

Insurance & Risk Transfer

Risk Management Framework: ADM's wholly-owned subsidiary, Agrinational Insurance Company, provides insurance coverage for certain property, casualty, marine, medical, and other miscellaneous risks of the Company, and participates in third-party reinsurance arrangements. The Company's risk management efforts include using exchange-traded and over-the-counter commodity instruments to manage price risk for agricultural product inventories and forward contracts. Currency exchange contracts and foreign currency denominated debt are used to hedge investments in foreign subsidiaries. Interest rate swaps are designated as fair value hedges to protect fixed-rate debt from interest rate changes.