Archer Daniels Midland (ADM) Issues Update on Audit Committee Led Investigation
ADM (NYSE: ADM) today provided an update with respect to the internal investigation led by the Audit Committee of its Board of Directors regarding certain accounting practices and procedures with respect to ADM’s Nutrition reporting segment, including as related to certain intersegment sales. The investigation was initially disclosed in January 2024.
“Our strong commitment to compliance and integrity in our financial reporting is evidenced by the diligence and breadth with which the Audit Committee has conducted its internal investigation. The adjustments related to the Company’s reporting segments do not impact our consolidated statement of earnings. Looking ahead, we have developed a remediation plan with respect to the identified material weakness to enhance the reliability of our financial statements with respect to the pricing and reporting of such sales,” said Chairman and CEO Juan Luciano. “We remain committed to strong internal controls. We look to continue our focus on execution and remain steadfast in delivering on our purpose of unlocking the power of nature to enrich the quality of life.”
Correction of Certain Segment-Specific Historical Financial Information
The Company has historically disclosed in the footnotes to its financial statements that intersegment sales have been recorded at amounts approximating market. In connection with the investigation, the Company identified and corrected certain intersegment sales that occurred between the Company’s Nutrition reporting segment and the Company’s Ag Services and Oilseeds and Carbohydrate Solutions reporting segments that were not recorded at amounts approximating market. Because intersegment sales occur between the Company’s reporting segments, the adjustments have no impact on the Company’s consolidated balance sheets and statements of earnings, comprehensive income (loss), or cash flows. In addition, the Company determined that the adjustments are not material to the Company’s consolidated financial statements taken as a whole for any period.
Material Weakness Remediation Plan
In connection with the internal investigation, the Company identified a material weakness in its internal control over financial reporting related to its accounting practices and procedures for intersegment sales. ADM remains committed to strong internal controls and has developed a remediation plan to enhance the reliability of its financial statements with respect to the pricing and reporting of such sales. Additional details on the material weakness and related remediation plan can be found in the Company’s most recent Annual Report on Form 10-K.
Government Investigations
ADM continues to cooperate with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) in this matter.
The foregoing is a summary of the internal investigation and related matters. Additional information is available in ADM’s Form 10-K filing on ADM’s Investor Relations website at www.investors.adm.com under “SEC Filings” on the “Financials” page.
Fourth Quarter and Full-Year 2023 Results
In a separate release issued today, ADM reported financial results for the quarter and full year ended December 31, 2023. The Company will host a webcast today, March 12, at 8 a.m. Central Time, to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.