ARCHER DANIELS MIDLAND CO | 2013 | FY | 3


Segment and Geographic Information

The Company is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products.  The Company’s operations are organized, managed and classified into three reportable business segments:  Oilseeds Processing, Corn Processing, and Agricultural Services.  Each of these segments is organized based upon the nature of products and services offered.  The Company’s remaining operations are not reportable segments, as defined by ASC Topic 280, Segment Reporting, and are classified as Other.










The Oilseeds Processing segment includes global activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, rapeseed, and flaxseed) into vegetable oils and protein meals.  Oilseeds products produced and marketed by the Company include ingredients for the food, feed, energy, and other industrial products industries.  Crude vegetable oils produced by the segment’s crushing activities are sold “as is” or are further processed by refining, blending, bleaching, and deodorizing into salad oils.  Salad oils are sold “as is” or are further processed by hydrogenating and/or interesterifying into margarine, shortening, and other food products. Partially refined oils are used to produce biodiesel or are sold to other manufacturers for use in chemicals, paints, and other industrial products.  Oilseed protein meals are principally sold to third parties to be used as ingredients in commercial livestock and poultry feeds.  The Oilseeds Processing segment also includes activities related to the procurement, transportation and processing of cocoa beans into cocoa liquor, cocoa butter, cocoa powder, chocolate, and various compounds in North America, South America, Europe, Asia, and Africa for the food processing industry.  In Europe and South America, the Oilseeds Processing segment includes origination and merchandising activities as adjuncts to its oilseeds processing assets.  These activities include a network of grain elevators, port facilities, and transportation assets used to buy, store, clean, and transport grains and oilseeds.  The Oilseeds Processing segment produces natural health and nutrition products and other specialty food and feed ingredients.  The Oilseeds Processing segment is a major supplier of peanuts and peanut-derived ingredients to both the U.S. and export markets.  In North America, cottonseed flour is produced and sold primarily to the pharmaceutical industry and cotton cellulose pulp is manufactured and sold to the chemical, paper, and filter markets.  In South America, the Oilseeds Processing segment operates fertilizer blending facilities.  The Oilseeds Processing segment also includes the Company’s share of the results of its equity investment in Wilmar and its share of results for its Stratas Foods LLC and Edible Oils Limited joint ventures.

The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, with its asset base primarily located in the central part of the United States.  The Corn Processing segment converts corn into sweeteners and starches, and bioproducts.  Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose, and dextrose.  Dextrose and starch are used by the Corn Processing segment as feedstocks for its bioproducts operations.  By fermentation of dextrose, the Corn Processing segment produces alcohol, amino acids, and other specialty food and animal feed ingredients.  Ethyl alcohol is produced by the Company for industrial use as ethanol or as beverage grade.  Ethanol, in gasoline, increases octane and is used as an extender and oxygenate.  Bioproducts also include amino acids such as lysine and threonine that are vital compounds used in swine feeds to produce leaner animals and in poultry feeds to enhance the speed and efficiency of poultry production.  Corn gluten feed and meal, as well as distillers’ grains, are produced for use as animal feed ingredients.  Corn germ, a by-product of the wet milling process, is further processed into vegetable oil and protein meal.  Other Corn Processing products include citric and lactic acids, lactates, sorbitol, xanthan gum, and glycols which are used in various food and industrial products.  The Corn Processing segment includes the activities of a propylene and ethylene glycol facility and the Company’s Brazilian sugarcane ethanol plant and related operations. This segment also includes the Company’s share of the results of its equity investments in Almidones Mexicanos S.A., Eaststarch C.V., and Red Star Yeast Company LLC.

The Agricultural Services segment utilizes its extensive U.S. grain elevator, global transportation network, and port operations to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry.  Agricultural Services’ grain sourcing, handling, and transportation network provides reliable and efficient services to the Company’s customers and agricultural processing operations. Agricultural Services’ transportation network capabilities include barge, ocean-going vessel, truck, and rail freight services.  Agricultural Services segment also includes the activities related to the processing of wheat into wheat flour, the processing and distribution of formula feeds, animal health and nutrition products, and the procurement, processing, and distribution of edible beans.  The Agricultural Services segment includes the activities of Alfred C. Toepfer International, an 80% owned global merchant of agricultural commodities and processed products.  The Agricultural Services segment also includes the Company’s share of the results of its Kalama Export Company LLC joint venture and GrainCorp dividends.  In December 2012, the Company sold its equity investment in Gruma S.A.B. de C.V.

Other includes the Company’s remaining operations, primarily its financial business units, related principally to futures commission merchant activities and captive insurance. 



Intersegment sales have been recorded at amounts approximating market.  Operating profit for each segment is based on net sales less identifiable operating expenses.  Also included in segment operating profit is equity in earnings of affiliates based on the equity method of accounting.  Certain Corporate items are not allocated to the Company’s reportable business segments.  Corporate results principally include the impact of LIFO-related adjustments, unallocated corporate expenses, and interest cost net of investment income.  Corporate results also include the after-tax elimination of income attributable to mandatorily redeemable interests in consolidated subsidiaries except during the calendar year 2012 when the put options related to these interests expired and the results were included in noncontrolling interest.

Segment Information
 
Year Ended
 
Six Months Ended
 
Year Ended
(In millions)
December 31
 
December 31
 
June 30
 
2013
 
2012
 
2012
 
2011
 
2012
 
2011
 
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
 
 
Gross revenues
 
 
 
 
 
 
 
 
 
 
 
Oilseeds Processing
$
38,490

 
$
38,382

 
$
19,465

 
$
18,073

 
$
36,990

 
$
32,011

Corn Processing
13,299

 
11,946

 
6,223

 
6,564

 
12,287

 
10,102

Agricultural Services
46,950

 
49,063

 
25,487

 
24,115

 
47,691

 
45,167

Other
515

 
303

 
151

 
136

 
288

 
265

Intersegment elimination
(9,450
)
 
(9,135
)
 
(4,597
)
 
(3,680
)
 
(8,218
)
 
(6,869
)
Total
$
89,804

 
$
90,559

 
$
46,729

 
$
45,208

 
$
89,038

 
$
80,676

 
 
 
 
 
 
 
 
 
 
 
 
Intersegment revenues
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
3,607

 
$
2,952

 
$
1,413

 
$
736

 
$
2,275

 
$
2,103

Corn Processing
160

 
116

 
56

 
113

 
173

 
194

Agricultural Services
5,470

 
5,904

 
3,046

 
2,751

 
5,609

 
4,417

Other
213

 
163

 
82

 
80

 
161

 
155

Total
$
9,450

 
$
9,135

 
$
4,597

 
$
3,680

 
$
8,218

 
$
6,869

 
 
 
 
 
 
 
 
 
 
 
 
Revenues from external customers
 
 
 
 
 
 
 
 
 
 
 
Oilseeds Processing
$
34,883

 
$
35,430

 
$
18,052

 
$
17,337

 
$
34,715

 
$
29,908

Corn Processing
13,139

 
11,830

 
6,167

 
6,451

 
12,114

 
9,908

Agricultural Services
41,480

 
43,159

 
22,441

 
21,364

 
42,082

 
40,750

Other
302

 
140

 
69

 
56

 
127

 
110

Total
$
89,804

 
$
90,559

 
$
46,729

 
$
45,208

 
$
89,038

 
$
80,676

 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
237

 
$
233

 
$
113

 
$
108

 
$
228

 
$
215

Corn Processing
325

 
332

 
165

 
178

 
345

 
399

Agricultural Services
220

 
197

 
99

 
90

 
188

 
183

Other
5

 
4

 
2

 
2

 
4

 
5

Corporate
40

 
32

 
17

 
13

 
28

 
25

Total
$
827

 
$
798

 
$
396

 
$
391

 
$
793

 
$
827

 
 
 
 
 
 
 
 
 
 
 
 
Long-lived asset abandonments and write-downs(1)
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
4

 
$
1

 
$

 
$

 
$
1

 
$
2

Corn Processing
62

 
23

 

 
337

 
360

 

Agricultural Services
3

 
2

 

 

 
2

 

Corporate
15

 
4

 

 

 
4

 

Total
$
84

 
$
30

 
$

 
$
337

 
$
367

 
$
2


(1) See Note 19 for total asset impairment, exit, and restructuring costs.

 
Year Ended
 
Six Months Ended
 
Year Ended
(In millions)
December 31
 
December 31
 
June 30
 
2013
 
2012
 
2012
 
2011
 
2012
 
2011
 
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
 
 
Interest income
 
 
 
 
 
 
 
 
 
 
 

Oilseeds Processing
$
36

 
$
37

 
$
18

 
$
16

 
$
35

 
$
28

Corn Processing
3

 
2

 
1

 

 
1

 

Agricultural Services
47

 
30

 
18

 
10

 
22

 
23

Other
12

 
18

 
11

 
14

 
21

 
46

Corporate
4

 
22

 
11

 
22

 
33

 
39

Total
$
102

 
$
109

 
$
59

 
$
62

 
$
112

 
$
136

 
 
 
 
 
 
 
 
 
 
 
 
Equity in earnings of affiliates
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
261

 
$
193

 
$
96

 
$
129

 
$
226

 
$
213

Corn Processing
98

 
103

 
49

 
53

 
107

 
83

Agricultural Services
64

 
104

 
49

 
55

 
110

 
230

Other
1

 

 

 

 

 
9

Corporate
(13
)
 
76

 
61

 
14

 
29

 
7

Total
$
411

 
$
476

 
$
255

 
$
251

 
$
472

 
$
542

 
 
 
 
 
 
 
 
 
 
 
 
Operating Profit
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
1,473

 
$
1,620

 
$
747

 
$
429

 
$
1,302

 
$
1,690

Corn Processing
814

 
278

 
71

 
54

 
261

 
1,079

Agricultural Services
380

 
779

 
395

 
563

 
947

 
1,323

Other
41

 
91

 
93

 
17

 
15

 
39

Total operating profit
2,708

 
2,768

 
1,306

 
1,063

 
2,525

 
4,131

Corporate
(684
)
 
(787
)
 
(309
)
 
(282
)
 
(760
)
 
(1,116
)
Earnings before income taxes
$
2,024

 
$
1,981

 
$
997

 
$
781

 
$
1,765

 
$
3,015

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
December 31
 
 
 
 
 
 
 
 
 
2013
 
2012
 
 
 
 
 
 
 
 
Investments in and advances to affiliates
 
 
 
 
 

 
 

 
 

 
 

Oilseeds Processing
$
2,120

 
$
1,889

 
 
 
 

 
 
 
 
Corn Processing
431

 
505

 
 
 
 

 
 
 
 
Agricultural Services
302

 
297

 
 
 
 

 
 
 
 
Other
24

 
18

 
 
 
 

 
 
 
 
Corporate
463

 
461

 
 
 
 

 
 
 
 
Total
$
3,340

 
$
3,170

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Identifiable assets
 
 
 
 
 

 
 

 
 
 
 
Oilseeds Processing
$
15,408

 
$
15,856

 
 
 
 

 
 
 
 
Corn Processing
6,558

 
6,649

 
 
 
 

 
 
 
 
Agricultural Services
12,358

 
14,201

 
 
 
 

 
 
 
 
Other
6,408

 
5,912

 
 
 
 

 
 
 
 
Corporate
3,020

 
2,518

 
 
 
 

 
 
 
 
Total
$
43,752

 
$
45,136

 
 
 
 

 
 
 
 

 
Year Ended
 
Six Months Ended
 
December 31
 
2013
 
2012
 
(In millions)
Gross additions to property, plant, and equipment
 
 
 
Oilseeds Processing
$
302

 
$
259

Corn Processing
317

 
169

Agricultural Services
239

 
182

Other
1

 

Corporate
88

 
31

Total
$
947

 
$
641


 














Geographic information:  The following geographic data include revenues attributed to the countries based on the location of the subsidiary making the sale and long-lived assets based on physical location.  Long-lived assets represent the net book value of property, plant, and equipment.
 
 
Year Ended
 
Six Months Ended
 
Year Ended
(In millions)
December 31
 
December 31
 
June 30
 
2013
 
2012
 
2012
 
2011
 
2012
 
2011
 
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
United States
$
41,427

 
$
47,136

 
$
25,033

 
$
24,490

 
$
46,593

 
$
42,390

Switzerland
10,467

 
9,452

 
4,991

 
5,237

 
9,698

 
8,413

Germany
10,029

 
9,585

 
4,450

 
4,521

 
9,656

 
6,217

Other Foreign
27,881

 
24,386

 
12,255

 
10,960

 
23,091

 
23,656

 
$
89,804

 
$
90,559

 
$
46,729

 
$
45,208

 
$
89,038

 
$
80,676

 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
December 31
 
 
 
 
 
 
 
 
 
2013
 
2012
 
 
 
 
 
 
 
 
Long-lived assets
 
 
 
 
 

 
 

 
 

 
 

United States
$
7,192

 
$
7,287

 
 
 
 

 
 
 
 
Foreign
2,945

 
2,836

 
 
 
 

 
 
 
 
 
$
10,137

 
$
10,123

 
 
 
 

 
 
 
 

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