Archer Daniels Midland Stock

Good morning, and welcome to the ADM Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's call, Kate Walsh, Director of Investor Relations for ADM. Ms. Walsh, you may begin.

Welcome to the Third quarter of 2026 Earnings Conference Call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; Jeff Rowe, Executive Vice President and Chief Operating Officer; and Monish Patolawala, Executive Vice President and Chief Financial Officer.

We have prepared presentation slides to supplement our remarks on the call today, which are posted to the Investor Relations section of the ADM website and through the link to our webcast. Some of our comments and materials may 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 and materials are based on many assumptions and factors that are subject to numerous risks 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 presented in the materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events.

In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and the presentation slides, which can be found in the Investor Relations section of the ADM website.

I will now turn the call over to Juan.

Thank you, Kate. Hello, and welcome to all who have joined the call. Please turn to Slide 4, where we have outlined our third quarter highlights. Today, ADM reported adjusted earnings per share of $1.77 and total segment operating profit of $1.4 billion for the third quarter of 2026. Over the trailing 4 quarters, our adjusted ROIC was 9%, and year-to-date cash flow from operations before working capital changes was $3 billion.

Total segment operating profit increased by 64% from the prior year quarter, reflecting another strong quarter of results. Our team executed well in a complex operating environment where global energy prices remained elevated and biofuel margins remained favorable. In Nutrition, flavors delivered operating profit growth year-over-year. and in Animal Nutrition, the portfolio actions we've taken, along with operational improvements are gaining traction and showing up in results.

Given our strong performance year-to-date and our outlook for the remainder of the fourth quarter, we are again raising our full year 2026 adjusted EPS guidance. We now expect a range of $5.50 to $5.80 for adjusted EPS increased from our prior range of $5.15 to $5.60. Throughout this year, our substantial crushing, ethanol and biodiesel footprints have given us tremendous access to a favorable North American margin environment and have been a true competitive advantage. And in Nutrition, we are building momentum.

As we close out the year, we remain focused on continuing to deliver value for our shareholders. In the third quarter, we paid our 379th consecutive quarterly dividend and resume opportunistic share repurchases, which reflects the resiliency of our business the health of our balance sheet and our commitment to returning capital to shareholders.

Please turn to Slide 5. As I reflect on what we have accomplished so far in 2026, our goal coming into the year was clear, control what we can control and achieve better returns than the market delivers. We made real progress on that front and the team executed well against this quarter. I'll give you a few highlights from the third quarter. In Ag Services and Oilseeds, global crush volumes increased year-over-year and our South American team delivered a record quarter for soybean crush volumes. In Carbohydrate Solutions, we sequestered approximately 300,000 metric tons of carbon dioxide during the quarter, and year-to-date, we have sequestered close to 1 million metric tons. And in Nutrition, tangible progress is being made, particularly in flavors and Animal Nutrition.

We also recently announced plans to form a joint venture with CJ that combines our Decatur, Illinois, amino acid facility with select CJ assets. Global market pressures are put in U.S. production of feed-grade amino acids, particularly lysine and risk. This joint venture is designed to change that by creating a more cost competitive, reliable and long-term U.S. source of supply for our customers.

Please turn to Slide 6. Over the past few quarters, we walked you through the long-term growth pathways we are investing in to power our next phase of growth. Last quarter, we focused on natural colors in the U.S. That opportunity remains robust, and our target is unchanged, $80 million to $100 million of annual operating profit uplift over time in Nutrition as customers launch products with natural colors. Today, I want to take a closer look at another pathway, precision fermentation, which sits within our Carb Solutions segment.

Fundamentally, we believe that the combination of biology and technology will be a major driver of food innovation at scale for decades to come. Protein is one of the clearest examples of this. Global demand is outpacing traditional supply and the world needs new sources of high-quality, sustainable protein. By combining our deep R&D expertise with our substantial fermentation assets, we are helping build a more resilient protein supply chain through biomanufacturing. We're already building customers and partnerships across several key areas.

In pet food, we're investing in opportunities to scale animal-free, mid-life proteins, including chicken and land alternatives. For baked goods, protein bars, pasta and other products we're moving toward commercial scale production of an aide ingredient alternative. And in dairy and food manufacturing, where wheat is in short supply, we're working with a technology partner to produce a way alternative that matches the molecular profile of conventional way with more consistent quality.

Three advantages set us apart from peers and derisk the near-term opportunity set for us. First, our feedstock. Our access to commercial scale extra supply gives us a cost and reliability edge. Second, capital efficiency. We're using fermentation assets we already own so we can scale without the time and capital of greenfield projects. And third, our integrated value chain. Our R&D expertise, our global supply chain network and our customer relationships enable us to deliver a wide range of clean label ingredients around the world.

Together, this advantages position us to deploy capital efficiently while helping customers meet growing demand. And the opportunity extends well beyond protein, including natural colors and highlights the strength of our organic growth plans. We continue to showcase other growth platforms in future earnings calls. I'd like to wrap up by thanking our colleagues around the world. Every day you deliver for our customers while building was next to the farmers who anchor our value chain and to our customers and partners who trust us to innovate alongside of them. Thank you. Together, we are connecting the harvest to the home with solutions for today and tomorrow.

I'm now pleased to welcome Jeff Rowe to our earnings calls for the first time. Jeff assumed the newly created role of Executive Vice President and Chief Operating Officer in August with responsibility for our segments, global operations and sustainability. With that, let me turn the call over to Jeff.

Thank you, Juan, and good morning, everyone. I'm excited to join my first ADM earnings call. Since arriving in August, I've spent a lot of time with our teams and our operations around the world. I've been deeply impressed by the quality and the commitment of the employees and the strength and scale of our assets. Right now, I am most focused on 3 key operational areas.

First, operating as a world-class manufacturer. We have made meaningful progress reducing unplanned downtime across much of our network and we see significant opportunity ahead to modernize our facilities and incorporate more automation. That progress is showing up in our results. For example, global crush volumes increased by 1.6% over the third quarter of last year, and we have more room to grow. Second is innovation, which is a particular passion of mine. Throughout my career, I have led large innovation organizations that have embraced technology to create value for customers around the world.

As Juan noted, combining technology and biology to drive food innovation at scale is a significant long-term opportunity for us in a space where we intend to be a leader. We are uniquely positioned to capture this opportunity with our global asset network, which gives us a daily view of how trends are evolving from the farm to the consumer. Few companies can match the depth of data we hold and AI lets us put that data to work, helping make faster and better informed decisions.

We are turning these insights into better solutions for customers and a more durable competitive advantage. I'm excited to leverage my 30 years of innovation experience to advance our efforts in this area. And third, targeted organic investment guided by what our customers need and what would deliver the best returns for our stakeholders. We see 2 categories of compelling opportunity. First is near term, like debottlenecking and expanding existing domestic crush and ethanol facilities, which we recently announced. The second is investing in our value creation pathways, like precision fermentation capabilities and natural colors.

ADM has a strong foundation and a real opportunity ahead as we advance our growth strategy and deliver on our priorities. I look forward to working with the team to build on that momentum. And I'm also looking forward to getting to know many of you in the months ahead.

With that, I'll hand it to Monish to walk you through our third quarter financials and full year outlook.

Thank you, Jeff, and I wish you all a very good morning. Please turn to Slide 7. AS&O segment operating profit for the third quarter of 2026 was $778 million up 105% compared to the prior year quarter. Included in the third quarter results were approximately $35 million of net positive mark-to-market and timing impacts. Refined Products and Other had net positive impacts of approximately $45 million, which were partially offset by modest net negative impact attributable to ag services and crushing.

Ag Services in the current quarter generated operating profit of $172 million, representing a decrease of 9% compared to the prior year quarter. Higher corn and soybean exports out of the United States partially offset softer results in certain markets such as Ukraine. For crushing, operating profit was $311 million for the quarter, an increase of approximately $300 million from the prior year quarter as the business performed well in a constructive North American biofuels margin environment. The constructive margin environment continues to be driven by higher domestic demand resulting from the RBO policy, which was finalized in March of this year, combined with higher global energy prices.

Additionally, the team increased global crush volumes year-over-year and soybean meal demand remained strong throughout the quarter. In South America, crush margins have been pressured by the delay in Brazil's biofuels policy changes. For Refined Products and other, operating profit was $218 million, up 82% compared to the prior year quarter. The year-over-year increase was largely attributable to favorable North American biodiesel margins, driven by higher domestic demand resulting from the RBO policy finalization combined with higher global energy prices. The results were further helped by mark-to-market and timing impacts. For our investment in Wilmar, equity earnings were $77 million for the quarter, up 38% compared to the prior year quarter.

Turning now to Slide 8. For the third quarter, Carbohydrate Solutions segment operating profit was $470 million, representing an increase of 40% compared to the prior year quarter. In starches and sweeteners, operating profit was $324 million, up 11% year-over-year. The improvement was driven by strong ethanol margins, including the benefit of policy incentives. Strength in ethanol margins continued to more than offset the ongoing pressure in liquid sweetener margins and volumes. Further, Starches continue to show stability while global wheat milling volumes remain stable in a competitive pricing environment. In Vantage Corn Processors operating profit was $146 million representing a $103 million increase from the prior year quarter as a corn dry milling ethanol operations benefited from stronger ethanol margins, including policy incentives. Overall, base ethanol EBITDA margins for the quarter were higher compared to the prior year quarter.

Now turning to Slide 9. For Nutrition, segment revenues in the third quarter were $1.8 billion, down 4% compared to the prior year quarter. Human Nutrition revenue decreased by 2%, largely driven by pressure on wholesome ingredients product lines. Animal Nutrition revenue decreased by 6% year-over-year, primarily reflecting our previously disclosed portfolio actions and the formation of the [indiscernible] joint venture. Nutrition segment operating profit was $134 million for the third quarter, representing an increase of 3% compared to the prior year quarter. Human Nutrition operating profit was $93 million, down 3% compared to the prior quarter.

Progress made in flavors and the recovery of the Decatur East plant were offset by unplanned downtime inflation pressures, market softness in biotics and the prior year quarter benefiting from approximately $10 million of insurance proceeds. Animal Nutrition operating profit was $41 million for the quarter, up 21% compared to the prior year quarter, primarily attributable to ongoing improvements and benefits from portfolio actions taken during 2025. Corporate expenses declined year-over-year due to the nonrecurrence of prior year impairment losses. Other business results were higher year-over-year primarily due to a onetime benefit related to the release of certain insurance reserves.

Now turning to Slide 10. For the first 9 months of the year, ADM generated cash flow from operations before working capital of approximately $3 billion. We remain disciplined in how we allocate capital directing investment to the projects with the strongest returns. Through the first 9 months of 2026, we invested $773 million in our footprint. As we continue to be very disciplined on where we invest, we now expect 2026 capital expenditures will be in the range of $1.2 billion to $1.3 billion down from our prior range of $1.3 billion to $1.5 billion.

During the quarter, we returned approximately $254 million in dividends marking our 379th consecutive quarter of paying a dividend. We also resumed opportunistic share repurchases, buying back approximately $360 million of shares and we will remain selective on bolt-on M&A that complements our core businesses. Our net leverage ratio at the end of September was 1.5x, and our year-end target remains unchanged.

Turning now to Slide 11, where we have provided updated details regarding our 2026 outlook. Earlier in the call, as Juan mentioned, we raised our outlook for 2026 adjusted EPS to a range of $5.50 to $5.80, up from the previous range of $5.15 to $5.60. Our raised guidance reflects both our year-to-date performance and our expectations for the fourth quarter. For AS&O, in Ag Services, we are assuming that China continues buying North American soybean. In crushing and refined products and other, we expect the constructive biofuels environment to drive strong year-over-year growth in the fourth quarter. Results should also benefit from the expected reversal of the majority of the net negative mark-to-market and timing impacts carried over from the first 9 months of the year.

As a reminder, we do not include new mark-to-market and timing impacts in our forward guidance. Additional adjustments could arise in the fourth quarter depending on the direction of commodity prices. For Carb Solutions, we expect strength in ethanol margins, including policy incentives to continue to more than offset the softness we are seeing primarily in liquid sweeteners. Additionally, we are raising our net benefit expectations from 45Z to approximately $350 million for 2026, up from our prior expectations of approximately $250 million.

For Nutrition, we expect good year-over-year growth, although the fourth quarter is a seasonally low period of flavors. Additionally, we will work through the ramp-up of the plant currently experiencing downtime and we will navigate through inflation in certain input costs. For corporate, we continue to expect costs to be higher than in 2025, driven primarily by performance-based compensation along with continued investments in research and development and automation and digitalization. And we continue to monitor external factors across the macroeconomic, geopolitical, policy and trade environment.

As you recall, at the beginning of 2025, we had announced an enterprise-wide cost savings program that would have a targeted aggregate cost savings of $500 million to $750 million. The team achieved significant savings in 2025 and the momentum has carried into 2026. We remain on track to achieve our stated targets.

In summary, the third quarter reflected good commercial and operational execution by the team in a complex but constructive global trade and biofuels environment. In closing, I want to thank our ADM colleagues around the world for their focus and execution. It is their hard work that has translated into strong results and the accompanying cash flow funds our priorities today and our growth tomorrow. As we navigate a dynamic global environment, we remain well positioned to deliver on our commitments which in turn will create value for our shareholders.

With this, I'll hand it back over to Juan.

Thanks, Monish. To recap, our third quarter results show a significant step-up in earnings. A constructive biofuels environment, combined with our sizable North American presence and good execution by our team drove the year-over-year improvement, and that combination enables us to raise our full year 2026 outlook again for the third time this year. Longer term, we believe we are well positioned to drive earnings growth through driving cost leadership through technology, expanding high-performing assets and leveraging our existing platform to create value through compelling opportunity sets in Nutrition, biosolutions, precision fermentation and decarbonization.

With that, we'll take your questions now. Operator, please open the line.

[Operator Instructions] Your first question from the line of Manav Gupta of UBS.

Congrats, Juan, Monish, everybody. Third guidance raise in 1 year, beat higher buybacks and lower CapEx. So this is one of those absolutely flawless quarter. I just wanted to start a little bit on the guidance. You have about 2 months left in the year, trying to understand what could put you towards the midpoint of that guide? Or what could put you towards the top end of the guide? And then a broader question on as you enter 2027, what are the major macro outlook in terms of how you're thinking about 2027 amongst your various businesses?

Yes. Thank you, Manav. Listen, as you said, we're raising our guidance for the third time this year to $5.50 and $5.80. The guidance -- the range reflects a strong year over-year execution. I think the team has been performing very, very well in these circumstances. And the expectation that the team will continue to do so through the balance of the year. We have a constructive environment, and I think none of that has changed, particularly in biofuels for Q4. And also remember that biofuel services has very strong quarter in Q4.

So of course, with 1 month of Q4 behind us, there is better visibility. But there is still a lot of market and execution factors that will determine where we land I also remind you that we don't forecast mark-to-market. So those things will happen. Part of our high end is for us to recover a lot of the mark-to-market that is coming back in Q4. We expect a majority of the mark-to-market we still out there to come in Q4. We are expecting still China to count on soybeans. We don't have big expectations for corn at this point in time since we don't have any news on that. So it's a little bit more of the same with the normal seasonality but that we have in the different businesses.

And Manav, just -- you know this, but just for you or others, benefit to flavors usually is the seasonal low for the industry that makes it seasonal low for our business. And even in ethanol, usually, it's a seasonally low for the industry. That also makes it lower for us. And then, of course, as Juan said, the cost out will continue in Q4, just like we did in Q3. And then the other one that I just wanted to call out also here was when you think about the changes that we have done in Q3, we had a onetime benefit of insurance reserves that we released in our captive business. So it's onetime, so that doesn't repeat in Q4. So hopefully, that answers your question.

Sorry, Manav, I was going to answer the second part of your question, you said about '27 and how I look towards that. We look at '27 with optimism. We see a constructive market structure. That actually looks substantially similar to 2026. We expect biofuel demand and margins to remain favorable as we saw during the second half of this year. And we expect there are going to be some supply chain disruptions, and that's where we are set up for. Our assets are our team and normally shine in those circumstances. So our role is to try to bring products to the market regardless of the circumstances.

So I think our global footprint and the team's ability to execute will play well. We're also is a year of investment in 2027. We continue to invest in our future growth through R&D, but also through automation and digitization. And we will continue, as always, we've been in this industry for the last 15 years, we'll continue to be very prudent with our capital allocation. We have the expectation that interest costs will rise year-over-year. in the environment we are in. And we're going to continue to monitor all the variables. Listen, at the end of the day, I expect a year that will look similar fundamentally to 2026, but there are going to be some things that happen in '26 and may not repeat itself, and there may be some new things in 2027 that we'll have to deal with. So it will be somewhere in the ballpark, and we expect to continue to invest in growth in the company.

I'll turn it over and congrats on a great quarter.

Your next question from the line of Andrew Strelzik of BMO Capital Markets.

My first one, building on your answer about '27, you said that the setup broadly looks like the back half of '26. But we've been hearing from some investors that see board crush margins well off the highs, continuing to come in at maybe we're past the peak of the cycle in crush or the cycle is over. So it would be great to get kind of your perspective on what's going on with U.S. board crush recently and where you think we are in the cycle kind of given your comments on '27.

Yes, Andrew, listen, if you think about the macro, and I think that in the [indiscernible] things are going to be moving. In the macro, we still have a strong RBOs. We still have a strong biofuels policy. I don't think the industry is producing to the level that we need yet to match the RBOs. So we continue to see strong soybean oil demand for the business, and we continue to see strong soy meal soybean meal demand. So at this point in time, with the normal durations, you may have maybe crush margins picking in Q3 or there were very high in Q3. We are not seeing a collapse of any of these on the contrary. We see very strong margins still in Q4, and we still see it going forward into 2027. So that's how we're viewing it.

Okay. Okay. That's helpful. And maybe I could also ask about some of your nutrition comments and some of the headwinds that you called out for the quarter. I guess I'm just trying to wrap my arms around how much of those continue in the fourth quarter? It sounds like some. And then should we expect that to linger into '27 or not? And maybe any other color on the nutrition outlook on an underlying basis would be helpful.

Sure. Listen, Nutrition is going to cap a very good year in 2026 versus 2025. And we expect growth in 2027 versus 2026. When you correct for an insurance recovery that we have in Q3 last year, Nutrition overall grew 13% this quarter versus last year. So I think it continues to be a strong business driven mostly by flavors and by the recovery in Animal Nutrition. We had an upset in one plant. We have identified what it is. We are fixing it. I don't want to disclose it for competitive reasons. But that's, I would say, under control.

So nothing that should linger significantly into our P&L. So all in all, we feel very good about the Nutrition business. Flavors continued to do well. We continue to do well around the world. I would say, if you look at Q3, we have a spectacular performance in Europe and Middle East. Asia continues to win customers for us. So no, I think with the exception of relatively smaller P&Ls like wholesale products that are ancient grains, seats and things like that. I think nothing has changed versus what we said last quarter.

Your next question from the line of Ben Theurer of Barclays.

Congrats on another good quarter here. So I wanted to kind of like pick your brain on 2 quick things. So first of all, as we look into some of the dry trade flows and your expectations into the fourth quarter, you said usually tends to be the good one on Ag Services. So -- but how should we think about just the current situation and the backdrop in terms of the merchandising piece and the ex service piece as we look into the upcoming distribution of harvest from North America? And what's your set up here? So that would be the first one. And then I have a quick follow-up on CapEx from Monish.

Yes. Listen, our Ag Services business had actually a good quarter in North America and South America. We had some issues around the world with, of course, the issues that we have in Ukraine, we have revalued some of our inventory there due to our inability to ship some of that. But I would say, in general, although maybe the corn crop -- the corn global production will be a little bit lower and maybe the wheat production will be a little bit lower.

I would say there are no issues around the world. There are on a global basis, there are pockets in which discontinuities happen. And that's where our assets and our team shine. So there are many of them, if you think about probably the North America, and I go to your comment about Q4 and Ag Services, we still expect soybeans to go to China. We still expect probably corn [indiscernible] to go to Europe. Corn has been exported also to all the neighboring countries and Mexico was a big taker and it continues to be. Europe has a very low corn crop on top of a very low corn crop last year. And of course, Ukraine is shut down for meaningful exports at the moment.

So we expect some of that product will flow. So nothing significantly strange that we cannot handle. And we are adjusting every quarter. I will say every month, our trade flows around the world, but nothing that we see that would not fit our assets or our ability to supply it right now.

Okay. Perfect. And then just on CapEx outlook real quick, Monish. If you could talk about behind the idea of lowering a little bit of CapEx. Is that just delaying? Or is that certain projects that have been revised. So just to understand how -- what the setup is in terms of CapEx for the remainder of this year being now at a slightly lower number, how we should then think basically about 2027? What's your thought in terms of CapEx for next year?

Yes. And I go back to the whole discussion we have had a few times on capital efficiency, capital allocation efficiency. And we've said it many times, we are looking at CapEx very carefully, making sure that we are spending money on projects that give us the best return, and we'll prioritize those projects. For example, then you saw last quarter, we announced that we were going to do debottlenecking in our facilities in North America and our soy facilities because that gives us very good return. .

So I would just say this is all a part of that process where we're being very focused, making sure that we're getting the best returns. So I wouldn't read much into this at all. And we'll continue being very prudent in where we invest capital so that we get the best return. As regards to 2027 and beyond, as Juan said last quarter too, right now, when we were coming into Q2, we were in that 1.3% to the 1.5% range. We said in some years will be higher and some years will be lower. But generally, based on everything that we see, the opportunities we have on debottlenecking. The opportunities we have on growth, then it'll land where we land based on what our priorities are and as we see these growth projects come to life.

So again, I would not read much into the fourth quarter down. It's just, I would say, good execution by the team. to make sure we're being efficient.

And sometimes, then what happened is what we're trying is to match the teams that needs to execute. Sometimes, a team needs to fix something or debottleneck something and there was an automation project, we cannot do both with the same team at the same time. So sometimes it's sequencing and staggering of projects that make this change. But you need to think about is something between 1.2 and 1.5 in our future to develop our program and to execute our growth plans. And that will be where you should forecast.

Your next question from the line of Heather Jones of Heather Jones Research.

Congratulations on the quarter. The first question, I was wondering if you could put a bit of a finer point on the '27 versus '26 comments. You mentioned similar fundamentals to second half '26. Should we take from that, that you would expect full year '27 to be better than '26 given a lot of the biofuel policy around the world was it implemented until almost mid-year '26?

Heather, again, first of all, let me say the following because I think I need to reflect properly what's happening in the company. There is still enough volatility in this environment that we cannot take our eyes off the road. So we are focusing on making sure we deliver 2026, and we transition with a lot of momentum into 2027. When we look at the overall '27, what I'm saying is like it should be a little bit of a continuation of what we are seeing right now.

We don't have the wisdom of forecast a big discontinuity in the conditions. We are under RBLs. We have multiyear policies in places like Brazil for biofuels. We have a good demand around the world for ethanol in terms of exports, about 2.4 billion gallons that tightened the market for that and we expect another year of growth in Nutrition. So of course, there are things that we took advantage of in 2026 that we don't know how to forecast those for 2027 and there are going to be things that will show up in 2027, that will give us opportunities that at this point in time. We cannot imagine what they are.

So we continue to position our assets to be the right way. We position our capital to have the capacity to produce this. You see record production in crush in South America, in Brazil for us. We are continuing to increase crush and corn grind in North America. So all we can do is that to prepare for that, but the overall macro continues to be constructive for us. So it's somewhere in the range of what '26 was plus/minus a little bit depending on the condition.

I would also say, Heather, Juan said this in Manav's question earlier, too, continuing to invest in our company for the long run. We've got some exciting growth pathways here that we will decide how much we invest. We've got data and analytics. So that's one thing Jeff also brings to the company is a lot of AI and how to use data. And then, of course, based on the interest rate environment, we could see interest rates higher, but again, it will depend on the environment that we are in.

So I think overall, I'm reiterating what Juan said, the macro conditions seem very similar and constructive, and we'll also decide how much we invest based on that macro conditions. And you've seen, Heather, we've been very thoughtful in our investments, whether it's CapEx, whether it's on spending to make sure that we are doing it and making sure we're creating value for the long run.

Okay. And then just going to your updated 45Z guidance, I don't know if I'm thinking about it the right way or doing math correctly. But just looking at the trajectory of your guidance raises across the year, it would seem like your guidance is now implying $100 million to $125 million-ish per quarter run rate. Am I thinking about that correctly?

So I would say, Heather, there are multiple factors that go into when we give you the 45Z policy benefits, we're giving you the net benefit. The net benefit is made up of what is the base ethanol pricing going to look like? What is prevailing wages? What's the CI score and also what's the depreciation of these assets? So sitting as of right now, we are at $350 million. The team has done a wonderful job at expanding the program, lowering the CI score, et cetera. You will always have ups and downs in the quarter depending on how much CO2, you end up capturing and how some of these other factors play itself out.

But currently, for the year, that's how we see ourselves that is approximately $350 million. And you've seen, as the team has gained confidence in the year, we have been able to raise guidance and I give full credit to the team for doing what they've done.

Your next question from the line of Steven Haynes of Morgan Stanley.

Maybe on a similar line. I know it's not 45Z, but you all had a press release out recently on the voluntary carbon initiatives at Columbus. I was wondering if you could maybe talk a bit more about that and how we should think about maybe the financial impact going into next year. I don't think it's going to be much of a benefit of anything this year. But how do you think about that going forward? And how do those credits get shared with your partner?

Yes. So yes, we announced plans to enter the voluntary carbon removal market through our operations in Columbus, Nebraska corn processing complex. So the facility has the capacity to capture and permanently store more than 800,000 tons per year of biogenic CO2 which is actually what we believe to be one of the largest carbon removal credit offerings of its kind.

So the team at the moment is working through certification and verification process and expect initial credit issuance probably by year-end here in 2026. So this, of course, builds on our capabilities that we have developed over many years in carbon capture and sequestration. And it's another nice way in which we expand our ability to create value with things that don't require any capital, if you will, and supporting growing customer demand for durable carbon removal solutions. Of course, in terms of your financial impact question, this is a nascent market.

So we are watching how market conditions develop a little bit how we approach the market for 45Z. So -- but we believe that regardless of that participation in the market positions ADM to benefit from growing interest in high-quality carbon removals. So at this point in time, are you going to be shy in putting a number out there for 2027 until we see how this, again, nascent market develops. But we're excited about it. We continue to look at -- to show the creativity and initiative of our team to make more money out of existing technologies and assets for ATM.

Your next question from the line of Tom Palmer of JPMorgan.

I know you've addressed some of this in terms of 4Q expectations, but I did just want to clarify something. The annual EPS guidance implies that is lower relative to 3Q. When thinking about the step down, I wanted to make sure I understood like mechanical items that kind of move between 3Q and 4Q versus more operational items? Because I guess, one, was there any sort of true-up just with that big step-up in the 450 that maybe saw a disproportionate capture in 3Q? And then any sizing of what the insurance release was? And then I guess with those 2 items, like when we just look at underlying operations, what are the big moving parts when we look at the results in 3Q versus the results in 4Q, if there are any? .

Sure. I'll try, Tom, because there's a lot that in this that you've asked. So I'll try to make sure I answer it the best I can. And if not, my team will be happy to take a follow-on. So I'll just first start recapping Q3. When you think about what the company delivered $1.77 where EPS was up 92%. When you look at the underlying factors, we had a constructive biofuels market. We had good execution in ethanol and the policy benefits. We had good commercial and operational execution by the team, and we had good growth in flavors, offset by some of the issues that we had in one of our plants with unplanned downtime in Nutrition and you saw Animal Nutrition doing well.

So overall, the setup and the execution was very good in Q3. So I'll first start with that basis that in Q4, if you just take the implied for Q4 based on a year-to-date of $4.32, which is up 69% at the high end of the range, which would be $1.47 at the low end of the range, it will be above [ 17 ]. We would be up either 35% at the low end of the range or 70% at the high end of the range, give or take. So that itself tells you that we continue good execution, number one.

The constructive markets that we told you in Q3 will remain in Q4. There will always be ups and downs depending on market conditions, but that, in general, will remain. Third, ag services, especially North America, always has the higher fourth quarter, and you should see that sequentially 3Q to 4Q should be higher. But we also have industry seasonal lows, whether it's ethanol or flavors, so you need to factor that in when you're doing a sequential 3Q to 4Q. So that's one that you have to factor in. 45Z or net 45Z, depending on how much carbon we can capture could be a little lower than we did in Q3 because we expanded the program in Q3.

So we should see a little bit lower in Q4. And then when you look at Nutrition, as Juan mentioned before, we continue to see the strength in flavors, but it's a seasonal low. So it will be lower sequentially, but still good on a year-over-year basis. Animal Nutrition continues. We have the ramp-up of our plant that was shut down the phased unplanned downtime in Q3, we expect a ramp that will come back in Q4. It's not all going to come back day 1, which is October 1. So you have a little bit of a ramp there. Majority of the mark-to-market that we got in -- that is on our balance sheet in Q3 will come back in Q4. The balance will come out in 2027.

Just for Q3, when you think about our mark-to-market, which came in at $35 million, that is lower benefit than we thought coming in because of the new mark-to-market that we achieved in Q3, but we have told you that we don't know how to project it, not we projected. And it's the same thing in Q4 that we do not predict new mark-to-market. So depending on what prices become on 31st December, you could have a plus or minus there. And then in addition to that, you asked me a question on other, which was insurance. So we released approximately $40 million to $50 million of benefits, which is a onetime benefit with some of our reserves in our captive that do not reverse in Q4.

So I think I've answered most of your questions underlying in our assumption also that China continues to buy, as Juan said, we'll have to see how much they end up buying. So that's something we'll have to work through. But overall, I would just say it's a strong market, constructive market, good execution the fundamentals haven't changed. There will always be puts and takes depending on how the market behaves. But as Juan mentioned, our team is agile. They know how to take advantage of these situations and they will.

Your next question from the line of Matthew Blair of TPH.

Congrats on the good quarter. I wanted to talk more about the precision fermentation opportunity on Slide 6 here. It does sound pretty interesting and exciting and it does seem that ADM is well positioned. Are you ready to talk about a few additional metrics with this opportunity? For example, what do you think is the total addressable market here? What could spending for ADM look like on this project? What kind of timing? And then down the road, is it your expectation that as invest in more downstream applications that the ADM's trading multiple would improve as a result?

Yes. Thank you, Matthew, for the question. Of course, we are excited about the future of precision fermentation. We fundamentally believe that biology is going to play a big role in the future of food. And of course, we are a company dedicated to food and feed in the world. As we get to that future, then maybe a little bit longer term or medium term, we want to make sure that we derisk it for investors. And then what we're doing is we are basing our initial steps on taking advantage of some of ADM strengths.

One is we have fermentation capacity. Second is we have an integration of all our sites and customers and the supply chain. And third, we have a lot of available feed for our strengths. So we're basing on that. And what we're doing is we're getting some sponsoring customers and applications to make sure that everything that we built if we need to build still finishing trains or finishing units that is supported by customer demand that we have. So those are the examples that I mentioned before, whether it's a replacement or whether it's lamb meat replacement for pet food or whether it's wheat protein. We still see the desire to have protein and consistent protein around the world, but we also see the desire to have high-quality tailored products that don't depend on weather products that don't are affected by place. And I think that we see a future in which we can tailor made some of these molecules.

So again, I think that today, this opportunity is a cost. We are investing in it. Over the next 2 or 3 years, it will become profitable and then probably between year 5 and year 10, it will become meaningful hopefully, for ADM. And that's planning horizon we have for precision fermentation.

Sounds good. And then could you just expand a little bit more on the strong results in Carb Solutions for general ethanol industry indicators were down quarter-over-quarter versus Q2 from your peers and ethanol were down as well. S&S was flat. BCP was up quite a bit. So just to make sure we understand here, this is basically a 45Z true-up, so it's recorded much higher 45Z in Q3 versus Q2? Or were there any other like timing or hedging or mark-to-market factors that also helped out?

Yes. I think Matthew, I can't comment on our competitors. I would just say when you think about our ethanol business in total between both our wet mill and dry mills, the team did good execution. We're able to capture the prices, good risk management and then, of course, we expanded the program in 45Z or that we have told you about. So all that put together helped us get a very strong quarter in cards. It was offset partially by softness in liquid sweeteners that we have seen all year long.

We have seen it last year, too. Starches were pretty stable. Wheat volumes were stable, but they were offset a little bit by pricing because in a competitive environment. And I think I've covered all of that. So yes, overall, I would say Chris Cuddy and team did a good job of executing in ethanol and continuing to fight the market conditions in certain products that we have in the food sector.

Your next question from the line of Pooran Sharma of Stephens.

Wanted to maybe focus on the sweeteners business as a lot of the other businesses were well covered. And we're in contracting season, I just wanted to see if you can give us a sense of how negotiations are progressing. We've kind of been hearing that negotiations are getting dragged out and that there's volatility has just been creating some noise, but any kind of color on contract negotiations for the corn sweetener market would be helpful.

Yes. As you said, we are currently in contracting season. So it's a little bit early to draw conclusions. The negotiations are ongoing. We're probably going to have a better view the next time we talk. One thing, Pooran, that I always remind people in this call when I came to the company, there was this famous cliff in which all the contracts were negotiated at the same time. And then over the last 5 to 10 years, the team did a good job of creating a basket of contracts in which we don't have those cliffs.

So to a certain degree, we're always in negotiating season, and we have a very close relationship with all our customers. We understand their logistics and we understand their needs and that's where we're going. So I would say not a lot of clarity or details that I can bring right now, respecting that we're in the middle of some of those negotiations. I would say on the positive side, the business or in different side, the business has done a good job of continuing with the fight for the grind. We see biosolutions applications are up. start being stabilized. So that gives some relief to our sweeteners and starches markets that we have seen some of the volumes being done.

Great. I appreciate the color there, Juan. Just on my follow-up, and I realize it's still early, but just with the midterms in mind and the potential for a shift in the political backdrop, how are you thinking about SET 3 and the current -- and the durability of the current biofuel policy framework beyond '27? Is there any concerns about a potential pullback in blending obligations? And does that uncertainty factor into your longer-term investment decisions?

Listen, my experience, I've been here as CEO through 4 administrations, if you will. So my experience is there is reality behind the policies. And I think all the administrations tend to reflect that. There is a need for higher biofuels. There is a need for supporting demand for agriculture. So I don't expect a fundamental shift. I think that the more administrations bring clarity to market through 100% reallocation of SREs or the more they can bring perspective for long term, like at [ SET 3 ], the more they incentivate production and investments over time.

So we're always going to work closely with any administration to favor the U.S. to favor the farmers in the U.S. but also to favor the world. And the world right now needs more energy, and we see the crisis that we have in refinery products and bringing biofuels. It's not only here in the U.S. We're bringing it in the U.S. We brought in Vietnam. They're being brought in India. They have been brought in Indonesia. They have been brought in Brazil. So I think that this is more than a trend by an administration, it's more a trend of what we need as a society. And ADM will play their role in complying with that.

There are no further questions at this time. I will now turn the call back to Ms. Kate Walsh for closing.

Thank you all for joining the call today. We appreciate your continued interest and support of ADM and wish you a great rest of your day. Goodbye.

This concludes today's call. Thank you for attending. You may now disconnect.

All right. Well, first of all, good morning, everyone. Thanks for joining us for next on stage with ADM, global leader in human and animal nutrition and the world's premier agricultural origination and processing company.

With us today are Monish Patolawala, Executive Vice President and Chief Financial Officer; as well as Ian Pinner, Senior Vice President and President of ADM's Nutrition business as well as Chief Sales and Marketing Officer.

So Monish, you're going to start off with some opening remarks, and then we'll get into our questions.

Sounds great. Thanks for having us, Ben. It's always great to be back here. And Ian, thanks for joining me on stage, and we got my 2 IR friends, Greg and Kate joining us, too. I just thought I'll do a quick recap of the second quarter and where we stand at the first half, and then we'll take the questions the way you see fit.

The team executed well. We delivered $1.84 of adjusted EPS at the end of Q2. For the first half, when you look at where we are, our adjusted EPS is up 50% on a year-over-year basis. Good execution, I would say, across all the 3 businesses. I would say on the commercial and operational side, including manufacturing, the teams have done a nice job of driving volume, capturing some of the opportunities that existed.

When I go through the businesses, I look at AS&O, I look at Carbs, I look at Nutrition. I'll start with Nutrition since Ian is on stage.

The Nutrition business grew approximately 50% on an OP basis in Q2 of this year versus Q2 of last year. You had the AS&O business that grew greater than 100%. And then you had Carbs that also grew very well, thanks to all the work the team has done on ethanol and the policy incentives like 45Z that they were able to capture.

And then when I go to AS&O and I break out Ag Services and Oilseeds, the team did a wonderful job not just managing the risk through the volatility, but also making sure that manufacturing cost execution was great, Ag Services volumes were higher and then our port in Brazil was back online, which was impacted last year that also helped the Ag Services business. I would say from a macro perspective, we continue to see a very constructive biofuel environment as well as we've been helped a little bit by higher fuel prices.

But when I look at our biofuels business and AS&O, I look at ethanol and carbs, they both have shown tremendous strength, future constructive environment, too, and the teams have done very well to capture the opportunities. And this is where the power of ADM comes into play. You have deep domain from a talent perspective. You have a global asset base that we have, and that allows us to capture these opportunities and capture the value that passes through different pieces of the value chain in a very dynamic environment.

So based on where we were for year-to-date as well as where we see the environment to be, we raised guidance again for the second time this year. Currently, our projection is our adjusted EPS for the year is in a range of $5.15 to $5.60. We are, of course, monitoring multiple risk factors that I'm sure many of you and other companies in this conference are monitoring too.

And then I think about capital allocation, Ben, and I look at also just the work the team has done on cash. I would first say the team did a very nice job on executing on the cash. We've been driving for the last 2 years, opportunities in working capital management. So that has been a big driver for us on driving cash. Our ratings are back up to stable in all the 3 different rating agencies that we use.

Leverage at the end of Q2 was approximately 1.6. We have still said leverage will be around 2 by the end of the year. We continue to invest CapEx in the range of $1.3 billion to $1.5 billion. And then dividend, we raised -- we announced our 379th successive quarter of paying a dividend. And then we've been -- we are back in the market with a certain modest share repurchase as we had disclosed during our earnings call.

So overall, I would just say the team has done a really nice job of executing well, navigating through a very, very difficult environment. And we are really jazzed about the future with all the work the team has done, whether it's on future expansion, opportunities for driving more efficiency and then, of course, innovation and growth that we'll be happy to discuss more. So with that, I'll turn it back to you, Ben.

Awesome, Monish. Thanks for that overview, and we'll pick up on a couple of themes. But maybe taking advantage that Ian is with us, and let's start with the Nutrition business. So Flavors growth has been very strong recently, especially in the international markets. What do you credit as a primary driver of the success? And where do you see the sustainable growth rate in that business?

Yes. Thanks, Ben, and hello, and thank you to everybody that's joining us here. So Flavors is compounding. We're seeing growth on growth. The success, if you like, is coming from some core areas. We've got very, very strong customer focus. We really are zeroed in on making sure that we're dealing with our customers' needs and requirements. We've got a team that's executing very well. We spent a lot of time making sure that we've got strong commercial discipline and strong executional discipline as well.

And then I think you're seeing us harvest some of the investments that we've made over the years with Flavors. We spent a long time investing in core capabilities in Flavors since the WILD acquisition in 2014, all the way through to our more recent acquisitions in 2024. And I think the integration of those and the way that the team are operating those as well is really starting to come together with the

Focus that we have on operational excellence, commercial excellence and customer focus.

I think as well, you're seeing strong trends. We're in a market that's looking for opportunities and also dealing with challenges. So reformulation is an area that our team are experts have, whether it's thinking about managing inflation and renovation of existing products, or whether it's thinking about anchoring into the consumer trends that we're seeing now, whether it's health and well being, whether it's the functionality that we're looking for, maybe it's clean label, natural colors. And as well, we're seeing overlaps now in the Human Nutrition business with the change in GLP-1 and proteins and how we're helping with flavor masking and the functionality that's coming from our health and wellness business as well which is then being driven by flavors if you think about the opportunity for functional beverages, which we're very strong and we're seeing customer launches there, too.

I think as well, in addition to that, when we think about the regional base, we've seen strong growth in emerging markets has been good for us, and we made some inorganic investments over the last years, which is starting to really come together and accelerate but we're also building on our base business in North America and in Europe. So we've come from a lower base, and we continue to build on that business. Longer term, our margins are in line with peers. And we target specific areas where our capabilities allow us to grow in excess of the segments that we're targeting in. So longer term, I think you'll continue to see us targeting in excess growth rates from the segments that we're in and those margins at peer levels.

You've picked up on a few trends. So as it relates to like customer preference, any particular changes that you're seeing that excites you more than others? What are you seeing, particularly in customer side?

Yes, always. And I love spending time with customers. So when we're with our customers, we're looking at helping with their challenges, but also the opportunities that we're seeing. And our customers provide us with strong input to our innovation agenda as well. So it's really important that we stay very engaged with what they're working to do so that we can back into how we can support their growth.

We're looking at the continued trends in well-being, there's clean label, there's natural solutions, there's functionality and some structural trends as well around GLP-1.

I was in India a couple of weeks ago, and I was spending time with one of our customers who's launched a prebiotic beverage into the India market using our systems. So they've got our flavors in there, our colors in there and our prebiotics in there. One of the things that excited me a lot coming back from India is not just the structural shift that you're seeing, every meeting you're talking about GLP-1, you're talking about fiber demand, protein demand and then, of course, this middle-class health and well-being focused that is really coming through.

And so I think there's an opportunity that's coming there. And actually, we spent time then with another customer. They were having an innovation day at 1 of our customer innovation centers with our team, where we were really providing that full solution about how do we help them think about the product that they're going to launch next and then provide that solution.

And we got into the postbiotic market and the opportunity there. And I think pretty soon, you'll see them come to market, not just with the prebiotic as they have in their beverages today, plus our colors plus our flavor but also postbiotics as they think about bringing that functionality. We've got investments that we've been making since we got into the Biotics business through our acquisition. And so if you think about opportunities around not just got health but mood and sleep and stress and metabolism. And these are things that really resonate with consumers on a global basis and we're seeing customers looking for us for solutions that really work for them now as they think about launching their new products into the market.

Okay. Good stuff. We'll come back on a couple of that later on. But Monish, I want to go back to you and just pick up on like dynamics into the second half. So in your recent guidance update, you also called out that potentially 3Q might be stronger than 4Q. So can you just walk us through the market landscape that led to this solid assumption? And how does this actually compare to what usually fourth quarter may be stronger, particularly in AS&O from a seasonality perspective?

Yes Monish, sure. So I would say, Ben, when we came into the quarter and we gave you at the end of Q2 and gave you guidance for the second half, we had certain basic assumptions. One is that the biofuels market would remain very constructive. Number 2 is that ethanol margins would remain strong. Ethanol demand would remain strong. Number 3 was our own execution that our teams will continue executing well. And a part of that was Ian's business continues to do well from a sequential execution perspective.

As we reflect on where we were coming into Q3, some of our businesses are longer cycle, some of our business are longer book and some are much shorter. So for example, in our crush business, you have more visibility in a business like ethanol, it's a little shorter cycle. And so coming into Q3, within our crush business, we were pretty much -- we had a good book on, a long book on for Q3. And then for Q4, we were still widely open. And so we had better insight coming into Q3 on what margins we had booked into AS&O. Also, if you remember, Ben, we had mark-to-market that existed as of Q2 that would reverse in Q3 and Q4, so we had more visibility.

So that was like one of the first pillars that we came in when we said that Q3 could be higher than Q4. When you now sit today, you can still say you can see constructive market when you think about ethanol, when you think about biofuels. So margins will always have ups and downs as you go through. But long term, we still see a very constructive market. And at the same time, we have looked at your question on this seasonality. Usually in Q4, you end up seeing ag services higher just because of the export volumes. But you actually see nutrition much lower because their flavors business actually sees a low from a seasonality perspective.

We still believe that the second half is going to be higher than the first half. And Q3 could be higher than Q4, it will all come down ultimately to what margins we can capture in Q4 as we go through the dynamic environment that we are in. And that I think you'll see as we go through the quarter, we'll start filling up Q4.

Now 1 reminder for everybody, and I've said it multiple times and you know this, Ben, mark-to-market does have an impact on our results. We disclosed it. We don't predict it. So all we can do is say what's existing on the book, what we think is going to reverse based on a trend. But any new mark-to-market, which is marked in the last day of the quarter, could have an impact on the results, too. But we'll see what that plays out when the quarter is marked.

Okay. You touched on the volatility. And obviously, macro plays a big role here, and there is still a lot of geopolitical events happening all the time. We get trade flow, demand overall, just things that could impact profits. What do you see as a more like normalized earnings level for the second right now?

Yes. So I would tell you just -- it's a very dynamic environment. So when that dynamic environment actually gives you both, it gives you tremendous opportunities and it also gives you challenges. And the team is working while through capturing the opportunities and trying to eliminate some of the challenges that they face.

Secondly, I would say, as we have reflected over the last few years, today's environment, I think, is hard to compare to some other prior cycle that we have had and say, okay, this is how we have behaved in the prior cycle, we should behave exactly the same. When you think about the dynamic environment, whether you talk about some of the escalations that are going on in Ukraine right now or you thought -- think about some of the export restrictions out of the Black Sea.

The Middle East crisis, the biofuel policy across different countries, whether it's the U.S., et cetera, all of that have an impact on how the world is reacting from a dynamism perspective. What we believe is that we have an asset base and a domain knowledge with our talent that allows us to play very well in this place. ADM was built for complexity. So the scale that we have across all the countries we play in the transportation infrastructure we have, the customer relationships, we have all of that allows us to play in this economy and add value to shareholders for the long run.

You will see quarters that go up or down, but we think we are a better operator now than we were a few years ago, too. We have driven more simplification. We are driving more manufacturing cost efficiency driving more productivity while continuing to invest in innovation for long-term growth. So when you put all that together, Ben, I would try to not say let's focus on 1 quarter or the other, it's more as we see over long term, we feel that through cycles, we can give you a stronger returns just because of what we have done, our asset base, our talent pool and our innovation that we have in a strong balance sheet that allows us to play offense as required.

And picking up on that, and thanks for that detail. If you look at the longer-term growth profile, like beyond, where else do you see you can potentially unlock long-term upside? Is it from the operational level, just within the space in general? Where do you see the opportunities for growth?

So I would say both. I would tell you it's operational and it's innovation/commercial. On the operational side, first step for us is to continue to drive our priorities. The 2 big ones we are driving right now are manufacturing cost productivity coming in, as Juan has mentioned a few times, coming into through the pandemic. We have seen manufacturing costs higher, but most companies are seeing manufacturing costs higher.

So we are driving a lot of efficiency in our manufacturing, making our plants run better, but also going after cost out. The second piece on the cost side is transaction cost. When you think about the work we can do using data and analytics and digital, we can definitely drive better transaction cost out, whether it's in the office functions or whether it is in the manufacturing space.

So that clearly is 1 area. While we are doing that, we want to make sure we keep investing in talent. So there's an investment going on there to keep investing in talent. -- and building the next generation of leaders and making sure we have a strong cash position.

So that's like, I would say, table stakes for us. Then when you think about growth, there are 4 or 5 platforms and a couple of them clearly fall under Ian's portfolio, that's where we are investing in growth. So whether you think about decarbonization, you think about biosolutions, functional health, advanced nutrition, precision fermentation, all of those are platforms that we can keep growing.

These are in areas that we already have deep customer relationships. These are areas we have existing infrastructure in. So we are making smart bets in these areas that we believe with the knowledge that we have and the relationships that we have, we can continue to grow. So you combine operational excellence with commercial/innovation excellence, and that's what gives you the algorithm that for the long term, ADM will be very successful.

Okay. Now picking up on that and maybe that's 1 for Ian. So you also outlined recently the potential for roughly $80 million to $100 million operating profit opportunity from that shift to natural colors in the U.S. as being one of those growth engines. What are you monitoring to evaluate customer adoption and the market size? And does that require any sort of investments and actually to capture the opportunity? .

Yes. Our team is very excited about the opportunity to help our customers with that transition in the U.S. for natural colors. Natural colors is a global market. We're already a strong global player in natural colors. And 1 of the things that excites them is the same team went through the process in Europe, some 10 years ago when we were transitioning from artificial colors to natural colors there. I've talked before about our team's ability to reformulate.

And so we've got a lot of experience, a lot of bench strength when it comes to being able to work with customers who haven't done that before, but we can bring our experiences from the last 10 years. And what happened in Europe and then how we can apply that in North America with some of the same products, but also some of the new innovations that we're bringing through the pipeline from a natural color perspective.

And so we think the addressable market is about $1 billion in the U.S. in revenue. And we think that we've got a strong position in our portfolio and with the capabilities to bring reformulation and as you say, we're targeting $80 million to $100 million of operating profit that we think that we can generate from the transition. And it's not just going to be in North America that you see trends continue. And this is a trend that we think is here to stay for 2 reasons.

You've got consumer. Consumers are looking for more natural ingredients in their products, cleaner labels and we're seeing that shift just here from a global perspective as well. And then, of course, there's regulatory push which is driving some of the change and some of the speed of change too. And I think on that, what you'll see is the speed is going to happen as our customers move. And so what we're looking for is we've got pipeline growth. Are we seeing work actively on reformulation with customers? And then are we converting some of those activities into sales. And at the moment, we're seeing positive signs in all of those areas and some commercial wins coming through from our customer base as we're looking to support them.

The other thing is as you start talking about color reformulation, it's not a one for one. You don't just take an artificial color and put it in a natural color. You've got to think about taste. You got to think about the other ingredients that are going there, shelf stability, shelf life. And so we tend to have bigger conversations. We might start with a color discussion, and then they'll end up getting larger as you think about the opportunity to help those customers with other ingredients that we already have in our pantry, so they don't need to go and talk to another seeing ingredient player.

They can talk to ADM from the pantry perspective, and our teams can bring all of that together, and they do that very well. And then from an investment perspective, we've announced some investments. I think one of the things that inside me is that the team has been very smart in how they're thinking about precise investments for what we need to be able to win for where we're targeting to be successful where we think we've got core capabilities and commercial strength.

And so we're looking at adding capabilities that we don't have now that we think we're going to need in the short term and for the future for different applications, different use cases. And then as well, expanding our capacity, and we're materially expanding our capacity in North America. We announced recently at our site in Erlanger in Kentucky.

And the thing that's exciting is this incremental capacity. So we have an existing infrastructure. We have existing manufacturing footprint, and we're putting incremental capacity on to that, which is great in 2 ways. I think it gives us a speed to market advantage because we now they're having to develop a greenfield site and application. But then at the same time, it's less expensive than building greenfield capacity. And so I'm really proud of how the team is developing and building on that business, and we're supporting them, not just with the investments that we need today, but then future investments as that business continues to grow and expand.

Another area that we've got very strong capabilities is upstream. You've got to make sure that you have the raw materials available for natural colors. And so given our experience in Europe and the fact that we're already a large player globally in natural colors, our teams have been very active with our supply base to make sure that we're thinking about strategic partnerships rather than transactional relationships.

And then I think more medium term, Monish mentioned, things like precision fermentation, that's a play in natural colors, and we've got teams working on technology in that area as well. to be able to bring to market potential future capabilities where we can deliver natural colors and solutions in our Flavors business and then using our precision fermentation capabilities and the core competencies that ADM already has from a fermentation perspective. So it's very exciting for us.

Thanks for that context, Ian. Now pivoting from growing top line a little bit to the bottom line and on the cost savings side, I think you've highlighted you continue to advance on your plans to save approximately $500 million to $750 million cost over the next 3 to 5 years. Where do you feel you are in this plan? Where are we on the journey and what other major projects still need to go on the way to actually achieve it?

So there's been this program we announced Feb of 2025, where we said we would get $500 million to $750 million of cost out, starting in 2025. And the team did a really nice job of driving cost out in 2025. Where we sit today, I think we feel good on where we are based on what we have done. Number

1 is in 2025, we went after SG&A. We drove some of the cost out there. We had procurement savings, and we started looking at our factories and saying, let's go drive better cost out in our factories, get our up time up, so yield and efficiency higher than where it wanted to be. And also at the same time, we looked at portfolio pretty strong, and we made some moves in EM space in our portfolio moves on the majority perspective.

The goal of the program was not just to drive cost out, but actually how we work. The goal was to make a simpler company and easier and a more agile company to deal with. That was the initial goal. So as we have gone through 2025, we've made progress in the areas as I said. And then to your question what is next, the next phase of this is largely going to come from continuing driving manufacturing cost and efficiency and driving transaction costs. On the manufacturing cost and efficiency, part of it is making sure we are seeing where our bottlenecks are, doing a good job on root cause analysis and trying to figure out how do we increase the uptime in these factories while at the same time driving cost out because some of you may or may not know, these -- these oil seeds and carbs businesses, there's a lot of fixed cost that goes into the factory.

So the more the throughput that I can push through this factory, my average cost per unit goes down. So I get the double benefit. I get the lower cost and I get the higher volume, so I get the higher margin. So that is 1 piece. Transactional cost is another big piece that we can go after. Some of you know, I'm a student of lean. So I'll just give you an example in finance, where I want to give a shout-out to my finance team under an umbrella that we call frictionless finance, the team is using lean to say where is friction and what can we do better. So for example, in our global business services business, our AP, accounts payable, cost has come down by 25% since the beginning of the year by just looking at where friction is.

You can apply the same in our IT area, which is where we are going after partnerships, we are relooking at some of our service levels, we get from our vendors. We're reducing the number of vendors. And that's -- and then we've also now opened an ACC, GCC in India, that's also allowing us to take advantage of some of the talent especially on the digital side in India. So that's where I look at this an opportunity and say it's manufacturing cost, and at the same time, it's driving transaction cost that gets us there. And the team is doing a fantastic job of finding "waste in the company" that allows us 1 to reduce cost, but more importantly, make it easier for our employees to do their work.

Okay. Then you talk about like simplification and just improving operations. And 1 example was in the Nutrition segment, we've done a couple of things, plant improvements, portfolio actions -- so if you look ahead, how much margin recovery do you think remains versus what has been captured already? And what are like the steps remaining to close the gap?

It's a good question. We've made a lot of investments in Nutrition over the last 10 or so years. And I think we've got a lot of runway from an organic growth perspective and leverage on margin. The things that we continue to focus on, it's been said a few times over here. If you think about commercial excellence, we're laser-focused on our customers but also how we're working with our customers. So things like investments in AI to help our teams go faster from a front-of-shop perspective, discipline around how we're operating as well across the broader commercial teams, but then as well, the teams have done a really good job from an end-to-end perspective and getting better organized, better integrated on how we're operating, and we have this corporate focus on cash, capital and cost, and we're part of a great corporation. And of course, we're very focused in that area, too.

And Nutrition team has done a lot in those areas, whether it's improving our working capital, simplifying inventories, Think about our supply chains and our procurement -- but then as well, thinking about how we can take cost out in our value chain, but at the same time, making sure that we're not losing the ability to be fast at responding to our customers so that we're giving our commercial teams the kind of motivation that they're looking for and they're wanting to be able to service customers well and compete effectively across the industry where we're choosing to compete in the segments that we're going after.

So that's just day-to-day operations. I mean you talked about some of the things that we work through as well. Decatur East is an area that we've had some challenges over the last couple of years from a supply perspective. I think probably this time last year, the crush plan was coming back up. And so we're seeing now much more reliable supply. So that takes us away from having to buy in our raw materials, source our wine flakes, you've got transportation cost, you've got market costs, you've got the cost of the yields of having to process these products after they've traveled a long way.

And now we're receiving wine flakes directly from the crushing plant indicators. So that's great. That's allowed our teams to go back out and sell, but it takes longer to build back customers who have had to go elsewhere to buy their product than it does to get the plant back up and running.

But we feel really good about the progress that we're making. So we've gone from a headwind in proteins to now a strong contributor compared to where we were. That's helping the Asahi business. You mentioned portfolio. You might remember, we've also rationalized that asset base. So we saw some competition investing in protein in the U.S. And so we shut down some smaller, less cost-effective factories, we transition some of that capability into Decatur and we moved some of the Decatur manufacturing into Europe. So we're really thinking about that as a global asset base and how we can best service our customers, leveraging our overall capacity.

But the underlying objective there is making sure that we have the lowest cost, best quality protein in the industry. And I think the team has done a good job building that back, and that is resonating now with our customers is we've got better manufacturing capabilities, and we're back now supplying them and launching new products and innovating with them.

On the Flavors side, we talked about continuing to build back and the investments that we've been making the organic investments are coming into play now. And then on the Animal Nutrition side, we've been exiting some is returning businesses and continuing to invest in areas where we're getting higher margins and higher growth, especially in the ingredients and feed additives is an area that we're pivoting to.

We're building back our pet business, and that's going much more strongly this year, and that has more runway to go. And our joint venture that we announced in complete feed in North America is coming together very nicely. So I think that in the portfolio, you're seeing nutrition now probably think about it as a second wave of growth coming from a very strong base that the team has put in. I'm really proud of all the work the team has done over the last year to build that back. But we're coming from a very low base compared to where we are.

That said, we talked about the trends earlier, and we think that we're set for the trends, whether it's functional, clean label, we talked about natural colors. We've talked about biotics, postbiotics. We think GLP-1 is structural. And so our protein business plays well into that. We've got a strong fiber portfolio as well, which allows us to support our customers from that perspective. And we're seeing a lot more from a discussion perspective on GLP-1s and how we can work with our customers there.

So we're excited about the future. Our goal is to make sure that we are growing in excess of the segments that we're operating in, and making sure that we're delivering wider margins, and that's really coming from the investments that we've made working closely with our customers, reformulating with the skills that we have with our teams leveraging the ADM pantry where I think we've got an unparalleled capability if you think of some of the things that we've discussed for the ingredients that we're bringing together and then really delivering on our strategy.

Okay. Well, wrapping it up, just real quick, maybe on capital allocation as we are getting against time. So Monish, if you look at capital allocation, just holistically, obviously, a typical decision, CapEx, M&A, investments, and share buybacks and so on. You've announced a couple of debottlenecking efforts for some of the operations. You've already said the $1.3 billion to $1.5 billion on CapEx. How much of that is like kind of like growth, what goes into some of these debottlenecking efforts. And in light of that, wherever leverage stands, how do you feel about buybacks versus M&A?

Yes. So I'll go quick because I know we'll run out of time. Back to a point Ian made earlier, which is we are looking at opportunities on expanding our current plants versus just greenfield. So similar logic that Ian used in Erlanger with the colors we are using in our ag services and oil seed business. So we -- what we did, Ben, was we said we have an existing infrastructure. We have a very constructive market when it comes to biofuels, how do we take advantage of that.

So 1 option, of course, would have been to do a greenfield. The second option, which I think is a much better option would say, how do we unlock capacity in our plants. So that's what we're doing is debottlenecking. So we looked at all our plants. We have 10 plants where we have an opportunity where we said, if we just put a little bit of money and debottleneck them, so study where your bottlenecks are, it creates extra capacity. And at the same time, as I've said before, fixed cost; we put more volume through, your average cost per unit comes down.

So we just announced, we said let's do it in a phased approach. So we're being very thoughtful and disciplined. We said there are 4 plants that we can do it quicker than the other plants, invest approximately $100 million and get more than 700,000 metric tons of capacity that is created out from this expansion. When you think about that, the underwriting of that case is it's good ROIC because one, you have an existing plant, it's far cheaper than putting in a greenfield; and two, you get the higher volume and the lower cost. So that's how we are thinking about being very thoughtful in phases to keep looking at debottlenecking.

You could get similar opportunities in ethanol, you can get similar opportunities in other parts of the world. This was only a North America discussion because that's where also, again, our footprint are so strong in North America that it helps us get a very good ROIC. So that was one.

To answer your second question on share buybacks versus et cetera, the policy that for the last few years that I've been here, Juan and I have talked about, we will always invest first organically, whether it's organic capacity expansions like we talked about, productivity initiatives or organic growth, all of that give us the best return.

The second 1 is dividend. I know dividend return matters to shareholders. We announced a 379th consecutive quarter of dividend pay and then after that, it's either you do M&A or you do share buybacks.

On M&A right now, when we have said this and Juan said it too at the last earnings call, we are looking at bolt-on acquisitions. We are not looking at big transformative M&A, that doesn't mean if we get one, we are not going to do it because one of our biggest things we have worked on is financial flexibility.

For the last 2 years with the environment that we were in, Juan and I made the call to make sure we're going to keep driving cash, we've got the rating agencies all back to stable outlooks. We have a leverage ratio that allows us to play offense if we need.

But right now, we are looking at bolt-on M&As, and we are always looking at those that enhance. And then if we don't have any great M&A opportunities, we will return money back to shareholders, and we have said that. And we have also said based on the environment that we're in, I just said this morning, too, that we are back in the market with some modest share repurchases that we have started in Q3.

So overall, I would just say, as I wrap up, team has done a really nice job executing. There's a lot more we can do. When you think about the constructive environment that we have, whether it's biofuels, ethanol, we are there. We are built for complexity. So when there is opportunities in the market, we'll take advantage of it. We have a strong cash position, so we can play offense. And then some of the innovation ideas that Ian talked about here and other part of the business, is very exciting. So we think about the long-term future of ADM. It's a very exciting place to be. Awesome. And thank you for having us.

Ian, thank you very much for joining us. There won't be a breakout, so thank you very much for joining us this morning.

Thank you.

Hello, everyone. Thank you for joining us, and welcome to the ADM Q2 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. [Operator Instructions] I would now like to introduce your host for today's call, Kate Walsh, Director of Investor Relations for ADM. Ms. Walsh, you may begin.

Welcome to the first quarter of 2026 earnings conference call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; and Monish Patolawala, our Executive Vice President and Chief Financial Officer. We have prepared presentation slides to supplement our remarks on the call today, which are posted to the Investor Relations section of the ADM website and through the link to our webcast.

Some of our comments and materials may 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 and materials are based on many assumptions and factors that are subject to numerous risks 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 presented in these materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events.

In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website. I will now turn the call over to Juan.

Thank you, Kate. Hello, and welcome to all who have joined the call. Please turn to Slide 4, where we have outlined this quarter's performance highlights. Today, reported adjusted earnings per share of $1.84 and total segment operating profit of $1.5 billion for the second quarter of 2026. Our trailing fourth quarter adjusted ROIC was 7.8%, and cash flow from operations before working capital changes was $1.8 billion for the first half of 2026.

Total segment operating profit increased significantly compared to the prior year quarter, driven by several positive factors, including robust commercial and operational execution by our team a constructive biofuels margin environment, elevated global energy prices and momentum in Nutrition led by flavors and progress in Specialty Ingredients. Based on our first half performance and a constructive outlook for the second half, we are again raising our full year 2026 adjusted EPS guidance now to a range of $5.16 to $5.60, up from the previous guidance range of $4.15 to $4.70.

As we look to the second half of the year, we are focused on continuing to deliver on our financial and operational commitments and that same discipline extends to how we allocate capital and return value to our shareholders. During the second quarter, we paid our 378th consecutive quarterly dividend, and we remain steadfast in our commitment to creating and returning value to our stakeholders. Please turn to Slide 5. The second quarter of this year was an important 1 for us, and the team once again delivered while progressing our 2026 priorities.

I'll run through a few highlights. During the quarter, energy markets were supportive of North American biofuel margins following the finalization in March of the renewable volume obligations for 2026 and 2027. Additionally, Global energy volatility was also supportive of biofuel, including crush margins. Our business executed well across our asset footprint amid this constructive backdrop increasing global oilseed process volumes by close to 5% compared to the prior year period, driven by higher asset utilization.

Our Services also delivered strong results in the second quarter. driven by the team strategically leveraging IBM's global asset network in a complex operating environment to deliver value across the agricultural supply chain. South American operations also benefited from the grain export terminal in Barcarena, Brazil returning to full operations along with increased soybean exports, which were supported by higher farmer selling. North American ethanol margins were robust in the second quarter as favorable economics incentivize higher domestic blend rates.

Additionally, elevated global energy prices, coupled with lower U.S. corn prices, enabled U.S. ethanol to be price competitive globally, which provided a favorable U.S. industry-wide export backdrop. Our Nutrition business contributed to robust operating profit results this quarter. led by flavors and supported by progress at the caters and benefit from our portfolio actions in Animal Nutrition. Flavor sales grew across every key region, with particular strength in EMEA and we delivered a record quarter for flavors in Asia Pacific. To summarize, in ASO, our team executed well in a complex and volatile environment strategically leverage ADM's global asset footprint to drive margin and volume uplift in Ag Services, capture strong crush margins in a constructive biofuels environment and deliver nearly 5% crush volume growth year-over-year.

In Car Solutions, ethanol production rose in a strong margin environment and we sequestered 337,000 metric tons of carbon this quarter. In addition, the team built on the momentum in the first quarter with continued improvement in both Human Nutrition and Animal Nutrition. The robust cash flow that our business generates funds our capital allocation and growth priorities. Our growth plan focuses on accretive targeted organic investments across our platform where we see the most compelling opportunities such as expanding domestic crushing and ethanol capacity at existing facilities.

Given the strength of biofuel demand, we have identified 4 U.S. crush facilities for this first phase of expansion which together are expected to deliver a meaningful increase in our North American capacity. Additionally, we are building out precision fermentation capabilities and expanding our natural colors footprint to capitalize on the shift toward cleaner labels and higher plant protein reformulations already underway. Our growth plan is built upon the foundation of operating safely and responsibly. That commitment runs through everything we do. And I'm proud that 2 of our North American facilities were recently recognized by Workplace Safety Awards.

Our recently inducted into Illinois manufacturing associations Hootan. That same commitment to our people shaped how we think about the world around us. While the commercial environment supported our results I will be remiss not to acknowledge the conflict in the Middle East and the escalation of between Russia and Ukraine. Our thoughts are with all those affected -- we have operations in Ukraine and the safety and security of our employees in the region remain our primary concern. While we expect any disruption to our Ecrenian operations to have a limited financial impact to EMEA, the region is an important contributor to global food security and further disruption to grain export was weighed on global grain stocks and increased food prices.

As for what this means for our business, navigating global disruptions is not new to AGM, and we will remain focused on executing on our 2026 priorities and delivering on our long-term plan. Please turn to Slide 6 to discuss our long-term growth plans. We are making purposeful investments now in the platform set to drive the next phase of our growth. we have outlined before the next wave of value creations run through 5 distinct pathways that include a mix of near-term drivers already showing up in our results and longer-term opportunities that will keep scaling. Importantly, each sit in a market we know well, tied to customers' needs, we understand and with the infrastructure largely in place to deliver.

I take a few moments now to highlight our Advanced Nutrition platform in more detail where we are developing innovative solutions as customers shift from artificial to natural ingredients, particularly in North America, where we believe we are well positioned to capitalize on this structural change in the food we eat. One of the more exciting near-term opportunity is the transition from artificial to natural colors. We believe this represents a total addressable U.S. market of roughly $1 billion in revenue, and our target is to capture $80 million to $100 million of operating profit for ADM over time. as we partner with our customers to launch new solutions. We have a well-established global colors business that helped bring similar solutions to our European customers over a decade ago.

Our experienced team is well suited to provide a full suite of solutions to our customers as they navigate the complexities with color, flavor and functionality changes across products of various scales from craft to industrial scale production. Our natural colors pipeline has grown significantly year-to-date, with several notable customer wins. I highlight 2 contracts that we recently signed both to convert artificial red, yellow and orange shades to natural alternatives, 1 across a well-known packaged food line, the other in flavored beverages.

These wins reflect the shift towards cleaner labels, we believe ADM is well positioned to capture and that will add durable recurring sales as the product reach store shelves. Natural colors represent just 1 of several growth engines built into our business. Together with the organic projects we're executing today, they build an enduring growth pipeline that is expected to compound over the years ahead. I want to close by recognizing the people who make all of this possible and to thank the ADM team for all their hard work and everything they do each day to strengthen our company.

It is their commitment to executing on our immediate priorities while advancing our long-term strategy, that is the foundation of our success in a shifting global landscape.

With that, I will hand it to Monish to walk you through our second quarter financials and full year outlook.

Thank you, Juan, and I wish you all a very good morning. Please turn to Slide 7. We AS&O segment operating profit for the second quarter of 2026 was $867 million, up 129% crore to the prior year quarter. Included in the second quarter results was around $100 million of net positive mark-to-market and timing impacts, led by a net positive impact in crushing, a modest net positive benefit attributable to Ag Services and partially offset by a net negative impact attributable to refined products and other of around $50 million. The Ag Services subsegment in the current quarter generated operating profit of $293 million, representing an increase of 159% compared to the prior year quarter. The increase was primarily as a result of strategically leveraging ADM's global asset network in a complex operating environment to deliver value across the agricultural supply chain.

In addition, we benefited from improved performance in South America, partially as a result of the Brazilian export terminal in Barcarena, returning to full operation. For the crushing subsegment, operating profit was $363 million for the quarter, an increase of approximately $330 million from the prior year quarter as the business performed well in a constructive biofuels margin environment. The constructive margin environment was driven by higher domestic demand resulting from the RVO policy, combined with higher global energy prices. Additionally, crush results for the quarter include positive mark-to-market and timing impacts. Further, as Juan mentioned, manufacturing performance further improved year-over-year with global crush volumes increasing close to 5%.

Additionally, soybean meal sales remained strong throughout the quarter, driven by elevated global demand for pork and poultry, which led to a record quarter for the U.S. and Brazilian soybean meal exports. Lastly, included in this quarter's results are insurance proceeds related to Decatur East of approximately $20 million. For the Refined Products and Other subsegment, operating profit was $151 million, down by 3% compared to the prior year quarter. The year-over-year decrease was largely attributable to net negative mark-to-market and timing impacts, driven by improved refining margins as a result of RVO and global energy volatility in North America and Europe.

Margins were somewhat pressured in South America due to oversupply conditions. For our investment in Wilmar, equity earnings were $60 million for the quarter, down 22% compared to the prior year quarter. Turning now to Slide 8. For the second quarter, Carbohydrate Solutions segmenting operating profit was $411 million, representing an increase of 22% compared to the prior year quarter. In Starches and Sweeteners, operating profit was $326 million, up 7% year-over-year.

Ethanol margin strength, including policy incentives drove the improvement. Strength in ethanol more than offset the ongoing pressure on liquid sweetener volumes and margins, which were most pronounced in North America. Further, starch demand stabilized during the quarter, while global beat milling volumes remain relatively stable in a more competitive environment. In the Vantage Corn Processors subsegment, operating profit was $85 million representing a $52 million increase from the prior year quarter as a con dry milling ethanol operations benefited from stronger ethanol margins, along with support from policy incentives and effective risk management.

Overall, base ethanol EBITDA margins for the quarter were higher both sequentially and compared to the prior year quarter. Now turning to Slide 9. For Nutrition, segment revenues in the second quarter were $1.9 billion, down 5% compared to the prior year quarter and inclusive of foreign exchange gains. Human Nutrition revenue decreased by 4% against the prior quarter that included a $55 million benefit from a contract cancellation in health and wellness. Animal Nutrition revenue decreased by 6% year-over-year primarily reflecting our previously disclosed portfolio actions and the formation of the Aquilo's joint venture. Nutrition segment operating profit was $172 million for the second quarter, representing an increase of 51% compared to the prior year quarter. Human Nutrition operating profit was $139 million, up 51% compared to the prior year quarter, driven primarily by the growth in flavors.

Progress with the Decatur east plant also contributed to positive year-over-year results. Animal Nutrition operating profit was $33 million for the quarter, up 50% and compared to the prior year quarter, primarily attributable to ongoing improvements and benefits from portfolio actions taken during 2025. Corporate expense declined year-over-year, driven by lower interest expense this year and the nonrecurrence of prior year impairment losses partially offset by higher performance-based compensation this year. Now turning to Slide 10 for the first half of 2026, ADM generated cash flow from operations before working capital of approximately $1.8 billion.

Our net leverage ratio at June 30 was 1.6x our year-end net leverage ratio expectations remain at approximately 2x. Additionally, given the strength of our balance sheet, cash flow generation and leverage position we are evaluating a return to opportunistic share repurchases later this year. Now turning to Slide 11, where we have provided updated details regarding our 2026 outlook. Earlier today, as Juan mentioned, we've raised our outlook for 2026 adjusted EPS to a range of $5.15 to $5.6 up from the previous range of $4.15 to $4.70.

In addition to our year-to-date performance, our raised guidance was based on 3 primary factors. First, we anticipate our team will continue delivering successfully against our plan through the balance of the year. Second, we expect the favorable margin backdrop across our crushing and ethanol businesses to hold throughout the second half of this year. And third, we expect Nutrition to continue improving operating performance while capturing growth opportunities. As a reminder, the fourth quarter is the seasonal low for our Flavors business. Additionally, our guidance [indiscernible] thus far with China well underway with executing on its commitment to buy 25 million tonnes of U.S. soybeans in 2026 for crushing an RPO, we expect the constructive biofuels environment to support strong growth year-over-year throughout the second half of this year further supported by the realization of the reversal of net negative mark-to-market and timing impacts that we are carrying from the first half of the year.

As a reminder, we do not include new mark-to-market and timing impacts in our forward guidance. Additional adjustments could arise in future quarters depending on where commodity prices move. For Card Solutions, we expect strength in ethanol margins, including policy incentives to continue to more than offset the softness we are seeing primarily in liquid sweeteners. As a result, we are raising our net benefit from 45 to approximately $250 million for 2026, up from our prior expectations of approximately $150 million.

Our year-over-year momentum for Nutrition remains intact with operating profit increasing primarily as a result of higher flavor sales, measured progress with decades and improvements in Animal Nutrition. In corporate, we expect cost to be higher than in 2025 driven primarily by performance-based compensation, along with continued investments in research and development and automation and digitization. And just a quick reminder on modeling incentive compensation. All incentive compensation adjustments are recorded in corporate during the year, with the impact to our operating segments occurring when the nonequity-related payments are made in the first quarter of 2027.

As always, we continue to closely monitor external factors across the macroeconomic, geopolitical policy and overall trade environment with particular attention to the impact volatility could have on our second half results. We also continue to progress our enterprise-wide cost saving programs and remain on track to achieve our targeted aggregated cost savings of $500 million to $750 million over the 3- to 5-year period, which commenced in 2025. And I'll take a moment to highlight progress across the corporate functions in driving reductions in transaction costs. Just to give you a couple of examples, in finance, under an umbrella that we call frictionless finance, we have paired lean methodology with daily management to systematically reduce cost across our transactional processes. Accounts payable is a clear example. Daily management routines surface recuring friction in the invoice to pay cycle and the global shared services team has reduced cost per transaction by roughly 25% since the beginning of the year.

Within Global Technology, we are consolidating to fewer core platforms, eliminating waste and resetting cost structures with our vendor partners. We are building deeper strategic relationships with fewer vendors and the global technology team also has line of sight to meaningful savings over the next few years while increasing investments in digital advancements and cybersecurity. In summary, the second quarter reflected strong commercial and operational execution by the team in a complex but constructive global trade and biofuels environment with solid growth momentum in Nutrition all of which contributing positively to results. We expect the second half of this year will represent more than half of our operating profit for 2026 with the potential for the third quarter to be higher than the fourth quarter largely dependent on how executed crush margins develop in the fourth quarter.

In closing, I want to thank our ADM team members for the focus, discipline and execution they brought to this quarter. It is their hard work in delivering strong commercial and operational performance across all 3 segments and generating the cash flow that funds our priorities. This positions us well to raise our outlook and continue navigating a dynamic global landscape while delivering on our financial commitments and creating and returning value to our stakeholders.

With this, I'll hand it back over to Juan.

Thanks, Manish. To recap, our second quarter results reflect a marked step-up in our earnings, driven by a constructive biofuels environment strong commercial and operational execution and momentum in Nutrition. That combination allow us to again raise our full year 2026 outlook. Beyond 2026, we have compelling growth engines already embedded in the business, the organic investment we're making across our platform and the 5 growth pathways we have outlined, including the natural colors opportunity I discussed today. We're excited about the strength of this organic growth plan, while we continue to be very disciplined with respect to bolt-on M&A. As we execute the journey ahead, we will remain steadfast in our commitment to creating and returning value to our stakeholders.

And finally, before we open the call up for questions, I would like to welcome Jeff Road to ADM who will assume the newly created role of Executive Vice President and Chief Operating Officer, effective August 17. Jeff brings more than 30 years of experience driving growth, operational excellence and commercial success. He joins us from Syngenta, where he serves as CEO of 1 of the world's largest agricultural technology companies with more than 50,000 employees across over 90 countries, a fifth generation Illinois farmer Jeff is a proven industry leader whose appointment complements an already strong management team and build on ADM's momentum around driving innovation and delivering on our long-term growth plan.

With that, we'll take your questions now. Operator, please open the line.

[Operator Instructions] Your first question comes from the line of Manav Gupta from UBS. Please go ahead.

Ongoing. Monish First, congrats on a very strong quarter and another guidance rates. You continue to surprise the Street on the upside. My question here is as I understand, sir, and you can let me know if the understanding is wrong, the reason you are moving ahead with some of these debottlenecking facilities at existing plants because the actual cost in dollars per tonne will be significantly less than if these were actually greenfield expansions. So by moving ahead with this brownfield expansions, your return on investment will be materially higher versus if these actually were going to be greenfield expansions. Could you actually talk about that a little.

Sure, Manav. And I will pass the congrats to the team. Listen, of course, we're always looking for opportunities to deploy capital wisely. As you know, our capital allocation, that's the priority, cost and growth part of the organic plan is the first 1 also with dividends. So as part of that, in crush, we've been expanding. We expanded last year in Brazil where actually capital intensity is -- capital is cheaper in Brazil to be implemented.

So we expanded to, and we completed Overlandiathis year. In the U.S., we have identified 10 plants with potential for capacity unlocks when we look at the overall portfolio, the capital intensity is about 1/4 of what we will cost to build greenfield. So certainly very attractive opportunities. we have decided to have a phased approach to allow for off-ramps to see how the industry develops over time. So in this, what we call Phase 1, we have announced 4 of those 10 plants we are moving forward, which, of course, are the most attractive returns. That is still keeping within our range of CapEx from $1.3 million to $1.5 million at times when we find these opportunities that are very compelling, we might go a little bit higher than that. At times like last year, when we didn't find anything, we were a little bit lower than that. But nothing that it swings completely the range. This Phase I, although it's early on, it could be in the range of $100 million overall for the 4 plants.

So it's not huge. So we feel very good about that. And as we are building this both in North America and Brazil because these are markets where there are strong domestic biofuels markets, and they are very favorable in terms of margins. We are also looking at potentially debottlenecks in ethanol that are driven mostly by our operational excellence efforts as we continue to drive yields and cost improvements in the ethanol plants, naturally, some of that yields some debottlenecking on that. So we're very good about the strength of our organic plan.

Anil just add to Juan's comments that the other benefit of this debottlenecking is manufacturing cost manner. And as you know, there's a lot of fixed cost in these plants. So the modern throughput, the average cost per unit comes down. So all that adds to a very good return in addition to the volume that we get.

Perfect. Well understood Monish. My second and a quick follow-up is, can you talk a little bit about the broad wind project. We see it as something which is a milestone for industrial decarbonization -- can you talk a little bit about that project and the benefits of that project?

Yes. We have a broad strategy of decarbonization. And that's a very important project to bring low carbon intensity energy and his team into the case. So is a large project. We continue to move forward with that. And as I said, this is 1 of the several elements that we have in our decarbonization path a reminder we've been leaders in carbon capture and sequestration that we started like 11 years ago in our wells we're pleased that I think we sequestered 337,000 tons of carbons in this quarter, up from 300,000 in the last quarter. .

So again, it's just a multiyear program and continue to decarbonize and drive based on our sustainability trend that we have put together as part of the strategy about 10 years ago we continue to execute on the strategy and the plans as per schedule.

Your next question comes from the line of Heather Jones with Heather Jones Research.

Good morning. Congratulations on the quarter. I wanted to start with Ag Services. That was much stronger than I was anticipating. And given that the tensions in the Ukraine area of escalated if China continues there being purchased as you're assuming? Do you think Q2 is a high point for the year? Or could we have Q3 and Q4 look better than Q2?

Yes, Heather. A lot going on in the world, as you know. So we continue to price the team in Ag Services and the system we have at times like this is my experience over the last 14 years in ADM that the market rewards our footprint and our flexibility. And all the assets that we have, whether it's transportation and options for origination and destination marketing of offices are basically built to provide the resilience for all these environments in which our role is to make sure that food shows up, whatever it needs to show up at times of crisis or at times of disruptions, is when our team does better because we can flex much more all this ability and all this optionality that we have built in the model.

So as you said, weather across the world is threatening some crops. I mean there are some issues right now with China, especially for corn and maybe wheat and rice, whether it has become too hot and too dry. Certainly, effectively, basically, Ukraine has ceased export through the sea. We've been hit several times whether it was our vessels and our terminals, and I think the whole industry is in the same pace. So very difficult to get cruise to come to pick up vessels. So I would say China continues to buy from the U.S. I think that China want to honor the commitment of 25 million tons of soybean this year.

And certainly, there may be purchases of sort of going to borrowing later on that are less political maybe than corn. So I would say probably Ag Services will be slightly lower only for our own results in Q3 than it was but Q4, it will depend on some of how those exports come into the U.S. and how much can we build sorghum and core program on top of the soybean program that seems to be built in for the later part of the year.

But the team continues to execute well, global trade results were higher in Q2 driven by very strong commercial execution, taking advantage of some favorable market conditions. We continue to have improved destination marketing margins in Asia and good grain trading results. So all in all, I think even our transportation run well, as ocean freight, but also domestic freight. So I would say all the elements have been having good execution and good performance.

Okay. a RPO, I understand biodiesel margins have been strong for obvious reasons. I was wondering if you could talk about the refining margin for veg oil's backdrop and how I believe those have been relatively weak. I'm just wondering how you expect that to evolve throughout this year as EU biofuel policies implemented, the RVO is fully implemented? Just I thought what are your thinking about that setup?.

[indiscernible] business we have there. So if you think about what will drive us to the higher side of the range I think our assumptions are that services benefits from China they've been buying around maybe 1 million tons per week they've been leaning North America coating is basically 90% lock at this point in time for Q3 still open for Q4 is about 30% and so a lot will depend on where we execute those margins in Q4. So we'll have to see we have a Card Solutions ethanol margin strength continue to offset the sweetener, the liquid sweeteners softness, if you will.

And we continue to raise our full year guidance on 45 as the team continues to get more clarity based on implementing processes and operational enhancements, we continue to see ourselves producing more out of that. We had the previous estimate of about $150 million, we're talking about $250 million.

So again, the team or some of the improvements in portfolio that we have done in Animal Nutrition. So overall, we feel good about the rest of the year and moving into with a good exit rate in 2016, moving into 2 but you have to consider, we are been attacking Ukraine, although it's not financially material for us, that could bring uncertainty in global food prices that could bring volatility.

There is weather with a big potential Nine coming. There is still a conflict in the Middle East that every day swings oil prices depending on the statements of the leaders by $3 or $4. And remember that a lot of those increase in oil prices are hitting us as higher energy cost and higher packaging and A lot of things that nutrition is undertaking, and we're managing through. So a lot of external variables and as Monish always remind everybody, we don't forecast future mark-to-market. We expect that the accumulated mark-to-market will probably revert back in the second half, mostly in Q3. So Q4 will depend again on what level of crush margins we execute. But other than that, we feel very solid about it. And when we think forward, and if I can go a little bit further.

Perfect. That was very complete. And actually, on that 1 quick follow-up on pathways. So as you think about it. Globe. We did it before. We are prepared for this [indiscernible].

Product. So we have a lot of expertise what we learned before, and this is where the technology and the knowledge we bring to our customers is we have a pipeline for that, and we are executing through that pipeline, and we feel good about it. I think that as this gains momentum, probably things will accelerate. So I'm optimistic that, that was happened in the past as products start to be launched and they look good and they have customer acceptance. People get more confidence about expanding more swaps and switch so early days, but we feel very good about it. .

Your next question comes from the line of Pooran Sharma with Stephens.

Congrats on the results to you, Jan and to the whole team wanted to absolutely wanted to maybe understand outlook a little bit better. And Monish, you alluded to the back half being predicated on higher gross margins, higher ethanol margins. at covered for Q3 and about 30% for Q4. Is that correct?

That's correct. For North America us same in my earnings pre-read the Q2 was an important quarter for us. And the team executed well, and we were able to capture a lot of the commercial and operational opportunity Steve ever presented to us on a takeup first half, which is around 255, you would you can see that our first second half will definitely be higher than the first half, provided we hit that range 15 to 50, which we feel good about right now. So then comes the question of cadence, Q3 versus Q4. And as we have talked about that in the prepared remarks, I said there's a possibility that Q3 will be higher than in Q4, and that's partly Tim, we have booked already on for crush. So that helps continued execution in Nutrition.

Ethanol continues to remain strong, offset partially by the lower liquid sweeteners volume. How whether Q3 becomes higher than Q4 will also largely depend on where crush margins get locked in for Q4 because we just said we are 30% locked in. in North America for Q4. Then when you think about the margins that you have asked you have asked me, I always go back to, I know a lot of you look at only board crush and you look at board crush and you'll correlate or try to correlate, at the end, what will matter Puran is what does cash margins become in Q3 and Q4. What we have baked in is what we think is a constructive biofuels market, and good demand for ethanol.

Where that will land, I think Puran will have to see. There's a lot of volatility in the market. But based on everything that we are seeing right now, we believe that the $5.15 to $5.60 is a good guide to be -- and as things evolve, we'll definitely keep you posted.

[Operator Instructions] Your next question comes from the line of Andrew Strelzik with BMO Capital Markets.

The first 1 is on the Question is more on the Nutrition segment and primarily on human nutrition. The catering back, it seems like the momentum in human nutrition is kind of rolling how should we think about the durable growth rate of that subsegment? You've talked about colors, but kind of what are some of the other opportunities or drivers moving forward?

Yes. Thank you, Andrew, for the questions. On 45, as I said, we are increasing our full year expectation from $150 million to $250 million. And I think as I mentioned before, we basically every month we go, we're increasing the line of sight into realizing the benefits of this as we continue carbon intensity verification and we're building the operational processes across our [indiscernible] by plan we have the issues so prevailing wages by, we are working on operational excellence, improving yields and trying to make quick debottlenecks and the industry pricing development.

So many, many factors that we put together to come up with this debottlenecks or some benefits that in operational excellence that make us produce ethanol but certainly in the right direction. Moving to Nutrition and human nutrition, as you described. Of course, the color that you just said. But many, many things are going on. I went, for example, to I was very pleased to see our performance in Flavors in Asia, which certainly, we are originally a Western world type of company with WILD Flavors and our participation in North America.

And we've been growing 20% flavors year-over-year in Asia Pacific, and it's been happening all in local customers. And our success with local heroes wherever we go, has been something spectacular because it's not that we're doing copy and paste of Western companies going there is we are winning with the local people in the different geographies in China and the different geographies in Asia. So that's very excited, exciting.

And as you said before, specialty ingredients is improving. It's not only improving because the cater plant is making inroads. And these plants are very complex Listen far for me to say that everything is being sold. We continue to make progress, and we will see that but we are showing up in the market with more volume. And in that sense, we are recapturing some of the volume that we lost over the 18 months, we were not present there. Emulsifiers is doing is also doing better. we see early success in people having more paying more attention and incorporating more post biotics. Of course, the supplement segment has been suffering a little bit because of affordability of consumers and some consumers move more to functionalize food and beverages and replacing maybe expensive supplements but we still see a lot of opportunity and traction in postbiotics and we see the people's attention to bring fiber more into their diets also growing into our P&L.

So we have so many elements of growth that are driving this that we feel good about going forward. difficult given that there are so many bits and pieces to assign a growth rate, we always said that medium term will be growing mid-single digit in terms of labor, and that maybe gives you an estimation of what we're seeing going forward. And of course, we always think that we're going to have operational leverage to that. So OP will grow higher than that. But we've been growing faster than that.

So will try to continue that. But long term, you should think about that at least mid-single digit. And operationally, profits will grow a little bit higher than that.

Your next question comes from the line of Steven Haynes with Morgan Stanley.

A bunch of things covered, but maybe I could ask a question on precision fermentation. You're talking about on the natural color side of it, $80 million to $100 uplift from operating profit. Can you maybe it's too early, but can you maybe put the precision fermentation piece of it in context with that and maybe what the time frame might be for seeing an uplift from that growth opportunity as well? .

Yes. thank you for the question on precision fermentation. I'll add this future platform questions. We are believers that from a food perspective, at the end of the day, in order to fit 10 billion, 10 billion people in the planet. We will have to feed ourselves with animal proteins with vegetable proteins and with microbial-based protein. But this precision fermentation is a platform that we are building for many reasons and many synergies to ADM we are a fermentation company, and we have many fermenters that we can they are underutilized that we can utilize forward.

There is the benefit of having dextrose to provide to that, and that will pull from the fight for the grind that we have in Care Solutions. But the important thing is we needed to prove that this was feasible, and we could produce this a good growth rate with good quality products and at good margins and cost and we have so we are very happy that we have 2 process are demonstrating that with Avery and bond.

Of course, on Avery, we're making a replacement and with bond we're making a Lam for petfood. So we're very excited about that. It shows that we can go to human, and we can go to PET. And we also have an opportunity. We're planning to launch at least 1 natural color based on precision fermentation as well to make sure that we alleviate some of the burden on supply chain for some of these natural products. So we feel that very synergistic in terms of everything we are doing. And we have a lot of potential -- I don't feel comfortable to go public with a number for comparing to the $80 million to $100 million that we're going to be making natural because these are early days, and there are a lot of customer engagement that I also want to respect and to a certain degree, if I aggregate something, I aggregate our own forecast, and I want to be respectful for that. But we are very excited about what this is going to bring to ADM in the years to come.

Understood. And then a quick follow-up on insurance proceeds. Maybe I misheard, but was there a benefit from that in the quarter? And then is there anything else expected for the balance of the year on that front? .

Yes. So we you heard it right. we got $20 million of proceeds for the caters that show up in our AS&O subsegment in our S&L segment. And then depending on whether we get more or not, we're still working with insurance providers and as and when we know more, we'll definitely really keep you all posted.

[indiscernible] the year has progressed. I remember you being somewhat cautious on starches at the beginning of the year. I think to date, you mentioned that starches demand is stabilizing. Is that a fair characterization? And if so, are you seeing better trends in a cardboard or beer? Or what's helping our starches .

Yes. Thank you, Matthew. Yes, we see stabilization in the charge market. And yes, part is card boxes, packaging, all that are, I think, that of industrial domiciliary deliveries is certainly doing better or we see that what we call Biosolutions. And this part of that platform continues to grow or finding nonfood or feed uses to some of our corn derivatives. And that's something we started several years ago. It's a profitable business and continues to grow and help us to put resilience into that. resilience that you can see in our cash flow generation. And I think that it continues to we continue to feel good about the $1.8 billion that we do that we have done so far and that we will continue to deploy in organic investments and given the market environment and strong financial conditions, we may even be evaluating opportunistic share repurchase in this year.

There are no further questions at this time. I will now turn the call back to Ms. Kate Walsh for closing.

Thank you all for joining the call today. We appreciate your continued interest and support of ADM and wish you a great rest of your day. Goodbye.

This concludes today's call. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the ADM Q1 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. [Operator Instructions]

I would now like to introduce your host for today's call, Kate Walsh, Director of Investor Relations for ADM. Ms. Walsh, you may begin.

Welcome to the First Quarter of 2026 Earnings Conference Call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; and Monish Patolawala, our Executive Vice President and Chief Financial Officer. We have prepared presentation slides to supplement our remarks on the call today, which are posted to the Investor Relations section of the ADM website and through the link to our webcast.

Some of our comments and materials may 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 and materials are based on many assumptions and factors that are subject to numerous risks 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 the materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events.

In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website.

I will now turn the call over to Juan.

Thank you, Kate. Hello, and welcome to all who have joined the call. Please turn to Slide 4, where we have outlined this quarter's performance highlights.

Today, ADM reported adjusted earnings per share of $0.71 and total segment operating profit of $764 million for the first quarter of 2026. Our trailing fourth quarter adjusted ROIC was 6.4%, and cash flow from operations before working capital changes was $442 million for the quarter.

Operating performance was robust during the quarter as our team advanced our company priorities, and our crushing and ethanol businesses benefited from an increasingly constructive commodity and margin environment. In particular, soybean crush and ethanol margins strengthened meaningfully as the market anticipated the finalization of renewable volume obligations for 2026 and 2027, which the EPA published on March 27. We commend the administration and the EPA for advancing our renewable volume obligation that strengthens markets for American farmers and enhances America's energy security. The RVO drives demand for corn, soy and other domestic feedstocks, and it supports a reliable domestic fuel supply chain that offers consumers dependable choices in their daily lives.

I also want to thank our team for delivering on our plan in a complex and rapidly changing environment. Based on our expectation that we will continue to successfully advance our priorities throughout the remainder of the year, combined with the expectation that the constructive margin environment we are in continues, we are raising our earnings guidance range for 2026. Our full year adjusted EPS guidance range is now $4.15 to $4.70, up from our previous range of $3.60 to $4.25.

Please turn to Slide 5. As we look at our strategic priorities for 2026, we remain focused on continuing to reduce our manufacturing and transaction costs, generating strong cash flows, investing in our growth platforms, and further developing and expanding our deep bench of talent to support our strategic priorities. Based on these priorities, we achieved notable progress in a number of areas during the first quarter. Here are several highlights.

Our Ag Services business achieved higher North American export activity, which included increased shipments of soybeans and sorghum to China, and the continuation of a strong corn export program. We demonstrated the ability to capture underlying margin opportunities in crushing and refined products and other subsegments. We also delivered strong soybean meal sales during the quarter, driven by robust global consumption.

Our team capitalized on the constructive margin environment for ethanol, with strengthening ethanol margins more than offsetting the continued softness in starches and sweeteners volumes. And our Nutrition business achieved higher flavor sales, and we're seeing momentum built around natural colors and flavors. Also, we are seeing the benefits of our strategic portfolio actions taking hold.

From a manufacturing standpoint, we made solid strides in increasing throughput and decreasing unplanned downtime across our production footprint. During the first quarter, our team delivered strong global crush volumes, with oilseeds tonnage increasing 2% compared to the prior year quarter, and we achieved the best overall global site crush production on record. For Nutrition, the team continued to improve operational execution, and we are seeing substantial progress with the continued recovery of our Decatur East plant and animal nutrition operations.

As we look ahead, we're also targeting a meaningful reduction in transaction costs across our global footprint, including further automation and use of AI in workflows to reduce manual touch points, errors and cycle times. These initiatives also extends to our supply chain management and freight and logistics networks.

We continue to pursue high-growth opportunities that are designed to generate enduring returns. We recently created a new senior innovation and growth leadership role responsible for accelerating projects in this area across the enterprise. A number of the initiatives underway are already generating revenue, and we are encouraged by the progress we are making. I'll talk more about this on the next slide.

All of this is bolstered by the development we are doing around our workforce talent and capabilities. We're strategically focused on making sure we have the right people and skills for both our business needs today and for the future. For example, we recently established the ADM capability center in India to build and maintain deep technical and functional experience in priority areas.

In summary, our team is executing well against our plan, and we're taking advantage of market opportunities while consistently strengthening the performance of our operations. Looking through to the rest of 2026, we have clear priorities that are centered around ensuring we have the right talent and capabilities in place to drive growth, margin expansion and cash flow, while remaining steadfast in our discipline around cost management and capital allocation. And to that end, we remain committed to returning value to our shareholders with the dividend we paid in first quarter representing our 377th consecutive quarterly dividend.

Please turn to Slide 6. We're making disciplined investments today in the platforms that will drive our growth for tomorrow. Our next wave of value creation is grounded in 5 key pathways that span both near-term opportunities already contributing to growth today as well as long-term initiatives that will continue to scale over time. Importantly, these are areas where we understand the markets and the customer needs and where we believe we are well positioned to win.

I'll take a few moments now to discuss our growth pathways in a little more detail. Starting with advanced nutrition, we are developing innovative solutions as customers shift from artificial to natural ingredients, particularly in colors and flavors in North America. We are expanding both capabilities and capacity to meet growing demand for healthier products that deliver on appearance, texture and taste. Within functional health, we continue to build on our leadership in digestive and metabolic health and immune support, with a growing pipeline of solutions targeting stress, mood and sleep.

For biosolutions, our initiatives are centered on valorization or the unlocking of new markets for our existing products, essentially doing more with what we already produce. A concrete example of this is a starch-based component we developed for fabric softeners, for which we were recognized earlier this year with the best innovation contributor award by Henkel Consumer Brands.

In precision fermentation, we see significant opportunities at the intersection of biology and engineering. Advances in technology are enhancing the efficiency and scalability of our existing fermentation assets and we're expanding our portfolio of cleaner, simpler and more sustainable solutions. For example, during the quarter, in animal nutrition, we successfully completed a trial for a scalable animal-free protein for pet food. And in the human nutrition space, we progressed the development of a novel enzyme with widespread functionality in food applications.

And in decarbonization, we are leveraging our existing carbon capture and storage footprint to develop a broader portfolio of solutions. This includes serving customers with high purity CO2 needs, expanding renewable natural gas operations and advancing pathways to convert ethanol into sustainable aviation fuel. During the first quarter alone, we sequestered approximately 300,000 metric tonnes of CO2, a milestone that underscores our leadership in this space.

Taken together, these platforms represent a compelling set of value creation opportunities that leverage our core business and provide meaningful expansion into new markets for years to come.

With that, let me hand it over to Monish to share a deeper dive into our first quarter financials and full year outlook.

Thank you, Juan, and I wish you all a very good morning. Please turn to Slide 7.

AS&O segment operating profit for the first quarter of 2026 was $273 million, down 34% compared to the prior year quarter. Included in the first quarter of 2026 is approximately $275 million of net negative mark-to-market and timing impacts, of which roughly 70% were attributable to the crushing subsegment, and the remaining balance was 2/3 attributable to refined products and other and 1/3 attributable to Ag Services. In the prior year quarter, the net negative impact of approximately $22 million were mainly related to Ag Services.

The Ag Services subsegment in the current quarter generated operating profit of $200 million, representing an increase of 26% compared to the prior year quarter. The increase was driven primarily by higher export activity in North America, which was supported by increased trade with China and a strong corn export program. Additionally, prior year quarter results were pressured by certain export duties.

For the crushing subsegment, we reported an operating loss of $79 million for the quarter, which represents a decrease of $126 million from the prior year quarter. The decrease was driven by net negative mark-to-market and timing impacts. The team executed well during the first quarter of 2026, with planned productivity improving compared to the prior year quarter. Additionally, soybean meal sales remained strong throughout the quarter as a result of strong global demand.

For the refined products and other subsegment, operating profit was $86 million, down 36% compared to the prior year quarter, primarily driven by net negative mark-to-market and timing impacts. Equity earnings from our investment in Wilmar was $66 million for the quarter, down 8% compared to the prior year quarter.

Turning now to Slide 8. For the first quarter, Carbohydrate Solutions segment operating profit was $356 million, representing an increase of 48% compared to the prior year quarter. The period-over-period increase was primarily a result of strengthening ethanol margins, supported by effective risk management and policy incentives.

In the starches and sweeteners subsegment, operating profit was $229 million, representing an increase of 11% compared to the prior year quarter. The increase was driven by stronger results from ethanol in our corn wet milling plants in North America, and was partially offset by lower global liquid sweeteners and starches volumes and margins due to similar trends to what we saw last year.

In the vantage corn processors subsegment, operating profit was $127 million, representing a $94 million increase from prior year quarter. ADM's corn dry milling ethanol operations benefited from strengthening ethanol margins, supported by effective risk management and policy incentives. Overall, base ethanol EBITDA margins for the quarter were higher both sequentially and compared to the prior year quarter.

Now turning to Slide 9. For Nutrition, segment revenues in the first quarter were $1.8 billion, down 1% compared to the prior year quarter. Human nutrition revenue increased by 3% year-over-year, driven primarily by higher flavor sales and inclusive of foreign exchange gains. Animal nutrition revenue decreased by 5% year-over-year, with the decrease primarily attributable to our previously disclosed portfolio exits and the formation of the animal feed joint venture with Alltech, which was partially offset by foreign exchange gains.

Nutrition segment operating profit was $135 million for the first quarter, representing an increase of 42% compared to the prior year quarter. Human nutrition operating profit was $104 million, up 39% compared to the prior year quarter as a result of higher flavor sales and foreign exchange gains as well as the continued recovery of the Decatur East plant. Animal nutrition operating profit was $31 million for the quarter, up 55% compared to the prior year quarter. The increase was primarily attributable to benefits associated with strategic portfolio and cost optimization actions taken over the last year, foreign exchange gains and the increased focus on higher-margin product offerings. Corporate and other businesses contribution to operating profit was lower compared to the prior year quarter, driven primarily by higher claim settlements in other business, which were partially offset by lower corporate function costs.

Turning now to Slide 10. For the first quarter of the year, ADM generated cash flow from operations before working capital of approximately $442 million, approximately flat relative to the prior year quarter. We continue to be very disciplined in the areas in which we invest. During the first quarter of 2026, we invested $194 million and maintain our expectations of full year 2026 CapEx being in the range of $1.3 billion to $1.5 billion.

During the quarter, we distributed $254 million in dividend, marking our 377th consecutive quarter of paying a dividend. And lastly, our net leverage ratio at March 31 was 2.2x, which is higher than the previous quarter. However, this is generally in line with our expectations given the normal seasonality of our business and the impact of higher commodity prices. Our year-end net leverage ratio expectations remain at approximately 2x.

Now on to Slide 11, where we have provided details on our updated 2026 outlook. Earlier today, as Juan mentioned, we raised our current outlook for 2026 adjusted EPS to a range of $4.15 to $4.70, up from the previous range of $3.60 to $4.25. There are 2 main drivers to our guidance range. First, the expectation that our team will continue to solidly execute against our plan for the remainder of the year; and second, the expectation that the improved margin environment for crushing and ethanol businesses will continue.

Overall, our guidance range is underpinned by several factors. In AS&O, first quarter 2026 results include approximately $275 million of net negative mark-to-market and timing impact. Negative mark-to-market and timing impacts are the result of increasing commodity prices, and in this case, signal improving underlying market conditions for us.

As a reminder, the final impact of the mark-to-market and timing impacts will be realized when the underlying inventory forward contracts and futures and foreign currency contracts are executed. Based on that, the majority of the $275 million of net negative mark-to-market and timing impacts reported in the first quarter are forecasted to reverse in the second quarter. The remaining impacts are forecasted to reverse during the second half of this year.

As a reminder, we cannot and do not estimate new mark-to-market and timing impacts in our guidance, and there could still be additional mark-to-market and timing impacts in future reporting periods. In Ag Services, we are assuming that China will resume a normalized buying pattern for North American soybean. For Carb Solutions, we expect strength in ethanol margins supported by policy incentives will continue to more than offset softness in starches and sweeteners as the same consumer behavior trends we experienced in 2025 continue to pressure S&S volumes and margins.

Expectations for year-over-year growth in Nutrition remains intact, with operating profit increasing primarily as a result of higher flavor sales, continued recovery in Decatur East and margin expansion in Animal Nutrition as we maintain our focus on higher-margin product lines and ongoing cost optimization initiatives. We will continue to closely monitor external factors, including consumer trends, energy costs, supply chain dislocations along with global trade and tariff dynamics, foreign exchange and ethanol industry development throughout the balance of the year. We also are progressing the cost savings program we launched last year, and remain on track to achieve our targeted aggregate cost savings of $500 million to $750 million over the 3- to 5-year period which commenced in 2025.

In summary, Q1 presented a dynamic market environment, characterized by significant events that created challenges but also created opportunities, and we were well positioned to capitalize on the environment as evidenced by the underlying margins across our Ag Services and Oilseeds businesses and our ethanol operations. Beyond that, we continue to execute well in our Nutrition business, particularly in our flavors product line.

In closing, I would like to recognize our ADM team members for their focus and dedication in executing against both our near-term objectives and our strategic priorities. It is their hard work that positions us well in a rapidly shifting global landscape, enabling us to continue delivering on our financial commitments and consistently returning value for our shareholders.

With this, I'll hand it back over to Juan. Juan?

Thanks, Monish. As we look ahead, we are increasingly constructive on our outlook for 2026. Despite the complexity of the global environment, the policy clarity we now have, combined with our team's disciplined execution, position us well to deliver meaningful growth in 2026. Beyond 2026, we have a clear road map for long-term value creation that we're actioning, one that leverages both our deep capabilities and the breadth of our operations to create enduring value for years to come.

With that, we'll take your questions now. Operator, please open the line. Operator, please open the line.

[Operator Instructions] Your first question comes from the line of Manav Gupta from UBS.

Congrats on a strong quarter and a guidance raise. The beat and race story is always welcome. My quick question here is, obviously, sir, there's one part where the RVO is helping you, policy formalization is helping you. But there is another part where [ world ] is generally short diesel, and what we are seeing out there is globally shortages of diesel and one area where U.S. is somewhat unique is we have this level of higher renewable diesel, biodiesel production, we can do to meet some of those challenges. And I just wanted your view on it. Are you already seeing out there, producers with ideal plants who are not running that hard in 2025 already looking to run much harder in 2026? And how does that benefit ADM? If you could talk a little bit about that.

Yes. Thank you, Manav. Listen, I think we said it in the previous quarter what we expected the RVO impact was going to be in the market. The first thing that we said, it was going to come in RINs coming up, and we saw RINs going up by $1. Then that created a margin for all these biodiesel plants and renewal diesel plants to come on stream. That pulled soybean oil demand and that increased crush margins, so crush rates. So if you look at on margins. So if you look at crash rates for March, we jumped 6%. So crush rates in March for North America run about 10% higher than last year.

So I think that it happened in the sequence we expected. Probably, it's happened with more violence than we expected. It was faster maybe because of pent-up demand. We've been waiting for RVOs for a couple of years or maybe the effects of shortages or the perception of shortages given the Strait of Hormuz issues. But -- so we see that. We see that biodiesel traded mostly with RVOs, I would say. And we see those plans coming on stream. So yes.

Perfect. My quick follow-up is on human nutrition, a very positive trend, revenue up 3%, but profit up 39% in human nutrition. Can you talk a little bit about that positive trend? And what's driving the improvement in profitability in the human nutrition business?

Yes, the team did a very good job. Of course, part of the drivers are in flavors, and I think that our -- they can continue to convert our pipeline, and maximizing profitability with product mix, cost management, the normal levers you pull in these cases.

I would say you also have to remember that we finally brought the Decatur East plant back. That product has always been lauded as the best quality in the industry. And now we are back with our full volume and recovering the position we lost over the last couple of years. So I think that very strong performance in both areas in human nutrition, and we expect that to continue into Q2.

Manav, as for our script, we had some foreign exchange gains that help us there, too. But operationally, the team did very well.

Congrats on a very good quarter.

Your next question comes from the line of Ben Theurer from Barclays.

Congrats on a very good first quarter. Maybe just following up on some of the changes to guidance, and if you could maybe help us frame a little bit the high versus the low end of it? I mean, I guess the market was expecting some sort of a race. But just to understand what factors you're kind of like seeing that could drive you to the higher end of that new guidance versus what are the risks that keep you on the lower side? That would be my main question.

Yes. Let me give you a flavor, and maybe Monish can chime in later. So we underpin the raising guidance on, of course, the continued advancement of our priorities that the team continues to execute well, and this constructive biofuels environment that we got after the clarity with the RVOs.

If you think about the businesses, from an AS&O Ag Services perspective, we expect a normalization of the offtake of soybeans from China. And then we continue to expect a constructive biofuel environment going forward. We expect the majority of our -- you know the big mark-to-market, we have $275 million in Q1. We expect the majority of that to come back in Q2. But of course, margins, as they continue to climb, we may generate new mark-to-market that we don't have the ability to forecast, that is not included in our guidance.

From a Carb Solutions perspective, we expect the same dynamics, a little bit of softer sweeteners and starch, with a strong ethanol dynamics to continue into Q2 and probably the rest of the year or at least the rest of the summer. And nutrition growth continued to be intact the way we see it forward with strong flavors, with still a strong recovery of specialty ingredients given by the Decatur plant being back. And animal nutrition continues to -- on a smaller scale because it's smaller than human continue to put very good year-over-year improvements based on their improvement plan, but now they are shifting to more specialty products. So all in all, we see most of our business doing very, very well.

I think, Ben, you had a question on what risks also we are watching. If you've seen the strip we had laid it out, but just again to reiterate. Of course, we'll watch all external events that play out. But energy costs, foreign exchange, input cost for nutrition, global trade policy, all of those tariffs are all things that we are watching, and we'll keep you all posted as we see things evolve.

Okay. Fantastic. And then just quick follow-up on the sweeteners and starches business within Carb Solutions. Obviously, that continued weakness something we've kind of like seen industry-wide. What are the -- are there any specific measures that you can take to kind of like maybe stop the bleeding a little too harsh, but like stop the decline be supportive here? Are there any things around innovation or things that you can do shifting away from that business on the sweeteners side? What are like the things you're looking at in order to kind of like manage that business?

Yes. We've been working for many years in the diversification of the grind that you've heard us many times saying the fight for the grind. So we produce many products and that helps sometimes soften this. You heard us saying talking about biosolutions and how we are moving some of those products into different applications, industrial applications. So we have some successes with starches in places like personal care or fabric softeners, things like that. So is a slow because, of course, those markets are smaller than a sweeteners market, and then it takes more effort, but we continue to have efforts there to diversify the grind. We can't invent that Mexico will help us with a great World Cup. Everybody will drink lots of softdrinks.

I'm going to do my best.

Help us.

Your next question comes from the line of Pooran Sharma from Stephens, Inc.

Congrats on the strong results here. I maybe wanted to just focus on -- absolutely, the first question, just wanted to focus on ethanol. Can you talk about what is driving margin strength here? I think it's export demand. And there was momentum prior to the start of the conflict with Iran. So just want to understand from your point of view, what is -- what's driving this? And have you seen any incremental upside from the conflict?

Yes. Listen, as you said, before the conflict, we were already seeing good margins for ethanol. I think that we had rough weather, in general, that affected some of these plans with the polar vortex in January or something. So we were coming into an environment we had strong domestic demand, given by the tightening of the RINs and the values of the RINs.

Also a strong export demand. Demand for exports were about 10% year-over-year. So that was pulling on an industry that was not producing fully, and I draw down inventory. So we are going a little bit through maintenance now before the driving season anyways as well. So we expect that to do well.

Don't forget that ethanol at about $2 per gallon is incredibly competitive globally. You have [ our but ] trading at north of $3.50. So there is a big incentive here to blend domestically, so we expect domestically to something in the range of 14.5 billion gallons, give or take. When you add to that, 2.4 billion gallons, that is our expectation for exports, that's almost close to 17 billion gallons. I still remember how much I was celebrating with our exports worth 1 billion gallon a few years back. So now we're talking about 2.5 billion gallon.

Whether those exports are being held by maybe the conflict or the tightness, maybe there is some of that. But you see more and more countries trying to bring resilience to their fuel system by diversifying into biofuel. So you see Vietnam increasing now to E10, you see Brazil going now to B32. So you have many countries popping up into that, and they are -- all of that is helping the U.S. export.

Great. Appreciate the color there. And just really quickly, was there any 45Z incorporated to ethanol earnings? And then when we think about modeling this, should we be adding this to segment income? Or should we be excluding these from the tax line?

Yes, you should be including it to segment income. And I would say, yes, we have. And of course, we continue to work on all the details that need for implementation of that. But the team has done a good job. And at this point, for the year, we are expecting an impact of about $150 million for a full 2026.

Your next line comes from the line of Andrew Strelzik from BMO.

Obviously, a very dynamic environment out there, inverted curves. I was hoping that maybe you could help us think about the kind of earnings cadence through the year, whether it's first half, back half split or however you want to frame that? And also, to what extent you have visibility for the balance of the year versus where you typically are at this time of the year, obviously, that had been a little bit of an issue in prior quarters. So curious where that is, too.

Yes. Listen, I've been doing this for quite a while. So at the beginning of my mandate, I remember we were like 48.5 to 51.5 or 48-52 in our split first half, second half. Since our product mix has shifted and maybe the U.S. is not as competitive as exports of grain. Probably now we are talking about something like 49-51 type of split between first half and second half. Of course, there is a lot of uncertainty still.

The visibility we have, listen, what we get to this point of the quarter, for Q3, if you will, we're probably sold about 30% in mill and about 50% to 60% in oil. So we still have a piece open there. And of course, for Q4, it's only maybe 10%. So we still have a lot to go through.

In general, I would say customers are not buying that much in advance. The oil industry is normally more spot. And I would say the -- for our oil customers and for human consumption is also relatively, we don't have a huge book yet. So I think we're trying to stay open. So.

I'll add on, Andrew, for Q2, when you think about the operating -- the quarterly cadence that Juan mentioned. Just on Q2, Q2 will be stronger than Q1. A couple of things we've talked about, the mark-to-market of $275 million approximately that we took in Q1. Majority of that will reverse in Q2 and the balance in the second half. Secondly, seasonally, nutrition is higher, especially our flavors product line. So that you can factor that into. And the third one is strength in ethanol, as Juan mentioned. So that's all put together.

You'll also see tax rate was a little lower in Q1, that will normalize itself over the year. And then the second piece is, as we have talked about, we've been very prudent on cost and CapEx through first quarter. And as we are starting to see the constructive environment, we will continue to invest in our growth initiatives, continue to invest in digitization, all of that setting us up for the long-term value creation for ADM.

Okay. That was super helpful. And my follow-up is related to that. You talked about pretty tightly managing the capital spend. But as your earnings trajectory improves, in this more constructive environment, whether it's '26 or beyond, how are you thinking about capital allocation incrementally? Are there more CapEx projects on the radar? Maybe you could talk about those as -- maybe it's the buyback that's more interesting. Just how you're thinking about capital allocation?

Yes. We continue to invest with our balanced framework of capital allocation that we have maintained for a few years, always our biggest opportunities in cost and growth projects, and we give priority to that. As Monish just described, we have a lot of projects related to cost savings in manufacturing, but also our low cost to serve and increasing capabilities. And we also have our fuel in 5 growth platforms that will serve us well, that we like very much because they have a balance of short-term, medium-term and long-term impact for ADM. So it gives us a good cadence going forward.

So then, of course, we honor the dividend, and we will continue to try to pay and grow the dividend every year as we have done for many, many years. I think this year, we just paid -- this quarter, we paid like 377th consecutive dividend, which is an incredible record for the company.

And of course, probably what is embedded in your question is what are we going to do with M&A or buybacks. And we will continue with our prudent bolt-on M&A. So we've done that when we see value opportunities are there or something that fits strategically to our developments. And yes, it is plausible that as our cash flows improve and our balanced capital allocation remains the same way, that potentially, we could do buybacks into the future. That's not out of the question. So we will continue to monitor how things evolve.

Your next question comes from the line of Heather Jones of Heather Jones Research.

The first question is going back to what you were saying about the cadence of earnings. And if I understood you correctly, saying roughly half will be in the second half? And if I take the midpoint of your guide, that would apply only 20%, 25% year-on-year growth and would imply you get close to where second half of '24 was. So just wondering, the biofuel policy, not just in the U.S. but globally, is the most constructive it's ever been. And so just wondering, what are the things in your business that are giving you pause that would cause the year-on-year growth to not be more robust than that? Or is this just conservative? So that's my first question.

Yes. Heather, it goes back to what Juan and I have talked about in our prepared remarks as well as a few of the questions that have already been asked. When you thought about when we came into the year, we had talked about a more back-end loaded. Secondly, as everybody knows that the RVO is coming in, we pretty much called the trajectory, right? It just came in faster than we thought. And based on that, we felt that it's prudent right now based on the mark-to-market reversal, there's normal seasonality we get in nutrition as well as ethanol strength that we'll see 49% to 51% first half, second half.

The other things, when you factor in the second half, right now, there is an inverted curve. And that inverted curve is for multiple factors, including some of the risks that exist in the economy right now. We also have a slightly higher tax rate that will come in, in the second half of the year, and we will invest more in R&D and digitization that I talked about.

But when you put all that together, when we look at the first quarter, the team started very well. You've seen that they've been able to capture the opportunities and margins that existed. So as that curve moves through and the opportunities exist, I can tell you the team is very well geared to take advantage of that.

2Q is a very important quarter for us because we have to make sure that all these executions happen. We'll get some more clarity as the world continues to evolve. We've got policy dynamics that we are watching through. Our assumption is that China will continue to buy its normal volume in Q4, but that's to be watched. So put all that together, we raised our guidance from $3.60 and $4.25 to $4.15 to $4.70. Again, the team is executing well, good start to Q1, and we'll continue to execute over the next 3 quarters, and we'll keep you posted.

Okay. And then my follow-up in on ethanol. And so -- it sounds like you raised the amount that you think will -- the 45Z will benefit earnings somewhat for the full year. But I mean, it was an extremely strong quarter both in the wet milling side and dry. And European market has been strong for some time. So just wondering what changed? I mean, were there risk management -- was the risk management benefit unusually large? Or should we consider -- should we assume that the kind of strength that we saw in Q1 is sustainable throughout the year?

Yes. Heather, there are so many factors to consider here in 45Z. You need to think about the carbon intensity score by every plant, the prevailing wage, the amount of carbon we sequester, the production volumes, but also the industry pricing reaction to this policy. So at this point in time, given what happened in the Q1, we are increasing the expected amount. I think we mentioned last time it was going to be 100 million. Now we're saying it's 150 million. I think that that's how we see it at this point in time. Could it be a surprise for the positive? We hope so. At this point in time, that's what we're looking at.

Your next question comes from the line of Steven Haynes at Morgan Stanley.

I wanted to ask on Carb Solutions maybe just in the quarter, kind of within the [ 3 50 ] or so of operating profit that you all did. Can you maybe just help us think a bit about how much of that splits out between ethanol versus the nonethanol piece? Obviously, we can see the VCP part of it, but it's harder to disaggregate within sweeteners and starches. So if you could just provide any additional color there, that would be helpful.

Yes. Maybe I can provide the dynamics and maybe Monish, if you want to give more granularity later. I think we continue to see a certain weakness in sweeteners. So our sweeteners and starches volumes are down 3% and margins are down a little bit more than that. Of course, Carb Solutions, corn plants are very big energy users and chemical users. So the cost of those plants are not doing great right now with the conflict, although we continue to improve our operational performance. Energy is up and some of the chemicals are up.

I think we started to see starches getting better and stabilizing in their volumes. And ethanol has been the good actor of the quarter. So we -- EBITDA margins per gallon went up like $0.18 from the same quarter last year. So driven by all the factors I think I explained before in one of the questions.

So I will say, hopefully, that gives you an idea. That's our expectation, if you will, for the second quarter that those dynamics will be maintained. And the nature of the results should be similar. Of course, are easy to see in BCP. And in the wet mills, we produce about 22 different things out of a wet mill. So it's more difficult to quantify there because also, we try to optimize that mix all the time, looking at the different margins, at the different grind providers. So that's not that easy to call. But I hope with the granularity I gave you provide you enough to -- for you to build your models going forward.

Your next question comes from the line of Dushyant Ailani from Jefferies.

Maybe my first one, could you talk a little bit about the soybean meal demand? I know I think earlier in your comments, you mentioned that you use strong demand there. But could you maybe just talk a little bit about the puts and takes in terms of how that evolves through the course of the year?

Yes, of course. Listen, soybean meal continues to be strong. If you look at the soybean meal versus corn ratio, that sit near 2 or below, that sustains strong inclusion in feed formulas. You see even that's more acute in China where corn prices are higher. So global soybean meal demand continues to surge driven by still healthy livestock profitability and expanding of the daily output.

So the U.S. has a big book for exports on soybean meal. I think that, that was helped a little bit by Argentina. Argentina lost all the cushioning from the old crop. And now basically, their crush is limited by the harvest, and harvest was a little bit delayed by a couple of weeks because of the floods. So I think that we are exporting a lot and demand has been very good. So that has provided another strong leg of the crush.

Today, soybean oil is probably like 52%, 52.5% of the crush. And that's putting -- that's probably, as much as we are crushing, we probably tighten up the meal balance because meal is so strong. So I hope that helps.

Yes, that does. And then my follow-up question is on Decatur East. I think you said that it's basically fully up and running. I think in the prior call, you had mentioned that there were some customers that had moved away. Have you been able to recover all of them? What's the data status on that?

Yes. No, of course, you won't recover this immediately. People -- our absence was long, more than a year, so people took different commitments on that. And we are rapidly trying to recover that. We have now a full -- our full volume is being offered. And as I said, I think that we trusted our good quality. The preference that customers have traditionally have for this product will bring us back. But the team is making progress, not full -- We haven't recovered our full position yet, and that will probably take a while.

Your final question comes from the line of Matthew Blair from TPH.

You mentioned the inverted soy crush future spur previously. Could you talk about what's really driving that? Like are there fundamental factors that are pulling on future margins? Or is this just like a matter of liquidity and less liquidity in the outgoing months?

Yes, I think that there is a strong immediate demand for soy and for oil and meal. And of course, there is uncertainty about what's happening in the future in the second half where there is -- at this point in time, you have very strong demand for soybean oil, very strong demand for soybean meal and a relatively flat soybean trading in kind of a flat range, if you will.

So all of a sudden, you look at the future and you need to think about, okay, what's going to happen with the trade deal and Trump visit to China? Will that move soybeans? And then you think about resolution of the conflict, crops and weather and all those things. So energy prices, so there are a lot of uncertainties in the second half. And I think that, that's I think Monish showed it or mentioned it before in the guidance. We're looking at consumer impact. We're looking at demand. We're looking at inflation. We are looking at many things. So I think the curve is reflecting that. And to the extent that we move forward and those dynamics continue, the curve may be extending forward, so -- and shifting into the future. So we are monitoring that.

We have reached the end of the Q&A session. I will now turn the call back to Kate Walsh for closing remarks. Kate, please go ahead.

Thank you all for joining the call today. We appreciate your continued interest and support of ADM, and wish you a great rest of your day. Goodbye.

This concludes today's call. You may now disconnect.

Good morning, everyone. I'm Salvator Tiano, thank you very much for coming and making through this weather. For the next fireside chat, we have ADM, and we have 2 people actually, so all the experts from biofuels from the company. So we start with Chris Cuddy, who's the President of the Carbohydrate Solutions segment and also Regional Head of North America as well as Greg Morris, who is the Head of the Ag Services and Oilseeds segment. And I believe you have some prepared remarks first.

Yes. Thank you, Sal, first of all, for having us and for Bank America Securities for inviting ADM. It's really a pleasure to be here. In a room with tons of great investors and other world-class companies. So thanks for putting ADM on the agenda. I'll kick it off. My name is Chris Cuddy. I'm the President of our Carbohydrate Solutions business and President of North America. I'll start with maybe just a few highlights from the last quarter and the year and some things that I'm excited about personally and how we're running our businesses.

First, last year, was really, we tied together kind of 5 great years in the Carbohydrate Solutions business, a fairly steady earnings. We took advantage of decent ethanol margins as we finished out the end of last year, and the teams did a great job of executing on any opportunities that we saw, and that helped us keep that string of 5 years alive of fairly steady earnings. We had a nice milestone during the year of tying in to the Tallgrass' pipeline or actually the Trailblazer pipeline in Nebraska which, for those who don't know, is taking CO2 from the Nebraska region west into Wyoming. We finished our dry mill kind of in Q4 and actually since then, We've tied in our wet mill in Columbus, Nebraska into that old Trailblazer. It's an old natural gas line coming East. It's now going west. And so we have the largest biorefinery in the world that is on CCS today in Columbus, Nebraska. It's not the largest biorefinery in the world but the largest one with carbon capture and sequestration. And we're really super pleased about that.

The other thing we've done, we've announced kind of a lot of growth areas for us for the company and certainly for carbohydrate solutions around decarbonization, precision fermentation, and bio solutions. These are platforms that have been identified over the years, and we continue to bolster them up particularly within the corn business, we have what we call the fight for the grind. And we're always looking to margin up, margin up, margin up, find new products to replace either those that have a lesser margin or they are going away from a volume perspective. And so we're really excited about the future of those 3 platforms. And we think they have long enduring trends behind them and super excited about how they'll contribute to the franchise in the coming forward.

And lastly, the power of our network. We have, we think, an amazing platform and network. It's very connected what happens between Greg's business and Ag Services, oilseeds and mine in carbohydrate solutions, I think, is hard to replicate, and it's certainly a competitive advantage that we have around all the things that we do together, whether it's buying the grains from Ag Services, whether it's using global trade to take our co-products away, whether it's using Regen Ag from Greg's business, it's a very -- there's tons of synergies that go along with all those things, logistics you name it, as well as the teams and the way that they execute. So the power of the network and the power of our teams remain incredible within ADM.

So I'll pass that to Greg.

Yes. Thanks, Chris. You covered a lot of ground there. I think from my perspective, Sal, if I just think about 2025, we had lots of external challenges when you think about the trade war, the uncertainty about what was lurking around the next corner the anticipation for clarity on biofuels, which kind of came but didn't really come. All of that led to a difficult financial year. But I would tell you that the scoreboard doesn't represent the effort of the team. And when you think about what we actually could control last year, we accomplished a number of things. We're really focused on improving our operations. So we finished the year with the safest year in ADM history. We set some -- a number of production records across the global network.

In fact, Q4 was a record global crush volumes for us. We took a number of portfolio actions. And so we have addressed a number of underperforming assets, exiting over a dozen grain elevators that were tying up capital and weren't generating an adequate return, set up a couple of joint ventures in North America to address a challenged industry, the cottonseed crush industry. And then maybe the third thing we did was we really got disciplined around capital and working capital specifically. And so we've got very precise in terms of how we manage our working capital, making sure that the teams day-to-day are really thinking about the returns are going to generate on the capital that they're deploying with the decisions that they're making. We're really proud of the team for the controllable actions that they took in a very difficult year and I think it all sets us up for a much better performance as we think about 2026.

Perfect. Thank you, Greg. So sticking a little bit with the crush margin in your business. The #1 question investors have been having is that for the past year or so, not just ADM pretty much every publicly traded company that reports crush margins seems to be realizing margins well below what is the board number, right, what we call the Board crush. Can you elaborate a little bit on why is that? What has led to the change versus the cash margin and also is this perhaps a new normal, a wider discount versus the board?

Yes. Well, if you start with what is board crush. board crush is a function of the product values for soybean meal and soybean oil minus the value of soybeans. There's a set yield associated with that, so it's 44 pounds per meal, it's 11 pounds for oil. But when you do that calculation, you're essentially assuming a basis level of option price or 0 because you're using futures prices for board crush calculation. So when you look at translating from board crush to cash margins, the difference is you take actual yields into consideration and you take basis levels into consideration. Well, the yields aren't going to be the material driver of that difference, but the basis levels will be. So when you think about what happened last year or over the last couple of years, you've had a significant ramp-up in crush capacity, both in North America and Brazil.

So meal basis values have been a bit lower than historical. You've had the uncertainty around biofuels policy in North America, which caused soybean oil basis values to be a bit lower than normal. And so those -- when you think about the basis values of the products relative to the basis on beans, product basis levels were weaker relative to beans and that drives the math calculation to create a lower cash margin versus board crush. And so I think as you have more clarity around biofuels policy, you stimulate additional demand for soybean oil, when you see basis levels start to improve as soybean meal demand continues to grow and soak up the extra production when you see basis levels start to rise, you're going to see the convergence of cash versus board crush.

Okay. Perfect. And talking exactly about this demand. So can you talk a little bit about how you've been running the plants over the past 1 to 2 years when things were softer in the industry as well as assuming the RVOs are going through as initially proposed, what is the expected pickup in terms of volumes you would expect and the benefits across the ADM system?

Sure. I would say, generally, we've been running our plants hard. The margins have been adequate enough to allow us to run at relatively hard rates. I did mention we've set a number of production volume records across the network. South America, for example, has had a very good run for the last several years. North America has made some significant improvements. We've worked hard over the years to improve our unplanned scheduled downtime. And so we continue to chip away at that and improve the reliability of our plants and our ability to avoid unplanned downtimes.

And we've also expanded some of our facilities. So last year, we announced 3 expansions in Brazil. We executed 2. We have 1 more that's ongoing. And so I would say we're running the plants relatively hard. I would expect incremental additional volumes to be pushed through the network as we continue to get better at reducing our unplanned unscheduled downtime as we continue to execute on logical debottlenecking projects and as we invest in our facilities and upgrade and modernize certainly, those projects can always unlock some additional incremental production volumes.

Okay. Perfect. Taking a little bit of a step back and talking about the industry in soybean oil, in particular, again, with these RVOs being proposed, we see a very significant uptick in demand for the -- in the next, I'd say, 12 to 24 months. And there is a scenario we are thinking within Bank of America, but the U.S. would have to become a net importer of soybean oil. So right now, what are you seeing with regard to trade flows? And is this something that actually could happen in the next couple of years?

Yes. Well, if you look at the strategic intent of the administration, it's to put the U.S. feedstock in a position of advantage. But when you look at the overall proposed mandates, assuming those come through, imports should have a role to play. You have Canada, you have Mexico and you have other import trade flows that certainly could make sense. But it will make sense only after you exhaust the opportunities around domestic feedstock production. And I think it could actually create a healthy environment. When you have a mix of imports and domestic feedstocks, if you have disruptions or changes in demand for biofuels or for the feedstock, if a big plant does an annual turnaround, the imports can actually create a bit of a buffer so that any fluctuation in demand you're still able to maintain a relatively solid domestic flow.

And so I think imports do play a role, whether it's feedstocks or whether it's biofuels, but I think it's going to happen in an environment where those imports are going to be disadvantaged versus domestic feedstocks.

Perfect. And on that subject, what is your thought on the proposal that imported feedstocks would get only half a RIN credit? And firstly, is it something you would approve what you would like? And secondly, is it going to happen given I think last week's developments or rumors?

Well, that's another sign that the administration wants to put U.S. feedstocks in a position of advantage. We've heard talk just like everybody else has that perhaps the half RIN on imported feedstocks in the first year is going to be an administrative challenge. We've heard that's a topic of discussion, but I don't have any better insight than anybody else. I think in the end, what's really important is what's the net impact of the RVOs, net of the SREs and what's the overall mandate look like.

Perfect. And just very quickly, do you have any thoughts on what may ultimately happen? I know there's a lot of uncertainty. So I'm not going to hold you to it. Just if you have any...

I'm not going to speculate. I just -- the market talks about how the half RIN on imported feed stacks may get pushed off the first year. I don't have any particular insight to speculate on whether it does or doesn't.

Okay. Perfect. Shifting to the other side of the equation, you mentioned the meal. And what is, I guess, your outlook for soybean meal when it comes to demand pricing, especially given that there is another leg up in U.S. crush capacity, I believe another 10% in the next year or so. What should we expect from that part of the equation?

Well, it's been interesting to watch what's happened with meal over the last couple of years. I mean the growth rates on meal have been fantastic in the world kind of outside of China. China buys beans, the rest of the world generally is a meal buyer. And so demand has been really fantastic. And if you look at export volumes of meal, just as a data point out of the U.S. and out of Brazil last year, there were records. And the anticipation in 2026 is that we're going to have record meal exports again. Inclusion rates are high. Profitability in the livestock sector, generally, when you think about pork and when you think about poultry, have been decent. And so meal demand continues to be extremely strong and has been able to soak up the extra production without too much trouble. But it's really been impressive growth rates.

Perfect. Now I guess it's time to switch a little bit to ethanol and carbohydrate solutions. So firstly, can you talk a little bit about the impact of biofuel policy on ethanol and specifically the 45Z credit, including what are your expected benefits this year and the following years?

It's a good question. Certainly, policy for us and then knowing what the policy is important. So getting these RVOs out in public I think for not only those of us in the biofuel industry, but for the obligated parties, knowing what's -- what the facts are going to be and the rules are always important for us and helps us manage our plants and the supply appropriately. I think it's important for the farmers and what they're going to plant next year. So having that insight will be super important. The -- not only the domestic demand that we think will happen when RVOs come out is important, but also what we've been seeing from exports will continue to drive, we think, margin in ethanol. We had 13% growth last year in exports from kind of 1.96-ish to 2.2 billion gallons. And so those are important markets for us outside of the United States that we continue to see or excess go into.

And I think that will continue to grow as well. And some of the trade remedies that the current administration has worked on ethanol has been 1 of those tools that they've used. And so we've been appreciative of that as an industry. And -- but there's no doubt a little like Greg mentioned with half RINs and other things that having a biofuels policy that supports the U.S. farmer and the U.S. biofuels will continue to be important. 45Z is a tailwind for us and a lot in the industry. And so I think we'll continue to see that momentum when it comes to volume pushed out for people that can participate in the 45Z. So I think not only will it be a tailwind. It could also limit margins from the extent that people run really hard because they have that 45Z. So I think kind of 2 sides of that coin going forward. But without a doubt, it's important for the industry today and certainly gives us support that we need.

We've given guidance, Sal, of around $100 million in what we think the tailwinds are for 45Z. There's a lot of -- I don't want to say unknowns, but things yet to iron out when it comes to prevailing wages that you have to pay to get 45Z understanding the GREET model and some other complications that I think just need to be sorted out before we have a little more clarity.

Okay. Now you mentioned that the industry is probably running a little bit harder given the 45Z benefits. So since you brought it up, I guess, is this something that could become an issue in the next few years? And is this perhaps the main reason why the weekly DOE data are so elevated, I guess, in the past year?

I think that's part of it, but we've had -- we've had good demand. It's February, and we have a nice margin environment, which we haven't -- I've been doing this for -- I've been at ADM for 27 years. I've been in the biofuels for over 10. Normally, February is tough. January is tougher. And we came into the end of last quarter with decent margins. January was tough, but we have positive margins in February. So that's setting ourselves up for a pretty nice year. And I think that's why you're seeing people run because they see good margins. Now.

Yes. Perfect. And with regard to 45Z, do you have -- again, I won't hold you to that, but any thoughts on what may be the plan of the administration post 2029? Or what would be ADMs plan in case, for example, it goes away if the blenders tax credit and not renewed. Could you switch to 45Q or it was a nice tailwind as long as it lasted, but doesn't change your base case?

Well, certainly, it's going to be nice as long as it lasts. But for us, I mentioned earlier that we're tied into the Trailblazer pipeline in Nebraska for -- we do have the wells in Decatur, Illinois as well where I live and so we have that ability to switch back and forth. If the Z goes away, we can still take advantage of the Q for both of those locations.

Okay. Perfect. And can you remind us a little bit, I think it was a couple of years ago when 45Z first came to as part of the IRA bill, right, was instituted. The plan, I think, was to sequester up to 7 million tons of carbon. You started with 1 million at Decatur. Is this still the plan long-term and where do you stand in that?

Well, we don't have -- we haven't put a cap on what we think we can do in Decatur. We've done about 4.5 million metric tons life to date on the carbon capture wells that we have in Decatur. But I don't want to put a cap on what we think we can do because we have permits in for more wells, and it's a big part of our growth plan.

Okay. Perfect. Moving to starches and sweeteners. That has been a segment that's a little bit harder for me to understand. So can you talk a little bit about that business, key products as well as demand drivers? And mainly, how should we think about the price/cost mechanisms there?

So when you think about the sweetener starch business, what I love about the franchise is just the optionality and the flexibility that we have. And I mentioned earlier about the fight for the grind, and that's what we work on, on an annual basis, on a quarterly basis and frankly, on a daily basis, how we manage price mix, product mix, plant mix. So it's important to us to pull those levers to maximize margin all the time. And the role is for that group that's running that plant mix, product mix, customer mix is to run the plants at the highest capacity utilization all the time. These are big plants. They need to run hard, and our goal is to run them hard.

We have -- between the products we have in sweeteners and starches and of course, ethanol, we do have more finishing capacity than we do running grind on purpose. So that allows us to run the plants at high capacity utilization. I would tell you from a -- it's no secret what's happening in items like high-fructose corn syrup. It's been on a decline for as long as I've been in the business and kind of a 1%, 1.5% decline. And I mentioned earlier how we've had a nice 5-year run of fairly stable earnings in this business unit. And the team has done a nice job of offsetting that with other things. Some of them are growth options, some of the things like ethanol that I mentioned at the beginning of last year. Ethanol is one of the big items that we can lever up with when it comes to volume to keep the plants running hard. And I think that will be something that you see here in 2026 and 2027 and the next several years given the 45Z.

But what we also have in place is this growth engine that I mentioned earlier, decarbonization, precision fermentation and biosolutions. And we think we're really set up in a nice space given that we have low carbon intensity energy and corn, we think, is one of the cheapest carbohydrate sources in the world that we have here in North America. So with those 2 things, we think we've got a nice growth platform that we're looking for items not only that we can produce today, but also have meet enduring trends that will carry us into the future. When I think about like our decarbonization, we have a group in Decatur that's building a gas turbine for us. So we will -- today, we make all of our own power in Decatur. They will make our power for us, and then we'll actually take the CO2 off of the turbine and sequester it.

So we'll have a low CI carbon -- low CI energy electricity and steam in Decatur. So that's certainly something that we're looking forward to. We have a couple of other projects around decarbonization. We've got more wells coming on. We hope to have more wells coming online. We've got permits in. We've teamed up with Super6 to bring in more CO2 from other outlets within Central Illinois and around the Midwest. We also have announced a deal with OCOchem to make chemicals from CO2. So these will be kind of start-up plants, but certainly things that we think will eventually take hold.

Renewable natural gas is something that we continue to invest in around our complex on taking our waste streams and making renewable natural gas on them. So that fits in this decarbonization bucket. And then we're still keen on sustainable aviation fuel. We've been working on it for a few years. And I think that at some point, we'll find the magic technology and partner and capital route to get that to market. So I'm excited about that.

The other thing we have in our space is precision fermentation, which, again, given the low CI energy that we have and the cheap carbohydrate source of corn, we're keen on a lot of different items that we're working on with customers of ours and partners to develop new and innovative items, most of that via fermentation that will take the place of current things today that are either grown on a farm or petroleum-based. And those are things that we are going after that are -- we think are very practical that are profitable and important for us too, scalable. So these aren't kind of petri dish little things that are onesie, twosies. These are things that we hope that will move the needle as we move forward.

Biosolutions is another one that we've been working hard on, and that is really taking current products that we make in our plants and use them for industrial applications. So I think corn sweeteners or dextroses that replace formaldehyde in fiberglass insulation as a binder. Think starches that help the wallboard in your house or the ceiling tiles in your office to make them lighter and stronger so that the nails go in and don't pull out. Think even applications on plants, corn, soybeans, tomatoes that help during periods of stress. So those are all the things that we're working on in our Biosolutions group. And all of those combined, the goal is that not only do they just fill in gaps from areas that are shrinking like corn syrup, but they grow a lot faster than any of the declines that we see.

Perfect. Just 1 other quick one. When you talk about the low CI products. Is -- are you exploring also low carbon corn, for example, things like that, if they use low-carbon fertilizers and agricultural practices.

Yes, So it's 1 thing that Greg's team and our team work really well together. He runs our regeneration ag program that works directly with the farmers on capturing what their CI score is and understanding how they can lower it, and then we run that through our value chain. We pay the farmer for that and as well as we charge the end customer for those low CI products.

Perfect. Last question on this segment is obviously the MAHA trend, I guess, right? There's been a lot of headlines and concerns about the need for formulation, moving away from sugar or at least high fructose corn syrup. So what are you actually seeing on the ground from your customers? And are you working towards pivoting this -- your portfolio just based on the trends that we're seeing here?

MAHA, if I just think about demand in general, I mentioned we've had kind of 1%, 1.5% for the past 2 decades. And I think as an industry, we've done a good job and as ADM in managing that decline either through plant rationalization, or through the fight for the grind that I mentioned on precision fermentation, biosolutions, decarbonization. And certainly, we have ethanol in our wet mills that allows us to pivot in and out. It's the MAHA, it's GLP-1s, it's food inflation. All of those things have impacted our customers that buy these products for us and certainly, the consumer sentiment around those.

The last year, we've -- I would say, in 2025, we saw a larger drop than we've seen in the last decade or so. Margins are still healthy. It's a volume issue that we saw last year. And our goal is to take all the things that I just mentioned around precision fermentation, biosolutions and decarbonization and use those as growth engines to replace that ground that we have for high fructose corn syrup.

Perfect. Thank you very much. So moving a little bit away from biofuels and into Ag services, kind of the traditional bread and butter here for ADM. It looks like the environment has remained pretty soft for the past couple of years. So what are the levers that ADM has to pull to grow Ag Services earnings absent a weather event that would lead to higher margins?

So the Ag Service subsegment. So if you think about that, it's the North American origination and export business, it's North America transportation. It's our South American origination and export business. It's our European origination business, which is really more Eastern Europe, so I think Ukraine and Romania. And then it's our global trade business, which is kind of our group that manages kind of the global trade flows of a lot of products and raw materials that come through the Ag Services network, but also out of Chris' plants and my plants. So when you look at what happened last year, we had record corn exports out of the U.S., but we didn't have China at the table to buy soybeans. And if you have record -- if you have solid corn exports and you have a Chinese bean program, that gives you the opportunity to surge and to really fill out capacity, which then leads to a better margin environment.

And so when you think about what's different going forward, we know that China has been in and has satisfied the initial 12 million tons that they have committed to buy so long as they're still committed to the 25 million tons for next crop year, we think about that as kind of a more normal buying pattern. And so if you lay on -- if you put that on top of a solid -- what's expected to be a solid corn export program, there's an improvement opportunity there from a year-over-year perspective in North American exports. I would say also we have a growing fertilizer distribution business in North America, where we bring fertilizers into New Orleans translate with our stevedoring business, put it in our barges that we've taken down the river that have emptied with grain at the Gulf. We load those barges with fertilizer, bring them back up the river and then distribute it to a number of different customers across the Midwest. That's a growing business.

If you go to South America, 1 of the headwinds we had last year was with 1 of our export facilities in Barcarena, -- we had a barge that hit our facility and took that facility down for the most of the year. That facility is back up and operating now. So that's a positive as we think about '26. If you go to Eastern Europe, unfortunately, the war in Ukraine continues. That's been a challenged business. They continue to fight and proud of the team over there for all they've done to maintain the business. It's a difficult environment, as you can imagine. So I don't see a significant change there.

And then Global trade has become -- it's a pretty resilient model. It's not reliant on any 1 particular trade flow. They exist to try to create demand flow to support origin assets, either in my group or Chris' group, and that business, I think, is going to continue to perform relatively well. And so I would say the big delta is when I think about last year versus a go-forward time period is really North America and the opportunity we have to help support some of the trade deals that have been executed from the Trump administration but also South America with the improvements or the rebuild or the repairs of the Barcarena port facility.

Perfect. I have 1 last question before that. I just want to see if anybody from the audience has any questions. Okay. I think we're good. So the last 1 would be from a bigger -- a longer-term standpoint in Ag Services and commodities trading. It looks like Brazil continues to structurally gain share, whether it's from higher crop acreage, higher yields. And I have to mention we were very happy to visit your own facility at the Port of Santos in December. Thank you very much for hosting this. And I think it was a massive facility. I think if I remember correctly, you can load the Panamax a day. So assume -- given the structural trend and your bigger exposure, I guess, in North America, how are you seeing the future of Ag Service for ADM? Do you need to pivot more towards other regions or specifically Latin America? How do you work towards that?

Well, first of all, we're happy to host you and that is a world-class facility and has a really solid team running that operation. We are definitely heavier in North America than we are in South America. That being said, we have an extremely solid team down there. You -- I mean it's been impressive what the Brazilian region has been able to do in terms of increased crop production. We know that when you have a significant increase in crop production, choke points happen and those choke points become opportunities. So we've got a number of things that we're looking at that might allow us to grow our presence down there. What I like about Brazil, though is you have the exportable surplus. You have a growing biofuels environment, both for ethanol and for biodiesel. You have lots of mouths to feed both humans and animals. So you have a growing livestock industry and you have a large population. And those things together make Brazil an area of interest for us.

And we know that we're underrepresented relative to the North American region that we operate in. So I mentioned the crush expansions that were -- we executed on last year and are finishing up this year. We continue to look at Brazil as an area that's ripe for us to do more in.

Perfect. Since we have a little bit more time, just if we can dig a little bit more on that subject and that area. So ultimately, there are a lot of logistics projects proposed whether you talk about some new highways or railroads. Is this helping your long-term planning? Or could actually improve logistics be a headwind for trading companies that essentially make a margin when they can add more value when things are tough. What do you think about that aspect?

Well, logistics in Brazil are definitely -- they pose different complexities than elsewhere. You have a lot of grain that gets moved by truck. You have the rail facilities where you have a product that gets accumulated and ship by rail, you have the waterways to the north. That's an area that certainly as a crop grows, that area gets stressed. And so making sure that we have best-in-class execution on our logistics, making sure that we're managing that appropriately and making sure that we identify the right opportunities where we might be able to participate are all interesting when you think about the continued growth and the land that Brazil has to continue to grow their crops even bigger.

Perfect. Well, thank you very much, Chris and Greg. That was very informative. So thank you again for attending.

Thank you.

Good morning, and welcome to the ADM Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's call, Kate Walsh, Director, Investor Relations for ADM. Ms. Walsh, you may begin.

Welcome to the fourth quarter earnings conference call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; and Monish Patolawala, our Executive Vice President and Chief Financial Officer.

We have prepared presentation slides to supplement our remarks on the call today, which are posted on the Investor Relations section of the ADM website and through the link to our webcast.

Some of our comments and materials may 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 and materials are based on many assumptions and factors that are subject to numerous risks 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 the materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events.

In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website.

With that, I will now turn the call over to Juan.

Thank you, Kate. Hello, and welcome to all who have joined the call. Please turn to Slide 4, where we have outlined our performance highlights.

Today, ADM reported fourth quarter adjusted earnings per share of $0.87 and full year adjusted earnings per share of $3.43. Total segment operating profit was $821 million for the fourth quarter and $3.2 billion for the full year. Our trailing fourth quarter adjusted ROIC was 6.3%. And cash flow from operations before working capital changes was $2.7 billion for 2025.

We also made good strides in managing our working capital. For example, we realized a $1.5 billion cash flow benefit from inventory reduction.

I'll share a few highlights from across our business for fourth quarter. Our AS&O team delivered record crush volumes in South America. Our Carbohydrate Solutions team capitalized on ethanol opportunities. And our Nutrition team continued to improve execution across the board. And throughout our operating footprint, global teams improved manufacturing efficiencies.

I am proud of the team's rigor around focused execution and capital discipline throughout the year. And in the fourth quarter, we paid our 376 consecutive quarterly dividend.

Please turn to Slide 5. We navigated the dynamic and difficult market during 2025. And as we steered through those headwinds, we intensified our focus on areas within our control and prepare our business to take full advantage of what is expected to become a more constructive operating environment going forward. Here is a recap of the significant progress we made during 2025.

First, we executed more than 20 projects as part of portfolio optimization and simplification initiatives that are helping strengthen our business and support our core strategy going forward. Through this work, we achieved approximately $200 million of cost savings and announced the joint venture with Alltech, which I'm pleased to report has commenced operations recently.

Second, we addressed plant efficiency issues across our asset network and reduce our unplanned downtime. We restored operations at our Decatur East plant and achieved an important safety milestone by having the lowest injury rate in the company's history.

Third, we reached an important decarbonization milestone. We connected our Columbus, Nebraska corn milling plant to Tallgrass Trailblazer pipeline, extending our carbon capture and storage infrastructure beyond our Decatur operations.

Fourth, we advanced nutrition recovery, improved execution and increased revenue. Fifth, we generated a strong cash flow as we relentlessly focused on improving working capital. And as we announced last week, we reached the closure of government investigations of ADM related to the company's prior reporting regarding intersegment sales. We are pleased to put these matters behind the company.

Please turn to Slide 6. Our operating environment throughout 2025 was challenging, and our team demonstrated impressive resilience as we strengthened the core of our business through portfolio optimization, disciplined capital allocation, tighter working capital execution, enhanced cost control and lower transaction costs. This strengthening of our business not only allows us to continue to increase our dividend and return cash to shareholders, it also affords us the ability to invest in future growth regardless of the commodity cycle.

There are 5 key focus areas for our next wave of growth. We are leveraging our assets and expertise along with technology to build out our operations in enhanced nutrition, biotics, biosolutions, precision fermentation and decarbonization. Each of this business has a different growth profile and time line for value creation, but each complement what we're doing today and present the potential for compelling enduring returns.

For example, we are advancing innovations in enhanced nutrition for allergen-free protein, unlocking opportunities in specialized nutrition such as ultra-high protein drinks, protein bars and fortified snacks. On the natural flavor side, we have created patented technology for clean citrus flavors that are high-value ingredients for beverages. In natural colors, we have developed a breakthrough natural blue, addressing one of the food and beverages industry's toughest challenges, producing a natural, stable, water-soluble and safe blue pigment, which is exceptionally rare in nature.

We're also developing next-generation functional ingredients that combine the benefits of biotics and botanicals. Across operations, we continue to invest in [ site ] stream valorization as part of our ongoing efforts to optimize our production processes and add value to our byproducts. We also see a long, multiyear run rate of growth projects connected to the work we're doing around large-scale decarbonization, including carbon sequestration.

I'd now like to discuss the key market trends and company growth drivers for 2026 that support our outlook for a more constructive operating environment. The recent progress with China trade relations combined with the expectation of pending U.S. biofuel policy clarity should support an increasingly constructive market environment throughout this year, particularly for our AS&O business. We expect positive economic opportunities for the industry and the American farmer to materialize, which should drive additional long-term investments throughout our business and the agriculture sector.

Our outlook also assumes segment operating profit for Carbohydrate Solutions to remain relatively flat, with lower Starches & Sweeteners volumes and pricing, offset by higher ethanol margins. And Nutrition is expected to continue its trajectory of stronger organic growth and execution. Overall, there is much to look forward to in 2026 and beyond.

Our current outlook for adjusted EPS in 2026 is a range between $3.60 and $4.25, which reflects growth over 2025 and appropriately captures the fluidity in timing and market response as global trade and biofuel policies continue to evolve.

With that, let me hand it over to Monish to share a deeper dive into fourth quarter and full year 2025 financials as well as the assumptions underpinning our 2026 guidance.

Thank you, Juan. Please turn to Slide 7. 2025 was a dynamic year in the global trade and biofuel policy landscape, both of which impacted AS&O results. AS&O segment operating profit for the fourth quarter was $444 million, down 31% compared to the prior year quarter. For the full year, AS&O segment operating profit was $1.6 billion, 34% lower compared to 2024.

In the Ag Services subsegment, operating profit was $174 million for the fourth quarter, representing a decrease of 31% compared to the prior year quarter. The decrease was driven primarily by lower export activity from North America combined with net negative timing impacts of approximately $50 million compared to the prior year quarter. For the full year, Ag Services operating profit was down 11% compared to 2024 driven by lower North American exports and a challenged global trade environment. Throughout the year, pharma selling was limited by muted pricing, and combined with customers reducing the amount of inventory held, we experienced fewer trading opportunities.

In the Crushing subsegment, operating profit was $66 million, down 69% from the prior year quarter. While global crush volumes increased over the prior year quarter, with crush volumes increasing 7% sequentially and 4% compared to the prior year quarter, weaker crush margins in North and South America pressured results. Additionally, there were net negative timing impact of approximately $20 million compared to the prior year quarter. Further, there were approximately $20 million of reduced insurance proceeds related to the Decatur East claims versus the prior year quarter.

For the full year, Crushing operating profit was down 81% compared to 2024, with the main reason being a significantly weaker crush margin environment. Year-over-year, there were approximately $44 million of reduced insurance proceeds.

In the Refined Products and Other subsegment, operating profit was $119 million, down 2% compared to the prior year quarter as positive timing impact helped offset weaker food demand and lower biodiesel and refining margins. We have a net positive timing impact of approximately $72 million as compared to the prior year quarter.

For the full year, RPO operating profit was 4% lower than 2024 due to the same food [ and fuel ] dynamics that pressured fourth quarter results. Equity earnings from our investment in Wilmar were $85 million for the quarter. Excluding specified items, it was up 49% compared to the prior year quarter.

We typically record our share of Wilmar's financial results on a 3-month lag basis, with the exception of material transaction or events that occurred during the intervening period that materially affect the financial position or results of operations. During the fourth quarter, we recorded a $254 million gain related to the transaction Wilmar closed, and have presented this as a specified item. For the full year 2025, equity earnings from Wilmar, excluding specified items, were approximately 14% lower as compared to 2024.

Turning now to Slide 8. For the fourth quarter, Carbohydrate Solutions segment operating profit was $299 million, down 6% compared to the prior year quarter. Similar to the third quarter of 2025, we saw the continued weakness in Starches & Sweeteners be largely offset by strength in ethanol margins. For the full year, Carb Solutions segment operating profit was $1.2 billion, down 12% compared to 2024. Further, there were approximately $33 million of reduced insurance proceeds related to the Decatur East and West claims versus prior year quarter.

For the fourth quarter, Starches & Sweeteners operating profit was $256 million, down 16% compared to the prior year quarter, in part due to a continuation of consumer buying trends experienced throughout 2025. We are seeing S&S softness being driven primarily from less consumption of packaged goods, and this impacted both volumes and margins. Additionally, in EMEA, S&S volumes and margins continue to be impacted by persistent high corn costs related to industry-wide crop quality issues that we have previously disclosed. Importantly, for this quarter, there were approximately $33 million of reduced insurance proceeds related to Decatur East and West claims compared to the prior year period.

For the full year, S&S operating profit decreased by 21% as compared to 2024, with the decline primarily attributable to the ongoing trends impacting the fourth quarter. Year-over-year, there were approximately $75 million of reduced insurance proceeds.

For the Vantage Corn Processors subsegment, operating profit for the fourth quarter was $43 million, up 187% from the prior year quarter. Ethanol industry margins remained stable through October and November, before experiencing typical seasonal softening in December. Export and pricing strength continue to be supported primarily by mandated markets, which has kept inventory levels balanced. Overall, ethanol EBITDA margins per gallon for the quarter were approximately 33% higher compared to the prior year quarter.

For the full year, VCP operating profit was up $119 million compared to 2024, driven by stronger demand improving ethanol margins.

Now turning to Slide 9. In the fourth quarter, Nutrition segment revenues were $1.8 billion, remaining relatively flat compared to the prior year quarter. Human Nutrition revenue increased by 5% and Animal Nutrition revenue decreased by 4% compared to the prior year quarter. Animal Nutrition revenue was impacted by previously disclosed portfolio exits.

Nutrition segment operating profit was $78 million for the fourth quarter, down 11% compared to the prior year quarter. As previously disclosed, insurance proceeds related to Decatur East in the fourth quarter of 2024 of $46 million, as compared to 0 proceeds received in the fourth quarter of 2025. Human Nutrition operating profit was $56 million, down 10% compared to the prior quarter, with the decline attributable to a reduction in insurance proceeds. Excluding the impact of insurance, the growth was largely attributable to strong North America flavor sales and recovery in Specialty Ingredients.

For the full year, Human Nutrition operating profit was $319 million, down 2% when compared to 2024. Human Nutrition experienced significant operating profit growth led by flavors and the recovery of specialty ingredients. However, this growth was more than offset by the reduction of insurance proceeds. As previously disclosed, insurance proceeds related to Decatur East in the fourth quarter of 2024 was $71 million, as compared to 0 proceeds received in the fourth quarter of 2025.

For Animal Nutrition, operating profit was $22 million for the quarter, down 15% compared to the prior year quarter as a result of localized volume softness and the impact of onetime items. For full year 2025, Animal Nutrition operating profit was $98 million, 66% higher than 2024, with the growth driven by improved margins as a result of focusing on higher-margin product lines combined with portfolio streamlining actions and cost optimization efforts.

For the fourth quarter of 2025, Corporate and Other Business costs increased by approximately 25% compared to the fourth quarter of 2024. For the full year, Corporate and Other Business costs increased by approximately 19% compared to 2024. In both periods, the increase was primarily due to higher charges related to revaluation losses, including impairment, contingency and restructuring charges. These losses were partially offset by lower interest expense, higher other income and lower unallocated corporate function costs.

Turning now to Slide 10. For 2025, ADM generated cash flow from operations before working capital of approximately $2.7 billion, down by $600 million relative to 2024 as a result of lower overall total segment operating profit. Restricted cash increased $1.2 billion to $4.5 billion, mainly driven by ADMIS. We continue to maintain a solid cash position, and we have made good progress in improving our working capital efficiency. As Juan mentioned, we realized a $1.5 billion cash flow benefit from inventory reduction as we sharpened our inventory management practices and improved demand forecasting.

We continue to be very disciplined in the areas in which we invest. For 2025, we continue to be very prudent in our investments and invested $1.2 billion in capital expenditures. We also returned $987 million in dividend to shareholders throughout 2025, with Q4 being our 376th consecutive quarterly dividend.

And finally, our leverage ratio at December 31, 2025, was 1.9x, in line with our previously communicated year-end target ratio of approximately 2x.

Now turning to Slide 11; we have provided further details on our 2026 outlook. Earlier today, as Juan mentioned, we provided our current outlook for 2026. We are providing an adjusted EPS range of $3.60 to $4.25 for the full year 2026 and view this range of outcomes highly predicated on several key factors. First, the timing of when we receive U.S. biofuel policy clarity. The earlier we receive policy clarity, the larger the opportunity to take advantage of what we expect will be an increasingly more constructive operating environment.

Second, the size of the RVO requirement and the SRE offset. With the final mandate still under evaluation, visibility into the magnitude of improvement in the operating environment and the pace of industry adoption remains limited. Third, we expect robust ethanol export opportunities to continue driven by mandated markets. We also expect domestic demand to strengthen with the U.S. biofuel policy clarity and ethanol margin strength to be further supported by policy incentives. Strength in ethanol is expected to offset the continued softness in S&S projected from a continuation of the same consumer behavior trend we experienced in 2025.

Fourth, we are expecting continued growth in Nutrition driven by growth in flavors, continued recovery in specialty ingredients and growth in health and wellness as global consumption of biotic increases and customers expand their range of applications. And in Animal Nutrition, we expect margin expansion to contribute to Nutrition's operating profit growth as we focus on higher-margin products and see the benefits of our portfolio optimization actions materialize. As Juan mentioned, we have commenced operations of the joint venture with Alltech. And while we don't expect it to have a material impact on nutrition operating profit in 2026, we will see revenue decrease as a result of contributing those operations to an equity investment.

Fifth, moving to Corporate. We expect a portion of the segment operating profit growth [ discussed ] to be offset by higher expenses year-over-year that reflect continued investment in R&D and digital platform, the impact of lower performance-based incentive compensation related to 2025 and expected effective tax rate between 18% and 20%, and lower ADMIS interest income due to lower interest rate environment. We will also maintain a disciplined capital allocation policy, including a focus on solid cash flow generation while we continue to pursue cost savings. And we remain on track to achieve our targeted aggregate cost savings of $500 million to $750 million over 3 to 5 years, which we began in 2025. Additionally, for 2026, we expect to invest approximately $1.3 billion to $1.5 billion in capital expenditures.

With regards to the first quarter of 2026, as previously disclosed, we expect crush margins in the first quarter of 2026 to be similar to the fourth quarter of 2025 as we have already booked a large portion of our first quarter business. As a reminder, we don't exclude mark-to-market from our estimates. So depending on how factors, including board crush and cash margins move, we could see positive or negative mark-to-market timing impacts that differ from our current expectations.

In Carb Solutions, we see similar trends to those we saw throughout 2025 relating to demand softness in Starches & Sweeteners, and we expect ethanol margins to be tempered by higher industry run rate. Nutrition is expected to show continued improvement over the prior period and sequentially as we drive revenue growth and continue to see benefits from the recovery of specialty ingredients. This improvement is expected to be partially offset by the previously disclosed employee incentive compensation favorability in the first quarter of 2025. Our team is also continuing to monitor consumer behavior as it relates to our Human Nutrition business.

To conclude, I want to thank our ADM colleagues for their focus, disciplined execution and continued commitment to our long-term success. These efforts remain essential to navigating today's dynamic operating environment and delivering value for our shareholders. Back to you, Juan.

Thanks, Monish. Let me wrap up by saying thank you to our colleagues for the solid strides made during 2025 with our strategic portfolio optimization and cost reduction initiatives, all of which are expected to strengthen our business and our cash flow for years to come.

We're building out the next wave of long-term value creation, and specifically for 2026, we will be highly focused on optimizing our results in what we expect to be an increasingly constructive operating environment.

With that, we'll take your questions now. Operator, please open the line.

[Operator Instructions] The first question goes to Manav Gupta of UBS.

And first, I really want to congratulate the entire team, and I know Monish and his team particularly worked very hard with the SEC and DOJ. So glad that's all behind you, very happy for you about that. .

My first question here is, sir, that I know it's difficult to provide a guide with RVO not out there, and thanks for doing that. I'm just trying to understand, renewable diesel margins are already on way to amend. RINs are also moving higher. And so when the RVO finally arrives, do you expect a material jump in the operating rates and processing rates of both biodiesel and renewable diesel facilities because then they would know exactly how much RINs they would have to meet -- how much -- the market would know how much RIN obligation would be? So if you could talk a little bit about that.

Yes. Thank you, Manav. And yes, we are very pleased to leave these investigations behind us with this closure. Listen, it's been very difficult to give a guidance because of there are so many things that you described outside our control, and we don't feel comfortable in that regard. That's why our guidance is wide.

What we are discussing here is the timing of all these coming to the P&L. We know it's positive. We know it's going to come. So I think that when it's coming, it depends on when the government makes a decision and clarify the policies, but also how the market digests those policies and those get implemented. We're going to see board crush, we're going to see RINs, but at the end of the day, we need to see cash margins moving.

And don't forget that our business, which is a very large business, works in anticipation of the market. So we tend to sell, every time we get into a quarter, we are sold maybe 60% or 70% into the following quarter. So if these things will be done at the end of Q1, for us, it will be mostly July onwards, if you will, that we will be able to realize that. So that's what creates the uncertainty.

I think not in a calendar year, this is extremely positive for the industry and certainly for ADM, pulling more vegetable oils into biofuels. That's going to happen not only in the U.S. with the RVOs, but it is going to happen in Brazil, hopefully, with [ B16 ] started either in March or in June. It's going to happen also in other places around the world.

So again, I think we try to be very balanced in saying we see improvement based on the -- year-over-year on the things that we can control. We see some clarity in trading as we're going to have some volumes from soybeans going to China that we didn't have in 2025 materially. And then we see this RVO that's going to help with the lag of the oil for the crush. Mill continues to be supported. And then with growth in Nutrition, as we described.

So we're very constructive about the future for ADM. We also -- I also talked, Manav, a little bit about the long term. We have identified 5 platforms that are really very exciting, that they're going to come over the next 5 years, a different time line based on the difficulties or easiness of their implementation. So when you think about our self-improvement plus all the policy coming our way, again, that is a matter of timing, plus our growth prospects, we feel very strongly about the next few years for ADM.

The next question goes to Ben Theurer of Barclays.

Just a follow-up, same wishes on my side, congrats on closing the case. I wanted to follow up on the outlook piece and dig a little bit into Nutrition and kind of like tying it back to some of the commentary you've made in the past, Decatur East being back up. Obviously, the fourth quarter probably wasn't as good as expected, what you had initially kind of like pegged down for the Nutrition segment. So as we move into '26, maybe can you give us an update on where you stand like gaining these customers back on the fulfillment, everything you first lost on Decatur East that you now need to kind of like gain back? And maybe within the range of the guidance associated, what are kind of like the bull and the bear cases here as it relates to, A, demand, and then B, the fulfillment of the demand from your side?

Thank you, Ben. Listen, let me start addressing a little bit the performance of Nutrition, the true performance. Because I think it is important that we provide clarity on the operating performance of the business. If you compare apples-to-apples Q4 2025 versus Q4 2024, Q4 2024 has a significant piece of insurance proceeds into the Nutrition P&L. So if you exclude that, just to see the operating performance, we had a very strong quarter in flavors with OP up close to 60% or something, and biotics up north of that, driven mostly from flavor North America, which had a very strong quarter. We did have a little bit of a softer quarter from a demand perspective in Europe. And we don't know if it just was timing or something because we've seen it recover in -- when we started the year in 2026. So we saw that coming back in January.

As you said before, specialty ingredients continued the recovery with the Decatur East plant back online. But of course, this plant was down for 18 months. So we are doing some plant stabilization, some driving productivity. You bring it first back on safety premises and then you try to do the optimization of the plant. So we are in that process. And at the same time, again, our customers move away after 18 months of being -- we've not been able to supply fully. So as you said, we need to recover that, and we need to recover that prudently. But we would like to claim our share of the market back. So we are in that process. And I think that process is going well, but it's going to take some time.

Animal Nutrition was a little bit soft with some pockets of softness, but also we have some one-off impact. But I think the trajectory overall of Animal year-over-year has been positive, and we expect that to continue.

So I would say when we look at '26 as the overall year, and I can't call it by quarter, but overall year, so we will have still strength in flavors for both geographies. We also have continued to grow in Asia Pacific in flavors, which we had a record year in 2025. We're going to see a good demand in biotics. And we're going to continue with our margin improvement quest in Animal Nutrition. So that's where we see the business. So yes, we see growth for operating profit into the business in 2026 versus 2025.

And just a tactical bend for you is, as I've mentioned in my prepared remarks, when you're doing your modeling, Ian, Ishmael and team have done a great job with the Alltech JV that has gone live. So just make sure that from a revenue perspective, you won't see the revenue. The profit for 2026 is pretty much where it was as this JV takes hold. So it's a part of what Juan mentioned, which is moving to higher segments or higher product mix in the Animal Nutrition business.

The next question goes to Heather Jones of Heather Jones Research.

I wanted to -- my question is on crush. And I just -- it's a big picture question. So I followed you guys for over a decade and just have been sort of puzzled by ADM's performance during '25, particularly Q2, Q3 and Q4. You all's performance relative to public comps has been -- the gap has been much wider than historically and has been to the downside. And my understanding is that your runtime issues have improved in '25 and that you all have done a better job on the operations execution side. So just wondering, is there a change in how you're hedging?

Or just -- because obviously, the biggest influencer of your results over the next couple of years is going to be RVO policy, and it's going to affect crush most dramatically. And so I'm just trying to get a handle on how we should be modeling how ADM will benefit. So if you could just help me understand that disparity, it would be very much appreciated.

Yes. Thank you for the question, Heather. Of course, we spend a lot of time in Ag Services and Oilseeds, which is our largest business. I don't see anything clearly from a commercial perspective that has changed for us to justify what you described. I would say the main difference since I've been running this for so many years is our manufacturing costs have gone up, not actually the performance, as you said, all [ line time ], I think, has recovered, and that's going well. But our cost in terms of energy or manpower or contractors and things like that is higher than it used to be, and we're working hard to reduce that.

But that's probably something that I can point out. And as I said, we have good plans to do that. Things have become a little more expensive to build. We have a large footprint, a little bit more expensive to repair, and labor has been more expensive, especially in North America. I would say if you look at our -- the cost of our plants in the rest of the world versus North America, North America has become a little bit more expensive over the last few years, I would say, post-COVID. I got the impression, not exact science, that post-COVID, the rest of the world came back a little bit more to the pre-COVID, if you will, cost standards, while North America will still have a little bit more of that. And of course, it's not fact, but we need to find that productivity improvements, and we have plans to accomplish that.

If you don't mind, I'll add one more. Heather, just as you think about the cost out, the $500 million to the $700 million that we've talked about, and we started that work in 2025, as Juan mentioned, one of the big items in that unlock is manufacturing cost productivity. And that's what the team has plans to keep driving it. They've made progress in '25, and we'll continue to make progress in '26 and beyond.

The next question goes to Andrew Strelzik, BMO Capital Markets.

Great. I wanted to go back to the guidance and, in particular, your assumptions on the higher end of the range. And I appreciate some of the uncertainties around timing and magnitude related to the RVO. But can you just share a little more specifically what you've assumed from a crush margin perspective and maybe an improvement timing perspective on the high end of the range? I guess, what I'm really trying to get at is isolating kind of post-RVO EPS run rate implied by your guidance at the high end versus kind of given in the first part.

Yes, Andrew, as Juan mentioned and as we've said in our prepared remarks too, at the end of the day, this is all going to depend on 2 things. One is what happens with the RVO guidance, what is in the RVO guidance, what's the timing of the RVO guidance and what's the adoption of the market range. So it's very hard to sit here right now and pinpoint exactly a number that says when and how much crush margins are going to be because it's dependent on so many factors.

But what we have assumed in our higher end of the range, and that's basically where we are sitting right now, one is, of course, the timing of RVO and whether the adoption of RVO happens faster and does the -- and crush margins go up because of that. We have also assumed that the strengthening consumer demand -- so if consumer demand strengthens, which is both for starches, sweeteners, overall packaged goods and nutrition, as well as demand for biofuels, could definitely help us out.

We have also talked about saying how does RINs move up. So we'll have to watch how RINs move up. And Manav asked the same question in RINs. Board crush has moved up already based on some of the commentary out. So board crush has gone up. You can -- depending on the NIR, it has gone up nearly $0.40, $0.50 for -- sorry, for December of 2026 (sic) [ 2025 ], that's board crush. At the end of the day, it all has to translate back to cash margins. And so therefore, that's something that [ we will absolutely do ] and watching it.

So the market trends that have happened, these are all good early indicators, all early indicators that says we are going to have a constructive environment. But as Juan mentioned, we are being cautious and making sure that we are giving you both the high end and the low end of the range. Where, at the low end of the range, we have focused more on what we control. It's better than where we ended 2025. Continued progress on our cost-out mission, continue to drive where we believe that Starches & Sweeteners softness gets offset by ethanol margins and policy benefits, continued execution in Nutrition.

So therefore, put all together, Andrew, unfortunately, we are just giving you a wider range because it's all going to depend on ultimately where demand is and then where crush margins go. As the quarters get more clearer and as guidance comes out, we'll be definitely there to update you all.

Just last piece of housekeeping advice. As you know, we don't predict mark-to-market. Mark-to-market within the quarters could move depending on which markets we hedge, when we hedge it, as well as what prices turn out to be as of the end of the quarter. So please do factor that in from a timing perspective as you all think about it. Okay?

The next question goes to Pooran Sharma of Stephens Inc.

Great. I wanted to ask about just the weaker Starches & Sweetener demand we've been hearing concerns related to GLP-1 adoption, and that's been leading a lot of customers to move to spot rather than forward buying. But we've also been hearing just maybe tariff pressures causing producers to raise retail prices and that impacting demand. Just wanted to get a sense as to kind of what you're seeing and get your thoughts on to what's driving some of the softness here.

Yes. Thank you, Pooran, for the question. Listen, I think it's a combination of everything. There are -- we go -- when we produce what we produce in sweeteners, we go to so many applications that touches many, many end uses, products and also channels. I would say, certainly, when people adopt GLP-1s, we see the consumption drops a little bit as a family. That stabilized, if you will, after 6 months, but also shift a little bit what they consume, going more into proteins and maybe less savory snacks or sweet snacks.

I think there is a consumer desire to move away from ultra-processed foods to a certain degree, at least initially. And I think we're seeing part of that. It is true that although inflation for food have dropped, the actual level of prices have not dropped for some of these products. And we have seen some of our customers trying different price points to test that elasticity. But prices remained a little bit high. And I think when the consumer see shakiness, if you will, in the labor markets, they start to become more prudent about what they do and they become more sensitive to pricing.

So I think it's a combination of things. We are very blessed to have the ability to make many, many products from corn and we are pleased to have a marketing team looking at industrial applications, whether it's in mining or packaging, on construction and cosmetics and others. And I think that that has helped us to soften some of that. But the reality is, yes, liquid sweeteners volumes are down, maybe in the range of 5% to 7%. And we're fighting hard to offset that.

Part of that offset for 2026 we think will come from 45Zs and ethanol margins. And that will keep probably Carb Solutions, the way we think about it, relatively flat year-over-year. But we have an intense focus on protecting that volume and shifting into other applications that may not be exposed to the same trends.

The next question goes to Tom Palmer of JPMorgan.

I wanted to maybe just clarify a few guidance items quickly. Just first, I think in the past, you've given dollar amounts for corporate and then percentages for kind of expected tax rate. Apologies if I missed it. I don't think we got it today. And then on AS&O, a lot of discussion, I guess, on the crushing piece. But RPO and Ag Services, any framing of kind of relative to what we saw in 2026 where they might trend?

So just -- you'll have to remind me all your questions, but I'll try, if my memory is right, Tom. One is tax rate. So adjusted ETR or expected ETR for 2026 is between 18% to 20%.

On Corporate, as I've said, Corporate will be higher on a year-over-year basis, driven by a few facts. One is the improvement in [ seg OP ]. Some of that we're going to use to reinvest back in the business in R&D and digital, number one. Number two, we will continue to see the impact of a lower incentive compensation in 2025, that won't repeat in 2026. And three is we're going to continue to drive cost out as we have committed to keep driving cost on Corporate. So that's Corporate.

When you think about Ag Services and Oilseeds, I think that was your third question, as we have said before, there's a wide range that could happen between Ag Services and Oilseeds, again, depends on RVO clarity. What we have done, Tom, is at the low end of the range said that assuming there's a different of RVO policy or U.S. biofuel policy, we see margins to be flat. And then so that's factored into the low end of the range.

As Juan also mentioned from an Ag Services perspective, North American exports should be higher based on the policy clarity that we have got for -- especially with China, where we should see higher volumes sold to China versus what we did in 2025. And then at the high end of the range, I already answered that question on different things to think through.

For the first quarter, I would say, again, crush margins based on the book that we already had, and we have publicly previously disclosed that too when Greg was on stage in another conference, that for Q1, we expect crush margins to be very similar to Q4 in crush margins. For Q4, we have also disclosed, but just again as you're building your model, these crush margins include a recovery of Decatur East insurance proceeds of approximately $30 million. I think it's $32 million to be precise, that's in those crush margins. So hopefully I answered your questions, Tom. But if I missed something, let me know.

Just on the RPO piece.

When you say on the -- oh, so what's outlook? Again, listen, at the end of the day, Juan's mentioned this on multiple calls, and so as the team, I think, Tom, it's going to come down to what is the demand for RPO. I think that's number one. And number two, once RVOs come through, there's going to be a time lag between how much you start seeing in crush margins, what RINs do, and therefore, then, how does it incentivize producers to start manufacturing product again as consumers. So as of right now, I think that's all in our range. And it's all going to come down to what RVO policy turns out to be and what demand turns out.

The next question goes to Salvator Tiano of Bank of America.

Yes. I want to go back to essentially what happens once the RVOs are out, but taking a step back from explicit crush margins. So the high end of your guidance at $4.25, is it fair to say that it implies kind of starting in July, assuming, as you said, with a lag, you'll see the benefits in July in the high end, in the best case scenario, of perhaps $1.30 EPS per quarter? Is that kind of where the new earnings power is going? And obviously, if that is the case, does this mean that with no other change in your outlook on a full year run rate in 2027, we could see EPS in the low 5s? Is that kind of your big picture view here?

So Salvator, again, I think it comes down to it's right now very hard to predict exactly what that number turns out to be. As we have said, there are multiple factors at the high end. It's not just crush margins, which is definitely one factor that should help. The sooner we get the clarity and the more the demand is, as long as the cash margins are there, not just board crush, I think our team is ready to continue to execute to crush and hopefully take advantage of those margins.

The other drivers in the high end of the range, we're also making sure customer demand or consumer demand remains strong. That's the second. And then third, as Juan mentioned, on Sweeteners & Starches and where ethanol margins. So there are multiple factors that have to go into place.

To answer your question on the long run, as Juan mentioned, there are 5 pillars that we think over the long run that should start helping us. And the company has taken 2025 to continue to be very prudent on cost but also on cash and using that as a way to invest in these growth platforms that can create value over the long term for ADM.

How that timing works out between '25 and '26 and '27 by quarter, sitting today, Salvator, it's unfair for us to be able to make that prediction because there's so many factors at play. But long term, as Juan mentioned, ADM's ability to keep growing, keep creating value, keep returning value to shareholders, whether in the form of dividend or other forms continues to remain a big keystone of our capital allocation policy and our thesis to return value to shareholders.

The next question goes to Steven Haynes of Morgan Stanley.

I wanted to come back to the Carb Solutions guide for the year. And maybe if you could just help us think a little bit about how your sweetener contracting season went or is progressing. And I guess kind of within your guide, how much of that weakness is related to maybe margin versus volume? And then secondly, if you've included any kind of explicit uplift from 45Z or 45Q, if you're willing to quantify that, that would be helpful.

So yes, Steven. Carb Solutions, the contract season went well. But as I said, with some softness in volume that, at the end of the day, impacts margin. I can't quantify exactly how much of this. As I told you before, we don't have this big [ cliffs ] of contracts anymore. So I think that it is a blend. But certainly versus other negotiations, it has been a little bit softer this year than others.

With regards to 45Z, there are many factors to consider, of course, to estimate the benefit. As you know, we need to think about the carbon intensity by plant, the prevailing wage issue, the amount of carbon we sequester during all these, the production volumes. And of course, we need to see how the industry will react in terms of pricing to all this 45Z. We still don't have final guidance, but we know that this has cleared the White House Office of Budget. So we hope to hear from them soon.

We think, when we put in our estimate, we think that it could be approximately $100 million. But as I said, just to give you a flavor, there are many variables. So take that with a grain of salt.

Your last question goes to Matthew Blair with TPH & Co.

Great. You mentioned that you're expecting robust ethanol exports to continue in 2026. I think India already hit its 20% ethanol blend rate target. So could you talk about other markets where you see incremental opportunities for ethanol exports from the U.S.? And then also, do you have any thoughts on the likelihood of E15? And if that does pass, is there any sort of range or any sort of guide on the potential uplift to your Carb Solutions business?

Yes. Thank you, Matthew. Listen, the U.S. continues to be very competitive in ethanol in world markets, and I think it's certainly more competitive than Brazil. And there are many, many countries that, with the need for more energy for all the AI that you see and all that, there is a strong desire of removing a little bit of the burden of transportation into the oil segment. So bringing biofuels is important for sustainability perspective, but also to enlarge the energy pool.

So we're seeing countries, and anecdotically, like Vietnam is going to launch some, but there are -- like Japan is -- have it in the forecast. So there are many countries queuing to do that.

The blending rates could go high. I always give the anecdote that when I was living in Brazil, like 30 years ago, we were already driving cars with 20-something percent ethanol, and they were American-made cars, if you will, by brand. So that can be done. So whether we can go E15 or not, it's a matter of the industry to align to that to have only one pipeline and only one -- but there are no issues to move into E15. So we think that eventually, we're going to get there. Again, timing is the key, and I'm not into forecasting timing. So we feel very good about that.

It continues to be a very cheap oxygenate. I mean oxygenates comparable to that trade for like maybe $2.90, and ethanol is, well, like $1.60 or something like that. So it continues to be very competitive. So we're optimistic into that.

We also have plans that we'll have the opportunity to provide low carbon intensity to that based on our carbon capture and sequestration. And I think that will bring other avenues for ethanol, potentially SAF and other things, not only here but outside the world. So I think we are positive about that.

I think it speaks a little bit, because at times, biofuels become less of an impact to us, at times like now becomes more important. It speaks a lot about the strength of our diversified model, that we are global and very diversified portfolio, that allows us to do things like invest for growth while we are able to increase the dividend like we increased this year, even at times in which you can consider this almost like trough conditions from an industry perspective. So I think it shows the strength of our model that provides a very strong base during the tough times.

And now you're all asking questions about what could be the upside, and we would like to ride to the upside. And all we can do is improve our facilities to be able to run fully when that times come and being able to take a full advantage of the market opportunities or the regulation opportunities that will be presented to us.

So we've been very satisfied how we handle the cash and the increase of dividends over the last 2 years. They were tough market conditions. And now we are ready to ride the upper side of the cycle, if you will.

Great. We have no further questions. I'll hand back to Kate Walsh for any closing comments.

Thank you all for joining the call today. We appreciate your continued interest and support of ADM and wish you a great rest of your day.

Thank you. This now concludes today's call. Thank you all for joining, and you may now disconnect your lines.

All right. We'll go ahead and get started. I think this is the last one for me anyway. I don't know if you guys got a few meetings.

Last one for me.

There we go. So we're very happy to welcome Archer-Daniels-Midland, ADM up to the stage with us today. Juan Luciano, Chairman and Board leader, Chief Executive Officer; and then Greg Morris, who's the President of the Agriculture Services and Oilseeds business, the core of the company. Again, thank you guys for spending some time with us today.

I think maybe start us off by just kind of looking at 2025, if you go back to January 1 of this year, kind of what's gone right, what's gone wrong? How does '25 look as a baseline year to then project into '26?

Okay. So thank you, Duffy. Thank you for hosting this chat, and it's very good to be here in a very well-attended conference this year. So I appreciate that.

I think the environment in 2025 was very difficult and dynamic. And I think that the team focused on what we can control. You put all that energy on the team on the things that we can flex to defend ourselves from the conditions until the conditions improve. So I would say, if you think about what the team has done this year, they have adjusted very well to the conditions. And if I go back to the key messages after the Q3 earnings calls, where we have very solid results that exceeded market expectations. I would say in general, our agenda, our strategic agenda to advance in the things that we can control has been very productive so far. If you think about the different businesses that we have in Ag Services and Oilseeds, we delivered as per our expectations. The team focused a lot on manufacturing and improving crushing rates and crushing execution on a very low margin environment, if you will.

From an Ag Service perspective, we saw growth driven by strong exports from the U.S. in both corn and meal markets. So -- and I think they focus a lot on cash flow and making sure we reduce inventory, so we held the cash position of the company. From a Carb Solutions perspective, the other business we have, the 2 of the 3 businesses we have, we saw very stable sequential results with some overall weakness globally in sweeteners and starches, offset by strong ethanol margins for this type of -- this time of the year, they still remaining strong.

We also have a milestone announcement in our decarbonization strategy during the quarter. We finally were able to connect our Columbus, Nebraska plant, ethanol plant to the Tallgrass Trailblazer pipeline, taking the CO2 there and being able to put it underground. This marks the second facility we have, the second biofuel facility we have in ADM that has a connection to carbon capture and sequestration, which is very important.

The third business, Nutrition, presented again sequential improvements in results, driven by the strength of Flavors and animal nutrition. Flavors have a record revenue quarter sales. in Q3. And Animal Nutrition also, I think, the seventh or eighth consecutive quarterly improvement in the performance. Also in Animal Nutrition, we announced the creation of a North American joint venture with Alltech that marks a little bit the pivot of Animal Nutrition for us into more of the specialty side of animals, feeding younger animals, trying to keep them healthy even through the lack of antibiotics things.

And we've also seen, of course, a big tailwind in terms of natural colors. There are a lot of activity in customers trying to reformulate into natural flavors that has been going on for a while now in natural colors trying to replace artificial dyes. So we see that. And we have enjoyed very strong demand in our postbiotic products, all biotics in general, but I would say postbiotics. So given that when we think about part of what happened in '25 was the lack of certainty in terms of policy clarity, biofuels.

I have Greg here with me that I think can provide a little bit of an update on how do we see that transpiring because I think it's very important as we think about 2026 to get clarity.

Yes, happy to add some comments here. So as we reflect on 2025, certainly, no shortage of challenges through the course of the year, and it starts with the trade war. And as you evolve through the year, of course, now we have at least the makings of a trade deal and the resumption of some additional Chinese buying of U.S. soybeans. But I think if you also look at the uncertainty around the biofuels policy and how the year played out. If you go back to the Q2 earnings call, and that was just after the proposed RVOs were announced and the market got excited, crush margins had expanded. We're trading above $2 a bushel.

Well, shortly thereafter, as we got into August, you had a few other things come up. You had the USDA shifted 2 million or 2.5 million acres out of beans into corn that created a bid in the soybean market. You had the announced -- you had the SRE announcement and then you had the proposed SRE reallocation. And then somewhere in there, you started to realize the time line to get final RVO approval or final RVO ruling was getting delayed a bit. And at the same time, there was a bit more excitement came into the market about the Chinese trade deal that had recently been announced.

And so all of those things together maybe in addition to the Argentine tax holiday, which flushed a lot of soybeans out of Argentina and gave that crush industry some additional raw materials to process. All of those things have led to margin compression that earlier in the year when we were a bit more optimistic about having more clarity around the RVOs didn't shape up the way that we or the market had expected. And so as we sit here today in early December, we've got -- our book of business for Q4 is essentially on. We've got a fair amount of our Q1 on. And so the softness in the margin structure that we experienced in Q4 kind of extends into Q1.

Okay. Fair enough.

So I would say wrapping it up '25, strong advancement on our self-help agenda, a lot of manufacturing improvements, a lot of portfolio optimization. That gives us a very robust cash flow generation during the year that allows us not just to distribute to shareholders, but also continue to advance our growth platforms. And as part of that, after the last quarter earnings, we announced the issuance of our 376 consecutive dividend. So we continue to have a very balanced capital allocation in that sense.

Okay. And so that's a great baseline from '25. And some of that, you hinted at things that change as we go into '26. But if you set aside markets, which can do what markets will do, and we'll talk about that in a little bit. Just what's the structural stuff, how to think about the pluses and minuses in '26 versus '25 from the stuff that's kind of under control or that's known at this point?

Yes. I think that we have made the company better during 2025, several things. I think portfolio management, portfolio optimization is a big part of that. We are a large company. We have more than 800 assets around the world. So there's always something that is either not getting the right return or can be optimized or can be -- can we take high-cost capacity and replacing by some. And we made some announcements on that. We had a plant down for 18 months, the East plant in Decatur, which makes protein. That plant is back now into operations, and that has allowed us to shut down a small high-cost facility, Bushnell and bring that capacity here. We have made a couple of -- a joint venture agreement in Lubbock in Greg's business, the announced of Alltech.

So I think you're going to continue to see that portfolio optimization and the whole effort of simplification around the company. I think we're going to see a full benefit of that during the next year. We have included some capital for growth indicator. We are growing natural flavors. We're growing natural colors, and we're growing some probiotics as well. So I think overall, we feel very good about what's coming next year.

Okay. Okay. Great. And then maybe for Greg, maybe for Juan, what do you guys expect from the government kind of timing around some of the announcements? I think it's dragged on longer than people had at least once thought. So what do you think the base case is what the market expects? And kind of when do you think the government will let us know kind of the final results for the RVO and the SREs and all that stuff and kind of really nail it down.

So some of the clarity has been unveiled now with the China deal. And I think that that's positive, and we've seen the evolution of that. And I think the big question mark continues to be RVOs, SREs, all that depends on the EPA decision. And maybe Greg can highlight how we will see that evolving whenever the government makes a decision on that and how we will impact the margins for...

Yes. I think when we think about what's happening, it's really what's going to happen and when is it going to happen. And the timing, of course, is always -- I mean they're both challenges, but timing, of course, has been a challenge this year. When you think about what's going to happen, I think the strategic intent of the administration is to support U.S. agriculture and value-added agriculture as part of a biofuels policy. And so we feel comfortable that what comes out is going to be directionally positive for the industry and when becomes the question. And so we like everyone else are anxiously awaiting finalization of the RVOs.

At this point, we would expect, like many others that it's probably going to be early in 2026. When exactly, we don't know any more than anyone else. But once that happens, then the market can respond with confidence. And so what we would expect to happen would be you get a margin uplift in the biodiesel and renewable green diesel businesses so that you can bring on some of the idled capacity, some of the slower running capacity, some of the facilities that were shut down last year. That then creates a demand pull for additional incremental veg oils, specifically soybean oil and other oils, but specifically soybean oil. And as that happens, then you start to see the impact on the soybean oil market in the U.S. basis moves a bit higher, maybe you get some reaction out of the futures market with more crush expanding. And so that's the cadence that we would expect. It's -- first, maybe it's a margin improvement led by RINs. You see the reaction by the biofuel industry that then shows up in additional incremental oil demand, which should be supportive of crush margins as you get through the heart of 2026.

Okay. And do you feel the administration is talking to folks like you enough that they understand the implications of different decisions they may make around this? And so again, I guess the question, will they get it right if they're trying to help the farmer or might they do something that has an unintended consequence that they don't understand the parameters around?

I think them a continuous dialogue with industry participants, especially for what you said, not to create any unintended consequences. So they take the dialogue. We continue to talk even through the government shutdown. So I think they're trying to get it right. It's just there are many conflicting priorities and many things that they are balancing, but -- we are ready for whenever they make a decision.

Fair. I think everybody is. And just last one on that. What's your view where they come out on the tax for feedstock that comes from offshore? Because again, there have been a lot of reports we've read that there's just not enough in the U.S. So do you think they understand that and don't want to cause inflation, so they'll bring that tariff down? Or do you think that will stick?

So we've heard the same discussion about does the half RIN on imported feedstocks stick? Does it get delayed a year? Does it get delayed 2 years? Whatever the rationale is, it's unclear. Is it an administrative issue? Is it concern about inflation? It's unclear. But the fact is, I think with the proposed RVOs, import -- some amount of imported feedstock is going to be needed. And I think what the administration is trying to do is just continue to provide an advantage for domestic produced feedstock, whether that comes through a mechanism of a half RIN for imported feedstock or whether it comes through some other mechanism embedded in the policy. I think their intention is still to continue to promote domestic origin feedstock.

Okay. Okay. And do you have a view -- I lied, I guess I got one more question on 45Q, 45Z that those basically remain intact and that you're able to collect on those? Or do you think that there's variability around what may happen with those over time.

No, we believe that they're going to provide a good framework for us to make decisions going forward.

Okay. Very good. Then maybe you mentioned the trade deal with China. Beans most affected, but how does that impact ADM? Are you guys set up that you can benefit from that? And is the mechanism strong enough that you can kind of hold China's feet to the fire that they'll actually take the beans that they've talked about?

Do you want to cover that?

Sure. When I think about what's happened, it's -- the positive in it is that the U.S. and China are back to the table and trade is happening. And so the market talks about maybe 4 million, 4.5 million tons of beans that have been traded so far. We know there's been some Milo traded. We know there's, I think, even been some wheat traded. And so while we're in the off-season or at least approaching kind of the off-season of the U.S. export season, what I look forward to is getting normal trade back in place with China so that as we get into 2026 and we get into building our book of business for the normal export season of the U.S., which is Q3, Q4, that we've got our biggest trading partner at the table again.

Yes. Okay. And how different or indifferent, a ton of beans from Brazil versus a ton of beans from the U.S. to China as it runs through ADM's process, how much more important is it that it comes from the U.S. than Brazil to you or it's not?

Our footprint in North America is larger than in Brazil in terms of total volume exports. So from that perspective, there's a benefit. We'll have greater participation likely if it comes out of the U.S. But I think, like I said earlier, I think the benefit is if you have normal trade and you can build that book of business as you go through the year, then you can get back to running your assets without that uncertainty that's hung over the head of the entire U.S. export industry this year.

Duffy, I think something that is important when this clarity comes is like in the periods of high uncertainty, customers become hand to mouth and the farmers become very reluctant sellers. So you have a lot of spot going on. I think that when you get clarity, things start to flow. When we got the trade policy clarity with China, all of a sudden, farmer selling that was behind the last year have become more in line because farmers start to sell. So I think it's -- we are in a period of transition. We need to go to that normalization of how we run the model.

Okay. And when you think about just the health of the general farmer, I mean, obviously, they're under more stress today than they were 2 years ago, 4 years ago, 5 years ago. How does that impact your business? How does that impact their behavior, maybe holding on to grain longer or selling it sooner? Do you expect to see any kind of variation there from just farmer health?

I would say, if I look at before the trade deal with China, farmers around the world were reluctant sellers. I think they probably remain a little bit like that in Latin America. Now in the U.S., as I said, since markets have rallied, they have caught up. But yes, at these price levels, they are very sensitive to price variation. So whatever news moves.

Okay. And then if we assume that there is a resolution fairly shortly in Ukraine between Ukraine and Russia, how does that impact kind of ag writ large in your business in particular, if, let's say, you put a year's worth of investment in and they can kind of restart some of their ag exports that have been curtailed?

Yes. I would say, and you can comment your own that business. I think our exports out of the Black Sea has been incredibly resilient. I mean we have 652 people in Ukraine. So we are a large player there. And it's incredible what they do. Day in, day out, they continue to ship. And I think that the security of the shipments have been so far very well protected. So -- but we have also a crush plant there, and that has been operating depending on the energy security. So we have our own generators, but part of the war as you get into the winter is to attack the energy infrastructure of the country. So sometimes we need to go around that. But I would say it's important to ADM, it's important to the world, but we also shouldn't forget that there is a lot of there is plentiful wheat and corn around the world. So if God forbid, Ukraine will stop exporting tomorrow, probably between the U.S. and Brazil, they can pick up part of that.

Yes. Maybe just to add, I mean, for sure, it's a humanitarian tragedy. And we think about our employees over there all the time. If you look at what's happened just in recent months, the level -- the intensity of the attacks, the frequency of the attacks, the error alerts and the frequency of those, those altogether, even if you're not subject to a direct hit or lose power or access to infrastructure, you still lose production time. And so if you look at the practical utilization of the capacity over there, it's actually dipped with the intensity of the attacks. And so in a piece steel environment, the first thing that would come back would be the existing capacity that's been so disrupted by the air rate alerts and people taking shelter to try to protect themselves. The secondary piece that would happen would be the rebuilding of some of the infrastructure, right? There's been significant damage to some of the ports, specifically in Mykolaiv, but other areas as well. So -- but the immediate impact would be you'd have access to additional capacity that exists today, but because people are protecting themselves, they're constantly disrupted.

Yes. Okay. Maybe a few specific things on ADM. You've got a pretty big cost program in place, the $500 million to $700 million. Remind us kind of end of this year, what's the run rate that we expect to have achieved? And then kind of what are the increments going forward, how much incremental that will give us?

So we were expecting to end about $200 million to $300 million. That was the short-term run rate savings in that. Part of that was simplification. Part of that is manufacturing costs. So simplification, we did SG&A reduction program early in the year, we completed. We have a lot of coming out of this portfolio optimization and simplification of businesses that maybe we're not that strategic or we don't see the returns paying forward in ADM.

A lot of pick and choose what assets fit better for the long term and optimization on that regard. And a big manufacturing footprint we have after the cost of sales, our big number, we are a big trading company, but we're a big manufacturing company. And everything that we can get there from an energy perspective, usage of chemicals or even what we call side stream valorization, which is are we leaving some protein into that? Are we leaving some oil that we can extract, that's heavily. So I would say the cost programs are percolating across the company. And I'm proud to report that we are on track to deliver on the $500 million to $750 million over the next 3 to 5 years.

Okay. And then maybe can we turn and kind of maybe walk through each business specifically? And just what are you seeing where supply-demand matters kind of what's happening on the supply side? Are we seeing capacity additions? Where should people kind of worry about maybe new capacity coming in? Where do you see a pretty stable or maybe even improving supply-demand market where those matter?

Do you want to cover yours and then I cover the other?

Sure. I think in the space that we operate in, I would say the crops in Brazil continue to get bigger. And as those crops get bigger, they've grown into some of their infrastructure. There's some pinch points down there that probably need to be addressed. But as those crops get bigger and as policy in Brazil continues to support biodiesel consumption, you end up with expanding crush capacity, expanding biodiesel capacity to try to meet those mandated volumes going forward. In North America, I would say we've seen a significant expansion in the crushing industry in this region.

So long as the policies keep up with the capacity, then we're in good shape. I think this year has proven that we have a bit of a rough patch in the process because demand comes -- or supply comes on in lumpy increments. But I would say the capacity that's being added so far looks like it's being added where there's lots of human miles to feed. There's lots of animal miles to feed. They're in regions where you have supportive biofuel policies that should be able to help support the capacity that comes online.

The other thing I would say is the function of prices to incentivize additional demand. And what we've seen over the last year with soybean meal prices as low as they've been, you've seen an increase in acceleration in livestock production around the world. And so we need those animals to be able to consume the meal that's being produced and that will be produced to make sure you have the right balance between veg oil demand between food and biofuels, but also the protein meals that we produce in our plants.

So in terms of the other 2 businesses -- thank you, Greg. Carb Solutions, I would say, I said in my onset remarks that we've seen a little bit of softness in sweeteners and starches. Part of that is less corrugated boxes, less packaging. I think it's the general economy, if you will. There's no capacity coming into that industry. So what we do is we try to -- what we do, what we call the fight for the grind, which is we make 22 products or more out of corn. So how do you grow biosolutions, how do you grow some of those products or fermentation type of products. So -- but I would say that business continues to be very stable and robust. And there is a lot of decarbonization coming in that business. That's a business that hosts our carbon capture and sequestration.

So I think there is a lot of activity in that regard. On the nutrition, as I said it before, I think the drivers are flavors, natural colors, postbiotics, and the self improvement that we have in specialty ingredients with this plant coming back up. I would say there is some capacity there, but we have taken care of one of hours in Bushnell shutting down that to balance that. And now it's a matter of getting our customers back after being down with that plant for about 18 months.

Okay. And then maybe a similar question kind of across the businesses, how are you thinking about either the inorganic opportunity for you guys in those businesses or just the inorganic opportunity within those industries, Will we see some consolidation? Do we need consolidation? Or are they kind of on cruise control and the structure of those industries will persist for the next 3 to 5 years?

Yes. I would say -- so first of all, organic projects are the ones that give us the best return. So from a capital allocation, we tend to think about cost discipline and organic growth projects the first. And of course, then we honor the dividend. In terms of M&A, I think that for the commodity businesses, we think more about targeted consolidation. So more local plays. I mean we are very careful what do we bring to the portfolio because then we need to do portfolio optimization and it takes more time. So we have many assets anyway. So we try to have a lot of purity in that regard.

In terms of inorganic M&A in Nutrition, we always look for bolt-on acquisitions. We don't need anything special at this point in time. Probably what we need the most is to increase our participation, our capacity in emerging markets. We are very strong in North America and Europe, but we could be better and bigger. We are -- we have grown in China, but we can be better and bigger in Latin America, Africa and India, and that's probably what we're looking at.

Okay. Okay. Perfect. Well, I think maybe, Juan, if you want to just kind of take the last couple of minutes remarks, a couple of -- I mean, just some closing remarks kind of, I guess, as an investor, why is ADM interesting today? And maybe also just kind of look back, obviously, Q3, you brought down some estimate your expectations for the year. Is Q4 kind of doing what you expect and then kind of the launch of that into Q1, does the near term feel like it's where you thought it was going to be? And then just kind of walk that into kind of why ADM, if I'm an investor.

Sure. So first of all, on the -- taking down the guidance for the year, I think we took it down because, again, we didn't get the policy clarity that we needed. At this point in time, we haven't gotten that. So -- and as Greg said, we're probably already a percentage sold for Q1. So you should think Q1 is going to be similar to Q4, if you will, from a crush perspective.

I would say why ADM? I think that we go after food security in a world that's going to have 10 billion people by 2050. We go health and wellness in a world that we're all getting older and that population wants to take care of their standard of living and feeling better as we age. And we do sustainability with everything we do in biofuels to expand the fuel pool, but also looking at climate change and carbon capture and sequestration, which is very good for us.

So I think we are sitting on very good trends going forward where we have the ability to win. I think then you look at how we execute. I think we are executing well, and we continue to make in tough times like this, we try to set up the company to be having robust cash flows during the tough times. That has allowed us this year, again, to -- for 50 consecutive times to increase our dividend. So we increased the dividend 2%. So we are this dividend aristocrat kind of category. And we feel very good about that and about our ability to even increase dividends in very difficult times like today.

So when you look at that, we made the company better and then policy will give us clarity. So we believe that incrementally, we're going to get better margins for ADM, for the farmers, for the whole agricultural industry during 2026. So I would say this is a good time to be in ADM, and I see the future with a lot of optimism.

Terrific. Well, Juan, Greg, thank you guys very much for joining us today. Appreciate it.

Thank you.

Thank you for having us.

Good morning, and welcome to the ADM Third Quarter 202 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's call, [ Kate Walsh], Director, Investor Relations for ADM. Ms. [ Walsh], you may begin.

Welcome to the third quarter earnings conference call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; and Monish Patolawala, our EVP and Chief Financial Officer. We have prepared presentation slides to supplement our remarks on the call today, which are posted on the Investor Relations section of the ADM website and through the link to our webcast.

Some of our comments and materials may 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 and materials are based on many assumptions and factors that are subject to numerous risks 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 the materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events. In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website. I will now turn the call over to Juan.

Thank you, Kate. Hello, and welcome to all who have joined the call. Please turn to Slide 4.

Today, ADM reported adjusted earnings per share of $0.92 and total segment operating profit of $845 million for the third quarter. Our trailing fourth quarter adjusted ROIC was 6.7%, and cash flow from operations before working capital changes was $2.1 billion year-to-date. With a challenging industry-wide operating environment, we remain flexible adapting plans were needed, taking action on what it is in our control and investing for long-term growth.

A key part of this dynamic environment relates to the status of highly anticipated U.S. biofuel policy. We believe progress on this front will drive significant biofuel and renewable diesel demand and lead to elevated pricing, volumes and margins across several of our key operating areas, which we expect will set up a constructive environment over the long run.

But based on the current short-term environment, our AS&O business is significantly impacted. Against this backdrop, we have made good progress with our self-help agenda. We made the strides in improving our plant efficiency. We've entered into numerous strategic transactions, which advance our portfolio optimization objectives and we are accomplishing cost savings through several targeted streamlining initiatives.

These actions have generated robust cash flow this quarter and strengthen our business going forward. Our strong balance sheet, driven by a disciplined capital allocation process give us flexibility to invest for growth and continue to return value to shareholders. Following our second quarter earnings call, we announced our 375th consecutive quarterly dividend.

Please turn to Slide 5. Let me share some specific examples of how our team continues to drive simplification, optimization and execution excellence across our segments through our self-help agenda.

For our services and oilseeds, results for the third quarter were sequentially in line and aligned to the expectations we set out in our second quarter earnings call. The team continued to focus on operational excellence which was reflected in [ crush ] volumes increasing 2.6% sequentially and 2.2% compared to the third quarter of last year, [ a dating ] a lower-than-expected margin environment.

Our Ag Services subsegment executed a robust export program during the quarter, supported by strong corn and [ meal ] programs. We achieved the best total export volume for the month of September since 2016, which helped offset some of the weakness we experienced in our crush business.

For carbohydrate solutions, the business delivered sequentially steady results overall with lower global demand for sweeteners and starches, offset by strength in ethanol pricing and exports. We achieved a key milestone in our decarbonization strategy connecting our Columbus, Nebraska dry corn mill plant into Tallgrass [ driblazer ] CO2 pipeline and are commencing CO2 injections. This marks the second ADM facility that is reducing its carbon footprint by CO2 sequestration.

And for Nutrition, the team drove another quarter of sequential improvement, led by our flavors and animal nutrition portfolios. Flavors North America achieved record quarterly revenue in the third quarter and Flavors internationally recently won a notable contract that is connected to a deep AS&O customer relationship. We're engaging directly with major customers of AS&O and carbohydrate solutions on our Nutrition portfolio, highlighting the power of our interconnected value chain.

Our Specialty Ingredients subsegment is expected to benefit from [ dedicator ] is plant being back online and consistently producing [ white flake]. During the quarter, we announced network simplification in Specialty Ingredients to streamline our production footprint, and we expect results to improve as this takes hold and we build back our third-party sales business.

Within our Animal Nutrition portfolio, our turnaround continues to deliver better results with more progress to come. In Q3, we announced plans for a North American animal feed joint venture with [ Altec ] to further transition our Animal Nutrition business into higher-margin specialty ingredients, and we expect this JV to commence operations in 2026.

Through these efforts and several other initiatives we have undertaken this year, we remain on track to achieve our targeted $200 million to $300 million in cost savings in 2025 as well as our aggregate cost savings of $500 million to $750 million over the next 3 to 5 years.

Strong cash management allows us to continue to invest in areas of innovation where we see attractive growth potential. For example, we are developing the next generation of Flavor systems for our growing energy drinks portfolio. Our cutting-edge energy emulsion technology provides enhanced product stability consistent quality and a simplified supply chain. Additionally, there is a strong demand momentum behind our natural colors portfolio and we are exploring accretive opportunities to expand both products and geographies in this business.

Another area of attractive growth for us is postbiotics, where ADM is investing in innovation. Recently, we were honored with an innovation award at a global premier trade event for our proprietary post biotic formulation designed to support human immunity and digestive wellness. We also launched our second pet-focused postbiotic. These are examples of the diverse in-house research and development expertise we've developed in the biotic space.

We're also underway with advancing ethanol production performance improvements. Through close collaboration between R&D and operations, we've implemented advancements that are delivering improved yield gains, rollout to additional plants is in progress and further enhancements are in testing designed to drive ongoing optimization across our facilities.

We're also investing in [ size ] stream valorization as part of our continuous efforts to optimize our production processes and add value to our byproducts. As we close out 2025, we will continue to action our self-help agenda while adapting to evolving trade policy and remaining flexible to offset the impact of challenging dynamics to the best of our ability.

Given the deferral in U.S. biofuel policy and other global movements, it is difficult to predict the timing of when we will see a structural increase in biofuel demand. The result were lower in our expectations for full year 2025. We now expect adjusted earnings per share to be between $3.25 to $3.50, down from the approximately $4 per share as we discussed last quarter. Monish will review this in more detail.

Overall, the recent progress with the trade deal with China, coupled with our expectation of gaining U.S. biofuel policy clarity within the next several weeks or months, is an encouraging setup for next year. We expect 2026 will offer a more constructive environment for both the industry and the American farmer, and that should create both positive economic opportunities and drive additional long-term investments throughout our business and the agricultural sector.

With that, let me hand it over to Monish to share a deeper dive into third quarter financial results and our full year 2025 outlook.

Thank you, Juan. Please turn to Slide 6.

AS&O segment operating profit for the third quarter was $379 million, down 21% compared to the prior year quarter. The deferral of U.S. biofuel policy and the evolving global trade landscape continued to impact demand for AS&O, primarily in our crushing and refined products businesses.

In the Ag Services subsegment, operating profit was $190 million, representing an increase of 78% compared to the prior year quarter. The increase was driven primarily by higher export activity in North America with support from our operations in South America.

South America improved year-over-year as the prior year quarter was negatively impacted by higher costs related to logistics take-or-pay contracts. Additionally, there were net positive timing impact of approximately $54 million year-over-year.

In the crushing subsegment, operating profit was $13 million, down 93% from the prior year quarter. Both global soybean and canola crush execution margins was significantly lower than the prior year quarter. Both soybean and canola crush margins were down more significantly in North America, driven by global trade evolution and reduced biofuel production.

There were net positive timing impacts of approximately $41 million in the third quarter of 2025 compared to the prior year quarter, partially offsetting the net timing benefit year-over-year for insurance proceeds of $24 million in the prior year quarter.

In the Refined Products and Other subsegment, operating profit was $120 million, down 3% compared to the prior year quarter as positive timing impacts helped offset lower biodiesel and refining margins. There were net positive timing impact of approximately $12 million year-over-year.

Equity earnings from our investment in Wilmar were $56 million for the quarter, down 10% compared to the prior year quarter and excluding specified items. We typically record our share of Wilmar's financial results on a 3-month lag basis with the exception of material transaction or events that occur during the intervening period that materially affect the financial position or results of operations. During the third quarter, we recorded a $163 million charge related to the penalty imposed on Wilmar by the Indonesian Supreme Court and for our AS&O segment, have presented this as a specified items.

Turning now to Slide 7. For the third quarter, Carbohydrate Solutions segment operating profit was $336 million, down 26% compared to the prior year quarter. In the Starches and Sweeteners subsegment, operating profit was $293 million, down 36% compared to the prior year quarter, primarily due to a decline in global S&S demand, which impacted both volumes and margins. This is a continuation of consumer buying trends we have been experiencing throughout 2025, with softness in demand in sweeteners and a reduction in starches demand primarily from less consumption of packaged goods and corrugated paper.

Additionally, in EMEA, S&S volumes and margins continue to be impacted by persistent high corn costs related to crop quality issues we discussed in the last quarter. Global wheat milling margins and volumes were fairly stable in the third quarter relative to the prior year quarter. Additionally, the prior quarter benefited from approximately $45 million of insurance proceeds. In the Vantage Corn Processor subsegment, operating profit was $43 million, up from a $3 million loss in the prior year quarter, driven by strong export activity, coupled with industry downtime for scheduled maintenance, decreased ethanol inventory stocks and strengthened pricing. Overall, ethanol EBITDA margins per gallon for the quarter were approximately double, and the volumes were roughly flat compared to the prior year quarter.

Now turning to Slide 8. In the third quarter, Nutrition segment revenues were $1.9 billion, up 5% compared to the prior year quarter, including foreign exchange gains that accounted for approximately 2% of the increase. Human Nutrition revenue increased by 6% and the Animal Nutrition revenue increased by 3% compared to the prior year quarter.

Foreign exchange gains accounted for approximately 2% of the increase in human nutrition revenue and approximately 1% of the increase in Animal Nutrition revenue. Nutrition segment operating profit was $130 million for the third quarter, up 24% compared to the prior year quarter. Human Nutrition operating profit was $96 million, up 12% compared to the prior year quarter as a result of strong flavors growth and an uptick in biotic demand.

The third quarter of 2024 also benefited from approximately $25 million of insurance proceeds as compared to $10 million in the third quarter of 2025. Animal Nutrition operating profit was $34 million for the quarter, up 79% compared to the prior quarter as a result of the combination of an increased focus on higher-margin product lines, disciplined cost control and progress with ongoing portfolio streamlining initiatives.

Turning now to Slide 9. The strength of the ADM model is that we generate strong cash flow through multiple commodity cycles. For the first 9 months of the year, ADM generated cash flow from operations before working capital of approximately $2.1 billion, down by $254 million relative to the prior year quarter as a result of lower overall total segment operating profit.

We continue to maintain a solid cash position and have made good progress in improving our working capital efficiency. For example, we reduced inventory by $3.2 billion year-to-date compared to $1.2 billion during the prior year period, largely driven by sharpening our inventory management practices. We continue to be very disciplined in the areas in which we invest.

During the first 9 months of 2025, we invested $892 million and maintain our expectations of full year 2025 CapEx to be in the range of $1.3 billion to $1.5 billion. Year-to-date, we have distributed $743 million in dividends.

The last point I'll mention on this slide is that our net leverage ratio as of the end of September was 1.8x, improved from last quarter and in line with our previously communicated year-end target ratio of approximately 2x.

Now turning to Slide 10. We have provided details on our revised 2025 outlook. Earlier today, as Juan mentioned, we revised our full year 2025 adjusted EPS expectations. Taking into account our year-to-date results and the continued softness primarily in crush margins, we now expect adjusted earnings per share to be in the range of $3.25 to $3.50 per share for full year 2025, down from the approximate $4 per share guide we provided during our second quarter earnings.

I will now provide some color on several assumptions that are underpinning our revised guidance range. First, with our self-help agenda, we remain on track to deliver between $200 million to $300 million in cost savings for 2025. Second, for AS&O, as we have previously discussed, as we move through each quarter, we increasingly lock in our book of business for the upcoming quarter.

Based on the portion of our business already booked plus our view of the market, we are expecting continued softness in global soybean crush margins which is a step down from our expectations last quarter when we were expecting global soybean margins to be in the range of approximately $60 to $70 per metric ton.

Our Ag Services subsegment is expected to benefit from the robust harvest season we are having in North America. But given trade dynamics, results are projected to be weaker than we had forecasted at the time of our second quarter earnings. And the team will continue to progress our advancements related to plant up time, manufacturing efficiencies and working capital improvement. We expect insurance proceeds of $10 million in the fourth quarter as compared to $50 million in the prior year quarter.

Thirdly, for carbohydrate solutions, on the Sweeteners and Starches front, we expect a continuation of the same pressure from softer demand trends that we have experienced throughout 2025 and expect high corn costs to persist in EMEA.

Ethanol export flows are projected to drive similar sequential demand throughout the fourth quarter. However, margins are expected to be lower than the highs we experienced during third quarter. Ethanol EBITDA margins for fourth quarter 2025 are expected to be roughly 10% lower than the fourth quarter of 2024 EBITDA margin. We expect insurance proceeds of approximately $20 million in the fourth quarter of 2025 as compared to approximately $40 million in the prior year quarter.

And lastly, for our Nutrition segment, we continue to take action on our portfolio optimization and are making sequential progress in network streamlining and cost improvements. In Human Nutrition, Flavors typically experience seasonal softness in the fourth quarter given our product concentration in the beverage categories. This is expected to be partially offset by improvement in Specialty Ingredients now that our Decatur East plant is returning to planned utilization rates.

In Animal Nutrition, we will continue to pursue our ongoing turnaround action, which includes a transition into higher-margin specialty ingredients. We expect insurance proceeds of approximately $5 million in the fourth quarter of 2025 as compared to $45 million in the prior year quarter. Insurance proceeds at the segment level for fourth quarter 2025 are expected to be funded roughly half by a captive insurer and half by third parties as compared to third parties funding the vast majority of insurance proceeds in the prior year quarter.

As Juan mentioned, we have continued to make good progress on our self-help agenda, focusing on strategic portfolio optimization, cost reductions and improved working capital management, all of which are strengthening our cash flow. Further, we have refined our digital strategy and are pivoting away from large global implementations and are directing our resources to prioritize regional and more agile projects and accelerating our data journey while continuing to invest the appropriate amount in cybersecurity and network and application resilience.

To conclude, I want to take a moment to thank all our ADM colleagues for their focus, adaptability and contributions to the company's long-term success. These efforts are integral to our ability to navigate the current dynamic environment. Back to you, Juan.

Thanks, Monish. Let me wrap up by saying, overall, we will continue to drive operational excellence and strong cash flow through our focus on manufacturing efficiencies, portfolio simplification and cost streamlining.

In AS&O, our team is positioning our asset network to maximize opportunities from the expected improvement in market conditions, primarily as a result of global trade evolution and the pending U.S. biofuels policy.

In Carbohydrate Solutions, we will continue to drive operational excellence and closely monitor softening consumer demand trends and broader economic signals, while maintaining momentum around our decarbonization strategy, which we expect will open value opportunities in low-carbon solutions.

And for Nutrition, we expect steady progress across our portfolio with additional opportunities in natural colors. With that, we'll take your questions now. Operator, please open the line.

[Operator Instructions] Our first question for today comes from Ben Theurer from Barclays.

First of all, on crush and the outlook, obviously, a lot of things have changed, but can you help us reconcile a little bit the sequential decline in the third quarter for crush versus what you had in the second quarter and to a degree in the first quarter when actually the crush environment was, I would say, lower but I mean, more stable but at a lower level.

Just help us reconcile like how much was like maybe locked in, carried into it and how we should think about crush sequentially. Just crush on a stand-alone basis into the fourth quarter, just given the uncertain you've mentioned on biofuel and then I have a very quick follow-up on those insurance numbers.

Sure, Ben. Listen, as you remember, soybean board crush rally sharply post the RVO announcements. And if you recall, at the time of our last earnings call, board crush was about like $2.25. Then after that, it has moved lower because of a variety of factors. We had a little bit of a decrease in acres in the U.S. then there was this charter about the trade deal with China that made a pickup in [ bins ] basis here and certainly, we have the uncertainty about biofuels policy.

There was a large amount of SREs granted in the period with a supplemental proposal to at least partially relocate that, but it is in [ comment period ] until the end of October and now a little bit delayed because of the government shutdown. So then in the period also, Argentina has a tax holiday that create the potential for increased crush in October, November, December period.

So we saw that $2.25 turning into something like $1.20 and now currently bounce back to about $1.50. So in Q4, we expect board crush to remain in the current range, if you will. And as we are here today, we've probably booked about 80% of Q4. So certainly, the $4 range is out of range or now with no extra policy. And so that's what we're seeing at the moment. So the plants are ready to crush harder. We still see with optimism 2026 that the team has executed well in everything they could do in this environment, especially in the inventories, when money is reported $3.2 billion lower in inventory helping our cash position, that was basically a lot of that is the heavy lifting of the AS&O team trying to make improvements out of a difficult condition.

So we still feel very strong about 2026. All these things that are under in motion right now, whether it's the RVO finalization, the RVO is positive for domestic feedstocks and certainly, the trade deal potentially to have more sales to China is also positive. But all those things need to be finalized during the next 60, 90 days or something like that, then we will have more clarity about where margins will move.

Okay. And then Monish, just real quick on those insurance gains. You said half and half to come [ from]. So that half that kept that somehow then reflected in the Other segment. Just wanted to confirm that.

That's right, Ben. And similar to last year. So last year, our total insurance proceeds in the fourth quarter were $135 million. Most of that was funded by third-party insurance this year is, give or take, $35 million. Half of it right now is funded by [ captive ] and we assume that the other half will be funded by third party.

Our next question comes from Manav Gupta of UBS.

My first question is on your September announcement of forming the JV with [ Altek]. Help us understand how the scheme together and help us understand the benefits of this JV and how it helps ADM.

Yes. Thank you, Manav. Listen, if you recall our strategy in Animal Nutrition has 2 phases, if you will. One is what we call fit for growth, and that has been driving operational improvements. And we have seen, I think, sequential improvements in operations for the last like 8 consecutive quarters in Animal Nutrition but the ultimate objective was to execute the pivot toward more specialties in animal nutrition.

And so we basically combine here the compound feed businesses of ADM, one of the leaders of the market, which is [ PoloTech ] and combine really 2 powerhouses here, combining decades of experience unparalleled capability with production expected to come in 2026. And with that, the ADM part that remains is more concentrated on specialty ingredients or premixes.

And basically, we're going to be playing a little bit human nutrition playbook, which is to have a specialty pipeline that can grow faster than maybe the big commodities that we have put in the joint venture. So we expect big synergies from that joint venture, a big operational improvement and we expect then the remaining Animal Nutrition in ADM to be a high-margin, high-growth type of segment, if you will.

Manav, I would add to Juan's piece on -- one is you asked for the JV, but I also want to just look credit [ Ismail ] and [ Ian ] and the team on the progress they've made in general on Animal Nutrition. You can see the results showing from the operational side, which is the fit for growth that Juan mentioned. So overall, really good progress by that team on execution.

Perfect. Sir, my quick follow-up is, and I understand there's a lot of policy non clarity here. But the pieces which are on the table and not fully solved are much higher RVO, a scenario in which there is no production tax credit for imported renewable diesel, only 50% [ RINs ] for imported feedstocks and the possibility of removing that indirect land use penalty clause, which will make soybean oil very competitive in terms of production tax credits with [ Tallo ] and other waste oil.

So when you put all these things together, eventually when the policy comes around, you see a very, very strong '26 and '27, whereby you will have to make more renewable diesel in the U.S. and make it more with domestic feedstocks and more like domestic soybean oil. If you could talk about all those policies, which are on the table, I understand they're not finalized, but they create a very strong momentum for you if they do come together. If you could talk about that.

Yes. I think that you highlighted it correctly. All those pieces came very favorable, as I said in my initial remarks to domestic feedstock. So we expect as these policies are enacted and finalized and again, there are many aspects of that need to be finalized. We need to have the final RVO numbers. We need to have the treatment of the SREs, so there are many of those things that need to be enacted.

But when all that is finalized, you can see a scenario in which [ greens ] will probably pop first. So it's going to be a gradual improvement. But the way we have seen it in the past is RINs need to client to allow renewal deter plans to have margins for them to run. That in line will pull on more demand for soybean oil.

That, in turn, will demand for us to crush more and to run our assets harder, which increases crush margins. And then as demand stabilizes and times go by, you can see margin coming up into biofuels as well. So that's kind of the way we see it running through our P&L.

You have to remember that in crush, the big problem we have is this oil leg that is relatively soft right now that will be addressed by the RVOs whenever they are ready. In the other leg, mill has been very strong. Growth in mill has been like globally like 8.5%. We're expecting at about a very strong 6% still for next year. The U.S. continues to be very competitive mill and mill continues to buy themselves into Russian. So most of the customers of mill in the protein sector are showing profitability and good times. So that side of the leg is strong.

If we can strengthen the RBOs and bring more clarity there, we expect strong crush margins going forward. And that's why I think if you remember last quarter, we said that we were setting up our footprint of plants to make sure they will be able to run harder and we are demonstrating that.

So we are pleased with the setup. It's just from here to there, there is a lot of clarity that needs to happen that doesn't depend on us. We like to talk more about the things that we can do to improve. We have improved the company in terms of cost, in terms of cash, in terms of portfolio. We've been running this CCC that we call it, cost, cash and capital, since 2014 when we launched it, and I think the organization has this memory that we need to act into that.

They quickly go and help us with the cost reduction targets with the cash targets and certainly, we made consistent and steady improvements in our portfolio optimization. So we look at '26 with optimism. We just don't know if it's 12 months of '26 with optimism or 9 months of '26 with optimism because that depends on the government.

Our next question comes from Heather Jones of Heather Jones Research.

I wanted to go back to crush one, and I understand all that you were saying as far as the crush curve, et cetera. But in the U.S. mill basis, was pretty strong throughout Q3 and it's been stronger than expected in early Q4. And just based on our data and anecdotal reports, cash margins were strong for much of Q3 and into early Q4.

So given the performance you all put up for Q3 and crush and then the outlook for Q4, just wondering if you could just break out where you think the big differences were? Was it -- did you have like most of your physical [ meals ] sold before the rally, were you all short beans or just -- I was just hoping you could help us understand -- reconcile the 2, if you could.

Yes. I think it's a little bit of both. But for the most part, when we get into the quarter, by the time we do earnings calls, we are like 75% sold for the next quarter. So we probably were sold before that rally. And then the rally didn't last as much that long, to be honest.

So then today, where we are booking is very much similar in Q4 to what we booked in Q3. So I don't see a significant improvement. There is a lot of variability. And I think that when I look at the performance of the commercial team, they've been -- they've done very well.

So we -- I can't pinpoint to one thing that we really regret in the business. I would say Ag Services was a little bit softer, but not much. I think that we have a good [ meal ] and corn program exporting from the U.S. Of course, we didn't have any beans going to China, but the volumes kind of held, if you will, in -- there was the difference that we didn't have the take-or-pay in Latin America that impacted us last year. So that was a little bit of a compensation for the lack of maybe exports to China.

But in crush, we are seeing, again, an environment for us, for our business in Q4, kind of similar to what we booked in Q3, but maybe Monish can give more granularity on the numbers.

Yes, sure. So Heather, what Juan said is absolutely correct. So there was a period of time if you look at when we had earnings last time and Board was high. Replacement margins were high at that point too. And then as the quarter progressed, which is when we do a lot of our books for Q4, you actually saw replacement margins come down.

And that's why crush margins right now, what we are seeing is flat to slightly up depending on the geography you look at. I think North America, you're seeing crush margins will be slightly higher than Q3, but then you've got to remember, we've got a global business. So then you've got all these other business, other regions, and depending on how basis plays out in those, you would actually see a lower number.

So net-net, when we put it all together, Heather, we are saying it's somewhere flattish to a little higher. We'll see where it actually lands. As Juan said, we are decent-sized booked coming into Q4. But of course, there are spot deals still available for the balance of the book. And as I know Greg and the team, they're going to take every opportunity to get what they can and so that's what we're going to work on.

But nothing changes from the fact that the team is very focused on driving value, driving inventory, driving cost out. And as Juan has mentioned, when the crush comes, our plants are ready. And he talked about that, too, is we are seeing plant operations better. So hopefully, as all these things come together, the team can continue to keep executing and keep driving more than where we are right now. But that's where we see it right now, and that's why we're calling it as is.

Yes, Heather, one thing that I noticed, and I've been running maybe for like 10 years, is that right now, both farmers and customers are very reluctant to book loans. So farmers are kind of selling reluctantly and buyers are kind of hand to mouth, if you will. So that doesn't allow for a full orderly flow of the chain, if you will, that we normally see.

And because of all this uncertainty, nobody knows exactly what's going to happen with soybean basis and all that based on the trade deal and nobody knows exactly what's going to happen with the oil leg because of the policy uncertainty. So everybody is like trying to go hand to mouth. And that makes it a little bit more difficult for us to reflect some of the conditions in the P&L. That may be one thing I noticed from the past.

That's helpful. And just my quick follow-up is just as we extrapolate forward, I know the hope is that we get a finalized RVO before the end of the year. But I think [ prudency ] would say, is probably coming in Q1. So just wondering how are you thinking about replacement margins for Q1? And then like you said, farmers and customers are hand-to-mouth, but as much visibility as you do have, what are you seeing on that front?

Yes. So Heather, I'll take a stab at this. So one, when Manav asked the question on how he sees policy play out, again, it depends on timing of clarity. So whether it's a 6 months or 9 months. But sitting today, since we still don't have clarity, the book that we are booking at for Q1, right now is, I would say, flattish to Q4. But again, we are open.

So it's not like we have already booked all of our Q1. But I think the timing of when the policy comes in will actually have an impact. You are seeing right now, I think the oil leg leaking with the current where soybean prices have gone up, but let's see how that plays itself out.

So to answer your question succinctly, on Q1, right now, we haven't seen a big pop in margins but hopefully, post regularity clarity you will start seeing that to move up. The question is whether you see it for the first quarter, you see it for 2 quarters. It will all depend on the timing of the policy and also what's in that policy.

Our next question comes from Andrew Strelzik of BMO.

I wanted to start by asking about your outlook for Ag Services. And the third quarter was stronger than we anticipated. You mentioned the trade deal with China. But you're talking about 4Q maybe being a little bit softer than you had originally anticipated. So I guess, was there a timing dynamic in the third quarter? Or what else has changed for the fourth quarter? And as you think about maybe that bit more subdued outlook, is that really a 4Q issue? Or does that linger as well into '26?

Listen, I think Ag Services, it was higher in Q3, as you noticed. And I would say, versus last year, we had good volumes in North America when you consider our export of mill and of core, our system worked well. And last year, we had the problem of the take-or-pay in Brazil that we sold for this year, so that has a delta there.

As we look forward, I think the market right now is all about -- so we also have good destination marketing operations and our global trade operated well. We expect those things to continue, but margin opportunities are more difficult right now. I would say we really need this clarity on the trade deal. But although on the surface, it is possible, it is positive for ADM and for grain in general. We haven't seen yet a joint document highlighting the details of these.

So we really -- it's a big difference whether the 12 million tons of soybeans will happen in calendar year or in marketing year, of course. And whether that's counted the material that is sold versus the material that is shipped at what prices that will happen. So a lot of that is still in the air. So that's what I was telling Heather before that there's a lot of people going hand to mouth, and the farmers as well, if you look globally, farmer selling has been slow when you compare to historical average, probably with the exception of Argentina when they have the tax holiday because farmer wants to see what happened next.

And I think that at this point in time, the 2 big events that will move commodity prices will be clarity on the China trade deal and regulatory clarity on the biofuels policy. And until then, things are going to be a little bit hand to mouth for a while.

Andrew, I would just add one more on S&L. And across the business is execution. So that was the other thing in 3Q. Greg and his team continue to drive good cost control very good job on inventory management, as you can see from the results. And that cost control or the self-help that Juan has mentioned was across all the businesses.

So when you put all that together, that's how we came in with the adjusted EPS of $0.92 and I would say we continue that journey on self-help, including in the fourth quarter. So to answer, you add a second part to your question, which is this is just a fourth quarter issue or not. So as I think about it, good execution in once policy clarity comes in, in 2026, that sets us upgrade for '26 and '27, as Manav also said. And so this is just that transition quarter. And the team will continue to drive every self-help idea they can operationally to keep getting better.

Our next question comes from Pooran Sharma of Stephens.

Sorry to just belabor on this point, but maybe I wanted to just talk about some of the moving pieces here for clarity in the biofuel policy. I think you have the SRE kind of comment period out of the way. And I know you have some noise with the government shutdown.

But we've been hearing reports that the EPA has prioritized the RVO through the shutdown and that maybe you could see something in the hands of the OMB by early to mid-December which then could set the 2025 compliance date towards the end of Q1. And if you think about what the industry would do, like the obligated parties would then need to shore up their 2025 book.

So do you kind of see a -- from a timing benefit as it stands right now? This being kind of an early to mid Q1 event? Or how should we think about kind of the moving pieces here?

Thank you, Pooran. Listen, let me tell you what we know. We know that EPA is aligned with the agricultural industry to support American agriculture and energy dominos through strengthening of the domestic demand for domestic feedstock and prioritizing that.

I don't want to speculate on who's working on what at the EPA. I think that the EPA is committed to that. And as quickly as they can, they're going to resolve that because they know the industry needs that and the agricultural industry needs that. So our role is to be prepared, and we will be prepared. You will see, as I explained before, in the gradual improvement of these whenever the market will detect that there is movement, you're probably going to see RINs popping up. And then eventually, we're going to see crush margins popping up. And so we're ready to do that. Other than that, I will be speculating and I have no basis to do that for them. So I will leave it there.

Okay. Great. I appreciate the color there. Maybe just shifting over to Starches and Sweeteners, I think we're approaching that time of the year where you get in the contracting season. And just was wondering how we should think about the moving pieces here.

I think you have buyers pushing for lower prices amid a larger carryout. And I think you and others have noted some softness in demand in the industry, but at the same time, you have really good export volumes. So I was just wondering if you could tell us how negotiations have been faring and do you think there's the potential for this contracting season to get stretched out like it did last year?

I would say we are maybe 20, 30 days away from knowing what happened in the contract season. So negotiations are happening right now. So I won't comment on that. I would say, corn is plentiful and the U.S. will have a very large growth based on good yields and higher acreage. I think that Brazil will have a record crop. Argentina will have another 50 million-ton crop.

So I would say raw material will be plentiful, but there has been good demand for corn around the world. Corn, I think, is being used in many ways, of course, in feeding but also in biofuels policy. And if you think about the U.S. is competitive to -- in ethanol to Brazil, and Brazil has -- there are governments out there that are enacting like E10 for next year. We have E15 all year round in California. So ethanol continues to be the cheapest oxygenate out there.

So 2 billion gallons of exports this year, maybe 2.2, 2.3 for next year. So I think there's going to be a lot of corn, but demand is robust as well. As you said, in general, in the products in Carb Solutions, we have seen some softness, both in Sweeteners and Starches and -- and yes, in sweeteners and also in starches due to corrugated boxes and carbon. So we'll have to see.

Our team produces more than 20 products from the wet mills from corn. So we balance that equation as we go into the negotiating contracts. So we continue to feel good about the negotiation. As I said, we are doing it now. Contracting is coming along nicely, and we normally report this in February. That's why we finish every year.

We have -- as you heard me saying over the years, we have avoided the cliff that we used to have in which every contract will end at the same time. So we have a more balanced portfolio of contracts that makes us this time of the year less concerning for at least ADM. But as I said, I think that contract season is going normal. I wouldn't describe anything else, but we will have more to say in February.

Our next question comes from Tom Palmer of JPMorgan.

I wanted to ask on the Nutrition business. You cited seasonality is, I think, the main quarter-over-quarter headwind to think about. But at the same time, I think previously, you had a bit more of a sequential improvement embedded in the outlook. So curious about what might have shifted and to what extent seasonality is normal versus maybe there are some extra factors this year?

Sure, Tom. Yes. I think what we see in Nutrition is sequential improvement in operational capabilities of the Nutrition business. We've been fixing things and now we're very happy that the East plant is back up. So and you saw Animal Nutrition continues to be sequentially improving.

I think that Flavors is a big part of the business, of course, and Flavors, we are heavily tilted towards beverages and beverage has sold more in the summer. So as the Northern Hemisphere faces the winter now and enters into the winter. We normally see about a 15% reduction in our volumes as we go into Q4.

So that will be partially offset by the fact that we will have a full quarter, hopefully, of operations of the East plant that will bring our cost down as we are producing white flakes versus buying it from competitors. But we are in the process of recovering customers there. So you have those puts and takes. But I would say the business continues its path to improve to operational improvements.

Okay. And I did have a clarification question just on Ag Services. There was the export window in Argentina late in 3Q. To what extent was that a benefit in 3Q? And will there be just curious how the booking works, right, with shipments for survivals? Will there be a boost to think about in 4Q from that as well?

So the way it works is that we did get a piece of that export license. I had to go back and check memory. But some of our shipments did happen in Q3, and you're going to see some of that but that will be -- that's already reflected in our export numbers and in our guide that we have given you, Tom. So no delta from there.

And I would say we continue to watch that, Tom, in Argentina because, of course, after this holiday and after the election success, farmer has not been selling that much as there has been no devaluation in Argentina. So we will have to see how the commercialization happen. We think it's going to be tight commercialization till the end of the year. So we're working that closely.

Our next question comes from Steven Haynes of Morgan Stanley.

I was hoping you could maybe put a finer point on the crush outlook for 4Q I think you mentioned before that the margins are going to kind of be stable and that volumes might be higher quarter-over-quarter. Maybe just to frame it versus last year would also help in terms of the actual segment dollars. I think it was around $200 million. Would you expect the fourth quarter to be above that or in line or maybe a bit below. If you could just help frame it that way, that would be helpful.

And just so I get to your question right, Stephen, you're talking about AS&O or crush, you're talking about crush, right?

Crush.

So the -- if you look at crush, crush margins are going to be lower on a year-over-year basis. just based on where we've talked about already about all the factors impacting it, where it's flat to slightly up from Q3 but still down on a year-over-year basis. So based on that, we would expect that crush on a year-over-year basis would definitely get impacted.

Secondly, just remember that in our results, we normally mark-to-market our derivative positions at the end of every quarter. So depending on where crush margins or basis ends up being on 31st December, you could see a positive mark or a negative mark. At the end of the day, that all that Mark is doing is moving money between quarters, but it doesn't change the overall economics.

So that's how we'll have to figure out and then figure out how board crush timing goes because that also has an impact. But if you just look at pure execution margins on a year-over-year basis, it is lower and therefore, as a result of that, execution margins in crush will be lower in dollars also on a year-over-year basis.

Even though Greg and team are continuing to drive higher volume in the factories, as can be evidenced by the work that you saw in Q3, where you've managed [ ticks ] have production greater than 2% on a year-over-year basis.

I would also add canola to the same complex. Stephen, just to let you know, it's the same dynamic. Even canola is down on a year-over-year basis. So that will also have an impact. Both of those show up in crush.

Our final question for today comes from Salvator Tiano of Bank of America.

Yes. I'm just wondering, you got a lot of questions about [ Nexus ] crush margin and what would happen. I'm just wondering on trade dynamics and the potential -- the higher demand, assuming the RVOs are approved as their proposed right now, whether it's in Q1, could we see the U.S. at that point becoming a net importer of soybean oil? And if that happens, given that we have a bunch of tariffs, assuming the same place, what kind of move could we see in domestic soybean oil prices that could go into your bottom line as a domestic producer?

Yes. A lot of speculation in that question. We do, as you suggest, we run scenarios all the time, and there are many things that could happen. So let's chop it by pieces here.

On RVOs, we know whenever the policy is enacted, we're going to be crushing more and soybean oil will be more demanded. We have the means to take care of that today. But of course, you bring the possibility of 12 million to 25 million tons export to China, and that moves the equation. If the 12 million tons is on a marketing year basis is a different pipeline, it's a different carryout that we have in the U.S. versus if it's on that needs to be shipped all in 2025.

So all those things are put into the consideration. I would say market tends to adjust. So there is going to be a strong crush in Argentina. There is going to be a strong crush in Brazil. If the U.S. has more demand than we can supply internally then prices will come up, and we will attract other productions, and we could end up importing soybean oil.

At this point in time, at this point in time, we are exporting the soybean oil. So it will be a significant change, but that significant change will be brought by policy and grains popping up and the things that we described before. So it is a possibility. And -- but before that, we're ready to crush very, very hard to supply domestically before imports come in.

I think Salvator, you need to reflect on the fact that we have improved our operations to supply exactly this kind of environment. I think our Ag Services and as is ready to tackle any commitment that the U.S. or China will make in terms of exporting and AGM has a big percentage of all those exports and the capabilities to do so and ADM has the plants ready to crush very hard and supply the policy.

The domestic policy that the EPA is supportive. So we got ourselves ready to do that. The company is in good shape from a cash and cost perspective. and we are continuing to adjust our portfolio. So we look at '26 and '27 with a lot of optimism.

Thank you. At this time, I'll now hand over to Kate Walsh for any further remarks.

Thank you all for joining the call today. If you have additional questions, please feel free to reach out directly to me. We appreciate your continued interest and support and wish you a great rest of your day.

Thank you all for joining today's call. You may now disconnect your lines.