Archer Daniels Midland Company

First Linseed Oil Produced by Linseed Oil Produced First Daniels Linseed Company February 17, 1903 ARCHER DANIELS MIDLAND COMPANY DANIELS ARCHER 2015 Form 10-K 2016 Stockholders to Letter Statement Proxy ARCHER DANIELS MIDLAND COMPANY 2016 Letter to Stockholders and Proxy Statement | 2015 Form 10-K Dear Stockholders: At ADM, our purpose is to benefit society by efficiently connecting the harvest to the home. We fulfill this purpose in a variety of ways through our long value chain, which extends from the farm gate to the ingredients in many products found on the consumer’s plate. We originate and transport grain from areas of surplus to regions with deficits. We convert crops into quality products for food, feed and industrial customers. And, we provide innovative ingredients and ingredient systems for food companies addressing consumer preferences for convenience and healthier diets. I am pleased to report that in 2015, we made significant progress in all three of these areas within our value chain. • In our grain business, we extended our reach to customers in many new geographies by advancing our destination- marketing strategy, and by investing in critical infrastructure to facilitate trade. • In our processing businesses, we drove further efficiency in our operations and introduced new products to address evolving consumer needs. • And in our new WILD Flavors and Specialty Ingredients business unit, we began offering our food and beverage customers one of the industry’s broadest portfolios of products, services and fully formulated systems. Last year was also a time of macroeconomic challenges in our industry. Large global crop supplies, coupled with low prices, resulted in slower commercialization and limited merchandising opportunities; a strong U.S. dollar made U.S. crops less competitive in the global marketplace; and volatility in the energy sector impacted our business. Our results reflected these conditions. Net earnings were $1.85 billion, compared with $2.25 billion in the previous year. We nonetheless generated an adjusted return on invested capital (ROIC) 70 basis points above our weighted average cost of capital, or WACC, resulting in positive economic value-added (EVA) for the year. At the same time, we captured more than $200 million in annual run-rate cost savings. And, we shed parts of our portfolio that did not match our long-term financial objectives, acquired new businesses and moved into new geographies that will benefit the company going for- ward. This performance enabled us to return more than $2.7 billion to shareholders while investing $1.1 billion in projects designed to enhance profitability and lay the groundwork for longer-term growth — a balanced approach to capital alloca- tion we intend to maintain. We believe that, while temporary in nature, the headwinds we faced in 2015 may extend into 2016. As such, we are pulling the levers within our control: managing run-rate costs while reducing invested capital and growing synergies and sales in recently acquired businesses. We entered 2016 with new growth engines, a streamlined portfolio, a broader geographic footprint and a clear strategy to further improve returns and reduce earnings volatility. Advancing our strategy in 2015 ADM’s global value chain begins at the farm gate and ends at our customers’ doorsteps. These customers include many of the world’s largest food and energy companies, as well as smaller start-ups and midsized enterprises. We source crops such as corn, oilseeds and wheat from farmers worldwide. We then either resell them or transport them to hundreds of processing plants, where we transform the raw materials into a wide variety of food ingredients, animal feeds and feed ingredients, and renewable fuels and chemicals. Finally, we distribute these products to customers, using an extensive global trans- portation fleet comprising railcars, barges, trucks and trailers, and oceangoing vessels. To maximize the value we create through this integrated model, we have adopted a three-pronged strategy of optimizing our existing businesses; increasing the efficiency of our global operations; and growing strategically, with an emphasis on the higher-value businesses in our portfolio. Our aim is for all of our businesses to set the competitive standard in their respective industries. We analyze their performance — as well as the competitive landscape and market dynamics — to ensure that each business is capable of meeting our returns objectives. This process drives improvements in our competitive position. Our strategy has been closely reviewed and endorsed by ADM’s board of directors, and I have shared it with many invest- ors throughout the past year. In 2015, each of our business units made progress in all three areas. •Tooptimize our existing businesses, our Ag Services unit assembled a Global Trade Desk platform — built on the foundation of various international merchandising businesses we have recently integrated — that drove higher mer- chandized volumes. Our Corn Processing team continued to expand the number of products we make from the starch streams at our wet mills. Oilseeds Processing completed the sale of our cocoa and chocolate businesses. And our newest business unit — WILD Flavors and Specialty Ingredients, or WFSI — spent its first year focused on organic sales growth and on cost and revenue synergies, which enabled us to meet our $0.10 per share first-year earnings accretion target for the business. •Todrive operational efficiencies, teams at our origination and processing facilities made capital improvements and leveraged technology to reduce costs and enhance ADM’s competitive advantage. The majority of these improvements were achieved in our Corn Processing business, though Oilseeds also reduced its energy use in a year of record processing volumes, and our U.S. flour-milling operations achieved their best product yields ever. We also carefully managed our selling, general and administrative (SG&A) expenses, including staff costs, while investing in process and IT improvements that will enhance productivity and enable us to grow. In China, we completed the initial phase of our 1ADM business-transformation initiative; we are now focusing the program on our U.S. grain ele- vators and accounting and finance functions as part of the second phase. In addition, we implemented enhanced profitability analytics in several businesses, giving teams access to insightful, real-time data that will help us improve the service we offer our customers and capture appropriate value for our contributions. And in September, we opened a new ADM information technology center in Erlanger, Kentucky, on the WILD Flavors campus. The facility will serve as a hub to support the IT infrastructure needs of our growing global enterprise. ADM entered 2016 a more focused, efficient and integrated company with a streamlined portfolio, a broader geographic footprint and a clear strategy to further improve returns and reduce earnings volatility. • Finally, to grow strategically, we established or continued to develop new growth engines we see as key to ongoing value-creation. We executed several acquisitions, and we completed or significantly advanced key projects to expand our origination and basic-processing footprint, our destination-marketing capabilities, and our food- and feed- ingredient portfolios. The Ag Services team took steps to grow our port network by acquiring full ownership of export facilities on the Black Sea in Romania — at the mouth of the Danube River — and by embarking on an expansion of our export facilities in Argentina just months before the country’s new government eliminated export taxes on most agricultural products. We also entered into a joint venture to increase the capacity of our Barcarena export terminal in northern Brazil. And, we enhanced our merchandising, logistics and destination-marketing capabilities in the Middle East and North Africa by announcing our plan to purchase a 50 percent stake in Egypt’s Medsofts Group. We consider investments in infrastructure essential to our ability to connect the harvest to the home. As such, we pursue select projects and encourage governments to do the same to facilitate global trade and the efficient flow of goods. The Corn Processing business unit completed the acquisition of Eaststarch C.V., whose Central and Eastern European sweetener-production facilities give ADM a strong foothold in the EU marketplace as the artificial cap on cereal-based sweeteners winds down. In February 2016, Corn also agreed to acquire a wet mill in Morocco, further diversifying the global footprint of our sweetener business. In Oilseeds, we acquired the Belgian oil bottler AOR N.V., which gives us access to the continental European retail and foodservice markets. And WFSI secured its position as a premier provider of specialty food ingredients through the acquisitions of Eatem Foods Company, a leading developer and producer of premium traditional, natural and organic savory flavor systems; Harvest Innovations, a leader in non-GMO, gluten-free and organic ingredients; and a Modesto, California-based tree nut and seed processing facility. At the same time, the team began producing non-GMO lecithin at newly built plants in India and Germany; and we are currently completing construction of a soluble-fiber production facility in Tianjin, China, and a specialty protein plant in Campo Grande, Brazil. Today, WFSI is a key player in the $50 billion, higher-margin specialty ingredients industry. We can address every dimension of new-product development — nutrition, function, texture and taste — with a portfolio that includes natural flavors and colors, specialty proteins, nuts, seeds, ancient grains, edible beans, fiber, and polyols and emulsi- fiers, among other on-trend ingredients. WFSI’s customers range from small start-ups to large, multinational packaged-foods companies. With millions of millennial consumers and seniors alike increasingly interested in natural ingredients and clean labels associated with health and wellness promotion, WFSI is well-positioned to become the innovation partner of choice for the food and beverage industries.

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