Hello and good morning, and welcome to ADM's Third Quarter 2021 Earnings Conference Call. All lines have been placed on a listen-only mode to prevent background noise. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Vikram Luthar, CEO, Vice President, Head of Investor Relations, Chief Financial Officer, Nutrition for ADM. Mr. Luthar, you may begin.

Thank you, Emily. Good morning and welcome to ADM's third quarter earnings webcast. Starting tomorrow, a replay of today's webcast will be available at www.ADM.com. For those following the presentation, please turn to Slide 2. The Company's Safe Harbor statement states that some of our comments and materials 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 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 you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events. On today's webcast, our Chairman and Chief Executive Officer Juan Luciano will provide an overview of the quarter and highlight some of our accomplishments. Our Chief Financial Officer, Ray Young will review the drivers of our performance, as well as corporate results and financial highlights. Then Juan will make some final comments after which, they will take your questions. Please turn to Slide 3, I will now turn the call over to Juan.

Thank you, Vikram. This morning, we reported third quarter adjusted earnings per share of $0.97, which is a 9% year-over-year improvement despite a higher tax rate. Our year-to-date adjusted EPS of $3.69 is already above our full-year 2020 adjusted EPS. Adjusted segment operating profit was $1 billion, up 18% versus the third quarter of 2020. This marks our eighth consecutive quarter of year-over-year OP growth. Our trailing four-quarter adjusted EBITDA was about $4.6 billion, almost a billion more than a year ago, and our trailing four-quarter average adjusted ROIC was 9.6%, significantly higher versus the year-ago period. I remain proud to lead a global team that is delivering robust returns and sustained growth in profits. Our strong quarter and our ongoing upward trajectory are a testament to our team's execution and agility, as well as the consistent implementation of our strategic plan. I'd like to take a moment now to highlight some of our accomplishments from the quarter. Slide 4, please. I'd like to start by talking about our approach to portfolio management. Our starting point is that we believe that, in order to thrive and create value, a Company needs to have a dynamic view of its business portfolio. So when we talk about the dramatic transformation of our portfolio over the last 10 years, it's not a discrete event; it's a representation of our continuous work to identify opportunities for growth and improvement. Those opportunities must be the right ones. The enduring trends of food security, health and well-being, and sustainability provide unique and stable opportunities for ADM to expand our existing capabilities. We are focusing our efforts on identifying high-growth, on-trend areas with attractive margins that are adjacent to our existing capabilities. This focus has formed the basis of our Global Nutrition business. The acquisition of Wild gave us entry into flavors and a global taste platform, alongside bolt-on acquisitions to add adjacent capabilities and build a one-stop shop with an industry-leading pantry of ingredients and solutions for human nutrition. We mirror this approach for animal nutrition with the acquisition of Neovia. We're continuing to do the same today as we grow our business. To meet growing demand for sustainable solutions, we announced a joint venture and offtake agreement with Marathon Oil Company to support the production of renewable diesel. We are continuing to invest in key nutrition categories. As demand for alternative protein grows from $10 billion to $30 billion over the next decade, we are further enhancing our capabilities with the acquisition of Sojaprotein. Further, with global demand for pet foods growing to $240 billion in the coming years, we are securing our ambitions with a 75% ownership stake in PetDine. In the area of microbiome, we have signed an agreement with Vland Biotech to launch a joint venture that will perfectly position us to help meet $1 billion in retail demand for probiotics in China. These are just some examples of how we are dynamically positioning our portfolio to continue driving growth for years to come. There will be more to come, and you can expect an increased level of investments to support our sustainable earnings growth and further expand our capacity and capabilities. Please turn to Slide 5. As part of our portfolio management approach, we are working to evolve our carbohydrate solutions business. We are expanding our array of solutions to meet growing customer demand driven by the enduring trend of sustainability. We've made significant progress recently focused on two areas: new opportunities for our alcohol production and our growing value solutions platform. We started with alcohol. Last Thursday, we announced that we reached an agreement, which we expect to close at the end of the month, to sell our ethanol facility in Peoria. Yesterday, we announced a Memorandum of Understanding with Gevo to explore potential joint ventures, one of which would include our Columbus and see that rapid design mills and the ethanol assets. We are transitioning 900 million gallons of ethanol production to support growing demand for low-carbon, sustainable aviation fuel. These actions represent our commitment to a process that we began when we first announced the third issue review of our dry mills. Taken together, they will allow us to significantly reduce our exposure to vehicle fuel ethanol while using our expertise and assets to capitalize on new opportunities. SAS is one of those opportunities. The U.S. and EU have set goals that together will support almost 4 billion gallons of annual sustainable aviation fuel production by 2030 and more than 45 billion by 2050. The other focus area for our carbohydrate solutions evolution is our biosolutions growth platform. Biosolutions, which we launched about a year ago, is an effort focused on using our product streams to expand our participation in sustainable, higher-margin solutions for attractive end markets like pharmaceuticals and personal care. This is an area of significant potential, and our team is doing a great job identifying new and exciting opportunities. Earlier this fall, for example, we signed an MOU with LG Chem for producing lactic and polylactic acid for bioplastics and other plant-based products. These efforts are enabling value solutions to deliver 10% annualized revenue growth, including more than $80 million in new revenue wins in the first nine months of this year. We believe there are many new opportunities to come. From the transformation of our dry mills to our growing biosolutions platform, our work to evolve our carbohydrate solutions capabilities is a perfect example of how we are managing our portfolio and delivering smart strategic growth. I want to discuss our business outlook at the end of our call. Of course, we'll provide more detail during our Global Investor Day on December 10th. But in the meantime, I will turn the call over to Ray to talk about our business performance.

Thanks, Juan. Slide 6, please. The Ag Services and Oilseeds team continued their outstanding year with another quarter of substantial profit growth. In Ag Services, we're proud of how the team executed in a challenging environment, including a swift return to operation after Hurricane Ida. Overall results were significantly lower versus the prior year quarter, driven by approximately $50 million in net timing effects that should reverse in coming quarters, as well as $54 million in insurance settlement recorded in the prior year period and lower export volumes caused by Hurricane Ida. Global trade continues its strong performance. The crushing team delivered substantially higher year-over-year results, executing well to deliver stronger margins in a dynamic environment that includes strong demand for vegetable oils to support our existing food customers, as well as the increasing production of renewable diesel. Results were also driven by about $70 million in net positive timing effects in the quarter. Refined products and other results were significantly higher than the prior-year period, driven by positive timing effects of approximately $80 million that are expected to reverse in future quarters. Strong execution in EMEA, North America biodiesel, and strong refining premiums due to demand for renewable diesel and food service recovery in North America also contributed to the results. Equity and earnings from Walmart were lower year-over-year. Looking ahead, we expect to see continued fundamental demand strength for Ag Services and oilseeds products, including from China, as well as a solid global soybean crush margin environment in the fourth quarter. This is partially offset by some higher manufacturing costs. Additionally, RPO will be negatively impacted by timing reversals. All told, we expect results in the fourth quarter to be significantly higher than the third quarter of this year. Slide 7, please. Carbohydrate solution results were lower year-over-year. The starches and sweeteners sub-segment, including ethanol production from our wet mills, showed their agility by managing through dynamic market conditions and optimizing the mix between sweeteners and ethanol production throughout the quarter. Year-over-year results were significantly lower primarily due to higher input costs. Vantage corn processor results were much higher versus the third quarter of 2020, supported by their resumption of production at our two dry mills and improved fuel ethanol margins, particularly late in the quarter. Looking ahead to the fourth quarter, we expect the solid fundamentals from the end of the third quarter to continue for Carbohydrate Solutions, with good ethanol margins extending through the quarter due to industry supply-demand balance and solid demand for corn oil and starches, offset by higher manufacturing costs, particularly in Europe, as well as the absence of the Peoria dry mill. All told, fourth quarter results for the segment should be similar to the previous year's fourth quarter. On Slide 8, the nutrition business remains on its solid growth trajectory with 17% higher revenues and 15% on a constant currency basis and 20% higher profits year-over-year, along with strong EBITDA margins. The Human Nutrition team delivered revenue growth of 12% year-over-year on a constant-currency basis, helping to drive 9% higher profits. Higher volume and improved product mix drove strength in beverage and flavor results in North America, which was partially offset by lower results in APAC. Ingredients continued to benefit from strong demand for alternative proteins, offset by some higher costs. Health and wellness results were higher due to robust sales growth in bioactives and fiber. Nutrition profits grew primarily due to the strength in the mineral assets, as well as feed additives. Looking ahead, we expect nutrition to continue on its impressive growth path with strength across human and animal nutrition linked to strong year-over-year earnings expansion and 20% full-year growth versus 2020. Slide 9, please. Let me finish up with a few observations from the other segment, as well as some corporate line items. Other business results were substantially lower than the prior year period, driven primarily by captive insurance underwriting losses, most of which were offset by corresponding recoveries in the other business segments. We expect the fourth quarter to have some additional insurance underwriting losses resulting in breakeven other business for the fourth quarter. As expected, net interest expense for the quarter decreased year-over-year due to lower interest rates and favorable liability management actions taken in the prior year. In the corporate lines, allocated corporate costs of $230 million were driven primarily by higher IT offering and project-related costs in the centralized centers of supply chain and operations. Looking at total corporate costs, we are still on track for the calendar year to be overall similar to 2020. The effective tax rate for the third quarter of 2021 was approximately 18%. We anticipate our calendar-year adjusted effective tax rate to be at the upper end of our previously communicated range of 14% to 16%, and potentially a bit higher depending on the geographic mix in the fourth quarter. Our balance sheet remains solid with a net debt-to-total capital ratio of about 26% and available liquidity of about $11.5 billion. With that, I will turn it back to Juan.

Thank you, Ray. Slide 10 please. From consistent sustained profit growth to the ongoing management of our business and product portfolio, our team has a lot to be proud of. There's one other thing we achieved last quarter that I want to mention. Many team members were impacted when Hurricane Ida hit in late August, so we provided temporary housing arrangements, portable generators, food, water, and more. In fact, many ADM colleagues traveled to the region and spent time helping repair their co-worker's damaged homes. For that, I am very thankful to our team. As we prepare to grow into our outlook in far more depth on December 10th at our Global Investor Day, I look back on the third quarter and all of the last nine months. I continue to see a team and a Company that are delivering on our goals and our purpose. We are closing out 2021 with great momentum. We're on track for a strong fourth quarter and the second consecutive year of record earnings per share. Looking ahead to 2022, we see another strong year for ADM. A robust global demand environment will continue to provide opportunities for us to leverage our indispensable global origination, processing, and logistics capabilities. Nutrition will continue on its strong growth trajectory in line with our 15% growth target, on its way to a billion dollars in operating profit in the coming years. Of course, there are challenges, but thanks to our unique value chain and global footprint, our unmatched expertise in health and well-being, sustainability, and a truly unparalleled team of nearly 40,000 colleagues around the world, we remain very optimistic about the strong year to come. With that, Emily.

To register your questions, please. Our first question today comes from Ben Bienvenu from Stephens. Ben, your line is open.

Thanks. Good morning, everyone.

Morning, Ben.

Hey, Ben.

I've got one long-term question regarding your announcement yesterday around SAS, and then I want to clarify the guidance. Congratulations on the announcement! One question is, when you think about the total opportunity for SAS, obviously the embedded demand is significant, given SAS seems like one of the most pertinent ways to reduce greenhouse gas emissions. Though we're unclear at this time, I'm curious how you think about engaging with Gevo on this partnership? One, what commitments do you think you'll need in terms of these facilities to enter this end market ultimately? Secondly, help us think about the Memorandum of Understanding. Why did you go with that initially versus a more legally binding agreement? Lastly, just talk about the bigger picture regarding the ethanol markets—that would be helpful. I know there are a lot of questions in there, but I'd love to hear you address them.

Thank you, Ben. We've been evaluating the options for our dry mills for a very long time, studying the opportunities for our ADM shareholders as we try to divert these assets. Certainly, when we look at the sustainability trends and the opportunities, one of the issues with these assets is that they are very large, which could be a challenge for testing them. We are looking for sizable opportunities; size can turn into a competitive advantage. When you look at the industries related to CO2, we have identified several strategic partners who agree this is a viable solution. Both the U.S. and European governments are looking to incentivize the demand for this, as you heard statements from President Biden and Secretary Franco. Therefore, we see a very positive environment developing, a significant adjustable market for us. When you combine our size with raw material procurement, costs, and the ability to decarbonize based on our carbon capture and sequestration efforts, it allows that complex to provide very competitive, low CI fuels for the industry. We decided to create joint ventures; many options potentially could occur, including the creation of those two joint ventures which would involve ADM contributing the two dry mills, allowing us to deconsolidate these assets. However, still too many discussions are happening, and many foreign partners may join with us in this. We believe this is a better outcome for our shareholders in terms of realizing value from these two drivers. We're very excited about the opportunities.

Great. My next question is a clarifier regarding 2022. First, Ray, did I hear you say on Ag Services and Oilseeds for the fourth quarter that you expect it to be higher than the third quarter, but you didn't mention higher than the fourth quarter last year? Are those the benchmarks we should consider? That's part 1. Secondly, export demand looks strong for next year, and renewable diesel is continuing to gain traction. How do you feel about Ag Services and crushing in that broader Ag Services and Oilseeds segments as we enter 2022?

Listen, as we look towards Q4 for ADM, we expect a strong performance. We anticipate strong crush margins and robust demand for proteins, with strong demand for Oilseeds also. Moreover, the expected renewable diesel will add to this demand. We are facing an improved environment for ethanol as we enter Q4. We estimate exports from the U.S. in volume similar to last year, as competitors' plants are down for the same reasons. Nutrition should continue growing at 15 to 20%. Energy inflation issues remain, but we are heading into Q4 and Q1 with strong momentum. Therefore, we feel very optimistic regarding crush margins, and given our limited export activity in September, our export window may extend into January or February, potentially longer than last year. So at the moment, we feel very positive overall.

From Bank of America, Luke, your line is now open.

Thank you. Good morning, team.

Good morning.

Good morning, Luke.

I just wanted to ask a quick question and follow up on Ben's previous inquiry. You mentioned the Peoria facility and the new MOU with Gevo. You've done a lot with your ethanol assets, so just a clarifying point: Is your strategic review of the ethanol assets completed? Are you still considering how you will look at your fuel ethanol capacity and even your wet mills, or has your thinking evolved?

No, I would say that the conclusion of our review led to determining that the best option for Peoria was to divest it, essentially shedding about 135 million gallons of our ethanol capacity. We plan to relocate about two-thirds of our total ethanol capacity through this MOU with Gevo. However, we will still have some exposure to ethanol on a long-term basis, but we always said we didn't like the undifferentiated nature of dry mills. In our wet mills, we have more options to protect margins and returns. By reducing market capacity, we believe this will create stronger supply-demand fundamentals and margin opportunities for us going forward.

That makes sense. Additionally, staying on Carbohydrate Solutions quickly: Ray, you mentioned improved operating profit recently, showing a promising trend. It seems like you're experiencing some margin compression or at least lower operating profits. Is this mainly due to heightened input costs? How do you see what you are selling in sweeteners or starches impacting that margin pressure?

You're correct; we are vertically integrated in Europe, which presents a headwind. However, the ethanol margins in the current market are quite strong, reflective of reduced variables. Also, driving miles and gasoline demand are back to pre-pandemic levels. The positive news is that, while many focus on the HFCS aspect, the non-HFCS components of our portfolio are performing extraordinarily well. For instance, citric acid and starch demand is very strong. Therefore, we provided guidance indicating there are various factors at play, but we expect our fourth quarter for Carbohydrate Solutions to align closely with last year's performance.

Thank you for the clarity.

Our next question comes from Ken Zaslow from Bank of Montreal. Ken, please proceed.

Good morning, everyone.

Good morning, Ken.

The investments you've made are several, including the 75% stake in the tech business, the LG Chem partnership, and ACS. How much capital have you deployed to this? What return is expected on these?

We haven't disclosed the exact amount of capital allocated to the LG Chem partnership because discussions on how the partnership will take shape are ongoing. The major investment you mentioned is primarily around the recent P4 deal. We've decided to put 75% of our investment into that, thus managing capital well there. The overall invested capital for these recent announcements is significantly less than a billion dollars, and aligns with the bolt-on type of investment numbers we've discussed previously.

In 2022, you anticipate growth in nutrition at 15%, perhaps now 15% to 20%, which is always encouraging. However, if you're investing less than a billion, but it's apparent more than a mere breadbasket, will that number start to accelerate? At what year do you expect to see that, and what types of returns do you anticipate?

We will anticipate acceleration based on these investments. When we outlined our 15% growth target, it was not including significant acquisitions. We aim to reach around a billion dollars in operating profit within a couple of years, and this trajectory will be reinforced by some of these deals. Some acquisitions will be simple expansions, while others can provide more platform benefits that accelerate our growth rate. We will keep investing heavily in Nutrition due to the identified opportunities; our customers respond positively to our value proposition and we continue to witness our revenue wins grow.

Regarding the consumer trends you mentioned, where do you see your portfolio aiming today, and what do you think it will look like in three to five years?

That's a very good question; we'll provide more granularity at our December Investor Day. In terms relating to Carbohydrates Solutions, it is more challenging to adjust due to large assets. We believe that Ag Services and Nutrition will hold better margins aligned with emerging trends. We feel that a sizeable portion of ADMs will concentrate on these favorable trends in a couple of years, which gives us strong optimism for the future. We are well-positioned for long-term growth.

I hope to get those percentages for context in the future. Thank you.

Yes, we will provide that granularity. Thank you.

Our next question comes from Michael Piken from Cleveland Research. Michael, your line is open.

To better understand your outlook for exports, you mentioned that you believe the outlook for China and their grain demand can be strong. Could you quantify your expectations for their corn and soybean imports for next year and also the U.S. share of those imports?

We still believe that protein demand is strong. When we evaluate our team’s insight in China, we estimate that China will need to import about 100 million tons of soybeans and about 25 million tons of corn. Of that corn, the majority will come from the U.S., while a small amount will come from Ukraine. We think the volumes may differ slightly from last year, as current consumers are adopting a more short-term supply strategy. Though this season is tighter overall due to anticipated import levels, we feel confident for exports this season. You should remember that we are in a limited supply-demand situation based on these numbers. Some capacity has been taken out, creating a tighter export environment.

Additionally, there seems to be a shortage of fertilizer. What is your expectation for fertilizer availability in Brazil and even in the U.S.? Do you think we will have enough fertilizer to plant crops globally, and how does this impact your fertilizer business?

At this point in time, it's primarily a pricing challenge. Natural gas prices have substantially increased, leading to a diverse situation in North America versus Europe. North America pays about $5 to $6 for natural gas, while Europe pays upwards of $30. Though fertilizer remains available for farmers, it comes at higher prices. We haven’t detected a substantial shift in acreage towards the changes, though it’s still early in planting intentions. While there could be a shift from corn to soybeans, it is unclear yet what farmers will do in terms of acreage for next year.

Our next question comes from Tom Simonitsch from JP Morgan. Tom, your line is open.

Thanks. Good morning, everyone.

Good morning, Tom.

You just mentioned China as a supply hub in the region. What is your outlook for Nutrition in Asia-Pacific compared to other regions? You’ve pointed out for the last couple of quarters that APAC has experienced some weakness in both Human and Animal Nutrition. How much of that weakness stems from ADM's existing capabilities in the region as opposed to external factors?

We've been proud of our nutrition initiatives; the challenges are mainly in developed parts of the world, while exposure remains limited in developing markets, including Asia Pacific. In Asia Pacific, we have established a base in flavors, and this expands our reach to major consumption hubs. We have a good supply chain for our customers and are entering more local markets that demand our products. Over time, we will continue expanding our capabilities for production and market development within Asia Pacific and South America, ensuring strong support for our global customers as well as capturing new local customer opportunities. This reflects the natural evolution of our business.

Thank you for that clarification. Following up on SAS, what is your operational plan for the two dry mills between now and when that SAF production is expected to come online in 2025?

We expect construction around that area will begin soon. In the next couple of years, we anticipate improvement in demand for driving miles as the market recovers from the pandemic. This should boost the ethanol exports from the U.S. to the global market. We recognize that China is also focusing on environmental efforts, so it’s reasonable to expect them to return to markets just like other regions; we've seen early signs of that.

To clarify from an operations perspective, we currently have not planned to alter operations at either dry mill. Both will continue producing ethanol, while Gevo will leverage the downstream tech and capabilities to transform them into SAS. We don't intend to invest further capital into those plants; our contribution will solely involve the two existing facilities.

That’s very helpful. Thank you; I’ll move on.

Our next question comes from Ben Theurer from Barclays. Ben, please proceed.

Good morning. Ray, congrats on the results. I've got two quick follow-up questions. Regarding the impacts from Hurricane Ida in the third quarter, you expect these effects to reverse in the coming quarters. Are you confident those reversals will happen quickly and positively influence your fourth quarter, potentially allowing for workflows to align with last year's performance?

I would say we anticipate a strong quarter for our Ag Services' performance this year. It is complicated by the quarterly accounting rules since it can result in margin expansion or contraction, but our fundamentals indicate strong demand and tight export capacity as of mid-October. We feel optimistic about our prospects leveraging current trends and demand.

In the Nutrition business, you've highlighted the strong performance on the Animal Nutrition side, almost doubling operating profit. However, Human Nutrition seems to have growth in just the high single digits. Could you provide more details about what caused the lower growth relative to your expectations? Was it primarily input cost pressure that you couldn’t fully pass on?

When analyzing Human Nutrition results for the quarter, we experienced a revenue growth of approximately 12%, which is a solid figure. Additionally, our EBITDA margins on sales remained stable. Even though Animal Nutrition improved significantly, it is due to ongoing integration efforts at Neovia. I do not think it was a weak quarter. We are pleased to have maintained robust EBITDA margins and have seen Human Nutrition grow at rates of about twice the industry average.

Thanks for the insight, and congratulations again.

Our next question is from Robert Moskow from Credit Suisse. Robert, please proceed.

Can you discuss your pricing outlook for corn sweeteners? We have seen corn prices are volatile; do you think it will have an impact on negotiations for next year?

Hey, Robert. The contracting season is underway. We expect HFCS volumes and margins for EMEA to remain strong in 2022. We did observe volatility regarding corn prices, which will reflect in contract pricing, leading to higher contract pricing next year compared to this year. We expect to see similar volumes as this year.

We're also witnessing a recovery in the Food Service Sector. In summary, while non-HFCS contributes significantly to our Carbohydrate Solutions overall, it remains a crucial area with promising margins, particularly in citric acid and starches. These factors should lead to another strong solution performance in 2022.

Concerning pea proteins, you mentioned alternative proteins. I heard that the pea crop in Canada was weak. How does this impact processors like you?

In fact, we feel strong about that business segment, as our Specialty Ingredient Systems are carving out a significant role in new markets. While these businesses are relatively new and represent almost minimal revenue currently, we have strong customer interest in these verticals. Although pea proteins have challenges, soy remains our primary driver and the main component for alternative protein opportunities.

Thank you for the clarification.

Thank you, Rob.

Our next question comes from Vincent Andrews from Morgan Stanley. Vincent, your line is open.

Can we discuss the LG Chem joint venture? Why is it structured into two JVs instead of one integrated production setup?

This decision revolves around where each company's expertise lies. Fundamentally, we prioritize asset-light strategies. LG will oversee the downstream capacities, while we handle upstream. Our objective is aligned around efficiently maximizing our investments while maintaining a focus on food, feed, and beverages. The agreement structure allows us to opt for what roles make sense.

Following up on the fertilizer concern: perceived availability issues have led to farmers deferring purchases, especially in South America. What percentage is related to fertilizer purchases, and do you see lower farmer sales affecting your origination business?

Right, the situation in South America has its challenges. Farmer selling has been slow due to various market factors. There are evident distortions due to currency, and while Brazil has improved, Argentina remains sluggish compared to previous years’ pace.

Thank you.

Our next question comes from Vincent Anderson from Stifel. Please go ahead.

I would like to continue the questioning on PLA. You're prioritizing incremental returns from your core competencies but minimizing direct participation in the PLA market. What’s your strategy?

We intend to optimize our facilities for areas of high growth potential, avoiding heavy capital-intensive industries like commodities. We prefer to maintain strong capital allocation towards food, feed, beverages, and health and wellness. Our collaboration with LG Chem aligns with this strategy, ensuring we retain control over our main focus areas while leveraging their expertise in chemical production.

Regarding the MOU announcement, it seems you might be considering excess capacity for lactic acid. Are you planning to market that independently as a standalone?

Part of that is correct; lactic acid has numerous applications. However, it's still early days, and our teams are collaborating with LG Chem to determine concrete numbers. We are focused on maximizing opportunities for ADM while ensuring our main capital remains reserved for core growth strategies.

Our next question comes from Eric Larson from Seaport Research Partners. Eric, your line is open.

Can you provide some insights on the entire SAF transaction? Historically, you’ve mentioned your dislike for volatility in ethanol. Do you think you've been able to negotiate more stable economics for SAF relative to ethanol?

You're correct that returns are essential to us, as is minimizing volatility. This is a central aspect our team is considering. Over time, we plan to become minority partners in these set-ups, so our focus remains on deconsolidating while potentially monetizing assets and benefiting from any upside in revenue.

Considering the age of your investment assets, are you expecting a modest capital return within that JV Agreement?

Our decision-making led us to this option because the asset valuation was favorable compared to alternatives. We're pleased with the value assigned to the two assets we're contributing, and we don't plan to infuse additional capital; our involvement is limited to those two existing dry mills.

Thank you for the clarity on that.

Thank you, Eric.

Our last question comes from Adam Samuelson from Goldman Sachs. Adam, your line is open.

Thank you. Good morning, everyone.

Good morning, Adam.

Can you clarify some of the regulatory factors you'd need to see before fully committing to the SAS initiative?

We've seen a strong desire from both the U.S. and European governments to bring SAS to the forefront as a solution to decarbonize the aviation industry. We're working towards creating a market conducive to this initiative. There are commitments from the U.S. and EU governments that suggest a robust market framework could develop to support a substantial volume of sustainable aviation fuel. However, these discussions are ongoing, and specific details remain fluid.

Regarding your balance sheet, net debt to EBITDA is low right now. You’ve not engaged heavily in stock buybacks this year. How should we consider stock buybacks moving forward?

We are carefully monitoring commodity prices. Our working capital remains about $2 billion higher than this time last year. If commodity prices normalize next year, especially with a decent crop from South America and the U.S., our balance sheet will stay robust. Following some recent bolt-on acquisitions, we anticipate returning to capital management practices similar to those in previous years, including consideration for stock buybacks.

That makes sense. Thank you.

Thank you, Adam.

We will be headlining our Global Investor Day on December 10th. We look forward to discussing our trajectory in more detail and sharing why we remain so optimistic about the opportunities ahead. In the meantime, as always, feel free to follow up with me if you have any other questions. Have a good day and thanks for your time and interest in ADM.

Thank you, everyone, for joining us today. This now concludes today's conference call. Please now disconnect your lines.