Monish Patolawala
Chief Financial Officer at Archer-Daniels-Midland
Thank you Juan. please turn to slide seven. Before jumping into segment performance, let me quickly recap some of the financial highlights for the fourth quarter and full year 2024. While the fourth quarter played out largely as expected expected, we experienced negative pressure from market conditions later in December. For the full year, we finished within our previously guided adjusted earnings per share range. The team remained focused on key self help actions to finish the year and enter into 2025 on a stronger footing. Now transitioning into highlights on segment performance and starting with as and to start, let me provide some perspective on the broader market environment and the dynamics that shaped the fourth quarter.
The operating landscape was challenging in the fourth quarter with biofuel and trade policy. Certainty at the forefront, ample global supplies, higher crush rates from Argentina and uncertainty in biofuel and trade policy negatively impacted the crush environment. We also experienced high manufacturing costs as a result. Soybean and canola crush execution margins were approximately $10 per ton and $20 per ton lower respectively versus the prior year period. Also included in the fourth quarter results for our crushing subsegment were $52 million of insurance proceeds related to the partial settlement of the Decatur east and Decatur west insurance claim.
Increased pretreatment capacity at renewable diesel facilities as well as the continued elevated import levels of used cooking oil also weighed on both biodiesel and refining margins during the quarter. From a food oil perspective, we continue to experience softer demand from customers as they look to cut costs. The origination environment was supportive in North America as the logistical challenges related to the U.S. river levels eased compared to the prior year. Overall, against this backdrop, ASNO segment operating profit for the fourth quarter was $644 million, down 32% compared to the prior year period. For the full year, AS&O segment operating profit of $2.4 billion was 40% lower versus the prior year.
Looking at subsegment performance for the full year, Ag services subsegment operating profit of 715 million was 39% lower versus the prior year, driven primarily by lower South American origination volumes and margins in part due to industry take or pay contracts. The stabilization of trade flows also led to fewer opportunities in our global trade business. Crushing subsegment operating profit of $844 million was 35% lower versus the prior year as ample global supplies drove more balanced supply and demand conditions which negatively impacted margins throughout the year.
Executed crush margins were approximately $10 per ton lower versus the prior year in soybean and approximately $15 per ton lower in canola versus the prior year. There were net negative timing impacts of approximately $165 million year over year. The full year also included $76 million million dollars of insurance proceeds for the partial settlement of the Decatur east and Decatur west claims related to the incidents in 2023. Refined products and other subsegment operating profit of $552 million was 58% lower. Compared to the prior year as increased pretreatment capacity at renewable diesel facilities, higher imports of used cooking oil, aggressive competition among food oil suppliers to serve customer demand and biofuel policy uncertainty negatively impacted margin. There were net negative timing impacts of approximately $430 million year over year. Equity earnings from the company's investment in Wilmar were $336 million for the full year, 11% higher compared to the prior year.
Turning to Slide 8 carbohydrate solutions unfolded as expected in the fourth quarter as operating profit was largely in line with the prior year. The results reflected robust demand for ethanol, however, higher industry production drove a lower margin environment. Results also reflected strong North American starches and sweeteners performance as well as $37 million of insurance proceeds related to both the partial settlement of the Decatur east and Decatur west insurance claims for the full year. 2024.
Carbohydrate Solutions segment operating profit of $1.4 billion was flat compared to the prior year. Starches and sweeteners subsegment operating profit of $1.3 billion was slightly higher compared to the prior year as strong volumes and margins in North America were offset by weaker co product values and lower margins in EMEA and ethanol. The full year also included $84 million of insurance proceeds for the partial settlement of the Decatur east and Decatur west claim related to the incidents in 2023. Vantage con processor sub segment operating profit of $33 million was 28% lower compared to the prior year as lower margins due to the higher industry production more than offset robust demand for ethanol exports.
Turning to Slide 9 in the fourth quarter. In the nutrition segment, weaker consumer demand and ongoing headwinds from unplanned downtime at Decatur east drove lower organic revenues. Operating profit was $88 million in the fourth quarter, higher year over year due to improved mix lapping, the negative non recurring items in the prior year and insurance recoveries of $46 million related to the partial settlement of the Decatur east insurance claim. The quarter also included a negative impact due to higher cost of goods sold associated with the termination of an unfavorable supply agreement.
Full year Nutrition revenues were $7.3 billion, up 2% compared to the prior year. On an organic basis, revenue was down 3%. Human nutrition revenue was roughly flat organically as headwinds related to the unplanned downtime at Decatur east and texturance pricing offset improved mix and volumes in Flavors and Health and Wellness. Animal nutrition revenue declined due to unfavorable mix, negative currency impacts in Brazil and lower volumes due to demand fulfillment challenges. Full year nutrition segment operating profit of $386 million was 10% lower versus the prior year human nutrition subsegment operating profit of $327 million was 22% lower compared to the prior year, primarily driven by unplanned downtime at Decatur east and higher manufacturing costs partially offset by improved performance in the health and wellness business, favorable mix in the Flavors business and MA contribution.
The human nutrition subsegment full year Results also included $71 million of insurance proceeds for the partial settlement of the Decatur east claim related to an incident in 2023. Animal nutrition subsegment operating profit of $59 million was higher than the prior year due to higher margins supported by cost optimization actions to improve mix and an increase in volumes.
Please turn to Slide 10. In 2024, the company generated cash flow from operations before working capital of approximately $3.3 billion, down 30% relative to the prior year due to lower total segment operating profit. Despite the decline, solid cash generation supported our ability to invest in our business and return excess cash to shareholders. In 2024, the company returned $3.3 billion in the form of dividend and share repurchases, allocated $1.6 billion to capital expenditures to support the reliability of our assets and cost efficiencies, and approximately 1 billion to MA. Announced in 2023 and completed in January 2024. Our strong capital structure remains a critical differentiator for the Company.
We will continue to seek opportunities to further strengthen our balance sheet to provide US Financial flexibility to organically invest in the business to enhance returns and create long term value. As Juan mentioned, targeted portfolio simplification actions including consolidation and divestitures will help align our focus on value creation. At the same time, we remain committed to returning cash to shareholders and we look to offset dilution and opportunistically seek share repurchases. We recently announced an increase in our quarterly dividend as well as an extension of our share repurchase program which is up to an additional 100 million shares over the next five year period.
Please turn to slide 11. We have already touched on some of the external market dynamics that we navigated in December and several of these dynamics are expected to persist and create pressure on our first half results for 2025, particularly for our ASNO segment. These include market headwinds related to U.S. biofuel policy uncertainty that have negatively impacted U.S. vegetable oil demand and biodiesel margins, higher global soybean stock levels and an increase in Argentinian crush rates which have pressured global soybean meal values and trade policy uncertainty with Canada and China which has driven volatility for canola crush margins. Taken together, these factors are driving significantly lower meal and vegetable oil values which is reflected by replacement crush margins in North America near $40 per metric ton for soybean and $50 per metric ton for canola. In both cases, these are well below the levels that we experienced in the first half of last year.
As we look to the second half of 2025, we see signs that make us optimistic about margin improvement over the course of the year. One clear indication is boat crush value signaling a carry in the market in the second half. Additionally, as we progress through the year, we expect policy uncertainty to clear and and strong fundamentals to support better crush and biodiesel margins. In particular, we expect clarity on 45Z guidance to support strong US demand for crop based vegetable oil. We also expect expansion of global biofuels policy to support global vegetable oil demand. Key examples include Brazil with increases in biodiesel mandates and the newly implemented SAF mandates in Europe.
Lastly, we expect improvement in the livestock sector to support robust meal demand overall. With the market set up into 2025, we are focused on operational improvements and accelerating cost savings to partially mitigate the less favorable market conditions and be in an excellent position to capture opportunities in the second half.
Turning to Slide 12, we have provided details that support our 2025 outlook for each segment for the first quarter and the full year starting with ag services and oil sales. In the first quarter, we expect segment operating profit to be down approximately 50% relative to the prior year period, led by declines in crushing and rpo. On crushing, we anticipate both soybean and canola execution crush margins to be significantly lower than the prior year period. In rpo, lower biodiesel margins are expected to drive significantly lower operating profit for the subsegment in the first quarter compared to the prior year period.
For the full year, we expect AS and O segment operating profit to be below to similar with 2024. Operational improvement should support higher volumes and lower manufacturing costs which will partially offset the impact of lower margins for the segment. For the full year, we expect soybean crush execution margins to range from 45 to $55 per tonne, down approximately $5 per ton at the midpoint versus the prior year. We expect canola crush execution margins to range from $50 to $70 per ton, down approximately $20 per ton at the midpoint compared to the prior year.
For rpo, we expect operating profit to be down significantly compared to the prior year. We expect insurance recoveries related to the Decatur Ease claim of $25 million compared to the total recoveries of $76 million in 2024 in carbohydrate solutions. For the first quarter, we expect segment operating profit to be lower by approximately 5% to 15% compared to the prior year period. Strong margins and volumes in North American starches and sweeteners are likely to be offset by lower results in the EMEA region as higher corn costs and increased competition negatively impact margins in ethanol. Robust export demand is likely to support strong volumes.
However, higher industry run rates are expected to result in breakeven ethanol EBITDA margins. For the full year, we expect lower carbohydrate solutions segment operating profit relative to the prior year period as strong volumes and margins in North America expected to be more than offset by margin moderation in E EMEA and ethanol. For the year, we anticipate ethanol EBITDA margins to be in the range of 5 to 10 cents down approximately 10 cents at the midpoint compared to the prior year, we expect insurance recovery of approximately $10 million compared to the insurance recovery of $84 million in 2024.
In Nutrition, we expect first quarter operating profit to be down 50% compared to the prior year period. We expect to face higher raw material costs and negative impacts associated with continued downtime at Decatur east. We also expect lower demand for plant based proteins, higher insurance costs and increased competition and texture to drive lower margins in the segment, notably excluding the effects of $46 million of insurance proceed we received in the fourth quarter of 2024.
We expect nutrition operating profit to be approximately flat sequentially in the first quarter. For the full year, we anticipate nutrition operating profit to be higher compared to the prior year with low to mid single digit revenue growth led by our Flavors business. Strong performance from recent acquisitions and improved supply chain execution is extremely expected to support increased volumes and an improvement in cost in human nutrition helping to offset the headwinds associated with the ramp up of operations at Decatur East.
In animal nutrition, we anticipate continued mixed benefits from cost optimization actions as well as an improvement profitability of our pet business. We expect insurance recovery of approximately $25 million compared to insurance recovery of $71 million in 2024. Now looking at the consolidated outlook on slide 13, earlier today we announced that we expect adjusted earnings per share to be between $4 to $4.75
Per share. In considering this range, it is important to keep in mind the following we expect lower margins in ASNO and CARB SALT to create a material headwind. Our focus on improved execution and cost should produce 200 million to 300 million of cost out, which includes the benefit of lower manufacturing and SGA costs. We expect to reverse the negative take or pay impact in ag services from last year. We also anticipate less insurance proceeds in 2025. We currently expect approximately $60 million in 2025 with approximately 60% coming from reinsurance.
This is compared to total insurance recoveries of $231 million in 2024 with approximately $133 million coming from reinsurance in 2024. Looking at our other guidance metrics, we anticipate corporate costs to be within the range of $1.7 billion to $1.8 billion. We expect the benefit of cost actions and a decline in net interest expense in corporate to be more than offset by the elevated legal cost and the reversal of performance based reductions in incentive compensation relative to 2024. In other we expect lower results in ADMIs compared to the prior year and due to lower interest rates we expect capital expenditures to be in the range of 1.5 to $1.7 billion and we expect DNA to be approximately $1.2 billion.
We expect our effective tax rate to be higher in 2025 in the range of 21 to 23% due to the sunset of the biodiesel tax credit, a shift in geographic mix of earnings and an expansion in the global minimum tax. Lastly, we expect diluted weighted average shares outstanding to be approximately 483 million shares and our leverage ratio to be approximately 2 for the full year. To conclude, I want to take a moment to thank our ADM colleagues for their focus, adaptability and contributions through the close of 2024.
These organizational efforts have been critical in driving progress and meeting challenges head on. As we navigate 2025, our focus will remain on what is within our control, a full commitment to remediating the material weakness and making strides to strengthen our internal controls, driving execution to improve operational performance and lower cost while sustaining functional excellence, unlocking additional capital to drive value and position the company for long term success. These efforts position us in our ability to navigate the current dynamic environment and reinforce our confidence in delivering on our commitments.
Before I turn it back to Juan, I wanted to briefly mention a leadership transition we announced last week and that officially will take effect on March 1st. Kerry Nicol is joining us as our new Vice President and Chief Accounting Officer. She joins us from Cargill where she served as Senior Vice President, Chief Accounting Officer and Global Process Leader. I am excited to make this important addition to our leadership team and I look Forward to working with her. Back to you Juan.
