Q4 2016 Real-Time Call Brief

Highlights

We generated $1.5 billion of funds from operations and kept our agri food return 1.6% above cost of capital.

We grew our dividend again by 11%, purchased $200 million of common shares or a total of $457 million returned to shareholders.

CapEx for the year $784 million, and we're tracking $275 million below our 2014 to ‘17 CapEx target for our Agri food operations.

In 2014, we committed to a $345 million improvement program through ‘17 of which we have achieved $255 million to-date.

Our target in 2016 was $125 million which we exceeded by $10 million and we have an additional of $100 million planned for this year.

Reported fourth quarter earnings per share from continuing operations were $1.83, compared to a $1.31 in the fourth quarter of 2015.

Adjusted EPS were $1.70 in the fourth quarter, versus a $1.49 in the prior year.

Total segment EBIT in the quarter was $403 million, versus $294 million in the prior year.

On an adjusted basis, EBIT increased to $362 million from $337 million in 2015.

2016 was adjusted down by $41 million primarily as a result of gains on dispositions partially offset by impairments.

2015 was adjusted top by $43 million primarily due to impairments.

Agribusiness had a reasonable performance even though adjusted EBIT increased by $31 million to $237 million in the fourth quarter 2016, compared to $268 million in the prior comparable quarter.

The $31 million decrease resulted from a $51 million decrease in oilseeds, partially offset by $20 million increase in grains.

The $20 million increase in grains was primarily the result of significantly higher volumes and margins in North America, resulting from record crops.

Food and Ingredients adjusted EBIT increased by $24 million to $70 million in the fourth quarter of 2016, compared to $46 million in the prior comparable quarter.

The $24 million increase was attributable to a $15 million increase in the edible oils and a $9 million increase in milling.

Sugar and Bioenergy quarterly adjusted EBIT was $30 million compared to $10 million in the prior period, a $20 million increase.

Fertilizer adjusted EBIT increased to $25 million in the fourth quarter of 2016, from $13 million in the fourth quarter of 2015.

The segment also benefited from an $11 million accrual reversal of natural gas tiers payable.

The full year tax expense was $220 million resulting in a 22% reported tax rate.

Excluding notable items the full year tax rate was 24%.

Full year interest expense was $234 million, which benefited from a $10 million reversal of interest accrued on the Argentine gas tariff in the fourth quarter and a $16 million credit for interest avoided in a Brazilian tax amnesty settlement also in the fourth quarter which was reflected as a notable item.

We generated $1.5 billion of funds from operations in 2016.

The increase of $100 million over 2015 reflects lower interest and taxes in 2016, partially offset by lower adjusted EBIT as compared to 2015.

We are rated BBB by all three rating agencies and have $5 billion of available committed credit at year end.

We invested $784 million in CapEx in 2016.

CapEx also included a $131 million related to the sugar business, the majority of which was for planting sugarcane.

We generated $142 million in net proceeds from our portfolio activities through the combination of the divestiture of our interest.

We returned $457 million to shareholders through dividends and share repurchases.

The balance of the $1.5 billion of funds from operations generated in 2016 will be applied to closing of the previously announced European soy crush planned acquisitions and repayment of $250 million of maturing senior notes.

In the fourth quarter, we completed the last in a series of three successful note offerings during the year totaling just over $1.5 billion.

Our trailing 4 year average return on invested capital was 7.4% overall, and 8.6% for our core Agri and foods businesses, 1.6 percentage points of our cost of capital.

Our goal is to earn 2 percentage points above our cost of capital on Agri and food businesses.

This environment would imply to returns to the historical annual EBIT levels which range between $895 million and $1.050 billion in the 2012 to 2015 period.

Farmer selling continues to significantly lag average rates but we expect to see an increase in activity as the harvest progresses in Brazil.

These dynamics would dictate first quarter EBIT in the range of $150 million to $200 million.

We would expect the food and ingredients business to continue its upward momentum and generate EBIT in the range of $270 million to $290 million for the year.

For the first quarter, we expect EBIT to be approximately 20% higher than the first quarter of 2016 once last year's results are reduced by a $12 million mark-to-market benefit, recorded in that period.

We expect the environment for sugar and Brazilian ethanol to remain positive and combined with our efficiency investments made in recent years to result in EBIT in a range of $100 million to $120 million in 2017.

We expect fertilizer EBIT to be approximately $30 million for the year.

We expect our 2017 tax rate to be between 24% and 27%, net interest expense in the range of $200 million to $225 million, DD&A to be approximately $550 million and CapEx to be in the range of $750 million to $800 million.