UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Part I.

The Andersons, Inc. (the "Company") is a diversified company rooted in agriculture. Founded in Maumee, Ohio in 1947, the Company is a significant player in the North American agricultural supply chain and conducts its business in the trade, renewables, and plant nutrient & industrial sectors.

The Company's operations are classified into three reportable business segments: Trade, Renewables, and Plant Nutrient.Nutrient & Industrial. Each of these segments is organized based upon the nature of products and services offered and aligns with the management structure. See Note 12 to the Consolidated Financial Statements in Item 8 for information regarding business segments.

The Trade Groupsegment is a diversified business focusing on logisticscapturing profits through merchandising and merchandisingmanaging logistics across a wide range of commodities. The groupsegment specializes in the movement of physical commodities such as: whole grains, grain products, feed ingredients and domestic fuel products andamong other agricultural commodities. The businessCompany has a broad geographic footprint with a diversified portfolio of physical commodities, although the principal commodities sold by the Company are corn, wheat and soybeans. Exported commodity sales are made both through intermediaries and direct shipments to foreign countries.

Trade also operates grain elevators across the U.S.United States and Canada where income is earned on commodities bought and sold through the elevator, commodities that are purchased and conditioned for resale, and commodities that are held in inventory until a future period, earning space income. Space income consistsan elevation margin. Elevation margins consist of appreciation or depreciation in the basis value of commodities held, andwhich represents the difference between the cash price of a commodity in one of the Company's facilities and an exchange traded futures price (“basis”); appreciation or depreciation between the futuredifferent futures exchange contract months (“spread”); and commodities stored for others upon which storage fees are earned. The Trade Groupsegment's asset-based grain handling business is seasonal in nature in that the largest portion of the principal grains are harvested and delivered from the farm and commercial elevators typically in July for wheat and September through November for corn and soybeans; however, depending on market conditions a significant portion of the principal grains may also be bought, sold and handled throughout the year.

Fixed price purchase and sale commitments as well as commodities held in inventory, expose the Company to risks related to adverse changes in market prices. Grain prices are typically comprised of two components, futures prices on regulated commodity exchanges and local basis adjustments. The Company manages the futures price risk by entering into exchange-traded futures and option contracts with regulated commodity exchanges. These regulated commodity exchanges maintain futures markets for the grains merchandised by the Company. Futures prices are determined by worldwide supply and demand. The business also offers a number of unique grain marketing, risk management and origination services to its customers and affiliated ethanol facilities for which it collects fees.

The Renewables Group (formerly the Ethanol Group)segment produces, purchases and sells ethanol and co-products, offers facility operations, and provides risk management and ethanol and co-products marketing services to the ethanol plants it invests in and operates.operates in. The group was rebranded in 2021 to reflect the strategic shift and focus on serving the broader renewables market, including renewable diesel and our ethanol plants. The group co-owns five ethanol plants located in Indiana, Iowa, Kansas, Michigan and Ohio. The groupsegment demonstrates an expertise in ethanol plant management, logistics and commercialization of ethanol and feed productsco-products with a focus on leading the industry in margins per bushel. The business also leverages partnerships, which are discussed in further detail below, to expand market knowledge and shared technology across its five plants. The groupsegment also operates a merchandising and trade portfolio of ethanol, ethanol co-products and other biofuels, such as renewable diesel.feedstocks.

The Nutrient & Industrial segment (formerly the Plant Nutrient GroupSegment) is a leading manufacturer, distributor and retailer of agricultural and related plant nutrients, liquid industrial products, corncob-based products, and pelleted lime and gypsum products, in the U.S. Corn Belt and Puerto Rico. The group provides warehousing, packagingvarious turf fertilizer, pesticide and manufacturing services to basic nutrient producers and other distributors. The group also manufactures and distributes a variety of industrial products throughout the U.S. and Puerto Rico including nitrogen reagents for air pollution control systems used in coal-fired power plants, and water treatment and dust abatementherbicide products.

In its plant nutrientNutrient & Industrial business, the Company competes with regional and local cooperatives, wholesalers and retailers, predominantly publicly owned manufacturers and privately-owned retailers, wholesalers and importers. Some of these competitors are also suppliers. Competition in the nutrient business is based largely on depth of product offering, price, location and service. Sales and warehouse shipments of agricultural nutrients and turf related products are heaviest in the spring and fall.

As of January 1, 2020, the group reorganizedThe segment is organized into the three divisions listed below:

The Company, like other companies engaged in similar businesses, is subject to a multitude of federal, state, foreign and local environmental protection laws and regulations including, but not limited to, laws and regulations relating to air quality, water quality, pesticides and hazardous materials. The provisions of these various regulations could require modifications of certain of the Company's existing facilities and could restrict the expansion of future facilities or significantly increase the cost of their operations. Compliance with environmental laws and regulations did not materially affect the Company's earnings or competitive position in 2021.2023. In each of the countries in which we operate, we are subject to a variety of laws and regulations governing various aspects of our business, including general business regulations as well as those governing the manufacturing, handling, storage, transport, marketing and sale of our products. These include laws and regulations relating to facility licensing and permitting, food and feed safety, the handling and production of regulated substances, nutritional and labeling requirements, global trade compliance and other matters.

The Company's operations are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this Form 10-K and could have a material adverse impact on ourthe financial results.results of the Company. The risks described below are not the only risks facing us.the Company. Additional risks and uncertainties not currently known to us or those we currently viewviewed to be immaterial may also materially and adversely affect our business, financial condition or results of operations. These risks can be impacted by factors beyond ourmanagement's control. The following risk factors should be read carefully in connection with evaluating our businessthe Company and the forward-looking statements contained elsewhere in this Form 10-K.

Our Trade, Renewables and Plant Nutrient & Industrial businesses buy, sell and hold inventories of agricultural input and output commodities, some of which are readily traded on commodity futures exchanges. Unfavorable weather conditions, both local and worldwide, as well as other factors beyond our control, can affect the supply and demand of these commodities and expose us to liquidity pressures to finance hedges in the commodity business in rapidly rising markets. In our Plant Nutrient & Industrial business, changes in the supply and demand of these commodities can also affect the value of inventories that we hold, as well as the price of raw materials as we are unable to effectively hedge these commodities. Increased costs of inventory and prices of raw material would decrease our profit margins and adversely affect our results of operations.

Our futures, options and over-the-counter contracts are subject to margin calls. If there are large movements in the commodities market, we could be required to post significant levels of margin deposits, which would impact our liquidity. There is no assurance that the efforts we have taken to mitigate the impact of the volatility of the prices of commodities upon which we rely will be successful and any sudden change in the price of these commodities could have an adverse effect on our business and results of operations.

Many of our business segments are subject to government regulation and regulation by certain private sector associations, compliance with which can impose significant costs on our business. Other regulations are applicable generally to all our businesses and corporate functions, including, without limitation, those promulgated under the Internal Revenue Code, the Affordable Care Act, the Employee Retirement Income Security Act and other employment and health care related laws, federal and state securities laws, and the USU.S. Patriot Act. Failure to comply with such regulations can result in additional costs, fines or criminal action.

A significant part of our operations is regulated by environmental laws and regulations, including those governing the labeling, use, storage, discharge and disposal of hazardous materials. Because we use and handle hazardous substances in our businesses, changes in environmental requirements or an unanticipated significant adverse environmental event could have an adverse effect on our business. We cannot assure that we have been, or will at all times be, in compliance with all environmental requirements, or that we will not incur costs or liabilities in connection with these requirements. Private parties, including current and former employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us, or contained in our products. We are also exposed to residual risk because some of the facilities and land which we have acquired may have environmental liabilities arising from their prior use. In addition, changes to environmental regulations may require us to modify our existing plant and processing facilities which could significantly increase the cost of those operations.

We are exposed to the risk of a decrease in the value of our inventories due to a variety of circumstances in all of our businesses. For example, within our Trade and Renewables businesses, there is the risk that the quality of our inventory could deteriorate due to damage, moisture, insects, disease or foreign material. If the quality of our inventory were to deteriorate below an acceptable level, the value of our inventory could decrease significantly. In our Plant Nutrient & Industrial business, planted acreage, and consequently the volume of fertilizer and crop protection products applied, is partially dependent upon government programs and the producer's perception of demand. Technological advances in agriculture, such as genetically engineered seeds that resist disease and insects, or that meet certain nutritional requirements, could also affect the demand for our crop nutrients and crop protection products. Either of these factors could render some of our inventory obsolete or reduce its value.

If cash on hand is insufficient to pay our obligations or margin calls as they come due at a time when we are unable to draw on our credit facility, it could have an adverse effect on our ability to conduct our business. Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future. Our ability to generate cash is dependent on various factors. These factors include general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Certain of our long-term borrowings include provisions that require minimum levels of working capital and equity and impose limitations on additional debt. Our ability to satisfy these provisions can be affected by events beyond our control, such as the demand for and the fluctuating price of commodities. Noncompliance with these provisions could result in default and acceleration of long-term debt payments.

The markets for our products in each of our business segments are highly competitive. While we have substantial operations in certain of the regions where we operate, some of our competitors are significantly larger, compete in wider markets, have greater purchasing power, and have considerably larger financial resources. We also may enter into new markets where our brand is not recognized and in which we do not have an established customer base. Competitive pressures in all of our businesses could affect the price of, and customer demand for, our products, thereby negatively impacting our profit margins and resulting in a loss of market share.

A significant amountnumber of purchases and sales within the Trade and Renewables segmentsegments are made through forward contracting, much of which includes a natural back-to-back hedging relationship..relationship. In addition, the Company uses exchange traded and, to a lesser degree, over-the-counter contracts to further reduce volatility in changing commodity prices. A significant adverse change in commodity prices could cause a counter-partycounterparty of one or more of our derivative contracts to not perform on its obligation.

Adverse weather conditions have historically caused volatility in the agricultural commodity industry and consequently in our operating results by causing crop failures or significantly reduced harvests, which may affect the supply and pricing of the agricultural commodities that we sell and use in our business, reduce demand for our fertilizer products and negatively affect the creditworthiness of agricultural producers who do business with us. A significant portion of the Company's assets are exposed to conditions in the Eastern Grain Belt. In this region, adverse weather during the fertilizer application, planting, and harvest seasons can have negative impacts on our Trade, Renewables and Plant Nutrient & Industrial businesses. Higher basis levels or adverse crop conditions in the Eastern Grain Belt can increase the input costs or lower the market value of our products relative to other market participants that do not have the same geographic concentration.

Additionally, the potential physical impacts of climate change are uncertain and may vary by region. These potential effects could include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, and changing temperature levels that could adversely impact our costs and business operations, the location, costs and competitiveness of agricultural commodity production and related storage and processing facilities and the supply and demand for agricultural commodities. These effects could be material to our results of operations, liquidity or capital resources.

We rely on a limited number of suppliers for certain of our raw materials and other products. If we were unable to obtain these raw materials and products from our current vendors, or if there were significant increases in our supplier's prices, it could significantly increase our costs and reduce our profit margins.

The level of demand for our products is affected by global and regional demographic and macroeconomic conditions, including population growth rates, and changes in standards of living.living and the occurrence of any health-related risks. A significant downturn in global economic growth, or recessionary conditions in major geographic regions, may lead to reduced demand for agricultural commodities and food products, which could adversely affect our business and results of operations. The occurrence of health-related risks including epidemics or global pandemics may adversely affect the economy. The extent to future epidemics or pandemics impact our business going forward will depend on the duration or scope of the outbreak and how governmental, businesses, and society respond, along with the economic impact including financial market volatility. The pace of economic improvement is uncertain especially given the current global pandemic caused by COVID-19 and there can be no assurance that economic and/or political conditions will not continue to affect market and consumer confidence or deteriorate further in the near term.

We continuously look for opportunities to enhance our existing businesses through strategic acquisitions. The process of integrating an acquired business into our existing business and operations may result in unforeseen operating difficulties and expenditures as well as require a significant amount of management resources. There is also the risk that our due diligence efforts may not uncover significant business flaws or hidden liabilities. In addition, we may not realize the anticipated benefits of an acquisition and they may not generate the anticipated financial results. Additional risks may include the inability to effectively integrate the operations, products, technologies and personnel of the acquired companies. The inability to maintain uniform standards, controls, procedures and policies would also negatively impact operations.

GAAP requires usThe Company is required to test for goodwill impairment at least annually. In addition, we review our tangible and intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, or amortizable intangible assets and long-lived assets may not be recoverable include prolonged declines in stock price, market capitalization or cash flows, and slower growth rates in our industry. Depending on the results of our review, we could be required to record a significant charge to earnings in our Consolidated Financial Statements during the period in which any impairment of our goodwill or amortizable intangible assets wereis determined, negatively impacting our results of operations.

There is an increased focus on environmental, social and corporate governance regulations for the industry. As a Company, we assess the potential impacts of our business on environmental risks including climate change, carbon emissions, physical and transition risks, along with other environmental issues. The Company, through our Enterprise Risk Management ("ERM") program and other efforts, is actively focused on strategic goals to expand responsible practices to reduce environmental risks while ensuring compliance with evolving laws and regulations. For example, through working with third parties such as Supplier Leadership on Climate Transition, we have reported Scope 1 and 2 greenhouse gases emissions in our annual Sustainability Report, and we are working with third parties to develop Scope 3 data. We have been participating with customers in pilot sustainable sourcing projects as well as looking to participate in Field to Market which provides farming operation analytics to customers to create greater visibility into supply chain and sustainability efforts. If we are unable to properly assess these risks and meet our ESG reporting goals and metrics for Scope 1, 2 and 3 greenhouse gas emissions, or if our efforts are considered to be inadequate, then stakeholders, the industry, and investors might perceive that we are not responding appropriately and responsibly to the growing concern. As a result, investors may reconsider their capital investments and our reputation could be diminished leading to customers and suppliers choosing to refrain from engaging in business with us.

Our security measures may also be breached due to employee error, malfeasance, or otherwise. In addition, although the systems continue to be refreshed periodically, portions of the infrastructure are outdated and may not be adequate to support new business processes, accounting for new transactions, or implementation of new accounting standards if requirements are complex or materially different than what is currently in place.

We continue to assess the impact of various U.S. federal, state, local and international legislative proposals that could result in a material increase to our U.S. federal, state, local and/or international taxes. We cannot predict what impact, if any, changes in federal policy, including tax policies, will have on our industry or whether any specific legislation will be enacted or the terms of any such legislation. However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing our cost of tax compliance or otherwise adversely affecting our financial position, results of operations, cash flows and liquidity. Changes in applicable U.S. or foreign tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our tax expense and profitability. Such impact may also be affected positively or negatively by subsequent potential judicial interpretation or related regulation or legislation which cannot be predicted with certainty.

In the ordinary course of business, we are subject to various legal and regulatory proceedings, which may include but are not limited to those involving antitrust, tax, environmental, intellectual property, data privacy and other matters, including general commercial litigation. Any claims raised in legal and regulatory proceedings, whether with or without merit, could be time consuming and expensive to defend and could divert management’s attention and resources. Additionally, the outcome of legal and regulatory proceedings may differ from our expectations because the outcomes of these proceedings are often difficult to predict reliably.reliably predict. Various factors and developments can lead to changes in our estimates of liabilities and related insurance receivables, where applicable, or may require us to make additional estimates, including new or modified estimates that may be appropriate due to a judicial ruling or judgment, a settlement, regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in charges that could have a material adverse effect on our results of operations in any particular period.

In accordance with customary practice, we maintain insurance against some, but not all, of these potential claims. In the future, we may not be able to maintain insurance at commercially acceptable premium levels. In addition, the levels of insurance we maintain may not be adequate to fully cover any and all losses or liabilities. If any significant judgment or claim is not fully insured or indemnified against, it could have a material adverse impact on our business, financial condition and results of operations.

The Company has no unresolved staff comments.

The Company's principal agriculture and other properties are described below. The Company believes that its properties are adequate for its business, well maintained and utilized, suitable for their intended uses and adequately insured.

The PlantRenewables properties are four ethanol plants owned under the TAMH investment that is consolidated in the Company's Consolidated Financial Statements.

The Nutrient & Industrial properties consist mainly of fertilizer warehouse and formulation and packaging facilities for dry and liquid fertilizers. The Company owns substantially all of the facilities noted above.

The Company is currently subject to various claims and suits arising in the ordinary course of business, which include environmental issues, employment claims, contractual disputes, and defensive counterclaims. The Company accrues liabilities in which litigation losses are deemed probable and estimable. The Company believes it is unlikely that the results of its current legal proceedings, even if unfavorable, will result in material liabilities beyond what it currently has accrued. There can be no assurance, however, that any claims or suits arising in the future, whether taken individually or in the aggregate, will not have a material adverse effect on our financial condition or results of operations.

Part II.

The Common Shares of The Andersons, Inc. trade on the Nasdaq Global Select Market under the symbol “ANDE”.

At February 11, 2022,9, 2024, there were 952434 shareholders of record and approximately 19,06829,227 shareholders for whom security firms acted as nominees.

The Company has declared and paid consecutive quarterly dividends since its first year of trading in 1996. Dividends paid from January 20202022 to January 20222024 are as follows:

While the Company's objective is to pay a quarterly cash dividend, dividends are subject to approval from the Board of Director approval.Directors.

The graph below compares the total shareholder return on the Company's Common Shares to the cumulative total return for the Nasdaq U.S.Russell 3000 Index and a Peer Group Index. The indices reflect the year-end market value of an investment in the stock of each company in the index, including additional shares assumed to have been acquired with cash dividends, if any. The Peer Group Index, weighted for market capitalization, includes the following companies:

The graph assumes a $100 investment in The Andersons, Inc. Common Shares on December 31, 20162018, and also assumes investments of $100 in each of the Nasdaq U.S.Russell 3000 Index and Peer Group indices,Index, respectively, on December 31 of the first year of the graph. The value of these investments as of the following calendar year-ends is shown in the table below the graph.

The following “Management's Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements which relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Without limitation, these risks include economic, weather and regulatory conditions, competition, the COVID-19 pandemicgeopolitical risk, and those listed under Item 1.A, "Risk Factors." The reader is urged to carefully consider these risks and factors. In some cases, the reader can identify forward-looking statements by terminology such as “may”, “anticipates”, “believes”, “estimates”, “predicts”, or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These forward-looking statements relate only to events as of the date on which the statements are made and the Company undertakes no obligation, other than any imposed by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Executive Overview

Our operations are organized, managed and classified into three reportable business segments: Trade, Renewables, and Plant Nutrient.Nutrient & Industrial. Each of these segments is generally based on the nature of products and services offered and aligns with the management structure.

The agricultural commodity-based business is one in which changes in selling prices generally move in relationship to changes in purchase prices. Therefore, increases or decreases in prices of the commodities that the business deals in will have a relatively equal impact on sales and merchandising revenues and cost of sales and merchandising revenues and a much less significant impact on gross profit. As a result, changes in sales and merchandising revenues between periods may not necessarily be indicative of the overall performance of the business and more focusgreater emphasis should be placed on changes in gross profit.

The global emergenceTrade segment's operating results were consistent with the prior year as the segment continued to capitalize on strong agriculture fundamentals. The asset-based business benefited from strong elevation margins and good space income on a large and wet harvest combined with better wheat income opportunities during the year. Merchandising fundamentals were also solid during 2023, especially with a market inverse through the first part of COVID-19 continuesthe year, but were negatively impacted from fewer merchandising opportunities in the Middle East and North Africa including losses related to have a significant impact on the global economy. Government-mandated stay-at-home orderscurrency liquidity issues in Egypt. The premium ingredients business also delivered positive results from acquisitions and other public health mandates and recommendations, as well as behavioral changes in response to the pandemic, have created labor shortages as labor force participation has remained below pre-pandemic levels. Additionally, supply constraints, low inventory levels and inflationary pressures from the pandemic have affected the industries in which the Company operates. The Company is continuing to actively manage its response to the COVID-19 pandemic, however, the future impacts of the ongoing pandemic on the Company’s business remain uncertain at this time.recently deployed capital.

The Company is a critical infrastructure industry as defined by The United States DepartmentAgricultural inventories on hand were 127.6 million and 129.7 million bushels at December 31, 2023, and December 31, 2022, respectively. These bushels consist of Homeland Security, Cybersecurity and Infrastructure Agency. As COVID-19 continues to spread and certain regions experience accelerated spreadinventory held at company-owned or resurgences, the Company is currently conducting business as usual to the greatest extent possible in the current circumstances. The Company is taking a variety of measures to ensure the availability of its services throughout our network, promote the safety and security of our employees, and support the communities in which we operate. Certain modifications the Company has made in response to the COVID-19 pandemic include: implementing working at home protocols for all non-essential support staff; restricting employee business travel; strengthening clean workplace practices; reinforcing socially responsible sick leave recommendations; limiting visitorleased facilities, transload inventory, in-transit inventory, and third-party accessheld inventory. Total Trade storage space capacity at company owned or leased facilities, including temporary pile storage, was approximately 168 million bushels at December 31, 2023, and 184 million bushels at December 31, 2022.

Looking forward, agriculture fundamentals are shifting due to Company facilities; launching internal COVID-19 resources for employees; creatingincreased global supply. The Company's mix of assets and merchandising businesses provide a pandemic response team comprised of employeessolid foundation to benefit from large crops and members of senior management; encouraging telephonic and video conference-based meetings along with other hygiene and social distancing practices recommended by health authorities including Health Canada, the U.S. Centers for Disease Control and Prevention, and the World Health Organization; and maintaining employment benefit coverage of employees through the pandemic. The Company is respondingcarry markets. With lower commodity prices, domestic producers are hesitant to this crisis through measures designed to protect our workforce and prevent disruptions toforward sell, but the Company's operations withinassets are well-positioned for the North American agricultural supply chain.grains to flow in due course. With continuing global unrest, volatility exists in key international shipping lanes which could provide ongoing merchandising opportunities.

Tons of product sold for the years ended December 31, 2021 and December 31, 2020 were as follows:

In the table above, Ag Supply Chain represents facilities principally engaged in the wholesale distribution and retail sale and application of primary agricultural nutrients such as bulk nitrogen, phosphorus, and potassium. Specialty Liquid locations produce and sell a variety of low-salt liquid starter fertilizers, micronutrients for agricultural use, and specialty products for use in various industrial processes. Engineered Granules facilities primarily manufacture granulated dry products for use in specialty turf and agricultural applications. Prior year volumes have been reclassified for the twelve months ended December 31, 2022, to conform with current year presentation as the product mix in certain facilities has evolved.

The Company's “Other” activities include corporate income and expense and cost for functions that provide support and services to the operating segments. The results include expenses and benefits not allocated to the operating segments and other elimination and consolidation adjustments.

For comparisons of the Company's consolidated and segment results of operations and consolidated cash flows for the fiscal years ended December 31, 20202022, to December 31, 2019,2021, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K for the fiscal year ended December 31, 2020,2022, filed with the SEC on February 25, 2021.23, 2023.

Operating Results

The following discussion focuses on the operating results as shown in the Consolidated Statements of Operations with a separate discussion by segment. Additional segment information is included in Note 12 to the Company's Consolidated Financial Statements in Item 8.

The Company uses Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations, a non-GAAP financial measure as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures.

Management believes that Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations is a useful measure of the Company’s performance becauseas it provides investors additional information about the Company's operations allowing better evaluation of underlying business performance and better period-to-period comparability. This measure is not intended to replace or be an alternative to Income (loss) before income taxes from continuing operations, the most directly comparable amount reported under GAAP.

Operating results for the Trade Group improved significantly as Income before taxes increased $63.3 million compared tosegment were consistent with the prior year reported results. Sales and merchandising revenues increased $3,163.0decreased $2,621.5 million and Costcost of sales and merchandising revenues increaseddecreased by $3,105.5$2,623.7 million resulting in an increase in gross profit of $57.5$2.2 million. MostThe vast majority of the increase to Salesdecrease in sales and merchandising revenues and Costcost of sales and merchandising revenues is attributable to sharp commodity price decreases from the result of increasedprior year as the war in Ukraine created uncertainty around global supply which temporarily drove commodity prices as the Group benefited from the demand-driven agricultural rally.higher in 2022. The net$2.2 million increase in gross profit was drivendue to increased asset based business results that were almost entirely offset by improveda decrease in the merchandising business results as geographic dislocations created volatility that allowed traders to identify arbitrage opportunities. Additionally, our traditionalpremium ingredients was flat period over period. While the asset locations were significantly better thanbased business had strong results in both periods, the $35.2 million gross profit increase from the prior year dueincludes an additional $24.3 million in insured inventory recoveries and $16.0 million in insured inventory write offs in the prior period that did not recur. Offsetting this increase was lower gross profit from the merchandising businesses of $35.6 million. The vast majority of this decrease was attributable to strong elevation marginsthe international merchandising business in our draw areas.the Middle East and North Africa including losses related to the currency liquidity issues in Egypt.

Operating, administrative and general expenses increased $7.5$34.9 million compared to prior year results. Labor and benefits expenses were higherThe increase from the prior year is primarily duerelated to higher incentive compensation costsan additional $14.5 million from improved operating results. Despite the expense increase, the Company continues to benefit from cost saving initiatives, muchacquisitions, of which approximately half of this increase is headcount reduction, bothrelated to earn-out provisions recorded as additional compensation expense. The remainder of the increase from acquisition integrationprior year is related to $4.3 million in insurable clean-up costs related to a fire at a Michigan grain asset, $5.5 million of increased insurance premiums and $6.4 million in response to the COVID-19 pandemic.additional bad debt expense.

The Trade GroupAsset impairment decreased by $9.0 million from the prior year as the Company recorded asset impairment charges of $8.3 million in 2021. The current year asset impairment charges include a $7.7 million impairment of the Company's Frac Sand business following a fundamental shift in the operating environmenton property, plant and a $0.6 million chargeequipment related to a small food gradeNebraska grain asset location in Texas that was shuttered. No such impairments occurred in the prior year.period.

Interest expense increased $1.7decreased $7.3 million due to higher groupreduced short-term borrowings on the Company's short-term line of credit comparedfrom lower commodity prices in addition to the prior year despite lower interest rates and decreased long-term borrowings.

Other income increased by $19.1$17.3 million from prior year largely driven by a gain on the sale of a grain asset location in the current year.year and was primarily attributable to $4.4 million of additional interest income from additional cash on hand, $4.8 million of favorable foreign currency movements from the prior year, a $4.5 million impairment of an equity method investment in the prior year, and an additional $1.2 million of insurance proceeds from damage to the Company's assets.

The Renewables groupsegment had a stronganother robust year operationally as Incomeincome before income taxes attributable toonly fell $17.0 million short of the Company increased $74.7prior year, despite an $87.2 million fromimpairment in the priorcurrent year. Sales and merchandising revenues increased $1,180.5$202.1 million and Costcost of sales and merchandising revenues increased $1,045.6$126.7 million compared to the prior year. As a result, gross profit increased by $134.9$75.4 million. Most of theThe increase to Sales and merchandising revenues and Cost ofin both sales and merchandising revenues is the result of increased commodity prices. The net increase to gross profit in the current period results reflect significantly improved crush margins, higher co-product sales from traditional and high-protein feed products and corn oil and strong merchandising revenues. The prior year results were significantly impacted by COVID-19, resulting in a lack of demand and included an $11.7 million inventory write down.

Asset impairment charges increased by $87.2 million from the prior year. Gross profit improved year over year dueas the Company recorded an impairment charge related to increasesELEMENT in volumesthe first quarter of 2023, as the plant faced operational and margins acrossmarket-based challenges which were exacerbated by a shift in the breadth of product linesCalifornia Low Carbon Fuel Standard credit markets and reflects higher demand, strong grower income and well-positioned inventory.high western corn basis.

Other income decreased by $5.7 million from prior year due to $15.4 million more proceeds received in the prior year as a part of the USDA Biofuel Producer Program that was enacted as a part of the CARES Act. This was partially offset by a $6.5 million gain on the deconsolidation of the ELEMENT joint venture and $4.5 million of additional interest income received in 2023.

Operating, administrative and general expenses increased $22.1decreased $2.7 million from the same period lastprior year from approximately $3.9 million in reduced incentive compensation expense.

Results improved by $5.1 million from the prior year. The increase in operating lossesThis improvement from the prior year was primarily driven by increased variable incentive-based compensation in Operating, administrative and general expenses due to improved company-wide performance year over year, as well as approximately $5.0a $4.8 million revaluation gain of stranded costs from the sale of our Rail Leasing business. The prior year results also include severance related expenses of $6.1 million associated with the departure of certain executive officers and key employees.a cost method investment.

In 2021,2023, the Company recorded Income tax expense from continuing operations of $29.2$37.0 million. The Company's effective rate for 20212023 was 18.2%21.8% on Income before income before taxes from continuing operations of $160.8$169.6 million. The difference between the 18.2%21.8% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to state and local income taxes and changes in unrecognized tax benefits offset by the effect of non-controlling interest and foreign tax credits.

In 2022, the Company recorded Income tax expense from continuing operations of $39.6 million. The Company’s effective rate for 2022 was 20.4% on Income before income taxes from continuing operations of $194.6 million. The difference between the 20.4% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax benefit generated from Federal Researchfederal research and Development Credits ("R&D Credits"),development credits, foreign tax credits and the effect of non-controlling interest offset by state and local income taxes, nondeductible compensation, and changes in unrecognized tax benefits.

In 2020,The Company's subsidiary partnership returns are under federal tax examination by the Company recordedInternal Revenue Service ("IRS") for tax years 2015 through 2018. The Company’s subsidiary is under federal tax examination by the Mexican tax authorities for tax year 2015. The IRS and Mexican tax authorities’ examinations could potentially be resolved within the next 12 months. The resolution of these examinations could change our unrecognized tax benefits and favorably impact income tax benefit from continuing operationsexpense by a range of $10.9$2.9 million to $7.6 million. The Company’s

Operating Activities and Liquidity

Our operatingOperating activities usedprovided cash of $51.1$946.8 million in 20212023 compared to cash used in operations of $74.4$287.1 million in 2020.2022. The decreasevast majority of the increase in cash used was primarily due to increased operating results and offset by working capital accounts driven by higher commodity prices, as discussed above. However, when removing the impact from changes in working capital, cash provided by operating activities was much stronger than the prior period due to favorable changes in operating results.assets and liabilities as commodity prices dropped in the current year and the Company increased its focus on managing working capital balances in light of the rising interest rate environment. This coupled with strong cash generation from the Company's core businesses created significant growth in cash provided by operating activities that ultimately led to a significant amount of cash on hand as of December 31, 2023.

Net income taxes of $51.7$45.7 million and $2.4$88.7 million were paid in the years ended December 31, 20212023, and 2020,2022, respectively. The increasedecrease in the current year is driven by decreased Income before income taxes from continuing operations combined with the taxable gain associated with the sale of ourthe remaining pieces of the Company's Rail Leasing business which was partially offset by refunds primarily related to the CARES Act.segment in 2022.

Investing activities provided $487.2used cash of $153.9 million in the current year compared to $86.8$52.9 million used in the prior year. The significant increasechange from the prior year was a resultmainly driven by approximately $58.7 million of additional net proceeds received from the sale of thediscontinued Rail Leasing business as well as a grain asset location within the Trade segment. Additional contributing factors to the increase were higher proceeds from sales of assets and railcarsoperations received in the normal courseprior year combined with approximately $42.1 million of business, fewer purchased railcarsadditional purchases of property, plant and equipment in the continued strategic use of capital spending to enhance overall liquidity and cash management.current year.

Capital expenditures of $71.8$150.4 million for 20212023 on property, plant and equipment and capitalized software includes: Trade - $17.8$49.7 million; Renewables - $28.5$54.5 million; Plant Nutrient & Industrial - $21.6$42.5 million; and $3.8$3.6 million in Other.

Net cash used in financing activities was $248.8$264.0 million in 2021,2023, compared to $136.3$334.7 million providedused in 2020. This change2022. The decrease in cash used in financing activities from the prior year was largelymainly due to the Company'sissuance of a $100.0 million term note in 2023. The Company continued strategic effort to pay down long-term debt which was accelerated with proceeds frommake substantial distributions to the Rail Leasing sale.non-controlling interest shareholder of TAMH due to the strength of the entity's financial results in both 2023 and 2022. Lastly, the Company continued to repurchase common shares under its Repurchase Plan where $100 million of repurchases were authorized to be repurchased on or before August 20, 2024. As of December 31, 2023, approximately $14.5 million of the Repurchase Plan had been utilized.

As of December 31, 2021,2023, the Company was party to borrowing arrangements with a syndicate of banks that provide a total short and long-term borrowing capacity of $1,345.8$1,863.9 million. This amount includes $20.0 million for ELEMENT and $130.0 million for TAMH, all of which are non-recourse to the Company and classified as long-term. There was $1,019.9$1,817.5 million available for borrowing at December 31, 2021. Typically, our2023. While in the current year the Company's cash on hand exceeds total debt, typically, its highest borrowing occurs in the late winter and early spring due to seasonal inventory requirements in ourthe fertilizer and grain businesses, however, rising commodity prices during the fourth quarter required more borrowing than the prior year.businesses. At December 31, 2021, we2023, the Company had standby letterstotal available liquidity of credit outstanding$2,461.4 million comprised of $3.9 million.

The Company paid $23.7$25.4 million in dividends in 20212023 compared to $23.0$24.6 million in 2020.2022. The Company paid $0.175$0.185 per common share for the dividends paid in January, April, July and October 2021,2023, and $0.175$0.180 per common share for the dividends paid in January, April, July and October 2020.2022. On December 16, 2021,14, 2023, the Company declared a cash dividend of $0.180$0.190 per common share, payable on January 21, 202222, 2024, to shareholders of record on January 3, 2022.2, 2024.

Certain of our long-term borrowings include covenants that, among other things, impose minimum levels of equityworking capital and limitations on additional debt. We area minimum ratio of owner's equity. The Company is in compliance with all such covenants as of December 31, 2021.2023. In addition, certain of our long-term borrowings are collateralized by first mortgages on various facilities. Our non-recourse long-term debt is collateralized by ethanol plant assets.

Because we are a significant consumer of short-term debt in peak seasons and the majority of this is variable rate debt, increases in interest rates could have a significant impact on our profitability. In addition, periods of high commodity prices and/or unfavorable market conditions could require us to make additional margin deposits on ourthe Company's exchange traded futures contracts. Conversely, in periods of declining prices, wethe Company would receive a return of cash.

We believe ourManagement believes the sources of liquidity will be adequate to fund our operations, capital expenditures and payments of dividends in the foreseeable future.

As of December 31, 2021,2023, the Company had total outstanding recourse and non-recourse long-term debt with both floating and fixed-ratesfixed rates of varying maturities for an aggregate principal amount outstanding of $560.2 million and $72.6 million, respectively. $24.7 million and $7.6$593.6 million. $27.6 million of the outstanding principal of the recourse and non-recourse long-term debt is payable within 12 months. See Note 4 to the Consolidated Financial Statements for additional information.

Future interest payments associated with the recourse long-term debt total $92.5$192.5 million, with $14.4$36.6 million payable within 12 months. Future interest payments associated withSee Note 4 to the non-recourse long-term debt total $9.1 million, with $2.4 million payable within 12 months.Consolidated Financial Statements for additional information.

The Company has both a postretirement health care benefit plan and a noncontributory defined benefit pension plan. The postretirement health care benefit planthat covers substantially all of its full-time employees hired prior to January 1, 2003 and pension benefits were frozen at July 1, 2010.2003. Obligations under the retiree healthcare programs are not fixed commitments and will vary depending on multiple factors, including the level of participant utilization and inflation. Our estimates of postretirement payments have considered recent payment trends and actuarial assumptions. As of December 31, 2021,2023, the Company had outstanding benefit obligations of $24.8$17.3 million, with $1.6$1.2 million payable within 12 months.

The process of preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Management evaluates these estimates and assumptions on an ongoing basis. Estimates and assumptions are based on historical experience and management's knowledge and understanding of current facts and circumstances. Actual results, under conditions and circumstances different from those assumed, may change from these estimates.

Certain of our accounting estimates are considered critical, as they are important to the depiction of the Company's financial statementsConsolidated Financial Statements and/or require significant or complex judgment by management. There are other items within our financial statementsthe Company's Consolidated Financial Statements that require estimation, however, they are not deemed critical as defined above. Note 1 to the Consolidated Financial Statements in Item 8 describes ourthe Company's significant accounting policies which should be read in conjunction with our critical accounting estimates.

Management believes that the accounting for readily marketable inventories and commodity derivative contracts, including adjustments for counterparty risk, uncertain tax positions, impairment of long-lived assets and goodwill, and equity method investments and business combinationsuncertain tax positions involve significant estimates and assumptions in the preparation of the Consolidated Financial Statements.

Readily Marketable Inventories ("RMI") are stated at their net realizable value, which approximates fair value based on their commodity characteristics, widely available markets, and pricing mechanisms. The Company marks to market all forward purchase and sale contracts for commodities and ethanol, over-the-counter commodity and ethanol contracts, and exchange-traded futures and options contracts. The overall market for commodity inventories is very liquid and active; market value is determined by reference to prices for identical commodities on regulated commodity exchange (adjusted primarily for transportation costs); and the Company's RMI may be sold without significant additional processing. The Company uses forward purchase and sale contracts and both exchange traded and over-the-counter contracts (such as derivatives generally used by the International Swap Dealers Association). Management estimates fair value based on exchange-quoted prices, adjusted for differences in local markets, as well as counter-partycounterparty non-performance risk in the case of forward and over-the-counter contracts. The amount of risk, and therefore the impact to the fair value of the contracts, varies by type of contract and type of counterparty. With the exception of specific customers thought to be at higher risk, the Company looks at the contracts in total, segregated by contract type, in its quarterly assessment of non-performance risk. For those customers that are thought to be at higher risk, the Company makes assumptions as to performance based on past history and facts about the current situation. Changes in fair value are recorded as a component of Cost of sales and merchandising revenues in the StatementConsolidated Statements of Operations.

The Company's business segments are each highly capital intensive and require significant investment. Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. This is done by evaluating the recoverability based on undiscounted projected cash flows, excluding interest. If an asset group is considered impaired, the impairment loss to be recognized is measured as the amount by which the asset group's carrying amount exceeds its fair value.

Goodwill is tested for impairment at the reporting unit level, which is the operating segment or one level below the operating segment. During the year ended December 31, 2023, the Company evaluated goodwill for impairment using a quantitative assessment in three reporting units and using a qualitative assessment in one reporting unit. The quantitative review for impairment takes into account our estimates of future cash flows, as well as a market based approach. Critical estimates in the determination of the fair value of each reporting unit include, but are not limited to, future expected cash flows, estimated gross margins, and discount rates based on a reporting unit's weighted average cost of capital. Our estimates of future cash flows are based upon a number of assumptions including operating costs, life of the assets, potential disposition proceeds, budgets and long-range plans. The Marketmarket based approach compares internal results of public companies that reflect economic conditions and risks that are similar to the Company to calculate an estimated enterprise value. These factors are discussed in more detail in Note 17,16, Goodwill and Intangible Assets, to the Consolidated Financial Statements.

Our annual goodwill impairment test is performed as of October 1 each year which is discussed in further detail in Note 1716 to the Consolidated Financial Statements.

Management considers several factors to be significant when estimating fair value including expected financial outlook of the business, changes in the Company's stock price, the impact of changing market conditions on financial performance and expected future cash flows, the geopolitical environment and other factors. Deterioration in any of these factors may result in a lower fair value assessment, which could lead to impairment charges in the future. Specifically, actual results may vary from the Company's forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions could result in non-cash impairment charges.

Conclusions on recognizing and measuring uncertain tax positions involve significant estimates and management judgment and include complex considerations of the Internal Revenue Code, related regulations, tax case laws, and prior year audit settlements. To account for uncertainty in income taxes, the Company evaluates the likelihood of a tax position based on the technical merits of the position, performs a subsequent measurement related to the maximum benefit and degree of likelihood, and determines the benefits to be recognized in the financial statements,Consolidated Financial Statements, if any.

The market risk inherent in the Company's market risk-sensitive instruments and positions is the potential loss arising from adverse changes in commodity prices, foreign currency exchange rates, and interest rates as discussed below.

The Company's daily net commodity position consists of inventories, related purchase and sale contracts, exchange-traded futures, and over-the-counter contracts. The fair value of the position is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures market prices. The Company has established controls to manage and limit risk exposure, which consists of a daily review of position limits and effects of potential market price moves on those positions.

A sensitivity analysis has been prepared to estimate the Company's exposure to market risk of its net commodity futures position. Market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in quoted market prices. The result of this analysis, which may differ from actual results, is as follows:

The Company has subsidiaries located outside the United States where the local currency is the functional currency. To reduce the risks associated with foreign currency exchange rate fluctuations, the Company enters into currency exchange contracts to minimize its foreign currency position related to transactions denominated primarily in the euro,Euro, British pound, Mexican peso, Swiss franc, Egyptian pound, and Canadian dollar. These currencies represent the major functional or local currencies in which recurring business transactions occur. The Company does not use currency exchange contracts as hedges against amounts indefinitely invested in foreign subsidiaries and affiliates. The currency exchange contracts used are forward contracts, swaps with banks, exchange-traded futures contracts, and over-the-counter options. The changes in market value of such contracts have a high correlation to the price changes in the currency of the related transactions. The potential loss in fair value for such net currency position resulting from a hypothetical 10% adverse change in foreign currency exchange rates is not material.

The fair value of the Company's long-term debt is estimated using quoted market prices or discounted future cash flows based on the Company's current incremental borrowing rates and credit ratings for similar types of borrowing arrangements. Market risk, which is estimated as the potential increase in fair value resulting from a hypothetical one-half percent decrease in interest rates, is summarized below:

Actual results may differ. The estimated fair value and market risk will vary from year to year depending on the total amount of long-term debt and the mix of variable and fixed rate debt. The Company is also party to short-term debt borrowing arrangements with a capacity of approximately $1.9 billion. As the Company is a significant consumer of short-term debt in peak seasons and the majority of the borrowings are variable rate debt, increases in interest rates could have a significant impact on our profitability.

The Andersons, Inc.

Index to Financial Statements

Cleveland, Ohio

February 24, 202221, 2024

We have served as the Company’s auditor since 2015.

The Andersons, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

The Andersons, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

The Andersons, Inc.

Consolidated Balance Sheets

(In thousands)thousands, except share amounts)