UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended 03/31/~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 000-20557

THE ANDERSONS, INC.

(Exact name of the registrant as specified in its charter)


Ohio		34-1562374
(State of incorporation or organization)		(I.R.S. Employer Identification No.)

1947 Briarfield Boulevard
Maumee	Ohio	43537
(Address of principal executive offices)		(Zip Code)

(419) 893-5050

(Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of each exchange on which registered:

Common stock, $0.00 par value, $0.01 stated value

ANDE

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ý

The registrant had ~~33,829,984~~33,732,414 common shares outstanding at April ~~22, 2022.~~21, 2023.

Table of Contents

THE ANDERSONS, INC.

INDEX


			Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations – Three months ended March 31 ~~2022~~, 202 3 and ~~2021~~20 2 2			1
Condensed Consolidated Statements of Comprehensive Income (Loss) – Three months ended March 31, ~~2022~~2023 and ~~2021~~2022			2
Condensed Consolidated Balance Sheets – March 31 ~~2022,~~, 202 3 , December 31, ~~2021~~202 2 and March 31 ~~2021~~, 20 2 2			3
Condensed Consolidated Statements of Cash Flows – ~~Three~~Th ree months ended March 31 ~~2022~~, 202 3 and ~~2021~~20 2 2			4
Condensed Consolidated Statements of Equity – Three months ended March 31 ~~2022~~, 202 3 and ~~2021~~202 2			5
Notes to Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2522
Item 3. Quantitative and Qualitative Disclosures about Market Risk			3229
Item 4. Controls and Procedures			3229
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3330
Item 1A. Risk Factors			3330
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
~~Item 4. Mine Safety Disclosure~~			3430
Item 6. Exhibits			3531

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

The Andersons, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share data)


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
Sales and merchandising revenues	Sales and merchandising revenues		$	3,977,954	$	2,594,719	Sales and merchandising revenues		$	3,881,238	$	3,977,954
Cost of sales and merchandising revenues	Cost of sales and merchandising revenues		3,858,419		2,481,278		Cost of sales and merchandising revenues		3,733,227		3,858,419
Gross profit	Gross profit		119,535		113,441		Gross profit		148,011		119,535
Operating, administrative and general expenses	Operating, administrative and general expenses		101,987		96,998		Operating, administrative and general expenses		117,235		101,987
Asset impairment							Asset impairment		87,156		—
Interest expense, net							Interest expense, net		16,625		10,859

Interest expense, net			10,859		9,989
Other income, net:
Equity in earnings (losses) of affiliates, net			(244)		1,794

Other income, net	Other income, net		4,162		5,868		Other income, net		8,004		3,918
Income before income taxes from continuing operations			10,607		14,116
Income tax provision from continuing operations			4,103		4,361
Net income from continuing operations			6,504		9,755
Income (loss) from discontinued operations, net of income taxes			(554)		3,507
Net income			5,950		13,262
Income (loss) before income taxes from continuing operations							Income (loss) before income taxes from continuing operations		(65,001)		10,607
Income tax provision (benefit) from continuing operations							Income tax provision (benefit) from continuing operations		(5,884)		4,103
Net income (loss) from continuing operations							Net income (loss) from continuing operations		(59,117)		6,504
Loss from discontinued operations, net of income taxes							Loss from discontinued operations, net of income taxes		—		(554)
Net income (loss)							Net income (loss)		(59,117)		5,950
Net income (loss) attributable to noncontrolling interests	Net income (loss) attributable to noncontrolling interests		447		(1,845)		Net income (loss) attributable to noncontrolling interests		(44,367)		447
Net income attributable to The Andersons, Inc.			$	5,503	$	15,107
Net income (loss) attributable to The Andersons, Inc.							Net income (loss) attributable to The Andersons, Inc.		$	(14,750)	$	5,503

Average number of shares outstanding - basic	Average number of shares outstanding - basic		33,738		33,188		Average number of shares outstanding - basic		33,622		33,738
Average number of share outstanding - diluted	Average number of share outstanding - diluted		34,279		33,577		Average number of share outstanding - diluted		33,622		34,279

Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:	Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:						Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:
Basic earnings (loss):	Basic earnings (loss):						Basic earnings (loss):
Continuing operations	Continuing operations		$	0.18	$	0.35	Continuing operations		$	(0.44)	$	0.18
Discontinued operations	Discontinued operations		(0.02)		0.11		Discontinued operations		—		(0.02)
			$	0.16	$	0.46			$	(0.44)	$	0.16
Diluted earnings (loss):	Diluted earnings (loss):						Diluted earnings (loss):
Continuing operations	Continuing operations		$	0.18	$	0.35	Continuing operations		$	(0.44)	$	0.18
Discontinued operations	Discontinued operations		(0.02)		0.10		Discontinued operations		—		(0.02)
			$	0.16	$	0.45			$	(0.44)	$	0.16

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 1

Table of Contents

The Andersons, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In thousands)


		Three months ended March 31,						Three months ended March 31,
			2022		2021				2023		2022
Net income			$	5,950	$	13,262
Net income (loss)							Net income (loss)		$	(59,117)	$	5,950
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Change in unrecognized actuarial loss and prior service cost	Change in unrecognized actuarial loss and prior service cost		(159)		(103)		Change in unrecognized actuarial loss and prior service cost		(188)		(159)
Foreign currency translation adjustments	Foreign currency translation adjustments		98		1,224		Foreign currency translation adjustments		767		98
Cash flow hedge activity	Cash flow hedge activity		12,422		9,741		Cash flow hedge activity		(4,796)		12,422
Other comprehensive income			12,361		10,862
Comprehensive income			18,311		24,124
Other comprehensive income (loss)							Other comprehensive income (loss)		(4,217)		12,361
Comprehensive income (loss)							Comprehensive income (loss)		(63,334)		18,311
Comprehensive income (loss) attributable to the noncontrolling interests	Comprehensive income (loss) attributable to the noncontrolling interests		447		(1,845)		Comprehensive income (loss) attributable to the noncontrolling interests		(44,367)		447
Comprehensive income attributable to The Andersons, Inc.			$	17,864	$	25,969
Comprehensive income (loss) attributable to The Andersons, Inc.							Comprehensive income (loss) attributable to The Andersons, Inc.		$	(18,967)	$	17,864

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2

Table of Contents

The Andersons, Inc.

Condensed Consolidated Balance Sheets (Unaudited)


(In thousands)	(In thousands)	March 31, 2022		December 31, 2021		March 31, 2021		(In thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Assets	Assets							Assets
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	36,381	$	216,444	$	35,393	Cash and cash equivalents	$	70,853	$	115,269	$	36,381
Accounts receivable, net	Accounts receivable, net	1,050,259		835,180		677,118		Accounts receivable, net	1,125,071		1,248,878		1,050,259
Inventories (Note 2)	Inventories (Note 2)	1,950,303		1,814,538		1,287,637		Inventories (Note 2)	1,551,101		1,731,725		1,950,303
Commodity derivative assets – current (Note 5)	Commodity derivative assets – current (Note 5)	769,916		410,813		317,939		Commodity derivative assets – current (Note 5)	222,036		295,588		769,916
Current assets held-for-sale (Note 14)		20,255		20,885		37,136
Current assets held-for-sale								Current assets held-for-sale	—		2,871		20,255
Other current assets	Other current assets	113,589		74,468		81,666		Other current assets	81,407		71,622		113,589
Total current assets	Total current assets	3,940,703		3,372,328		2,436,889		Total current assets	3,050,468		3,465,953		3,940,703
Other assets:	Other assets:							Other assets:
Goodwill	Goodwill	129,342		129,342		131,542		Goodwill	129,342		129,342		129,342
Other intangible assets, net	Other intangible assets, net	111,055		117,137		133,198		Other intangible assets, net	95,134		100,907		111,055
Right of use assets, net	Right of use assets, net	51,821		52,146		34,966		Right of use assets, net	59,209		61,890		51,821
Other assets held-for-sale (Note 14)		45,264		43,169		629,228
Other assets held-for-sale								Other assets held-for-sale	—		—		45,264
Other assets, net	Other assets, net	92,506		69,068		60,964		Other assets, net	89,174		87,175		92,506
Total other assets	Total other assets	429,988		410,862		989,898		Total other assets	372,859		379,314		429,988

Property, plant and equipment, net (Note 3)	Property, plant and equipment, net (Note 3)	772,245		786,029		839,950		Property, plant and equipment, net (Note 3)	678,717		762,729		772,245
Total assets	Total assets	$	5,142,936	$	4,569,219	$	4,266,737	Total assets	$	4,102,044	$	4,607,996	$	5,142,936
Liabilities and equity	Liabilities and equity							Liabilities and equity
Current liabilities:	Current liabilities:							Current liabilities:
Short-term debt (Note 4)	Short-term debt (Note 4)	$	1,449,768	$	501,792	$	915,205	Short-term debt (Note 4)	$	638,210	$	272,575	$	1,449,768
Trade and other payables	Trade and other payables	741,124		1,199,324		534,660		Trade and other payables	768,872		1,423,633		741,124
Customer prepayments and deferred revenue	Customer prepayments and deferred revenue	384,723		358,119		161,696		Customer prepayments and deferred revenue	309,546		370,524		384,723
Commodity derivative liabilities – current (Note 5)	Commodity derivative liabilities – current (Note 5)	216,836		128,911		91,448		Commodity derivative liabilities – current (Note 5)	107,983		98,519		216,836
Current maturities of long-term debt (Note 4)	Current maturities of long-term debt (Note 4)	54,158		32,256		42,824		Current maturities of long-term debt (Note 4)	85,567		110,155		54,158
Current liabilities held-for-sale (Note 14)		10,200		13,379		26,362

Current liabilities held-for-sale								Current liabilities held-for-sale	—		—		10,200
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	205,958		230,148		145,921		Accrued expenses and other current liabilities	202,133		245,916		205,958
Total current liabilities	Total current liabilities	3,062,767		2,463,929		1,918,116		Total current liabilities	2,112,311		2,521,322		3,062,767
Long-term lease liabilities	Long-term lease liabilities	31,419		31,322		21,210		Long-term lease liabilities	35,727		37,147		31,419
Long-term debt, less current maturities (Note 4)	Long-term debt, less current maturities (Note 4)	571,181		600,487		877,583		Long-term debt, less current maturities (Note 4)	486,892		492,518		571,181
Deferred income taxes	Deferred income taxes	68,437		71,127		173,481		Deferred income taxes	54,391		64,080		68,437
Other long-term liabilities held-for-sale (Note 14)		14,738		16,119		45,172
Other long-term liabilities held-for-sale								Other long-term liabilities held-for-sale	—		—		14,738
Other long-term liabilities	Other long-term liabilities	77,173		78,531		48,624		Other long-term liabilities	66,311		63,160		77,173
Total liabilities	Total liabilities	3,825,715		3,261,515		3,084,186		Total liabilities	2,755,632		3,178,227		3,825,715
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)	0		0		0		Commitments and contingencies (Note 13)
Shareholders’ equity:	Shareholders’ equity:							Shareholders’ equity:
Common shares, without par value (63,000 shares authorized; 34,064, 33,870 and 33,786 shares issued at 3/31/2022, 12/31/2021 and 3/31/2021, respectively)		142		140		140
Common shares, without par value (63,000 shares authorized and 34,064 shares issued for all periods presented)								Common shares, without par value (63,000 shares authorized and 34,064 shares issued for all periods presented)	142		142		142
Preferred shares, without par value (1,000 shares authorized; none issued)	Preferred shares, without par value (1,000 shares authorized; none issued)	—		—		—		Preferred shares, without par value (1,000 shares authorized; none issued)	—		—		—
Additional paid-in-capital	Additional paid-in-capital	375,794		368,595		355,961		Additional paid-in-capital	377,768		385,248		375,794
Treasury shares, at cost (61, 11 and 123 shares at 3/31/2022, 12/31/2021 and 3/31/2021, respectively)		(2,265)		(263)		(2,872)
Accumulated other comprehensive income (loss)		13,555		1,194		(1,214)
Treasury shares, at cost (289, 446 and 61 shares at 3/31/2023, 12/31/2022 and 3/31/2022, respectively)								Treasury shares, at cost (289, 446 and 61 shares at 3/31/2023, 12/31/2022 and 3/31/2022, respectively)	(11,006)		(15,043)		(2,265)
Accumulated other comprehensive income								Accumulated other comprehensive income	16,267		20,484		13,555
Retained earnings	Retained earnings	701,799		702,759		631,652		Retained earnings	786,420		807,770		701,799
Total shareholders’ equity of The Andersons, Inc.	Total shareholders’ equity of The Andersons, Inc.	1,089,025		1,072,425		983,667		Total shareholders’ equity of The Andersons, Inc.	1,169,591		1,198,601		1,089,025
Noncontrolling interests	Noncontrolling interests	228,196		235,279		198,884		Noncontrolling interests	176,821		231,168		228,196
Total equity	Total equity	1,317,221		1,307,704		1,182,551		Total equity	1,346,412		1,429,769		1,317,221
Total liabilities and equity	Total liabilities and equity	$	5,142,936	$	4,569,219	$	4,266,737	Total liabilities and equity	$	4,102,044	$	4,607,996	$	5,142,936

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3

Table of Contents

The Andersons, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


		Three months ended March 31,					Three months ended March 31,
		2022		2021			2023		2022
Operating Activities	Operating Activities					Operating Activities
Net income from continuing operations		$	6,504	$	9,755
Income (loss) from discontinued operations, net of income taxes		(554)		3,507
Net income		5,950		13,262
Adjustments to reconcile net income to cash used in operating activities:
Net income (loss) from continuing operations						Net income (loss) from continuing operations	$	(59,117)	$	6,504
Loss from discontinued operations, net of income taxes						Loss from discontinued operations, net of income taxes	—		(554)
Net income (loss)						Net income (loss)	(59,117)		5,950
Adjustments to reconcile net income (loss) to cash used in operating activities:						Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	34,377		47,504		Depreciation and amortization	32,220		34,377
Bad debt expense, net	Bad debt expense, net	1,255		(1,686)		Bad debt expense, net	—		1,255
Equity in (earnings) losses of affiliates, net of dividends		244		(1,794)
Gain on sales of assets, net		(81)		(2,635)

Stock-based compensation expense	Stock-based compensation expense	1,818		1,990		Stock-based compensation expense	2,596		1,818
Deferred federal income tax	Deferred federal income tax	(6,947)		(2)		Deferred federal income tax	(8,051)		(6,947)

Asset impairment						Asset impairment	87,156		—
Other	Other	2,885		4,579		Other	3,225		3,048
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(215,012)		(33,476)		Accounts receivable	125,113		(215,012)
Inventories	Inventories	(136,820)		5,007		Inventories	178,010		(136,820)
Commodity derivatives	Commodity derivatives	(277,761)		(53,295)		Commodity derivatives	83,148		(277,761)
Other current and non-current assets	Other current and non-current assets	(38,810)		16,740		Other current and non-current assets	(17,543)		(38,810)
Payables and other current and non-current liabilities	Payables and other current and non-current liabilities	(446,096)		(441,921)		Payables and other current and non-current liabilities	(760,292)		(446,096)
Net cash used in operating activities	Net cash used in operating activities	(1,074,998)		(445,727)		Net cash used in operating activities	(333,535)		(1,074,998)
Investing Activities	Investing Activities					Investing Activities
Purchases of property, plant and equipment and capitalized software	Purchases of property, plant and equipment and capitalized software	(20,722)		(16,919)		Purchases of property, plant and equipment and capitalized software	(25,470)		(20,722)
Proceeds from sale of assets		72		385

Purchases of investments	Purchases of investments	(1,333)		(2,800)		Purchases of investments	—		(1,333)

Purchases of Rail assets	Purchases of Rail assets	(3,186)		(2,611)		Purchases of Rail assets	—		(3,186)
Proceeds from sale of Rail assets	Proceeds from sale of Rail assets	248		5,383		Proceeds from sale of Rail assets	2,871		248
Other	Other	—		832		Other	2,792		72
Net cash used in investing activities	Net cash used in investing activities	(24,921)		(15,730)		Net cash used in investing activities	(19,807)		(24,921)
Financing Activities	Financing Activities					Financing Activities
Net receipts under short-term lines of credit	Net receipts under short-term lines of credit	796,209		260,160		Net receipts under short-term lines of credit	363,619		796,209
Proceeds from issuance of short-term debt	Proceeds from issuance of short-term debt	350,000		250,000		Proceeds from issuance of short-term debt	—		350,000
Payments of short-term debt	Payments of short-term debt	(200,000)		—		Payments of short-term debt	—		(200,000)
Proceeds from issuance of long-term debt		—		89,700

Payments of long-term debt	Payments of long-term debt	(7,566)		(125,884)		Payments of long-term debt	(30,251)		(7,566)
Contributions from noncontrolling interest owner	Contributions from noncontrolling interest owner	2,450		1,960		Contributions from noncontrolling interest owner	—		2,450
Distributions to noncontrolling interest owner	Distributions to noncontrolling interest owner	(9,980)		—		Distributions to noncontrolling interest owner	(9,980)		(9,980)
Payments of debt issuance costs	Payments of debt issuance costs	(7,310)		(1,225)		Payments of debt issuance costs	(5)		(7,310)
Dividends paid	Dividends paid	(6,144)		(5,839)		Dividends paid	(6,279)		(6,144)
Proceeds from exercises of stock options	Proceeds from exercises of stock options	5,024		—		Proceeds from exercises of stock options	—		5,024
Common stock repurchased						Common stock repurchased	(1,671)		—
Value of shares withheld for taxes						Value of shares withheld for taxes	(6,616)		(3,319)
Other	Other	(2,926)		(1,110)		Other	—		393
Net cash provided by financing activities	Net cash provided by financing activities	919,757		467,762		Net cash provided by financing activities	308,817		919,757
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	99		(35)		Effect of exchange rates on cash and cash equivalents	109		99
Increase (decrease) in cash and cash equivalents		(180,063)		6,270
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	(44,416)		(180,063)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	216,444		29,123		Cash and cash equivalents at beginning of period	115,269		216,444
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	36,381	$	35,393	Cash and cash equivalents at end of period	$	70,853	$	36,381

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 4

Table of Contents

The Andersons, Inc.

Condensed Consolidated Statements of Equity (Unaudited)

(In thousands, except per share data)


		Three Months Ended															Three Months Ended
		Common Shares		Additional Paid-in Capital		Treasury Shares		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interests		Total
Balance at December 31, 2020		$	138	$	348,714	$	(966)	$	(12,076)	$	626,081	$	198,769	$	1,160,660
Net income (loss)										15,107		(1,845)		13,262
Other comprehensive income								9,418						9,418
Amounts reclassified from Accumulated other comprehensive income								1,444						1,444
Cash received from noncontrolling interests, net												1,960		1,960

Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (86 shares)		2		7,247		(2,154)				(3,480)				1,615
Dividends declared ($0.175 per common share)										(5,808)				(5,808)
Restricted share award dividend equivalents						248				(248)				—
Balance at March 31, 2021		$	140	$	355,961	$	(2,872)	$	(1,214)	$	631,652	$	198,884	$	1,182,551
																	Common Shares		Additional Paid-in Capital		Treasury Shares		Accumulated Other Comprehensive Income		Retained Earnings		Noncontrolling Interests		Total
Balance at December 31, 2021	Balance at December 31, 2021	$	140	$	368,595	$	(263)	$	1,194	$	702,759	$	235,279	$	1,307,704	Balance at December 31, 2021	$	140	$	368,595	$	(263)	$	1,194	$	702,759	$	235,279	$	1,307,704
Net income	Net income									5,503		447		5,950		Net income									5,503		447		5,950
Other comprehensive income	Other comprehensive income							10,822						10,822		Other comprehensive income							10,822						10,822
Amounts reclassified from Accumulated other comprehensive income	Amounts reclassified from Accumulated other comprehensive income							1,539						1,539		Amounts reclassified from Accumulated other comprehensive income							1,539						1,539
Cash received from noncontrolling interests, net	Cash received from noncontrolling interests, net											2,450		2,450		Cash received from noncontrolling interests, net											2,450		2,450
Distributions to noncontrolling interests	Distributions to noncontrolling interests											(9,980)		(9,980)		Distributions to noncontrolling interests											(9,980)		(9,980)

Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (59 shares)	Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (59 shares)	2		7,145		(2,322)				0				4,825		Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (59 shares)	2		7,145		(2,322)								4,825
Dividends declared ($0.180 per common share)	Dividends declared ($0.180 per common share)									(6,089)				(6,089)		Dividends declared ($0.180 per common share)									(6,089)				(6,089)
Restricted share award dividend equivalents	Restricted share award dividend equivalents			54		320				(374)				—		Restricted share award dividend equivalents			54		320				(374)				—
Balance at March 31, 2022	Balance at March 31, 2022	$	142	$	375,794	$	(2,265)	$	13,555	$	701,799	$	228,196	$	1,317,221	Balance at March 31, 2022	$	142	$	375,794	$	(2,265)	$	13,555	$	701,799	$	228,196	$	1,317,221

Balance at December 31, 2022																Balance at December 31, 2022	$	142	$	385,248	$	(15,043)	$	20,484	$	807,770	$	231,168	$	1,429,769
Net income (loss)																Net income (loss)									(14,750)		(44,367)		(59,117)
Other comprehensive income (loss)																Other comprehensive income (loss)							(1,884)						(1,884)
Amounts reclassified from Accumulated other comprehensive income																Amounts reclassified from Accumulated other comprehensive income							(2,333)						(2,333)

Distributions to noncontrolling interests																Distributions to noncontrolling interests											(9,980)		(9,980)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (201) shares)																Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (201) shares)			(8,087)		5,543								(2,544)
Purchase of treasury shares (49 shares)																Purchase of treasury shares (49 shares)					(1,671)								(1,671)
Dividends declared ($0.185 per common share)																Dividends declared ($0.185 per common share)									(6,240)				(6,240)
Restricted share award dividend equivalents																Restricted share award dividend equivalents			607		165				(360)				412
Balance at March 31, 2023																Balance at March 31, 2023	$	142	$	377,768	$	(11,006)	$	16,267	$	786,420	$	176,821	$	1,346,412

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 5

Table of Contents

The Andersons, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation and Consolidation

These Condensed Consolidated Financial Statements include the accounts of The Andersons, Inc. and its wholly owned and controlled subsidiaries (the “Company”). Controlled subsidiaries include majority-owned subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The portion of these entities that is not owned by the Company is presented as noncontrolling interests. All intercompany accounts and transactions are eliminated in consolidation.

Investments in unconsolidated entities in which the Company has significant influence, but not control, are accounted for using the equity method of accounting.

During the third quarter of 2021, substantially all of the assets and liabilities of the Rail ~~business~~segment were classified as held-for-sale in the accompanying Condensed Consolidated Balance ~~Sheets. As discussed further in Note 14,~~Sheets as the Company executed a definitive agreement to sell the Rail Leasing ~~business. In conjunction with the sale of the Rail Leasing~~ business ~~the Company~~and announced its intent to ~~divest~~sell the ~~remainder of the~~remaining Rail Repair business, which ~~primarily consisted of the Rail Repair business.~~was subsequently sold in 2022. These transactions effectively constitute the entirety of what has historically been included in the Rail reportable segment. Therefore, the associated operating results, net of income tax, have been classified as discontinued operations in the accompanying Condensed Consolidated Statements of Operations for all periods presented. Throughout this Quarterly Report on Form 10-Q, with the exception of the Condensed Consolidated Statements of Cash Flows, Condensed Consolidated Statements of Equity and unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. The reclassification relates to the Condensed Consolidated Balance Sheet presentation of assets and liabilities as held-for-sale and Condensed Consolidated Statements of Operations presentation of results classified as discontinued operations in relation to the Rail business transactions noted above.

In the opinion of management, all adjustments consisting of normal and recurring items considered necessary for the fair presentation of the results of operations, financial position, and cash flows for the periods indicated have been made. The results in these Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2022.~~2023. An unaudited Condensed Consolidated Balance Sheet as of March 31, ~~2021~~2022 has been included as the Company operates in several seasonal industries.

The Condensed Consolidated Balance Sheet data at December 31, ~~2021~~2022 was derived from the audited Consolidated Financial Statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in The Andersons, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Form 10-K”).

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 6

Table of Contents

2. Inventories

Major classes of inventories are presented below. Readily Marketable Inventories ("RMI") are agricultural commodity inventories such as corn, soybeans, wheat, and ethanol co-products, among others, carried at net realizable value which approximates fair value based on their commodity characteristics, widely available ~~markets,~~market information, and pricing mechanisms. The net realizable value of RMI is calculated as the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. All other inventories are held at lower of cost or net realizable value.


(in thousands)	(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021		(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Grain and other agricultural products (a)	Grain and other agricultural products (a)	$	1,435,763	$	1,427,708	$	971,914	Grain and other agricultural products (a)	$	1,112,155	$	1,326,531	$	1,435,763
Propane and frac sand (a)		17,529		23,780		8,388
Energy inventories (a)								Energy inventories (a)	17,641		21,084		17,529
Ethanol and co-products (a)	Ethanol and co-products (a)	193,303		184,354		136,234		Ethanol and co-products (a)	147,275		156,341		193,303
Plant nutrients and cob products	Plant nutrients and cob products	303,708		178,696		171,101		Plant nutrients and cob products	274,030		227,769		303,708
Total Inventories		$	1,950,303	$	1,814,538	$	1,287,637
Total inventories								Total inventories	$	1,551,101	$	1,731,725	$	1,950,303

(a) Includes RMI of ~~$1,413.5~~$1,085.7 million,~~, $1,410.9~~ $1,308.8 million and ~~$942.4~~$1,413.5 million at March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021,~~2022, respectively.

~~Inventories do not include~~ ~~1.0 million~~, 3.0 million and 1.6 million bushels of grain held in storage for others as of March 31, 2022, December 31, 2021 and March 31, 2021, respectively. The Company does not have title to the grain and is only liable for any deficiencies in grade or shortage of quantity that may arise during the storage period. Management has not experienced historical losses on any deficiencies and does not anticipate material losses in the future.

3. Property, Plant and Equipment

The components of Property, plant and equipment, net are as follows:


(in thousands)	(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021		(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Land	Land	$	39,183	$	39,162	$	39,357	Land	$	38,000	$	38,689	$	39,183
Land improvements and leasehold improvements	Land improvements and leasehold improvements	91,061		91,122		92,656		Land improvements and leasehold improvements	91,503		92,084		91,061
Buildings and storage facilities	Buildings and storage facilities	369,850		368,577		379,245		Buildings and storage facilities	362,451		364,721		369,850
Machinery and equipment	Machinery and equipment	946,352		936,476		912,372		Machinery and equipment	917,269		980,159		946,352
Construction in progress	Construction in progress	23,512		20,676		16,108		Construction in progress	48,158		41,429		23,512
		1,469,958		1,456,013		1,439,738			1,457,381		1,517,082		1,469,958
Less: accumulated depreciation	Less: accumulated depreciation	697,713		669,984		599,788		Less: accumulated depreciation	778,664		754,353		697,713
Property, plant and equipment, net	Property, plant and equipment, net	$	772,245	$	786,029	$	839,950	Property, plant and equipment, net	$	678,717	$	762,729	$	772,245

Depreciation expense on property, plant and equipment used in continuing operations was ~~$28.3~~$26.2 million and ~~$31.1~~$28.3 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

The Company recorded a $87.2 million impairment charge for the three months ended March 31, 2023 related to ELEMENT, LLC ("ELEMENT"), the Company's joint venture ethanol plant within the Renewables segment. The plant has faced operational and market-based challenges which were exacerbated by a shift in the California Low Carbon Fuel Standard credit markets and high western corn basis. As the Company owns 51% of ELEMENT, the Company consolidates the results of ELEMENT and 49% of the impairment charge will be represented in Net loss attributable to noncontrolling interests in the Company's Condensed Consolidated Statements of Operations.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 7

Table of Contents

4. Debt

Short-term and long-term debt at March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021~~2022 consisted of the following:

(in thousands) March 31,
2022 December 31,
2021 March 31,
2021
Short-term debt – non-recourse $ 148,216 $ 65,485 $ 140,730
Short-term debt – recourse 1,301,552 436,307 774,475
Total short-term debt $ 1,449,768 $ 501,792 $ 915,205
Current maturities of long-term debt – non-recourse $ 7,959 $ 7,601 $ 118
Current maturities of long-term debt – recourse 46,199 24,655 42,706
Total current maturities of long-term debt $ 54,158 $ 32,256 $ 42,824
Long-term debt, less: current maturities – non-recourse $ 62,675 $ 64,972 $ 126,772
Long-term debt, less: current maturities – recourse 508,506 535,515 750,811
Total long-term debt, less: current maturities $ 571,181 $ 600,487 $ 877,583

On March 2, 2022, the Company completed an incremental term loan amendment to its credit agreement dated January 11, 2019. The amendment provides for a short-term note of $250.0 million in which the entire stated principal is due on May 31, 2022. On March 9, 2022, the Company completed an additional term loan amendment that expanded the short-term note capacity from $250.0 million to $450.0 million. The term note will bear interest at variable rates, which are based on SOFR plus an applicable spread. As of March 31, 2022, the Company had drawn $350.0 million on the short-term note.

On March 28, 2022, the Company amended its credit agreement dated January 11, 2019. The amendment increased borrowing capacity on the revolver from $900.0 million to $1,550.0 million and extended the maturity dates of the $140.6 million and $209.4 million long-term notes originally due in 2026 to March 26, 2027 and March 28, 2029, respectively. The amendment also transitions the reference rate in the credit agreement from LIBOR to SOFR. The revolver and term notes will bear interest at variable rates, which are based on SOFR plus an applicable spread.

~~As of March 31, 2022, the Company repaid the remaining $200.0 million balance that was outstanding as of December 31, 2021 on a short-term note that was classified as recourse debt to the Company.~~


(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Short-term debt – non-recourse	$	100,228	$	81,475	$	148,216
Short-term debt – recourse	537,982		191,100		1,301,552
Total short-term debt	$	638,210	$	272,575	$	1,449,768

Current maturities of long-term debt – non-recourse	$	63,176	$	63,815	$	7,959
Current maturities of long-term debt – recourse	22,391		46,340		46,199
Total current maturities of long-term debt	$	85,567	$	110,155	$	54,158

Long-term debt, less: current maturities – non-recourse	$	285	$	414	$	62,675
Long-term debt, less: current maturities – recourse	486,607		492,104		508,506
Total long-term debt, less: current maturities	$	486,892	$	492,518	$	571,181

The total borrowing capacity of the Company's lines of credit at March 31, ~~2022~~2023, was ~~$2,031.4~~$1,991.8 million of which the Company had a total of ~~$907.3~~$1,294.9 million available for borrowing under its lines of credit. The Company's borrowing capacity is reduced by a combination of outstanding borrowings and letters of credit.

As of March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021,~~2022, the estimated fair value of long-term debt, including the current portion, was ~~$633.9~~$569.0 million, ~~$650.7~~$595.7 million and ~~$940.7~~$633.9 million, respectively. The Company estimates the fair value of its long-term debt based upon the Company’s credit standing and current interest rates offered to the Company on similar bonds and rates currently available to the Company for long-term borrowings with similar terms and remaining maturities.

As part of the Company's ongoing covenant monitoring process, the Company determined that ELEMENT was out of compliance with its working capital covenant as of January 31, 2023, and is also out of compliance with an owner's equity ratio covenant as of March 31, 2023. In addition, ELEMENT did not make its required February 2023 debt payment and subsequently received a default notice from the lender on February 17, 2023. As such, the $62.8 million of non-recourse debt associated with ELEMENT continues to be classified in Current maturities of long-term debt as of March 31, 2023. On April 18, 2023, ELEMENT was placed into receivership.

The Company is in compliance with all other financial covenants as of March 31, ~~2022.~~2023.

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 8~~

~~Table of Contents~~

5. Derivatives

The Company’s operating results are affected by changes to commodity prices. The Trade and Renewables businesses have established “unhedged” futures position limits (the amount of a commodity, either owned or contracted for, that does not have an offsetting derivative contract). To reduce the exposure to market price risk on commodities owned and forward purchase and sale contracts, the Company enters into exchange traded commodity futures and options contracts and over-the-counter forward and option contracts with various counterparties. These contracts are primarily traded via regulated commodity exchanges. The Company’s forward purchase and sales contracts are for physical delivery of the commodity in a future period. Contracts to purchase commodities from producers generally relate to the current or future crop years for delivery periods quoted by regulated commodity exchanges. Most contracts for the sale of commodities to processors or other commercial consumers generally do not extend beyond one year.

Most of these contracts meet the definition of derivatives. While the Company considers its commodity contracts to be effective economic hedges, the Company does not designate or account for its commodity contracts as hedges as defined under current accounting standards. The Company primarily accounts for its commodity derivatives at estimated fair value. The estimated fair value of the commodity derivative contracts that require the receipt or posting of cash collateral is recorded on a net basis (offset against cash collateral posted or received, also known as margin deposits) within commodity derivative assets or liabilities. Management determines fair value based on exchange-quoted prices and in the case of its forward purchase and sale contracts, estimated fair value is adjusted for differences in local markets and non-performance risk. For contracts for which

The Andersons, Inc. | Q1 2023 Form 10-Q | 8

Table of Contents

physical delivery occurs, balance sheet classification is based on estimated delivery date. For futures, options and over-the-counter contracts in which physical delivery is not expected to occur but, rather, the contract is expected to be net settled, the Company classifies these contracts as current or noncurrent assets or liabilities, as appropriate, based on the Company’s expectations as to when such contracts will be settled.

Realized and unrealized gains and losses in the value of commodity contracts (whether due to changes in commodity prices, changes in performance or credit risk, or due to sale, maturity or extinguishment of the commodity contract) and commodity inventories are included in cost of sales and merchandising revenues.

Generally accepted accounting principles permit a party to a master netting arrangement to offset fair value amounts recognized for derivative instruments against the right to reclaim cash collateral or obligation to return cash collateral under the same master netting arrangement. The Company has master netting arrangements for its exchange traded futures and options contracts and certain over-the-counter contracts. When the Company enters into a future, option or an over-the-counter contract, an initial margin deposit may be required by the counterparty. The amount of the margin deposit varies by commodity. If the market price of a future, option or an over-the-counter contract moves in a direction that is adverse to the Company’s position, an additional margin deposit, called a maintenance margin, is required. The margin deposit assets and liabilities are included in short-term commodity derivative assets or liabilities, as appropriate, in the Condensed Consolidated Balance Sheets.

The following table presents at March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021,~~2022, a summary of the estimated fair value of the Company’s commodity derivative instruments that require cash collateral and the associated cash posted/received as collateral. The net asset or liability positions of these derivatives (net of their cash collateral) are determined on a counterparty-by-counterparty basis and are included within current or non-current commodity derivative assets (or liabilities) on the Condensed Consolidated Balance Sheets:


(in thousands)	(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021		(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Cash collateral paid	Cash collateral paid	$	409,743	$	165,250	$	95,533	Cash collateral paid	$	9,075	$	64,530	$	409,743
Fair value of derivatives	Fair value of derivatives	(144,937)		(36,843)		(76,388)		Fair value of derivatives	23,040		(10,014)		(144,937)
Net derivative asset position	Net derivative asset position	$	264,806	$	128,407	$	19,145	Net derivative asset position	$	32,115	$	54,516	$	264,806

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 9

Table of Contents

The following table presents, on a gross basis, current and non-current commodity derivative assets and liabilities:


		March 31, 2022											March 31, 2023
(in thousands)	(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total		(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total
Commodity derivative assets	Commodity derivative assets	$	637,947	$	15,860	$	34,798	$	1,264	$	689,869	Commodity derivative assets	$	284,879	$	4,175	$	13,431	$	74	$	302,559
Commodity derivative liabilities	Commodity derivative liabilities	(276,874)		(848)		(252,534)		(5,759)		(536,015)		Commodity derivative liabilities	(71,918)		(1,024)		(121,414)		(2,384)		(196,740)
Cash collateral paid	Cash collateral paid	408,843		—		900		—		409,743		Cash collateral paid	9,075		—		—		—		9,075
Balance sheet line item totals	Balance sheet line item totals	$	769,916	$	15,012	$	(216,836)	$	(4,495)	$	563,597	Balance sheet line item totals	$	222,036	$	3,151	$	(107,983)	$	(2,310)	$	114,894


		December 31, 2021											December 31, 2022
(in thousands)	(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total		(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total
Commodity derivative assets	Commodity derivative assets	$	339,321	$	4,677	$	23,762	$	1,209	$	368,969	Commodity derivative assets	$	325,762	$	1,796	$	18,426	$	686	$	346,670
Commodity derivative liabilities	Commodity derivative liabilities	(93,758)		(105)		(152,673)		(2,578)		(249,114)		Commodity derivative liabilities	(94,704)		(149)		(116,945)		(1,484)		(213,282)
Cash collateral paid	Cash collateral paid	165,250		—		—		—		165,250		Cash collateral paid	64,530		—		—		—		64,530
Balance sheet line item totals	Balance sheet line item totals	$	410,813	$	4,572	$	(128,911)	$	(1,369)	$	285,105	Balance sheet line item totals	$	295,588	$	1,647	$	(98,519)	$	(798)	$	197,918


		March 31, 2021											March 31, 2022
(in thousands)	(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total		(in thousands)	Commodity Derivative Assets - Current		Commodity Derivative Assets - Noncurrent		Commodity Derivative Liabilities - Current		Commodity Derivative Liabilities - Noncurrent		Total
Commodity derivative assets	Commodity derivative assets	$	357,802	$	6,762	$	20,752	$	16	$	385,332	Commodity derivative assets	$	637,947	$	15,860	$	34,798	$	1,264	$	689,869
Commodity derivative liabilities	Commodity derivative liabilities	(123,480)		(925)		(124,116)		(1,029)		(249,550)		Commodity derivative liabilities	(276,874)		(848)		(252,534)		(5,759)		(536,015)
Cash collateral paid	Cash collateral paid	83,617		—		11,916		—		95,533		Cash collateral paid	408,843		—		900		—		409,743
Balance sheet line item totals	Balance sheet line item totals	$	317,939	$	5,837	$	(91,448)	$	(1,013)	$	231,315	Balance sheet line item totals	$	769,916	$	15,012	$	(216,836)	$	(4,495)	$	563,597

The net pre-tax gains and losses on commodity derivatives not designated as hedging instruments are included in the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, ~~2022~~2023 and ~~2021 are~~2022 as follows:


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Gains (losses) on commodity derivatives included in Cost of sales and merchandising revenues	Gains (losses) on commodity derivatives included in Cost of sales and merchandising revenues		$	33,998	$	166,985	Gains (losses) on commodity derivatives included in Cost of sales and merchandising revenues		$	(27,568)	$	33,998

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 10

Table of Contents

The Company had the following volume of commodity derivative contracts outstanding (on a gross basis) at March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021:~~2022:


		March 31, 2022		March 31, 2023
(in thousands)	(in thousands)	Number of Bushels	Number of Gallons		Number of Tons	(in thousands)	Number of Bushels	Number of Gallons	Number of Tons
Non-exchange traded:	Non-exchange traded:					Non-exchange traded:
Corn	Corn	722,719	—		—	Corn	572,079	—	—
Soybeans	Soybeans	133,043	—		—	Soybeans	50,184	—	—
Wheat	Wheat	102,690	—		—	Wheat	101,663	—	—
Oats	Oats	45,967	—		—	Oats	31,658	—	—
Ethanol	Ethanol	—	214,513		—	Ethanol	—	200,591	—
Dried distillers grain	Dried distillers grain	—	—		435	Dried distillers grain	—	—	399
Soybean meal	Soybean meal	—	—		550	Soybean meal	—	—	367
Other	Other	8,697	24,565		3,078	Other	10,237	44,120	1,966
Subtotal	Subtotal	1,013,116	239,078		4,063	Subtotal	765,821	244,711	2,732
Exchange traded:	Exchange traded:					Exchange traded:
Corn	Corn	267,135	—		—	Corn	184,766	—	—
Soybeans	Soybeans	86,410	—		—	Soybeans	76,365	—	—
Wheat	Wheat	78,500	—		—	Wheat	83,618	—	—
Oats	Oats	1,815	—		—	Oats	1,125	—	—
Ethanol	Ethanol	—	47,082		—	Ethanol	—	69,972	—
Propane	Propane	—	13,356		—	Propane	—	45,402	—
Other	Other	110	1,470		547	Other	—	1,134	551
Subtotal	Subtotal	433,970	61,908		547	Subtotal	345,874	116,508	551
Total	Total	1,447,086	300,986		4,610	Total	1,111,695	361,219	3,283


		December 31, 2021		December 31, 2022
(in thousands)	(in thousands)	Number of Bushels	Number of Gallons		Number of Tons	(in thousands)	Number of Bushels	Number of Gallons	Number of Tons
Non-exchange traded:	Non-exchange traded:					Non-exchange traded:
Corn	Corn	685,681	—		—	Corn	567,405	—	—
Soybeans	Soybeans	77,592	—		—	Soybeans	56,608	—	—
Wheat	Wheat	109,547	—		—	Wheat	102,716	—	—
Oats	Oats	31,627	—		—	Oats	24,710	—	—
Ethanol	Ethanol	—	192,447		—	Ethanol	—	178,935	—
Dried distillers grain	Dried distillers grain	—	—		507	Dried distillers grain	—	—	570
Soybean meal	Soybean meal	—	—		544	Soybean meal	—	—	449
Other	Other	57,268	16,092		1,854	Other	10,054	44,547	2,029
Subtotal	Subtotal	961,715	208,539		2,905	Subtotal	761,493	223,482	3,048
Exchange traded:	Exchange traded:					Exchange traded:
Corn	Corn	226,215	—		—	Corn	170,280	—	—
Soybeans	Soybeans	64,730	—		—	Soybeans	46,380	—	—
Wheat	Wheat	65,020	—		—	Wheat	111,567	—	—
Oats	Oats	1,300	—		—	Oats	365	—	—
Ethanol	Ethanol	—	100,884		—	Ethanol	—	94,206	—
Propane	Propane	—	31,542		—	Propane	—	47,208	—
Other	Other	75	798		353	Other	—	588	581
Subtotal	Subtotal	357,340	133,224		353	Subtotal	328,592	142,002	581
Total	Total	1,319,055	341,763		3,258	Total	1,090,085	365,484	3,629

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 11

Table of Contents


		March 31, 2021		March 31, 2022
(in thousands)	(in thousands)	Number of Bushels	Number of Gallons		Number of Tons	(in thousands)	Number of Bushels	Number of Gallons	Number of Tons
Non-exchange traded:	Non-exchange traded:					Non-exchange traded:
Corn	Corn	745,248	—		—	Corn	722,719	—	—
Soybeans	Soybeans	64,698	—		—	Soybeans	133,043	—	—
Wheat	Wheat	110,930	—		—	Wheat	102,690	—	—
Oats	Oats	48,066	—		—	Oats	45,967	—	—
Ethanol	Ethanol	—	200,232		—	Ethanol	—	214,513	—
Dried distillers grain	Dried distillers grain	—	—		409	Dried distillers grain	—	—	435
Soybean meal	Soybean meal	—	—		383	Soybean meal	—	—	550
Other	Other	4,645	1,834		1,103	Other	8,697	24,565	3,078
Subtotal	Subtotal	973,587	202,066		1,895	Subtotal	1,013,116	239,078	4,063
Exchange traded:	Exchange traded:					Exchange traded:
Corn	Corn	262,920	—		—	Corn	267,135	—	—
Soybeans	Soybeans	62,020	—		—	Soybeans	86,410	—	—
Wheat	Wheat	76,164	—		—	Wheat	78,500	—	—
Oats	Oats	310	—		—	Oats	1,815	—	—
Ethanol	Ethanol	—	96,978		—	Ethanol	—	47,082	—

Propane	Propane	—	12,894		—	Propane	—	13,356	—
Other	Other	—	423		265	Other	110	1,470	547
Subtotal	Subtotal	401,414	110,295		265	Subtotal	433,970	61,908	547
Total	Total	1,375,001	312,361		2,160	Total	1,447,086	300,986	4,610

Interest Rate and Other Derivatives

The Company’s objectives for using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The gains or losses on the derivatives designated as hedging instruments are recorded in Other comprehensive income (loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 12~~

~~Table of Contents~~

At March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021,~~2022, the Company had recorded the following amounts for the fair value of the Company's other derivatives:


(in thousands)	(in thousands)	March 31, 2022		December 31, 2021		March 31, 2021		(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments							Derivatives not designated as hedging instruments
Interest rate contracts included in Accrued expenses and other current liabilities		$	—	$	(174)	$	(300)
Interest rate contracts included in Other long-term liabilities		—		—		(364)
Foreign currency contracts included in Other current (liabilities) assets		1,330		(1,069)		2,107

Foreign currency contracts included in Other current assets (liabilities)								Foreign currency contracts included in Other current assets (liabilities)	$	4,260	$	(3,124)	$	1,330
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments							Derivatives designated as hedging instruments
Interest rate contracts included in Other current assets	Interest rate contracts included in Other current assets	$	805	$	—	$	—	Interest rate contracts included in Other current assets	$	8,265	$	8,759	$	805
Interest rate contracts included in Other assets	Interest rate contracts included in Other assets	10,223		4,574		6,622		Interest rate contracts included in Other assets	16,779		22,641		10,223
Interest rate contracts included in Accrued expenses and other current liabilities	Interest rate contracts included in Accrued expenses and other current liabilities	(1,596)		(5,206)		(6,773)		Interest rate contracts included in Accrued expenses and other current liabilities	—		—		(1,596)
Interest rate contracts included in Other long-term liabilities	Interest rate contracts included in Other long-term liabilities	—		(6,555)		(11,959)		Interest rate contracts included in Other long-term liabilities	(61)		—		—

The Andersons, Inc. | Q1 2023 Form 10-Q | 12

Table of Contents

The recording of derivatives gains and losses and the financial statement line in which they are located are as follows:


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Derivatives not designated as hedging instruments
Interest rate derivative gains (losses) included in Interest expense, net			$	9	$	354

Derivatives designated as hedging instruments	Derivatives designated as hedging instruments						Derivatives designated as hedging instruments
Interest rate derivative gains (losses) included in Other comprehensive income (loss)	Interest rate derivative gains (losses) included in Other comprehensive income (loss)		$	16,540	$	(12,947)	Interest rate derivative gains (losses) included in Other comprehensive income (loss)		$	(6,407)	$	16,540
Interest rate derivative gains (losses) included in Interest expense, net	Interest rate derivative gains (losses) included in Interest expense, net		(1,443)		(1,618)		Interest rate derivative gains (losses) included in Interest expense, net		2,105		(1,443)

Outstanding interest rate derivatives, as of March 31, ~~2022,~~2023, are as follows:


Interest Rate Hedging Instrument	Interest Rate Hedging Instrument	Year Entered	Year of Maturity	Initial Notional Amount (in millions)		Description	Interest Rate	Interest Rate Hedging Instrument	Year Entered	Year of Maturity	Initial Notional Amount (in millions)		Description	Interest Rate
Long-term	Long-term							Long-term
Swap	Swap	2017	2022	$	20.0	Interest rate component of debt - accounted for as a hedge	1.8%	Swap	2019	2025	$	98.4	Interest rate component of debt - accounted for as a hedge	2.3%
Swap	Swap	2018	2025	$	20.0	Interest rate component of debt - accounted for as a hedge	2.6%	Swap	2019	2025	$	49.2	Interest rate component of debt - accounted for as a hedge	2.4%
Swap	Swap	2019	2025	$	100.0	Interest rate component of debt - accounted for as a hedge	2.3%	Swap	2019	2025	$	49.2	Interest rate component of debt - accounted for as a hedge	2.4%
Swap	Swap	2019	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	2.4%	Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%
Swap	Swap	2019	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	2.4%	Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%
Swap	Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%	Swap	2022	2025	$	20.0	Interest rate component of debt - accounted for as a hedge	2.6%
Swap	Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%	Swap	2022	2029	$	100.0	Interest rate component of debt - accounted for as a hedge	2.0%
Swap								Swap	2022	2029	$	50.0	Interest rate component of debt - accounted for as a hedge	2.4%
Swap								Swap	2023	2024	$	50.0	Interest rate component of debt - accounted for as a hedge	3.7%

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 13

Table of Contents

6. Revenue

Many of the Company’s sales and merchandising revenues are generated from contracts that are outside the scope of ~~Accounting Standard Codification ("ASC") 606 and thus are accounted for under other accounting standards.~~ASC 606. Specifically, many of the Company's Trade and Renewables sales contracts are derivatives under ASC 815, Derivatives and ~~Hedging.~~ Hedging. The breakdown of revenues between ~~the two standards are~~ASC 606 and ASC 815 is as follows:


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Revenues under ASC 606	Revenues under ASC 606		$	677,856	$	487,094	Revenues under ASC 606		$	738,978	$	677,856
Revenues under ASC 815	Revenues under ASC 815		3,300,098		2,107,625		Revenues under ASC 815		3,142,260		3,300,098
Total revenues	Total revenues		$	3,977,954	$	2,594,719	Total revenues		$	3,881,238	$	3,977,954

The remainder of this note applies only to those revenues that are accounted for under ASC 606.

Disaggregation of revenue

The following tables disaggregate revenues under ASC 606 by major product/service line for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively:


		Three months ended March 31, 2022									Three months ended March 31, 2023
(in thousands)	(in thousands)	Trade		Renewables		Plant Nutrient		Total		(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	Specialty nutrients	$	—	$	—	$	93,268	$	93,268	Specialty nutrients	$	—	$	—	$	69,997	$	69,997
Primary nutrients	Primary nutrients	—		—		89,882		89,882		Primary nutrients	—		—		64,750		64,750
Products and co-products	Products and co-products	107,871		232,694		—		340,565		Products and co-products	88,966		394,609		—		483,575
Propane and frac sand		119,792		—		—		119,792
Propane										Propane	76,523		—		—		76,523
Other	Other	6,242		1,215		26,892		34,349		Other	12,590		2,348		29,195		44,133
Total	Total	$	233,905	$	233,909	$	210,042	$	677,856	Total	$	178,079	$	396,957	$	163,942	$	738,978


		Three months ended March 31, 2021									Three months ended March 31, 2022
(in thousands)	(in thousands)	Trade		Renewables		Plant Nutrient		Total		(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	Specialty nutrients	$	—	$	—	$	76,806	$	76,806	Specialty nutrients	$	—	$	—	$	93,268	$	93,268
Primary nutrients	Primary nutrients	—		—		71,659		71,659		Primary nutrients	—		—		89,882		89,882
Products and co-products	Products and co-products	71,988		145,644		—		217,632		Products and co-products	107,871		232,694		—		340,565
Propane and frac sand		92,065		—		—		92,065
Propane										Propane	114,503		—		—		114,503
Other	Other	4,386		3,759		20,787		28,932		Other	11,531		1,215		26,892		39,638
Total	Total	$	168,439	$	149,403	$	169,252	$	487,094	Total	$	233,905	$	233,909	$	210,042	$	677,856

Substantially all of the Company's revenues accounted for under ASC 606 during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, are recorded at a point in time instead of over time.

Contract balances

The balances of the Company’s contract liabilities were ~~$185.5~~$118.4 million and ~~$100.8~~$55.4 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The main driver of the contract liabilities balance isare payments for primary and specialty nutrients received in advance of fulfilling our performance obligations under our customer contracts. Due to seasonality of this business, contract liabilities ~~were~~are built up ~~at year-end and~~ through the first quarter in preparation for the spring application season.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 14

Table of Contents

7. Income Taxes

On a quarterly basis, the Company estimates the effective tax rate expected to be applicable for the full year and makes changes, if necessary, based on new information or events. The estimated annual effective tax rate is forecasted based on actual historical information and forward-looking estimates and is used to provide for income taxes in interim reporting periods. The Company also recognizes the tax impact of certain unusual or infrequently occurring items, such as the effects of changes in tax laws or rates and impacts from settlements with tax authorities, discretely in the quarter in which they occur.

For the three months ended March 31, ~~2022,~~2023, the Company recorded an income tax ~~expense~~benefit from continuing operations of ~~$4.1~~$5.9 million. The Company's effective tax rate was ~~38.7%~~9.1% on ~~income~~a loss before taxes from continuing operations of ~~$10.6~~$65.0 million. The difference between the ~~38.7%~~9.1% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes and nondeductible compensation. During the three months ended March 31, 2023, a discrete income tax benefit of $12.0 million was recorded on a loss before taxes of $94.7 million related to the impairment charge associated with ELEMENT and current year operations as the Company is unable to reliably estimate an ordinary loss for the year due to debt and operational constraints at ELEMENT.

For the three months ended March 31, 2022, the Company recorded income tax expense from continuing operations of $4.1 million. The Company’s effective tax rate was 38.7% on income from continuing operations of $10.6 million. The effective tax rate differs from the U.S. federal statutory tax rate of 21.0% due to the tax impact of certain discrete derivatives and hedging activities, state and local income taxes, and nondeductible compensation offset by the effect of ~~non-controlling~~noncontrolling interest and Federal Research and Development Credits.

For the three months ended March 31, 2021, the Company recorded income tax expense from continuing operations of $4.4 million. The Company's effective tax rate was 30.9% on income before taxes from continuing operations of $14.1 million. The difference between the 30.9% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of state and local income taxes, U.S. income taxes on foreign earnings, and nondeductible compensation.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 15

Table of Contents

8. Accumulated Other Comprehensive Income ~~(Loss)~~

The following table summarizes the changes in accumulated other comprehensive income ~~(loss)~~ ("AOCI") attributable to the Company for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Currency Translation Adjustment	Currency Translation Adjustment						Currency Translation Adjustment
Beginning balance	Beginning balance		$	5,631	$	5,739	Beginning balance		$	(8,203)	$	5,631
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications		98		1,224		Other comprehensive income (loss) before reclassifications		767		98

Tax effect	Tax effect		—		—		Tax effect		—		—
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax		98		1,224		Other comprehensive income (loss), net of tax		767		98
Ending balance	Ending balance		$	5,729	$	6,963	Ending balance		$	(7,436)	$	5,729
Hedging Adjustment	Hedging Adjustment						Hedging Adjustment
Beginning balance	Beginning balance		$	(5,335)	$	(18,106)	Beginning balance		$	23,546	$	(5,335)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications		10,712		8,126		Other comprehensive income (loss) before reclassifications		(4,302)		10,712
Amounts reclassified from AOCI (a)	Amounts reclassified from AOCI (a)		2,279		2,153		Amounts reclassified from AOCI (a)		(2,105)		2,279
Tax effect	Tax effect		(569)		(538)		Tax effect		1,611		(569)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax		12,422		9,741		Other comprehensive income (loss), net of tax		(4,796)		12,422
Ending balance	Ending balance		$	7,087	$	(8,365)	Ending balance		$	18,750	$	7,087
Pension and Other Postretirement Adjustment	Pension and Other Postretirement Adjustment						Pension and Other Postretirement Adjustment
Beginning balance	Beginning balance		$	640	$	33	Beginning balance		$	4,883	$	640
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications		12		68		Other comprehensive income (loss) before reclassifications		(14)		12
Amounts reclassified from AOCI (b)	Amounts reclassified from AOCI (b)		(228)		(228)		Amounts reclassified from AOCI (b)		(228)		(228)
Tax effect	Tax effect		57		57		Tax effect		54		57
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax		(159)		(103)		Other comprehensive income (loss), net of tax		(188)		(159)
Ending balance	Ending balance		$	481	$	(70)	Ending balance		$	4,695	$	481
Investments in Convertible Preferred Securities Adjustment	Investments in Convertible Preferred Securities Adjustment						Investments in Convertible Preferred Securities Adjustment
Beginning balance	Beginning balance		$	258	$	258	Beginning balance		$	258	$	258

Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax		—		—		Other comprehensive income (loss), net of tax		—		—
Ending balance	Ending balance		$	258	$	258	Ending balance		$	258	$	258

Total AOCI Ending Balance	Total AOCI Ending Balance		$	13,555	$	(1,214)	Total AOCI Ending Balance		$	16,267	$	13,555

(a) Amounts reclassified from gain (loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and is recognized in Interest expense, net. See Note 5 for additional information.

(b) This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost recorded in Operating, administrative and general expenses.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 16

Table of Contents

9. Earnings Per Share


(in thousands, except per common share data)	(in thousands, except per common share data)	Three months ended March 31,			(in thousands, except per common share data)				Three months ended March 31,
			2022			2021		(in thousands, except per common share data)		2023		2022
Numerator:	Numerator:
Net income from continuing operations			$	6,504		$	9,755
Net income (loss) from continuing operations								Net income (loss) from continuing operations		$	(59,117)	$	6,504
Net income (loss) attributable to noncontrolling interests(a)	Net income (loss) attributable to noncontrolling interests(a)		447			(1,845)		Net income (loss) attributable to noncontrolling interests(a)		(44,367)		447
Net income attributable to The Andersons Inc. common shareholders from continuing operations			$	6,057		$	11,600
Net income (loss) attributable to The Andersons Inc. common shareholders from continuing operations								Net income (loss) attributable to The Andersons Inc. common shareholders from continuing operations		$	(14,750)	$	6,057

Income (loss) from discontinued operations, net of income taxes			$	(554)		$	3,507
Loss from discontinued operations, net of income taxes								Loss from discontinued operations, net of income taxes		$	—	$	(554)

Denominator:	Denominator:							Denominator:
Weighted average shares outstanding – basic	Weighted average shares outstanding – basic		33,738			33,188		Weighted average shares outstanding – basic		33,622		33,738
Effect of dilutive awards	Effect of dilutive awards		541			389		Effect of dilutive awards		—		541
Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted		34,279			33,577		Weighted average shares outstanding – diluted		33,622		34,279

Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:	Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:							Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:
Basic earnings (loss):	Basic earnings (loss):							Basic earnings (loss):
Continuing operations	Continuing operations		$	0.18		$	0.35	Continuing operations		$	(0.44)	$	0.18
Discontinued operations	Discontinued operations		(0.02)			0.11		Discontinued operations		—		(0.02)
			$	0.16		$	0.46			$	(0.44)	$	0.16
Diluted earnings (loss):	Diluted earnings (loss):							Diluted earnings (loss):
Continuing operations	Continuing operations		$	0.18		$	0.35	Continuing operations		$	(0.44)	$	0.18
Discontinued operations	Discontinued operations		(0.02)			0.10		Discontinued operations		—		(0.02)
			$	0.16		$	0.45			$	(0.44)	$	0.16

(a) All net income (loss) attributable to noncontrolling interests is within continuing operations of the Company.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 17

Table of Contents

10. Fair Value Measurements

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021:~~2022:


(in thousands)	March 31, 2023
Assets (liabilities)	Level 1		Level 2		Level 3		Total
Commodity derivatives, net (a)	$	32,115	$	82,779	$	—	$	114,894
Provisionally priced contracts (b)	(16,187)		(52,150)		—		(68,337)
Convertible preferred securities (c)	—		—		15,410		15,410
Other assets and liabilities (d)	8,357		24,983		—		33,340
Total	$	24,285	$	55,612	$	15,410	$	95,307


(in thousands)	December 31, 2022
Assets (liabilities)	Level 1		Level 2		Level 3		Total

Commodity derivatives, net (a)	$	54,516	$	143,402	$	—	$	197,918
Provisionally priced contracts (b)	(20,960)		(115,377)		—		(136,337)
Convertible preferred securities (c)	—		—		16,278		16,278
Other assets and liabilities (d)	(209)		31,400		—		31,191
Total	$	33,347	$	59,425	$	16,278	$	109,050


(in thousands)	March 31, 2022
Assets (liabilities)	Level 1		Level 2		Level 3		Total


Commodity derivatives, net (a)	$	264,806	$	298,791	$	—	$	563,597
Provisionally priced contracts (b)	47,505		(42,698)		—		4,807
Convertible preferred securities (c)	—		—		15,905		15,905
Other assets and liabilities (d)	4,677		9,432		—		14,109
Total	$	316,988	$	265,525	$	15,905	$	598,418

(in thousands) December 31, 2021
Assets (liabilities) Level 1 Level 2 Level 3 Total
Commodity derivatives, net (a)
$ 128,407 $ 156,698 $ — $ 285,105
Provisionally priced contracts (b)
43,944 (89,797) — (45,853)
Convertible preferred securities (c)
— — 11,618 11,618
Other assets and liabilities (d)
2,784 (7,361) — (4,577)
Total $ 175,135 $ 59,540 $ 11,618 $ 246,293

(in thousands) March 31, 2021
Assets (liabilities) Level 1 Level 2 Level 3 Total
Commodity derivatives, net (a)
$ 19,145 $ 212,170 $ — $ 231,315
Provisionally priced contracts (b)
14,231 (31,602) — (17,371)
Convertible preferred securities (c)
— — 11,649 11,649
Other assets and liabilities (d)
6,147 (12,774) — (6,627)
Total $ 39,523 $ 167,794 $ 11,649 $ 218,966

(a)Includes associated cash posted/received as collateral

(b)Included in "Provisionally priced contracts" are those instruments based only on underlying futures values (Level 1) and delayed price contracts (Level 2)

(c)Recorded in “Other assets, net” on the Company’s Condensed Consolidated Balance Sheets related to certain available for sale securities.

(d)Included in other assets and liabilities are assets held by the Company to fund deferred compensation plans and foreign exchange derivative contracts (Level 1), as well as interest rate derivatives (Level 2).

Level 1 commodity derivatives reflect the fair value of the exchanged-traded futures and options contracts that the Company holds, net of the cash collateral, that the Company has in its margin account.

The majority of the Company’s assets and liabilities measured at fair value are based on the market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The Company’s net commodity derivatives primarily consist of futures or options contracts via regulated exchanges and contracts with producers or customers under which the future settlement date and bushels (or gallons in the case of ethanol contracts) of commodities to be delivered (primarily wheat, corn, soybeans and ethanol) are fixed and under which the price may or may not be fixed. Depending on the specifics of the individual contracts, the fair value is derived from the futures or options prices quoted on various exchanges for similar commodities and delivery dates as well as observable quotes for local basis adjustments (the difference, which is attributable to local market conditions, between the quoted futures price and the local cash price). Because “basis” for a particular commodity and location typically has multiple quoted prices from other agribusinesses in the same geographical vicinity and is used as a common pricing mechanism in the agribusiness industry, the Company has concluded that “basis” is typically a Level 2 fair value input for purposes of the fair value disclosure requirements related to our commodity derivatives, depending on the specific commodity. Although nonperformance risk, both of the Company and the counterparty, is present in each of these commodity contracts and is a component of the estimated fair values, based on the Company’s historical experience with its producers and customers and the Company’s knowledge of their businesses, the Company does not view nonperformance risk to be a significant input to fair value for these commodity contracts.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 18

Table of Contents

These fair value disclosures exclude RMI which consists of agricultural commodity inventories measured at net realizable value. The net realizable value used to measure the Company’s agricultural commodity inventories is the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. This valuation would generally be considered Level 2. The amount of RMI is disclosed in Note 2. Changes in the net realizable value of commodity inventories are recognized as a component of cost of sales and merchandising revenues.

Provisionally priced contract liabilities are those for which the Company has taken ownership and possession of grain, but the final purchase price has not been established. In the case of payables where the unpriced portion of the contract is limited to the futures price of the underlying commodity or the Company has delivered provisionally priced grain and a subsequent payable or receivable is set up for any future changes in the grain price, quoted exchange prices are used and the liability is deemed to be Level 1 in the fair value hierarchy. For all other unpriced contracts which include variable futures and basis components, the amounts recorded for delayed price contracts are determined on the basis of local grain market prices at the balance sheet date and, as such, are deemed to be Level 2 in the fair value hierarchy.

The convertible preferred securities are interests in several early-stage enterprises that may be in various forms, such as convertible debt or preferred equity securities.

A reconciliation of beginning and ending balances for the Company’s fair value measurements using Level 3 inputs is as follows:


		Convertible Preferred Securities					Convertible Preferred Securities
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Assets at January 1,	Assets at January 1,	$	11,618	$	8,849	Assets at January 1,	$	16,278	$	11,618
Additional investments		3,883		2,800
Purchases of additional investments						Purchases of additional investments	—		3,883
Gains included in Other income, net	Gains included in Other income, net	404		—		Gains included in Other income, net	802		404
Proceeds from investments						Proceeds from investments	(1,670)		—
Assets at March 31,	Assets at March 31,	$	15,905	$	11,649	Assets at March 31,	$	15,410	$	15,905

The following tables summarize quantitative information about the Company's Level 3 fair value measurements as of March 31, ~~2022,~~2023, December 31, ~~2021~~2022 and March 31, ~~2021:~~2022:

Quantitative Information about Recurring Level 3 Fair Value Measurements

Fair Value as of

(in thousands)

March 31, 2022

December 31, 2021

March 31, 2021

Valuation Method

Unobservable Input

Weighted Average

(in thousands)

March 31, 2023

December 31, 2022

March 31, 2022

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

15,905

11,618

11,649

Implied based on market prices

N/A

Convertible preferred securities (a)

15,410

16,278

15,905

Implied based on market prices

N/A

(a) The Company considers observable price changes and other additional market data available to estimate fair value, including additional capital raising, internal valuation models, progress towards key business milestones, and other relevant market data points.

Quantitative Information about Non-Recurring Level 3 Fair Value Measurements

~~(in thousands)~~

Fair Value as of ~~12/31/2021~~

(in thousands)

March 31, 2023

December 31, 2022

March 31, 2022

Valuation Method

Unobservable Input

Weighted Average

~~Frac sand assets~~ Grain Assets (a)

~~2,946~~—

9,000

—

Third party appraisal

Various

N/A

~~Real property~~Ethanol Plant Assets (b)

~~700~~$

41,673

~~Market approach~~$

—

Various

N/A

(a) The Company recognized impairment charges on ~~long lived related to its frac sand business.~~a Nebraska grain asset. The fair value of the ~~assets were~~asset was determined using ~~prior transactions and~~ third-party appraisals. These measures are considered Level 3 inputs on a nonrecurring basis.

(b) The Company recognized impairment charges on ~~certain Trade~~ELEMENT ethanol plant assets in Colwich, Kansas. The fair value of the assets was determined by a third-party consultant using a discounted cash flow method and ~~measured~~a market approach. Both of these methods were given probability weightings based on management's assessment of the ethanol plant's future operations to arrive at the fair value of the ethanol plant assets. The discounted cash flow model is determined by discounting the projected free cash flows using an appropriate discount rate. Key assumptions in the projections of future cash flows used in the consultant's model included input costs (corn, natural gas, etc.), production days, and co-product premiums. The market approach analyzed enterprise value to ethanol production capacity multiples for a group of guideline public companies as well as recent mergers and acquisition transactions. Using these multiples as a baseline, the consultant applied selected multiples to the ELEMENT plant production capacity to arrive at an indicated fair value. These measures are considered Level 3 inputs on a nonrecurring basis. ~~The fair value of the assets were determined using prior transactions in the local market and a recent sale of comparable Trade group assets held by the Company.~~

~~There were no non-recurring fair value measurements as of March 31, 2022 or March 31, 2021.~~

The fair value of the Company’s cash equivalents, accounts receivable and accounts payable approximate their carrying value as they are close to maturity.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 19

Table of Contents

11. Related Parties

In the ordinary course of business, and on an arm's length basis, the Company will enter into related party transactions with the minority shareholders of the Company's Renewables operations and several equity method investments that the Company holds, along with other related parties.

The following table sets forth the related party transactions entered into for the time periods presented:

Three months ended March 31,
(in thousands) 2022 2021
Sales revenues $ 86,149 $ 66,646
Purchases of product and capital assets 26,427 11,674


	Three months ended March 31,
(in thousands)		2023		2022
Sales of products		$	74,951	$	86,149
Purchases of products		15,702		26,427

(in thousands) March 31, 2022 December 31, 2021 March 31, 2021
Accounts receivable $ 18,539 $ 9,984 $ 11,844
Accounts payable 3,371 6,034 2,850


(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022
Accounts receivable	$	10,350	$	12,272	$	18,539
Accounts payable	2,800		7,070		3,371

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 20~~

~~Table of Contents~~

12. Segment Information

The Company’s operations include 3three reportable business segments that are distinguished primarily on the basis of products and services offered as well as the structure of management. The Trade business includes commodity merchandising and the operation of terminal grain elevator facilities. The Renewables business produces ethanol and co-products through its five co-owned and fully consolidated ethanol production facilities as well as purchases and sells ethanol and ethanol co-products. The Nutrient & Industrial (formerly Plant ~~Nutrient~~Nutrient) business manufactures and distributes plant nutrient products such as agricultural inputs, primarily ~~fertilizer, to dealers~~fertilizers and ~~farmers,~~turf care products along with ~~turf care~~industrial products such as deicers, dust abatement solutions and corncob-based products. The segment was rebranded in 2023 to reflect the portfolio of market offerings in the segment. The Other category includes other corporate level costs not attributable to an operating segment and intercompany eliminations between the segments. ~~See Note 14 for details of the divestiture of the Rail segment.~~

The segment information below includes the allocation of expenses shared by one or more operating segments. Although management believes such allocations are reasonable, the operating information does not necessarily reflect how such data might appear if the segments were operated as separate businesses. The Company does not have any customers who represent 10 percent or more of total ~~revenues from external customers.~~revenues.


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Revenues from external customers	Revenues from external customers						Revenues from external customers
Trade	Trade		$	3,084,681	$	1,982,508	Trade		$	2,877,780	$	3,084,681
Renewables	Renewables		683,231		442,959		Renewables		839,516		683,231
Plant Nutrient			210,042		169,252
Nutrient & Industrial							Nutrient & Industrial		163,942		210,042
Total	Total		$	3,977,954	$	2,594,719	Total		$	3,881,238	$	3,977,954


		Three months ended March 31,						Three months ended March 31,
(in thousands)	(in thousands)		2022		2021		(in thousands)		2023		2022
Income (loss) before income taxes from continuing operations	Income (loss) before income taxes from continuing operations						Income (loss) before income taxes from continuing operations
Trade	Trade		$	3,669	$	13,855	Trade		$	39,364	$	3,669
Renewables1			5,962		1,081
Plant Nutrient			10,743		8,523
Renewables (a)							Renewables (a)		(82,513)		5,962
Nutrient & Industrial							Nutrient & Industrial		(10,438)		10,743
Other	Other		(9,767)		(9,343)		Other		(11,414)		(9,767)
Income before income taxes from continuing operations			$	10,607	$	14,116
Income (loss) before income taxes from continuing operations							Income (loss) before income taxes from continuing operations		$	(65,001)	$	10,607

1(a) Includes income (loss) attributable to noncontrolling interests of ~~$0.4~~$(44.4) million and ~~$(1.8)~~$0.4 million for the ~~Three~~three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2120

Table of Contents

13. Commitments and Contingencies

Litigation activities

The Company is party to litigation, or threats thereof, both as defendant and plaintiff with some regularity, although individual cases that are material in size occur infrequently. As a defendant, the Company establishes reserves for claimed amounts that are considered probable and capable of estimation. If those cases are resolved for lesser amounts, the excess reserves are taken into income and, conversely, if those cases are resolved for larger than the amount the Company has accrued, the Company records additional expense. The Company believes it is unlikely that the results of its current legal proceedings for which it is the defendant, even if unfavorable, will be material. As a plaintiff, amounts that are collected can also result in sudden, non-recurring income.

Litigation results depend upon a variety of factors, including the availability of evidence, the credibility of witnesses, the performance of counsel, the state of the law, and the impressions of judges and jurors, any of which can be critical in importance, yet difficult, if not impossible, to predict. Consequently, cases currently pending, or future matters, may result in unexpected, and non-recurring losses, or income, from time to time. Finally, litigation results are often subject to judicial reconsideration, appeal and further negotiation by the parties, and as a result, the final impact of a particular judicial decision may be unknown for some time or may result in continued reserves to account for the potential of such post-verdict actions.

Specifically, the Company is party to a non-regulatory litigation claim, which is in response to penalties and fines paid to regulatory entities by a previously unconsolidated subsidiary in 2018 for the settlement of matters which focused on certain trading activity. While the Company believes it has meritorious defenses against the suit, the ultimate resolution of the matter could result in a loss in excess of the amount accrued. Given the status of the claim, the Company does not believe the excess, net of the acquisition-related indemnity, is material.

The Andersons Marathon Holdings LLC ("TAMH") received a Pre-Filing Negotiation Offer from the United States Environmental Protection Agency ("U.S. EPA") regarding the ethanol facilities owned by TAMH. The Company owns 50.1% of TAMH, which is a consolidated subsidiary of the Company. The U.S. EPA is investigating alleged recordkeeping and reporting violations under the Emergency Planning and Community Right-to-Know Act. The Company is cooperating with the U.S. EPA. The Company does not believe that any loss from this matter would have a material impact on its operations or financial condition, although the Company is unable to predict what action might be taken in the future by the U.S. EPA regarding this matter.

~~The~~ estimated losses for all other outstanding claims that are considered reasonably possible are not material.

14. ~~Discontinued Operations~~Subsequent Events

On ~~August 16, 2021, the Company~~April 3, 2023, The Andersons, Inc. entered into ~~a definitive agreement under~~an unsecured Term Loan Agreement (the "Loan Agreement"). The Loan Agreement provides for an 8-year loan in the amount of $100 million, with quarterly principal and interest payments. The Loan Agreement will bear interest at variable rates, which are based on the Company sold the assets of the Company’s Rail Leasing business for a cash purchase price of approximately $543.1 million. In conjunction with the sale of the Rail Leasing business, the Company announced its intent to divest the remaining pieces of the Rail Leasing business and the Rail Repair business.Secured Overnight Financing Rate ("SOFR") plus an applicable spread.

~~Starting~~On April 18, 2023, ELEMENT was placed into receivership. ELEMENT is currently in an extended maintenance shutdown and future operating decisions will be made by the court-appointed receiver. As ELEMENT is consolidated under a VIE model, being placed into receivership led to a VIE reconsideration event where the Company expects to no longer be deemed to be the primary beneficiary of ELEMENT. As a result, the entity will be deconsolidated in the ~~third~~second quarter of ~~2021, substantially all of the assets~~2023 and ~~liabilities of our Rail business were classified as discontinued operations~~is expected to result in ~~the accompanying Condensed Consolidated Balance Sheets.~~a gain on deconsolidation in an amount unknown at this time.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 22

~~Table of Contents~~

The table below summarizes the results of the Rail Leasing business and the Rail Repair business for the three months ended March 31, 2022 and 2021 which are reflected in the Consolidated Statements of Operations as discontinued operations.

Three months ended March 31,
(in thousands) 2022 2021
Sales and merchandising revenues $ 13,115 $ 41,010
Cost of sales and merchandising revenues 11,071 31,739
Gross profit 2,044 9,271
Operating, administrative and general expenses 1,379 2,874
Interest expense, net — 3,180
Other income, net: 73 1,674
Income from discontinued operations before income taxes 738 4,891
Income tax provision 1,292 1,384
Income from discontinued operations, net of income taxes $ (554) $ 3,507

~~The following table summarizes the assets and liabilities which are classified as discontinued operations at March 31, 2022, December 31, 2021 and March 31, 2021.~~

(in thousands) March 31,
2022 December 31,
2021 March 31,
2021
Assets
Current assets:
Accounts receivable, net $ 11,424 $ 12,643 $ 22,607
Inventories 7,119 6,739 7,424
Other current assets 1,712 1,503 7,105
Current assets held-for-sale 20,255 20,885 37,136
Other assets:
Rail assets leased to others, net 3,574 458 580,599
Property, plant and equipment, net 17,375 17,280 18,319
Goodwill 4,167 4,167 4,167
Other intangible assets, net — 24 2,412
Right of use assets, net 19,918 20,999 20,836
Other assets, net 230 241 2,895
Total non-current assets held-for-sale 45,264 43,169 629,228
Total assets held-for-sale $ 65,519 $ 64,054 $ 666,364
Liabilities
Current liabilities:
Trade and other payables $ 2,864 $ 2,546 $ 4,031
Customer prepayments and deferred revenue — — 2,239
Current maturities of long-term debt — — 7,113
Current operating lease liabilities 4,235 4,672 6,561
Accrued expenses and other current liabilities 3,101 6,161 6,418
Total current liabilities held-for-sale 10,200 13,379 26,362
Long-term lease liabilities 14,738 16,119 16,035
Long-term debt, less current maturities — — 29,137
Non-current liabilities held-for-sale 14,738 16,119 45,172
Total liabilities held-for-sale $ 24,938 $ 29,498 $ 71,534

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 23~~

~~Table of Contents~~

~~The following table summarizes cash flow data relating to discontinued operations for the three months ended March 31, 2022 and 2021:~~

Three months ended March 31,
(in thousands) 2022 2021
Depreciation and amortization $ — $ 8,887
Capital expenditures (3,284) (2,913)
Proceeds from sale of assets 248 5,383
Non-cash operating activities - Gain on sale of railcars — (2,717)
Non-cash investing activities - capital expenditures, consisting of unpaid capital expenditure liabilities at period end — (110)

~~15. Subsequent Events~~

On May 3, 2022, the Company entered into a definitive agreement to sell substantially all of the remaining assets and certain liabilities of the Company's Rail Repair business. The sale is expected to close later in 2022.

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 24~~21

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

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. Such factors include, but are not limited to, the effects ~~on our business from the COVID-19 pandemic~~of economic, weather and ~~the pace of recovery from the pandemic, economic and political~~agricultural conditions, regulatory conditions, competition globally and in the markets ~~we serve including~~the Company serves, the ongoing economic impacts from the ~~conflict~~war in Ukraine, fluctuations in cost and availability of commodities, ~~weather and agricultural conditions, governmental regulations,~~ the effectiveness of ~~our~~the Company's internal control over financial reporting and the unpredictability of existing and possible future litigation. However, it is not possible to predict or identify all such factors. The reader is urged to carefully consider these risks and others, including those risk factors listed under Item 1A of the ~~2021~~2022 Form ~~10-K and under Item 1A in this report.~~10-K. 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 management believes that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Critical Accounting Policies and Estimates

Our critical accounting policies and critical accounting estimates, as described in our ~~2021~~2022 Form 10-K, have not materially changed through the first quarter of ~~2022.~~2023.

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. ~~Due to the Rail segment being presented as discontinued operations, the Company has excluded Rail from the following discussions of financial condition and results of operations.~~

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 agricultural 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 greater emphasis should be placed on changes in Gross profit.

The Company has considered the potential impact that the book value of the Company’s total shareholders’ equity briefly exceeded the Company’s market capitalization at the beginning of the first quarter for impairment indicators. Management ultimately concluded that an impairment triggering event had not occurred. The Company believes that the January share price was not an accurate reflection of its current value as conditions are currently strong in the agriculture space with a positive long-term outlook. Management believes that the market’s impact on the Company’s equity value does not actually reflect the impact of these external factors on the Company. As a result of prior period tests, reviews of current operating results and other relevant market factors, the Company concluded that no impairment trigger existed as of March 31, 2023.

Trade

The Trade segment’s first quarter operating results ~~decreased~~improved from the prior year as ~~grain futures prices rose sharply as~~ the ~~war~~segment benefited from good elevation margins in ~~Ukraine continues to disrupt~~its assets, and strong merchandising results across the ~~agricultural commodity supply chain. The increases~~portfolio. Its well-positioned animal feed ingredients and organic food and specialty inventories also generated good margins, particularly in ~~futures prices resulted~~its newly acquired ingredients business based in Canada. All three lines of business within the segment exceeded the first quarter of prior year, which was negatively impacted by significant domestic basis depreciation for the quarter, despite the strong performance in the Company's recently added international merchandising business. Additionally, good first quarter results in propane merchandising did not match the strong performance from the unseasonably frigid weather experienced by the central U.S. in the first quarteras a result of the ~~prior year.~~war in Ukraine.

Agricultural inventories on hand were ~~188.9~~99.6 million and ~~124.9~~188.9 million bushels at March 31, ~~2022~~2023 and March 31, ~~2021,~~2022, respectively. These bushels consist of inventory held at company-owned or leased facilities, transload inventory, in-transit inventory, and third-party held inventory. Total Trade storage space capacity at ~~company owned~~company-owned or leased facilities, including temporary pile storage, was approximately ~~185~~180 million bushels at March 31, ~~2022 compared~~2023, which was comparable to ~~202 million bushels at March 31, 2021.~~the prior year.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2522

Table of Contents

~~Capitalizing on~~As the ~~drop~~spring planting season gets underway in the Midwest, commodity prices have moderated from the highs of last spring but stocks remain relatively low from a historical perspective. With a balanced portfolio of merchandising and grain ~~basis values, Trade has accumulated~~assets, the Company is well-positioned to optimize both volatility and crop dislocation as well as a ~~strong inventory~~potential shift with larger production and purchase book at good values as it looks ahead to the remainder of 2022. Planting outlook for the Eastern Grain Belt is expected to ramp up quickly, despite a slow start. Continued merchandising opportunities are expected through the remainder of the year as global stocks are not projected to recover even with an excellent harvest. Outlook for the grain elevator assets is improved with storage income earned on wheat inventory. Expected basis appreciation into harvest should drive improved elevation margins.carry markets.

Renewables

The Renewables segment's first quarter ~~income from operations increased~~operating results decreased from the prior year as ~~margins improved across all ethanol plants and~~ the ~~strength in co-products continued. Also,~~Company took an impairment charge on the ~~third-party trading of ethanol, feed ingredients and renewable feedstocks more than doubled~~ELEMENT joint venture, which was placed into receivership following the ~~first quarter~~end of the ~~prior year. Partially offsetting these two factors was an unrealized mark-to-market adjustment of approximately $8.3 million.~~

~~Industry fundamentals are improving as we expect increased seasonal demand along with production declines~~quarter. Ethanol crush margins were challenged moving into the year, but rallied late in the quarter during the spring maintenance season, as driving demand has picked up and ~~increases~~corn prices have moderated. The merchandising businesses including renewable diesel feedstocks continue to deliver solid results, but were impacted by lower values, partially due to delays in ~~exports. Ethanol stocks~~renewable diesel plant startups.

Our eastern corn belt production facilities remain ~~high compared to last year's very low levels, but spot~~well-positioned for corn supply and ethanol crush margins have ~~improved heading into~~strengthened further after the ~~second~~close of the quarter. Renewable diesel production capacity should continue to increase leading to further demand and growth in our feedstock merchandising business.

Ethanol and related co-products volumes for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were as follows:


	Three months ended March 31,
(in thousands)		2023	2022
Ethanol (gallons shipped)		186,566	197,318
E-85 (gallons shipped)		9,519	6,715
Vegetable oils (pounds shipped) (a)		261,655	163,920
DDG (tons shipped) (b)		529	501

Three months ended March 31,
(in thousands) 2022 2021
Ethanol (gallons shipped) 197,318 172,212
E-85 (gallons shipped) 6,715 7,890
Corn oil (pounds shipped) 110,321 47,947
DDG (tons shipped)* 501 442
(a) Includes corn oil, soybean oil, and other fats, oils, and greases.

*(b) DDG tons shipped converts wet tons to a dry ton equivalent amount.

~~Plant~~ Nutrient & Industrial

The ~~Plant~~ Nutrient & Industrial segment's first quarter operating results ~~increased~~decreased from the prior period. Tons sold across all product lines were down period over period, however, the lower volumes were offset by significant margin increases. The most significant margin improvements came from the Specialty Liquids product lines and the low-salt starters in particular. While sales volumes for most agricultural fertilizers are depressed from therecord prior year results. Nutrient prices continued to decline during the quarter which led customers to delay purchases in the current year. In contrast, nutrient prices rose to historical levels after the onset of the war in Ukraine in 2022 leading to record first quarter results in the segment. With strong farmer income and ~~supplies remain tight,~~planted acres anticipated to be high, second quarter volumes are expected to improve, but some of the ~~Company believes our inventory~~margin decline is ~~well positioned through the spring application season.~~not likely to be recovered.

Storage capacity at our Ag Supply Chain and Specialty Liquids facilities, including leased storage, was approximately 447 thousand tons for dry nutrients and approximately ~~513~~512 thousand tons for liquid nutrients at March 31, ~~2022,~~2023, which is similar to the prior year.

Tons of product sold for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three months ended March 31,				Three months ended March 31,
(in thousands)	(in thousands)		2022	2021	(in thousands)		2023	2022
Ag Supply Chain	Ag Supply Chain		157	222	Ag Supply Chain		170	157
Specialty Liquids	Specialty Liquids		92	100	Specialty Liquids		82	92
Engineered Granules	Engineered Granules		107	157	Engineered Granules		63	107
Total tons	Total tons		356	479	Total tons		315	356

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 include a variety of corncob-based products and facilities that primarily manufacture granulated dry products for use in specialty turf and agricultural applications.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2623

Table of Contents

Other

Our “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.

Comparison of the three months ended March 31, 2023 with the three months ended March 31, 2022 including a reconciliation of GAAP to non-GAAP measures:


	Three months ended March 31, 2023
(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	$	2,877,780	$	839,516	$	163,942	$	—	$	3,881,238
Cost of sales and merchandising revenues	2,760,602		823,713		148,912		—		3,733,227
Gross profit	117,178		15,803		15,030		—		148,011
Operating, administrative and general expenses	71,980		8,904		24,132		12,219		117,235
Asset impairment	—		87,156		—		—		87,156
Interest expense (income), net	11,817		3,097		2,182		(471)		16,625

Other income, net	5,983		841		846		334		8,004
Income (loss) before income taxes from continuing operations	$	39,364	$	(82,513)	$	(10,438)	$	(11,414)	$	(65,001)
Income (loss) before income taxes attributable to the noncontrolling interests	—		(44,367)		—		—		(44,367)
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	39,364	$	(38,146)	$	(10,438)	$	(11,414)	$	(20,634)


	Three months ended March 31, 2022
(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	$	3,084,681	$	683,231	$	210,042	$	—	$	3,977,954
Cost of sales and merchandising revenues	3,017,062		668,040		173,317		—		3,858,419
Gross profit	67,619		15,191		36,725		—		119,535
Operating, administrative and general expenses	59,543		7,890		25,325		9,229		101,987

Interest expense (income), net	8,187		1,767		1,461		(556)		10,859

Other income (expense), net	3,780		428		804		(1,094)		3,918
Income (loss) before income taxes from continuing operations	$	3,669	$	5,962	$	10,743	$	(9,767)	$	10,607
Income (loss) before income taxes attributable to the noncontrolling interests	—		447		—		—		447
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	3,669	$	5,515	$	10,743	$	(9,767)	$	10,160

The Company uses 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 Income (loss) before income taxes attributable to the Company from continuing operations is a useful measure of the Company’s performance because it provides investors additional information about the Company's operations allowing evaluation of underlying business performance and 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 amounts reported under GAAP.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2724

Table of Contents

Trade

Operating results for the Trade segment increased by $35.7 million from the prior year. Sales and merchandising revenues decreased by $206.9 million and cost of sales and merchandising revenues decreased by $256.5 million for an increased gross profit impact of $49.6 million. The decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be equally attributed to decreases in both commodity prices and volumes, as the war in Ukraine resulted in sharp price increases in the prior year and the rising interest rate environment in the current year has led to closer monitoring of working capital levels resulting in lower volumes of commodities traded. The $49.6 million increase in gross profit was mainly related to the performance of both the assets and merchandising businesses. The asset-based business contributed approximately $24 million to gross profit as it recorded approximately $17 million worth of insurance proceeds and receivables during the quarter from a fire at a Michigan grain asset in December of 2022, combined with the basis depreciation triggered by the war in Ukraine in the prior year that did not recur in 2023. The merchandising business contributed approximately $20 million to gross profit as well-positioned inventories generated strong margins.

Operating, administrative and general expenses increased by $12.4 million from the same period of prior year. The increase from the prior year is primarily related to approximately $6.2 million of higher labor, benefits and incentives, with about half from business growth and half from wage inflation. Trade also incurred an additional $3.5 million in insurable clean-up costs in the current quarter related to a fire at a Michigan grain asset.

Interest expense increased by $3.6 million due to rising interest rates on the Company's short-term line of credit compared to the prior year.

Other income, net increased by $2.2 million from the same period of 2022. The increase was primarily attributable to foreign currency losses of $1.6 million that did not recur in 2023.

Renewables

Operating results for Renewables decreased by $43.7 million from the same period of prior year. Sales and merchandising revenues increased by $156.3 million and cost of sales and merchandising revenues increased by $155.7 million compared to prior year. As a result, gross profit was comparable to the prior year. The vast majority of the increase to sales and merchandising revenues and cost of sales and merchandising revenues is the result of increased ethanol and renewable feedstock volumes as the price of these commodities were consistent with the prior period. Although gross profit remained consistent from the prior period, the ethanol plants and third-party merchandising businesses performed slightly lower than prior year from weaker ethanol crush margins and higher input costs which was offset by an improvement of unrealized mark-to-market adjustments from the prior year.

Operating, administrative and general expenses increased by $1.0 million from the prior year as a result of increased labor expenses and higher contracted services costs.

An asset impairment charge of $87.2 million related to the ELEMENT ethanol plant in Colwich, Kansas was recorded in the current year. As ELEMENT is a consolidated subsidiary of the Company, the entire impairment charge is represented in Asset impairment. The portion of the charge attributable to the noncontrolling interest is approximately $44.4 million which is captured in Loss before income taxes attributable to the noncontrolling interests within the Condensed Consolidated Statements of Operations.

Interest expense increased by $1.3 million due to rising interest rates on the Company's short-term line of credit compared to the prior year.

Nutrient & Industrial

Operating results for the Nutrient & Industrial segment decreased by $21.2 million compared to record results in the same period of the prior year. Sales and merchandising revenues decreased $46.1 million and cost of sales and merchandising revenues decreased by $24.4 million resulting in decreased gross profit of $21.7 million. The decrease in sales and merchandising revenues and cost of sales and merchandising revenues was mainly due to the reset of fertilizer prices from the record high prices resulting from an already tight supply market and exaggerated by the war in Ukraine in the first quarter of 2022. In addition to a decrease in fertilizer prices of almost 60%, volumes are also down approximately 10% as customers continue to be patient making purchases in a market of falling prices and wet weather through the first quarter of 2023. Gross profit decreased year-over-year by approximately $16.8 million due to margin decreases and $4.9 million from decreases in sales volumes.

The Andersons, Inc. | Q1 2023 Form 10-Q | 25

Table of Contents

Operating, ~~Results~~

~~Comparison of the three months ended March 31, 2022 with the three months ended March 31, 2021 including a reconciliation of GAAP to non-GAAP measures:~~

Three months ended March 31, 2022
(in thousands) Trade Renewables Plant Nutrient Other Total
Sales and merchandising revenues $ 3,084,681 $ 683,231 $ 210,042 $ — $ 3,977,954
Cost of sales and merchandising revenues 3,017,062 668,040 173,317 — 3,858,419
Gross profit 67,619 15,191 36,725 — 119,535
Operating, administrative and general expenses 59,543 7,890 25,325 9,229 101,987
Interest expense (income), net 8,187 1,767 1,461 (556) 10,859
Equity in earnings (losses) of affiliates, net (244) — — — (244)
Other income (expense), net 4,024 428 804 (1,094) 4,162
Income (loss) before income taxes from continuing operations $ 3,669 $ 5,962 $ 10,743 $ (9,767) $ 10,607
Income (loss) before income taxes attributable to the noncontrolling interests — 447 — — 447
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations $ 3,669 $ 5,515 $ 10,743 $ (9,767) $ 10,160

Three months ended March 31, 2021
(in thousands) Trade Renewables Plant Nutrient Other Total
Sales and merchandising revenues $ 1,982,508 $ 442,959 $ 169,252 $ — $ 2,594,719
Cost of sales and merchandising revenues 1,909,951 434,476 136,851 — 2,481,278
Gross profit 72,557 8,483 32,401 — 113,441
Operating, administrative and general expenses 56,931 6,656 23,399 10,012 96,998
Interest expense (income), net 7,051 2,073 1,066 (201) 9,989
Equity in earnings (losses) of affiliates, net 1,794 — — — 1,794
Other income (expense), net 3,486 1,327 587 468 5,868
Income (loss) before income taxes from continuing operations $ 13,855 $ 1,081 $ 8,523 $ (9,343) $ 14,116
Income (loss) before income taxes attributable to the noncontrolling interests — (1,845) — — (1,845)
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations $ 13,855 $ 2,926 $ 8,523 $ (9,343) $ 15,961

~~Trade~~

Operating results for the Trade decreased by $10.2 million compared to the results of the same period last year. Sales and merchandising revenues increased by $1,102.2 million and Cost of sales and merchandising revenues increased by $1,107.1 million for a decreased gross profit impact of $4.9 million. Most of the increase to Sales and merchandising revenues and Cost of sales and merchandising revenues was a result of increased commodity prices from the prior year. The net decrease in Gross profit was driven by domestic corn and soybean basis depreciation from the increases in futures prices along with exceptional propane merchandising results from the unseasonably frigid weather experienced by the central U.S. in the first quarter of the prior year that did not recur in the current period.

~~Operating,~~ administrative and general expenses ~~increased~~decreased by ~~$2.6 million. The increase from~~$1.2 million mainly due to reduced incentive compensation when compared to the record first quarter results in the prior ~~year is primarily related to higher labor costs as a result of new locations opened in the second half of 2021.~~year.

Interest expense increased by ~~$1.1~~$0.7 million due to ~~higher group borrowings~~due to rising interest rates on the Company's short-term line of credit compared to the prior year.

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 28~~

~~Table of Contents~~

~~Renewables~~

Operating results for Renewables increased by $2.6 million from the same period last year. Sales and merchandising revenues increased by $240.3 million and Cost of sales and merchandising revenues increased by $233.6 million compared to prior year. As a result, Gross profit increased by $6.7 million compared to prior year. The vast majority of the increase to Sales and merchandising revenues and Cost of sales and merchandising revenues is the result of increased commodity prices. The net increase to Gross profit in the current period results reflect improved Board crush margins across all ethanol plants, improved co-product values and strong merchandising margins. Partially offsetting the factors above was a mark-to-market adjustment of $8.3 million.

~~Operating, administrative and general expenses increased by $1.2 million primarily due to higher labor and utility costs from the prior year.~~

~~Plant Nutrient~~

Operating results for the Plant Nutrient segment increased by $2.2 million compared to the same period in the prior year. Sales and merchandising revenues increased $40.8 million and Cost of sales and merchandising revenues increased by $36.5 million resulting in increased Gross profit of $4.3 million. Both Sales and merchandising revenues and Cost of sales and merchandising revenues were higher due to higher fertilizer prices from the prior year. Gross profit improved year over year due to strong margins from well-positioned inventory in a tight supply marke~~t. The most significant margin improvements came from specialty liquids product lines, specifically low-salt starters.~~

~~Operating, administrative and general expenses increased by $1.9 million due to increased labor costs from the prior year.~~

Other

~~Operating results declined~~Other expenses increased by ~~$0.4~~$1.6 million from the same period last year. The ~~decrease~~increase in expenses was primarily driven by $1.2 million of higher health insurance claims from the ~~prior year was due to interest received on a tax refund as a result of~~Company's self-funded medical insurance plan in the ~~CARES Act that did not recur in~~ current year.

Income Taxes

InFor the ~~first quarter~~three months ended March 31, 2023, the Company recorded an income tax benefit from continuing operations of $5.9 million. The Company's effective tax rate was 9.1% on a loss before taxes from continuing operations of $65.0 million. The difference between the 9.1% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes and nondeductible compensation.During the three months ended March 31, 2023, a discrete income tax benefit of $12.0 million was recorded on a loss before income taxes of $94.7 million related to the impairment charge associated with ELEMENT and current year operations as the Company is unable to reliably estimate an ordinary loss for the year due to debt and operational constraints at ELEMENT.

For the three months ended March 31, 2022, the Company recorded income tax expense from continuing operations of $4.1 million. The Company's effective tax rate ~~for 2022~~ was 38.7% on ~~Income before~~ income ~~taxes~~ from continuing operations of $10.6 million. The ~~difference between the 38.7%~~ effective tax rate ~~and~~differs from the U.S. federal statutory tax rate of 21.0% ~~is primarily attributable to primarily attributable~~due to the tax impact of certain discrete derivatives and hedging activities, state and local income taxes, and nondeductible compensation offset by the effect of ~~non-controlling~~noncontrolling interest and Federal Research and Development Credits.

InThe Company’s subsidiary partnership returns are under federal tax examination by the ~~first quarter~~Internal Revenue Service (“IRS”) for the tax years 2015 through 2018, respectively. 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 ~~2021, the Company recorded~~these examinations could change our unrecognized tax benefits and favorably impact income tax expense ~~from continuing operations~~by a range of ~~$4.4~~$3.5 million to $8.7 million. ~~The Company’s effective rate for~~ ~~2021~~ was 30.9% on Income before income taxes from continuing operations of $14.1 million. The difference between the 30.9% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of state and local income taxes, U.S. income taxes on foreign earnings, and nondeductible compensation.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 2926

Table of Contents

Liquidity and Capital Resources

Working Capital

At March 31, ~~2022,~~2023, the Company had working capital from continuing operations of ~~$867.9~~$938.2 million, an increase of ~~$359.9~~$70.3 million from the prior year. This increase was attributable to changes in the following components of current assets from continuing operations and current liabilities from continuing operations:


(in thousands)	(in thousands)	March 31, 2022		March 31, 2021		Variance		(in thousands)	March 31, 2023		March 31, 2022		Variance
Current Assets from Continuing Operations:	Current Assets from Continuing Operations:							Current Assets from Continuing Operations:
Cash and cash equivalents	Cash and cash equivalents	$	36,381	$	35,393	$	988	Cash and cash equivalents	$	70,853	$	36,381	$	34,472
Accounts receivable, net	Accounts receivable, net	1,050,259		677,118		373,141		Accounts receivable, net	1,125,071		1,050,259		74,812
Inventories	Inventories	1,950,303		1,287,637		662,666		Inventories	1,551,101		1,950,303		(399,202)
Commodity derivative assets – current	Commodity derivative assets – current	769,916		317,939		451,977		Commodity derivative assets – current	222,036		769,916		(547,880)
Other current assets	Other current assets	113,589		81,666		31,923		Other current assets	81,407		113,589		(32,182)
Total current assets from continuing operations	Total current assets from continuing operations	$	3,920,448	$	2,399,753	$	1,520,695	Total current assets from continuing operations	$	3,050,468	$	3,920,448	$	(869,980)
Current Liabilities from Continuing Operations:	Current Liabilities from Continuing Operations:							Current Liabilities from Continuing Operations:
Short-term debt	Short-term debt	1,449,768		915,205		534,563		Short-term debt	638,210		1,449,768		(811,558)
Trade and other payables	Trade and other payables	741,124		534,660		206,464		Trade and other payables	768,872		741,124		27,748
Customer prepayments and deferred revenue	Customer prepayments and deferred revenue	384,723		161,696		223,027		Customer prepayments and deferred revenue	309,546		384,723		(75,177)
Commodity derivative liabilities – current	Commodity derivative liabilities – current	216,836		91,448		125,388		Commodity derivative liabilities – current	107,983		216,836		(108,853)
Current maturities of long-term debt	Current maturities of long-term debt	54,158		42,824		11,334		Current maturities of long-term debt	85,567		54,158		31,409
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	205,958		145,921		60,037		Accrued expenses and other current liabilities	202,133		205,958		(3,825)
Total current liabilities from continuing operations	Total current liabilities from continuing operations	$	3,052,567	$	1,891,754	$	1,160,813	Total current liabilities from continuing operations	$	2,112,311	$	3,052,567	$	(940,256)
Working Capital from Continuing Operations	Working Capital from Continuing Operations	$	867,881	$	507,999	$	359,882	Working Capital from Continuing Operations	$	938,157	$	867,881	$	70,276

Current assets from continuing operations as of March 31, ~~2022 increased $1,520.7~~2023 decreased $870.0 million in comparison to those as of March 31, ~~2021.~~2022. This ~~increase~~decrease was noted in mainly ~~accounts receivable,~~in inventories and current commodity derivative assets. The ~~increases~~decreases in those accounts can largely be attributed to the stabilization of agricultural commodity prices in the current year in comparison to the significant increases in the prices of agricultural commodities, including fertilizer, that the Company transacts in the ordinary course of business ~~from~~in the same period of the prior year.

Current liabilities from continuing operations ~~increased $1,160.8~~decreased $940.3 million ~~across all financial statement~~from the prior year mainly due to the decreased utilization of the Company's short-term revolving credit line. The decreased use of the short-term revolving credit line ~~items when~~is due to the stabilization of commodity prices in the year compared to the ~~prior year. The~~severe increase in commodity prices in the same period of the prior year, as well as a strategic focus on managing short-term debt isin light of the result of higher working capital needs and driven by the significant increase in agricultural commodity prices from the prior year. The increase in trade and other payables, customer prepayments and deferred revenue, and current commodity derivative liabilities are also the result of increasing agricultural commodity prices.rising interest rate environment.

Sources and Uses of Cash


		Three Months Ended					Three Months Ended
(in thousands)	(in thousands)	March 31, 2022		March 31, 2021		(in thousands)	March 31, 2023		March 31, 2022
Net cash used in operating activities	Net cash used in operating activities	$	(1,074,998)	$	(445,727)	Net cash used in operating activities	$	(333,535)	$	(1,074,998)
Net cash used in investing activities	Net cash used in investing activities	(24,921)		(15,730)		Net cash used in investing activities	(19,807)		(24,921)
Net cash provided by financing activities	Net cash provided by financing activities	919,757		467,762		Net cash provided by financing activities	308,817		919,757

Operating Activities

Our operating activities used cash of ~~$1,075.0~~$333.5 million and ~~$445.7~~$1,075.0 million in the first three months of ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~increase~~decrease in cash used was primarily due to the ~~increased~~decreased working capital needs ~~as discussed above,~~quarter over quarter driven by significant increases in agricultural commodity ~~prices.~~prices in the prior year. When the changes in operating assets and liabilities are removed, along with approximately $17.4 million in insurance proceeds and receivables for damaged inventory from a fire at a Michigan grain asset in December of 2022, cash provided by operating activities was ~~lower than~~consistent with the prior ~~year due to the timing of tax refunds and credits, as well as the sale of the rail leasing business.~~period.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3027

Table of Contents

Investing Activities

Investing activities used cash of ~~$24.9~~$19.8 million through the first three months of ~~2022~~2023 compared to ~~cash used of $15.7~~$24.9 million in the prior ~~year. The increase~~period. Although spending for the purchases of property, plant and equipment increased by approximately $5 million, cash used in investing activities decreased from the prior year ~~was a result of a modest increase in capital spending on continuing operations~~as the proceeds from the ~~prior year combined with net~~sale of legacy Rail assets, insurance proceeds and the proceeds from ~~sales occurring within~~ the ~~Rail segment~~sale of an investment were more than enough to offset the increased spending in ~~2021 that did not recur in the current quarter.~~property, plant and equipment.

We expect to invest approximately ~~$100 to~~ $125 million in property, plant and equipment in ~~2022 related to continuing operations.~~2023, with spending split evenly between growth projects and maintaining our current facilities.

Financing Activities

Financing activities provided cash of ~~$919.8~~$308.8 million and ~~$467.8~~$919.8 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. This ~~increase~~decrease from the prior year was due to the significant increase in agricultural commodity prices ~~from~~in the prior ~~period. Our~~period and the related need for short-term ~~debt balance of $1,449.8 million~~borrowings. Agricultural commodity prices have decreased in the current year and the Company is ~~very closely aligned to our balance of readily marketable inventories of $1,413.5 million as of March 31, 2022~~.operating in a much more stable pricing environment in 2023 which is putting much less pressure on the Company's short-term borrowings.

The Company is party to borrowing arrangements with a syndicate of banks that provide a total of ~~$2,031.4~~$1,991.8 million in ~~borrowings.~~borrowing capacity. Of the total capacity, ~~$375.4~~$341.7 million is non-recourse to the Company. As of March 31, ~~2022,~~2023, the Company had ~~$907.3~~$1,294.9 million available for borrowing with ~~$168.5~~$220.8 million of that total being non-recourse to the Company.

The Company paid ~~$6.1~~$6.3 million in dividends in the first three months of ~~2022~~2023 compared to ~~$5.8~~$6.1 million paid in the prior ~~year.~~period. The Company paid dividends of ~~$0.180~~$0.185 and ~~$0.175~~$0.18 per common share in January of ~~2022~~2023 and ~~2021,~~2022, respectively. On February ~~18, 2022,~~17, 2023, the Company declared a cash dividend of ~~$0.180~~$0.185 per common share payable on April ~~22, 2022~~24, 2023, to shareholders of record on April ~~1, 2022.~~3, 2023.

Certain of our long-term borrowings include covenants that, among other things, impose minimum levels of working capital and a minimum ratio of owner's equity. The Company has concluded that in relation to the $62.8 million non-recourse credit agreement associated with the ELEMENT operations, that ELEMENT was out of compliance with its working capital covenant as of January 31, 2023, and is also out of compliance with an owner's equity ratio covenant as of March 31, 2023. Additionally, ELEMENT did not make a required debt payment in February 2023, subsequently received a default notice from the lender on February 17, 2023, and was ultimately placed into receivership on April 18, 2023. As such, the Company continues to classify the total $62.8 million of non-recourse debt under the ELEMENT credit agreement as a current maturity of long-term debt as of March 31, 2023. The Company is in compliance with all other covenants as of March 31, 2023. In addition, certain of our long-term borrowings are collateralized by first mortgages on various facilities. Our non-recourse long-term debt that is currently classified in Current maturities of long-term debt in the Condensed Consolidated Balance Sheets as described above, is collateralized by ELEMENT plant assets.

Because the Company is a significant borrower 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 grain prices and/or unfavorable market conditions could require us to make additional margin deposits on our exchange traded futures contracts. Conversely, in periods of declining prices, the Company could receive a return of cash.

Management believes ~~our~~the Company's sources of liquidity will be adequate to fund ~~our~~ operations, capital expenditures and service ~~our~~ indebtedness.

At March 31, ~~2022,~~2023, the Company had standby letters of credit outstanding of ~~$4.0~~$38.6 million.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3128

Table of Contents

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For further information, refer to our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There were no material changes in market risk, specifically commodity and interest rate risk during the three months ended March 31, ~~2022.~~2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of March 31, ~~2022~~2023 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the first quarter of ~~2022,~~2023, identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3229

Table of Contents

Part II. Other Information

Item 1. Legal Proceedings

The Company is subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Except as described in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 13, “Commitments and Contingencies,” in the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.

The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.

Item 1A. Risk Factors

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the ~~2021~~2022 Form 10-K under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. The information presented below updates, and should be read in conjunction with, the risk factors in Part I, Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021. Except as presented below, there were no other significant changes in the Company’s risk factors during the quarter ended March 31, 2022.~~2022.

The Company faces risks related to international conflicts, such as the ongoing conflict between Russia and Ukraine, that may adversely impact the Company's financial condition or results of operations.

In late February of 2022, Russia initiated a military operation in Ukraine. The Black Sea region is a key international grain and fertilizer export market and the conflict between Russia and Ukraine could continue to disrupt supply and logistics, cause volatility in prices, and impact global margins due to increased commodity, energy, and input costs. While the Company does not have any assets or employees located in the Black Sea region, it does engage in business with parties operating in the region, including some grain originations directly from Ukrainian producers. The conflict could negatively affect our ability to secure product in this region and the credit worthiness of agricultural producers with which we do business. The Company currently does not purchase fertilizer directly from this region, however, the impact to the global fertilizer supply could put the Company’s ability to secure product at risk over time.

To the extent the conflict between Russia and Ukraine adversely affects our business, it may also have the effect of heightening other risks disclosed in Part I, “Item 1A. Risk Factors” in the Company's 2021 Annual Report on Form 10-K, any of which could materially and adversely affect the Company's financial condition and results of operations. However, due to the continually evolving nature of the conflict, the potential impact that the conflict could have on such risk factors, and others that cannot yet be identified, remains uncertain. The Company continues to monitor the conflict and assess alternatives to mitigate these risks.

~~The Andersons, Inc. | Q1 2022 Form 10-Q | 33~~

~~Table of Contents~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Periods
Total Number of Shares Purchased (1)
Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 2022 75,629 $ 38.73 — $ —
February 2022 — — — —
March 2022 10,137 38.49 — —
Total 85,766 $ 38.70 — $ 100,000,000


Periods	Total Number of Shares Purchased(a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b)






January 2023	82,728	$	34.30	49,351	$	85,608,170
February 2023	109,418	44.74		—	85,608,170
March 2023	12,133	45.63		—	85,608,170
Total	204,279	$	40.56	49,351	$	85,608,170

~~(1)~~(a) During the three months ended March 31, ~~2022,~~2023, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding ~~obligations.~~obligations along with common stock repurchased as a part of the Company's Repurchase Plan.

~~(2)~~(b) As of August 20, 2021, the Company was authorized to purchase up to $100 million of the Company’s common stock (the "Repurchase Plan") on or before August 20, 2024. As of March 31, ~~2022, none~~2023, $14.4 million of the $100 million available to repurchase shares had been utilized. The Repurchase Plan does not obligate the Company to acquire any specific number of shares. Under the Repurchase Plan, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

~~Item 4. Mine Safety Disclosure~~

The Company is committed to protecting the occupational health and well-being of each of our employees. Safety is one of our core values and as an organization strive to ensure that safety is the first priority for all employees. Our internal objective is to achieve zero injuries and incidents across the Company by focusing on proactively identifying needed prevention activities, establishing standards and evaluating performance to mitigate any potential loss to people, equipment, production and the environment. The Company has implemented employee training that is geared toward maintaining a high level of awareness and knowledge of safety and health issues in the work environment. Management believes that through these policies the Company has developed an effective safety management system.

Under the Dodd-Frank Act, each operator of a coal or other mine is required to include certain mine safety results within its periodic reports filed with the SEC. As required by the reporting requirements included in §1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, the required mine safety results regarding certain mining safety and health matters for each of our mine locations that are covered under the scope of the Dodd-Frank Act are included in Exhibit 95.1 of Item 6. Exhibits of this Quarterly Report on Form 10-Q.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3430

Table of Contents

Item 6. Exhibits



Exhibit Number						Description

10.1*10.01						Form of Restricted Share Unit Agreement

~~10.2~~10.02						~~INCREMENTAL TERM LOAN AMENDMENT TO CREDIT AGREEMENT (MARCH 2, 2022)~~Form of Performance Share Unit Agreement - Earnings Per Share

~~10.3~~10.03						~~INCREMENTAL TERM LOAN AMENDMENT TO CREDIT AGREEMENT (MARCH 9, 2022)~~Form of Performance Share Unit Agreement - Total Shareholder Return

~~10.4~~10.04						~~CREDIT AGREEMENT DATED AS OF JANUARY 11, 2019 AMONG THE ANDERSONS, INC., THE LENDERS, U.S. BANK NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT (AMENDED AS OF MARCH 28, 2022)~~Form of Restricted Share Unit - Non-Employee Directors Agreement

31.1*						Certification of the Chief Executive Officer under Rule 13(a)-14(a)/15d-14(a)

31.2*						Certification of the Chief Financial Officer under Rule 13(a)-14(a)/15d-14(a)

32.1**						Certifications Pursuant to 18 U.S.C. Section 1350

95.1*						~~Mine Safety Disclosure~~

101**						Inline XBRL Document Set for the Condensed Consolidated Financial Statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104**						Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

* Filed herewith
** Furnished herewith

Items 3, 4, and 5 are not applicable and have been ~~omitted~~omitted.

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3531

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



						THE ANDERSONS, INC.

Date: May ~~5, 2022~~4, 2023						/s/ Patrick E. Bowe
						Patrick E. Bowe
						President and Chief Executive Officer

Date: May ~~5, 2022~~4, 2023						/s/ Brian A. Valentine
						Brian A. Valentine
						Executive Vice President and Chief Financial Officer

The Andersons, Inc. | Q1 ~~2022~~2023 Form 10-Q | 3632


Periods	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)






January 2022	75,629	$	38.73	—	$	—
February 2022	—	—		—	—
March 2022	10,137	38.49		—	—
Total	85,766	$	38.70	—	$	100,000,000