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 06/30/~~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 ~~33,860,914~~33,752,186 common shares outstanding at July ~~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 and Si xSix months ended June 30 , ~~2022~~2023 and ~~2021~~2022			1
Condensed Consolidated Statements of Comprehensive Income – Three and Six months ended June 3 030 , ~~2022~~2023 and ~~2021~~2022			2
Condensed Consolidated Balance Sheets – ~~June~~Jun 3e 30 0, 2023, December 31, 2022 and June 30 , 2022 ~~December 31, 2021 and~~ ~~June~~ 3 0 ~~, 2021~~			3
Condensed Consolidated Statements of Cash Flows – Six months ended June 3 0 , ~~2022~~2023 and ~~2021~~2022			4
Condensed Consolidated Statements of Equity – Three and Si xSix months ended June 3 030 , ~~2022~~2023 and ~~2021~~2022			5
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2826
Item 3. Quantitative and Qualitative Disclosures about Market Risk			3837
Item 4. Controls and Procedures			3837
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3938
Item 1A. Risk Factors			3938
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4038
Item 5. Other Information			38
Item 6. Exhibits			4039

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 June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Sales and merchandising revenues	Sales and merchandising revenues	$	4,450,617	$	3,235,805	$	8,428,571	$	5,830,524	Sales and merchandising revenues	$	4,020,183	$	4,450,617	$	7,901,421	$	8,428,571
Cost of sales and merchandising revenues	Cost of sales and merchandising revenues	4,219,776		3,072,398		8,078,195		5,553,676		Cost of sales and merchandising revenues	3,798,246		4,219,776		7,531,473		8,078,195
Gross profit	Gross profit	230,841		163,407		350,376		276,848		Gross profit	221,937		230,841		369,948		350,376
Operating, administrative and general expenses	Operating, administrative and general expenses	112,559		105,560		214,546		202,558		Operating, administrative and general expenses	116,007		112,559		233,242		214,546
Asset impairment										Asset impairment	—		—		87,156		—
Interest expense, net										Interest expense, net	13,953		16,921		30,578		27,780

Interest expense, net		16,921		10,060		27,780		20,049
Other income, net:
Equity in earnings (losses) of affiliates, net		(6,034)		845		(6,278)		2,639

Other income, net	Other income, net	22,826		5,070		26,988		10,938		Other income, net	12,441		16,792		20,445		20,710
Income before income taxes from continuing operations	Income before income taxes from continuing operations	118,153		53,702		128,760		67,818		Income before income taxes from continuing operations	104,418		118,153		39,417		128,760
Income tax provision from continuing operations	Income tax provision from continuing operations	15,753		9,677		19,856		14,038		Income tax provision from continuing operations	21,732		15,753		15,848		19,856
Net income from continuing operations	Net income from continuing operations	102,400		44,025		108,904		53,780		Net income from continuing operations	82,686		102,400		23,569		108,904
Income (loss) from discontinued operations, net of income taxes		(739)		2,099		(1,294)		5,606
Loss from discontinued operations, net of income taxes										Loss from discontinued operations, net of income taxes	—		(739)		—		(1,294)
Net income	Net income	101,661		46,124		107,610		59,386		Net income	82,686		101,661		23,569		107,610
Net income attributable to noncontrolling interests		21,856		2,625		22,303		780
Net income (loss) attributable to noncontrolling interests										Net income (loss) attributable to noncontrolling interests	27,640		21,856		(16,727)		22,303
Net income attributable to The Andersons, Inc.	Net income attributable to The Andersons, Inc.	$	79,805	$	43,499	$	85,307	$	58,606	Net income attributable to The Andersons, Inc.	$	55,046	$	79,805	$	40,296	$	85,307

Average number of shares outstanding - basic	Average number of shares outstanding - basic	33,850		33,263		33,795		33,226		Average number of shares outstanding - basic	33,744		33,850		33,683		33,795
Average number of share outstanding - diluted	Average number of share outstanding - diluted	34,416		33,579		34,416		33,617		Average number of share outstanding - diluted	34,165		34,416		34,193		34,416

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	$	2.38	$	1.25	$	2.56	$	1.60	Continuing operations	$	1.63	$	2.38	$	1.20	$	2.56
Discontinued operations	Discontinued operations	(0.02)		0.06		(0.04)		0.16		Discontinued operations	—		(0.02)		—		(0.04)
		$	2.36	$	1.31	$	2.52	$	1.76		$	1.63	$	2.36	$	1.20	$	2.52
Diluted earnings (loss):	Diluted earnings (loss):									Diluted earnings (loss):
Continuing operations	Continuing operations	$	2.34	$	1.23	$	2.52	$	1.58	Continuing operations	$	1.61	$	2.34	$	1.18	$	2.52
Discontinued operations	Discontinued operations	(0.02)		0.07		(0.04)		0.16		Discontinued operations	—		(0.02)		—		(0.04)
		$	2.32	$	1.30	$	2.48	$	1.74		$	1.61	$	2.32	$	1.18	$	2.48

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 1

Table of Contents

The Andersons, Inc.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	101,661	$	46,124	$	107,610	$	59,386	Net income	$	82,686	$	101,661	$	23,569	$	107,610
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	517		(234)		358		(337)		Change in unrecognized actuarial loss and prior service cost	(189)		517		(377)		358
Foreign currency translation adjustments	Foreign currency translation adjustments	(5,679)		1,469		(5,581)		2,693		Foreign currency translation adjustments	2,669		(5,679)		3,436		(5,581)
Cash flow hedge activity	Cash flow hedge activity	6,697		(1,858)		19,119		7,883		Cash flow hedge activity	6,735		6,697		1,939		19,119
Other comprehensive income (loss)		1,535		(623)		13,896		10,239
Other comprehensive income										Other comprehensive income	9,215		1,535		4,998		13,896
Comprehensive income	Comprehensive income	103,196		45,501		121,506		69,625		Comprehensive income	91,901		103,196		28,567		121,506
Comprehensive income attributable to the noncontrolling interests		21,856		2,625		22,303		780
Comprehensive income (loss) attributable to the noncontrolling interests										Comprehensive income (loss) attributable to the noncontrolling interests	27,640		21,856		(16,727)		22,303
Comprehensive income attributable to The Andersons, Inc.	Comprehensive income attributable to The Andersons, Inc.	$	81,340	$	42,876	$	99,203	$	68,845	Comprehensive income attributable to The Andersons, Inc.	$	64,261	$	81,340	$	45,294	$	99,203

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 2

Table of Contents

The Andersons, Inc.

Condensed Consolidated Balance Sheets (Unaudited)


(In thousands)	(In thousands)	June 30, 2022		December 31, 2021		June 30, 2021		(In thousands)	June 30, 2023		December 31, 2022		June 30, 2022
Assets	Assets							Assets
Current assets:	Current assets:							Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	86,035	$	216,444	$	27,538	Cash and cash equivalents	$	96,293	$	115,269	$	86,035
Accounts receivable, net	Accounts receivable, net	1,141,167		835,180		702,869		Accounts receivable, net	1,030,271		1,248,878		1,141,167
Inventories (Note 2)	Inventories (Note 2)	1,618,326		1,814,538		904,924		Inventories (Note 2)	990,789		1,731,725		1,618,326
Commodity derivative assets – current (Note 5)	Commodity derivative assets – current (Note 5)	638,357		410,813		507,148		Commodity derivative assets – current (Note 5)	347,684		295,588		638,357
Current assets held-for-sale (Note 14)		18,627		20,885		28,555
Current assets held-for-sale								Current assets held-for-sale	—		2,871		18,627
Other current assets	Other current assets	70,367		74,468		63,266		Other current assets	72,228		71,622		70,367
Total current assets	Total current assets	3,572,879		3,372,328		2,234,300		Total current assets	2,537,265		3,465,953		3,572,879
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	105,222		117,137		125,731		Other intangible assets, net	89,605		100,907		105,222
Right of use assets, net	Right of use assets, net	50,233		52,146		42,330		Right of use assets, net	60,003		61,890		50,233
Other assets held-for-sale (Note 14)		24,298		43,169		620,745
Other assets held-for-sale								Other assets held-for-sale	—		—		24,298
Other assets, net	Other assets, net	91,758		69,068		70,879		Other assets, net	90,390		87,175		91,758
Total other assets	Total other assets	400,853		410,862		991,227		Total other assets	369,340		379,314		400,853

Property, plant and equipment, net (Note 3)	Property, plant and equipment, net (Note 3)	763,443		786,029		823,563		Property, plant and equipment, net (Note 3)	663,441		762,729		763,443
Total assets	Total assets	$	4,737,175	$	4,569,219	$	4,049,090	Total assets	$	3,570,046	$	4,607,996	$	4,737,175
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)	$	1,161,428	$	501,792	$	757,271	Short-term debt (Note 4)	$	102,752	$	272,575	$	1,161,428
Trade and other payables	Trade and other payables	772,996		1,199,324		543,503		Trade and other payables	641,376		1,423,633		772,996
Customer prepayments and deferred revenue	Customer prepayments and deferred revenue	184,154		358,119		55,943		Customer prepayments and deferred revenue	189,947		370,524		184,154
Commodity derivative liabilities – current (Note 5)	Commodity derivative liabilities – current (Note 5)	185,903		128,911		90,366		Commodity derivative liabilities – current (Note 5)	251,101		98,519		185,903
Current maturities of long-term debt (Note 4)	Current maturities of long-term debt (Note 4)	53,951		32,256		50,069		Current maturities of long-term debt (Note 4)	27,511		110,155		53,951
Current liabilities held-for-sale (Note 14)		7,314		13,379		25,185

Current liabilities held-for-sale								Current liabilities held-for-sale	—		—		7,314
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	211,830		230,148		168,221		Accrued expenses and other current liabilities	180,552		245,916		211,830
Total current liabilities	Total current liabilities	2,577,576		2,463,929		1,690,558		Total current liabilities	1,393,239		2,521,322		2,577,576
Long-term lease liabilities	Long-term lease liabilities	28,929		31,322		27,134		Long-term lease liabilities	34,435		37,147		28,929
Long-term debt, less current maturities (Note 4)	Long-term debt, less current maturities (Note 4)	563,447		600,487		837,609		Long-term debt, less current maturities (Note 4)	576,489		492,518		563,447
Deferred income taxes	Deferred income taxes	63,383		71,127		173,212		Deferred income taxes	57,030		64,080		63,383
Other long-term liabilities held-for-sale (Note 14)		3,113		16,119		43,993
Other long-term liabilities held-for-sale								Other long-term liabilities held-for-sale	—		—		3,113
Other long-term liabilities	Other long-term liabilities	83,521		78,531		51,620		Other long-term liabilities	70,371		63,160		83,521
Total liabilities	Total liabilities	3,319,969		3,261,515		2,824,126		Total liabilities	2,131,564		3,178,227		3,319,969
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 6/30/2022, 12/31/2021 and 6/30/2021, 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	378,740		368,595		357,606		Additional paid-in-capital	380,376		385,248		378,740
Treasury shares, at cost (62, 11 and 111 shares at 6/30/2022, 12/31/2021 and 6/30/2021, respectively)		(2,313)		(263)		(2,650)
Accumulated other comprehensive income (loss)		15,090		1,194		(1,837)
Treasury shares, at cost (270, 446 and 62 shares at 6/30/2023, 12/31/2022 and 6/30/2022, respectively)								Treasury shares, at cost (270, 446 and 62 shares at 6/30/2023, 12/31/2022 and 6/30/2022, respectively)	(10,270)		(15,043)		(2,313)
Accumulated other comprehensive income								Accumulated other comprehensive income	25,482		20,484		15,090
Retained earnings	Retained earnings	775,495		702,759		669,241		Retained earnings	835,256		807,770		775,495
Total shareholders’ equity of The Andersons, Inc.	Total shareholders’ equity of The Andersons, Inc.	1,167,154		1,072,425		1,022,500		Total shareholders’ equity of The Andersons, Inc.	1,230,986		1,198,601		1,167,154
Noncontrolling interests	Noncontrolling interests	250,052		235,279		202,464		Noncontrolling interests	207,496		231,168		250,052
Total equity	Total equity	1,417,206		1,307,704		1,224,964		Total equity	1,438,482		1,429,769		1,417,206
Total liabilities and equity	Total liabilities and equity	$	4,737,175	$	4,569,219	$	4,049,090	Total liabilities and equity	$	3,570,046	$	4,607,996	$	4,737,175

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 3

Table of Contents

The Andersons, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


		Six months ended June 30,					Six months ended June 30,
		2022		2021			2023		2022
Operating Activities	Operating Activities					Operating Activities
Net income from continuing operations	Net income from continuing operations	$	108,904	$	53,780	Net income from continuing operations	$	23,569	$	108,904
Income (loss) from discontinued operations, net of income taxes		(1,294)		5,606
Loss from discontinued operations, net of income taxes						Loss from discontinued operations, net of income taxes	—		(1,294)
Net income	Net income	107,610		59,386		Net income	23,569		107,610
Adjustments to reconcile net income to cash used in operating activities:
Adjustments to reconcile net income to cash provided by (used in) operating activities:						Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation and amortization	Depreciation and amortization	67,945		95,154		Depreciation and amortization	62,585		67,945
Bad debt expense, net	Bad debt expense, net	3,069		(1,156)		Bad debt expense, net	3,720		3,069
Equity in (earnings) losses of affiliates, net of dividends		6,278		(2,639)
Gain on sales of assets, net		(10,305)		(6,253)
Equity in losses of affiliates, net of dividends						Equity in losses of affiliates, net of dividends	231		6,278

Losses (gains) on sales of assets, net						Losses (gains) on sales of assets, net	679		(10,305)
Stock-based compensation expense	Stock-based compensation expense	4,708		4,112		Stock-based compensation expense	6,000		4,708
Deferred federal income tax	Deferred federal income tax	(13,755)		170		Deferred federal income tax	(7,948)		(13,755)

Asset impairment						Asset impairment	87,156		—

Other	Other	8,549		5,570		Other	(1,730)		8,549
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(289,196)		(58,338)		Accounts receivable	207,867		(289,196)
Inventories	Inventories	186,685		390,506		Inventories	734,855		186,685
Commodity derivatives	Commodity derivatives	(189,090)		(250,691)		Commodity derivatives	102,753		(189,090)
Other current and non-current assets	Other current and non-current assets	5,106		35,568		Other current and non-current assets	(1,247)		5,106
Payables and other current and non-current liabilities	Payables and other current and non-current liabilities	(609,403)		(516,883)		Payables and other current and non-current liabilities	(1,011,086)		(609,403)
Net cash used in operating activities		(721,799)		(245,494)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	207,404		(721,799)
Investing Activities	Investing Activities					Investing Activities
Purchases of property, plant and equipment and capitalized software	Purchases of property, plant and equipment and capitalized software	(43,472)		(34,264)		Purchases of property, plant and equipment and capitalized software	(74,991)		(43,472)
Proceeds from sale of assets	Proceeds from sale of assets	4,672		3,794		Proceeds from sale of assets	1,192		4,672
Purchases of investments	Purchases of investments	(2,105)		(4,701)		Purchases of investments	(544)		(2,105)

Purchases of Rail assets	Purchases of Rail assets	(27,276)		(4,751)		Purchases of Rail assets	—		(27,276)
Proceeds from sale of Rail assets	Proceeds from sale of Rail assets	36,341		15,616		Proceeds from sale of Rail assets	2,871		36,341
Other	Other	1,746		832		Other	(201)		1,746
Net cash used in investing activities	Net cash used in investing activities	(30,094)		(23,474)		Net cash used in investing activities	(71,673)		(30,094)
Financing Activities	Financing Activities					Financing Activities
Net receipts (payments) under short-term lines of credit	Net receipts (payments) under short-term lines of credit	862,698		(258,157)		Net receipts (payments) under short-term lines of credit	(173,384)		862,698
Proceeds from issuance of short-term debt	Proceeds from issuance of short-term debt	350,000		608,250		Proceeds from issuance of short-term debt	—		350,000
Payments of short-term debt	Payments of short-term debt	(550,000)		—		Payments of short-term debt	—		(550,000)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	—		108,300		Proceeds from issuance of long-term debt	100,000		—
Payments of long-term debt	Payments of long-term debt	(15,077)		(177,586)		Payments of long-term debt	(35,861)		(15,077)
Contributions from noncontrolling interest owner	Contributions from noncontrolling interest owner	2,450		2,940		Contributions from noncontrolling interest owner	—		2,450
Distributions to noncontrolling interest owner	Distributions to noncontrolling interest owner	(9,980)		(25)		Distributions to noncontrolling interest owner	(24,344)		(9,980)
Payments of debt issuance costs	Payments of debt issuance costs	(7,802)		(2,059)		Payments of debt issuance costs	(767)		(7,802)
Dividends paid	Dividends paid	(12,245)		(11,677)		Dividends paid	(12,527)		(12,245)
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	(1,747)		—
Value of shares withheld for taxes						Value of shares withheld for taxes	(6,616)		(3,349)
Other	Other	(2,955)		(2,436)		Other	259		394
Net cash provided by financing activities		622,113		267,550
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(154,987)		622,113
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(629)		(167)		Effect of exchange rates on cash and cash equivalents	280		(629)
Decrease in cash and cash equivalents	Decrease in cash and cash equivalents	(130,409)		(1,585)		Decrease in cash and cash equivalents	(18,976)		(130,409)
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	$	86,035	$	27,538	Cash and cash equivalents at end of period	$	96,293	$	86,035

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 ~~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
		Common Shares		Additional Paid-in Capital		Treasury Shares		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Noncontrolling Interests		Total			Three Months Ended
Balance at March 31, 2021		$	140	$	355,961	$	(2,872)	$	(1,214)	$	631,652	$	198,884	$	1,182,551
Net income										43,499		2,625		46,124
Other comprehensive loss								(2,108)						(2,108)
Amounts reclassified from accumulated other comprehensive income								1,485						1,485
Contributions from noncontrolling interests												980		980
Distributions to noncontrolling interests												(25)		(25)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (11 shares)				1,645		138								1,783
Dividends declared ($0.1750 per common share)										(5,826)				(5,826)
Restricted share award dividend equivalents						84				(84)				—
Balance at June 30, 2021		$	140	$	357,606	$	(2,650)	$	(1,837)	$	669,241	$	202,464	$	1,224,964
																	Common Shares		Additional Paid-in Capital		Treasury Shares		Accumulated Other Comprehensive Income		Retained Earnings		Noncontrolling Interests		Total
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
Net income	Net income									79,805		21,856		101,661		Net income									79,805		21,856		101,661
Other comprehensive income	Other comprehensive income							750						750		Other comprehensive income							750						750
Amounts reclassified from accumulated other comprehensive income	Amounts reclassified from accumulated other comprehensive income							785						785		Amounts reclassified from accumulated other comprehensive income							785						785

Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (1 share)				2,946		(63)								2,883
Dividends declared ($0.180 per common share)										(6,094)				(6,094)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (1 shares)																Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (1 shares)			2,946		(63)								2,883
Dividends declared ($0.1800 per common share)																Dividends declared ($0.1800 per common share)									(6,094)				(6,094)
Restricted share award dividend equivalents	Restricted share award dividend equivalents					15				(15)				—		Restricted share award dividend equivalents					15				(15)				—
Balance at June 30, 2022	Balance at June 30, 2022	$	142	$	378,740	$	(2,313)	$	15,090	$	775,495	$	250,052	$	1,417,206	Balance at June 30, 2022	$	142	$	378,740	$	(2,313)	$	15,090	$	775,495	$	250,052	$	1,417,206

Balance at March 31, 2023																Balance at March 31, 2023	$	142	$	377,768	$	(11,006)	$	16,267	$	786,420	$	176,821	1,346,412
Net income																Net income									55,046		27,640		82,686
Other comprehensive income																Other comprehensive income							11,957						11,957
Amounts reclassified from accumulated other comprehensive income																Amounts reclassified from accumulated other comprehensive income							(2,742)						(2,742)

Distributions to noncontrolling interests																Distributions to noncontrolling interests											(14,364)		(14,364)
Deconsolidation of joint venture																Deconsolidation of joint venture											17,399		17,399
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (21 shares)																Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (21 shares)			2,593		812								3,405
Purchase of treasury shares (2 shares)																Purchase of treasury shares (2 shares)					(76)								(76)
Dividends declared ($0.185 per common share)																Dividends declared ($0.185 per common share)									(6,245)				(6,245)
Restricted share award dividend equivalents																Restricted share award dividend equivalents			15						35				50
Balance at June 30, 2023																Balance at June 30, 2023	$	142	$	380,376	$	(10,270)	$	25,482	$	835,256	$	207,496	$	1,438,482

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 5

Table of Contents


		Six Months Ended															Six 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										58,606		780		59,386
Other comprehensive income								7,311						7,311
Amounts reclassified from Accumulated other comprehensive income								2,928						2,928
Cash received from noncontrolling interests, net												2,940		2,940
Distributions to noncontrolling interests												(25)		(25)

Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (67 shares)		2		8,892		(2,016)				(3,480)				3,398
Dividends declared ($0.350 per common share)										(11,634)				(11,634)
Restricted share award dividend equivalents						332				(332)				—
Balance at June 30, 2021		$	140	$	357,606	$	(2,650)	$	(1,837)	$	669,241	$	202,464	$	1,224,964
																	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									85,307		22,303		107,610		Net income									85,307		22,303		107,610
Other comprehensive income	Other comprehensive income							11,721						11,721		Other comprehensive income							11,721						11,721
Amounts reclassified from Accumulated other comprehensive income	Amounts reclassified from Accumulated other comprehensive income							2,175						2,175		Amounts reclassified from Accumulated other comprehensive income							2,175						2,175
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 (51 shares)	Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (51 shares)	2		10,091		(2,385)								7,708		Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (51 shares)	2		10,091		(2,385)								7,708
Dividends declared ($0.360 per common share)	Dividends declared ($0.360 per common share)									(12,182)				(12,182)		Dividends declared ($0.360 per common share)									(12,182)				(12,182)
Restricted share award dividend equivalents	Restricted share award dividend equivalents			54		335				(389)				—		Restricted share award dividend equivalents			54		335				(389)				—
Balance at June 30, 2022	Balance at June 30, 2022	$	142	$	378,740	$	(2,313)	$	15,090	$	775,495	$	250,052	$	1,417,206	Balance at June 30, 2022	$	142	$	378,740	$	(2,313)	$	15,090	$	775,495	$	250,052	$	1,417,206

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)									40,296		(16,727)		23,569
Other comprehensive income																Other comprehensive income							10,073						10,073
Amounts reclassified from Accumulated other comprehensive income																Amounts reclassified from Accumulated other comprehensive income							(5,075)						(5,075)

Distributions to noncontrolling interests																Distributions to noncontrolling interests											(24,344)		(24,344)
Deconsolidation of joint venture																Deconsolidation of joint venture											17,399		17,399
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (222 shares)																Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (222 shares)			(5,494)		6,355								861
Purchase of treasury shares (51 shares)																Purchase of treasury shares (51 shares)					(1,747)								(1,747)
Dividends declared ($0.370 per common share)																Dividends declared ($0.370 per common share)									(12,485)				(12,485)
Restricted share award dividend equivalents																Restricted share award dividend equivalents			622		165				(325)				462
Balance at June 30, 2023																Balance at June 30, 2023	$	142	$	380,376	$	(10,270)	$	25,482	$	835,256	$	207,496	$	1,438,482

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 6

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. Following the deconsolidation of ELEMENT in the second quarter of 2023, as discussed in Note 15, TAMH is the Company’s only remaining VIE. 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 June 30, ~~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. | Q2 ~~2022~~2023 Form 10-Q | 7

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)	June 30, 2022		December 31, 2021		June 30, 2021		(in thousands)	June 30, 2023		December 31, 2022		June 30, 2022
Grain and other agricultural products (a)	Grain and other agricultural products (a)	$	1,241,933	$	1,427,708	$	636,380	Grain and other agricultural products (a)	$	707,980	$	1,326,531	$	1,241,933
Propane and frac sand (a)		19,483		23,780		11,265
Energy inventories (a)								Energy inventories (a)	19,564		21,084		19,483
Ethanol and co-products (a)	Ethanol and co-products (a)	179,175		184,354		155,993		Ethanol and co-products (a)	142,978		156,341		179,175
Plant nutrients and cob products	Plant nutrients and cob products	177,735		178,696		101,286		Plant nutrients and cob products	120,267		227,769		177,735
Total Inventories		$	1,618,326	$	1,814,538	$	904,924
Total inventories								Total inventories	$	990,789	$	1,731,725	$	1,618,326

(a) Includes RMI of ~~$1,214.4~~$691.7 million,~~, $1,410.9~~ $1,308.8 million and ~~$612.2~~$1,214.4 million at June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively.

Inventories do not include 1.3 million, 3.0 million and 1.2 million bushels of grain held in storage for others as of June 30, 2022, December 31, 2021 and June 30, 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)	June 30, 2022		December 31, 2021		June 30, 2021		(in thousands)	June 30, 2023		December 31, 2022		June 30, 2022
Land	Land	$	38,630	$	39,162	$	39,367	Land	$	31,838	$	38,689	$	38,630
Land improvements and leasehold improvements	Land improvements and leasehold improvements	91,542		91,122		93,166		Land improvements and leasehold improvements	81,470		92,084		91,542
Buildings and storage facilities	Buildings and storage facilities	370,453		368,577		377,946		Buildings and storage facilities	349,773		364,721		370,453
Machinery and equipment	Machinery and equipment	949,142		936,476		921,190		Machinery and equipment	891,368		980,159		949,142
Construction in progress	Construction in progress	31,237		20,676		19,723		Construction in progress	56,578		41,429		31,237
		1,481,004		1,456,013		1,451,392			1,411,027		1,517,082		1,481,004
Less: accumulated depreciation	Less: accumulated depreciation	717,561		669,984		627,829		Less: accumulated depreciation	747,586		754,353		717,561
Property, plant and equipment, net	Property, plant and equipment, net	$	763,443	$	786,029	$	823,563	Property, plant and equipment, net	$	663,441	$	762,729	$	763,443

Depreciation expense on property, plant, and equipment used in continuing operations was ~~$55.8~~$24.4 million and ~~$62.5~~$27.5 million for ~~the six~~three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Additionally, depreciation expense on property, plant and equipment used in continuing operations was ~~$27.5~~$50.5 million and ~~$31.4~~$55.8 million for the ~~three~~six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

~~During~~In the ~~second~~first quarter of ~~2022,~~2023, the Company ~~closed on~~recorded a $87.2 million impairment charge related to ELEMENT, LLC ("ELEMENT"), the ~~sale~~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. At the time of the ~~remaining assets~~impairment, the Company owned 51% of ELEMENT and it was a consolidated entity, so 49% of the impairment charge was represented in Net income (loss) attributable to noncontrolling interests in the Company's ~~Frac Sand business for total consideration~~Condensed Consolidated Statements of ~~$8.4 million resulting in a pre-tax gain of $3.7 million.~~Operations.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 8

Table of Contents

4. Debt

Short-term and long-term debt at June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021~~2022 consisted of the following:

(in thousands) June 30,
2022 December 31,
2021 June 30,
2021
Short-term debt – non-recourse $ 97,668 $ 65,485 $ 120,020
Short-term debt – recourse 1,063,760 436,307 637,251
Total short-term debt $ 1,161,428 $ 501,792 $ 757,271
Current maturities of long-term debt – non-recourse $ 7,707 $ 7,601 $ 3,691
Current maturities of long-term debt – recourse 46,244 24,655 46,378
Total current maturities of long-term debt $ 53,951 $ 32,256 $ 50,069
Long-term debt, less: current maturities – non-recourse $ 60,396 $ 64,972 $ 100,876
Long-term debt, less: current maturities – recourse 503,051 535,515 736,733
Total long-term debt, less: current maturities $ 563,447 $ 600,487 $ 837,609

On March 2, 2022, the Company completed an incremental term loan amendment to its credit agreement dated January 11, 2019. The amendment provided for a short-term note of $250.0 million in which the entire stated principal was due on May 31, 2022 (subsequently extended to August 31, 2022 as described below). 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. On May 27, 2022, the Company completed an additional amendment to convert the $350.0 million then outstanding balance from the $450.0 million incremental term loan amendment to a revolving credit agreement with a capacity of up to $450.0 million. The entire amount outstanding will be due on August 31, 2022. The revolving credit agreement will bear interest at variable rates, which are based on SOFR plus an applicable spread. As of June 30, 2022, the Company had drawn $250.0 million on the revolving credit agreement.

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.

During the first quarter of 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)	June 30, 2023		December 31, 2022		June 30, 2022
Short-term debt – non-recourse	$	33,555	$	81,475	$	97,668
Short-term debt – recourse	69,197		191,100		1,063,760
Total short-term debt	$	102,752	$	272,575	$	1,161,428

Current maturities of long-term debt – non-recourse	$	62	$	63,815	$	7,707
Current maturities of long-term debt – recourse	27,449		46,340		46,244
Total current maturities of long-term debt	$	27,511	$	110,155	$	53,951

Long-term debt, less: current maturities – non-recourse	$	—	$	414	$	60,396
Long-term debt, less: current maturities – recourse	576,489		492,104		503,051
Total long-term debt, less: current maturities	$	576,489	$	492,518	$	563,447

The total borrowing capacity of the Company's lines of credit at June 30, ~~2022~~2023, was ~~$2,501.7~~$1,869.1 million of which the Company had a total of ~~$1,315.2~~$1,740.7 million available for ~~borrowing under its lines of credit.~~borrowing. The Company's borrowing capacity is reduced by a combination of outstanding borrowings and letters of credit.

As of June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021,~~2022, the estimated fair value of long-term debt, including the current portion, was ~~$617.5~~$597.6 million, ~~$650.7~~$595.7 million and ~~$910.5~~$617.5 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.

On April 3, 2023, the Company entered into a $100 million 8-year term loan with approximately half of the proceeds used to repay current maturities of long-term debt. The remainder of the proceeds will be used to pay down a portion of outstanding line of credit borrowings. Payment of principal and interest will be made on a quarterly basis. The loan will bear interest at variable rates.

On April 18, 2023, ELEMENT was placed into receivership. As the receiver took control of ELEMENT within the quarter, under the VIE consolidation model, the Company was deemed to have lost control of the entity and therefore deconsolidated ELEMENT from its Condensed Consolidated Financial Statements. As a result of the deconsolidation, the $62.8 million of non-recourse debt associated with ELEMENT was removed from Current maturities of long-term debt as of June 30, 2023.

The Company is in compliance with all financial covenants as of June 30, ~~2022.~~

2023.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 9

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 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 June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~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)	June 30, 2022		December 31, 2021		June 30, 2021		(in thousands)	June 30, 2023		December 31, 2022		June 30, 2022
Cash collateral paid		$	70,442	$	165,250	$	219,469
Cash collateral (received) paid								Cash collateral (received) paid	$	(15,290)	$	64,530	$	70,442
Fair value of derivatives	Fair value of derivatives	165,223		(36,843)		(180,842)		Fair value of derivatives	85,123		(10,014)		165,223
Net derivative asset position	Net derivative asset position	$	235,665	$	128,407	$	38,627	Net derivative asset position	$	69,833	$	54,516	$	235,665

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 10

Table of Contents

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


		June 30, 2022											June 30, 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	$	707,542	$	14,257	$	29,223	$	1,945	$	752,967	Commodity derivative assets	$	438,227	$	3,959	$	26,312	$	59	$	468,557
Commodity derivative liabilities	Commodity derivative liabilities	(138,627)		(2,132)		(216,126)		(12,040)		(368,925)		Commodity derivative liabilities	(75,253)		(1,029)		(277,413)		(4,215)		(357,910)
Cash collateral paid		69,442		—		1,000		—		70,442
Cash collateral (received) paid												Cash collateral (received) paid	(15,290)		—		—		—		(15,290)
Balance sheet line item totals	Balance sheet line item totals	$	638,357	$	12,125	$	(185,903)	$	(10,095)	$	454,484	Balance sheet line item totals	$	347,684	$	2,930	$	(251,101)	$	(4,156)	$	95,357


		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		165,250		—		—		—		165,250
Cash collateral (received) paid												Cash collateral (received) 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


		June 30, 2021											June 30, 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	$	547,186	$	16,480	$	34,327	$	423	$	598,416	Commodity derivative assets	$	707,542	$	14,257	$	29,223	$	1,945	$	752,967
Commodity derivative liabilities	Commodity derivative liabilities	(259,507)		(873)		(124,693)		(3,874)		(388,947)		Commodity derivative liabilities	(138,627)		(2,132)		(216,126)		(12,040)		(368,925)
Cash collateral paid		219,469		—		—		—		219,469
Cash collateral (received) paid												Cash collateral (received) paid	69,442		—		1,000		—		70,442
Balance sheet line item totals	Balance sheet line item totals	$	507,148	$	15,607	$	(90,366)	$	(3,451)	$	428,938	Balance sheet line item totals	$	638,357	$	12,125	$	(185,903)	$	(10,095)	$	454,484

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 and the line items in which they are located for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 are as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Gains on commodity derivatives included in Cost of sales and merchandising revenues		$	230,188	$	73,688	$	264,186	$	240,673
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	$	4,827	$	230,188	$	(22,741)	$	264,186

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 11

Table of Contents

The Company had the following volume of commodity derivative contracts outstanding (on a gross basis) at June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021:~~2022:


		June 30, 2022		June 30, 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	628,471	—		—	Corn	547,805	—	—
Soybeans	Soybeans	116,679	—		—	Soybeans	42,273	—	—
Wheat	Wheat	97,224	—		—	Wheat	236,316	—	—
Oats	Oats	37,355	—		—	Oats	27,824	—	—
Ethanol	Ethanol	—	200,388		—	Ethanol	—	208,251	—
Dried distillers grain	Dried distillers grain	—	—		318	Dried distillers grain	—	—	479
Soybean meal	Soybean meal	—	—		421	Soybean meal	—	—	290
Other	Other	8,549	25,767		3,032	Other	11,064	33,819	2,704
Subtotal	Subtotal	888,278	226,155		3,771	Subtotal	865,282	242,070	3,473
Exchange traded:	Exchange traded:					Exchange traded:
Corn	Corn	219,020	—		—	Corn	177,425	—	—
Soybeans	Soybeans	69,115	—		—	Soybeans	27,555	—	—
Wheat	Wheat	74,418	—		—	Wheat	59,262	—	—
Oats	Oats	650	—		—	Oats	960	—	—
Ethanol	Ethanol	—	94,794		—	Ethanol	—	74,760	—
Propane	Propane	—	25,578		—	Propane	—	63,630	—
Other	Other	95	546		360	Other	—	1,008	393
Subtotal	Subtotal	363,298	120,918		360	Subtotal	265,202	139,398	393
Total	Total	1,251,576	347,073		4,131	Total	1,130,484	381,468	3,866


		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	—	—	449
Soybean meal	Soybean meal	—	—		544	Soybean meal	—	—	570
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. | Q2 ~~2022~~2023 Form 10-Q | 12

Table of Contents


		June 30, 2021		June 30, 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	696,674	—		—	Corn	628,471	—	—
Soybeans	Soybeans	75,507	—		—	Soybeans	116,679	—	—
Wheat	Wheat	129,264	—		—	Wheat	97,224	—	—
Oats	Oats	45,810	—		—	Oats	37,355	—	—
Ethanol	Ethanol	—	198,316		—	Ethanol	—	200,388	—
Dried distillers grain	Dried distillers grain	—	—		372	Dried distillers grain	—	—	318
Soybean meal	Soybean meal	—	—		411	Soybean meal	—	—	421
Other	Other	7,803	3,957		1,191	Other	8,549	25,767	3,032
Subtotal	Subtotal	955,058	202,273		1,974	Subtotal	888,278	226,155	3,771
Exchange traded:	Exchange traded:					Exchange traded:
Corn	Corn	243,190	—		—	Corn	219,020	—	—
Soybeans	Soybeans	49,375	—		—	Soybeans	69,115	—	—
Wheat	Wheat	80,004	—		—	Wheat	74,418	—	—
Oats	Oats	1,430	—		—	Oats	650	—	—
Ethanol	Ethanol	—	112,812		—	Ethanol	—	94,794	—

Propane	Propane	—	18,480		—	Propane	—	25,578	—
Other	Other	—	5		198	Other	95	546	360
Subtotal	Subtotal	373,999	131,297		198	Subtotal	363,298	120,918	360
Total	Total	1,329,057	333,570		2,172	Total	1,251,576	347,073	4,131

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 13

Table of Contents

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.

~~At June 30, 2022, December 31, 2021 and June 30, 2021, the~~The Company had recorded the following amounts for the fair value of the Company's other derivatives:


(in thousands)	(in thousands)	June 30, 2022		December 31, 2021		June 30, 2021		(in thousands)	June 30, 2023		December 31, 2022		June 30, 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)	$	—
Interest rate contracts included in Other long-term liabilities		—		—		(309)
Foreign currency contracts included in Other current (liabilities) assets		(1,749)		(1,069)		1,523

Foreign currency contracts included in Other current assets (liabilities)								Foreign currency contracts included in Other current assets (liabilities)	$	852	$	(3,124)	$	(1,749)
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	$	3,276	$	—	$	—	Interest rate contracts included in Other current assets	$	11,107	$	8,759	$	3,276
Interest rate contracts included in Other assets	Interest rate contracts included in Other assets	15,047		4,574		3,849		Interest rate contracts included in Other assets	22,881		22,641		15,047
Interest rate contracts included in Accrued expenses and other current liabilities		—		(5,206)		(6,944)
Interest rate contracts included in Other long-term liabilities		—		(6,555)		(11,506)

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


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Derivatives not designated as hedging instruments
Interest rate derivative gains (losses) included in Interest expense, net		$	114	$	355	$	123	$	709

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)	$	8,923	$	2,471	$	25,464	$	(10,476)	Interest rate derivative gains (losses) included in Other comprehensive income (loss)	$	8,996	$	8,923	$	2,590	$	25,464
Interest rate derivative gains (losses) included in Interest expense, net	Interest rate derivative gains (losses) included in Interest expense, net	(1,013)		(1,656)		(2,631)		(3,273)		Interest rate derivative gains (losses) included in Interest expense, net	2,515		(1,013)		4,619		(2,631)

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 14~~

~~Table of Contents~~

Outstanding interest rate derivatives, as of June 30, ~~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	2019	2025	$	100.0	Interest rate component of debt - accounted for as a hedge	2.3%	Swap	2019	2025	$	96.9	Interest rate component of debt - accounted for as a hedge	2.3%
Swap	Swap	2019	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	2.4%	Swap	2019	2025	$	48.4	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	2019	2025	$	48.4	Interest rate component of debt - accounted for as a hedge	2.4%
Swap	Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%	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	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%
Swap	Swap	2022	2025	$	20.0	Interest rate component of debt - accounted for as a hedge	2.6%	Swap	2022	2025	$	20.0	Interest rate component of debt - accounted for as a hedge	2.6%
Swap	Swap	2022	2029	$	100.0	Interest rate component of debt - accounted for as a hedge	2.0%	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%
Swap								Swap	2023	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	3.7%
Swap								Swap	2023	2031	$	50.0	Interest rate component of debt - accounted for as a hedge	2.9%

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 1514

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")~~ASC 606, ~~and thus are accounted for under other accounting standards.~~Revenue from Contracts with Customers. 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 June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Revenues under ASC 606	Revenues under ASC 606	$	956,013	$	623,813	$	1,633,869	$	1,110,908	Revenues under ASC 606	$	975,269	$	956,013	$	1,714,247	$	1,633,869
Revenues under ASC 815	Revenues under ASC 815	3,494,604		2,611,992		6,794,702		4,719,616		Revenues under ASC 815	3,044,914		3,494,604		6,187,174		6,794,702
Total revenues	Total revenues	$	4,450,617	$	3,235,805	$	8,428,571	$	5,830,524	Total revenues	$	4,020,183	$	4,450,617	$	7,901,421	$	8,428,571

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 and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively:

Three months ended June 30, 2022
(in thousands) Trade Renewables Plant Nutrient Total
Specialty nutrients $ — $ — $ 104,357 $ 104,357
Primary nutrients — — 336,487 336,487
Products and co-products 101,195 329,224 — 430,419
Propane and frac sand 46,935 — — 46,935
Other 6,997 1,378 29,440 37,815
Total $ 155,127 $ 330,602 $ 470,284 $ 956,013

Three months ended June 30, 2021
(in thousands) Trade Renewables Plant Nutrient Total
Specialty nutrients $ — $ — $ 84,915 $ 84,915
Primary nutrients — — 213,604 213,604
Products and co-products 74,948 184,263 — 259,211
Propane and frac sand 36,649 — — 36,649
Other 6,151 394 22,889 29,434
Total $ 117,748 $ 184,657 $ 321,408 $ 623,813

Six months ended June 30, 2022
(in thousands) Trade Renewables Plant Nutrient Total
Specialty nutrients $ — $ — $ 197,625 $ 197,625
Primary nutrients — — 426,369 426,369
Products and co-products 209,066 561,918 — 770,984
Propane and frac sand 166,727 — — 166,727
Other 13,239 2,593 56,332 72,164
Total $ 389,032 $ 564,511 $ 680,326 $ 1,633,869



	Three months ended June 30, 2023
(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	$	—	$	—	$	98,335	$	98,335
Primary nutrients	—		—		315,101		315,101
Products and co-products	114,289		368,646		—		482,935
Propane	30,155		—		—		30,155
Other	14,782		1,804		32,157		48,743
Total	$	159,226	$	370,450	$	445,593	$	975,269



	Three months ended June 30, 2022
(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	$	—	$	—	$	104,357	$	104,357
Primary nutrients	—		—		336,487		336,487
Products and co-products	101,195		329,224		—		430,419
Propane	41,088		—		—		41,088
Other	12,844		1,378		29,440		43,662
Total	$	155,127	$	330,602	$	470,284	$	956,013


	Six months ended June 30, 2023
(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	$	—	$	—	$	168,332	$	168,332
Primary nutrients	—		—		379,851		379,851
Products and co-products	203,256		763,255		—		966,511
Propane	106,678		—		—		106,678
Other	27,372		4,152		61,351		92,875
Total	$	337,306	$	767,407	$	609,534	$	1,714,247

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 1615

Table of Contents


		Six months ended June 30, 2021									Six months ended June 30, 2022
(in thousands)	(in thousands)	Trade		Renewables		Plant Nutrient		Total		(in thousands)	Trade		Renewables		Nutrient & Industrial		Total
Specialty nutrients	Specialty nutrients	$	—	$	—	$	161,721	$	161,721	Specialty nutrients	$	—	$	—	$	197,625	$	197,625
Primary nutrients	Primary nutrients	—		—		285,263		285,263		Primary nutrients	—		—		426,369		426,369
Products and co-products	Products and co-products	146,936		329,907		—		476,843		Products and co-products	209,066		561,918		—		770,984
Propane and frac sand		128,714		—		—		128,714
Propane										Propane	155,591		—		—		155,591
Other	Other	10,538		4,153		43,676		58,367		Other	24,375		2,593		56,332		83,300
Total	Total	$	286,188	$	334,060	$	490,660	$	1,110,908	Total	$	389,032	$	564,511	$	680,326	$	1,633,869

Substantially all of the Company's revenues accounted for under ASC 606 during the three and six months ended June 30, ~~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 ~~$21.7~~$15.9 million and ~~$100.8~~$55.4 million as of June 30, ~~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 ~~as of December 31, 2021, is~~are 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. As expected, the revenue recognized in the current period satisfied the contract liabilities throughout the spring application season for our ~~Plant~~ Nutrient & Industrial segment.

The Andersons, Inc. | Q2 2023 Form 10-Q | 16

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 June 30, ~~2022,~~2023, the Company recorded income tax expense from continuing operations of ~~$15.8~~$21.7 million. The Company's effective tax rate was ~~13.3%~~20.8% on income before income taxes from continuing operations of ~~$118.2~~$104.4 million. The difference between the ~~13.3%~~20.8% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of non-controlling interest ~~as well as certain discrete derivatives and hedging activities~~ offset by state and local income taxes and nondeductible compensation. During the three months ended June 30, 2023, discrete tax expense of $1.4 million was recorded on income before taxes of $6.5 million related to gain on deconsolidation of the ELEMENT joint venture.

For the three months ended June 30, 2021, the Company recorded income tax expense from continuing operations of $9.7 million. The Company’s effective tax rate was 18.0% on income from continuing operations of $53.7 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 offset by state and local taxes and nondeductible compensation.

~~For the six~~ months ended June 30, 2022, the Company recorded income tax expense from continuing operations of ~~$19.9~~$15.8 million. The ~~Company's~~Company’s effective tax rate was ~~15.4%~~13.3% on income before income taxes from continuing operations of ~~$128.8~~$118.2 million. The ~~difference between the 15.4%~~ effective tax rate ~~and~~differs from the U.S. federal statutory ~~tax~~ rate of 21.0% ~~is primarily attributable~~due to the tax impact of non-controlling interest as well as certain discrete derivatives and hedging activities offset by state and local income taxes and nondeductible compensation.

For the six months ended June 30, ~~2021,~~2023, the Company recorded an income tax expense from continuing operations of $15.8 million. The Company's effective tax rate was 40.2% on income before income taxes from continuing operations of $39.4 million. The difference between the 40.2% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of non-controlling interest, state and local income taxes and nondeductible compensation. During the six months ended June 30, 2023, a net discrete income tax benefit of $10.6 million was recorded on a net loss before taxes of $88.8 million related to the current year operations, impairment charge, and gain on deconsolidation associated with ELEMENT.

For the six months ended June 30, 2022, the Company recorded income tax expense from continuing operations of ~~$14.0~~$19.9 million. The Company’s effective tax rate was ~~20.7%~~15.4% on income before income taxes from continuing operations of ~~$67.8~~$128.8 million. The effective tax rate differs from the U.S. federal statutory ~~tax~~ rate of 21.0% due to the tax impact of non-controlling interest as well as certain discrete derivatives and hedging activities offset by state and local income taxes and nondeductible compensation.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 17

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 and six months ended June 30, ~~2022~~2023 and ~~2021:~~2022:


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Currency Translation Adjustment	Currency Translation Adjustment									Currency Translation Adjustment
Beginning balance	Beginning balance	$	5,729	$	6,963	$	5,631	$	5,739	Beginning balance	$	(7,436)	$	5,729	$	(8,203)	$	5,631
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(5,679)		1,469		(5,581)		2,693		Other comprehensive income (loss) before reclassifications	2,669		(5,679)		3,436		(5,581)

Tax effect	Tax effect	—		—		—		—		Tax effect	—		—		—		—
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(5,679)		1,469		(5,581)		2,693		Other comprehensive income (loss), net of tax	2,669		(5,679)		3,436		(5,581)
Ending balance	Ending balance	$	50	$	8,432	$	50	$	8,432	Ending balance	$	(4,767)	$	50	$	(4,767)	$	50
Hedging Adjustment	Hedging Adjustment									Hedging Adjustment
Beginning balance	Beginning balance	$	7,087	$	(8,365)	$	(5,335)	$	(18,106)	Beginning balance	$	18,750	$	7,087	$	23,546	$	(5,335)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	7,910		(3,514)		22,833		4,613		Other comprehensive income (loss) before reclassifications	11,511		7,910		7,209		22,833
Amounts reclassified from AOCI (a)	Amounts reclassified from AOCI (a)	1,013		2,208		2,631		4,360		Amounts reclassified from AOCI (a)	(2,514)		1,013		(4,619)		2,631
Tax effect	Tax effect	(2,226)		(552)		(6,345)		(1,090)		Tax effect	(2,262)		(2,226)		(651)		(6,345)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	6,697		(1,858)		19,119		7,883		Other comprehensive income (loss), net of tax	6,735		6,697		1,939		19,119
Ending balance	Ending balance	$	13,784	$	(10,223)	$	13,784	$	(10,223)	Ending balance	$	25,485	$	13,784	$	25,485	$	13,784
Pension and Other Postretirement Adjustment	Pension and Other Postretirement Adjustment									Pension and Other Postretirement Adjustment
Beginning balance	Beginning balance	$	481	$	(70)	$	640	$	33	Beginning balance	$	4,695	$	481	$	4,883	$	640
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	845		(63)		914		5		Other comprehensive income (loss) before reclassifications	(15)		845		(29)		914
Amounts reclassified from AOCI (b)	Amounts reclassified from AOCI (b)	(228)		(228)		(456)		(456)		Amounts reclassified from AOCI (b)	(228)		(228)		(456)		(456)
Tax effect	Tax effect	(100)		57		(100)		114		Tax effect	54		(100)		108		(100)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	517		(234)		358		(337)		Other comprehensive income (loss), net of tax	(189)		517		(377)		358
Ending balance	Ending balance	$	998	$	(304)	$	998	$	(304)	Ending balance	$	4,506	$	998	$	4,506	$	998
Investments in Convertible Preferred Securities Adjustment	Investments in Convertible Preferred Securities Adjustment									Investments in Convertible Preferred Securities Adjustment
Beginning balance	Beginning balance	$	258	$	258	$	258	$	258	Beginning balance	$	258	$	258	$	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	$	258	$	258	Ending balance	$	258	$	258	$	258	$	258

Total AOCI Ending Balance	Total AOCI Ending Balance	$	15,090	$	(1,837)	$	15,090	$	(1,837)	Total AOCI Ending Balance	$	25,482	$	15,090	$	25,482	$	15,090

(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. | Q2 ~~2022~~2023 Form 10-Q | 18

Table of Contents

9. Earnings Per Share


(in thousands, except per common share data)	(in thousands, except per common share data)	Three months ended June 30,				Six months ended June 30,				(in thousands, except per common share data)	Three months ended June 30,				Six months ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Numerator:	Numerator:									Numerator:
Net income from continuing operations	Net income from continuing operations	$	102,400	$	44,025	$	108,904	$	53,780	Net income from continuing operations	$	82,686	$	102,400	$	23,569	$	108,904
Net income attributable to noncontrolling interests(a)		21,856		2,625		22,303		780
Net income attributable to The Andersons Inc. common shareholders from continuing operations		$	80,544	$	41,400	$	86,601	$	53,000
Net income (loss) attributable to noncontrolling interests (a)										Net income (loss) attributable to noncontrolling interests (a)	27,640		21,856		(16,727)		22,303
Net income attributable to The Andersons, Inc. common shareholders from continuing operations										Net income attributable to The Andersons, Inc. common shareholders from continuing operations	$	55,046	$	80,544	$	40,296	$	86,601

Income (loss) from discontinued operations, net of income taxes		$	(739)	$	2,099	$	(1,294)	$	5,606
Loss from discontinued operations, net of income taxes										Loss from discontinued operations, net of income taxes	$	—	$	(739)	$	—	$	(1,294)

Denominator:	Denominator:									Denominator:
Weighted average shares outstanding – basic	Weighted average shares outstanding – basic	33,850		33,263		33,795		33,226		Weighted average shares outstanding – basic	33,744		33,850		33,683		33,795
Effect of dilutive awards	Effect of dilutive awards	566		316		621		391		Effect of dilutive awards	421		566		510		621
Weighted average shares outstanding – diluted	Weighted average shares outstanding – diluted	34,416		33,579		34,416		33,617		Weighted average shares outstanding – diluted	34,165		34,416		34,193		34,416

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	$	2.38	$	1.25	$	2.56	$	1.60	Continuing operations	$	1.63	$	2.38	$	1.20	$	2.56
Discontinued operations	Discontinued operations	(0.02)		0.06		(0.04)		0.16		Discontinued operations	—		(0.02)		—		(0.04)
		$	2.36	$	1.31	$	2.52	$	1.76		$	1.63	$	2.36	$	1.20	$	2.52
Diluted earnings (loss):	Diluted earnings (loss):									Diluted earnings (loss):
Continuing operations	Continuing operations	$	2.34	$	1.23	$	2.52	$	1.58	Continuing operations	$	1.61	$	2.34	$	1.18	$	2.52
Discontinued operations	Discontinued operations	(0.02)		0.07		(0.04)		0.16		Discontinued operations	—		(0.02)		—		(0.04)
		$	2.32	$	1.30	$	2.48	$	1.74		$	1.61	$	2.32	$	1.18	$	2.48

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

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 19

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 June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021:~~2022:


(in thousands)	June 30, 2023
Assets (liabilities)	Level 1		Level 2		Level 3		Total
Commodity derivatives, net (a)	$	69,833	$	25,524	$	—	$	95,357
Provisionally priced contracts (b)	(19,061)		(16,529)		—		(35,590)
Convertible preferred securities (c)	—		—		15,424		15,424
Other assets and liabilities (d)	5,018		33,988		—		39,006
Total	$	55,790	$	42,983	$	15,424	$	114,197


(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)	June 30, 2022
Assets (liabilities)	Level 1		Level 2		Level 3		Total


Commodity derivatives, net (a)	$	235,665	$	218,819	$	—	$	454,484
Provisionally priced contracts (b)	38,061		(27,945)		—		10,116
Convertible preferred securities (c)	—		—		16,803		16,803
Other assets and liabilities (d)	1,097		18,323		—		19,420
Total	$	274,823	$	209,197	$	16,803	$	500,823

(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) June 30, 2021
Assets (liabilities) Level 1 Level 2 Level 3 Total
Commodity derivatives, net (a)
$ 38,627 $ 390,311 $ — $ 428,938
Provisionally priced contracts (b)
32,710 (25,210) — 7,500
Convertible preferred securities (c)
— — 13,550 13,550
Other assets and liabilities (d)
5,373 (14,909) — (9,536)
Total $ 76,710 $ 350,192 $ 13,550 $ 440,452

(a)Includes associated cash posted/received as ~~collateral~~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. | Q2 ~~2022~~2023 Form 10-Q | 20

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
Additional Investments		772		1,901
Gains included in Other income, net		126		—
Purchases of additional investments						Purchases of additional investments	235		772
Gains (losses) included in Other income, net						Gains (losses) included in Other income, net	(221)		126

Assets at June 30,	Assets at June 30,	$	16,803	$	13,550	Assets at June 30,	$	15,424	$	16,803

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 21~~

~~Table of Contents~~

The following tables summarize quantitative information about the Company's Level 3 fair value measurements as of June 30, ~~2022,~~2023, December 31, ~~2021~~2022 and June 30, ~~2021:~~2022:

Quantitative Information about Recurring Level 3 Fair Value Measurements

Fair Value as of

(in thousands)

June 30, 2022

December 31, 2021

June 30, 2021

Valuation Method

Unobservable Input

Weighted Average

(in thousands)

June 30, 2023

December 31, 2022

June 30, 2022

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

16,803

11,618

13,550

Implied based on market prices

N/A

Convertible preferred securities (a)

15,424

16,278

16,803

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 ~~6/30/~~
(in thousands)	June 30, 2023		December 31, 2022		June 30, 2022		Valuation Method	Unobservable Input	Weighted Average
Grain Assets (a)	$	—	$	9,000	$	—	Third party appraisal	Various	N/A

Equity method investment ~~(a)~~(b)	$	—	$	—	$	11,538	Discounted cash flow analysis	Various	N/A

(a) The Company recognized impairment charges on a Nebraska grain asset. The fair value of the asset was determined using third-party appraisals. These measures are considered Level 3 inputs on a nonrecurring basis.

(b) The Company recorded an other-than-temporary impairment charge on an existing equity method investment. The fair value of the investment was determined using a discounted cash flow analysis.

~~Quantitative Information about Non-Recurring Level 3 Fair Value Measurements~~

~~(in thousands)~~

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

~~Valuation Method~~

~~Unobservable Input~~

~~Weighted Average~~

~~Frac sand assets (b)~~

~~2,946~~

~~Third party appraisal~~

~~Various~~

~~N/A~~

~~Real property (c)~~

~~700~~

~~Market approach~~

~~Various~~

~~N/A~~

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

(c) The Company recognized impairment charges on certain Trade assets and measured the fair value using Level 3 inputs on a nonrecurring basis. The fair value of the assets was 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 June 30, 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. | Q2 2023 Form 10-Q | 21

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 June 30, Six months ended June 30,
(in thousands) 2022 2021 2022 2021
Sales revenues $ 103,106 $ 85,294 $ 189,255 $ 151,940
Purchases of product and capital assets 11,983 8,662 38,409 20,336


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Sales of products	$	97,099	$	103,106	$	172,050	$	189,255
Purchases of products	14,524		11,983		30,226		38,409


(in thousands)	(in thousands)	June 30, 2022		December 31, 2021		June 30, 2021		(in thousands)	June 30, 2023		December 31, 2022		June 30, 2022
Accounts receivable	Accounts receivable	$	17,560	$	9,984	$	11,835	Accounts receivable	$	15,218	$	12,272	$	17,560
Accounts payable	Accounts payable	3,060		6,034		2,287		Accounts payable	2,503		7,070		3,060

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 22~~

~~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~~four 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.


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Revenues from external customers	Revenues from external customers									Revenues from external customers
Trade	Trade	$	3,097,767	$	2,297,869	$	6,182,448	$	4,280,377	Trade	$	2,696,810	$	3,097,767	$	5,574,590	$	6,182,448
Renewables	Renewables	882,567		616,527		1,565,798		1,059,486		Renewables	877,781		882,567		1,717,297		1,565,798
Plant Nutrient		470,283		321,409		680,325		490,661
Nutrient & Industrial										Nutrient & Industrial	445,592		470,283		609,534		680,325
Total	Total	$	4,450,617	$	3,235,805	$	8,428,571	$	5,830,524	Total	$	4,020,183	$	4,450,617	$	7,901,421	$	8,428,571


		Three months ended June 30,				Six months ended June 30,					Three months ended June 30,				Six months ended June 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Income (loss) before income taxes from continuing operations
Income before income taxes from continuing operations										Income before income taxes from continuing operations
Trade	Trade	$	23,666	$	13,777	$	27,335	$	27,632	Trade	$	4,990	$	23,666	$	44,354	$	27,335
Renewables1		67,776		26,156		73,738		27,237
Plant Nutrient		38,311		23,995		49,054		32,518
Renewables (a)										Renewables (a)	66,604		67,776		(15,909)		73,738
Nutrient & Industrial										Nutrient & Industrial	42,565		38,311		32,127		49,054
Other	Other	(11,600)		(10,226)		(21,367)		(19,569)		Other	(9,741)		(11,600)		(21,155)		(21,367)
Income before income taxes from continuing operations		$	118,153	$	53,702	$	128,760	$	67,818
Total										Total	$	104,418	$	118,153	$	39,417	$	128,760

1(a) Includes income (loss) attributable to noncontrolling interests of ~~$21.9~~$27.6 million and ~~$2.6~~$21.9 million for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$22.3~~$(16.7) million and ~~$0.8~~$22.3 million for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 2322

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 investigated alleged recordkeeping and reporting violations under the Emergency Planning and Community Right-to-Know Act. The Company settled this matter with the U.S. EPA for approximately $1.7 million in the second quarter of 2022.

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

The Andersons, Inc. | Q2 2023 Form 10-Q | 23

Table of Contents

14. Other Income

The following table sets forth the items in Other income, net within the Condensed Consolidated Statements of Operations for the periods presented below:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2023		2022		2023		2022
Gain on deconsolidation of joint venture	$	6,544	$	—	$	6,544	$	—
Property insurance recoveries	2,180		1,851		3,183		3,106
Interest income	1,708		819		3,175		1,293
Patronage income	78		936		2,094		2,399
Gain on sale of frac sand assets	—		3,979		—		3,979
Biofuel Producer Program funds	—		17,643		—		17,643
Equity earnings (losses) in affiliates	(417)		(6,034)		(231)		(6,278)
Other	2,348		(2,402)		5,680		(1,432)
Total	$	12,441	$	16,792	$	20,445	$	20,710

Individually significant items included in the table above are:

Gain on deconsolidation of joint venture- On April 18, 2023, ELEMENT was placed into receivership. As the receiver took control of ELEMENT within the quarter, under the VIE consolidation model, the Company was deemed to have lost control of the entity and therefore deconsolidated ELEMENT from its Condensed Consolidated Financial Statements. As a result of these activities, the Company recognized a gain on deconsolidation. See footnote 15 for additional information.

Property insurance recoveries - In 2023, property insurance recoveries consisted of proceeds of $2.2 million relating to a conveyor collapse in Delhi, Louisiana in the prior year, the remaining proceeds consists of several individually insignificant amounts in the ordinary course of business. In 2022, property insurance recoveries consisted of proceeds of approximately $3.0 million relating to a prior period incident at the Company’s Galena Park, Texas facility, the remaining proceeds consists of several individually insignificant amounts in the ordinary course of business.

Interest income - The Company earns interest income on cash and cash equivalents held in money market accounts at TAMH along with inventory financing programs provided by the Company. For the six months ended June 30, 2023, the money market account at TAMH earned $1.0 million and the inventory financing program earned $1.1 million , the remaining interest income consists of several individually insignificant amounts in the ordinary course of business. Interest income for the year ended June 30, 2022 consisted of individually insignificant amounts in the ordinary course of business.

Patronage income - As a part of the Company’s normal operations it relies heavily on short-term lines of credit in order to support working capital needs in addition to long-term debt presented on the balance sheet. As part of these programs the Company receives patronage income annually from its lenders.

Gain on sale of frac sand assets - Gains on sale of frac sand assets for the year ended June 30, 2022, consisted of gains on the sale of the Company’s remaining frac sand facilities and assets in Oklahoma City, Oklahoma and North Branch, Minnesota of $4.0 million.

Biofuel Producer Program funds - In 2022, the USDA as a part of the Biofuel Producer Program, created under the CARES Act, provided funding to support biofuel producers who faced unexpected market losses due to the COVID-19 pandemic. Under this program TAMH and ELEMENT received proceeds of $13.3 million and $4.3 million, respectively. Of these proceeds $8.9 million was attributable to the Company and the remaining $8.7 million attributable to the noncontrolling interest.

Equity earnings (losses) in affiliates - In 2022, the Company recorded an impairment charge on a Canadian equity method investment for $4.5 million, the remaining equity earnings (losses) in affiliates consists of individually insignificant activity in the ordinary course of business.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 24

Table of Contents

~~14. Discontinued Operations~~

15. ELEMENT

OnELEMENT was structured as a limited liability company established for the primary purpose of producing ethanol and additional co-products such as distiller’s dried grain and corn oil. The facility located in Colwich, Kansas was designed to produce 70 million gallons of ethanol per year and began operations in August 16, 2021, the Company entered into a definitive agreement under which 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. In the second quarter of 2022, the Company entered into an agreement to sell the Rail Repair business and divested substantially all of the remaining leases under the Rail Leasing business.2019.

~~Starting~~The Company holds 51% of the membership units and ICM Holdings, Inc. (“ICM”) owns the remaining 49% of the membership units. The Company acted as the manager of the facility, responsibilities which were assumed per the Management Services Agreement dated January 1, 2021, and it was concluded to be a variable interest entity (“VIE”) and consolidated ELEMENT within the Company’s Consolidated Financial Statements.

The plant has faced operational and market-based challenges. These challenges have been exacerbated by a shift in the ~~third quarter of 2021, substantially all~~California Low Carbon Fuel Standard credit markets and high western corn basis. In early 2023, ELEMENT was unable to make its scheduled debt payments and was placed into default. The default led to an impairment triggering event, concluding in an $87.2 million impairment charge in the first quarter.

On April 18, 2023, ELEMENT was placed into receivership and was appointed a receiver, which took possession and control of the ~~assets~~rights and ~~liabilities~~interests of ~~our Rail business were classified as discontinued operations~~ELEMENT. The facility is being marketed for sale. With this appointment, while retaining its investment in ELEMENT, the Company ceased to have a controlling financial interest and was no longer deemed to be the primary beneficiary in the ~~accompanying~~subsidiary. Accordingly, the Company deconsolidated ELEMENT at that time and began accounting for the subsidiary as an equity method investment which resulted in a pretax gain of $18.1 million. Additionally, the Company had a $9.6 million balance in raw material and fee receivables as well as $2.0 million in loans and interest due from ELEMENT that were previously eliminated in consolidation. Upon deconsolidation, the fair values of these receivables and loans from ELEMENT to the Company were ascertained to have no value and were fully reserved for resulting in a pretax loss of $11.6 million. The combination of this activity triggered by the ELEMENT deconsolidation resulted in a cumulative net pretax gain of $6.5 million which was recorded in Other income, net in the Condensed Consolidated ~~Balance Sheets.~~Statements of Operations.

As of June 30, 2023, ELEMENT has continued to incur losses and there have been no payments on the outstanding receivables or loan mentioned previously. No equity method losses related to ELEMENT have been recorded since deconsolidation as the investment is in a negative position as of June 30, 2023.

The table below summarizes the results of the Rail Leasing business and the Rail Repair business for the three and six months ended June 30, 2022 and 2021 which are reflected in the Consolidated Statements of Operations as discontinued operations.16. Subsequent Events

Three months ended June 30, Six months ended June 30,
(in thousands) 2022 2021 2022 2021
Sales and merchandising revenues $ 12,076 $ 37,921 $ 25,191 $ 78,931
Cost of sales and merchandising revenues 12,877 27,284 23,948 59,023
Gross profit (loss) (801) 10,637 1,243 19,908
Operating, administrative and general expenses 4,434 4,416 5,813 7,290
Interest expense, net — 3,394 — 6,574
Other income, net 6,547 237 6,620 1,911
Income from discontinued operations before income taxes 1,312 3,064 2,050 7,955
Income tax provision 2,051 965 3,344 2,349
Income (loss) from discontinued operations, net of income taxes $ (739) $ 2,099 $ (1,294) $ 5,606

On July 10, 2023, the Company closed on the purchase of the assets of ACJ International LLC ("ACJ"), an ingredient, logistics, and supply chain management company in the pet food industry, headquartered in St. Louis, Missouri. The Company purchased ACJ for $41.4 million, of which, $24.4 million was paid at closing and the remaining estimated amount will be paid over three years based on certain earn-out provisions.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 25

~~Table of Contents~~

~~The following table summarizes the assets and liabilities which are classified as discontinued operations at June 30, 2022, December 31, 2021 and June 30, 2021.~~

(in thousands) June 30,
2022 December 31,
2021 June 30,
2021
Assets
Current assets:
Accounts receivable, net $ 11,998 $ 12,643 $ 18,707
Inventories 6,318 6,739 7,375
Other current assets 311 1,503 2,473
Current assets held-for-sale 18,627 20,885 28,555
Other assets:
Rail assets leased to others, net 427 458 574,585
Property, plant and equipment, net 17,370 17,280 18,199
Goodwill 4,167 4,167 4,167
Other intangible assets, net — 24 2,025
Right of use assets, net 2,322 20,999 18,969
Other assets, net 12 241 2,800
Total non-current assets held-for-sale 24,298 43,169 620,745
Total assets held-for-sale $ 42,925 $ 64,054 $ 649,300
Liabilities
Current liabilities:
Trade and other payables $ 1,883 $ 2,546 $ 3,666
Customer prepayments and deferred revenue — — 2,211
Current maturities of long-term debt — — 6,513
Current operating lease liabilities 2,112 4,672 6,023
Accrued expenses and other current liabilities 3,319 6,161 6,772
Total current liabilities held-for-sale 7,314 13,379 25,185
Long-term lease liabilities 3,113 16,119 14,718
Long-term debt, less current maturities — — 28,845
Other long-term liabilities — — 430
Non-current liabilities held-for-sale 3,113 16,119 43,993
Total liabilities held-for-sale $ 10,427 $ 29,498 $ 69,178

~~The following table summarizes cash flow data relating to discontinued operations for the six months ended June 30, 2022 and 2021:~~

Six months ended June 30,
(in thousands) 2022 2021
Depreciation and amortization $ — $ 17,588
Capital expenditures (27,276) (5,703)
Proceeds from sale of assets 36,341 15,616
Non-cash operating activities - Gain on sale of railcars (6,176) (4,987)
Non-cash operating activities - fixed asset impairment 2,818 234
Non-cash investing activities - capital expenditures, consisting of unpaid capital expenditure liabilities at period end — (113)

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 26~~

~~Table of Contents~~

~~15. Subsequent Events~~

On July 8, 2022, the Company closed on the sale of the remaining assets and certain liabilities of the Company's Rail Repair business for $55.1 million resulting in an estimated pre-tax gain of approximately $30 million.

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 27~~

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 second 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 during the quarter for impairment indicators. Management ultimately concluded that an impairment triggering event had not occurred. The Company believes that the share price is 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 June 30, 2022.

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 28~~

~~Table of Contents~~

Trade

The Trade segment’s second quarter operating results ~~improved~~were mixed as overall gross profit declined despite strong earnings from certain well-positioned merchandising businesses. Throughput of agricultural inventories declined from the p~~rior year as~~second quarter of 2022. When combined with the ~~segment entered~~strong first quarter, income before income taxes and gross profit remain ahead of 2022 even without $16.1 million of inventory insurance recoveries recorded thus far in 2023. The first half of 2022 included certain margin impacts from the ~~quarter with~~Russian invasion of Ukraine that were not repeated in the first half of 2023. Recent investments in food and pet food ingredients also contributed to earnings in the quarter. Winter wheat volume accumulated from the just-completed harvest was higher than expected and at good ~~ownership positions and, as expected, benefited from basis improvements. Wheat ownership~~qualities in our grain terminal assets is now earning space income and we had very strong results from our Midwest truck grain merchandising business. Our food and specialty ingredients business also delivered strong results in the quarter, particularly in our UK subsidiary, Feed Factors.

core geography.

Agricultural inventories on hand were ~~107.0~~74.5 million and ~~85.8~~107.0 million bushels at June 30, ~~2022~~2023 and June 30, ~~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 or leased facilities, including temporary pile storage, was approximately ~~184~~175 million bushels at June 30, ~~2022 compared~~2023, which was comparable to ~~202 million bushels at June 30, 2021.~~the prior year.

~~Current~~With the strong South American harvest, combined with improving U.S. crop conditions, ~~vary by geography, but despite initial delays~~the outlook for global grain stocks has improved. With the mix of assets and merchandising capabilities across key geographies, Trade is well-positioned. While there continues to be geopolitical risks in ~~planting, crop conditions are good~~areas in ~~our key draw areas. Continued merchandising opportunities and strong elevation margins are also expected to continue through~~which we do business, including certain countries that have controlled currencies, the ~~remainder~~unrest surrounding Black Sea grain shipments could result in continued volatility in commodity markets.

The Andersons, Inc. | Q2 2023 Form 10-Q | 26

Table of ~~the year as global stocks are not projected to recover quickly from the recent worldwide production shortfalls.~~Contents

Renewables

The Renewables segment's second quarter operating results ~~increased from~~were good on rallying crush margins and strong co-product values. While the results decreased year over year, the prior year ~~due to higher production margins and yields. Also contributing to the increased~~ results ~~was~~included approximately $24.4 million ~~of positive~~in additional mark-to-market ~~impact; nearly $18 million of which are reversals of prior losses. This compared to positive mark-to-market impacts of $13.5 million in the second quarter of 2021. The ethanol facilities received~~gains and $17.6 million of proceeds received as a part of the USDA ~~Biofuels~~Biofuel Producer ~~COVID relief funds,~~Program enacted as a part of the CARES Act, of which $8.9 million ~~is included in pre-tax income~~was attributable to the Company.

~~Higher export demand has helped keep ethanol prices firm,~~ When the impact of these items is removed from prior year results, the current year operating results are well ahead of the prior year. Ethanol crush margins strengthened over the quarter and the current margin outlook, despite ~~lower than anticipated seasonal domestic demand being impacted by the overall high gasoline prices. High corn costs for ethanol production~~volatility, remains strong. Production facilities operated efficiently in the ~~western US may negatively impact~~quarter with improved ethanol ~~production there, while~~and corn oil yield and lower costs than the ~~Company's~~comparable quarter in 2022. The merchandising businesses, including renewable diesel feedstocks, continue to deliver solid earnings on higher volumes and strong co-product values, and exceeded our second quarter 2022 results. Our eastern corn belt production facilities ~~are better positioned~~remain well-positioned for corn supply.

Ethanol and related co-products volumes for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


	Three months ended June 30,		Six months ended June 30,
(in thousands)	2023	2022	2023	2022
Ethanol (gallons shipped)	198,633	196,536	385,200	391,547
E-85 (gallons shipped)	9,562	10,600	19,081	17,315
Vegetable oils (pounds shipped) (a)	303,701	184,644	565,357	348,564
DDG (tons shipped) (b)	508	450	1,031	950

Three months ended June 30, Six months ended June 30,
(in thousands) 2022 2021 2022 2021
Ethanol (gallons shipped) 196,536 186,396 391,547 358,608
E-85 (gallons shipped) 10,600 11,914 17,315 19,805
Corn oil (pounds shipped) 122,223 56,760 232,544 104,708
DDG (tons shipped)* 450 454 950 931
(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~~

The Andersons, Inc. | Q2 2023 Form 10-Q | 27

Table of Contents

Nutrient & Industrial

The ~~Plant~~ Nutrient & Industrial segment's second quarter operating results ~~increased~~improved from the prior ~~period. Tons~~year. After a slow first quarter of 2023 when reduced sales reflected delayed purchasing in a falling price environment, customers returned during the 2023 spring application season driving increased tons sold ~~across all product lines were down period over period, however,~~from the ~~lower~~second quarter of 2022. Gross profit improved by $4 million, and reflects these higher volumes ~~were more than~~partially offset by ~~significant~~ margin ~~increases~~compression from ~~well-positioned inventory. The most significant margin improvements came from~~overall market price declines. Strong corn prices are expected to drive demand on specialty liquid products with fall conditions and market dynamics influencing second half volumes as we transition to the Ag Supply Chain and Specialty Liquids product lines. While we have seen some lowering of base nutrient prices, continued strong global demand and disruption should keep prices higher than historical averages. Strong farm income may drive purchasing decisions while overall price levels could cause customers to delay fertilizer purchases.off season.

Storage capacity at our Ag Supply Chain and Specialty Liquids facilities, including leased storage, was approximately 448 thousand tons for dry nutrients and approximately ~~511~~510 thousand tons for liquid nutrients at June 30, ~~2022,~~2023, which is similar to the prior year.

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 29~~

~~Table of Contents~~

Tons of product sold for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three months ended June 30,		Six months ended June 30,			Three months ended June 30,		Six months ended June 30,
(in thousands)	(in thousands)	2022	2021	2022	2021	(in thousands)	2023	2022	2023	2022
Ag Supply Chain	Ag Supply Chain	492	661	649	1,008	Ag Supply Chain	674	525	844	709
Specialty Liquids	Specialty Liquids	98	133	190	233	Specialty Liquids	141	129	222	238
Engineered Granules	Engineered Granules	121	165	228	323	Engineered Granules	46	56	109	120
Total tons	Total tons	711	959	1,067	1,564	Total tons	861	710	1,175	1,067

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. Prior year volumes have been reclassified for the three and six months ended June 30, 2022, to conform with current year presentation as the product mix in certain facilities has evolved.

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.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 3028

Table of Contents

Operating Results

The following discussion focuses on the operating results as shown in the Condensed Consolidated Statements of Operations and includes a separate discussion by segment. Additional segment information is included herein in Note 12, Segment Information.

Comparison of the three months ended June 30, ~~2022~~2023 with the three months ended June 30, ~~2021~~2022 including a reconciliation of GAAP to non-GAAP measures:


		Three months ended June 30, 2022											Three months ended June 30, 2023
(in thousands)	(in thousands)	Trade		Renewables		Plant Nutrient		Other		Total		(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	Sales and merchandising revenues	$	3,097,767	$	882,567	$	470,283	$	—	$	4,450,617	Sales and merchandising revenues	$	2,696,810	$	877,781	$	445,592	$	—	$	4,020,183
Cost of sales and merchandising revenues	Cost of sales and merchandising revenues	2,995,773		822,679		401,324		—		4,219,776		Cost of sales and merchandising revenues	2,616,099		809,489		372,658		—		3,798,246
Gross profit	Gross profit	101,994		59,888		68,959		—		230,841		Gross profit	80,711		68,292		72,934		—		221,937
Operating, administrative and general expenses	Operating, administrative and general expenses	62,977		8,590		29,591		11,401		112,559		Operating, administrative and general expenses	69,146		7,568		28,886		10,407		116,007

Interest expense (income), net	Interest expense (income), net	13,300		2,012		1,923		(314)		16,921		Interest expense (income), net	10,903		1,588		1,983		(521)		13,953
Equity in earnings (losses) of affiliates, net		(6,034)		—		—		—		(6,034)
Other income (expense), net		3,983		18,490		866		(513)		22,826

Other income, net												Other income, net	4,328		7,468		500		145		12,441
Income (loss) before income taxes from continuing operations	Income (loss) before income taxes from continuing operations	$	23,666	$	67,776	$	38,311	$	(11,600)	$	118,153	Income (loss) before income taxes from continuing operations	$	4,990	$	66,604	$	42,565	$	(9,741)	$	104,418
Income (loss) before income taxes attributable to the noncontrolling interests		—		21,856		—		—		21,856
Income before income taxes attributable to the noncontrolling interests												Income before income taxes attributable to the noncontrolling interests	—		27,640		—		—		27,640
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	23,666	$	45,920	$	38,311	$	(11,600)	$	96,297	Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	4,990	$	38,964	$	42,565	$	(9,741)	$	76,778


		Three months ended June 30, 2021											Three months ended June 30, 2022
(in thousands)	(in thousands)	Trade		Renewables		Plant Nutrient		Other		Total		(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	Sales and merchandising revenues	$	2,297,869	$	616,527	$	321,409	$	—	$	3,235,805	Sales and merchandising revenues	$	3,097,767	$	882,567	$	470,283	$	—	$	4,450,617
Cost of sales and merchandising revenues	Cost of sales and merchandising revenues	2,220,038		581,811		270,549		—		3,072,398		Cost of sales and merchandising revenues	2,995,773		822,679		401,324		—		4,219,776
Gross profit	Gross profit	77,831		34,716		50,860		—		163,407		Gross profit	101,994		59,888		68,959		—		230,841
Operating, administrative and general expenses	Operating, administrative and general expenses	61,514		6,577		26,568		10,901		105,560		Operating, administrative and general expenses	62,977		8,590		29,591		11,401		112,559

Interest expense (income), net	Interest expense (income), net	7,452		2,021		1,146		(559)		10,060		Interest expense (income), net	13,300		2,012		1,923		(314)		16,921
Equity in earnings (losses) of affiliates, net		845		—		—		—		845
Other income (expense), net	Other income (expense), net	4,067		38		849		116		5,070		Other income (expense), net	(2,051)		18,490		866		(513)		16,792
Income (loss) before income taxes from continuing operations	Income (loss) before income taxes from continuing operations	$	13,777	$	26,156	$	23,995	$	(10,226)	$	53,702	Income (loss) before income taxes from continuing operations	$	23,666	$	67,776	$	38,311	$	(11,600)	$	118,153
Income (loss) before income taxes attributable to the noncontrolling interests		—		2,625		—		—		2,625
Income before income taxes attributable to the noncontrolling interests												Income before income taxes attributable to the noncontrolling interests	—		21,856		—		—		21,856
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	13,777	$	23,531	$	23,995	$	(10,226)	$	51,077	Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	23,666	$	45,920	$	38,311	$	(11,600)	$	96,297

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. | Q2 ~~2022~~2023 Form 10-Q | 3129

Table of Contents

Trade

Operating results for the Trade segment ~~increased~~decreased by ~~$9.9~~$18.7 million ~~compared to the results of~~from the same period ~~last~~of the prior year. Sales and merchandising revenues ~~increased~~decreased by ~~$799.9~~$401.0 million and cost of sales and merchandising revenues ~~increased~~decreased by ~~$775.7~~$379.7 million ~~for a favorable net~~that resulted in decreased gross profit ~~impact~~ of ~~$24.2~~$21.3 million. The ~~increase to~~vast majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues is attributable to sharp commodity price decreases from the ~~result of increased~~prior year as the war in Ukraine created uncertainty around global supply which drove commodity prices ~~and volumes. Much of the volume increase is related to the opening of the international merchandising office~~higher in ~~the second half of prior year.~~2022. The ~~increase~~decrease in gross profit was ~~driven by~~ a ~~strong performance~~result of a $13.1 million decline from lower elevation margins in our ~~domestic assets, particularly around our core footprint~~asset-based business and a $10.2 million decline in the ~~eastern grain belt, along with well-positioned inventory in our in our feed~~premium ingredients business, ~~that led to strong margins.~~as the exceptional prior year results benefited from the significant rise in commodity prices.

Operating, administrative and general expenses increased by ~~$1.5~~$6.2 million. The increase from the prior year is primarily related to ~~higher labor~~$3.3 million in additional bad debt expense, $1.7 million in additional clean-up costs asfrom a ~~result of new locations opened~~prior year fire at a Michigan grain asset and $1.1 million in ~~the second half of 2021.~~additional insurance expenses.

Interest expense ~~increased~~decreased by ~~$5.8~~$2.4 million due to ~~both higher~~reduced short-term borrowings ~~and interest rates on the Company's short-term line of credit compared~~from lower commodity prices in addition to the ~~prior year.~~business managing working capital usage in the higher interest rate environment in 2023.

~~Equity in earnings~~Other income, net increased by $6.4 million from the same quarter of ~~affiliates decreased by $6.9 million mainly as~~2022. This increase was a result of an impairment of one of the Company's equity method investments of approximately $4.5 ~~million.~~million in the prior year in addition to $2.0 million from insurance recoveries in the current year.

Renewables

Operating results for the Renewables segment ~~increased~~declined by ~~$22.4~~$7.0 million from the same period last year. Sales and merchandising revenues ~~increased~~decreased by ~~$266.0~~$4.8 million and cost of sales and merchandising revenues ~~increased~~decreased by ~~$240.9~~$13.2 million compared to prior year results. As a result, gross profit increased by ~~$25.2~~$8.4 million compared to ~~2021~~2022 results. ~~Most~~The deconsolidation of ELEMENT in the ~~increase to~~second quarter resulted in a reduction of both sales and merchandising revenues and cost of sales isand merchandising revenues of approximately $60 million. The reduction of both sales and merchandising revenues and cost of sales and merchandising revenues were partially offset by increased third-party trading volumes mainly in the ~~result of increased corn and ethanol commodity prices.~~renewable diesel feedstocks merchandising business. The increase to gross profit in the current period results reflect ~~stronger production~~a $27.7 million margin improvement at the ethanol plants, primarily from improved ethanol margins and ~~yields. Included in pre-tax income in the quarter is $24.4~~increased co-product values which was partially offset by unfavorable unrealized mark-to-market adjustments of $21.8 million ~~of positive mark-to-market impact of which nearly $18 million are reversals of prior mark-to-market losses. This~~when compared to ~~positive mark-to-market impacts of $13.5 million in~~ the ~~second quarter of 2021.~~prior year.

Operating, administrative and general expenses ~~increased~~decreased by ~~$2.0~~$1.0 million ~~primarily due to higher labor and utility costs~~ from the prior ~~year.~~year, of which, the majority was due to the deconsolidation of ELEMENT operations early in the second quarter.

Other income, ~~increased by $18.5 million, and almost all of the increase~~net decreased from the prior year ~~was a result of~~by $11.0 million due to $17.6 million in proceeds received in the ~~proceeds received~~prior year as a part of the USDA Biofuel Producer ~~Relief Program that was enacted as~~Program. In 2023, the Company recorded a ~~part~~$6.5 million gain on the deconsolidation of the ~~CARES Act, of which approximately half of these proceeds were attributable to the noncontrolling interest.~~ELEMENT joint venture.

~~Plant~~ Nutrient & Industrial

Operating results for the ~~Plant~~ Nutrient & Industrial segment increased by ~~$14.3~~$4.3 million compared to the same period in the prior year. Sales and merchandising revenues ~~increased~~decreased by ~~$148.9~~$24.7 million and cost of sales and merchandising revenues ~~increased~~decreased by ~~$130.8~~$28.7 million resulting in an ~~$18.1~~$4.0 million increase in gross profit. The decrease in sales and merchandising revenues and cost of sales and merchandising revenues was due to fertilizer prices decreasing approximately 50% from the prior year. This decrease in fertilizer prices from the prior year was partially offset by increased demand as volumes sold increased by approximately 21% in the second quarter of the current year. The increase in gross profit was mainly driven by ~~very strong~~a $12.4 million favorable impact from the increased volumes sold which was partially offset by an $8.4 million decrease in sales margins ~~across the Ag Supply Chain and Specialty Liquids product lines due to strong grower income and well-positioned fertilizer inventory despite lower volumes sold.~~

~~Operating, administrative and general expenses increased by $3.0 million due to increased labor costs~~ from the prior year.

~~Interest expense increased by $0.8 million due to higher interest rates and borrowings.~~

Other

~~Operating results~~Results for the quarter ~~declined~~improved by ~~$1.4~~$1.9 million compared to the same period in the prior year. The ~~increase~~improvement in ~~operating losses~~results was primarily driven by ~~higher operating, administrative and general expenses due~~a $1.0 million reduction of incentive compensation expense when compared to ~~increased variable incentive-based compensation as a result~~the same quarter of ~~improved company-wide performance year-over-year.~~

prior year.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 3230

Table of Contents

Income Taxes

For the three months ended June 30, 2023, the Company recorded income tax expense from continuing operations of $21.7 million. The Company's effective tax rate was 20.8% on income before taxes from continuing operations of $104.4 million. The difference between the 20.8% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of non-controlling interest offset by state and local income taxes and nondeductible compensation. During the three months ended June 30, 2023, discrete tax expense of $1.4 million was recorded on income before taxes of $6.5 million related to a gain on the deconsolidation of a joint venture.

For the three months ended June 30, 2022, the Company recorded income tax expense from continuing operations of $15.8 million. The Company's effective tax rate was 13.3% on income ~~before taxes~~ from continuing operations of $118.2 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 offset by state and local taxes and nondeductible compensation.

The Andersons, Inc. | Q2 2023 Form 10-Q | 31

Table of Contents

Comparison of the six months ended June 30, 2023 with the six months ended June 30, 2022 including a reconciliation of GAAP to non-GAAP measures:


	Six months ended June 30, 2023
(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	$	5,574,590	$	1,717,297	$	609,534	$	—	$	7,901,421
Cost of sales and merchandising revenues	5,376,701		1,633,202		521,570		—		7,531,473
Gross profit	197,889		84,095		87,964		—		369,948
Operating, administrative and general expenses	141,126		16,472		53,018		22,626		233,242
Asset impairment	—		87,156		—		—		87,156
Interest expense (income), net	22,720		4,685		4,165		(992)		30,578

Other income, net	10,311		8,309		1,346		479		20,445
Income (loss) before income taxes from continuing operations	$	44,354	$	(15,909)	$	32,127	$	(21,155)	$	39,417
Income (loss) before income taxes attributable to the noncontrolling interests	—		(16,727)		—		—		(16,727)
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	44,354	$	818	$	32,127	$	(21,155)	$	56,144


	Six months ended June 30, 2022
(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Sales and merchandising revenues	$	6,182,448	$	1,565,798	$	680,325	$	—	$	8,428,571
Cost of sales and merchandising revenues	6,012,835		1,490,719		574,641		—		8,078,195
Gross profit	169,613		75,079		105,684		—		350,376
Operating, administrative and general expenses	122,520		16,480		54,916		20,630		214,546

Interest expense (income), net	21,487		3,779		3,384		(870)		27,780

Other income (expense), net	1,729		18,918		1,670		(1,607)		20,710
Income (loss) before income taxes from continuing operations	$	27,335	$	73,738	$	49,054	$	(21,367)	$	128,760
Income (loss) before income taxes attributable to the noncontrolling interests	—		22,303		—		—		22,303
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations	$	27,335	$	51,435	$	49,054	$	(21,367)	$	106,457

The Andersons, Inc. | Q2 2023 Form 10-Q | 32

Table of Contents

Trade

Operating results for the Trade segment increased by $17.0 million from the prior year. Sales and merchandising revenues decreased by $607.9 million and cost of sales and merchandising revenues decreased by $636.1 million for an increased gross profit impact of $28.3 million. The vast majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues is attributable to sharp commodity price decreases from the prior year as the war in Ukraine created uncertainty around global supply which drove commodity prices higher in 2022. The $28.3 million increase in gross profit was mainly related to the performance of both the assets and merchandising businesses. The asset-based business contributed approximately $10.4 million to gross profit as it recorded approximately $16.1 million worth of inventory insurance recoveries, which were partially offset by lower elevation margins when compared to the prior year. The merchandising business contributed approximately $19.7 million to gross profit as well-positioned inventories generated strong margins, with a $9.4 million decline in the premium ingredients business that couldn't repeat exceptional prior year results from the significant rise in commodity prices that occurred during that period.

Operating, administrative and general expenses increased by $18.6 million from the same period of prior year. The main drivers of the increase relate to an additional $5.2 million in insurable clean-up costs in the current quarter related to a fire at a Michigan grain asset, $5.0 million from new merchandising locations, $3.3 million in additional bad debt expense, and $2.0 million in increased insurance expenses.

Interest expense increased by $1.2 million due to rising interest rates which were partially offset by lower short-term borrowings as the Company continues to manage working capital.

Other income, net increased by $8.6 million from the same period of 2022. The increase was primarily attributable to favorable changes in foreign currency of $5.4 million when compared to the prior year along with approximately $2.0 million of property insurance recoveries in the current year.

Renewables

Operating results for Renewables decreased by $50.6 million from the same period of prior year, primarily due to the asset impairment charge discussed below. Sales and merchandising revenues increased by $151.5 million and cost of sales and merchandising revenues increased by $142.5 million compared to prior year. As a result, gross profit increased by $9.0 million to the prior year. The increase in sales and merchandising revenues and cost of sales and merchandising revenues are mainly due to increased third-party trading volumes mainly in the renewable diesel feedstocks as that business has grown significantly from the prior year. The increase in volumes was partially offset from the tapering down of operations at the ELEMENT facility and the ultimate deconsolidation of the entity that occurred in April of 2023 resulting in a reduction from the prior period of approximately $65 million in sales and merchandising revenues and cost of sales and merchandising revenues, respectively. The remainder of the decrease is associated to decreased commodity prices that were partially offset by higher volumes in the third-party trading of renewable diesel feedstocks. The gross profit associated with the ethanol plants was $23.8 million higher than the prior year from improved ethanol crush margins and increased co-product values which was partially offset by unfavorable unrealized mark-to-market adjustments of $14.0 million when compared to the prior year.

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 was a consolidated subsidiary of the Company at the time, the entire impairment charge is represented in Asset impairment.

Interest expense increased by $0.9 million due to rising interest rates on the Company's short-term line of credit compared to the prior year.

Other income, net decreased from the prior year by $10.6 million due to $17.6 million in proceeds received in the prior year as a part of the USDA Biofuel Producer Program that was enacted as a part of the CARES Act. In 2023, the Company recorded a $6.5 million gain on the deconsolidation of the ELEMENT joint venture.

The Andersons, Inc. | Q2 2023 Form 10-Q | 33

Table of Contents

Nutrient & Industrial

Operating results for the Nutrient & Industrial segment decreased by $16.9 million compared to record results through the second quarter of prior year. Sales and merchandising revenues decreased $70.8 million and cost of sales and merchandising revenues decreased by $53.1 million resulting in decreased gross profit of $17.7 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 half of 2022. Although fertilizer prices decreased approximately 50% from the prior year, the Company experienced a significant increase in volumes in the later stages of the first half of 2023 as demand shifted from first quarter to the second which partially offset the impact of decreased fertilizer prices when compared to the prior year. Gross profit decreased from the prior year by approximately $24.8 million due to margin decreases and was partially offset by increased sales volumes of $7.1 million.

Operating, administrative and general expenses decreased by $1.9 million due to reduced incentive compensation when compared to results in the prior year.

Interest expense increased by $0.8 million due to rising interest rates on the Company's short-term line of credit compared to the prior year.

Other

Other expenses were consistent with the same period last year as higher health insurance claims from the Company's self-funded medical insurance plan in the current year were largely offset by a modest gain on a cost method investment.

Income Taxes

For the six months ended June 30, 2023, the Company recorded an income tax expense from continuing operations of $15.8 million. The Company's effective tax rate was 40.2% on income before taxes from continuing operations of $39.4 million. The difference between the ~~13.3%~~40.2% effective tax rate and the U.S. federal statutory tax rate of ~~21%~~21.0% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes and nondeductible compensation. During the six months ended June 30, 2023, a net discrete income tax benefit of $10.6 million was recorded on a net loss before taxes of $88.8 million related to the current year operations, impairment charge, and gain on the deconsolidation of a joint venture.

For the six months ended June 30, 2022, the Company recorded income tax expense from continuing operations of $19.9 million. The Company’s effective tax rate was 15.4% on income from continuing operations of $128.8 million. The effective tax rate differs from the U.S. federal statutory rate of 21.0% due to the tax impact of non-controlling interest as well as certain discrete derivatives and hedging activities offset by state and local income taxes and nondeductible compensation.

~~For~~The Company’s subsidiary partnership returns are under federal tax examination by the ~~three months ended June 30, 2021,~~Internal Revenue Service (“IRS”) for the ~~Company recorded~~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 these examinations could change our unrecognized tax benefits and favorably impact income tax expense ~~from continuing operations~~by a range of ~~$9.7~~$2.9 million ~~at an effective tax rate of 18.0%. The difference between the 18.0% effective tax rate and the U.S. federal statutory tax rate of 21% is due~~ to ~~the tax impact of certain discrete derivatives and hedging activities offset by state and local taxes and nondeductible compensation.~~

$8.1 million.

The Andersons, Inc. | Q2 ~~2022 Form 10-Q | 33~~

~~Table of Contents~~

~~Operating Results~~

~~Comparison of the six months ended June 30, 2022 with the six months ended June 30, 2021 including a reconciliation of GAAP to non-GAAP measures:~~

Six months ended June 30, 2022
(in thousands) Trade Renewables Plant Nutrient Other Total
Sales and merchandising revenues $ 6,182,448 $ 1,565,798 $ 680,325 $ — $ 8,428,571
Cost of sales and merchandising revenues 6,012,835 1,490,719 574,641 — 8,078,195
Gross profit 169,613 75,079 105,684 — 350,376
Operating, administrative and general expenses 122,520 16,480 54,916 20,630 214,546
Interest expense (income), net 21,487 3,779 3,384 (870) 27,780
Equity in earnings (losses) of affiliates, net (6,278) — — — (6,278)
Other income (expense), net 8,007 18,918 1,670 (1,607) 26,988
Income (loss) before income taxes from continuing operations $ 27,335 $ 73,738 $ 49,054 $ (21,367) $ 128,760
Income (loss) before income taxes attributable to the noncontrolling interests — 22,303 — — 22,303
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations $ 27,335 $ 51,435 $ 49,054 $ (21,367) $ 106,457

Six months ended June 30, 2021
(in thousands) Trade Renewables Plant Nutrient Other Total
Sales and merchandising revenues $ 4,280,377 $ 1,059,486 $ 490,661 $ — $ 5,830,524
Cost of sales and merchandising revenues 4,129,989 1,016,287 407,400 — 5,553,676
Gross profit 150,388 43,199 83,261 — 276,848
Operating, administrative and general expenses 118,445 13,233 49,967 20,913 202,558
Interest expense (income), net 14,503 4,094 2,212 (760) 20,049
Equity in earnings (losses) of affiliates, net 2,639 — — — 2,639
Other income (expense), net 7,553 1,365 1,436 584 10,938
Income (loss) before income taxes from continuing operations $ 27,632 $ 27,237 $ 32,518 $ (19,569) $ 67,818
Income (loss) before income taxes attributable to the noncontrolling interests — 780 — — 780
Non-GAAP Income (loss) before income taxes attributable to the Company from continuing operations $ 27,632 $ 26,457 $ 32,518 $ (19,569) $ 67,038

~~Trade~~

Operating results for the Trade segment were consistent with the same period of prior year. Sales and merchandising revenues increased by $1,902.1 million and cost of sales and merchandising revenues increased by $1,882.8 million for an increased gross profit impact of $19.2 million. Most of the increase to sales and merchandising revenues and cost of sales and merchandising revenues was a result of increased commodity prices and volumes. Much of the volume increase is related to the opening of the international merchandising office in the second half of prior year. The increase in gross profit was driven by a strong elevation margins in our domestic assets, along with well-positioned inventories in our feed ingredients business that led to strong margins. These factors were partially offset by the 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 by $4.1 million. The increase from the prior year is primarily related to higher labor costs as a result of new locations opened in the second half of 2021.

~~Interest expense increased by $7.0 million due to both higher borrowings and interest rates on the Company's short-term line of credit compared to the prior year.~~

~~The Andersons, Inc. | Q2 2022~~2023 Form 10-Q | 34

Table of Contents

Equity in earnings of affiliates decreased by $8.9 million mainly as a result of an impairment of one of the Company's equity method investments of approximately $4.5 million combined with favorable results from the same equity method investment in the prior year that didn't recur in 2022.

~~Renewables~~

Operating results for Renewables increased by $25.0 million from the same period last year. Sales and merchandising revenues increased by $506.3 million and cost of sales and merchandising revenues increased by $474.4 million compared to prior year. As a result, gross profit increased by $31.9 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 and yields across the ethanol plants, improved co-product values and strong merchandising margins. Unrealized mark-to-market adjustments improved approximately $3.7 million from the prior year.

~~Operating, administrative and general expenses increased by $3.2 million primarily due to higher labor and utility costs from the prior year.~~

Other income increased by $17.6 million and almost all of the increase from the prior year was a result of the proceeds received as a part of the USDA Biofuel Producer Relief Program that was enacted as a part of the CARES Act, of which approximately half of these proceeds were attributable to the noncontrolling interest.

~~Plant Nutrient~~

Operating results for the Plant Nutrient segment increased by $16.5 million compared to the same period in the prior year. Sales and merchandising revenues increased $189.7 million and cost of sales and merchandising revenues increased by $167.2 million resulting in increased gross profit of $22.4 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 market. The most significant margin improvements came from Ag Supply Chain and Specialty Liquids product lines.

~~Operating, administrative and general expenses increased by $4.9 million due to increased labor costs from the prior year.~~

~~Interest expense increased by $1.2 million due to higher interest rates and borrowings.~~

~~Other~~

Operating results declined by $1.8 million from the same period last year. The decrease in other income, net from the prior year was due to interest received on a tax refund as a result of the CARES Act that did not recur in current year.

~~Income Taxes~~

For the six months ended June 30, 2022, the Company recorded income tax expense from continuing operations of $19.9 million. The Company's effective tax rate was 15.4% on income before taxes from continuing operations of $128.8 million. The difference between the 15.4% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of non-controlling interest as well as certain discrete derivatives and hedging activities offset by state and local income taxes and nondeductible compensation.

For the six months ended June 30, 2021, the Company recorded income tax expense from continuing operations of $14.0 million at an effective tax rate of 20.7%. The difference between the 20.7% effective tax rate and the U.S. federal statutory tax rate of 21% due to the tax impact of certain discrete derivatives and hedging activities offset by state and local taxes and nondeductible compensation.

~~The Andersons, Inc. | Q2 2022 Form 10-Q | 35~~

~~Table of Contents~~

Liquidity and Capital Resources

Working Capital

At June 30, ~~2022,~~2023, the Company had working capital from continuing operations of ~~$984.0~~$1,144.0 million, an increase of ~~$443.6~~$160.0 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)	June 30, 2022		June 30, 2021		Variance		(in thousands)	June 30, 2023		June 30, 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	$	86,035	$	27,538	$	58,497	Cash and cash equivalents	$	96,293	$	86,035	$	10,258
Accounts receivable, net	Accounts receivable, net	1,141,167		702,869		438,298		Accounts receivable, net	1,030,271		1,141,167		(110,896)
Inventories	Inventories	1,618,326		904,924		713,402		Inventories	990,789		1,618,326		(627,537)
Commodity derivative assets – current	Commodity derivative assets – current	638,357		507,148		131,209		Commodity derivative assets – current	347,684		638,357		(290,673)
Other current assets	Other current assets	70,367		63,266		7,101		Other current assets	72,228		70,367		1,861
Total current assets from continuing operations	Total current assets from continuing operations	$	3,554,252	$	2,205,745	$	1,348,507	Total current assets from continuing operations	$	2,537,265	$	3,554,252	$	(1,016,987)
Current Liabilities from Continuing Operations:	Current Liabilities from Continuing Operations:							Current Liabilities from Continuing Operations:
Short-term debt	Short-term debt	1,161,428		757,271		404,157		Short-term debt	102,752		1,161,428		(1,058,676)
Trade and other payables	Trade and other payables	772,996		543,503		229,493		Trade and other payables	641,376		772,996		(131,620)
Customer prepayments and deferred revenue	Customer prepayments and deferred revenue	184,154		55,943		128,211		Customer prepayments and deferred revenue	189,947		184,154		5,793
Commodity derivative liabilities – current	Commodity derivative liabilities – current	185,903		90,366		95,537		Commodity derivative liabilities – current	251,101		185,903		65,198
Current maturities of long-term debt	Current maturities of long-term debt	53,951		50,069		3,882		Current maturities of long-term debt	27,511		53,951		(26,440)
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	211,830		168,221		43,609		Accrued expenses and other current liabilities	180,552		211,830		(31,278)
Total current liabilities from continuing operations	Total current liabilities from continuing operations	$	2,570,262	$	1,665,373	$	904,889	Total current liabilities from continuing operations	$	1,393,239	$	2,570,262	$	(1,177,023)
Working Capital from Continuing Operations	Working Capital from Continuing Operations	$	983,990	$	540,372	$	443,618	Working Capital from Continuing Operations	$	1,144,026	$	983,990	$	160,036

Current assets from continuing operations as of June 30, ~~2022 increased $1,348.5~~2023 decreased $1,017.0 million in comparison to those as of June 30, ~~2021.~~2022. This ~~increase~~decrease was ~~noted~~primarily related to the change in ~~mainly accounts receivable,~~ 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. The Company also opened an international merchandising office in the third quarter of the prior year which is contributing to the increase in working capital as there is a substantial volume of commodities held in that business in 2022.

Current liabilities from continuing operations ~~increased $904.9~~decreased $1,177.0 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 a result of 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


		Six Months Ended					Six Months Ended
(in thousands)	(in thousands)	June 30, 2022		June 30, 2021		(in thousands)	June 30, 2023		June 30, 2022
Net cash used in operating activities		$	(721,799)	$	(245,494)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	$	207,404	$	(721,799)
Net cash used in investing activities	Net cash used in investing activities	(30,094)		(23,474)		Net cash used in investing activities	(71,673)		(30,094)
Net cash provided by financing activities		622,113		267,550
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(154,987)		622,113

Operating Activities

Our operating activities provided cash of $207.4 million and used cash of $721.8 ~~million and $245.5~~ million in the first six months of ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in cash ~~used~~provided was primarily due to the ~~increased~~decreased working capital needs ~~as discussed above,~~ driven by significant ~~increases~~decreases in agricultural commodity prices ~~and~~when compared to the ~~new international merchandising locations being included~~same period in the ~~current~~prior year. When the changes in operating assets and liabilities are removed and excluding inventory insurance recoveries, cash provided by operating activities was slightly lower than prior ~~year due to the timing of tax refunds and credits in the first quarter of 2021.~~

year.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 3635

Table of Contents

Investing Activities

Investing activities used cash of ~~$30.1~~$71.7 million through the first six months of ~~2022~~2023 compared to ~~cash used of $23.5~~$30.1 million in the prior period. ~~The increase~~Spending for purchases of property, plant and equipment increased by approximately $31.5 million from the prior ~~period was a result~~year from increased investments across all segments. The prior year also includes approximately $6.2 million of ~~a modest increase in capital spending on continuing operations~~additional net proceeds from the ~~prior year.~~Company's exit of the Rail business.

We expect to invest approximately ~~$100~~$125 million to $150 million in property, plant and equipment in ~~2022 related to continuing operations.~~2023, with spending split evenly between growth projects and maintenance.

Financing Activities

Financing activities used cash of $155.0 million and provided cash of $622.1 ~~million and $267.6~~ million for the six months ended June 30, ~~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 and the related need for short-term borrowings. ~~The~~Agricultural commodity prices have decreased in the current year and the Company is operating in a much more stable pricing environment in 2023 which requires much less borrowing on the Company's short-term ~~debt balance of $1,161.4 million is closely aligned to the balance of readily marketable inventories of $1,214.4 million as of June 30, 2022~~.credit facilities.

The Company is party to borrowing arrangements with a syndicate of banks that provide a total of ~~$2,501.7~~$1,869.1 million in borrowing capacity. Of the total capacity, ~~$395.7~~$265.4 million is non-recourse to the Company. As of June 30, ~~2022,~~2023, the Company had ~~$1,315.2~~$1,740.7 million available for borrowing with ~~$277.5~~$231.1 million of that total being non-recourse to the Company.

The Company paid ~~$12.2~~$12.5 million in dividends in the first six months of ~~2022~~2023 compared to ~~$11.7~~$12.2 million paid in the prior period. The Company paid dividends of ~~$0.180~~$0.185 and ~~$0.175~~$0.18 per common share in January and April of ~~2022~~2023 and ~~2021,~~2022, respectively. On June ~~16, 2022,~~23, 2023, the Company declared a cash dividend of ~~$0.180~~$0.185 per common share payable on July ~~22, 2022~~24, 2023, to shareholders of record on July ~~1, 2022.~~3, 2023.

Certain of our long-term borrowings include covenants that, among other things, impose minimum levels of working capital and various debt leverage ratios. The Company is in compliance with all covenants as of June 30, 2023. In addition, certain of our long-term borrowings are collateralized by first mortgages on various facilities.

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 June 30, ~~2022,~~2023, the Company had standby letters of credit outstanding of ~~$5.1~~$25.8 million.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 3736

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 six months ended June 30, ~~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 June 30, ~~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 second 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. | Q2 ~~2022~~2023 Form 10-Q | 3837

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~~Refer to Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 13, “Commitments and Contingencies,” inIn 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 June 30, 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. | Q2 2022 Form 10-Q | 39~~

~~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)
April 2022 — $ — — $ —
May 2022 588 50.26 — —
June 2022 — — — —
Total 588 $ 50.26 — $ 100,000,000


Periods	Total Number of Shares Purchased	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 (a)






April 2023	—	$	—	—	$	85,608,170
May 2023	2,113	35.95		2,113	85,532,211
June 2023	—	—		—	85,532,211
Total	2,113	$	35.95	2,113	$	85,532,211

~~(1) During the three months ended June 30, 2022, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.~~

~~(2)~~(a) 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 June 30, ~~2022, none~~2023, $14.5 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 5. Other Information

Based on the previously reported voting results at the Company’s annual meeting of shareholders on the advisory proposal on the frequency of say-on-pay votes, the Company will continue to include an advisory vote on named executive officer compensation every one (1) year until the next required vote on the frequency of shareholder advisory votes on the compensation of named executive officers.

On May 24, 2023, Brian K. Walz, Treasurer, entered into a Rule 105b-1 plan to sell up to 3,414 shares of the Company's common stock, based on certain price parameters, from August 25, 2023, to August 30, 2024.

The Andersons, Inc. | Q2 2023 Form 10-Q | 38

Table of Contents

Item 6. Exhibits



Exhibit Number						Description

10.1						~~Incremental Revolving Loan Amendment to Credit Agreement~~TERM LOAN AGREEMENT Dated as of April 3, 2023 among THE ANDERSONS, INC., as the Borrower, FARM CREDIT MID-AMERICA, PCA, as Administrative Agent, and THE LENDERS PARTY HERETO FARM CREDIT MID-AMERICA, PCA, as Sole Lead Arranger and Sole Bookrunner

10.2*						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 JUNE 15, 2022)

10.3						The Andersons, Inc. 2004 Employee Share Purchase Plan, Restated and Amended January 2023

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

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 54 are not applicable and have been omitted.

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 4039

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: August ~~8, 2022~~3, 2023						/s/ Patrick E. Bowe
						Patrick E. Bowe
						President and Chief Executive Officer

Date: August ~~8, 2022~~3, 2023						/s/ Brian A. Valentine
						Brian A. Valentine
						Executive Vice President and Chief Financial Officer

The Andersons, Inc. | Q2 ~~2022~~2023 Form 10-Q | 4140


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)






April 2022	—	$	—	—	$	—
May 2022	588	50.26		—	—
June 2022	—	—		—	—
Total	588	$	50.26	—	$	100,000,000