Segment Information | 5 . SEGMENT INFORMATION The company reports the financial and operating performance for the following four operating segments: (1) ethanol production, which inc ludes the production of ethanol and distillers grains , and recovery of corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which includes cattle feeding, vinegar production an d food-grade corn oil operations and (4) partnership, which includes fuel storage and transportation services. Corporate activities include selling , general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment. During the normal course of business, the operating segments conduct business with each other. For example, the agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains and corn oil for the ethanol production segment. The partnership segment provides fuel storage and transportation services for the ethanol production segment. These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values. Consequently, these transactions affect segment performance; however, they do not impact the company’s consolidated results since the revenues and corresponding costs are eliminated. The following tables set forth certain financial data for the company’s operating segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenues: Ethanol production: Revenues from external customers $ 589,256 $ 617,297 $ 1,153,019 $ 1,237,176 Intersegment revenues 4,219 1,549 6,172 3,045 Total segment revenues 593,475 618,846 1,159,191 1,240,221 Agribusiness and energy services: Revenues from external customers 170,074 150,755 371,861 319,066 Intersegment revenues 14,128 9,781 25,557 19,273 Total segment revenues 184,202 160,536 397,418 338,339 Food and ingredients: Revenues from external customers 225,887 116,660 503,996 214,682 Intersegment revenues 38 37 80 75 Total segment revenues 225,925 116,697 504,076 214,757 Partnership: Revenues from external customers 1,620 1,551 3,248 3,023 Intersegment revenues 24,220 23,514 48,477 49,271 Total segment revenues 25,840 25,065 51,725 52,294 Revenues including intersegment activity 1,029,442 921,144 2,112,410 1,845,611 Intersegment eliminations (42,605) (34,881) (80,286) (71,664) Revenues as reported $ 986,837 $ 886,263 $ 2,032,124 $ 1,773,947 Refer to Note 2 - Revenue , for further disaggregation of revenue by operating segment. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of goods sold: Ethanol production $ 581,613 $ 612,646 $ 1,146,172 $ 1,211,784 Agribusiness and energy services 165,174 152,110 366,886 318,504 Food and ingredients 206,440 100,009 466,205 183,044 Partnership - - - - Intersegment eliminations (42,602) (34,746) (80,303) (71,417) $ 910,625 $ 830,019 $ 1,898,960 $ 1,641,915 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Operating income (loss): Ethanol production $ (17,214) $ (22,459) $ (44,743) $ (29,057) Agribusiness and energy services 12,166 3,083 19,230 9,452 Food and ingredients 12,981 10,714 25,566 20,340 Partnership 16,129 14,798 31,489 31,417 Intersegment eliminations 144 (80) 212 (155) Corporate activities (12,441) (9,842) (23,914) (18,391) $ 11,765 $ (3,786) $ 7,840 $ 13,606 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 EBITDA: Ethanol production $ 3,362 $ (873) $ (3,733) $ 12,951 Agribusiness and energy services 12,796 3,747 20,498 10,760 Food and ingredients 19,044 13,955 35,041 26,469 Partnership 17,138 16,066 33,761 33,960 Intersegment eliminations 144 (80) 212 (155) Corporate activities (10,642) (8,742) (20,817) (16,063) $ 41,842 $ 24,073 $ 64,962 $ 67,922 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Depreciation and amortization: Ethanol production $ 20,559 $ 20,142 $ 40,995 $ 40,484 Agribusiness and energy services 618 659 1,248 1,319 Food and ingredients 3,444 3,240 6,848 6,120 Partnership 1,105 1,247 2,286 2,501 Corporate activities 1,097 900 1,920 1,847 $ 26,823 $ 26,188 $ 53,297 $ 52,271 The following table reconciles net income (loss) to EBITDA (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income (loss) $ 3,751 $ (11,796) $ (15,704) $ (10,145) Interest expense 22,021 19,430 44,149 37,926 Income tax benefit (10,753) (9,749) (16,780) (12,130) Depreciation and amortization 26,823 26,188 53,297 52,271 EBITDA $ 41,842 $ 24,073 $ 64,962 $ 67,922 The following table sets forth total assets by operating segment (in thousands): June 30, 2018 December 31, 2017 Total assets (1) : Ethanol production $ 1,090,323 $ 1,144,459 Agribusiness and energy services 438,139 554,981 Food and ingredients 704,624 725,232 Partnership 73,255 74,935 Corporate assets 290,902 295,217 Intersegment eliminations (11,470) (10,174) $ 2,585,773 $ 2,784,650 (1) Asset balances by segment exclude intercompany receivable balances. |