Segment Information | 5. SEGMENT INFORMATION The company reports the financial and operating performance for the following four operating segments: (1) ethanol production, which includes 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 and 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: Ethanol production: Revenues from external customers $ 573,399 $ 620,180 $ 1,726,418 $ 1,857,356 Intersegment revenues 3,113 3,579 9,285 6,624 Total segment revenues 576,512 623,759 1,735,703 1,863,980 Agribusiness and energy services: Revenues from external customers 174,290 164,604 546,151 483,670 Intersegment revenues 12,692 14,406 38,249 33,679 Total segment revenues 186,982 179,010 584,400 517,349 Food and ingredients: Revenues from external customers 251,113 114,750 755,109 329,432 Intersegment revenues 38 38 118 113 Total segment revenues 251,151 114,788 755,227 329,545 Partnership: Revenues from external customers 1,298 1,701 4,546 4,724 Intersegment revenues 24,472 24,748 72,949 74,019 Total segment revenues 25,770 26,449 77,495 78,743 Revenues including intersegment activity 1,040,415 944,006 3,152,825 2,789,617 Intersegment eliminations (40,315) (42,771) (120,601) (114,435) Revenues as reported $ 1,000,100 $ 901,235 $ 3,032,224 $ 2,675,182 Refer to Note 2 - Revenue , for further disaggregation of revenue by operating segment. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of goods sold: Ethanol production $ 560,719 $ 590,904 $ 1,706,891 $ 1,802,688 Agribusiness and energy services 179,432 168,735 546,318 487,239 Food and ingredients 236,150 98,854 702,355 281,898 Partnership - - - - Intersegment eliminations (39,917) (42,706) (120,220) (114,123) $ 936,384 $ 815,787 $ 2,835,344 $ 2,457,702 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Operating income (loss): Ethanol production $ (15,961) $ 3,107 $ (60,704) $ (25,950) Agribusiness and energy services 2,851 3,686 22,081 13,138 Food and ingredients 8,324 10,132 33,890 30,472 Partnership 16,725 16,290 48,214 47,707 Intersegment eliminations (325) 8 (113) (147) Corporate activities (10,965) (12,507) (34,879) (30,898) $ 649 $ 20,716 $ 8,489 $ 34,322 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 EBITDA: Ethanol production $ 8,475 $ 25,570 $ 4,742 $ 38,521 Agribusiness and energy services 3,537 5,150 24,035 15,910 Food and ingredients 12,151 13,272 47,192 39,741 Partnership 17,913 17,589 51,674 51,549 Intersegment eliminations (325) 8 (113) (147) Corporate activities (9,716) (11,212) (30,533) (27,275) $ 32,035 $ 50,377 $ 96,997 $ 118,299 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Depreciation and amortization: Ethanol production $ 24,289 $ 20,959 $ 65,284 $ 61,443 Agribusiness and energy services 675 1,457 1,923 2,776 Food and ingredients 3,780 3,139 10,628 9,259 Partnership 1,120 1,280 3,406 3,781 Corporate activities 849 999 2,769 2,846 $ 30,713 $ 27,834 $ 84,010 $ 80,105 The following table reconciles net income (loss) to EBITDA (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income (loss) $ (7,419) $ 39,429 $ (23,123) $ 29,284 Interest expense 23,399 31,889 67,548 69,815 Income tax benefit (14,658) (48,775) (31,438) (60,905) Depreciation and amortization 30,713 27,834 84,010 80,105 EBITDA $ 32,035 $ 50,377 $ 96,997 $ 118,299 The following table sets forth total assets by operating segment (in thousands): September 30, 2018 December 31, 2017 Total assets (1) : Ethanol production $ 1,075,469 $ 1,144,459 Agribusiness and energy services 404,903 554,981 Food and ingredients 884,205 725,232 Partnership 71,511 74,935 Corporate assets 252,554 295,217 Intersegment eliminations (3,808) (10,174) $ 2,684,834 $ 2,784,650 (1) Asset balances by segment exclude intercompany balances. |