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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 06/30/2024
☐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
 
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THE ANDERSONS, INC.
(Exact name of the registrant as specified in its charter)
 
Ohio34-1562374
(State of incorporation or organization)(I.R.S. Employer Identification No.)
1947 Briarfield Boulevard
MaumeeOhio43537
(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 filerýAccelerated 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 34,068,496 common shares outstanding at July 26, 2024.

THE ANDERSONS, INC.
INDEX
 
 Page No.
PART I. FINANCIAL INFORMATION
PART II. OTHER INFORMATION



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,
 2024202320242023
Sales and merchandising revenues$2,795,205 $4,020,183 $5,513,422 $7,901,421 
Cost of sales and merchandising revenues2,619,834 3,798,246 5,209,731 7,531,473 
Gross profit175,371 221,937 303,691 369,948 
Operating, administrative and general expenses116,614 116,007 235,972 233,242 
Asset impairment— — — 87,156 
Interest expense, net6,611 13,953 13,133 30,578 
Other income, net5,200 12,441 16,728 20,445 
Income before income taxes57,346 104,418 71,314 39,417 
Income tax provision4,876 21,732 6,179 15,848 
Net income52,470 82,686 65,135 23,569 
Net income (loss) attributable to noncontrolling interests16,494 27,640 23,578 (16,727)
Net income attributable to The Andersons, Inc.$35,976 $55,046 $41,557 $40,296 
Average number of shares outstanding - basic34,060 33,744 33,996 33,683 
Average number of share outstanding - diluted34,339 34,165 34,302 34,193 
Earnings per share attributable to The Andersons, Inc. common shareholders:
Basic earnings per share attributable to The Andersons, Inc. common shareholders$1.06 $1.63 $1.22 $1.20 
Diluted earnings per share attributable to The Andersons, Inc. common shareholders$1.05 $1.61 $1.21 $1.18 
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 2024 Form 10-Q | 1
The Andersons, Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
 
 Three months ended June 30,Six months ended June 30,
 2024202320242023
Net income$52,470 $82,686 $65,135 $23,569 
Other comprehensive income (loss), net of tax:
Change in unrecognized actuarial loss and prior service cost(175)(189)(350)(377)
Foreign currency translation adjustments(1,965)2,669 (4,883)3,436 
Cash flow hedge activity(90)6,735 3,549 1,939 
Other comprehensive income (loss)(2,230)9,215 (1,684)4,998 
Comprehensive income50,240 91,901 63,451 28,567 
Comprehensive income (loss) attributable to the noncontrolling interests16,494 27,640 23,578 (16,727)
Comprehensive income attributable to The Andersons, Inc.$33,746 $64,261 $39,873 $45,294 
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 2024 Form 10-Q | 2

The Andersons, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
 (In thousands)
June 30,
2024		December 31,
2023		June 30,
2023
Assets
Current assets:
Cash and cash equivalents$530,386 $643,854 $96,293 
Accounts receivable, net743,550 762,549 1,030,271 
Inventories686,540 1,166,700 990,789 
Commodity derivative assets – current180,189 178,083 347,684 
Other current assets108,634 55,777 72,228 
Total current assets2,249,299 2,806,963 2,537,265 
Property, plant and equipment, net694,136 693,365 663,441 
Other asset, net356,378 354,679 369,340 
Total assets$3,299,813 $3,855,007 $3,570,046 
Liabilities and equity
Current liabilities:
Short-term debt$4,021 $43,106 $102,752 
Trade and other payables607,083 1,055,473 641,376 
Customer prepayments and deferred revenue124,424 187,054 189,947 
Commodity derivative liabilities – current 128,847 90,849 251,101 
Current maturities of long-term debt27,671 27,561 27,511 
Accrued expenses and other current liabilities192,683 232,288 180,552 
Total current liabilities1,084,729 1,636,331 1,393,239 
Long-term debt, less current maturities549,378 562,960 576,489 
Other long-term liabilities145,444 139,329 161,836 
Total liabilities1,779,551 2,338,620 2,131,564 
Commitments and contingencies (Note 11)
Shareholders’ equity:
Common shares, without par value (63,000 shares authorized and 34,083 shares at 6/30/2024 and 34,064 shares at 12/31/2023 and 6/30/2023)
143 142 142 
Preferred shares, without par value (1,000 shares authorized; none issued)
— — — 
Additional paid-in-capital378,453 387,210 380,376 
Treasury shares, at cost (14, 270 and 270 shares at 6/30/2024, 12/31/2023 and 6/30/2023, respectively)
(631)(10,261)(10,270)
Accumulated other comprehensive income21,181 22,865 25,482 
Retained earnings911,455 882,943 835,256 
Total shareholders’ equity of The Andersons, Inc.1,310,601 1,282,899 1,230,986 
Noncontrolling interests209,661 233,488 207,496 
Total equity1,520,262 1,516,387 1,438,482 
Total liabilities and equity$3,299,813 $3,855,007 $3,570,046 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q2 2024 Form 10-Q | 3
The Andersons, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Six months ended June 30,
 20242023
Operating Activities
Net income$65,135 $23,569 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization61,218 62,585 
Asset impairment— 87,156 
Other10,821 952 
Changes in operating assets and liabilities:
Accounts receivable15,284 207,867 
Inventories477,723 734,855 
Commodity derivatives36,010 102,753 
Other current and non-current assets(50,587)(1,247)
Payables and other current and non-current liabilities(550,797)(1,011,086)
Net cash provided by operating activities64,807 207,404 
Investing Activities
Acquisition of businesses, net of cash acquired(9,561)— 
Purchases of property, plant and equipment and capitalized software(55,389)(74,991)
Other6,812 3,318 
Net cash used in investing activities(58,138)(71,673)
Financing Activities
Net payments under short-term lines of credit(37,705)(173,384)
Proceeds from issuance of long-term debt— 100,000 
Payments of long-term debt(13,752)(35,861)
Distributions to noncontrolling interest owner(47,405)(24,344)
Dividends paid(12,993)(12,527)
Value of shares withheld for taxes(8,071)(6,616)
Other— (2,255)
Net cash used in financing activities(119,926)(154,987)
Effect of exchange rates on cash and cash equivalents(211)280 
Decrease in cash and cash equivalents(113,468)(18,976)
Cash and cash equivalents at beginning of period643,854 115,269 
Cash and cash equivalents at end of period$530,386 $96,293 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q2 2024 Form 10-Q | 4
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		Retained
Earnings		Noncontrolling
Interests		Total
Balance at March 31, 2023
$142 $377,768 $(11,006)$16,267 $786,420 $176,821 $1,346,412 
Net income55,046 27,640 82,686 
Other comprehensive income11,957 11,957 
Amounts reclassified from accumulated other comprehensive income(2,742)(2,742)
Distributions to noncontrolling interests(14,364)(14,364)
Deconsolidation of joint venture17,399 17,399 
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)
(76)(76)
Dividends declared ($0.185 per common share)
(6,245)(6,245)
Restricted share award dividend equivalents15 35 50 
Balance at June 30, 2023
$142 $380,376 $(10,270)$25,482 $835,256 $207,496 $1,438,482 
Balance at March 31, 2024
$142 $375,155 $(631)$23,411 $881,911 $195,662 $1,475,650 
Net income35,976 16,494 52,470 
Other comprehensive income1,201 1,201 
Amounts reclassified from accumulated other comprehensive income (3,431)(3,431)
Distributions to noncontrolling interests(2,495)(2,495)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (0 shares)
1 3,284 3,285 
Dividends declared ($0.19 per common share)
(6,473)(6,473)
Restricted share award dividend equivalents14 41 55 
Balance at June 30, 2024
$143 $378,453 $(631)$21,181 $911,455 $209,661 $1,520,262 
The Andersons, Inc. | Q2 2024 Form 10-Q | 5
Six Months Ended
 Common
Shares		Additional
Paid-in
Capital		Treasury
Shares		Accumulated
Other
Comprehensive Income		Retained
Earnings		Noncontrolling
Interests		Total
Balance at December 31, 2022
$142 $385,248 $(15,043)$20,484 $807,770 $231,168 $1,429,769 
Net income (loss)40,296 (16,727)23,569 
Other comprehensive income10,073 10,073 
Amounts reclassified from Accumulated other comprehensive income(5,075)(5,075)
Distributions to noncontrolling interests(24,344)(24,344)
Deconsolidation of joint venture17,399 17,399 
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)
(1,747)(1,747)
Dividends declared ($0.37 per common share)
(12,485)(12,485)
Restricted share award dividend equivalents622 165 (325)462 
Balance at June 30, 2023
$142 $380,376 $(10,270)$25,482 $835,256 $207,496 $1,438,482 
Balance at December 31, 2023
$142 $387,210 $(10,261)$22,865 $882,943 $233,488 $1,516,387 
Net income41,557 23,578 65,135 
Other comprehensive income5,928 5,928 
Amounts reclassified from Accumulated other comprehensive income(7,612)(7,612)
Distributions to noncontrolling interests(47,405)(47,405)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (256 shares)
1 (9,465)9,569 105 
Dividends declared ($0.38 per common share)
(12,943)(12,943)
Restricted share award dividend equivalents708 61 (102)667 
Balance at June 30, 2024
$143 $378,453 $(631)$21,181 $911,455 $209,661 $1,520,262 
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q2 2024 Form 10-Q | 6
The Andersons, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


1. Basis of Presentation and Recently Issued Accounting Standards

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (the “SEC”) in instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of The Andersons, Inc. and its wholly owned and controlled subsidiaries (the “Company”). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of financial position, results of operations and cash flows for the periods indicated. All intercompany accounts and transactions have been eliminated in consolidation.

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, 2024. An unaudited Condensed Consolidated Balance Sheet as of June 30, 2023, has been included as the Company operates in several seasonal industries.

The Condensed Consolidated Balance Sheet data at December 31, 2023, was derived from the audited Consolidated Financial Statements but does not include all disclosures required by GAAP. 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, 2023 (the “2023 Form 10-K”).

Variable Interest Entities ("VIEs")

The Company consolidates any VIE of which it is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. A variable interest holder is required to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when the Company is not considered the primary beneficiary. The Company evaluates its relationships with the VIEs on an ongoing basis to determine if it is the primary beneficiary.

The Company's Condensed Consolidated Financial Statements include the assets, liabilities and results of operations of VIEs for which the Company is deemed to be the primary beneficiary. The other equity holders’ interests are reflected in "Net income (loss) attributable to noncontrolling interests" in the Condensed Consolidated Statements of Operations and "Noncontrolling interests" in the Condensed Consolidated Balance Sheets.

On October 1, 2019, the Company formed The Andersons Marathon Holding Company ("TAMH") with MPC Investments, LLC ("Marathon") for the primary purpose of producing ethanol, dried distillers grains, and corn oil and TAMH has plants located in Iowa, Indiana, Michigan, and Ohio. The plants have a combined nameplate capacity of 405 million gallons of ethanol but have a history of outperforming the nameplate capacity. The Company has ownership of 50.1% of TAMH's common units and management has determined that TAMH is a VIE in which the Company is the primary beneficiary. Accordingly, the Company consolidates TAMH and records noncontrolling interest for the share of the entity owned by Marathon.

ELEMENT was structured as a limited liability company which began operations in 2019 for the primary purpose of producing ethanol and additional co-products such as dried distillers grain and corn oil. The Company held 51% of the membership units and the Company had acted as the manager of the facility. As a result, ELEMENT was concluded to be a variable interest entity in which the Company was the primary beneficiary and had been consolidated within the Company’s Consolidated Financial Statements. On April 18, 2023, ELEMENT was placed into receivership and a receiver was appointed, which took possession and control of the rights and interests of ELEMENT. 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 subsidiary. Accordingly, the Company deconsolidated ELEMENT at that time and began accounting for the subsidiary as an equity method investment. Therefore, operating results from January 1, 2023 to April 18, 2023, are included within the Condensed Consolidated Statements of Operations.
The Andersons, Inc. | Q2 2024 Form 10-Q | 7

The creditors of the consolidated VIEs do not have recourse to the Company other than to the assets of the consolidated VIEs. The following table summarizes the carrying amounts of the assets and liabilities of TAMH, the Company's only consolidated VIE for the periods presented in the Company’s Condensed Consolidated Balance Sheets:

 (In thousands)
June 30,
2024		December 31,
2023		June 30,
2023
Assets
Current assets:
Cash and cash equivalents$97,047 $153,258 $55,527 
Accounts receivable, net9,228 9,324 10,201 
Inventories47,079 61,270 73,703 
Other current assets5,530 6,844 8,920 
Total current assets158,884 230,696 148,351 
Property, plant and equipment, net271,073 270,379 269,179 
Other assets, net24,137 25,434 27,201 
Total assets$454,094 $526,509 $444,731 
Liabilities
Current liabilities$42,162 $51,020 $38,424 
Long-term liabilities9,940 12,010 14,757 
Total liabilities$52,102 $63,030 $53,181 

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning with the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on the Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning with the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on the Consolidated Financial Statements.

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 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)June 30,
2024		December 31,
2023		June 30,
2023
Grain and other agricultural products (a)$452,314 $886,725 $707,980 
Energy inventories (a)14,085 21,705 19,564 
Ethanol and co-products (a)108,407 104,349 142,978 
Plant nutrients and cob products111,734 153,921 120,267 
Total inventories$686,540 $1,166,700 $990,789 
(a) Includes RMI of $455.8 million, $862.5 million, and $691.7 million at June 30, 2024, December 31, 2023, and June 30, 2023, respectively.

The Andersons, Inc. | Q2 2024 Form 10-Q | 8

3. Property, Plant and Equipment

The components of Property, plant and equipment, net are as follows:
(in thousands)June 30,
2024		December 31,
2023		June 30,
2023
Land$31,008 $30,912 $31,838 
Land improvements and leasehold improvements84,019 82,438 81,470 
Buildings and storage facilities370,877 365,744 349,773 
Machinery and equipment977,948 951,544 891,368 
Construction in progress48,771 36,541 56,578 
1,512,623 1,467,179 1,411,027 
Less: accumulated depreciation 818,487 773,814 747,586 
Property, plant and equipment, net$694,136 $693,365 $663,441 

Depreciation expense on property, plant, and equipment was $24.6 million and $24.4 million for three months ended June 30, 2024, and 2023, respectively. Additionally, depreciation expense on property, plant and equipment was $49.3 million and $50.5 million for the six months ended June 30, 2024, and 2023, respectively.

In the first quarter of 2023, the Company recorded a $87.2 million impairment charge related to ELEMENT. The plant 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 impairment, the Company owned 51% of ELEMENT and it was a consolidated entity, as such, 49% of the impairment charge was represented in Net income (loss) attributable to noncontrolling interests in the Company's Condensed Consolidated Statements of Operations.


4. 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
The Andersons, Inc. | Q2 2024 Form 10-Q | 9
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 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 Condensed Consolidated Balance Sheets in Commodity derivative assets (liabilities) - current or if long-term in nature, Other assets, net or Other long-term liabilities:

(in thousands)June 30, 2024December 31, 2023June 30, 2023
Cash collateral paid (received)$(25,316)$24,439 $(15,290)
Fair value of derivatives75,903 24,237 85,123 
Net derivative asset position$50,587 $48,676 $69,833 

The following table presents, on a gross basis, current and non-current commodity derivative assets and liabilities:
June 30, 2024
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$276,764 $8,141 $12,625 $35 $297,565 
Commodity derivative liabilities(71,259)(96)(141,472)(7,756)(220,583)
Cash collateral paid (received)(25,316)— — — (25,316)
Balance sheet line item totals$180,189 $8,045 $(128,847)$(7,721)$51,666 

December 31, 2023
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$201,542 $1,496 $7,868 $13 $210,919 
Commodity derivative liabilities(47,898)(64)(98,717)(431)(147,110)
Cash collateral paid (received)24,439 — — — 24,439 
Balance sheet line item totals$178,083 $1,432 $(90,849)$(418)$88,248 

June 30, 2023
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$438,227 $3,959 $26,312 $59 $468,557 
Commodity derivative liabilities(75,253)(1,029)(277,413)(4,215)(357,910)
Cash collateral paid (received)(15,290)— — — (15,290)
Balance sheet line item totals$347,684 $2,930 $(251,101)$(4,156)$95,357 

The net pretax gains and losses on commodity derivatives not designated as hedging instruments included in the Company’s Condensed Consolidated Statements of Operations and the line items in which they are located are as follows:

 Three months ended June 30,Six months ended June 30,
(in thousands)2024202320242023
Gains (losses) on commodity derivatives included in Cost of sales and merchandising revenues$(6,168)$4,827 $13,173 $(22,741)
The Andersons, Inc. | Q2 2024 Form 10-Q | 10

The Company's volumes of commodity derivative contracts outstanding (on a gross basis) are as follows:
June 30, 2024
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn459,565 — — 
Soybeans33,415 — — 
Wheat101,022 — — 
Oats31,958 — — 
Ethanol— 241,555 — 
Dried distillers grain— — 872 
Soybean meal— — 420 
Other4,928 53,698 2,151 
Subtotal630,888 295,253 3,443 
Exchange traded:
Corn190,010 — — 
Soybeans42,830 — — 
Wheat110,618 — — 
Oats155 — — 
Ethanol— 75,306 — 
Propane— 113,274 — 
Other— 3,780 692 
Subtotal343,613 192,360 692 
Total974,501 487,613 4,135 
December 31, 2023
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn519,825 — — 
Soybeans41,848 — — 
Wheat66,953 — — 
Oats15,355 — — 
Ethanol— 206,986 — 
Dried distillers grain— — 740 
Soybean meal— — 546 
Other6,847 37,153 1,882 
Subtotal650,828 244,139 3,168 
Exchange traded:
Corn160,795 — — 
Soybeans34,250 — — 
Wheat64,778 — — 
Oats375 — — 
Ethanol— 97,272 — 
Propane— 74,550 — 
Other— 420 825 
Subtotal260,198 172,242 825 
Total911,026 416,381 3,993 

The Andersons, Inc. | Q2 2024 Form 10-Q | 11
June 30, 2023
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn547,805 — — 
Soybeans42,273 — — 
Wheat236,316 — — 
Oats27,824 — — 
Ethanol— 208,251 — 
Dried distillers grain— — 479 
Soybean meal— — 290 
Other11,064 33,819 2,704 
Subtotal865,282 242,070 3,473 
Exchange traded:
Corn177,425 — — 
Soybeans27,555 — — 
Wheat59,262 — — 
Oats960 — — 
Ethanol— 74,760 — 
Propane— 63,630 — 
Other— 1,008 393 
Subtotal265,202 139,398 393 
Total1,130,484 381,468 3,866 


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, net 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, net as interest payments are made on the Company’s variable-rate debt. In the case where interest rate derivatives are settled prior to maturity, the gain or loss is recorded in Other income, net within the Condensed Consolidated Statements of Operations.


The Andersons, Inc. | Q2 2024 Form 10-Q | 12
The Company had recorded the following amounts for the fair value of the other derivatives:

(in thousands)June 30, 2024December 31, 2023June 30, 2023
Derivatives designated as hedging instruments
Interest rate contracts included in Other current assets$9,961 $9,968 $11,107 
Interest rate contracts included in Other assets22,788 18,041 22,881 

The recording of gains and losses on other derivatives and the financial statement line in which they are located are as follows:
Three months ended June 30,Six months ended June 30,
(in thousands)2024202320242023
Derivatives designated as hedging instruments
Interest rate derivative gains (losses) included in Other comprehensive income$(120)$8,996 $4,723 $2,590 
Interest rate derivative gains included in Interest expense, net3,203 2,515 6,588 4,619 
Interest rate derivative gains included in Other income, net— — 568 — 

Outstanding interest rate derivatives, as of June 30, 2024, are as follows:
Interest Rate Hedging InstrumentYear EnteredYear of Maturity Notional Amount
(in millions)		Description


Interest Rate
Swap20192025$45.3 Interest rate component of debt - accounted for as a hedge2.4%
Swap20192025$90.6 Interest rate component of debt - accounted for as a hedge2.3%
Swap20192025$45.3 Interest rate component of debt - accounted for as a hedge2.4%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%
Swap20222025$20.0 Interest rate component of debt - accounted for as a hedge2.6%
Swap20222029$100.0 Interest rate component of debt - accounted for as a hedge2.0%
Swap20222029$50.0 Interest rate component of debt - accounted for as a hedge2.4%
Swap20232025$50.0 Interest rate component of debt - accounted for as a hedge3.7%
Swap20232031$50.0 Interest rate component of debt - accounted for as a hedge2.9%

5. Revenue

Many of the Company’s sales and merchandising revenues are generated from contracts that are outside the scope of ASC 606, Revenue from Contracts with Customers. Specifically, the vast majority of the Company's Trade and Renewables sales contracts are derivatives within the scope of ASC 815, Derivatives and Hedging. Of the sales and merchandising revenues within the scope of ASC 606 in the Trade and Renewables segments, substantially all of the activity occurs at a point in time with de minimis outstanding contract liabilities. In the Company's Nutrient & Industrial segment, all of the sales and merchandising revenues are within the scope of ASC 606. Therefore, a further disaggregation of revenues and detail of outstanding contract balances have been provided below:
Three months ended June 30,Six months ended June 30,
(in thousands)2024202320242023
Ag Supply Chain$236,307 $321,287 $306,113 $387,065 
Specialty Liquids62,508 81,171 108,308 126,604 
Engineered Granules52,522 43,134 104,235 95,865 
Total$351,337 $445,592 $518,656 $609,534 


The Andersons, Inc. | Q2 2024 Form 10-Q | 13
The Nutrient & Industrial group is organized into three divisions: Ag Supply Chain, which includes wholesale distribution centers and retail farm centers; Specialty Liquids, which includes manufactured liquid products intended for agricultural and industrial uses; and Engineered Granules, which includes granular products for turf and agricultural uses, contract manufacturing and cob products. Prior period amounts above were recast to conform to this organization.

Substantially all of the Nutrient & Industrial segment revenues presented in the preceding table occurred within the United States and are recorded at a point in time instead of over time.

Contract balances

The balances of the Nutrient & Industrial segment's contract liabilities were $16.2 million and $30.7 million as of June 30, 2024 and December 31, 2023, respectively. The difference between the opening and closing balances of the Company’s contract liabilities is primarily a result of timing differences between the Company’s performance and the customer’s payment. The main driver of the contract liabilities balance are payments for primary and specialty nutrients within the Nutrient & Industrial segment received in advance of fulfilling our performance obligations under our customer contracts. Due to seasonality of this business, contract liabilities are built up through the first quarter in preparation for the spring application season. Revenue is then recognized in the Nutrient & Industrial segment throughout the spring application season as the Company fulfills its contract obligations.



6. Income Taxes

Three months ended June 30,Six months ended June 30,
(in thousands)2024202320242023
Income before income taxes$57,346 $104,418 $71,314 $39,417 
Income tax provision4,876 21,732 6,179 15,848 
Effective tax rate8.5 %20.8 %8.7 %40.2 %

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.

The difference between the 8.5% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the three months ended June 30, 2024, is primarily attributable to the tax impact of non-controlling interest, federal tax credits, and the reversal of certain unrecognized tax benefits offset by state and local income taxes and nondeductible compensation.

The difference between the 20.8% effective tax rate and the U.S. federal statutory rate of 21.0% for the three months ended June 30, 2023, was 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 gain on deconsolidation of the ELEMENT joint venture.

The difference between the 8.7% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the six months ended June 30, 2024, is primarily attributable to the tax impact of non-controlling interest, federal tax credits, stock based compensation, and the reversal of certain unrecognized tax benefits offset by state and local income taxes and nondeductible compensation.

The difference between the 40.2% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the six months ended June 30, 2023, was 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.
The Andersons, Inc. | Q2 2024 Form 10-Q | 14

7. Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated other comprehensive income ("AOCI") attributable to the Company:
Three months ended June 30,Six months ended June 30,
(in thousands)2024202320242023
Currency Translation Adjustment
Beginning balance$(5,499)$(7,436)$(2,581)$(8,203)
Other comprehensive income (loss) before reclassifications(1,965)2,669 (4,883)3,436 
  Tax effect— — — — 
Other comprehensive income (loss), net of tax(1,965)2,669 (4,883)3,436 
Ending balance$(7,464)$(4,767)$(7,464)$(4,767)
Hedging Adjustment
Beginning balance$24,624 $18,750 $20,985 $23,546 
Other comprehensive income (loss) before reclassifications3,083 11,511 11,879 7,209 
Amounts reclassified from AOCI (a)
(3,203)(2,514)(7,156)(4,619)
  Tax effect (c)30 (2,262)(1,174)(651)
Other comprehensive income (loss), net of tax(90)6,735 3,549 1,939 
Ending balance$24,534 $25,485 $24,534 $25,485 
Pension and Other Postretirement Adjustment
Beginning balance$4,028 $4,695 $4,203 $4,883 
Other comprehensive income (loss) before reclassifications5 (15)10 (29)
Amounts reclassified from AOCI (b)
(228)(228)(456)(456)
  Tax effect (c)48 54 96 108 
Other comprehensive income (loss), net of tax(175)(189)(350)(377)
Ending balance$3,853 $4,506 $3,853 $4,506 
Investments in Convertible Preferred Securities Adjustment
Beginning balance$258 $258 $258 $258 
Other comprehensive income (loss), net of tax— — — — 
Ending balance$258 $258