The Andersons(ANDE) - 2022 Q4 - Annual Report

Financial Performance - The Trade segment achieved sales and merchandising revenues of $13,047.5 million in 2022, up from $9,304.4 million in 2021, marking a significant increase of approximately 40%[101] - The Renewables segment reported sales of $3,178.5 million in 2022, compared to $2,440.8 million in 2021, reflecting a growth of about 30%[102] - The Plant Nutrient segment's operating results decreased slightly in 2022, with sales of $1,099.3 million compared to $866.9 million in 2021, indicating a growth of approximately 27% despite a decline in volumes[101] - Total sales and merchandising revenues for 2022 reached $17,325.4 million, a 37% increase from $12,612.1 million in 2021[158] - Gross profit for 2022 was $684.2 million, up from $592.7 million in 2021, reflecting a 15.4% increase[158] - Net income attributable to The Andersons, Inc. for 2022 was $131.1 million, compared to $104.0 million in 2021, representing a 26.3% increase[158] - Earnings per share attributable to common shareholders for continuing operations was $3.53 in 2022, up from $2.99 in 2021, a 17.9% increase[158] - Comprehensive income attributable to The Andersons, Inc. for 2022 was $150.4 million, an increase from $117.3 million in 2021[161] Expenses and Liabilities - Operating, administrative, and general expenses rose by $22.7 million, primarily due to $18.1 million in higher labor and benefits costs[105] - Interest expense increased by $18.9 million, attributed to rising interest rates and higher borrowings related to new merchandising locations[105] - Current liabilities from continuing operations increased by $70.8 million, primarily due to increases in current maturities of long-term debt[115] - The company had outstanding long-term debt of $541.4 million (recourse) and $64.2 million (non-recourse) with $46.3 million and $63.8 million payable within 12 months respectively[125] - Future interest payments associated with recourse long-term debt total $165.6 million, with $28.1 million payable within 12 months[126] - The company had fixed operating lease payment obligations of $67.5 million, with $28.1 million payable within 12 months[127] Cash Flow and Investments - Net cash provided by operating activities was $287.1 million in 2022, compared to cash used of $51.1 million in 2021[119] - Capital expenditures for 2022 totaled $108.3 million, with expectations to invest approximately $125 to $150 million in 2023[120] - The company paid $24.6 million in dividends in 2022, an increase from $23.7 million in 2021, with a declared cash dividend of $0.185 per common share for January 2023[122] - Total current assets increased to $3,465,953 in 2022, up from $3,372,328 in 2021, reflecting a growth of 2.8%[163] - Total liabilities decreased to $3,178,227 in 2022, down 2.5% from $3,261,515 in 2021[163] - Total shareholders' equity increased to $1,429,769 in 2022, up from $1,307,704 in 2021, representing a growth of 9.3%[163] Inventory and Asset Management - Agricultural inventories on hand were 129.7 million bushels as of December 31, 2022, down from 187.0 million bushels in 2021, indicating a decrease of approximately 30.6%[92] - The Company reported a total inventory of $1,731.7 million as of December 31, 2022, down from $1,814.5 million in 2021, reflecting a decrease of approximately 4.5%[206] - The Company incurred inventory damage charges of $17.3 million in 2022, with $16.2 million related to a fire at a Michigan grain asset[207] - The Company recorded depreciation expense on property, plant, and equipment amounting to $110.6 million for the year ended December 31, 2022[209] - The Company recorded impairment charges of $9.0 million for property, plant, and equipment in December 2022 related to a Nebraska grain asset[210] Taxation and Compliance - The effective tax rate for 2022 was approximately 20.3%, compared to 18.2% in 2021[260] - The company recognized a federal income tax provision of $25,376 in 2022, up from $19,646 in 2021[260] - Unrecognized tax benefits as of December 31, 2022, totaled $79.2 million, including $60.3 million associated with federal and state R&D credits[269] - The company has $47.3 million of state net operating loss carryforwards beginning to expire in 2023[265] - The gross unrecognized tax benefits may change within the next twelve months by a range of $18.6 million to $40.7 million due to ongoing tax examinations[268] Risk Management - The company has established controls to manage and limit risk exposure related to commodity prices through daily reviews of position limits[139] - The company utilizes interest rate swaps to manage its mix of fixed and variable interest rate debt, effectively limiting interest rate volatility[145] - The company is a significant consumer of short-term debt, with a capacity of approximately $2.0 billion, and is exposed to interest rate increases impacting profitability[145] Segment Performance - The Trade business segment includes commodity merchandising and terminal grain elevator operations, contributing significantly to overall revenue[285] - The Renewables business segment produced and sold ethanol and co-products, indicating a focus on sustainable energy solutions[285] - The Plant Nutrient business segment manufactures and distributes agricultural inputs, highlighting the company's commitment to agricultural support[285]