The Andersons(ANDE) - 2023 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (Unaudited) Presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the periods ended September 30, 2023 Condensed Consolidated Statements of Operations Details the company's revenues, gross profit, income before taxes, and net income for specified periods Three Months Ended September 30, 2023 vs. 2022 (Operations) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------------- | :------------------ | :------------------ | :----------- | | Sales and merchandising revenues | $3,635,691 | $4,219,325 | -13.8% | | Gross profit | $157,701 | $163,765 | -3.7% | | Income before income taxes from continuing operations | $38,385 | $34,719 | +10.5% | | Net income attributable to The Andersons, Inc. | $9,708 | $36,748 | -73.6% | | Basic EPS (Continuing Operations) | $0.29 | $0.51 | -43.1% | | Diluted EPS (Continuing Operations) | $0.28 | $0.50 | -44.0% | | Basic EPS (Total) | $0.29 | $1.08 | -73.1% | | Diluted EPS (Total) | $0.28 | $1.06 | -73.6% | Nine Months Ended September 30, 2023 vs. 2022 (Operations) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------------- | :------------------ | :------------------ | :----------- | | Sales and merchandising revenues | $11,537,112 | $12,647,896 | -8.8% | | Gross profit | $527,649 | $514,141 | +2.6% | | Income before income taxes from continuing operations | $77,802 | $163,479 | -52.4% | | Net income attributable to The Andersons, Inc. | $50,004 | $122,056 | -59.0% | | Basic EPS (Continuing Operations) | $1.48 | $3.08 | -51.9% | | Diluted EPS (Continuing Operations) | $1.46 | $3.02 | -51.7% | | Basic EPS (Total) | $1.48 | $3.62 | -59.1% | | Diluted EPS (Total) | $1.46 | $3.55 | -58.9% | Condensed Consolidated Statements of Comprehensive Income Presents net income and other comprehensive income components, leading to total comprehensive income Three Months Ended September 30, 2023 vs. 2022 (Comprehensive Income) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------------- | :------------------ | :------------------ | :----------- | | Net income | $30,523 | $44,272 | -31.0% | | Other comprehensive income | $3,097 | $760 | +307.5% | | Comprehensive income attributable to The Andersons, Inc. | $12,805 | $37,508 | -65.9% | Nine Months Ended September 30, 2023 vs. 2022 (Comprehensive Income) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------------- | :------------------ | :------------------ | :----------- | | Net income | $54,092 | $151,883 | -64.4% | | Other comprehensive income | $8,095 | $14,656 | -44.8% | | Comprehensive income attributable to The Andersons, Inc. | $58,099 | $136,712 | -57.5% | Condensed Consolidated Balance Sheets Provides a snapshot of the company's assets, liabilities, and equity at specific balance sheet dates Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :----------------------------------------- | :----------- | :----------- | :----------- | | Total assets | $3,588,102 | $4,607,996 | $4,418,621 | | Total current assets | $2,527,099 | $3,465,953 | $3,265,227 | | Inventories | $985,292 | $1,731,725 | $1,556,426 | | Total liabilities | $2,139,016 | $3,178,227 | $2,992,080 | | Short-term debt | $14,138 | $272,575 | $652,947 | | Total equity | $1,449,086 | $1,429,769 | $1,426,541 | Condensed Consolidated Statements of Cash Flows Outlines cash inflows and outflows from operating, investing, and financing activities Nine Months Ended September 30, 2023 vs. 2022 (Cash Flows) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----------------------------------------- | :------------------ | :------------------ | :----------- | | Net cash provided by (used in) operating activities | $696,087 | $(153,370) | +554.7% | | Net cash (used in) provided by investing activities | $(117,263) | $2,919 | -4119.2% | | Net cash (used in) provided by financing activities | $(275,846) | $75,489 | -465.4% | | Increase (decrease) in cash and cash equivalents | $302,786 | $(75,673) | +500.3% | | Cash and cash equivalents at end of period | $418,055 | $140,771 | +196.9% | Condensed Consolidated Statements of Equity Details changes in shareholders' equity, including net income, other comprehensive income, and distributions Equity Attributable to The Andersons, Inc. (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :----------------------------------------- | :----------- | :----------- | :----------- | | Total shareholders' equity of The Andersons, Inc. | $1,240,735 | $1,198,601 | $1,193,915 | | Noncontrolling interests | $208,351 | $231,168 | $232,626 | | Total equity | $1,449,086 | $1,429,769 | $1,426,541 | - Key equity changes for the nine months ended September 30, 2023, include net income attributable to The Andersons, Inc. of $50.0 million and other comprehensive income of $16.1 million, partially offset by distributions to noncontrolling interests of $(44.3) million and dividends declared of $(18.7) million[24] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1. Basis of Presentation and Consolidation Describes principles for financial statement preparation and entities included in consolidation - ELEMENT, LLC, a joint venture ethanol plant within the Renewables segment, was deconsolidated from the Company's Condensed Consolidated Financial Statements in the second quarter of 2023[26] - The operating results of the Rail segment have been classified as discontinued operations for all periods presented, following the sale of its businesses in 2021 and 2022[28] Note 2. Inventories Details the composition and valuation methods for the company's inventory balances Major Classes of Inventories (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :------------------------------------- | :----------- | :----------- | :----------- | | Grain and other agricultural products | $718,290 | $1,326,531 | $1,198,790 | | Energy inventories | $18,939 | $21,084 | $25,797 | | Ethanol and co-products | $94,375 | $156,341 | $117,310 | | Plant nutrients and cob products | $153,688 | $227,769 | $214,529 | | Total inventories | $985,292 | $1,731,725 | $1,556,426 | - Readily Marketable Inventories (RMI), such as corn, soybeans, wheat, and ethanol co-products, are carried at net realizable value, which approximates fair value[31] Note 3. Property, Plant and Equipment Provides a breakdown of fixed assets and discusses related impairment charges Property, Plant and Equipment, Net (in thousands) | Category | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :------------------------------------- | :----------- | :----------- | :----------- | | Land | $30,872 | $38,689 | $38,508 | | Buildings and storage facilities | $360,234 | $364,721 | $366,453 | | Machinery and equipment | $916,552 | $980,159 | $956,471 | | Construction in progress | $44,420 | $41,429 | $40,599 | | Less: accumulated depreciation | $751,719 | $754,353 | $729,118 | | Property, plant and equipment, net | $680,188 | $762,729 | $765,939 | - An $87.2 million impairment charge related to ELEMENT was recorded in the first quarter of 2023 due to operational and market-based challenges[35] Note 4. Debt Outlines the company's debt structure, borrowing capacity, and compliance with financial covenants - On April 3, 2023, the Company entered into a new $100 million 8-year term loan, with approximately half of the proceeds used to repay current maturities of long-term debt and the remainder to pay down outstanding line of credit borrowings[36] - The deconsolidation of ELEMENT in April 2023 resulted in the removal of $62.8 million of non-recourse debt associated with ELEMENT from Current maturities of long-term debt[36] - The Company's total borrowing capacity from lines of credit was $1,858.5 million at September 30, 2023, with $1,841.4 million available for borrowing, and the Company is in compliance with all financial covenants[37] Note 5. Derivatives Describes the company's use of derivative instruments to manage commodity and interest rate risks - The Company uses exchange-traded commodity futures and options contracts and over-the-counter forward and option contracts to reduce exposure to market price risk on commodities owned and forward purchase and sale contracts[38] - Commodity derivatives are primarily accounted for at estimated fair value, with realized and unrealized gains and losses included in cost of sales and merchandising revenues[39][40] Net Pretax Gains (Losses) on Commodity Derivatives (in thousands) | Period | 2023 | 2022 | | :------------------------------------------------------------------------------------------------------------------------ | :---------- | :------------ | | Three months ended September 30 | $(26,918)$ | $(169,478)$ | | Nine months ended September 30 | $(49,659)$ | $94,708 | - Interest rate swaps are used to add stability to interest expense and manage exposure to interest rate movements, with gains or losses on these designated hedging instruments recorded in Other comprehensive income (loss) and subsequently reclassified into interest expense[53][54] Note 6. Revenue Provides a breakdown of total revenues by accounting standard and discusses contract liabilities Total Revenues (in thousands) | Period | 2023 | 2022 | | :----------------------------------------- | :------------ | :------------ | | Three months ended September 30 | $3,635,691 | $4,219,325 | | Nine months ended September 30 | $11,537,112 | $12,647,896 | Revenues by Accounting Standard (Three Months Ended Sep 30, in thousands) | Standard | 2023 | 2022 | | :------------ | :---------- | :---------- | | ASC 606 | $688,111 | $635,445 | | ASC 815 | $2,947,580 | $3,583,880 | Revenues by Accounting Standard (Nine Months Ended Sep 30, in thousands) | Standard | 2023 | 2022 | | :------------ | :------------ | :------------ | | ASC 606 | $2,402,358 | $2,269,314 | | ASC 815 | $9,134,754 | $10,378,582 | - Contract liabilities decreased from $55.4 million at December 31, 2022, to $28.6 million at September 30, 2023, primarily due to the satisfaction of performance obligations for primary and specialty nutrients during the spring application season[66] Note 7. Income Taxes Details the income tax provision, effective tax rates, and significant tax-related adjustments Income Tax Provision and Effective Tax Rate (in thousands) | Period | Income Before Taxes (2023) | Tax Provision (2023) | Effective Tax Rate (2023) | Income Before Taxes (2022) | Tax Provision (2022) | Effective Tax Rate (2022) | | :----------------------------------------- | :------------------------- | :------------------- | :------------------------ | :------------------------- | :------------------- | :------------------------ | | Three months ended September 30 | $38,385 | $7,862 | 20.5% | $34,719 | $9,839 | 28.3% | | Nine months ended September 30 | $77,802 | $23,710 | 30.5% | $163,479 | $29,695 | 18.2% | - The 30.5% effective tax rate for the nine months ended September 30, 2023, is primarily attributable to the tax impact of non-controlling interest, state and local income taxes, nondeductible compensation, and a net income tax benefit of $10.6 million related to ELEMENT's operations, impairment charge, and gain on deconsolidation[68] Note 8. Accumulated Other Comprehensive Income Presents the components and changes within accumulated other comprehensive income Total AOCI Ending Balance (in thousands) | Date | Balance | | :------------- | :----------- | | Sep 30, 2023 | $28,579 | | Sep 30, 2022 | $15,850 | - The Hedging Adjustment component of AOCI increased from $24.5 million at September 30, 2022, to $31.5 million at September 30, 2023[71] - The Currency Translation Adjustment component of AOCI changed from a loss of $(9.8) million at September 30, 2022, to a loss of $(7.4) million at September 30, 2023[71] Note 9. Earnings Per Share Provides the calculation and figures for basic and diluted earnings per share from continuing operations Basic and Diluted EPS (Continuing Operations) | Period | Basic EPS (2023) | Basic EPS (2022) | Diluted EPS (2023) | Diluted EPS (2022) | | :----------------------------------------- | :--------------- | :--------------- | :----------------- | :----------------- | | Three months ended September 30 | $0.29 | $0.51 | $0.28 | $0.50 | | Nine months ended September 30 | $1.48 | $3.08 | $1.46 | $3.02 | - Net income attributable to The Andersons, Inc. common shareholders from continuing operations was $9.7 million for the three months and $50.0 million for the nine months ended September 30, 2023[73] Note 10. Fair Value Measurements Describes the fair value hierarchy and valuation techniques applied to financial instruments Fair Value Measurements (in thousands) as of Sep 30, 2023 | Asset/Liability | Level 1 | Level 2 | Level 3 | Total | | :----------------------------------- | :----------- | :----------- | :----------- | :----------- | | Commodity derivatives, net | $54,324 | $45,526 | $— | $99,850 | | Provisionally priced contracts | $(80,657) | $(24,460) | $— | $(105,117) | | Convertible preferred securities | $— | $— | $20,628 | $20,628 | | Other assets and liabilities | $2,331 | $41,978 | $— | $44,309 | | Total | $(24,002) | $63,044 | $20,628 | $59,670 | - The majority of the Company's assets and liabilities measured at fair value are based on the market approach valuation technique[76] - Convertible preferred securities, representing interests in early-stage enterprises, are valued at Level 3 in the fair value hierarchy[80][82] Note 11. Related Parties Discloses significant transactions and balances with related parties Related Party Transactions (in thousands) | Transaction | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Sales of products | $98,062 | $102,565 | $270,112 | $291,820 | | Purchases of products | $9,061 | $13,405 | $39,286 | $51,814 | - Accounts receivable from related parties were $13.7 million at September 30, 2023, and accounts payable were $4.7 million[85] Note 12. Segment Information Presents financial data broken down by the company's operating segments, including revenues and income Revenues from External Customers (in thousands) | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Trade | $2,639,059 | $3,240,526 | $8,213,649 | $9,422,974 | | Renewables | $868,099 | $814,923 | $2,585,396 | $2,380,721 | | Nutrient & Industrial | $128,533 | $163,876 | $738,067 | $844,201 | | Total | $3,635,691 | $4,219,325 | $11,537,112 | $12,647,896 | Income (Loss) Before Income Taxes from Continuing Operations (in thousands) | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Trade | $8,073 | $40,658 | $52,427 | $67,993 | | Renewables | $47,096 | $15,901 | $31,187 | $89,639 | | Nutrient & Industrial | $(8,452) | $(11,609) | $23,675 | $37,445 | | Other | $(8,332) | $(10,231) | $(29,487) | $(31,598) | | Total | $38,385 | $34,719 | $77,802 | $163,479 | Note 13. Commitments and Contingencies Outlines the company's legal proceedings, claims, and other contractual commitments - The Company is party to litigation in the ordinary course of business and establishes reserves for claimed amounts considered probable and estimable[88] - Management believes it is unlikely that the results of current legal proceedings for which it is the defendant, even if unfavorable, will be material[88] - The estimated losses for outstanding claims that are considered reasonably possible are not material[89] Note 14. Other Income Details the various sources and amounts of other income recognized by the company Other Income, Net (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Gain on deconsolidation of joint venture | $— | $— | $6,544 | $— | | Property insurance recoveries | $— | $— | $3,183 | $3,106 | | Interest income | $3,296 | $544 | $6,471 | $1,837 | | Gain on sale of assets and businesses | $6,515 | $— | $5,836 | $3,979 | | Biofuel Producer Program funds | $2,190 | $— | $2,190 | $17,643 | | Gain on investments | $4,798 | $91 | $5,144 | $91 | | Total | $15,178 | $1,475 | $35,623 | $22,185 | - A $6.5 million gain on deconsolidation of the ELEMENT joint venture was recognized in the nine months ended September 30, 2023[90][96] - Property insurance recoveries in 2023 included $1.5 million relating to a conveyor collapse and $1.0 million relating to a fire at grain assets[91] - Interest income in 2023 included $5.0 million from cash and cash equivalents and $1.5 million from an inventory financing program[92] - A $4.8 million revaluation gain of an investment within the Company's corporate venture fund contributed to gains on investments in 2023[94] Note 15. ELEMENT Provides specific details regarding the deconsolidation and financial impact of the ELEMENT joint venture - ELEMENT, a 51% owned ethanol plant, was placed into receivership on April 18, 2023, leading to its deconsolidation from the Company's financial statements[95][96] - An $87.2 million impairment charge related to ELEMENT was recorded in the first quarter of 2023 due to operational and market challenges[95] - The deconsolidation resulted in a cumulative net pretax gain of $6.5 million, which includes an $18.1 million gain on deconsolidation offset by an $11.6 million loss from fully reserving receivables and loans from ELEMENT[96] Note 16. Goodwill Presents the goodwill balances by segment and explains changes during the reporting period Goodwill by Segment (in thousands) | Segment | Dec 31, 2022 | Sep 30, 2023 | | :-------------------- | :----------- | :----------- | | Trade | $119,867 | $119,067 | | Renewables | $8,789 | $8,789 | | Nutrient & Industrial | $686 | $686 | | Total | $129,342 | $128,542 | - Goodwill decreased by $800 thousand from December 31, 2022, to September 30, 2023, primarily due to divestitures in the Trade segment[100] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Provides management's perspective on the Company's financial performance, condition, and liquidity for the three and nine months ended September 30, 2023, discussing results by segment, critical accounting policies, and forward-looking statements Forward Looking Statements Highlights inherent risks and uncertainties that may cause actual results to differ from expectations - The section contains forward-looking statements subject to various known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from expectations[102] - Such factors include economic, weather, and agricultural conditions, regulatory conditions, competition, geopolitical risk, and fluctuations in commodity costs and availability[102] Critical Accounting Policies and Estimates Confirms the company's critical accounting policies and estimates remain consistent with prior disclosures - The Company's critical accounting policies and estimates, as described in its 2022 Form 10-K, have not materially changed through the third quarter of 2023[103] Executive Overview Provides an overview of the company's business segments and key performance indicators - The Company's operations are organized, managed, and classified into three reportable business segments: Trade, Renewables, and Nutrient & Industrial[104] - In agricultural commodity-based businesses, changes in selling prices generally move in relationship to changes in purchase prices, making gross profit a more significant indicator of overall performance than sales and merchandising revenues[104] Trade (Operating Results Discussion) Discusses the operating performance and key drivers for the Trade segment - For the three months ended September 30, 2023, Trade segment operating results decreased by $32.6 million, primarily due to a $38.4 million decrease in gross profit driven by sharp commodity price decreases and a $19.2 million foreign currency loss in Egypt[116] - For the nine months ended September 30, 2023, Trade segment operating results decreased by $15.6 million, with a $10.1 million decrease in gross profit mainly from international merchandising challenges, partially offset by $9.3 million in inventory insurance recoveries[128] - Operating, administrative and general expenses for the nine months increased by $24.5 million due to new merchandising locations, $6.8 million in clean-up costs from a Michigan grain asset fire, increased insurance, and additional bad debt expense[129] Renewables (Operating Results Discussion) Discusses the operating performance and key drivers for the Renewables segment - For the three months ended September 30, 2023, Renewables segment operating results increased by $17.9 million, driven by a $28.4 million increase in gross profit from improved ethanol crush margins, lower natural gas prices, and growth in renewable diesel feedstocks merchandising[118] - For the nine months ended September 30, 2023, Renewables segment operating results decreased by $32.7 million, despite a $37.4 million increase in gross profit from improved ethanol plant margins, due to an $87.2 million asset impairment charge related to ELEMENT and lower unrealized mark-to-market gains[130][131] Ethanol and Related Co-products Volumes (in thousands) | Product | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Ethanol (gallons shipped) | 190,368 | 184,845 | 575,567 | 576,392 | | Vegetable oils (pounds shipped) | 343,619 | 207,509 | 908,976 | 556,073 | | DDG (tons shipped) | 497 | 386 | 1,534 | 1,336 | Nutrient & Industrial (Operating Results Discussion) Discusses the operating performance and key drivers for the Nutrient & Industrial segment - For the three months ended September 30, 2023, Nutrient & Industrial segment operating results improved by $3.2 million, with gross profit increasing by $3.9 million due to higher margins on core agriculture products, despite a 6% decrease in volumes[120] - For the nine months ended September 30, 2023, operating results decreased by $13.8 million, as gross profit declined by $17.9 million due to a 43% decrease in fertilizer prices, partially offset by a 6% increase in tons sold[132] Tons of Product Sold (in thousands) | Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Ag Supply Chain | 209 | 195 | 1,053 | 904 | | Specialty Liquids | 59 | 84 | 282 | 322 | | Engineered Granules | 25 | 33 | 134 | 153 | | Total tons | 293 | 312 | 1,469 | 1,379 | Other (Operating Results Discussion) Discusses the financial performance and key factors impacting the 'Other' category - The 'Other' category's results improved by $1.9 million for the three months and expenses decreased by $2.1 million for the nine months ended September 30, 2023, primarily driven by a $4.8 million revaluation gain of a cost method investment, partially offset by higher benefit claims[121][133] Income Taxes (Operating Results Discussion) Provides a discussion of the company's income tax provision and effective tax rates Effective Tax Rate from Continuing Operations | Period | 2023 Effective Tax Rate | 2022 Effective Tax Rate | | :----------------------------------------- | :---------------------- | :---------------------- | | Three months ended September 30 | 20.5% | 28.3% | | Nine months ended September 30 | 30.5% | 18.2% | - The 30.5% effective tax rate for the nine months ended September 30, 2023, includes a net income tax benefit of $10.6 million related to ELEMENT's current year operations, impairment charge, and gain on deconsolidation[134] - The Company is under federal tax examination by the IRS for tax years 2015-2018 and by Mexican tax authorities for 2015, with potential favorable impacts on income tax expense ranging from $2.9 million to $8.1 million upon resolution[136] Liquidity and Capital Resources Analyzes the company's cash flows, working capital, and overall financial flexibility Working Capital from Continuing Operations (in thousands) | Metric | Sep 30, 2023 | Sep 30, 2022 | Variance | | :----------------------------------------- | :----------- | :----------- | :----------- | | Total current assets | $2,527,099 | $3,265,227 | $(738,128) | | Total current liabilities | $1,407,634 | $2,320,507 | $(912,873) | | Working Capital | $1,119,465 | $944,720 | $174,745 | - Current assets decreased primarily due to reductions in inventories and current commodity derivative assets, offset by a sharp increase in cash, reflecting the stabilization of agricultural commodity prices[138] - Current liabilities decreased mainly due to reduced utilization of short-term revolving credit lines, driven by commodity price stabilization and strategic working capital management in a rising interest rate environment[139] Sources and Uses of Cash (Nine Months Ended Sep 30, in thousands) | Activity | 2023 | 2022 | | :----------------------------------------- | :------------ | :------------ | | Net cash provided by (used in) operating activities | $696,087 | $(153,370) | | Net cash (used in) provided by investing activities | $(117,263) | $2,919 | | Net cash (used in) provided by financing activities | $(275,846) | $75,489 | - Investing activities used $117.3 million cash in 2023, due to increased purchases of property, plant, and equipment ($36.5 million) and a business acquisition ($24.3 million), compared to providing cash in the prior year[142] - Financing activities used $275.8 million cash in 2023, primarily for repayments on short-term credit facilities as commodity prices stabilized, contrasting with cash provided in the prior year[143] - The Company had $1,841.4 million available for borrowing from its $1,858.5 million credit facilities as of September 30, 2023, and is in compliance with all debt covenants[144] Item 3. Quantitative and Qualitative Disclosures about Market Risk States that there were no material changes in the Company's market risk exposures, specifically commodity and interest rate risk, during the nine months ended September 30, 2023, compared to the disclosures in the Annual Report on Form 10-K for 2022 - There were no material changes in market risk, specifically commodity and interest rate risk, during the nine months ended September 30, 2023[146] Item 4. Controls and Procedures Confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the third quarter of 2023 Evaluation of Disclosure Controls and Procedures Confirms the effectiveness of the company's disclosure controls and procedures - The Company's disclosure controls and procedures were effective as of September 30, 2023, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[147] Changes in Internal Control over Financial Reporting Reports on any material changes in the company's internal control over financial reporting - There were no material changes in the Company's internal control over financial reporting during the third quarter of 2023[148] PART II. OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, other information, and exhibits Item 1. Legal Proceedings The Company is involved in various legal proceedings in the ordinary course of business. Management believes it is unlikely that the results of current legal proceedings will be material, and estimated losses for reasonably possible claims are not material - The Company is subject to legal proceedings and claims that have arisen in the ordinary course of business[150] - Management believes it is unlikely that the results of its current legal proceedings for which it is the defendant, even if unfavorable, will be material[150] - The estimated losses for outstanding claims that are considered reasonably possible are not material[150] Item 1A. Risk Factors Refers to the risk factors detailed in the Company's 2022 Form 10-K, which could materially and adversely affect its business, financial condition, operating results, and stock price - The Company's business, financial condition, and operating results can be affected by a number of factors, including those described in Part I, Item 1A of the 2022 Form 10-K[151] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During July 2023, the Company acquired common stock from employees to satisfy tax withholding obligations. As of September 30, 2023, a portion of the authorized share repurchase plan has been utilized - In July 2023, the Company acquired 234 shares of common stock from employees at an average price of $46.15 per share to satisfy tax withholding obligations[154] - As of September 30, 2023, $14.5 million of the $100 million authorized under the Repurchase Plan (expiring August 20, 2024) had been utilized[152] Item 5. Other Information States that no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the three months ended September 30, 2023 - None of the Company's directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the three months ended September 30, 2023[155] Item 6. Exhibits Lists the exhibits filed or furnished with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, and Inline XBRL documents for the financial statements and cover page - Exhibits include certifications of the Chief Executive Officer (31.1) and Chief Financial Officer (31.2) under Rule 13(a)-14(a)/15d-14(a), and Certifications Pursuant to 18 U.S.C. Section 1350 (32.1)[156][157][158] - Inline XBRL Document Sets are provided for the Condensed Consolidated Financial Statements (101) and the cover page (104) of this Quarterly Report on Form 10-Q[158]