[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) This document is The Andersons, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2025 - The Andersons, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - The company is a large accelerated filer[3](index=3&type=chunk) - As of July 25, 2025, the company had **34,210,458 common shares outstanding**[3](index=3&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This item provides the unaudited condensed consolidated financial statements for The Andersons, Inc., covering the three and six months ended June 30, 2025 and 2024, and balance sheet data as of June 30, 2025, December 31, 2024, and June 30, 2024. These statements are prepared in accordance with GAAP for interim financial reporting [Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2025 and 2024](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | |---|---|---|---| | Sales and merchandising revenues | $3,135,869 | $2,795,205 | +$340,664 | | Cost of sales and merchandising revenues | $2,977,453 | $2,619,834 | +$357,619 | | Gross profit | $158,416 | $175,371 | -$16,955 | | Operating, administrative and general expenses | $134,589 | $116,614 | +$17,975 | | Interest expense, net | $11,495 | $6,611 | +$4,884 | | Other income, net | $12,503 | $5,200 | +$7,303 | | Income before income taxes | $24,835 | $57,346 | -$32,511 | | Income tax provision | $8,028 | $4,876 | +$3,152 | | Net income | $16,807 | $52,470 | -$35,663 | | Net income attributable to noncontrolling interests | $8,950 | $16,494 | -$7,544 | | Net income attributable to The Andersons, Inc. | $7,857 | $35,976 | -$28,119 | | Basic EPS | $0.23 | $1.06 | -$0.83 | | Diluted EPS | $0.23 | $1.05 | -$0.82 | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | |---|---|---|---| | Sales and merchandising revenues | $5,794,967 | $5,513,422 | +$281,545 | | Cost of sales and merchandising revenues | $5,483,679 | $5,209,731 | +$273,948 | | Gross profit | $311,288 | $303,691 | +$7,597 | | Operating, administrative and general expenses | $280,343 | $235,972 | +$44,371 | | Interest expense, net | $24,591 | $13,133 | +$11,458 | | Other income, net | $21,694 | $16,728 | +$4,966 | | Income before income taxes | $28,048 | $71,314 | -$43,266 | | Income tax provision | $5,910 | $6,179 | -$269 | | Net income | $22,138 | $65,135 | -$42,997 | | Net income attributable to noncontrolling interests | $13,997 | $23,578 | -$9,581 | | Net income attributable to The Andersons, Inc. | $8,141 | $41,557 | -$33,416 | | Basic EPS | $0.24 | $1.22 | -$0.98 | | Diluted EPS | $0.24 | $1.21 | -$0.97 | [Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2025 and 2024](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section details the unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | |---|---|---|---| | Net income | $16,807 | $52,470 | -$35,663 | | Other comprehensive income (loss), net of tax | $5,477 | -$2,230 | +$7,707 | | Comprehensive income | $22,284 | $50,240 | -$27,956 | | Comprehensive income attributable to The Andersons, Inc. | $13,327 | $33,746 | -$20,419 | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | |---|---|---|---| | Net income | $22,138 | $65,135 | -$42,997 | | Other comprehensive income (loss), net of tax | $1,749 | -$1,684 | +$3,433 | | Comprehensive income | $23,887 | $63,451 | -$39,564 | | Comprehensive income attributable to The Andersons, Inc. | $9,626 | $39,873 | -$30,247 | [Condensed Consolidated Balance Sheets – June 30, 2025, December 31, 2024 and June 30, 2024](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%93%20June%2030%2C%202025%2C%20December%2031%2C%202024%20and%20June%2030%2C%202024) This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, December 31, 2024, and June 30, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | **Assets** | | | | | Cash and cash equivalents | $350,970 | $561,771 | $530,386 | | Accounts receivable, net | $783,892 | $764,550 | $743,550 | | Inventories | $771,868 | $1,286,811 | $686,540 | | Total current assets | $2,175,447 | $2,850,277 | $2,249,299 | | Property, plant and equipment, net | $883,985 | $868,151 | $694,136 | | Total assets | $3,446,491 | $4,121,314 | $3,299,813 | | **Liabilities** | | | | | Short-term debt | $104,467 | $166,614 | $4,021 | | Trade and other payables | $572,232 | $1,047,436 | $607,083 | | Total current liabilities | $1,080,609 | $1,731,172 | $1,084,729 | | Long-term debt, less current maturities | $578,464 | $608,151 | $549,378 | | Other long-term liabilities | $176,908 | $182,155 | $145,444 | | Total liabilities | $1,835,981 | $2,521,478 | $1,779,551 | | **Equity** | | | | | Total shareholders' equity of The Andersons, Inc. | $1,364,409 | $1,366,186 | $1,310,601 | | Noncontrolling interests | $246,101 | $233,650 | $209,661 | | Total equity | $1,610,510 | $1,599,836 | $1,520,262 | | Total liabilities and equity | $3,446,491 | $4,121,314 | $3,299,813 | [Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | |---|---|---| | Net cash (used in) provided by operating activities | $(50,699) | $64,807 | | Net cash used in investing activities | $(75,707) | $(58,138) | | Net cash used in financing activities | $(87,008) | $(119,926) | | Effect of exchange rates on cash and cash equivalents | $2,613 | $(211) | | Decrease in cash and cash equivalents | $(210,801) | $(113,468) | | Cash and cash equivalents at end of period | $350,970 | $530,386 | [Condensed Consolidated Statements of Equity – Three and Six Months Ended June 30, 2025 and 2024](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides the unaudited condensed consolidated statements of equity for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Equity (Three Months Ended June 30, 2025, in thousands) | Equity Component | Balance at March 31, 2025 | Net Income | Other Comprehensive Income | Reclassified from AOCI | Distributions to Noncontrolling Interests | Stock Awards | Dividends Declared | Restricted Share Award Dividend Equivalents | Balance at June 30, 2025 | |---|---|---|---|---|---|---|---|---|---| | Common Shares | $143 | | | | | $1 | | | $144 | | Additional Paid-in Capital | $382,623 | | | | | $2,016 | | $15 | $384,654 | | Accumulated Other Comprehensive Income | $8,857 | | $7,768 | $(2,291) | | | | | $14,334 | | Retained Earnings | $964,114 | $7,857 | | | | | $(6,670) | $(24) | $965,277 | | Noncontrolling Interests | $238,697 | $8,950 | | | $(1,546) | | | | $246,101 | | Total | $1,594,434 | $16,807 | $7,768 | $(2,291) | $(1,546) | $2,017 | $(6,670) | $(9) | $1,610,510 | Condensed Consolidated Statements of Equity (Six Months Ended June 30, 2025, in thousands) | Equity Component | Balance at Dec 31, 2024 | Net Income | Other Comprehensive Income | Reclassified from AOCI | Distributions to Noncontrolling Interests | Stock Awards, etc. | Purchase of Treasury Shares | Dividends Declared | Restricted Share Award Dividend Equivalents | Balance at June 30, 2025 | |---|---|---|---|---|---|---|---|---|---| | Common Shares | $142 | | | | | $2 | | | | $144 | | Additional Paid-in Capital | $385,609 | | | | | $(1,438) | | | $483 | $384,654 | | Treasury Shares | $(2,860) | | | | | $4,043 | $(1,184) | | | $0 | | Accumulated Other Comprehensive Income | $12,585 | | $6,328 | $(4,579) | | | | | | $14,334 | | Retained Earnings | $970,710 | $8,141 | | | | | | $(13,337) | $1 | $965,277 | | Noncontrolling Interests | $233,650 | $13,997 | | | $(1,546) | | | | | $246,101 | | Total | $1,599,836 | $22,138 | $6,328 | $(4,579) | $(1,546) | $2,607 | $(1,184) | $(13,337) | $247 | $1,610,510 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes supporting the condensed consolidated financial statements, including accounting policies, inventory, derivatives, revenue, and segment information [Note 1. Basis of Presentation and Recently Issued Accounting Standards](index=10&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Recently%20Issued%20Accounting%20Standards) This note outlines the basis of financial statement presentation and discusses the impact of recently issued accounting standards - Effective January 1, 2025, the company realigned its organizational structure, combining the former Trade and Nutrient & Industrial segments into a new Agribusiness segment, with prior period segment information recast[21](index=21&type=chunk)[94](index=94&type=chunk) Variable Interest Entities (VIEs) Assets and Liabilities (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | Total assets | $486,737 | $443,430 | $454,094 | | Total liabilities | $56,341 | $57,313 | $52,102 | - New accounting pronouncements (ASU 2023-09 on Income Taxes and ASU 2024-03 on Disaggregation of Income Statement Expenses) are not expected to have a material impact on the Consolidated Financial Statements, though they will result in expanded disclosures[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2. Inventories](index=11&type=section&id=Note%202.%20Inventories) This note details the company's inventory valuation methods and provides a breakdown of major inventory classes - Readily Marketable Inventories (RMI), including agricultural commodities and ethanol co-products, are carried at net realizable value, approximating fair value[27](index=27&type=chunk) Major Classes of Inventories (in thousands) | Inventory Class | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | Grain and other agricultural products | $500,748 | $951,283 | $452,314 | | Energy inventories | $10,807 | $17,381 | $14,085 | | Ethanol and co-products | $112,232 | $109,528 | $108,407 | | Nutrients and cob products | $148,081 | $208,619 | $111,734 | | **Total inventories** | **$771,868** | **$1,286,811** | **$686,540** | | *Includes RMI* | *$496,600* | *$944,500* | *$455,800* | [Note 3. Derivatives](index=12&type=section&id=Note%203.%20Derivatives) This note describes the company's use of derivative instruments to manage commodity and interest rate risks [Commodity Derivatives](index=12&type=section&id=Commodity%20Derivatives) This section details the company's use of commodity derivatives to mitigate market price risk on agricultural products - 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[30](index=30&type=chunk) Net Commodity Derivative Asset Position (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | Cash collateral paid (received) | $5,506 | $39,025 | $(25,316) | | Fair value of derivatives | $35,489 | $8,696 | $75,903 | | **Net derivative asset position** | **$40,995** | **$47,721** | **$50,587** | Gains and Losses on Commodity Derivatives (in thousands) | Period | 2025 | 2024 | |---|---|---| | Three months ended June 30 | $(35,502) | $(6,168) | | Six months ended June 30 | $14,498 | $13,173 | [Interest Rate Derivatives](index=14&type=section&id=Interest%20Rate%20Derivatives) This section describes the company's use of interest rate swaps to manage interest expense and exposure to rate movements - The company uses interest rate swaps to stabilize interest expense and manage exposure to interest rate movements, designating them as cash flow hedges[37](index=37&type=chunk) Fair Value of Interest Rate Derivatives (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | Interest rate contracts in Other current assets | $5,950 | $6,761 | $9,961 | | Interest rate contracts in Other assets | $13,500 | $22,723 | $22,788 | | Interest rate contracts in Other long-term liabilities | $(1,266) | $(301) | — | Interest Rate Derivative Gains/Losses (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |---|---|---|---|---| | (Losses) gains in Other comprehensive income | $(4,150) | $(120) | $(10,970) | $4,723 | | Gains in Interest expense, net | $2,077 | $3,203 | $4,151 | $6,588 | [Note 4. Revenue](index=15&type=section&id=Note%204.%20Revenue) This note provides information on revenue recognition, distinguishing between derivative and non-derivative sales contracts - Approximately **85% of the company's sales contracts are derivatives** within the scope of ASC 815, with the remaining **15% accounted for under ASC 606**[41](index=41&type=chunk) ASC 606 Sales and Merchandising Revenues (in thousands) | Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |---|---|---|---|---| | Specialty and primary nutrients | $377,450 | $318,412 | $541,256 | $455,448 | | Premium ingredients | $60,269 | $99,347 | $130,106 | $200,095 | | Propane and fuels | $43,950 | $35,419 | $135,524 | $105,215 | | Other | $53,314 | $39,328 | $98,910 | $73,179 | | **Total** | **$534,983** | **$492,506** | **$905,796** | **$833,937** | - Contract liabilities decreased from **$24.8 million** at December 31, 2024, to **$14.7 million** at June 30, 2025, primarily due to the seasonality of primary and specialty nutrient payments received in advance of the spring application season[45](index=45&type=chunk) [Note 5. Income Taxes](index=16&type=section&id=Note%205.%20Income%20Taxes) This note details the income tax provision and effective tax rates for the reporting periods, explaining key drivers of changes Income Tax Provision and Effective Tax Rate (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |---|---|---|---|---| | Income before income taxes | $24,835 | $57,346 | $28,048 | $71,314 | | Income tax provision | $8,028 | $4,876 | $5,910 | $6,179 | | Effective tax rate | 32.3% | 8.5% | 21.1% | 8.7% | - The **32.3% effective tax rate for Q2 2025** was primarily due to interest accrued on unrecognized tax benefits and valuation allowances on foreign losses, offset by the tax impact of noncontrolling interest[46](index=46&type=chunk) - The **21.1% effective tax rate for H1 2025** was consistent with the U.S. federal statutory rate, primarily due to state and local income taxes and valuation allowances on foreign losses offset by the tax impact of noncontrolling interest[48](index=48&type=chunk) [Note 6. Accumulated Other Comprehensive Income](index=17&type=section&id=Note%206.%20Accumulated%20Other%20Comprehensive%20Income) This note presents changes in accumulated other comprehensive income, including currency translation and hedging adjustments Changes in Accumulated Other Comprehensive Income (AOCI) (in thousands) | Component | Beginning Balance (June 30, 2024) | Other Comprehensive Income (Loss), net of tax (Six months ended June 30, 2025) | Ending Balance (June 30, 2025) | |---|---|---|---| | Currency Translation Adjustment | $(7,464) | $10,664 | $(2,805) | | Hedging Adjustment | $24,534 | $(8,543) | $13,028 | | Pension and Other Postretirement Adjustment | $3,853 | $(372) | $3,853 | | Investments in Convertible Preferred Securities Adjustment | $258 | — | $258 | | **Total AOCI Ending Balance** | **$21,181** | **$1,749** | **$14,334** | - Gains and losses on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings, primarily impacting Interest expense, net[51](index=51&type=chunk) [Note 7. Fair Value Measurements](index=18&type=section&id=Note%207.%20Fair%20Value%20Measurements) This note provides fair value measurements for assets and liabilities, categorized by valuation input levels Assets and Liabilities Measured at Fair Value on a Recurring Basis (June 30, 2025, in thousands) | Assets (liabilities) | Level 1 | Level 2 | Level 3 | Total | |---|---|---|---|---| | Commodity derivatives, net | $40,995 | $30,035 | — | $71,030 | | Provisionally priced contracts | $(6,317) | $(11,485) | — | $(17,802) | | Convertible preferred securities | — | — | $18,190 | $18,190 | | Other assets and liabilities | $9,703 | $18,184 | — | $27,887 | | **Total** | **$44,381** | **$36,734** | **$18,190** | **$99,305** | - Level 1 commodity derivatives reflect fair value of exchange-traded futures and options contracts, net of cash collateral[56](index=56&type=chunk) - Fair value of long-term debt (including current portion) was estimated at **$637.3 million** at June 30, 2025, based on credit standing and current interest rates for similar borrowings[64](index=64&type=chunk) [Note 8. Related Parties](index=19&type=section&id=Note%208.%20Related%20Parties) This note discloses transactions with related parties, confirming they are conducted at arm's-length terms - Related party sales comprised less than **4% of Sales and merchandising revenues** for both the three and six months ended June 30, 2025 and 2024[65](index=65&type=chunk) - Related party purchases comprised less than **1% of Cost of sales and merchandising revenues** for both the three and six months ended June 30, 2025 and 2024[65](index=65&type=chunk) - The company believes all related party transaction values are similar to those conducted with third parties at arm's-length[67](index=67&type=chunk) [Note 9. Segment Information](index=21&type=section&id=Note%209.%20Segment%20Information) This note provides financial information for the company's reportable segments, Agribusiness and Renewables, following a recent realignment - Effective January 1, 2025, the company realigned its organizational structure, resulting in two reportable segments: **Agribusiness** and **Renewables**[69](index=69&type=chunk)[70](index=70&type=chunk) Segment Income (Three Months Ended June 30, 2025, in thousands) | Segment | Sales and Merchandising Revenues | Cost of Sales and Merchandising Revenues | Operating, Administrative and General Expenses | Interest Expense | Other Income, net | Segment Income | |---|---|---|---|---|---|---| | Agribusiness | $2,414,827 | $2,282,765 | $114,012 | $11,331 | $12,180 | $18,899 | | Renewables | $721,042 | $694,688 | $8,951 | $725 | $746 | $17,424 | | Total | $3,135,869 | $2,977,453 | $122,963 | $12,056 | $12,926 | $36,323 | | Less: Corporate expenses | | | | | | $11,488 | | Income before income taxes | | | | | | $24,835 | Identifiable Assets by Segment (in thousands) | Segment | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | |---|---|---|---| | Agribusiness | $2,214,334 | $2,778,025 | $2,102,910 | | Renewables | $707,722 | $680,546 | $722,142 | | Other | $524,435 | $662,743 | $474,761 | | **Total assets** | **$3,446,491** | **$4,121,314** | **$3,299,813** | [Note 10. Commitments and Contingencies](index=23&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) This note discusses the company's involvement in litigation and other commitments, assessing potential financial impacts - The company is regularly involved in litigation, establishing reserves for probable and estimable claims[81](index=81&type=chunk) - Management believes it is unlikely that current legal proceedings will result in a material loss beyond accrued amounts[81](index=81&type=chunk)[83](index=83&type=chunk) - The outcome of litigation is inherently uncertain and can result in unexpected losses or income[82](index=82&type=chunk) [Note 11. Other Income, net](index=23&type=section&id=Note%2011.%20Other%20Income%2C%20net) This note provides a breakdown of other income, net, highlighting significant items like property insurance recoveries Other Income, net (in thousands) | Item | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |---|---|---|---|---| | Interest income | $2,089 | $3,712 | $4,601 | $8,394 | | Property insurance recoveries | $12,175 | — | $12,629 | — | | Patronage income | $688 | $537 | $6,616 | $3,406 | | Gain on deconsolidation of joint venture | — | — | — | $3,117 | | Other | $(2,449) | $951 | $(2,152) | $1,811 | | **Total** | **$12,503** | **$5,200** | **$21,694** | **$16,728** | - The significant increase in Other income, net in 2025 is largely due to **$12.2 million in property insurance recoveries** related to a grain terminal incident in Sunray, Texas[85](index=85&type=chunk) [Note 12. Business Acquisition](index=24&type=section&id=Note%2012.%20Business%20Acquisition) This note details the acquisition of Skyland Grain LLC, including its impact on the Agribusiness segment and pro forma financial information - On November 1, 2024, the company acquired a **65% ownership interest in Skyland Grain LLC for $85.0 million**, expanding its grain and fertilizer businesses across Kansas, Colorado, Oklahoma, and Texas[87](index=87&type=chunk) - Skyland's results are consolidated in the Agribusiness segment[87](index=87&type=chunk) Skyland Grain LLC Pro Forma Financial Information (Six Months Ended June 30, 2024) | Metric | Pro Forma (in millions) | |---|---| | Net sales | $5,926.0 | | Net income | $63.3 | [Note 13. Subsequent Events](index=25&type=section&id=Note%2013.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, such as the acquisition of the remaining interest in TAMH - On July 31, 2025, the company acquired the remaining **49.9% ownership interest in The Andersons Marathon Holdings LLC (TAMH) for $425.0 million**[90](index=90&type=chunk) - This acquisition will result in the company including all the ethanol plants' earnings, previously partially attributable to noncontrolling interest, in future quarters[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, including an executive overview, segment-specific discussions, and an analysis of liquidity and capital resources [Forward Looking Statements](index=26&type=section&id=Forward%20Looking%20Statements) This section cautions that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties, including economic, weather, agricultural, regulatory, and geopolitical conditions, and commodity price fluctuations[92](index=92&type=chunk) - Actual results may differ materially from predictions, and the company undertakes no obligation to publicly update or revise these statements[92](index=92&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that critical accounting policies and estimates remain consistent with the prior annual report - The critical accounting policies and estimates have not materially changed through the second quarter of 2025, as described in the 2024 Form 10-K[93](index=93&type=chunk) [Executive Overview](index=26&type=section&id=Executive%20Overview) This overview discusses the company's organizational realignment, key performance indicators, and management's assessment of asset impairment - The company realigned its organizational structure effective January 1, 2025, combining former Trade and Nutrient & Industrial segments into Agribusiness[94](index=94&type=chunk) - Changes in agricultural commodity prices generally have a relatively equal impact on sales and cost of sales, with less significant impact on gross profit, making **gross profit a key performance indicator**[95](index=95&type=chunk) - Management concluded that no impairment trigger existed as of June 30, 2025, despite the book value of total shareholders' equity exceeding market capitalization, believing the share price does not accurately reflect current value or positive long-term outlook[96](index=96&type=chunk) [Agribusiness](index=27&type=section&id=Agribusiness) This section analyzes the Agribusiness segment's performance, highlighting factors impacting operating results and storage capacity - Agribusiness segment's Q2 operating results declined due to a surplus of grain and weak customer demand in western markets, impacting physical assets and merchandising[98](index=98&type=chunk) - Nutrient results improved year-over-year with increased sales volumes for nitrogen due to increased planted corn acres[98](index=98&type=chunk) - Total Agribusiness grain storage capacity increased to approximately **278 million bushels** at June 30, 2025, from **168 million bushels** in the prior year, primarily due to the Skyland acquisition[100](index=100&type=chunk) [Renewables](index=27&type=section&id=Renewables) This section reviews the Renewables segment's performance, focusing on ethanol crush margins, input costs, and sales volumes - Renewables segment's Q2 operating results were lower due to reduced ethanol crush margins, higher input costs (eastern corn basis, natural gas), and declining co-product values[101](index=101&type=chunk) - An uptick in ethanol board crush is expected through the summer driving season, supported by strong demand and anticipated reduction in corn costs post-harvest[102](index=102&type=chunk) Ethanol and Related Co-products Volumes Sold (in thousands) | Product | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |---|---|---|---|---| | Ethanol (gallons) | 226,450 | 187,050 | 438,242 | 372,876 | | E-85 (gallons) | 12,041 | 13,494 | 20,011 | 25,785 | | Renewable feedstocks (pounds) | 341,075 | 404,589 | 698,791 | 775,572 | | DDG (tons) | 525 | 553 | 1,139 | 1,101 | [Other](index=27&type=section&id=Other) This section describes the 'Other' activities, encompassing corporate income, expenses, and consolidation adjustments - The 'Other' activities include corporate income and expense, costs for support functions, and elimination/consolidation adjustments not allocated to operating segments[106](index=106&type=chunk) [Operating Results – Three Months Ended June 30, 2025 vs. 2024](index=28&type=section&id=Operating%20Results%20%E2%80%93%20Three%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) This section provides a detailed comparison of operating results for the three months ended June 30, 2025, versus 2024 Income (loss) before income taxes attributable to the Company (Three Months Ended June 30, in thousands) | Segment | 2025 | 2024 | |---|---|---| | Agribusiness | $17,728 | $28,581 | | Renewables | $9,645 | $22,968 | | Other | $(11,488) | $(10,697) | | **Total** | **$15,885** | **$40,852** | [Agribusiness (Detailed Q2 comparison)](index=29&type=section&id=Agribusiness%20(Detailed%20Q2%20comparison)) This section details the Agribusiness segment's Q2 performance, including revenue drivers and the impact of the Skyland acquisition - Agribusiness operating results declined despite a **$4.0 million increase in gross profit**, driven by the Skyland acquisition (**$17.9 million gross profit**) offset by reduced results from legacy businesses due to grain surplus and weak demand[110](index=110&type=chunk) - Sales and merchandising revenues increased by **$305.5 million**, with Skyland acquisition contributing **$212.1 million**[110](index=110&type=chunk) - Other income, net increased by **$7.6 million**, including **$10.5 million of property insurance recoveries** from the newly acquired Skyland business[112](index=112&type=chunk) [Renewables (Detailed Q2 comparison)](index=29&type=section&id=Renewables%20(Detailed%20Q2%20comparison)) This section analyzes the Renewables segment's Q2 performance, focusing on factors affecting gross profit and sales volumes - Renewables operating results declined by **$13.3 million**, with gross profit decreasing by **$21.0 million**[113](index=113&type=chunk) - The decrease in gross profit was mainly driven by a **$16.8 million decline at ethanol plants** due to lower ethanol crush margins and higher input costs, despite efficient operations and higher yields[113](index=113&type=chunk) - Increased ethanol sales volumes were almost fully offset by reduced volumes in the renewable feedstocks business[113](index=113&type=chunk) [Income Taxes (Detailed Q2 comparison)](index=29&type=section&id=Income%20Taxes%20(Detailed%20Q2%20comparison)) This section compares income tax expense and effective tax rates for Q2 2025 and 2024, explaining key variances - Q2 2025 income tax expense was **$8.0 million**, with an **effective tax rate of 32.3%** on **$24.8 million income before taxes**[114](index=114&type=chunk) - The higher effective tax rate in Q2 2025 was mainly due to interest on unrecognized tax benefits and valuation allowances on foreign losses, partially offset by noncontrolling interest tax impact[114](index=114&type=chunk) - Q2 2024 effective tax rate was **8.5%** on **$57.3 million income before taxes**, primarily due to noncontrolling interest tax impact, federal tax credits, and reversal of unrecognized tax benefits[115](index=115&type=chunk) [Operating Results – Six Months Ended June 30, 2025 vs. 2024](index=30&type=section&id=Operating%20Results%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) This section provides a detailed comparison of operating results for the six months ended June 30, 2025, versus 2024 Income (loss) before income taxes attributable to the Company (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | |---|---|---| | Agribusiness | $12,574 | $31,119 | | Renewables | $24,957 | $40,211 | | Other | $(23,480) | $(23,594) | | **Total** | **$14,051** | **$47,736** | [Agribusiness (Detailed H1 comparison)](index=31&type=section&id=Agribusiness%20(Detailed%20H1%20comparison)) This section details the Agribusiness segment's H1 performance, including gross profit drivers and the impact of the Skyland acquisition - Agribusiness operating results decreased by **$18.5 million** for H1 2025[120](index=120&type=chunk) - Gross profit increased by **$23.1 million**, with **$35.1 million from the Skyland acquisition**, offsetting declines in legacy businesses due to grain surplus and weak demand[120](index=120&type=chunk) - Other income, net increased by **$10.1 million**, including **$14.2 million in property insurance recoveries** and patronage income from the newly acquired Skyland business[122](index=122&type=chunk) [Renewables (Detailed H1 comparison)](index=31&type=section&id=Renewables%20(Detailed%20H1%20comparison)) This section analyzes the Renewables segment's H1 performance, focusing on factors affecting gross profit and other income - Renewables operating results decreased by **$15.3 million** for H1 2025, with gross profit declining by **$15.5 million**[123](index=123&type=chunk) - The gross profit decrease was mainly driven by an **$11.7 million decline at ethanol plants** due to lower ethanol crush margins and higher input costs, despite strong yields and production[123](index=123&type=chunk) - Other income, net decreased by **$4.1 million** due to a prior year gain from the deconsolidation of the ELEMENT joint venture[124](index=124&type=chunk) [Income Taxes (Detailed H1 comparison)](index=32&type=section&id=Income%20Taxes%20(Detailed%20H1%20comparison)) This section compares income tax expense and effective tax rates for H1 2025 and 2024, explaining key variances and legislative impacts - H1 2025 income tax expense was **$5.9 million**, with an **effective tax rate of 21.1%** on **$28.0 million income before taxes**, consistent with the U.S. federal statutory rate[126](index=126&type=chunk) - H1 2024 effective tax rate was **8.7%** on **$71.3 million income before taxes**, primarily due to noncontrolling interest tax impact, stock-based compensation, and federal tax credits[127](index=127&type=chunk) - The company is currently assessing the impact of the recently enacted U.S. 'One Big Beautiful Bill Act' on its consolidated financial statements[130](index=130&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's working capital, cash flow activities, and available borrowing capacity - Working capital decreased by **$69.7 million** to **$1,094.8 million** at June 30, 2025, compared to the prior year[132](index=132&type=chunk) - Operating activities used **$50.7 million in cash**, a significant shift from providing **$64.8 million** in the prior year[135](index=135&type=chunk) - The company has **$2,053.3 million available for borrowing** under its credit facilities and is in compliance with all debt covenants as of June 30, 2025[139](index=139&type=chunk)[140](index=140&type=chunk) [Working Capital](index=33&type=section&id=Working%20Capital) This section examines changes in working capital components, attributing shifts to commodity prices and acquisitions Working Capital Components (in thousands) | Component | June 30, 2025 | June 30, 2024 | Variance | |---|---|---|---| | Total current assets | $2,175,447 | $2,249,299 | $(73,852) | | Total current liabilities | $1,080,609 | $1,084,729 | $(4,120) | | **Working Capital** | **$1,094,838** | **$1,164,570** | **$(69,732)** | - Lower average commodity prices were the main contributor to the decrease in current assets, partially offset by the Skyland acquisition which added **$211.0 million**[132](index=132&type=chunk) - Current liabilities slightly declined, with the Skyland acquisition adding **$158.9 million**, but offset by lower average commodity prices[133](index=133&type=chunk) [Sources and Uses of Cash](index=33&type=section&id=Sources%20and%20Uses%20of%20Cash) This section summarizes net cash flows from operating, investing, and financing activities for the reporting periods Net Cash Flows by Activity (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | |---|---|---| | Net cash (used in) provided by operating activities | $(50,699) | $64,807 | | Net cash used in investing activities | $(75,707) | $(58,138) | | Net cash used in financing activities | $(87,008) | $(119,926) | [Operating Activities](index=33&type=section&id=Operating%20Activities) This section details cash flows from operating activities, explaining the unfavorable change from the prior year - Operating activities used **$50.7 million in cash** in H1 2025, a **$115.5 million unfavorable change** from H1 2024[135](index=135&type=chunk) - The change was mainly due to an unfavorable change of **$78.2 million in operating assets and liabilities** and a **$43.0 million decrease in earnings**[135](index=135&type=chunk) [Investing Activities](index=34&type=section&id=Investing%20Activities) This section analyzes cash flows used in investing activities, including capital spending and insurance proceeds - Investing activities used **$75.7 million in cash** in H1 2025, an increase of **$17.6 million** from the prior year[136](index=136&type=chunk) - The increase was due to **$40.0 million of increased capital spending** for growth projects, partially offset by **$14.0 million of insurance proceeds**[136](index=136&type=chunk) - Management expects to invest approximately **$175 million to $200 million** in property, plant and equipment in 2025[136](index=136&type=chunk) [Financing Activities](index=34&type=section&id=Financing%20Activities) This section reviews cash flows from financing activities, including distributions, borrowings, and dividend payments - Financing activities used **$87.0 million in cash** in H1 2025, a **$32.9 million reduction** from the prior year[137](index=137&type=chunk) - This reduction was due to **$45.9 million less in distributions to noncontrolling interests**, partially offset by additional net borrowings on short-term credit facilities[137](index=137&type=chunk) - The company paid **$13.4 million in dividends** in H1 2025, with a declared cash dividend of **$0.195 per common share** on June 19, 2025[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item confirms no material changes in market risk, including commodity and interest rate risk, during the reporting period - No material changes in market risk (commodity and interest rate risk) occurred during the six months ended June 30, 2025[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This item reports on the effectiveness of disclosure controls and procedures and the absence of material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025 - The company's disclosure controls and procedures were effective as of June 30, 2025[145](index=145&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states that no material changes in internal control over financial reporting occurred during the second quarter of 2025 - No material changes in internal control over financial reporting occurred during Q2 2025[146](index=146&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity security sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This item discusses the company's involvement in legal proceedings and management's assessment of potential material losses - The company is subject to legal proceedings and claims in the ordinary course of business[149](index=149&type=chunk) - Management believes it is unlikely that current legal proceedings will result in a material loss beyond accrued amounts[149](index=149&type=chunk) - The outcome of litigation is inherently uncertain, and unfavorable resolutions could materially affect financial condition and operating results[150](index=150&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This item outlines various factors, including economic, weather, and regulatory conditions, that could materially affect the company's business and financial results - The company's business is subject to various risks, including economic, weather, agricultural, regulatory, geopolitical conditions, and commodity price fluctuations[151](index=151&type=chunk) - These factors could materially and adversely affect the company's business, financial condition, operating results, and stock price[151](index=151&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item reports on common stock repurchases from employees for tax obligations and the status of the share repurchase plan Shares Purchased and Repurchase Plan Status (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | |---|---|---| | May 2025 | 2,456 | $38.12 | | **Total** | **2,456** | **$38.12** | **Repurchase Plan Status:** * Authorized: $100 million (as of August 15, 2024, through August 15, 2027) * Utilized as of June 30, 2025: ~$3.5 million * Approximate Dollar Value Remaining: $96,521,201 - Shares were acquired from employees to satisfy tax withholding obligations[152](index=152&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This item confirms that no directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements during Q2 2025[154](index=154&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This item lists all exhibits filed or furnished with the Form 10-Q, including certifications and XBRL documents Exhibits Filed/Furnished | Exhibit Number | Description | |---|---| | 31.1* | Certification of the Chief Executive Officer under Rule 13(a)-14(a)/15d-14(a) | | 31.2* | Certification of the Chief Financial Officer under Rule 13(a)-14(a)/15d-14(a) | | 32.1** | Certifications Pursuant to 18 U.S.C. Section 1350 | | 101** | Inline XBRL Document Set for the Condensed Consolidated Financial Statements | | 104** | Inline XBRL for the cover page | *Filed herewith **Furnished herewith [Signatures](index=38&type=section&id=Signatures) This section provides the official signatures of the company's principal executive and financial officers, certifying the report - The report was signed by William E. Krueger, President and Chief Executive Officer, and Brian A. Valentine, Executive Vice President and Chief Financial Officer, on August 5, 2025[160](index=160&type=chunk)

Financial Data and Key Metrics Changes - The company's reported and adjusted net income for Q2 2025 was $8 million, resulting in earnings per diluted share of $0.23, compared to adjusted net income of $39 million or $1.15 per share in 2024 [14] - Revenues increased slightly due to the addition of Skyland, despite overall lower commodity prices [14] - Adjusted EBITDA for Q2 was $65 million, down from $98 million in 2024 [15] Business Line Data and Key Metrics Changes - The Agribusiness segment reported adjusted pretax income of $17 million, down from $33 million in 2024, with adjusted EBITDA of $46 million compared to $56 million in 2024 [18][20] - The Renewables segment generated pretax income of $10 million, down from $23 million in 2024, with EBITDA of $30 million compared to $52 million last year [21][22] Market Data and Key Metrics Changes - The company noted improved fertilizer results due to increased volume and margin driven by high corn plantings [9] - The wheat harvest was completed, and facilities are prepared for increased corn volumes expected at harvest [9] Company Strategy and Development Direction - The company has acquired its partner's share of four ethanol plants, which is expected to be immediately accretive to EPS and align reported EPS and EBITDA [12][13] - The company is focused on pursuing additional opportunities in ethanol and renewable feedstocks, with plans to improve efficiencies and lower carbon intensity [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, anticipating improvements in the Agribusiness segment as the fall harvest approaches [23] - The company is evaluating additional growth projects and acquisitions aligned with its strategy, with a target of achieving a run rate EPS of approximately $4.3 per share by 2026 [27][28] Other Important Information - The company generated cash flow from operations of $43 million in Q2, down from $89 million in 2024, but continues to demonstrate positive cash flows throughout the ag cycle [16] - Capital spending for Q2 was $49 million, up from $29 million in 2024, with expectations to reach $200 million for the year [17] Q&A Session Summary Question: Did the timing of the ethanol transaction correlate with regulatory tailwinds? - Management indicated that while they have been looking at ethanol capacity for eight quarters, the recent regulatory changes did not materially affect the transaction timing [32] Question: Can you characterize the non-strategic exits in the Agribusiness segment? - Management noted a financial impact of about $7 million from minority investments and a few million dollars from the sale of underperforming facilities [34][35] Question: What is the outlook for merchandising and storage in the second half of the year? - Management expects improved opportunities for both merchandising and storage due to a large corn crop [38] Question: Why was acquiring the balance of the ethanol assets the right move now? - Management stated that acquiring the remaining 50% of the ethanol plants allows for better capital deployment and full earnings benefits without integration risk [42] Question: What is the updated outlook for ethanol margins? - Management believes the second half of 2025 will be better than the first half, with opportunities to drive more free cash flow from the plants [49] Question: How does the Port of Houston investment work with lower soybean meal prices? - Management explained that the price of soybean meal will drive it to export parity, making the investment competitive despite lower prices [53] Question: What was the revenue contribution from Skyland in the quarter? - Management reported revenue of about $200 million from Skyland in each of the first two quarters, with a revised EBITDA outlook for the full year of $25 million to $30 million [62]

Financial Performance - Q2 2025 - Sales and Merchandising Revenues reached $3,136 million, compared to $2,795 million in Q2 2024[17] - Gross Profit was $158 million, down from $175 million in Q2 2024[17] - Pretax Income Attributable to ANDE was $16 million, significantly lower than $41 million in Q2 2024[17] - Adjusted EPS was $024, compared to $115 in Q2 2024[17] Strategic Acquisition - Acquired the remaining 499% ownership interest in TAMH for $425 million, with a net purchase price of $385 million after accounting for $40 million of working capital[16] - The acquisition implies an incremental 250 million gallons of ethanol capacity acquired at a net purchase price of $154/gallon[16] Segment Highlights - Agribusiness revenues increased to $2,415 million in Q2 2025 from $2,109 million in Q2 2024[28] - Renewables revenues increased to $721 million in Q2 2025 from $686 million in Q2 2024[34] - Agribusiness pretax income attributable to ANDE decreased to $18 million in Q2 2025 from $29 million in Q2 2024[28] - Renewables pretax income attributable to ANDE decreased to $10 million in Q2 2025 from $23 million in Q2 2024[34]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) The company reported a decline in Q2 2025 net income and adjusted net income, while strategically acquiring full ownership of its ethanol business and advancing port projects [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) The Andersons, Inc. reported a decline in Q2 2025 net income and adjusted net income, with Renewables and Agribusiness segments still achieving pre-tax income, alongside the full acquisition of The Andersons Marathon Holdings LLC (TAMH) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------- | :------ | :------ | :----- | | Net Income Attributable to The Andersons (million USD) | 8 | 36 | (28) | | Adjusted Net Income Attributable to The Andersons (million USD) | 8 | 39.5 | (31.5) | | Diluted EPS (USD) | 0.23 | 1.05 | (0.82) | | Adjusted Diluted EPS (USD) | 0.24 | 1.15 | (0.91) | | Adjusted EBITDA (million USD) | 65 | 98.3 | (33.3) | | Renewables Pre-Tax Income (million USD) | 17 | 39 | (22) | | Agribusiness Pre-Tax Income (million USD) | 19 | 29 | (10) | [Strategic Developments](index=1&type=section&id=Strategic%20Developments) The company completed the acquisition of the remaining 49.9% stake in The Andersons Marathon Holdings LLC (TAMH), securing 100% ownership in the ethanol industry to grow earnings through renewable energy investments, while advancing the Houston port project to enhance grain operations and export capabilities - The company acquired the remaining 49.9% stake in TAMH for **$425 million** (net purchase price of **$385 million**), doubling its ownership in the ethanol industry, aligning with its renewable energy growth strategy[4](index=4&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - TAMH operates four ethanol plants with a total annual capacity of **500 million gallons**, and has been renamed The Andersons Renewables, LLC following the acquisition[7](index=7&type=chunk) - Construction of the Houston port project is ongoing, expected to be completed by mid-2026, aiming to enhance grain operational efficiency and U.S. soybean meal export capacity[5](index=5&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) The company's Q2 2025 consolidated net income and diluted EPS significantly decreased year-over-year, with strong operating cash flow in Q2 but a net outflow for the first half [Consolidated Financial Results](index=7&type=section&id=Consolidated%20Financial%20Results) In Q2 2025, the company's consolidated net income and diluted EPS significantly decreased year-over-year, with total assets and liabilities declining on the balance sheet, and operating cash flow remaining strong in Q2 but showing a net outflow for the first half [Income Statement](index=7&type=section&id=Income%20Statement) In Q2 2025, the company's sales and merchandising revenues increased by 12.2% year-over-year, while gross profit decreased by 9.7%, and income before income taxes and net income attributable to The Andersons declined by 56.7% and 78.1% respectively 2025 Second Quarter Income Statement Key Data (thousand USD) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--------------------------------- | :------ | :------ | :------- | | Sales and Merchandising Revenues | 3,135,869 | 2,795,205 | 12.2 | | Gross Profit | 158,416 | 175,371 | (9.7) | | Income Before Income Taxes | 24,835 | 57,346 | (56.7) | | Net Income Attributable to The Andersons | 7,857 | 35,976 | (78.1) | | Diluted EPS | 0.23 | 1.05 | (78.1) | [Balance Sheet](index=8&type=section&id=Balance%20Sheet) As of June 30, 2025, total assets were **$3.446 billion**, a 16.4% decrease from December 31, 2024, with cash and cash equivalents down 37.5% and inventories down 39.9% Balance Sheet Key Data (thousand USD) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------- | :----------- | :------------- | :------- | | Cash and Cash Equivalents | 350,970 | 561,771 | (37.5) | | Inventories | 771,868 | 1,286,811 | (39.9) | | Total Assets | 3,446,491 | 4,121,314 | (16.4) | | Short-Term Debt | 104,467 | 166,614 | (37.3) | | Long-Term Debt (Less Current Maturities) | 578,464 | 608,151 | (4.8) | | Total Liabilities | 1,835,981 | 2,521,478 | (27.2) | [Cash Flow Statement](index=9&type=section&id=Cash%20Flow%20Statement) In the first half of 2025, net cash used in operating activities was **$50.7 million**, compared to a net inflow of **$64.8 million** in the prior year, with cash used in investing activities increasing to **$75.7 million** primarily due to higher property, plant, and equipment purchases 2025 First Half Cash Flow Statement Key Data (thousand USD) | Metric | YTD 2025 | YTD 2024 | Change (thousand USD) | | :----------------------- | :------- | :------- | :------------ | | Net Cash Provided by (Used in) Operating Activities | (50,699) | 64,807 | (115,506) | | Net Cash Used in Investing Activities | (75,707) | (58,138) | (17,569) | | Net Cash Used in Financing Activities | (87,008) | (119,926) | 32,918 | | Decrease in Cash and Cash Equivalents | (210,801) | (113,468) | (97,333) | | Cash and Cash Equivalents at End of Period | 350,970 | 530,386 | (179,416) | - Operating cash flow for Q2 2025 was **$299 million**, compared to **$304 million** in Q2 2024[9](index=9&type=chunk) - Capital project expenditures totaled **$49 million** for the quarter, an increase of **$20 million** from 2024[9](index=9&type=chunk) 2025 Second Quarter and First Half Consolidated Income Statement Summary | Metric (thousand USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------- | :------ | :------ | :------- | :------- | | Sales and Merchandising Revenues | 3,135,869 | 2,795,205 | 5,794,967 | 5,513,422 | | Gross Profit | 158,416 | 175,371 | 311,288 | 303,691 | | Income Before Income Taxes | 24,835 | 57,346 | 28,048 | 71,314 | | Net Income | 16,807 | 52,470 | 22,138 | 65,135 | | Net Income Attributable to The Andersons | 7,857 | 35,976 | 8,141 | 41,557 | | Diluted EPS | 0.23 | 1.05 | 0.24 | 1.21 | Consolidated Balance Sheet Summary (thousand USD) | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------- | :----------- | :------------- | :----------- | | Total Assets | 3,446,491 | 4,121,314 | 3,299,813 | | Total Liabilities | 1,835,981 | 2,521,478 | 1,779,551 | | Total Equity | 1,610,510 | 1,599,836 | 1,520,262 | Consolidated Cash Flow Statement Summary (thousand USD) | Metric (thousand USD) | YTD 2025 | YTD 2024 | | :-------------- | :------- | :------- | | Net Cash Provided by (Used in) Operating Activities | (50,699) | 64,807 | | Net Cash Used in Investing Activities | (75,707) | (58,138) | | Net Cash Used in Financing Activities | (87,008) | (119,926) | | Cash and Cash Equivalents at End of Period | 350,970 | 530,386 | [Segment Performance](index=3&type=section&id=Segment%20Performance) Agribusiness and Renewables segments both experienced year-over-year declines in pre-tax income, with Agribusiness impacted by grain market oversupply and weak demand, and Renewables by lower crush margins and higher natural gas costs despite efficient operations [Agribusiness Segment](index=3&type=section&id=Agribusiness%20Segment) The Agribusiness segment reported **$19 million** in pre-tax income for Q2 2025, down from **$29 million** in the prior year, impacted by grain market oversupply, low prices, and limited forward contracting despite increased nutrient sales Agribusiness Segment Key Financial Data (million USD) | Metric | Q2 2025 | Q2 2024 | Change (million USD) | | :--------------------------------- | :------ | :------ | :-------------- | | Pre-Tax Income | 19 | 29 | (10) | | Adjusted Pre-Tax Income Attributable to the Company | 17 | 33 | (16) | | Adjusted EBITDA | 46 | 56 | (10) | - Nutrient sales increased year-over-year, primarily driven by higher nitrogen fertilizer demand due to increased corn acres planted[12](index=12&type=chunk) - Grain oversupply in western markets and weak customer demand resulted in depressed grain prices and limited forward contracting[12](index=12&type=chunk) - Significant grain volumes are expected to come to market at favorable prices in the second half of 2025, presenting opportunities for sales and merchandising in late 2025 and 2026[13](index=13&type=chunk) [Renewables Segment](index=3&type=section&id=Renewables%20Segment) The Renewables segment reported **$17 million** in pre-tax income for Q2 2025, significantly down from **$39 million** in the prior year, due to lower crush margins, higher eastern corn basis, and increased natural gas costs, despite efficient ethanol plant operations Renewables Segment Key Financial Data (million USD) | Metric | Q2 2025 | Q2 2024 | Change (million USD) | | :--------------------------------- | :------ | :------ | :-------------- | | Pre-Tax Income | 17 | 39 | (22) | | Pre-Tax Income Attributable to the Company | 10 | 23 | (13) | | EBITDA | 30 | 52 | (22) | - Ethanol plants continued to operate efficiently, with production and output increasing year-over-year[16](index=16&type=chunk) - Lower crush margins, higher eastern corn basis, and increased natural gas costs contributed to reduced overall profitability[16](index=16&type=chunk) - Ethanol crush margins are expected to rebound in July and continue through the summer driving season, supported by strong demand and anticipated lower corn costs[17](index=17&type=chunk) 2025 Second Quarter Segment Pre-Tax Income (million USD) | Segment | Q2 2025 Pre-Tax Income | Q2 2024 Pre-Tax Income | Change (million USD) | | :--------- | :--------------- | :--------------- | :-------------- | | Agribusiness | 19 | 29 | (10) | | Renewables | 17 | 39 | (22) | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) The company provides non-GAAP financial measures such as adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, and cash from operations before working capital changes to better assess underlying business performance and period-over-period comparability - Non-GAAP financial measures aim to provide additional information, helping investors evaluate the company's operating performance and liquidity, and enhance period-over-period comparability[24](index=24&type=chunk) [Adjusted Net Income and EPS](index=10&type=section&id=Adjusted%20Net%20Income%20and%20EPS) In Q2 2025, adjusted net income attributable to The Andersons was **$8.365 million** and adjusted diluted EPS was **$0.24**, both lower than the prior year period Adjusted Net Income and EPS (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Adjusted Net Income Attributable to The Andersons | 8,365 | 39,494 | 12,421 | 45,088 | | Adjusted Diluted EPS | 0.24 | 1.15 | 0.36 | 1.31 | [EBITDA and Adjusted EBITDA](index=13&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) In Q2 2025, the company's EBITDA was **$69.401 million** and adjusted EBITDA was **$65.192 million**, both decreasing year-over-year, with Agribusiness and Renewables segments also showing a downward trend EBITDA and Adjusted EBITDA (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------- | :------ | :------ | :------- | :------- | | EBITDA | 69,401 | 94,226 | 120,050 | 145,665 | | Adjusted EBITDA | 65,192 | 98,275 | 122,445 | 149,448 | Segment Adjusted EBITDA (thousand USD) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------- | :------ | :------ | :------- | :------- | | Agribusiness | 46,420 | 56,007 | 77,859 | 85,075 | | Renewables | 30,167 | 52,177 | 67,637 | 85,809 | [Cash from Operations Before Working Capital Changes](index=16&type=section&id=Cash%20from%20Operations%20Before%20Working%20Capital%20Changes) In Q2 2025, cash from operations before working capital changes significantly decreased to **$42.886 million** from **$88.765 million** in the prior year, with the year-to-date figure also declining from **$137.174 million** to **$99.860 million** Cash from Operations Before Working Capital Changes (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Net Cash Provided by (Used in) Operating Activities | 299,321 | 304,434 | (50,699) | 64,807 | | Cash from Operations Before Working Capital Changes | 42,886 | 88,765 | 99,860 | 137,174 | [Outlook and Forward-Looking Information](index=5&type=section&id=Outlook%20and%20Forward-Looking%20Information) The company anticipates future earnings to include all ethanol plant contributions, expects an accretive impact, and is exploring new regulatory opportunities like carbon capture well permits [Future Expectations and Strategic Initiatives](index=5&type=section&id=Future%20Expectations%20and%20Strategic%20Initiatives) The company expects future quarterly earnings to include contributions from all ethanol plants, including those previously attributable to non-controlling interests, anticipating an accretive impact, and is exploring new regulatory opportunities such as carbon capture well permits - Future quarterly results will include earnings from all ethanol plants, including those previously attributable to non-controlling interests, which is expected to be accretive[18](index=18&type=chunk) - The company is exploring new regulatory opportunities, including applying for a Class VI well permit at its Clymers, Indiana facility for potential carbon capture[18](index=18&type=chunk) [Income Tax Outlook](index=5&type=section&id=Income%20Tax%20Outlook) The company recorded an **$8 million** income tax provision in Q2 with an effective tax rate of **32%**, and anticipates a full-year adjusted effective tax rate of approximately **22% to 25%** due to the TAMH transaction and elimination of non-controlling interest income Income Tax Information | Metric | Q2 2025 | | :---------- | :------ | | Income Tax Provision | $8 million | | Effective Tax Rate | 32% | - The full-year adjusted effective tax rate is projected to be approximately **22% to 25%**, primarily benefiting from the TAMH transaction and the elimination of non-controlling interest income[20](index=20&type=chunk) [Conference Call Information](index=5&type=section&id=Conference%20Call%20Information) The company will host a webcast conference call on August 5, 2025, at 8:30 AM ET to discuss results and provide an outlook for the remainder of 2025 - A conference call will be held on August 5, 2025, at 8:30 AM ET to discuss results and the 2025 outlook[21](index=21&type=chunk) - Participation in the webcast is available via dial-in or a link on the company's website[21](index=21&type=chunk)[22](index=22&type=chunk) [Forward-Looking Statements Disclaimer](index=5&type=section&id=Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from expectations, including economic, weather, regulatory, competitive, and geopolitical risks - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations[23](index=23&type=chunk) - Risk factors include economic, weather, regulatory conditions, competition, geopolitical risks, and those listed in the company's filings with the U.S. Securities and Exchange Commission[23](index=23&type=chunk) [Company Information & Non-GAAP Explanation](index=6&type=section&id=Company%20Information%20%26%20Non-GAAP%20Explanation) The Andersons, Inc. is a North American agricultural company operating in agribusiness and renewables, committed to customer service, employee growth, community support, and shareholder value, with detailed explanations of non-GAAP financial measures [Company Description](index=6&type=section&id=Company%20Description) The Andersons, Inc. is a North American agricultural company with operations in agribusiness and renewables, dedicated to providing excellent customer service, fostering employee growth, supporting communities, and enhancing company value - The Andersons, Inc. is a North American agricultural company with operations in agribusiness and renewables[25](index=25&type=chunk) - The company is committed to providing excellent customer service, fostering employee growth, supporting communities, and enhancing company value[25](index=25&type=chunk) [Investor Relations Contact](index=6&type=section&id=Investor%20Relations%20Contact) Investors can contact Mike Hoelter, Vice President, Corporate Controller, and Investor Relations, via phone or email for further information - Investor Relations Contact: Mike Hoelter, Vice President, Corporate Controller, and Investor Relations[26](index=26&type=chunk) - Contact Phone: **419-897-6715**; Email: investorrelations@andersonsinc.com[26](index=26&type=chunk) [Non-GAAP Measures Explanation](index=6&type=section&id=Non-GAAP%20Measures%20Explanation) The company utilizes non-GAAP financial measures such as pre-tax income (loss) attributable to the company, adjusted pre-tax income (loss), adjusted net income attributable to the company, adjusted diluted EPS, EBITDA, adjusted EBITDA, and cash from operations before working capital changes to provide additional insights into operational performance and liquidity - Non-GAAP financial measures include: Pre-Tax Income (Loss) Attributable to the Company, Adjusted Pre-Tax Income (Loss), Adjusted Net Income Attributable to the Company, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA, and Cash from Operations Before Working Capital Changes[24](index=24&type=chunk) - These metrics aim to provide additional information to help investors assess the company's operating performance and liquidity and enhance period-over-period comparability, but should not replace GAAP financial measures[24](index=24&type=chunk)

Core Insights - The Andersons, Inc. reported its financial results for the second quarter ended June 30, 2025, and announced the acquisition of full ownership interest in The Andersons Marathon Holdings LLC (TAMH) [1][2][4]. Strategic Acquisition - The acquisition of TAMH, which operates four ethanol plants with a total annual production capacity of 500 million gallons, aligns with the company's strategy to grow earnings through investments in ethanol [2][4]. - This transaction doubles the company's financial ownership in the ethanol industry, a key growth area within its Renewables strategy, and is expected to provide immediate accretion in earnings per share [2][4][5]. Financial Performance - For Q2 2025, the company reported a pretax income of $24.8 million, down from $57.3 million in Q2 2024, with net income attributable to the company of $7.9 million compared to $36 million in the prior year [7][8]. - Adjusted EBITDA for Q2 2025 was $65 million, a decrease from $98.3 million in Q2 2024 [9][39]. - The company’s cash provided by operating activities was $299 million in Q2 2025, slightly down from $304 million in Q2 2024 [6]. Segment Overview - The Agribusiness segment recorded a pretax income of $19 million, down from $29 million in Q2 2024, while the Renewables segment reported a pretax income of $17 million, down from $39 million in the same period [10][13]. - The Renewables segment's adjusted EBITDA was $30 million in Q2 2025, compared to $52 million in Q2 2024 [17][39]. Cash and Debt Management - The company funded the acquisition of TAMH with cash on hand and existing credit facilities, maintaining a modest level of debt and remaining below its long-term debt to EBITDA target of less than 2.5 times [6][18]. - Cash and cash equivalents at the end of Q2 2025 were $350.97 million, down from $561.77 million at the end of 2024 [26][28]. Future Outlook - The company anticipates a large fall harvest and expects to benefit from increased support for renewable fuels, which may enhance its operational efficiency and profitability [3][12][16].

Group 1 - The Andersons, Inc. (NASDAQ: ANDE) is identified as a value play with potential upside from ethanol but is also exposed to risks associated with corn prices [1] - Tyson Foods (NYSE: TSN) stands to benefit from lower corn prices due to reduced feed costs, indicating a favorable position in the current market [1] Group 2 - The analysis emphasizes a mix of fundamental valuation and technical analysis in evaluating companies, particularly those in the technical sector that meet valuation criteria and have growth potential [1] - The author expresses a keen interest in understanding how society is adapting to economic, societal, and environmental pressures, which may influence investment decisions [1]

Group 1 - The Andersons, Inc. will release its financial results for Q2 2025 on August 4, 2025, after 4 p.m. Eastern Time [1] - A webcast to discuss the results and provide a company update will be held on August 5, 2025, at 8:30 a.m. Eastern Time [1] - The company can be contacted via phone for the webcast, with specific numbers provided for U.S. and international callers [2] Group 2 - The Andersons, Inc. is a diversified company focused on agriculture, operating in the agribusiness and renewables sectors [3] - The company is committed to providing exceptional service to customers, supporting employee development, and enhancing community value [3] - More information about the company can be found on its official website [3]

Group 1 - The Andersons, Inc. announced a third quarter 2025 cash dividend of 19.5 cents ($0.195) per share, payable on July 22, 2025, to shareholders of record as of July 01, 2025 [1] - This marks The Andersons' 115th consecutive quarterly cash dividend since its listing on Nasdaq in February 1996 [1] Group 2 - The Andersons, Inc. is a diversified company rooted in agriculture, operating in the agribusiness and renewables sectors [2] - The company is committed to providing extraordinary service to its customers, helping employees improve, supporting communities, and increasing company value [2]

Summary of The Andersons (ANDE) Conference Call Company Overview - The Andersons is a diversified agribusiness operating in grain trading, ethanol production, and plant nutrients, with a strong presence in the Eastern Corn Belt and recent expansion into the Western Corn Belt through the Skylin grain investment [2][6] Key Points and Arguments Leadership Transition - CEO Bill Krueger has been in the role since October, succeeding Pat Bo, and has been with the company since the Lansing acquisition [3] - The company has tripled in size since January 1, 2019, indicating significant growth and transformation [3] Business Segments and Strategy - The Andersons has combined its nutrient business with its trade group to enhance operational efficiency [5] - The company has adopted a more asset-light model since 2019, allowing for greater flexibility and nimbleness in operations [7][8] - The Skylin investment has filled gaps in the company's asset footprint, particularly in Southwest Kansas and the Texas Panhandle [6][21] Market Dynamics - The wheat market is currently balanced, with the U.S. showing a slight oversupply at a carryout of 1.6 million bushels [10][11] - Global corn demand is well-structured, but competition from Milo and wheat is affecting corn demand in the U.S. [11][12] - Fertilizer demand remains high despite a weaker financial position for some farmers, attributed to precision agriculture practices [14][15] Tariffs and Trade - Recent changes to tariffs and port fees have reduced risks for The Andersons, particularly regarding exports from the Great Lakes [18][20] - The company is well-positioned to navigate the current tariff environment, especially concerning fertilizer and wheat imports [18] Financial Performance and Outlook - The Skylin investment is expected to contribute $30 million to $40 million in EBITDA on a run-rate basis [25] - Ethanol margins are expected to improve through Q2 and Q3, driven by increased gasoline demand and potential E15 mandates [31][32] - The company anticipates a stable inventory level for ethanol, similar to the previous year, with a positive outlook on exports [36] Renewable Diesel and Feedstock Opportunities - The Renewable Volume Obligation (RVO) is expected to drive demand for feedstocks, positively impacting The Andersons' renewable diesel feedstock business [40][41] - The company has a target to increase its renewable diesel feedstock trading from 1.5 billion pounds to 2 billion pounds [42] Capital Expenditure and Growth Strategy - The company plans to invest approximately $200 million in CapEx for 2025, focusing on efficiency improvements and potential acquisitions [52] - The current environment is seen as favorable for acquisitions, with a preference for larger deals (doubles and triples) rather than smaller ones [53][54] Key Milestones and Monitoring - Investors should monitor the growing season, proposed legislation, and the company's carbon sequestration permit filing in Indiana [63][64] - The company is focused on optimizing its portfolio and addressing underperforming profit centers [66][67] Additional Important Insights - The Andersons has a robust internal growth project pipeline, with significant investments planned for the Port of Houston and other projects [51] - The company is considering share repurchase options, balancing this with potential acquisition opportunities [59][60] This summary encapsulates the key discussions and insights from The Andersons' conference call, highlighting the company's strategic direction, market dynamics, and financial outlook.

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents the unaudited condensed consolidated financial statements for Q1 2025, reflecting a segment realignment [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Reports a significant decline in Q1 2025 net income due to lower revenues and higher operating expenses Q1 2025 vs Q1 2024 Statement of Operations Highlights (in thousands, except per share data) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Sales and merchandising revenues | $2,659,098 | $2,718,217 | | Gross profit | $152,872 | $128,320 | | Income before income taxes | $3,213 | $13,968 | | Net income attributable to The Andersons, Inc. | $284 | $5,581 | | Diluted earnings per share | $0.01 | $0.16 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Shows a comprehensive loss in Q1 2025, reversing a prior-year gain due to unfavorable hedge and currency impacts Q1 2025 vs Q1 2024 Comprehensive Income (in thousands) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $5,331 | $12,665 | | Other comprehensive (loss) income | $(3,728) | $546 | | Comprehensive (loss) income attributable to The Andersons, Inc. | $(3,701) | $6,127 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details an expanded balance sheet as of March 31, 2025, with increased assets, liabilities, and equity Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Total current assets | $2,528,744 | $2,850,277 | $2,213,908 | | Total assets | $3,797,682 | $4,121,314 | $3,261,073 | | Total current liabilities | $1,434,308 | $1,731,172 | $1,083,284 | | Total liabilities | $2,203,248 | $2,521,478 | $1,785,423 | | Total equity | $1,594,434 | $1,599,836 | $1,475,650 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Indicates increased cash usage in operating and investing activities, offset by cash provided from financing Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(350,020) | $(239,627) | | Net cash used in investing activities | $(43,831) | $(22,052) | | Net cash provided by (used in) financing activities | $50,445 | $(98,280) | | **Decrease in cash and cash equivalents** | **$(342,552)** | **$(359,952)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides key disclosures on segment realignment, the Skyland acquisition, inventory levels, and derivative use - Effective January 1, 2025, the company realigned its structure, combining the former Trade and Nutrient & Industrial segments into a new **Agribusiness segment**, with prior periods recast[20](index=20&type=chunk)[66](index=66&type=chunk)[93](index=93&type=chunk) - On November 1, 2024, the company acquired a **65% ownership interest in Skyland Grain LLC for $85.0 million**, expanding its grain and fertilizer business in Kansas, Colorado, Oklahoma, and Texas[85](index=85&type=chunk) - The company uses commodity derivatives to manage price risk, with **net pretax gains of $50.0 million in Q1 2025** compared to $19.3 million in Q1 2024[29](index=29&type=chunk)[34](index=34&type=chunk) Inventory Breakdown (in thousands) | Inventory Class | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Grain and other agricultural products | $833,477 | $669,373 | | Ethanol and co-products | $133,352 | $104,878 | | Nutrients and cob products | $269,538 | $205,838 | | **Total inventories** | **$1,249,047** | **$994,543** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes segment performance, liquidity, and capital resources, highlighting challenges in Agribusiness and stability in Renewables [Executive Overview & Segment Performance](index=25&type=section&id=Executive%20Overview%20%26%20Segment%20Performance) Summarizes quarterly performance, noting market headwinds for the Agribusiness segment and improved results for Renewables - Agribusiness: Q1 operating results fell behind the prior year due to **limited trade flows and challenged basis levels** in western locations, including those from the Skyland investment[97](index=97&type=chunk) - Renewables: Q1 operating results were **slightly improved** compared to the prior year, driven by efficient ethanol production and higher yields, benefiting from better board crush margins[100](index=100&type=chunk) - The company's grain storage capacity **increased to approximately 280 million bushels** from 170 million bushels year-over-year, primarily due to the Skyland acquisition[99](index=99&type=chunk) [Operating Results](index=27&type=section&id=Operating%20Results) Details segment financial performance, showing a pre-tax loss in Agribusiness and stable income in Renewables Segment Income (Loss) Before Income Taxes (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Agribusiness | $(9,676) | $2,538 | | Renewables | $24,881 | $24,327 | | Other | $(11,992) | $(12,897) | | **Total** | **$3,213** | **$13,968** | - The Agribusiness segment's operating results decreased by $7.7 million (non-GAAP attributable to the company) from the prior year, primarily due to a **$27.6 million increase in operating expenses**, substantially all from the new Skyland business[106](index=106&type=chunk)[107](index=107&type=chunk) - The Renewables segment's operating results decreased by $1.9 million (non-GAAP attributable to the company) as a **$5.5 million increase in gross profit was more than offset by a $3.7 million decrease in other income**, net[110](index=110&type=chunk)[111](index=111&type=chunk) - The effective tax rate for Q1 2025 was **(65.9)%** due to a discrete adjustment for prior period U.S. federal research and development tax credits[112](index=112&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Reviews the company's liquidity, noting decreased working capital, higher cash usage, and significant borrowing capacity - **Working capital was $1,094.4 million** at March 31, 2025, a decrease of $36.2 million from the prior year[117](index=117&type=chunk) - Net cash used in operating activities **increased by $110.4 million YoY to $350.0 million**, mainly due to unfavorable changes in operating assets and liabilities[119](index=119&type=chunk)[120](index=120&type=chunk) - Management expects to invest approximately **$175 million to $200 million** in property, plant and equipment in 2025[121](index=121&type=chunk) - As of March 31, 2025, the Company had **$1,935.1 million available for borrowing** under its credit facilities and was in compliance with all debt covenants[124](index=124&type=chunk)[125](index=125&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) States no material changes occurred in market risk during Q1 2025, referencing the 2024 Form 10-K - There were **no material changes in market risk**, specifically commodity and interest rate risk, during the three months ended March 31, 2025[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls in Q1 2025 - The company's principal executive officer and principal financial officer concluded that **disclosure controls and procedures were effective** as of March 31, 2025[130](index=130&type=chunk) - **No material changes** in the Company's internal control over financial reporting were identified during the first quarter of 2025[131](index=131&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Reports involvement in ordinary course legal proceedings not expected to have a material adverse financial impact - The company is subject to legal proceedings in the ordinary course of business, but management believes there is **no reasonable possibility of incurring a material loss** from these claims[134](index=134&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Refers to the 2024 Form 10-K for a comprehensive discussion of factors that could materially affect the business - The company refers to the "Risk Factors" section in its 2024 Form 10-K for a comprehensive discussion of potential risks affecting its business, financial condition, and operating results[136](index=136&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q1 2025 share repurchase activity, with $96.5 million remaining available under the current plan Share Repurchase Activity (Q1 2025) | Metric | Value | | :--- | :--- | | Total Shares Purchased | 122,190 | | Average Price Paid Per Share | $41.09 | | Value Remaining Under Plan (as of Mar 31, 2025) | $96,521,201 | [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) Reports no adoption, modification, or termination of Rule 10b5-1 trading plans by directors or officers in Q1 2025 - **No directors or executive officers adopted, modified, or terminated** a Rule 10b5-1 trading plan or any non-Rule 10b5-1 trading arrangement in Q1 2025[139](index=139&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the report, including certifications, credit agreements, and XBRL data - Lists exhibits filed with the report, such as the First Amendment to the Amended and Restated Credit Agreement, CEO/CFO certifications, and Inline XBRL documents[140](index=140&type=chunk)