EX-99.1 2 q42020ex-99pressrelease.htm EX-99.1 Document

logoa04a261a.gif NEWS RELEASE


The Andersons, Inc. Reports Fourth Quarter Results
MAUMEE, OHIO, February 16, 2021 - The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the fourth quarter ended December 31, 2020.

Fourth Quarter Highlights:

•Company reported net income attributable to The Andersons of $16.0 million, or $0.48 per diluted share, and adjusted net income of $19.4 million, or $0.59 per diluted share.
•Trade reported pretax income of $28.3 million and adjusted pretax income of $29.3 million on improved merchandising results.
•Ethanol reported a pretax loss attributable to the company of $3.5 million that included a $6.6 million non-cash mark-to-market charge.
•Plant Nutrient completed its best year since 2014 as it recorded pretax income of $3.2 million for the quarter.
•Adjusted EBITDA for the quarter of $85.0 million was comparable year over year despite significant pandemic impacts.

"I am very excited about the recent strong, demand-driven rally in grain and fertilizer markets and what it means for U.S. agriculture and The Andersons,” said President and CEO Pat Bowe. "We have already participated in multi-year highs in grain elevation margins, and have benefited from strong export demand. Fertilizer demand was strong throughout the fourth quarter. With more planted corn acres in the forecast, it looks like strong fertilizer demand will continue."

"We improved our fourth quarter results modestly year over year, and our outlook for 2021 has improved," continued Bowe. "Our Trade income was up substantially on strong merchandising results from our diverse commodity portfolio, and Plant Nutrient's full-year results nearly doubled. Our Ethanol business benefited from the launch of our new high-protein feed products. Finally, Rail remained profitable despite weak railcar demand.

"We continue to benefit greatly from the complementary trading business we acquired in early 2019 and have since successfully integrated. We continue to focus on creating a leaner cost structure, having taken approximately $40 million of cost out of the business in the last two years. In addition to opportunities in the Trade and Plant Nutrient segments, a recovery in the ethanol and rail markets should lead to significant year-over-year increases in EBITDA. In short, we are pleased to see the strength in ag markets and look forward to better financial performance ahead."


$ in millions, except per share amounts
Q4 2020
Q4 2019
Variance
YTD 2020
YTD 2019
Variance
Pretax Income (Loss) Attributable to the Company1
$24.1 $21.4 $2.7 $(2.5)$31.4 $(33.9)
Adjusted Pretax Income (Loss) Attributable to the Company1,2
28.4 23.7 4.7 10.6 51.0 (40.4)
     Trade2
29.3 17.6 11.7 28.9 37.6 (8.7)
     Ethanol1,2
(3.5)8.1 (11.6)(25.4)15.9 (41.3)
     Plant Nutrient2
3.2 3.9 (0.7)16.0 8.4 7.6 
     Rail2
2.0 4.5 (2.5)5.5 15.1 (9.6)
     Other2
(2.6)(10.4)7.8 (14.4)(26.0)11.6 
Net Income Attributable to the Company1
16.0 6.6 9.4 7.7 18.3 (10.6)
Adjusted Net Income Attributable to the Company1,2
19.4 18.4 1.0 2.9 43.0 (40.1)
Diluted EPS0.48 0.19 0.29 0.23 0.55 (0.32)
Adjusted Diluted EPS2
0.59 0.55 0.04 0.09 1.30 (1.21)
EBITDA2
83.5 82.2 1.3 215.4 234.0 (18.6)
Adjusted EBITDA2
$85.0 $84.5 $0.5 $225.7 $253.6 $(27.9)
1 Reflects amounts attributable to the company and excludes losses attributable to the noncontrolling interests of $1.3 million in Q4 2020, $1.0 million in Q4 2019, $21.9 million for the full year 2020 and $3.2 million for the full year 2019. See appendix for non-GAAP explanations and reconciliations.
2 Non-GAAP financial measures; see appendix for explanations and reconciliations.

Cash, Liquidity and Long-Term Debt Management

“We continued to generate strong operating cash flows and remained disciplined in our capital spending during the fourth quarter,” said Executive Vice President and CFO Brian Valentine. “We were well-prepared for the need for short-term working capital funding as commodity prices spiked during the quarter and into early 2021. We were pleased with the progress we made in 2020 to reduce long-term debt, which remains a priority."

The company generated $74.6 million and $73.0 million in cash from operations before working capital changes during the fourth quarters of 2020 and 2019, respectively. For the full years 2020 and 2019, the company generated $200.9 million and $192.6 million in cash from operations before working capital changes, respectively.

The company spent $16.6 million net of proceeds from asset sales on capital projects during the fourth quarter and spent $86.8 million net of proceeds from asset sales for the full year 2020, well beneath its self-imposed $100 million ceiling.

Working capital, readily marketable inventory and short-term debt each increased year over year due to the significant increase in commodity prices. While the company has been able to maintain adequate liquidity, it recently increased its short-term borrowing capacity by $250 million to further ensure adequate liquidity and accommodate further volatility and related opportunities in 2021.

Finally, despite all the challenges it faced during 2020, the company reduced long-term debt by approximately $100 million and remains focused on additional reductions of $200 to $250 million by the end of 2023.



Fourth Quarter Segment Overview

Trade Records Higher Results Driven by Continued Strong Merchandising Income

Trade recorded pretax income of $28.3 million and adjusted pretax income of $29.3 million for the quarter, a significant improvement compared to a pretax loss of $19.9 million and adjusted pretax income of $17.6 million in the fourth quarter of 2019. The primary difference between reported and adjusted income in 2019 was attributable to approximately $40 million in asset and investment impairment charges.

Income from commodity merchandising rose by more than one-third year over year, besting an already strong performance in the fourth quarter of 2019. The performance of the segment's asset-based businesses declined, as income from both storing and handling grain decreased.

Trade’s fourth quarter adjusted EBITDA was $45.8 million, up approximately 23 percent over fourth quarter 2019 adjusted EBITDA of $37.2 million. Its full year adjusted EBITDA decreased from $123.4 million in 2019 to $95.5 million in 2020, primarily as a result of fewer wheat opportunities and the remaining impact of the poor 2019 harvest in the Eastern Corn Belt.

Ethanol Results Decline on Big Decrease in Crush Margins and Large Mark-to-Market Charge

The Ethanol segment reported a pretax loss attributable to the company of $3.5 million in the fourth quarter compared to adjusted pretax income attributable to the company of $8.1 million in the same period in 2019.

Production volumes in the quarter were flat year over year. The business benefited from execution of its high-protein feed strategy as well as higher DDG and corn oil prices. The ethanol and vegetable oil trading businesses also posted comparatively better results due to improved margins and higher volumes.

Ethanol board crush margins were 25 cents lower year over year and were driven by rising corn prices that were only partially mitigated by higher ethanol prices. Strong operating performance at the plants helped offset the impact of the lower crush margins. The segment also recorded a $6.6 million non-cash, mark-to-market charge during the quarter that is expected to reverse in 2021.

Ethanol recorded adjusted EBITDA of $16.2 million in the fourth quarter of 2020, down from 2019 fourth quarter adjusted EBITDA of $25.9 million.

Plant Nutrient Closes out Strong Year; Rail Records Modest Income

Plant Nutrient recorded adjusted pretax income of $3.2 million in the fourth quarter compared to adjusted pretax income of $3.9 million in the same period of the prior year. Tons sold were up across all major product lines, but especially in Ag Supply Chain. Margin per ton declined moderately, most notably in Engineered Granules. The business continued to benefit from disciplined working capital and expense management.

Plant Nutrient’s current quarter adjusted EBITDA was $10.8 million compared to 2019 fourth quarter adjusted EBITDA of $11.5 million. For the full year, Plant Nutrient recorded adjusted EBITDA of $47.2 million in 2020 and $42.3 million in 2019 as planting and harvest conditions were much improved year over year.



Rail recorded adjusted fourth quarter pretax income of $2.0 million compared to $4.5 million of adjusted pretax income in the same period of the prior year. Lower income from railcar sales accounted for the majority of the shortfall.

Rail's fourth quarter 2020 adjusted EBITDA was $13.5 million compared to fourth quarter 2019 adjusted EBITDA of $17.6 million. Full-year 2020 EBITDA was $55.7 million, a 15 percent decrease from 2019 results, primarily due to lower leasing income.

Full-Year Provision for Income Taxes Includes CARES Act Benefits

The company’s full-year income tax provision included additional CARES Act tax benefits of approximately $14.8 million, or $0.44 per diluted share. The company has excluded these benefits from its adjusted net income. At year-end, the company had received $1.7 million of an anticipated total of $39.3 million in CARES Act refunds. The company expects to receive the remaining $37.6 million in 2021, and has removed that amount from cash from operations before working capital changes.

The company’s reported effective income tax rate continued to be substantially impacted by the income or loss earned by the noncontrolling interests, which may result in highly variable effective tax rates in future periods.

Fourth quarter and full-year 2019 income tax provisions included tax expense of approximately $8.0 million, or $0.24 per diluted share, related to nondeductible Canadian losses on the company's investment in Thompsons Limited that it excluded from its adjusted net income. In addition, the company’s fourth quarter 2019 income tax provision included a tax benefit of approximately $2.7 million, or $0.08 per diluted share, for federal research and development income tax credits.

Conference Call

The company will host a webcast on Wednesday, February 17, 2021, at 11 a.m. Eastern Standard Time, to discuss its performance and provide its updated outlook for 2021. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 9267363). It is recommended that you call 10 minutes before the conference call begins.

To access the webcast, click on the link: https://edge.media-server.com/mmc/p/cintwfki. Complete the four fields as directed and click Submit. A replay of the call will be available at www.andersonsinc.com under the heading "Investors" on the company’s website.  

Forward-Looking Statements

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition, the COVID-19 pandemic and the risk factors set forth from time to time in the company’s filings with the Securities and Exchange Commission. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.




Non-GAAP Measures

This release contains non-GAAP financial measures. The company believes that pretax income attributable to The Andersons, adjusted pretax income attributable to the company, net income attributable to the company, adjusted net income attributable to the company, adjusted diluted earnings per share, EBITDA, adjusted EBITDA and cash from operations before working capital changes provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. The above measures are not and should not be considered as alternatives to pretax income, net income, net income per share and cash provided by (used in) operating activities as determined by generally accepted accounting principles. Reconciliations of the GAAP to non-GAAP measures may be found within this press release and the financial tables provided herein.

Company Description

Founded in 1947 in Maumee, Ohio, The Andersons, Inc. (Nasdaq: ANDE) is a diversified company rooted in agriculture that conducts business in the commodity trading, ethanol, plant nutrient and rail sectors. Guided by its Statement of Principles, The Andersons strives to provide extraordinary service to its customers, help its employees improve, support its communities and increase the value of the company. For more information, please visit www.andersonsinc.com.

Investor Relations Contact    
John Kraus    
Director, Investor Relations
Phone: 419-891-6544
E-mail: investorrelations@andersonsinc.com





The Andersons, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended December 31,Twelve months ended December 31,
(in thousands, except per share data)2020201920202019
Sales and merchandising revenues$2,542,917 $1,885,603 $8,208,436 $8,170,191 
Cost of sales and merchandising revenues2,409,226 1,747,244 7,803,514 7,652,299 
Gross profit133,691 138,359 404,922 517,892 
Operating, administrative and general expenses105,792 109,457 399,207 436,842 
Asset impairment— 38,131 — 41,212 
Interest expense, net13,292 14,078 51,275 59,691 
Other income, net:
Equity in earnings (loss) of affiliates, net410 (4,992)638 (7,359)
Gain from remeasurement of equity method investments, net— 36,287 — 35,214 
Other income, net7,751 12,387 20,448 20,109 
Income (loss) before income taxes22,768 20,375 (24,474)28,111 
Income tax expense (benefit)8,119 14,708 (10,259)13,051 
Net income (loss)14,649 5,667 (14,215)15,060 
Net loss attributable to the noncontrolling interests(1,342)(982)(21,925)(3,247)
Net income attributable to The Andersons, Inc.$15,991 $6,649 $7,710 $18,307 
 
Per common share:
Basic earnings attributable to The Andersons, Inc. common shareholders$0.48 $0.20 $0.23 $0.56 
Diluted earnings attributable to The Andersons, Inc. common shareholders$0.48 $0.19 $0.23 $0.55 






The Andersons, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)December 31, 2020December 31, 2019
Assets
Current assets:
  Cash, cash equivalents and restricted cash$29,123 $54,895 
  Accounts receivable, net659,834 536,367 
  Inventories1,300,693 1,170,536 
  Commodity derivative assets - current320,706 107,863 
  Other current assets106,053 75,681 
Total current assets2,416,409 1,945,342 
Other assets:
Goodwill135,709 135,360 
Other intangible assets, net142,940 175,312 
Right of use assets, net56,031 76,401 
Other assets, net49,907 45,610 
Total other assets384,587 432,683 
Rail assets leased to others, net591,946 584,298 
Property, plant and equipment, net879,179 938,418 
Total assets$4,272,121 $3,900,741 
 
Liabilities and equity
Current liabilities:
  Short-term debt$403,703 $147,031 
  Trade and other payables957,683 873,081 
  Customer prepayments and deferred revenue180,160 133,585 
  Commodity derivative liabilities – current146,990 46,942 
  Current maturities of long-term debt75,475 62,899 
  Accrued expenses and other current liabilities167,671 176,381 
Total current liabilities1,931,682 1,439,919 
Long-term lease liabilities37,177 51,091 
Long-term debt, less current maturities916,540 1,016,248 
Deferred income taxes170,147 146,155 
Other long-term liabilities55,915 51,673 
Total liabilities3,111,461 2,705,086 
Total equity 1,160,660 1,195,655 
Total liabilities and equity$4,272,121 $3,900,741 




The Andersons, Inc.
Consolidated Statements of Cash Flows
(unaudited)
Three months ended December 31,Twelve months ended December 31,
2020201920202019
Operating Activities
Net income (loss)$14,649 $5,667 $(14,215)$15,060 
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization47,471 47,770 188,638 146,166 
Bad debt expense(1,007)392 7,042 4,007 
Equity in (earnings) losses of affiliates, net of dividends(410)4,777 (638)7,671 
Loss (gain) on sales of assets, net825 (7,164)(37)(7,063)
Gains on sales of Rail assets and related leases, net(474)(2,607)(649)(4,122)
Stock based compensation expense2,441 4,592 10,183 16,229 
Deferred income tax4,469 16,785 26,386 5,114 
Inventory write-down743 — 11,676 — 
Asset impairment— 38,131 — 41,212 
Gain from remeasurement of equity method investments, net— (35,214)— (35,214)
Other5,931 (97)10,072 3,540 
Changes in operating assets and liabilities:
Accounts receivable(126,550)(3,392)(128,502)1,487 
Inventories(539,761)(407,198)(139,499)(1,578)
Commodity derivatives(112,596)(8,228)(115,170)21,714 
Other assets(18,865)11,715 (53,208)30,497 
Payables and other accrued expenses452,911 363,008 123,489 103,842 
Net cash provided by (used in) operating activities(270,223)28,937 (74,432)348,562 
Investing Activities
Acquisition of businesses, net of cash acquired— 47,042 — (102,580)
Purchases of Rail assets(1,481)(36,813)(27,739)(105,254)
Proceeds from sale of Rail assets2,303 8,908 10,077 18,090 
Purchases of property, plant and equipment and capitalized software(17,733)(39,872)(77,147)(165,223)
Proceeds from sale of assets and businesses524 29,766 11,112 30,617 
Purchase of investments(210)— (3,059)(1,490)
Other— 808 — 808 
Net cash (used in) provided by investing activities(16,597)9,839 (86,756)(325,032)
Financing Activities
Net change in short-term borrowings299,154 7,638 254,971 (278,824)
Proceeds from issuance of long-term debt258,000 110,896 471,906 922,594 
Payments of long-term debt(249,017)(114,597)(559,711)(608,483)
Proceeds from noncontrolling interest owner2,082 — 8,575 4,714 
Distributions to noncontrolling interest owner— — (10,322)— 
Payments of debt issuance costs(648)(912)(898)(6,561)
Dividends paid(5,770)(5,547)(23,004)(22,118)
Other(1,078)(1,028)(5,221)(2,615)
Net cash (used in) provided by financing activities302,723 (3,550)136,296 8,707 
Effect of exchange rates on cash, cash equivalents and restricted cash(473)(1,630)(880)65 
Increase (decrease) in cash, cash equivalents and restricted cash15,430 33,596 (25,772)32,302 
Cash, cash equivalents and restricted cash at beginning of period13,693 21,299 54,895 22,593 
Cash, cash equivalents and restricted cash at end of period$29,123 $54,895 $29,123 $54,895 


The Andersons, Inc.
Adjusted Net Income Attributable to The Andersons, Inc.
A non-GAAP financial measure
(unaudited)
Three months ended December 31,Twelve months ended December 31,
(in thousands, except per share data)2020201920202019
Net income attributable to The Andersons, Inc.$15,991 $6,649 $7,710 $18,307 
Items impacting other income, net of tax:
Transaction related stock compensation946 1,998 4,206 9,337 
Severance costs528 — 6,091 — 
Termination of interest rate derivatives and debt fees2,849 — 2,849 — 
One time acquisition costs— 2,158 — 8,007 
Asset impairment including equity method investments — 43,097 — 46,178 
Gain from remeasurement of equity method investments, net— (36,287)— (35,214)
Gain on sales of assets— (8,646)— (8,646)
Income tax impact of adjustments (a)(962)9,386 (17,924)5,051 
Total adjusting items, net of tax3,361 11,706 (4,778)24,713 
Adjusted net income (loss) attributable to The Andersons, Inc.$19,352 $18,355 $2,932 $43,020 
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders$0.48 $0.19 $0.23 $0.55 
Impact on diluted earnings (loss) per share$0.11 $0.36 $(0.14)$0.75 
Adjusted diluted earnings (loss) per share$0.59 $0.55 $0.09 $1.30 
(a) Income tax adjustments include $(14.8) million due to CARES Act benefits and certain discrete items in 2020 year to date. Quarter to date income tax adjustments due to CARES Act benefits were de minimus.

Adjusted net income (loss) attributable to the Andersons, Inc. reflects reported net income (loss) available to The Andersons, Inc. common shareholders after the removal of specified items described above. Adjusted diluted earnings (loss) per share reflects the fully diluted EPS of The Andersons, Inc. after removal of the effect on EPS as reported of specified items described above. Management believes that Adjusted net income (loss) attributable to The Andersons, Inc. and Adjusted diluted earnings (loss) per share are useful measures of The Andersons, Inc. performance as they provide investors additional information about the operations of the company allowing better evaluation of underlying business performance and better comparability to previous periods. These non-GAAP financial measures are not intended to replace or be alternatives to Net income attributable to The Andersons, Inc. and Diluted earnings attributable to The Andersons, Inc. common shareholders as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s average number of diluted shares outstanding for each respective period in order to arrive at an adjusted diluted earnings (loss) per share amount for each specified item.



The Andersons, Inc.
Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)
A non-GAAP financial measure
(unaudited)
(in thousands)Trade Ethanol Plant Nutrient Rail Other Total
Three months ended December 31, 2020
Net income (loss)$28,337 $(4,795)$3,187 $(867)$(11,213)$14,649 
Interest expense (income)5,350 1,553 1,270 5,459 (340)13,292 
Tax provision— — — — 8,119 8,119 
Depreciation and amortization11,149 19,438 6,386 8,903 1,595 47,471 
EBITDA44,836 16,196 10,843 13,495 (1,839)83,531 
Adjusting items impacting EBITDA:
Transaction related stock compensation946 — — — — 946 
Severance Costs— — — — 528 528 
Total adjusting items946 — — — 528 1,474 
Adjusted EBITDA$45,782 $16,196 $10,843 $13,495 $(1,311)$85,005 
Three months ended December 31, 2019
Net income (loss)$(19,938)$42,098 $4,625 $4,461 $(25,579)$5,667 
Interest expense (income)6,103 2,175 1,476 4,415 (91)14,078 
Tax provision— — — — 14,708 14,708 
Depreciation and amortization13,450 16,633 6,207 8,745 2,735 47,770 
EBITDA(385)60,906 12,308 17,621 (8,227)82,223 
Adjusting items impacting EBITDA:
Acquisition costs833 1,325 — — — 2,158 
Transaction related stock compensation1,998 — — — — 1,998 
Asset impairments including equity method investments40,420 — 2,175 — 502 43,097 
Gain from remeasurement of equity method investments, net— (36,287)— — — (36,287)
Gain on sales of assets(5,702)— (2,944)— — (8,646)
Total adjusting items37,549 (34,962)(769)— 502 2,320 
Adjusted EBITDA$37,164 $25,944 $11,539 $17,621 $(7,725)$84,543 


(in thousands)Trade Ethanol Plant Nutrient Rail Other Total
Twelve months ended December 31, 2020
Net income (loss)$24,687 $(47,338)$16,015 $2,607 $(10,186)$(14,215)
Interest expense (income)21,974 7,461 5,805 17,491 (1,456)51,275 
Tax benefit— — — — (10,259)(10,259)
Depreciation and amortization44,627 73,224 25,407 35,573 9,807 188,638 
EBITDA91,288 33,347 47,227 55,671 (12,094)215,439 
Adjusting items impacting EBITDA:
Transaction related stock compensation4,206 — — — — 4,206 
Severance Costs— — — — 6,091 6,091 
Total adjusting items4,206 — — — 6,091 10,297 
Adjusted EBITDA$95,494 $33,347 $47,227 $55,671 $(6,003)$225,736 
Twelve months ended December 31, 2019
Net income (loss)$(17,328)$47,660 $9,159 $15,090 $(39,521)$15,060 
Interest expense (income)34,843 943 7,954 16,486 (535)59,691 
Tax provision— — — — 13,051 13,051 
Depreciation and amortization50,973 23,727 25,985 34,122 11,359 146,166 
EBITDA68,488 72,330 43,098 65,698 (15,646)233,968 
Adjusting items impacting EBITDA:
Acquisition costs6,682 1,325 — — — 8,007 
Transaction related stock compensation9,337 — — — — 9,337 
Asset impairments including equity method investments43,501 — 2,175 — 502 46,178 
Gain from remeasurement of equity method investments, net1,073 (36,287)— — — (35,214)
Gain on sales of assets(5,702)— (2,944)— — (8,646)
Total adjusting items54,891 (34,962)(769)— 502 19,662 
Adjusted EBITDA$123,379 $37,368 $42,329 $65,698 $(15,144)$253,630 

Adjusted EBITDA is defined as earnings before taxes, interest, and depreciation and amortization, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense, tax expense and depreciation and amortization to net income (loss). Management believes that adjusted EBITDA is a useful measure of the company’s performance as it provides investors additional information about the company’s operations allowing better evaluation of underlying business performance and improved comparability to prior periods. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to net income (loss), the most directly comparable GAAP financial measure.


The Andersons, Inc.
Segment Data (unaudited)
(in thousands)TradeEthanolPlant NutrientRailOtherTotal
Three months ended December 31, 2020
Sales and merchandising revenues$1,979,272 $373,517 $155,514 $34,614 $— $2,542,917 
Gross profit90,796 2,562 30,623 9,710 — 133,691 
Equity in earnings of affiliates, net410 — — — — 410 
Other income, net5,089 1,330 339 342 651 7,751 
Income (loss) before income taxes28,337 (4,795)3,187 (867)(3,094)22,768 
Loss attributable to the noncontrolling interests— (1,342)— — — (1,342)
Income (loss) before income taxes attributable to The Andersons, Inc. (a)$28,337 $(3,453)$3,187 $(867)$(3,094)$24,110 
Adjustments to income (loss) before income taxes (b)946 — — 2,849 528 4,323 
Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a)$29,283 $(3,453)$3,187 $1,982 $(2,566)$28,433 
Three months ended December 31, 2019
Sales and merchandising revenues$1,391,151 $312,860 $138,182 $43,410 $— $1,885,603 
Gross profit87,652 12,594 23,521 14,592 — 138,359 
Equity in losses of affiliates, net(4,992)— — — — (4,992)
Other income, net (c) 8,365 36,503 3,256 191 359 48,674 
Income (loss) before income taxes(19,938)42,098 4,625 4,461 (10,871)20,375 
Loss attributable to the noncontrolling interests— (982)— — — (982)
Income (loss) before income taxes attributable to The Andersons, Inc. (a)$(19,938)$43,080 $4,625 $4,461 $(10,871)$21,357 
Adjustments to income (loss) before income taxes (b)37,549 (34,962)(769)— 502 2,320 
Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a)$17,611 $8,118 $3,856 $4,461 $(10,369)$23,677 
(a) Income (loss) before income taxes attributable to The Andersons, Inc. for each operating segment is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income.
(b) Additional information on the individual adjustments that are included in the adjustments to income (loss) before income taxes can be found in the Reconciliation to EBITDA and Adjusted EBITDA table. 2020 adjustment to the Rail segment relates to the termination of interest rate derivatives and debt fees which were recorded in Interest expense, net and can be found in the reconciliation to adjusted net income table.
(c) Gain from remeasurement of equity method investment within the Ethanol segment is included in Other income, net for the three months ended December 31, 2019.



(in thousands)TradeEthanolPlant NutrientRailOtherTotal
Twelve months ended December 31, 2020
Sales and merchandising revenues$6,141,402 $1,260,259 $662,959 $143,816 $— $8,208,436 
Gross profit278,216 (18,267)106,248 38,725 — 404,922 
Equity in earnings of affiliates, net638 — — — — 638 
Other income, net11,954 2,795 1,274 2,885 1,540 20,448 
Income (loss) before income taxes24,687 (47,338)16,015 2,607 (20,445)(24,474)
Loss attributable to the noncontrolling interests— (21,925)— — — (21,925)
Income (loss) before income taxes attributable to The Andersons, Inc. (a)$24,687 $(25,413)$16,015 $2,607 $(20,445)$(2,549)
Adjustments to income (loss) before income taxes (b)4,206 — — 2,849 6,091 13,146 
Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a)$28,893 $(25,413)$16,015 $5,456 $(14,354)$10,597 
Twelve months ended December 31, 2019
Sales and merchandising revenues$6,144,526 $1,211,997 $646,730 $166,938 $— $8,170,191 
Gross profit329,096 32,567 99,104 57,125 — 517,892 
Equity in losses of affiliates, net(6,835)(524)— — — (7,359)
Other income, net (c) 10,070 37,199 4,903 1,583 1,568 55,323 
Income (loss) before income taxes(17,328)47,660 9,159 15,090 (26,470)28,111 
Loss attributable to the noncontrolling interests— (3,247)— — — (3,247)
Income (loss) before income taxes attributable to The Andersons, Inc. (a)$(17,328)$50,907 $9,159 $15,090 $(26,470)$31,358 
Adjustments to income (loss) before income taxes (b)54,891 (34,962)(769)— 502 19,662 
Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a)$37,563 $15,945 $8,390 $15,090 $(25,968)$51,020 
(a) Income (loss) before income taxes attributable to The Andersons, Inc. for each operating segment is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income.
(b) Additional information on the individual adjustments that are included in the adjustments to income (loss) before income taxes can be found in the reconciliation to EBITDA and Adjusted EBITDA table. 2020 adjustment to the Rail segment relates to the termination of interest rate derivatives and debt fees which were recorded in Interest expense, net and can be found in the reconciliation to adjusted net income table.
(c) Gains and losses from remeasurements of equity method investments within the Ethanol and Trade segments are included in Other income, net for the twelve months ended December 31, 2019.




The Andersons, Inc.
Cash from Operations Before Working Capital Changes
A non-GAAP financial measure
(unaudited)
Three months ended December 31,Twelve months ended December 31,
(in thousands, except per share data)2020201920202019
Cash provided by (used in) operating activities$(270,223)$28,937 $(74,432)$348,562 
Changes in operating assets and liabilities
Accounts receivable(126,550)(3,392)(128,502)1,487 
Inventories(539,761)(407,198)(139,499)(1,578)
Commodity derivatives(112,596)(8,228)(115,170)21,714 
Other assets(18,865)11,715 (53,208)30,497 
Payables and accrued expenses452,911 363,008 123,489 103,842 
Total changes in operating assets and liabilities(344,861)(44,095)(312,890)155,962 
Less: changes in CARES Act tax refund receivable— — (37,564)— 
Cash from operations before working capital changes$74,638 $73,032 $200,894 $192,600 

Cash from operations before working capital changes is defined as cash provided by (used in) operating activities before the impact of changes in working capital within the statement of cash flows. The Company calculates cash from operations by eliminating the effect of changes in accounts receivable, inventories, commodity derivatives, other assets, and payables and accrued expenses from the cash provided by (used in) operating activities. Management believes that cash from operations before working capital changes is a useful measure of the company’s performance as it provides investors additional information about the company’s operations allowing better evaluation of underlying business performance and improved comparability to prior periods. Cash from operations before working capital changes is a non-GAAP financial measure and is not intended to replace or be an alternative to cash provided by (used in) operating activities, the most directly comparable GAAP financial measure.