Part I.

Item 1. Business

Company Overview

The Andersons, Inc. (the "Company") is a diversified company rooted in agriculture. Founded in Maumee, Ohio in 1947, the Company conducts business across North America in the grain, ethanol, plant nutrient and rail sectors.

Segment Descriptions

The Company's operations are classified into ~~five~~four reportable business segments: Grain, Ethanol, ~~Rail,~~ Plant Nutrient, and ~~Retail.~~Rail. Each of these segments is organized based upon the nature of products and services offered. See Note 1314 to the Consolidated Financial Statements in Item 8 for information regarding business segments.

Grain Group

The Grain ~~business~~Group primarily operates grain elevators in various states in the U.S. Corn Belt. Income is earned on grain bought and sold or “put thru” the elevator, grain that is purchased and conditioned for resale, and space income. Space income consists of appreciation or depreciation in the basis value of grain held and represents the difference between the cash price of a commodity in one of the Company's facilities and an exchange traded futures price (“basis”); appreciation or depreciation between the future exchange contract months (“spread”); and grain stored for others upon which storage fees are earned. The Grain business also offers a number of unique grain marketing, risk management and corn origination services to its customers and affiliated ethanol facilities for which it collects fees.

The Company has a lease and marketing agreement with Cargill, Incorporated ~~(“Cargill”)~~ for Cargill's Maumee and Toledo, Ohio grain handling and storage facilities. As part of the agreement, Cargill holds marketing rights to grain in the Cargill-owned facilities as well as the adjacent Company-owned facilities in Maumee and Toledo. ~~The~~As of December 31, 2018, the lease of the Cargill-owned facilities covers approximately 6%, or ~~8.7~~8.8 million bushels, of the Company's total storage space.

Grain prices are not predetermined, so sales are negotiated by the Company's merchandising staff. The principal grains sold by the Company are corn, soybeans and wheat. Approximately ~~92%~~86% of grain sales by the Company in ~~2017~~2018 were purchased by U.S. grain processors and feeders, and approximately 8%14% were exported. Most of the Company's exported grain sales are made through intermediaries while some grain is shipped directly to foreign countries, mainly Canada. The Company ships grain from its facilities by rail, truck, or boat. Rail shipments are made primarily to grain processors and feeders with some rail shipments made to exporters on the Gulf of Mexico or east coast. Boat shipments are from the Port of Toledo. In addition, grain is transported via truck for direct ship transactions in which producers sell grain to the Company, but have it delivered directly to the end user.

The Company's grain operations rely principally on forward purchase contracts with producers, dealers and commercial elevators to ensure an adequate supply of grain to the Company's facilities throughout the year. The Company makes grain purchases at prices referenced to ~~the Chicago Mercantile Exchange (“the CME”).~~regulated commodity exchanges.

The Company competes in the sale of grain with other public and private grain brokers, elevator operators and farmer owned cooperative elevators. Some of the Company's competitors are also its customers. Competition is based primarily on price, service and reliability. Because the Company generally buys in smaller lots, its competition for the purchase of grain is generally local or regional in scope, although there are some large national and international companies that maintain regional grain purchase and storage facilities. Significant portions of grain bushels purchased and sold are made using forward contracts.

The grain handling business is seasonal in nature in that the largest portion of the principal grains are harvested and delivered from the farm and commercial elevators in July, October and November although a significant portion of the principal grains are bought, sold and handled throughout the year.

Fixed price purchase and sale commitments as well as grain held in inventory expose the Company to risks related to adverse changes in market prices. Grain prices are typically comprised of two components, futures prices on ~~the CME~~regulated commodity exchanges and local basis adjustments. The Company manages the futures price risk by entering into exchange-traded futures and option contracts with ~~the CME.~~regulated commodity exchanges. The contracts are economic hedges of price risk but are not

designated or accounted for as hedging instruments.

~~The CME is a~~ These regulated commodity ~~futures exchange that maintains~~exchanges maintain futures markets for the grains merchandised by the Company. Futures prices are determined by worldwide supply and demand.

The Company's grain risk management practices are designed to reduce the risk of changing commodity prices. In that regard, such practices also limit potential gains from further changes in market prices. The Company has policies that provide key controls over its risk management practices. These policies include a description of the objectives of the programs and review of daily position limits by key management outside of the trading function along with other internal controls. The Company monitors current market conditions and may expand or reduce the purchasing program in response to changes in those conditions. In addition, the Company monitors its counterparties on a regular basis for credit worthiness, defaults and non-delivery.

Purchases of grain can be made the day the grain is delivered to a terminal or via a forward contract made prior to actual delivery. Sales of grain generally are made by contract for delivery in a future period. When the Company purchases grain at a fixed price or at a price where a component of the purchase price is fixed via reference to a futures price on ~~the CME,~~a regulated commodity exchange, it also enters into an offsetting sale of a futures contract on the ~~CME.~~regulated commodity exchange. Similarly, when the Company sells grain at a fixed price, the sale is offset with the purchase of a futures contract on the ~~CME.~~regulated commodity exchange. At the close of business each day, inventory and open purchase and sale contracts as well as open futures and option positions are marked-to-market. Gains and losses in the value of the Company's ownership positions due to changing market prices are netted with, and generally offset in the statement of operations by, losses and gains in the value of the Company's futures positions.

When a futures contract is entered into, an initial margin deposit must be sent to the ~~CME.~~regulated commodity exchange. The amount of the margin deposit is set by the ~~CME~~regulated commodity exchange and varies by commodity. If the market price of a futures contract moves in a direction that is adverse to the Company's position, an additional margin deposit, called a maintenance margin, is required by ~~the CME.~~regulated commodity exchanges. Subsequent price changes could require additional maintenance margin deposits or result in the return of maintenance margin deposits by the ~~CME.~~regulated commodity exchange. Significant increases in market prices, such as those that occur when grain supplies are affected by unfavorable weather conditions and/or when increases in demand occur, can have an effect on the Company's liquidity and, as a result, require it to maintain appropriate short-term lines of credit. The Company may utilize ~~CME~~regulated commodity exchange option contracts to limit its exposure to potential required margin deposits in the event of a rapidly rising market.

~~The~~As of December 31, 2018, the Company ~~owns~~owned 33% of the equity in Lansing Trade Group LLC (“LTG”). LTG is largely focused on the movement of physical commodities, including grain and ethanol, and is exposed to some of the same risks as the Company's grain and ethanol businesses. LTG also trades in commodities that the Company's grain and ethanol businesses do not trade in, some of which are not exchange traded. This investment provides the Company with further opportunity to diversify and complement its income through activity outside of its traditional product and geographic regions. This investment is accounted for under the equity method. The Company, along with LTG, also established joint ventures and purchased a grain and food-bean handler and agronomy input provider with 12 locations across Ontario, Canada and Minnesota. These investments are accounted for under the equity method. The Company periodically enters into transactions with these joint ventures as disclosed in Note 1213 to the Consolidated Financial Statements in Item 8. In the fourth quarter of 2018, the company announced it entered into an agreement to purchase the remaining equity (not currently owned by the Company) of LTG. The transaction closing was effective January 1, 2019 and will result in the consolidation of LTG and Thompsons and related entities, as they are currently jointly owned by the Company and LTG, in 2019.

Ethanol Group

The Ethanol Group owns 100% of an ethanol plant that is located in Iowa which has nameplate capacity of 55 million gallons. The Group also has ownership interests in ~~four~~three limited liability companies (“the ethanol LLCs” or “LLCs”)~~. Each~~, each of ~~the LLCs~~which owns an ethanol plant that is operated by the Company's Ethanol Group. The plants are located in ~~Iowa,~~ Indiana, Michigan, and Ohio and have combined nameplate capacity of ~~385~~330 million gallons of ethanol. The Group purchases and sells ethanol, offers facility operations, risk management, and ethanol and corn oil marketing services to the ethanol plants it invests in and operates.

~~The Company holds an 85% interest in The Andersons Denison Ethanol LLC ("TADE"), which is a consolidated entity.~~

The Company holds a 55% interest in The Andersons Albion Ethanol LLC (“TAAE”) and a 39% interest in The Andersons Clymers Ethanol LLC (“TACE”). On January 1, 2017, The Andersons Ethanol Investment LLC (“TAEI”) was merged with and into The Andersons Marathon Ethanol LLC (“TAME”). The Company had owned ~~(66)%~~66% of TAEI, which, in turn, had owned 50% of TAME. Pursuant to the merger, the Company’s ownership units in TAEI were canceled and converted into ownership units in TAME. As a result, the Company now directly owns 33% of the outstanding ownership units of TAME. All operating ethanol LLC investments ~~except TADE,~~ are accounted for using the equity method of accounting.

The Company has a management agreement with each of the LLCs. As part of these agreements, the Ethanol Group runs the day-to-day operations of the plants and provides all administrative functions. The Company is compensated for these services based on a fixed cost plus an indexed annual increase determined by a consumer price index. Additionally, the Company has entered into agreements with each of the ~~unconsolidated~~ LLCs under which it has the exclusive right to act as supplier for

100% of the corn used by the LLCs in the production of ethanol. For this service, the Company receives a fee for each bushel of corn sold. The Company has entered into marketing agreements with each of the ethanol LLCs. Under the ethanol marketing agreements, the Company purchases most, if not all, of the ethanol produced by the LLCs at the same price it will resell the ethanol to external customers. The Ethanol Group receives a fee for each gallon of ethanol sold to external customers sourced from these LLCs. Under the distillers dried grains ("DDG") and corn oil marketing agreements, the Company markets the DDG and corn oil and receives a fee on units sold.

The Company also owns 51% of ELEMENT, LLC ("ELEMENT") and ICM, Inc. owns the remaining 49% interest. ELEMENT is constructing a 70 million-gallon-per-year bio-refinery. ICM, Inc. will operate the facility under a management contract and manage the initial construction of the facility, while the Company will provide corn origination, ethanol marketing, and risk management services. The plant is expected to be operational in 2019.

Plant Nutrient Group

The Plant Nutrient Group is a leading manufacturer, distributor and retailer of agricultural and related plant nutrients, corncob-based products, and pelleted lime and gypsum products in the U.S. Corn Belt and Puerto Rico. The Group provides warehousing, packaging and manufacturing services to basic nutrient producers and other distributors. The Group also manufactures and distributes a variety of industrial products throughout the U.S. and Puerto Rico including nitrogen reagents for air pollution control systems used in coal-fired power plants, and water treatment and dust abatement products.

In its plant nutrient businesses, the Company competes with regional and local cooperatives, wholesalers and retailers, predominantly publicly owned manufacturers and ~~privately owned~~privately-owned retailers, wholesalers and importers. Some of these competitors are also suppliers and have considerably larger resources than the Company. Competition in the nutrient business is based largely on depth of product offering, price, location and service. Sales and warehouse shipments of agricultural nutrients are heaviest in the spring and fall.

Wholesale Nutrients- The Wholesale Nutrients business manufactures, stores, and distributes dry and liquid agricultural nutrients, and pelleted lime and gypsum products annually. The major nutrient products sold by the business principally contain nitrogen, phosphate, potassium and sulfur. Product lines include ~~base~~primary nutrients which are typically bought and sold as commodities and ~~value added~~specialty products which support more sustainable farming practices and command higher margins. The distribution and sales channels for both types of nutrients are shared within the Wholesale Nutrients business.

Farm Centers - The Farm Centers offer a variety of essential crop nutrients, crop protection chemicals and seed products in addition to application and agronomic services to commercial and family farmers. Soil and tissue sampling along with global satellite assisted services provide for pinpointing crop or soil deficiencies and prescriptive agronomic advice is provided to farmers.

Cob Products - Corncob-based products are manufactured for a variety of uses including laboratory animal bedding and private-label cat litter, as well as absorbents, blast cleaners, carriers and polishers. The products are distributed throughout the United States and Canada and into Europe and Asia. The principal sources for corncobs are seed corn producers.

~~Turf~~Lawn Products - Proprietary professional ~~turf~~lawn care products are produced for the golf course and professional turf care markets, serving both U.S. and international customers. These products are sold both directly and through distributors to golf courses and lawn service applicators. The Company also produces and sells fertilizer and control products to various markets.

Rail Group

The Company's Rail Group leases, repairs, and sells various types of railcars, locomotives and barges. In addition, the Rail Group offers fleet management services to private railcar owners.

The Company has a diversified fleet of car types (boxcars, gondolas, covered and open top hopper cars, tank cars and pressure differential cars), locomotives and barges serving a broad customer base. The Company operates in both the new and used car markets, allowing the Company to diversify its fleet both in terms of car types, industries and age of cars, as well as repairing and refurbishing used cars for specific markets and customers.

A significant portion of the railcars, locomotives and barges managed by the Company are included on the balance sheet as long-lived assets. The others are either in off-balance sheet operating leases (with the Company leasing assets from financial intermediaries and leasing those same assets to the end-users) or non-recourse arrangements (in which the Company is not subject to any lease arrangement related to the assets but provides management services to the owner of the assets). The Company generally holds purchase options on most assets owned by financial intermediaries. We are under contract to provide maintenance services for many of the Rail Group assets that we own or manage. Refer to the Off-Balance Sheet Transactions section of Management's Discussion and Analysis for a breakdown of our railcar, locomotive and barge positions at December 31, ~~2017.~~2018.

In the case of the Company's off-balance sheet Rail Group assets, the Company's risk management philosophy is to match-fund the lease commitments where possible. Match-funding (in relation to lease transactions) means matching the terms of the financial intermediary funding arrangement with the lease terms of the customer in which the Company is both lessee and sublessor. If the Company is unable to match-fund, it will attempt to negotiate an early buyout provision within the funding arrangement to match the underlying customer lease. The Company does not attempt to match-fund lease commitments for Rail Group assets that are on its balance sheet.

Competition for marketing and fleet maintenance services is based primarily on price, service ability, and access to both used equipment and third-party financing. Repair facility competition is based primarily on price, quality and location.

~~Retail Group~~Other

Our “Other” activities include corporate income and expense and cost for functions that provide support and services to the operating segments. The ~~Company's Retail Group~~results include expenses and benefits not allocated to the operating segments, including a portion of our ERP project. The results of our former retail business, which was closed in 2017, are also included ~~large retail stores operated as “The Andersons,” which were located~~ in the Columbus and Toledo, Ohio markets. The stores focused on providing significant product breadth with offerings in home improvement and other mass merchandise categories as well as specialty foods, wine and indoor and outdoor garden centers."Other" activities.

In January 2017, the Company announced its decision to close all retail operations. As of December 31, 2017, the Retail Group has closed all stores, completed its liquidation efforts, and sold three of the four properties.

Employees

The Andersons offers a broad range of full-time and part-time career opportunities. Each position in the Company is important to its success, and the Company recognizes the worth and dignity of every individual. The Company strives to treat each person with respect and utilize his or her unique talents. At December 31, ~~2017,~~2018, the Company had ~~1,795~~1,802 full-time and 4856 part-time or seasonal employees.

Government Regulation

Grain sold by the Company must conform to official grade standards imposed under a federal system of grain grading and inspection administered by the United States Department of Agriculture (“USDA”).

The production levels, markets and prices of the grains that the Company merchandises are affected by United States government programs, which include acreage control and price support programs of the USDA. In ~~regards~~regard to our investments in ethanol production facilities, the U.S. government has mandated a ten percent blend for motor fuel gasoline sold.

The U.S. Food and Drug Administration (“FDA”) has developed bioterrorism prevention regulations for food facilities, which require that the Company registers its grain operations with the FDA, provide prior notice of any imports of food or other agricultural commodities coming into the United States and maintain records to be made available upon request that identifies the immediate previous sources and immediate subsequent recipients of its grain commodities.

The Company, like other companies engaged in similar businesses, is subject to a multitude of federal, state and local environmental protection laws and regulations including, but not limited to, laws and regulations relating to air quality, water quality, pesticides and hazardous materials. The provisions of these various regulations could require modifications of certain of the Company's existing facilities and could restrict the expansion of future facilities or significantly increase the cost of their operations. Compliance with environmental laws and regulations did not materially affect the Company's earnings or competitive position in ~~2017.~~2018.

In addition, the Company continues to assess the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and has concluded that the Company is not a major swap dealer or major swap participant. The Company continues to monitor developments in the law, including the regulation of swaps and derivatives.

Available Information

The Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available on the Company's website soon after filing with the Securities and Exchange Commission. The Company's website address is http://www.andersonsinc.com. The public may read and copy any materials the Company files with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. These reports are also available at the SEC's website: http://www.sec.gov.

Item 1A. Risk Factors

Our operations are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in this Form 10-K and could have a material adverse impact on our financial results. These risks can be impacted by factors beyond our control as well as by errors and omissions on our part. The following risk factors should be read carefully in connection with evaluating our business and the forward-looking statements contained elsewhere in this Form 10-K.

Certain of our business segments are affected by the supply and demand of commodities and are sensitive to factors outside of our control. Adverse price movements could negatively affect our profitability and results of operations.

Our Grain, Ethanol and Plant Nutrient businesses buy, sell and hold inventories of agricultural input and output commodities, some of which are readily traded on commodity futures exchanges. Unfavorable weather conditions, both local and worldwide, as well as other factors beyond our control, can affect the supply and demand of these commodities and expose us to liquidity pressures to finance hedges in the grain business in rapidly rising markets. In our Plant Nutrient business, changes in the supply and demand of these commodities can also affect the value of inventories that we hold, as well as the price of raw materials as we are unable to effectively hedge these commodities. Increased costs of inventory and prices of raw material would decrease our profit margins and adversely affect our results of operations.

Corn - The principal raw material that the ethanol LLCs use to produce ethanol and ~~coproducts~~co-products is corn. As a result, an increase in the price of corn in the absence of a corresponding increase in ~~petroleum based~~petroleum-based fuel prices will typically decrease ethanol margins thus adversely affecting financial results in the ethanol LLCs. At certain levels, corn prices may make ethanol uneconomical to produce for fuel markets. The price of corn is influenced by weather conditions and other factors affecting crop yields, shift in acreage allocated to corn versus other major crops and general economic and regulatory factors. These factors include government policies and subsidies with respect to agriculture and international trade, and global and local demand and supply. The significance and relative effect of these factors on the price of corn is difficult to predict. Any event that tends to negatively affect the supply of corn, such as adverse weather or crop disease, could increase corn prices and potentially harm the income generated from our investments in ethanol LLCs. In addition, we may also have difficulty, from time to time, in physically sourcing corn on economical terms due to supply shortages. High costs or shortages could require us to suspend ethanol operations until corn is available on economical terms, which would have an adverse effect on operating results.

Grains - While we attempt to manage the risk associated with commodity price changes for our grain inventory positions with derivative instruments, including purchase and sale contracts, we are unable to offset 100% of the price risk of each transaction due to timing, availability of futures and options contracts and third-party credit risk. Furthermore, there is a risk that the derivatives we employ will not be effective in offsetting all of the risks that we are trying to manage. This can happen when the derivative and the underlying value of grain inventories and purchase and sale contracts are not perfectly matched. Our grain derivatives, for example, do not perfectly correlate with the basis component of our grain inventory and contracts. (Basis is defined as the difference between the local cash price of a commodity and the corresponding exchange-traded futures price.) Differences can reflect time periods, locations or product forms. Although the basis component is smaller and generally less volatile than the futures component of our grain market price, basis moves on a large grain position can significantly impact the profitability of the Grain business.

Our futures, options and over-the-counter contracts are subject to margin calls. If there are large movements in the commodities market, we could be required to post significant levels of margin deposits, which would impact our liquidity. There is no assurance that the efforts we have taken to mitigate the impact of the volatility of the prices of commodities upon which we rely will be successful and any sudden change in the price of these commodities could have an adverse effect on our business and results of operations.

Natural gas - We rely on third parties for our supply of natural gas, which is consumed in the drying of wet grain, manufacturing of certain ~~turf~~lawn products, pelleted lime and gypsum, and manufacturing of ethanol within the LLCs. The prices

for and availability of natural gas are subject to market conditions. These market conditions often are affected by factors beyond our control such as higher prices resulting from colder than average weather and overall economic conditions. Significant disruptions in the supply of natural gas could impair the operations of the ethanol facilities. Furthermore, increases in natural gas prices or changes in our natural gas costs relative to natural gas costs paid by competitors may adversely affect future results of operations and financial position.

Gasoline and oil - We market ethanol as a fuel additive to reduce vehicle emissions from gasoline, as an octane enhancer to improve the octane rating of gasoline with which it is blended and as a substitute for ~~petroleum based~~petroleum-based gasoline. As a result,

ethanol prices will be influenced by the supply and demand for gasoline and oil and our future results of operations and financial position may be adversely affected if gasoline and oil demand or price changes.

Potash, phosphate and nitrogen - Raw materials used by the Plant Nutrient business include potash, phosphate and nitrogen, for which prices can be volatile and are driven by global and local supply and demand factors. Significant increases in the price of these commoditiesmay result in lower customer demand and higher than optimal inventory levels. In contrast, reductions in the price of these commodities may create ~~lower-of-cost-or-market~~lower of cost or net realizable value adjustments to inventories.

Some of our business segments operate in highly regulated industries. Changes in government regulations or trade association policies could adversely affect our results of operations.

Many of our business segments are subject to government regulation and regulation by certain private sector associations, compliance with which can impose significant costs on our business. Other regulations are applicable generally to all our businesses and corporate functions, including, without limitation, those promulgated under the Internal Revenue Code, the Affordable Care Act, the Employee Retirement Income Security Act (ERISA) and other employment and health care related laws, federal and state securities laws, and the US Patriot Act. Failure to comply with such regulations can result in additional costs, fines or criminal action.

A significant part of our operations is regulated by environmental laws and regulations, including those governing the labeling, use, storage, discharge and disposal of hazardous materials. Because we use and handle hazardous substances in our businesses, changes in environmental requirements or an unanticipated significant adverse environmental event could have an adverse effect on our business. We cannot assure that we have been, or will at all times be, in compliance with all environmental requirements, or that we will not incur costs or liabilities in connection with these requirements. Private parties, including current and former employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us, or contained in our products. We are also exposed to residual risk because some of the facilities and land which we have acquired may have environmental liabilities arising from their prior use. In addition, changes to environmental regulations may require us to modify our existing plant and processing facilities and could significantly increase the cost of those operations.

Grain and Ethanol businesses - In our Grain and Ethanol businesses, agricultural production and trade flows can be affected by government programs and legislation. Production levels, markets and prices of the grains we merchandise can be affected by U.S. government programs, which include acreage controls and price support programs administered by the USDA and required levels of ethanol in gasoline through the Renewable Fuel Standards as administered by the EPA. Other examples of government policies that can have an impact on our business include tariffs, duties, subsidies, import and export restrictions and outright embargoes. Because a portion of our grain sales are to exporters, the imposition of export restrictions and other foreign countries' regulations could limit our sales opportunities and create additional credit risk associated with export brokers if shipments are rejected at their destination. In particular, the imposition of new tariffs or uncertainty around future tariff levels can cause significant fluctuations in the futures and basis levels of agricultural commodities, impacting our earnings.

The compliance burden and impact on our operations and profitability as a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations have imposed additional regulatory tasks which took effect in 2014, although the full burden of the Act is not yet fully-known as some areas of regulatory rule making are not yet completed. These efforts to change the regulation of financial markets may subject users of derivatives to extensive oversight and regulation by the Commodity Futures Trading ~~Commission (CFTC).~~Commission. Such initiatives could impose significant additional costs on us, including operating and compliance costs, and could materially affect the availability, as well as the cost and terms, of certain transactions. We will continue to monitor these developments. Any of these matters could have an adverse effect on our business, financial condition, liquidity, results of operations and prospects.

Rail - Our Rail business is subject to regulation by the American Association of Railroads and the Federal Railroad Administration. These agencies regulate rail operations with respect to health and safety matters. New regulatory rulings could negatively impact financial results through higher maintenance costs or reduced economic value of railcar assets.

The Rail business is also subject to risks associated with the demands and restrictions of the Class I railroads, a group of rail companies owning a high percentage of the existing rail lines. These companies exercise a high degree of control over whether private railcars can be allowed on their lines and may reject certain railcars or require maintenance or improvements to the railcars. This presents risk and uncertainty for our Rail business and it can increase maintenance costs. In addition, a shift in the railroads' strategy to investing in new rail cars and improvements to existing railcars, instead of investing in locomotives and infrastructure, could adversely impact our business by causing increased competition and creating an oversupply of railcars. Our rail fleet consists of a range of railcar types (boxcars, gondolas, covered and open top hoppers, tank cars and pressure differential cars) and locomotives. However, a large concentration of a particular type of railcar could expose us to risk if

demand were to decrease for that railcar type. Failure on our part to identify and assess risks and uncertainties such as these could negatively impact our business.

~~Similarly, our marine assets~~Demand for rail cars closely follows general economic activity and ~~operations are subject to rules and regulations relating to safety, citizenship, emissions, ballast discharges, and other environmental and operational matters enforced~~may be adversely affected by various federal and state agencies, including the Maritime Administration of the U.S. Department of Transportation, the U.S. Coast Guard, and the U.S. Environmental Protection Agency (“EPA”). If we fail to comply with these rules and regulations, we could be prohibited from operatingrecession or ~~leasing marine assets in the U.S. market, and under certain circumstances, could incur severe fines and penalties, including potential limitations on operations or forfeitures of assets.~~general economic slowdowns.

Plant Nutrient - Our Plant Nutrient business manufactures certain agricultural nutrients and uses potentially hazardous materials. All products containing pesticides, fungicides and herbicides must be registered with the EPA and state regulatory bodies before they can be sold. The inability to obtain or the cancellation of such registrations could have an adverse impact on our business. In the past, regulations governing the use and registration of these materials have required us to adjust the raw material content of our products and make formulation changes. Future regulatory changes may have similar consequences. Regulatory agencies, such as the EPA, may at any time reassess the safety of our products based on new scientific knowledge or other factors. If it were determined that any of our products were no longer considered to be safe, it could result in the amendment or withdrawal of existing approvals, which, in turn, could result in a loss of revenue, cause our inventory to become obsolete or give rise to potential lawsuits against us. Consequently, changes in existing and future government or trade association polices may restrict our ability to do business and cause our financial results to suffer.

We are required to carry significant amounts of inventory across all of our businesses. If a substantial portion of our inventory becomes damaged or obsolete, its value would decrease, and our profit margins would suffer.

We are exposed to the risk of a decrease in the value of our inventories due to a variety of circumstances in all of our businesses. For example, within our Grain and Ethanol businesses, there is the risk that the quality of our grain inventory could deteriorate due to damage, moisture, insects, disease or foreign material. If the quality of our grain were to deteriorate below an acceptable level, the value of our inventory could decrease significantly. In our Plant Nutrient business, planted acreage, and consequently the volume of fertilizer and crop protection products applied, is partially dependent upon government programs and the producer's perception of demand. Technological advances in agriculture, such as genetically engineered seeds that resist disease and insects, or that meet certain nutritional requirements, could also affect the demand for our crop nutrients and crop protection products. Either of these factors could render some of our inventory obsolete or reduce its value. Within our rail repair business, major design improvements to loading, unloading and transporting of certain products can render existing (especially old) equipment obsolete.

Our substantial indebtedness could negatively affect our financial condition, decrease our liquidity and impair our ability to operate the business.

If cash on hand is insufficient to pay our obligations or margin calls as they come due at a time when we are unable to draw on our credit facility, it could have an adverse ~~affect~~effect on our ability to conduct our business. Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future. Our ability to generate cash is dependent on various factors. These factors include general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Certain of our long-term borrowings include provisions that require minimum levels of working capital and equity and impose limitations on additional debt. Our ability to satisfy these provisions can be affected by events beyond our control, such as the demand for and the fluctuating price of grain. Although we are and have been in compliance with these provisions, noncompliance could result in default and acceleration of long-term debt payments.

We face increasing competition and pricing pressure from other companies in our industries. If we are unable to compete effectively with these companies, our sales and profit margins would decrease, and our earnings and cash flows would be adversely affected.

The markets for our products in each of our business segments are highly competitive. While we have substantial operations in our region, some of our competitors are significantly larger, compete in wider markets, have greater purchasing power, and have considerably larger financial resources. We also may enter into new markets where our brand is not recognized and in

which we do not have an established customer base. Competitive pressures in all of our businesses could affect the price of, and customer demand for, our products, thereby negatively impacting our profit margins and resulting in a loss of market share.

Our ~~grain~~Grain and ~~ethanol~~Ethanol businesses use derivative contracts to reduce volatility in the commodity markets. Non-performance by the counter-parties to those contracts could adversely affect our future results of operations and financial position.

A significant amount of our grain and ethanol purchases and sales are made through forward contracting. In addition, the Company uses exchange traded and, to a lesser degree, over-the-counter contracts to reduce volatility in changing commodity prices. A significant adverse change in commodity prices could cause a counter-party to one or more of our derivative contracts to not perform on its obligation.

A significant portion of the Company's assets are geographically concentrated in the Eastern Corn Belt. Localized weather and other market factors may have a disproportionate impact on our business compared to our competitors.

A significant portion of Company's the assets are exposed to conditions in the Eastern Corn Belt. In this region, adverse weather during the fertilizer application, planting, and harvest seasons can have negative impacts on our Grain, Ethanol and Plant Nutrient businesses. Higher basis levels or adverse crop conditions in the Eastern Corn Belt can increase the input costs or lower the market value of our ~~Ethanol facilities~~products relative to other market participants that do not have the same geographic concentration.

We rely on a limited number of suppliers for certain of our raw materials and other products and the loss of one or several of these suppliers could increase our costs and have a material adverse effect on any one of our business segments.

We rely on a limited number of suppliers for certain of our raw materials and other products. If we were unable to obtain these raw materials and products from our current vendors, or if there were significant increases in our supplier's prices, it could significantly increase our costs and reduce our profit margins.

Our investments in unconsolidated entities accounted for under the equity method are subject to risks beyond our control.

We currently have investments in ~~numerous~~several limited liability companies and joint ventures. By operating a business through this arrangement, we do not have control over certain operating decisions as we would if we owned the business outright. Specifically, we cannot act on major business initiatives without the consent of the other investors, who may not always be in agreement with our ideas.

The Company may not be able to effectively integrate future businesses it acquires.

We continuously look for opportunities to enhance our existing businesses through strategic acquisitions. The process of integrating an acquired business into our existing business and operations may result in unforeseen operating difficulties and expenditures as well as require a significant amount of management resources. There is also the risk that our due diligence efforts may not uncover significant business flaws or hidden liabilities. In addition, we may not realize the anticipated benefits of an acquisition and they may not generate the anticipated financial results. Additional risks may include the inability to effectively integrate the operations, products, technologies and personnel of the acquired companies. The inability to maintain uniform standards, controls, procedures and policies would also negatively impact operations.

Our business involves considerable safety risks. Significant unexpected costs and liabilities would have an adverse effect on our profitability and overall financial position.

Due to the nature of some of the businesses in which we operate, we are exposed to significant operational hazards such as grain dust explosions, fires, malfunction of equipment, abnormal pressures, blowouts, pipeline and tank ruptures, chemical spills or run-off, transportation accidents and natural disasters. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property and equipment or environmental damage and may result in suspension of operations and the imposition of civil or criminal penalties. If grain dust were to explode at one of our elevators, if an ethanol plant were to explode or catch fire, or if one of our pieces of equipment were to fail or malfunction due to an accident or improper maintenance, it could put our employees and others at serious risk.

The Company's information technology systems may impose limitations or failures, or may face external threats, which may affect the Company's ability to conduct its business.

The Company's information technology systems, some of which are dependent on services provided by third parties, provide critical data connectivity, information and services for internal and external users. These interactions include, but are not limited to, ordering and managing materials from suppliers, converting raw materials to finished products, inventory management, shipping products to customers, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements, human resources and other processes necessary to manage the

business. The Company has put in place business continuity plans for its critical systems. However, if the Company's information technology systems are damaged, or cease to function properly due to any number of causes, such as catastrophic events or power outages, and the Company's business continuity plans do not allow it to effectively recover on a timely basis, the Company may suffer interruptions in the ability to manage its operations, which may adversely impact the Company's operating results. Our security measures may also be breached due to employee error, malfeasance, or otherwise. In addition, although the systems ~~have been~~continue to be refreshed periodically, portions of the infrastructure are outdated and may not be adequate to support new business processes, accounting for new transactions, or implementation of new accounting standards if requirements are complex or materially different than what is currently in place.

Additionally, outside parties may attempt to destroy critical information, or fraudulently induce employees, third-party service providers, or users to disclose sensitive information ~~in order~~ to gain access to our data or our users' data. As a response, the Company requires user names and passwords ~~in order~~ to access its information technology systems. The Company also uses encryption and authentication technologies designed to secure the transmission and storage of data and prevent access to Company and user data or accounts. The Company also conducts annual tests and assessments using independent third parties. As with all companies, these security measures are subject to third-party security breaches, employee error, malfeasance, faulty password management, or other irregularities. We cannot assure our ability to prevent, repel or mitigate the effects of such an attack by outside parties. The Company also relies on third parties to maintain and process certain information which could be subject to breach or unauthorized access to Company or employee information. Any such breach or unauthorized access could result in an inability to perform critical functions, significant legal and financial exposure, damage to our reputation, and a loss of confidence in the security of our services that could potentially have an adverse ~~affect~~effect on our business.

The Company's design and implementation of ~~a new~~the Company's Enterprise Resource Planning system could face significant difficulties.

~~In early 2012,~~The Company is designing and implementing the ~~Company began the design and implementation of a new~~Company's Enterprise Resource Planning ("ERP") ~~system,~~systems, requiring significant capital and human resources to deploy. ~~The first wave~~There is risk of ~~implementation was~~such implementations being more expensive and ~~took~~taking longer to fully implement than originally planned, ~~including~~resulting in increased capital investment, higher fees and expenses of third parties, delayed deployment scheduling, and more on-going maintenance expense once ~~implemented. Future releases would be subject to similar risks~~implemented, and, as such, the ultimate costs and schedules are not yet known. If for any reason portions of the implementation are not successful, the Company could be required to expense rather than capitalize related amounts. Beyond cost and scheduling, potential flaws in the implementation of an ERP system may pose risks to the Company's ability to operate successfully and efficiently. These risks include, without limitation, inefficient use of employees, distractions to the Company's core businesses, adverse customer reactions, loss of key information, delays in decision making, as well as unforeseen additional costs due to the inability to integrate vital information processes.

Unauthorized disclosure of sensitive or confidential customer information could harm the Company's business and standing with our customers.

The protection of our customer, employee and Company data is critical to us. The Company relies on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as payment card and personal information. The Company also conducts annual tests and assessments using independent third parties. Despite the security measures the Company has in place, its facilities and systems, and those of its third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, or other similar events. Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential information, whether by the Company or its vendors, could damage our reputation, expose us to risk of litigation and liability, disrupt our operations and harm our business.

A change in tax laws or regulations of any federal, state or international jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity.

We continue to assess the impact of various U.S. federal, state, local and international legislative proposals that could result in a material increase to our U.S. federal, state, local and/or international taxes. We cannot predict whether any specific legislation will be enacted or the terms of any such legislation. However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing our cost of tax compliance or otherwise adversely affecting our financial position, results of operations, cash flows and liquidity. ~~Moreover,~~Changes in applicable U.S. or foreign tax laws and regulations, or their interpretation and application, including the ~~full impact on the company, its suppliers or customers~~possibility of retroactive effect, could affect our tax expense and profitability as they did in 2017 upon passage of the ~~recently enacted~~ Tax Cuts and Jobs ~~Act of 2017 is not yet fully known.~~Act. Such impact may also be affected positively or negatively by subsequent potential judicial interpretation or related regulation or legislation which cannot be predicted with certainty.

Item 1B. Unresolved Staff Comments

The Company has no unresolved staff comments.

Item 2. Properties

The Company's principal agriculture, rail, and other properties are described below.

Agriculture Facilities



		Agricultural Fertilizer			Agricultural Fertilizer
(in thousands)	Grain Storage	Dry Storage	Liquid Storage	Grain Storage	Dry Storage	Liquid Storage
Location	(bushels)	(tons)	(tons)	(bushels)	(tons)	(tons)
Canada	562	—	—	680	—	—
Illinois	11,359	55	11	12,464	56	11
Indiana	26,094	142	141	27,095	145	143
Iowa	2,600	—	69	2,600	—	70
Michigan	30,411	70	48	30,236	53	27
Minnesota	—	—	47	—	18	67
Nebraska	13,222	—	45	13,219	—	45
Ohio	40,203	189	64	37,710	189	65
Puerto Rico	—	—	10	—	—	10
Tennessee	14,570	—	—	3,567	—	—
Texas	1,386	—	—	1,043	—	—
Wisconsin	—	24	77	—	27	77
	140,407	480	512	128,614	488	515

Item 8. Financial Statements and Supplementary Data

The Andersons, Inc.

Index to Financial Statements



Report of Independent Registered Public Accounting Firms - Deloitte & Touche LLP / KPMG LLP / PricewaterhouseCoopers LLP - Canada / Crowe ~~Chizek~~ LLP	3735
Consolidated Balance Sheets	4140
Consolidated Statements of Operations	4342
Consolidated Statements of Comprehensive Income	4443
Consolidated Statements of Cash Flows	4544
Consolidated Statements of Equity	4645
Notes to Consolidated Financial Statements	4746
Schedule II - Consolidated Valuation and Qualifying Accounts	9698

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

The Andersons, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Andersons, Inc. and subsidiaries (the "Company") as of December 31, ~~2017~~2018 and ~~2016,~~2017, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, ~~2017,~~2018, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, based on our audits and the reports of the other auditors, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2018 and ~~2016,~~2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2017,~~2018, in conformity with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of Lansing Trade Group, LLC or Lux JV Treasury Holding Company S.à.r.l as of and for the years ended December 31, ~~2017, 2016, and 2015, or Lux JV Treasury Holding Company S.à r.l. as of and for the years ended December 31,~~2018, 2017, and 2016, the Company’s investments in which are accounted for by use of the equity method. The accompanying financial statements of the Company include its equity investment in Lansing Trade Group, LLC of ~~$93~~$102 million and ~~$89~~$93 million and Lux JV Treasury Holding Company S.à ~~r.l.~~r.l of ~~$47~~$45 million and ~~$46~~$47 million as of December 31, ~~2017~~2018 and ~~2016,~~2017, respectively, and its equity in earnings (losses) in Lansing Trade Group, LLC of $4$10.4 million, $4.0 million, and ($9.9) million ~~and $12 million for the years ended December 31, 2017, 2016, and 2015, respectively,~~ and Lux JV Treasury Holding Company S.à ~~r.l.~~.r.l of ~~$.5~~$2.2 million, $0.5 million, and $1.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Lansing Trade Group, LLC and Lux JV Treasury Holding Company S.à ~~r.l.,~~r.l, is based solely on the reports of the other auditors.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, ~~2017,~~2018, based on ~~the~~ criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February ~~26, 2018,~~27, 2019, expressed an unqualified opinion on the Company's internal control over financial ~~reporting based on our audit.~~reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for revenue from contracts with customers in 2018 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

February ~~26, 2018~~27, 2019

We have served as the Company's auditor since 2015.

Report of Independent Registered Public Accounting Firm

The Members and Board of Managers

Lansing Trade Group, LLC:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Lansing Trade Group, LLC and subsidiaries (the Company) as of December 31, 2018, the related consolidated statements of comprehensive income, equity, and cash flows for the year ended December 31, 2018, and the related notes (collectively, the consolidated financial statements). In our opinion, based on our audit and the report of the other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We did not audit the consolidated financial statements of Lux JV Treasury Holding Company S.a.r.l (Lux JV) (a 50 percent owned investee company). The Company’s investment in Lux JV at December 31, 2018 was $44.7 million and its equity in earnings of Lux JV was $1.6 million for the year ended December 31, 2018. The consolidated financial statements of Lux JV were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Lux JV, is based solely on the report of the other auditors.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit and the report of the other auditors provides a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2017.

Kansas City, Missouri

February 27, 2019

Report of Independent Registered Public Accounting Firm

To the Members and Board of Managers

Lansing Trade Group, LLC:

Opinion on theConsolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Lansing Trade Group, LLC and subsidiaries (the Company) as of December 31, 2017, the related consolidated statements of comprehensive income, equity, and cash flows for the year ended December 31, 2017, and the related notes (collectively, the consolidated financial statements). In our opinion, based on our audit and the report of the other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for year ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We did not audit the consolidated financial statements of Lux JV Treasury Holding Company S.a.r.l. (a 50% percent owned investee company). The Company’s investment in Lux JV Treasury Holding Company S.a.r.l. at December 31, 2017 was $46.7 million and its equity in earnings of Lux JV Treasury Holding Company S.a.r.l. was $0.7 million for the year ended December 31, 2017. The consolidated financial statements of Lux JV Treasury Holding Company S.a.r.l. were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Lux JV Treasury Holding Company S.a.r.l., is based solely on the report of the other auditors.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2017.

Kansas City, Missouri

February 26, 2018

Report of Independent Registered Public Accounting Firm

To the Board of Managers and Shareholders of

Lux JV Treasury Holding Company S.à ~~r.l.~~r.l.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Lux JV Treasury Holding Company

S.à r.l. and its subsidiaries, (together, the Company) as of December 31, ~~2017~~2018 and ~~2016,~~2017, and the related consolidated statements of operations and retained earnings and cash flows for each of the three years in the period ended December 31, ~~2017,~~2018, including the related notes (not included herein) (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2018 and ~~2016,~~2017, and the results of operations and their cash flows for each of the three years in the period ended

December 31, ~~2017~~2018 in conformity with accounting principles generally accepted in the United States of America.

~~Change in Accounting Principle~~

~~As discussed in note 1 to the consolidated financial statements, the Company changed its method of presentation of deferred tax liabilities in 2017.~~

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants

February ~~16, 2018~~21, 2019

London, Canada

We have served as the Company's auditor since 2013.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Managers

Lansing Trade Group, LLC

Overland Park, Kansas

We have audited the accompanying consolidated ~~balance sheet~~statements of comprehensive income, equity and cash flows of Lansing Trade Group, LLC and Subsidiaries (the “Company”) ~~as of December 31, 2016 and~~ the ~~related consolidated statements of comprehensive income, equity and cash flows for each of the years in the two-year period~~year ended December 31, 2016. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audits.~~audit. We did not audit the consolidated financial statements of Lux JV Treasury Holding Company S.à.r.l., an entity in which Lansing Trade Group, LLC has an investment in and accounts for under the equity method of accounting, for which Lansing Trade Group, LLC ~~reflects an investment of $42.9 million as of December 31, 2016, respectively, and~~recorded equity in earnings of affiliates of $2.6 million ~~and $2.9 million~~ for ~~each of~~ the ~~years in the two-year period~~year ended December 31, ~~2016, respectively.~~2016. The financial statements of Lux JV Treasury Holding Company S.à.r.l. were audited by other auditors whose report thereon has been furnished to us, and our opinion on the financial statements expressed herein, insofar as it relates to the amounts included for Lux JV Treasury Holding Company S.à.r.l., is based solely on the report of the other auditors.

We conducted our ~~audits~~audit in accordance with standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our ~~audits~~audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audits provide~~audit provides a reasonable basis for our opinion.

In our opinion, based on our ~~audits~~audit and the report of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the Company’s consolidated ~~financial position of the Company as of, December 31, 2016, and the~~ results of ~~its~~ operations and ~~its~~ cash flows for ~~each of~~ the ~~years in the two-year period~~year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

/s/ Crowe ~~Chizek~~ LLP

Elkhart, Indiana

February 27, 2017

The Andersons, Inc. Consolidated Balance Sheets (In thousands)	The Andersons, Inc. Consolidated Balance Sheets (In thousands)				The Andersons, Inc. Consolidated Balance Sheets (In thousands)

	December 31, 2017		December 31, 2016		December 31, 2018		December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	34,919	$	62,630	$	22,593	$	34,919
Restricted cash	—		471
Accounts receivable, less allowance for doubtful accounts of $9,156 in 2017; $7,706 in 2016	183,238		194,698
Accounts receivable, less allowance for doubtful accounts of $8,325 in 2018; $9,156 in 2017					207,285		183,238
Inventories (Note 2)	648,703		682,747		690,804		648,703
Commodity derivative assets – current (Note 6)	30,702		45,447		51,421		30,702
Other current assets	63,790		72,133		50,703		63,790
Assets held for sale	37,859		—		392		37,859
Total current assets	999,211		1,058,126		1,023,198		999,211
Other assets:
Commodity derivative assets – noncurrent (Note 6)	310		100		480		310
Goodwill (Note 4)	6,024		63,934		6,024		6,024
Other intangible assets, net (Note 4)	112,893		106,100		99,138		112,893
Equity method investments					242,326		223,239
Other assets	12,557		10,411		22,341		12,557
Equity method investments	223,239		216,931
	355,023		397,476		370,309		355,023
Rail Group assets leased to others, net (Note 3)	423,443		327,195		521,785		423,443
Property, plant and equipment, net (Note 3)	384,677		450,052		476,711		384,677
Total assets	$	2,162,354	$	2,232,849	$	2,392,003	$	2,162,354

The Andersons, Inc. Consolidated Balance Sheets (continued) (In thousands)	The Andersons, Inc. Consolidated Balance Sheets (continued) (In thousands)						The Andersons, Inc. Consolidated Balance Sheets (continued) (In thousands)

	December 31, 2017			December 31, 2016			December 31, 2018			December 31, 2017
Liabilities and equity
Current liabilities:
Short-term debt (Note 5)	$	22,000		$	29,000		$	205,000		$	22,000
Trade and other payables	503,571			581,826			462,535			503,571
Customer prepayments and deferred revenue	59,710			48,590			32,533			59,710
Commodity derivative liabilities – current (Note 6)	29,651			23,167			32,647			29,651
Accrued expenses and other current liabilities	69,579			69,648			79,046			69,579
Current maturities of long-term debt (Note 5)	54,205			47,545			21,589			54,205
Total current liabilities	738,716			799,776			833,350			738,716
Other long-term liabilities	33,129			27,833			32,184			33,129
Commodity derivative liabilities – noncurrent (Note 6)	825			339			889			825
Employee benefit plan obligations (Note 7)	26,716			35,026			22,542			26,716
Long-term debt, less current maturities (Note 5)	418,339			397,065			496,187			418,339
Deferred income taxes (Note 8)	121,730			182,113			130,087			121,730
Total liabilities	1,339,455			1,442,152			1,515,239			1,339,455
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Shareholders’ equity:
Common shares, without par value (63,000 shares authorized; 29,430 shares issued in 2017 and 2016)	96			96
Common shares, without par value (63,000 shares authorized; 29,430 shares issued in 2018 and 2017)							96			96
Preferred shares, without par value (1,000 shares authorized; none issued)	—			—			—			—
Additional paid-in-capital	224,622			222,910			224,396			224,622
Treasury shares, at cost (1,063 in 2017; 1,201 in 2016)	(40,312		)	(45,383		)
Treasury shares, at cost (936 in 2018; 1,063 in 2017)							(35,300		)	(40,312		)
Accumulated other comprehensive loss	(2,700		)	(12,468		)	(6,387		)	(2,700		)
Retained earnings	633,496			609,206			647,517			633,496
Total shareholders’ equity of The Andersons, Inc.	815,202			774,361			830,322			815,202
Noncontrolling interests	7,697			16,336			46,442			7,697
Total equity	822,899			790,697			876,764			822,899
Total liabilities and equity	$	2,162,354		$	2,232,849		$	2,392,003		$	2,162,354

The Andersons, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

Year ended December 31,
2017 2016 2015
Net income (loss) $ 42,609
$ 14,470
$ (11,322 )
Other comprehensive income (loss), net of tax:
Change in fair value of convertible preferred securities (net of income tax of $0, $74 and $0) 344
(126 ) —
Change in unrecognized actuarial gain and prior service cost (net of income tax of $(1,809), $(4,355) and $(24,746)) 6,138
7,447
40,736
Foreign currency translation adjustments (net of income tax of $0, $0 and $82) 3,286
1,039
(7,333 )
Cash flow hedge activity (net of income tax of $0, $(72) and $(154)) —
111
253
Other comprehensive income (loss) 9,768
8,471
33,656
Comprehensive income 52,377
22,941
22,334
Comprehensive income attributable to the noncontrolling interests 98
2,876
1,745
Comprehensive income attributable to The Andersons, Inc. $ 52,279
$ 20,065
$ 20,589



	Year ended December 31,
	2018			2017		2016
Net income (loss)	$	41,225		$	42,609	$	14,470
Other comprehensive income (loss), net of tax:
Change in fair value of convertible preferred securities (net of income tax of $0, $0 and $74)	(86		)	344		(126		)
Change in unrecognized actuarial gain and prior service cost (net of income tax of $(879), $(1,809) and $(4,355))	359			6,138		7,447
Foreign currency translation adjustments	(3,834		)	3,286		1,039
Cash flow hedge activity (net of income tax of $42, $0 and $(72))	(126		)	—		111
Other comprehensive income (loss)	(3,687		)	9,768		8,471
Comprehensive income (loss)	37,538			52,377		22,941
Comprehensive income (loss) attributable to the noncontrolling interests	(259		)	98		2,876
Comprehensive income (loss) attributable to The Andersons, Inc.	$	37,797		$	52,279	$	20,065

The Notes to Consolidated Financial Statements are an integral part of these statements.

~~The Andersons, Inc.~~

~~Consolidated Statements of Cash Flows~~

~~(In thousands)~~


The Andersons, Inc. Consolidated Statements of Cash Flows (In thousands)										The Andersons, Inc. Consolidated Statements of Cash Flows (In thousands)

	Year ended December 31,									Year ended December 31,
	2017			2016			2015			2018			2017			2016
Operating Activities
Net income (loss)	$	42,609		$	14,470		(11,322		)	$	41,225		$	42,609		14,470
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization	86,412			84,325			78,456			90,297			86,412			84,325
Bad debt expense	3,000			1,191			3,302			542			3,000			1,191
Equity in (earnings) losses of affiliates, net of dividends	(10,494		)	14,766			(677		)	(23,167		)	(10,494		)	14,766
Gain on sale of assets	(14,401		)	(667		)	(20,802		)	(5,218		)	(14,401		)	(667		)
Gains on sales of Rail Group assets and related leases	(10,990		)	(11,019		)	(13,281		)	(9,558		)	(10,990		)	(11,019		)
Deferred income taxes	(63,234		)	6,030			27,279			11,018			(63,234		)	6,030
Stock based compensation expense	6,097			6,987			1,899			6,624			6,097			6,987
Pension settlement charge, net of cash contributed	—			—			48,344
Goodwill impairment	59,081			—			56,166			—			59,081			—
Asset impairment charge	10,913			9,107			285
Asset impairment										6,272			10,913			9,107
Other	(55		)	(2,070		)	(1,439		)	(1,451		)	(55		)	(2,070		)
Changes in operating assets and liabilities:
Accounts receivable	9,781			(26,429		)	45,058			(24,788		)	9,781			(26,429		)
Inventories	16,141			28,165			73,350			(44,060		)	16,141			28,165
Commodity derivatives	20,285			(9,990		)	14,098			(16,610		)	20,285			(9,990		)
Accounts payable and accrued expenses										(69,935		)	(74,237		)	(94,688		)
Other assets	(5,623		)	19,407			(26,315		)	3,290			(5,623		)	19,407
Accounts payable and accrued expenses	(74,237		)	(94,688		)	(120,267		)
Net cash provided by (used in) operating activities	75,285			39,585			154,134			(35,519		)	75,285			39,585
Investing Activities
Acquisition of businesses, net of cash acquired	(3,507		)	—			(128,549		)	(2,248		)	(3,507		)	—
Purchases of Rail Group assets	(143,020		)	(85,268		)	(115,032		)	(167,005		)	(143,020		)	(85,268		)
Proceeds from sale of Rail Group assets	36,896			56,689			76,625			79,439			36,896			56,689
Purchases of property, plant and equipment and capitalized software	(34,602		)	(77,740		)	(72,469		)	(142,579		)	(34,602		)	(77,740		)
Proceeds from sale of assets	33,879			69,904			284
Proceeds from sale of assets and businesses										47,486			33,879			69,904
Proceeds from returns of investments in affiliates	1,069			9,186			1,620			—			1,069			9,186
Purchase of investments	(5,679		)	(2,523		)	(938		)	(1,086		)	(5,679		)	(2,523		)
Other	1,470			1,534			(21		)	—			1,470			1,534
Net cash provided by (used in) investing activities	(113,494		)	(28,218		)	(238,480		)	(185,993		)	(113,494		)	(28,218		)
Financing Activities
Net change in short-term borrowings	(8,059		)	14,000			15,000			183,000			(8,059		)	14,000
Proceeds from issuance of long-term debt	85,175			81,760			181,767			132,000			85,175			81,760
Payments of long-term debt	(57,189		)	(97,606		)	(92,474		)	(121,090		)	(57,189		)	(97,606		)
Proceeds from long-term financing arrangements	12,195			14,027			—			—			12,195			14,027
Distributions to noncontrolling interest owner	(377		)	(5,853		)	(3,206		)
Proceeds from (distributions to) noncontrolling interest owner										46,736			(377		)	(5,853		)
Payments of debt issuance costs	(2,024		)	(323		)	(296		)	(1,446		)	(2,024		)	(323		)
Purchases of treasury stock	—			—			(49,089		)
Acquisition of noncontrolling interest										(10,000		)	—			—
Dividends paid	(18,152		)	(17,362		)	(15,921		)	(18,639		)	(18,152		)	(17,362		)
Other	(1,071		)	(1,130		)	(2,389		)	(1,375		)	(1,071		)	(1,130		)
Net cash provided by (used in) financing activities	10,498			(12,487		)	33,392			209,186			10,498			(12,487		)
Increase (decrease) in cash and cash equivalents	(27,711		)	(1,120		)	(50,954		)	(12,326		)	(27,711		)	(1,120		)
Cash and cash equivalents at beginning of year	62,630			63,750			114,704			34,919			62,630			63,750
Cash and cash equivalents at end of year	$	34,919		$	62,630		$	63,750		$	22,593		$	34,919		$	62,630

The Notes to Consolidated Financial Statements are an integral part of these statements.

The Andersons, Inc.

Consolidated Statements of Equity

(In thousands, except per share data)


	The Andersons, Inc. Shareholders’ Equity																				The Andersons, Inc. Shareholders’ Equity
	Common Shares		Additional Paid-in Capital			Treasury Shares			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total			Common Shares		Additional Paid-in Capital			Treasury Shares			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interests			Total
Balance at January 1, 2015	$	96	$	222,789		$	(9,743	)	$	(54,595	)	$	644,556		$	20,946		$	824,049
Balance at January 1, 2016																					$	96	$	222,848		$	(52,902	)	$	(20,939	)	$	615,151		$	19,485		$	783,739
Net income												(13,067		)	1,745			(11,322		)												11,594			2,876			14,470
Other comprehensive loss									33,656									33,656											8,471									8,471
Cash distributions to noncontrolling interest															(3,206		)	(3,206		)															(5,853		)	(5,853		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $819 (187 shares)			(4,382		)	5,930												1,548
Purchase of treasury shares (1,193 shares)						(49,089		)										(49,089		)
Dividends declared ($0.575 per common share)												(16,200		)				(16,200		)
Shares issued for acquisitions (77 shares)			4,303															4,303
Performance share unit dividends equivalents			138									(138		)				—
Balance at December 31, 2015	96		222,848			(52,902		)	(20,939		)	615,151			19,485			783,739
Net income												11,594			2,876			14,470
Other comprehensive loss									8,471									8,471
Cash distributions to noncontrolling interest															(5,853		)	(5,853		)
Other changes in noncontrolling interest															(172		)	(172		)
Other changes to noncontrolling interest																																			(172		)	(172		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $458 (196 shares)			67			7,489												7,556					67			7,489												7,556
Dividends declared ($0.625 per common share)												(17,514		)				(17,514		)												(17,514		)				(17,514		)
Performance share unit dividends equivalents			(5		)	30						(25		)				—					(5		)	30						(25		)				—
Balance at December 31, 2016	96		222,910			(45,383		)	(12,468		)	609,206			16,336			790,697			96		222,910			(45,383		)	(12,468		)	609,206			16,336			790,697
Net income												42,511			98			42,609														42,511			98			42,609
Other comprehensive income									9,768									9,768
Other comprehensive loss																													9,768									9,768
Cash distributions to noncontrolling interest															(377		)	(377		)															(377		)	(377		)
Other changes in noncontrolling interest															(8,360		)	(8,360		)															(8,360		)	(8,360		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $(323) (138 shares)			1,707			5,007												6,714					1,707			5,007												6,714
Dividends declared ($0.645 per common share)												(18,152		)				(18,152		)												(18,152		)				(18,152		)
Stock award dividend equivalents			5			64						(69		)				—
Performance share unit dividends equivalents																							5			64						(69		)				—
Balance at December 31, 2017	$	96	$	224,622		$	(40,312	)	$	(2,700	)	$	633,496		$	7,697		$	822,899		96		224,622			(40,312		)	(2,700		)	633,496			7,697			822,899
Net income																																41,484			(259		)	41,225
Other comprehensive income																													(3,687		)							(3,687		)
Cash received from (paid to) noncontrolling interest, net																							(2,268		)										39,004			36,736
Adoption of accounting standard, net of income tax of $3,492																																(7,818		)				(7,818		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $(267) (127 shares)																							2,042			4,871												6,913
Dividends declared ($0.665 per common share)																																(19,504		)				(19,504		)
Restricted share award dividend equivalents																										141						(141		)				—
Balance at December 31, 2018																					$	96	$	224,396		$	(35,300	)	$	(6,387	)	$	647,517		$	46,442		$	876,764

The Notes to Consolidated Financial Statements are an integral part of these statements.

The Andersons, Inc.

Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Basis of Consolidation

These Consolidated Financial Statements include the accounts of The Andersons, Inc. and its wholly owned and controlled subsidiaries (the “Company”). All intercompany accounts and transactions are eliminated in consolidation. Investments in unconsolidated entities in which the Company has significant influence, but not control, are accounted for using the equity method of accounting.

In the opinion of management, all adjustments consisting of normal recurring items, considered necessary for a fair presentation of the results of operations for the periods indicated, have been made.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term investments with an initial maturity of three months or less. The carrying values of these assets approximate their fair values.

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and may bear interest if past due. The allowance for doubtful accounts is the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for doubtful accounts is reviewed quarterly. The allowance is based both on specific identification of potentially uncollectible accounts and the application of a consistent policy, based on historical experience, to estimate the allowance necessary for the remaining accounts receivable. For those customers that are thought to be at higher risk, the Company makes assumptions as to collectability based on past history and facts about the current situation. Account balances are charged off against the allowance when it becomes more certain that the receivable will not be recovered. The Company manages its exposure to counter-party credit risk through credit analysis and approvals, credit limits and monitoring procedures.

Commodity Derivatives and Inventories

The Company's operating results can be affected by changes to commodity prices. The Grain and Ethanol businesses have established “unhedged” position limits (the amount of a commodity, either owned or contracted for, that does not have an offsetting derivative contract to mitigate the price risk associated with those contracts and inventory). To reduce the exposure to market price risk on commodities owned and forward grain and ethanol purchase and sale contracts, the Company enters into exchange traded commodity futures and options contracts and over-the-counter forward and option contracts with various counterparties. The ~~exchange traded contracts are primarily via the Chicago Mercantile Exchange ("CME".) The~~ forward purchase and sale contracts are for physical delivery of the commodity in a future period. Contracts to purchase commodities from producers generally relate to the current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of commodities to processors or other commercial consumers generally do not extend beyond one year.

The Company accounts for its commodity derivatives at fair value. The estimated fair value of the commodity derivative contracts that require the receipt or posting of cash collateral is recorded on a net basis (offset against cash collateral posted or received, also known as margin deposits) within commodity derivative assets or liabilities. Management determines fair value based on exchange-quoted prices and in the case of its forward purchase and sale contracts, fair value is adjusted for differences in local markets and non-performance risk. While the Company considers certain of its commodity contracts to be effective economic hedges, the Company does not designate or account for its commodity contracts as hedges.

Realized and unrealized gains and losses in the value of commodity contracts (whether due to changes in commodity prices, changes in performance or credit risk, or due to sale, maturity or extinguishment of the commodity contract) and grain

inventories are included in cost of sales and merchandising revenues in the Consolidated Statements of Operations. Additional information about the fair value of the Company's commodity derivatives is presented in Notes 6 and 1112 to the Consolidated Financial Statements.

Grain inventories, which are agricultural commodities and may be acquired under provisionally priced contracts, are stated at their net realizable value, which approximates estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

All other inventories are stated at the lower of cost or net realizable value. Cost is determined by the average cost method. Additional information about inventories is presented in Note 2 to the Consolidated Financial Statements.

Derivatives - Master Netting Arrangements

Generally accepted accounting principles permit a party to a master netting arrangement to offset fair value amounts recognized for derivative instruments against the right to reclaim cash collateral or obligation to return cash collateral under the same master netting arrangement. The Company has master netting arrangements for its exchange traded futures and options contracts and certain over-the-counter contracts. When the Company enters into a futures, options or an over-the-counter contract, an initial margin deposit may be required by the counterparty. The amount of the margin deposit varies by commodity. If the market price of a futures, option or an over-the-counter contract moves in a direction that is adverse to the Company's position, an additional margin deposit, called a maintenance margin, is required. The Company nets, by counterparty, its futures and over-the-counter positions against the cash collateral provided or received. The margin deposit assets and liabilities are included in short-term commodity derivative assets or liabilities, as appropriate, in the Consolidated Balance Sheets. Additional information about the Company's master netting arrangements is presented in Note 6 to the Consolidated Financial Statements.

Derivatives - Interest Rate and Foreign Currency Contracts

The Company periodically enters into interest rate contracts to manage interest rate risk on borrowing or financing activities. The Company has long-term interest rate swaps recorded in other assets or other long-term liabilities that expire in 2021 and have been designated as a cash flow hedge; accordingly, changes in the fair value of the instruments are recognized in other comprehensive income. The Company has interest rate contracts recorded in other assets that are not designated as hedges. While the Company considers all of its derivative positions to be effective economic hedges of specified risks, these interest rate contracts for which hedge accounting is not applied are recorded on the Consolidated Balance Sheets in either other current assets or liabilities (if short-term in nature) or in other assets or other long-term liabilities (if non-current in nature), and changes in fair value are recognized in income as interest expense. Upon termination of a derivative instrument or a change in the hedged item, any remaining fair value recorded on the balance sheet is recorded as interest expense consistent with the cash flows associated with the underlying hedged item. Information regarding the nature and terms of the Company's interest rate derivatives is presented in Note 6 to the Consolidated Financial Statements.

Marketing Agreement

The Company has a marketing agreement that covers certain of its grain facilities, some of which are leased from Cargill, Incorporated (“Cargill”). Under the five-year amended and restated agreement (renewed in ~~December 2013~~June 2018 and ending May ~~2018)~~2023), any grain the Company sells ~~grain from these facilities~~ to Cargill is at market ~~prices.~~price. Income earned from operating the facilities (including buying, storing and selling grain and providing grain marketing services to its producer customers) over a specified threshold is shared equally with Cargill. Measurement of this threshold is made on a cumulative basis and cash is paid to Cargill on an annual basis. The Company recognizes its pro rata share of income every month and accrues for any payment owed to Cargill. ~~The~~There was no balance included in customer prepayments and deferred revenue ~~was $3.3 million and $5.8 million~~ as of December 31, ~~2017~~2018 and $3.3 million was included as of December 31, ~~2016, respectively.~~2017.

Rail Group Assets Leased to Others

The Company's Rail Group purchases, leases, markets and manages railcars and barges for third parties and for internal use. Rail Group assets to which the Company holds title are shown on the balance sheet in one of two categories - other current assets (for those that are available for sale) or Rail Group assets leased to others. Rail Group assets leased to others, both on short and long-term leases, are classified as long-term assets and are depreciated over their estimated useful lives.

Railcars have statutory lives of either 40 or 50 years, measured from the date built. Barges have estimated lives of 30 to 40 years, measured from the date built. At the time of purchase, the remaining life is used in determining useful lives which are

depreciated on a straight-line basis. Repairs and maintenance costs are charged to expense as incurred. Additional information regarding Rail Group assets leased to others is presented in Note 3 to the Consolidated Financial Statements.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost. Repairs and maintenance costs are charged to expense as incurred, while betterments that extend useful lives are capitalized. Depreciation is provided over the estimated useful lives of the individual assets, by the straight-line method. Estimated useful lives are generally as follows: land improvements - 16 years; leasehold improvements - the shorter of the lease term or the estimated useful life of the improvement, ranging from 3 to 20 years; buildings and storage facilities - 10 to 40 years; and machinery and equipment - 3 to 20 years. The cost of assets retired or otherwise disposed of and the accumulated depreciation thereon are removed from the accounts, with any gain or loss realized upon sale or disposal credited or charged to operations.

Additional information regarding the Company's property, plant and equipment is presented in Note 3 to the Consolidated Financial Statements.

Deferred Debt Issue Costs

Costs associated with the issuance of debt are ~~deferred.~~deferred and recorded net with debt. These costs are amortized, as a component of interest expense, over the earlier of the stated term of the debt or the period from the issue date through the first early payoff date without penalty, or the expected payoff date if the loan does not contain a prepayment penalty. Deferred costs associated with the borrowing arrangement with a syndication of banks are amortized over the term of the agreement.

Goodwill and Intangible Assets

Goodwill ~~is not amortized but~~ is subject to annual impairment tests or more often when events or circumstances indicate that the carrying amount of goodwill may be impaired. A goodwill impairment loss is recognized to the extent the carrying amount of goodwill exceeds the ~~implied fair value of goodwill.~~business enterprise value. Additional information about the Company's goodwill and other intangible assets is presented in Note 4 to the Consolidated Financial Statements.

Acquired intangible assets are recorded at cost, less accumulated amortization, if not indefinite lived. In addition, we capitalize the salaries and payroll-related costs of employees and consultants who devote time to the development of internal-use software projects. If a project constitutes an enhancement to previously-developed software, we assess whether the enhancement is significant and creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once a project is complete, we estimate the useful life of the internal-use ~~software, and we periodically assess whether the software is impaired.~~software. Changes in our estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the period.

Amortization of intangible assets is provided over their estimated useful lives (generally 3 to 10 years) on the straight-line method.

Impairment of Long-lived Assets and Equity Method Investments

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the assets to the undiscounted future net cash flows the Company expects to generate with the assets. If such assets are considered to be impaired, the Company recognizes an impairment loss for the amount by which the carrying amount of the assets exceeds the fair value of the assets.

The Company reviews its equity method investments to determine whether there has been a decline in the estimated fair value of the investment that is below the Company's carrying value which is other than temporary. Other than consideration of past and current performance, these reviews take into account forecasted earnings which are based on management's estimates of future performance.

Provisionally Priced Grain Contracts

Accounts payable includes certain amounts related to grain purchases for which, even though the Company has taken ownership and possession of the grain, the final purchase price has not been fully established. If the futures and basis components are unpriced, it is referred to as a delayed price payable. If the futures component has not been established, but the basis has been set, it is referred to as a basis payable. The unpriced portion of these payables will be exposed to changes in the

fair value of the underlying commodity based on quoted prices on commodity exchanges (or basis levels). Those payables that are fully priced are not considered derivative instruments.

The Company also enters into contracts with customers for risk management purposes that allow the customers to effectively unprice the futures component of their inventory for a period of time, subjecting the bushels to market fluctuations. The Company records an asset or liability for the market value changes of the commodities over the life of the contracts based on quoted ~~Chicago Board of Trade ("CBOT")~~exchange prices. See Note 1112 for additional discussion on these instruments.

Stock-Based Compensation

Stock-based compensation expense for all stock-based compensation awards is based on the estimated grant-date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, adjusted for revisions to performance expectations. Additional information about the Company's stock compensation plans is presented in Note 1617 to the Consolidated Financial Statements.

Deferred Compensation Liability

Included in accrued expenses are ~~$9.6~~$7.5 million and ~~$9.7~~$9.6 million at December 31, ~~2017~~2018 and ~~2016,~~2017, respectively, of deferred compensation for certain employees who, due to Internal Revenue Service guidelines, may not take full advantage of the Company's qualified defined contribution plan. Assets funding this plan are recorded at fair value in other current assets ~~and have been classified as trading securities~~ with changes in the fair value recorded in earnings as a component of other income, net. Changes in the fair value of the deferred compensation liability are reflected in earnings as a component of operating, administrative, and general expenses.

Revenue Recognition

The Company’s revenue consists of sales from commodity contracts that are accounted for under ASC 815, Derivatives and Hedging (ASC 815), rental revenues from operating leases that are accounted for under ASC 840, Leases,and sales of other products and services that are accounted for under ASC 606, Revenue from Contracts with Customers (ASC 606).

Revenue from commodity contracts (ASC 815)

Revenue from commodity contracts primarily relates to forward sales of commodities in the Company’s Grain and Ethanol segments, such as corn, soybeans, wheat, oats, ethanol, and corn oil, which are accounted for as derivatives at fair value under ASC 815. These forward sales meet the definition of a derivative under ASC 815 as they have an underlying (e.g. the price of corn), a notional amount (e.g. metric tons), no initial net investment and can be net settled since the commodity is readily convertible to cash. The Company ~~follows a policy~~does not apply the normal purchase and normal sale exception available under ASC 815 to these contracts.

Revenue from commodity contracts is recognized in Sales and merchandising revenues for the contractually stated amount when the contracts are settled. Settlement of ~~recognizing sales revenue at~~ the ~~time of~~commodity contracts generally occurs upon shipment or delivery of the product, ~~and when all of the following have occurred: a sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured.~~

~~Sales of grain and ethanol are primarily recognized at the time of shipment, which is~~ when title and ~~risk~~risks and rewards of ~~loss~~ownership transfers to the customer. Prior to settlement, these forward sales contracts are recognized at fair value with the unrealized gains or losses recorded within Cost of sales and merchandising revenues. Additional information about the fair value of the Company's commodity derivatives is presented in Notes 6 and 12 to the Consolidated Financial Statements.

There are certain transactions that allow for pricing to occur after title of the goods has passed to the customer. In these cases, the Company continues to report the goods in inventory until it recognizes the sales revenue once the price has been determined. Direct ship grain sales (where the Company never takes physical possession of the grain) are recognized when the grain arrives at the customer's facility. Revenues from other grain and ethanol merchandising activities are recognized as services are provided. Sales of other products are recognized at the time title and risk of loss transfers to the customer, which is generally at the time of shipment or, in the case of the retail store sales, when the customer takes possession of the goods. Revenues for all other services are recognized as the service is provided.

Certain of the Company's operations provide for customer billings, deposits or prepayments for product that is stored at the Company's facilities. The sales and gross profit related to these transactions are not recognized until the product is shipped in accordance with the previously stated revenue recognition policy and these amounts are classified as a current liability titled “Customer prepayments and deferred revenue”.

~~Rental revenues on~~

Revenue from leases (ASC 840)

The Company has a diversified fleet of car types (boxcars, gondolas, covered and open top hopper cars, tank cars and pressure differential cars), locomotives and barges serving a broad customer base. While most of these assets are owned by the Company, it also lease assets from financial intermediaries through sale-leaseback transactions, the majority of which involve operating leases. The Company's Rail Group leases these assets to customers under operating leases, ~~are~~which includes managing the assets for third parties. In exchange for conveying the right to use these railcars to the lessee, the Company receives a fixed monthly rental payment, which is typically expressed on a “per car” basis in the lease agreement. Revenue from these arrangements is recognized on a straight-line basis over the term of the lease. Sales to financial intermediaries of owned railcars or other assets which are subject to an operating lease (with the Company being the lessor in such operating leases prior to the sale, referred to as a “non-recourse transaction”) are recognized as revenue on the date of sale if the Company does not maintain substantial risk of ownership in the sold assets. Revenue related to railcar or other asset servicing and maintenance contracts is recognized over the term of the lease or service contract.

Sales returns and allowances are provided for at the time sales are recorded based on historical experience. Shipping and handling charges are included in cost of sales. Sales taxes and motor fuel taxes on ethanol sales are presented on a net basis and are excluded from revenues.

~~Rail Lease Accounting~~

In addition to the sale of Rail Group assets that the Company makes to financial intermediaries on a non-recourse basis and records as revenue as discussed above, the Company also acts as the lessor and / or the lessee in various leasing arrangements as described below.

The Company's Rail Group leases assets to customers, manages assets for third parties and leases assets for internal use. The Company acts as the lessor in various operating leases of assets that are owned by the Company, or leased by the Company from financial intermediaries and, in turn, leased by the Company to end-users of the assets. The leases from financial

~~intermediaries are generally structured as sale-leaseback transactions, with the leaseback by the Company being treated as an operating lease.~~

Certain of the Company's leases include monthly lease fees that are contingent upon some measure of usage (“per diem” leases). This monthly usage is tracked, billed and collected by third-party service providers and funds are generally remitted to the Company along with usage data three months after they are earned. The Company records lease revenue for these per diem arrangements based on recent historical usage patterns and records a true-up adjustment when the actual data is received. Such true-up adjustments were not significant for any period presented.

Additional information about leasing activities is presented in Note 15 to the Consolidated Financial Statements.

Revenue related to railcar or other asset servicing and maintenance contracts is recognized over the term of the lease or service contract.

Revenue from contracts with customers (ASC 606)

Revenue from contracts with customers accounted for under ASC 606 is primarily generated in the Plant Nutrient segment through the sale agricultural and related plant nutrients, corncob-based products, pelleted lime and gypsum products. The Company recognizes revenue from these contracts at a point in time when it satisfies a performance obligation by transferring control of a product to a customer, generally when legal title and risks and rewards of ownership transfer to the customer.

Additional information regarding our revenue recognition policy under ASC 606 is presented in Note 8 to the Consolidated Financial Statements.

Rail Lease Accounting

The Company expenses operating lease payments on a straight-line basis over the lease term. Additional information about leasing activities is presented in Note 1415 to the Consolidated Financial Statements.

Income Taxes

Income tax expense for each period includes current tax expense plus deferred expense, which is related to the change in deferred income tax assets and liabilities. Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of assets and liabilities and are measured using enacted tax rates and laws governing periods in which the differences are expected to reverse. The Company evaluates the realizability of deferred tax assets and provides a valuation allowance for amounts that management does not believe are more likely than not to be recoverable, as applicable.

The annual effective tax rate is determined by income tax expense ~~described above,~~ from continuing operations ~~described above,~~ as a percentage of pretax book income. Differences in the effective tax rate and the statutory tax rate may be due to permanent items, tax credits, foreign tax rates and state tax rates in jurisdictions in which the Company operates, or changes in valuation allowances.

The Company records reserves for uncertain tax positions when, despite the belief that tax return positions are fully supportable, it is anticipated that certain tax return positions are likely to be challenged and that the Company may not prevail. These reserves are adjusted ~~in light of~~for changing facts and circumstances, such as the progress of a tax audit or the lapse of statutes of limitations.

Additional information about the Company’s income taxes is presented in Note 89 to the Consolidated Financial Statements.

Employee Benefit Plans

The Company provides full-time employees hired before January 1, 2003 with postretirement health care benefits. In order to measure the expense and funded status of these employee benefit plans, management makes several estimates and assumptions,

including employee turnover rates, anticipated mortality rates and anticipated future healthcare cost trends. These estimates and assumptions are based on the Company's historical experience combined with management's knowledge and understanding of current facts and circumstances. The selection of the discount rate is based on an index given projected plan payouts. Additional information about the Company's employee benefit plans is presented in Note 7 to the Consolidated Financial Statements.

Advertising

Advertising costs are expensed as incurred. Advertising expense of $1.9 million, $2.5 million and $4.9 million in 2018, 2017, and ~~$5.2 million in 2017,~~ 2016, ~~and 2015,~~ respectively, is included in operating, administrative and general expenses.

New Accounting Standards

Derivatives and Hedging

~~Revenue Recognition~~

In ~~May 2014,~~August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12 Targeted Improvements to Accounting for Hedging Activities. This standard simplifies the recognition and presentation of changes in the fair value of hedging instruments and, among other things, eliminates the requirement to separately measure and record hedge ineffectiveness. The Company early adopted ASU 2017-12 during the current year noting the effects of this standard on our condensed consolidated financial statements were not material. There was no transition impact.

Revenue Recognition

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606). The FASB issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, and December 2016 within ASU 2015-14, ASU 2016-08, ASU 2016-10 ASU 2016-12 and ASU 2016-20, respectively. The core principle of the new revenue standard is that an entity recognizes revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ~~new revenue standard is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The~~ Company adopted the standard ~~on January 1, 2018,~~in the current year using the modified retrospective method. ~~The adoption of this new guidance will require expanded disclosures~~

~~in the Company’s consolidated financial statements including separate quantitative disclosure of revenues within the scope of ASC 606 and revenues excluded from the scope of ASC 606.~~

The Company has assessed the impact of this standard by reviewing representative samples of customer contracts for each revenue stream, analyzing those contracts under the new revenue standard, and comparing the conclusions to the current accounting policies and practices to identify potential changes. As a result of ~~this assessment, which was completed during~~ the ~~fourth quarter of 2017, the Company believes the following items will be impacted upon adoption:~~

- ~~Revenues not in the Scope of ASC 606:~~ Many of the Company's Grain and Ethanol sales contracts are derivatives under ASC 815, Derivatives and Hedging, and therefore will be outside the scope of ASC 606. In addition, the Rail Group's leasing revenue is accounting for under ASC 840, Leases, and will be outside the scope of ASC 606. While we do not believe that the timing or measurement of revenue will be impacted by this conclusion, we will be required to disclose this revenue separately from revenue that is earned from contracts with customers upon adoption of ASC 606. The Company expects approximately 70 percent to 80 percent of consolidated revenues will be accounted for outside the scope of ASC 606, including at least 95 percent of Grain’s revenues, 80 percent to 90 percent of Ethanol’s revenues and 50 percent to 60 percent of Rail's revenues;

- ~~Corn Origination Agreements:~~ While these sales contracts will be accounted for under ASC 815, as noted above, we are still required to evaluate the principal versus agent guidance in ASC 606 to determine whether realized gains or losses should be presented on a gross or net basis in the consolidated statements of operations upon physical settlement. Currently the Company presents these amounts on a gross basis as it has concluded, on the basis of risks and rewards, that it is the principal in the contract. However, ASC 606 requires an entity to evaluate whether it is a principal or agent on the basis of control, rather than risks and rewards. The Company has determined that it is the agent in certain origination arrangements within our Grain Group and therefore realized gains or losses will be presented on a net basis upon adoption of ASC 606. However, as this change relates only to presentation within our consolidated statement of income, there will be no impact on gross profit.

While the impact is dependent on commodity price levels, the Company expects consolidated revenues and cost of sales to each decrease by approximately 10 percent to 20 percent for the Company and 20 percent to 30 percent for the Grain segment, respectively;

- ~~Certain Rail Financing Transactions:~~ In its normal course of operations, the Rail Group enters into transactions with financial institutions in which it agrees to sell railcars to the financial institution in exchange for an upfront payment. Each of the railcars included in a transaction are subject to existing operating leases at the time of sale and the Rail Group assigns all of its rights and obligations pursuant to the underlying lease agreements to financial institution on a non-recourse basis. In such arrangements, the group typically also provides ongoing maintenance and management services related to the cars on behalf of the financial institution in exchange for a stated monthly fee. The group typically holds an option to repurchase the assets at the end of the underlying lease term.

Due to the fact that the group holds an option to repurchase the railcars at the end of the lease term, the group has concluded that it does not transfer control of those railcars to the financial institution and therefore such transactions will no longer be treated as sales upon adoption of ASC 606. Rather, these transactions will be accounted for as collateralized borrowings in which the cash received from the financial institution will be recorded as a financial liability and the railcars will remain recorded as assets within the “Rail Group assets leased to others, net” financial statement caption.

~~Upon~~ adoption, the Company ~~will recognize~~recognized a cumulative catch-up transition adjustment in beginning retained earnings at January 1, 2018 for non-recourse financing transactions that ~~are~~were open ~~and have not yet recognized substantially all of the revenue under the contract~~ as of December 31, 2017. ~~The effect of this transition adjustment will be to recognize the railcar assets at their net book value and~~This resulted in a ~~financial liability representing the remaining amount owed to the financial institution. This will result in $25~~$25.6 million increase in Rail Group net assets, ~~$43~~$34.0 million increase in financing liabilities and deferred tax liabilities and ~~$18~~$8.4 million decrease to retained earnings. See Note 8 for further detail.

Leasing

In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). The FASB issued subsequent amendments to the initial guidance in July 2018 with ASU 2018-10, in August 2018 with ASU 2018-11, and in December 2018 with ASU 2018-20. ASC 842 supersedes the current accounting for leases. The new standard, while retaining two distinct types of leases, finance and operating, (i) requires lessees to record a right of use asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (ii) eliminates current real estate specific lease provisions, (iii) modifies the lease classification criteria and (iv) aligns many of the underlying lessor model principles with those in the new revenue standard.

We will adopt the new standard on the required effective date of January 1, 2019 using the Comparatives Under ASC ~~842~~840 approach, which requires application of the new guidance at the beginning of the standard’s effective date. The Company elected the Package of Three practical expedient and has decided not to elect the “Hindsight” practical expedient. As a result, the Company will measure the right of use asset and lease liability for operating leases upon adoption using the remaining portion of the lease term that was determined under ASC 840 when the lease was entered into.

A cross-functional implementation team is finalizing policy elections, the discount rate to be used based on January 1, 2019 data, and business processes and controls to support recognition and disclosure under the new standard. The primary impact upon adoption will be the recognition of right of use assets and lease liabilities, on a discounted basis, of our minimum lease obligations, as disclosed in Note 15. In addition, the Company will be required to recognize its deferred gains associated with successful sale-and-leaseback transactions as a cumulative effect adjustment to retained earnings upon adoption of the new standard. However, such amounts are not material to the consolidated financial statements. We currently do not expect ASU 2016-12 to have a material effect on our Consolidated Statements of Income.

Other applicable standards

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This ASU reduces the complexity of accounting for costs of implementing a cloud computing service arrangement. This standard aligns the accounting for implementation costs of hosting arrangements, regardless of whether they convey a license to the hosted software. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within. Early adoption is permitted, however the Company does not plan to early adopt. Entities are required to use a modified retrospective approach when transitioning to ASC 842 for leases that exist as of or are entered into after the beginning of the earliest comparative period presented in the financial statements.

2020. The Company expects this standard to have the effect of bringing certain off balance-sheet rail assets noted in Item 7 of Form 10-K onto the balance sheet along with a corresponding liability for the associated obligations. Additionally, we have other arrangements currently classified as operating leases which will be recorded as a right of use asset and corresponding liability on the balance sheet. We are currentlyis still evaluating the impact ~~these changes will have on the consolidated financial statements.~~of this standard.

~~Other applicable standards~~

In August ~~2017,~~2018, the FASB issued ~~Accounting Standards Update~~ASU No. ~~2017-12 Targeted Improvements~~2018-14, Disclosure Framework - Changes to ~~Accounting~~the Disclosure Requirements for ~~Hedging Activities.~~Defined Benefit Plans. This standard ~~simplifies~~modified the ~~recognition~~disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The standard is effective for fiscal years ending after December 15, 2020. and ~~presentation of changes~~early adoption is permitted. The Company adopted this standard in the ~~fair value of hedging instruments.~~current period which did not have a material impact on its disclosures.

In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which removes and modifies some existing disclosure requirements and adds others. The ASU is effective for ~~annual~~all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company adopted this standard in the current period which did not have a material impact on its disclosures.

In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify stranded income tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings in their consolidated financial statements. This guidance is effective for fiscal years beginning after December 15, 2018. ~~The Company does not expect~~We have evaluated the impact ~~from adoption~~ of this new standard on our consolidated financial statements noting it is not material. Early adoption is permitted, but the Company has not chosen to ~~be material to its Consolidated Financial Statements and disclosures.~~do so at this time.

In May 2017, the FASB issued ~~Accounting Standards Update No.~~ASU 2017-09 Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ~~This~~Under this standard, ~~states that~~ if the vesting conditions, fair value, and classification of the awards are the same immediately before and after the modification an entity would not apply modification accounting. The FASB then issued ASU ~~is effective~~2018-07 which expands the scope to include share-based payment transactions for ~~annual periods beginning after December 15, 2017. Early adoption is permitted, however~~acquiring goods and services from nonemployees. The Company has adopted these standards during the year, noting no impact as the Company has not ~~chosen~~made any modifications to ~~do so at this time. The Company does not expect the impact from adoption of this standard to be material.~~our stock compensation awards.

In March 2017, the FASB issued ~~Accounting Standards Update No.~~ASU 2017-07 Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This standard requires that the service cost component be reported in the same line item as other compensation costs arising from services rendered by the employees during the period. The other components of net benefit costs should be presented in the income statement separately from the service cost component and outside of income from operations if that subtotal is presented. The ~~ASU is effective for annual periods beginning after December 15, 2017. The~~ Company ~~does not expect the impact from adoption of this standard to be material to its Consolidated Financial Statements and disclosures.~~

In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. The ASU is effective prospectively for fiscal years beginning after December 15, 2019. Early adoption is permitted, and the Company elected to implementhas adopted this standard in the ~~second quarter of 2017.~~current year using the retrospective approach and prior periods have been recast to reflect this change.

In August 2016, the FASB issued ASU ~~No.~~ 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard clarifies how companies present and classify certain cash receipts and payments in the statement of cash flows. The Company has adopted this standard in the current year noting the impact is effective for annual and interim periods beginning after December 15, 2017. At adoption, the Company will elect to continue classifying distributions from equity method investments using the cumulative earnings approach which is consistent with current practice.immaterial.

In June 2016, the FASB issued ASU ~~No.~~ 2016-13, Measurement of Credit Losses on Financial Instruments. The FASB issued subsequent amendments to the initial guidance in November 2018 with ASU 2018-19. This update changes the accounting for credit losses on loans and held-to-maturity debt securities and requires a current expected credit loss (CECL) approach to determine the allowance for credit losses. This includes allowances for trade receivables. The Company has not historically incurred significant credit losses and does not currently anticipate circumstances that would lead to a CECL approach differing from the Company's existing allowance estimates in a material way. The guidance is effective for fiscal years beginning after December 15, 2019 with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. Early adoption is permitted, ~~however~~but the Company does not plan to do so.

In January 2016, the FASB issued ~~Accounting Standards Update No.~~ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The FASB issued subsequent amendments to the initial guidance in February 2018 and March 2018 within ASU 2018-03 and ASU 2018-04, respectively. This standard provides guidance for the recognition, measurement, presentation, and disclosure of financial instruments. ~~This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted.~~ The Company ~~does not expect~~has adopted this standard in the current year noting the impact ~~from adoption of this standard to be material to currently held financial assets and liabilities.~~is immaterial.

2. Inventories

Major classes of inventories are as follows:


	December 31,				December 31,
(in thousands)	2017		2016		2018		2017
Grain	$	505,217	$	495,139	$	527,471	$	505,217
Ethanol and coproducts	11,003		10,887
Ethanol and co-products					11,918		11,003
Plant nutrients and cob products	126,962		150,259		145,693		126,962
Retail merchandise	—		20,678
Railcar repair parts	5,521		5,784		5,722		5,521
	$	648,703	$	682,747	$	690,804	$	648,703

Grain inventories held in storage for others was de minimis as of December 31, 2018. Inventories on the Consolidated Balance Sheets at December 31, 2017 ~~and 2016~~ do not include 1.0 million ~~and 0.9 million~~ bushels of grain ~~respectively,~~ held in storage for others. The Company does not have title to the grain and is only liable for any deficiencies in grade or shortage of quantity that may arise during the storage period. Management has not experienced historical losses on any deficiencies and does not anticipate material losses in the future.

3. Property, Plant and Equipment

The components of property, plant and equipment are as follows:



	December 31,
(in thousands)	2018		2017
Land	$	29,739	$	22,388
Land improvements and leasehold improvements	68,826		69,127
Buildings and storage facilities	284,998		284,820
Machinery and equipment	393,640		373,127
Construction in progress	102,394		7,502
	879,597		756,964
Less: accumulated depreciation	402,886		372,287
	$	476,711	$	384,677

December 31,
(in thousands) 2017 2016
Land $ 22,388
$ 30,672
Land improvements and leasehold improvements 69,127
79,631
Buildings and storage facilities 284,820
322,856
Machinery and equipment 373,127
392,418
Construction in progress 7,502
12,784
756,964
838,361
Less: accumulated depreciation 372,287
388,309
$ 384,677
$ 450,052
Capitalized interest totaled $1.7 million for the year ended December 31, 2018.

Depreciation expense on property, plant and equipment amounted to $46.5 million, $48.3 million ~~$48.9 million~~ and ~~$46.4~~$48.9 million for the years ended 2018, 2017 ~~2016~~ and ~~2015,~~2016, respectively.

In June 2018, the Company recorded charges totaling $1.6 million for impairment of property, plant and equipment in the Grain segment related to assets that were reclassified as assets held for sale at June 30, 2018 and were sold in the third quarter.

In December 2017, the Company recorded charges totaling $10.9 million for impairment of property, plant and equipment in the Grain segment, of which $5.6 million relates to assets that ~~are~~were deemed held and used and $5.3 million related to assets that ~~have~~had been ~~reclassed~~reclassified as assets held for sale at December 31, 2017. ~~The Company wrote down the value of these~~These assets to the extent their carrying amounts exceeded fair value. The Company classified the significant assumptions used to determine the fair value of the impaired assets as Level 3 inputs in the fair value hierarchy.were then sold during 2018.

In December 2016, the Company recorded charges totaling $6.0 million for impairment of property, plant and equipment in the Retail segment. This does not include $0.5 million of impairment charges related to software. The Company also recorded charges totaling $2.3 million for impairment of property, plant and equipment in the Plant Nutrient segment due to the closing of a cob facility.

Rail Group Assets

The components of the Rail Group assets leased to others are as follows:



	December 31,
(in thousands)	2018		2017
Rail Group assets leased to others	$	640,349	$	531,391
Less: accumulated depreciation	118,564		107,948
	$	521,785	$	423,443

December 31,
(in thousands) 2017 2016
Rail Group assets leased to others $ 531,391
$ 431,571
Less: accumulated depreciation 107,948
104,376
$ 423,443
$ 327,195

Depreciation expense on Rail Group assets leased to others amounted to $24.7 million, $20.0 million ~~$18.6 million~~ and ~~$17.6~~$18.6 million for the years ended 2018, 2017 and 2016, ~~and 2015,~~ respectively.

In June 2018, the Company recorded charges totaling $4.7 million for impairment of Rail Group assets leased to others that had been reclassified as assets held for sale at June 30, 2018. These assets were sold during the second half of 2018.

4. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2018, 2017 ~~2016~~ and ~~2015~~2016 are as follows:



(in thousands)	Grain		Plant Nutrient			Rail		Total
Balance at January 1, 2016	$	—	$	59,767		$	4,167	$	63,934
Acquisitions	—		—			—		—
Balance at December 31, 2016	—		59,767			4,167		63,934
Acquisitions	1,171		—			—		1,171
Impairments	—		(59,081		)	—		(59,081		)
Balance at December 31, 2017	1,171		686			4,167		6,024
Acquisitions	—		—			—		—
Balance at December 31, 2018	$	1,171	$	686		$	4,167	$	6,024

(in thousands) Grain Plant Nutrient Rail Total
Balance at January 1, 2015 $ 46,422
$ 21,776
$ 4,167
$ 72,365
Acquisitions —
47,735
—
47,735
Impairments (46,422 ) (9,744 ) —
(56,166 )
Balance at December 31, 2015 —
59,767
4,167
63,934
Acquisitions —
—
—
—
Balance at December 31, 2016 —
59,767
4,167
63,934
Acquisitions 1,171
—
—
1,171
Impairments —
(59,081 ) —
(59,081 )
Balance at December 31, 2017 $ 1,171
$ 686
$ 4,167
$ 6,024

Goodwill for the Grain segment is $1.2 million and net of accumulated impairment losses of $46.4 million as of December 31, ~~2017.~~2018. Goodwill for the Plant Nutrient segment is $0.7 million and net of accumulated impairment losses of $68.9 million as of December 31, ~~2017.~~2018.

Goodwill is tested for impairment annually as of October 1, or more frequently if impairment indicators arise. Upon early adoption of ASU No. 2017-04 during the second quarter of 2017, the Company ~~now~~ uses a one-step quantitative approach that compares the ~~BEV~~business enterprise value ("BEV") of each reporting unit with its carrying value. The BEV was computed based on both an income approach (discounted cash flows) and a market approach. The income approach uses a reporting unit's estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics to the reporting unit. Any excess of the carrying value of the goodwill over the BEV will be recorded as an impairment loss. The calculation of the BEV is based on significant unobservable inputs, such as price trends, customer demand, material costs and discount rates, and are classified as Level 3 in the fair value hierarchy. No goodwill impairment charges were incurred in 2018 as a result of our annual impairment testing.

While performing the annual assessment of goodwill impairment in 2017, the Company recorded an impairment loss related to the Wholesale reporting unit for $17.1 million. The discounted cash flow model used for the income approach assumed discrete period revenue growth through 2022 that was reflective of market opportunities, changes in product mix, and cyclical trends within the Wholesale reporting unit. In the terminal year, the Company assumed a long-term earnings growth rate of 2.0 percent that is believed to be appropriate given the current industry-specific expectations. As of the valuation date, the Company utilized a weighted-average cost of capital of 10.4 percent, which reflects the relative risk and time value of money. This is in addition to the $42.0 million of impairment recorded in the Wholesale reporting unit in the second quarter of ~~this year.~~2017. As a result, there is no remaining goodwill in the Wholesale reporting unit as of December 31, 2017. No other impairments were incurred in the remaining reporting units as a result of the annual assessment.

In 2016 and 2015, the Company performed a two-step quantitative assessment of goodwill. Step 1 compares the business enterprise value ("BEV") of each reporting unit with its carrying value, as described above. If the BEV is less than the carrying value for any reporting unit, then Step 2 must be performed. Step 2 compares the implied fair value of goodwill with the carrying amount of goodwill. Any excess of the carrying value of the goodwill over the implied fair value will be recorded as

an impairment loss. The calculations of the BEV in Step 1 and the implied fair value of goodwill in Step 2 are based on significant unobservable inputs, such as price trends, customer demand, material costs, discount rates and asset replacement costs, and are classified as Level 3 in the fair value hierarchy.

There is a certain degree of uncertainty associated with the key assumptions used. Potential events or changes in circumstances that could reasonably be expected to negatively affect the key assumptions include significant volatility in commodity prices or raw material prices and unanticipated changes in the economy or industries within which the businesses operate.

No goodwill impairment charges were incurred in 2016 as a result of our annual impairment testing.

While performing the annual assessment of goodwill impairment in 2015, the Company recorded impairment losses related to our Grain and Farm Center reporting units of $54.2 million due to compressed margins over the past several years and anticipated unfavorable operating conditions in domestic and global commodity markets, including oil and ethanol, as well as foreign exchange impacts. This is in addition to the $2.0 million of impairment related to our Cob business which was recognized in the third quarter of that year.

The Company's other intangible assets are as follows:



(in thousands)	Original Cost		Accumulated Amortization		Net Book Value
December 31, 2018
Intangible asset class
Customer list	$	40,570	$	21,706	$	18,864
Non-compete agreement	3,313		2,753		560
Supply agreement	9,060		5,824		3,236
Technology	13,400		4,857		8,543
Trademarks and patents	17,985		7,682		10,303
Lease intangible	11,564		3,602		7,962
Software	86,723		37,112		49,611
Other	419		360		59
	$	183,034	$	83,896	$	99,138
December 31, 2017
Intangible asset class
Customer list	$	41,151	$	18,437	$	22,714
Non-compete agreement	4,665		3,563		1,102
Supply agreement	9,806		5,699		4,107
Technology	15,500		5,616		9,884
Trademarks and patents	18,185		5,882		12,303
Lease intangible	12,420		5,707		6,713
Software	84,339		28,372		55,967
Other	2,023		1,920		103
	$	188,089	$	75,196	$	112,893

(in thousands) Original Cost Accumulated Amortization Net Book Value
December 31, 2017
Intangible asset class
  Customer list $ 41,151
$ 18,437
$ 22,714
  Non-compete agreement 4,665
3,563
1,102
  Supply agreement 9,806
5,699
4,107
  Technology 15,500
5,616
9,884
  Trademarks and patents 18,185
5,882
12,303
  Lease intangible 12,420
5,707
6,713
  Software 84,339
28,372
55,967
  Other 2,023
1,920
103
$ 188,089
$ 75,196
$ 112,893
December 31, 2016
Intangible asset class
  Customer list $ 41,477
$ 14,958
$ 26,519
  Non-compete agreement 4,594
3,064
1,530
  Supply agreement 9,806
4,827
4,979
  Technology 15,500
4,243
11,257
  Trademarks and patents 18,717
4,335
14,382
  Lease intangible 5,514
4,969
545
  Software 71,362
24,592
46,770
  Other 1,953
1,835
118
$ 168,923
$ 62,823
$ 106,100

Amortization expense for intangible assets was $19.1 million, $18.1 million and $16.8 million for 2018, 2017 and ~~$14.5 million for 2017,~~ 2016, ~~and 2015,~~ respectively. Expected future annual amortization expense for the above assets is as follows: ~~2018 -- $18.9 million;~~ 2019 -- ~~$18.0~~$19.5 million; 2020 -- ~~$16.7~~$17.7 million; 2021 -- ~~$15.7~~$16.4 million; 2022 -- $14.4 million; and ~~2022~~2023 -- ~~$14.0~~$12.9 million. ~~In December 2016, the Company recorded a $0.5 million impairment related to software in the Retail Group.~~

5. Debt

Borrowing Arrangements

On April 13, 2017, the Company amended its line of credit agreement with a syndicate of banks. The amended agreement provides for a credit facility in the amount of $800 million. The Company can designate up to $400 million of borrowings as long-term when the debt is used for long-term purposes, such as replacing long-term debt that is maturing, funding the purchase of long-term assets, or increasing permanent working capital when needed. It also provides the Company with up to $90

million in letters of credit. Any amounts outstanding on letters of credit will reduce the amount available on the lines of credit. The Company had standby letters of credit outstanding of ~~$32.5~~$32.9 million at December 31, ~~2017.~~2018. As of December 31, ~~2017,~~2018, the Company had ~~$122.0~~$255.0 million of outstanding borrowings on the lines of credit of which ~~$22.0~~$205.0 million is classified as short-term debt. Borrowings under the lines of credit bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date for the line of credit is April 2022. Draw downs and repayments that are less than 90 days are recorded on a net basis in the Consolidated Statements of Cash Flows.

~~The Company also has a line of credit related to The Andersons Denison Ethanol LLC ("TADE"),~~ELEMENT, a consolidated ~~subsidiary. TADE amended its borrowing arrangement with~~subsidiary of the Company, entered into a ~~syndicate of financial institutions in~~financing agreement during the ~~fourth~~first quarter of ~~2017 which provided~~2018. This agreement provides a ~~$15.0~~construction loan of up to $70 million. Upon project completion, the agreement provides the opportunity for the Company to convert the construction loan to a term loan of up to $50.0 million ~~long-term line~~and a revolving term loan of ~~credit. TADE had no outstanding~~up to $20.0 million. The maturity date of the credit agreement is March 2, 2025. During the construction period, borrowings under ~~this line of~~the credit ~~as of December 31, 2017. Borrowings under the lines of credit and the term loan~~agreement bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. Upon conversion of the construction loan to a term loan, the Company will have the option of fixing the interest on portions of the loans, or continuing at the previously described variable interest rates. There are no outstanding borrowings under this agreement as of December 31, 2018. The ~~maturity date is July 1, 2021 for the long-term line of credit. TADE was in compliance with all~~agreements include both financial and non-financial covenants that ELEMENT, among other things, is required at a minimum to maintain various working capital levels and debt service coverage ratios based on project milestones as well as a minimum owner's equity level.

The Andersons Railcar Leasing Company LLC, a consolidated subsidiary of the Company, entered into a new line of credit agreement in the first quarter of 2018 and which was subsequently amended and restated during the third quarter of 2018. The amended agreement provides for a credit facility in the amount of $200 million. The maturity date of the loan agreement is August 2, 2021. Borrowings under the agreement bear interest at market driven, variable interest rates, which are based off LIBOR plus an applicable spread. The agreement includes both financial and non-financial covenants, including maintaining certain leverage and interest coverage ratios, tangible net worth and utilization levels. There are $118.0 million of outstanding borrowings, classified as non-recourse debt, under this agreement as of December 31, ~~2017, including but not limited~~2018, the proceeds of which were used to minimum working capital and net worth. TADE debt is collateralized by the mortgage on the ethanol facility and related equipment or other assets and is not guaranteed by the Company, therefore it is considered non-recourse debt.purchase Rail Group assets.

The Company’s short-term and long-term debt at December 31, ~~2017~~2018 and ~~2016~~2017 consisted of the following:



	December 31,
(in thousands)	2018		2017
Short-term debt - non-recourse	$	—	$	—
Short-term debt - recourse	205,000		22,000
Total short-term debt	$	205,000	$	22,000
Current maturities of long-term debt – non-recourse	$	4,842	$	—
Current maturities of long-term debt – recourse	16,747		54,205
Total current maturities of long-term debt	$	21,589	$	54,205
Long-term debt, less current maturities – non-recourse	$	146,353	$	—
Long-term debt, less current maturities – recourse	349,834		418,339
Total long-term debt, less current maturities	$	496,187	$	418,339

December 31,
(in thousands) 2017 2016
Short-term debt - non-recourse $ —
$ —
Short-term debt - recourse 22,000
29,000
Total short-term debt $ 22,000
$ 29,000
Current maturities of long-term debt – non-recourse $ —
$ —
Current maturities of long-term debt – recourse 54,205
47,545
Total current maturities of long-term debt $ 54,205
$ 47,545
Long-term debt, less current maturities – non-recourse $ —
$ —
Long-term debt, less current maturities – recourse 418,339
397,065
Total long-term debt, less current maturities $ 418,339
$ 397,065

The following information relates to short-term borrowings:



(in thousands, except percentages)	2018			2017			2016
Maximum amount borrowed	$	555,000		$	367,000		$	412,000
Weighted average interest rate	3.32		%	2.56		%	1.94		%

(in thousands, except percentages) 2017 2016 2015
Maximum amount borrowed $ 367,000
$ 412,000
$ 308,500
Weighted average interest rate 2.56 % 1.94 % 1.64 %

Long-Term Debt

Recourse Debt

Long-term debt consists of the following:

December 31,
(in thousands, except percentages) 2017 2016
Note payable, 4.07%, payable at maturity, due 2021 $ 26,000
$ 26,000
Notes payable, 3.72%, paid 2017 —
25,000
Note payable, 4.55%, payable at maturity, due 2023 24,000
24,000
Note payable, 4.85%, payable at maturity, due 2026 25,000
25,000
Note payable, 6.78%, payable at maturity, due 2018 41,500
41,500
Note payable, 4.92%, payable in increasing amounts ($2.2 million for 2017), plus interest, due 2021 (a) 18,241
20,443
Note payable, 4.76%, payable in increasing amounts ($2.1 million for 2017) plus interest, due 2028 (a) 45,936
47,990
Note payable, variable rate (3.86% at December 31, 2017), payable in increasing amounts ($1.4 million for 2017) plus interest, due 2023 (a) 17,786
19,179
Note payable, 3.29%, payable in increasing amounts ($1.3 million for 2017) plus interest, due 2022 (a) 20,293
21,619
Note payable, 4.23%, payable quarterly in varying amounts ($0.7 million for 2017) plus interest, due 2021 (a) 10,479
11,136
Notes payable, variable rate, paid 2017 —
8,790
Note payable, variable rate (3.23% at December 31, 2017), payable in varying amounts ($0.3 million for 2017), plus interest, due 2026 (a) 8,762
9,016
Note payable, 4.76%, payable quarterly in varying amounts ($0.4 million for 2017) plus interest, due 2028 (a) 8,581
8,956
Note payable, 3.03%, payable at maturity, due 2022 100,000
30,000
Note payable, 3.33%, payable in increasing amounts ($1.0 million for 2017) plus interest, due 2025 (a) 25,960
27,000
Note payable, 4.5%, payable at maturity, due 2030 16,000
16,000
Note payable, 5.0%, payable at maturity, due 2040 14,000
14,000
Industrial development revenue bonds:
Note payable, variable rate, paid 2017 —
6,513
   Variable rate (2.97% at December 31, 2017), payable at maturity, due 2024 (a) 14,500
—
   Variable rate (3.33% at December 31, 2017), payable at maturity, due 2019 (a) 4,650
4,650
   Variable rate (3.33% at December 31, 2017), payable at maturity, due 2025 (a) 3,100
3,100
   Variable rate (3.25% at December 31, 2017), payable at maturity, due 2036 21,000
21,000
Debenture bonds, 2.65% to 5.00%, due 2018 through 2032 30,432
36,931
$ 476,220
$ 447,823
Less: current maturities 54,205
47,545
Less: unamortized prepaid debt issuance costs 3,676
3,213
$ 418,339
$ 397,065



	December 31,
(in thousands, except percentages)	2018		2017
Note payable, 4.07%, payable at maturity, due 2021	$	26,000	$	26,000
Note payable, 4.55%, payable at maturity, due 2023	24,000		24,000
Note payable, 4.85%, payable at maturity, due 2026	25,000		25,000
Note payable, 6.78%, payable at maturity, paid 2018	—		41,500
Note payable, 4.92%, payable in increasing amounts ($2.0 million for 2018), plus interest, due 2021 (a)	16,227		18,241
Note payable, 4.76%, payable in increasing amounts ($1.6 million for 2018) plus interest, due 2028 (a)	44,330		45,936
Note payable, variable rate (4.85% at December 31, 2018), payable in increasing amounts ($1.3 million for 2018) plus interest, due 2023 (a)	16,452		17,786
Note payable, 3.29%, payable in increasing amounts ($1.4 million for 2018) plus interest, due 2022 (a)	18,918		20,293
Note payable, 4.23%, payable quarterly in varying amounts ($0.5 million for 2018) plus interest, due 2021 (a)	9,948		10,479
Note payable, variable rate (4.19% at December 31, 2018), payable in varying amounts ($0.3 million for 2018), plus interest, due 2026 (a)	8,417		8,762
Note payable, 4.76%, payable quarterly in varying amounts ($0.3 million for 2018) plus interest, due 2028 (a)	8,288		8,581
Line of credit, variable rate (3.79% at December 31, 2018), payable at maturity, due 2022	50,000		100,000
Note payable, 3.33%, payable in increasing amounts ($1.1 million for 2018) plus interest, due 2025 (a)	24,888		25,960
Note payable, 4.5%, payable at maturity, due 2030	16,000		16,000
Note payable, 5.0%, payable at maturity, due 2040	14,000		14,000
Note payable, variable rate (4.15% at December 31, 2018), payable quarterly, ($1.25 million for 2018) due 2024 (a)	13,250		14,500
Industrial development revenue bonds:
Variable rate (3.19% at December 31, 2018), payable at maturity, due 2019 (a)	4,650		4,650
Variable rate (3.18% at December 31, 2018), payable at maturity, due 2025 (a)	3,100		3,100
Variable rate (3.14% at December 31, 2018), payable at maturity, due 2036	21,000		21,000
Debenture bonds, 2.65% to 5.00%, due 2018 through 2032	27,323		30,432
	$	371,791	$	476,220
Less: current maturities	16,747		54,205
Less: unamortized prepaid debt issuance costs	5,210		3,676
	$	349,834	$	418,339

(a) Debt is collateralized by first mortgages on certain facilities and related equipment or other assets with a book value of ~~$159.9~~$143.8 million

~~The~~As of December 31, 2018, the Company's short-term and long-term borrowing agreements include both financial and non-financial covenants that, among other things, require the Company at a minimum to maintain:

~~tangible net worth of not less than $255 million;~~

~~current ratio net of hedged inventory of not less than 1.25 to 1.00;~~

long-term debt to capitalization of not more than 70%;

working capital of not less than $150 million; and

interest coverage ratio of not less than 2.65 to 1.00.

The Company was in compliance with these financial covenants at and during the years ended December 31, ~~2017~~2018 and ~~2016.~~2017.

The aggregate annual maturities of recourse, long-term debt are as follows: ~~2018 -- $54.6 million;~~ 2019 -- ~~$12.1~~$16.5 million; 2020 -- ~~$20.8~~$15.9 million; 2021 -- ~~$35.6~~$61.8 million; 2022 -- ~~$150.8~~$74.8 million; 2023 -- $41.7 million; and ~~$202.3~~$160.5 million thereafter.

Non-Recourse Debt

The Company's non-recourse long-term debt ~~including the lines~~consists of ~~credit, held by TADE includes separate financial covenants relating solely to the collateralized TADE assets. The covenants require~~ the following:

~~working capital not less than $14~~



	December 31,
(in thousands)	2018		2017
Line of credit, 4.46%, payable at maturity, due 2021	$	118,000	$	—
Non-recourse financing obligations, 3.60% to 4.94%, due 2019 through 2026	34,019		—
	$	152,019	$	—
Less: current maturities	4,842		—
Less: unamortized prepaid debt issuance costs	824		—
	$	146,353	$	—

The aggregate annual maturities of non-recourse, long-term debt are as follows: 2019 -- $4.8 million; 2020 -- $6.9 million; 2021 -- $123.9 million; 2022 -- $9.1 million; 2023 -- $0.9 million; and $6.4 million thereafter.

~~debt service coverage ratio of not less than 1.25 to 1.00.~~

~~The Company was in compliance with these financial covenants at and during the years ended December 31, 2017 and 2016.~~

6. Derivatives

Commodity Contracts

The Company’s operating results are affected by changes to commodity prices. The Grain and Ethanol businesses have established “unhedged” position limits (the amount of a commodity, either owned or contracted for, that does not have an offsetting derivative contract to lock in the price). To reduce the exposure to market price risk on commodities owned and forward grain and ethanol purchase and sale contracts, the Company enters into exchange traded commodity futures and options contracts and over the counter forward and option contracts with various counterparties. These contracts are primarily traded via ~~the~~ regulated ~~CME.~~commodity exchanges. The Company’s forward purchase and sales contracts are for physical delivery of the commodity in a future period. Contracts to purchase commodities from producers generally relate to the current or future crop years for delivery periods quoted by regulated commodity exchanges. Contracts for the sale of commodities to processors or other commercial consumers generally do not extend beyond one year.

All of these contracts meet the definition of derivatives. While the Company considers its commodity contracts to be effective economic hedges, the Company does not designate or account for its commodity contracts as hedges as defined under current accounting standards. The Company accounts for its commodity derivatives at estimated fair value. The estimated fair value of the commodity derivative contracts that require the receipt or posting of cash collateral is recorded on a net basis (offset against cash collateral posted or received, also known as margin deposits) within commodity derivative assets or liabilities. Management determines fair value based on exchange-quoted prices and in the case of its forward purchase and sale contracts, estimated fair value is adjusted for differences in local markets and non-performance risk. For contracts for which physical delivery occurs, balance sheet classification is based on estimated delivery date. For futures, options and over-the-counter contracts in which physical delivery is not expected to occur but, rather, the contract is expected to be net settled, the Company classifies these contracts as current or noncurrent assets or liabilities, as appropriate, based on the Company’s expectations as to when such contracts will be settled.

position, an additional margin deposit, called a maintenance margin, is required. The margin deposit assets and liabilities are included in short-term commodity derivative assets or liabilities, as appropriate, in the Consolidated Balance Sheets.

The following table presents at December 31, ~~2017~~2018 and ~~2016,~~2017, a summary of the estimated fair value of the Company’s commodity derivative instruments that require cash collateral and the associated cash posted/received as collateral. The net asset or liability positions of these derivatives (net of their cash collateral) are determined on a counterparty-by-counterparty basis and are included within current or noncurrent commodity derivative assets (or liabilities) on the Consolidated Balance Sheets:



	December 31, 2018				December 31, 2017
(in thousands)	Net Derivative Asset Position		Net Derivative Liability Position		Net Derivative Asset Position		Net Derivative Liability Position
Collateral paid	$	14,944	$	—	$	1,351	$	—
Fair value of derivatives	22,285		—		17,252		—
Balance at end of period	$	37,229	$	—	$	18,603	$	—

December 31, 2017 December 31, 2016
(in thousands) Net Derivative Asset Position Net Derivative Liability Position Net Derivative Asset Position Net Derivative Liability Position
Collateral paid $ 1,351
$ —
$ 28,273
$ —
Fair value of derivatives 17,252
—
1,599
—
Balance at end of period $ 18,603
$ —
$ 29,872
$ —

The following table presents, on a gross basis, current and noncurrent commodity derivative assets and liabilities:


	December 31, 2017															December 31, 2018
(in thousands)	Commodity Derivative Assets - Current			Commodity Derivative Assets - Noncurrent			Commodity Derivative Liabilities - Current			Commodity Derivative Liabilities - Noncurrent			Total			Commodity Derivative Assets - Current			Commodity Derivative Assets - Noncurrent			Commodity Derivative Liabilities - Current			Commodity Derivative Liabilities - Noncurrent			Total
Commodity derivative assets	$	36,929		$	311		$	489		$	1		$	37,730		$	43,463		$	484		$	706		$	5		$	44,658
Commodity derivative liabilities	(7,578		)	(1		)	(30,140		)	(826		)	(38,545		)	(6,986		)	(4		)	(33,353		)	(894		)	(41,237		)
Cash collateral	1,351			—			—			—			1,351			14,944			—			—			—			14,944
Balance sheet line item totals	$	30,702		$	310		$	(29,651	)	$	(825	)	$	536		$	51,421		$	480		$	(32,647	)	$	(889	)	$	18,365



	December 31, 2017
(in thousands)	Commodity Derivative Assets - Current			Commodity Derivative Assets - Noncurrent			Commodity Derivative Liabilities - Current			Commodity Derivative Liabilities - Noncurrent			Total
Commodity derivative assets	$	36,929		$	311		$	489		$	1		$	37,730
Commodity derivative liabilities	(7,578		)	(1		)	(30,140		)	(826		)	(38,545		)
Cash collateral	1,351			—			—			—			1,351
Balance sheet line item totals	$	30,702		$	310		$	(29,651	)	$	(825	)	$	536

December 31, 2016
(in thousands) Commodity Derivative Assets - Current Commodity Derivative Assets - Noncurrent Commodity Derivative Liabilities - Current Commodity Derivative Liabilities - Noncurrent Total
Commodity derivative assets $ 36,146
$ 140
$ 1,447
$ 6
$ 37,739
Commodity derivative liabilities (18,972 ) (40 ) (24,614 ) (345 ) (43,971 )
Cash collateral 28,273
—
—
—
28,273
Balance sheet line item totals $ 45,447
$ 100
$ (23,167 ) $ (339 ) $ 22,041

The net pre-tax gains on commodity derivatives not designated as hedging instruments included in the Company’s Consolidated Statements of Operations and the line items in which they are located for the years ended December 31, 2018, 2017, ~~2016,~~ and ~~2015~~2016 are as follows:



	Year Ended December 31,
(in thousands)	2018		2017	2016
Gains (Losses) on commodity derivatives included in cost of sales and merchandising revenues	$	4,236	5,417	(15,012	)

Year Ended
December 31,
(in thousands) 2017 2016 2015
Gains (Losses) on commodity derivatives included in cost of sales and merchandising revenues $ 5,417
(15,012 ) 62,541

The Company had the following volume of commodity derivative contracts outstanding (on a gross basis) as of December 31, ~~2017~~2018 and ~~2016:~~2017:


	December 31, 2017				December 31, 2018
Commodity (in thousands)	Number of Bushels	Number of Gallons	Number of Pounds	Number of Tons	Number of Bushels	Number of Gallons	Number of Pounds	Number of Tons
Non-exchange traded:
Corn	218,391			—	250,408			—
Soybeans	18,127	—	—	—	22,463	—	—	—
Wheat	14,577	—	—	—	14,017	—	—	—
Oats	25,953	—	—	—	26,230	—	—	—
Ethanol	—	197,607	—	—	—	244,863	—	—
Corn oil	—	—	6,074	—	—	—	2,920	—
Other	47	—	—	97	494	2,000	—	66
Subtotal	277,095	197,607	6,074	97	313,612	246,863	2,920	66
Exchange traded:
Corn	82,835	—	—	—	130,585	—	—	—
Soybeans	37,170	—	—	—	26,985	—	—	—
Wheat	65,640	—	—	—	33,760	—	—	—
Oats	1,345	—	—	—	1,475	—	—	—
Ethanol	—	39,438	—	—	—	77,112	—	—
Other	—	840	—	—
Subtotal	186,990	40,278	—	—	192,805	77,112	—	—
Total	464,085	237,885	6,074	97	506,417	323,975	2,920	66



	December 31, 2017
Commodity (in thousands)	Number of Bushels	Number of Gallons	Number of Pounds	Number of Tons
Non-exchange traded:
Corn	218,391			—
Soybeans	18,127	—	—	—
Wheat	14,577	—	—	—
Oats	25,953	—	—	—
Ethanol	—	197,607	—	—
Corn oil	—	—	6,074	—
Other	47	—	—	97
Subtotal	277,095	197,607	6,074	97
Exchange traded:
Corn	82,835	—	—	—
Soybeans	37,170	—	—	—
Wheat	65,640	—	—	—
Oats	1,345	—	—	—
Ethanol	—	39,438	—	—
Other	—	840	—	—
Subtotal	186,990	40,278	—	—
Total	464,085	237,885	6,074	97

December 31, 2016
Commodity (in thousands) Number of Bushels Number of Gallons Number of Pounds Number of Tons
Non-exchange traded:
Corn 175,549
—
—
—
Soybeans 20,592
—
—
—
Wheat 7,177
—
—
—
Oats 36,025
—
—
—
Ethanol —
215,081
—
—
Corn oil —
—
9,358
—
Other 108
1,144
—
110
Subtotal 239,451
216,225
9,358
110
Exchange traded:
Corn 63,225
—
—
—
Soybeans 39,005
—
—
—
Wheat 45,360
—
—
—
Oats 4,120
—
—
—
Ethanol —
78,120
—
—
Subtotal 151,710
78,120
—
—
Total 391,161
294,345
9,358
110

Interest Rate and Other Derivatives

The Company periodically enters into interest rate contracts to manage interest rate risk on borrowing or financing activities. While the Company considers all of its interest rate derivative positions to be effective economic hedges of specified risks, these interest rate contracts are recorded on the balance sheet in other current assets or liabilities (if short-term in nature) or in other assets or other long-term liabilities (if non-current in nature) and changes in fair value are recognized currently in earnings as a component of interest expense. The Company also has foreign currency derivatives which are considered effective economic hedges of specified economic risks.

The following table presents the open interest rate contracts at December 31, ~~2017:~~2018:


Interest Rate Hedging Instrument	Year Entered	Year of Maturity	Initial Notional Amount (in millions)		Hedged Item	Interest Rate	Year Entered	Year of Maturity	Initial Notional Amount (in millions)		Hedged Item	Interest Rate
Long-term
Swap	2012	2023	$	23.0	Interest rate component of debt - not accounted for as a hedge	1.9%	2014	2023	$	23.0	Interest rate component of debt - not accounted for as a hedge	1.9%
Collar	2013	2021	40.0		Interest rate component of debt - not accounted for as a hedge	2.9% to 4.8%	2013	2021	$	40.0	Interest rate component of debt - not accounted for as a hedge	2.9% to 4.8%
Total			$	63.0
Swap							2018	2021	$	40.0	Interest rate component of debt - accounted for as cash flow hedge	2.6%
Swap							2018	2021	$	25.0	Interest rate component of debt - accounted for as cash flow hedge	2.5%

Item 9. Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management of the Company, with the participation of its Chief Executive Officer and Chief Financial Officer (its "certifying officers"), as appropriate, to allow timely decisions regarding required disclosure.

Management of the Company, with the participation of its certifying officers, evaluated the effectiveness of the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the evaluation as of December 31, ~~2017,~~2018, the certifying officers have concluded that the Company's disclosure controls and procedures were effective.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the certifying officers, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, management concluded that, as of December 31, ~~2017,~~2018, the Company's internal control over financial reporting was effective.

The effectiveness of the Company's internal control over financial reporting as of December 31, ~~2017~~2018 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included ~~under Item 8 of this Annual Report on Form 10-K.~~below.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal controls over financial reporting during the Company's most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

The Andersons, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of The Andersons, Inc. and subsidiaries (the "Company") as of December 31, ~~2017,~~2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, ~~2017,~~2018, of the Company and our report dated February ~~26, 2018,~~27, 2019, expressed an unqualified opinion on those financial statements based on our audit and the reports of other ~~auditors.~~auditors and included an explanatory paragraph regarding the Company’s change in method of accounting for revenue from contracts with customers in 2018 due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

February ~~26, 2018~~27, 2019

Part III.

Item 10. Directors and Executive Officers of the Registrant

For information with respect to the executive officers of the registrant, see “Executive Officers of the Registrant” included in Part I of this report. For information with respect to the Directors of the registrant, see “Election of Directors” in the Proxy Statement for the Annual Meeting of the Shareholders to be held on May ~~11, 2018~~10, 2019 (the “Proxy Statement”), which is incorporated herein by reference; for information concerning 1934 Securities and Exchange Act Section 16(a) Compliance, see such section in the Proxy Statement, incorporated herein by reference.

Item 11. Executive Compensation

The information set forth under the caption “Executive Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information set forth under the caption “Share Ownership” and “Executive Compensation - Equity Compensation Plan Information” in the Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

The information set forth under the caption “Review, Approval or Ratification of Transactions with Related Persons” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information set forth under “Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement is incorporated herein by reference.

Part IV.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K




(a) (1)			The Consolidated Financial Statements of the Company are set forth under Item 8 of this report on Form 10-K.

(2	)		The following consolidated financial statement schedule is included in Item 15(d):	Page

		II.	Consolidated Valuation and Qualifying Accounts - years ended December 31, 2018, 2017 ~~2016~~ and ~~2015~~2016	9698

All other schedules for which provisions are made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted.




(3	)		Exhibits:

		2.1	Agreement and Plan of Merger among The Andersons, Inc., Brisket Merger Sub 1, LLC, Brisket Merger Sub 2, LLC, Brisket Merger Sub 3, LLC, LGC Group, Inc. and Lansing Trade Group, LLC, dated October 15, 2018. (filled herewithin) (Incorporated by reference to Form 8-K filed October 15, 2018)

		2.2	First Amendment to and Waiver under that certain Agreement and Plan of Merger, dated December 20, 2018. (filled herewithin) (Certain exhibits to the agreement have been omitted. The Company will furnish such exhibits to the SEC upon request.

		2.3	Second Amendment to and Waiver under Agreement and Plan of Merger, dated December 28, 2018. (Certain exhibits to the agreement have been omitted. The Company will furnish such exhibits to the SEC upon request.

		3.1		Articles of Incorporation. (Incorporated by reference to Exhibit 3(d) to Registration Statement No. 33-16936).

		3.2		Code of Regulations of The Andersons, Inc. (Incorporated by reference to Exhibit 3.4 to Registration Statement No. 33-58963).

		3.3		Amended Article Fourth (a) of the Amended and Restated Articles of Incorporation of the Corporation (Incorporated by reference to DEF 14A filed March 15, 2016).

		3.4		Amendments to Articles of Incorporation or Bylaws (Incorporated by reference to Form 8-K filed July ~~19,~~24, 2017).

		4.1		Form of Indenture dated as of October 1, 1985, between The Andersons, Inc. and Ohio Citizens Bank, as Trustee (Incorporated by reference to Exhibit 4 (a) in Registration Statement No. 33-819).	Pursuant to regulation S-K Item 601(b)(4)(iii), the Company will furnish document to the SEC upon request.

		4.2		Specimen Common Share Certificate. (Incorporated by reference to Exhibit 4.1 to Registration Statement No. 33-58963).

		4.3		Form of Indenture dated June 28, 2012, between The Andersons, Inc. and Huntington National Bank, as Trustee (Incorporated by reference to Exhibit 4.1 in Registration Statement No. 333-182428).

		~~10.10~~10.10*		The Andersons, Inc. 2004 Employee Share Purchase Plan * (Incorporated by reference to Appendix B to the Proxy Statement for the May 13, 2004 Annual Meeting).

		10.11		~~Note Purchase Agreement,~~ Cargill Lease and Sublease dated ~~March 27, 2008, between The Andersons, Inc., as borrowers, and several purchases with Wells Fargo Capital Markets acting as agent (Incorporated by reference from Form 8-K filed March 27, 2008).~~	June 1, 2008. (filled herewithin)

		10.12		Amended and Restated Note Purchase Agreement, dated February 26, 2010, between The Andersons, Inc., as borrower, and Co-Bank, one of the lenders to the original agreement (Incorporated by reference from Form 8-K filed March 5, 2010).

		~~10.13~~		Second Amended and Restated Marketing Agreement between The Andersons, Inc. and Cargill, Incorporated dated June 1, 2013. (The exhibits to the Marketing Agreement have been omitted. The Company will furnish such exhibits to the SEC upon request.)

		~~10.14~~		First Amendment to Lease and Sublease between Cargill, Incorporated and The Andersons, Inc. dated June 1, 2013. (Incorporated by reference to Form 10-K filed February 28, 2014).

		~~10.15~~10.13*		~~Form of Performance Share Unit Agreement. (Incorporated by reference to Form 10-K filed March 2, 2015).~~

		~~10.16~~		~~Form of Restricted Share Award Agreement. (Incorporated by reference to Form 10-K filed March 2, 2015).~~



		~~10.17~~		Fifth Amended and Restated Loan Agreement, dated March 4, 2014, between The Andersons, Inc., as borrower, and several banks with U.S. Bank National Association acting as agent and lender. (Incorporated by reference to Form 10-Q filed May 9, 2014).

		~~10.19~~		The Andersons, Inc. 2014 Long-Term Incentive Compensation Plan effective May 2, 2014 * (Incorporated by reference to Appendix C to the Proxy Statement for the May 2, 2014 Annual Meeting).

		~~10.20~~10.14*		~~Form of Performance Share Unit Agreement. (Incorporated by reference to Form 10-Q filed May 8, 2015).~~

		~~10.21~~		~~Form of Restricted Share Award Agreement. (Incorporated by reference to Form 10-Q filed May 8, 2015).~~

		~~10.22~~		~~Form of Restricted Share Award - Cliff Vesting Agreement. (Incorporated by reference to Form 10-Q filed May 8, 2015).~~

		~~10.23~~		Employment Agreement between The Andersons, Inc. and Patrick E. Bowe (Incorporated by reference to Form ~~8-K~~10-Q filed November 5, 2015).



~~10.24~~10.15*		Form of Performance Share Unit Agreement - Total Shareholder Return. (Incorporated by reference to Form 10-Q filed May 10, 2016).

~~10.25~~10.16*		Form of Performance Share Unit Agreement - Earnings Per Share. (Incorporated by reference to Form 10-Q filed May 10, 2016).

~~10.26~~10.17*		Form of Restricted Share Award Agreement. (Incorporated by reference to Form 10-Q filed May 10, 2016).

~~10.27~~10.18*		Form of Restricted Share Award - Non-Employee Directors Agreement. (Incorporated by reference to Form 10-Q filed May 10, 2016).

~~10.28~~	10.19	Sixth Amended and Restated Loan Agreement, dated April 13, 2017, between The Andersons, Inc., as borrower, and several banks with U.S. Bank National Association acting as agent and lender. (Incorporated by reference to Form 8-K filed April 17, 2017).

~~10.29~~10.20*		Form of Performance Share Unit Agreement - Total Shareholder Return. (Incorporated by reference to Form 10-Q filed May 5, 2017).

~~10.30~~10.21*		Form of Performance Share Unit Agreement - Earnings Per Share. (Incorporated by reference to Form 10-Q filed May 5, 2017).

~~10.31~~10.22*		Form of Restricted Share Award Agreement. (Incorporated by reference to Form 10-Q filed May 5, 2017).

~~10.32~~10.23*		Form of Restricted Share Award - Non-Employee Directors Agreement. (Incorporated by reference to Form 10-Q filed May 5, 2017).

10.24*	Management Performance Program. (Incorporated by reference to Form 10-K filed February 26, 2018)

10.25	Form of Change in Control and Severance Participation Agreement. (Incorporated by reference to Form 10-K filed February 26, 2018)

10.26	Change in Control and Severance Policy. (Incorporated by reference to Form 10-K filed February 26, 2018)

10.27	Subscription Agreement between ICM, Inc. and The Andersons Ethanol LLC to form ELEMENT LLC dated March 2, 2018 (Incorporated by reference to Form 10-Q filed March 7, 2018)

10.28*	Form of Performance Share Unit Agreement - Earnings Per Share (Incorporated by reference to Form 10-Q filed May 8, 2018)

10.29*	Form of Performance Share Unit Agreement - Total Shareholder Return (Incorporated by reference to Form 10-Q filed May 8, 2018)

10.30*	Form of Restricted Share Award (Incorporated by reference to Form 10-Q filed May 8, 2018)

10.31*	Form of Restricted Share Award - Non-Employee Directors Agreement (Incorporated by reference to Form 8-K filed May 8, 2018)

10.32	Marketing Agreement between The Andersons, Inc. and Cargill, Incorporated (Incorporated by reference to Form 8-K filed June 28, 2018)

10.33		~~Management Performance Program. (filed herewith).~~	Second Amendment to Lease and Sublease between Cargill, Incorporated and The Andersons, Inc. (Incorporated by reference to Form 8-K filed June 28, 2018)

10.34		Amended and Restated Revolving Asset Based Loan Agreement, dated August 2, 2018, between The Andersons Railcar Leasing Company LLC, as borrower, and The Andersons Railcar Company LLC, as guarantor, with PNC Bank, National Association. (Incorporated by reference to Form ~~of Change in Control and Severance Participation Agreement (filed herewith).~~	8-K filed August 7, 2018.)

~~10.35~~10.35*		~~Change in Control~~ The Andersons, Inc. Lansing Acquisition 2018 Inducement and ~~Severance Policy (filed herewith).~~	Retention Plan dated December 21, 2018 (Incorporated by reference to Form S-8 filed December 21, 2018.)

10.36*	Inducement and Retention Restricted Stock Award Agreement (Incorporated by reference to Form S-8 filed December 21, 2018.)
12		~~Computation of Ratio of Earnings to Fixed Charges (filed herewith).~~
10.37*	Employment Agreement between The Andersons, Inc. and William E. Krueger Incorporated by reference to Form 8-K filed January 2, 2019)



10.38	Credit Agreement, dated January 11, 2019, between The Andersons, Inc., as borrower, and several banks with U.S. Bank National Association acting as Lead Agent. (Incorporated by reference to Form 8-K filed January 11, 2019)

21		Consolidated Subsidiaries of The Andersons, Inc (filed herewith).

23.1		Consent of Independent Registered Public Accounting Firm - Deloitte & Touche LLP (filed herewith).

23.2		Consent of Independent Registered Public Accounting Firm - KPMG LLP (filed herewith).

23.3	Consent of Independent Registered Public Accounting Firm - KPMG LLP (filed herewith).

23.4	Consent of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP - Canada (filed herewith).

~~23.4~~	23.5	Consent of Independent Registered Public Accounting Firm - Crowe ~~Chizek~~ LLP (filed herewith).



		31.1		Certification of the Chief Executive Officer under Rule 13(a)-14(a)/15d-14(a) (filed herewith).

		31.2		Certification of the Chief Financial Officer under Rule 13(a)-14(a)/15d-14(a) (filed herewith).

		32.1		Certifications Pursuant to 18 U.S.C. Section 1350 (filed herewith).

		101		Financial statements from the annual report on Form 10-K of The Andersons, Inc. for the year ended December 31, ~~2017,~~2018, formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Equity, (v) the Consolidated Statement of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

* Management contract or compensatory plan.




(b)		Exhibits:

		The exhibits listed in Item 15(a)(3) of this report, and not incorporated by reference, follow "Financial Statement Schedule" referred to in (c) below.

(c)		Financial Statement Schedule

		The financial statement schedule listed in 15(a)(2) follows "Signatures."

Item 16. Form 10-K Summary

Not applicable

THE ANDERSONS, INC.

SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS


(in thousands)			Additions											Additions
Allowance for doubtful accounts receivable - Year ended December 31,	Balance at beginning of period		Charged to costs and expenses		Transferred from (to) allowance for accounts / notes receivable		(1) Deductions			Balance at end of period		Balance at beginning of period		Charged to costs and expenses		Transferred from (to) allowance for accounts / notes receivable		(1) Deductions			Balance at end of period
2018												$	9,156	$	542	$	—	$	(1,373	)	$	8,325
2017	$	7,706	$	3,000	$	—	$	(1,550	)	$	9,156	7,706		3,000		—		(1,550		)	9,156
2016	6,938		1,191		—		(423		)	7,706		6,938		1,191		—		(423		)	7,706
2015	4,644		3,302		—		(1,008		)	6,938

(1) Uncollectible accounts written off, net of recoveries and adjustments to estimates for the allowance accounts.

THE ANDERSONS, INC.

EXHIBIT INDEX




No.		Description

~~10.33~~2.2		~~Annual Incentive~~First Amendment to and Waiver under that certain Agreement and Plan of Merger, dated December 20, 2018. (Certain exhibits to the agreement have been omitted. The Company will furnish such exhibits to the SEC upon request..

~~10.34~~2.3		~~Change in Control~~Second Amendment to and ~~Severance Policy Participation~~Waiver under Agreement and Plan of Merger, dated December 28, 2018. (Certain exhibits to the agreement have been omitted. The Company will furnish such exhibits to the SEC upon request..

~~10.35~~10.11		~~Change in Control~~Cargill Lease and ~~Severance Policy~~Sublease dated June 1, 2008..

12		~~Computation of Ratio of Earnings to Fixed Charges.~~

21		Consolidated Subsidiaries of The Andersons, Inc.

23.1		Consent of Independent Registered Public Accounting Firm.

23.2		Consent of Independent Registered Public Accounting Firm.

23.3		Consent of Independent Registered Public Accounting Firm.

23.4		Consent of Independent Registered Public Accounting Firm.

23.5		Consent of Independent Registered Public Accounting Firm.

31.1		Certification of the Chairman and 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		Financial Statements from the annual report on Form 10-K of The Andersons, Inc. for the year ended December 31, ~~2017,~~2018, formatted in XBRL: (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Equity, (v) the Consolidated Statement of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		THE ANDERSONS, INC. (Registrant)

Date: February ~~26, 2018~~27, 2019		By /s/ Patrick E. Bowe
		Patrick E. Bowe
		Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



Signature	Title	Date	Signature	Title	Date
/s/ Patrick E. Bowe	Chief Executive Officer	2/~~26/2018~~27/2019	/s/ Catherine M. Kilbane	Director	2/27/2019
Patrick E. Bowe	(Principal Executive Officer)		Catherine M. Kilbane

/s/ Brian A. Valentine	Senior Vice President and Chief Financial Officer	2/27/2019	/s/ Ross W. Manire	Director	2/~~26/2018~~27/2019
~~Patrick E. Bowe~~Brian A. Valentine	(Principal ~~Executive~~Financial Officer)		Ross W. Manire

/s/ ~~John J. Granato~~Michael T. Hoelter	~~Chief Financial Officer~~	~~2/26/2018~~	~~/s/ Donald L. Mennel~~	~~Director~~	~~2/26/2018~~
~~John J. Granato~~	~~(Principal Financial Officer)~~		~~Donald L. Mennel~~

~~/s/ Anne G. Rex~~	~~Vice President,~~ Corporate Controller	2/~~26/2018~~27/2019	/s/ Patrick S. Mullin	Director	2/~~26/2018~~27/2019
~~Anne G. Rex~~Michael T. Hoelter	(Principal Accounting Officer)		Patrick S. Mullin

/s/ Michael J. Anderson	Chairman	2/~~26/2018~~27/2019	/s/ John T. Stout, Jr.	Director	2/~~26/2018~~27/2019
Michael J. Anderson			John T. Stout, Jr.

/s/ Gerard M. Anderson	Director	2/~~26/2018~~27/2019	/s/ Jacqueline F. Woods	Director	2/~~26/2018~~27/2019
Gerard M. Anderson			Jacqueline F. Woods

/s/ ~~Catherine M. Kilbane~~Stephen F. Dowdle	Director	2/~~26/2018~~27/2019	/s/ Robert J. King, Jr.	Director	2/~~26/2018~~27/2019
~~Catherine M. Kilbane~~Stephen F. Dowdle			Robert J. King, Jr.

98100



OHIO		34-1562374
(State of incorporation or organization)		(I.R.S. Employer Identification No.)



1947 Briarfield Boulevard, Maumee, Ohio		43537
(Address of principal executive offices)		(Zip Code)



Large accelerated filer	ý	Accelerated Filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨



	Page No.
PART I.	3
Item 1. Business	3
Item 1A. Risk Factors	7
Item 1B. Unresolved Staff Comments	12
Item 2. Properties	12
Item 3. Legal Proceedings	13
Item 4. Mine Safety	13
PART II.	1415
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters	1415
Item 6. Selected Financial Data	18
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	2019
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	3533
Item 8. Financial Statements and Supplementary Data	3634
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	9091
Item 9A. Controls and Procedures	9091
PART III.	9294
Item 10. Directors and Executive Officers of the Registrant	9294
Item 11. Executive Compensation	9294
Item 12. Security Ownership of Certain Beneficial Owners and Management	9294
Item 13. Certain Relationships and Related Transactions	9294
Item 14. Principal Accountant Fees and Services	9294
PART IV.	9395
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K	9395
Item 16. Form 10-K Summary	9597
Exhibits	9799
Signatures	9799


Name	Position	Age	Year Assumed	Position	Age	Year Assumed

Jeffrey C. Blair	President, Plant Nutrient Group Vice President of Sales (Intrepid Potash, Inc) Director of Potash Sales (Intrepid Potash, Inc) Commercial Director - Sales and Account Management (Orica Mining Services)	45	2017 2016 2013 2011	President, Plant Nutrient Group Vice President of Sales (Intrepid Potash, Inc) Director of Potash Sales (Intrepid Potash, Inc)	46	2017 2016 2013
Valerie M. Blanchett	Vice President, Human Resources Vice President, Human Resources, Food Ingredients and Systems (Cargill)	56	2016 2010	Vice President, Human Resources Vice President, Human Resources, Food Ingredients and Systems (Cargill)	57	2016 2010
Patrick E. Bowe	President and Chief Executive Officer Corporate Vice President, Food Ingredients and Systems (Cargill)	59	2015 2007	President and Chief Executive Officer Corporate Vice President, Food Ingredients and Systems (Cargill)	60	2015 2007
Naran U. Burchinow	Senior Vice President, General Counsel and Secretary	64	2005	Senior Vice President, General Counsel and Secretary	65	2005
Srikanth R. Dasari	Vice President, Treasurer Treasurer (Westinghouse Electric Company) Head of Treasury Front Office (Dow Corning)	47	2017 2016 2010	Vice President, Treasurer Treasurer (Westinghouse Electric Company) Head of Treasury Front Office (Dow Corning)	48	2017 2016 2010
Tamara S. Goetz	Vice President, Financial Planning & Analysis Vice President, Corporate Business /Financial Analysis	49	2015 2007
John J. Granato	Chief Financial Officer	52	2012
Michael T. Hoelter				Corporate Controller Assistant Corporate Controller Grain Group Controller Financial Reporting Manager	36	2019 2017 2015 2013
Michael S. Irmen	President, Ethanol Group Vice President and General Manager, Ethanol Group Vice President, Commodities and Risk, Ethanol Group	64	2016 2015 2012	President, Ethanol Group Vice President and General Manager, Ethanol Group Vice President, Commodities and Risk, Ethanol Group	65	2016 2015 2012
Corbett J. Jorgenson	President, Grain Group Vice President, Americas, Corporate Transportation (Cargill) Vice President, Commercial Lead, AgHorizons USA (Cargill)	43	2016 2015 2013	President, Andersons Trade Group Vice President, Americas, Corporate Transportation (Cargill) Vice President, Commercial Lead, AgHorizons USA (Cargill)	44	2016 2015 2013
William E. Krueger				President, Andersons Trade Group President and Chief Executive Officer, Lansing Trade Group, LLC	52	2018 1995
Anthony A. Lombardi	Chief Information Officer Vice President, Global Business Services and Chief Information Officer (Armstrong World Industries)	59	2016 2010	Chief Information Officer Vice President, Global Business Services and Chief Information Officer (Armstrong World Industries)	60	2016 2010
Joseph E. McNeely	President, Rail Group President and Chief Executive Officer (FreightCar America, Inc.) Vice President Finance, Chief Financial Officer and Treasurer (FreightCar America, Inc.)	53	2017 2013 2010	President, Rail Group President and Chief Executive Officer (FreightCar America, Inc.)	54	2017 2013
Anne G. Rex	Vice President, Corporate Controller	53	2012	Vice President, Strategy, Planning and Development Vice President, Corporate Controller	54	2019 2012
Rasesh H. Shah	Senior Director - Rail President, Rail Group	63	2017 1999
Brian A. Valentine				Senior Vice President and Chief Financial Officer Corporate Vice President and Chief Financial Officer (The Lubrizol Corporation)	50	2018 2011



ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	2017		2016
	High	Low	High	Low
Quarter Ended
March 31	$43.30	$36.75	$32.24	$24.01
June 30	$38.80	$32.20	$36.46	$25.94
September 30	$34.65	$31.00	$38.30	$34.40
December 31	$37.45	$29.85	$44.80	$34.50



Payment Date		Amount
~~1/25/2016~~		~~$0.1550~~
~~4/22/2016~~		~~$0.1550~~
~~7/22/2016~~		~~$0.1550~~
~~10/24/2016~~		~~$0.1550~~
1/24/2017		$0.1600
4/24/2017		$0.1600
7/24/2017		$0.1600
10/23/2017		$0.1600
1/23/2018		$0.1650
4/23/2018		$0.1650
7/23/2018		$0.1650
10/22/2018		$0.1650
1/23/2019		$0.1700


	Equity Compensation Plan Information				Equity Compensation Plan Information
Plan category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	1,010,984 ⁽¹⁾	$	34.93	668,213 ⁽²⁾	1,036,971 ⁽¹⁾	$	35.32	461,078 ⁽²⁾
Equity compensation plans not approved by security holders(3)	—	—		—	—	—		—


(2)	This number includes ~~95,918~~51,414 Common Shares available to be purchased under the Employee Share Purchase Plan and ~~572,295~~409,664 shares available under equity compensation plans.



~~Agrium, Inc.~~Archer-Daniels-Midland Co.	~~Ingredion Incorporated~~Nutrien
~~Archer-Daniels-Midland Co.~~GATX Corp.	The Greenbrier Companies, Inc.
~~GATX Corp.~~Green Plains, Inc.	The Scott's Miracle-Gro Company
~~Green Plains, Inc.~~Ingredion Incorporated


	Base Period		Cumulative Returns										Base Period		Cumulative Returns
	December 31, 2012		2013		2014		2015		2016		2017		December 31, 2013		2014		2015		2016		2017		2018
The Andersons, Inc.	$	100.00	$	210.05	$	189.34	$	114.54	$	164.80	$	117.05	$	100.00	$	90.14	$	54.53	$	78.46	$	55.73	$	54.54
NASDAQ U.S.	100.00		140.12		160.78		171.97		187.22		242.71		100.00		114.75		122.74		133.62		173.22		168.30
Peer Group Index	100.00		130.57		154.68		130.65		168.04		174.20

New Peer Group Index													100.00		116.12		85.61		106.95		113.84		105.18
Former Peer Group Index													100.00		118.47		100.07		128.70		133.42		122.62


(in thousands, except for per share and ratios and other data)	For the years ended December 31,											For the years ended December 31,
	2017		2016		2015			2014		2013		2018		2017		2016		2015			2014
Operating results
Sales and merchandising revenues (a)	$	3,686,345	$	3,924,790	$	4,198,495		$	4,540,071	$	5,604,574	$	3,045,382	$	3,686,345	$	3,924,790	$	4,198,495		$	4,540,071
Gross profit	318,799		345,506		375,838			397,139		365,225		302,005		318,799		345,506		375,838			397,139
Equity in earnings of affiliates	16,723		9,721		31,924			96,523		68,705		27,141		16,723		9,721		31,924			96,523
Other income, net (b)	23,444		14,775		46,472			31,125		14,876		16,002		22,507		12,473		46,472			31,125
Net income (loss)	42,609		14,470		(11,322		)	122,645		95,702		41,225		42,609		14,470		(11,322		)	122,645
Net income (loss) attributable to The Andersons, Inc.	42,511		11,594		(13,067		)	109,726		89,939		41,484		42,511		11,594		(13,067		)	109,726
EBITDA (c)	87,356		123,949		85,219			254,992		219,917		171,560		87,356		123,949		85,219			254,992


Financial position
Total assets	2,162,354		2,232,849		2,359,101		2,364,692		2,273,556		2,392,003		2,162,354		2,232,849		2,359,101		2,364,692
Working capital	260,495		258,350		241,485		226,741		229,451		189,848		260,495		258,350		241,485		226,741
Long-term debt (d)	418,339		397,065		436,208		298,638		371,150
Long-term debt, recourse (d)											349,834		418,339		397,065		436,208		298,638
Long-term debt, non-recourse (d)	—		—		—		—		4,063		146,353		—		—		—		—
Total equity	822,899		790,697		783,739		824,049		724,421		876,764		822,899		790,697		783,739		824,049

Cash flows / liquidity
Cash flows from (used in) operations	75,285		39,585		154,134		(10,071	)	337,188		(35,519	)	75,285		39,585		154,134		(10,071	)
Depreciation and amortization	86,412		84,325		78,456		62,005		55,307		90,297		86,412		84,325		78,456		62,005
Cash invested in acquisitions (e)	(3,507	)	—		(128,549	)	(20,037	)	(15,252	)	(2,248	)	(3,507	)	—		(128,549	)	(20,037	)
Purchase of investments ~~(f)~~	(5,679	)	(2,523	)	(938	)	(238	)	(49,251	)	(1,086	)	(5,679	)	(2,523	)	(938	)	(238	)
Investments in property, plant and equipment and capitalized software	(34,602	)	(77,740	)	(72,469	)	(59,675	)	(46,786	)	(142,579	)	(34,602	)	(77,740	)	(72,469	)	(59,675	)
Net proceeds from (investment in) Rail Group assets ~~(g)~~(f)	(106,124	)	(28,579	)	(38,407	)	(57,968	)	4,648		(87,566	)	(106,124	)	(28,579	)	(38,407	)	(57,968	)

Per share data ~~(h)~~(g)
Net income (loss) - basic	1.51		0.41		(0.46	)	3.85		3.20		1.47		1.51		0.41		(0.46	)	3.85
Net income (loss) - diluted	1.50		0.41		(0.46	)	3.84		3.18		1.46		1.50		0.41		(0.46	)	3.84
Dividends declared	0.6450		0.6250		0.5750		0.4700		0.4300		0.6650		0.6450		0.6250		0.5750		0.4700
Year-end market value	31.15		44.70		31.63		53.14		59.45		29.89		31.15		44.70		31.63		53.14

Ratios and other data
Net income attributable to The Andersons, Inc. return on beginning equity attributable to The Andersons, Inc.	5.5	%	1.5	%	(1.6	)%	15.6	%	15.1	%
Net income (loss) attributable to The Andersons, Inc. return on beginning equity attributable to The Andersons, Inc.											5.1	%	5.5	%	1.5	%	(1.6	)%	15.6	%
Funded long-term debt to equity ratio ~~(i)~~(h)	0.5-to-1		0.5-to-1		0.6-to-1		0.4-to-1		0.5-to-1		0.6-to-1		0.5-to-1		0.5-to-1		0.6-to-1		0.4-to-1
Weighted average shares outstanding (000's)	28,126		28,193		28,288		28,367		27,986		28,258		28,126		28,193		28,288		28,367
Effective tax rate	307.6	%	32.3	%	2.1	%	33.4	%	36.0	%	22.5	%	307.6	%	32.3	%	2.1	%	33.4	%


	Twelve months ended December 31,		Twelve months ended December 31,
(in thousands)	2017	2016	2018	2017
Ethanol (gallons)	411,087	295,573	451,306	411,087
E-85 (gallons)	47,676	37,709	61,382	47,676
Corn Oil (pounds)	17,959	14,794	20,348	17,959
DDG (tons)	162	164	158	162


	Payments Due by Period										Payments Due by Period
(in thousands)	Less than 1 year		1-3 years		3-5 years		After 5 years		Total		Less than 1 year		1-3 years		3-5 years		After 5 years		Total
Long-term debt	$	54,336	$	32,400	$	186,295	$	202,357	$	475,388
Long-term debt, recourse											$	21,331	$	208,606	$	126,493	$	166,820	$	523,250
Long-term debt, non-recourse											4,829		130,859		9,961		6,370		152,019
Interest obligations (a)	17,632		32,219		24,840		46,623		121,314		18,131		38,816		20,289		38,190		115,426
Operating leases (b)	24,031		30,507		17,764		13,268		85,570		16,973		21,842		10,010		8,372		57,197
Purchase commitments (c)	758,966		59,370		—		—		818,336		967,417		132,855		—		—		1,100,272
Other long-term liabilities (d)	2,445		4,983		5,102		16,542		29,072		3,317		6,711		6,804		24,695		41,527
Construction commitment (e)											70,263		—		—		—		70,263
Total contractual cash obligations	$	857,410	$	159,479	$	234,001	$	278,790	$	1,529,680	$	1,102,261	$	539,689	$	173,557	$	244,447	$	2,059,954



Method of Control	Financial Statement	Units
Owned - railcars available for sale	On balance sheet – current	~~533~~373
Owned - railcar assets leased to others	On balance sheet – non-current	~~17,025~~20,552
Railcars leased from financial intermediaries	Off balance sheet	~~3,375~~2,271
Railcars in non-recourse arrangements	Off balance sheet	~~2,556~~254
Total Railcars		~~23,489~~23,450
Locomotive assets leased to others	On balance sheet – non-current	3224
Locomotive assets leased from financial intermediaries	Off balance sheet	4
Total Locomotive Assets		3628
~~Barge assets leased to others~~	~~On balance sheet – non-current~~	—
Barge assets leased from financial intermediaries	Off balance sheet	6515
Total Barges		6515



	December 31, 2017				December 31, 2016
(in thousands)	Net Derivative Asset Position		Net Derivative Liability Position		Net Derivative Asset Position		Net Derivative Liability Position
Collateral paid	$	1,351	$	—	$	28,273	$	—
Fair value of derivatives	17,252		—		1,599		—
Balance at end of period	$	18,603	$	—	$	29,872	$	—


(in thousands)	Pension Benefits						Postretirement Benefits						Pension Benefits						Postretirement Benefits
Change in benefit obligation	2017			2016			2017			2016			2018			2017			2018			2017
Benefit obligation at beginning of year	$	7,112		$	8,677		$	29,757		$	39,152		$	5,832		$	7,112		$	22,602		$	29,757
Service cost	—			—			391			760			—			—			319			391
Interest cost	155			194			985			1,549			130			155			752			985
Actuarial (gains) losses	(245		)	(421		)	(7,903		)	(10,823		)	(282		)	(245		)	(1,623		)	(7,903		)
Participant contributions	—			—			463			653			—			—			145			463
Retiree drug subsidy received	—			—			184			5			—			—			125			184
Benefits paid	(1,190		)	(1,338		)	(1,275		)	(1,539		)	(1,318		)	(1,190		)	(1,682		)	(1,275		)
Benefit obligation at end of year	$	5,832		$	7,112		$	22,602		$	29,757		$	4,362		$	5,832		$	20,638		$	22,602



(in thousands)	Pension		Postretirement			Total
Prior service cost	$	—	$	(455	)	$	(455	)
Net actuarial loss	252		—			252



Year	Expected Pension Benefit Payout		Expected Postretirement Benefit Payout
2019	$	1,516	$	1,161
2020	1,262		1,185
2021	1,011		1,203
2022	210		1,225
2023	220		1,240
2024-2028	418		6,364


(a)	The calculated rate for the unfunded employee retirement plan was ~~2.50%~~3.20%, 2.50% and 2.40% in 2018, 2017 and ~~2.60% in 2017,~~ 2016, ~~and 2015,~~ respectively. Since it was terminated in 2015, the defined benefit pension plan did not have a discount rate ~~in 2015, 2016 or 2017.~~during the three-year period presented above.



Assumed Health Care Cost Trend Rates at Beginning of Year
	2018		2017
Health care cost trend rate assumed for next year	3.0	%	3.0	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) (a)	N/A		N/A
Year that the rate reaches the ultimate trend rate (a)	N/A		N/A


(a)	In 2017, the Company's remaining uncapped participants were converted to a Medicare Exchange Health Reimbursement Arrangement, which put a 2% cap on the Company's share of the related costs.



(in thousands)	For the Year ended December 31, 2018
Revenues under ASC 606	$	898,885
Revenues under ASC 840	105,631
Revenues under ASC 815	2,040,866
Total Revenues	$	3,045,382



	Twelve months ended December 31, 2018
(in thousands)	Grain		Ethanol		Plant Nutrient		Rail		Total
Specialty nutrients	$	—	$	—	$	260,821	$	—	$	260,821
Primary nutrients	—		—		399,566		—		399,566
Services	14,666		10,786		4,411		35,179		65,042
Co-products	—		114,489		—		—		114,489
Other	1,035		—		25,738		32,194		58,967
Total	$	15,701	$	125,275	$	690,536	$	67,373	$	898,885



(in thousands)	Contract liabilities
Balance at January 1, 2018	$	25,520
Balance at December 31, 2018	28,858



	Balance Sheet
	December 31, 2018
(in thousands)	As Reported		ASC 606 Impact			Pro forma as if the previous accounting guidance was in effect
Cash and cash equivalents and restricted cash	$	22,593	$	—		$	22,593
Accounts receivable, net	207,285		—			207,285
Inventories	690,804		74			690,878
Commodity derivative assets - current	51,421		—			51,421
Other current assets	51,095		(114		)	50,981
Other noncurrent assets	370,309		—			370,309
Rail Group assets leased to others, net	521,785		(22,709		)	499,076
Property, plant and equipment, net	476,711		—			476,711
Total assets	2,392,003		(22,749		)	2,369,254
Short-term debt and current maturities of long-term debt	226,589		(4,842		)	221,747
Trade and other payables and accrued expenses and other current liabilities	541,581		—			541,581
Commodity derivative liabilities - current	32,647		—			32,647
Customer prepayments and deferred revenue	32,533		—			32,533
Commodity derivative liabilities - noncurrent and Other long-term liabilities	33,073		—			33,073
Employee benefit plan obligations	22,542		—			22,542
Long-term debt, less current maturities	496,187		(29,177		)	467,010
Deferred income taxes	130,087		3,492			133,579
Total liabilities	1,515,239		(30,527		)	1,484,712
Retained earnings	647,517		7,778			655,295
Common shares, additional paid-in-capital, treasury shares, accumulated other comprehensive loss and noncontrolling interests	229,247		—			229,247
Total equity	876,764		7,778			884,542
Total liabilities and equity	$	2,392,003	$	(22,749	)	$	2,369,254



	Statement of Operations
	December 31, 2018
(in thousands)	As Reported			ASC 606 Impact			Pro forma as if the previous accounting guidance was in effect
Sales and merchandising revenues	$	3,045,382		$	701,437		$	3,746,819
Cost of sales and merchandising revenues	2,743,377			703,358			3,446,735
Gross profit	302,005			(1,921		)	$	300,084
Operating, administrative and general expenses	257,872			—			$	257,872
Asset impairment	6,272			—			$	6,272
Interest expense	27,848			(1,563		)	$	26,285
Other income:
Equity in earnings of affiliates, net	27,141			—			$	27,141
Other income, net	16,002			—			$	16,002
Income (loss) before income taxes	53,156			(358		)	$	52,798
Income tax provision	11,931			(89		)	$	11,842
Net income (loss)	41,225			(269		)	$	40,956
Net income attributable to the noncontrolling interests	(259		)	—			$	(259	)
Net income (loss) attributable to The Andersons, Inc.	$	41,484		$	(269	)	$	41,215



(in thousands)
Balance at January 1, 2016	$	1,431
Additions based on tax positions related to the current year	113
Additions based on tax positions related to prior years	—
Reductions based on tax positions related to prior years	(40		)
Reductions as a result of a lapse in statute of limitations	(52		)
Balance at December 31, 2016	1,452

Additions based on tax positions related to the current year	—
Reductions based on tax positions related to prior years	(92		)
Reductions as a result of a lapse in statute of limitations	(573		)
Balance at December 31, 2017	787

Additions based on tax positions related to the current year	—
Additions based on tax positions related to prior years	—
Reductions based on tax positions related to prior years	—
Reductions as a result of a lapse in statute of limitations	(169		)
Balance at December 31, 2018	$	618



~~(in thousands)~~
~~Balance at January 1, 2015~~	$	~~1,487~~
~~Additions based on tax positions related to the current year~~	55
~~Additions based on tax positions related to prior years~~	~~691~~
~~Reductions based on tax positions related to prior years~~	~~(518~~		)
~~Reductions as a result of a lapse in statute of limitations~~	~~(284~~		)
~~Balance at December 31, 2015~~	~~1,431~~

~~Additions based on tax positions related to the current year~~	~~113~~
~~Reductions based on tax positions related to prior years~~	~~(40~~		)
~~Reductions as a result of a lapse in statute of limitations~~	~~(52~~		)
~~Balance at December 31, 2016~~	~~1,452~~

~~Additions based on tax positions related to the current year~~	—
~~Additions based on tax positions related to prior years~~	—
~~Reductions based on tax positions related to prior years~~	~~(92~~		)
~~Reductions as a result of a lapse in statute of limitations~~	~~(573~~		)
~~Balance at December 31, 2017~~	$	~~787~~

																													Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
														For the Year Ended December 31, 2018
	(in thousands)	Foreign Currency Translation Adjustments			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total			(in thousands)	Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments			Investment in Convertible Preferred Securities			Defined Benefit Plan Items			Total
Beginning Balance	Beginning Balance	$	(11,002	)	$	—	$	(1,466	)	$	(12,468	)	Beginning Balance	$	—		$	(7,716	)	$	344		$	4,672		$	(2,700	)
	Other comprehensive income before reclassifications	3,286			344		6,485			10,115			Other comprehensive income before reclassifications	(284		)	(3,834		)	(86		)	1,031			(3,173		)
	Amounts reclassified from accumulated other comprehensive loss	—			—		(347		)	(347		)	Amounts reclassified from accumulated other comprehensive loss	158			—			—			(672		)	(514		)
Net current-period other comprehensive income	Net current-period other comprehensive income	3,286			344		6,138			9,768			Net current-period other comprehensive income	(126		)	(3,834		)	(86		)	359			(3,687		)
Ending balance	Ending balance	$	(7,716	)	$	344	$	4,672		$	(2,700	)	Ending balance	$	(126	)	$	(11,550	)	$	258		$	5,031		$	(6,387	)

																														Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
		For the Year Ended December 31, 2016																For the Year Ended December 31, 2017
	(in thousands)	Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments			Investment in Debt Securities			Defined Benefit Plan Items			Total			(in thousands)		Foreign Currency Translation Adjustments			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total
Beginning Balance	Beginning Balance	$	(111	)	$	(12,041	)	$	126		$	(8,913	)	$	(20,939	)	Beginning Balance		$	(11,002	)	$	—	$	(1,466	)	$	(12,468	)
	Other comprehensive income before reclassifications	111			1,039			—			7,668			$	8,818		Other comprehensive income before reclassifications		3,286			344		6,485			$	10,115
	Amounts reclassified from accumulated other comprehensive loss	—			—			(126		)	(221		)	$	(347	)	Amounts reclassified from accumulated other comprehensive loss		—			—		(347		)	$	(347	)
Net current-period other comprehensive income	Net current-period other comprehensive income	111			1,039			(126		)	7,447			8,471			Net current-period other comprehensive income		3,286			344		6,138			9,768
Ending balance	Ending balance	$	—		$	(11,002	)	$	—		$	(1,466	)	$	(12,468	)	Ending balance		$	(7,716	)	$	344	$	4,672		$	(2,700	)

																																Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
		For the Year Ended December 31, 2015															For the Year Ended December 31, 2016
	(in thousands)	Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments			Investment in Debt Securities		Defined Benefit Plan Items			Total			(in thousands)	Losses on Cash Flow Hedges			Foreign Currency Translation Adjustments			Investment in Convertible Preferred Securities			Defined Benefit Plan Items			Total
Beginning Balance	Beginning Balance	$	(364	)	$	(4,709	)	$	126	$	(49,648	)	$	(54,595	)	Beginning Balance	$	(111	)	$	(12,041	)	$	126		$	(8,913	)	$	(20,939	)
	Other comprehensive income before reclassifications	253			(7,332		)	—		(24,746		)	$	(31,825	)	Other comprehensive income before reclassifications	111			1,039			—			7,668			$	8,818
	Amounts reclassified from accumulated other comprehensive loss	—			—			—		65,481			$	65,481		Amounts reclassified from accumulated other comprehensive loss	—			—			(126		)	(221		)	$	(347	)
Net current-period other comprehensive income	Net current-period other comprehensive income	253			(7,332		)	—		40,735			33,656			Net current-period other comprehensive income	111			1,039			(126		)	7,447			8,471
Ending balance	Ending balance	$	(111	)	$	(12,041	)	$	126	$	(8,913	)	$	(20,939	)	Ending balance	$	—		$	(11,002	)	$	—		$	(1,466	)	$	(12,468	)



Reclassifications Out of Accumulated Other Comprehensive Income (a)
(in thousands)	For the Year Ended December 31, 2018
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statement Where Net Income Is Presented
Defined Benefit Plan Items
Amortization of prior-service cost	$	(910	)	(b)
	(910		)	Total before tax
	238			Income tax benefit
	$	(672	)	Net of tax

Cash Flow Hedges
Interest payments	$	214		(b)
	214			Total before tax
	(56		)	Tax expense
	$	158		Net of tax

Total reclassifications for the period	$	(514	)	Net of tax