UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended ~~June 30, 2019~~March 31, 2020



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

For the transition period from to .

Commission file number 000-20557

THE ANDERSONS, INC.

(Exact name of the registrant as specified in its charter)



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)

(419) 893-5050

(Telephone Number)

~~(Former name, former address and former fiscal year, if changed since last report.)~~



Securities registered pursuant to Section 12(b) of the Act:
Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common stock, $0.00 par value, $0.01 stated value	ANDE	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ~~(232.405~~(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such ~~files.~~ files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	ý	Accelerated Filer	☐
Non-accelerated filer	¨ ☐	Smaller reporting company	☐
		Emerging growth company	¨	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

The registrant had approximately ~~32.6~~32.9 million common shares outstanding at ~~July 26, 2019.~~April 24, 2020.

~~Securities registered pursuant to Section 12(b) of the Act:~~



~~Title of each class:~~	~~Trading Symbol~~	~~Name of each exchange on which registered:~~
~~Common stock, $0.00 par value, $0.01 stated value~~	~~ANDE~~	~~The NASDAQ Stock Market LLC~~

THE ANDERSONS, INC.

INDEX



	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets – ~~June 30, 2019,~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018~~March 31, 2019	3
Condensed Consolidated Statements of Operations – Three ~~and Six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~	5
Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss – Three ~~and Six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~	6
Condensed Consolidated Statements of Cash Flows – ~~Six~~Three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~	7
Condensed Consolidated Statements of Equity – Three ~~and Six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~	8
Notes to Condensed Consolidated Financial Statements	109
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3329
Item 3. Quantitative and Qualitative Disclosures about Market Risk	4336
Item 4. Controls and Procedures	4336
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	4437
Item 1A. Risk Factors	4437
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4437
Item 4. Mine Safety Disclosure	4438
Item 6. Exhibits	4538

Part I. Financial Information

Item 1. Financial Statements

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

	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	11,087	$	22,593	$	58,611
Cash, cash equivalents and restricted cash							$	19,693	$	54,895	$	29,991
Accounts receivable, net	712,294		207,285		218,476		539,671		536,367		611,290
Inventories (Note 2)	753,641		690,804		495,611
Commodity derivative assets – current (Note 5)	233,015		51,421		54,259
Inventories (Note 2)							1,028,076		1,170,536		1,026,465
Commodity derivative assets – current (Note 5)							149,070		107,863		158,277
Other current assets	58,439		50,703		42,648		85,372		75,681		60,586
Assets held for sale	151		392		9,816
Total current assets	1,768,627		1,023,198		879,421		1,821,882		1,945,342		1,886,609
Other assets:
Commodity derivative assets – noncurrent (Note 5)	6,161		480		1,008
Goodwill	135,872		6,024		6,024		135,360		135,360		119,641
Other intangible assets, net	188,818		99,138		105,289		167,398		175,312		206,572
Right of use assets, net	74,073		—		—		62,182		76,401		85,766
Equity method investments							22,910		23,857		121,781
Other assets, net	21,841		22,341		26,888		24,305		21,753		30,449
Equity method investments	120,929		242,326		232,159
	547,694		370,309		371,368
Rail Group assets leased to others, net (Note 3)	559,711		521,785		458,424
Property, plant and equipment, net (Note 3)	695,827		476,711		408,575
Total other assets							412,155		432,683		564,209
Rail Group assets leased to others, net (Note 3)							597,069		584,298		537,629
Property, plant and equipment, net (Note 3)							921,585		938,418		671,805
Total assets	$	3,571,859	$	2,392,003	$	2,117,788	$	3,752,691	$	3,900,741	$	3,660,252

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

	June 30, 2019			December 31, 2018			June 30, 2018			March 31, 2020			December 31, 2019			March 31, 2019
Liabilities and equity
Current liabilities:
Short-term debt (Note 4)	$	426,125		$	205,000		$	185,000
Short-term debt (Note 4)										$	392,450		$	147,031		$	434,304
Trade and other payables	527,250			462,535			282,221			553,416			873,081			590,258
Customer prepayments and deferred revenue	49,761			32,533			16,103			121,148			133,585			148,345
Commodity derivative liabilities – current (Note 5)	69,369			32,647			85,160
Commodity derivative liabilities – current (Note 5)										90,491			46,942			66,623
Current maturities of long-term debt (Note 4)										80,758			62,899			55,160
Accrued expenses and other current liabilities	165,383			79,046			74,512			147,225			176,381			151,648
Current maturities of long-term debt (Note 4)	66,678			21,589			13,700
Total current liabilities	1,304,566			833,350			656,696			1,385,488			1,439,919			1,446,338
Long-term lease liabilities	48,401			—			—			43,308			51,091			57,451
Long-term debt, less current maturities (Note 4)										987,526			1,016,248			982,025
Deferred income taxes										156,804			146,155			138,598
Other long-term liabilities	18,398			32,184			30,325			65,703			51,673			37,554
Commodity derivative liabilities – noncurrent (Note 5)	3,985			889			3,202
Employee benefit plan obligations	22,019			22,542			26,131
Long-term debt, less current maturities (Note 4)	1,007,012			496,187			435,580
Deferred income taxes	146,839			130,087			118,864
Total liabilities	2,551,220			1,515,239			1,270,798			2,638,829			2,705,086			2,661,966
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 13)
Shareholders’ equity:
Common shares, without par value (63,000 shares authorized; 33,357 shares issued at 6/30/2019, 29,430 shares issued at 12/31/2018 and 6/30/2018)	137			96			96
Common shares, without par value (63,000 shares authorized; 33,550 shares issued at 3/31/2020, 12/31/2019 and 3/31/2019)										137			137			137
Preferred shares, without par value (1,000 shares authorized; none issued)	—			—			—			—			—			—
Additional paid-in-capital	331,186			224,396			223,259			341,382			345,359			324,753
Treasury shares, at cost (173, 936 and 943 shares at 6/30/2019, 12/31/2018 and 6/30/2018, respectively)	(6,449		)	(35,300		)	(35,561		)
Treasury shares, at cost (21, 207 and 193 shares at 3/31/2020, 12/31/2019 and 3/31/2019, respectively)										(652		)	(7,342		)	(7,216		)
Accumulated other comprehensive income (loss)	(6,241		)	(6,387		)	(5,347		)	(27,649		)	(7,231		)	2,474
Retained earnings	651,481			647,517			635,438			599,039			642,687			627,136
Total shareholders’ equity of The Andersons, Inc.	970,114			830,322			817,885			912,257			973,610			947,284
Noncontrolling interests	50,525			46,442			29,105			201,605			222,045			51,002
Total equity	1,020,639			876,764			846,990			1,113,862			1,195,655			998,286
Total liabilities and equity	$	3,571,859		$	2,392,003		$	2,117,788		$	3,752,691		$	3,900,741		$	3,660,252

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)(In thousands, except per share data)

Three months ended June 30, Six months ended June 30,
2019 2018 2019 2018
Sales and merchandising revenues $ 2,325,041
$ 911,402
$ 4,301,833
$ 1,547,141
Cost of sales and merchandising revenues 2,164,313
820,928
4,031,441
1,392,962
Gross profit 160,728
90,474
270,392
154,179
Operating, administrative and general expenses 106,918
59,853
220,267
124,110
Asset impairment 3,081
6,272
3,081
6,272
Interest expense 15,727
7,825
31,637
14,824
Other income:
Equity in earnings (loss) of affiliates, net (157 ) 9,803
1,362
13,376
Other income (loss), net 5,563
2,828
4,049
4,514
Income (loss) before income taxes 40,408
29,155
20,818
26,863
Income tax provision (benefit) 10,997
7,742
5,555
7,432
Net income (loss) 29,411
21,413
15,263
19,431
Net income (loss) attributable to the noncontrolling interests (477 ) (116 ) (632 ) (398 )
Net income (loss) attributable to The Andersons, Inc. $ 29,888
$ 21,529
$ 15,895
$ 19,829
Per common share:
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $ 0.92
$ 0.76
$ 0.49
$ 0.70
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $ 0.91
$ 0.76
$ 0.48
$ 0.70



	Three months ended March 31,
	2020			2019
Sales and merchandising revenues	$	1,853,105		$	1,976,792
Cost of sales and merchandising revenues	1,789,975			1,867,128
Gross profit	63,130			109,664
Operating, administrative and general expenses	105,060			113,349
Interest expense, net	15,587			15,910
Other income, net:
Equity in earnings of affiliates, net	129			1,519
Other income (loss), net	4,813			(1,514		)
Loss before income taxes	(52,575		)	(19,590		)
Income tax benefit	(1,464		)	(5,442		)
Net loss	(51,111		)	(14,148		)
Net loss attributable to the noncontrolling interests	(13,449		)	(155		)
Net loss attributable to The Andersons, Inc.	$	(37,662	)	$	(13,993	)
Per common share:
Basic loss attributable to The Andersons, Inc. common shareholders	$	(1.15	)	$	(0.43	)
Diluted loss attributable to The Andersons, Inc. common shareholders	$	(1.15	)	$	(0.43	)

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)(In thousands)

Three months ended June 30, Six months ended June 30,
2019 2018 2019 2018
Net income (loss) $ 29,411
$ 21,413
$ 15,263
$ 19,431
Other comprehensive income (loss), net of tax:
Change in fair value of convertible preferred securities (net of income tax of $0, $0, $0 and $(87)) —
—
—
(87 )
Change in unrecognized actuarial loss and prior service cost (net of income tax of $(250), $(86), $(293) and $(101)) (728 ) (287 ) (854 ) (338 )
Cash flow hedge activity (net of income tax of $(1,974), $17, $(3,175) and $17) (5,952 ) 51
(9,574 ) 51
Foreign currency translation adjustments (net of income tax of $0, $0, $0 and $0) (2,035 ) (1,123 ) 10,574
(2,273 )
Other comprehensive income (loss) (8,715 ) (1,359 ) 146
(2,647 )
Comprehensive income (loss) 20,696
20,054
15,409
16,784
Comprehensive income (loss) attributable to the noncontrolling interests (477 ) (116 ) (632 ) (398 )
Comprehensive income (loss) attributable to The Andersons, Inc. $ 21,173
$ 20,170
$ 16,041
$ 17,182



	Three months ended March 31,
	2020			2019
Net loss	$	(51,111	)	$	(14,148	)
Other comprehensive income (loss), net of tax:
Change in unrecognized actuarial loss and prior service cost (net of income tax of $26 and $43)	(116		)	(126		)
Cash flow hedge activity (net of income tax of $4,519 and $1,201)	(13,663		)	(3,622		)
Foreign currency translation adjustments (net of income tax of $0 for both periods)	(6,639		)	12,609
Other comprehensive income (loss)	(20,418		)	8,861
Comprehensive loss	(71,529		)	(5,287		)
Comprehensive loss attributable to the noncontrolling interests	(13,449		)	(155		)
Comprehensive loss attributable to The Andersons, Inc.	$	(58,080	)	$	(5,132	)

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)(In thousands)


	Six months ended June 30,						Three months ended March 31,
	2019			2018			2020			2019
Operating Activities
Net income (loss)	$	15,263		$	19,431
Net loss							$	(51,111	)	$	(14,148	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization	64,146			45,232			46,898			33,760
Bad debt expense (recovery)	1,703			(837		)
Equity in (earnings) losses of affiliates, net of dividends	(1,034		)	(11,192		)
Bad debt expense							4,310			318
Equity in earnings of affiliates, net of dividends							(129		)	(1,465		)
Gains on sales of Rail Group assets and related leases	(1,298		)	(3,989		)	(645		)	(736		)
Loss (gain) on sales of assets	106			(342		)
Stock-based compensation expense	7,292			3,006			2,880			4,799
Deferred federal income tax	5,793			—			16,474			(5,640		)
Asset impairment	3,081			6,272
Inventory write down							10,571			—
Other	1,102			(138		)	4,001			4,528
Changes in operating assets and liabilities:
Accounts receivable	(181,917		)	(33,859		)	(11,737		)	(79,295		)
Inventories	394,630			151,095			122,323			124,741
Commodity derivatives	(82,933		)	34,850			1,231			(9,149		)
Other assets	27,420			17,552			(10,887		)	11,337
Payables and other accrued expenses	(338,201		)	(271,010		)	(362,609		)	(191,095		)
Net cash provided by (used in) operating activities	(84,847		)	(43,929		)
Net cash used in operating activities							(228,430		)	(122,045		)
Investing Activities
Acquisition of business, net of cash acquired	(147,693		)	—			—			(147,343		)
Purchases of Rail Group assets	(43,435		)	(68,087		)	(13,270		)	(15,873		)
Proceeds from sale of Rail Group assets	7,389			40,967			2,405			1,948
Purchases of property, plant and equipment and capitalized software	(87,209		)	(54,300		)	(19,307		)	(44,728		)
Proceeds from sale of assets	795			34,981			36			400
Purchase of investments	(1,240		)	—			(280		)	(240		)
Net cash provided by (used in) investing activities	(271,393		)	(46,439		)
Net cash used in investing activities							(30,416		)	(205,836		)
Financing Activities
Net change in short-term borrowings	(660		)	163,000			251,712			9,942
Proceeds from issuance of long-term debt	748,099			50,000			90,736			693,761
Payments of long-term debt	(390,528		)	(110,150		)	(104,913		)	(361,067		)
Proceeds from noncontrolling interest owner	4,715			21,806
Contributions by noncontrolling interest owner							3,307			4,715
Distributions to noncontrolling interest owner							(10,298		)	—
Payments of debt issuance costs	(5,788		)	(787		)	(250		)	(5,788		)
Dividends paid	(11,041		)	(9,312		)	(5,723		)	(5,515		)
Other	(387		)	(497		)	(994		)	2
Net cash provided by (used in) financing activities	344,410			114,060
Effect of exchange rates on cash and cash equivalents	324			—
Increase (Decrease) in cash and cash equivalents	(11,506		)	23,692
Cash and cash equivalents at beginning of period	22,593			34,919
Cash and cash equivalents at end of period	$	11,087		$	58,611
Net cash provided by financing activities							223,577			336,050
Effect of exchange rates on cash, cash equivalents and restricted cash							67			(771		)
Increase (Decrease) in cash, cash equivalents and restricted cash							(35,202		)	7,398
Cash, cash equivalents and restricted cash at beginning of period							54,895			22,593
Cash, cash equivalents and restricted cash at end of period							$	19,693		$	29,991

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc.

Condensed Consolidated Statements of Equity

(Unaudited)(In thousands, except per share data)

Three Months Ended

Common
Shares

Additional
Paid-in
Capital

Treasury
Shares

Accumulated
Other
Comprehensive Income
(Loss)

Retained
Earnings

Noncontrolling
Interests
Total
Balance at March 31, 2018 $ 96
$ 221,990
$ (36,028 ) $ (3,988 ) $ 618,572
$ 22,115
$ 822,757
Net income (loss) 21,529
(116 ) 21,413
Other comprehensive income (loss) (1,359 ) (1,359 )
Cash received from noncontrolling interest 7,106
7,106
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (12 shares) 1,269
467
1,736
Dividends declared ($0.165 per common share) (4,663 ) (4,663 )
Balance at June 30, 2018 $ 96
$ 223,259
$ (35,561 ) $ (5,347 ) $ 635,438
$ 29,105
$ 846,990

Balance at March 31, 2019 $ 137
$ 324,753
$ (7,216 ) $ 2,474
$ 627,136
$ 51,002
$ 998,286
Net income (loss) 29,888
(477 ) 29,411
Other comprehensive income (loss) (8,544 ) (8,544 )
Amounts reclassified from accumulated other comprehensive loss (171 ) (171 )
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (20 shares) 1,738
754
2,492
Dividends declared ($0.170 per common share) (5,530 ) (5,530 )
Stock award purchase price accounting adjustment 4,695
4,695
Restricted share award dividend equivalents 13
(13 ) —
Balance at June 30, 2019 $ 137
$ 331,186
$ (6,449 ) $ (6,241 ) $ 651,481
$ 50,525
$ 1,020,639

Six Months Ended

Common
Shares

Additional
Paid-in
Capital

Treasury
Shares

Accumulated
Other
Comprehensive Income
(Loss)

Retained
Earnings

Noncontrolling
Interests
Total
Balance at December 31, 2017 $ 96
$ 224,622
$ (40,312 ) $ (2,700 ) $ 633,496
$ 7,697
$ 822,899
Net income (loss) 19,829
(398 ) 19,431
Other comprehensive income (loss) (2,647 ) (2,647 )
Cash received from noncontrolling interest 21,806
21,806
Adoption of accounting standard, net of income tax of $2,869 (8,441 ) (8,441 )
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (120 shares) (1,363 ) 4,631
3,268
Dividends declared ($0.33 per common share) (9,326 ) (9,326 )
Restricted share award dividend equivalents

120
(120 ) —
Balance at June 30, 2018 $ 96
$ 223,259
$ (35,561 ) $ (5,347 ) $ 635,438
$ 29,105
$ 846,990

Balance at December 31, 2018 $ 96
$ 224,396
$ (35,300 ) $ (6,387 ) $ 647,517
$ 46,442
$ 876,764
Net income (loss) 15,895
(632 ) 15,263
Other comprehensive income (loss) (11,314 ) (11,314 )
Amounts reclassified from accumulated other comprehensive loss 11,460
11,460
Cash received from noncontrolling interest 4,715
4,715
Adoption of accounting standard, net of income tax of ($237) (711 ) (711 )
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (764 shares) (21,018 ) 28,698
7,680
Dividends declared ($0.34 per common share) (11,059 ) (11,059 )
Stock awards granted due to acquisition 41
127,800
127,841
Restricted share award dividend equivalents 8
153
(161 ) —
Balance at June 30, 2019 $ 137
$ 331,186
$ (6,449 ) $ (6,241 ) $ 651,481
$ 50,525
$ 1,020,639



	Three Months Ended
	Common Shares		Additional Paid-in Capital			Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Noncontrolling Interests			Total
Balance at December 31, 2018	$	96	$	224,396		$	(35,300	)	$	(6,387	)	$	647,517		$	46,442		$	876,764
Net loss												(13,993		)	(155		)	(14,148		)
Other comprehensive loss									(2,770		)							(2,770		)
Amounts reclassified from accumulated other comprehensive loss									11,631									11,631
Contributions received from noncontrolling interest															4,715			4,715
Adoption of accounting standard, net of income tax of ($237)												(711		)				(711		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (740 shares)			(22,756		)	27,944												5,188
Dividends declared ($0.17 per common share)												(5,529		)				(5,529		)
Shares issued for acquisition	41		123,105															123,146
Restricted share award dividend equivalents			8			140						(148		)				—
Balance at March 31, 2019	$	137	$	324,753		$	(7,216	)	$	2,474		$	627,136		$	51,002		$	998,286

Balance at December 31, 2019	$	137	$	345,359		$	(7,342	)	$	(7,231	)	$	642,687		$	222,045		$	1,195,655
Net loss												(37,662		)	(13,449		)	(51,111		)
Other comprehensive loss									(20,974		)							(20,974		)
Amounts reclassified from accumulated other comprehensive loss									556									556
Contributions from noncontrolling interest															3,307			3,307
Distributions to noncontrolling interest															(10,298		)	(10,298		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (181 shares)			(3,977		)	6,452												2,475
Dividends declared ($0.175 per common share)												(5,748		)				(5,748		)
Restricted share award dividend equivalents						238						(238		)				—
Balance at March 31, 2020	$	137	$	341,382		$	(652	)	$	(27,649	)	$	599,039		$	201,605		$	1,113,862

See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation and Consolidation

These Condensed Consolidated Financial Statements include the accounts of The Andersons, Inc. and its wholly owned and controlled subsidiaries (the “Company”)., its majority-owned subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. The portion of these entities that is not owned by the Company is presented as non-controlling interest. 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 and recurring items considered necessary for the fair presentation of the results of operations, financial position, and cash flows for the periods indicated have been made. The results in these Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2019.~~2020. An unaudited Condensed Consolidated Balance Sheet as of ~~June 30, 2018~~March 31, 2019 has been included as the Company operates in several seasonal industries.

The Condensed Consolidated Balance Sheet data at December 31, ~~2018~~2019 was derived from the audited Consolidated Financial Statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in The Andersons, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the ~~“2018~~“2019 Form 10-K”).

~~New~~Recently Adopted Accounting ~~Standards~~Guidance

~~Leasing~~

~~In February 2016, the~~Measurement of Credit Losses on Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") (No. 2016-02, Leases (ASC 842). The FASB issued subsequent amendments to the initial guidance in July 2018 with ASU 2018-10 and in August 2018 with ASU 2018-11. 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. Effective January 1, 2019, the Company adopted the standard using the Comparative Under ASC 840 method, which requires lease assets and liabilities to be recognized in the 2019 balance sheet and statement of equity and forgo the comparative reporting requirements under the modified retrospective transition method. The Company also made an accounting policy election to keep short-term leases less than twelve months off the balance sheet for all classes of underlying assets, as well as elected to use the practical expedient that allows the combination of lease and non-leasecontract components in all of its underlying asset categories. In addition, the Company elected to apply the package of practical expedients that allows entities to forego reassessing at the transition date: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether unamortized initial direct costs for existing leases meet the definition of initial direct costs under the new guidance. See Note 14 for additional information.

~~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, 2019. We have evaluated the impact 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 do so at this time.

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. The Company adopted this standard in the current year which did not have a material impact on its financial statements or disclosures.~~Instruments

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial ~~Instruments.~~Instruments. The FASB issued subsequent amendments to the initial guidance in November 2018, April 2019 and May 2019 with ASU 2018-19, ASU 2019-04 and ASU 2019-05, respectively. 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. Effective January 1, 2020, we adopted ASU 2016-13 using the modified retrospective transition method. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, and off-balance sheet credit exposures. The ~~Company has not historically incurred significant~~amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The impact of adopting this new standard on the Condensed Consolidated Financial Statements was not material.

Cloud Computing Software

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and ~~does not currently anticipate circumstances that would lead to a CECL approach differing from the Company's existing allowance estimates~~Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a ~~material manner.~~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, ~~2019~~2019. The adoption of this standard effective January 1, 2020 on the consolidated financial statements is not material.

Reference Rate Reform (Topic 848)

In March 2020, the FASB concluded its reference rate reform project and issued ASU 2020-04, Reference Rate Reform (Topic 848). London Interbank Offered Rate (LIBOR) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. At the end of 2021, banks will no longer be required to report information that is used to determine LIBOR. As a result, LIBOR could be discontinued. Other interest rates used globally could also be discontinued for similar reasons. The ASU provides companies with ~~a cumulative-effect adjustment~~optional guidance to ~~retained earnings~~ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The Company has elected to adopt ASU 2020-04 immediately for all optional expedients provided for contract modification accounting as permissible under the standard. The impact of executing the standard should the need arise will be disclosed, however, at this time there has been no impact to our consolidated financial statements.

Recent Accounting Guidance Issued Not Yet Effective

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The provisions of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The impact of ~~the year of adoption. Early adoption~~this update on our consolidated financial statements is ~~permitted, but~~currently being assessed. At this time the Company does not plan to ~~do so.~~early adopt the standard.

2. Inventories

Major classes of inventories are as follows:


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Grain and other agricultural products	$	603,318	$	527,471	$	385,118	$	750,281	$	907,482	$	812,361
Frac sand and propane	9,287		—		—		5,723		15,438		8,172
Ethanol and co-products	26,185		11,918		22,828		87,706		95,432		16,302
Plant nutrients and cob products	109,156		145,693		82,230		178,028		146,164		183,886
Railcar repair parts	5,695		5,722		5,435		6,338		6,020		5,744
	$	753,641	$	690,804	$	495,611
Total Inventories							$	1,028,076	$	1,170,536	$	1,026,465

Inventories on the Condensed Consolidated Balance Sheets ~~at June 30, 2019, and June 30, 2018,~~ do not include ~~1.3~~3.9 million, 6.4 million and ~~0.1~~1.9 million bushels of grain ~~respectively, held in storage for others. Grain inventories~~ held in storage for others ~~were de minimis~~ as of March 31, 2020, December 31, ~~2018.~~2019 and March 31, 2019, respectively. 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.

In the first quarter of 2020, the Company recorded a $10.6 million lower of cost or net realizable value charge related to lower ethanol market prices and decreased demand as a result of the COVID-19 pandemic.

3. Property, Plant and Equipment

The components of Property, plant and equipment, net are as follows:


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Land	$	39,241	$	29,739	$	29,579	$	40,336	$	40,442	$	39,552
Land improvements and leasehold improvements	84,127		68,826		68,384		95,327		103,148		82,681
Buildings and storage facilities	327,418		284,998		280,226		381,258		373,961		337,631
Machinery and equipment	514,030		393,640		377,202		861,812		835,156		481,454
Construction in progress	164,532		102,394		37,456		41,824		59,993		151,895
	1,129,348		879,597		792,847		1,420,557		1,412,700		1,093,213
Less: accumulated depreciation	433,521		402,886		384,272		498,972		474,282		421,408
	$	695,827	$	476,711	$	408,575
Property, plant and equipment, net							$	921,585	$	938,418	$	671,805

Depreciation expense on property, plant and equipment was ~~$32.7~~$31.0 million and ~~$23.2 million for the six months ended June 30, 2019 and 2018, respectively. Additionally, depreciation expense on property, plant and equipment was $15.0 million and $11.5~~$17.9 million for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

In the second quarter of 2019, the Company recorded a $3.1 million impairment charge related to its remaining Tennessee facilities in the Trade group. The Company wrote down the value of these assets to the extent their carrying values exceeded their 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.

Rail Group Assets

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


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Rail Group assets leased to others	$	688,320	$	640,349	$	564,555	$	740,809	$	723,004	$	660,747
Less: accumulated depreciation	128,609		118,564		106,131		143,740		138,706		123,118
	$	559,711	$	521,785	$	458,424
Rail Group assets, net							$	597,069	$	584,298	$	537,629

Depreciation expense on Rail Group assets leased to others amounted to ~~$13.7~~$7.7 million and ~~$12.2 million for the six months ended June 30, 2019 and 2018, respectively. Additionally, depreciation expense on Rail Group assets leased to others amounted to $7.0 million and $6.0~~$6.7 million for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

4. Debt

Short-term and long-term debt at ~~June 30, 2019~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018~~March 31, 2019 consisted of the following:


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Short-term Debt – Non-Recourse ~~(a)~~	$	75,476	$	—	$	—	$	83,791	$	54,029	$	97,304
Short-term Debt – Recourse	350,649		205,000		185,000		308,659		93,002		337,000
Total Short-term Debt	$	426,125	$	205,000	$	185,000	$	392,450	$	147,031	$	434,304

Current Maturities of Long-term Debt – Non-Recourse ~~(b)~~	$	8,903	$	4,842	$	2,922	$	5,212	$	9,545	$	7,793
Current Maturities of Long-term Debt – Recourse ~~(c)~~	40,785		16,747		10,778		75,546		53,354		47,367
Finance lease liability (d)	16,990		—		—
Total Current Maturities of Long-term Debt	$	66,678	$	21,589	$	13,700	$	80,758	$	62,899	$	55,160

Long-term Debt, Less: Current Maturities – Non-Recourse (b)	$	198,560	$	146,353	$	72,290
Long-term Debt, Less: Current Maturities – Recourse (c)	786,512		349,834		363,290
Finance lease liability (d)	21,940		—		—
Long-term Debt, Less: Current Maturities – Non-Recourse							$	329,462	$	330,251	$	177,955
Long-term Debt, Less: Current Maturities – Recourse							658,064		685,997		804,070
Total Long-term Debt, Less: Current Maturities	$	1,007,012	$	496,187	$	435,580	$	987,526	$	1,016,248	$	982,025

(a) In conjunction with the recent acquisition, the Company assumed Thompsons' revolving line of credit and a term loan with a syndicate of banks, which are non-recourse to the Company. The credit agreement provides the Company with a maximum availability of $183.4 million and had $107.9 million available for borrowing on this line of credit as of ~~June 30, 2019~~. Any borrowings under the line of credit bear interest at variable rates, which are based on LIBOR or Bankers’ Acceptances plus an applicable spread. The maturity date for the revolving line of credit is June 26, 2023.

(b) In conjunction with the recent acquisition, the Company also assumed a term loan with a syndicate of banks. The term loan had a balance of $33.9 million at June 30, 2019. Interest rates for the term loans are based on LIBOR plus an applicable spread. Payments of $0.6 million are made on a quarterly basis.

(c) On January 11, 2019 the Company entered into 5-year term loan in the amount of $250 million and a 7-year term loan of $250 million. A portion of the term loans were used to pay down debt assumed in the LTG acquisition. Interest rates are based on LIBOR plus an applicable spread. Payments on the term loans will be made on a quarterly basis. As of June 30, 2019, $6.3 million has been paid on the 5-year term loan and $6.3 million has been paid on the 7-year term loan.

(d) See Note 14, Leases, for additional information. June 30, 2019 balances include the former build-to-suit lease that was reclassed from other current liabilities and other long-term liabilities as a result of the new lease standard.

The total borrowing capacity of the Company's lines of credit at ~~June 30, 2019~~March 31, 2020 was ~~$1,628.4~~$1,684.0 million of which the Company had a total of ~~$1,006.1~~$1,006.4 million available for borrowing under its lines of ~~credit, subject to certain limitations based on debt covenants.~~credit. The Company's borrowing capacity is reduced by a combination of outstanding borrowings and letters of credit. The Company is in compliance with all financial covenants as of ~~June 30, 2019.~~March 31, 2020.

5. Derivatives

The Company’s operating results are affected by changes to commodity prices. The Trade 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 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 regulated

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. Most contracts for the sale of commodities to processors or other commercial consumers generally do not extend beyond one year.

Most 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 primarily 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.

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.

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 future, option 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 future, 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 margin deposit assets and liabilities are included in short-term commodity derivative assets or liabilities, as appropriate, in the Condensed Consolidated Balance Sheets.

The following table presents at ~~June 30, 2019,~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018,~~March 31, 2019, 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 Condensed Consolidated Balance Sheets:


	June 30, 2019					December 31, 2018				June 30, 2018					March 31, 2020				December 31, 2019					March 31, 2019
(in thousands)	Net derivative asset position			Net derivative liability position		Net derivative asset position		Net derivative liability position		Net derivative asset position			Net derivative liability position		Net derivative asset position		Net derivative liability position		Net derivative asset position			Net derivative liability position		Net derivative asset position		Net derivative liability position
Collateral paid (received)	$	109,346		$	—	$	14,944	$	—	$	(52,888	)	$	—
Cash collateral paid															$	22,855	$	—	$	56,005		$	—	$	21,751	$	—
Fair value of derivatives	(5,996		)	—		22,285		—		68,244			—		20,977		—		(10,323		)	—		38,580		—
Balance at end of period	$	103,350		$	—	$	37,229	$	—	$	15,356		$	—	$	43,832	$	—	$	45,682		$	—	$	60,331	$	—

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


	June 30, 2019															March 31, 2020
(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	$	166,652		$	6,748		$	3,360		$	57		$	176,817		$	164,700		$	3,240		$	9,648		$	142		$	177,730
Commodity derivative liabilities	(42,983		)	(587		)	(72,729		)	(4,042		)	(120,341		)	(38,485		)	(119		)	(100,139		)	(2,667		)	(141,410		)
Cash collateral paid (received)	109,346			—			—			—			109,346
Cash collateral paid																22,855			—			—			—			22,855
Balance sheet line item totals	$	233,015		$	6,161		$	(69,369	)	$	(3,985	)	$	165,822		$	149,070		$	3,121		$	(90,491	)	$	(2,525	)	$	59,175


	December 31, 2018															December 31, 2019
(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	$	43,463		$	484		$	706		$	5		$	44,658		$	92,429		$	1,045		$	7,439		$	18		$	100,931
Commodity derivative liabilities	(6,986		)	(4		)	(33,353		)	(894		)	(41,237		)	(40,571		)	(96		)	(54,381		)	(523		)	(95,571		)
Cash collateral (received)	14,944			—			—			—			14,944
Cash collateral paid																56,005			—			—			—			56,005
Balance sheet line item totals	$	51,421		$	480		$	(32,647	)	$	(889	)	$	18,365		$	107,863		$	949		$	(46,942	)	$	(505	)	$	61,365


	June 30, 2018															March 31, 2019
(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	$	123,917		$	1,022		$	626		$	36		$	125,601		$	142,262		$	3,781		$	665		$	93		$	146,801
Commodity derivative liabilities	(16,770		)	(14		)	(85,786		)	(3,238		)	(105,808		)	(5,736		)	(24		)	(67,288		)	(3,914		)	(76,962		)
Cash collateral (received)	(52,888		)	—			—			—			(52,888		)
Cash collateral paid																21,751			—			—			—			21,751
Balance sheet line item totals	$	54,259		$	1,008		$	(85,160	)	$	(3,202	)	$	(33,095	)	$	158,277		$	3,757		$	(66,623	)	$	(3,821	)	$	91,590

The net pretax gains and losses on commodity derivatives not designated as hedging instruments included in the Company’s Condensed Consolidated Statements of Operations and the line item in which they are located for the three and ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ are as follows:


	Three months ended June 30,					Six months ended June 30,				Three months ended March 31,
(in thousands)	2019			2018		2019		2018		2020		2019
Gains (losses) on commodity derivatives included in cost of sales and merchandising revenues	$	(13,364	)	$	45,844	$	57,291	$	20,608
Gains on commodity derivatives included in cost of sales and merchandising revenues										$	30,960	$	66,419

The Company had the following volume of commodity derivative contracts outstanding (on a gross basis) at ~~June 30, 2019,~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018:~~March 31, 2019:


	June 30, 2019				March 31, 2020
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	648,434	—	—	—	555,782	—	—	—
Soybeans	59,594	—	—	—	33,950	—	—	—
Wheat	93,621	—	—	—	92,374	—	—	—
Oats	40,582	—	—	—	56,582	—	—	—
Ethanol	—	211,352	—	—	—	103,252	—	—
Corn oil	—	—	8,809	—	—	—	6,275	—
Other	23,875	2,532	—	3,179	18,734	1,500	296	2,010
Subtotal	866,106	213,884	8,809	3,179	757,422	104,752	6,571	2,010
Exchange traded:
Corn	317,405	—	—	—	165,295	—	—	—
Soybeans	52,762	—	—	—	37,875	—	—	—
Wheat	55,150	—	—		59,135	—	—	—
Oats	1,045	—	—	—	1,490	—	—	—
Ethanol	—	82,988	—	—	—	44,440	—	—
Propane	—	13,230	—	—	—	11,760	—	—
Other	—	35	—	180	—	11,970	—	213
Subtotal	426,362	96,253	—	180	263,795	68,170	—	213
Total	1,292,468	310,137	8,809	3,359	1,021,217	172,922	6,571	2,223


	December 31, 2018				December 31, 2019
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	250,408	—	—	—	552,359	—	—	—
Soybeans	22,463	—	—	—	34,912	—	—	—
Wheat	14,017	—	—	—	100,996	—	—	—
Oats	26,230	—	—	—	24,700	—	—	—
Ethanol	—	244,863	—	—	—	116,448	—	—
Corn oil	—	—	2,920	—	—	—	14,568	—
Other	494	2,000	—	66	11,363	4,000	305	2,263
Subtotal	313,612	246,863	2,920	66	724,330	120,448	14,873	2,263
Exchange traded:
Corn	130,585	—	—	—	221,740	—	—	—
Soybeans	26,985	—	—	—	39,145	—	—	—
Wheat	33,760	—	—	—	68,171	—	—	—
Oats	1,475	—	—	—	2,090	—	—	—
Ethanol	—	77,112	—	—	—	175,353	—	—
Propane					—	5,166	—	—
Other					—	15	—	232
Subtotal	192,805	77,112	—	—	331,146	180,534	—	232
Total	506,417	323,975	2,920	66	1,055,476	300,982	14,873	2,495


	June 30, 2018				March 31, 2019
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	272,979	—	—	—	624,612	—	—	—
Soybeans	49,208	—	—	—	42,859	—	—	—
Wheat	11,163	—	—	—	118,909	—	—	—
Oats	36,612	—	—	—	26,361	—	—	—
Ethanol	—	332,761		—	—	233,420	—	—
Corn oil	—	—	6,158	—	—	—	6,733	—
Other	82	1,500		77	5,574	2,032	6	2,508
Subtotal	370,044	334,261	6,158	77	818,315	235,452	6,739	2,508
Exchange traded:
Corn	133,730	—	—	—	197,210	—	—	—
Soybeans	45,775	—	—	—	47,860	—	—	—
Wheat	48,105	—	—	—	103,955	—	—	—
Oats	1,190	—	—	—	770	—	—	—
Ethanol	—	140,364	—	—	—	110,758	—	—
Gasoline					—	12,936	—	—
Propane					—	14,784	—	—
Other					2	—	—	205
Subtotal	228,800	140,364	—	—	349,797	138,478	—	205
Total	598,844	474,625	6,158	77	1,168,112	373,930	6,739	2,713

Interest Rate and Other Derivatives

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The gains or losses on the derivatives are recorded in Other Comprehensive Income (Loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

At ~~June 30, 2019,~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018,~~March 31, 2019, the Company had recorded the following amounts for the fair value of the Company's other derivatives:


(in thousands)	June 30, 2019			December 31, 2018			June 30, 2018			March 31, 2020			December 31, 2019			March 31, 2019
Derivatives not designated as hedging instruments
Interest rate contracts included in Other long-term assets (Other long-term liabilities)	$	(10,750	)	$	(353	)	$	(37	)
Interest rate contracts included in Other long-term liabilities										$	(1,913	)	$	(1,007	)	$	(4,494	)
Foreign currency contracts included in Other current assets (Accrued expenses and other current liabilities)	$	(22	)	$	(1,122	)	$	(1,109	)	$	440		$	2,742		$	(344	)
Derivatives designated as hedging instruments
Interest rate contract included in Accrued expenses and other current liabilities	$	—		$	—		$	(88	)
Interest rate contract included in Other assets (Other long-term liabilities)	$	(10,587	)	$	(168	)	$	155
Interest rate contracts included in Accrued expenses and other current liabilities										$	(8,081	)	$	(3,118	)	$	—
Interest rate contracts included in Other long-term assets (Other long-term liabilities)										$	(22,620	)	$	(9,382	)	$	(4,552	)

The recording of derivatives gains and losses and the financial statement line in which they are located are as follows:


	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
(in thousands)	2019			2018			2019			2018			2020			2019
Derivatives not designated as hedging instruments
Interest rate derivative gains (losses) included in Interest income (expense)	$	(1,065	)	$	351		$	(2,055	)	$	1,141
Foreign currency derivative gains (losses) included in Other income, net	$	(366	)	$	(413	)	$	(1,833	)	$	(1,535	)
Interest rate derivative gains (losses) included in Interest income (expense), net													$	(784	)	$	(990	)
Foreign currency derivative gains (losses) included in Other income (loss), net													$	—		$	(1,467	)
Derivatives designated as hedging instruments
Interest rate derivative gains (losses) included in Other Comprehensive Income (Loss)	$	(7,926	)	$	67		$	(12,917	)	$	67		$	(18,182	)	$	(4,991	)
Interest rate derivatives gains (losses) included in Interest income (expense)	$	—		$	—		$	165		$	—
Interest rate derivatives gains (losses) included in Interest income (expense), net													$	(1,290	)	$	165

Outstanding interest rate derivatives, as of ~~June 30, 2019,~~March 31, 2020, are as follows:



Interest Rate Hedging Instrument	Year Entered	Year of Maturity	Initial Notional Amount (in millions)		Description	Interest Rate
Long-term
Swap	2014	2023	$	23.0	Interest rate component of debt - not accounted for as a hedge	1.9%
Collar	2016	2021	$	40.0	Interest rate component of debt - not accounted for as a hedge	3.5% to 4.8%
Swap	2017	2022	$	20.0	Interest rate component of debt - accounted for as a hedge	1.8%
Swap	2018	2023	$	10.0	Interest rate component of debt - accounted for as a hedge	2.6%
Swap	2018	2025	$	20.0	Interest rate component of debt - accounted for as a hedge	2.7%
Swap	2018	2021	$	40.0	Interest rate component of debt - accounted for as a hedge	2.6%
Swap	2019	2021	$	25.0	Interest rate component of debt - accounted for as a hedge	2.5%
Swap	2019	2021	$	50.0	Interest rate component of debt - accounted for as a hedge	2.5%
Swap	2019	2025	$	100.0	Interest rate component of debt - accounted for as a hedge	2.5%
Swap	2019	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	2.5%
Swap	2019	2025	$	50.0	Interest rate component of debt - accounted for as a hedge	2.5%
Swap	2020	2023	$	50.0	Interest rate component of debt - accounted for as a hedge	0.8%
Swap	2020	2023	$	50.0	Interest rate component of debt - accounted for as a hedge	0.7%
Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%
Swap	2020	2030	$	50.0	Interest rate component of debt - accounted for as a hedge	0.0% to 0.8%

Interest Rate Hedging Instrument Year Entered Year of Maturity
Initial Notional Amount
(in millions)
Description

Interest Rate
Long-term
Swap 2014 2023 $ 23.0
Interest rate component of debt - not accounted for as a hedge 1.9%
Collar 2016 2021 $ 40.0
Interest rate component of debt - not accounted for as a hedge 3.5% to 4.8%
Swap * 2016 2019 $ 50.0
Interest rate component of debt - not accounted for as a hedge 1.2%
Swap * 2017 2022 $ 20.0
Interest rate component of debt - accounted for as a hedge 1.8%
Swap * 2018 2023 $ 10.0
Interest rate component of debt - accounted for as a hedge 2.6%
Swap * 2018 2025 $ 20.0
Interest rate component of debt - accounted for as a hedge 2.7%
Swap 2018 2021 $ 40.0
Interest rate component of debt - accounted for as a hedge 2.6%
Swap 2019 2021 $ 25.0
Interest rate component of debt - accounted for as a hedge 2.5%
Swap 2019 2021 $ 50.0
Interest rate component of debt - accounted for as a hedge 2.5%
Swap 2019 2025 $ 100.0
Interest rate component of debt - accounted for as a hedge 2.5%
Swap 2019 2025 $ 50.0
Interest rate component of debt - accounted for as a hedge 2.5%
Swap 2019 2025 $ 50.0
Interest rate component of debt - accounted for as a hedge 2.5%

* Acquired on 1/1/2019 in conjunction with the acquisition of LTG.

6. ~~Employee Benefit Plans~~

~~The following are components of the net periodic benefit cost for the pension and postretirement benefit plans maintained by the Company for the three and six months ended June 30, 2019 and 2018:~~

Pension Benefits
(in thousands) Three months ended June 30, Six months ended June 30,
2019 2018 2019 2018
Interest cost $ 29
$ 32
$ 58
$ 65
Recognized net actuarial loss 58
61
116
122
Benefit cost $ 87
$ 93
$ 174
$ 187

Postretirement Benefits
(in thousands) Three months ended June 30, Six months ended June 30,
2019 2018 2019 2018
Service cost $ 64
$ 75
$ 138
$ 162
Interest cost 221
190
427
377
Amortization of prior service cost (228 ) (228 ) (456 ) (456 )
Benefit cost $ 57
$ 37
$ 109
$ 83

7. Revenue

Many of the Company’s revenues are generated from contracts that are outside the scope of ASC 606 and thus are accounted for under other accounting standards. Specifically, many of the Company's Trade and Ethanol sales contracts are derivatives under ASC 815, Derivatives and Hedging and the Rail Group's leasing revenue is accounted for under ASC 842, Leases. The breakdown of revenues between ASC 606 and other standards is as follows:


	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands)	2019		2018		2019		2018		2020		2019
Revenues under ASC 606	$	494,266	$	356,883	$	809,438	$	550,533	$	347,502	$	315,172
Revenues under ASC 842	31,836		26,228		60,704		52,257		25,551		28,868
Revenues under ASC 815	1,798,939		528,291		3,431,691		944,351		1,480,052		1,632,752
Total Revenues	$	2,325,041	$	911,402	$	4,301,833	$	1,547,141	$	1,853,105	$	1,976,792

The remainder of this note applies only to those revenues that are accounted for under ASC 606.

Disaggregation of revenue

The following tables disaggregate revenues under ASC 606 by major product/service line for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively:

Three months ended June 30, 2019
(in thousands) Trade Ethanol Plant Nutrient Rail Total
Specialty nutrients $ 31,870
$ —
$ 87,665
$ —
$ 119,535
Primary nutrients 22,364
—
174,907
—
197,271
Services 7,745
3,547
1,696
9,278
22,266
Products and co-products 55,943
32,047
—
—
87,990
Frac sand and propane

56,767
—
—
—
56,767
Other 2,537
35
6,309
1,556
10,437
Total $ 177,226
$ 35,629
$ 270,577
$ 10,834
$ 494,266

Three months ended June 30, 2018
(in thousands) Trade Ethanol Plant Nutrient Rail Total
Specialty nutrients $ —
$ —
$ 94,281
$ —
$ 94,281
Primary nutrients —
—
200,288
—
200,288
Service 3,381
2,760
2,412
9,308
17,861
Co-products —
32,462
—
—
32,462
Other 292
—
6,124
5,575
11,991
Total $ 3,673

$ 35,222

$ 303,105

$ 14,883
$ 356,883



	Three months ended March 31, 2020
(in thousands)	Trade		Ethanol		Plant Nutrient		Rail		Total
Specialty nutrients	$	—	$	—	$	73,231	$	—	$	73,231
Primary nutrients	—		—		45,690		—		45,690
Services	1,686		—		182		8,736		10,604
Ethanol products and co-products	53,165		101,698		—		—		154,863
Frac sand and propane	49,875		—		—		—		49,875
Other	3,989		616		5,810		2,824		13,239
Total	$	108,715	$	102,314	$	124,913	$	11,560	$	347,502

Six months ended June 30, 2019
(in thousands) Trade Ethanol Plant Nutrient Rail Total
Specialty nutrients $ 35,808
$ —
$ 156,065
$ —
$ 191,873
Primary nutrients 22,791
—
227,996
—
250,787
Service 8,570
6,983
1,858
19,225
36,636
Co-products 118,701
53,517
—
—
172,218
Frac sand and propane 137,230
—
—
—
137,230
Other 3,697
35
13,183
3,779
20,694
Total $ 326,797
$ 60,535
$ 399,102
$ 23,004
$ 809,438


	Six months ended June 30, 2018										Three months ended March 31, 2019
(in thousands)	Trade		Ethanol		Plant Nutrient		Rail		Total		Trade		Ethanol		Plant Nutrient		Rail		Total
Specialty nutrients	$	—	$	—	$	169,359	$	—	$	169,359	$	3,938	$	—	$	68,400	$	—	$	72,338
Primary nutrients	—		—		253,507		—		253,507		427		—		53,089		—		53,516
Service	7,799		5,305		2,621		17,425		33,150		825		3,436		162		9,947		14,370
Co-products	—		59,108		—		—		59,108
Ethanol products and co-products											62,758		21,472		—		—		84,230
Frac sand and propane											80,463		—		—		—		80,463
Other	502		—		13,235		21,672		35,409		1,157		—		6,874		2,224		10,255
Total	$	8,301	$	64,413	$	438,722	$	39,097	$	550,533	$	149,568	$	24,908	$	128,525	$	12,171	$	315,172

Approximately 4%3% and 5% of revenues accounted for under ASC 606 during ~~each of~~ the three ~~and~~ months ended ~~June 30,~~March 31, 2020 and 2019, respectively, and ~~2018,~~ are recorded over time which primarily relates to service revenues noted above. ~~Additionally, during the six months ended June 30, 2019 and 2018, approximately 4% and 6% of revenues were accounted for under ASC 606, respectively.~~

Contract balances

The ~~opening and closing~~ balances of the Company’s contract liabilities ~~are~~were $65.8 million and $28.5 million as ~~follows:~~

(in thousands) 2019 2018
Balance at January 1, $ 28,858
$ 25,520
Balance at March 31, 146,824
67,715
Balance at June 30, 48,225
10,047

~~Exclusive~~ of ~~acquisition related impacts, the residual~~March 31, 2020 and December 31, 2019, respectively. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The main driver of the contract liabilities ~~have two main drivers, including Trade prepayments by counter parties and~~balance is payments for primary and specialty nutrients received in advance of fulfilling our performance obligations under our customer contracts. The primary and specialty business records contract liabilities for payments received in advance of fulfilling our performance obligations under our customer contracts. Further, due to seasonality of this business, contract liabilities were built up in the

first quarter of the year. ~~In the second quarter, the decrease in liabilities is due to the revenue recognized in the current period relating to the liability built up in the first quarter.~~

7. Income Taxes

On a quarterly basis, the Company estimates the effective tax rate expected to be applicable for the full year and makes changes, if necessary, based on new information or events. The estimated annual effective tax rate is forecasted based on actual historical information and forward-looking estimates and is used to provide for income taxes in interim reporting periods. The Company also recognizes the tax impact of certain unusual or infrequently occurring items, such as the effects of changes in tax laws or rates and impacts from settlements with tax authorities, discretely in the quarter in which they occur.

For the three months ended ~~June 30, 2019,~~March 31, 2020, the Company recorded an income tax ~~expense~~benefit of ~~$11.0~~$1.5 million at an effective income tax rate of ~~27.2%~~2.8%. The annual effective tax rate differs from the statutory U.S. Federal tax rate ~~due to~~as the ~~impact~~tax benefit from consolidated pre-tax losses is completely offset by the portion of ~~state income taxes, nondeductible compensation, and income taxes on foreign earnings.~~losses owned by non-controlling interests that do not provide for a tax benefit. The ~~effective tax rate for the three-month period ended June 30, 2019 also includes tax benefits from foreign and general business tax credits. The increase~~decrease in effective tax rate for the three months ended ~~June 30, 2019~~March 31, 2020 as compared to the same period last year was primarily attributed to the ~~impacts of nondeductible compensation and noncontrolling interest, partially~~tax expense generated from the current period loss before taxes at the estimated annual effective tax rate, offset by tax benefits from ~~income taxes on foreign earnings.~~anticipated net operating loss carrybacks as result of the Coronavirus Aid, Relief, and. Economic Security Act ("CARES") Act. For the three months ended ~~June 30, 2018,~~March 31, 2019, the Company recorded an income tax ~~expense~~benefit of ~~$7.7~~$5.4 million at an effective income tax rate of ~~26.6%~~27.8%.

~~For the six months ended June 30, 2019, the Company recorded income tax expense of $5.6 million at an effective income tax rate of 26.7%.~~ The ~~annual~~2020 effective tax rate ~~differs~~can be affected by variances in the estimates and amounts of taxable income among the various states, entities and activity types, realization of tax credits, adjustments from resolution of tax matters under review, valuation allowances and the ~~statutory~~company’s assessment of its liability for uncertain tax positions. The amount of unrecognized tax benefits for uncertain tax positions was $25.4 million as of March 31, 2020, and $0.6 million for the period ended March 31, 2019. The unrecognized tax benefits of $25.4 million include $21.7 million recorded as a reduction of the deferred tax asset and refundable credits associated with the R&D Credits.

On March 27, 2020, President Trump signed into U.S. ~~Federal~~federal law the CARES Act, which is aimed at providing emergency assistance and health care for individuals, families and businesses affected by the Coronavirus (“COVID-19”) pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions relating to refundable payroll tax ~~rate due~~credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In particular, under the CARES Act, (i) for taxable years beginning before 2021, net operating loss carryforwards and carrybacks may offset 100% of taxable income, (ii) NOLs arising in 2018, 2019, and 2020 taxable years may be carried back to each of the preceding five years to generate a refund and (iii) for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of EBITDA. The Company has analyzed the impact of ~~state income taxes, nondeductible compensation,~~the CARES Act to determine the estimated impact on 2019 filing positions that could be carried back to prior tax years, and ~~income taxes on foreign earnings.~~recorded a financial statement benefit of $6.6 million. On April 17, 2020, the Internal Revenue Service issued Revenue Procedure 2020-25, allowing for companies to revoke an election out of bonus depreciation. The ~~effective tax rate for~~Company is currently evaluating the six-month period ended June 30, 2019 also includes tax benefits from foreign and general business tax credits. The decrease in effective tax rate for the six months ended June 30, 2019 as compared to the same period last year was primarily attributed to income taxes on foreign earnings and discrete activity in the prior period for a statutory merger that did not recur in the current period. For the six months ended June 30, 2018, the Company recorded an income tax expenseimpact of ~~$7.4 million at an effective income tax rate of 27.7%.~~this additional guidance.

9.8. Accumulated Other Comprehensive Income (Loss)

The following tables summarize the after-tax components of accumulated other comprehensive income (loss) attributable to the Company for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 and ~~2018:~~2019:


		Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)																													Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
		Three months ended June 30, 2019														Six months ended June 30, 2019															Three months ended March 31, 2020
(in thousands)	(in thousands)	Cash Flow Hedges			Foreign Currency Translation Adjustment			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total			Cash Flow Hedges			Foreign Currency Translation Adjustment			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total			(in thousands)	Cash Flow Hedges			Foreign Currency Translation Adjustment			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total
Beginning Balance	Beginning Balance	$	(3,748	)	$	1,059		$	258	$	4,905		$	2,474		$	(126	)	$	(11,550	)	$	258	$	5,031		$	(6,387	)	Beginning Balance	$	(9,443	)	$	1,065		$	258	$	889		$	(7,231	)
	Other comprehensive loss before reclassifications	(5,952		)	(2,035		)	—		(557		)	$	(8,544	)	(9,710		)	(1,092		)	—		(512		)	(11,314		)	Other comprehensive loss before reclassifications	(14,390		)	(6,639		)	—		55			$	(20,974	)
	Amounts reclassified from accumulated other comprehensive income (loss) (b)	—			—			—		(171		)	$	(171	)	136			11,666			—		(342		)	11,460			Amounts reclassified from accumulated other comprehensive income (loss)	727			—			—		(171		)	$	556
Net current-period other comprehensive income (loss)	Net current-period other comprehensive income (loss)	(5,952		)	(2,035		)	—		(728		)	(8,715		)	(9,574		)	10,574			—		(854		)	146			Net current-period other comprehensive income (loss)	(13,663		)	(6,639		)	—		(116		)	(20,418		)
Ending balance	Ending balance	$	(9,700	)	$	(976	)	$	258	$	4,177		$	(6,241	)	$	(9,700	)	$	(976	)	$	258	$	4,177		$	(6,241	)	Ending balance	$	(23,106	)	$	(5,574	)	$	258	$	773		$	(27,649	)

(a) All amounts are net of tax. Amounts in parentheses indicate ~~debits~~debits.



		Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
		Three months ended March 31, 2019
(in thousands)		Cash Flow Hedges			Foreign Currency Translation Adjustment			Investment in Convertible Preferred Securities		Defined Benefit Plan Items			Total
Beginning Balance		$	(126	)	$	(11,550	)	$	258	$	5,031		$	(6,387	)
	Other comprehensive loss before reclassifications	(3,758		)	943			—		45			$	(2,770	)
	Amounts reclassified from accumulated other comprehensive income (loss) (b)	136			11,666			—		(171		)	$	11,631
Net current-period other comprehensive income (loss)		(3,622		)	12,609			—		(126		)	8,861
Ending balance		$	(3,748	)	$	1,059		$	258	$	4,905		$	2,474

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

(b) Reflects foreign currency translation adjustments attributable to the consolidation of Thompsons ~~Limited as summarized in Note 17.~~Limited.

Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
Three months ended June 30, 2018 Six months ended June 30, 2018
(in thousands) Cash Flow Hedges Foreign Currency Translation Adjustment Investment in Convertible Preferred Securities Defined Benefit Plan Items Total Cash Flow Hedges Foreign Currency Translation Adjustment
Investment in Convertible Preferred Securities

Defined Benefit Plan Items Total
Beginning Balance $ —
$ (8,866 ) $ 257
$ 4,621
$ (3,988 ) $ —
$ (7,716 ) $ 344
$ 4,672
$ (2,700 )
Other comprehensive income (loss) before reclassifications 51
(1,123 ) —
(119 ) (1,191 ) 51
(2,273 ) (87 ) (2 ) (2,311 )
Amounts reclassified from accumulated other comprehensive loss —
—
—
(168 ) (168 ) —
—
—
(336 ) (336 )
Net current-period other comprehensive income (loss) 51
(1,123 ) —
(287 ) (1,359 ) 51
(2,273 ) (87 ) (338 ) (2,647 )
Ending balance $ 51
$ (9,989 ) $ 257
$ 4,334
$ (5,347 ) $ 51
$ (9,989 ) $ 257
$ 4,334
$ (5,347 )

~~(a) All amounts are net of tax. Amounts in parentheses indicate debits~~

Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (a)
(in thousands) Three months ended June 30, 2019 Six months ended June 30, 2019
Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income Is Presented Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income Is Presented
Defined Benefit Plan Items
     Amortization of prior-service cost $ (228 ) (b) $ (456 ) (b)
(228 ) Total before tax (456 ) Total before tax
57
Income tax provision 114
Income tax provision
$ (171 ) Net of tax $ (342 ) Net of tax

Cash Flow Hedges
     Interest payments —
Interest expense $ 182
Interest expense
—
Total before tax 182
Total before tax
—
Income tax provision (46 ) Income tax provision
$ —
Net of tax $ 136
Net of tax

Foreign Currency Translation Adjustment
     Realized loss on pre-existing investment —
Other income, net $ 11,666
Other income, net
—
Total before tax $ 11,666
Total before tax
—
Income tax provision $ —
Income tax provision
$ —
Net of tax $ 11,666
Net of tax

Total reclassifications for the period $ (171 ) Net of tax $ 11,460
Net of tax


	Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (a)								Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (a)
(in thousands)	Three months ended June 30, 2018				Six months ended June 30, 2018				Three months ended March 31, 2020
Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income Is Presented	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income Is Presented	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income Is Presented
Defined Benefit Plan Items
Amortization of prior-service cost	$	(228	)	(b)	$	(456	)	(b)	$	(228	)	(b)
	(228		)	Total before tax	(456		)	Total before tax	(228		)	Total before tax
	60			Income tax provision	120			Income tax provision	57			Income tax provision (benefit)
	$	(168	)	Net of tax	$	(336	)	Net of tax	$	(171	)	Net of tax

Cash Flow Hedges
Interest payments									$	969		Interest expense
									969			Total before tax
									(242		)	Income tax provision
									$	727		Net of tax

Total reclassifications for the period	$	(168	)	Net of tax	$	(336	)	Net of tax	$	556		Net of tax

(a) Amounts in parentheses indicate credits to profit/~~loss~~loss.

(b) This accumulated other comprehensive loss component is included in the computation of net periodic benefit ~~cost (see Note 6).~~cost.



	Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (a)
(in thousands)	Three months ended March 31, 2019
Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income Is Presented
Defined Benefit Plan Items
Amortization of prior-service cost	$	(228	)	(b)
	(228		)	Total before tax
	57			Income tax provision (benefit)
	$	(171	)	Net of tax

Cash Flow Hedges
Interest payments	$	182		Interest expense
	182			Total before tax
	(46		)	Income tax provision
	$	136		Net of tax

Foreign Currency Translation Adjustment
Realized loss on pre-existing investment	$	11,666		Other income, net
	11,666			Total before tax
	—			Income tax provision
	$	11,666		Net of tax

Total reclassifications for the period	$	11,631		Net of tax

(a) Amounts in parentheses indicate credits to profit/loss.

(b) This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost.

~~10.~~9. Earnings Per Share

The Company’s non-vested restricted stock that was granted prior to March 2015 is considered a participating security since the share-based awards contain a non-forfeitable right to dividends irrespective of whether the awards ultimately vest. Unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings.


(in thousands, except per common share data)	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands, except per common share data)	2019		2018		2019		2018		2020			2019
Net income attributable to The Andersons, Inc.	$	29,888	$	21,529	$	15,895	$	19,829
Less: Distributed and undistributed earnings allocated to nonvested restricted stock	—		—		—		—
Earnings available to common shareholders	$	29,888	$	21,529	$	15,895	$	19,829
Net loss attributable to The Andersons, Inc.									$	(37,662	)	$	(13,993	)
Earnings per share – basic:
Weighted average shares outstanding – basic	32,521		28,261		32,511		28,249		32,821			32,501
Earnings per common share – basic	$	0.92	$	0.76	$	0.49	$	0.70	$	(1.15	)	$	(0.43	)
Earnings per share – diluted:
Weighted average shares outstanding – basic	32,521		28,261		32,511		28,249		32,821			32,501
Effect of dilutive awards	212		128		560		187		—			—
Weighted average shares outstanding – diluted	32,733		28,389		33,071		28,436		32,821			32,501
Earnings per common share – diluted	$	0.91	$	0.76	$	0.48	$	0.70	$	(1.15	)	$	(0.43	)

All outstanding share awards were ~~33 thousand and 61 thousand~~ antidilutive for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and March 31, 2019 ~~respectively. There were 28 thousand and 25 thousand antidilutive stock-based awards outstanding for~~as the ~~three and six months ended June 30, 2018, respectively.~~

Company incurred a net loss in both periods.

~~11.~~

10. Fair Value Measurements

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at ~~June 30, 2019~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018~~March 31, 2019:


(in thousands)	June 30, 2019											March 31, 2020
Assets (liabilities)	Level 1			Level 2			Level 3		Total			Level 1			Level 2			Level 3		Total
Commodity derivatives, net (a)	$	103,350		$	62,473		$	—	$	165,823		$	43,832		$	15,343		$	—	$	59,175
Provisionally priced contracts (b)	(1,064		)	(38,215		)	—		(39,279		)	(94,834		)	(51,061		)	—		(145,895		)
Convertible preferred securities (c)	—			—			8,404		8,404			—			—			8,654		8,654
Other assets and liabilities (d)	5,284			(10,750		)	—		(5,466		)	5,373			(32,614		)	—		(27,241		)
Total	$	107,570		$	13,508		$	8,404	$	129,482		$	(45,629	)	$	(68,332	)	$	8,654	$	(105,307	)



(in thousands)	December 31, 2019
Assets (liabilities)	Level 1			Level 2			Level 3		Total
Commodity derivatives, net (a)	$	45,682		$	15,683		$	—	$	61,365
Provisionally priced contracts (b)	(118,414		)	(68,237		)	—		(186,651		)
Convertible preferred securities (c)	—			—			8,404		8,404
Other assets and liabilities (d)	9,469			(13,507		)	—		(4,038		)
Total	$	(63,263	)	$	(66,061	)	$	8,404	$	(120,920	)

(in thousands) December 31, 2018
Assets (liabilities) Level 1 Level 2 Level 3 Total
Commodity derivatives, net (a) $ 37,229
$ (18,864 ) $ —
$ 18,365
Provisionally priced contracts (b) (76,175 ) (58,566 ) —
(134,741 )
Convertible preferred securities (c) —
—
7,154
7,154
Other assets and liabilities (d) 5,186
(353 ) —
4,833
Total $ (33,760 ) $ (77,783 ) $ 7,154
$ (104,389 )


(in thousands)	June 30, 2018											March 31, 2019
Assets (liabilities)	Level 1			Level 2			Level 3		Total			Level 1			Level 2			Level 3		Total
Commodity derivatives, net (a)	$	15,356		$	(48,451	)	$	—	$	(33,095	)	$	60,331		$	31,259		$	—	$	91,590
Provisionally priced contracts (b)	(37,787		)	(24,511		)	—		(62,298		)	(48,430		)	(49,393		)	—		(97,823		)
Convertible preferred securities (c)	—			—			7,488		7,488			—			—			7,404		7,404
Other assets and liabilities (d)	4,136			(37		)	—		4,099			5,772			(4,494		)	—		1,278
Total	$	(18,295	)	$	(72,999	)	$	7,488	$	(83,806	)	$	17,673		$	(22,628	)	$	7,404	$	2,449


(a)	Includes associated cash posted/received as collateral


(b)	Included in "Provisionally priced contracts" are those instruments based only on underlying futures values (Level 1) and delayed price contracts (Level 2)


(c)	Recorded in “Other ~~noncurrent assets”~~assets, net” on the Company’s ~~Condensed~~ Consolidated Balance ~~Sheets.~~Sheets related to certain available for sale securities.


(d)	Included in other assets and liabilities are assets held ~~in rabbi trusts~~by the Company to fund deferred compensation plans, ethanol risk management contracts, and foreign exchange derivative contracts (Level 1), and interest rate derivatives (Level 2).

Level 1 commodity derivatives reflect the fair value of the exchanged-traded futures and options contracts that the Company holds, net of the cash collateral, that the Company has in its margin account.

The majority of the Company’s assets and liabilities measured at fair value are based on the market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The Company’s net commodity derivatives primarily consist of futures or options contracts via regulated exchanges and contracts with producers or customers under which the future settlement date and bushels (or gallons in the case of ethanol contracts) of commodities to be delivered (primarily wheat, corn, soybeans and ethanol) are fixed and under which the price may or may not be fixed. Depending on the specifics of the individual contracts, the fair value is derived from the futures or options prices quoted on various exchanges for similar commodities and delivery dates as well as observable quotes for local basis adjustments (the difference, which is attributable to local market conditions, between the quoted futures price and the local cash price). Because “basis” for a particular commodity and location typically has multiple quoted prices from other agribusinesses in the same geographical vicinity and is used as a common pricing mechanism in the agribusiness industry, we have concluded that “basis” is typically a Level 2 fair value input for purposes of the fair value disclosure requirements related to our commodity derivatives, depending on the specific commodity. Although nonperformance risk, both of the Company and the counterparty, is present in each of these commodity contracts and is a component of the estimated fair values, based on the Company’s historical experience with its producers and customers and the Company’s knowledge of their businesses, the Company does not view nonperformance risk to be a significant input to fair value for these commodity contracts.

These fair value disclosures exclude physical grain inventories measured at net realizable value. The net realizable value used to measure the Company’s agricultural commodity inventories is the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. This valuation would generally be considered Level 2. The amount is disclosed in Note 2 Inventories. Changes in the net realizable value of commodity inventories are recognized as a component of cost of sales and merchandising revenues.

Provisionally priced contract liabilities are those for which the Company has taken ownership and possession of grain, but the final purchase price has not been established. In the case of payables where the unpriced portion of the contract is limited to the futures price of the underlying commodity or we have delivered provisionally priced grain and a subsequent payable or receivable is set up for any future changes in the grain price, quoted exchange prices are used and the liability is deemed to be Level 1 in the fair value hierarchy. For all other unpriced contracts which include variable futures and basis components, the amounts recorded for delayed price contracts are determined on the basis of local grain market prices at the balance sheet date and, as such, are deemed to be Level 2 in the fair value hierarchy.

The risk management contract liability allows related ethanol 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 exchange prices and as such, the balance is deemed to be Level 1 in the fair value hierarchy.

The convertible preferred securities are interests in several early-stage enterprises that may be in various forms, such as convertible debt or preferred equity securities.

A reconciliation of beginning and ending balances for the Company’s fair value measurements using Level 3 inputs is as follows:


	Convertible Preferred Securities				Convertible Preferred Securities
(in thousands)	2019		2018		2020		2019
Assets (liabilities) at January 1,	$	7,154	$	7,388	$	8,404	$	7,154
Additional Investments	250		—		250		250
Assets (liabilities) at March 31,	$	7,404	$	7,388	$	8,654	$	7,404
Additional investments	1,000		100
Asset (liabilities) at June 30,	$	8,404	$	7,488

The following tables summarize quantitative information about the Company's Level 3 fair value measurements as of ~~June 30, 2019,~~March 31, 2020, December 31, ~~2018~~2019 and ~~June 30, 2018:~~March 31, 2019:

Quantitative Information about Level 3 Fair Value Measurements

Quantitative Information about Recurring Level 3 Fair Value Measurements

(in thousands)

Fair Value as of June 30, 2019

Valuation Method

Unobservable Input

Weighted Average

Fair Value as of March 31, 2020

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

8,404

Implied based on market prices

N/A

8,654

Implied based on market prices

N/A

Real Property (b)

2,719

Market Approach

N/A

(in thousands)

Fair Value as of December 31, 2018

Valuation Method

Unobservable Input

Weighted Average

Fair Value as of December 31, 2019

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

7,154

Implied based on market prices

N/A

8,404

Implied based on market prices

N/A

(in thousands)

Fair Value as of June 30, 2018

Valuation Method

Unobservable Input

Weighted Average

Fair Value as of March 31, 2019

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

7,488

Implied based on market prices

N/A

7,404

Implied based on market prices

N/A

Real property (b)

1,300

Sale agreement

N/A

Rail car assets (c)

4,063

National scrap index less cost to sell

N/A

(a) The Company considers observable price changes and other additional market data available ~~in order~~ to estimate fair value, including additional capital raising, internal valuation models, progress towards key business milestones, and other relevant market data points.



	Quantitative Information about Non-recurring Level 3 Fair Value Measurements
(in thousands)	Fair Value as of December 31, 2019		Valuation Method	Unobservable Input	Weighted Average
Frac sand assets (a)	$	16,546	Third party appraisal	Various	N/A
Real property (b)	608		Market approach	Various	N/A
Equity method investment (c)	12,424		Discounted cash flow analysis	Various	N/A

(a) The Company recognized impairment charges on long lived related to its frac sand business. The fair value of the assets were determined using prior transactions and third-party appraisals. These measures are considered Level 3 inputs on a nonrecurring basis.

(b) The Company recognized impairment charges on certain Trade assets and measured the fair value using Level 3 inputs on a nonrecurring basis. The fair value of the assets ~~was~~were determined using prior transactions in the local market and a ~~pending~~recent sale of ~~grain~~comparable Trade group assets held by the Company.

(c)The Company ~~recognized~~recorded an other-than-temporary impairment ~~charges~~charge on ~~rail assets during 2018 and measured fair value using Level 3 inputs on a nonrecurring basis.~~an existing equity method investment. The fair value of the ~~assets~~investment was determined ~~based on~~using a ~~national scrap index less cost to sell.~~discounted cash flow analysis.

There were no non-recurring fair value measurements as of March 31, 2020 and March 31, 2019.

Fair Value of Financial Instruments

The fair value of the Company’s long-term debt is estimated using quoted market prices or discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. As such, the Company has concluded that the fair value of long-term debt is considered Level 2 in the fair value hierarchy.


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018			March 31, 2020		December 31, 2019		March 31, 2019
Fair value of long-term debt, including current maturities	$	1,078,185	$	517,998	$	444,821		$	1,113,042	$	1,096,010	$	1,043,503
Fair value in excess of carrying value (a)	4,495		5,813		(8,063		)	36,461		8,257		2,318

(a) Carrying value used for this purpose excludes unamortized debt issuance costs.

The fair value of the Company’s cash equivalents, accounts receivable and accounts payable approximate their carrying value as they are close to maturity.

~~12.~~11. Related ~~Party Transactions~~

~~Equity Method Investments~~

The Company, directly or indirectly, holds investments in companies that are accounted for under the equity method. The Company’s equity in these entities is presented at cost plus its accumulated proportional share of income or loss, less any distributions it has received.

~~The following table presents the Company’s investment balance in each of its equity method investees by entity:~~

(in thousands) June 30, 2019 December 31, 2018 June 30, 2018
The Andersons Albion Ethanol LLC $ 50,760
$ 50,382
$ 47,474
The Andersons Clymers Ethanol LLC 25,260
24,242
21,214
The Andersons Marathon Ethanol LLC 16,294
14,841
14,344
Lansing Trade Group, LLC (a) —
101,715
97,476
Thompsons Limited (a) —
48,987
49,251
Providence Grain Group Inc. 17,161
—
—
Other 11,454
2,159
2,400
Total $ 120,929
$ 242,326
$ 232,159

(a) The Company previously owned approximately 32.5% of LTG. Effective January 1, 2019, the Company purchased the remaining equity of LTG. The transaction results in the consolidation of Thompsons Limited of Ontario, Canada and related entities, which LTG and the Company had equally owned.

~~The following table summarizes income (loss) earned from the Company’s equity method investments by entity:~~

Three months ended June 30, Six months ended June 30,
(in thousands) % Ownership at June 30, 2019 2019 2018 2019 2018
The Andersons Albion Ethanol LLC 55% $ 120
$ 1,329
$ 379
$ 2,450
The Andersons Clymers Ethanol LLC 39% 694
1,236
1,276
1,745
The Andersons Marathon Ethanol LLC 33% 644
1,728
1,453
1,684
Lansing Trade Group, LLC (a) 100% (a) —
3,591
—
6,175
Thompsons Limited (a) 100% (a) —
1,980
—
1,311
Providence Grain Group Inc. 39% (1,719 ) —
(1,844 ) —
Other 5% - 51% 104
(61 ) 98
11
Total $ (157 ) $ 9,803
$ 1,362
$ 13,376

(a) The Company previously owned approximately 32.5% of LTG. Effective January 1, 2019, the company purchased the remaining equity of LTG. The transaction results in the consolidation of Thompsons Limited and related entities, which LTG and the Company had equally owned.

~~The Company received $0.3 million from unconsolidated affiliates for the six months ended June 30, 2019 and received $2.1 million for the six months ended June 30, 2018.~~

In the second quarter of 2019, the Company did not have significant equity investees. In the second quarter of 2018, Lansing Trade Group qualified as significant equity investee of the Company under the income test. In January of 2019, the Company acquired the remaining equity of LTG and is now reflected in the consolidated results of the Company.

~~Related Party Transactions~~Parties

In the ordinary course of business and on an arms-length basis, the Company will mainly enter into related party transactions with ~~each~~the minority shareholders of the Company's ethanol operations and several equity method investments ~~described above,~~that the Company holds, along with other related parties.

On March 2, 2018, the Company invested in ELEMENT, LLC. The Company owns 51% of ELEMENT, LLC and ICM, Inc. owns the remaining 49% interest. ELEMENT, LLC is constructing a 70 million-gallon-per-year bio-refinery. As part of the Company’s investment into ELEMENT, LLC, the Company and ICM, Inc. entered into a number of agreements with the entity. Most notably, 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 results of operations for ELEMENT, LLC have been included in the Company's consolidated results of operations beginning on March 2, 2018 and are a component of the Ethanol segment. The plant is expected to be operational in the third quarter of 2019.

The following table sets forth the related party transactions entered into for the time periods presented:


	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands)	2019		2018		2019		2018		2020		2019
Sales revenues	$	57,854	$	107,686	$	119,022	$	196,580	$	54,694	$	61,168
Service fee revenues (a)	4,052		5,191		8,163		10,308		—		4,112
Purchases of product and capital assets	176,442		197,444		345,671		378,968		15,577		169,229
Lease income (b)	1,645		1,624		3,309		3,206		147		1,014
Labor and benefits reimbursement (c)	3,602		3,601		7,460		7,168		—		3,857


(a)	Service fee revenues include management fees, corn origination fees, ethanol and distillers dried grains (DDG) marketing fees, and other commissions. These revenues are now eliminated in consolidation as a result of the TAMH merger.


(b)	Lease income includes certain railcars leased to related parties and the lease of the Company’s Albion, Michigan and Clymers, Indiana grain facilities from the prior period and are now eliminated in consolidation as ~~well as certain railcars to~~a result of the ~~various ethanol LLCs.~~TAMH merger.


(c)	~~The~~Prior to the TAMH merger the Company ~~provides~~provided all ~~operational~~operations labor to the unconsolidated ethanol ~~LLCs.~~ LLCs and charged them an amount equal to the Company's costs of the related services for the prior periods.

(in thousands) June 30, 2019 December 31, 2018 June 30, 2018
Accounts receivable (d) $ 19,515
$ 17,829
$ 27,030
Accounts payable (e) 24,700
28,432
39,620



(in thousands)	March 31, 2020		December 31, 2019		March 31, 2019
Accounts receivable (d)	$	6,586	$	10,603	$	20,134
Accounts payable (e)	6,364		12,303		24,644


(d)	Accounts receivable represents amounts due from related parties for ~~sales~~the sale of ~~corn, leasing revenue~~ethanol and ~~service fees.~~other various items.


(e)	Accounts payable represents amounts due to related parties for purchases of ethanol equipment and other various items.

For the three months ended June 30, 2019 and 2018, revenues recognized for the sale of ethanol and co-products that the Company purchased from the unconsolidated ethanol LLCs were $154.2 million and $172.3 million, respectively. For the six months ended June 30, 2019 and 2018, revenues recognized for the sale of ethanol and co-products that the Company purchased from the unconsolidated ethanol LLCs were $298.2 million and $318.5 million, respectively.

The Company may enter into derivative contracts with certain of its related parties, including the unconsolidated ethanol LLCs, for the purchase and sale of grain or ethanol, for price risk mitigation purposes and on similar terms as the purchase and sale of derivative contracts it enters into with unrelated parties. The fair value of derivative contract assets with related parties as of June 30, 2019, December 31, 2018 and June 30, 2018 was $0.2 million, $1.9 million and $8.1 million, respectively. The fair value of derivative contract liabilities with related parties as of June 30, 2019, December 31, 2018 and June 30, 2018 was $2.1 million, $6.3 million and $3.9 million, respectively.

~~13.~~12. Segment Information

The Company’s operations include ~~four~~4 reportable business segments that are distinguished primarily on the basis of products and services offered. The Trade business includes ~~grain~~commodity merchandising and the operation of terminal grain elevator facilities and, historically, the investments in LTG and Thompsons Limited. In January 2019, the Company acquired the remaining 67.5% of LTG equity that it did not already own. The transaction also resulted in the consolidation of Thompsons Limited of Ontario, Canada and related entities, which LTG and the Company jointly owned. The Company is continuing to evaluate its segment reporting structure as a result of the acquisition. The presentation includes a majority of the acquired business within the legacy Grain Group which has been renamed, Trade Group. The acquired ethanol trading business of LTG is included within the Ethanol Group. This presentation is still preliminary as the reporting structure may further evolve this year. The Company also moved certain commission income and an elevator lease from the legacy Grain Group to the Ethanol Group to better align business segments. Prior year results have been recast to reflect this change.facilities. The Ethanol business produces ethanol through its five co-owned and fully consolidated ethanol production facilities as well as purchases and sells ethanol and ~~provides risk management, origination and management services to~~ ethanol production facilities. These facilities are organized as limited liability companies, two are consolidated and three are investments accounted for under the equity method. The Company performs a combination of these services under various contracts for these investments.co-products. The Plant Nutrient business manufactures and distributes agricultural inputs, primarily fertilizer, to dealers and farmers, along with turf care and corncob-based products. Rail operations include the leasing, marketing and fleet management of railcars and other assets, railcar repair and metal fabrication. The Other category includes other corporate level costs not attributable to an operating segment.

The segment information below includes the allocation of expenses shared by one or more operating segments. Although management believes such allocations are reasonable, the operating information does not necessarily reflect how such data might appear if the segments were operated as separate businesses. Inter-segment sales are made at prices comparable to

normal, unaffiliated customer sales. The Company does not have any customers who represent 10 percent or more of total revenue.


	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands)	2019		2018		2019		2018		2020		2019
Revenues from external customers
Trade	$	1,766,305	$	365,920	$	3,364,326	$	642,772	$	1,378,040	$	1,537,686
Ethanol	245,143		200,938		453,974		373,776		313,039		269,166
Plant Nutrient	270,577		303,106		399,102		438,723		124,913		128,525
Rail	43,016		41,438		84,431		91,870		37,113		41,415
Total	$	2,325,041	$	911,402	$	4,301,833	$	1,547,141	$	1,853,105	$	1,976,792


	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands)	2019		2018		2019		2018		2020		2019
Inter-segment sales
Trade	$	631	$	462	$	812	$	993	$	609	$	181
Plant Nutrient	1,274		—		1,294		—		887		20
Rail	771		338		2,046		671		1,605		1,275
Total	$	2,676	$	800	$	4,152	$	1,664	$	3,101	$	1,476


	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
(in thousands)	2019			2018			2019			2018			2020			2019
Income (loss) before income taxes, net of noncontrolling interest
Trade	$	23,731		$	9,877		$	6,268		$	9,847		$	(9,983	)	$	(17,903	)
Ethanol	2,649			6,125			5,221			7,964			(23,976		)	3,011
Plant Nutrient	15,903			15,124			11,974			16,215			(1,192		)	(3,929		)
Rail	3,180			944			7,492			4,913			1,007			4,312
Other	(4,578		)	(2,799		)	(9,505		)	(11,678		)	(4,982		)	(4,926		)
Income (loss) before income taxes, net of noncontrolling interest	40,885			29,271			21,450			27,261			(39,126		)	(19,435		)
Noncontrolling interests	(477		)	(116		)	(632		)	(398		)	(13,449		)	(155		)
Income (loss) before income taxes	$	40,408		$	29,155		$	20,818		$	26,863		$	(52,575	)	$	(19,590	)


(in thousands)	June 30, 2019		December 31, 2018		June 30, 2018		March 31, 2020		December 31, 2019		March 31, 2019
Identifiable assets
Trade	$	2,057,305	$	978,974	$	820,016	$	1,878,812	$	2,012,060	$	2,116,254
Ethanol	361,522		295,971		248,560		653,928		690,548		333,060
Plant Nutrient	381,924		403,780		356,166		434,512		383,781		455,529
Rail	657,617		590,407		535,087		658,271		693,931		642,596
Other	113,491		122,871		157,959		127,168		120,421		112,813
Total	$	3,571,859	$	2,392,003	$	2,117,788	$	3,752,691	$	3,900,741	$	3,660,252

~~14. Leases~~

The Company leases certain grain handling and storage facilities, ethanol storage terminals. warehouse space, railcars, locomotives, barges, office space, machinery and equipment, vehicles and information technology equipment under operating leases. Lease expense for these leases is recognized within the Consolidated Statements of Operations on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

~~The following table summarizes the amounts recognized in the Company's Condensed Consolidated Balance Sheet related to leases:~~

(in thousands) Condensed Consolidated Balance Sheet Classification June 30, 2019
Assets
Operating lease assets Right of use assets, net $ 74,073
Finance lease assets Property, plant and equipment, net 24,099
Finance lease assets Rail Group assets leased to others, net 2,047
Total leased assets $ 100,219

Liabilities
Current operating leases Accrued expenses and other current liabilities 25,672
Non-current operating leases Long-term lease liabilities 48,401
Total operating lease liabilities $ 74,073

Current finance leases Current maturities of long-term debt 16,990
Non-current finance leases Long-term debt 21,940
Total finance lease liabilities $ 38,930
Total lease liabilities $ 113,003

~~The components of lease cost recognized within the Company's Condensed Consolidated Statement of Operations were as follows:~~

(in thousands) Condensed Consolidated Statement of Operations Classification June 30, 2019
Lease cost:
Operating lease cost Cost of sales and merchandising revenues $ 13,120
Operating lease cost Operating, administrative and general expenses 6,834
Finance lease cost

Amortization of right-of-use assets Operating, administrative and general expenses 1,912
Interest expense on lease liabilities Interest expense 543
Other lease cost (1) Operating, administrative and general expenses 199
Other lease cost (1) Interest expense 24
Total lease cost $ 22,632


~~(1)~~	~~Other lease cost includes short-term lease costs and variable lease costs~~

The Company often has the option to renew lease terms for buildings and other assets. The exercise of a lease renewal option is generally at the sole discretion of the Company. In addition, certain lease agreements may be terminated prior to their original expiration date at the discretion of the Company. Each renewal and termination option is evaluated at the lease commencement date to determine if the Company is reasonably certain to exercise the option on the basis of economic factors. The table below summarizes the weighted average remaining lease terms as of June 30, 2019.



~~Weighted Average Remaining Lease Term~~
~~Operating leases~~	~~4.3 years~~
~~Finance leases~~	~~7.1 years~~

The discount rate implicit within our leases is generally not determinable and therefore the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for each lease is determined based on its term and the currency in which lease payments are made, adjusted for the impacts of collateral. The table below summarizes the weighted average discount rate used to measure the Company's lease liabilities as of June 30, 2019.



~~Weighted Average Discount Rate~~
~~Operating leases~~	~~4.16~~	%
~~Finance leases~~	~~3.74~~	%

~~Supplemental Cash Flow Information Related to Leases~~

(in thousands) June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 21,345
Operating cash flows from finance leases $ 304
Financing cash flows from finance leases $ 775
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 3,992
Finance leases $ 15,920

~~Maturity Analysis of Leases Liabilities~~

As of June 30, 2019
(in thousands) Operating Leases
Finance
Leases
Total
2019 (excluding the six months ended June 30, 2019) $ 15,849
$ 3,672
$ 19,521
2020 22,069
15,288
37,357
2021 15,898
2,162
18,060
2022 10,550
2,169
12,719
2023 6,193
2,170
8,363
Thereafter 10,613
18,331
28,944
Total lease payments $ 81,172
$ 43,792
$ 124,964
Less interest 7,099
4,862
11,961
Total $ 74,073
$ 38,930
$ 113,003

~~15.~~13. Commitments and Contingencies

The Company is party to litigation, or threats thereof, both as defendant and plaintiff with some regularity, although individual cases that are material in size occur infrequently. As a defendant, the Company establishes reserves for claimed amounts that are considered probable and capable of estimation. If those cases are resolved for lesser amounts, the excess reserves are taken into income and, conversely, if those cases are resolved for larger than the amount the Company has accrued, the Company records additional expense. The Company believes it is unlikely that the results of its current legal proceedings for which it is the defendant, even if unfavorable, will be material. As a plaintiff, amounts that are collected can also result in sudden, non-recurring income.

Litigation results depend upon a variety of factors, including the availability of evidence, the credibility of witnesses, the performance of counsel, the state of the law, and the impressions of judges and jurors, any of which can be critical in importance, yet difficult, if not impossible, to predict. Consequently, cases currently pending, or future matters, may result in unexpected, and non-recurring losses, or income, from time to time. Finally, litigation results are often subject to judicial reconsideration, appeal and further negotiation by the parties, and as a result, the final impact of a particular judicial decision may be unknown for some time or may result in continued reserves to account for the potential of such post-verdict actions.

The Company recorded a $5.0 million reserve relating to an outstanding non-regulatory litigation claim, based upon preliminary settlement negotiations in the first quarter of 2019. The claim is in response to penalties and fines paid to regulatory entities by ~~LTG~~a previously unconsolidated subsidiary in 2018 for the settlement of matters which focused on certain trading activity.

The estimated losses for all other outstanding claims that are considered reasonably possible are not material.

~~Commitments~~

The Company continues its construction of a new bio-refinery facility, which is expected to be completed in 2019. Portions of the project are covered by design and build contracts, with approximately $13 million of the remaining obligation not yet incurred, of which $0.9 million has been prepaid, as of June 30, 2019.

~~16.~~14. Supplemental Cash Flow Information

Certain supplemental cash flow information, including noncash investing and financing activities for the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ are as follows:


	Six months ended June 30,					Three months ended March 31,
(in thousands)	2019			2018		2020		2019
Supplemental disclosure of cash flow information
Interest paid	$	30,287		$	16,982	$	16,180	$	16,711
Noncash investing and financing activity
Dividends declared not yet paid						5,748		5,527
Capital projects incurred but not yet paid						8,459		15,974
Equity issued in conjunction with acquisition	127,841			—		—		123,146
Removal of pre-existing equity method investment	(159,459		)	—		—		(159,459		)
Purchase price holdback/ other accrued liabilities	31,885			—		—		31,518
Dividends declared not yet paid	5,530			4,663
Debt resulting from accounting standard adoption	—			36,953
Railcar assets and liabilities resulting from accounting standard adoption	—			25,643
Capital projects incurred but not yet paid	15,317			10,744

~~17.~~

15. Business Acquisition

~~Effective January~~On October 1, 2019, The Andersons entered into an agreement with Marathon to merge TAAE, TACE, TAME and the ~~Company completed its acquisition~~Company's wholly-owned subsidiary, The Andersons Denison Ethanol LLC into a new legal entity, The Andersons Marathon Holdings LLC. As a result of the ~~remaining 67.5%~~merger, The Andersons and Marathon now own 50.1% and 49.9% of the equity ~~of LTG. The transaction resulted~~ in ~~the consolidation of Thompsons Limited of Ontario, Canada and related entities as they were jointly owned by the Company and LTG in equal portions.~~

TAMH, respectively. Total consideration ~~paid~~transferred by the Company to complete the acquisition of ~~LTG~~TAMH was ~~$328.9~~$182.9 million. The ~~Company paid $169.2 million in cash, which includes preliminary working capital adjustments~~company transferred non-cash consideration of ~~$31.9~~$7.3 million and ~~issued 4.4 million unregistered shares valued at $127.8 million based upon the stock price~~its equity values of the ~~Company.~~previously mentioned LLCs.

The purchase price allocation is preliminary, pending, ~~completion~~finalization of ~~the full valuation report and a final working capital adjustment to be agreed upon between the Company and the sellers.~~deferred income taxes adjustments. A summarized preliminary purchase price allocation is as follows:

(in thousands)
Cash consideration paid $ 169,218
Equity consideration 127,841
Purchase price holdback/ other accrued liabilities 31,885
Total purchase price consideration $ 328,944



(in thousands)
Non-cash consideration	$	7,318
Investments contributed at fair value	124,662
Investment contributed at cost	50,875
Total purchase price consideration	$	182,855

The preliminary purchase price allocation at ~~January~~October 1, 2019, is as follows:


(in thousands)
Cash and cash equivalents	$	21,525		$	47,042
Accounts receivable	320,467			12,175
Inventories	456,963			31,765
Commodity derivative assets - current	82,595
Other current assets	27,474			2,638
Commodity derivative assets - noncurrent	13,576
Goodwill	129,848			2,726
Other intangible assets	106,600
Right of use asset	37,894			5,200
Equity method investments	28,728
Other assets, net	5,582			861
Property, plant and equipment, net	171,820			321,380
	$	1,403,072		423,787

Short-term debt	218,901
Trade and other payables	303,321			13,461
Commodity derivative liabilities - current	29,024
Customer prepayments and deferred revenue	99,530
Accrued expense and other current liabilities	64,512			3,011
Other long-term liabilities, including commodity derivative liabilities - noncurrent	3,175
Other long-term liabilities				209
Long-term lease liabilities	21,193			2,230
Long-term debt, including current maturities	161,688			47,886
Deferred income taxes	14,403
	$	915,747		66,797
Fair value of acquired assets and assumed liabilities	$	487,325
Marathon Noncontrolling Interest				174,135
Net Assets Acquired				$	182,855

Removal of preexisting ownership interest, including associated cumulative translation adjustment	(159,459		)
Pretax loss on derecognition of preexisting ownership interest	1,078
Total purchase price consideration	$	328,944

Removal of preexisting ownership interest				$	(88,426	)
Pretax gain on derecognition of preexisting ownership interest				$	36,286

Asset and liability account balances in the opening balance sheet above include the previously consolidated TADE investment balances at carryover basis.

The $2.7 million of goodwill recognized ~~as a result~~is primarily attributable to expected synergies and the assembled workforce of ~~the LTG acquisition is $129.9 million and is allocated to the Trade Group segment. A portion~~TAMH. None of the goodwill is expected to be deductible for income tax purposes.

The ~~goodwill recognized is primarily attributable to the addition of an assembled workforce and complementary assets with greater scale that significantly expands the Company's reach~~fair value in the agricultural marketplace. Due to refinements in the valuation and finalization of certain replacement equity award during the second quarter, goodwill increased approximately $7.5 million and other intangible assets decreased $9.6 million as well as various working capital adjustments. The Company also finalized the determinationopening balance sheet of the ~~preacquisition~~49.9% noncontrolling interest in TAMH was estimated to be $174.1 million. The fair value ~~of its preexisitng ownership interests, which resulted in a revision~~was estimated based on 49.9% of the ~~previously recorded pretax loss by $2.4 million.~~

~~Details~~total equity value of TAMH based on the ~~intangible assets acquired are as follows:~~

(in thousands) Estimated useful life
Customer relationships $ 86,300
10 years
Noncompete agreements 20,300
3 years
$ 106,600
8 years *

*weighted average number of years

transaction price for the 50.1% stake in TAMH, considering the consideration transferred noted above.

Pro Forma Financial Information (Unaudited)

The summary pro forma financial information for the periods presented below gives effect to the ~~LTG~~TAMH acquisition as if it had occurred at January 1, ~~2018.~~2019.


	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
(in thousands)	2019		2018		2019		2018		2020			2019
Net sales	$	2,359,077	$	2,333,598	$	4,335,869	$	4,261,910	$	1,853,105		$	2,031,510
Net income	29,985		42,506		19,232		32,110		(51,111		)	(15,228		)

Pro forma net ~~loss~~income was also adjusted to account for the tax effects of the pro forma adjustments noted above using a statutory tax rate of 25%. The ~~amount~~ pro forma amounts for net income above have been adjusted to reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to Property, plant and equipment had been applied on January 1, 2019 related to the TAMH merger.

Pro forma financial information is not necessarily indicative of ~~LTG’s and Thompsons’ revenue and earnings included in~~ the ~~Company’s consolidated statement~~Company's actual results of operations ~~for~~if the ~~period ended June 30, 2019~~acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. Amounts do not include any operating efficiencies or cost savings that the Company believes are ~~not practicable to determine given the level of integration of LTG and Thompsons into the Company’s operations effective January 1, 2019.~~achievable.

~~18.~~16. Goodwill

During the quarter the Company completed a reorganization of its organization and internal structure whereby the Company reorganized its operations between the Trade and Ethanol segments to enhance operating decisions and assessing performance. On January 1, 2020, the Company moved its Distillers Dried Grains ("DDG") business from the Trade to Ethanol segment. The reorganization resulted in the reassignment of goodwill to the affected reporting units using a relative fair value approach. As a result of the reassignment and allocation, the Company performed an interim review of the carrying value of goodwill at the Trade and Ethanol segments for possible impairment on both a pre and post-reorganization basis. No impairment of goodwill was indicated at the pre-reorganization reporting units.

The changes in the carrying amount of goodwill by reportable segment for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 are as follows:

(in thousands) Trade Plant Nutrient Rail Total
Balance as of January 1, 2019 $ 1,171
$ 686
$ 4,167
$ 6,024
Acquisitions 129,848
—
—
129,848
Balance as of June 30, 2019 $ 131,019
$ 686
$ 4,167
$ 135,872



(in thousands)	Trade			Ethanol		Plant Nutrient		Rail		Total
Balance as of January 1, 2020	$	127,781		$	2,726	$	686	$	4,167	$	135,360
Reorganization (a)	(5,714		)	5,714		—		—		—
Balance as of March 31, 2020	$	122,067		$	8,440	$	686	$	4,167	$	135,360

~~Acquisitions represent~~(a) Reorganization related to move of the ~~LTG acquisition's preliminary goodwill allocation.~~DDG business line from the Trade to Ethanol segment.

Due to the severe decline in ethanol prices, largely impacted by COVID-19 during the period, management determined that a triggering event occurred within the Ethanol segment. Accordingly, an interim impairment test was performed over the Ethanol group's goodwill as well as its other intangible and long-lived assets. Based on the results of the impairment test, the Ethanol segment did not record an impairment charge.

~~19. Exit Costs~~

When performing our test for impairment, we measured each reporting unit's fair value using a combination of income and ~~Assets Held for Sale~~market approaches.

The ~~Company classified $9.8 million~~income approach calculates the fair value of ~~Property, plant and equipment as Assets held for sale~~the reporting unit based on a discounted cash flow analysis, incorporating the ~~Condensed Consolidated Balance Sheet at June 30, 2018. This includes $4.2 million~~weighted average cost of ~~Retail store assets, $4.1 million~~capital of ~~Rail Group assets, and $1.3 million of former Grain Group assets relating to Como, Tennessee operations, and $0.2 million relating to administrative offices at an outlying location~~a hypothetical third-party buyer. Significant estimates in the ~~Plant Nutrient Group.~~income approach include the following: discount rate, expected financial outlook and profitability of the reporting unit's business (all Level 3 inputs in the fair value hierarchy). Discount rates use the weighted average cost of capital for companies within our peer group, adjusted for specific company risk premium factors.

The market approach uses the "Guideline Company" method, which calculates the fair value of the reporting unit based on a comparison of the reporting unit to comparable publicly traded companies. Significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, assessing comparable multiples, as well as consideration of control premiums. The blended approach assigns an equal weighting to each approach. The blended fair value of both approaches is then compared to the carrying value, and to the extent that fair value exceeds the carrying value, no impairment exists. However, to the extent the carrying value exceeds the fair value, an impairment is recorded.

~~20. Subsequent Events~~

~~Subsequent to the end~~The results of the ~~second quarter,~~goodwill impairment test within the ~~Company reached an agreement~~Ethanol group supported the calculated fair value exceeding the carrying values by greater than 20%. However, as the fair value is highly sensitive to ~~sell~~changes in assumptions, including interest rates and outlook for future volume and margins, general trends in the ~~agronomy assets~~business and/or macro-economic factors could cause the estimated fair value of ~~Thompsons Limited, a wholly owned subsidiary in Ontario, Canada,~~the reporting unit to Sylvite Holdings Inc. of Burlington, Ontario. The sale is expected to close in September 2019. The Andersons will continue to own and operate Thompsons’ grain storage and food processing facilities in Ontario.

fall below its carrying value.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements which relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. The reader is urged to carefully consider these risks and others, including those risk factors listed under Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (“~~2018~~2019 Form 10-K”). In some cases, the reader can identify forward-looking statements by terminology such as may, anticipates, believes, estimates, predicts, or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These forward-looking statements relate only to events as of the date on which the statements are made and the Company undertakes no obligation, other than any imposed by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Critical Accounting Policies and Estimates

Our critical accounting policies and critical accounting estimates, as described in our ~~2018~~2019 Form 10-K, have not materially changed through the ~~second~~first quarter of 2019, other than as a result of adopting the new lease accounting standard. See additional information regarding these policies in the Notes to the Condensed Consolidated Financial statements herein in Notes 1 and 14.2020.

Executive Overview

Our operations are organized, managed and classified into four reportable business segments: Trade, Ethanol, Plant Nutrient, and Rail. Each of these segments is generally based on the nature of products and services offered. In January, the Company completed the acquisition of 67.5% of LTG equity that it did not already own. The transaction also resulted in the consolidation of Thompsons Limited of Ontario, Canada and related entities, which LTG and the Company jointly owned. The Company is continuing to evaluate its segment reporting structure as a result of the acquisition. The presentation here includes a majority of the acquired business within the legacy Grain Group which has been renamed, Trade Group. The acquired ethanol trading business is included within the Ethanol Group. As a result of the LTG acquisition, the Company also moved certain commission income and an elevator lease from the legacy Grain Group to the Ethanol Group to better align business segments. Prior year results have been recast to reflect this change.

The agricultural commodity-based business is one in which changes in selling prices generally move in relationship to changes in purchase prices. Therefore, increases or decreases in prices of the agricultural commodities that the business deals in will have a relatively equal impact on sales and cost of sales and a much less significant impact on gross profit. As a result, changes in sales between periods may not necessarily be indicative of the overall performance of the business and more focus should be placed on changes in gross profit.

The Company has ethanol production, merchandising and goodwill assets within the Ethanol segment. Due to an adverse change within the industry, the Company determined that a triggering event had occurred during the quarter for the asset group to be assessed for impairment. The asset group was determined to not be impaired in the first quarter, however, continuing adverse market conditions or alternative management decisions surrounding the future of these operations may result in future impairment considerations.

Further, ~~we have~~the Company has considered the potential impact that the book value of the Company’s total shareholders’ equity exceeded the Company’s market capitalization ~~value at various points during the quarter~~ for impairment indicators. ~~While we~~Management ultimately concluded that, while the ~~book value in excess of~~Company's shareholders equity exceeded the market capitalization for the period, an impairment triggering event had not occurred. The Company continues to believe that the share price is not an accurate reflection of its current value. While the adverse conditions are currently present and pervasive in the agriculture space during this time, the long-term outlook remains positive and we believe that the market’s impact on the Company’s equity value does not actually reflect the impact of these external factors on the Company. Further, due to internal reorganizations within the Plant Nutrient, Ethanol and Trade segments, certain portions of goodwill have been subject to a ~~short-term anomaly and~~quantitative goodwill assessment during the period which resulted in no impairment charges. As a result of these tests, the Company concluded that no impairment ~~triggering event has occurred,~~existed as of March 31, 2020.

Recent Developments

For the ~~assessment performed for goodwill may be influenced by these market conditions and affect~~first quarter of 2020, the ~~calculated fair value~~global emergence of the ~~reporting unit~~novel strain of COVID-19 had a significant impact to the global economy, including several industries in which The Andersons operates. The government-induced stay-at-home orders reduced demand for gasoline, ethanol and corn, primarily impacting the Ethanol and Trade Groups. As previously announced the Company has idled its ethanol plants for extended maintenance shutdowns in an effort to maintain the Company's ethanol plants, protect employees and conserve cash. The future impacts of the COVID-19 pandemic on the Company’s business are highly uncertain at ~~the annual October 1 assessment date. A goodwill impairment charge might result if recent weaknesses~~this time.

The Company is a critical infrastructure industry as that term has been defined by The United States Department of Homeland Security, Cybersecurity and Infrastructure Agency, in ~~our business units prove~~its March 19, 2020 Memorandum. As COVID-19 continues to ~~be long-term in nature and affect our forecast for future years. Total goodwill across~~spread, the Company is ~~$135.9 million.~~currently conducting business as usual to the greatest extent possible in the current circumstances. The Company is taking a variety of measures to ensure the availability of its services throughout our network, promote the safety and security of our employees, and support the communities in which we operate. Certain modifications the Company has made in response to the COVID-19 pandemic include: implementing a period of working at home for all non-essential support staff; restricting employee business travel; strengthening clean workplace practices; reinforcing socially responsible sick leave recommendations; limiting visitor and third-party access to Company facilities; launching internal COVID-19 resources for employees; creating a pandemic response team comprised of employees and members of senior management; encouraging telephonic and video conference-based meetings along with other hygiene and social distancing practices recommended by health authorities including Health Canada, the U.S. Centers for Disease Control and Prevention, and the World Health Organization; and supplementing employment insurance payments and maintaining health benefit coverage of employees through the pandemic. The Company is responding to this crisis through measures designed to protect our workforce and preventing disruptions to the Company's operations within the North American agricultural supply chain. The Andersons service is deemed essential as part of the agricultural industry.

As previously announced, the Company’s annual meeting of shareholders, held on May 8, 2020, will be conducted via a virtual-only format by live webcast online for the first time. We have observed many other companies, taking precautionary and preemptive actions to address the COVID-19 pandemic, and companies may take further actions that alter their normal business operations. We will continue to actively monitor the situation and may take further actions that could materially alter our business operations as may be required or recommended by federal, provincial, state or local authorities, or that we determine are in the best interests of our employees, customers, shareholders, partners, suppliers, and other stakeholders.

Additional information concerning the impact COVID-19 may have to our future business and results of operations is provided in Part II, Item 1A. Risk Factors.

Trade Group

The Trade Group’s results in the ~~second~~first quarter reflect ~~improved market conditions from strong~~lower income as the Group recorded a significant loss on its corn ~~and wheat~~position during the quarter as basis ~~appreciation and capitalizing on better merchandising opportunities~~depreciated due to ~~increased market volatility.~~the sharp reduction in ethanol demand along with significant addition to credit reserves for customers in the ethanol market. The food and specialty ingredients businesses enjoyed a strong quarter, more than doubling last year's first quarter results partially offsetting the loss from corn basis depreciation and credit reserves.

Agricultural inventories on hand at ~~June 30, 2019~~March 31, 2020 were ~~96.1~~128.8 million bushels, of which ~~1.3~~3.9 million bushels were stored for others. These amounts compare to ~~80.9~~136.8 million bushels on hand at ~~June 30, 2018,~~March 31, 2019, of which ~~0.1~~1.9 million bushels were stored for

others. Total Trade storage capacity, including temporary pile storage, was approximately ~~216~~205 million bushels at ~~June 30, 2019~~March 31, 2020 compared to ~~145~~218 million bushels at ~~June 30, 2018. This increase in capacity was a result of the LTG acquisition.~~March 31, 2019.

The ~~Trade Group will seek to capitalize~~group expects continued pressure on ~~continued market volatility, but expects headwinds~~the profitability of its Eastern assets until the 2020 corn crop is harvested. However, the group believes an expected large corn crop in ~~the second half of the~~2020 should help create increased space income beginning later this year ~~from the unpredictability of the crop production in the Eastern Corn Belt due to the extreme weather during the first half of the year.~~and into 2021.

Ethanol Group

The Ethanol Group's ~~second~~first quarter results ~~remained profitable despite an extremely weak margin environment. The construction~~were significantly impacted by the COVID-19 pandemic as the lack of demand created a surplus of supply of both oil and ethanol driving margins negative during the ~~Ethanol Group's new bio-refinery facility continues and the project is on target to be operational in the third quarter of 2019.~~quarter. The Ethanol Group expects ~~the margin~~these headwinds to continue ~~into~~as long as the ~~second half~~lack of ~~the year due to rising corn basis levels.~~demand from COVID-19 continues.

Ethanol and related co-products volumes for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ were as follows:


					Three months ended March 31,
(in thousands)	Three months ended June 30,		Six months ended June 30,		2020	2019
	2019	2018	2019	2018
Ethanol (gallons shipped)	130,297	117,061	261,325	220,136	147,345	131,028
E-85 (gallons shipped)	13,959	16,577	22,892	31,479	9,093	8,932
Corn Oil (pounds shipped)	4,821	5,567	9,754	10,374	29,294	4,932
DDG (tons shipped) *	36	42	73	81	536	36

* DDG tons shipped converts wet tons to a dry ton equivalent amount

The above table shows only shipped volumes ~~reflected~~that flow through the Consolidated Financial Statements of the Company. As the Company merged its former unconsolidated LLCs into the consolidated TAMH entity in the ~~Company's revenues.~~fourth quarter of 2019, these consolidated volumes are now included in the 2020 amounts above. Total ethanol, DDG, and corn oil ~~and DDG~~ production by the unconsolidated LLCs for the first quarter of 2019 is ~~higher.~~actually higher than disclosed above. However, the portion of ~~that~~this volume that iswas sold from the unconsolidated LLCs directly to ~~its~~their customers for the first quarter of 2019 is excluded here. ~~The increase in ethanol gallons shipped is a result of the LTG acquisition.~~

Plant Nutrient Group

The Plant Nutrient Group's ~~second~~first quarter results ~~reflect improved primary~~were an improvement from the prior period, primarily as a result of the Engineered Granules business, which was driven by lower of cost of sales for its cob-based products. The Ag Supply Chain and ~~specialty nutrient margins and depressed~~Specialty Liquids businesses were comparable to the prior year. While volumes were up, due to ~~unprecedented wet weather~~product mix, overall margin per ton was lower overall for the full quarter, but improved planting began in ~~much of its core footprint. The Group is optimistic margins will remain strong for~~ the second half of ~~the year despite the lawn business expecting to continue to face headwinds.~~March.

Storage capacity at our wholesale nutrient and farm center facilities, including leased storage, was approximately ~~487~~486 thousand tons for dry nutrients and approximately 515 thousand tons for liquid nutrients at ~~June 30,~~March 31, 2020 and March 31, 2019, ~~compared~~respectively.

As of January 1, 2020, the group reorganized into three divisions: Ag Supply Chain, which includes wholesale distribution centers and retail farm centers; Specialty Liquids, which includes manufactured liquid products intended for agricultural and industrial uses; and Engineered Granules, which includes granular products for turf and agricultural uses, contract manufacturing and cob products. Prior period amounts below were recast to ~~approximately 484 thousand tons for dry nutrients and approximately 515 thousand tons for liquid nutrients at June 30, 2018.~~reflect this change.

Tons of product sold for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ were as follows:

(in thousands) Three months ended June 30, Six months ended June 30,
2019 2018 2019 2018
Primary nutrients 589
657
767
859
Specialty nutrients 207
247
372
433
Other 13
13
29
29
Total tons 809
917
1,168
1,321



	Three months ended March 31,
(in thousands)	2020	2019
Ag Supply Chain	211	170
Specialty Liquids	73	59
Engineered Granules	121	130
Total tons	405	359

In the table above, Ag Supply Chain represents facilities principally engaged in the wholesale distribution and retail sale and application of primary agricultural nutrients ~~is comprised of~~such as bulk nitrogen, phosphorus, and ~~potassium from our wholesale~~potassium. Specialty Liquid locations produce and ~~farm center businesses. Specialty nutrients encompasses~~sell a variety of low-salt liquid starter fertilizers, micronutrients for ~~wholesale~~agricultural use, and ~~farm center businesses,~~specialty products for use in various industrial processes. Engineered Granules facilities primarily manufacture granulated dry products for use in specialty turf and agricultural applications and a variety of corncob-based products

The group's near-term outlook is positive, as ~~well as~~weather has been favorable for planting and a large corn crop is anticipated. However, a significant decrease in corn prices may cause some planting to shift from corn to beans and may lessen growers' and other customers' ability to buy the ~~lawn business. Other tons include those from the cob business.~~group's products.

Rail Group

The Rail Group results ~~improved~~declined mainly due to ~~stronger~~fewer car sales than the prior year. Leasing income slightly decreased from the prior year as the group faced headwinds in the sand and ethanol markets as well as lower lease renewal rates. Average utilization rates decreased from ~~more~~95.7 percent in the first quarter of 2019 to 89.0 percent in the first quarter of 2020 as the group had fewer cars on lease from the sand and an impairment charge in the prior year. These increases were partially offset by a decrease in income from car sales and other services. Average utilization rates increased from 89.5 percent in the second quarter of 2018 to 94.6 percent in the second quarter of 2019. A portion of this

increase, however, is attributable to the railcar scrap program which occurred in the second quarter of 2018. Additionally, the Company focused on putting idle cars in service and growing the fleet with strategic purchases.ethanol market headwinds. Rail Group assets under management (owned, leased or managed for financial institutions in non-recourse arrangements) at ~~June 30, 2019~~March 31, 2020 were ~~23,966~~24,416 compared to ~~23,059~~23,550 at ~~June 30, 2018.~~March 31, 2019.

The ~~leasing business continues to perform well with more cars~~group expects continued pressure on ~~lease~~utilization and ~~higher average~~ lease rates, as the COVID pandemic has driven railcar loadings 20 percent lower year over ~~year. Lease rates and utilization rates have~~year for several weeks running. This condition will also likely ~~hit their peak but should remain steady.~~decrease demand for contract railcar repairs.

Other

Our “Other” activities include corporate income and expense and cost for functions that provide support and services to the operating segments. The results include expenses and benefits not allocated to the operating segments, including a portion of our ERP project, and other elimination and consolidation adjustments.

Operating Results

The following discussion focuses on the operating results as shown in the Condensed Consolidated Statements of Operations and includes a separate discussion by segment. Additional segment information is included herein in Note ~~13,~~12, Segment Information.

Comparison of the three months ended ~~June 30, 2019~~March 31, 2020 with the three months ended ~~June 30, 2018:~~March 31, 2019 including a reconciliation of GAAP to non-GAAP measures:


	Three months ended June 30, 2019																Three months ended March 31, 2020
(in thousands)	Trade			Ethanol			Plant Nutrient		Rail		Other			Total			Trade			Ethanol			Plant Nutrient			Rail		Other			Total
Sales and merchandising revenues	$	1,766,305		$	245,143		$	270,577	$	43,016	$	—		$	2,325,041		$	1,378,040		$	313,039		$	124,913		$	37,113	$	—		$	1,853,105
Cost of sales and merchandising revenues	1,663,459			240,831			231,779		28,244		—			2,164,313			1,315,574			342,438			104,549			27,414		—			1,789,975
Gross profit	102,846			4,312			38,798		14,772		—			160,728			62,466			(29,399		)	20,364			9,699		—			63,130
Operating, administrative and general expenses	67,995			4,697			21,079		7,740		5,407			106,918			68,155			6,115			19,741			5,259		5,790			105,060
Asset impairment	3,081			—			—		—		—			3,081
Interest expense (income)	10,243			(906		)	2,386		4,181		(177		)	15,727
Interest expense (income), net																	7,188			2,357			1,785			4,483		(226		)	15,587
Equity in earnings (losses) of affiliates, net	(1,614		)	1,457			—		—		—			(157		)	129			—			—			—		—			129
Other income (expense), net	3,818			194			570		329		652			5,563			2,765			446			(30		)	1,050		582			4,813
Income (loss) before income taxes	23,731			2,172			15,903		3,180		(4,578		)	40,408			(9,983		)	(37,425		)	(1,192		)	1,007		(4,982		)	(52,575		)
Income (loss) attributable to the noncontrolling interests	—			(477		)	—		—		—			(477		)
Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc.	$	23,731		$	2,649		$	15,903	$	3,180	$	(4,578	)	$	40,885
Income (loss) before income taxes attributable to the noncontrolling interests																	—			(13,449		)	—			—		—			(13,449		)
Non-GAAP Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc.																	$	(9,983	)	$	(23,976	)	$	(1,192	)	$	1,007	$	(4,982	)	$	(39,126	)


	Three months ended June 30, 2018															Three months ended March 31, 2019
(in thousands)	Trade		Ethanol			Plant Nutrient		Rail		Other			Total			Trade			Ethanol			Plant Nutrient			Rail		Other			Total
Sales and merchandising revenues	$	365,100	$	201,758		$	303,106	$	41,438	$	—		$	911,402		$	1,537,686		$	269,166		$	128,525		$	41,415	$	—		$	1,976,792
Cost of sales and merchandising revenues	331,213		195,896			265,939		27,880		—			820,928			1,470,289			263,766			107,591			25,482		—			1,867,128
Gross profit	33,887		5,862			37,167		13,558		—			90,474			67,397			5,400			20,934			15,933		—			109,664
Operating, administrative and general expenses	26,444		2,770			21,024		5,863		3,752			59,853			71,375			4,990			23,169			8,151		5,664			113,349
Asset impairment	1,564		—			—		4,708		—			6,272
Interest expense (income)	3,930		(270		)	1,641		2,718		(194		)	7,825
Interest expense (income), net																10,804			(712		)	2,261			3,679		(122		)	15,910
Equity in earnings (losses) of affiliates, net	5,510		4,293			—		—		—			9,803			(131		)	1,650			—			—		—			1,519
Other income (expense), net	1,248		(476		)	622		675		759			2,828			(2,990		)	84			567			209		616			(1,514		)
Income (loss) before income taxes	8,707		7,179			15,124		944		(2,799		)	29,155			(17,903		)	2,856			(3,929		)	4,312		(4,926		)	(19,590		)
Income (loss) attributable to the noncontrolling interests	—		(116		)	—		—		—			(116		)
Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc.	$	8,707	$	7,295		$	15,124	$	944	$	(2,799	)	$	29,271
Income (loss) before income taxes attributable to the noncontrolling interests																—			(155		)	—			—		—			(155		)
Non-GAAP Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc.																$	(17,903	)	$	3,011		$	(3,929	)	$	4,312	$	(4,926	)	$	(19,435	)

Trade Group

Operating results for the Trade Group increased by ~~$15.0~~$7.9 million compared to the results of the same period last ~~year.~~year, however prior year results included $11.6 million of transaction-related expenses. Sales and merchandising revenues ~~increased~~decreased by ~~$1,401.2~~$159.6 million and cost of sales and merchandising revenues ~~increased $1,332.2~~decreased $154.7 million for ~~favorable~~an unfavorable net gross profit impact of ~~$69.0~~$4.9 million. ~~Substantially all~~This decrease was primarily driven by the depreciation of corn basis and the ~~gross profit increase was a direct result of acquiring LTG and Thompsons, however,~~decreased oil demand creating headwinds in the ~~Company also realized significant basis appreciation on its corn and wheat positions.~~Company's frac sand operations.

Operating, administrative and general expenses ~~increased~~decreased by ~~$41.6~~$3.2 million. The ~~acquisition of~~decrease from the ~~remaining equity~~prior year is primarily related to transaction expenses that did not recur in ~~LTG and Thompsons accounted for $39.4~~2020. This decrease was partially offset by approximately $3.4 million of ~~this increase. Included in~~additional bad debt reserves for customers that were adversely impacted by the increased expenses are several acquisition related items, such as, $1.3 million of stock-based compensation expense, $0.4 million of incremental depreciation and amortization expenses and $0.4 million of other transaction-related costs.COVID-19 pandemic.

Interest expense ~~increased $6.3~~decreased $3.6 million due to the ~~increased~~Company paying down debt ~~levels resulting from~~and lower group borrowings on the ~~acquisition and rising interest rates.~~

~~Equity in earnings~~Company's short-term line of ~~affiliates decreased by $7.1~~credit compared to the prior year. Prior year results also include a $0.6 million write-off of deferred financing fees as ~~LTG and Thompsons are now consolidated entities.~~part of its new credit facility.

Other income ~~net includes a $2.4~~increased by $5.8 million ~~adjustment to~~as there were approximately $2.0 million worth of insurance settlements in the ~~previously recorded~~current year along with an initial remeasurement loss of $3.5 million ~~loss~~ on the Company's pre-existing ~~investments~~equity method investment in LTG ~~and Thompsons, pursuant to~~that didn't recur in the accounting rules that govern step acquisitions, as the Company finalized its valuation of the pre-acquisition fair value of these investments during the quarter as a part of the preliminary purchase price accounting.current year.

Ethanol Group

Operating results for the Ethanol Group declined ~~$4.6~~$27.0 million from the same period last year. Sales and merchandising revenues increased ~~$43.4~~$43.9 million and cost of sales and merchandising revenues increased ~~$44.9~~$78.7 million compared to ~~2018~~2019 results, ~~were~~ primarily attributable to the ~~LTG acquisition.~~TAMH merger. Gross profit decreased by ~~$1.6~~$34.8 million compared to ~~2018~~2019 results ~~due~~from the fallout of the COVID-19 pandemic leading to an over saturation of the supply of oil and a ~~compressed industry~~negative margin ~~environment.~~environment for the ethanol industry.

Operating, administrative and general expenses increased ~~$1.9~~$1.1 million primarily due to an increase in labor and benefits, most of which was from the ~~addition of the acquired ethanol trading team.~~TAMH merger.

Interest expense ~~decreased $0.6~~increased $3.1 million due to the ~~capitalization~~inclusion of interest expense related to the consolidation of TAMH and due to ELEMENT's ability to capitalize interest related to the construction of the ELEMENT ~~plant.~~facility in the prior year.

Equity in earnings of affiliates decreased $1.7 million as a result of the former unconsolidated ethanol LLCs being merged into the consolidated entity of TAMH.

Plant Nutrient Group

Operating results for the Plant Nutrient Group increased by ~~$0.8~~$2.7 million compared to the same period in the prior year. Sales and merchandising revenues decreased ~~$32.5 million. This was driven by a significant decrease in primary~~$3.6 million and ~~specialty ton~~

~~volumes. These decreases are due to unfavorable weather conditions when compared to the prior year. Cost~~cost of sales and merchandising revenues decreased by ~~$34.2~~$3.0 million resulting in decreased gross profit of $0.6. This was driven by weaker margins in Ag Supply Chain sales when compared to the favorable positions the Company had in the same period of the prior year.

Operating, administrative and general expenses decreased $3.4 million due to ~~the decrease in sales volumes, improved cost containment, operational efficiency and product mix. While volumes decreased, margins improved from~~more efficient production compared to the prior ~~year and led to an increased gross profit of $1.6 million.~~year.

Interest expense ~~increased $0.7~~decreased $0.5 million from ~~carrying higher levels of inventories due~~lower interest rates compared to the ~~wet weather that delayed and reduced planting.~~prior year.

Rail Group

Operating results ~~increased $2.2~~declined $3.3 million from the same period last year while sales and merchandising revenues ~~increased $1.6~~decreased $4.3 million. This ~~increase~~decrease was mainly driven by a ~~$2.1~~$3.7 million ~~increase~~decrease in leasing revenues ~~from more~~as a result of lower cars on ~~lease. This increase was partially offset~~lease and lower average lease rates from ~~decreased car sale revenues of $0.5 million as~~ the ~~Company sold more cars in the second quarter of 2018.~~prior year. Cost of sales and merchandising increased ~~$0.4~~$1.9 million compared to the prior year due to higher storage costs on more idle cars and higher maintenance and depreciation ~~expense.~~expenses from the larger fleet from the prior year. As a result, gross profit ~~increased $1.2~~decreased $6.2 million compared to ~~last~~the period year.

Operating, administrative and general expenses ~~increased $1.9~~decreased $2.9 million driven by ~~increased~~more efficient labor costs ~~related to opening and closing~~within the repair ~~shops and increased labor and workers’ compensation expenses. The prior period results also include an impairment charge on idle fleet assets~~business.

Interest expense increased ~~$1.5~~$0.8 million due to higher debt ~~balances and rising interest rates.~~

~~Other~~

~~Operating, administrative and general expenses increased $1.7 million due to favorable benefit costs in the prior year.~~balances.

Income Taxes

For the three months ended ~~June 30, 2019,~~March 31, 2020, the Company recorded an income tax ~~expense~~benefit of ~~$11.0~~$1.5 million at an effective rate of ~~27.2%~~2.8%. ~~In 2018,~~For the three months ended March 31, 2019, the Company recorded an income tax ~~expense~~benefit of ~~$7.7~~$5.4 million at an effective tax rate of ~~26.6%~~27.8%. The ~~increase~~decrease in effective tax rate for the three months ended ~~June 30, 2019~~March 31, 2020 as compared to the same period last year ~~was~~ primarily attributed to ~~the impacts of~~ nondeductible ~~compensation and noncontrolling interest, partially offset by benefits from income taxes on foreign earnings.~~

~~Comparison of the six months ended June 30, 2019 with the six months ended June 30, 2018:~~

Six months ended June 30, 2019
(in thousands) Trade Ethanol Plant Nutrient Rail Other Total
Sales and merchandising revenues $ 3,364,326
$ 453,974
$ 399,102
$ 84,431
$ —
$ 4,301,833
Cost of sales and merchandising revenues 3,192,491
445,854
339,370
53,726
—
4,031,441
Gross profit 171,835
8,120
59,732
30,705
—
270,392
Operating, administrative and general expenses 140,411
8,646
44,248
15,891
11,071
220,267
Asset impairment 3,081
—
—
—
—
3,081
Interest expense (income) 21,158
(1,730 ) 4,647
7,860
(298 ) 31,637
Equity in earnings (losses) of affiliates, net (1,745 ) 3,107
—
—
—
1,362
Other income (expense), net 828
278
1,137
538
1,268
4,049
Income (loss) before income taxes 6,268
4,589
11,974
7,492
(9,505 ) 20,818
Income (loss) attributable to the noncontrolling interests —
(632 ) —
—
—
(632 )
Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc. $ 6,268
$ 5,221
$ 11,974
$ 7,492
$ (9,505 ) $ 21,450

Six months ended June 30, 2018
(in thousands) Trade Ethanol Plant Nutrient Rail Other Total
Sales and merchandising revenues $ 641,126
$ 375,422
$ 438,723
$ 91,870
$ —
$ 1,547,141
Cost of sales and merchandising revenues 582,015
365,868
379,319
65,760
—
1,392,962
Gross profit 59,111
9,554
59,404
26,110
—
154,179
Operating, administrative and general expenses 52,265
5,932
41,381
12,094
12,438
124,110
Asset impairment 1,564
—
—
4,708
—
6,272
Interest expense (income) 6,892
(314 ) 3,082
5,086
78
14,824
Equity in earnings (losses) of affiliates, net 7,497
5,879
—
—
—
13,376
Other income (expense), net 1,573
138
1,274
691
838
4,514
Income (loss) before income taxes 7,460
9,953
16,215
4,913
(11,678 ) 26,863
Income (loss) attributable to the noncontrolling interests —
(398 ) —
—
—
(398 )
Income (loss) before income taxes, net of noncontrolling interests attributable to The Andersons, Inc. $ 7,460
$ 10,351
$ 16,215
$ 4,913
$ (11,678 ) $ 27,261

~~Trade Group~~

Operating results for the Trade Group decreased by $1.2 million compared to the results of the same period last year. Sales and merchandising revenues increased $2,723.2 million and cost of sales and merchandising revenues increased $2,610.5 million for an increase in net gross profit of $112.7 million. The gross profit increase was a direct result of acquiring LTG and Thompsons.

Operating, administrative and general expenses increased $88.1 million. The acquisition of the remaining equity in LTG and Thompsons accounted for $80.4 million of this increase. Included in the increased expenses are several purchase accounting related items, such as, $4.8 million of stock-based compensation expense, $4.8 million of incremental depreciation and amortization expense and $1.2 million of other transaction-related costs.

Interest expense increased $14.3 million primarily due to the acquisition and rising interest rates. The Company also wrote off $0.6 million in deferred financing fees as part of its new credit facility.

~~Equity in earnings of affiliates decreased by $9.2 million because LTG and Thompsons are now consolidated entities.~~

Other income, net includes a $1.1 million loss on the pre-acquisition fair value of our LTG and Thompsons investments compared to our previous carrying values. The loss was driven by prior periods' foreign currency translation losses related to ~~Thompsons, previously recorded in Other Comprehensive Income, that were recognized in earnings upon the consolidation of Thompsons.~~

~~Ethanol Group~~

~~Operating results for~~our noncontrolling interests within the Ethanol ~~Group decreased $5.1 million from the same period last year. Sales and merchandising revenues increased $78.6 million and cost of sales and merchandising revenues increased $80.0 million compared to~~ ~~2018~~ results. The incremental sales and corresponding cost of sales are attributable to the LTG acquisition. Lower average sales prices from an oversupply of ethanol in the market resulted in decreased gross profit of $1.4 million.

~~Operating, administrative and general expenses increased $2.7 million primarily due to an increase in labor and benefits, most of which was from the addition of the acquired ethanol trading team.~~

~~Interest expense decreased $1.4 million due to the capitalization of interest related to the construction of the ELEMENT plant.~~

~~Plant Nutrient Group~~

Operating results for the Plant Nutrient Group decreased $4.2 million compared to the same period in the prior year. Sales and merchandising revenues decreased $39.6 million. This was driven by a significant decrease in primary and specialty ton volumes.group. These decreases are due to unfavorable weather conditions as well as higher volumes in the lawn business that did not recur in the current year. Cost of sales and merchandising revenues decreased by $39.9 million due to the decrease in sales. While primary nutrient volumes decreased, improved margins led to increased gross profit of $0.3 million.

~~Operating, administrative and general expenses increased $2.9 million primarily due an increase in rent and storage and unfavorable costs from low production volumes due to weak market conditions.~~

~~Interest expense increased $1.6 million from carrying higher levels of inventories as a result of the wet weather that delayed and reduced planting.~~

~~Rail Group~~

Operating results for the Rail Group increased $2.6 million from the same period in the prior year. While operating results improved sales and merchandising revenues decreased $7.4 million. This decrease in revenues was driven by a decrease of $14.3 million in car sale revenues as the Company sold more cars in 2018, partiallylosses were offset by an increase of $5.1 million in leasing revenues due to higher utilization rates with more cars on lease and $1.8 million in repair and other revenues. Cost of sales and merchandising revenues decreased $12.0 million compared toNOL carryback tax savings opportunities as provided by the ~~prior year due to lower car sales and improved margins in services.~~

Operating, administrative and general expenses increased $3.8 million driven by a $1.1 million increase in labor and benefits due to the growth of the repair business and increased costs related to opening and closing repair shops and increased labor and workers’ compensation expenses. The prior period results also include an impairment charge on idle fleet assets. As a result, gross profit increased $4.6 million compared to last year.

~~Interest expense increased $2.8 million due to rising interest rates and higher debt balances.~~

~~Other~~

~~Operating, administrative and general expenses decreased $1.4 million due to severance and other IT implementation costs reflected in 2018 which did not recur in 2019.~~

~~Income Taxes~~

For the six months ended June 30, 2019, the Company recorded income tax expense of $5.6 million at an effective rate of 26.7%. In 2018, the Company recorded an income tax expense of $7.4 million at an effective tax rate of 27.7%. The decrease in effective tax rate for the six months ended June 30, 2019 as compared to the same period last year was primarily attributed to income taxes on foreign earnings and discrete activity in the prior period for a statutory merger that did not recur in the current period.CARES act.

Liquidity and Capital Resources

Working Capital

At ~~June 30, 2019~~March 31, 2020, the Company had working capital of ~~$464.1~~$436.4 million. The following table presents changes in the components of current assets and current liabilities:

(in thousands) June 30, 2019 June 30, 2018 Variance
Current Assets:
Cash and cash equivalents $ 11,087
$ 58,611
$ (47,524 )
Accounts receivable, net 712,294
218,476
493,818
Inventories 753,641
495,611
258,030
Commodity derivative assets – current 233,015
54,259
178,756
Other current assets 58,439
42,648
15,791
Assets held for sale 151
9,816
(9,665 )
Total current assets 1,768,627
879,421
889,206
Current Liabilities:
Short-term debt 426,125
185,000
241,125
Trade and other payables 527,250
282,221
245,029
Customer prepayments and deferred revenue 49,761
16,103
33,658
Commodity derivative liabilities – current 69,369
85,160
(15,791 )
Accrued expenses and other current liabilities 165,383
74,512
90,871
Current maturities of long-term debt 66,678
13,700
52,978
Total current liabilities 1,304,566
656,696
647,870
Working Capital $ 464,061
$ 222,725
$ 241,336

June 30, 2019 current assets increased $889 million in comparison to June 30, 2018. This increase was related to the Trade Group as the current assets balance for the group increased by $914 million from the prior year due to the LTG acquisition. See also the discussion below on additional sources and uses of cash for an understanding of the decrease in cash from prior year.

~~Current liabilities increased $648 million~~ compared to the prior year as the Trade Group current liabilities increased by $366 million due to the acquisition of LTG, and Corporate current liabilities increased by $277 million from the increased debt related to the acquisition detailed in Note 4, Debt.



(in thousands)	March 31, 2020		March 31, 2019		Variance
Current Assets:
Cash, cash equivalents and restricted cash	$	19,693	$	29,991	$	(10,298	)
Accounts receivable, net	539,671		611,290		(71,619		)
Inventories	1,028,076		1,026,465		1,611
Commodity derivative assets – current	149,070		158,277		(9,207		)
Other current assets	85,372		60,586		24,786
Total current assets	$	1,821,882	$	1,886,609	$	(64,727	)
Current Liabilities:
Short-term debt	392,450		434,304		(41,854		)
Trade and other payables	553,416		590,258		(36,842		)
Customer prepayments and deferred revenue	121,148		148,345		(27,197		)
Commodity derivative liabilities – current	90,491		66,623		23,868
Current maturities of long-term debt	80,758		55,160		25,598
Accrued expenses and other current liabilities	147,225		151,648		(4,423		)
Total current liabilities	$	1,385,488	$	1,446,338	$	(60,850	)
Working Capital	$	436,394	$	440,271	$	(3,877	)

Sources and Uses of Cash



	Three Months Ended
(in thousands)	March 31, 2020			March 31, 2019
Net cash used in operating activities	$	(228,430	)	$	(122,045	)
Net cash used in investing activities	(30,416		)	(205,836		)
Net cash provided by financing activities	223,577			336,050

Operating Activities

Our operating activities used cash of ~~$84.8~~$228.4 million and ~~$43.9~~$122.0 million in the first ~~six~~three months of ~~2019~~2020 and ~~2018,~~2019, respectively. The increase in cash used was primarily due to ~~changes~~a result of net losses incurred as well as the seasonality in ~~working capital,~~the use of cash. Cash spend is typically high in the first quarter as ~~discussed above.~~the Company prepares for the spring planting season.

Investing Activities

Investing activities used cash of ~~$271.4~~$30.4 million through the first ~~six~~three months of ~~2019~~2020 compared to cash used of ~~$46.4~~$205.8 million in the prior year. ~~Cash used for~~The decrease from the prior year was a result of the acquisition of ~~business increased $147.7 million due to the~~ LTG ~~acquisition.~~and decreased capital spending.

In ~~2019,~~2020, we expect to spend up to a total of ~~$160~~approximately $31.0 million for the purchase of railcars and related leases and capitalized modifications of railcars. ~~We also expect these purchases to be funded from sales and dispositions of railcars or non-recourse debt of approximately $135 million during the year.~~

~~In addition to the construction of the bio-refinery, total~~Total capital spending ~~for 2019~~ on property, plant and equipment in our base business excluding rail leasing activity, but inclusive of information technology spending is expected to be approximately ~~$180~~$87.0 million.

Financing Activities

Financing activities provided cash of ~~$344.4~~$223.6 million and ~~$114.1~~$336.1 million for the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. This decrease from the prior year was largely due to ~~an increase~~a decrease in proceeds ~~from~~as new debt was issued in the prior year to finance the LTG ~~acquisition and higher seasonal~~acquisition. This decrease in long term debt proceeds was partially offset by an increase in short-term borrowing used to finance working capital.

We are party to borrowing arrangements with a syndicate of banks that provide a total of ~~$1,628.4~~$1,684.0 million in borrowings. ~~This amount includes $70~~Of the total capacity, $491.0 million ~~of debt of ELEMENT LLC, $200 million of debt of The Andersons Railcar Leasing Company LLC, that is non-recourse to the Company, and $183.4 million of debt of Thompsons, that~~ is non-recourse to the Company. ~~Of that total, we~~As of March 31, 2020, the Company had ~~$1,006.1~~$1,006.4 million available for borrowing ~~at June 30, 2019. Consistent~~ with $145.4 million of that total being non-recourse to the ~~higher sales volumes as a result of the acquisition borrowings have also increased.~~Company.

We paid ~~$11.0~~$5.7 million in dividends in the ~~six~~first three months of ~~2019~~2020 compared to ~~$9.3~~$5.5 million in the prior year. WeThe Company paid $0.175 per common share for the dividends paid in January of 2020 and $0.17 per common share for the dividends paid in January ~~and April~~ of ~~2019 and $0.165 per common share for the dividends paid in January and April of 2018.~~2019. On ~~May 10, 2019~~February 21, 2020 we declared a cash dividend of ~~$0.17~~$0.175 per common share payable on ~~July~~April 22, ~~2019~~2020 to shareholders of record on ~~July~~April 1, ~~2019.~~2020.

Certain of our long-term borrowings include covenants that, among other things, impose minimum levels of equity and limitations on additional debt. We are in compliance with all such covenants as of ~~June 30, 2019.~~March 31, 2020. In addition, certain of our long-term borrowings are collateralized by first mortgages on various facilities or are collateralized by railcar assets. Our non-recourse long-term debt is collateralized by ethanol plant assets and railcar assets.

Because we are a significant borrower of short-term debt in peak seasons and the majority of this is variable rate debt, increases in interest rates could have a significant impact on our profitability. However, much of this risk is mitigated by hedging instruments that are in place. In addition, periods of high grain prices and/or unfavorable market conditions could require us to make additional margin deposits on our exchange traded futures contracts. Conversely, in periods of declining prices, we could receive a return of cash.

WeWhile the effects of the coronavirus pandemic are expected to have a negative impact on operating cash flows, we believe our sources of liquidity will be adequate to fund our operations, capital expenditures and ~~payments of dividends in the foreseeable future.~~service our indebtedness.

~~Contractual Obligations~~

~~Future payments due under contractual obligations at June 30, 2019 are as follows:~~

Payments Due by Period

(in thousands)
2019 (remaining six months) 2020-2021 2022-2023 �� After 2023 Total
Long-term debt, recourse $ 44,549
$ 133,841
$ 313,459
$ 332,325
$ 824,174
Long-term debt, non-recourse 4,829
130,859
9,961
6,370
152,019
Interest obligations (a) 41,022
64,013
38,650
30,989
174,674
Operating leases (b) 30,678
34,749
12,294
8,688
86,409
Purchase commitments (c) 2,229,633
665,976
1,395
—
2,897,004
Other long-term liabilities (d) 3,317
6,711
6,804
24,695
41,527
Construction commitment (e) 39,747
—
—
—
39,747
Total contractual cash obligations $ 2,393,775
$ 1,036,149
$ 382,563
$ 403,067
$ 4,215,554

(a) Future interest obligations are calculated based on interest rates in effect as of June 30, 2019 for the Company's variable rate debt and do not include any assumptions on expected borrowings, if any, under the short-term line of credit.

~~(b) Approximately 39% of the operating lease commitments above relate to Rail Group assets that the Company leases from financial intermediaries.~~

(c) Includes the amounts related to purchase obligations in the Company's operating units, including $2,582 million for the purchase of commodities, including grain from producers and $235 million for the purchase of ethanol from the unconsolidated ethanol LLCs. There are also forward commodities sales contracts, including those for grain and ethanol, to consumers and traders and the net of these forward contracts are offset by exchange-traded futures and options contracts or over-the-counter contracts. See the narrative description of businesses for the Grain and Ethanol Groups in Item 1 of 2018 Annual Report on Form 10-K for further discussion.

(d) Other long-term liabilities include estimated obligations under our retiree healthcare programs and principal and interest payments for the financing arrangement on our headquarters. Obligations under the retiree healthcare programs are not fixed commitments and will vary depending on various factors, including the level of participant utilization and inflation. Our estimates of postretirement payments through 2023 have considered recent payment trends and actuarial assumptions.

~~(e) In 2018, the Company entered into an agreement to construct a bio-refinery. The company expects to contribute $70 million in 2019 for the construction of this plant.~~

At ~~June 30, 2019,~~March 31, 2020, we had standby letters of credit outstanding of ~~$32.9~~$76.3 million.

~~Off-Balance Sheet Transactions~~

Our Rail Group utilizes leasing arrangements that provide off-balance sheet financing for its activities. We lease assets from financial intermediaries through sale-leaseback transactions, the majority of which involve operating leasebacks. Rail Group assets we own or lease from a financial intermediary are generally leased to a customer under an operating lease. We also arrange non-recourse lease transactions under which we sell assets to a financial intermediary and assign the related operating lease to the financial intermediary on a non-recourse basis. In such arrangements, we generally provide ongoing maintenance and management services for the financial intermediary and receive a fee for such services.

~~The following table describes our Rail Group asset positions at June 30, 2019:~~



~~Method of Control~~	~~Financial Statement~~	~~Units~~
~~Owned - railcars available for sale~~	~~On balance sheet – current~~	~~289~~
~~Owned - railcar assets leased to others~~	~~On balance sheet – non-current~~	~~21,363~~
~~Railcars leased from financial intermediaries~~	~~Off balance sheet~~	~~2,101~~
~~Railcars in non-recourse arrangements~~	~~Off balance sheet~~	~~170~~
~~Total Railcars~~		~~23,923~~
~~Locomotive assets leased to others~~	~~On balance sheet – non-current~~	24
~~Locomotives leased from financial intermediaries~~	~~Off balance sheet~~	4
~~Total Locomotives~~		28
~~Barge assets leased from financial intermediaries~~	~~Off balance sheet~~	15
~~Total Barges~~		15

~~In addition, we manage 1,027 railcars for third party customers or owners for which we receive a fee.~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For further information, refer to our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. There were no material changes in market risk, specifically commodity and interest rate risk during the ~~quarter~~three months ended ~~June 30, 2019.~~March 31, 2020.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~The Company maintains~~Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures ~~that are designed~~as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of March 31, 2020 to ~~ensure~~provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the ~~Company's~~ Exchange Act ~~reports~~ is (i) recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange Commission's~~SEC rules and forms and ~~that such information is~~(ii) accumulated and communicated to the ~~Company's~~Company’s management, including its ~~Chief Executive Officer~~principal executive officer and ~~Chief Financial Officer ("Certifying Officers"),~~principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on the results of this evaluation, management concluded that, as of June 30, 2019, the Company's disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

~~Management concluded that~~There were no changes in the Company’s ~~system of~~ internal control over financial reporting was effective as of December 31, 2018. As required by Rule 13a-15(d) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of any

change in the Company’s internal controls over financial reporting that have materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

~~The Company acquired the remaining equity of LTG and Thompsons~~ during the first quarter of ~~2019. In~~2020, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the integration of LTG and Thompsons, the Company will implement enhancements to its internal control over financial reporting as necessary. Additionally, the Company is undertaking the phased implementation of an ERP software system. The Company believes it is maintaining and monitoring appropriate internal controls during the implementation period and further believes that its internal control environment will be enhanced as a result of this implementation. There have been no other changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarterExchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. As a result of the COVID-19 pandemic, the majority of our workforce began working remotely in March 2020. These changes to the working environment did not have a material effect on our internal controls over financial ~~reporting.~~reporting during the most recent quarter.

Part II. Other Information

Item 1. Legal Proceedings

~~We are currently~~

The Company is subject to ~~various~~legal proceedings and claims that have not been fully resolved and ~~suits arising~~that have arisen in the ordinary course of ~~business, which include environmental issues, employment claims, contractual disputes,~~business. Except as described in Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 13, “Commitments and ~~defensive counter~~Contingencies,” in the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims. ~~We accrue liabilities where~~

The outcome of litigation ~~losses are deemed probable~~is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and ~~estimable. We believe it is unlikely~~operating results for that ~~the results of our current legal proceedings, even if unfavorable, will~~reporting period could be materially ~~different from what we currently have accrued. There can be no assurance, however,~~adversely affected. The Company settled certain matters during the first quarter of 2020 that ~~any claims or suits arising in the future, whether taken~~did not individually or in the aggregate ~~will not~~ have a material ~~adverse effect~~impact on ~~our~~the Company’s financial condition or ~~results of operations.~~operating results.

Item 1A. Risk Factors

~~Our operations are subject~~

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to ~~risks~~those described in Part I, Item 1A of the 2019 Form 10-K under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and ~~uncertainties that could cause actual~~operating results to ~~differ~~vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. There have been no material changes to the Company’s risk factors since the 2019 Form 10-K with the exception of those ~~discussed~~disclosed below.

The COVID-19 pandemic could negatively affect the Company's business and operating results

The future impacts of the global emergence of the novel strain of Coronavirus and the disease it causes on the Company's business or operating and financial results are unpredictable and cannot be identified with certainty at this time. The widespread health crisis has adversely affected the global economy and resulted in ~~this Form 10-Q~~a widespread economic downturn which could adversely impact demand for our services. Such interruptions could include fluctuations to commodity prices, disruptions or restrictions on the ability to transport freight in the ordinary course, temporary closures of facilities and ~~could~~ports, or the facilities and ports of our customers, decreased demand for our products, and/or changes to export/import restrictions. The pandemic caused by COVID-19 may impact the seasonal trends that typically characterize our revenues and operating income. There is no assurance that the outbreak will not have a material adverse impact on our ~~financial results. These risks can~~business or results of operations. Further, our operations could be ~~impacted by factors~~negatively affected if a significant number of our employees are unable to perform their normal duties because of contracting COVID-19 or based on further direction from governments, public health authorities or regulatory agencies. The extent of the impact, if any, will depend on developments beyond our control, including actions taken by governments, financial institutions, monetary policy authorities, and public health authorities to contain and respond to public health concerns and general economic conditions as ~~well~~a result of the pandemic.

We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required or recommended by ~~errors~~federal, provincial, state or local authorities, or that we determine are in the best interests of our employees, customers, partners, suppliers, shareholders and ~~omissions~~other stakeholders. We cannot be certain of potential effects any such alterations or modifications may have on our ~~part. The most significant factors known to us that could materially adversely affect our~~ business ~~financial condition~~ or operating and financial results ~~are described in our 2018 Form 10-K (Item 1A).~~for the fiscal year ending December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Period
Total Number of Shares Purchased⁽¹⁾
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

April 2019 704
32.32
—
—
May 2019 —
—
—
—
June 2019 —
—
—
—
Total 704
32.32
—
—



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 2020	64,420	$	25.28	—	—
February 2020	2,101	22.79		—	—
March 2020	1,913	18.85		—	—
Total	68,434	$	25.02	—	—

(1) During the three months ended ~~June 30, 2019,~~March 31, 2020, the company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

(2) No shares were purchased as part of publicly announced plans or programs.

Item 4. Mine Safety Disclosure

We are committed to protecting the occupational health and well-being of each of our employees. Safety is one of our core values and we strive to ensure that safety is the first priority for all employees. Our internal objective is to achieve zero injuries and incidents across the Company by focusing on proactively identifying needed prevention activities, establishing standards and evaluating performance to mitigate any potential loss to people, equipment, production and the environment. We have implemented employee training that is geared toward maintaining a high level of awareness and knowledge of safety and health issues in the work environment. We believe that through these policies we have developed an effective safety management system.

Under the Dodd-Frank Act, each operator of a coal or other mine is required to include certain mine safety results within its periodic reports filed with the SEC. As required by the reporting requirements included in §1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, the required mine safety results regarding certain mining safety and health matters for each of our

mine locations that are covered under the scope of the Dodd-Frank Act are included in Exhibit 9595.1 of Item 6. Exhibits of this Quarterly Report on Form 10-Q.

Item 6. Exhibits

~~(a) Exhibits~~




~~No.~~Exhibit Number		Description

~~10.1~~10.1*		Form of Restricted Share Award

10.2*		Form of Performance Share Unit Agreement - ~~Earnings Per Share~~Total Shareholder Return ~~(filed herewith).~~

~~10.2~~		~~Form of Restricted Share Award - Non-Employee Directors Agreement~~ ~~(filed herewith).~~

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

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

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

9595.1*		Mine Safety Disclosure ~~(filed herewith).~~

~~101~~101**		~~Financial Statements from~~Inline XBRL Document Set for the ~~interim report~~condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104**		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, ~~of The Andersons, Inc. for~~included in the period ended June 30, 2019, formatted in XBRL: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statement of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.Exhibit 101 Inline XBRL Document Set.

* Filed herewith
** Furnished herewith

Items 3 and 5 are not applicable and have been omitted

Signatures

Pursuant to the requirements 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: ~~August~~May 8, ~~2019~~2020		By /s/ Patrick E. Bowe
		Patrick E. Bowe
		Chief Executive Officer (Principal Executive Officer)

Date: ~~August~~May 8, ~~2019~~2020		By /s/ Brian A. Valentine
		Brian A. Valentine
		~~Senior~~Executive Vice President and Chief Financial Officer (Principal Financial Officer)

~~Exhibit Index~~

~~The Andersons, Inc.~~




~~No.~~		~~Description~~

~~10.1~~		~~Form of Performance Share Unit Agreement - Earnings Per Share~~ ~~(filed herewith).~~

~~10.2~~		~~Form of Restricted Share Award - Non-Employee Directors Agreement~~ ~~(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).~~

95		~~Mine Safety Disclosure~~ ~~(filed herewith).~~

~~101~~		Financial Statements from the interim report on Form 10-Q of The Andersons, Inc. for the period ended June 30, 2019, formatted in XBRL: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statement of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

4740



	Six Months Ended
	Common Shares		Additional Paid-in Capital			Treasury Shares			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Noncontrolling Interests			Total
Balance at December 31, 2017	$	96	$	224,622		$	(40,312	)	$	(2,700	)	$	633,496		$	7,697		$	822,899
Net income (loss)												19,829			(398		)	19,431
Other comprehensive income (loss)									(2,647		)							(2,647		)
Cash received from noncontrolling interest															21,806			21,806
Adoption of accounting standard, net of income tax of $2,869												(8,441		)				(8,441		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (120 shares)			(1,363		)	4,631												3,268
Dividends declared ($0.33 per common share)												(9,326		)				(9,326		)
Restricted share award dividend equivalents						120						(120		)				—
Balance at June 30, 2018	$	96	$	223,259		$	(35,561	)	$	(5,347	)	$	635,438		$	29,105		$	846,990

Balance at December 31, 2018	$	96	$	224,396		$	(35,300	)	$	(6,387	)	$	647,517		$	46,442		$	876,764
Net income (loss)												15,895			(632		)	15,263
Other comprehensive income (loss)									(11,314		)							(11,314		)
Amounts reclassified from accumulated other comprehensive loss									11,460									11,460
Cash received from noncontrolling interest															4,715			4,715
Adoption of accounting standard, net of income tax of ($237)												(711		)				(711		)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (764 shares)			(21,018		)	28,698												7,680
Dividends declared ($0.34 per common share)												(11,059		)				(11,059		)
Stock awards granted due to acquisition	41		127,800															127,841
Restricted share award dividend equivalents			8			153						(161		)				—
Balance at June 30, 2019	$	137	$	331,186		$	(6,449	)	$	(6,241	)	$	651,481		$	50,525		$	1,020,639



	Pension Benefits
(in thousands)	Three months ended June 30,				Six months ended June 30,
(in thousands)	2019		2018		2019		2018
Interest cost	$	29	$	32	$	58	$	65
Recognized net actuarial loss	58		61		116		122
Benefit cost	$	87	$	93	$	174	$	187



	Postretirement Benefits
(in thousands)	Three months ended June 30,						Six months ended June 30,
(in thousands)	2019			2018			2019			2018
Service cost	$	64		$	75		$	138		$	162
Interest cost	221			190			427			377
Amortization of prior service cost	(228		)	(228		)	(456		)	(456		)
Benefit cost	$	57		$	37		$	109		$	83



(in thousands)	Condensed Consolidated Balance Sheet Classification	June 30, 2019
Assets
Operating lease assets	Right of use assets, net	$	74,073
Finance lease assets	Property, plant and equipment, net	24,099
Finance lease assets	Rail Group assets leased to others, net	2,047
Total leased assets		$	100,219

Liabilities
Current operating leases	Accrued expenses and other current liabilities	25,672
Non-current operating leases	Long-term lease liabilities	48,401
Total operating lease liabilities		$	74,073

Current finance leases	Current maturities of long-term debt	16,990
Non-current finance leases	Long-term debt	21,940
Total finance lease liabilities		$	38,930
Total lease liabilities		$	113,003



(in thousands)	Condensed Consolidated Statement of Operations Classification	June 30, 2019
Lease cost:
Operating lease cost	Cost of sales and merchandising revenues	$	13,120
Operating lease cost	Operating, administrative and general expenses	6,834
Finance lease cost
Amortization of right-of-use assets	Operating, administrative and general expenses	1,912
Interest expense on lease liabilities	Interest expense	543
Other lease cost (1)	Operating, administrative and general expenses	199
Other lease cost (1)	Interest expense	24
Total lease cost		$	22,632



(in thousands)	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21,345
Operating cash flows from finance leases	$	304
Financing cash flows from finance leases	$	775
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	3,992
Finance leases	$	15,920



	As of June 30, 2019
(in thousands)	Operating Leases		Finance Leases		Total
2019 (excluding the six months ended June 30, 2019)	$	15,849	$	3,672	$	19,521
2020	22,069		15,288		37,357
2021	15,898		2,162		18,060
2022	10,550		2,169		12,719
2023	6,193		2,170		8,363
Thereafter	10,613		18,331		28,944
Total lease payments	$	81,172	$	43,792	$	124,964
Less interest	7,099		4,862		11,961
Total	$	74,073	$	38,930	$	113,003



(in thousands)
Cash consideration paid	$	169,218
Equity consideration	127,841
Purchase price holdback/ other accrued liabilities	31,885
Total purchase price consideration	$	328,944



(in thousands)			Estimated useful life
Customer relationships	$	86,300	10 years
Noncompete agreements	20,300		3 years
	$	106,600	8 years	*



	Payments Due by Period
(in thousands)	2019 (remaining six months)		2020-2021		2022-2023		��	After 2023		Total
Long-term debt, recourse	$	44,549	$	133,841	$	313,459		$	332,325	$	824,174
Long-term debt, non-recourse	4,829		130,859		9,961			6,370		152,019
Interest obligations (a)	41,022		64,013		38,650			30,989		174,674
Operating leases (b)	30,678		34,749		12,294			8,688		86,409
Purchase commitments (c)	2,229,633		665,976		1,395			—		2,897,004
Other long-term liabilities (d)	3,317		6,711		6,804			24,695		41,527
Construction commitment (e)	39,747		—		—			—		39,747
Total contractual cash obligations	$	2,393,775	$	1,036,149	$	382,563		$	403,067	$	4,215,554