Andersons Inc
For the period ended Sep 30, 2024. Filed Nov 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 5, 2024
ANDE$55.12-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000821026-24-000185
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0000821026-24-000227
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 76 current paragraphs.
31 unchanged; 33 reworded; 12 added; 6 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
The Trade segment’s third quarter operating results were ahead of the prior year. Results from our grain asset footprint improved when compared to the prior year, due to strong elevation margins and space income. Trade's growing specialty food and feed ingredients business continued to benefit from recent growth investments. The merchandising business remained profitable with well-supplied commodity markets and limited volatility. Prior year results also included a $19 million pretax foreign currency loss in Egypt. As expected, farmer engagement ramped up during the quarter to bring significant old crop bushels to market and forward sell new crop in anticipation of an early and robust harvest.
Current report
The Nutrient & Industrial segment's third quarter operating results improved from the prior year. Overall volumes improved during a seasonally slow third quarter, but margins in base nutrients have reset to more normalized levels and did not repeat outsized margin opportunities seen in recent years. The engineered granules business saw significant improvement in the quarter on higher sales volume and margins, as the Company has continued to focus on operational improvements in this business. Looking forward, the fourth quarter should benefit from high yields and an early harvest, allowing for fall applications, dependent on grower sentiment.
Current report
Operating, administrative and general expenses decreased by $3.4 million. Substantially all of the decrease from the prior year can be attributed to decreased incentives.
Current report
Other income, net decreased from the prior year by $1.6 million due to $2.2 million in USDA Biofuel Producer Program proceeds received in the third quarter of 2023 that did not recur.
Current report
Operating results for the Nutrient & Industrial segment increased by $2.3 million compared to the same period in the prior year. Sales and merchandising revenues and cost of sales and merchandising revenues were flat from the prior year resulting in gross profit largely consistent with the prior year. Although overall gross profit was flat, our Ag Supply Chain business fell short of the prior year by $6.6 million due to a weaker margin environment as margins dropped approximately 50% from outsized levels in the prior year. This gross profit shortfall was almost entirely offset by the improved performance in our Engineered Granules and Specialty liquids businesses as both margins and volumes improved.
Current report
Operating, administrative and general expenses decreased from the prior year by $1.6 million mainly due to $1.2 million of reduced incentives from lower operating results.
Current report
Other income, net increased by $2.7 million in which substantially all of the increase from prior year was related to interest income from cash on hand.
Current report
Other
Current report
Results for the quarter declined by $2.2 million compared to the same period in the prior year. The decrease from the prior year was primarily driven by a $4.8 million revaluation gain of a cost method investment in the prior year which was partially offset by lower incentive compensation in the current year.
Current report
Other income, net increased by $2.9 million in which substantially all of the increase from prior year was related to interest income from cash on hand.
Current report
Other
Current report
Results for the quarter decreased by $4.6 million compared to the same period in the prior year due to a $4.8 million revaluation gain of a cost method investment in the prior year.
Removed paragraphs (6)
Previous report
The Trade segment’s second quarter operating results were slightly ahead of the prior year. Trade's growing premium food and feed ingredients business showed year-over-year improvement, driven by the addition of ACJ International, acquired in July 2023, and other recent growth capital investments. Results from our grain asset footprint were also better than the prior year, with wheat storage income leading improvements in the eastern grain belt. The merchandising business remained profitable but below 2023. Commodity markets are currently well-supplied with limited volatility. Farmer engagement remains slow due to overall market prices. While these carry markets benefit our assets, reduced volatility and lower prices reduce opportunities for the merchandising business.
Previous report
The Nutrient & Industrial segment's second quarter operating results were lower than the very strong prior year. Volumes were negatively impacted by a late and wet spring planting season in our market areas and relatively flat nutrient prices did not provide outsized margin opportunities we've seen in prior years. Also impacting the year-over-year comparison was a 2023 second quarter that had a significant shift of income from the first quarter into the second quarter. The engineered granules business saw improvement in the quarter on higher sales volume. Looking forward, second half agronomy sales and applications are dependent on the timing of harvest and grower's overall profitability.
Previous report
Operating, administrative and general expenses increased by $3.7 million. The majority of the increase from the prior year can be attributed to an additional $3.1 million of costs from organic growth and an acquisition.
Previous report
Operating results for the Nutrient & Industrial segment declined by $19.1 million compared to the same period in the prior year. Sales and merchandising revenues decreased by $94.3 million and cost of sales and merchandising revenues decreased by $70.3 million resulting in a $23.9 million decrease in gross profit. The decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be equally attributable to both declines in volumes and prices. The business faced more challenging conditions thus far in 2024 as our core geographic footprint experienced a wet and late spring preventing the application of nutrients. This was a difficult comparison to the second quarter of 2023 in which the business experienced better weather and a stronger price environment during the spring application season. Our Ag Supply Chain and Specialty Liquids businesses were impacted the most by the poor weather conditions as the two businesses equally contributed to $23.2 million of the $23.9 million gross profit shortfall when compared to the outsized prior year results.
Previous report
Recent Developments
Previous report
On June 6, 2024, the Company entered into a non-binding letter of intent to purchase a controlling interest in Skyland Grain, LLC ("Skyland"). Under the terms of the letter of intent, the Company has been granted exclusivity while the parties work in good faith to negotiate a definitive agreement. The Company is continuing to work through the due diligence process and, subject to agreeing to definitive documentation and the appropriate approvals, expects that the transaction could close in the second half of 2024. However, there can be no assurance that the parties will enter into a definitive agreement or that the proposed transaction will be completed.
Reworded paragraphs (33)
Previous wording
Our critical accounting policies and critical accounting estimates, as described in our 2023 Form 10-K, have not materially changed through the second quarter of 2024.
Current wording
Our critical accounting policies and critical accounting estimates, as described in our 2023 Form 10-K, have not materially changed through the third quarter of 2024.
Previous wording
Trade's portfolio mix of assets, ingredients and merchandising businesses provide a solid foundation for us to benefit from large crops and carry markets as well as tight, demand-driven markets. Our assets are well-positioned for the grains to flow in due course. Domestic premium ingredient demand is also expected to stay solid and should continue to support recent capital growth investments.
Current wording
The portfolio mix of assets, ingredients, and merchandising businesses provides a solid foundation for us to benefit from large crops and carry markets, as well as tight, demand-driven markets. Assets are well-positioned for the anticipated early and large harvest, which should allow Trade to purchase grains at low basis levels. Domestic specialty ingredient demand is also expected to stay solid and should continue to support recent capital growth investments.
Previous wording
Agricultural inventories on hand were 78.1 million and 74.5 million bushels at June 30, 2024, and June 30, 2023, respectively. These bushels consist of inventory held at company-owned or leased facilities, transload inventory, in-transit inventory, and third-party held inventory. Total Trade storage space capacity at company-owned or leased facilities, including temporary pile storage, was approximately 168 million bushels at June 30, 2024, which is slightly lower than the 175 million bushels of capacity in the prior year after the divestiture of certain grain assets.
Current wording
Agricultural inventories on hand were 113.2 million and 91.4 million bushels at September 30, 2024, and September 30, 2023, respectively. These bushels consist of inventory held at company-owned or leased facilities, transload inventory, in-transit inventory, and third-party held inventory. Total Trade storage space capacity at company-owned or leased facilities, including temporary pile storage, was approximately 170 million bushels at September 30, 2024, which is consistent with the prior year.
Previous wording
The Renewables segment's second quarter operating results were lower than the outsized performance in the prior year as plant co-product values, particularly feed ingredients, were lower with feed ingredients following the overall price reduction of corn. Despite the lower co-product values, margins on ethanol production improved year-over-year on lower corn basis in the east and our production facilities continued to operate efficiently in the quarter with increased production and ethanol yields. Renewable diesel feedstocks volumes continue to grow albeit with compressed margins on industry fundamentals. Feed ingredient demand was also improved; however, values declined on lower corn prices. With a continued strong export environment, the ethanol margin environment should remain favorable.
Current wording
The Renewables segment's solid third quarter operating results were slightly improved when compared to the prior year. Margins on ethanol production improved year-over-year on significantly lower corn basis in the eastern plants, despite a reduction in ethanol board crush margins in the quarter. Production facilities continued to operate efficiently in the quarter with increased volume and higher ethanol yields. Plant co-product values were lower, with feed ingredients following the overall price reduction of corn despite improved demand. Renewable diesel feedstock volumes continue to grow albeit with compressed margins on industry fundamentals. All four plants completed their semi-annual maintenance shutdowns in the third quarter. A favorable ethanol margin environment should continue, supported by exports, higher blending rates and lower corn basis levels in the east.
Previous wording
(b) DDG tons shipped converts wet tons to a dry ton equivalent amount.
Current wording
(b) Dried distillers grains ("DDG") tons shipped converts wet tons to a dry ton equivalent amount.
Previous wording
Storage capacity at our Ag Supply Chain and Specialty Liquids facilities, including leased storage, was approximately 458 thousand tons for dry nutrients and approximately 510 thousand tons for liquid nutrients at June 30, 2024, which is similar to the prior year.
Current wording
Storage capacity at our Ag Supply Chain and Specialty Liquids facilities, including leased storage, was approximately 457 thousand tons for dry nutrients and approximately 511 thousand tons for liquid nutrients at September 30, 2024, which is similar to the prior year.
Previous wording
Operating results for the Trade segment improved slightly from the same period of the prior year. Sales and merchandising revenues decreased by $939.1 million and cost of sales and merchandising revenues decreased by $938.0 million that resulted in decreased gross profit of $1.1 million. A vast majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to our merchandising business as management made a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. Reduced commodity prices also contributed to this contraction in sales and merchandising revenues and cost of sales and merchandising revenues across all of our business lines as the oversupply of commodities has shifted to a carry market. The slight decrease in gross profit can be attributed to reduced opportunities in a market with less volatility and stable commodity prices for the merchandising business. This decrease was partially offset by improved results in our asset business, primarily from wheat opportunities, and our premium ingredients business, including the benefits of its recent acquisition and other growth investments.
Current wording
Operating results for the Trade segment improved from the same period of the prior year. Sales and merchandising revenues decreased by $891.3 million and cost of sales and merchandising revenues decreased by $904.1 million resulting in increased gross profit of $12.8 million. A majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to reduced commodity prices across all of our business lines as the oversupply of commodities has shifted to a carry market. The remainder of the decrease from the prior year can be attributed to management making a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. The $12.8 million increase in gross profit can be attributed to a $17.2 million improvement in the international merchandising business as currency liquidity issues in Egypt impacted results in the prior period. Our asset-based business realized strong elevation margins and space income in the current carry market and our specialty ingredients business continues to perform well, realizing the benefits of its recent acquisition and other growth investments.
Previous wording
Interest expense decreased by $5.4 million due to reduced short-term borrowings from lower commodity prices.
Current wording
Interest expense decreased by $1.1 million due to reduced short-term borrowings from lower commodity prices.
Previous wording
Operating results for the Renewables segment declined by $16.3 million from the same period last year. Sales and merchandising revenues decreased by $191.7 million and cost of sales and merchandising revenues decreased by $170.1 million compared to prior year results. As a result, gross profit decreased by $21.6 million compared to 2023 results. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to lower ethanol and renewable diesel feedstocks values. Sales volumes remained consistent for the base ethanol business and increased in our growing renewable diesel feedstocks business. Ethanol and ethanol co-products sales values have decreased by approximately 26% from the prior period along with substantial declines in values across the various renewable diesel feedstocks. The $21.6 million decrease to gross profit in the current period results reflect a $23.0 million decrease at our ethanol plants when compared to the outstanding 2023 performance. The main contributor to the decline from the prior year was due to lower ethanol co-product values as the price of corn decreased.
Current wording
Operating results for the Renewables segment increased by $2.2 million from the same period last year. Sales and merchandising revenues decreased by $122.9 million and cost of sales and merchandising revenues decreased by $130.2 million compared to prior year results. As a result, gross profit increased by $7.3 million compared to 2023 results. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to 23% lower ethanol prices, a similar reduction in DDG prices, and declines in values across the various renewable diesel feedstocks. Sales volumes remained consistent for the base ethanol business and increased in our feed and renewable diesel feedstocks products by 30% and 21%, respectively. The $7.3 million increase to gross profit in the current period results reflect a $10.1 million increase at the ethanol plants from efficient production combined with strong ethanol margins. The improved gross profit performance at the ethanol plants was partially offset by lower results in the third-party trading business on compressed margins despite higher sales volumes.
Previous wording
For the three months ended June 30, 2024, the Company recorded income tax expense of $4.9 million. The Company's effective tax rate was 8.5% on income before taxes of $57.3 million. The difference between the 8.5% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of non-controlling interest, federal tax credits, and the reversal of certain unrecognized tax benefits offset by state and local income taxes and nondeductible compensation.
Current wording
For the three months ended September 30, 2024, the Company recorded income tax expense of $10.7 million. The Company's effective tax rate was 17.3% on income before taxes of $62.2 million. The difference between the 17.3% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of noncontrolling interest and federal tax credits offset by state and local income taxes, tax impacts of foreign operations, nondeductible compensation, and changes in other discrete tax adjustments.
Previous wording
For the three months ended June 30, 2023, the Company recorded income tax expense of $21.7 million. The Company's effective tax rate was 20.8% on income of $104.4 million. The difference between the 20.8% effective tax rate and the U.S. federal statutory tax rate of 21.0% was primarily attributable to the tax impact of non-controlling interest offset by state and local income taxes and nondeductible compensation. During the three months ended June 30, 2023, discrete tax expense of $1.4 million was recorded on income before taxes of $6.5 million related to a gain on the deconsolidation of a joint venture.
Current wording
For the three months ended September 30, 2023, the Company recorded income tax expense of $7.9 million. The Company's effective tax rate was 20.5% on income of $38.4 million. The difference between the 20.5% effective tax rate and the U.S. federal statutory tax rate of 21.0% was primarily attributable to the tax impact of noncontrolling interest offset by state and local income taxes, nondeductible compensation, and other discrete tax adjustments.
Previous wording
Comparison of the six months ended June 30, 2024, with the six months ended June 30, 2023, including a reconciliation of GAAP to non-GAAP measures:
Current wording
Comparison of the nine months ended September 30, 2024, with the nine months ended September 30, 2023, including a reconciliation of GAAP to non-GAAP measures:
Previous wording
Operating results for the Trade segment decreased by $33.0 million from the prior year. Sales and merchandising revenues decreased by $1,923.0 million, and cost of sales and merchandising revenues decreased by $1,883.0 million for a decreased gross profit impact of $40.0 million. A vast majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to our merchandising business as management made a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. Reduced commodity prices also contributed to this contraction in sales and merchandising revenues and cost of sales and merchandising revenues across all of our business lines as the oversupply of commodities has shifted to a carry market. Of the $40.0 million decrease in gross profit, $20.3 million was related to insurance recoveries recorded in the prior year within the asset-based business. This was followed by a $26.5 million decrease in the merchandising businesses as there were less trading opportunities in a less volatile commodity market, which was partially offset by $8.8 million of improved results in our premium ingredients business as recent acquisitions were accretive to results.
Current wording
Operating results for the Trade segment decreased by $14.8 million from the prior year. Sales and merchandising revenues decreased by $2,814.3 million, and cost of sales and merchandising revenues decreased by $2,787.2 million for a decreased gross profit impact of $27.2 million. A majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to reduced commodity prices across all of our business lines as the oversupply of commodities has shifted to a carry market. The remainder of the decrease from the prior year can be attributed to management making a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. Of the $27.2 million decrease in gross profit, $20.3 million was related to damaged inventory insurance recoveries recorded in the prior year within the asset-based business. This was followed by a $14.7 million decrease in the merchandising businesses as there were less trading opportunities in a less volatile commodity market, which was partially offset by $6.6 million of improved results in our specialty ingredients business as recent acquisitions and growth investments were accretive to results.
Previous wording
Interest expense decreased by $11.6 million due to reduced short-term borrowings from lower commodity prices.
Current wording
Interest expense decreased by $12.7 million due to reduced short-term borrowings from lower commodity prices.
Previous wording
Operating results for Renewables increased by $37.6 million from the same period of prior year. Sales and merchandising revenues decreased by $374.1 million, and cost of sales and merchandising revenues decreased by $363.3 million compared to prior year. As a result, gross profit decreased by $10.8 million. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to lower ethanol and renewable diesel feedstocks values. Sales volumes remained consistent for the base ethanol business and increased in our growing renewable diesel feedstocks business. Ethanol and ethanol co-products sales values have decreased by approximately 27% from the prior period along with substantial declines in values across the various renewable diesel feedstocks. The $10.8 million decrease in gross profit from the prior period can mainly be attributable to the ethanol plants which are $7.6 million behind the strong prior year results. The main contributor to the decline from the prior year was due to lower ethanol co-product values as the price of corn decreased.
Current wording
Operating results for Renewables increased by $39.8 million from the same period of prior year. Sales and merchandising revenues decreased by $497.0 million, and cost of sales and merchandising revenues decreased by $493.6 million compared to prior year. As a result, gross profit decreased by $3.5 million. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to 26% lower ethanol prices, a similar reduction in DDG prices, and declines in values across the various renewable diesel feedstocks. Sales volumes remained consistent for the base ethanol business and increased in our feed and renewable diesel feedstocks products by 16% and 31%, respectively. The $3.5 million decrease in gross profit from the prior period can mainly be attributed to margin compression in our third-party trading business.
Previous wording
Interest expense decreased by $3.2 million from the prior year due to the deconsolidation of ELEMENT non-recourse debt.
Current wording
Interest expense decreased by $3.5 million from the prior year, of which $2.2 million of the decrease was due to the deconsolidation of ELEMENT non-recourse debt with the remainder due to lower working capital usage.
Previous wording
Other income, net decreased from the prior year by $2.4 million as the Company recorded an additional $3.4 million in gains as a result of the deconsolidation of the ELEMENT ethanol plant in the prior year, which was partially offset by increased interest income in the current year.
Current wording
Other income, net decreased from the prior year by $4.0 million as the Company recorded an additional $3.4 million in gains as a result of the deconsolidation of the ELEMENT ethanol plant in the prior year.
Previous wording
Operating results for the Nutrient & Industrial segment decreased by $10.6 million when compared to the same period of the prior year. Sales and merchandising revenues decreased $90.9 million, and cost of sales and merchandising revenues decreased by $75.4 million resulting in decreased gross profit of $15.5 million. Approximately 80% of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues was due to margin compression as the segment experienced reduced demand from a wet and late spring preventing the application of nutrients. Our Ag Supply Chain and Specialty Liquids businesses were impacted the most by the poor weather conditions as the two businesses equally contributed to $12.9 million of the $15.5 million gross profit shortfall when compared to the outsized prior year results.
Current wording
Operating results for the Nutrient & Industrial segment decreased by $8.2 million when compared to the same period of the prior year. Sales and merchandising revenues decreased $91.3 million, and cost of sales and merchandising revenues decreased by $75.2 million resulting in decreased gross profit of $16.2 million. Over 90% of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues was due to margin compression as the prior year experienced outsized pricing opportunities in the spring application season. Specifically, our Ag Supply Chain business was impacted the most by a lower price environment and reduced volumes from a wet and delayed spring application season, as it contributed $13.1 million of the $16.2 million gross profit shortfall when compared to the outsized prior year results.
Previous wording
Interest expense decreased $2.5 million from prior year due to lower working capital usage.
Current wording
Interest expense decreased $1.2 million from prior year due to lower working capital usage.
Previous wording
For the six months ended June 30, 2024, the Company recorded income tax expense of $6.2 million. The Company's effective tax rate was 8.7% on income before taxes of $71.3 million. The difference between the 8.7% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of non-controlling interest, federal tax credits, stock based compensation, and the reversal of certain unrecognized tax benefits offset by state and local income taxes and nondeductible compensation.
Current wording
For the nine months ended September 30, 2024, the Company recorded income tax expense of $16.9 million. The Company's effective tax rate was 12.7% on income before taxes of $133.5 million. The difference between the 12.7% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, federal tax credits, stock-based compensation, and the reversal of certain unrecognized tax benefits offset by state and local income taxes, tax impacts of foreign operations, and nondeductible compensation.
Previous wording
For the six months ended June 30, 2023, the Company recorded an income tax expense of $15.8 million. The Company’s effective tax rate was 40.2% on income before income taxes of $39.4 million. The difference between the 40.2% effective tax rate and the U.S. federal statutory rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes, and nondeductible compensation. During the six months ended June 30, 2023, a net discrete income tax benefit of $10.6 million was recorded on a net loss before income taxes of $88.8 million related to the operations, impairment charge, and gain on the deconsolidation of a joint venture.
Current wording
For the nine months ended September 30, 2023, the Company recorded an income tax expense of $23.7 million. The Company’s effective tax rate was 30.5% on income before income taxes of $77.8 million. The difference between the 30.5% effective tax rate and the U.S. federal statutory rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes, and nondeductible compensation, and other discrete tax adjustments. Other discrete tax adjustments include a net income tax benefit of $10.6 million, recorded on a net loss before taxes of $88.8 million related to the operations, impairment charge, and gain on deconsolidation associated with ELEMENT.
Previous wording
The Company’s subsidiary partnership returns are under U.S. federal and certain state tax examinations for tax years 2015 through 2021. The Company’s subsidiary is under federal tax examination by the Mexican tax authorities for tax year 2015. The U.S. federal, state, and Mexican tax authorities’ examinations could potentially be resolved within the next 12 months. The resolution of these examinations could change our unrecognized tax benefits and favorably impact income tax expense by a range of $5.6 million to $10.7 million.
Current wording
The Company’s subsidiary partnership returns are under U.S. federal and certain state tax examinations for tax years 2018 through 2022. The Company’s subsidiary is under federal tax examination by the Mexican tax authorities for tax year 2015. The U.S. federal, state, and Mexican tax authorities’ examinations could potentially be resolved within the next 12 months. The resolution of these examinations could change our unrecognized tax benefits and favorably impact income tax expense by a range of $5.7 million to $10.1 million.
Previous wording
At June 30, 2024, the Company had working capital of $1,164.6 million, an increase of $20.5 million from the prior year. This increase was attributable to changes in the following components of current assets and current liabilities:
Current wording
At September 30, 2024, the Company had working capital of $1,153.2 million, an increase of $33.7 million from the prior year. This increase was attributable to changes in the following components of current assets and current liabilities:
Previous wording
Current assets as of June 30, 2024, decreased $288.0 million in comparison to those as of June 30, 2023. This decrease related to the reduction of all current asset accounts with the exception of the increase in cash and other current assets. The decreases in these current asset accounts can largely be attributed to the reduction and stabilization of agricultural commodity prices over the last year in comparison to historically high price levels of agricultural commodities, including fertilizer, in the same period of the prior year. The decreases in the working capital asset accounts also had a direct impact on cash as the Company was not deploying cash to hold working capital as it had done in the previous year.
Current wording
Current assets as of September 30, 2024, decreased $196.0 million in comparison to those as of September 30, 2023. This decrease related to the reduction of all current asset accounts with the exception of the increase in cash and other current assets. The decreases in these current asset accounts can largely be attributed to the reduction and stabilization of agricultural commodity prices over the last year in comparison to historically high price levels of agricultural commodities, including fertilizer, in the same period of the prior year. The decreases in the working capital asset accounts also had a direct impact on cash as the Company was not deploying cash to hold working capital as it had done in the previous year.
Previous wording
Current liabilities decreased $308.5 million from the prior year. Current liabilities have decreased almost across the board as commodity prices have continued to stabilize over the last year compared to the historically high commodity prices in the same period of the prior year.
Current wording
Current liabilities decreased $229.8 million from the prior year. Current liabilities have decreased in trade payables, customer prepayments and deferred revenue, and commodity derivative liabilities as commodity prices have continued to stabilize over the last year compared to the historically high commodity prices in the same period of the prior year.
Previous wording
Operating activities provided cash of $64.8 million and $207.4 million in the first six months of 2024 and 2023, respectively. The decrease in the amount of cash provided in operating activities is due to an unfavorable change of $105.5 million in operating assets and liabilities through the normal course of business combined with lower earnings from the prior year. Cash generation excluding working capital changes remained solid.
Current wording
Operating activities provided cash of $62.7 million and $696.1 million in the first nine months of 2024 and 2023, respectively. The decrease in the amount of cash provided in operating activities is mainly due to an unfavorable change of $620.4 million in operating assets and liabilities through the normal course of business. Cash generation excluding working capital changes remains consistent and strong in changing markets.
Previous wording
Investing activities used cash of $58.1 million through the first six months of 2024 compared to $71.7 million in the prior period. Cash used in investing activities decreased from the prior year mainly due to reduced capital spending which was partially offset by $9.6 million in business acquisitions in the current year.
Current wording
Investing activities used cash of $90.6 million through the first nine months of 2024 compared to $117.3 million in the prior period. Cash used in investing activities decreased from the prior year mainly due to reduced capital spending combined with $14.8 million in reduced spending on business acquisitions in the current year.
Previous wording
We expect to invest approximately $150 to $175 million in property, plant and equipment in 2024; approximately 50% of which will be to maintain current facilities.
Current wording
We expect to invest approximately $150 million in property, plant, and equipment in 2024, depending on project timing. Approximately 50% of capital spending will be to maintain current facilities.
Previous wording
Financing activities used cash of $119.9 million and $155.0 million for the six months ended June 30, 2024, and 2023, respectively. This decrease in cash used from the prior year is mainly due to the change in the Company's borrowings on its short-term credit facility as the Company had sufficient cash on hand in 2024 to cover a large amount of settled payables and other changes in working capital.
Current wording
Financing activities used cash of $162.6 million and $275.8 million for the nine months ended September 30, 2024, and 2023, respectively. This decrease in cash used from the prior year is mainly due to the change in the Company's borrowings on its short-term credit facility as the Company had sufficient cash on hand in 2024 to cover a large amount of settled payables and other changes in working capital.
Previous wording
The Company paid $13.0 million in dividends in the first six months of 2024 compared to $12.5 million paid in the prior period. The Company paid dividends of $0.19 and $0.185 per common share in January and April of 2024, and 2023, respectively. On June 20, 2024, the Company declared a cash dividend of $0.19 per common share payable on July 22, 2024, to shareholders of record on July 1, 2024.
Current wording
The Company paid $19.5 million in dividends in the first nine months of 2024 compared to $18.8 million paid in the prior period. The Company paid dividends of $0.19 and $0.185 per common share in January, April, and July of 2024 and 2023, respectively. On August 15, 2024, the Company declared a cash dividend of $0.19 per common share payable on October 22, 2024, to shareholders of record on October 1, 2024.
Previous wording
The Company is party to borrowing arrangements with a syndicate of banks that provide a total of $1,857.0 million in borrowing capacity. As of June 30, 2024, the Company had $1,849.6 million available for borrowing.
Current wording
The Company is party to borrowing arrangements with a syndicate of banks that provide a total of $1,859.4 million in borrowing capacity. As of September 30, 2024, the Company had $1,841.0 million available for borrowing.
Previous wording
The Company is typically in a net short-term borrowing position in the first two quarters of the year. The majority of these short-term borrowings bear interest at variable rates, an increase in interest rates could have a significant impact on our profitability. In addition, periods of high grain prices could require us to make additional margin deposits on our exchange traded futures contracts. Conversely, in periods of declining prices, the Company could receive a return of cash.
Current wording
The Company is typically in a net short-term borrowing position in the first two quarters of the year. The majority of these short-term borrowings bear interest at variable rates, and an increase in interest rates could have a significant impact on our profitability. In addition, periods of high grain prices could require us to make additional margin deposits on our exchange traded futures contracts. Conversely, in periods of declining prices, the Company could receive a return of cash.
Previous wording
Management believes the Company's sources of liquidity will be adequate to fund operations, capital expenditures and service indebtedness.
Current wording
Management believes the Company's sources of liquidity will be adequate to fund operations, capital expenditures and service indebtedness. At September 30, 2024, the Company had standby letters of credit outstanding of $3.7 million.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Other income, net decreased from the prior year by $6.3 million primarily due to a $6.5 million gain as a result of the deconsolidation of the ELEMENT ethanol plant in the prior year.
Previous report — wording carried elsewhere
At June 30, 2024, the Company had standby letters of credit outstanding of $3.3 million.