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Andersons, Inc. (ANDE) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

SEC Filings

Andersons, Inc.

CIK: 821026 Ticker: ANDE

logoa04a26.gif NEWS RELEASE

The Andersons, Inc. Reports Third Quarter Results; Best Q3 since 2014

MAUMEE, OHIO, November 2, 2021
- The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the third quarter ended September 30, 2021.

Third Quarter Highlights:

Company reported net income attributable to The Andersons from continuing operations of $13.9 million, or $0.41 per diluted share, and adjusted net income from continuing operations of $5.2 million, or $0.15 per diluted share
Adjusted EBITDA from continuing operations was $56.3 million for the quarter, an increase of $9.3 million, or 20%, year over year; trailing twelve month adjusted EBITDA from continuing operations of $294.0 million
Trade reported all-time record earnings with pretax income of $42.0 million and adjusted pretax income of $27.6 million on continued merchandising opportunities and strong elevation margins
Completed strategic sale of Rail leasing assets and used proceeds to reduce debt

"I'm pleased with our third quarter, particularly the record results of our Trade Group business. We benefited from outstanding execution by our team, strong demand, and relatively low grain stocks - including growth in new markets, such as renewable diesel and supply chain extensions with our new Swiss trading office. We continue to identify opportunities in these volatile markets and remain focused on an anticipated large 2021 harvest. Harvest in the corn belt is progressing and we are pleased that storage income has returned to the wheat and corn markets," said President and CEO Pat Bowe.

"Ethanol margins have strengthened through the fall maintenance season and U.S. stocks are low at this time. We are focused on risk management and effective hedging and continue to see strong returns from co-products, particularly distillers' corn oil," added Bowe. "We anticipate strong fourth quarter margins in Ethanol. Plant Nutrient followed up a great first half with a third quarter loss, which was in line with our expectations for this seasonal business. Fertilizer prices and farm income both remain high. We continue to receive good support from our suppliers in this time of tight stocks. Our teams are executing well and remain focused on customer needs and operational excellence."

"Lastly, I want to comment on the sale of our Rail leasing business that was announced on August 16," stated Bowe. "This strategic sale allowed us to strengthen our balance sheet and focus on investing in our core agriculture businesses. We completed the acquisition of Capstone Commodities on October 1 which helps to expand our supply chain presence to southwestern U.S. dairy customers. We continue to evaluate organic growth projects in grain, renewable fuels, and fertilizer as well as potential acquisitions and investments, with the goal of growing our ag supply chain and renewable fuels businesses while reducing our carbon footprint."



The following information was filed by Andersons, Inc. (ANDE) on Tuesday, November 2, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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 09/30/2021
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
 
ande-20210930_g1.jpg
THE ANDERSONS, INC.
(Exact name of the registrant as specified in its charter)
 
Ohio34-1562374
(State of incorporation or organization)(I.R.S. Employer Identification No.)
1947 Briarfield Boulevard
MaumeeOhio43537
(Address of principal executive offices)(Zip Code)

(419) 893-5050
(Telephone Number)
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 pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 filerAccelerated filerý
Non-accelerated filerSmaller 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 33,286,202 common shares outstanding at October 22, 2021.


THE ANDERSONS, INC.
INDEX
 
 Page No.
PART I. FINANCIAL INFORMATION
PART II. OTHER INFORMATION




Part I. Financial Information
Item 1. Financial Statements

The Andersons, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
 
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Sales and merchandising revenues (Note 6)
$2,998,824 $1,885,586 $8,829,348 $5,556,317 
Cost of sales and merchandising revenues2,876,989 1,792,349 8,430,665 5,314,101 
Gross profit121,835 93,237 398,683 242,216 
Operating, administrative and general expenses110,275 92,610 312,833 277,363 
Interest expense, net8,799 6,853 28,848 25,951 
Other income, net:
Equity in earnings (losses) of affiliates, net(250)20 2,389 228 
Other income, net13,806 3,846 24,743 10,154 
Income (loss) before income taxes from continuing operations16,317 (2,360)84,134 (50,716)
Income tax provision (benefit) from continuing operations4,027 (4,148)18,065 (18,628)
Net income (loss) from continuing operations12,290 1,788 66,069 (32,088)
Income from discontinued operations, net of income taxes1,846 427 7,453 3,224 
Net income (loss)14,136 2,215 73,522 (28,864)
Net income (loss) attributable to noncontrolling interests(1,602)3,273 (822)(20,583)
Net income (loss) attributable to The Andersons, Inc.$15,738 $(1,058)$74,344 $(8,281)
Earnings (loss) per share attributable to The Andersons, Inc. common shareholders: (Note 9)
Basic earnings (loss):
Continuing operations$0.42 $(0.04)$2.01 $(0.35)
Discontinued operations0.06 0.01 0.22 0.10 
$0.48 $(0.03)$2.23 $(0.25)
Diluted earnings (loss):
Continuing operations$0.41 $(0.04)$1.99 $(0.35)
Discontinued operations0.05 0.01 0.22 0.10 
$0.46 $(0.03)$2.21 $(0.25)
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q3 2021 Form 10-Q | 1

The Andersons, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In thousands)
 
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Net income (loss)$14,136 $2,215 $73,522 $(28,864)
Other comprehensive income (loss), net of tax:
Change in unrecognized actuarial loss
and prior service cost
(102)(119)(439)(220)
Foreign currency translation adjustments(3,004)2,351 (311)(1,039)
Cash flow hedge activity1,537 1,783 9,420 (13,740)
Other comprehensive income (loss)(1,569)4,015 8,670 (14,999)
Comprehensive income (loss)12,567 6,230 82,192 (43,863)
Comprehensive income (loss) attributable to the noncontrolling interests(1,602)3,273 (822)(20,583)
Comprehensive income (loss) attributable to The Andersons, Inc.$14,169 $2,957 $83,014 $(23,280)
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q3 2021 Form 10-Q | 2


Balance The Andersons, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
 (In thousands)
September 30,
2021
December 31,
2020
September 30,
2020
Assets
Current assets:
Cash and cash equivalents$216,874 $29,123 $13,693 
Accounts receivable, net735,349 641,326 509,964 
Inventories (Note 2)
1,017,804 1,293,066 747,588 
Commodity derivative assets – current (Note 5)
409,647 320,706 140,065 
Current assets held-for-sale (Note 14)
26,561 32,659 45,132 
Other current assets92,159 99,529 83,807 
Total current assets2,498,394 2,416,409 1,540,249 
Other assets:
Goodwill129,342 131,542 131,542 
Other intangible assets, net118,690 140,084 148,846 
Right of use assets, net50,270 33,387 33,547 
Other assets held-for-sale (Note 14)
38,863 643,474 642,538 
Other assets, net74,923 46,914 44,738 
Total other assets412,088 995,401 1,001,211 
Property, plant and equipment, net (Note 3)
797,660 860,311 870,151 
Total assets$3,708,142 $4,272,121 $3,411,611 
Liabilities and equity
Current liabilities:
Short-term debt (Note 4)
$281,199 $403,703 $100,405 
Trade and other payables825,923 954,809 635,206 
Customer prepayments and deferred revenue147,225 178,226 47,906 
Commodity derivative liabilities – current (Note 5)
78,702 146,990 79,159 
Current maturities of long-term debt (Note 4)
106,255 69,366 62,499 
Accrued taxes97,215 17,465 15,178 
Current liabilities held-for-sale (Note 14)
13,427 25,277 27,996 
Accrued expenses and other current liabilities173,215 135,846 128,187 
Total current liabilities1,723,161 1,931,682 1,096,536 
Long-term lease liabilities31,332 19,835 19,216 
Long-term debt, less current maturities (Note 4)
542,821 886,453 717,198 
Deferred income taxes79,636 170,147 163,454 
Other long-term liabilities held-for-sale (Note 14)
13,592 48,096 221,334 
Other long-term liabilities81,587 55,248 56,646 
Total liabilities2,472,129 3,111,461 2,274,384 
Commitments and contingencies (Note 13)
Shareholders’ equity:
Common shares, without par value (63,000 shares authorized; 33,786, 33,599 and 33,599 shares issued at 9/30/2021, 12/31/2020 and 9/30/2020, respectively)
140 138 138 
Preferred shares, without par value (1,000 shares authorized; none issued)
 — — 
Additional paid-in-capital360,159 348,714 346,280 
Treasury shares, at cost (110, 45 and 41 shares at 9/30/2021, 12/31/2020 and 9/30/2020, respectively)
(2,611)(966)(879)
Accumulated other comprehensive loss(3,406)(12,076)(22,230)
Retained earnings679,154 626,081 615,890 
Total shareholders’ equity of The Andersons, Inc.1,033,436 961,891 939,199 
Noncontrolling interests202,577 198,769 198,028 
Total equity1,236,013 1,160,660 1,137,227 
Total liabilities and equity$3,708,142 $4,272,121 $3,411,611 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q3 2021 Form 10-Q | 3

The Andersons, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Nine months ended September 30,
 20212020
Operating Activities
Net income (loss) from continuing operations$66,069 $(32,088)
Income from discontinued operations, net of income taxes7,453 3,224 
Net income (loss)73,522 (28,864)
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities:
Depreciation and amortization142,137 141,167 
Bad debt (recovery) expense, net(2,182)8,049 
Equity in earnings of affiliates, net of dividends(2,389)(228)
Gain on sale of business from continuing operations(14,619)— 
Loss on sale of business from discontinued operations1,491 — 
Gain on sales of assets, net(6,505)(1,037)
Stock-based compensation expense6,727 7,742 
Deferred federal income tax(93,725)21,917 
Inventory write down3,399 10,933 
Other7,005 4,141 
Changes in operating assets and liabilities:
Accounts receivable(89,902)(1,952)
Inventories266,865 400,262 
Commodity derivatives(158,741)(2,574)
Other assets(3,357)(34,343)
Payables and other accrued expenses(10,659)(329,422)
Net cash provided by operating activities119,067 195,791 
Investing Activities
Purchases of property, plant and equipment and capitalized software(52,730)(59,414)
Proceeds from sale of assets3,999 8,121 
Purchases of investments(5,993)(2,849)
Proceeds from sale of business from continuing operations18,130 2,467 
Proceeds from sale of business from discontinued operations543,102 — 
Purchases of Rail assets(6,039)(26,258)
Proceeds from sale of Rail assets18,705 7,774 
Other349 — 
Net cash provided by (used in) investing activities519,523 (70,159)
Financing Activities
Net payments under lines of credit(324,279)(44,183)
Proceeds from issuance of short-term debt608,250 — 
Payments of short-term debt(408,250)— 
Proceeds from issuance of long-term debt186,800 213,906 
Payments of long-term debt(485,527)(310,694)
Contributions from noncontrolling interest owner4,655 6,493 
Distributions to noncontrolling interest owner(25)(10,322)
Payments of debt issuance costs(2,059)(250)
Dividends paid(17,503)(17,234)
Other(12,709)(4,143)
Net cash used in financing activities(450,647)(166,427)
Effect of exchange rates on cash and cash equivalents(192)(407)
Increase (decrease) in cash and cash equivalents187,751 (41,202)
Cash and cash equivalents at beginning of period29,123 54,895 
Cash and cash equivalents at end of period$216,874 $13,693 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q3 2021 Form 10-Q | 4

    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 June 30, 2020
$138 $343,730 $(953)$(26,245)$622,718 $192,695 $1,132,083 
Net income (loss)(1,058)3,273 2,215 
Other comprehensive income1,868 1,868 
Amounts reclassified from accumulated other comprehensive income2,147 2,147 
Contributions from noncontrolling interests2,083 2,083 
Distributions to noncontrolling interests(23)(23)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (0 shares)
2,550 74 2,624 
Dividends declared ($0.175 per common share)
(5,770)(5,770)
Balance at September 30, 2020
$138 $346,280 $(879)$(22,230)$615,890 $198,028 $1,137,227 
Balance at June 30, 2021
$140 $357,606 $(2,650)$(1,837)$669,241 $202,464 $1,224,964 
Net income (loss)15,738 (1,602)14,136 
Other comprehensive loss(3,081)(3,081)
Amounts reclassified from accumulated other comprehensive income 1,512 1,512 
Contributions from noncontrolling interests1,715 1,715 
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (2 shares)
2,553 39 2,592 
Dividends declared ($0.175 per common share)
(5,825)(5,825)
Balance at September 30, 2021
$140 $360,159 $(2,611)$(3,406)$679,154 $202,577 $1,236,013 
The Andersons, Inc. | Q3 2021 Form 10-Q | 5

Nine Months Ended
 Common
Shares
Additional
Paid-in
Capital
Treasury
Shares
Accumulated
Other
Comprehensive Income
(Loss)
Retained
Earnings
Noncontrolling
Interests
Total
Balance at December 31, 2019
$137 $345,359 $(7,342)$(7,231)$642,687 $222,045 $1,195,655 
Net income (loss)(8,281)(20,583)(28,864)
Other comprehensive loss(19,340)(19,340)
Amounts reclassified from accumulated other comprehensive income4,341 4,341 
Contributions from noncontrolling interests6,493 6,493 
Distributions to noncontrolling interests(10,322)(10,322)
Noncontrolling interests recognized in connection with business combination(459)395 (64)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (167 shares)
11,380 6,072 (843)6,610 
Dividends declared ($0.525 per common share)
(17,282)(17,282)
Restricted share award dividend equivalents391 (391) 
Balance at September 30, 2020
$138 $346,280 $(879)$(22,230)$615,890 $198,028 $1,137,227 
Balance at December 31, 2020
$138 $348,714 $(966)$(12,076)$626,081 $198,769 $1,160,660 
Net income (loss)74,344 (822)73,522 
Other comprehensive income4,230 4,230 
Amounts reclassified from accumulated other comprehensive income4,440 4,440 
Contributions from noncontrolling interests4,655 4,655 
Distributions to noncontrolling interests(25)(25)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (65 shares)
2 11,445 (1,977)(3,479)5,991 
Dividends declared ($0.525 per common share)
(17,460)(17,460)
Restricted share award dividend equivalents332 (332) 
Balance at September 30, 2021
$140 $360,159 $(2,611)$(3,406)$679,154 $202,577 $1,236,013 
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q3 2021 Form 10-Q | 6

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”). Controlled subsidiaries include 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 noncontrolling interests. 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.

During the third quarter of 2021, substantially all of the assets and liabilities of the Rail business were classified as held-for-sale in the accompanying Condensed Consolidated Balance Sheets. As discussed further in Note 14, the Company executed a definitive agreement to sell the Rail Leasing business. In conjunction with the sale of the Rail Leasing business, the Company announced its intent to divest the remainder of the Rail business, primarily consistent of the Rail Repair business. These transactions effectively constitute the entirety of what has historically been included in the Rail reportable segment. Therefore, the associated operating results, net of income tax, have been classified as discontinued operations in the accompanying consolidated statements of operations for all periods presented. Throughout this Quarterly Report on Form 10-Q, with the exception of the statements of cash flows and unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. The reclassification relates to the Condensed Consolidated Balance Sheet presentation of assets and liabilities as held for sale and Condensed Consolidated Statement of Operations presentation of results classified as discontinued operations in relation to the Rail business transactions noted above.

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, 2021. An unaudited Condensed Consolidated Balance Sheet as of September 30, 2020 has been included as the Company operates in several seasonal industries.
The Condensed Consolidated Balance Sheet data at December 31, 2020 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, 2020 (the “2020 Form 10-K”).
Recently Adopted Accounting Pronouncements

Simplified Accounting for Income Taxes

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update 2019-12. The new standard simplifies accounting for income taxes, including guidance relating to the approach for calculating income taxes in an interim period, intraperiod tax allocation, and the recognition of deferred tax liabilities among other items. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. The new standard did not have a material impact to the company’s financial statements or disclosures.


The Andersons, Inc. | Q3 2021 Form 10-Q | 7


2. Inventories

Major classes of inventories are presented below. Readily Marketable Inventories ("RMI") are agricultural commodity inventories such as corn, soybeans, wheat, and ethanol co-products, among others, carried at net realizable value which approximates fair value based on their commodity characteristics, widely available markets, and pricing mechanisms. The net realizable value of RMI is calculated as the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. All other inventories are held at lower of cost or net realizable value.
(in thousands)September 30,
2021
December 31,
2020
September 30,
2020
Grain and other agricultural products (a)$732,512 $1,025,809 $557,808 
Frac sand and propane (a)18,481 12,477 10,064 
Ethanol and co-products (a)105,052 114,895 59,543 
Plant nutrients and cob products161,759 139,885 120,173 
Total Inventories$1,017,804 $1,293,066 $747,588 
(a) Includes RMI of $700.3 million, $983.2 million and $523.3 million at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.

Inventories do not include 2.0 million, 3.0 million and 2.3 million bushels of grain held in storage for others as of September 30, 2021, December 31, 2020 and September 30, 2020, 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.

Lower of cost or net realizable value charges were $3.4 million and $10.9 million for the nine months ended September 30, 2021 and September 30, 2020, respectively. The current year charge primarily relates to certain fertilizer values decreasing after the spring application season. The charge in the prior year was a result of 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)September 30,
2021
December 31,
2020
September 30,
2020
Land$39,159 $39,704 $39,705 
Land improvements and leasehold improvements89,941 92,455 92,138 
Buildings and storage facilities368,678 379,195 375,715 
Machinery and equipment920,232 898,557 881,617 
Construction in progress24,556 19,473 20,936 
1,442,566 1,429,384 1,410,111 
Less: accumulated depreciation 644,906 569,073 539,960 
Property, plant and equipment, net$797,660 $860,311 $870,151 

Depreciation expense on property, plant and equipment used in continuing operations was $97.7 million and $91.4 million for the nine months ended September 30, 2021 and 2020, respectively. Additionally, depreciation expense on property, plant and equipment used in continuing operations was $35.2 million and $30.8 million for the three months ended September 30, 2021 and 2020, respectively.

During the quarter ended September 30, 2021, the Company sold its grain assets in Champaign, Illinois plus working capital for $23.3 million which resulted in a $14.6 million gain.


The Andersons, Inc. | Q3 2021 Form 10-Q | 8


4. Debt

Short-term and long-term debt at September 30, 2021, December 31, 2020 and September 30, 2020 consisted of the following:
(in thousands)September 30,
2021
December 31,
2020
September 30,
2020
Short-term debt – non-recourse$81,494 $93,192 $40,985 
Short-term debt – recourse199,705 310,511 59,420 
Total short-term debt$281,199 $403,703 $100,405 
Current maturities of long-term debt – non-recourse$69,932 $678 $211 
Current maturities of long-term debt – recourse36,323 68,688 62,288 
Total current maturities of long-term debt$106,255 $69,366 $62,499 
Long-term debt, less: current maturities – non-recourse$ $127,192 $89,419 
Long-term debt, less: current maturities – recourse542,821 759,261 627,779 
Total long-term debt, less: current maturities$542,821 $886,453 $717,198 

On February 4, 2021, the Company completed the second amendment to its credit agreement dated January 11, 2019. The amendment, which replaced an underwritten bridge loan received on January 21, 2021, provided for a short-term $250 million term note in which the entire stated principal is due on December 31, 2021. The entire principal balance was repaid as of September 30, 2021.

On May 6, 2021, the Company completed the third amendment to its credit agreement dated January 11, 2019. The amendment provides for a short-term note of approximately $358 million in which the entire stated principal is due on March 31, 2022. The term note will bear interest at variable rates, which are based on LIBOR plus an applicable spread. As of September 30, 2021 $200 million of principal remains outstanding.

The total borrowing capacity of the Company's lines of credit at September 30, 2021 was $1,297.5 million of which the Company had a total of $1,169.9 million available for borrowing under its lines of credit. The Company's borrowing capacity is reduced by a combination of outstanding borrowings and letters of credit.

As of September 30, 2021, December 31, 2020 and September 30, 2020, the estimated fair value of long-term debt, including the current portion, was $667.9 million, $1,003.1 million and $831.3 million, respectively. The Company estimates the fair value of its long-term debt based upon the Company’s credit standing and current interest rates offered to the Company on similar bonds and rates currently available to the Company for long-term borrowings with similar terms and remaining maturities.

As part of the Company's ongoing covenant monitoring process, the Company determined that it was virtually certain that ELEMENT will be out of compliance with its debt service coverage ratio covenant of no less than 1.4 to be initially measured on December 31, 2021. If ELEMENT is not in compliance with the debt service coverage ratio at December 31, 2021, it would result in an event of default, which if not cured or waived, could result in the lender accelerating the maturity of the ELEMENT’s indebtedness or preventing access to additional funds under the line of credit agreement, or requiring prepayment of outstanding indebtedness under the loan agreement or the line of credit agreement. Because it was determined that it was virtually certain that ELEMENT would violate this covenant in the future and has not yet received a waiver, the $70 million of non-recourse debt associated with ELEMENT has been classified as current maturity of long-term debt.

The Company is in compliance with all other financial covenants as of September 30, 2021.

The Andersons, Inc. | Q3 2021 Form 10-Q | 9


5. Derivatives

The Company’s operating results are affected by changes to commodity prices. The Trade and Ethanol businesses have established “unhedged” futures position limits (the amount of a commodity, either owned or contracted for, that does not have an offsetting derivative contract). 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 commodity 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 September 30, 2021, December 31, 2020 and September 30, 2020, 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 non-current commodity derivative assets (or liabilities) on the Condensed Consolidated Balance Sheets:

(in thousands)September 30, 2021December 31, 2020September 30, 2020
Cash collateral paid$136,977 $208,670 $70,446 
Fair value of derivatives(14,100)(157,301)(58,495)
Net derivative asset position$122,877 $51,369 $11,951 

The Andersons, Inc. | Q3 2021 Form 10-Q | 10


The following table presents, on a gross basis, current and non-current commodity derivative assets and liabilities:
September 30, 2021
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$380,391 $11,704 $27,035 $461 $419,591 
Commodity derivative liabilities(107,721)(370)(105,737)(7,645)(221,473)
Cash collateral paid136,977    136,977 
Balance sheet line item totals$409,647 $11,334 $(78,702)$(7,184)$335,095 

December 31, 2020
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$304,533 $4,328 $19,386 $14 $328,261 
Commodity derivative liabilities(192,023)(348)(166,850)(243)(359,464)
Cash collateral paid208,196 — 474 — 208,670 
Balance sheet line item totals$320,706 $3,980 $(146,990)$(229)$177,467 

September 30, 2020
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$159,553 $3,565 $7,323 $42 $170,483 
Commodity derivative liabilities(89,933)(508)(86,482)(490)(177,413)
Cash collateral paid70,446 — — — 70,446 
Balance sheet line item totals$140,066 $3,057 $(79,159)$(448)$63,516 

The net pre-tax gains and losses on commodity derivatives not designated as hedging instruments are included in the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 are as follows:

 Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Gains (losses) on commodity derivatives included in cost of sales and merchandising revenues$(11,353)$(52,047)$229,320 $(12,290)


The Andersons, Inc. | Q3 2021 Form 10-Q | 11

The Company had the following volume of commodity derivative contracts outstanding (on a gross basis) at September 30, 2021, December 31, 2020 and September 30, 2020:
September 30, 2021
(in thousands)Number of BushelsNumber of GallonsNumber of PoundsNumber of Tons
Non-exchange traded:
Corn687,177    
Soybeans96,061    
Wheat94,132    
Oats35,460    
Ethanol 174,381   
Corn oil  92,709  
Soybean Oil  41,322  
Other31,086 2,264 1,959 2,324 
Subtotal943,916 176,645 135,990 2,324 
Exchange traded:
Corn236,395    
Soybeans60,660    
Wheat101,087    
Oats1,290    
Ethanol 96,894   
Propane 24,402   
Other 8 1,890 240 
Subtotal399,432 121,304 1,890 240 
Total1,343,348 297,949 137,880 2,564 
December 31, 2020
(in thousands)Number of BushelsNumber of GallonsNumber of PoundsNumber of Tons
Non-exchange traded:
Corn684,654 — — — 
Soybeans73,521 — — — 
Wheat109,661 — — — 
Oats27,482 — — — 
Ethanol— 124,795 — — 
Corn oil— — 36,015 — 
Soybean oil— — 26,510 — 
Other4,371 2,058 740 1,859 
Subtotal899,689 126,853 63,265 1,859 
Exchange traded:
Corn267,792 — — — 
Soybeans53,730 — — — 
Wheat80,733 — — — 
Oats1,800 — — — 
Ethanol— 73,584 — — 
Propane— 17,094 — — 
Other— 2,898 14 149 
Subtotal404,055 93,576 14 149 
Total1,303,744 220,429 63,279 2,008 

The Andersons, Inc. | Q3 2021 Form 10-Q | 12

September 30, 2020
(in thousands)Number of BushelsNumber of GallonsNumber of PoundsNumber of Tons
Non-exchange traded:
Corn527,924 — — — 
Soybeans121,248 — — — 
Wheat80,546 — — — 
Oats40,004 — — — 
Ethanol— 96,470 — — 
Corn oil— — 45,144 — 
Soybean oil— — 17,262 — 
Other42,235 3,655 350 2,237 
Subtotal811,957 100,125 62,756 2,237 
Exchange traded:
Corn250,445 — — — 
Soybeans62,785 — — — 
Wheat108,805 — — — 
Oats715 — — — 
Ethanol— 19,488 — — 
Propane— 31,962 — — 
Other— 7,140 16 183 
Subtotal422,750 58,590 16 183 
Total1,234,707 158,715 62,772 2,420 

Interest Rate and Other Derivatives

The Company’s objectives for 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 designated as hedging instruments 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 September 30, 2021, December 31, 2020 and September 30, 2020, the Company had recorded the following amounts for the fair value of the Company's other derivatives:
(in thousands)September 30, 2021December 31, 2020September 30, 2020
Derivatives not designated as hedging instruments
Interest rate contracts included in Accrued expenses and other current liabilities$ $(589)$(879)
Interest rate contracts included in Other long-term liabilities(258)(430)(491)
Foreign currency contracts included in Other assets491 2,753 326 
Derivatives designated as hedging instruments
Interest rate contracts included in Other assets$4,431 $164 $— 
Interest rate contracts included in Accrued expenses and other current liabilities(6,892)(6,664)(8,431)
Interest rate contracts included in Other long-term liabilities(9,146)(18,539)(22,409)

The Andersons, Inc. | Q3 2021 Form 10-Q | 13


The recording of derivatives gains and losses and the financial statement line in which they are located are as follows:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Derivatives not designated as hedging instruments
Interest rate derivative gains (losses) included in Interest income (expense), net$51 $357 $760 $(363)
Derivatives designated as hedging instruments
Interest rate derivative losses included in Other comprehensive income (loss)$(2,044)$2,373 $(12,520)$(18,284)
Interest rate derivatives losses included in Interest income (expense), net(1,746)(2,345)(5,020)(5,045)

Outstanding interest rate derivatives, as of September 30, 2021, are as follows:
Interest Rate Hedging InstrumentYear EnteredYear of MaturityInitial Notional Amount
(in millions)
Description


Interest Rate
Long-term
Swap20142023$23.0 Interest rate component of debt - not accounted for as a hedge1.9%
Swap20172022$20.0 Interest rate component of debt - accounted for as a hedge1.8%
Swap20182023$10.0 Interest rate component of debt - accounted for as a hedge2.6%
Swap20182025$20.0 Interest rate component of debt - accounted for as a hedge2.7%
Swap20192025$100.0 Interest rate component of debt - accounted for as a hedge2.5%
Swap20192025$50.0 Interest rate component of debt - accounted for as a hedge2.5%
Swap20192025$50.0 Interest rate component of debt - accounted for as a hedge2.5%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%


6. Revenue

Many of the Company’s revenues are generated from contracts that are outside the scope of Accounting Standard Codification ("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 leasing revenue is accounted for under ASC 842, Leases. The breakdown of revenues between ASC 606 and other standards are as follows:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Revenues under ASC 606$457,621 $282,258 $1,568,529 $1,066,620 
Revenues under ASC 8152,541,203 1,603,328 7,260,819 4,489,697 
Total revenues$2,998,824 $1,885,586 $8,829,348 $5,556,317 

The Andersons, Inc. | Q3 2021 Form 10-Q | 14


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 nine months ended September 30, 2021 and 2020, respectively:
Three months ended September 30, 2021
(in thousands)TradeEthanolPlant NutrientTotal
Specialty nutrients$ $ $49,249 $49,249 
Primary nutrients  69,835 69,835 
Services8,828  2,233 11,061 
Products and co-products70,924 183,225  254,149 
Frac sand and propane
49,379   49,379 
Other2,163 1,046 20,739 23,948 
Total$131,294 $184,271 $142,056 $457,621 
Three months ended September 30, 2020
(in thousands)TradeEthanolPlant NutrientTotal
Specialty nutrients$— $— $31,835 $31,835 
Primary nutrients— — 62,094 62,094 
Service2,010 — 975 2,985 
Products and co-products55,235 97,703 — 152,938 
Frac sand and propane21,676 — — 21,676 
Other2,414 513 7,803 10,730 
Total$81,335 $98,216 $102,707 $282,258 
Nine months ended September 30, 2021
(in thousands)TradeEthanolPlant NutrientTotal
Specialty nutrients$ $ $210,971 $210,971 
Primary nutrients  355,098 355,098 
Service12,396  7,391 19,787 
Products and co-products217,859 513,132  730,991 
Frac sand and propane178,094   178,094 
Other9,132 5,199 59,257 73,588 
Total$417,481 $518,331 $632,717 $1,568,529 

Nine months ended September 30, 2020
(in thousands)TradeEthanolPlant NutrientTotal
Specialty nutrients$— $— $187,700 $187,700 
Primary nutrients— — 296,247 296,247 
Service6,053 — 3,753 9,806 
Products and co-products171,744 275,175 — 446,919 
Frac sand and propane92,990 — — 92,990 
Other11,732 1,481 19,745 32,958 
Total$282,519 $276,656 $507,445 $1,066,620 

Substantially all of the Company's revenues accounted for under ASC 606 during both three and nine months periods ended September 30, 2021 and 2020, respectively, are recorded at a point in time instead of over time.

The Andersons, Inc. | Q3 2021 Form 10-Q | 15


Contract balances

The balances of the Company’s contract liabilities were $31.2 million and $45.6 million as of September 30, 2021 and December 31, 2020, 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 balance is payments for primary and specialty nutrients received in advance of fulfilling our performance obligations under our customer contracts. Due to seasonality of this business, contract liabilities were built up at year-end in preparation for the spring application season. As expected, the revenue recognized through the first nine months of 2021 satisfied the contract liabilities throughout the application season.


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 nine months ended September 30, 2021, the Company estimated its annual effective tax rate utilizing the annualized effective tax rate method under ASC 740, Income Taxes, to calculate its interim income tax provision. For the nine months ended September 30, 2020, the Company utilized the discrete effective tax rate method, as allowed under ASC 740, to calculate its interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. At the time, it was not possible to reliably estimate the annual effective tax rate for the year due to uncertainty created by the COVID-19 pandemic. As a result, relatively small changes in the provision for income taxes in 2020 caused disproportionate changes in the effective tax rate, as compared to 2021.

For the three months ended September 30, 2021, the Company recorded income tax expense from continuing operations of $4.0 million at an effective income tax rate of 24.7%. The effective tax rate differs from the statutory U.S. Federal tax rate of 21% due to the impacts of state and local taxes, non-deductible compensation and the treatment of mark-to-market activity on certain contracts in the Ethanol segment. The rate impacts were further offset by the portion of income owned by noncontrolling interests that do not result in a tax expense. The change in effective tax rate for the three months ended September 30, 2021 as compared to the same period last year was primarily attributed to additional tax benefits from net operating loss carry backs as a result of the CARES Act in the prior year, offset by the portion of income owned by noncontrolling interests that do not result in a tax expense. For the three months ended September 30, 2020, using the discrete effective tax rate method to calculate the interim tax provision, the Company recorded an income tax benefit from continuing operations of $4.1 million at an effective income tax rate of 175.8%.

For the nine months ended September 30, 2021, the Company recorded an income tax expense from continuing operations of $18.1 million at an effective income tax rate of 21.5%. The effective tax rate differs from the statutory U.S. Federal tax rate of 21% due to the impacts of state and local taxes and non-deductible compensation. The rate impacts were further offset by benefits related to the treatment of mark-to-market activity on certain contracts in the Ethanol segment and the portion of income owned by noncontrolling interests that do not result in a tax expense. The change in effective tax rate for the nine months ended September 30, 2021, as compared to the same period last year was primarily attributed to additional tax benefits from net operating loss carry backs as a result of the CARES Act in the prior year, offset by the favorable impact of the mark-to-market activity on the contracts within the ethanol segment and the portion of income owned by noncontrolling interests that do not result in a tax expense. For the nine months ended September 30, 2020, using the discrete effective tax rate method to calculate the interim tax provision, the Company recorded an income tax benefit from continuing operations of $18.6 million at an effective income tax rate of 36.7%.


The Andersons, Inc. | Q3 2021 Form 10-Q | 16


8. Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) attributable to the Company for the three and nine months ended September 30, 2021 and 2020:

Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Currency Translation Adjustment
Beginning balance$8,432 $(2,325)$5,739 $1,065 
Other comprehensive income (loss) before reclassifications(3,004)2,351 (311)(1,039)
  Tax effect —  — 
Other comprehensive income (loss), net of tax(3,004)2,351 (311)(1,039)
Ending balance$5,428 $26 $5,428 $26 
Hedging Adjustment
Beginning balance$(10,223)$(24,966)$(18,106)$(9,443)
Other comprehensive income (loss) before reclassifications(146)(535)4,467 (18,594)
Amounts reclassified from accumulated other comprehensive income (loss)(a)2,244 3,090 6,604 6,471 
  Tax effect(561)(772)(1,651)(1,617)
Other comprehensive income (loss), net of tax1,537 1,783 9,420 (13,740)
Ending balance$(8,686)$(23,183)$(8,686)$(23,183)
Pension and Other Postretirement Adjustment
Beginning balance$(304)$788 $33 $889 
Other comprehensive income (loss) before reclassifications69 52 74 293 
Amounts reclassified from accumulated other comprehensive income (loss)(b)(228)(228)(684)(684)
  Tax effect57 57 171 171 
Other comprehensive income (loss), net of tax(102)(119)(439)(220)
Ending balance$(406)$669 $(406)$669 
Investments in Convertible Preferred Securities Adjustment
Beginning balance$258 $258 $258 $258 
Other comprehensive income (loss), net of tax —  — 
Ending balance$258 $258 $258 $258 
Total AOCI Ending Balance$(3,406)$(22,230)$(3,406)$(22,230)
(a) Amounts reclassified from gain (loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and is recognized in Interest expense, net. See Note 5 for additional information.
(b) This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost recorded in Operating, administrative and general expenses.


The Andersons, Inc. | Q3 2021 Form 10-Q | 17


9. Earnings Per Share
(in thousands, except per common share data)Three months ended September 30,Nine months ended September 30,
2021202020212020
Numerator:
Net income (loss) from continuing operations$12,290 $1,788 $66,069 $(32,088)
Net income (loss) attributable to noncontrolling interests(a)
(1,602)3,273 (822)(20,583)
Net income (loss) available to The Andersons Inc. common shareholders from continuing operations$13,892 $(1,485)$66,891 $(11,505)
Income (loss) from discontinued operations, net of income taxes$1,846 $427 $7,453 $3,224 
Denominator:
Weighted average shares outstanding – basic33,284 32,962 33,246 32,905 
Effect of dilutive awards350 — 424 — 
Weighted average shares outstanding – diluted33,634 32,962 33,670 32,905 
Earnings (loss) per share attributable to The Andersons, Inc. common shareholders:
Basic earnings (loss):
Continuing operations$0.42 $(0.04)$2.01 $(0.35)
Discontinued operations0.06 0.01 0.22 0.10 
$0.48 $(0.03)$2.23 $(0.25)
Diluted earnings (loss):
Continuing operations$0.41 $(0.04)$1.99 $(0.35)
Discontinued operations0.05 0.01 0.22 0.10 
$0.46 $(0.03)$2.21 $(0.25)
(a) All net income (loss) attributable to noncontrolling interests is within the continuing operations of the Company.

There were 80 thousand antidilutive share awards outstanding for both the three and nine months ended September 30, 2021, respectively. All awards were antidilutive for the three and nine months ended September 30, 2020 as the Company incurred a net loss in both periods.


10. Fair Value Measurements

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at September 30, 2021, December 31, 2020 and September 30, 2020:
(in thousands)September 30, 2021
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)
$122,877 $212,218 $ $335,095 
Provisionally priced contracts (b)
28,469 (25,134) 3,335 
Convertible preferred securities (c)
  11,066 11,066 
Other assets and liabilities (d)
4,171 (11,865) (7,694)
Total$155,517 $175,219 $11,066 $341,802 
The Andersons, Inc. | Q3 2021 Form 10-Q | 18

(in thousands)December 31, 2020
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)
$51,369 $126,098 $— $177,467 
Provisionally priced contracts (b)
19,793 (48,818)— (29,025)
Convertible preferred securities (c)
— — 8,849 8,849 
Other assets and liabilities (d)
7,972 (26,058)— (18,086)
Total$79,134 $51,222 $8,849 $139,205 
(in thousands)September 30, 2020
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)
$11,951 $51,565 $— $63,516 
Provisionally priced contracts (b)
(5,190)(22,541)— (27,731)
Convertible preferred securities (c)
— — 8,654 8,654 
Other assets and liabilities (d)
4,998 (32,210)— (27,212)
Total$11,759 $(3,186)$8,654 $