Andersons : Quarterly Report for Quarter Ending 06/30/2026 (Form 10-Q)

About this update from The Andersons, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations Forward Looking Statements The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains forward-looking statements which relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Such factors include, but are not limited to, the effects of economic, weather and agricultural conditions, regulatory conditions, competition globally and in the markets the Company serves, geopolitical risk, fluctuations in cost and availability of commodities, the effectiveness of the Company's internal control over financial reporting and the unpredictability of existing and possible future litigation. However, it is not possible to predict or identify all such factors. The reader is urged to carefully consider these risks and others, including those risk factors listed under Item 1A of the 2025 Form 10-K. In some cases, the reader can identify forward-looking statements by terminology such as may, anticipates, believes, estimates, predicts, or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These forward-looking statements relate only to events as of the date on which the statements are made and the Company undertakes no obligation, other than any imposed by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although management believes that the expectations reflected in the forward-looking statements are reasonable, management cannot guarantee future results, levels of activity, performance or achievements. Critical Accounting Policies and Estimates The critical accounting policies and critical accounting estimates, as described in the 2025 Form 10-K, have not materially changed through the second quarter of 2026. Executive Overview The agricultural commodity-based business is one in which changes in selling prices generally move in relationship to changes in purchase prices. Therefore, increases or decreases in prices of the agricultural commodities that the business deals in will have a relatively equal impact on sales and merchandising revenues and cost of sales and merchandising revenues and a much less significant impact on gross profit. As a result, changes in sales and merchandising revenues and cost of sales and merchandising revenues between periods may not necessarily be indicative of the overall performance of the business and greater emphasis should be placed on changes in gross profit. Agribusiness The Agribusiness segment's second quarter operating results showed a modest improvement in a dynamic and challenging environment. The Company's fertilizer business led the improvement with higher margins on lower volumes. The merchandising results also improved, driven by higher commodity prices and increased volatility early in the quarter, partially offset by fuel surcharges. Grain asset performance was comparable to the prior year as basis values remained muted and producers remained reluctant to market stored grains. The Company is continuing to monitor growing conditions and crop progress. Currently, the eastern corn belt has experienced favorable growing conditions, which could support harvest volumes and grain ownership opportunities this fall. Drier conditions in western production regions could pressure grain asset earnings; however, any resulting market dislocations and volatility should create additional merchandising opportunities. Above-average corn acreage should support demand for fall fertilizer applications, although grower economics could influence purchasing decisions. The Company's diversified agribusiness portfolio remains well positioned to capitalize on both harvest-related opportunities and periods of increased market volatility in the second half of the year. Total Agribusiness grain storage capacity at company-owned or leased grain facilities, including temporary pile storage, was approximately 266 million and 278 million bushels at June 30, 2026 and 2025, respectively. The storage capacity at our nutrient facilities was evenly split between dry and liquid storage with a total capacity of approximately one million tons at June 30, 2026 and 2025. The Andersons, Inc. | Q2 2026 Form 10-Q | 16 Renewables The Renewables segment achieved its highest second quarter results to date on efficient plant operations and improved margins. Strong ethanol export demand and healthy domestic consumption drove higher board crush margins year-over-year, partially offset by firmer corn basis levels. Second quarter results include $24.2 million of clean fuel production credits. Our merchandising businesses also delivered improved results, benefiting from market volatility surrounding the Renewable Volume Obligation ("RVO") announcement, resulting in higher distillers corn oil and Renewable Identification Number ("RIN") values. Ethanol market fundamentals remain supportive as we anticipate continued strong demand, driven by increasing global blend rates and favorable domestic blending economics. Renewable feedstocks are also expected to benefit from healthy bio-based diesel demand and supportive renewable fuel markets. Ethanol and related co-products volumes sold were as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2026 2025 2026 2025 Ethanol (gallons) 181,066 226,450 354,037 438,242 E-85 (gallons) 15,115 12,041 24,786 20,011 Renewable feedstocks (pounds) (a) 575,493 341,075 1,039,660 698,791 DDG (tons) (b) 454 525 932 1,139 (a) Includes corn oil, soybean oil, and other fats, oils, and greases. (b) Dried distillers grains ("DDG") tons shipped converts wet tons to a dry ton equivalent amount. Other Our "Other" activities include corporate income and expense and cost for functions that provide support and services to the operating segments. The results include expenses and benefits not allocated to the operating segments and other elimination and consolidation adjustments. The Andersons, Inc. | Q2 2026 Form 10-Q | 17 Operating Results The following discussion focuses on the operating results as shown in the Condensed Consolidated Statements of Operations and includes a separate discussion by segment. Additional segment information is included herein in Note 3, Segment Information. Comparison of the three months ended June 30, 2026, with the three months ended June 30, 2025, including a reconciliation of GAAP to non-GAAP measures: Three months ended June 30, 2026 (in thousands) Agribusiness Renewables Other Total Sales and merchandising revenues $ 2,113,093 $ 984,567 $ - $ 3,097,660 Cost of sales and merchandising revenues 1,966,315 907,615 - 2,873,930 Gross profit 146,778 76,952 - 223,730 Operating, administrative and general expenses 122,098 34,099 17,577 173,774 Interest expense (income), net 13,330 2,341 (29) 15,642 Other income, net 8,520 24,469 34 33,023 Income (loss) before income taxes $ 19,870 $ 64,981 $ (17,514) $ 67,337 Loss before income taxes attributable to the noncontrolling interests (2,615) - - (2,615) Non-GAAP Income (loss) before income taxes attributable to the Company $ 22,485 $ 64,981 $ (17,514) $ 69,952 Three months ended June 30, 2025 (in thousands) Agribusiness Renewables Other Total Sales and merchandising revenues $ 2,414,827 $ 721,042 $ - $ 3,135,869 Cost of sales and merchandising revenues 2,282,765 694,688 - 2,977,453 Gross profit 132,062 26,354 - 158,416 Operating, administrative and general expenses 114,012 8,951 11,626 134,589 Interest expense (income), net 11,331 725 (561) 11,495 Other income (loss), net 12,180 746 (423) 12,503 Income (loss) before income taxes $ 18,899 $ 17,424 $ (11,488) $ 24,835 Income before income taxes attributable to the noncontrolling interests 1,171 7,779 - 8,950 Non-GAAP Income (loss) before income taxes attributable to the Company $ 17,728 $ 9,645 $ (11,488) $ 15,885 The Company uses Income (loss) before income taxes attributable to the Company, a non-GAAP financial measure as defined by the Securities and Exchange Commission, to evaluate the Company's financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures. Management believes that Income (loss) before income taxes attributable to the Company is a useful measure of the Company's performance as it provides investors additional information about the Company's operations, allowing evaluation of underlying business performance and period-to-period comparability. This measure is not intended to replace or be an alternative to Income (loss) before income taxes, the most directly comparable measure reported under GAAP. The Andersons, Inc. | Q2 2026 Form 10-Q | 18 Agribusiness Operating results for the Agribusiness segment increased from the same period of the prior year. Sales and merchandising revenues decreased by $301.7 million and cost of sales and merchandising revenues decreased by $316.5 million resulting in increased gross profit of $14.7 million. The majority of the decreases in sales and merchandising revenues and the related cost of sales and merchandising revenues were attributable to the Company's ongoing portfolio optimization efforts, including actions taken to reduce its participation in underperforming merchandising businesses. Gross profit increased $14.7 million compared to the prior year period, primarily due to a $9.8 million improvement in the Company's merchandising businesses, driven by higher commodity prices and favorable market volatility early in the quarter. Additionally, recent growth investments contributed positively to gross profit, while ongoing portfolio optimization efforts improved overall profitability. These benefits were partially offset by higher fuel surcharge costs. The year-over-year increase also reflects modest improvements in gross profit across the remainder of the Company's business portfolio. Operating, administrative and general expenses increased by $8.1 million, primarily driven by increased incentives from the Company's strong operating performance. Interest expense, net increased $2.0 million from the prior year due to increased borrowings on the Company's revolving credit facility. Other income, net decreased by $3.7 million, primarily reflecting a $5.5 million reduction in property insurance recoveries recognized in the current quarter. Renewables Operating results for the Renewables segment increased by $55.3 million compared to the same quarter of the prior year, primarily reflecting the recognition of clean fuel production credits in the current year and the benefits of full ownership of the ethanol plants. Sales and merchandising revenues increased by $263.5 million, while related cost of sales and merchandising revenues increased by $212.9 million, resulting in a $50.6 million increase in gross profit year-over-year. Substantially all of the increases in sales and merchandising revenues and the related cost of sales and merchandising revenues were attributable to higher volumes and commodity values within the Renewables segment's renewable feedstocks business. The $50.6 million increase in gross profit for the current period was primarily attributable to a $40.8 million increase in earnings from the Company's ethanol plants, reflecting strong ethanol margins. In addition, the merchandising businesses contributed a $9.0 million increase in gross profit compared to the prior year, benefiting from continued favorable market conditions driven by the final RVO policy and higher RIN values in 2026. Operating, administrative and general expenses increased by $25.1 million, primarily due to a $10.6 million impairment charge related to capitalized engineering and design costs, $11.6 million of additional litigation expenses associated with the receivership of a former consolidated subsidiary, and a $2.5 million increase in incentives driven by the Company's strong operating performance. Interest expense, net increased $1.6 million from the prior year due to increased borrowings on the Company's revolving credit facility. Other income, net increased by $23.7 million compared to the prior year, primarily due to $24.2 million of clean fuel production credits recognized in the current year. Other Results declined by $6.0 million, primarily due to increased incentive costs driven by improved Renewables results along with a $1.5 million impairment charge on a cost method investment. Income Taxes For the three months ended June 30, 2026, the Company recorded an income tax expense of $13.4 million. The Company's effective tax rate was 19.9% on income before taxes of $67.3 million. The difference between the 19.9% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to nontaxable clean fuel production credits offset by state and local taxes, nondeductible compensation, valuation allowances on losses in foreign tax jurisdictions, and other taxes. The Andersons, Inc. | Q2 2026 Form 10-Q | 19 For the three months ended June 30, 2025, the Company recorded income tax expense of $8.0 million. The Company's effective tax rate was 32.3% on income of $24.8 million. The difference between the 32.3% effective tax rate and the U.S. federal statutory tax rate of 21.0% was primarily attributable to interest accrued on unrecognized tax benefits and valuation allowances on losses in foreign tax jurisdictions offset by the tax impact of noncontrolling interest. Comparison of the six months ended June 30, 2026, with the six months ended June 30, 2025, including a reconciliation of GAAP to non-GAAP measures: Six months ended June 30, 2026 (in thousands) Agribusiness Renewables Other Total Sales and merchandising revenues $ 4,033,060 $ 1,691,866 $ - $ 5,724,926 Cost of sales and merchandising revenues 3,752,376 1,588,236 - 5,340,612 Gross profit 280,684 103,630 - 384,314 Operating, administrative and general expenses 243,518 44,399 30,521 318,438 Interest expense, net 27,018 5,400 62 32,480 Other income (loss), net 17,127 50,741 (35) 67,833 Income (loss) before income taxes $ 27,275 $ 104,572 $ (30,618) $ 101,229 Loss before income taxes attributable to the noncontrolling interests (6,471) - - (6,471) Non-GAAP Income (loss) before income taxes attributable to the Company $ 33,746 $ 104,572 $ (30,618) $ 107,700 Six months ended June 30, 2025 (in thousands) Agribusiness Renewables Other Total Sales and merchandising revenues $ 4,408,114 $ 1,386,853 $ - $ 5,794,967 Cost of sales and merchandising revenues 4,157,454 1,326,225 - 5,483,679 Gross profit 250,660 60,628 - 311,288 Operating, administrative and general expenses 238,501 18,734 23,108 280,343 Interest expense (income), net 24,157 1,423 (989) 24,591 Other income (loss), net 21,221 1,834 (1,361) 21,694 Income (loss) before income taxes $ 9,223 $ 42,305 $ (23,480) $ 28,048 (Loss) income before income taxes attributable to the noncontrolling interest (3,351) 17,348 - 13,997 Non-GAAP Income (loss) before income taxes attributable to the Company $ 12,574 $ 24,957 $ (23,480) $ 14,051 Agribusiness Operating results for the Agribusiness segment increased by $21.2 million from the prior year. Sales and merchandising revenues decreased by $375.1 million, and cost of sales and merchandising revenues decreased by $405.1 million for an increased gross profit impact of $30.0 million. The majority of the decrease in sales and merchandising revenues and the related cost of sales and merchandising revenues were attributable to the Company's ongoing portfolio optimization efforts, including actions taken to reduce its participation in underperforming merchandising businesses. The $30.0 million improvement in gross profit from the prior year was primarily driven by a $21.1 million improvement in the Company's merchandising businesses, reflecting favorable market conditions, the benefits of recent capital investments, and the continued optimization of the Company's merchandising portfolio. Also contributing to the increase was a $6.7 million improvement in the Nutrient business, driven by stronger margins. Operating, administrative, and general expenses increased by $5.0 million compared to the prior year, reflecting higher incentive expense from Company's improved financial performance. Interest expense increased by $2.9 million, due to increased borrowings on the Company's revolving credit facility. Other income, net decreased by $4.1 million, primarily reflecting a $4.5 million reduction in property insurance recoveries recognized in the current quarter. The Andersons, Inc. | Q2 2026 Form 10-Q | 20 Renewables The Renewables segment's operating results improved $79.6 million compared to the second quarter of the prior year, primarily reflecting strong ethanol margins, the recognition of clean fuel production credits in the current year, the benefits of full ownership of the ethanol plants. Substantially all of the increases in sales and merchandising revenues and the related cost of sales and merchandising revenues were attributable to higher volumes and commodity values within the Renewables segment's renewable feedstocks business. Gross profit increased by $43.0 million, primarily due to a $27.9 million improvement at the ethanol plants, reflecting strong ethanol margins. In addition, the merchandising businesses contributed a $15.0 million increase in gross profit compared to the prior year, benefiting from continued favorable market conditions driven by the final RVO policy and higher RIN values in 2026. Operating, administrative and general expenses increased by $25.7 million, primarily due to a $10.6 million impairment charge related to capitalized engineering and design costs, $11.3 million of additional litigation expenses associated with the receivership of a former consolidated subsidiary, and $4.1 million of increased incentives as a result of the Company's strong operating performance. Interest expense, net increased $4.0 million from the prior year due to increased borrowings on the Company's revolving credit facility. Other income, net increased by $48.9 million compared to the prior year, primarily driven by the recognition of $50.4 million of clean fuel production credits in the current year. Other Results declined by $7.1 million, primarily due to increased incentive costs driven by improved Renewables results along with a $1.5 million impairment charge on a cost method investment. Income Taxes For the six months ended June 30, 2026, the Company recorded an income tax expense of $17.9 million. The Company's effective tax rate was 17.7% on income before taxes of $101.2 million. The difference between the 17.7% effective tax rate and the U.S. federal statutory rate of 21.0% is primarily attributable to nontaxable clean fuel production credits offset by state and local taxes, nondeductible compensation, valuation allowances on losses in foreign tax jurisdictions, and other taxes. For the six months ended June 30, 2025, the Company recorded income tax expense of $5.9 million. The Company's effective tax rate was 21.1% on income before income taxes of $28.0 million. The 21.1% effective tax rate was consistent with the U.S. federal statutory tax rate of 21.0% as state and local income taxes and valuation allowances on losses in foreign tax jurisdictions offset the tax impact of noncontrolling interest. The Company and its subsidiary partnership returns are under U.S. federal and certain state tax examinations for tax years 2018 through 2024. 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 ongoing examinations and the expiration of applicable statutes of limitations could change our unrecognized tax benefits and favorably impact income tax expense by a range of zero to $10.2 million. On December 20, 2021, the Organization for Economic Co-operation and Development ("OECD") issued Pillar Two model rules introducing a global minimum tax of 15% on large corporations. Although the U.S. has not adopted the Pillar Two model rules, several foreign countries have enacted legislation which closely follows OECD's Pillar Two guidance. Additional OECD guidance issued on January 5, 2026 introduced a "side-by-side" framework which provides relief from certain Pillar Two charging provisions for eligible U.S.-parented multinational groups while keeping foreign country minimum tax regimes in place. Future enactment of the OECD's "side-by-side" framework by our relevant jurisdictions is expected to reduce the Company's exposure to UTPR-related taxes. The impact of other Pillar Two related taxes is not expected to materially impact the Company's effective tax rate. On July 4, 2025, the U.S. passed the OBBBA, which modified the existing international tax framework and permanently extended select provisions of the Tax Cuts and Jobs Act. This legislation is not expected to materially affect the Company's effective tax rate for 2026, with the exception of clean fuel production credits. Changes in the calculation of the carbon intensity score may significantly affect credits, recorded as Other income, resulting in a favorable impact on the effective tax rate through 2029. The Andersons, Inc. | Q2 2026 Form 10-Q | 21 Liquidity and Capital Resources Working Capital At June 30, 2026, the Company had working capital of $702.7 million, a decrease of $392.1 million from the prior year. This decrease was attributable to changes in the following components of current assets and current liabilities: (in thousands) June 30, 2026 June 30, 2025 Variance Current Assets: Cash and cash equivalents $ 66,549 $ 350,970 $ (284,421) Accounts receivable, net 755,217 783,892 (28,675) Inventories 961,002 771,868 189,134 Commodity derivative assets - current 152,333 147,937 4,396 Other current assets 146,684 120,780 25,904 Total current assets 2,081,785 2,175,447 (93,662) Current Liabilities: Short-term debt 314,366 104,467 209,899 Trade and other payables 603,591 572,232 31,359 Customer prepayments and deferred revenue 87,206 73,545 13,661 Commodity derivative liabilities - current 103,710 79,253 24,457 Current maturities of long-term debt 22,918 64,210 (41,292) Accrued expenses and other current liabilities 247,296 186,902 60,394 Total current liabilities 1,379,087 1,080,609 298,478 Working Capital $ 702,698 $ 1,094,838 $ (392,140) As of June 30, 2026, current assets decreased by $93.7 million compared to the prior year, primarily driven by lower cash on hand of $284.4 million from the prior year related to the acquisition of the remaining interest in TAMH later in 2025. The decrease in cash on hand was partially offset by a $189.1 million increase in inventory as a result of increased commodity prices compared to the prior year. Current liabilities increased $298.5 million year over year, primarily driven by $209.9 million of additional borrowings under the Company's revolving credit facilities, reflecting lower cash balances than the prior year following the TAMH transaction and increased market volatility in 2026. Sources and Uses of Cash Six months ended June 30, (in thousands) 2026 2025 Net cash provided by (used in) operating activities $ 94,247 $ (50,699) Net cash used in investing activities (123,257) (75,707) Net cash used in financing activities (2,227) (87,008) Operating Activities Operating activities provided $94.2 million of cash during the first six months of 2026, compared to $50.7 million of cash used in the same period of 2025. The $144.9 million year-over-year increase in cash provided was attributable to a $63.7 million favorable shift in operating assets and liabilities through normal business operations, a $61.1 million improvement to earnings in the current year, and the impact of $15.7 million of noncash impairment charges recognized in the current year. The Andersons, Inc. | Q2 2026 Form 10-Q | 22 Investing Activities Investing activities used $123.3 million of cash during the first six months of 2026, up from $75.7 million in the prior year. The $47.6 million increase was primarily attributable to $31.9 million in higher capital expenditures related to previously announced growth initiatives along with $12.9 million of additional property insurance proceeds received in the prior year. Management expects to invest approximately $225 million in property, plant, and equipment in 2026; roughly split 50% between growth and maintenance capital. Financing Activities Financing activities used $2.2 million of cash during the six months ended June 30, 2026, compared to $87.0 million for the same period in 2025. The $84.8 million year-over-year reduction was primarily driven by 130.3 million of additional borrowings on the Company's short-term lines of credit. This was partially offset by additional net payments of long-term debt of $34.8 million from the prior year. The Company paid $13.6 million in dividends in the first six months of 2026 compared to $13.4 million paid in the prior period. The Company paid dividends of $0.20 and $0.195 per common share in January and April of 2026 and 2025, respectively. On June 18, 2026, the Company declared a cash dividend of $0.20 per common share, payable on July 22, 2026, to shareholders of record on July 1, 2026. The Company believes it has sufficient liquidity to meet its operating needs, capital expenditures, and debt service requirements. As of June 30, 2026, the Company had consolidated cash and cash equivalents of $66.5 million and total long-term debt of $586.4 million, with $22.9 million payable within the next twelve months. The Company's is also party to borrowing arrangements with a syndicate of banks that provide a total borrowing capacity of $1,799.2 million. As of June 30, 2026, the Company had $314.4 million of short-term debt on these borrowing arrangements and $1,481.9 million capacity available for borrowing. A significant portion of the Company's short-term borrowings support grain inventories and other working capital assets that are considered RMIs and are readily convertible to cash through normal merchandising and processing activities. Accordingly, management evaluates liquidity in conjunction with the value of these inventories, available borrowing capacity, and expected operating cash flows, rather than based solely on outstanding debt balances. As of June 30, 2026, the Company had $646.1 million of RMI which exceeded the Company's outstanding short-term debt balances. The Company is typically in a net short-term borrowing position during the first half of the year due to the seasonal nature of its agricultural merchandising and trading activities. Short-term borrowings are primarily used to finance grain inventory purchases and other working capital assets that are expected to be converted to cash in the ordinary course of business. As commodity prices increase, the value of these inventories and related financing requirements generally increase, which may result in higher short-term borrowings and additional margin deposit requirements on exchange-traded futures contracts. Conversely, periods of declining commodity prices or inventory turnover generally release working capital and margin deposits, providing a source of liquidity that may be used to reduce outstanding borrowings. Because a substantial portion of these borrowings bear interest at variable rates, increases in interest rates could have a significant impact on the Company's profitability. The Company's debt structure includes both recourse indebtedness at the parent and certain subsidiaries and non-recourse indebtedness at a consolidated subsidiary. Obligations under the non-recourse debt agreements are limited to the assets and operations of Skyland, a 65% owned and consolidated subsidiary, along with a separate facility under the Company's wholly owned Canadian subsidiary, and are not guaranteed by the parent company. Recourse Financing Arrangements The Company's recourse debt is party to borrowing arrangements with a syndicate of banks that provide a total borrowing capacity of $1,315.0 million, reflecting the amendment that reduced the Company's revolving credit facility by $250.0 million, as discussed within Note 1 to the Condensed Financial Statements. As of June 30, 2026, the Company had $1,152.7 million recourse capacity available for borrowing under its various credit facilities and was in compliance with all financial covenants. The Company does not expect any challenges in complying with the covenant requirements of its recourse debt agreements during the next twelve months. Certain recourse long-term borrowings are collateralized by mortgages on various facilities. The Andersons, Inc. | Q2 2026 Form 10-Q | 23 Non-Recourse Financing Arrangements Skyland maintains a non-recourse credit facility that is secured by substantially all of the assets of the subsidiary. As of June 30, 2026, Skyland had approximately $149.3 million of short-term borrowings and $81.4 million of term debt outstanding, including $9.0 million classified as current maturities of long-term debt. During the second quarter of 2026, Skyland and its lenders executed an amendment to its credit facilities that modified certain financial covenant requirements and increased available liquidity through an additional $10.0 million term loan commitment. As amended, Skyland had approximately $165.8 million of remaining borrowing availability under its credit facilities as of June 30, 2026. Separately, management determined that Skyland was not in compliance with the debt service coverage ratio covenant as of June 30, 2026. Subsequent to June 30, 2026, Skyland obtained a waiver from the lender with respect to the debt service coverage ratio covenant violation. Other than the waiver of the noncompliance, the credit agreement remained unchanged, and the lender did not exercise its rights to accelerate repayment of the outstanding borrowings. Based on current operating forecasts and expected market conditions, management believes Skyland will remain in compliance with the amended covenant requirements throughout the next twelve months. The Company continues to closely monitor Skyland's operating results, liquidity position, and covenant compliance and will evaluate potential operational, financing, and capital structure alternatives to support Skyland's financial position and compliance with its debt obligations. Skyland's credit facility is non-recourse to the Company, and therefore, obligations and covenant compliance under the amended credit agreement are generally limited to the assets and operations of Skyland and are not expected to materially impact the Company's broader liquidity position. The Company's Canadian subsidiary also maintains a non-recourse revolving credit facility that is secured by substantially all of the assets of the subsidiary. As of June 30, 2026, this subsidiary had approximately $5.7 million of short-term borrowings outstanding and $163.5 million available for borrowing. The Company's Canadian subsidiary was in compliance with all its financial covenants as of June 30, 2026. At June 30, 2026, the Company had standby letters of credit outstanding of $2.9 million. The Andersons, Inc. | Q2 2026 Form 10-Q | 24 Item 3. Quantitative and Qualitative Disclosures about Market Risk For further information, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025. There were no material changes in market risk, specifically commodity and interest rate risk, during the six months ended June 30, 2026.

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