Segment Information

9 Months Ended

Sep. 30, 2020

5. SEGMENT INFORMATION

The company reports the financial and operating performance for the following four operating segments: (1) ethanol production, which includes the production of ethanol, including industrial-grade alcohol, distillers grains, ultra-high protein and corn oil, (2) agribusiness and energy services, which includes grain handling and storage, commodity marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which includes food-grade corn oil and (4) partnership, which includes fuel storage and transportation services.

Corporate activities include selling, general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment.

During the normal course of business, the operating segments conduct business with each other. For example, the agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains and corn oil for the ethanol production segment. The partnership segment provides fuel storage and transportation services for the ethanol production segment. These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values. Consequently, these transactions affect segment performance; however, they do not impact the company’s consolidated results since the revenues and corresponding costs are eliminated.

The following tables set forth certain financial data for the company’s operating segments (in thousands):


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2020		2019		2020		2019
Revenues:
Ethanol production:
Revenues from external customers	$	332,953	$	484,382	$	1,099,170	$	1,206,107
Intersegment revenues		25		24		75		75
Total segment revenues		332,978		484,406		1,099,245		1,206,182
Agribusiness and energy services:
Revenues from external customers		90,074		146,650		342,078		488,687
Intersegment revenues		5,354		7,293		17,030		19,432
Total segment revenues		95,428		153,943		359,108		508,119
Food and ingredients:
Revenues from external customers		-		-		-		1,451
Intersegment revenues		-		-		-		-
Total segment revenues		-		-		-		1,451
Partnership:
Revenues from external customers		1,035		1,318		3,707		5,315
Intersegment revenues		20,347		18,836		58,327		56,751
Total segment revenues		21,382		20,154		62,034		62,066
Revenues including intersegment activity		449,788		658,503		1,520,387		1,777,818
Intersegment eliminations		(25,726)		(26,153)		(75,432)		(76,258)
Total Revenues	$	424,062	$	632,350	$	1,444,955	$	1,701,560

Refer to Note 2 - Revenue, for further disaggregation of revenue by operating segment.

‎


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2020		2019		2020		2019
Cost of goods sold:
Ethanol production	$	330,162	$	512,527	$	1,103,486	$	1,289,366
Agribusiness and energy services		87,027		150,465		339,332		486,305
Food and ingredients		-		3		-		1,526
Intersegment eliminations		(23,256)		(30,866)		(70,761)		(76,716)
	$	393,933	$	632,129	$	1,372,057	$	1,700,481


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2020		2019		2020		2019
Operating income (loss):
Ethanol production⁽¹⁾	$	(21,351)	$	(49,289)	$	(100,924)	$	(147,366)
Agribusiness and energy services		4,296		(461)		7,207		9,184
Food and ingredients		-		(6)		-		(76)
Partnership		12,986		12,322		37,641		38,029
Intersegment eliminations		(2,447)		4,738		(4,597)		533
Corporate activities		(7,689)		(9,669)		(27,228)		(27,952)
	$	(14,205)	$	(42,365)	$	(87,901)	$	(127,648)

(1)For the nine months ended September 30, 2020, operating loss for ethanol production includes a goodwill impairment charge of $24.1 million.


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2020		2019		2020		2019
Depreciation and amortization:
Ethanol production	$	17,493	$	15,547	$	50,575	$	46,324
Agribusiness and energy services		655		541		1,764		1,642
Partnership		940		991		2,867		2,747
Corporate activities		665		749		2,002		2,250
	$	19,753	$	17,828	$	57,208	$	52,963

The following table sets forth total assets by operating segment (in thousands):


	September 30, 2020		December 31, 2019
Total assets ⁽¹⁾:
Ethanol production	$	916,168	$	884,293
Agribusiness and energy services		293,868		410,400
Partnership		87,299		90,011
Corporate assets		256,063		324,280
Intersegment eliminations		(15,978)		(10,766)
	$	1,537,420	$	1,698,218

(1)Asset balances by segment exclude intercompany balances.