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INVESTOR PRESENTATION Fourth Quarter 2025 February 2026
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FORWARD LOOKING STATEMENTS AND NON-GAAP DISCLAIMER This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the ability of the whiskey inventories of MGP Ingredients, Inc. (the “Company” or “MGP”) to provide optionality and upside; ability of the Company to support and meet liquidity needs and build a pipeline of product innovation; and the Company’s 2026 guidance, including its expectations for sales, adjusted EBITDA, adjusted basic earnings per common share ("EPS"), tax rate, shares outstanding, and capital expenditures. Forward looking statements are usually identified by or are associated with words such as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “project,” “forecast,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential,” and similar terminology. These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, Company financial results, and Company financial condition and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation any effects of changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively and any effects of industry dynamics and market conditions; unfavorable economic conditions; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; any inability to successfully complete our capital projects or fund capital expenditures or any warehouse expansion issues; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions, and restrictions; litigation or legal proceedings; limited rights of common stockholders and antitakeover provisions in our governing documents; the impact of issuing shares of our common stock; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; inability to successfully implement our strategies; interest rate increases; reliance on key personnel; impairment charges; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends and make any share repurchases. For further information on these risks and uncertainties and other factors that could affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as well as the Company’s other SEC filings. The Company undertakes no obligation to update any forward-looking statements or information in this presentation, except as required by law. Non-GAAP Financial Measures In addition to providing financial information in accordance with U.S. GAAP, the Company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. In addition to the comparable GAAP measures, the Company has disclosed adjusted operating income, adjusted net income, adjusted EBITDA, net debt, net debt leverage ratio, and adjusted basic and diluted EPS, as well as guidance for adjusted EBITDA and adjusted basic EPS. The presentation of these non-GAAP financial measures should be reviewed in conjunction with operating income, net income, debt, and basic and diluted EPS computed in accordance with U.S. GAAP and should not be considered a substitute for the GAAP measure. We believe that the non-GAAP measures provide useful information to investors regarding the Company's performance and overall results of operations. In addition, management uses these non-GAAP measures in conjunction with GAAP measures when evaluating the Company’s operating results compared to prior periods on a consistent basis, assessing financial trends and for forecasting purposes. Non-GAAP financial measures may not provide information that is directly comparable to other companies, even if similar terms are used to identify such measures. The appendix provide a full reconciliation of historical non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. Full-year 2026 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include without limitation, acquisition related expenses, restructuring and related expenses, and other items not reflective of the Company's ongoing operations. NASDAQ:MGPI2
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QUARTERLY AND FULL-YEAR HIGHLIGHTS • Consolidated 4Q sales decreased 23% to $138.3 million. Full-year sales declined by 24% to $536.4 million. • Branded Spirits accounted for approximately 45% of consolidated sales in 2025, driven by 10% and 5% premium plus growth in 4Q and full year 2025, respectively. Branded Spirits segment sales declined by 1% and 3% for the 4Q and full year. • Distilling Solutions results came in slightly better than initial expectations. 4Q and full-year sales declined by 47% and 45%, respectively, while gross profit declined by 54% and 52%, respectively, primarily due to lower new distillate and aged whiskey sales. • Ingredient Solutions sales decreased by 10% and 7% for the 4Q and full year periods, respectively, as lower production volumes due to inconsistent operational execution more than offset continued consumer demand driven tailwinds. • Full-year adjusted EBITDA and adjusted EPS decreased by 41% and 49%, respectively, to $116.0 million and $2.85. Fourth quarter EBITDA and adjusted EPS decreased to $26.1 million and $0.63. • Cash flows from operations increased by 19% to $121.5 million for 2025 – a record high for MGP . • Net debt leverage ratio remained relatively stable at 2.0x as of December 31, 2025. 3 Note: All comparisons are on a year-over-year basis except where otherwise noted. See appendix for GAAP to non-GAAP reconciliations. 2025 FULL-YEAR RESULTS ABOVE THE TOP END OF GUIDANCE
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FOURTH-QUARTER AND FULL-YEAR CONSOLIDATED RESULTS 4 TANGIBLE PROGRESS ON EACH OF THE FIVE KEY INITIATIVES Note: Amounts may not foot due to rounding. Full YearFourth Quarter Change (%) Price/ MixVol.20252024Reported ($, million) Change (%) Price/ MixVol.Q4 '25Q4 '24Reported ($, million) -3%-1%-2%$232.9$240.8Branded Spirits-1%0%-1%$63.4$64.0Branded Spirits -45%-3%-42%$181.4$332.2Distilling Solutions-47%-1%-46%$43.6$82.0Distilling Solutions -7%-1%-6%$122.0$130.6Ingredient Solutions-10%3%-13%$31.3$34.7Ingredient Solutions -24%--$536.4$703.6Consolidated Sales-23%--$138.3$180.8Consolidated Sales -30%--$199.4$286.3Gross Profit-35%--$48.3$74.5Gross Profit -49%--$87.6$170.7Adjusted Operating Income-60%--$18.7$46.8Adjusted Operating Income -41%--$116.0$196.5Adjusted EBITDA-51%--$26.1$53.1Adjusted EBITDA -49%--$2.85$5.64Adjusted EPS-60%--$0.63$1.57Adjusted EPS 19%--$121.5$102.3Cash flow from Operations1%--$29.1$28.8Cash flow from Operations
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FOURTH-QUARTER AND FULL-YEAR ADJUSTED EPS BRIDGE 5 1 Items are net of tax based on the adjusted effective tax rate for the base year (2024), excluding the impacts of non-GAAP items. Note: See appendix for GAAP to non-GAAP reconciliations Fourth Quarter $1.57 ($0.98) ($0.01) $0.02 $0.01 $0.02 $0.63 Adjusted Basic and Diluted EPS Q4 2024 Operating income Interest expense, net Other income (expense), net Weighted average shares outstanding Effective tax rate Adjusted Basic and diluted EPS Q4 2025 Full Year 2025 $5.64 ($2.87) ($0.04) ($0.05) $0.05 $0.09 $0.02 $0.01 $2.85 Adjusted Basic and Diluted EPS 2024 Operating income Interest expense, net Other income (expense), net Weighted average shares outstanding Effective tax rate Participanting securities NCI Adjusted Basic and diluted EPS 2025
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DISCIPLINED INVENTORY MANAGEMENT THROUGH THE CYCLE 6 * Barreled inventory values are recorded at costs AGING WHISKEY INVENTORIES CONTINUE TO PROVIDE POTENTIAL LONG-TERM OPTIONALITY AND UPSIDE $68.6 $25.0 $51.1 $32.9 $18.5 $0 $10 $20 $30 $40 $50 $60 $70 $80 $0 $50 $100 $150 $200 $250 $300 $350 2021 2022 2023 2024 2025 Annual Net Whiskey Putaway ($, million) Barreled Inventory* ($, million) Barreled Inventory* Net Whiskey Putaway
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STRONG FOCUS ON CASH GENERATION 7 Note: See appendix for GAAP to non-GAAP reconciliations $102.3 -$80.5 $36.6 $14.4 $25.4 $23.4 $121.6 2024 Cashflow from Operations Decrease in Adj. EBITDA Change in Receivables, net Decrease in Net Barrelled Whiskey Putaway Decrease in Tax Payments Other Working Capital Changes 2025 Cashflow from Operations Cashflow from Operations 2025 vs. 2024 $ in millions TIGHTER WORKING CAPITAL MANAGEMENT, INCLUDING LOWER WHISKEY PUTAWAY, DROVE DOUBLE DIGIT INCREASE IN CASHFLOW FROM OPERATIONS
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BALANCE SHEET FLEXIBILITY • Strong cash-flows from operations and lower capital spending enabled debt paydown of nearly $69 million in 2025. • Operating cash flows increased 19% in 2025 compared to 2024. • Capital expenditures decreased 54% in 2025 compared to 2024. • Balance sheet remains strong with total debt of $252 million and a net leverage ratio of 2.0x as of December 31, 2025. • In 2025, we successfully upsized our credit facility to $500 million and extended its maturity to 2030, while also extending the shelf for issuing up to $250 million of senior secured promissory notes to 2028. This refinancing provides availability and flexibility to meet near- term liquidity needs. 8 Note: See appendix for GAAP to non-GAAP reconciliations PROACTIVE AND PRUDENT ACTIONS TO UPSIZE CREDIT FACILITY SUPPORT NEAR-TERM LIQUIDITY NEEDS
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BRANDED SPIRITS – FOURTH-QUARTER AND FULL-YEAR RESULTS 9 CONTINUED PREMIUM PLUS MOMENTUM DROVE SEGMENT PERFORMANCE Note: Totals may not match due to rounding. All comparisons are on a year-over-year basis. See appendix for GAAP to non-GAAP reconciliations Full YearFourth Quarter Change (%)20252024Reported ($, million) Change (%)Q4 '25Q4 '24Reported ($, million) 5%$116.7$111.0Premium Plus10%$31.2$28.3Premium Plus -13%$92.1$105.6Mid/Value-11%$24.3$27.2Mid/Value -1%$24.1$24.3Other-6%$8.0$8.5Other -3%$232.9$240.8Branded Spirts Sales-1%$63.4$64.0Branded Spirts Sales -2%$115.3$118.2Gross Profit-2%$28.9$29.6Gross Profit 21%$50.4$41.6Adjusted Operating Income5%$10.6$10.1Adjusted Operating Income
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PREMIUM PLUS HAS DRIVEN SALES AND GROSS MARGIN 10 Branded Spirits Gross Margin 40.1% 44.4% 49.1% 49.5% 35.0% 37.0% 39.0% 41.0% 43.0% 45.0% 47.0% 49.0% 51.0% 2022 2023 2024 2025 Branded Spirits Gross Margin Premium Plus Share of Branded Spirits Sales 36% 42% 46% 50% 30% 34% 38% 42% 46% 50% 2022 2023 2024 2025 Premium Plus' Share of Reported Branded* Sales
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+48% *13 Week Y/Y *Nielsen sales dollars for period ending 1/24/2026 Industry Premium Plus American Whiskey: -6% *13 Week Y/Y 13W ONE OF THE FASTEST GROWING PREMIUM+ BRANDS IN AMERICAN WHISKEY +76% *52 Week Y/Y Industry Premium Plus American Whiskey: -4% *52 Week Y/Y 52W +66% *26 Week Y/Y Industry Premium Plus American Whiskey: -5% *26 Week Y/Y 26W FOCUSED ON OUR BIGGEST GROWTH OPPORTUNITIES PENELOPE CONTINUES TO BE ONE OF THE FASTEST GROWING PREMIUM PLUS BRANDS IN AMERICAN WHISKEY
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CONSUMER CENTRIC INNOVATION ACROSS FOCUS BRANDS BUILDING A STRONG PIPELINE OF ON-TREND NEW PRODUCT INNOVATION AMERICAN WHISKEY AMERICAN WHISKEY PREPARED COCKTAILS PREPARED COCKTAILS UNIQUE FLAVORS UNIQUE FLAVORS PACKAGE & SIZE PACKAGE & SIZE
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PORTFOLIO OF AWARD-WINNING BRANDS CONTINUED IN 2025 INDUSTRY-LEADING CRITICAL ACCLAIM ACROSS BOTH WHISKEY AND TEQUILA #15 #17
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DISTILLING SOLUTIONS – FOURTH-QUARTER AND FULL-YEAR RESULTS 14 FULL-YEAR RESULTS SLIGHTLY BETTER THAN INITIAL EXPECTATIONS Note: Totals may not match due to rounding. All comparisons are on a year-over-year basis. See appendix for GAAP to non-GAAP reconciliations Full YearFourth Quarter Change (%)20252024Reported ($, million) Change (%)Q4 '25Q4 '24Reported ($, million) -52%$128.5$265.9Brown Goods-53%$31.3$67.0Brown Goods -3%$32.4$33.4Warehouse Services-6%$8.3$8.8Warehouse Services -38%$20.6$32.9White Goods and Other Co-Products-34%$4.0$6.2White Goods and Other Co-Products -45%$181.4$332.2Distilling Solutions Sales-47%$43.6$82.0Distilling Solutions Sales -52%$68.6$141.9Gross Profit-54%$16.9$36.7Gross Profit -53%$65.1$137.6Adjusted Operating Income-54%$16.2$35.2Operating Income
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INGREDIENT SOLUTIONS – FOURTH-QUARTER AND FULL-YEAR RESULTS 15 RESULTS PRESSURED BY EQUIPMENT OUTAGE, OPERATIONAL RELIABILITY ISSUES, AND HIGH WASTE STARCH STREAM DISPOSAL COSTS Note: Totals may not match due to rounding. All comparisons are on a year-over-year basis. Full YearFourth Quarter Change (%)20252024Reported ($, million) Change (%)Q4 '25Q4 '24Reported ($, million) -10%$68.1$76.0Specialty Starches-8%$16.8$18.4Specialty Starches -4%$39.9$41.8Specialty Proteins-14%$11.0$12.8Specialty Proteins 9%$14.0$12.8All Others-4%$3.4$3.6All Others -7%$122.0$130.6Ingredient Solutions Sales-10%$31.3$34.7Ingredient Solutions Sales -41%$15.5$26.2Gross Profit-70%$2.4$8.2Gross Profit -49%$10.5$20.5Operating Income-79%$1.4$6.8Operating Income
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Full Year 2026 Guidance1 $480 million to $500 million Sales $90 million to $98 millionAdjusted EBITDA $1.50 to $1.80Adjusted basic EPS ~ 27%Effective tax rate ~ 21.4 millionBasic weighted average shares outstanding ~ $20 millionCapital expenditures 2026 FINANCIAL GUIDANCE 16 1 Guidance is as of February 25, 2026.
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APPENDIX
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CHANGE IN BASIC AND DILUTED EPS 18 1 Items are net of tax based on the effective tax rate for the base year (2024) ChangeEPSChange in Basic and Diluted EPS, quarter versus quarter $(1.91)Quarter ended December 31, 2025 (332)%(6.34)Change in operating income 1 2%0.03 Change in interest expense, net1 (1)% (0.01) Change in other income, net1 108%2.07Change in effective tax rate (5)%(0.10)Change in weighted average shares outstanding 2%0.04Change in income allocated to participating securities (226)%$(6.22)Quarter ended December 31, 2025 ChangeEPSChange in Basic and Diluted EPS, year versus year $1.56Year ended December 31, 2024 (246)%(3.84)Change in operating income 1 2%0.03 Change in interest expense, net1 (2)% (0.03) Change in other income (expense), net1 (167)%(2.60)Change in effective tax rate 3%0.04Change in income attributable to participating securities (10)%(0.15)Change in weighted average shares outstanding (420)%$(4.99)Year ended December 31, 2025
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 19 NET INCOME TO ADJUSTED EBITDA AND NET DEBT LEVERAGE RATIO 20252024202320222021($ in thousands) $(107,832)$34,465$107,130$108,872$90,817 Net Income (Loss) 7,0448,4396,6475,4514,037 Interest 7,48233,97734,61631,30030,279 Taxes 24,08621,98922,11321,45519,092 Depreciation and amortization 4,2163,1887,5015,5023,306Share-based compensation expense2 (1,187)(1,827)3372,2201,611Equity method investment loss (gain) -13719,391--Impairment of long-lived assets and other 25,50016,1007,100--Fair value of contingent consideration 152,62273,755---Goodwill and indefinite-lived intangible asset impairment 495----Professional service fees 803----Restructuring and other costs -1162,060-8,927Business acquisition costs 2,7784,0753,134--Executive transition costs ----(16,325)Insurance recoveries -2,081---Unusual items cost ----2,529Inventory step-up – Branded Spirits $116,007$196,495$210,029$174,800$144,273Adjusted EBITDA $252,318$323,541$287,249$230,335$233,399Total debt 18,46025,27318,38847,88921,568Cash and cash equivalents $233,858$298,268$268,861$182,446$211,831Total net debt 2.0x1.5x1.3x1.0x1.5xNet debt leverage ratio1 1 Net debt leverage ratio is defined as net debt divided by adjusted EBITDA, 2 This amount excludes share based compensation related to executive transition costs
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 20 FOR THE QUARTERS ENDED DECEMBER 31, 2025 AND 2024 Basic and Diluted EPSNet Income (loss)Operating Income (loss)Quarter Ended December 31, 2025 (in thousands, except per share amounts) $(6.22)$(134,631)$(135,202)Reported GAAP Results 6.81147,374152,622Goodwill and indefinite-lived intangible asset impairment 0.03709953Executive transition costs -84113Professional services fees 0.01141190Restructuring and other costs $0.63$13,677$18,676Adjusted Non-GAAP Results Basic and Diluted EPSNet Income (loss)Operating Income (loss)Quarter Ended December 31, 2024 (in thousands, except per share amounts) $(1.91)$(41,998)$(30,442)Reported GAAP Results 3.3673,75573,755Goodwill impairment 0.01152200Fair value of contingent consideration -1115Business acquisition costs 0.102,1712,857Executive transition costs 0.01310408Unusual items costs $1.57$34,401$46,793Adjusted Non-GAAP Results
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 21 FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 Basic and Diluted EPSNet Income (loss)Operating Income (loss)Year Ended December 31, 2025 (in thousands, except per share amounts) $(4.99)$(107,832)$(94,615)Reported GAAP Results 6.81147,374152,622Goodwill and indefinite-lived intangible asset impairment 0.8818,97225,500Fair value of contingent consideration 0.102,0672,778Executive transition costs 0.02368495Professional services fees 0.03597803Restructuring and other costs $2.85$61,546$87,583Adjusted Non-GAAP Results Basic and Diluted EPSNet IncomeOperating IncomeYear Ended December 31, 2024 (in thousands, except per share amounts) $1.56$34,465$74,426Reported GAAP Results 3.3173,75573,755Goodwill impairment 0.01104137Impairment of long-lived assets and other 0.5512,25216,100Fair value of contingent consideration -88116Business acquisition costs 0.143,1014,075Executive transition costs 0.071,5842,081Unusual items costs $5.64$125,349$170,690Adjusted Non-GAAP Results
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 22 FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2025 AND 2024 – BRANDED SPIRITS Operating IncomeQuarter Ended December 31, 2025 (in thousands) $(142,022)Reported GAAP Results – Branded Spirits 152,622Goodwill and indefinite-lived intangible asset impairment $10,600Adjusted Non-GAAP Results – Branded Spirits Operating IncomeQuarter Ended December 31, 2024 (in thousands) $(63,814)Reported GAAP Results – Branded Spirits 73,755Goodwill impairment 200Fair value of contingent consideration $10,141Adjusted Non-GAAP Results – Branded Spirits Operating IncomeYear Ended December 31, 2024 (in thousands) $(48,279)Reported GAAP Results – Branded Spirits 73,755Goodwill impairment 16,100Fair value of contingent consideration $41,576Adjusted Non-GAAP Results – Branded Spirits Operating IncomeYear Ended December 31, 2025 (in thousands) $(127,680)Reported GAAP Results – Branded Spirits 152,622Goodwill and indefinite-lived intangible asset impairment 25,500Fair value of contingent consideration $50,442Adjusted Non-GAAP Results – Branded Spirits
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 23 FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 – DISTILLING SOLUTIONS Operating IncomeYear Ended December 31, 2024 (in thousands) $137,468Reported GAAP Results – Distilling Solutions 137Impairment of long-lived assets and other $137,605Adjusted Non-GAAP Results – Distilling Solutions Operating IncomeYear Ended December 31, 2025 (in thousands) $65,079Reported GAAP Results – Distilling Solutions $65,079Adjusted Non-GAAP Results – Distilling Solutions
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RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES 24 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA Quarter Ended 12/31/2024 Quarter Ended 12/31/2025 ($ in thousands) $(41,998)$(134,631)Net income (loss) 2,0411,554Interest expense 10,053(1,773)Income tax expense (benefit) 5,6916,262Depreciation and amortization 4401,129Share based compensation1 (381)(318)Equity method investment gain 73,755152,622Goodwill and indefinite-lived intangible asset impairment 2,857953Executive transition costs -113Professional service fees -190Restructuring and other costs 200-Fair value of contingent consideration 15-Business acquisition costs 408-Unusual items costs $53,081$26,101Adjusted EBITDA 1 This amount excludes share based compensation related to executive transition costs
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DESCRIPTION OF NON-GAAP ITEMS • Goodwill and indefinite-lived intangible asset impairment relates to the write down of goodwill and indefinite-lived intangible assets during the quarter and year ended December 31, 2025. Goodwill impairment relates to the write down of the goodwill during the quarter and year ended December 31, 2024. The goodwill impairment is nondeductible for income tax purposes. It is included in the Consolidated Statement of Income (Loss) as a component of operating income and relates to the Branded Spirits segment. • Fair value of contingent consideration relates to the quarterly adjustment of the contingent consideration liability related to the acquisition of Penelope Bourbon LLC. It is included in the Consolidated Statement of Income (Loss) as a component of operating income and relates to the Branded Spirits segment. • The executive transition costs are included in the Consolidated Statement of Income (Loss) within the selling, general and administrative line item. The adjustment includes costs related to the transition of certain executive positions. • The professional services fees are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes costs related to professional services in conjunction with the goodwill impairment valuation. • Business acquisition costs are included in the Condensed Consolidated Statement of Income within the selling, general, and administrative line item and include transaction and integration costs associated with the various acquisitions and mergers. • The restructuring and other costs are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes special one-time severance costs related to the reduction in force that occurred during 2025. • The impairment of long-lived assets and other relates to impairments of assets as well as miscellaneous expenses in connection with the closure of the Atchison distillery. Impairment of long-lived assets and other are included in the Condensed Consolidated Statement of Income as a component of operating income and relates to the Distilling Solutions segment. • The unusual items costs are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes professional and legal costs associated with special projects. • The insurance recovery costs are included in the Consolidated Statement of Income within the insurance recoveries line item. During November 2020, we experienced a fire at the Atchison facility. The fire damaged certain equipment in the facility’s feed drying operations and caused a temporary loss of production time. This adjustment includes the legally binding commitment from our insurance carrier for final settlement for the replacement of the damaged dryer. • The finished goods inventory valuation step-up costs are included in the Consolidated Statement of Income within cost of goods by the Branded Spirits segment. The adjustment includes the purchase accounting adjustment to value the acquired finished goods inventory at its estimated fair value. 25