0001309402us-gaap:OperatingSegmentsMembergpre:PartnershipSegmentMembergpre:CornOilMember2022-04-012022-06-30
UNITED STATES
______________________
Quarterly Report Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Green Plains Inc.
Iowa | 84-1652107 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
1811 Aksarben Drive, Omaha, NE 68106 | (402) 884-8700 | ||||
(Address of principal executive offices, including zip code) | (Registrant’s telephone number, including area code) |
Title of each class Common Stock, par value $0.001 per share Large accelerated filer ☒ Smaller reporting company ☐ Green Plains; the company Green Plains Inc. and its subsidiaries FQT Fluid Quip Technologies, LLC Green Plains Commodity Management Green Plains Commodity Management LLC Green Plains Finance Company Green Plains Finance Company LLC Green Plains Grain Green Plains Grain Company LLC Green Plains Mount Vernon; Mount Vernon Green Plains Mount Vernon LLC Green Plains Obion; Obion Green Plains Obion LLC Green Plains Partners; the partnership Green Plains Partners LP Green Plains Shenandoah; Shenandoah Green Plains Shenandoah LLC Green Plains Trade Green Plains Trade Group LLC Green Plains Wood River; Wood River Green Plains Wood River LLC AOCI Accounting Standards Codification EBITDA Earnings before interest, income taxes, depreciation and amortization EPS Earnings per share Exchange Act Securities Exchange Act of 1934, as amended GAAP U.S. Generally Accepted Accounting Principles LIBOR London Interbank Offered Rate SEC Securities and Exchange Commission SOFR Secured Overnight Financing Rate BlackRock Funds and accounts managed by BlackRock the CARES Act Coronavirus Aid, Relief, and Economic Security Act COVID-19 Coronavirus Disease 2019 CST DOE Department of Energy E10 Gasoline blended with up to 10% ethanol by volume E15 Gasoline blended with up to 15% ethanol by volume EIA U.S. Energy Information Administration EPA U.S. Environmental Protection Agency FFV Flexible-fuel vehicle LCFS Low Carbon Fuel Standard MmBtu Million British Thermal Units Mmg Million gallons Maximized Stillage Coproducts produced using process technology developed by Fluid Quip Technologies LLC MTBE Methyl tertiary-butyl ether RFS Renewable Fuels Standard RIN Renewable identification number RVO Renewable volume obligation SRE Small refinery exemption U.S. United States USDA U.S. Department of Agriculture PART 1 – FINANCIAL INFORMATION March 31, December 31, (unaudited) ASSETS ASSETS Current assets Cash and cash equivalents $ 509,195 $ 426,220 Restricted cash 95,070 134,739 Marketable securities 24,942 124,859 Accounts receivable, net of allowances of $282 and $682, respectively 142,041 119,961 Income taxes receivable 646 911 Inventories 313,950 267,838 Prepaid expenses and other 20,675 16,483 Derivative financial instruments 56,087 26,738 Total current assets 1,162,606 1,117,749 Property and equipment, net of accumulated depreciation 940,912 893,517 Operating lease right-of-use assets 64,376 64,042 Other assets 84,607 84,447 Total assets $ 2,252,501 $ 2,159,755 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 106,308 $ 146,063 Accrued and other liabilities 46,979 56,980 Derivative financial instruments 64,620 43,244 Operating lease current liabilities 16,859 16,814 Short-term notes payable and other borrowings 310,190 173,418 Current maturities of long-term debt 35,701 35,285 Total current liabilities 580,657 471,804 Long-term debt 557,937 514,006 Operating lease long-term liabilities 50,233 49,795 Other liabilities 21,067 22,131 Total liabilities 1,209,894 1,057,736 Commitments and contingencies (Note 13) Stockholders' equity Common stock, $0.001 par value; 75,000,000 shares authorized; 62 62 Additional paid-in capital 1,067,651 1,069,573 Retained deficit (76,673) (15,199) Accumulated other comprehensive loss (8,889) (12,310) Treasury stock, 8,244,456 shares (91,626) (91,626) Total Green Plains stockholders' equity 890,525 950,500 Noncontrolling interests 152,082 151,519 Total stockholders' equity 1,042,607 1,102,019 Total liabilities and stockholders' equity $ 2,252,501 $ 2,159,755 GREEN PLAINS INC. AND SUBSIDIARIES Three Months Ended 2022 2021 Revenues Product revenues $ 776,690 $ 551,980 Service revenues 4,745 1,660 Total revenues 781,435 553,640 Costs and expenses Cost of goods sold (excluding depreciation and amortization expenses reflected below) 772,509 509,233 Operations and maintenance expenses 5,566 5,754 Selling, general and administrative expenses 30,863 23,518 Gain on sale of assets, net - (36,893) Depreciation and amortization expenses 20,399 20,681 Total costs and expenses 829,337 522,293 Operating income (loss) (47,902) 31,347 Other income (expense) Interest income 71 30 Interest expense (8,806) (31,679) Other, net 411 10 Total other expense (8,324) (31,639) Loss before income taxes and income (loss) from equity method investees (56,226) (292) Income tax benefit (expense) 1,153 (1,862) Income (loss) from equity method investees (799) 175 Net loss (55,872) (1,979) Net income attributable to noncontrolling interests 5,602 4,566 Net loss attributable to Green Plains $ (61,474) $ (6,545) Earnings per share: Net loss attributable to Green Plains - basic and diluted $ (1.16) $ (0.17) Weighted average shares outstanding: Basic and diluted 52,887 37,695 GREEN PLAINS INC. AND SUBSIDIARIES Three Months Ended 2022 2021 Net loss $ (55,872) $ (1,979) Other comprehensive income (loss), net of tax: Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of ($1,921) and $1,527, respectively 5,386 (4,849) Reclassification of realized losses (gains) on derivatives, net of tax expense of $701 and $434, respectively (1,965) (1,377) Total other comprehensive income (loss), net of tax 3,421 (6,226) Comprehensive loss (52,451) (8,205) Comprehensive income attributable to noncontrolling interests 5,602 4,566 Comprehensive loss attributable to Green Plains $ (58,053) $ (12,771) GREEN PLAINS INC. AND SUBSIDIARIES Three Months Ended 2022 2021 Cash flows from operating activities: Net loss $ (55,872) $ (1,979) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 20,399 20,681 Amortization of debt issuance costs and debt discount 1,846 2,672 Gain on sale of assets, net - (36,303) Loss on extinguishment of debt - 22,100 Deferred income taxes (1,219) 1,960 Stock-based compensation 1,875 882 Loss (income) from equity method investees 799 (175) Other (442) (82) Changes in operating assets and liabilities before effects of business combinations and dispositions: Accounts receivable (22,783) (6,874) Inventories (46,112) 332 Derivative financial instruments (3,788) 18,574 Prepaid expenses and other assets (4,192) 917 Accounts payable and accrued liabilities (52,661) (62,032) Current income taxes 265 177 Other (655) 2,169 Net cash used in operating activities (162,540) (36,981) Cash flows from investing activities: Purchases of property and equipment, net (61,984) (31,524) Proceeds from the sale of assets - 73,846 Proceeds from the sale of marketable securities 99,917 - Net cash provided by investing activities 37,933 42,322 Cash flows from financing activities: Proceeds from the issuance of long-term debt 45,000 355,000 Payments of principal on long-term debt (1,177) (135,835) Proceeds from short-term borrowings 1,075,119 686,486 Payments on short-term borrowings (939,647) (691,166) Payments on extinguishment of convertible debt - (20,861) Payments of cash distributions (5,122) (1,395) Proceeds from issuance of common stock, net - 191,134 Payments of loan fees (2,522) (8,614) Payments related to tax withholdings for stock-based compensation (3,738) (3,804) Other financing activities - 3,330 Net cash provided by financing activities 167,913 374,275 Net change in cash, cash equivalents and restricted cash 43,306 379,616 Cash, cash equivalents and restricted cash, beginning of period 560,959 274,810 Cash, cash equivalents and restricted cash, end of period $ 604,265 $ 654,426 Continued on the following page GREEN PLAINS INC. AND SUBSIDIARIES Continued from the previous page Three Months Ended 2022 2021 Reconciliation of total cash, cash equivalents and restricted cash: Cash and cash equivalents $ 509,195 $ 446,833 Restricted cash 95,070 207,593 Total cash, cash equivalents and restricted cash $ 604,265 $ 654,426 Supplemental investing activities: Assets disposed of in sale $ - $ 35,317 Less: liabilities relinquished - (415) Net assets disposed $ - $ 34,902 Supplemental disclosures of cash flow: Cash refunded for income taxes, net $ (198) $ (106) Cash paid for interest of continuing operations $ 10,212 $ 8,688 Capital expenditures in accounts payable $ 14,620 $ 15,569 Cash premium paid for extinguishment of convertible notes $ - $ 20,861 GREEN PLAINS INC. AND SUBSIDIARIES Description of Business Shipping and Handling Costs financial instruments are recognized in current assets or current liabilities at fair value. Three Months Ended March 31, 2022 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ - $ - $ - $ - $ - Distillers grains 7,362 - - - 7,362 Corn oil - - - - - Service revenues 3,740 - 1,005 - 4,745 Other 9,621 1,288 - - 10,909 Intersegment revenues - - 1,885 (1,885) - Total revenues from contracts with customers 20,723 1,288 2,890 (1,885) 23,016 Revenues from contracts accounted for as derivatives under ASC 815 (1): Ethanol 471,922 95,660 - - 567,582 Distillers grains 98,512 15,126 - - 113,638 Corn oil 40,889 2,406 - - 43,295 Grain - 102 - - 102 Other 5,507 28,295 - - 33,802 Intersegment revenues - 5,835 - (5,835) - Total revenues from contracts accounted for as derivatives 616,830 147,424 - (5,835) 758,419 Leasing revenues under ASC 842 (2): - - 16,210 (16,210) - Total Revenues $ 637,553 $ 148,712 $ 19,100 $ (23,930) $ 781,435 Three Months Ended March 31, 2021 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ - $ - $ - $ - $ - Distillers grains 3,613 - - - 3,613 Corn oil - - - - - Service revenues 563 - 1,057 - 1,620 Other 4,062 826 - - 4,888 Intersegment revenues - - 2,006 (2,006) - Total revenues from contracts with customers 8,238 826 3,063 (2,006) 10,121 Revenues from contracts accounted for as derivatives under ASC 815 (1): Ethanol 289,585 75,912 - - 365,497 Distillers grains 95,694 9,239 - - 104,933 Corn oil 14,540 4,811 - - 19,351 Grain - 12,170 - - 12,170 Other 15,665 25,863 - - 41,528 Intersegment revenues - 5,123 - (5,123) - Total revenues from contracts accounted for as derivatives 415,484 133,118 - (5,123) 543,479 Leasing revenues under ASC 842 (2): - - 17,343 (17,303) 40 Total Revenues $ 423,722 $ 133,944 $ 20,406 $ (24,432) $ 553,640 DISPOSITION There have been no changes in valuation techniques and inputs used in measuring fair value. The company’s assets and liabilities by level are as follows (in thousands): Fair Value Measurements at March 31, 2022 Quoted Prices in Significant Other (Level 1) (Level 2) Total Assets: Cash and cash equivalents $ 509,195 $ - $ 509,195 Restricted cash 95,070 - 95,070 Inventories carried at market - 70,460 70,460 Unrealized gains on derivatives - 54,149 54,149 Other assets 110 464 574 Total assets measured at fair value $ 604,375 $ 125,073 $ 729,448 Liabilities: Accounts payable (1) $ - $ 5,488 $ 5,488 Accrued and other liabilities (2) - 3,339 3,339 Unrealized losses on derivatives - 34,206 34,206 Other liabilities (2) - 7,776 7,776 Total liabilities measured at fair value $ - $ 50,809 $ 50,809 Fair Value Measurements at December 31, 2021 Quoted Prices in Significant Other (Level 1) (Level 2) Total Assets: Cash and cash equivalents $ 426,220 $ - $ 426,220 Restricted cash 134,739 - 134,739 Inventories carried at market - 72,320 72,320 Unrealized gains on derivatives - 26,738 26,738 Other assets 111 8 119 Total assets measured at fair value $ 561,070 $ 99,066 $ 660,136 Liabilities: Accounts payable (1) $ - $ 12,617 $ 12,617 Accrued and other liabilities (2) - 3,260 3,260 Unrealized losses on derivatives - 26,117 26,117 Other liabilities (2) - 7,788 7,788 Total liabilities measured at fair value $ - $ 49,782 $ 49,782 (1)Accounts payable is generally stated at historical amounts with the exception of Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible and intangible assets and goodwill acquired represent Level 3 measurements which were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued. Three Months Ended 2022 2021 Revenues: Ethanol production: Revenues from external customers $ 637,553 $ 423,722 Intersegment revenues - - Total segment revenues 637,553 423,722 Agribusiness and energy services: Revenues from external customers 142,877 128,821 Intersegment revenues 5,835 5,123 Total segment revenues 148,712 133,944 Partnership: Revenues from external customers 1,005 1,097 Intersegment revenues 18,095 19,309 Total segment revenues 19,100 20,406 Revenues including intersegment activity 805,365 578,072 Intersegment eliminations (23,930) (24,432) Total Revenues $ 781,435 $ 553,640 Three Months Ended 2022 2021 Cost of goods sold: Ethanol production $ 661,560 $ 415,525 Agribusiness and energy services 134,439 116,074 Intersegment eliminations (23,490) (22,366) $ 772,509 $ 509,233 Three Months Ended 2022 2021 Operating income (loss): Ethanol production (1) $ (51,158) $ (20,320) Agribusiness and energy services 10,408 13,346 Partnership 11,809 12,871 Intersegment eliminations (440) (2,066) Corporate activities (2) (18,521) 27,516 $ (47,902) $ 31,347 Three Months Ended 2022 2021 Depreciation and amortization: Ethanol production $ 18,432 $ 18,528 Agribusiness and energy services 464 607 Partnership 898 887 Corporate activities 605 659 $ 20,399 $ 20,681 March 31, 2022 December 31, 2021 Total assets (1): Ethanol production $ 1,093,026 $ 1,101,151 Agribusiness and energy services 608,136 487,164 Partnership 98,692 100,349 Corporate assets 479,185 524,206 Intersegment eliminations (26,538) (53,115) $ 2,252,501 $ 2,159,755 March 31, 2022 December 31, 2021 Finished goods $ 132,198 $ 91,448 Commodities held for sale 5,141 72,320 Raw materials 119,122 50,604 Work-in-process 22,255 19,783 Supplies and parts 35,234 33,683 $ 313,950 $ 267,838 7. DERIVATIVE FINANCIAL INSTRUMENTS Asset Derivatives' Liability Derivatives' Fair Value Fair Value March 31, December 31, March 31, December 31, Derivative financial instruments $ 54,149 (1) $ 26,738 $ 34,206 (2) $ 26,117 (3) Other assets 464 8 - - Other liabilities - - 1 196 Total $ 54,613 $ 26,746 $ 34,207 $ 26,313 Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Location of Gain (Loss) Reclassified from Accumulated Other Three Months Ended Comprehensive Income into Income 2022 2021 Revenues $ (628) $ (15,188) Cost of goods sold 3,294 16,999 Net gain (loss) recognized in income (loss) before income taxes $ 2,666 $ 1,811 Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives Gain (Loss) Recognized in Other Comprehensive Income on Three Months Ended Derivatives 2022 2021 Commodity contracts $ 7,307 $ (6,376) A portion ofthe company’sderivativeinstrumentsare considered economic hedges and as such are notdesignatedashedging instruments. The companyuses exchange-traded futures and options Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Location of Gain (Loss) Recognized in Income Three Months Ended Hedging Instruments on Derivatives 2022 2021 Commodity contracts Revenues $ (5,358) $ (40,794) Commodity contracts Costs of goods sold (48,402) 8,563 Net gain (loss) recognized in income (loss) before income taxes $ (53,760) $ (32,231) March 31, 2022 December 31, 2021 Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets Inventories $ 70,460 $ 21,326 $ 72,320 $ 6,291 Effect of Cash Flow and Fair Value Hedge Accounting on the Statements of Operations Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended March 31, 2022 2021 Revenue Cost of Revenue Cost of Gain (loss) on cash flow hedging relationships: Commodity contracts: Amount of gain (loss) reclassified from accumulated other comprehensive income into income $ (628) $ 3,294 $ (15,188) $ 16,999 Gain (loss) on fair value hedging relationships: Commodity contracts: Hedged item - 18,386 - 7,967 Derivatives designated as hedging instruments - (17,244) - (7,108) Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded $ (628) $ 4,436 $ (15,188) $ 17,858 The notional volume of open commodity derivative positions as of Exchange Traded (1) Non-Exchange Traded (2) Derivative Net Long & Long (Short) Unit of Commodity Futures (19,985) Bushels Corn Futures (8,205) (3) Bushels Corn Futures (2,142) Gallons Ethanol Futures 5,398 MmBTU Natural Gas Futures (960) (3) MmBTU Natural Gas Options 32,007 Pounds Soybean Oil Options 5,102 Bushels Corn Options 487 MmBTU Natural Gas Forwards 55,634 (123) Bushels Corn Forwards - (274,797) Gallons Ethanol Forwards 173 (381) Tons Distillers Grains Forwards - (110,529) Pounds Corn Oil Forwards 18,501 (482) MmBTU Natural Gas March 31, 2022 December 31, 2021 Corporate: 2.25% convertible notes due 2027 (1) $ 230,000 $ 230,000 4.00% convertible notes due 2024 (2) 64,000 64,000 4.125% convertible notes due 2022 (3) 34,316 34,316 Green Plains SPE LLC: $125.0 million junior secured mezzanine notes due 2026 (4) 125,000 125,000 Green Plains Wood River and Green Plains Shenandoah: $75.0 million delayed draw loan agreement (5) 75,000 30,000 Green Plains Partners: $60.0 million term loan (6) (7) 58,969 60,000 Other 15,363 15,531 Total book value of long-term debt 602,648 558,847 Unamortized debt issuance costs (9,010) (9,556) Less: current maturities of long-term debt (35,701) (35,285) Total long-term debt $ 557,937 $ 514,006 The components of short-term notes payable and other borrowings are as follows (in thousands): March 31, 2022 December 31, 2021 Green Plains Finance Company, Green Plains Grain and Green Plains Trade: $350.0 million revolver $ 305,000 $ - Green Plains Commodity Management: $40.0 million hedge line 5,190 16,210 Green Plains Trade: $300.0 million revolver - 137,208 Green Plains Grain: $100.0 million revolver - 20,000 $ 310,190 $ 173,418 During May 2021, the company entered into a privately negotiated agreement with certain noteholders of the company’s 4.00% notes. Under this agreement, 3,568,705 shares of the company’s common stock were exchanged for $51.0 million in aggregate principal amount of the 4.00% notes. Common stock held as treasury shares were exchanged for the 4.00% notes. Pursuant to the guidance within ASC 470, Debt, the company recorded a loss of $9.5 million which was recorded as a charge to interest expense in the consolidated financial statements during the three months ended June 30, 2021, of which $1.2 million related to unamortized debt issuance costs. not be greater than 0.60 to 1.00. affiliates to repurchase outstanding notes. On the same day, the partnership purchased $1.0 million of the outstanding notes from accounts and funds managed by BlackRock and subsequently retired the notes. Non-Vested Weighted- Weighted-Average Non-Vested at December 31, 2021 793,337 $ 14.64 Granted 257,002 29.91 Forfeited (5,954) 20.12 Vested (240,223) 13.65 Non-Vested at March 31, 2022 804,162 $ 19.77 2.5 Performance Shares Performance Weighted- Weighted-Average Non-Vested at December 31, 2021 486,155 $ 13.93 Granted 146,589 29.47 Vested (149,933) 15.31 Non-Vested at March 31, 2022 482,811 $ 18.22 2.5 expenses. The basic and diluted EPS are calculated as follows (in thousands): Three Months Ended 2022 2021 EPS - basic and diluted: Net loss attributable to Green Plains $ (61,474) $ (6,545) Weighted average shares outstanding - basic and diluted 52,887 37,695 EPS - basic and diluted: $ (1.16) $ (0.17) Anti-dilutive weighted-average convertible debt, warrants and stock-based compensation (1) 13,823 13,714 Components of stockholders’ equity for the three and six months ended Total Additional Retained Accum. Other Green Plains Non- Total Common Stock Paid-in Earnings Comp. Income Treasury Stock Stockholders' Controlling Stockholders' Shares Amount Capital (Deficit) (Loss) Shares Amount Equity Interests Equity Balance, December 31, 2021 61,840 $ 62 $ 1,069,573 $ (15,199) $ (12,310) 8,244 $ (91,626) $ 950,500 $ 151,519 $ 1,102,019 Net income (loss) - - - (61,474) - - - (61,474) 5,602 (55,872) Distributions declared - - - - - - - - (5,122) (5,122) Other comprehensive income (loss) before reclassification - - - - 5,386 - - 5,386 - 5,386 Amounts reclassified from accumulated other comprehensive income (loss) - - - - (1,965) - - (1,965) - (1,965) Other comprehensive income (loss), net of tax - - - - 3,421 - - 3,421 - 3,421 Investment in subsidiary - - - - - - - - 24 24 Stock-based compensation 226 - (1,922) - - - - (1,922) 59 (1,863) Balance, March 31, 2022 62,066 $ 62 $ 1,067,651 $ (76,673) $ (8,889) 8,244 $ (91,626) $ 890,525 $ 152,082 $ 1,042,607 Total Additional Retained Accum. Other Green Plains Non- Total Common Stock Paid-in Earnings Comp. Income Treasury Stock Stockholders' Controlling Stockholders' Shares Amount Capital (Deficit) (Loss) Shares Amount Equity Interests Equity Balance, December 31, 2020 47,471 $ 47 $ 691,393 $ 50,793 $ (2,172) 11,813 $ (131,287) $ 608,774 $ 129,812 $ 738,586 Net income (loss) - - - (6,545) - - - (6,545) 4,566 (1,979) Distributions declared - - - - - - - - (1,395) (1,395) Other comprehensive income (loss) before reclassification - - - - (4,849) - - (4,849) - (4,849) Amounts reclassified from accumulated other comprehensive income (loss) - - - - (1,377) - - (1,377) - (1,377) Other comprehensive income (loss), net of tax - - - - (6,226) - - (6,226) - (6,226) Investment in subsidiaries - - - - - - - - 3,330 3,330 Issuance of warrants - - 3,431 - - - - 3,431 (3,431) - Issuance of common stock for cash at $23.00 per share, net of fees 8,752 9 191,125 - - - - 191,134 - 191,134 Stock-based compensation 230 - (3,000) - - - - (3,000) 79 (2,921) Balance, March 31, 2021 56,453 $ 56 $ 882,949 $ 44,248 $ (8,398) 11,813 $ (131,287) $ 787,568 $ 132,961 $ 920,529 Amounts reclassified from accumulated other comprehensive income are as follows (in thousands): Three Months Ended Statements of 2022 2021 Classification Gains (losses) on cash flow hedges: Commodity derivatives $ (628) $ (15,188) (1) Commodity derivatives 3,294 16,999 (2) Total gains on cash flow hedges 2,666 1,811 (3) Income tax expense (701) (434) (4) Amounts reclassified from accumulated other comprehensive income (loss) $ 1,965 $ 1,377 12. INCOME TAXES assets related to gains (losses) on derivatives included in accumulated other comprehensive income. Three Months Ended 2022 2021 Lease expense Operating lease expense $ 4,998 $ 4,934 Variable lease expense (1) 179 69 Total lease expense $ 5,177 $ 5,003 (1)Represents amounts incurred in excess of the minimum payments required for a certain building lease and for the handling and unloading of railcars for a certain land lease, offset by railcar lease abatements provided by the lessor when railcars are out of service during periods of maintenance or upgrade. Three Months Ended 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,845 $ 4,832 Right-of-use assets obtained in exchange for lease obligations: Operating leases 4,709 6,464 Right-of-use assets and lease obligations derecognized due to lease modifications: Operating leases - 51 Supplemental balance sheet information related to operating leases is as follows: March 31, 2022 December 31, 2021 Weighted average remaining lease term 5.5 years 5.5 years Weighted average discount rate 4.11% 4.16% Year Ending December 31, Amount 2022 $ 14,455 2023 17,315 2024 14,774 2025 10,405 2026 4,844 Thereafter 14,353 Total 76,146 Less: Present value discount (9,054) Lease liabilities $ 67,092 We formed Green Plains Partners LP, a master limited partnership, to be our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce. The partnership completed its initial public offering on July 1, 2015. As of commodities. common stock. All $64.0 million were retired effective July 8, 2022. The Inflation Reduction Act of 2022, which was introduced on July 27, 2022, is a broad budget reconciliation bill that has many potential impacts on our business which we are still evaluating. As proposed, the legislation would (a) create a new Clean Fuel Production Credit which could impact our fuel ethanol, depending on the level of GHG reduction for each gallon; (b) create a new tax credit for sustainable aviation fuel, that could possibly involve some of our low carbon ethanol through an alcohol to jet pathway, depending on the life cycle analysis model being used; (c) expand the carbon capture and sequestration credit, section 45Q, to $85 for each ton of carbon sequestered, which could impact our carbon partnership; (d) extend the biodiesel tax credit which could impact our renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production; (e) fund biofuel refueling infrastructure, which could impact the availability of higher level ethanol blended fuel; and (f) provide for the production and purchase credits for electric vehicles could impact the amount of internal combustion engines on the road longer term, and by extension impact the demand for liquid fuels including ethanol. 2022, with an additional 250 million gallons of supplemental volume to reflect a court-ordered remand of a previously-lowered RVO. June 14, 2023, in compliance with a consent decree from the U.S. District Court for D.C. to those impacted by the pandemic. The language of the bill specifically Three Months Ended % 2022 2021 Variance Revenues: Ethanol production: Revenues from external customers $ 637,553 $ 423,722 50.5% Intersegment revenues - - * Total segment revenues 637,553 423,722 50.5 Agribusiness and energy services: Revenues from external customers 142,877 128,821 10.9 Intersegment revenues 5,835 5,123 13.9 Total segment revenues 148,712 133,944 11.0 Partnership: Revenues from external customers 1,005 1,097 (8.4) Intersegment revenues 18,095 19,309 (6.3) Total segment revenues 19,100 20,406 (6.4) Revenues including intersegment activity 805,365 578,072 39.3 Intersegment eliminations (23,930) (24,432) (2.1) Revenues as reported $ 781,435 $ 553,640 41.1% Three Months Ended % 2022 2021 Variance Cost of goods sold: Ethanol production $ 661,560 $ 415,525 59.2% Agribusiness and energy services 134,439 116,074 15.8 Intersegment eliminations (23,490) (22,366) 5.0 $ 772,509 $ 509,233 51.7% Three Months Ended % 2022 2021 Variance Operating income (loss): Ethanol production (1) $ (51,158) $ (20,320) 151.8% Agribusiness and energy services 10,408 13,346 (22.0%) Partnership 11,809 12,871 (8.3) Intersegment eliminations (440) (2,066) (78.7) Corporate activities (2) (18,521) 27,516 * $ (47,902) $ 31,347 *% (1) Three Months Ended % 2022 2021 Variance Depreciation and amortization: Ethanol production $ 18,432 $ 18,528 (0.5%) Agribusiness and energy services 464 607 (23.6) Partnership 898 887 1.2 Corporate activities 605 659 (8.2) $ 20,399 $ 20,681 (1.4%) The following table reconciles net Three Months Ended 2022 2021 Net loss $ (55,872) $ (1,979) Interest expense (1) 8,806 31,679 Income tax expense (benefit) (1,153) 1,862 Depreciation and amortization (2) 20,399 20,681 EBITDA (27,820) 52,243 Gain on sale of assets, net - (36,893) Proportional share of EBITDA adjustments to equity method investees 45 44 Adjusted EBITDA $ (27,775) $ 15,394 (1)Interest expense for the three and six months ended Other income for the three and six months ended June 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million. Three Months Ended % 2022 2021 Variance Adjusted EBITDA: Ethanol production (1) $ (32,726) $ (1,789) *% Agribusiness and energy services 10,723 13,951 (23.1) Partnership 12,882 13,933 (7.5) Intersegment eliminations (919) (2,066) (55.5) Corporate activities (2) (17,780) 28,214 * EBITDA (27,820) 52,243 * Gain on sale of assets, net - (36,893) * Proportional share of EBITDA adjustments to equity method investees 45 44 2.3 Adjusted EBITDA $ (27,775) $ 15,394 *% (1) Other income for the three and six months ended June 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million. Ethanol Production Segment Three Months Ended March 31, 2022 2021 % Variance Ethanol sold (thousands of gallons) 196,348 178,000 10.3% Distillers grains sold (thousands of equivalent dried tons) 516 465 11.0 Corn oil sold (thousands of pounds) 59,295 46,563 27.3 Corn consumed (thousands of bushels) 68,304 62,505 9.3% increased intersegment marketing and service fees within the agribusiness and energy services segment as a result of higher production volumes. Income Taxes June 30, 2021. For each calendar quarter commencing with the quarter ended September 30, 2015, the partnership agreement requires the partnership to distribute all available cash, as defined, to its partners, including us, within 45 days after the end of each calendar quarter. Available cash generally means all cash and cash equivalents on hand at the end of that quarter less cash reserves established by the general partner, including those for future capital expenditures, future acquisitions and anticipated future debt service requirements, plus all or any portion of the cash on hand resulting from working capital borrowings made subsequent to the end of that quarter. our common stock. The conversion rate will be subject to adjustment upon the occurrence of certain events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and warrants; spinoffs; the event of a cash dividend or distribution; or a tender or exchange offering. In addition, we may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including our calling the 4.00% notes for redemption. We may settle the 4.00% notes in cash, common stock or a combination of cash and common stock. term loan matures July 20, 2026. The amended term loan does not require any principal payments; however, the partnership has the option to prepay $1.5 million per quarter beginning twelve months after the closing date. and winter and hurricanes in the spring, summer and fall. Other factors include North American energy exploration and production, and the amount of natural gas in underground storage during injection and withdrawal seasons. Commodity Estimated Total Volume Unit of Net Income Effect of Ethanol 958,000 Gallons $ 173,309 Corn 330,000 Bushels $ 172,603 Distillers grains 2,500 Tons (2) $ 44,703 Corn oil 290,000 Pounds $ 8,717 Natural gas 27,700 MmBTU $ 5,083 we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. PART II – OTHER INFORMATION Ethanol. Our revenues are dependent on market prices for ethanol which can be volatile as a result of a number of factors, including but not limited to: the price and availability of competing fuels; the overall supply and demand for ethanol and corn; the price of gasoline, crude oil and corn; global political or economic issues, including but not limited to November 16, 2022, and finalize by June 14, 2023, in compliance with a consent decree from the U.S. District Court for D.C. favorable or harmful to conventional ethanol, depending on how the regulations are crafted, enforced and modified. Future demand may be influenced by economic incentives to blend based on the relative value of gasoline versus ethanol, taking into consideration the octane value of ethanol, environmental requirements and the value of RFS credits or RINs. A significant increase in supply beyond the RFS mandate could have an adverse impact on ethanol prices. Moreover, any changes to RFS, whether by legislation, EPA action or lawsuit, originating from issues associated with the market price of RINs could negatively impact the demand for ethanol, discretionary blending of ethanol and/or the price of ethanol. Recent actions by the EPA to grant SREs without accounting for the lost gallons, for example, resulted in lower RIN prices. Similarly, proposals from the current EPA to reduce annual RVO levels could also lead to lower RIN prices. Period Total Number of Average Price January 1 - January 31 - $ - February 1 - February 28 81,501 26.93 March 1 - March 31 1,737 30.48 Total 83,238 $ 27.00 Exhibit No. Description of Exhibit 3.1 10.2 31.1 31.2 32.1 32.2 101 104 SIGNATURES GREEN PLAINS INC. By:Trading Symbol Name of each exchange on which registered GPRE The Nasdaq Stock Market LLC x☒ Yes o☐ Nox☒ Yes o☐ NoxAccelerated filer o☐ Non-accelerated filer o☐ oEmerging growth company o☐ o☐o☐ Yes x☒ No53,821,74558,092,288 common stock outstanding as of AprilJuly 28, 2022.1TABLE OF CONTENTS
Accumulated Other Comprehensive Income ASC
2022
2021June 30,
2022December 31,
2021(unaudited) ASSETS Current assets Cash and cash equivalents $ 508,151 $ 426,220 Restricted cash 71,128 134,739 Marketable securities 24,966 124,859 Accounts receivable, net of allowances of $204 and $682, respectively Accounts receivable, net of allowances of $204 and $682, respectively 158,363 119,961 Income taxes receivable 1,067 911 Inventories 315,040 267,838 Prepaid expenses and other 20,634 16,483 Derivative financial instruments 60,347 26,738 Total current assets 1,159,696 1,117,749
and amortization of $584,957 and $567,027, respectivelyProperty and equipment, net of accumulated depreciation and amortization of $602,752 and $567,027, respectively Property and equipment, net of accumulated depreciation and amortization of $602,752 and $567,027, respectively 980,917 893,517 Operating lease right-of-use assets 66,681 64,042 Other assets 88,714 84,447 Total assets $ 2,296,008 $ 2,159,755 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 127,163 $ 146,063 Accrued and other liabilities 45,115 56,980 Derivative financial instruments 49,959 43,244 Operating lease current liabilities 17,768 16,814 Short-term notes payable and other borrowings 308,405 173,418 Current maturities of long-term debt 99,164 35,285 Total current liabilities 647,574 471,804 Long-term debt 495,027 514,006 Operating lease long-term liabilities 51,996 49,795 Other liabilities 19,682 22,131 Total liabilities 1,214,279 1,057,736 Commitments and contingencies (Note 13) 0 0 Stockholders' equity
62,066,201 and 61,840,434 shares issued, and 53,821,745
and 53,595,978 shares outstanding, respectivelyCommon stock, $0.001 par value; 150,000,000 shares authorized; 62,086,595 and 61,840,434 shares issued, and 53,842,139 and 53,595,978 shares outstanding, respectively Common stock, $0.001 par value; 150,000,000 shares authorized; 62,086,595 and 61,840,434 shares issued, and 53,842,139 and 53,595,978 shares outstanding, respectively 62 62 Additional paid-in capital 1,069,921 1,069,573 Retained deficit (30,275) (15,199) Accumulated other comprehensive loss (16,909) (12,310) Treasury stock, 8,244,456 shares (91,626) (91,626) Total Green Plains stockholders' equity 931,173 950,500 Noncontrolling interests 150,556 151,519 Total stockholders' equity 1,081,729 1,102,019 Total liabilities and stockholders' equity $ 2,296,008 $ 2,159,755
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Revenues Product revenues $ 1,009,935 $ 721,786 $ 1,786,625 $ 1,273,766 Service revenues 2,459 2,632 7,204 4,292 Total revenues 1,012,394 724,418 1,793,829 1,278,058 Costs and expenses Cost of goods sold (excluding depreciation and amortization expenses reflected below) 921,314 639,408 1,693,823 1,148,641 Operations and maintenance expenses 6,159 6,237 11,725 11,991 Selling, general and administrative expenses 30,113 23,383 60,976 46,901 Loss (gain) on sale of assets, net Loss (gain) on sale of assets, net — 3,825 — (33,068) Depreciation and amortization expenses 20,967 20,532 41,366 41,213 Total costs and expenses 978,553 693,385 1,807,890 1,215,678 Operating income (loss) 33,841 31,033 (14,061) 62,380 Other income (expense) Interest income 806 441 877 471 Interest expense (7,800) (19,058) (16,606) (50,737) Other, net 28,165 (1,250) 28,576 (1,240) Total other income (expense) Total other income (expense) 21,171 (19,867) 12,847 (51,506) Income (loss) before income taxes and income (loss) from equity method investees Income (loss) before income taxes and income (loss) from equity method investees 55,012 11,166 (1,214) 10,874 Income tax benefit (expense) (2,895) 4,783 (1,742) 2,921 Income (loss) from equity method investees 603 168 (196) 343 Net income (loss) Net income (loss) 52,720 16,117 (3,152) 14,138 Net income attributable to noncontrolling interests 6,322 6,374 11,924 10,940 Net income (loss) attributable to Green Plains Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ (15,076) $ 3,198 Earnings per share: Net income (loss) attributable to Green Plains - basic Net income (loss) attributable to Green Plains - basic $ 0.87 $ 0.21 $ (0.28) $ 0.08 Net income (loss) attributable to Green Plains - diluted Net income (loss) attributable to Green Plains - diluted $ 0.73 $ 0.20 $ (0.28) $ 0.07 Weighted average shares outstanding: Basic Basic 53,033 45,425 52,960 41,581 Diluted Diluted 66,895 58,171 52,960 42,675
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Net income (loss) $ 52,720 $ 16,117 $ (3,152) $ 14,138 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of $3,579, ($1,616), $1,658 and ($89), respectively (10,535) 5,131 (5,149) 282 Reclassification of realized losses on derivatives, net of tax benefit of ($878), ($1,246), ($177) and ($812), respectively 2,515 3,961 550 2,584 Total other comprehensive income (loss), net of tax (8,020) 9,092 (4,599) 2,866 Comprehensive income (loss) 44,700 25,209 (7,751) 17,004 Comprehensive income attributable to noncontrolling interests 6,322 6,374 11,924 10,940 Comprehensive income (loss) attributable to Green Plains $ 38,378 $ 18,835 $ (19,675) $ 6,064
March 31,Six Months Ended
June 30,2022 2021 Cash flows from operating activities: Net income (loss) Net income (loss) $ (3,152) $ 14,138 Adjustments to reconcile net income (loss) to net cash used in operating activities: Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 41,366 41,213 Amortization of debt issuance costs and debt discount 2,450 4,879 Gain on sale of assets, net — (31,757) Loss on extinguishment of debt — 31,636 Deferred income taxes 1,482 (2,900) Stock-based compensation 4,257 1,967 Loss (income) from equity method investees 196 (343) Other 1,128 (217) Changes in operating assets and liabilities before effects of business combinations and dispositions: Accounts receivable (41,162) (22,022) Inventories (47,202) (15,910) Derivative financial instruments (33,020) (14,331) Prepaid expenses and other assets (4,151) (545) Accounts payable and accrued liabilities (25,463) (39,183) Current income taxes (45) (428) Other (3,325) 3,591 Net cash used in operating activities (106,641) (30,212) Cash flows from investing activities: Purchases of property and equipment, net (128,283) (59,899) Proceeds from the sale of assets — 73,846 Proceeds from the sale of marketable securities 99,917 — Other investing activities Other investing activities (6,976) (4,000) Net cash provided by (used in) investing activities Net cash provided by (used in) investing activities (35,342) 9,947 Cash flows from financing activities: Proceeds from the issuance of long-term debt 45,000 355,000 Payments of principal on long-term debt (1,204) (135,858) Proceeds from short-term borrowings 1,406,520 1,682,698 Payments on short-term borrowings (1,271,026) (1,698,731) Payments on extinguishment of convertible debt — (20,861) Payments of cash distributions (11,251) (2,790) Proceeds from issuance of common stock, net — 191,134 Payments of loan fees (2,522) (8,614) Payments related to tax withholdings for stock-based compensation (3,790) (4,480) Other financing activities (1,424) 3,330 Net cash provided by financing activities 160,303 360,828 Net change in cash, cash equivalents and restricted cash 18,320 340,563 Cash, cash equivalents and restricted cash, beginning of period 560,959 274,810 Cash, cash equivalents and restricted cash, end of period $ 579,279 $ 615,373
March 31,Six Months Ended
June 30,2022 2021 Reconciliation of total cash, cash equivalents and restricted cash: Cash and cash equivalents $ 508,151 $ 496,932 Restricted cash 71,128 118,441 Total cash, cash equivalents and restricted cash $ 579,279 $ 615,373 Non-cash financing activities: Non-cash financing activities: Exchange of 4.00% convertible notes due 2024 Exchange of 4.00% convertible notes due 2024 $ — $ 51,000 Exchange of common stock held in treasury stock for 4.00% convertible notes due 2024 Exchange of common stock held in treasury stock for 4.00% convertible notes due 2024 $ — $ 39,661 Supplemental investing activities: Assets disposed of in sale $ — $ 40,361 Less: liabilities relinquished — (156) Net assets disposed $ — $ 40,205 Supplemental disclosures of cash flow: Cash paid for income taxes, net Cash paid for income taxes, net $ 305 $ 576 Cash paid for interest Cash paid for interest $ 14,803 $ 16,675 Capital expenditures in accounts payable $ 6,707 $ 19,110 Cash premium paid for extinguishment of convertible notes $ — $ 20,861
March 31,June 30, 2022, the company owns a 48.9% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. Public investors own the remaining 49.1% limited partner interest in the partnership. The company determined that the limited partners in the partnership with equity at risk lack the power, through voting rights or similar rights, to direct the activities that most significantly impact the partnership’s economic performance; therefore, the partnership is considered a variable interest entity. The company, through its ownership of the general partner interest in the partnership, has the power to direct the activities that most significantly affect economic performance and is obligated to absorb losses and has the right to receive benefits that could be significant to the partnership. Therefore, the company is considered the primary beneficiary and consolidates the partnership in the company’s financial statements. The assets of the partnership cannot be used by the company for general corporate purposes. The partnership’s consolidated total assets as of March 31,June 30, 2022 and December 31, 2021, excluding intercompany balances, are $98.7$100.1 million and $100.3 million, respectively, and primarily consist of property and equipment, operating lease right-of-use assets and goodwill. The partnership’s consolidated total liabilities as of March 31,June 30, 2022 and December 31, 2021, excluding intercompany balances, are $112.5$113.4 million and $111.4 million, respectively, which primarily consist of long-term debt as discussed in Note 8 – Debt and operating lease liabilities. The liabilities recognized as a result of consolidating the partnership do not represent additional claims on the company’s general assets.
Ultra-High Protein, corn oil, natural gas and other commodities by the company’s marketing business are recognized when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the transfer of control of products or services. Revenues related to marketing for third parties are presented on a gross basis as the company controls the product prior to the sale to the end customer, takes title of the product and has inventory risk. Unearned revenue is recorded for goods in transit when the company has received payment but control has not yet been transferred to the customer. Revenues for receiving, storing, transferring and transporting ethanol and other fuels are recognized when the product is delivered to the customer.
Three Months Ended June 30, 2022 Ethanol Production Agribusiness & Energy
ServicesPartnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ — $ — $ — $ — $ — Distillers grains 9,401 — — — 9,401 Corn oil — — — — — Service revenues 1,547 — 912 — 2,459 Other 5,729 1,661 — — 7,390 Intersegment revenues — 234 2,053 (2,287) — Total revenues from contracts with customers 16,677 1,895 2,965 (2,287) 19,250 Ethanol 644,641 138,032 — — 782,673 Distillers grains 143,435 8,173 — — 151,608 Corn oil 51,956 1,551 — — 53,507 Other 4,457 899 — — 5,356 Intersegment revenues — 7,009 — (7,009) — Total revenues from contracts accounted for as derivatives 844,489 155,664 — (7,009) 993,144 — — 16,689 (16,689) — Total Revenues $ 861,166 $ 157,559 $ 19,654 $ (25,985) $ 1,012,394 Six Months Ended June 30, 2022 Ethanol Production Agribusiness & Energy
ServicesPartnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ — $ — $ — $ — $ — Distillers grains 16,763 — — — 16,763 Corn oil — — — — — Service revenues 5,287 — 1,917 — 7,204 Other 15,350 2,949 — — 18,299 Intersegment revenues — 234 3,938 (4,172) — Total revenues from contracts with customers 37,400 3,183 5,855 (4,172) 42,266 Ethanol 1,116,563 233,692 — — 1,350,255 Distillers grains 241,947 23,299 — — 265,246 Corn oil 92,845 3,957 — — 96,802 Other 9,964 29,296 — — 39,260 Intersegment revenues — 12,844 — (12,844) — Total revenues from contracts accounted for as derivatives 1,461,319 303,088 — (12,844) 1,751,563 — — 32,899 (32,899) — Total Revenues $ 1,498,719 $ 306,271 $ 38,754 $ (49,915) $ 1,793,829 Three Months Ended June 30, 2021 Ethanol Production Agribusiness & Energy
ServicesPartnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ — $ — $ — $ — $ — Distillers grains 4,425 — — — 4,425 Corn oil — — — — — Service revenues 1,462 — 1,159 — 2,621 Other 12,367 2,217 — — 14,584 Intersegment revenues — — 2,172 (2,172) — Total revenues from contracts with customers 18,254 2,217 3,331 (2,172) 21,630 Ethanol 413,592 138,931 — — 552,523 Distillers grains 95,465 9,015 — — 104,480 Corn oil 25,349 7,775 — — 33,124 Grain — 10,798 — — 10,798 Other 2,613 (761) — — 1,852 Intersegment revenues — 5,512 — (5,512) — Total revenues from contracts accounted for as derivatives 537,019 171,270 — (5,512) 702,777 — — 16,370 (16,359) 11 Total Revenues $ 555,273 $ 173,487 $ 19,701 $ (24,043) $ 724,418 Six Months Ended June 30, 2021 Ethanol Production Agribusiness & Energy
ServicesPartnership Eliminations Total Revenues: Revenues from contracts with customers under ASC 606: Ethanol $ — $ — $ — $ — $ — Distillers grains 8,038 — — — 8,038 Corn oil — — — — — Service revenues 2,025 — 2,216 — 4,241 Other 16,429 3,043 — — 19,472 Intersegment revenues — — 4,178 (4,178) — Total revenues from contracts with customers 26,492 3,043 6,394 (4,178) 31,751 Ethanol 703,177 214,843 — — 918,020 Distillers grains 191,159 18,254 — — 209,413 Corn oil 39,889 12,586 — — 52,475 Grain — 22,968 — — 22,968 Other 18,278 25,102 — — 43,380 Intersegment revenues — 10,635 — (10,635) — Total revenues from contracts accounted for as derivatives 952,503 304,388 — (10,635) 1,246,256 — — 33,713 (33,662) 51 Total Revenues $ 978,995 $ 307,431 $ 40,107 $ (48,475) $ 1,278,058 606, where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC 606 as required by ASC 610-20, 606.Gains and Losses from Derecognition of Nonfinancial Assets.ForMarch 31,June 30, 2022, 0respectively, and revenues from Customer B represented 12% and 10% of total revenues for the three and six months ended June 30, 2022, respectively, recorded within the ethanol production segment. No single customer’s revenue was over 10% of total revenues. Revenues from Customer A represented approximately 13% of total revenues for the three and six months ended March 31,June 30, 2021.DISPOSITIONS$36.9$35.9 million within corporate activities during the threesix months ended March 31,June 30, 2021.
Fair Value Measurements at June 30, 2022 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)Significant Other
Observable Inputs
(Level 2)Total Assets: Cash and cash equivalents $ 508,151 $ — $ 508,151 Restricted cash 71,128 — 71,128 Inventories carried at market — 58,185 58,185 Derivative financial instruments - assets — 40,474 40,474 Other assets 110 54 164 Total assets measured at fair value $ 579,389 $ 98,713 $ 678,102 Liabilities: $ — $ 8,356 $ 8,356 — 3,021 3,021 Derivative financial instruments - liabilities — 49,959 49,959 — 6,553 6,553 Total liabilities measured at fair value $ — $ 67,889 $ 67,889
Active Markets for
Identical Assets
Observable Inputs Fair Value Measurements at December 31, 2021 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)Significant Other
Observable Inputs
(Level 2)Total Assets: Cash and cash equivalents $ 426,220 $ — $ 426,220 Restricted cash 134,739 — 134,739 Inventories carried at market — 72,320 72,320 Derivative financial instruments - assets Derivative financial instruments - assets — 26,738 26,738 Other assets 111 8 119 Total assets measured at fair value $ 561,070 $ 99,066 $ 660,136 Liabilities: $ — $ 12,617 $ 12,617 — 3,260 3,260 Derivative financial instruments - liabilities Derivative financial instruments - liabilities — 26,117 26,117 — 7,788 7,788 Total liabilities measured at fair value $ — $ 49,782 $ 49,782
Active Markets for
Identical Assets
Observable Inputs$5.5$8.4 million and $12.6 million at March 31,June 30, 2022 and December 31, 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the company has elected the fair value option.both March 31,June 30, 2022 and December 31, 2021, respectively, accrued and other liabilities includes $3.3$3.0 million and $3.3 million and other liabilities includes $7.8$6.5 million and $7.6 million of consideration related to potential earn-out payments recorded at fair value.March 31,June 30, 2022, the fair value of the company’s debt was approximately $1,023.5$984.4 million compared with a book value of $903.8$902.6 million. At December 31, 2021, the fair value of the company’s debt was approximately $891.1 million compared with a book value of $722.7 million. The company estimated the fair value of its outstanding debt using Level 2 inputs. The company believes the fair values of its marketable securities approximated book value, which was $24.9$25.0 million and $124.9$124.9 million at March 31,June 30, 2022 and December 31, 2021, respectively. The company believes the fair values of its accounts receivable approximated book value, which was $142.0$158.4 million and $120.0$120.0 million at March 31,June 30, 2022 and December 31, 2021, respectively.
three3 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, and (3) partnership, which includes fuel storage and transportation services., general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment.
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Revenues: Ethanol production: Revenues from external customers $ 861,166 $ 555,273 $ 1,498,719 $ 978,995 Intersegment revenues — — — — Total segment revenues 861,166 555,273 1,498,719 978,995 Agribusiness and energy services: Revenues from external customers 150,316 167,975 293,193 296,796 Intersegment revenues 7,243 5,512 13,078 10,635 Total segment revenues 157,559 173,487 306,271 307,431 Partnership: Revenues from external customers 912 1,170 1,917 2,267 Intersegment revenues 18,742 18,531 36,837 37,840 Total segment revenues 19,654 19,701 38,754 40,107 Revenues including intersegment activity 1,038,379 748,461 1,843,744 1,326,533 Intersegment eliminations (25,985) (24,043) (49,915) (48,475) $ 1,012,394 $ 724,418 $ 1,793,829 $ 1,278,058
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Cost of goods sold: Ethanol production $ 804,821 $ 493,656 $ 1,466,381 $ 909,181 Agribusiness and energy services 143,656 170,181 278,095 286,255 Intersegment eliminations (27,163) (24,429) (50,653) (46,795) $ 921,314 $ 639,408 $ 1,693,823 $ 1,148,641 Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Gross margin: Ethanol production $ 56,345 $ 61,617 $ 32,338 $ 69,814 Agribusiness and energy services 13,903 3,306 28,176 21,176 Partnership 19,654 19,701 38,754 40,107 Intersegment eliminations 1,178 386 738 (1,680) $ 91,080 $ 85,010 $ 100,006 $ 129,417 Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Operating income (loss): Ethanol production $ 27,506 $ 33,543 $ (23,652) $ 13,223 Agribusiness and energy services 10,281 (851) 20,689 12,495 Partnership 12,104 11,916 23,913 24,787 Intersegment eliminations 1,178 386 738 (1,680) (17,228) (13,961) (35,749) 13,555 $ 33,841 $ 31,033 $ (14,061) $ 62,380
March 31,Operating loss for ethanol production includes an inventory lower of cost or net realizable value adjustment charge of $13.2 million for the three months ended March 31, 2022.(2)Corporate activities for the three and six months ended March 31,June 30, 2021 include a $36.9$3.8 million loss on sale of assets and a $33.1 million gain on sale of assets.assets, respectively.
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Depreciation and amortization: Ethanol production $ 19,114 $ 18,483 $ 37,546 $ 37,011 Agribusiness and energy services 470 595 934 1,202 Partnership 823 795 1,721 1,682 Corporate activities 560 659 1,165 1,318 $ 20,967 $ 20,532 $ 41,366 $ 41,213 June 30, 2022 December 31, 2021 Ethanol production $ 1,121,570 $ 1,101,151 Agribusiness and energy services 593,413 487,164 Partnership 100,106 100,349 Corporate assets 488,944 524,206 Intersegment eliminations (8,025) (53,115) $ 2,296,008 $ 2,159,755 balancesbalances.. As of March 31, 2022, the company recorded a $13.2 million lower of cost or net realized value inventory adjustment reflected in cost of goods sold within the ethanol production segment. There was 0no lower of cost or market inventory adjustment as of June 30, 2022 and December 31, 2021.
June 30, 2022 December 31, 2021 Finished goods $ 138,806 $ 91,448 Commodities held for sale 23,715 72,320 Raw materials 90,068 50,604 Work-in-process 25,177 19,783 Supplies and parts 37,274 33,683 $ 315,040 $ 267,838 March 31,June 30, 2022, the company’s consolidated balance sheet reflected unrealized losses of $8.9$16.9 million, net of tax, in accumulated other comprehensive loss. The company expects these items will be reclassified as operating income (loss) over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating income (loss) will differ as commodity prices change.Asset Derivatives'
Fair ValueLiability Derivatives'
Fair ValueJune 30,
2022December 31,
2021June 30,
2022December 31,
2021
2022
2021
2022
2021Derivative financial instruments - forwards Derivative financial instruments - forwards $ 40,474 (1) $ 26,738 $ 49,959 $ 26,117 (2) Other assets 54 8 — — Other liabilities — — 71 196 Total $ 40,528 $ 26,746 $ 50,030 $ 26,313 March 31,June 30, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $1.9$19.9 million, which included $0.9$11.6 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.(2)At March 31, 2022, instruments, $14.8 million of unrealized gains on derivative financial instruments designated as reflected onfair value hedging instruments, and the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $30.4 million.representing economic hedges.(3)(2)At December 31, 2021, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $17.1 million, which include $1.3 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.instruments, $0.5 million of unrealized losses on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Location of Gain (Loss) Reclassified from Accumulated Other
Comprehensive Income into IncomeThree Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Revenues $ (1,111) $ (23,692) $ (1,739) $ (38,880) Cost of goods sold (2,282) 18,485 1,012 35,484 Net loss recognized in income (loss) before income taxes $ (3,393) $ (5,207) $ (727) $ (3,396) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives Gain (Loss) Recognized in Other Comprehensive Income on
DerivativesThree Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Commodity contracts $ (14,114) $ 6,747 $ (6,807) $ 371
March 31,
March 31,contractscontracts to manage its net position of product inventoriesand forward cash purchase and salessales contractsto reduce price risk caused bymarket fluctuations. Derivatives,includingexchangetradedcontractsandforwardcommoditypurchaseorsalecontracts,and inventoriesofcertainagriculturalproducts, whichincludeamountsacquiredunderdeferredpricingcontracts, are statedat fair value. Inventories are not considered a derivative, rather they are carried at the lower of cost or market. As such, changes in the fair value of inventories are not included in the table below.
March 31,Amount of Gain (Loss)
Recognized in Income on DerivativesDerivatives Not Designated as
Hedging InstrumentsLocation of Gain (Loss) Recognized in Income
on DerivativesThree Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Exchange traded futures and options Revenues $ 2,714 $ (14,622) $ (31) $ (56,536) Forwards Revenues 6,880 3,521 4,267 4,641 Exchange trade futures and options Costs of goods sold 27,355 (3,996) (40,208) 7,041 Forwards Costs of goods sold (37,458) 6,987 (18,297) 4,513 Net gain (loss) recognized in income (loss) before income taxes $ (509) $ (8,110) $ (54,269) $ (40,341) June 30, 2022 December 31, 2021 Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets Inventories $ 58,185 $ 3,118 $ 72,320 $ 6,291 Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended June 30, 2022 2021 Revenue Cost of
Goods SoldRevenue Cost of
Goods SoldGain (loss) on cash flow hedging relationships: Commodity contracts: Amount of gain (loss) on exchange traded futures reclassified from accumulated other comprehensive income into income $ (1,111) $ (2,282) $ (23,692) $ 18,485 Gain (loss) on fair value hedging relationships: Commodity contracts: Fair-value hedged inventories — (8,550) — 10,406 Exchange traded futures designated as hedging instruments — 12,533 — (7,244) Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded $ (1,111) $ 1,701 $ (23,692) $ 21,647 Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Six Months Ended June 30, 2022 2021
Goods Sold
Goods SoldRevenue Cost of
Goods SoldRevenue Cost of
Goods SoldGain (loss) on cash flow hedging relationships: Commodity contracts: Amount of gain (loss) on exchange traded futures reclassified from accumulated other comprehensive income into income Amount of gain (loss) on exchange traded futures reclassified from accumulated other comprehensive income into income $ (1,739) $ 1,012 $ (38,880) $ 35,484 Gain (loss) on fair value hedging relationships: Commodity contracts: Fair-value hedged inventories Fair-value hedged inventories — 9,836 — 18,373 Exchange traded futures designated as hedging instruments Exchange traded futures designated as hedging instruments — (4,711) — (14,352) Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded $ (1,739) $ 6,137 $ (38,880) $ 39,505 0no gains or losses from discontinuing cash flow or fair value hedge treatment during the three and six months ended March 31,June 30, 2022 and 2021.
March 31,June 30, 2022, are as follows (in thousands):
Instruments
(Short)
MeasureDerivative
InstrumentsDerivative
InstrumentsNet Long &
(Short)Long (Short) Unit of
MeasureCommodity Futures (40,390) Bushels Corn Futures 6,930 (3) Bushels Corn Futures (4,475) (4) Bushels Corn Futures (62,118) Gallons Ethanol Futures (23,058) (3) Gallons Ethanol Futures Futures 3,143 MmBTU Natural Gas Futures Futures 7,680 (3) MmBTU Natural Gas Futures Futures (4,555) (4) MmBTU Natural Gas Forwards 43,502 (18) Bushels Corn Forwards — (285,395) Gallons Ethanol Forwards 136 (395) Tons Distillers Grains Forwards — (83,308) Pounds Corn Oil Forwards 27,116 (87) MmBTU Natural Gas ExchangeNotional volume of exchange traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis.Non-exchangeNotional volume of non-exchange traded forwardsforward physical contracts are presented on a gross long and (short) position basis including both fixed-price and basis contracts.contracts, for which only the basis portion of the contract price is fixed.FuturesNotional volume of exchange traded futures used for cash flow hedges.$0.8$0.4 million and $0.4$1.2 million for the three and six months ended March 31,June 30, 2022, respectively, and net gains of $24 thousand and $0.5 million for the three and six months ended June 30, 2021, respectively, on energy trading contracts.June 30, 2022 December 31, 2021 Corporate: $ 230,000 $ 230,000 64,000 64,000 34,316 34,316 Green Plains SPE LLC: 125,000 125,000 Green Plains Wood River and Green Plains Shenandoah: 75,000 30,000 Green Plains Partners: 58,969 60,000 Other 15,313 15,531 Total book value of long-term debt 602,598 558,847 Unamortized debt issuance costs (8,407) (9,556) Less: current maturities of long-term debt (99,164) (35,285) Total long-term debt $ 495,027 $ 514,006 $6.2$5.9 million and $6.5 million of unamortized debt issuance costs as of March 31,June 30, 2022 and December 31, 2021, respectively.$1.1$1.0 million and $1.2 million of unamortized debt issuance costs as of March 31,June 30, 2022 and December 31, 2021, respectively. Subsequent to June 30, 2022, the 2024 notes were converted into shares of common stock of the Company.$0.1$31 thousand and 0.1 million of unamortized debt issuance costs as of both March 31,June 30, 2022 and December 31, 2021, respectively.March 31,June 30, 2022 and December 31, 2021, respectively.On September 3, 2020, Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of the company, entered into a $75.0 million delayed draw loan agreement. Includes $0.3 million of unamortized debt issuance costs as of both March 31,June 30, 2022 and December 31, 2021, respectivelyrespectively..The Green Plains Partners credit facility was amended on July 20, 2021, to $60.0 million and includesIncludes $0.5 million of unamortized debt issuance costs as of both March 31,June 30, 2022 and December 31, 2021, respectively.
June 30, 2022 December 31, 2021 Green Plains Finance Company, Green Plains Grain and Green Plains Trade: $350.0 million revolver $ 280,000 $ — Green Plains Commodity Management: $40.0 million hedge line 10,913 16,210 Green Plains Trade: $300.0 million revolver — 137,208 Green Plains Grain: $100.0 million revolver — 20,000 $50.0 million inventory financing $50.0 million inventory financing 17,492 — $ 308,405 $ 173,418 mature on July 1, 2024, unless earlier converted, redeemed or repurchased. The 4.00% notes will be convertible, at the option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common stock, or a combination of cash and shares of the company’s common stock until the close of business on the scheduled trading day immediately preceding the maturity date. However, before January 1, 2024, the 4.00% notes will not be convertible unless certain conditions are satisfied. The initial conversion rate is 64.1540 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately $15.59 per share.The conversion rate will be subject to adjustment upon the occurrence of certain events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and warrants; spinoffs; the event of a cash dividend or distribution; or a tender or exchange offering. In addition, the company may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including the company’s calling the 4.00% notes for redemption.On and after July 1, 2022, and prior to the maturity date, the company may redeem all, but not less than all, of the 4.00% notes for cash if the sale price of the company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the company delivers notice of the redemption. The redemption price will equal 100% of the principal amount of the 4.00% notes to be redeemed, plus anyaccrued and unpaid interest to, but excluding, the redemption date. In addition, upon the occurrence of a fundamental change, holders of the 4.00% notes will have the right, at their option, to require the company to repurchase the 4.00% notes in cash at a price equal to 100% of the principal amount of the 4.00% notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.$135.7$135.7 million aggregate principal amount of the 4.125% notes, in privately negotiated transactions. Pursuant to the guidance within ASC 470, Debt, the company recorded a loss upon extinguishment of $22.1 million. This charge included $1.2 million of unamortized debt issuance costs related to the principal balance extinguished.$5.2$10.9 million short-term notes payable related to this credit facility as of March 31,June 30, 2022.March 31,June 30, 2022.March 31,June 30, 2022.March 31,June 30, 2022, there were approximately $108.8$109.5 million of net assets at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.1.71.6 million shares remain outstanding and available. The plan provides for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, restricted and deferred stock unit awards and performance share awards to eligible employees, non-employee directors and consultants. The company measures stock-based compensation at fair value on the grant date, with no adjustments for estimated forfeitures. The company records noncash compensation expense related to equity awards in its consolidated financial statements over the requisite period on a straight-line basis.threesix months ended March 31,June 30, 2022, is as follows:
Shares and
Deferred Stock
Units
Average Grant-
Date Fair Value
Remaining
Vesting Term
(in years)Non-Vested
Shares and
Deferred Stock
UnitsWeighted-
Average Grant-
Date Fair ValueWeighted-Average
Remaining
Vesting Term
(in years)Non-Vested at December 31, 2021 793,337 $ 14.64 Granted 288,130 30.15 Forfeited (5,954) 20.12 Vested (275,440) 15.69 Non-Vested at June 30, 2022 800,073 $ 19.82 2.2 threesix months ended March 31,June 30, 2022, is as follows:
Shares
Average Grant-
Date Fair Value
Remaining
Vesting Term
(in years)Performance
SharesWeighted-
Average Grant-
Date Fair ValueWeighted-Average
Remaining
Vesting Term
(in years)Non-Vested at December 31, 2021 486,155 $ 13.93 Granted 146,589 29.47 Vested (149,933) 15.31 Non-Vested at June 30, 2022 Non-Vested at June 30, 2022 482,811 $ 18.22 2.3 threesix months ended March 31,June 30, 2022.stock-basedstock-based and unit-based payment plans were $1.9$2.4 million and $0.9$4.3 million for the three and six months ended March 31,June 30, 2022, respectively, and $1.1 million and $2.0 million for the three and six months ended June 30, 2021, respectively. At March 31,June 30, 2022, there was $19.2$17.9 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of approximately 2.52.2 years. The potential tax benefit related to stock-based payment is approximately 21.4%21.6% of these expenses.
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 EPS - basic: Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ (15,076) $ 3,198 Weighted average shares outstanding - basic 53,033 45,425 52,960 41,581 EPS - basic $ 0.87 $ 0.21 $ (0.28) $ 0.08 EPS - diluted: Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ (15,076) $ 3,198 Interest and amortization on convertible debt, net of tax effect: 4.125% convertible notes due 2022 314 — — — 4.00% convertible notes due 2024 596 577 — — 2.25% convertible notes due 2027 1,261 1,216 — — Net income (loss) attributable to Green Plains - diluted $ 48,569 $ 11,536 $ (15,076) $ 3,198 Weighted average shares outstanding - basic 53,033 45,425 52,960 41,581 Effect of dilutive convertible debt: 4.125% convertible notes due 2022 1,226 — — — 4.00% convertible notes due 2024 4,106 4,106 — — 2.25% convertible notes due 2027 7,273 7,273 — — Effect of dilutive warrants 757 669 — 345 Effect of dilutive stock-based compensation awards 500 698 — 749 Weighted average shares outstanding - diluted 66,895 58,171 52,960 42,675 EPS - diluted $ 0.73 $ 0.20 $ (0.28) $ 0.07 — 1,226 13,853 10,233 55,55583,333 are exercisable as a result of achieving certain earn-out provisions and 219,445191,667 are contingent upon certain earn-out provisions, are treated as liability based awards, and valued quarterly using the company’s stock price. These warrants could potentially dilute basic earnings per share in future periods. The exercise price of the warrants is $22.00 and expiration dates are December 8, 2025 for 275,000 warrants, February 9, 2026 for 275,000 warrants and April 28, 2026 for 2,000,000 warrants., pursuant to which the noteholders agreed to exchange $51.0 million in aggregate principal for 3,568,705 shares of the company’s common stock at an implied price of $26.80.
March 31,June 30, 2022 and 2021 are as follows (in thousands):Common Stock Additional
Paid-in
CapitalRetained
Earnings
(Deficit)Accum. Other
Comp. Income
(Loss)Treasury Stock Total
Green Plains
Stockholders'
EquityNon-
Controlling
InterestsTotal
Stockholders'
EquityShares Amount Shares Amount Balance, December 31, 2021 61,840 $ 62 $ 1,069,573 $ (15,199) $ (12,310) 8,244 $ (91,626) $ 950,500 $ 151,519 $ 1,102,019 Net income (loss) — — — (61,474) — — — (61,474) 5,602 (55,872) Distributions declared — — — — — — — — (5,122) (5,122) Other comprehensive income (loss) before reclassification — — — — 5,386 — — 5,386 — 5,386 Amounts reclassified from accumulated other comprehensive income (loss) — — — — (1,965) — — (1,965) — (1,965) Other comprehensive income (loss), net of tax — — — — 3,421 — — 3,421 — 3,421 Investment in subsidiary — — — — — — — — 24 24 Stock-based compensation 226 — (1,922) — — — — (1,922) 59 (1,863) Balance, March 31, 2022 62,066 $ 62 $ 1,067,651 $ (76,673) $ (8,889) 8,244 $ (91,626) $ 890,525 $ 152,082 $ 1,042,607 Net income — — — 46,398 — — — 46,398 6,322 52,720 Distributions declared — — — — — — — — (8,098) (8,098) Other comprehensive income (loss) before reclassification — — — — (10,535) — — (10,535) — (10,535) Amounts reclassified from accumulated other comprehensive income (loss) — — — — 2,515 — — 2,515 — 2,515 Other comprehensive income (loss), net of tax — — — — (8,020) — — (8,020) — (8,020) Investment in subsidiary — — — — — — — — 190 190 Stock-based compensation 21 — 2,270 — — — — 2,270 60 2,330 Balance, June 30, 2022 62,087 $ 62 $ 1,069,921 $ (30,275) $ (16,909) 8,244 $ (91,626) $ 931,173 $ 150,556 $ 1,081,729 Common Stock Additional
Paid-in
CapitalRetained
Earnings
(Deficit)Accum. Other
Comp. Income
(Loss)Treasury Stock Total
Green Plains
Stockholders'
EquityNon-
Controlling
InterestsTotal
Stockholders'
EquityShares Amount Shares Amount Balance, December 31, 2020 47,471 $ 47 $ 691,393 $ 50,793 $ (2,172) 11,813 $ (131,287) $ 608,774 $ 129,812 $ 738,586 Net income (loss) — — — (6,545) — — — (6,545) 4,566 (1,979) Distributions declared — — — — — — — — (1,395) (1,395) Other comprehensive income (loss) before reclassification — — — — (4,849) — — (4,849) — (4,849) Amounts reclassified from accumulated other comprehensive income (loss) — — — — (1,377) — — (1,377) — (1,377) Other comprehensive income (loss), net of tax — — — — (6,226) — — (6,226) — (6,226) Investment in subsidiaries — — — — — — — — 3,330 3,330 Issuance of warrants — — 3,431 — — — — 3,431 (3,431) — Issuance of common stock for cash at $23.00 per share, net of fees 8,752 9 191,125 — — — — 191,134 — 191,134 Stock-based compensation 230 — (3,000) — — — — (3,000) 79 (2,921) Balance, March 31, 2021 56,453 $ 56 $ 882,949 $ 44,248 $ (8,398) 11,813 $ (131,287) $ 787,568 $ 132,961 $ 920,529 Net income (loss) — $ — $ — $ 9,743 $ — — $ — $ 9,743 $ 6,374 $ 16,117 Distributions declared — $ — $ — $ — $ — — $ — $ — $ (1,395) $ (1,395) Other comprehensive income (loss) before reclassification — $ — $ — $ — $ 5,131 — $ — $ 5,131 $ — $ 5,131 Amounts reclassified from accumulated other comprehensive income (loss) — $ — $ — $ — $ 3,961 — $ — $ 3,961 $ — $ 3,961 Other comprehensive income (loss), net of tax — $ — $ — $ — $ 9,092 — $ — $ 9,092 $ — $ 9,092 Exchange of 4.00% convertible notes due 2024 — $ — $ 17,679 $ — $ — (3,569) $ 39,661 $ 57,340 $ — $ 57,340 Acquisition of FQT — $ — $ — $ — $ — — $ — $ — $ 1,861 $ 1,861 Warrant liability — $ — $ — $ — $ — — $ — $ — $ 1,278 $ 1,278 Stock-based compensation (20) $ 4 $ 324 $ — $ — — $ — $ 328 $ 80 $ 408 Balance, June 30, 2021 56,433 $ 60 $ 900,952 $ 53,991 $ 694 8,244 $ (91,626) $ 864,071 $ 141,159 $ 1,005,230
March 31,
OperationsThree Months Ended
June 30,Six Months Ended
June 30,Statements of
Operations
Classification2022 2021 2022 2021 Gains (losses) on cash flow hedges: Commodity derivatives $ (1,111) $ (23,692) $ (1,739) $ (38,880) (1) Commodity derivatives (2,282) 18,485 1,012 35,484 (2) Total losses on cash flow hedges Total losses on cash flow hedges (3,393) (5,207) (727) (3,396) (3) Income tax benefit Income tax benefit 878 1,246 177 812 (4) Amounts reclassified from accumulated other comprehensive loss Amounts reclassified from accumulated other comprehensive loss $ (2,515) $ (3,961) $ (550) $ (2,584) LossIncome (loss) before income taxes and income (loss) from equity method investees
benefitexpense of $1.2$2.9 million for the three months ended March 31,June 30, 2022, compared with income tax expensebenefit of $1.9$4.8 million for the same period in 2021.The increase in income tax benefit was primarily due to the releaseamount of a valuation allowance against decreases in certain deferred tax assets for the three months ended March 31, 2022 compared to income tax expense recorded for the three months ended March 31, 2021,June 30, 2022 was primarily due to reflectan increase in the recording of a valuation allowance recorded against increases in certain deferred tax assets.The amount of unrecognized tax benefits for uncertain tax positions was $51.4 million as of March 31, 2022 and December 31, 2021.15.615.4 years. The land and facility leases include renewal options. The renewal options are included in the lease term only for those sites or locations that are reasonably certain to be renewed. Equipment renewals are not considered reasonably certain to be exercised as they typically renew with significantly different underlying terms.Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Lease expense Operating lease expense $ 5,390 $ 4,908 $ 10,388 $ 9,842 226 522 405 591 Total lease expense $ 5,616 $ 5,430 $ 10,793 $ 10,433
March 31,
March 31,Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,029 $ 4,814 $ 9,874 $ 9,646 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7,013 4,308 11,723 10,772 Right-of-use assets and lease obligations derecognized due to lease modifications: Operating leases — — — 51 June 30, 2022 December 31, 2021 Weighted average remaining lease term 5.3 years 5.5 years Weighted average discount rate 4.04 % 4.16 % Year Ending December 31, Amount 2022 $ 10,455 2023 18,907 2024 16,365 2025 11,996 2026 6,098 Thereafter 14,834 Total 78,655 Less: Present value discount (8,891) Lease liabilities $ 69,764 March 31,June 30, 2022, the company had contracted future purchases of grain, natural gas, and distillers grains, valued at approximately $532.4$511.9 million and future commitments for storage and transportation, valued at approximately $31.4$25.6 million.
March 31,June 30, 2022, we own a 48.9% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights. The public owns the remaining 49.1% limited partner interest. The partnership is consolidated in our financial statements.•Ethanol Production. Our ethanol production segment includes the production of ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil at 11 ethanol plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 330 million bushels of corn per year and producing approximately 1.0 billion gallons of ethanol, 2.5 million tons of distillers grains and Ultra-High Protein and 290 million pounds of industrial grade corn oil, making us one of the largest ethanol producers in North America.•Agribusiness and Energy Services. Our agribusiness and energy services segment includes grain procurement, with approximately 27.0 million bushels of grain storage capacity, and our commodity marketing business, which markets, sells and distributes ethanol, distillers grains, Ultra-High Protein and corn oil produced at our ethanol plants. We also market ethanol for a third-party producer as well as buy and sell ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein, corn oil, grain, natural gas and other commodities in various markets.•Partnership. Our master limited partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses. The partnership’s assets include 29 ethanol storage facilities, four fuel terminal facilities and approximately 2,3002,530 leased railcars.by mid-2022,in the third and fourth quarter of 2022, and installation at certain of our remaining biorefineries is expected over the course of the next several years. Through our value-added ingredients initiative, we expect to produce Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater, increase production of corn oil as well produce other higher value products, such as post-MSC distillers grains.ThisThe anticipated completion date for this project is expected to be completed in 2024.commodities, specifically including market volatility related to corn as a result of current geopolitical events, including the war in Ukraine.New Financing to Replace Existing Working Capital FacilitiesMarchMay 25, 2022, Green Plains Finance Company, Green Plains Grain and Green Plains Trade,the company gave notice calling for the redemption of all its outstanding 4.00% Convertible Senior Notes due 2024, totaling an aggregate principal amount of which are$64.0 million. The conversion rate was 66.4178 shares ofwholly owned subsidiaries, together withcommon stock per $1,000 of principal.company, as guarantor, entered4.00% convertible notes were converted into a five-year, $350.0approximately 4.3 million senior secured sustainability-linked revolving Loan and Security Agreement (the “Facility”) with a groupshares of financial institutions led by ING Capital LLC (“ING”) as Agent and ING, PNC Capital Markets LLC, Fifth Third Bank, National Association, Bank of America, N.A. and BMO Harris Bank, N.A., as Joint Lead Arrangers. This transaction refinanced the separate credit facilities previously held by Green Plains Grain and Green Plains Trade. The Facility matures on March 25, 2027.firstsecond quarter of 2022, we experienced a weakstronger ethanol margin environment due to industry overproduction, combined with larger ethanol stocks, and a surge in COVID variants that hindered driving demand.environment. We maintained an average utilization rate of approximately 83.1%96.9% of capacity, resulting in ethanol production of 196.3231.4 mmg for the firstsecond quarter of 2022, compared with 178.0190.9 mmg, or 71.1%79.9% of capacity, for the same quarter last year. The increase in the average utilization rate was primarily due to nearing the completion of our plant modernization and upgrade program during the current quarter. Our operating strategy is to transform our company to a value-add agricultural technology company. However, in the current environment, we may continue to exercise operational discretion that results in reductions in production. Additionally, we may operate at less than our capacity resulting in lower production rates due to various construction projects. It is possible that production could be below minimum volume commitments in the future, depending on various factors that drive each biorefineries variable contribution margin, including future driving and gasoline demand for the industry. We are currently producing Ultra-High Protein at two locations and have also deployed FQT MSCTM Ultra-High Protein process technology at three additional locations, which we expect to be operational byin the middle to last halfthird and fourth quarter of 2022. We are striving to deploy the MSC™ protein technology across our platform to take advantage of the world’s growing demand for protein feed ingredients and low-carbon renewable corn oil.1.021.01 million barrels per day during the firstsecond quarter of 2022, which was 12.5%1.1% higher than the 0.911.0 million barrels per day for the same quarter last year. Refiner and blender input volume increased 6.1% to 840was steady 898 thousand barrels per day for the firstsecond quarter of 2022, compared with 792903 thousand barrels per day for the same quarter last year. Gasoline demand increased 0.5decreased 0.2 million barrels per day, or 6.3%2.3% during the firstsecond quarter of 2022 compared to the prior year. U.S. domestic ethanol ending stocks increased by approximately 5.41.2 million barrels compared to the prior year, or 25.6%5.4%, to 26.522.7 million barrels as of March 31,June 30, 2022. As of March 31, 2022,this filing, according to Prime the Pump, there were approximately 2,6302,690 retail stations selling E15 in 31 states, up from 2,555 at the beginning of the year, and 267approximately 390 suppliers at 113 pipeline terminal locations now offering E15 to wholesale customers.February 28,May 31, 2022, were approximately 267726 mmg, in line withup from the 266582 mmg for the same period of 2021. Canada was the largest export destination for U.S. ethanol accounting for 25% of domestic ethanol export volume. India, South Korea, Brazil, and Mexicothe Netherlands accounted for 17%, 11%, 8%, and 7%, respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from 1.31.4 to 1.51.6 billion gallons in 2022, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce GHG emissions through low carbon fuel programs and eliminate MTBE from their own fuel supplies.FFVFFVs and higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in U.S. surface transportation fleet market share. In addition, expansion of clean fuel programs in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how it is structured.proposedfinalized RVOs reducing the conventional ethanol RVOslevels for 2020 and 2021 to reflect lower fuel demand during the pandemic, and proposedfinalized an RVO at the statutory 15 billion gallons for 2022.It is unclear when or if theThe current EPA has indicated they will not propose a reset rulemaking, though they have stated an intention to propose a postpost-2022 "set" rulemaking by November 16, 2022, set rulemaking as requiredand finalize by law.RINsa RIN to each gallon of renewable fuelsfuel they produce and the RINs are detached when the renewable fuel is blended with transportation fuel domestically. Market participants can trade the detached RINs in the open market. The market price of detached RINs affects the price of ethanol in certain markets and can influence purchasing decisions by obligated parties.totalingerasing a total of 4.3 billion gallons of potential blending demand erased.demand. The EPA, under the current administration, reversed the three SREs issued in the final weeks of the previous administration, and in conjunction with the RVO rulemaking for 2020, 2021 and 2022, they proposed denyingdenied all pending SREs. There are multiple legal challenges to how the EPA has handled SREs and RFS rulemakings. On April 22, 2022, the U.S. District Court for D.C. approved a consent decree agreement between Growth Energy and EPA that requires the agency to finalize the RVO proposals by no later than June 3, 2022. to non-FFVs is uncertain. The Supreme Court declined to hear a challenge to this ruling. On April 12, 2022, the President announced that he has directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the summer months, and that the temporary waiver should be extended as long as the gasoline supply emergency lasts. As of this filing, E15 is sold year-round at approximately 2,690 stations in 31 states.$1 billion$500 million in USDA grants for biofuel infrastructure from 2022 to 2031.includesincluded biofuels producers as eligible for some of this aid, and in June of 2021, USDA announced a $700.0 million Biofuel Producer Program to distribute these funds to impacted producers of ethanol, biodiesel and other renewable fuels, and they provided the specifics for the application process in December of 2021. Applications were due in February 2022, and the USDA has indicated they will calculate and distribute paymentsdistributed funds to us in the first halfamount of $27.7 million in May 2022., general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment and the loss (gain) on sale of assets. When we evaluate segment performance, we review the following segment information as well as earnings before interest, income taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA.AsTable of March 31, 2022, we, together with our subsidiaries, Contentsown a 48.9% limited partner interest and a 2.0% general partner interest in the partnership and own all of the partnership’s incentive distribution rights, with the remaining 49.1% limited partner interest owned by public common unitholders. We consolidate the financial results of the partnership, and record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.
March 31,Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Revenues: Ethanol production: Revenues from external customers $ 861,166 $ 555,273 55.1% $ 1,498,719 $ 978,995 53.1% Intersegment revenues — — * — — * Total segment revenues 861,166 555,273 55.1 1,498,719 978,995 53.1 Agribusiness and energy services: Revenues from external customers 150,316 167,975 (10.5) 293,193 296,796 (1.2) Intersegment revenues 7,243 5,512 31.4 13,078 10,635 23.0 Total segment revenues 157,559 173,487 (9.2) 306,271 307,431 (0.4) Partnership: Revenues from external customers 912 1,170 (22.1) 1,917 2,267 (15.4) Intersegment revenues 18,742 18,531 1.1 36,837 37,840 (2.7) Total segment revenues 19,654 19,701 (0.2) 38,754 40,107 (3.4) Revenues including intersegment activity 1,038,379 748,461 38.7 1,843,744 1,326,533 39.0 Intersegment eliminations (25,985) (24,043) 8.1 (49,915) (48,475) 3.0 $ 1,012,394 $ 724,418 39.8% $ 1,793,829 $ 1,278,058 40.4%
Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Cost of goods sold: Ethanol production $ 804,821 $ 493,656 63.0% $ 1,466,381 $ 909,181 61.3% Agribusiness and energy services 143,656 170,181 (15.6) 278,095 286,255 (2.9) Intersegment eliminations (27,163) (24,429) 11.2 (50,653) (46,795) 8.2 $ 921,314 $ 639,408 44.1% $ 1,693,823 $ 1,148,641 47.5% Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Gross margin: Ethanol production $ 56,345 $ 61,617 (8.6)% $ 32,338 $ 69,814 (53.7)% Agribusiness and energy services 13,903 3,306 320.5 28,176 21,176 33.1 Partnership 19,654 19,701 (0.2) 38,754 40,107 (3.4) Intersegment eliminations 1,178 386 205.2 738 (1,680) (143.9) $ 91,080 $ 85,010 7.1% $ 100,006 $ 129,417 (22.7)% Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Operating income (loss): Ethanol production $ 27,506 $ 33,543 (18.0)% $ (23,652) $ 13,223 (278.9)% Agribusiness and energy services 10,281 (851) * 20,689 12,495 65.6 Partnership 12,104 11,916 1.6 23,913 24,787 (3.5) Intersegment eliminations 1,178 386 205.2 738 (1,680) (143.9) (17,228) (13,961) 23.4 (35,749) 13,555 (363.7) $ 33,841 $ 31,033 9.0% $ (14,061) $ 62,380 (122.5)%
March 31,
March 31,Operating loss for ethanol production includes an inventory lower of cost or net realizable value adjustment of $13.2 million for the three months ended March 31, 2022.(2)Corporate activities for the three and six months ended March 31,June 30, 2021, includedincludes a $36.9$3.8 million pretaxloss on sale of assets and a $33.1 million gain on sale of assets.assets, respectively.
March 31,Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Depreciation and amortization: Ethanol production $ 19,114 $ 18,483 3.4 % $ 37,546 $ 37,011 1.4 % Agribusiness and energy services 470 595 (21.0) 934 1,202 (22.3) Partnership 823 795 3.5 1,721 1,682 2.3 Corporate activities 560 659 (15.0) 1,165 1,318 (11.6) $ 20,967 $ 20,532 2.1 % $ 41,366 $ 41,213 0.4 % and adjusted EBITDA, and segment EBITDA as segment measures of profitability to compare the financial performance of our reportable segments and manage those segments. EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs. Adjusted EBITDA includes adjustments related to gains or losses on sale of assets, other income associated with the USDA COVID-19 relief grant, and our proportional share of EBITDA adjustments of our equity method investees. We believe EBITDA, adjusted EBITDA and adjustedsegment EBITDA are useful measures to compare our performance against other companies. EBITDA and adjusted EBITDAThese measures should not be considered an alternative to, or more meaningful than, net income, which is prepared in accordance with GAAP. EBITDA, adjusted EBITDA, and adjustedsegment EBITDA calculations may vary from company to company. Accordingly, our computation of EBITDA, adjusted EBITDA, and adjustedsegment EBITDA may not be comparable with a similarly titled measure of other companies.
lossincome (loss) including noncontrolling interest to adjusted EBITDA (in thousands):Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Net income (loss) $ 52,720 $ 16,117 $ (3,152) $ 14,138 7,800 19,058 16,606 50,737 Income tax expense (benefit) 2,895 (4,783) 1,742 (2,921) 20,967 20,532 41,366 41,213 EBITDA 84,382 50,924 56,562 103,167 (27,712) — (27,712) — Loss (gain) on sale of assets, net — 3,825 — (33,068) Proportional share of EBITDA adjustments to equity method investees 45 50 90 94 Adjusted EBITDA $ 56,715 $ 54,799 $ 28,940 $ 70,193
March 31,March 31,June 30, 2021, includes a loss upon extinguishmentlosses on settlement of convertible notes of $22.1 million.$9.5 million and $31.6 million, respectively.the change inamortization of operating lease right-of-use assets and amortization of debt issuance costs.Three Months Ended
June 30,%
VarianceSix Months Ended
June 30,%
Variance2022 2021 2022 2021 Adjusted EBITDA: Ethanol production $ 74,680 $ 52,052 43.5% $ 41,954 $ 50,263 (16.5)% Agribusiness and energy services 10,750 (254) * 21,473 13,697 56.8 Partnership 13,123 12,880 1.9 26,005 26,813 (3.0) Intersegment eliminations 1,657 386 329.3 738 (1,680) (143.9) (15,828) (14,140) 11.9 (33,608) 14,074 (338.8) EBITDA 84,382 50,924 65.7 56,562 103,167 (45.2) (27,712) — * (27,712) — * Loss (gain) on sale of assets, net — 3,825 * — (33,068) * Proportional share of EBITDA adjustments to equity method investees 45 50 (10.0) 90 94 (4.3) $ 56,715 $ 54,799 3.5% $ 28,940 $ 70,193 (58.8)%
March 31,Includes an inventory lower of cost or net realizable value adjustment of $13.2 million for the three months ended March 31, 2022.(2)Includes corporate expenses, offset by thea loss on sale of assets of $3.8 million and a $33.1 million gain on sale of assets of $36.9 million for the three and six months ended March 31, 2021.June 30, 2021, respectively.March 31,June 30, 2022 Compared with the Three Months Ended March 31,June 30, 2021$227.8$288.0 million for the three months ended March 31,June 30, 2022 compared with the same period in 2021 primarily due to higher prices and higher volumes sold on ethanol, distillers grains, and corn oil andoil.trading revenues within our agribusiness and energy services segment.Operating loss increased $79.2$36.6 million and adjusted EBITDA decreased $43.2increased $1.9 million for the three months ended March 31,June 30, 2022, compared with the same period last year primarily due to the $27.7 million USDA COVID-19 relief grant received, which is excluded from adjusted EBITDA, and also higher margins on agribusiness and energy services offset by slightly lower ethanol crush margins. Interest expense decreased $11.3 million for the three months ended June 30, 2022, compared with the same period in 2021 primarily due to a loss on settlement of convertible notes of $9.5 million for the three months ended June 30, 2021. Income tax expense was $2.9 million for the three months ended June 30, 2022, compared with income tax benefit of $4.8 million for the same period in 2021 primarily due to an increase of a valuation allowance against deferred tax assets included in AOCI for the three months ended June 30, 2022, compared to a decrease of the valuation allowance recorded against deferred tax assets included in AOCI during the three months ended June 30, 2021.Three Months Ended
June 30,2022 2021 % Variance Ethanol sold (thousands of gallons) 231,413 190,913 21.2% Distillers grains sold (thousands of equivalent dried tons) 593 494 20.0 Corn oil sold (thousands of pounds) 72,232 54,875 31.6 Corn consumed (thousands of bushels) 80,218 65,424 22.6% $22.9$34.1 million for the threesix months ended March 31,June 30, 2022, compared with the same period in 2021 primarily due to the loss upon extinguishment of convertible notes of $22.1$31.6 million for the threesix months ended March 31,June 30, 2021. Income tax benefitexpense was $1.2$1.7 million for the threesix months ended March 31,June 30, 2022, compared with income tax expensebenefit of $1.9$2.9 million for the same period in 2021 primarily due to the releaseincrease of a valuation allowance recorded against decreasesincreases in certain deferred tax assets included in AOCI for the threesix months ended March 31,June 30, 2022, compared to a decrease of the valuation allowance recorded against certaindecreases in deferred tax assets included in AOCI during the threesix months ended March 31,June 30, 2021.first quarteryear-to-date segment performance.
Six Months Ended
June 30,2022 2021 % Variance Ethanol sold (thousands of gallons) 427,761 368,913 16.0% Distillers grains sold (thousands of equivalent dried tons) 1,109 967 14.7 Corn oil sold (thousands of pounds) 131,527 101,438 29.7 Corn consumed (thousands of bushels) 148,522 127,020 16.9% $213.8$519.7 million for the threesix months ended March 31,June 30, 2022, compared with the same period in 2021, primarily due to higher volumes soldprices and higher pricesvolumes sold of ethanol, distillers grains and corn oil.$246.0$557.2 million for the threesix months ended March 31,June 30, 2022, compared with the same period last year primarily due to higher corn prices and volumes sold and corn costs.sold. Operating loss increased $30.8$36.9 million and EBITDA decreased $30.9$8.3 million for the threesix months ended March 31,June 30, 2022 compared with the same period in 2021 primarily due to decreased margins on ethanol production as well as an inventory lower of cost or net realizable value adjustment of $13.2 million.production. Depreciation and amortization expense for the ethanol production segment was $18.4$37.5 million for the threesix months ended March 31,June 30, 2022, compared with $18.5$37.0 million for the same period last year.increased $14.8decreased $1.2 million while operating income decreased $2.9increaseddecreased $3.2increased $7.8 million for the threesix months ended March 31,June 30, 2022, compared with the same period in 2021. The increasedecrease in revenues was primarily due to an increasea decrease in ethanol distillers grain and corn oil trading activity driven by higher prices.volume. Operating income and EBITDA decreasedincreased primarily as a result of lowerhigher trading margins.$1.3$1.4 million for the threesix months ended March 31,June 30, 2022, compared with the same period for 2021. Storage and throughput services revenue decreased $0.7 million due to a reduction in the contracted minimum volume commitment as a result of the sale of the Ord ethanol plant in the first quarter of 2021. Railcar transportation services revenue decreased $0.4$0.1 million primarily due to a reduction in average volumetricslightly lower capacity provided.fees. Terminal services revenue decreased $0.1 million due to lower minimum volume commitments. Trucking and other revenue decreased $0.3$0.5 million primarily as a result of lower affiliatenon-affiliate freight volume. Operating income decreased $0.9 million and EBITDA both decreased $1.1$0.8 million for the threesix months ended March 31,June 30, 2022, compared with the same period in 2021.decreasedincreased by $0.5$1.4 million for the threesix months ended March 31,June 30, 2022, compared with the same period in 2021 primarily due to decreased partnership revenues.a decreasean increase in corporate activities of $46.0$49.3 million for the threesix months ended March 31,June 30, 2022, compared to the same period in 2021, primarily due to the $36.9$33.1 million gain on sale of assets recorded in the same period last year and the $3.8 million loss on sale of assets in 2021, as well as increased personnel costs and professional fees during the threesix months ended March 31,June 30, 2022.
benefitexpense of $1.2$1.7 million for the threesix months ended March 31,June 30, 2022, compared with income tax expensebenefit of $1.9$2.9 million for the same period in 2021. The decrease in the amount of tax expense recorded for the three months ended March 31, 2022 was2021 primarily due to the increase of a valuation allowance recorded against increases in deferred tax assets included in AOCI for the six months ended June 30, 2022, compared to a decrease inof the valuation allowance recorded against certaindecreases in deferred tax assets included in AOCI during the period.Income (Loss) from Equity Method InvesteesIncome (loss) from equity method investees decreased $1.0 million for the threesix months ended March 31, 2022 compared with the same period last year.March 31,June 30, 2022, we had $509.2$508.2 million in cash and equivalents, excluding restricted cash. Additionally, we had $95.1$71.1 million in restricted cash and $24.9$25.0 million in marketable securities at March 31,June 30, 2022. We also had $45.0$70.0 million available under our committed revolving credit agreement, subject to restrictions and other lending conditions. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution. At March 31,June 30, 2022, our subsidiaries had approximately $108.8$109.6 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.$162.5$106.6 million for the threesix months ended March 31,June 30, 2022, compared with net cash provided used in operating activities of $37.0$30.2 million for the same period in 2021. Operating activities compared to the prior year were primarily affected by a higher net loss due to weak ethanol crush margins as well as increases in inventory of $46.1approximately $31.3 million primarily due to higher trade and ethanol inventory as a result of higher production volumes when compared to the same period of the prior year. Net cash providedused by investing activities was $37.9$35.3 million for the threesix months ended March 31,June 30, 2022, compared with net cash provided by investing activities of $42.3$9.9 million for the same period in 2021. Investing activities compared to the prior year were primarily affected by the purchases of fixed assets offset by proceeds from the sale of marketable2022, and proceeds from the sale of assets during the same period in 2021.2022. Net cash provided by financing activities was $167.9$160.3 million for the threesix months ended March 31,June 30, 2022, compared with net cash used inprovided by financing activities of $374.3$360.8 million for the same period in 2021, primarily due to proceeds from the issuance of common stock and debt offerings during the same period in 2021.incurredpaid capital expenditures of approximately $62.0$128.3 million during the threesix months ended March 31,June 30, 2022, primarily for Ultra High-Protein expansion projects at various facilities and for various maintenance projects. Capital spending for the remainder of 2022 is expected to be between $190.0$120.0 million and $240.0$170.0 million for various projects, including the Ultra High-Protein expansion at our Obion, Central City and Mount Vernon locations, which are expected to be financed with cash on hand and by cash provided by operating activities.notice.notice. We did not repurchase any shares during the firstsecond quarter of 2022. To date, we have repurchased 7,396,936 of common stock for approximately $92.8 million under the program.March 31,June 30, 2022. Based on our forecasts, we believe we will maintain compliance at each of our subsidiaries for the next twelve months or have sufficient liquidity available on a consolidated basis to resolve noncompliance. We cannot provide assurance that actual results will approximate our forecasts or that we will inject the necessary capital into a subsidiary to maintain compliance with its respective covenants. In the event a subsidiary is unable to comply with its debt covenants, the subsidiary’s lenders may determine that an event of default has occurred, and following notice, the lenders may terminate the commitment and declare the unpaid balance due and payable.various credit facilities.our Green Plain Partners term loan and our inventory financing agreement with Macquarie. The administrator of LIBOR ceased the publication of the one week and two month LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rate Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new reference rate, the SOFR, calculated using short-term repurchase agreements backed by Treasury securities. The potential effect of any such event on interest expense cannot yet be determined.March 31,June 30, 2022, the outstanding principal balance on the 2.25% notes was $230.0 million. We anticipate we will settle the 4.125% notes in a combination of cash and common stock.March 31,June 30, 2022, the outstanding principal balance on the 4.125% notes was $34.3 million. We anticipate we will settle the 4.125% notes in a combination of cash and common stock.March 31,June 30, 2022, the outstanding principal balance was $305.0$280.0 million on the facility and the interest rate was 3.67%4.69%.March 31,June 30, 2022, the outstanding principal balance was $5.2$10.9 million on the facility and the interest rate was 1.83%3.25%.March 31,June 30, 2022, the outstanding principal balance was $125.0 million on the loan and the interest rate was 11.75%.March 31,June 30, 2022, the outstanding principal balance was $75.0 million on the loan and the interest rate was 6.52%5.02%.March 31,June 30, 2022, the term loan had a balance of $59.0 million and an interest rate of 8.83%9.83%.March 31,June 30, 2022 totaled $76.1$78.7 million. As of March 31,June 30, 2022, we had contracted future purchases of grain, natural gas, and distillers grains valued at approximately $532.4$511.9 million and future commitmentsapproximately $31.4approximately $25.6 million. Refer to Note 13 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.March 31,June 30, 2022, we had $903.8$902.6 million in debt, $369.2$367.4 million of which had variable interest rates. A 10% increase in interest rates would affect our interest cost by approximately $1.6$2.0 million per year.March 31,June 30, 2022, revenues included net lossesgains of $6.0$8.5 million and $2.5 million, respectively, and cost of goods sold included net gains of $0.2 million and net losses of $62.4$62.2 million, respectively, associated with derivative financial instruments.March 31,June 30, 2022, which is as follows (in thousands):
Requirements for the
Next 12 Months (1)
Measure
Approximate 10%
Change in PriceCommodity Unit of
MeasureNet Income Effect of
Approximate 10%
Change in PriceEthanol 958,000 Gallons $162,656 Corn 330,000 Bushels $152,692 Distillers grains 2,500 $38,761 Corn oil 290,000 Pounds $10,094 Natural gas 27,700 MmBTU $3,029 our inventories, physical purchase and sale contracts and derivatives are marked to market. Our inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories. To reduce commodity price risk caused by market fluctuations for purchase and sale commitments of grain and grain held in inventory, we enter into exchange-traded futures and options contracts that serve as economic hedges.March 31,June 30, 2022 as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act and concluded that our disclosure controls and procedures were effective.
In recent years, theThe spread between ethanol and corn prices has fluctuatedcan fluctuate widely, narrowed significantly and has been negative at times. Fluctuations are likely to continue. A sustained narrow spread or further reduction in the spread between ethanol and corn prices as a result of increased corn prices or decreased ethanol prices, would adversely affect our results of operations and financial position. Should our combined revenue from ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil fall below our cost of production, we could decide to slow or suspend production at some or all of our ethanol plants, which also could adversely affect our results of operations and financial position.damagingor regional growing conditions, such as plant disease or adverse weather, including drought, as well as global conflicts.as required by statute.firstsecond quarter of 2022:
Shares Withheld for
Employee Awards
Paid per SharePeriod Total Number of
Shares Withheld for
Employee AwardsAverage Price
Paid per ShareApril 1 - April 30 — $ — May 1 - May 31 10,734 31.05 June 1 - June 30 — — Total 10,734 $ 31.05 firstsecond quarter of 2022. Since inception of the repurchase program, the company has repurchased 7,396,936 shares of common stock for approximately $92.8 million under the program.
3.2 10.1 *10.3March 31,June 30, 2022, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial StatementsMarch 31,June 30, 2022, formatted in iXBRL.*Represents management compensatory contract
SIGNATURES
Date: May 3, 2022(Registrant) Date: August 2, 2022 By: /s/ Todd A. Becker _ Todd A. Becker
President and Chief Executive Officer (Principal Executive Officer)
Date: May 3,August 2, 2022/s/ G. Patrich Simpkins Jr. _G. Patrich Simpkins Jr.
Chief Financial Officer (Principal Financial Officer)